- --------------------------------------------------------------------------------
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$8.3 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, GAMerica Capital, GAM North America, GAM Pacific
Basin, GAM Japan Capital, GAM Asian Capital and GAM Europe 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............................................................ 7
GAM Europe............................................................ 12
GAM Pacific Basin..................................................... 16
GAM Japan Capital..................................................... 21
GAM Asian Capital..................................................... 25
GAM North America..................................................... 29
GAMerica Capital...................................................... 33
Portfolio Analysis.................................................... 36
Financial Statements.................................................. 38
Notes to Financial Statements......................................... 45
Independent Auditor's Report.......................................... 58
<PAGE>
- --------------------------------------------------------------------------------
GAM INTERNATIONAL FUND
- --------------------------------------------------------------------------------
FUND MANAGEMENT
- --------------------------------------------------------------------------------
- ----------------
| | JOHN R. HORSEMAN JOINED GAM IN 1987, INITIALLY AS A MEMBER
| | OF THE FIRM'S ASIAN TEAM BASED IN HONG KONG. IN 1990 HE
| | MOVED TO GAM'S LONDON OFFICE TO ASSUME RESPONSIBILITY FOR A
| [PHOTO] | NUMBER OF GAM'S 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 AMERICA 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 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
GAM
INTERNATIONAL AVERAGE
GAM CLASS A MSCI 1 MONTH
INTERNATIONAL (AFTER EAFE DEPOSIT
CLASS A SALES INDEX RATE
LOAD)
31ST DEC, 95 US$21.37 1,135.63
- --------------------------------------------------------------------------------
% % % %
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN:-
- --------------------------------------------------------------------------------
1 YEAR TO DEC, 1995 +30.09 +23.58 +11.55 + 6.01
- --------------------------------------------------------------------------------
5 YEARS TO DEC, 1995 +20.14 +18.91 + 9.72 + 4.68
- --------------------------------------------------------------------------------
10 YEARS TO DEC, 1995 +19.02 +18.41 +14.09 + 6.35
- --------------------------------------------------------------------------------
SINCE INCEPTION +22.22 +21.65 +17.53 + 6.54
- --------------------------------------------------------------------------------
Performances are calculated on a total return basis. During the quarter,
dividends were paid for Class A of US$1.00 and for Class D of US$0.99. Class A
inception was on 2nd January, 1985 and Class D on 18th 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 investor's shares, when redeemed, may be worth more or less
than their original cost.
-2-
<PAGE>
- --------------------------------------------------------------------------------
GAM INTERNATIONAL FUND -- REPORT TO SHAREHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
[CHART]
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 past performance of the index
is no indication of the future performance of either the index or the Fund.
- ---------------------
Sources used are the net asset value of the Fund computed daily and Datastream.
The MSCI European 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/Malayfden, Switzerland
and the United Kingdom. The combined market capitalization 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
- --------------------------------------------------------------------------------
GAM
INTERNATIONAL AVERAGE
GAM CLASS D MSCI 1 MONTH
INTERNATIONAL (AFTER EAFE DEPOSIT
CLASS D SALES LOAD) INDEX RATE
31ST DEC, 95 US$21.35 1,135.63
--------------------------------------------------
% % % %
--------------------------------------------------
INCEPTION TO DEC, 1995 + 9.26 + 5.44 + 6.77 + 1.63
--------------------------------------------------
[CHART]
-3-
<PAGE>
- --------------------------------------------------------------------------------
GAM INTERNATIONAL FUND -- REPORT TO SHAREHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
[The following represents a Bar Chart in the printed report.]
AVERAGE ANNUAL TOTAL RETURN -- CLASS A
GAM
GAM INTERNATIONAL
INTERNATIONAL CLASS A MSCI
CLASS A (AFTER SALES LOAD) EAFE INDEX
% % %
- -----------------------------------------------------------
One Year 30.09 23.58 11.55
Five Years 20.14 18.91 9.71
Ten Years 19.02 18.41 14.09
Since Inception 22.22 21.65 17.53
ANNUAL PERFORMANCE - CLASS A
[The Following represents a Bar Chart in the printed report.]
GAM
GAM INTERNATIONAL
INTERNATIONAL CLASS A MSCI
CLASS A (AFTER SALES LOAD) EAFE INDEX
YEAR % % %
- -----------------------------------------------------------
1991 15.56 9.78 12.53
1992 3.08 (2.07) (11.85)
1993 79.96 70.96 32.94
1994 (10.23) (14.71) 8.06
1995 30.09 23.58 11.55
THE COMMENT
During 1995 GAM International has appreciated by 30.09%, which compares
with a gain in the MSCI EAFE Index of 11.55% and a 1-month annualized return on
US$ deposits of 6.01%. It is important to highlight that 1995 has been a good
year for bond markets in general and your Fund has participated in that move to
some extent with its holdings in European bonds.
Other investments in the equity markets have also fared well, particularly
amongst the recently privatised companies in Europe where your Fund is invested.
During the summer months we also built up a position in electrical stocks in
Japan and at the same time, in anticipation of a possibly weaker yen, hedged the
Japanese currency back into the US dollar. We are optimistic that this position
will prove rewarding for investors during 1996.
At the time of writing our own studies of the European economies suggest
that growth rates are slowing, even if they remain positive overall. This fact,
coupled with our own expectation of low inflation, provides an attractive
background for our optimistic outlook for investment in Europe in 1996.
Our exposure to the emerging markets of Asia, South America and Eastern
Europe has been minimal and we currently have little intention of increasing it.
In general it has been difficult to find attractive opportunities in these
areas. Otherwise though, prospects for 1996 appear bright and the Manager is
optimistic.
- --------------------------------------------------------------------------------
On 14th December, 1995, the Board of Directors of the Fund approved a 10 for 1
stock split which was effected in the form of a stock dividend of 9 shares. In
addition, in connection with the dividend, as of 19th December, 1995 the net
asset value of the Fund was reduced to one-tenth of its net asset value
immediately prior to the stock dividend.
-4-
<PAGE>
GAM INTERNATIONAL FUND -- STATEMENT OF INVESTMENTS
AS AT 31ST DECEMBER, 1995
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ FUND
- --------------------------------------------------------------------------
ADJUSTABLE RATE INDEX NOTES
UNITED KINGDOM
+ DLJ ARIN, Indexed to 320,000 shares,
British Biotech 1996-12-16 2,103,050 0.37
+ DLJ ARIN, Indexed to 1,100,000 shares,
General Cable 1996-06-10 799,485 0.14
+ DLJ ARIN, Indexed to 360,000 shares,
Tadpole Technology 1996-05-16 560,021 0.10
+ DLJ ARIN, Indexed to 540,000 shares,
Tadpole Technology 1996-05-11 1,626,341 0.29
+ DLJ ARIN, Indexed to 1,200,000 shares,
TeleWest Communications
1996-09-16 1,376,970 0.24
--------- ----
TOTAL ADJUSTABLE RATE INDEX NOTES
(Cost $6,582,708) 6,465,867 1.14
--------- ----
BOND WARRANTS
GERMANY
*2,181,500 Bundes Deutschland 6.25% Wts
May 1996 10,693,404 1.88
*26,458 DAX Index Wts June 1996 586,664 0.10
----------- -----
TOTAL BOND WARRANTS (Cost $6,469,761) 11,280,068 1.98
----------- -----
BONDS
FRANCE
140,452,000 OAT 6% 2025-10-25 23,797,296 4.18
----------- -----
23,797,296 4.18
----------- -----
GERMANY
37,515,000 Austria 6.5% 2024-01-10 24,724,874 4.34
149,750,000 Bundes Deutschland 6.25%
2024-01-04 97,316,877 17.11
++27,352,000 LKB Baden Wurttenburg 6.5%
2008-09-15 18,976,564 3.33
++18,560,000 Oster. Kontrollbank 7%
2005-08-08 13,596,949 2.39
----------- -----
154,615,264 27.17
----------- -----
NETHERLANDS
36,000,000 Nederland 7.5% 2023-01-15 24,636,012 4.33
----------- -----
24,636,012 4.33
----------- -----
SWITZERLAND
++24,618,000 E.I.B. 7.75% 2005-01-26 18,943,063 3.33
26,247,000 Switzerland 4.25% 2014-01-06 22,232,619 3.91
----------- -----
41,175,682 7.24
----------- -----
UNITED KINGDOM
7,900,000 War Loan 3.5% 2049-12-29 5,568,713 0.98
----------- -----
5,568,713 0.98
----------- -----
UNITED STATES
++22,615,000 EXIM Bank of Japan 7.75%
2005-02-21 17,266,970 3.04
----------- -----
17,266,970 3.04
----------- -----
TOTAL BONDS (COST $248,539,803) 267,059,937 46.94
----------- -----
CONVERTIBLES
FRANCE
16,435 Lyonnaise-Dumez 6.5% CV 2000 3,084,713 0.54
----------- -----
3,084,713 0.54
----------- -----
UNITED KINGDOM
2,050,000 Inchcape 6.25% CV 2008-05-10 2,468,122 0.43
3,000,000 NFC 7.75% CV Bearer
2007-08-22 4,276,007 0.75
1,766,000 Northern Foods 6.75% CV
2008-08-08 2,345,675 0.41
2,055,000 Thames Water 9.5% CV
2006-09-19 4,229,985 0.74
----------- -----
13,319,789 2.33
----------- -----
TOTAL CONVERTIBLES (COST $15,941,339) 16,404,502 2.87
----------- -----
EQUITIES
CHINA
25,190,000 Shanghai Petrochemical H 7,248,335 1.27
----------- -----
7,248,335 1.27
----------- -----
FRANCE
40,000 Credit Local de France 3,205,888 0.56
160,000 SEITA 5,806,584 1.02
54,000 Union des Assurances Fedrales 6,458,802 1.14
----------- -----
15,471,274 2.72
----------- -----
HONG KONG
1,140,000 Hong Kong & China Gas 1,835,500 0.32
----------- -----
1,835,500 0.32
----------- -----
JAPAN
323,000 Dai Nippon Printing 5,474,576 0.96
550,000 Fujitsu 6,125,907 1.08
120,000 Hoya Corporation 4,125,908 0.73
50,000 IO Data Device 3,462,470 0.61
200,000 Kirin Beverage 2,692,494 0.47
160,000 Murata Manufacturing 5,888,620 1.04
558,000 NEC Corp. 6,809,492 1.20
109,000 Nichiei (8577) 8,128,813 1.43
90,000 Rohm 5,081,840 0.89
400,000 Sharp 6,392,252 1.12
950,000 Toshiba Corp. 7,443,584 1.31
----------- -----
61,625,956 10.84
----------- -----
-5-
<PAGE>
- --------------------------------------------------------------------------------
GAM INTERNATIONAL FUND -- STATEMENT OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ FUND
- --------------------------------------------------------------------------
NETHERLANDS
190,077 Fortis AMEV 12,730,498 2.24
106,000 Heijmans Group 6,108,787 1.07
79,015 KPN 2,870,024 0.50
----------- -----
21,709,309 3.81
----------- -----
NEW ZEALAND
*15,472,443 Affco 3,459,455 0.61
----------- -----
3,459,455 0.61
----------- -----
SINGAPORE
380,000 Development Bank of Singapore (FR) 4,728,172 0.83
330,000 Singapore Bus Service (FR) 2,356,310 0.41
366,000 Singapore Press Holdings (FR) 6,468,717 1.14
----------- -----
13,553,199 2.38
----------- -----
SPAIN
27,600 Banco Popular Registered 5,081,231 0.89
----------- -----
5,081,231 0.89
----------- -----
SWITZERLAND
21,520 Sandoz Registered 19,692,478 3.46
----------- -----
19,692,478 3.46
----------- -----
UNITED KINGDOM
1,000,000 Barclays 11,464,826 2.03
951,100 Games Workshop 4,388,274 0.77
1,579,136 Lloyds TSB Group 8,132,315 1.43
507,841 North West Water 4,859,813 0.85
145,015 North West Water (Restricted) 1,387,729 0.24
275,309 Provident Financial 3,500,662 0.62
827,000 RJB Mining 7,014,702 1.23
400,000 Thames Water 3,489,160 0.61
6,434,000 Utility Cable 1,999,043 0.35
840,000 Welsh Water 10,106,756 1.78
----------- -----
56,343,280 9.91
----------- -----
TOTAL EQUITIES (COST $188,631,521) 206,020,017 36.21
----------- -----
OPTIONS
FRANCE
*4,313,950 OAT 6% 2025-10-25
Calls September 1996 4,410,090 0.78
----------- -----
4,410,090 0.78
----------- -----
UNITED STATES
*955,000 Nederland 7.5% 2023-01-15
Calls July 1996 5,277,574 0.93
----------- -----
5,277,574 0.93
----------- -----
TOTAL OPTIONS (COST $4,462,965) 9,687,664 1.71
----------- -----
PREFERRED SHARES
NETHERLANDS
205,444 ABN-AMRO Hldg 6% CV Pfd 8,806,215 1.55
----------- -----
TOTAL PREFERRED SHARES (COST $7,820,883) 8,806,215 1.55
----------- -----
SHORT-TERM INVESTMENTS
15,000,000 Toronto-Dominion 5.87% Time
Deposit 1996-01-02 15,000,000 2.64
14,500,000 Wachovia Time Deposit 5.84%
1996-01-02 14,500,000 2.55
----------- -----
TOTAL SHORT-TERM INVESTMENTS
(Cost $29,500,000) 29,500,000 5.19
----------- -----
TOTAL INVESTMENTS (COST $507,948,980**) 555,224,270 97.59
----------- -----
FUTURES
JAPAN
US$
23,397,075 Nikkei-225 Index (CME) Futures
1996-03-31 (1,377,025) (0.24)
----------- -----
TOTAL FUTURES (1,377,025) (0.24)
----------- -----
MARGIN ON DEPOSIT AS COLLATERAL 2,480,988 0.43
----------- -----
DUE FROM BROKERS FOR FUTURES CONTRACTS 1,103,963 0.19
----------- -----
NET CURRENT ASSETS 12,619,812 2.22
----------- -----
TOTAL NET ASSETS 568,948,045 100.00
=========== ======
[The following table represents a Pie Chart in the printed report.]
GEOGRAPHIC ANALYSIS
AS AT 31ST DECEMBER, 1995
GERMANY ..................... 29.15%
UNITED KINGDOM .............. 14.36
JAPAN ....................... 10.60
SWITZERLAND ................. 10.70
NETHERLANDS ................. 9.69
FRANCE ...................... 8.22
SHORT-TERM INVESTMENTS ...... 5.19
UNITED STATES ............... 3.97
SINGAPORE ................... 2.38
OTHER AREAS ................. 3.09
NET CURRENT ASSETS .......... 2.65
* Non-income producing security.
** Cost for federal income tax purposes is $508,915,054.
+ 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.
-6-
<PAGE>
- --------------------------------------------------------------------------------
GAM GLOBAL FUND
- --------------------------------------------------------------------------------
Fund Management
- --------------------------------------------------------------------------------
- ---------------
| | JOHN R. HORSEMAN JOINED GAM IN 1987, INITIALLY AS A MEMBER
| | OF THE FIRM'S ASIAN TEAM BASED IN HONG KONG. IN 1990 HE
| [PHOTO] | MOVED TO GAM'S LONDON OFFICE TO ASSUME RESPONSIBILITY FOR A
| | NUMBER OF GAM'S 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 AMERICA'S 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
31ST DEC, 95 US$13.51 734.28
- --------------------------------------------------------------------------------
% % % %
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN:-
- --------------------------------------------------------------------------------
1 YEAR TO DEC, 1995 +36.25 +29.44 +21.32 + 6.01
- --------------------------------------------------------------------------------
5 YEARS TO DEC, 1995 +16.13 +14.95 + 12.34 + 4.68
- --------------------------------------------------------------------------------
SINCE INCEPTION +12.03 +11.43 +11.72 + 6.29
- --------------------------------------------------------------------------------
Performances are calculated on a total return basis. During the quarter,
dividends were paid for Class A of US$0.92 and for Class D of US$0.90. Class A
inception was on 28th May, 1986 and Class D 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
investor's shares, when redeemed, may be worth more or less than their original
cost.
-7-
<PAGE>
- --------------------------------------------------------------------------------
GAM GLOBAL FUND -- REPORT TO SHAREHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
[CHART]
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 past performance of the index
is no indication of the future performance of either the index or the Fund.
