<PAGE>
CHANCELLOR LGT
ASSET MANAGEMENT
OVER 25 YEARS
OF INVESTING
WORLDWIDE
GT GLOBAL
INTERNATIONAL
GROWTH FUND
ANNUAL REPORT
DECEMBER 31, 1996
[LOGO]
<PAGE>
TABLE
OF CONTENTS
<TABLE>
<S> <C>
Message from the
President............ 1
Report from the Fund
Managers and Key
Portfolio Holdings... 2
Report of Independent
Accountants.......... F1
Financial
Statements........... F2
Portfolio holdings'
and views of the
Funds' managers
described in this
annual report are as
of the date of the
interview, unless
otherwise noted, and
are subject to
change.
</TABLE>
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
MESSAGE FROM THE PRESIDENT
Dear Investor,
Fiscal 1996 has been a year of economic strengthening, and the GT Global
Funds have benefited from low inflation and low interest rates worldwide.
We're proud of their performance over the past year and remain enthusiastic
about their long-term potential.
Consistent, above-average performance of GT Global Funds is our priority. To
that end, we enhanced the breadth and depth of our investment capabilities
this fall when Liechtenstein Global Trust (LGT), the parent company of GT
Global, acquired a premier institutional money manager, Chancellor Capital
Management. On October 31, 1996, Chancellor merged with LGT Asset Management,
the Funds' advisor, and the combined entity is now known as Chancellor LGT
Asset Management. This acquisition increased assets entrusted to LGT to over
$80 billion.
We are confident about the partnership's success because both firms share a
commitment to providing investors around the world with solutions to their
investment needs through combined, top-notch expertise. Individual investors
now have access to the same high-quality management services enjoyed by over
320 institutional investors, including some of the country's largest
organizations.
Chancellor's strengthsdisciplined U.S. equity and fixed income processes and
professionals, coupled with proven fundamental and quantitative investment
capabilitiesrepresent an ideal complement to LGT's advantages as an
experienced global investment manager with an extensive global
infrastructure. Chancellor LGT Asset Management's global investment team
includes 12 economists, 98 portfolio managers, 72 analysts and 19 traders
located in nine regional offices.
Warren Shaw, LGT's new Global Chief Investment Officer, has been the
principal architect of Chancellor's investment policies, with excellent
results. The disciplined, repeatable process he created leverages the
effectiveness of a strong investment team approach.
As always, we appreciate your continued confidence. Should you or your
adviser have any questions regarding GT Global Funds, please call us at
800-824-1580. One of our registered representatives will be happy to assist
you.
Sincerely,
/s/ WILLIAM J. GUILFOYLE
William J. Guilfoyle
President
GT Global Mutual Funds
1
<PAGE>
INVESTMENT OBJECTIVE
The GT Global
International Growth
Fund seeks long-term
growth of capital by
investing primarily in
equity securities of
companies located
outside the U.S.
GT GLOBAL INTERNATIONAL GROWTH FUND
PERFORMANCE SUMMARY
GT GLOBAL
INTERNATIONAL
GROWTH FUND MSCI-EAFE
CLASS A Index
7/19/85 9525 10000
9534.53 9903.93
9448.8 10225.1
9848.85 10826.7
10506.1 11566.6
11144.2 12044.9
11877.7 12618.9
12163.4 12938.9
12954 14376.2
14167.8 16401.8
15310.3 17480.2
14893 16707
16005.8 17850.4
17406.7 18955.4
18400.2 20828.4
17923.3 20619.5
16423.1 19246.7
17645.1 20360.4
18251.2 21444.5
18728.1 23726.8
19473.2 24443
20356 26451.9
21426.8 29255.4
21900.5 29260.7
22147.6 28333.8
23578.8 28289.3
24433.4 30416.3
25185 29943
18255.5 25753
17773.8 26012.5
19379.4 26791.3
19786.4 27275.8
20430.9 29100.9
21312.8 30895.7
21832.9 31350.4
21403.2 30352.4
21267.5 29558.6
21459.8 30492.1
20747.4 28515.5
21267.5 29767.2
22330.3 32321.1
22929.6 34253.1
23137.8 34450.2
24310.7 35063.4
24686.5 35250.4
25176.1 34565.3
26166.7 34892.8
25882 33000.4
25745.4 32452.2
27544.5 36534.2
28626.2 34897.9
29787.7 36494
28455.5 35034.9
29685.2 36803.3
32060.3 38170.1
31540.4 36757.5
30673.9 34199.8
31089.8 30644
30258 30409
31817.6 33888
32476.2 33597.7
33585.3 34079.6
30361.9 30779.4
27207.9 26498.8
28802.2 30636.3
27970.4 28837.9
27473.5 29316.3
28070.8 30272.7
29862.5 33526.8
10/31/90 30389.5 31522.2
30494.9 31840.9
31584 32182.6
30389.5 29826.2
31513.7 31299.7
30740.8 30671.7
31408.3 32409.6
31548.9 32877.1
30073.3 31351
31104.5 32979.9
31175.7 32285.1
31709.5 31138.4
30677.4 29091.4
31531.5 29237
33560.1 31203
32385.7 29733.4
30997.7 28981.9
30713 30809.6
29218.3 30211
29147.1 28635.4
29325 28913.7
29289.9 29072
29075.8 29077.1
29503.9 29964
31002.3 32584.6
32500.7 35685.9
32964.5 36448.3
32500.7 35888.1
33713.7 37152.6
35675.9 39166.6
35533.2 38293.6
36995.9 39482.1
35354.8 36039.2
39314.8 38649.7
41740.8 41925.7
40242.4 41818.2
37317 40025.9
37852.1 41733.1
37602.4 41502.4
37317 42098.2
38494.3 42512.3
40420.8 43528.2
38815.3 42166.8
39029.4 43580.8
37352.6 41495.8
36255.6 41765.4
33488 40170.9
32578.6 40065.9
32657.7 42576.1
33646.1 44188.7
33567.1 43673.3
33962.4 42919
36453.3 45602.7
36611.4 43874.2
37085.8 44742.4
36453.3 43551.2
36334.7 44774.4
37660.9 46589.8
38324.5 46792.1
38366 46962
38988.1 47971.2
39817.7 49377.7
39361.4 48480.8
39693.2 48765.5
38117.1 47352.4
38863.7 47468.4
39402.9 48741.4
39278.4 48254.8
40854.6 50186.8
12/31/96 41154.3 49553.3
The chart above shows the performance of the GT Global International Growth
Fund, Class A shares, since the Fund's inception versus the MSCI-EAFE Index.
This represents a cumulative return of 311.54% and an average annual total
return of 13.15% for the Fund. The chart assumes a hypothetical $10,000
initial investment in the Fund's Class A shares and reflects all Fund
expenses and the maximum 4.75% sales charge. A $10,000 investment in the
Fund's Class B shares at inception on April 1, 1993, would have been valued
at $12,607 on December 31, 1996. This figure reflects all Fund expenses and
the applicable contingent deferred sales charge (5% in the first year,
decreasing to 0% after six years) assuming a complete redemption at the end
of the period. A $10,000 investment in Advisor Class shares at inception on
June 1, 1995, would have been worth $12,358 on December 31, 1996.
AVERAGE ANNUAL TOTAL RETURNS %(1)
DECEMBER 31, 1996
<TABLE>
<CAPTION>
Share Class Without Sales Charge(2) With Sales Charge
1-Year 5-Year 10-Year LOF 1-Year 5-Year 10-Year LOF
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A(3) 9.28 5.76 8.47 13.63 4.09 4.73 7.94 13.15
Class B(3) 8.67 N/A N/A 7.04 3.80 N/A N/A 6.37
Advisor Class(4) 9.79 N/A N/A 14.28 N/A N/A N/A N/A
</TABLE>
HISTORICAL PERFORMANCE(2)
ANNUAL TOTAL RETURNS % (LAST 10 YEARS)
<TABLE>
<CAPTION>
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A 6.18(3) 19.39 38.56 -14.31 13.22 -5.83 34.23 -7.78 3.88 9.28
Class B N/A N/A N/A N/A N/A N/A 25.63(3) -8.36 3.15 8.67
</TABLE>
(1) Figures assume reinvestment of all dividends and capital gain
distributions at net asset value.
(2) This performance data do not reflect the maximum 4.75% sales charge and
the contingent deferred sales charge (5% in the first year, decreasing to 0%
after six years) for Class A and Class B shares, respectively, which if
included, would have reduced performance quoted.
(3) The Fund began operations on July 19, 1985; Class B shares
commenced on April 1, 1993.
(4) The Fund began offering Advisor Class shares on June 1, 1995. Advisor Class
shares are not sold directly to the general public and are only available
through certain employee benefit plans, financial institutions and other
entities that have entered into specific agreements with GT Global. Please
see the Alternative Purchase Plan section in the Fund's prospectus.
The above data represent past performance of the Fund's shares, which does
not guarantee future results. The investment return and principal value of an
investment in the Fund will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
2
<PAGE>
INTERVIEW WITH INTERNATIONAL CHIEF INVESTMENT OFFICER JANUARY, 1997
ROGER YATES
Q HOW DID THE FUND PERFORM?
