<PAGE>
GT GLOBAL
OVER 25 YEARS
OF INVESTING
WORLDWIDE
/ /
GT GLOBAL
INTERNATIONAL
GROWTH FUND
/ /
ANNUAL REPORT
DECEMBER 31, 1997
[LOGO]
<PAGE>
TABLE
OF CONTENTS
<TABLE>
<S> <C>
Message from the
Chairman............. 1
Report from the Fund
Managers and Key
Portfolio Holdings... 2
Report of Independent
Accountants.......... F1
Financial
Statements........... F2
Views of the Funds' management
described in this report are as
of the date written. Portfolio
holdings and allocations are as
of December 31, 1997, unless
otherwise noted. These views,
portfolio holdings and
allocations may have changed
subsequently.
</TABLE>
<PAGE>
MESSAGE FROM THE CHAIRMAN
Dear Shareholder,
Nineteen ninety-seven has been a challenging and exciting year. The volatility
of the market--and the resulting record highs and lows--has made investing a
sometimes awe-inspiring endeavor for investors and investment professionals
alike.
Across the GT Global family, our Funds have remained true to their investment
goals and objectives regardless of world events. Whether it be the recent
turmoil in the Asian markets, the privatization and reform underway across
eastern Europe, deregulation occurring in Latin America or the ups and downs of
the U.S. market, our Funds have maintained their focus. In fact, we believe
these changes are yielding new investment opportunities in both established
economies and dynamic new markets around the world. Looking forward to 1998, our
commitment is to continue to monitor world markets and seek additional ways to
capitalize on events as they unfold for the benefit of our shareholders.
In an effort to provide our customers easier access to information about the GT
Global Funds, we launched our website, www.gtglobal.com, during the latter part
of 1997. We hope to continually enhance the information it contains, from our
worldwide economic outlook, to fund price and performance reporting, to the
Millennium Minute message of the day. Used in conjunction with annual and
semiannual reports and your quarterly statement on our Funds, we hope it helps
you monitor your investments and achieve your financial goals.
Be assured that we will continue to strive to offer you the quality investment
products you need to build a well-diversified portfolio. As always, we
appreciate your continued confidence in our Funds. Should you or your adviser
have any questions regarding GT Global Funds, please call us at 800-824-1580.
One of our representatives will be happy to assist you.
Sincerely,
/s/ William J. Guilfoyle
William J. Guilfoyle
Chairman of the Board and President
GT Global Funds
1
<PAGE>
[GRAPHIC]
INVESTMENT OBJECTIVE
The GT Global International Growth Fund seeks long-term growth of capital by
investing primarily in equity securities of companies located outside the U.S.
GT GLOBAL INTERNATIONAL GROWTH FUND
PERFORMANCE SUMMARY
[GRAPH]
/ / GT GLOBAL INTERNATIONAL GROWTH FUND CLASS A
/ / MSCI-EAFE Index
<TABLE>
<CAPTION>
<S> <C> <C>
7/19/85 "$9,525" "$10,000"
"9,535" "9,904"
"9,449" "10,225"
"9,849" "10,827"
"10,506" "11,567"
"11,144" "12,045"
"11,878" "12,619"
"12,163" "12,939"
"12,954" "14,376"
"14,168" "16,402"
"15,310" "17,480"
"14,893" "16,707"
"16,006" "17,850"
"17,407" "18,955"
"18,400" "20,828"
"17,923" "20,619"
"16,423" "19,247"
"17,645" "20,360"
"18,251" "21,445"
"18,728" "23,727"
"19,473" "24,443"
"20,356" "26,452"
"21,427" "29,255"
"21,900" "29,261"
"22,148" "28,334"
"23,579" "28,289"
"24,433" "30,416"
"25,185" "29,943"
"18,256" "25,753"
"17,774" "26,013"
"19,379" "26,791"
"19,786" "27,276"
"20,431" "29,101"
"21,313" "30,896"
"21,833" "31,350"
"21,403" "30,352"
"21,268" "29,559"
"21,460" "30,492"
"20,747" "28,515"
"21,268" "29,767"
"22,330" "32,321"
"22,930" "34,253"
"23,138" "34,450"
"24,311" "35,063"
"24,686" "35,250"
"25,176" "34,565"
"26,167" "34,893"
"25,882" "33,000"
"25,745" "32,452"
"27,545" "36,534"
"28,626" "34,898"
"29,788" "36,494"
"28,455" "35,035"
"29,685" "36,803"
"32,060" "38,170"
"31,540" "36,758"
"30,674" "34,200"
"31,090" "30,644"
"30,258" "30,409"
"31,818" "33,888"
"32,476" "33,598"
"33,585" "34,080"
"30,362" "30,779"
"27,208" "26,499"
"28,802" "30,636"
"27,970" "28,838"
"27,474" "29,316"
"28,071" "30,273"
"29,863" "33,527"
"30,390" "31,522"
"30,495" "31,841"
"31,584" "32,183"
"30,390" "29,826"
"31,514" "31,300"
8/31/91 "30,741" "30,672"
"31,408" "32,410"
"31,549" "32,877"
"30,073" "31,351"
"31,104" "32,980"
"31,176" "32,285"
"31,709" "31,138"
"30,677" "29,091"
"31,532" "29,237"
"33,560" "31,203"
"32,386" "29,733"
"30,998" "28,982"
"30,713" "30,810"
"29,218" "30,211"
"29,147" "28,635"
"29,325" "28,914"
"29,290" "29,072"
"29,076" "29,077"
"29,504" "29,964"
"31,002" "32,585"
"32,501" "35,686"
"32,965" "36,448"
"32,501" "35,888"
"33,714" "37,153"
"35,676" "39,167"
"35,533" "38,294"
"36,996" "39,482"
"35,355" "36,039"
"39,315" "38,650"
"41,741" "41,926"
"40,242" "41,818"
"37,317" "40,026"
"37,852" "41,733"
"37,602" "41,502"
"37,317" "42,098"
"38,494" "42,512"
"40,421" "43,528"
"38,815" "42,167"
"39,029" "43,581"
"37,353" "41,496"
"36,256" "41,765"
"33,488" "40,171"
"32,579" "40,066"
"32,658" "42,576"
"33,646" "44,189"
"33,567" "43,673"
"33,962" "42,919"
"36,453" "45,603"
"36,611" "43,874"
"37,086" "44,742"
"36,453" "43,551"
"36,335" "44,774"
"37,661" "46,590"
"38,324" "46,792"
"38,366" "46,962"
"38,988" "47,971"
"39,818" "49,378"
"39,361" "48,481"
"39,693" "48,766"
"38,117" "47,352"
"38,864" "47,468"
"39,403" "48,741"
"39,278" "48,255"
"40,855" "50,187"
"41,154" "49,553"
"41,062" "47,830"
"41,154" "48,624"
"41,385" "48,812"
"41,939" "49,083"
"43,646" "52,289"
"45,260" "55,185"
"46,460" "56,089"
"43,784" "51,912"
"47,106" "54,831"
"43,369" "50,629"
"43,230" "50,124"
12/31/97 "44,657" "50,573"
</TABLE>
The chart above shows the performance of the GT Global International Growth
Fund, Class A shares, since the Fund's inception, versus the MSCI EAFE Index.
This represents a cumulative return of 346.57% and an average annual total
return of 12.77% for the Fund. The chart assumes a hypothetical $10,000 initial
investment in the Fund's Class A shares and reflects all Fund expenses and the
maximum 4.75% sales charge. A $10,000 investment in the Fund's Class B shares at
inception on April 1, 1993, would have been valued at $13,732 on December 31,
1997. This figure reflects all Fund expenses and the applicable contingent
deferred sales charge (5% in the first year, decreasing to 0% after six years),
assuming complete redemption at the end of the period. A $10,000 investment in
Advisor Class shares at inception on June 1, 1995, would have been worth $13,412
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 LOF 1-YEAR 5-YEAR 10-YEAR LOF
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A(3) 8.51 8.80 8.71 13.21 3.36 7.75 8.18 12.77
CLASS B(3) 7.71 N/A N/A 7.18 3.47 N/A N/A 6.90
ADVISOR CLASS(4) 8.53 N/A N/A 12.02 N/A N/A N/A N/A
</TABLE>
HISTORICAL PERFORMANCE(2)
ANNUAL TOTAL RETURNS % (LAST 10 YEARS)
<TABLE>
<CAPTION>
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A 19.39 38.56 -14.31 13.22 -5.83 34.23 -7.78 3.88 9.28 8.51
CLASS B N/A N/A N/A N/A N/A 25.63(3) -8.36 3.15 8.67 7.71
</TABLE>
(1) Figures assume reinvestment of all dividends and capital gains
distributions at net asset value.
(2) This performance data do not reflect the maximum 4.75% sales charge and the
contingent deferred sales charge for Class A and Class B shares,
respectively, which if included, would have reduced performance quoted.
(3) The Fund began operations on July 19, 1985; Class B shares commenced on
April 1, 1993.
(4) The Fund began offering Advisor Class shares on June 1, 1995. Advisor Class
shares are not sold directly to the general public. They are only available
through certain employee benefit plans, financial institutions and other
entities that have entered into specific agreements with GT Global. Please
see the Fund's prospectus for more complete information.