The average annual total return of GAM Global Class A after deduction of
maximum sales charge of 5% was 29.44% for 1 year, 14.95% for 5 years and 11.43%
since inception for the period ending 31st December 1995.
- ---------------------
Sources used are the net asset value of the Fund computed daily and Datastream.
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 capitalization 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.
THE FACTS -- CLASS D SHARES
GAM GLOBAL AVERAGE
GAM CLASS D MSCI 1 MONTH
GLOBAL (AFTER WORLD DEPOSIT
CLASS D SALES LOAD) INDEX RATE
31ST DEC, 95 US$13.48 734.28
- --------------------------------------------------------------------------------
% % % %
- --------------------------------------------------------------------------------
INCEPTION TO DEC, 1995 + 6.97 + 3.23 + 5.24 + 1.34
- --------------------------------------------------------------------------------
[CHART]
-8-
<PAGE>
- --------------------------------------------------------------------------------
GAM GLOBAL FUND -- REPORT TO SHAREHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
[The following table represents a Bar Chart in the printed report.]
Average Annual Total Return -- Class A
ONE YEAR THREE YEARS FIVE YEARS SINCE INCEPTION
-------- ----------- ---------- ---------------
GAM GLOBAL 36.25% 26.05% 16.13% 12.03%
GAM GLOBAL after sales load 29.44 23.91 14.95 11.43
MSCI WORLD INDEX 21.32 16.40 12.34 11.72
ANNUAL PERFORMANCE--CLASS A
[CHART]
GAM GLOBAL
GAM CLASS A MSCI
GLOBAL (AFTER WORLD
CLASS A SALES LOAD) INDEX
YEAR % % %
- --------------------------------------------------------------------------------
1991 10.61 5.08 19.01
1992 (4.65) (9.42) (4.66)
1993 75.30 66.53 23.13
1994 (16.15) (20.35) 5.58
1995 36.25 29.44 21.32
THE COMMENT
During 1995 GAM Global has appreciated by 36.25%, which compares with a
gain in the MSCI World Index of 21.32% and a 1-month annualized return on US$
deposits of 6.01%. It is important to highlight that 1995 has been a good year
for bond markets in general and your Fund has participated in that move to some
extent with its holdings in European bonds.
Other investments in the equity markets have also fared well, particularly
in the United States where holdings in technology and banking stocks performed
well. In Europe, your Fund's holdings in companies which have been recently
privatised also found favour. During the summer months we also built up a
position in electrical stocks in Japan and at the same time, in anticipation of
a possibly weaker yen, hedged the Japanese currency back into the US dollar. We
are optimistic that this position will prove rewarding for investors during
1996.
At the time of writing our own studies of the European economies suggest
that growth rates are slowing, even if they remain positive overall. This fact,
coupled with our own expectation of low inflation, provides an attractive
background for our optimistic outlook for investment in Europe in 1996.
Our exposure to the emerging markets of Asia, South America and Eastern
Europe has been minimal and we currently have little intention of increasing it.
In general it has been difficult to find attractive opportunities in these
areas. Otherwise though, prospects for 1996 appear bright and the Manager is
optimistic.
- --------------------------------------------------------------------------------
On 14th December, 1995, the Board of Directors of the Fund approved a 10 for 1
stock split which was effected in the form of a stock dividend of 9 shares. In
addition, in connection with the dividend, as of 19th December, 1995 the net
asset value of the Fund was reduced to one-tenth of its net asset value
immediately prior to the stock dividend.
-9-
<PAGE>
- --------------------------------------------------------------------------------
GAM GLOBAL FUND -- STATEMENT OF INVESTMENTS
- --------------------------------------------------------------------------------
AS AT 31ST DECEMBER, 1995
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ FUND
- --------------------------------------------------------------------------
ADJUSTABLE RATE INDEX NOTES
UNITED KINGDOM
+ DLJ ARIN, Indexed to 110,000 shares,
General Cable 1996-06-10 79,942 0.30
+ DLJ ARIN, Indexed to 115,000 shares,
Telewest Communications
1996-03-25 193,212 0.73
----------- -----
273,154 1.03
----------- -----
TOTAL ADJUSTABLE RATE INDEX NOTES
(COST $242,354) 273,154 1.03
----------- -----
BONDS
GERMANY
1,300,000 Austria 6.50% 2024-01-10 856,786 3.25
5,041,000 Bundes Deutschland 6.25%
2024-01-04 3,275,956 12.38
1,100,000 LKB Baden Wurttenburg
6.5% 2008-09-15 763,170 2.89
----------- -----
4,895,912 18.52
----------- -----
NETHERLANDS
2,241,000 Nederland 7.5% 2023-01-15 1,533,592 5.80
----------- -----
1,533,592 5.80
----------- -----
SWITZERLAND
1,270,000 Switzerland 4.25% 2014-01-06 1,075,758 4.07
----------- -----
1,075,758 4.07
----------- -----
TOTAL BONDS (COST $6,507,909) 7,505,262 28.39
----------- -----
BOND WARRANTS
GERMANY
*139,100 Bundes Deutschland 6.25%
Wts May 1996 681,848 2.58
*1,899 DAX Index Wts June 1996 42,107 0.16
----------- -----
723,955 2.74
----------- -----
TOTAL BOND WARRANTS (COST $380,249) 723,955 2.74
----------- -----
CONVERTIBLES
UNITED KINGDOM
175,000 Thames Water 9.5% CV
2006-09-19 360,218 1.36
----------- -----
360,218 1.36
----------- -----
TOTAL CONVERTIBLES (COST $326,329) 360,218 1.36
----------- -----
EQUITIES
FRANCE
13,000 SEITA 471,785 1.78
2,900 Union des Assurances Federales 346,862 1.31
----------- -----
818,647 3.09
----------- -----
HONG KONG
156,000 Hong Kong & China Gas 251,174 0.95
810,000 Shanghai Petrochemical H 233,075 0.88
----------- -----
484,249 1.83
----------- -----
JAPAN
21,000 Dai Nippon Printing 355,932 1.35
25,000 Fujitsu 278,450 1.05
16,000 Kirin Beverage 215,400 0.81
8,000 Murata Manufacturing 294,431 1.11
38,000 NEC Corp. 463,729 1.75
6,000 Rohm 338,789 1.28
22,000 Sharp 351,574 1.33
65,000 Toshiba Corp. 509,298 1.93
----------- -----
2,807,603 10.61
----------- -----
NETHERLANDS
15,921 Fortis AMEV 1,066,317 4.03
6,000 Heijmans Group 345,780 1.31
9,140 KPN NV 331,988 1.25
----------- -----
1,744,085 6.59
----------- -----
SINGAPORE
25,000 Development Bank of
Singapore (FR) 311,064 1.18
34,800 Singapore Press Holdings (FR) 615,058 2.32
----------- -----
926,122 3.50
----------- -----
SWITZERLAND
930 Sandoz Registered 851,023 3.22
----------- -----
851,023 3.22
----------- -----
-10-
<PAGE>
- --------------------------------------------------------------------------------
GAM GLOBAL FUND -- STATEMENT OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ FUND
- --------------------------------------------------------------------------
UNITED KINGDOM
35,000 Barclays 401,269 1.52
64,400 Games Workshop 297,135 1.12
80,308 Lloyds TSB Group 413,574 1.56
21,115 Provident Financial 268,486 1.01
491,300 Utility Cable 152,647 0.58
----------- -----
1,533,111 5.79
----------- -----
UNITED STATES
4,700 Bristol-Myers Squibb 403,612 1.53
9,450 Butler Manufacturing 370,912 1.40
*13,600 Champion Enterprises 419,900 1.59
5,200 Chase Manhattan Bank 315,250 1.19
5,000 Citicorp 336,250 1.27
5,000 First Union 278,125 1.05
5,000 Intel Corp. 283,750 1.07
4,700 Johnson & Johnson 402,437 1.52
*10,000 Kroger 375,000 1.42
5,000 Lockheed Martin 395,000 1.49
*8,400 LSI Logic 275,100 1.04
6,000 MBNA Corp. 221,250 0.84
8,000 McDonald's Corp. 361,000 1.37
5,400 Medtronic 301,725 1.14
6,600 Merrill Lynch 336,600 1.27
6,600 Micron Technology 261,525 0.99
3,500 Motorola 199,500 0.75
5,200 NationsBank Corp. 362,050 1.37
4,600 Philip Morris 416,300 1.57
----------- -----
6,315,286 23.87
----------- -----
TOTAL EQUITIES (COST $13,775,218) 15,480,126 58.50
----------- -----
OPTIONS
FRANCE
*166,364 OAT 6% 2025-10-25
Calls September 1996 170,072 0.64
----------- -----
170,072 0.64
----------- -----
NETHERLANDS
*68,000 Nederland 7.5% 2023-01-15
Calls July 1996 375,785 1.42
----------- -----
375,785 1.42
----------- -----
TOTAL OPTIONS (COST $219,344) 545,857 2.06
----------- -----
PREFERRED SHARES
NETHERLANDS
12,732 ABN-AMRO Hldg 6% CV Pfd 545,748 2.06
----------- -----
TOTAL PREFERRED SHARES (COST $462,337) 545,748 2.06
----------- -----
TOTAL INVESTMENTS (COST $21,913,740**) 25,434,320 96.14
----------- -----
FUTURES
JAPAN
US$
(1,326,150) Nikkei Index Futures
March 1996 (78,050) (0.30)
----------- -----
(78,050) (0.30)
----------- -----
TOTAL FUTURES (78,050) (0.30)
----------- -----
MARGIN ON DEPOSIT AS COLLATERAL 142,799 0.54
----------- -----
DUE FROM BROKERS 64,979 0.24
----------- -----
NET CURRENT ASSETS 956,683 3.62
----------- -----
TOTAL NET ASSETS 26,455,752 100.00
=========== =====
[The following table represents a Pie Chart in the printed report.]
GEOGRAPHIC ANALYSIS AS AT 31ST DECEMBER, 1995
UNITED STATES .....................23.87%
UNITED KINGDOM .................... 8.18%
GERMANY ...........................21.26%
NETHERLANDS .......................15.87%
SWITZERLAND ....................... 7.29%
SINGAPORE ......................... 3.50%
FRANCE ............................ 3.73%
JAPAN .............................10.31%
OTHER AREAS ....................... 1.83%
NET CURRENT ASSETS ................ 4.16%
* Non-income producing security.
** Cost for federal income tax purposes is $21,981,815.
+ Adjustable rate index notes are inversely indexed to the value of the
underlying security.
See notes to financial statements.
-11-
<PAGE>
- --------------------------------------------------------------------------------
GAM EUROPE FUND
- --------------------------------------------------------------------------------
FUND MANAGEMENT
- --------------------------------------------------------------------------------
- ---------------
| | JOHN BENNETT (RIGHT) IS AN INVESTMENT DIRECTOR WITH
| | RESPONSIBILITY FOR EUROPEAN MARKETS. PRIOR TO JOINING GAM
| [PHOTO] | IN JANUARY 1993 HE WAS A 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.
| |
- ----------------
DAVID HOUSTON (LEFT) IS AN INVESTMENT DIRECTOR WITH RESPONSIBILITY FOR EUROPEAN
MARKETS. PRIOR TO JOINING GAM IN 1993 HE WAS A FUND MANAGER IN IVORY & SIME'S
EUROPEAN EQUITY TEAM. FROM 1987 TO 1989 HE WORKED AS AN INVESTMENT ANALYST AT
SCOTTISH LIFE ASSURANCE. MR. HOUSTON WAS EDUCATED AT THE UNIVERSITY OF ABERDEEN
AND IS QUALIFIED AS A SOLICITOR. HE 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 with
principal offices 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 EUROPE DEPOSIT
EUROPE SALES LOAD) INDEX RATE
31ST DEC, 95 US$10.04 733.45
- --------------------------------------------------------------------------------
% % % %
- --------------------------------------------------------------------------------
Average annual total return:-
- --------------------------------------------------------------------------------
1 year to Dec, 1995 + 16.77 + 10.93 + 22.13 + 6.01
- --------------------------------------------------------------------------------
5 years to Dec, 1995 + 5.56 + 4.48 + 12.14 + 4.68
- --------------------------------------------------------------------------------
Since inception + 1.60 + 0.74 + 9.48 + 5.31
- --------------------------------------------------------------------------------
Performances are calculated on a total return basis. During the quarter, a
dividend was paid of US$0.07. The Fund's 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 investor's shares, when redeemed, may be worth more or less
than their original cost.
-12-
<PAGE>
- --------------------------------------------------------------------------------
GAM EUROPE FUND -- REPORT TO SHAREHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
[CHART]
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 past performance of the index is no indication of
the future performance of either the index or the Fund.
- ---------------------
Sources used are the net asset value of the Fund computed daily and Datastream.
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 capitalization
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.
[The following table represents a Bar Chart in the printed report.]
AVERAGE ANNUAL TOTAL RETURN
GAM
GAM EUROPE MSCI
EUROPE (AFTER SALES LOAD) EUROPE INDEX
YEAR % % %
- ---------------------------------------------------------------------------
One Year 16.77 10.93 22.13
Three Years 11.55 9.66 17.62
Five Years 5.56 4.48 12.14
Since Inception 1.60 0.74 9.48
ANNUAL PERFORMANCE
[CHART]
GAM
GAM EUROPE MSCI
EUROPE (AFTER SALES LOAD) EUROPE INDEX
YEAR % % %
- ---------------------------------------------------------------------------
1991 (0.70) (5.67) 13.78
1992 (4.91) (9.66) (4.25)
1993 22.68 16.55 29.79
1994 (3.11) (7.95) 2.66
1995 16.77 10.93 21.13
-13-
<PAGE>
- --------------------------------------------------------------------------------
GAM EUROPE FUND
- --------------------------------------------------------------------------------
THE COMMENT
1995 ends with the irresistible force of liquidity driving financial assets
prices higher. Japan's much awaited reflation attempt has been welcomed in
adding fuel to this scenario. The result has been a reversal of last year's
fortunes in world bond markets and firm support for equity prices.
Yet liquidity alone cannot provide lasting sustenance to equities.
Ultimately that task falls to corporate earnings. In Europe, the consensus has
been wrong footed by faltering economic recovery and its effect on companies'
profits. Probably the most consistent message received from our meetings with
European businesses this year has been their lack of pricing power amidst fierce
competition and beleaguered consumers.
This environment makes it all the more difficult to embrace a European
monetary policy which seemingly seeks to fight the inflation battle of
yesterday. Indeed, just as the aspirants to the German monetary model try to
demonstrate their credentials, their economies show increasing signs of needing
the reverse. It is our belief that short-term interest rates must fall across
large parts of Europe that keeps the Fund substantially exposed to equities.
- --------------------------------------------------------------------------------
On 14th December, 1995, the Board of Directors of the Fund approved a 10 for 1
stock split which was effected in the form of a stock dividend of 9 shares. In
addition, in connection with the dividend, as of 19th December, 1995 the net
asset value of the Fund was reduced to one-tenth of its net asset value
immediately prior to the stock dividend.