A The Fund's total return for the 12 months ended
December 31, 1996, for Class A shares was 9.28%
(4.09% including the effect of the maximum 4.75%
sales charge). Total return for Class B shares was
8.67% (3.80% including the effect of the maximum
5% contingent deferred sales charge). Total return for
the Morgan Stanley Capital International-Europe,
Australia, Far East (MSCI-EAFE) Index(5) over the same
period was 6.36%.
The Fund outperformed the index primarily as a result
of country selection in Europe and being underweighted in Japan.
Q HOW IS CORPORATE REFORM TAKING ROOT
IN EUROPE?
A Corporate reform has been among the factors
responsible for the strength of continental European
stock markets over the last two years. Leading compa-
nies in countries such as France and Germany have
restructured to increase returns to shareholders. This
reform has involved divestiture of non-core operations,
reduction in staffing levels, introduction of schemes to
provide management incentives, and easing of legal
restrictions on hostile takeovers and share buybacks.
We believe this fundamental shift in corporate culture
represents a major opportunity for global investors.
Moreover, we view the development of many service
industries in continental Europe, such as management
consulting and temporary labor, as another area of
opportunity.
Q WHY DID YOU CUT BACK THE FUND'S POSITION
IN JAPAN?
A Our outlook for the Japanese stock market
remains bleak. The transitional period Japan entered
into in the early 1990s continued in 1996, with slug-
gish economic growth and deflation persisting
throughout the year. Japanese banks have yet to over-
come the bad debt crisis fueled by a collapse in prop-
erty and stock prices. The fragile financial system has
not only depressed consumer confidence, but could
also worsen as declining share prices erode the value of
banks' stock portfolios. This is problematic as these
portfolios provide a means of writing off bad loans and
keeping capital adequacy rates up to international
standards.
In addition, businesses have had difficulties coping
with slow growth, and company profits have proved
unsustainable with the drop-off in consumer demand
in the second half of the year. Meanwhile, although a
weaker yen has been a boon for exports, it's becoming
less of a positive factor as many companies have moved
production overseas in recent years. Moreover, we
expect the weakening yen will damage profit margins,
apart from the exporters, as input costs rise in a defla-
tionary environment.
Q WHAT ACCOUNTS FOR YOUR DECISION TO INCREASE
THE FUND'S EXPOSURE TO THE UK?
A Britain is second only to the U.S. as a home to
major corporations that can exploit worldwide mega-
trends and the growth of demand in emerging
markets. Furthermore, we view the strength of the UK
economy and the probability of a further rise in ster-
ling as positives. Despite concerns over political risk in
the run-up to the 1997 general election, we see no
need for pessimism. FTSE 100 stocks look set to
achieve 9%-10% growth in dividend per share, and
small and medium-sized companies appear to offer
even better value.
The consumer-led recovery augurs well for small
companies, which are priced on the same multiples as
large firms, even though most forecasters suggest the
outlook for both is equally bright. In 1987-88, small
companies were trading at a 30% premium to large
companies. We believe particular industries such as
media, publishing and building materials also offer
opportunities through restructuring.
Q WHAT HAS DRIVEN THE PERFORMANCE OF THE HONG
KONG MARKET?
A The Hong Kong market was driven by a recovery
in the property market and growing optimism about
the Chinese business cycle. At the sector level, red
chips (companies managed in Hong Kong but with
CONTINUED P.4
(5) MSCI-EAFE Index is an arithmetic average, weighted by market value, of
the performance of 1,098 securities listed on 20 major world stock exchanges.
It includes the effect of reinvested dividends and is measured in U.S.
dollars.
The index is unmanaged, not available for direct investment and does not
include the effects of sales charges and professional management fees.
3
<PAGE>
INTERVIEW WITH THE INTERNATIONAL CIO CONTINUED
substantial business operations in China) enjoyed a
period of especially strong performance. Moreover,
speculation about potential asset injection and spin-
offs helped add momentum to companies with
Chinese provincial or ministerial parentage.
The Hong Kong market is also optimistic that the
transition back to China will be smooth and that pros-
perity will be maintained, although, there is, of course,
the potential for market volatility with the handover.
We believe continuation of the cyclical recovery in
China will result in an eventual decoupling of Hong
Kong equities from the U.S. market, and feel the
potential for Hong Kong companies, red chips in
particular, to generate further value from China
should not be underestimated.
Q HOW HAVE THE FUND'S OTHER ASIAN
HOLDINGS FARED?
A Korea led the underperformers and continued to
disappoint investors. The MSCI Korea Index slid
another 20% in the last quarter of the year on deterio-
rating economic fundamentals, increasing stock
supply and political problems. The Thai market also
underperformed other regional markets as the
economy weakened and the poor earnings outlook
continued. Worries over banking and finance compa-
nies' bad loans were also a feature. Finally, Singapore's
GDP growth in 1996 was adversely affected by a slow-
down in the electronics cycle, and the market ended
on a down note.
Q WHAT ABOUT AUSTRALIA?
A The Australian market rose by nearly 18% in
1996, largely driven by easier monetary policy and a
consequent decline in bond yields, which fell by over
125 basis points during the year. The Reserve Bank
reduced base rates by 50 points three times, to their
current 6.0% level. This has produced diverging
performance within the market, the banking sector
being the best performer given the added impetus
from expectations of mergers or takeovers. The oil and
gas sector also performed well on much stronger oil
prices, while resources and broader industrials have
been disappointing, with most earnings coming in
below expectations.
We expect stronger earnings in 1997. Interest
rate cuts are likely to give rise to a housing-led
recovery in the domestic economy that should
support related cyclical sectors, such as building
materials. In line with our economists' view of more
synchronized and rising global growth, commodity
prices are expected to improve and support the
resource sector. Banks, however, are likely to struggle
to maintain earnings as competition increases,
especially in the mortgage market.
Q THE FUND INCREASED ITS EXPOSURE TO LATIN
AMERICA OVER THE PERIOD. HAVE THESE
ECONOMIES RECOVERED FROM THE MEXICAN PESO
CRISIS?
A The latest statistics confirm that an investment-led
recovery in the Mexican economy is well underway.
Consequently, we remain fairly optimistic about its
stock market. Real wages, which have been falling for
more than two years, are likely, in our opinion, to
begin recovering this year, boosting domestic demand
and consumption stocks.
With respect to the Fund's other position in
Latin America, Brazil, we think privatization and
economic reform could well be rewarding themes for
investors in 1997. However, we remain cautious on
longer-term prospects. In the absence of a substantial
jump in exports, we believe Brazil is likely to face an
external financing constraint over the next year or
two, and the government's fiscal deficit has yet to be
seriously addressed.
Q WHAT IS YOUR GLOBAL OUTLOOK GOING FORWARD?
A Our outlook for global financial markets remains
favorable as global disinflation continues to underpin
both equity and bond markets.
Our outlook for the UK and European stock markets
is more promising than for the U.S. Price/earnings
and price/cash flow ratios are 25%-40% lower than
those of American stocks. After two years of interest
rate reductions, growth in most European economies
should accelerate. Other factors, such as German tax
cuts at the beginning of the year, should also be bene-
ficial. Moreover, world class corporations that can
exploit global growth themes can be found in the UK
and on the continent.
CONTINUED P.5
4
<PAGE>
Meanwhile, we believe European exporters should
receive a boost from further falls in the continental
currencies against the U.S. dollar and sterling over the
next 18 months or so. And, at long last, managers in
France, Germany, Switzerland and Italy are beginning
to focus on adding value for shareholders, and the
resulting corporate restructuring is providing investors
with exciting opportunities.
While our outlook for Hong Kong following the
transfer of sovereignty is promising, we may see some
consolidation in the first quarter of 1997. Over the
longer term, the territory's political transition provides
the Chinese government with strong incentive to
promote a positive economic environment in southern
China. Even without the end of British rule of Hong
Kong, the prognosis for China itself would have been
good. Inflation has fallen from about 30% to below
10%, giving the Chinese government another oppor-
tunity to promote economic growthgood news for
many Hong Kong-based companies.
Conversely, our outlook for the Japanese stock market
remains bleak, underscored by the continued impor-
tance of careful sector and stock selection. The
country seems to be stuck in economic conditions not
unlike those of the U.S. in the 1930s. Real economic
growth is low; nominal growth is lower. Many compa-
nies are continuing to find their margins under pres-
sure. Moreover, Japanese big businesses are, for the
most part, way behind their counterparts elsewhere in
embracing the need for restructuring.
In this environment, we are focusing exclusively on
companies that have dominant positions in the few
segments of the economy with the capacity to grow
strongly. Examples include certain retailers and
cellular telephone service providers (who are taking
advantage of deregulation) and companies that
specialize in products for the rapidly rising aging
population.
Finally, in emerging Asia we believe the era of rapid
economic growth is not yet over. However, there is a
much greater need for a more selective approach than
was the case in the late 1980s. The acceleration of the
Chinese economy is important for the entire region.
ABOUT THE PORTFOLIO MANAGERS
ROGER YATES - Chief Investment Officer, International
Equities, for Chancellor LGT Asset Management.
Previously, Mr. Yates was an Investment Manager at
Morgan Grenfell and Director of their UK pension
fund business. Prior to that, he worked for LGT Asset
Management (London) for seven years, and was
appointed a director in 1986 and Chief Investment
Officer for unit trusts in 1987. In 1994, he rejoined
LGT as Chief Investment Officer, United Kingdom
and Europe, a position he held until his recent promo-
tion. He received a bachelor's degree from Oxford
University and completed postgraduate research at
Reading University.
