<PAGE>
GT GLOBAL AMERICA FUNDS
TABLE OF CONTENTS
Message from the President . . . . . . . . . . . . . . . . . . . . 2
Three Funds, Three Levels of Opportunity . . . . . . . . . . . . . 3
Market Review and Outlook . . . . . . . . . . . . . . . . . . . . 6
GT Global America Small Cap Growth Fund . . . . . . . . . . . . . 7
GT Global America Mid Cap Growth Fund . . . . . . . . . . . . . . 10
GT Global America Value Fund . . . . . . . . . . . . . . . . . . . 13
Report of Independent Accountants . . . . . . . . . . . . . . . . F1
Financials . . . . . . . . . . . . . . . . . . . . . . . . . . . . F2
List of Funds . . . . . . . . . . . . . . . . . . . Inside Back Cover
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.
<PAGE>
GT GLOBAL AMERICA FUNDS
MESSAGE FROM THE PRESIDENT
DEAR INVESTOR,
We're pleased to report some exciting new developments here at GT Global, and
for our America Funds in particular. This past fall we significantly
enhanced the breadth and depth of our domestic investment capabilities 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 GT Global
Mutual Funds' advisor, and the combined entity is now known as Chancellor LGT
Asset Management. The acquisition increased LGT's worldwide assets to over
$80 billion.
Chancellor has earned an outstanding reputation for having disciplined U.S.
equity and fixed income investment processes, coupled with proven
fundamental and quantitative investment capabilities. Over 320 institutional
investors, including numerous Fortune 500 firms, use their high-quality
management services. Now shareholders in the GT Global America Funds also
have the opportunity to benefit from the expertise of these top-notch U.S.
equity and fixed income professionals and their processes. These resources
represent an ideal complement to LGT's expertise as an experienced global
investment manager with an extensive global infrastructure.
At the helm of the investment organization is Warren Shaw, LGT's Global Chief
Investment Officer. Mr. Shaw 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.
To fully take advantage of the new organization's resources, the GT Global
America Funds have new portfolio managers as of January 2, 1997 -- all
experienced members of the Chancellor investment team. Ellen Adams,
co-manager of the GT Global America Mid Cap Growth Fund (formerly GT Global
America Growth Fund), has been an analyst and portfolio manager for nearly 20
years. She is head of the North American Equity Group, which includes
portfolio management for large and small cap growth, large cap value, and
core equity strategies. Her co-manager, Ann Hutchins, has been an analyst and
portfolio manager for 13 years.
Barbara Mignogna and Mark Cunneen will now co-manage the GT Global America
Small Cap Growth Fund. Ms. Mignogna, head of the North American Small Cap
Growth Equity Group, began her career in 1979, researching the technology
industry. Mark Cunneen has over 12 years' experience, and has been a
portfolio manager with Chancellor since 1992.
Two other Chancellor investment managers, Ted Ujazdowski and Adam Scheiner,
are co-managers for the GT Global America Value Fund. Mr. Ujazdowski has over
20 years' experience as an analyst and portfolio manager, and has been
Director of the Value Group since 1987. Adam Scheiner, with over 12 years'
experience, has been a portfolio manager and analyst with Chancellor since
1993.
As always, consistent, above-average performance is our priority. That's why
we're enthusiastic about the abilities of these fine professionals and the
skills they bring to the management of GT Global Mutual Funds.
We appreciate your continued confidence. If you or your financial adviser
have questions regarding the GT Global America Funds, please call us at
1-800-824-1580. One of our registered representatives will be happy to assist
you.
Sincerely,
William J. Guilfoyle
President
GT Global Mutual Funds
2 . . .
<PAGE>
THREE FUNDS, THREE LEVELS OF OPPORTUNITY
Historically, different sized U.S. companies have shown different risk and
return characteristics. The largest companies, such as those in the Standard
& Poor's 500 Index, have shown consistent returns with a moderate degree of
day-to-day price fluctuation. The smallest companies, such as those traded on
NASDAQ, have shown bursts of outstanding performance, but with a higher range
of price fluctuation. Medium-sized companies, represented by the S&P 400 Mid
Cap Index, have often outperformed larger and smaller companies, but have
generally produced returns and price fluctuations in ranges between small and
large cap stocks.
Of course, the U.S. market is continually shifting, and investment styles
move in and out of favor. Styles labeled as growth or value tend to perform
differently depending on the investment climate. With that in mind, GT Global
offers three U.S. equity mutual funds for investing in different
capitalization segments:
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
Invests primarily in companies with a market capitalization of up to $1
billion at the time of purchase. (The Fund's market capitalization range
changed as of January 2, 1997; previously, the Fund invested primarily in
companies having a market capitalization of up to $500 million at the time of
purchase.) Because small cap stocks have traditionally proven more volatile
than larger, more broadly held stocks, investors in this Fund should be
willing to assume a greater degree of price fluctuation. To seek to reduce
price fluctuation, the Fund's portfolio managers adhere to a disciplined
investment process when selecting stocks for the portfolio.
GT GLOBAL AMERICA MID CAP GROWTH FUND*
Investing primarily in companies with a market capitalization of $1 billion
to $5 billion at the time of purchase. (The Fund's market capitalization
range changed as of January 2, 1997; previously, the Fund normally initially
focused on companies having a market capitalization of $2 billion or less at
the time of purchase.)
GT GLOBAL AMERICA VALUE FUND
Investing primarily in companies with a market capitalization of $500 million
and up at the time of purchase, and that our investment team has determined
to be priced low relative to the companies' fair value and long-term
potential.
THE GT GLOBAL AMERICA FUNDS OFFER VERSATILE INVESTMENT OPPORTUNITIES THAT CAN
SERVE AS A SOLID FOUNDATION TO YOUR INVESTMENT PORTFOLIO.
GT GLOBAL AMERICA FUNDS
[GRAPH]
GT Global America Value Fund . . . . . . . . . . . . . $500 Million and Up
GT Global America Small Cap Growth Fund . . . . . . . Up to $1 Billion
GT Global America Mid Cap Growth Fund* . . . . . . . . $1 Billion to $5 Billion
* Formerly GT Global America Growth Fund.
. . . 3
<PAGE>
OUR GROWTH INVESTMENT PROCESS:
COMBINING QUANTITATIVE AND QUALITATIVE RESEARCH
GT Global adheres to an investment process designed to deliver the
consistent, competitive results investors expect. The process helps assure
investors that we stay true to each Fund's stated objectives.
Our growth equity managers seek to invest in companies with sustainable
above-average growth at an attractive price. We invest in companies that have:
- -- Solid market franchises
- -- Strong management
- -- Favorable earnings momentum
- -- Strict cost controls
- -- Potential for positive earnings surprises
- -- Clear evidence of undervaluation
COMBINATION OF FUNDAMENTAL AND QUANTITATIVE RESEARCH
Our highly experienced in-house team of career research analysts provide the
engine of our growth investing approach. These analysts are specialists,
having spent years covering their industries, and provide us with
unparalleled access to the companies they follow.
The primary goal of our research effort is to develop and maintain
well-supported, non-consensus perspectives on these companies. Research is
conducted by contacting company management, competitors, suppliers,
distributors and customers to determine a company's fundamental position and
its potential for change.
As a check to forward-looking fundamental research, we utilize a proprietary,
quantitative stock selection model developed more than 13 years ago by our
Quantitative Equity Research Group. As part of our process, our team of
quantitative analysts continually researches and updates the model.
[GRAPH]
Fundamental Research Quantitative Research
-------------------- ---------------------
Stock Selection
---------------
Formal Risk Control
-------------------
Portfolio Implementation and Control
------------------------------------
FORMAL RISK CONTROL
We manage risk at each stage of the investment process in a fully integrated
manner. We also manage portfolio volatility by increasing or reducing our
actual industry exposures relative to our normal weights to limit our
exposure in response to our market outlook and additional factors, such as
valuation and earnings momentum. This permits flexibility relative to our
growth benchmark, yet ensures against undue volatility associated with
overexposure to one industry.
A DEFINED RANKING SYSTEM
THE QUANTITATIVE PERSPECTIVE PROVIDES A CRITICAL INDEPENDENT CONTRIBUTION,
BUT IT IS THE INDIVIDUAL ANALYST'S INPUT THAT PRIMARILY DRIVES THE STOCK
SELECTION DECISION. AT ALL TIMES, AT LEAST 85% OF PORTFOLIO HOLDINGS MUST BE
RANKED IN THE TOP 30% OF OUR UNIVERSE. THIS SYSTEMATIC APPROACH TO STOCK
SELECTION HELPS ENSURE THAT WE OWN OUR BEST INVESTMENT IDEAS.
[GRAPH]
Quantitative Research Qualitative Research
- --------------------- --------------------
Buy Hold Sell
-------------------------------------------------------------
10% 20% 40% 20% 10%
-------------------------------------------------------------
1 2 3 4 5
-------------------------------------------------------------
4 . . .
<PAGE>
PORTFOLIO IMPLEMENTATION AND CONTROL
Stocks are purchased from the top 30% of the valuation matrix, or when
analysts upgrade their rankings. Stocks are sold when they fall to the bottom
30% of the matrix, or when an analyst significantly lowers his/her ranking of
the stock.
The portfolio is monitored on a regular basis through our peer review
process to ensure consistency with our guidelines, our established industry
weightings and our combined stock rankings. At least 85% of portfolio
holdings must be ranked in the top 30% of our universe.
Through this disciplined investment process, you can take comfort in knowing
you're investing in well-tested companies that have demonstrated steady
performance through economic ups and downs.
A DIFFERENT APPROACH TO DETERMINING VALUE
Our value equity philosophy seeks to take advantage of inefficiently priced
securities while utilizing a disciplined and rational approach to maximize
returns. Our value strategy combines the strengths of our fundamental
research team with quantitative analysis. These resources come together in a
clearly defined, repeatable process.
We concentrate on companies with moderate growth where there is a catalyst.
Stocks selling at a discount should reach full value within our 18- to
36-month time frame. By taking this approach, we seek to ensure that we only
buy at a discount to current fair value, and that the fair value increases
over time.
STOCK SELECTION
Our commitment to in-house research is one of our primary assets. Research
focuses on identifying prospective changes in business fundamentals and
valuation inefficiencies. Our analysts cover specific industries and know
more than just the business financials. They are familiar with the company's
management, products, and critical industry variables that could determine
future prospects.
QUANTITATIVE CRITERIA
A COMBINED DISCIPLINE
To add objectivity to the fundamental research, we conduct a series of
quantitative screens that include price-to-book, cash flow, price/earnings,
revenue per share and volatility.
PORTFOLIO CONSTRUCTION
Fundamental and quantitative data are blended in the Value Combined Ratings
Matrix, which produces an overall ranking of all stocks on a scale of 1 to
5. The Value Matrix identifies what we believe are the best 150 value
investments. The top 30% make up the focus list of buy candidates; the
stocks in the bottom 30% of the Matrix fall into the sell category.
[GRAPH]
FUNDAMENTAL RESEARCH QUANTITATIVE SCREENS
VALUE COMBINED RATINGS MATRIX
FOCUS LIST
We also establish a price target for each stock we purchase. A stock is sold
if it reaches our price target earlier than anticipated, indicating fair
value has been attained.
In today's fast-paced environment, this combination of fundamental and
quantitative resources enables identification of opportunities that may be
overlooked by using either discipline alone. We believe our process sets us
apart from the typical value manager.
. . . 5
<PAGE>
MARKET REVIEW AND OUTLOOK
Undaunted by Federal Reserve Chairman Alan Greenspan's cautionary statements
in early December 1996, the equity market forged ahead to new highs, ending
the year with a 23% gain, as measured by the S&P 500.(1) This is the second
straight year the equity market has turned in impressive gains, bringing the
two-year appreciation close to 70% or better for both the S&P 500 and the Dow
Jones Industrials. The fourth quarter alone produced an 8% advance for the
S&P 500.
The foundation for the strong advance was what many have referred to as a
"Goldilocks" economy -- not too hot, not too cold -- one that grows fast
enough to allow good gains in corporate profits, but not so fast as to force
the Federal Reserve to raise interest rates to tighten monetary policy.
Despite a sharp, but brief, midyear correction and periodic fears of a hike
in interest rates by the Federal Reserve, the market enjoyed a year
characterized by moderation in most of the key economic variables. As well,
the Fed's stable monetary posture and the balanced results of the November
elections enhanced investor confidence in financial markets. With mutual fund
inflows from retirement plans and individuals reaching a record pace and
yields on money market instruments at low levels, the stage was set for the
market's advance.
Performance for the year was heavily skewed toward liquid, large-cap issues,
as reflected by the Dow's strong 29% advance, while smaller capitalization
stocks lagged noticeably -- the Russell 2000 Index rose just 17%. In fact,
more than half the S&P 500's advance for the year was generated by the 10
largest capitalization stocks in the index. Even more striking was that the
two largest stocks in the NASDAQ 100 (Intel and Microsoft) accounted for 80%
of its 45% return.
Performance also was diverse across industries. For example, semiconductor
stocks underperformed the market until midsummer but ended the year up
sharply -- notably, Intel's 130% gain accounted for most of the group's 80%
price appreciation. Retail stocks, after lagging the market for three years,
started the year with convincing momentum based on prospects for stronger
unit volumes, reduced inventories and better pricing. By year-end, however,
the stocks had slipped after a midyear correction and slower-than-expected
Christmas sales. Media, cable and wireless communication stocks stood out as
notable underperformers, with each posting negative returns.
Vital signs for the economy and interest rates remain positive. Still, the
market's mood has understandably turned cautious, considering the powerful
move of the last 24 months. Economic growth is likely to remain moderate (in
the 2%-3% range) for the coming year, paving the way for further growth in
corporate profits. Inflation, which studies suggest may be more tame than
indicators imply, should remain muted as long as wage growth does not exceed
productivity gains. Interest rates, which have backed up recently on fears of
a stronger economy, will most likely stabilize and trend lower as evidence of
extended moderate growth begins to predominate. We believe a rising U.S.
dollar and the possibility of a domestic budget compromise should also help
bolster the markets. Major imponderables that remain are the pace of new
investment flows into the markets and the effect a market correction might
have on these flows.
While investors may take some time to digest their recent gains, there is
little reason, on either fundamental or valuation grounds, to project a major
market reversal in the first months of 1997. Barring a significant
deterioration in the market backdrop, equities have the potential to produce
positive, although less impressive, returns for investors.
January, 1997
(1) The index performance shown is for illustrative purposes only and is not
intended to represent the performance of the GT Global America Funds. Please
see pages 7-15 for Fund performance.
6 . . .
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
INTERVIEW WITH THE PORTFOLIO MANAGERS(1) January, 1997
Q HOW DID THE FUND PERFORM?
A The Fund's total return for the 12 months ended December 31, 1996, was
13.81% for Class A shares (8.40% including the maximum 4.75% sales charge);
total return for Class B shares was 13.14% (8.14% including the effect of the
maximum 5% contingent deferred sales charge). During the same period, the
Russell 2000 Index(2) returned 16.49%. The Fund was underweighted in computer
stocks during the year, which hurt its results, since this sector was a
strong performer. Also, disappointments in the manufactured housing market
affected holdings in that sector in the second half of the year.
Q HOW IS THE FUND POSITIONED AND WHY?
A Currently, the Fund is overweighted in the consumer and technology
industries, underweighted in the health care industry and about market
weighted in the industrial sector, relative to the Russell 2000 industry
weightings. Our overweighted position in the consumer sector is driven
strictly from a bottom- up perspective, as we have identified a large number
of consumer companies experiencing rapid growth in both sales and earnings.
Areas we like include death care companies, outdoor advertising and lodging.
Rapidly changing technology in the work force, as well as proliferation in
the business community of the client/server platform, has created the
opportunity for extremely rapid growth of many technology companies. Our
enthusiasm for this sector is tempered only somewhat by current valuations.
Areas we especially like in technology are client/server applications and
video-conferencing.
Because the industrial sector is much more economically dependent and
cyclical in nature, we have chosen to be neutral with the Russell 2000
weighting for this sector. Our underweighting the health care industry has
been driven by what we saw as overvaluations of the stocks and continued cost
pressures on the health care system in general.