The above data represent past performance of the Fund's shares, which does not
guarantee future results. The investment return and principal value of an
investment in the Fund will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
2
<PAGE>
INTERVIEW WITH PORTFOLIO MANAGER
MICHAEL LINDSELL
Q HOW DID THE FUND PERFORM?
A Concern over the likely scope of Asian weakness had a chilling impact on
equity markets worldwide in the fourth quarter. Some companies'
preannouncements of earnings disappointments spurred a flight to quality, as
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.
Taking into account this difficult environment, the Fund's Class A shares
returned 8.51% (3.36% including the maximum 4.75% sales charge) over the
12-month period ended December 31, 1997. Total return for Class B shares for
the same period was 7.71% (3.47% including the maximum 5% contingent deferred
sales charge). The Morgan Stanley Capital International Europe, Australia and
the Far East (MSCI-EAFE) Index(5) returned 2.06% over the same period.
Q WHAT FACTORS CONTRIBUTED TO THE FUND'S OUTPERFORMANCE RELATIVE TO THE
INDEX?
A Although global equity markets were considerably more volatile in 1997,
during this period the Fund outperformed the index. The Fund's overweighting to
several continental European countries -- Sweden, Norway and Italy, in
particular -- contributed positively to performance. Most continental bourses
continued to advance, thanks to a rally in bond markets and low inflation. We
were also significantly underweighted in Japan, relative to the index. We
invested cautiously in this difficult market and benefited from security
selection there. Similarly, the Fund was buoyed by holdings in Brazil, Mexico
and Portugal (Brazil and Mexico are not represented in the index while the index
held a small allocation to Portugal). These markets posted solid returns for the
year, although they were tempered during the final few months.
Q WHAT CHANGES DID YOU IMPLEMENT IN THE PORTFOLIO DURING THE YEAR?
A In Europe we sold our positions in German cyclicals -- Bayer, Hoechst and
Volkswagen -- following strong price performance. We also sold our positions in
Adecco and in Telecom Italia Mobile and increased our weightings in European
financials -- Foreningssparbanken and Nordbanken in Scandinavia and SBC Warburg
in Switzerland. We bought a large position in Roche and introduced an exposure
to the oil service sector through our purchase of PGS in Norway.
Additionally, we introduced positions in two emerging markets -- Hungary and
India. Hungary's three-year commitment to economic austerity has nurtured a
positive investment climate, with local investment and healthy foreign
capital inflows resulting in another strong year for its stock market
overall. Inflation has begun to fall and its current account deficit
continues to improve. However, despite improved inflation figures and
positive earnings results for many companies, the Hungarian market was not
immune to the turmoil in world equity markets that became entrenched in
October as the crisis in Asia took root.
India, on the other hand, is at a much earlier stage of development than most
Asian markets, and we are optimistic about continued reform there. We
introduced a position in this market in August as we felt the overall
economic environment was conducive to equity performance, with interest rates
and inflation likely to remain subdued.
Q WHAT ARE SOME OF THE IMPLICATIONS OF EUROPEAN MONETARY UNION IN 1998?
A We believe that monetary union is likely to go forward in May 1998. This
possibility was priced into bond and equity markets in 1997, as bond yields fell
in peripheral countries such as Spain to converge with German levels. At some
point, however, we believe EMU could potentially create serious structural
problems and interest rates would rise.
CONTINUED P.4
(5) The MSCI-EAFE World Index is a market value weighted average of the
performance of 1,086 securities listed on 20 major world stock
exchanges. It includes the effect of reinvested dividends and is measured
in U.S. dollars.
Indices are unmanaged, not available for direct investment and do not
include the effects of sales charges and professional management fees.
3
<PAGE>
INTERVIEW WITH PORTFOLIO MANAGER CONTINUED
Similarly, if monetary union is delayed or canceled, we believe the impact would
be negative for Spain and Italy, where bond yields would rise sharply. However,
in the event of a rise in interest rates, we believe the Fund is well positioned
relative to the European market. The Fund currently has no exposure to Spanish
equities and considerably underweighted in Italy relative to the index. The Fund
is also overweighted in the UK and has a large weighting in the Netherlands,
which we think could be relative winners. We feel the Fund's substantial
exposure to the UK offers good value because its equity market is home to some
excellent financial services and health care companies.
Q RELATIVE TO THE INDEX, WHY IS THE FUND CONSIDERABLY UNDERWEIGHTED IN JAPAN?
A While we believe fundamental changes are likely in 1998, our top-down
analysis suggests the year will continue to be a very difficult one for Japan
with limited economic growth. The course of the stock market rests on the policy
response of Japanese authorities. Clearly, Japan has the resources to produce a
domestic demand-led recovery, but we believe the policy response must be
rigorous, wide ranging and implemented quickly.
At the same time, more action by Japanese corporations is necessary. As yet,
remarkably little active restructuring is taking place in Japan. Although the
unemployment rate has recently been creeping up, it remains at relatively modest
levels. However, we look for this to change in 1998-99.
In addition, without policy action and corporate restructuring, we foresee no
substantial rally in the Japanese stock market; indeed, further falls are
possible. In this environment, we have continued to focus on companies we feel
can exploit major trends, such as the graying of Japan, companies that are
beneficiaries of the long-term weakness of the yen, companies entering new
markets and businesses that can maintain pricing power.
Q HOW DID AUSTRALASIAN MARKETS FARE?
A Despite our positive outlook, the second half of the year was disappointing
for investors in both Australia and New Zealand. The two stock markets fell by
15.25% and 18.15%, respectively, in U.S. dollars (based on MSCI country
indices). In the fourth quarter, foreign investors also had to bear the effects
of falls in both Australian and New Zealand dollars of around 10% against the
U.S. dollar.
During this time, two factors had additional impact on both countries. First,
many experts felt prospects for economic and corporate earnings growth would be
constrained by the financial crises in Asia, the destination of over half the
exports from both Australia and New Zealand. This view, which overlooked the
importance of foodstuffs exported to Asia, was prevalent despite growth in many
sectors of the Australian economy remaining robust through the third quarter.
Second, commodity prices had already been weakening. For example, the outlook
for base metals was clouded by developments in East Asia, while sales by central
banks (and falling inflation expectations) had caused the price of gold to
slide.
Q WHAT IS YOUR OUTLOOK OVER THE LONGER TERM?
A We feel the portfolio is well positioned to take advantage of opportunities
in the European marketplace over the coming year. We believe European markets
will continue to provide attractive returns boosted by consolidation and
increasing emphasis on the creation of shareholder value. Currently, the Fund is
concentrated in companies with visible earnings growth and those we believe have
the ability to rerate substantially against their global peers. Our stock
selection has focused on service industries, such as management consulting and
temporary labor, which are relatively underdeveloped but are expanding rapidly.
We have also identified particular consumer goods, healthcare and
telecommunications stocks that we feel can look forward to strong organic
growth.
In Latin America, we have investments in Brazil and Mexico. While both markets
were not immune to the Asian turmoil, Brazil, in particular, suffered as
volatility in Southeast Asian currency markets intensified concerns about
overvaluation of the real. Renewed momentum of the reform process and
privatization, however, are seemingly back on track and we feel the state sector
continues to be compelling. Mexico, on the other hand, has been the least
affected of all the Latin American markets. Indeed, confidence in the economy
and its growth prospects has given it
CONTINUED P.5
4
<PAGE>
INTERVIEW WITH PORTFOLIO MANAGER CONTINUED
regional safe haven status. Moreover, with the U.S. as its largest trading
partner (nearly 85% of exports are bound for the U.S.), we expect Mexico to
continue to benefit from steady, relatively low inflationary growth in the U.S.
Conversely, as we enter 1998, we believe Asian recovery will take time and its
stock markets are likely to remain extremely volatile. At present, we anticipate
maintaining our Hong Kong presence and will continue to invest elsewhere on a
very selective basis.
ABOUT THE PORTFOLIO MANAGERS
ROGER YATES - Global Chief Investment Officer for Chancellor LGT Asset
Management since October 1997. Mr. Yates was International Chief Investment
Officer for Chancellor LGT from September '96 to October '97, and from '94 to
'96, he was Chief Investment Officer and Portfolio Manager for Europe and the
UK. Previously, Mr. Yates was an Investment Manager at Morgan Grenfell and
Director of their UK pension fund business. Prior to that, he worked for LGT
Asset Management (London) for seven years, and was appointed a director in 1986
and Chief Investment Officer for unit trusts in 1987. In 1994, he rejoined
Chancellor LGT. He received a bachelor's degree from Oxford University and
completed postgraduate research at Reading University.
MICHAEL LINDSELL - Head of investment strategy for Global Equities; Chief
Investment Officer, Japan, 1992-96. Previously, Mr. Lindsell was a director at
Warburg Asset Management from 1989 to 1992; Senior Fund Manager at Scimitar
Asset Management from 1985 to 1988; and Fund Manager, Lazard Brothers & Co. Ltd.
from 1982 to 1985. He received his B.Sc from Bristol University.
