<PAGE>
GT GLOBAL
OVER 25 YEARS
OF INVESTING
WORLDWIDE
/ /
GT GLOBAL
NEW PACIFIC
GROWTH FUND
/ /
ANNUAL REPORT
DECEMBER 31, 1997
[LOGO]
<PAGE>
TABLE
OF CONTENTS
<TABLE>
<S> <C>
Message from the
Chairman............. 1
Report from the Fund
Managers and Key
Portfolio Holdings... 2
Report of Independent
Accountants.......... F1
Financial
Statements........... F2
Views of the Funds' management
described in this report are as
of the date written. Portfolio
holdings and allocations are as
of December 31, 1997, unless
otherwise noted. These views,
portfolio holdings and
allocations may have changed
subsequently.
</TABLE>
<PAGE>
Message from the Chairman
Dear Shareholder,
Nineteen ninety-seven has been a challenging and exciting year. The volatility
of the market--and the resulting record highs and lows--has made investing a
sometimes awe-inspiring endeavor for investors and investment professionals
alike.
Across the GT Global family, our Funds have remained true to their investment
goals and objectives regardless of world events. Whether it be the recent
turmoil in the Asian markets, the privatization and reform underway across
eastern Europe, deregulation occurring in Latin America or the ups and downs of
the U.S. market, our Funds have maintained their focus. In fact, we believe
these changes are yielding new investment opportunities in both established
economies and dynamic new markets around the world. Looking forward to 1998, our
commitment is to continue to monitor world markets and seek additional ways to
capitalize on events as they unfold for the benefit of our shareholders.
In an effort to provide our customers easier access to information about the GT
Global Funds, we launched our website, www.gtglobal.com, during the latter part
of 1997. We hope to continually enhance the information it contains, from our
worldwide economic outlook, to fund price and performance reporting, to the
Millennium Minute message of the day. Used in conjunction with annual and
semiannual reports and your quarterly statement on our Funds, we hope it helps
you monitor your investments and achieve your financial goals.
Be assured that we will continue to strive to offer you the quality investment
products you need to build a well-diversified portfolio. As always, we
appreciate your continued confidence in our Funds. Should you or your adviser
have any questions regarding GT Global Funds, please call us at 800-824-1580.
One of our representatives will be happy to assist you.
Sincerely,
/s/ William J. Guilfoyle
William J. Guilfoyle
Chairman of the Board and President
GT Global Mutual Funds
1
<PAGE>
[GRAPHIC]
INVESTMENT OBJECTIVE
The GT Global New Pacific Growth Fund seeks long-term growth of capital
primarily through a portfolio of investments in the equity markets of the Asian
Pacific Rim, excluding Japan.
Japan was eliminated from the Fund's Primary Investment Area on January 21,
1994.
GT GLOBAL NEW PACIFIC GROWTH FUND
PERFORMANCE SUMMARY
[GRAPH]
/ / GT GLOBAL NEW PACIFIC GROWTH FUND CLASS A
/ / MSCI Pacific ex-Japan Index
1/19/77 "$9,525" "$10,000"
"9,525" "9,994"
"9,630" "9,760"
"9,687" "9,958"
"9,630" "10,052"
"9,658" "10,220"
"9,944" "10,295"
"9,573" "9,879"
"9,782" "9,717"
"10,058" "9,602"
"10,363" "9,985"
"10,535" "9,897"
"10,706" "10,343"
"10,735" "10,055"
"11,087" "9,805"
"12,410" "10,533"
"12,247" "11,001"
"12,314" "11,465"
"13,895" "12,395"
"15,245" "13,114"
"15,776" "14,619"
"16,441" "14,340"
"17,049" "14,561"
"15,573" "12,369"
"16,190" "12,824"
"15,930" "13,735"
"15,429" "13,693"
"15,208" "13,922"
"14,194" "13,706"
"13,817" "14,198"
"13,763" "13,832"
"13,569" "14,578"
"13,914" "15,604"
"13,881" "17,216"
"12,425" "16,841"
"11,778" "17,261"
"12,641" "19,508"
"12,781" "22,324"
"11,994" "22,753"
"11,306" "18,862"
"12,087" "20,660"
"13,047" "22,880"
"13,940" "25,335"
"13,717" "26,369"
"14,387" "27,937"
"15,324" "28,480"
"15,994" "32,113"
"15,905" "31,374"
"17,143" "31,505"
"18,036" "30,842"
"17,646" "29,899"
"18,109" "30,525"
"19,026" "31,056"
"19,898" "32,411"
"20,838" "32,862"
"19,764" "29,609"
"19,294" "27,990"
"17,001" "23,883"
"17,650" "23,677"
"18,892" "27,091"
"18,903" "26,628"
"18,332" "25,058"
"16,767" "22,313"
"15,741" "20,937"
"17,335" "23,576"
"17,605" "24,167"
"16,207" "21,638"
"15,876" "20,322"
"15,104" "19,361"
"14,601" "18,867"
"14,442" "18,085"
"15,766" "17,834"
"16,967" "19,122"
"16,685" "21,059"
"17,114" "21,523"
"17,556" "20,935"
"18,090" "22,918"
"18,949" "22,680"
"19,443" "22,805"
"20,250" "24,147"
"20,602" "24,009"
"20,537" "23,116"
"20,654" "23,482"
"21,500" "24,606"
"23,283" "25,664"
"24,194" "27,047"
"24,363" "26,105"
"25,605" "26,258"
"24,940" "26,241"
"21,428" "23,046"
"20,683" "22,327"
"19,526" "22,034"
"21,787" "23,814"
"21,907" "23,800"
"22,559" "23,874"
"22,719" "24,329"
"22,586" "23,806"
"23,211" "25,585"
"22,359" "24,333"
"22,491" "24,634"
"22,603" "25,040"
"22,813" "25,917"
"22,379" "25,578"
"22,995" "28,221"
"22,925" "27,237"
"23,821" "28,075"
"25,122" "29,263"
"25,234" "28,210"
"24,689" "27,922"
"25,472" "29,489"
"27,110" "28,782"
"30,078" "29,707"
"31,898" "32,328"
"32,752" "32,655"
"35,553" "31,319"
"40,874" "29,529"
"44,458" "31,615"
"43,380" "33,557"
"38,283" "38,478"
"39,851" "38,624"
"41,952" "41,441"
"41,882" "42,639"
2/28/87 "43,576" "48,205"
"46,870" "49,784"
"48,192" "50,979"
"50,913" "54,583"
"50,676" "56,845"
"53,673" "62,936"
"54,935" "66,816"
"56,079" "69,436"
"42,690" "39,198"
"39,768" "40,871"
"44,356" "43,180"
"45,152" "42,763"
"46,314" "42,584"
"50,169" "47,744"
"52,799" "50,069"
"51,943" "53,623"
"52,249" "54,572"
"53,686" "56,785"
"51,331" "53,723"
"51,209" "52,817"
"52,677" "56,302"
"54,054" "56,075"
"54,649" "56,379"
"58,369" "62,282"
"59,995" "57,473"
"61,933" "58,460"
"64,153" "60,418"
"64,684" "57,695"
"63,434" "55,343"
"68,811" "60,330"
"71,218" "62,951"
"75,845" "64,710"
"73,094" "62,538"
"76,783" "62,611"
"80,947" "65,390"
"79,663" "64,990"
"78,058" "64,167"
"76,774" "63,341"
"73,950" "60,079"
"80,947" "65,777"
"82,744" "67,865"
"85,954" "71,505"
"77,288" "66,052"
"69,777" "60,014"
"74,848" "59,275"
"72,216" "58,752"
"72,075" "58,755"
"74,394" "62,285"
"80,872" "68,234"
"82,645" "69,913"
"83,122" "72,275"
"83,872" "72,539"
"82,099" "72,262"
"84,349" "76,475"
"80,122" "75,523"
"82,781" "76,311"
"84,827" "79,169"
"80,394" "78,406"
"81,494" "80,266"
"82,071" "82,100"
"81,422" "84,698"
"77,672" "84,110"
"79,114" "88,101"
"85,533" "94,085"
"82,793" "93,143"
"78,249" "90,792"
"75,509" "85,619"
"74,643" "84,236"
"76,662" "86,876"
"74,715" "85,201"
"75,009" "85,897"
"75,082" "86,538"
"78,574" "93,195"
"81,629" "94,782"
"88,104" "99,640"
"90,796" "103,455"
"88,032" "100,316"
"91,378" "103,860"
"95,598" "111,708"
"97,199" "113,866"
"100,909" "132,280"
"101,127" "128,331"
"120,468" "154,978"
"118,342" "150,724"
"113,328" "143,388"
"98,745" "128,164"
"100,719" "134,114"
"104,289" "138,544"
"99,352" "132,406"
"104,441" "139,383"
"112,037" "148,749"
"110,822" "144,844"
"111,050" "147,178"
"101,555" "135,384"
"96,698" "133,297"
"86,949" "121,795"
"91,424" "133,171"
"93,582" "134,577"
"94,780" "136,361"
"103,012" "145,618"
"101,413" "142,866"
"105,889" "148,766"
"102,292" "144,832"
"102,932" "146,694"
"100,854" "144,116"
"99,735" "145,398"
"103,900" "151,118"
"113,565" "161,163"
"111,482" "163,613"
"109,482" "165,746"
"110,649" "170,317"
"114,065" "168,612"
"111,649" "165,478"
"105,816" "157,182"
"110,565" "164,258"
"112,982" "168,499"
"115,648" "173,125"
"122,397" "182,409"
"124,725" "182,807"
"123,204" "180,657"
"125,771" "183,264"
"118,831" "174,802"
"110,370" "171,263"
"115,029" "181,958"
"117,881" "185,980"
"118,831" "185,528"
"102,195" "159,827"
"101,529" "165,318"
"74,626" "130,287"
"70,823" "126,213"
12/31/97 "69,542" "126,585"
The chart above shows the performance of GT Global New Pacific Growth Fund Class
A shares since the Fund's inception, versus the MSCI Pacific ex-Japan Index.