ABOUT THE PORTFOLIO MANAGERS
BARBARA MIGNOGNA -- Head of the North American Small Cap Growth Equity
Management Group since 1995; Portfolio Manager since 1993. Previously, Ms.
Mignogna was a Portfolio Manager and Analyst with J.R.O. Associates,
specializing in the technology industry. She received a B.S. in Electrical
Engineering from Lafayette College in 1979.
MARK J. CUNNEEN -- Portfolio Manager since 1992. From February 1992 to
December 1992, Mr. Cunneen was President of DC Capital, Inc., an investment
management firm. He was also Vice President of Equity Investments at
Massachusetts Financial Services from 1987 until 1992. Mr. Cunneen earned an
M.B.A. from the Wharton School of the University of Pennsylvania in 1986.
[PHOTO]
THE GT GLOBAL AMERICA FUNDS' PORTFOLIO MANAGERS: (FRONT, LEFT TO RIGHT) ANN
HUTCHINS, TED UJAZDOWSKI, BARBARA MIGNOGNA. (BACK, LEFT TO RIGHT) ADAM
SCHEINER, ELLEN ADAMS, MARK CUNNEEN.
(1) The managers were all employees of Chancellor Capital Management until
October 31, 1996, when LGT Asset Management merged with Chancellor. The
resulting entity was renamed Chancellor LGT Asset Management and is the
investment advisor to GT Global Mutual Funds.
(2) The Russell 2000 Index is composed of 2,000 U.S.-domiciled common stocks
designed to measure small company stock performance. The index represents
roughly 10% of the U.S. stock market, and market capitalization of index
companies ranged from $90 million to $1.17 billion as of June 1996. Its
performance includes the effect of reinvested dividends and is measured in
U.S. dollars.
Indices are unmanaged, not available for direct investment and do not incur
sales charges and professional management fees.
. . . 7
<PAGE>
INVESTMENT OBJECTIVE AND CURRENT STRATEGY
The Fund seeks long-term capital appreciation by investing primarily in
equity securities of small capitalization companies domiciled in the United
States. During the reporting period (January 1 to December 31, 1996), the
Fund invested in companies having a market capitalization of up to $500
million at the time of purchase. As of January 2, 1997, the Fund's market
capitalization range changed. We now invest in companies having a market
capitalization of up to $1 billion at the time of purchase.
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
PERFORMANCE SUMMARY
[GRAPH]
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
CLASS A SHARES CLASS B SHARES RUSSELL 2000 INDEX
10/18/95 9525 10000 10000
9558.33 10035 9746.34
9741.67 10218.7 10155.8
9833.33 10306.2 10423.7
9900 10367.5 10412.4
10458.3 10953.6 10737
10866.7 11373.6 10955.5
4/30/96 11883.3 12440.9 11541.3
12325 12887.1 11996.1
11608.3 12134.7 11503.6
10716.7 11198.6 10498.8
10875 11356.1 11108.4
11683.3 12196 11542.5
11300 11784.8 11364.6
11183.3 11653.5 11832.9
12/31/96 11190.8 11261 12143
The charts above show the performance of the GT Global America Small Cap
Growth Fund, Class A and Class B shares, versus the Russell 2000 Index since
the Fund's inception. The chart assumes a hypothetical $10,000 initial
investment in Class A shares and reflects all Fund expenses and the maximum
4.75% sales charge. For Class B shares, results reflect 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
October 18, 1995, would have been worth $11,801 on December 31, 1996.
[GRAPH]
AVERAGE ANNUAL TOTAL RETURNS(1)
December 31, 1996 %
Without Sales Charge(2) With Sales Charge
Share Class 1-Year Life of Fund 1-Year Life of Fund
Class A 13.81 14.34 8.40 9.81
Class B 13.14 13.63 8.14 10.38
Advisor Class(3) 14.22 14.76 N/A N/A
(1) Figures assume reinvestment of all dividends and capital gain
distributions at net asset value.
(2) Performance data do not reflect the maximum 4.75% sales charge or 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) 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. From time to
time, the Fund's investment advisor may waive some fees and/or reimburse some
expenses, without which performance would be lower. Waivers and
reimbursements are subject to change.
8 . . .
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
ALLOCATION OF NET ASSETS %
[GRAPH]
December 31, 1996 December 31, 1995
Services 31.0 26.3
Consumer Durables 15.3 10.0
Finance 14.0 12.3
Capital Goods 13.3 4.9
Technology 5.5 5.1
Materials/Basic Industry 4.9 7.3
Consumer Non-Durables 4.0 7.1
Health Care 1.8 2.7
Short Term & Other 10.2 24.3
Allocations will change based on current market conditions. A complete
listing may be found in the Financial Statements section of this report.
KEY PORTFOLIO HOLDINGS(1) (AS OF DECEMBER 31, 1996) % OF NET ASSETS
ETHAN ALLEN INTERIORS, INC. Operates through its 4.9
subsidiary, Ethan Allen, Inc., which manufactures and
retails home furnishings. The products are sold in Ethan
Allen Home Interior stores worldwide. Products include
bedroom/dining room wood furniture, upholstered sofas, love
seats, chairs, recliners and accessories, such as rugs,
wall decor and bedding.
CARIBINER INTERNATIONAL, INC. An international producer of 4.5
meetings, events, training programs, and related business
communications services. The company's services enable
businesses to inform, sell to and train their sales forces,
dealers, franchises, partners, stockholders and employees.
SYRATECH CORPORATION Designs, manufactures, imports and 4.4
distributes tabletop and giftware products, including
sterling silver, silverplated and stainless steel flatware,
holloware and ornamental items. Syratech's products are
sold through a variety of stores nationwide.
BELDEN, INC. Designs, manufactures and markets wire, cable 4.2
and cord products for the electronics and electrical
markets in the U.S. and internationally. The company's
electronics products include multi-conductor cable, coaxial
cables and fiber optic backbone cable. Belden's products
for the electrical market consist of power cords and single
conductor wire.
COACHMEN INDUSTRIES, INC. Manufactures and distributes 4.0
knitted textiles through its wholly owned subsidiary,
Olympic Mills. The company manufactures underwear, tee
shirts and polo shirts in plants in Puerto Rico.
CHAMPION ENTERPRISES, INC. Manufactures and markets 3.8
manufactured homes and medium-size buses through its
subsidiaries. The company also sells new manufactured
homes, ranging in size from 675 to more than 2,000 square
feet, in the retail market.
EXTENDED STAY AMERICA, INC. Develops, owns and manages 3.4
extended-stay lodging facilities. These hotels are designed
around customers -- such as business travelers, people
relocating, or on temporary assignment away from home --
staying on a weekly basis. The company currently has 48
hotels nationwide.
SPORTS AUTHORITY, INC. Operates large-format sporting goods 3.2
stores in the U.S. and Canada. The company's stores sell a
large variety of sporting goods, including brand-name
sporting equipment, and athletic and active footwear and
apparel.
TEKELEC Designs, manufactures and markets diagnostic, 3.2
surveillance and switching systems that advance the
evolution of the intelligent network and support
inter-networking worldwide.
SOVEREIGN BANCORP, INC. The holding company for Sovereign 3.2
Bank, a federal savings bank that has 122 banking and loan
offices. The bank conducts commercial banking services
through its branch offices located throughout eastern
Pennsylvania, New Jersey and northern Delaware.
(1) There is no assurance the Fund will continue to hold these or any other
securities mentioned in this report.
. . . 9
<PAGE>
GT GLOBAL AMERICA MID CAP GROWTH FUND
INTERVIEW WITH THE PORTFOLIO MANAGERS January, 1997
Q HOW DID THE FUND PERFORM IN 1996?
A The Fund's total return for the period was 15.65% for Class A shares
(10.16% including the maximum 4.75% sales charge). Total return for Class B
shares was 14.82% (9.82% including the effect of the maximum 5% contingent
deferred sales charge. During the same period, the S&P Mid Cap 400 Index(1)
returned 19.20%, and the Russell 2000 Index(2) returned 16.49%.
The primary factor contributing to the Fund's underperformance relative to
its benchmark in 1996 was an overweighting early in the year in semiconductor
companies and companies supplying the semiconductor industry. The price for
DRAM (dynamic random access memory) chips used in many personal computers
fell dramatically, negatively impacting the Fund. We decreased our weightings
and in the second six months of the year, the Fund generally tracked the
market.
Q HOW IS THE FUND POSITIONED AND WHY?
A As we enter 1997, our mid cap growth portfolio is positioned in stocks we
expect to post accelerating earnings growth and positive earnings surprises
relative to Wall Street consensus. Such positive earnings momentum should be
well rewarded in the domestic environment of modest GDP growth and low
inflation we expect to play out in 1997.
We believe companies in the current portfolio will grow their earnings about
36% in 1997, versus S&P earnings growth of about 10%, and expect that such
superior earnings growth potential over time will lead to outperformance. Our
emphasis on superior earnings growth has led us to over-weight several
sectors in the portfolio, including technology, specialty financial services
and business and consumer services.
Q PLEASE DESCRIBE THESE SECTORS IN MORE DETAIL.
A Technology continues to be one of the most dynamic growth sectors.
Communications band-width remains a bottleneck in corporate, public and
internet applications. Our emphasis is on specialty communications equipment
companies that offer products addressing these bottlenecks. Client server
computing continues to grow rapidly, and we hold positions in a number of
companies delivering applications into this market. Finally, as software
development has become more complex, we see opportunities in companies that
provide tools to manage this process.
Financial services represents an area of significant overweighting in our
portfolios. We are taking advantage of the trend toward consolidation in the
life and auto insurance markets by owning what we consider the leading
consolidator in these businesses. In addition, we believe Wall Street is
underestimating the growth potential in a number of attractive specialty
financial companies, where we see opportunity for both strong earnings growth
potential and multiple expansion.
Our analyst team has also identified a number of attractive business and
consumer services opportunities. New corporate supplier services have the
potential to change the corporate purchasing process. Lodging continues to
present favorable supply/demand dynamics, and we have also targeted payroll
services. In addition, we believe the trend toward consolidation in outdoor
advertising offers a number of attractive investments.
ABOUT THE PORTFOLIO MANAGERS
ELLEN H. ADAMS -- Head of North American Equity since 1995; Director of
Equity Research from May 1993 through 1996, and currently a growth portfolio
manager. Previously, she was a Portfolio Manager for Neuberger & Berman. Ms.
Adams received an M.B.A. in Finance with Distinction from the Wharton School
of the University of Pennsylvania in 1984.
ANN B. HUTCHINS -- Portfolio Manager since 1994. Ms. Hutchins was also Equity
Portfolio Manager and Research Analyst for Cadence Capital Management from
1988 until 1994. Ms. Hutchins received an M.B.A. from Babson College in 1988.
(1) The S&P Mid Cap 400 Index is composed of the capitalization-weighted
average price of 400 selected common stocks of medium-size domestic
companies. Its performance includes the effect of reinvested dividends and is
measured in U.S. dollars.
(2) The Russell 2000 Index is composed of 2,000 U.S.-domiciled common stocks
designed to measure small company stock performance. The index represents
roughly 10% of the U.S. stock market, and market capitalization of index
companies ranged from $90 million to $1.17 billion as of June 1996. Its
performance includes the effect of reinvested dividends and is measured in
U.S. dollars. Indices are unmanaged, not available for direct investment and
do not incur sales charges and professional management fees.
10 . . .
<PAGE>
GT GLOBAL AMERICA MID CAP GROWTH FUND
PERFORMANCE SUMMARY
[GRAPH]
GT GLOBAL AMERICA
MID CAP GROWTH FUND RUSSELL 2000 INDEX S&P MID CAP 400 INDEX
CLASS A SHARES
6/9/87 9525 10000 10000
9915.53 10250 10177.7
10229.9 10538 10494.6
10696.6 10920.5 10802.9
10439.4 10709.8 10603.8
7467.6 8177.99 7357.56
7229.48 7774 6962.7
8153.4 8374.93 7522.43
8315.33 8758.5 7849.22
9010.65 9314.66 8555.52
8886.83 9466.49 8957.07
9086.85 9514.77 9160.11
8810.63 9315.91 8911.43
9629.78 9987.59 9547.49
9391.65 9718.92 9456.01
9020.18 9493.44 9214.02
9277.35 9857.04 9457.58
9029.7 9925.06 9352.52
8753.48 9731.52 9040.88
9061.55 10124.7 9395.02
9723.58 10814.2 9813.88
9837.37 10849.9 9886.09
10344.2 11090.7 10118.6
11306.2 11690.7 10559.9
12216.5 12255.4 11014
11782.1 12200.2 10763
12764.8 12924.9 11181.8
13126.8 13383.8 11453.9
13416.5 13531 11489.7
13292.4 12961.3 10808.6
13437.2 13247.8 10877.7
14024.8 13720.7 10921
12637.6 12560 9967.14
13424.1 13010.9 10276.4
14396.2 13291.9 10679.5
14134 12776.2 10330.5
16143.8 14023.1 11062.2
16209.4 14080.6 11091.3
15575.9 13758.2 10605.2
13511.5 12331.4 9186.67
12255.3 11576.8 8369.8
11971.3 11223.7 7858.86
12681.3 12302.3 8458.33
12987.2 13017 8790.63
13620.7 14045.4 9582.51
14483.6 15306.6 10657.3
15215.4 16004.6 11404.7
14996.9 15999.8 11375.2
15521.2 16737.4 11917
14363.4 15887.1 11227.9
15248.2 16843.6 11620.8
15980 17456.7 12049.3
15455.7 17400.3 12143.3
15149.9 18082 12464.4
14177.7 17472.7 11887.5
15492.4 19538.1 12838.8
17323.4 19883.5 13880
17487.8 20199.9 14285.2
3/31/92 16468.2 19438.5 13801.8
15963.8 19206.5 13317.3
16106.4 19388.3 13494.3
15174.4 18834.8 12860.2
16314.7 19770 13307.2
15755.5 19297 12930.9
16248.9 19567 13228.7
17564.6 20036.2 13646.2
19867.1 21155.9 14691.3
20409.8 21865.6 15202.6
20576.7 22139 15716.7
19265.3 21829.2 15354.3
19062.7 22583 15852.5
17822.8 21992 15416.7
19074.6 22993.7 16098.6
18621.6 23108.9 16198.5
18860 23064.6 16422.2
19897.2 24016.9 17131.3
19825.6 24270.5 17614.7
20815.1 24349.6 18068.4
20898.6 23811 17479.7
22112.8 24916.3 18077
22396 25495.9 18643.3
23026.7 25134.1 18575.6
23245.5 23969.9 17597.2
23786.1 24148.2 17701.7
24004.9 23919.5 17502.6
23927.7 23095.8 16911.9
23760.3 23877.8 17189.9
25240.5 25128.2 18147.5
25446.5 24659.4 18085.9
25510.8 24928.9 18012.9
25176.2 23804.6 17285
25581.4 24022 17747.7
25755 24273.2 17523.4
27042 25545.6 18252.9
28054.3 25988.9 18566
29109.9 26510.7 18978.3
29804 27150.2 19304.7
31712.9 28255.5 20306.1
33448.2 29728.7 21475.8
33679.6 30279.3 21920.1
33882 31013.3 22311.6
32537.2 30215.3 21313.8
33245.8 31535 22209.2
31523.3 31456.5 22795.1
31622.5 31912.9 22770.5
32267.2 32997.5 23480.2
32597.8 33393 23958
34928.6 34412.8 25239.1
35027.7 34878.2 26233.8
33639.2 34354.9 25156.6
31457.2 32030.6 22959.4
33110.2 33877.9 24292.4
35424.5 35355 25241.8
35441 35457.8 24852.8
36928.7 37455.1 25876.8
12/31/96 36457.3 37496.6 26555.1
GT GLOBAL AMERICA
MID CAP GROWTH FUND RUSSELL 2000 INDEX S&P MID CAP 400 INDEX
CLASS B SHARES
4/1/93 10000 10000 10000
9402.52 9738.3 9725.1
10062.9 10181.9 10155.3
9817.61 10232.9 10218.3
9937.11 10213.2 10359.4
10478 10635 10806.7
10434 10747.2 11111.6
10956 10782.3 11397.8
10993.7 10543.8 11026.5
11607.8 11033.2 11403.3
11757.2 11289.9 11760.5
12076.4 11129.7 11717.8
12185.1 10614.1 11100.6
12463.6 10693.1 11166.5
12572.3 10591.8 11040.9
12524.7 10227 10668.3
12436.4 10573.3 10843.7
13197.1 11127.1 11447.7
13299 10919.4 11408.9
13326.2 11038.8 11362.8
13142.8 10540.9 10903.6
13355.9 10637.7 11195.5
13432.2 10748.4 11054
2/1/95 14096.2 11311.9 11514.2
14622.8 11508.1 11711.7
15164.7 11739.2 11971.8
15515.7 12022.4 12177.7
16500.3 12511.8 12809.4
17385.6 13164.2 13547.2
17500 13408 13827.5
17591.6 13733 14074.5
16889.5 13379.7 13445.1
17248.2 13964 14009.9
16350.5 13929.3 14379.5
16385.3 14131.4 14364
16716.2 14611.7 14811.7
16872.9 14786.8 15113.1
18065.7 15238.4 15921.2
18117.9 15444.5 16548.7
17386.6 15212.7 15869.2
16246 14183.5 14483.2
17090.5 15001.5 15324.1
18274.6 15655.6 15922.9
18274.6 15701.1 15677.5
19032.1 16585.5 16323.5
12/31/96 18474 16603.9 16751.4
The charts above show the performance of the GT Global America Mid Cap Growth
Fund, Class A and Class B shares, versus its various indices since June 9,
1987, and April 1, 1993, respectively. The chart assumes a hypothetical
$10,000 initial investment in Class A shares and reflects all Fund expenses
and the maximum 4.75% sales charge. For Class B shares, results reflect 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 $12,267 on December 31, 1996.