MICHAEL LINDSELL - Responsible for investment strategy
for Global Equities; Chief Investment Officer, Japan,
for Chancellor LGT Asset Management 1992-96.
Previously, Mr. Lindsell was a Director at Warburg
Asset Management from 1989 to 1992; Senior Fund
Manager at Scimitar Asset Management from 1985 to
1988; and Fund Manager, Lazard Brothers & Co. Ltd.
from 1982 to 1985. He received his B.Sc. from Bristol
University.
GEOGRAPHIC ALLOCATION OF NET ASSETS %
1996 1995
DECEMBER 31 DECEMBER 31
Australia 2.8 3.7
Belgium N/A 1.0
Brazil 1.2 N/A
Finland N/A 0.7
France 7.1 5.0
Germany 7.1 1.9
Hong Kong 5.3 2.4
India N/A 0.9
Indonesia 1.1 1.2
Italy 4.7 2.4
Japan 16.5 26.7
Korea 0.9 2.1
Mexico 1.3 N/A
Netherlands 5.8 7.6
New Zealand 1.8 N/A
Norway N/A 0.9
Portugal 1.9 N/A
Singapore 1.7 1.7
South Africa N/A 2.7
Spain 4.2 3.4
Sweden 3.6 3.8
Switzerland 5.9 4.3
Thailand 0.9 3.6
UK 21.7 15.2
U.S. & Other 4.5 8.8
Allocations will change based on current market conditions.
5
<PAGE>
SECTOR ALLOCATION OF NET ASSETS %
DECEMBER 31, 1996
Services 29.5
Finance 16.6
Health Care 11.3
Capital Goods 7.0
Materials/Basic Industry 6.7
Technology 5.3
Consumer Durables 5.2
Energy 5.0
Consumer Non-Durables 4.7
Multi-Industry/Misc. 4.2
Short Term & Other 4.5
<TABLE>
<CAPTION>
GT GLOBAL INTERNATIONAL GROWTH FUND % of
KEY PORTFOLIO HOLDINGS(6) Country Net Assets
<S> <C> <C>
NOVARTIS AG Created by the merger of Sandoz and Ciba-Geigy, th e Switzerland 2.1
pharmaceutical companies, Novartis manufactures health care
products for use in a broad range of medical fields, as well
as nutritional and agricultural products.
BAYER AG Produces and markets polymers, organic, industrial, Germany 2.0
health care, agrochemicals and imaging technology products and
equipment. The company's products are used by the automotive,
electrical engineering/electronics, medical, consumer goods,
and other industries in over 150 countries worldwide.
TAKEDA CHEMICAL INDUSTRIES Manufacturer and industry leader in Japan 2.0
antibiotics since 1965. The company is noted for best-selling
vitamin tablet Alinamin and is also the front runner in
overseas operations in the U.S. and other countries.
DDI CORP. Provides long-distance telephone and mobile Japan 1.8
communication services.
AMWAY JAPAN LTD. Involved in door-to-door marketing of Japan 1.7
detergents, cosmetics, kitchenware and related products.
AOYAMA TRADING CO., LTD. Largest suburban discount chain store Japan 1.7
operator specializing in men's apparel. The company pioneered
discounting of men's suits and is also active in merchandise
planning jointly with apparel makers.
SHARP CORP. Manufactures consumer and industrial electronics. Japan 1.6
The company specializes in electronic equipment, audio and
communication equipment, information equipment, personal
computers, word processors, and electronic parts. Sharp Corp.
sells its products worldwide.
ROYAL & SUN ALLIANCE INSURANCE GROUP PLC The holding company UK 1.6
for the multi-national insurance companies Sun Alliance Group
PLC and Royal Insurance Holdings PLC. The companies provide
major classes of general and life insurance to customers in the
UK, Australia, Canada, Scandinavia, South Africa and the U.S.
ADECCO - BEARER Supplies personnel and temporary help and Switzerland 1.6
offers permanent placement services for professionals and
specialists in a wide range of business sectors, both
domestically and internationally.
SCHERING AG Manufactures and markets pharmaceuticals. The Germany 1.6
company focuses its activities on diagnostics, and fertility
control as well as hormone therapy, therapeutics and
dermatology.
</TABLE>
(6) There can be no assurance the Fund will continue to hold these securities.
6
<PAGE>
GT GLOBAL
INTERNATIONAL
GROWTH FUND
FINANCIAL
STATEMENTS
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of
GT Global Growth Series:
We have audited the accompanying statement of assets and liabilities of GT
Global International Growth Fund, one of the funds organized as a series of GT
Global Growth Series, including the schedule of portfolio investments, as of
December 31, 1996, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended and the financial highlights for each of the five years in the
period then ended. These financial statements and the financial highlights are
the responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and the financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1996 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of GT
Global International Growth Fund as of December 31, 1996, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended and the financial highlights for each of
the five years in the period then ended, in conformity with generally accepted
accounting principles.
COOPERS & LYBRAND L.L.P.
BOSTON, MASSACHUSETTS
FEBRUARY 14, 1997
F1
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Services (29.5%)
DDI Corp. ................................................. JPN 720 $ 4,764,340 1.8
WIRELESS COMMUNICATIONS
Aoyama Trading Co., Ltd. .................................. JPN 166,000 4,416,724 1.7
RETAILERS-APPAREL
Adecco - Bearer-/- ........................................ SWTZ 16,510 4,146,009 1.6
CONSUMER SERVICES
Koninklijke Ahold N.V. .................................... NETH 65,406 4,092,612 1.6
RETAILERS-FOOD
Carrefour Supermarche ..................................... FR 6,245 4,070,100 1.6
RETAILERS-FOOD
Elsevier N.V. ............................................. NETH 234,183 3,961,844 1.5
BROADCASTING & PUBLISHING
Telecom Italia Mobile S.p.A. .............................. ITLY 1,500,180 3,807,388 1.5
WIRELESS COMMUNICATIONS
Reuters Holdings PLC ...................................... UK 271,130 3,488,942 1.3
BROADCASTING & PUBLISHING
Ito-Yokado Co., Ltd. ...................................... JPN 80,000 3,483,068 1.3
RETAILERS-OTHER
Rentokil Group PLC ........................................ UK 456,300 3,445,690 1.3
CONSUMER SERVICES
EMI Group PLC ............................................. UK 144,990 3,438,547 1.3
LEISURE & TOURISM
Telefonica de Espana-/- ................................... SPN 146,600 3,406,281 1.3
TELEPHONE NETWORKS
Burton Group PLC .......................................... UK 1,195,000 3,192,123 1.2
RETAILERS-APPAREL
Portugal Telecom S.A. - Registered ........................ PORT 109,250 3,115,387 1.2
TELEPHONE NETWORKS
EMAP PLC .................................................. UK 247,030 3,115,370 1.2
BROADCASTING & PUBLISHING
Sol Melia S.A.-/- ......................................... SPN 83,661 2,998,024 1.1
LEISURE & TOURISM
Stet Societa' Finanziaria Telefonica S.p.A. ............... ITLY 609,400 2,772,669 1.1
TELEPHONE NETWORKS
Comptoirs Modernes ........................................ FR 5,110 2,762,162 1.1
RETAILERS-FOOD
Telecom Corporation of New Zealand Ltd. ................... NZ 468,000 2,387,620 0.9
TELEPHONE NETWORKS
Dixons Group PLC .......................................... UK 208,350 1,937,227 0.7
RETAILERS-APPAREL
Cordiant PLC-/- ........................................... UK 1,073,070 1,920,134 0.7
BROADCASTING & PUBLISHING
Telecel - Comunicacoes Pessoais, S.A.-/- .................. PORT 27,589 1,762,136 0.7
TELECOM - OTHER
Compass Group PLC ......................................... UK 130,180 1,382,048 0.5
RESTAURANTS
Granada Group PLC ......................................... UK 86,250 1,274,551 0.5
LEISURE & TOURISM
Fast Retailing Co., Ltd. .................................. JPN 48,140 1,235,105 0.5
RETAILERS-APPAREL
</TABLE>
The accompanying notes are an integral part of the financial statements.
