- --------------------------------------------------------------------------------
Board of Directors
- --------------------------------------------------------------------------------
Gilbert de Botton - President
Chairman, Global Asset Management Limited,
London.
George W. Landau
Senior Adviser and Chairman, Latin America Advisory
Board, Coca-Cola International, New York.
Therese Meier
Managing Director, Global Asset Management
GAM (Schweiz) AG, Zurich.
Madelon DeVoe Talley
Commissioner, Port Authority of New York and
New Jersey, New York.
Roland Weiser
President, Intervista, Summit, New Jersey.
Address of the Company:
135 East 57th Street,
New York, New York 10022.
Tel: (212) 407 4600
1-800-426-4685 (toll free)
Fax: (212) 888 4989
Registrar and Transfer Agent:
Chase Global Funds Services Company,
P.O. Box 2798,
Boston, Massachusetts 02208.
Tel: (617) 557 8000 ext 6610
1-800-356-5740 (toll free)
Fax: (617) 557 8698
- --------------------------------------------------------------------------------
Copies of this report may be obtained from the Fund, from the
Transfer Agent or from:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
In the Isle of Man;
GAM Administration Limited,
11 Athol Street, Douglas, Isle of Man IM99 1HH, British Isles
Tel: 44-1624 632632 Fax: 44-1624 625956 Tlx: 628625 GAMAD G
In the United Kingdom (for authorized persons only);
Global Asset Management Limited, regulated by IMRO,
12 St. James's Place, London, SW1A 1NX, UK
Tel: 44-71-493 9990 Fax: 44-71-493 0715 Tlx: 296099 GAMUK G
On Internet;
Information on GAM's SEC-registered funds -
http://www.usinfo.gam.com
Email enquiries on GAM - [email protected]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GLOBAL ASSET MANAGEMENT(R)
GAM Funds, Inc.
SEMI-ANNUAL REPORT
(UNAUDITED)
FOR THE PERIOD ENDED
30TH JUNE, 1996
This report has been prepared for the information of shareholders of GAM Funds,
Inc., and is not authorized for distribution to prospective investors unless
preceded or accompanied by an effective prospectus that includes information
regarding the Fund's objectives, policies, management, records and other
information.
GAM Funds, Inc.
Investment Adviser
GAM International Management Limited
[GAM(R)]
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
The GAM Group
- --------------------------------------------------------------------------------
The GAM group was founded in April 1983 by Gilbert de Botton. GAM's
corporate policy is to attempt to harness the top investment talent in the
world, not only in-house but also outside the GAM organization, in order to
provide above-average, long-term growth. The GAM group currently has
approximately US$9.2 billion under management and employs a worldwide staff of
about 390 people.
For US investors, GAM offers GAM Funds, Inc. an open-end diversified
management investment company registered under the Investment Company Act of
1940, as amended. The Fund consists of eight open-end mutual funds - GAM
International, GAM Global, GAM Europe, GAM Pacific Basin, GAM Japan Capital, GAM
North America, GAM Asian Capital and GAMerica Capital Funds.
For additional information about any of the GAM Funds, please contact your
financial consultant or call GAM at 1-800-426-4685 (toll free).
- --------------------------------------------------------------------------------
Contents
- --------------------------------------------------------------------------------
GAM International ...................................................... 2
GAM Global ............................................................. 8
GAM Europe ............................................................. 13
GAM Pacific Basin ...................................................... 17
GAM Japan Capital ...................................................... 22
GAM North America ...................................................... 27
GAM Asian Capital ...................................................... 31
GAMerica Capital ....................................................... 35
<PAGE>
- --------------------------------------------------------------------------------
GAM International Fund
- --------------------------------------------------------------------------------
Fund Management
- --------------------------------------------------------------------------------
- ---------------- John R. Horseman joined GAM in 1987, initially as a member
of the firms Asian team based in Hong Kong. In 1990 he moved
to GAMs London office to assume responsibility for a number
[PHOTO] of GAMs global and international funds. Prior to joining GAM
he worked for BA Investment Management International Ltd and
was responsible for certain of the Bank of Americas global
equity funds. Mr. Horseman was educated at the University of
- ---------------- Birmingham.
The Funds investment objective is long-term capital appreciation, generally
through investment in equity securities issued by companies in countries other
than the United States, including Canada, the United Kingdom, Continental Europe
and the Pacific Basin. However, if the Fund determines that the long-term
capital appreciation of debt securities may equal or exceed the return on equity
securities, it may be substantially invested in debt securities of companies and
governments, their agencies and instrumentalities. Any income realized by the
Fund on its investments will be incidental to its goal of long-term capital
appreciation.
Report to Shareholders
- --------------------------------------------------------------------------------
THE FACTS - CLASS A SHARES
<TABLE>
<CAPTION>
GAM
International Average
GAM Class A MSCI 1 Month
International (after EAFE Deposit
Class A sales load) Index Rate
<C> <C> <C> <C> <C>
30th June, 96 US$19.87 1,177.85
- ----------------------------------------------------------------------------------------
% % % %
- ----------------------------------------------------------------------------------------
Quarter to June, 96 - 2.12 - 7.01 +1.66 +1.30
- ----------------------------------------------------------------------------------------
Jan-June, 1996 - 7.02 -11.67 +4.67 +2.62
- ----------------------------------------------------------------------------------------
Average annual total return:-
- ----------------------------------------------------------------------------------------
1 year to June, 96 + 0.88 -4.16 +13.62 +5.62
- ----------------------------------------------------------------------------------------
5 years to June, 96 +18.32 +17.11 +10.33 +4.55
- ----------------------------------------------------------------------------------------
10 years to June, 96 +15.08 +14.50 +10.81 +6.23
- ----------------------------------------------------------------------------------------
Since inception +20.42 +19.89 +17.18 +6.49
- ----------------------------------------------------------------------------------------
</TABLE>
Performances are calculated on a total return basis. Class A inception was
on 2nd January, 1985 and Class D on 18 September, 1995. Indications of past
performance are not necessarily indicative of future performance. The investment
return and principal value of an investment will fluctuate so that an investors
shares, when redeemed, may be worth more or less than their original cost.
2
<PAGE>
- --------------------------------------------------------------------------------
GAM International Fund -- Report to Shareholders (continued)
- --------------------------------------------------------------------------------
[NEED PLOT POINTS FOR GRAPH]
NOTE: The graphs compare the performance results of a hypothetical $10,000
investment in either Class and a comparable index. The performances of Class A
and Class D are also shown after adjustment to reflect the maximum sales loads,
which are waived for certain investors. The performance of the index does not
reflect brokerage commissions and other expenses that would be incurred to
acquire a comparable portfolio of securities.
- -----------------------
Sources used are the net asset value of the Fund computed daily and Morgan
Stanley Capital International.
The MSCI Europe, Australian and Far East Index is a market value weighted,
unmanaged index on the weighted share prices of some 1,000 companies listed on
the stock exchanges of Australia, Austria, Belgium, Denmark, France, Germany,
Hong Kong, Italy, Japan, Netherlands, Norway, Singapore/Malaysia, Spain, Sweden,
Switzerland and the United Kingdom. The combined market capitalisation of these
companies represents approximately 60% of the aggregate market value of the
stock exchanges of the above 16 countries. The percentage change in the value of
the index includes dividends reinvested.
THE FACTS -- CLASS D SHARES
<TABLE>
<CAPTION>
GAM
International Average
GAM Class D MSCI 1 Month
International (after EAFE Deposit
Class D sales load) Index Rate
<C> <C> <C> <C> <C>
30th June, 96 US$19.78 1,177.85
- -----------------------------------------------------------------------------------------
% % % %
- -----------------------------------------------------------------------------------------
Quarter to June, 96 - 2.27 - 5.69 + 1.66 + 1.30
- -----------------------------------------------------------------------------------------
Jan - June, 1996 - 7.35 -10.60 + 4.67 + 2.62
- -----------------------------------------------------------------------------------------
Inception to June, 96 + 1.29 - 2.26 +11.76 + 4.29
- -----------------------------------------------------------------------------------------
</TABLE>
[NEED PLOT POINTS FOR GRAPH]
3
<PAGE>
- --------------------------------------------------------------------------------
GAM International Fund -- Report to Shareholders (continued)
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN -- CLASS A
[The following table represents a chart in the printed piece.]
One Year Five Years Ten Years Since Inception
- --------------------------------------------------------------------------------
% % % %
- --------------------------------------------------------------------------------
GAM International 0.88 18.32 15.08 20.42
- --------------------------------------------------------------------------------
GAM International
(after sales load) - 4.16 17.11 14.50 19.89
- --------------------------------------------------------------------------------
MSCI EAFE Index 13.62 10.33 10.81 17.18
ANNUAL PERFORMANCE -- CLASS A
[GRAPH]
GAM
GAM International
International Class A MSCI
Class A (after sales load) EAFE Index
Year % % %
- --------------------------------------------------------------------------------
1992 3.08 (2.07) (11.85)
1993 79.96 70.97 32.94
1994 (10.23) (14.71) 8.06
1995 30.09 23.59 11.55
1996* (7.02) (11.67) 4.67
* 6 months
THE COMMENT
After undergoing consolidation in the first quarter of 1996, recent
performance has been more stable. There are no new trends of significance to
report. However, periods of apparent calm can disguise or mark the beginnings of
important new trends. In Europe, recent weakness in the German economy which has
necessitated sharp reductions in short-term interest rates during the last year
may be drawing to a close, as likely better economic news is anticipated. If
correct, this should provide support for the DM and with low inflation
continuing to prevail, allow long term interest rates in Europe to resume their
decline after the recent sell-off. The Fund is placed well to benefit from these
developments with a substantial proportion of it's assets placed in the European
arena.
In Japan, corporate year end results which were announced during the
quarter confirmed that some benefits are beginning to emerge from the massive
stimulus in the form of fiscal spending and lower interest rates which has been
given to the economy over the past year. How sustainable the upturn proves to
be, will have a considerable influence on the likely returns from the stock
market over the coming 12 months. Any return to a deflationary course would have
negative implications not widely anticipated in current stock market ratings.
After a strong start to the year, the smaller Asian markets have tended to
drift during the quarter, unnerved by the rise in interest rates in the US and
without much specific good news of their own to carry them further. The Fund's
exposure to these markets is light and unchanged from earlier levels.
4
<PAGE>
- --------------------------------------------------------------------------------
GAM International Fund -- Statement of Investments
- --------------------------------------------------------------------------------
AS AT 30TH JUNE, 1996 (UNAUDITED)
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ FUND
- --------------------------------------------------------------------------------
ADJUSTABLE RATE INDEX NOTES
UNITED KINGDOM
+ DLJ ARIN, Indexed to 320,000 shares,
British Biotech 1997-04-30 10,094,193 1.18
+ DLJ ARIN, Indexed to 1,100,000 shares,
General Cable 1997-05-05 948,870 0.11
+ DLJ ARIN, Indexed to 1,100,000 shares,
General Cable 1997-06-10 1,094,568 0.13
+ DLJ ARIN, Indexed to 1,200,000 shares,
TeleWest Communications
1996-09-16 1,294,219 0.15
+ DLJ ARIN, Indexed to 3,250,000 shares,
TeleWest Communications
1997-04-03 3,420,118 0.40
+ DLJ ARIN, Indexed to 1,200,000 shares,
TeleWest Communications
1997-04-25 918,357 0.11
----------- -----
17,770,325 2.08
----------- -----
TOTAL ADJUSTABLE RATE INDEX NOTES
(COST $14,083,590) 17,770,325 2.08
----------- -----
BOND WARRANTS
GERMANY
*5,974,000 Bundes Deutschland 6.25% Wts
July 1997 8,642,883 1.01
----------- -----
8,642,883 1.01
----------- -----
TOTAL BOND WARRANTS (COST $8,546,917) 8,642,883 1.01
----------- -----
BONDS
FRANCE
161.452m OAT 6% 2025-10-25 26,487,324 3.08
----------- -----
26,487,324 3.08
----------- -----
GERMANY
37.515m Austria 6.5% 2024-01-10 22,374,546 2.60
++209.75m Bundes Deutschland 6.25%
2024-01-04 122,140,943 14.22
++32.352m LKB Baden Wurttenburg 6.5%
2008-09-15 20,573,034 2.39
++14.56m Oster. Kontrollbank 7%
2005-08-08 9,815,469 1.14
----------- -----
174,903,992 20.35
----------- -----
NETHERLANDS
36m Nederland 7.5% 2023-01-15 22,241,261 2.60
----------- -----
22,241,261 2.60
----------- -----
SWITZERLAND
26.247m Switzerland 4.25% 2014-01-06 19,107,816 2.22
----------- -----
19,107,816 2.22
----------- -----
UNITED KINGDOM
7,900,000 War Loan 3.5% 5,238,887 0.61
----------- -----
5,238,887 0.61
----------- -----
TOTAL BONDS (COST $257,157,629) 247,979,280 28.86
----------- -----
CONVERTIBLES
UNITED KINGDOM
5,050,000 Inchcape 6.25% CV 20080510 6,374,205 0.74
1,766,000 Northern Foods 6.75% CV
2008-08-08 2,352,535 0.27
----------- -----
8,726,740 1.01
----------- -----
TOTAL CONVERTIBLES (COST $8,569,879) 8,726,740 1.01
----------- -----
EQUITIES
BELGIUM
45,000 Kredietbank 13,501,347 1.57
----------- -----
13,501,347 1.57
----------- -----
DENMARK
210,000 Danske Bank 14,085,318 1.64
----------- -----
14,085,318 1.64
----------- -----
FRANCE
130,000 Credit Local de France 10,588,521 1.23
57,839 Eridania Beghinsay 9,062,202 1.05
134,000 Union des Assurances Fdrales 16,540,798 1.93
----------- -----
36,191,521 4.21
----------- -----
GERMANY
117,570 Berentzen-Gruppe 4,870,884 0.57
----------- -----
4,870,884 0.57
----------- -----
HONG KONG
7,608,000 Hong Kong & China Gas 12,138,203 1.41
986,416 HSBC Holdings (HKD) 14,909,495 1.74
7,754,000 JCG Holdings 6,310,784 0.73
----------- -----
33,358,482 3.88
----------- -----
5
<PAGE>
- --------------------------------------------------------------------------------
GAM INTERNATIONAL FUND -- STATEMENT OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ FUND
- --------------------------------------------------------------------------------
JAPAN
250,000 Advantest 9,937,405 1.16
875,000 Canon 18,230,000 2.12
200,000 Kirin Beverage 2,942,386 0.34
109,000 Nichiei (8577) 7,270,983 0.85
200,000 Rohm 13,231,599 1.54
368,000 Santen Pharmaceutical 8,574,953 1.00
220,000 Sony 14,494,449 1.69
620,000 Takeda Chemical 10,990,999 1.28
----------- -----
85,672,774 9.98
----------- -----
MALAYSIA
2,700,000 UMW Holdings 9,633,193 1.12
----------- -----
9,633,193 1.12
----------- -----
NETHERLANDS
917,843 Fortis AMEV 26,318,320 3.06
109,212 Heijmans Group 9,919,800 1.16
406,000 ING 12,117,832 1.41
----------- -----
48,355,952 5.63
----------- -----
SINGAPORE
975,000 City Developments 7,600,992 0.88
702,000 Development Bank of Singapore
(FR) 8,756,343 1.02
780,000 Singapore Bus Service (FR) 5,527,994 0.64
466,000 Singapore Press Holdings (FR) 9,148,264 1.07
*3,363,000 Want Want Holdings 9,046,470 1.05
----------- -----
40,080,063 4.66
----------- -----
SPAIN
73,200 Banco Popular Registered 13,063,104 1.52
----------- -----
13,063,104 1.52
----------- -----
SWEDEN
425,270 OM Gruppen 11,687,422 1.36
----------- -----
11,687,422 1.36
----------- -----
SWITZERLAND
3,000 Roche Holding Genussscheine 22,908,000 2.67
20,020 Sandoz Registered 22,918,896 2.67
65,560 Swiss Bank Corp. Registered 12,954,656 1.51
----------- -----
58,781,552 6.85
----------- -----
UNITED KINGDOM
3,024,000 B.A.T. Industries 23,535,898 2.74
2,200,000 Barclays 26,401,732 3.07
48,015 Barclays (Restricted) 576,218 0.07
957,000 Glaxo Wellcome 12,889,685 1.50
1,340,000 Hyder 14,852,858 1.73
6,000,000 National Grid Group 15,892,305 1.85
1,140,000 RJB Mining 9,793,575 1.14
3,000,000 Scottish Power 14,167,920 1.65
1,000,000 Severn Trent 8,451,040 0.98
1,400,000 South West Waterb 14,223,846 1.66
1,913,785 Thames Water 16,842,413 1.96
1,818,066 United Utilities 15,293,939 1.78
145,015 United Utilities (Restricted) 1,219,896 0.14
6,434,000 Utility Cable 1,849,116 0.22
----------- -----
175,990,441 20.49
----------- -----
TOTAL EQUITIES (COST $537,240,972) 545,272,053 63.48
----------- -----
EQUITY WARRANTS
HONG KONG
*634,000 Hong Kong & China Gas Wts 165,856 0.02
----------- -----
165,856 0.02
----------- -----
SWITZERLAND
*3,000 Roche Holding Wts 1998 94,200 0.01
*7,800 Swiss Bank Corp. Bearer Wts 1995 25,584 --
----------- -----
119,784 0.01
----------- -----
TOTAL EQUITY WARRANTS (COST $85,829) 285,640 0.03
----------- -----
OPTIONS
FRANCE
*938.2m OAT 6% 1997-01-17
84.36 Calls January 1996 3,902,898 0.45
----------- -----
3,902,898 0.45
----------- -----
NETHERLANDS
*955,000 Nederland 7.5% 2023-01-15
101 Calls July 1996 2,458,380 0.29
----------- -----
2,458,380 0.29
----------- -----
TOTAL OPTIONS (COST $9,206,569) 6,361,278 0.74
----------- -----
6
<PAGE>
- --------------------------------------------------------------------------------
GAM INTERNATIONAL FUND -- STATEMENT OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
%
VALUE OF
HOLDINGS DESCRIPTION US$ FUND
- --------------------------------------------------------------------------------
PREFERRED SHARES
NETHERLANDS
305,444 ABN-AMRO Holding 6%
CV Pfd 15,044,994 1.75
----------- ------
15,044,994 1.75
----------- ------
TOTAL PREFERRED SHARES (COST $12,307,829) 15,044,994 1.75
----------- ------
TOTAL INVESTMENTS (COST $847,199,214**) 850,083,193 98.96
----------- ------
FUTURES
JAPAN
(849) Nikkei Index Futures
1996-09-30 (2,873,925) (0.33)
----------- ------
TOTAL FUTURES (2,873,925) (0.33)
----------- ------
MARGIN ON DEPOSIT AS COLLATERAL 5,837,915 0.67
----------- ------
DUE FROM BROKERS FOR FUTURES CONTRACTS 2,953,990 0.34
----------- ------
NET CURRENT ASSETS 5,972,887 0.70
----------- ------
TOTAL NET ASSETS 859,010,070 100.00
----------- ------
* Non-income producing security.
** Cost for federal income tax purposes is identical.
+ Adjustable rate index notes are inversely indexed to the value of the
underlying security.
++ Segregated in whole or in part as collateral for forward contracts.
See notes to financial statements.
[The following table represents a pie chart in the printed piece.]
GEOGRAPHIC ANALYSIS AS AT
30TH JUNE, 1996
[The following table represents a chart in the printed piece.]
GERMANY 21.93%
UNITED STATES 0.29%
UNITED KINGDOM 24.19%
NET CURRENT ASSETS 1.37%
DENMARK 1.64%
HONG KONG 3.90%
SINGAPORE 4.66%
FRANCE 7.74%
BELGIUM 1.57%
SWITZERLAND 9.08%
SPAIN 1.52%
JAPAN 9.65%
SWEDEN 1.36%
NETHERLANDS 9.98%
MALAYSIA 1.12%
7
<PAGE>
- --------------------------------------------------------------------------------
GAM GLOBAL FUND
- --------------------------------------------------------------------------------
Fund Management
- --------------------------------------------------------------------------------
- --------- John R. Horseman joined GAM in 1987, initially as a member of the
firms Asian team based in Hong Kong. In 1990 he moved to GAMs London
office to assume respon- sibility for a number of GAMs global and
[PHOTO] international funds. Prior to joining GAM he worked for BA Investment
Management International Ltd and was responsible for certain of the
Bank of Americas global equity funds. Mr. Horseman was educated at the
- --------- University of Birmingham.
