<PAGE>
GT GLOBAL
OVER 25 YEARS
OF INVESTING
WORLDWIDE
/ /
GT GLOBAL
AMERICA FUNDS
/ /
ANNUAL REPORT
DECEMBER 31, 1997
[LOGO]
<PAGE>
[GRAPHIC]
GT GLOBAL AMERICA FUNDS
TABLE OF CONTENTS
Message from the Chairman. . . . . . . . . . . . . . . . . . . . . . . . 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
The views of the Funds' management as described in this report are as of the
date written. Portfolio holdings and allocations are as of December 31, 1997,
unless otherwise noted. Views, portfolio holdings and allocations may have
changed subsequent to these dates
<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
2
<PAGE>
- --------------------------------------------------------------------------------
THREE FUNDS, THREE LEVELS OF OPPORTUNITY
Historically, different sized U.S. companies have different risk and return
characteristics. The largest companies, such as those in the Standard & Poor's
500 Index, have typically demonstrated consistent returns with a moderate degree
of day-to-day price fluctuation. The smallest companies, such as those traded on
NASDAQ, experienced bursts of outstanding performance, but with a wider range of
price fluctuation. Medium-sized companies, represented by the S&P 400 Mid Cap
Index, have often outperformed larger and smaller companies, with accompanying
returns and price fluctuations in ranges between small and large cap stocks.
In addition, 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 prevailing investment climate. With these
considerations 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*
Invests 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
Invests primarily in companies with a market capitalization of $500 million and
up at the time of purchase that our investment team has also determined to be
priced low relative to fair value and long-term potential.
GT GLOBAL AMERICA FUNDS
[GRAPHIC]
THE GT GLOBAL AMERICA FUNDS OFFER VERSATILE INVESTMENT OPPORTUNITIES THAT CAN
SERVE AS A SOLID FOUNDATION TO YOUR INVESTMENT PORTFOLIO.
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 INVESTMENT PROCESS:
COMBINING QUANTITATIVE AND QUALITATIVE RESEARCH
GT Global America Funds adhere to an investment process that seeks to meet each
Fund's objective and deliver the consistent, competitive results investors
expect.
Our equity managers look for 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 experienced team of career research analysts provides the engine of our
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 goals of our research effort are to develop and maintain
well-supported, non-consensus perspectives on these companies. Research is
conducted by contacting a company's management, competitors, suppliers,
distributors and customers to determine its fundamental position and potential
for change.
As a check on forward-looking fundamental research, we utilize proprietary,
quantitative stock selection models developed more than 13 years ago by our
Quantitative Equity Research Group. Quantitative analysts continually research
and update the models.
[GRAPHIC]
FUNDEMENTAL 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 weightings. This limits 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
ALTHOUGH A QUANTITATIVE PERSPECTIVE PROVIDES A CRITICAL INDEPENDENT
CONTRIBUTION, IT IS THE INDIVIDUAL ANALYST'S INPUT THAT PRIMARILY DRIVES STOCK
SELECTION DECISIONS. 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.
QUANTITATIVE RESEARCH QUALITATIVE RESEARCH
--------------------- --------------------
BUY HOLD SELL
| |
| |
| | | |
| | | |
| 10% | 20% | 40% | 20% | 10% |
1 2 3 4 5
4
<PAGE>
- --------------------------------------------------------------------------------
THE TEAM APPROACH TO INVESTING
Teamwork among talented investment professionals is at the center of our
investment discipline. Our America Fund managers, with an average of 17 years of
industry experience, are supported by a group of seasoned investment analysts.
We believe working together as a team creates a combination of strengths and
facilitates the investment process. Within this framework, individual team
members concentrate on their defined industries, ensuring a deeper and broader
group understanding of companies, markets and world events. The continual
exchange of knowledge and ideas promotes style integrity and reflects our belief
that the key to achieving consistent results is following a disciplined
investment process.
ABOUT THE AMERICA TEAM(1)
PATRICIA CHADWICK - Head of North American Equities since 1998; Chief Investment
Strategist 1996-97. Ms. Chadwick joined Chancellor LGT in 1980 as a Senior
Research Analyst. She became a large cap growth equity Portfolio Manager in 1982
and was appointed Chair of the Equity Strategy Committee in 1994. Previously,
Ms. Chadwick spent five years with the Ford Foundation.
TED UJAZDOWSKI - Director of the America Value Group since 1987 and Portfolio
Manager for the America Value Fund 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 LGT'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 of the America Value Fund since 1997 and an
Analyst since June 1993. Previously, Mr. Scheiner was a Securities Analyst at
Prudential Securities from 1989 until 1993. He received an M.B.A. in Finance,
with honors, from New York University.
BRENT CLUM - Portfolio Manager of the America Mid Cap Growth Fund. Mr. Clum
joined Chancellor LGT Asset Management in June 1995, after five years at T. Rowe
Price where he was an analyst. Previously, he was a Senior Tax Accountant for
Arthur Anderson's International and Energy Departments. Mr. Clum received an
M.B.A. from Harvard University Graduate School of Business. He also holds C.F.A.
and C.P.A. designations.
MARK J. CUNNEEN - Portfolio Manager of the America Small Cap Growth Fund. Mr.
Cuneen has been with Chancellor LGT Asset Management 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 to 1992. Mr. Cunneen earned an M.B.A.
from the Wharton School of the University of Pennsylvania.
RICHARD COLLINS - Portfolio Manager of the America Value Fund since 1997 and
Managing Director since 1993. Previously, Mr. Collins was Head of Energy
Research at CIMI and spent 10 years at Scudder, Stevens & Clark. From 1970 to
1973, he was an oil and gas Analyst at Salomon Brothers He began his career in
1967 at Dean Witter.
[PHOTO]
GT GLOBAL AMERICA FUNDS' INVESTMENT TEAM: (LEFT TO RIGHT) BRENT CLUM, ADAM
SCHEINER, TED UJAZDOWSKI, AND MARK CUNNEEN. (PATRICIA CHADWICK AND RICHARD
COLLINS ARE NOT FEATURED)
(1) Members of the team 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 Funds.
5
<PAGE>
- --------------------------------------------------------------------------------
MARKET REVIEW AND OUTLOOK
1997 - A YEAR OF CONTINUED GAINS
The stock market continued its remarkable upsurge in 1997, with the S&P 500
rising 33.4%(1) for a total return of 125% since the beginning of 1995. This
ascent reflects what has been an almost ideal environment for equities--steady
GDP growth, declining inflation and firm Federal Reserve policy. Gains in 1997
were all the more impressive given the extended length of the current bull
market (seven years), concerns about a tightening labor market with rising wage
costs, the periodic threat of Federal Reserve tightening and, toward year-end,
the Asian currency crisis.
Strong performance of the equity market was accompanied by higher volatility
than in the two previous years. In addition, better-than-expected economic
growth and resulting fears of higher interest rates clouded market prospects
during the first quarter. However, in the second and third quarters, moderating
growth and a continued deceleration of inflation reversed some of these fears,
resulting in a rally that broadened into small- and mid-capitalization issues
after three years of large-cap leadership.
With respect to the Asian influence, concern over the likely scope of weakness
in these markets had a chilling impact on equity markets worldwide in the fourth
quarter. Some companies' preannouncements of earning disappointments spurred a
flight to quality. Many investors either channeled their holdings into large-
cap, liquid stocks-causing a slump in performance of small and mid-cap issues-or
reduced equity positions to buy bonds.
Despite the uncertain impact of conditions in Asia on the U.S. economy, however,
the market shrugged off a sharp October correction and showed modest gains for
the fourth quarter as a whole. The S&P 500, for example, managed a 2.9% gain for
the fourth quarter.
LOOKING AHEAD
Much has been written about the "Goldilocks" environment (not too hot, nor too
cold but just right) in the U.S. economy. Some analysts feel those who remain
bullish have traded Goldilocks for Pollyanna. On balance, however, after seven
years of solid economic growth, improving corporate profits and a rising equity
market, our outlook for the U.S. stock market remains positive. We believe the
focus of U.S. corporate management on improving profitability and
competitiveness on a global basis could continue to drive earnings. We expect
weakness in Asia will moderate growth somewhat, but see increasing potential for
the Federal Reserve to ease interest rates later in 1998.
INFLATION - TRENDING DOWN
[EDGAR REPRESENTATION OF GRAPH]
Currency US$
1965 1.1
1.7
1.7
1.8
2.3
2.8
3.3
3.7
3
2.7
2.7
2.7
3.8
4
4.5
4.7
4.8
5.5
5.6
5.9
6
6
5.7
5.6
5
4.4
4.4
3.5
3.4
3.1
3
3.5
4
5.5
6.8
8.3
9.9
10.6
11.4
12.2
11.1
9.7
8.7
7.2
6.4
6.1
5.5
5.1
5.9
6.8
6.7
6.6
6.6
7
8
8.9
9.7
10.7
11.8
12.7
14.3
14.5
1980 12.9
12.6
11.2
9.8
10.8
9.5
7.6
6.8
5.8
4.5
3.6
3.3
2.6
3.3
4.5
4.3
4.3
4.1
3.6
3.7
3.3
3.5
3.1
1.6
1.6
1.3
2.2
3.8
4.2
4.5
4
3.9
4.1
4.3
4.8
5.2
4.7
4.6
5.2
4.6
5.5
6.2
5.3
4.8
3.9
3
2.9
3.1
3.1
3.1
3.2
3.1
2.7
2.7
2.5
2.4
2.9
2.7
2.8
3.1
2.6
2.7
2.7
2.8
2.9
3.2
2.9
2.3
2.2
1997 1.9
Source: Datastream, January 1998.
(1) The index performance shown is for illustrative purposes only and is not
intended to represent the performance of GT Global America Funds. Please
see pages 7,10,and 13 for Fund performance.
6
<PAGE>
- --------------------------------------------------------------------------------
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
PERFORMANCE SUMMARY
[PHOTO]
INVESTMENT OBJECTIVE AND STRATEGY
The Fund seeks long-term capital appreciation by investing primarily
in equity securities of small capitalization companies domiciled in the United
States. As of January 2, 1997, the Fund's market capitalization range changed.
We now invest primarily in companies having a market capitalization of up to $1
billion at the time of purchase. Previously, the Fund invested in companies
having a market capitalization of up to $500 million at the time of purchase.
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
PERFORMANCE SUMMARY
[EDGAR REPRESENTATION OF GRAPH]
<TABLE>
<CAPTION>
CLASS A SHARES
GT GLOBAL AMERICA SMALL CAP GROWTH FUND RUSSELL 2000 INDEX
<S> <C> <C>
10/18/95 9,525 10,000
9,558 9,746
9,742 10,156
9,833 10,424
9,900 10,412
10,458 10,737
10,867 10,956
11,883 11,541
12,325 11,996
11,608 11,504
10,717 10,499
10,875 11,108
11,683 11,543
11,300 11,365
11/30/96 11,183 11,833
11,191 12,143
11,441 12,386
10,458 12,085
9,627 11,515
9,519 11,547
10,753 12,832
11,343 13,382
12,326 14,005
12,594 14,325
13,765 15,373
13,157 14,698
13,005 14,603
12/31/97 13,007 14,858
</TABLE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
PERFORMANCE SUMMARY
[EDGAR REPRESENTATION OF GRAPH]
<TABLE>
<CAPTION>
CLASS B SHARES
GT GLOBAL AMERICA SMALL CAP GROWTH FUND RUSSELL 2000 INDEX
<S> <C> <C>
10/18/95 10,000 10,000
10,035 9,746
10,219 10,156
10,306 10,424
10,367 10,412
10,954 10,737
11,374 10,955
12,441 11,541
12,887 11,996
12,135 11,504
11,199 10,499
11,356 11,108
12,196 11,543
11,785 11,365
11/30/96 11,654 11,833
11,661 12,143
11,914 12,386
10,891 12,085
10,008 11,515
9,896 11,547
11,173 12,832
11,783 13,382
12,797 14,005
13,069 14,325
14,271 15,373
13,632 14,698
13,463 14,603
12/31/97 13,465 14,858
</TABLE>
The charts above show performance of GT Global America Small Cap Fund Class A
and Class B shares since inception, versus the Russell 2000 Index. The top 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 $13,764 on
December 31, 1997.
AVERAGE ANNUAL TOTAL RETURNS %(1)
DECEMBER 31, 1997
WITHOUT SALES CHARGE(2) WITH SALES CHARGE
SHARE CLASS 1-YEAR LIFE OF FUND(3) 1-YEAR LIFE OF FUND(3)
CLASS A 16.23 15.19 10.70 12.68
CLASS B 15.47 14.46 10.47 13.29
ADVISOR CLASS(4) 16.63 15.61 N/A N/A
(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 or the
contingent deferred sales charge for Class A and Class B shares,
respectively, which, if included, would have reduced quoted performance.
(3) The Fund began operations on October 18, 1995.
(4) 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 Fund 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.
7
<PAGE>
- --------------------------------------------------------------------------------
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
INTERVIEW WITH PORTFOLIO MANAGER
MARK CUNNEEN
Q HOW DID THE FUND PERFORM?
A While small cap stocks enjoyed strong gains for 1997 as a whole, the year was
marked by extreme volatility, with periods of notable outperformance and
underperformance. Against this background, for the 12 months ended December 31,
1997, the Fund's total return was 16.23% for Class A shares (10.70% including
the maximum 4.75% sales charge); total return for Class B shares was 15.47%
(10.47% including the maximum 5% contingent deferred sales charge). During the
same period, the Russell 2000 Index(4) returned 22.36%.
Divergence in the Fund's returns relative to the index primarily reflects the
Fund's small growth bias and certain disappointing technology investments in the
first quarter. Small growth stocks significantly lagged the broader market in
1997.
The Fund recovered strongly in the last nine months, with Class A shares
outpacing the Russell 2000 Index by 6.10 percentage points (excluding sales
charge). This outperformance reflects good stock selection across a number of
sectors, positive industry bets and improved risk management. Stocks that
performed particularly well included American Disposal and General Cable, both
of which benefited from industry consolidation. Along this same consolidation
theme, we also like companies in the billboard area, such as Universal
Outdoor Holdings and Lamar Advertising.
Q HOW DID SMALL CAP PERFORMANCE COMPARE TO RETURNS OF LARGER CAP STOCKS OVER THE
YEAR?
A Liquidity, strong and consistent earnings growth and moderate volatility have
been key factors in elevating the largest cap stocks, leading small cap stocks
to underperform for the year overall. In the first quarter, small growth stocks
underperformed the broader market significantly due to disappointing earnings
growth, stronger than expected economic growth and fears of higher interest
rates. In the second and third quarters, however, small cap stocks rallied in
response to improving earnings growth, attractive relative valuations,
moderating economic growth and continued decelerating inflation. During this
period, small growth stocks considerably outperformed large cap returns. In the
fourth quarter, however, small cap growth stocks retreated again, the result of
expected slowdown in worldwide economic growth due to Asian economic weakness.