[GRAPH]
AVERAGE ANNUAL TOTAL RETURNS(1)
December 31, 1996 %
Share Class Without Sales Charge(2) With Sales Charge
1-Year 5-Year Life of Fund 1-Year 5-Year Life of Fund
Class A(3) 15.65 18.67 15.07 10.16 17.52 14.49
Class B(3) 14.82 N/A 18.29 9.82 N/A 17.78
Advisor Class(4) 15.72 N/A 12.18 N/A N/A N/A
HISTORICAL PERFORMANCE(2)
Annual Total Returns % (per calendar year)
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
Class A -14.40(3) 11.14 54.77 -7.40 19.29 31.74 8.34 15.69 23.23 15.65
Class B N/A N/A N/A N/A N/A N/A 16.08(3) 15.06 22.42 14.82
(1) Figures assume reinvestment of all dividends and capital gain
distributions at net asset value.
(2) Performance data do not reflect the maximum 4.75% sales charge or 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 (Class A shares) on June 9, 1987. Inception of
Class B shares was 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.
INVESTMENT OBJECTIVE AND CURRENT STRATEGY
The GT Global America Mid Cap Growth Fund seeks long-term growth of capital
by investing primarily in the equity securities of medium-sized companies in
the United States. During the reporting period (January 1 to December 31,
1996), the Fund normally initially focused on companies having a market
capitalization of $2 billion or less at the time of purchase. As of January
2, 1997, the Fund's market capitalization range changed. We now invest in
companies having a market capitalization of $1 billion to $5 billion at the
time of purchase.
. . . 11
<PAGE>
GT GLOBAL AMERICA MID CAP GROWTH FUND
ALLOCATION OF NET ASSETS %
[GRAPH]
December 31, 1996 December 31, 1995
Energy 24.7 N/A
Technology 19.1 31.6
Services 18.3 15.3
Consumer Non-Durables 14.2 3.7
Finance 8.9 13.3
Materials/Basic Industry 4.8 1.4
Capital Goods 3.0 N/A
Consumer Durables N/A 3.3
Health Care N/A 6.2
Short Term & Other 7.0 25.2
Allocations will change based on current market conditions. A complete
listing may be found in the Financial Statements section of this report.
KEY PORTFOLIO HOLDINGS 1 (AS OF DECEMBER 31, 1996) % OF NET ASSETS
PHILIP MORRIS COMPANIES INC. Has five principal operating 3.8
companies, which include Philip Morris USA, Philip Morris
International, Inc., Kraft Foods, Inc., Miller Brewing
Company and Philip Morris Capital Corporation. Philip
Morris Capital Corporation provides financial services.
BANKAMERICA CORPORATION Provides diverse financial products 3.5
and services to individuals, businesses, government
agencies and financial institutions throughout the world.
The company's banking subsidiaries operate over 2,000
offices throughout the western U.S., as well as corporate
banking and business credit offices in major U.S. cities
and 36 countries.
NIKE, INC. Designs, develops and markets a wide variety of 3.3
high-quality footwear and apparel products. Apparel
includes tennis, running, cycling and fitness wear as well
as athletic bags and accessory items. The company markets
its products through retail stores in the U.S. and
throughout the world.
MICROSOFT CORPORATION Develops, manufactures, licenses and 3.3
supports computer software products such as Microsoft
Windows and Microsoft Windows '95 operating systems. The
company also offers networking, database and spreadsheet
programs, books and other computer products.
INTEL CORPORATION Designs, manufactures and sells 3.0
microcomputer components and related products worldwide.
Products include microprocessors, embedded products, memory
chips, computer modules and boards, and network and
communications hardware.
COOPER CAMERON CORPORATION Manufactures, markets and 2.7
services production equipment for oil and gas producers and
transmitters and non-utility power generators. The company
manufactures pressure control equipment such as wellheads,
gate and ball valves, and undersea production systems.
ROWAN COMPANIES, INC. Performs contract drilling of oil and 2.7
gas wells and additionally provides contract and chartered
aviation services to related operations. The company
operates domestically offshore and onshore and in foreign
waters. Rowan owns 24 offshore rigs and 17 deep water
jack-ups. The company also manufactures heavy mining,
timber and construction equipment, and builds oil rigs.
LOEWEN GROUP, INC. Through its subsidiaries, owns and 2.7
operates 814 funeral homes and 179 cemeteries throughout
Canada and the U.S.
ROSS STORES Operates a chain of 313 off-price retail 2.6
apparel stores, which offer brand-name apparel, shoes,
accessories, fragrances, gift items and linens for the home.
TJX COMPANIES, INC. Operates chains of off-price apparel 2.5
stores and a mail order catalog business. The company's
chain of stores includes T.J. Maxx, Winners Apparel Ltd.,
HomeGoods and Marshalls. TJX also has a catalog, Chadwick's
of Boston.
(1) There is no assurance the Fund will continue to hold these or any other
securities mentioned in this report.
12 . . .
<PAGE>
GT GLOBAL AMERICA VALUE FUND
INTERVIEW WITH THE PORTFOLIO MANAGERS January, 1997
Q HOW DID THE FUND PERFORM?
A Total return for the 12 months ended December 31, 1996, was 15.12% for
Class A shares (9.65% including the maximum 4.75% sales charge); total return
for Class B shares was 14.35% (9.35% including the effect of the maximum 5%
contingent deferred sales charge). During the same period, its benchmark
index, the S&P 500,(1) returned 22.96%. Disappointments in the manufactured
housing market affected holdings in that sector, damaging performance for the
Fund in the second half of the year. Also, the Fund did not have much
exposure to semiconductors, which performed well over the last quarter of the
year, and this hurt performance somewhat.
Q HOW IS THE FUND POSITIONED AND WHY?
A As we enter 1997, our value portfolio is favoring stocks with low consensus
expectations, where we believe management can be expected to translate cash
flows or intrinsic business values into increased shareholder returns. We
find this tactical emphasis particularly appropriate in the current market
environment, as valuation of these stocks tends to be low. Additionally, we
believe that capturing the inefficiency in pricing related to generally
unanticipated events will be key to outperformance in the coming year. We
currently intend to maintain a portfolio that is well diversified with
conservative characteristics.
Our discipline of bottom-up fundamental analysis with a particular focus on
cash flows and asset values has led to many holdings in the basic industry
area. Our emphasis here is not on pure commodity or cyclical stories, but on
companies with proactive management looking to maximize shareholder value.
This perspective has led us to hold stocks in the chemical, auto and railroad
industries. We are underweighted in the energy sector because those stocks
appear to fully reflect current fundamentals.
Another major portion of our portfolio is invested in the financial services
area, namely banks and insurance companies. With banks, we expect continued
outperformance due to improving fundamentals as the result of industry
consolidation and deregulation. This has improved earnings stability and
strengthened cash flows. Elsewhere in the interest-sensitive sector, we have
cut back on our exposure to utilities (electric and telephone), as
deregulation continues to cloud the fundamental picture and prospective asset
values. However, we continue to favor real estate investment trusts (REITs)
due to their high yields and favorable fundamentals. We believe the real
estate industry is in the beginning phases of consolidation, which should
benefit many of the large, publicly traded companies in the sector.
Our exposure to health care is limited since those stocks were strong
performers in 1996 and we believe they fairly reflect their future prospects.
High valuations have also precluded us from building a large exposure in the
consumer sector, except for tobacco companies where valuations and cash flows
are particularly compelling.
ABOUT THE PORTFOLIO MANAGERS
TED UJAZDOWSKI -- Director of the Value Group since 1987 and Portfolio
Manager since 1983. Mr. Ujazdowski began his career in 1973 as a Credit
Analyst for the Federal Reserve Bank of New York. He joined Citicorp
Investment Management, Chancellor Capital Management's predecessor, in 1977.
Mr. Ujazdowski holds a B.S. from Fordham University and an M.B.A. from New
York University.
ADAM D. SCHEINER -- Portfolio Manager and Analyst since June 1993.
Previously, Mr. Scheiner was a Securities Analyst at Prudential Securities
from 1989 until 1993. Mr. Scheiner received an M.B.A. in finance, with
honors, from New York University in 1989.
(1) The S&P 500 Index is composed of the capitalization-weighted average
price of the 500 largest publicly traded U.S. companies. It includes the
effect of reinvested dividends and is measured in U.S. dollars.
Indices are unmanaged, not available for direct investment and do not incur
sales charges and professional management fees.
. . . 13
<PAGE>
GT GLOBAL AMERICA VALUE FUND
PERFORMANCE SUMMARY
INVESTMENT OBJECTIVE AND CURRENT STRATEGY
The Fund seeks long-term capital appreciation by investing primarily in
equity securities of medium to large capitalization issuers domiciled in the
United States. We define medium to large companies as having a market
capitalization greater than $500 million at the time of purchase. We look for
companies we believe are undervalued and therefore offer above-average
potential for capital appreciation.
[GRAPH]
GT GLOBAL AMERICA VALUE FUND
CLASS A SHARES CLASS B SHARES S&P 500 INDEX
10/18/95 9525 10000 10000
9541.67 10008.8 9904.95
10358.3 10866.1 10339.8
10633.3 11154.9 10538.9
10966.7 11487.3 10897.6
10941.7 11461.1 10998.7
11183.3 11706 11104.5
4/30/96 11658.3 12196 11268.2
12241.7 12808.4 11558.9
11983.3 12528.4 11603
11266.7 11776 11090.3
11483.3 11986 11324.3
12116.7 12642.2 11961.6
12233.3 12764.6 12291.6
12425 12957.1 13220.6
12/31/96 12241.3 12355 12958.7
The charts above show the performance of the GT Global America Value Fund,
Class A and Class B shares, versus the S&P 500 Index since the Fund's
inception. The chart assumes a hypothetical $10,000 initial investment in
Class A shares and reflects all Fund expenses and the maximum 4.75% sales
charge. For Class B shares, results reflect 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 October
18, 1995, would have been worth $12,913 on December 31, 1996.
AVERAGE ANNUAL TOTAL RETURNS(1)
December 31, 1996 %
[GRAPH]
Without Sales Charge(2) With Sales Charge
Share Class 1-Year Life of Fund 1-Year Life of Fund
Class A 15.12 23.20 9.65 19.83
Class B 14.35 22.43 9.35 20.28
Advisor Class(3) 15.58 23.68 N/A N/A
(1) Figures assume reinvestment of all dividends and capital gain
distributions at net asset value.
(2) Performance data do not reflect the maximum 4.75% sales charge or 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) 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. From time to
time, the Fund's investment advisor may waive some fees and/or reimburse some
expenses, without which performance would be lower. Waivers and
reimbursements are subject to change.
14 . . .
<PAGE>
GT GLOBAL AMERICA VALUE FUND
ALLOCATION OF NET ASSETS %
[GRAPH]
December 31, 1996 December 31, 1995
Finance 28.8 18.0
Services 22.6 3.7
Energy 18.5 3.8
Materials/Basic Industry 11.4 3.9
Capital Goods 7.7 3.6
Consumer Non-Durables 5.1 3.5
Consumer Durables 5.0 N/A
Technology 2.7 4.9
Health Care 2.5 19.8
Multi-Industry/Miscellaneous N/A 13.9
Short Term & Other (4.3) 24.9
Allocations will change based on current market conditions. A complete
listing may be found in the Financial Statements section of this report.
KEY PORTFOLIO HOLDINGS(1) (AS OF DECEMBER 31, 1996) % OF NET ASSETS
TUESDAY MORNING CORPORATION Operates a chain of 271 3.4
deep-discount close-out gift stores in 32 states. The
stores sell merchandise such as dinnerware, housewares, bed
and bath accessories, luggage, toys and seasonal items.
PHILIP MORRIS COMPANIES, INC. Has five principal operating 3.4
companies, which include Philip Morris USA, Philip Morris
International, Inc., Kraft Foods, Inc., Miller Brewing
Company and Philip Morris Capital Corporation. Philip
Morris Capital Corporation provides financial services.
TRAVELERS GROUP, INC. Offers lending, deposits and 3.1
credit-related insurance to individuals as well as life,
accident, health, property and automobile insurance and
investment advice through its subsidiaries, which include
Smith Barney, Primerica Financial Services, Commercial
Credit and others.
AT&T CORPORATION Provides communication services and 3.0
products, such as network equipment and computer systems,
that service businesses, consumers, communication services
providers and government agencies.
WMX TECHNOLOGIES Provides comprehensive waste management 2.8
services to industrial and commercial customers in North
America, and abroad through subsidiaries.
HERCULES, INC. Manufactures specialty chemicals, aerospace 2.8
products, films and fibers. The company produces flavors,
fragrances, food gums, paper chemicals, resins, fatty
acids, rocket motors, electronic aerospace equipment,
polypropylene films, carbon fibers and printing plates.
3COM CORP. Designs, produces and markets a broad range of 2.7
ISO 9000-compliant global data networking solutions such as
routers, hubs, switches and adapters for Ethernet, Token
Ring, FDDI and ATM networks.
DAYTON-HUDSON CORP. A general merchandise retailer, 2.6
specializing in large-store formats, including discount
stores, moderate-priced promotional and traditional
department stores. The company's stores include
approximately 688 Target stores, 297 Mervyn's stores and 64
department stores.
FORD MOTOR COMPANY Manufactures and sells automobiles, 2.5
trucks and related parts and accessories globally. The
company also provides financial services through its
subsidiaries, Ford Credit, The Associates First Capital
Corp. and Hertz Corp.
BURLINGTON NORTHERN INC. Operates a railroad transportation 2.5
system throughout the U.S. and parts of Canada. The
company's customers encompass agriculture, industry, food
and consumer products, and automotive products.
(1) There is no assurance the Fund will continue to hold these or any other
securities mentioned in this report.
. . . 15
<PAGE>
CHANCELLOR LGT ASSET MANAGEMENT'S WORLDWIDE INVESTMENT OFFICES
[MAP]
San Francisco 1974 Toronto 1994 London 1969 Singapore 1990 Tokyo 1982
Sydney 1982 Hong Kong 1970 Frankfurt 1985 New York 1996
Chancellor LGT Asset Management is a member of the $80 billion Liechtenstein
Global Trust. Chancellor LGT Asset Management maintains fully staffed
investment offices in London, Frankfurt, Hong Kong, Tokyo, Singapore, Sydney,
Toronto, New York and San Francisco.
16 . . .
