- --------------------------------------------------------------------------------
Board of Directors
- --------------------------------------------------------------------------------
Gilbert de Borton - 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.
Roland Weiser
Chairman, Intervista, Summit, New Jersey.
Address of the Company:
135 East 57th Street,
New York, New York 10022.
Tel: (212) 407 4600
1-800-426-4685 (toll free)
Fax: (212) 888 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 person only);
Global Asset Management Limited, a member of IMRO,
12 St. James's Place, London, SW1A INX, UK
Tel: 44-71-493 9990 Fax: 44-71-493 0715 Tlx 296099 GAMUK G
On Internet;
Information on GAM's SEC-registered funds -
www.usinfo.gam.com
Email enquiries on GAM - [email protected]
- --------------------------------------------------------------------------------
GLOBAL ASSET MANAGEMENT(R)
GAM FUNDS, INC.
SEMI-ANNUAL REPORT
(UNAUDITED)
FOR THE PERIOD ENDED
30TH JUNE, 1997
GAM(R)
<PAGE>
- --------------------------------------------------------------------------------
The GAM Group
- --------------------------------------------------------------------------------
The GAM group was founded in April 1983 by Gilbert de Borton. 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$10.8 billion under management and employs a worldwide staff of
about 430 people.
For US investors, GAM offers GAM Funds, Inc. an open-end diversified
investment management 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 1-800426-4685 (toll free).
- --------------------------------------------------------------------------------
Contents
- --------------------------------------------------------------------------------
GAM International ......................................................... 2
GAM Global ................................................................ 7
GAM Europe ................................................................ 12
GAM Pacific Basin ......................................................... 16
GAM Japan Capital ......................................................... 21
GAM North America ......................................................... 25
GAM Asian Capital ......................................................... 29
GAMerica Capital .......................................................... 32
<PAGE>
- --------------------------------------------------------------------------------
GAM International Fund
- --------------------------------------------------------------------------------
Fund Management
- --------------------------------------------------------------------------------
John R. Horseman joined GAM in 1987, 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
[PHOTO] 1987 he worked for BA Investment Management International Ltd
and was responsible for certain of the Bank of America's
global equity funds. He commenced management of GAM Global
and GAM International Funds on 1st April, 1990. Mr. Horseman
also manages the offshore fund GAM Universal US$ Inc. He was
educated at the University of Birmingham.
The Fund's investment objective is long-term capital appreciation,
generally through investment in equity securities issued by companies in
countries other than the United States, including Canada, the United Kingdom,
Continental Europe and the Pacific Basin. However, if the Fund determines that
the long-term capital appreciation of debt securities may equal or exceed the
return on equity securities, it may be substantially invested in debt securities
of companies and governments, their agencies and instrumentalities. Any income
realized by the Fund on its investments will be incidental to its goal of
long-term capital appreciation.
Report to Shareholders
- --------------------------------------------------------------------------------
THE FACTS -- CLASS A SHARES
GAM
International
Class A (after Average
GAM maximum MSCI 1 Month
International sales load EAFE Deposit
Class A of 5%) Index Rate
30th June, 97 US$27.68 1,308.28
- --------------------------------------------------------------------------------
% % % %
- --------------------------------------------------------------------------------
Quarter to June, 97 +12.98 + 7.33 +13.06 + 1.39
- --------------------------------------------------------------------------------
Jan-June, 1997 +19.57 +13.59 +11.36 + 2.73
- --------------------------------------------------------------------------------
Average annual total return:-
- --------------------------------------------------------------------------------
1 year to June, 97 +40.15 +33.14 +13.16 + 5.49
- --------------------------------------------------------------------------------
5 years to June, 97 +21.17 +19.93 +13.17 + 4.67
- --------------------------------------------------------------------------------
10 years to June, 97 +14.76 +14.17 + 6.98 + 6.12
- --------------------------------------------------------------------------------
Since inception +21.88 +21.39 +16.85 + 6.41
- --------------------------------------------------------------------------------
Performances are calculated on a total return basis. 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 FROM PRINTED PIECE IS OMITTED.]
- --GAM INTERNATIONAL CLASS A
- --GAM INTERNATIONAL CLASS A
(AFTER MAXIMUM SALES LOAD OF 5%)
- --MSCI EAFE INDEX
- --AVERAGE 1 MONTH DEPOSIT RATE
NOTE: The graphs compare the performance results of a hypothetical $10,000
investment in either Class and a comparable index. The performances of Class A
and Class D are also shown after adjustment to reflect the maximum sales 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
GAM
International
Class D (after Average
GAM maximum MSCI 1 Month
International sales load EAFE Deposit
Class D of 3.5%) Index Rate
30th June, 97 US$27.58 1,308.28
- --------------------------------------------------------------------------------
% % % %
- --------------------------------------------------------------------------------
Quarter to June, 97 +12.99 + 9.03 +13.06 + 1.39
- --------------------------------------------------------------------------------
Jan-June, 1997 +19.55 +15.36 +11.36 + 2.73
- --------------------------------------------------------------------------------
Average annual total return:-
- --------------------------------------------------------------------------------
1 year to June, 97 +39.79 +34.90 +13.16 + 5.49
- --------------------------------------------------------------------------------
Since inception +21.55 +19.14 +14.08 + 5.50
- --------------------------------------------------------------------------------
[CHART FROM PRINTED PIECE IS OMITTED.]
- --GAM INTERNATIONAL CLASS D
- --GAM INTERNATIONAL CLASS D
(AFTER MAXIMUM SALES LOAD OF 5%)
- --MSCI EAFE INDEX
- --AVERAGE 1 MONTH DEPOSIT RATE
3
<PAGE>
- --------------------------------------------------------------------------------
GAM International Fund -- Report to Shareholders (CONTINUED)
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN - CLASS A
[CHART FROM PRINTED PIECE IS OMITTED]
o GAM International o GAM International o MSCI EAFE Index
(after maximum
sales load of 5%)
ANNUAL PERFORMANCE - CLASS A
[CHART FROM PRINTED PIECE IS OMITTED]
o GAM International o GAM International o MSCI EAFE Index
(after maximum
sales load of 5%)
GAM
International
GAM Class A
lnternational (after maximum MSCI
Class A sales load of 5%) EAFE Index
Year % % %
- --------------------------------------------------------------------------------
1993 79.96 70.97 32.94
1994 (10.23) (14.71) 8.06
1995 30.09 23.59 11.55
1996 8.98 3.53 6.36
1997* 19.57 13.59 11.36
* 6 months
THE COMMENT
A stronger dollar, low interest rates and widespread corporate
restructuring together are providing a sound base for the European markets where
GAM International is predominantly invested. The Fund gained 12.99% during the
quarter as it stayed with stocks which benefit from these forces. In particular,
the Fund's holdings in European pharmaceuticals and financials performed well.
Anticipating that short-term interest rates in Europe may remain low for some
while as high unemployment persists, European currency exposure was largely
hedged back into the US dollar during the quarter.
Elsewhere our investments in Japanese electrical exporters, such as Canon
and Sony produced excellent results for the financial year ended in March and
presented shareholders with a bright prospect looking ahead. At the time of
writing a yen/dollar exchange rate of 113 is easily accommodated in these
companies' growth plans. Otherwise, GAM International's only other sizeable
Asian exposure is to Hong Kong, in particular to the Hong Kong Bank which looks
set to have another excellent year. The handover may present some shorter-term
volatility but 1ong-term value seems to be apparent in many of Hong Kong's
leading equities.
4
<PAGE>
- --------------------------------------------------------------------------------
GAM International Fund -- Statement of Investments (UNAUDITED)
- --------------------------------------------------------------------------------
as at 30th June, 1997
MARKET %
VALUE OF NET
HOLDINGS DESCRIPTION US$ ASSETS
- --------------------------------------------------------------------------------
ADJUSTABLE RATE INDEX NOTES
UNITED KINGDOM
+ DLJ ARIN, Indexed to 3,200,000 shares
British Biotech 1998-04-30 7,007,860 0.47
+ DLJ ARIN, Indexed to 1,000,000 shares
Flextech 1998-05-28 3,021,266 0.20
+ DLJ ARIN, Indexed to 1,000,000 shares
Flextech 1998-06-12 4,464,273 0.30
+ DLJ ARIN, Indexed to 1,203,596 shares
General Cable 1998-05-05 821,368 0.06
+ DLJ ARIN, Indexed to 1,000,000 shares
General Cable 1998-05-29 889,374 0.06
+ DLJ ARIN, Indexed to 1,203,596 shares
General Cable 1998-06-10 566,024 0.04
+ DLJ ARIN, Indexed to 1,000,000 shares
General Cable 1998-07-01 1,439,965 0.10
+ DLJ ARIN, Indexed to 1,200,000 shares
TeleWest Communications
1997-09-01 1,468,829 0.10
+ DLJ ARIN, Indexed to 3,250,000 shares
TeleWest Communications
1998-04-02 3,546,933 0.24
+ DLJ ARIN, Indexed to 1,200,000 shares
TeleWest Communications
1998-05-05 584,309 0.04
----------- -----
TOTAL ADJUSTABLE RATE INDEX NOTES
(COST $23,687,670) 23,810,201 1.61
----------- -----
BONDS
GERMANY
9,750,000 Bundes Deutschland 6.25%
2024-01-04 5,404,739 0.37
----------- -----
TOTAL BONDS (COST $5,935,961) 5,404,739 0.37
----------- -----
BOND WARRANTS
GERMANY
1,974,000 Bundes Deutschland 6.25% Wts
February 1998 962,154 0.07
TOTAL BOND WARRANTS (COST $2,545,231) 962,154 0.07
----------- -----
CURRENCY WARRANTS
GERMANY
*3,586,000 US Salomon USD/DEM Call Wts
1998-03-13 11,268,582 0.76
----------- -----
TOTAL CURRENCY WARRANTS (COST $10,589,580) 11,268,582 0.76
----------- -----
EQUITIES
BELGIUM
60,500 Kredietbank 24,380,321 1.64
1,440 Kredietbank New 568,286 0.04
----------- -----
24,948,607 1.68
----------- -----
DENMARK
275,000 Den Danske Bank 26,756,329 1.80
----------- -----
26,756,329 1.80
----------- -----
FRANCE
30,703 Carrefour 22,298,297 1.51
957,000 Credit Lyonnais 48,202,563 3.26
55,925 L'Oreal 23,562,595 1.59
650,000 Lagardere Groupe Registered 18,880,494 1.27
525,000 Michelin B 31,526,622 2.13
163,000 Union des Assurances Federales 19,166,029 1.29
----------- -----
163,636,600 11.05
----------- -----
GERMANY
550,000 Veba 30,907,735 2.09
45,000 Volkswagen 34,500,258 2.33
----------- -----
65,407,993 4.42
----------- -----
HONG KONG
3,425,000 Cheung Kong (Holdings) 33,819,847 2.28
3,180,000 Henderson Land 28,219,509 1.91
15,609,600 Hong Kong & China Gas 31,230,080 2.11
2,146,835 HSBC Holdings (HKD) 64,566,050 4.36
6,754,000 JCG Holdings 5,492,262 0.37
----------- -----
163,327,748 11.03
----------- -----
HUNGARY
82,900 Gedeon Richter GDR 7,585,350 0.51
----------- -----
7,585,350 0.51
----------- -----
JAPAN
1,865,000 Canon 50,770,439 3.43
5,000 East Japan Railway 25,652,212 1.73
628,000 Hoya 27,945,205 1.89
270,000 Rohm 27,798,621 1.88
330,000 Sony 28,764,506 1.94
2,400,000 Suzuki Motor 30,363,843 2.05
1,272,000 Takeda Chemical 35,737,196 2.41
361,000 TDK Corp 26,489,922 1.79
----------- -----
253,521,944 17.12
----------- -----
MALAYSIA
976,500 Carlsberg Brewery Malaysia 5,029,517 0.34
2,700,000 UMW Holdings 12,729,794 0.86
----------- -----
17,759,311 1.20
----------- -----
5
<PAGE>
- --------------------------------------------------------------------------------
Gam International Fund -- Statement Of Investments (CONTINUED)
- --------------------------------------------------------------------------------
MARKET %
VALUE OF NET
HOLDINGS DESCRIPTION US$ ASSETS
- --------------------------------------------------------------------------------
NETHERLANDS
2,007,388 ABM AMRO Holding 37,426,378 2.53
1,045,831 Fortis AMEV 46,562,720 3.14
624,646 ING 28,797,046 1.94
149,426 Wolters Kluwer 18,192,378 1.23
------------- -----
130,978,522 8.84
------------- -----
SINGAPORE
1,283,000 City Developments 12,563,475 0.85
4,035,600 Want Want Holdings 13,384,740 0.90
------------- -----
25,948,215 1.75
------------- -----
SPAIN
400,000 Banco Argentaria 22,391,554 1.51
98,200 Banco Popular Registered 24,054,093 1.63
------------- -----
46,445,647 3.14
------------- -----
SWEDEN
625,270 OM Gruppen 19,431,242 1.31
------------- -----
19,431,242 1.31
------------- -----
SWITZERLAND
22,050 Nestle Registered 29,077,919 1.97
35,220 Novartis Registered 56,284,478 3.80
4,869 Roche Holding Genussscheine 44,022,694 2.97
------------- -----
129,385,091 8.74
------------- -----
UNITED KINGDOM
1,836,376 B.A.T. Industries 16,431,456 1.11
7,408,464 Bank of Scotland 47,358,221 3.20
2,670,229 Barclays 52,985,952 3.58
4,466,000 Corporate Services Group 13,902,609 0.94
1,300,000 Glaxo Wellcome 26,834,964 1.81
1,366,520 Hyder 18,426,251 1.24
3,210,000 National Express Group 23,939,718 1.62
2,776,801 Prudential 26,880,074 1.82
2,094,677 Severn Trent 27,163,799 1.83
2,103,516 Thames Water 24,161,889 1.63
------------- -----
278,094,933 18.78
------------- -----
TOTAL EQUITIES (COST $1,072,679,844) 1,353,217,532 91.37
------------- -----
EQUITY WARRANTS
JAPAN
*11,324,500 Sony Wts 1998-12-04 10,130,294 0.68
------------- -----
10,130,294 0.68
------------- -----
SwitzerLand
*3,000 Roche Holding Wts 1998-05-05 230,058 0.02
*7,800 Swiss Bank Corp Bearer Wts 2000 75,837 0.00
------------- -----
305,895 0.02
------------- -----
TOTAL EQUITY WARRANTS (COST $9,987,390) 10,436,189 0.70
------------- -----
OPTIONS
FRANCE
*3,066,000 OAT 6% 92.45 2025-10-25
Calls April 1998 1,090,398 0.07
*4,053 CAC 40 Index 1998-03-31
2,500 Calls March 1998 17,586,656 1.19
*9,202 CAC 40 Index 1998-09-30
3,100 Calls September 1998 14,828,550 1.00
------------- ------
TOTAL 0PTIONS (COST $21,034,377) 33,505,604 2.26
------------- ------
TOTAL INVESTMENTS (COST $1,146,460,0-53**) 1,438,605,001 97.14
NET CURRENT ASSETS 42,386,652 2.86
------------- ------
TOTAL NET ASSETS 1,480,991,653 100.00
============= ======
* Non-income producing security.
** Cost for federal income tax purposes is identical.
+ Adjustable rate index notes are inversely indexed to the value of the
underlying security.
Glossary of terms: FR- Foreign Registered
See notes to financial statements.
Geographic Analysis as at
30th June, 1997
[The following table represents a pie chart in the printed piece.]
United Kingdom 20.39%
Japan 17.80%
France 13.31%
Hong Kong 11.03%
Netherlands 8.84%
Switzerland 8.76%
Germany 5.62%
Spain 3.14%
Denmark 1.80%
Other Areas 6.45%
Net Current Assets 2.86%
6
<PAGE>
- --------------------------------------------------------------------------------
GAM Global Fund
- --------------------------------------------------------------------------------
Fund Management
- --------------------------------------------------------------------------------
[PHOTO]
John R. Horseman joined GAM in 1987, initially as a member of the Asian team
based in Hong Kong. After moving to the London office in 1990 he is now
responsible for a number of GAM's global and international funds. Prior to
joining GAM in 1987 he worked for BA Investment Management International Ltd and
was responsible for certain of the Bank of America's global equity funds. He
commenced management of GAM Global and GAM International Funds on 1st April,
1990. Mr. Horseman also manages the offshore fund GAM Universal US$ Inc. He was
educated at the University of Birmingham.
