<PAGE>
[LOGO] G.T. GLOBAL GROWTH & INCOME FUND:
ADVISOR CLASS
PROSPECTUS -- MARCH 1, 1995, AS REVISED JUNE 1, 1995
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G.T. GLOBAL GROWTH & INCOME FUND ("Fund") is a mutual fund, organized as a
non-diversified series of G.T. Investment Funds, Inc., seeking long-term capital
appreciation together with current income. The Fund invests in a global
portfolio of both equity and debt securities, in such relative proportions as
deemed most appropriate by the Fund's investment manager in view of then-current
economic and market conditions. There can be no assurance that the Fund will
achieve its investment objective.
The Fund's investment manager, G.T. Capital Management, Inc. ("G.T. Capital") is
part of the G.T. Group, a leading international investment advisory organization
with offices throughout the world that long has emphasized global investment.
Shares offered by this Prospectus are available for purchase only by certain
investors and are offered at net asset value without the imposition of a front-
end or contingent deferred sales charge and without a Rule 12b-1 charge.
This Prospectus sets forth concisely information an investor should know before
investing and should be read carefully and retained for future reference. A
Statement of Additional Information, dated March 1, 1995, as revised June 1,
1995, has been filed with the Securities and Exchange Commission ("SEC") and is
incorporated herein by reference. The Statement of Additional Information which
may be amended or supplemented from time to time, is available without charge by
writing to the Fund at 50 California Street, San Francisco, California 94111, or
calling (800) 824-1580.
FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR ENDORSED OR GUARANTEED BY,
ANY BANK, NOR ARE THEY FEDERALLY INSURED OR OTHERWISE PROTECTED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
An investment in the G.T. Global Growth & Income Fund offers the following
advantages:
/ / Professional Management by a Leading Manager with Offices in the World's
Major Markets
/ / Automatic Dividend and Other Distribution Reinvestment at No Additional
Sales Charge
/ / Exchange Privileges with the Advisor Class of the Other G.T. Global Mutual
Funds
FOR FURTHER INFORMATION, CALL (800) 824-1580 OR CONTACT YOUR FINANCIAL ADVISOR.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus Page 1
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
TABLE OF CONTENTS
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<TABLE>
<CAPTION>
Page
---------
<S> <C>
Prospectus Summary........................................................................ 3
Financial Highlights...................................................................... 7
Investment Objective and Policies......................................................... 8
How To Invest............................................................................. 13
How To Make Exchanges..................................................................... 14
How to Redeem Shares...................................................................... 15
Shareholder Account Manual................................................................ 17
Calculation of Net Asset Value............................................................ 18
Dividends, Other Distributions and Federal Income Taxation................................ 18
Management................................................................................ 20
Other Information......................................................................... 22
</TABLE>
Prospectus Page 2
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
PROSPECTUS SUMMARY
- ------------------------------------------------------------
The following summary is qualified in its entirety by the more detailed
information appearing in the body of this Prospectus.
<TABLE>
<S> <C> <C>
Investment Objective: The Fund seeks long-term capital appreciation together with current
income
Principal Investments: Invests principally in blue-chip equity securities and high
quality government bonds of issuers located in the United States
and throughout the world
Investment Manager: G.T. Capital, part of the G.T. Group, a leading international
investment advisory organization with over $20 billion under
management
Advisor Class shares are offered through this Prospectus to (a)
Advisor Class shares: trustees or other fiduciaries purchasing shares for employee
benefit plans which are sponsored by organizations which have at
least 250 employees; (b) any account investing at least $25,000 in
one or more G.T. Global Mutual Funds if (i) a financial planner,
trust company, bank trust department or registered investment
adviser has investment discretion over such account, and (ii) the
account holder pays such person as compensation for its advice and
other services an annual fee of at least .50% on the assets in the
account; (c) any account investing at least $25,000 in one or more
G.T. Global Mutual Funds if (i) such account is established under
a "wrap fee" program, and (ii) the account holder pays the sponsor
of such program an annual fee of at least .50% on the assets in
the account; (d) accounts advised by one of the companies
comprising or affiliated with the G.T. Group; and (e) any of the
companies comprising or affiliated with the G.T. Group
Exchange Privileges: Advisor Class shares may only be exchanged for Advisor Class
shares of other G.T. Global Mutual Funds
Dividends and Other Distribu- Dividends paid quarterly from available net investment income and
tions: realized net short-term capital gains; other distributions paid
annually from realized net capital gain and net gains from foreign
currency transactions, if any
Reinvestment: Distributions may be reinvested automatically in Advisor Class
shares of the Fund or of other G.T. Global Mutual Funds
Net Asset Value: Advisor Class shares quoted daily in the financial section of most
newspapers
</TABLE>
Prospectus Page 3
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
PROSPECTUS SUMMARY
(Continued)
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THE FUND. G.T. Global Growth & Income Fund is a mutual fund organized as a
non-diversified series of G.T. Investment Funds, Inc. ("Company"), a registered
open-end management investment company. The Fund seeks long-term capital
appreciation together with current income. Advisor Class shares of the Fund's
common stock are available through Financial Advisors that have entered into
agreements with the Fund's distributor, G.T. Global Financial Services, Inc.
("G.T. Global") and certain of its affiliates. See "How to Invest" and
"Shareholder Account Manual." Shares may be redeemed either through financial
advisors or the transfer agent, G.T. Global Investor Services, Inc. ("Transfer
Agent"). See "How to Redeem Shares" and "Shareholder Account Manual."
INVESTMENT MANAGER. G.T. Capital is the Fund's investment manager and
administrator. G.T. Capital provides investment management services to all of
the G.T. Global Mutual Funds as well as other institutional, corporate and
individual clients. G.T. Capital is part of the G.T. Group, a leading
international investment advisory organization that long has emphasized global
investing. The G.T. Group maintains fully-staffed investment offices in San
Francisco, London, Tokyo, Toronto, Hong Kong, Singapore and Sydney. As of April
1, 1995, total assets under G.T. Group management exceeded $20 billion. Of this
amount, more than $17 billion was invested in the securities of non-U.S.
issuers. The companies comprising the G.T. Group are indirect subsidiaries of
the Prince of Liechtenstein Foundation. See "Management."
INVESTMENT TECHNIQUES AND RISK FACTORS. The Fund seeks its objective by
investing in a global portfolio of both equity securities and debt obligations
allocated among diverse international markets. The Fund currently expects to
choose its investments principally from issuers in the United States, Canada,
Japan, Mexico, the Western European nations, New Zealand and Australia. See
"Investment Objective and Policies." Consistent with the Fund's investment
objective, G.T. Capital employs a conservative investment style in managing the
Fund's assets, in order to attempt to limit volatility and risk to capital.
The Fund normally invests at least 65% of its total assets in a combination of
blue-chip equity securities and high quality government bonds. The Fund
considers an equity security to be "blue chip" if (i) during the issuer's most
recent fiscal year the security offered an above average dividend yield relative
to the latest reported dividend yield on the Morgan Stanley Capital
International World Index; AND (ii) the total equity market capitalization of
the issuer is at least $1 billion. High quality government bonds are those rated
at the time of the Fund's investment within one of the two highest categories of
Moody's Investors Service, Inc. ("Moody's") or Standard & Poor's Ratings Group
("S&P"), or, if unrated, determined to be of equivalent quality in the judgment
of G.T. Capital. The remainder of the Fund's assets may be invested in other
equity securities and investment grade government and corporate debt securities
which G.T. Capital believes will assist the Fund in achieving its objective.
The relative proportions of equity and debt securities held by the Fund at any
one time will vary, and will depend upon G.T. Capital's assessment of global
political and economic conditions and the relative strengths and weaknesses of
the world equity and debt markets. To enable the Fund to respond to economic and
market changes, the Fund is authorized to invest up to 100% of its assets in
either equity or debt securities.
The Fund may engage in certain foreign currency, options and futures
transactions to attempt to hedge against the overall level of investment and
currency risk associated with its present or planned investments. For temporary
defensive purposes, the Fund may hold U.S. or foreign currency and/or invest any
portion of its assets in high quality money market instruments of U.S. or
foreign issuers. The Fund also may hold cash and invest in high quality foreign
or domestic money market instruments pending investment of proceeds from new
sales of Fund shares, to meet its ordinary daily cash needs. See "Investment
Objective and Policies" for a more complete discussion of the Fund's investment
policies.
There is no assurance that the Fund will achieve its investment objective. The
Fund's net asset value
Prospectus Page 4
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
PROSPECTUS SUMMARY
(Continued)
- --------------------------------------------------------------------------------
will fluctuate, reflecting fluctuations in the market value of its portfolio
positions. The value of the debt securities held by the Fund generally
fluctuates inversely with interest rate movements. Certain investment grade debt
securities may possess speculative qualities.
The Fund normally invests in a substantial number of issuers; however, the
Fund's "non-diversified" classification under the Investment Company Act of
1940, as amended ("1940 Act") may cause the value of its shares to fluctuate
more than the shares of a diversified fund. See "Investment Objective and
Policies -- Risk Factors."
Investments in foreign securities involve risks relating to political and
economic developments abroad and the differences between the regulations to
which U.S. and foreign issuers are subject. Individual foreign economies also
may differ favorably or unfavorably from the U.S. economy. Changes in foreign
currency exchange rates will affect the Fund's net asset value, earnings and
gains and losses realized on sales of securities. Securities of foreign
companies may be less liquid and their prices more volatile than securities of
comparable U.S. companies. The Fund's participation in the currency, options and
futures markets involves certain risks and transaction costs. See "Investment
Objective and Policies -- Risk Factors."
EXPENSES. The Fund pays G.T. Capital investment management and administration
fees, based on the average daily net assets of the Fund, at the annualized rate
of .975% on the first $500 million, .95% on the next $500 million, .925% on the
next $500 million, and .90% on amounts thereafter. G.T. Capital has undertaken
to limit the Fund's expenses (exclusive of brokerage commissions, taxes,
interest and extraordinary expenses) to the annual rate of 1.50% of the average
daily net assets of the Fund's Advisor Class shares.