GEOGRAPHIC ALLOCATION OF NET ASSETS %
<TABLE>
<CAPTION>
1997 1996
DECEMBER 31 DECEMBER 31
<S> <C> <C>
Australia 5.7 2.8
Brazil 3.5 1.2
Denmark 1.2 N/A
Finland 1.0 N/A
France 6.6 7.1
Germany 2.8 7.1
Hong Kong 4.9 5.3
Hungary 1.3 N/A
India 1.1 N/A
Indonesia N/A 1.1
Italy 2.9 4.7
Japan 9.3 16.5
Korea 0.2 0.9
Mexico 2.0 1.3
Netherlands 7.9 5.8
New Zealand 1.7 1.8
Norway 1.5 N/A
Portugal 1.9 1.9
Singapore 0.6 1.7
South Africa 0.5 N/A
Spain N/A 4.2
Sweden 4.7 3.6
Switzerland 8.4 5.9
Thailand 0.3 0.9
UK 22.4 21.7
U.S. & Other 7.6 4.5
</TABLE>
Allocations will change based on current market conditions.
5
<PAGE>
SECTOR ALLOCATION OF NET ASSETS %
DECEMBER 31, 1997
<TABLE>
<CAPTION>
<S> <C>
Finance 26.7
Services 20.0
Energy 10.5
Health Care 8.7
Material/Basic Industry 7.1
Consumer Non-Durables 6.0
Capital Goods 4.9
Multi-Industry/Misc. 3.3
Technology 3.3
Consumer Durables 1.9
Short Term & Other 7.6
</TABLE>
A complete listing of holdings and allocations may be found in the Financial
Statements section of this report.
<TABLE>
<CAPTION>
% of
GT GLOBAL INTERNATIONAL GROWTH FUND Country Net Assets
KEY PORTFOLIO HOLDINGS(6)
<S> <C> <C>
ROCHE HOLDING AG Develops and manufactures pharmaceutical and chemical products and Switzerland 2.6
distributes them throughout Europe, the United States, Asia and Latin America.
EMI GROUP PLC A music recording and retailing company, EMI owns the Capitol, EMI, UK 2.4
and Virgin record labels and sells recorded music through its HMV stores and books
at its Dillons chain.
PETROLEO BRASILEIRO S.A.-PETROBRAS Produces oil and natural gas liquids (mainly oil Brazil 2.3
products and fuel oil) through approximately 7,258 active wells. Petrobras also
provides maritime freight services.
HSBC HOLDINGS PLC The holding company for the HSBC Group, an international banking Hong Kong 2.2
and financial services organization with operations in the Asia-Pacific region,
Europe, the Middle East and the Americas.
NORDBANKEN HOLDING AB Owns the Merita Nordbanken Group, operating mainly in Finland Sweden 2.1
and Sweden, to provide banking, financial, loan and insurance services to
individuals, corporations and institutions in Scandinavia and the Baltic region
under the names of Nordbanken and Merita.
WOOLWORTHS LTD. Operates grocery and discount stores throughout Australia, offering Australia 2.1
general merchandise, men's/women's/children's clothing, footwear, accessories and
sporting goods.
AUSTRALIA & NEW ZEALAND BANKING GROUP LTD. A general trading and savings bank. The Australia 2.0
group operates approximately 1,600 offices in 48 countries.
ROYAL & SUN ALLIANCE INSURANCE GROUP PLC The holding company for multinational UK 2.0
insurance companies Sun Alliance Group PLC and Royal Insurance Holdings PLC, which
provide major classes of general and life insurance to customers throughout the world.
KIMBERLY-CLARK DE MEXICO, S.A. DE C.V. Manufactures and sells consumer and industrial Mexico 2.0
paper products, including feminine hygiene products under the Kotex brand name, paper
towels, paper napkins and toilet paper.
M & G GROUP PLC Provides services through unit trusts, personal equity plans, UK 2.0
investment trusts and unit-linked life and pension policies, as well as investment
management services.
</TABLE>
Source: Bloomberg, January, 1998
(6) There can be no assurance the Fund will continue to hold these securities.
6
<PAGE>
GT GLOBAL
INTERNATIONAL
GROWTH FUND
FINANCIAL
STATEMENTS
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of
GT Global Growth Series:
We have audited the accompanying statement of assets and liabilities of GT
Global International Growth Fund, one of the funds organized as a series of GT
Global Growth Series, including the schedule of portfolio investments, as of
December 31, 1997, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended and the financial highlights for each of the five years in the
period then ended. These financial statements and the financial highlights are
the responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and the financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 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 GT
Global International Growth Fund as of December 31, 1997, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended and the financial highlights for each of
the five years in the period then ended, in conformity with generally accepted
accounting principles.
COOPERS & LYBRAND L.L.P.
BOSTON, MASSACHUSETTS
FEBRUARY 17, 1998
F1
<PAGE>
GT GLOBAL INTERNATIONAL 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>
Finance (26.7%)
HSBC Holdings PLC ......................................... HK 180,100 $ 4,439,453 2.2
BANKS-MONEY CENTER
Nordbanken Holding AB-/- .................................. SWDN 772,120 4,367,701 2.1
OTHER FINANCIAL
Australia & New Zealand Banking Group Ltd. ................ AUSL 625,600 4,132,897 2.0
BANKS-REGIONAL
Royal & Sun Alliance Insurance Group PLC .................. UK 405,000 4,076,601 2.0
INSURANCE - MULTI-LINE
M & G Group PLC ........................................... UK 175,000 4,044,540 2.0
INVESTMENT MANAGEMENT
ForeningsSparbanken AB .................................... SWDN 145,230 3,302,595 1.6
BANKS-REGIONAL
Abbey National PLC ........................................ UK 182,400 3,267,626 1.6
BANKS-SUPER REGIONAL
ING Groep N.V. ............................................ NETH 76,097 3,205,744 1.6
OTHER FINANCIAL
National Westminster Bank PLC ............................. UK 162,000 2,692,020 1.3
BANKS-MONEY CENTER
Lloyds TSB Group PLC ...................................... UK 196,000 2,532,874 1.2
BANKS-REGIONAL
Unidanmark AS "A" ......................................... DEN 34,300 2,518,341 1.2
BANKS-REGIONAL
Axa - UAP ................................................. FR 32,050 2,479,968 1.2
INSURANCE - MULTI-LINE
Nichiei Co., Ltd. ......................................... JPN 22,800 2,428,506 1.2
OTHER FINANCIAL
Schroders PLC ............................................. UK 76,000 2,387,323 1.2
BANKS-MONEY CENTER
State Bank of India Ltd. - GDR{\/} ........................ IND 125,000 2,234,375 1.1
BANKS-REGIONAL
Schweizerischer Bankverein (Swiss Bank Corp.) ............. SWTZ 6,554 2,037,187 1.0
BANKS-MONEY CENTER
Banque Nationale de Paris ................................. FR 35,379 1,880,492 0.9
BANKS-MONEY CENTER
United Overseas Bank Ltd. - Foreign ....................... SING 222,300 1,235,000 0.6
BANKS-MONEY CENTER
PSIL Bangkok Bank Co., Ltd. (Entitlement Certificates){\/}
{=} ...................................................... THAI 320,000 588,800 0.3
OTHER FINANCIAL
Kookmin Bank .............................................. KOR 84,910 448,345 0.2
BANKS-MONEY CENTER
Union Bank of Switzerland - Bearer ........................ SWTZ 275 397,645 0.2
BANKS-MONEY CENTER
------------
54,698,033
------------
Services (20.0%)
EMI Group PLC ............................................. UK 578,000 4,821,412 2.4
LEISURE & TOURISM
Woolworths Ltd. ........................................... AUSL 1,279,000 4,274,721 2.1
RETAILERS-OTHER
</TABLE>
The accompanying notes are an integral part of the financial statements.
