As filed with the Securities and Exchange Commission on February 28, 1997
Registration No. 2-92136
File No. 811-4062
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
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Pre-Effective Amendment No. / /
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Post-Effective Amendment No. 28 / X /
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / X /
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Amendment No. 31
GAM FUNDS, INC.
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
135 East 57th Street, New York, New York 10022
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: (212) 407-4600
GAM FUNDS, INC. Copy to:
135 East 57th Street, James B. Sitrick, Esq.
New York, New York 10022 Coudert Brothers
(Name and Address of Agent for Service) 1114 Avenue of the Americas
New York, New York 10036
Approximate Date of Proposed Public Offering: Effective date of this
Post-Effective Amendment.
It is proposed that this filing will become effective (check appropriate box)
[ ] immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(i)
[ X ] on April 30, 1997 pursuant to paragraph (a)(i)
[ ] 75 days after filing pursuant to paragraph (a)(ii)
[ ] on (date) pursuant to paragraph (a)(ii) of rule 485.
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
DECLARATION PURSUANT TO RULE 24f-2
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, as amended, the
Registrant has registered an indefinite number or amount of securities under the
Securities Act of 1933. The Rule 24f-2 Notice for the Registrant's fiscal year
ended December 31, 1996 was filed on February 21, 1997.
<PAGE>
Page 1 of pages
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INDEX TO EXHIBITS APPEARS ON PAGE
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GAM FUNDS, INC.
Contents
This Registration Statement on Form N-1A consists of the following:
1. Facing Sheet
2. Cross-Reference Sheet
3. Part A - Prospectus
4. Part B - Statement of Additional Information
5. Part C - Other Information
6. Signature Sheet
<PAGE>
GAM FUNDS, INC.
Cross-Reference Sheet pursuant to Rule 495(a)
Form N-1A
Item No.
Part A Heading in Prospectus
- --------------------------------------------------------------------------------
1. Cover Page Cover Page
2. Synopsis Expenses; Summary
3. Condensed Financial Information Financial Highlights
4. General Description of Investment Objective and
Registrant Policies and Risk Considerations
5. Management of the Fund Management of the Funds
6. Capital Stock and Other Description of Shares; Shareholder
Securities Transactions and Services;
Additional Information
7. Purchase of Securities Shareholder Transactions and Services;
Being Offered Management of the Funds
8. Redemption or Repurchase Redemption of Shares
9. Pending Legal Proceedings N.A.
<PAGE>
GLOBAL ASSET MANAGEMENT
GAM FUNDS, INC.
135 East 57th Street, New York,, NY 10022
Tel: (800) 426-4685 Fax: (212) 407-4684
Internet: [email protected]
PROSPECTUS
APRIL 30, 1997
GAM GLOBAL FUND
GAM INTERNATIONAL FUND
GAM PACIFIC BASIN FUND
GAM JAPAN CAPITAL FUND
GAM ASIAN CAPITAL FUND
GAM EUROPE FUND
GAM NORTH AMERICA FUND
GAMERICA CAPITAL FUND
GAM Funds, Inc. (the "Company") is a diversified open-end management investment
company which offers investors the opportunity to invest in eight different
portfolios (the "Funds") investing primarily in equity securities.
This Prospectus sets forth concisely information a prospective investor should
know about each GAM Fund before investing. Investors are advised to read and
retain this Prospectus for future reference. The Company has filed a Statement
of Additional Information, dated April 30, 1997, with the Securities and
Exchange Commission. Such Statement is incorporated by reference in this
Prospectus, and is available without charge upon request at the address and
telephone number indicated above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION ("SEC") OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SEC
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
Table of Contents
Summary..............................................................
Investor Expenses....................................................
Financial Highlights.................................................
Investment Objectives and Policies and Risk Considerations...........
Shareholder Transactions and Services
Purchase of Shares..........................................
Redemption of Shares........................................
Exchanges...................................................
Other Account Services
Tax Matters.................................................
Management of the Funds..............................................
Description of Shares................................................
Additional Information...............................................
Purchase Application................................................. Back Cover
<PAGE>
SUMMARY
INVESTMENT OBJECTIVE AND POLICIES. The investment objective of each Fund is to
seek long-term capital appreciation by investing primarily in equity securities.
Each Fund seeks to achieve this objective by investing in the particular
geographic region established pursuant to its own investment policy. Each Fund
employs its own strategy and has its own risk/reward profile. The Funds are not
guaranteed to achieve their objective.
PRINCIPAL RISKS. GAM International, Europe, Pacific Basin, Asian Capital and
Japan Capital Funds will invest primarily in securities of foreign issuers, and
GAM Global and North America Funds and, to a lesser extent, GAMerica Capital
Fund, may invest in securities of foreign issuers. Generally, investments in
securities of foreign issuers involve greater risks than investments in United
States issuers. Certain investment techniques that may be utilized by the Funds,
such as hedging and leveraging techniques, also involve risk. Because investors
could lose money by investing in the Funds, investors should be sure to read and
understand these and all risk factors associated with an investment in the
Funds.
INVESTMENT ADVISERS AND UNDERWRITER. The Funds are managed by GAM International
Management Limited, a London-based affiliate of the Global Asset Management
(GAM) Group of companies, an international investment advisory organization with
approximately $9 billion under management and offices or affiliates in Bermuda,
New York, London, Zurich, Hong Kong, Singapore, Edinburgh, Dublin and the Isle
of Man. Fayez Sarofim & Co., which serves as co-investment adviser for GAM North
America Fund, is based in Houston, Texas and manages aggregate assets of
approximately $38 billion.
GAM Services, Inc., an affiliate of GAM, serves as principal underwriter for the
Funds' shares. Shares are continuously offered to the public through securities
dealers and other financial services firms that have entered into an agreement
with GAM Services to sell shares of the Funds.
MINIMUM INVESTMENT. The minimum initial investment is $5,000 ($2,000 for IRA
accounts); shareholders may make subsequent purchases for as little as $500.
Purchases of shares may be subject to a maximum sales charge of 5% of the
purchase price in the case of Class A shares, and 3.5% in the case of Class D
shares.
DIVIDENDS AND DISTRIBUTIONS. Each Fund distributes annually all of its net
investment income and net realized capital gains. Dividends and distributions
may be reinvested automatically without a sales load.
ADDITIONAL FUND FEATURES. The Funds offer Exchanges at Net Asset Value, Reduced
Sales Charges through a Statement of Intention and Rights of Accumulation;
Telephone Exchanges and Redemptions; Automatic Investment and Systematic
Withdrawal Plans; and money market investment privileges through the GAM Money
Market Account.
<PAGE>
INVESTOR EXPENSES
Fund investors pay various expenses either directly or indirectly. The figures
below show the expenses for the past year, adjusted to reflect any changes.
Future expenses may be greater or less.
<TABLE>
<CAPTION>
International Global Pacific Basin
Class A Class D* Class A Class D* Class A Class D*
<S> <C> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed On 5% 3.5% 5% 3.5% 5% 3.5%
Purchases (as a percentage of offering price)(1)
Maximum Deferred Sales Charge None(2) None None(2) None None(2) None
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fees (after expense reimbursement) 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%
12b-1 Fees(4) 0.30% 0.50% 0.30% 0.50% 0.30% 0.50%
Other Expenses(5) 0.49 0.41 1.19 1.23 0.69 0.63
Total Fund Operating Expenses(4) 1.79% 1.91% 2.49% 2.73% 1.99% 2.13%
===== ===== ===== ===== ===== =====
</TABLE>
*Class D shares are currently offered only by GAM International Fund, GAM Global
Fund and GAM Pacific Basin Fund.
<TABLE>
<CAPTION>
North Japan GAMerica Asian
Europe America Capital Capital Capital
Class A Class A Class A Class A Class A
<S> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed On 5% 5% 5% 5% 5%
Purchases (as a percentage of offering price)(1)
Maximum Deferred Sales Charge None(2) None(2) None(2) None(2) None(2)
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fees (after expense reimbursement) 1.00% 1.00% 1.00% 0%(3) 0.40%(3)
12b-1 Fees(4) 0.30% 0.30% 0.30% 0.30% 0.30%
Other Expenses(5) 0.82% 1.54% 0.77% 5.09% 2.51%
Total Fund Operating Expenses(4) 2.12% 2.84% 2.07% 5.39% 3.21%
</TABLE>
NOTES TO TABLE
(1) The sales charge is reduced for investments of $100,000 or more, declining
to zero for large order purchases of $1 million or more. The sales charge
may be waived for certain investors, as described below under "Shareholder
Transactions and Services - Purchasing Shares.
(2) Except for investments of $1 million or more. See "Shareholder Transactions
and Services -- Purchasing Shares".
(3) In the absence of an expense reimbursement, the management fee for each of
GAMerica Capital Fund and GAM Asian Capital Fund would have been 1.0%,
resulting in total expenses of 6.39% and 3.81%, respectively.
<PAGE>
(4) 12b-1 Fees, Total Fund Operating Expenses and the following Example for
Class A shares have been restated to reflect adoption by the Funds,
effective October 9, 1996, of a 12b-1 Plan of Distribution for Class A
shares providing for payments of 0.30% annually of the average daily net
assets represented by Class A shares of each Fund. 12b-1 fees for Class D
shares were introduced in 1995. Class D shares may pay up to 0.50% of
average daily net assets annually pursuant to the 12b-1 Plan. Because of the
12b-1 fee, long term shareholders of Class D shares may indirectly pay more
than the equivalent of the maximum permitted front-end sales charge.
(5) Other expenses include custodian, transfer agent, administrative, legal and
accounting fees and expenses. The Funds' expense ratios may be higher than
those of most registered investment companies since the cost of maintaining
custody of foreign securities is higher than those for most domestic funds
and the rate of the advisory fee paid by each Fund exceeds that of most
registered investment companies.
EXAMPLE
The table below shows what an investor would pay if he or she invested $1,000
over the various time frames indicated. The example assumes reinvestment of all
dividends, an average annual return of 5%, and that "Total Fund Operating
Expenses" remain the same each year.
International Global Pacific Basin
Class A Class D Class A Class D Class A Class D
1 Year $ 67 $ 54 $ 74 $ 62 $ 69 $ 56
3 Year 104 93 124 117 109 99
5 Year 142 135 176 174 152 145
10 Year 250 250 318 330 270 273
North Japan GAMerica Asian
Europe America Capital Capital Capital
Class A Class A Class A Class A Class A
1 Year $ 70 $ 77 $ 70 $ 101 $ 81
3 Year 113 134 112 203 144
5 Year 158 192 156 304 209
10 Year 283 351 278 552 384
This example is for comparison purposes only and is not a representation of
actual expenses and returns, either past or future.
<PAGE>
FINANCIAL HIGHLIGHTS
Unless otherwise noted, the selected financial information below is for the
fiscal periods ending December 31 of each year. The accounting firm of Coopers &
Lybrand L.L.P. audited the Funds' financial statements for the year ended
December 31, 1996. Their report is included in the Funds' Annual Report, which
contains further information about the performance of the Funds. A copy of the
Annual Report is incorporated by reference into the Statement of Additional
Information and available at no charge upon request to the Funds. The Funds'
financial statements for periods prior to 1996 were audited by other independent
accountants. Expense and income ratios and portfolio turnover rates have been
annualized for periods less than one year. Total returns for periods of less
than one year are not annualized.
<PAGE>
GAM INTERNATIONAL FUND
<TABLE>
<CAPTION>
05-Sept-95+
to
1996 1996 1995 31-Dec-95 1994 1993 1992 1991
Class A Class D Class A Class D Class A Class A Class A Class A
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Per share operating performance
(for a share outstanding
throughout the period)*
Net asset value
Beginning of period $21.37 $21.35 $17.21 $20.46 $23.90 $14.56 $14.86 $12.87
------ ------ ------- ------- ------- ------- ------- ------
Income from investment operations
Net investment income 0.57 0.45 0.52 0.1 0.34 0.25 0.71 0.36
Net realized and unrealized
gain/(loss) on investments 1.34 1.32 4.64 1.78 (2.58) 10.38 0.28 1.64
---- ---- ---- ---- ------ ----- ---- ----
Total from investment operations 1.91 1.77 5.16 1.88 (2.24) 10.63 0.43 2.00
---- ---- ---- ---- ------ ----- ---- ----
Less distributions
Dividends from net
investment income
(0.09) (0.01) (0.47) (0.46) (0.66) (0.34) (0.43) (0.01)
Distributions from net realized gains (0.04) (0.04) (0.53) (0.53) (3.79) (0.95) (0.30) 0.00
------ ------ ------ ------ ------ ------ ------ ------
Total distributions (0.13) (0.05) (1.00) (0.99) (4.45) (1.29) (0.73) (0.01)
------ ------ ------ ------ ------ ------ ------ ------
Net asset value
End of period $23.15 $23.07 $21.37 $21.35 $17.21 $23.90 $14.56 $14.86
======= ======= ======= ======= ======= ======= ======= ======
Total return
(without deduction of sales load) 8.98% 8.33% 30.09% 9.26% (10.23%) 79.96% 3.08% 15.56%
Net assets, end of period
(000 omitted) $1,009,819 $38,716 $560,234 $8,714 $158,336 $80,776 $41,032 $40,355
Ratios to average net
assets
Expenses 1.56% 2.06% 1.57% 2.22% 1.60% 1.99% 2.03% 2.11%
Net investment income 2.70% 2.13% 3.89% 1.90% 2.74% 2.28% 4.85% 3.25%
Portfolio turnover rate 82% 82% 34.97% 34.97% 110.48% 98.45% 109.16% 160.67%
Average Commission Rate 0.0202 0.0202
Paid
Bank Loans
Amount outstanding at end of period
(000 omitted) -- -- -- -- -- $9,557 $2,743 --
Average amount of bank loans
outstanding during the period
(000 omitted) -- -- -- -- -- $2,042 $901 --
Average number of shares outstanding
during the period (monthly average)
(000 omitted) -- -- -- -- -- --
2,700 2,790
Average amount of debt per share
during the period -- -- -- -- -- $0.76 $0.32 --
</TABLE>
<PAGE>
FOR THE PERIODS
1990 1989 1988 1987
Class A Class A Class A Class A
Per share operating performance
(for a share
outstanding
throughout the period)*
Net asset value
Beginning of period $17.02 $14.81 $13.29 $21.91
------- ------- ------- ------
Income from investment operations
Net investment income 0.17 0.03 0.04 0.11
Net realized and
unrealized
gain/(loss) on investments (1.41) 3.21 2.72 2.38
------ ---- ---- ----
Total from investment operations (1.24) 3.24 2.76 2.49
------ ---- ---- ----
Less distributions
Dividends from net
investment income
-- -- (0.06) (0.23)
Distributions from net realized gains (2.91) (1.03) (1.18) (10.88)
------ ------ ------ -------
Total distributions (2.91) (1.03) (1.24) (11.11)
------ ------ ------ -------
Net asset value
End of period $21.87 $17.02 $14.81 $13.29
======= ======= ======= ======
Total return
(without deduction of sales load) (7.30%) 22.46% 21.51% 12.05%
Net assets, end of period
(000 omitted) $23,450 $20,537 $19,638 $21,167
Ratios to average net
assets
Expenses 2.30% 2.74% 2.76% 2.23%
Net investment income 1.32% 0.19% 0.27% 0.38%
Portfolio turnover rate 253.89% 32.52% 22.86% 79.58%
Bank Loans
Amount outstanding at end of period
(000 omitted) -- -- -- --
Average amount of bank loans
outstanding during the period
(000 omitted) -- -- -- --
Average number of shares outstanding
during the period (monthly average)
(000 omitted) -- -- -- --
Average amount of debt per share
during the period -- -- -- --
- -----------------------------------------------------
* Per share amounts for years ended prior to December 31, 1995 have been
restated to reflect a 10-for-1 stock split effective December 19, 1995.
+ Commencement of offering of Class D shares.
<PAGE>
GAM GLOBAL FUND
<TABLE>
<CAPTION>
05-Sep-95+
to
1996 1996 1995 31-Dec-95 1994 1993 1992 1991
Class A Class D Class A Class D Class A Class A Class A Class A
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Per share operating performance
(for a share outstanding
throughout the period)*
Net asset value
Beginning of period $13.51 $13.48 $10.60 $13.46 $17.92 $10.33 $11.37 $10.28
Income from investment operations
Net investment income 0.16 0.07 0.35 -- 0.19 0.24 0.64 0.28
Net realized and unrealized
gain/(loss) on investments 1.55 1.47 3.48 0.92 ($ 2.94) $ 7.46 ($ 1.15) $ 0.81
---- ---- ---- ---- ------- ------- ------- ------
Total from investment operations 1.71 1.55 3.83 0.92 (2.75) 7.70 (0.51) 1.09
---- ---- ---- ---- ------ ---- ------ ----
Dividends from net
investment income (0.08) (0.18) (0.30) (0.28) (0.49) (0.11) (0.28) --
Distributions from net realized gains (0.79) (0.63) (0.62) (0.62) (4.08) -- (0.25) --
------ ------ ------ ------ ------ ------ ------ ------
Total distributions (0.87) (0.81) 0.92 (0.90) (4.57) (0.11) (0.53) --
------ ------ ----- ------ ------ ------ ------ --
Net asset value
End of period $14.35 *$14.22 $13.51 $13.48 $10.60 $17.92 $10.33 $11.37
====== ======= ======= ======= ======= ======= ======= ======
Total return
(without deduction of sales load) 12.74% 11.54% 36.25% 6.97% (16.15%) 75.30% (4.65%) 10.61%
Ratios/supplemental data:
Net assets, end of period
(000 omitted) $19,583 $815 $26,161 $295 $19,940 $33,416 $19,763 $23,990
Ratios to average net assets
Expenses 2.26% 2.88% 2.16% 2.81% 2.29% 2.68% 2.37% 2.33%
Net investment income/(loss) 1.17% 0.52% 2.96% (0.09%) 0.91% 1.88% 5.25% 2.20%
Portfolio turnover rate 107% 107% 60.18% 60.18% 123.33% 106.73% 118.41% 180.52%
Average Commission Rate Paid 0.0255 0.0255
Bank Loans
Amount outstanding at end of period -- -- -- -- -- $2,165 $9,010 --
(000 omitted)
Average amount of bank loans
outstanding during the period
(000 omitted) -- -- -- -- -- $2,600 $1,401 --
Average number of shares outstanding
during the period (monthly average)
(000 omitted) -- -- -- -- -- --
1,780 2,130
Average amount of debt per share
during the period -- -- -- -- -- $ 1.48 $0.66 --
</TABLE>
<PAGE>
FOR THE PERIODS
1990 1989 1988 1987
Class A Class A Class A Class A
Per share operating performance
(for a share outstanding
throughout the period)*
Net asset value
Beginning of period $13.14 $11.08 $9.26 $10.47
------- ------- ------ ------
Income from investment operations
Net investment income 0.06 0.04 (0.01) 0.12
Net realized and unrealized
gain/(loss) on investments (1.54) 2.56 2.25 (0.38)
------ ----- ---- ------
Total from investment operations (1.48) 2.60 2.24 (0.26)
------ ----- ---- ------
Dividends from net
investment income -- (0.03) -- (0.12)
Distributions from net realized gains (1.38) (0.51) (0.42) (0.83)
------ ------ ------ ------
Total distributions (1.38) (0.54) (0.42) (0.95)
------ ------ ------ ------
Net asset value
End of period $10.28 $13.14 $11.08 $9.26
======= ======= ======= ======
Total return (11.26%) 24.20% 25.04% (2.47%)
(without deduction of sales load)
Ratios/supplemental data:
Net assets, end of period
(000 omitted) $23,577 $22,794 $17,805 $18,229
Ratios to average net
assets
Expenses 2.45% 2.68% 2.94% 2.09%
Net investment income/(loss) 0.58% 0.36% (0.05%) 0.90%
Portfolio turnover rate 250.46% 31.28% 34.09% 67.35%
Bank Loans
Amount outstanding at end of period
(000 omitted) -- -- -- $1,900
Average amount of bank loans
outstanding during the period
(000 omitted) -- -- -- $158
Average number of shares outstanding
during the period (monthly average)
(000 omitted) -- -- --
220
Average amount of debt per share
during the period -- -- -- $0.72
- --------------------------------------------------------------------------------
+ Commencement of offering of Class D shares.
* Per share amounts for periods ended prior to December 31, 1995 have been
restated to reflect a 10-for-1 stock split effective December 19, 1995.
<PAGE>
GAM PACIFIC BASIN FUND
<TABLE>
<CAPTION>
05-Sep-95+
to
1996 1996 1995 31-Dec-95 1994 1993 1992
Class A Class D Class A Class D Class A Class A Class A
<S> <C> <C> <C> <C> <C> <C> <C>
Per share operating performance
(for a share outstanding
throughout the period)*
Net asset value
Beginning of period $16.97 $16.96 $17.62 $17.36 $19.20 $13.14 $13.77
------ ------ ------- ------- ------- ------- ------
Income from investment operations
Net investment income/(loss) 0.04 (0.10) -- (0.02) (0.05) (0.03) 0.01
Net realized and unrealized
gain/(loss) on investments (0.11) (0.11) 0.61 0.26 1.36 6.57 (0.06)
------ ------ ---- ---- ---- ---- ------
Total from investment operations (0.07) (0.21) 0.61 0.24 1.31 6.54 (0.05)
------ ------ ---- ---- ---- ---- ------
Less distributions
Dividends from net
investment income (0.74) (0.65) -- -- -- (0.04) (0.09)
Distributions from net realized gains (0.90) (0.90) (1.26) (0.64) (2.89) (0.44) (0.49)
------ ------ ------ ------ ------
Total distributions (1.64) (1.55) (1.26) (0.64) (2.89) (0.48) (0.58)
------ ------ ------ ------ ------
Net asset value
End of period $15.26 $15.20 $16.97 $16.96 $17.62 $19.20 $13.14
====== ====== ======= ======= ======= ======= ======
Total return
(without deduction of sales load) (0.39%) (1.19%) 4.50% 2.35% 7.41% 51.52% (0.37%)
Net assets, end of period
(000 omitted) $49,808 $1,878 $53,944 $1,547 $48,527 $40,719 $28,206
Ratios to average net assets
Expenses 1.76% 2.28% 1.98% 2.63% 1.78% 1.93% 2.03%
Net investment income 0.22% (0.57%) (0.07%) (1.49%) (0.35%) (0.29%) 0.09%
Portfolio turnover rate 46% 46% 64.01% 64.01% 29.11% 91.07% 74.78%
Average Commission Rate Paid 0.0251 0.0251
</TABLE>
<PAGE>
For the Periods
<TABLE>
<CAPTION>
++06-May-87
to
1991 1990 1989 1988 31-Dec-87
Class A Class A Class A Class A Class A
<S> <C> <C> <C> <C> <C>
Per share operating performance
(for a share outstanding
throughout the period)*
Net asset value
Beginning of period $11.93 $14.21 $10.16 $8.25 $10.00
------- ------- ------- ------ ------
Income from investment operations
Net investment income 0.17 (0.04) (0.22) (0.41) (0.19)
Net realized and unrealized
gain/(loss) on investments 1.81 (1.11) (4.61) (2.32) (1.56)
----- ------ ------ ------ ------
Total from investment operations (1.98) (1.15) 4.39 1.91 (1.75)
------ ------ ----- ----- ------
Dividends from net
investment income -- -- -- -- --
Distributions from net realized gains (0.14) (0.13) (0.34) -- --
------ ------ ------ -- --
Total distributions (0.14) (0.13) (0.34) -- --
------ ------ ------ -- --
Net asset value
End of period $13.77 $11.93 $14.21 $10.16 $8.25
======= ======= ======= ======= ======
Total return 16.71% (8.21%) 43.34% 23.21% (17.55%)
(without deduction of sales load)
Ratios/supplemental data:
Net assets, end of period
(000 omitted) $35,849 $20,811 $7,490 $4,341 $3,689
Ratios to average net assets
Expenses 2.29% 3.74% 5.93% 5.92% 6.80%
Net investment income/(loss) 0.78% (0.31%) (3.39%) (3.29%) (4.47%)
Portfolio turnover rate 78.80% 103.05% 152.89% 147.87% 85.53%
</TABLE>
- --------------------------------------
* Per share amounts for periods ended prior to December 31, 1995 have been
restated to reflect a 10-for-1 stock split effective December 19, 1995.
+ Commencement of offering of Class D shares.
++Commencement of operations
<PAGE>
GAM EUROPE FUND
<TABLE>
<CAPTION>
+01-Jan-90
to
1996 1995 1994 1993 1992 1991 31-Dec-90
Class A Class A Class A Class A Class A Class A Class A
<S> <C> <C> <C> <C> <C> <C> <C>
Per share operating performance
(for a share outstanding
throughout the period)*
Net asset value
Beginning of period $10.04 $8.66 $8.93 $7.34 $8.33 $8.39 $10.00
Income from investment operations
Net investment income 0.07 0.07 -- 0.24 0.40 0.22 (0.02)
Net realized and
unrealized
gain/(loss) on investments 2.06 1.38 (0.27) 1.41 (0.78) (0.28) 1.59
---- ---- ------ ---- ------ ------ ----
Total from investment operations 2.13 1.45 (0.27) 1.65 (0.38) (0.06) 1.61
---- ---- ------ ----- ------ ------ ----
Less distributions
Dividends from net
investment income (0.01) (0.06) -- (0.06) (0.22) -- --
Distributions from net realized gains (0.31) (0.01) -- -- (0.39) -- --
------ ------ -- -- ------ -- --
Total distributions (0.32) (0.07) -- (0.06) (0.61) -- --
------ ------ -- ------- ------- -- --
Net asset value
End of period $11.85 $10.04 $8.66 $8.93 $7.34 $8.33 $8.39
====== ======= ====== ====== ====== ====== =====
Total return
(without deduction of sales load) 21.32% 16.77% (3.11%) 22.68% (4.91%) (0.70%) (16.07%)
Ratios/supplemental data:
Net assets, end of period
(000 omitted) $25,127 $22,961 $32,233 $14,398 $17,264 $13,558 $9,186
Ratios to average net assets
Expenses 1.89% 2.12% 2.35% 2.64% 2.47% 2.76% 3.57%
Net investment income/(loss) 0.59% 0.75% 0.06% 1.05% 5.06% 2.17% (0.22%)
Portfolio turnover rate 76% 145.16% 74.96% 181.51% 72.20% 232.55% 325.62%
Average Commission Rate Paid 0.0168
Bank Loans
Amount outstanding at end of period -- -- -- $1,860 $1,177 -- --
(000 omitted)
Average amount of bank loans
outstanding during the period
(000 omitted) -- $123 -- $521 $347 -- --
Average number of shares outstanding
during the period (monthly average)
(000 omitted) -- 390 -- 1,680 2,400 -- --
Average amount of debt per share
during the period -- $0.32 -- $0.31 $0.14 -- --
</TABLE>
- ---------------------------------
* Per share amounts for periods ended prior to December 31, 1995 have been
restated to reflect a 10-for-1 stock split effective December 19, 1995.
+ Commencement of operations
<PAGE>
GAM NORTH AMERICA FUND
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992 1991 +1990
Class A Class A Class A Class A Class A Class A Class A
<S> <C> <C> <C> <C> <C> <C> <C>
Per share operating performance
(for a share outstanding throughout
the period)*
Net asset value
Beginning of period $11.93 $9.14 $12.80 $13.63 $13.35 $10.21 $10.00
------ ------ ------- ------- ------- ------- ------
Income from investment operations
Net investment income (loss) (0.05) -- 0.04 0.19 0.07 0.06 (0.22)
Net realized and unrealized
gain/(loss) on investments 2.93 2.83 0.23 (0.46) 0.25 3.08 0.43
---- ---- ---- ------ ---- ---- ----
Total from investment operations 2.88 2.83 0.27 (0.27) 0.32 3.14 0.21
---- ---- ---- ------ ---- ---- ----
Less distributions
Dividends from net
investment income -- -- (0.23) (0.07) (0.03) -- --
Distributions from net realized gains (1.25) (0.04) (3.70) (0.49) (0.01) -- --
------ ------ ------ ------ ------ -- --
Total distributions (1.25) (0.04) (3.93) (0.56) (0.04) -- --
------ ------ ------ ------ ------ -- --
Net asset value
End of period $13.56 $11.93 $9.14 $12.80 $13.63 $13.35 $10.21
====== ======= ====== ======= ======= ======= ======
Total return
(without deduction of sales load) 24.10% 30.90% 2.97% (2.09%) 2.42% 30.69% 2.14%
Ratios/supplemental data:
Net assets, end of period
(000 omitted) $5,853 $5,981 $1,887 $3,289 $11,781 $12,290 $1,862
Ratios to average net assets
Expenses, net of reimbursement 2.61% **2.98% **2.54% 2.10% 2.43% 2.96% **11.52%
Net investment income (0.39%) 0.01% 0.37% 0.69% 0.47% 0.45% (5.49%)
Portfolio turnover rate 9% 8.57% 3.00% 3.42% 20.38% 3.44% 0.00%
Average Commission Rate Paid 0.06
</TABLE>
- --------------------------------------
* Per share amounts for years ended prior to December 31, 1995 have been
restated to reflect a 10-for-1 stock split effective December 19, 1995.
**In the absence of the expense reimbursement, expenses on an annualized basis
would have represented 3.27%, 5.81% and 14.31% of the average net assets,
respectively, for the years ended December 31, 1995, 1994 and 1990.
+ Commenced operations January 1, 1990. Fayez Sarofim & Co. was appointed
co-investment adviser of the Fund effective June 20, 1990.
<PAGE>
GAM JAPAN CAPITAL FUND
<TABLE>
<CAPTION>
+01-Jul-94
to
1996 1995 31-Dec-94
Class A Class A Class A
Per share operating performance
(for a share outstanding throughout
the period)*
<S> <C> <C> <C>
Net asset value
Beginning of period $10.16 $9.62 $10.00
------ ------ ------
Income from investment operations
Net investment income (0.05) (0.07) 0.02
Net realized and unrealized
gain/(loss) on investments 0.07 0.69 (0.40)
---- ---- ------
Total from investment operations 0.02 0.62 (0.38)
---- ---- ------
Less distributions
Dividends from net
investment income (0.70) (0.05) --
Distributions from net realized gains (0.09) (0.03) --
------ --
Total distributions (0.79) (0.08) --
------ ------ --
Net asset value
End of period $9.39 $10.16 $9.62
====== ======= =====
Total return
(without deduction of sales load) 0.15% 6.45% (3.77%)
Ratios/supplemental data:
Net assets, end of period
(000 omitted) $36,504 $13,600 $9,406
Ratios to average net assets
Expenses, net of reimbursement 1.84 **3.61% 2.19%
Net investment income/(loss) (0.50%) (2.35%) 0.70%
Portfolio turnover rate 23% 122.38% 7.02%
Average Commission Rate Paid 0.0697
</TABLE>
- -------------------------------------
* Per share amounts for periods ended prior to December 31, 1995 have been
restated to reflect a 10-for-1 stock split effective December 19, 1995.
+ Commencement of operations
**In the absence of the expense reimbursement, for the period ended December 31,
1995, expenses on an annualized basis would have represented 4.61% of the
average net assets.
<PAGE>
GAMERICA CAPITAL FUND
<TABLE>
<CAPTION>
+12-May-95
to
1996 31-Dec-95
Class A Class A
Per share operating performance
(for a share outstanding throughout
the period)
<S> <C> <C>
Net asset value
Beginning of period $10.03 $10.00
------ ------
Income from investment operations
Net investment income (loss) (0.42) 0.07
Net realized and unrealized
gain/(loss) on investments 2.22 0.07
---- ----
Total from investment operations 1.80 0.14
---- ----
Less distributions
Dividends from net
investment income -- (0.07)
Distributions from net realized gains (1.01) (0.04)
Total distributions (1.01) (0.11)
------ ------
Net asset value
End of period $10.82 $10.03
======= ======
Total return
(without deduction of sales load) 18.31% 1.38%
Ratios/supplemental data:
Net assets, end of period
(000 omitted) $ 1,924 $ 3,029
Ratios to average net assets
Expenses, net of reimbursement* 5.16% 3.73%
Net investment income/(loss) (3.79%) 1.36%
Portfolio turnover rate 27% 10.90%
Average Commission Rate Paid 0.0533
</TABLE>
- ----------------------------------------
+ Commencement of operations
* In the absence of the expense reimbursement, for the period ended December 31,
1995 and the year ended December 31, 1996, expenses on an annualized basis
would have represented 4.73% and 6.16%, respectively of the average net
assets.
<PAGE>
GAM ASIAN CAPITAL FUND
<TABLE>
<CAPTION>
+12-May-95
to
1996 31-Dec-95
Class A Class A
Per share operating performance
(for a share outstanding throughout
the period)
<S> <C> <C>
Net asset value
Beginning of period $9.53 $10.00
----- ------
Income from investment operations
Net investment income (loss) (0.07) (0.01)
Net realized and unrealized
gain/(loss) on investments 0.38 (0.42)
---- ------
Total from investment operations 0.31 (0.43)
---- ------
Less distributions
Dividends from net
investment income -- --
Distributions from net realized gains (0.01) (0.04)
-- ------
Total distributions (0.01) (0.04)
-- ------
Net asset value
End of period $9.83 $9.53
====== ======
Total return
(without deduction of sales load) 3.28% (4.25%)
Ratios/supplemental data:
Net assets, end of period
(000 omitted) $5,629 $5,560
Ratios to average net assets
Expenses, net of reimbursement* 2.98% 3.11%
Net investment income/(loss) (0.75%) (0.17%)
Portfolio turnover rate 86% 17.01%
Average Commission Rate Paid 0.0124
</TABLE>
- -------------------------------------------------------------------------------
+ Commencement of operations
* In the absence of the expense reimbursement, for the period ended December 31,
1995 and the year ended December 31, 1996, expenses on an annualized basis
would have represented 3.95% and 3.58%, respectively, of the average net
assets.
<PAGE>
PERFORMANCE INFORMATION. The Funds may advertise performance information
representing each Fund's total return for the periods indicated. Total return
includes changes in the net asset value of each Fund's shares and assumes
reinvestment of all dividends and capital gains distributions. Total return
therefore reflects the expenses of each Fund, but does not reflect any taxes due
on dividends or distributions paid to shareholders. The Funds may advertise
total return both before and after deduction of the sales load.
Past results may not be indicative of future performance. The investment return
and principal value of shares of each Fund will fluctuate so that your shares,
when redeemed, may be worth more or less than their original cost.
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES AND RISK CONSIDERATIONS
Each Fund's investment objective is to seek long-term capital appreciation. To
pursue this goal, each Fund has adopted an investment policy relating to a
particular geographic region in which it intends to invest a substantial portion
of its assets. The policy of each Fund is described below.
Although the Funds generally intend to purchase securities for long-term
investment, each Fund may also engage in short-term trading based upon changes
affecting a particular company, industry, country or region or changes in
general market, economic or political conditions. Generally, each Fund expects
to achieve its objective by investing in equity securities (which include but
are not limited to common and preferred stocks and warrants). However, if it is
determined that the long-term capital appreciation of debt securities may equal
or exceed the return on equity securities, then a Fund may be substantially
invested in debt securities of companies or governments and their agencies and
instrumentalities. Each Fund is not required to maintain any particular
proportion of equity or debt securities in its portfolio. Any dividend or
interest income realized by a Fund on its investments will be incidental to its
goal of long-term capital appreciation.
The investment objective of each Fund and the investment policies set forth
below may be changed by the Board of Directors upon written notice to the
shareholders of the affected Fund(s). If there is a change in objective,
shareholders should consider whether the Fund remains an appropriate investment.
In light of each Fund's investment objective and anticipated portfolio, each
Fund should be considered as a vehicle for diversification and not as a balanced
investment program. There is no assurance that each Fund will achieve its
investment objective.
Each Fund has adopted the following investment policy relating to the geographic
areas in which it may invest. In the case of the GAM Pacific Basin, Japan
Capital, Asian Capital, Europe, North America and GAMerica Capital Funds, each
Fund intends to invest substantially all of its assets in the region dictated by
its investment policy and, under normal market circumstances, will invest at
least 65% of its assets in securities of companies or governments in the
relevant geographic area.
GAM GLOBAL FUND may invest in securities issued by companies in any country of
the world, including the United States, and will normally invest in securities
issued by companies in the United States, Canada, the United Kingdom,
Continental Europe and the Pacific Basin. Under normal market conditions, GAM
Global Fund will invest in securities of companies in at least three different
countries.
GAM INTERNATIONAL FUND may invest in securities issued by companies in any
country other than the United States and will normally invest in securities
issued by companies in Canada, the United Kingdom, Continental Europe and the
Pacific Basin. Under normal market conditions, GAM International Fund will
invest in securities of companies in at least three foreign countries. For
temporary defensive purposes, GAM International Fund may invest in debt
securities of United States companies and the United States government and its
agencies and instrumentalities.
GAM PACIFIC BASIN FUND may invest primarily in securities of companies in the
Pacific Basin, including Japan, Hong Kong, Singapore, Malaysia, Thailand,
Vietnam, Indonesia, the Philippines, Korea, China, Taiwan, India, Australia and
New Zealand.
GAM JAPAN CAPITAL FUND may invest primarily in securities of companies in Japan.
<PAGE>
GAM ASIAN CAPITAL FUND may invest primarily in securities issued by companies in
Asia other than Japan. Countries in Asia include Hong Kong, Singapore, Malaysia,
Thailand, Vietnam, Indonesia, the Philippines, Korea, China, Taiwan, India,
Myanmar, Pakistan, Bangladesh and Sri Lanka.
GAM EUROPE FUND may invest primarily in securities issued by companies in
Europe, including the United Kingdom, Ireland, France, Germany, Denmark, Norway,
Sweden, Finland, Iceland, Switzerland, Austria, Belgium, Spain, Portugal, Italy,
Greece, Hungary, Poland, the Czech Republic and Slovakia.
GAM NORTH AMERICA FUND may invest primarily in securities issued by companies in
the United States and Canada.
GAMERICA CAPITAL FUND. This Fund may invest primarily in securities of companies
in the United States.
A company will be considered to be in or from a particular country for purposes
of the preceding paragraphs if (a) at least 50% of the company's assets are
located in the country or at least 50% of its total revenues are derived from
goods or services produced in the country or sales made in the country; (b) the
principal trading market for the company's securities is in the country; or (c)
the company is incorporated under the laws of the country.
Each Fund will seek investment opportunities in all types of companies,
including smaller companies in the earlier stages of development. In making
investment decisions, each Fund will rely on the advice of its Investment
Adviser(s) and its own judgment rather than on any specific objective criteria.
The debt securities in which each Fund may invest are not required to have any
rating and may include securities of companies in default of interest or
principal payment obligations. None of the Funds may invest more than 5% of its
assets in debt securities which are rated lower than "investment grade" by a
rating service. Debt securities rated in the lowest "investment grade" by a
rating service (e.g., bonds rated BBB by S&P) or lower have speculative
characteristics, and changes in economic or other circumstances are more likely
to lead to a weakened capacity of the issuers of such securities to make
principal or interest payments than issuers of higher grade securities. A
decrease in the rating of debt securities held by a Fund may cause the Fund to
have more than 5% of its assets invested in debt securities which are not
"investment grade". In such a case, the Fund will not be required to sell such
debt securities.
Each Fund may, for temporary defensive purposes, invest in short-term debt
securities of foreign and United States companies, foreign governments and the
United States government, its agencies and instrumentalities, as well as in
money market instruments denominated in United States dollars or a foreign
currency. These money market instruments include negotiable or short-term
deposits with domestic or foreign banks with total assets of at least $50
million; high quality commercial paper; and repurchase agreements maturing
within seven days with domestic or foreign dealers, banks and other financial
institutions deemed to be creditworthy under guidelines approved by the Board of
Directors.
<PAGE>
In order to have funds available for redemption and investment opportunities,
each Fund may hold a portion of its portfolio in cash or United States and
foreign money market instruments. At no point in time will more than 35% of each
Fund's portfolio be so invested (except when the Fund is in a temporary
defensive posture) and/or held in cash.
The Funds' portfolio securities are generally purchased on stock exchanges and
in over-the-counter markets in the countries in which the principal offices of
the issuers of such securities are located. The Funds may also invest in
American Depositary Receipts ("ADRs") or European Depositary Receipts ("EDRs")
representing securities of foreign companies, including both sponsored and
unsponsored ADRs. These securities may not necessarily be denominated in the
same currency as the securities which they represent.
OTHER INVESTMENT POLICIES AND TECHNIQUES
The Funds will also utilize certain sophisticated investment techniques
described below, some of which involve substantial risks. Additional information
about some of the investment techniques described below and the related risks is
contained in the Statement of Additional Information.
OPTIONS AND WARRANTS. Each Fund may invest up to 5% of its net assets in options
on equity or debt securities or securities indices and up to 10% of its net
assets in warrants, including options and warrants traded in over-the-counter
markets. An option on a security gives the owner the right to acquire ("call
option") or dispose of ("put option") the underlying security at a fixed price
(the "strike price") on or before a specified date in the future. A warrant is
equivalent to a call option written by the issuer of the underlying security.
Each Fund may write covered call options on securities in an amount equal to not
more than 100% of its net assets and secured put options in an amount equal to
not more than 50% of its net assets. A call option written by a Fund is
"covered" if the Fund owns the underlying securities subject to the option or if
the Fund holds a call at the same exercise price, for the same period and on the
same securities as the call written. A put option will be considered "secured"
if a Fund segregates liquid assets having a value equal to or greater than the
exercise price of the option, or if the Fund holds a put at the same exercise
price, for the same period and on the same securities as the put written.
FUTURES CONTRACTS. Each Fund may invest up to 5% of its net assets in initial
margin or premiums for futures contracts and options on futures contracts,
including stock index futures and financial futures. A commodity futures
contract obligates one party to deliver and the other party to purchase a
specific quantity of a commodity at a fixed price at a specified future date,
time and place. In the case of a financial future, the underlying commodity is a
financial instrument, such as a U.S. Treasury Bond, Treasury Note or Treasury
Bill.
No consideration will be paid or received by a Fund upon the purchase or sale of
a futures contract. Initially, a Fund will be required to deposit with a broker
an amount of cash or cash equivalents equal to approximately 5% of the contract
amount. Subsequent payments to and from the broker will be made daily as the
price of the index or securities underlying the futures contract fluctuates.
<PAGE>
An option on a commodity futures contract gives the purchaser the right, in
exchange for the payment of a premium, to assume a position as a purchaser or a
seller in a futures contract at a specified exercise price at any time prior to
the expiration date of the option. The Funds will trade in commodity futures and
options thereon for bona fide hedging purposes and otherwise in accordance with
rules of the Commodity Futures Trading Commission.
FORWARD FOREIGN EXCHANGE CONTRACTS. Since the Funds may invest in securities
denominated in currencies other than the United States dollar, changes in
foreign currency exchange rates may affect the values of portfolio securities.
The rate of exchange between the United States dollar and other currencies is
determined by forces of supply and demand in the foreign exchange markets. These
forces are affected by the international balance of payments and other economic
and financial conditions, government intervention, speculation and other
factors.
The Funds may enter into forward foreign exchange contracts for the purchase or
sale of foreign currency to "lock in" the United States dollar price of the
securities denominated in a foreign currency or the United States dollar
equivalent of interest and dividends to be paid on such securities, or to hedge
against the possibility that the currency of a foreign country in which a Fund
has investments may suffer a decline against the United States dollar, or for
speculative purposes. A forward foreign currency exchange contract obligates one
party to purchase and the other party to sell an agreed amount of a foreign
currency on an agreed date and at an agreed price.
The Funds may purchase put and call options on foreign currencies. Put options
convey the right to sell the underlying currency at a price which is anticipated
to be higher than the spot prices of the currency at the time the option
expires. Call options convey the right to buy the underlying currency at the
time the option expires. Each Fund may also write covered call options in an
amount not to exceed the value of the Fund's portfolio securities or other
assets denominated in the relevant currency and secured put options in an amount
equal to 50% of its net assets.
ILLIQUID SECURITIES. Each Fund may invest up to 15% of its net assets in
illiquid securities, including restricted securities or private placements. An
illiquid security is a security that cannot be sold quickly in the ordinary
course of business. The absence of a trading market may adversely affect the
ability of the Funds to sell such illiquid securities promptly and at an
acceptable price, and may also make it more difficult to ascertain a market
value for such securities. Certain securities cannot be sold to the U.S. public
because of their terms or because of SEC regulation. The Investment Advisers may
determine that securities that cannot be sold to the U.S. public but that can be
sold to institutional investors (Rule 144A Securities) or on foreign markets are
liquid. The Investment Adviser will follow guidelines established by the Board
of Directors of the Company in making liquidity determinations for Rule 144A and
other securities.
BORROWING AND LENDING. Each Fund may borrow money from banks for temporary
emergency purposes in an amount not to exceed one-third of its total assets.
Borrowing by a Fund will cause it to incur interest and other expenses.
Borrowing by a Fund, also known as leverage, will also tend to exaggerate the
effect on the net asset value of the Fund's shares of any increase or decrease
in the market value of the Fund's assets.
Each Fund may lend its portfolio securities to institutions deemed creditworthy
pursuant to procedures established by the Board of Directors. No such loan will
<PAGE>
be made which would cause the aggregate market value of all securities lent by a
Fund to exceed 15% of the value of the Fund's total assets.
ADJUSTABLE RATE INDEX NOTES. Each Fund may invest in adjustable rate index notes
(ARINs) or similar instruments. An ARIN is a form of promissory note issued by a
brokerage firm or other counterparty which provides that the amount of principal
or interest paid will vary inversely in proportion to changes in the value of a
specified security. Under such an instrument, the Fund will make a profit if the
value of the specified security decreases and will suffer a loss if the value of
the specified security increases. The effect of such an instrument is equivalent
to a short sale of the specified security, except that the potential loss to the
Fund is limited to the amount invested in the ARIN, whereas in the case of a
short sale the short seller is potentially subject to unlimited risk of loss.
The Funds could suffer losses in the event of a default or insolvency of the
brokerage firm or other counterparty issuing the ARIN.
OTHER INVESTMENT ACTIVITIES. It is likely that new investment products will
continue to develop which will combine elements of options, futures contracts or
debt securities with other types of derivative financial products, such as
swaps, caps and floors, or which will otherwise tie payments to be made or
received to the value of specific securities or to existing or new indices.
Swaps involve the exchange by two parties of their respective obligations to pay
or receive a stream of payments. For example, a Fund might exchange floating
interest payments for fixed interest payments, or a series of payments in one
currency for a series of payments in another currency. The purchase of a cap or
floor entitles the purchaser to receive payment on an agreed principal amount
from the seller if a specified index exceeds (in the case of a cap) or falls
below (in the case of a floor) a predetermined interest or exchange rate.
The Funds may invest and trade in derivative financial products to the extent
permitted by applicable regulations. Derivative products are frequently traded
on over-the-counter markets and will usually be subject to the restriction that
not more than 15% of the net assets of each Fund may be invested in illiquid
securities. The Funds will purchase or sell derivative products for hedging
purposes only, unless otherwise permitted by applicable regulations. A Fund will
not enter into swaps, caps or floors if on a net basis the aggregate notional
principal amount of such agreements exceeds the net assets of the Fund.
DIVERSIFICATION; INVESTMENT RESTRICTIONS
The Investment Company Act of 1940 classifies investment companies as either
diversified or non-diversified. The Company qualifies as a diversified Company.
Accordingly, each Fund's investments will be diversified to the extent that,
with respect to 75% of its total assets, no more than 5% of its total assets
will be invested in any one issuer, and a Fund will not acquire more than 10% of
the outstanding voting securities of any one issuer. Each Fund's investments
will be selected among different industries, such that not more than 25% of its
total assets will be invested in any one industry. The preceding limitations
will not apply to securities of the United States government, its agencies or
instrumentalities.
Each Fund is subject to certain fundamental investment restrictions and
limitations which are set forth in full in the Statement of Additional
Information. These fundamental policies cannot be changed without approval of a
majority of each Fund's outstanding voting securities. All restrictions, except
the restriction relating to borrowing, shall
<PAGE>
apply only at the time an investment is made, and a subsequent change in the
value of an investment or of a Fund's assets shall not result in a violation.
RISK CONSIDERATIONS
INVESTING IN FOREIGN SECURITIES. GAM International, Europe, Pacific Basin, Asian
Capital and Japan Capital Funds will invest primarily in securities of foreign
issuers, and GAM Global, North America, and GAMerica Capital Funds may invest a
portion of their assets in securities of foreign issuers. Investors should
carefully consider the risks involved in investments in securities of non-U.S.
companies and governments. Such risks include fluctuations in foreign exchange
rates, political or economic instability in the country of issue, and the
possible imposition of exchange controls or other laws or restrictions.
Securities prices in non-U.S. markets are generally subject to different
economic, financial, political and social factors than are the prices of
securities in U.S. markets. These factors may result in either a larger gain or
a larger loss than an investment in comparable U.S. securities.
The Funds may enter into forward foreign exchange contracts in an attempt to
hedge against adverse fluctuations in the relative rates of exchange between
different currencies. However, attempting to hedge the value of a Fund's
portfolio securities against a decline in the value of a currency will not
eliminate fluctuations in the underlying prices of the securities. There can be
no assurance that such hedging attempts will be successful.
There is likely to be less publicly available information concerning non-U.S.
issuers of securities held by the Funds than is available concerning U.S.
companies. Foreign companies are not subject to the same accounting, auditing
and financial reporting standards as are applicable to U.S. companies. There may
be less government supervision and regulation of foreign broker-dealers,
financial institutions and listed companies than exists in the United States.
Non-US securities exchanges generally have less volume than the New York Stock
Exchange and may be subject to less government supervision and regulation than
those in the United States. Securities of non-U.S. companies may be less liquid
and more volatile than securities of comparable U.S. companies.
Non-U.S. brokerage commissions and custodial fees are generally higher than
those in the United States, and the settlement period for securities
transactions may be longer, in some countries up to 30 days. Dividend and
interest income from non-U.S. securities may be subject to withholding taxes.
GAM Pacific Basin and Asian Capital Funds and, to a lesser extent, GAM Europe,
International and Global Funds may invest a portion of their assets in
securities of issuers in developing countries or emerging markets, which
generally involve greater potential for gain or loss. In comparison to the
United States and other developed countries, developing countries may have
relatively unstable governments, economies based on only a few industries and
securities markets that trade a smaller number of securities.
GAM Europe, Pacific Basin, Japan Capital, Asian Capital, North America and
GAMerica Capital Funds will invest primarily in specific geographic areas. An
investment in one of these Funds will tend to be affected by political,
<PAGE>
economic, fiscal, regulatory or other developments in the relevant geographic
area to a greater extent than investments in the other Funds. For example,
securities markets in Europe may be affected by the efforts of certain European
countries to adopt a single currency, coordinate monetary and fiscal policies
and form a single market and trading block. Investments in the securities of
issuers in Eastern Europe typically would involve greater potential for gain or
loss than investments in securities of issuers in Western European countries.
The extent of economic development, political stability and market depth of
different countries in the Pacific Basin varies widely. Certain countries in the
Pacific Basin are either comparatively underdeveloped or are in the process of
becoming developed, and investments in the securities of issuers in such
countries typically would involve greater potential for gain or loss than
investments in securities of issuers in developed countries.
A large part of the Japanese economy is dependent on international trade, so
that modifications in international trade barriers and fluctuations in trade
flows may indirectly affect the value of the Fund's shares. Japan is currently
in a recession and its stock market has declined in the past several years. In
recent years, Japanese securities markets have also experienced relatively high
levels of volatility.
INVESTING IN SMALLER COMPANIES. Each Fund may invest in all types of companies,
including companies in the earlier stages of development. Investing in smaller,
newer companies generally involves greater risk and potentially greater reward
than investing in larger, more established companies. Smaller, newer companies
often have limited product lines, markets or financial resources, and they may
be dependent upon one or a few key persons for management. The securities of
such companies may be subject to more abrupt or erratic market movements than
securities of larger, more established companies.
FIXED INCOME SECURITIES. The Funds will invest in fixed income securities which
involve interest rate risk. As interest rates rise, bond values generally fall,
and as interest rates fall, bond values generally rise. The Funds may also
purchase debt securities issued by smaller or financially distressed companies,
including securities of companies which may have defaulted on interest or
principal payment obligations. Such debt securities may have very low ratings or
no ratings, may be considered speculative investments, and involve greater risk
of loss of interest and principal.
OPTIONS, FUTURES AND OTHER DERIVATIVES. Trading in options, futures and other
forms of derivatives involves substantial risks. The low margin and premiums
normally required in such trading provide a large amount of leverage. A
relatively small change in the price of a security or index underlying a
derivative can produce a disproportionately larger profit or loss, and a Fund
may gain or lose more than its initial investment. There is no assurance that a
liquid secondary market will exist for options, futures or derivatives purchased
or sold, and a Fund may be required to maintain a position until exercise or
expiration, which could result in losses. There can be no assurance that the
Funds' hedging transactions will be successful. If the Investment Advisers
predict incorrectly, the effect on the value of a Fund's investments may be less
favorable than if the Fund had not engaged in such options and futures trading.
Foreign currency forward contracts, repurchase agreements, ARINS, and certain
other types of futures, options and derivatives are entered into directly
<PAGE>
between the Funds and banks, brokerage firms and other investors in
over-the-counter markets rather than through the facilities of any exchange. A
Fund may experience losses or delays in the event of a default or bankruptcy of
a bank, broker-dealer or other investor with which the Fund entered into such an
agreement. Some derivatives may constitute illiquid securities which cannot
readily be resold.
-------------
For more complete information regarding risks which investors should consider
before making an investment in a Fund, see "Investment Objective and
Policies--Risk Considerations" in the Statement of Additional Information.