F2
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Services (Continued)
Advanced Information Service: ............................. THAI -- -- 0.3
WIRELESS COMMUNICATIONS
Foreign ................................................. -- 44,800 $ 419,328 --
Local ................................................... -- 45,000 382,590 --
Seven-Eleven Japan Ltd. ................................... JPN 500 29,285 --
RETAILERS-OTHER
Kobenhavns Lufthavne AS ................................... DEN 286 29,146 --
TRANSPORTATION - AIRLINES
------------
77,236,450
------------
Finance (16.6%)
Royal & Sun Alliance Insurance Group PLC .................. UK 551,470 4,211,569 1.6
INSURANCE - MULTI-LINE
United Overseas Bank Ltd. - Foreign ....................... SING 341,300 3,806,320 1.5
BANKS-MONEY CENTER
Barclays PLC .............................................. UK 196,000 3,362,877 1.3
BANKS-MONEY CENTER
Nichiei Co., Ltd. ......................................... JPN 45,000 3,323,687 1.3
OTHER FINANCIAL
3I Group PLC .............................................. UK 367,550 3,065,015 1.2
INVESTMENT MANAGEMENT
Banco Popular Espanol S.A. ................................ SPN 14,510 2,851,457 1.1
BANKS-MONEY CENTER
Australia & New Zealand Banking Group Ltd. ................ AUSL 412,360 2,597,930 1.0
BANKS-MONEY CENTER
AEGON N.V. ................................................ NETH 34,790 2,219,223 0.9
INSURANCE-LIFE
Sun Hung Kai Properties Ltd. .............................. HK 178,000 2,180,696 0.8
REAL ESTATE
HSBC Holdings PLC ......................................... HK 100,000 2,139,902 0.8
BANKS-MONEY CENTER
Cheung Kong (Holdings) Ltd. ............................... HK 212,000 1,884,536 0.7
REAL ESTATE
Orix Corp. ................................................ JPN 43,700 1,819,575 0.7
OTHER FINANCIAL
M & G Group PLC ........................................... UK 92,960 1,758,918 0.7
INVESTMENT MANAGEMENT
Mapfre Vida Seguros ....................................... SPN 24,569 1,704,077 0.7
INSURANCE-LIFE
Henderson Land Development Co., Ltd. ...................... HK 159,000 1,603,569 0.6
REAL ESTATE
Skandia Forsakrings AB .................................... SWDN 56,520 1,601,204 0.6
INSURANCE - MULTI-LINE
Cardif S.A. ............................................... FR 6,218 858,276 0.3
INSURANCE - MULTI-LINE
Thai Farmers Bank Public Co., Ltd. SEC-/- {\/} ............ THAI 157,900 810,027 0.3
BANKS-MONEY CENTER
Korea Exchange Bank ....................................... KOR 71,700 651,045 0.2
BANKS-MONEY CENTER
Land and House Co., Ltd. - Foreign ........................ THAI 77,000 561,562 0.2
REAL ESTATE
</TABLE>
The accompanying notes are an integral part of the financial statements.
F3
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Finance (Continued)
Phatra Thanakit Co., Ltd. - Foreign ....................... THAI 57,800 $ 164,557 0.1
INVESTMENT MANAGEMENT
Shinhan Bank-/- ........................................... KOR 2,740 43,946 --
BANKS-REGIONAL
------------
43,219,968
------------
Health Care (11.3%)
Novartis AG-/- ............................................ SWTZ 4,720 5,407,873 2.1
PHARMACEUTICALS
Bayer AG .................................................. GER 126,700 5,173,446 2.0
PHARMACEUTICALS
Takeda Chemical Industries ................................ JPN 243,000 5,100,985 2.0
PHARMACEUTICALS
Schering AG ............................................... GER 48,840 4,125,043 1.6
PHARMACEUTICALS
Sanofi S.A. ............................................... FR 31,048 3,092,812 1.2
PHARMACEUTICALS
Astra AB "A" Free ......................................... SWDN 58,280 2,882,946 1.1
PHARMACEUTICALS
Siemens AG - New-/- ....................................... GER 54,245 2,557,063 1.0
MEDICAL TECHNOLOGY & SUPPLIES
M.L. Laboratories PLC-/- .................................. UK 254,968 890,642 0.3
PHARMACEUTICALS
------------
29,230,810
------------
Capital Goods (7.0%)
Premier Farnell PLC ....................................... UK 287,500 3,697,132 1.4
INDUSTRIAL COMPONENTS
Bic ....................................................... FR 24,340 3,655,699 1.4
OFFICE EQUIPMENT
Canon, Inc. ............................................... JPN 150,000 3,317,208 1.3
OFFICE EQUIPMENT
Smiths Industries PLC ..................................... UK 236,350 3,245,765 1.2
AEROSPACE/DEFENSE
General Electric PLC-/- ................................... UK 428,470 2,810,000 1.1
AEROSPACE/DEFENSE
Telefonaktiebolaget LM Ericsson "B" ....................... SWDN 48,558 1,503,939 0.6
TELECOM EQUIPMENT
------------
18,229,743
------------
Materials/Basic Industry (6.7%)
Kimberly-Clark de Mexico, S.A. de C.V. "A" ................ MEX 176,900 3,496,625 1.3
PAPER/PACKAGING
PT Semen Gresik - Foreign ................................. INDO 929,000 2,990,428 1.1
CEMENT
Pilkington PLC ............................................ UK 1,087,050 2,940,991 1.1
BUILDING MATERIALS & COMPONENTS
Broken Hill Proprietary Co., Ltd. ......................... AUSL 198,911 2,831,878 1.1
MISC. MATERIALS & COMMODITIES
</TABLE>
The accompanying notes are an integral part of the financial statements.
F4
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Materials/Basic Industry (Continued)
SGL Carbon AG ............................................. GER 21,670 $ 2,733,407 1.0
METALS - NON-FERROUS
Western Mining Corporation Holdings Ltd. .................. AUSL 270,000 1,701,041 0.7
METALS - NON-FERROUS
Fletcher Challenge Paper{/\} .............................. NZ 512,000 1,045,396 0.4
PAPER/PACKAGING
------------
17,739,766
------------
Technology (5.3%)
Cap Gemini N.V. ........................................... NETH 98,520 2,865,414 1.1
COMPUTERS & PERIPHERALS
Group Axime-/- ............................................ FR 22,880 2,650,193 1.0
COMPUTERS & PERIPHERALS
Matsushita-Kotobuki Electronics Ltd. ...................... JPN 90,000 2,347,961 0.9
COMPUTERS & PERIPHERALS
Koei Co., Ltd. ............................................ JPN 102,500 1,965,705 0.8
SOFTWARE
Kyushu-Matsushita Electric Co., Ltd. ...................... JPN 137,000 1,775,225 0.7
COMPUTERS & PERIPHERALS
Bowthorpe PLC ............................................. UK 218,750 1,693,065 0.6
COMPUTERS & PERIPHERALS
Hosiden Electronics-/- .................................... JPN 69,000 489,366 0.2
COMPUTERS & PERIPHERALS
------------
13,786,929
------------
Consumer Durables (5.2%)
Sharp Corp. ............................................... JPN 300,000 4,276,088 1.6
CONSUMER ELECTRONICS
Volkswagen AG ............................................. GER 9,690 4,032,250 1.5
AUTOMOBILES
BBA Group PLC ............................................. UK 532,840 3,229,886 1.2
MULTI-INDUSTRY
Valeo S.A. ................................................ FR 20,700 1,278,764 0.5
AUTO PARTS
Samsung Electronics Co.: .................................. KOR -- -- 0.4
CONSUMER ELECTRONICS
Common .................................................. -- 12,206 735,004 --
New-/- .................................................. -- 3,678 189,466 --
------------
13,741,458
------------
Energy (5.0%)
United Utilities PLC ...................................... UK 311,900 3,316,608 1.3
ENERGY SOURCES
Petroleo Brasileiro S.A. (Petrobras) - ADR-/- {\/} ........ BRZL 197,900 3,067,450 1.2
GAS PRODUCTION & DISTRIBUTION
Elektrowatt AG-/- ......................................... SWTZ 7,353 2,929,110 1.1
ELECTRICAL & GAS UTILITIES
ABB Asea Brown Boveri Ltd. - Bearer ....................... SWTZ 2,305 2,868,330 1.1
ENERGY EQUIPMENT & SERVICES
</TABLE>
The accompanying notes are an integral part of the financial statements.
F5
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Energy (Continued)
Korea Electric Power Corp. ................................ KOR 28,000 $ 817,567 0.3
ELECTRICAL & GAS UTILITIES
------------
12,999,065
------------
Consumer Non-Durables (4.7%)
Amway Japan Ltd. .......................................... JPN 140,000 4,498,963 1.7
HOUSEHOLD PRODUCTS
Gucci Group - NY Registered Shares{\/} .................... ITLY 57,950 3,701,556 1.4
TEXTILES & APPAREL
Parmalat Finanziaria S.p.A. ............................... ITLY 1,227,960 1,880,440 0.7
FOOD
Vendex International N.V. ................................. NETH 43,464 1,860,944 0.7
OTHER CONSUMER GOODS
Giordano International Ltd. ............................... HK 537,000 458,262 0.2
TEXTILES & APPAREL
------------
12,400,165
------------
Multi-Industry/Miscellaneous (4.2%)
Kinnevik AB "B" Free ...................................... SWDN 119,910 3,309,027 1.3
MULTI-INDUSTRY
Citic Pacific Ltd. ........................................ HK 438,000 2,542,824 1.0
CONGLOMERATE
Hutchison Whampoa ......................................... HK 279,000 2,191,524 0.8
MULTI-INDUSTRY
Wrightson Ltd. ............................................ NZ 1,500,000 1,303,703 0.5
MULTI-INDUSTRY
Swire Pacific Ltd. "A" .................................... HK 96,000 915,438 0.4
MULTI-INDUSTRY
United Industrial Corp. ................................... SING 580,000 489,277 0.2
CONGLOMERATE
------------
10,751,793
------------ -----
TOTAL EQUITY INVESTMENTS (cost $217,710,991) ................ 249,336,147 95.5
------------ -----
</TABLE>
The accompanying notes are an integral part of the financial statements.