STATEMENT OF INVESTMENTS
AS AT 31ST DECEMBER, 1995
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ FUND
- --------------------------------------------------------------------------
ADJUSTABLE RATE INDEX NOTES
GERMANY
+ DLJ ARIN, Indexed to 295
shares, Plettac 1996-08-16 109,459 0.48
+ DLJ ARIN, Indexed to 300
shares, Plettac 1996-08-23 106,456 0.47
----------- -----
215,915 0.95
----------- -----
TOTAL ADJUSTABLE RATE INDEX NOTES
(COST $175,057) 215,915 0.95
----------- -----
CONVERTIBLES
FRANCE
1,460 AXA 4.5% CV 1999-01-01 103,881 0.45
----------- -----
103,881 0.45
----------- -----
TOTAL CONVERTIBLES (COST $85,996) 103,881 0.45
----------- -----
EQUITIES
DENMARK
7,660 Unidanmark A 379,294 1.65
----------- -----
379,294 1.65
----------- -----
FRANCE
10,500 AXA 708,444 3.09
11,250 But 609,538 2.65
2,400 Comptoirs Modernes 780,209 3.40
1,270 NSC 213,960 0.93
1,950 Peugeot 257,555 1.12
11,340 SEITA 411,542 1.79
7,568 Ste. Guilbert SA 889,716 3.87
7,700 Technip 530,546 2.31
12,750 Total B 861,557 3.75
3,550 Virbac 435,494 1.90
----------- -----
5,698,561 24.81
----------- -----
GERMANY
850 Buderus 330,719 1.44
535 Sto Pfd Bearer 268,591 1.17
19,650 Veba 834,421 3.63
----------- -----
1,433,731 6.24
----------- -----
ITALY
*90,000 Stayer 147,359 0.64
*93,956 Telecom Italia Mobile 98,810 0.43
-14-
<PAGE>
- --------------------------------------------------------------------------------
GAM EUROPE FUND -- STATEMENT OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ FUND
- --------------------------------------------------------------------------
*310,000 Telecom Italia Mobile Savings 545,636 2.38
----------- -----
791,805 3.45
----------- -----
NETHERLANDS
6,200 ABN-AMRO Holding 282,369 1.23
45,325 Elsevier 604,309 2.63
3,858 Eriks Holdings 300,455 1.31
17,155 KPN 623,113 2.71
4,750 Royal Dutch Petroleum Bearer 663,493 2.89
4,315 Telegraaf Holding 607,570 2.65
----------- -----
3,081,309 13.42
----------- -----
NORWAY
21,700 Sparebanken 560,531 2.44
----------- -----
560,531 2.44
----------- -----
PORTUGAL
*18,650 Portugal Telecom 350,809 1.53
*++8,297 Sotancro - -
----------- -----
350,809 1.53
----------- -----
SPAIN
5,000 Banco Popular Registered 920,513 4.01
5,310 Gas y Electricidad 296,728 1.29
----------- -----
1,217,241 5.30
----------- -----
SWEDEN
25,000 Kalmar (Fria) 414,015 1.80
----------- -----
414,015 1.80
----------- -----
SWITZERLAND
685 Ciba-Geigy Registered 602,491 2.62
105 Roche Genussscheine 830,264 3.62
755 Affichage Genussscheine 333,665 1.45
----------- -----
1,766,420 7.69
----------- -----
UNITED KINGDOM
3,044 Argyll Group (Restricted) 16,078 0.07
107,075 Argyll Group 565,559 2.46
72,500 B.A.T. Industries 638,605 2.78
24,580 Barratt Developments 94,126 0.41
21,600 Beazer Holmes 58,722 0.26
12,090 Bellway 49,208 0.22
113,400 British Telecom 621,869 2.71
106,965 New Burford 176,140 0.77
210,000 Metalrax Group 375,170 1.63
112,160 Tesco 517,494 2.25
156,500 Tomkins 684,390 2.99
*260,515 Trocadero 184,143 0.80
14,400 Wolstenholme Rink 218,111 0.95
17,300 Zeneca 334,735 1.46
----------- -----
4,534,350 19.76
----------- -----
TOTAL EQUITIES (COST $18,666,306) 20,228,066 88.09
----------- -----
SHORT-TERM INVESTMENTS
1,900,000 Toronto-Dominion Bank 5.87%
Time Deposit 1996-01-02 1,900,000 8.27
----------- -----
1,900,000 8.27
----------- -----
TOTAL SHORT-TERM INVESTMENTS (COST $1,900,000) 1,900,000 8.27
----------- -----
TOTAL INVESTMENTS (COST $20,827,359**) 22,447,862 97.76
----------- -----
NET CURRENT ASSETS 513,571 2.24
----------- -----
TOTAL NET ASSETS 22,961,433 100.00
=========== =====
[The following table represents a Pie Chart in the printed report.]
GEOGRAPHIC ANALYSIS
AS AT 31ST DECEMBER, 1995
UNITED KINGDOM ....................19.76%
FRANCE ............................25.26%
SHORT-TERM INVESTMENTS ............ 8.27%
GERMANY ........................... 7.19%
SWITZERLAND ....................... 7.69%
ITALY ............................. 3.45%
NETHERLANDS .......................13.42%
SPAIN ............................. 5.30%
NORWAY ............................ 2.44%
PORTUGAL .......................... 1.53%
SWEDEN ............................ 1.80%
DENMARK ........................... 1.65%
NET CURRENT ASSETS ................ 2.24%
* Non-income producing security.
** Cost for federal income tax purposes is $20,858,022.
+ Adjustable rate index notes are inversely indexed to the value of the
underlying security.
++ Fair value determined by the Board of Directors.
See notes to financial statements.
-15-
<PAGE>
- --------------------------------------------------------------------------------
GAM PACIFIC BASIN FUND
- --------------------------------------------------------------------------------
FUND MANAGEMENT
- --------------------------------------------------------------------------------
- ---------------
| | MICHAEL S. BUNKER HAS OVERALL RESPONSIBILITY FOR ASIAN
| | INVESTMENT POLICY. HE HAS OVER 20 YEARS INVESTMENT
| [PHOTO] | EXPERIENCE, PRIMARILY IN ASIAN MARKETS. HE JOINED GAM IN
| | 1985 TO CREATE ITS ASIAN INVESTMENT TEAM.
| |
| |
| |
| |
- ----------------
The Fund's 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 AVERAGE
PACIIC BASIN MSCI 1 MONTH
GAM CLASS A PACIFIC DEPOSIT
PACIFIC BASIN (AFTER INDEX RATE
CLASS A SALES LOAD)
31st Dec, 95 US$16.97 2,361.71
- --------------------------------------------------------------------------------
% % % %
- --------------------------------------------------------------------------------
Average annual total return:-
- --------------------------------------------------------------------------------
1 year to Dec, 1995 + 4.50 - 0.72 + 2.99 + 6.01
- --------------------------------------------------------------------------------
5 years to Dec, 1995 +14.60 +13.44 + 7.63 + 4.68
- --------------------------------------------------------------------------------
Since inception +11.88 +11.22 + 1.98 + 6.26
- --------------------------------------------------------------------------------
Performances are calculated on a total return basis. During the quarter,
dividends were paid for Class A of US$0.80 and for Class D of US$0.80. 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.
-16-
<PAGE>
- --------------------------------------------------------------------------------
GAM PACIFIC BASIN FUND -- REPORT TO SHAREHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
[CHART]
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 past performance of the index
is no indication of the future performance of either the index or the Fund.
- ---------------------
Sources used are the net asset value of the Fund computed daily , Morgan Stanley
Capital International, Geneva and Datastream.
The MSCI Pacific Index is an arithmetical average weighted by market value of
the performance of some 410 securities listed on the stock exchanges of
Australia, Hong Kong, New Zealand, Singapore/ Malaysia and Japan. The combined
market capitalization of these companies represents approximately 60% of the
aggregate market value of the stock exchanges of the above 5 countries. The
percentage change in the value of the index includes dividends reinvested.
The Facts -- Class D Shares
GAM AVERAGE
GAM PACIFIC BASIN MSCI 1 MONTH
PACIFIC BASIN CLASS D PACIFIC DEPOSIT
CLASS D (AFTER INDEX RATE
SALES LOAD)
31st Dec, 95 US$16.96 2,361.71
- --------------------------------------------------------------------------------
% % % %
- --------------------------------------------------------------------------------
Inception to Dec, 1995 + 2.35 - 1.23 + 7.95 + 1.15
- --------------------------------------------------------------------------------
[CHART]
-17-
<PAGE>
- --------------------------------------------------------------------------------
GAM PACIFIC BASIN FUND -- REPORT TO SHAREHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
[The following table represents a Bar Chart in the printed report.]
AVERAGE ANNUAL TOTAL RETURN - CLASS A
GAM
GAM PACIFIC BASIN MSCI
PACIFIC BASIN CLASS A PACIFIC
CLASS A (AFTER SALES LOAD) INDEX
Year % % %
- --------------------------------------------------------------------------------
One Year 4.50 - 0.72 2.99
Three Years 19.36 17.34 16.54
Five Years 14.60 13.44 7.63
Since Inception 11.88 11.22 1.98
ANNUAL PERFORMANCE - CLASS A
[CHART]
GAM
GAM PACIFIC BASIN MSCI
PACIFIC BASIN CLASS A PACIFIC
CLASS A (AFTER SALES LOAD) INDEX
Year % % %
- --------------------------------------------------------------------------------
1991 16.71 10.88 11.54
1992 (0.37) (5.35) (18.20)
1993 51.52 43.94 35.97
1994 7.41 2.04 13.03
1995 4.54 (0.72) 2.99
THE COMMENT
The Japanese stock market has been strongly influenced by moves in the
currency during 1995, the yen rising to a level of 80 against the US dollar in
the summer months, only to fall back below 100 coming into the last quarter of
the year. Share prices have generally followed this "V" shaped pattern with the
Nikkei Index hitting a low of 14,485.41 in July, only to rebound above the
19,000 mark in December. There are now signs that the economy is starting to
improve after several years of stagnation, but it will require a prolonged
period of very low interest rates and improving consumer confidence to
significantly change the deflationary environment. In comparison, some
manufacturing companies appear relatively attractive on a highly selective basis
due to a combination of improving demand, cost cutting and the weaker currency.
With the exception of Hong Kong, which has rebounded, most of the
south-east Asian markets have experienced a second year of consolidation with
quality earnings, sound management and consistent growth dictating share price
levels for individual companies. This broad de-rating is now in its final stages
and with the region's economies still experiencing high growth, prospects for
equity investment are sound. Electronics companies in Korea and Taiwan, consumer
stocks in Indonesia and banks in Thailand and Singapore are among some of the
favoured sectors.
In Australia, investment is still concentrated in major mining houses where
demand for base metals is expected to run strongly, particularly given the
significant falls in inventories in 1995.
- --------------------------------------------------------------------------------
On 14th December, 1995, the Board of Directors of the Fund approved a 10 for 1
stock split which was effected in the form of a stock dividend of 9 shares. In
addition, in connection with the dividend, as of 19th December, 1995 the net
asset value of the Fund was reduced to one-tenth of its net asset value
immediately prior to the stock dividend.
-18-
<PAGE>
- --------------------------------------------------------------------------------
GAM PACIFIC BASIN FUND -- STATEMENT OF INVESTMENTS
- --------------------------------------------------------------------------------
AS AT 31ST DECEMBER, 1995
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ FUND
- --------------------------------------------------------------------------
CONVERTIBLES
HONG KONG
760,000 Wharf Capital International 5%
CV 2000-07-15 824,600 1.49
----------- -----
824,600 1.49
----------- -----
TAIWAN
500,000 Far Eastern Department Stores
3% CV 2001 442,812 0.80
420,000 United Micro Electronics
1.25% CV 2004 532,350 0.96
----------- -----
975,162 1.76
----------- -----
TOTAL CONVERTIBLES (COST $1,674,949) 1,799,762 3.25
----------- -----
EQUITIES
AUSTRALIA
*329,400 Ampolex 719,790 1.30
95,500 Broken Hill Proprietary 1,348,628 2.43
*5,475 CRA New 78,944 0.14
73,000 CRA 1,071,038 1.93
514,000 M.I.M Holdings 710,577 1.28
*192,000 Novus Petroleum 231,181 0.42
213,500 Pacific BBA 444,315 0.80
141,875 WMC 911,076 1.64
----------- -----
5,515,549 9.94
----------- -----
HONG KONG
167,000 Swire Pacific A 1,295,829 2.34
----------- -----
1,295,829 2.34
----------- -----
INDONESIA
456,400 Bank Bali (FR) 898,229 1.62
404,000 Hero Supermarket (FR) 865,777 1.56
454,000 Mayorah Indah (FR) 327,619 0.59
157,000 Modern Photo Film (FR) 909,797 1.64
*157,000 Mustika Ratu (FR) 240,324 0.43
----------- -----
3,241,746 5.84
----------- -----
JAPAN
13,000 Canon 235,448 0.43
19,950 Canon Sales 531,356 0.96
16,000 Daiichi Corp. (8199) 378,111 0.68
132 DDI Corp. 1,022,760 1.84
9,000 Japan Associated Finance 950,121 1.71
9,000 Japan Oil Transportation 56,659 0.10
46,000 Joshin Denki 601,453 1.08
24,000 Kirin Beverage 323,099 0.58
39,000 Matsushita Electric Industrial 634,576 1.14
84,000 Mitsubishi Estate 1,049,492 1.89
15,000 Morita Fire Pump Mfg. 130,169 0.24
11,000 Murata Manufacturing 404,843 0.73
12,000 Nihon Dempa 268,475 0.48
33,000 ORIX Corp. 1,358,354 2.45
17,000 Secom 1,182,179 2.13
60,000 Sekisui Chemical 883,293 1.59
*36,000 Sodick 338,208 0.61
14,600 Sony 875,293 1.58
104,000 Sumitomo Marine & Fire 854,160 1.54
66,000 Suzuki Motor 735,109 1.33
8,000 Tachihi Enterprise 262,663 0.47
35,000 Takeda Chemical 576,271 1.04
126,000 Toshiba Corp. 987,254 1.78
19,900 Xebio 703,488 1.27
----------- -----
15,342,834 27.65
----------- -----
KOREA
34,000 Hyundai Motor GDR 510,000 0.92
18,000 Korea Electric Power ADR 477,000 0.86
14,000 LG Electronics 487,270 0.88
*524 LG Electronics New 1 17,900 0.03
268 Samsung Electronics GDS
(1/2 Voting) 1995 24,356 0.04
24,505 Samsung Electronics GDS
(Non-Voting) 1,433,542 2.58
2,810 Samsung Electronics GDS
(Non-Voting) New 164,385 0.30
27,000 Shinhan Bank 587,230 1.06
*5,508 Shinhan Bank New 1 114,811 0.21
----------- -----
3,816,494 6.88
----------- -----
MALAYSIA
102,500 Genting 855,613 1.54
103,000 Hume Industries (Malaysia) 494,783 0.89
----------- -----
1,350,396 2.43
----------- -----
NEW ZEALAND
463,098 Carter Holt Harvey 999,076 1.80
173,800 Telecom Corp. of New Zealand 749,903 1.35
----------- -----
1,748,979 3.15
----------- -----
PHILIPPINES
9,000 Philippine Long Distance
Telephone 488,944 0.88
----------- -----
488,944 0.88
----------- -----
-19-
<PAGE>
- --------------------------------------------------------------------------------
GAM PACIFIC BASIN FUND -- STATEMENT OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ FUND
- --------------------------------------------------------------------------
SINGAPORE
112,750 Development Bank of
Singapore (FR) 1,402,899 2.53
634,000 Kim Eng Holdings 582,679 1.05
126,666 Overseas Chinese Banking Corp.
(FR) 1,585,004 2.86
375,000 Wing Tai Holdings 766,172 1.38
----------- -----
4,336,754 7.82
----------- -----
THAILAND
65,750 Bumrungrad Hospital (FR) 91,356 0.16
355,000 Krung Thai Bank (FR) 1,465,661 2.64
47,000 Post Publishing (FR) 261,215 0.47
*121,000 Sahavirya Steel Industries (FR) 160,917 0.29
125,010 Thai Farmers Bank (FR) 1,260,522 2.27
205,000 Thai Glass Industries (FR) 976,578 1.76
235,500 Thai Military Bank (FR) 953,592 1.72
----------- -----
5,169,841 9.31
----------- -----
TOTAL EQUITIES (COST $37,707,300) 42,307,366 76.24
----------- -----
EQUITY WARRANTS
INDONESIA
*52,800 Bank Bali (FR) Wts 2000 23,092 0.04
----------- -----
23,092 0.04
----------- -----
JAPAN
*710 Canon Sales Wts 1999 122,435 0.22
*165 Kyocera Wts 1998 212,437 0.38
*90 Olympus Optical Wts 1996 21,375 0.04
*130 Rohm Wts 1997 85,052 0.15
*190 Seino Transportation Wts 1997 68,875 0.12
*96 Shimano Wts 1996 47,578 0.09
*275 Tobu Railway Wts 1998 96,250 0.17
----------- -----
654,002 1.17
----------- -----
SINGAPORE
*71,000 Keppel Corporation Wts 1997 323,754 0.58
----------- -----
323,754 0.58
----------- -----
TOTAL EQUITY WARRANTS (COST $1,276,216) 1,000,848 1.79
----------- -----
SHORT-TERM INVESTMENTS
7,900,000 Toronto-Dominion 5.87% Time
Deposit 1996-01-02 7,900,000 14.24
----------- -----
7,900,000 14.24
----------- -----
TOTAL SHORT-TERM INVESTMENTS (COST $7,900,000) 7,900,000 14.24
----------- -----
TOTAL INVESTMENTS (COST $48,558,465**) 53,007,976 95.52
----------- -----
NET CURRENT ASSETS 2,483,429 4.48
----------- -----
TOTAL NET ASSETS 55,491,405 100.00
=========== =====
[The following table represents a Pie Chart in the printed report.]