This represents a cumulative return of 595.42% and an average annual total
return of 9.70% for the Fund. The chart assumes a hypothetical $10,000 initial
investment in the Fund's Class A shares and reflects all Fund expenses and the
maximum 4.75% sales charge. A $10,000 investment in the Fund's Class B shares at
inception on April 1, 1993, would have been valued at $8,089 on December 31,
1997. This figure reflects all Fund expenses and the applicable contingent
deferred sales charge (5% in the first year, decreasing to 0% after six years),
assuming 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 $6,792
on December 31, 1997.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS%(1)
DECEMBER 31, 1997
SHARE CLASS WITHOUT SALES CHARGE(2) WITH SALES CHARGE
1-YEAR 5-YEAR 10-YEAR LOF 1-YEAR 5-YEAR 10-YEAR LOF
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A(3) -44.24 -1.50 4.60 9.96 -46.89 -2.46 4.09 9.70
CLASS B(3) -44.65 N/A N/A -4.09 -47.11 N/A N/A -4.37
ADVISOR CLASS(4) -44.26 N/A N/A -13.89 N/A N/A N/A N/A
</TABLE>
<TABLE>
<CAPTION>
HISTORICAL PERFORMANCE(2)
ANNUAL TOTAL RETURNS % (LAST 10 YEARS)
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A 23.20 48.12 -10.96 13.07 -7.96 60.61 -19.73 7.45 20.04 -44.24
CLASS B N/A N/A N/A N/A N/A 46.30(3) -20.30 6.54 19.28 -44.65
</TABLE>
(1) Figures assume reinvestment of all dividends and capital gains
distributions at net asset value.
(2) Performance data do not reflect the maximum 4.75% sales charge and the
contingent deferred sales charge for Class A and Class B shares,
respectively, which, if included, would have reduced performance quoted.
(3) The Fund began operations of Class A shares on January 19, 1977; Class B
shares commenced on April 1, 1993.
(4) The Fund began offering Advisor Class shares on June 1, 1995. Advisor
Class shares are not sold directly to the general public. They 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 Fund's prospectus for more complete information.
The above data represent past performance of the Fund's shares, which does not
guarantee future results. The investment return and principal value of an
investment in the Fund will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
2
<PAGE>
INTERVIEW WITH PORTFOLIO MANAGER
PETER EADON-CLARKE
Q HOW DID THE FUND PERFORM?
A The savage bear market that has devastated Southeast Asian markets since
early spring 1997 has been unequaled in the Fund's 20-year history. Indeed, as
asset prices and currencies collapsed, regional markets experienced severe
losses, some exceeding 70% in dollar terms.
In this trying environment, the Fund's Class A shares returned a disappointing -
44.24% (-46.89% including the maximum 4.75% sales charge) over the 12-month
period ended December 31, 1997. Total return for Class B shares for the same
period was -44.65% (-47.11% including the maximum 5% contingent deferred sales
charge). To put this in perspective, the Morgan Stanley Capital International
(MSCI) Pacific ex-Japan Index(5) returned -30.75% over the same period.
The Fund was quite heavily weighted in emerging mid cap stocks, especially in
Malaysia and the Philippines in late 1996. As economic conditions began to
deteriorate in Southeast Asia through the first half of 1997, the earnings
potential of many of these companies shrank dramatically. This happened for two
main reasons: (1) some of the large projects in which these companies were to
participate were postponed or canceled altogether; (2) the companies were also
unable to access the capital required to sustain their growth. PWE and Ekran(6)
in Malaysia were two notable examples. Unfortunately, we did not sell off our
holdings in these companies early enough to avoid negative effects as events
unfolded.
Market factors also contributed heavily to the Fund's performance. In the fourth
quarter of 1997, the Hong Kong market fell dramatically. The Fund has been
overweighted in Hong Kong for the last two years (which previously served very
well since the Hong Kong market had been an outperformer). In order
to defend the Hong Kong dollar peg, monetary authorities raised interest rates
substantially to protect the currency.
Meanwhile, Hong Kong property stocks underperformed as interest rates rose and
property prices started to decline, significantly impacting the share price of
another of our holdings, New World Development. As the market fell, many
red-chip stocks (Hong Kong-listed companies with considerable interests in
China) were substantially derated on the back of investors becoming increasingly
concerned about Chinese authorities' ability to stimulate economic growth.
China Resources is one of our red-chip holdings that underperformed
significantly. We continue to own these companies as we believe their long term
fundamentals remain compelling.
<TABLE>
<CAPTION>
GEOGRAPHIC ALLOCATION OF NET ASSETS %
1997 1996
DECEMBER 31 DECEMBER 31
<S> <C> <C>
Australia 21.8 7.3
Hong Kong 46.3 41.6
India 1.6 0.3
Malaysia 4.3 32.1
New Zealand 1.2 0.5
Philippines 1.9 9.7
Singapore 12.5 0.2
Korea N/A 0.3
Thailand N/A 0.8
Indonesia N/A 1.9
U.S. & Other 10.4 5.3
</TABLE>
Allocations will change based on current market conditions.
Q WHAT TRIGGERED THE DOWNTURN IN THESE MARKETS?
A Origins of today's Southeast Asian currency, banking and real estate crises
can be traced to monetary developments in the early 1990s. A natural starting
point for analysis is the super-low Federal Reserve Bank funding rate of 3%
during 1992-93. Because Asian currencies were generally tied to the U.S. dollar
by government-managed exchange rates, their interest rates also followed those
of the U.S.
CONTINUED P.4
(5) MSCI Pacific ex-Japan Index is an arithmetic average, weighted by market
value, of the performance of 213 securities listed on five major Pacific
Rim exchanges (Australia, Hong Kong, Malaysia, New Zealand and Singapore).
It includes the effect of reinvested dividends and is measured in U.S.
dollars.
(6) Shares in these companies were sold prior to December 31, 1997.
The index is unmanaged, not available for direct investment and does not include
the effects of sales charges and professional management fees.
3
<PAGE>
INTERVIEW WITH THE PORTFOLIO MANAGER - CONTINUED
With cheap funding in place, many Southeast Asian countries experienced money
and credit growth rates of 25%-30% a year (most of them produced real economic
growth of 6% to 8% per year), sometimes more during the period 1993-95. But too
much money pumped into the Asian tigers for too long inflated Asian stock and
property prices, and soaring domestic demand began showing up in worsening
current account (imports minus exports) deficits. Perhaps ignorantly, while
these economies were enjoying cyclical expansion, most investors and
policymakers expressed little concern. However, the devaluation of the Thai
baht in early July 1997 was a jolt that served as a rude wake-up call.
In Hong Kong, the authorities appear determined to maintain the dollar peg, a
strategy we very much support. In order to defend the existing currency regime,
interest rates had to be raised significantly and we expect real economic
adjustments will have to be made in the form of falling property prices, wage
deflation and slower economic growth.
Q AGAINST THIS VOLATILE ENVIRONMENT, WHAT CHANGES DID YOU IMPLEMENT IN THE
PORTFOLIO DURING THE COURSE OF THE YEAR?
A Concerns about political, economic and currency stability in Indonesia led
us to eliminate our holdings there, while also reducing our position in the
Philippines. Similarly, against a bleak corporate earnings outlook and very
serious banking crisis we turned very cautious on South Korea. We also continued
to avoid Thailand as we await structural problems to be addressed sufficiently.