Prospectus Page 5
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
PROSPECTUS SUMMARY
(Continued)
- --------------------------------------------------------------------------------
SUMMARY OF INVESTOR COSTS. The expenses and maximum transactions costs
associated with investing in the Advisor Class shares of the Fund are reflected
in the following tables*:
<TABLE>
<CAPTION>
ADVISOR CLASS
---------------
<S> <C>
SHAREHOLDER TRANSACTION COSTS:
Maximum sales charge on purchases of shares (as a % of offering price)................................. None
Sales charges on reinvested distributions to shareholders.............................................. None
Maximum contingent deferred sales charge............................................................... None
Redemption charges..................................................................................... None
Exchange Fees:
-- On first four exchanges each year................................................................. None
-- On each additional exchange....................................................................... $ 7.50
ANNUAL FUND OPERATING EXPENSES:
(AS A % OF AVERAGE NET ASSETS)
Investment management
and administration fees.............................................................................. .97%
12b-1 service and distribution fees.................................................................... None
Other expenses......................................................................................... .35%
-------
Total Fund Operating Expenses............................................................................ 1.32%
-------
-------
</TABLE>
HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES
An investor would have directly or indirectly paid the following expenses at the
end of the periods shown on a $1,000 investment in the Fund, assuming a 5%
annual return*:
<TABLE>
<CAPTION>
ONE YEAR THREE YEARS FIVE YEARS
----- ----------- -----
<S> <C> <C> <C>
Advisor Class Shares..................................................................... $ 13 $ 41 N/A
<CAPTION>
TEN YEARS
-----
<S> <C>
Advisor Class Shares..................................................................... N/A
<FN>
- ------------------
* BECAUSE ADVISOR CLASS SHARES HAVE NOT PREVIOUSLY BEEN OFFERED, EXPENSES ARE
ESTIMATES AND DO NOT REFLECT ACTUAL ADVISOR CLASS EXPENSES. SUCH DATA ARE
DERIVED FROM CLASS A AND CLASS B EXPENSES FOR THE FUND BASED ON THE FUND'S
FISCAL YEAR ENDED OCTOBER 31, 1994. THESE TABLES ARE INTENDED TO ASSIST
INVESTORS IN UNDERSTANDING THE VARIOUS COSTS AND EXPENSES ASSOCIATED WITH
INVESTING IN THE FUND. "Other expenses" include custody, transfer agent,
legal, audit and other expenses. The transfer agent fees are calculated on
a per account and per transaction basis rather than on the basis of average
net assets. "Other expenses" may be reduced to the extent that (i) certain
broker/dealers executing the Fund's portfolio transactions pay all or a
portion of the Fund's custodian fees and transfer agency expenses, or (ii)
fees received in connection with the lending of portfolio securities are
used to reduce custodian fees. These arrangements are not anticipated to
materially increase the brokerage commissions paid by the Fund. Without
such reductions, "Other expenses" for Advisor Class Shares of the Fund
would have been 0.38%. See "Management" herein and in the Statement of
Additional Information for more information. Investors purchasing Advisor
Class shares through financial planners, trust companies, bank trust
departments or registered investment advisers, or under a "wrap fee"
program, will be subject to additional fees charged by such entities or by
the sponsors of such programs. Where any account advised by one of the
companies comprising or affiliated with the G.T. Group invests in Advisor
Class shares of the Fund, such account shall not be subject to duplicative
advisory fees. THE "HYPOTHETICAL EXAMPLE" SET FORTH ABOVE IS NOT A
REPRESENTATION OF PAST OR FUTURE EXPENSES; THE FUND'S ACTUAL EXPENSES MAY
BE MORE OR LESS THAN THOSE SHOWN. The above tables and the assumption in
the Hypothetical Example of a 5% annual return are required by regulation
of the Securities and Exchange Commission applicable to all mutual funds;
the 5% annual return is not a prediction of and does not represent the
Fund's projected or actual performance.
</TABLE>
Prospectus Page 6
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The tables below provide condensed information concerning income and capital
changes for one share of each class of shares of the Fund for the periods shown.
This information is supplemented by the financial statements and accompanying
notes appearing in the Statement of Additional Information. The financial
statements and notes, for
the fiscal year ended October 31, 1994, have been audited by Coopers & Lybrand
L.L.P., independent accountants, whose report thereon also is included in the
Statement of Additional Information. Financial information is not presented for
Advisor Class because no shares of that class were outstanding during the
periods shown below.
<TABLE>
<CAPTION>
CLASS B++
---------------------------------------
OCTOBER 22,
YEAR ENDED YEAR ENDED 1992 TO
OCTOBER 31, OCTOBER 31, OCTOBER 31,
1994 1993(A) 1992(A)
----------- ----------- -----------
<S> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of
period............................... $ 6.29 $ 5.28 $ 5.29
----------- ----------- -----------
Income from investment operations:
Net investment income................. 0.18 0.20 0.01
Net realized and unrealized gain
(loss) on investments................ (0.03) 1.05 (0.02)
----------- ----------- -----------
Net increase (decrease) from
investment operations................ 0.15 1.25 (0.01)
----------- ----------- -----------
Distributions:
Net investment income............... (0.17) (0.20) (0.00)
Net realized gain on investments.... (0.06) (0.00) (0.00)
Sources other than net income....... (0.00) (0.04) (0.00)
----------- ----------- -----------
Total distributions............... (0.23) (0.24) (0.00)
----------- ----------- -----------
Net asset value, end of period........ $ 6.21 $ 6.29 $ 5.28
----------- ----------- -----------
----------- ----------- -----------
Total investment return (e)........... 2.48% 24.3% (0.2)%(b)
----------- ----------- -----------
----------- ----------- -----------
Ratios and supplemental data:
Net assets, end of period (in 000's).. $359,242 $150,768 $ 280
Ratio of net investment income to
average net assets................... 2.65% 2.6% N/A(d)
Ratio of expenses to average net
assets before expense reductions..... 2.35%
Ratio of expenses to average net
assets............................... 2.32% 2.5% N/A(d)
Portfolio turnover rate+++............ 117% 24% 53%
<CAPTION>
CLASS A+
--------------------------------------------------------
SEPTEMBER 25, 1990
YEAR ENDED OCTOBER 31, (COMMENCEMENT OF
------------------------------------ OPERATIONS) TO
1994 1993(A) 1992 1991 OCTOBER 31, 1990
-------- -------- ------- ------- ------------------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of
period............................... $ 6.29 $ 5.28 $ 5.25 $ 4.77 $ 4.76
-------- -------- ------- ------- -------
Income from investment operations:
Net investment income................. 0.22 0.24* 0.21* 0.27* 0.01*
Net realized and unrealized gain
(loss) on investments................ (0.03) 1.05 0.10 0.47 0.00
-------- -------- ------- ------- -------
Net increase (decrease) from
investment operations................ 0.19 1.29 0.31 0.74 0.01
-------- -------- ------- ------- -------
Distributions:
Net investment income............... (0.21) (0.24) (0.14) (0.26) (0.00)
Net realized gain on investments.... (0.06) (0.00) (0.14) (0.00) (0.00)
Sources other than net income....... (0.00) (0.04) (0.00) (0.00) (0.00)
-------- -------- ------- ------- -------
Total distributions............... (0.27) (0.28) (0.28) (0.26) (0.00)
-------- -------- ------- ------- -------
Net asset value, end of period........ $ 6.21 $ 6.29 $ 5.28 $ 5.25 $ 4.77
-------- -------- ------- ------- -------
-------- -------- ------- ------- -------
Total investment return (e)........... 3.14% 25.1% 5.9% 19.1% 0.2%(b)
-------- -------- ------- ------- -------
-------- -------- ------- ------- -------
Ratios and supplemental data:
Net assets, end of period (in 000's).. $317,847 $251,428 $27,754 $71,376 $9,486
Ratio of net investment income to
average net assets................... 3.30% 3.3%* 4.1%* 5.0%* 2.9%*(c)
Ratio of expenses to average net
assets before expense reductions..... 1.70%
Ratio of expenses to average net
assets............................... 1.67% 1.8%* 1.9%* 1.9%* 0.6%*(c)
Portfolio turnover rate+++............ 117% 24% 53% 46% none
<FN>
- ------------------
+ All capital shares issued and outstanding as of October 21, 1992 were
reclassified as Class A shares.
++ Commencing October 22, 1992 the Fund began offering Class B shares.
+++ Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
* Includes reimbursement by G.T. Capital Management, Inc. of Fund operating
expenses of $0.005, $0.02, $0.03 and $0.01 for the year ended October 31,
1993, 1992, 1991 and for the period from September 25, 1990 to October 31,
1990, respectively. Without such reimbursements, the expense ratios would
have been 1.93%, 2.20%, 2.46% and 2.40% and the net investment income to
average net assets would have been 3.20%, 3.70%, 4.40% and 1.04% for the
year ended October 31, 1993, 1992, 1991 and for the period from September
25, 1990 to October 31, 1990, respectively.
(a) These selected per share data were calculated based upon weighted average
shares outstanding during the year.
(b) Not annualized.
(c) Annualized.
(d) Ratios not meaningful due to short period of operation of Class B shares.
(e) Total investment return does not include sales charges.
</TABLE>
Prospectus Page 7
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
INVESTMENT OBJECTIVE
AND POLICIES
- --------------------------------------------------------------------------------
The Fund's investment objective is long-term capital appreciation together with
current income. The Fund seeks its objective by investing in a global portfolio
of both equity and debt securities, allocated among diverse international
markets. The Fund is designed for investors who wish to accept the risks
entailed in such investments, which are different from those associated with a
portfolio consisting entirely of U.S. securities. See "Investment Objective and
Policies -- Risk Factors." There is no assurance that the Fund's investment
objective will be achieved.
Consistent with the Fund's investment objective, G.T. Capital employs a
conservative investment style in managing the Fund's assets. In so doing G.T.
Capital attempts to limit volatility and risk to capital.
At least 65% of the Fund's total assets normally will be invested in a
combination of blue-chip equity securities and high quality government bonds.
The Fund considers an equity security to be "blue chip" if (i) during the
issuer's most recent fiscal year the security offered an above average dividend
yield relative to the latest reported dividend yield on the Morgan Stanley
Capital International World Index; AND (ii) the total equity market
capitalization of the issuer is at least $1 billion. Government bonds are deemed
to be high quality if at the time of the Fund's investment they are rated within
one of the two highest ratings categories of Moody's or S&P or, if unrated, are
deemed to be of equivalent quality in the judgment of G.T. Capital.
Up to 35% of the Fund's total assets may be invested in other equity securities
and investment grade government and corporate debt obligations which G.T.
Capital believes will assist the Fund in achieving its objective. "Investment
grade" debt refers to those securities rated within one of the four highest
ratings categories of Moody's or S&P, or, if unrated, deemed to be of equivalent
quality in the judgment of G.T. Capital. Securities rated in the lowest category
of investment grade, Baa, are described by Moody's as having speculative
characteristics.
The equity securities in which the Fund may invest include common stocks,
preferred stocks, and warrants to acquire such stocks and other equity
securities. Government bonds that the Fund may purchase include debt obligations
issued or guaranteed by the United States or foreign governments (including
foreign states, provinces or municipalities) or their agencies, authorities or
instrumentalities. Such government securities also may include debt obligations
of supranational entities organized or supported by several national
governments, such as the World Bank and the Asian Development Bank. The debt
obligations held by the Fund may include debt obligations convertible into
equity securities or having attached warrants or rights to purchase equity
securities.
The Fund currently contemplates that it will invest principally in securities of
issuers in the United States, Canada, Japan, Mexico, the Western European
nations, New Zealand and Australia. The Fund may invest substantially in
securities denominated in one or more currencies. Under normal conditions, the
Fund invests in issues of not less than three different countries and issuers of
any one country, other than the U.S., will represent no more than 40% of the
Fund's total assets. The Fund may purchase securities that are issued by the
government or a corporation or financial institution of one nation but
denominated in the currency of another nation (or a multinational currency
unit).
SELECTION OF INVESTMENTS AND ASSET ALLOCATION. G.T. Capital allocates the Fund's
assets among securities of countries and in currency denominations where
opportunities for meeting the Fund's investment objective are expected to be the
most attractive. The relative proportions of equity and debt securities held by
the Fund at any one time will vary, and will depend upon G.T. Capital's
assessment of global political and economic conditions and the relative
strengths and weaknesses of the world equity and debt markets. For instance, if
G.T. Capital expects the world's equity markets to produce strong appreciation,
a relatively greater portion of the Fund's assets may be invested in equity
securities. Conversely, if G.T. Capital believes equity markets will be weak for
a period of
Prospectus Page 8
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
time, the Fund may focus its investments on debt securities and higher yielding
equity securities. To enable the Fund to respond to general economic changes and
market conditions around the world, the Fund is authorized to invest up to 100%
of its total assets in either equity securities or debt securities.
G.T. Capital attempts to identify those countries and industries where economic
and political factors are likely to produce above-average growth rates and to
further identify companies in such countries and industries that are best
positioned and managed to benefit from these factors. In evaluating possible
equity investments, G.T. Capital attempts to identify and acquire only
securities it deems to represent high or improving investment quality.
Securities representing high investment quality generally will include those of
well-known, established and successful issuers that G.T. Capital believes will
continue to be successful in the future. Securities representing improving
investment quality may include those of an issuer which, for instance, has
improved its sales or earnings or of an issuer the balance sheet and financial
condition of which is improving. G.T. Capital seeks to avoid equity securities
that appear overly speculative or risky, even if they have otherwise attractive
features or investment potential.