GEOGRAPHIC ANALYSIS
AS AT 31ST DECEMBER, 1995
SHORT-TERM INVESTMENTS ............14.24%
JAPAN .............................28.82%
AUSTRALIA ......................... 9.94%
THAILAND .......................... 9.31%
SINGAPORE ......................... 8.40%
KOREA ............................. 6.88%
INDONESIA ......................... 5.88%
HONG KONG ......................... 3.83%
NEW ZEALAND ....................... 3.15%
MALAYSIA .......................... 2.43%
TAIWAN ............................ 1.76%
OTHER AREAS ....................... 0.88%
NEW CURRENT ASSETS ................ 4.48%
* Non-income producing security.
** Cost for federal income tax purposes is $49,998,342.
See notes to financial statements.
-20-
<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 Fund's 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 AVERAGE
CAPITAL TOKYO 1 MONTH
(AFTER S.E. DEPOSIT
GAM JAPAN SALES INDEX RATE
CAPITAL LOAD)
31st Dec, 95 US$10.16 1,577.70
- --------------------------------------------------------------------------------
% % % %
- --------------------------------------------------------------------------------
Average annual total return:-
- --------------------------------------------------------------------------------
1 year to Dec, 1995 + 6.45 + 1.12 - 1.32 + 6.01
- --------------------------------------------------------------------------------
Since inception + 1.61 - 1.80 - 5.47 + 5.67
- --------------------------------------------------------------------------------
Performances are calculated on a total return basis. The Fund's 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 investor's shares, when redeemed, may be
worth more or less than their original cost.
-21-
<PAGE>
- --------------------------------------------------------------------------------
GAM JAPAN CAPITAL FUND -- REPORT TO SHAREHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
[CHART]
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 past performance of the index is no indication of
the future performance of either the index or the Fund.
The average annual total return of GAM Japan Capital after deduction of
maximum sales charge of 5% was 1.12% for 1 year and -1.80% since inception for
the period ending December 31st, 1995.
- ---------------------
Sources used are the net asset value of the Fund computed daily and Datastream.
The Tokyo Stock Exchange Index (TOPIX) is a capitalization-weighted composite
index of approximately 1,200 companies listed on the First section of the Tokyo
Stock Exchange. The combined market capitalization 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.
THE COMMENT
After six difficult years and many false dawns prospects are finally
beginning to improve. By the middle of this year the market had fallen back to
the precarious lows of 1992 which forced aggressive action from the financial
authorities. Interest rates were driven down to record lows, short rates fell to
1/2%, while foreign currency intervention by the Bank of Japan finally reined in
the overvalued yen. Action by the Ministry of Finance to boost exports of
capital to further weaken the yen, combined with efforts to encourage a speedier
solution to the bad debt problems of the banking system, suggest that the
dangers of an accelerating deflationary spiral are now in the past.
Prospects have improved but optimism is still tempered by valuation
concerns: because of the need to defend the banks, stocks were never allowed to
fall to bargain levels. Moreover, although prospects for the economy in 1996
would appear better than for some time, progress in restructuring the financial
system and opening up the economy could still prove frustratingly slow. Your
Fund continues to focus on value and avoid large parts of the market regardless
of their weighting in the index. Currently investments are concentrated in the
areas of technology, retailing and more recently financials, excluding the
banks. With interest rates likely to remain low and the trade surplus having
peaked the Fund continues to be cautious about the prospects for the yen. The
Fund is currently 70% hedged back into the dollar.
- --------------------------------------------------------------------------------
On 14th December, 1995, the Board of Directors of the Fund approved a 10 for 1
stock split which was effected in the form of a stock dividend of 9 shares. In
addition, in connection with the dividend, as of 19th December, 1995 the net
asset value of the Fund was reduced to one-tenth of its net asset value
immediately prior to the stock dividend.
-22-
<PAGE>
- --------------------------------------------------------------------------------
GAM JAPAN CAPITAL FUND -- STATEMENT OF INVESTMENTS
- --------------------------------------------------------------------------------
AS AT 31ST DECEMBER, 1995
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ FUND
- --------------------------------------------------------------------------
ADJUSTABLE RATE INDEX NOTES
+ DLJ ARIN, Indexed to 2,000 shares,
Fuji Bank 1996-12-14 44,552 0.33
----------- -----
44,552 0.33
----------- -----
TOTAL ADJUSTABLE RATE INDEX NOTES 44,552 0.33
(COST $45,121) ----------- -----
EQUITIES
APPLIANCES & HOUSEHOLD DURABLES
2,000 Itoki Crebio 15,496 0.11
5,500 Sony 329,734 2.42
----------- -----
345,230 2.53
----------- -----
AUTOMOBILES
20,000 Suzuki Motor 222,760 1.64
----------- -----
222,760 1.64
----------- -----
BEVERAGES & TOBACCO
*8,000 Circle K Japan 352,542 2.60
10,000 Kirin Beverage 134,625 0.98
1,000 Mikuni Coca-Cola Bottling 13,656 0.10
----------- -----
500,823 3.68
----------- -----
BUSINESS & PUBLIC SERVICES
4,800 Credit Saison 114,363 0.84
400 NIC Corp. 5,656 0.04
3,200 Nihon Jumbo 111,884 0.82
8,000 Wesco 193,705 1.42
----------- -----
425,608 3.12
----------- -----
CHEMICALS
3,000 Teikoku Hormone Manufacturing 43,583 0.32
----------- -----
43,583 0.32
----------- -----
CONSTRUCTION & HOUSING
10,000 Almetax Manufacturing 115,254 0.85
2,000 Chodai 65,860 0.49
400 Ishiguro Homa 7,090 0.05
1,000 Japan Engineering Consultants 17,918 0.13
22,000 Sansei Yusoki 304,697 2.24
----------- -----
510,819 3.76
----------- -----
ELECTRICAL & ELECTRONICS
15,000 Anritsu 162,712 1.20
16,000 NEC Corp. 195,254 1.44
3,000 Nihon Dempa 67,119 0.49
17,600 Nippon Denwa Shisetsu 136,879 1.01
4,030 Okinawa Electric Power 108,898 0.80
9,000 Omron 207,458 1.53
7,000 Secom 486,780 3.58
1,500 Shinko Electric Industries 60,436 0.43
52,000 Toshiba Corp. 407,438 3.00
----------- -----
1,832,974 13.48
----------- -----
ELECTRONIC COMP. & INSTRUMENTS
2,000 TDK Corp. 102,082 0.75
----------- -----
102,082 0.75
----------- -----
FINANCIAL SERVICES
*7,000 Credia 187,797 1.38
7,000 Hitachi Credit 126,780 0.93
3,000 Japan Associated Finance 316,707 2.33
5,000 Nichiei (8577) 372,881 2.74
1,500 Shohkoh Fund 281,840 2.08
----------- -----
1,286,005 9.46
----------- -----
HEALTH & PERSONAL CARE
4,000 Amway (Japan) 168,910 1.24
8,000 Banyu Pharmaceutical 98,402 0.73
16,000 Eisai 280,484 2.06
10,200 Santen Pharmaceutical 231,167 1.70
*3,000 Sawai Pharmaceutical 103,148 0.76
6,000 Takeda Chemical 98,789 0.73
3,000 Towa Pharmaceutical 110,412 0.80
----------- -----
1,091,312 8.02
----------- -----
INDUSTRIAL COMPONENTS
11,000 Okamura Corp. 84,165 0.62
5,000 Rinnai 116,707 0.86
3,000 Sumida Electric 36,610 0.27
----------- -----
237,482 1.75
----------- -----
INSURANCE
36,000 Dai Tokyo Fire & Marine Insurance 274,751 2.02
46,000 Sumitomo Marine & Fire 377,801 2.78
9,000 Tokio Marine & Fire Insurance 117,675 0.87
----------- -----
770,227 5.67
----------- -----
-23-
<PAGE>
- --------------------------------------------------------------------------------
GAM JAPAN CAPITAL FUND -- STATEMENT OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ FUND
- --------------------------------------------------------------------------
MACHINERY & ENGINEERING
17,000 Amada 167,942 1.24
3,000 Amada Metrecs 47,942 0.35
10,000 Komatsu Forklift 66,344 0.49
42,000 Mitsubishi Heavy Industries 334,780 2.46
*2,000 Sodick 18,789 0.14
22,000 Takuma 300,436 2.21
4,000 Tsubakimoto Precision Products 55,400 0.40
----------- -----
991,633 7.29
----------- -----
MERCHANDISING
6,000 Joshin Denki 78,450 0.58
5,000 Jusco 130,266 0.96
20,000 Marui 416,465 3.07
10,300 Xebio 364,116 2.66
----------- -----
989,297 7.27
----------- -----
REAL ESTATE
15,000 Daiwa Kosho Lease 149,637 1.10
9,800 ORIX Corp. 403,390 2.97
2,000 Tachihi Enterprise 65,666 0.48
15,000 TOC 149,637 1.10
----------- -----
768,330 5.65
----------- -----
RECREATION,
OTHER CONSUMER GOODS
17,000 Canon 307,893 2.27
12,000 Fuji Photo Film 346,344 2.55
5,000 Nissha Printing 74,092 0.55
----------- -----
728,329 5.37
----------- -----
TELECOMMUNICATIONS
9,000 Broadcasting System of Niigata 113,317 0.83
26 DDI Corp. 201,453 1.48
----------- -----
314,770 2.31
----------- -----
WHOLESALE & INTERNATIONAL TRADE
1,000 Itoki 5,724 0.04
35,000 Nissho Iwai 179,661 1.32
3,000 Royal 100,242 0.74
----------- -----
285,627 2.10
----------- -----
TOTAL EQUITIES (COST $10,865,104) 11,446,891 84.17
----------- -----
EQUITY WARRANTS
ELECTRICAL & ELECTRONICS
*50 Rohm Wts 1997 32,712 0.24
----------- -----
32,712 0.24
----------- -----
ELECTRONIC COMP. & INSTRUMENTS
*35 Kyocera Wts 1998 45,063 0.33
----------- -----
45,063 0.33
----------- -----
INDUSTRIAL COMPONENTS
*20 Shimano Wts 1996 9,912 0.07
----------- -----
9,912 0.07
----------- -----
MACHINERY & ENGINEERING
*35 Toyo Engineering Wts 1997 9,625 0.07
----------- -----
9,625 0.07
----------- -----
RECREATION,
OTHER CONSUMER GOODS
*150 Canon Sales Wts 1997 15,988 0.12
*190 Canon Sales Wts 1999 32,764 0.24
----------- -----
48,752 0.36
----------- -----
TRANSPORATION - ROAD & RAIL
*30 Seino Transporation Wts 1997 10,875 0.08
----------- -----
10,875 0.08
----------- -----
TOTAL EQUITY WARRANTS (COST $214,315) 156,939 1.15
----------- -----
SHORT-TERM INVESTMENTS
400,000 Toronto-Dominion 5.87% Time
Deposit 1996-01-02 400,000 2.94
----------- -----
400,000 2.94
----------- -----
TOTAL SHORT-TERM INVESTMENTS
(COST $400,000) 400,000 2.94
----------- -----
TOTAL INVESTMENTS (COST $11,524,540**) 12,048,382 88.59
----------- -----
NET CURRENT ASSETS 1,551,621 11.41
----------- -----
TOTAL NET ASSETS 13,600,003 100.00
=========== =====
* Non-income producing security.
** Cost for federal income tax purposes is $11,702,952.
+ Adjustable rate index notes are inversely indexed to the value of the
underlying security.
See notes to financial statements.
-24-
<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
| [PHOTO] | OF GARTMORE LIMITED, HONG KONG, RESPONSIBLE FOR SOUTH EAST
| | 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 with
principal offices 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
GAM ASIAN MSCI
CAPITAL COMBINED AVERAGE
GAM (AFTER FAR EAST 1 MONTH
ASIAN SALES INDEX DEPOSIT
CAPITAL LOAD) (EX JAPAN) RATE
31st Dec, 95 US$9.53 302.02
- --------------------------------------------------------------------------------
% % % %
- --------------------------------------------------------------------------------
INCEPTION TO DEC, 1995 - 4.25 - 9.04 - 1.51 + 3.75
- --------------------------------------------------------------------------------
Performances are calculated on a total return basis. During the quarter, a
dividend was paid of US$0.04. The Fund's 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 investor's shares, when redeemed, may be worth more or less
than their original cost.
-25-
<PAGE>
- --------------------------------------------------------------------------------
GAM ASIAN CAPITAL FUND -- REPORT TO SHAREHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
[CHART]
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 performance of the index is no indication of the
future performance of either the index or the Fund.
The average annual total return of GAM Asian Capital after deduction of
maximum sales charge of 5% was - 9.04% since inception for the period ending
31st December, 1995.
- ---------------------
Sources used are the 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 capitalization 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.
THE COMMENT
In 1995, faster than expected economic growth, particularly in the
south-east Asian countries of Malaysia, Thailand and Indonesia, resulted in a
general tightening of macroeconomic policies. As a result, most Asian domestic
investors found their own equity markets relatively unattractive as an asset
class. Foreign investors, meanwhile, have had their attention deflected not only
towards the nascent recovery in Japan, but more so towards the record breaking
performance of the bigger global equity markets in America and Europe.
Consequently, with little, if any, new money entering the region, the
performance of equities in the final quarter of 1995 has been subdued.
Additionally, the supply of new equity issues has also had the effect of
depressing share prices.
Looking forward, those familiar with Asia currently recognise that the
price one is being asked to pay to participate in Asia's growth prospects is, in
general, as low as it has been for several years. The economic foundations of
Asia's success are still in place whilst the trough, in 1996, of the current
corporate earnings cycle is already being discounted. Excellent long-term value
has now reappeared in many of the larger capitalised companies across the
region. It is in these blue chips of Asia that the Fund is now being
concentrated, as they are usually the initial beneficiaries of investors' cash
when Asia returns to favour. Sectoral investment themes from the past are still
attractive for the future, particularly consumer, banking, telecommunications
and electronics and later in the cycle, property will also return to favour.
- --------------------------------------------------------------------------------
On 14th December, 1995, the Board of Directors of the Fund approved a 10 for 1
stock split which was effected in the form of a stock dividend of 9 shares. In
addition, in connection with the dividend, as of 19th December, 1995 the net
asset value of the Fund was reduced to one-tenth of its net asset value
immediately prior to the stock dividend.