The Fund's investment objective is long-term capital appreciation,
generally through investment in equity securities issued by companies with
principal offices in countries including the United States, Canada, the United
Kingdom, Continental Europe, and the Pacific Basin. However, if the Fund
determines that the long-term capital appreciation of debt securities may equal
or exceed the return on equity securities, it may be substantially invested in
debt securities of companies and governments, their agencies and
instrumentalities. Any income realized by the Fund on its investments will be
incidental to its goal of long-term capital appreciation.
Report to Shareholders
- --------------------------------------------------------------------------------
The Facts -- Class A Shares
GAM Global Average
GAM Class A MSCI 1 Month
Global (after World Deposit
Class A sales load) Index Rate
30th June, 96 US$12.94 780.20
- --------------------------------------------------------------------------------
% % % %
- --------------------------------------------------------------------------------
Quarter to June, 96 0.00 - 5.00 + 3.01 +1.30
- --------------------------------------------------------------------------------
Jan - June, 1996 - 4.22 - 9.01 + 7.33 +2.62
- --------------------------------------------------------------------------------
Average annual total return:-
- --------------------------------------------------------------------------------
1 year to June, 96 + 4.03 - 1.17 +19.00 +5.62
- --------------------------------------------------------------------------------
5 years to June, 96 +14.48 +13.31 +12.53 +4.55
- --------------------------------------------------------------------------------
10 years to June, 96 +10.77 +10.20 +11.77 +6.23
- --------------------------------------------------------------------------------
Since inception +10.93 +10.37 +11.90 +6.24
- --------------------------------------------------------------------------------
Performances are calculated on a total return basis. Class A inception was
on 28th May, 1986 and Class D inception was on 6th October, 1995. Indications of
past performance are not necessarily indicative of future performance. The
investment return and principal value of an investment will fluctuate so that an
investors shares, when redeemed, may be worth more or less than their original
cost.
8
<PAGE>
- --------------------------------------------------------------------------------
GAM GLOBAL FUND--REPORT TO SHAREHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
[GRAPH]
- --GAM GLOBAL CLASS A
- --GAM GLOBAL CLASS A (AFTER SALES LOAD)
- --MSCI WORLD INDEX
- --AVERAGE 1 MONTH DEPOSIT RATE
NOTE: The graphs compare the performance results of a hypothetical $10,000
investment in either Class and a comparable index. The performances of Class A
and Class D are also shown after adjustment to reflect the maximum sales loads,
which are waived for certain investors. The performance of the index does not
reflect brokerage commissions and other expenses that would be incurred to
acquire a comparable portfolio of securities.
The Facts -- Class D Shares
GAM Global Average
GAM Class D MSCI 1 Month
Global (after World Deposit
Class D sales load) Index Rate
30th June, 96 US$12.77 780.20
- --------------------------------------------------------------------------------
% % % %
- --------------------------------------------------------------------------------
Quarter to June, 96 -0.16 -3.65 + 3.01 +1.30
- --------------------------------------------------------------------------------
Jan June, 1996 -5.27 -8.58 + 7.33 +2.62
- --------------------------------------------------------------------------------
Inception to June, +1.07 -2.47 +12.56 +4.11
- --------------------------------------------------------------------------------
[GRAPH]
- --GAM GLOBAL CLASS D
- --GAM GLOBAL CLASS D (AFTER SALES LOAD)
- --MSCI WORLD INDEX
- --AVERAGE 1 MONTH DEPOSIT RATE
- ----------
Sources used are the net asset value of the Fund computed daily and Morgan
Stanley Capital International.
The MSCI World Index is an arithmetical average weighted by market value of the
performance of some 1,400 securities listed on the stock exchanges of Australia,
Austria, Belgium, Canada, Denmark, France, Finland, Germany, Hong Kong, Italy,
Japan, Netherlands, New Zealand, Norway, Singapore, Malaysia, Spain, Sweden,
Switzerland, the United Kingdom and the United States of America. The combined
market capitalisation of these companies represents approximately 60% of the
aggregate market value of the stock exchanges of the above 21 countries. The
percentage change in the value of the index includes dividends reinvested.
9
<PAGE>
- --------------------------------------------------------------------------------
GAM GLOBAL FUND -- REPORT TO SHAREHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN -- CLASS A
[The following table represents a chart in the printed piece.]
One Year Five Years Ten Years Since Inception
- --------------------------------------------------------------------------------
% % % %
- --------------------------------------------------------------------------------
GAM Global 4.03 14.48 10.77 10.93
- --------------------------------------------------------------------------------
GAM Global
(after sales load) - 1.17 13.32 10.20 10.37
- --------------------------------------------------------------------------------
MSCI World Index 19.00 12.53 11.69 11.90
ANNUAL PERFORMANCE -- CLASS A
[GRAPH]
GAM
GAM Global MSCI
Global Class A World
Class A (after sales load) Index
Year % % %
- --------------------------------------------------------------------------------
1992 (4.65) (9.42) (4.66)
1993 75.30 66.53 23.13
1994 (16.15) (20.35) 5.58
1995 36.25 29.44 21.32
1996* (4.22) (9.01) 4.19
* 6 months
THE COMMENT
Following the last year in which steadily deteriorating growth in Europe,
particularly in Germany and France, has necessitated ever lower short-term
interest rates, there are now some signs that a modest pick-up is in prospect.
If present circumstances provide anything of a guide, however, it is unlikely to
be strong, nor will it lead to higher inflation. Indeed, headline rates of
inflation in all the European countries which we survey are continuing to fall.
Weak labour markets, characterised by high unemployment and generally lower
commodity markets, look as if they will cap inflation for some while yet.
Some individual equities were added to the Fund during the quarter to take
advantage of corrections. This has acted to reduce slightly the bond position in
the Fund but should provide superior returns if, as we expect, European bond
markets resume their upward course in the second half of 1996 and into 1997.
In the US the principal exposures in financials, particularly banks and
healthcare were increased slightly. Against a background of slowing earnings
growth for the S&P as a whole, both these sectors look likely to experience a
good year for earnings and do not appear expensive.
In the Far East our positions are light and in the case of Japan any market
risk has also been hedged using index futures. We are concerned that were the
economy to dip again, the monetary authorities would have no further room to
ease short-term interest rates, given the low levels at which they already
stand.
Apart from Singapore, where we have been able to find some value, our
position in the smaller Asian markets and South America is unchanged insofar as
it is very light.
10
<PAGE>
- --------------------------------------------------------------------------------
GAM GLOBAL FUND -- STATEMENT OF INVESTMENTS
- --------------------------------------------------------------------------------
AS AT 30TH JUNE, 1996 (UNAUDITED)
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ FUND
- --------------------------------------------------------------------------------
ADJUSTABLE RATE INDEX NOTES
United Kingdom
+ DLJ ARIN, Indexed to 11,500 shares,
British Biotech 1997-05-07 398,528 2.11
+ DLJ ARIN, Indexed to 110,000 shares,
General Cable 1997-06-10 109,457 0.58
+ DLJ ARIN, Indexed to 75,000 shares,
TeleWest Communications
1997-03-25 68,406 0.36
+ DLJ ARIN, Indexed to 100,000 shares,
TeleWest Communications
1997-04-03 105,234 0.56
----------- ------
681,625 3.61
----------- ------
Total Adjustable Rate Index Notes
(Cost $551,354) 681,625 3.61
----------- ------
BONDS
Germany
*6,076,000 Bundes Deutschland 6.25%
2024-01-04 3,538,157 18.75
----------- ------
3,538,157 18.75
----------- ------
Total Bonds (Cost $3,571,304) 3,538,157 18.75
----------- ------
BOND WARRANTS
Germany
156,000 Bundes Deutschland 6.25% Wts
July 1997 225,693 1.20
----------- ------
225,693 1.20
----------- ------
Total Bond Warrants (Cost $197,890) 225,693 1.20
----------- ------
EQUITIES
France
2,175 Union des Assurances Federales 268,479 1.42
----------- ------
268,479 1.42
----------- ------
Hong Kong
145,300 Hong Kong & China Gas 231,819 1.23
21,683 HSBC Holdings (HKD) 327,735 1.74
236,000 JCG Holdings 192,074 1.02
----------- ------
751,628 3.99
----------- ------
Japan
12,000 Canon 250,011 1.32
6,000 Kirin Beverage 88,272 0.47
5,000 Rohm 330,790 1.75
4,000 Sony 263,535 1.40
----------- ------
932,608 4.94
----------- ------
Netherlands
18,790 Fortis AMEV 538,787 2.85
2,770 Heijmans Group 251,601 1.33
----------- ------
790,388 4.18
----------- ------
Singapore
24,000 City Developments 187,101 0.99
14,500 Development Bank of Singapore
(FR) 180,865 0.96
6,600 Singapore Press Holdings (FR) 129,568 0.69
----------- ------
497,534 2.64
----------- ------
Sweden
10,946 OM Gruppen 300,822 1.59
----------- ------
300,822 1.59
----------- -----
Switzerland
54 Roche Holding Genussscheine 412,344 2.18
548 Sandoz Registered 627,350 3.32
1,639 Swiss Bank Corp. Registered 323,866 1.72
----------- ------
1,363,560 7.22
----------- ------
United Kingdom
37,250 Barclays 447,029 2.37
572 Barclays (Restricted) 6,864 0.04
29,400 Hyder 325,876 1.73
110,000 National Grid Group 291,359 1.54
30,700 RJB Mining 263,739 1.40
55,600 Scottish Power 262,579 1.39
33,800 South West Water 343,404 1.82
46,700 Thames Water 410,987 2.18
51,000 United Utilities 429,022 2.27
219,300 Utility Cable 63,026 0.33
----------- ------
2,843,885 15.07
----------- ------
11
<PAGE>
- --------------------------------------------------------------------------------
GAM GLOBAL FUND -- STATEMENT OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ FUND
- --------------------------------------------------------------------------------
United States
3,600 American International Group 355,050 1.87
4,000 BankAmerica 303,000 1.61
4,525 Bristol-Myers Squibb 407,250 2.16
*11,000 Champion Enterprises 229,625 1.22
7,327 Chase Manhattan 517,469 2.74
4,000 Columbia/HCA Healthcare 213,500 1.13
3,500 Federal Home Loan Mortgage 299,250 1.59
4,800 First Union 292,200 1.55
9,050 Johnson & Johnson 447,975 2.37
4,000 Kimberly-Clark 309,000 1.64
*10,000 Kroger 395,000 2.09
6,050 Medtronic 338,800 1.80
8,450 Merrill Lynch 550,306 2.91
10,030 NationsBank Corp. 828,729 4.38
3,950 Philip Morris 410,800 2.18
7,300 Schering-Plough 458,075 2.43
1,500 Wells Fargo 358,313 1.90
----------- ------
6,714,342 35.57
----------- ------
Total Equities (Cost $13,313,723) 14,463,246 76.62
----------- ------
EQUITY WARRANTS
Hong Kong
*21,700 Hong Kong & China Gas Wts 5,677 0.03
----------- ------
5,677 0.03
----------- ------
Switzerland
*54 Roche Holding Wts 1998 1,696 0.01
*195 Swiss Bank Corp.
Bearer Wts 1995 640 --
----------- ------
2,336 0.01
----------- ------
Total Equity Warrants (Cost $1,545) 8,013 0.04
----------- ------
OPTIONS
France
*17,400,000 OAT 6% 19970117
84.36 Calls January 1996 72,384 0.38
----------- ------
72,384 0.38
----------- ------
UNITED STATES
*51,000 Nederland 7.5% 20230115
101 Calls July 1996 131,285 0.70
----------- ------
131,285 0.70
----------- ------
Total Options (Cost $230,145) 203,669 1.08
----------- ------
PREFERRED SHARES
Netherlands
6,549 ABN-AMRO Holding
6% CV Pfd 322,579 1.71
----------- ------
322,579 1.71
----------- ------
Total Preferred Shares (Cost $347,468) 322,579 1.71
----------- ------
Total Investments (Cost $18,113,429**) 19,442,982 103.01
----------- ------
FUTURES
Japan
(7) Nikkei Index Futures
1997-09-30 (23,800) (0.12)
----------- ------
Total Futures (23,800) (0.12)
----------- ------
Margin on deposit as collateral 41,452 0.21
----------- ------
Due from brokers 17,652 0.09
----------- ------
Net current liabilities (586,286) (3.06)
----------- ------
Total net assets 18,874,348 100.00
----------- ------
GEOGRAPHIC ANALYSIS,
AS AT 30TH JUNE, 1996
[The following table represents a pie chart in the printed piece.]
NET CURRENT LIABILITIES (2.89%)
UNITED STATES 36.27%
FRANCE 1.80%
OTHER AREAS 1.59%
SINGAPORE 2.64%
HONG KONG 4.02%
JAPAN 4.82%
NETHERLANDS 5.89%
SWITZERLAND 7.23%
UNITED KINGDOM 18.68%
GERMANY 19.95%
* Non-income producing security.
** Cost for federal income tax purposes is identical.
+ Adjustable rate index notes are inversely indexed
to the value of the underlying security.
See notes to financial statements.
12
<PAGE>
- --------------------------------------------------------------------------------
GAM EUROPE FUND
- --------------------------------------------------------------------------------
FUND MANAGEMENT
- --------------------------------------------------------------------------------
- ------------- John Bennett is an Investment Director with responsibility for
European markets. Prior to joining GAM in January 1993 he was a
[PHOTO] Senior Fund Manager at Ivory & Sime responsible for Continental
European equity portfolios. He qualified as a Member of the
Chartered Institute of Bankers in Scotland in 1986. Mr. Bennett
- ------------- is based in GAM's Edinburgh office.
The Fund's investment objective is long-term capital appreciation,
generally through investment in equity securities issued by companies in Europe.
However, if the Fund determines that the long-term capital appreciation of debt
securities may equal or exceed the return on equity securities, it may be
substantially invested in debt securities of companies and governments, their
agencies and instrumentalities. Any income realized by the Fund on its
investments will be incidental to its goal of long-term capital appreciation.
Report to Shareholders
- --------------------------------------------------------------------------------
The Facts
GAM Average
Europe MSCI 1 Month
GAM (after sales Europe Deposit
Europe load) Index Rate
30th June, 96 US$11.52 772.18
- --------------------------------------------------------------------------------
% % % %
- --------------------------------------------------------------------------------
Quarter to June, 96 +5.01 0.24 +2.72 +1.30
- --------------------------------------------------------------------------------
Jan - June, 1996 +14.74 +9.00 +6.64 +2.62
- --------------------------------------------------------------------------------
Average annual total return:-
- --------------------------------------------------------------------------------
1 year to June, 96 +21.85 +15.76 +15.15 +5.62
- --------------------------------------------------------------------------------
5 years to June, 96 +10.48 +9.35 +13.99 +4.55
- --------------------------------------------------------------------------------
Since inception +3.65 +2.84 +9.81 +5.32
- --------------------------------------------------------------------------------
Performances are calculated on a total return basis. The Funds inception
was on 1st January, 1990. Indications of past performance are not necessarily
indicative of future performance. The investment return and principal value of
an investment will fluctuate so that an investors shares, when redeemed, may be
worth more or less than their original cost.
13
<PAGE>
- --------------------------------------------------------------------------------
GAM EUROPE FUND REPORT TO SHAREHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
[GRAPH]
- --GAM EUROPE FUND
- --GAM EUROPE FUND (AFTER SALES LOAD)
- --MSCI EUROPE INDEX
- --AVERAGE 1 MONTH DEPOSIT RATE
NOTE: The graph compares the performance results of a hypothetical $10,000
investment in the Fund and a comparable index. The performance of the Fund is
also shown after adjustment to reflect the maximum sales load, which is waived
for certain investors. The performance of the index does not reflect brokerage
commissions and other expenses that would be incurred to acquire a comparable
portfolio of securities.
The average annual total return of GAM Europe after deduction of maximum
sales charge of 5% was 15.76% for 1 year, 9.35% for 5 years and 2.84% since
inception for the period ending June 30, 1996.
AVERAGE ANNUAL TOTAL RETURN
[The following table represents a chart in the printed piece.]
One Year Five Years Ten Years Since Inception
- --------------------------------------------------------------------------------
% % % %
- --------------------------------------------------------------------------------
GAM Europe 21.85 14.97 10.48 3.65
- --------------------------------------------------------------------------------
GAM Europe
(afer sales load) 15.76 13.03 9.35 2.84
- --------------------------------------------------------------------------------
MSCI Europe Index 15.15 16.89 14.00 9.81
- --------------------------------------------------------------------------------
ANNUAL PERFORMANCE
1992 1993 1994 1995 1996*
- --------------------------------------------------------------------------------
% % % % %
GAM Europe (4.91) 22.68 (3.11) 16.77 14.74
- --------------------------------------------------------------------------------
GAM Europe
(after sales load) (9.66) 16.55 (7.95) 10.93 9.00
- --------------------------------------------------------------------------------
MSCI Europe Index (4.25) 29.79 2.66 22.13 6.64
- --------------------------------------------------------------------------------
* 6 months
- ----------
Sources used are the net asset value of the Fund computed daily and Morgan
Stanley Capital International.
The MSCI Europe Index is an arithmetical average weighted by market value of the
performance of some 600 securities listed on the stock exchanges of Austria,
Belgium, Denmark, Finland, France, Germany, Italy, Netherlands, Norway, Spain,
Sweden, Switzerland and the United Kingdom. The combined market capitalisation
of these companies represents approximately 60% of the aggregate market value of
the stock exchanges of the above 13 countries. The percentage change in the
value of the index includes dividends reinvested.
14
<PAGE>
- --------------------------------------------------------------------------------
GAM Europe Fund
- --------------------------------------------------------------------------------
THE COMMENT
The Fund has performed well in the review period. The Fund's NAV rose by
5.01% compared with a rise of 2.72% in the benchmark.
Moderate economic growth and a near absence of price pressures has set the
tone for European financial assets so far this year. As we anticipated, this
environment has proven beneficial to the shares of those companies whose
products and management render them capable of sales and profits growth. The
victims, in a corporate sense, remain those who rely upon the ebb and flow of
economic cycles to determine their progress.
Whilst the Fund remains committed to the former category of company, we
feel that a note of caution is probably now appropriate. Strong share price
performance has left the majority of businesses we study somewhat overvalued
relative to their near-term prospects. Moreover, gathering signs of market
excess have added to our sense of caution. In recent months a growing number of
European companies have been eager to sell their shares and the response from
investors has been enthusiastic. This, together with a renewed appetite for
smaller company issues, helps persuade us that we are in the late stages of this
particular bull phase whose end may be catalysed by a turn in the interest rate
cycle.
In recent weeks, then, we have allowed cash holdings in the Fund to rise in
anticipation of better value to come.