In evaluating debt securities considered for the Fund, G.T. Capital analyzes
their yield, maturity, issue classification and quality characteristics, coupled
with expectations regarding the local and world economies, movements in the
general level and term of interest rates, currency values, political
developments, and variations of the supply of funds available for investment in
the world bond market relative to the demands placed upon it. G.T. Capital may
increase the average maturity of the portion of the Fund's portfolio invested in
debt obligations when it expects interest rates to decline, and may decrease
such maturity when it expects interest rates to rise. There are no limitations
on the maximum or minimum maturities of the debt securities considered by the
Fund for investment or on the average weighted maturity of the debt portion of
the Fund's portfolio.
Should the rating of any debt security be revised while such security is owned
by the Fund, G.T. Capital will evaluate what action, if any, is appropriate with
respect to such security. A description of the Moody's and S&P ratings is
included in the "Appendix" to the Statement of Additional Information.
G.T. Capital generally evaluates currencies on the basis of fundamental economic
criteria (e.g., relative inflation and interest rate levels and trends, growth
rate forecasts, balance of payments status and economic policies) as well as
technical and political data. If the currency in which a security is denominated
appreciates against the U.S. dollar, the dollar value of the security will
increase. Conversely, if the exchange rate of the foreign currency declines, the
dollar value of the security will decrease. However, the Fund may seek to
protect itself against such negative currency movements through the use of
hedging techniques. The Fund may also use instruments (including forward
currency contracts) often referred to as "derivatives." See "Options, Futures
and Forward Currency Transactions."
OTHER POLICIES. The Fund may invest up to 10% of its net assets in illiquid
securities and other securities for which no readily available market exists,
and up to 5% of its total assets in a combination of securities purchased on a
when-issued basis or with respect to which it has entered into forward
commitment agreements.
The Fund retains the flexibility to respond promptly to changes in market and
economic conditions. Accordingly, in the interest of preserving shareholders'
capital, G.T. Capital may employ a temporary defensive investment strategy if it
determines such a strategy to be warranted due to market conditions. Under a
defensive strategy, the Fund may hold cash (U.S. dollars, foreign currencies or
multinational currency units) and/or invest any portion or all of its assets in
high quality money market instruments of U.S. or foreign government or corporate
issuers, and most or all of the Fund's investments may be made in the United
States and denominated in U.S. dollars. To the extent the Fund adopts a
temporary defensive posture, it will not be invested so as to directly achieve
its investment objective. In addition, pending investment of proceeds from new
sales of Fund shares or in order to meet ordinary daily cash needs, the Fund may
hold cash (U.S. dollars, foreign currencies or multinational currency units) and
may invest in foreign or domestic high quality money market instruments. Money
market instruments in which the Fund may invest include, but are not limited to,
U.S. or foreign government securities; high grade commercial paper; bank
certificates of deposit; bankers' acceptances; and repurchase agreements
relating to any of the foregoing.
Prospectus Page 9
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
From time to time, it may be advantageous for the Fund to borrow money rather
than sell existing portfolio positions to meet redemption requests. Accordingly,
the Fund may borrow from banks or may borrow through reverse repurchase
agreements and "roll" transactions in connection with meeting requests for the
redemption of Fund shares. The Fund also may borrow up to 5% of its total assets
for temporary or emergency purposes other than to meet redemptions. However, the
Fund will not borrow for leverage purposes nor will the Fund purchase securities
while borrowings in excess of 5% of the Fund's total assets are outstanding. See
"Investment Objective and Policies" in the Statement of Additional Information.
The Fund is authorized to make loans of its portfolio securities to
broker/dealers or to other institutional investors. The borrower must maintain
with the Fund's custodian collateral consisting of cash, U.S. government
securities or other liquid, high grade debt securities equal to at least 100% of
the value of the borrowed securities, plus any accrued interest. The Fund will
receive any interest paid on the loaned securities and a fee and/or a portion of
the interest earned on the collateral. The Fund will limit its loans of
portfolio securities to an aggregate of 30% of the value of its total assets,
measured at the time any such loan is made. The risks in lending portfolio
securities, as with other extensions of secured credit, consist of possible
delay in receiving additional collateral or in recovery of the securities or
possible loss of rights in the collateral should the borrower fail financially.
RISK FACTORS. The Fund's net asset value will fluctuate, reflecting fluctuations
in the market value of its portfolio positions. Equity securities, particularly
common stocks, generally represent the most junior position in an issuer's
capital structure, and as such, generally entitle holders to an interest in the
assets of an issuer, if any, remaining after all more senior claims to such
assets have been satisfied. In addition, the value of debt securities held by
the Fund generally will fluctuate with changes in the perceived creditworthiness
of the issuers of such securities and movements in interest rates. Further,
investments in foreign governmental issuers of debt involve special risks,
including the risk that such governmental issuers may be unable or unwilling to
repay principal and interest when due. Investment grade debt securities rated
Baa by Moody's are described by Moody's as having speculative characteristics,
and therefore may be affected by economic conditions and changes in the
circumstances of their issuers to a greater extent than higher rated bonds.
The Fund normally will invest in a substantial number of issuers; however, the
Fund has registered under the 1940 Act as a "non-diversified" mutual fund so
that it will be able to invest, with respect to 50% of its assets, more than 5%
of its assets in the securities of a single issuer. Since, as a "non-
diversified" fund, the Fund is permitted to invest a greater proportion of its
assets in the securities of a smaller number of issuers, the Fund may be subject
to greater investment and credit risk with respect to its portfolio than a fund
which is diversified.
According to G.T. Capital, as of December 31, 1994, over 63% of the total equity
market capitalization worldwide was represented by non-U.S. equity securities,
and as of December 31, 1994, more than 63% of the value of all outstanding
government debt obligations throughout the world was represented by obligations
denominated in currencies other than the U.S. dollar. Moreover, from time to
time the equity and debt securities of issuers located outside the U.S. have
substantially outperformed the equity and debt securities of U.S. issuers.
Accordingly, G.T. Capital believes that the Fund's policy of investing in equity
and debt securities of issuers throughout the world may enable the achievement
of results superior to those produced by mutual funds with similar objectives to
those of the Fund that invest solely in U.S. equity and debt securities.
Nonetheless, foreign investing does entail certain risks. Foreign companies
generally are not subject to uniform accounting, auditing and financial
reporting standards, practices and requirements comparable to those applicable
to domestic companies. The securities of non-U.S. issuers generally will not be
registered with, nor the issuers thereof be subject to the reporting
requirements of the SEC. Accordingly, there may be less publicly available
information about foreign securities and issuers than is available about
domestic securities and issuers. Securities of some foreign companies are less
liquid and their prices may be more volatile than securities of comparable
domestic companies. In addition, certain costs attributable to foreign
investing, such as custody charges, are higher than those attributable to
domestic investing. The Fund's net investment income from foreign issuers may be
subject to non-U.S. withholding taxes, thereby reducing the Fund's net
investment income.
In addition, with respect to some foreign countries, there is the increased
possibility of expropriation or confiscatory taxation, limitations on the
removal of funds or other assets of the Fund, political or social instability,
or diplomatic or economic
Prospectus Page 10
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G.T. GLOBAL GROWTH & INCOME FUND
developments which could affect the Fund's investments in those countries.
Moreover, individual foreign economies may differ favorably or unfavorably from
the U.S. economy in such respects as growth of gross national product, rate of
inflation, rate of savings and capital reinvestment, resource self-sufficiency
and balance of payments positions. G.T. Capital will rely on its worldwide
financial and investment expertise to attempt to limit these risks.
Since the Fund may invest substantially in securities denominated in currencies
other than the U.S. dollar, and since the Fund may hold foreign currencies, the
Fund will be affected favorably or unfavorably by exchange control regulations
or changes in the exchange rates between such currencies and the U.S. dollar.
Changes in currency exchange rates will influence the value of the Fund's
shares, and also may affect the value of dividends and interest earned by the
Fund and gains and losses realized by the Fund. The exchange rates between the
U.S. dollar and other currencies are determined by supply and demand in the
currency exchange markets, the international balance of payments, government
intervention, speculation and other economic and political conditions.
OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. To attempt to increase
return, the Fund may write call options on securities, this strategy will be
employed only when, in the opinion of G.T. Capital, the size of the premium the
Fund receives for writing the option is adequate to compensate the Fund against
the risk that appreciation in the underlying security may not be fully realized
if the option is exercised. The Fund also is authorized to write put options to
attempt to enhance return, although it does not have the current intention of so
doing.
In seeking to protect against currency exchange rate or interest rate changes
that are adverse to its present or prospective positions, the Fund may employ
certain risk management practices involving the use of forward currency
contracts, futures contracts, options on securities, options on currencies,
options on indices and options on futures contracts to attempt to reduce the
overall level of investment risk normally associated with the Fund. These
instruments are often referred to as "derivatives," which may be defined as
financial instruments whose performance is derived, at least in part, from the
performance of another asset (such as a security, currency or an index of
securities). The Fund may enter into such instruments up to the full value of
its portfolio assets. There can be no assurance that the Fund's risk management
policies will succeed. These techniques are described below and are detailed
further in the Statement of Additional Information.
To attempt to hedge against adverse movements in exchange rates between
currencies, the Fund may enter into forward currency contracts for the purchase
or sale of a specified currency at a specified future date. Such contracts may
involve the purchase or sale of a foreign currency against the U.S. dollar, or
may involve two foreign currencies. The Fund may enter into forward currency
contracts either with respect to specific transactions or with respect to the
Fund's portfolio positions. For example, when the Fund anticipates making a
purchase or sale of a security, the Fund may enter into a forward currency
contract in order to set the rate (either relative to the U.S. dollar or another
currency) at which a currency exchange transaction related to the purchase or
sale will be made. Further, when G.T. Capital believes that a particular
currency may decline compared to the U.S. dollar or another currency, the Fund
may enter into a forward contract to sell the currency G.T. Capital expects to
decline in an amount approximating the value of some or all of the Fund's
portfolio securities denominated in a foreign currency. The Fund also may
purchase and sell put and call options on currencies to hedge against movements
in exchange rates. Premiums paid for currency options held by the Fund may not
exceed 5% of the Fund's total assets. The Fund may also purchase and sell
currency futures contracts and options on such futures contracts to hedge the
Fund's portfolio against movements in foreign currency exchange rates.
In addition, the Fund may purchase and sell put and call options on equity and
debt securities to hedge against the risk of fluctuations in the prices of
securities held by the Fund or that G.T. Capital intends to include in the
Fund's portfolio. The Fund also may write call and put options and buy put and
call options on stock indices. Such stock index options serve to hedge against
overall fluctuations in the securities markets or market sectors generally,
rather than anticipated increases or decreases in the value of a particular
security.
Further, the Fund may sell index futures contracts and may purchase put options
or write call options on such futures contracts to protect against a general
market or market sector decline that could adversely affect the Fund's
portfolio. The Fund also may buy index futures contracts and purchase call
options or write put options on such contracts to hedge against a general market
or market sector advance and thereby attempt to lessen the cost of
Prospectus Page 11
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
future securities acquisitions. Similarly, the Fund may use interest rate
futures contracts and options thereon to hedge the debt portion of its portfolio
against changes in the general level of interest rates.
In addition, the Fund may write and purchase put and call options on securities,
currencies and indices that are traded on recognized securities exchanges and
over-the-counter ("OTC") markets.
These practices may result in the loss of principal under certain conditions. In
addition, certain provisions of the Internal Revenue Code of 1986, as amended
("Code"), limit the extent to which the Fund may enter into forward contracts or
futures contracts or engage in options transactions. See "Taxes" in the
Statement of Additional Information.