F6
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NO. OF VALUE % OF NET
WARRANTS COUNTRY WARRANTS (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Thai Farmers Bank Ltd., Warrants expire 9/15/02 (cost
$9,592)-/- ............................................... THAI 9,738 $ 9,210 --
BANKS-MONEY CENTER
------------ -----
TOTAL INVESTMENTS (cost $217,720,583) * .................... 249,345,357 95.5
Other Assets and Liabilities ................................ 11,818,628 4.5
------------ -----
NET ASSETS .................................................. $261,163,985 100.0
------------ -----
------------ -----
</TABLE>
- --------------
-/- Non-income producing security.
{\/} U.S. currency denominated.
{/\} Australian currency denominated.
* For Federal income tax purposes, cost is $219,363,482 and
appreciation (depreciation) is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $ 41,743,561
Unrealized depreciation: (11,761,686)
-------------
Net unrealized appreciation: $ 29,981,875
-------------
-------------
</TABLE>
Abbreviations:
ADR -- American Depository Receipt
SEC -- Share Entitlement Certificate
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at December 31, 1996, was concentrated in
the following countries:
<TABLE>
<CAPTION>
PERCENTAGE OF NET ASSETS
{D}
---------------------------
COUNTRY (COUNTRY CODE/CURRENCY CODE) EQUITY OTHER TOTAL
- -------------------------------------- ------ ---------- -----
<S> <C> <C> <C>
Australia (AUSL/AUD) ................. 2.8 2.8
Brazil (BRZL/BRL) .................... 1.2 1.2
France (FR/FRF) ...................... 7.1 7.1
Germany (GER/DEM) .................... 7.1 7.1
Hong Kong (HK/HKD) ................... 5.3 5.3
Indonesia (INDO/IDR) ................. 1.1 1.1
Italy (ITLY/ITL) ..................... 4.7 4.7
Japan (JPN/JPY) ...................... 16.5 16.5
Korea (KOR/KRW) ...................... 0.9 0.9
Mexico (MEX/MXN) ..................... 1.3 1.3
Netherlands (NETH/NLG) ............... 5.8 5.8
New Zealand (NZ/NZD) ................. 1.8 1.8
Portugal (PORT/PTE) .................. 1.9 1.9
Singapore (SING/SGD) ................. 1.7 1.7
Spain (SPN/ESP) ...................... 4.2 4.2
Sweden (SWDN/SEK) .................... 3.6 3.6
Switzerland (SWTZ/CHF) ............... 5.9 5.9
Thailand (THAI/THB) .................. 0.9 0.9
United Kingdom (UK/GBP) .............. 21.7 21.7
United States & Other (US/USD) ....... 4.5 4.5
------ --- -----
Total ............................... 95.5 4.5 100.0
------ --- -----
------ --- -----
</TABLE>
- --------------
{d} Percentages indicated are based on net assets of $261,163,985.
The accompanying notes are an integral part of the financial statements.
F7
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
DECEMBER 31, 1996
<TABLE>
<CAPTION>
MARKET VALUE CONTRACT DELIVERY UNREALIZED
CONTRACTS TO SELL: (U.S. DOLLARS) PRICE DATE APPRECIATION
- ---------------------------------------- -------------- ----------- -------- --------------
<S> <C> <C> <C> <C>
French Francs........................... 9,674,211 5.09700 02/06/97 $ 135,481
French Francs........................... 2,323,468 5.07000 02/19/97 43,396
Japanese Yen............................ 99,343 113.01500 01/07/97 2,413
Japanese Yen............................ 5,006,047 110.00000 01/07/97 262,135
Japanese Yen............................ 1,591,561 111.74500 02/06/97 48,333
Japanese Yen............................ 13,907,565 110.40000 02/12/97 585,189
Swiss Francs............................ 8,958,150 1.31200 03/19/97 104,350
-------------- --------------
Total Contracts to Sell (Receivable
amount $42,741,642).................. 41,560,345 1,181,297
-------------- --------------
THE VALUE OF CONTRACTS TO SELL AS
PERCENTAGE OF NET ASSETS IS 15.91%.
Total Open Forward Foreign Currency
Contracts............................ $ 1,181,297
--------------
--------------
</TABLE>
- ----------------
See Note 1 to the financial statements.
The accompanying notes are an integral part of the financial statements.
F8
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
STATEMENT OF ASSETS
AND LIABILITIES
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Assets:
Investments in securities, at value (cost $217,720,583) (Note 1)...... $249,345,357
U.S. currency............................................. $ 327
Foreign currencies (cost $4,610,163)...................... 4,680,132 4,680,459
----------
Receivable for securities sold........................................ 10,949,478
Receivable for open forward foreign currency contracts, net (Note
1)................................................................... 1,181,297
Dividends and dividend withholding tax reclaims receivable............ 461,548
Receivable for Fund shares sold....................................... 167,237
Miscellaneous receivable.............................................. 44,627
Cash held as collateral for securities loaned (Note 1)................ 20,879,528
------------
Total assets........................................................ 287,709,531
------------
Liabilities:
Payable for Fund shares repurchased................................... 3,247,882
Payable for securities purchased...................................... 1,708,549
Payable for investment management and administration fees (Note 2).... 217,392
Payable for loan outstanding (Note 1)................................. 129,000
Payable for service and distribution expenses (Note 2)................ 112,908
Payable for printing and postage expenses............................. 108,222
Payable for transfer agent fees (Note 2).............................. 69,383
Payable for professional fees......................................... 32,301
Payable for registration and filing fees.............................. 16,699
Payable for custodian fees (Note 1)................................... 13,453
Payable for fund accounting fees (Note 2)............................. 5,150
Payable for Trustees' fees and expenses (Note 2)...................... 5,079
Collateral for securities loaned (Note 1)............................. 20,879,528
------------
Total liabilities................................................... 26,545,546
------------
Net assets.............................................................. $261,163,985
------------
------------
Class A:
Net asset value and redemption price per share ($196,601,302 DIVIDED BY
22,035,585 shares outstanding)......................................... $ 8.92
------------
------------
Maximum offering price per share (100/95.25 of $8.92) *................. $ 9.36
------------
------------
Class B:+
Net asset value and offering price per share ($64,101,904 DIVIDED BY
7,387,563 shares outstanding).......................................... $ 8.68
------------
------------
Advisor Class:
Net asset value, offering price per share, and redemption price per
share ($460,779 DIVIDED BY 51,166 shares outstanding).................. $ 9.01
------------
------------
Net assets consist of:
Paid in capital (Note 4).............................................. $222,227,771
Accumulated net realized gain on investments and foreign currency
transactions......................................................... 6,042,757
Net unrealized appreciation on translation of assets and liabilities
in foreign currencies................................................ 1,268,683
Net unrealized appreciation of investments............................ 31,624,774
------------
Total -- representing net assets applicable to capital shares
outstanding............................................................ $261,163,985
------------
------------
<FN>
- --------------
* On sales of $50,000 or more, the offering price is reduced.
+ Redemption price per share is equal to the net asset value per share less
any applicable contingent deferred sales charge.
</TABLE>
The accompanying notes are an integral part of the financial statements.
