<PAGE>
G.T. CAPITAL
[LOGO]
TWENTY-FIVE
YEARS OF
PROVIDING
ACCESS TO
GLOBAL MARKETS
/ /
G.T. GLOBAL
CONSUMER PRODUCTS
AND SERVICES
FUND
/ /
SEMIANNUAL REPORT
APRIL 30, 1995
<PAGE>
TABLE
OF CONTENTS
<TABLE>
<S> <C>
Report from the Fund
Managers and Key
Portfolio Holdings..... 1
Financial Statements... F-1
</TABLE>
<PAGE>
REPORT FROM THE FUND MANAGERS
The G.T. Global Consumer Products and Services Fund seeks long-term capital
growth by investing primarily in securities of companies throughout the world
that manufacture, market, retail or distribute consumer products and services.
PERFORMANCE REVIEW
The Fund's total return from inception on December 30, 1994, through April 30,
1995, for Class A shares was 1.92%, (-2.92% including the maximum 4.75% sales
charge). Total return for Class B shares was 1.75% (-3.25% including the maximum
effect of the 5% contingent deferred sales charge). For the same period, the
Morgan Stanley Capital International (MSCI) World Index(1) had a total return of
4.82%. For additional performance information, please see page 7.
The Fund underperformed the index because, as a new fund, it was not fully
invested for much of the investment period and thus was not able to participate
in the run-up in world stock markets, particularly the U.S. stock market, during
that time. Since the beginning of April, the Fund has been between 85% and 95%
invested.
WHY A CONSUMER PRODUCTS AND SERVICES FUND?
In this first report of the G.T. Global Consumer Products and Services Fund, we
would like to discuss why we introduced the Fund and what we believe makes the
consumer products and services area attractive.
Historically, as incomes have risen, consumption has correspondingly increased.
With global economic growth expected to remain healthy over the medium term, we
expect global income to rise, as it has in the past, resulting in higher
consumption levels of consumer products and services. The G.T. Global Consumer
Products and Services Fund invests in companies we think will benefit from this
upward trend in global consumption.
In general, consumer products and services companies have several attributes
that we believe make them attractive investments. For instance, consumer product
companies often have distinguished franchises or name-brand products instead of
non-differentiated, commodity products. Branded products tend to compete more on
perceived value rather than strictly on price. Most consumer products also see
- ------------------
(1) The MSCI World Index is an arithmetic average, weighted by market value, of
the performance of 1,582 securities listed on the major world stock
exchanges of the U.S., Europe, Canada, Australia, New Zealand and the Far
East. It includes the effect of reinvested dividends and is measured in U.S.
dollars.
1
<PAGE>
frequent, repetitive consumption - making the companies less dependent on
business cycles. Lastly, many consumer product companies tend to have low fixed
assets and high, unrestricted cash flow. High cash generation allows some
consumer product companies to reinvest in core businesses, make acquisitions,
repurchase stock or debt, or increase their dividend.
MARKET REVIEW
DEVELOPED MARKETS
Many of the Fund's holdings are companies from developed nations. While many of
these companies are domiciled in the U.S. or Europe, they are indisputably
multinational. In fact, many multinationals enjoy strong revenue growth from
sales outside their home countries. Assuming the U.S. economy gently slows, we
believe multinationals should still be able to perform well as they continue to
benefit from rising emerging market sales.
EMERGING MARKETS
Gross domestic product (GDP) of the emerging markets has been rising at a faster
rate than the GDP of the developed world. Since 1989, G-7(2) GDP has grown at
1.9% per annum, while emerging nations have seen GDP growth of 4.2%. Looking
forward, the World Bank estimates that G-7 will grow at 2.8% annually, versus
5.3% for the developing world.
Higher emerging markets growth rates often translate into increased sales.
Typically, as countries increase their wealth, the population spends a lower
percentage on basic necessities such as consumer staples (e.g., food), which
creates additional income to spend on non-consumer staples (luxury items). In
Asia, there is a very strong inverse correlation between GDP per capita and the
percentage of income spent on food. In Vietnam, Indonesia, China and the
Philippines, where annual per capita income is low ($200-$800), the percentage
of income spent on food is very high (55%-78%), while in Hong Kong and
Singapore, where the annual per capita income is higher ($18,000), the
percentage of income spent on food is very low (15%-18%).
- ------------------
(2) The G-7 nations include the U.S., the UK, Canada, Germany, Japan, France and
Italy.
2
<PAGE>
PORTFOLIO STRATEGY AND OUTLOOK
Our investment strategy is to select companies based on, among other things,
earnings growth potential. The Fund seeks diversification through multinational
companies as well as individually selected emerging market companies. We
particularly favor several Hong Kong stocks, viewing the Hong Kong market as
both cheap in historical terms and as a gateway to mainland China's booming
growth. We believe China offers significant prospects based on its increasing
individual wealth and demonstrated preference for branded products.
Going forward, we expect the Fund to become more diversified as many emerging
markets bottom out and buying opportunities surface. While global economic
growth may not outstrip previous years' performance, we remain fully confident
that the global economy will continue to grow steadily. Our outlook towards
medium-term global consumerism is optimistic.
<TABLE>
<S> <C>
CHRISTIAN WIGNALL DEREK WEBB
CHIEF INVESTMENT OFFICER PORTFOLIO MANAGER
GLOBAL EQUITIES SAN FRANCISCO
SAN FRANCISCO
JOHN NADELL
ASST. PORTFOLIO MANAGER
TOKYO
JUNE 1, 1995
</TABLE>
G.T. GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
3
<PAGE>
TOP PORTFOLIO HOLDINGS*
PHILLIP MORRIS U.S.
Phillip Morris is an international tobacco and food company. Its business
includes domestic tobacco, 31%; international tobacco, 30%; international food,
23%; domestic food, 11%; and beer, 4%. We expect Phillip Morris' earnings to
grow at approximately 15% per annum over the next two years. The stock is
currently inexpensive, making it even more attractive. Phillip Morris has been
very profitable and has one of the highest returns on equity in the S&P 500 at
58% for 1994, as well as substantial excess cash flow. The one downside of the
stock remains its vulnerability to litigation, although we believe it is well
positioned to limit any extending damage.
AMWAY ASIA PACIFIC HONG KONG
Amway Asia Pacific sells Amway products throughout Southeast Asia, Australia and
New Zealand, and has recently entered China. Amway products sell very well in
Austral-Asia, as evidenced by Amway's 28% annual growth in sales, and the 30%
annual growth in earnings over the last five years. Earnings are expected to
continue to grow at 20% annually over the next few years, given Amway's new push
into China. Amway Asia has been profitable, with its return on equity an
impressive 45%. The company generates substantial excess cash flow which it says
it will filter back into the business and increase the dividend.