Q WHAT IS YOUR CURRENT INVESTMENT STRATEGY?
A The Fund continues to be invested in a number of themes such as investment
technology services, other business and consumer services and
consolidation/restructuring opportunities.
We remain defensively positioned. We are underweighted relative to the Russell
2000 Index in the technology sector, balanced by an overweighting in consumer
discretionary spending sectors. Our weightings remain neutral in financial
services, health care, energy, basic materials and capital goods. Our exposure
to Asia continues to be minimal. We are concentrating on companies that we
believe can consistently meet or exceed our earnings expectations, as the
market's volatile environment can severely punish disappointing earnings.
Q WHAT IS YOUR OUTLOOK OVER THE NEAR TERM?
A We believe moderate economic growth and declining inflation continue to
provide a positive backdrop for the U.S. equity market. Relative valuations are
very attractive, and we expect an improving profit trend originating in the
second and third quarters of 1997 to continue, if not on an absolute basis then
at least relative to large cap stocks.
However, our overall outlook for small cap growth stocks continues to be
cautious, as liquidity demands are paramount. Continued uncertainty and extreme
market volatility would negatively impact these stocks. We believe that once
concern over Asia subsides, investors should return to small growth stocks, as
attractive valuations will reduce some of the associated risk.
(4) The Russell 2000 Index comprises 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 $171.7 million to $1.1 billion as of December 1997.
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.
8
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
ALLOCATION OF NET ASSETS %
DECEMBER 31, 1997 DECEMBER 31, 1996
SERVICES 33.0 31.0
HEALTH CARE 14.3 1.8
TECHNOLOGY 13.2 5.5
FINANCE 9.3 14.0
CAPITAL GOODS 7.4 13.3
ENERGY 5.4 N/A
CONSUMER NON-DURABLES 4.2 4.0
MATERIAL/BASIC INDUSTRY 3.9 4.9
CONSUMER DURABLES 3.8 15.3
MULTI-INDUSTRY/MISC. 2.5 N/A
SHORT-TERM & OTHER 3.0 10.2
Allocations will change based on current market conditions.
A complete listing may be found in the Financial Statements section of this
report.
<TABLE>
<CAPTION>
<S> <C>
KEY PORTFOLIO HOLDINGS(5) (AS OF DECEMBER 31, 1997) % of
Net Assets
SIGNATURE RESORTS, INC. Signature develops and operates timeshare resorts in 3.0
the United States and one in the Netherlands Antilles. Directly or through
wholly owned affiliates, the company owns 19 resorts, including a partial
interest in two.
PERSONNEL GROUP OF AMERICA, INC. The company provides information technology 2.5
staffing and consulting services, and commercial staffing services through 120
offices in 21 states and the District of Columbia.
INSIGHT ENTERPRISES, INC. A direct marketer of computers, hardware and 2.3
software, the company markets a line of more than 40,000 brands. Insight markets
primarily to small and medium-sized businesses through a telemarketing sales
force.
NEWFIELD EXPLORATION COMPANY This independent oil and gas company explores for, 1.9
develops and acquires oil and natural gas properties in the Gulf of Mexico.
JONES MEDICAL INDUSTRIES, INC. The company and its subsidiaries manufacture and 1.9
market branded vitamin and nutritional products, professional dermal infection-
control products and critical-care hospital pharmaceuticals.
GENERAL CABLE CORP. Designs, develops, manufactures, markets and distributes 1.9
copper wire and cable products for communications and electrical markets.
VISTANA, INC. Vistana develops and operates timeshare resorts in the United 1.8
States, and currently operates three vacation ownership resorts in Florida.
Units in its resorts total more than 1,400, and approximately 58,000 vacation
ownership interests have been sold.
AMERICAN DISPOSAL SERVICES, INC. Supplies pollution control equipment and 1.8
services. The company provides solid waste collection, transfer and disposal
services for residential, commercial and industrial customers primarily in the
Midwest.
KNOLL, INC. Knoll designs, manufactures and distributes office systems and 1.8
business furniture. It also offers a range of office furniture and accessories
in five categories: office systems, seating, storage solutions, filing
cabinets,and desks and tables.
CDW COMPUTER CENTERS, INC. CDW sells microcomputer hardware and peripherals, 1.7
accessories and networking products and software. The company markets MS-
DOS/Microsoft Windows-based microcomputer products through telemarketing account
executives, who service customers through an "800" telephone number.
</TABLE>
Source: Bloomberg, January 1998.
(5) 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
PERFORMANCE SUMMARY
[PHOTO]
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. As of January 2, 1997, the Fund's market capitalization range
changed. We now invest primarily in companies having a market capitalization of
$1 billion to $5 billion at the time of purchase. 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 MID CAP GROWTH FUND
PERFORMANCE SUMMARY
[EDGAR REPRESENTATION OF GRAPH]
<TABLE>
<CAPTION>
CLASS A SHARES
GT GLOBAL AMERICA
MID CAP GROWTH FUND RUSSELL 2000 INDEX(5) RUSSELL MIDCAP INDEX S&P MID CAP 400 INDEX(5)
<S> <C> <C> <C> <C>
6/9/87 9,525 10,000 10,000 10,000
9,916 10,178 10,272 10,250
10,230 10,495 10,740 10,538
10,697 10,803 11,183 10,921
10,439 10,604 10,936 10,710
7,468 7,358 7,931 8,178
7,229 6,963 7,380 7,774
8,153 7,522 8,340 8,375
8,315 7,849 8,425 8,759
9,011 8,556 9,116 9,315
8,887 8,957 9,157 9,466
9,087 9,160 9,209 9,515
8,811 8,911 9,046 9,316
9,630 9,547 9,729 9,988
9,392 9,456 9,361 9,719
9,020 9,214 9,005 9,493
9,277 9,458 9,36 9,8571
9,030 9,353 9,304 9,925
8,753 9,041 9,080 9,732
9,062 9,395 9,418 10,125
9,724 9,814 9,973 10,814
9,837 9,886 9,892 10,850
10,34 10,119 10,013 411,091
11,30 10,560 10,583 611,691
12,217 11,014 11,145 12,255
11,782 10,763 10,996 12,200
12,765 11,182 11,858 12,925
13,127 11,454 12,317 13,384
13,417 11,490 12,312 13,531
13,292 10,809 11,799 12,961
13,437 10,878 12,078 13,248
14,025 10,921 12,384 13,721
12,638 9,967 11,236 12,560
13,424 10,276 11,467 13,011
14,396 10,680 11,948 13,292
14,134 10,331 11,617 12,776
16,144 11,062 12,812 14,023
16,209 11,091 12,970 14,081
15,5761 10,605 12,557 3,758
13,5121 9,187 11,096 2,331
12,2551 8,370 10,345 1,577
11,971 7,859 10,151 11,224
12,681 8,458 11,238 12,302
12,987 8,791 11,748 13,017
13,621 9,583 12,629 14,045
14,484 10,657 13,741 15,307
15,215 11,405 14,459 16,005
14,997 11,375 14,330 16,000
15,521 11,917 15,055 16,737
14,363 11,228 14,235 15,887
15,248 11,621 14,953 16,844
15,980 12,049 15,420 17,457
15,456 12,143 15,402 17,400
15,150 12,464 15,748 18,082
14,178 11,888 15,229 17,473
15,492 12,839 17,273 19,538
17,323 13,880 17,427 19,884
17,488 14,285 17,465 20,200
16,468 13,802 16,747 19,439
15,964 13,317 16,427 19,207
5/31/92 16,106 13,494 16,459 19,388
15,174 12,860 15,969 18,835
16,315 13,307 16,681 19,770
15,756 12,931 16,46 19,2973
16,249 13,229 16,823 19,567
17,565 13,646 17,330 20,036
19,867 14,691 18,425 21,156
20,410 15,203 18,778 21,866
20,577 15,717 18,999 22,139
19,265 15,354 18,414 21,829
19,063 15,853 18,948 22,583
17,823 15,417 18,170 21,992
19,075 16,099 19,027 22,994
18,622 16,199 18,949 23,109
18,860 16,422 18,889 23,065
19,897 17,131 19,987 24,017
19,826 17,615 20,227 24,271
20,815 18,068 20,552 24,350
20,899 17,480 20,074 23,811
22,113 18,077 20,880 24,916
22,396 18,643 21,417 25,496
23,027 18,576 21,233 25,134
23,246 17,597 20,232 23,970
23,786 17,702 20,183 24,148
24,005 17,503 20,212 23,920
23,928 16,912 19,343 23,096
23,760 17,190 19,879 23,878
25,241 18,148 21,064 25,128
25,447 18,086 20,717 24,659
25,511 18,013 21,075 24,929
25,176 17,285 20,146 23,805
25,581 17,748 20,428 24,022
25,755 17,523 20,674 24,273
27,042 18,253 21,774 25,546
28,054 18,566 22,637 25,989
29,110 18,978 22,827 26,511
29,804 19,305 23,390 27,150
31,713 20,306 24,454 28,256
33,448 21,476 25,993 29,729
33,680 21,920 26,278 30,279
33,882 22,312 26,863 31,013
32,537 21,314 26,184 30,215
33,246 22,209 27,354 31,535
31,523 22,795 27,369 31,457
31,623 22,771 27,852 31,913
32,267 23,480 28,906 32,998
32,598 23,958 29,134 33,393
34,929 25,239 30,541 34,413
35,028 26,234 31,165 34,878
33,639 25,157 30,223 34,355
31,457 22,959 27,877 32,031
33,110 24,292 29,384 33,878
35,425 25,242 31,250 35,355
35,441 24,853 30,884 35,458
36,929 25,877 32,703 37,455
36,457 26,555 32,152 37,497
37,054 27,086 33,575 38,904
34,070 26,429 32,836 38,584
30,998 25,182 30,980 36,939
31,665 25,252 31,739 37,897
34,544 28,062 34,583 41,211
35,755 29,264 35,540 42,369
38,862 30,626 38,942 46,564
38,107 31,327 38,562 46,507
41,776 33,620 40,513 49,180
39,740 32,143 38,485 47,040
40,179 31,934 38,889 7,738
12/31/97 41,579 32,493 39,398 49,590
</TABLE>
GT GLOBAL AMERICA MID CAP GROWTH FUND
PERFORMANCE SUMMARY
[EDGAR REPRESENTATION OF GRAPH]
<TABLE>
<CAPTION>
CLASS B SHARES
GT GLOBAL AMERICA
MID CAP GROWTH FUND RUSSELL 2000 INDEX(5) RUSSELL MIDCAP INDEX S&P MID CAP 400 INDEX(5)
<S> <C> <C> <C> <C>
4/1/93 10,000 10,000 10,000 10,000
9,403 9,725 9,735 9,738
10,063 10,155 10,044 10,182
9,818 10,218 10,158 10,233
9,937 10,359 10,207 10,213
10,478 10,807 10,661 10,635
10,434 11,112 10,701 10,747
10,956 11,398 10,710 10,782
10,994 11,027 10,462 10,544
11,608 11,403 10,841 11,033
11,757 11,761 11,140 11,290
12,076 11,718 10,988 11,130
12,185 11,101 10,520 10,614
12,464 11,167 10,592 10,693
12,572 11,041 10,607 10,592
12,525 10,668 10,293 10,227
12,436 10,844 10,646 10,573
13,197 11,448 11,151 11,127
13,299 11,409 10,878 10,919
13,326 11,363 10,961 11,039
13,143 10,904 10,478 10,541
13,356 11,196 10,614 10,638
13,432 11,054 10,832 10,748
14,096 11,514 11,393 11,312
14,623 11,712 11,719 11,508
15,165 11,972 11,895 11,739
5/31/95 15,516 12,178 12,286 12,022
16,500 12,809 12,699 12,512
17,386 13,547 13,316 13,164
17,500 13,828 13,520 13,408
17,592 14,075 13,825 13,733
16,890 13,445 13,516 13,380
17,248 14,010 14,188 13,964
16,351 14,380 14,271 13,929
16,385 14,364 14,572 14,131
16,716 14,812 14,914 14,612
16,873 15,113 15,130 14,787
18,066 15,921 15,559 15,238
18,118 16,549 15,793 15,445
17,387 15,869 15,556 15,213
16,246 14,483 14,593 14,184
17,091 15,324 15,288 15,002
18,275 15,923 16,043 15,656
18,275 15,678 16,172 15,701
19,032 16,324 17,157 16,586
18,774 16,751 16,982 16,604
19,071 17,086 17,617 17,227
17,525 16,672 17,591 17,086
15,942 15,885 16,843 16,357
16,275 15,930 17,262 16,781
17,738 17,702 18,522 18,249
18,349 18,460 19,128 18,761
19,941 19,319 20,723 20,619
19,543 19,761 20,498 20,594
21,413 21,208 21,668 21,778
20,357 20,276 20,825 20,830
20,570 20,144 21,321 21,139
12/31/97 21,280 20,497 21,909 21,959
</TABLE>
The charts above show performance of GT Global America Mid Cap Growth Fund,
Class A and Class B shares since inception, versus the various indices. The top
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 $14,051 on
December 31, 1997.
AVERAGE ANNUAL TOTAL RETURNS%(1)
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SHARE CLASS WITHOUT SALES CHARGE(2) WITH SALES CHARGE
1-YEAR 5-YEAR 10-YEAR LIFE OF FUND 1-YEAR 5-YEAR 10-YEAR LIFE OF FUND
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A(3) 14.05 15.29 17.69 14.97 8.63 14.18 17.12 14.44
CLASS B(3) 13.35 N/A N/A 17.23 8.35 N/A N/A 17.00
ADVISOR CLASS(4) 14.54 N/A N/A 14.05 N/A N/A N/A N/A
<CAPTION>
HISTORICAL PERFORMANCE(2)
ANNUAL TOTAL RETURNS % (PER CALENDAR YEAR)
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A 11.14 54.77 -7.40 19.29 31.74 8.34 15.69 23.23 15.65 14.05
CLASS B N/A N/A N/A N/A N/A 16.08(3) 15.06 22.42 14.82 13.35
</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 or the
contingent deferred sales charge for Class A and Class B shares,
respectively, which, if included, would have reduced quoted performance.
(3) The Fund began operations (Class A shares) on June 9, 1987; 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 "Alternative Purchase Plan" section in the Fund's prospectus.
(5) The Russell 2000 Index comprises 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 $171.7 million to $1.1 billion as of December
1997.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. Their performance includes the effect of reinvested dividends
and is measured in U.S. dollars.
The above data represent past performance of Fund 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.
10
<PAGE>
- --------------------------------------------------------------------------------
GT GLOBAL AMERICA MID CAP GROWTH FUND
INTERVIEW WITH PORTFOLIO MANAGER
BRENT CLUM
Q HOW DID THE FUND PERFORM?