SHAREHOLDER TRANSACTIONS AND SERVICES
Following is information relevant to purchasing, selling and exchanging shares
of the Funds, as well as a description of the shareholder services and programs
available. All transactions will be processed through the Funds' transfer agent,
Chase Global Funds Services Company (the "Transfer Agent") at the address and
telephone number set forth below under "Shareholder Inquiries".
The price or net asset value ("NAV") per share for each Fund and class other
than GAM Japan Capital Fund, is determined at the close of regular trading
(normally 4 p.m. New York time) on each day the New York Stock Exchange is open
for business (normally Monday through Friday). GAM Japan Capital Fund's NAV is
calculated at the close of trading on the Tokyo Stock Exchange. NAV per share is
determined by dividing the value of a Fund's securities, cash and other assets
(including accrued interest), less all liabilities (including accrued expenses),
by the number of the Fund's shares outstanding. Purchase, sale and exchange
transactions in shares of the Funds will be processed based at the NAV per share
on the date the transaction request is received and accepted.
Securities traded on foreign exchanges will ordinarily be valued at the last
quoted sale price available before the close of the New York Stock Exchange
(except as described above with respect to securities held by GAM Japan Capital
Fund). If a security is traded on more than one United States or foreign
exchange, the last quoted sales price on the exchange which represents the
primary market for the security will be used. Because some of the Funds'
portfolio securities may be traded on certain weekend days and on days that are
holidays in the United States but not in other countries where trading occurs,
the net asset value of a Fund's portfolio may be significantly affected at times
when a shareholder has no ability to purchase or redeem shares of the Fund.
PURCHASING SHARES
Shares of each Fund are offered on a continuous basis. Orders received in good
form prior to 4:00 p.m. New York time (or placed with a financial service firm
before such time and transmitted by the financial service firm before the Fund
processes that day's share transactions) will be processed based on that day's
closing price or NAV, plus any applicable initial sales charge. Purchase orders
must be accompanied by a completed and signed application, and are subject to
acceptance and collection of payment at full face value in US Dollars. Each Fund
and GAM Services, Inc., the Funds' distributor ("GAM Services"), reserve the
right to reject any purchase order.
<PAGE>
The minimum initial investment in each Fund is $5,000 and subsequent investments
must be at least $500, except that for IRAs the minimum initial investment is
$2,000 and the minimum subsequent investment is $500. You can initiate any
purchase, exchange or sale of shares through your financial services firm.
Shares may also be purchased by mail directly from the Transfer Agent, by
forwarding the Purchase Application form attached to this Prospectus. Complete
the appropriate parts of the Purchase Application following the instructions set
forth on the form and mail it with your check payable to "GAM Funds, Inc.".
Payment for shares may also be made by wire transfer after you have mailed in
your Purchase Application. In addition to the Funds, Investors may also purchase
directly or by exchange, without charge, shares of The Reserve Funds - Primary
Fund, an open-end management investment company commonly known as a money market
fund (the "GAM Money Market Account"). The GAM Money Market Account is offered
through GAM Services, but is not a series of the Company.
Each Fund offers Class A shares, and GAM International, GAM Global and GAM
Pacific Basin Funds offer Class D shares. Each class has its own cost structure,
allowing investors to choose the one that best meets their requirements.
Investors should consult their financial services firm to assist them with this
decision. Share purchases and other transactions are electronically recorded
(book-entry shares). The Funds do not generally issue certificates for shares
purchased.
CLASS A SHARES. Class A shares are offered at net asset value plus an initial
sales charge, unless the purchase qualifies for a complete waiver of the charge.
Large order purchases may be made without a sales charge; however, such
purchases will be subject to a contingent deferred sales charge as described
below. Class A shares are also subject to an ongoing fee of 0.30% annually of
the average daily net assets of each Fund represented by Class A shares pursuant
to the Class A Share Plan of Distribution adopted by the Funds. (See "Management
of the Funds - The Distributor").
Purchase Amount Sales Load Sales Load Amount
(as % of (as % of Net Reallowed
Offering Price) Amount Invested) to Dealers
(as % of
Offering Price)
Up to $100,000 5.00% 5.26% 4.0%
$100,000- $299,999 4.0% 4.17% 3.0%
$300,000-$599,999 3.0% 3.09% 2.0%
$600,000-$999,999 2.0% 2.04% 1.0%
$1,000,000 and over 0% See Below
INVESTMENTS OF $1,000,000 OR MORE. Large order purchases of Class A shares are
available with no front-end sales charge. GAM Services intends to pay financial
services firms a commission from its own resources in connection with these
purchases of up to 1% of the amount invested for amounts from $1 million to $3
million, 0.70% on amounts of $3 million to $5 million, 0.50% on amounts of $5
million to $50 million, and 0.25% on amounts of $50 million and above. Those
purchases for which GAM Services pays a commission (and the payment of which has
not been waived by the financial services firm) are subject to a 1% contingent
deferred sales charge ("CDSC") on any shares sold within one year of purchase,
declining to 0.50% for redemptions occurring in the second year and declining
thereafter to zero. Waivers of the CDSC are available under the circumstances
described below.
<PAGE>
The CDSC is based on the lesser of the original purchase cost or the current
market value of the shares being sold, and is not charged on shares acquired by
reinvesting your dividends. To keep the CDSC as low as possible, each time an
investor places a request to sell shares, the Fund will first sell any shares in
your account that are not subject to a CDSC.
CLASS D SHARES. Class D shares are offered at net asset value plus an initial
sales charge which is lower than the sales charge imposed on Class A shares.
However, Class D shares are also subject to an ongoing fee of 0.50% annually of
the average daily net assets of each Fund represented by Class D shares pursuant
to the Class D Share Plan of Distribution adopted by the Funds. (See "Management
of the Funds - The Distributor").
Purchase Amount Sales Load Sales Load Amount
(As % of (As % of Net Reallowed
Offering Price) Amount Invested) to Dealers
(As % of
Offering Price)
Up to $100,000 3.50% 3.63% 2.5%
$100,000- $299,999 2.5% 2.56% 1.5%
$300,000-$599,999 2.0% 2.04% 1.0%
$600,000-$999,999 1.5% 1.52% 1.0%
$1,000,000 and over* 0%
*Purchases of $1 million or more should be for Class A shares. Please consult
your financial services firm.
SALES CHARGE REDUCTIONS AND WAIVERS
REDUCTIONS. Certain purchases of Class A and Class D shares may qualify for
reduced or eliminated sales charges. Investors qualifying for a waiver of the
sales charge should purchase Class A shares. Please refer to the Purchase
Application or consult your financial services firm to take advantage of these
purchase options.
RIGHTS OF ACCUMULATION - You may add the value of any shares of the same class
already owned to the amount of your next investment in that class for purposes
of calculating the sales charge.
STATEMENT OF INTENTION - You may purchase shares of a Class over a 13-month
period and receive the same sales charge as if all shares had been purchased at
once.
COMBINATION PRIVILEGE - You may combine shares of the same class of more than
one Fund, and individuals may include shares purchased for themselves, their
spouse and children under the age of 21 for purposes of calculating the sales
charge.
WAIVERS OF FRONT-END SALES CHARGES. Shares may be offered without the front-end
sales charge to active and retired Fund directors and other persons affiliated
with the Fund or GAM Services or its affiliates, broker-dealers having sales
agreements with GAM Services, and spouses and minor children of the foregoing
persons or trusts or employee benefit plans for the benefit of such persons;
persons investing the proceeds of a redemption of shares of any other investment
company managed or sponsored by an affiliate of GAM Services; accounts managed
by an affiliate of GAM Services; financial representatives utilizing Fund shares
in fee-based investment products under agreements with GAM Services or the
Funds; organizations described in Section 501(c)(3) of the Internal Revenue Code
of 1986; financial institution trust departments investing an aggregate of $1
<PAGE>
million or more in the Funds; certain tax qualified plans of administrators who
have entered into a services agreement with GAM Services or the Funds; and
employee benefit plans of companies with more than 100 employees.
WAIVERS OF CDSC. The CDSC imposed on Class A shares may be waived on shares sold
to make payments through a systematic withdrawal plan; in connection with
certain distributions from an IRA; due to the death or disability of a
shareholder; or in connection with exchanges for Class A shares of another Fund.
SELLING SHARES
Shares may be sold on any day the New York Stock Exchange is open, either
through your financial services firm or directly to the Funds' Transfer Agent.
Financial services firms must receive requests before 4:00 p.m., New York time,
and are responsible for furnishing all necessary documentation to the Transfer
Agent. You will receive the NAV (price) per share on the date your request is
received in proper order for processing, less any applicable CDSC on Class A
shares.
Requests made directly to the Transfer Agent must be made in writing unless you
have elected telephone redemption privileges. (See "Telephone Transactions"
below.) The written request, signed by the registered account holder(s), must be
addressed and mailed to the Transfer Agent, indicating the number of shares or
dollar amount to be sold. Your signature(s) must be guaranteed by a bank, member
firm of a national stock exchange or another eligible guarantor institution. A
notary public is not acceptable. If you hold certificates representing your
shares, the certificate, endorsed for transfer, must accompany your request.
Additional documentation is required for sales by corporations, agents,
fiduciaries, surviving joint owners and individual retirement account holders.
Please contact the Transfer Agent.
When you place a request to sell shares for which the purchase money has not yet
been collected, the request will be executed in a timely fashion, but the Fund
will not release the proceeds to you until your purchase payment clears, which
may take up to ten days after the purchase. In unusual circumstances, a Fund may
temporarily suspend the processing of sell requests, or may postpone payment of
proceeds for up to three business days or longer, as permitted by law. The value
of your shares at the time of sale may be more or less than you paid for them.
The sale of shares may be a taxable event to you. (See "Tax Matters".)
INVOLUNTARY REDEMPTIONS. Except in the case of retirement accounts and accounts
maintained by administrators for retirement plans, if your account value falls
below $1,000 due to withdrawals other than by use of the systematic withdrawal
program described below, you may be asked to purchase more shares within 30
days. If your account is not brought back to the minimum account size, the Fund
may close the account and mail the proceeds to the registered address for the
account. Your account will not be closed if the value has decreased due to Fund
performance or the payment of sales charges. No CDSC will be imposed on accounts
closed involuntarily.
REINSTATEMENT PRIVILEGE. If you sell shares of a Fund, you may reinvest in your
existing account (or a new account reopened under the same registration) some or
all of the proceeds in the same class of shares of any Fund within 60 days
without a sales charge. If you paid a CDSC at the time of sale, you will be
credited with the portion of the CDSC paid in respect of the reinvested
proceeds.
<PAGE>
EXCHANGES
Shares of one Fund may be exchanged for shares of the same class of another
Fund, or for shares of the GAM Money Market Account, generally without paying
any sales charge. Upon an exchange from the GAM Money Market Account into a
Fund, investors who purchased the GAM Money Market Account directly must pay the
initial sales charge imposed by the Fund into which they exchange. Shares
subject to a CDSC will be subject to the same CDSC after the exchange, which
will continue to age from the original purchase date. A Fund may refuse any
exchange order, and may change or cancel the exchange privilege at any time upon
60 days' notice to shareholders.
Unless an investor has elected the telephone or facsimile exchange privilege,
investors must request in writing a sale of all or a portion of their current
investment and a simultaneous purchase into a separate Fund(s), which the
investor must indicate on a new application form. An executed request to sell
and a Purchase Application must be mailed to the Transfer Agent for processing.
An exchange out of a Fund is treated as a sale and may result in a gain or loss
for tax purposes. (See "Tax Matters".)
OTHER ACCOUNT SERVICES
DIVIDEND REINVESTMENT. Investors may opt to have their dividends reinvested in
additional shares of the same Fund and class. Unless you direct otherwise, your
distributions will be automatically reinvested. You can choose on the Purchase
Application to have a check for your dividends mailed to your registered
address. However, if your dividend checks are returned to the Fund because they
are not deliverable after two attempts, your dividends will automatically be
reinvested thereafter in additional shares of the same Fund and class.
SYSTEMATIC WITHDRAWAL PLAN. This program allows investors to sell their shares
at regular periodic intervals and direct payment of the proceeds to themselves
or to a third party. To initiate this option, you must have at least $10,000
worth of shares in your account. You may elect this option by providing the
information required in the appropriate section of the Purchase Application.
Withdrawals concurrent with the purchase of shares of the Funds will be
disadvantageous because of the payment of duplicative sales loads, if
applicable. For this reason, additional purchases of Fund shares are discouraged
when participating in this program.
AUTOMATIC INVESTMENT PLAN. You may make additional purchases in incremental
amounts of $500 or more through an automatic investment program. Monthly or
quarterly investments will be debited automatically, at your instruction, from
your account at a financial institution. To enroll in this program, please
complete the appropriate sections of the Purchase Application or contact the
Transfer Agent. You may terminate the program at any time by written notice to
the Transfer Agent. Termination will become effective within 30 days after
receipt of your request. The Fund may immediately terminate your participation
in the event that any item is unpaid by your financial institution.
TELEPHONE AND FACSIMILE PRIVILEGES. Telephone and facsimile redemption and
exchange privileges are available and can be initiated by properly completing
the appropriate sections of the Purchase Application or contacting the Transfer
Agent. For your protection, telephone requests may be recorded in order to
verify their accuracy. In addition, the Transfer Agent has procedures in place
to verify the identity of the caller. If these procedures are not followed, the
Transfer Agent is responsible for any losses that may occur to any account due
to an unauthorized telephone call. Proceeds of telephone and facsimile
redemptions will only be mailed to your registered address or sent by wire
transfer to an account designated in advance.
<PAGE>
SHAREHOLDER INQUIRIES. Please contact your financial representative for further
instructions and assistance with your investment, or contact the Transfer Agent
at the following address or telephone numbers:
Chase Global Funds Services Company
73 Tremont Street
Boston, MA 02108
(800) 426-4685
(617) 557-8000 ext. 6610
Facsimile: (617) 557-8635
TAX MATTERS
SHAREHOLDER TRANSACTIONS. Normally, any sale or exchange of shares of a Fund
will be a taxable event. Depending on the purchase price and the sale price of
the shares you sell or exchange, you may have a gain or a loss on the
transaction.
DIVIDENDS. So long as each Fund meets the requirements for being a tax-qualified
regulated investment company it pays no federal income tax on the earnings it
distributes to shareholders. Each Fund intends annually to pay a dividend
representing its entire net investment income and to distribute all its realized
net capital gains. In so doing, the Fund will avoid the imposition of any excise
taxes. Dividends, whether reinvested or taken as cash, are generally taxable.
Dividends from long-term capital gains are taxable as capital gains; dividends
from other sources are generally taxable as ordinary income.
After a Fund makes a distribution to shareholders, the value of each outstanding
share of the Fund will decrease by the amount of the distribution. If a
shareholder purchases shares immediately before the record date of the
distribution, the shareholder will pay the full price for the shares and then
receive some portion of the price back as a taxable dividend or capital gain
distribution (also known as "buying a dividend").
The Form 1099 and Tax Notice that is mailed to you every January details your
dividends and their federal tax category. You should verify your tax liability
with your tax professional. Please consult the Statement of Additional
Information for a description of certain other tax consequences to shareholders.
MANAGEMENT OF THE FUNDS
DIRECTORS AND OFFICERS. The business of the Funds is supervised by the Board of
Directors, who may exercise all powers not required by statute, the Articles of
Incorporation or the By-Laws to be exercised by the shareholders. When
appropriate, the Board of Directors will consider separately matters relating to
each Fund or to any class of shares of a Fund. The Board elects the officers of
the Company and retains various companies to carry out the Fund's operations,
including the investment advisers, custodian, administrator and transfer agent.
INVESTMENT ADVISERS. Each Fund is advised by GAM International Management
Limited ("GAM"), a corporation organized in 1984 under the laws of the United
Kingdom, with its principal offices located at 12 St. James Place, London SW1A
1NX England. Fayez Sarofim & Co. ("Sarofim"), a Texas corporation organized in
<PAGE>
1958 with offices at Two Houston Center, Houston, TX 77010, serves as
co-investment adviser to GAM North America Fund. The individuals primarily
responsible for the day-to-day management of each Fund's portfolio are set forth
below.
GAM GLOBAL AND GAM INTERNATIONAL FUNDS. John R Horseman, Investment Director,
joined GAM initially as a member of the Asian team based in Hong Kong. He
commenced management of GAM International and GAM Global Funds on April 20, 1990
after moving to the London office. He is now responsible for a number of GAM's
other global and international funds, including the offshore fund, GAM Universal
US$ Inc.
GAM PACIFIC BASIN FUND. Michael S Bunker, Investment Director, has overall
responsibility for Asian investment policy. He has over 20 years' investment
experience, primarily in Asian markets. He commenced management of GAM Pacific
Basin Fund on May 6, 1987. Mr Bunker also manages the offshore fund GAM Pacific
Inc. Mr Bunker is now based in London after having lived in Hong Kong for three
years.
GAM JAPAN CAPITAL FUND. Paul S Kirkby, Investment Director, is responsible for
investment in the Japanese market. Prior to joining GAM in 1985, as a Senior
Fund Manager in Hong Kong, he was an investment analyst with New Japan
Securities Co. Ltd in Tokyo. He commenced management of GAM Japan Capital Fund
on July 1, 1994. Mr Kirkby also manages the offshore fund GAM Japan Inc. Mr
Kirkby is now based in London having lived in Hong Kong for seven years.
GAM ASIAN CAPITAL FUND. Adrian L Cantwell, Investment Director, is responsible
for Asia ex Japan portfolios. Prior to joining GAM in 1990, he was a Director of
Gartmore Limited, Hong Kong, responsible for South East Asian investment. He
commenced management of GAM Asian Capital Fund on May 12, 1995. Mr Cantwell also
manages the offshore funds GAM Asian Inc. and GAM Singapore/Malaysia Inc. Mr
Cantwell has lived in Hong Kong since 1985.
GAM EUROPE FUND. John Bennett, Investment Director, is responsible for European
markets. Prior to joining GAM in 1993, he was a Senior Fund Manager at Ivory &
Sime, responsible for Continental European equity portfolios. He commenced
management of GAM Europe Fund on January 1, 1993. Mr Bennett also manages the
offshore fund GAM Pan European Inc. Mr Bennett is based in Edinburgh.
GAM NORTH AMERICA FUND. Fayez Sarofim founded Fayez Sarofim & Co in 1958 and is
the majority shareholder, President and Chairman of the Board. The firm
currently manages aggregate assets of approximately $38 billion under the
supervision of Mr. Sarofim. Mr. Sarofim is also a director of Allegheny
Teledyne, Inc., Argonaut Group, Unitrin, Inc., Imperial Holly Corp. and EXOR
Group. He commenced management of GAM North America Fund on June 29, 1990. Mr
Sarofim also manages the offshore fund GAM US Inc.
GAMERICA CAPITAL FUND. Gordon Grender, Director, has been associated with the
GAM group since 1983. He has been actively involved in fund management in North
American stock markets since 1974. He commenced management of GAMerica Capital
Fund on May 12, 1995. Mr Grender also manages GAMerica Inc., an offshore fund
with similar investment objectives.
GAM is an indirect subsidiary of Global Asset Management Ltd., which itself is
ultimately controlled, as to approximately 70%, by Lorelock, S.A., which itself
<PAGE>
is controlled by a discretionary trust of which Mr. de Botton, President and
Director of the Company, may be a potential beneficiary and, as to approximately
30%, by St. James's Place Capital plc (a financial services company organized
under the laws of and based in the United Kingdom). Global Asset Management
Ltd., directly or indirectly through its subsidiaries, manages domestic and
foreign mutual funds and managed accounts with aggregate assets of approximately
$9 billion.
Subject to the direction and general supervision of the Board of Directors, GAM
furnishes the Funds with investment research and advice and makes
recommendations with respect to the Funds' purchases and sales of portfolio
securities and brokerage allocation, and both GAM and Sarofim provide such
services with respect to GAM North America Fund. As compensation for such
services, each Fund except GAM North America Fund pays GAM the equivalent to
1.0% per annum of the Fund's average daily net assets. GAM North America Fund
pays a fee equal to 0.50% of its average daily net assets to each of GAM and
Sarofim, representing an aggregate fee equal to 1.0% of its average daily net
assets.
The Funds' expense ratios may be higher than those of most registered investment
companies since the cost of maintaining custody of foreign securities is higher
than those for most domestic funds and the rate of the advisory fee paid by each
Fund exceeds that of most registered investment companies.
The Funds pay for all expenses of their operations.
DISTRIBUTOR AND SALES AND SERVICE COMPENSATION. GAM Services Inc., an affiliate
of GAM with its principal offices located at 135 East 57th Street, New York, New
York 10022, serves as distributor and principal underwriter of the Funds'
shares. As such, GAM Services compensates financial services firms which sell
shares of the Funds pursuant to agreements with GAM Services. Compensation
payments originate from sales charges paid by shareholders at the time of
purchase and from 12b-1 fees paid out of Fund assets.
Sales charges are deducted from payment for shares at the time of investment and
reallowed to financial services firms as set forth in the table under "Purchase
of Shares." These firms typically pass on a portion of this selling compensation
to their financial representatives who sell shares of the Funds and provide
personal account services to Fund shareholders.
12b-1 fees vary according to the 12b-1 Plan adopted by each Fund for each class
of shares. The Funds pay 12b-1 fees equal to 0.30% annually of the average daily
net assets represented by Class A shares. Of this amount, GAM Services retains
0.05% annually and a service fee of 0.25% is reallowed to financial services
firms. Funds offering Class D shares pay 12b-1 fees equal to 0.50% annually of
those Funds' net assets represented by Class D shares. GAM Services reallows the
entire Class D share 12b-1 fee to financial services firms. In the case of Class
A and Class D share accounts which are not assigned to a financial services
firm, GAM Services retains the entire fee. Distribution fees may be used to pay
sales and service compensation to financial services firms and to defray other
distribution related expenses enumerated in the 12b-1 Plans. Should the fees
collected under the Plans exceed the expenses of GAM Services in any year, GAM
Services would realize a profit.
GAM Services, as distributor for the GAM Money Market Account, collects a fee
paid in part by the GAM Money Market Account pursuant to distribution and
shareholder service arrangements offered by The Reserve Funds and their
principal underwriter.
<PAGE>
GAM Services or the Funds may also contract with banks, trust companies,
broker-dealers or other financial organizations to act as shareholder servicing
agents to provide administrative services for the Funds, such as processing
purchase and redemption transactions, transmitting and receiving funds for the
purchase and sale of shares in the Funds, answering routine inquiries regarding
the Funds, furnishing monthly and year-end statements and confirmations of
purchases and sales of shares, transmitting periodic reports, updated
prospectuses, proxy statements and other communications to shareholders, and
providing other services as agreed from time to time. For these services, each
Fund pays fees to shareholder servicing agents which may vary depending upon the
services provided, but do not exceed an annual rate of 0.25% of the daily net
asset value of the shares of a Fund owned by shareholders with whom the
shareholder servicing agent has a servicing relationship.
CUSTODIAN AND ADMINISTRATOR. Brown Brothers Harriman & Co., 40 Water Street,
Boston, Massachusetts 02109, serves as custodian of the Funds' securities and
cash and as their administrator. Brown Brothers employs subcustodians for the
purpose of providing custodial services for the Funds' foreign assets held
outside the United States.
TRANSFER AGENT; SHAREHOLDER SERVICING AGENTS. Chase Global Fund Services
Company, P.O. Box 2798, Boston, Massachusetts 02208 (the "Transfer Agent")
serves as shareholder service agent, dividend-disbursing agent, transfer agent
and registrar for the Funds. Pursuant to an agreement with GAM Services, the
Transfer Agent also provides services to representatives of financial services
companies on behalf of their customers who are shareholders in the Funds. The
Funds and GAM Services also engage and compensate other entities for serving as
shareholder servicing and subaccounting agents for the benefit of discrete
groups of Fund shareholders.
DESCRIPTION OF SHARES
GAM Funds, Inc., a Maryland corporation, was organized on May 7, 1984. The
Company has eight series of common stock outstanding, each of which may be
divided into two classes of shares, Class A shares and Class D shares. The two
classes of shares of a series represent interests in the same portfolio of
investments, have the same rights, and are generally identical in all respects,
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 the Act or Maryland law. The net
income attributable to each class and dividends payable on the shares of each
class will be reduced by the amount of distribution fees and other expenses of
each class. Class D shares bear higher distribution fees, which will cause the
Class D shares to pay lower dividends than the Class A shares. The Directors, in
the exercise of their fiduciary duties under the Act and Maryland law, will seek
to ensure that no conflicts arise between the Class A and Class D shares of a
Fund.
Each share outstanding is entitled to share equally in dividends and other
distributions and in the net assets of the respective series Fund on
liquidation. Shares are fully paid and nonassessable when issued, freely
transferable, have no pre-emptive, subscription or conversion rights and are
redeemable and subject to redemption under certain conditions described above.
Each share outstanding entitles the holder to one vote. If a Fund is separately
affected by a matter requiring a vote, the shareholders of each such Fund shall
vote separately. The Company is not required to hold annual meetings of
<PAGE>
shareholders, although special meetings will be held for purposes such as
electing or removing directors, changing fundamental policies, or approving an
investment advisory agreement. Shareholders will be assisted in communicating
with other shareholders in connection with removing a director as if Section 16
(c) of the Act were applicable.
ADDITIONAL INFORMATION
This Prospectus does not contain all the information included in the
Registration Statement filed with the SEC with respect to the securities offered
hereby. The Registration Statement, including the exhibits filed therewith, may
be examined at the office of the SEC in Washington, D.C.
Statements contained in this Prospectus as to the contents of any contract or
other document referred to are not necessarily complete and, in each instance,
reference should be made to the copy of such contract or other document filed as
an exhibit to the Registration Statement of which this Prospectus forms a part,
each such statement being qualified in all respects by such reference.
<PAGE>
GLOBAL ASSET MANAGEMENT(R)
GAM FUNDS, INC.
PROSPECTUS
and
APPLICATION
April 30, 1997
No dealer, salesman, or any other person has been authorized to give any
information or to make any representations, other than those contained in this
Prospectus, in connection with the offer contained in this Prospectus, and, if
given or made, such other information or representations must not be relied upon
as having been authorized by the Company. This Prospectus does not constitute an
offer by the Company to sell or a solicitation of any offer to buy any of the
securities offered hereby in any jurisdiction to any person to whom it is
unlawful to make such offer or solicitation in such jurisdiction.
GAM LOGO
<PAGE>
Part B Heading in Statement of
- ------- Additional Information
------------------------
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and Cover Page
History
13. Investment Objectives and Investment Objective and
Policies Policies
14. Management of the Fund Management of the Company
15. Control Persons and Principal Management of the Company,
Holders of Securities Investment Advisory and Other Services
16. Investment Advisory and Investment Advisory and
Other Services Other Services
17. Brokerage Allocation Brokerage Allocation
18. Capital Stock and Other Investment Objective and
Securities Policies
19. Purchase, Redemption and Net Asset Value,
Pricing of Securities Dividends and Taxes;
Being Offered Investment Advisor and
Other Services
20. Tax Status Net Asset Value,
Dividends and Taxes
21. Underwriters Investment Advisory
and Other Services
22. Calculation of Performance Performance Information
Data
23. Financial Statements Financial Statements
Part C
Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C to this Registration Statement
on Form N-1A.
<PAGE>
GAM FUNDS, INC.
135 East 57th Street
New York, NY 10022
Tel: (212) 407-4600/Fax: (212) 407-4684
STATEMENT OF ADDITIONAL INFORMATION
April 30, 1997
This Statement of Additional Information pertains to the funds listed below,
each of which is a separate series of common stock GAM Funds, Inc. (the
"Company"), a diversified open-end management investment company. Each series of
the Company represents a separate portfolio of securities (each a "Fund" and
collectively the "Funds"). The investment objective of each Fund is to seek long
term capital appreciation through investment primarily in equity securities.
Each Fund seeks to achieve its objective by investing primarily within a
particular geographic region in accordance with its own investment policy. There
is no assurance that the Funds will achieve their objective.
The Funds are managed by GAM International Management Limited ("GAM"). Fayez
Sarofim & Co. ("Sarofim") serves as co-investment adviser to the GAM North
America Fund. (GAM and Sarofim are collectively referred to as the "Investment
Advisers".) GAM Services, Inc., an affiliate of GAM ("GAM Services") serves as
the principal underwriter for the Funds' securities.
GAM GLOBAL FUND invests primarily in the United States, Europe,
the Pacific Basin, and Canada.
GAM INTERNATIONAL FUND invests primarily in Europe, the Pacific
Basin and Canada.
GAM PACIFIC BASIN FUND invests primarily in the Pacific Basin,
including Japan, Hong Kong, Korea, Taiwan, Singapore, Malaysia,
Thailand, Indonesia and Australia.
GAM JAPAN CAPITAL FUND invests primarily in Japan.
GAM ASIAN CAPITAL FUND invests primarily in Asia excluding Japan.
GAM EUROPE FUND invests primarily in Europe.
GAM NORTH AMERICA FUND invests primarily in the United States and
Canada.
GAMERICA CAPITAL FUND investing primarily in the United States.
This Statement of Additional Information, which should be kept for future
reference, is not a prospectus. It should be read in conjunction with the
Prospectus of the Funds, dated April 30, 1997, which can be obtained without
cost upon request at the address indicated above.
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TABLE OF CONTENTS
Page
INVESTMENT OBJECTIVE AND POLICIES
Rating of Securities
United States Government Obligations
Repurchase Agreements
Options
Stock Index Futures and Options
Interest Rate Futures and Options
Foreign Currency Transactions
Lending Portfolio Securities
Warrants
Borrowing
Restricted Securities
Future Developments
Investment Restrictions
Risk Considerations
Portfolio Turnover
PERFORMANCE INFORMATION
NET ASSET VALUE, DIVIDENDS AND TAXES
Net Asset Value
Suspension of the Determination of Net Asset Value
Tax Status
MANAGEMENT OF THE COMPANY
Compensation of Directors and Executive Officers
Principal Holders of Securities
INVESTMENT ADVISORY AND OTHER SERVICES
Investment Advisory Contracts
Advisory Fees
Investment Advisers
Distributor and Plans of Distribution
Custodian and Administrator
Transfer Agent
Legal Counsel
Independent Accountants
Reports to Shareholders
BROKERAGE ALLOCATION
FINANCIAL STATEMENTS
-i-
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INVESTMENT OBJECTIVE AND POLICIES
The investment objective and policies of each Fund are described in the
Prospectus under the heading "Investment Objective and Policies and Risk
Considerations." Set forth below is additional information with respect to the
investment objective and policies of each Fund.
RATING OF SECURITIES. Each Fund may invest a substantial portion of its assets
in debt securities issued by companies or governments and their agencies and
instrumentalities if it determines that the long-term capital appreciation of
such debt securities may equal or exceed the return on equity securities. The
debt securities (bonds and notes) in which the Funds may invest will be rated C
or better by Moody's Investors Services, Inc. ("Moody's") or D or better by
Standard & Poor's Corporation ("S&P"), which are the lowest ratings, or, if
unrated, be comparable in quality as determined pursuant to guidelines
established by the Company's Board of Directors, since debt securities of
foreign companies and foreign governments are not generally rated by Moody's or
S&P. Each Fund may, for temporary defensive purposes, invest in debt securities
(with remaining maturities of five years or less) issued by companies and
governments and their agencies and instrumentalities and in money market
instruments denominated in currency of the United States or foreign nations. The
money market instruments include commercial paper which, when purchased, is
rated Prime-1 or better by Moody's or A-1 or better by S&P or, if not rated, is
issued by a company which at the date of investment has an outstanding debt
issue rated Aa or better by Moody's or AA or better by S&P or is of equivalent
investment quality as determined by the Company pursuant to guidelines
established and maintained in good faith by the Board of Directors.
None of the Funds will commit more than 5% of its assets, determined at the time
of investment, to investments in debt securities which are rated lower than
"investment grade" by a rating service. Debt securities rated lower than
"investment grade," also known as "junk bonds," are those debt securities not
rated in one of the four highest categories by a rating service (e.g., bonds
rated lower than BBB by S&P or lower than Baa by Moody's). Junk bonds, and debt
securities rated in the lowest "investment grade," have speculative
characteristics, and changes in economic circumstances or other circumstances
are more likely to lead to a weakened capacity on the part of issuers of such
lower rated debt securities to make principal and interest payments than issuers
of higher rated investment grade bonds. Developments such as higher interest
rates may lead to a higher incidence of junk bond defaults, and the market in
junk bonds may be more volatile and illiquid than that in investment grade
bonds.
UNITED STATES GOVERNMENT OBLIGATIONS. The Funds may invest in securities of the
United States government, its agencies and instrumentalities. United States
government securities include United States Treasury obligations, which include
United States Treasury bills, United States Treasury notes and United States
Treasury bonds; and obligations issued or guaranteed by United States government
agencies and instrumentalities. Agencies and instrumentalities include the
Federal Land Banks, Farmers Home Administration, Central Bank for Cooperatives,
Federal Intermediate Credit Banks, Federal Home Loan Bank, Student Loan
Marketing Association, Federal National Mortgage Association and Government
National Mortgage Association.
REPURCHASE AGREEMENTS. Each Fund may, for temporary defensive purposes, invest
in repurchase agreements. In such a transaction, at the same time a Fund
<PAGE>
purchases a security, it agrees to resell it to the seller and is obligated to
redeliver the security to the seller at a fixed price and time. This establishes
a yield during the Fund's holding period, since the resale price is in excess of
the purchase price and reflects an agreed-upon market rate. Such transactions
afford an opportunity for a Fund to invest temporarily available cash.
Repurchase agreements may be considered loans to the seller collateralized by
the underlying securities. The risk to a Fund is limited to the ability of the
seller to pay the agreed-upon sum on the delivery date; in the event of a
default the repurchase agreement provides that the Fund is entitled to sell the
underlying collateral. If the value of the collateral declines after the
agreement is entered into, however, and if the seller defaults when the value of
the underlying collateral is less than the repurchase price, a Fund could incur
a loss of both principal and interest. The collateral is marked-to-market daily
and the Investment Advisers monitor the value of the collateral in an effort to
determine that the value of the collateral always equals or exceeds the
agreed-upon sum to be paid to a Fund. If the seller were to be subject to a
United States bankruptcy proceeding, the ability of a Fund to liquidate the
collateral could be delayed or impaired because of certain provisions in the
bankruptcy law. Each Fund may only enter into repurchase agreements with
domestic or foreign securities dealers, banks and other financial institutions
deemed to be creditworthy under guidelines approved by the Board of Directors.
OPTIONS. The principal reason for writing covered call options is to realize,
through the receipt of premiums, a greater return than would be realized on a
Fund's portfolio securities alone. In return for a premium, the writer of a
covered call option forfeits the right to any appreciation in the value of the
underlying security above the strike price for the life of the option (or until
a closing purchase transaction can be effected). Nevertheless, the call writer
retains the risk of a decline in the price of the underlying security.
Similarly, the principal reason for writing secured put options is to realize
income in the form of premiums. The writer of a secured put option accepts the
risk of a decline in the price of the underlying security.
Although each Fund generally will purchase or write only those options for which
it believes there is an active secondary market so as to facilitate closing
transactions, there is no assurance that sufficient trading interest to create a
liquid secondary market on a securities exchange will exist for any particular
option or at any particular time, and for some options no such secondary market
may exist. A liquid secondary market in an option may cease to exist for a
variety of reasons. In such event, it might not be possible to effect closing
transactions in particular options. If, as a covered call option writer, a Fund
is unable to effect a closing purchase transaction in a secondary market, it
will not be able to sell the underlying security until the option expires or it
delivers the underlying security upon exercise.
The success of each Fund's options trading activities will depend on the ability
of the Investment Advisers to predict correctly future changes in the prices of
securities. Purchase or sale of options to hedge each Fund's existing securities
positions is also subject to the risk that the value of the option purchased or
sold may not move in perfect correlation with the price of the underlying
security.
It is a condition to the favorable tax treatment afforded to a regulated
investment company, such as the Funds, that each Fund derive less than 30% of
its gross income from the sale or disposition of securities (including certain
options and futures contracts) held for less than three months. This requirement
may limit the extent to which each Fund may engage in trading in options and
<PAGE>
futures (discussed below), and options and futures trading may increase the risk
that a Fund may not satisfy this requirement and that it may therefore become
liable for taxes on its income and gains. The greater leverage in options and
futures trading may also tend to increase the daily fluctuations in the value of
a Fund's shares.
STOCK INDEX FUTURES AND OPTIONS. Each Fund may purchase and sell stock index
futures contracts, and purchase, sell and write put and call options on stock
index futures contracts, for the purpose of hedging its portfolio. A stock index
fluctuates with changes in the market value of the stocks included in the index.
An option on a securities index gives the holder the right to receive, upon
exercise of the option, an amount of cash if the closing level of the securities
index upon which the option is based is greater than, in the case of a call
option, or less than, in the case of a put option, the strike price of the
option. Some stock index options are based on a broad market index, such as the
NYSE Composite Index, or a narrower market index, such as the Standard & Poor's
100. In the case of a stock index future, the seller of the futures contract is
obligated to deliver, and the purchaser obligated to take, an amount of cash
equal to a specific dollar amount multiplied by the difference between the value
of a specific stock index at the close of the last trading day of the contract
and the price at which the agreement is made. No physical delivery of the
underlying stocks in the index is made. If the assets of a Fund are
substantially invested in equity securities, the Fund might sell a futures
contract based on a stock index which is expected to reflect changes in prices
of stocks in the Fund's portfolio in order to hedge against a possible general
decline in market prices. A Fund may similarly purchase a stock index futures
contract to hedge against a possible increase in the price of stocks before the
Fund is able to invest cash or cash equivalents in stock in an orderly fashion.
The effectiveness of trading in stock index futures and options as a hedging
technique will depend upon the extent to which price movements in a Fund's
portfolio correlate with price movements of the stock index selected. Because
the value of an index future or option depends upon movements in the level of
the index rather than the price of a particular stock, whether a Fund will
realize a gain or loss from the purchase, sale or writing of a stock index
future or option depends upon movements in the level of stock prices in the
stock market generally, or in the case of certain indexes, in an industry or
market segment, rather than movements in the price of a particular stock.
In addition to the possibility that there may be an imperfect correlation, or no
correlation at all, between movements in a stock index and the portion of the
portfolio being hedged, the price of stock index futures may not correlate
perfectly with the movement in the stock index due to certain market
distortions. First, all participants in the futures market are subject to margin
deposit and maintenance requirements. Rather than meeting additional margin
deposit requirements, investors may close futures contracts through offsetting
transactions which would distort the normal relationship between the index and
futures markets. Secondly, from the point of view of speculators, the deposit
requirements in the futures market are less onerous than margin requirements in
the securities market. Therefore, increased participation by speculators in the
futures market also may cause temporary price distortions. Due to the
possibility of price distortions in the futures market and because of the
imperfect correlation between movements in the stock index and movements in the
price of stock index futures, a correct forecast of general market trends by the
Investment Advisers still may not result in a successful hedging transaction.
<PAGE>
Successful use of stock index futures by the Funds also is subject to the
ability of the Investment Adviser to predict correctly movements in the
direction of the market. For example, if a Fund has hedged against the
possibility of a decline in the market adversely affecting stocks held in its
portfolio and stock prices increase instead, the Fund will lose part or all of
the benefit of the increased value of its stocks which it has hedged because it
will have offsetting losses in its futures positions.
Each Fund may purchase and sell commodity futures contracts, and purchase, sell
or write options on futures contracts, for bona fide hedging purposes or
otherwise in accordance with applicable rules of the Commodity Futures Trading
Commission (the "CFTC"). CFTC rules permit an entity such as a Fund to acquire
commodity futures and options as part of its portfolio management strategy,
provided that the sum of the amount of initial margin deposits and premiums paid
for unexpired commodity futures contracts and options would not exceed 5% of the
fair market value of the assets of the Fund, after taking into account
unrealized profits and unrealized losses on such contracts it has entered into.
In the case of an option that is in-the-money at the time of purchase, the
in-the-money amount may be excluded in calculating the 5%.
When a Fund enters into a futures contract or writes an option on a futures
contract, it will instruct its custodian to segregate cash or liquid securities
having a market value which, when added to the margin deposited with the broker
or futures commission merchant, will at all times equal the purchase price of a
long position in a futures contract, the strike price of a put option written by
the Fund, or the market value (marked-to-market daily) of the commodity
underlying a short position in a futures contract or a call option written by
the Fund, or the Fund will otherwise cover the transaction.
INTEREST RATE FUTURES AND OPTIONS. Each Fund may hedge against the possibility
of an increase or decrease in interest rates adversely affecting the value of
securities held in its portfolio by purchasing or selling a futures contract on
a specific debt security whose price is expected to reflect changes in interest
rates. However, if a Fund anticipates an increase in interest rates and rates
decrease instead, the Fund will lose part or all of the benefit of the increased
value of the securities which it has hedged because it will have offsetting
losses in its futures position.
A Fund may purchase call options on interest rate futures contracts to hedge
against a decline in interest rates and may purchase put options on interest
rate futures contracts to hedge its portfolio securities against the risk of
rising interest rates. A Fund will sell options on interest rate futures
contracts as part of closing purchase transactions to terminate its options
positions. No assurance can be given that such closing transactions can be
effected or that there will be a correlation between price movements in the
options on interest rate futures and price movements in the portfolio securities
of the Fund which are the subject of the hedge. In addition, a Fund's purchase
of such options will be based upon predictions as to anticipated interest rate
trends, which could prove to be inaccurate. The potential loss related to the
purchase of an option on an interest rate futures contracts is limited to the
premium paid for the option.
Although each Fund intends to purchase or sell commodity futures contracts only
if there is an active market for each such contract, no assurance can be given
that a liquid market will exist for the contracts at any particular time. Many
<PAGE>
futures exchanges and boards of trade limit the amount of fluctuation permitted
in futures contract prices during a single trading day. Once the daily limit has
been reached in a particular contract, no trades may be made that day at a price
beyond that limit. Futures contract prices could move to the daily limit for
several consecutive trading days with little or no trading, thereby preventing
prompt liquidation of futures positions and subjecting some futures traders to
substantial losses. In such event and in the event of adverse price movements, a
Fund would be required to make daily cash payments of variation margin. In such
circumstances, an increase in the value of the portion of the portfolio being
hedged, if any, may offset partially or completely losses on the futures
contract. However, no assurance can be given that the price of the securities
being hedged will correlate with the price movements in a futures contract and
thus provide an offset to losses on the futures contract.
FOREIGN CURRENCY TRANSACTIONS. Since investments in foreign securities will
usually involve currencies of foreign countries, and since each Fund may
temporarily hold funds in foreign or domestic bank deposits in foreign
currencies during the completion of investment programs, the value of the assets
of each Fund as measured in United States dollars may be affected favorably or
unfavorably by changes in foreign currency exchange rates and exchange control
regulations, and the Funds may incur costs in connection with conversions
between various currencies. The Funds may enter into foreign currency exchange
transactions either on a spot (i.e., cash) basis at the spot rate prevailing in
the foreign currency exchange market, or through entering into forward contracts
to purchase or sell foreign currencies. A forward foreign exchange contract
involves an obligation to purchase or sell a specific currency at a future date,
which may be any fixed number of days from the date of the contract agreed upon
by the parties, at a price set at the time of the contract. These contracts are
traded in the interbank market conducted directly between currency traders
(usually large commercial banks) and their customers. A forward contract
generally has no deposit requirement and is consummated without payment of any
commission.
Each Fund may enter into forward foreign exchange contracts for speculative
purposes and under the following circumstances: When a Fund enters into a
contract for the purchase or sale of a security denominated in a foreign
currency, or when a Fund anticipates the receipt in a foreign currency of
dividends or interest payments on such a security which it purchases or already
holds, it may desire to "lock-in" the United States dollar price of the security
or the United States dollar equivalent of such dividend or interest payment, as
the case may be. By entering into a forward contract for the purchase or sale,
for a fixed amount of dollars, of the amount of foreign currency involved in the
underlying security transactions, the Fund will be able to protect itself
against a possible loss resulting from an adverse change in the relationship
between the United States dollar and the subject foreign currency during the
period between the date the security is purchased or sold, or on which the
dividend or interest payment is declared, and the date on which payment is made
or received.
If it is believed that the currency of a particular foreign country may suffer a
substantial decline against the United States dollar or another currency, a Fund
may enter into a forward contract to sell, for a fixed amount of dollars, the
amount of foreign currency approximating the value of some or all of the Fund's
portfolio securities denominated in such foreign currency. The precise matching
of the forward contract amounts and the value of the securities involved will
not generally be possible since the future value of such securities in foreign
currencies will change as a consequence of market movements in the value of
those securities between the date the forward contract is entered into and the
date it matures.
<PAGE>
The projection of short-term currency market movements is extremely difficult,
and the successful execution of a short-term hedging strategy is highly
uncertain. Each Fund will place cash or liquid securities in a separate custody
account of the Fund with the Company's custodian in an amount equal to the value
of the Fund's total assets committed to the consummation of the hedge contracts
or otherwise cover such transactions. The securities placed in the separate
account will be marked-to-market daily. If the value of the securities placed in
the separate account declines, additional cash or liquid securities will be
placed in the account on a daily basis so that the value of the account will
equal the amount of the Fund's uncovered commitments with respect to such
contracts.
The Funds generally will not enter into a forward contract with a term of
greater than one year. At the maturity of a forward contract, a Fund may either
sell the portfolio security and make delivery of the foreign currency, or it may
retain the security and terminate its contractual obligation to deliver the
foreign currency by purchasing an "offsetting" contract with the same currency
trader obligating it to purchase, on the same maturity date, the same amount of
the foreign currency. A Fund may also purchase an "offsetting" contract prior to
the maturity of the underlying contract. There is no assurance that such an
"offsetting" contract will always be available to a Fund.
It is impossible to forecast with absolute precision what the market value of
portfolio securities will be at the expiration of a related forward contract.
Accordingly, it may be necessary for a Fund to purchase additional foreign
currency on the spot market (and bear the expense of such purchase) if the
market value of a security being sold is less than the amount of foreign
currency the Fund is obligated to deliver. Conversely, a Fund may sell on the
spot market some of the foreign currency received upon the sale of the portfolio
security if its market value exceeds the amount of foreign currency the Fund is
obligated to deliver.
If a Fund retains the portfolio security and engages in an offsetting
transaction, the Fund will incur a gain or a loss to the extent that there has
been movement in forward contract prices. If a Fund engages in an offsetting
transaction, it may subsequently enter into a new forward contract to sell the
foreign currency. Should forward prices decline during the period between a
Fund's entering into a forward contract for the sale of a foreign currency and
the date it enters into an offsetting contract for the purchase of the foreign
currency, the Fund will realize a gain to the extent the price of the currency
it has agreed to purchase is less than the price of the currency it has agreed
to sell. Should forward prices increase, the Fund will suffer a loss to the
extent the price of the currency it has agreed to purchase exceeds the price of
the currency it has agreed to sell.
A Fund is not required to enter into hedging transactions with regard to its
foreign currency-denominated securities and will not do so unless deemed
appropriate by the Investment Advisers. Hedging the value of a Fund's portfolio
securities against a decline in the value of a currency does not eliminate
fluctuations in the underlying prices of the securities. Although such contracts
tend to minimize the risk of loss due to a decline in the value of the hedged
currency, at the same time, they tend to limit any potential gain which might
result should the value of such currency increase.
The Funds may purchase or sell options to buy or sell foreign currencies and
options on foreign currency futures, or write such options, as a substitute for
<PAGE>
entering into forward foreign exchange contracts in the circumstances described
above. For example, in order to hedge against the decline in value of portfolio
securities denominated in a specific foreign currency, a Fund may purchase an
option to sell, for a specified amount of dollars, the amount of foreign
currency represented by such portfolio securities. In such case, the Fund will
pay a "premium" to acquire the option, as well as the agreed exercise price if
it exercises the option.
Although each Fund values its assets daily in terms of United States dollars,
the Funds do not intend to convert their foreign currency holdings into United
States dollars on any regular basis. A Fund may so convert from time to time,
and thereby incur certain currency conversion charges. Although foreign exchange
dealers do not generally charge a fee for conversion, they do realize a profit
based on the difference (the "spread") between the prices at which they are
buying and selling various currencies. Thus, a dealer may offer to sell a
foreign currency to a Fund at one rate, while offering a lesser rate of exchange
should the Fund desire to resell that currency to the dealer.
LENDING PORTFOLIO SECURITIES. Each Fund may lend its portfolio securities to
brokers, dealers and financial institutions considered creditworthy when secured
by collateral maintained on a daily marked-to-market basis in an amount equal to
at least 100% of the market value, determined daily, of the loaned securities. A
Fund may at any time call the loan and obtain the return of the securities
loaned. No such loan will be made which would cause the aggregate market value
of all securities lent by a Fund to exceed 15% of the value of the Fund's total
assets. The Fund will continue to receive the income on loaned securities and
will, at the same time, earn interest on the loan collateral. Any cash
collateral received under these loans will be invested in short-term money
market instruments.
WARRANTS. Each Fund may purchase warrants. The holder of a warrant has the right
to purchase a given number of shares of a particular issuer at a specified price
until expiration of the warrant. Such investments can provide a greater
potential for profit or loss than an equivalent investment in the underlying
security. Each Fund may invest up to 10% of its net assets, valued at the lower
of cost or market value, in warrants (other than those that have been acquired
in units or attached to other securities), including warrants not listed on
American or foreign stock exchanges. Prices of warrants do not move in tandem
with the prices of the underlying securities, and are speculative investments.
They pay no dividends and confer no rights other than a purchase option. If a
warrant is not exercised by the date of its expiration, a Fund will lose its
entire investment in such warrant.
BORROWING. Each Fund may borrow from banks for temporary emergency purposes.
Each Fund will maintain continuous asset coverage (that is, total assets
including borrowings, less liabilities exclusive of borrowings) of 300% of the
amount borrowed. If the 300% asset coverage should decline as a result of market
fluctuations or other reasons, a Fund may be required to sell some of its
portfolio holdings within three days to reduce the debt and restore the 300%
asset coverage, even though it may be disadvantageous from an investment
standpoint to sell portfolio holdings at the time.
Borrowing money, also known as leveraging, will cause a Fund to incur interest
charges, and may increase the effect of fluctuations in the value of the
investments of the Fund on the net asset value of its shares. A Fund will not
purchase additional securities for investment while there are bank borrowings
outstanding representing more than 5% of the total assets of the Fund.
<PAGE>
RESTRICTED SECURITIES. The Funds may purchase securities that are not registered
for sale to the general public in the United States, but which can be resold to
institutional investors in the United States, including securities offered
pursuant to Rule 144A adopted by the United States Securities and Exchange
Commission ("SEC"). Provided that a dealer or institutional trading market in
such securities exists, either within or outside the United States, these
restricted securities will not be treated as illiquid securities for purposes of
the Funds' investment restrictions. The Board of Directors will establish
standards for determining whether or not 144A securities are liquid based on the
level of trading activity, availability of reliable price information and other
relevant considerations. The Funds may also purchase privately placed restricted
securities for which no institutional market exists. The absence of a trading
market may adversely affect the ability of the Funds to sell such illiquid
securities promptly and at an acceptable price, and may also make it more
difficult to ascertain a market value for illiquid securities held by the Funds.
FUTURE DEVELOPMENTS. The Funds may take advantage of opportunities in the area
of options and futures contracts and other derivative financial instruments
which are developed in the future, to the extent such opportunities are both
consistent with each Fund's investment objective and permitted by applicable
regulations. The Funds' Prospectus and Statement of Additional Information will
be amended or supplemented, if appropriate in connection with any such
practices.
INVESTMENT RESTRICTIONS. Each Fund has adopted certain investment restrictions
which cannot be changed without approval by holders of a majority of its
outstanding voting shares. As defined in the Investment Company Act of 1940, as
amended (the "Act"), this means the lesser of (a) 67% or more of the shares of
the Fund at a meeting where more than 50% of the outstanding shares are present
in person or by proxy or (b) more than 50% of the outstanding shares of the
Fund.
In accordance with these restrictions, each Fund may not:
1. With respect to 75% of its total assets, invest more than 5% of its total
assets in any one issuer (other than the United States government, its agencies
and instrumentalities) or purchase more than 10% of the voting securities, or
more than 10% of any class of securities, of any one issuer. (For this purpose
all outstanding debt securities of an issuer are considered as one class, and
all preferred stocks of an issuer are considered as one class.)
2. Invest for the purpose of exercising control or management of another
company.
3. Make short sales of securities or purchase any securities on margin, except
for such short-term credits as are necessary for the clearance of transactions.
4. Invest in real estate (including real estate limited partnerships),although
a Fund may invest in marketable securities which are secured by real estate and
securities of companies which invest or deal in real estate.
5. Invest more than 10% of the value of its total assets in securities of
companies which, with their predecessors, have a record of less than three
years' continuous operation.
<PAGE>
6. Purchase or retain the securities of any issuer if any of the officers or
directors of the Company or its investment adviser owns individually more than
1/2 of 1% of the securities of such issuer and together such officers and
directors owning more than 1/2 of 1% own more than 5% of the securities of such
issuer.
7. Concentrate more than 25% of the value of its total assets in any one
industry (including securities of non-United States governments).
8. Make loans, except that this restriction shall not prohibit (1) the purchase
of publicly distributed debt securities in accordance with a Fund's investment
objectives and policies, (2) the lending of portfolio securities, and (3)
entering into repurchase agreements.
9. Borrow money, except from banks for temporary emergency purposes and, in no
event, in excess of 33 1/3% of its total assets at value or cost, whichever is
less; or pledge or mortgage its assets or transfer or assign or otherwise
encumber them in an amount exceeding the amount of the borrowing secured
thereby.
10. Underwrite securities issued by others except to the extent the Company may
be deemed to be an underwriter, under the Federal securities laws, in connection
with the disposition of its portfolio securities.