THE SINGER COMPANY HONG KONG
Singer is the largest sewing machine manufacturer in the world; it is also one
of the largest distributors/retailers of sewing machines and other consumer
durables in emerging markets, with over 40,000 distribution points including
over 1,100 stores. With strong brand recognition in the emerging markets, we
expect Singer to benefit from growing spending on luxury items. Singer recently
reentered China, where sewing machine consumption is 40% of world consumption.
AMERICAN STORES U.S.
American Stores concentrates on two core businesses: grocery stores, 70%, under
the Lucky, Acme, and Jewel names; and drug stores, 30%, under the Osco and
Sav-on names. American Stores is undergoing significant restructuring in an
effort to increase margins through lower costs. The company's goal is to cut
costs by 1% of sales, which could increase earnings by 50%.
- ------------------
* There can be no assurance the Fund will continue to hold these or any other
securities mentioned in this report.
4
<PAGE>
THREE FIVE SYSTEMS U.S.
Three Five makes light-emitting diodes for cellular phones for Motorola and
anticipates an annual earnings growth of over 30%. In our opinion, Three Five
has excellent financial characteristics. It is debt free, has a 50% return on
equity and generates substantial excess cash.
TANDY CORPORATION U.S.
Tandy's primary business is Radio Shack, which we consider an excellent niche
business with a high return on equity in excess of 30%. Radio Shack also
generates substantial excess cash that the company expects to use to fund
business expansion in two areas: The Incredible Universe and Computer City. The
Incredible Universe stores are the largest electronic stores in the world, while
Computer City stores specialize in computers and computer-related products.
Tandy is reasonably priced and plans to continue repurchasing stock.
YUE YUEN INDUSTRIAL HOLDINGS HONG KONG
Yue Yuen manufactures sneakers for Nike, Reebok and other international sporting
shoe companies. With plants throughout China and Southeast Asia, we consider Yue
Yuen a low-cost manufacturer. Earnings are projected to grow 20% annually for
the next two years, as the company expands capacity, which the company says can
be funded internally. Yue Yuen stock is relatively inexpensive and has a 5.6%
yield.
RJR NABISCO U.S.
RJR is an international tobacco and food company with operations in domestic
tobacco (41%); international tobacco (23%); and Nabisco food (36%). We believe
RJR is inexpensive, with earnings expected to grow 17% annually. In addition,
the stock also offers a 5% yield. In our view, RJR's susceptibility to
litigation is not a deterring factor.
NOKIA FINLAND
Nokia is the second largest manufacturer of cellular phones and base stations in
the world. It has particularly strong sales in Southeast Asia, one of the most
rapidly expanding cellular phone markets in the world. As noted above, cellular
phones are one of the fastest growing consumer electronic categories, increasing
by 20%-30% annually. We believe Nokia will be a prime beneficiary of this growth
and consider it reasonably valued, selling for 15 times 1995 earnings.
5
<PAGE>
ANN TAYLOR STORES U.S.
Ann Taylor, a domestic retailer of women's clothing, had one of the higher
operating margins in retailing at 13% in 1994. In addition, Ann Taylor is
expanding rapidly with plans to increase square footage 43% in 1995 and 30% in
1996. The company plans to finance this expansion internally.
6
<PAGE>
G.T. GLOBAL CONSUMER PRODUCTS AND
SERVICES FUND
PORTFOLIO SUMMARY
THE CHART AT LEFT SHOWS THE PERFORMANCE OF THE G.T. GLOBAL
CONSUMER PRODUCTS AND SERVICES FUND CLASS A SHARES SINCE THE FUND'S INCEPTION
VERSUS THE MSCI WORLD INDEX. THIS REPRESENTS A CUMULATIVE RETURN OF -2.9%. THE
CHART ASSUMES A HYPOTHETICAL $10,000 INITIAL INVESTMENT IN THE FUND'S CLASS A
SHARES AND REFLECTS ALL FUND EXPENSES AND THE MAXIMUM 4.75% SALES CHARGE.
INVESTORS SHOULD NOTE THAT THE FUND IS A PROFESSIONALLY MANAGED MUTUAL FUND
WHILE THE INDEX IS UNMANAGED, DOES NOT INCUR EXPENSES AND IS NOT AVAILABLE FOR
INVESTMENT. THE PERFORMANCE OF OTHER CLASSES WILL BE GREATER OR LESS THAN THE
LINE SHOWN BASED ON DIFFERENCES IN CHARGES AND FEES PAID BY SHAREHOLDERS
INVESTING IN DIFFERENT CLASSES.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
G.T. Global
Consumer
Products
and
Services
Fund MSCI World
<S> <C> <C>
12/31/94 9,525 10,000
01/31/95 9,467 9,852
02/28/95 9,533 9,997
03/31/95 9,858 10,481
04/30/95 9,708 10,849
</TABLE>
CUMULATIVE TOTAL RETURNS
DECEMBER 30, 1994 -- APRIL 30, 1995
<TABLE>
<CAPTION>
SHARE WITHOUT SALES CHARGE WITH SALES CHARGE+
CLASS LIFE OF FUND LIFE OF FUND
<S> <C> <C>
CLASS A* 1.92% -2.92%
CLASS B* 1.75% -3.25%
<FN>
* The Fund began operations on December 30, 1994.
+ The performance of the Class A and Class B shares reflects the effects of
the maximum 4.75% sales charge or the maximum applicable contingent deferred
sales charge (5% in first year, decreasing to 0% after six years).
</TABLE>
THE DATA ABOVE REPRESENT PAST PERFORMANCE OF THE FUND'S SHARES, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT
IN THE FUND WILL FLUCTUATE, SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
GEOGRAPHIC ALLOCATION OF NET ASSETS AS OF APRIL 30, 1995 SECTOR ALLOCATION OF NET ASSETS AS OF APRIL 30, 1995
<S> <C> <C> <C>
UNITED STATES 70.4% CONSUMER NON-DURABLES 22.8%
ASIA - PACIFIC 14.2% RETAILERS 16.5%
CANADA 7.4% SERVICES 14.9%
EUROPE 4.0% CONSUMER DURABLES 13.3%
LATIN AMERICA 4.0% BEVERAGES - ALCOHOLIC 7.4%
TEXTILES & APPAREL 4.3%
FINANCE 3.9%
SHORT-TERM & OTHER 16.9%
</TABLE>
ALLOCATIONS WILL CHANGE BASED ON CURRENT MARKET CONDITIONS.