STATEMENT OF INVESTMENTS
AS AT 30TH JUNE, 1996 (UNAUDITED)
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ FUND
- --------------------------------------------------------------------------------
Convertibles
France
722 Guilbert 3.5% CV 20040101 130,316 0.40
----------- ------
130,316 0.40
----------- ------
Total Convertibles (Costs $126,183) 130,316 0.40
----------- ------
Equities
France
1,910 Air Liquide 337,501 1.04
13,925 AXA 762,265 2.35
2,700 Comptoirs Modernes 1,218,720 3.77
6897 Crdit Commercial de France 319,896 0.99
7,318 Guilbert 1,066,919 3.29
2,660 IMETAL 377,470 1.16
1,880 Peugeot 251,800 0.78
1,100 Rexel 304,067 0.93
12,915 SEITA 592,495 1.83
5,565 Technip 512,769 1.58
11,865 Total B 900,348 2.78
3,850 Virbac 541,099 1.67
----------- ------
7,185,349 22.17
----------- ------
Germany
1,100 Buderus 466,794 1.44
23,100 Veba 1,228,486 3.80
----------- ------
1,695,280 5.24
----------- ------
Hungary
6,750 Gedeon Richter 343,963 1.06
----------- ------
343,963 1.06
----------- ------
Italy
410,000 Telecom Italia Mobile 916,807 2.83
----------- ------
916,807 2.83
----------- ------
Netherlands
9,500 ABN-AMRO Holding 510,270 1.57
59,200 Elsevier 899,089 2.77
5,663 Eriks Holdings 523,008 1.61
5,550 Royal Dutch Petroleum Bearer 857,866 2.65
15
<PAGE>
- --------------------------------------------------------------------------------
GAM EUROPE FUND -- STATEMENT OF INVESTMENTS (continued)
- --------------------------------------------------------------------------------
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ FUND
- --------------------------------------------------------------------------------
Netherlands
4,945 Telegraaf Holding 830,753 2.56
----------- ------
3,620,986 11.16
----------- ------
Norway
8,690 Sparebanken 212,859 0.66
----------- ------
212,859 0.66
----------- ------
Portugal
21,000 Portugal Telecom 549,496 1.70
*8,297 Sotancro -- --
----------- ------
549,496 1.70
----------- ------
Spain
5,200 Banco Popular Registered 927,980 2.86
----------- ------
927,980 2.86
----------- ------
Sweden
22,000 Esselte B (Fria) 450,137 1.39
27,500 Kalmar (Fria) 581,358 1.79
30,675 Sandvik A 704,061 2.17
----------- ------
1,735,556 5.35
----------- ------
Switzerland
1,250 Affichage Genussscheine 640,000 1.98
830 Ciba-Geigy Registered 1,012,600 3.13
150 Roche Holding Genussscheine 1,145,400 3.55
----------- ------
2,798,000 8.66
----------- ------
United Kingdom
100,000 B.A.T. Industries 778,304 2.40
34,580 Barratt Developments 136,449 0.42
24,090 Bellway 117,885 0.36
154,000 British Telecom 827,767 2.55
233,751 Burford Holdings 449,506 1.39
*36,464 Columbus Group 10,196 0.03
21,450 Daily Mail & General Trust A 490,507 1.51
50,000 Hozelock Group 407,017 1.26
316,250 Metalrax Group 550,250 1.70
60,000 Reuters Holdings 726,106 2.24
*260,515 Trocadero 265,085 0.82
*43,419 Trocadero (Restricted) 44,181 0.14
420,000 United Industries 489,353 1.51
25,500 Zeneca 564,107 1.74
----------- ------
5,856,713 18.07
----------- ------
Total Equities (Cost $21,990,294) 25,842,989 79.75
----------- ------
Equity Warrants
Switzerland
*142 Roche Holding Wts 1998 4,459 0.01
----------- ------
Total Equity Warrants (Cost $2,644) 4,459 0.01
----------- ------
Preferred Shares
Germany
1,400 Henkel Pfd 604,872 1.87
765 STO Pfd Bearer 382,336 1.18
----------- ------
987,208 3.05
----------- ------
Total Preferred Shares (Cost $988,364) 987,208 3.05
----------- ------
Total Investments (Cost $23,107,485**) 26,964,972 83.22
----------- ------
Net current assets 5,436,657 16.78
---------- ------
Total net assets 32,401,629 100.00
========== ======
Geographic Analysis,
as at 30th June, 1996
[THE FOLLOWING TABLE REPRESENTS A CHART IN THE PRINTED PIECE.]
UNITED KINGDOM 18.07%
FRANCE 22.57%
+OTHER AREAS 1.06%
NET CURRENT ASSETS 16.78%
PORTUGAL 1.70%
SWEDEN 5.35%
SPAIN 2.86%
NETHERLANDS 11.16%
ITALY 2.83%
SWITZERLAND 8.67%
GERMANY 8.29%
* Non-income producing security.
** Cost for federal income tax purposes is identical.
+ Fair value determined by the Board of Directors.
See notes to financial statements.
16
<PAGE>
- --------------------------------------------------------------------------------
GAM PACIFIC BASIN FUND
- --------------------------------------------------------------------------------
FUND MANAGEMENT
- --------------------------------------------------------------------------------
- ------------- Michael S. Bunker has overall responsibility for Asian investment
policy. He has over 20 years investment experience, primarily in
Asian markets. He joined GAM in 1985 to create its Asian
[PHOTO] investment team.
- -------------
The Funds investment objective is long-term capital appreciation, generally
through investment in equity securities issued by companies with principal
offices in the Pacific Basin, including Japan, Hong Kong, Singapore, Malaysia,
Indonesia, the Philippines, Korea, Taiwan, India, Australia and New Zealand.
However, if the Fund determines that the long-term capital appreciation of debt
securities may equal or exceed the return on equity securities, it may be
invested substantially in debt securities of Pacific Basin companies and the
governments of the Pacific Basin, their agencies and instrumentalities. Any
income realized by the Fund on its investments will be incidental to its goal of
long-term capital appreciation.
REPORT TO SHAREHOLDERS
- --------------------------------------------------------------------------------
THE FACTS-CLASS A SHARES
GAM
Pacific Basin Average
GAM Class A MSCI 1 Month
Pacific Basin (after Pacific Deposit
Class A sales load) Index Rate
- --------------------------------------------------------------------------------
30th June, 96 US$17.68 2,413.09
- --------------------------------------------------------------------------------
% % % %
- --------------------------------------------------------------------------------
Quarter to June, 96 + 0.51 - 4.51 + 0.60 +1.30
- --------------------------------------------------------------------------------
Jan-June, 1996 + 4.18 - 1.03 + 2.73 +2.62
- --------------------------------------------------------------------------------
Average annual total return:-
- --------------------------------------------------------------------------------
1 year to June, 96 +13.99 + 8.29 +12.10 +5.62
- --------------------------------------------------------------------------------
5 years to June, 96 +13.68 +12.52 + 7.22 +4.55
- --------------------------------------------------------------------------------
Since inception +11.72 +11.10 + 2.18 +6.21
- --------------------------------------------------------------------------------
Performances are calculated on a total return basis. Class A inception was
on 6th May, 1987 and Class D on 18th October, 1995. Indications of past
performance are not necessarily indicative of future performance. The investment
return and principal value of an investment will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
17
<PAGE>
- --------------------------------------------------------------------------------
GAM PACIFIC BASIN FUND--REPORT TO SHAREHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
[GRAPH]
- --GAM PACIFIC BASIN CLASS A
- --GAM & PACIFIC BASIN CLASS A (AFTER SALES LOAD)
- --MSCI PACIFIC INDEX
- --AVERAGE 1 MONTH DEPOSIT RATE
NOTE: The graphs compare the performance results of a hypothetical $10,000
investment in either Class and a comparable index. The performances of Class A
and Class D are also shown after adjustment to reflect the maximum sales loads,
which are waived for certain investors. The performance of the index does not
reflect brokerage commissions and other expenses that would be incurred to
acquire a comparable portfolio of securities.
The average annual total return of GAM Pacific Basin Class A after
deduction of maximum sales charge of 5% was 8.29% for 1 year, 12.52% for 5 years
and 11.10% since inception for the period ending June 30, 1996.
THE FACTS-CLASS D SHARES
GAM
Pacific Basin Average
GAM Class D MSCI 1 Month
Pacific Basin (after Pacific Deposit
Class D sales load) Index Rate
30th June, 96 US$17.61 2,413.09
- --------------------------------------------------------------------------------
% % % %
- --------------------------------------------------------------------------------
Quarter to June, 96 +0.40 3.11 +0.60 +1.30
- --------------------------------------------------------------------------------
Jan-June, 1996 +3.83 +0.20 +2.73 +2.62
- --------------------------------------------------------------------------------
Inception to June, 96 +6.14 +2.42 +14.83 +3.80
- --------------------------------------------------------------------------------
[GRAPH]
- --GAM PACIFIC BASIN CLASS D
- --GAM EPACIFIC BASIN CLASS D (AFTER SALES LOAD)
- --MSCI PACIFIC INDEX
- --AVERAGE 1 MONTH DEPOSIT RATE
- ----------
Sources used are the net asset value of the Fund computed daily and Morgan
Stanley Capital International.
The MSCI World Index is an arithmetical average weighted by market value of the
performance of some 1,400 securities listed on the stock exchanges of Australia,
Austria, Belgium, Canada, Denmark, France, Finland, Germany, Hong Kong, Italy,
Japan, Netherlands, New Zealand, Norway, Singapore, Malaysia, Spain, Sweden,
Switzerland, the United Kingdom and the United States of America. The combined
market capitalisation of these companies represents approximately 60% of the
aggregate market value of the stock exchanges of the above 21 countries. The
percentage change in the value of the index includes dividends reinvested.
18
<PAGE>
- --------------------------------------------------------------------------------
GAM PACIFIC BASIN FUND--REPORT TO SHAREHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN--CLASS A
One Year Three Years Five Years Since Inception
- --------------------------------------------------------------------------------
% % % %
- --------------------------------------------------------------------------------
GAM Pacific Basin 13.99 13.34 13.68 11.72
- --------------------------------------------------------------------------------
GAM Pacific Basin
(after sales load) 8.29 11.42 12.52 11.10
- --------------------------------------------------------------------------------
MSCI Index Exception 12.10 5.67 7.22 2.18
- --------------------------------------------------------------------------------
ANNUAL PERFORMANCE--CLASS A
1992 1993 1994 1995 1996
- --------------------------------------------------------------------------------
GAM Pacific Basin (0.37) 51.51 7.41 (4.50) 4.18
- --------------------------------------------------------------------------------
GAM Pacific Basin
(after sales load) (5.35) 43.93 2.04 (9.72) (1.03)
- --------------------------------------------------------------------------------
MSCI Pacific Index (18.20) -35.97 13.03 (5.61) 2.73
- --------------------------------------------------------------------------------
* 6 months
THE COMMENT
Most Asia Pacific markets retreated after a healthy first quarter. Taiwan,
India and the Philippines were the leading performers. The Taiwanese market was
volatile but helped by the news that it will be included in some of the Morgan
Stanley Capital International (MSCI) indices. The higher than expected
weightings in the MSCI indices raised expectations that foreign institutional
investors will significantly increase their investments at the expense of other
Asian markets, Hong Kong, Singapore and Malaysia in particular. Falls in DRAM
prices put pressure on semiconductor stocks in Korea and Taiwan whilst
anti-speculation property tax kept the Singapore market down. On the other hand,
strong evidence of economic growth in Japan provided support to the market,
though fears of imminent rises in Japanese interest rates limited gains. We
remain hedged out of yen into dollars and the Japanese equity portion of the
portfolio has a significant blue chip weighting.
Strength in the Australian dollar and higher base metals prices had boosted
Australian equity returns in the first quarter. We took the opportunity to take
profit in this sector and switched assets to the Hong Kong market. The 18-month
outlook for the Hong Kong market is positive and the political discount should
disappear. The property market has recovered from it lows and recent sales are
encouraging. We are also taking advantage of the boom in the Taiwanese market to
reduce our weighting.
19
<PAGE>
- --------------------------------------------------------------------------------
GAM Pacific Basin Fund--Statement of Investments
- --------------------------------------------------------------------------------
as at 30th June, 1996 (unaudited)
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ FUND
- --------------------------------------------------------------------------------
CONVERTIBLES
Taiwan
500,000 Far Eastern Department Stores 3%
CV 2001 473,750 0.58
420,000 United Micro Electronics 1.25%
CV 2004 538,650 0.67
----------- ------
1,012,400 1.25
----------- ------
Total Convertibles (Cost $924,550) 1,012,400 1.25
----------- ------
EQUITIES
Australia
137,500 Broken Hill Proprietary 1,898,757 2.34
124,475 CRA 1,913,577 2.35
854,000 MIM Holdings 1,100,770 1.35
61,000 National Australia Bank 563,330 0.69
506,000 Novus Petroleum 735,728 0.91
140,500 Pacific BBA 347,842 0.43
218,875 WMC 1,565,425 1.93
----------- ------
8,125,429 10.00
----------- ------
Hong Kong
823,000 Amoy Properties 994,096 1.22
1,115,000 Hong Kong & China Gas 1,778,930 2.19
192,000 Sun Hung Kai Properties 1,940,897 2.39
286,000 Swire Pacific A 2,447,760 3.01
440,352 Wharf (Holdings) 1,575,784 1.94
----------- ------
8,737,467 10.75
----------- ------
Indonesia
698,400 Bank Bali (FR) 1,500,322 1.85
*1,072,000 Hero Supermarket (FR) 1,059,334 1.30
790,000 Mayora Indah (FR) 441,246 0.54
237,000 Modern Photo Film (FR) 1,018,260 1.25
406,000 Mustika Ratu (FR) 767,519 0.94
----------- ------
4,786,681 5.88
----------- ------
Japan
106,000 Canon 2,208,434 2.71
19,000 Canon Sales 529,538 0.65
237 DDI Corp. 2,070,380 2.55
15,000 Japan Associated Finance 1,754,466 2.16
73,000 Joshin Denki 1,053,959 1.30
64,000 Matsushita Electric Industrial 1,193,037 1.47
119,000 Mitsubishi Estate 1,641,979 2.02
14,000 Murata Manufacturing 530,909 0.65
158,000 Nagoya Railroad 807,073 0.99
58,200 ORIX Corp. 2,159,200 2.66
28,000 Secom 1,852,424 2.27
102,000 Sekisui Chemical 1,248,961 1.54
23,300 Sony 1,535,094 1.89
171,000 Sumitomo Marine & Fire 1,492,256 1.84
100,000 Suzuki Motor 1,315,850 1.62
8,000 Tachihi Enterprise 281,446 0.34
58,000 Takeda Chemical 1,028,190 1.27
112,000 Toshiba Corp. 798,280 0.98
19,900 Xebio 747,375 0.92
----------- ------
24,248,851 29.83
----------- ------
Korea
58,000 Hyundai Motor GDR 732,250 0.90
6,000 Korea Electric Power ADR 145,500 0.18
14,524 LG Electronics 318,697 0.38
11,487 Samsung Electronics GDS
(Non Voting) New 278,560 0.34
266 Samsung Electronics GDS
(Voting) New 13,633 0.02
45,117 Samsung Electronics GDS
(Non Voting) 1,094,087 1.35
80 Samsung Electronics GDS
(1/2 Voting) New 4,109 0.01
46,508 Shinhan Bank 1,086,103 1.34
----------- ------
3,672,939 4.52
----------- ------
Malaysia
198,500 Genting 1,551,714 1.91
103,000 Hume Industries (Malaysia) 503,748 0.62
----------- ------
2,055,462 2.53
----------- ------
20
<PAGE>
- --------------------------------------------------------------------------------
GAM PACIFIC BASIN FUND--STATEMENT OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ FUND
- --------------------------------------------------------------------------------
New Zealand
647,098 Carter Holt Harvey 1,480,696 1.82
218,800 Telecom Corp. of New Zealand 920,132 1.13
----------- ------
2,400,828 2.95
----------- ------
Philippines
58,400 Bank of Philippine Islands 294,229 0.36
21,800 Philippine Long Distance Telephone 1,298,015 1.60
----------- ------
1,592,244 1.96
----------- ------
Singapore
139,750 Development Bank of Singapore
(FR) 1,743,161 2.14
1,100,000 Kim Eng Holdings 1,036,853 1.28
217,432 Overseas Chinese Banking Corp.
(FR) 2,542,614 3.03
351,000 Wing Tai Holdings 746,279 0.92
----------- ------
6,068,907 7.47
----------- ------
Thailand
32,875 Bumrungrad Hospital (FR) 30,107 0.04
512,000 Krung Thai Bank (FR) 2,399,873 2.95
181,750 Post Publishing (FR) 672,936 0.83
169,410 Thai Farmers Bank (FR) 1,855,049 2.28
209,400 Thai Glass Industries (FR) 1,030,999 1.27
272,300 Thai Military Bank (FR) 1,072,554 1.32
----------- ------
7,061,518 8.69
----------- ------
Total Equities (Cost $3,661,805) 68,750,326 84.58
----------- ------
EQUITY FUNDS
Taiwan
125,000 Taiwan Fund 3,000,000 3.69
----------- ------
3,000,000 3.69
----------- ------
Total Equity Funds (Cost $2,782,196) 3,000,000 3.69
----------- ------
EQUITY WARRANTS
Indonesia
*2,800 Bank Bali (FR) Wts 2000 1,504 --
----------- ------
1,504 --
----------- ------
Japan
*710 Canon Sales Wts 1999 159,040 0.20
*210 Kyocera Wts 1998 238,875 0.29
*90 Olympus Optical Wts 1996 18,000 0.02
*190 Seino Transportation Wts 1997 52,250 0.06
*490 Tobu Railway Wts 1998 214,376 0.27
----------- ------
682,541 0.84
----------- ------
Singapore
*97,000 Keppel Corporation Wts 1997 419,348 0.52
----------- ------
419,348 0.52
----------- ------
Total Equity Warrants (Cost $1,231,600) 1,103,393 1.36
----------- ------
Total Investments (Cost $68,600,151**) 73,866,119 90.88
----------- ------
Net current assets 7,409,906 9.12
----------- ------
Total net assets 81,276,025 100.00
----------- ------
[THE FOLLOWING TABLE REPRESENTS A CHART IN THE PRINTED PIECE.]
JAPAN 30.67%
NET CURRENT ASSETS 9.12%
OTHER AREAS 1.96%
MALAYSIA 2.53%
NEW ZEALAND 2.95%
KOREA 4.52%
TAIWAN 4.94%
INDONESIA 5.88%
SINGAPORE 7.99%
THAILAND 8.69%
AUSTRALIA 10.00%
HONG KONG 10.75%
* Non-income producing security.
** Cost for federal income tax purposes is identical.
See notes to financial statements.
21
<PAGE>
- --------------------------------------------------------------------------------
GAM JAPAN CAPITAL FUND
- --------------------------------------------------------------------------------
FUND MANAGEMENT
- --------------------------------------------------------------------------------
- ---------------- Paul S. Kirkby is responsible for investments in the
Japanese market. He joined GAM in 1985 as a Senior Fund
PHOTO Manager in Hong Kong, prior to this he worked for New Japan
Securities Co. Ltd in Tokyo. Mr. Kirkby is now based in
- ---------------- London having lived in Hong Kong for seven years.
The Funds investment objective is long-term capital appreciation, generally
through investment in equity securities issued by companies with principal
offices in Japan. However, if the Fund determines that the long-term capital
appreciation of debt securities may equal or exceed the return on equity
securities, it may be substantially invested in debt securities of companies and
governments, their agencies and instrumentalities. Any income realized by the
Fund on its investments will be incidental to its goal of long-term capital
appreciation.
REPORT TO SHAREHOLDERS
- --------------------------------------------------------------------------------
The Facts
GAM Japan
Capital Average
(after Tokyo 1 Month
GAM Japan sales S.E. Deposit
Capital load) Index Rate
30th June, 96 US$11.08 1,712.45
- ---------------------------------------------------------
% % % %
Quarter to June, 96 + 5.52 + 0.24 + 2.04 +1.30
- ---------------------------------------------------------
Jan-June, 1996 + 9.06 + 3.60 + 2.43 +2.62
- ---------------------------------------------------------
Average annual
total return:-
- ---------------------------------------------------------
1 year to June, 96 +34.06 +27.35 +11.56 +5.62
- ---------------------------------------------------------
Since inception + 5.71 + 3.03 - 2.98 +5.60
- ---------------------------------------------------------
Performances are calculated on a total return basis. The Funds inception
was on 1st July, 1994. Indications of past performance are not necessarily
indicative of future performance. The investment return and principal value of
an investment will fluctuate so that an investors shares, when redeemed, may be
worth more or less than their original cost.