A The Fund has enjoyed considerable improvement in returns since our semiannual
report. For the 12 months ended December 31, 1997, the Fund's Class A shares
returned a total of 14.05% (8.63% including the maximum 4.75% sales charge);
total return for Class B shares was 13.35% (8.35% including the maximum 5%
contingent deferred sales charge). During the same period, the Russell Midcap
Index(6) returned 29.01%.
We are encouraged by the Fund's performance over the last nine months of 1997,
despite the disappointment in absolute returns over the 12 months. To put
performance in perspective, a shift in portfolio managers took place at the end
of 1996 and the Fund was repositioned during the first quarter of 1997 toward a
mid cap orientation.(7) Regrettably, this came as a detriment to performance.
However, during this transition period, we took advantage of the weakness in mid
cap stocks to reposition the portfolio. As a result, the Fund was well
positioned coming out of the first quarter. As portfolio holdings stabilized,
the Fund experienced strong returns to finish the year's remaining nine months
above its benchmarks. During the nine months ended December 31, 1997, the Fund's
Class A shares returned 34.13%, excluding sales charges, versus 30.07% for the
Russell Midcap Index.
Q WHAT WORKED WELL FOR THE FUND?
A We tend to favor businesses that have an element of recurring revenue and some
degree of pricing power. Historically, we have found these characteristics can
often lead to improved operating margins and, ultimately, improved earnings
multiples. Indeed, for the top performers in the portfolio, pricing power has
played out very well.
As an industry, the billboard sector performed strongly. Supply is limited and
many companies are realizing price increases of between 6% to 12% a year, while
costs have remained fixed. The industry has also been consolidating, which has
helped fundamentals and valuations. Moreover, there have been tremendous
synergies between billboard companies and other media companies. Looking ahead,
we expect the industry to continue its trend toward consolidation. As a result,
Outdoor Systems remains a core holding of the portfolio.
The Fund was also buoyed by returns in several of its larger positions, such as
Cendant Corp., a global provider of consumer and business services. Cendant has
enjoyed strong return characteristics and healthy pricing power, and is
benefiting from consolidation. Another solid performer for the Fund was HBO &
Co., a software provider to the health care industry. As a high-growth stock,
HBO was particularly hard hit in the first quarter of the year, but was later
rewarded because of strong earnings growth. Similarly, PeopleSoft, an enterprise
software provider, severely underperformed in the first quarter but rebounded
nicely over the remainder of the year. Based on our belief in the fundamentals
of these two companies, we took the opportunity to add to our positions as their
share prices corrected, and benefited when they bounced back.
Q WHAT ARE YOUR EXPECTATIONS IN 1998?
A While markets may continue to be volatile, we are optimistic about the current
environment and look for 1998 to bring additional positive earnings revisions
for mid cap stocks. We began to see an acceleration in earnings of small and mid
cap stocks relative to large cap stocks in the second quarter of last year, and
remain encouraged that this trend will take root in 1998. Against this
background, we expect a stockpicker's market, something we believe could
potentially play out well for this particular Fund.
(6) The Russell Midcap Index comprises the capitalization-weighted average
price of 800 selected common stocks of medium-size domestic companies. Its
performance includes the effect of reinvested dividends and is measured in
U.S. dollars. With the change in the Fund's name and the change in the
emphasis of the Fund more toward mid cap stocks, the Fund has also changed
its benchmark to the Russell Midcap Index from the Russell 2000 and the S&P
Mid Cap 400. We feel the Russell Midcap Index is the most relevant broad
based index with which to compare the fund.
(7) Please see sidebar on p. 10 for additional information. The Fund also
changed its name from the GT Global America Growth Fund.
Indices are unmanaged, not available for direct investment and do not incur
sales charges and professional management fees.
11
<PAGE>
- -------------------------------------------------------------------------------
GT GLOBAL AMERICA MID CAP GROWTH FUND
ALLOCATION OF NET ASSETS %
DECEMBER 31, 1997 DECEMBER 31, 1996
SERVICES 36.5 18.3
FINANCE 14.6 8.9
HEALTH CARE 11.1 N/A
TECHNOLOGY 11.1 19.1
MATERIALS/BASIC INDUSTRY 9.7 4.8
ENERGY 8.6 24.7
CONSUMER DURABLES 4.1 N/A
MULTI-INDUSTRY/MISC. 2.4 N/A
CAPITAL GOODS 1.3 3.0
CONSUMER NON-DURABLES 1.3 14.2
SHORT TERM & OTHER (0.7) 7.0
Allocations will change based on current market conditions.
A complete listing may be found in the Financial Statements section of this
report.
<TABLE>
<CAPTION>
<S> <C>
KEY PORTFOLIO HOLDINGS(8) (AS OF DECEMBER 31, 1997) % of
Net Assets
CENDANT CORP. A provider of global consumer and business services, Cendant 6.2
offers shopping, auto, dining, and other services. The company franchises hotels
and rental cars and provides vacation exchange services. They also franchise
real estate brokerage offices, provide mortgage services to consumers, and
relocation services for corporate employees.
SNYDER COMMUNICATIONS, INC. Snyder designs and implements marketing programs 4.1
for Fortune 500 clients using a range of services including field sales, medical
detailing, database marketing, sponsored information displays, product sampling
and customer care retention programs.
OUTDOOR SYSTEMS, INC. This is an out-of-home media company in the United States 3.6
and Canada that operates poster, bulletin, transit shelter and subway displays.
SIGNATURE RESORTS, INC. Signature develops and operates timeshare resorts in 3.4
the United States and one in the Netherlands Antilles. Directly or through
wholly owned affiliates, the company owns 19 resorts, including a partial
interest in two.
CONSECO, INC. A financial services organization that through its subsidiaries, 3.1
provides supplemental health insurance, retirement annuities and universal life
insurance.
HILTON HOTELS CORPORATION Hilton manages or franchises approximately 240 hotels 2.9
around the world, and owns 17 hotel and/or riverboat casinos in Las Vegas,
Atlantic City and Australia.
PEOPLESOFT, INC. Offers software solutions to meet business demands of 2.9
companies worldwide. PeopleSoft develops, markets and supports enterprise
solutions for accounting, materials management, distribution, supply chain
planning and human resources.
U.S. OFFICE PRODUCTS CO. This firm offers a broad range of office products and 2.8
business services to corporate, commercial, educational and industrial customers
throughout the United States, as well as in Canada, New Zealand, Australia and
the United Kingdom. The company also operates Mail Boxes Etc.
CARIBINER INTERNATIONAL, INC. An international producer of meetings, events, 2.8
training programs and related business communications services.
STERLING COMMERCE, INC. Sterling provides electronic commerce software products 2.7
and network services that enable businesses to participate in business-to-
business electronic communications and transactions. Their products also allow
customers to access product descriptions, technical specifications, and stock
information.
</TABLE>
Source: Bloomberg, January 1998.
(8) 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
PERFORMANCE SUMMARY
[PHOTO]
INVESTMENT OBJECTIVE AND CURRENT STRATEGY
The Fund seeks long-term capital appreciation by investing primarily in equity
securities of issuers domiciled in the United States, 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.
GT GLOBAL AMERICA VALUE FUND
PERFORMANCE SUMMARY
[EDGAR REPRESENTATION OF GRAPH]
<TABLE>
<CAPTION>
CLASS A SHARES
GT GLOBAL AMERICA VALUE FUND S&P 500 INDEX S&P 500 BARRA VALUE INDEX
<S> <C> <C> <C>
10/18/95 9,525 10,000 10,000
9,542 9,905 9,922
10,358 10,340 10,360
10,633 10,539 10,647
10,967 10,898 10,965
10,942 10,999 11,068
11,183 11,105 11,327
11,658 11,268 11,443
12,242 11,559 11,616
11,983 11,603 11,560
11,267 11,090 11,072
11,483 11,324 11,378
12,117 11,962 11,864
12,233 12,292 12,266
11/30/96 12,425 13,221 13,204
12,241 12,959 12,987
12,810 13,768 13,586
13,010 13,876 13,685
12,434 13,306 13,217
12,726 14,100 13,713
13,470 14,959 14,573
13,971 15,629 15,129
15,383 16,873 16,340
14,924 15,927 15,601
15,751 16,800 16,515
14,940 16,239 15,909
15,183 16,990 16,515
12/31/97 15,575 17,282 16,882
</TABLE>
GT GLOBAL AMERICA VALUE FUND
PERFORMANCE SUMMARY
[EDGAR REPRESENTATION OF GRAPH]
<TABLE>
<CAPTION>
CLASS B SHARES
GT GLOBAL AMERICA VALUE FUND S&P 500 INDEX S&P 500 BARRA VALUE INDEX
<S> <C> <C> <C>
10/18/95 10,000 10,000 10,000
10,009 9,905 9,922
10,866 10,340 10,360
11,155 10,539 10,647
11,487 10,898 10,965
11,461 10,999 11,068
11,706 11,105 11,327
12,196 11,268 11,443
12,808 11,559 11,616
12,528 11,603 11,560
11,776 11,090 11,072
11,986 11,324 11,378
12,642 11,962 11,864
12,765 12,292 12,266
11/30/96 12,957 13,221 13,204
12,756 12,959 12,987
13,343 13,768 13,586
13,545 13,876 13,685
12,940 13,306 13,217
13,238 14,100 13,713
13,993 14,959 14,573
14,510 15,629 15,129
15,966 16,873 16,340
15,493 15,927 15,601
16,335 16,800 16,515
15,484 16,239 15,909
15,721 16,990 16,515
12/31/97 16,128 17,282 16,882
</TABLE>
The charts above show performance of GT Global America Value Fund Class A and
Class B shares since inception, versus the S&P 500. The top 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 $16,500 on December 31, 1997.
AVERAGE ANNUAL TOTAL RETURNS %(1)
DECEMBER 31, 1997
WITHOUT SALES CHARGE(2) WITH SALES CHARGE
SHARE CLASS 1-YEAR LIFE OF FUND(3) 1-YEAR LIFE OF FUND(3)
CLASS A 27.23 25.01 21.19 22.28
CLASS B 26.44 24.23 21.44 23.18
ADVISOR CLASS(4) 27.78 25.53 N/A N/A
(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 or the
contingent deferred sales charge for Class A and Class B shares,
respectively, which, if included, would have reduced quoted performance.
(3) The Fund began operations on October 18, 1995.
(4) 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 Fund 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.
13
<PAGE>
- --------------------------------------------------------------------------------
GT GLOBAL AMERICA VALUE FUND
INTERVIEW WITH PORTFOLIO MANAGERS
TED UJAZDOWSKI & ADAM SCHEINER
Q HOW DID THE FUND PERFORM?
A The GT Global America Value Fund produced strong absolute returns for the 12
months ended December 31, 1997 of 27.23% for Class A shares (21.19% including
the maximum 4.75% sales charge); total return for Class B shares was 26.44%
(21.44% including the effect of the maximum 5% contingent deferred sales
charge). Over the same period the S&P 500(5) returned 33.36% and the S&P Barra
Value Index(6) returned 30.0%.
More than 90% of actively managed equity fund managers underperformed the S&P
500 Index in 1997, mainly due to the popularity of very large cap stocks. This
has resulted in a very narrow market in which the top 10 stock performers in the
S&P 500 Index in 1997 accounted for 26 percentage points of the index return.
Companies currently represented in the portfolio, however, are somewhat smaller
than the average for the overall market, as many of the mega-cap stocks are
beyond our valuation parameters. We believe this large cap pattern is likely to
change as valuations for many of these companies are becoming increasingly
stretched.
Q WHAT FACTORS AND HOLDINGS AFFECTED THE FUND'S PERFORMANCE?
A Our significant exposure to financial services boosted returns as the
financial services sector was up over 40% in 1997 (based on the S&P Financial
Index), despite recent weakness in the large international banks due to problems
in the Pacific Rim. The group benefited from a continued decline in interest
rates coupled with strong growth and continued large stock buybacks. Banks such
as Norwest and BankAmerica were strong, as well as diversified financial
services and insurance companies such as Travelers and Allstate. Additionally,
our technology holdings, while relatively small, were exceptional performers
with Compaq leading returns.
On the other hand, performance was penalized by holdings in some of our special
situation stocks, most notably RJR Nabisco and Stone Container. We continue to
hold these stocks and believe they still have exceptional value and offer a
potential catalyst for change to unlock shareholder value going forward.
The portfolio was also hurt relative to the S&P 500 by its large underweighting
in health care. Although many of these stocks were again strong performers in
1997, we did not hold these companies in the portfolio because their valuations
exceeded our strict buying parameters.
Q HOW ARE YOU CURRENTLY POSITIONING THE FUND?
A The market environment witnessed in 1997 poses challenges for investors who
take an absolute approach to value investing, as opposed to a relative one. Our
portfolio continues to be characterized by an average price/earnings (P/E) ratio
well below that of the market, with well above average dividend yield. Although
we are pleased that approximately 85% of our stock selections showed gains for
1997, we are equally concerned with managing risk. Our overall strategy is to
seek to outperform the market through superior stock selection while providing
downside protection in the event of a correction.
Financial services continues to be a major area of emphasis. Despite strong
gains over the past few years, we feel there is more to come. We believe profit
growth expectations are realistic for domesti-
PORTFOLIO CHARACTERISTICS
DECEMBER 31, 1997
GT GLOBAL AMERICA
VALUE FUND HOLDINGS S&P 500
# OF HOLDINGS 55 500
P/E (1997) 14.7x 19.3x
RELATIVE P/E 76% 100%
DIVIDEND YIELD 2.3% 1.6%
RELATIVE YIELD 143% 100%
PRICE TO BOOK RATIO 2.6x 3.9x
RELATIVE PRICE TO BOOK RATIO 67% 100%
AVERAGE MARKET CAP $26.4 $55.1
($ BILLION)
The data presented here may change based on current market conditions and Fund
holdings.
(5) The S&P 500 Index comprises 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.
(6) The S&P Barra Value Index is a subset of the S&P 500 Index that contains
firms with lower price/book ratios. It comprises the capitalization-
weighted average price of 333 companies, 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.
14
<PAGE>
- --------------------------------------------------------------------------------
GT GLOBAL AMERICA VALUE FUND CONTINUED
cally oriented companies and, as a result of recent downward revisions, may even
be low for selected international players with dominant franchises.
Additionally, we feel industry consolidation is likely to continue to the
benefit of shareholders. The prices of basic industrial companies have lagged in
recent months due to fears of lower commodity prices and ample supplies. While
we are also reluctant to rely on commodity prices to improve, we believe that
weaker prices could spur managements to explore further restructuring or
consolidation themes in 1998. We continue to hold a sampling of special
situation investments across the chemicals, paper and energy sectors.