7
<PAGE>
/ /
G.T. GLOBAL
CONSUMER PRODUCTS
AND SERVICES
FUND
/ /
FINANCIAL
STATEMENTS
<PAGE>
G.T. GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
STATEMENT OF ASSETS
AND LIABILITIES
April 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Assets:
<S> <C>
Investments in Global Consumer Products and Services Portfolio (cost $1,933,316) (Note 1).............. $1,954,472
Receivable for expense reimbursement (Note 2).......................................................... 170,013
Unamortized organizational expenses (Note 1)........................................................... 48,085
Receivable for Fund shares sold........................................................................ 30,012
----------
Total assets........................................................................................... 2,202,582
----------
Liabilities:
Payable for deferred organizational expenses (Note 1).................................................. 42,323
Payable for printing and postage expenses.............................................................. 18,000
Payable for registration fees.......................................................................... 9,185
Payable for professional fees.......................................................................... 7,845
Payable for administration fees (Note 2)............................................................... 1,173
Payable for transfer agent fees (Note 2)............................................................... 1,167
Payable for service and distribution expenses (Note 2)................................................. 971
Payable for fund accounting fees....................................................................... 94
Accrued expenses....................................................................................... 595
----------
Total liabilities...................................................................................... 81,353
----------
Net assets............................................................................................... $2,121,229
----------
----------
Class A:
Net asset value and redemption price per share
($1,615,464 DIVIDED BY 138,685 shares outstanding)..................................................... $ 11.65
----------
----------
Maximum offering price per share
(100/95.25 of $11.65)*.................................................................................. $ 12.23
----------
----------
Class B:+
Net asset value and redemption price per share
($505,765 DIVIDED BY 43,472 shares outstanding)........................................................ $ 11.63
----------
----------
Net assets consist of:
Paid in capital (Note 3)............................................................................... $2,094,817
Undistributed net investment income.................................................................... 12,183
Accumulated net realized loss on investments and foreign currency transactions -- Global Consumer
Products and Services Portfolio....................................................................... (6,927)
Net unrealized depreciation on translation of assets and liabilities in foreign currencies -- Global
Consumer Products and Services Portfolio.............................................................. (191)
Net unrealized appreciation of investments -- Global Consumer Products and Services Portfolio.......... 21,347
----------
Total -- representing net assets applicable to capital shares outstanding.............................. $2,121,229
----------
----------
- ----------------
<FN>
* On sales of $50,000 or more, the offering price is reduced.
+ Redemption price per share is equal to the net asset value per share less
any applicable contingent deferred sales charge.
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-1
<PAGE>
G.T. GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
STATEMENT OF OPERATIONS
December 30, 1994 (commencement of operations) to April 30, 1995
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Investment income:
Interest income -- Global Consumer Products and Services Portfolio....................................... $ 16,808
Dividend income -- Global Consumer Products and Services Portfolio....................................... 7,024
---------
Total investment income.................................................................................. 23,832
---------
Expenses:
Expenses -- Global Consumer Products and Services Portfolio.............................................. 24,076
Registration fees........................................................................................ 97,000
Legal fees............................................................................................... 19,200
Printing and postage expenses............................................................................ 18,000
Audit fees............................................................................................... 8,400
Directors' fees and expenses (Note 2).................................................................... 3,600
Amortization of organizational expenses (Note 1)......................................................... 3,415
Transfer agent fees (Note 2)............................................................................. 2,767
Service and distribution expenses (Note 2):
Class A..................................................................................... $ 1,953
Class B..................................................................................... 784 2,737
---------
Administration fees (Note 2)............................................................................. 1,173
Fund accounting fees..................................................................................... 94
Other.................................................................................................... 1,200
---------
Total expenses before expense reimbursement.............................................................. 181,662
Less expense reimbursement (Note 2).................................................................... (170,013)
---------
Total net expenses....................................................................................... 11,649
---------
Net investment income...................................................................................... 12,183
---------
Net realized and unrealized gain (loss) on investments and foreign currencies:
Net realized loss on investments -- Global Consumer Products and Services Portfolio........... (3,890)
Net realized loss on foreign currency transactions -- Global Consumer Products and Services
Portfolio.................................................................................... (3,037)
---------
Net realized loss during the period.................................................................... (6,927)
Net change in unrealized depreciation on translation of assets and liabilities in foreign
currencies -- Global Consumer Products and Services Portfolio................................ (191)
Net change in unrealized appreciation of investments -- Global Consumer Products and Services
Portfolio.................................................................................... 21,347
---------
Net unrealized appreciation during the period.......................................................... 21,156
---------
Net realized and unrealized gain on investments and foreign currencies -- Global Consumer Products
and Services Portfolio.................................................................................... 14,229
---------
Net increase in net assets resulting from operations....................................................... $ 26,412
---------
---------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-2
<PAGE>
G.T. GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DECEMBER 30, 1994
(COMMENCEMENT OF OPERATIONS)
TO APRIL 30, 1995
(UNAUDITED)
-----------------------------
<S> <C>
Increase in net assets
Operations:
Net investment income.............................................................................. $ 12,183
Net realized loss on investments and foreign currency transactions -- Global Consumer Products and
Services Portfolio................................................................................ (6,927)
Net change in unrealized depreciation on translation of assets and liabilites in foreign currencies
-- Global Consumer Products and Services Portfolio................................................ (191)
Net change in unrealized appreciation of investments -- Global Consumer Products and Services
Portfolio......................................................................................... 21,347
-----------
Net increase in net assets resulting from operations............................................... 26,412
Capital share transactions (Note 3):
Increase from shares sold.......................................................................... 2,028,535
Decrease from shares repurchased................................................................... (33,718)
-----------
Net increase from capital share transactions....................................................... 1,994,817
-----------
Total increase in net assets......................................................................... 2,021,229
Net assets:
Beginning of period................................................................................ 100,000
-----------
End of period...................................................................................... $ 2,121,229
-----------
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-3
<PAGE>
G.T. GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
CLASS A CLASS B
DECEMBER 30, 1994 DECEMBER 30, 1994
(COMMENCEMENT OF OPERATIONS) (COMMENCEMENT OF OPERATIONS)
TO APRIL 30, 1995 TO APRIL 30, 1995
(UNAUDITED)* (UNAUDITED)*
---------------------------- ----------------------------
<S> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period................................. $ 11.43 $ 11.43
------- -------
Income from investment operations:
Net investment income.............................................. 0.10 0.08
Net realized and unrealized gain on investments.................... 0.12 0.12
------- -------
Net increase in net asset value from investment operations........... 0.22 0.20
------- -------
Net asset value, end of period....................................... $ 11.65 $ 11.63
------- -------
------- -------
Total investment return (c).......................................... 1.92%(b) 1.75%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's)................................. $ 1,615 $ 506
Ratio of net investment income to average net assets:
With reimbursement by G.T. Capital Management, Inc............... 2.66%(a) 2.16%(a)
Without reimbursement by G.T. Capital Management, Inc............ (33.87)%(a) (34.37)%(a)
Ratio of expenses to average net assets:
With reimbursement by G.T. Capital Management, Inc............... 2.40%(a) 2.90%(a)
Without reimbursement by G.T. Capital Management, Inc............ 38.93%(a) 39.43%(a)
- ----------------
<FN>
(a) Annualized.