22
<PAGE>
- --------------------------------------------------------------------------------
GAM JAPAN CAPITAL FUND - REPORT TO SHAREHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
[GRAPH]
NOTE: The graph compares the performance results of a hypothetical $10,000
investment in the Fund and a comparable index. The performance of the Fund is
also shown after adjustment to reflect the maximum sales load, which is waived
for certain investors. The performance of the index does not reflect brokerage
commissions and other expenses that would be incurred to acquire a comparable
portfolio of securities.
THE COMMENT
During the period the economy has continued to recover. The latest Bank of
Japan quarterly business survey showed confidence spreading from manufacturing
to the long depressed services sector. First quarter GDP grew by a remarkable
5.7% compared to the previous year boosted by strong consumption and government
spending. Although consumer demand should remain firm, the contribution of
government spending will fade while booming imports will continue to be a drag
on overall growth.
Your Fund added to positions in the technology and retail sectors,
positions which may be added to further over the coming months. The Fund
continues to favour financial stocks, particularly of non-bank financial
companies. Although the economy's recovery continues the medium-term outlook
remains subdued. During the last few months the performance of the pro-reform
lobby in the Japanese Diet has been particularly disappointing, suggesting that
further deregulation of the economy will be delayed. As such, the Fund aims to
focus more on companies that can generate growth independent of the performance
of the overall economy.
With the trade surplus set to fall further your Fund remains substantially
hedged away from the yen back into the dollar.
- ----------
Sources used are net asset value of the Fund computed daily and Datastream.
The Tokyo Stock Exchange Index (TOPIX) is a capitalisation-weighted composite
index of approximately 1,200 companies listed on the First Section of the Tokyo
Stock Exchange. The combined market capitalisation of these companies represents
approximately 95% of the aggregate market value of the First and Second Section.
The percentage change in the value of the index is calculated on a total return
basis with dividends reinvested.
23
<PAGE>
- --------------------------------------------------------------------------------
GAM JAPAN CAPITAL FUND - STATEMENT OF INVESTMENTS
- --------------------------------------------------------------------------------
as at 30th June, 1996 (unaudited)
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ FUND
- --------------------------------------------------------------------------------
ADJUSTABLE RATE INDEX NOTES
Banking
+ DLJ ARIN, Indexed to 2,000 shares,
Fuji Bank 1996-12-14 40,525 0.10
--------- ----
40,525 0.10
--------- ----
Total Adjustable Rate Index Notes
(Cost $45,121) 40,525 0.10
--------- ----
EQUITIES
Appliances & Household Durables
19,700 Sony 1,297,912 3.16
--------- ----
1,297,912 3.16
--------- ----
Automobiles
123,000 Mazda Motor 612,555 1.49
28,000 Suzuki Motor 368,438 0.90
--------- ----
980,993 2.39
--------- ----
Banking
28,000 Bank of Kyoto 170,402 0.42
13,000 Keiyo Bank 76,621 0.19
37,000 Long-Term Credit Bank of Japan 287,047 0.70
20,000 Tochigi Bank 208,343 0.51
--------- ----
742,413 1.82
--------- ----
Beverages & Tobacco
10,000 Kirin Beverage 147,119 0.36
--------- ----
147,119 0.36
--------- ----
Broadcasting & Publishing
9,000 Broadcasting System of Niigata 132,407 0.32
--------- ----
132,407 0.32
--------- ----
Business & Public Services
400 NIC Corp. 6,872 0.02
3,840 Nihon Jumbo 154,392 0.38
20,000 Secom 1,323,160 3.23
16,200 Wesco 454,462 1.11
--------- ----
1,938,886 4.74
--------- ----
Chemicals
59,000 Shin-Etsu Chemical 1,132,179 2.76
--------- ----
1,132,179 2.76
--------- ----
Data Processing & Reproduction
5,500 IO Data Device 211,084 0.52
--------- ----
211,084 0.52
--------- ----
Electrical & Electronics
16,000 NEC Corp. 173,985 0.42
40,600 Nippon Denwa Shisetsu 437,776 1.07
9,000 Rohm 595,422 1.45
10,800 Satori Electric 375,017 0.91
5,600 Shinko Electric Industries 179,102 0.44
9,000 Tokyo Electron 262,347 0.64
41,000 Toshiba Corp. 292,228 0.71
--------- ----
2,315,877 5.64
--------- ----
Financial Services
2,000 Credia 73,103 0.18
7,000 Hitachi Credit 124,092 0.30
12,000 Japan Associated Finance 1,403,573 3.43
13,000 Nichiei (8577) 867,181 2.11
35,400 ORIX Corp. 1,313,328 3.20
--------- ----
3,781,277 9.22
--------- ----
Health & Personal Care
11,000 Banyu Pharmaceutical 155,800 0.38
63,750 Eisai 1,205,853 2.94
13,220 Santen Pharmaceutical 308,046 0.75
10,000 Sawai Pharmaceutical 285,101 0.69
14,700 Towa Pharmaceutical 464,769 1.13
--------- ----
2,419,569 5.89
--------- ----
Industrial Components
18,000 Amada Metrecs 273,039 0.67
11,000 Okamura Corp. 92,173 0.22
16,300 Rinnai 387,262 0.94
--------- ----
752,474 1.83
--------- ----
24
<PAGE>
- --------------------------------------------------------------------------------
GAM Japan Capital Fund - Statement of Investments (Continued)
- --------------------------------------------------------------------------------
Insurance
121,000 Dai Tokyo Fire & Marine Insurance 912,185 2.22
143,000 Sumitomo Marine & Fire 1,247,910 3.04
9,000 Tokio Marine & Fire Insurance 120,071 0.29
---------- -----
2,280,166 5.55
---------- -----
Machinery & Engineering
17,000 Amada 183,305 0.45
19,000 Ataka Construction & Engineering 175,355 0.43
1,100 Japan Engineering Consultants 17,892 0.04
10,000 Komatsu Forklift 72,646 0.18
120,000 Mitsubishi Heavy Industries 1,045,004 2.55
10,000 Sansei Yusoki 144,377 0.35
44,000 Takuma 667,428 1.63
4,000 Tsubaki Nakashima 49,710 0.12
---------- -----
2,355,717 5.75
---------- -----
Merchandising
17,700 Amway (Japan) 889,569 2.17
15,000 Chain Store Okuwa 263,170 0.64
23,600 Circle K Japan 1,224,910 2.99
9,000 Daimon 452,322 1.10
400 Ishiguro Homa 9,248 0.02
26,000 Joshin Denki 375,383 0.92
40,000 Juel Verit Ohkubo 434,961 1.06
19,000 Jusco 623,292 1.52
27,000 Marui 599,534 1.46
4,000 Matsumotokiyoshi 141,454 0.34
12,500 Xebio 469,457 1.14
---------- -----
5,483,300 13.36
---------- -----
Metals Non-Ferrous
20,300 Almetax Manufacturing 237,438 0.58
---------- -----
237,438 0.58
---------- -----
Multi-Industry
3,000 Paris Mikki 139,809 0.34
---------- -----
139,809 0.34
---------- -----
Real Estate
15,000 Daiwa Kosho Lease 160,369 0.39
2,000 Tachihi Enterprise 70,361 0.17
29,000 TOC 344,497 0.84
---------- -----
575,227 1.40
---------- -----
Recreation, Other Consumer Goods
75,000 Canon 1,562,571 3.81
25,000 Fuji Photo Film 790,424 1.93
---------- -----
2,352,995 5.74
---------- -----
Telecommunications
151 DDI Corp. 1,319,103 3.22
---------- -----
1,319,103 3.22
---------- -----
Textiles & Apparel
10,000 Renown Look 69,905 0.17
---------- -----
69,905 0.17
---------- -----
Transportation Road & Rail
21,000 Sagami Railway 97,099 0.24
---------- -----
97,099 0.24
---------- -----
Utilities Electrical & Gas
5,330 Okinawa Electric Power 134,912 0.33
---------- -----
134,912 0.33
---------- -----
Wholesale & International Trade
19,200 Nakayamafuku 201,764 0.49
35,000 Nissho Iwai 197,332 0.48
9,700 Royal 304,025 0.74
---------- -----
703,121 1.71
---------- -----
Total Equities (Cost $29,774,101) 31,600,982 77.04
---------- -----
EQUITY FUNDS
Investment Companies
4,700 Shohkoh Fund 987,801 2.41
---------- -----
987,801 2.41
---------- -----
Total Equity Funds (Cost $973,167 987,801 2.41
---------- -----
EQUITY WARRANTS
Business & Public Services
*150 Canon Sales Wts 1997 24,600 0.06
*190 Canon Sales Wts 1999 42,560 0.10
---------- -----
67,160 0.16
---------- -----
Electrical & Electronics
*50 Rohm Wts 1997 46,600 0.11
---------- -----
46,600 0.11
---------- -----
25
<PAGE>
- --------------------------------------------------------------------------------
GAM JAPAN CAPITAL FUND - STATEMENT OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
Electronic Comp. & Instruments
*200 Kyocera Wts 1998 227,500 0.55
--------- ----
227,500 0.55
--------- ----
Machinery & Engineering
*35 Toyo Engineering Wts 1997 3,938 0.01
--------- ----
3,938 0.01
--------- ----
Transportation Road & Rail
*30 Seino Transportation Wts 1997 8,250 0.02
*170 Tobu Railway Wts 1998 74,375 0.18
---------- ------
82,625 0.20
---------- ------
Total Equity Warrants (Cost $428,548) 427,823 1.03
---------- ------
Total Investments (Cost $31,220,937**) 33,057,131 80.58
Net current assets 7,965,021 19.42
---------- ------
Total net assets 41,022,152 100.00
========== ======
* Non-income producing security.
** Cost for federal income tax purposes is identical.
+ Adjustable rate index notes are inversely indexed to the value of the
underlying security.
See notes to financial statements.
26
<PAGE>
- --------------------------------------------------------------------------------
GAM NORTH AMERICA FUND
- --------------------------------------------------------------------------------
Fund Management
- --------------------------------------------------------------------------------
- ---------------- Fayez Sarofim is the Investment Adviser for GAM North
America Fund. From 1951 to 1958 Mr. Sarofim worked for
Anderson, Clayton & Co. and his last assignment with the
PHOTO company was as assistant to the President. In 1958 Mr.
Sarofim founded Fayez Sarofim and Co. and is the President
and Chairman of the Board. He is also a director of Teledyne
- ---------------- Inc.; Argonaut Group; Unitrin, Inc. and EXOR Group.
The Fund's investment objective is long-term capital appreciation,
generally through investment in equity securities issued by companies in the
United States and Canada. However, if the Fund determines that the long-term
capital appreciation of debt securities may equal or exceed the return on equity
securities, it may be substantially invested in debt securities of companies and
governments, their agencies and instrumentalities. Any income realized by the
Fund on its investments will be incidental to its goal of long-term capital
appreciation.
REPORT TO SHAREHOLDERS
- --------------------------------------------------------------------------------
The Facts
GAM
North America Average
(after S&P 1 Month
GAM sales Comp Deposit
North America load) Index Rate
30th June, 96 US$13.29 670.63
% % % %
- --------------------------------------------------------------
Quarter to June, 96 +5.48 +0.20 +4.68 +1.30
- --------------------------------------------------------------
Jan-June, 1996 +11.40 +5.83 +10.32 +2.62
- --------------------------------------------------------------
Average annual
total return:-
- --------------------------------------------------------------
1 year to June, 96 +27.38 +21.01 +26.26 +5.62
- --------------------------------------------------------------
5 years to June, 96 +11.88 +10.74 +15.77 +4.55
- --------------------------------------------------------------
Since inception +11.36 +10.48 +13.72 +5.32
- --------------------------------------------------------------
Performances are calculated on a total return basis. The Funds inception
was on 1st January, 1990. Indications of past performance are not necessarily
indicative of future performance. The investment return and principal value of
an investment will fluctuate so that an investors shares, when redeemed, may be
worth more or less than their original cost.
27
<PAGE>
- --------------------------------------------------------------------------------
GAM NORTH AMERICA FUND REPORT TO SHAREHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
[GRAPH]
- --GAM NORTH AMERICA FUND
- --GAM NORTH AMERICA FUND (AFTER SALES LOAD)
- --STANDARD & POOR'S COMPOSITE INDEX
- --AVERAGE 1 MONTH DEPOSIT RATE
NOTE: The graph compares the performance results of a hypothetical $10,000
investment in the Fund and a comparable index. The performance of the Fund is
also shown after adjustment to reflect the maximum sales load, which is waived
for certain investors. The performance of the index does not reflect brokerage
commissions and other expenses that would be incurred to acquire a comparable
portfolio of securities.
The average annual total return of GAM North America after deduction of
maximum sales charge of 5% was 21.01% for 1 year, 10.74% for 5 years and 10.48%
since inception for the period ending June 30, 1996.
AVERAGE ANNUAL TOTAL RETURN
[The following table represents a chart in the printed piece.]
One Year Three Years Five Years Since Inception
- --------------------------------------------------------------------------------
% % % %
- --------------------------------------------------------------------------------
GAM North American 27.38 15.73 11.88 11.36
GAM North America
(after sales load) 21.01 13.76 10.74 10.48
Standard & Poor's
Composite Index 26.26 17.30 15.77 13.72
ANNUAL PERFORMANCE
1992 1993 1994 1995 1996
- --------------------------------------------------------------------------------
% % % % %
- --------------------------------------------------------------------------------
GAM North America 2.42 (2.09) 2.97 30.90 11.40
GAM North America
(after sales load) (2.70) (6.98) (2.18) 24.35 5.83
Standard & Poor's
Composite Index 7.63 10.08 1.27 37.60 10.32
* 6 months
- ----------
Sources used are the net asset value of the Fund which is computed daily and
Datastream.
The Standard & Poors Composite Index is an unmanaged weighted index of the stock
performance of 500 industrial, transportation, utility and financial companies.
The percentage change in the value of the index includes dividends reinvested.
GAM North America Fund
28
<PAGE>
- --------------------------------------------------------------------------------
GAM NORTH AMERICA FUND
- --------------------------------------------------------------------------------
THE COMMENT
The resilience of the US economy thus far in 1996 has exceeded most
projections. Our outlook was for a weaker first half than second, however, a
number of factors contributing to a rapidly growing money supply fuelled a
rebound in growth in the early part of 1996, off the weak performance of the
final quarter of 1995. We believe growth in the current quarter will reach a
peak, in the range of 3.5-4.0%. However, we continue to expect average annual
GDP to be at 2.0-2.5%, as we believe demand will weaken considerably in the
final quarter of this year.
In our view consumption, which has been driving the economy, will falter in
the absence of excess liquidity, which was supplied by mortgage refinancings and
tax refunds earlier in the year. The historically high level of consumer debt
and the increase in debt service as a percentage of income should also
contribute to a significant slowdown in spending. Export growth and capital
investment have already softened in 1996 and are not positioned to support an
extension of the current growth spurt. Inflation reports remain constructive.
However, with the economy near full employment, any pick-up in wage inflation
will most likely lead to more restrictive monetary policy. The portfolio's
return was led by the large capitalisation, high quality multinationals in the
consumer non-durables, technology and healthcare sectors. Shares of Coca-Cola,
Philip Morris, PepsiCo, General Electric, Intel, American Home Products and
Johnson & Johnson had the most positive impact in these groups.
Statement of Investments
as at 30th June, 1996 (unaudited)
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ FUND
- --------------------------------------------------------------------------------
Equities
Automobiles
900 Chrysler 55,800 1.06
2,618 Ford Motor 84,758 1.60
--------- -----
140,558 2.66
--------- -----
Banking
1,800 Chase Manhattan 127,125 2.40
2,200 Citicorp 181,775 3.44
--------- -----
308,900 5.84
--------- -----
Beverages & Tobacco
600 Anheuser-Busch 45,000 0.85
8,400 Coca-Cola 410,550 7.78
5,800 PepsiCo 205,175 3.88
2,800 Philip Morris 291,200 5.51
--------- -----
951,925 18.02
--------- -----
Broadcasting & Publishing
1,000 McGraw-Hill 45,750 0.87
400 Readers Digest Association A 17,000 0.32
--------- -----
62,750 1.19
--------- -----
Chemicals
1,200 Dow Chemical 91,200 1.73
1,400 DuPont de Nemours 110,775 2.10
1,700 International Flavors
& Fragrances 80,963 1.53
--------- -----
282,938 5.36
--------- -----
Data Processing & Reproduction
900 Electronic Data Systems 48,375 0.92
--------- -----
48,375 0.92
--------- -----
Electrical & Electronics
600 Emerson Electric 54,225 1.03
2,800 General Electric (USA) 242,200 4.58
--------- -----
296,425 5.61
--------- -----
29
<PAGE>
- --------------------------------------------------------------------------------
GAM NORTH AMERICA FUND - STATEMENT OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ FUND
- --------------------------------------------------------------------------------
Electronic Comp. & Instruments
1,550 Intel Corp. 113,828 2.15
900 Motorola 56,588 1.07
--------- -----
170,416 3.22
--------- -----
Energy Sources
2,200 Chevron Corp. 129,800 2.46
1,500 Exxon Corp. 130,313 2.46
1,000 Mobil 112,125 2.12
--------- -----
372,238 7.04
--------- -----
Financial Services
2,800 Federal National Mortgage 93,800 1.77
--------- -----
93,800 1.77
--------- -----
Food & Household Products
*40 Earthgrains 1,310 0.02
1,100 Kellogg 80,575 1.52
1,900 Procter & Gamble 172,188 3.26
--------- -----
254,073 4.80
--------- -----
Forest Products & Paper
1,300 International Paper 47,938 0.91
--------- -----
47,938 0.91
--------- -----
Health & Personal Care
2,300 Abbott Laboratories 100,049 1.89
2,400 American Home Products 144,300 2.73
900 Este Lauder A 38,024 0.72
2,900 Gillette 180,886 3.42
4,200 Johnson & Johnson 207,900 3.93
3,300 Merck 213,262 4.03
2,400 Pfizer 171,300 3.24
--------- -----
1,055,721 19.96
--------- -----
Industrial Components
1,300 Rockwell International 74,425 1.41
--------- -----
74,425 1.41
--------- -----
Insurance
2,300 American General 83,663 1.58
--------- -----
83,663 1.58
--------- -----
Leisure & Tourism
1,700 McDonalds Corp. 79,475 1.50
1,000 Walt Disney 62,875 1.19
--------- -----
142,350 2.69
--------- -----
Merchandising
2,400 Wal-Mart Stores 60,900 1.15
2,400 Walgreen 80,400 1.52
--------- -----
141,300 2.67
--------- -----
Multi-Industry
1,300 AlliedSignal 74,263 1.40
*6 Berkshire Hathaway 184,200 3.48
1,300 Minnesota Mining &
Manufacturing 89,700 1.70
--------- -----
348,163 6.58
--------- -----
Recreation, Other Consumer Goods
1,200 Eastman Kodak 93,300 1.76
--------- -----
93,300 1.76
--------- -----
Transportation Road & Rail
700 Norfolk Southern 59,325 1.12
700 Union Pacific 48,913 0.93
--------- -----
108,238 2.05
--------- -----
Total Equities (Cost $3,747,344) 5,077,496 96.04
--------- -----
Total Investments (Cost $3,747,344**) 5,077,496 96.04
Net current assets 209,193 3.96
--------- -----
Total net assets 5,286,689 100.00
========= ======
* Non-income producing security.
** Cost for federal income tax purposes is identical.
See notes to financial statements.
30
<PAGE>
- --------------------------------------------------------------------------------
GAM ASIAN CAPITAL FUND
- --------------------------------------------------------------------------------
FUND MANAGEMENT
- --------------------------------------------------------------------------------
- --------------- Adrian L. Cantwell is responsible for Asia ex Japan portfolios.
Prior to joining GAM in 1990 he was a director of Gartmore
PHOTO Limited, Hong Kong, responsible for South Eaast Asian
investment. He was educated at the University of Cardiff.
- --------------- Mr. Cantwell has lived in Hong Kong since 1984.