Although their recent popularity is somewhat disconcerting, real estate
investment trusts (REITs) are currently our third area of emphasis. With good
dividend yields and prospects for core growth, total returns from the stocks of
many companies in this area are attractive. This is particularly true when
compared to the traditional defensive yield issues in the electric utility and
telephone areas, which have recently run to full valuation levels
notwithstanding continued uncertainties brought on by deregulation.
Q WHAT ARE YOUR EXPECTATIONS FOR VALUE INVESTING FOR THE YEAR AHEAD?
A Volatility in the equity market was common in 1997 and we expect it to
increase in the year ahead. For value investors, this can be a positive.
However, we believe the most difficult markets in which to find value are those
that go straight up. Stock price corrections within a market that is trending
upward, therefore, could provide the opportunity of attractive entry points.
15
<PAGE>
- --------------------------------------------------------------------------------
GT GLOBAL AMERICA VALUE FUND
ALLOCATION OF NET ASSETS %
DECEMBER 31, 1997 DECEMBER 31, 1996
FINANCE/REITS 36.6 28.8
ENERGY 16.4 18.5
SERVICES 14.5 22.6
MATERIALS/BASIC INDUSTRY 11.2 11.4
CONSUMER DURABLES 6.4 5.0
CONSUMER NON-DURABLES 5.2 5.1
TECHNOLOGY 4.9 2.7
CAPITAL GOODS 1.2 7.7
HEALTH CARE N/A 2.5
SHORT TERM & OTHER 3.6 (4.3)
Allocations will change based on current market conditions.
A complete listing may be found in the Financial Statements section of this
report.
<TABLE>
<CAPTION>
<S> <C>
KEY PORTFOLIO HOLDINGS(7) (AS OF DECEMBER 31, 1997) % of
Net Assets
INTERNATIONAL BUSINESS MACHINES CORP. Manufactures micro and personal 2.9
computers. The company also supplies mainframe computers and other information
processing equipment, software and networking products and peripheral equipment.
STUDENT LOAN MARKETING ASSOCIATION (SALLIE MAE) A financial intermediary 2.9
serving the education credit market, the company purchases and services student
loans made under federally sponsored loan programs.
FORD MOTOR COMPANY Manufactures and sells automobiles, trucks and related parts 2.9
and accessories globally. Ford also provides financial services through its
subsidiaries Ford Credit, The Associates First Capital Corp. and Hertz Corp.
IMPERIAL CHEMICAL INDUSTRIES Imperial is an international chemical company that 2.9
produces paints, acrylics, polyurethanes, films, chemicals and polymers, tioxide
and explosives.
BELL ATLANTIC CORPORATION Provides a wide variety of phone and cable-TV 2.8
services throughout the northeast and mid-Atlantic region. Bell Atlantic's
telecommunications services include local and wireless phone services within the
Northeast.
FEDERATED DEPARTMENT STORES, INC. Federated operates full-line department 2.7
stores. The company's stores include Bloomingdale's, Burdines, Macy's and
Stern's.
TRAVELERS GROUP, INC. Through its subsidiaries, Travelers offers multiline 2.6
insurance, financial and health care services primarily to customers in the
United States.
RJR NABISCO HOLDINGS CORP. This is the parent company of RJR Nabisco, Inc., an 2.5
international consumer products company, whose major operating companies are
R.J. Reynolds Tobacco Co., R.J. Reynolds International and Nabisco Holdings
Corp.
ALLSTATE CORP. Provides property-liability and life insurance policies. The 2.5
company primarily offers private passenger automobile and homeowners insurance.
CHASE MANHATTAN CORP. A bank holding company, Chase conducts domestic and 2.5
international financial services through various bank and non-bank subsidiaries.
</TABLE>
Source: Bloomberg, January 1998.
(7) There is no assurance the Fund will continue to hold these or any other
securities mentioned in this report.
16
<PAGE>
GT GLOBAL
AMERICA FUNDS
FINANCIAL
STATEMENTS
<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 Small Cap Growth Fund - Consolidated, GT Global America Mid Cap
Growth Fund, 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, 1997, and the related statements 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
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, 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 the financial highlights referred
to above present fairly, in all material respects, the financial position of the
GT Global America Small Cap Growth Fund - Consolidated, GT Global America Mid
Cap Growth Fund, and GT Global America Value Fund - Consolidated, as of December
31, 1997, the results of their operations for the year then ended, the changes
in their net assets for each of the two years in the period then ended 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 17, 1998
F1
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND - CONSOLIDATED
PORTFOLIO OF INVESTMENTS
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Services (33.0%)
Signature Resorts, Inc.-/- ................................ US 45,550 $ 996,400 3.0
LEISURE & TOURISM
Personnel Group of America, Inc.-/- ....................... US 25,700 848,100 2.5
BUSINESS & PUBLIC SERVICES
Insight Enterprises, Inc.-/- .............................. US 20,700 760,725 2.3
RETAILERS-OTHER
Vistana, Inc.-/- .......................................... US 26,900 618,700 1.8
LEISURE & TOURISM
American Disposal Services, Inc.-/- ....................... US 16,700 609,550 1.8
CONSUMER SERVICES
CDW Computer Centers, Inc.-/- ............................. US 11,000 573,375 1.7
RETAILERS-OTHER
Superior Services, Inc.-/- ................................ US 18,000 519,750 1.5
CONSUMER SERVICES
Lason Holdings, Inc.-/- ................................... US 19,000 505,875 1.5
CONSUMER SERVICES
BA Merchant Services, Inc. "A"-/- ......................... US 28,400 504,100 1.5
BUSINESS & PUBLIC SERVICES
Comfort Systems USA, Inc.-/- .............................. US 22,800 450,300 1.3
BUSINESS & PUBLIC SERVICES
HA-LO Industries, Inc.-/- ................................. US 17,200 447,200 1.3
CONSUMER SERVICES
Clear Channel Communications, Inc.-/- ..................... US 5,600 444,850 1.3
TELECOM - OTHER
Caribiner International, Inc.-/- .......................... US 9,300 413,850 1.2
CONSUMER SERVICES
Henry Schein, Inc.-/- ..................................... US 11,400 399,000 1.2
RETAILERS-OTHER
Lamar Advertising Co.-/- .................................. US 9,700 385,575 1.1
BUSINESS & PUBLIC SERVICES
C.H. Robinson Worldwide, Inc. ............................. US 16,600 371,425 1.1
TRANSPORTATION - SHIPPING
Jevic Transportation, Inc.-/- ............................. US 21,100 340,238 1.0
TRANSPORTATION - SHIPPING
Universal Outdoor Holdings, Inc.-/- ....................... US 5,900 306,800 0.9
BUSINESS & PUBLIC SERVICES
Bright Horizons, Inc.-/- .................................. US 16,000 300,000 0.9
CONSUMER SERVICES
Hagler Bailly, Inc.-/- .................................... US 10,900 245,250 0.7
BUSINESS & PUBLIC SERVICES
Service Experts, Inc.-/- .................................. US 8,400 240,450 0.7
CONSUMER SERVICES
Industrial Distribution Group, Inc.-/- .................... US 13,900 218,056 0.6
WHOLESALE & INTERNATIONAL TRADE
Execustay Corp.-/- ........................................ US 19,300 188,175 0.6
LEISURE & TOURISM
BridgeStreet Accommodations, Inc.-/- ...................... US 17,700 179,766 0.5
CONSUMER SERVICES
EduTrek International, Inc. "A"-/- ........................ US 4,900 127,400 0.4
BUSINESS & PUBLIC SERVICES
</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, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Services (Continued)
Linens 'N Things, Inc.-/- ................................. US 1,800 $ 78,525 0.2
RETAILERS-APPAREL
NEXTLINK Communications, Inc. "A"-/- ...................... US 3,600 76,725 0.2
TELEPHONE - REGIONAL/LOCAL
Coldwater Creek, Inc.-/- .................................. US 1,800 60,750 0.2
RETAILERS-OTHER
------------
11,210,910
------------
Health Care (14.3%)
Jones Medical Industries, Inc. ............................ US 16,700 638,775 1.9
MEDICAL TECHNOLOGY & SUPPLIES
SangStat Medical Corp.-/- ................................. US 9,400 380,700 1.1
MEDICAL TECHNOLOGY & SUPPLIES
Atria Communities, Inc.-/- ................................ US 21,300 364,763 1.1
HEALTH CARE SERVICES
ESC Medical Systems Ltd.-/- {\/} .......................... ISRL 9,400 364,250 1.1
MEDICAL TECHNOLOGY & SUPPLIES
SEQUUS Pharmaceuticals, Inc.-/- ........................... US 47,900 356,256 1.1
PHARMACEUTICALS
AmeriSource Health Corp. "A"-/- ........................... US 5,600 329,000 1.0
HEALTH CARE SERVICES
Waters Corp.-/- ........................................... US 8,500 319,813 1.0
MEDICAL TECHNOLOGY & SUPPLIES
Arris Pharmaceutical Corp.-/- ............................. US 36,800 308,200 0.9
PHARMACEUTICALS
Pharmacopeia, Inc.-/- ..................................... US 18,100 289,600 0.9
BIOTECHNOLOGY
Lunar Corp.-/- ............................................ US 13,800 282,900 0.8
MEDICAL TECHNOLOGY & SUPPLIES
VIVUS, Inc.-/- ............................................ US 24,600 261,375 0.8
MEDICAL TECHNOLOGY & SUPPLIES
COR Therapeutics, Inc.-/- ................................. US 9,700 218,250 0.6
BIOTECHNOLOGY
Focal, Inc.-/- ............................................ US 18,000 191,250 0.6
MEDICAL TECHNOLOGY & SUPPLIES
Nitinol Medical Technologies, Inc.-/- ..................... US 15,000 120,000 0.4
MEDICAL TECHNOLOGY & SUPPLIES
Gilead Sciences, Inc.-/- .................................. US 2,700 103,275 0.3
BIOTECHNOLOGY
AmeriPath, Inc.-/- ........................................ US 5,800 98,600 0.3
HEALTH CARE SERVICES
Depotech Corp.-/- ......................................... US 23,500 83,719 0.3
PHARMACEUTICALS
Sofamor Danek Group, Inc.-/- .............................. US 600 39,038 0.1
MEDICAL TECHNOLOGY & SUPPLIES
------------
4,749,764
------------
</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, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Technology (13.2%)
Software AG Systems, Inc.-/- .............................. US 31,600 $ 458,200 1.4
SOFTWARE
Documentum, Inc.-/- ....................................... US 10,000 421,250 1.3
SOFTWARE
Analysts International Corp. .............................. US 11,050 381,225 1.1
COMPUTERS & PERIPHERALS
Roper Industries, Inc. .................................... US 12,600 355,950 1.1
INSTRUMENTATION & TEST
Pegasystems, Inc.-/- ...................................... US 16,000 323,000 1.0
SOFTWARE
Integrated Circuit Systems, Inc.-/- ....................... US 10,900 310,650 0.9
SEMICONDUCTORS
MRV Communications, Inc.-/- ............................... US 12,900 307,988 0.9
TELECOM TECHNOLOGY
Ciber, Inc.-/- ............................................ US 4,800 278,400 0.8
COMPUTERS & PERIPHERALS
Inacom Corp.-/- ........................................... US 9,300 260,981 0.8
COMPUTERS & PERIPHERALS
Peerless Systems Corp.-/- ................................. US 18,500 238,188 0.7
SOFTWARE
Metro Information Services, Inc.-/- ....................... US 7,700 213,675 0.6
COMPUTERS & PERIPHERALS
Aspect Development, Inc.-/- ............................... US 3,400 176,800 0.5
SOFTWARE
Logility, Inc.-/- ......................................... US 18,100 176,475 0.5
SOFTWARE
Cirrus Logic, Inc.-/- ..................................... US 15,800 167,875 0.5
SEMICONDUCTORS
Pericom Semiconductor Corp.-/- ............................ US 15,400 112,613 0.3
SEMICONDUCTORS
FactSet Research Systems, Inc.-/- ......................... US 2,300 70,725 0.2
COMPUTERS & PERIPHERALS
Aehr Test Systems-/- ...................................... US 8,400 67,200 0.2
INSTRUMENTATION & TEST
PRI Automation, Inc.-/- ................................... US 2,000 57,750 0.2
COMPUTERS & PERIPHERALS
Excel Switching Corp.-/- .................................. US 2,800 50,050 0.2
TELECOM TECHNOLOGY
------------
4,428,995
------------
Finance (9.3%)
AmeriCredit Corp.-/- ...................................... US 15,100 418,081 1.2
CONSUMER FINANCE
Camden Property Trust ..................................... US 13,400 415,400 1.2
REAL ESTATE INVESTMENT TRUST
LaSalle Partners, Inc.-/- ................................. US 11,500 409,688 1.2
REAL ESTATE
Affiliated Managers Group, Inc.-/- ........................ US 13,000 377,000 1.1
INVESTMENT MANAGEMENT
</TABLE>
The accompanying notes are an integral part of the financial statements.