Although the Fund might not employ any of the foregoing strategies, its use of
forward currency contracts, options and futures would involve certain investment
risks and transaction costs to which it might not otherwise be subject. These
risks include: (1) dependence on G.T. Capital's ability to predict movements in
the prices of individual securities, fluctuations in the general securities
markets and movements in interest rates and currency markets; (2) imperfect
correlation or even no correlation between movements in the price of forward
contracts, options, futures contracts or options thereon and movements in the
price of the currency or security hedged or used for cover; (3) the fact that
skills and techniques needed to trade options, futures contracts and options
thereon or to use forward currency contracts are different from those needed to
select the securities in which the Fund invests; (4) lack of assurance that a
liquid secondary market will exist for any particular option, futures contract
or option thereon at any particular time; (5) the possible inability of the Fund
to purchase or sell a portfolio security at a time when it would otherwise be
favorable for it to do so, or the possible need for the Fund to sell a security
at a disadvantageous time, due to the need for the Fund to maintain "cover" or
to segregate securities in connection with hedging transactions; and (6) the
possible need to defer closing out certain options, futures contracts and
options thereon and forward currency contracts in order to continue to qualify
for the beneficial tax treatment afforded regulated investment companies under
the Code. See "Dividends, Other Distributions and Federal Income Taxation"
herein and "Taxes" in the Statement of Additional Information. If G.T. Capital
incorrectly forecasts securities market movements, currency exchange rates or
interest rates in utilizing a strategy for the Fund, the Fund would be in a
better position if it had not hedged at all. The Fund may also conduct its
foreign currency exchange transactions on a spot (I.E., cash) basis at the spot
rate prevailing in the foreign currency exchange market.
REPURCHASE AGREEMENTS. Repurchase agreements are transactions in which the Fund
purchases a security from a bank or recognized securities dealer and
simultaneously commits to resell that security to the bank or dealer at an
agreed upon price, date, and market rate of interest unrelated to the coupon
rate or maturity of the purchased security. Although repurchase agreements carry
certain risks not associated with direct investments in securities, the Fund
intends to enter into repurchase agreements only with banks and dealers believed
by G.T. Capital to present minimum credit risks in accordance with guidelines
established by the Company's Board of Directors. G.T. Capital will review and
monitor the creditworthiness of such institutions under the Board's general
supervision. See "Investment Objective and Policies -- Repurchase Agreements" in
the Statement of Additional Information.
OTHER INFORMATION. The Fund's investment objective may not be changed without
the approval of a majority of the Fund's outstanding voting securities. As
defined in the 1940 Act and as used in this Prospectus, a "majority of the
Fund's outstanding voting securities" means the lesser of (i) 67% of the shares
represented at a meeting at which more than 50% of the outstanding shares are
represented, or (ii) more than 50% of the outstanding shares. In addition, the
Fund has adopted certain investment limitations which also may not be changed
without shareholder approval. A complete description of these limitations is
included in the Statement of Additional Information. Unless specifically noted,
the Fund's investment policies described in this Prospectus and in the Statement
of Additional Information may be changed by a vote of a majority of the
Company's Board of Directors without shareholder approval. The Fund's policies
regarding concentration and lending, and the percentage of Fund assets that may
be committed to borrowing, are fundamental policies and may not be changed
without shareholder approval. See "Investment Limitations" in the Statement of
Additional Information.
Prospectus Page 12
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
HOW TO INVEST
- --------------------------------------------------------------------------------
GENERAL. Advisor Class shares are offered through this Prospectus to (a)
trustees or other fiduciaries purchasing shares for employee benefit plans which
are sponsored by organizations which have at least 250 employees; (b) any
account investing at least $25,000 in one or more G.T. Global Mutual Funds if
(i) a financial planner, trust company, bank trust department or registered
investment adviser has investment discretion over such account, and (ii) the
account holder pays such person as compensation for its advice and other
services an annual fee of at least .50% on the assets in the account ("Advisory
Account"); (c) any account investing at least $25,000 in one or more G.T. Global
Mutual Funds if (i) such account is established under a "wrap fee" program, and
(ii) the account holder pays the sponsor of such program an annual fee of at
least .50% on the assets in the account ("Wrap Fee Account"); (d) accounts
advised by one of the companies comprising or affiliated with the G.T. Group;
and (e) any of the companies comprising or affiliated with the G.T. Group.
Financial planners, trust companies, bank trust companies and registered
investment advisers referenced in subpart (b) and sponsors of "wrap fee"
programs referenced in subpart (c) are collectively referred to as "Financial
Advisors." Investors in Wrap Fee Accounts and Advisory Accounts may only
purchase Advisor Class shares through Financial Advisors who have entered into
agreements with G.T. Global and certain of its affiliates.
Investors eligible to purchase Advisor Class shares will be sold only Advisor
Class shares rather than any other class of shares offered by the Fund.
Orders received by G.T. Global before the close of regular trading on the New
York Stock Exchange ("NYSE") (currently 4:00 P.M. Eastern time, unless weather,
equipment failure or other factors contribute to an earlier closing time) on any
Business Day will be executed at the public offering price for the applicable
class of shares determined that day. A "Business Day" is any day Monday through
Friday on which the NYSE is open for business. All purchase orders will be
executed at the public offering price next determined after the purchase order
is received. The Fund and G.T. Global reserve the right to reject any purchase
order and to suspend the offering of shares for a period of time.
Fiduciaries and Financial Advisors may be required to provide information
satisfactory to G.T. Global concerning their eligibility to purchase Advisor
Class shares. For specific information on opening an account, please contact
your Financial Advisor or G.T. Global.
PURCHASE BY BANK WIRE. Shares of the Fund may also be purchased through G.T.
Global by bank wire. Bank wire purchases will be effected at the next determined
public offering price after the bank wire is received. Accordingly, a bank wire
received by the close of regular trading on the NYSE on a Business Day will be
effected that day. A wire investment is considered received when the Transfer
Agent is notified that the bank wire has been credited to the Fund. Prior
telephonic or facsimile notice that a bank wire is being sent must be provided
to the Transfer Agent. A bank may charge a service fee for wiring money to the
Fund. The Transfer Agent currently does not charge a service fee for
facilitating wire purchases, but reserves the right to do so in the future. For
more information, please refer to the Shareholder Account Manual in this
Prospectus.
CERTIFICATES. In the interest of economy and convenience, physical certificates
representing the Fund's shares will not be issued unless a written request is
submitted to the Transfer Agent. Shares of the Fund are recorded on a register
by the Transfer Agent, and shareholders who do not elect to receive certificates
have the same rights of ownership as if certificates had been issued to them.
Redemptions and exchanges by shareholders who hold certificates may take longer
to effect than similar transactions involving non-certificated shares because
the physical delivery and processing of properly executed certificates is
required. ACCORDINGLY, THE FUND AND G.T. GLOBAL RECOMMEND THAT SHAREHOLDERS DO
NOT REQUEST ISSUANCE OF CERTIFICATES.
Prospectus Page 13
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
HOW TO MAKE EXCHANGES
- --------------------------------------------------------------------------------
Advisor Class shares of the Fund may only be exchanged for Advisor Class shares
of the other G.T. Global Mutual Funds, based on their respective net asset
values, provided that the registration remains identical. This exchange
privilege is available only in those jurisdictions where the sale of G.T. Global
Mutual Fund Shares to be acquired may be legally made. EXCHANGES ARE NOT
TAX-FREE AND MAY RESULT IN A SHAREHOLDER REALIZING A GAIN OR LOSS, AS THE CASE
MAY BE, FOR TAX PURPOSES. See "Dividends, Other Distributions and Federal Income
Taxation." Other than the Fund, the G.T. Global Mutual Funds currently include:
-- G.T. GLOBAL: WORLDWIDE GROWTH FUND
-- G.T. GLOBAL: INTERNATIONAL GROWTH FUND
-- G.T. GLOBAL EMERGING MARKETS FUND
-- G.T. GLOBAL HEALTH CARE FUND
-- G.T. GLOBAL TELECOMMUNICATIONS FUND
-- G.T. GLOBAL INFRASTRUCTURE FUND
-- G.T. GLOBAL FINANCIAL SERVICES FUND
-- G.T. GLOBAL NATURAL RESOURCES FUND
-- G.T. GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
-- G.T. GLOBAL: NEW PACIFIC GROWTH FUND*
-- G.T. GLOBAL: EUROPE GROWTH FUND
-- G.T. LATIN AMERICA GROWTH FUND
-- G.T. GLOBAL: JAPAN GROWTH FUND
-- G.T. GLOBAL: AMERICA GROWTH FUND
-- G.T. GLOBAL GOVERNMENT INCOME FUND
-- G.T. GLOBAL STRATEGIC INCOME FUND
-- G.T. GLOBAL HIGH INCOME FUND
-- G.T. GLOBAL DOLLAR FUND
- ----------------
* Formerly G.T. Pacific Growth Fund
Up to four exchanges each year may be made without charge. A $7.50 service
charge will be imposed on each subsequent exchange. Exchange requests received
in good order by the Transfer Agent before the close of regular trading on the
NYSE on any Business Day will be processed at the net asset value calculated on
that day.
EXCHANGES BY TELEPHONE. A shareholder may give exchange instructions to his or
her Financial Advisor. Exchange orders will be accepted by telephone provided
that the exchange involves only uncertificated shares on deposit in the
shareholder's account or for which certificates previously have been deposited.
Shareholders automatically have telephone privileges to authorize redemptions.
The Fund, G.T. Global and the Transfer Agent shall not be liable for any loss or
damage for acting in good faith upon instructions received by telephone and
reasonably believed to be genuine. The Fund employs reasonable procedures to
confirm that instructions communicated by telephone are genuine, including
requiring some form of personal identification prior to acting upon instructions
received by telephone, providing written confirmation of such transactions,
and/or tape recording of telephone instructions. The Fund may be liable for any
losses due to unauthorized or fraudulent instructions if it does not follow
reasonable procedures.
Investors in Wrap Fee Accounts and Advisory Accounts interested in making an
exchange should contact their Financial Advisors to request the prospectuses of
the other G.T. Global Mutual Fund(s) being considered. Other investors should
contact G.T. Global. See the Shareholder Account Manual in this Prospectus.
OTHER INFORMATION ABOUT EXCHANGES. Purchases, redemptions and exchanges should
be made for investment purposes only. A pattern of frequent exchanges, purchases
and sales is not acceptable and can be limited by the Fund's or G.T. Global's
refusal to accept further purchase and exchange orders. The terms of the
exchange offer described above may be modified at any time, on 60 days' prior
written notice.
Prospectus Page 14
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
HOW TO REDEEM SHARES
- --------------------------------------------------------------------------------
Fund shares may be redeemed at their net asset value and redemption proceeds
will be sent within seven days of the execution of a redemption request.
Redemption requests may be transmitted to the Transfer Agent by telephone or by
mail, in accordance with the instructions provided in the Shareholder Account
Manual. All redemptions will be effected at the net asset value next determined
after the Transfer Agent has received the request and any required supporting
documentation. Redemption requests received before the close of regular trading
on the NYSE on any Business Day will be effected at the net asset value
calculated on that day. Redemption requests will not require a signature
guarantee if the redemption proceeds are to be sent either: (i) to the redeeming
shareholder at the shareholder's address of record as maintained by the Transfer
Agent, provided the shareholder's address of record has not been changed within
the preceding thirty days; or (ii) directly to a pre-designated bank, savings
and loan or credit union account ("Pre-Designated Account"). ALL OTHER
REDEMPTION REQUESTS MUST BE ACCOMPANIED BY A SIGNATURE GUARANTEE OF THE
REDEEMING SHAREHOLDER'S SIGNATURE. A signature guarantee can be obtained from
any bank, U.S. trust company, a member firm of a U.S. stock exchange or a
foreign branch of any of the foregoing or other eligible guarantor institutions.
A notary public is not an acceptable guarantor.
Shareholders with Pre-Designated Accounts should request that redemption
proceeds be sent either by bank wire or by check. The minimum redemption amount
for a bank wire is $1,000. Shareholders requesting a bank wire should allow two
business days from the time the redemption request is effected for the proceeds
to be deposited in the shareholder's Pre-Designated Account. See "How to Redeem
Shares -- Other Important Redemption Information." Shareholders may change their
Pre-Designated Accounts only by a letter of instruction to the Transfer Agent
containing all account signatures, each of which must be guaranteed. The
Transfer Agent currently does not charge a bank wire service fee for each wire
redemption sent but reserves the right to do so in the future. The shareholder's
bank may change a bank wire service fee.