The Fund's investment objective is long-term capital appreciation,
generally through investment in equity securities issued by companies in Asia
other than Japan. Countries in Asia include Hong Kong, Singapore, Malaysia,
Thailand, Vietnam, Indonesia, the Philippines, Korea, China, Taiwan, India,
Myanmar, Pakistan, Bangladesh and Sri Lanka. However, if the Fund determines
that the long-term capital appreciation of debt securities may equal or exceed
the return on equity securities, it may be substantially invested in debt
securities of companies and governments, their agencies and instrumentalities.
Any income realized by the Fund on its investments will be incidental to its
goal of long-term capital appreciation.
REPORT TO SHAREHOLDERS
- --------------------------------------------------------------------------------
The Facts
MSCI
GAM Asian Combined Average
Capital Far East 1 Month
GAM Asian (after Index Deposit
Capital sales load) (ex Japan) Rate
30th June, 96 US$10.06 393.30
- --------------------------------------------------------------------------------
% % % %
- --------------------------------------------------------------------------------
Quarter to June, 96 +1.82 -3.27 +3.99 +1.30
- --------------------------------------------------------------------------------
Jan-June, 1996 +5.56 +0.28 +10.63 +2.62
- --------------------------------------------------------------------------------
Average annual total return:-
- --------------------------------------------------------------------------------
1 year to June, 96 +2.98 -2.17 +8.84 +5.62
- --------------------------------------------------------------------------------
Since inception +0.95 -3.53 +7.88 +5.70
- --------------------------------------------------------------------------------
Performances are calculated on a total return basis. The Funds inception
was on 12th May, 1995. Indications of past performance are not necessarily
indicative of future performance. The investment return and principal value of
an investment will fluctuate so that an investors shares, when redeemed, may be
worth more or less than their original cost.
31
<PAGE>
- --------------------------------------------------------------------------------
GAM ASIAN CAPITAL FUND - REPORT TO SHAREHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
[GRAPH]
- --GAM ASIAN CAPITAL FUND
- --GAM ASIAN CAPITAL FUND (AFTER SALES LOAD)
- --MSCI AC FAR EAST EX JAPAN
- --AVERAGE 1 MONTH DEPOSIT RATE
NOTE: The graph compares the performance results of a hypothetical $10,000
investment in the Fund and a comparable index. The performance of the Fund is
also shown after adjustment to reflect the maximum sales load, which is waived
for certain investors. The performance of the index does not reflect brokerage
commissions and other expenses that would be incurred to acquire a comparable
portfolio of securities.
The average annual total return of GAM Asian Capital after deduction of
maximum sales charge of 5% was -2.17% for 1 year and -3.53% since inception for
the period ending June 30, 1996.
THE COMMENT
The highlight of the previous quarter has been the rebound in Taiwan. The
main index jumped over 30% as political relations with China began to improve
and after it was announced that Taiwan will be included for the first time in
some widely followed Morgan Stanley Capital International Asian indices.
Fundamentally, however, the earnings outlook for Taiwanese companies in the Fund
is now rather mixed. So having held significant exposure there for some time,
this is now being reduced into strength, with the assets being redeployed into
Hong Kong.
Over the next two years or more economic activity and corporate earnings
growth in Hong Kong should recover steadily from a depressed base. At the same
time falling inflation will highlight the improving quality of these earnings.
In itself, that ought to result in a higher price earnings multiple for the
market. But an even higher multiple may be achievable once the political
concerns centred around the 1997 handover can be put aside for good. Such a
re-rating would make Hong Kong one of the best performing Asian markets over the
next two years. Accordingly, the Fund is in the process of being re-positioned
to take full advantage of such a move. The emphasis will be to include those
companies with good quality, sustainable above-average earnings growth. Outside
of Hong Kong and Taiwan, there is currently little reason to change individual
holdings much as they remain diversified and of good quality. The exposure to
each one will be reduced, however, to facilitate the move into Hong Kong.
- ----------
Sources used are net asset value of the Fund which is
computed daily and Datastream.
The MSCI Combined Far East Index (ex Japan) is an arithmetical average weighted
by market value of the performance of some 400 securities listed on the stock
exchanges of Hong Kong, Indonesia, Korea, Malaysia, Philippines, Singapore,
Taiwan and Thailand. The combined market capitalisation of these companies
represents approximately 60% of the aggregate market value of the stock
exchanges of the above 8 countries. The percentage change in the value of the
index includes dividends reinvested.
32
<PAGE>
- --------------------------------------------------------------------------------
GAM ASIAN CAPITAL FUND - STATEMENT OF INVESTMENTS
- --------------------------------------------------------------------------------
AS AT 30TH JUNE, 1996 (UNAUDITED)
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ FUND
- --------------------------------------------------------------------------------
CONVERTIBLES
Taiwan
23,000 United Micro Electronics 1.25%
CV 2004 29,497 0.35
--------- ------
29,497 0.35
--------- ------
Total Convertibles (Cost $30,625) 29,497 0.35
--------- ------
EQUITIES
Hong Kong
40,000 Cathay Pacific Airways 73,378 0.87
258,000 CDL Hotels 141,653 1.67
15,000 Cheung Kong Holdings 108,032 1.28
174,000 First Pacific Company 268,617 3.16
169,000 HKR International 196,493 2.32
27,000 Hong Kong & China Gas 43,077 0.51
9,000 HSBC Holdings (HKD) 136,033 1.61
288,000 JCG Holdings 234,396 2.77
208,000 Li & Fung 197,500 2.33
12,000 Swire Pacific A 102,703 1.21
44,000 Wheelock 86,968 1.03
--------- ------
1,588,850 18.76
--------- ------
Indonesia
72,000 Aneka Kimia Raya (FR) 117,551 1.39
150,000 Asahimas Flat Glass (FR) 157,895 1.87
25,850 Bank Bali (FR) 55,532 0.66
80,000 Citra Marga Nusaphala Persa
(FR) 122,019 1.44
*70,000 Sekar Bumi (FR) 42,105 0.50
42,000 Sorini Corp. (FR) 230,977 2.73
70,000 Telekomunikasi Indonesia (FR) 106,015 1.25
11,200 Tri Polyta Indonesia ADR 120,400 1.42
--------- ------
952,494 11.26
--------- ------
Korea
12,000 Hyundai Motor GDR 151,500 1.79
1,000 Pohang Iron & Steel 80,316 0.95
4,000 Samsung Electronics GDS
(Non Voting) 98,000 1.16
--------- ------
329,816 3.90
--------- ------
Malaysia
14,000 Resorts World 80,257 0.95
*50,000 Technology Resources Industries 174,384 2.06
--------- ------
254,641 3.01
--------- ------
New Zealand
57,000 Fernz Corporation 170,379 2.01
58,000 Helicopter Line 111,593 1.32
--------- ------
281,972 3.33
--------- ------
Philippines
3,500 Philippine Long Distance
Telephone ADR 203,438 2.40
--------- ------
203,438 2.40
--------- ------
Singapore
44,000 DBS Land 150,929 1.78
9,000 Development Bank of Singapore
(FR) 112,261 1.33
91,000 Kim Eng Holdings 85,777 1.01
99,000 Osprey Maritime 170,280 2.01
15,000 Singapore Airlines (FR) 158,398 1.87
81,000 Wing Tai Holdings 172,218 2.03
--------- ------
849,863 10.03
--------- ------
Taiwan
*21,000 Acer GDR 159,600 1.89
*20,340 Advanced Semiconductor
Engineering GDR 175,432 2.07
*6,000 China Steel GDR 153,000 1.81
*21,753 GVC Corp. GDR 149,552 1.77
*13,600 Siliconware Precision Industries
GDR 107,100 1.27
*28,000 Yageo Corp. GDR 217,000 2.56
--------- ------
961,684 11.37
--------- ------
33
<PAGE>
- --------------------------------------------------------------------------------
GAM ASIAN CAPITAL FUND - STATEMENT OF INVESTMENTS
- --------------------------------------------------------------------------------
AS AT 30TH JUNE, 1996 (UNAUDITED)
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ FUND
- --------------------------------------------------------------------------------
CONVERTIBLES
Thailand
11,000 Bangkok Bank (FR) 149,045 1.76
*86,000 Bangkok Expressway (FR) 141,425 1.67
30,000 Krung Thai Bank (FR) 140,618 1.66
9,000 Siam Commercial Bank (FR) 130,455 1.54
12,000 Thai Farmers Bank (FR) 131,401 1.55
35,000 Thai Glass Industries (FR) 172,326 2.04
33,000 Thai Military Bank (FR) 129,983 1.54
60,000 Thai Reinsurance (FR) 224,516 2.65
--------- ------
1,219,769 14.41
--------- ------
Total Equities (Cost $6,484,643) 6,642,527 78.47
--------- ------
EQUITY FUNDS
Taiwan
*11,000 ROC Taiwan Fund 125,125 1.48
5,750 Taiwan Fund 138,000 1.63
--------- ------
263,125 3.11
--------- ------
Total Equity Funds (Cost $224,437) 263,125 3.11
--------- ------
Total Investments (Cost $6,739,705**) 6,935,149 81.93
Net current assets 1,530,013 18.07
--------- ------
Total net assets 8,465,162 100.00
========= ======
* Non-income producing security.
**Cost for federal income tax purposes is identical.
See notes to financial statements.
GEOGRAPHIC ANALYSIS
AS OF 30TH JUNE, 1996
[THE FOLLOWING TABLE REPRESENTS A CHART IN THE PRINTED PIECE.]
HONG KONG 18.76%
INDONESIA 11.26%
THAILAND 14.41%
NEW ZEALAND 3.33%
TAIWAN 14.83%
NET CURRENT ASSETS 18.07%
OTHER AREAS 5.41%
KOREA 3.90%
SINGAPORE 10.03%
34
<PAGE>
- --------------------------------------------------------------------------------
GAMERICA CAPITAL FUND
- --------------------------------------------------------------------------------
FUND MANAGEMENT
- --------- Gordon Grender has been associated with GAM since 1983 and is adviser
to GAMerica. He has been actively involved in fund management in North
American stock markets since 1974. Mr. Grender is a director of GAM
[PHOTO] International Management Limited.
- ---------
The Funds investment objective is long-term capital appreciation, generally
through investment in equity securities issued by companies with principal
offices in the United States. However, if the Fund determines that the long-term
capital appreciation of debt securities may equal or exceed the return on equity
securities, it may be substantially invested in debt securities of companies and
governments, their agencies and instrumentalities. Any income realized by the
Fund on its investments will be incidental to its goal of long-term capital
appreciation.
REPORT TO SHAREHOLDERS
- --------------------------------------------------------------------------------
The Facts
GAMerica
Capital Average
(after S & P 1 Month
GAMerica sales Comp Deposit
Capital load) Index Rate
30th June, 96 US$12.57 670.63
- --------------------------------------------------------------------------------
% % % %
- --------------------------------------------------------------------------------
Quarter to June, 96 +17.15 +11.29 + 4.68 +1.30
- --------------------------------------------------------------------------------
Jan-June, 1996 +25.32 +19.06 +10.32 +2.62
- --------------------------------------------------------------------------------
Average annual
total return:-
- --------------------------------------------------------------------------------
1 year to June, 96 +27.43 +21.06 +26.26 +5.62
- --------------------------------------------------------------------------------
Since inception +23.58 +18.10 +27.25 +5.70
- --------------------------------------------------------------------------------
Performances are calculated on a total return basis. The Funds inception
was on 12th May, 1995. Indications of past performance are not necessarily
indicative of future performance. The investment return and principle value of
an investment will fluctuate so that an investors shares, when redeemed, may be
worth more or less than their original cost.
35
<PAGE>
- --------------------------------------------------------------------------------
GAMERICA CAPITAL FUND -- REPORT TO SHAREHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
[GRAPH]
- --GAMERICA CAPITAL
- --GAMERICA CAPITAL (AFTER SALES LOAD)
- --STANDARD & POOR'S COMPOSITE INDEX
- --AVERAGE 1 MONTH DEPOSIT RATE
NOTE: The graph compares the performance results of a hypothetical $10,000
investment in the Fund and a comparable index. The performance of the Fund is
also shown after adjustment to reflect the maximum sales load, which is waived
for certain investors. The performance of the index does not reflect brokerage
commissions and other expenses that would be incurred to acquire a comparable
portfolio of securities.
The average annual total return of GAMerica Capital after deduction of
maximum sales charge of 5% was 21.06% for 1 year and 18.10% since inception for
the period ending June 30, 1996.
THE COMMENT
The US stock market continued to advance in the second quarter with a good
deal less volatility than in the first quarter. Measured by the Standard &
Poor's Composite Index, the market increased by 4.68%.
The trends evident in the first quarter continued into the second with
strong consumer spending, particularly on automobiles. The financial position of
the consumer continues to weaken however, evidenced by the increased provisions
for bad debts being made by the credit card industry.
It seems likely that the Federal Reserve will wait and see whether the
economy slows in the summer before deciding whether to raise interest rates to
pre-empt any burst of inflation.
The growth of corporate earnings is flattening out from the exceptional
rates of growth of the past few years.
We think this period of exceptional growth will be seen to be an aberration
in the long-term trend. Industry in the US failed to anticipate the very low
increase in unit labour costs in the 1990s and as a consequence underproduced.
This resulted in unusually high profits being earned.
We continue to believe the longer term outlook for the US stock market is
reasonably good notwithstanding that the first year of a President's term of
office is often a poor one for the stock market.
- --------------
Sources used are the net asset value of the Fund which is computed daily and
Datastream.
The Standard & Poors Composite Index is an unmanaged
weighted index of the stock performance of 500 industrial, transportation,
utility and financial companies. The percentage change in the value of the index
includes dividends reinvested.
36
<PAGE>
- --------------------------------------------------------------------------------
GAMERICA CAPITAL FUND -- STATEMENT OF INVESTMENTS
- --------------------------------------------------------------------------------
as at 30th June, 1996 (unaudited)
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ FUND
- --------------------------------------------------------------------------------
EQUITIES
Beverages & Tobacco
2,000 American Brands 090,750 3.81
---------- ------
90,750 3.81
---------- ------
Business & Public Services
*26,400 Titan Corp. 151,800 6.38
---------- ------
151,800 6.38
---------- ------
Construction & Housing
12,500 Palm Harbor Homes 390,625 16.40
---------- ------
390,625 16.40
---------- ------
Electrical & Electronics
2,500 AVX Corp. 46,250 1.94
---------- ------
46,250 1.94
---------- ------
Energy Sources
3,000 Unocal 101,250 4.25
---------- ------
101,250 4.25
---------- ------
Food & Household Products
3,000 Archer-Daniels-Midland 57,375 2.41
3,000 H. J. Heinz 91,125 3.83
---------- ------
148,500 6.24
---------- ------
Health & Personal Care
8,000 Intimate Brands A 183,000 7.69
*5,000 Regency Health Services 56,875 2.39
*30,000 Unilab 46,875 1.97
---------- ------
286,750 12.05
---------- ------
Industrial Components
*15,000 Foamex International 183,750 7.72
---------- ------
183,750 7.72
---------- ------
Insurance
3,000 USLIFE 98,625 4.14
---------- ------
98,625 4.14
---------- ------
Merchandising
*6,000 Best Buy 137,250 5.77
10,000 Freds A 110,000 4.62
2,000 Mercantile Stores 117,250 4.92
5,000 Party City 88,750 3.73
---------- ------
453,250 19.04
---------- ------
Telecommunications
3,000 WorldCom 166,125 6.98
---------- ------
166,125 6.98
---------- ------
Total Equities (Cost $1,686,092) 2,117,675 88.95
---------- ------
Total Investments (Cost $1,686,092**) 2,117,675 88.95
---------- ------
Net current assets 262,964 11.05
---------- ------
Total net assets 2,380,639 100.00
========== ======
* Non-income producing security.
**Cost for federal income tax purposes is identical.
See notes to financial statements.