F4
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND - CONSOLIDATED
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>
Finance (Continued)
ARM Financial Group, Inc. "A"-/- .......................... US 13,200 $ 348,150 1.0
INVESTMENT MANAGEMENT
HomeSide, Inc.-/- ......................................... US 12,000 330,750 1.0
SAVINGS & LOANS
Stirling Cooke Brown Holdings Ltd.-/- ..................... US 8,900 218,050 0.6
INSURANCE - PROPERTY-CASUALTY
Resource America, Inc. "A" ................................ US 3,900 178,425 0.5
CONSUMER FINANCE
American Capital Strategies Ltd. .......................... US 9,800 177,625 0.5
CONSUMER FINANCE
PAULA Financial-/- ........................................ US 5,800 133,400 0.4
REAL ESTATE
Tower Realty Trust, Inc. .................................. US 5,100 125,588 0.4
REAL ESTATE INVESTMENT TRUST
Citizens National Bank of Texas ........................... US 6,600 82,500 0.2
BANKS-REGIONAL
------------
3,214,657
------------
Capital Goods (7.4%)
General Cable Corp.-/- .................................... US 17,500 633,281 1.9
INDUSTRIAL COMPONENTS
Knoll, Inc.-/- ............................................ US 18,400 591,100 1.8
OFFICE EQUIPMENT
Chart Industries, Inc. .................................... US 17,100 390,094 1.2
MACHINERY & ENGINEERING
OSI Systems, Inc.-/- ...................................... US 22,300 273,175 0.8
ELECTRICAL PLANT/EQUIPMENT
Wyman-Gordon Co.-/- ....................................... US 13,700 268,863 0.8
ELECTRICAL PLANT/EQUIPMENT
The Middleby Corp.-/- ..................................... US 20,700 161,719 0.5
MACHINERY & ENGINEERING
Power-One, Inc.-/- ........................................ US 9,000 123,750 0.4
INDUSTRIAL COMPONENTS
------------
2,441,982
------------
Energy (5.4%)
Newfield Exploration Co.-/- ............................... US 27,900 650,419 1.9
OIL
Hanover Compressor Co.-/- ................................. US 27,800 556,000 1.7
ENERGY EQUIPMENT & SERVICES
Pride International, Inc.-/- .............................. US 10,400 262,600 0.8
OIL
ADAC Laboratories-/- ...................................... US 13,100 258,725 0.8
ENERGY EQUIPMENT & SERVICES
Dril-Quip, Inc.-/- ........................................ US 2,000 70,250 0.2
ENERGY EQUIPMENT & SERVICES
------------
1,797,994
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F5
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND - CONSOLIDATED
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>
Consumer Non-Durables (4.2%)
JLK Direct Distribution, Inc. "A"-/- ...................... US 20,200 $ 565,600 1.7
OTHER CONSUMER GOODS
DM Management Co.-/- ...................................... US 20,900 326,563 1.0
OTHER CONSUMER GOODS
GameTech International, Inc.-/- ........................... US 30,100 323,575 1.0
RECREATION
Meadowcraft, Inc.-/- ...................................... US 13,600 159,800 0.5
HOUSEHOLD PRODUCTS
------------
1,375,538
------------
Materials/Basic Industry (3.9%)
Cambrex Corp. ............................................. US 10,100 464,600 1.4
CHEMICALS
Gibraltar Steel Corp.-/- .................................. US 22,600 446,350 1.3
METALS - STEEL
Crompton & Knowles Corp. .................................. US 12,700 336,550 1.0
CHEMICALS
Steel Dynamics, Inc.-/- ................................... US 4,200 67,200 0.2
METALS - STEEL
------------
1,314,700
------------
Consumer Durables (3.8%)
Avis Rent A Car, Inc.-/- .................................. US 17,000 542,938 1.6
AUTOMOBILES
Tower Automotive, Inc.-/- ................................. US 10,800 454,275 1.3
AUTO PARTS
Aftermarket Technology Corp.-/- ........................... US 17,400 315,375 0.9
AUTO PARTS
------------
1,312,588
------------
Multi-Industry/Miscellaneous (2.5%)
Cornell Corrections, Inc.-/- .............................. US 23,500 487,625 1.4
MISCELLANEOUS
Equity Corporation International-/- ....................... US 15,600 360,750 1.1
MISCELLANEOUS
------------
848,375
------------ -----
TOTAL EQUITY INVESTMENTS (cost $31,799,304) ................. 32,695,503 97.0
------------ -----
</TABLE>
The accompanying notes are an integral part of the financial statements.
F6
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND - CONSOLIDATED
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 $905,000 U.S. Treasury Notes, 5.75% due
12/31/98 (market value of collateral is $905,993,
including accrued interest). (cost $884,000) ............ $ 884,000 2.6
------------ -----
TOTAL INVESTMENTS (cost $32,683,304) * ..................... 33,579,503 99.6
Other Assets and Liabilities ................................ 131,240 0.4
------------ -----
NET ASSETS .................................................. $ 33,710,743 100.0
------------ -----
------------ -----
</TABLE>
- --------------
-/- Non-income producing security.
{\/} U.S. currency denominated.
* For Federal income tax purposes, cost is $32,768,260 and
appreciation (depreciation) is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $ 2,952,339
Unrealized depreciation: (2,141,096)
-------------
Net unrealized appreciation: $ 811,243
-------------
-------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F7
<PAGE>
GT GLOBAL AMERICA MID CAP 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 (36.5%)
Cendant Corp.-/- .......................................... US 924,232 $ 31,770,471 6.2
RETAILERS-OTHER
Snyder Communications, Inc.-/- ............................ US 571,700 20,867,050 4.1
CONSUMER SERVICES
Outdoor Systems, Inc.-/- .................................. US 477,325 18,317,347 3.6
BUSINESS & PUBLIC SERVICES
Signature Resorts, Inc.-/- ................................ US 789,900 17,279,063 3.4
LEISURE & TOURISM
Hilton Hotels Corp. ....................................... US 502,100 14,937,475 2.9
LEISURE & TOURISM
U.S. Office Products Co.-/- ............................... US 734,650 14,417,506 2.8
CONSUMER SERVICES
Caribiner International, Inc.-/- .......................... US 320,500 14,262,250 2.8
CONSUMER SERVICES
Universal Outdoor Holdings, Inc.-/- ....................... US 264,900 13,774,800 2.7
BUSINESS & PUBLIC SERVICES
Mirage Resorts, Inc.-/- ................................... US 381,900 8,688,225 1.7
LEISURE & TOURISM
Nextel Communications, Inc. "A"-/- ........................ US 303,300 7,885,800 1.5
WIRELESS COMMUNICATIONS
Valassis Communications, Inc.-/- .......................... US 209,400 7,747,800 1.5
BROADCASTING & PUBLISHING
Paychex, Inc. ............................................. US 140,200 7,097,625 1.4
CONSUMER SERVICES
Service Corporation International ......................... US 137,500 5,078,906 1.0
CONSUMER SERVICES
Wolverine World Wide, Inc. ................................ US 201,600 4,561,200 0.9
RETAILERS-APPAREL
------------
186,685,518
------------
Finance (14.6%)
Conseco, Inc. ............................................. US 348,200 15,821,338 3.1
INSURANCE - MULTI-LINE
GreenPoint Financial Corp. ................................ US 154,100 11,181,881 2.2
BANKS-REGIONAL
CMAC Investment Corp. ..................................... US 149,700 9,038,138 1.8
INSURANCE - PROPERTY-CASUALTY
National Commerce Bancorp. ................................ US 252,800 8,911,200 1.7
OTHER FINANCIAL
Exel Ltd. ................................................. US 120,500 7,636,688 1.5
INSURANCE - PROPERTY-CASUALTY
The CIT Group, Inc. "A"-/- ................................ US 228,400 7,365,900 1.4
CONSUMER FINANCE
Consolidated Capital Corp.-/- ............................. US 323,500 6,571,094 1.3
INVESTMENT MANAGEMENT
Student Loan Marketing Association ........................ US 42,800 5,954,550 1.2
OTHER FINANCIAL
Ace Ltd. .................................................. US 20,100 1,939,650 0.4
INSURANCE - PROPERTY-CASUALTY
------------
74,420,439
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F8
<PAGE>
GT GLOBAL AMERICA MID CAP 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>
Health Care (11.1%)
AmeriSource Health Corp. "A"-/- ........................... US 214,600 $ 12,607,750 2.5
HEALTH CARE SERVICES
McKesson Corp. ............................................ US 114,600 12,398,288 2.4
HEALTH CARE SERVICES
HBO & Co. ................................................. US 203,800 9,782,400 1.9
HEALTH CARE SERVICES
Quintiles Transnational Corp.-/- .......................... US 246,100 9,413,325 1.8
HEALTH CARE SERVICES
Covance, Inc.-/- .......................................... US 337,000 6,697,875 1.3
HEALTH CARE SERVICES
Guidant Corp. ............................................. US 97,400 6,063,150 1.2
MEDICAL TECHNOLOGY & SUPPLIES
------------
56,962,788
------------
Technology (11.1%)
PeopleSoft, Inc.-/- ....................................... US 380,600 14,843,400 2.9
SOFTWARE
Sterling Commerce, Inc.-/- ................................ US 365,200 14,037,375 2.7
SOFTWARE
Ciena Corp.-/- ............................................ US 186,700 11,412,038 2.2
TELECOM TECHNOLOGY
CBT Group PLC - ADR-/- {\/} ............................... IRE 110,800 9,099,450 1.8
COMPUTERS & PERIPHERALS
Pegasystems, Inc.-/- ...................................... US 371,300 7,495,619 1.5
SOFTWARE
------------
56,887,882
------------
Materials/Basic Industry (9.7%)
Crompton & Knowles Corp. .................................. US 529,200 14,023,800 2.7
CHEMICALS
International Specialty Products, Inc.-/- ................. US 834,000 12,457,875 2.4
CHEMICALS
Sealed Air Corp.-/- ....................................... US 201,000 12,411,750 2.4
PLASTICS & RUBBER
J. Ray McDermott S.A.-/- .................................. US 263,900 11,347,700 2.2
BUILDING MATERIALS & COMPONENTS
------------
50,241,125
------------
Energy (8.6%)
Cooper Cameron Corp.-/- ................................... US 170,500 10,400,500 2.0
ENERGY EQUIPMENT & SERVICES
BJ Services Co.-/- ........................................ US 120,600 8,675,663 1.7
ENERGY EQUIPMENT & SERVICES
Anadarko Petroleum Corp. .................................. US 138,900 8,429,494 1.7
OIL
Smith International, Inc.-/- .............................. US 135,600 8,322,450 1.6
ENERGY EQUIPMENT & SERVICES
</TABLE>
The accompanying notes are an integral part of the financial statements.
F9
<PAGE>
GT GLOBAL AMERICA MID CAP 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>
Energy (Continued)
Santa Fe International Corp. .............................. US 198,200 $ 8,064,263 1.6
ENERGY EQUIPMENT & SERVICES
------------
43,892,370
------------
Consumer Durables (4.1%)
Avis Rent A Car, Inc.-/- .................................. US 326,900 10,440,369 2.0
AUTOMOBILES
Hertz Corp. "A" ........................................... US 152,500 6,138,125 1.2
AUTOMOBILES
Dollar Thrifty Automotive Group, Inc.-/- .................. US 235,000 4,817,500 0.9
AUTOMOBILES
------------
21,395,994
------------
Multi-Industry/Miscellaneous (2.4%)
Corrections Corporation of America-/- ..................... US 324,500 12,026,781 2.4
------------
MISCELLANEOUS
Consumer Non-Durables (1.3%)
International Home Foods, Inc.-/- ......................... US 240,400 6,731,200 1.3
------------
FOOD
Capital Goods (1.3%)
U.S. Filter Corp.-/- ...................................... US 213,100 6,379,681 1.3
ENVIRONMENTAL
------------ -----
TOTAL EQUITY INVESTMENTS (cost $450,142,030) ................ 515,623,778 100.7
------------ -----
<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 $20,985,000 U.S. Treasury Notes, 5.75%
due 12/31/98 (market value of collateral is $21,004,684,
including accrued interest).
(cost $20,589,000) ...................................... 20,589,000 4.0
------------ -----
TOTAL INVESTMENTS (cost $470,731,030) * .................... 536,212,778 104.7
Other Assets and Liabilities ................................ (23,930,616) (4.7)
------------ -----
NET ASSETS .................................................. $512,282,162 100.0
------------ -----
------------ -----
</TABLE>
- --------------
-/- Non-income producing security.
{\/} U.S. currency denominated.
* For Federal income tax purposes, cost is $472,057,961 and
appreciation (depreciation) is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $ 72,285,341
Unrealized depreciation: (8,130,524)
-------------
Net unrealized appreciation: $ 64,154,817
-------------
-------------
</TABLE>
Abbreviation:
ADR--American Depositary Receipt
The accompanying notes are an integral part of the financial statements.
F10
<PAGE>
GT GLOBAL AMERICA VALUE FUND - CONSOLIDATED
PORTFOLIO OF INVESTMENTS
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Finance (36.6%)
Student Loan Marketing Association ........................ US 5,175 $ 719,972 2.9
OTHER FINANCIAL
Travelers Group, Inc. ..................................... US 11,850 638,419 2.6
INSURANCE - MULTI-LINE
Allstate Corp. ............................................ US 6,875 624,766 2.5
INSURANCE - MULTI-LINE
Chase Manhattan Corp. ..................................... US 5,675 621,413 2.5
BANKS-MONEY CENTER
Household International, Inc. ............................. US 4,600 586,779 2.4
OTHER FINANCIAL
NationsBank Corp. ......................................... US 9,600 583,800 2.3
BANKS-SUPER REGIONAL
First Union Corp. (N.C.) .................................. US 11,300 579,125 2.3
BANKS-SUPER REGIONAL
Exel Ltd. ................................................. US 8,900 564,038 2.3
INSURANCE - PROPERTY-CASUALTY
BankAmerica Corp. ......................................... US 7,250 529,250 2.1
BANKS-SUPER REGIONAL
Citicorp .................................................. US 4,100 518,394 2.1
BANKS-MONEY CENTER
Fleet Financial Group, Inc. ............................... US 5,800 434,638 1.8
BANKS-SUPER REGIONAL
GreenPoint Financial Corp. ................................ US 5,900 428,119 1.7
BANKS-REGIONAL
Norwest Corp. ............................................. US 10,950 422,944 1.7
BANKS-REGIONAL
Equity Office Properties Trust ............................ US 9,700 306,156 1.2
REAL ESTATE INVESTMENT TRUST
Crescent Real Estate Equities Co. ......................... US 7,200 283,500 1.1
REAL ESTATE INVESTMENT TRUST
Tower Realty Trust, Inc. .................................. US 11,100 273,338 1.1
REAL ESTATE INVESTMENT TRUST
Patriot American Hospitality, Inc. ........................ US 9,198 265,017 1.1
REAL ESTATE INVESTMENT TRUST
Equity Residential Property Trust ......................... US 4,875 246,492 1.0
REAL ESTATE INVESTMENT TRUST
Highwoods Properties, Inc. ................................ US 6,425 238,930 1.0
REAL ESTATE INVESTMENT TRUST
Felcor Suite Hotels, Inc. ................................. US 6,025 213,888 0.9
REAL ESTATE INVESTMENT TRUST
------------
9,078,978
------------
Energy (16.4%)
McDermott International, Inc. ............................. US 13,900 509,088 2.0
ENERGY EQUIPMENT & SERVICES
Mobil Corp. ............................................... US 6,300 454,781 1.8
OIL
Amerada Hess Corp. ........................................ US 8,025 440,372 1.8
OIL
</TABLE>
The accompanying notes are an integral part of the financial statements.