F2
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Services (Continued)
Telecom Italia SpA ........................................ ITLY 609,900 $ 3,903,636 1.9
TELEPHONE NETWORKS
Telecom Corporation of New Zealand Ltd. ................... NZ 725,500 3,515,509 1.7
TELEPHONE NETWORKS
Reuters Holdings PLC ...................................... UK 305,000 3,330,460 1.6
BROADCASTING & PUBLISHING
Koninklijke Ahold N.V. .................................... NETH 117,919 3,077,109 1.5
RETAILERS-FOOD
EMAP PLC .................................................. UK 180,000 2,682,266 1.3
BROADCASTING & PUBLISHING
Great Universal Stores PLC ................................ UK 208,000 2,619,639 1.3
RETAILERS-OTHER
Telecomunicacoes Brasileiras S.A. (Telebras) - ADR{\/} .... BRZL 21,400 2,491,763 1.2
TELEPHONE NETWORKS
Ezaki Glico Co., Ltd. ..................................... JPN 370,000 2,390,115 1.2
RETAILERS-FOOD
Portugal Telecom S.A. - Registered ........................ PORT 46,400 2,153,565 1.0
TELEPHONE NETWORKS
Telecel - Comunicacaoes Pessoais S.A.-/- .................. PORT 17,619 1,877,764 0.9
WIRELESS COMMUNICATIONS
Vendex International N.V. ................................. NETH 31,755 1,752,853 0.9
RETAILERS-OTHER
Vodafone Group PLC ........................................ UK 165,928 1,196,098 0.6
WIRELESS COMMUNICATIONS
Telstra Corp. Ltd.-/- ..................................... AUSL 437,200 922,880 0.4
TELEPHONE NETWORKS
Fast Retailing Co., Ltd. .................................. JPN 44 705 --
RETAILERS-APPAREL
------------
41,010,495
------------
Energy (10.5%)
Petroleo Brasileiro S.A. (Petrobras) - ADR{\/} ............ BRZL 197,900 4,724,863 2.3
GAS PRODUCTION & DISTRIBUTION
Shell Transport & Trading Co., PLC ........................ UK 478,000 3,453,530 1.7
OIL
Viag AG ................................................... GER 5,792 3,120,627 1.5
ELECTRICAL & GAS UTILITIES
Total S.A. "B" ............................................ FR 28,580 3,110,393 1.5
OIL
Petroleum Geo-Services ASA-/- ............................. NOR 47,990 3,022,967 1.5
ENERGY EQUIPMENT & SERVICES
Ente Nazionale Idrocarburi (ENI) S.p.A. ................... ITLY 355,200 2,029,542 1.0
OIL
Coflexip - ADR{\/} ........................................ FR 35,230 1,955,265 1.0
ENERGY EQUIPMENT & SERVICES
------------
21,417,187
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F3
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Health Care (8.7%)
Roche Holding AG .......................................... SWTZ 543 $ 5,392,449 2.6
PHARMACEUTICALS
Novartis AG ............................................... SWTZ 1,709 2,773,059 1.4
PHARMACEUTICALS
Richter Gedeon Rt. - Reg S GDR{c} {\/} .................... HGRY 23,400 2,688,075 1.3
PHARMACEUTICALS
Schering AG ............................................... GER 26,700 2,575,730 1.3
PHARMACEUTICALS
Takeda Chemical Industries ................................ JPN 80,000 2,280,460 1.1
PHARMACEUTICALS
Astra AB "A" .............................................. SWDN 115,313 1,997,573 1.0
MEDICAL TECHNOLOGY & SUPPLIES
M.L. Laboratories PLC-/- .................................. UK 21,368 28,947 --
PHARMACEUTICALS
------------
17,736,293
------------
Materials/Basic Industry (7.1%)
Kimberly-Clark de Mexico, S.A. de C.V. "A" ................ MEX 829,400 4,060,647 2.0
PAPER/PACKAGING
Ciba Specialty Chemicals AG-/- ............................ SWTZ 31,880 3,797,837 1.9
CHEMICALS
Akzo Nobel N.V. ........................................... NETH 15,210 2,623,035 1.3
CHEMICALS
BOC Group PLC ............................................. UK 136,000 2,235,402 1.1
CHEMICALS
CRH PLC ................................................... UK 138,600 1,604,483 0.8
BUILDING MATERIALS & COMPONENTS
------------
14,321,404
------------
Consumer Non-Durables (6.0%)
Asahi Breweries Ltd. ...................................... JPN 210,000 3,057,471 1.5
BEVERAGES - ALCOHOLIC
Nestle S.A. - Registered .................................. SWTZ 1,771 2,654,196 1.3
FOOD
Amway Japan Ltd. .......................................... JPN 125,000 2,394,636 1.2
HOUSEHOLD PRODUCTS
Diageo PLC ................................................ UK 235,000 2,158,990 1.0
BEVERAGES - ALCOHOLIC
South African Breweries Ltd. .............................. SAFR 42,000 1,036,184 0.5
BEVERAGES - ALCOHOLIC
Benckiser N.V. "B"-/- ..................................... NETH 24,500 1,013,985 0.5
HOUSEHOLD PRODUCTS
------------
12,315,462
------------
Capital Goods (4.9%)
Alcatel Alsthom Compagnie Generale d'Electricite .......... FR 31,500 4,003,905 2.0
TELECOM EQUIPMENT
Canon, Inc. ............................................... JPN 120,000 2,795,402 1.4
OFFICE EQUIPMENT
</TABLE>
The accompanying notes are an integral part of the financial statements.
F4
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Capital Goods (Continued)
Nokia AB "A" .............................................. FIN 28,300 $ 1,979,602 1.0
TELECOM EQUIPMENT
Kurita Water Industries Ltd. .............................. JPN 95,000 968,199 0.5
ENVIRONMENTAL
------------
9,747,108
------------
Multi-Industry/Miscellaneous (3.3%)
BBA Group PLC ............................................. UK 395,000 2,646,305 1.3
MULTI-INDUSTRY
Shanghai Industrial Holdings Ltd. ......................... HK 686,000 2,549,758 1.2
MULTI-INDUSTRY
Hutchison Whampoa ......................................... HK 279,000 1,749,939 0.8
MULTI-INDUSTRY
------------
6,946,002
------------
Technology (3.3%)
Cap Gemini N.V. ........................................... NETH 69,120 2,356,054 1.1
COMPUTERS & PERIPHERALS
Matsushita-Kotobuki Electronics Ltd. ...................... JPN 88,000 2,211,801 1.1
COMPUTERS & PERIPHERALS
Baan Company N.V.-/- {\/} ................................. NETH 65,360 2,156,880 1.0
SOFTWARE
Koei Co., Ltd. ............................................ JPN 43,300 205,716 0.1
SOFTWARE
------------
6,930,451
------------
Consumer Durables (1.9%)
Futuris Corp., Ltd. ....................................... AUSL 2,226,000 2,436,432 1.2
AUTO PARTS
Cheung Kong (Holdings) Ltd. ............................... HK 212,000 1,388,527 0.7
HOUSING
------------
3,824,959
------------ -----
TOTAL EQUITY INVESTMENTS (cost $171,991,305) ................ 188,947,394 92.4
------------ -----
</TABLE>
The accompanying notes are an integral part of the financial statements.
F5
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 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 $20,795,000 U.S. Treasury Notes, 5.75%
due 12/31/98 (market value of collateral is $20,814,506,
including accrued interest).
(cost $20,403,000) ...................................... $ 20,403,000 10.0
------------ -----
TOTAL INVESTMENTS (cost $192,394,305) * .................... 209,350,394 102.4
Other Assets and Liabilities ................................ (4,900,370) (2.4)
------------ -----
NET ASSETS .................................................. $204,450,024 100.0
------------ -----
------------ -----
</TABLE>
- --------------
-/- Non-income producing security.
{\/} U.S. currency denominated.
{c} Security issued under Regulation S. Rule 144A and additional
restrictions may apply in the resale of such securities.
{=} Each share of Entitlement Certificates represents one local share
of PSIL Bangkok Bank Co., Ltd.
* For Federal income tax purposes, cost is $193,457,059 and
appreciation (depreciation) is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $ 27,995,828
Unrealized depreciation: (12,102,493)
-------------
Net unrealized appreciation: $ 15,893,335
-------------
-------------
</TABLE>
Abbreviations:
ADR--American Depositary Receipt
GDR--Global Depositary Receipt
The accompanying notes are an integral part of the financial statements.
F6
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1997
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at December 31, 1997, was concentrated in
the following countries:
<TABLE>
<CAPTION>
PERCENTAGE OF NET ASSETS {D}
-----------------------------------
SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE) EQUITY & OTHER TOTAL
- -------------------------------------- ------ ------------- ----------
<S> <C> <C> <C>
Australia (AUSL/AUD) ................. 5.7 5.7
Brazil (BRZL/BRL) .................... 3.5 3.5
Denmark (DEN/DKK) .................... 1.2 1.2
Finland (FIN/FIM) .................... 1.0 1.0
France (FR/FRF) ...................... 6.6 6.6
Germany (GER/DEM) .................... 2.8 2.8
Hong Kong (HK/HKD) ................... 4.9 4.9
Hungary (HGRY/HUF) ................... 1.3 1.3
India (IND/INR) ...................... 1.1 1.1
Italy (ITLY/ITL) ..................... 2.9 2.9
Japan (JPN/JPY) ...................... 9.3 9.3
Korea (KOR/KRW) ...................... 0.2 0.2
Mexico (MEX/MXN) ..................... 2.0 2.0
Netherlands (NETH/NLG) ............... 7.9 7.9
New Zealand (NZ/NZD) ................. 1.7 1.7
Norway (NOR/NOK) ..................... 1.5 1.5
Portugal (PORT/PTE) .................. 1.9 1.9
Singapore (SING/SGD) ................. 0.6 0.6
South Africa (SAFR/ZAR) .............. 0.5 0.5
Sweden (SWDN/SEK) .................... 4.7 4.7
Switzerland (SWTZ/CHF) ............... 8.4 8.4
Thailand (THAI/THB) .................. 0.3 0.3
United Kingdom (UK/GBP) .............. 22.4 22.4
United States (US/USD) ............... 7.6 7.6
------ --- ----------
Total ............................... 92.4 7.6 100.0
------ --- ----------
------ --- ----------
</TABLE>
- --------------
{d} Percentages indicated are based on net assets of $204,450,024.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
DECEMBER 31, 1997
<TABLE>
<CAPTION>
MARKET VALUE CONTRACT DELIVERY UNREALIZED
CONTRACTS TO SELL: (U.S. DOLLARS) PRICE DATE APPRECIATION
- ---------------------------------------- -------------- ----------- -------- --------------
<S> <C> <C> <C> <C>
Deutsche Marks.......................... 3,904,418 1.72492 2/23/98 $ 153,742
French Francs........................... 5,079,036 5.72800 2/6/98 245,685
French Francs........................... 1,998,309 5.77490 2/6/98 79,649
Japanese Yen............................ 4,528,736 120.70000 1/7/98 367,702
Japanese Yen............................ 770,321 118.82300 2/4/98 71,267
Japanese Yen............................ 8,992,174 122.40000 2/12/98 533,970
Swiss Francs............................ 5,872,843 1.42180 3/19/98 105,494
-------------- --------------
Total Contracts to Sell (Receivable
amount $32,703,346).................. 31,145,837 1,557,509
-------------- --------------
THE VALUE OF CONTRACTS TO SELL AS
PERCENTAGE OF NET ASSETS IS 15.23%.