11. Purchase securities of other investment companies, except (a) in connection
with a merger, consolidation, reorganization or acquisition of assets or (b) a
Fund may purchase securities of closed-end investment companies up to (i) 3% of
the outstanding voting stock of any one investment company (including for this
purpose investments by any other series of the Company), (ii) 5% of the total
assets of the Fund with respect to any one investment company and (iii) 10% of
the total assets of the Fund in the aggregate.
12. Invest in interests in oil, gas or other mineral exploration or development
programs (including leases), although it may invest in the securities of
companies which invest in or sponsor such programs.
13. Invest more than 15% of the Fund's net assets in securities which cannot be
readily resold to the public because of legal or contractual restrictions or
because there are no market quotations readily available or in other "illiquid"
securities (including non-negotiable deposits with banks and repurchase
agreements of a duration of more than seven days).
14. Participate on a joint or a joint and several basis in any trading account
in securities.
15. Issue senior securities (as defined in the Act), other than as set forth in
paragraph 9 above and except to the extent that foreign currency forward
contracts may be deemed to constitute a senior security.
16. Invest in commodities or commodity futures contracts, except that each Fund
may enter into forward foreign exchange contracts and may invest up to 5% of its
net assets in initial margin or premiums for futures contracts or options on
futures contracts.
If a percentage restriction (other than the restriction on borrowing in
paragraph 9) is
<PAGE>
adhered to at the time of investment, a subsequent increase or decrease in the
percentage beyond the specified limit resulting from a change in value or net
assets will not be considered a violation. Whenever any investment policy or
investment restriction states a maximum percentage of a Fund's assets which may
be invested in any security or other property, it is intended that such maximum
percentage limitation be determined immediately after and as a result of the
acquisition of such security or property.
RISK CONSIDERATIONS. Investors should carefully consider the risks involved in
investments in securities of companies and governments of foreign nations, which
add to the usual risks inherent in domestic investments. Such special risks
include the lower level of government supervision and regulation of stock
exchanges, broker-dealers and listed companies, fluctuations in foreign exchange
rates, future political and economic developments, and the possible imposition
of exchange controls or other foreign governmental laws or restrictions. In
addition, securities prices in foreign countries are generally subject to
different economic, financial, political and social factors than prices of
securities of United States issuers.
The Company anticipates that the portfolio securities of foreign issuers held by
each Fund generally will not be registered with the SEC nor will the issuers
thereof be subject to the reporting requirements of such agency. In addition,
the governments under which these companies are organized may impose less
government supervision than is required in the United States. Accordingly, there
may be less publicly available information concerning certain of the issuers of
securities held by the Funds than is available concerning United States
companies. In addition, foreign companies are not generally subject to uniform
accounting, auditing and financial reporting standards or to practices and
requirements comparable to those applicable to United States companies.
It is contemplated that the Funds' foreign portfolio securities generally will
be purchased on stock exchanges or in over-the-counter markets located in the
countries in which the principal offices of the issuers of the various
securities are located, if that is the best available market. Foreign stock
exchanges generally have substantially less volume than the New York Stock
Exchange and may be subject to less government supervision and regulation than
those in the United States. Accordingly, securities of foreign companies may be
less liquid and more volatile than securities of comparable United States
companies. Similarly, volume and liquidity in most foreign bond markets is less
than in the United States and, at times, price volatility can be greater than in
the United States.
The Funds may also invest in American Depositary Receipts ("ADRs") or European
Depositary Receipts ("EDRs") representing securities of foreign companies,
including both sponsored and unsponsored ADRs. Unsponsored ADRs may be created
without the participation of the foreign issuer. Holders of these ADRs generally
bear all the cost of the ADR facility, whereas foreign issuers typically bear
certain costs in a sponsored ADR. The bank or trust company depository of an
unsponsored ADR may be under no obligation to distribute shareholder
communications received from the foreign issuer or to pass through voting
rights. The markets for ADRs and EDRs, especially unsponsored ADRs, may be
substantially more limited and less liquid than the markets for the underlying
securities.
Foreign broker-dealers also may be subject to less government supervision than
those in the United States. Although the Funds endeavor to achieve the most
<PAGE>
favorable net results on their portfolio transactions, fixed commissions for
transactions on certain foreign stock exchanges may be higher than negotiated
commissions available on United States exchanges.
With respect to certain foreign countries, there is the possibility of adverse
changes in investment or exchange control regulations, expropriation or
confiscatory taxation, and limitations on the transfer or exchange of funds or
other assets of the Funds. The Funds' ability and decisions to purchase or sell
portfolio securities may be affected by laws or regulations relating to the
convertibility and repatriation of assets. There is also the risk in certain
foreign countries of political or social instability, or diplomatic developments
which could affect United States investments as well as the prices of securities
in those countries. Moreover, individual foreign economies may differ favorably
or unfavorably from the United States economy in such respects as growth of
gross national product, rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payments position.
Because the shares of the Funds are redeemable on a daily basis in United States
dollars, each Fund intends to manage its portfolio so as to give reasonable
assurance that it will be able to obtain United States dollars to the extent
necessary to meet anticipated redemptions. The Funds do not believe that this
consideration will have any significant effects on their portfolio strategies
under present conditions.
PORTFOLIO TURNOVER. Portfolio turnover rate is calculated by dividing the lesser
of a Fund's sales or purchases of portfolio securities for the fiscal year
(exclusive of purchases or sales of all securities whose maturities or
expiration dates at the time of acquisition were one year or less) by the
monthly average value of the securities in a Fund's portfolio during the fiscal
year. A portfolio turnover rate in excess of 100% is considered to be high. A
high portfolio turnover rate may result in higher short-term capital gains to
shareholders for tax purposes and increased brokerage commissions and other
transaction costs borne by the Fund.
PERFORMANCE INFORMATION
The average annual total return of each Fund for the periods ended December 31,
1996 is set forth in the table below. Average annual total return is computed by
finding the average annual compounded rates of return over the periods indicated
that would equate the initial amount invested in a Fund to the redemption value
at the end of the period. All dividends and distributions are assumed to be
reinvested. The results are shown both with and without deduction of the sales
load, since the sales load can be waived for certain investors.
Average Annual Return
---------------------------------------
After Deduction of Without Deduction
Maximum Sales Load of Sales Load
------------------ -----------------
GAM International Fund (Class A)
1 year 3.53% 8.98%
5 years 17.54% 18.75%
10 years 14.89% 15.48%
From inception (1/2/85) 20.55% 21.07%
<PAGE>
GAM International Fund (Class D)
1 year 4.54% 8.33%
From inception (9/5/95) 10.94% 14.06%
GAM Global Fund (Class A)
1 year 7.11% 12.74%
5 years 15.38% 16.57%
10 years 11.76% 12.34%
From inception (5/28/86) 11.55% 12.09%
GAM Global Fund (Class D)
1 year 7.63% 11.53%
From inception (9/5/95) 11.82% 15.09%
GAM Pacific Basin Fund (Class A)
1 year (5.37)% (0.39)%
5 years 9.91% 11.04%
From inception (5/6/87) 9.97% 10.55%
GAM Pacific Basin Fund (Class D)
1 year (4.65)% (1.19)%
From inception (9/5/95) (2.11)% 0.83%
GAM Europe Fund
1 year 15.25% 21.32%
5 years 8.75% 9.87%
From inception (1/1/90) 3.45% 4.21%
GAM North America Fund
1 year 17.89% 24.10%
5 years 9.77% 10.90%
From inception (1/1/90) 11.39% 12.21%
GAM Japan Capital Fund
1 year (4.86)% 0.15%
From inception (7/1/94) (1.02)% 1.03%
GAM Asian Capital Fund
1 year (1.89)% 3.28%
From inception (5/12/95) (3.74)% (0.68)%
GAMerica Capital Fund
1 year 12.40% 18.31%
From inception (5/12/95) 8.28% 11.73%
Prospective investors should note that past results may not be indicative of
future performance. The investment return and principal value of shares of a
Fund will fluctuate so that an investor's shares, when redeemed, may be worth
more or less than their original cost.
<PAGE>
Comparative performance information may be used from time to time in advertising
each Fund's shares. The performance of GAM Global Fund may be compared to the
Morgan Stanley Capital International (MSCI) World Index. The performance of GAM
International Fund may be compared to the MSCI Europe, Australia, Far East
(EAFE) Index. The performance of GAM Pacific Basin Fund may be compared to the
MSCI Pacific Index. The performance of GAM Asian Capital Fund may be compared to
the MSCI Combined Far East Index ex Japan. The performance of GAM Japan Capital
Fund may be compared to the Tokyo Stock Exchange Index. The performance of GAM
North America Fund and GAMerica Capital Fund may be compared to the Standard &
Poor's 500 Composite Stock Price Index and the Dow Jones Industrial Average. The
performance of GAM Europe Fund may be compared to the MSCI Europe and Financial
Times Actuaries World Indices--Europe. Each stock index is an unmanaged index of
common stock prices, converted into U.S. dollars where appropriate. Any index
selected by a Fund may not compute total return in the same manner as the Funds
and may exclude, for example, dividends paid on stocks included in the index and
brokerage or other fees.
NET ASSET VALUE, DIVIDENDS AND TAXES
NET ASSET VALUE. Each Fund determines its net asset value each day the New York
Stock Exchange is open for trading. The New York Stock Exchange is closed on the
following holidays, in addition to Saturdays and Sundays: New Year's Day,
President's Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.
Portfolio securities, including ADR's, EDR's and options, which are traded on
stock exchanges or a national securities market will be valued at the last sale
price as of the close of business on the day the securities are being valued or,
lacking any sales, at the last available bid price. Securities traded in the
over-the-counter market will be valued at the last available bid price in the
over-the-counter market prior to the time of valuation. Money market securities
will be valued at market value, except that instruments maturing within 60 days
of the valuation are valued at amortized cost. The other securities and assets
of each Fund for which market quotations may not be readily available (including
restricted securities which are subject to limitations as to their sale) will be
valued at fair value as determined in good faith by or under the direction of
the Board of Directors. Securities quoted in foreign currencies will be
converted to United States dollar equivalents using prevailing market exchange
rates.
SUSPENSION OF THE DETERMINATION OF NET ASSET VALUE. The Board of Directors may
suspend the determination of net asset value and, accordingly, redemptions for a
Fund for the whole or any part of any period during which (1) the New York Stock
Exchange is closed (other than for customary weekend and holiday closings), (2)
trading on the New York Stock Exchange is restricted, (3) an emergency exists as
a result of which disposal of securities owned by the Fund is not reasonably
practicable or it is not reasonably practicable for the Fund fairly to determine
the value of its net assets, or (4) the Securities and Exchange Commission may
by order permit for the protection of the holders of the Fund's shares.
TAX STATUS. Although each Fund is a series of the Company, it is treated as a
separate corporation for purposes of the Internal Revenue Code of 1986, as
amended (the "Code"). Each Fund expects to meet certain diversification-
of-assets and other requirements in order to qualify under the Code as a
regulated investment company. If it qualifies, a Fund will not be subject to
United States Federal income tax on net ordinary income and net capital gains
<PAGE>
which are distributed to its shareholders within certain time periods specified
in the Code. Each Fund intends to distribute annually all of its net ordinary
income and net capital gains. If a Fund were to fail to distribute timely
substantially all such income and gains, it would be subject to Federal
corporate income tax and, in certain circumstances, a 4% excise tax on its
undistributed income and gains.
Distributions from net ordinary income and net short-term capital gains are
taxable to shareholders as ordinary income. The 70% deduction available to
corporations for dividends received from a Fund will apply to ordinary income
distributions only to the extent that they are attributable to a Fund's dividend
income from United States corporations. Distributions from net long-term capital
gains are taxable to a shareholder as long-term capital gains regardless of the
length of time the shares in respect of which such distributions are received
have been held by the shareholder. Dividends declared in December will be
treated as received in December as long as they are actually paid before
February 1 of the following year.
Income from foreign securities purchased by a Fund may be reduced by a
withholding tax at the source. If as of the fiscal year-end of a Fund more than
50% of the Fund's assets are invested in securities of foreign corporations,
then the Fund may make an election which will result in the shareholders having
the option to elect either to deduct their pro rata share of the foreign taxes
paid by the Fund or to use their pro rata share of the foreign taxes paid by the
Fund in calculating the foreign tax credit to which they are entitled.
Distributions by a Fund will be treated as United States source income for
purposes other than computing the foreign tax credit limitation.
Distributions of net ordinary income or net short-term capital gains received by
a non-resident alien individual or foreign corporation which is not engaged in a
trade or business in the United States generally will be subject to Federal
withholding tax at the rate of 30%, unless such rate is reduced by an applicable
income tax treaty to which the United States is a party. However, gains from the
sale by such shareholders of shares of the Funds and distributions to such
shareholders from long-term capital gains generally will not be subject to the
Federal withholding tax.
Ordinarily, distributions and redemption proceeds earned by a United States
shareholder of a Fund are not subject to withholding of Federal income tax.
However, distributions or redemption proceeds paid by a Fund to a shareholder
may be subject to 31% backup withholding if the shareholder fails to supply the
Fund or its agent with such shareholder's taxpayer identification number or an
applicable exemption certificate.
In addition to the Federal income tax consequences described above relating to
an investment in a Fund, there may be other Federal, state or local tax
considerations that depend upon the circumstances of each particular investor.
Prospective shareholders are therefore urged to consult their tax advisors with
respect to the effect of this investment on their own specific situations.
MANAGEMENT OF THE COMPANY
The name, address, principal occupation during the past five years and other
information with respect to each of the Directors and Executive Officers of the
Company are as follows:
<PAGE>
<TABLE>
<CAPTION>
Name and Address:
Position(s) Held Principal Occupation(s)
With the Company During Past Five Years
----------------- -----------------------
<S> <C> <C>
Gilbert de Botton Chairman, Global Asset Management Limited, investment adviser,
Director/President and Global Asset Management (U.K.) Ltd., holding company, 1983
12 St. James's Place to present; Vice President, Global Asset Management Limited
London SW1A 1NX (Bermuda), investment adviser, 1989 to present.
England
George W. Landau Chairman, Latin American Advisory Board of Coca-Cola
Director International, 1988 to present. Director, Emigrant Savings
2601 South Bayshore Drive Bank, Brazil Equity Fund, Chile Fund, Latin American
Suite 1109 Investment Fund, South America Fund, Latin American Equity
Coconut Grove, FL 33133 Fund, Emerging Markets Telecommunications Fund, Emerging
Markets Infrastructure Fund, Global Asset Management Funds,
and Fundacion Chile. Former President, Americas Society and
the Council of the Americas, 1985-1993.
Therese Meier* Managing Director, Global Asset Management GAM (Schweiz) A.G.,
Director Zurich, 1983 to present.
Muhlebachstrasse 173
8008 Zurich
Switzerland
Madelon DeVoe Talley Author and Investment Consultant; Commissioner, Port Authority
Director of New York and New Jersey; Governor of National Association
876 Park Avenue of Securities Dealers, Inc. (1993-1995), currently a member of
New York, NY 10021 the NASD Selection Committee; Director or Trustee: Alliance
Capital Management, L.P.; Corporate Property Association
Series 1-10, Smith Barney Special Equity and Fixed Income
Series and Trak Series; New York State Industrial Development
Board, Schroders Asian Growth Fund. Member of Investment
Committee - New York State Retirement Fund. Former Trustee,
New York State Teachers Retirement System, 1988 to 1993.
Roland Weiser President, Intervista, business consulting, 1984 to present.
Director Director, GAM Diversity Fund and Unimed Pharmaceuticals, Inc.
86 Beekman Road Former Senior Vice President, Schering Plough Corporation
Summit, New Jersey 07901 (International).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Kevin Blanchfield Chief Operating Officer, Treasurer and Assistant Secretary,
Vice President/Treasurer Global Asset Management (USA) Inc., GAM Investments, Inc. and
135 East 57th Street GAM Services Inc., 1995 to present; Vice President and
New York, NY 10022 Treasurer, Global Asset Management (USA) Inc., GAM
Investments, Inc. and GAM Services Inc., 1993 to 1995; Senior
Vice President - Finance and Administration, Lazard Freres &
Co., 1991 to 1993.
Lisa M. Hurley General Counsel and Secretary, Global Asset Management (USA)
Secretary Inc. and Secretary of GAM Investments, Inc. and GAM Services,
135 East 57th Street Inc., 1996 to present. From October 1993 to May 1996, Senior
New York, NY 10022 Vice President and Secretary of Northstar Investment
Management Corporation and Vice President and Secretary,
Northstar Advantage Funds. Prior to October 1993, Vice
President and General Counsel of National Securities and
Research Corporation and Secretary of the National Funds.
</TABLE>
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS. Each independent Director of
the Company receives annual compensation from the Company of $5,000 per year
plus $500 for each meeting of the Board of Directors attended. Each Director is
reimbursed by the Company for travel expenses incurred in connection with
attendance at Board of Directors meetings. The officers and interested Directors
of the Company do not receive any compensation from the Company.
The name, position(s) and information related to the compensation of each of the
Directors in the most recent fiscal year are as follows.
<TABLE>
<CAPTION>
Aggregate Pension or Estimated Total Compensation
Compensation Retirement Benefits Annual Benefits From the Company and
Name and Position(s) Held From the Accrued as Part of Upon Fund Complex
With the Company Company Company Expenses Retirement Paid to Directors
------------------------- ------------ ------------------- --------------- --------------------
<S> <C> <C>
Gilbert de Botton $0 $0
Director and President
George W. Landau $7,000 $7,000
Director
Therese Meier $0 $0
Director
Madelon DeVoe Talley $7,000 $7,000
Director
Roland Weiser $7,000 $7,000
Director
</TABLE>
<PAGE>
PRINCIPAL HOLDERS OF SECURITIES. As of January 31, 1997, all Directors and
Officers of the Funds as a group owned beneficially or of record less than 1% of
the outstanding securities of any Fund except GAMerica Capital Fund, of which
the group held 2.5%. To the knowledge of the Funds, as of December 31, 1996, no
Shareholders owned beneficially or of record more than 5% of a Fund's
outstanding shares, except as set forth below. Mr. Gilbert de Botton, President
and Director of the Company, may be deemed to have shared voting or investment
power over shares owned by clients or held by custodians or nominees for clients
of Global Asset Management (USA) Inc. or other affiliates of GAM, or by employee
benefit plans for the benefit of employees of GAM its affiliates, as a result of
the indirect ownership of interests in GAM and its affiliates by a trust of
which Mr. de Botton is a potential beneficiary. Mr. de Botton disclaims
beneficial ownership of such shares.
<TABLE>
<CAPTION>
INTERNATIONAL GLOBAL PACIFIC BASIN
Class A Class D Class A Class D Class A Class D
<S> <C> <C> <C> <C> <C> <C>
Enele Co 6.54%
1211 Southwest Ave
Portland, OR 97204
Charles Schwab 22.05% 13.28% 32.29
101 Montgomery St.
San Francisco, CA 94104
Julius Baer Securities 6.08%
330 Madison Ave
New York, NY 10017
Resources Trust Co., Trustee 12.04%
fbo R.C. Erfft, IRA
P.O. Box 5900
Denver, CO 80217
Fox & Co. 8.90%
P.O. Box 976
New York, NY 10268
S. & T. Hardilek 7.4%
P.O. Box 536
Lake City, CO 81235
Resources Trust 5.62%
FBO H.L. Kenna IRA
Denver, CO 80217
Royal Life Insurance Int'l Ltd. 27.91%
Royal Court, Castletown
Isle of Man, BI
Key Trust Co. of Ohio 81.44%
UOA Pension Plan
Cleveland, OH 44114
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EUROPE NORTH AMERICA JAPAN CAPITAL ASIAN CAPITAL GAMERICA
<S> <C> <C> <C> <C> <C>
Blush & Co 5.23% 5.13%
P.O. Box 976
New York, NY 10268
Peter Blum 6.17%
Case Postal
1211 Geneve Switz 999
Fayez Serofim 37.1%
2 Houston Center
Houston, TX 77010
Fox & Co. 17.l3% 12.03% 12.6% 11.5% 23.34%
P.O. Box 976
New York, NY 10268
Northern Trust fbo
Gordon Trust 5.64% 5.94%
P.O. Box 92956
Chicago, IL 60675
Edmond Harmsworth 7.82% 6.78% 10.42%
359 Beacon Street
Boston, MA 02110
Infid & Co. 12.11%
P.O. Box 9005
Church Street Station
New York, NY 10008
Long Island University 6.1%
Brookville, NY 11548
S. Klein Trust 5.59% 5.87%
c/o Rothschild Bank
8034 Zurich, Switzerland
NAV LLC 18.28%
650 Madison Ave.
New York, NY 10022
Post & Co. 5.87% 5.39%
Wall Street Station
New York, NY 10268
Rozenkranz Fndn 19.67%
650 Madison Ave.
New York, NY 10022
Charles Schwab 17.97% 9.92% 30.35% 19.43% 12.57%
101 Montgomery Street
San Francisco, CA 94104
J. & M. Schrem 6.52% 5.36% 7.09% 13.4%
c/o Rothschild Bank
Zolikerstr. 181
CH-8034 Zurich Switz.
</TABLE>
<PAGE>
INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT ADVISORY CONTRACTS. The Amended and Restated Investment Advisory
Contract dated April 14, 1994 (the "GAM Contract") between the Company and GAM,
as amended, was last approved by the Board of Directors (including a majority of
the Directors who were not parties to the GAM Contract or interested persons of
any such party) on behalf of each Fund on October 24, 1996 and by the
shareholders of each Fund (other than GAM Japan Capital Fund, GAMerica Capital
Fund and GAM Asian Capital Fund) on April 14, 1994. The investment advisory
agreement dated June 29, 1990 between the Company and Sarofim (the "Sarofim
Contract") was last approved by the Board of Directors, including a majority of
the Directors who are not parties to the Sarofim Contract or interested persons
of any such party, on October 24, 1996 and by the shareholders of GAM North
America Fund on April 14, 1994. The GAM Contract and the Sarofim Contract will
each continue in effect from year to year thereafter if approved annually by the
Board of Directors or by the vote of a majority of the outstanding shares of
each Fund (as defined in the Act) and, in either event, by the approval of a
majority of those Directors who are not parties to the GAM Contract or the
Sarofim Contract or interested persons of any such party.
The GAM Contract requires GAM to conduct and maintain a continuous review of
each Fund's portfolio and to make all investment decisions regarding purchases
and sales of portfolio securities and brokerage allocation for each Fund other
than GAM North America Fund. GAM will render its services to each fund from
outside the United States. The Sarofim Contract requires Sarofim to provide the
same services to GAM North America Fund subject to the supervision and oversight
of GAM. Sarofim commenced providing investment advisory services to GAM North
America Fund on June 29, 1990.
The GAM Contract and the Sarofim Contract (the "Contracts") each provides that
the Investment Advisers will select brokers and dealers for execution of each
Fund's portfolio transactions consistent with the Company's brokerage policy
(see "Brokerage Allocation"). Although the services provided by broker-dealers
in accordance with the brokerage policy incidentally may help reduce the
expenses of or otherwise benefit the other investment advisory clients of the
Investment Advisers or their affiliates, as well as the Funds, the value of such
services is indeterminable and the Investment Advisers' fees are not reduced by
any offset arrangement by reason thereof.
Each of the Contracts provides that the Investment Advisers shall have no
liability to the Company or to any shareholder of a Fund for any error of
judgment, mistake of law, or any loss arising out of any investment or other act
or omission in the performance by an Investment Adviser of its duties under such
Contracts or for any loss or damage resulting from the imposition by any
government of exchange control restrictions which might affect the liquidity of
a Fund's assets maintained with custodians or securities depositories in foreign
countries or from any political acts of any foreign governments to which such
assets might be exposed, except for liability resulting from willful
misfeasance, bad faith or gross negligence on the Investment Adviser's part or
reckless disregard of its duties under the Contract.
<PAGE>
Each Contract will terminate automatically in the event of its assignment, as
such term is defined under the Act, and may be terminated by each Fund at any
time without payment of any penalty on 60 days' written notice, with the
approval of a majority of the Directors of the Company or by vote of a majority
of the outstanding shares of a Fund (as defined in the Act).
The Company acknowledges that it has obtained its corporate name by consent of
GAM and agrees that if (i) GAM should cease to be the Company's investment
adviser or (ii) Global Asset Management Ltd. should cease to own a majority
equity interest in GAM, the Company, upon request of GAM, shall submit to its
shareholders for their vote a proposal to delete the initials "GAM" from its
name and cease to use the name "GAM Funds, Inc." or any other name using or
derived from "GAM" or "Global Asset Management," any component thereof or any
name deceptively similar thereto, and indicate on all letterheads and other
promotional material that GAM is no longer the Company's investment adviser. If
GAM makes such request because Global Asset Management Ltd. no longer owns a
majority equity interest in GAM, the question of continuing the GAM Contract
must be submitted to a vote of the Company's shareholders. The Company has
agreed that GAM or any of its successors or assigns may use or permit the use of
the names "Global Asset Management" and "GAM" or any component or combination
thereof in connection with any entity or business, whether or not the same
directly or indirectly competes or conflicts with the Company and its business
in any manner.
ADVISORY FEES. For its services to the Funds, GAM receives a quarterly fee of
0.25% of the average daily net assets of each of GAM International Fund, GAM
Global Fund, GAM Pacific Basin Fund, GAM Japan Capital Fund, GAM Asian Capital
Fund, GAMerica Capital Fund and GAM Europe Fund during the quarter preceding
each payment; and GAM and Sarofim each receives a quarterly fee equal to 0.125%
of the average daily net assets of GAM North America Fund. In each case the
aggregate advisory fees are equivalent to an annual fee of 1.0% of the average
daily net assets of each Fund during the year. The level of advisory fees paid
by each Fund is higher than the rate of advisory fee paid by most registered
investment companies. The actual advisory fee paid by each Fund during the
fiscal years ended December 31, 1996, 1995 and 1994 are set forth below:
<TABLE>
<CAPTION>
Inter- Pacific North Japan GAMerica Asian
national Global Basin Europe America Capital Capital Capital
-------- ------ ------- ------ ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1996 $8,746,443 $206,365 $710,064 $270,703 $57,701 $350,646 $23,247 $66,992
1995 $3,085,111 $208,022 $414,221 $203,030 $38,934 $57,489 $16,082 $28,041
1994 $1,239,629 $241,333 $461,985 $237,793 $20,883 $31,606 NA NA
</TABLE>
Expenses incurred in connection with each Fund's organization, initial
registration and initial offering under Federal and state securities laws,
including printing, legal and registration fees, and the period over which such
expenses are amortized, are set forth below (except for the expenses of GAM
International Fund, GAM Global Fund, GAM Pacific Basin Fund, GAM Europe Fund and
GAM North American Fund, which have been fully amortized):
Japan GAMerica Asian
Capital Capital Capital
------- -------- -------
Organizational Expenses $34,166 $30,036 $30,036
Amortized over 5 years beginning 7/1/94 5/12/95 5/12/95
<PAGE>
The expense ratio of each Fund may be higher than that of most registered
investment companies since the cost of maintaining the custody of foreign
securities is higher than that for most domestic funds and the rate of advisory
fees paid by the Funds exceeds that of most registered investment companies. In
addition, each Fund bears its own operating expenses.
INVESTMENT ADVISERS. All of the Investment Advisers are registered under the
United States Investment Advisers Act of 1940, as amended. GAM is controlled by
and under common control with other investment advisers (as described below)
which have substantial experience managing foreign mutual funds and which have
aggregate assets under management of approximately $9 billion. Sarofim has
aggregate assets under management of approximately $38 billion.
The Directors of GAM and their principal occupations are as follows:
Name and Position Held
with Investment Adviser Principal Occupation
- --------------------------------------------------------------------------------
Gilbert de Botton, Director. See "Management of the Company" above.
Count Ulric von Rosen, Director. President, Bonnier Medical Division of Bonnier
Medical Group, Sweden.
Paul S. Kirkby, Director. Investment Director, Global Asset Management (H.K.)
Ltd.
David J. Miller, Director. Finance Director, Global Asset Management (U.K.) Ltd.
Alan McFarlane, Director. Managing Director (Institutional), Global Asset
Management Ltd., investment adviser.
Denis G. Raeburn, Director. Managing Director, Global Asset Management Ltd. and
Global Asset Management (U.K.) Ltd., holding company.
Gordon Grender, Director. Investment manager.
GAM is a wholly-owned subsidiary of Global Asset Management (U.K.) Limited, a
holding company. Global Asset Management Ltd., an investment adviser organized
under the laws of Bermuda, controls the Investment Adviser through its
wholly-owned subsidiaries, Greenpark Management N.V. and GAMAdmin B.V. (the
latter of which is the direct parent of Global Asset Management (U.K.) Limited).
Lorelock, S.A., which is controlled directly by Metrolis Anstalt, a Lichtenstein
company, and indirectly by a discretionary trust of which Protec Trust
Management Establishment is trustee and Mr. de Botton, a Director and President
of the Fund, may be deemed to be a beneficiary, owns approximately 70% of the
voting securities of
<PAGE>
Global Asset Management Ltd. St. James's Place Capital plc, an international,
diversified financial services company, owns approximately 30% through its
wholly-owned subsidiary J. Rothschild Investment Management Ltd. St. James's
Place Capital plc controls, individually and collectively and directly and
indirectly, a number of subsidiaries, which provide financial services and
investment management services for various investment companies, among others,
and which are involved internationally in various financial service businesses.
The Directors and principal executive officers of Sarofim and their principal
occupations are as follows:
Fayez S. Sarofim Chairman, Director and President, Sarofim
Raye G. White Executive Vice President, Secretary
-Treasurer and Director, Sarofim
Ralph B. Thomas Senior Vice President, Sarofim
William K. McGee, Jr. Senior Vice President, Sarofim
Russell M. Frankel Senior Vice President, Sarofim
Charles E. Sheedy Senior Vice President, Sarofim
Russell B. Hawkins Senior Vice President, Sarofim
A majority of the outstanding stock of Sarofim is owned by Fayez S. Sarofim. In
addition, Mr. Sarofim is a director of Allegheny Teledyne, Inc., Unitrin, Inc.,
Argonaut Group, Imperial Holly Corp. and EXOR Group, each of which is a publicly
traded corporation with principal offices in the United States. Mr. Sarofim is a
past director of Teledyne, Inc., MESA, Inc., Alley Theatre, Houston Ballet
Foundation and the Museum of Fine Arts Houston.
PRINCIPAL UNDERWRITER AND PLANS OF DISTRIBUTION. The Company has entered into
distribution agreements (the "Distribution Agreements") with GAM Services under
which GAM Services has agreed to act as principal underwriter and to use
reasonable efforts to distribute each Fund's Class A and Class D shares. GAM
Services is an indirect wholly-owned subsidiary of Global Asset Management Ltd.,
which also controls GAM.
Pursuant to the Distribution Agreements, GAM Services receives the sales load on
sales of each Class of the Funds' shares and reallows a portion of the sales
load to dealers/brokers. GAM Services also receives the distribution fees
payable pursuant to the Funds' Plans of Distribution for Class A and Class D
Shares described below (the "Plans"). The Distribution Agreements may be
terminated at any time upon 60 days' written notice, without payment of a
penalty, by GAM Services, by vote of a majority of the outstanding class of
voting securities of the affected Fund, or by vote of a majority of the
Directors of the Fund who are not "interested Persons" of the Fund and who have
no direct or indirect financial interest in the operation of the Distribution
Agreements. The Distribution Agreements will terminate automatically in the
event of their assignment.
<PAGE>
In addition to the amount paid to dealers pursuant to the sales charge table in
the Prospectus, GAM Services from time to time may offer assistance to dealers
and their registered representatives in the form of business and educational or
training seminars. Dealers may not use sales of any of the Funds' shares to
qualify for or participate in such programs to the extent such may be prohibited
by a dealer's internal procedures or by the laws of any state or any
self-regulatory agency, such as the National Association of Securities Dealers,
Inc. Costs associated with incentive or training programs are borne by GAM
Services and paid from its own resources or from fees collected under the Plans.
GAM Services from time to time may reallow all or a portion of the sales charge
on Class A and Class D shares to individual selling dealers. Such additional
reallowance generally will be made only when the selling dealer commits to
substantial marketing support such as internal wholesaling through dedicated
personnel, internal communications and mass mailings.
Each Fund has adopted separate distribution plans under Rule 12b-1 of the 1940
Act for each class of its shares. The Plans permit each Fund to compensate GAM
Services in connection with activities intended to promote the sale of each
class of shares of each Fund. Pursuant to the Plan for Class A shares, each Fund
may pay GAM Services up to 0.30% of average daily net assets of the Fund's Class
A shares. Under the Plan for Class D shares, each Fund may pay GAM Services up
to 0.50% of the average daily net assets attributable to Class D shares of the
Fund. Expenditures by GAM Services under the Plans may consist of: (i)
commissions to sales personnel for selling shares of the Funds; (ii)
compensation, sales incentives and payments to sales, marketing and service
personnel; (iii) payments to broker-dealers and other financial institutions
that have entered into agreements with GAM Services in the form of a Dealer
Agreement for GAM Funds, Inc. for services rendered in connection with the sale
and distribution of shares of the Funds; (iv) payment of expenses incurred in
sales and promotional activities, including advertising expenditures related to
the Funds; (v) the costs of preparing and distributing promotional materials;
(vi) the cost of printing the Funds' Prospectus and SAI for distribution to
potential investors; and (vii) other activities that are reasonably calculated
to result in the sale of shares of the Funds.
A portion of the fees paid to GAM Services pursuant to the Plans not exceeding
0.25% annually of the average daily net assets of each Fund's shares may be paid
as compensation for providing services to each Fund's shareholders, including
assistance in connection with inquiries related to shareholder accounts (the
"Service Fees"). In order to receive Service Fees under the Plans, participants
must meet such qualifications as are established in the sole discretion of GAM
Services, such as services to each Fund's shareholders; services providing each
Fund with more efficient methods of offering shares to coherent groups of
clients, members or prospects of a participant; services permitting more
efficient methods of purchasing and selling shares, or transmission of orders
for the purchase or sale if shares by computerized tape or other electronic
equipment; or other processing.
The Directors have concluded that there is a reasonable likelihood that the
Plans will benefit each Fund and its shareholders and that the Plans should
result in greater sales and/or fewer redemptions of Fund shares. On a quarterly
basis, the Directors will review a report on expenditures under the Plans and
the purposes for which expenditures were made. The Directors will conduct an
additional, more extensive review annually in determining whether the Plans
shall be continued. Continuation of the Plans from year to year is contingent on
annual approval by a majority of the Directors acting separately on behalf of
each Fund and class and by a majority of the Directors who are not "interested
persons" (as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of the Plans or any related agreements (the
"Plan Directors"). The Plans provide that they may not be amended to increase
materially the costs that a Fund may bear pursuant to the applicable Plan
without approval of the shareholders of the affected class of shares of each
<PAGE>
Fund and that other material amendments to the Plans must be approved by a
majority of the Plan Directors acting separately on behalf of each Fund, by vote
cast in person at a meeting called for the purpose of considering such
amendments. The Plans further provide that while each Plan is in effect, the
selection and nomination of Directors who are not "interested persons" shall be
committed to the discretion of the Directors who are not "interested persons." A
Plan may be terminated at any time by vote of a majority of the Plan Directors
or a majority of the outstanding Class of shares of the affected Fund to which
the Plan relates.
The total dollar amount (000's omitted) and manner in which amounts paid by each
class of shares of the Funds under the Plans during the last fiscal year were
spent is set forth below:
International Fund
Class A Class D
------- -------
Advertising $ 10.8 $ 0.3
Printing/Mailing Prospectus/
SAI to Potential Investors 111.5 1.8
Compensation to Dealers 215.3 100.8
Compensation to Sales Personnel 130.6 4.1
Other* 187.1 33.0
----- ----
Total Disbursements $655.3 $111
Global Fund
Class A Class D
------- -------
Advertising $0.2 $ -
Printing/Mailing Prospectus/
SAI to Potential Investors 2.4 0.2
Compensation to Dealers 3.8 1.7
Compensation to Sales Personnel 2.8 0.4
Other* 3.9 0.4
----- ----
Total Disbursements $13.1 $2.7
Pacific Basin Fund
Class A Class D
------- -------
Advertising $0.8 $ -
Printing/Mailing Prospectus/
SAI to Potential Investors 8.4 -
Compensation to Dealers 7.2 7.8
Compensation to Sales Personnel 9.9 0.1
Other* 14.1 0.1
----- ----
Total Disbursements $40.4 8.0
<PAGE>
Japan Capital Fund
Class A
- -------
Advertising $0.6
Printing/Mailing Prospectus/
SAI to Potential Investors 6.3
Compensation to Dealers 2.8
Compensation to Sales Personnel 7.4
Other* 10.6
-----
Total Disbursements $27.8
Asian Capital Fund
Class A
- -------
Advertising $0.1
Printing/Mailing Prospectus/
SAI to Potential Investors 0.8
Compensation to Dealers 0.9
Compensation to Sales Personnel 0.9
Other* 1.4
-----
Total Disbursements $4.1
Europe Fund
Class A
- -------
Advertising $0.4
Printing/Mailing Prospectus/ 3.9
SAI to Potential Investors
Compensation to Dealers 2.7
Compensation to Sales Personnel 4.5
Other* 6.5
-----
Total Disbursements $18.0
<PAGE>
North America Fund
Class A
- -------
Advertising $0.1
Printing/Mailing Prospectus/
SAI to Potential Investors 1.0
Compensation to Dealers 0.3
Compensation to Sales Personnel 1.1
Other* 1.6
-----
Total Disbursements $4.1
GAMerica Capital Fund
Class A
- -------
Advertising $ -
Printing/Mailing Prospectus/ 0.3
SAI to Potential Investors
Compensation to Dealers 0.1
Compensation to Sales Personnel 0.4
Other* 0.6
-----
Total Disbursements $1.4
- -----------------------
* Includes travel and entertainment costs of internal sales personnel,
communications costs, establishment costs for regional sales personnel and
fulfillment expenses.
------------------------
The aggregate dollar amount of underwriting commissions and the amount retained
by the Distributor for each of the last 2 fiscal years is a follows:
<TABLE>
<CAPTION>
1996
(000's omitted)
Class A Class D
------- -------
Aggregate After Reallowance Aggregate After Reallowance
<S> <C> <C> <C> <C>
International Fund $9,386 $3,591 $584 $199
Global Fund 217 65 23 7
Pacific Basin Fund 215 91 15 6
Japan Capital Fund 122 59 NA
Asian Capital Fund 6 3 N/A
Europe Fund 17 11 N/A
North America Fund 9 2 N/A
GAMerica Fund -- -- N/A
1995
(000's omitted)
Class A Class D*
Aggregate After Reallowance Aggregate After Reallowance
International Fund $2,523 $1,656 $ -- $ --
Global Fund 101 64 -- --
Pacific Basin Fund 110 80 -- --
Japan Capital Fund 8 7
Asian Capital Fund 9 8
Europe Fund 16 15
North America Fund 25 22
GAMerica Fund 2 2
*Class D Shares were first offered on September 5, 1995.
</TABLE>
<PAGE>
CUSTODIAN AND ADMINISTRATOR. Brown Brothers Harriman & Co., 40 Water Street,
Boston, Massachusetts 02109 ("Brown Brothers"), serves as custodian of the
Company's securities and cash and as its fund accounting agent and
administrator. As such, Brown Brothers maintains certain records for the Company
required by the Act and applicable Federal and state tax laws, keeps books of
account, renders reports and statements, including financial statements, and
disburses funds in payment of the Company's bills and obligations.
Brown Brothers is reimbursed by the Company for its disbursements, expenses and
charges (including counsel fees but excluding salaries and usual overhead
expenses) incurred in connection with the foregoing services and receives a fee
from the Company based on a fee schedule in effect from time to time (which is
based on the net asset value of each Fund). The agreement provides for
termination by either party on 60 days' written notice.
TRANSFER AGENT. Chase Global Funds Service Company, P.O. Box 2798, Boston,
Massachusetts 02208, serves as shareholder service agent, dividend-disbursing
agent, transfer agent and registrar for the Funds. The Funds also engage other
entities to act as shareholder servicing agents and to perform subaccounting
services for the benefit of discrete groups of Fund shareholders.
LEGAL COUNSEL. Coudert Brothers, 1114 Avenue of the Americas, New York, New York
10036, acts as legal counsel for the Funds and GAM.
INDEPENDENT ACCOUNTANTS. Coopers & Lybrand L.L.P., One Post Office Square,
Boston, MA 02109, are the independent accountants for the Company for the fiscal
year ending December 31, 1997. In addition to reporting annually on the
financial statements of each Fund, the Company's accountants will review certain
filings of the Company with the SEC and will prepare the Company's Federal and
state corporation tax returns.
REPORTS TO SHAREHOLDERS. The fiscal year of the Company ends on December 31.
Shareholders of each Fund will be provided at least semi-annually with reports
showing the portfolio of the Fund and other information, including an annual
report with financial statements audited by independent accountants.
BROKERAGE ALLOCATION
The Contracts provide that the Investment Advisers shall be responsible for the
selection of brokers and dealers for the execution of the portfolio transactions
of each Fund and, when applicable, the negotiation of commissions in connection
therewith.
Purchase and sale orders will usually be placed with brokers who are selected
based on their ability to achieve "best execution" of such orders. "Best
execution" means prompt and reliable execution at the most favorable security
price, taking into account the other provisions hereinafter set forth. The
<PAGE>
determination of what may constitute best execution and price in the execution
of a securities transaction by a broker involves a number of considerations,
including the overall direct net economic result to the Fund (involving both
price paid or received and any commissions and other costs paid), the efficiency
with which the transaction is effected, the ability to effect the transaction at
all where a large block is involved, the availability of the broker to stand
ready to execute possibly difficult transactions in the future, and the
financial strength and stability of the broker. Such considerations are weighed
by the Investment Advisers in determining the overall reasonableness of
brokerage commissions.
Each Investment Adviser is authorized to allocate brokerage and principal
business to brokers who have provided brokerage and research services, as such
services are defined in Section 28(e) of the Securities Exchange Act of 1934, as
amended (the "1934 Act"), for the Company and/or other accounts for which the
Investment Adviser exercises investment discretion (as defined in Section
3(a)(35) of the 1934 Act) and, as to transactions for which fixed minimum
commission rates are not applicable, to cause a Fund to pay a commission for
effecting a securities transaction in excess of the amount another broker would
have charged for effecting that transaction, if the Investment Adviser
determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage and research services provided by such
broker, viewed in terms of either that particular transaction or the Investment
Adviser's overall responsibilities with respect to the Fund and the other
accounts as to which it exercises investment discretion. In reaching such
determination, the Investment Advisers will not be required to place or to
attempt to place a specific dollar value on the research or execution services
of a broker or on the portion of any commission reflecting either of said
services.
Research services provided by brokers to the Investment Advisers includes that
which brokerage houses customarily provide to institutional investors and
statistical and economic data and research reports on particular companies and
industries. Research furnished by brokers may be used by each Investment Adviser
for any of its accounts, and not all such research may be used by the Investment
Advisers for the Funds.
The amount of brokerage commissions paid by each Fund during the three fiscal
years ended December 31, 1996 are set forth below:
<TABLE>
<CAPTION>
Inter- Pacific North Japan GAMerica Asian
national Global Basin Europe America Capital Capital Capital
-------- ------ ------- ------ ------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1996 $3,778,350 $109,863 $362,709 $ 93,545 $2,512 $139,479 $3,385 $47,627
1995 706,834 51,949 268,565 149,546 3,906 96,322 6,336 30,158
1994 614,271 209,240 165,154 120,013 2,304 41,233 NA NA
</TABLE>
FINANCIAL STATEMENTS
The audited financial statements of each Fund for the fiscal year ended December
31, 1996 and the report of the Funds' independent auditors in connection
therewith are included in the 1996 Annual Report to Shareholders and are
incorporated by reference in this Statement of Additional Information.
<PAGE>
GAM Funds, Inc.
Post-Effective Amendment No. 28
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.
(a) FINANCIAL STATEMENTS:
The following financial statements for the year ended December
31, 1996 are incorporated by reference to the Annual Report to
shareholders of the following funds: GAM International,
Global, Pacific Basin, Europe, Japan Capital, North America,
Asian Capital and GAMerica Capital Funds:
Statements of Investments
Statements of Assets and Liabilities
Statements of Operations
Statements of Changes in Net Assets
Notes to Financial Statements
(b) EXHIBITS:
(1)(a) Articles of Incorporation of Registrant, as amended
or supplemented from time to time, are incorporated
by reference to the Registrant's Registration
Statement on Form N-1A which has been previously
filed with the Commission ("Form N-1A").
(1)(b) Certificate of Correction to the Registrant's
Articles of Incorporation is incorporated by
reference to the Registrant's Form N-SAR filed for
the period ended December 31, 1995.
(1)(c) Articles Supplementary to the Registrant's Articles
of Incorporation increasing number of authorized
shares and classifying shares of each of the Funds as
Class A Shares or Class D Shares are incorporated by
reference to the Registrant's Form N-SAR filed for
the period ended December 31, 1995.
(1)(d) Articles of Amendment to the Registrant's Articles of
Incorporation redesignating the shares of each of the
Funds as Class A Shares are incorporated by reference
to PEA No. 27 to Registrant's Registration Statement
("PEA 27").
(1)(e) Articles Supplementary adding GAM Mid-Cap U.S. Fund
are incorporated by reference to PEA 27.
<PAGE>
(2) Bylaws of Registrant are incorporated herein by
reference to the Registrant's Post-Effective
Amendment No. 4 to the Registration Statement on Form
N-1A, filed on December 31, 1985 ("PEA No. 4").
(3) Not applicable.
(4) Specimen stock certificates of the Registrant are
incorporated herein by reference to PEA No. 4.
(5)(a) Amended and Restated Investment Advisory Agreement
with GAM International Management Limited, dated
April 14, 1994, is incorporated by reference to PEA
No. 27.
(5)(b) Amendment No. 1 to Amended and Restated Investment
Advisory Agreement with GAM International Management
Limited, dated March 10, 1995, is incorporated by
reference to PEA 27 .
(5)(c) Amendment No. 2 to Amended and Restated Investment
Advisory Agreement with GAM International Management
Limited, dated August 17, 1995, is incorporated by
reference to PEA 27.
(5)(d) Investment Advisory Agreement with Fayez Sarofim &
Co., dated June 29, 1990, is incorporated herein by
reference to the Registrant's Post-Effective
Amendment No. 15 to the Registration Statement on
Form N-1A, filed on August 29, 1990.
(5)(e) Investment Advisory Agreement with Forstmann-Leff
Associates Inc., dated August 17, 1995, is
incorporated by reference to PEA 27.
(6)(a) Second Amended and Restated Distribution Agreement
For Class A Shares with GAM Services, Inc. dated
November 1, 1996 is filed herewith.
(6)(b) First Amended Distribution Agreement For Class D
Shares with GAM Services, Inc., dated November 1,
1996, is filed herewith.
(6)(c) Amended Form of Dealer Agreement between GAM
Services, Inc. and designated dealers is filed
herewith.
(7) Not Applicable.
(8) Custodian Agreement with Brown Brothers Harriman &
Co., dated April 26, 1995, is incorporated by
reference to PEA No. 26.
(9) Transfer Agency Agreement with Chase Global Funds
Service Company (as successor to AIM Financial
Services, Inc.), as amended, is incorporated herein
by reference to the Registrant's Post-Effective
Amendment No. 2 to the Registration Statement on Form
N-1A, filed on June 26, 1985, the Registrant's
Post-Effective Amendment No. 6 to the Registration
Statement on Form N-1A, filed on October 31, 1986,
and the Registrant's Post-Effective Amendment No. 11
to the Registration Statement on Form N-1A, filed on
April 27, 1989.
<PAGE>
(9)(b) Administration Agreement with Brown Brothers Harriman
& Co. dated October 1, 1995 is filed herewith.
(10) Opinion of Counsel is incorporated herein by
reference to the Registrant's Rule 24f-2 Notice for
the Registrant's fiscal year ended December 31, 1995,
filed on February 21, 1997.
(11) Consent of Coopers & Lybrand L.L.P. is filed
herewith.
(12) Not Applicable.
(13)(a) Subscription Agreement with Global Asset Management
(USA) Inc. for shares of GAM Mid-Cap U.S. Fund, dated
September 5, 1995, is incorporated by reference to
PEA 27.
(14) Not Applicable.
(15)(a) Class D Distribution Plan adopted by the Registrant
pursuant to Rule 12b-1 under the Investment Company
Act of 1940, as amended, (the "1940 Act") is
incorporated by reference to PEA 27.
(15)(b) Class A Distribution Plan adopted by the Registrant
pursuant to Rule 12b-1 under the 1940 Act is filed
herewith.
(16) Schedule of computation of performance quotations
provided in the Statement of Additional Information
is filed herewith.
(17) Financial Data Schedules are filed herewith.
(18) Amended Multiple Class Plan For Class A and D Shares
adopted by the Registrant pursuant to Rule 18f-3
under the 1940 Act is filed herewith.
(19) Powers of Attorney for Mr. Weiser, Mrs. Meier, Mrs.
Talley, Mr. Landau and Mr. de Botton are filed
herewith.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
N/A
<PAGE>
ITEM 26. NUMBER OF HOLDERS OF SECURITIES.
Number of Record Holders
Title of Series as of January 31, 1997
--------------- -------------------------
GAM International Fund
Class A Common Stock 20,951
Class D Common Stock 1,309
GAM Global Fund
Class A Common Stock 594
Class D Common Stock 32
GAM Pacific Basin Fund
Class A Common Stock 846
Class D Common Stock 35
GAM Europe Fund
Class A Common Stock 215
GAM North America Fund
Class A Common Stock 67
GAM Japan Capital Fund
Class A Common Stock 222
GAMerica Capital Fund
Class A Common Stock 35
GAM Asian Capital Fund
Class A Common Stock 111
ITEM 27. INDEMNIFICATION.
All officers, directors, employees and agents of the Registrant
are to be indemnified to the fullest extent permitted by law for
any liabilities of any nature whatsoever incurred in connection
with the affairs of the Registrant, except in cases where willful
misfeasance, bad faith, gross negligence or reckless disregard of
duties to the Registrant are established. See Article NINTH of
the Articles of Incorporation of the Registrant, as amended, for
a more complete description of matters related to
indemnification.
GAM Services Inc. ("GAM Services"), the Registrant's principal
underwriter, will be indemnified against all claims, demands,
liabilities and expenses which may be incurred by it arising out
of any untrue statement, or alleged untrue statement, of a
material fact contained in the Registrant's registration
statement or material omission, or alleged material omission,
therein.
<PAGE>
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISERS.
PAUL S. KIRKBY
Global Asset Management (H.K.) Ltd., 1801 Two Exchange Square,
Central, Hong Kong, investment adviser, director, 1985 to
present.
GAM (Asia) Retirement Scheme, 1801 Two Exchange Square,
Central, Hong Kong, trustee, 1986 to present.
Hanningfield Investments Ltd., 1801 Two Exchange Square,
Central, Hong Kong, investment adviser, director, 1987 to
present.
GAM Japan Inc. and GAM Pacific Inc., Craigmuir Chambers, P.O.
Box 71, Road Town, Tortola, British Virgin Islands, director.
Exeter Investments Ltd., 11/F Alexandra House, Central, Hong
Kong, investment company, director, 1987 to present.
NICHOLAS J. EELEY
Global Asset Management Limited, 12 St. James's Place, London
SWlA 1NX, England, investment adviser, director, 1984 to
present.
GAM Pacific Inc. and GAM Arbitrage Inc., Craigmuir Chambers,
P.O. Box 71, Road Town, Tortola, British Virgin Islands,
director.
DAVID J. MILLER
Global Asset Management (U.K.) Ltd., 12 St. James's Place,
London SW1A 1NX, England, investment adviser, chief financial
officer, 1987 to present.
GAM Fund Management Ltd., Dublin.
GAM Administration Limited, 11 Athol Street, Douglas, Isle of
Man, director.
ALAN MCFARLANE
Global Asset Management Ltd., 12 St. James's Place, London
SW1A 1NX, England, managing director (institutional), 1993 to
present.
DENIS G. RAEBURN
Global Asset Management Ltd. and Global Asset Management
(U.K.) Ltd., 12 St. James's Place, London SW1A 1NX, England,
managing director, 1987 to present.
Cellcom Limited, Denmark House, Staples Corner, London NW9
7BW, England, director, 1983 to present.
Global Asset Management (USA) Inc., 135 East 57th Street, New
York, NY 10022, director, 1990 to present.
Mr. Raeburn is also a director of various other companies
controlled by GAM and of various investment funds organized
outside the United States in the GAM group of funds.
<PAGE>
GORDON GRENDER
Global Asset Management (U.K.) Ltd., 12 St. James's Place,
London SW1A 1NX, England, independent contractor and fund
manager, 1994 to present.
Stephens Inc., 111 Center Street, Little Rock, AK. Consultant,
1995 to present.
Neilson Management Ltd., 65 London Wall, London, England,
January 1997 to present.
Cognito Ltd., 12 Swinegate, Leeds, England. Alternate
Director, January 1997 to present.
Foreign & Colonial US Smaller Companies plc, Exchange House,
Primrose Street, London EC2A 2NY, England, director, 1993 to
present.
Investco Overseas Holdings Limited, 81 Carter Lane, London EC4
5EP, England, director, 1987 to present.
Flexbale Limited, 2 Chapel Court, London SE1 1HR, England,
director, 1983 to present.
Adrian Berkeley & Associates Limited, The Estate Office,
Normanby, Scunthorpe, South Humberside DN15 9HS, England,
director, 1969 to present.
Mr. Grender also acts as portfolio manager for GAM North
American Unit Trust and GAMerica, Inc.
The directors and officers of Sarofim and their only
activities of a substantial nature during the past two years
are set forth in the Statement of Additional Information under
"Investment Advisers."
ITEM 29. PRINCIPAL UNDERWRITERS.
<TABLE>
<CAPTION>
(a) None.