F11
<PAGE>
GT GLOBAL AMERICA VALUE FUND - CONSOLIDATED
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>
Energy (Continued)
Tosco Corp. ............................................... US 10,600 $ 400,813 1.6
GAS PRODUCTION & DISTRIBUTION
Unocal Corp. .............................................. US 9,800 380,363 1.5
OIL
Ultramar Diamond Shamrock Corp. ........................... US 11,925 380,109 1.5
OIL
Pinnacle West Capital Corp. ............................... US 8,025 340,059 1.4
ELECTRICAL & GAS UTILITIES
Texaco, Inc. .............................................. US 5,850 318,094 1.3
OIL
Edison International ...................................... US 10,300 280,031 1.1
ELECTRICAL & GAS UTILITIES
Central & South West Corp. ................................ US 8,700 235,444 1.0
ELECTRICAL & GAS UTILITIES
GPU, Inc. ................................................. US 5,225 220,103 0.9
ELECTRICAL & GAS UTILITIES
CMS Energy Corp. .......................................... US 2,550 112,359 0.5
ELECTRICAL & GAS UTILITIES
------------
4,071,616
------------
Services (14.5%)
Bell Atlantic Corporation ................................. US 7,500 682,500 2.8
TELEPHONE - REGIONAL/LOCAL
Federated Department Stores, Inc.-/- ...................... US 15,800 680,388 2.7
RETAILERS-APPAREL
U.S. West, Inc. ........................................... US 12,500 564,063 2.3
TELEPHONE - REGIONAL/LOCAL
Burlington Northern, Inc. ................................. US 6,000 557,625 2.3
TRANSPORTATION - ROAD & RAIL
The Limited, Inc. ......................................... US 19,825 505,538 2.0
RETAILERS-APPAREL
Time Warner, Inc. ......................................... US 5,525 342,550 1.4
BROADCASTING & PUBLISHING
ITT Corp.-/- .............................................. US 3,100 256,913 1.0
LEISURE & TOURISM
------------
3,589,577
------------
Materials/Basic Industry (11.2%)
Imperial Chemical Industries PLC - ADR{\/} ................ UK 10,900 707,819 2.9
CHEMICALS
Hercules, Inc. ............................................ US 8,075 404,255 1.6
CHEMICALS
Stone Container Corp.-/- .................................. US 38,600 402,888 1.6
PAPER/PACKAGING
Crompton & Knowles Corp. .................................. US 14,400 381,600 1.5
CHEMICALS
W.R. Grace & Co. .......................................... US 4,225 339,848 1.4
CHEMICALS
Aluminum Company of America (ALCOA) ....................... US 4,400 309,650 1.2
METALS - NON-FERROUS
</TABLE>
The accompanying notes are an integral part of the financial statements.
F12
<PAGE>
GT GLOBAL AMERICA VALUE FUND - CONSOLIDATED
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>
Materials/Basic Industry (Continued)
PPG Industries, Inc. ...................................... US 4,200 $ 239,925 1.0
CHEMICALS
------------
2,785,985
------------
Consumer Durables (6.4%)
Ford Motor Co. ............................................ US 14,650 713,272 2.9
AUTOMOBILES
Chrysler Corp. ............................................ US 12,725 447,761 1.8
AUTOMOBILES
Dollar Thrifty Automotive Group, Inc.-/- .................. US 20,000 410,000 1.7
AUTOMOBILES
------------
1,571,033
------------
Consumer Non-Durables (5.2%)
RJR Nabisco Holdings Corp. ................................ US 16,875 632,813 2.5
TOBACCO
Philip Morris Cos., Inc. .................................. US 8,550 387,422 1.6
TOBACCO
Fruit of the Loom, Inc.-/- ................................ US 10,700 274,188 1.1
TEXTILES & APPAREL
------------
1,294,423
------------
Technology (4.9%)
International Business Machines Corp. ..................... US 7,000 731,938 2.9
COMPUTERS & PERIPHERALS
Compaq Computer Corp.-/- .................................. US 8,950 505,116 2.0
COMPUTERS & PERIPHERALS
------------
1,237,054
------------
Capital Goods (1.2%)
Textron, Inc. ............................................. US 4,800 300,000 1.2
AEROSPACE/DEFENSE
------------ -----
TOTAL EQUITY INVESTMENTS (cost $21,927,922) ................. 23,928,666 96.4
------------ -----
</TABLE>
The accompanying notes are an integral part of the financial statements.
F13
<PAGE>
GT GLOBAL AMERICA VALUE FUND - CONSOLIDATED
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 $1,130,000 U.S. Treasury Notes, 5.75%
due 12/31/98 (market value of collateral is $1,131,060,
including accrued interest).
(cost $1,104,000) ....................................... $ 1,104,000 4.4
------------ -----
TOTAL INVESTMENTS (cost $23,031,922) * ..................... 25,032,666 100.8
Other Assets and Liabilities ................................ (208,051) (0.8)
------------ -----
NET ASSETS .................................................. $ 24,824,615 100.0
------------ -----
------------ -----
</TABLE>
- --------------
-/- Non-income producing security.
{\/} U.S. currency denominated.
* For Federal income tax purposes, cost is $23,069,999 and
appreciation (depreciation) is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $ 2,281,685
Unrealized depreciation: (319,018)
-------------
Net unrealized appreciation: $ 1,962,667
-------------
-------------
</TABLE>
Abbreviation:
ADR--American Depositary Receipt
The accompanying notes are an integral part of the financial statements.
F14
<PAGE>
GT GLOBAL AMERICA FUNDS
STATEMENTS OF ASSETS
AND LIABILITIES
December 31, 1997
- --------------------------------------------------------------------------------
<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 $32,683,304; $470,731,030;
and $23,031,922, respectively) (Note 1)............................ $33,579,503 $536,212,778 $25,032,666
U.S. currency....................................................... 927 295 988
Dividends receivable................................................ 10,766 125,429 42,920
Interest receivable................................................. 142 3,317 177
Receivable for Fund shares sold..................................... 358,830 628,959 306,827
Receivable for securities sold...................................... 887,683 -- 90,237
Unamortized organizational costs (Note 1)........................... 49,458 -- 49,458
-------------- ------------- --------------
Total assets...................................................... 34,887,309 536,970,778 25,523,273
-------------- ------------- --------------
Liabilities:
Payable for custodian fees.......................................... 2,924 25,081 2,892
Payable for Directors' and Trustees' fees and expenses (Note 2)..... 5,310 5,062 5,725
Payable for fund accounting fees (Note 2)........................... 1,488 9,945 652
Payable for Fund shares repurchased................................. 716,716 3,845,129 356,809
Payable for investment management and administration fees (Note
2)................................................................. 19,707 306,242 417
Payable for printing and postage expenses........................... 16,077 31,815 16,948
Payable for professional fees....................................... 15,217 27,546 19,018
Payable for registration and filing fees............................ 15,960 3,900 8,146
Payable for securities purchased.................................... 348,610 19,887,085 263,514
Payable for service and distribution expenses (Note 2).............. 21,124 285,634 15,365
Payable for transfer agent fees (Note 2)............................ 11,763 231,778 5,430
Other accrued expenses.............................................. 1,570 29,399 3,642
-------------- ------------- --------------
Total liabilities................................................. 1,176,466 24,688,616 698,558
Minority interest (Notes 1 & 2)..................................... 100 -- 100
-------------- ------------- --------------
Net assets............................................................ $33,710,743 $512,282,162 $24,824,615
-------------- ------------- --------------
-------------- ------------- --------------
Class A:
Net asset value and redemption price per share ($10,896,107 DIVIDED BY
763,367;
$255,674,204 DIVIDED BY 12,169,079; and $7,668,100 DIVIDED BY 444,643
shares outstanding, respectively) ................................... $ 14.27 $ 21.01 $ 17.25
-------------- ------------- --------------
-------------- ------------- --------------
Maximum offering price per share (100/95.25 of $14.27; 100/95.25 of
$21.01; and 100/95.25 of $17.25, respectively) *..................... $ 14.98 $ 22.06 $ 18.11
-------------- ------------- --------------
-------------- ------------- --------------
Class B:+
Net asset value and offering price per share $21,222,157 DIVIDED BY
1,509,212; $255,468,031 DIVIDED BY 12,580,716; and $16,717,458
DIVIDED BY 981,035 shares outstanding, respectively)................. $ 14.06 $ 20.31 $ 17.04
-------------- ------------- --------------
-------------- ------------- --------------
Advisor Class:
Net asset value and offering price per share, and redemption price per
share ($1,592,479 DIVIDED BY 110,687; $1,139,927 DIVIDED BY 54,025;
and $439,057 DIVIDED BY 25,283 shares outstanding, respectively)..... $ 14.39 $ 21.10 $ 17.37
-------------- ------------- --------------
-------------- ------------- --------------
Net assets consist of:
Paid in capital (Note 4)............................................ $31,557,971 $430,679,692 $22,421,981
Accumulated net realized gain on investments........................ 1,256,573 16,120,722 401,890
Net unrealized appreciation of investments.......................... 896,199 65,481,748 2,000,744
-------------- ------------- --------------
Total -- representing net assets applicable to capital shares
outstanding.......................................................... $33,710,743 $512,282,162 $24,824,615
-------------- ------------- --------------
-------------- ------------- --------------
<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.
F15
<PAGE>
GT GLOBAL AMERICA FUNDS
STATEMENTS OF OPERATIONS
Year ended December 31, 1997
- --------------------------------------------------------------------------------
<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)
Dividend income.............................................. $ 35,957 $2,095,256 $ 357,943
Interest income.............................................. 95,213 519,576 46,139
------------- ------------ -------------
Total investment income.................................... 131,170 2,614,832 404,082
------------- ------------ -------------
Expenses:
Investment management and administration fees (Note 2)....... 184,004 3,999,732 113,543
Amortization of organization costs (Note 1).................. 17,702 -- 17,702
Custodian Fees............................................... 21,876 137,385 9,431
Directors' and Trustees' fees and expenses (Note 2).......... 14,813 12,580 12,042
Fund accounting fees (Note 2)................................ 6,379 142,274 3,938
Printing and postage expenses................................ 61,435 102,242 51,829
Professional fees............................................ 63,468 72,533 71,745
Registration and filing fees................................. 72,360 73,688 65,399
Service and distribution expenses: (Note 2)
Class A.................................................... 33,776 958,593 17,701
Class B.................................................... 148,043 2,781,908 102,587
Transfer agent fees (Note 2)................................. 102,790 1,545,314 59,946
Other expenses (Note 1)...................................... 5,430 156,232 9,271
------------- ------------ -------------
Total expenses before reductions and reimbursement......... 732,076 9,982,481 535,134
------------- ------------ -------------
Expenses reimbursed by Chancellor LGT Asset Management,
Inc. (Note 2)........................................... (131,297) -- (151,962)
Expense reductions (Notes 1 & 5)......................... (20,049) (600,349) (1,332)
------------- ------------ -------------
Total net expenses......................................... 580,730 9,382,132 381,840
------------- ------------ -------------
Net investment income (loss)................................... (449,560) (6,767,300) 22,242
------------- ------------ -------------
Net realized and unrealized gain on investments: (Note 1)
Net realized gain on investments............................. 2,524,251 91,288,360 1,352,859
Net change in unrealized appreciation (depreciation) of
investments................................................. 1,674,235 (23,043,968) 2,016,032
------------- ------------ -------------
Net realized and unrealized gain on investments................ 4,198,486 68,244,392 3,368,891
------------- ------------ -------------
Net increase in net assets resulting from operations........... $ 3,748,926 $61,477,092 $ 3,391,133
------------- ------------ -------------
------------- ------------ -------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F16
<PAGE>
GT GLOBAL AMERICA FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GT GLOBAL
-----------------------------------------------------------------------------
AMERICA SMALL CAP AMERICA MID CAP AMERICA VALUE
GROWTH FUND-CONSOLIDATED GROWTH FUND FUND-CONSOLIDATED
------------------------ ------------------------- ------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER DECEMBER DECEMBER YEAR ENDED DECEMBER DECEMBER
31, 31, 31, DECEMBER 31, 31, 31,
1997 1996 1997 1996 1997 1996
----------- ----------- ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets
Operations:
Net investment income (loss).......... $(449,560) $(110,516) $(6,767,300) $ (1,367,346) $ 22,242 $ (30,160)
Net realized gain on investments and
foreign currency transactions........ 2,524,251 1,264,689 91,288,360 24,339,369 1,352,859 733,904
Net change in unrealized appreciation
(depreciation) of investments........ 1,674,235 (782,829) (23,043,968) 76,318,599 2,016,032 (69,965)
----------- ----------- ----------- ------------ ----------- -----------
Net increase in net assets resulting
from operations.................... 3,748,926 371,344 61,477,092 99,290,622 3,391,133 633,779
----------- ----------- ----------- ------------ ----------- -----------
Class A:
Distributions to shareholders: (Note 1)
From net investment income............ -- -- -- -- (12,256) --
From net realized gain on
investments.......................... (213,287) (564,752) (27,861,047) (21,518,831) (482,262) (7,007)
Class B:
Distributions to shareholders: (Note 1)
From net investment income............ -- -- -- -- -- --
From net realized gain on
investments.......................... (410,555) (727,944) (29,550,073) (20,232,121) (1,128,861) (14,950)
Advisor Class:
Distributions to shareholders: (Note 1)
From net investment income............ -- -- -- -- (1,610) --
From net realized gain on
investments.......................... (32,021) (28,106) (120,835) (167,680) (30,657) (443)
----------- ----------- ----------- ------------ ----------- -----------
Total distributions................. (655,863) (1,320,802) (57,531,955) (41,918,632) (1,655,646) (22,400)
----------- ----------- ----------- ------------ ----------- -----------
Capital share transactions: (Note 4)
Increase from capital shares sold and
reinvested........................... 60,411,522 43,976,336 783,255,935 2,122,781,710 33,884,259 11,770,124
Decrease from capital shares
repurchased.......................... (49,371,158) (27,455,528) (954,921,988) (2,246,270,951) (19,018,130) (6,364,460)
----------- ----------- ----------- ------------ ----------- -----------
Net increase (decrease) from capital
share transactions................. 11,040,364 16,520,808 (171,666,053) (123,489,241) 14,866,129 5,405,664
----------- ----------- ----------- ------------ ----------- -----------
Total increase (decrease) in net
assets................................. 14,133,427 15,571,350 (167,720,916) (66,117,251) 16,601,616 6,017,043
Net assets:
Beginning of year..................... 19,577,316 4,005,966 680,003,078 746,120,329 8,222,999 2,205,956
----------- ----------- ----------- ------------ ----------- -----------
End of year *........................ 3$3,710,743 1$9,577,316 $512,282,162 $680,003,078 2$4,824,615 $8,222,999
----------- ----------- ----------- ------------ ----------- -----------
----------- ----------- ----------- ------------ ----------- -----------
* Includes undistributed/accumulated
net investment income (loss) of...... $ -- $ -- $ -- $ -- $ -- $ --
----------- ----------- ----------- ------------ ----------- -----------
----------- ----------- ----------- ------------ ----------- -----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F17
<PAGE>
GT GLOBAL AMERICA FUNDS
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>
SMALL CAP GROWTH FUND
------------------------------------------
CLASS A
------------------------------------------
OCTOBER 18,
1995
(COMMENCEMENT
OF OPERATIONS)
YEAR ENDED YEAR ENDED TO DECEMBER
DECEMBER 31, DECEMBER 31, 31,
1997 (D) 1996 (D) 1995 (D)
------------ ------------ --------------
<S> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 12.52 $ 11.80 $ 11.43
------------ ------------ --------------
Income from investment operations:
Net investment income (loss).......... (0.18) ** (0.05) ** 0.04*
Net realized and unrealized gain on
investments.......................... 2.20 1.69 0.33
------------ ------------ --------------
Net increase from investment
operations......................... 2.02 1.64 0.37
------------ ------------ --------------
Distributions to shareholders:
From net realized gain on
investments.......................... (0.27) (0.92) --
------------ ------------ --------------
Total distributions................. (0.27) (0.92) --
------------ ------------ --------------
Net asset value, end of period.......... $ 14.27 $ 12.52 $ 11.80
------------ ------------ --------------
------------ ------------ --------------
Total investment return (c)............. 16.23 % 13.81 % 3.24 %(b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 10,896 $ 8,448 $ 1,931
Ratio of net investment income (loss) to
average net assets:
With expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc. (Notes 1, 2 & 5).... (1.40)% (0.38)% 1.68 %(a)
Without expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc...................... (2.00)% (1.47)% (20.52)%(a)
Ratio of expenses to average net assets:
With expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc. (Notes 1, 2 & 5).... 1.92 % 2.00 % 2.00 %(a)
Without expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc...................... 2.52 % 3.09 % 24.20 %(a)
Portfolio turnover rate+................ 233 % 150 % N/A
Average commission rate per share paid
on portfolio transactions+............. $ 0.0517 $ 0.0489 N/A
</TABLE>
- ----------------
(a) Annualized
(b) Not Annualized
(c) Total Investment Return does not include sales charges.