-26-
<PAGE>
- --------------------------------------------------------------------------------
GAM ASIAN CAPITAL FUND -- STATEMENT OF INVESTMENTS
- --------------------------------------------------------------------------------
AS AT 31ST DECEMBER, 1995
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ FUND
- --------------------------------------------------------------------------
CONVERTIBLES
TAIWAN
60,000 U-Ming Marine 1.5% CV 2001 53,550 0.96
110,000 United Micro Electronics 1.25%
CV 2004 139,425 2.51
20,000 United Micro Electronics 1.25%
CV 2004 25,350 0.46
60,000 Yang Ming Marine Transport 2%
CV 2001-10-06 63,300 1.14
----------- -----
281,625 5.07
----------- -----
TOTAL CONVERTIBLES (COST $345,710) 281,625 5.07
----------- -----
EQUITIES
AUSTRALIA
3,500 Freeport McMoran Copper &
Gold A 98,000 1.76
----------- -----
98,000 1.76
----------- -----
CHINA
*12,000 Acer GDR 159,000 2.86
*3,500 Siliconware Precision Industries
GDR 57,750 1.04
----------- -----
216,750 3.90
----------- -----
HONG KONG
74,000 Cathay Pacific Airways 112,926 2.03
230,000 CDL Hotels 117,491 2.11
48,000 First Pacific Company 53,075 0.95
160,000 JCG Holdings 116,909 2.10
208,000 Li & Fung 185,606 3.34
----------- -----
586,007 10.53
----------- -----
INDONESIA
34,500 Aneka Kimia Raya (FR) 75,443 1.35
*107,500 Asahimas Flat Glass (FR) 104,609 1.88
25,850 Bank Bali (FR) 50,875 0.91
6,000 Hanjaya Mandala Sampoerna (FR) 62,454 1.12
44,000 Sekar Bumi (FR) 38,487 0.69
31,000 Sorini Corp. (FR) 150,492 2.71
*39,000 Telekomunikasi Indonesia (FR) 51,170 0.92
6,000 Tri Polyta Indonesia ADR 82,500 1.48
----------- -----
616,030 11.06
----------- -----
KOREA
4,000 Hyundai Motor GDR 60,000 1.08
5,000 Korea Electric Power ADR 132,500 2.38
*3,000 Samsung Electronics GDS
(Non Voting) 175,500 3.16
----------- -----
368,000 6.62
----------- -----
NEW ZEALAND
64,000 Carter Holt Harvey 138,072 2.48
20,000 Fernz Corporation 52,823 0.95
32,000 Fisher & Paykel 97,278 1.75
44,000 Fletcher Challenge - Ordinary
Division - NZ$ 101,540 1.83
51,000 Helicopter Line 110,026 1.98
109,000 Whitcoulls Group 135,392 2.43
----------- -----
635,131 11.42
----------- -----
PHILIPPINES
2,600 Philippine Long Distance
Telephone ADR 140,725 2.53
----------- -----
140,725 2.53
----------- -----
SINGAPORE
20,000 DBS Land 67,586 1.22
7,000 Development Bank of Singapore (FR) 87,098 1.57
25,000 Kim Eng Holdings 22,976 0.41
13,000 Singapore Airlines (FR) 121,315 2.18
60,000 ST Computer Systems Services (FR) 50,901 0.92
35,000 Wing Tai Holdings 71,509 1.29
----------- -----
421,385 7.59
----------- -----
TAIWAN
*6,000 China Steel GDR 100,500 1.81
*10,179 GVC Corp. GDR 89,066 1.60
*15,000 Yageo Corp. GDR 138,750 2.50
----------- -----
328,316 5.91
----------- -----
THAILAND
8,000 Bangkok Bank (FR) 97,181 1.75
21,000 Krung Thai Bank (FR) 86,701 1.56
14,000 Siam Commercial Bank (FR) 184,518 3.32
7,000 Thai Farmers Bank (FR) 70,584 1.27
36,000 Thai Glass Industries (FR) 171,497 3.08
36,000 Thai Military Bank (FR) 145,772 2.62
*60,000 Thai Reinsurance (FR) 228,662 4.11
----------- -----
984,915 17.71
----------- -----
TOTAL EQUITIES (COST $4,533,877) 4,395,259 79.03
----------- -----
EQUITY FUNDS
HONG KONG
*6,000 Formosa Growth Fund 79,500 1.43
----------- -----
79,500 1.43
----------- -----
-27-
<PAGE>
- --------------------------------------------------------------------------------
GAM ASIAN CAPITAL FUND -- STATEMENT OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ FUND
- --------------------------------------------------------------------------
TAIWAN
*10,000 ROC Taiwan Fund 105,000 1.89
*1 Taipei Fund B IDR 75,500 1.36
3,750 Taiwan Fund 76,875 1.38
----------- -----
257,375 4.63
----------- -----
TOTAL EQUITY FUNDS (COST $336,234) 336,875 6.06
----------- -----
EQUITY WARRANTS
INDONESIA
*2,200 Bank Bali (FR) Wts 2000 962 0.02
----------- -----
962 0.02
----------- -----
SINGAPORE
*25,000 Kim Eng Holdings Wts 1997 9,190 0.17
----------- -----
9,190 0.17
----------- -----
TOTAL EQUITY WARRANTS (COST $9,441) 10,152 0.19
----------- -----
SHORT-TERM INVESTMENTS
300,000 Toronto-Dominion 5.87% Time
Deposit 1996-01-02 300,000 5.40
----------- -----
300,000 5.40
----------- -----
TOTAL SHORT-TERM INVESTMENTS (COST $300,000) 300,000 5.40
----------- -----
TOTAL INVESTMENTS (COST $5,525,262**) 5,323,911 95.75
----------- -----
NET CURRENT ASSETS 236,504 4.25
----------- -----
TOTAL NET ASSETS 5,560,415 100.00
=========== =====
* Non-income producing security.
** Cost for federal income tax purposes is $5,535,362.
See notes to financial statements.
[The following table represents a Pie Chart in the printed report.]
GEOGRAPHIC ANALYSIS
AS AT 31ST DECEMBER, 1995
THAILAND ..........................17.71%
NEW ZEALAND .......................11.42%
TAIWAN ............................15.61%
INDONESIA .........................11.08%
HONG KONG .........................11.96%
SINGAPORE ......................... 7.76%
KOREA ............................. 6.62%
CHINA ............................. 3.90%
AUSTRALIA ......................... 1.76%
OTHER AREAS ....................... 2.53%
SHORT-TERM INVESTMENTS ............ 5.40%
NET CURRENT ASSETS ................ 4.25%
-28-
<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
| [PHOTO] | ANDERSON, CLAYTON & CO. AND HIS LAST ASSIGNMENT WITH THE
| | 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 with
principal offices 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
31st Dec, 95 US$11.93 615.93
- --------------------------------------------------------------------------------
% % % %
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN:-
- --------------------------------------------------------------------------------
1 year to Dec, 1995 +30.90 +24.35 +37.60 + 6.01
- --------------------------------------------------------------------------------
5 years to Dec, 1995 +12.05 +10.90 + 16.60 + 4.68
- --------------------------------------------------------------------------------
Since inception +10.34 +9.40 +13.06 + 5.31
- --------------------------------------------------------------------------------
Performances are calculated on a total return basis. During the quarter, a
dividend was paid of US.$0.04. The Fund's 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 investor's shares, when redeemed, may be worth more or less
than their original cost.
-29-
<PAGE>
- --------------------------------------------------------------------------------
GAM NORTH AMERICA FUND -- REPORT TO SHAREHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
[CHART]
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 past performance of the index is no indication of
the future performance of either the index or the Fund.
The average annual total return of GAM North America after deduction of
maximum sales charge of 5% was 24.35% for 1 year, and 10.90% for 5 years and
9.40% since inception for the period ending December 31st, 1995.
- ---------------------
Sources used are the net asset value of the Fund computed daily and Datastream.
The Standard & Poor's 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.
[The following table represents a Bar Chart in the printed report.]
AVERAGE ANNUAL TOTAL RETURN
GAM S & P
GAM NORTH AMERICA COMP
NORTH AMERICA (AFTER SALES LOAD) INDEX
Year % % %
- --------------------------------------------------------------------------------
One Year 30.90 24.35 37.60
Three Years 9.69 7.83 15.21
Five Years 12.05 10.90 16.52
Since Inception 10.34 9.40 13.06
ANNUAL PERFORMANCE
[CHART]
GAM S & P
GAM NORTH AMERICA COMP
NORTH AMERICA (AFTER SALES LOAD) INDEX
Year % % %
- --------------------------------------------------------------------------------
1991 30.69 24.16 30.52
1992 2.42 (2.70) 7.65
1993 (2.09) (6.99) 10.07
1994 2.97 (2.18) 1.27
1995 30.90 24.35 37.60
-30-
<PAGE>
- --------------------------------------------------------------------------------
GAM NORTH AMERICA FUND
- --------------------------------------------------------------------------------
THE COMMENT
We expect that average annual GDP growth will weaken to a range of 2.0-2.5%
in 1996, with inflation coming in below 3.0%. If our outlook is incorrect, it is
possible that growth and inflation will fall below our expectations,
particularly in the first half of 1996. However, we do not expect the economy to
lapse into recession. We see enough current pockets of strength to propel the
economy, in spite of the outlook for a weak holiday season. In our view, the
Federal Reserve's pre-emptive move against inflation in early 1994, before
inflationary pressures had been built irrevocably into the current economic
cycle, was a key factor behind the successful transition into a lengthened
cycle, with little evidence of pricing pressure in wage settlements or at the
producer or consumer levels.
The economy will need the stimulative effect of lower rates in the first
half of 1996, particularly if fiscal restraint is factored along with a
debt-laden consumer and stagnant export growth, due to weakness among the US's
principal trading partners. Although US equity markets have had outstanding
performance in 1995, there have been sharp reversals in such sectors as
technology and many issues have underperformed. Stock selection and portfolio
strategy to focus on high quality, global, industry leaders benefited results.
Portfolio performance was led by the consumer non-durables and healthcare
sectors with the most positive impact from shares of Coca-Cola, Merck, Johnson &
Johnson, Philip Morris, Pfizer, Gillette, PepsiCo and Procter & Gamble. Shares
of General Electric, 3M and Berkshire Hathaway were also strong.
- --------------------------------------------------------------------------------
On 14th December, 1995, the Board of Directors of the Fund approved a 10 for 1
stock split which was effected in the form of a stock dividend of 9 shares. In
addition, in connection with the dividends, as of 19th December, 1995 the net
asset value of the Fund was reduced to one-tenth of its net asset value
immediately prior to the stock dividend.
STATEMENT OF INVESTMENTS AS AT 31ST DECEMBER, 1995
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ FUND
--------------------------------------------------------------------
EQUITIES
AUTOMOBILES
1,000 Chrysler 55,375 0.93
3,918 Ford Motor 113,622 1.90
--------- ------
168,997 2.83
--------- ------
BANKING
2,200 Chemical Banking Corp. 129,250 2.16
3,000 Citicorp 201,750 3.37
--------- ------
331,000 5.53
--------- ------
BEVERAGE & TOBACCO
1,000 Anheuser-Busch 66,875 1.12
5,500 Coca-Cola 408,375 6.83
3,500 PepsiCo 195,563 3.27
3,800 Philip Morris 343,900 5.75
--------- ------
1,014,713 16.97
--------- ------
BROADCASTING & PUBLISHING
700 McGraw-Hill 60,988 1.02
500 Reader's Digest
Association A 25,625 0.43
--------- ------
86,613 1.45
--------- ------
BUSINESS & PUBLIC SERVICES
300 WMX Technologies 8,963 0.15
--------- ------
8,963 0.15
--------- ------
CHEMICALS
1,700 Dow Chemical 119,637 2.00
2,000 DuPont de Nemours 139,750 2.34
2,500 International Flavors &
Fragrances 120,000 2.01
--------- ------
379,387 6.35
--------- ------
ELECTRICAL & ELECTRONICS
1,000 Emerson Electric 81,750 1.37
3,800 General Electric (USA) 273,600 4.57
--------- ------
355,350 5.94
--------- ------
ELECTRICAL COMP. &
INSTRUMENTS
1,500 General Motors E 78,000 1.30
1,500 Intel Corp. 85,125 1.42
1,000 Motorola 57,000 0.95
1,800 Rockwell International 95,175 1.59
--------- ------
315,300 5.26
--------- ------
-31-
<PAGE>
- --------------------------------------------------------------------------------
GAM NORTH AMERICA FUND -- STATEMENT OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ FUND
--------------------------------------------------------------------
ENERGY SOURCES
2,500 Chevron Corp. 131,250 2.19
1,700 Exxon Corp. 136,212 2.28
1,400 Mobil 156,800 2.62
--------- ------
424,262 7.09
--------- ------
FINANCIAL SERVICES
1,000 Federal National Mortgage 124,125 2.08
--------- ------
124,125 2.08
--------- ------
FOOD & HOUSEHOLD PRODUCTS
1,700 Kellogg 131,325 2.20
2,000 McDonald's Corp. 90,250 1.51
2,500 Proctor & Gamble 207,500 3.47
--------- ------
429,075 7.18
--------- ------
FOREST PRODUCTS & PAPER
2,000 International Paper 75,750 1.27
--------- ------
75,750 1.27
--------- ------
HEALTH & PERSONAL CARE
3,000 Abbott Laboratories 125,250 2.09
1,500 American Home Products 145,500 2.43
* 1,000 Estee Lauder A 34,875 0.58
3,500 Gillette 182,438 3.05
2,500 Johnson & Johnson 214,062 3.58
4,500 Merck 295,875 4.95
3,000 Pfizer 189,000 3.16
--------- ------
1,187,000 19.84
--------- ------
INSURANCE
2,800 American General 97,650 1.63
--------- ------
97,650 1.63
--------- ------
LEISURE & TOURISM
1,500 Walt Disney 88,500 1.48
--------- ------
88,500 1.48
--------- ------
MERCHANDISING
800 American Stores 21,400 0.36
* 6 Berkshire Hathaway 192,600 3.22
3,000 Wal-Mart Stores 67,125 1.12
3,000 Walgreen 89,625 1.50
--------- ------
370,750 6.20
--------- ------
MULTI-INDUSTRY
1,800 AlliedSignal 85,500 1.43
2,000 Minnesota Mining &
Manufacturing 132,500 2.22
--------- ------
218,000 3.65
--------- ------
RECREATION,
OTHER CONSUMER GOODS
1,500 Eastman Kodak 100,500 1.68
--------- ------
100,500 1.68
--------- ------
TELECOMMUNICATIONS
1,300 A T & T 84,175 1.41
--------- ------
84,175 1.41
--------- ------
TRANSPORTATION -
ROAD & RAIL
1,200 Norfolk Southern 95,249 1.59
800 Union Pacific 52,800 0.88
--------- ------
148,049 2.47
--------- ------
TOTAL EQUITIES (COST $4,799,225) 6,008,159 100.46
--------- ------
TOTAL INVESTMENTS (COST $4,799,225**) 6,008,159 100.46
--------- ------
NET CURRENT ASSETS (27,405) (0.46)
--------- ------
TOTAL NET ASSETS 5,980,754 100.00
========= ======
* Non-income producing security.
** Cost for federal income tax purposes is identical.
See notes to financial statements.
-32-
<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 INTERNATIONAL MANAGEMENT
| [PHOTO] | LIMITED.
| |
| |
| |
| |
| |
- ----------------
The Fund's 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
31 Dec, 95 US$10.03 615.93
- --------------------------------------------------------------------------------
% % % %
- --------------------------------------------------------------------------------
Inception to Dec, 1995 + 1.38 - 3.69 + 19.03 + 3.75
- --------------------------------------------------------------------------------
Performances are calculated on a total return basis. During the period, a
dividend was paid of US.$0.11. The Fund's 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 investor's shares, when redeemed, may be worth more or less
than their original cost.
-33-
<PAGE>
- --------------------------------------------------------------------------------
GAMERICA CAPITAL FUND -- REPORT TO SHAREHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
[CHART]
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 past performance of the index is no indication of
the future performance of either the index or the Fund.
The average annual total return of GAMerica Capital after deduction of
maximum sales charge of 5% was -3.69% since inception for the period ending
December 31st, 1995.
- ---------------------
Sources used are the net asset value of the Fund which is computed daily and
Datastream.
The Standard & Poor's 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
The Comment
1995 was an exceptional year for the US stock market. Large gains in
corporate profits together with lower interest rates resulted in one of the
strongest markets seen for many years.
At the beginning of the year there was a feeling that rising interest rates
would push the economy into recession. As the automobile and housing industries
showed signs of slowing the fear of further Federal Reserve tightening abated
and long-term interest rates peaked. At the start of the second quarter the
economy initially showed signs of slowing but then rebounded further.
The large gain in corporate profits in this fourth year of economic
expansion has continued through recent fast and slow growth periods largely due
to profit margin expansion. The main driving force has been improvement in
manufacturing technologies. The fall in the cost of computer technology has not
only cut direct costs but has improved production efficiency. It now appears
that higher levels of capacity utilisation are not resulting in lower profits or
rising prices, in contrast to the experience in previous cycles.
Further easing of interest rates by the Federal Reserve is anticipated by
the stock market and will probably occur after the resolution of the Budget
impasse. Credit Card debt problems are becoming apparent, but may prove less of
a problem than in the past. Earnings growth has probably peaked and the
historically very high current rates of returns enjoyed by US companies are not
likely to continue. Nevertheless while we believe fairly high short-term
volatility should be expected, in the longer term the outlook for the US stock
market is good.
- --------------------------------------------------------------------------------
On 14th December, 1995, the Board of Directors of the Fund approved a 10 for 1
stock split which was effected in the form of a stock dividend of 9 shares. In
addition, in connection with the dividend, as of 19th December, 1995 the net
asset value of the Fund was reduced to one-tenth of its net asset value
immediately prior to the stock dividend.