F9
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
STATEMENT OF OPERATIONS
Year ended December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Investment income: (Note 1)
Dividend income (net of foreign withholding tax of $726,212)........... $ 4,899,862
Interest income........................................................ 282,325
-----------
Total investment income.............................................. 5,182,187
-----------
Expenses:
Investment management and administration fees (Note 2)................. 3,034,522
Service and distribution expenses: (Note 2)
Class A................................................. $ 847,585
Class B................................................. 681,990 1,529,575
-----------
Transfer agent fees (Note 2)........................................... 857,972
Custodian fees......................................................... 252,795
Printing and postage expenses.......................................... 130,720
Fund accounting fees (Note 2).......................................... 77,934
Registration and filing fees........................................... 61,482
Audit fees............................................................. 52,338
Trustees' fees and expenses (Note 2)................................... 12,934
Legal fees............................................................. 11,712
Other expenses (Note 1)................................................ 357,836
-----------
Total expenses before reductions..................................... 6,379,820
-----------
Expense reductions (Notes 1 & 5)................................... (336,949)
-----------
Total net expenses................................................... 6,042,871
-----------
Net investment loss...................................................... (860,684)
-----------
Net realized and unrealized gain (loss) on investments and
foreign currencies: (Note 1)
Net realized gain on investments.......................... 29,599,764
Net realized gain on foreign currency transactions........ 8,331,816
-----------
Net realized gain during the year.................................... 37,931,580
Net change in unrealized appreciation on translation of
assets and liabilities in foreign currencies............. 205,239
Net change in unrealized appreciation of investments...... (7,070,173)
-----------
Net unrealized depreciation during the year.......................... (6,864,934)
-----------
Net realized and unrealized gain on investments and foreign currencies... 31,066,646
-----------
Net increase in net assets resulting from operations..................... $30,205,962
-----------
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F10
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1996 DECEMBER 31, 1995
----------------- -----------------
<S> <C> <C>
Decrease in net assets
Operations:
Net investment income (loss).............................. $ (860,684) $ 555,361
Net realized gain on investments and foreign currency
transactions............................................. 37,931,580 982,081
Net change in unrealized appreciation on translation of
assets and liabilities in foreign currencies............. 205,239 247,497
Net change in unrealized appreciation (depreciation) of
investments.............................................. (7,070,173) 7,882,538
----------------- -----------------
Net increase in net assets resulting from operations.... 30,205,962 9,667,477
----------------- -----------------
Class A:
Distributions to shareholders:
From net realized gain on investments..................... (20,343,820) (7,612,428)
In excess of net realized gain on investments............. -- (6,510,219)
Class B:
Distributions to shareholders:
From net realized gain on investments..................... (6,672,791) (1,774,209)
In excess of net realized gain on investments............. -- (1,517,320)
Advisor Class:
Distributions to shareholders:
From net realized gain on investments..................... (46,941) (9,818)
In excess of net realized gain on investments............. -- (8,396)
----------------- -----------------
Total distributions..................................... (27,063,552) (17,432,390)
----------------- -----------------
Capital share transactions: (Note 4)
Increase from capital shares sold and reinvested.......... 1,289,311,201 1,294,676,738
Decrease from capital shares repurchased.................. (1,410,140,865) (1,410,555,957)
----------------- -----------------
Net decrease from capital share transactions............ (120,829,664) (115,879,219)
----------------- -----------------
Total decrease in net assets................................ (117,687,254) (123,644,132)
Net assets:
Beginning of year......................................... 378,851,239 502,495,371
----------------- -----------------
End of year *............................................. $ 261,163,985 $ 378,851,239
----------------- -----------------
----------------- -----------------
--------------
*Includes undistributed net investment income of......... $ 0 $ 0
----------------- -----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F11
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
CLASS A+
----------------------------------------------------------
YEAR ENDED DECEMBER 31,
----------------------------------------------------------
1996 (A) 1995 1994 1993 (A) 1992
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 9.08 $ 9.17 $ 11.02 $ 8.21 $ 8.74
---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income (loss).......... (0.01) 0.03 (0.04) 0.03 0.11
Net realized and unrealized gain
(loss) on investments................ 0.84 0.32 (0.82) 2.78 (0.62)
---------- ---------- ---------- ---------- ----------
Net increase (decrease) from
investment operations.............. 0.83 0.35 (0.86) 2.81 (0.51)
---------- ---------- ---------- ---------- ----------
Distributions to shareholders:
From net investment income............ -- -- (0.04) -- (0.02)
From net realized gain on
investments.......................... (0.99) (0.24) (0.95) -- --
In excess of net realized gain on
investments.......................... -- (0.20) -- -- --
---------- ---------- ---------- ---------- ----------
Total distributions................. (0.99) (0.44) (0.99) -- (0.02)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period.......... $ 8.92 $ 9.08 $ 9.17 $ 11.02 $ 8.21
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Total investment return (d)............. 9.28% 3.88% (7.78)% 34.23% (5.83)%
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 196,601 $ 308,816 $ 430,701 $ 523,397 $ 421,693
Ratio of net investment income (loss) to
average net assets..................... (0.14)% 0.24% (0.04)% 0.3% 1.2%
Ratio of expenses to average net assets:
With expense reductions (Notes 1 &
5)................................... 1.80% 1.70% 1.70% 1.80% 1.90%
Without expense reductions............ 1.91% 1.78% 1.75% --%* --%*
Portfolio turnover rate++++............. 74% 75% 96% 90% 89%
Average commission rate per share paid
on portfolio transactions++++.......... $ 0.0267 N/A N/A N/A N/A
</TABLE>
- ----------------
+ All capital shares issued and outstanding as of March 31, 1993, were
reclassified as Class A shares.
++ Commencing April 1, 1993, the Fund began offering Class B shares.
+++ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover rate and average commission rate are calculated on
the basis of the Fund as a whole without distinguishing between the
classes of shares issued.
(a) Calculated based upon average shares outstanding during the period.
(b) Not annualized
(c) Annualized
(d) Total investment return does not include sales charges.
* Calculation of "Ratio of expenses to average net assets" was made
without considering the effect of expense reductions, if any.
N/A Not applicable.
The accompanying notes are an integral part of the financial statements.
F12
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
FINANCIAL HIGHLIGHTS (cont'd)
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
CLASS B++ ADVISOR CLASS+++
------------------------------------------------- ----------------------------
APRIL 1, 1993 YEAR JUNE 1, 1995
YEAR ENDED DECEMBER 31, TO ENDED TO
---------------------------------- DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996 (A) 1995 1994 1993 (A) 1996 (A) 1995
---------- ---------- ---------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 8.91 $ 9.07 $ 10.98 $ 8.74 $ 9.11 $ 8.49
---------- ---------- ---------- ------------- ------------- -------------
Income from investment operations:
Net investment income (loss).......... (0.07) (0.04) (0.10) (0.01) 0.02 0.03
Net realized and unrealized gain
(loss) on investments................ 0.83 0.32 (0.82) 2.25 0.87 1.03
---------- ---------- ---------- ------------- ------------- -------------
Net increase (decrease) from
investment operations.............. 0.76 0.28 (0.92) 2.24 0.89 1.06
---------- ---------- ---------- ------------- ------------- -------------
Distributions to shareholders:
From net investment income............ -- -- (0.04) -- -- --
From net realized gain on
investments.......................... (0.99) (0.24) (0.95) -- (0.99) (0.24)
In excess of net realized gain on
investments.......................... -- (0.20) -- -- -- (0.20)
---------- ---------- ---------- ------------- ------------- -------------
Total distributions................. (0.99) (0.44) (0.99) -- (0.99) (0.44)
---------- ---------- ---------- ------------- ------------- -------------
Net asset value, end of period.......... $ 8.68 $ 8.91 $ 9.07 $ 10.98 $ 9.01 $ 9.11
---------- ---------- ---------- ------------- ------------- -------------
---------- ---------- ---------- ------------- ------------- -------------
Total investment return (d)............. 8.67% 3.15% (8.36)% 25.63%(b) 9.79% 12.56%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 64,102 $ 69,654 $ 71,794 $ 30,745 $ 461 $ 381
Ratio of net investment income (loss) to
average net assets..................... (0.79)% (0.41)% (0.69)% (0.4)%(c) 0.21% 0.59%(c)
Ratio of expenses to average net assets:
With expense reductions (Notes 1 &
5)................................... 2.45% 2.35% 2.35% 2.4%(c) 1.45% 1.35%(c)
Without expense reductions............ 2.56% 2.43% 2.40% --%* 1.56% 1.43%(c)
Portfolio turnover rate++++............. 74% 75% 96% 90% 74% 75%
Average commission rate per share paid
on portfolio transactions++++.......... $ 0.0267 N/A N/A N/A $ 0.0267 N/A
</TABLE>
- ----------------
+ All capital shares issued and outstanding as of March 31, 1993, were
reclassified as Class A shares.
++ Commencing April 1, 1993, the Fund began offering Class B shares.
+++ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover rate and average commission rate are calculated on
the basis of the Fund as a whole without distinguishing between the
classes of shares issued.
(a) Calculated based upon average shares outstanding during the period.
(b) Not annualized
(c) Annualized
(d) Total investment return does not include sales charges.
* Calculation of "Ratio of expenses to average net assets" was made
without considering the effect of expense reductions, if any.
N/A Not applicable.
The accompanying notes are an integral part of the financial statements.
F13
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
GT Global International Growth Fund ("Fund"), is a separate series of GT Global
Growth Series ("Company"). The Company is organized as a Massachusetts business
trust and is registered under the Investment Company Act of 1940, as amended
("1940 Act"), as an open-end management investment company. The Company has
eight diversified series of shares in operation, each series corresponding to a
distinct portfolio of investments.
The Fund offers Class A, Class B, and Advisor Class shares, each of which has
equal rights as to assets and voting privileges. Class A and Class B each has
exclusive voting rights with respect to its distribution plan. Investment
income, realized and unrealized capital gains and losses, and the common
expenses of the Fund are allocated on a pro rata basis to each class based on
the relative net assets of each class to the total net assets of the Fund. Each
class of shares differs in its respective distribution expenses, and may differ
in its transfer agent, registration, and certain other class-specific fees and
expenses.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of the financial statements. The
policies are in conformity with generally accepted accounting principles, and
the financial statements may include certain estimates from management.
(A) PORTFOLIO VALUATION
The Fund calculates the net asset value of Fund shares and completes orders to
purchase, exchange or repurchase Fund shares on each business day, with the
exception of those days on which the New York Stock Exchange is closed.
Equity securities are valued at the last sale price on the exchange on which
such securities are traded or on the principal over-the-counter market in which
such securities are traded, as of the close of business on the day the
securities are being valued, or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined by Chancellor LGT Asset
Management, Inc. (the "Manager") to be the primary market.
Fixed income investments are valued at the mean of representative quoted bid and
asked prices for such investments or, if such prices are not available, at
prices for investments of comparative maturity, quality and type; however, when
the Manager deems it appropriate, prices obtained for the day of valuation from
a bond pricing service will be used. Short-term investments with a maturity of
60 days or less are valued to amortized cost, adjusted for foreign exchange
translation and market fluctuation, if any.
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Fund's Board of Trustees.
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Company's Board of Trustees.