(d) Calculated based upon 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.
* * * Before reimbursement by Chancellor LGT Asset Management, Inc. the net
investment loss per share would have been $(0.25), $(0.33), and
$(0.21) for Class A, Class B, and Advisor Class, respectively, for the
year ended December 31, 1997.
+ 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.
N/A Not Applicable.
The accompanying notes are an integral part of the financial statements.
F18
<PAGE>
GT GLOBAL AMERICA FUNDS
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>
SMALL CAP GROWTH FUND
------------------------------------------
CLASS B
------------------------------------------
OCTOBER 18,
1995
(COMMENCEMENT
OF OPERATIONS)
YEAR ENDED YEAR ENDED TO DECEMBER
DECEMBER 31, DECEMBER 31, 31,
1997 (D) 1996 (D) 1995 (D)
------------ ------------ --------------
<S> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 12.42 $ 11.78 $ 11.43
------------ ------------ --------------
Income from investment operations:
Net investment income (loss).......... (0.26) ** (0.14) ** 0.02*
Net realized and unrealized gain on
investments.......................... 2.17 1.70 0.33
------------ ------------ --------------
Net increase from investment
operations......................... 1.91 1.56 0.35
------------ ------------ --------------
Distributions to shareholders:
From net realized gain on
investments.......................... (0.27) (0.92) --
------------ ------------ --------------
Total distributions................. (0.27) (0.92) --
------------ ------------ --------------
Net asset value, end of period.......... $ 14.06 $ 12.42 $ 11.78
------------ ------------ --------------
------------ ------------ --------------
Total investment return (c)............. 15.47 % 13.14 % 3.06 %(b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 21,222 $ 10,694 $ 2,024
Ratio of net investment income (loss) to
average net assets:
With expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc. (Notes 1, 2 & 5).... (2.05)% (1.03)% 1.03 %(a)
Without expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc...................... (2.65)% (2.12)% (21.17)%(a)
Ratio of expenses to average net assets:
With expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc. (Notes 1, 2 & 5).... 2.57 % 2.65 % 2.65 %(a)
Without expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc...................... 3.17 % 3.74 % 24.85 %(a)
Portfolio turnover rate+................ 233 % 150 % N/A
Average commission rate per share paid
on portfolio transactions+............. $ 0.0517 $ 0.0489 N/A
</TABLE>
- ----------------
(a) Annualized
(b) Not Annualized
(c) Total Investment Return does not include sales charges.
(d) Calculated based upon 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.
* * * Before reimbursement by Chancellor LGT Asset Management, Inc. the net
investment loss per share would have been $(0.25), $(0.33), and
$(0.21) for Class A, Class B, and Advisor Class, respectively, for the
year ended December 31, 1997.
+ 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.
N/A Not Applicable.
The accompanying notes are an integral part of the financial statements.
F19
<PAGE>
GT GLOBAL AMERICA FUNDS
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>
SMALL CAP GROWTH FUND
------------------------------------------
ADVISOR CLASS
------------------------------------------
OCTOBER 18,
1995
(COMMENCEMENT
OF OPERATIONS)
YEAR ENDED YEAR ENDED TO DECEMBER
DECEMBER 31, DECEMBER 31, 31,
1997 (D) 1996 (D) 1995 (D)
------------ ------------ --------------
<S> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 12.58 $ 11.81 $ 11.43
------------ ------------ --------------
Income from investment operations:
Net investment income (loss).......... (0.14) ** --** 0.05*
Net realized and unrealized gain on
investments.......................... 2.22 1.69 0.33
------------ ------------ --------------
Net increase from investment
operations......................... 2.08 1.69 0.38
------------ ------------ --------------
Distributions to shareholders:
From net realized gain on
investments.......................... (0.27) (0.92) --
------------ ------------ --------------
Total distributions................. (0.27) (0.92) --
------------ ------------ --------------
Net asset value, end of period.......... $ 14.39 $ 12.58 $ 11.81
------------ ------------ --------------
------------ ------------ --------------
Total investment return (c)............. 16.63 % 14.22 % 3.32 %(b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 1,592 $ 435 $ 52
Ratio of net investment income (loss) to
average net assets:
With expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc. (Notes 1, 2 & 5).... (1.05)% (0.03)% 2.03 %(a)
Without expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc...................... (1.65)% (1.12)% (20.17)%(a)
Ratio of expenses to average net assets:
With expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc. (Notes 1, 2 & 5).... 1.57 % 1.65 % 1.65 %(a)
Without expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc...................... 2.17 % 2.74 % 23.85 %(a)
Portfolio turnover rate+................ 233 % 150 % N/A
Average commission rate per share paid
on portfolio transactions+............. $ 0.0517 $ 0.0489 N/A
</TABLE>
- ----------------
(a) Annualized
(b) Not Annualized
(c) Total Investment Return does not include sales charges.
(d) Calculated based upon 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.
* * * Before reimbursement by Chancellor LGT Asset Management, Inc. the net
investment loss per share would have been $(0.25), $(0.33), and
$(0.21) for Class A, Class B, and Advisor Class, respectively, for the
year ended December 31, 1997.
+ 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.
N/A Not Applicable.
The accompanying notes are an integral part of the financial statements.
F20
<PAGE>
GT GLOBAL AMERICA FUNDS
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>
MID CAP GROWTH FUND
----------------------------------------------------------
CLASS A+
----------------------------------------------------------
YEAR ENDED DECEMBER 31,
----------------------------------------------------------
1997 1996 1995 1994 (D) 1993
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 20.77 $ 19.07 $ 17.69 $ 17.17 $ 17.12
---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income (loss).......... (0.20) 0.03 0.24 0.04 (0.21)
Net realized and unrealized gain on
investments.......................... 3.00 2.96 3.93 2.55 1.56
---------- ---------- ---------- ---------- ----------
Net increase from investment
operations......................... 2.80 2.99 4.17 2.59 1.35
---------- ---------- ---------- ---------- ----------
Distributions to shareholders:
From net investment income............ -- -- (0.21) (0.02) --
From net realized gain on
investments.......................... (2.56) (1.29) (2.58) (2.05) (1.30)
---------- ---------- ---------- ---------- ----------
Total distributions................. (2.56) (1.29) (2.79) (2.07) (1.30)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period.......... $ 21.01 $ 20.77 $ 19.07 $ 17.69 $ 17.17
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Total investment return (c)............. 14.05% 15.65% 23.23% 15.69% 8.3%
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 255,674 $ 343,427 $ 396,291 $ 196,937 $ 116,468
Ratio of net investment income (loss) to
average net assets:
With expense reductions (Notes 1 &
5)................................... (0.90)% 0.12% 1.24% 0.17% (0.7)%
Without expense reductions............ (1.01)% 0.07% N/A N/A N/A
Ratio of expenses to average net assets:
With expense reductions (Notes 1 &
5)................................... 1.37% 1.36% 1.46% 1.58% 1.6%
Without expense reductions............ 1.48% 1.41% N/A N/A N/A
Portfolio turnover rate++++............. 190% 253% 71% 102% 92%
Average commission rate per share paid
on portfolio transactions++++.......... $ 0.0574 $ 0.0536 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.
N/A Not Applicable.
The accompanying notes are an integral part of the financial statements.
F21
<PAGE>
GT GLOBAL AMERICA FUNDS
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>
MID CAP GROWTH FUND
-------------------------------------------------------------
CLASS B++
-------------------------------------------------------------
APRIL 1, 1993
YEAR ENDED DECEMBER 31, TO
---------------------------------------------- DECEMBER 31,
1997 1996 1995 1994 (D) 1993
---------- ---------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 20.28 $ 18.77 $ 17.50 $ 17.09 $ 15.90
---------- ---------- ---------- ---------- -------------
Income from investment operations:
Net investment income (loss).......... (0.34) (0.11) 0.10 (0.09) (0.29)
Net realized and unrealized gain on
investments.......................... 2.93 2.91 3.87 2.55 2.78
---------- ---------- ---------- ---------- -------------
Net increase from investment
operations......................... 2.59 2.80 3.97 2.46 2.49
---------- ---------- ---------- ---------- -------------
Distributions to shareholders:
From net investment income............ -- -- (0.12) -- --
From net realized gain on
investments.......................... (2.56) (1.29) (2.58) (2.05) (1.30)
---------- ---------- ---------- ---------- -------------
Total distributions................. (2.56) (1.29) (2.70) (2.05) (1.30)
---------- ---------- ---------- ---------- -------------
Net asset value, end of period.......... $ 20.31 $ 20.28 $ 18.77 $ 17.50 $ 17.09
---------- ---------- ---------- ---------- -------------
---------- ---------- ---------- ---------- -------------
Total investment return (c)............. 13.35% 14.82% 22.42% 15.06% 16.1%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 255,468 $ 334,590 $ 348,435 $ 80,060 $ 1,982
Ratio of net investment income (loss) to
average net assets:
With expense reductions (Notes 1 &
5)................................... (1.55)% (0.53)% 0.59% (0.48)% (1.3)%(a)
Without expense reductions............ (1.66)% (0.58)% N/A N/A N/A
Ratio of expenses to average net assets:
With expense reductions (Notes 1 &
5)................................... 2.02% 2.01% 2.11% 2.23% 2.2%(a)
Without expense reductions............ 2.13% 2.06% N/A N/A N/A
Portfolio turnover rate++++............. 190% 253% 71% 102% 92%
Average commission rate per share paid
on portfolio transactions++++.......... $ 0.0574 $ 0.0536 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.
N/A Not Applicable.
The accompanying notes are an integral part of the financial statements.
F22
<PAGE>
GT GLOBAL AMERICA FUNDS
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>
MID CAP GROWTH FUND
-----------------------------------------
ADVISOR CLASS+++
-----------------------------------------
JUNE 1, 1995
YEAR ENDED YEAR ENDED TO
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1995
------------ ------------ -------------
<S> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 20.76 $ 19.05 $ 20.61
------------ ------------ -------------
Income from investment operations:
Net investment income (loss).......... (0.15) 0.09 0.21
Net realized and unrealized gain on
investments.......................... 3.05 2.91 1.09
------------ ------------ -------------
Net increase from investment
operations......................... 2.90 3.00 1.30
------------ ------------ -------------
Distributions to shareholders:
From net investment income............ -- -- (0.28)
From net realized gain on
investments.......................... (2.56) (1.29) (2.58)
------------ ------------ -------------
Total distributions................. (2.56) (1.29) (2.86)
------------ ------------ -------------
Net asset value, end of period.......... $ 21.10 $ 20.76 $ 19.05
------------ ------------ -------------
------------ ------------ -------------
Total investment return (c)............. 14.54 % 15.72 % 6.01%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 1,140 $ 1,986 $ 1,394
Ratio of net investment income (loss) to
average net assets:
With expense reductions (Notes 1 &
5)................................... (0.55)% 0.47 % 1.59%(a)
Without expense reductions............ (0.66)% 0.42 % N/A
Ratio of expenses to average net assets:
With expense reductions (Notes 1 &
5)................................... 1.02 % 1.01 % 1.11%(a)
Without expense reductions............ 1.13 % 1.06 % N/A
Portfolio turnover rate++++............. 190 % 253 % 71%
Average commission rate per share paid
on portfolio transactions++++.......... $ 0.0574 $ 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.
N/A Not Applicable.
The accompanying notes are an integral part of the financial statements.
F23
<PAGE>
GT GLOBAL AMERICA FUNDS
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>
VALUE FUND
------------------------------------------
CLASS A
------------------------------------------
OCTOBER 18,
1995
(COMMENCEMENT
OF OPERATIONS)
YEAR ENDED YEAR ENDED TO DECEMBER
DECEMBER 31, DECEMBER 31, 31,
1997 (D) 1996 (D) 1995 (D)
------------ ------------ --------------
<S> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 14.65 $ 12.76 $ 11.43
------------ ------------ --------------
Income from investment operations:
Net investment income (loss).......... 0.09 * * (0.01) * * 0.03*
Net realized and unrealized gain on
investments.......................... 3.87 1.94 1.30
------------ ------------ --------------
Net increase from investment
operations......................... 3.96 1.93 1.33
------------ ------------ --------------
Distributions to shareholders:
From net investment income............ (0.03) -- --
From net realized gain on
investments.......................... (1.33) (0.04) --
------------ ------------ --------------
Total distributions................. (1.36) (0.04) --
------------ ------------ --------------
Net asset value, end of period.......... $ 17.25 $ 14.65 $ 12.76
------------ ------------ --------------
------------ ------------ --------------
Total investment return (c)............. 27.23 % 15.12 % 11.64 %(b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 7,668 $ 2,529 $ 870
Ratio of net investment income (loss) to
average net assets:
With expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc. (Notes 1, 2 & 5).... 0.56 % (0.10)% 1.10 %(a)
Without expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc...................... (0.42)% (3.61)% (47.44)%(a)
Ratio of expenses to average net assets:
With expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc. (Notes 1, 2 & 5).... 1.99 % 2.00 % 2.00 %(a)
Without expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc...................... 2.97 % 5.51 % 50.54 %(a)
Ratio of interest expense to average net
assets................................. 0.03 % N/A N/A
Portfolio turnover rate+................ 93 % 256 % N/A
Average commission rate per share paid
on portfolio transactions+............. $ 0.0278 $ 0.0551 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.
* 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.
* * * Before reimbursement by Chancellor LGT Asset Management, Inc. the net
investment gain (loss) per share would have been $(.07), $(.17), and
$(.01) for Class A, Class B, and Advisor Class, respectively, for the
year ended December 31, 1997.
+ 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.
N/A Not Applicable.
The accompanying notes are an integral part of the financial statements.