Total Open Forward Foreign Currency Contracts................................... $ 1,557,509
--------------
--------------
</TABLE>
- ----------------
See Note 1 to the financial statements.
The accompanying notes are an integral part of the financial statements.
F7
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
STATEMENT OF ASSETS
AND LIABILITIES
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Assets:
Investments in securities, at value (cost $171,991,305) (Note 1).......................... $188,947,394
Repurchase agreement, at value and cost................................................... 20,403,000
U.S. currency.................................................................. $ 518
Foreign currencies (cost $2,476,057)........................................... 2,469,130 2,469,648
---------
Receivable for open forward foreign currency contracts (Note 1)........................... 1,557,509
Receivable for securities sold............................................................ 409,819
Dividends and dividend withholding tax reclaims receivable................................ 280,212
Receivable for Fund shares sold........................................................... 36,825
Interest receivable....................................................................... 3,502
-----------
Total assets............................................................................ 214,107,909
-----------
Liabilities:
Payable for Fund shares repurchased....................................................... 8,454,213
Payable for securities purchased.......................................................... 746,544
Payable for investment management and administration fees (Note 2)........................ 164,822
Payable for service and distribution expenses (Note 2).................................... 88,263
Payable for printing and postage expenses................................................. 67,943
Payable for transfer agent fees (Note 2).................................................. 45,803
Payable for professional fees............................................................. 32,257
Payable for registration and filing fees.................................................. 17,314
Payable for custodian fees................................................................ 16,939
Payable for Trustees' fees and expenses (Note 2).......................................... 5,340
Payable for fund accounting fees (Note 2)................................................. 2,463
Other accrued expenses.................................................................... 15,984
-----------
Total liabilities....................................................................... 9,657,885
-----------
Net assets.................................................................................. $204,450,024
-----------
-----------
Class A:
Net asset value and redemption price per share ($148,143,474 DIVIDED BY 19,320,762 shares
outstanding)............................................................................... $ 7.67
-----------
-----------
Maximum offering price per share (100/95.25 of $7.67) *..................................... $ 8.05
-----------
-----------
Class B:+
Net asset value and offering price per share ($56,022,575 DIVIDED BY 7,606,803 shares
outstanding)............................................................................... $ 7.36
-----------
-----------
Advisor Class:
Net asset value, offering price per share, and redemption price per share ($283,975 DIVIDED
BY 36,797 shares outstanding).............................................................. $ 7.72
-----------
-----------
Net assets consist of:
Paid in capital (Note 4).................................................................. $182,591,933
Accumulated net realized gain on investments and foreign currency transactions............ 3,346,785
Net unrealized appreciation on translation of assets and liabilities in foreign
currencies............................................................................... 1,555,217
Net unrealized appreciation of investments................................................ 16,956,089
-----------
Total -- representing net assets applicable to capital shares outstanding................... $204,450,024
-----------
-----------
<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.
F8
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
STATEMENT OF OPERATIONS
Year ended December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Investment income: (Note 1)
Dividend income (net of foreign withholding tax of $720,333).............................. $ 4,147,307
Interest income........................................................................... 693,646
-----------
Total investment income................................................................. 4,840,953
-----------
Expenses:
Investment management and administration fees (Note 2).................................... 2,309,873
Service and distribution expenses: (Note 2)
Class A.................................................................... $ 607,400
Class B.................................................................... 625,899 1,233,299
-----------
Transfer agent fees (Note 2).............................................................. 645,736
Custodian fees............................................................................ 199,701
Professional fees......................................................................... 82,923
Registration and filing fees.............................................................. 78,995
Fund accounting fees (Note 2)............................................................. 59,416
Printing and postage expenses............................................................. 42,984
Trustees' fees and expenses (Note 2)...................................................... 13,387
Other expenses (Note 1)................................................................... 44,923
-----------
Total expenses before reductions........................................................ 4,711,237
-----------
Expense reductions (Notes 1 & 5)...................................................... (298,050)
-----------
Total net expenses...................................................................... 4,413,187
-----------
Net investment income....................................................................... 427,766
-----------
Net realized and unrealized gain (loss) on investments and foreign currencies:
(Note 1)
Net realized gain on investments............................................. 32,730,836
Net realized gain on foreign currency transactions........................... 5,375,057
-----------
Net realized gain during the year....................................................... 38,105,893
Net change in unrealized appreciation on translation of assets and
liabilities in foreign currencies........................................... 286,534
Net change in unrealized appreciation of investments......................... (14,668,685)
-----------
Net unrealized depreciation during the year............................................. (14,382,151)
-----------
Net realized and unrealized gain on investments and foreign currencies...................... 23,723,742
-----------
Net increase in net assets resulting from operations........................................ $24,151,508
-----------
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F9
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1997 1996
------------- -------------
Decrease in net assets
Operations:
Net investment income (loss)............................................. $ 427,766 $ (860,684)
Net realized gain on investments and foreign currency transactions....... 38,105,893 37,931,580
Net change in unrealized appreciation on translation of assets and
liabilities in foreign currencies....................................... 286,534 205,239
Net change in unrealized depreciation of investments..................... (14,668,685) (7,070,173)
------------- -------------
Net increase in net assets resulting from operations................... 24,151,508 30,205,962
------------- -------------
Class A:
Distributions to shareholders:
From net investment income............................................... (425,877) --
From net realized gain on investments.................................... (29,789,043) (20,343,820)
Class B:
Distributions to shareholders:
From net investment income............................................... -- --
From net realized gain on investments.................................... (10,955,953) (6,672,791)
Advisor Class:
Distributions to shareholders:
From net investment income............................................... (1,888) --
From net realized gain on investments.................................... (56,864) (46,941)
------------- -------------
Total distributions.................................................... (41,229,625) (27,063,552)
------------- -------------
Capital share transactions: (Note 4)
Increase from capital shares sold and reinvested......................... 663,662,225 1,289,311,201
Decrease from capital shares repurchased................................. (703,298,069) (1,410,140,865)
------------- -------------
Net decrease from capital share transactions........................... (39,635,844) (120,829,664)
------------- -------------
Total decrease in net assets............................................... (56,713,961) (117,687,254)
Net assets:
Beginning of year........................................................ 261,163,985 378,851,239
------------- -------------
End of year *............................................................ $204,450,024 $ 261,163,985
------------- -------------
------------- -------------
* Includes undistributed net investment income of......................... $ -- $ --
------------- -------------
------------- -------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F10
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
CLASS A+
----------------------------------------------------------
YEAR ENDED DECEMBER 31,
----------------------------------------------------------
1997 (D) 1996 (D) 1995 1994 1993 (D)
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 8.92 $ 9.08 $ 9.17 $ 11.02 $ 8.21
---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income (loss).......... 0.03 (0.01) 0.03 (0.04) 0.03
Net realized and unrealized gain
(loss) on investments................ 0.69 0.84 0.32 (0.82) 2.78
---------- ---------- ---------- ---------- ----------
Net increase (decrease) from
investment operations.............. 0.72 0.83 0.35 (0.86) 2.81
---------- ---------- ---------- ---------- ----------
Distributions to shareholders:
From net investment income............ (0.03) -- -- (0.04) --
From net realized gain on
investments.......................... (1.94) (0.99) (0.24) (0.95) --
In excess of net realized gain on
investments.......................... -- -- (0.20) -- --
---------- ---------- ---------- ---------- ----------
Total distributions................. (1.97) (0.99) (0.44) (0.99) --
---------- ---------- ---------- ---------- ----------
Net asset value, end of period.......... $ 7.67 $ 8.92 $ 9.08 $ 9.17 $ 11.02
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Total investment return (c)............. 8.51% 9.28% 3.88% (7.78)% 34.23%
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 148,143 $ 196,601 $ 308,816 $ 430,701 $ 523,397
Ratio of net investment income (loss) to
average net assets:
With expense reductions (Notes 1 &
5)................................... 0.35% (0.14)% 0.24% (0.04)% 0.3%
Without expense reductions............ 0.22% (0.25)% 0.16% (0.09)% N/A
Ratio of expenses to average net assets:
With expense reductions (Notes 1 &
5)................................... 1.69% 1.80% 1.70% 1.70% 1.80%
Without expense reductions............ 1.82% 1.91% 1.78% 1.75% N/A
Portfolio turnover rate++++............. 72% 74% 75% 96% 90%
Average commission rate per share paid
on portfolio transactions++++.......... $ 0.0269 $ 0.0267 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.