<PAGE>
GT GLOBAL AMERICA FUNDS
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of
GT Global Growth Series:
We have audited the accompanying statements of assets and liabilities of GT
Global America Mid Cap Growth Fund (previously GT Global America Growth Fund),
GT Global America Small Cap Growth Fund - Consolidated, and GT Global America
Value Fund - Consolidated, three of the funds organized as a series of GT Global
Growth Series, including the portfolios of investments, as of December 31, 1996,
the related statements of operations for the year then ended, the statements of
changes in net assets and the financial highlights for each of the periods
indicated herein. These financial statements and the financial highlights are
the responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and the financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 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 positions of
the GT Global America Mid Cap Growth Fund (previously GT Global America Growth
Fund), GT Global America Small Cap Growth Fund - Consolidated, and GT Global
America Value Fund - Consolidated, as of December 31, 1996, the results of their
operations for the year then ended, the changes in their net assets and the
financial highlights for each of the periods indicated herein, in conformity
with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
BOSTON, MASSACHUSETTS
FEBRUARY 14, 1997
F1
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND - CONSOLIDATED
PORTFOLIO OF INVESTMENTS
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS SHARES (NOTE 1) ASSETS
- ---------------------------------------------------------------------- ----------- ------------ -------------
<S> <C> <C> <C>
Services (31.0%)
Caribiner International, Inc.-/- ................................... 17,700 $ 889,425 4.5
CONSUMER SERVICES
Extended Stay America, Inc.-/- ..................................... 33,200 668,150 3.4
LEISURE & TOURISM
The Sports Authority, Inc.-/- ...................................... 29,250 636,188 3.2
RETAILERS-OTHER
Proffitt's, Inc.-/- ................................................ 14,456 533,065 2.7
RETAILERS-OTHER
Quality Dining, Inc.-/- ............................................ 28,400 507,650 2.6
RESTAURANTS
WinStar Communications, Inc.-/- .................................... 20,900 438,900 2.2
WIRELESS COMMUNICATIONS
Hughes Supply, Inc. ................................................ 9,800 422,625 2.2
CONSUMER SERVICES
Measurex Corp. ..................................................... 16,900 405,600 2.1
CONSUMER SERVICES
Harveys Casino Resorts ............................................. 23,000 388,125 2.0
LEISURE & TOURISM
Intercel, Inc.-/- .................................................. 25,000 306,250 1.6
WIRELESS COMMUNICATIONS
Stein Mart, Inc.-/- ................................................ 14,700 297,675 1.5
RETAILERS-OTHER
Rio Hotel and Casino, Inc.-/- ...................................... 11,700 171,113 0.9
LEISURE & TOURISM
Players International, Inc.-/- ..................................... 30,300 162,863 0.8
LEISURE & TOURISM
Lamar Advertising Co.-/- ........................................... 5,000 121,250 0.6
BUSINESS & PUBLIC SERVICES
Grey Advertising, Inc. ............................................. 300 75,000 0.4
BUSINESS & PUBLIC SERVICES
Marker International-/- ............................................ 10,000 53,750 0.3
WHOLESALE & INTERNATIONAL TRADE
------------
6,077,629
------------
Consumer Durables (15.3%)
Ethan Allen Interiors, Inc. ........................................ 25,100 966,345 4.9
HOUSING
Syratech Corp.-/- .................................................. 27,600 869,400 4.4
APPLIANCES & HOUSEHOLD
Champion Enterprises, Inc.-/- ...................................... 38,068 742,326 3.8
HOUSING
Southern Energy Homes, Inc.-/- ..................................... 20,100 231,150 1.2
HOUSING
REX Stores Corp.-/- ................................................ 24,700 200,688 1.0
CONSUMER ELECTRONICS
------------
3,009,909
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F2
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND - CONSOLIDATED
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS SHARES (NOTE 1) ASSETS
- ---------------------------------------------------------------------- ----------- ------------ -------------
<S> <C> <C> <C>
Finance (14.0%)
Sovereign Bancorp, Inc. ............................................ 47,500 $ 623,438 3.2
BANKS-REGIONAL
Storage USA, Inc. .................................................. 15,500 583,188 3.0
REAL ESTATE
Bradley Real Estate, Inc. .......................................... 22,800 410,400 2.1
REAL ESTATE INVESTMENT TRUST
Mid-America Apartment Communities, Inc. ............................ 9,800 282,975 1.4
REAL ESTATE
Toronto-Dominion Bank{\/} (.) ...................................... 9,219 235,085 1.2
BANKS-REGIONAL
AmVestors Financial Corp. .......................................... 15,900 234,525 1.2
INSURANCE-LIFE
Game Financial Corp.-/- ............................................ 26,900 201,750 1.0
CONSUMER FINANCE
Union Planters Corp. ............................................... 4,575 178,425 0.9
BANKS-REGIONAL
------------
2,749,786
------------
Capital Goods (13.3%)
Belden, Inc. ....................................................... 22,000 814,000 4.2
ELECTRICAL PLANT/EQUIPMENT
Tekelec-/- ......................................................... 40,000 630,000 3.2
TELECOM EQUIPMENT
Plasma & Materials Technologies, Inc.-/- ........................... 37,500 440,625 2.2
ELECTRICAL PLANT/EQUIPMENT
Belmont Homes, Inc.-/- ............................................. 42,600 410,025 2.1
CONSTRUCTION
American Buildings Co.-/- .......................................... 9,500 226,813 1.2
CONSTRUCTION
Cuno, Inc.-/- ...................................................... 5,500 81,813 0.4
ENVIRONMENTAL
------------
2,603,276
------------
Technology (5.5%)
Dallas Semiconductor Corp. ......................................... 24,300 558,900 2.8
SEMICONDUCTORS
Logicon, Inc. ...................................................... 14,300 521,950 2.7
SOFTWARE
------------
1,080,850
------------
Materials/Basic Industry (4.9%)
Falcon Building Products, Inc.-/- .................................. 32,700 482,325 2.5
BUILDING MATERIALS & COMPONENTS
Fibreboard Corp.-/- ................................................ 11,500 388,125 2.0
PAPER/PACKAGING
Commercial Intertech Corp. ......................................... 5,500 74,938 0.4
METALS - NON-FERROUS
------------
945,388
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F3
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND - CONSOLIDATED
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS SHARES (NOTE 1) ASSETS
- ---------------------------------------------------------------------- ----------- ------------ -------------
<S> <C> <C> <C>
Consumer Non-Durables (4.0%)
Coachmen Industries, Inc. .......................................... 27,300 $ 774,638 4.0
------------
RECREATION
Health Care (1.8%)
Cohr, Inc.-/- ...................................................... 12,800 345,600 1.8
MEDICAL TECHNOLOGY & SUPPLIES
------------ -----
TOTAL EQUITY INVESTMENTS (cost $18,365,112) .......................... 17,587,076 89.8
------------ -----
<CAPTION>
VALUE % OF NET
REPURCHASE AGREEMENT (NOTE 1) ASSETS
- ---------------------------------------------------------------------- ------------ -------------
<S> <C> <C> <C>
Dated December 31, 1996, with State Street Bank & Trust Co., due
January 2, 1997, for an effective yield of 6.25%, collateralized by
$1,570,000 U.S. Treasury Bonds, 8.125% due 8/15/19 (market value of
collateral is $1,883,365, including accrued interest). (cost
$1,841,320) ....................................................... 1,841,320 9.4
------------ -----
TOTAL INVESTMENTS (cost $20,206,432) * ............................... 19,428,396 99.2
Other Assets and Liabilities ......................................... 148,920 0.8
------------ -----
NET ASSETS ........................................................... $ 19,577,316 100.0
------------ -----
------------ -----
</TABLE>
- --------------
-/- Non-income producing security.
{\/} U.S. currency denominated.
(.) Country of origin for this security is Canada. All other securities
on this portfolio originate from the U.S.
* For Federal income tax purposes, cost is $20,242,867 and
appreciation (depreciation) is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $ 1,368,000
Unrealized depreciation: (2,182,471)
-------------
Net unrealized depreciation: $ (814,471)
-------------
-------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F4
<PAGE>
GT GLOBAL AMERICA MID CAP 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>
Energy (24.7%)
Cooper Cameron Corp.-/- ................................... US 243,800 $ 18,650,694 2.7
ENERGY EQUIPMENT & SERVICES
Rowan Cos., Inc.-/- ....................................... US 804,400 18,199,550 2.7
ENERGY EQUIPMENT & SERVICES
ENSCO International, Inc.-/- .............................. US 328,600 15,937,100 2.3
ENERGY EQUIPMENT & SERVICES
Global Marine, Inc.-/- .................................... US 742,500 15,314,063 2.3
ENERGY EQUIPMENT & SERVICES
Western Atlas, Inc.-/- .................................... US 208,500 14,777,438 2.2
ENERGY EQUIPMENT & SERVICES
Ente Nazionale Idrocarburi (ENI) S.p.A. - ADR{\/} ......... ITLY 279,600 14,434,350 2.1
OIL
Marine Drilling Co., Inc.-/- .............................. US 710,700 13,991,906 2.1
ENERGY EQUIPMENT & SERVICES
Seacor Holdings, Inc.-/- .................................. US 217,500 13,702,500 2.0
ENERGY EQUIPMENT & SERVICES
Benton Oil & Gas Co.-/- ................................... US 492,000 11,131,500 1.6
OIL
Triton Energy Ltd.-/- ..................................... US 212,500 10,306,250 1.5
OIL
Atwood Oceanics, Inc.-/- .................................. US 131,500 8,350,250 1.2
ENERGY EQUIPMENT & SERVICES
Reading & Bates Corp.-/- .................................. US 290,800 7,706,200 1.1
ENERGY EQUIPMENT & SERVICES
Chesapeake Energy Corp.-/- ................................ US 109,600 6,096,500 0.9
GAS PRODUCTION & DISTRIBUTION
------------
168,598,301
------------
Technology (19.1%)
Microsoft Corp.-/- ........................................ US 268,200 22,160,025 3.3
SOFTWARE
Intel Corp. ............................................... US 156,900 20,544,094 3.0
SEMICONDUCTORS
3Com Corp.-/- ............................................. US 226,400 16,612,100 2.4
NETWORKING
American Power Conversion Corp.-/- ........................ US 509,300 13,878,425 2.0
NETWORKING
DSP Communications, Inc.-/- ............................... US 568,500 11,014,688 1.6
TELECOM TECHNOLOGY
Dynatech Corp.-/- ......................................... US 247,300 10,943,025 1.6
INSTRUMENTATION & TEST
Comverse Technology, Inc.-/- .............................. US 271,100 10,250,969 1.5
COMPUTERS & PERIPHERALS
Cisco Systems, Inc.-/- .................................... US 143,300 9,117,463 1.3
NETWORKING
Cognos, Inc.-/- {\/} ...................................... CAN 321,700 9,047,813 1.3
SOFTWARE
Computer Products, Inc.-/- ................................ US 398,500 7,770,750 1.1
COMPUTERS & PERIPHERALS
------------
131,339,352
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F5
<PAGE>
GT GLOBAL AMERICA MID CAP 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 (18.3%)
Loewen Group, Inc.{\/} .................................... CAN 461,300 $ 18,048,363 2.7
CONSUMER SERVICES
Ross Stores, Inc. ......................................... US 347,200 17,360,000 2.6
RETAILERS-APPAREL
TJX Cos., Inc. ............................................ US 355,300 16,832,338 2.5
RETAILERS-APPAREL
Safeway, Inc.-/- .......................................... US 352,800 15,082,200 2.2
RETAILERS-FOOD
Tiffany & Co. ............................................. US 353,700 12,954,263 1.9
RETAILERS-OTHER
Paychex, Inc. ............................................. US 225,100 11,578,581 1.7
CONSUMER SERVICES
Outdoor Systems, Inc.-/- .................................. US 307,650 8,652,656 1.3
BUSINESS & PUBLIC SERVICES
USAir Group, Inc.-/- ...................................... US 343,300 8,024,638 1.2
TRANSPORTATION - AIRLINES
HFS, Inc.-/- .............................................. US 95,700 5,718,075 0.8
LEISURE & TOURISM
Universal Outdoor Holdings, Inc.-/- ....................... US 220,000 5,170,000 0.8
BUSINESS & PUBLIC SERVICES
Footstar, Inc.-/- ......................................... US 97,900 2,435,263 0.4
RETAILERS-APPAREL
Claire's Stores, Inc. ..................................... US 95,900 1,246,700 0.2
RETAILERS-APPAREL
------------
123,103,077
------------
Consumer Non-Durables (14.2%)
Philip Morris Cos., Inc. .................................. US 229,400 25,836,175 3.8
FOOD
Nike, Inc. "B" ............................................ US 377,900 22,579,525 3.3
TEXTILES & APPAREL
Liz Claiborne, Inc. ....................................... US 293,400 11,332,575 1.7
TEXTILES & APPAREL
Foodmaker, Inc.-/- ........................................ US 1,113,900 9,885,863 1.5
FOOD
Nautica Enterprises, Inc.-/- .............................. US 331,000 8,357,750 1.2
TEXTILES & APPAREL
Richfood Holdings, Inc. ................................... US 271,500 6,583,875 1.0
FOOD
Rexall Sundown, Inc.-/- ................................... US 240,800 6,546,750 1.0
PERSONAL CARE/COSMETICS
Tommy Hilfiger Corp.-/- ................................... US 93,400 4,483,200 0.7
TEXTILES & APPAREL
------------
95,605,713
------------
Finance (8.9%)
BankAmerica Corp. ......................................... US 235,200 23,461,200 3.5
BANKS-SUPER REGIONAL
Union Planters Corp. ...................................... US 394,365 15,380,235 2.3
BANKS-REGIONAL
</TABLE>
The accompanying notes are an integral part of the financial statements.
F6
<PAGE>
GT GLOBAL AMERICA MID CAP 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)
Citicorp .................................................. US 131,200 $ 13,513,600 2.0
BANKS-MONEY CENTER
Mark Twain Bancshares, Inc. ............................... US 154,600 7,536,750 1.1
BANKS-REGIONAL
------------
59,891,785
------------
Materials/Basic Industry (4.8%)
Cytec Industries, Inc.-/- ................................. US 390,700 15,872,188 2.3
CHEMICALS
Barrick Gold Corp. ........................................ CAN 377,000 10,807,223 1.6
GOLD
Oregon Metallurgical Corp.-/- ............................. US 190,900 6,156,525 0.9
METALS - NON-FERROUS
------------
32,835,936
------------
Capital Goods (3.0%)
Davox Corp.-/- ............................................ US 334,700 13,806,375 2.0
TELECOM EQUIPMENT
Pairgain Technologies, Inc.-/- ............................ US 231,000 7,031,063 1.0
TELECOM EQUIPMENT
------------
20,837,438
------------ -----
TOTAL EQUITY INVESTMENTS (cost $543,685,886) ................ 632,211,602 93.0
------------ -----
<CAPTION>
VALUE % OF NET
REPURCHASE AGREEMENT (NOTE 1) ASSETS
- ------------------------------------------------------------- ------------ -------------
<S> <C> <C> <C> <C>
Dated December 31, 1996, with State Street Bank & Trust
Co., due January 2, 1997, for an effective yield of 6.25%,
collateralized by $47,860,000 U.S. Treasury Notes, 6.125%
due 3/31/98 (market value of collateral is $48,870,709,
including accrued interest). (cost $47,911,316) .......... 47,911,316 7.0
------------ -----
TOTAL INVESTMENTS (cost $591,597,202) * .................... 680,122,918 100.0
Other Assets and Liabilities ................................ (119,840) (0.0)
------------ -----
NET ASSETS .................................................. $680,003,078 100.0
------------ -----
------------ -----
</TABLE>
- --------------
-/- Non-income producing security.
{\/} U.S. currency denominated.
* For Federal income tax purposes, cost is $594,949,965 and
appreciation (depreciation) is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $ 93,369,566
Unrealized depreciation: (8,196,613)
-------------
Net unrealized appreciation: $ 85,172,953
-------------
-------------
</TABLE>
Abbreviation:
ADR--American Depository Receipt
The accompanying notes are an integral part of the financial statements.