F24
<PAGE>
GT GLOBAL AMERICA FUNDS
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>
VALUE FUND
------------------------------------------
CLASS B
------------------------------------------
OCTOBER 18,
1995
(COMMENCEMENT
OF OPERATIONS)
YEAR ENDED YEAR ENDED TO DECEMBER
DECEMBER 31, DECEMBER 31, 31,
1997 (D) 1996 (D) 1995 (D)
------------ ------------ --------------
<S> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 14.54 $ 12.75 $ 11.43
------------ ------------ --------------
Income from investment operations:
Net investment income (loss).......... (0.01) ** (0.10) * * 0.01*
Net realized and unrealized gain on
investments.......................... 3.83 1.93 1.31
------------ ------------ --------------
Net increase from investment
operations......................... 3.82 1.83 1.32
------------ ------------ --------------
Distributions to shareholders:
From net investment income............ -- -- --
From net realized gain on
investments.......................... (1.32) (0.04) --
------------ ------------ --------------
Total distributions................. (1.32) (0.04) --
------------ ------------ --------------
Net asset value, end of period.......... $ 17.04 $ 14.54 $ 12.75
------------ ------------ --------------
------------ ------------ --------------
Total investment return (c)............. 26.44 % 14.35 % 11.55 %(b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 16,717 $ 5,503 $ 1,254
Ratio of net investment income (loss) to
average net assets:
With expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc. (Notes 1, 2 & 5).... (0.09)% (0.75)% 0.45 %(a)
Without expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc...................... (1.07)% (4.26)% (48.09)%(a)
Ratio of expenses to average net assets:
With expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc. (Notes 1, 2 & 5).... 2.64 % 2.65 % 2.65 %(a)
Without expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc...................... 3.62 % 6.16 % 51.19 %(a)
Ratio of interest expense to average net
assets................................. 0.03 % N/A N/A
Portfolio turnover rate+................ 93 % 256 % N/A
Average commission rate per share paid
on portfolio transactions+............. $ 0.0278 $ 0.0551 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.
* 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.
* * * Before reimbursement by Chancellor LGT Asset Management, Inc. the net
investment gain (loss) per share would have been $(.07), $(.17), and
$(.01) for Class A, Class B, and Advisor Class, respectively, for the
year ended December 31, 1997.
+ 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.
N/A Not Applicable.
The accompanying notes are an integral part of the financial statements.
F25
<PAGE>
GT GLOBAL AMERICA FUNDS
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>
VALUE FUND
------------------------------------------
ADVISOR CLASS
------------------------------------------
OCTOBER 18,
1995
(COMMENCEMENT
OF OPERATIONS)
YEAR ENDED YEAR ENDED TO DECEMBER
DECEMBER 31, DECEMBER 31, 31,
1997 (D) 1996 (D) 1995 (D)
------------ ------------ --------------
<S> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 14.72 $ 12.77 $ 11.43
------------ ------------ --------------
Income from investment operations:
Net investment income (loss).......... 0.15 * * 0.03* * 0.04*
Net realized and unrealized gain on
investments.......................... 3.91 1.96 1.30
------------ ------------ --------------
Net increase from investment
operations......................... 4.06 1.99 1.34
------------ ------------ --------------
Distributions to shareholders:
From net investment income............ (0.07) -- --
From net realized gain on
investments.......................... (1.34) (0.04) --
------------ ------------ --------------
Total distributions................. (1.41) (0.04) --
------------ ------------ --------------
Net asset value, end of period.......... $ 17.37 $ 14.72 $ 12.77
------------ ------------ --------------
------------ ------------ --------------
Total investment return (c)............. 27.78 % 15.58 % 11.72 %(b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 439 $ 191 $ 81
Ratio of net investment income (loss) to
average net assets:
With expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc. (Notes 1, 2 & 5).... 0.91 % 0.25 % 1.45 %(a)
Without expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc...................... (0.07)% (3.26)% (47.09)%(a)
Ratio of expenses to average net assets:
With expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc. (Notes 1, 2 & 5).... 1.64 % 1.65 % 1.65 %(a)
Without expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc...................... 2.62 % 5.16 % 50.19 %(a)
Ratio of interest expense to average net
assets................................. 0.03 % N/A N/A
Portfolio turnover rate+................ 93 % 256 % N/A
Average commission rate per share paid
on portfolio transactions+............. $ 0.0278 $ 0.0551 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.
* 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.
* * * Before reimbursement by Chancellor LGT Asset Management, Inc. the net
investment gain (loss) per share would have been $(.07), $(.17), and
$(.01) for Class A, Class B, and Advisor Class, respectively, for the
year ended December 31, 1997.
+ 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.
N/A Not Applicable.
The accompanying notes are an integral part of the financial statements.
F26
<PAGE>
GT GLOBAL AMERICA FUNDS
NOTES TO
FINANCIAL STATEMENTS
December 31, 1997
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
GT Global America Small Cap Growth Fund, GT Global America Mid 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, 1997, 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 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 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" herein after 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
F27
<PAGE>
GT GLOBAL AMERICA FUNDS
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 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, 1997, stocks with an aggregate value listed below were on loan
to brokers. The loans were secured by cash collateral received by the funds:
<TABLE>
<CAPTION>
DECEMBER 31, 1997 YEAR ENDED
-------------------------------- DECEMBER 31, 1997
AGGREGATE VALUE CASH -----------------
GT GLOBAL ON LOAN COLLATERAL FEES RECEIVED
- ---------------------------------------- --------------- -------------- -----------------
<S> <C> <C> <C>
America Small Cap Growth Fund........... $ 1,812,494 $ 1,869,550 $ 17,489
America Mid Cap Growth Fund............. 45,019,438 45,567,400 516,083
America Value Fund...................... 794,531 810,000 896
</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
Portfolios' 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
F28
<PAGE>
GT GLOBAL AMERICA FUNDS
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.
(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 ("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 Funds and
the GT Funds to borrow an aggregate maximum amount of $250,000,000. Each of
these three funds is limited to borrowing up to 33 1/3% of the value of each
Funds' total assets. The Funds had no loans outstanding at December 31, 1997.
For the year ended December 31, 1997, the average outstanding daily balance of
bank loans (based on the number of days the loans were outstanding) for GT
Global America Small Cap Growth Fund, GT Global America Mid Cap Growth Fund, and
GT Global America Value Fund was $101,429, $6,068,763, and $284,000 with a
weighted average interest rate of 6.34%, 6.33%, and 6.31%, respectively.
Interest expense for GT Global America Small Cap Growth Fund, GT Global America
Mid Cap Growth Fund, and GT Global America Value Fund for the year ended
December 31, 1997 was $125, $125,935, and $50, respectively, 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. 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, 1997, GT Global retained the
following sales charges: $5,417 for the GT Global America Small Cap Growth Fund,
$38,700 for the GT Global America Mid Cap Growth Fund, and $5,770 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 $23,780 for the year ended December 31, 1997 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, 1997, GT Global collected such CDSCs
in the amount of: $60,107 for the GT Global America Small Cap Growth Fund,
$2,316,997 for the GT Global America Mid Cap Growth Fund, and $55,700 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
F29
<PAGE>
GT GLOBAL AMERICA FUNDS
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 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.
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 1.75%, 2.40%, and 1.40% of the
average daily net assets of the Fund's Class A, Class B, 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 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, 1997, 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, 1997, 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 $1,037,388,895, $66,820,422 and $25,951,699, 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 $1,221,752,474, $55,910,483 and
$13,967,002, respectively. There were no purchases or sales of U.S. government
obligations by a Fund or Portfolio during the year.
F30
<PAGE>
GT GLOBAL AMERICA FUNDS
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
Funds were as follows:
CAPITAL SHARE TRANSACTIONS
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
<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............................. 2,067,494 $ 28,341,345 1,491,083 $ 20,216,595
Shares issued in connection with
reinvestment of distributions......... 14,194 195,720 39,998 505,573
------------ -------------- ------------ ---------------
2,081,688 28,537,065 1,531,081 20,722,168
Shares repurchased...................... (1,992,960) (27,546,271) (1,019,989) (13,880,892)
------------ -------------- ------------ ---------------
Net increase............................ 88,728 $ 990,794 511,092 $ 6,841,276
------------ -------------- ------------ ---------------
------------ -------------- ------------ ---------------
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996
---------------------------- -----------------------------
CLASS B SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------- ------------ -------------- ------------ ---------------
<S> <C> <C> <C> <C>
Shares sold............................. 2,192,656 $ 29,216,057 1,665,796 $ 22,115,741
Shares issued in connection with
reinvestment of distributions......... 26,438 359,234 52,848 663,246
------------ -------------- ------------ ---------------
2,219,094 29,575,291 1,718,644 22,778,987
Shares repurchased...................... (1,570,899) (20,624,826) (1,029,367) (13,501,795)
------------ -------------- ------------ ---------------
Net increase............................ 648,195 $ 8,950,465 689,277 $ 9,277,192
------------ -------------- ------------ ---------------
------------ -------------- ------------ ---------------
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996
---------------------------- -----------------------------
ADVISOR CLASS SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------- ------------ -------------- ------------ ---------------
<S> <C> <C> <C> <C>
Shares sold............................. 156,123 $ 2,292,127 33,521 $ 447,953
Shares issued in connection with
reinvestment of distributions......... 507 7,039 2,144 27,228
------------ -------------- ------------ ---------------
156,630 2,299,166 35,665 475,181
Shares repurchased...................... (80,540) (1,200,061) (5,440) (72,841)
------------ -------------- ------------ ---------------
Net increase............................ 76,090 $ 1,099,105 30,225 $ 402,340
------------ -------------- ------------ ---------------
------------ -------------- ------------ ---------------
</TABLE>
F31
<PAGE>
GT GLOBAL AMERICA FUNDS
GT GLOBAL AMERICA MID CAP GROWTH FUND
<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............................. 24,801,099 $ 522,081,212 89,962,964 $ 1,853,673,285
Shares issued in connection with
reinvestment of distributions......... 1,170,749 23,490,213 853,598 17,867,701
------------ -------------- ------------ ---------------
25,971,848 545,571,425 90,816,562 1,871,540,986
Shares repurchased...................... (30,338,852) (637,412,658) (95,061,922) (1,956,032,031)
------------ -------------- ------------ ---------------
Net decrease............................ (4,367,004) $ (91,841,233) (4,245,360) $ (84,491,045)
------------ -------------- ------------ ---------------
------------ -------------- ------------ ---------------
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996
---------------------------- -----------------------------
CLASS B SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------- ------------ -------------- ------------ ---------------
<S> <C> <C> <C> <C>
Shares sold............................. 9,218,434 $ 190,231,954 11,161,651 $ 224,412,718
Shares issued in connection with
reinvestment of distributions......... 1,240,395 24,063,873 803,575 16,429,676
------------ -------------- ------------ ---------------
10,458,829 214,295,827 11,965,226 240,842,394
Shares repurchased...................... (14,376,532) (293,260,545) (14,026,348) (280,392,879)
------------ -------------- ------------ ---------------
Net decrease............................ (3,917,703) $ (78,964,718) (2,061,122) $ (39,550,485)
------------ -------------- ------------ ---------------
------------ -------------- ------------ ---------------
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996
---------------------------- -----------------------------
ADVISOR CLASS SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------- ------------ -------------- ------------ ---------------
<S> <C> <C> <C> <C>
Shares sold............................. 1,056,271 $ 23,267,932 485,169 $ 10,230,701
Shares issued in connection with
reinvestment of distributions......... 5,993 120,751 8,013 167,629
------------ -------------- ------------ ---------------
1,062,264 23,388,683 493,182 10,398,330
Shares repurchased...................... (1,103,923) (24,248,785) (470,673) (9,846,041)
------------ -------------- ------------ ---------------
Net increase (decrease)................. (41,659) $ (860,102) 22,509 $ 552,289
------------ -------------- ------------ ---------------
------------ -------------- ------------ ---------------
</TABLE>
F32
<PAGE>
GT GLOBAL AMERICA FUNDS
GT GLOBAL AMERICA VALUE FUND
<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............................. 781,797 $ 13,117,280 392,444 $ 5,443,835
Shares issued in connection with
reinvestment of distributions......... 26,859 454,725 365 5,408
------------ -------------- ------------ ---------------
808,656 13,572,005 392,809 5,449,243
Shares repurchased...................... (536,657) (9,148,725) (288,378) (3,812,666)
------------ -------------- ------------ ---------------
Net increase............................ 271,999 $ 4,423,280 104,431 $ 1,636,577
------------ -------------- ------------ ---------------
------------ -------------- ------------ ---------------
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996
---------------------------- -----------------------------
CLASS B SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------- ------------ -------------- ------------ ---------------
<S> <C> <C> <C> <C>
Shares sold............................. 1,148,582 $ 19,043,834 445,266 $ 6,167,388
Shares issued in connection with
reinvestment of distributions......... 60,093 1,004,744 918 13,509
------------ -------------- ------------ ---------------
1,208,675 20,048,578 446,184 6,180,897
Shares repurchased...................... (606,167) (9,803,021) (166,052) (2,502,350)
------------ -------------- ------------ ---------------
Net increase............................ 602,508 $ 10,245,557 280,132 $ 3,678,547
------------ -------------- ------------ ---------------
------------ -------------- ------------ ---------------
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996
---------------------------- -----------------------------
ADVISOR CLASS SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------- ------------ -------------- ------------ ---------------
<S> <C> <C> <C> <C>
Shares sold............................. 14,203 $ 230,962 10,181 $ 139,541
Shares issued in connection with
reinvestment of distributions......... 1,920 32,714 30 443
------------ -------------- ------------ ---------------
16,123 263,676 10,211 139,984
Shares repurchased...................... (3,834) (66,384) (3,594) (49,444)
------------ -------------- ------------ ---------------
Net increase............................ 12,289 $ 197,292 6,617 $ 90,540
------------ -------------- ------------ ---------------
------------ -------------- ------------ ---------------
</TABLE>
5. 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, 1997, the
expenses of Small Cap Growth Portfolio, GT Global America Mid Cap Growth Fund
and Value Portfolio were reduced by $2,560, $84,266 and $436 respectively, 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):
Pursuant to Section 852 of the Internal Revenue Code, the GT Global America Mid
Cap Growth Fund designates $9,085,505, and the GT Global America Value Fund
designates $23,905 as capital gains dividends for the fiscal year ended December
31, 1997.
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, 1997:
<TABLE>
<CAPTION>
FUND
- ----------------------------------------------------------------------
<S> <C>
GT Global America Small Cap Growth Fund............................... 3.06%
GT Global America Mid Cap Growth Fund................................. 3.13%
GT Global America Value Fund.......................................... 16.05%
</TABLE>
F33
<PAGE>
GT GLOBAL AMERICA FUNDS
NOTES
- --------------------------------------------------------------------------------
<PAGE>
GT GLOBAL AMERICA FUNDS
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 AMERICA GROWTH FUND
AMEAR802M