REDEMPTIONS BY TELEPHONE. Redemption requests may be made by telephone by
calling the Transfer Agent at the appropriate toll free number provided in the
Shareholder Account Manual. Shareholders who hold certificates for shares may
not redeem by telephone. REDEMPTION REQUESTS MAY NOT BE MADE BY TELEPHONE FOR
THIRTY DAYS FOLLOWING ANY CHANGE OF THE SHAREHOLDER'S ADDRESS OF RECORD.
Shareholders automatically have telephone privileges to authorize redemptions.
The Fund, G.T. Global and the Transfer Agent shall not be liable for any loss or
damage for acting in good faith upon instructions received by telephone and
reasonably believed to be genuine. The Fund employs reasonable procedures to
confirm that instructions communicated by telephone are genuine, including
requiring some form of personal identification prior to acting upon instructions
received by telephone, providing written confirmation of such transactions,
and/or tape recording of telephone instructions. The Fund may be liable for any
losses due to unauthorized or fraudulent instructions if it does not follow
reasonable procedures.
REDEMPTIONS BY MAIL. Redemption requests should be mailed directly to the
Transfer Agent at the appropriate address provided in the Shareholder Account
Manual. As discussed above, requests for payment of redemption proceeds to a
party other than the shareholder of record and/or requests that redemption
proceeds be mailed to an address other than the shareholder's address of record
require a signature guarantee. In addition, if the shareholder's address of
record has been changed within the preceding thirty days, a signature guarantee
is required. Redemptions of shares for which certificates have been issued must
be accompanied by properly endorsed share certificates.
OTHER IMPORTANT REDEMPTION INFORMATION. A request for redemption will not be
processed until all of the necessary documentation has been received in good
order. A shareholder in a Wrap Fee Account or Advisory Account who is in doubt
as to
Prospectus Page 15
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
what documents are required should contact his or her Financial Advisor.
Except in extraordinary circumstances and as permitted under the 1940 Act,
payment for shares redeemed by telephone or in writing will be made promptly
after receipt of a redemption request, if in good order, but not later than
seven days after the date the request is executed. Requests for redemption which
are subject to any special conditions or which specify a future or post
effective date cannot be accepted.
If the Transfer Agent is requested to redeem shares for which the Fund has not
yet received good payment, the Fund may delay payment of redemption proceeds
until it has assured itself that good payment has been collected for the
purchase of the shares. In the case of purchases by check it can take up to 10
business days to confirm that the check has cleared and good payment has been
received. Redemption proceeds will not be delayed when shares have been paid for
by wire or when the investor's account holds a sufficient number of shares for
which funds already have been collected.
G.T. Global reserves the right to redeem the shares of any Advisory Account or
Wrap Fee Account if the amount invested in G.T. Global Mutual Funds through such
account is reduced to less than $25,000 through redemptions or other action by
the shareholder. Written notice will be given to the shareholder at least 60
days prior to the date fixed for such redemption, during which time the
shareholder may increase the amount invested in G.T. Global Mutual Funds through
such account to an aggregate amount of $25,000 or more.
For more information on how to redeem Fund shares, see the Shareholder Account
Manual in this Prospectus, or contact your Financial Advisor.
Prospectus Page 16
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
SHAREHOLDER ACCOUNT MANUAL
- --------------------------------------------------------------------------------
Purchase, exchange and redemption orders may be placed in accordance with this
Manual. It is recommended that investors in Wrap Fee Accounts and Advisory
Acounts make such orders through their Financial Advisor. INVESTORS SHOULD
REFERENCE "ADVISOR CLASS" IN ALL INSTRUCTIONS PROVIDED. See "How to Invest;"
"How to Make Exchanges;" "How to Redeem Shares"; and "Dividends, Other
Distributions and Federal Income Taxation -- Taxes" for more information.
The Fund's Transfer Agent is G.T. GLOBAL INVESTOR SERVICES, INC.
INVESTMENTS BY MAIL
Send completed Account Application (if initial purchase) or letter stating Fund
name, class of shares, shareholder's registered name and account number (if
subsequent purchase) with a check to:
G.T. Global
P.O. Box 7345
San Francisco, California 94120-7345
INVESTMENTS BY BANK WIRE
A new account may be opened by calling 1-800-223-2138 to obtain an account
number. WITHIN SEVEN DAYS OF PURCHASE A COMPLETED ACCOUNT APPLICATION CONTAINING
THE INVESTOR'S CERTIFIED TAXPAYER IDENTIFICATION NUMBER MUST BE SENT TO G.T.
GLOBAL AT THE ADDRESS PROVIDED ABOVE UNDER "INVESTMENTS BY MAIL." Wire
instructions must state Fund name, class of shares, shareholder's registered
name and account number. Bank wires should be sent through the Federal Reserve
Bank Wire System to:
WELLS FARGO BANK N.A.
ABA 121000248
Attn: G.T. GLOBAL
Account No. 4023-050701
EXCHANGES BY TELEPHONE
Call G.T. Global at 1-800-223-2138
EXCHANGES BY MAIL
Send complete instructions, including name of Fund exchanging from, class of
shares, amount of exchange, name of the G.T. Global Mutual Fund exchanging into,
shareholder's registered name and account number, to:
G.T. Global
P.O. Box 7893
San Francisco, California 94120-7893
REDEMPTIONS BY TELEPHONE
Call G.T. Global at 1-800-223-2138
REDEMPTIONS BY MAIL
Send complete instructions, including name of Fund, class of shares, amount of
redemption, shareholder's registered name and account number, to:
G.T. Global
P.O. Box 7893
San Francisco, California 94120-7893
OVERNIGHT MAIL
Overnight mail services do not deliver to post office boxes. To send purchase,
exchange or redemption orders by overnight mail, comply with the instructions
but send to the following:
G.T. Global Investor Services
California Plaza
2121 N. California Boulevard
Suite 450
Walnut Creek, California 94596
ADDITIONAL QUESTIONS
Shareholders with additional questions regarding purchase, exchange and
redemption procedures may call G.T. Global at 1-800-223-2138.
Prospectus Page 17
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
CALCULATION OF NET ASSET VALUE
- --------------------------------------------------------------------------------
The Fund calculates its net asset value as of the close of normal trading on the
NYSE (currently 4:00 p.m. Eastern Time, unless weather, equipment failure or
other factors contribute to an earlier closing time) each Business Day. The
Fund's net asset value per share is computed by determining the value of its
total assets (the securities it holds plus any cash or other assets, including
the interest accrued but not yet received), subtracting all the Fund's
liabilities (including accrued expenses), and dividing the result by the total
number of shares outstanding at such time. Net asset value is determined
separately for each class of the Fund.
Equity securities are valued at the last sale price on the exchange 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. Long-term obligations are valued at the
mean of representative quoted bid and asked prices for such securities or, if
such prices are not available, at prices for securities of comparable maturity,
quality and type; however, when G.T. Capital deems it appropriate, prices
obtained from a bond pricing service will be used. Short-term debt investments
are amortized to maturity based on their cost, adjusted for foreign exchange
translation and market fluctuations, provided such valuations represent fair
value. When market quotations for futures and options positions held by the Fund
are readily available, those positions will be valued based upon such
quotations.
Securities and other assets for which market quotations are not readily
available are valued at fair value determined in good faith by the Company's
Board of Directors. Securities quoted in foreign currencies will be valued in
U.S. dollars based on the prevailing exchange rates on that day.
The Fund's portfolio securities, from time to time, may be listed primarily on
foreign exchanges or over-the-counter dealer markets which trade on days when
the NYSE is closed (such as a Saturday). As a result, the net asset values of
the Fund may be significantly affected by such trading on days when shareholders
cannot purchase or redeem shares of the Fund.
- --------------------------------------------------------------------------------
DIVIDENDS, OTHER DISTRIBUTIONS
AND FEDERAL INCOME TAXATION
- --------------------------------------------------------------------------------
DIVIDENDS AND OTHER DISTRIBUTIONS. The Fund pays quarterly dividends from its
net investment income, if any, which includes dividends, accrued interest and
earned discount (including both original issue and market discounts) less
applicable expenses. The Fund also normally distributes for each fiscal year
substantially all of its realized net short-term capital gains (the excess of
short-term capital gains over short-term capital losses), net capital gain (the
excess of net long-term capital gain over net short-term capital loss) and net
gains from foreign currency transactions, if any. The Fund may make an
additional dividend or other distribution if necessary to avoid a 4% excise tax
on certain undistributed income and gain.
Dividends and other distributions paid by the Fund with respect to all classes
of its shares are calculated in the same manner and at the same time. The per
share income dividends on Advisor Class shares will be higher than the per share
income dividends on other classes of the Fund's shares as a result of the
service and distribution fees applicable to those other shares. SHAREHOLDERS MAY
ELECT:
/ / to have all dividends and other distributions automatically reinvested in
additional Advisor Class shares of the Fund (or other G.T. Global Mutual
Funds); or
/ / to receive dividends in cash and have other distributions automatically
reinvested in additional Advisor Class shares of the Fund (or other G.T.
Global Mutual Funds); or
/ / to receive other distributions in cash and have dividends automatically
reinvested in additional
Prospectus Page 18
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
Advisor Class shares of the Fund (or other G.T. Global Mutual Funds); or
/ / to receive dividends and other distributions in cash.
Automatic reinvestments in additional Advisor Class shares are made at net asset
value without imposition of a sales charge. IF NO ELECTION IS MADE BY A
SHAREHOLDER, ALL DIVIDENDS AND OTHER DISTRIBUTIONS WILL BE REINVESTED
AUTOMATICALLY IN ADDITIONAL ADVISOR CLASS SHARES OF THE FUND. Reinvestments in
another G.T. Global Mutual Fund may only be directed to an account with the
identical shareholder registration and account number. These elections may be
changed by a shareholder at any time; to be effective with respect to a
distribution, the shareholder or the shareholder's broker must contact the
Transfer Agent by mail or telephone at least 15 Business Days prior to the
payment date. THE FEDERAL INCOME TAX STATUS OF DIVIDENDS AND OTHER DISTRIBUTIONS
IS THE SAME WHETHER THEY ARE RECEIVED IN CASH OR REINVESTED IN ADDITIONAL
SHARES.
Any dividend or other distribution paid by the Fund has the effect of reducing
the net asset value per share on the ex-dividend date by the amount thereof.
Therefore, a dividend or other distribution paid shortly after a purchase of
shares would represent, in substance, a return of capital to the shareholder (to
the extent it is paid on the shares so purchased), even though subject to income
tax, as discussed below.
TAXES. The Fund intends to continue to qualify for treatment as a regulated
investment company under the Code. In each taxable year that the Fund so
qualifies, the Fund (but not its shareholders) will be relieved of federal
income tax on that part of its investment company taxable income (consisting
generally of net investment income, net gains from certain foreign currency
transaction and net short-term capital gain) and net capital gain that is
distributed to its shareholders.
Dividends from the Fund's investment company taxable income (whether paid in
cash or reinvested in additional shares) are taxable to its shareholders as
ordinary income to the extent of the Fund's earnings and profits. Distributions
of the Fund's net capital gain when designated as such, are taxable to its
shareholders as long-term capital gain, regardless of how long they have held
their Fund shares and whether paid in cash or reinvested in additional shares.
The Fund provides federal tax information to its shareholders annually,
including information about dividends and other distributions paid during the
preceding year and, under certain circumstances, the shareholders' respective
shares of any foreign taxes paid by the Fund, in which event each shareholder
would be required to include in his or her gross income his or her pro rata
share of those taxes but might be entitled to claim a credit or deduction for
them.