F7
<PAGE>
GT GLOBAL AMERICA VALUE FUND - CONSOLIDATED
PORTFOLIO OF INVESTMENTS
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS SHARES (NOTE 1) ASSETS
- ---------------------------------------------------------------------- ----------- ------------ -------------
<S> <C> <C> <C>
Finance (28.8%)
Travelers Group, Inc. .............................................. 5,600 $ 254,100 3.1
INSURANCE - MULTI-LINE
Allstate Corp. ..................................................... 3,575 206,903 2.5
INSURANCE - MULTI-LINE
Chase Manhattan Corp. .............................................. 2,275 203,044 2.5
BANKS-MONEY CENTER
BankAmerica Corp. .................................................. 1,675 167,081 2.0
BANKS-SUPER REGIONAL
First Union Corp. (N.C.) ........................................... 2,250 166,500 2.0
BANKS-SUPER REGIONAL
Student Loan Marketing Association ................................. 1,775 165,297 2.0
OTHER FINANCIAL
Norwest Corp. ...................................................... 3,725 162,038 2.0
OTHER FINANCIAL
NationsBank Corp. .................................................. 1,650 161,288 2.0
BANKS-SUPER REGIONAL
Aetna, Inc. ........................................................ 1,800 144,000 1.8
INSURANCE-LIFE
Exel Ltd. .......................................................... 3,400 128,775 1.6
INSURANCE - PROPERTY-CASUALTY
Simon DeBartolo Group, Inc. ........................................ 3,150 97,650 1.2
REAL ESTATE INVESTMENT TRUST
Bankers Trust New York Corp. ....................................... 975 84,094 1.0
BANKS-MONEY CENTER
Household International, Inc. ...................................... 900 83,025 1.0
OTHER FINANCIAL
Corestates Financial Corp. ......................................... 1,550 80,406 1.0
BANKS-SUPER REGIONAL
Starwood Lodging Trust ............................................. 1,350 74,419 0.9
REAL ESTATE INVESTMENT TRUST
Beacon Properties Corp. ............................................ 1,350 49,444 0.6
REAL ESTATE INVESTMENT TRUST
Highwoods Properties, Inc. ......................................... 1,425 48,094 0.6
REAL ESTATE INVESTMENT TRUST
Equity Residential Property Trust .................................. 1,075 44,344 0.5
REAL ESTATE INVESTMENT TRUST
Felcor Suite Hotels, Inc. .......................................... 1,225 43,334 0.5
REAL ESTATE
------------
2,363,836
------------
Services (22.6%)
Tuesday Morning Corp.-/- ........................................... 13,200 282,145 3.4
RETAILERS-OTHER
AT&T Corp. ......................................................... 5,650 245,775 3.0
TELEPHONE - LONG DISTANCE
Dayton Hudson Corp. ................................................ 5,450 213,913 2.6
RETAILERS-OTHER
Burlington Northern, Inc. .......................................... 2,400 207,300 2.5
TRANSPORTATION - ROAD & RAIL
</TABLE>
The accompanying notes are an integral part of the financial statements.
F8
<PAGE>
GT GLOBAL AMERICA VALUE FUND - CONSOLIDATED
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS SHARES (NOTE 1) ASSETS
- ---------------------------------------------------------------------- ----------- ------------ -------------
<S> <C> <C> <C>
Services (Continued)
Sears, Roebuck and Co. ............................................. 4,350 $ 200,644 2.4
RETAILERS-OTHER
GTE Corp. .......................................................... 3,825 174,038 2.1
TELEPHONE NETWORKS
Time Warner, Inc. .................................................. 4,225 158,438 1.9
BROADCASTING & PUBLISHING
Federated Department Stores, Inc.-/- ............................... 3,700 126,263 1.5
RETAILERS-APPAREL
Comcast Corp. "A" .................................................. 5,075 90,398 1.1
CABLE TELEVISION
The Limited, Inc. .................................................. 4,725 86,822 1.1
RETAILERS-APPAREL
Telefonica De Peru - ADR{\/} (.) ................................... 4,400 83,050 1.0
TELEPHONE NETWORKS
------------
1,868,786
------------
Energy (18.5%)
Tosco Corp. ........................................................ 2,400 189,900 2.3
GAS PRODUCTION & DISTRIBUTION
Amerada Hess Corp. ................................................. 2,925 169,284 2.1
OIL
Texaco, Inc. ....................................................... 1,725 169,266 2.1
OIL
CMS Energy Corp. ................................................... 3,950 132,819 1.6
ENERGY EQUIPMENT & SERVICES
Illinova Corp. ..................................................... 4,775 131,313 1.6
ENERGY EQUIPMENT & SERVICES
Occidental Petroleum Corp. ......................................... 5,350 125,056 1.5
OIL
Amoco Corp. ........................................................ 1,100 88,550 1.1
OIL
Edison International ............................................... 4,400 87,450 1.1
ELECTRICAL & GAS UTILITIES
Pinnacle West Capital Corp. ........................................ 2,725 86,519 1.1
ELECTRICAL & GAS UTILITIES
Ultramar Diamond Shamrock Corp. .................................... 2,725 86,178 1.0
OIL
Southern Co. ....................................................... 3,800 85,975 1.0
ELECTRICAL & GAS UTILITIES
Mobil Corp. ........................................................ 700 85,575 1.0
OIL
GPU, Inc. .......................................................... 2,525 84,903 1.0
ELECTRICAL & GAS UTILITIES
------------
1,522,788
------------
Materials/Basic Industry (11.4%)
Hercules, Inc. ..................................................... 5,275 228,144 2.8
CHEMICALS
Aluminum Company of America (ALCOA) ................................ 2,700 172,125 2.1
METALS - NON-FERROUS
</TABLE>
The accompanying notes are an integral part of the financial statements.
F9
<PAGE>
GT GLOBAL AMERICA VALUE FUND - CONSOLIDATED
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS SHARES (NOTE 1) ASSETS
- ---------------------------------------------------------------------- ----------- ------------ -------------
<S> <C> <C> <C>
Materials/Basic Industry (Continued)
W.R. Grace & Co. ................................................... 3,225 $ 166,894 2.0
CHEMICALS
Union Carbide Corporate Holdings Co. ............................... 3,725 152,259 1.9
CHEMICALS
Monsanto Co. ....................................................... 3,250 126,344 1.5
CHEMICALS
Champion International Corp. ....................................... 2,000 86,500 1.1
PAPER/PACKAGING
------------
932,266
------------
Capital Goods (7.7%)
WMX Technologies, Inc. ............................................. 7,100 231,638 2.8
ENVIRONMENTAL
Textron, Inc. ...................................................... 1,800 169,650 2.1
AEROSPACE/DEFENSE
PPG Industries, Inc. ............................................... 2,800 157,150 1.9
MACHINERY & ENGINEERING
AlliedSignal, Inc.-/- .............................................. 1,150 77,050 0.9
AEROSPACE/DEFENSE
------------
635,488
------------
Consumer Non-Durables (5.1%)
Philip Morris Cos., Inc. ........................................... 2,450 275,931 3.4
FOOD
RJR Nabisco Holdings Corp. ......................................... 2,675 90,950 1.1
TOBACCO
Fruit of the Loom, Inc.-/- ......................................... 1,200 45,450 0.6
TEXTILES & APPAREL
------------
412,331
------------
Consumer Durables (5.0%)
Ford Motor Co. ..................................................... 6,550 208,781 2.5
AUTOMOBILES
Chrysler Corp. ..................................................... 6,125 202,125 2.5
AUTOMOBILES
------------
410,906
------------
Technology (2.7%)
3Com Corp.-/- ...................................................... 3,000 220,125 2.7
------------
NETWORKING
Health Care (2.5%)
Schering-Plough Corp. .............................................. 1,800 116,550 1.4
PHARMACEUTICALS
Meditrust Corp. .................................................... 2,300 92,000 1.1
HEALTH CARE SERVICES
------------
208,550
------------ -----
TOTAL EQUITY INVESTMENTS (cost $8,590,364) ........................... 8,575,076 104.3
------------ -----
</TABLE>
The accompanying notes are an integral part of the financial statements.
F10
<PAGE>
GT GLOBAL AMERICA VALUE FUND - CONSOLIDATED
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
REPURCHASE AGREEMENT (NOTE 1) ASSETS
- ---------------------------------------------------------------------- ------------ -------------
<S> <C> <C> <C>
Dated December 31, 1996, with State Street Bank and Trust Company,
due January 2, 1997, for an effective yield of 6.25%,
collateralized by $285,000 U.S. Treasury Bonds, 8.125% due 8/15/19
(market value of collateral is $350,568, including accrued
interest). (cost $335,058) ........................................ $ 335,058 4.1
------------ -----
TOTAL INVESTMENTS (cost $8,925,422) * ............................... 8,910,134 108.4
Other Assets and Liabilities ......................................... (687,135) (8.4)
------------ -----
NET ASSETS ........................................................... $ 8,222,999 100.0
------------ -----
------------ -----
</TABLE>
- --------------
-/- Non-income producing security.
{\/} U.S. currency denominated.
(.) Country of origin for this security is Peru. All other securities
on this portfolio originate from the U.S.
* For Federal income tax purposes, cost is $8,932,288 and
appreciation (depreciation) is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $ 247,944
Unrealized depreciation: (270,098)
-------------
Net unrealized depreciation: $ (22,154)
-------------
-------------
</TABLE>
Abbreviations
ADR--American Depository Receipt
The accompanying notes are an integral part of the financial statements.
F11
<PAGE>
GT GLOBAL AMERICA FUNDS
STATEMENTS OF ASSETS
AND LIABILITIES
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GT GLOBAL
---------------------------------------------
AMERICA AMERICA
SMALL CAP MID CAP AMERICA
GROWTH GROWTH VALUE
FUND-CONSOLIDATED FUND FUND-CONSOLIDATED
-------------- ------------- --------------
<S> <C> <C> <C>
Assets:
Investments in securities, at value (cost $20,206,432; $591,597,202;
and $8,925,422, respectively) (Note 1)............................. $19,428,396 $680,122,918 $8,910,134
U.S. currency....................................................... 719 56 458
Dividends receivable................................................ 5,419 464,678 19,245
Receivable for Fund shares sold..................................... 243,542 9,198,772 55,384
Receivable for securities sold...................................... -- 1,474,451 375,200
Receivable from Chancellor LGT Asset Management, Inc. (Note 2)...... -- -- 164
Unamortized organizational costs (Note 1)........................... 67,160 -- 67,160
Miscellaneous receivable............................................ -- 101,169 --
Cash held as collateral for securities loaned (Note 1).............. 383,400 32,605,600 --
-------------- ------------- --------------
Total assets...................................................... 20,128,636 723,967,644 9,427,745
-------------- ------------- --------------
Liabilities:
Payable for custodian fees (Note 1)................................. 1,246 7,508 847
Payable for fund accounting fees (Note 2)........................... 1,316 13,643 655
Payable for Fund shares repurchased................................. -- 10,244,161 145,847
Payable for investment management and administration fees (Note
2)................................................................. 6,085 419,487 --
Payable for loan outstanding (Note 1)............................... -- -- 1,000,000
Payable for printing and postage expenses........................... 28,326 77,133 23,712
Payable for professional fees....................................... 17,368 32,291 14,390
Payable for registration and filing fees............................ 2,236 13,189 800
Payable for securities purchased.................................... 88,158 -- --
Payable for service and distribution expenses (Note 2).............. 11,436 387,262 5,367
Payable for transfer agent fees (Note 2)............................ 5,396 155,101 4,727
Payable for Trustees' fees and expenses (Note 2).................... 4,769 8,705 4,769
Other accrued expenses (Note 1)..................................... 1,484 486 3,532
Collateral for securities loaned (Note 1)........................... 383,400 32,605,600 --
-------------- ------------- --------------
Total liabilities................................................. 551,220 43,964,566 1,204,646
Minority interest (Notes 1 & 2)..................................... 100 -- 100
-------------- ------------- --------------
Net assets............................................................ $19,577,316 $680,003,078 $8,222,999
-------------- ------------- --------------
-------------- ------------- --------------
Class A:
Net asset value and redemption price per share
($8,448,005 DIVIDED BY 674,639; $343,426,924 DIVIDED BY 16,536,083;
and $2,528,653 DIVIDED BY 172,644 shares outstanding,
respectively)........................................................ $ 12.52 $ 20.77 $ 14.65
-------------- ------------- --------------
-------------- ------------- --------------
Maximum offering price per share (100/95.25 of $12.52; 100/95.25 of
$20.77; and 100/95.25 of $14.65, respectively) *..................... $ 13.14 $ 21.81 $ 15.38
-------------- ------------- --------------
-------------- ------------- --------------
Class B+
Net asset value and offering price per share
($10,694,097 DIVIDED BY 861,017; $334,589,970 DIVIDED BY 16,498,419;
and $5,503,054 DIVIDED BY 378,527 shares outstanding,
respectively)........................................................ $ 12.42 $ 20.28 $ 14.54
-------------- ------------- --------------
-------------- ------------- --------------
Advisor Class:
Net asset value, offering price per share, and redemption price per
share ($435,214 DIVIDED BY 34,597; $1,986,184 DIVIDED BY 95,684; and
$191,292 DIVIDED BY 12,994 shares outstanding, respectively)......... $ 12.58 $ 20.76 $ 14.72
-------------- ------------- --------------
-------------- ------------- --------------
Net assets consist of:
Paid in capital (Note 4)............................................ $20,517,740 $601,059,922 $7,555,852
Accumulated net realized gain (loss) on investments and foreign
currency transactions.............................................. (162,388) (9,582,560) 682,435
Net unrealized appreciation (depreciation) of investments........... (778,036) 88,525,716 (15,288)
-------------- ------------- --------------
Total -- representing net assets applicable to capital shares
outstanding.......................................................... $19,577,316 $680,003,078 $8,222,999
-------------- ------------- --------------
-------------- ------------- --------------
<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.