(b) Name and Positions and Positions and
Principal Offices with Offices with
Business Address Underwriter Registrant
---------------------------------------------------------------------------------------
<S> <C> <C> <C>
Kevin Blanchfield Chief Operating Officer, Vice President
135 East 57th Street Treasurer and Treasurer
New York, NY 10022 and Director
Lisa M. Hurley Secretary Secretary
135 East 57th Street
New York, NY 10022
(c) N/A
</TABLE>
<PAGE>
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS.
The accounts, books and other documents required to be maintained
by Registrant pursuant to Rule 31a-1(a) of the Act are maintained
as follows:
Accounts and Records
Pursuant to Rule Location
-------------------- --------
31a - 1(b)(1) Brown Brothers Harriman & Co.
31a - 1(b)(2)(i) 40 Water Street
31a - 1(b)(2)(ii) Boston, Massachusetts 02109
31a - 1(b)(2)(iii)
31a - 1(b)(3)
31a - 1(b)(5)-(8)
31a - 1(b)(10)
31a - 1(b)(1) Chase Global Funds Service Company
31a - 1(b)(2)(iv) P.O. Box 2798
Boston, Massachusetts 02208
31a - 1(b)(9)-(11) GAM International Management
Limited
12 St. James's Place
London SWIA 1NX, England
Fayez Sarofim & Co.
Suite 2907
Two Houston Center
Houston, Texas 77010
31a - 1(b)(4) Coudert Brothers
1114 Avenue of the Americas
New York, New York 10036
ITEM 31. N/A
ITEM 32. UNDERTAKINGS
(a) N/A
(b) N/A
(c) Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest annual report to
shareholders for each series upon request and without charge.
<PAGE>
SIGNATURES.
Registrant has duly caused this Post-Effective Amendment to the Registration
Statement on Form N-1A of GAM Funds, Inc. to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York and State of New
York, on the 28th day of February, 1997.
GAM FUNDS, INC.
Registrant
By /s/ Kevin J. Blanchfield
----------------------------
Kevin J. Blanchfield
Vice President and Treasurer
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, this Amendment to the Registration Statement has been
signed below by the following persons in the capacities and on the dates
indicated.
<TABLE>
<CAPTION>
Signature: Title: Date:
- ---------- ------ -----
<S> <C> <C>
/s/ Gilbert de Botton* President and February 28, 1997
- --------------------------------------------- Director
Gilbert de Botton (Principal Executive Officer)
/s/ Kevin J. Blanchfield Vice President/ February 28, 1997
- --------------------------------------------- Treasurer
Kevin J. Blanchfield (Principal
Financial and
Accounting Officer)
/s/ Therese Meier* Director February 28, 1997
- ---------------------------------------------
Therese Meier
/s/ Madelon DeVoe Talley* Director February 28, 1997
- ---------------------------------------------
Madelon DeVoe Talley
/s/ Roland Weiser* Director February 28, 1997
- ---------------------------------------------
Roland Weiser
/s/ George W. Landau* Director February 28, 1997
- ---------------------------------------------
George W. Landau
</TABLE>
*By: /s/ Lisa M. Hurley
------------------
Executed by Lisa M. Hurley on behalf of those indicated pursuant to
Powers of Attorney filed herewith.
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description of Index
- ----------- --------------------
6(a) Second Amended and Restated Distribution Agreement for Class
A Shares with GAM Services, Inc. dated November 1, 1996
6(b) First Amended Distribution Agreement for Class D Shares with
GAM Services, Inc. dated November 1, 1996.
6(c) Amended Form of Dealer Agreement between GAM Services, Inc.
and designated dealers.
9(b) Administration Agreement with Brown Brothers Harriman & Co.
dated October 1, 1995.
11 Consent of Coopers & Lybrand L.L.P., independent auditors of
Registrant.
12 Annual Report to Shareholders of GAM Funds, Inc.
15(b) Class A Distribution Plan adopted by Registrant.
16 Performance Calculations
17 Financial Data Schedules.
18 Amended Multiple Class Plan for Class A and D Shares adopted
by Registrant.
19 Powers of Attorney
Exhibit 6(a)
SECOND AMENDED AND RESTATED
DISTRIBUTION AGREEMENT
FOR CLASS A SHARES
THIS AGREEMENT made as of the 1st day of November, 1996, by and between
GAM FUNDS, INC. a Maryland corporation (the "Fund"), and GAM SERVICES INC., a
Delaware corporation ("GAM Services").
WHEREAS, the Fund is registered as an open-end, diversified, management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act");
WHEREAS, on December 11, 1989, the Fund and GAM Services entered into
an agreement to provide distribution services for the Fund (the "Original
Distribution Agreement");
WHEREAS, on August 17, 1995 the Fund and GAM Services entered into the
First Amended and Restated Distribution Agreement for Class A Shares, and
simultaneously entered into a separate Distribution Agreement regarding the
Fund's Class D Shares; and
WHEREAS, the Fund and GAM Services now desire to amend the Original
Distribution Agreement to provide that GAM Services shall provide distribution
services for the Fund's Class A Shares on the terms and conditions hereinafter
set forth;
NOW THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt whereof is
hereby acknowledged, the parties hereto agree as follows:
1. APPOINTMENT. The Fund hereby appoints GAM Services as distributor of
the Class A Shares of the Fund for the period and on the terms set forth in this
Agreement. GAM Services accepts such appointment and agrees to render the
services herein set forth, for the compensation herein provided.
2. DELIVERY OF DOCUMENTS. The Fund has furnished GAM Services Services
with true and correct copies of each of the following:
(a) the Fund's Certificate of Incorporation and all amendments
thereto (such Certificate of Incorporation, as presently in effect and
as it shall from time to time be amended, is herein called the
"Certificate");
<PAGE>
(b) the Fund's By-Laws and all amendments thereto (such
By-Laws, as presently in effect and as they shall from time to time be
amended, are herein called the "By-Laws");
(c) the Fund's Registration Statement on Form N-1A under the
Securities Act of 1933, as amended (the "1933 Act"), and under the 1940
Act as filed with the Securities and Exchange Commission (the "SEC")
relating to the shares of the Fund and all amendments thereto;
(d) the Fund's most recent prospectus and statement of
additional information (such prospectus and statement of additional
information, as presently in effect and all amendments and supplements
thereto, are herein called the "Prospectus" and "SAI", respectively);
and
(e) the Fund's Plan of Distribution for Class A Shares.
The Fund will furnish GAM Services from time to time with copies of all
amendments or supplements to the foregoing, if any.
3. DUTIES AS DISTRIBUTOR. GAM Services shall give the Fund the benefit
of its best judgment, efforts and facilities in rendering its services as
distributor of the Fund's Class A Shares. In carrying out its obligations
hereunder, GAM Services shall:
(a) receive orders for the purchase of the Fund's Class A
Shares, accept or reject such orders on behalf of the Fund in
accordance with the Fund's currently effective Prospectus and SAI and
transmit such orders as are so accepted to the Fund's transfer agent as
promptly as possible;
(b) receive requests for redemption from holders of the Fund's
Class A Shares and transmit such redemption requests to the Fund's
transfer agent as promptly as possible; and
(c) respond to inquiries from the Fund's Class A shareholders
concerning the status of their accounts with the Fund.
4. DISTRIBUTION OF CLASS A SHARES. GAM Services shall be exclusive
distributor of the Fund's Class A Shares. It is mutually understood and agreed
that GAM Services does not undertake to sell all or any specific portion of the
Class A Shares of the Fund. The Fund shall not sell any of its Class A Shares
through any securities dealer other than GAM Services. Notwithstanding the
provisions of the foregoing sentence:
(a) the Fund may issue its Class A Shares to any other
investment company or personal holding company, or to the shareholders
thereof, in exchange for all or a majority of the shares or assets of
any such company;
<PAGE>
(b) the Fund may issue its Class A Shares at their net asset
value to any shareholder of the Fund purchasing such shares with
dividends or other cash distributions received from the Fund pursuant
to an offer made to all shareholders;
(c) GAM Services may enter into shareholder processing and
servicing agreements in accordance with Section 7 hereof;
(d) GAM Services may, and when requested by the Fund shall,
suspend its efforts to effectuate sales of the Class A Shares of the
Fund at any time when in the opinion of GAM Services or of the Fund no
sales should be made because of market or other economic considerations
or abnormal circumstances of any kind;
(e) the Fund may withdraw the offering of its Class A Shares
(i) at any time with the consent of GAM Services, or (ii) without such
consent when so required by the provisions of any statute or of any
order, rule or regulation of any governmental body having jurisdiction;
and
(f) the price at which the Class A Shares may be sold (the
"offering price") shall be the net asset value per Class A Share plus
any applicable sales load as determined in the manner established from
time to time by the Fund's Board of Directors and as set forth in the
Fund's then current Prospectus and SAI.
5. CONTROL BY BOARD OF DIRECTORS. Any distribution activities
undertaken by GAM Services pursuant to this Agreement, as well as any other
activities undertaken by GAM Services on behalf of the Fund pursuant thereto,
shall at all times be subject to any applicable directives of the Board of
Directors of the Fund.
6. COMPLIANCE WITH APPLICABLE REQUIREMENTS. In carrying out its
obligations under this Agreement, GAM Services shall at all times conform to:
(a) all applicable provisions of the 1940 Act and any rules
and regulations adopted thereunder;
(b) the provisions of the Registration Statement of the Fund
under the 1933 Act and the 1940 Act;
(c) the provisions of the Certificate of the Fund;
(d) the provisions of the By-Laws of the Fund;
(e) the rules and regulations of the National Association of
Securities Dealers, Inc. ("NASD") and all other self-regulatory
organizations applicable to the sale of investment company shares; and
(f) any other applicable provision of state and Federal law.
<PAGE>
7. DEALER AND SHAREHOLDER SERVICE AGREEMENTS. GAM Services may enter
into dealer and shareholder service agreements (the "Dealer Agreements") with
any securities dealer ("Securities Dealer") who is registered under the
Securities Exchange Act of 1934 (the "1934 Act") and a member in good standing
of the NASD (or who is not required to be so registered or a member of the NASD
because such Securities Dealer does not have any customers in the United
States), who may wish to establish accounts or sub-accounts on behalf of such
Securities Dealer's customers. GAM Services may enter into shareholder
processing and service agreements ("Shareholder Service Agreements") with
persons other than Securities Dealers ("Shareholder Service Agents") who are not
required to be registered under the 1934 Act or members in good standing of the
NASD, who are exempt from registration as a broker or a dealer under the 1934
Act or who may otherwise lawfully furnish services to Fund shareholders without
registration under the 1934 Act. GAM Services will supervise the Fund's
relations with Securities Dealers and Shareholder Service Agents. Securities
Dealers and Shareholder Service Agents shall be paid such amounts as GAM
Services may determine from time to time in its discretion.
8. EXPENSES. The expenses connected with the Fund shall be allocable
between the Fund and GAM Services as follows:
(a) GAM Services shall furnish, at its expense and without
cost to the Fund, the services of personnel to the extent that such
services are required to carry out its obligations under this
Agreement.
(b) GAM Services shall bear the fees payable to Securities
Dealers and Shareholder Service Agents as set forth in Section 7 above,
except that the Fund may pay fees to Securities Dealers and
Shareholders Service Agents in an amount not to exceed an annual rate
of 0.25% of the daily net asset value of the Class A Shares of the Fund
owned by shareholders with whom such Securities Dealer or Shareholder
Service Agent has a servicing relationship in exchange for
administrative services provided to such shareholders as described in
the Prospectus and SAI.
(c) The expenses of printing and distributing Prospectuses and
SAI (other than those Prospectuses and SAI distributed to shareholders
of the Fund) and any other promotional or sales literature used by GAM
Services or furnished by GAM Services to investors, Securities Dealers
or Shareholder Service Agents in connection with the public offering of
the Fund's Class A Shares, and other advertising or promotional
expenses incurred in connection with such public offering, shall be
paid by GAM Services.
(d) The Fund assumes and shall pay or cause to be paid all
other expenses of the Fund (other than those expressly assumed by the
Fund's investment advisors), including, without limitation: the fees of
the Fund's investment advisors; the charges and expenses of any
registrar, any custodian or depository appointed by the Fund for the
safekeeping of its cash, portfolio securities and other property, and
any transfer, dividend or accounting agent or agents appointed by the
<PAGE>
Fund; brokers' commissions chargeable to the Fund in connection with
portfolio securities transactions to which the Fund is a party; all
taxes, including securities issuance and transfer taxes, and fees
payable by the Fund to Federal, state or other governmental agencies;
the costs and expenses of engraving or printing of certificates
representing shares of the Fund; all costs and expenses in connection
with the registration and maintenance of registration of the Fund and
its shares with the SEC and various states and other jurisdictions
(including filing fees, legal fees and disbursements of counsel); the
costs and expenses of printing, including typesetting, and distributing
the Prospectuses and SAI of the Fund and supplements thereto to the
Fund's shareholders; all expenses of shareholders' and directors'
meetings and of preparing, printing and mailing of proxy statements and
reports to shareholders; fees and travel expenses of directors or
members of any advisory board or committee; all expenses incident to
the payment of any dividend, distribution, withdrawal or redemption,
whether in shares or in cash; charges and expenses of any outside
service used for pricing of the Fund's shares; fees and expenses of
legal counsel and of independent accountants, in connection with any
matter relating to the Fund; membership dues of industry associations;
interest payable on Fund borrowings; postage; insurance premiums on
property or personnel (including officers and directors) of the Fund;
extraordinary expenses (including, but not limited to, legal claims and
liabilities and litigation costs and any indemnification related
thereto); and all other charges and costs of the Fund's operation
unless otherwise explicitly provided herein.
9. COMPENSATION. The Fund shall pay or cause to be paid to GAM
Services: (i) any sales load received by the Fund with respect to the sale of
its Class A Shares in accordance with the Prospectus and SAI, and (ii)
compensation at the annual rate of 0.30% of the average daily net assets of each
series of the Fund attributable to the Class A Shares, which shall be calculated
and accrued daily and paid monthly or at such other intervals as the Board of
Directors and GAM Services shall mutually agree.
10. NON-EXCLUSIVITY. The services of GAM Services to the Fund are not
to be deemed to be exclusive, and GAM Services and its officers and directors
shall be free to render distribution or other services to others (including
other investment companies) and to engage in other activities.
11. TERM. This Agreement shall become effective on the date hereof and
shall continue in force and effect, subject to Section 13 hereof, until the
first anniversary of the date hereof.
12. RENEWAL. Following the expiration of its initial one-year term,
this Agreement shall continue in force and effect from year to year, subject to
Section 13 hereof, provided that such continuance is specifically approved at
least annually:
<PAGE>
(a) by the Fund's Board of Directors; and
(b) by the affirmative vote of a majority of the Directors who
are not parties to this Agreement or "interested persons" (as defined
by the 1940 Act) of any such party and have no direct or indirect
financial interest in the operation of this Agreement or any agreement
related to this Agreement, by votes cast in person at a meeting
specifically called for the purpose of voting on such approval.
13. TERMINATION. This Agreement may be terminated at any time, without
the payment of any penalty, (i) by vote of the Fund's Board of Directors, (ii)
by vote of a majority of the members of the Board of Directors of the Fund who
are not "interested persons" of the Fund and have no direct or indirect
financial interest in the operation of this Agreement or in any agreement
related to this Agreement, (iii) with respect to any Series of the Fund, by vote
of a majority of the outstanding Class A Shares of such Series (as defined in
Section 2(a)(42) of the 1940 Act), or (iv) by GAM Services, on sixty (60) days'
written notice to the other party. The notice provided for herein may be waived
by either party. This Agreement shall automatically terminate in the event of
its "assignment" as defined in Section 2(a)(4) of the 1940 Act.
14. AMENDMENTS.
(a) This Agreement may be amended by the parties hereto only if such
amendment is specifically approved (i) by the Board of Directors of the Fund and
(ii) by a majority of those Directors who are not parties to this Agreement or
"interested persons" of any such party, which vote must be cast in person at a
meeting called for the purpose of voting on such approval.
(b) In the event that this Agreement is proposed to be amended to
increase materially the amount to be spent by the Fund for distribution, such
amendment will not be effected with respect to any Series without the approval
of the holders of the Class A Shares of such Series.
15. LIABILITY OF THE DISTRIBUTOR. In the performance of its duties
hereunder, GAM Services shall be obligated to exercise care and diligence and to
act in good faith and to use its best efforts within reasonable limits to ensure
the accuracy of all services performed under this Agreement, but GAM Services
shall not be liable for any act or omission which does not constitute willful
misfeasance, bad faith or gross negligence on the part of GAM Services or
reckless disregard by GAM Services of its duties under this Agreement.
16. INDEMNIFICATION.
(a) The Fund agrees to indemnify, defend and hold GAM Services, its
officers and directors and any person who controls GAM Services within the
meaning of Section 15 of the 1933 Act, free and harmless from and against any
and all claims, demands, liabilities and expenses (including the cost of
investigating or defending such claims, demands or liabilities and any counsel
<PAGE>
fees incurred in connection therewith) which GAM Services, its officers,
directors or any such controlling person may incur arising out of or based upon
any untrue statement of a material fact contained in the Registration Statement,
Prospectus or SAI or arising out of or based upon any alleged omission to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such claims, demands,
liabilities or expenses arise out of or are based upon any such untrue statement
or omission or alleged untrue statement or omission made in reliance upon and in
conformity with information furnished in writing by GAM Services to the Fund for
use in the Registration Statement, Prospectus or SAI; provided, however, that
this indemnity agreement, to the extent that it might require indemnity of any
person who is also an officer or director of the Fund or who controls the Fund
within the meaning of Section 15 of the 1933 Act, shall not inure to the benefit
of such officer, director or controlling person unless a court of competent
jurisdiction shall determine, or it shall have been determined by controlling
precedent, that such result would not be against public policy as expressed in
the 1933 Act; and further provided, that in no event shall anything contained
herein be so construed as to protect GAM Services against any liability to the
Fund or to its security holders to which GAM Services would otherwise be subject
by reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of its reckless disregard of its
obligations under this Agreement. In the event that GAM Services becomes a party
to any action or proceeding in respect of which indemnification may be sought
hereunder, GAM Services shall promptly notify the Fund thereof. Following such
notice, the Fund shall be entitled to participate therein, and to the extent
that it may wish, to assume the defense thereof with counsel reasonably
satisfactory to GAM Services. After notice from the Fund to GAM Services of an
election so to assume the defense thereof, the Fund shall not be liable to GAM
Services hereunder for any legal or other expenses subsequently incurred by GAM
Services in connection with the defense thereof other than reasonable costs of
investigation.
(b) GAM Services agrees to indemnify, defend and hold the Fund, its
officers and directors and any person who controls the Fund, if any, within the
meaning of Section 15 of the 1933 Act, free and harmless from and against any
and all claims, demands, liabilities and expenses (including the costs of
investigating or defending against such claims, demands or liabilities and any
counsel fees incurred in connection therewith) which the Fund, its directors or
officers or any such controlling person may incur, but only to the extent that
such liability or expense incurred by the Fund, its directors or officers or
such controlling person resulting from such claims or demands shall arise out of
or be based upon any alleged untrue statement of a material fact contained in
information furnished in writing by GAM Services to the Fund for use in the
Registration Statement, Prospectus or SAI or shall arise out of or be based upon
any alleged omission to state a material fact in connection with such
information required to be stated in the Registration Statement, Prospectus or
SAI or necessary to make such information not misleading.
<PAGE>
(c) Neither party to this Agreement shall be liable under this Section
16 for any settlement of any action or claim effected without its prior written
consent.
17. REPORTS. GAM Services shall provide to the Board of Directors of
the Fund, and the Board of Directors shall review, at least quarterly, a written
report of the amounts expended pursuant to this Agreement and the purposes for
which such expenditures were made, including, without limitation, commissions,
advertising, printing, interest, carrying charges and allocated overhead
expenses. GAM Services shall also provide the Board of Directors of the Fund
with such other information regarding the implementation of this Agreement as
the Board of Directors may reasonably request from time to time.
18. NOTICES. Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice. Until
further notice to the other party, it is agreed that the address of each party
for this purpose shall be 135 East 57th Street, New York, New York 10022.
19. INTERPRETATION. This Agreement shall be implemented and construed
in a manner consistent with the provisions of the 1940 Act. Any question of
interpretation of any term or provision of this Agreement having a counterpart
in or otherwise derived from a term or provision of the 1940 Act shall be
resolved by reference to such term or provision of the 1940 Act and to
interpretations thereof, if any, by the United States courts or, in the absence
of any controlling decision of any such court, by rules, regulations or orders
of the SEC issued pursuant to the 1940 Act. In addition, where the effect of a
requirement of the 1940 Act reflected in any provision of this Agreement is
revised by rule, regulation or order of the SEC, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers on the day and year first above written.
GAM FUNDS, INC.
By:_________________________
Name: Kevin J. Blanchfield
Title: Treasurer
GAM SERVICES, INC.
By:__________________________
Name: David A. Anderson
Title: Managing Director - Mutual Funds
Exhibit 6(b)
FIRST AMENDED AND RESTATED
DISTRIBUTION AGREEMENT
FOR CLASS D SHARES
THIS AGREEMENT, made as of the 1st day of November, 1996 by and between
GAM FUNDS, INC. a Maryland corporation (the "Fund"), and GAM SERVICES INC., a
Delaware corporation ("GAM Services").
WHEREAS, the Fund is registered as an open-end, diversified, management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, on August 17, 1995, the Fund and GAM Services entered into an
agreement to provide distribution services for the Class D Shares of the Fund
(the "Original Distribution Agreement"); and
WHEREAS, the Fund and GAM Services now desire to amend the Original
Distribution Agreement to provide that GAM Services shall provide distribution
services for the Fund's Class D Shares on the terms and conditions hereinafter
set forth;
NOW THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt whereof is
hereby acknowledged, the parties hereto agree as follows:
1. APPOINTMENT. The Fund hereby appoints GAM Services as
distributor of the Class D Shares of the Fund for the period and on the terms
set forth in this Agreement. GAM Services accepts such appointment and agrees to
render the services herein set forth, for the compensation herein provided.
2. DELIVERY OF DOCUMENTS. The Fund has furnished GAM Services
with true and correct copies of each of the following:
(a) the Fund's Certificate of Incorporation and all amendments
thereto (such Certificate of Incorporation, as presently in effect and
as it shall from time to time be amended, is herein called the
"Certificate");
(b) the Fund's By-Laws and all amendments thereto (such
By-Laws, as presently in effect and as they shall from time to time be
amended, are herein called the "By-Laws");
(c) the Fund's Registration Statement on Form N-1A under the
Securities Act of 1933, as amended (the "1933 Act"), and under the 1940
Act as filed with the Securities and Exchange Commission (the "SEC")
relating to the shares of the Fund and all amendments thereto;
<PAGE>
(d) the Fund's most recent prospectus and statement of
additional information (such prospectus and statement of additional
information, as presently in effect and all amendments and supplements
thereto, are herein called the "Prospectus" and "SAI", respectively);
and
(e) the Fund's Plan of Distribution for Class D Shares.
The Fund will furnish GAM Services from time to time with copies of all
amendments or supplements to the foregoing, if any.
3. DUTIES AS DISTRIBUTOR. GAM Services shall give the Fund
the benefit of its best judgment, efforts and facilities in rendering its
services as distributor of the Fund's Class D Shares. In carrying out its
obligations hereunder, GAM Services shall:
(a) receive orders for the purchase of the Fund's Class D
Shares, accept or reject such orders on behalf of the Fund in
accordance with the Fund's currently effective Prospectus and SAI and
transmit such orders as are so accepted to the Fund's transfer agent as
promptly as possible;
(b) receive requests for redemption from holders of the Fund's
Class D Shares and transmit such redemption requests to the Fund's
transfer agent as promptly as possible; and
(c) respond to inquiries from the Fund's Class D shareholders
concerning the status of their accounts with the Fund.
4. DISTRIBUTION OF CLASS D SHARES. GAM Services shall be exclusive
distributor of the Fund's Class D Shares. It is mutually understood and agreed
that GAM Services does not undertake to sell all or any specific portion of the
Class D Shares of the Fund. The Fund shall not sell any of its Class D Shares
through any securities dealer other than GAM Services. Notwithstanding the
provisions of the foregoing sentence:
(a) the Fund may issue its Class D Shares to any other
investment company or personal holding company, or to the shareholders
thereof, in exchange for all or a majority of the shares or assets of
any such company;
(b) the Fund may issue its Class D Shares at their net asset
value to any shareholder of the Fund purchasing such shares with
dividends or other cash distributions received from the Fund pursuant
to an offer made to all shareholders;
(c) GAM Services may enter into shareholder processing and
servicing agreements in accordance with Section 7 hereof;
<PAGE>
(d) GAM Services may, and when requested by the Fund shall,
suspend its efforts to effectuate sales of the Class D Shares of the
Fund at any time when in the opinion of GAM Services or of the Fund no
sales should be made because of market or other economic considerations
or abnormal circumstances of any kind;
(e) the Fund may withdraw the offering of its Class D Shares
(i) at any time with the consent of GAM Services, or (ii) without such
consent when so required by the provisions of any statute or of any
order, rule or regulation of any governmental body having jurisdiction;
and
(f) the price at which the Class D Shares may be sold (the
"offering price") shall be the net asset value per Class D Share plus
any applicable sales load as determined in the manner established from
time to time by the Fund's Board of Directors and as set forth in the
Fund's then current Prospectus and SAI.
5. CONTROL BY BOARD OF DIRECTORS. Any distribution activities
undertaken by GAM Services pursuant to this Agreement, as well as any other
activities undertaken by GAM Services on behalf of the Fund pursuant thereto,
shall at all times be subject to any applicable directives of the Board of
Directors of the Fund.
6. COMPLIANCE WITH APPLICABLE REQUIREMENTS. In carrying out its
obligations under this Agreement, GAM Services shall at all times conform to:
(a) all applicable provisions of the 1940 Act and any rules
and regulations adopted thereunder;
(b) the provisions of the Registration Statement of the Fund
under the 1933 Act and the 1940 Act;
(c) the provisions of the Certificate of the Fund;
(d) the provisions of the By-Laws of the Fund;
(e) the rules and regulations of the National Association of
Securities Dealers, Inc. ("NASD") and all other self-regulatory
organizations applicable to the sale of investment company shares; and
(f) any other applicable provision of state and Federal law.
7. DEALER AND SHAREHOLDER SERVICE AGREEMENTS. GAM Services may enter
into dealer and shareholder service agreements (the "Dealer Agreements") with
any securities dealer ("Securities Dealer") who is registered under the
Securities Exchange Act of 1934 (the "1934 Act") and a member in good standing
of the NASD (or who is not required to be so registered or a member of the NASD
because such Securities Dealer does not have any customers in the United
States), who may wish to establish accounts or sub-accounts on behalf of such
<PAGE>
Securities Dealer's customers. GAM Services may enter into shareholder
processing and service agreements ("Shareholder Service Agreements") with
persons other than Securities Dealers ("Shareholder Service Agents") who are not
required to be registered under the 1934 Act or members in good standing of the
NASD, who are exempt from registration as a broker or a dealer under the 1934
Act or who may otherwise lawfully furnish services to Fund shareholders without
registration under the 1934 Act. GAM Services will supervise the Fund's
relations with Securities Dealers and Shareholder Service Agents. GAM Services
will make payments to Securities Dealers and Shareholder Service Agents in such
amounts as GAM Services may determine from time to time in its discretion.
8. EXPENSES. The expenses connected with the Fund shall be
allocable between the Fund and GAM Services as follows:
(a) GAM Services shall furnish, at its expense and without
cost to the Fund, the services of personnel to the extent that such
services are required to carry out its obligations under this
Agreement.
(b) GAM Services shall bear the fees payable to Securities
Dealers and Shareholder Service Agents as set forth in Section 7 above,
except that the Fund may pay fees to Securities Dealers and
Shareholders Service Agents in an amount not to exceed an annual rate
of 0.25% of the daily net asset value of the Class D Shares of the Fund
owned by shareholders with whom such Securities Dealer or Shareholder
Service Agent has a servicing relationship in exchange for
administrative services provided to such shareholders as described in
the Prospectus and SAI.
(c) The expenses of printing and distributing Prospectuses and
SAI (other than those Prospectuses and SAI distributed to shareholders
of the Fund) and any other promotional or sales literature used by GAM
Services or furnished by GAM Services to investors, Securities Dealers
or Shareholder Service Agents in connection with the public offering of
the Fund's Class D Shares, and other advertising or promotional
expenses incurred in connection with such public offering, shall be
paid by GAM Services.
(d) The Fund assumes and shall pay or cause to be paid all
other expenses of the Fund (other than those expressly assumed by the
Fund's investment advisors), including, without limitation: the fees of
the Fund's investment advisors; the charges and expenses of any
registrar, any custodian or depository appointed by the Fund for the
safekeeping of its cash, portfolio securities and other property, and
any transfer, dividend or accounting agent or agents appointed by the
Fund; brokers' commissions chargeable to the Fund in connection with
portfolio securities transactions to which the Fund is a party; all
taxes, including securities issuance and transfer taxes, and fees
payable by the Fund to Federal, state or other governmental agencies;
the costs and expenses of engraving or printing of certificates
<PAGE>
representing shares of the Fund; all costs and expenses in connection
with the registration and maintenance of registration of the Fund and
its shares with the SEC and various states and other jurisdictions
(including filing fees, legal fees and disbursements of counsel); the
costs and expenses of printing, including typesetting, and distributing
the Prospectuses and SAI of the Fund and supplements thereto to the
Fund's shareholders; all expenses of shareholders' and directors'
meetings and of preparing, printing and mailing of proxy statements and
reports to shareholders; fees and travel expenses of directors or
members of any advisory board or committee; all expenses incident to
the payment of any dividend, distribution, withdrawal or redemption,
whether in shares or in cash; charges and expenses of any outside
service used for pricing of the Fund's shares; fees and expenses of
legal counsel and of independent accountants, in connection with any
matter relating to the Fund; membership dues of industry associations;
interest payable on Fund borrowings; postage; insurance premiums on
property or personnel (including officers and directors) of the Fund;
extraordinary expenses (including, but not limited to, legal claims and
liabilities and litigation costs and any indemnification related
thereto); and all other charges and costs of the Fund's operation
unless otherwise explicitly provided herein.
9. COMPENSATION. The Fund shall pay or cause to be paid to
GAM Services: (i) any sales load received by the Fund with respect to the sale
of its Class D Shares in accordance with the Prospectus and SAI, and (ii)
compensation at the annual rate of 0.50% of the average daily net assets of each
series of the Fund attributable to the Class D Shares, which shall be calculated
and accrued daily and paid monthly or at such other intervals as the Board of
Directors and GAM Services shall mutually agree.
10. NON-EXCLUSIVITY. The services of GAM Services to the Fund
are not to be deemed to be exclusive, and GAM Services and its officers and
directors shall be free to render distribution or other services to others
(including other investment companies) and to engage in other activities.
11. TERM. This Agreement shall become effective on the date
hereof and shall continue in force and effect, subject to Section 13 hereof,
until the first anniversary of the date hereof.
12. RENEWAL. Following the expiration of its initial one-year
term, this Agreement shall continue in force and effect, subject to Section 13
hereof, provided that such continuance is specifically approved at least
annually:
(a) by the Fund's Board of Directors; and
(b) by the affirmative vote of a majority of the Directors who
are not parties to this Agreement or "interested persons" (as defined
by the 1940 Act) of any such party and have no direct or indirect
financial interest in the operation of this Agreement or any agreement
related to this Agreement, by votes cast in person at a meeting
specifically called for the purpose of voting on such approval.
<PAGE>
13. TERMINATION. This Agreement may be terminated at any time, without
the payment of any penalty, (i) by vote of the Fund's Board of Directors, (ii)
by vote of a majority of the members of the Board of Directors of the Fund who
are not "interested persons" of the Fund and have no direct or indirect
financial interest in the operation of this Agreement or in any agreement
related to this Agreement, (iii) with respect to any Series of the Fund, by vote
of a majority of the outstanding Class D Shares of such Series (as defined in
Section 2(a)(42) of the 1940 Act), or (iv) by GAM Services, on sixty (60) days'
written notice to the other party. The notice provided for herein may be waived
by either party. This Agreement shall automatically terminate in the event of
its "assignment" as defined in Section 2(a)(4) of the 1940 Act.
14. AMENDMENTS.
(a) This Agreement may be amended by the parties hereto only if such
amendment is specifically approved (i) by the Board of Directors of the Fund and
(ii) by a majority of those Directors who are not parties to this Agreement or
"interested persons" of any such party, which vote must be cast in person at a
meeting called for the purpose of voting on such approval.
(b) In the event that this Agreement is proposed to be amended to
increase materially the amount to be spent by the Fund for distribution, such
amendment will not be effected with respect to any Series without the approval
of the holders of Class D Shares of such Series.
15. LIABILITY OF THE DISTRIBUTOR. In the performance of its duties
hereunder, GAM Services shall be obligated to exercise care and diligence and to
act in good faith and to use its best efforts within reasonable limits to ensure
the accuracy of all services performed under this Agreement, but GAM Services
shall not be liable for any act or omission which does not constitute willful
misfeasance, bad faith or gross negligence on the part of GAM Services or
reckless disregard by GAM Services of its duties under this Agreement.
16. INDEMNIFICATION.
(a) The Fund agrees to indemnify, defend and hold GAM Services, its
officers and directors and any person who controls GAM Services within the
meaning of Section 15 of the 1933 Act, free and harmless from and against any
and all claims, demands, liabilities and expenses (including the cost of
investigating or defending such claims, demands or liabilities and any counsel
fees incurred in connection therewith) which GAM Services, its officers,
directors or any such controlling person may incur arising out of or based upon
any untrue statement of a material fact contained in the Registration Statement,
Prospectus or SAI or arising out of or based upon any alleged omission to state
<PAGE>
a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such claims, demands,
liabilities or expenses arise out of or are based upon any such untrue statement
or omission or alleged untrue statement or omission made in reliance upon and in
conformity with information furnished in writing by GAM Services to the Fund for
use in the Registration Statement, Prospectus or SAI; provided, however, that
this indemnity agreement, to the extent that it might require indemnity of any
person who is also an officer or director of the Fund or who controls the Fund
within the meaning of Section 15 of the 1933 Act, shall not inure to the benefit
of such officer, director or controlling person unless a court of competent
jurisdiction shall determine, or it shall have been determined by controlling
precedent, that such result would not be against public policy as expressed in
the 1933 Act; and further provided, that in no event shall anything contained
herein be so construed as to protect GAM Services against any liability to the
Fund or to its security holders to which GAM Services would otherwise be subject
by reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of its reckless disregard of its
obligations under this Agreement. In the event that GAM Services becomes a party
to any action or proceeding in respect of which indemnification may be sought
hereunder, GAM Services shall promptly notify the Fund thereof. Following such
notice, the Fund shall be entitled to participate therein, and to the extent
that it may wish, to assume the defense thereof with counsel reasonably
satisfactory to GAM Services. After notice from the Fund to GAM Services of an
election so to assume the defense thereof, the Fund shall not be liable to GAM
Services hereunder for any legal or other expenses subsequently incurred by GAM
Services in connection with the defense thereof other than reasonable costs of
investigation.
(b) GAM Services agrees to indemnify, defend and hold the Fund, its
officers and directors and any person who controls the Fund, if any, within the
meaning of Section 15 of the 1933 Act, free and harmless from and against any
and all claims, demands, liabilities and expenses (including the costs of
investigating or defending against such claims, demands or liabilities and any
counsel fees incurred in connection therewith) which the Fund, its directors or
officers or any such controlling person may incur, but only to the extent that
such liability or expense incurred by the Fund, its directors or officers or
such controlling person resulting from such claims or demands shall arise out of
or be based upon any alleged untrue statement of a material fact contained in
information furnished in writing by GAM Services to the Fund for use in the
Registration Statement, Prospectus or SAI or shall arise out of or be based upon
any alleged omission to state a material fact in connection with such
information required to be stated in the Registration Statement, Prospectus or
SAI or necessary to make such information not misleading.
(c) Neither party to this Agreement shall be liable under this Section
16 for any settlement of any action or claim effected without its prior written
consent.
17. REPORTS. GAM Services shall provide to the Board of Directors of
the Fund, and the Board of Directors shall review, at least quarterly, a written
report of the amounts expended pursuant to this Agreement and the purposes for
which such expenditures were made, including, without limitation, commissions,
<PAGE>
advertising, printing, interest, carrying charges and allocated overhead
expenses. GAM Services shall also provide the Board of Directors of the Fund
with such other information regarding the implementation of this Agreement as
the Board of Directors may reasonably request from time to time.
18. NOTICES. Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice. Until
further notice to the other party, it is agreed that the address of each party
for this purpose shall be 135 East 57th Street, New York, New York 10022.
19. INTERPRETATION. This Agreement shall be implemented and construed
in a manner consistent with the provisions of the 1940 Act. Any question of
interpretation of any term or provision of this Agreement having a counterpart
in or otherwise derived from a term or provision of the 1940 Act shall be
resolved by reference to such term or provision of the 1940 Act and to
interpretations thereof, if any, by the United States courts or, in the absence
of any controlling decision of any such court, by rules, regulations or orders
of the SEC issued pursuant to the 1940 Act. In addition, where the effect of a
requirement of the 1940 Act reflected in any provision of this Agreement is
revised by rule, regulation or order of the SEC, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers on the day and year first above written.
GAM FUNDS, INC.
By:___________________________
Name: Kevin J. Blanchfield
Title: Treasurer
GAM SERVICES, INC.
By:____________________________
Name: David A. Anderson
Title: Manageing Director - Mutual Funds
Exhibit 6(c)
GAM FUNDS, INC.
SALES AGREEMENT
GAM Services Inc., a Delaware corporation, serves as Distributor (the
"Distributor") of GAM Funds, Inc., an open-end investment company registered
under the Investment Company Act of 1940 (the "Investment Company Act"). GAM
Funds, Inc. has established separate series which are designated as GAM Europe
Fund, GAM Global Fund, GAM International Fund, GAM North America Fund, GAM
Pacific Basin Fund, GAM Japan Capital Fund, GAM Asian Capital Fund, and GAMerica
Capital Fund and may establish additional separate series in the future from
time to time in its discretion, all of which shall be referred to herein as the
"Funds." The Funds currently offer Class A and Class D shares of common stock
("Shares") to the public in accordance with the terms and conditions contained
in the Prospectus of the Funds, and may offer additional classes of shares of
the Funds in the future, which for purposes of this Agreement shall also be
deemed Shares. (The term "Prospectus" as used herein refers to the prospectus on
file with the Securities and Exchange Commission which is part of the
registration statement on file at any given time under the Securities Act of
1933 (the "Securities Act")). The Funds are offering their Shares primarily to
private individual investors who seek capital appreciation. In connection with
the foregoing, you may serve as a participating dealer (and, therefore, accept
orders for the purchase or redemption of Shares, respond to shareholder
inquiries and perform other related functions) on the following terms and
conditions:
1. PARTICIPATING DEALER. You are hereby designated a Participating Dealer and as
such are authorized to (i) accept orders for the original purchase of Shares or
purchase by exchange, and transmit to the Funds such orders and the payment made
therefore, (ii) accept orders for the redemption of Shares, and transmit to the
Funds such orders and all additional material, including any Share certificates,
as may be required to complete the redemption, and (iii) assist your customers
("Customers") with the foregoing purchases, redemptions and exchanges, as well
as all other matters relating to their investments in the Funds, in each case
subject to the terms and conditions set forth in the Prospectus. You are to
review each Share purchase or redemption order submitted through you or with
your assistance for completeness and accuracy. You further agree to undertake
from time to time certain shareholder servicing and account maintenance
activities on behalf of your Customers who have purchased Shares and who use
your facilities, including handling all inquiries related to the status of their
investment and positions or transactions in Shares reflected in their account;
communicating with the Funds; effecting redemptions, purchases and exchanges of
Shares; and distributing confirmations and account statements and otherwise
preparing and maintaining accurate and complete Customer account records with
respect to Customer assets invested in Shares of the Fund.
2. LIMITATION OF AUTHORITY. No person is authorized to make any representation
concerning the Funds or the Shares except those contained in the Prospectus and
in such printed information as the Distributor may subsequently prepare. No
person is authorized to distribute sales material relating to the Funds without
the prior written approval of the Distributor.
3. SELLING COMPENSATION. The Distributor will pay you selling commissions no
less often than monthly according to the reallowance schedule contained in the
Prospectus as compensation for selling Shares of the Funds. Upon the sale of any
Shares you will look solely to the Distributor for sales compensation from
payments received for such Shares, and you acknowledge that the Funds shall have
no direct responsibility therefor.
<PAGE>
4. DISTRIBUTION AND SERVICE FEES. Each of the Funds has adopted a plan of
distribution pursuant to Rule 12b-1 of the Investment Company Act for its Class
A Shares and, where offered by particular Funds, for its Class D Shares
(collectively the "Plans"). Pursuant to the Plans, the Distributor may pay
Participating Dealers distribution and/or service fees based upon total Fund
assets maintained in accounts held in the name or for the benefit of your
Customers. Such fees shall be paid in consideration of your efforts in providing
information and services necessary or appropriate (i) to provide personal
services to your Customer-shareholders of the Funds, (ii) to assist the
Distributor in any distribution efforts, including, without limitation, making
use of the Participating Dealer's name, client lists and publications for the
solicitation of sales of Shares to Customers, and (iii) such other assistance as
the Distributor may reasonably request, to the extent permitted by applicable
statute, rule or regulation.
With respect to the Class A Share accounts maintained for the benefit of your
Customers, the Distributor shall pay to you a service fee (as defined in the
National Association of Securities Dealers, Inc. Rules of Fair Practice) equal
to 0.25 of 1% per annum of the average daily net assets of all such Class A
Share accounts. With respect to Class D Share accounts maintained for the
benefit of your Customers, the Distributor shall pay a total fee equal to 0.50
of 1% (representing a service fee of 0.25 of 1% and a distribution fee of 0.25
of 1%) per annum of the average daily net assets of all such Class D Share
accounts. Such payments shall be payable no less often than quarterly and may be
subject to such minimums as the Distributor shall establish from time to time.
The Distributor has no obligation to make any such payments and you agree to
waive payment of any fee until the Distributor is in receipt of the
corresponding fee from each Fund. The payment of fees has been authorized
pursuant to the Plans adopted by the Directors and shareholders of the Funds
pursuant to the requirements of the Investment Company Act and such
authorizations may be withdrawn at any time.
5. PROSPECTUS AND REPORTS. You agree to comply with the provisions contained in
the Securities Act governing the distribution of Prospectuses to persons to whom
you offer Shares. You further agree to deliver, upon our request, copies of any
amended Prospectus to Customers whose Shares you are holding as record owner and
to deliver to such persons copies of the annual and interim reports and any
proxy solicitation materials of the Funds. We agree to furnish to you as many
copies of the Prospectus, annual and interim reports and proxy solicitation
materials as you may reasonably request.
6. QUALIFICATION TO ACT. You represent that you are a member in good standing of
the National Association of Securities Dealers, Inc. You agree that you will not
offer Shares to persons in any jurisdiction in which you may not lawfully make
such offer due to the fact that you are not registered under, or are not exempt
from, the applicable registration or licensing requirements of such
jurisdiction.
7. BLUE SKY. The Funds have registered an indefinite number of Shares under the
Securities Act. Upon application to us, we will inform you as to the states or
other jurisdictions in which we believe the Shares have been qualified for sale
under, or are exempt from the requirements of, the respective securities laws of
such states, but we assume no responsibility or obligation as to your right to
sell Shares in any jurisdiction.
<PAGE>
8. AUTHORITY OF FUNDS. The Funds shall have full authority to take such action
as each deems advisable in respect of all matters pertaining to the offering of
Shares, including the right not to accept any order for the purchase of Shares.
9. RECORD KEEPING. You will (i) maintain all records required by law to be kept
by you relating to transactions in Shares of the Funds by or on behalf of your
Customers and compensation received by you in respect thereto, (ii) upon request
by the Funds, promptly make such of these records available to the Funds as the
Funds may reasonably request in connection with their operations, and (iii)
promptly notify the Funds if you experience any difficulty in maintaining the
records described in the foregoing clause in an accurate and complete manner.
10. LIABILITY. The Distributor shall be under no liability to you except for
lack of good faith and for obligations expressly assumed by it hereunder. In
carrying out your obligations, you agree to act in good faith and without
negligence. Nothing contained in this agreement is intended to operate as a
waiver by the Distributor or you of compliance with any provision of the
Investment Company Act, the Securities Act, the Securities Exchange Act of 1934,
as amended, or the rules and regulations promulgated by the Securities and
Exchange Commission thereunder.
11. TERM AND TERMINATION. Except with respect to the provisions of paragraph 4
hereof, the continuation of which shall be subject to the proviso set forth
therein, this Agreement shall remain in effect until terminated as set forth
herein. This agreement may be terminated by either party, without penalty, upon
ten days' notice to the other party and shall automatically terminate in the
event of its assignment, as defined in the Investment Company Act. This
agreement may also be terminated at any time without penalty by the vote of a
majority of the members of the Board of Directors of the Funds who are not
"interested persons" (as such phrase is defined in the Investment Company Act),
and have no direct or indirect financial interest in the operation of the
Distribution Agreement between the Funds and the Distributor, or by the vote of
a majority of the outstanding voting securities of each Fund.
12. COMMUNICATIONS. All communications to us should be sent to the Distributor
at GAM Services Inc., 135 East 57th Street, New York, NY 10021, Attention:
Managing Director - Mutual Funds. Any notice to you shall be duly given if
mailed or telegraphed to you at the address specified by you below.
13. MISCELLANEOUS. This agreement constitutes the entire agreement between us
relating to the subject matter hereof and may only be amended by a written
agreement executed on behalf of each of us.
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us one copy of this agreement.
Firm Name: CONFIRMED AND ACCEPTED BY:
____________________________________ GAM SERVICES, INC.
By: ________________________________ By: ______________________________
____________________________________ David A. Anderson
Managing Director -
Mutual Funds
__________________________________ GAM Services, Inc.
(Please Type Name and Title)
Address: ___________________________
____________________________________
____________________________________
NSCC Dealer #_______________________
NSCC Dealer Alpha Code______________
NSCC Clearing #_____________________
Phone Number: _____________________
Fax Number:_________________________
Date: ______________________________
Mutual Fund Coordinator/Primary Contact:
____________________________________
ADMINISTRATION AGREEMENT
THIS ADMINISTRATION AGREEMENT is made as of October 1, 1995 by and between
Brown Brothers Harriman & Co., a limited partnership organized under the laws of
the State of New York (the "Administrator"), and GAM Funds Inc. on behalf of
each of the portfolios listed on Schedule A attached hereto, as the same may be
amended from time to time (each a "Fund" and, collectively, the "Fund" or
"Funds").
WHEREAS, the Funds are registered as management investment companies under
the
Investment Company Act of 1940, as amended (the " 1940 Act"); and
WHEREAS, the Funds desire to retain the Administrator to render certain
administrative services to the Funds, and the Administrator is willing to render
such services.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto agree as follows:
1. EMPLOYMENT OF ADMINISTRATOR. Each of the Funds hereby employs and
appoints the Administrator to act as its administrator on the terms set forth in
this Agreement, and the Administrator accepts such appointment.
2. DELIVERY OF DOCUMENTS. Each Fund will (i) furnish the Administrator with
properly certified or authenticated copies of resolutions of the Fund's Board of
Directors or Trustees authorizing the appointment of the Administrator to
provide certain administrative services to the Fund and approving this
Agreement; (ii) provide the Administrator with any other documents or
resolutions (including but not limited to directions or resolutions of the
Fund's Board of Directors or Trustees) which relate to or affect the
Administrator's performance of its duties hereunder or which the Administrator
may reasonably request; and (iii) notify the Administrator promptly of any
matter affecting the performance by the Administrator of its services under this
Agreement.
3. DUTIES AS ADMINISTRATOR. Subject to the supervision and direction of the
Board of
<PAGE>
Directors or Trustees of a Fund, the Administrator will perform the following
services:
(1) Accumulate information for and, subject to approval by the Fund's
Treasurer, prepare reports to the Fund's shareholders of record as set forth in
Rule 30d-1 of the 1940 Act or as agreed upon in writing from time to time
between the parties hereto;
(2) Prepare and file the Securities and Exchange Commission's Form N-SAR
and Rule 24f-2 Notice;
(3) Consult with the Fund's Treasurer on financial matters relating to the
Fund including without limitation dividend distributions, expense proformas,
expense accruals and other matters, including payment of expenses, as shall from
time to time be agreed upon by the parties;
(4) Assist the investment adviser for the Fund (the "Adviser"), at the
Adviser's request, in monitoring and developing compliance procedures for the
Fund which will include, among other matters, procedures to assist the Adviser
in monitoring compliance with the Fund's investment objectives, policies and
restrictions, tax matters and applicable laws and regulations and performing
certain monthly compliance tests, to the extent relevant information is
available to the Administrator in the performance of its functions as the Fund's
net asset value calculation agent;
(5) Assist the Fund's Treasurer in the preparation of quarterly reporting
to the Fund's Board of Directors or Trustees including brokerage allocation
reporting and reporting required under Rules 17a-7 and 17e-1 of the 1940 Act;
(6) Assist the Fund's Treasurer, officers and Adviser in such other matters
as the Fund and the Administrator shall from time to time agree;
(7) Report monthly to the Fund's Treasurer on compliance of the Fund's
fidelity bond coverage with Rule 17g-1 of the 1940 Act; and
(8) Report monthly to Treasurer on comparison of the Fund's actual shares
outstanding with its authorized shares.
In performing its duties and obligations hereunder, the Administrator will
act in accordance with each Fund's Articles of lncorporation or Declaration of
Trust, By-Laws and Prospectus and with the Proper Instructions of its Board of
Directors or Trustees, Treasurer and any other authorized person as from time to
time delivered to the Administrator by the Fund. It is
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<PAGE>
agreed and understood, however, that the Administrator shall not be responsible
for compliance of a Fund's investments with any applicable documents, laws or
regulations, or for losses, costs or expenses arising out of a Fund's failure to
comply with said documents, laws or regulations or a Fund's failure or inability
to correct any non-compliance therewith.
4. EXPENSES AND COMPENSATION. For the services to be rendered and the
facilities to be furnished by the Administrator as provided for in this
Agreement, each Fund shall pay the Administrator for its services rendered
pursuant to this Agreement an administration fee based on such fee schedule as
may from time to time be agreed upon in writing by the Funds and the
Administrator. In addition to such fee, the Administrator shall bill each Fund
separately for any out-of-pocket disbursements of the Administrator.
Out-of-pocket disbursements shall include, but shall not be limited to, postage,
including courier services; telephone; telecommunications; printing, duplicating
and photocopying charges; forms and supplies; filing fees; legal expenses; and
travel expenses. The foregoing fees and disbursements shall be billed to each
Fund by the Administrator and shall be paid promptly by wire transfer or other
appropriate means to the Administrator.
5. LIMITATION OF LIABILITY. (a) The Administrator shall incur no liability
with respect to any telecommunications, equipment or power failures, or any
failures to perform or delays in performance by postal or courier services or
third-party information providers. The Administrator shall also incur no
liability under this Agreement if the Administrator or any agent or entity
utilized by the Administrator shall be prevented, forbidden or delayed from
performing, or omits to perform, any act or thing which this Agreement provides
shall be performed or omitted to be performed, by reason of causes or events
beyond its control, including but not limited to (x) any Sovereign Risk, or (y)
any provision of any present or future law, regulation or order of the United
States or any state thereof, or of any foreign country or political subdivision
thereof, or of any securities depository or clearing agency, or (z) any
provision of any order or judgment of any court of competent jurisdiction. A
"Sovereign Risk" shall mean any nationalization; expropriation; devaluation;
revaluation; confiscation; seizure; cancellation; destruction; strike;
-3-
<PAGE>
act of war, terrorism, insurrection or revolution; or any other act or event
beyond the Administrator's control.
(b) Notwithstanding any other provision of this Agreement, the
Administrator shall not be held accountable or liable for any losses, damages or
expenses a Fund or any shareholder or former shareholder of a Fund or any other
person may suffer or incur arising from acts, omissions, errors or delays of the
Administrator in the performance of its obligations and duties hereunder,
including without limitation any error of judgment or mistake of law, except a
damage, loss or expense resulting from the Administrator's willful malfeasance,
bad faith or gross negligence in the performance of such obligations and duties.
The Administrator shall in no event be required to take any action which is in
contravention of any applicable law, rule or regulation or any order or judgment
of any court of competent jurisdiction. Each Fund hereby agrees to indemnify the
Administrator against and hold it harmless from any and all losses, claims,
damages, liabilities or expenses (including reasonable counsel fees and
expenses) resulting from any act, omission, error or delay or any claim, demand,
action or suit, in connection with or arising out of performance of its
obligations and duties under this Agreement, not resulting from the willful
malfeasance, bad faith or gross negligence of the Administrator in the
performance of such obligations and duties.
The Administrator shall in no event be liable or responsible to a Fund, any
present or former shareholder of a Fund or any other person for any error or
delay which continued or was undetected after the date of an audit performed by
the certified public accountants employed by the Fund if, in the exercise of
reasonable care in accordance with generally accepted accounting standards, such
accountants should have become aware of such error or delay in the course of
performing such audit. It is also agreed that, in the event of an act, omission,
error or delay which leads to losses, costs or expenses for which the
Administrator may be liable, the Fund and the Administrator will consult and
make good faith efforts to reach agreement on what actions should be taken in
order to mitigate any loss suffered by the Fund or its present or former
shareholders, in order that the Administrator's exposure to liability shall be
reduced to the extent possible after taking into account all relevant factors
and alternatives. It is understood that in attempting to reach agreement on the
actions to be taken or the amount of the loss which should appropriately be
borne by the Administrator, the Fund and the Administrator will consider such
relevant factors
-4-
<PAGE>
as the amount of the loss involved, the Fund's desire to avoid loss of
shareholder good will, the fact that other persons or entities could have been
reasonably expected to have detected the error sooner than the time it was
actually discovered, the appropriateness of limiting or eliminating the benefit
which shareholders or former shareholders might have obtained by reason of the
error, and the possibility that other parties providing services to the Fund
might be induced to absorb a portion of the loss incurred.