37
<PAGE>
- --------------------------------------------------------------------------------
GAM FUNDS, INC. -- PORTFOLIO ANALYSIS
- --------------------------------------------------------------------------------
AS AT 30TH JUNE, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
GAM GAM GAM GAM
GAM GAM GAM Pacific Japan North Asian GAMerica
International Global Europe Basin Capital America Capital Capital
% % % % % % % %
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ANALYSIS, BY GEOGRAPHICAL AREA:
Australia -- -- -- 10.00 -- -- -- --
China -- -- -- -- -- -- -- --
France 7.74 1.80 22.57 -- -- -- -- --
Germany 21.93 19.95 8.29 -- -- -- -- --
Hong Kong 3.90 4.02 -- 10.75 -- -- 18.76 --
Indonesia -- -- -- 5.88 -- -- 11.26 --
Italy -- -- 2.83 -- -- -- -- --
Japan 9.65 4.82 -- 30.67 80.58 -- -- --
Korea -- -- -- 4.52 -- -- 3.90 --
Malaysia 1.12 -- -- 2.53 -- -- 3.01 --
Netherlands 10.27 6.59 11.16 -- -- -- -- --
New Zealand -- -- -- 2.95 -- -- 3.3 --
Singapore 4.66 2.64 -- 7.99 -- -- 10.03 --
Spain 1.52 -- 2.86 -- -- -- -- --
Sweden 1.36 1.59 5.35 -- -- -- -- --
Switzerland 9.08 7.23 8.67 -- -- -- -- --
Taiwan -- -- -- 4.94 -- -- 14.83 --
Thailand - -- -- 8.69 -- -- 14.41 --
United Kingdom 24.19 18.68 18.07 -- -- -- --
United States -- 35.57 -- -- -- 96.04 -- 88.95
Other Areas 3.21 -- 3.42 1.96 -- -- 2.40 --
Other/Net current assets/(liabilities) 1.37 (2.89) 16.78 9.12 19.42 3.96 18.07 11.05
ANALYSIS, BY SECTOR:
Aerospace & Military Technology -- -- -- -- -- -- -- --
Appliances & Household Durables 1.69 1.40 -- 2.27 3.16 -- -- --
Automobiles -- -- 0.78 2.52 2.39 2.66 1.79 --
Banking 15.12 16.34 6.08 16.06 1.92 5.84 11.64 --
Beverages/Tobacco 0.91 2.65 1.83 -- 0.36 18.02 -- 3.81
Broadcasting & Publishing 1.07 0.69 6.87 0.83 0.32 1.19 -- --
Building Materials & Components -- -- 1.18 2.16 -- -- -- --
Business & Public Services 6.59 6.18 9.30 3.16 4.90 -- 1.44 6.38
Chemicals -- -- 6.04 , -- 2.76 5.36 7.55 --
Construction & Housing 0.22 1.55 0.78 -- -- -- -- 16.40
Data Processing & Reproduction -- -- -- -- 0.52 0.92 1.89 --
Electrical & Electronics 1.54 1.75 -- 4.82 5.75 5.61 5.49 1.94
Electronic Comp & Instruments 1.16 -- -- 0.96 0.55 3.22 2.42 --
Energy Sources -- -- 5.43 3.25 -- 7.04 -- 4.25
Financial Services 2.94 11.49 0.93 6.10 9.22 1.77 3.78 --
Fixed Interest 28.86 18.75 -- -- -- -- -- --
Fixed Interest Options 0.74 1.08 -- -- -- -- -- --
Fixed Interest Warrants 1.01 1.20 -- -- -- -- -- --
Food & Household Products 2.37 -- 1.26 0.54 -- 4.80 0.69 6.24
</TABLE>
38
<PAGE>
- --------------------------------------------------------------------------------
GAM FUNDS, INC. -- PORTFOLIO ANALYSIS (CONTINUED)
- --------------------------------------------------------------------------------
AS AT 30TH JUNE, 1996
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
GAM GAM GAM GAM
GAM GAM GAM Pacific Japan North Asian GAMerica
International Global Europe Basin Capital America Capital Capital
% % % % % % % %
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ANALYSIS BY SECTOR, (CONTINUED):
Forest Products & Paper -- -- -- -- -- 0.91 --
Gold Mines -- -- -- 1.93 -- -- -- --
Health & Personal Care 10.31 19.15 8.03 1.27 5.89 19.96 -- 12.05
Index Futures (0.33) (0.12) -- -- -- -- -- --
Industrial Components 0.24 0.58 -- 0.43 1.83 1.41 -- 7.72
Insurance 6.40 6.14 -- 1.84 5.55 1.58 2.65 4.14
Investment Funds -- -- -- 3.69 2.41 -- 3.11 --
Leisure & Tourism - -- -- 1.91 -- 2.69 3.94 -- --
Machinery & Engineering 1.12 -- 9.63 0.52 5.76 -- 1.27 --
Merchandising -- 2.09 3.77 4.10 13.36 2.67 -- 19.04
Metals - Non-Ferrous 1.14 1.40 1.16 3.70 0.58 -- -- --
Metals - Steel -- -- 2.17 -- -- -- 2.76 --
Misc. Materials & Commodities -- -- -- 1.27 -- - 3.90 --
Multi-Industry 3.90 1.33 4.75 4.83 0.34 6.58 5.41 --
Real Estate 0.88 0.99 2.35 8.83 1.40 -- 7.41 --
Recreation, Other Consumer Goods 2.12 1.32 -- 4.92 5.74 1.76 -- --
Telecommunications 0.66 0.92 7.08 5.28 3.22 -- 5.72 6.98
Transportation - Airlines -- -- -- -- -- -- 2.74 --
Transportation - Road & Rail 0.64 -- -- 1.32 0.44 2.05 1.67 --
Transportation - Shipping -- -- -- -- -- -- 2.01 --
Utilities - Electrical & Gas 6.59 6.01 3.80 2.37 0.33 -- 0.51 --
Wholesale & International Trade 0.74 -- -- -- 1.71 -- 2.33 --
Other Industries -- -- -- -- 0.17 -- 0.50 --
Other/Net current assets/(liabilities) 1.37 (2.89) 16.78 9.12 19.42 3.96 18.07 11.05
ANALYSIS, BY INVESTMENT:
Equities 63.48 76.62 79.76 84.58 77.04 96.04 78.47 88.95
Bonds 28.86 18.75 -- -- -- -- -- --
Convertibles 1.01 -- 0.40 1.25 -- -- 0.35 --
Futures (0.33) (0.12) -- -- -- -- -- --
Equity Warrants 0.03 0.04 0.01 1.36 1.03 -- -- --
Options 0.74 1.08 -- -- -- -- -- --
Bond Warrants 1.01 1.20 -- -- -- -- -- --
Adjustable Rate Index Notes 2.08 3.61 -- -- 0.10 -- -- --
Equity Funds -- -- -- 3.69 2.41 -- 3.11 --
Preferred Shares 1.75 1.71 3.05 -- -- -- -- --
Other/Net current assets/(liabilities) 1.37 (2.89) 16.78 9.12 19.42 3.96 18.07 11.05
39
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
GAM FUNDS, INC. -- STATEMENTS OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
at 30th June, 1996 (unaudited)
<TABLE>
<CAPTION>
GAM
GAM GAM GAM Pacific
International Global Europe Basin
---------------------------------------------------------
ASSETS (in US$)
<S> <C> <C> <C> <C>
Investments in securities at value $850,083,193 $19,442,982 $26,964,972 $73,866,119
Cash -- -- 5,907,709 7,363,094
Cash - Foreign currencies -- 1,831 494,837 60,179
Receivables:
Securities sold 16,026,301 -- 261,833 --
Capital shares sold 2,818,858 49,897 -- 87,402
Dividends, interest and other 13,695,318 231,623 133,594 182,159
Net equity in foreign currency exchange contracts (Note 5) -- -- -- 356,413
Due from broker for futures contracts (Note 5) 2,953,990 17,652 -- --
Deferred organizational expenses and other assets 37,848 28,118 15,886 25,755
------------ ------------ ------------ ------------
TOTAL ASSETS 885,615,508 19,772,103 33,778,831 81,941,121
------------ ------------ ------------ ------------
LIABILITIES
Payables:
Securities purchased 3,788,177 294,294 1,073,054 236,416
Capital shares redeemed 579,289 90,207 110,271 122,315
Due to Custodian 8,905,745 261,156 -- --
Net equity in foreign currency exchange contracts (Note 5) 10,485,210 134,765 85,929 --
Accrued expenses and other 2,847,017 117,333 107,948 306,365
------------ ------------ ------------ ------------
TOTAL LIABILITIES 26,605.438 897,755 1,377,202 665,096
------------ ------------ ------------ ------------
NET ASSETS $859,010,070 $18,874.348 $32,401,629 $81,276,025
============ =========== =========== ===========
SOURCE OF NET ASSETS
Net capital paid in on shares of capital stock $875,062,190 $17,041,365 $28,184,339 $74,434,280
Accumulated net investment income/(loss) 15,942,522 190,789 206,987 94,594
Accumulated net realized gains/(losses) (21,428,620) 481,137 242,387 1,126,572
Net unrealized appreciation/(depreciation) (10,566,022) 1,161,057 3,767,916 5,620,579
------------ ------------ ------------ ------------
NET ASSETS $859,010,070 $18,874,348 $32,401,629 $81,276,025
============ =========== =========== ===========
CLASS A SHARES OUTSTANDING 41,800,788 1,397,682 2,812,344 4,469,898
CLASS A NET ASSETS $830,424,160 $18,090,825 $32,401,629 $79,023,510
Net asset value and redemption value per share (Note 3) $19.87 $12.94 $11.52 $17.68
Offering price per share (100/95 x net asset
value per share reduced on sales of $100,000 or more). $20.92
$13.62 $12.13 $18.61
CLASS D SHARES OUTSTANDING 1,445,227 61,335 127,941
CLASS D NET ASSETS $28,585,910 $783,523 $2,252,515
Net asset value and redemption value per share (Note 3) $19.78 $12.77 $17.61
Offering price per share (100/96.5 x net
asset value per share reduced on sales of $100,000 or more) $20.50 $13.23 $18.25
Identified cost of investments $874,199,214 $18,113,429 $23,107,485 $68,600,151
</TABLE>
See notes to financial statements.
40
<PAGE>
- --------------------------------------------------------------------------------
GAM FUNDS, INC. -- STATEMENTS OF ASSETS AND LIABILITIES (continued)
- --------------------------------------------------------------------------------
at 30th June, 1996 (unaudited)
<TABLE>
<CAPTION>
GAM GAM GAM
Japan North Asian GAMerica
Caital America Capital Capital
----------------------------------------------------
ASSETS (IN US$)
<S> <C> <C> <C> <C>
Investments in securities at value $33,057,131 $5,077,496 $6,935,149 $2,117,675
Cash 7,227,192 258,538 1,347,429 256,446
Cash - Foreign currencies 135,998 -- 48,473 --
Receivables:
Securities sold 195 -- 272,628 --
Capital shares sold 11,914 -- 15,000 --
Dividends, interest and other 58,465 8,928 8,365 795
Due from adviser -- -- -- 12,356
Net equity in foreign currency exchange contracts (Note 5) 983,970 -- -- --
Deferred organizational expenses and other assets 29,943 15,112 35,171 35,817
----------- ---------- ---------- ----------
TOTAL ASSETS 41,504,808 5,360,074 8,662,215 2,423,089
----------- ---------- ---------- ----------
LIABILITIES
Payables:
Securities purchased 293,082 -- 140,329 --
Capital shares redeemed 65,185 45,911 18,043 23,133
Accrued expenses and other 124,389 27,474 38,681 19,317
----------- ---------- ---------- ----------
TOTAL LIABILITIES 482,656 73,385 197,053 42,450
----------- ---------- ---------- ----------
NET ASSETS $41,022,152 $5,286,689 $8,465,162 $2,380,639
=========== ========== ========== ==========
SOURCE OF NET ASSETS
Net capital paid in on shares of capital stock $38,486,008 $3,452,506 $8,352,231 $1,871,409
Accumulated net investment income/(loss) (255,619) (11,469) (56,869) (52,240)
Accumulated net realized gains/(losses) (27,418) 515,500 (25,496) 129,887
Net unrealized appreciation/(depreciation) 2,819,181 1,330,152 195,296 431,583
----------- ---------- ---------- ----------
NET ASSETS $41,022,152 $5,286,689 $8,465,162 $2,380,639
=========== ========== ========== ==========
CLASS A SHARES OUTSTANDING 3,701,224 397,749 841,126 189,457
CLASS A NET ASSETS $41,022,152 $5,286,689 $8,465,162 $2,380,639
Net asset value and redemption value per share (Note 3) $11.08 $13.29 $10.06 $12.57
Offering price per share (100/95 x net asset value per share
reduced on sales of $100,000 or more $11.66 $13.99 $10.59 $13.23
Identified cost of investments $31,220,937 $3,747,344 $6,739,705 $7,686,092
See notes to financial statements
</TABLE>
41
<PAGE>
- --------------------------------------------------------------------------------
GAM FUNDS, INC. -- STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED 30TH JUNE, 1996 (UNAUDITED)\
<TABLE>
<CAPTION>
GAM
GAM GAM GAM PACIFIC
INTERNATIONAL GLOBAL EUROPE BASIN
---------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME (in US$)
Dividends (Note 4) $ 9,726,191 $ 226,583 $ 388,207 $ 531,529
Interest (Note 4) 11,967,715 213,929 28,383 121,700
------------ ------------ ---------- -----------
21,693,906 440,512 416,590 653,229
------------ ------------ ---------- -----------
EXPENSES
Investment advisory fee (Note 2) 3,946,914 109,421 130,604 369,720
Custodian fees and expenses 404,632 40,570 22,524 42,563
Transfer agent fees and expenses 251,887 9,209 6,185 13,898
Shareholder servicing fees 317,301 8,829 7,561 43,342
Distribution fee - Class D (Note 2) 46,315 1,222 -- 4,391
Professional fees 22,945 20,700 14,138 17,709
Administrative expenses 559,323 11,470 15,772 45,207
Printing 110,149 6,076 7,913 4,682
Filing fees 123,554 27,503 15,719 28,416
Other 7,610 251 8,243 809
TOTAL OPERATING EXPENSES 5,790,630 235,251 228,659 570,737
Interest expense -- 11,745 -- --
------------ ------------ ---------- -----------
Total expenses 5,790,630 246,996 228,659 570,737
------------ ------------ ---------- -----------
Fees paid indirectly (Note 2) (82,638) (2,060) (7,513) (42,563)
------------ ------------ ---------- -----------
Net expenses 5,707,992 244,936 221,146 528,174
------------ ------------ ---------- -----------
Net investment income 15,985,914 195,576 195,444 125,055
------------ ------------ ---------- -----------
REALIZED AND UNREALIZED GAIN/(LOSS) FROM
INVESTMENTS AND FOREIGN CURRENCY
Net realized gain/(loss) from:
Securities and futures (16,783,738) 1,104,741 537,402 (2,287)
Foreign currency transactions 5,711,486 42,091 477,732 2,675,885
------------ ------------ ---------- -----------
(11,072,252) 1,146,832 1,015,134 2,673,598
------------ ------------ ---------- -----------
Unrealized appreciation/(depreciation) for the period:
Securities and futures (45,715,810) (2,143,140) 2,230,681 829,442
Foreign currency translation of assets and
liabilities other than investments (15,744,120) (263,470) 5,963 (1,469,063)
------------ ------------ ---------- -----------
(61,459,930) (2,406,610) 2,236,644 (639,621)
------------ ------------ ---------- -----------
Net gain/(loss) on investments and foreign currencies (72,532,182) (1,259,778) 3,251,778 2,033,977
------------ ------------ ---------- -----------
NET INCREASE/(DECREASE) IN NET ASSETS FROM OPERATIONS ($56,546,268) ($ 1,064,202) $3,447,222 $ 2,159,032
------------ ------------ ---------- -----------
</TABLE>
See notes to financial statements.
42
<PAGE>
- --------------------------------------------------------------------------------
GAM FUNDS, INC. -- STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED 30TH JUNE, 1996 (UNAUDITED)\
<TABLE>
<CAPTION>
GAM GAM GAM GAMERICA
JAPAN CAPITAL NORTH AMERICA ASIAN CAPITAL CAPITAL
--------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME (IN US$)
Dividends (Note 4) $ 75,686 $59,274 $ 64,535 $ 12,040
Interest (Note 4) 38,322 1,006 4,989 5,251
---------- -------- -------- --------
114,008 60,280 69,524 17,291
---------- -------- -------- --------
EXPENSES
Investment advisory fee (Note 2) 148,921 28,576 34,239 12,356
Custodian fees and expenses 28,009 5,228 23,347 7,623
Transfer agent fees and expenses 7,862 2,834 2,243 1,977
Shareholder servicing fees 8,963 713 1,296 451
Professional fees 12,957 9,106 11,456 9,112
Administrative expenses 14,005 2,544 2,675 49
Printing 7,337 5,074 3,221 3,841
Amortization of organization costs 8,958 -- 3,741 3,740
Filing fees 14,742 14,660 42,006 41,871
Other 310 2,819 73 28
---------- -------- -------- --------
Total operating expenses 252,064 71,554 124,297 81,048
Expenses reimbursed (Note 2) -- -- -- (12,356)
Interest expense -- 1,167 -- 2,643
---------- -------- -------- --------
Total expenses 252,064 72,721 124,297 71,335
---------- -------- -------- --------
Fees paid indirectly (Note 2) (18,064) (649) (2,723) (972)
---------- -------- -------- --------
Net expenses 234,000 72,072 121,574 70,363
---------- -------- -------- --------
Net investment income/(loss) (119,992) (11,792) (52,050) (53,072)
---------- -------- -------- --------
REALIZED AND UNREALIZED GAIN/(LOSS) FROM
INVESTMENTS AND FOREIGN CURRENCY
Net realized gain/(loss) from:
Securities and futures 54,051 515,500 (22,498) 129,887
Foreign currency transactions 972,849 -- 3,020 --
---------- -------- -------- --------
1,026,900 515,500 (19,478) 129,887
---------- -------- -------- --------
Unrealized appreciation for the period:
Securities and futures 1,327,494 121,218 396,400 431,630
Foreign currency translation of assets
and liabilities other than investments 452,668 -- 50 --
---------- -------- -------- --------
1,780,162 121,218 396,450 431,630
---------- -------- -------- --------
Net gain on investments and foreign
currencies 2,807,062 636,718 376,972 561,517
---------- -------- -------- --------
NET INCREASE IN NET ASSETS FROM OPERATIONS $2,687,070 $624,926 $324,922 $508,445
---------- -------- -------- --------
</TABLE>
See notes to financial statements.
43
<PAGE>
- --------------------------------------------------------------------------------
GAM FUNDS, INC.--STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GAM International GAM Global GAM Europe
----------------------------- --------------------------- --------------------------
For the six For the year For the six For the year For the six For the year
months ended ended months ended ended months ended ended
30th June, 31st Dec., 30th June, 31st Dec., 30th June, 31st Dec.,
1996 1995 1996 1995 1996 1995
----------------------------------------------------------------------------------------
(unaudited) (unaudited) (unaudited)
<S> <C> <C> <C> <C> <C> <C>
INCREASE/(DECREASE) IN NET ASSETS FROM:
Operations Net investment income $ 15,985,914 $ 12,014,169 $ 195,576 $ 615,585 $ 195,444 $ 151,856
Net realized gain/(loss) (11,072,252) 3,986,558 1,146,832 1,001,264 1,015,134 1,155,176
Unrealized appreciation/
(depreciation) for the period (61,459,930) 55,707,766 (2,406,610) 4,216,239 2,236,644 1,365,769
------------- ------------ ----------- ----------- ----------- -----------
Net increase/(decrease) in
net assets from operations (56,546,268) 71,708,493 (1,064,202) 5,833,088 3,447,222 2,672,801
Dividends paid to shareholders
from:Net investment income
Class A -- (11,449,364) -- (524,618) -- (137,849)
Class D -- (164,760) -- (6,086) -- (14,596)
Net realized gain on investments
Class A -- (12,880,231) -- (1,107,972) -- --
Class D -- (189,648) -- (13,417) -- --
Capital share transactions (Note 3) 346,608,293 363,587,999 (6,517,202) 2,334,999 5,992,974 (11,791,785)
------------- ------------ ----------- ----------- ----------- -----------
Total increase/(decrease) in net assets 290,062,025 410,612,489 (7,581,404) 6,515,994 9,440,196 (9,271,429)
NET ASSETS
Beginning of period 568,948,045 158,335,556 26,455,752 19,939,758 22,961,433 32,232,862
------------- ------------ ----------- ----------- ----------- -----------
End of period $ 859,010,070 $568,948,045 $18,874,348 $26,455,752 $32,401,629 $22,961,433
------------- ------------ ----------- ----------- ----------- -----------
</TABLE>
See notes to financial statements.
44
<PAGE>
- --------------------------------------------------------------------------------
GAM FUNDS, INC.--STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GAM Pacific Basin GAM Japan Capital GAM North America
----------------------------- --------------------------- --------------------------
For the six For the year For the six For the year For the six For the year
months ended ended months ended ended months ended ended
30th June, 31st Dec., 30th June, 31st Dec., 30th June, 31st Dec.,
1996 1995 1996 1995 1996 1995
----------------------------------------------------------------------------------------
(unaudited) (unaudited) (unaudited)
<S> <C> <C> <C> <C> <C> <C>
INCREASE/(DECREASE) IN NET ASSETS FROM:
Operations
Net investment income/(loss) $ 125,055 ($30,461) ($119,992)
($135,428) ($11,792) $345
Net realized gain/(loss) 2,673,598 3,325,760 1,026,900
(961,998) 515,500 18,699
Unrealized appreciation/ (depreciation)
for the period (639,621) (2,637,550) 1,780,162 1,266,324 121,218 1,023,284
------------ ------------ ------------ ------------ ---------- ----------
Net increase/(decrease) in net assets
from operations 2,159,032 657,749 2,687,070 168,898 624,926 1,042,328
Dividends paid to shareholders from:Net
investment income
Class A -- -- -- (22,428) -- (22)
Class D -- -- -- -- -- --
Net realized gain on investments
Class A -- (4,120,556) -- (12,278) -- (18,699)
Class D -- (69,502) -- -- -- --
Capital share transactions (Note 3) 23,625,588 10,496,400 24,735,079 4,059,662 (1,318,991) 3,070,513
------------ ------------ ------------ ------------ ---------- ----------
Total increase/(decrease) in net assets 25,784,620 6,964,091 27,422,149 4,193,854 (694,065) 4,094,120
NET ASSETS
Beginning of period 55,491,405 48,527,314 13,600,003 9,406,149 5,980,754 1,886,634
------------ ------------ ------------ ------------ ---------- ----------
End of period $ 81,276,025 $ 55,491,405 $ 41,022,152 $ 13,600,003 $5,286,689 $5,980,754
------------ ------------ ------------ ------------ ---------- ----------
</TABLE>
See notes to financial statements.
45
<PAGE>
- --------------------------------------------------------------------------------
GAM FUNDS, INC.--STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GAM Asian Capital GAMerica Capital
----------------------------- ---------------------------
For the six For the year For the six For the year
months ended ended months ended ended
30th June, 31st Dec., 30th June, 31st Dec.,
1996 1995* 1996 1995*
----------------------------------------------------------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
INCREASE/(DECREASE) IN NET ASSETS FROM:
Operations
Net investment income/(loss) ($52,050) ($4,819) ($53,072) $22,039
Net realized gain/(loss) (19,478) 19,945 129,887 12,000
Unrealized appreciation/
(depreciation) for the period 396,450 (201,154) 431,630 (47)
----------- ----------- ----------- -----------
Net increase/(decrease) in net
assets from operations 324,922 (186,028) 508,445 33,992
Dividends paid to shareholders from:
Net investment income
Class A -- -- -- (21,207)
Class D -- -- -- --
Net realized gain on investments
Class A -- (25,963) -- (12,000)
Class D -- -- -- --
Return of capital - -- -- --
Capital share transactions (Note 3) 2,579,825 5,772,406 (1,157,062) 3,028,471
----------- ----------- ----------- -----------
Total increase/(decrease) in net assets 2,904,747 5,560,415 (648,617) 3,029,256
NET ASSETS
Beginning of period 5,560,415 -- 3,029,256 --
----------- ----------- ----------- -----------
End of period $ 8,465,162 $ 5,560,415 $ 2,380,639 $ 3,029,256
----------- ----------- ----------- -----------
* Period from 12th May, 1995 (Commencement of operations) to 31st December, 1995.