The Fund must withhold 31% from dividends, capital gain distributions and
redemption proceeds payable to any individuals and certain other noncorporate
shareholders who have not furnished to the Fund a correct taxpayer
identification number or a properly completed claim for exemption on Form W-8 or
W-9. Withholding at that rate also is required from dividends and capital gain
distributions payable to such shareholders who otherwise are subject to backup
withholding. Fund accounts opened via a bank wire purchase (see "How to Invest
- -- Purchases Through the Distributor") are considered to have uncertified
taxpayer identification numbers unless a completed Form W-8 or W-9 or Account
Application is received by the Transfer Agent within seven days after the
purchase. A shareholder should contact the Transfer Agent if the shareholder is
uncertain whether a proper taxpayer identification number is on file with the
Fund.
A redemption of Fund shares may result in taxable gain or loss to the redeeming
shareholder, depending upon whether the redemption proceeds are more or less
than the shareholder's adjusted basis for the redeemed shares. An exchange of
Fund shares for shares of another G.T. Global Mutual Fund generally will have
similar tax consequences. In addition, if Fund shares are purchased within 90
days before or after redeeming other Fund shares (regardless of class) at a
loss, all or a part of the loss will not be deductible and instead will increase
the basis of the newly purchased shares.
The foregoing is only a summary of some of the important federal tax
considerations generally affecting the Fund and its shareholders. See "Taxes" in
the Statement of Additional Information for a further discussion. There may be
other federal, state, local or foreign tax considerations applicable to a
particular investor. Prospective investors therefore are urged to consult their
tax advisers.
Prospectus Page 19
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
MANAGEMENT
- --------------------------------------------------------------------------------
The Company's Board of Directors has overall responsibility for the operation of
the Fund. Pursuant to such responsibility, the Board has approved contracts with
various financial organizations to provide, among other things, day to day
management services required by the Fund.
INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by G.T. Capital as
the Fund's investment manager and administrator include, but are not limited to,
determining the composition of the Fund's portfolio and placing orders to buy,
sell or hold particular securities; furnishing corporate officers and clerical
staff; providing office space, services and equipment; and supervising all
matters relating to the Fund's operation. For these services, the Fund pays G.T.
Capital investment management and administration fees, computed daily and paid
monthly, based on the average daily net assets, at the annualized rate of .975%
on the first $500 million, .95% on the next $500 million, .925% on the next $500
million and .90% on amounts thereafter. This rate is higher than that paid by
most mutual funds.
G.T. Capital, organized in 1973, provides investment management and/or
administration services to all the G.T. Global Mutual Funds as well as to other
institutional, corporate and individual clients. The offices of G.T. Capital are
located at 50 California Street, 27th Floor, San Francisco, California 94111.
G.T. Capital is the U.S. member of the G.T. Group, an international investment
advisory organization established in 1969 for the purpose of rendering
international portfolio management services to both institutional and individual
clients. Since the G.T. Group was established, it has gained a reputation as a
leader in identifying and investing in emerging and established markets around
the world. As of April 1, 1995, aggregate assets under G.T. Group management
exceeded $20 billion, of which more than $17 billion was invested in the
securities of non-U.S. issuers.
In addition to the San Francisco office, the G.T. Group maintains investment
offices in London, Hong Kong, Tokyo, Toronto, Singapore and Sydney. Many of G.T.
Capital's investment managers are natives of the countries in which they invest,
and have the advantage of being close to the financial markets they follow and
speaking the languages of local corporate and government leaders. G.T. Capital's
experienced management team is situated to react quickly to changes in foreign
markets which are in time zones different from those in the United States.
G.T. Capital and the other companies in the G.T. Group are subsidiaries of BIL
GT Group Limited ("BIL GT Group"), a financial services holding company. BIL GT
Group in turn is controlled by the Prince of Liechtenstein Foundation, which
serves as the parent organization for the various business enterprises of the
Princely Family of Liechtenstein. Its principal business address is Herrengasse
12, FL-9490, Vaduz, Liechtenstein.
Prospectus Page 20
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
In managing the Fund, G.T. Capital employs a team approach, taking advantage of
the resources of its various investment offices around the world in seeking to
achieve the Fund's objectives. In addition, in managing the Fund these
individuals utilize the research and related work of other members of G.T.
Capital's investment staff. The investment professionals primarily responsible
for the portfolio management of the Fund are as follows:
GROWTH & INCOME FUND
<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE FUND LAST FIVE YEARS
- ----------------------------------- ---------------------------------------- ----------------------------------------
<S> <C> <C>
Nicholas S. Train Portfolio Manager (asset allocation and Portfolio Manager for G.T. Management
London non-U.S. security selection) since 1991 PLC (London); Portfolio Manager for
G.T. Capital since 1991
Soraya M. Betterton Portfolio Manager (U.S. and Latin Portfolio Manager for G.T. Capital
San Francisco America security selection) since 1991
Gary Kreps Overall supervision and asset allocation Chief Investment Officer -- Global Fixed
San Francisco of established market debt investments Income Investments for G.T. Capital
since 1992 since 1992; From 1988 to 1992, Mr.
Kreps was the Senior Vice President for
Global Fixed Income for Putnam
Management Co. (Boston)
Paul Murray-John Portfolio Manager (established market Trader for G.T. Management PLC (London)
London debt selection) since 1994 since 1993; From 1992 to 1993, Mr.
Murray-John was an Analyst, Bloomberg,
L.P. Prior thereto, he was Fund Manager
for Robert Fleming & Co.; Portfolio
Manager of G.T. Capital since 1994
</TABLE>
In placing orders for the Fund's portfolio transactions, G.T. Capital seeks to
obtain the best net results. G.T. Capital has no agreement or commitment to
place orders with any broker/dealer. Commissions or discounts in foreign
securities exchanges and OTC markets often are fixed and generally are higher
than those in U.S. securities exchanges or markets. Consistent with its
obligation to obtain best net results, G.T. Capital may consider a
broker/dealer's sale of shares of the G.T. Global Mutual Funds as a factor in
considering through whom portfolio transactions will be effected. Brokerage
transactions for the Fund may be executed through any of the BIL GT Group
affiliates.
The Fund's portfolio turnover rate during the fiscal year ended October 31, 1994
was 117%. However, G.T. Capital does not regard portfolio turnover as a limiting
factor and will buy or sell securities for either Fund as necessary in response
to market conditions to meet the Fund's objective. The portfolio turnover rate
is calculated by dividing the lesser of sales or purchases of portfolio
securities by the Fund's average month-end portfolio value, excluding short-term
investments. For purposes of this calculation, portfolio securities exclude
purchases and sales of debt securities having a maturity at the date of purchase
of one year or less. Increase in portfolio turnover involves correspondingly
greater transaction costs in the form of brokerage commissions or dealer spreads
and other costs that a Fund will bear directly, and may result in the
realization of net capital gains, which are taxable when distributed to
shareholders.
DISTRIBUTION OF FUND SHARES. G.T. Global is the distributor, or principal
underwriter, of the Fund's Advisor Class shares. Like G.T. Capital, G.T. Global
is a subsidiary of BIL GT Group with offices at 50 California Street, 27th
Floor, San Francisco, California 94111.
G.T. Capital or an affiliate thereof may make ongoing payments to Finaical
Advisors and others that facilitate the administration and servicing of Advisor
Class shareholder accounts.
G.T. Global, at its own expense, may also provide promotional incentives to
brokers that sell shares of the Fund and/or shares of the other G.T. Global
Mutual Funds. In some instances compensation or promotional incentives may be
offered to brokers that have sold or may sell significant amounts of shares
during specified periods of time. Such compensation and incentives may include,
but are
Prospectus Page 21
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
not limited to, cash, merchandise, trips and financial assistance to brokers in
connection with preapproved conferences or seminars, sales or training programs
for invited sales personnel, payment for travel expenses (including meals and
lodging) incurred by sales personnel and members of their families or other
invited guests to various locations for such seminars or training programs,
seminars for the public, advertising and sales campaigns regarding one or more
of the G.T. Global Mutual Funds, and/or other events sponsored by the broker.
The Glass-Steagall Act and other applicable laws, among other things, generally
prohibit federally chartered or supervised banks from engaging in the business
of underwriting or distributing securities. Accordingly, G.T. Global intends to
engage banks (if at all) only to perform administrative and shareholder
servicing functions. Banks and broker/ dealer affiliates of banks may also
execute dealer agreements with G.T. Global for the purpose of selling shares of
the Fund. If a bank were prohibited from so acting, its shareholder clients
would be permitted to remain shareholders, and alternative means for continuing
the servicing of such shareholders would be sought. It is not expected that
shareholders would suffer any adverse financial consequences as a result of any
of these occurrences.
- --------------------------------------------------------------------------------
OTHER INFORMATION
- --------------------------------------------------------------------------------
CONFIRMATIONS AND REPORTS TO SHAREHOLDERS. Each time a transaction is made that
affects a shareholder's account in the Fund, such as an additional investment, a
redemption or the payment of a dividend or other distribution, the shareholder
will receive from the Transfer Agent a confirmation statement reflecting the
transaction. Confirmations for transactions effected pursuant to the Fund's
automatic dividend reinvestment program may be provided quarterly. Shortly after
the end of the Fund's fiscal year on October 31 and fiscal half-year on April 30
of each year, shareholders receive an annual and semiannual report,
respectively. These reports list the securities held by the Fund and financial
statements relating to the Fund. In addition, the federal income tax status of
distributions made by the Fund to shareholders are reported after the end of
each calendar year on Form 1099-DIV.
ORGANIZATION. The Company was organized as a Maryland corporation on October 29,
1987. Until April 28, 1989, the name of the Company was G.T. Global Income
Series, Inc. From time to time, the Company may establish other funds, each
corresponding to a distinct investment portfolio and a distinct series of the
Company's common stock. Shares of the Fund are entitled to one vote per share
(with proportional voting for fractional shares) and are freely transferable.
Shareholders have no preemptive or conversion rights.
On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of its investment
management arrangements. In addition, each class of shares of the Fund has
exclusive voting rights with respect to its distribution plan. The shares of all
the Company's funds will be voted in the aggregate on other matters, such as the
election of Directors and ratification of the Board of Directors' selection of
the Company's independent accountants.
Normally there will be no annual meeting of shareholders in any year, except as
required under the 1940 Act. The Company would be required to hold a
shareholders' meeting in the event that at any time less than a majority of the
Directors holding office had been elected by shareholders. Directors shall
continue to hold office until their successors are elected and have qualified.
Shares of the Company's funds do not have cumulative voting rights, which means
that the holders of a majority of the shares voting for the election of
Directors can elect all the Directors. A Director may be removed upon a majority
vote of the shareholders qualified to vote in the election. Shareholders holding
10% of the Company's outstanding voting securities may call a meeting of
shareholders for the purpose of voting upon the question of removal of any
Director or for any other purpose. The 1940 Act requires the Company to assist
shareholders in calling such a meeting.
Advisor Class shares are offered through this prospectus to certain other
investors. There are two
Prospectus Page 22
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
other classes of shares offered to investors through a separate prospectus:
Class A shares and Class B shares.
CLASS A. Class A shares are sold at new asset value plus an initial sales charge
of up to 4.75% of the public offering price imposed at the time of purchase.
This initial sales charge is reduced or waived for certain purchases. Class A
shares of each Fund also bear annual service and distribution fees of up to
0.35% of the average daily net assets of that class. For the fiscal year ended
December 31, 1994, total operating expenses for the Class A shares were 1.67% of
average net assets for the Fund.
CLASS B. Class B shares are sold at net asset value with no initial sales charge
at the time of purchase. Class B shares bear annual service and distribution
fees of up to 1.00% of the average daily net assets of that class, and investors
pay a contingent deferred sales charge of up to 5% of the lesser of the original
purchase price or the net asset value of such shares at the time of redemption.