(b) Not annualized.
(c) Total investment return does not include sales charges.
* These selected per share data were calculated based upon weighted average
shares outstanding during the period.
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-4
<PAGE>
G.T. GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
NOTES TO
FINANCIAL STATEMENTS
April 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
G.T. Global Consumer Products and Services Fund ("Fund") is a separate series of
G.T. Investment Funds, Inc. ("Company"). The Company is organized as a Maryland
corporation and is registered under the Investment Company Act of 1940, as
amended ("1940 Act"), as a diversified, open-end management investment company.
The Company has twelve series of shares in operation, each series corresponding
to a distinct portfolio of investments. The Fund invests substantially all of
its investable assets in Global Consumer Products and Services Portfolio
("Portfolio"), which is registered as an open-end management investment company
under the 1940 Act and has investment objectives, policies and limitations
substantially identical to those of the Fund. The value of the Fund's investment
in the Portfolio reflects the Fund's proportionate interest in the net assets of
the Portfolio. The financial statements of the Portfolio, including the
Portfolio of Investments, are included elsewhere in this Report and should be
read in conjunction with the Fund's financial statements.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of the financial statements. The
policies are in conformity with generally accepted accounting principles.
(A) INVESTMENT VALUATION
Valuation of securities and other investment practices by the Portfolio are
discussed in Note 1 of the Portfolio's Notes to Financial Statements which are
included elsewhere in this Report.
(B) TAXES
It is the policy of the Fund to meet the requirements for qualification as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended ("Code"). It is also the intention of the Fund to make distributions
sufficient to avoid imposition of any excise tax under Section 4982 of the Code.
Therefore, no provision has been made for Federal taxes on income, capital
gains, or unrealized appreciation of securities held and excise tax on income
and capital gains.
(C) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by the Fund on the ex-date. Income
and capital gain distributions are determined in accordance with Federal income
tax regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments of income and gains
on various investment securities held by the Portfolio and timing differences.
(D) DEFERRED ORGANIZATIONAL EXPENSES
Expenses incurred by the Fund in connection with its organization, its
registration with the Securities and Exchange Commission and with various states
and the initial public offering of its shares aggregated $51,500. These expenses
are being amortized on a straightline basis over a five-year period.
2. RELATED PARTIES
G.T. Capital Management, Inc. ("G.T. Capital") is the Fund's administrator. The
Fund pays administration fees to G.T. Capital at the annualized rate of 0.25% of
the Fund's average daily net assets. These fees are computed daily and paid
monthly, and are subject to reduction in any year to the extent that the Fund's
expenses (exclusive of brokerage commissions, taxes, interest,
distribution-related expenses and extraordinary items) exceed the most stringent
limits prescribed by the laws or regulations of any state in which the Fund's
shares are offered for sale, based on the average total net asset value of the
Fund.
G.T. Global Financial Services, Inc. ("G.T. Global"), an affiliate of G.T.
Capital, serves as the Fund's distributor. The Fund offers Class A shares and
Class B shares for purchase.
Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Fund's current
prospectus. G.T. Global collects the sales charges imposed on sales of Class A
shares, and reallows a portion of such charges to dealers through which the
sales are made. For the period ended April 30, 1995, G.T. Global retained $897
of such sales charges. G.T. Global also makes ongoing shareholder servicing and
trail commission payments to dealers whose clients hold Class A shares.
F-5
<PAGE>
G.T. GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
Class B shares are not subject to initial sales charges. When Class B shares are
sold, G.T. Global from its own resources pays commissions to dealers through
which the sales are made. Certain redemptions of Class B shares made within six
years of purchase are subject to contingent deferred sales charges ("CDSCs"), in
accordance with the Fund's current prospectus. For the period ended April 30,
1995, G.T. Global collected CDSCs in the amount of $80. In addition, G.T. Global
makes ongoing shareholder servicing and trail commission payments to dealers
whose clients hold Class B shares.
Pursuant to Rule 12b-1 under the 1940 Act, the Company's Board of Directors has
adopted separate plans of distribution with respect to the Fund's Class A shares
("Class A Plan") and Class B shares ("Class B Plan"), pursuant to which the Fund
reimburses G.T. Global for a portion of its shareholder servicing and
distribution expenses. Under the Class A Plan, the Fund may pay G.T. Global a
service fee at the annualized rate of up to 0.25% of the average daily net
assets of the Fund's Class A shares for G.T. Global's expenditures incurred in
servicing and maintaining shareholder accounts, and may pay G.T. Global a
distribution fee at the annualized rate of up to 0.50% of the average daily net
assets of the Fund's Class A shares, less any amounts paid by the Fund as the
aforementioned service fee, for G.T. Global's expenditures incurred in providing
services as distributor. All expenses for which G.T. Global is reimbursed under
the Class A Plan will have been incurred within one year of such reimbursement.
Pursuant to the Fund's Class B Plan, the Fund may pay G.T. Global a service fee
at the annualized rate of up to 0.25% of the average daily net assets of the
Fund's Class B shares for G.T. Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay G.T. Global a distribution fee at
the annualized rate of up to 0.75% of the average daily net assets of the Fund's
Class B Shares for G.T. Global's expenditures incurred in providing services as
distributor. Expenses incurred under the Class B Plan in excess of 1.00%
annually may be carried forward for reimbursement in subsequent years as long as
that Plan continues in effect.
G.T. Capital and G.T. Global voluntarily have undertaken to limit the Fund's
expenses (exclusive of brokerage commissions, taxes, interest, and extraordinary
expenses) to the maximum annual rate of 2.40% and 2.90% of the average daily net
assets of the Fund's Class A and Class B shares, respectively. If necessary,
this limitation will be effected by waivers by G.T. Capital of administration
fees, waivers by G.T. Global of payments under the Class A Plan and/ or Class B
Plan and/or reimbursements by G.T. Capital or G.T. Global of portions of the
Fund's other operating expenses.
G.T. Global Investor Services, Inc. ("G.T. Services"), an affiliate of G.T.
Capital and G.T. Global, is the transfer agent of the Fund.
The Company pays each of its Directors who is not an employee, officer or
director of G.T. Capital, G.T. Global or G.T. Services $5,000 per year plus $300
for each meeting of the board or any committee thereof attended by the Director.