In Malaysia, although we sharply reduced our position, we held a 4.3% weighting
at December 31, 1997, on the expectation of corporate restructuring.
In contrast, we increased our holdings in Singapore and, to a lesser degree, in
New Zealand and India. Singapore is home to a number of attractive banks and
electronic stocks, and we remain convinced that Singapore's contract
manufacturers should continue to gain global market share. As of December 31,
1997, our largest holding in Singapore was the Overseas-Chinese Banking Corp.,
representing 3.4% of the Fund's net assets. In New Zealand, we have been
looking for corporate profits to recover at a time when equity valuations are
low. We think the positive outlook for bonds in general could provide support to
the stock market.
In India, we continued to invest selectively on the back of political
uncertainty because we felt the overall economic environment was conducive to
favorable equity performance, with the potential for interest rates and
inflation to remain subdued. India is at a much earlier stage of development
than other regional markets, and we are optimistic about continued reform.
Q HOW DID AUSTRALASIAN MARKETS FARE?
A Despite our positive outlook, the second half of the year was disappointing
for investors in both Australia and New Zealand. The two stock markets fell by
15.25% and 18.15%, respectively, in U.S. dollar terms (based on MSCI country
indices). In the fourth quarter alone, foreign investors also had to bear the
effects of falls in both Australian and New Zealand dollars of around 10%
against the U.S. dollar.
During this time, two factors had additional impact on both countries. First,
many experts indicated prospects for economic and corporate earnings growth
would be constrained by the financial crises in Asia, the destination of over
half the exports from both Australia and New Zealand. This view, which
overlooked the importance of foodstuffs exported to Asia, was prevalent despite
growth in many sectors of the Australian economy remaining robust through the
third quarter.
Secondly, commodity prices had been weakening. For example, the outlook for base
metals has been clouded by developments in East Asia, while sales by central
banks (and falling inflation expectations) have caused the price of gold to
slide.
Q AFTER SUCH SEVERE DECLINES, WHAT ARE YOUR EXPECTATIONS FOR THE YEARS AHEAD?
A While we believe conditions are likely to remain volatile, we expect 1998
and 1999 to see good returns from selected companies with good fundamentals and
whose valuations have been pulled down in the overall market carnage. In
particular, we believe Asian exporters and companies with positive net cash flow
from non-tradable goods sectors, such as power utilities, and other recurrent
income streams may enjoy stronger share prices. We currently anticipate that
these types of companies will remain the focus of our stock selection.
Along these lines, we have identified key positive themes: companies in Hong
Kong and China benefiting from the
CONTINUED P.5
4
<PAGE>
INTERVIEW WITH THE PORTFOLIO MANAGER - CONTINUED
economic upswing in China; companies that survive and gain market share as a
result of the current Asian turmoil, particularly because many companies are
losing market share; and disinflationary growth in Australia and India.
Hong Kong/China remains an important area for the Fund. As of December 31, the
Fund has a 46% weighting in Hong Kong/China, with sector allocations
concentrated in property, conglomerates and banking. We find Hong Kong-listed
companies combine attractive valuations with access to new growth opportunities.
We continue to believe stabilization of regional currencies will lead to a lower
interest rate premium in Hong Kong and will benefit aspects of the economy such
as the property sector. Property prices in Hong Kong are already beginning to
show signs of stabilizing following a 35% to 40% fall from their peak, and
listed share prices have already discounted declines of 50% in underlying asset
values. However, while we currently anticipate our overall exposure to Hong
Kong will remain heavy, the focus will be on individual company merits not
macroeconomic factors.
Elsewhere in Asia, we have recently seen some signs of improvement. Korea
reached an agreement with international banks to roll over US$25 billion in
short-term debt and has seemingly persuaded its labor unions to accept
retrenchment. Thailand abolished its two-tier currency system, and Malaysia is
making strides toward corporate restructuring to capitalize its banking system.
Indonesia, on the other hand, remains an uncertainty as it reviews the
possibility of a currency board similar to the one governing the U.S./Hong Kong
dollar. Although we believe it could be very difficult to implement
successfully without a strong banking system supported by local confidence, we
will monitor this key area over the near term.
ABOUT THE PORTFOLIO MANAGER
PETER EADON-CLARKE - Portfolio Manager since 1997 and Chief Investment Officer
for the Pacific Rim (excluding Japan) since 1992. From 1984 to 1992, Mr.
Eadon-Clarke was an Associate Director at HSBC Asset Management in Hong Kong.
CHINA ECONOMIC GROWTH FORECASTED
TO REMAIN SOLID
[CHART]
Real GDP China U.S.
1996 9.7% 2.4%
1997 9.0% 3.8%
1998f 6.5% 2.5%
1999f 6.5% 3.0%
Source: GT Global, Inc., January 1998.
DESPITE THE RECENT ECONOMIC DOWNTURN IN ASIA, WE ARE FORECASTING ECONOMIC GROWTH
IN CHINA TO REMAIN HEALTHY.
5
<PAGE>
SECTOR ALLOCATION OF NET ASSETS %
DECEMBER 31, 1997
Services 26.5
Finance 22.1
Multi-Industry/Miscellaneous 10.7
Consumer Durables 10.0
Capital Goods 7.0
Material/Basic Industry 6.9
Energy 6.4
Short Term & Other 10.4
A complete listing of holdings and allocations may be found in the Financial
Statements section of this report.
% of
GT Global New Pacific Growth Fund Country Net Assets
KEY PORTFOLIO HOLDINGS(7)
HONG KONG TELECOMMUNICATIONS LTD. Principal activities Hong Kong 7.5
are providing telecommunications, computer, engineering
and other services. The company also sells and rents
telecommunications equipment.
HUTCHISON WHAMPOA An investment holding company, Hong Kong 4.9
Hutchison's diversified operations include property
investment and development, ports and related
services, retail and manufacturing, telecommunications
and finance.
HANG SENG BANK The bank offers commercial banking Hong Kong 4.8
and related financial services through its 145
branches in Hong Kong, the United States and China.
AUSTRALIA & NEW ZEALAND BANKING GROUP LTD. This is a Australia 4.7
general trading and savings bank offering hire
purchase and general finance, mortgage and installment
lending, leasing, investment and portfolio management.
The bank operates approximately 1,600 offices in 48
countries.
NEW WORLD DEVELOPMENT CO., LTD. An investment holding Hong Kong 3.6
company with subsidiaries involved in property
development and investment. New World also has hotel
operations, and participates in construction and civil
engineering activities, telecommunication services,
insurance, transportation and infrastructure
investment.
OVERSEAS-CHINESE BANKING CORP., LTD. Provides a wide Singapore 3.4
range of banking services. Its foreign locations
include branches and offices throughout Asia, the UK
and the U.S.
CHEUNG KONG INFRASTRUCTURE HOLDINGS This company has Hong Kong 3.3
interests in infrastructure and related businesses
in the Peoples Republic of China.
CHEUNG KONG (HOLDINGS) LTD. Through subsidiaries, Hong Kong 3.2
Cheung Kong is involved in property development and
investment, infrastructure and related businesses and
real estate management.
SUN HUNG KAI PROPERTIES LTD. This company's activities Hong Kong 3.2
include property development and investment, hotel
ownership, construction, finance, and telecommunications.
DEVELOPMENT BANK OF SINGAPORE Development Bank Singapore 3.1
provides a comprehensive range of financial services.
Its international network comprises 18 overseas branches
and offices, located in major financial centers of the
Asia-Pacific region and around the world.
(7) There is no assurance the Fund will continue to hold these or any other
securities mentioned in this report.
Source: Bloomberg, January 1998.
6
<PAGE>
GT GLOBAL
NEW PACIFIC
GROWTH FUND
FINANCIAL
STATEMENTS
<PAGE>
GT GLOBAL NEW PACIFIC GROWTH FUND
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of
GT Global Growth Series:
We have audited the accompanying statement of assets and liabilities of GT
Global New Pacific Growth Fund, a series of shares of beneficial interest of GT
Global Growth Series, including the schedule of portfolio investments, as of
December 31, 1997, the related statement of operations for the year then ended,
the statements of changes in net assets for each of the two years in the period
then ended, and the financial highlights for each of the five years in the
period then ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
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, 1997 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of GT
Global New Pacific Growth Fund as of December 31, 1997, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the five years in the period then ended, in conformity with generally accepted
accounting principles.
COOPERS & LYBRAND L.L.P.