This deferred sales charge is waived for certain redemptions and is reduced for
shares held more than one year. For the fiscal year ended December 31, 1994,
total operating expenses for the Class B shares were 2.32% of average net assets
for the Fund.
The different expenses borne by each class of shares will result in different
net asset values and dividends. The per share net asset value of the Advisor
Class shares of a Fund generally will be higher than that of the Class A and B
shares of that Fund because of the higher expenses borne by the Class A and B
shares. The per share dividends on Advisor Class shares of a Fund will generally
be higher than the per share dividends on Class A and B shares of that Fund as a
result of the service and distribution fees applicable with respect to Class A
and B shares. Consequently, during comparable periods, the Fund expects that the
total return on an investment in shares of the Advisor Class will be higher than
the total return on Class A or Class B shares.
Pursuant to the Company's Articles of Incorporation, it may issue six billion
shares. Of this number, 300 million shares have been classified as shares of the
Fund; 100 million shares have been classified as Class A shares, 100 million
shares have been classified as Class B shares and 100 million shares have been
classified as Advisor Class shares for the Fund. This amount may be increased
from time to time in the discretion of the Board of Directors. Each share of the
Fund represents an interest in the Fund only, has a par value of $0.0001 per
share, represents an equal proportionate interest in the Fund with other shares
of the Fund and is entitled to such dividends and other distributions out of the
income earned and gain realized on the assets belonging to the Fund as may be
declared at the discretion of the Board of Directors. Each Class A, Class B and
Advisor Class share of the Fund is equal as to earnings, assets and voting
privileges, except as noted above, and each class bears the expenses, if any,
related to the distribution of its shares. Shares of the Fund when issued are
fully paid and nonassessable.
SHAREHOLDER INQUIRIES. Shareholder inquiries may be made by calling the Fund
toll free at (800) 223-2138 or by writing to the Fund at P.O. Box 7893, San
Francisco, California 94120-7893.
PERFORMANCE INFORMATION. The Fund, from time to time, may include information on
its investment results and/or comparisons of its investment results to various
unmanaged indices or results of other mutual funds or groups of mutual funds in
advertisements, sales literature or reports furnished to present or prospective
shareholders.
In such materials, the Fund may quote its average annual total return
("Standardized Return"). Standardized Return is calculated separately for each
class of shares of the Fund. Standardized Return shows percentage rates
reflecting the average annual change in the value of an assumed investment in
the Fund at the end of a one-year period and at the end of five- and ten-year
periods, reduced by the maximum applicable sales charge imposed on sales of Fund
shares. If a one-, five- and/ or ten-year period has not yet elapsed, data will
be provided as of the end of a shorter period corresponding to the life of the
Fund. Standardized Return assumes the reinvestment of all dividends and other
distributions at net asset value on the reinvestment date as established by the
Board of Directors.
In addition, in order to more completely represent the Fund's performance or
more accurately compare such performance to other measures of investment return,
the Fund also may include in advertisements, sales literature and shareholder
reports other total return performance data ("Non-Standardized Return").
Non-Standardized return reflects percentage rates of return encompassing all
elements of total return (e.g., income and capital appreciation or
depreciation); it assumes reinvestment of all dividends and other
Prospectus Page 23
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
distributions. Non-Standardized Return may be quoted for the same or different
periods as those for which Standardized Return is quoted; it may consist of an
aggregate or average annual percentage rate of return, actual year-by-year rates
or any combination thereof. Non-Standardized Return may or may not take sales
charges into account; performance data calculated without taking the effect of
sales charges into account will be higher than data including the effect of such
charges.
The Fund's performance data reflects past performance and is not necessarily
indicative of future results. The Fund's investment results will vary from time
to time depending upon market conditions, the composition of its portfolio and
its operating expenses. These factors and possible differences in calculation
methods should be considered when comparing the Fund's investment results with
those published for other investment companies, other investment vehicles and
unmanaged indices. The Fund's results also should be considered relative to the
risks associated with its investment objective and policies. The Fund will
include performance data for all classes of shares of the Fund in any
advertisement or information including performance data for the Fund. See
"Investment Results" in the Statement of Additional Information.
The Fund's annual report contains additional information with respect to its
performance. The annual report is available to investors upon request and free
of charge.
TRANSFER AGENT. Shareholder servicing, reporting and general transfer agent
functions for the Fund are performed by G.T. Global Investor Services, Inc. The
Transfer Agent is an affiliate of G.T. Capital and G.T. Global and a subsidiary
of BIL GT Group, and maintains its offices at 50 California Street, 27th Floor,
San Francisco, California 94111.
CUSTODIAN AND ACCOUNTING AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110 is custodian of the Fund's assets
and serves as the Fund's accounting agent.
COUNSEL. The law firm of Kirkpatrick & Lockhart LLP 1800 M Street, N.W.,
Washington, D.C. 20036-5891, acts as counsel to the Company and the Fund.
Kirkpatrick & Lockhart LLP also acts as counsel to G.T. Capital, G.T. Global and
G.T. Global Investor Services, Inc. in connection with other matters.
INDEPENDENT ACCOUNTANTS. The Company's and the Fund's independent accountants
are Coopers & Lybrand L.L.P., One Post Office Square, Boston, Massachusetts
02109. Coopers & Lybrand L.L.P. conducts an annual audit of the Fund, assists in
the preparation of the Fund's federal and state income tax returns and consults
with the Company and the Fund as to matters of accounting, regulatory filings,
and federal and state income taxation.
MULTIPLE TRANSLATIONS OF THE PROSPECTUS. This Prospectus may be translated into
other languages. In the event of any inconsistency or ambiguity as to the
meaning of any word or phrase contained in a translation, the English text shall
prevail.
Prospectus Page 24
<PAGE>
<TABLE>
<S> <C> <C>
[G.T. GLOBAL LOGO]
G.T. GLOBAL
MUTUAL FUNDS
P.O. Box 7345 ADVISOR CLASS
SAN FRANCISCO, CA 94120-7345 ACCOUNT APPLICATION
800/223-2138
</TABLE>
<TABLE>
<S> <C> <C>
/ / INDIVIDUAL / / JOINT TENANT / / GIFT/TRANSFER FOR MINOR / / TRUST / / CORP.
ACCOUNT REGISTRATION / / NEW ACCOUNT / / ACCOUNT REVISION (Account No.: -------------------------------------)
NOTE: Trust registrations should specify name of trustee(s), beneficiary(ies) and date of trust instrument. Registration for
Uniform Gifts/Transfers to Minors accounts should be in the name of one custodian and one minor and include the state under
which the custodianship is created.
----------------------------------------------------------------
- ------------------------------------------------------------ Social Security Number / / or Tax I.D. Number / / (Check
Owner applicable box)
- ------------------------------------------------------------ If more than one owner, social security number or taxpayer
Co-owner 1 identification number should be provided for first owner listed.
- ------------------------------------------------------------ If a purchase is made under Uniform Gift/Transfer to Minors Act,
Co-owner 2 social security number of the minor must be provided.
Resident of / / U.S. / / Other (specify) ----------------
- -------------------------------------------------------------------------------------- ( )
Street Address ---------------------------
- -------------------------------------------------------------------------------------- Home Telephone
City, State, Zip Code ( )
---------------------------
Business Telephone
FUND SELECTION $25,000 total minimum initial investment is required. Checks should be made payable to "G.T. GLOBAL."
</TABLE>
<TABLE>
<S> <C> <C> <C>
INITIAL INITIAL
INVESTMENT INVESTMENT
407 / / G.T. GLOBAL WORLDWIDE GROWTH FUND $ 402 / / G.T. GLOBAL NEW PACIFIC GROWTH FUND $
---------- ----------
405 / / G.T. GLOBAL INTERNATIONAL GROWTH FUND $ 403 / / G.T. GLOBAL EUROPE GROWTH FUND $
---------- ----------
416 / / G.T. GLOBAL EMERGING MARKETS FUND $ 413 / / G.T. LATIN AMERICA GROWTH FUND $
---------- ----------
411 / / G.T. GLOBAL HEALTH CARE FUND $ 406 / / G.T. GLOBAL AMERICA GROWTH FUND $
---------- ----------
415 / / G.T. GLOBAL TELECOMMUNICATIONS FUND $ 404 / / G.T. GLOBAL JAPAN GROWTH FUND $
---------- ----------
419 / / G.T. GLOBAL INFRASTRUCTURE FUND $ 410 / / G.T. GLOBAL GROWTH & INCOME FUND $
---------- ----------
417 / / G.T. GLOBAL FINANCIAL SERVICES FUND $ 409 / / G.T. GLOBAL GOVERNMENT INCOME FUND $
---------- ----------
421 / / G.T. GLOBAL NATURAL RESOURCES FUND $ 408 / / G.T. GLOBAL STRATEGIC INCOME FUND $
---------- ----------
422 / / G.T. GLOBAL CONSUMER PRODUCTS $ 418 / / G.T. GLOBAL HIGH INCOME FUND $
AND SERVICES FUND ---------- ----------
401 / / G.T. GLOBAL DOLLAR FUND $
----------
TOTAL INITIAL INVESTMENT: $
----------
</TABLE>
AGREEMENTS & SIGNATURES
By the execution of this Account Application, I/we represent and warrant that
I/we have full right, power and authority and am/are of legal age in my/our
state of residence to make the investment applied for pursuant to this
Application. The person(s), if any, signing on behalf of the investor
represent and warrant that they are duly authorized to sign this Application
and to purchase, redeem or exchange shares of the Fund(s) on behalf of the
investor. I/WE HEREBY AFFIRM THAT I/WE HAVE RECEIVED A CURRENT ADVISOR CLASS
PROSPECTUS OF THE G.T. FUND(S) IN WHICH I/WE AM/ARE INVESTING AND I/WE AGREE
TO ITS TERMS AND CONDITIONS.
I/WE AND MY/OUR AGENTS, ASSIGNS AND SUCCESSORS UNDERSTAND AND AGREE THAT THE
ACCOUNT WILL BE SUBJECT TO THE TELEPHONE EXCHANGE AND TELEPHONE REDEMPTION
PRIVILEGES DESCRIBED IN THE CURRENT PROSPECTUS TO WHICH THIS APPLICATION IS
ATTACHED AND AGREE THAT G.T. GLOBAL FINANCIAL SERVICES, INC., G.T. GLOBAL
GROWTH SERIES, G.T. INVESTMENT FUNDS, INC., G.T. INVESTMENT PORTFOLIOS, INC.
AND THE FUNDS' TRANSFER AGENT, THEIR OFFICERS AND EMPLOYEES, WILL NOT BE
LIABLE FOR ANY LOSS OR DAMAGES ARISING OUT OF ANY SUCH TELEPHONE, TELEX OR
TELEGRAPHIC INSTRUCTIONS REASONABLY BELIEVED TO BE GENUINE, INCLUDING ANY SUCH
LOSS OR DAMAGES DUE TO NEGLIGENCE ON THE PART OF SUCH ENTITIES. THE
INVESTOR(S) CERTIFY(IES) AND AGREE(S) THAT THE CERTIFICATIONS, AUTHORIZATIONS,
DIRECTIONS AND RESTRICTIONS CONTAINED HEREIN WILL CONTINUE UNTIL G.T. GLOBAL
FINANCIAL SERVICES, INC., G.T. GLOBAL GROWTH SERIES, G.T. INVESTMENT FUNDS,
INC., G.T. INVESTMENT PORTFOLIOS, INC. OR THE FUNDS' TRANSFER AGENT RECEIVES
WRITTEN NOTICE OF ANY CHANGE OR REVOCATION. ANY CHANGE IN THESE INSTRUCTIONS
MUST BE IN WRITING AND IN SOME CASES, AS DESCRIBED IN THE PROSPECTUS, REQUIRES
THAT ALL SIGNATURES BE GUARANTEED.
PLEASE INDICATE THE NUMBER OF SIGNATURES REQUIRED TO PROCESS CHECKS OR
WRITTEN REDEMPTION REQUESTS: / / ONE / / TWO / / THREE / / FOUR.