F12
<PAGE>
GT GLOBAL AMERICA FUNDS
STATEMENTS OF OPERATIONS
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GT GLOBAL
----------------------------------------------
AMERICA AMERICA
SMALL CAP MID CAP AMERICA
GROWTH GROWTH VALUE
FUND-CONSOLIDATED FUND FUND-CONSOLIDATED
-------------- ------------- ---------------
<S> <C> <C> <C>
Investment income: (Note 1)
Interest income..................................................... $ 139,343 $ 6,000,887 $ 38,541
Dividend income..................................................... 100,331 4,151,150 73,377
Other income........................................................ 13,476 68,462 --
-------------- ------------- ---------------
Total investment income........................................... 253,150 10,220,499 111,918
-------------- ------------- ---------------
Expenses:
Amortization of organization costs (Note 1)......................... 17,751 -- 17,751
Custodian fees (Note 1)............................................. 9,620 80,790 11,920
Fund accounting fees (Note 2)....................................... 3,900 173,767 1,472
Insurance expenses.................................................. -- 5,461 --
Investment management and administration fees (Note 2).............. 112,316 4,982,969 42,209
Printing and postage expenses....................................... 84,918 145,366 74,018
Professional fees................................................... 68,740 66,122 63,594
Registration and filing fees........................................ 46,078 76,240 47,078
Service and distribution expenses: (Note 2)
Class A........................................................... 25,545 1,251,494 6,742
Class B........................................................... 80,691 3,347,860 38,173
Transfer agent fees (Note 2)........................................ 65,971 1,802,660 26,438
Trustees' fees and expenses (Note 2)................................ 16,640 16,532 16,640
Other expenses (Note 1)............................................. 2,081 10,000 2,935
-------------- ------------- ---------------
Total expenses before reductions and reimbursement.................. 534,251 11,959,261 348,970
Expense reductions (Notes 1 & 6).................................. -- (371,416) --
Expenses reimbursed by Chancellor LGT Asset Management, Inc. (Note
2)............................................................... (170,585) -- (206,892)
-------------- ------------- ---------------
Total net expenses.................................................. 363,666 11,587,845 142,078
-------------- ------------- ---------------
Net investment loss................................................... (110,516) (1,367,346) (30,160)
-------------- ------------- ---------------
Net realized and unrealized gain on investments: (Note 1)
Net realized gain on investments.................................... 1,264,693 24,290,969 733,904
Net realized gain (loss) on foreign currency transactions........... (4) 48,400 --
Net change in unrealized appreciation (depreciation) of
investments........................................................ (782,829) 76,318,599 (69,965)
-------------- ------------- ---------------
Net realized and unrealized gain on investments....................... 481,860 100,657,968 663,939
-------------- ------------- ---------------
Net increase in net assets resulting from operations.................. $ 371,344 $99,290,622 $ 633,779
-------------- ------------- ---------------
-------------- ------------- ---------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F13
<PAGE>
GT GLOBAL AMERICA FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GT GLOBAL
----------------------------------------------------------------------------------
AMERICA SMALL CAP AMERICA VALUE
GROWTH FUND-CONSOLIDATED FUND-CONSOLIDATED
-------------------------- --------------------------
OCTOBER 18, OCTOBER 18,
1995 1995
(COMMENCEMENT AMERICA MID CAP (COMMENCEMENT
OF GROWTH FUND OF
YEAR ENDED OPERATIONS) -------------------------- YEAR ENDED OPERATIONS)
DECEMBER TO YEAR ENDED YEAR ENDED DECEMBER TO
31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 31, DECEMBER 31,
1996 1995 1996 1995 1996 1995
----------- ------------- ------------ ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Increase (Decrease) in net assets
Operations:
Net investment income (loss)........... $(110,516) $ 4,070 $ (1,367,346) $ 5,981,525 $ (30,160) $ 1,048
Net realized gain on investments and
foreign currency transactions......... 1,264,689 -- 24,339,369 93,317,375 733,904 --
Net change in unrealized appreciation
(depreciation) of investments......... (782,829) 4,793 76,318,599 (4,611,894) (69,965) 54,677
----------- ------------- ------------ ------------ ----------- -------------
Net increase in net assets resulting
from operations..................... 371,344 8,863 99,290,622 94,687,006 633,779 55,725
----------- ------------- ------------ ------------ ----------- -------------
Class A:
Distributions to shareholders: (Note 1)
From net investment income............. -- -- -- (3,774,599) -- --
From net realized gain on
investments........................... (564,752) -- (21,518,831) (46,598,539) (7,007) --
Class B:
Distributions to shareholders: (Note 1)
From net investment income............. -- -- -- (1,969,042) -- --
From net realized gain on
investments........................... (727,944) -- (20,232,121) (41,818,697) (14,950) --
Advisor Class:
Distributions to shareholders: (Note 1)
From net investment income............. -- -- -- (18,429) -- --
From net realized gain on
investments........................... (28,106) -- (167,680) (170,545) (443) --
----------- ------------- ------------ ------------ ----------- -------------
Total distributions.................. (1,320,802) -- (41,918,632) (94,349,851) (22,400) --
----------- ------------- ------------ ------------ ----------- -------------
Capital share transactions: (Note 4)
Increase from capital shares sold and
reinvested............................ 43,976,336 4,974,031 2,122,781,710 1,840,086,218 11,770,124 2,211,337
Decrease from capital shares
repurchased........................... (27,455,528) (1,076,928) (2,246,270,951) (1,371,300,487) (6,364,460) (161,106)
----------- ------------- ------------ ------------ ----------- -------------
Net increase (decrease) from capital
share transactions.................. 16,520,808 3,897,103 (123,489,241) 468,785,731 5,405,664 2,050,231
----------- ------------- ------------ ------------ ----------- -------------
Total increase (decrease) in net
assets.................................. 15,571,350 3,905,966 (66,117,251) 469,122,886 6,017,043 2,105,956
Net assets:
Beginning of period.................... 4,005,966 100,000 746,120,329 276,997,443 2,205,956 100,000
----------- ------------- ------------ ------------ ----------- -------------
End of period *........................ 1$9,577,316 $4,005,966 $680,003,078 $746,120,329 $8,222,999 $2,205,956
----------- ------------- ------------ ------------ ----------- -------------
----------- ------------- ------------ ------------ ----------- -------------
*Includes undistributed/accumulated net
investment
income (loss).......................... $ 0 $ 4,070 $ 0 $ 258,896 $ 0 $ 1,048
----------- ------------- ------------ ------------ ----------- -------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F14
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout the period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
CLASS A CLASS B
---------------------------- ----------------------------
OCTOBER 18, OCTOBER 18,
1995 1995
(COMMENCEMENT (COMMENCEMENT
YEAR OF OPERATIONS) YEAR OF OPERATIONS)
ENDED TO DECEMBER ENDED TO DECEMBER
DECEMBER 31, 31, DECEMBER 31, 31,
1996 (D) 1995 (D) 1996 (D) 1995 (D)
------------ -------------- ------------ --------------
<S> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 11.80 $ 11.43 $ 11.78 $ 11.43
------------ -------------- ------------ --------------
Income from investment operations:
Net investment income (loss).......... (0.05) ** 0.04* (0.14) ** 0.02*
Net realized and unrealized gain on
investments.......................... 1.69 0.33 1.70 0.33
------------ -------------- ------------ --------------
Net increase from investment
operations......................... 1.64 0.37 1.56 0.35
------------ -------------- ------------ --------------
Distributions to shareholders:
From net realized gain on
investments.......................... (0.92) -- (0.92) --
------------ -------------- ------------ --------------
Total distributions................. (0.92) -- (0.92) --
------------ -------------- ------------ --------------
Net asset value, end of period.......... $ 12.52 $ 11.80 $ 12.42 $ 11.78
------------ -------------- ------------ --------------
------------ -------------- ------------ --------------
Total investment return (c)............. 13.81 % 3.24 %(b) 13.14 % 3.06 %(b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 8,448 $ 1,931 $ 10,694 $ 2,024
Ratio of net investment income (loss) to
average net assets:
With expense reimbursement by
Chancellor LGT Asset Management, Inc.
(Note 2)............................. (0.38)% 1.68 %(a) (1.03)% 1.03 %(a)
Without expense reimbursement by
Chancellor LGT Asset Management,
Inc.................................. (1.47)% (20.52)%(a) (2.12)% (21.17)%(a)
Ratio of expenses to average net assets:
With expense reimbursement by
Chancellor LGT Asset Management, Inc.
(Note 2)............................. 2.00 % 2.00 %(a) 2.65 % 2.65 %(a)
Without expense reimbursement by
Chancellor LGT Asset Management,
Inc.................................. 3.09 % 24.20 %(a) 3.74 % 24.85 %(a)
Portfolio turnover rate+................ 150 % N/A 150 % N/A
Average commission rate per share paid
on portfolio transactions+............. $ 0.0489 N/A $ 0.0489 N/A
</TABLE>
- ----------------
(a) Annualized
(b) Not Annualized
(c) Total Investment Return does not include sales charges.
(d) Calculated based upon weighted average shares outstanding during the
period.
* Before reimbursement by Chancellor LGT Asset Management, Inc. the net
investment loss per share would have been $(0.47), $(0.49), and
$(0.46) for Class A, Class B, and Advisor Class, respectively, from
October 18, 1995 to December 31, 1995.
** Before reimbursement by Chancellor LGT Asset Management, Inc. the net
investment loss per share would have been $(0.19), $(0.28), and
$(0.14) for Class A, Class B, and Advisor Class, respectively, for the
year ended December 31, 1996.
+ Portfolio turnover rate and average commission rate paid on portfolio
transactions are calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
The accompanying notes are an integral part of the financial statements.
F15
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
FINANCIAL HIGHLIGHTS (cont'd)
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout the period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
ADVISOR CLASS
----------------------------
OCTOBER 18,
1995
(COMMENCEMENT
YEAR OF OPERATIONS)
ENDED TO DECEMBER
DECEMBER 31, 31,
1996 (D) 1995 (D)
------------ --------------
<S> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 11.81 $ 11.43
------------ --------------
Income from investment operations:
Net investment income (loss).......... --** 0.05*
Net realized and unrealized gain on
investments.......................... 1.69 0.33
------------ --------------
Net increase from investment
operations......................... 1.69 0.38
------------ --------------
Distributions to shareholders:
From net realized gain on
investments.......................... (0.92) --
------------ --------------
Total distributions................. (0.92) --
------------ --------------
Net asset value, end of period.......... $ 12.58 $ 11.81
------------ --------------
------------ --------------
Total investment return (c)............. 14.22 % 3.32 %(b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 435 $ 52
Ratio of net investment income (loss) to
average net assets:
With expense reimbursement by
Chancellor LGT Asset Management, Inc.
(Note 2)............................. (0.03)% 2.03 %(a)
Without expense reimbursement by
Chancellor LGT Asset Management,
Inc.................................. (1.12)% (20.17)%(a)
Ratio of expenses to average net assets:
With expense reimbursement by
Chancellor LGT Asset Management, Inc.
(Note 2)............................. 1.65 % 1.65 %(a)
Without expense reimbursement by
Chancellor LGT Asset Management,
Inc.................................. 2.74 % 23.85 %(a)
Portfolio turnover rate+................ 150 % N/A
Average commission rate per share paid
on portfolio transactions+............. $ 0.0489 N/A
</TABLE>
- ----------------
(a) Annualized
(b) Not Annualized
(c) Total Investment Return does not include sales charges.
(d) Calculated based upon weighted average shares outstanding during the
period.
* Before reimbursement by Chancellor LGT Asset Management, Inc. the net
investment loss per share would have been $(0.47), $(0.49), and
$(0.46) for Class A, Class B, and Advisor Class, respectively, from
October 18, 1995 to December 31, 1995.
** Before reimbursement by Chancellor LGT Asset Management, Inc. the net
investment loss per share would have been $(0.19), $(0.28), and
$(0.14) for Class A, Class B, and Advisor Class, respectively, for the
year ended December 31, 1996.
+ Portfolio turnover rate and average commission rate paid on portfolio
transactions are calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
The accompanying notes are an integral part of the financial statements.
F16
<PAGE>
GT GLOBAL AMERICA MID CAP 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 1995 1994 (D) 1993 1992
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 19.07 $ 17.69 $ 17.17 $ 17.12 $ 14.13
---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income (loss).......... 0.03 0.24 0.04 (0.21) (0.11)
Net realized and unrealized gain on
investments.......................... 2.96 3.93 2.55 1.56 4.54
---------- ---------- ---------- ---------- ----------
Net increase from investment
operations......................... 2.99 4.17 2.59 1.35 4.43
---------- ---------- ---------- ---------- ----------
Distributions to shareholders:
From net investment income............ -- (0.21) (0.02) -- --
From net realized gain on
investments.......................... (1.29) (2.58) (2.05) (1.30) (1.44)
---------- ---------- ---------- ---------- ----------
Total distributions................. (1.29) (2.79) (2.07) (1.30) (1.44)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period.......... $ 20.77 $ 19.07 $ 17.69 $ 17.17 $ 17.12
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Total investment return (c)............. 15.65% 23.23% 15.69% 8.3% 31.7%
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 343,427 $ 396,291 $ 196,937 $ 116,468 $ 166,712
Ratio of net investment income (loss) to
average net assets..................... 0.12% 1.24% 0.17% (0.7)% (1.1)%
Ratio of expenses to average net assets:
With expense reductions (Notes 1 &
6)................................... 1.36% 1.46% 1.58% 1.6% 1.8%
Without expense reductions............ 1.41% --%* --%* --%* --%*
Portfolio turnover rate++++............. 253% 71% 102% 92% 114%
Average commission rate per share paid
on portfolio transactions++++.......... $ 0.0536 N/A N/A N/A N/A
</TABLE>
- ----------------
(a) Annualized
(b) Not annualized
(c) Total investment return does not include sales charges.
(d) These selected per share data were calculated based upon average
shares outstanding during the year.
+ 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.
* Calculation of "Ratio of expenses to average net assets" was made
without considering the effect of expense reductions, if any.
The accompanying notes are an integral part of the financial statements.
F17
<PAGE>
GT GLOBAL AMERICA MID CAP 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 1995 1994 (D) 1993 1996 1995
---------- ---------- ---------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 18.77 $ 17.50 $ 17.09 $ 15.90 $ 19.05 $ 20.61
---------- ---------- ---------- ------------- ------------ -------------
Income from investment operations:
Net investment income (loss).......... (0.11) 0.10 (0.09) (0.29) 0.09 0.21
Net realized and unrealized gain on
investments.......................... 2.91 3.87 2.55 2.78 2.91 1.09
---------- ---------- ---------- ------------- ------------ -------------
Net increase from investment
operations......................... 2.80 3.97 2.46 2.49 3.00 1.30
---------- ---------- ---------- ------------- ------------ -------------
Distributions to shareholders:
From net investment income............ -- (0.12) -- -- -- (0.28)
From net realized gain on
investments.......................... (1.29) (2.58) (2.05) (1.30) (1.29) (2.58)
---------- ---------- ---------- ------------- ------------ -------------
Total distributions................. (1.29) (2.70) (2.05) (1.30) (1.29) (2.86)
---------- ---------- ---------- ------------- ------------ -------------
Net asset value, end of period.......... $ 20.28 $ 18.77 $ 17.50 $ 17.09 $ 20.76 $ 19.05
---------- ---------- ---------- ------------- ------------ -------------
---------- ---------- ---------- ------------- ------------ -------------
Total investment return (c)............. 14.82% 22.42% 15.06% 16.1%(b) 15.72 % 6.01%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 334,590 $ 348,435 $ 80,060 $ 1,982 $ 1,986 $ 1,394
Ratio of net investment income (loss) to
average net assets..................... (0.53)% 0.59% (0.48)% (1.3)%(a) 0.47 % 1.59%(a)
Ratio of expenses to average net assets:
With expense reductions (Notes 1 &
6)................................... 2.01% 2.11% 2.23% 2.2%(a) 1.01 % 1.11%(a)
Without expense reductions............ 2.06% --%* --%* --%(a) * 1.06 % --%* (a)
Portfolio turnover rate++++............. 253% 71% 102% 92% 253 % 71%
Average commission rate per share paid
on portfolio transactions++++.......... $ 0.0536 N/A N/A N/A $ 0.0536 N/A
</TABLE>
- ----------------
(a) Annualized
(b) Not annualized
(c) Total investment return does not include sales charges.
(d) These selected per share data were calculated based upon average
shares outstanding during the year.
+ 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.
* Calculation of "Ratio of expenses to average net assets" was made
without considering the effect of expense reductions, if any.
The accompanying notes are an integral part of the financial statements.
F18
<PAGE>
GT GLOBAL AMERICA VALUE FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout the period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
CLASS A CLASS B
---------------------------- ----------------------------
OCTOBER 18, OCTOBER 18,
1995 1995
(COMMENCEMENT (COMMENCEMENT
YEAR OF OPERATIONS) YEAR OF OPERATIONS)
ENDED TO DECEMBER ENDED TO DECEMBER
DECEMBER 31, 31, DECEMBER 31, 31,
1996 (D) 1995 (D) 1996 (D) 1995 (D)
------------ -------------- ------------ --------------
<S> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 12.76 $ 11.43 $ 12.75 $ 11.43
------------ -------------- ------------ --------------
Income from investment operations:
Net investment income (loss).......... (0.01) ** 0.03* (0.10) ** 0.01*
Net realized and unrealized gain on
investments.......................... 1.94 1.30 1.93 1.31
------------ -------------- ------------ --------------
Net increase from investment
operations......................... 1.93 1.33 1.83 1.32
------------ -------------- ------------ --------------
Distributions to shareholders:
From net realized gain on
investments.......................... (0.04) -- (0.04) --
------------ -------------- ------------ --------------
Total distributions................. (0.04) -- (0.04) --
------------ -------------- ------------ --------------
Net asset value, end of period.......... $ 14.65 $ 12.76 $ 14.54 $ 12.75
------------ -------------- ------------ --------------
------------ -------------- ------------ --------------
Total investment return (c)............. 15.12 % 11.64 %(b) 14.35 % 11.55 %(b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 2,529 $ 870 $ 5,503 $ 1,254
Ratio of net investment income (loss) to
average net assets:
With reimbursement by Chancellor LGT
Asset Management, Inc. (Note 2)...... (0.10)% 1.10 %(a) (0.75)% 0.45 %(a)
Without reimbursement by Chancellor
LGT Asset Management, Inc............ (3.61)% (47.44)%(a) (4.26)% (48.09)%(a)
Ratio of expenses to average net assets:
With reimbursement by Chancellor LGT
Asset Management, Inc. (Note 2)...... 2.00 % 2.00 %(a) 2.65 % 2.65 %(a)
Without reimbursement by Chancellor
LGT Asset Management, Inc............ 5.51 % 50.54 %(a) 6.16 % 51.19 %(a)
Portfolio turnover rate+................ 256 % N/A 256 % N/A
Average commission rate per share paid
on portfolio transactions+............. $ 0.0551 N/A $ 0.0551 N/A
</TABLE>
- ----------------
(a) Annualized
(b) Not Annualized
(c) Total investment return does not include sales charges.