The Fund's investment objective is long-term capital appreciation,
generally through investment in equity securities issued by companies with
principal offices in countries including the United States, Canada, the United
Kingdom, Continental Europe, and the Pacific Basin. However, if the Fund
determines that the long-term capital appreciation of debt securities may equal
or exceed the return on equity securities, it may be substantially invested in
debt securities of companies and governments, their agencies and
instrumentalities. Any income realized by the Fund on its investments will be
incidental to its goal of long-term capital appreciation.
Report to Shareholders
- --------------------------------------------------------------------------------
THE FACTS - CLASS A SHARES
GAM Global
Class A (after Average
GAM maximum MSCI 1 Month
Global sales load World Deposit
Class A of 5%) Index Rate
30th June, 97 US$17.32 939.75
- --------------------------------------------------------------------------------
% % % %
- --------------------------------------------------------------------------------
Quarter to June, 97 +16.32 +10.50 +15.17 + 1.39
- --------------------------------------------------------------------------------
Jan-June, 1997 +20.70 +14.66 +15.62 + 2.73
- --------------------------------------------------------------------------------
Average annual total return:-
- --------------------------------------------------------------------------------
1 year to June, 97 +42.07 +34.97 +22.81 + 5.49
- --------------------------------------------------------------------------------
5 years to June, 97 +20.50 +19.27 +16.15 + 4.67
- --------------------------------------------------------------------------------
10 years to June, 97 +13.21 +12.63 + 9.96 + 6.12
- --------------------------------------------------------------------------------
Since inception +13.43 +12.90 +12.84 + 6.17
- --------------------------------------------------------------------------------
Performances are calculated on a total return basis. Class A inception was
on 28th May, 1986 and Class D inception was on 6th October, 1995. Indications of
past performance are not necessarily indicative of future performance. The
investment return and principal value of an investment will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their original
cost.
7
<PAGE>
- --------------------------------------------------------------------------------
GAM Global Fund -- Report to Shareholders (CONTINUED)
- --------------------------------------------------------------------------------
[GRAPH FROM PRINTED PIECE IS OMITTED.]
- --GAM GLOBAL CLASS A
- --GAM GLOBAL CLASS A
(AFTER MAXIMUM SALES LOAD OF 5%)
- --MSCI WORLD INDEX
- --AVERAGE 1 MONTH DEPOSIT RATE
NOTE: The graphs compare the performance results of a hypothetical $10,000
investment in either Class and a comparable index. The performances of Class A
and Class D are also shown after adjustment to reflect the maximum sales 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 20 countries. The
percentage change in the value of the index includes dividends reinvested.
The Facts - Class D Shares
GAM Global
Class D (after Average
GAM maximum MSCI 1 Month
Global sales load World Deposit
Class A of 3.5%) Index Rate
30th June, 97 US$17.16 939.75
- --------------------------------------------------------------------------------
% % % %
- --------------------------------------------------------------------------------
Quarter to June, 97 +16.34 +12.27 +15.17 + 1.39
- --------------------------------------------------------------------------------
Jan-June, 1997 +20.68 +16.45 +15.62 + 2.73
- --------------------------------------------------------------------------------
Average annual total return:-
- --------------------------------------------------------------------------------
1 year to June, 97 +42.08 +37.11 +22.81 + 5.49
- --------------------------------------------------------------------------------
Since inception +23.22 +20.71 +20.78 + 5.49
- --------------------------------------------------------------------------------
[GRAPH FROM PRINTED PIECE IS OMITTED.]
- --GAM GLOBAL CLASS D
- --GAM GLOBAL CLASS D
(AFTER MAXIMUM SALES LOAD OF 3.5%)
- --MSCI WORLD INDEX
- --AVERAGE 1 MONTH DEPOSIT RATE
8
<PAGE>
- --------------------------------------------------------------------------------
GAM Global Fund - Report to Shareholders (CONTINUED)
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN- CLASS A
[THE FOLLOWING TABLE REPRESENTS A BAR CHART IN THE PRINTED PIECE]
GAM Global
GAM Class A MSCI
Global (after maximum World
Class A sales load of 5%) Index
Period % % %
- --------------------------------------------------------------------------------
One Year 42.07 34.97 22.81
Five Years 20.50 19.27 16.15
Ten Years 13.21 12.63 9.96
Since Inception 13.43 12.90 12.84
ANNUAL PERFORMANCE - CLASS A
[THE FOLLOWING TABLE REPRESENTS A BAR CHART IN THE PRINTED PIECE]
o GAM Global o GAM Global o MSCI World Index
(after maximum
sales load of 5%)
GAM Global
GAM Class A MSCI
Global (after maximum World
Class A sales load of 5%) Index
Year % % %
- --------------------------------------------------------------------------------
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
1997* 20.70 14.66 15.62
* 6 months
THE COMMENT
The second quarter has seen continued advances in the US stock market led
mainly by large capitalised companies whose outperformance over small
capitalised companies has been one of the more extreme since records began. The
Fund has performed well as it remained with stocks that benefited from these
trends, such as those within the consumer sector like Gillette and
Kimberly-Clark, which are expanding globally into the emerging markets and
taking advantage of good growth in their domestic market. Also, the current
environment of low inflation and good interest margins has favoured the banking
sector where the Fund is well represented.
A stronger dollar, low interest rates and widespread corporate
restructuring are also providing a sound base for the European markets where GAM
Global is invested. In particular, the Fund's holdings in European
pharmaceuticals and financials performed well. Anticipating that short-term
interest rates in Europe may remain low for some time as high unemployment
persists, European currency exposure was largely hedged back into the US dollar
during the quarter.
Elsewhere we have retained our weightings in Japanese electrical exporters
such as Canon and Sony, which produced excellent results for the financial year
ended in March. The only other Asian exposure of any size is to Hong Kong where
some property stocks appear attractive.
9
<PAGE>
- --------------------------------------------------------------------------------
GAM Global Fund - Statement of Investments (UNAUDITED)
- --------------------------------------------------------------------------------
AS AT 30TH JUNE, 1997
Market %
value of net
Holdings Description US$ assets
- --------------------------------------------------------------------------------
Adjustable Rate Index Notes
UNITED KINGDOM
+ DLJ ARIN Indexed to 115,000
shares British Biotech
1998-05-08 269,233 0.82
+ DLJ ARIN Indexed to 120,360
shares General Cable
1998-06-10 56,729 0.17
+ DLJ ARIN Indexed to 75,000
shares TeleWest Communications
1998-03-24 89,337 0.27
+ DLJ ARIN Indexed to 100,000
shares TeleWest Communications
1998-04-02 108,206 0.33
---------- -----
TOTAL ADJUSTABLE RATE INDEX NOTES
(COST $465,998) 523,505 1.59
---------- -----
BOND WARRANTS
Germany
*33,000 Bundes Deutschland 625% Wts
February 1998 16,085 0.05
---------- -----
TOTAL BOND WARRANTS (COST $42,550) 16,085 0.05
---------- -----
CURRENCY WARRANTS
GERMANY
*70,000 US Salomon US$ DEM Call Wts
1998-03-13 219,967 0.67
---------- -----
TOTAL CURRENCY WARRANTS (Cost $199,474) 219,967 0.67
---------- -----
EQUITIES
FRANCE
525 Carrefour 381,285 1.16
1,100 L'Oreal 463,457 1.40
6,810 Michelin B 408,945 1.24
2,890 Union des Assurances Federales 339,815 1.03
---------- -----
1,593,502 4.83
---------- -----
HONG KONG
68,000 Cheung Kong (Holdings) 671,460 2.03
64,000 Henderson Land 567,940 1.72
354,360 Hong Kong & China Gas 708,967 2.15
38,857 HSBC Holdings (HKD) 1,168,624 3.54
---------- -----
3,116,991 9.44
---------- -----
JAPAN
31,000 Canon 843,905 2.56
5,000 Rohm 514,789 1.56
7,200 Sony 627,589 1.90
7,000 TDK Corp 513,656 1.56
---------- -----
2,499,939 7.58
---------- -----
NETHERLANDS
39,394 ABM AMRO Holding 734,474 2.23
25,643 Fortis AMEV 1,141,684 3.45
---------- -----
1,876,158 5.68
---------- -----
SINGAPORE
39,000 City Developments 381,898 1.16
---------- -----
381,898 1.16
---------- -----
SWEDEN
17,521 OM Gruppen 544,492 1.65
---------- -----
544,492 1.65
---------- -----
SWITZERLAND
782 Novartis Registered 1,249,701 3.79
111 Roche Holding Genussscheine 1,003,598 3.04
---------- -----
2,253,299 6.83
---------- -----
UNITED KINGDOM
47,776 Barclays 948,030 2.87
35,000 Hyder 471,942 1.43
29,223 Thames Water 335,668 1.02
---------- -----
1,755,640 5.32
---------- -----
UNITED STATES
4,530 American International Group 676,669 2.05
7,685 American Stores 379,447 1.15
6,585 Amgen 382,753 1.16
5,040 Burlington Northern Santa Fe 452,970 1.37
12,520 Champion Enterprises 187,800 0.57
8,093 Chase Manhattan 785,527 2.38
*5,810 Compaq Computer 576,642 1.75
11,665 Computer Associates International 649,595 1.97
16,465 Federal Home Loan Mortgage 565,984 1.71
7,853 First Union 726,403 2.20
*12,310 Fort Howard 623,194 1.89
4,560 Gillette 432,060 1.31
7,685 Intel 1,089,829 3.30
9,046 Johnson & Johnson 582,336 1.76
12,080 Kimberly-Clark 600,980 1.82
*22,180 Kroger 643,220 1.95
14,330 MBNA 524,836 1.59
7,145 Medtronic 578,745 1.75
25,790 Merrill Lynch 1,537,729 4.66
22,288 NationsBank 1,437,576 4.36
10
<PAGE>
- --------------------------------------------------------------------------------
GAM Global Fund - Statement of Investments (CONTINUED)
- --------------------------------------------------------------------------------
MARKET %
VALUE OF NET
HOLDINGS DESCRIPTION US$ ASSETS
- --------------------------------------------------------------------------------
UNITED STATES
7,700 Nike B 449,487 1.36
15,135 Philip Morris 671,616 2.03
*8,500 Rambus 395,250 1.20
19,320 Republic Group 388,815 1.18
14,636 Schering-Plough 700,698 2.12
---------- -----
16,040,161 48.59
---------- -----
TOTAL EQUITIES (COST $22,987,726) 30,062,080 91.08
---------- -----
EQUITY WARRANTS
JAPAN
*259,000 Sony Wts 1998-12-04 231,688 0.70
---------- -----
231,688 0.70
---------- -----
SWITZERLAND
*54 Roche Holding Wts
1998-05-05 4,141 0.01
*195 Swiss Bank Corp Bearer Wts
2000 1,896 0.01
---------- -----
6,037 0.02
---------- -----
TOTAL EQUITY WARRANTS (COST $228,001) 237,725 0.72
---------- -----
OPTIONS
France
*40,000 OAT 6% 2025-10-25
92.45 Calls April 1998 14,226 0.04
*79,000 CAC 40 Index 1998-03-31
2500 Calls March 1998 342,794 1.04
*174 CAC 40 Index 1998-09-30
3100 Calls September 1998 280,392 0.85
---------- -----
TOTAL OPTIONS (COST $391,803) 637,412 1.93
---------- -----
TOTAL INVESTMENTS (COST $24,315,552**) 31,696,774 96.04
NET CURRENT ASSETS 1,307,716 3.96
---------- ------
TOTAL NET ASSETS 33,004,490 100.00
========== ======
* Non-income producing security.
** Cost for federal income tax purposes is identical.
+ Adjustable rate index notes are inversely indexed to the value of the
underlying security.
See notes to financial statements.
GEOGRAPHIC ANALYSIS AS AT 30TH JUNE, 1997
[The following table represents a pie chart in the printed piece.]
United States 48.59%
United Kingdom 6.91%
Germany 0.72%
Hong Kong 9.44%
Netherlands 5.68%
Switzerland 6.85%
Japan 8.28%
France 6.76%
Singapore 1.16%
Sweden 1.65%
Net Current Assets 3.96%
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 1st January, 1993. Mr. Bennett also manages the offshore
fund GAM Pan European Inc. He is based in Edinburgh.
The Fund's investment objective is long-term capital appreciation,
generally through investment in equity securities issued by companies in Europe.
However, if the Fund determines that the long-term capital appreciation of debt
securities may equal or exceed the return on equity securities, it may be
substantially invested in debt securities of companies and governments, their
agencies and instrumentalities. Any income realized by the Fund on its
investments will be incidental to its goal of long-term capital appreciation.
Report to Shareholders
- --------------------------------------------------------------------------------
THE FACTS
GAM
Europe
(after
maximum Average
sales MSCI 1 Month
GAM load Europe Deposit
Europe of 5%) Index Rate
30th June, 97 US$13.92 983.67
- --------------------------------------------------------------------------------
% % % %
- --------------------------------------------------------------------------------
Quarter to June, 97 + 9.09 + 3.64 + 9.03 + 1.39
- --------------------------------------------------------------------------------
Jan-June, 1997 +17.47 +11.59 +14.45 + 2.73
- --------------------------------------------------------------------------------
Average annual total return:-
- --------------------------------------------------------------------------------
1 year to June, 97 +24.20 +17.99 +30.47 + 5.49
- --------------------------------------------------------------------------------
5 years to June, 97 +13.15 +11.99 +15.34 + 4.67
- --------------------------------------------------------------------------------
Since inception + 6.18 + 5.46 +12.36 + 5.34
- --------------------------------------------------------------------------------
Performances are calculated on a total return basis. 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)
- --------------------------------------------------------------------------------
[GRAPH FROM PRINTED PIECE IS OMITTED.]
- --GAM EUROPE
- --GAM EUROPE FUND
(AFTER MAXIMUM SALES LOAD OF 5%)
- --MSCI EUROPE INDEX
- --AVERAGE 1 MONTH DEPOSIT RATE
NOTE: The graphs compare the performance results of a hypothetical $10,000
investment in the Fund and a comparable index. The performances 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 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 -- CLASS A
[The following table represents a bar chart in the printed piece.]
GAM Europe
GAM Class A MSCI
Europe (after maximum Europe
Class A sales load of 5%) Index
Period % % %
- --------------------------------------------------------------------------------
One Year 24.20 17.99 30.47
Three Years 18.26 16.26 21.46
Five Years 13.15 11.99 15.34
Since Inception 6.18 5.46 12.36
ANNUAL PERFORMANCE- CLASS A
[The graph from the printed Piece is omitted.]
o GAM Europe o GAM Europe o MSCI Europe Index
(after maximum
sales load of 5%)
GAM
Europe
(after maximum MSCI
GAM sales load Europe
Europe of 5%) Index
Year % % %
- --------------------------------------------------------------------------------
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
1997* 17.47 11.59 14.45
*6 months
13
<PAGE>
- --------------------------------------------------------------------------------
GAM Europe Fund -- Statement of Investments (UNAUDITED)
- --------------------------------------------------------------------------------
THE COMMENT
The second quarter has seen a further strong performance by Europe's
financial markets, where the driving force remains exceptional liquidity
conditions, both domestically and internationally. In the disinflationary
environment that Europe now enjoys, cash offers little in the way of
competition, allowing equities to continue their re-rating.
Although this environment provides a supportive backdrop, we view the
polarisation of performance among fewer sectors and stocks with some caution.
Evidence grows that liquidity is being drawn to those sectors which dominate the
popular indices, perhaps as investors seek some sense of security. This is a
security which may prove false, as it is in such sectors and stocks that
overvaluation is likeliest.
The Fund remains well diversified and retains exposure to 'second line'
stocks where we perceive good value alternatives to the currently popular blue
chips.