(c) Notwithstanding anything else in this Agreement to the contrary, the
Administrator's entire liability to any one Fund for any loss or damage arising
or resulting from its performance hereunder or for any other cause whatsoever,
and regardless of the form of action, shall be limited to that Fund's actual and
direct out-of-pocket expenses and losses which are reasonably incurred by the
Fund. In no event and under no circumstances shall the Administrator or a Fund
be held liable to the other party for consequential or indirect damages, loss of
profits, damage to reputation or business or any other special damages arising
under or by reason of any provision of this Agreement or for any act or omission
hereunder.
6. RELIANCE BY THE ADMINISTRATOR ON PROPER INSTRUCTIONS AND OPINIONS OF
COUNSEL AND OPINIONS OF CERTIFIED PUBLIC ACCOUNTANTS. (a) The Administrator
shall not be liable for, and shall be indemnified by the Fund against any and
all losses, costs, damages or expenses arising from or as a result of, any
action taken or omitted in reliance upon Proper Instructions believed by it to
be genuine or upon any other written notice, request, direction, instruction,
certificate or other instrument believed by it to be genuine and signed by the
proper party or parties.
Proper Instructions shall include a written request, direction, instruction
or certification signed or initialed on behalf of the Fund by one or more
persons as the Board of Trustees or Directors of the Fund shall have from time
to time authorized. Those persons authorized to give Proper Instructions may be
identified by the Board of Trustees or Directors by name, title or position and
will include at least one officer empowered by the Board to name other
individuals who are authorized to give Proper Instructions on behalf of the
Fund. Telephonic or other oral instructions or instructions given by telefax
transmission may be given by any one of the above persons and will also be
considered Proper Instructions if the Administrator believes them to have
-5-
<PAGE>
been given by a person authorized to give such instructions with respect to the
transaction involved.
With respect to telefax transmissions, the Fund hereby acknowledges that
(i) receipt of legible instructions cannot be assured, (ii) the Administrator
cannot verify that authorized signatures on telefax instructions are original,
and (iii) the Administrator shall not be responsible for losses or expenses
incurred through actions taken in reliance on such telefax instructions. Each
Fund agrees that such telefax instructions shall be conclusive evidence of the
Fund's Proper Instruction to the Administrator to act or to omit to act.
Proper Instructions given orally will be confirmed by written instructions
in the manner set forth above, including by telefax, but the lack of such
confirmation shall in no way affect any action taken by the Administrator in
reliance upon such oral instructions. The Fund authorizes the Administrator to
tape record any and all telephonic or other oral instructions given to the
Administrator by or on behalf of the Fund (including any of its officers,
Directors, Trustees, employees or agents or any investment manager or adviser or
person or entity with similar responsibilities which is authorized to give
Proper Instructions on behalf of the Fund to the Administrator.)
(b) The Administrator may consult with its counsel or the Fund's counsel in
any case where so doing appears to the Administrator to be necessary or
desirable. The Administrator shall not be considered to have engaged in any
misconduct or to have acted negligently and shall be without liability in acting
upon the advice of its counsel or of a Fund's counsel.
(c) The Administrator may consult with a certified public accountant or a
Fund's Treasurer in any case where so doing appears to the Administrator to be
necessary or desirable. The Administrator shall not be considered to have
engaged in any misconduct or to have acted negligently and shall be without
liability in acting upon the advice of such certified public accountant or of a
Fund's Treasurer.
7. TERMINATION OF AGREEMENT. (a) This Agreement shall continue in full
force and effect until terminated by the Administrator or a Fund by an
instrument in writing delivered or mailed, postage prepaid, to the other party,
such termination to take effect not sooner than ninety
-6-
<PAGE>
(90) days after the date of such delivery or mailing. In the event a termination
notice is given by a party hereto, all expenses associated with the movement of
records and materials and the conversion thereof shall be paid by the Fund for
which services shall cease to be performed hereunder. The Administrator shall be
responsible for completing all actions in progress when such termination notice
is given unless otherwise agreed.
Notwithstanding anything in the foregoing provisions of this clause, if it
appears impracticable in the circumstances to effect an orderly delivery of the
necessary and appropriate records of the Administrator to a successor within the
time specified in the notice of termination as aforesaid, the Administrator and
the relevant Fund agree that this Agreement shall remain in full force and
effect for such reasonable period as may be required to complete necessary
arrangements with a successor.
(b) If a party hereto shall fail to perform its duties and obligations
hereunder (a "Defaulting Party") resulting in material loss to another party
("the "Non-Defaulting Party"), the Non-Defaulting Party may give written notice
thereof to the Defaulting Party, and if such material breach shall not have been
remedied within thirty (30) days after such written notice is given, then the
Non-Defaulting Party may terminate this Agreement by giving thirty (30) days'
written notice of such termination to the Defaulting Party. If the Administrator
is the Non-Defaulting Party, its termination of this Agreement shall not
constitute a waiver of any other rights or remedies of the Administrator with
respect to payment for services performed prior to such termination or fights of
the Administrator to be reimbursed for out-of-pocket expenses. In all cases,
termination by the Non-Defaulting Party shall not constitute a waiver by the
Non-Defaulting Party of any other rights it might have under this Agreement or
otherwise against the Defaulting Party.
(c) This Section 7 shall survive any termination of this Agreement, whether
for cause or not for cause.
8. AMENDMENT OF THIS AGREEMENT. This Agreement constitutes the entire
understanding and agreement of the parties hereto with respect to the subject
matter hereof. No provision of this Agreement may be amended or terminated
except by a statement in writing signed by the party against which enforcement
of the amendment or termination is sought.
-7-
<PAGE>
In connection with the operation of this Agreement, the Funds and the
Administrator may agree in writing from time to time on such provisions
interpretive of or in addition to the provisions of this Agreement as may in
their joint opinion be consistent with the general tenor of this Agreement. No
interpretive or additional provisions made as provided in the preceding sentence
shall be deemed to be an amendment of this Agreement.
In the event any provision of this Agreement is determined to be void or
unenforceable, such determination shall not affect the remainder of this
Agreement, which shall continue to be in force.
The section headings and the use of defined terms in the singular or plural
tenses in this Agreement are for the convenience of the parties and in no way
alter, amend, limit or restrict the contractual obligations of the parties set
forth in this Agreement.
9. GOVERNING LAW. This Agreement shall be governed by and construed
according to the laws of the Commonwealth of Massachusetts without giving effect
to conflicts of laws principles.
10. NOTICES. Notices and other writings delivered or mailed postage prepaid
to a Fund addressed to such Fund c/o Global Asset Management (USA) Inc., 135
East 57th Street, New York, New York 10022, Attention: Treasurer or to such
other address as the Fund may have designated to the Administrator in writing,
or to the Administrator at 40 Water Street, Boston, MA 02109, Attention:
Manager, Fund Administration Department, or to such other address as the
Administrator may have designated to the Funds in writing, shall be deemed to
have been properly delivered or given hereunder to the respective addressee.
11. BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of each Fund and the Administrator and their respective successors and
assigns, provided that no party hereto may assign this Agreement or any of its
rights or obligations hereunder without the written consent of the other party.
12. COUNTERPARTS. This Agreement may be executed in any number of
counterparts
-8-
<PAGE>
each of which shall be deemed to be an original and which collectively shall be
deemed to constitute only one instrument. This Agreement shall become effective
when one or more counterparts have been signed and delivered by each of the
parties.
13. EXCLUSIVITY. The services furnished by the Administrator hereunder are
not to be deemed exclusive, and the Administrator shall be free to furnish
similar services to others.
14. AUTHORIZATION. Each Fund hereby represents and warrants that the
execution and delivery of this Agreement have been authorized by such Fund's
Board of Directors or Trustees and that this Agreement has been signed by an
authorized officer of such Fund.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their duly authorized officers as of the date
first written above.
BROWN BROTHERS HARRIMAN & CO. GAM FUNDS INC. ON BEHALF OF EACH OF
THE PORTFOLIOS LISTED ON SCHEDULE A
ATTACHED HERETO
By: By:
------------------------------- ---------------------------------
Name: Stokley P. Towles Name:
Title: Partner Title:
-9-
<PAGE>
SCHEDULE A
TO
ADMINISTRATION AGREEMENT
BETWEEN
BROWN BROTHERS HARRIMAN & CO. AND GAM FUNDS INC.
ON BEHALF OF EACH OF THE FOLLOWING PORTFOLIOS
DATED AS OF OCTOBER 1, 1995
The following is a list of Portfolios for which the Administrator shall serve
under an Administration Agreement dated as of October 1, 1995.
FUND
----
GAM International Fund
GAM Global Fund
GAM Pacific Basin Fund
GAM North America Fund
GAM Japan Capital Fund
GAM Europe Fund
GAM Asian Capital Fund
GAMerica Capital Fund
GAM Mid-Cap U.S. Fund
Dated as of -------------------
By:
---------------------------
Name:
Title:
Date:
Exhibit 11
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of Gam Funds, Inc.,
We consent to the incorporation by reference in the Prospectus and Statement of
Additional Information constituting parts of Post-Effective Amendment No. 28 to
the Registration Statement of Gam Funds, Inc. (comprising, respectively, GAM
International Fund, GAM Global Fund, GAM Europe Fund, GAM Pacific Basin Fund,
GAM Japan Fund, GAM North America fund, GAM Asian Capital Fund, GAMerica Capital
Fund) on the Form N-1A (File No. 2-92136) of our report dated February 14, 1997,
on our audit of the financial statements and financial highlights of the Funds,
which report is included in the Annual Report to shareholders for the year ended
December 31, 1996, which is incorporated by reference in the Post-Effective
Amendment to the Registration Statement.
We also consent to the reference to our firm under the heading "Financial
Highlights" in such Prospectus.
Coopers & Lybrand L.L.P.
Boston, MA
February 27, 1997
- --------------------------------------------------------------------------------
BOARD OF DIRECTORS
- --------------------------------------------------------------------------------
Gilbert de Botton--President
CHAIRMAN, Global Asset Management Limited,
London.
George W. Landau
SENIOR ADVISER AND CHAIRMAN, Latin America Advisory
Board, Coca-Cola International, New York.
Therese Meier
MANAGING DIRECTOR, Global Asset Management
GAM (Schweiz) AG, Zurich.
Madelon DeVoe Talley
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 Fund, from the Transfer Agent or
from:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
IN THE ISLE OF MAN;
GAM Administration Limited,
11 Athol Street, Douglas, Isle of Man IM99 1HH, British Isles
Tel: 44-1624 632632 Fax: 44-1624 625956
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;
Information on GAM's SEC-registered funds -
http://www.usinfo.gam.com
Email enquiries on GAM - [email protected]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GLOBAL ASSET MANAGEMENT (R)
GAM FUNDS, INC
GAM (R)
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
THE GAM GROUP
- --------------------------------------------------------------------------------
The GAM group was founded in April 1983 by Gilbert de Botton. GAM's
corporate policy is to attempt to harness the top investment talent in the
world, not only in-house but also outside the GAM organization, in order to
provide above average, long term growth. The GAM group currently has
approximately US$9.0 billion under management and employs a worldwide staff of
about 390 people.
For US investors, GAM offers GAM Funds, Inc. an open-end diversified
management investment company registered under the Investment Company Act of
1940, as amended. The Fund consists of eight open-end mutual funds -- GAM
International, GAM Global, GAM Europe, GAM Pacific Basin, GAM Japan Capital, GAM
North America, GAM Asian Capital and GAMerica Capital Funds.
For additional information about any of the GAM Funds, please contact your
financial consultant or call GAM at 1--800--426--4685 (toll free).
- --------------------------------------------------------------------------------
CONTENTS
- --------------------------------------------------------------------------------
GAM International ...................................................... 2
GAM Global ............................................................. 7
GAM Europe ............................................................. 12
GAM Pacific Basin ...................................................... 17
GAM Japan Capital ...................................................... 22
GAM North America ...................................................... 26
GAMAsian Capital ....................................................... 30
GAMerica Capital ....................................................... 34
Portfolio Analysis ..................................................... 37
Financial Statements ................................................... 39
Notes to Financial Statements .......................................... 46
Independent Auditor's Report ........................................... 62
<PAGE>
- --------------------------------------------------------------------------------
GAM INTERNATIONAL FUND
- --------------------------------------------------------------------------------
FUND MANAGEMENT
- --------------------------------------------------------------------------------
- -------------
[Photo]
- -------------
JOHN R. HORSEMAN, INVESTMENT DIRECTOR, JOINED GAM INITIALLY AS A MEMBER OF THE
ASIAN TEAM BASED IN HONG KONG. AFTER MOVING TO THE LONDON OFFICE IN 1990 HE IS
NOW RESPONSIBLE FOR A NUMBER OF GAM'S GLOBAL AND INTERNATIONAL FUNDS. PRIOR TO
JOINING GAM IN 1987, HE WORKED FOR BA INVESTMENT MANAGEMENT INTERNATIONAL LTD,
RESPONSIBLE FOR CERTAIN OF THE BANK OF AMERICA'S GLOBAL EQUITY FUNDS. HE
COMMENCED MANAGEMENT OF GAM GLOBAL AND GAM INTERNATIONAL FUNDS ON APRIL 1, 1990.
MR. HORSEMAN ALSO MANAGES THE OFFSHORE FUND GAM UNIVERSAL US$ INC.
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
<TABLE>
<CAPTION>
GAM
International
Class A (after Average
GAM maximum MSCI 1 Month
International sales load EAFE Deposit
Class A of 5%) Index Rate
<S> <C> <C> <C> <C>
31st Dec, 96 US$23.15 1,185.57
- ---------------------------------------------------------------------------------------------
% % % %
- ---------------------------------------------------------------------------------------------
Quarter to Dec, 96 +10.26 +4.74 +1.67 +1.31
- ---------------------------------------------------------------------------------------------
Jan -- Dec, 1996 +8.98 +3.53 +6.36 +5.37
- ---------------------------------------------------------------------------------------------
Average annual total return:-
- ---------------------------------------------------------------------------------------------
1 year to Dec, 1996 +8.98 +3.53 +6.36 +5.37
- ---------------------------------------------------------------------------------------------
5 years to Dec, 1996 +18.74 +17.53 +8.48 +4.52
- ---------------------------------------------------------------------------------------------
10 years to Dec, 1996 +15.48 +14.88 +8.84 +6.18
- ---------------------------------------------------------------------------------------------
Since inception +21.07 +20.55 +16.55 +6.44
- ---------------------------------------------------------------------------------------------
</TABLE>
Performances are calculated on a total return basis. During the year Class
A shares paid a dividend of US$0.13 and Class D US$0.05. 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 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.
- ----------
Sources used are the net asset value of the Fund computed daily and Morgan
Stanley Capital International.
The MSCI Europe, Australian and Far East Index is a market-value weighted,
unmanaged index on the weighted share prices of some 1,000 companies listed on
the stock exchanges of Australia, Austria, Belgium, Denmark, France, Germany,
Hong Kong, Italy, Japan, the Netherlands, Norway, Singapore/Malaysia, Spain,
Sweden, Switzerland and the United Kingdom. The combined market capitalisation
of these companies represents approximately 60% of the aggregate market value of
the stock exchanges of the above 16 countries. The percentage change in the
value of the index includes dividends reinvested.
THE FACTS -- CLASS D SHARES
<TABLE>
<CAPTION>
GAM
International
Class D (after Average
GAM maximum MSCI 1 Month
International sales load EAFE Deposit
Class D of 3.5%) Index Rate
<S> <C> <C> <C> <C>
31st Dec, 96 US$23.07 1,185.57
- ---------------------------------------------------------------------------------------------
% % % %
- ---------------------------------------------------------------------------------------------
Quarter to Dec, 96 +10.13 +6.27 +1.67 +1.31
- ---------------------------------------------------------------------------------------------
Jan -- Dec, 1996 +8.33 +4.54 +6.36 +5.37
- ---------------------------------------------------------------------------------------------
Average annual total return:-
- ---------------------------------------------------------------------------------------------
1 year to Dec, 1996 +8.33 +4.54 +6.36 +5.37
- ---------------------------------------------------------------------------------------------
Since inception +14.09 +10.98 +10.39 +5.47
- ---------------------------------------------------------------------------------------------
</TABLE>
[Chart]
3
<PAGE>
- --------------------------------------------------------------------------------
GAM INTERNATIONAL FUND -- REPORT TO SHAREHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN -- CLASS A
[Chart]
ANNUAL PERFORMANCE -- CLASS A
[Chart]
GAM
International
Class A (after
GAM maximum MSCI
International sales load EAFE
Class A of 5%) Index
Year % % %
- -------------------------------------------------------
1992 3.08 (2.07) (11.85)
1993 79.96 70.97 32.94
1994 (10.23) (14.71) 8.06
1995 30.09 23.59 1.55
1996 8.98 3.53 6.36
THE COMMENT
1996 has continued to be a year of progress for investors in GAM
International, although at a rather more modest pace than in some previous
years. In general, good appreciation in the Fund's equity positions was partly
offset by an appreciating dollar and sluggish bond markets in Europe.
European markets formed the mainstay of the Fund during the year and
currently represent around 70% of the Fund's total assets. Growth stocks,
particularly in the pharmaceutical sector, performed strongly and are well
represented in GAM International. The merger between Ciba and Sandoz in
Switzerland figured prominently. Elsewhere the Fund's exposure to financials and
utilities in Europe performed well as short-term interest rates and inflation
both remained low. In anticipation of further gains in these sectors some new
names were added during the year, among them OM Gruppen in Sweden and Den Danske
Bank in Denmark. Bond markets generally lagged behind their equity counterparts
although they all managed positive returns in their respective local currencies.
At present bond holdings represent 12% of GAM International and were reduced
during the year.
Asian markets by comparison overall had an indifferent year although Hong
Kong was a bright spot. Low valuations, good earnings growth and positive
developments in China suggest this might continue. In the summer the Fund began
to rebuild its holdings in Hong Kong after a two-and-a-half-year absence. The
Fund's holdings in Japanese electrical stocks were retained throughout 1996.
- ----------
A Plan of Distribution (12b-1 plan), as proposed by your Fund's directors, was
approved by the Class A shareholders of each Series of the Fund in 1996. The
12b-1 plan calls for your Fund to pay the Fund's distributor up to 0.30% of its
average net assets to finance distribution and servicing related activities
engaged in by the distributor and third party financial intermediaries for the
benefit of the Fund and its shareholders.
4
<PAGE>
- --------------------------------------------------------------------------------
GAM INTERNATIONAL FUND -- STATEMENT OF INVESTMENTS
- --------------------------------------------------------------------------------
AS AT 31ST DECEMBER, 1996
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ NET ASSETS
- --------------------------------------------------------------------------------
ADJUSTABLE RATE INDEX NOTES
UNITED KINGDOM
+ DLJ ARIN, Indexed to 320,000
shares British Biotech
1997-04-3 12,887,490 1.23
+ DLJ ARIN, Indexed to 1,100,000
shares General Cable
1997--05--05 1,034,662 0.10
+ DLJ ARIN, Indexed to 1,100,000
shares General Cable
1997--06--10 1,199,305 0.11
+ DLJ ARIN, Indexed to 3,250,000
shares TeleWest
Communications 1997--04--03 5,926,867 0.57
+ DLJ ARIN, Indexed to 1,200,000
shares TeleWest
Communications 1997--04--25 1,792,855 0.17
+ DLJ ARIN, Indexed to 1,200,000
shares TeleWest
Communications 1997--09--16 940,348 0.09
----------- -----
TOTAL ADJUSTABLE RATE INDEX NOTES
(COST $13,863,965) 23,781,527 2.27
----------- -----
BONDS
FRANCE
53.552m OAT 6% 2025--10--25 9,211,749 0.88
----------- -----
9,211,749 0.88
----------- -----
GERMANY
17.515m Austria 6.50% 2024--01--10 11,032,242 1.05
117.750m Bundes Deutschland 6.25%
2024--01--04 72,664,024 6.93
----------- -----
83,696,266 7.98
----------- -----
TOTAL BONDS (COST $95,244,229) 92,908,015 8.86
----------- -----
BOND WARRANTS
FRANCE
*6,066,000 French Government Bond
85.25 Wts May 1997 4,770,026 0.46
----------- -----
4,770,026 0.46
----------- -----
GERMANY
*4,174,000 Bundes Deutschland 6.25%
Wts May 1997 15,868,144 1.51
----------- -----
15,868,144 1.51
----------- -----
NETHERLANDS
*1,607,000 Nederland 7.5% 2023--01--15
105.1 Wts July 1997 7,037,280 0.67
----------- -----
7,037,280 0.67
----------- -----
TOTAL BOND WARRANTS (COST $14,471,123) 27,675,450 2.64
----------- -----
EQUITIES
BELGIUM
55,000 Kredietbank 18,043,260 1.72
----------- -----
18,043,260 1.72
----------- -----
DENMARK
250,000 Danske Bank 20,171,345 1.92
----------- -----
20,171,345 1.92
----------- -----
FRANCE
24,703 Carrefour 16,073,495 1.53
41,925 L'Oreal 15,789,043 1.51
380,000 Lagardere Groupe Registered 10,429,218 0.99
134,000 Union des Assurances
Federales 16,528,862 1.58
----------- -----
58,820,618 5.61
----------- -----
GERMANY
360,000 BASF 13,868,469 1.32
340,000 Veba 19,664,674 1.88
----------- -----
33,533,143 3.20
----------- -----
HONG KONG
3,825,000 Cheung Kong (Holdings) 33,999,451 3.24
3,900,000 Henderson Land 39,330,273 3.75
9,508,000 Hong Kong & China Gas 18,255,065 1.74
2,109,739 HSBC Holdings (HKD) 45,143,423 4.31
6,754,000 JCG Holdings 6,592,889 0.63
----------- -----
143,321,101 13.67
----------- -----
JAPAN
300,000 Amway Japan 9,636,474 0.92
1,435,000 Canon 31,720,922 3.03
3,750 East Japan Railway Co. 16,870,305 1.61
470,000 Hoya 18,465,590 1.76
270,000 Rohm 17,718,677 1.69
330,000 Sony 21,627,666 2.06
780,000 Takeda Chemical 16,366,462 1.56
325,000 TDK Corp 21,187,721 2.02
----------- -----
153,593,817 14.65
----------- -----
MALAYSIA
2,700,000 UMW Holdings 12,615,324 1.20
----------- -----
12,615,324 1.20
----------- -----
5
<PAGE>
- --------------------------------------------------------------------------------
GAM INTERNATIONAL FUND -- STATEMENT OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ NET ASSETS
- --------------------------------------------------------------------------------
NETHERLANDS
448,753 ABN-AMRO Holdings 29,178,754 2.79
1,030,891 Fortis AMEV 36,079,557 3.44
615,323 ING 22,140,458 2.11
117,917 Wolters Kluwer CVA 15,654,968 1.50
------------- ------
103,053,737 9.84
------------- ------
SINGAPORE
1,283,000 City Developments 11,552,776 1.10
282,500 Singapore Bus Service (FR) 1,463,678 0.14
3,363,000 Want Want Holdings 8,844,690 0.84
------------- ------
21,861,144 2.08
------------- ------
SPAIN
400,000 Banco Argentaria 17,914,332 1.71
73,200 Banco Popular Registered 14,388,508 1.37
------------- ------
32,302,840 3.08
------------- ------
SWEDEN
625,270 OM Gruppen 18,796,999 1.79
------------- ------
18,796,999 1.79
------------- ------
SWITZERLAND
*27,620 Novartis Registered 31,633,515 3.02
4,150 Roche Holding Genussscheine 32,291,558 3.08
*87,560 Swiss Bank Corp Registered 16,648,502 1.59
------------- ------
80,573,575 7.69
------------- ------
UNITED KINGDOM
3,489,130 B.A.T. Industries 28,929,786 2.76
6,712,798 Bank of Scotland 35,419,058 3.38
2,200,000 Barclays 37,763,576 3.60
76,747 Barclays (Restricted) 1,317,382 0.13
1,000,000 Carpetright 9,901,718 0.94
1,340,000 Hyder 17,124,833 1.63
2,000,000 Prudential 16,856,904 1.61
25,892 Prudential (Restricted) 218,230 0.02
1,840,000 RJB Mining 13,396,442 1.28
1,767,112 Severn Trent 20,252,233 1.93
2,528 Smithkline Beecham 34,992 0.00
1,703,516 Thames Water 17,830,772 1.70
823,962 United Utilities 8,737,366 0.83
145,015 United Utilities (Restricted) 1,537,752 0.15
------------- ------
209,321,044 19.96
------------- ------
TOTAL EQUITIES (COST $802,114,527) 906,007,947 86.41
------------- ------
EQUITY WARRANTS
SWITZERLAND
*3,000 Roche Holding Wts
1998--05--05 97,497 0.01
*7,800 Swiss Bank Corp Bearer
Wts 2000 21,561 0.00
------------- ------
TOTAL EQUITY WARRANTS (COST $85,829) 119,058 0.01
------------- ------
TOTAL INVESTMENTS (COST $925,779,673**) 1,050,491,997 100.19
------------- ------
NET CURRENT LIABILITIES (1,956,665) (0.19)
------------- ------
TOTAL NET ASSETS 1,048,535,332 100.00
============= ======
* Non-income producing security.
** Cost for federal income tax purposes is $925,989,477. (Note 5)
+ Adjustable rate index notes are inversely indexed to the value of the
underlying security.
Glossary of terms:
FR -- Foreign Registered
See notes to financial statements.
GEOGRAPHIC ANALYSIS
AS AT 31ST DECEMBER, 1996
[The following table represents a chart in the printed piece.]
NET CURRENT LIABILITIES (.019)%
UNITED KINGDOM ........ 22.23%
DENMARK ............... 1.92%
HONG KONG ............. 13.57%
SINGAPORE ............. 2.08%
FRANCE ................ 6.95%
BELGIUM ............... 1.72%
SWITZERLAND ........... 7.70%
SPAIN ................. 3.08%
JAPAN ................. 14.65%
SWEDEN ................ 1.79%
NETHERLANDS ........... 10.51%
MALAYSIA .............. 1.20%
GERMANY ............... 12.69%
6
<PAGE>
- --------------------------------------------------------------------------------
GAM GLOBAL FUND
- --------------------------------------------------------------------------------
FUND MANAGEMENT
- --------------------------------------------------------------------------------
- --------------
[Photo]
- --------------
JOHN R. HORSEMAN, INVESTMENT DIRECTOR, JOINED GAM INITIALLY AS A MEMBER OF THE
ASIAN TEAM BASED IN HONG KONG. AFTER MOVING TO THE LONDON OFFICE IN 1990 HE IS
NOW RESPONSIBLE FOR A NUMBER OF GAM'S GLOBAL AND INTERNATIONAL FUNDS. PRIOR TO
JOINING GAM IN 1987, HE WORKED FOR BA INVESTMENT MANAGEMENT INTERNATIONAL LTD,
RESPONSIBLE FOR CERTAIN OF THE BANK OF AMERICA'S GLOBAL EQUITY FUNDS. HE
COMMENCED MANAGEMENT OF GAM GLOBAL AND GAM INTERNATIONAL FUNDS ON APRIL 1, 1990.
MR. HORSEMAN ALSO MANAGES THE OFFSHORE FUND GAM UNIVERSAL US$ INC.
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
<TABLE>
<CAPTION>
GAM
Global
Class A (after Average
GAM maximum MSCI 1 Month
Global sales load EAFE Deposit
Class A of 5%) Index Rate
<S> <C> <C> <C> <C>
31st Dec, 96 US$14.35 820.36
- ---------------------------------------------------------------------------------------------
% % % %
- ---------------------------------------------------------------------------------------------
Quarter to Dec, 96 +10.01 +4.51 +4.69 +1.31
- ---------------------------------------------------------------------------------------------
Jan -- Dec, 1996 +12.74 +7.11 +14.00 +5.37
- ---------------------------------------------------------------------------------------------
Average annual total return:-
- ---------------------------------------------------------------------------------------------
1 year to Dec, 1996 +12.74 +7.11 +14.00 +5.37
- ---------------------------------------------------------------------------------------------
5 years to Dec, 1996 +16.57 +15.38 +11.37 +4.52
- ---------------------------------------------------------------------------------------------
10 years to Dec, 1996 +12.34 +11.76 +11.27 +6.18
- ---------------------------------------------------------------------------------------------
Since inception +12.09 +11.55 +11.93 +6.20
- ---------------------------------------------------------------------------------------------
</TABLE>
Performances are calculated on a total return basis. During the year Class
A shares paid a dividend of US$0.87 and Class D US$0.80. Class A inception was
on 28th May, 1986 and Class D inception was on 6th October, 1995. Indications of
past performance are not necessarily indicative of future performance. The
investment return and principal value of an investment will fluctuate so that an
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 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.
- ----------
Sources used are the net asset value of the Fund computed daily and Morgan
Stanley Capital International.
The MSCI World Index is an arithmetical average weighted by market value of the
performance of some 1,400 securities listed on the stock exchanges of Australia,
Austria, Belgium, Canada, Denmark, France, Finland, Germany, Hong Kong, Italy,
Japan, the Netherlands, New Zealand, Norway, Singapore, Malaysia, Spain, Sweden,
Switzerland, the United Kingdom and the United States of America. The combined
market capitalisation of these companies represents approximately 60% of the
aggregate market value of the stock exchanges of the above 21 countries. The
percentage change in the value of the index includes dividends reinvested.
THE FACTS -- CLASS D SHARES
<TABLE>
<CAPTION>
GAM
Global
Class D (after Average
GAM maximum MSCI 1 Month
Global sales load EAFE Deposit
Class D of 3.5%) Index Rate
<S> <C> <C> <C> <C>
31st Dec, 96 US$14.22 820.36
- ---------------------------------------------------------------------------------------------
% % % %
- ---------------------------------------------------------------------------------------------
Quarter to Dec, 96 +10.18 +6.32 +4.69 +1.31
- ---------------------------------------------------------------------------------------------
Jan -- Dec, 1996 +11.54 +7.63 +14.00 +5.37
- ---------------------------------------------------------------------------------------------
Average annual total return:-
- ---------------------------------------------------------------------------------------------
1 year to Dec, 1996 +11.54 +7.63 +14.00 +5.37
- ---------------------------------------------------------------------------------------------
Since inception +15.15 +11.88 +15.85 +5.45
- ---------------------------------------------------------------------------------------------
</TABLE>
[Chart]
8
<PAGE>
- --------------------------------------------------------------------------------
GAM GLOBAL FUND -- REPORT TO SHAREHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN -- CLASS A
[Chart]
ANNUAL PERFORMANCE -- CLASS A
[Chart]
GAM
Global
Class A (after
GAM maximum MSCI
Global sales load EAFE
Class A of 5%) Index
Year % % %
- -------------------------------------------------------
1992 (4.65) (9.42) (4.66)
1993 75.30 66.53 23.13
1994 (16.15) (20.35) 5.58
1995 36.25 29.44 21.32
1996 12.74 7.11 14.00
THE COMMENT
1996 has continued to be a year of progress for investors in GAM Global.
Good appreciation in the Fund's equity positions was partly offset by an
appreciating dollar and sluggish bond markets in Europe where the Fund had an
exposure.
Equities in the United States formed the mainstay of the Fund during the
year and currently represent 46% of the Fund's total assets. Holdings in the
bank sector performed paricularly well as investors continued to take account of
bank merger activity and the possibilities this presents for cost savings and
improved profitability. Otherwise the Fund's positions in selected companies
undergoing some form of restructuring or merger, such as Burlington Northern or
Kimberly Clark, performed well.
In Europe, although these markets have not performed as well as in the
United States, good returns have been possible. Utilities, financials and
selected pharmaceutical stocks have all performed well. However, European
companies have yet to undertake restructuring to improve profitability and
returns to the shareholder in the manner evident in the United States. If this
were to occur, investment returns could surprise even the more optimistic
forecasts. Holdings in European equities were increased in the latter part of
the year, at the same time reducing the Fund's European bond holdings.
Asian markets by comparison overall had an indifferent year, although Hong
Kong was a bright spot. Low valuations, good earnings growth and positive
developments in China suggest this might continue. In the summer, the Fund began
to rebuild its holdings in Hong Kong after a two-and-a-half-year absence. The
Fund's holdings in Japenese electrical stocks were retained throughout 1996.
- ----------
A Plan of Distribution (12b-1 plan), as proposed by your Fund's directors, was
approved by the Class A shareholders of each Series of the Fund in 1996. The
12b-1 plan calls for your Fund to pay the Fund's distributor up to 0.30% of its
average net assets to finance distribution and servicing related activities
engaged in by the distributor and third party financial intermediaries for the
benefit of the Fund and its shareholders.
9
<PAGE>
- --------------------------------------------------------------------------------
GAM GLOBAL FUND -- STATEMENT OF INVESTMENTS
- --------------------------------------------------------------------------------
AS AT 31ST DECEMBER, 1996
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ NET ASSETS
- --------------------------------------------------------------------------------
ADJUSTABLE RATE INDEX NOTES
UNITED KINGDOM
+ DLJ ARIN Indexed to 11,500
shares British Biotech
1997--05--0 502,873 2.47
+ DLJ ARIN Indexed to 110,000
shares General Cable
1997--06--10 119,930 0.59
+ DLJ ARIN Indexed to 100,000
shares TeleWest Communications
1997--04--03 182,365 0.89
+ DLJ ARIN Indexed to 75,000
shares TeleWest Communications
1997--03--25 125,085 0.61
--------- ----
TOTAL ADJUSTABLE RATE INDEX NOTES
(COST $551,354) 930,253 4.56
--------- ----
BONDS
GERMANY
1,713,000 Bundes Deutschland 6.25%
2024--01--04 1,057,100 5.18
--------- ----
1,057,100 5.18
--------- ----
TOTAL BONDS (COST $1,112,681) 1,057,100 5.18
--------- ----
BOND WARRANTS
FRANCE
*122,000 OAT 6% 1997--05--16
84.36 Calls January 1996 95,935 0.47
--------- ----
95,935 0.47
--------- ----
GERMANY
*54,000 Bundes Deutschland 6.25% Wts
May 1997 205,290 1.01
--------- ----
205,290 1.01
--------- ----
NETHERLANDS
*78,300 Nederland 7.5% 2023--01--15
101 Calls July 1996 342,887 1.68
--------- ----
342,887 1.68
--------- ----
TOTAL BOND WARRANTS (COST $300,888) 644,112 3.16
--------- ----
EQUITIES
FRANCE
1,980 Union des Assurances Federales 244,232 1.20
--------- ----
244,232 1.20
--------- ----
HONG KONG
40,000 Cheung Kong (Holdings) 355,550 1.74
69,000 Henderson Land 695,843 3.41
132,300 Hong Kong & China Gas 254,012 1.25
32,041 HSBC Holdings (HKD) 685,602 3.36
214,800 JCG Holdings 209,676 1.03
--------- ----
2,200,683 10.79
--------- ----
JAPAN
18,000 Canon 397,893 1.95
4,000 Rohm 262,499 1.28
4,600 Sony 301,477 1.48
5,000 TDK Corp 325,965 1.60
--------- ----
1,287,834 6.31
--------- ----
NETHERLANDS
6,773 ABN-AMRO Holding 440,393 2.16
18,554 Fortis AMEV 649,360 3.18
--------- ----
1,089,753 5.34
--------- ----
SINGAPORE
35,000 City Developments 315,158 1.55
--------- ----
315,158 1.55
--------- ----
SWEDEN
9,961 OM Gruppen 299,450 1.47
--------- ----
299,450 1.47
--------- ----
SWITZERLAND
*499 Novartis Registered 571,511 2.80
64 Roche Holding Genussscheine 497,990 2.44
*1,492 Swiss Bank Corp Registered 283,686 1.39
--------- ----
1,353,187 6.63
--------- ----
UNITED KINGDOM
33,900 Barclays 581,902 2.85
1,012 Barclays (Restricted) 17,371 0.08
26,800 Hyder 342,497 1.68
28,000 RJB Mining 203,859 1.00
26,633 Thames Water 278,769 1.37
--------- ----
1,424,398 6.98
--------- ----
UNITED STATES
3,300 American International Group 357,225 1.75
7,000 American Stores 286,125 1.40
*5,000 Amgen 271,875 1.33
3,640 BankAmerica 363,090 1.78
3,600 Burlington Northern/Santa Fe 310,950 1.52
*11,400 Champion Enterprises 222,300 1.09
6,668 Chase Manhattan 595,119 2.92
5,610 Columbia/HCA Healthcare 228,608 1.12
3,185 Federal Home Loan Mortgage 350,748 1.72
4,368 First Union 323,232 1.58
10
<PAGE>
- --------------------------------------------------------------------------------
GAM GLOBAL FUND -- STATEMENT OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ NET ASSETS
- --------------------------------------------------------------------------------
UNITED STATES (CONTINUED)
4,150 Gillette 322,663 1.58
3,500 Intel 458,281 2.25
13,000 Intermet 209,625 1.03
8,236 Johnson & Johnson 409,741 2.01
3,640 Kimberly-Clark 346,710 1.70
*9,100 Kroger 423,150 2.07
8,700 MBNA 361,050 1.77
5,505 Medtronic 374,340 1.84
8,560 Merrill Lynch 697,640 3.42
9,739 NationsBank 951,987 4.67
4,095 Philip Morris 461,199 2.26
16,000 Republic Group 250,000 1.23
6,043 Schering-Plough 391,284 1.92
1,365 Wells Fargo 368,209 1.81
---------- ------
9,335,151 45.77
---------- ------
TOTAL EQUITIES (COST $14,488,715) 17,549,846 86.04
---------- ------
EQUITY WARRANTS
SWITZERLAND
*54 Roche Holdings Wts 1998--05--05 1,755 0.01
*195 Swiss Bank Corp
Bearer Wts 2000 539 0.00
---------- ------
TOTAL EQUITY WARRANTS (COST $1,545) 2,294 0.01
---------- ------
TOTAL INVESTMENTS (COST $16,455,183**) 20,183,605 98.95
NET CURRENT ASSETS 214,658 1.05
---------- ------
TOTAL NET ASSETS 20,398,263 100.00
========== ======
* Non-income producing security.
** Cost for federal income tax purposes is $16,457,846.(Note 5)
+ Adjustable rate index notes are inversely indexed to the value of the
underlying security.
See notes to financial statements.
GEOGRAPHIC ANALYSIS
AS AT 31ST DECEMBER, 1996
NET CURRENT ASSESTS 1.05%
SWEDEN 1.47%
SINGAPORE 1.55%
FRANCE 1.67%
JAPAN 6.31%
SWITZERLAND 6.64%
NETHERLANDS 7.02%
HONG KONG 10.79%
GERMANY 5.19%
UNITED KINGDOM 11.54%
UNITED STATES 45.77%
11
<PAGE>
- --------------------------------------------------------------------------------
GAM EUROPE FUND
- --------------------------------------------------------------------------------
FUND MANAGEMENT
- --------------------------------------------------------------------------------
- -----------
[Photo]
- -----------
JOHN BENNETT, INVESTMENT DIRECTOR, IS RESPONSIBLE FOR EUROPEAN MARKETS. PRIOR TO
JOINING GAM IN 1993, HE WAS A SENIOR FUND MANAGER AT IVORY & SIME, RESPONSIBLE
FOR CONTINENTAL EUROPEAN EQUITY PORTFOLIOS. HE COMMENCED MANAGEMENT OF GAM
EUROPE FUND ON JANUARY 1, 1993. MR. BENNETT ALSO MANAGES THE OFFSHORE FUND GAM
PAN EUROPEAN INC. MR. BENNETT IS BASED IN EDINBURGH.
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
<TABLE>
<CAPTION>
GAM
Europe
(after Average
GAM maximum MSCI 1 Month
Europe sales load Europe Deposit
Class A of 5%) Index Rate
<S> <C> <C> <C> <C>
31st Dec, 96 US$11.85 869.13
- ---------------------------------------------------------------------------------------------
% % % %
- ---------------------------------------------------------------------------------------------
Quarter to Dec, 96 +7.60 +2.22 +9.69 +1.31
- ---------------------------------------------------------------------------------------------
Jan -- Dec, 1996 +21.32 +15.25 +21.57 +5.37
- ---------------------------------------------------------------------------------------------
Average annual total return:-
- ---------------------------------------------------------------------------------------------
1 year to Dec, 1996 +21.32 +15.25 +21.57 +5.37
- ---------------------------------------------------------------------------------------------
5 years to Dec, 1996 +9.87 +8.75 +13.62 +4.52
- ---------------------------------------------------------------------------------------------
Since inception +4.21 +3.45 +11.13 +5.32
- ---------------------------------------------------------------------------------------------
</TABLE>
Performances are calculated on a total return basis. During the year, a
dividend was paid of US$0.32. 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.
- ------------
Sources used are the net asset value of the Fund computed daily and Morgan
Stanley Capital International.
The MSCI Europe Index is an arithmetical average weighted by market value of the
performance of some 600 securities listed on the stock exchanges of Austria,
Belgium, Denmark, Finland, France, Germany, Italy, the Netherlands, Norway,
Spain, Sweden, Switzerland and the United Kingdom. The combined market
capitalisation of these companies represents approximately 60% of the aggregate
market value of the stock exchanges of the above 13 countries. The percentage
change in the value of the index includes dividends reinvested.
AVERAGE ANNUAL TOTAL RETURN
[Chart]
ANNUAL PERFORMANCE
[Chart]
GAM
Europe MSCI
GAM (after maximum Europe
Europe sales load of 5%) Index
Year % % %
- -------------------------------------------------------
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 22.13
1996 21.32 15.25 21.57
13
<PAGE>
- --------------------------------------------------------------------------------
GAM EUROPE FUND -- REPORT TO SHAREHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
THE COMMENT
Expectations of falling interest rates and rising asset prices have been
well fulfilled in 1996. That this applies to financial assets to the near
exclusion of real assets is testament to the powerful deflationary forces
sweeping through Europe. As we have indicated in earlier reports our regular
meetings with companies have proven invaluable in highlighting these trends and
their effects on corporate pricing power. Such forces are all too evident in the
growing wave of mergers now being witnessed and the fundamental restructuring of
the way Europe does business. We have sought to benefit from these trends via
our investment strategy throughout the past two years and the Fund's performance
is the result of our commitment to bottom up stock selection.
The following stocks are worthy of mention for their strong contribution to
performance in the year just ended:
The French market was again a major contributor to the Fund's results, more
so due to good stock selection than to the performance of the local index.
Comptoirs Modernes and Guilbert ended the year as the Fund's two largest
investments having been exceptional performers in 1996. The former is one of
France's leading food retailers, now replicating its domestic strategy elsewhere
in Europe. Guilbert too is an example of a franchise capable of exploitation
beyond domestic borders. The company has grown from being France's leading
office materials wholesaler to a major force in Europe. Technip was also a
strong performer as investors assessed the company's earnings prospects and
attractive valuation. This company, based in France, is an international leader
in turnkey process plant construction.
In Germany, two stocks were held continuously throughout 1996, both
rewarded the fund well. Buderus is an engineering concern whose main business is
the production of heating systems. The company enjoys an excellent product
franchise as well as strong management and finances. Veba the diversified
holding company, benefited from continued business rationalisation and cost
reduction.The biggest gain in the Fund's Dutch portfolio was produced by ABN
Amro, the banking group. This company's management continues to prove adept at
building from a strong domestic business.
The Swiss portfolio benefited from the holding in Ciba Geigy which
announced early in the year a merger with neighbouring pharmaceutical group,
Sandoz. The Fund retains a holding in the merged entity, known as Novartis.
Whilst the UK market's performance was more subdued, the returns to the
Fund were boosted by sterling's strength, particularly in the closing months of
1996. Stock selection was mixed, resulting in significant changes to the British
portfolio in anticipation of the year ahead. The strongest performance came from
Burford whose share price rose by 40% as the group continued to grow from its
roots in provincial property development and investment.
Scandinavia was a notable contributor to performance, partly as a result of
the stellar performance of local markets as well as individual stock picks.
The Fund invested in "Emerging Europe" during the year and the holding in
Gedeon Richter, the Hungarian pharmaceutical business proved rewarding.
ASSET ALLOCATION
Our investment philosophy and process means that the fund's geographic
split is the result of stock picking. We see less opportunity in choosing
countries or "markets" than we do in evaluating companies. The geographic result
of the year's efforts was most visible in the Swedish market whose
representation in the fund rose to 8.4% by the end of the year from 1.8% a year
earlier. In neighboring Norway, the Fund's exposure rose from 2.4% to 4.7%.
OUTLOOK
The best part of the interest rate impetus is probably behind us and the
year ahead will demand an even sharper focus on companies' earnings. The Fund
has been well served by its major holdings and we don't anticipate the need to
make significant changes. Where we do expect further opportunity is among the
growing number of European restructuring cases. Just as Europe's deflation
should not be underestimated, neither should the gathering momentum towards
leaner, fitter and more profitable businesses.
- -------------
A Plan of Distribution (12b-1 plan), as proposed by your Fund's directors, was
approved by the Class A shareholders of each Series of the Fund in 1996. The
12b-1 plan calls for your Fund to pay the Fund's distributor up to 0.30% of its
average net assets to finance distribution and servicing related activities
engaged in by the distributor and third party financial intermediaries for the
benefit of the Fund and its shareholders.
14
<PAGE>
- --------------------------------------------------------------------------------
GAM EUROPE FUND -- STATEMENT OF INVESTMENTS
- --------------------------------------------------------------------------------
AS AT 31ST DECEMBER, 1996
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ NET ASSETS
- --------------------------------------------------------------------------------
EQUITIES
BELGIUM
990 Generale de Banque 355,227 1.41
90 Generale de Banque Rts 51 0.00
---------- ------
355,278 1.41
---------- ------
FINLAND
15,140 Kesko 213,738 0.85
---------- ------
213,738 0.85
---------- ------
FRANCE
2,101 Air Liquide 327,996 1.31
15,015 AXA 954,987 3.80
2,080 Comptoirs Modernes 1,122,482 4.47
7,500 Credit Commercial de France 346,921 1.38
5,412 Guilbert 1,058,722 4.21
2,762 IMETAL 407,766 1.62
550 Rexel 166,956 0.66
11,677 SEITA 488,370 1.94
5,565 Technip 522,339 2.08
10,960 Total B 891,418 3.55
7,750 Valeo 477,980 1.90
---------- ------
6,765,937 26.92
---------- ------
GERMANY
11,850 BASF AG 456,504 1.82
970 Buderus 479,075 1.91
15,550 Veba 899,370 3.58
---------- ------
1,834,949 7.31
---------- ------
HUNGARY
4,460 Gedeon Richter 260,649 1.04
---------- ------
260,649 1.04
---------- ------
ITALY
305,345 TIM 771,982 3.07
---------- ------
771,982 3.07
---------- ------
NETHERLANDS
9,679 ABN-AMRO Holding 629,347 2.50
36,300 Elsevier 613,172 2.44
4,663 Eriks Holdings 403,273 1.60
16,625 Heijmans Group 254,859 1.01
4,790 Royal Dutch Petroleum Bearer 839,320 3.34
39,560 Telegraaf Holding 833,011 3.32
---------- ------
3,572,982 14.21
---------- ------
NORWAY
12,855 Kverneland Gruppen 355,331 1.41
7,095 Orkla A 498,090 1.98
10,800 Sparebanken 338,388 1.35
---------- ------
1,191,809 4.74
---------- ------
PORTUGAL
*+8,297 Sotancro -- 0.00
---------- ------
-- 0.00
---------- ------
SPAIN
4,200 Banco Popular Registered 825,570 3.29
---------- ------
825,570 3.29
---------- ------
SWEDEN
24,900 Atlas Copco 602,491 2.40
17,125 Kalmar Industries 285,032 1.13
28,175 Sandvik A 760,237 3.03
16,300 Svenska Handlesbank 468,501 1.86
---------- ------
2,116,261 8.42
---------- ------
SWITZERLAND
800 Affichage Genussscheine 342,473 1.36
*672 Novartis AG Registered 769,650 3.06
110 Roche Holding Genussscheine 855,921 3.41
---------- ------
1,968,044 7.83
---------- ------
UNITED KINGDOM
26,710 BTR 130,407 0.52
27,550 Daily Mail & General Trust A 621,570 2.47
21,000 Glaxo Wellcome 341,763 1.36
52,580 Hozelock Group 408,940 1.63
241,750 Metalrax Group 426,566 1.70
183,751 Burford Holdings 459,584 1.83
165,320 NFC 523,938 2.09
*139,250 Somerfield 393,606 1.57
300,000 United Industries 241,547 0.96
20,235 Wolseley 160,844 0.64
91,735 Wyevale Garden Centres 361,448 1.44
28,720 Zeneca 809,344 3.22
---------- ------
4,879,557 19.43
---------- ------
TOTAL EQUITIES (COST $20,653,072) 24,756,756 98.52
---------- ------
Equity Warrants
SWITZERLAND
*130 Roche Holding Wts 1998--05--05 4,225 0.02
---------- ------
TOTAL EQUITY WARRANTS (COST $2,181) 4,225 0.02
---------- ------
15
<PAGE>
- --------------------------------------------------------------------------------
GAM EUROPE FUND -- STATEMENT OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ NET ASSETS
- --------------------------------------------------------------------------------
PREFERRED SHARES
GERMANY
5,500 Henkel Pfd 276,287 1.10
765 STO Pfd Bearer 360,427 1.43
---------- ------
TOTAL PREFERRED SHARES (COST $628,967) 636,714 2.53
---------- ------
TOTAL INVESTMENTS (COST $21,284,220**) 25,397,695 101.07
NET CURRENT LIABILITIES (270,290) (1.07)
---------- ------
TOTAL NET ASSETS 25,127,405 100.00
========== ======
* Non-income producing security.
** Cost for federal income tax purposes is $21,288,756. (Note 5)
+ Fair value determined by the Board of Directors.
See notes to financial statements.
GEOGRAPHIC ANALYSIS
AS AT 31ST DECEMBER, 1996
[The following table represents a chart in the printed piece.]
NET CURRENT LIABILITIES (1.07%)
FRANCE 26.92%
OTHER AREAS 3.30%
NORWAY 4.74%
SWEDEN 8.42%
SPAIN 3.29%
NETHERLANDS 14.21%
ITALY 3.07%
SWITZERLAND 7.85%
GERMANY 9.84%
UNITED KINGDOM 19.43%
16
<PAGE>
- --------------------------------------------------------------------------------
GAM PACIFIC BASIN FUND
- --------------------------------------------------------------------------------
FUND MANAGEMENT
- --------------------------------------------------------------------------------
- ----------
[Photo]
- ----------
MICHAEL S. BUNKER, INVESTMENT DIRECTOR, HAS OVERALL RESPONSIBILITY FOR ASIAN
INVESTMENT POLICY. PRIOR TO JOINING GAM IN 1985, HE WORKED FOR J. ROTHSCHILD
CHARTERHOUSE MANAGEMENT LTD. IN HONG KONG. HE HAS OVER 20 YEARS' INVESTMENT
EXPERIENCE, PRIMARILY IN ASIAN MARKETS. HE COMMENCED MANAGEMENT OF GAM PACIFIC
BASIN FUND ON MAY 6, 1987. MR. BUNKER ALSO MANAGES THE OFFSHORE FUND GAM PACIFIC
INC. MR. BUNKER IS NOW BASED IN LONDON, HAVING LIVED IN HONG KONG FOR 3 YEARS.
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
<TABLE>
<CAPTION>
GAM
Pacific Basin
Class A (after Average
GAM maximum MSCI 1 Month
Pacific Basin sales load Pacific Deposit
Class A of 5%) Index Rate
<S> <C> <C> <C> <C>
31st Dec, 96 US$15.26 2,138.88
- ---------------------------------------------------------------------------------------------
% % % %
- ---------------------------------------------------------------------------------------------
Quarter to Dec, 96 -1.56 -6.48 -7.10 +1.31
- ---------------------------------------------------------------------------------------------
Jan -- Dec, 1996 -0.39 -5.31 -8.40 +5.37
- ---------------------------------------------------------------------------------------------
Average annual total return:-
- ---------------------------------------------------------------------------------------------
1 year to Dec, 1996 -0.39 -5.31 -8.40 +5.37
- ---------------------------------------------------------------------------------------------
5 years to Dec, 1996 +11.05 +9.92 +3.47 +4.52
- ---------------------------------------------------------------------------------------------
Since inception +10.56 +9.98 +0.86 +6.17
- ---------------------------------------------------------------------------------------------
</TABLE>
Performances are calculated on a total return basis. During the year, Class
A shares paid a dividend of US$1.64 and Class D US$1.55. Class A inception was
on 6th May, 1987 and Class D on 18th October, 1995. Indications of past
performance are not necessarily indicative of future performance. The investment
return and principal value of an investment will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
17
<PAGE>
- --------------------------------------------------------------------------------
GAM PACIFIC BASIN FUND -- REPORT TO SHAREHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
[Chart]
NOTE: The graphs compare the performance results of a hypothetical $10,000
investment in either Class and a comparable index. The performance of Class A
and Class D are 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.
- ----------
Sources used are the net asset value of the Fund computed daily and Morgan
Stanley Capital International.
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 capitalisation of these companies represents approximately 60% of the
aggregate market value of the stock exchanges of the above five countries. The
percentage change in the value of the index includes dividends reinvested.