F-6
<PAGE>
G.T. GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
3. CAPITAL SHARES
At April 30, 1995, there were 6,000,000,000 shares of the Company's common stock
authorized, at $0.0001 par value. Of this amount, 200,000,000 were classified as
shares of the Fund; 400,000,000 were classified as shares of G.T. Global
Government Income Fund; 200,000,000 were classified as shares of G.T. Global
Health Care Fund; 200,000,000 were classified as shares of G.T. Global Emerging
Markets Fund; 200,000,000 were classified as shares of G.T. Global Currency Fund
(inactive); 200,000,000 were classified as shares of G.T. Global Growth & Income
Fund; 200,000,000 were classified as shares of G.T. Global Small Companies Fund
(inactive); 200,000,000 were classified as shares of G.T. Latin America Growth
Fund; 400,000,000 were classified as shares of G.T. Global Telecommunications
Fund; 200,000,000 were classified as shares of G.T. Global Strategic Income
Fund; 200,000,000 were classified as shares of G.T. Global High Income Fund;
200,000,000 were classified as shares of G.T. Global Natural Resources Fund;
200,000,000 were classified as shares of G.T. Global Infrastructure Fund;
200,000,000 were classified as shares of G.T. Global Financial Services Fund;
and 2,800,000,000 shares remain unclassified. The shares of each of the
foregoing series of the Company were divided equally into two classes,
designated Class A and Class B common stock. Transactions in capital shares of
the Fund were as follows:
CAPITAL SHARE TRANSACTIONS
<TABLE>
<CAPTION>
DECEMBER 30, 1994
(COMMENCEMENT OF OPERATIONS)
TO APRIL 30, 1995
(UNAUDITED)
-----------------------------
CLASS A SHARES AMOUNT
- ----------------------------------------------------- ------------ --------------
<S> <C> <C>
Shares sold.......................................... 135,068 $ 1,553,003
Shares repurchased................................... (757) (8,798)
------------ --------------
Net increase......................................... 134,311 $ 1,544,205
------------ --------------
------------ --------------
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 30, 1994
(COMMENCEMENT OF OPERATIONS)
TO APRIL 30, 1995
(UNAUDITED)
-----------------------------
CLASS B SHARES AMOUNT
- ----------------------------------------------------- ------------ --------------
<S> <C> <C>
Shares sold.......................................... 41,247 $ 475,532
Shares repurchased................................... (2,149) (24,920)
------------ --------------
Net increase......................................... 39,098 $ 450,612
------------ --------------
------------ --------------
</TABLE>
4. SUBSEQUENT EVENT
On June 1, 1995, the Fund, along with the other series of G.T. Investment Funds,
Inc., commenced offering a new class of shares, the "Advisor Class" shares.
These shares are available subject to certain terms and conditions to employee
benefit plans; to investor accounts managed or advised by financial planners,
bank trust departments, or under a "wrap fee" program; and to other accounts
advised by companies affiliated with the G.T. Group. With respect to the
issuance of "Advisor Class" shares, 100,000,000 shares were classified as shares
of each of the fourteen series of the Company and designated as "Advisor Class"
common stock. 1,400,000,000 shares remain unclassified.
F-7
<PAGE>
GLOBAL CONSUMER PRODUCTS AND SERVICES PORTFOLIO
PORTFOLIO OF INVESTMENTS
April 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
% of Net
Market Assets
Equity Investments Country Shares Value (DELTA)
- ---------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Consumer Non-Durables
(22.8%)
- ----------------------------
Philip Morris Cos.,
Inc...................... US 1,675 $ 113,481 5.8
TOBACCO
Amway Asia Pacific Ltd.... HK 2,700 96,863 5.0
HOUSEHOLD PRODUCTS
RJR Nabisco Holdings
Corp..................... US 2,980 81,578 4.2
TOBACCO
Procter & Gamble Co....... US 1,100 76,863 3.9
HOUSEHOLD PRODUCTS
Mattel, Inc............... US 3,200 76,000 3.9
TOYS
------------
444,785
------------
Retailers (16.5%)
- ----------------------------
American Stores Co........ US 3,400 87,122 4.4
RETAILERS-FOOD
Tandy Corp................ US 1,700 84,150 4.3
RETAILERS-OTHER
AnnTaylor Stores,
Inc.(CHECK MARK)......... US 3,100 77,888 4.0
RETAILERS-APPAREL
REX Stores Corp.(CHECK
MARK).................... US 5,500 74,938 3.8
RETAILERS-OTHER
------------
324,098
------------
Services (14.9%)
- ----------------------------
Sbarro, Inc............... US 3,000 77,250 3.9
RESTAURANTS
Heritage Media Corp.
"A"(CHECK MARK).......... US 3,000 76,810 3.9
BROADCASTING &
PUBLISHING
La Quinta Inns, Inc....... US 2,400 71,700 3.7
LODGING
ServiceMaster L.P......... US 2,700 65,568 3.4
CONSUMER SERVICES
------------
291,328
------------
Consumer Durables (13.3%)
- ----------------------------
Singer Co. N.V............ HK 3,800 96,425 4.9
APPLIANCES & HOUSEHOLD
Three-Five Systems,
Inc.(CHECK MARK)......... US 3,500 84,875 4.4
CONSUMER ELECTRONICS
Nokia AB "K".............. FIN 1,900 78,024 4.0
CONSUMER ELECTRONICS
------------
259,324
------------
Beverages - Alcoholic (7.4%)
- ----------------------------
John Labatt Ltd........... CAN 4,700 78,247 4.0
Noble China(CHECK MARK)... CAN 21,000 67,219 3.4
------------
145,466
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-8
<PAGE>
GLOBAL CONSUMER PRODUCTS AND SERVICES PORTFOLIO
<TABLE>
<CAPTION>
% of Net
Market Assets
Equity Investments Country Shares Value (DELTA)
- ---------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Textiles & Apparel (4.3%)
- ----------------------------
Yue Yuen Industrial
Holdings................. HK 360,000 $ 83,250 4.3
------------
Finance (3.9%)
- ----------------------------
McArthur Glen Realty
Corp..................... US 5,700 75,525 3.9
REAL ESTATE INVESTMENT
TRUST
------------ -----
Total Equity Investments
(cost $1,603,925).......... 1,623,776 83.1
------------ -----
------------ -----
<CAPTION>
% of Net
Principal Market Assets
Short-Term Investments Currency Amount Value (DELTA)
- ---------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Repurchase Agreements
(19.2%)
- ----------------------------
United States (19.2%)
- ----------------------------
Dated April 28, 1995
with State Street Bank
& Trust Company, due
May 1, 1995, for an
effective yield of
5.89%, collateralized
by $390,000 Federal
Home Loan Bank, 6.06%
due 4/16/98 (market
value of collateral is
$381,113, including
accrued interest) (cost
$376,185).............. 376,185 19.2
------------
Treasury Bills (4.0%)
- ----------------------------
Mexico (4.0%)
- ----------------------------
Mexican Tesobonos,
effective yield 16.77%,
due 7/27/95 (cost
$77,142)............... USD 82,000 78,638 4.0
------------ -----
Total Short-Term Investments
(cost $453,327)............ 454,823 23.2
------------ -----
Total Investments (cost
$2,057,252)*............... 2,078,599 106.3
Other Assets and
Liabilities................ (124,027) (6.3)
------------ -----
Net Assets.................. $ 1,954,572 100.0
------------ -----
------------ -----
<FN>
-----------------
(DELTA) Percentages indicated are based on net assets of $1,954,572.