AS AT 30TH JUNE, 1997
MARKET %
VALUE OF NET
HOLDINGS DESCRIPTION US$ ASSETS
- --------------------------------------------------------------------------------
EQUITIES
BELGIUM
1,584 Generale de Banque 609,707 1.49
---------- ------
609,707 1.49
---------- ------
DENMARK
*9,760 Bang & Olufsen Holding B 602,691 1.47
5,620 Den Danske Bank 546,802 1.33
---------- ------
1,149,493 2.80
---------- ------
FINLAND
35,360 Kesko 504,430 1.23
12,700 Nokia A 959,725 2.34
40,000 Valmet A (Fria) 693,229 1.69
---------- ------
2,157,384 5.26
---------- ------
FRANCE
6,380 Alcatel Alsthom 799,033 1.95
12,830 AXA - UAP 797,959 1.94
11,650 Banque Nationale de Paris 480,139 1.17
15,000 Bertrand Faure 789,984 1.92
1,090 Comptoirs Modernes 574,983 1.40
4,040 IMETAL 535,532 1.30
7,430 Technip 862,263 2.10
13,900 Total B 1,404,972 3.43
13,500 Valeo 838,481 2.04
---------- ------
7,083,346 17.25
---------- ------
GERMANY
13,900 BASF 513,708 1.25
*24,460 BHW Holding 413,768 1.01
13,200 Veba 741,786 1.81
---------- ------
1,669,262 4.07
---------- ------
ITALY
330,450 Credito Italiano 604,329 1.47
119,825 ENI Spa 678,196 1.65
245,950 S.T.E.T. 1,431,822 3.49
303,000 Telecom Italia Mobile 979,969 2.39
---------- ------
3,694,316 9.00
---------- ------
14
<PAGE>
- --------------------------------------------------------------------------------
GAM Europe Fund -- Statement of Investments (CONTINUED)
- --------------------------------------------------------------------------------
MARKET %
VALUE OF NET
HOLDINGS DESCRIPTION US$ ASSETS
- --------------------------------------------------------------------------------
NETHERLANDS
36,680 ABN AMRO Holding 683,874 1.67
31,000 Elsevier 517,966 1.26
23,595 Heijmans Group 503,616 1.23
14,030 Philips 1,004,867 2.45
23,800 Royal Dutch Petroleum Bearer 1,237,850 3.01
20,485 Telegraaf Holding 442,453 1.08
8,253 Vendex International 451,945 1.10
---------- ------
4,842,571 11.80
---------- ------
NORWAY
22,200 Kverneland Gruppen 603,451 1.47
10,925 Orkla A 807,337 1.97
17,560 Sparebanken 520,499 1.27
---------- ------
1,931,287 4.71
---------- ------
PORTUGAL
*+8,297 Sotancro -- 0.00
---------- ------
-- 0.00
---------- ------
SPAIN
4,210 Banco Popular Registered 1,031,240 2.51
---------- ------
1,031,240 2.51
---------- ------
SWEDEN
32,160 Atlas Copco A 841,180 2.05
16,070 Cardo 476,511 1.16
17,540 L.M. Ericsson B (Fria) 691,574 1.68
23,470 Kalmar Industries 402,671 0.98
32,540 Sandvik A 924,855 2.25
26,001 Svenska Handlesbank A 828,222 2.02
---------- ------
4,165,013 10.14
---------- ------
SWITZERLAND
*960 Novartis Registered 1,534,160 3.74
154 Roche Holding Genussscheine 1,392,379 3.39
---------- ------
2,926,539 7.13
---------- ------
UNITED KINGDOM
82,655 Bank of Scotland 528,368 1.29
40,000 Daily Mail & General Trust A 1,082,055 2.64
53,450 Glaxo Wellcome 1,103,330 2.68
52,580 Hozelock Group 367,626 0.90
150,500 Lasmo 650,144 1.58
328,425 Metalrax Group 459,252 1.12
244,101 Burford Holdings 503,880 1.23
*159,250 Somerfield 479,837 1.17
27,235 Wolseley 212,409 0.52
115,735 Wyevale Garden Centres 539,459 1.31
37,200 Zeneca 1,229,867 3.00
---------- ------
7,156,227 17.44
---------- ------
TOTAL EQUITIES (COST $32,745,835) 38,416,385 93.60
---------- ------
EQUITY RIGHTS
BELGUIM
90 Generale de Banque Rts 40 0.00
---------- ------
TOTAL EQUITY RIGHTS (COST $113) 40 0.00
---------- ------
EQUITY WARRANTS
SWITZERLAND
*130 Roche Holding Wts 1998-05-05 9,969 0.02
---------- ------
TOTAL EQUITY WARRANTS (COST $2,181) 9,969 0.02
---------- ------
TOTAL INVESTMENTS (COST $32,748,129**) 38,426,394 93.62
NET CURRENT ASSETS 2,617,189 6.38
---------- ------
TOTAL NET ASSETS 41,043,583 100.00
========== ======
* Non-income producing security.
** Cost for federal income tax purposes is identical.
+ Fair value determined by the Board of Directors.
See notes to financial statements.
GEOGRAPHIC ANALYSIS AS AT
30TH JUNE, 1997
[The following table represents a pie chart in the printed piece].
France ........................ 17.25%
Netherlands ................... 11.80%
Sweden ........................ 10.14%
Italy ......................... 9.00%
Switzerland ................... 7.15%
Finland ....................... 5.26%
Norway ........................ 4.71%
Germany ....................... 4.07%
Denmark ....................... 2.80%
Spain ......................... 2.51%
Belgium ....................... 1.49%
United Kingdom ................ 17.44%
Net current Assets ............ 6.38%
15
<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 6th May, 1997. 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
GAM
Pacific Basin
(after Average
GAM maximum MSCI 1 Month
Pacific Basin sales load Pacific Deposit
Class A of 5%) Index Rate
30th June, 97 US$16.78 2,280.36
- --------------------------------------------------------------------------------
% % % %
- --------------------------------------------------------------------------------
Quarter to June, 97 +13.38 + 7.71 +19.06 +1.39
- --------------------------------------------------------------------------------
Jan-June, 1997 +9.96 +4.46 +7.29 +2.73
- --------------------------------------------------------------------------------
Average annual total return:-
- --------------------------------------------------------------------------------
1 year to June, 97 +5.13 -0.12 -4.34 +5.49
- --------------------------------------------------------------------------------
5 years to June, 97 +13.56 +12.40 +10.64 +4.67
- --------------------------------------------------------------------------------
10 years to June, 97 +10.99 +10.43 + 2.60 +6.12
- --------------------------------------------------------------------------------
Since inception +11.05 +10.49 + 1.52 +6.14
- --------------------------------------------------------------------------------
Performances are calculated on a total return basis. Class A inception was
on 6th May, 1987 and Class D on 18th October, 1995. Indications of past
performance are not necessarily indicative of future performance. The investment
return and principal value of an investment will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
16
<PAGE>
- --------------------------------------------------------------------------------
GAM Pacific Basin Fund - Report to Shareholders (CONTINUED)
- --------------------------------------------------------------------------------
[GRAPH FROM PRINTED PIECE IS OMITTED].
- --GAM PACIFIC BASIN CLASS A
- --GAM PACIFIC BASIN CLASS A
(AFTER MAXIMUM SALES LOAD OF 5%)
- --MSCI PACIFIC INDEX
- --AVERAGE 1 MONTH DEPOSIT RATE
NOTE: The graphs compare the performance results of a hypothetical $10,000
investment in either Class and a comparable index. The performances of Class A
and Class D are also shown after adjustment to reflect the maximum sales 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
THE FACTS- CLASS D SHARES
GAM
Pacific Basin
(after Average
GAM maximum MSCI 1 Month
Pacific Basin sales load Pacific Deposit
Class D of 3.5%) Index Rate
30th June, 97 US$16.69 2,280.36
- --------------------------------------------------------------------------------
% % % %
- --------------------------------------------------------------------------------
Quarter to June, 97 +13.23 + 9.27 +19.06 + 1.39
- --------------------------------------------------------------------------------
Jan-June, 1997 + 9.80 + 5.96 + 7.29 + 2.73
- --------------------------------------------------------------------------------
Average annual total return:-
- --------------------------------------------------------------------------------
1 year to June, 97 + 4.49 + 0.83 - 4.34 + 5.49
- --------------------------------------------------------------------------------
Since inception + 6.27 + 4.07 + 3.54 + 5.48
- --------------------------------------------------------------------------------
[GRAPH FROM PRINTED PIECE IS OMITTED].
- --GAM PACIFIC BASIN CLASS D
- --GAM PACIFIC BASIN CLASS D
(AFTER MAXIMUM SALES LOAD OF 3.5%)
- --MSCI PACIFIC INDEX
- --AVERAGE 1 MONTH DEPOSIT RATE
17
<PAGE>
- --------------------------------------------------------------------------------
GAM Pacific Basin Fund -- Report to Shareholders (CONTINUED)
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN- CLASS A
[The following table represents a bar graph in the printed piece]
GAM MSCI
GAM Pacific Basin Pacific
Pacific Basin (after sales load) Index
Period % % %
- --------------------------------------------------------------------------------
One Year 5.13 (0.12) (4.34)
Five Years 7.41 2.04 13.03
Ten Years 4.56 (0.72) 2.99
Since Inception (0.39) (5.37) (8.4O)
ANNUAL PERFORMANCE- CLASS A
[Graph from printed piece is omitted]
GAM MSCI
GAM Pacific Basin Pacific
Pacific Basin (after sales load) Index
Period % % %
- --------------------------------------------------------------------------------
1993 51.51 43.93 35.97
1994 7.41 2.04 13.03
1995 4.56 (0.72) 2.99
1996 (0.39) (5.37) (8.4O)
1997* 9.96 4.46 7.29
*6 months
THE COMMENT
The Tankan survey which is an indicator for Japanese business confidence is
showing a modest recovery for the economy but the improvement is still patchy.
This suggests that an increase in domestic interest rates is likely to be
deferred until the autumn when the impact of the recent rise in the yen against
the dollar can more accurately be assessed. The real estate market has started
to show signs of stabilising with prices for residential plots in Tokyo and
Osaka remaining firm since the beginning of the year.
We have continued to hold approximately a quarter of the Fund's assets in
Hong Kong with an emphasis on blue chip property groups and utility companies
such as SHK Properties, Cheung Kong, Swims, Hong Kong Telecom and Hong Kong Gas.
The relative undervaluation of this market has been partially removed with the
strong performance in the second quarter leading up to the handover of the
Colony back to China. However, we remain confident that a selective
stock-picking approach will generate further gains.
Efforts to destabilise the Thai baht finally succeeded, with the Bank of
Thailand moving to a controlled float. After initial heavy selling in the Thai
stock market, shares staged a sharp recovery. Neighbouring markets were also
affected, particularly the Philippines and Malaysia.
In Indonesia, the ruling Golkar Party won the May general election and,
after a reduction in interest rates, the economy looks set to continue its
steady growth. Exposure to consumer stocks has been increased.
18
<PAGE>
- --------------------------------------------------------------------------------
GAM Pacific Basin Fund -- Statement of Investments (UNAUDITED)
- --------------------------------------------------------------------------------
AS AT 30TH JUNE, 1997
MARKET %
VALUE OF NET
HOLDINGS DESCRIPTION US$ ASSETS
- --------------------------------------------------------------------------------
EQUITIES
AUSTRALIA
96,500 Broken Hill Proprietary 1,419,577 2.30
491,000 Colonial 1,253,066 2.03
211,000 MIM Holdings 312,258 0.51
350,000 Novus Petroleum 1,202,417 1.95
93,475 Rio Tinto 1,593,658 2.58
121,875 WMC 768,381 1.24
---------- ------
6,549,357 10.61
---------- ------
HONG KONG
684,000 Amoy Properties 750,455 1.21
153,000 Cheung Kong (Holdings) 1,510,784 2.45
1,034,800 Hong Kong & China Gas 2,070,321 3.35
782,600 Hong Kong Telecommunications 1,868,793 3.02
39,200 HSBC Holdings (HKD) 1,178,940 1.91
*526,500 Kerry Properties 1,277,632 2.07
144,000 Sun Hung Kai Properties 1,728,602 2.80
198,000 Swire Pacific A 1,789,010 2.90
383,352 Wharf (Holdings) 1,662,596 2.69
---------- ------
13,837,133 22.40
---------- ------
INDONESIA
493,400 Bank Bali (FR) 1,318,709 2.13
753,000 Hero Supermarket (FR) 727,611 1.18
965,000 Mayorah Indah (FR) 545,590 0.88
231,000 Modern Photo Film (FR) 816,859 1.32
309,000 Mustika Ratu (FR) 330,345 0.53
---------- ------
3,739,114 6.04
---------- ------
JAPAN
59,000 Canon 1,606,143 2.60
17,000 Canon Sales 396,039 0.64
177 DDI 1,306,535 2.11
15,000 Japan Associated Finance 1,177,908 1.91
99,000 JGC Corp 682,401 1.10
44,000 Joshin Denki 453,014 0.73
47,000 Keisei Electric Railway 283,780 0.46
47,000 Mitsubishi Corp 586,423 0.95
91,000 Mitsubishi Estate 1,318,035 2.13
17,000 Murata Manufacturing 676,381 1.09
126,000 Nagoya Railroad 518,908 0.84
215,000 Nissan Fire & Marine Insurance 1,181,834 1.91
37,200 ORIX 2,755,676 4.46
21,000 Secom 1,540,965 2.49
81,000 Sekisui Chemical 819,824 1.33
20,000 Sony 1,743,303 2.82
97,000 Sumitomo Marine & Fire Insurance 795,567 1.29
56,000 Suzuki Motor 708,490 1.15
8,000 Tachihi Enterprise 251,287 0.41
23,100 Xebio 568,380 0.92
---------- ------
19,370,893 31.34
---------- ------
KOREA
44,000 Hyundai Motor GDR 452,100 0.73
43,560 Samsung Electronics GDS
(Non Voting) 1,176,120 1.90
2,200 Samsung Electronics GDS (Voting) 127,600 0.21
41,508 Shinhan Bank 606,727 0.98
---------- ------
2,362,547 3.82
---------- ------
MALAYSIA
150,500 Genting 721,494 1.17
---------- ------
721,494 1.17
---------- ------
PHILIPPINES
682,500 Ayala Land B 627,488 1.02
185,400 Bank of Phillipine Islands 1,180,892 1.91
33,600 Philippine Long Distance
Telephone 1,089, 172 1.76
---------- ------
2,897,552 4.69
---------- ------
SINGAPORE
95,750 Development Bank of
Singapore (FR) 1,205,498 1.95
83,000 Keppel 368,644 0.60
20,000 Keppel - A 86,731 0.14
768,000 Kim Eng Holdings 644,611 1.04
186,718 Overseas Chinese Banking
Corp (FR) 1,932,871 3.13
---------- ------
4,238,355 6.86
---------- ------
THAILAND
400,000 Krung Thai Bank (FR) 416,908 0.67
23,000 Land & House (FR) 47,944 0.08
181,750 Post Publishing (FR) 245,561 0.40
217,000 Siam Commercial Bank (OR) 887,937 1.44
171,610 Thai Farmers Bank (FR) 728,705 1.18
249,700 Thai Glass Industries (FR) 674,735 1.10
342,300 Thai Military Bank (FR) 383,196 0.62
---------- ------
3,384,986 5.49
---------- ------
TOTAL EQUITIES (COST $55,989,752) 57,101,431 92.42
---------- ------
19
<PAGE>
- --------------------------------------------------------------------------------
GAM Pacific Basin Fund -- Statement of Investments (CONTINUED)
- --------------------------------------------------------------------------------
MARKET %
VALUE OF NET
HOLDINGS DESCRIPTION US$ ASSETS
- --------------------------------------------------------------------------------
EQUITY WARRANTS
INDONESIA
*2,800 Bank Bali (FR) Wts 2000 3,569 0.01
---------- ------
3,569 0.01
---------- ------
JAPAN
*220 Kyocera Wts 1998 442,750 0.71
*190 Seino Transportation Wts 1997 4,750 0.01
*490 Tobu Railway Wts 1998 12,250 0.02
---------- ------
459,750 0.74
---------- ------
THAILAND
*17,763 Thai Farmers Bank Wts 2002 (FR) 7,714 0.01
---------- ------
7,714 0.01
---------- ------
TOTAL EQUITY WARRANTS (COST $736,994) 471,033 0.76
---------- ------
TOTAL INVESTMENTS (COST $56,726,746**) 57,572,464 93.18
NET CURRENT ASSETS 4,213,175 6.82
---------- ------
TOTAL NET ASSETS 61,785,639 100.00
========== ======
* Non-income producing security.
** Cost for federal income tax purposes is identical.
Glossary of terms:
GDR -- Global Depository Receipt
GDS -- Global Depository Shares
FR -- Foreign Registered
See notes to financial statements.
GEOGRAPHIC ANALYSIS
AS AT 30TH JUNE, 1997
[The following table represents a pie chart in the printed piece.]