BOSTON, MASSACHUSETTS
FEBRUARY 17, 1998
F1
<PAGE>
GT GLOBAL NEW PACIFIC GROWTH FUND
PORTFOLIO OF INVESTMENTS
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Services (26.5%)
Hong Kong Telecommunications Ltd. ......................... HK 7,039,964 $ 14,491,505 7.5
TELEPHONE NETWORKS
Brambles Industries Ltd. .................................. AUSL 250,000 4,959,606 2.6
BUSINESS & PUBLIC SERVICES
Woolworths Ltd. ........................................... AUSL 1,440,000 4,812,822 2.5
RETAILERS-OTHER
Telekom Malaysia Bhd. ..................................... MAL 1,500,000 4,440,154 2.3
TELEPHONE NETWORKS
China Telecom (Hong Kong) Ltd.-/- ......................... HK 2,358,000 4,047,416 2.1
WIRELESS COMMUNICATIONS
Singapore Press Holdings Ltd. - Foreign ................... SING 302,000 3,786,215 2.0
BROADCASTING & PUBLISHING
Qantas Airways Ltd. ....................................... AUSL 1,770,000 3,132,009 1.6
TRANSPORTATION - AIRLINES
Genting Bhd. .............................................. MAL 1,109,000 2,783,205 1.4
LEISURE & TOURISM
Telstra Corp. Ltd. ........................................ AUSL 1,293,300 2,730,010 1.4
TELEPHONE NETWORKS
Telecom Corporation of New Zealand Ltd. ................... NZ 484,000 2,345,288 1.2
TELEPHONE NETWORKS
Philippine Long Distance Telephone Co. .................... PHIL 85,290 1,876,380 1.0
TELEPHONE - LONG DISTANCE
Mahanagar Telephone Nigam Ltd. - GDR-/- {\/} .............. IND 112,850 1,750,304 0.9
TELECOM - OTHER
------------
51,154,914
------------
Finance (22.1%)
Hang Seng Bank ............................................ HK 957,800 9,239,924 4.8
BANKS-MONEY CENTER
Australia & New Zealand Banking Group Ltd. ................ AUSL 1,370,000 9,050,621 4.7
BANKS-REGIONAL
Overseas-Chinese Banking Corp., Ltd. - Foreign ............ SING 1,139,000 6,632,323 3.4
BANKS-REGIONAL
Development Bank of Singapore - Foreign ................... SING 712,000 6,091,979 3.1
BANKS-MONEY CENTER
HSBC Holdings PLC ......................................... HK 180,000 4,436,988 2.3
BANKS-MONEY CENTER
United Overseas Bank Ltd. - Foreign ....................... SING 773,000 4,294,444 2.2
BANKS-MONEY CENTER
City Developments Ltd. .................................... SING 376,000 1,742,602 0.9
REAL ESTATE
State Bank of India Ltd. - GDR{\/} ........................ IND 76,100 1,360,288 0.7
BANKS-REGIONAL
------------
42,849,169
------------
Multi-Industry/Miscellaneous (10.7%)
Hutchison Whampoa ......................................... HK 1,500,000 9,408,273 4.9
MULTI-INDUSTRY
Pacific Dunlop Ltd. ....................................... AUSL 1,900,000 4,023,063 2.1
MULTI-INDUSTRY
</TABLE>
The accompanying notes are an integral part of the financial statements.
F2
<PAGE>
GT GLOBAL NEW PACIFIC GROWTH FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Multi-Industry/Miscellaneous (Continued)
Citic Pacific Ltd. ........................................ HK 950,000 $ 3,776,215 2.0
CONGLOMERATE
China Resources Enterprise Ltd. ........................... HK 1,500,000 3,349,035 1.7
CONGLOMERATE
------------
20,556,586
------------
Consumer Durables (10.0%)
New World Development Co., Ltd. ........................... HK 2,000,000 6,917,468 3.6
HOUSING
Cheung Kong (Holdings) Ltd. ............................... HK 942,000 6,169,775 3.2
HOUSING
Sun Hung Kai Properties Ltd. .............................. HK 880,000 6,132,800 3.2
HOUSING
------------
19,220,043
------------
Capital Goods (7.0%)
Cheung Kong Infrastructure Holdings ....................... HK 2,285,000 6,458,218 3.3
CONSTRUCTION
New World Infrastructure Ltd.-/- .......................... HK 2,000,000 4,504,098 2.3
CONSTRUCTION
Venture Manufacturing Ltd. ................................ SING 640,000 1,787,285 0.9
MACHINERY & ENGINEERING
Harbin Power Equipment Co., Ltd. .......................... HK 7,384,000 895,781 0.5
ELECTRICAL PLANT/EQUIPMENT
------------
13,645,382
------------
Materials/Basic Industry (6.9%)
Leighton Holdings Ltd. .................................... AUSL 1,365,000 4,766,695 2.5
BUILDING MATERIALS & COMPONENTS
Broken Hill Proprietary Co., Ltd. ......................... AUSL 370,000 3,435,077 1.8
MISC. MATERIALS & COMMODITIES
Pasminco Ltd. ............................................. AUSL 2,500,000 2,866,636 1.5
METALS - NON-FERROUS
QNI Ltd. .................................................. AUSL 3,160,000 2,099,941 1.1
METALS - NON-FERROUS
------------
13,168,349
------------
Energy (6.4%)
China Light & Power Co., Ltd. ............................. HK 1,059,000 5,876,879 3.0
ELECTRICAL & GAS UTILITIES
Hong Kong Electric Holdings Ltd. .......................... HK 968,000 3,679,112 1.9
ELECTRICAL & GAS UTILITIES
Manila Electric Co. "B" ................................... PHIL 500,000 1,675,000 0.9
ELECTRICAL & GAS UTILITIES
YTL Power International Bhd.-/- ........................... MAL 1,395,000 1,073,629 0.6
ENERGY SOURCES
------------
12,304,620
------------ -----
TOTAL EQUITY INVESTMENTS (cost $192,261,568) ................ 172,899,063 89.6
------------ -----
</TABLE>
The accompanying notes are an integral part of the financial statements.
F3
<PAGE>
GT GLOBAL NEW PACIFIC GROWTH FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
REPURCHASE AGREEMENT (NOTE 1) ASSETS
- ------------------------------------------------------------- ------------ -------------
<S> <C> <C> <C> <C>
Dated December 31, 1997, with State Street Bank & Trust
Co., due January 2, 1998, for an effective yield of 5.80%,
collateralized by $43,535,000 U.S. Treasury Notes, 5.75%
due 12/31/98 (market value of collateral is $43,575,836,
including accrued interest). (cost $42,717,000) .......... $ 42,717,000 22.1
------------ -----
TOTAL INVESTMENTS (cost $234,978,568) * .................... 215,616,063 111.7
Other Assets and Liabilities ................................ (22,500,776) (11.7)
------------ -----
NET ASSETS .................................................. $193,115,287 100.0
------------ -----
------------ -----
</TABLE>
- --------------
-/- Non-income producing security.
{\/} U.S. currency denominated.
* For Federal income tax purposes, cost is $236,076,920 and
appreciation (depreciation) is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $ 6,360,873
Unrealized depreciation: (26,821,730)
-------------
Net unrealized depreciation: $ (20,460,857)
-------------
-------------
</TABLE>
Abbreviation:
GDR--Global Depositary Receipt
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at December 31, 1997, was concentrated in
the following countries:
<TABLE>
<CAPTION>
PERCENTAGE OF NET ASSETS {D}
------------------------------
SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE) EQUITY & OTHER TOTAL
- -------------------------------------- ------ ------------- -----
<S> <C> <C> <C>
Australia (AUSL/AUD) ................. 21.8 21.8
Hong Kong (HK/HKD) ................... 46.3 46.3
India (IND/INR) ...................... 1.6 1.6
Malaysia (MAL/MYR) ................... 4.3 4.3
New Zealand (NZ/NZD) ................. 1.2 1.2
Philippines (PHIL/PHP) ............... 1.9 1.9
Singapore (SING/SGD) ................. 12.5 12.5
United States & Other (US/USD) ....... 10.4 10.4
------ ----- -----
Total ............................... 89.6 10.4 100.0
------ ----- -----
------ ----- -----
</TABLE>
- --------------
{d} Percentages indicated are based on net assets of $193,115,287.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
DECEMBER 31, 1997
<TABLE>
<CAPTION>
MARKET VALUE
(U.S. CONTRACT DELIVERY UNREALIZED
CONTRACTS TO SELL: DOLLARS) PRICE DATE APPRECIATION
- ---------------------------------------- ------------ -------- -------- -------------
<S> <C> <C> <C> <C>
Australian Dollars...................... 20,137,999 1.44937 2/24/98 $ 1,160,974
Singapore Dollars....................... 9,970,754 1.67140 3/17/98 140,530
------------ -------------
Total Contracts to Sell (Receivable
amount $31,410,257).................. 30,108,753 1,301,504
------------ -------------
THE VALUE OF CONTRACTS TO SELL AS
PERCENTAGE OF NET ASSETS IS 15.59%
Total Open Forward Foreign Currency
Contracts............................ $ 1,301,504
-------------
-------------
</TABLE>
- ----------------
See Note 1 to the financial statements.