(CHECK Non-income producing security.
MARK)
* For Federal income tax purposes, cost is $2,057,252 and
appreciation (depreciation) is as follows:
Unrealized appreciation: $ 73,276
Unrealized depreciation: (51,929)
-------------
Net unrealized appreciation: $ 21,347
-------------
-------------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at April 30, 1995 was concentrated in the
following countries:
<TABLE>
<CAPTION>
Percentage of Net Assets (DELTA)
----------------------------------
Country (Country Code/ Currency Code) Equity Short-Term Other Total
- -------------------------------------- ------ ---------- ----- -----
<S> <C> <C> <C> <C>
Canada (CAN/CAD)...................... 7.4 7.4
Finland (FIN/FIM)..................... 4.0 4.0
Hong Kong (HK/HKD).................... 14.2 14.2
Mexico (MEX/MXN)...................... 4.0 4.0
United States (US/USD)................ 57.5 19.2 (6.3) 70.4
------ --- ----- -----
Total................................. 83.1 23.2 (6.3) 100
------ --- ----- -----
------ --- ----- -----
<FN>
- ----------------
(DELTA) Percentages indicated are based on net assets of $1,954,572.
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-9
<PAGE>
GLOBAL CONSUMER PRODUCTS AND SERVICES PORTFOLIO
STATEMENT OF ASSETS
AND LIABILITIES
April 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Assets:
Investments in securities, at value (cost $1,681,067) (Note 1)............................................ $1,702,414
Repurchase agreement, at value and cost (Note 1).......................................................... 376,185
U.S. currency..................................................................................
$ 523
Foreign currencies (cost $68,437)..............................................................
68,367 68,890
---------
Receivable for securities sold (Note 1)................................................................... 142,281
Dividends receivable...................................................................................... 528
----------
Total assets.............................................................................................. 2,290,298
----------
Liabilities:
Payable for securities purchased.......................................................................... 311,650
Payable for professional fees............................................................................. 10,800
Payable for printing and postage expenses................................................................. 6,000
Payable for investment management and administration fees (Note 2)........................................ 3,230
Payable for Trustees' fees and expenses (Note 2).......................................................... 2,400
Payable for custodian fees (Note 1)....................................................................... 446
Accrued expenses.......................................................................................... 1,200
----------
Total liabilities......................................................................................... 335,726
----------
Net assets.................................................................................................. $1,954,572
----------
----------
Net assets consist of:
Paid in capital........................................................................................... $1,940,587
Accumulated net investment loss........................................................................... (244)
Accumulated net realized loss on investments and foreign currency transactions............................ (6,927)
Net unrealized depreciation on translation of assets and liabilities in foreign currencies................ (191)
Net unrealized appreciation of investments................................................................ 21,347
----------
Total -- representing net assets applicable to shares of beneficial interest outstanding.................. $1,954,572
----------
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-10
<PAGE>
GLOBAL CONSUMER PRODUCTS AND SERVICES PORTFOLIO
STATEMENT OF OPERATIONS
December 30, 1994 (commencement of operations) to April 30, 1995
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Investment income (Note 1):
Interest................................................................................................... $ 16,808
Dividends.................................................................................................. 7,024
---------
Total investment income.................................................................................... 23,832
---------
Expenses:
Audit fees................................................................................................. 8,400
Printing and postage expenses.............................................................................. 6,000
Investment management and administration fees (Note 2)..................................................... 3,230
Legal fees................................................................................................. 2,400
Trustees' fees and expenses (Note 2)....................................................................... 2,400
Custodian and fund accounting fees (Note 1)................................................................ 446
Other...................................................................................................... 1,200
---------
Total expenses............................................................................................. 24,076
---------
Net investment loss.......................................................................................... (244)
---------
Net realized and unrealized gain (loss) on investments and foreign currencies (Note 1):
Net realized loss on investments................................................................ $ (3,890)
Net realized loss on foreign currency transactions.............................................. (3,037)
---------
Net realized loss during the period...................................................................... (6,927)
Net change in unrealized depreciation on translation of assets and liabilities in foreign
currencies..................................................................................... (191)
Net change in unrealized appreciation of investments............................................ 21,347
---------
Net unrealized appreciation during the period............................................................ 21,156
---------
Net realized and unrealized gain on investments and foreign currencies....................................... 14,229
---------
Net increase in net assets resulting from operations......................................................... $ 13,985
---------
---------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-11
<PAGE>
GLOBAL CONSUMER PRODUCTS AND SERVICES PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DECEMBER 30, 1994
(COMMENCEMENT OF OPERATIONS)
TO APRIL 30, 1995 (UNAUDITED)
-----------------------------
<S> <C>
Increase in net assets
Operations:
Net investment loss................................................................................ $ (244)
Net realized loss on investments and foreign currency transactions................................. (6,927)
Net change in unrealized depreciation on translation of assets and liabilities in foreign
currencies........................................................................................ (191)
Net change in unrealized appreciation of investments............................................... 21,347
-----------
Net increase in net assets resulting from operations............................................... 13,985
Beneficial interest transactions:
Contributions...................................................................................... 1,998,501
Withdrawals........................................................................................ (158,014)
-----------
Net increase from beneficial interest transactions................................................. 1,840,487
-----------
Total increase in net assets......................................................................... 1,854,472
Net assets:
Beginning of period................................................................................ 100,100
-----------
End of period...................................................................................... $ 1,954,572
-----------
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-12
<PAGE>
GLOBAL CONSUMER PRODUCTS AND SERVICES PORTFOLIO
SUPPLEMENTARY DATA
- --------------------------------------------------------------------------------
Contained below are ratios and supplemental data that have been derived from
information provided in the financial statements.
<TABLE>
<CAPTION>
DECEMBER 30, 1994
(COMMENCEMENT OF OPERATIONS)
TO APRIL 30, 1995 (UNAUDITED)
------------------------------
<S> <C>
Ratios and supplemental data:
Net assets, end of period (in 000's).............. $ 1,955
Ratio of net investment income to average net
assets........................................... (0.05)%(a)
Ratio of operating expenses to average net
assets........................................... 5.36%(a)
Portfolio turnover rate........................... 244%(a)
- ----------------
<FN>
(a) Annualized.
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-13
<PAGE>
GLOBAL CONSUMER PRODUCTS AND SERVICES PORTFOLIO
NOTES TO
FINANCIAL STATEMENTS
April 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Global Consumer Products and Services Portfolio ("Portfolio") is organized as a
New York Trust and is registered under the Investment Company Act of 1940, as
amended ("1940 Act"), as a diversified, open-end management investment company.