(B) FOREIGN CURRENCY TRANSLATION
The accounting records of the Fund are maintained in U.S. dollars. The market
values of foreign securities, currency holdings, other assets and liabilities
are recorded in the books and records of the Fund after translation to U.S.
dollars based on the exchange rates on that day. The cost of each security is
determined using historical exchange rates. Income and withholding taxes are
translated at prevailing exchange rates when earned or incurred.
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains and losses arise from sales and
maturities of short-term securities, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the differences between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains or losses arise from changes in the
value of assets and liabilities other than investments in securities at year
end, resulting from changes in exchange rates.
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Fund, it is the Fund's
policy to always receive, as collateral, U.S. government securities or other
high quality debt securities of which the value, including accrued interest, is
at least equal to the amount to be repaid to the Fund under each agreement at
its maturity.
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract fluctuates with changes in currency
exchange rates. The Forward Contract is marked-to-market daily and the change in
market value is recorded by the Fund as an unrealized gain or loss. When the
Forward Contract is closed, the Fund records a realized gain or loss equal to
the difference between the value at the time it was opened and the value at the
time it was closed. The Fund could be exposed to risk if a counterparty is
unable to meet the terms of a contract or if
F14
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
the value of the currency changes unfavorably. The Fund may enter into Forward
Contracts in connection with planned purchases or sales of securities, or to
hedge against adverse fluctuations in exchange rates between currencies.
(E) OPTION ACCOUNTING PRINCIPLES
When the Fund writes a call or put option, an amount equal to the premium
received is included in the Fund's "Statement of Assets and Liabilities" as an
asset and an equivalent liability. The amount of the liability is subsequently
market-to-market to reflect the current market value of the option. The current
market value of an option listed on a traded exchange is valued at its last bid
price, or, in the case of on over-the-counter option, is valued at the average
of the last bid prices obtained from brokers, unless a quotation from only one
broker is available, in which case only that broker's price will be used. If an
option expires on its stipulated expiration date or if the Fund enters into a
closing purchase transaction, a gain or loss is realized without regard to any
unrealized gain or loss on the underlying security, and the liability related to
such option is extinguished. If a written call option is exercised, a gain or
loss is realized from the sale of the underlying security and the proceeds of
the sale are increased by the premium originally received. If a written put
option is exercised, the cost of the underlying security purchased would be
decreased by the premium originally received. The Fund can write options only on
a covered basis, which, for a call, requires that the Fund hold the underlying
security, and, for a put, requires the Fund to set aside cash, U.S. government
securities or other liquid securities in an amount not less than the exercise
price or otherwise provide adequate cover at all times while the put option is
outstanding. The Fund may use options to manage its exposure to the stock market
and to fluctuations in currency values or interest rates.
The premium paid by the Fund for the purchase of a call or put option is
included in the Fund's "Statement of Assets and Liabilities" as an investment
and subsequently "marked-to-market" to reflect the current market value of the
option. If an option which the Fund has purchased expires on the stipulated
expiration date, the Fund realizes a loss in the amount of the cost of the
option. If the Fund enters into a closing sale transaction, the Fund realizes a
gain or loss, depending on whether proceeds from the closing sale transaction
are greater or less than the cost of the option. If the Fund exercises a call
option, the cost of the securities acquired by exercising the call is increased
by the premium paid to buy the call. If the Fund exercises a put option, it
realizes a gain or loss from the sale of the underlying security, and the
proceeds from such sale are decreased by the premium originally paid.
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Fund may forego the
opportunity of profit if the market value of the underlying security or index
increases and the option is exercised. The risk in writing a put option is that
the Fund may incur a loss if the market value of the underlying security or
index decreases and the option is exercised. In addition, there is the risk the
Fund may not be able to enter into a closing transaction because of an illiquid
secondary market.
(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract the
Fund is required to pledge to the broker an amount of cash or securities equal
to the minimum "initial margin" requirements of the exchange on which the
contract is traded. Pursuant to the contract, the Fund agrees to receive from or
pay to the broker an amount of cash equal to the daily fluctuation in value of
the contract. Such receipts or payments are known as "variation margin" and are
recorded by the Fund as unrealized gains or losses. When the contract is closed,
the Fund records a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the value at the time it was
closed. The potential risk to the Fund is that the change in value of the
underlying securities may not correlate to the change in value of the contracts.
The Fund may use futures contracts to manage its exposure to the stock market
and to fluctuations in currency values or interest rates.
(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out basis, unless otherwise specified. Dividends are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Where a high
level of uncertainty exists as to its collection, income is recorded net of all
withholding tax with any rebate recorded when received. The Fund may trade
securities on other then normal settlement terms. This may increase the risk if
the other party to the transaction fails to deliver and causes the Fund to
subsequently invest at less advantageous prices.
(H) PORTFOLIO SECURITIES LOANED
At December 31, 1996, stocks with an aggregate value of approximately
$19,408,528 were on loan to brokers. The loans were secured by cash collateral
of $20,879,528, received by the Fund. Cash collateral is received by the Fund
against loaned securities in an amount at least equal to 105% of the market
value of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 103% of the market value of the loaned
securities during the period of the loan. For the year ended December 31, 1996,
the Fund received securities lending fees of $157,185 which were used to reduce
custodian fees.
(I) TAXES
It is the policy of the Fund to meet the requirements for qualification as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended ("Code"). It is also the intention of the Fund to make distributions
sufficient to avoid imposition of any excise tax under Section 4982 of the Code.
Therefore, no provision has been made for Federal taxes on income, capital
gains, or unrealized appreciation of securities held, or excise tax on income
and capital gains.
F15
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
(J) DISTRIBUTION TO SHAREHOLDERS
Distribution to shareholders are recorded by the Fund on the ex-date. Income and
capital gain distributions are determined in accordance with Federal income tax
regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments of income and gains
on various investment securities held by the Fund and timing differences.
(K) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investments of domestic origin. The Fund's investments in emerging market
countries may involve greater risks than investments in more developed markets,
and the prices of such investments may be volatile. These risks of investing in
foreign and emerging markets may include foreign currency exchange rate
fluctuations, perceived credit risk, adverse political and economic developments
and possible adverse foreign government intervention.
(L) RESTRICTED SECURITIES
The Fund is permitted to invest in privately placed restrictions securities.
These securities may be resold in transactions exempt from registration or to
the public if the securities are registered. Disposal of these securities may
involve time-consuming negotiations and expense, and prompt sale at an
acceptable price may be difficult.
(M) INDEXED SECURITIES
The Fund may invest in indexed securities whose value is linked either directly
or indirectly to changes in foreign currencies, interest rates, equities,
indices, or other reference instruments. Indexed securities may be more volatile
than the reference instrument itself, but any loss is limited to the amount of
the original investment.
(N) LINE OF CREDIT
The Fund, along with certain other funds advised by the Manager, has a line of
credit with the Bank of Boston. The arrangement with the bank allows all
specified funds to borrow an aggregate maximum amount of $100,000,000. For the
year ended December 31, 1996, the Fund periodically borrowed various amounts at
a money market rate, with a balance of $129,000 outstanding on December 31,
1996.
For the year ended December 31, 1996, the weighted average outstanding daily
balance of bank loans (based on the number of days the loans were outstanding)
was $9,625,800 with a weighted average interest rate of 6.27%. Interest incurred
on this loan for the year ended December 31, 1996 was $8,383, included in "Other
Expenses" on the Statement of Operations.
2. RELATED PARTIES
Chancellor LGT Asset Management is the Fund's investment manager and
administrator. On October 31, 1996, Chancellor Capital Management, Inc. merged
with LGT Asset Management, Inc., and the surviving entity was renamed Chancellor
LGT Asset Management, Inc. The Fund pays investment management and
administration fees at the following annualized rates: 0.975% on the first $500
million of the average daily net assets of the Fund; 0.95% on the next $500
million; 0.925% on the next $500 million and 0.90% on amounts thereafter. These
fees are computed daily and paid monthly, and are subject to reduction in any
year to the extent that the Fund's expenses (exclusive of brokerage commissions,
taxes, interest, distribution-related expenses and extraordinary expenses)
exceed the most stringent limits prescribed by the laws or regulations of any
state in which the Fund's shares are offered for sale, based on the average
total net asset value of the Fund.
GT Global, Inc., an affiliate of the Manager, serves as the Fund's distributor.
The Fund offers Class A, Class B, and Advisor Class shares for purchase.
Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Fund's current
prospectus. GT Global collects the sales charges imposed on sales of Class A
shares, and reallows a portion of such charges to dealers through which the
sales are made. For the year ended December 31, 1996, GT Global retained $28,270
of such sales charges. Purchases of Class A shares exceeding $500,000 may be
subject to a contingent deferred sales charge ("CDSC") upon redemption, in
accordance with the Fund's current prospectus. GT Global collected CDSCs in the
amount of $20,052 for the year ended December 31, 1996. GT Global also makes
ongoing shareholder servicing and trail commission payments to dealers whose
clients hold Class A shares.
Class B shares are not subject to initial sales charges. When Class B shares are
sold, GT Global from its own resources pays commissions to dealers through which
the sales are made. Certain redemptions of Class B shares made within six years
of purchase are subject to CDSC's, in accordance with the Fund's current
prospectus. During the year ended December 31, 1996, GT Global collected CDSC's
in the amount of $345,483. In addition, GT Global makes ongoing shareholder
servicing and trail commission payments to dealers whose clients hold Class B
shares.