THE FACTS -- CLASS D SHARES
<TABLE>
<CAPTION>
GAM
Pacific Basin
Class D (after Average
GAM maximum MSCI 1 Month
Pacific Basin sales load Pacific Deposit
Class D of 3.5%) Index Rate
<S> <C> <C> <C> <C>
31st Dec, 96 US$15.20 2,138.88
- ---------------------------------------------------------------------------------------------
% % % %
- ---------------------------------------------------------------------------------------------
Quarter to Dec, 96 -1.90 -5.34 -7.10 +1.31
- ---------------------------------------------------------------------------------------------
Jan -- Dec, 1996 -1.19 -4.65 -8.40 +5.37
- ---------------------------------------------------------------------------------------------
Average annual total return:-
- ---------------------------------------------------------------------------------------------
Since inception +0.83 -2.11 -0.93 +5.44
- ---------------------------------------------------------------------------------------------
</TABLE>
[Chart]
18
<PAGE>
- --------------------------------------------------------------------------------
GAM PACIFIC BASIN FUND -- REPORT TO SHAREHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN - CLASS A
[Chart]
ANNUAL PERFORMANCE - CLASS A
[Chart]
GAM
Pacific Basin
Class A (after
GAM maximum MSCI
Pacific Basin sales load Pacific
Class A of 5%) Index
Year % % %
- -------------------------------------------------------
1992 (0.37) (5.35) (18.20)
1993 51.51 43.93 35.97
1994 7.41 2.04 13.03
1995 4.56 (0.72) 2.99
1996 (0.39) (5.31) (8.40)
THE COMMENT
In the first quarter of 1996, investors were confident that Japanese
equities would continue their strong upward trend against the background of a
sustainable recovery in the domestic economy. A combination of supplemental
budgets, very low interest rates and a steadily weakening currency should have
provided sufficient stimulus to improve both business and consumer confidence
and underpin the upturn in economic prospects. This has not been the case,
indicating that the structural problems to be addressed in sectors such as
banking and heavy industry are more deeply rooted than originally anticipated.
The Japanese stock market has increasingly focused on a narrow range of
companies such as motors and electricals and until a broader recovery in
earnings becomes evident, this trend is likely to continue. The yen is also
expected to drift downwards against the US dollar while interest rates are held
at an historically low level.
Shares in other Asian countries experienced sharply contrasting fortunes in
1996, with Korea and Thailand falling due to deteriorating domestic economic
conditions and weakness in their trade accounts. Hong Kong investors have at
times been nervous about the prospect of higher US interest rates, but the
overall trend has seen equities rising to record levels on the Hang Seng index.
This improvement is a direct result of growing confidence and anticipation that
the hand-over of the colony to China in six months time will be a smooth
transition which will enhance, rather than damage, local prosperity.
- ---------
A Plan of Distribution (12b-1 plan), as proposed by your Fund's directors, was
approved by the Class A shareholders of each Series of the Fund in 1996. The
12b-1 plan calls for your Fund to pay the Fund's distributor up to 0.30% of its
average net assets to finance distribution and servicing related activities
engaged in by the distributor and third party financial intermediaries for the
benefit of the Fund and its shareholders.
19
<PAGE>
- --------------------------------------------------------------------------------
GAM PACIFIC BASIN FUND -- STATEMENT OF INVESTMENTS
- --------------------------------------------------------------------------------
AS AT 31ST DECEMBER, 1996
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ NET ASSETS
- --------------------------------------------------------------------------------
EQUITIES
AUSTRALIA
81,500 Broken Hill Proprietary 1,160,863 2.24
93,475 CRA 1,467,397 2.84
583,000 MIM Holdings 815,522 1.58
358,000 Novus Petroleum 819,522 1.59
110,875 WMC 698,863 1.35
---------- ------
4,962,225 9.60
---------- ------
HONG KONG
669,000 Amoy Properties 964,426 1.87
152,000 Cheung Kong (Holdings) 1,351,089 2.61
832,000 Hong Kong & China Gas 1,597,414 3.09
870,200 Hong Kong Telecommunications 1,395,110 2.70
68,400 HSBC Holdings (HKD) 1,463,598 2.83
*446000 Kerry Properties 1,222,471 2.36
156,000 Sun Hung Kai Properties 1,911,048 3.70
211,000 Swire Pacific A 2,018,747 3.91
357,352 Wharf (Holdings) 1,783,410 3.45
---------- ------
13,707,313 26.52
---------- ------
INDONESIA
566,400 Bank Bali (FR) 1,414,801 2.74
854,000 Hero Supermarket (FR) 632,727 1.22
770,000 Mayorah Indah (FR) 358,594 0.69
232,000 Modern Photo Film (FR) 736,664 1.43
314,000 Mustika Ratu (FR) 425,402 0.82
---------- ------
3,568,188 6.90
---------- ------
JAPAN
73,000 Canon 1,613,678 3.12
18,700 Canon Sales 416,596 0.81
164 DDI 1,084,742 2.10
11,000 Japan Associated Finance 869,096 1.68
64,000 Joshin Denki 663,155 1.28
41,000 Matsushita Electric Industrial 669,113 1.29
82,000 Mitsubishi Estate 842,587 1.63
16,000 Murata Manufacturing 531,906 1.03
116,000 Nagoya Railroad 445,730 0.86
40,200 ORIX 1,673,120 3.24
20,000 Secom 1,210,604 2.34
75,000 Sekisui Chemical 757,707 1.47
16,300 Sony 1,068,276 2.07
100,000 Sumitomo Marine & Fire Insurance 621,708 1.20
68,000 Suzuki Motor 622,399 1.20
8,000 Tachihi Enterprise 241,775 0.47
25,000 Tokyo Electron 766,341 1.48
19,900 Xebio 592,824 1.15
---------- ------
14,691,357 28.42
---------- ------
14,691,357 28.42
---------- ------
KOREA
58,000 Hyundai Motor GDR 432,100 0.84
14,524 LG Electronics 183,913 0.36
320 Samsung Electronics GDS
(Voting) New 10,440 0.02
11,245 Samsung Electronics GDS
(Non Voting) New 174,298 0.34
46,315 Samsung Electronics GDS
(Non Voting) 856,828 1.66
1,068 Samsung Electronics Representing
(Voting) New 43,388 0.08
46,508 Shinhan Bank 740,550 1.43
---------- ------
2,441,517 4.73
---------- ------
MALAYSIA
140,500 Genting 968,006 1.87
103,000 Hume Industries (Malaysia) 648,466 1.26
---------- ------
1,616,472 3.13
---------- ------
NEW ZEALAND
316,098 Carter Holt Harvey 717,324 1.39
---------- ------
717,324 1.39
---------- ------
PHILIPPINES
546,000 Ayala Land B 622,814 1.20
185,400 Bank of Philippine Islands 1,120,859 2.17
16,800 Philippine Long Distance
Telephone 923,042 1.79
---------- ------
2,666,715 5.16
---------- ------
SINGAPORE
106,750 Development Bank of Singapore
Singapore (FR) 1,441,846 2.79
777,000 Kim Eng Holdings 710,755 1.37
147,432 Overseas Chinese Banking Corp
(FR) 1,833,286 3.55
20,000 Wing Tai Holdings 57,171 0.11
---------- ------
4,043,058 7.82
---------- ------
THAILAND
400,000 Krung Thai Bank (FR) 772,050 1.49
181,750 Post Publishing (FR) 389,778 0.75
91,000 Siam Commerical Bank (FR) 659,986 1.28
116,610 Thai Farmers Bank (FR) 727,505 1.41
220,700 Thai Glass Industries (FR) 757,295 1.47
247,400 Thai Military Bank (FR) 487,160 0.94
3,793,774 7.34
---------- ------
TOTAL EQUITIES (COST $55,152,964) 52,207,943 101.01
---------- ------
20
<PAGE>
- --------------------------------------------------------------------------------
GAM PACIFIC BASIN FUND -- STATEMENT OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ NET ASSETS
- --------------------------------------------------------------------------------
EQUITY WARRANTS
INDONESIA
*2,800 Bank Bali (FR) Wts 200 1,423 0.00
---------- ------
1,423 0.00
---------- ------
JAPAN
*710 Canon Sales Wts 1999-11-22 96,011 0.19
*210 Kyocera Wts 1998 144,375 0.28
*190 Seino Transportation Wts 4,750 0.01
*490 Tobu Railway Wts 1998 18,375 0.04
---------- ------
263,511 0.52
---------- ------
SINGAPORE
80,000 Keppel Wts 1997 275,566 0.53
---------- ------
275,566 0.53
---------- ------
THAILAND
*17,763 Thai Farmers Bank Wts 2002
(FR) 16,796 0.03
---------- ------
16,796 0.03
---------- ------
TOTAL EQUITY WARRANTS (COST $1,123,852) 557,296 1.08
---------- ------
TOTAL INVESTMENTS (COST $56,276,816**) 52,765,239 102.09
NET CURRENT LIABILITIES (1,079,426) (2.09)
---------- ------
TOTAL NET ASSETS 51,685,813 100.00
========== ======
* Non-income producing security.
** Cost for federal income tax purposes is $56,465,787. (Note 5)
Glossary of Terms:
GDR - Global Depository Receipt
GDS - Global Depository Shares
FR - Foreign REgistered
See notes to financial statements.
GEOGRAPHICAL ANALYSIS
AS AT 31ST DECEMBER, 1996
NET CURRENT LIABILITIES (2.09)%
JAPAN 28.94%
PHILIPPINES 5.16%
MALAYSIA 3.13%
NEW ZEALAND 1.39%
KOREA 4.73%
INDONESIA 6.90%
SINGAPORE 8.35%
THAILAND 7.37%
AUSTRALIA 9.60%
HONG KONG 26.52%
21
<PAGE>
- --------------------------------------------------------------------------------
GAM JAPAN CAPITAL FUND
- --------------------------------------------------------------------------------
FUND MANAGEMENT
- --------------------------------------------------------------------------------
- --------
[Photo]
- --------
PAUL S. KIRKBY, INVESTMENT DIRECTOR, IS RESPONSIBLE FOR INVESTMENT IN THE
JAPANESE MARKET. PRIOR TO JOINING GAM IN 1985, AS A SENIOR FUND MANAGER IN HONG
KONG, HE WAS AN INVESTMENT ANALYST WITH NEW JAPAN SECURITIES CO. LTD IN TOKYO.
HE COMMENCED MANAGEMENT OF GAM JAPAN CAPITAL FUND ON JULY 1, 1994. MR KIRKBY
ALSO MANAGES THE OFFSHORE FUND GAM JAPAN INC. 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
<TABLE>
<CAPTION>
GAM Japan
Capital
(after Average
maximum Tokyo 1 Month
GAM Japan sales load S.E. Deposit
Capital of 5%) Index Rate
<S> <C> <C> <C> <C>
31st Dec, 96 US$9.39 1,470.94
- ---------------------------------------------------------------------------------------------
% % % %
- ---------------------------------------------------------------------------------------------
Quarter to Dec, 96 -4.35 -9.13 -13.11 +1.31
- ---------------------------------------------------------------------------------------------
Jan -- Dec, 1996 +0.15 -4.85 -16.55 +5.37
- ---------------------------------------------------------------------------------------------
Average annual total return:-
- ---------------------------------------------------------------------------------------------
1 year to Dec, 1996 +0.15 -4.85 -16.55 +5.37
- ---------------------------------------------------------------------------------------------
Since inception +0.98 -1.06 -10.06 +5.55
- ---------------------------------------------------------------------------------------------
</TABLE>
Performances are calculated on a total return basis. During the year, a
dividend was paid of US$0.79. The Fund's inception was on 1st July, 1994.
Indications of past performance are not necessarily indicative of the 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.
22
<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.
- ----------
Sources used are net asset value of the Fund computed daily and Datastream.
The Tokyo Stock Exchange Index (TOPIX) is a capitalisation-weighted composite
index of approximately 1,200 companies listed on the First Section of the Tokyo
Stock Exchange. The combined market capitalisation of these companies represents
approximately 95% of the aggregate market value of the First and Second Section.
The percentage change in the value of the index is calculated on a total return
basis with dividends reinvested.
THE COMMENT
During 1996 the economy continued its modest recovery helped by record low
interest rates, the weakness of the yen and deficit spending by the government.
Company profits put in their third year of recovery. Despite all this good news,
however, the stock market failed to make significant progress. Reasons given for
the dull market response include concerns about the sustainability of the
economic recovery and increased stock supply. Though these are valid concerns
the uncompelling level of valuations remains the primary restraining factor
preventing sharp advances by the indices. Although the outcome for the stock
market this year has not come as a complete surprise, some of the Fund's stock
picks have nevertheless been somewhat disappointing. Excellent performances from
holdings in technology exporters and selected retailers have been offset by
weakness in small stocks and insurance companies.
Looking forward to next year, conditions will remain subdued, however the
broadening of the economic recovery should provide a wider range of
opportunities for investment. Excessive pessimism at this late stage is
unwarranted. We expect continued performance from the technology area together
with a recovery from smaller stocks and financial issues. The yen is likely to
remain under pressure, although weakness from here is unlikely to match that
seen over the last 18 months. Expecting some pause in the yen's descent, the
proportion of the Fund's exposure to dollars has been reduced, a position which
may be subject to further review.
- ----------
A Plan of Distribution (12b-1 plan), as proposed by your Fund's directors, was
approved by the Class A shareholders of each Series of the Fund in 1996. The
12b-1 plan calls for your Fund to pay the Fund's distributor up to 0.30% of its
average net assets to finance distribution and servicing related activities
engaged in by the distributor and third party financial intermediaries for the
benefit of the Fund and its shareholders.
23
<PAGE>
- --------------------------------------------------------------------------------
GAM JAPAN CAPITAL FUND -- STATEMENT OF INVESTMENTS
- --------------------------------------------------------------------------------
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ NET ASSETS
- --------------------------------------------------------------------------------
EQUITIES
APPLIANCES & HOUSEHOLD DURABLES
19,500 Rinnai 392,324 1.07
25,000 Sony 1,638,460 4.49
---------- ------
2,030,784 5.56
---------- ------
AUTOMOBILES
*138,000 Mazda Motor 493,325 1.35
31,000 Suzuki Motor 283,741 0.78
---------- ------
777,066 2.13
---------- ------
BANKING
38,000 Bank of Kyoto 180,796 0.49
55,000 Long Term Credit Bank of Japan 297,772 0.81
20,000 Tochigi Bank 184,785 0.51
---------- ------
663,353 1.81
---------- ------
BROADCASTING & PUBLISHING
9,000 Broadcasting System Niigata 116,570 0.32
---------- ------
116,570 0.32
---------- ------
BUILDING MATERIALS & COMPONENTS
20,300 Almetax Manufacturing 164,770 0.45
---------- ------
164,770 0.45
---------- ------
BUSINESS & PUBLIC SERVICES
400 NIC 5,595 0.02
40 Nihon Jumbo 1,395 0.00
20,000 Secom 1,210,604 3.32
21,060 Wesco 263,682 0.72
---------- ------
1,481,276 4.06
---------- ------
CHEMICALS
61,000 Shin-Etsu Chemical 1,111,389 3.04
---------- ------
1,111,389 3.04
---------- ------
CONSTRUCTION & HOUSING
19,000 Ataka Construction & Engineering 120,585 0.33
14,600 Daito Trust Construction Co. 162,628 0.44
---------- ------
283,213 0.77
---------- ------
DATA PROCESSING &REPRODUCTION
80,000 Canon 1,768,414 4.85
---------- ------
1,768,414 4.85
---------- ------
ELECTRICAL & ELECTRONICS
5,500 IO Data Device 149,599 0.41
16,000 NEC 193,420 0.53
6,600 NIDEC 225,110 0.62
44,600 Nippon Denwa Shisetsu 412,072 1.13
10,800 Satori Electric 372,092 1.02
7,200 Shinko Electric Industries 234,384 0.64
---------- ------
1,586,677 4.35
---------- ------
ELECTRONIC COMP. & INSTRUMENTS
19,000 Mitsumi Electric 357,655 0.98
16,000 Murata Manufacturing 531,906 1.46
33,000 Omron Corp. 621,190 1.70
11,000 Rohm 721,872 1.98
25,000 Tokyo Electron 766,341 2.10
---------- ------
2,998,964 8.22
---------- ------
FINANCIAL SERVICES
14,000 Japan Associated Finance 1,106,122 3.03
12,100 Nichiei (8577) 893,317 2.45
45,100 ORIX 1,877,057 5.14
5,100 Shohkoh Fund 1,109,749 3.04
---------- ------
4,986,245 13.66
---------- ------
HEALTH & PERSONAL CARE
11,000 Banyu Pharmaceutical 153,873 0.42
53,750 Eisai 1,058,199 2.90
220 Santen Pharmaceutical 4,559 0.01
11,000 Sawai Pharmaceutical 131,077 0.36
10,000 Taisho Pharmaceutical 235,731 0.64
14,700 Towa Pharmaceutical 203,091 0.56
---------- ------
1,786,530 4.89
---------- ------
INDUSTRIAL COMPONENTS
11,000 Okamura 72,757 0.20
---------- ------
72,757 0.20
---------- ------
INSURANCE
120,000 Dai-Tokyo Fire & Marine
Insurance 637,251 1.75
168,000 Sumitomo Marine & Fire
Insurance 1,044,469 2.86
---------- ------
1,681,720 4.61
---------- ------
LEISURE & TOURISM
17,000 Royal 388,999 1.07
27,000 Shochiku 233,140 0.64
---------- ------
622,139 1.71
---------- ------
MACHINERY & ENGINEERING
18,000 Amada Metrecs 164,753 0.45
1,100 Japan Engineering Consultants 11,303 0.03
121,000 Mitsubishi Heavy Industries 961,230 2.63
10,000 Sansei Yusoki 110,526 0.30
21,000 Takuma 230,291 0.63
4,000 Tsubaki Nakashima 33,710 0.10
---------- ------
1,511,813 4.14
---------- ------
24
<PAGE>
- --------------------------------------------------------------------------------
GAM JAPAN CAPITAL FUND -- STATEMENT OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ NET ASSETS
- --------------------------------------------------------------------------------
MERCHANDISING
27,300 Amway Japan 876,919 2.40
15,200 Aoyama Trading 404,248 1.11
27,600 Circle K Japan 1,191,607 3.26
9,000 Daimon 144,547 0.39
400 Ishiguro Homa 7,253 0.02
27,000 Joshin Denki 279,769 0.77
40,000 Juel Verite Ohkubo 270,098 0.74
18,000 Jusco 610,828 1.67
21,000 Marui 378,983 1.04
19,900 Matsumotokiyoshi 652,966 1.79
7,100 Paris Miki 256,265 0.70
16,000 Shimachu 410,327 1.12
15,900 Xebio 473,664 1.30
4,600 York-Benimaru 128,296 0.35
---------- ------
6,085,770 16.66
---------- ------
REAL ESTATE
15,000 Daiwa Kosho Lease 115,275 0.32
2,000 Tachihi Enterprises 60,444 0.17
32,000 TOC 284,604 0.78
---------- ------
460,323 1.27
---------- ------
RECREATION, OTHER CONSUMER GOODS
35,000 Fuji Photo Film 1,154,477 3.16
---------- ------
1,154,477 3.16
---------- ------
TELECOMMUNICATIONS
138 DDI Corp. 912,771 2.50
---------- ------
912,771 2.50
---------- ------
TRANSPORTATION-- ROAD & RAIL
190 West Japan Railway Co. 615,232 1.69
---------- ------
615,232 1.69
---------- ------
UTILITIES -- ELECTRIC & GAS
5,330 Okinawa Electric Power 135,770 0.37
---------- ------
135,770 0.37
---------- ------
WHOLESALE & INTERNATIONAL TRADE
19,200 Nakayamafuku 157,499 0.43
---------- ------
157,499 0.43
---------- ------
TOTAL EQUITIES (COST $36,613,447) 33,165,522 90.85
---------- ------
EQUITY WARRANTS
ELECTRONIC COMP. & INSTRUMENTS
*200 Kyocera Wts 1998 137,500 0.38
*40 Yamatake Honeywell Wts 1997 90,500 0.25
---------- ------
228,000 0.63
---------- ------
MACHINERY & ENGINEERING
*35 Toyo Engineering Wts 1997 875 0.00
---------- ------
875 0.00
---------- ------
RECREATION, OTHER CONSUMER GOODS
*150 Canon Sales Wts 1997--11--11 14,456 0.04
*190 Canon Sales Wts 1999--11--22 25,693 0.07
---------- ------
40,149 0.11
---------- ------
TRANSPORTATION -- ROAD & RAIL
*30 Seino Transporation Wts 1997 750 0.00
*170 Tobu Railway Wts 1998 6,375 0.02
---------- ------
7,125 0.02
---------- ------
TOTAL EQUITY WARRANTS (COST $513,800) 276,149 0.76
---------- ------
PREFERRED SHARES
FINANCIAL SERVICES
30,000,000 Y Sakura Finance Bermuda
0.75% CV Pfd 2001 266,169 0.73
---------- ------
266,169 0.73
---------- ------
BANKING
240,000 Fuji International Finance Pfd
Registered 2002--02--01 210,863 0.58
---------- ------
210,863 0.58
---------- ------
TOTAL PREFERRED SHARES (COST $484,681) 477,032 1.31
---------- ------
TOTAL INVESTMENTS (COST $37,611,928**) 33,918,703 92.92
NET CURRENT ASSETS 2,598,150 7.08
---------- ------
TOTAL NET ASSETS 36,516,853 100.00
========== ======
* Non-income producing security.
** Cost for federal income tax purposes is $37,994,209. (Note 5)
See notes to the financial statements.
25
<PAGE>
- --------------------------------------------------------------------------------
GAM NORTH AMERICA FUND
- --------------------------------------------------------------------------------
FUND MANAGEMENT
- --------------------------------------------------------------------------------
- ---------
[Photo]
- ---------
FAYEZ SAROFIM FOUNDED FAYEZ SAROFIM & CO IN 1958 AND IS THE PRESIDENT AND
CHAIRMAN OF THE BOARD. HE IS ALSO A DIRECTOR OF TELEDYNE INC., ARGONAUT GROUP,
UNITRIN, INC., MESA INS., IMPERIAL HOLLY CORP. AND EXOR GROUP. FROM 1951 TO 1958
MR. SAROFIM WORKED FOR ANDERSON CLAYTON & CO., WHERE HIS LAST ASSIGNMENT WAS AS
ASSISTANT TO THE PRESIDENT. HE COMMENCED MANAGEMENT OF GAM NORTH AMERICA FUND ON
JUNE 29, 1990. MR. SAROFIM ALSO MANAGES THE OFFSHORE FUND GAM US INC.
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
<TABLE>
<CAPTION>
GAM
North America
(after Average
maximum S&P 1 Month
GAM sales load Comp Deposit
North America of 5%) Index Rate
<S> <C> <C> <C> <C>
31st Dec, 96 US$13.56 740.74
- ---------------------------------------------------------------------------------------------
% % % %
- ---------------------------------------------------------------------------------------------
Quarter to Dec, 96 +7.75 +2.36 +8.34 +1.31
- ---------------------------------------------------------------------------------------------
Jan -- Dec, 1996 +24.10 +17.89 +22.95 +5.37
- ---------------------------------------------------------------------------------------------
Average annual total return:-
- ---------------------------------------------------------------------------------------------
1 year to Dec, 1996 +24.10 +17.89 +22.95 +5.37
- ---------------------------------------------------------------------------------------------
5 years to Dec, 1996 +10.86 +9.73 +15.20 +4.52
- ---------------------------------------------------------------------------------------------
Since inception +12.18 +11.37 +14.41 +5.32
- ---------------------------------------------------------------------------------------------
</TABLE>
Performances are calculated on a total return basis. During the year, a
dividend was paid of US$1.25. 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.
26
<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.
- ----------
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.
AVERAGE ANNUAL TOTAL RETURN
[Chart]
ANNUAL PERFORMANCE
[CHART]
GAM STANDARD &
NORTH AMERICA POOR'S
GAM (AFTER MAXIMUM COMPOSITE
NORTH AMERICA SALES LOAD OF 5%) INDEX
YEAR % % %
- -------------------------------------------------------
1992 2.42 (2.70) 7.63
1993 (2.09) (6.98) 10.08
1994 2.97 (2.18) 1.27
1995 30.90 24.35 37.60
1996 24.10 17.89 22.95
27
<PAGE>
- --------------------------------------------------------------------------------
GAM NORTH AMERICA FUND -- STATEMENT OF INVESTMENTS
- --------------------------------------------------------------------------------
THE COMMENT
The US economy has expanded over a period of 69 months in the current
economic cycle. We believe the expansion has become more balanced than was the
case in the first half of 1996 when GDP growth exceeded a sustainable,
non-inflationary pattern. Overall, we expect the economy to remain relatively
healthy, with average annual GDP of about 1.5--2.0% in the first half of 1997
and a somewhat stronger rate of growth later in the year, as lower interest
rates contribute to a pick-up in demand and inventories are rebuilt. We believe
the yield curve will continue to flatten, with short-term rates declining
slightly from current levels and the rate on the 30-year bond breaking below
6.0% early in 1997. We believe annual inflation, as measured by the GDP price
deflator, will increase at an annual rate of 2.2% in 1997. Export growth should
pick up from current levels as our trading partners' economies improve.
The consumer sector, which has been fueling growth, is reliquifying balance
sheets from historically high debt levels and bank lending has become more
selective. A sharp credit contraction reflects this trend, which is weakening
demand. Relatedly, demographic trends support a continued rise in the US savings
rate. Involuntary inventory accumulation also suggests weaker production and
declining employment growth in the first half of 1997. Corporate profits will
continue, but with some deceleration. In our view, earnings growth will be
increasingly selective. We continue to focus investment strategy on large
capitalisation, high quality multinationals with projected above-average
earnings growth.
Individual stock selection and strategic emphasis has positively impacted
our firm's performance in 1996. As corporate profits become more selective and
consistent earnings growth is at a premium, we expect that equity markets will
reflect this selectivity, and investors will increasingly understand that they
should look at a market of stocks, rather than the stock market in general. We
expect the two-tier profile of the market will persist, and that lower quality,
smaller capitalization and the more illiquid issues will underperform the higher
quality, more visible companies. Equities should continue to outperform fixed
income securities, cash and cash equivalents, and the holdings in our universe
are expected to provide a total return in the range of 12--13%.
- ----------
A Plan of Distribution (12b-1 plan), as proposed by your Fund's directors, was
approved by the Class A shareholders of each Series of the Fund in 1996. The
12b-1 plan calls for your Fund to pay the Fund's distributor up to 0.30% of its
average net assets to finance distribution and servicing related activities
engaged in by the distributor and third party financial intermediaries for the
benefit of the Fund and its shareholders.
AS AT 31ST DECEMBER, 1996
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ NET ASSETS
- --------------------------------------------------------------------------------
EQUITIES
AEROSPACE/MILITARY TECHNOLOGY
54 Boeing 5,744 0.10
--------- ------
5,744 0.10
--------- ------
AUTOMOBILES
2,300 Chrysler 75,900 1.30
3,218 Ford Motor 102,574 1.75
--------- ------
178,474 3.05
--------- ------
BANKING
2,200 Chase Manhattan 196,350 3.35
2,200 Citicorp 226,600 3.87
--------- ------
422,950 7.22
--------- ------
BEVERAGES & TOBACCO
8,400 Coca-Cola 442,050 7.55
5,800 PepsiCo 169,650 2.90
2,800 Philip Morris 315,350 5.39
--------- ------
927,050 15.84
--------- ------
BROADCASTING & PUBLISHING
1,500 McGraw-Hill 69,187 1.18
--------- ------
69,187 1.18
--------- ------
CHEMICALS
800 Dow Chemical 62,700 1.07
1,400 DuPont de Nemours 132,125 2.26
1,700 International Flavors & Fragrances 76,500 1.31
--------- ------
271,325 4.64
--------- ------
DATA PROCESSING & REPRODUCTION
*1,200 Compaq Computer 89,100 1.52
--------- ------
89,100 1.52
--------- ------
ELECTRICAL & ELECTRONICS
600 Emerson Electric 58,050 0.99
2,800 General Electric (USA) 276,850 4.73
--------- ------
334,900 5.72
--------- ------
ELECTRONIC COMP. & INSTRUMENTS
*1,950 Intel 255,328 4.36
900 Motorola 55,238 0.94
--------- ------
310,566 5.30
--------- ------
ENERGY SOURCES
2,200 Chevron 143,000 2.44
1,500 Exxon 147,000 2.51
1,000 Mobil 122,250 2.09
--------- ------
412,250 7.04
--------- ------
28
<PAGE>
- --------------------------------------------------------------------------------
GAM NORTH AMERICA FUND -- STATEMENT OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ NET ASSETS
- --------------------------------------------------------------------------------
FINANCIAL SERVICES
2,800 Federal National Mortgage 104,300 1.78
--------- ------
104,300 1.78
--------- ------
FOOD & HOUSEHOLD PRODUCTS
1,100 Kellogg 72,187 1.23
1,900 Procter & Gamble 204,250 3.49
--------- ------
276,437 4.72
--------- ------
HEALTH & PERSONAL CARE
2,500 Abbott Laboratories 126,875 2.17
2,200 American Home Products 128,975 2.20
900 Estee Lauder A 45,787 0.78
2,900 Gillette 225,475 3.85
4,200 Johnson & Johnson 208,950 3.57
3,300 Merck 261,525 4.47
2,400 Pfizer 198,900 3.40
--------- ------
1,196,487 20.44
--------- ------
INDUSTRIAL COMPONENTS
1,300 Rockwell International 79,138 1.35
--------- ------
79,138 1.35
--------- ------
INSURANCE
2,300 American General 94,012 1.61
--------- ------
94,012 1.61
--------- ------
LEISURE & TOURISM
1,700 McDonald's 76,925 1.31
1,000 Walt Disney 69,625 1.19
--------- ------
146,550 2.50
--------- ------
MACHINERY & ENGINEERING
1,000 Caterpillar Inc. 75,250 1.29
--------- ------
75,250 1.29
--------- ------
MERCHANDISING
2,500 Wal-Mart Stores 57,188 0.98
2,500 Walgreen 100,000 1.71
--------- ------
157,188 2.69
--------- ------
MULTI-INDUSTRY
1,500 AlliedSignal 100,500 1.72
*6 Berkshire Hathaway 204,600 3.50
1,300 Minnesota Mining &
Manufacturing 107,738 1.84
--------- ------
412,838 7.06
--------- ------
RECREATION,
OTHER CONSUMER GOODS
1,000 Eastman Kodak 80,250 1.37
--------- ------
80,250 1.37
--------- ------
TELECOMMUNICATIONS
2,300 Pacific Telesis Group 84,525 1.45
--------- ------
84,525 1.45
--------- ------
TRANSPORTATION-- ROAD & RAIL
1,000 Norfolk Southern 87,500 1.50
700 Union Pacific 42,088 0.72
--------- ------
129,588 2.22
--------- ------
TOTAL EQUITIES (COST $3,931,074) 5,858,109 100.09
--------- ------
PREFERRED SHARES
BROADCASTING & PUBLISHING
3,000 News Corp ADR
(Pfd) 52,875 0.90
--------- ------
TOTAL PREFERRED SHARES (COST $60,555) 52,875 0.90
--------- ------
TOTAL INVESTMENTS (COST $3,991,629**) 5,910,984 100.99
NET CURRENT LIABILITIES (58,161) (0.99)
--------- ------
TOTAL NET ASSETS 5,852,823 100.00
========= ======
* Non-income producing security.
** Cost for federal income tax purposes is identical.
Glossary of Terms:
ADR - American Depository Receipt
See notes to financial statements.
29
<PAGE>
- --------------------------------------------------------------------------------
GAM ASIAN CAPITAL FUND
- --------------------------------------------------------------------------------
FUND MANAGEMENT
- --------------------------------------------------------------------------------
- --------------
[Photo]
- --------------
ADRIAN L. CANTWELL, INVESTMENT DIRECTOR, IS RESPONSIBLE FOR ASIA EX JAPAN
PORTFOLIOS. PRIOR TO JOINING GAM IN 1990, HE WAS A DIRECTOR OF GARTMORE LIMITED,
HONG KONG, RESPONSIBLE FOR SOUTH EAST ASIAN INVESTMENT. HE COMMENCED MANAGEMENT
OF GAM ASIAN CAPITAL FUND ON MAY 12, 1995. MR. CANTWELL ALSO MANAGES THE
OFFSHORE FUNDS GAM ASIAN INC. AND GAM SINGAPORE/MALAYSIA INC. MR. CANTWELL HAS
LIVED IN HONG KONG SINCE 1985.
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
<TABLE>
<CAPTION>
GAM Asian
Capital
(after MSCI AC Average
GAM maximum Far East 1 Month
Asian sales load (ex Japan) Deposit
Capital of 5%) Index Rate
<S> <C> <C> <C> <C>
31st Dec, 96 US$9.83 326.88
- ---------------------------------------------------------------------------------------------
% % % %
- ---------------------------------------------------------------------------------------------
Quarter to Dec, 96 +2.93 -2.21 +1.73 +1.31
- ---------------------------------------------------------------------------------------------
Jan Dec, 1996 +3.28 -1.89 +9.97 +5.37
- ---------------------------------------------------------------------------------------------
Average annual total return:-
- ---------------------------------------------------------------------------------------------
1 year to Dec, 1996 +3.28 -1.89 +9.97 +5.37
- ---------------------------------------------------------------------------------------------
Since inception +0.68 -3.74 +4.99 +5.59
- ---------------------------------------------------------------------------------------------
</TABLE>
Performances are calculated on a total return basis. During the year, a
dividend was paid of US$0.01. 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.
30
<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.
- -----------
Sources used are net asset value of the Fund which is computed daily and
Datastream. The MSCI Combined Far East Index (ex Japan) is an arithmetical
average weighted by market value of the performance of some 400 securities
listed on the stock exchanges of Hong Kong, Indonesia, Korea, Malaysia,
Philipines, Singapore, Tawian and Thailand. The combined market capitalisation
of these companies represents approximately 60% of the aggregated 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
The switch into Hong Kong commenced in the second quarter and continued
throughout the second half of the year, with that market now accounting for over
half of the Fund's assets by the end of 1996. Purchases have been concentrated
in a limited number of blue chips in the property, banking, conglomerate and
utilities sectors. Hong Kong's broad economic outlook continues to improve with
inflation, trade statistics and consumer confidence all heading in the right
direction. The residential property market is now firmly on the recovery path
and political relations with China are enjoying a sustained period of calm. The
re-rating of the market is expected to continue, although a period of
consolidation is only realistic at some juncture after the, approximately, 30%
rise this year.
The main negative influence on the performance of the Fund in 1996 has been
the low weighing in Hong Kong at the beginning of the year and the exposure to
the banking sector in Thailand. After a six year period of share price
outperformance, the fundamental asset quality of the Thai banking sector has
come into question as a result of a significant slowdown in the economy, which
is likely to record growth in the 6-7% range for 1996/7, after several years of
above 8% growth. Looking forward, the manager attaches a low probability to a
sustained rebound in Thai share prices in 1997 and the exposure has been reduced
in favour of Hong Kong. Other country weightings have changed only marginally.
The markets in S. Korea, the Philippines and India (about 3% of the fund) all
fell whilst Indonesia, Malaysia, New Zealand, Singapore and Taiwan (about 30% of
the fund) all rose.
- ----------
A Plan of Distribution (12b-1 plan), as proposed by your Fund's directors, was
approved by the Class A shareholders of each Series of the Fund in 1996. The
12b-1 plan calls for your Fund to pay the Fund's distributor up to 0.30% of its
average net assets to finance distribution and servicing related activities
engaged in by the distributor and third party financial intermediaries for the
benefit of the Fund and its shareholders.
31
<PAGE>
- --------------------------------------------------------------------------------
GAM ASIAN CAPITAL FUND -- STATEMENT OF INVESTMENTS
- --------------------------------------------------------------------------------
AS AT 31ST DECEMBER, 1996
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ NET ASSETS
- --------------------------------------------------------------------------------
EQUITIES
HONG KONG
22,000 Bank of East Asia 97,847 1.74
210,000 CDL Hotels 120,144 2.13
24,000 Cheung Kong Holdings 213,330 3.80
267,000 China Hong Kong Photo 89,754 1.59
48,400 Dah Sing Financial
Services 196,491 3.49
180,000 First Pacific Company 233,887 4.15
157,100 HKR International 265,066 4.71
119,000 Hong Kong & China Gas 228,476 4.06
46,000 Hong Kong & Shanghai
Hotel 86,832 1.54
103,200 Hong Kong Telecommunications 165,451 2.94
13,200 HSBC Holdings (HKD) 282,449 5.02
288,000 JCG Holdings 281,130 5.00
*27,000 Kerry Properties 74,006 1.31
208,000 Li & Fung 184,213 3.27
108,000 National Mutual Asia 102,631 1.82
15,000 New World Development 100,847 1.79
22,000 Sun Hung Kai Properties 269,507 4.79
21,000 Swire Pacific A 200,918 3.57
43,000 Wharf (Holdings) 214,597 3.81
74,000 Wheelock 210,964 3.75
--------- ------
3,618,540 64.28
--------- ------
INDONESIA
127,000 Aneka Kimia Raya (FR) 75,275 1.34
25,850 Bank Bali (FR) 64,570 1.15
72,000 Citra Marga Nusaphala Persa (FR) 56,393 1.00
189,000 Sorini (FR) 88,019 1.56
14,800 Tri Polyta Indonesia ADR 92,500 1.64
--------- ------
376,757 6.69
--------- ------
KOREA
6,000 Hyundai Motor GDR 44,700 0.79
4,000 Samsung Electronic GDS
(Non-Voting) 74,000 1.31
--------- ------
118,700 2.10
--------- ------
MALAYSIA
24,000 Resorts World 109,285 1.94
25,000 Tenaga Nasional 119,778 2.13
--------- ------
229,063 4.07
--------- ------
NEW ZEALAND
44,000 Fernz 150,863 2.68
58,000 Helicopter Line 110,708 1.97
--------- ------
261,571 4.65
--------- ------
SINGAPORE
34,000 DBS Land 125,134 2.22
5,000 Development Bank of Singapore
(FR) 67,534 1.20
93,000 Osprey Maritime 141,564 2.52
43,000 Wing Tai Holdings 122,918 2.18
--------- ------
457,150 8.12
--------- ------
TAIWAN
*6,640 Advanced Semiconductor
Engineering GDR 64,242 1.14
*5,753 GVC GDR 44,442 0.80
*5,300 Siliconware Precision Industries
GDR 58,830 1.05
*9,000 Yageo GDR 90,450 1.61
--------- ------
257,964 4.60
--------- ------
THAILAND
5,500 Bangkok Bank (FR) 53,186 0.94
*88,000 Bangkok Expressway (FR) 98,651 1.75
2,000 Thai Farmers Bank (FR) 12,477 0.22
35,000 Thai Glass Industries (FR) 120,097 2.13
7,100 Thai Military Bank (FR) 13,981 0.25
--------- ------
298,392 5.29
--------- ------
TOTAL EQUITIES (COST $5,588,825) 5,618,137 99.80
--------- ------
EQUITY FUNDS
TAIWAN
3,750 Taiwan Fund 83,438 1.48
--------- ------
TOTAL EQUITY FUNDS (COST $78,471) 83,438 1.48
--------- ------
TOTAL INVESTMENTS (COST $5,667,296**) 5,701,575 101.28
NET CURRENT LIABILITIES (72,316) (1.28)
--------- ------
TOTAL NET ASSETS 5,629,259 100.00
========= ======
* Non-income producing security.
** Cost for federal income tax purposes is $5,706,509.
Glossary of Terms:
ADR - American Depository Receipt
GDR - Global Depository Receipt
GDS - Global Depository Shares
FR - Foreign Registered
See notes to financial statements.
32
<PAGE>
- --------------------------------------------------------------------------------
GAM ASIAN CAPITAL FUND - STATEMENT OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
GEOGRAPHIC ANALYSIS
AS AT 31ST DECEMBER, 1996
[The following table represents a chart in the printed piece.]
NET CURRENT LIABILITIES (1.28)%
INDONESIA 6.69%
THAILAND 5.29%
TAIWAN 6.08%
NEW ZEALAND 4.65%
MALAYSIA 4.07%
JAPAN 2.10%
SINGAPORE 8.12%
HONG KONG 64.28%
33
<PAGE>
- --------------------------------------------------------------------------------
GAMERICA CAPITAL FUND
- --------------------------------------------------------------------------------
FUND MANAGEMENT
- --------------------------------------------------------------------------------
- ---------------
[Photo]
- ---------------
GORDON GRENDER, DIRECTOR, HAS BEEN ASSOCIATED WITH THE GAM GROUP SINCE 1983. HE
HAS BEEN ACTIVELY INVOLVED IN FUND MANAGEMENT IN NORTH AMERICAN STOCK MARKETS
SINCE 1974. HE COMMENCED MANAGEMENT OF GAMERICA CAPITAL FUND ON MAY 12, 1995.
MR. GRENDER ALSO MANAGES GAMERICA INC., AN OFFSHORE FUND WITH SIMILAR INVESTMENT
OBJECTIVES.
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
<TABLE>
<CAPTION>
GAMerica
Capital
(after Average
maximum S&P 1 Month
GAMerica sales load Comp Deposit
Capital of 5%) Index Rate
<S> <C> <C> <C> <C>
31st Dec, 96 US$10.82 740.74
- ---------------------------------------------------------------------------------------------
% % % %
- ---------------------------------------------------------------------------------------------
Quarter to Dec, 96 -5.97 -10.67 +8.34 +1.31
- ---------------------------------------------------------------------------------------------
Jan -- Dec, 1996 +18.31 +12.40 +22.95 +5.37
- ---------------------------------------------------------------------------------------------
Average annual total return:-
- ---------------------------------------------------------------------------------------------
1 year to Dec, 1996 +18.31 +12.40 +22.95 +5.37
- ---------------------------------------------------------------------------------------------
Since inception +11.73 +8.28 +26.14 +5.59
- ---------------------------------------------------------------------------------------------
</TABLE>
Performances are calculated on a total return basis. During the year, a
dividend was paid of US$1.01. 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.
34
<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.
- ----------
Sources used are the net asset value of the Fund which is computed daily and
Datastream.
THE COMMENT
The US Stock Market experienced another exceptional year with continued
large gains in corporate profits and sustained lower interest rates. After a
sharp correction in the market in July, the S&P 500 posted gains of 23% by year
end, including reinvested dividends. Large capitalization stocks accounted for a
significant part of this gain, with the energy, financial and technology sectors
leading the market.
The Fund, which commenced operations in mid-1995, started the year with
assets of approximately $2 million and a 25% cash position. By year end, the
portfolio was fully invested through strategic selection of several positions in
small to large capitalization issues. Existing holdings were largely unchanged.
Individual issues in the portfolio performed on average in line with the
market. Both the Fund's small asset base as well as its weightings in small and
mid-cap issues contributed to the Fund's underperformance of the index.
- ----------
A Plan of Distribution (12b-1 plan), as proposed by your Fund's directors, was
approved by the Class A shareholders of each Series of the Fund in 1996. The
12b-1 plan calls for your Fund to pay the Fund's distributor up to 0.30% of its
average net assets to finance distribution and servicing related activities
engaged in by the distributor and third party financial intermediaries for the
benefit of the Fund and its shareholders.
35
<PAGE>
- --------------------------------------------------------------------------------
GAMERICA CAPITAL FUND -- STATEMENT OF INVESTMENTS
- --------------------------------------------------------------------------------
AS AT 31ST DECEMBER, 1996
MARKET %
VALUE OF
HOLDINGS DESCRIPTION US$ NET ASSETS
- --------------------------------------------------------------------------------
EQUITIES
BEVERAGES & TOBACCO
2,000 American Brands 99,251 5.16
--------- ------
99,251 5.16
--------- ------
BUSINESS & PUBLIC SERVICES
* 13,000 Professional Staff ADR 113,750 5.91
* 26,400 Titan Corp. 89,100 4.63
--------- ------
202,850 10.54
--------- ------
CONSTRUCTION & HOUSING
* 6,250 Palm Harbor Homes 175,001 9.10
--------- ------
175,001 9.10
--------- ------
ELECTRICAL & ELECTRONICS
2,500 AVX 53,750 2.79
--------- ------
53,750 2.79
--------- ------
ENERGY SOURCES
3,000 Unocal 121,875 6.33
--------- ------
121,875 6.33
--------- ------
FOOD & HOUSEHOLD PRODUCTS
3,150 Archer-Daniels-Midland 69,301 3.60
--------- ------
69,301 3.60
--------- ------
HEALTH & PERSONAL CARE
* 4,500 ClinTrials Research 102,375 5.32
8,000 Intimate Brands A 136,000 7.07
* 5,000 Regency Health Services 48,125 2.50
* 30,000 Unilab 13,125 0.68
--------- ------
299,625 15.57
--------- ------
INDUSTRIAL COMPONENTS
* 12,000 Foamex International 198,000 10.29
--------- ------
198,000 10.29
--------- ------
INSURANCE
3,000 USLIFE 99,751 5.19
--------- ------
99,751 5.19
--------- ------
MERCHANDISING
* 6,000 Best Buy 63,750 3.31
10,000 Fred's A 86,250 4.48
2,000 Mercantile Stores 98,750 5.13
* 5,000 Party City 85,000 4.42
* 12,500 Sports & Recreation 96,875 5.04
--------- ------
430,625 22.38
--------- ------
TELECOMMUNICATIONS
* 6,000 WorldCom 156,375 8.13
--------- ------
156,375 8.13
--------- ------
TOTAL EQUITIES (COST $1,730,650) 1,906,404 99.08
--------- ------
TOTAL INVESTMENTS (COST $1,730,650 **) 1,906,404 99.08
NET CURRENT ASSETS 17,606 0.92
--------- ------
TOTAL NET ASSETS 1,924,010 100.00
========= ======
* Non-income producing security.
** Cost for federal income tax purposes is identical.
Glossary of Terms:
ADR - American Depository Receipt
See notes to financial statements.
36
<PAGE>
- --------------------------------------------------------------------------------
GAM FUNDS, INC. -- PORTFOLIO ANALYSIS
- --------------------------------------------------------------------------------
AS AT 31ST DECEMBER, 1996 (UNAUDITED)
<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 -- -- -- 9.60 -- -- -- --
Belgium 1.72 -- 1.41
China -- -- -- -- -- -- -- --
Denmark 1.92
Finland -- -- 0.85
France 6.95 1.67 26.92 -- -- -- -- --
Germany 12.69 6.19 9.84 -- -- -- -- --
Hong Kong 13.67 10.79 -- 26.52 -- -- 64.28 --
Hungary -- -- 1.04
Indonesia -- -- -- 6.90 -- -- 6.69 --
Italy -- -- 3.07 -- -- -- -- --
Japan 14.65 6.31 -- 28.94 92.92 -- -- --
Korea -- -- -- 4.73 -- -- 2.10 --
Malaysia 1.20 -- -- 3.13 -- -- 4.07 --
Netherlands 10.51 7.02 14.21 -- -- -- -- --
New Zealand -- -- -- 1.39 -- -- 4.65 --
Norway -- -- 4.74 -- -- -- -- --
Philippines -- -- -- 5.16 -- -- -- --
Singapore 2.08 1.55 -- 8.35 -- -- 8.12 --
Spain 3.08 -- 3.29 -- -- -- -- --
Sweden 1.79 1.47 8.42 -- -- -- -- --
Switzerland 7.70 6.64 7.85 -- -- -- -- --
Taiwan -- -- -- -- -- -- 6.08 --
Thailand -- -- -- 7.37 -- -- 5.29 --
United Kingdom 22.23 11.54 19.43 -- -- -- -- --
United States -- 45.77 -- -- -- 100.09 -- 93.17
Other Areas -- -- -- -- -- 0.90 -- 5.91
------ ------ ------ ------ ------ ------ ------ ------
Total Investments 100.19 98.95 101.07 102.09 92.92 100.99 101.28 99.08
Other/Net current assets/(liabilities) (0.19) 1.05 (1.07) (2.09) 7.08 (0.99) (1.28) 0.92
------ ------ ------ ------ ------ ------ ------ ------
Total Net Assets 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
====== ====== ====== ====== ====== ====== ====== ======
ANALYSIS, BY SECTOR:
Aerospace & Military Technology -- -- -- -- -- 0.10 -- --
Appliances & Household Durables 3.00 1.48 -- 5.82 5.56 -- 1.31 --
Automobiles -- -- -- 2.04 2.13 3.05 0.79 --
Banking 22.50 19.67 11.79 20.66 2.39 7.22 14.01 --
Beverages/Tobacco -- 2.26 1.94 -- -- 15.84 -- 5.16
Broadcasting & Publishing 1.50 -- 8.23 0.75 0.32 2.08 -- --
Building Materials & Components -- 1.23 2.07 2.73 0.45 -- -- --
Business & Public Services 6.24 4.17 5.57 3.34 4.06 -- 1.00 10.54
Chemicals 1.32 -- 3.13 -- 3.04 4.64 7.22 --
Construction & Housing -- 1.09 1.91 -- 0.77 -- 1.75 9.10
Data Processing & Reproduction 3.03 1.95 -- 3.12 4.85 1.52 -- --
Electrical & Electronics -- -- -- 1.03 4.35 5.72 3.46 2.79
Electronic Comp & Instruments 3.71 5.13 -- 1.76 8.85 5.30 1.14 --
</TABLE>
37
<PAGE>
- --------------------------------------------------------------------------------
GAM FUNDS, INC. -- PORTFOLIO ANALYSIS (CONTINUED)
- --------------------------------------------------------------------------------
AS AT 31ST DECEMBER, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------
GAM GAM GAM GAM
GAM GAM GAM Pacific Japan North Asian GAMerica
International Global Europe Basin Capital America Capital Capital
% % % % % % % %
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ANALYSIS BY SECTOR, (CONTINUED):
Energy Sources -- -- 6.89 3.83 -- 7.04 -- 6.33
Financial Services 4.53 14.08 0.66 6.29 14.39 1.78 5.00 --
Fixed Interest 8.86 5.18 -- -- -- -- -- --
Fixed Interest Options -- -- -- -- -- -- -- --
Fixed Interest Warrants 2.64 3.16 -- -- -- -- -- --
Food & Household Products 0.84 -- 4.29 0.69 -- 4.72 -- 3.60
Forest Products & Paper -- -- 1.41 1.39 -- -- -- --
Gold Mines -- -- -- -- -- -- -- --
Health & Personal Care 12.18 18.10 12.11 -- 4.89 21.84 -- 15.57
Index Futures 0.21 0.59 -- -- -- -- -- --
Industrial Components -- -- 1.90 -- 0.20 1.35 -- 10.29
Insurance 6.65 6.13 3.80 1.20 4.61 1.61 1.82 5.19
Investment Funds -- -- -- -- -- -- 1.48 --
Leisure & Tourism -- -- -- 1.87 1.71 2.50 7.58 --
Machinery & Engineering 1.20 -- 9.87 -- 4.14 1.29 -- --
Merchandising 2.46 3.47 4.47 3.65 16.66 1.29 -- 22.38
Metals-- Non-Ferrous 1.28 1.00 1.62 5.77 -- -- -- --
Metals-- Steel -- 1.03 3.03 -- -- -- -- --
Misc. Materials & Commodities -- -- -- 1.47 -- -- 2.13 --
Multi-Industry 3.75 -- 3.51 4.44 -- 7.06 11.47 --
Real Estate 8.09 4.96 1.84 17.40 1.27 -- 24.61 --
Recreation, Other Consumer Goods -- -- 1.44 2.25 3.27 1.37 -- --
Telecommunications 0.83 1.50 3.07 6.59 2.50 1.45 2.94 8.13
Transportation-- Airlines -- -- -- -- -- -- -- --
Transportation-- Road & Rail 1.75 1.52 2.09 0.91 1.71 2.22 -- --
Transportation-- Shipping -- -- -- -- -- -- 2.52 --
Utilities-- Electrical & Gas 3.62 1.25 3.58 3.09 0.37 -- 6.19 --
Wholesale & International Trade -- -- 0.85 -- 0.43 -- 4.86 --
Other Industries -- -- -- -- -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------
Total Investments 100.19 98.95 101.07 102.09 92.92 100.99 101.28 99.08
Other/Net current assets/(liabilities) (0.19) (1.05) (1.07) (2.09) 7.08 (0.99) (1.28) 0.92
------ ------ ------ ------ ------ ------ ------ ------
Total Net Assets 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
====== ====== ====== ====== ====== ====== ====== ======
ANALYSIS, BY INVESTMENT:
Equities 86.41 86.04 98.52 101.01 90.85 100.09 99.80 99.08
Bonds 8.86 5.18 -- -- -- -- -- --
Convertibles -- -- -- -- -- -- -- --
Futures -- -- -- -- -- -- -- --
Equity Warrants 0.01 0.01 0.02 1.08 0.76 -- -- --
Options -- -- -- -- -- -- -- --
Bond Warrants 2.64 3.16 -- -- -- -- -- --
Adjustable Rate Index Notes 2.27 4.56 -- -- -- -- -- --
Equity Funds -- -- -- -- -- -- 1.48 --
Preferred Shares -- -- 2.53 -- 1.31 0.90 -- --
------ ------ ------ ------ ------ ------ ------ ------
Total Investments 100.19 98.95 101.07 102.09 92.92 100.99 101.28 99.08
Other/Net current assets/(liabilities) (0.19) 1.05 (1.07) (2.09) 7.08 (0.99) (1.28) 0.92
------ ------ ------ ------ ------ ------ ------ ------
Total Net Assets 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
38
<PAGE>
- --------------------------------------------------------------------------------
GAM FUNDS, INC. -- STATEMENTS OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
AT 31ST DECEMBER, 1996
<TABLE>
<CAPTION>
GAM
GAM GAM GAM Pacific
International Global Europe Basin
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS (in US$)
Investments in securities at value $1,050,491,997 $20,183,605 $25,397,695 $52,765,239
Cash 243,439 307,621 -- --
Cash-- Foreign currencies 24,679,179 -- 81,923 3,187,489
Receivables:
Securities sold 22,973,389 586,331 77,573 4,007,154
Capital shares sold 4,012,689 4,028 7,017 231,641
Dividends, interest and other 7,611,059 114,993 105,254 110,026
Net equity in foreign currency exchange contracts (Note 6) 2,364,336 134,158 -- 783,429
Deferred organizational expenses and other assets 1,347 -- -- --
-------------- ----------- ----------- -----------
TOTAL ASSETS 1,112,377,435 21,330,736 25,669,462 61,084,978
-------------- ----------- ----------- -----------
LIABILITIES
Due to Custodian -- -- 223,834 5,502,314
Payables:
Securities purchased 58,330,988 719,959 81,815 3,221,724
Capital shares redeemed 1,894,289 110,371 80,005 377,739
Net equity in foreign currency exchange contracts (Note 6) -- -- 43,277 --
Accrued management fee 2,491,152 50,079 65,276 154,012
Accrued distribution fee 468,868 10,720 12,845 32,422
Accrued expenses and other 656,806 41,344 35,005 110,954
-------------- ----------- ----------- -----------
TOTAL LIABILITIES 63,842,103 932,473 542,057 9,399,165
-------------- ----------- ----------- -----------
NET ASSETS $1,048,535,332 $20,398,263 $25,127,405 $51,685,813
============== =========== =========== ===========
SOURCE OF NET ASSETS
Net capital paid in on shares of capital stock $ 918,545,454 $16,609,034 $20,432,750 $53,917,920
Accumulated net investment income/(loss) 7,848,354 (90,362) 208,492 (264,594)
Accumulated net realized gains/(losses)
on investments and foreign currency transactions (4,551,076) 19,717 412,603 772,747
Net unrealized appreciation/(depreciation) 126,692,600 3,859,874 4,073,560 (2,740,260)
-------------- ----------- ----------- -----------
NET ASSETS $1,048,535,332 $20,398,263 $25,127,405 $51,685,813
============== =========== =========== ===========
CLASS A SHARES OUTSTANDING 43,624,803 1,364,575 2,119,727 3,263,162
CLASS A NET ASSETS $1,009,819,290 $19,582,798 $25,127,405 $49,807,635
Net asset value and redemption value per share (Note 4) $23.15 $14.35 $11.85 $15.26
Offering price per share (100/95 x net asset value
per share reduced on sales of $100,000 or more) $24.37 $15.11 $12.47 $16.06
CLASS D SHARES OUTSTANDING 1,677,964 57,348 123,601
CLASS D NET ASSETS $ 38,716,042 $ 815,465 $ 1,878,178
Net asset value and redemption value per share (Note 4) $23.07 $14.22 $15.20
Offering price per share (100/96.5 x net asset value
per share reduced on sales of $100,000 or more) $23.91 $14.74 $15.75
Identified cost of investments $ 925,779,673 $16,455,183 $21,284,220 $56,276,816
</TABLE>
See notes to financial statements.