The following is a summary of significant accounting policies consistently
followed by the Portfolio in the preparation of the financial statements. The
policies are in conformity with generally accepted accounting principles.
(A) PORTFOLIO VALUATION
The Portfolio calculates the net asset value of and completes orders to purchase
or repurchase Portfolio shares of beneficial interest on each business day, with
the exception of those days on which the New York Stock Exchange is closed.
Equity securities are valued at the last sale price on the exchange on which
such securities are traded, or in the principal over-the-counter market in which
such securities are traded, as of the close of business on the day the
securities are being valued or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined by G.T. Capital Management,
Inc. ("G.T. Capital") to be the primary market.
Fixed income investments are valued at the mean of representative quoted bid and
ask prices for such investments or, if such prices are not available, at prices
for investments of comparative maturity, quality and type; however, when G.T.
Capital deems it appropriate, prices obtained for the day of valuation from a
bond pricing service will be used. Short-term investments with a maturity of 60
days or less are valued at amortized cost adjusted for foreign exchange
translation and market fluctuation, if any.
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Portfolio's Board of Trustees.
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Portfolio's Board of Trustees.
(B) FOREIGN CURRENCY TRANSLATION
The accounting records of the Portfolio are maintained in U.S. dollars. The
market values of foreign securities, currency holdings, and other assets and
liabilities are recorded in the books and records of the Portfolio after
translation to U.S. dollars based on the exchange rates on that day. The cost of
each security is determined using historical exchange rates. Income and
withholding taxes are translated at prevailing exchange rates when earned or
incurred.
The Portfolio does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss from
investments.
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Portfolio's books and the U.S. dollar equivalent of the amounts actually
received or paid. Net unrealized foreign exchange gains or losses arise from
changes in the value of assets and liabilities other than investments in
securities at period end, resulting from changes in exchange rates.
F-14
<PAGE>
GLOBAL CONSUMER PRODUCTS AND SERVICES PORTFOLIO
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Portfolio, it is the
Portfolio's policy to always receive, as collateral, United States government
securities or other high quality debt securities of which the value, including
accrued interest, is at least equal to the amount to be repaid to the Portfolio
under each agreement at its maturity.
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contracts") is an agreement
between two parties to buy and sell a currency at a set price on a future date.
The market value of the Forward Contract fluctuates with changes in currency
exchange rates. The Forward Contract is marked-to-market daily and the change in
market value is recorded by the Portfolio as an unrealized gain or loss. When
the Forward Contract is closed, the Portfolio records a realized gain or loss
equal to the difference between the value at the time it was opened and the
value at the time it was closed. Forward Contracts involve market risk in excess
of the amount shown in the Portfolio's "Statement of Assets and Liabilities."
The Portfolio could be exposed to risk if a counterparty is unable to meet the
terms of the contract or if the value of the currency changes unfavorably. The
Portfolio may enter into Forward Contracts in connection with planned purchases
or sales of securities, or to hedge against adverse fluctuations in exchange
rates between currencies.
(E) OPTION ACCOUNTING PRINCIPLES
When the Portfolio writes a call or put option, an amount equal to the premium
received is included in the Portfolio's "Statement of Assets and Liabilities" as
an asset and an equivalent liability. The amount of the liability is
subsequently marked-to-market to reflect the current market value of the option.
The current market value of an option listed on a traded exchange is valued at
its last bid price, or, in the case of an over-the-counter option, is valued at
the average of the last bid prices obtained from brokers. If an option expires
on its stipulated expiration date or if the Portfolio enters into a closing
purchase transaction, a gain or loss is realized without regard to any
unrealized gain or loss on the underlying security, and the liability related to
such option is extinguished. If a written call option is exercised, a gain or
loss is realized from the sale of the underlying security and the proceeds of
the sale are increased by the premium originally received. If a written put
option is exercised, the cost of the underlying security purchased would be
decreased by the premium originally received. The Portfolio can write options
only on a covered basis, which, for a call, requires that the Portfolio holds
the underlying security and, for a put, requires the Portfolio to set aside
cash, U.S. government securities or other liquid, high-grade debt securities in
an amount not less than the exercise price or otherwise provide adequate cover
at all times while the put option is outstanding. The Portfolio may use options
to manage its exposure to the stock market and to fluctuations in currency
values or interest rates.
The premium paid by the Portfolio for the purchase of a call or put option is
included in the Portfolio's "Statement of Assets and Liabilities" as an
investment and subsequently "marked-to-market" to reflect the current market
value of the option. If an option which the Portfolio has purchased expires on
the stipulated expiration date, the Portfolio realizes a loss in the amount of
the cost of the option. If the Portfolio enters into a closing sale transaction,
the Portfolio realizes a gain or loss, depending on whether proceeds from the
closing sale transaction are greater or less than the cost of the option. If the
Portfolio exercises a call option, the cost of the securities acquired by
exercising the call is increased by the premium paid to buy the call. If the
Portfolio exercises a put option, it realizes a gain or loss from the sale of
the underlying security, and the proceeds from such sale are decreased by the
premium originally paid.
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Portfolio may forego the
opportunity of profit if the market value of the underlying security or index
increases and the option is exercised. The risk in writing a put option is that
the Portfolio may incur a loss if the market value of the underlying security or
index decreases and the option is exercised. In addition, there is the risk the
Portfolio may not be able to enter into a closing transaction because of an
illiquid secondary market.
(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract the
Portfolio is required to pledge to the broker an amount of cash or securities
equal to the minimum "initial margin" requirements of the exchange on which the
contract is traded. Pursuant to the contract, the Portfolio agrees to receive
from or pay to the broker an amount of cash equal to the daily fluctuation in
value of the contract. Such receipts or payments are known as "variation margin"
and are recorded by the Portfolio as unrealized gains or losses. When the
contract is closed, the Portfolio records a realized gain or loss equal to the
difference between the value of the contract at the time it was opened and the
value at the time it was closed. The potential
F-15
<PAGE>
GLOBAL CONSUMER PRODUCTS AND SERVICES PORTFOLIO
risk to the Portfolio is that the change in value of the underlying securities
may not correlate to the change in value of the contracts. The Portfolio may use
futures contracts to manage its exposure to the stock market and to fluctuations
in currency values or interest rates.
(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out basis, unless otherwise specified. Dividends are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Where a high
level of uncertainty exists as to its collection, income is recorded net of all
withholding tax with any rebate recorded when received. The Portfolio may trade
securities on other than normal settlement terms. This may increase the risk if
the other party to the transaction fails to deliver and causes the Portfolio to
subsequently invest at less advantageous prices.