Hong Kong ................... 22.40%
Australia ................... 10.61%
Singapore ................... 6.86%
Indonesia ................... 6.05%
Thailand .................... 5.50%
Philippines ................. 4.69%
Korea ....................... 3.82%
Malaysia .................... 1.17%
Net Current
Assets ...................... 6.82%
Japan ....................... 32.80%
20
<PAGE>
- --------------------------------------------------------------------------------
GAM Japan Capital Fund
- --------------------------------------------------------------------------------
Fund Management
- --------------------------------------------------------------------------------
[PHOTO]
Paul S. Kirkby, Investment Director, is responsible for investments 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 1st July, 1994. Mr. Kirkby
also manages the offshore Fund Gam Japan Inc. He 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 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
invested substantially in debt securities of companies and governments, their
agencies and instrumentalities. Any income realized by the Fund on its
investments will be incidental to its goal of long-term capital appreciation.
Report to Shareholders
- --------------------------------------------------------------------------------
THE FACTS - CLASS A SHARES
GAM
Japan Capital
Class A
(after Average
GAM maximum MSCI 1 Month
Japan Capital sales load Pacific Deposit
Class A of 5%) Index Rate
30th June, 97 US$11.05 1,553.81
- --------------------------------------------------------------------------------
% % % %
- --------------------------------------------------------------------------------
Quarter to June, 97 +20.11 +14.10 +22.66 + 1.39
- --------------------------------------------------------------------------------
Jan-June, 1997 +17.68 +11.79 + 7.58 +2.73
- --------------------------------------------------------------------------------
Average annual total return:-
- --------------------------------------------------------------------------------
1 year to June, 97 + 7.78 + 2.39 -12.35 + 5.49
- --------------------------------------------------------------------------------
Since inception + 6.49 + 4.68 - 6.21 + 5.55
- --------------------------------------------------------------------------------
Performances are calculated on a total return basis. The Fund's inception
was on 1st July, 1994. Indications of past performance are not necessarily
indicative of future performance. The investment return and principal value of
an investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost.
21
<PAGE>
- --------------------------------------------------------------------------------
GAM Japan Capital Fund -- Report to Shareholders (CONTINUED)
- --------------------------------------------------------------------------------
[The graph from the printed piece is omitted]
- --GAM JAPAN CAPITAL
- --GAM JAPAN CAPITAL
(AFTER MAXIMUM SALES LOAD OF 5%)
- --TOKYO STOCK EXCHANGE INDEX
- --AVERAGE 1 MONTH DEPOSIT RATE
NOTE: The graph compares the performance results of a hypothetical $10,000
investment in the Fund and a comparable index. The performances 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
The stock market recovered well during the quarter following the weakness
of the previous period, helped by a growing awareness that the real estate
market was stabilising and that the major banks were finally making progress in
the restructuring of their balance sheets - a view shared by the manager.
Despite the recovery of the yen, the manufacturing exporters, some of which are
held in GAM Japan Capital, continued to do well as did many of the Fund's
holdings of financial stocks. Although the focus of the market continued to be
relatively narrow, some broadening of interest was seen. GAM Japan Capital
benefited from the rally although, as the Fund continued to hedge much of its
exposure to the yen back into the base currency, much of the gain from the
recovery of the yen was missed, relative performance was thus held back.
Despite the good gains of the last quarter the only real change in
underlying conditions is the further stabilisation of the real estate market
mentioned above. The stock market as a whole continues to trade at uncompelling
valuations -- stock-picking remains the name of the game as it has done over the
last few years. The economy itself, after two good years, is set to slow this
fiscal year while the recovery seen in the manufacturing sector has, according
to the latest Bank of Japan "Tankan" quarterly trends survey, still not spread
convincingly to the larger services sector of the economy. Monetary policy is
thus likely to remain relatively easy and the yen to have a downward bias. The
Fund's exposure to the yen remains at under one-third of total assets.
22
<PAGE>
- --------------------------------------------------------------------------------
GAM Japan Capital Fund - Statement of Investments (continued)
- --------------------------------------------------------------------------------
AS AT 30TH JUNE, 1997
MARKET %
VALUE OF NET
HOLDINGS DESCRIPTION US$ ASSETS
- --------------------------------------------------------------------------------
CONVERTIBLES
FINANCIAL SERVICES
7,500 Toyo Trust & Bank Finance
CV 0.75% 2049-09-29 76,073 0.25
---------- ------
TOTAL CONVERTIBLES (COST $64,545) 76,073 0.25
---------- ------
EQUITIES
APPLIANCES & HOUSEHOLD DURABLES
7,900 Rinnai 169,566 0.56
13,000 Sony 1,133,147 3.74
---------- ------
1,302,713 4.30
---------- ------
AUTOMOBILES
79,000 Mazda Motor 275,718 0.91
35,000 Suzuki Motor 442,806 1.46
---------- ------
718,524 2.37
---------- ------
BANKING
24,000 Bank of Kyoto 157,473 0.52
28,000 Long-Term Credit Bank of Japan 120,932 0.40
20,000 Tochigi Bank 183,230 0.60
---------- ------
451,535 1,52
---------- ------
BROADCASTING & PUBLISHING
8,000 Broadcasting System of Niigam 83,762 0.28
---------- ------
83,762 0.28
---------- ------
BUILDING MATERIALS & COMPONENTS
20,909 Almetax Manufacturing 153,246 0.51
2,000 Okabe 15,705 0.05
---------- ------
168,951 0.56
---------- ------
BUSINESS & PUBLIC SERVICES
400 NIC 5,061 0.02
40 Nihon Jumbo 970 0.00
12,000 Seem 880,551 2.90
12,260 Weseo 125,157 0.41
---------- ------
1,011,739 3.33
---------- ------
CHEMICALS
40,000 Shin-Etsu Chemical 1,060,989 3.50
---------- ------
1,060,989 3.50
---------- ------
CONSTRUCTION & HOUSING
19,000 Ataka Construction & Engineering 123,506 0.41
23,000 JGC Corp 158,538 0.52
---------- ------
282,044 0.93
---------- ------
DATA PROCESSING & REPRODUCTION
37,000 Canon 1,007,242 3.32
5,500 I-O Data Device 182,358 0.60
3,260 Nidec Corp. 159,288 0.53
---------- ------
1,348,888 4.45
---------- ------
ELECTRICAL & ELECTRONICS
600 Fuji Soft ABC 26,176 0.09
7,000 Murata Manufacturing 278,510 0.92
41,000 NEC 572,376 1.89
27,080 Nippon Denwa Shisetsu 232,499 0.77
19,000 Oreton 402,844 1.33
8,360 Satori Electric 262,595 0.87
---------- ------
1,775,000 5.87
---------- ------
ELECTRONIC COMP. & INSTRUMENTS
9,000 Mimasu Semiconductor Industry 201,815 0.67
18,000 Mitsumi Electric 428,758 1.41
7,000 Rohm 720,705 2.37
4,800 Tokyo Electron 229,509 0.76
26,000 Yamatake - Honeywell 494,547 1.63
---------- ------
2,075,334 6.84
---------- ------
FINANCIAL SERVICES
9,000 Japan Associated Finance 706,745 2.33
6,600 Nichiei (8577) 765,902 2.52
23,100 ORIX 1,711,186 5.65
2,600 Shohkoh Fund 787,191 2.59
---------- ------
3,971,024 13.09
---------- ------
HEALTH & PERSONAL CARE
35,750 Eisai 676,882 2.24
7,000 Ono Pharmaceutical 246,750 0.81
7,242 Santen Pharmaceutical 145,965 0.48
11,000 Sawai Pharmaceutical 94,058 0.31
14,700 Towa Pharmaceutical 192,392 0.63
---------- ------
1,356,047 4.47
---------- ------
INDUSTRIAL COMPONENTS
81,000 Minebea 862,228 2.84
---------- ------
862,228 2.84
---------- ------
23
<PAGE>
- --------------------------------------------------------------------------------
GAM Japan Capital Fund -- Statement of Investments (CONTINUED)
- --------------------------------------------------------------------------------
MARKET %
VALUE OF NET
HOLDINGS DESCRIPTION US$ ASSETS
- --------------------------------------------------------------------------------
INSURANCE
50,000 Dai Tokyo Fire & Marine Insurance 289,678 0.95
24,000 Dowa Fire & Marine Insurance 119,152 0.39
84,450 Nissan Fire & Marine Insurance 464,213 1.54
74,000 Sumitomo Marine & Fire Insurance 606,928 2.00
---------- ------
1,479,971 4.88
---------- ------
LEISURE & TOURISM
4,700 Royal 98,831 0.33
14,000 Shochiku 131,926 0.43
---------- ------
230,757 0.76
---------- ------
MACHINERY & ENGINEERING
*7,000 Chiyoda Corp. 33,653 0.11
7,000 Higashi Nihon House 75,124 0.25
1,100 Japan Engineering Consultants 5,183 0.02
10,000 Sansei Yusoki 84,548 0.28
---------- ------
198,508 0.66
---------- ------
MERCHANDISING
15,400 Areway Japan 521,351 1.72
10,500 Aoyama Trading 337,143 1.11
16,040 Circle K Japan 920,890 3.02
3,800 Daimon 25,828 0.09
22,800 Deo Deo Corp. 445,616 1.47
400 Ishiguro Homa 5,689 0.02
7,000 Ito-Yokada 406,160 1.34
12,000 Joshin Denki 123,549 0.41
40,000 Juel Verite Ohkubo 247,797 0.82
6,000 Jusco 202,600 0.67
16,800 Matsumotokiyoshi 712,399 2.35
7,260 Paris Mikki 213,474 0.70
13,600 Shimachu 408,202 1.35
12,600 Xebio 310,025 1.02
---------- ------
4,880,723 16.09
---------- ------
METALS - STEEL
82,000 Nisshin Steel 214,641 0.71
22,900 Tokyo Steel 255,754 0.84
---------- ------
470,395 1.55
---------- ------
REAL ESTATE
13,000 Mitsubishi Estate 188,290 0.62
32,000 Mitsui Real Estate 441,147 1.46
8,000 Sankei Building 58,843 0.19
2,000 Tachihi Enterprise 62,822 0.21
20,000 TOC 237,327 0.78
---------- ------
988,429 3.26
---------- ------
RECREATION, OTHER CONSUMER GOODS
7,000 Fuji Photo Film 281,564 0.93
---------- ------
281,564 0.93
---------- ------
TELECOMMUNICATIONS
61 DDI 450,275 1.48
---------- ------
450,275 1.48
---------- ------
TRANSPORTATION - ROAD & RAIL
61,000 Keisei Electric Railway 368,310 1.20
163 West Japan Railway 638,574 2.10
---------- ------
1,006,884 3.30
---------- ------
UTILITIES - ELECTRIC & GAS
2,930 Okinawa Electric Power 58,288 0.19
---------- ------
58,288 0.19
---------- ------
WHOLESALE & INTERNATIONAL TRADE
23,040 Nakayamafuku 130,870 0.43
780 Softbank 49,886 0.16
---------- ------
180,756 0.59
---------- ------
TOTAL EQUITIES (COST $24,683,952) 26,705,428 88.04
---------- ------
EQUITY WARRANTS
ELECTRONIC COMP. & INSTRUMENTS
*90 Kyocera Wts 1998 181,125 0.60
---------- ------
181,125 0.60
---------- ------
TRANSPORTATION - ROAD & RAIL
*30 Seino Transportation Wts 1997 750 0.00
*170 Tobu Railway Wts 1998 4,250 0.01
---------- ------
5,000 0.01
---------- ------
TOTAL EQUITY WARRANTS (COST $213,375) 186,125 0.61
---------- ------
PREFERRED SHARES
FINANCIAL SERVICES
30,000,000 Sakura Finance Bermuda
0.75 CV Pfd 2001 264,048 0.87
---------- ------
TOTAL PREFERRED SHARES (COST $272,047) 264,048 0.87
---------- ------
TOTAL INVESTMENTS (COST $25,233,919**) 27,231,674 89.77
NET CURRENT ASSETS 3,104,606 10.23
---------- ------
TOTAL NET ASSETS 30,336,280 100.00
========== ======
* Non-income producing security.
** Cost for federal income tax purposes is identical.
See notes to financial statements.
24
<PAGE>
- --------------------------------------------------------------------------------
GAM North America Fund
- --------------------------------------------------------------------------------
Fund Management
- --------------------------------------------------------------------------------
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
29th June, 1990. Mr. Sarofim also manages the offshore fund GAM U.S. Inc.
The Fund's investment objective is long-term capital appreciation,
generally through investment in equity securities issued by companies in the
United States and Canada. However, if the Fund determines that the long-term
capital appreciation of debt securities may equal or exceed the return on equity
securities, it may be substantially invested in debt securities of companies and
governments, their agencies and instrumentalities. Any income realized by the
Fund on its investments will be incidental to its goal of long-term capital
appreciation.
Report to Shareholders
- --------------------------------------------------------------------------------
THE FACTS - CLASS A SHARES
GAM
North America
(after Average
maximum S&P 1 Month
GAM sales load Comp Deposit
North America of 5%) Index Rate
30th June, 97 US$16.49 885.14
- --------------------------------------------------------------------------------
% % % %
- --------------------------------------------------------------------------------
Quarter to June, 97 +17.70 +11.82 +17.46 +1.39
- --------------------------------------------------------------------------------
Jan-June, 1997 +21.61 +15.53 +20.62 +2.73
- --------------------------------------------------------------------------------
Average annual total return:-
- --------------------------------------------------------------------------------
1 year to June, 97 +35.47 +28.69 +34.69 +5.49
- --------------------------------------------------------------------------------
5 years to June, 97 +16.10 +14.91 +19.78 +4.67
- --------------------------------------------------------------------------------
Since inception +14.30 +13.52 +16.27 +5.342
- --------------------------------------------------------------------------------
Performances are calculated on a total return basis. The Fund's inception
was on 1st July, 1994. Indications of past performance are not necessarily
indicative of future performance. The investment return and principal value of
an investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost.
25
<PAGE>
- --------------------------------------------------------------------------------
GAM North America Fund -- Report to Shareholders (CONTINUED)
- --------------------------------------------------------------------------------
[The graph in the printed piece is omitted]
- -- GAM NORTH AMERICA
- -- GAM NORTH AMERICA
(AFTER MAXIMUM SALES LOAD OF 5%)
- -- STANDARD & POOR'S COMPOSITE INDEX
- -- AVERAGE 1 MONTH DEPOSIT RATE
NOTE: The graph compares the performance results of a hypothetical $10,000
investment in the Fund and a comparable index. The performance of the Fund is
also shown after adjustment to reflect the maximum sales load, which is waived
for certain investors. The performance of the index does not reflect brokerage
commissions and other expenses that would be incurred to acquire a comparable
portfolio of securities.
- ----------
Sources used are the net asset value which is computed daily and Datastream.
AVERAGE ANNUAL TOTAL RETURN
[The following table represents a bar graph in the printed piece]
GAM STANDARD &
NORTH AMERICA POOR'S
GAM (AFTER MAXIMUM COMPOSITE
NORTH AMERICA SALES LOAD OF 5%) INDEX
PERIOD % % %
- ------------------------------------------------------------
One Year 35.47 28.89 34.69
Three Years 29.34 27.15 28.86
Five Years 16.10 14.91 19.78
Since Inception 14.30 13.52 16.27
ANNUAL PERFORMANCE
[The graph in the printed piece is omitted]
GAM STANDARD &
NORTH AMERICA POOR'S
GAM (AFTER MAXIMUM COMPOSITE
NORTH AMERICA SALES LOAD OF 5%) INDEX
YEAR % % %
- ------------------------------------------------------------
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
1997* 21.61 15.53 20.62
*6 months
26
<PAGE>
- --------------------------------------------------------------------------------
GAM North America Fund -- Statement of Investments (unaudited)
- --------------------------------------------------------------------------------
THE COMMENT
The US economy is benefiting from the convergence of extremely positive
fundamentals - stable, but not robust growth and low unemployment, in an
environment of low inflation and declining interest rates. Above consensus
corporate profits have also contributed to the constructive backdrop for equity
markets. We continue to expect the economy to maintain this successful
transition into an extended slow growth cycle, from the more robust rate of the
prior two quarters. We see second quarter GDP falling to 2.0%, or slightly
below, with long-term interest rates declining toward 6.0% by year end, as
inflation pressures remain in check. Falling commodity prices and softness in
automobile and retail sales support our outlook for a weaker second half of the
year as high debt levels mute consumer demand. However, we continue to expect
the Federal Reserve to raise interest rates this summer to take out additional
insurance on potential overheating of the economy. Corporate earnings from
dominant, high quality companies, with expanding market share and new consumers,
are positioned to reaiise above average levels, although we are in a period of
price deflation. If interest rates continue their declining trend, as we expect,
equity market valuations will not become unbalanced. However, we do not
anticipate continued volatility and caution that a long-term perspective should
be maintained.