(d) Calculated based upon weighted average shares outstanding during the
period.
* Before reimbursement by Chancellor LGT Asset Management, Inc, the net
investment loss per share would have been $(1.11), $(1.13), and
$(1.10) for Class A, Class B, and Advisor Class, respectively, from
October 18, 1995 to December 31, 1995.
** Before reimbursement by Chancellor LGT Asset Management, Inc. the net
investment loss per share would have been $(.50),$(.59), and $(.46)
for Class A, Class B, and Advisor Class, respectively, for the year
ended December 31, 1996.
+ Portfolio turnover rate and average commission rate paid on portfolio
transactions are calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
The accompanying notes are an integral part of the financial statements.
F19
<PAGE>
GT GLOBAL AMERICA VALUE FUND
FINANCIAL HIGHLIGHTS (cont'd)
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout the period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
ADVISOR CLASS
----------------------------
OCTOBER 18,
1995
(COMMENCEMENT
YEAR OF OPERATIONS)
ENDED TO DECEMBER
DECEMBER 31, 31,
1996 (D) 1995 (D)
------------ --------------
<S> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 12.77 $ 11.43
------------ --------------
Income from investment operations:
Net investment income (loss).......... 0.03** 0.04*
Net realized and unrealized gain on
investments.......................... 1.96 1.30
------------ --------------
Net increase from investment
operations......................... 1.99 1.34
------------ --------------
Distributions to shareholders:
From net realized gain on
investments.......................... (0.04) --
------------ --------------
Total distributions................. (0.04) --
------------ --------------
Net asset value, end of period.......... $ 14.72 $ 12.77
------------ --------------
------------ --------------
Total investment return (c)............. 15.58 % 11.72 %(b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 191 $ 81
Ratio of net investment income (loss) to
average net assets:
With reimbursement by Chancellor LGT
Asset Management, Inc. (Note 2)...... 0.25 % 1.45 %(a)
Without reimbursement by Chancellor
LGT Asset Management, Inc............ (3.26)% (47.09)%(a)
Ratio of expenses to average net assets:
With reimbursement by Chancellor LGT
Asset Management, Inc. (Note 2)...... 1.65 % 1.65 %(a)
Without reimbursement by Chancellor
LGT Asset Management, Inc............ 5.16 % 50.19 %(a)
Portfolio turnover rate+................ 256 % N/A
Average commission rate per share paid
on portfolio transactions+............. $ 0.0551 N/A
</TABLE>
- ----------------
(a) Annualized
(b) Not Annualized
(c) Total investment return does not include sales charges.
(d) Calculated based upon weighted average shares outstanding during the
period.
* Before reimbursement by Chancellor LGT Asset Management, Inc, the net
investment loss per share would have been $(1.11), $(1.13), and
$(1.10) for Class A, Class B, and Advisor Class, respectively, from
October 18, 1995 to December 31, 1995.
** Before reimbursement by Chancellor LGT Asset Management, Inc. the net
investment loss per share would have been $(.50),$(.59), and $(.46)
for Class A, Class B, and Advisor Class, respectively, for the year
ended December 31, 1996.
+ Portfolio turnover rate and average commission rate paid on portfolio
transactions are calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
The accompanying notes are an integral part of the financial statements.
F20
<PAGE>
GT GLOBAL AMERICA FUNDS
NOTES TO
FINANCIAL STATEMENTS
December 31, 1996
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
GT Global America Mid Cap Growth Fund (formerly named GT Global America Growth
Fund), GT Global America Small Cap Growth Fund, and GT Global America Value Fund
("Funds"), are separate series of GT Global Growth Series ("Company"). The
Company is organized as a Massachusetts business trust and is registered under
the Investment Company Act of 1940, as amended ("1940 Act"), as 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 GT Global America Small Cap Growth Fund and GT Global America Value Fund
invest substantially all of their investable assets in Small Cap Growth
Portfolio and Value Portfolio ("Portfolios"), respectively. Each of these
Portfolios is organized as a New York Trust and is registered under the 1940 Act
as a diversified, open-end management investment company.
The Portfolios have investment objectives, policies, and limitations
substantially identical to those of their corresponding Funds. Therefore, the
financial statements of the GT Global America Small Cap Growth Fund, the GT
Global America Value Fund, and their respective Portfolios have been presented
on a consolidated basis, and represent all activities of both the respective
Funds and Portfolios. Through December 31, 1996, all of the shares of beneficial
interest of each Portfolio were owned either by its respective fund or
Chancellor LGT Asset Management, Inc. (the "Manager"), which has a nominal
($100) investment in each Portfolio.
The Funds offer Class A, Class B, and Advisor Class shares, each of which has
equal rights as to assets and voting privileges. Class A and Class B each has
exclusive voting rights with respect to its distribution plan. Investment
income, realized and unrealized capital gains and losses, and the common
expenses of the Funds are allocated on a pro rata basis to each class based on
the relative net assets of each class to the total net assets of the Funds. Each
class of shares differs in its respective distribution expenses, and may differ
in its transfer agent, registration, and certain other class-specific fees and
expenses.
The following is a summary of significant accounting policies consistently
followed by the Funds and Portfolios in the preparation of the financial
statements. The policies are in conformity with generally accepted accounting
principles, and the financial statements may include certain estimates made by
management.
(A) PORTFOLIO VALUATION
The Funds calculate the net asset value of and complete orders to purchase,
exchange or repurchase Fund shares on each business day, with the exception of
those days on which the New York Stock Exchange is closed.
Equity securities are valued at the last sale price on the exchange on which
such securities are traded or on the principal over-the-counter market on which
such securities are traded, as of the close of business on the day the
securities are being valued or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined by the Manager to be the
primary market.
Fixed income investments are valued at the mean of representative quoted bid and
ask prices for such investments or, if such prices are not available, at prices
for investments of comparative maturity, quality and type; however, when 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 at amortized cost, adjusted for market fluctuation, if
any.
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Company's Board of Trustees.
(B) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by a Fund or Portfolio (the
phrase "Fund or Portfolio" hereinafter includes the GT Global America Mid Cap
Growth Fund and each of the two Portfolios), it is the Fund's or Portfolio's
policy to always receive, as collateral, United States government securities or
other high quality debt securities of which the value, including accrued
interest, is at least equal to the amount to be repaid to the Fund or Portfolio
under each agreement at its maturity.
(C) OPTION ACCOUNTING PRINCIPLES
When a Fund or Portfolio writes a call or put option, an amount equal to the
premium received is included in the Fund's or Portfolio's "Statement of Assets
and Liabilities" as an asset and an equivalent liability. The amount of the
liability is subsequently marked-to-market to reflect the current market value
of the option. The current market value of an option listed on a traded exchange
is valued at its last bid price, or, in the case of an over-the-counter option,
is valued at the average of the last bid prices obtained from brokers, unless a
quotation from only one broker is available, in which case only that broker's
price will be used. If an option expires on its stipulated expiration date or if
the Fund or Portfolio enters into a closing purchase transaction, a gain or loss
is realized without regard to any unrealized gain or loss on the underlying
security, and the liability related to such option is extinguished. If a written
call option is exercised, a gain or loss is realized from the sale of the
underlying security and the proceeds of the sale are increased by the premium
originally received. If a written put option is exercised, the cost of the
underlying security purchased would be decreased by the premium originally
received. The Fund or Portfolio can write options only on a covered basis,
which, for a call, requires that the Fund or Portfolio hold the underlying
security, and, for a put, requires the Fund or
F21
<PAGE>
GT GLOBAL AMERICA FUNDS
Portfolio 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 or
Portfolio may use options to manage its exposure to the stock market and to
fluctuations in interest rates.
The premium paid by the Fund or Portfolio for the purchase of a call or put
option is included in the Fund's or Portfolio's "Statement of Assets and
Liabilities" as an investment and subsequently "marked-to-market" to reflect the
current market value of the option. If an option which the Fund or Portfolio has
purchased expires on the stipulated expiration date, the Fund or Portfolio
realizes a loss in the amount of the cost of the option. If the Fund or
Portfolio enters into a closing sale transaction, the Fund or Portfolio realizes
a gain or loss, depending on whether proceeds from the closing sale transaction
are greater or less than the cost of the option. If the Fund or Portfolio
exercises a call option, the cost of the securities acquired by exercising the
call is increased by the premium paid to buy the call. If the Fund or Portfolio
exercises a put option, it realizes a gain or loss from the sale of the
underlying security, and the proceeds from such sale are decreased by the
premium originally paid.
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Fund or Portfolio may forego
the opportunity of profit if the market value of the underlying security or
index increases and the option is exercised. The risk in writing a put option is
that the Fund or Portfolio may incur a loss if the market value of the
underlying security or index decreases and the option is exercised. In addition,
there is the risk the Fund or Portfolio may not be able to enter into a closing
transaction because of an illiquid secondary market.
(D) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract the
Fund or Portfolio is required to pledge to the broker an amount of cash or
securities equal to the minimum "initial margin" requirements of the exchange on
which the contract is traded. Pursuant to the contract, the Fund or Portfolio
agrees to receive from or pay to the broker an amount of cash equal to the daily
fluctuation in value of the contract. Such receipts or payments are known as
"variation margin" and are recorded by the Fund or Portfolio as unrealized gains
or losses. When the contract is closed, the Fund or Portfolio records a realized
gain or loss equal to the difference between the value of the contract at the
time it was opened and the value at the time it was closed. The potential risk
to the Fund or Portfolio is that the change in value of the underlying
securities may not correlate to the change in value of the contracts. The Fund
or Portfolio may use futures contracts to manage its exposure to the stock
market and to fluctuations in interest rates.
(E) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out basis, unless otherwise specified. Dividends are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Where a high
level of uncertainty exists as to its collection, income is recorded net of all
withholding tax with any rebate recorded when received. The Fund or Portfolio
may trade securities on other than normal settlement terms. This may increase
the risk if the other party to the transaction fails to deliver and causes the
Fund or Portfolio to subsequently invest at less advantageous prices.
(F) PORTFOLIO SECURITIES LOANED
At December 31, 1996, stocks with an aggregate value listed below were on loan
to brokers. These loans were secured by cash collateral received by the fund or
portfolios:
<TABLE>
<CAPTION>
DECEMBER 31, 1996 YEAR ENDED
-------------------------------- DECEMBER 31, 1996
AGGREGATE VALUE CASH -----------------
GT GLOBAL ON LOAN COLLATERAL FEES EARNED
- ---------------------------------------- --------------- -------------- -----------------
<S> <C> <C> <C>
America Mid Cap Growth Fund............. $ 31,491,056 $ 32,605,600 $163,841
Small Cap Growth Portfolio.............. 380,738 383,400 61
</TABLE>
Cash collateral is received by the Fund or Portfolio against loaned securities
in the amount at least equal to 102% of the market value of the loaned
securities at the inception of each loan. This collateral must be maintained at
not less than 100% of the market value of the loaned securities during the
period of the loan. Security lending fees earned were used to reduce the Fund's
or Portfolio's custodian fees.
(G) DEFERRED ORGANIZATIONAL EXPENSES
Expenses incurred by the GT Global America Small Cap Growth Fund, the GT Global
America Value Fund, and their respective Portfolios in connection with their
organization, their initial registration with the Securities and Exchange
Commission and with various states and the initial public offering of their
shares aggregated $63,500 for each Fund and $25,000 for each Portfolio. These
expenses are being amortized on a straight-line basis over a five-year period.
(H) TAXES
It is the policy of the Funds and Portfolios to meet the requirements for
qualification as a "regulated investment company" under the Internal Revenue
Code of 1986, as amended ("Code"). It is also the intention of the Funds to make
distributions sufficient to avoid imposition of any excise tax under Section
4982 of the Code. Therefore, no provision has been made for Federal taxes on
income, capital gains, or unrealized appreciation of securities held, and excise
tax on income and capital gains.
F22
<PAGE>
GT GLOBAL AMERICA FUNDS
(I) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by each Fund on the ex-date. Income
and capital gain distributions are determined in accordance with Federal income
tax regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments of income and gains
on various investment securities held by the Fund or Portfolios and timing
differences.
(J) RESTRICTED SECURITIES
A Fund or Portfolio is permitted to invest in privately placed restricted
securities. These securities may be resold in transactions exempt from
registration or to the public if the securities are registered. Disposal of
these securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult.
(K) INDEXED SECURITIES
A Fund or Portfolio may invest in indexed securities whose value is linked
either directly or indirectly to changes in foreign currencies, interest rates,
equities, indices, or other reference instruments. Indexed securities may be
more volatile than the reference instrument itself, but any loss is limited to
the amount of the original investment.
(L) LINE OF CREDIT
Each of the Funds, 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. Each of
these three funds is limited to borrowing up to 33 1/3% of the value of each
Fund's total assets. On December 31, 1996, the GT Global America Value Fund
borrowed $1,000,000 at a money market rate.
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)
for the GT Global America Value Fund was $1,000,000 with a weighted average
interest rate of 6.43%. Interest incurred on this loan for the year ended
December 31, 1996, was $2,681, included in "Other Expenses" on the Statement of
Operations.
2. RELATED PARTIES
Chancellor LGT Asset Management, Inc. is the Funds' and Portfolios' 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 GT Global America Small Cap
Growth Fund and GT Global America Value Fund each pays the Manager
administration fees at the annualized rate of 0.25% of such Fund's average daily
net assets. Each Portfolio pays investment management and administration fees to
the Manager at the annualized rate of 0.475% on the first $500 million of
average daily net assets of the Portfolio; 0.45% on the next $500 million;
0.425% on the next $500 million; and 0.40% on amounts thereafter. GT Global
America Mid Cap Growth Fund pays investment management and administration fees
to the Manager at the annualized rate of 0.725% on the first $500 million of
average daily net assets on the Fund; 0.70% on the next $500 million; 0.675% on
the next $500 million and 0.65% on amounts thereafter. These fees are computed
daily and paid monthly, and are subject to reduction in any year to the extent
that the Fund's or Portfolio's expenses (exclusive of brokerage commissions,
taxes, interest, distribution-related expenses and extraordinary expenses)
exceed the most stringent limits prescribed by the laws or regulations of any
state in which the Fund's shares are offered for sale, based on the average
total net asset value of the Fund.
GT Global, Inc. ("GT Global"), an affiliate of the Manager, serves as the Funds'
distributor. The Funds offer Class A, Class B, and Advisor Class shares for
purchase.
Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Fund's current
prospectus. GT Global collects the sales charges imposed on sales of Class A
shares, and reallows a portion of such charges to dealers through which the
sales are made. For the year ended December 31, 1996, GT Global retained the
following sales charges: $90,365 for the GT Global America Mid Cap Growth Fund,
$9,945 for the GT Global America Small Cap Growth Fund, and $1,702 for the GT
Global America Value Fund. Purchases of Class A shares exceeding $500,000 may be
subject to a contingent deferred sales charge ("CDSC") upon redemption, in
accordance with the Fund's current prospectus. GT Global collected such CDSCs in
the amount of $39,930 for the year ended December 31, 1996 for the GT Global
America Mid Cap Growth Fund. GT Global also makes ongoing shareholder servicing
and trail commission payments to dealers whose clients hold Class A shares.
Class B shares are not subject to initial sales charges. When Class B shares are
sold, GT Global from its own resources pays commissions to dealers through which
the sales are made. Certain redemptions of Class B shares made within six years
of purchase are subject to CDSCs, in accordance with the Fund's current
prospectus. For the year ended December 31, 1996, GT Global collected such CDSCs
in the amount of: $1,901,165 for the GT Global America Mid Cap Growth Fund,
$28,162 for the GT Global America Small Cap Growth Fund, and $5,608 for the GT
Global America Value Fund. In addition, GT Global makes ongoing shareholder
servicing and trail commission payments to dealers whose clients hold Class B
shares.
Pursuant to Rule 12b-1 under the 1940 Act, the Company's Board of Trustees has
adopted separate distribution plans with respect to the Funds' Class A shares
("Class A Plan") and Class B shares ("Class B Plan"), pursuant to which a Fund
reimburses GT Global for a portion of its shareholder servicing and distribution
expenses. Under the Class A Plan, a Fund may pay GT Global a service fee at the
annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class A shares for GT Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay GT Global a distribution fee at
the annualized rate of up to 0.35% of the average daily net assets of the Fund's
Class A shares, less any amounts paid by the Fund as the aforementioned service
fee, for GT
F23
<PAGE>
GT GLOBAL AMERICA FUNDS
Global's expenditures incurred in providing services as distributor. All
expenses for which GT Global is reimbursed under the Class A Plan will have been
incurred within one year of such reimbursement.