Pursuant to Rule 12b-1 under the 1940 Act, the Company's Board of Trustees has
adopted separate distribution plans with respect to the Fund's Class A shares
("Class A Plan") and Class B shares ("Class B Plan"), pursuant to which the Fund
reimburses GT Global for a portion of its shareholder servicing and distribution
expenses. Under the Class A Plan, the Fund may pay GT Global a service fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class A shares for its expenditures incurred in servicing and maintaining
shareholder accounts, and may pay GT Global a distribution fee at the annualized
rate of up to 0.35% of the average daily net assets of the Fund's Class A
shares, less any amounts paid by the Fund as the aforementioned service fee, for
its expenditures incurred in providing services as distributor. All expenses for
which GT Global is reimbursed under the Class A Plan will have been incurred
within one year of such reimbursement.
Pursuant to the Fund's Class B Plan, the Fund may pay GT Global a service fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class B shares for its expenditures incurred in servicing and maintaining
shareholder accounts, and may pay GT
F16
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
Global a distribution fee at the annualized rate of up to 0.75% of the average
daily net assets of the Fund's Class B shares for its expenditures incurred in
providing services as distributor. Expenses incurred under the Class B Plan in
excess of 1.00% annually may be carried forward for reimbursement in subsequent
years as long as that Plan continues in effect.
The Manager and GT Global have voluntarily undertaken to limit the Fund's
expenses (exclusive of brokerage commissions, taxes, interest and extraordinary
items) to the maximum annual level of 2.25%, and 2.90%, and 1.90% of the average
daily net assets of the Fund's Class A, Class B and Advisor Class shares,
respectively. If necessary, this limitation will be effected by waivers by the
Manager of investment management and administration fees, waivers by GT Global
of payments under the Class A Plan and/or Class B Plan and/or reimbursements by
the Manager or GT Global of portions of the Fund's other operating expenses.
GT Global Investor Services, Inc. ("GT Services"), an affiliate of the Manager
and GT Global, is the transfer agent of the Fund. For performing shareholder
servicing, reporting, and general transfer agent services, GT Services receives
an annual maintenance fee of $17.50 per account, a new account fee of $4.00 per
account, a per transaction fee of $1.75 for all transactions other than
exchanges and a per exchange fee of $2.25. GT Services also is reimbursed by the
Fund for its out-of-pocket expenses for such items as postage, forms, telephone
charges, stationery and office supplies.
The Manager is the pricing and accounting agent for the Fund. The monthly fee
for these services to the Manager is a percentage, not to exceed 0.03% annually,
of the Fund's average daily net assets. The annual fee rate is derived by
applying 0.03% to the first $5 billion of assets of all registered mutual funds
advised by the Manager and 0.02% to the assets in excess of $5 billion and
allocating the result according to the Fund's average daily net assets.
The Company pays each of its Trustees who is not an employee, officer or
director of GT Capital, GT Global or GT Services $5,000 per year plus $300 for
each meeting of the board or any committee thereof attended by the Trustee.
3. PURCHASES AND SALES OF SECURITIES
For the year ended December 31, 1996, purchases and sales of investment
securities by the Fund, other than U.S. government obligations and short-term
investments, aggregated $224,329,938 and $343,544,014, respectively. There were
no purchases or sales of U.S. government obligations by the Fund during the
period.
F17
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
4. CAPITAL SHARES
At December 31, 1996, there were an unlimited number of shares of beneficial
interest authorized, at no par value. Transactions in capital shares of the Fund
were as follows:
CAPITAL SHARE TRANSACTIONS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1996 DECEMBER 31, 1995
------------------------------- -------------------------------
CLASS A SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------- ------------- ---------------- ------------- ----------------
<S> <C> <C> <C> <C>
Shares sold.................................. 122,327,179 $ 1,141,723,541 140,096,147 $ 1,244,115,581
Shares issued in connection with reinvestment
of distributions........................... 1,912,490 16,848,644 1,274,450 11,483,253
------------- ---------------- ------------- ----------------
124,239,669 1,158,572,185 141,370,597 1,255,598,834
Shares repurchased........................... (136,198,803) (1,274,970,792) (154,325,977) (1,370,898,171)
------------- ---------------- ------------- ----------------
Net decrease................................. (11,959,134) $ (116,398,607) (12,955,380) $ (115,299,337)
------------- ---------------- ------------- ----------------
------------- ---------------- ------------- ----------------
YEAR ENDED YEAR ENDED
DECEMBER 31, 1996 DECEMBER 31, 1995
------------------------------- -------------------------------
CLASS B SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------- ------------- ---------------- ------------- ----------------
Shares sold.................................. 11,345,619 $ 103,852,840 4,065,880 $ 35,727,913
Shares issued in connection with reinvestment
of distributions........................... 678,796 5,819,941 329,999 2,917,198
------------- ---------------- ------------- ----------------
12,024,415 109,672,781 4,395,879 38,645,111
Shares repurchased........................... (12,451,843) (114,133,394) (4,499,678) (39,592,887)
------------- ---------------- ------------- ----------------
Net decrease................................. (427,428) $ (4,460,613) (103,799) $ (947,776)
------------- ---------------- ------------- ----------------
------------- ---------------- ------------- ----------------
JUNE 1, 1995
(COMMENCEMENT OF SALE OF
YEAR ENDED SHARES)
DECEMBER 31, 1996 TO DECEMBER 31, 1995
------------------------------- -------------------------------
ADVISOR CLASS SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------- ------------- ---------------- ------------- ----------------
Shares sold.................................. 2,233,829 $ 21,033,137 47,423 $ 417,842
Shares issued in connection with reinvestment
of distributions........................... 3,723 33,098 1,656 14,951
------------- ---------------- ------------- ----------------
2,237,552 21,066,235 49,079 432,793
Shares repurchased........................... (2,228,201) (21,036,679) (7,264) (64,899)
------------- ---------------- ------------- ----------------
Net increase................................. 9,351 $ 29,556 41,815 $ 367,894
------------- ---------------- ------------- ----------------
------------- ---------------- ------------- ----------------
</TABLE>
5. EXPENSE REDUCTIONS
The Manager has directed certain portfolio trades to brokers who paid a portion
of the Fund's expenses. For the year ended December 31, 1996, the Fund's
expenses were reduced by $179,764 under these arrangements.
- ------------
FEDERAL TAX INFORMATION (UNAUDITED):
For its fiscal year ended December 31, 1996, the total amount of income received
by the Fund from sources within foreign countries and possessions of the United
States was approximately $.23 per share (representing an approximate total of
$6,254,495). The total amount of taxes paid by the Fund to such countries was
approximately $.05 per share (representing an approximate total of $1,336,665).
Pursuant to Section 852 of the Internal Revenue Code, the Fund designates
$22,365,202 as a capital gain dividend for the fiscal year ended December 31,
1996.
F18
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
NOTES
- --------------------------------------------------------------------------------
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
GT GLOBAL MUTUAL FUNDS
GT GLOBAL OFFERS A BROAD RANGE OF MUTUAL FUNDS TO COMPLEMENT MANY INVESTORS'
PORTFOLIOS. FOR MORE INFORMATION AND A PROSPECTUS ON ANY OF THE GT GLOBAL
MUTUAL FUNDS, PLEASE CONTACT YOUR INVESTMENT COUNSELOR OR CALL GT GLOBAL
DIRECTLY AT 1-800-824-1580. THE PROSPECTUS CONTAINS MORE COMPLETE
INFORMATION, INCLUDING CHARGES, EXPENSES AND RISKS. INVESTORS SHOULD READ
THE PROSPECTUS CAREFULLY BEFORE INVESTING.
GROWTH FUNDS
/ / GLOBALLY DIVERSIFIED FUNDS
GT GLOBAL WORLDWIDE GROWTH FUND
Invests around the world, including the U.S.
GT GLOBAL INTERNATIONAL GROWTH FUND
Provides portfolio diversity by investing outside the U.S.
GT GLOBAL EMERGING MARKETS FUND
Gives access to the growth potential of developing economies
/ / GLOBAL THEME FUNDS
GT GLOBAL HEALTH CARE FUND
Invests in growing health care industries worldwide
GT GLOBAL TELECOMMUNICATIONS FUND
Invests in companies worldwide that develop, manufacture, or sell
telecommunications services or equipment
GT GLOBAL INFRASTRUCTURE FUND
Seeks companies that build, improve, or maintain a country's infrastructure
GT GLOBAL FINANCIAL SERVICES FUND
Focuses on the worldwide opportunities from the demand for financial services
and products
GT GLOBAL NATURAL RESOURCES FUND
Concentrates on companies that own, explore, or develop natural resources
GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
Invests in companies that manufacture, market, retail, or distribute consumer
products or services
/ / REGIONALLY DIVERSIFIED FUNDS
GT GLOBAL NEW PACIFIC GROWTH FUND
Offers access to the emerging and established markets of the Pacific Rim,
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
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THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENT PROSPECTUS.
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[LOGO]
GT Global, Inc.
Fifty California Street
27th Floor
San Francisco, California
94111-4624
DATED MATERIAL
PLEASE EXPEDITE
GT GLOBAL INTERNATIONAL GROWTH FUND
INTAR702M