AS AT 30TH JUNE, 1997
MARKET %
VALUE OF NET
HOLDINGS DESCRIPTION US$ ASSETS
- --------------------------------------------------------------------------------
EQUITIES
AEROSPACE/MILITARY TECHNOLOGY
2,108 Boeing 111,856 1.26
---------- -----
111,856 1.26
---------- -----
AUTOMOBILES
5,000 Chrysler 164,062 1.86
5,018 Ford Motor 189,430 2.14
---------- -----
353,492 4.00
---------- -----
BANKING
2,200 Chase Manhattan 213,537 2.41
2,200 Citicorp 265,237 3.00
---------- -----
478,774 5.41
---------- -----
BEVERAGES & TOBACCO
8,400 Coca-Cola 567,000 6.41
5,800 PepsiCo 217,862 2.46
8,400 Philip Morris 372,750 4.22
---------- -----
1,157,612 13.09
---------- -----
BROADCASTING & PUBLISHING
*1,500 McGraw-Hill 88,219 1.00
---------- -----
88,219 1.00
---------- -----
CHEMICALS
3,000 DuPont de Nemours 188,625 2.13
700 International Flavors & Fragrances 35,350 0.40
---------- -----
223,975 2.53
---------- -----
DATA PROCESSING & REPRODUCTION
*1,200 Compaq Computer 119,100 1.35
2,500 Hewlett-Packard 140,000 1.58
---------- -----
259,100 2.93
---------- -----
ELECTRICAL & ELECTRONICS
1,200 Emerson Electric 66,075 0.75
5,600 General Electric (USA) 366,100 4.14
---------- -----
432,175 4.89
---------- -----
ELECTRONIC COMP. & INSTRUMENTS
2,250 Intel 319,078 3.61
---------- -----
319,078 3.61
---------- -----
27
<PAGE>
- --------------------------------------------------------------------------------
GAM North America Fund -- Statement of Investments (CONTINUED)
- --------------------------------------------------------------------------------
MARKET %
VALUE OF NET
HOLDINGS DESCRIPTION US$ ASSETS
- --------------------------------------------------------------------------------
ENERGY SOURCES
2,400 British Petroleum ADR 179,700 2.03
2,200 Chevron 162,662 1.84
3,000 Exxon 184,500 2.09
2,000 Mobil 139,750 1.58
---------- -----
666,612 7.54
---------- -----
FINANCIAL SERVICES
*2,000 Associates First Capital A 111,000 1.26
3,500 Fannie Mae 152,688 1.73
---------- -----
263,688 2.99
---------- -----
FOOD & HOUSEHOLD PRODUCTS
1,100 Kellogg 94,188 1.07
1,900 Proctor & Gamble 268,375 3.03
---------- -----
362,563 4.10
---------- -----
HEALTH & PERSONAL CARE
2,500 Abbott Laboratories 166,875 1.89
2,200 American Home Products 168,300 1.90
*900 Estee Lauder A 45,225 0.51
2,700 Gillette 255,825 2.89
4,200 Johnson & Johnson 270,375 3.06
3,500 Merck 362,250 4.10
3,500 Ptizer 418,250 4.73
---------- -----
1,687,100 19.08
---------- -----
INDUSTRIAL COMPONENTS
1,300 Rockwell International 76,700 0.87
---------- -----
76,700 0.87
---------- -----
INSURANCE
2,300 American General 109,825 1.24
---------- -----
109,825 1.24
---------- -----
LEISURE & TOURISM
2,500 McDonald's Corp. 120,781 1.37
---------- -----
120,781 1.37
---------- -----
MERCHANDISING
2,000 Wal-Mart Stores 67,625 0.76
2,500 Walgreen 134,063 1.52
---------- -----
201,688 2.28
---------- -----
MULTI-INDUSTRY
1,500 Allied Signal 126,000 1.42
*6 Berkshire Hathaway 283,200 3.20
1,500 Minnesota Mining & Manufacturing 153,000 1.73
---------- -----
562,200 6.35
---------- -----
RECREATION, OTHER CONSUMER GOODS
1,200 Eastman Kodak 92,100 1.04
2,500 Nike B 145,938 1.65
---------- -----
238,038 2.69
---------- -----
TELECOMMUUICATIONS
2,000 BellSouth 92,750 1.05
*2,082 SBC Communications 128,824 1.46
---------- -----
221,574 2.51
---------- -----
TRANSPORTATION - ROAD & RAIL
1,200 Norfolk Southern 120,900 1.36
---------- -----
120,900 1.36
---------- -----
TOTAL EQUITIES (COST $4,893,207) 8,055,950 91.10
---------- -----
PREFERRED SHARES
BROADCASTING & PUBLISHING
3,000 News Corp Pfd ADR 46,875 0.53
---------- -----
TOTAL PREFERRED SHARES (COST $60,555) 46,875 0.53
---------- -----
TOTAL INVESTMENTS (COST $4,953,762**) 8,102,825 91.63
NET CURRENT ASSETS 740,341 8.37
---------- ------
TOTAL NET ASSETS 8,843,166 100.00
========== ======
* Non-income producing security.
** Cost for federal income tax purposes is identical.
Glossary of Terms:
ADR - American Depository Receipt.
See notes to financial statements.
28
<PAGE>
- --------------------------------------------------------------------------------
GAM Asia 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 12th May, 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 in Asia
other than Japan. Countries in Asia include Hong Kong, Singapore, Malaysia,
Thailand, Vietnam, Indonesia, the Philippines, Korea, China, Talwan, India,
Myanmar, Pakistan, Bangladesh and Sri Lanka. However, if the Fund determines
that the long-term capital appreciation of debt securities may equal or exceed
the return on equity securities, it may be substantially invested in debt
securities of companies and governments, their agencies and instrumentalities.
Any income realized by the Fund on its investments will be incidental to its
goal of long-term capital appreciation.
Report to Shareholders
- --------------------------------------------------------------------------------
THE FACTS
GAM Asian
Capital
(after MSCI AC Average
GAM maximum Far East 1 Month
Asian sales load (ex Japan) Deposit
Capital of 5%) Index Rate
30th June, 97 US$9.86 337.13
- --------------------------------------------------------------------------------
% % % %
- --------------------------------------------------------------------------------
Quarter to June, 97 + 6.36 + 1.05 + 6.22 + 1.39
- --------------------------------------------------------------------------------
Jan-June, 1997 + 0.31 - 4.71 + 4.16 + 2.73
- --------------------------------------------------------------------------------
Average annual total return:
- --------------------------------------------------------------------------------
1 year to June, 97 - 1.87 - 6.77 + 3.54 + 5.49
- --------------------------------------------------------------------------------
Since inception - 0.38 - 2.75 + 5.81 + 5.59
- --------------------------------------------------------------------------------
Performances are calculated on a total return basis. 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.
29
<PAGE>
- --------------------------------------------------------------------------------
GAM Asian Capital Fund -- Report to Shareholders (CONTINUED)
- --------------------------------------------------------------------------------
[The graph in the printed piece is omitted]
- -- GAM ASIAN CAPITAL
- -- GAM ASIAN CAPITAL
(AFTER MAXIMUM SALES LOAD OF 5%)
- -- STANDARD & POOR'S COMPOSITE INDEX
- -- AVERAGE 1 MONTH DEPOSIT RATE
NOTE: The graph compares the performance results of a hypothetical $10,000
investment in the Fund and a comparable index. The performance of the Fund is
also shown after adjustment to reflect the maximum sales load, which is waived
for certain investors. The performance of the index does not reflect brokerage
commissions and other expenses that would be incurred to acquire a comparable
portfolio of securities.
- ------------------
Sources used are net asset value of the Fund computed daily and Datastream.
The MSCI AC Far East (ex Japan) Index 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,
Taiwan and Thailand. The combined market capitalisation of these companies
represents approximately 60% of the aggregated market value of the stock
exchanges of the above eight countries. The percentage change in the value of
the index includes dividends reinvested.
THE COMMENT
During the second quarter financial markets around the region were affected
by volatility in the currency markets. Efforts to destabilise the Thai baht
finally succeeded, with the Bank of Thailand moving to a controlled float. After
initial heavy selling in the Thai stock market shares staged a sharp recovery.
Neighbouring markets were also affected, particularly the Philippines and
Malaysia. Conversely, the sudden rise by the Japanese yen since the end of April
had a positive impact on South Korea and Taiwan, where investors felt that the
export sectors would benefit from increased competitiveness. Both markets also
benefited from falling interest rates.
In Indonesia, the ruling Golkar Party won the May general election and aRer
a reduction in interest rates, the economy looks set to continue its steady
growth. The exposure to consumer stocks in Indonesia has been increased, whilst
the last two Thai holdings have been sold. As they outperformed by 40% and 70%,
respectively, in a falling market, it is likely that other companies will bring
outperformance when the market turns up.
We remain confident with the current investment strategy, which is focused
on Hong Kong, the best performing market in the quarter with a return of
approximately 20 %. It is now widely accepted that China's resumption of
sovereignty is a positive event, even though there are concerns over the
severity of impending anti-speculation measures which may affect the residential
property market. No doubt the next big strategic move will be to reduce the Hong
Kong weighting at some stage, but with solid earnings growth projected for this
year and next, we are probably still a few quarters away from the high for this
cycle.
30
<PAGE>
- --------------------------------------------------------------------------------
GAM Asian Capital Fund -- Statement of Investments (unaudited)
- --------------------------------------------------------------------------------
AS AT 30TH JUNE, 1997
MARKET %
VALUE OF NET
HOLDINGS DESCRIPTION US$ ASSETS
- --------------------------------------------------------------------------------
EQUITIES
HONG KONG
10,400 Bank of East Asia 43,360 2.33
92,000 CDL Hotels 37,407 2.01
9,000 Cheung Kong (Holdings) 88,870 4.78
99,000 China Hong Kong Photo 28,752 1.55
16,000 Dah Sing Financial 88,392 4.75
12,000 Dickson Concepts International 43,989 2.37
20,000 First Pacific Company 25,557 1.37
66,300 HKR International 91,997 4.95
30,600 Hong Kong & China Gas 61,221 3.29
21,000 Hong Kong & Shanghai Hotel 33,476 1.80
11,000 Hong Kong Electric 44,299 2.38
1,600 HSBC Holdings (HKD) 48,120 2.59
106,000 JCG Holdings 86,198 4.64
29,500 Kerry Properties 71,586 3.85
85,000 Li & Fung 95,453 5.13
30,000 National Mutual Asia 33,302 1.79
6,000 New World Development 36,013 1.94
6,000 Sun Hung Kai Properties 72,025 3.88
8,000 Swire Pacific A 72,283 3.89
70,000 Tai Cheung Holdings 55,568 2.99
13,000 Wharf(Holdings) 56,381 3.03
34,000 Wheelock 83,603 4.50
--------- -----
1,297,852 69.81
--------- -----
INDONESIA
14,850 Bank Bali (FR) 39,690 2.13
21,000 Citra Marga Nusaphala Persada (FR) 12,305 0.66
6,000 Gudang Garam (FR) 25,164 1.36
*13,000 Hanjaya Mandala Sampoerna 49,579 2.67
2,000 Indofood Sukses Makmur (FR) 4,605 0.25
67,000 Mayorah Indah (FR) 37,880 2.04
6,800 Tri Polyta Indonesia ADR 39,100 2.10
--------- -----
208,323 11.21
--------- -----
MALAYSIA
*16,000 Persuahaan Otomobil Nasional 74,802 4.02
--------- -----
74,802 4.02
--------- -----
NEW ZEALAND
14,000 Fernz 47,547 2.55
--------- -----
47,547 2.55
--------- -----
PHILIPPINES
30,000 Ayala Land B 27,582 1.48
--------- -----
27,582 1.48
--------- -----
SINGAPORE
11,000 DBS Land 34,777 1.87
1,600 Development Bank of Singapore (FR) 20,144 1.09
84,000 Osprey Maritime 109,869 5.91
10,000 Wing Tai Holdings 28,817 1.55
--------- -----
193,607 10.42
--------- -----
TOTAL EQUITIES (COST $1,714,481) 1,849,713 99.49
--------- -----
EQUITY RIGHTS
INDONESIA
*21,000 Citra Marga Nusaphala
Persada Rts (FR) 1997-08-12 7,987 0.43
--------- -----
7,987 0.43
--------- -----
SINGAPORE
*22,680 Osprey Maritime 1997-07-18 - 0.00
--------- -----
- 0.00
--------- -----
TOTAL EQUITY RIGHTS (COST $6,356) 7,987 0.43
--------- -----
TOTAL INVESTMENTS (COST $1,730,837**) 1,857,700 99.92
NET CURRENT ASSETS 1,500 0.08
--------- ------
TOTAL NET ASSETS 1,859,200 100.00
========= ======
* Non-income producing security.
** Cost for federal income tax purposes is identical.
ADR - American Depository Receipt
FR - Foreign Registered
See notes to financial statements.
Geographic Analysis
as at 30th June, 1997
The following data represents a pie chart which appears in the printed piece.
Hong Kong 69.81%
Other Areas 1.48%
Indonesia 11.64%
New Zealand 2.55%
Malaysia 4.02%
Singapore 10.42%
Net Current Assets 0.08%
31
<PAGE>
- --------------------------------------------------------------------------------
GAMerica Capital Fund
- --------------------------------------------------------------------------------
Fund Management
- --------------------------------------------------------------------------------
[PHOTO]
Gordon Grender, Director, has been associated with GAM since 1983 and is also
adviser to GAMerica. He has been actively involved in fund management in North
American stock markets since 1974. He commenced management of GAMerica Capital
Fund on 12th May, 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 in the
United States. However, if the Fund determines that the long-term capital
appreciation of debt securities may equal or exceed the return on equity
securities, it may be substantially invested in debt securities of companies and
governments, their agencies and instrumentalities. Any income realized by the
Fund on its investments will be incidental to its goal of long-term capital
appreciation.
Report to Shareholders
- --------------------------------------------------------------------------------
THE FACTS
GAMerica
Capital
(after Average
maximum S & P 1 Month
GAMerica sales load Comp Deposit
Capital of 5%) Index Rate
30th June, 97 US$12.29 885.14
- --------------------------------------------------------------------------------
% % % %
- --------------------------------------------------------------------------------
Quarter to June, 97 +23.39 +17.22 +17.46 + 1.39
- --------------------------------------------------------------------------------
Jan-June, 1997 +13.59 + 7.91 +20.62 + 2.73
- --------------------------------------------------------------------------------
Average annual total return:-
- --------------------------------------------------------------------------------
1 year to June, 97 + 7.23 + 1.87 +34.69 + 5.49
- --------------------------------------------------------------------------------
Since inception +15.58 +12.84 +30.49 + 5.59
- --------------------------------------------------------------------------------
Performances are calculated on a total return basis. 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.
32
<PAGE>
- --------------------------------------------------------------------------------
GAMerica Capital Fund -- Report to Shareholders (CONTINUED)
- --------------------------------------------------------------------------------
[Graph from printed piece is omitted.]
- -- GAMERICA CAPITAL
- -- GAMERICA CAPITAL
(AFTER MINIMUM SALES LOAD OF 5%)
- -- STANDARD & POOR'S COMPOSITE INDEX
- -- AVERAGE 1 MONTH DEPOSIT RATE
NOTE: The graph compares the performance results of a hypothetical $10,000
investment in the Fund and a. comparable index. The performance of the Fund is
also shown after adjusmaent to reflect the maximum sales load, which is waived
for certain investors. The performance of the index does not reflect brokerage
commissions and other expenses that would be incurred to acquire a comparable
portfolio of securities.
THE COMMENT
The US stock market measured by the major indices continued to rise
strongly through the second quarter and reached all time highs. The more broadly
based indices having fallen in the first quarter performed strongly in the
second quarter but are still significantly lagging the major indices in their
year to date performance. Measured by the Standard & Poor's Composite Index the
market rose by 13.06% during the quarter.
While Gross Domestic Product Growth slowed in the second quarter, most
evidence suggests this slowdown has ended. Third quarter growth is likely to
reach a 3% rate up from 1.5% in the second quarter while inflation, both in the
US and internationally, appears to be falling.
The US economy has clearly become less volatile in recent years which in
itself justifies a higher level of valuation of equity securities. Earnings
growth for the second quarter is estimated to have been around 10% with analysts
forecasting increases of 14-15% for the second half of the year. Stock prices of
the major companies have increased by about 20% this year easily outpacing any
expected or actual gains in earnings. Margin expansion accounts for much of the
gains in earnings. We have commented before about the improvement in
manufacturing technologies brought about by the fall in computing costs. In the
longer term it is likely that margins will fiatten. If earnings revert to
growing at a rate comparable to that of the economy the present overall level of
market valuation is likely to prove to be high.