-34-
<PAGE>
- --------------------------------------------------------------------------------
GAMERICA CAPITAL FUND -- STATEMENT OF INVESTMENTS
- --------------------------------------------------------------------------------
AS OF DECEMBER, 1995
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ FUND
-----------------------------------------------------------------
EQUITIES
BEVERAGES & TOBACCO
2,000 American Brands 89,250 2.95
--------- ------
89,250 2.95
--------- ------
BUSINESS & PUBLIC SERVICES
*10,000 Regency Health Services 101,250 3.34
*26,400 Titan Corp. 188,100 6.21
--------- ------
289,350 9.55
--------- ------
CONSTRUCTION & HOUSING
*12,500 Palm Harbor Homes 271,875 8.98
--------- ------
271,875 8.98
--------- ------
DATA PROCESSING & REPRODUCTION
*8,000 SyQuest Technology 80,000 2.64
--------- ------
80,000 2.64
--------- ------
ELECTRICAL & ELECTRONICS
5,000 AVX Corp. 132,500 4.38
*10,000 Jabil Circuit 112,500 3.71
--------- ------
245,000 8.09
--------- ------
ENERGY SOURCES
3,000 Unocal 87,375 2.88
--------- ------
87,375 2.88
--------- ------
FOOD & HOUSEHOLD PRODUCTS
5,000 Archer-Daniels-Midland 90,000 2.97
4,000 H.J. Heinz 132,500 4.38
--------- ------
222,500 7.35
--------- ------
HEALTH & PERSONAL CARE
10,000 Intimate Brands A 150,000 4.95
*30,000 Unilab 80,625 2.66
--------- ------
230,625 7.61
--------- ------
INDUSTRIAL COMPONENTS
*15,000 Foamex International 110,625 3.65
--------- ------
110,625 3.65
--------- ------
INSURANCE
10,000 Life Partners Group 136,250 4.50
3,000 USLIFE 89,625 2.96
--------- ------
225,875 7.46
--------- ------
MERCHANDISING
*8,000 Best Buy 130,000 4.29
10,000 Fred's A 75,000 2.48
2,000 Mercantile Stores 92,500 3.05
--------- ------
297,500 9.82
--------- ------
TELECOMMUNICATIONS
*3,000 WorldCom 105,750 3.49
--------- ------
105,750 3.49
--------- ------
TOTAL EQUITIES (COST $2,255,772) 2,255,725 74.47
--------- ------
SHORT-TERM INVESTMENTS
2,000,000 Toronto-Dominion 5.87%
Time Deposit
1996-01-02 2,000,000 66.02
--------- ------
2,000,000 66.02
--------- ------
TOTAL SHORT-TERM INVESTMENTS
(COST $2,000,000) 2,000,000 66.02
--------- ------
TOTAL INVESTMENTS (COST $4,255,772**) 4,255,725 140.49
--------- ------
NET CURRENT ASSETS (1,226,469) (40.49)
--------- ------
TOTAL NET ASSETS 3,029,256 100.00
========= ======
* Non-income producing security.
**Cost for federal income tax purposes is identical.
See notes to financial statements.
-35-
<PAGE>
- --------------------------------------------------------------------------------
GAM FUNDS, INC. -- PORTFOLIO ANALYSIS
- --------------------------------------------------------------------------------
AS AT 31ST DECEMBER, 1995
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
GAM GAM GAM GAM
GAM GAM GAM Pacific Japan North Asian GAMerica
International Global Europe Basin Capital America Capital Capital
% % % % % % % %
--------------------------------------------------------------------------------------------
ANALYSIS, BY GEOGRAPHICAL AREA:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Australia - - - 9.94 - - 1.76 -
China 1.27 - - - - - 3.90 -
France 8.22 3.73 25.26 - - - - -
Germany 29.15 21.26 7.19 - - - - -
Hong Kong 0.32 1.83 - 3.83 - - 11.96 -
Indonesia - - - 5.88 - - 11.08 -
Italy - - 3.45 - - - - -
Japan 10.60 10.31 - 28.82 85.65 - - -
Korea - - - 6.88 - - 6.62 -
Netherlands 9.69 15.87 13.42 - - - - -
New Zealand 0.61 - - 3.15 - - 11.42 -
Singapore 2.38 3.50 - 8.40 - - 7.76 -
Spain 0.89 - 5.30 - - - - -
Sweden - - 1.80 - - - - -
Switzerland 10.70 7.29 7.69 - - - - -
Taiwan - - - 1.76 - - 15.61 -
Thailand - - - 9.31 - - 17.71 -
United Kingdom 14.36 8.18 19.76 - - - - -
United States 3.97 23.87 - - - 100.46 - 74.47
Short-Term Investments 5.19 - 8.27 14.24 2.94 - 5.40 -
Other Areas - - 5.62 3.31 - - 2.53 66.02
Other\Net current assets 2.65 4.16 2.24 4.48 11.41 (0.46) 4.25 (40.49)
ANALYSIS, BY SECTOR:
Aerospace & Military Technology - 1.49 - - - - - -
Appliances & Household Durables 1.12 1.33 - 2.49 2.53 - 1.75 -
Automobiles - - 1.12 2.25 1.64 2.83 1.08 -
Banking 7.29 9.83 9.33 14.95 0.33 5.53 13.02 -
Beverages/Tobacco 1.49 4.16 1.79 0.58 3.68 16.97 1.12 2.95
Broadcasting & Publishing 2.10 3.67 5.28 0.47 - 1.45 - -
Building Materials & Components - 1.40 1.17 2.48 - - - -
Business & Public Services 4.76 1.36 5.32 3.47 3.12 0.15 2.43 9.55
Chemicals 1.27 0.88 3.57 - 0.32 6.35 6.49 -
Construction & Housing 0.35 2.17 1.84 - 3.76 - - 8.98
Data Processing & Reproduction 1.69 1.05 - - - - 3.78 2.64
Electrical & Electronics 4.83 7.11 0.64 7.20 13.72 5.94 7.26 8.09
Electronic Comp & Instruments - 2.81 - 1.34 1.08 5.26 2.97 -
Energy Sources - - 6.64 4.15 - 7.09 - 2.88
Financial Services 2.05 4.49 - 5.21 9.46 2.08 2.68 -
Fixed Interest 50.63 33.19 0.45 - - - - -
Food & Household Products 1.02 - - 0.59 - 7.18 0.69 7.35
Forest Products & Paper - - - - - 1.27 1.83 -
Gold Mines - - - 1.64 - - - -
</TABLE>
-36-
<PAGE>
- --------------------------------------------------------------------------------
GAM FUNDS, INC. -- PORTFOLIO ANALYSIS (CONTINUED)
- --------------------------------------------------------------------------------
AS AT 31ST DECEMBER, 1995
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
GAM GAM GAM GAM
GAM GAM GAM Pacific Japan North Asian GAMerica
International Global Europe Basin Capital America Capital Capital
% % % % % % %
--------------------------------------------------------------------------------------------
ANALYSIS BY SECTOR, (CONTINUED):
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Health & Personal Care 4.56 7.41 6.98 1.04 8.02 19.84 - 7.61
Index Futures (0.24) (0.30) - - - - - -
Industrial Components 0.14 0.30 - 1.13 1.82 - - 3.65
Insurance 3.38 5.34 - 1.54 5.67 1.63 4.11 7.46
Investment Funds - - - - - - 6.06 -
Leisure & Tourism - 1.37 - 1.54 - 1.48 4.09 -
Machinery & Engineering - - 9.42 1.19 7.36 - 1.04 -
Merchandising - 1.42 10.83 5.39 7.27 6.20 - 9.82
Metals - Non-Ferrous 1.23 - - 3.35 - - - -
Metals - Steel - - - 0.29 - - 1.81 -
Misc. Materials & Commodities - - - 1.76 - - 6.72 -
Multi-Industry 1.07 1.31 8.86 4.14 - 3.65 3.43 -
Real Estate - - 1.57 5.23 5.65 - 2.51 -
Recreation, Other Consumer Goods 0.77 1.12 - 2.54 5.73 1.68 - -
Short-Term Investments 5.19 - 8.27 14.24 2.94 - 5.40 66.02
Telecommunications 0.74 1.98 9.76 4.07 2.31 1.41 3.45 3.49
Transportation - Airlines - - - - - - 4.21 -
Transportation - Road & Rail 1.16 - - 0.39 0.08 2.47 - -
Transportation - Shipping - - - - - - 2.10 -
Utilities - Electrical & Gas 0.32 0.95 4.92 0.86 - - 2.38 -
Wholesale & International Trade 0.43 - - - 2.10 - 3.34 -
Other\Net current assets 2.65 4.16 2.24 4.48 11.41 (0.46) 4.25 (40.49)
ANALYSIS, BY INVESTMENT:
Equities 36.21 58.50 88.09 76.24 84.17 100.46 79.03 74.47
Bonds 46.94 28.39 - - - - - -
Convertibles 2.87 1.36 0.45 3.25 - - 5.07 -
Futures (0.24) (0.30) - - - - - -
Equity Warrants - - - 1.79 1.15 - 0.19 -
Short-Term Investments 5.19 - 8.27 14.24 2.94 - 5.40 -
Options 1.71 2.06 - - - - - 66.02
Bond Warrants 1.98 2.74 - - - - - -
Adjustable Rate Index Notes 1.14 1.03 0.95 - 0.33 - - -
Equity Funds - - - - - - 6.06 -
Preferred Shares 1.55 2.06 - - - - - -
Other\Net current assets 2.65 4.16 2.24 4.48 11.41 (0.46) 4.25 (40.49)
</TABLE>
-37-
<PAGE>
- --------------------------------------------------------------------------------
GAM FUNDS, INC. -- STATEMENTS OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
AT 31ST DECEMBER, 1995
<TABLE>
<CAPTION>
GAM
GAM GAM GAM Pacific
International Global Europe Basin
-----------------------------------------------------------
ASSETS (in US$)
<S> <C> <C> <C> <C>
Investments in securities at value $555,224,270 $25,434,320 $22,447,862 $53,007,977
Cash 68,890 - 8,711 49,984
Cash - Foreign currencies 558,943 28,574 439,444 494,963
Call deposits - - 80,000 829,029
Receivables:
Securities sold 3,979,729 204,435 157,971 125,483
Capital shares sold 11,215,486 408,781 - 683,909
Dividends, interest and other 14,781,540 490,779 133,033 70,699
Net equity in foreign currency
exchange contracts (Note 5) 5,195,977 129,455 - 1,825,145
Due from broker for futures contracts (Note 5) 1,103,963 64,749 - -
------------ ----------- ----------- -----------
TOTAL ASSETS 592,128,798 26,761,093 23,267,021 57,087,189
------------ ----------- ----------- -----------
LIABILITIES
Payables:
Securities purchased 17,710,812 - - 205,773
Capital shares redeemed 3,484,689 32,203 79,387 1,078,167
Due to Custodian - 123,812 - -
Net equity in foreign currency
exchange contracts (Note 5) - - 91,686 -
Accrued expenses and other 1,985,252 149,326 134,515 311,844
------------ ----------- ----------- -----------
TOTAL LIABILITIES 23,180,753 305,341 305,588 1,595,784
------------ ----------- ----------- -----------
NET ASSETS $568,948,045 $26,455,752 $22,961,433 $55,491,405
============ =========== =========== ===========
SOURCE OF NET ASSETS
Net capital paid in on shares of capital stock $528,453,897 $23,558,567 $22,191,365 $50,808,692
Accumulated net investment income/(loss) (43,392) (4,787) 11,543 (30,461)
Accumulated net realized gains/(losses) (10,356,368) (665,695) (772,747) (1,547,026)
Net unrealized appreciation/(depreciation) 50,893,908 3,567,667 1,531,272 6,260,200
------------ ----------- ----------- -----------
NET ASSETS $568,948,045 $26,455,752 $22,961,433 $55,491,405
============ =========== =========== ===========
CLASS A SHARES OUTSTANDING 26,210,037 1,936,065 2,286,870 3,177,928
CLASS A NET ASSETS $560,233,652 $26,160,917 $22,961,433 $53,944,521
Net asset value per share (Note 3) $21.37 $13.51 $10.04 $16.97
Offering price per share (100/95 x net asset value
per share reduced on sales of $100,000 or more) $22.49 $14.22 $10.57 $17.86
CLASS D SHARES OUTSTANDING 408,164 21,880 N/A 91,183
CLASS D NET ASSETS $8,714,393 $294,835 N/A $1,546,884
Net asset value per share (Note 3) $21.35 $13.48 N/A $16.96
Offering price per share (100/96.5 x net asset value
per share reduced on sales of $100,000 or more) $22.12 $13.97 N/A $17.58
See notes to financial statements.
-38-
<PAGE>
- --------------------------------------------------------------------------------
GAM FUNDS, INC. -- STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED)
- --------------------------------------------------------------------------------
AT 31ST DECEMBER, 1995
GAM GAM GAM
Japan North Asian GAMerica
Capital America Capital Capital
----------------------------------------------------------
ASSETS (in US$)
Investments in securities at value $12,048,382 $6,008,159 $5,323,911 $4,255,725
Cash 8,736 11,436 10,285 -
Cash - Foreign currencies 202,610 - 72,014 -
Call deposits 713,836 - 47,000 44,000
Receivables:
Securities sold - - 82,594 -
Capital shares sold 107,617 - 18,997 -
Dividends, interest and other 2,093 12,478 4,642 1,197
Due from adviser 15,510 - - -
Net equity in foreign currency
exchange contracts (Note 5) 529,753 - - -
Deferred organizational expenses and other assets 23,894 - 37,298 37,418
------------ ----------- ----------- -----------
TOTAL ASSETS 13,652,431 6,032,073 5,596,741 4,338,340
------------ ----------- ----------- -----------
LIABILITIES
Payables:
Securities purchased - - - 523,915
Capital shares redeemed 860 4,342 100 -
Due to Custodian - - - 764,150
Accrued expenses and other 51,568 46,977 36,226 21,019
------------ ----------- ----------- -----------
TOTAL LIABILITIES 52,428 51,319 36,326 1,309,084
------------ ----------- ----------- -----------
NET ASSETS $13,600,003 $5,980,754 $5,560,415 $3,029,256
============ =========== =========== ===========
SOURCE OF NET ASSETS
Net capital paid in on shares of capital stock $13,750,929 $4,771,497 $5,772,406 $3,028,471
Accumulated net investment income/(loss) (135,627) 323 (4,819) 832
Accumulated net realized gains/(losses) (1,054,318) - (6,018) -
Net unrealized appreciation/(depreciation) 1,039,019 1,208,934 (201,154) (47)
------------ ----------- ----------- -----------
NET ASSETS $13,600,003 $5,980,754 $5,560,415 $3,029,256
============ =========== =========== ===========
CLASS A SHARES OUTSTANDING 1,338,243 501,427 583,625 302,061
CLASS A NET ASSETS $13,600,003 $5,980,754 $5,560,415 $3,029,256
Net asset value per share (Note 3) $10.16 $11.93 $9.53 $10.03
Offering price per share (100/95 x net asset value
per share reduced on sales of $100,000 or more) $10.69 $12.56 $10.03 $10.56
See notes to financial statements.
</TABLE>
-39-
<PAGE>
- --------------------------------------------------------------------------------
GAM FUNDS, INC. -- STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
FOR THE YEAR ENDED 31ST DECEMBER, 1995
<TABLE>
<CAPTION>
GAM
GAM GAM GAM Pacific
International Global Europe Basin
-----------------------------------------------------------
INVESTMENT INCOME (in US$)
<S> <C> <C> <C> <C>
Dividends (Note 4) $1,749,621 $174,920 $409,319 $530,717
Interest (Note 4) 15,122,785 891,097 172,788 259,030
------------ ----------- ----------- -----------
16,872,406 1,066,017 582,107 789,747
------------ ----------- ----------- -----------
EXPENSES
Investment advisory fee (Note 2) 3,085,111 208,022 203,030 414,221
Custodian fees and expenses 662,468 83,503 111,953 174,383
Transfer agent fees and expenses 264,577 13,791 11,581 27,763
Shareholder servicing fees 217,457 2,968 3,326 24,756
Distribution fee - Class D (Note 2) 4,076 189 - 425
Professional fees 154,741 39,007 29,035 50,747
Administrative expenses 153,403 14,186 9,079 23,110
Printing 127,183 13,626 17,301 34,880
Amortization of organization costs - - - -
Filing fees 102,525 27,554 20,386 36,424
Other 29,586 20,139 716 9,204
------------ ----------- ----------- -----------
Total operating expenses 4,801,127 422,985 406,407 795,913
Expenses reimbursed (Note 2) - - - -
Interest expense 57,110 27,447 23,844 24,295
------------ ----------- ----------- -----------
Total expenses 4,858,237 450,432 430,251 820,208
------------ ----------- ----------- -----------
Net investment income/(loss) 12,014,169 615,585 151,856 (30,461)
------------ ----------- ----------- -----------
REALIZED AND UNREALIZED
GAIN/(LOSS) FROM INVESTMENTS
AND FOREIGN CURRENCY
Net realized gain / (loss) from:
Securities and futures (1,726,295) 250,487 812,054 4,115,390
Foreign currency transactions 5,712,853 750,777 343,122 (789,630)
------------ ----------- ----------- -----------
3,986,558 1,001,264 1,155,176 3,325,760
------------ ----------- ----------- -----------
Unrealized appreciation/(depreciation) for the period:
Securities and futures 50,363,414 4,067,945 1,455,702 (4,038,939)
Foreign currency translation of
assets and liabilities other than investments 5,344,352 148,294 (89,933) 1,401,389
------------ ----------- ----------- -----------
55,707,766 4,216,239 1,365,769 (2,637,550)
------------ ----------- ----------- -----------
Net gain/(loss) on investments and foreign currencies 59,694,324 5,217,503 2,520,945 688,210
------------ ----------- ----------- -----------
NET INCREASE/(DECREASE) IN NET ASSETS FROM OPERATIONS $71,708,493 $5,833,088 $2,672,801 $657,749
============ ========== =========== ===========
See notes to financial statements.