The accompanying notes are an integral part of the financial statements.
F4
<PAGE>
GT GLOBAL NEW PACIFIC GROWTH FUND
STATEMENT OF ASSETS
AND LIABILITIES
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Assets:
Investments in securities, at value (cost $192,261,568) (Note 1)............................ $172,899,063
Repurchase agreement, at value and cost..................................................... 42,717,000
U.S. currency.................................................................... $ 896
Foreign currencies (cost $732,774)............................................... 741,289 742,185
---------
Receivable for open forward foreign currency contracts...................................... 1,301,504
Dividends and dividend withholding tax reclaims receivable.................................. 583,258
Receivable for Fund shares sold............................................................. 540,345
Receivable for securities sold.............................................................. 153,396
Miscellaneous receivable.................................................................... 15,083
Interest receivable......................................................................... 6,882
-----------
Total assets.............................................................................. 218,958,716
-----------
Liabilities:
Payable for Fund shares repurchased......................................................... 24,103,460
Payable for securities purchased............................................................ 1,206,279
Payable for investment management and administration fees (Note 2).......................... 163,399
Payable for service and distribution expenses (Note 2)...................................... 89,450
Payable for printing and postage expenses................................................... 86,532
Payable for transfer agent fees (Note 2).................................................... 84,573
Payable for professional fees............................................................... 38,325
Payable for custodian fees.................................................................. 33,378
Payable for registration and filing fees.................................................... 21,314
Payable for fund accounting fees (Note 2)................................................... 4,340
Payable for Trustees' fees and expenses (Note 2)............................................ 3,557
Other accrued expenses...................................................................... 8,822
-----------
Total liabilities......................................................................... 25,843,429
-----------
Net assets.................................................................................... $193,115,287
-----------
-----------
Class A:
Net asset value and redemption price per share ($135,807,280 DIVIDED BY 20,968,516 shares
outstanding)................................................................................. $ 6.48
-----------
-----------
Maximum offering price per share (100/95.25 of $6.48) *....................................... $ 6.80
-----------
-----------
Class B:+
Net asset value and offering price per share ($55,819,596 DIVIDED BY 8,895,437 shares
outstanding)................................................................................. $ 6.28
-----------
-----------
Advisor Class:
Net asset value, offering price per share, and redemption price per share ($1,488,411 DIVIDED
BY 230,859 shares outstanding)............................................................... $ 6.45
-----------
-----------
Net assets consist of:
Paid in capital (Note 4).................................................................... $259,435,620
Accumulated net realized loss on investments and foreign currency transactions.............. (48,248,073)
Net unrealized appreciation on translation of assets and liabilities in foreign
currencies................................................................................. 1,290,245
Net unrealized depreciation of investments.................................................. (19,362,505)
-----------
Total -- representing net assets applicable to capital shares outstanding..................... $193,115,287
-----------
-----------
<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.
F5
<PAGE>
GT GLOBAL NEW PACIFIC GROWTH FUND
STATEMENT OF OPERATIONS
Year ended December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Investment income:
Dividend income (net of foreign withholding tax of $412,339) (Note 1).................... $ 7,263,612
Interest income.......................................................................... 674,416
------------
Total investment income................................................................ 7,938,028
------------
Expenses:
Investment management and administration fees (Note 2)................................... 3,736,264
Service and distribution expenses: (Note 2)
Class A.................................................................. $ 942,945
Class B.................................................................. 1,119,211 2,062,156
------------
Transfer agent fees (Note 2)............................................................. 1,240,570
Custodian fees........................................................................... 419,674
Registration and filing fees............................................................. 138,810
Printing and postage expenses............................................................ 103,925
Fund accounting fees (Note 2)............................................................ 99,321
Audit fees............................................................................... 58,095
Legal fees............................................................................... 35,175
Trustees' fees and expenses (Note 2)..................................................... 10,532
Other expenses (Note 1).................................................................. 213,092
------------
Total expenses before reductions....................................................... 8,117,614
------------
Expense reductions (Notes 1 & 5)..................................................... (1,043,893)
------------
Total net expenses..................................................................... 7,073,721
------------
Net investment income...................................................................... 864,307
------------
Net realized and unrealized loss on investments and foreign currencies: (Note
1)
Net realized loss on investments........................................... (48,105,392)
Net realized loss on foreign currency transactions......................... (548,158)
------------
Net realized loss during the year...................................................... (48,653,550)
Net change in unrealized appreciation on translation of assets and
liabilities in foreign currencies......................................... 1,286,651
Net change in unrealized appreciation of investments....................... (113,591,619)
------------
Net unrealized depreciation during the year............................................ (112,304,968)
------------
Net realized and unrealized loss on investments and foreign currencies..................... (160,958,518)
------------
Net decrease in net assets resulting from operations....................................... $(160,094,211)
------------
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F6
<PAGE>
GT GLOBAL NEW PACIFIC GROWTH FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1997 1996
------------- -------------
Decrease in net assets
Operations:
Net investment income (loss)............................................. $ 864,307 $ (26,838)
Net realized gain (loss) on investments and foreign currency
transactions............................................................ (48,653,550) 94,284,448
Net change in unrealized appreciation (depreciation) on translation of
assets and liabilities in foreign currencies............................ 1,286,651 (106)
Net change in unrealized appreciation (depreciation) of investments...... (113,591,619) 36,883,188
------------- -------------
Net increase (decrease) in net assets resulting from operations........ (160,094,211) 131,140,692
------------- -------------
Class A:
Distributions to shareholders: (Note 1)
From net investment income............................................... (427,042) --
From net realized gain on investments.................................... (15,152,919) (44,900,913)
Class B:
Distributions to shareholders: (Note 1)
From net investment income............................................... -- --
From net realized gain on investments.................................... (6,636,532) (18,754,735)
Advisor Class:
Distributions to shareholders: (Note 1)
From net investment income............................................... (13,447) --
From net realized gain on investments.................................... (179,887) (250,756)
------------- -------------
Total distributions.................................................... (22,409,827) (63,906,404)
------------- -------------
Capital share transactions: (Note 4)
Increase from capital shares sold and reinvested......................... 1,697,761,633 5,158,291,909
Decrease from capital shares repurchased................................. (1,836,766,167) (5,226,446,724)
------------- -------------
Net decrease from capital share transactions........................... (139,004,534) (68,154,815)
------------- -------------
Total decrease in net assets............................................... (321,508,572) (920,527)
Net assets:
Beginning of year........................................................ 514,623,859 515,544,386
------------- -------------
End of year *............................................................ $ 193,115,287 $ 514,623,859
------------- -------------
------------- -------------
* Includes undistributed net investment income of......................... $ -- $ --
------------- -------------
------------- -------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F7
<PAGE>
GT GLOBAL NEW PACIFIC 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+
----------------------------------------------------------
YEAR ENDED DECEMBER 31,
----------------------------------------------------------
1997 (D) 1996 (D) 1995 (D) 1994 1993
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 13.12 $ 12.47 $ 12.10 $ 15.86 $ 10.31
---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income (loss).......... 0.05 0.02 0.11 0.02 (0.03)
Net realized and unrealized gain
(loss) on investments................ (5.84) 2.44 0.79 (3.15) 6.23
---------- ---------- ---------- ---------- ----------
Net increase (decrease) from
investment operations.............. (5.79) 2.46 0.90 (3.13) 6.20
---------- ---------- ---------- ---------- ----------
Distributions to shareholders:
From net investment income............ (0.03) -- (0.10) (0.01) --
From net realized gain on
investments.......................... (0.82) (1.81) (0.43) (0.55) (0.65)
In excess of net realized gain on
investments.......................... -- -- -- (0.07) --
---------- ---------- ---------- ---------- ----------
Total distributions................. (0.85) (1.81) (0.53) (0.63) (0.65)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period.......... $ 6.48 $ 13.12 $ 12.47 $ 12.10 $ 15.86
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Total investment return (c)............. (44.24)% 20.04% 7.45% (19.73)% 60.61%
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 135,807 $ 361,244 $ 383,722 $ 404,680 $ 498,898
Ratio of net investment income (loss) to
average net assets:
With expense reductions (Notes 1 &
5)................................... 0.41% 0.17% 0.91% 0.11% (0.3)%
Without expense reductions............ 0.14% 0.04% 0.86% N/A N/A
Ratio of expenses to average net assets:
With expense reductions (Notes 1 &
5)................................... 1.66% 1.86% 1.89% 1.81% 1.9%
Without expense reductions............ 1.93% 1.99% 1.94% N/A N/A
Portfolio turnover rate++++............. 80% 93% 63% 87% 117%
Average commission rate per share paid
on portfolio transactions++++.......... $ 0.0066 $ 0.0032 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 period.