- ------------------
Sources used are the net asset value of the Fund which is computed daily and
Datastream.
33
<PAGE>
- --------------------------------------------------------------------------------
GAMerica Capital Fund -- Statement of Investments (unaudited)
- --------------------------------------------------------------------------------
AS AT 30TH JUNE, 1997
MARKET %
VALUE OF NET
HOLDINGS DESCRIPTION US$ ASSETS
- --------------------------------------------------------------------------------
EQUITIES
BEVERAGES & TOBACCO
2,000 Fortune Brands 74,625 3.70
*2,000 Gallaher Group ADR 36,875 1.83
--------- -----
111,500 5.53
--------- -----
BUSINESS & PUBLIC SERVICES
*13,000 Professional Staff ADR 152,750 7.57
*26,400 Titan 112,200 5.56
--------- -----
264,950 13.13
--------- -----
CONSTRUCTION & HOUSING
*6,250 Palm Harbor Homes 205,469 10.18
--------- -----
205,469 10.18
--------- -----
ELECTRICAL & ELECTRONICS
2,500 AVX 67,500 3.35
--------- -----
67,500 3.35
--------- -----
ENERGY SOURCES
3,000 Unocal 116,438 5.77
--------- -----
116,438 5.77
--------- -----
FOOD & HOUSEHOLD PRODUCTS
3,150 Archcr-Danieis-Midland 74,025 3.67
--------- -----
74,025 3.67
--------- -----
HEALTH & PERSONAL CARE
*4,500 ClinTrials Research 54,000 2.68
8,000 Intimate Brands A 168,000 8.32
*5,000 Regency Health Services 76,875 3.81
*30,000 Unilab 33,750 1.67
--------- -----
332,625 16.48
--------- -----
INDUSTRIAL COMPONENTS
*12,000 Foamex International 157,500 7.80
--------- -----
157,500 7.80
--------- -----
INSURANCE
3,320 American General 158,530 7.85
--------- -----
158,530 7.85
--------- -----
MERCHANDISING
*6,000 Best Buy 89,250 4.42
10,000 Fred's A 150,000 7.43
*12,500 Jumbosports 47,656 2.36
2,000 Mercantile Stores 125,875 6.24
*5,000 Party City 83,750 4.15
--------- -----
496,531 24.60
--------- -----
TELECOMMUNICATIONS
*6,000 World Corn 192,000 9.51
--------- -----
192,000 9.51
--------- -----
TOTAL EQUITIES (COST $1,730,616) 2,177,068 107.87
--------- ------
TOTAL INVESTMENTS (COST $1,730,616**) 2,177,068 107.87
NET CURRENT LIABILITIES (158,852) (7.87)
--------- ------
TOTAL NET ASSETS 2,018,216 100.00
========= ======
* Non-income producing security.
** Cost for federal income tax purposes is identical.
Glossary of Terms:
ADR - American Depository Receipt
See notes to financial statements.
34
<PAGE>
- --------------------------------------------------------------------------------
GAM Funds, Inc. -- Portfolio Analysis
- --------------------------------------------------------------------------------
AS AT 30TH JUNE, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------
GAM GAM GAM GAM
GAM GAM GAM Pacific Japan North Asian GAMerica
International Global Europe Basin Capital America Capital Capital
% % % % % % % %
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ANALYSIS, BY GEOGRAPHICAL AREA:
Australia -- -- -- 10.61 -- 0.53 -- --
Belgium 1.68 -- 1.49 -- -- -- -- --
Denmark 1.80 -- 2.80 -- -- -- -- --
Finland -- -- 5.26 -- -- -- -- --
France 13.31 6.76 17.25 -- -- -- -- --
Germany 5.62 0.72 4.07 -- -- -- -- --
Hong Kong 11.03 9.44 -- 22.40 -- -- 69.81 --
Hungary 0.51 -- -- -- -- -- -- --
Indonesia -- -- -- 6.05 -- -- 11.64 --
Italy -- -- 9.00 - -- -- -- --
Japan 17.80 8.28 -- 32.08 89.77 -- -- --
Korea -- -- -- 3.82 -- -- -- --
Malaysia 1.20 -- -- 1.17 -- -- 4.02 --
Netherlands 8.84 5.68 11.80 -- -- -- -- --
New Zealand -- -- -- -- -- -- 2.55 --
Norway -- -- 4.71 -- -- -- -- --
Philippines -- -- -- 4.69 -- -- 1.48 --
Singapore 1.75 1.16 -- 6.86 -- -- 10.42 --
Spain 3.14 -- 2.51 -- -- -- -- --
Sweden 1.31 1.65 10.14 -- -- -- -- --
Switzerland 8.76 6.85 7.15 -- -- -- -- --
Thailand -- -- -- 5.50 -- -- -- --
United Kingdom 20.39 6.91 17.44 -- -- 2.03 -- 9.40
United States -- 48.59 -- -- -- 89.07 -- 98.47
------ ------ ------ ------ ------ ------ ------ ------
Total Investments 97.14 96.04 93.62 93.18 89.77 91.63 99.92 107.87
Other/Net current assets/(liabilities) 2.86 3.96 6.38 6.82 1023 8.37 0.08 (7.87)
------ ------ ------ ------ ------ ------ ------ ------
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 -- -- -- -- -- 1.26 -- --
Appliances & Household Durables 2.62 2.60 2.45 4.93 4.30 -- -- --
Automobiles 4.38 -- -- 1.88 2.37 4.00 4.02 --
Banking 23.55 13.23 15.23 15.94 1.52 5.41 12.89 --
Beverages/Tobacco 0.34 2.03 -- -- -- 13.09 4.03 5.53
Broadcasting & Publishing 1.73 -- 4.98 0.40 0.28 1.53 -- --
Building Materials & Components -- 1.18 0.52 1.33 0.56 -- -- --
Business & Public Services 5.64 4.42 -- 3.13 3.33 -- 1.09 13.13
Chemicals -- -- 1.25 -- 3.50 2.53 4.65 --
Construction & Housing -- 0.57 1.16 3.90 0.93 -- 3.88 10.18
Currency Options 0.76 0.67 -- -- -- -- -- --
Data Processing & Reproduction 3.43 4.31 -- 2.60 4.45 2.93 -- --
Electrical & Electronics -- -- 7.44 1.09 5.87 4.89 -- 3.35
Electronic Comp & Instruments 3.67 7.62 -- 0.71 7.44 3.61 -- --
Energy Sources -- -- 9.67 4.25 -- 7.54 -- 5.77
</TABLE>
35
<PAGE>
- --------------------------------------------------------------------------------
GAM Funds, Inc. -- Portfolio Analysis (CONTINUED)
- --------------------------------------------------------------------------------
AS AT 30TH JUNE, 1997 (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):
Financial Services 3.62 13.97 -- 9.44 14.21 2.99 4.64 --
Fixed Interest 0.37 -- -- -- -- -- -- --
Fixed Interest Options 0.07 0.04 -- -- -- -- -- --
Fixed Interest Warrants 0.07 0.05 -- -- -- -- -- --
Food & Household Products 2.87 -- 2.07 0.88 -- 4.10 2.29 3.67
Forest Products & Paper -- 1.89 1.47 -- -- -- -- --
Health & Personal Care 15.47 18.98 12.83 -- 4.47 19.08 -- 16.48
Index Options 2.19 1.89 -- -- -- -- -- --
Industrial Components 2.39 1.41 3.96 -- 2.84 0.87 -- 7.80
Insurance 6.25 6.53 1.94 3.20 4.88 1.24 1.79 7.85
Leisure & Tourism -- -- -- 1.17 0.76 1.37 3.81 --
Machinery & Engineering 0.86 -- 7.94 -- 0.66 -- -- --
Merchandising 1.51 4.26 2.50 2.83 16.09 2.28 2.37 24.60
Metals - Non-Ferrous -- -- 1.30 4.33 -- -- -- --
Metals - Steel -- -- 2.25 -- 1.55 -- -- --
Misc. Materials & Commodities -- -- -- 1.10 -- -- -- --
Multi-Industry 4.66 2.03 3.20 6.09 -- 6.35 16.48 --
Real Estate 2.76 2.88 1.23 9.61 3.26 -- 19.72 --
Recreation, Other Consumer Goods -- 1.36 1.31 1.85 0.93 2.69 -- --
Telecommunications 0.38 0.60 5.88 6.89 1.48 2.51 -- 9.51
Transportation - Road & Rail 3.35 1.37 -- 1.33 3.31 1.36 -- --
Transportation - Shipping -- -- -- -- -- -- 5.91 --
Utilities - Electrical & Gas 4.20 2.15 1.81 3.35 0.19 -- 5.67 --
Wholesale & International Trade -- -- 1.23 0.95 0.59 -- 6.68 --
------ ------ ------ ------ ------ ------ ------ ------
Total Investments 97.14 96.04 93.62 93.18 89.77 91.63 99.92 107.87
Other/Net current assets/(liabilities) 2.86 3.96 6.38 6.82 10.23 8.37 0.08 (7.87)
------ ------ ------ ------ ------ ------ ------ ------
Total Net Assets 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
====== ====== ====== ====== ====== ====== ====== ======
ANALYSIS, BY INVESTMENT:
Equities 91.37 91.08 93.60 92.42 88.04 91.10 99.49 107.87
Bonds 0.37 -- -- -- -- -- -- --
Convertibles -- -- -- -- 0.25 -- -- --
Equity Warrants 0.70 0.72 0.02 0.76 0.61 -- -- --
Options 2.26 1.93 -- -- -- -- -- --
Bond Warrants 0.07 0.05 -- -- -- -- -- --
Adjustable Rate Index Notes 1.61 1.59 -- -- -- -- -- --
Preferred Shares -- -- -- -- 0.87 0.53 -- --
Equity Rights -- -- -- -- -- -- 0.43 --
Currency Warrants 0.76 0.67 -- -- -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------
Total Investments 97.14 96.04 93.62 93.18 89.77 91.63 99.92 107.87
Other/Net current assets/(liabilities) 2.86 3.96 6.38 6.82 10.23 8.37 0.08 (7.87)
------ ------ ------ ------ ------ ------ ------ ------
Total Net Assets 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
36
<PAGE>
- --------------------------------------------------------------------------------
GAM Funds, Inc. -- Statements of Assets and Liabilities
- --------------------------------------------------------------------------------
AT 30TH JUNE, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
GAM
GAM GAM GAM Pacific
International Global Europe Basin
--------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS (IN US$)
Investments in securities at value $1,438,605,001 $31,696,774 $38,426,394 $57,572,464
Cash 55,044,673 2,125,222 1,136,810 4,654,597
Cash - Foreign currencies 1,205 15,346 315,268 395,914
Receivables:
Securities sold 58,825,064 239,612 1,776,397 155,546
Capital shares sold 14,878,774 256,039 79,505 316,022
Dividends, interest and other 4,741,262 55,680 178,197 180,025
Net equity in foreign currency exchange contracts (Note 6) 28,673,206 218,773 237,326 --
-------------- ----------- ----------- -----------
TOTAL ASSETS $1,600,769,185 $34,607,446 $42,149,897 $63,274,568
-------------- ----------- ----------- -----------
LIABILITIES
Payables:
Securities purchased 114,415,130 1,486,694 952,226 418,678
Capital shares redeemed 784,678 -- 5,114 75,211
Net equity in foreign currency exchange contracts (Note 6) -- -- -- 724,347
Accrued expenses and other 4,577,724 116,262 148,974 270,693
-------------- ----------- ----------- -----------
TOTAL LIABILITIES 119,777,532 1,602,956 1,106,314 1,488,929
-------------- ----------- ----------- -----------
NET ASSETS $1,480,991,653 $33,004,490 $41,043,583 $61,785,639
============== =========== =========== ===========
SOURCE OF NET ASSETS
Net capital paid in on shares of capital stock $1,129,863,492 $24,500,255 $31,103,388 $58,629,320
Accumulated net investment income/(1oss) 14,793,133 (56,821) 470,512 (236,901)
Accumulated net realized gains/(losses) 15,213,280 950,188 3,550,736 3,269,267
Net unrealized appreciation 321,121,748 7,610,868 5,918,947 123,953
-------------- ----------- ----------- -----------
NET ASSETS $1,480,991,653 $33,004,490 $41,043,583 $61,785,639
============== =========== =========== ===========
CLASS A SHARES OUTSTANDING 51,212,732 1,833,548 2,949,538 3,532,968
CLASS A NET ASSETS $1,417,684,738 $31,759,155 $41,043,583 $59,280,490
Net asset value and redemption value per share (Note 4) $27.68 $17.32 $13.92 $16.78
Offering price per share (100/95 x net asset value per
share reduced on sales of $100,000 or more) $29.14 $18.23 $14.65 $17.66
Class D shares outstanding 2,295,458 72,577 -- 150,071
Class D net assets $63,306,915 $1,245,335 -- $2,505,149
Net asset value and redemption value per share (Note 4) $27.58 $17.16 -- $16.69
Offering price per share (100/95 x net asset value per
share reduced on sales of $100,000 or more) $28.58 $17.78 -- $17.30
Identified cost of investments $1,146,460,053 $24,315,552 $32,748,129 $56,726,746
See notes to financial statements.
</TABLE>
37
<PAGE>
- --------------------------------------------------------------------------------
GAM Funds, Inc. -- Statements of Assets and Liabilities (CONTINUED)
- --------------------------------------------------------------------------------
AT 30TH JUNE, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
GAM GAM GAM
Japan North Asian GAMerica
Capital America Capital Capital
--------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS (In US$)
Investments in securities at value $27,231,674 $8,102,825 $1,857,700 $2,177,068
Cash 4,461,303 733,749 -- --
Cash - Foreign currencies 120,503 -- 42,377 --
Receivables:
Securities sold 2,019 -- 72,237 --
Capital shares sold 234,812 48,873 5,709 --
Dividends, interest and other 77,001 10,865 2,641 --
Net equity in foreign currency exchange contracts (Note 6) -- -- -- --
Deferred organizational expenses and other assets 13,997 -- 16,510 16,575
----------- ---------- ---------- -----------
TOTAL ASSETS $32,141,309 $8,896,312 $1,997,174 $2,193,643
----------- ---------- ---------- ----------
LIABILITIES
Due to Custodian -- -- 36,137 154,395
Payables:
Securities purchased 103,735 -- 76,952 --
Capital shares redeemed 153 -- -- --
Net equity in foreign currency exchange contracts (Note 5) 1,591,457 -- -- --
Accrued expenses and other 109,684 53,146 24,885 21,032
----------- ---------- ---------- ----------
TOTAL LIABILITIES 1,805,029 53,146 137,974 175,427
----------- ---------- ---------- ----------
NET ASSETS $30,336,280 $8,843,166 $1,859,200 $2,018,216
=========== ========== ========== ==========
SOURCE OF NET ASSETS
Net capital paid in on shares of capital stock $30,833,825 $5,573,651 $2,146,484 $1,571,052
Accumulated net invesmaent income/(loss) (635,873) (8,141) (164,009) (35,096)
Accumulated net realized gains/(losses) (273,255) 128,595 (250,116) 35,810
Net unrealized appreciation 411,583 3,149,061 126,841 446,450
----------- ---------- ---------- ----------
NET ASSETS $30,336,280 $8,843,166 $1,859,200 $2,018,216
=========== ========== ========== ==========
CLASS A SHARES OUTSTANDING 2,744,381 536,323 188,572 164,172
CLASS A NET ASSETS $30,336,280 $8,843,166 $1,859,200 $2,018,216
Net asset value and redemption value per share (Note 4) $11.05 $16.49 $9.86 $12.29
Offering price per share (100/95 x net asset value per
share reduced on sales or $100,000 or more) $11.63 $17.36 $10.38 $12.94
Identified cost of investments $25,253,919 $4,953,762 $1,730,837 $1,730,616
</TABLE>
See notes to finsncial statements.