-40-
<PAGE>
- --------------------------------------------------------------------------------
GAM FUNDS, INC. -- STATEMENTS OF OPERATIONS (CONTINUED)
- --------------------------------------------------------------------------------
FOR THE YEAR ENDED 31ST DECEMBER, 1995
GAM GAM GAM
Japan North Asian GAMerica
Capital America Capital* Capital*
----------------------------------------------------------
INVESTMENT INCOME (in US$)
Dividends (Note 4) $21,489 $89,552 $35,939 $1,450
Interest (Note 4) 50,987 27,148 47,363 80,985
------------ ----------- ----------- -----------
72,476 116,700 83,302 82,435
------------ ----------- ----------- -----------
EXPENSES
Investment advisory fee (Note 2) 57,489 38,934 28,041 16,082
Custodian fees and expenses 98,849 33,513 25,374 8,095
Transfer agent fees and expenses 4,802 3,625 2,899 1,539
Shareholder servicing fees 1,102 411 544 238
Distribution fee - Class D (Note 2) - - - -
Professional fees 34,166 14,697 11,749 8,609
Administrative expenses 5,125 3,896 3,797 3,032
Printing 9,124 15,924 5,000 5,000
Amortization of organization costs 6,829 - 3,767 3,751
Filing fees 30,559 15,856 27,768 27,729
Other 15,024 750 2,852 2,403
------------ ----------- ----------- -----------
Total operating expenses 263,069 127,606 111,791 76,478
Expenses reimbursed (Note 2) (57,489) (11,534) (23,670) (16,082)
Interest expense 2,324 283 - -
------------ ----------- ----------- -----------
Total expenses 207,904 116,355 88,121 60,396
------------ ----------- ----------- -----------
Net investment income/(loss) (135,428) 345 (4,819) 22,039
------------ ----------- ----------- -----------
REALIZED AND UNREALIZED
GAIN/(LOSS) FROM INVESTMENTS
AND FOREIGN CURRENCY
Net realized gain/(loss) from:
Securities and futures (717,454) 18,699 20,137 12,000
Foreign currency transactions (244,544) - (192) -
------------ ----------- ----------- -----------
(961,998) 18,699 19,945 12,000
------------ ----------- ----------- -----------
Unrealized appreciation/(depreciation) for the period:
Securities and futures 777,647 1,023,284 (201,351) (47)
Foreign currency translation of
assets and liabilities other than investments 488,677 - 197 -
------------ ----------- ----------- -----------
1,266,324 1,023,284 (201,154) (47)
------------ ----------- ----------- -----------
Net gain/(loss) on investments and foreign currencies 304,326 1,041,983 (181,209) 11,953
------------ ----------- ----------- -----------
NET INCREASE/(DECREASE) IN NET ASSETS FROM OPERATIONS $168,898 $1,042,328 ($186,028) $33,992
============ =========== =========== ===========
</TABLE>
* Period from 12th May, 1995 (Commencement of Operations) to 31st December,
1995.
See notes to financial statements.
-41-
<PAGE>
- --------------------------------------------------------------------------------
GAM FUNDS, INC. -- STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GAM INTERNATIONAL GAM GLOBAL GAM EUROPE
------------------------------ ---------------------------- ------------------------------
For the year For the year For the year For the year For the year For the year
ended ended ended ended ended ended
31st Dec., 31st Dec., 31st Dec., 31st Dec., 31st Dec., 31st Dec.,
1995 1994 1995 1994 1995 1994
-----------------------------------------------------------------------------------------------
INCREASE/(DECREASE) IN NET
ASSETS FROM:
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income/(loss) $12,014,169 $3,406,470 $615,585 $218,855 $151,856 $14,166
Net realized gain/(loss) 3,986,558 10,692,789 1,001,264 3,544,163 1,155,176 1,064,626
Unrealized appreciation/
(depreciation) for the year 55,707,766 (23,830,787) 4,216,239 (9,078,779) 1,365,769 (2,411,653)
------------ ------------ ----------- ----------- ----------- -----------
Net increase/(decrease) in
net assets from operations 71,708,493 (9,731,528) 5,833,088 (5,315,761) 2,672,801 (1,332,861)
Dividends paid to shareholders from:
Net investment income
Class A (11,449,364) (4,836,623) (524,618) (788,657) (137,849) -
Class D (164,760) - (6,086) - - -
Net realized gain on investments
Class A (12,880,231) (21,593,171) (1,107,972) (6,561,350) (14,596) -
Class D (189,648) - (13,417) - - -
Return of capital - (3,227) - - - -
Capital share transactions
(Note 3) 363,587,999 113,723,728 2,334,999 (810,150) (11,791,785) 19,167,566
------------ ------------ ----------- ----------- ----------- -----------
Total increase/(decrease)
in net assets 410,612,489 77,559,179 6,515,994 (13,475,918) (9,271,429) 17,834,705
NET ASSETS
Beginning of year 158,335,556 80,776,377 19,939,758 33,415,676 32,232,862 14,398,157
------------ ------------ ----------- ----------- ----------- -----------
End of year $568,948,045 $158,335,556 $26,455,752 $19,939,758 $22,961,433 $32,232,862
============ ============ =========== =========== =========== ===========
See notes to financial statements.
</TABLE>
-42-
<PAGE>
- --------------------------------------------------------------------------------
GAM FUNDS, INC. -- STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GAM Pacific Basin GAM Japan Capital GAM North America
-------------------------------- ----------------------------- ---------------------------
For the year For the year For the year For the period For the year For the year
ended ended ended ended ended ended
31st Dec., 31st Dec., 31st Dec., 31st Dec., 31st Dec., 31st Dec.,
1995 1994 1995 1994** 1995 1994
--------------------------------------------------------------------------------------------
INCREASE/(DECREASE) IN NET
ASSETS FROM:
Operations
<S> <C> <C> <C> <C> <C> <C>
Net investment income/(loss) ($30,461) ($162,602) ($135,428) $22,229 $345 $7,657
Net realized gain/(loss) 3,325,760 3,133,089 (961,998) (80,042) 18,699 36,809
Unrealized appreciation/
(depreciation) for the period (2,637,550) (278,802) 1,266,324 (227,305) 1,023,284 (14,068)
----------- ----------- ----------- ---------- ---------- ----------
Net increase/(decrease) in
net assets from operations 657,749 2,691,685 168,898 (285,118) 1,042,328 30,398
Dividends paid to shareholders from:
Net investment income
Class A - - (22,428) - (22) (55,330)
Class D - - - - - -
Net realized gain on investments
Class A (4,120,556) (6,954,008) (12,278) - (18,699) (942,723)
Class D (69,502) - - - - -
Return of capital - - - - - (466)
Capital share transactions (Note 3) 10,496,400 12,070,396 4,059,662 9,691,267 3,070,513 (433,747)
----------- ----------- ----------- ---------- ---------- ----------
Total increase/(decrease)
in net assets 6,964,091 7,808,073 4,193,854 9,406,149 4,094,120 (1,401,868)
NET ASSETS
Beginning of period 48,527,314 40,719,241 9,406,149 - 1,886,634 3,288,502
----------- ----------- ----------- ---------- ---------- ----------
End of period $55,491,405 $48,527,314 $13,600,003 $9,406,149 $5,980,754 $1,886,634
=========== =========== =========== ========== ========== ==========
</TABLE>
** Period from 1st July, 1994 (Inception) to 31st December, 1994.
See notes to financial statements.
-43-
<PAGE>
- --------------------------------------------------------------------------------
GAM FUNDS, INC. -- STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
GAM Asian Capital+ GAMerica Capital+
------------------ -----------------
For the period For the period
ended ended
31st Dec., 31st Dec.,
1995 1995
---------------------------------------
INCREASE/(DECREASE) IN NET
ASSETS FROM:
Operations
Net investment income/(loss) ($4,819) $22,039
Net realized gain/(loss) 19,945 12,000
Unrealized appreciation/
(depreciation) for the period (201,154) (47)
----------- -----------
Net increase/(decrease) in
net assets from operations (186,028) 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 - -
Capital share transactions (Note 3) 5,772,406 3,028,471
----------- -----------
Total increase/(decrease)in net assets 5,560,415 3,029,256
NET ASSETS
Beginning of period - -
----------- -----------
End of period $5,560,415 $3,029,256
=========== ===========
+ Period from 12th May, 1995 (Commencement of Operations) to 31st December,
1995.
See notes to financial statements.
-44-
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
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 nine
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, GAMerica Capital Fund and GAM Mid-Cap U.S. Fund (the `Funds'). GAM
Asian Capital Fund and GAMerica Capital Fund each commenced operations on 12th
May, 1995. GAM Mid-Cap U.S. Fund became effective with the Securities and
Exchange Commission in September 1995 and as of 31st December, 1995, had not
commenced operations.
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 objective of GAM
Mid-Cap U.S. Fund is to invest primarily in securities in the United States with
medium market capitalization.
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. 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'
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.
-45-
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
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 shareholders 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
effect the reported amount of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of increases and decreases in net assets from operations
during the reporting period. Actual results could differ from those estimates.
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 and GAM Mid-Cap U.S.
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
-46-
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
of the Fund's average daily net assets. With respect to GAM Mid-Cap U.S. Fund,
GAM International Management Limited and Forstmann-Leff Associates, Inc. serve
as co-investment advisers to the Fund. Upon commencement of operations, each
such co-adviser will receive 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 period ended 31st December, 1995 are set forth in the
Statement of Operations.
GAM Services, Inc. acts as principal underwriter of the Fund. For the year ended
31st December, 1995, GAM Services, Inc. received front-end sales load charges of
$1,668,969 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 31st December, 1995 GAM Funds, Inc. had 400,000,000 shares of common stock,
$0.001 par value authorized which were allocated to each Fund as follows:
40,000,000 and 25,000,000 shares respectively, were allocated to each of Class A
and Class D of Gam International Fund, 25,000,000 shares were allocated to each
of Class A and Class D of GAM Global, GAM Pacific Basin, GAM Europe, GAM North
America and GAMerica Capital Funds, 12,500,000 shares were allocated to each of
Class A and Class D of GAM Japan Capital and GAM Asian Capital Funds, while
17,500,000 shares were allocated to each of Class A and Class D of GAM Mid-Cap
U.S. Fund. Changes in each Fund's capital stock are summarized as follows:
<TABLE>
<CAPTION>
GAM INTERNATIONAL
FOR THE PERIODS
--------------------------------------------------------------------
01-JAN-95 TO 31-DEC-95 01-JAN-94 TO 31-DEC-94
SHARES US$ SHARES US$
---------- ----------- ------- -----------
CLASS A
<S> <C> <C> <C> <C>
Shares sold 3,534,378 442,230,411 673,408 133,062,350
Shares issued on reinvestment
of dividends 1,043,909 22,078,675 124,534 22,991,860
Shares issued on 10-for-1 split 21,450,499 - - -
Shares redeemed (739,009) (109,514,578) (215,625) (42,330,482)
---------- ----------- ------- -----------
Net increase 25,289,777 354,794,508 582,317 113,723,728
========== =========== ======= ===========
CLASS D*
Shares sold 112,790 8,456,005 - -
Shares issued on reinvestment
of dividends 16,239 342,978 - -
Shares issued on 10-for-1 split 279,205 - -
Shares redeemed (70) (5,492) - -
---------- ----------- ------- -----------
Net increase 408,164 8,793,491 - -
========== =========== ======= ===========
</TABLE>
- ----------
*Class D shares were offered for sale on 5th September, 1995.
-47-
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GAM Global
For the Periods
------------------------------------------------------
01-Jan-95 to 31-Dec-95 01-Jan-94 to 31-Dec-94
Shares US$ Shares US$
------ --- ------ ---
Class A
<S> <C> <C> <C> <C>
Shares sold 176,192 14,991,450 25,861 4,093,862
Shares issued on reinvestment
of dividends 107,361 1,440,975 47,049 5,673,841
Shares issued on 10-for-1 split 1,595,905 - - -
Shares redeemed (131,581) (14,398,980) (71,172) (10,577,853)
---------- ----------- ------- -----------
Net increase/(decrease) 1,747,877 2,033,445 1,738 (810,150)
========== =========== ======= ===========
Class D*
Shares sold 2,161 297,998 - -
Shares issued on reinvestment
of dividends 267 3,556 - -
Shares issued on 10-for-1 split 19,452 - - -
Shares redeemed - - - -
---------- ----------- ------- -----------
Net increase/(decrease) 21,880 301,554 - -
========== =========== ======= ===========
</TABLE>
- --------------------------------------------------------------------------------
* Class D shares were offered for sale on 5th September, 1995
<TABLE>
<CAPTION>
GAM Europe
For the Periods
------------------------------------------------------
01-Jan-95 to 31-Dec-95 01-Jan-94 to 31-Dec-94
Shares US$ Shares US$
------ --- ------ ---
Class A
<S> <C> <C> <C> <C>
Shares sold 233,600 21,831,710 219,737 19,930,780
Shares issued on reinvestment
of dividends 11,967 118,597 - -
Shares issued on 10-for-1 split 2,085,855 - - -
Shares redeemed (416,953) (33,742,092) (8,514) (763,214)
---------- ----------- -------- -----------
Net increase/(decrease) 1,914,469 (11,791,785) 211,223 19,167,566
========== =========== ======== ===========
</TABLE>
-48-
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GAM Pacific Basin
For the Periods
------------------------------------------------------
01-Jan-95 to 31-Dec-95 01-Jan-94 to 31-Dec-94
Shares US$ Shares US$
------ --- ------ ---
CLASS A
<S> <C> <C> <C> <C>
Shares sold 498,192 40,004,218 95,832 18,416,777
Shares issued on reinvestment
of dividends 131,648 3,512,026 28,481 5,076,260
Shares issued on 10-for-1 split 2,569,309 - - -
Shares redeemed (296,598) (34,613,472) (60,988) (11,422,641)
---------- ----------- -------- -----------
Net increase/(decrease) 2,902,551 8,902,772 63,325 12,070,396
========== =========== ======== ===========
CLASS D*
Shares sold 8,706 1,524,125 - -
Shares issued on reinvestment
of dividends 4,120 69,503 - -
Shares issued on 10-for-1 split 78,357 - - -
Shares redeemed - - - -
---------- ----------- -------- -----------
Net increase/(decrease) 91,183 1,593,628 - -
========== =========== ======== ===========
</TABLE>
- --------------------------------------------------------------------------------
* Class D shares were offered for sale on 5th September, 1995.