</TABLE>
See notes to financial statements.
46
<PAGE>
- --------------------------------------------------------------------------------
GAM Funds, Inc. -- Notes to Financial Statements
- --------------------------------------------------------------------------------
at 30th June, 1996 (unaudited)
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES
GAM Funds, Inc. (the "Company"), is an open-end diversified investment company
registered under the Investment Company Act of 1940 comprised of eight
portfolios: GAM International Fund, GAM Global Fund, GAM Europe Fund, GAM
Pacific Basin Fund, GAM Japan Capital Fund, GAM North America Fund, GAM Asian
Capital Fund, and GAMerica Capital Fund (the "Funds"). GAM Asian Capital Fund
and GAMerica Capital Fund each commenced operations on 12th May, 1995.
Each Fund seeks long-term capital appreciation by investing primarily in equity
securities. GAM International Fund invests primarily in securities of companies
in Europe, the Pacific Basin and Canada. GAM Global Fund invests primarily in
securities of companies in the United States, Europe, the Pacific Basin and
Canada. GAM Europe Fund invests primarily in companies of Europe. GAM Pacific
Basin Fund invests primarily in securities of companies in the Pacific Basin.
GAM Japan Capital Fund invests primarily in securities of companies in Japan.
GAM Asian Capital Fund invests primarily in securities of companies in Asia
excluding Japan. GAM North America Fund invests primarily in securities of
companies in the United States and Canada. GAMerica Capital Fund invests
primarily in securities of companies in the United States.
The Funds offer Class A and Class D shares; however, Class D shares currently
are available only for GAM International Fund, GAM Global Fund and GAM Pacific
Basin Fund. Class D shares may become available for other Funds in the future.
Class A shares are sold with a front-end sales charge of up to 5% and Class D
shares are sold with a front-end sales charge of up to 3.5%. The two classes of
shares have identical voting, dividend, liquidation and other rights, except
that each class bears its separate distribution and certain class expenses, and
has exclusive voting rights with respect to any matter on which a separate vote
of any class is required by federal or state law. The following is a summary of
significant accounting policies followed in the preparation of the Company's
financial statements.
Valuation of securities
Investment securities are stated at value based on the last sale price on the
exchange on which the securities are traded, or, lacking any sales, at the last
available bid price. Securities traded in the over-the-counter market are valued
at the last available bid price. Short term securities maturing in 60 days or
less are valued on an amortized cost basis which approximates market value.
Other securities for which market quotations are not readily available are
valued at fair value as determined by or under the direction of the Board of
Directors.
Foreign currency
Portfolio securities and other assets and liabilities denominated in foreign
currencies are translated into US dollar amounts at date of valuation. Purchases
and sales of portfolio securities and income items denominated in foreign
currencies are translated into US dollar amounts on the respective dates of such
transactions.
The Funds do not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, the difference between the amounts
of dividends, interest and foreign withholding taxes recorded on the Funds'
47
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
books, and the US dollar equivalent of the amounts actually received or paid.
Net unrealized foreign exchange gains and losses arise from changes in the value
of assets and liabilities other than investments in securities at fiscal period
end, resulting from changes in the exchange rate.
Foreign currency contracts
Each Fund may enter into forward foreign currency exchange contracts primarily
in order to hedge against foreign currency exchange rate risks on the non-US
dollar denominated investment securities. These contracts are valued daily and
the Funds' equity therein, representing unrealized gain or loss on the
contracts, is included in the Statement of Assets and Liabilities. Realized and
unrealized gains and losses are included in the Statement of Operations.
Futures contracts
Initial margin deposits made with respect to futures contracts traded on
domestic exchanges are maintained by the Funds' custodian in segregated asset
accounts. Initial margin deposits made upon entering into futures contracts
traded on foreign exchanges are recognized as assets due from the broker (the
Funds' agent in acquiring the futures positions). Subsequent changes in the
daily valuation of open contracts are recognized as unrealized gains or losses.
Variation margin payments are made or received on domestically traded futures as
appreciation or depreciation in the value of these contracts occurs. Realized
gains or losses are recorded when a contract is closed.
Federal income taxes
It is each Fund's policy to satisfy the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income to shareholders. Therefore, no provision for Federal income taxes
is required.
Distributions to shareholders
Distributions are recorded on the ex-dividend date. Income and capital gain
distributions are determined in accordance with income tax regulations which may
differ from generally accepted accounting principles. These differences, which
may result in distribution reclassifications, are primarily due to differing
treatments for futures transactions, foreign currency transactions, passive
foreign investment companies (PFIC), capital loss carryforwards and losses
deferred due to wash sales and excise tax regulations. Permanent book and tax
basis differences relating to shareholder distributions will result in
reclassifications to paid in capital and may affect the per share allocation
between net investment income and realized and unrealized gain/(loss).
Undistributed net investment income/(loss) and accumulated undistributed net
realized gain/(loss) on investments and foreign currency transactions may
include temporary book and tax basis differences which will reverse in a
subsequent period. Any taxable income or gain remaining at fiscal year end is
distributed in the following year.
Deferred organization expenses
Organization costs for GAM Japan Capital Fund, GAM Asian Capital Fund and
GAMerica Capital Fund have been deferred and are being amortized on a
straight-line basis over a five-year period from each Fund's commencement of
operations.
Use of estimates
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 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.
48
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
Other
Securities transactions are recorded on the trade date basis. Interest is
accrued on a daily basis and market discount is accreted on a straight-line
basis. Dividend income is recorded on the ex-dividend date, except that certain
dividends on foreign securities are recorded as soon as information is available
to the Fund.
NOTE 2. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The Investment Adviser, GAM International Management Limited, receives a fee
under its agreement with the Company equivalent to 1% per annum of each Fund's
average daily net assets, except for GAM North America Fund. With respect to GAM
North America Fund, GAM International Management Limited and Fayez Sarofim & Co.
serve as co-investment advisers to the Fund. Each co-adviser receives a fee
under its agreement equivalent to 0.50% per annum of the Fund's average daily
net assets. Each Investment Adviser has undertaken to reimburse the Fund, up to
the amount of its fee, for all expenses (excluding certain defined expenses) in
excess of the most restrictive limits applicable in any state in which shares
are qualified for sale. Currently, that expense limitation is 2.5% of the first
$30,000,000 of the Fund's average net assets, 2% of the next $70,000,000 and
1.5% of the remainder. The expense reimbursements for the six months ended 30th
June, 1996 are set forth in the Statement of Operations.
For the six months ended 30th June, 1996, fund expenses were reduced as follows
under an expense offset arrangement with the Fund's custodian. Custodian fees
and expenses reported in the Statement of Operations exclude these credits. The
Funds could have invested a portion of the assets utilized in connection with
the offset arrangements in an income-producing asset if they had not entered
into such an arrangement.
<TABLE>
<CAPTION>
GAM GAM GAM GAM GAM GAM GAM GAMerica
International Global Europe Pacific Basin Japan Capital North America Asian Capital Capital
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$82,638 $2,060 $7,513 $42,563 $18,064 $649 $2,723 $972
</TABLE>
GAM Services, Inc. acts as principal underwriter of the Fund. For the six months
ended 30th June, 1996, GAM Services, Inc. received front-end sales load charges
of $2,008,989 from the sale of the Funds' shares.
Effective 5th September, 1995, the Funds adopted a Class D Distribution Plan
pursuant to Rule 12b-1 under the Investment Company Act of 1940 which provides
for payments by the Funds to GAM Services at the annual rate of up to 0.50% of
each applicable Fund's average net assets attributable to Class D shares. There
is currently no Rule 12b-1 Plan in effect with respect to Class A shares.
NOTE 3. CAPITAL STOCK
The Company declared a 10-for-1 stock split to shareholders of record as of 19th
December, 1995. All per share data have been restated to reflect the stock
split.
At 30th June, 1996, GAM Funds, Inc. had 400,000,000 shares of common stock,
$0.001 par value authorized which were allocated to each Fund as follows:
150,000,000 and 50,000,000 shares respectively, were allocated to each of Class
A and Class D of GAM International Fund, 50,000,000 and 25,000,000 shares were
allocated to Class A and Class D of GAM Global, GAM Pacific Basin, GAM Europe
and GAM North America, 25,000,000 shares were allocated to each of Class A and
Class D of GAMerica Capital Funds, while 45,000,000 and 12,500,000 shares were
allocated to each of Class A and Class D of GAM Japan Capital and GAM Asian
Capital Funds. Changes in each Fund's capital stock are summarized as follows:
49
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GAM International
For the Periods
----------------------------------------------------------
01-Jan-96 to 30-June-96 01-Jan-95 to 31-Dec-95
Shares US$ Shares US$
---------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
CLASS A
Sold 24,303,063 499,692,773 3,534,378 442,230,411
Issued on reinvestment of dividends - -- 1,043,909 22,078,675
Issued on 10-for-1 split -- -- 21,450,499 --
Redeemed (8,712,312) (174,339,259) (739,009) (109,514,578)
---------- ----------- --------- -----------
Net increase 15,590,751 325,353,514 25,289,777 354,794,508
========== =========== ========= ===========
CLASS D*
Sold 1,109,420 22,694,659 112, 790 8,456,005
Issued on reinvestment of dividends - -- -- 16,239 342,978
Issued on 10-for-1 split -- -- 279,205 --
Redeemed (72,357) (1,439,880) (70) (5,492)
---------- ----------- --------- -----------
Net increase 1,037,063 21,254,779 408,164 8,793,491
========== =========== ========= ===========
</TABLE>
- -------------------
* Class D shares were offered for sale on 5th September, 1995.
<TABLE>
<CAPTION>
GAM Global
For the Periods
----------------------------------------------------------
01-Jan-96 to 30-June-96 01-Jan-95 to 31-Dec-95
Shares US$ Shares US$
---------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
CLASS A
Sold 599,911 7,879,173 176,192 14,991,450
Issued on reinvestment of dividends -- -- 107,361 1,440,975
Issued on 10-for-1 split -- -- 1,595,905 --
Redeemed (1,138,294) (14,902,819) (131,581) (14,398,980)
---------- ----------- --------- -----------
Net increase/(decrease) (538,383) 7,023,646 1,747,877 2,033,445
========== =========== ========= ===========
CLASS D*
Sold 45,170 578,253 2,161 297,998
Issued on reinvestment of dividends - -- -- 267 3,556
Issued on 10-for-1 split -- -- 19,452 --
Redeemed (5,715) (71,809) -- --
---------- ----------- --------- -----------
Net increase 39,455 506,444 21,880 301,554
========== =========== ========= ===========
</TABLE>
- --------------
* Class D shares were offered for sale on 5th September, 1995.
50
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GAM Europe
For the Periods
----------------------------------------------------------
01-Jan-96 to 30-June-96 01-Jan-95 to 31-Dec-95
Shares US$ Shares US$
---------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
CLASS A
Sold 849,046 9,489,917 233,600 21,831,710
Issued on reinvestment of dividends -- -- 11,967 118,597
Issued on 10-for-1 split -- -- 2,085,855 --
Redeemed (323,572) (3,496,943) (416,953) (33,742,092)
---------- ----------- --------- -----------
Net increase/(decrease) 525,474 5,992,974 1,914,469 (11,791,785)
========== =========== ========= ===========
</TABLE>
<TABLE>
<CAPTION>
GAM Pacific Basin
For the Periods
----------------------------------------------------------
01-Jan-96 to 30-June-96 01-Jan-95 to 31-Dec-95
Shares US$ Shares US$
---------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
CLASS A
Sold 2,062,583 36,528,622 498,192 40,004,218
Issued on reinvestment of dividends - -- -- 131,648 3,512,026
Issued on 10-for-1 split -- -- 2,569,309 --
Redeemed (770,613) (13,543,655) (296,598) (34,613,472)
---------- ----------- --------- -----------
Net increase 1,291,970 22,984,967 2,902,551 8,902,772
========== =========== ========= ===========
CLASS D*
Sold 37,849 659,927 8,706 1,524,125
Issued on reinvestment of dividends -- -- 4,120 69,503
Issued on 10-for-1 split -- -- 78,357 --
Redeemed (1,091) (19,306) -- --
---------- ----------- --------- -----------
Net increase 36,758 640,621 91,183 1,593,628
========== =========== ========= ===========
</TABLE>
- ---------------
* Class D shares were offered for sale on 5th September, 1995.
51
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GAM Japan Capital
For the Periods
----------------------------------------------------------
01-Jan-96 to 30-June-96 01-Jan-95 to 31-Dec-95
Shares US$ Shares US$
---------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
CLASS A
Sold 3,312,661 34,574,405 161,092 12,534,772
Issued on reinvestment of dividends - -- -- 262 24,645
Issued on 10-for-1 split -- -- 1,190,830 --
Redeemed (949,680) (9,839,326) (111,683) (8,499,755)
---------- ----------- --------- -----------
Net increase 2,362,981 24,735,079 1,240,501 4,059,662
========== =========== ========= ===========
</TABLE>
<TABLE>
<CAPTION>
GAM North America
For the Periods
----------------------------------------------------------
01-Jan-96 to 30-June-96 01-Jan-95 to 31-Dec-95
Shares US$ Shares US$
---------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
CLASS A
Sold 30,938 396,898 37,084 3,775,544
Issued on reinvestment of dividends -- -- 1,246 14,805
Issued on 10-for-1 split -- -- 463,269 --
Redeemed (134,616) (1,715,889) (20,808) (719,836)
---------- ----------- --------- -----------
Net increase/(decrease) (103,678) (1,318,991) 480,791 3,070,513
========== =========== ========= ===========
</TABLE>
52
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GAM Asian Capital
For the Periods
----------------------------------------------------------
01-Jan-96 to 30-June-96 12-May-95+ to 31-Dec-95
Shares US$ Shares US$
---------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
CLASS A
Sold 385,006 3,862,982 70,020 6,737,939
Issued on reinvestment of dividends -- -- 2,417 22,746
Issued on 10-for-1 split -- -- 529,049 --
Redeemed (127,505) (1,283,157) (17,861) (988,279)
---------- ----------- --------- -----------
Net increase 257,501 2,579,825 583,625 5,772,406
========== =========== ========= ===========
</TABLE>
<TABLE>
<CAPTION>
GAMerica Capital
For the Periods
----------------------------------------------------------
01-Jan-96 to 30-June-96 12-May-95+ to 31-Dec-95
Shares US$ Shares US$
---------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
CLASS A
Sold 15,186 186,011 32,077 3,216,219
Issued on reinvestment of dividends -- -- 2,464 24,562
Issued on 10-for-1 split -- -- 279,569 --
Redeemed (127,790) (1,343,073) (12,049) (212,310)
---------- ----------- --------- -----------
Net increase/(decrease) (112,604) (1,157,062) 302,061 3,028,471
========== =========== ========= ===========
</TABLE>
- ---------------
+ Commencement of operations.
53
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
NOTE 4. INVESTMENT TRANSACTIONS
The cost of purchases and proceeds of sales of investment securities for the six
month ended 30th June, 1996 excluding short-term securities, were as follows:
<TABLE>
<CAPTION>
GAM GAM GAM GAM GAM GAM GAM GAMerica
International Global Europe Pacific Basin Japan Capital North America Asian Capital Capital
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
In US$
Purchases $616,448,816 $15,135,916 $10,890,542 $32,182,592 $22,584,039 $ 21,350 $ 3,428,714 $ 242,500
Sales 246,045,983 20,367,664 7,286,066 4,257,222 2,541,519 1,588,717 1,891,791 942,316
</TABLE>
Realized gains and losses are reported on an identified cost basis. At 30th
June, 1996, the aggregate gross unrealized appreciation and depreciation of
securities, based on cost for federal income taxes purposes, were as follows:
<TABLE>
<CAPTION>
GAM GAM GAM GAM GAM GAM GAM GAMerica
International Global Europe Pacific Basin Japan Capital North America Asian Capital Capital
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
In US$
Appreciation $38,827,481 $ 1,837,911 $ 4,311,519 $ 7,619,911 $ 2,292,921 $ 1,336,760 $ 618,325 $ 527,845
Depreciation 35,943,502 508,358 454,032 2,353,943 456,727 6,608 422,881 96,262
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Net $ 2,883,979 $ 1,329,553 $ 3,857,487 $ 5,265,968 $ 1,836,194 $ 1,330,152 $ 195,444 $ 431,583
=========== =========== =========== =========== =========== =========== =========== ===========
</TABLE>
At 31st December, 1995, the Funds had tax basis net capital losses as follows.
These losses may be carried over to offset future capital gains through the
expiration dates shown:
<TABLE>
<CAPTION>
GAM GAM GAM GAM GAM GAM GAM GAMerica
International Global Europe Pacific Basin Japan Capital North America Asian Capital Capital
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
In US$ $6,095,355 $529,169 $1,067,507 -- $804,246 -- -- --
-
Carryforward 31st Dec, 31st Dec, 31st Dec, -- 31st Dec, -- -- --
Expiration date 2003 2003 1998-2000 -- 2003 -- -- --
</TABLE>
Foreign taxes withheld from dividends and interest for the six months ended 30th
June, 1996, were as follows:
<TABLE>
<CAPTION>
GAM GAM GAM GAM GAM GAM GAM GAMerica
International Global Europe Pacific Basin Japan Capital North America Asian Capital Capital
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
In US$
Dividends $1,585,968 $29,740 $43,579 $60,118 $13,347 -- $7,870 --
Interest 48,263 13,168 -- -- -- -- -- --
</TABLE>
54
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
NOTE 5. FINANCIAL INSTRUMENTS
During the period, several of the Funds had been a party of financial
instruments with off-balance sheet risks, including forward foreign currency
contracts and futures contracts, primarily in an attempt to minimize the risk to
the Fund, in respect of its portfolio transactions. These instruments involve
market and/or credit risk in excess of the amount recognized in the Statement of
Assets and Liabilities. Risks arise from the possible inability of
counterparties to meet the terms of their contracts and from movement in
currency and securities values and interest rates. The contract amount indicates
the extent of the Funds' involvement in such contracts.
Forwards: When entering a forward currency contract, the Fund agrees to receive
or deliver a fixed quantity of foreign currency for agreed upon price on an
agreed future date.
At 30th June, 1996 the Fund had outstanding forward contracts for the purchase
and sale of currencies as set out below. The contracts are reported in the
financial statements at the Fund's net equity, as measured by the difference
between the forward foreign exchange rates at the dates of entry into the
contracts and the forward rates at the reporting date, or the date an offsetting
position, if any, has been entered into.