+ 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 and average commission rates are calculated on the
basis of the Fund as a whole without distinguishing between the
classes of shares issued.
N/A Not Applicable.
The accompanying notes are an integral part of the financial statements.
F8
<PAGE>
GT GLOBAL NEW PACIFIC 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>
CLASS B++
-------------------------------------------------------------
APRIL 1, 1993
YEAR ENDED DECEMBER 31, TO
---------------------------------------------- DECEMBER 31,
1997 (D) 1996 (D) 1995 (D) 1994 1993
---------- ---------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 12.80 $ 12.29 $ 11.96 $ 15.79 $ 11.27
---------- ---------- ---------- ---------- -------------
Income from investment operations:
Net investment income (loss).......... (0.03) (0.06) 0.03 (0.06) (0.10)
Net realized and unrealized gain
(loss) on investments................ (5.67) 2.38 0.75 (3.15) 5.27
---------- ---------- ---------- ---------- -------------
Net increase (decrease) from
investment operations.............. (5.70) 2.32 0.78 (3.21) 5.17
---------- ---------- ---------- ---------- -------------
Distributions to shareholders:
From net investment income............ -- -- (0.02) -- --
From net realized gain on
investments.......................... (0.82) (1.81) (0.43) (0.55) (0.65)
In excess of net realized gain on
investments.......................... -- -- -- (0.07) --
---------- ---------- ---------- ---------- -------------
Total distributions................. (0.82) (1.81) (0.45) (0.62) (0.65)
---------- ---------- ---------- ---------- -------------
Net asset value, end of period.......... $ 6.28 $ 12.80 $ 12.29 $ 11.96 $ 15.79
---------- ---------- ---------- ---------- -------------
---------- ---------- ---------- ---------- -------------
Total investment return (c)............. (44.65)% 19.28% 6.54% (20.30)% 46.30%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 55,820 $ 151,805 $ 130,887 $ 120,171 $ 72,122
Ratio of net investment income (loss) to
average net assets:
With expense reductions (Notes 1 &
5)................................... (0.24)% (0.48)% 0.26% (0.54)% (0.9)%(a)
Without expense reductions............ (0.51)% (0.61)% 0.21% N/A N/A
Ratio of expenses to average net assets:
With expense reductions (Notes 1 &
5)................................... 2.31% 2.51% 2.54% 2.46% 2.5%(a)
Without expense reductions............ 2.58% 2.64% 2.59% N/A N/A
Portfolio turnover rate++++............. 80% 93% 63% 87% 117%
Average commission rate per share paid
on portfolio transactions++++.......... $ 0.0066 $ 0.0032 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 period.
+ 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 and average commission rates are calculated on the
basis of the Fund as a whole without distinguishing between the
classes of shares issued.
N/A Not Applicable.
The accompanying notes are an integral part of the financial statements.
F9
<PAGE>
GT GLOBAL NEW PACIFIC 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+++
-------------------------------------
YEAR ENDED DECEMBER JUNE 1, 1995
31, TO
---------------------- DECEMBER 31,
1997 (D) 1996 (D) 1995 (D)
---------- ---------- -------------
<S> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 13.16 $ 12.45 $ 12.89
---------- ---------- -------------
Income from investment operations:
Net investment income (loss).......... 0.08 0.07 0.09
Net realized and unrealized gain
(loss) on investments................ (5.89) 2.45 0.05
---------- ---------- -------------
Net increase (decrease) from
investment operations.............. (5.81) 2.52 0.14
---------- ---------- -------------
Distributions to shareholders:
From net investment income............ (0.08) -- (0.15)
From net realized gain on
investments.......................... (0.82) (1.81) (0.43)
In excess of net realized gain on
investments.......................... -- -- --
---------- ---------- -------------
Total distributions................. (0.90) (1.81) (0.58)
---------- ---------- -------------
Net asset value, end of period.......... $ 6.45 $ 13.16 $ 12.45
---------- ---------- -------------
---------- ---------- -------------
Total investment return (c)............. (44.26)% 20.56% 1.07%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 1,488 $ 1,575 $ 935
Ratio of net investment income (loss) to
average net assets:
With expense reductions (Notes 1 &
5)................................... 0.76% 0.52% 1.26%
Without expense reductions............ 0.49% 0.39% 1.21%
Ratio of expenses to average net assets:
With expense reductions (Notes 1 &
5)................................... 1.31% 1.51% 1.54%(a)
Without expense reductions............ 1.58% 1.64% 1.59%(a)
Portfolio turnover rate++++............. 80% 93% 63%
Average commission rate per share paid
on portfolio transactions++++.......... $ 0.0066 $ 0.0032 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 period.
+ 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 and average commission rates are calculated on the
basis of the Fund as a whole without distinguishing between the
classes of shares issued.
N/A Not Applicable.
The accompanying notes are an integral part of the financial statements.
F10
<PAGE>
GT GLOBAL NEW PACIFIC GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
GT Global New Pacific Growth Fund ("Fund") is a separate series of GT Global
Growth Series ("Company"). The Company is organized as a Massachusetts business
trust and is registered under the Investment Company Act of 1940, as amended
("1940 Act"), as a diversified, open-end management investment company. The
Company has eight series of shares in operation, each series corresponding to a
distinct portfolio of investments.
The Fund offers Class A, Class B, and Advisor Class shares, each of which has
equal rights as to assets and voting privileges. Class A and Class B each has
exclusive voting rights with respect to its distribution plan. Investment
income, realized and unrealized capital gains and losses, and the common
expenses of the Fund are allocated on a pro rata basis to each class based on
the relative net assets of each class to the total net assets of the Fund. Each
class of shares differs in its respective distribution expenses, and may differ
in its transfer agent, registration, and certain other class-specific fees and
expenses.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates. The following is a summary of
significant
accounting policies in conformity with generally accepted accounting principles
consistently followed by the Funds in the preparation of the financial
statements.
(A) PORTFOLIO VALUATION
The Fund calculates the net asset value of and completes orders to purchase,
exchange or repurchase Fund shares on each business day, with the exception of
those days on which the New York Stock Exchange is closed.
Equity securities are valued at the last sale price on the exchange on which
such securities are traded or on the principal over-the-counter market, as of
the close of business on the day the securities are being valued, or, lacking
any sales, at the last available bid price. In cases where securities are traded
on more than one exchange, the securities are valued on the exchange determined
by Chancellor LGT Asset Management, Inc. (the "Manager") to be the primary
market.
Fixed income securities are valued at the mean of representative quoted bid and
ask prices for such investments or, if such prices are not available, at prices
for securities of comparative maturity, quality and type. However, when 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 foreign exchange
translation and market fluctuation, if any.
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Company's Board of Trustees.
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Company's Board of Trustees.
(B) FOREIGN CURRENCY TRANSLATION
The accounting records of the Fund are maintained in U.S. dollars. The market
values of foreign securities, currency holdings, other assets and liabilities
are recorded in the books and records of the Fund after translation to U.S.
dollars based on the exchange rates on that day. The cost of each security is
determined using historical exchange rates. Income and withholding taxes are
translated at prevailing exchange rates when earned or incurred.
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains and losses arise from sales and
maturities of short-term securities, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the differences between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains or losses arise from changes in the
value of assets and liabilities other than investments in securities at year
end, resulting from changes in exchange rates.
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Fund, it is the Fund's
policy to always receive, as collateral, U.S. government securities or other
high quality debt securities of which the value, including accrued interest, is
at least equal to the amount to be repaid to the Fund under each agreement at
its maturity.
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract fluctuates with changes in currency
exchange rates. The Forward Contract is marked-to-market daily and the change in
market value is recorded by the Fund as an unrealized gain or loss. When the
Forward Contract is closed, the Fund records a realized gain or loss equal to
the difference between the value at the time it was opened and the value at the
time it was closed. The Fund could be exposed to risk if a counterparty is
unable to meet the terms of a contract or if the value of the currency changes
unfavorably. The Fund may enter into Forward Contracts in connection with
planned purchases or sales of securities, or to hedge against adverse
fluctuations in exchange rates between currencies.