<TABLE>
<CAPTION>
GAM Japan Capital
For the Periods
------------------------------------------------------
01-Jan-95 to 31-Dec-95 01-Jan-94 to 31-Dec-94
Shares US$ Shares US$
------ --- ------ ---
Class A
<S> <C> <C> <C> <C>
Shares 161,092 12,534,772 99,477 9,857,475
Shares issued on reinvestment
of dividends 262 24,645 - -
Shares issued on 10-for-1 split 1,190,830 - - -
Shares redeemed (111,683) (8,499,755) (1,735) (166,208)
---------- ----------- -------- -----------
Net increase/(decrease) 1,240,501 4,059,662 97,742 9,691,267
========== =========== ======== ===========
</TABLE>
-49-
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GAM North America
For the Periods
-----------------------------------------------
01-Jan-95 to 31-Dec-95 01-Jan-94 to 31-Dec-94
Shares US$ Shares US$
------- -------- ------ --------
<S> <C> <C> <C> <C>
CLASS A
Shares sold 37,084 3,775,544 561 50,752
Shares issued on reinvestment
of dividends 1,246 14,805 8,596 779,731
Shares issued on 10-for-1 split 463,269 - - -
Shares redeemed (20,808) (719,836) (14,220) (1,264,230)
------- -------- ------- ----------
Net increase/(decrease) 480,791 3,070,513 (5,063) (433,747)
======= ========= ====== ========
</TABLE>
<TABLE>
<CAPTION>
GAM Asian Capital GAMerica Capital
For the Period For the Period
-------------------------------------------------
12-May-95+ to 31-Dec-95 12-May-95+ to 31-Dec-95
Shares US$ Shares US$
------- --------- ------- ---------
CLASS A
<S> <C> <C> <C> <C>
Shares sold 70,020 6,737,939 32,077 3,216,219
Shares issued on reinvestment
of dividends 2,417 22,746 2,464 24,562
Shares issued on 10-for-1 split 529,049 - 279,569 -
Shares redeemed (17,861) (988,279) (12,049) (212,310)
------- -------- ------- --------
Net increase/(decrease) 583,625 5,772,406 302,061 3,028,471
======= ========= ======= =========
</TABLE>
- ----------
+ Commencement of operations.
-50-
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
NOTE 4. INVESTMENT TRANSACTIONS
The cost of purchases and proceeds of sales of investment securities for the
period ended 31st December, 1995 excluding short-term securities, were as
follows:
<TABLE>
<CAPTION>
GAM GAM GAM GAM
GAM GAM GAM Pacific Japan North Asian GAMerica
International Global Europe Basin Capital America Capital Capital
-----------------------------------------------------------------------------------------------------------
In US$
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Purchases $436,459,082 $19,664,390 $25,300,002 $24,118,168 $11,298,950 $3,544,522 $5,717,620 $2,297,272
Sales 93,614,213 10,668,797 33,871,214 26,722,236 5,571,807 297,758 510,238 53,500
</TABLE>
Realized gains and losses are reported on an identified cost basis. At 31st
December, 1995, the aggregate gross unrealized appreciation and depreciation of
securities, based on cost for federal income tax purposes, were as follows:
<TABLE>
<CAPTION>
GAM GAM GAM GAM
GAM GAM GAM Pacific Japan North Asian GAMerica
International Global Europe Basin Capital America Capital Capital
-----------------------------------------------------------------------------------------------------------
In US$
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Appreciation $52,141,307 $3,967,815 $2,216,781 $6,217,568 $667,134 $1,236,180 $240,015 $79,875
Depreciation (5,832,091) (515,310) (626,941) (2,207,933) (321,705) (27,246) (451,466) (79,922)
------------ ----------- ----------- ----------- --------- ----------- --------- --------
Net $46,309,216 $3,452,505 $1,589,840 $4,009,635 $345,429 $1,208,934 $(211,451) $(47)
============ =========== =========== =========== ========= =========== ========= ========
</TABLE>
At 31st December, 1995, the Funds had tax basis net capital losses as follows.
These losses may be carried over to offset future capital gains through the
expiration dates shown:
<TABLE>
<CAPTION>
GAM GAM GAM GAM
GAM GAM GAM Pacific Japan North Asian GAMerica
International Global Europe Basin Capital America Capital Capital
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
In US$ $6,095,355 $529,169 $1,067,507 - $804,246 - - -
Carryforward 31st Dec, 31st Dec, 31st Dec, - 31st Dec, - - -
Expiration dates 2003 2003 1998-2000 - 2003 - - -
</TABLE>
Foreign taxes withheld from dividends and interest for the period ended 31st
December, 1995, were as follows:
<TABLE>
<CAPTION>
GAM GAM GAM GAM
GAM GAM GAM Pacific Japan North Asian GAMerica
International Global Europe Basin Capital America Capital Capital
-----------------------------------------------------------------------------------------------------------
In US$
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Dividends $248,387 $19,751 $62,665 $70,418 $3,792 - $6,972 -
Interest - 2,214 9 - - - - -
</TABLE>
-51-
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
NOTE 5. FINANCIAL INSTRUMENTS
During the period, several of the Funds had been a party to financial
instruments with off-balance sheet risks, including forward foreign currency
contracts and futures contracts, primarily in an attempt to minimize the risk to
the Fund, in respect of its portfolio transactions. These instruments involve
market and/or credit risk in excess of the amount recognized in the Statement of
Assets and Liabilities. Risks arise from the possible inability of
counterparties to meet the terms of their contracts and from movement in
currency and securities values and interest rates. The contract amount indicates
the extent of the Funds' involvement in such contracts.
Forwards: When entering a forward currency contract, the Fund agrees to receive
or deliver a fixed quantity of foreign currency for an agreed upon price on an
agreed future date.
At 31st December, 1995 the Fund had outstanding forward contracts for the
purchase and sale of currencies as set out below. The contracts are reported in
the financial statements at the Fund's net equity, as measured by the difference
between the forward foreign exchange rates at the dates of entry into the
contracts and the forward rates at the reporting date, or the date an offsetting
position, if any, has been entered into.
<TABLE>
<CAPTION>
GAM INTERNATIONAL FUND
US$
<S> <C>
1,858,680,000 Japanese yen sold vs. 21,600,000 US$,
1st February, 1996 2,583,242
2,417,243,600 Japanese yen sold vs. 26,460,000 US$,
7th February, 1996 2,914,464
1,827,680,000 Japanese yen sold vs. 19,000,000 US$,
9th February, 1996 588,690
1,587,971,400 Japanese yen sold vs. 15,870,000 US$,
15th March, 1996 322,383
388,300,000 Spanish peseta sold vs. 4,400,000 German Deutsche marks,
25th January, 1996 (118,756)
168,483,600 French francs sold vs. 47,800,000 German Deutsche marks,
26th March, 1996 (1,045,977)
4,549,177 UK Pound sterling sold vs. 10,000,000 German Deutsche marks,
5th February, 1996 (79,723)
6,272,373 UK Pound sterling sold vs. 14,000,000 German Deutsche marks,
12th February, 1996 43,120
16,078,607 UK Pound sterling sold vs. 36,000,000 German Deutsche marks,
25th March, 1996 265,456
5,554,372 UK Pound sterling sold vs. 12,190,000 German Deutsche marks,
15th April, 1996 (68,296)
12,888,377 UK Pound sterling sold vs. 28,000,000 German Deutsche marks,
3rd June, 1996 (293,253)
7,270,000 German Deutsche marks bought vs. 5,000,000 US$,
6th March, 1996 84,627
---------
Net equity in foreign currency exchange contracts 5,195,977
=========
-52-
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUTED)
- --------------------------------------------------------------------------------
GAM GLOBAL FUND
US$
101,539,000 Japanese yen sold vs. 1,180,000 US$,
1st February, 1996 114,508
185,474,000 Japanese yen sold vs. 2,000,000 US$,
7th February, 1996 193,361
40,312,000 Japanese yen sold vs. 400,000 US$,
9th February, 1996 7,226
2,140,391 UK Pound sterling sold vs. 4,650,000 German Deutsche marks,
3rd June, 1996 (41,400)
5,254,350 French francs sold vs. 1,500,000 German Deutsche marks,
26th March, 1996 (24,885)
4,127,100 German Deutsche marks bought vs. 3,000,000 US$,
25th January, 1996 (119,355)
---------
Net equity in foreign currency exchange contracts 129,455
=========
GAM EUROPE FUND
US$
2,900,000 UK Pound sterling sold vs. 4,457,300 US$,
22nd March, 1996 (40,917)
12,335,000 European currency units sold vs. 15,751,178 US$,
22nd March, 1996 (50,769)
---------
Net equity in foreign currency exchange contracts (91,686)
=========
GAM PACIFIC BASIN FUND
US$
1,253,405,000 Japanese yen sold vs. 14,000,000 US$,
19th January, 1996 1,825,145
---------
Net equity in foreign currency exchange contracts 1,825,145
=========
-53-
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUTED)
- --------------------------------------------------------------------------------
GAM JAPAN CAPITAL FUND
US$
82,970,000 Japanese yen sold vs. 1,000,000 US$,
5th January, 1996 195,782
25,530,000 Japanese yen sold vs. 300,000 US$,
12th January, 1996 52,278
59,640,000 Japanese yen sold vs. 700,000 US$,
17th January, 1996 120,866
98,175,000 Japanese yen sold vs. 1,000,000 US$,
8th March, 1996 39,736
20,220,000 Japanese yen sold vs. 200,000 US$,
14th March, 1996 2,057
19,690,000 Japanese yen sold vs. 200,000 US$,
5th April, 1996 6,647
24,500,000 Japanese yen sold vs. 250,000 US$,
19th April, 1996 8,966
99,490,000 Japanese yen sold vs. 1,000,000 US$,
2nd May, 1996 19,513
49,100,000 Japanese yen sold vs. 500,000 US$,
13th May, 1996 15,404
49,400,000 Japanese yen sold vs. 500,000 US$,
15th May, 1996 12,313
98,600,000 Japanese yen sold vs. 1,000,000 US$,
12th June, 1996 22,955
134,163,000 Japanese yen sold vs. 1,350,000 US$
24th June, 1996 18,417
124,450,000 Japanese yen sold vs. 1,250,000 US$,
19th June, 1996 14,819
---------
Net equity in foreign currency exchange contracts 529,753
=========
</TABLE>
Futures: A futures contract obligates one party to sell and the other party to
purchase a specific instrument for an agreed price on an agreed future date. At
31st December, 1995, GAM International Fund and GAM Global Fund had outstanding
futures contracts as set out in their respective Statement of Investments.
-54-
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
NOTE 6. SELECTED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
PER SHARE OPERATING PERFORMANCE (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
-------------------------------------- --------------------------------------
NET REALIZED
NET NET AND DIVIDENDS DISTRIBUTIONS
ASSET VALUE, INVESTMENT UNREALIZED TOTAL FROM FROM NET FROM NET NET ASSET
BEGINNING INCOME GAIN/(LOSS) ON INVESTMENT INVESTMENT REALIZED TOTAL VALUE, END
OF PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS OF PERIOD
------------------------------------------------------------------------------------------------------------
01-JAN-95 TO
31-DEC-95
US$
GAM International
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
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
* Period from 1st July, 1994 (Inception) to 31st December, 1994.
** Period from 12th May, 1995 (Inception) to 31st December, 1995
</TABLE>
-55-
<PAGE>
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATIOS/SUPPLEMENTAL DATA
----------------------------------------------------------------
RATIO TO AVERAGE NET ASSETS BANK LOANS
--------------------------- -------------------------------------------
AVERAGE
NUMBER
AVERAGE OF SHARES AVERAGE
AMOUNT OF OUTSTANDING AMOUNT
BANK LOANS DURING OF
AMOUNTS OUTSTANDING THE DEBT
OUTSTANDING DURING PERIOD PER
TOTAL RETURN NET END OF THE (MONTHLY SHARE
(WITHOUT NET ASSETS INVESTMENT PORTFOLIO PERIOD PERIOD AVERAGE) DURING
DEDUCTION OF END OF PERIOD INCOME\ TURNOVER (000 (000 (000 THE
SALES LOAD) (000 OMITTED) EXPENSES (LOSS) RATE OMITTED) OMITTED) OMITTED) PERIOD
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1-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% - US$ 123 390 US$ 0.32
GAM Pacific Basin
Class A 4.56% 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%
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% US$ 9,557 US$ 2,042 2,700 US$ 0.76
GAM Global 75.30% US$ 33,416 2.68% 1.88% 106.73% US$ 2,165 US$ 2,600 1,780 US$ 1.48
GAM Europe 22.68% US$ 14,398 2.64% 1.05% 181.51% US$ 1,860 US$ 521 1,680 US$ 0.31
GAM Pacific Basin 51.52% US$ 40,719 1.93% (0.29)% 91.07% US$ - US$ - US$ -
GAM North America (2.09)% US$ 3,289 2.10% 0.69% 3.42% US$ - US$ - - US$ -
01-JAN-92 TO
31-DEC-92
US$
GAM International 3.08% US$ 41,032 2.03% 4.85% 109.16% US$ 2,743 US$ 901 2,790 US$ 0.32
GAM Global (4.65)% US$ 19,763 2.37% 5.25% 118.41% US$ 9,010 US$ 1,401 2,130 US$ 0.66
GAM Europe (4.91)% US$ 17,264 2.47% 5.06% 72.20% US$ 1,177 US$ 347 2,400 US$ 0.14
GAM Pacific Basin (0.37)% US$ 28,206 2.03% 0.09% 74.78% US$ - US$ - - US$ -
GAM North America 2.42% US$ 11,781 2.43% 0.47% 20.38% US$ - US$ - - US$ -
</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 4.61% for GAM Japan Capital, 3.27% for GAM North America,
3.95% for GAM Asian Capital and 4.73% for GAMerica Capital of average net
assets, respectively, for the periods ended 31st December, 1995 and 5.81% of
average net assets for GAM North America Fund for the year ended 31st
December, 1994.
-56-
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATIOS/SUPPLEMENTAL DATA
----------------------------------------------------------------
RATIO TO AVERAGE NET ASSETS BANK LOANS
--------------------------- -------------------------------------------
AVERAGE
NUMBER
AVERAGE OF SHARES AVERAGE
AMOUNT OF OUTSTANDING AMOUNT
BANK LOANS DURING OF
AMOUNTS OUTSTANDING THE DEBT
OUTSTANDING DURING PERIOD PER
TOTAL RETURN NET END OF THE (MONTHLY SHARE
(WITHOUT NET ASSETS INVESTMENT PORTFOLIO PERIOD PERIOD AVERAGE) DURING
DEDUCTION OF END OF PERIOD INCOME\ TURNOVER (000 (000 (000 THE
SALES LOAD) (000 OMITTED) EXPENSES (LOSS) RATE OMITTED) OMITTED) OMITTED) PERIOD
-------------------------------------------------------------------------------------------------------------
01-JAN-91 TO
31-DEC-91
US$
<S> <C> <C> <C> <C> <C> <C>
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 4.61% for GAM Japan Capital, 3.27% for GAM North America,
3.95% for GAM Asian Capital and 4.73% for GAMerica Capital of average net
assets, respectively, for the periods ended 31st December, 1995 and 5.81% of
average net assets for GAM North America Fund for the year ended 31st
December, 1994.
-57-
<PAGE>
- --------------------------------------------------------------------------------
INDEPENDENT AUDITOR'S REPORT
- --------------------------------------------------------------------------------
To the Board of Directors and Shareholders
GAM Funds, Inc.
We have audited the accompanying statements of assets and liabilities of 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 Funds, separate portfolios of GAM Funds, Inc. including the
statements of investments, as of 31st December, 1995, and the related statements
of operations, the statements of changes in net assets, and the selected
financial information for each of the periods indicated in the accompanying
financial statements. These financial statements and selected financial
information are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
selected financial information based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and selected
financial information are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of 31st December, 1995, by correspondence with the custodian. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and select financial information
referred to above present fairly, in all material respects, the financial
position of 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 as of 31st December, 1995, the results of
their operations, the changes in their net assets and the selected financial
information for the periods indicated, in conformity with generally accepted
accounting principles.
New York, New York
2nd February, 1996 McGladrey & Pullen, LLP
-58-
<PAGE>
This Page Left Intentionally Blank
<PAGE>
- ------------------
Board of Directors
- ------------------
Gilbert de Botton -- President
CHAIRMAN, Global Asset Management Limited
London.
George W. Landau
SENIOR ADVISOR 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
TRUSTEE, The New York State Teachers Retirement
System, 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) 407 4684
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 Company, 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: 441-624 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: 44-171-493 9990 Fax: 44-171-493 0715 Tlx: 296099 GAMUK G
On Internet:
[email protected]
- --------------------------------------------------------------------------------
<PAGE>
GLOBAL ASSET MANAGEMENT
(R)
GAM FUNDS, INC.
FINANCIAL STATEMENTS
FOR THE PERIOD ENDED
31ST DECEMBER, 1995
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 Funds objectives, policies, management, records and other
information.
GAM FUNDS, INC.
INVESTMENT ADVISER:
GAM International Management Limited
GAM
(R)