Pursuant to the Funds' Class B Plan, a Fund may pay GT Global a service fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class B shares for GT Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay GT Global a distribution fee at
the annualized rate of up to 0.75% of the average daily net assets of the Fund's
Class B shares for GT Global's expenditures incurred in providing services as
distributor. Expenses incurred under the Class B Plan in excess of 1.00%
annually may be carried forward for reimbursement in subsequent years as long as
that Plan continues in effect.
The Manager and GT Global voluntarily have undertaken to limit each Fund's
expenses (exclusive of brokerage commissions, taxes, interest, and extraordinary
items) to the maximum annual level of 2.00%, 2.65%, and 1.65% of the average
daily net assets of the Fund's Class A, Class B, and Advisor Class shares,
respectively. If necessary, this limitation will be effected by waivers by 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 Funds. For performing shareholder
servicing, reporting, and general transfer agent services, GT Services receives
an annual maintenance fee of $17.50 per account, a new account fee of $4.00 per
account, a per transaction fee of $1.75 for all transactions other than
exchanges and a per exchange fee of $2.25. GT Services also is reimbursed by the
Funds for its out-of-pocket expenses for such items as postage, forms, telephone
charges, stationery and office supplies.
The Manager is the pricing and accounting agent for the Funds. The monthly fee
for these services to the Manager is a percentage, not to exceed 0.03% annually,
of a Fund's average daily net assets. The annual fee rate is derived by applying
0.03% to the first $5 billion of assets of all registered mutual funds advised
by the Manager and 0.02% to the assets in excess of $5 billion and allocating
the result according to a Fund's average daily net assets.
The Company pays each of its Trustees who is not an employee, officer or
director of the Manager, GT Global or GT Services $5,000 per year plus $300 for
each meeting of the board or any committee thereof attended by the Trustee. Each
Portfolio pays each of its Trustees who is not an employee, officer or director
of the Manager, GT Global or GT Services $500 per year plus $150 for each
meeting of the board or any committee thereof attended by the Trustees.
At December 31, 1996, all of the shares of beneficial interest of each Portfolio
were owned either by its Fund or the Manager.
3. PURCHASES AND SALES OF SECURITIES
For the year ended December 31, 1996, purchases of investment securities by the
GT Global America Mid Cap Growth Fund, Small Cap Growth Portfolio, and Value
Portfolio, other than U.S. government obligations and short-term investments,
aggregated $1,468,522,964, $33,591,427 and $19,537,714, respectively. Sales of
investment securities by the GT Global America Mid Cap Growth Fund, Small Cap
Growth Portfolio, and Value Portfolio, other than U.S. government obligations
and short-term investments, aggregated $1,493,844,266, $19,321,092 and
$13,037,066, respectively. There were no purchases or sales of U.S. government
obligations by a Fund or Portfolio during the year.
F24
<PAGE>
GT GLOBAL AMERICA FUNDS
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
Funds were as follows:
CAPITAL SHARE TRANSACTIONS
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
<TABLE>
<CAPTION>
OCTOBER 18, 1995
(COMMENCEMENT OF
YEAR ENDED OPERATIONS) TO
DECEMBER 31, 1996 DECEMBER 31, 1995
---------------------------- -----------------------------
CLASS A SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------- ------------ -------------- ------------ ---------------
<S> <C> <C> <C> <C>
Shares sold............................. 1,491,083 $ 20,216,595 189,034 $ 2,222,360
Shares issued in connection with
reinvestment of distributions......... 39,998 505,573 -- --
------------ -------------- ------------ ---------------
1,531,081 20,722,168 189,034 2,222,360
Shares repurchased...................... (1,019,989) (13,880,892) (28,403) (333,346)
------------ -------------- ------------ ---------------
Net increase............................ 511,092 $ 6,841,276 160,631 $ 1,889,014
------------ -------------- ------------ ---------------
------------ -------------- ------------ ---------------
<CAPTION>
OCTOBER 18, 1995
(COMMENCEMENT OF
YEAR ENDED OPERATIONS) TO
DECEMBER 31, 1996 DECEMBER 31, 1995
---------------------------- -----------------------------
CLASS B SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------- ------------ -------------- ------------ ---------------
<S> <C> <C> <C> <C>
Shares sold............................. 1,665,796 $ 22,115,741 232,055 $ 2,734,475
Shares issued in connection with
reinvestment of distributions......... 52,848 663,246 -- --
------------ -------------- ------------ ---------------
1,718,644 22,778,987 232,055 2,734,475
Shares repurchased...................... (1,029,367) (13,501,795) (63,231) (743,582)
------------ -------------- ------------ ---------------
Net increase............................ 689,277 $ 9,277,192 168,824 $ 1,990,893
------------ -------------- ------------ ---------------
------------ -------------- ------------ ---------------
<CAPTION>
OCTOBER 18, 1995
(COMMENCEMENT OF
YEAR ENDED OPERATIONS) TO
DECEMBER 31, 1996 DECEMBER 31, 1995
---------------------------- -----------------------------
ADVISOR CLASS SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------- ------------ -------------- ------------ ---------------
<S> <C> <C> <C> <C>
Shares sold............................. 33,521 $ 447,953 1,456 $ 17,196
Shares issued in connection with
reinvestment of distributions......... 2,144 27,228 -- --
------------ -------------- ------------ ---------------
35,665 475,181 1,456 17,196
Shares repurchased...................... (5,440) (72,841) -- --
------------ -------------- ------------ ---------------
Net increase............................ 30,225 $ 402,340 1,456 $ 17,196
------------ -------------- ------------ ---------------
------------ -------------- ------------ ---------------
</TABLE>
F25
<PAGE>
GT GLOBAL AMERICA FUNDS
GT GLOBAL AMERICA MID CAP GROWTH FUND
<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............................. 89,962,964 $1,853,673,285 64,255,259 $ 1,354,329,879
Shares issued in connection with
reinvestment of distributions......... 853,598 17,867,701 2,163,720 42,170,721
------------ -------------- ------------ ---------------
90,816,562 1,871,540,986 66,418,979 1,396,500,600
Shares repurchased...................... (95,061,922) (1,956,032,031) (56,768,364) (1,210,272,338)
------------ -------------- ------------ ---------------
Net increase (decrease)................. (4,245,360) $ (84,491,045) 9,650,615 $ 186,228,262
------------ -------------- ------------ ---------------
------------ -------------- ------------ ---------------
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1996 DECEMBER 31, 1995
---------------------------- -----------------------------
CLASS B SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------- ------------ -------------- ------------ ---------------
<S> <C> <C> <C> <C>
Shares sold............................. 11,161,651 $ 224,412,718 19,673,669 $ 406,685,987
Shares issued in connection with
reinvestment of distributions......... 803,575 16,429,676 1,832,696 35,169,188
------------ -------------- ------------ ---------------
11,965,226 240,842,394 21,506,365 441,855,175
Shares repurchased...................... (14,026,348) (280,392,879) (7,522,345) (160,828,667)
------------ -------------- ------------ ---------------
Net increase (decrease)................. (2,061,122) $ (39,550,485) 13,984,020 $ 281,026,508
------------ -------------- ------------ ---------------
------------ -------------- ------------ ---------------
<CAPTION>
JUNE 1, 1995
(COMMENCENMENT OF
YEAR ENDED SALE OF SHARES) TO
DECEMBER 31, 1996 DECEMBER 31, 1995
---------------------------- -----------------------------
ADVISOR CLASS SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------- ------------ -------------- ------------ ---------------
<S> <C> <C> <C> <C>
Shares sold............................. 485,169 $ 10,230,701 72,809 $ 1,541,469
Shares issued in connection with
reinvestment of distributions......... 8,013 167,629 9,711 188,974
------------ -------------- ------------ ---------------
493,182 10,398,330 82,520 1,730,443
Shares repurchased...................... (470,673) (9,846,041) (9,345) (199,482)
------------ -------------- ------------ ---------------
Net increase............................ 22,509 $ 552,289 73,175 $ 1,530,961
------------ -------------- ------------ ---------------
------------ -------------- ------------ ---------------
</TABLE>
F26
<PAGE>
GT GLOBAL AMERICA FUNDS
GT GLOBAL AMERICA VALUE FUND
<TABLE>
<CAPTION>
OCTOBER 18, 1995
(COMMENCEMENT OF
YEAR ENDED OPERATIONS) TO
DECEMBER 31, 1996 DECEMBER 31, 1995
---------------------------- -----------------------------
CLASS A SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------- ------------ -------------- ------------ ---------------
<S> <C> <C> <C> <C>
Shares sold............................. 392,444 $ 5,443,835 70,225 $ 874,678
Shares issued in connection with
reinvestment of distributions......... 365 5,408 -- --
------------ -------------- ------------ ---------------
392,809 5,449,243 70,225 874,678
Shares repurchased...................... (288,378) (3,812,666) (4,928) (61,818)
------------ -------------- ------------ ---------------
Net increase............................ 104,431 $ 1,636,577 65,297 $ 812,860
------------ -------------- ------------ ---------------
------------ -------------- ------------ ---------------
<CAPTION>
OCTOBER 18, 1995
(COMMENCEMENT OF
YEAR ENDED OPERATIONS) TO
DECEMBER 31, 1996 DECEMBER 31, 1995
---------------------------- -----------------------------
CLASS B SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------- ------------ -------------- ------------ ---------------
<S> <C> <C> <C> <C>
Shares sold............................. 445,266 $ 6,167,388 103,345 $ 1,292,349
Shares issued in connection with
reinvestment of distributions......... 918 13,509 -- --
------------ -------------- ------------ ---------------
446,184 6,180,897 103,345 1,292,349
Shares repurchased...................... (166,052) (2,502,350) (7,866) (99,288)
------------ -------------- ------------ ---------------
Net increase............................ 280,132 $ 3,678,547 95,479 $ 1,193,061
------------ -------------- ------------ ---------------
------------ -------------- ------------ ---------------
<CAPTION>
OCTOBER 18, 1995
(COMMENCEMENT OF
YEAR ENDED OPERATIONS) TO
DECEMBER 31, 1996 DECEMBER 31, 1995
---------------------------- -----------------------------
ADVISOR CLASS SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------- ------------ -------------- ------------ ---------------
<S> <C> <C> <C> <C>
Shares sold............................. 10,181 $ 139,541 3,461 $ 44,310
Shares issued in connection with
reinvestment of distributions......... 30 443 -- --
------------ -------------- ------------ ---------------
10,211 139,984 3,461 44,310
Shares repurchased...................... (3,594) (49,444) -- --
------------ -------------- ------------ ---------------
Net increase............................ 6,617 $ 90,540 3,461 $ 44,310
------------ -------------- ------------ ---------------
------------ -------------- ------------ ---------------
</TABLE>
5. HOLDINGS OF 5% VOTING SECURITIES OF PORTFOLIO COMPANIES
Investments of 5% or more of an issuer's outstanding voting securities by a Fund
or Portfolio are defined in the Investment Company Act of 1940, as amended, as
an "affiliated company". During the year ended December 31, 1996, transactions
with affiliated companies by the GT Global America Mid Cap Growth Fund were as
follows:
<TABLE>
<CAPTION>
NET
REALIZED
PURCHASES GAIN DIVIDEND
AFFILIATES COST SALES COST (LOSS) INCOME
- ---------------------------------------- ------------ ------------- ---------- ------------
<S> <C> <C> <C> <C>
Abaxis, Inc............................. -- $ 4,406,425 $ (233,474) --
Ann Taylor Stores, Inc.................. $ 667,826 27,428,533 1,773,714 --
Equity Inns, Inc........................ 8,589,208 21,730,721 774,204 $ 344,848
Haggar Corp............................. -- 13,475,105 (4,771,163) 58,740
Landmark Graphics Corp.................. 22,307,844 22,307,844 13,028,001 --
Michaels Stores, Inc.................... 1,253,238 31,700,975 (1,716,413) --
Varsity Spirit Corp..................... -- 3,384,724 1,747,526 13,686
Younkers, Inc........................... 4,702,055 14,761,596 7,926,666 --
</TABLE>
6. EXPENSE REDUCTIONS
The Manager has directed certain portfolio trades to brokers who paid a portion
of a Fund's or Portfolio's expenses. For the year ended December 31, 1996, the
expenses of GT Global America Mid Cap Growth Fund were reduced by $207,575 under
these arrangements.
- --------------
FEDERAL TAX INFORMATION (UNAUDITED):
Pursuant to Section 852 of the Internal Revenue Code, the GT Global America
Mid-Cap Growth Fund designates $30,037,928 as a capital gain dividend for the
fiscal year ended December 31, 1996.
Pursuant to Section 854 of the Internal Revenue Code, the Funds designate the
following percentage amounts of ordinary income dividends paid (including
short-term capital gain distributions, if any) by the Funds as income qualifying
for the dividends received deduction for corporations for the fiscal year ended
December 31, 1996:
<TABLE>
<CAPTION>
FUND
- ----------------------------------------
<S> <C>
GT Global America Small Cap Growth
Fund................................... 4%
GT Global America Mid-Cap Growth Fund... 23%
GT Global America Value Fund............ 100%
</TABLE>
F27
<PAGE>
GT GLOBAL AMERICA FUNDS
GT GLOBAL MUTUAL FUNDS
GT GLOBAL OFFERS A BROAD RANGE OF MUTUAL FUNDS TO COMPLEMENT MANY INVESTORS'
PORTFOLIOS. FOR MORE INFORMATION AND A PROSPECTUS ON ANY OF THE GT GLOBAL
MUTUAL FUNDS, PLEASE CONTACT YOUR FINANCIAL ADVISOR OR CALL GT GLOBAL
DIRECTLY AT 1-800-824-1580. THE PROSPECTUS CONTAINS MORE COMPLETE
INFORMATION, INCLUDING CHARGES, EXPENSES AND THE RISKS OF GLOBAL & EMERGING
MARKETS INVESTING. INVESTORS SHOULD READ THE PROSPECTUS CAREFULLY BEFORE
INVESTING.
GROWTH FUNDS
/ / GLOBALLY DIVERSIFIED FUNDS
GT GLOBAL WORLDWIDE GROWTH FUND
Invests around the world, including the U.S.
GT GLOBAL INTERNATIONAL GROWTH FUND
Provides portfolio diversity by investing outside
the U.S.
GT GLOBAL EMERGING MARKETS FUND
Gives access to the growth potential of developing economies
/ / GLOBAL THEME FUNDS
GT GLOBAL HEALTH CARE FUND
Invests in growing health care industries worldwide
GT GLOBAL TELECOMMUNICATIONS FUND
Invests in companies worldwide that develop, manufacture, or sell
telecommunications services or equipment
GT GLOBAL INFRASTRUCTURE FUND
Seeks companies that build, improve, or maintain a country's infrastructure
GT GLOBAL FINANCIAL SERVICES FUND
Focuses on the worldwide opportunities from the demand for financial services
and products
GT GLOBAL NATURAL RESOURCES FUND
Concentrates on companies that own, explore, or develop natural resources
GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
Invests in companies that manufacture, market, retail, or distribute consumer
products or services
/ / REGIONALLY DIVERSIFIED FUNDS
GT GLOBAL NEW PACIFIC GROWTH FUND
Offers access to the emerging and established markets of the Pacific Rim,
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 & INCOME FUND
GT GLOBAL GROWTH & INCOME FUND
Invests in blue-chip stocks and government bonds from around the world
INCOME FUNDS
GT GLOBAL GOVERNMENT INCOME FUND
Earns monthly income from global government securities
GT GLOBAL STRATEGIC INCOME FUND
Allocates its assets among debt securities from the U.S., developed foreign
countries and emerging markets
GT GLOBAL HIGH INCOME FUND
Invests in debt securities in emerging markets
MONEY MARKET FUND
GT GLOBAL DOLLAR FUND
Invests in high quality, U.S. dollar-denominated money market securities
worldwide for stability and preservation of capital
[LOGO]
THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENT PROSPECTUS.