38
<PAGE>
- --------------------------------------------------------------------------------
GAM Funds, Inc. -- Statements of Operations
- --------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED 30TH JUNE, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
GAM
GAM GAM GAM Pacific
International Global Europe Basin
------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME (in US$)
Dividends (Note 5) $14,889,244 $243,453 $527,706 $520,585
Interest (Note 5) 2,296,369 46,674 36,567 40,288
----------- -------- -------- --------
17,185,613 290,127 564,273 560,873
----------- -------- -------- --------
EXPENSES
Investment advisory fee (Note 2) 6,038,043 123,978 155,348 265,389
Custodian fees and expenses 776,603 18,666 42,590 62,957
Transfer agent fees and expenses 318,972 11,097 8,333 15,649
Shareholder servicing fees 346,432 4,232 6,248 23,291
Distribution fee - Class A (Note 2) 1,726,252 35,550 47,471 76,072
Distribution fee - Class D (Note 2) 115,826 2,268 -- 4,831
Professional fees 32,178 15,319 14,513 15,325
Administrative expenses 668,260 23,315 12,026 33,137
Printing 97,772 8,632 4,339 15,793
Filing fees 46,200 -- -- 429
Other 55,685 6,461 11,385 13,402
----------- -------- -------- --------
Total operating expenses 10,222,223 249,518 302,253 526,275
Interest expense 18,611 7,068 -- 6,905
----------- -------- -------- --------
Total expenses 10,240,834 256,586 302,253 533,180
----------- -------- -------- --------
Net investment income/(1oss) 6,944,779 33,541 262,020 27,693
----------- --------- -------- --------
REALIZED AND UNREALIZED
GAIN/(LOSS) FROM INVESTMENTS
AND FOREIGN CURRENCY
Net realized gain/(1oss) from:
Securities and futures 15,362,885 775,884 1,463,372 554,554
Foreign currency transactions 4,401,471 154,587 1,674,761 1,941,966
----------- -------- ---------- ----------
19,764,356 930,471 3,138,133 2,496,520
----------- -------- ---------- ----------
Unrealized appreciation/(depreciation
for the period:
Securities and futures 167,432,624 3,652,800 1,564,789 4,331,351
Foreign currency translation of
assets and liabilities other than investments 26,996,524 98,194 280,598 (1,467,138)
------------ ---------- ---------- ----------
194,429,148 3,750,994 1,845,387 2,864,213
------------ ---------- ---------- ----------
Net gain/(loss) on investments and foreign currencies 214,193,504 4,681,465 4,983,520 5,360,733
------------ ---------- ---------- ----------
NET INCREASE/(DECREASE) IN NET ASSETS FROM OPERATIONS $221,138,283 $4,715,006 $5,245,540 $5,388,426
============ ========== ========== ==========
</TABLE>
See notes to financial statements.
39
<PAGE>
- --------------------------------------------------------------------------------
GAM Funds, Inc. -- Statements of Operations (CONTINUED)
- --------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED 30TH JUNE, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
GAM GAM GAM
Japan North Asian GAMerica
Capital America Capital Capital
------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME (in US$)
Dividends (Note 5) $ 95,915 $59,192 $53,413 $ 9,535
Interest (Note 5) 40,850 7,994 353 641
-------- --------- --------- --------
136,765 67,186 53,766 10,176
-------- --------- --------- --------
EXPENSES
Investment advisory fee (Note 2) 135,848 34,087 19,209 9,522
Custodian fees and expenses 55,893 4,167 24,474 5,720
Transfer agent fees and expenses 9,329 3,345 2,728 1,931
Shareholder servicing fees 4,483 1,052 1,587 485
Distribution fee - Class A (Note 2) 40,405 10,093 5,641 2,832
Professional fees 10,664 8,232 10,170 9,321
Administrative expenses 17,366 3,769 4,659 1,212
Printing 5,160 4,108 3,720 3,789
Amortization of organization costs 3,298 -- 2,239 2,189
Filing fees 3,310 52 -- --
Other 1O,117 6,406 5,361 6,295
-------- --------- --------- --------
Total operating expenses 295,873 75,311 79,788 43,296
Interest expense 12,758 16 8,736 1,976
-------- --------- --------- --------
Total expenses 308,631 75,327 88,524 45,272
-------- --------- --------- --------
Net investment income/(1oss) (171,866) (8,141) (34,758) (35,096)
-------- --------- --------- --------
REALIZED AND UNREALIZED
GAIN/(LOSS) FROM INVESTMENTS
AND FOREIGN CURRENCY
Net realized gain/(loss) from:
Securities and futures (2,213,669) 94,265 (221,894) --
Foreign currency transactions 2,540,554 -- (4,231) --
---------- --------- -------- --------
326,885 94,265 (226,125) --
---------- ---------- -------- --------
Unrealized appreciation/(depreciation) for the period:
Securities and futures 5,690,980 1,229,707 92,583 270,697
Foreign currency translation of
assets and liabilities other than investments (2,237,476) -- 31 --
---------- ---------- -------- --------
3,453,504 1,229,707 92,614 270,697
---------- ---------- -------- --------
Net gain/(loss) on investments and foreign currencies 3,780,389 1,323,972 (133,511) 270,697
---------- ---------- --------- --------
NET INCREASE/(DECREASE) IN NET ASSETS FROM OPERATIONS $3,608,523 $1,315,831 ($168,269) $235,601
========== ========== ========= ========
</TABLE>
See notes to financial statements.
40
<PAGE>
- --------------------------------------------------------------------------------
GAM Funds, Inc. -- Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GAM International GAM Global GAM Europe
---------------------------- ---------------------------- --------------------------
For the six For the year For the six For the year For the six For the year
months ended ended months ended ended months ended ended
30th June, 31st Dec., 30th June, 31st Dec., 30th June, 31st Dec.,
1997 1996 1997 1996 1997 1996
--------------------------------------------------------------------------------------
(unaudited) (unaudited) (unaudited)
<S> <C> <C> <C> <C> <C> <C>
INCREASE/(DECREASE) IN NET
ASSETS FROM:
Operations
Net investment income/(loss) $ 6,944,779 $ 23,352,061 $ 33,541 $ 236,346 $ 262,020 $ 157,888
Net realized gain/(loss) 19,764,356 (3,924,932) 930,471 1,542,721 3,138,133 1,945,168
Unrealized appreciation for the
year 194,429,148 75,798,692 3,750,994 292,207 1,845,387 2,542,288
------------- ------------- ----------- ----------- ----------- -----------
Net increase in
net assets from operations 221,138,283 95,225,821 4,715,006 2,071,274 5,245,540 4,645,344
Dividends paid to shareholders
from:
Net investment income
Class A -- (3,931,303) -- (104,667) -- (12,643)
Class D -- (20,209) -- (765) -- --
Net realized gain on investments
Class A -- (1,784,396) -- (1,034,220) -- (709,600)
Class D -- (63,253) -- (43,139) --
Capital share transactions (Note 4) 211,318,038 390,160,627 7,891,221 (6,945,972) 10,670,638 (1,757,129)
------------- ------------- ----------- ----------- ----------- -----------
Total increase/(decrease)
in net assets 432,456,321 479,587,287 12,606,227 (6,057,489) 15,916,178 2,165,972
NET ASSETS
Beginning of period 1,048,535,332 568,948,045 20,398,263 26,455,752 25,127,405 22,961,433
-------------- -------------- ----------- ----------- ----------- -----------
End of period $1,480,991,653 $1,048,535,332 $33,004,490 $20,398,263 $41,043,583 $25,127,405
============== ============== =========== =========== =========== ===========
</TABLE>
See notes to financial statements.
41
<PAGE>
- --------------------------------------------------------------------------------
GAM Funds, Inc. -- Statements of Changes in Net Assets (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GAM Pacific Basin GAM Japan Captial GAM North America
-----------------------------------------------------------------------------------------
For the six For the year For the six For the year For the six For the year
months ended ended months ended ended months ended ended
30th June, 31st Dec., 30th June, 31st Dec., 30th June, 31st Dec.,
1997 1996 1997 1996 1997 1996
-----------------------------------------------------------------------------------------
(unaudited) (unaudited) (unaudited)
<S> <C> <C> <C> <C> <C> <C>
INCREASE/(DECREASE) IN NET
ASSETS FROM:
Operations
Net investment income/(1oss) $ 27,693 $ 136,753 ($171,866) ($173,050) ($8,141) ($21,847)
Net realized gain/(1oss) 2,496,520 7,490,904 326,885 3,411,826 94,265 562,745
Unrealized appreciation/
(depreciation) for the year 2,864,213 (9,000,460) 3,453,504 (4,080,940) 1,229,707 710,420
---------- ----------- ----------- ---------- ---------- ----------
Net incrcase/(decrease) in
net assets from operations 5,388,426 (1,372,803) 3,608,523 (842,164) 1,315,831 1,251,318
Dividends paid to shareholders
from:
Net investment income
Class A -- (2,363,071) -- (2,786,341) -- --
Class D -- (73,778) -- -- -- --
Net realized gain on investments
Class A -- (3,041,344) -- (326,642) -- (506,891)
Class D -- (101,996) -- -- -- --
Capital share transactions(Note 4) 4,711,400 3,147,400 (9,789,096) 26,871,997 1,674,512 (872,358)
----------- ----------- ----------- ----------- ---------- ----------
Total increase/(decrease)
in net assets 10,099,826 (3,805,592) (6,180,573) 22,916,850 2,990,343 (127,931)
NET ASSETS
Beginning of period 51,685,813 55,491,405 36,516,853 13,600,003 5,852,823 5,980,754
----------- ----------- ----------- ----------- ---------- ----------
End of period $61,785,639 $51,685,813 $30,336,280 $36,516,853 $8,843,166 $5,852,823
=========== =========== =========== =========== ========== ==========
</TABLE>
See notes to financial statements.
42
<PAGE>
- --------------------------------------------------------------------------------
GAM Funds, Inc. -- Statements of Changes in Net Assets (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GAM Asian Capital GAMerica Capital
-----------------------------------------------------------
For the six For the year For the six For the year
months ended ended months ended ended
30th June, 31st Dec., 30th June, 31st Dec.,
1997 1996 1997 1996
-----------------------------------------------------------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
INCREASE/(DECREASE) IN NET
ASSETS FROM:
Operations
Net investment income/(loss) ($34,758) ($50,095) ($35,096) ($87,946)
Net realized gain/(1oss) (226,125) (84,553) -- 292,631
Unrealized appreciation/
(depreciation) for the year 92,614 235,381 270,697 175,800
---------- --------- ---------- ----------
Net increase/(decrease) in
net assets from operations (168,269) 100,733 235,601 380,485
Dividends paid to shareholders from:
Net realized gain on investments
Class A -- (8,786) -- (169,707)
Capital share transactions (Note 4) (3,601,790) (23,103) (141,395) (1,316,024)
---------- --------- ---------- ----------
Total increase/(decrease)
in net assets (3,770,059) 68,844 94,206 (1,105,246)
NET ASSETS
Beginning of period 5,629,259 5,560,415 1,924,010 3,029,256
---------- ---------- ---------- ----------
End of period $1,859,200 $5,629,259 $2,018,216 $1,924,010
========== ========== ========== ==========
</TABLE>
See notes to financial statements.
43
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
AT 30TH JUNE, 1997 (UNAUDITED)
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES
GAM Funds, Inc. (the "Company"), is an open-end diversified investment company
registered under the Investment Company Act of 1940 comprised of eight
portfolios: GAM International Fund, GAM Global Fund, GAM Europe Fund, GAM
Pacific Basin Fund, GAM Japan Capital Fund, GAM North America Fund, GAM Asian
Capital Fund, and GAMerica Capital Fund (the "Funds").
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 to 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 of losses arise from sales of
foreign currencies, currency gains of 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.
44
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (CONTINUED)
- --------------------------------------------------------------------------------
Net unrealized foreign exchange gains and losses arise from changes in the value
of assets and liabilities other than investments in securities at fiscal period
end, resulting from changes in the exchange rate.
FOREIGN CURRENCY CONTRACTS
Each Fund may enter into forward foreign currency exchange contracts primarily
in order to hedge against foreign currency exchange rate risks on the non-US
dollar denominated investment securities. These contracts are valued daily and
the Funds' equity therein, representing unrealized gain or loss on the
contracts, is included in the Statement of Assets and Liabilities. Realized and
unrealized gains and losses are included in the Statement of Operations.
FUTURES CONTRACTS
Initial margin deposits made with respect to futures contracts traded on
domestic exchanges are maintained by the Funds' custodian in segregated asset
accounts. Initial margin deposits made upon entering into futures contracts
traded on foreign exchanges are recognized as assets due from the broker (the
Funds' agent in acquiring the futures positions). Subsequent changes in the
daily valuation of open contracts are recognized as unrealized gains or losses.
Variation margin payments are made or received on domestically traded futures as
appreciation or depreciation in the value of these contracts occurs. Realized
gains or losses are recorded when a contract is closed.
FEDERAL INCOME TAXES
It is each Fund's policy to satisfy the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income to shareholders. Therefore, no provision for Federal income taxes
is required.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions are recorded on the ex-dividend date. Income and capital gain
distributions are determined in accordance with income tax regulations which may
differ from generally accepted accounting principles. These differences, which
may result in distribution reclassifications, are primarily due to differing
treatments for futures transactions, foreign currency transactions, passive
foreign investment companies (PFIC), capital loss carryforwards and losses
deferred due to wash sales and excise tax regulations. Permanent book and tax
basis differences relating to shareholder distributions will result in
reclassifications to paid-in capital and may affect the per share 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.
45
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (CONTINUED)
- --------------------------------------------------------------------------------
OTHER
Securities transactions are recorded on the trade date basis. Interest is
accrued on a daily basis and market discount is accreted on a straight-line
basis. Dividend income is recorded on the ex-dividend date, except that certain
dividends on foreign securities are recorded as soon as information is available
to the Fund.
NOTE 2. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The Investment Adviser, GAM International Management Limited, receives a fee
under its agreement with the Company equivalent to 1% per annum of each Fund's
average daily net assets, except for GAM North America Fund. With respect to GAM
North America Fund, GAM International Management Limited and Fayez Sarofim & Co.
serve as co-investment advisers to the Fund. Each co-adviser receives a fee
under its agreement equivalent to 0.50% per annum of the Fund's average daily
net assets.