F11
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
FINANCIAL HIGHLIGHTS (cont'd)
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
CLASS B++
-------------------------------------------------------------
APRIL 1, 1993
YEAR ENDED DECEMBER 31, TO
---------------------------------------------- DECEMBER 31,
1997 (D) 1996 (D) 1995 1994 1993 (D)
---------- ---------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 8.68 $ 8.91 $ 9.07 $ 10.98 $ 8.74
---------- ---------- ---------- ---------- -------------
Income from investment operations:
Net investment income (loss).......... (0.03) (0.07) (0.04) (0.10) (0.01)
Net realized and unrealized gain
(loss) on investments................ 0.65 0.83 0.32 (0.82) 2.25
---------- ---------- ---------- ---------- -------------
Net increase (decrease) from
investment operations.............. 0.62 0.76 0.28 (0.92) 2.24
---------- ---------- ---------- ---------- -------------
Distributions to shareholders:
From net investment income............ -- -- -- (0.04) --
From net realized gain on
investments.......................... (1.94) (0.99) (0.24) (0.95) --
In excess of net realized gain on
investments.......................... -- -- (0.20) -- --
---------- ---------- ---------- ---------- -------------
Total distributions................. (1.94) (0.99) (0.44) (0.99) --
---------- ---------- ---------- ---------- -------------
Net asset value, end of period.......... $ 7.36 $ 8.68 $ 8.91 $ 9.07 $ 10.98
---------- ---------- ---------- ---------- -------------
---------- ---------- ---------- ---------- -------------
Total investment return (c)............. 7.71% 8.67% 3.15% (8.36)% 25.63%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 56,023 $ 64,102 $ 69,654 $ 71,794 $ 30,745
Ratio of net investment income (loss) to
average net assets:
With expense reductions (Notes 1 &
5)................................... (0.30)% (0.79)% (0.41)% (0.69)% (0.4)%(a)
Without expense reductions............ (0.43)% (0.90)% (0.49)% (0.74)% N/A
Ratio of expenses to average net assets:
With expense reductions (Notes 1 &
5)................................... 2.34% 2.45% 2.35% 2.35% 2.4%(a)
Without expense reductions............ 2.47% 2.56% 2.43% 2.40% N/A
Portfolio turnover rate++++............. 72% 74% 75% 96% 90%
Average commission rate per share paid
on portfolio transactions++++.......... $ 0.0269 $ 0.0267 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.
F12
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
FINANCIAL HIGHLIGHTS (cont'd)
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
ADVISOR CLASS+++
-------------------------------------
YEAR ENDED DECEMBER JUNE 1, 1995
31, TO
---------------------- DECEMBER 31,
1997 (D) 1996 (D) 1995
---------- ---------- -------------
<S> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 9.01 $ 9.11 $ 8.49
---------- ---------- -------------
Income from investment operations:
Net investment income (loss).......... 0.07 0.02 0.03
Net realized and unrealized gain
(loss) on investments................ 0.65 0.87 1.03
---------- ---------- -------------
Net increase (decrease) from
investment operations.............. 0.72 0.89 1.06
---------- ---------- -------------
Distributions to shareholders:
From net investment income............ (0.07) -- --
From net realized gain on
investments.......................... (1.94) (0.99) (0.24)
In excess of net realized gain on
investments.......................... -- -- (0.20)
---------- ---------- -------------
Total distributions................. (2.01) (0.99) (0.44)
---------- ---------- -------------
Net asset value, end of period.......... $ 7.72 $ 9.01 $ 9.11
---------- ---------- -------------
---------- ---------- -------------
Total investment return (c)............. 8.53% 9.79% 12.56%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 284 $ 461 $ 381
Ratio of net investment income (loss) to
average net assets:
With expense reductions (Notes 1 &
5)................................... 0.70% 0.21% 0.59%(a)
Without expense reductions............ 0.57% 0.10% 0.51%(a)
Ratio of expenses to average net assets:
With expense reductions (Notes 1 &
5)................................... 1.34% 1.45% 1.35%(a)
Without expense reductions............ 1.47% 1.56% 1.43%(a)
Portfolio turnover rate++++............. 72% 74% 75%
Average commission rate per share paid
on portfolio transactions++++.......... $ 0.0269 $ 0.0267 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.
F13
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
GT Global International Growth Fund ("Fund"), is a separate series of GT Global
Growth Series ("Company"). The Company is organized as a Massachusetts business
trust and is registered under the Investment Company Act of 1940, as amended
("1940 Act"), as a diversified, open-end management investment company. The
Company has eight series of shares in operation, each series corresponding to a
distinct portfolio of investments.
The Fund offers Class A, Class B, and Advisor Class shares, each of which has
equal rights as to assets and voting privileges. Class A and Class B each has
exclusive voting rights with respect to its distribution plan. Investment
income, realized and unrealized capital gains and losses, and the common
expenses of the Fund are allocated on a pro rata basis to each class based on
the relative net assets of each class to the total net assets of the Fund. Each
class of shares differs in its respective distribution expenses, and may differ
in its transfer agent, registration, and certain other class-specific fees and
expenses.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Funds in the preparation of the
financial statements.
(A) PORTFOLIO VALUATION
The Fund calculates the net asset value of Fund shares and completes orders to
purchase, exchange or repurchase Fund shares on each business day, with the
exception of those days on which the New York Stock Exchange is closed.
Equity securities are valued at the last sale price on the exchange on which
such securities are traded or on the principal over-the-counter market in which
such securities are traded, as of the close of business on the day the
securities are being valued, or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined by Chancellor LGT Asset
Management, Inc. (the "Manager") to be the primary market.
Fixed income investments are valued at the mean of representative quoted bid and
asked prices for such investments or, if such prices are not available, at
prices for investments of comparative maturity, quality and type; however, when
the Manager deems it appropriate, prices obtained for the day of valuation from
a bond pricing service will be used. Short-term investments with a maturity of
60 days or less are valued to amortized cost, adjusted for foreign exchange
translation and market fluctuation, if any.
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Fund's Board of Trustees.
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Company's Board of Trustees.
(B) FOREIGN CURRENCY TRANSLATION
The accounting records of the Fund are maintained in U.S. dollars. The market
values of foreign securities, currency holdings, other assets and liabilities
are recorded in the books and records of the Fund after translation to U.S.
dollars based on the exchange rates on that day. The cost of each security is
determined using historical exchange rates. Income and withholding taxes are
translated at prevailing exchange rates when earned or incurred.
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuation
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains and losses arise from sales and
maturities of short-term securities, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the differences between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains or losses arise from changes in the
value of assets and liabilities other than investments in securities at year
end, resulting from changes in exchange rates.
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Fund, it is the Fund's
policy to always receive, as collateral, U.S. government securities or other
high quality debt securities of which the value, including accrued interest, is
at least equal to the amount to be repaid to the Fund under each agreement at
its maturity.
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract fluctuates with changes in currency
exchange rates. The Forward Contract is marked-to-market daily and the change in
market value is recorded by the Fund as an unrealized gain or loss. When the
Forward Contract is closed, the Fund records a realized gain or loss equal to
the difference between the value at the time it was opened and the value at the
time it was closed. The Fund could be exposed to risk if a counterparty is
unable to meet the terms of a contract or if the value of the currency changes
unfavorably. The Fund may enter into Forward Contracts in connection with
planned purchases or sales of securities, or to hedge against adverse
fluctuations in exchange rates between currencies.
F14
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
(E) OPTION ACCOUNTING PRINCIPLES
When the Fund writes a call or put option, an amount equal to the premium
received is included in the Fund's "Statement of Assets and Liabilities" as an
asset and an equivalent liability. The amount of the liability is subsequently
market-to-market to reflect the current market value of the option. The current
market value of an option listed on a traded exchange is valued at its last bid
price, or, in the case of on over-the-counter option, is valued at the average
of the last bid prices obtained from brokers, unless a quotation from only one
broker is available, in which case only that broker's price will be used. If an
option expires on its stipulated expiration date or if the Fund enters into a
closing purchase transaction, a gain or loss is realized without regard to any
unrealized gain or loss on the underlying security, and the liability related to
such option is extinguished. If a written call option is exercised, a gain or
loss is realized from the sale of the underlying security and the proceeds of
the sale are increased by the premium originally received. If a written put
option is exercised, the cost of the underlying security purchased would be
decreased by the premium originally received. The Fund can write options only on
a covered basis, which, for a call, requires that the Fund hold the underlying
security, and, for a put, requires the Fund to set aside cash, U.S. government
securities or other liquid securities in an amount not less than the exercise
price or otherwise provide adequate cover at all times while the put option is
outstanding. The Fund may use options to manage its exposure to the stock market
and to fluctuations in currency values or interest rates.