<TABLE>
<CAPTION>
GAM INTERNATIONAL FUND US
US$
<S> <C>
$1,240,080,000 Japanese yen sold vs. 12,000,000 US$,
18th July, 1996 638,419
1,044,000,000 Japanese yen sold vs. 10,000,000 US$,
1st August, 1996 415,335
2,093,200,000 Japanese yen sold vs. 20,000,000 US$,
5th August, 1996 771,445
1,076,334,000 Japanese yen sold vs. 10,460,000 US$,
7th August, 1996 569,624
2,223,990,000 Japanese yen sold vs. 21,000,000 US$,
9th August, 1996 557,763
1,220,292,000 Spanish peseta sold vs. 14,119,972 German Deutsche marks,
25th July, 1996 (228,013)
310,770,000 French francs sold vs. 90,000,000 German Deutsche marks,
26th September, 1996 (1,180,191)
13,569,749 UK Pound sterling sold vs. 30,000,000 German Deutsche marks,
25th July, 1996 (1,330,097)
8,996,851 UK Pound sterling sold vs. 20,000,000 German Deutsche marks,
5th August, 1996 (799,513)
30,092,722 UK Pound sterling sold vs. 67,000,000 German Deutsche marks,
7th August, 1996 (2,599,548)
31,513,863 UK Pound sterling sold vs. 70,000,000 German Deutsche marks,
12th August, 1996 (2,814,178)
16,078,607 UK Pound sterling sold vs. 36,000,000 German Deutsche marks,
25th September, 1996 (1,180,876)
5,454,139 UK Pound sterling sold vs. 12,190,000 German Deutsche marks,
15th October, 1996 (405,037)
21,945,807 UK Pound sterling sold vs. 51,000,000 German Deutsche marks,
3rd December, 1996 (234,267)
</TABLE>
55
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
51,000,000 Swedish krona sold vs. 10,806,916 German Deutsche marks,
5th September, 1996 (567,220)
28,816,000 German Deutsche marks bought vs. 20,000,000 US$,
27th August, 1996 (987,043)
7,310,000 German Deutsche marks bought vs. 5,000,000 US$,
6th September, 1996 (173,885)
39,452,400 German Deutsche marks bought vs. 27,000,000 US$,
16th September, 1996 (937,928)
------------
Net equity in foreign currency exchange contracts ($10,485,210)
============
GAM GLOBAL FUND
72,338,000 Japanese yen sold vs. 699,459 US$,
18th July, 1996 16,502
20,880,000 Japanese yen sold vs. 204,145 US$,
1st August, 1996 (4,145)
51,795,000 Japanese yen sold vs. 500,463 US$,
9th August, 1996 4,319
850,396 UK Pound sterling sold vs. 1,900,000 German Deutsche marks,
7th August, 1996 (69,090)
1,648,470 UK Pound sterling sold vs. 3,820,000 German Deutsche marks,
3rd December, 1996 (24,827)
1,657,440 French francs sold vs. 480,000 German Deutsche marks,
26th September, 1996 (6,294)
1,500,000 Swedish krona sold vs. 317,850 German Deutsche marks,
5th September, 1996 (16,683)
1,008,560 German Deutsche marks bought vs. 700,000 US$,
27th August, 1996 (34,547)
---------
Net equity in foreign currency exchange contracts ($134,765)
=========
GAM EUROPE FUND
21,000,000 European currency units sold vs. 26,103,000 US$,
24th July, 1996 (85,929)
---------
Net equity in foreign currency exchange contracts ($85,929)
=========
</TABLE>
56
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GAM PACIFIC BASIN FUND
<S> <C>
1,925,460,000 Japanese yen sold vs. 18,000,000 US$,
19th July, 1996 356,413
--------
Net equity in foreign currency exchange contracts $356,413
========
GAM JAPAN CAPITAL FUND
208,600,000 Japanese yen sold vs. 2,000,000 US$,
5th July, 1996 92,414
77,400,000 Japanese yen sold vs. 750,000 US$,
10th July, 1996 41,689
30,675,000 Japanese yen sold vs. 300,000 US$,
12th July, 1996 19,202
71,750,000 Japanese yen sold vs. 700,000 US$,
17th July, 1996 42,724
626,480,000 Japanese yen sold vs. 6,000,000 US$,
19th July, 1996 259,369
312,660,000 Japanese yen sold vs. 3,000,000 US$,
1st August, 1996 129,558
569,950,000 Japanese yen sold vs. 5,500,000 US$,
2nd August, 1996 266,671
103,430,000 Japanese yen sold vs. 1,000,000 US$,
13th August, 1996 48,734
371,082,000 Japanese yen sold vs. 3,450,000 US$,
19th September, 1996 19,235
533,500,000 Japanese yen sold vs. 5,000,000 US$,
24th September, 1996 64,374
--------
Net equity in foreign currency exchange contracts $983,970
========
</TABLE>
Futures: A futures contract obligates one party to sell and the other party to
purchase a specific instrument for an agreed price on an agreed future date. At
30th June, 1996 GAM International Fund and GAM Global Fund had outstanding
futures contracts as set out in their respective Statement of Investments.
57
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
NOTE 6. SELECTED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
PER SHARE OPERATING PERFORMANCE (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
------------------------------------ ----------------------------------
NET REALIZED
NET ASSET AND UNREALIZED DIVIDENDS DISTRIBUTIONS
VALUE, NET GAIN/(LOSS) TOTAL FROM FROM NET FROM NET NET ASSET
BEGINNING INVESTMENT ON INVESTMENT INVESTMENT REALIZED TOTAL VALUE, END
OF PERIOD INCOME (LOSS) INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS OF PERIOD
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
01-JAN-96 TO 30-JUNE-96
(unauditied)
US$
GAM International
Class A US$ 21.37 0.37 (1.87) (1.50) -- -- -- US$ 19.87
Class D US$ 21.35 0.27 (1.84) (1.57) -- -- -- US$ 19.78
GAM Global
Class A US$ 13.51 0.14 (0.71) (0.57) -- -- -- US$ 12.94
Class D US$ 13.48 0.06 (0.77) (0.71) -- -- -- US$ 12.77
GAM Europe
Class A US$ 10.04 0.07 1.41 1.48 -- -- -- US$ 11.52
GAM Pacific Basin
Class A US$ 16.97 0.03 0.68 0.71 -- -- -- US$ 17.68
Class D US$ 16.96 0.02 0.63 0.65 -- -- -- US$ 17.61
GAM Japan Capital
Class A US$ 10.16 0.03 0.90 0.93 -- -- -- US$ 11.09
GAM North America
Class A US$ 11.93 (0.03) 1.39 1.36 -- -- -- US$ 13.29
GAM Asian Capital**
Class A US$ 9.53 (0.06) 0.59 0.53 -- -- -- US$ 10.06
GAMerica Capital**
Class A US$ 10.03 (0.28) 2.82 2.54 -- -- -- US$ 12.57
01-JAN-95 TO
31-DEC-95
US$
GAM International
Class A US$ 17.21 0.52 4.64 5.16 (0.47) (0.53) (1.00) US$ 21.37
Class D US$ 20.46 0.10 1.78 1.88 (0.46) (0.53) (0.99) US$ 21.35
GAM Global
Class A US$ 10.60 0.35 3.48 3.83 (0.30) (0.62) (0.92) US$ 13.51
Class D US$ 13.46 -- 0.92 0.92 (0.28) (0.62) (0.90) US$ 13.48
GAM Europe
Class A US$ 8.66 0.07 1.38 1.45 (0.06) (0.01) (0.07) US$ 10.04
GAM Pacific Basin
Class A US$ 17.62 -- 0.61 0.61 -- (1.26) (1.26) US$ 16.97
Class D US$ 17.36 (0.02) 0.26 0.24 -- (0.64) (0.64) US$ 16.96
GAM Japan Capital
Class A US$ 9.62 (0.07) 0.69 0.62 (0.05) (0.03) (0.08) US$ 10.16
GAM North America
Class A US$ 9.14 -- 2.83 2.83 -- (0.04) (0.04) US$ 11.93
GAM Asian Capital**
Class A US$ 10.00 (0.01) (0.42) (0.43) -- (0.04) (0.04) US$ 9.53
GAMerica Capital**
Class A US$ 10.00 0.07 0.07 0.14 (0.07) (0.04) (0.11) US$ 10.03
01-JAN-94 TO
31-DEC-94
US$
GAM International US$ 23.90 0.34 (2.58) (2.24) (0.66) (3.79) (4.45) US$ 17.21
GAM Global US$ 17.92 0.19 (2.94) (2.75) (0.49) (4.08) (4.57) US$ 10.60
GAM Europe US$ 8.93 -- (0.27) (0.27) -- -- -- US$ 8.66
GAM Pacific Basin US$ 19.20 (0.05) 1.36 1.31 -- (2.89) (2.89) US$ 17.62
GAM Japan Capital* US$ 10.00 0.02 (0.40) (0.38) -- -- -- US$ 9.62
GAM North America US$ 12.80 0.04 0.23 0.27 (0.23) (3.70) (3.93) US$ 9.14
</TABLE>
58
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PER SHARE OPERATING PERFORMANCE (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
------------------------------------ ----------------------------------
NET REALIZED
NET ASSET AND UNREALIZED DIVIDENDS DISTRIBUTIONS
VALUE, NET GAIN/(LOSS) TOTAL FROM FROM NET FROM NET NET ASSET
BEGINNING INVESTMENT ON INVESTMENT INVESTMENT REALIZED TOTAL VALUE, END
OF PERIOD INCOME (LOSS) INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS OF PERIOD
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
01-JAN-93 TO
31-DEC-93
US$
GAM International US$ 14.56 0.25 10.38 10.63 (0.34) (0.95) (1.29) US$ 23.90
GAM Global US$ 10.33 0.24 7.46 7.70 (0.11) -- (0.11) US$ 17.92
GAM Europe US$ 7.34 0.24 1.41 1.65 (0.06) -- (0.06) US$ 8.93
GAM Pacific Basin US$ 13.14 (0.03) 6.57 6.54 (0.04) (0.44) (0.48) US$ 19.20
GAM North America US$ 13.63 0.19 (0.46) (0.27) (0.07) (0.49) (0.56) US$ 12.80
01-JAN-92 TO
31-DEC-92
GAM International US$ 14.86 0.71 (0.28) 0.43 (0.43) (0.30) (0.73) US$ 14.56
GAM Global US$ 11.37 0.64 (1.15) (0.51) (0.28) (0.25) (0.53) US$ 10.33
GAM Europe US$ 8.33 0.40 (0.78) (0.38) (0.22) (0.39) (0.61) US$ 7.34
GAM Pacific Basin US$ 13.77 0.01 (0.06) (0.05) (0.09) (0.49) (0.58) US$ 13.14
GAM North America US$ 13.35 0.07 0.25 0.32 (0.03) (0.01) (0.04) US$ 13.63
01-JAN-91 TO
31-DEC-91
US$
GAM International US$ 12.87 0.36 1.64 2.00 (0.01) -- (0.01) US$ 14.86
GAM Global US$ 10.28 0.28 0.81 1.09 -- -- -- US$ 11.37
GAM Europe US$ 8.39 0.22 (0.28) (0.06) -- -- -- US$ 8.33
GAM Pacific Basin US$ 11.93 0.17 1.81 1.98 -- (0.14) (0.14) US$ 13.77
GAM North America US$ 10.21 0.06 3.08 3.14 -- -- US$ 13.35
</TABLE>
* Period from 1st July, 1994 (Inception) to 31st December, 1994.
** Period from 12th May, 1995 (Inception) to 31st December, 1995
59
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATIOS/SUPPLEMENTAL DATA
------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
----------------------------
TOTAL RETURN
(WITHOUT NET ASSETS NET PORTFOLIO AVERAGE
DEDUCTION OF END OF PERIOD INVESTMENT TURNOVER COMMISSION
SALES LOAD) 000 OMITTED) EXPENSES INCOME/(LOSS) RATE RATE PAID++++
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
01-JAN-96 TO30-JUN-96
US$
GAM International+++
Class A (7.02)% US$ 830,424 1.46%* 4.08%* 34.01% 0.0153
Class D (7.35)% US$ 28,586 2.12%* 3.64%* 34.01% 0.0153
GAM Global++
Class A (4.22)% US$ 18,091 2.25%* 1.81%* 74.15% 0.0234
Class D (5.27)% US$ 784 3.05%* 1.32%* 74.15% 0.0234
GAM Europe++
Class A 14.74% US$ 32,402 1.76%* 1.50%* 32.04% 0.0135
GAM Pacific Basin+++
Class A 4.18% US$ 79,024 1.53%* 0.36%* 6.78%
0.0263
Class D 3.83% US$ 2,253 2.19%* (0.30)%* 6.78% 0.0263
GAM Japan Capital+++
Class A 9.15% US$ 41,055 1.70%* (0.81)%* 11.32% 0.0763
GAM North America+++
Class A 11.40% US$ 5,287 2.61%* (0.42)%* 0.39% 0.0600
GAM Asian Capital+++
Class A 5.56% US$ 8,465 3.67%* (1.53)%* 32.03% 0.0136
GAMerica Capital**+++
Class A 35.30% US$ 2,381 5.80%* (4.32)%* 10.63% 0.0533
01-JAN-95 TO
31-DEC-95
US$
GAM International
Class A 30.09% US$ 560,234 1.57% 3.89% 34.97% --
Class D 9.26% US$ 8,714 2.22%* 1.90%* 34.97% --
GAM Global
Class A 36.25% US$ 26,161 2.16% 2.96% 60.18% --
Class D 6.97% US$ 295 2.81%* (0.09)%* 60.18% --
GAM Europe
Class A 16.77% US$ 22,961 2.12% 0.75% 145.16% --
GAM Pacific Basin
Class A 4.50% US$ 53,944 1.98% (0.07)% 64.01% --
Class D 2.35% US$ 1,547 2.63%* (1.49)%* 64.01% --
GAM Japan Capital**
Class A 6.45% US$ 13,600 3.61% (2.35)% 122.38% --
GAM North America**
Class A 30.90% US$ 5,981 2.98% 0.01% 8.57% --
GAM Asian Capital++**
Class A (4.25)% US$ 5,560 3.11%* (0.17)%* 17.01% --
GAMerica Capital++**
Class A 1.38% US$ 3,029 3.73%* 1.36%* 10.90% --
</TABLE>
60
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
-----------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
----------------------------
TOTAL RETURN
(WITHOUT NET ASSETS NET PORTFOLIO AVERAGE
DEDUCTION OF END OF PERIOD INVESTMENT TURNOVER COMMISSION
SALES LOAD) 000 OMITTED) EXPENSES INCOME/(LOSS) RATE RATE PAID++++
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
01-JAN-94 TO
31-DEC-94
US$
GAM International (10.23)% US$ 158,336 1.60% 2.74% 110.48% --
GAM Global (16.15)% US$ 19,940 2.29% 0.91% 123.33% --
GAM Europe (3.11)% US$ 32,233 2.35% 0.06% 74.96% --
GAM Pacific Basin 7.41% US$ 48,527 1.78% (0.35)% 29.11% --
GAM Japan Capital+ (3.77)% US$ 9,406 2.19%* 0.70%* 7.02% --
GAM North America** 2.97% US$ 1,887 2.54% 0.37% 3.00% --
01-JAN-93 TO
31-DEC-93
US$
GAM International 79.96% US$ 80,776 1.99% 2.28% 98.45% --
GAM Global 75.30% US$ 33,416 2.68% 1.88% 106.73% --
GAM Europe 22.68% US$ 14,398 2.64% 1.05% 181.51% --
GAM Pacific Basin 51.52% US$ 40,719 1.93% (0.29)% 91.07% --
GAM North America (2.09)% US$ 3,289 2.10% 0.69% 3.42% --
01-JAN-92 TO
31-DEC-92
US$
GAM International 3.08% US$ 41,032 2.03% 4.85% 109.16% --
GAM Global (4.65)% US$ 19,763 2.37% 5.25% 118.41% --
GAM Europe (4.91)% US$ 17,264 2.47% 5.06% 72.20% --
GAM Pacific Basin (0.37)% US$ 28,206 2.03% 0.09% 74.78% --
GAM North America 2.42% US$ 11,781 2.43% 0.47% 20.38% --
01-JAN-91 TO
31-DEC-91
US$
GAM International 15.56% US$ 40,355 2.11% 3.25% 160.67% --
GAM Global 10.61% US$ 23,990 2.33% 2.20% 180.52% --
GAM Europe (0.70)% US$ 13,558 2.76% 2.17% 232.55% --
GAM Pacific Basin 16.71% US$ 35,849 2.29% 0.78% 78.80% --
GAM North America 30.69% US$ 12,290 2.96% 0.45% 3.44% --
</TABLE>
+ Period from 1st July, 1994 (Inception) to 31st December, 1994.
++ Period from 12th May, 1995 (Inception) to 31st December, 1995.
* Annualized.
** In the absence of expense reimbursement, expenses on an annualized basis
would have represented 6.80% for GAMerica Capital of average net assets for
the six months ended 30th June, 1996. Expenses on an annualized basis would
have represented 4.61% for GAM Japan Capital, 3.27% for GAM North America,
3.95% for GAM Asian Capital and4.73% for GAMerica Capital of average net
assets, respectively, for the period ended 31st December, 1995 and 5.81% of
average net assets for GAM North America Fund for the year ended 31st
December, 1994.
+++ The ratios of expenses to average net assets for the six months ended 30th
June, 1996 include amounts paid through expense offset arrangements. Prior
period ratios excludedthese amounts (see Note 2).
++++ For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for trades on
which a commission is charged.
61
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BANK LOANS
-----------------------------------------------------------------------------
AVERAGE
AVERAGE AMOUNT NUMBER OF SHARES AVERAGE
AMOUNTS OF BANK LOANS OUSTANDING AMOUNT OF
OUTSTANDING OUTSTANDING DURING THE PERIOD DEBT PER SHARE
END OF PERIOD DURING THE PERIOD (MONTHLY AVERAGE) DURING
(000 OMITTED) (000 OMITTED) (000 OMITTED) THE PERIOD
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
01-JAN-96 TO 30-JUN-96
US$
GAM International
Class A
Class D
GAM Global
Class A
Class D
GAM Europe
Class A
GAM Pacific Basin
Class A
Class D
GAM Japan Capital
Class A
GAM North America
Class A
GAM Asian Capital
Class A
GAMerica Capital
Class A
01-JAN-95 TO
31-DEC-95
US$ GAM International
Class A
Class D
GAM Global
Class A
Class D
GAM Europe
Class A -- US$123 390 US$ 0.32
GAM Pacific Basin
Class A
Class D
GAM Japan Capital
Class A
GAM North America
Class A
GAM Asian Capital++
Class A
GAMerica Capital++
Class A
</TABLE>
62
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BANK LOANS
-----------------------------------------------------------------------------
AVERAGE
AVERAGE AMOUNT NUMBER OF SHARES AVERAGE
AMOUNTS OF BANK LOANS OUSTANDING AMOUNT OF
OUTSTANDING OUTSTANDING DURING THE PERIOD DEBT PER SHARE
END OF PERIOD DURING THE PERIOD (MONTHLY AVERAGE) DURING
(000 OMITTED) (000 OMITTED) (000 OMITTED) THE PERIOD
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
01-JAN-94 TO31-DEC-94
US$
GAM International
GAM Global
GAM Europe
GAM Pacific Basin
GAM Japan Capital+
GAM North America
01-JAN-93 TO
31-DEC-93
US$
GAM International US$ 9,557 US$ 2,042 2,700 US$ 0.76
GAM Global US$ 2,165 US$ 2,600 1,780 US$ 1.48
GAM Europe US$ 1,860 US$ 521 1,680 US$ 0.31
GAM Pacific Basin US$ -- US$ -- US$ --
GAM North America US$ -- US$ -- -- US$ --
01-JAN-92 TO
31-DEC-92
US$
GAM International US$ 2,743 US$ 901 2,790 US$ 0.32
GAM Global US$ 9,010 US$ 1,401 2,130 US$ 0.66
GAM Europe US$ 1,177 US$ 347 2,400 US$ 0.14
GAM Pacific Basin US$ -- US$ -- -- US$ --
GAM North America US$ -- US$ -- -- US$ --
01-JAN-91 TO
31-DEC-91
US$
GAM International
GAM Global
GAM Europe
GAM Pacific Basin
GAM North America
</TABLE>
+ Period from 1st July, 1994 (Inception) to 31st December, 1994.
++ Period from 12th May, 1995 (Inception) to 31st December, 1995.
* Annualized.
** In the absence of expense reimbursement, expenses on an annualized basis
would have represented 6.80% for GAMerica Capital of average net assets for
the six months ended 30th June, 1996. Expenses on an annualized basis would
have represented 4.61% for GAM Japan Capital, 3.27% for GAM North America,
3.95% for GAM Asian Capita and 4.73% for GAMerica Capital of average net
assets, respectively, for the period ended 31st December, 1995 and 5.81% of
average net assets for GAM North America Fund for the year ended 31st
December, 1994.
+++ The ratios of expenses to average net assets for the six months ended 30th
June, 1996 include amounts paid through expense offset arrangements. Prior
period ratios excluded these amounts (see Note 2).
++++ For fiscal years beginning on or after 1st September 1995, a fund is
required to disclose its average commission rate per share for trades on
which a commission is charged.
63
<PAGE>
This Page Left Intentionally Blank