GAM Services, Inc. acts as principal underwriter of the Fund. For the six months
ended 30th June, 1997, GAM Services, Inc. received front-end sales load charges
of $1,217,191 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 0.30% 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 Pacific Japan North Asian GAMerica
Interational Global Europe Basin Capital America Captial 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 30th June, 1997, GAM Funds, Inc. had 700,000,000 shares of common stock,
$0.001 par value authorized which were allocated to each Fund as follows:
150,000,000 and 50,000,000 shares, respectively, were allocated to each of Class
A and Class D of GAM International, 50,000,000 and 25,000,000 shares,
respectively, were allocated to Class A and Class D of GAM Global, GAM Europe,
GAM Pacific Basin and GAM North America, 25,000,000 shares, were allocated to
each of Class A and Class D of GAMerica Capital, while 45,000,000 and 12,500,000
shares, respectively, were allocated to each of Class A and Class D of GAM Japan
Capital and GAM Asian Capital. Changes in each Fund's capital stock are
summarized as follows:
46
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GAM International Fund
For the Periods
------------------------------------------------------------
01-Jan-97 to 30-June-97 01-Jan-96 to 31-Dec-96
Shares US$ Shares US$
------------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
CLASS A
Shares sold 13,668,520 346,24l,103 33,365,859 692,156,317
Shares issued on reinvestment of dividends -- -- 219,386 4,843,204
Shares redeemed (6,080,591) (150,800,008) (16,170,479) (333,081,923)
----------- ------------ ----------- ------------
Net increase 7,587,929 195,441,095 17,414,766 363,917,598
=========== ============ =========== ============
CLASS D
Shares sold 827,646 21,072,547 1,461,453 30,255,446
Shares issued on reinvestment of dividends -- -- 3,688 78,975
Shares redeemed (210,152) (5,195,604) (195,341) (4,091,392)
------------ ----------- ------------ ------------
Net increase 617,494 15,876,943 1,269,800 26,243,029
=========== ============= ============ ============
</TABLE>
<TABLE>
<CAPTION>
GAM Global Fund
For the Periods
------------------------------------------------------------
01-Jan-97 to 30-June-97 01-Jan-96 to 31-Dec-96
Shares US$ Shares US$
------------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
CLASS A
Shares sold 1,199,844 19,052,693 899,878 11,907,144
Shares issued on reinvestment of dividends -- -- 64,567 915,513
Shares redeemed (730,871) (11,415,473) (1,535,935) (20,228,744)
---------- ----------- ---------- -----------
Net increase/(decrease) 468,973 7,637,220 (571,490) (7,406,087)
========== =========== ========== ===========
CLASS D
Shares sold 23,317 377, 143 54,061 697,624
Shares issued on reinvestment of dividends -- -- 2,735 38,450
Shares redeemed (8,088) (123,142) (21,328) (275,959)
---------- ----------- ---------- -----------
Net increase 15,229 254,001 35,468 460,115
========== =========== ========== ===========
</TABLE>
47
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GAM Europe Fund
For the Periods
------------------------------------------------------------
01-Jan-97 to 30-June-97 01-Jan-96 to 31-Dec-96
Shares US$ Shares US$
------------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
CLASS A
Shares sold 1,447,388 18,572,890 1,072,701 12,022,756
Shares issued on reinvestment of dividends -- -- 47,646 542,923
Shares redeemed (617,577) (7,902,252) (1,287,490) (14,322,808)
---------- ----------- ----------- -----------
Net increase/(decrease) 829,811 10,670,638 (167,143) (1,757,129)
========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
GAM Pacific Basin Fund
For the Periods
------------------------------------------------------------
01-Jan-97 to 30-June-97 01-Jan-96 to 31-Dec-96
Shares US$ Shares US$
------------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
CLASS A
Shares sold 1,007,704 15,669,446 2,466,475 43,289,379
Shares issued on reinvestment of dividends -- -- 265,013 4,074,012
Shares redeemed (737,898) (11,383,604) (2,646,254) (44,771,351)
---------- ----------- ----------- ------------
Net increase 269,806 4,285,842 85,234 2,592,040
========== =========== =========== ============
CLASS D
Shares sold 29,064 465,309 53,648 907,532
Shares issued on reinvestment of dividends -- -- 1,072 17,934
Shares redeemed (2,594) (39,751) (22,302) (370,106)
----------- ----------- ----------- ------------
Net increase 26,470 425,558 32,418 555,360
=========== =========== =========== ============
</TABLE>
48
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GAM Japan Capital Fund
For the Periods
------------------------------------------------------------
01-Jan-97 to 30-June-97 01-Jan-96 to 31-Dec-96
Shares US$ Shares US$
------------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
CLASS A
Shares sold 1,622,651 15,690,237 4,134,008 43,069,239
Shares issued on reinvestment of dividends -- -- 232,747 2,201,623
Shares redeemed (2,765,818) (25,479,333) (1,817,450) (18,398,865)
----------- ----------- ----------- -----------
Net increase/(decrease) (1,143,167) (9,789,096) 2,549,305 26,871,997
=========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
GAM North America Fund
For the Periods
------------------------------------------------------------
01-Jan-97 to 30-June-97 01-Jan-96 to 31-Dec-96
Shares US$ Shares US$
------------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
CLASS A
Shares sold 150,871 2,347,795 69,484 911,748
Shares issued on reinvestment of dividends -- -- 26,418 360,609
Shares redeemed (46,160) (673,283) (165,717) (2,144,715)
---------- ---------- ---------- ----------
Net increase/(decrease) 104,711 1,674,512 (69,815) (872,358)
========== ========== ========== ==========
</TABLE>
49
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GAM Asian Capital Fund
For the Periods
------------------------------------------------------------
01-Jan-97 to 30-June-97 01-Jan-96 to 31-Dec-96
Shares US$ Shares US$
-----------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A
Shares sold 47,709 474,340 414,332 4,143,499
Shares issued on reinvestment of dividends -- -- 146 1,512
Shares redeemed (43 1,805) (4,076,130) (425,435) (4,168,114)
--------- ----------- -------- ----------
Net decrease (384,096) (3,601,790) (10,957) (23,103)
========= =========== ======== ==========
GAMerica Capital Fund
For the Periods
------------------------------------------------------------
01-Jan-97 to 30-June-97 01-Jan-96 to 31-Dec-96
Shares US$ Shares US$
-----------------------------------------------------------
CLASS A
Shares sold 21,783 228,489 21,800 269,201
Shares issued on reinvestment of dividends -- -- 9,804 102,358
Shares redeemed (35,389) (369,884) (155,887) (1,687,583)
-------- --------- --------- ----------
Net decrease (13,606) (141,395) (124,283) (1,316,024)
======== ========= ========= ==========
</TABLE>
50
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (CONTINUED)
- --------------------------------------------------------------------------------
NOTE 5. INVESTMENT TRANSACTIONS
The cost of purchases and proceeds of sales of investment securities for the six
months ended 30th June, 1997 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
- -----------------------------------------------------------------------------------------------------------------------------------
In US$
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Purchases $462,163,879 $13,723,680 $19,899,523 $8,401,602 $ 8,295,372 $1,356,055 $ 743,133 --
Sales 270,300,084 6,403,515 9,917,589 8,506,226 18,593,536 488,170 4,457,677 --
Realized gains and losses are reported on an identified cost basis. At 30th
June, 1997, the aggregate gross unrealized appreciation and depreciation of
securities, based on cost for federal income taxes purposes, were as follows:
GAM GAM GAM GAM GAM GAM GAM GAMerica
International Global Europe Pacific Basin Japan Capital North America Asian Capital Capital
- -----------------------------------------------------------------------------------------------------------------------------------
In US$
Appreciation $308,568,529 $7,556,814 $6,124,578 $8,757,909 $4,367,944 $3,162,743 $225,803 $655,213
Depreciation 16,423,581 175,592 446,313 7,912,191 2,370,189 13,680 98,940 208,761
------------ ---------- ---------- ---------- ---------- ---------- -------- --------
Net $292,144,948 $7,381,222 $5,678,265 $ 845,718 $1,997,755 $3,149,063 $126,863 $446,452
============ ========== ========== ========== ========== ========== ======== ========
At 31st December, 1996, the Funds had tax basis net capital losses as follows.
These losses may be carried over to offset future capital gains through the
expiration dates shown:
GAM GAM GAM GAM GAM GAM GAM GAMerica
International Global Europe Pacific Basin Japan Capital North America Asian Capital Capital
- -----------------------------------------------------------------------------------------------------------------------------------
In US$ $4,340,589 -- -- -- $507,841 -- -- --
Carryforward 31st Dec, -- -- -- 31st Dec, -- -- --
Expiration
dates 2003-2004 -- -- -- 2003 -- -- --
Foreign taxes withheld from dividends and interest for the six months ended 30th
June, 1997, were as follows:
GAM GAM GAM GAM GAM GAM GAM GAMerica
International Global Europe Pacific Basin Japan Capital North America Asian Capital Capital
- -----------------------------------------------------------------------------------------------------------------------------------
In US$
Dividends $2,103,203 $14,382 $62,533 $47,701 $21,521 $110 $1,007 --
Interest -- -- -- -- 14 -- -- --
</TABLE>
51
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (CONTINUED)
- --------------------------------------------------------------------------------
NOTE 6. FINANCIAL INSTRUMENTS
During the period, several of the Funds have been party to financial instruments
with off-balance sheet risks, including forward foreign currency contracts and
futures contracts, primarily in an attempt to minimize the risk to the Fund, in
respect of its portfolio transactions. These instruments involve market and/or
credit risk in excess of the amount recognized in the Statement of Assets and
Liabilities. Risks arise from the possible inability of counterparties to meet
the terms of their contracts and from movement in currencies and securities
values and interest rates. The contract amount indicates the extent of the
Funds' involvement in such contracts.
Forwards: When entering a forward currency contract, the Fund agrees to receive
or deliver a fixed quantity of foreign currency for an agreed upon price on an
agreed upon future date.
At 30th June, 1997 the Fund had outstanding forward contracts for the purchase
and sale of currencies as set out below. The contracts are reported in the
financial statements the the Fund's net equity, as measured by the difference
between the forward foreign exchange rates at the dates of entry into the
contracts and the forward rates at the reporting date, or the date an offsetting
position, if any, has been entered into.
GAM INTERNATIONAL FUND
Unrealized
appreciation/
(depreciation)
--------------
US$
497,550,000 Belgian francs sold vs. 15,000,000 US$,
23rd July, 1997 1,147,138
175,850,000 Belgian francs sold vs. 5,000,000 US$,
29th October, 1997 70,002
15,851,550 Swiss francs sold vs. 11,000,000 US$,
10th October, 1997 (696)
147,959,500 Swiss francs sold vs. 103,000,000 US$,
17th October, 1997 318,722
188,071,000 German marks sold vs. 120,000,000 US$,
15th July, 1997 12,017,649
130,320,000 Danish krone sold vs. 20,000,000 US$,
29th December, 1997 147,689
5,792,920,000 Spanish pesetas sold vs. 42,000,000 US$,
17th July, 1997 2,672,152
687,345,500 French francs sold vs. 125,000,000 US$,
15th July, 1997 7,924,106
135,483,229 UK Pound sterling sold vs. 221,000,000 US$,
24th July, 1997 (4,464,592)
27,393,310,000 Japanese yen sold vs. 236,000,000 US$,
22nd July, 1997 (3,864,882)
241,609,500 Dutch guilders sold vs. 150,000,000 US$,
14th July, 1997 11,773,163
146,987,500 Swedish krona sold vs. 20,000,000 US$,
30th July, 1997 932,755
-----------
Net equity in foreign currency exchange contracts $28,673,206
===========
52
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (CONTINUED)
- --------------------------------------------------------------------------------
GAM GLOBAL FUND
US$
2,154,910 Swiss francs sold vs. 1,500,000 US$,
17th October, 1997 5,225
5,103,755 French francs sold vs. 900,000 US$,
15th July, 1997 46,894
3,454,800 French francs sold vs. 600,000 US$,
16th December, 1997 5,316
975,677 UK Pound sterling sold vs. 1,600,000 US$,
24th July, 1997 (23,675)
215,530,100 Japanese yen sold vs. 1,470,000 US$,
22nd July, 1997 (57,253)
2,852,391 Dutch guilders sold vs. 1,610,000 US$,
14th July, 1997 154,699
1,719,700 German marks bought vs. 1,088,736 US$,
15th July, 1997 87,567
--------
Net equity in foreign currency exchange contracts $218,773
========
GAM EUROPE FUND
US$
4,000,000 Swiss francs sold vs. 2,790,714 US$,
29th July, 1997 41,392
2,600,000 German marks sold vs. 1,511,804 US$,
28th July, 1997 17,692
171,000,000 Spanish pesetas sold vs. 1,175,096 US$,
28th July, 1997 14,065
9,750,000 Finnish markka sold vs. 1,893,608 US$,
29th July, 1997 8,610
38,250,000 French francs sold vs. 6,571,036 US$,
25th July, 1997 51,100
5,600,000,000 Italian lira sold vs. 3,314,159 US$,
25th July, 1997 21,961
9,200,000 Dutch guilders sold vs. 4,756,734 US$,
29th July, 1997 58,967
13,000,000 Norwegian kroner sold vs. 1,795,630 US$,
25th July, 1997 15,895
29,500,000 Swedish krona sold vs. 3,833,559 US$,
25th July, 1997 7,644
--------
Net equity in foreign currency exchange contracts $237,326
========
53
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (CONTINUED)
- --------------------------------------------------------------------------------
GAM PACIFIC BASIN FUND
US$
1,064,869,200 Japanese yen sold vs. 8,600,000 US$,
22nd July, 1997 (724,347)
---------
Net equity in foreign currency exchange contracts $(724,347)
=========
GAM JAPAN CAPITAL FUND
US$
125,160,000 Japanese yen sold vs. 1,000,000 US$,
14th July, 1997 (94,516)
873, 180,000 Japanese yen sold vs. 7,000,000 US$,
17th July, 1997 (639,629)
1,066,155,000 Japanese yen sold vs. 8,500,000 US$,
6th August, 1997 (857,312)
-----------
Net equity in foreign currency exchange contracts $(1,591,457)
===========
At 30th June, 1997 the Funds had sufficient cash and/or securities to cover any
commitments under these Contracts.
54
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (CONTINUED)
- --------------------------------------------------------------------------------
NOTE 7. SELECTED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Per share operating performance (for a share outstanding throughout the period)
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations Less distributions
------------------------------------------ ------------------------------------
Net realized Dividends Distributions
Net asset value, Net and unrealized Total from from net from net Net asset
beginning investment gain/(loss) on investment investment realized Total value, end
of period income/(loss) investments operations income gains Distributions of period
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
01-JAN-97 TO
30-JUN-97
(UNAUDITED)
US$
GAM International
Class A US$ 23.15 0.14+ 4.39 4.53 -- -- -- US$ 27.68
Class D US$ 23.07 0.13+ 4.38 4.51 -- -- -- US$ 27.58
GAM Global
Class A US$ 14.35 0.02+ 2.95 2.97 -- -- -- US$ 17.32
Class D US$ 14.22 0.01+ 2.93 2.94 -- -- -- US$ 17.16
GAM Europe
Class A US$ 11.85 0.11+ 1.96 2.07 -- -- -- US$ 13.92
GAM Pacific Basin
Class A US$ 15.26 0.01+ 1.51 1.52 -- -- -- US$ 16.78
Class D US$ 15.20 -- 1.49 1.49 -- -- -- US$ 16.69
GAM Japan Capital
Class A US$ 9.39 (0.05)+ 1.71 1.66 -- -- -- US$ 11.05
GAM North America
Class A US$ 13.56 (0.02)+ 2.95 2.93 -- -- -- US$ 16.49
GAM Asian Capital
Class A US$ 9.83 (0.09)+ 0.12 0.03 -- -- -- US$ 9.86
GAMerica Capital
Class A US$ 10.82 (0.20)+ 1.67 1.47 -- -- -- US$ 12.29
01-Jan-96 to
31-Dec-96
US$
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
</TABLE>
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
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
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
01-Jan-93 to
31-Dee-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.ll) 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-Dee-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
+ For the six months ended 30th June, 1997 and 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.
</TABLE>
56
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratios/supplemental data
----------------------------------------------------------------------------------------------
Ratios to average net assets
----------------------------
Total return
(without Net asses 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> <C>
01-Jan-97 to
30-Jun-97
(unaudited)
US$
GAM International
Class A 19.57% US$ 1,417,685 1.70%* 1.16%* 47% 0.0580
Class D 19.55% US$ 63,307 1.84%* 1.05%* 47% 0.0580
GAM Global
Class A 20.70% US$ 31,759 2.08%* 0.28%* 55% 0.0563
Class D 20.68% US$ 1,245 2.15%* 0.09%* 55% 0.0563
GAM Europe
Class A 17.47% US$ 41,044 1.96%* 1.70%* 67% 0.0310
GAM Pacific Basin
Class A 9.96% US$ 59,280 2.02%* 0.11%* 33% 0.0203
Class D 9.80% US$ 2,505 2.14%* 0.02%* 33% 0.0203
GAM Japan Capital
Class A 17.68% US$ 30,336 2.20%* (1.18)%* 65% 0.0632
GAM North America
Class A 21.61% US$ 8,843 2.24%* (0.24)%* 15% 0.0600
GAM Asian Capital
Class A 0.31% US$ 1,859 4.66%* (1.83)%* 39% 0.0086
GAMerica Capital
Class A 13.59% US$ 2,018 4.79%* (3.71)%* -- --
01-Jan-96 to
31-Dee-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 Globe
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$ 1,927 5.16% (3.79)% 27% 0.0533
</TABLE>
57
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratios/supplemental data
----------------------------------------------------------------------------------------------
Ratios to average net assets
----------------------------
Total return
(without Net asses 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> <C>
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 9.33% 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 6.68% 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 Bash
Class A 4.50% US$ 53,944 1.98% (0.07)% 64.01% --
Class D 2.22% 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% l10.48% --
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 Bash 7.41% US$ 4~,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 asses 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> <C>
1-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 returns for the year ended 31st
December, 1996 include amounts paid through expense offset arrangements.
Prior and subsequent period ratios exclude these amounts.
++++ Total return calculated for a period of less than one year is not
annualised.
$ 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. This amount includes commissions paid to
foreign brokers which may materially affect the rate shown. Amounts paid in
foreign currencies have been converted into US dollars using the prevailing
exchange rate on the date of the transaction.
59
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Bank loans
--------------------------------------------------------------------------------
Average
Average amount number of shares Average
Amounts of bank loans outstanding amount of
outstanding outstanding during the period debt per share
end of period during the period (monthly average) during
(000) omitted) (OO0 omitted) (00O omitted) the period
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
01-Jan-97 to
30-Jun-97
(unaudited)
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 -- US$5,491 2,948 1.86
GAM North America
Class A
GAM Asian Capital
Class A
GAMerica Capital
Class A
01-Jan-96 to
31-Dec-96
US$
GAM International
Class A
Class D
GAM Global
Class A
Class D
GAM Europe
Class A
GAM Pacific Bash
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) (OO0 omitted) (00O omitted) the period
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
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
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-Dee-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
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<PAGE>
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