(E) OPTION ACCOUNTING PRINCIPLES
When the Fund writes a call or put option, an amount equal to the premium
received is included in the Fund's "Statement of Assets and
F11
<PAGE>
GT GLOBAL NEW PACIFIC GROWTH FUND
Liabilities" as an asset and an equivalent liability. The amount of the
liability is subsequently marked-to-market to reflect the current market value
of the option. The current market value of an option listed on a traded exchange
is valued at its last bid price, or, in the case of an over-the-counter option,
is valued at the average of the last bid prices obtained from brokers, unless a
quotation from only one broker is available, in which case only that broker's
price will be used. If an option expires on its stipulated expiration date or if
the Fund enters into a closing purchase transaction, a gain or loss is realized
without regard to any unrealized gain or loss on the underlying security, and
the liability related to such option in extinguished. If a written call option
is exercised, a gain or loss is realized from the sale of the underlying
security and the proceeds of the sale are increased by the premium originally
received. If a written put option is exercised, the cost of the underlying
security purchased would be decreased by the premium originally received. The
Fund can write options only on a covered basis, which, for a call, requires that
the Fund hold the underlying security, and, for a put, requires the Fund to set
aside cash, U.S.government securities or other liquid securities in an amount
not less than the exercise price or otherwise provide adequate cover at all
times while the put option is outstanding. The Fund may use options to manage
its exposure to the stock and bond markets and to fluctuations in currency
values or interest rates.
The premium paid by the Fund for the purchase of a call or put option is
included in the Fund's "Statement of Assets and Liabilities" as an investment
and subsequently "marked-to-market" to reflect the current market value of the
option. If an option which the Fund has purchased expires on the stipulated
expiration date, the Fund realizes a loss in the amount of the cost of the
option. If the Fund enters into a closing sale transaction, the Fund realizes a
gain or loss, depending on whether proceeds from the closing sale transaction
are greater or less than the cost of the option. If the Fund exercises a call
option, the cost of the securities acquired by exercising the call is increased
by the premium paid to buy the call. If the Fund exercises a put option, it
realizes a gain or loss from the sale of the underlying security, and the
proceeds from such sale are decreased by the premium originally paid.
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Fund may forego the
opportunity of profit if the market value of the underlying security or index
increases and the option is exercised. The risk in writing a put option is that
the Fund may incur a loss if the market value of the underlying security or
index decreases and the option is exercised. In addition, there is the risk the
Fund may not be able to enter into a closing transaction because of an illiquid
secondary market.
(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract the
Fund is required to pledge to the broker an amount of cash or securities equal
to the minimum "initial margin" requirements of the exchange on which the
contract is traded. Pursuant to the contract, the Fund agrees to receive from or
pay to the broker an amount of cash equal to the daily fluctuation in value of
the contract. Such receipts or payments are known as "variation margin" and are
recorded by the Fund as unrealized gains or losses. When the contract is closed,
the Fund records a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the value at the time it was
closed. The potential risk to the Fund is that the change in value of the
underlying securities may not correlate to the change in value of the contracts.
The Fund may use futures contracts to manage its exposure to the stock and bond
markets and to fluctuations in currency values or interest rates.
(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out basis, unless otherwise specified. Dividends are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Where a high
level of uncertainty exists as to its collection, income is recorded net of all
withholding tax with any rebate recorded when received. The Fund may trade
securities on other than normal settlement terms. This may increase the risk if
the other party to the transaction fails to deliver and causes the Fund to
subsequently invest at less advantageous prices.
(H) PORTFOLIO SECURITIES LOANED
At December 31, 1997, stocks with an aggregate value of approximately $9,252,981
were on loan to brokers. The loans were secured by cash collateral of
$9,953,563, received by the Fund. Cash collateral is received by the Fund
against loaned securities in an amount at least equal to 105% of the market
value of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 103% of the market value of the loaned
securities during the period of the loan. For the year ended December 31, 1997,
the Fund received securities lending fees of $756,559 which were used to reduce
custodian and administrative expenses.
(I) TAXES
It is the policy of the Fund to meet the requirements for qualification as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended ("Code"). It is also the intention of the Fund to make distributions
sufficient to avoid imposition of any excise tax under Section 4982 of the Code.
Therefore, no provision has been made for Federal taxes on income, capital
gains, or unrealized appreciation of securities held, or excise tax on income
and capital gains. The Fund currently has a capital loss carryforward of
$3,081,427 which expires in 2005.
(J) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by the Fund on the ex-date. Income
and capital gain distributions are determined in accordance with Federal income
tax regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments of income and gains
on various investment securities held by the Fund and timing differences.
(K) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investments of domestic origin. The Fund's investments in emerging market
countries may involve greater risks than investments in more developed markets,
and the prices of such investments may be volatile. These risks of investing in
foreign and emerging markets may include foreign currency exchange rate
fluctuations, perceived credit risk, adverse political and economic developments
and possible adverse foreign government intervention.
F12
<PAGE>
GT GLOBAL NEW PACIFIC GROWTH FUND
(L) RESTRICTED SECURITIES
The Fund is permitted to invest in privately placed restricted securities. These
securities may be resold in transactions exempt from registration or to the
public if the securities are registered. Disposal of these securities may
involve time-consuming negotiations and expense, and prompt sale at an
acceptable price may be difficult.
(M) INDEXED SECURITIES
The Fund may invest in indexed securities whose value is linked either directly
or indirectly to changes in foreign currencies, interest rates, equities,
indices, or other reference instruments. Indexed securities may be more volatile
than the reference instrument itself, but any loss is limited to the amount of
the original investment.
(N) LINE OF CREDIT
The Fund, along with certain other funds ("GT Funds") advised and/or
administered by the Manager, has a line of credit with BankBoston and State
Street Bank & Trust Company. The arrangements with the banks allow the Fund and
the GT Funds to borrow an aggregate maximum amount of $250,000,000. The Fund is
limited to borrowing up to 33 1/3% of the value of the Fund's total assets.
For the year ended December 31, 1997, the weighted average outstanding daily
balance of bank loans (based on the number of days the loans were outstanding)
was $8,681,157 with a weighted average interest rate of 6.32%. Interest expense
for the year ended December 31, 1997, was $193,664, and is included in "Other
expenses" on the Statement of Operations.
2. RELATED PARTIES
Chancellor LGT Asset Management, Inc is the Fund's investment manager and
administrator. The Fund pays investment management and administration fees at
the following annualized rates: 0.975% on the first $500 million of average
daily net assets on the Fund; 0.95% on the next $500 million; 0.925% on the next
$500 million and 0.90% on amounts thereafter. These fees are computed daily and
paid monthly, and are subject to reduction in any year to the extent that the
Fund's expenses (exclusive of brokerage commissions, taxes, interest,
distribution-related expenses and extraordinary expenses) exceed the most
stringent limits prescribed by the laws or regulations of any state in which the
Fund's shares are offered for sale, based on the average total net asset value
of the Fund.
GT Global, Inc. ("GT Global"), an affiliate of the Manager, serves as the Fund's
distributor. The Fund offers Class A, Class B, and Advisor Class shares for
purchase.
Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Fund's current
prospectus. GT Global collects the sales charges imposed on sales of Class A
shares, and reallows a portion of such charges to dealers through which the
sales are made. For the year ended December 31, 1997, GT Global retained $21,605
of such sales charges. Purchases of Class A shares exceeding $500,000 may be
subject to a contingent deferred sales charge ("CDSC") upon redemption, in
accordance with the Fund's current prospectus. GT Global collected CDSCs in the
amount of $42,069 for the year ended December 31, 1997. 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, 1997, GT Global collected CDSCs in
the amount of $894,766. In addition, GT Global makes ongoing shareholder
servicing and trail commission payments to dealers whose clients hold Class B
shares.
Pursuant to Rule 12b-1 under the 1940 Act, the Company's Board of Trustees has
adopted separate distribution plans with respect to the Fund's Class A shares
("Class A Plan") and Class B shares ("Class B Plan"), pursuant to which the Fund
reimburses GT Global for a portion of its shareholder servicing and distribution
expenses. Under the Class A Plan, the Fund may pay GT Global a service fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class A shares for its expenditures incurred in servicing and maintaining
shareholder accounts, and may pay GT Global a distribution fee at the annualized
rate of up to 0.35% of the average daily net assets of the Fund's Class A
shares, less any amounts paid by the Fund as the aforementioned service fee, for
its expenditures incurred in providing services as distributor. All expenses for
which GT Global is reimbursed under the Class A Plan will have been incurred
within one year of such reimbursement.
Pursuant to the Fund's Class B Plan, the Fund may pay GT Global a service fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class B shares for its expenditures incurred in servicing and maintaining
shareholder accounts, and may pay GT Global a distribution fee at the annualized
rate of up to 0.75% of the average daily net assets of the Fund's Class B shares
for its expenditures incurred in providing services as distributor. Expenses
incurred under the Class B Plan in excess of 1.00% annually may be carried
forward for reimbursement in subsequent years as long as that Plan continues in
effect.