39
<PAGE>
- --------------------------------------------------------------------------------
GAM FUNDS, INC. -- STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED)
- --------------------------------------------------------------------------------
AT 31ST DECEMBER, 1996
<TABLE>
<CAPTION>
GAM GAM GAM
Japan North Asian GAMerica
Capital America Capital Capital
--------------------------------------------------------------------
ASSETS (in US$)
<S> <C> <C> <C> <C>
Investments in securities at value $ 33,918,703 $ 5,910,984 $ 5,701,575 $ 1,906,404
Cash 1,993,865 -- -- --
Cash-- Foreign currencies 113,562 -- 30,353 --
Receivables:
Securities sold 216,418 -- 49,696 108,441
Capital shares sold 43,183 43 -- --
Dividends, interest and other 4,421 10,786 11,190 870
Net equity in foreign currency exchange contracts (Note 6) 652,235 -- -- --
Deferred organizational expenses and other assets 17,295 52 18,748 18,765
------------ ----------- ----------- -----------
TOTAL ASSETS 36,959,682 5,921,865 5,811,562 2,034,480
------------ ----------- ----------- -----------
LIABILITIES
Due to Custodian -- 21,956 101,896 96,799
Payables:
Securities purchased 75,193 -- 47,405 --
Capital shares redeemed 223,405 -- 4,138 --
Accrued management fee 101,199 29,322 -- --
Accrued distribution fee 20,655 3,039 2,918 1,084
Accrued expenses and other 22,377 14,725 25,946 12,587
------------ ----------- ----------- -----------
TOTAL LIABILITIES 442,829 69,042 182,303 110,470
------------ ----------- ----------- -----------
NET ASSETS $ 36,516,853 $ 5,852,823 $ 5,629,259 $ 1,924,010
============ =========== =========== ===========
SOURCE OF NET ASSETS
Net capital paid in on shares of capital stock $ 40,622,921 $ 3,899,139 $ 5,748,274 $ 1,712,447
Accumulated net investment income/(loss) (464,007) -- (129,251) --
Accumulated net realized gains/(losses)
on investments and foreign currency transactions (600,140) 34,330 (23,991) 35,810
Net unrealized appreciation/(depreciation) (3,041,921) 1,919,354 34,227 175,753
------------ ----------- ----------- -----------
NET ASSETS $ 36,516,853 $ 5,852,823 $ 5,629,259 $ 1,924,010
============ =========== =========== ===========
CLASS A SHARES OUTSTANDING 3,887,548 431,612 572,668 177,778
CLASS A NET ASSETS $36,516,853 $5,852,823 $5,629,259 $1,924,010
Net asset value and redemption value per share (Note 4) $9.39 $13.56 $9.83 $10.82
Offering price per share (100/95 x net asset value
per share reduced on sales of $100,000 or more) $9.88 $14.27 $10.35 $11.39
Identified cost of investments $37,611,928 $3,991,629 $5,667,296 $1,730,650
</TABLE>
See notes to financial statements.
40
<PAGE>
- --------------------------------------------------------------------------------
GAM FUNDS, INC. -- STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
FOR THE YEAR ENDED 31ST DECEMBER, 1996
<TABLE>
<CAPTION>
GAM
GAM GAM GAM Pacific
International Global Europe Basin
--------------------------------------------------------------------
INVESTMENT INCOME (in US$)
<S> <C> <C> <C> <C>
Dividends (Note 5) $ 18,133,591 $ 397,950 $ 558,265 $ 1,062,409
Interest (Note 5) 18,641,259 302,123 21,966 130,565
-------------- ----------- ----------- -----------
36,774,850 700,073 580,231 1,192,974
-------------- ----------- ----------- -----------
EXPENSES
Investment advisory fee (Note 2) 8,746,443 206,365 270,703 710,064
Custodian fees and expenses 1,136,363 49,653 67,649 132,957
Transfer agent fees and expenses 531,258 13,201 13,123 37,004
Shareholder servicing fees 675,217 9,339 14,494 79,251
Distribution fee-- Class A (Note 2) 657,993 13,021 17,820 40,003
Distribution fee-- Class D (Note 2) 107,613 2,821 -- 8,526
Professional fees 61,339 37,917 31,430 35,764
Administrative expenses 1,154,069 42,967 38,230 109,712
Printing 107,501 8,434 1,984 3,227
Filing fees 195,637 54,696 32,063 54,608
Other 188,155 2,230 20,738 24,794
-------------- ----------- ----------- -----------
Total operating expenses 13,561,588 440,644 508,234 1,235,910
Interest expense 170,110 27,240 1,903 16,161
-------------- ----------- ----------- -----------
Total expenses 13,731,698 467,884 510,137 1,252,071
Fees paid indirectly (Note 2) (308,909) (4,157) (87,794) (195,850)
-------------- ----------- ----------- -----------
Net expenses 13,422,789 463,727 422,343 1,056,221
-------------- ----------- ----------- -----------
Net investment income 23,352,061 236,346 157,888 136,753
-------------- ----------- ----------- -----------
REALIZED AND UNREALIZED
GAIN/(LOSS) FROM INVESTMENTS
AND FOREIGN CURRENCY
Net realized gain/(loss) from:
Securities and futures 2,511,037 1,567,263 1,934,635 3,791,861
Foreign currency transactions (6,435,969) (24,542) 10,533 3,699,043
-------------- ----------- ----------- -----------
(3,924,932) 1,542,721 1,945,168 7,490,904
-------------- ----------- ----------- -----------
Unrealized appreciation/(depreciation) for the period:
Securities and futures 78,655,406 286,126 2,492,941 (7,959,592)
Foreign currency translation of
assets and liabilities other than investments (2,856,714) 6,081 49,347 (1,040,868)
-------------- ----------- ----------- -----------
75,798,692 292,207 2,542,288 (9,000,460)
-------------- ----------- ----------- -----------
Net gain/(loss) on investments and foreign currencies 71,873,760 1,834,928 4,487,456 (1,509,556)
-------------- ----------- ----------- -----------
NET INCREASE/(DECREASE) IN NET ASSETS FROM OPERATIONS $ 95,225,821 $ 2,071,274 $ 4,645,344 ($1,372,803)
============== =========== =========== ===========
</TABLE>
See notes to financial statements.
41
<PAGE>
- --------------------------------------------------------------------------------
GAM FUNDS, INC. - STATEMENTS OF OPERATIONS (CONTINUED)
- --------------------------------------------------------------------------------
FOR THE YEAR ENDED 31ST DECEMBER, 1996
<TABLE>
<CAPTION>
GAM GAM GAM
Japan North Asian GAMerica
Capital America Capital Capital
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME (in US$)
Dividends (Note 5) $ 135,904 $ 119,746 $ 124,254 $ 23,063
Interest (Note 5) 196,086 2,472 5,149 5,416
--------- ---------- -------- --------
331,990 122,218 129,403 28,479
--------- ---------- -------- --------
EXPENSES
Investment advisory fee (Note 2) 350,646 57,701 66,992 23,247
Custodian fees and expenses 94,288 6,228 48,220 13,735
Transfer agent fees and expenses 18,327 3,227 3,560 1,544
Shareholder servicing fees 22,510 1,666 3,003 932
Distribution fee-- Class A (Note 2) 27,979 4,139 4,039 1,501
Professional fees 25,749 19,683 23,013 18,598
Administrative expenses 47,544 6,126 10,692 1,767
Printing 7,534 3,782 2,925 4,106
Amortization of organization costs 6,599 -- 7,521 7,521
Filing fees 30,978 29,591 54,765 55,158
Other 11,375 14,104 12,368 11,618
Total operating expenses 643,529 146,247 237,098 139,727
Expenses reimbursed (Note 2) -- -- (40,389) (23,247)
Interest expense -- 1,167 1,798 3,153
--------- ---------- -------- --------
Total expenses 643,529 147,414 198,507 119,633
--------- ---------- -------- --------
Fees paid indirectly (Note 2) (138,489) (3,349) (19,009) (3,208)
--------- ---------- -------- --------
Net expenses 505,040 144,065 179,498 116,425
--------- ---------- -------- --------
Net investment loss (173,050) (21,847) (50,095) (87,946)
--------- ---------- -------- --------
REALIZED AND UNREALIZED
GAIN/(LOSS) FROM INVESTMENTS
AND FOREIGN CURRENCY
Net realized gain/(loss) from:
Securities 262,410 562,745 (88,209) 292,631
Foreign currency transactions 3,149,416 -- 3,656 --
--------- ---------- -------- --------
3,411,826 562,745 (84,553) 292,631
--------- ---------- -------- --------
Unrealized appreciation/(depreciation) for the period:
Securities (4,203,364) 710,420 235,542 175,800
Foreign currency translation of
assets and liabilities other than investments 122,424 -- (161) --
--------- ---------- -------- --------
(4,080,940) 710,420 235,381 175,800
--------- ---------- -------- --------
Net gain/(loss) on investments and foreign currencies (669,114) 1,273,165 150,828 468,431
--------- ---------- -------- --------
NET INCREASE/(DECREASE) IN NET ASSETS FROM OPERATIONS ($842,164) $1,251,318 $100,733 $380,485
========= ========== ======== ========
</TABLE>
See notes to financial statements.
42
<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.,
1996 1995 1996 1995 1996 1995
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE/(DECREASE) IN NET ASSETS FROM:
Operations
Net investment income $23,352,061 $12,014,169 $236,346 $615,585 $157,888 $151,856
Net realized gain/(loss) (3,924,932) 3,986,558 1,542,721 1,001,264 1,945,168 1,155,176
Unrealized appreciation for the year 75,798,692 55,707,766 292,207 4,216,239 2,542,288 1,365,769
-------------- ------------ ----------- ----------- ----------- -----------
Net increase in net assets
from operations 95,225,821 71,708,493 2,071,274 5,833,088 4,645,344 2,672,801
Dividends paid to shareholders from:
Net investment income
Class A (3,931,303) (11,449,364) (104,667) (524,618) (12,643) (137,849)
Class D (20,209) (164,760) (765) (6,086) -- (14,596)
Net realized gain on investments
Class A (1,784,396) (12,880,231) (1,034,220) (1,107,972) (709,600) --
Class D (63,253) (189,648) (43,139) (13,417) -- --
Capital share transactions (Note 4) 390,160,627 363,587,999 (6,945,972) 2,334,999 (1,757,129) (11,791,785)
-------------- ------------ ----------- ----------- ----------- -----------
Total increase/(decrease) in net assets 479,587,287 410,612,489 (6,057,489) 6,515,994 2,165,972 (9,271,429)
NET ASSETS
Beginning of year 568,948,045 158,335,556 26,455,752 19,939,758 22,961,433 32,232,862
-------------- ------------ ----------- ----------- ----------- -----------
End of year $1,048,535,332 $568,948,045 $20,398,263 $26,455,752 $25,127,405 $22,961,433
============== ============ =========== =========== =========== ===========
</TABLE>
See notes to financial statements.
43
<PAGE>
- --------------------------------------------------------------------------------
GAM FUNDS, INC. -- STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GAM Pacific Basin GAM Japan CapitalGAM North America
------------------------------ -------------------------- --------------------------
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.,
1996 1995 1996 1995 1996 1995
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE/(DECREASE) IN NET ASSETS FROM:
Operations
Net investment income/(loss) $136,753 ($30,461) ($173,050) ($135,428) ($21,847) $345
Net realized gain/(loss) 7,490,904 3,325,760 3,411,826 (961,998) 562,745 18,699
Unrealized appreciation/
(depreciation) for the year (9,000,460) (2,637,550) (4,080,940) 1,266,324 710,420 1,023,284
----------- ----------- ----------- ----------- ---------- ----------
Net increase/(decrease) in
net assets from operations (1,372,803) 657,749 (842,164) 168,898 1,251,318 1,042,328
Dividends paid to shareholders from:
Net investment income
Class A (2,363,071) -- (2,786,341) (22,428) -- (22)
Class D (73,778) -- -- -- -- --
Net realized gain on investments
Class A (3,041,344) (4,120,556) (326,642) (12,278) (506,891) (18,699)
Class D (101,996) (69,502) -- -- -- --
Capital share transactions (Note 4) 3,147,400 10,496,400 26,871,997 4,059,662 (872,358) 3,070,513
----------- ----------- ----------- ----------- ---------- ----------
Total increase/(decrease)
in net assets (3,805,592) 6,964,091 22,916,850 4,193,854 (127,931) 4,094,120
NET ASSETS
Beginning of year 55,491,405 48,527,314 13,600,003 9,406,149 5,980,754 1,886,634
----------- ----------- ----------- ----------- ---------- ----------
End of year $51,685,813 $55,491,405 $36,516,853 $13,600,003 $5,852,823 $5,980,754
=========== =========== =========== =========== ========== ==========
</TABLE>
See notes to financial statements.
44
<PAGE>
- --------------------------------------------------------------------------------
GAM FUNDS, INC. -- STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GAM Asian Capital GAMerica Capital
------------------------------ ------------------------------
For the year For the period For the year For the period
ended ended ended ended
31st Dec., 31st Dec., 31st Dec., 31st Dec.,
1996 1995+ 1996 1995+
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE/(DECREASE) IN NET ASSETS FROM:
Operations
Net investment income/(loss) ($50,095) ($4,819) ($87,946) $22,039
Net realized gain/(loss) (84,553) 19,945 292,631 12,000
Unrealized appreciation/
(depreciation) for the period 235,381 (201,154) 175,800 (47)
---------- ---------- ---------- ----------
Net increase/(decrease)in
net assets from operations 100,733 (186,028) 380,485 33,992
Dividends paid to shareholders from:
Net investment income
Class A -- -- -- (21,207)
Net realized gain on investments
Class A (8,786) (25,963) (169,707) (12,000)
Capital share transactions (Note 4) (23,103) 5,772,406 (1,316,024) 3,028,471
---------- ---------- ---------- ----------
Total increase/(decrease)
in net assets 68,844 5,560,415 (1,105,246) 3,029,256
NET ASSETS
Beginning of period 5,560,415 -- 3,029,256 --
---------- ---------- ---------- ----------
End of period $5,629,259 $5,560,415 $1,924,010 $3,029,256
========== ========== ========== ==========
</TABLE>
+ Period from 12th May, 1995 (Commencement of Operations) to 31st December,1995.
See notes to financial statements.
45
<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 eight
portfolios: GAM International Fund, GAM Global Fund, GAM Europe Fund, GAM
Pacific Basin Fund, GAM Japan Capital Fund, GAM North America Fund, GAM Asian
Capital Fund, and GAMerica Capital Fund (the "Funds").
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 securities of companies in 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 North America Fund invests primarily in securities of
companies in the United States and Canada. GAM Asian Capital Fund invests
primarily in securities of companies in Asia excluding Japan. GAMerica Capital
Fund invests primarily in securities of companies in the United States.
The Funds offer Class A and Class D shares; however, Class D shares currently
are available only for GAM International Fund, GAM Global Fund and GAM Pacific
Basin Fund. Class A shares are sold with a front-end sales charge of up to 5%
and Class D shares are sold with a front-end sales charge of up to 3.5%. The two
classes of shares have identical voting, dividend, liquidation and other rights,
except that each class bears its separate distribution and certain class
expenses, and has exclusive voting rights with respect to any matter on which a
separate vote of any class is required by federal or state law. The following is
a summary of significant accounting policies followed in the preparation of the
Company's financial statements.
VALUATION OF SECURITIES
Investment securities are stated at value based on the last sale price on the
exchange on which the securities are traded, or, lacking any sales, at the last
available bid price. Securities traded in the over-the-counter market are valued
at the last available bid price. Short-term securities maturing in 60 days or
less are valued on an amortized cost basis which approximates market value.
Other securities for which market quotations are not readily available are
valued at fair value as determined by or under the direction of the Board of
Directors.
FOREIGN CURRENCY
Portfolio securities and other assets and liabilities denominated in foreign
currencies are translated into US dollar amounts at date of valuation. Purchases
and sales of portfolio securities and income items denominated in foreign
currencies are translated into US dollar amounts on the respective dates of such
transactions.
The Funds do not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, the difference between the amounts
of dividends, interest and foreign withholding taxes recorded on the Funds'
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.
46
<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 shareholder distributions will result in
reclassifications to paid in capital and may affect the per share distribution
between net investment income and realized and unrealized gain/(loss). The
calculation of Net Investment Income per share in the Selected Financial
Information excludes these adjustments. Undistributed net investment
income/(loss) and accumulated undistributed net realized gain/(loss) on
investments and foreign currency transactions may include temporary book and tax
basis differences which will reverse in a subsequent period. Any taxable income
or gain remaining at fiscal year end is distributed in the following year.
DEFERRED ORGANIZATION EXPENSES
Organization costs for GAM Japan Capital Fund, GAM Asian Capital Fund and
GAMerica Capital Fund have been deferred and are being amortized on a
straight-line basis over a five-year period from each Fund's commencement of
operations.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expense 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.
47
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
NOTE 2. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The Investment Adviser, GAM International Management Limited, receives a fee
under its agreement with the Company equivalent to 1% per annum of each Fund's
average daily net assets, except for GAM North America Fund. With respect to GAM
North America Fund, GAM International Management Limited and Fayez Sarofim & Co.
serve as co-investment advisers to the Fund. Each co-adviser receives a fee
under its agreement equivalent to 0.50% per annum of the Fund's average daily
net assets. For the year ended 31st December, 1996, waivers of management fees
by the Investment Adviser amounted to $40,389 and $23,247 for the GAM Asian
Capital Fund and GAMerica Capital Fund, respectively.
For the year ended 31st December, 1996, fund expenses were reduced as follows
under an expense offset arrangement with the Fund's custodian. Custodian fees
and expenses reported in the Statement of Operations exclude these credits. The
Funds could have invested a portion of the assets utilized in connection with
the offset arrangements in an income-producing asset if they had not entered
into such an arrangement.
<TABLE>
<CAPTION>
GAM GAM GAM GAM GAM GAM GAM GAMERICA
INTERNATIONAL GLOBAL EUROPE PACIFIC BASIN JAPAN CAPITAL NORTH AMERICA ASIAN CAPITAL CAPITAL
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$308,909 $4,157 $87,794 $195,850 $138,489 $3,349 $19,009 $3,208
</TABLE>
GAM Services, Inc. acts as principal underwriter of the Fund. For the year ended
31st December, 1996, GAM Services, Inc. received front-end sales load charges of
$2,062,895 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.
Effective 9th October, 1996, the Funds adopted a Class A Distribution Plan
pursuant to this rule which provides for payments by the Funds to GAM Services
at the annual rate of up to .30% of each applicable Fund's average net assets
attributable to Class A shares.
NOTE 3. DIRECTORS FEES
The Funds do not pay any compensation to their officers or to any directors,
officers or employees of GAM International Management Limited, GAM Services Inc.
or their affiliates, other than registered investment companies. Each
disinterested director is compensated by each Fund as follows:
<TABLE>
<CAPTION>
GAM GAM GAM GAM GAM GAM GAM GAMERICA
INTERNATIONAL GLOBAL EUROPE PACIFIC BASIN JAPAN CAPITAL NORTH AMERICA ASIAN CAPITAL CAPITAL
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Annual Retainer $625 $625 $625 $625 $625 $625 $625 $625
Meeting Fee 63 63 63 63 63 63 63 63
</TABLE>
NOTE 4. 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, 1996, GAM Funds, Inc. had 700,000,000 shares of common stock,
$0.001 par value authorized which were allocated to each Fund as follows:
150,000,000 and 50,000,000 shares respectively, were allocated to each of Class
A and Class D of GAM International, 50,000,000 and 25,000,000 shares
respectively, were allocated to Class A and Class D of GAM Global, GAM Europe,
GAM Pacific Basin and GAM North America, 25,000,000 shares were allocated to
each of Class A and Class D of GAMerica Capital Funds, while 45,000,000 and
12,500,000 shares respectively were allocated to each of Class A and Class D of
GAM Japan Capital and GAM Asian Capital Funds. Changes in each Fund's capital
stock are summarized as follows:
48
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GAM INTERNATIONAL FUND
For the Periods
----------------------------------------------------------
01--Jan--96 to 31--Dec--96 01--Jan--95 to 31--Dec--95
Shares US$ Shares US$
---------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
CLASS A
Shares sold 33,365,859 692,156,317 3,534,378 442,230,411
Shares issued on reinvestment
of dividends 219,386 4,843,204 1,043,909 22,078,675
Shares issued on 10-for-1 split -- -- 21,450,499 --
Shares redeemed (16,170,479) (333,081,923) (739,009) (109,514,578)
---------- ----------- ---------- -----------
Net increase 17,414,766 363,917,598 25,289,777 354,794,508
========== =========== ========== ===========
CLASS D*
Shares sold 1,461,453 30,255,446 112,790 8,456,005
Shares issued on reinvestment
of dividends 3,688 78,975 16,239 342,978
Shares issued on 10-for-1 split -- -- 279,205 --
Shares redeemed (195,341) (4,091,392) (70) (5,492)
---------- ----------- ---------- -----------
Net increase 1,269,800 26,243,029 408,164 8,793,491
========== =========== ========== ===========
</TABLE>
- ----------
*Class D shares were offered for sale on 5th September, 1995.
<TABLE>
<CAPTION>
GAM GLOBAL FUND
For the Periods
----------------------------------------------------------
01--Jan--96 to 31--Dec--96 01--Jan--95 to 31--Dec--95
Shares US$ Shares US$
---------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
CLASS A
Shares sold 899,878 11,907,144 176,192 14,991,450
Shares issued on reinvestment
of dividends 64,567 915,513 107,361 1,440,975
Shares issued on 10-for-1 split -- -- 1,595,905 --
Shares redeemed (1,535,935) (20,228,744) (131,581) (14,398,980)
---------- ----------- -------- -----------
Net increase/(decrease) (571,490) (7,406,087) 1,747,877 2,033,445
========== =========== ========= ===========
CLASS D*
Shares sold 54,061 697,624 2,161 297,998
Shares issued on reinvestment
of dividends 2,735 38,450 267 3,556
Shares issued on 10-for-1 split -- -- 19,452 --
Shares redeemed (21,328) (275,959) -- --
---------- ----------- -------- -----------
Net increase 35,468 460,115 21,880 301,554
========== =========== ========= ===========
- ----------
*Class D shares were offered for sale on 5th September, 1995.
</TABLE>
49
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GAM EUROPE FUND
For the Periods
----------------------------------------------------------
01--Jan--96 to 31--Dec--96 01--Jan--95 to 31--Dec--95
Shares US$ Shares US$
---------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
CLASS A
Shares sold 1,072,701 12,022,756 233,600 21,831,710
Shares issued on reinvestment
of dividends 47,646 542,923 11,967 118,597
Shares issued on 10-for-1 split -- -- 2,085,855 --
Shares redeemed (1,287,490) (14,322,808) (416,953) (33,742,092)
---------- ----------- -------- -----------
Net increase/(decrease) (167,143) (1,757,129) 1,914,469 (11,791,785)
========== =========== ======== ===========
</TABLE>
<TABLE>
<CAPTION>
GAM PACIFIC BASIN FUND
For the Periods
----------------------------------------------------------
01--Jan--96 to 31--Dec--96 01--Jan--95 to 31--Dec--95
Shares US$ Shares US$
---------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
CLASS A
Shares sold 2,466,475 43,289,379 498,192 40,004,218
Shares issued on reinvestment
of dividends 265,013 4,074,012 131,648 3,512,026
Shares issued on 10-for-1 split -- -- 2,569,309 --
Shares redeemed (2,646,254) (44,771,351) (296,598) (34,613,472)
---------- ----------- -------- -----------
Net increase 85,234 2,592,040 2,902,551 8,902,772
========== =========== ======== ===========
CLASS D*
Shares sold 53,648 907,532 8,706 1,524,125
Shares issued on reinvestment
of dividends 1,072 17,934 4,120 69,503
Shares issued on 10-for-1 split -- -- 78,357 --
Shares redeemed (22,302) (370,106) -- --
---------- ----------- -------- -----------
Net increase 32,418 555,360 91,183 1,593,628
========== =========== ======== ===========
</TABLE>
- ----------
* Class D shares were offered for sale on 5th September, 1995.
50
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GAM JAPAN CAPITAL FUND
For the Periods
----------------------------------------------------------
01--Jan--96 to 31--Dec--96 01--Jan--95 to 31--Dec--95
Shares US$ Shares US$
---------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
CLASS A
Shares sold 4,134,008 43,069,239 161,092 12,534,772
Shares issued on reinvestment
of dividends 232,747 2,201,623 262 24,645
Shares issued on 10-for-1 split -- -- 1,190,830 --
Shares redeemed (1,817,450) (18,398,865) (111,683) (8,499,755)
---------- ----------- -------- ----------
Net increase 2,549,305 26,871,997 1,240,501 4,059,662
========== =========== ======== ==========
</TABLE>
<TABLE>
<CAPTION>
GAM NORTH AMERICA FUND
For the Periods
----------------------------------------------------------
01--Jan--96 to 31--Dec--96 01--Jan--95 to 31--Dec--95
Shares US$ Shares US$
---------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
CLASS A
Shares sold 69,484 911,748 37,084 3,775,544
Shares issued on reinvestment
of dividends 26,418 360,609 1,246 14,805
Shares issued on 10-for-1 split -- -- 463,269 --
Shares redeemed (165,717) (2,144,715) (20,808) (719,836)
-------- ---------- ------- --------
Net increase/(decrease) (69,815) (872,358) 480,791 3,070,513
======== ========== ======= ========
</TABLE>
51
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GAM ASIAN CAPITAL
For the Periods
----------------------------------------------------------
01--Jan--96 to 31--Dec--96 12--MAY--95+ to 31--Dec--95
Shares US$ Shares US$
---------- ----------- ---------- -----------
CLASS A
<S> <C> <C> <C> <C>
Shares sold 414,332 4,143,499 70,020 6,737,939
Shares issued on reinvestment
of dividends 146 1,512 2,417 22,746
Shares issued on 10-for-1 split -- -- 529,049 --
Shares redeemed (425,435) (4,168,114) (17,861) (988,279)
------------ ------------ ------------ ------------
Net increase/(decrease) (10,957) (23,103) 583,625 5,772,406
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
GAMERICA CAPITAL
For the Periods
----------------------------------------------------------
01--Jan--96 to 31--Dec--96 12--MAY--95+ to 31--Dec--95
Shares US$ Shares US$
---------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
CLASS A
Shares sold 21,800 269,201 32,077 3,216,219
Shares issued on reinvestment
of dividends 9,804 102,358 2,464 24,562
Shares issued on 10--for-1 split -- -- 279,569 --
Shares redeemed (155,887) (1,687,583) (12,049) (212,310)
-------- ---------- ------- ---------
Net increase/(decrease) (124,283) (1,316,024) 302,061 3,028,471
======== ========== ======= =========
</TABLE>
- ----------
+ Commencement of operations.
52
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
NOTE 5. INVESTMENT TRANSACTIONS
The cost of purchases and proceeds of sales of investment securities for the
year ended 31st December, 1996 excluding short-term securities, were as follows:
<TABLE>
<CAPTION>
GAM GAM GAM GAM GAM GAM GAM GAMERICA
INTERNATIONAL GLOBAL EUROPE PACIFIC BASIN JAPAN CAPITAL NORTH AMERICA ASIAN CAPITAL CAPITAL
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
In US$
Purchases $1,102,375,937 $20,449,369 $18,545,348 $42,902,863 $32,431,699 $486,573 $5,632,936 $597,500
Sales 664,117,735 27,832,649 18,180,676 31,070,692 6,206,720 1,856,842 5,107,635 1,415,502
</TABLE>
Realized gains and losses are reported on an identified cost basis. At 31st
December, 1996, the aggregate gross unrealized appreciation and depreciation of
securities, based on cost for federal income taxes purposes, were as follows:
<TABLE>
<CAPTION>
GAM GAM GAM GAM GAM GAM GAM GAMERICA
INTERNATIONAL GLOBAL EUROPE PACIFIC BASIN JAPAN CAPITAL NORTH AMERICA ASIAN CAPITAL CAPITAL
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
In US$
Appreciation $138,235,382 $3,885,773 $4,577,921 $4,639,756 $935,383 $1,943,088 $687,145 $396,446
Depreciation 13,732,862 160,014 468,982 8,340,304 5,010,889 23,733 692,079 220,692
Net $124,502,520 $3,725,759 $4,108,939 $(3,700,548) $(4,075,506) $1,919,355 $(4,934) $175,754
</TABLE>
At 31st December, 1996, the Funds had tax basis net capital losses as follows.
These losses may be carried over to offset future capital gains through the
expiration dates shown:
<TABLE>
<CAPTION>
GAM GAM GAM GAM GAM GAM GAM GAMERICA
INTERNATIONAL GLOBAL EUROPE PACIFIC BASIN JAPAN CAPITAL NORTH AMERICA ASIAN CAPITAL CAPITAL
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
In US$ $4,340,589 -- -- -- $507,841 -- -- --
Carryforward 31st Dec, -- -- -- 31st Dec, -- -- --
Expiration dates 2003--2004 -- -- -- 2003 -- -- --
</TABLE>
Foreign taxes withheld from dividends and interest for the year ended 31st
December 1996, were as follows:
<TABLE>
<CAPTION>
GAM GAM GAM GAM GAM GAM GAM GAMERICA
INTERNATIONAL GLOBAL EUROPE PACIFIC BASIN JAPAN CAPITAL NORTH AMERICA ASIAN CAPITAL CAPITAL
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
In US$
Dividends $2,842,486 $43,916 $62,629 $112,254 $23,988 $53 $15,230 --
Interest 48,263 13,168 4,560 -- -- -- -- --
</TABLE>
53
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
NOTE 6. FINANCIAL INSTRUMENTS
During the period, several of the Funds have been party to financial instruments
with off-balance sheet risks, including forward foreign currency contracts and
futures contracts, primarily in an attempt to minimize the risk to the Fund, in
respect of its portfolio transactions. These instruments involve market and/or
credit risk in excess of the amount recognized in the Statement of Assets and
Liabilities. Risks arise from the possible inability of counterparties to meet
the terms of their contracts and from movement in currency and securities values
and interest rates. The contract amount indicates the extent of the Funds'
involvement in such contracts.
Forwards: When entering a forward currency contract, the Fund agrees to receive
or deliver a fixed quantity of foreign currency for an agreed upon price on an
agreed upon future date.
At 31st December, 1996 the Fund had outstanding forward contracts for the
purchase and sale of currencies as set out below. The contracts are reported in
the financial statements at the Fund's net equity, as measured by the difference
between the forward foreign exchange rates at the dates of entry into the
contracts and the forward rates at the reporting date, or the date an offsetting
position, if any, has been entered into.
GAM INTERNATIONAL FUND
<TABLE>
<CAPTION>
UNREALIZED
APPRECIATION/
(DEPRECIATION)
----------
US$
<S> <C>
14,126,320,000 Japanese yen sold vs. 132,000,000 US$,
21st January, 1997 9,646,575
41,103,210 UK Pound sterling sold vs. 100,000,000 German Deutsche marks,
21st January, 1997 (5,182,611)
1,220,292,000 Spanish peseta sold vs. 14,143,394 German Deutsche marks,
27th January, 1997 (203,444)
45,233,983 UK Pound sterling sold vs. 110,000,000 German Deutsche marks,
27th January, 1997 (5,519,665)
27,600,000 Malaysian ringgit sold vs. 10,985,512 US$,
27th February, 1997 78,576
51,000,000 Swedish krona sold vs. 11,312,719 German Deutsche marks,
6th March, 1997 (269,585)
438,290,160 French francs sold vs. 129,000,000 German Deutsche marks,
26th March, 1997 (656,165)
103,940,500 Swiss francs sold vs. 83,000,000 US$,
17th April, 1997 4,470,655
----------
Net equity in foreign currency exchange contracts $2,364,336
==========
</TABLE>
54
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
GAM GLOBAL FUND
US$
96,234,000 Japanese yen sold vs. 900,000 US$,
21st January, 1997 66,481
1,500,000 Swedish krona sold vs. 332,727 German Deutsche marks,
6th March, 1997 (7,929)
2,037,558 French francs sold vs. 600,000 German Deutsche marks,
26th March, 1997 (2,858)
1,616,810 Swiss francs sold vs. 1,300,000 US$,
17th April, 1997 78,464
--------
Net equity in foreign currency exchange contracts $134,158
========
GAM EUROPE FUND
US$
35,000,000 French francs sold vs. 6,714,843 US$,
24th January, 1997 (41,462)
3,775,000 German Deutsche marks sold vs. 2,444,918 US$,
24th January, 1997 (12,571)
6,250,000 Netherland guilders sold vs. 3,611,151 US$,
24th January, 1997 (14,002)
2,625,000 Swiss francs sold vs. 1,991,063 US$,
24th January, 1997 24,758
--------
Net equity in foreign currency exchange contracts ($43,277)
========
GAM PACIFIC BASIN FUND
US$
1,987,740,000 Japanese yen sold vs. 18,000,000 US$,
21st January, 1997 783,429
--------
Net equity in foreign currency exchange contracts $783,429
========
GAM JAPAN CAPITAL FUND
US$
336,171,000 Japanese yen sold vs. 3,050,000 US$,
7th January, 1997 155,717
772,940,000 Japanese yen sold vs. 7,000,000 US$,
17th January, 1997 309,234
956,505,000 Japanese yen sold vs. 8,500,000 US$,
3rd February, 1997 199,509
349,835,000 Japanese yen sold vs. 3,050,000 US$,
7th April, 1997 (12,704)
18,086,500 Japanese yen bought vs. 155,717 US$,
7th January, 1997 479
--------
Net equity in foreign currency exchange contracts $652,235
========
At 31st December, 1996 the Funds had sufficient cash and/or securities to cover
any commitments under these Contracts.
55
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
NOTE 7. SELECTED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
PER SHARE OPERATING PERFORMANCE (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
---------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
-------------------------------------- -----------------------------------
NET REALIZED DIVIDENDS DISTRIBUTIONS
NET ASSET VALUE, NET AND UNREALIZED TOTAL FROM FROM NET FROM NET NET ASSET
BEGINNING INVESTMENT GAIN/(LOSS) ON INVESTMENT INVESTMENT REALIZED TOTAL VALUE, END
OF PERIOD INCOME/(LOSS) INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS OF PERIOD
---------------------------------------------------------------------------------------------------------
01--JAN--96 TO
31--DEC--96
US$
<S> <C> <C> <C> <C> <C> <C> <C> <C>
GAM International
Class A US$ 21.37 0.57+ 1.34 1.91 (0.09) (0.04) (0.13) US$ 23.15
Class D US$ 21.35 0.45+ 1.32 1.77 (0.01) (0.04) (0.05) US$ 23.07
GAM Global
Class A US$ 13.51 0.16+ 1.55 1.71 (0.08) (0.79) (0.87) US$ 14.35
Class D US$ 13.48 0.07+ 1.47 1.54 (0.01) (0.79) (0.80) US$ 14.22
GAM Europe
Class A US$ 10.04 0.07+ 2.06 2.13 (0.01) (0.31) (0.32) US$ 11.85
GAM Pacific Basin
Class A US$ 16.97 0.04+ (0.11) (0.07) (0.74) (0.90) (1.64) US$ 15.26
Class D US$ 16.96 (0.10)+ (0.11) (0.21) (0.65) (0.90) (1.55) US$ 15.20
GAM Japan Capital
Class A US$ 10.16 (0.05)+ 0.07 0.02 (0.70) (0.09) (0.79) US$ 9.39
GAM North America
Class A US$ 11.93 (0.05)+ 2.93 2.88 -- (1.25) (1.25) US$ 13.56
GAM Asian Capital
Class A US$ 9.53 (0.07)+ 0.38 0.31 -- (0.01) (0.01) US$ 9.83
GAMerica Capital
Class A US$ 10.03 (0.42)+ 2.22 1.80 -- (1.01) (1.01) US$ 10.82
01--JAN--95 TO
31--DEC--95
US$
GAM International
Class A US$ 17.21 0.52 4.64 5.16 (0.47) (0.53) (1.00) US$ 21.37
Class D US$ 20.46 0.10 1.78 1.88 (0.46) (0.53) (0.99) US$ 21.35
GAM Global
Class A US$ 10.60 0.35 3.48 3.83 (0.30) (0.62) (0.92) US$ 13.51
Class D US$ 13.46 -- 0.92 0.92 (0.28) (0.62) (0.90) US$ 13.48
GAM Europe
Class A US$ 8.66 0.07 1.38 1.45 (0.06) (0.01) (0.07) US$ 10.04
GAM Pacific Basin
Class A US$ 17.62 -- 0.61 0.61 -- (1.26) (1.26) US$ 16.97
Class D US$ 17.36 (0.02) 0.26 0.24 -- (0.64) (0.64) US$ 16.96
GAM Japan Capital
Class A US$ 9.62 (0.07) 0.69 0.62 (0.05) (0.03) (0.08) US$ 10.16
GAM North America
Class A US$ 9.14 -- 2.83 2.83 -- (0.04) (0.04) US$ 11.93
GAM Asian Capital**
Class A US$ 10.00 (0.01) (0.42) (0.43) -- (0.04) (0.04) US$ 9.53
GAMerica Capital**
Class A US$ 10.00 0.07 0.07 0.14 (0.07) (0.04) (0.11) US$ 10.03
01--JAN--94 TO
31--DEC--94
US$
GAM International US$ 23.90 0.34 (2.58) (2.24) (0.66) (3.79) (4.45) US$ 17.21
GAM Global US$ 17.92 0.19 (2.94) (2.75) (0.49) (4.08) (4.57) US$ 10.60
GAM Europe US$ 8.93 -- (0.27) (0.27) -- -- -- US$ 8.66
GAM Pacific Basin US$ 19.20 (0.05) 1.36 1.31 -- (2.89) (2.89) US$ 17.62
GAM Japan Capital* US$ 10.00 0.02 (0.40) (0.38) -- -- -- US$ 9.62
GAM North America US$ 12.80 0.04 0.23 0.27 (0.23) (3.70) (3.93) US$ 9.14
</TABLE>
56
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PER SHARE OPERATING PERFORMANCE (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
---------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
-------------------------------------- -----------------------------------
NET REALIZED DIVIDENDS DISTRIBUTIONS
NET ASSET VALUE, NET AND UNREALIZED TOTAL FROM FROM NET FROM NET NET ASSET
BEGINNING INVESTMENT GAIN/(LOSS) ON INVESTMENT INVESTMENT REALIZED TOTAL VALUE, END
OF PERIOD INCOME/(LOSS) INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS OF PERIOD
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
01--JAN--93 TO
31--DEC--93
US$
GAM International US$ 14.56 0.25 10.38 10.63 (0.34) (0.95) (1.29) US$ 23.90
GAM Global US$ 10.33 0.24 7.46 7.70 (0.11) -- (0.11) US$ 17.92
GAM Europe US$ 7.34 0.24 1.41 1.65 (0.06) -- (0.06) US$ 8.93
GAM Pacific Basin US$ 13.14 (0.03) 6.57 6.54 (0.04) (0.44) (0.48) US$ 19.20
GAM North America US$ 13.63 0.19 (0.46) (0.27) (0.07) (0.49) (0.56) US$ 12.80
01--JAN--92 TO
31--DEC--92
US$
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
</TABLE>
+ For the year ended 31st December, 1996, net investment income per share has
been determined based on the weighted average shares outstanding method.
* Period from 1st July, 1994 (Inception) to 31st December, 1994.
** Period from 12th May, 1995 (Inception) to 31st December, 1995.
57
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATIOS/SUPPLEMENTAL DATA
---------------------------------------------------------------------------------------------------
Ratios to average net assets
--------------------------------
TOTAL RETURN
(WITHOUT NET ASSETS NET PORTFOLIO AVERAGE
DEDUCTION OF END OF PERIOD INVESTMENT TURNOVER COMMISSION
SALES LOAD) (000 OMITTED) EXPENSES INCOME/(LOSS) RATE RATE PAID++++
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
01--JAN--96 TO
31--DEC--96
US$
GAM International++
Class A 8.98% US$ 1,009,819 1.56% 2.70% 82% 0.0202
Class D 8.33% US$ 38,716 2.06% 2.13% 82% 0.0202
GAM Global++
Class A 12.74% US$ 19,583 2.26% 1.17% 107% 0.0255
Class D 11.54% US$ 815 2.88% 0.52% 107% 0.0255
GAM Europe++
Class A 21.32% US$ 25,127 1.89% 0.59% 76% 0.0168
GAM Pacific Basin++
Class A (0.39)% US$ 49,808 1.76% 0.22% 46% 0.0251
Class D (1.19)% US$ 1,878 2.28% (0.57)% 46% 0.0251
GAM Japan Capital++
Class A 0.15% US$ 36,504 1.84% (0.50)% 23% 0.0697
GAM North America+
Class A 24.10% US$ 5,853 2.61% (0.39)% 9% 0.0600
GAM Asian Capital**++
Class A 3.28% US$ 5,629 2.98% (0.75)% 86% 0.0124
GAMerica Capital**++
Class A 18.31% US$ 1,924 5.16% (3.79)% 27% 0.0533
01--JAN--95 TO
31--DEC--95
US$
GAM International
Class A 30.09% US$ 560,234 1.57% 3.89% 34.97% --
Class D 9.26% US$ 8,714 2.22%* 1.90%* 34.97% --
GAM Global
Class A 36.25% US$ 26,161 2.16% 2.96% 60.18% --
Class D 6.97% US$ 295 2.81%* (0.09)%* 60.18% --
GAM Europe
Class A 16.77% US$ 22,961 2.12% 0.75% 145.16% --
GAM Pacific Basin
Class A 4.50% US$ 53,944 1.98% (0.07)% 64.01% --
Class D 2.35% US$ 1,547 2.63%* (1.49)%* 64.01% --
GAM Japan Capital**
Class A 6.45% US$ 13,600 3.61% (2.35)% 122.38% --
GAM North America**
Class A 30.90% US$ 5,981 2.98% 0.01% 8.57% --
GAM Asian Capital++**
Class A (4.25)% US$ 5,560 3.11%* (0.17)%* 17.01% --
GAMerica Capital++**
Class A 1.38% US$ 3,029 3.73%* 1.36%* 10.90% --
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% --
</TABLE>
58
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATIOS/SUPPLEMENTAL DATA
---------------------------------------------------------------------------------------------------
Ratios to average net assets
--------------------------------
TOTAL RETURN
(WITHOUT NET ASSETS NET PORTFOLIO AVERAGE
DEDUCTION OF END OF PERIOD INVESTMENT TURNOVER COMMISSION
SALES LOAD) (000 OMITTED) EXPENSES INCOME/(LOSS) RATE RATE PAID++++
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
01--JAN--93 TO
31--DEC--93
US$
GAM International++
01--JAN--93 TO
31--DEC--93
US$
GAM International 79.96% US$ 80,776 1.99% 2.28% 98.45% --
GAM Global 75.30% US$ 33,416 2.68% 1.88% 106.73% --
GAM Europe 22.68% US$ 14,398 2.64% 1.05% 181.51% --
GAM Pacific Basin 51.52% US$ 40,719 1.93% (0.29)% 91.07% --
GAM North America (2.09)% US$ 3,289 2.10% 0.69% 3.42% --
01--JAN--92 TO
31--DEC--92
US$
GAM International 3.08% US$ 41,032 2.03% 4.85% 109.16% --
GAM Global (4.65)% US$ 19,763 2.37% 5.25% 118.41% --
GAM Europe (4.91)% US$ 17,264 2.47% 5.06% 72.20% --
GAM Pacific Basin (0.37)% US$ 28,206 2.03% 0.09% 74.78% --
GAM North America 2.42% US$ 11,781 2.43% 0.47% 20.38% --
</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 3.59% for GAM Asian Capital and 6.16% for GAMerica
Capital of average net assets respectively, for the year ended 31st
December, 1996. Expenses on an annualized basis would have represented
4.61% for GAM Japan Capital, 3.27% for GAM North America, 3.95% for GAM
Asian Capital and 4.73% for GAMerica Capital of average net assets,
respectively, for the period ended 31st December, 1995 and 5.81% of average
net assets for GAM North America Fund for the year ended 31st December
1994.
++ The ratios of expenses to average net assets for the year ended 31st
December, 1996 include amounts paid through expense offset arrangements.
Prior period ratios excluded these amounts (see Note 2).
++++ For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for trades on
which a commission is charged.
59
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
BANK LOANS
----------------------------------------------------------------------------------------
AVERAGE
AVERAGE AMOUNT NUMBER OF SHARES AVERAGE
AMOUNTS OF BANK LOANS OUSTANDING AMOUNT OF
OUTSTANDING OUTSTANDING DURING THE PERIOD DEBT PER SHARE
END OF PERIOD DURING THE PERIOD (MONTHLY AVERAGE) DURING
(000 OMITTED) (000 OMITTED) (000 OMITTED) THE PERIOD
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
01--JAN--96 TO
31--DEC--96
US$
GAM International
Class A
Class D
GAM Global
Class A
Class D
GAM Europe
Class A
GAM Pacific Basin
Class A
Class D
GAM Japan Capital
Class A
GAM North America
Class A
GAM Asian Capital
Class A
GAMerica Capital
Class A
01--JAN--95 TO
31--DEC--95 US$
GAM International
Class A
Class D
GAM Global
Class A
Class D
GAM Europe
Class A -- US$ 123 390 US$ 0.32
GAM Pacific Basin
Class A
Class D
GAM Japan Capital
Class A
GAM North America
Class A
GAM Asian Capital++
Class A
GAMerica Capital++
Class A
</TABLE>
60
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BANK LOANS
----------------------------------------------------------------------------------------
AVERAGE
AVERAGE AMOUNT NUMBER OF SHARES AVERAGE
AMOUNTS OF BANK LOANS OUSTANDING AMOUNT OF
OUTSTANDING OUTSTANDING DURING THE PERIOD DEBT PER SHARE
END OF PERIOD DURING THE PERIOD (MONTHLY AVERAGE) DURING
(000 OMITTED) (000 OMITTED) (000 OMITTED) THE PERIOD
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
01--JAN--94 TO
31--DEC--94
US$
GAM International
GAM Global
GAM Europe
GAM Pacific Basin
GAM Japan Capital+
GAM North America
01--JAN--93 TO
31--DEC--93
US$
GAM International US$ 9,557 US$ 2,042 2,700 US$ 0.76
GAM Global US$ 2,165 US$ 2,600 1,780 US$ 1.48
GAM Europe US$ 1,860 US$ 521 1,680 US$ 0.31
GAM Pacific Basin US$ -- US$ -- -- US$ --
GAM North America US$ -- US$ -- -- US$ --
01--JAN--92 TO
31--DEC--92
US$
GAM International US$ 2,743 US$ 901 2,790 US$ 0.32
GAM Global US$ 9,010 US$ 1,401 2,130 US$ 0.66
GAM Europe US$ 1,177 US$ 347 2,400 US$ 0.14
GAM Pacific Basin US$ -- US$ -- -- US$ --
GAM North America US$ -- US$ -- -- US$ --
</TABLE>
+ Period from 1st July, 1994 (Inception) to 31st December, 1994.
++ Period from 12th May, 1995 (Inception) to 31st December, 1995.
61
<PAGE>
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Board of Directors and Shareholders of
GAM Funds, Inc.
We have audited the accompanying statements of assets and liabilities, including
the statements of investments, of GAM Funds, Inc. (comprising, respectively, GAM
International Fund, GAM Global Fund, GAM Europe Fund, GAM Pacific Basin Fund,
GAM Japan Fund, GAM North America Fund, GAM Asian Capital Fund, and GAMerica
Capital Fund) as of December 31, 1996, and the related statements of operations,
the statements of changes in net assets, and the selected financial information
for the year then ended. These financial statements and selected financial
information are the responsibility of the Companyis management. Our
responsibility is to express an opinion on these financial statements and
selected financial information based on our audit. The statement of changes in
net assets for the year ended December 31, 1995 and the selected financial
information for each of the years in the period ended December 31, 1995, were
audited by other auditors whose report, dated February 2, 1996, expressed an
unqualified opinion on those statements.
We conducted our audit 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
December 31, 1996, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements and selected financial information
referred to above present fairly, in all material respects, the financial
position of each of the respective portfolios constituting GAM Funds, Inc. as of
December 31, 1996, and the results of their operations, the changes in their net
assets and the selected financial information for the year then ended, in
conformity with generally accepted accounting principles.
Boston, Massachusetts
February 14, 1997 Coopers & Lybrand L.L.P.
62
<PAGE>
This Page Intentionally Left Blank
Exhibit 15(b)
GAM FUNDS, INC.
PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
CLASS A SHARES
WHEREAS, GAM Funds, Inc. (the "Fund") is an open-end management investment
company and is registered as such under the Investment Company Act of 1940, as
amended (the "1940 Act"); and
WHEREAS, the Fund desires to adopt a Plan of Distribution pursuant to Rule 12b-1
under the 1940 Act with respect to shares of its Class A common stock, par value
$.0001 per share (the "Class A Shares"), of each series of the Fund (the
"Series"), and the Board of Directors has determined that there is a reasonable
likelihood that adoption of the Plan will benefit each Series and its
stockholders; and
WHEREAS, pursuant to a Distribution Agreement, the Fund employs GAM Services
Inc. (the "Distributor") as distributor for the continuous offering of Class A
Shares.
NOW, THEREFORE, the Fund hereby adopts a Plan of Distribution on the terms set
forth below (the "Plan").
1. The Fund and each Series shall pay to the Distributor, as distributor of the
Class A Shares, or any successor of the Distributor authorised to act as
distributor for the Fund, compensation for distribution of the Class A Shares at
the annual rate of .30% of the average daily value of the net assets of each
Series attributable to the Class A Shares. The amount of such compensation shall
be calculated and accrued daily and paid monthly or at such other intervals as
the Board of Directors and the Distributor shall mutually agree.
2. The amount set forth in Paragraph 1 of this Plan shall be paid for the
Distributor's services as distributor of the Class A Shares. Such amount may be
spent by the Distributor on any activities or to pay any expenses primarily
intended to result in the sale of Class A Shares, including, but not limited to,
compensation to and expenses of employees of the Distributor who engage in or
support distribution of the Class A Shares; including overhead and telephone
expenses of such employees, printing of prospectuses and reports for other than
existing stockholders; preparation, printing and distribution of sales
literature and advertising materials; compensation to broker/dealers who sell
Class A Shares, and such other similar services that the Directors determine are
reasonably calculated to result in sales of Class A Shares of the Fund; provided
however, that any portion of such amount paid to the Distributor, which portion
shall be equal to or less than .25% annually of the average daily net assets of
the Fund's Class A Shares, may represent compensation for personal service to
shareholders and/or maintenance of shareholder accounts (the "Service Fee"). The
Distributor may negotiate with selling broker/dealers for distribution and
personal services to be provided by the broker/dealer to investors and
stockholders in connection with the sale and holding of Class A Shares, and all
or any portion of the compensation paid to the Distributor under Paragraph 1 of
this Plan may be reallocated by the Distributor to broker/dealers who sell Class
A Shares in the form of distribution fees or a combination of Service Fees and
distribution fees.
<PAGE>
3. This Plan shall not take effect with respect to any Series until it has been
approved by a vote of at least a majority (as defined in the 1940 Act) of the
outstanding Class A Shares of such Series.