The premium paid by the Fund for the purchase of a call or put option is
included in the Fund's "Statement of Assets and Liabilities" as an investment
and subsequently "marked-to-market" to reflect the current market value of the
option. If an option which the Fund has purchased expires on the stipulated
expiration date, the Fund realizes a loss in the amount of the cost of the
option. If the Fund enters into a closing sale transaction, the Fund realizes a
gain or loss, depending on whether proceeds from the closing sale transaction
are greater or less than the cost of the option. If the Fund exercises a call
option, the cost of the securities acquired by exercising the call is increased
by the premium paid to buy the call. If the Fund exercises a put option, it
realizes a gain or loss from the sale of the underlying security, and the
proceeds from such sale are decreased by the premium originally paid.
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Fund may forego the
opportunity of profit if the market value of the underlying security or index
increases and the option is exercised. The risk in writing a put option is that
the Fund may incur a loss if the market value of the underlying security or
index decreases and the option is exercised. In addition, there is the risk the
Fund may not be able to enter into a closing transaction because of an illiquid
secondary market.
(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract the
Fund is required to pledge to the broker an amount of cash or securities equal
to the minimum "initial margin" requirements of the exchange on which the
contract is traded. Pursuant to the contract, the Fund agrees to receive from or
pay to the broker an amount of cash equal to the daily fluctuation in value of
the contract. Such receipts or payments are known as "variation margin" and are
recorded by the Fund as unrealized gains or losses. When the contract is closed,
the Fund records a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the value at the time it was
closed. The potential risk to the Fund is that the change in value of the
underlying securities may not correlate to the change in value of the contracts.
The Fund may use futures contracts to manage its exposure to the stock market
and to fluctuations in currency values or interest rates.
(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out basis, unless otherwise specified. Dividends are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Where a high
level of uncertainty exists as to its collection, income is recorded net of all
withholding tax with any rebate recorded when received. The Fund may trade
securities on other then normal settlement terms. This may increase the risk if
the other party to the transaction fails to deliver and causes the Fund to
subsequently invest at less advantageous prices.
(H) PORTFOLIO SECURITIES LOANED
At December 31, 1997, stocks with an aggregate value of approximately
$13,985,826 were on loan to brokers. The loans were secured by cash collateral
of $14,709,765, received by the Fund. Cash collateral is received by the Fund
against loaned securities in an amount at least equal to 105% of the market
value of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 103% of the market value of the loaned
securities during the period of the loan. For the year ended December 31, 1997,
the Fund received securities lending fees of $277,743. Fees received from
securities loaned were used to reduce the Fund's custodian and administrative
expenses.
(I) TAXES
It is the policy of the Fund to meet the requirements for qualification as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended ("Code"). It is also the intention of the Fund to make distributions
sufficient to avoid imposition of any excise tax under Section 4982 of the Code.
Therefore, no provision has been made for Federal taxes on income, capital
gains, or unrealized appreciation of securities held, or excise tax on income
and capital gains.
(J) DISTRIBUTION TO SHAREHOLDERS
Distribution to shareholders are recorded by the Fund on the ex-date. Income and
capital gain distributions are determined in accordance with Federal income tax
regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments of income and gains
on various investment securities held by the Fund and timing differences.
(K) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investments of domestic origin. The Fund's investments in emerging market
countries may involve greater risks than investments in more developed markets,
and the prices of such investments may be volatile. These risks of investing in
foreign and emerging markets may include foreign currency exchange rate
F15
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
fluctuations, perceived credit risk, adverse political and economic developments
and possible adverse foreign government intervention.
(L) RESTRICTED SECURITIES
The Fund is permitted to invest in privately placed restrictions securities.
These securities may be resold in transactions exempt from registration or to
the public if the securities are registered. Disposal of these securities may
involve time-consuming negotiations and expense, and prompt sale at an
acceptable price may be difficult.
(M) INDEXED SECURITIES
The Fund may invest in indexed securities whose value is linked either directly
or indirectly to changes in foreign currencies, interest rates, equities,
indices, or other reference instruments. Indexed securities may be more volatile
than the reference instrument itself, but any loss is limited to the amount of
the original investment.
(N) LINE OF CREDIT
The Fund, along with certain other funds ("GT Funds") advised and/or
administered by the Manager, has a line of credit with BankBoston and State
Street Bank & Trust Company. The arrangements with the banks allow the Fund and
the GT Funds to borrow an aggregate maximum amount of $250,000,000. The Fund is
limited to borrowing up to 33 1/3% of the value of the Fund's total assets.
For the year ended December 31, 1997, the weighted average outstanding daily
balance of bank loans (based on the number of days the loans were outstanding)
was $3,563,759 with a weighted average interest rate of 6.32%. Interest expense
for the year ended December 31, 1997 was $18,147, and is included in "Other
expenses" on the Statement of Operations.
2. RELATED PARTIES
Chancellor LGT Asset Management, Inc. is the Fund's investment manager and
administrator. The Fund pays investment management and administration fees at
the following annualized rates: 0.975% on the first $500 million of the average
daily net assets of the Fund; 0.95% on the next $500 million; 0.925% on the next
$500 million and 0.90% on amounts thereafter. These fees are computed daily and
paid monthly, and are subject to reduction in any year to the extent that the
Fund's expenses (exclusive of brokerage commissions, taxes, interest,
distribution-related expenses and extraordinary expenses) exceed the most
stringent limits prescribed by the laws or regulations of any state in which the
Fund's shares are offered for sale, based on the average total net asset value
of the Fund.
GT Global, Inc. ("GT Global"), an affiliate of the Manager, serves as the Fund's
distributor. The Fund offers Class A, Class B, and Advisor Class shares for
purchase.
Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Fund's current
prospectus. GT Global collects the sales charges imposed on sales of Class A
shares, and reallows a portion of such charges to dealers through which the
sales are made. For the year ended December 31, 1997, GT Global retained $11,166
of such sales charges. Purchases of Class A shares exceeding $500,000 may be
subject to a contingent deferred sales charge ("CDSC") upon redemption, in
accordance with the Fund's current prospectus. During the year ended December
31, 1997, GT Global collected CDSC's in the amount of $6,515. GT Global also
makes ongoing shareholder servicing and trail commission payments to dealers
whose clients hold Class A shares.
Class B shares are not subject to initial sales charges. When Class B shares are
sold, GT Global from its own resources pays commissions to dealers through which
the sales are made. Certain redemptions of Class B shares made within six years
of purchase are subject to CDSC's, in accordance with the Fund's current
prospectus. During the year ended December 31, 1997, GT Global collected CDSC's
in the amount of $351,900. In addition, GT Global makes ongoing shareholder
servicing and trail commission payments to dealers whose clients hold Class B
shares.
Pursuant to Rule 12b-1 under the 1940 Act, the Company's Board of Trustees has
adopted separate distribution plans with respect to the Fund's Class A shares
("Class A Plan") and Class B shares ("Class B Plan"), pursuant to which the Fund
reimburses GT Global for a portion of its shareholder servicing and distribution
expenses. Under the Class A Plan, the Fund may pay GT Global a service fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class A shares for its expenditures incurred in servicing and maintaining
shareholder accounts, and may pay GT Global a distribution fee at the annualized
rate of up to 0.35% of the average daily net assets of the Fund's Class A
shares, less any amounts paid by the Fund as the aforementioned service fee, for
its expenditures incurred in providing services as distributor. All expenses for
which GT Global is reimbursed under the Class A Plan will have been incurred
within one year of such reimbursement.
Pursuant to the Fund's Class B Plan, the Fund may pay GT Global a service fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class B shares for its expenditures incurred in servicing and maintaining
shareholder accounts, and may pay GT Global a distribution fee at the annualized
rate of up to 0.75% of the average daily net assets of the Fund's Class B shares
for its expenditures incurred in providing services as distributor. Expenses
incurred under the Class B Plan in excess of 1.00% annually may be carried
forward for reimbursement in subsequent years as long as that Plan continues in
effect.
The Manager and GT Global have voluntarily undertaken to limit the Fund's
expenses (exclusive of brokerage commissions, taxes, interest and extraordinary
items) to the maximum annual level of 2.25%, and 2.90%, and 1.90% of the average
daily net assets of the Fund's Class A, Class B and Advisor Class shares,
respectively. If necessary, this limitation will be effected by waivers by the
Manager of investment management and administration fees, waivers by GT Global
of payments under the Class A Plan and/or Class B Plan and/or reimbursements by
the Manager or GT Global of portions of the Fund's other operating expenses.
Effective January 1, 1998, the Manager and GT Global have undertaken to limit
the Fund's expenses (exclusive of brokerage commissions, taxes, interest, and
extraordinary expenses) to the annual rate of 2.00%, 2.65%, and 1.65% of the
average daily net assets of the Fund's Class A, Class B and Advisor Class
shares, respectively. This undertaking may be changed or eliminated in the
future.