(H) PORTFOLIO SECURITIES LOANED
For international securities, cash collateral is received by the Portfolio
against loaned securities in an amount at least equal to 105% of the market
value of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 103% of the market value of the loaned
securities during the period of the loan. For domestic securities, cash
collateral is received by the Portfolio against loaned securities in the amount
at least equal to 102% of the market value of the loaned securities at the
inception of each loan. This collateral must be maintained at not less than 100%
of the market value of the loaned securities during the period of the loan. At
April 30, 1995, there were no securities on loan to brokers.
(I) TAXES
It is the policy of the Portfolio to meet the requirements of the Internal
Revenue Code of 1986, as amended ("Code"). Therefore, no provision has been made
for Federal taxes on income, capital gains, or unrealized appreciation of
securities held.
(J) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investments of domestic origin. The Portfolio's investments in emerging market
countries may involve greater risks than investments in more developed markets
and the price of such investments may be volatile. These risks of investing in
foreign and emerging markets may include foreign currency exchange rate
fluctuations, perceived credit risk, adverse political and economic developments
and possible adverse foreign government intervention.
In addition, the Portfolio may focus its investments in certain related consumer
products and services industries, subjecting the Portfolio to greater risk than
a fund that is more diversified.
(K) INDEXED SECURITIES
The Portfolio may invest in indexed securities whose value is linked either
directly or indirectly to changes in foreign currencies, interest rates,
equities, indices, or other reference instruments. Indexed securities may be
more volatile than the reference instrument itself, but any loss is limited to
the amount of the original investment.
(L) RESTRICTED SECURITIES
The Portfolio is permitted to invest in privately placed restricted securities.
These securities may be resold in transactions exempt from registration or to
the public if the securities are registered. Disposal of these securities may
involve time-consuming negotiations and expense, and prompt sale at an
acceptable price may be difficult.
2. RELATED PARTIES
G.T. Capital is the Portfolio's investment manager and administrator. The
Portfolio pays investment management and administration fees to G.T. Capital at
the annualized rate of 0.725% on the first $500 million of average daily net
assets of the Portfolio; 0.70% on the next $500 million; 0.675% on the next $500
million; and 0.65% on amounts thereafter. These fees are computed daily and paid
monthly.
The Portfolio pays each of its Trustees who is not an employee, officer or
director of G.T. Capital, G.T. Global Financial Services, Inc. or G.T. Global
Investor Services Inc. $500 per year plus $150 for each meeting of the board or
any committee thereof attended by the Trustees.
At April 30, 1995, all of the shares of beneficial interest of the Portfolio
were owned either by G.T. Global Consumer Products and Services Fund or G.T.
Capital.
3. PURCHASES AND SALES OF SECURITIES
For the period ended April 30, 1995, purchases and sales of investment
securities by the Portfolio, other than short-term investments, aggregated
$2,391,198 and $788,622, respectively. There were no purchases or sales of U.S.
government obligations by the Portfolio for the period ended April 30, 1995.
F-16
<PAGE>
G.T. GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
NOTES
- --------------------------------------------------------------------------------
<PAGE>
G.T. GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
NOTES
- --------------------------------------------------------------------------------
<PAGE>
G.T. GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
NOTES
- --------------------------------------------------------------------------------
<PAGE>
G.T. GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
[LOGO]
G.T. GLOBAL GROUP OF FUNDS
G.T. GLOBAL OFFERS A BROAD RANGE OF MUTUAL FUNDS TO COMPLEMENT MANY
INVESTORS' PORTFOLIOS. FOR MORE INFORMATION AND A PROSPECTUS ON ANY OF THE
G.T. GLOBAL MUTUAL FUNDS, PLEASE CONTACT YOUR INVESTMENT COUNSELOR OR CALL
G.T. GLOBAL DIRECTLY AT 1-800-824-1580. THE PROSPECTUS CONTAINS MORE
COMPLETE INFORMATION, INCLUDING CHARGES, EXPENSES AND RISKS. INVESTORS
SHOULD READ THE PROSPECTUS CAREFULLY BEFORE INVESTING.
GROWTH FUNDS
/ / GLOBALLY DIVERSIFIED FUNDS
G.T. GLOBAL WORLDWIDE GROWTH FUND
Invests around the world, including the U.S.
G.T. GLOBAL INTERNATIONAL GROWTH FUND
Provides portfolio diversity by investing outside
the U.S.
G.T. GLOBAL EMERGING MARKETS FUND
Gives access to the growth potential of developing economies
/ / GLOBAL THEME FUNDS
G.T. GLOBAL HEALTH CARE FUND
Invests in growing health care industries worldwide
G.T. GLOBAL TELECOMMUNICATIONS FUND
Invests in companies worldwide that develop, manufacture or sell
telecommunications services or equipment
G.T. GLOBAL INFRASTRUCTURE FUND
Seeks companies that build, improve or maintain a country's infrastructure
G.T. GLOBAL FINANCIAL SERVICES FUND
Focuses on the worldwide opportunities from the demand for financial services
and products
G.T. GLOBAL NATURAL RESOURCES FUND
Concentrates on companies that own, explore or develop natural resources
G.T. GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
Invests in companies that manufacture, market, retail, or distribute consumer
products or services
/ / REGIONALLY DIVERSIFIED FUNDS
G.T. GLOBAL NEW PACIFIC GROWTH FUND
Offers access to the emerging and established markets of the Pacific Rim
G.T. GLOBAL EUROPE GROWTH FUND
Focuses on investment opportunities in the new, unified Europe
G.T. LATIN AMERICA GROWTH FUND
Invests in the emerging markets of Latin America
/ / SINGLE COUNTRY FUNDS
G.T. GLOBAL AMERICA GROWTH FUND
Concentrates on small and medium-sized companies in the U.S.
G.T. GLOBAL JAPAN GROWTH FUND
Provides U.S. investors with direct access to the Japanese market
GROWTH AND INCOME FUND
G.T. GLOBAL GROWTH & INCOME FUND
Invests in blue-chip stocks and government bonds from around the world
INCOME FUNDS
G.T. GLOBAL GOVERNMENT INCOME FUND
Earns monthly income from global government securities
G.T. GLOBAL STRATEGIC INCOME FUND
Allocates its assets among debt securities from the U.S., developed foreign
countries and emerging markets
G.T. GLOBAL HIGH INCOME FUND
Invests in debt securities in emerging markets
MONEY MARKET FUND
G.T. GLOBAL DOLLAR FUND
Invests in high quality, U.S. dollar-denominated money market securities
worldwide for stability and preservation of capital
THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENT PROSPECTUS.
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G.T. GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
[LOGO]
G.T. GLOBAL FINANCIAL SERVICES
FIFTY CALIFORNIA STREET, 27TH FLOOR
SAN FRANCISCO, CALIFORNIA 94111
DATED MATERIAL
PLEASE EXPEDITE