The Manager and GT Global have voluntarily undertaken to limit the Fund's
expenses (exclusive of brokerage commissions, taxes, interest and extraordinary
items) to the maximum annual level of 2.25%, 2.90%, and 1.90% of the average
daily net assets of the Fund's Class A, Class B, and Advisor Class shares,
respectively. If necessary, this limitation will be effected by waivers by the
Manager of investment management and administration fees, waivers by GT Global
of payments under the Class A Plan and/or Class B Plan and/or reimbursements by
the Manager or GT Global of portions of the Fund's other operating expenses.
Effective January 1, 1998, the Manager and GT Global have undertaken to limit
the Fund's expenses (exclusive of brokerage commissions, taxes, interest, and
extraordinary expenses) to the annual rate 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. This undertaking may be changed or eliminated in the
future.
GT Global Investor Services, Inc. ("GT Services"), an affiliate of the Manager
and GT Global, is the transfer agent of the Fund. For performing shareholder
servicing, reporting, and general transfer agent services, GT Services receives
an annual maintenance fee of $17.50 per account, a new account fee of $4.00 per
account, a per transaction fee of $1.75 for all transactions other than
exchanges and
F13
<PAGE>
GT GLOBAL NEW PACIFIC GROWTH FUND
a per exchange fee of $2.25. GT Services also is reimbursed by the Fund for its
out-of-pocket expenses for such items as postage, forms, telephone charges,
stationery and office supplies.
The Manager is the pricing and accounting agent for the Fund. The monthly fee
for these services to the Manager is a percentage, not to exceed 0.03% annually,
of the Fund's average daily net assets. The annual fee rate is derived by
applying 0.03% of the first $5 billion of assets of all registered mutual funds
advised by the Manager and 0.02% to the assets in excess of $5 billion and
allocating the result according to the Fund's average daily net assets.
The Company pays each of its Trustees who is not an employee, officer or
director of 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.
3. PURCHASES AND SALES OF SECURITIES
For the year ended December 31, 1997, purchases and sales of investment
securities by the Fund, other than U.S. government obligations and short-term
investments, aggregated $290,053,136 and $442,944,807, respectively. There were
no purchases or sales of U.S. government obligations during the year.
4. CAPITAL SHARES
At December 31, 1997, there were an unlimited number of shares of beneficial
interest authorized, at no par value. Transactions in capital shares of the Fund
were as follows:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996
-------------------------- --------------------------
CLASS A SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Shares sold................................................. 110,903,994 $1,213,154,082 285,658,529 $3,783,795,259
Shares issued in connection with reinvestment of
distributions............................................. 2,058,341 13,577,615 2,934,435 37,677,963
----------- ------------- ----------- -------------
112,962,335 1,226,731,697 288,592,964 3,821,473,222
Shares repurchased.......................................... (119,529,679) (1,324,924,362) (291,833,470) (3,895,314,036)
----------- ------------- ----------- -------------
Net decrease................................................ (6,567,344) $ (98,192,665) (3,240,506) $ (73,840,814)
----------- ------------- ----------- -------------
----------- ------------- ----------- -------------
YEAR ENDED YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996
-------------------------- --------------------------
CLASS B SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------ ----------- ------------- ----------- -------------
Shares sold................................................. 37,888,593 $ 423,842,967 96,986,480 $1,263,551,513
Shares issued in connection with reinvestment of
distributions............................................. 856,732 5,478,474 1,241,219 15,565,185
----------- ------------- ----------- -------------
38,745,325 429,321,441 98,227,699 1,279,116,698
Shares repurchased.......................................... (41,705,872) (470,119,000) (97,020,480) (1,273,495,413)
----------- ------------- ----------- -------------
Net increase (decrease)..................................... (2,960,547) $ (40,797,559) 1,207,219 $ 5,621,285
----------- ------------- ----------- -------------
----------- ------------- ----------- -------------
YEAR ENDED YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996
-------------------------- --------------------------
ADVISOR CLASS SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------ ----------- ------------- ----------- -------------
Shares sold................................................. 4,493,439 $ 41,526,678 4,311,411 $ 57,463,326
Shares issued in connection with reinvestment of
distributions............................................. 25,872 181,817 18,530 238,663
----------- ------------- ----------- -------------
4,519,311 41,708,495 4,329,941 57,701,989
Shares repurchased.......................................... (4,408,085) (41,722,805) (4,285,455) (57,637,275)
----------- ------------- ----------- -------------
Net increase (decrease)..................................... 111,226 $ (14,310) 44,486 $ 64,714
----------- ------------- ----------- -------------
----------- ------------- ----------- -------------
</TABLE>
5. EXPENSE REDUCTIONS
The Manager has directed certain portfolio trades to brokers who paid a portion
of the Fund's expenses. For the year ended December 31, 1997, the Fund's
expenses were reduced by $287,334 under these arrangements.
6. SUBSEQUENT EVENT
On January 30, 1998, Liechtenstein Global Trust ("LGT") and AMVESCAP PLC
("AMVESCAP") entered into an agreement by which AMVESCAP will acquire LGT's
Asset Management Division, including Chancellor LGT Asset Management, Inc.
AMVESCAP is the holding company of the AIM and INVESCO asset management
businesses.
- --------------
FEDERAL TAX INFORMATION (UNAUDITED):
For its fiscal year ended December 31, 1997, the total amount of income received
by the Fund from sources within foreign countries and possessions of the United
States was approximately $.2886 per share (representing an approximate total of
$7,701,422). The total amount of taxes paid by the Fund to such countries was
approximately $.0155 per share (representing an approximate total of $412,339).
Pursuant to Section 852 of the Internal Revenue Code, the Fund designates
$20,539,592 as a capital gain dividend for the fiscal year ended December 31,
1997.
F14
<PAGE>
GT GLOBAL NEW PACIFIC GROWTH FUND
NOTES
- --------------------------------------------------------------------------------
<PAGE>
GT GLOBAL NEW PACIFIC GROWTH FUND
GT GLOBAL FUNDS
GT GLOBAL OFFERS A BROAD RANGE OF FUNDS TO COMPLEMENT MANY INVESTORS'
PORTFOLIOS. FOR MORE INFORMATION AND A PROSPECTUS ON ANY OF THE GT GLOBAL
FUNDS, PLEASE CONTACT YOUR INVESTMENT 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 AND EMERGING MARKET INVESTING.
INVESTORS SHOULD READ THE PROSPECTUS CAREFULLY BEFORE INVESTING.
GROWTH FUNDS
/ / GLOBALLY DIVERSIFIED FUNDS
GT GLOBAL NEW DIMENSION FUND
Captures global growth opportunities by investing directly in the six GT Global
Theme 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
GT GLOBAL DEVELOPING MARKETS FUND
Invests in debt and equity securities of developing market issuers
/ / GLOBAL THEME FUNDS
GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
Focuses on worldwide opportunities from the demand for consumer products and
services
GT GLOBAL FINANCIAL SERVICES FUND
Focuses on the worldwide opportunities from the demand for financial services
and products
GT GLOBAL HEALTH CARE FUND
Invests in growing health care industries worldwide
GT GLOBAL INFRASTRUCTURE FUND
Seeks companies that build, improve or maintain infrastructure
GT GLOBAL NATURAL RESOURCES FUND
Concentrates on companies that own, explore or develop natural resources
GT GLOBAL TELECOMMUNICATIONS FUND
Invests in companies worldwide that develop, manufacture or sell
telecommunications services or equipment
/ / REGIONALLY DIVERSIFIED FUNDS
GT GLOBAL NEW PACIFIC GROWTH FUND
Offers access to the emerging and established markets of the Pacific Rim,
excluding Japan
GT GLOBAL EUROPE GROWTH FUND
Focuses on investment opportunities in 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
Focuses on equity securities of U.S. companies believed to be undervalued
GT GLOBAL JAPAN GROWTH FUND
Provides U.S. investors with direct access to the Japanese market
GROWTH AND INCOME FUND
GT GLOBAL GROWTH & INCOME FUND
Invests in blue-chip stocks and government securities
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
GT GLOBAL FLOATING RATE FUND, INC.
Invests primarily in senior secured floating rate loans with the potential to
achieve a high level of current income
MONEY MARKET FUND
GT GLOBAL DOLLAR FUND
Invests in high-quality, U.S. dollar-denominated money market securities
worldwide for stability and preservation of capital
[LOGO]
THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENT PROSPECTUS.
<PAGE>
[LOGO]
GT Global, Inc.
Fifty California Street
27th Floor
San Francisco, California
94111-4624
DATED MATERIAL
PLEASE EXPEDITE
GT Global New Pacific Growth Fund
NEWAR802050M