GT Global Investor Services, Inc. ("GT Services"), an affiliate of the Manager
and GT Global, is the transfer agent of the Fund. For performing shareholder
servicing, reporting, and general transfer
F16
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
agent services, GT Services receives an annual maintenance fee of $17.50 per
account, a new account fee of $4.00 per account, a per transaction fee of $1.75
for all transactions other than exchanges and a per exchange fee of $2.25. GT
Services also is reimbursed by the Fund for its out-of-pocket expenses for such
items as postage, forms, telephone charges, stationery and office supplies.
The Manager is the pricing and accounting agent for the Fund. The monthly fee
for these services to the Manager is a percentage, not to exceed 0.03% annually,
of the Fund's average daily net assets. The annual fee rate is derived by
applying 0.03% to the first $5 billion of assets of all registered mutual funds
advised by the Manager and 0.02% to the assets in excess of $5 billion and
allocating the result according to the Fund's average daily net assets.
The Company pays each of its Trustees who is not an employee, officer or
director of GT Capital, GT Global or GT Services $5,000 per year plus $300 for
each meeting of the board or any committee thereof attended by the Trustee.
3. PURCHASES AND SALES OF SECURITIES
For the year ended December 31, 1997, purchases and sales of investment
securities by the Fund, other than U.S. government obligations and short-term
investments, aggregated $157,702,649 and $236,135,186, respectively. There were
no purchases or sales of U.S. government obligations by the Fund during the
year.
4. CAPITAL SHARES
At December 31, 1997, there were an unlimited number of shares of beneficial
interest authorized, at no par value. Transactions in capital shares of the Fund
were as follows:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996
----------------------------------- --------------------------------------
CLASS A SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------- --------------- ------------------ ---------------- --------------------
<S> <C> <C> <C> <C>
Shares sold............................. 40,276,923 $ 372,306,238 122,327,179 $ 1,141,723,541
Shares issued in connection with
reinvestment of distributions......... 3,306,465 24,897,200 1,912,490 16,848,644
--------------- ------------------ ---------------- --------------------
43,583,388 397,203,438 124,239,669 1,158,572,185
Shares repurchased...................... (46,298,211) (433,072,839) (136,198,803) (1,274,970,792)
--------------- ------------------ ---------------- --------------------
Net decrease............................ (2,714,823) $ (35,869,401) (11,959,134) $ (116,398,607)
--------------- ------------------ ---------------- --------------------
--------------- ------------------ ---------------- --------------------
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996
----------------------------------- --------------------------------------
CLASS B SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------- --------------- ------------------ ---------------- --------------------
<S> <C> <C> <C> <C>
Shares sold............................. 25,433,444 $ 233,714,318 11,345,619 $ 103,852,840
Shares issued in connection with
reinvestment of distributions......... 1,311,193 9,480,349 678,796 5,819,941
--------------- ------------------ ---------------- --------------------
26,744,637 243,194,667 12,024,415 109,672,781
Shares repurchased...................... (26,525,397) (246,915,890) (12,451,843) (114,133,394)
--------------- ------------------ ---------------- --------------------
Net increase (decrease)................. 219,240 $ (3,721,223) (427,428) $ (4,460,613)
--------------- ------------------ ---------------- --------------------
--------------- ------------------ ---------------- --------------------
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996
----------------------------------- --------------------------------------
ADVISOR CLASS SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------- --------------- ------------------ ---------------- --------------------
<S> <C> <C> <C> <C>
Shares sold............................. 2,419,305 $ 23,205,242 2,233,829 $ 21,033,137
Shares issued in connection with
reinvestment of distributions......... 7,757 58,878 3,723 33,098
--------------- ------------------ ---------------- --------------------
2,427,062 23,264,120 2,237,552 21,066,235
Shares repurchased...................... (2,441,431) (23,309,340) (2,228,201) (21,036,679)
--------------- ------------------ ---------------- --------------------
Net increase (decrease)................. (14,369) $ (45,220) 9,351 $ 29,556
--------------- ------------------ ---------------- --------------------
--------------- ------------------ ---------------- --------------------
</TABLE>
5. EXPENSE REDUCTIONS
The Manager has directed certain portfolio trades to brokers who paid a portion
of the Fund's expenses. For the year ended December 31, 1997, the Fund's
expenses were reduced by $20,307 under these arrangements.
6. SUBSEQUENT EVENT
On January 30, 1998, Liechtenstein Global Trust ("LGT") and AMVESCAP PLC
("AMVESCAP") entered into an agreement by which AMVESCAP will acquire LGT's
Asset Management Division, including Chancellor LGT Asset Management, Inc.
AMVESCAP is the holding company of the AIM and INVESCO asset management
businesses.
- --------------
FEDERAL TAX INFORMATION (UNAUDITED):
For its fiscal year ended December 31, 1997, the total amount of income received
by the Fund from sources within foreign countries and possessions of the United
States was approximately $.2321 per share (representing an approximate total of
$4,876,007). The total amount of taxes paid by the Fund to such countries was
approximately $.0343 per share (representing an approximate total of $720,333).
Pursuant to Section 852 of the Internal Revenue Code, the Fund designates
$26,594,230 as a capital gain dividend for the fiscal year ended December 31,
1997.
F17
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
NOTES
- --------------------------------------------------------------------------------
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
GT GLOBAL FUNDS
GT GLOBAL OFFERS A BROAD RANGE OF FUNDS TO COMPLEMENT MANY INVESTORS'
PORTFOLIOS. FOR MORE INFORMATION AND A PROSPECTUS ON ANY OF THE GT GLOBAL
FUNDS, PLEASE CONTACT YOUR INVESTMENT ADVISOR OR CALL GT GLOBAL DIRECTLY AT
1-800-824-1580. THE PROSPECTUS CONTAINS MORE COMPLETE INFORMATION, INCLUDING
CHARGES, EXPENSES AND THE RISKS OF GLOBAL AND EMERGING MARKET INVESTING.
INVESTORS SHOULD READ THE PROSPECTUS CAREFULLY BEFORE INVESTING.
GROWTH FUNDS
/ / GLOBALLY DIVERSIFIED FUNDS
GT GLOBAL NEW DIMENSION FUND
Captures global growth opportunities by investing directly in the six GT Global
Theme Funds
GT GLOBAL WORLDWIDE GROWTH FUND
Invests around the world, including the U.S.
GT GLOBAL INTERNATIONAL GROWTH FUND
Provides portfolio diversity by investing outside the U.S.
GT GLOBAL EMERGING MARKETS FUND
Gives access to the growth potential of developing economies
GT GLOBAL DEVELOPING MARKETS FUND
Invests in debt and equity securities of developing market issuers
/ / GLOBAL THEME FUNDS
GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
Focuses on worldwide opportunities from the demand for consumer products and
services
GT GLOBAL FINANCIAL SERVICES FUND
Focuses on the worldwide opportunities from the demand for financial services
and products
GT GLOBAL HEALTH CARE FUND
Invests in growing health care industries worldwide
GT GLOBAL INFRASTRUCTURE FUND
Seeks companies that build, improve or maintain infrastructure
GT GLOBAL NATURAL RESOURCES FUND
Concentrates on companies that own, explore or develop natural resources
GT GLOBAL TELECOMMUNICATIONS FUND
Invests in companies worldwide that develop, manufacture or sell
telecommunications services or equipment
/ / REGIONALLY DIVERSIFIED FUNDS
GT GLOBAL NEW PACIFIC GROWTH FUND
Offers access to the emerging and established markets of the Pacific Rim,
excluding Japan
GT GLOBAL EUROPE GROWTH FUND
Focuses on investment opportunities in Europe
GT GLOBAL LATIN AMERICA GROWTH FUND
Invests in the emerging markets of Latin America
/ / SINGLE COUNTRY FUNDS
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
Invests in equity securities of small U.S. companies
GT GLOBAL AMERICA MID CAP GROWTH FUND
Concentrates on medium-sized companies in the U.S.
GT GLOBAL AMERICA VALUE FUND
Focuses on equity securities of U.S. companies believed to be undervalued
GT GLOBAL JAPAN GROWTH FUND
Provides U.S. investors with direct access to the Japanese market
GROWTH AND INCOME FUND
GT GLOBAL GROWTH & INCOME FUND
Invests in blue-chip stocks and government securities
INCOME FUNDS
GT GLOBAL GOVERNMENT INCOME FUND
Earns monthly income from global government securities
GT GLOBAL STRATEGIC INCOME FUND
Allocates its assets among debt securities from the U.S., developed foreign
countries and emerging markets
GT GLOBAL HIGH INCOME FUND
Invests in debt securities in emerging markets
GT GLOBAL FLOATING RATE FUND, INC.
Invests primarily in senior secured floating rate loans with the potential to
achieve a high level of current income
MONEY MARKET FUND
GT GLOBAL DOLLAR FUND
Invests in high-quality, U.S. dollar-denominated money market securities
worldwide for stability and preservation of capital
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THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENT PROSPECTUS.
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GT Global, Inc.
Fifty California Street
27th Floor
San Francisco, California
94111-4624
DATED MATERIAL
PLEASE EXPEDITE
GT Global International Growth Fund
INTAR802030M