4. In addition to the approval required by paragraph 3 above, the Plan shall not
take effect with respect to each Series until it has been approved, together
with any related agreements, by votes of a majority of both (a) the Board of
Directors of the Fund and (b) those Directors of the Fund who are not
"interested persons" of the Fund (as defined in the 1940 Act) and have no direct
or indirect financial interest in the operation of this Plan or any agreements
related to it (the "Rule 12b-1 Directors") cast in person at a meeting (or
meetings) called for the purpose of voting on this Plan and such related
agreements.
5. This Plan shall continue in effect for one year from the date of its
adoption, and thereafter the Plan shall continue in effect for so long as such
continuance is specifically approved at least annually in the manner provided
for approval of this Plan in Paragraph 4.
6. At least quarterly in each year that this Plan remains in effect, the Fund's
Principal Accounting Officer or Treasurer, or such other person authorised to
direct the disposition of monies paid or payable by each Fund, shall, with the
assistance of the Distributor, prepare and furnish to the Board of Directors of
the Fund, for their review, a written report of the amounts expended pursuant to
this Plan and the purposes for which such expenditures were made, including
payment of commissions, advertising, printing, and interest expense, carrying
charges and allocated overhead expenses.
7. All amounts expended under this Plan for the benefit of the Class A Shares of
a specific Series as to which this Plan is effective will be charged to the
Class A Shares of the Series, and any expenses pursuant to this Plan which are
deemed by the Board of Directors of the Fund to benefit all such Series equally
will be charged to the Class A Shares of each such Series on the basis of the
net asset value of the Class A Shares of such Series in relation to the net
asset value of all of the outstanding Class A Shares of the Fund.
8. This Plan may be terminated with respect to the Class A Shares of any Series
at any time by vote of a majority of the Rule 12b-1 Directors, or by a vote of a
majority of the outstanding Class A shareholders of such Series
9. This Plan may be amended at any time by the Board of Directors of the Fund,
provided that any amendment to increase materially the amount to be expended by
any Series of the Fund for distribution shall be effective only upon approval by
shareholders of such Series of such amendment in the manner provided for initial
approval in Paragraph 3 hereof, and any material amendments to the Plan shall be
effective only upon approval by the Directors in the manner provided for
approval on annual renewal in Paragraphs 4 and 5 hereof.
10. While this Plan is in effect, the selection and nomination of Directors who
are not interested persons (as defined in the 1940 Act) of the Fund shall be
committed to the discretion of the then current Directors who are not interested
persons (as defined in the 1940 Act) of the Fund.
11. Any agreement related to this Plan shall provide (i) that such agreement may
be terminated with respect to the Class A Shares of any Series at any time,
without payment of any penalty, by vote of a majority of the outstanding voting
securities of such Series, on not more than sixty (60) days' written notice to
any other party to the agreement; and (ii) that such agreement shall terminate
automatically in the event of its assignment.
<PAGE>
12. In the event of an exchange between Series of the Fund, the Series into
which the assets are transferred may adjust its remaining account balance of
12b-1 carryforwards in a manner consistent with adjustments for new sales;
provided however, that the Series from which such balance is "transferred" has a
sufficient remaining balance and such arrangement is otherwise conducted in
accordance with Section 26(d)(2)(D) of the NASD's Rules of Fair Practice and the
carryforward arrangement is implemented in accordance with this Plan.
13. The Fund shall preserve copies of this Plan and any related agreements and
all reports made pursuant to Paragraph 6 hereof for a period of not less than
six (6) years from the date of the Plan, such agreements or such reports, as the
case may be, the first two (2) years in an easily accessible place.
GAM FUNDS, INC.
Dated:__________________________ By:______________________________
Title:____________________________
.
Exhibit 16
GAM ASIAN CAPITAL FUND
PRICE DATA
Date Div. Amount Price Factor Acc. Factor Adj. Price
5/12/95 100.00 1.0000 100.00
12/18/95 83.8800 9.32 10.0000 10.0000
12/26/95 0.0443 9.41 1.0047 10.0471
12/31/95 9.53 10.0471 95.75
8/12/96 0.0120 9.58 1.0013 10.0597
12/31/96 9.83 10.0597 98.89
AVERAGE ANNUAL RETURNS
With 0.5% sales load
1 Year 3.28% -1.89%
Since incept. -0.68% -3.74%
GAMERICA CAPITAL FUND
PRICE DATA
Date Div. amount Price Factor Acc. factor Adj. price
5/12/95 100.00 1.0000 100.00
12/18/95 89.9100 9.99 10.0000 10.0000
12/26/95 0.1070 9.97 1.0107 10.1073
12/31/95 10.03 10.1073 101.38
12/23/96 1.0100 10.44 1.0967 11.0851
12/31/96 10.82 11.0851 119.94
AVERAGE ANNUAL RETURNS
With 0.5% sales load
1 Year 18.31% 12.40%
Since incept. 11.73% 8.28%
GAM EUROPE FUND
PRICE DATA
Date Div. amount Price Factor Acc. factor Adj. price
1/1/90 100.00 1.0000 100.00
12/31/91 83.34 1.0000 83.34
1/2/92 6.0000 76.99 1.0779 1.0779
3/16/92 0.1600 72.44 1.0022 1.0803
1/4/93 0.5400 72.28 1.0075 1.0884
12/18/95 88.2000 9.80 10.0000 10.8838
12/26/95 0.0658 9.91 1.0066 10.9561
12/31/95 10.04 10.9561 110.00
8/12/96 0.1180 11.08 1.0106 11.0728
12/23/96 0.1990 11.69 1.0170 11.2613
12/31/96 11.85 11.2613 133.45
AVERAGE ANNUAL RETURNS
With 0.5% sales load
1 Year 21.32% 15.25%
5 Year 9.87% 8.75%
Since incept. 4.21% 3.45%
GAM GLOBAL FUND (CLD)
PRICE DATA
Date Div. amount Price Factor Acc. factor Adj. price
10/6/95 134.92 1.0000 134.92
12/18/95 127.1700 14.13 10.0000 10.0000
12/26/95 0.9024 13.31 1.0678 10.6780
12/31/95 13.48 10.6780 143.94
8/12/96 0.0350 13.35 1.0026 10.7060
12/23/96 0.7680 14.08 1.0545 11.2899
12/31/96 14.22 11.2899 160.54
AVERAGE ANNUAL RETURNS
With 0.35% sales load
1 Year 11.53% 7.63%
Since incept. 15.09% 11.82%
<PAGE>
GAM GLOBAL FUND (CLA)
PRICE DATA
Date Div. amount Price Factor Acc. factor Adj. price
5/28/86 100.00 1.0000 100.00
12/31/86 104.69 1.0000 104.69
12/21/87 9.5600 92.72 1.1031 1.1031
3/18/88 4.2500 94.46 1.0450 1.1527
5/19/89 2.8100 108.45 1.0259 1.1826
12/20/89 2.6100 126.83 1.0206 1.2069
2/27/90 0.5100 125.67 1.0041 1.2118
12/28/90 13.2600 102.49 1.1294 1.3686
12/31/91 113.73 1.3686 155.65
1/2/92 4.3700 108.99 1.0401 1.4235
3/16/92 0.9700 100.87 1.0096 1.4372
1/4/93 1.0500 103.94 1.0101 1.4517
1/3/94 6.0500 174.34 1.0347 1.5021
7/1/94 13.3500 136.91 1.0975 1.6486
12/20/94 26.3500 105.92 1.2488 2.0587
8/22/95 0.0510 129.38 1.0004 2.0595
12/18/95 127.6200 14.18 10.0000 20.5948
12/26/95 0.9111 13.36 1.0682 21.9993
12/31/95 13.51 21.9993 297.21
8/12/96 0.0350 13.54 1.0026 22.0562
12/23/96 0.8340 14.21 1.0587 23.3507
12/31/96 14.35 23.3507 335.08
AVERAGE ANNUAL RETURNS
With 0.5% sales load
1 Year 12.74% 7.11%
5 Year 16.57% 15.38%
10 Year 12.34% 11.76%
Since incept. 12.09% 11.55%
GAM PACIFIC BASIN FUND (CLA)
PRICE DATA
Date Div. amount Price Factor Acc. factor Adj. price
5/6/87 100.00 1.0000 100.00
12/20/89 3.4500 137.36 1.0251 1.0251
2/27/90 7.7000 123.98 1.0621 1.0888
12/28/90 3.5800 119.42 1.0300 1.1214
3/12/91 1.4100 131.13 1.0108 1.1335
12/31/91 137.72 1.1335 156.11
1/2/92 4.6200 133.49 1.0346 1.1727
3/16/92 1.2100 125.04 1.0097 1.1841
1/4/93 3.9400 126.72 1.0311 1.2209
4/13/93 0.8000 150.80 1.0053 1.2274
1/3/94 9.6500 182.54 1.0529 1.2922
7/1/94 8.8500 185.81 1.0476 1.3538
12/20/94 10.4300 170.53 1.0612 1.4366
8/22/95 6.1620 171.32 1.0360 1.4883
12/18/95 156.5100 17.39 10.0000 14.8825
12/26/95 0.8015 16.89 1.0475 15.5888
12/31/95 16.97 15.5888 264.54
8/12/96 0.1610 16.83 1.0096 15.7379
12/23/96 1.4720 15.14 1.0972 17.2680
12/31/96 15.26 17.2680 263.51
AVERAGE ANNUAL RETURNS
With 0.5% sales load
1 Year -0.39% -5.37%
5 Year 11.04% 9.91%
Since incept. 10.55% 9.97%
GAM INTERNATIONAL FUND (CLD)
PRICE DATA
Date Div. amount Price Factor Acc. factor Adj. price
9/18/95 204.46 1.0000 204.46
12/18/95 199.1700 22.13 10.0000 10.0000
12/26/95 0.9925 21.12 1.0470 10.4699
12/31/95 21.35 10.4699 223.53
8/12/96 0.0424 20.78 1.0020 10.4913
12/23/96 0.0120 22.53 1.0005 10.4969
12/31/96 23.07 10.4969 242.16
AVERAGE ANNUAL RETURNS
With 0.35% sales load
1 Year 8.33% 4.54%
5 Year 14.06% 10.94%
Since incept.
GAM INTERNATIONAL FUND (CLA)
PRICE DATA
Date Div. amount Price Factor Acc. factor Adj. price
1/2/85 100.00 1.0000 100.00
3/7/86 12.4000 171.98 1.0721 1.0721
12/31/86 219.12 1.0721 234.92
2/17/87 64.7700 175.43 1.3692 1.4679
12/28/87 46.3500 132.75 1.3492 1.9805
4/8/88 5.3900 132.27 1.0407 2.0612
12/22/88 7.0000 146.15 1.0479 2.1599
5/19/89 1.5400 141.04 1.0109 2.1835
12/20/89 8.7000 161.83 1.0538 2.3009
2/27/90 0.9400 162.72 1.0058 2.3141
12/28/90 28.1200 128.60 1.2187 2.8202
3/12/91 0.1300 135.42 1.0010 2.8229
12/31/91 148.63 2.8229 419.57
1/2/92 7.3300 141.05 1.0520 2.9696
1/4/93 12.8700 133.34 1.0965 3.2562
1/3/94 18.9000 222.66 1.0849 3.5326
7/1/94 7.0900 191.12 1.0371 3.6636
12/20/94 18.5400 170.93 1.1085 4.0610
12/18/95 199.5300 22.17 10.0000 40.6101
12/26/95 1.0032 21.15 1.0474 42.5363
12/31/95 21.37 42.5363 909.00
8/12/96 0.0426 20.89 1.0020 42.6231
12/23/96 0.0900 22.59 1.0040 42.7929
12/31/96 23.15 42.7929 990.66
AVERAGE ANNUAL RETURNS
With 0.5% sales load
1 Year 8.98% 3.53%
5 Year 18.75% 17.54%
10 Year 15.48% 14.89%
Since incept. 21.07% 20.55%
<PAGE>
GAM JAPAN CAPITAL FUND
PRICE DATA
Date Div. amount Price Factor Acc. factor Adj. price
7/1/94 100.00 1.0000 100.00
8/22/95 0.7680 93.99 1.0082 1.0082
12/18/95 88.5600 9.84 10.0000 10.0817
12/31/95 10.16 10.0817 102.43
8/12/96 0.0870 10.41 1.0084 10.1660
12/23/96 0.6950 9.31 1.0747 10.9249
12/31/96 9.39 10.9249 102.58
AVERAGE ANNUAL RETURNS
With 0.5% sales load
1 Year 0.15% -4.86%
5 Year 1.03% -1.02%
Since incept.
GAM NORTH AMERICA FUND
PRICE DATA
Date Div. amount Price Factor Acc. factor Adj. price
1/1/90 100.00 1.0000 100.00
12/31/91 133.49 1.0000 133.49
1/2/92 0.4100 133.12 1.0031 1.0031
1/4/93 5.6100 130.64 1.0429 1.0462
1/3/94 37.3500 90.68 1.4119 1.4771
12/20/94 1.9000 91.42 1.0208 1.5078
12/18/95 107.1000 11.90 10.0000 15.0775
12/26/95 0.0363 11.88 1.0031 15.1236
12/31/95 11.93 15.1236 180.42
12/23/96 1.2530 13.65 1.0918 16.5118
12/31/96 13.56 16.5118 223.90
AVERAGE ANNUAL RETURNS
With 0.5% sales load
1 Year 24.10% 17.89%
5 Year 10.90% 9.77%
Since incept. 12.21% 11.39%
GAM PACIFIC BASIN FUND (CLD)
PRICE DATA
Date Div. amount Price Factor Acc. factor Adj. price
10/18/95 173.77 1.0000 173.77
12/18/95 156.4200 17.38 10.0000 10.0000
12/26/95 0.7983 16.87 1.0473 10.4732
12/31/95 16.96 10.4732 177.63
8/12/96 0.1610 16.74 1.0096 10.5739
12/23/96 1.3870 15.08 1.0920 11.5465
12/31/96 15.20 11.5465 175.51
AVERAGE ANNUAL RETURNS
With 0.35% sales load
1 Year -1.19% -4.65%
Since incept. 0.83% -2.11%
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 011
<NAME> GAM Asian Capital
<S> <C>
<PERIOD-TYPE> Year
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-START> Jan-01-1996
<PERIOD-END> Dec-31-1996
<INVESTMENTS-AT-COST> 5,667,296
<INVESTMENTS-AT-VALUE> 5,701,575
<RECEIVABLES> 60,886
<ASSETS-OTHER> 49,101
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 5,811,562
<PAYABLE-FOR-SECURITIES> 47,405
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 134,898
<TOTAL-LIABILITIES> 182,303
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5,748,274
<SHARES-COMMON-STOCK> 572,668
<SHARES-COMMON-PRIOR> 583,625
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (129,251)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (23,991)
<ACCUM-APPREC-OR-DEPREC> 34,227
<NET-ASSETS> 5,629,259
<DIVIDEND-INCOME> 124,254
<INTEREST-INCOME> 5,149
<OTHER-INCOME> 0
<EXPENSES-NET> 179,498
<NET-INVESTMENT-INCOME> (50,095)
<REALIZED-GAINS-CURRENT> (84,553)
<APPREC-INCREASE-CURRENT> 235,381
<NET-CHANGE-FROM-OPS> 100,733
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 8,786
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4,143,499
<NUMBER-OF-SHARES-REDEEMED> 4,168,114
<SHARES-REINVESTED> 1,512
<NET-CHANGE-IN-ASSETS> (23,103)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (4,819)
<OVERDIST-NET-GAINS-PRIOR> (6,018)
<GROSS-ADVISORY-FEES> 66,992
<INTEREST-EXPENSE> 1,798
<GROSS-EXPENSE> 179,498
<AVERAGE-NET-ASSETS> 6,662,597
<PER-SHARE-NAV-BEGIN> 9.53
<PER-SHARE-NII> (.07)
<PER-SHARE-GAIN-APPREC> .38
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (.01)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.83
<EXPENSE-RATIO> 2.98
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 021
<NAME> GAMerica Capital
<S> <C>
<PERIOD-TYPE> Year
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-START> Jan-01-1996
<PERIOD-END> Dec-31-1996
<INVESTMENTS-AT-COST> 1,730,650
<INVESTMENTS-AT-VALUE> 1,906,404
<RECEIVABLES> 109,311
<ASSETS-OTHER> 18,765
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2,034,480
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 110,470
<TOTAL-LIABILITIES> 110,470
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,712,447
<SHARES-COMMON-STOCK> 177,778
<SHARES-COMMON-PRIOR> 302,061
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 35,810
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 175,753
<NET-ASSETS> 1,924,010
<DIVIDEND-INCOME> 23,063
<INTEREST-INCOME> 5,416
<OTHER-INCOME> 0
<EXPENSES-NET> 116,425
<NET-INVESTMENT-INCOME> (87,946)
<REALIZED-GAINS-CURRENT> 292,631
<APPREC-INCREASE-CURRENT> 175,800
<NET-CHANGE-FROM-OPS> 380,485
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (169,707)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 269,201
<NUMBER-OF-SHARES-REDEEMED> 1,687,583
<SHARES-REINVESTED> 102,358
<NET-CHANGE-IN-ASSETS> (1,316,024)
<ACCUMULATED-NII-PRIOR> 832
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 23,247
<INTEREST-EXPENSE> 3,153
<GROSS-EXPENSE> 116,425
<AVERAGE-NET-ASSETS> 2,318,118
<PER-SHARE-NAV-BEGIN> 10.03
<PER-SHARE-NII> (.42)
<PER-SHARE-GAIN-APPREC> 2.22
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (1.01)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.82
<EXPENSE-RATIO> 5.16
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 031
<NAME> GAM Europe
<S> <C>
<PERIOD-TYPE> Year
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-START> Jan-01-1996
<PERIOD-END> Dec-31-1996
<INVESTMENTS-AT-COST> 21,284,220
<INVESTMENTS-AT-VALUE> 25,397,695
<RECEIVABLES> 189,844
<ASSETS-OTHER> 81,923
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 25,669,462
<PAYABLE-FOR-SECURITIES> 81,815
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 460,242
<TOTAL-LIABILITIES> 542,057
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 20,432,750
<SHARES-COMMON-STOCK> 2,119,727
<SHARES-COMMON-PRIOR> 2,286,870
<ACCUMULATED-NII-CURRENT> 208,492
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 412,603
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 4,073,560
<NET-ASSETS> 25,127,405
<DIVIDEND-INCOME> 558,265
<INTEREST-INCOME> 21,966
<OTHER-INCOME> 0
<EXPENSES-NET> 422,343
<NET-INVESTMENT-INCOME> 157,888
<REALIZED-GAINS-CURRENT> 1,945,168
<APPREC-INCREASE-CURRENT> 2,542,288
<NET-CHANGE-FROM-OPS> 4,645,344
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (12,643)
<DISTRIBUTIONS-OF-GAINS> (709,600)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 12,022,756
<NUMBER-OF-SHARES-REDEEMED> 14,322,808
<SHARES-REINVESTED> 542,923
<NET-CHANGE-IN-ASSETS> (1,757,129)
<ACCUMULATED-NII-PRIOR> 11,543
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (772,747)
<GROSS-ADVISORY-FEES> 270,703
<INTEREST-EXPENSE> 1,903
<GROSS-EXPENSE> 422,343
<AVERAGE-NET-ASSETS> 26,922,209
<PER-SHARE-NAV-BEGIN> 10.04
<PER-SHARE-NII> .07
<PER-SHARE-GAIN-APPREC> 2.06
<PER-SHARE-DIVIDEND> (.01)
<PER-SHARE-DISTRIBUTIONS> (.31)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.85
<EXPENSE-RATIO> 1.89
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 041
<NAME> GAM Global Class A
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> Year
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-START> Jan-01-1996
<PERIOD-END> Dec-31-1996
<INVESTMENTS-AT-COST> 16,455,183
<INVESTMENTS-AT-VALUE> 20,183,605
<RECEIVABLES> 839,510
<ASSETS-OTHER> 307,621
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 21,330,736
<PAYABLE-FOR-SECURITIES> 719,959
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 212,514
<TOTAL-LIABILITIES> 932,473
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 16,609,034
<SHARES-COMMON-STOCK> 1,364,575
<SHARES-COMMON-PRIOR> 1,936,065
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (90,362)
<ACCUMULATED-NET-GAINS> 19,717
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3,859,874
<NET-ASSETS> 20,398,263
<DIVIDEND-INCOME> 397,950
<INTEREST-INCOME> 302,123
<OTHER-INCOME> 0
<EXPENSES-NET> 463,727
<NET-INVESTMENT-INCOME> 236,346
<REALIZED-GAINS-CURRENT> 1,542,721
<APPREC-INCREASE-CURRENT> 292,207
<NET-CHANGE-FROM-OPS> 2,071,274
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (104,667)
<DISTRIBUTIONS-OF-GAINS> (1,034,220)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 11,907,144
<NUMBER-OF-SHARES-REDEEMED> 20,228,744
<SHARES-REINVESTED> 915,513
<NET-CHANGE-IN-ASSETS> (6,945,972)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (4,787)
<OVERDIST-NET-GAINS-PRIOR> (665,695)
<GROSS-ADVISORY-FEES> 206,365
<INTEREST-EXPENSE> 27,240
<GROSS-EXPENSE> 463,727
<AVERAGE-NET-ASSETS> 20,514,200
<PER-SHARE-NAV-BEGIN> 13.51
<PER-SHARE-NII> .16
<PER-SHARE-GAIN-APPREC> 1.55
<PER-SHARE-DIVIDEND> (.08)
<PER-SHARE-DISTRIBUTIONS> (.79)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.35
<EXPENSE-RATIO> 2.26
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 044
<NAME> GAM Global D
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> Year
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-START> Jan-01-1996
<PERIOD-END> Dec-31-1996
<INVESTMENTS-AT-COST> 16,455,183
<INVESTMENTS-AT-VALUE> 20,183,605
<RECEIVABLES> 839,510
<ASSETS-OTHER> 307,621
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 21,330,736
<PAYABLE-FOR-SECURITIES> 719,959
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 212,514
<TOTAL-LIABILITIES> 932,473
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 16,609,034
<SHARES-COMMON-STOCK> 57,348
<SHARES-COMMON-PRIOR> 21,880
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (90,362)
<ACCUMULATED-NET-GAINS> 19,717
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3,859,874
<NET-ASSETS> 20,398,263
<DIVIDEND-INCOME> 397,950
<INTEREST-INCOME> 302,123
<OTHER-INCOME> 0
<EXPENSES-NET> 463,727
<NET-INVESTMENT-INCOME> 236,346
<REALIZED-GAINS-CURRENT> 1,542,721
<APPREC-INCREASE-CURRENT> 292,207
<NET-CHANGE-FROM-OPS> 2,071,274
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (765)
<DISTRIBUTIONS-OF-GAINS> (43,139)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 697,624
<NUMBER-OF-SHARES-REDEEMED> 275,959
<SHARES-REINVESTED> 38,450
<NET-CHANGE-IN-ASSETS> (6,945,972)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (4,787)
<OVERDIST-NET-GAINS-PRIOR> (665,695)
<GROSS-ADVISORY-FEES> 206,365
<INTEREST-EXPENSE> 27,240
<GROSS-EXPENSE> 463,727
<AVERAGE-NET-ASSETS> 20,514,200
<PER-SHARE-NAV-BEGIN> 13.48
<PER-SHARE-NII> .07
<PER-SHARE-GAIN-APPREC> 1.47
<PER-SHARE-DIVIDEND> (.01)
<PER-SHARE-DISTRIBUTIONS> (.79)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.22
<EXPENSE-RATIO> 2.88
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 051
<NAME> GAM International Class A
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> Year
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-START> Jan-01-1996
<PERIOD-END> Dec-31-1996
<INVESTMENTS-AT-COST> 925,779,673
<INVESTMENTS-AT-VALUE> 1,050,491,997
<RECEIVABLES> 36,961,473
<ASSETS-OTHER> 24,923,965
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,112,377,435
<PAYABLE-FOR-SECURITIES> 58,330,988
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 5,511,115
<TOTAL-LIABILITIES> 63,842,103
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 918,545,454
<SHARES-COMMON-STOCK> 43,624,803
<SHARES-COMMON-PRIOR> 26,210,037
<ACCUMULATED-NII-CURRENT> 7,848,354
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (4,551,076)
<ACCUM-APPREC-OR-DEPREC> 126,692,600
<NET-ASSETS> 1,048,535,332
<DIVIDEND-INCOME> 18,133,591
<INTEREST-INCOME> 18,641,259
<OTHER-INCOME> 0
<EXPENSES-NET> 13,422,789
<NET-INVESTMENT-INCOME> 23,352,061
<REALIZED-GAINS-CURRENT> (3,924,932)
<APPREC-INCREASE-CURRENT> 75,798,692
<NET-CHANGE-FROM-OPS> 95,225,821
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (3,931,303)
<DISTRIBUTIONS-OF-GAINS> (1,784,396)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 692,156,317
<NUMBER-OF-SHARES-REDEEMED> 333,081,923
<SHARES-REINVESTED> 4,843,204
<NET-CHANGE-IN-ASSETS> 390,160,627
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (43,392)
<OVERDIST-NET-GAINS-PRIOR> (10,356,368)
<GROSS-ADVISORY-FEES> 8,746,443
<INTEREST-EXPENSE> 170,110
<GROSS-EXPENSE> 13,422,789
<AVERAGE-NET-ASSETS> 869,911,674
<PER-SHARE-NAV-BEGIN> 21.37
<PER-SHARE-NII> .57
<PER-SHARE-GAIN-APPREC> 1.34
<PER-SHARE-DIVIDEND> (.09)
<PER-SHARE-DISTRIBUTIONS> (.04)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 23.15
<EXPENSE-RATIO> 1.56
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 054
<NAME> GAM International Class D
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> Year
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-START> Jan-01-1996
<PERIOD-END> Dec-31-1996
<INVESTMENTS-AT-COST> 925,779,673
<INVESTMENTS-AT-VALUE> 1,050,491,997
<RECEIVABLES> 36,961,473
<ASSETS-OTHER> 24,923,965
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,112,377,435
<PAYABLE-FOR-SECURITIES> 58,330,988
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 5,511,115
<TOTAL-LIABILITIES> 63,842,103
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 918,545,454
<SHARES-COMMON-STOCK> 1,677,964
<SHARES-COMMON-PRIOR> 408,164
<ACCUMULATED-NII-CURRENT> 7,848,354
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (4,551,076)
<ACCUM-APPREC-OR-DEPREC> 126,692,600
<NET-ASSETS> 1,048,535,332
<DIVIDEND-INCOME> 18,133,591
<INTEREST-INCOME> 18,641,259
<OTHER-INCOME> 0
<EXPENSES-NET> 13,422,789
<NET-INVESTMENT-INCOME> 23,352,061
<REALIZED-GAINS-CURRENT> (3,924,932)
<APPREC-INCREASE-CURRENT> 75,798,692
<NET-CHANGE-FROM-OPS> 95,225,821
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (20,209)
<DISTRIBUTIONS-OF-GAINS> (63,253)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 30,255,446
<NUMBER-OF-SHARES-REDEEMED> 4,091,392
<SHARES-REINVESTED> 78,975
<NET-CHANGE-IN-ASSETS> 390,160,627
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (43,392)
<OVERDIST-NET-GAINS-PRIOR> (10,356,368)
<GROSS-ADVISORY-FEES> 8,746,443
<INTEREST-EXPENSE> 170,110
<GROSS-EXPENSE> 13,422,789
<AVERAGE-NET-ASSETS> 869,911,674
<PER-SHARE-NAV-BEGIN> 21.35
<PER-SHARE-NII> .45
<PER-SHARE-GAIN-APPREC> 1.32
<PER-SHARE-DIVIDEND> (.01)
<PER-SHARE-DISTRIBUTIONS> (.04)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 23.07
<EXPENSE-RATIO> 2.06
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<MULTIPLIER> 1
<SERIES>
<NUMBER> 061
<NAME> GAM Japan Capital
<S> <C>
<PERIOD-TYPE> Year
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-START> Jan-01-1996
<PERIOD-END> Dec-31-1996
<INVESTMENTS-AT-COST> 37,611,928
<INVESTMENTS-AT-VALUE> 33,918,703
<RECEIVABLES> 916,257
<ASSETS-OTHER> 2,124,722
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 36,959,682
<PAYABLE-FOR-SECURITIES> 75,193
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 367,636
<TOTAL-LIABILITIES> 442,829
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 40,622,921
<SHARES-COMMON-STOCK> 3,887,548
<SHARES-COMMON-PRIOR> 1,338,243
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (464,007)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (600,140)
<ACCUM-APPREC-OR-DEPREC> (3,041,921)
<NET-ASSETS> 36,516,853
<DIVIDEND-INCOME> 135,904
<INTEREST-INCOME> 196,086
<OTHER-INCOME> 0
<EXPENSES-NET> 505,040
<NET-INVESTMENT-INCOME> (173,050)
<REALIZED-GAINS-CURRENT> 3,411,826
<APPREC-INCREASE-CURRENT> (4,080,940)
<NET-CHANGE-FROM-OPS> (842,164)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (2,786,341)
<DISTRIBUTIONS-OF-GAINS> (326,642)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 43,069,239
<NUMBER-OF-SHARES-REDEEMED> 18,398,865
<SHARES-REINVESTED> 2,201,623
<NET-CHANGE-IN-ASSETS> 26,871,997
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (135,627)
<OVERDIST-NET-GAINS-PRIOR> (1,054,318)
<GROSS-ADVISORY-FEES> 350,646
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 505,040
<AVERAGE-NET-ASSETS> 34,913,659
<PER-SHARE-NAV-BEGIN> 10.16
<PER-SHARE-NII> (.05)
<PER-SHARE-GAIN-APPREC> .07
<PER-SHARE-DIVIDEND> (.70)
<PER-SHARE-DISTRIBUTIONS> (.09)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.39
<EXPENSE-RATIO> 1.84
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<MULTIPLIER> 1
<SERIES>
<NUMBER> 071
<NAME> GAM North America
<S> <C>
<PERIOD-TYPE> Year
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-START> Jan-01-1996
<PERIOD-END> Dec-31-1996
<INVESTMENTS-AT-COST> 3,991,629
<INVESTMENTS-AT-VALUE> 5,910,984
<RECEIVABLES> 10,829
<ASSETS-OTHER> 52
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 5,921,865
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 69,042
<TOTAL-LIABILITIES> 69,042
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 3,899,139
<SHARES-COMMON-STOCK> 431,612
<SHARES-COMMON-PRIOR> 501,427
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 34,330
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,919,354
<NET-ASSETS> 5,852,823
<DIVIDEND-INCOME> 119,746
<INTEREST-INCOME> 2,472
<OTHER-INCOME> 0
<EXPENSES-NET> 144,065
<NET-INVESTMENT-INCOME> (21,847)
<REALIZED-GAINS-CURRENT> 562,745
<APPREC-INCREASE-CURRENT> 710,420
<NET-CHANGE-FROM-OPS> 1,251,318
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (506,891)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 911,748
<NUMBER-OF-SHARES-REDEEMED> 2,144,715
<SHARES-REINVESTED> 360,609
<NET-CHANGE-IN-ASSETS> (872,358)
<ACCUMULATED-NII-PRIOR> 323
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 57,701
<INTEREST-EXPENSE> 1,167
<GROSS-EXPENSE> 144,065
<AVERAGE-NET-ASSETS> 5,639,712
<PER-SHARE-NAV-BEGIN> 11.93
<PER-SHARE-NII> (.05)
<PER-SHARE-GAIN-APPREC> 2.93
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (1.25)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.56
<EXPENSE-RATIO> 2.61
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 081
<NAME> GAM Pacific Basin Class A
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> Year
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-START> Jan-01-1996
<PERIOD-END> Dec-31-1996
<INVESTMENTS-AT-COST> 56,276,816
<INVESTMENTS-AT-VALUE> 52,765,239
<RECEIVABLES> 5,132,250
<ASSETS-OTHER> 3,187,489
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 61,084,978
<PAYABLE-FOR-SECURITIES> 3,221,724
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 6,177,441
<TOTAL-LIABILITIES> 9,399,165
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 53,917,920
<SHARES-COMMON-STOCK> 3,263,162
<SHARES-COMMON-PRIOR> 3,177,928
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (264,594)
<ACCUMULATED-NET-GAINS> 772,747
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (2,740,260)
<NET-ASSETS> 51,685,813
<DIVIDEND-INCOME> 1,062,409
<INTEREST-INCOME> 130,565
<OTHER-INCOME> 0
<EXPENSES-NET> 1,056,221
<NET-INVESTMENT-INCOME> 136,753
<REALIZED-GAINS-CURRENT> 7,490,904
<APPREC-INCREASE-CURRENT> (9,000,460)
<NET-CHANGE-FROM-OPS> (1,372,803)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (2,363,071)
<DISTRIBUTIONS-OF-GAINS> (3,041,344)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 43,289,379
<NUMBER-OF-SHARES-REDEEMED> 44,771,351
<SHARES-REINVESTED> 4,074,012
<NET-CHANGE-IN-ASSETS> 3,147,400
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (30,461)
<OVERDIST-NET-GAINS-PRIOR> (1,547,026)
<GROSS-ADVISORY-FEES> 710,064
<INTEREST-EXPENSE> 16,161
<GROSS-EXPENSE> 1,056,221
<AVERAGE-NET-ASSETS> 70,618,413
<PER-SHARE-NAV-BEGIN> 16.97
<PER-SHARE-NII> .04
<PER-SHARE-GAIN-APPREC> (.11)
<PER-SHARE-DIVIDEND> (.74)
<PER-SHARE-DISTRIBUTIONS> (.90)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 15.26
<EXPENSE-RATIO> 1.76
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 084
<NAME> GAM Pacific Basin Class D
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> Year
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-START> Jan-01-1996
<PERIOD-END> Dec-31-1996
<INVESTMENTS-AT-COST> 56,276,816
<INVESTMENTS-AT-VALUE> 52,765,239
<RECEIVABLES> 5,132,250
<ASSETS-OTHER> 3,187,489
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 61,084,978
<PAYABLE-FOR-SECURITIES> 3,221,724
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 6,177,441
<TOTAL-LIABILITIES> 9,399,165
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 53,917,920
<SHARES-COMMON-STOCK> 123,601
<SHARES-COMMON-PRIOR> 91,183
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (264,594)
<ACCUMULATED-NET-GAINS> 772,747
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (2,740,260)
<NET-ASSETS> 51,685,813
<DIVIDEND-INCOME> 1,062,409
<INTEREST-INCOME> 130,565
<OTHER-INCOME> 0
<EXPENSES-NET> 1,056,221
<NET-INVESTMENT-INCOME> 136,753
<REALIZED-GAINS-CURRENT> 7,490,904
<APPREC-INCREASE-CURRENT> (9,000,460)
<NET-CHANGE-FROM-OPS> (1,372,803)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (73,778)
<DISTRIBUTIONS-OF-GAINS> (101,996)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 907,532
<NUMBER-OF-SHARES-REDEEMED> 370,106
<SHARES-REINVESTED> 17,934
<NET-CHANGE-IN-ASSETS> 3,147,400
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (30,461)
<OVERDIST-NET-GAINS-PRIOR> (1,547,026)
<GROSS-ADVISORY-FEES> 710,064
<INTEREST-EXPENSE> 16,161
<GROSS-EXPENSE> 1,056,221
<AVERAGE-NET-ASSETS> 70,618,413
<PER-SHARE-NAV-BEGIN> 16.96
<PER-SHARE-NII> (.10)
<PER-SHARE-GAIN-APPREC> (.11)
<PER-SHARE-DIVIDEND> (.65)
<PER-SHARE-DISTRIBUTIONS> (.90)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 15.20
<EXPENSE-RATIO> 2.28
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
Exhibit 18
GAM FUNDS, INC.
RULE 18f-3 MULTIPLE CLASS PLAN
FOR CLASS A AND CLASS D SHARES
I. INTRODUCTION
A. AUTHORITY. This Rule 18f-3 Multiple Class Plan, as amended (the
"Plan") is adopted by the Board of Directors (the "Board") of GAM Funds, Inc.
(the "Fund"), including a majority of the Directors of the Fund who are not
"interested persons" of the Fund as defined in the Investment Company Act of
1940, as amended (the "1940 Act") (the "Independent Directors"), pursuant to
Rule 18f-3 under the 1940 Act.
B. PLAN REQUIREMENTS. The Fund currently has two classes of shares,
Class A Shares and Class D Shares, authorized for each series of Common Stock
(the "Series"). Pursuant to Rule 18f-3, the Fund is required to adopt a written
plan specifying all of the differences between the Fund's Class A and Class D
Shares, including shareholder services, distribution arrangements, expense
allocations, and any related conversion features or exchange options. Before the
first issuance of Class D Shares of any Series, and before any material
amendment of the Plan, a majority of the Board, and a majority of the
independent Directors, must find that the Plan, as proposed to be adopted or
amended, including the expense allocations, is in the best interests of each
class individually and the Fund as a whole. In making its findings, the Board
should consider the relationship between the classes and examine potential
conflicts of interest between the classes regarding the allocation of fees,
services, waivers and reimbursements of expenses, and voting rights. The Board
should evaluate the level of services provided to each class and the cost of
those services to ensure that the services are appropriate and that the
allocation of expenses is reasonable.
II. ATTRIBUTES OF SHARE CLASSES
The shares of each class of a particular Series represent an equal pro
rata interest in the Series and have identical voting, dividend, liquidation and
other rights, preferences, powers, restrictions, limitations, qualifications,
designations and terms and conditions, except that: (i) each class of shares has
a different class designation (i.e., Class A or Class D Shares); (ii) each class
of shares separately bears any distribution expenses in connection with any plan
adopted pursuant to Rule 12b-1 under the 1940 Act (a "Rule 12b-1 Plan") for such
class (and any other costs relating to obtaining shareholder approval of the
Rule 12b-1 Plan for such class, or an amendment of such plan); (iii) only the
holders of the shares of the class involved are entitled to vote on matters
pertaining to the Rule 12b-1 Plan relating to such class (e.g., the adoption,
amendment or termination of a Rule 12b-1 Plan); (iv) each class of shares
separately bears shareholder servicing expenses for such class; (v) each class
of shares bears all other expenses of the operations of a particular Series that
are directly attributable to such class ("Class Expenses")1; (vi) each class of
<PAGE>
shares has exchange privileges unique to such class; and (vii) the expenses of a
specific class of shares may be waived or reimbursed by GAM Services Inc., the
Fund's distributor (the "Distributor"), or by the Fund's investment advisers or
other providers of services.
A. CLASS A SHARES
Each Series has a class of shares designated as its "Class A Shares"
which are offered subject to the following terms and conditions:
(1) SALES LOADS. Class A Shares are offered with a maximum
front-end sales charge of 5.0% of the offering price of the shares. The
Distributor receives the sales charges and usually reallows all or a substantial
part of such charges to authorized dealers that have effected sales of Class A
Shares. Currently the Distributor may make payments to authorized dealers in
amounts up to 4%. The sales charge is reduced at four break points, and
purchases of $1 million or more are offered at net asset value, subject to a
contingent deferred sales charge of 1% on redemptions made within one year of
the date of purchase and 0.50% on redemptions made during the second year of
investment (declinding to 0 thereafter). The CDSC is imposed to reimburse the
Distributor for amounts paid to selling dealers at the time of sale, the maximum
level of which is 1%, declining to 0.25% for purchase amounts of $50 million and
above.
Shares purchased through the reinvestment of dividends and other distributions
paid in respect of Class A Shares will also be Class A Shares, although such
shares will not be subject to the front-end sales charge. However, such shares
will be subject to the 0.30% annual 12b-1 fee and the 0.25% annual
administrative services fee, each of which is described below.
(2) 12B-1 FEES. Class A Shares are subject to an annual
distribution fee of 0.30% of the average daily net assets attributable to the
Class A Shares of the relevant Series pursuant to a Rule 12b-1 Plan currently in
effect for Class A Shares for such Series. Pursuant to the Plan, distribution
fees may be utilized to compensate the Distributor for services provided and
expenses incurred by it as principal underwriter of the Fund's Class A Shares.
All or any part of such fee may be reallowed to authorized dealers that effected
sales of Class A Shares, part of which may be classified as a shareholder
servicing fee, as contemplated in the NASD's maximum sales charge rule, subject
to the limitation of 0.25% of assets annually set forth in such rule.
(3) ADMINISTRATIVE SERVICES FEES ("ASF"). Class A Shares owned
by shareholders that have a servicing relationship with banks, trust companies,
or financial service organizations ("shareholder servicing agents") that have
contracted with the Fund to provide administrative services for the Fund may be
subject to an annual servicing fee of up to 0.25% of the average daily net
assets attributable to such Class A Shares. The administrative services fee is
used to compensate the shareholder servicing agents for providing administrative
services with respect to the holders of Class A Shares, such as processing
purchase and redemption transactions, transmitting and receiving funds for the
purchase and sale of Class A Shares, answering routine inquiries regarding the
Fund, furnishing monthly and year-end statements and confirmations of purchases
and sales of shares, transmitting periodic reports, updated prospectuses, proxy
statements and other communications to shareholders, and providing other
services as agreed from time to time.
<PAGE>
(4) EXCHANGE PRIVILEGES AND CONVERSION FEATURE. Class A Shares
of each Series are exchangeable only for Class A Shares of any other Series, and
for shares of the Short Term Investment Co. - Liquid Assets Portfolio - Private
Class, a separate investment company distributed by the Fund's Distributor.
Class A Shares have no conversion feature.
B. CLASS D SHARES
Each Series may offer a class of shares designated as its "Class D
Shares" subject to the following terms and conditions:
(1) SALES LOADS. Class D Shares are offered with a maximum front-end
sales charge of 3.5% of the offering price of the shares. The sales charge is
reduced at four break points, and purchases of $1,000,000 or more are not
subject to the front-end sales charge.
The Distributor receives the sales charges and reallows all or a
substantial part of such charges to authorized dealers that have effected sales
of Class D Shares. Currently the Distributor may make payments to authorized
dealers in amounts up to 2.5% of the offering price.
Shares purchased through the reinvestment of dividends and other
distributions paid in respect of Class D Shares will also be Class D Shares,
although such shares will not be subject to the front-end sales charge. However,
such shares will be subject to the 0.50% annual distribution fee and the 0.25%
annual administrative services fee, each of which is described below.
(2) 12B-1 FEES. Class D Shares are subject to an annual distribution
fee of 0.50% of the average daily net assets attributable to the Class D Shares
of the relevant Series pursuant to the Rule 12b-1 Plan currently in effect for
Class D Shares for such Series. Pursuant to the Plan, distribution fees may be
utilized to compensate the Distributor for services provided and expenses
incurred by it as principal underwriter of the Fund's Class D Shares. All or any
part of such fee may be reallowed to authorized dealers that effected sales of
Class D Shares, part of which may be classified as a shareholder servicing fee,
as contemplated in the NASD's maximum sales charge rule, subject to the
limitation of 0.25% of assets annually set forth in such rule..
(3) ADMINISTRATIVE SERVICES FEES ("ASF") Class D Shares owned by
shareholders that have a servicing relationship with banks, trust companies, or
financial services organizations ("shareholder servicing agents") that have
contracted with the Fund to provide administrative services for the Fund may be
subject to an annual servicing fee of up to 0.25% of the average daily net
assets attributable to such Class D Shares. The administrative services fee is
used to compensate the shareholder servicing agents for providing administrative
services with respect to the holders of Class D Shares, such as processing
purchase and redemption transactions, transmitting and receiving funds for the
purchase and sale of Class D Shares, answering routine inquiries regarding the
Fund, furnishing monthly and year-end statements and confirmations of purchases
and sales of shares, transmitting periodic reports, updated prospectuses, proxy
statements and other communications to shareholders, and providing other
services as agreed from time to time.
<PAGE>
(4) EXCHANGE PRIVILEGES AND CONVERSION FEATURE. Class D Shares of each
Series are exchangeable only for Class D Shares of any other Series, and for
shares of the Short Term Investment Co. - Liquid Assets Portfolio - Private
Class, a separate investment company distributed by the Fund's Distributor.
Class D Shares have no conversion feature.
III. CALCULATION OF DIVIDENDS.
Dividends paid by a Series with respect to each class of its shares, to
the extent any dividends are paid, must be calculated in the same manner, at the
same time, on the same day and in the same amount, except that: (i) distribution
and shareholder servicing payments associated with any Rule 12b-1 Plan or
adminstrative services agreement relating to each respective class of shares
(including any costs relating to implementing such plans or any amendment
thereto) will be borne exclusively by that particular class; (ii) any
incremental transfer agency fee relating to a particular class will be borne
exclusively by that class; and (iii) Class Expenses relating to a particular
class will be borne exclusively by that class.
IV. EXPENSE ALLOCATIONS.
All amounts expended for the benefit of a particular class of shares
will be charged to that class of shares and any expenses which are deemed by the
Board of Directors of the Fund to benefit both classes of shares equally will be
charged to each class of shares on the basis of the net asset value of such
class of shares in relation to the net asset value of all of the outstanding
shares of the Fund.
The methodology and procedures for calculating the net asset value and
dividends and distributions with respect to each class of shares of the Fund and
the proper allocation of income and expenses between the classes of shares of
the Fund are required to be reviewed pursuant to the American Institute of
Certified Public Accountants' Statement on Auditing Standards No. 55, which
requires a review of the Fund's internal control structure.
- --------
1 Class Expenses may include: (i) transfer agent fees identified as being
attributable to a specific class of shares; (ii) stationery, printing, postage,
and delivery expenses related to preparing and distributing materials such as
shareholder reports, prospectuses, and proxy statements to current shareholders
of a specific class; (iii) Blue Sky registration fees incurred by a class of
shares; (iv) SEC registration fees incurred by a class of shares; (v) expenses
of administrative personnel and services as required to support the shareholders
of a specific class; (vi) directors' fees or expenses incurred as a result of
issues relating solely to a class of shares; (vii) accounting expenses relating
solely to a class of shares; (viii) auditors' fees, litigation expenses, and
legal fees and expenses relating solely to a class of shares; and (ix) expenses
incurred in connection with shareholders meetings as a result of issues relating
solely to a class of shares. 2 Class Expenses may include: (i) transfer agent
fees identified as being attributable to a specific class of shares; (ii)
stationery, printing, postage, and delivery expenses related to preparing and
distributing materials such as shareholder reports, prospectuses, and proxy
statements to current shareholders of a specific class; (iii) Blue Sky
registration fees incurred by a class of shares; (iv) SEC registration fees
incurred by a class of shares; (v) expenses of administrative personnel and
services as required to support the shareholders of a specific class; (vi)
directors' fees or expenses incurred as a result of issues relating solely to a
class of shares; (vii) accounting expenses relating solely to a class of shares;
(viii) auditors' fees, litigation expenses, and legal fees and expenses relating
solely to a class of shares; and (ix) expenses incurred in connection with
shareholders meetings as a result of issues relating solely to a class of
shares.
Exhibit 19
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of GAM
Funds, Inc., a Maryland corporation (the "Fund"), does hereby constitute and
appoint Kevin J. Blanchfield, Lisa M. Hurley, Christopher M. Wells and Jeffrey
L. Steele, or any of them, the true and lawful attorneys and agents of the
undersigned, with full powers of substitution, to do any and all acts and things
and execute any and all instruments that said attorneys or agents, or any of
them, may deem necessary or advisable or which may be required to enable the
Fund to comply with the Securities Act of 1933, as amended, the Investment
Company Act of 1940, as amended, and the securities laws of the jurisdictions in
which securities of the Fund may be offered and sold, and any rules, regulations
or requirements of the Securities and Exchange Commission ("SEC"), or of the
securities commission or other agency of any such jurisdiction in respect
thereof, in connection with the registration and qualification of the Fund and
its share of common stock for sale under the securities law of any such
jurisdiction, including specifically, but without limiting the generality of the
foregoing, the power and authority to sign in the name and on behalf of the
undersigned (individually and as a director of the Fund), the Fund's
Registration Statement on Form N-1A, any other registration statement or form
adopted by the SEC or any such jurisdiction, any amendment or post-effective
amendments to any of the foregoing, and any other instruments or documents filed
as part of or in connection with any such registration statements; and the
undersigned does hereby ratify and confirm all that said attorneys and agents,
or any of them, shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents as of
this 29th day of January, 1997.
/s/Geoge W. Landau
--------------------------
George W. Landau
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of GAM
Funds, Inc., a Maryland corporation (the "Fund"), does hereby constitute and
appoint Kevin J. Blanchfield, Lisa M. Hurley, Christopher M. Wells and Jeffrey
L. Steele, or any of them, the true and lawful attorneys and agents of the
undersigned, with full powers of substitution, to do any and all acts and things
and execute any and all instruments that said attorneys or agents, or any of
them, may deem necessary or advisable or which may be required to enable the
Fund to comply with the Securities Act of 1933, as amended, the Investment
Company Act of 1940, as amended, and the securities laws of the jurisdictions in
which securities of the Fund may be offered and sold, and any rules, regulations
or requirements of the Securities and Exchange Commission ("SEC"), or of the
securities commission or other agency of any such jurisdiction in respect
thereof, in connection with the registration and qualification of the Fund and
its share of common stock for sale under the securities law of any such
jurisdiction, including specifically, but without limiting the generality of the
foregoing, the power and authority to sign in the name and on behalf of the
undersigned (individually and as a director of the Fund), the Fund's
Registration Statement on Form N-1A, any other registration statement or form
adopted by the SEC or any such jurisdiction, any amendment or post-effective
amendments to any of the foregoing, and any other instruments or documents filed
as part of or in connection with any such registration statements; and the
undersigned does hereby ratify and confirm all that said attorneys and agents,
or any of them, shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents as of
this 29th day of January, 1997.
/s/ Madelon DeVoe Talley
---------------------------
Madelon DeVoe Talley
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of GAM
Funds, Inc., a Maryland corporation (the "Fund"), does hereby constitute and
appoint Kevin J. Blanchfield, Lisa M. Hurley, Christopher M. Wells and Jeffrey
L. Steele, or any of them, the true and lawful attorneys and agents of the
undersigned, with full powers of substitution, to do any and all acts and things
and execute any and all instruments that said attorneys or agents, or any of
them, may deem necessary or advisable or which may be required to enable the
Fund to comply with the Securities Act of 1933, as amended, the Investment
Company Act of 1940, as amended, and the securities laws of the jurisdictions in
which securities of the Fund may be offered and sold, and any rules, regulations
or requirements of the Securities and Exchange Commission ("SEC"), or of the
securities commission or other agency of any such jurisdiction in respect
thereof, in connection with the registration and qualification of the Fund and
its share of common stock for sale under the securities law of any such
jurisdiction, including specifically, but without limiting the generality of the
foregoing, the power and authority to sign in the name and on behalf of the
undersigned (individually and as a director of the Fund), the Fund's
Registration Statement on Form N-1A, any other registration statement or form
adopted by the SEC or any such jurisdiction, any amendment or post-effective
amendments to any of the foregoing, and any other instruments or documents filed
as part of or in connection with any such registration statements; and the
undersigned does hereby ratify and confirm all that said attorneys and agents,
or any of them, shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents as of
this 29th day of January, 1997.
/s/ Roland Weiser
---------------------------
Roland Weiser
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of GAM
Funds, Inc., a Maryland corporation (the "Fund"), does hereby constitute and
appoint Kevin J. Blanchfield, Lisa M. Hurley and Christopher M. Wells, or any of
them, the true and lawful attorneys and agents of the undersigned, with full
powers of substitution, to do any and all acts and things and execute any and
all instruments that said attorneys or agents, or any of them, may deem
necessary or advisable or which may be required to enable the Fund to comply
with the Securities Act of 1933, as amended, the Investment Company Act of 1940,
as amended, and the securities laws of the jurisdictions in which securities of
the Fund may be offered and sold, and any rules, regulations or requirements of
the Securities and Exchange Commission ("SEC"), or of the securities commission
or other agency of any such jurisdiction in respect thereof, in connection with
the registration and qualification of the Fund and its shares of common stock
for sale under the securities law of any such jurisdiction, including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign in the name and on behalf of the undersigned (individually
and as a director of the Fund), the Fund's Registration Statement on Form N-1A,
any other registration statement or form adopted by the SEC or any such
jurisdiction, any amendment or post-effective amendments to any of the
foregoing, and any other instruments or documents filed as part of or in
connection with any such registration statements; and the undersigned does
hereby ratify and confirm all that said attorneys and agents, or any of them,
shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents as of
this 29th day of January, 1997.
/s/ Gilbert de Botton
---------------------------
Gilbert de Botton
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of GAM
Funds, Inc., a Maryland corporation (the "Fund"), does hereby constitute and
appoint Kevin J. Blanchfield, Lisa M. Hurley and Christopher M. Wells, or any of
them, the true and lawful attorneys and agents of the undersigned, with full
powers of substitution, to do any and all acts and things and execute any and
all instruments that said attorneys or agents, or any of them, may deem
necessary or advisable or which may be required to enable the Fund to comply
with the Securities Act of 1933, as amended, the Investment Company Act of 1940,
as amended, and the securities laws of the jurisdictions in which securities of
the Fund may be offered and sold, and any rules, regulations or requirements of
the Securities and Exchange Commission ("SEC"), or of the securities commission
or other agency of any such jurisdiction in respect thereof, in connection with
the registration and qualification of the Fund and its shares of common stock
for sale under the securities law of any such jurisdiction, including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign in the name and on behalf of the undersigned (individually
and as a director of the Fund), the Fund's Registration Statement on Form N-1A,
any other registration statement or form adopted by the SEC or any such
jurisdiction, any amendment or post-effective amendments to any of the
foregoing, and any other instruments or documents filed as part of or in
connection with any such registration statements; and the undersigned does
hereby ratify and confirm all that said attorneys and agents, or any of them,
shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents as of
this 29th day of January, 1997.
/s/ Therese Meier
------------------
Therese Meier