(If you do not indicate the number of required signatures, ALL account
owners must sign checks and/or written redemption requests.)
Under penalties of perjury, I certify that the Taxpayer Identification
Number provided on this form is my (or my employer's, trust's, minor's or
other payee's) true, correct and complete Number and may be assigned to any
new account opened under the exchange privilege. I further certify that I am
(or the payee whose Number is given is) not subject to backup withholding
because: (a) I am (or the payee is) exempt from backup withholding; (b) the
Internal Revenue Service has not notified me that I am (or the payee is)
subject to backup withholding as a result of a failure to report all interest
or dividends; OR (c) the I.R.S. has notified me that I am (the payee is) no
longer subject to backup withholding;
OR, / / I am (the payee is) subject to backup withholding.
ALL ACCOUNT OWNERS MUST SIGN BELOW (Minors are not authorized signers)
Account revisions may require that signatures be guaranteed. Please see the
Prospectus.
<TABLE>
<S> <C>
----------------------------------------------------------
Date
X X
---------------------------------------------------------- ----------------------------------------------------------
X X
---------------------------------------------------------- ----------------------------------------------------------
</TABLE>
<PAGE>
ACCOUNT PRIVILEGES
CHECKWRITING PRIVILEGE
Checkwriting privilege available on Advisor Class shares of G.T. Global Dollar
Fund and G.T. Global Government Income Fund.
/ / Check here if desired. You will be sent a book of checks.
CAPITAL GAINS AND DIVIDEND DISTRIBUTIONS
All capital gains and dividend distributions will be reinvested in additional
shares of Advisor class unless appropriate boxes below are checked:
/ / Pay capital gain distributions only in cash / / Pay dividends only in
cash / / Pay capital gain distributions AND dividends in cash.
SPECIAL CAPITAL GAINS AND DIVIDEND DISTRIBUTIONS OPTION
Pay distributions noted above to another G.T. Global Fund: Fund Name
- -----------------------------------------
<TABLE>
<S> <C>
TELEPHONE EXCHANGE AND REDEMPTION AUTHORITY TO TRANSMIT REDEMPTION PROCEEDS TO
PRE-DESIGNATED ACCOUNT
I/We, either directly or through the Authorized Agent, if any, named By completing the following section, redemptions that
below, hereby authorize the Transfer Agent of the G.T. Global Mutual exceed $1,000 may be wired or mailed to a Pre-Designated
Funds, to honor any telephone, telex or telegraphic instructions Account at your bank. (Wiring instructions may be obtained
reasonably believed to be authentic for redemption and/or exchange from your bank.) A bank wire service fee may be charged.
between a similar class of shares of any of the Funds distributed by ----------------------------------------------------------
G.T. Global Financial Services, Inc. Name of Bank
----------------------------------------------------------
Bank Address
----------------------------------------------------------
Bank A.B.A Number Account Number
----------------------------------------------------------
Names(s) in which Bank Account is Established
A corporation (or partnership) must also submit a
"Corporate Resolution" (or "Certificate of Partnership")
indicating the names and titles of Officers authorized to
act on its behalf.
</TABLE>
<TABLE>
<S> <C> <C> <C>
FOR USE BY AUTHORIZED AGENT ONLY
We hereby submit this Account Application for the purchase of Advisor Class shares in accordance with the terms of our Advisor Class
Agreement with G.T. Global Financial Services, Inc. and with the Prospectus and Statement of Additional Information of each Fund
purchased.
- ------------------------------------------------------------------------------------------------------------------------------------
Advisor's Name
- ------------------------------------------------------------------------------------------------------------------------------------
Main Office Address Branch Number (if applicable) Representative's Number Representative's
Name
( )
- -------------------------------------------------------------------------------------------------------------------------
Branch Address Telephone
- -------------------------------------------------------------------------------------------------------------------------
Advisor's Authorized Signature Title
</TABLE>
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
NOTES
- --------------------------------------------------------------------------------
Prospectus Page 25
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
NOTES
- --------------------------------------------------------------------------------
Prospectus Page 26
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
NOTES
- --------------------------------------------------------------------------------
Prospectus Page 27
<PAGE>
G.T. GLOBAL GROWTH & INCOME 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 G.T. GLOBAL OR YOUR FINANCIAL
ADVISOR.
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,
excluding Japan
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
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY G.T. INVESTMENT FUNDS, INC., G.T. GLOBAL
GROWTH & INCOME FUND, G.T. CAPITAL MANAGEMENT, INC. OR G.T. GLOBAL FINANCIAL
SERVICES, INC. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR
SOLICITATION OF ANY OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH
JURISDICTION.
GROPV506040MC
<PAGE>
[LOGO]
G.T. GLOBAL GROWTH &
INCOME FUND: ADVISOR CLASS
50 California Street, 27th Floor
San Francisco, California 94111
(415) 392-6181
Toll Free: (800) 824-1580
Statement of Additional Information
March 1, 1995
- --------------------------------------------------------------------------------
G.T. Global Growth & Income Fund ("Fund") is a non-diversified mutual fund
organized as a separate series of G.T. Investment Funds, Inc. ("Company"), a
registered open-end management investment company. This Statement of Additional
Information relating to the Advisor Class shares of the Fund, which is not a
prospectus, supplements and should be read in conjunction with the Fund's
current Advisor Class Prospectus dated March 1, 1995, a copy of which is
available without charge by writing to the above address or by calling the Fund
at the toll-free telephone number listed above.
G.T. Capital Management, Inc. ("G.T. Capital") serves as the Fund's investment
manager and administrator. The distributor of the Fund's shares is G.T. Global
Financial Services, Inc. ("G.T. Global"). The Fund's transfer agent is G.T.
Global Investor Services, Inc. ("G.T. Services" or "Transfer Agent").
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Investment Objective and Policies........................................................................................ 2
Options, Futures and Currency Strategies................................................................................. 5
Risk Factors............................................................................................................. 13
Investment Limitations................................................................................................... 16
Execution of Portfolio Transactions...................................................................................... 17
Directors and Executive Officers......................................................................................... 19
Management............................................................................................................... 21
Valuation of Fund Shares................................................................................................. 22
Information Relating to Sales and Redemptions............................................................................ 23
Taxes.................................................................................................................... 24
Additional Information................................................................................................... 27
Investment Results....................................................................................................... 28
Description of Debt Ratings.............................................................................................. 45
Financial Statements..................................................................................................... 47
</TABLE>
Statement of Additional Information Page 1
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
INVESTMENT OBJECTIVE AND
POLICIES
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The investment objective of the Fund is long-term capital appreciation together
with current income. The Fund seeks its objective by investing in a global
portfolio of both equity securities and debt obligations allocated among diverse
international markets.
SELECTION OF EQUITY INVESTMENTS
For investment purposes, an issuer is typically considered as located in a
particular country if it is incorporated under the laws of that country, at
least 50% of the value of its assets are located in that country or it normally
derives at least 50% of its income from operations or sales in that country.
However, these are not absolute requirements, and certain companies incorporated
in a particular country and considered by G.T. Capital to be located in that
country may have substantial off-shore operations or subsidiaries and/or export
sales exceeding in size the assets or sales in that country.
In certain countries, governmental restrictions and other limitations on
investment may affect the Fund's ability to invest. For example, in some
instances only special classes of securities may be purchased by foreigners and
the market prices, liquidity and rights with respect to those securities may
vary from shares owned by nationals. G.T. Capital is not aware at this time of
the existence of any investment or exchange control regulations which might
substantially impair the operations of the Fund as described in the Prospectus
and this Statement of Additional Information. Although restrictions may in the
future make it undesirable to invest in certain countries, G.T. Capital does not
believe that any current repatriation restrictions would affect its decisions to
invest in the countries eligible for investment by the Fund. It should be noted,
however, that this situation could change at any time. The Fund has no present
intention of making any significant investment in any country or stock market
where the political or economic situation might be considered by G.T. Capital to
be at risk of substantial or total loss because of such political or economic
situation.
The Fund may invest in the securities of investment companies within the limits
of the Investment Company Act of 1940, as amended ("1940 Act"). These
limitations currently provide that, in general, the Fund may purchase shares of
a closed-end investment company unless (a) such a purchase would cause the Fund
to own in the aggregate more than 3 percent of the total outstanding voting
stock of the investment company or (b) such a purchase would cause the Fund to
have more than 5 percent of its total assets invested in the investment company
or more than 10 percent of its total assets invested in an aggregate of all such
investment companies. Investment in such investment companies may also involve
the payment of substantial premiums above the value of such companies' portfolio
securities. The Fund does not intend to invest in such investment companies
unless, in the judgment of G.T. Capital, the potential benefits of such
investments justify the payment of any applicable premiums. The yield of such
securities will be reduced by operating expenses of such companies including
payments to the investment managers of those investment companies.
DEPOSITORY RECEIPTS
The Fund may hold equity securities of foreign issuers in the form of American
Depository Receipts ("ADRs"), American Depository Shares ("ADSs") and European
Depository Receipts ("EDRs"), or other securities convertible into securities of
eligible issuers. These securities may not necessarily be denominated in the
same currency as the securities for which they may be exchanged. ADRs and ADSs
typically are issued by an American bank or trust company which evidences
ownership of underlying securities issued by a foreign corporation. EDRs, which
are sometimes referred to as Continental Depository Receipts ("CDRs"), are
receipts issued in Europe typically by foreign banks and trust companies that
evidence ownership of either foreign or domestic securities. Generally, ADRs and
ADSs in registered form are designed for use in United States securities markets
and EDRs in bearer form are designed for use in European securities markets. For
purposes of the Fund's investment policies, the Fund's investments in ADRs, ADSs
and EDRs will be deemed to be investments in the equity securities representing
securities of foreign issuers into which they may be converted.
WARRANTS OR RIGHTS
Warrants or rights may be acquired by the Fund in connection with other
securities or separately and provide the Fund with the right to purchase at a
later date other securities of the issuer. As a condition of its continuing
registration in a state, the Fund has undertaken that its investments in
warrants or rights, valued at the lower of cost or market, will not exceed
Statement of Additional Information Page 2
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
5% of the value of its net assets and not more than 2% of such assets will be
invested in warrants and rights which are not listed on the American or New York
Stock Exchange. Warrants or rights acquired by the Fund in units or attached to
securities will be deemed to be without value for purpose of this restriction.
These limits are not fundamental policies of the Fund and may be changed by the
Company's Board of Directors without shareholder approval.
LENDING OF PORTFOLIO SECURITIES
For the purpose of realizing additional income, the Fund may make secured loans
of portfolio securities amounting to not more than 30% of its total assets.
Securities loans are made to broker/dealers or institutional investors pursuant
to agreements requiring that the loans continuously be secured by collateral at
least equal at all times to the value of the securities lent plus any accrued
interest, "marked to market" on a daily basis. The collateral received will
consist of cash, U.S. short-term government securities, bank letters of credit
or such other collateral as may be permitted under the Fund's investment program
and by regulatory agencies and approved by the Company's Board of Directors.
While the securities loan is outstanding, the Fund will continue to receive the
equivalent of the interest or dividends paid by the issuer on the securities, as
well as interest on the investment of the collateral or a fee from the borrower.
The Fund will have a right to call each loan and obtain the securities on five
business days' notice. The Fund will not have the right to vote equity
securities while they are lent, but it may call in a loan in anticipation of any
important vote. The risks in lending portfolio securities, as with other
extensions of secured credit, consist of possible delay in receiving additional
collateral or in recovery of the securities or possible loss of rights in the
collateral should the borrower fail financially. Loans will be made only to
firms deemed by G.T. Capital to be of good standing and will not be made unless,
in the judgment of G.T. Capital, the consideration to be earned from such loans
would justify the risk.
COMMERCIAL BANK OBLIGATIONS
For the purposes of the Fund's investment policies with respect to bank
obligations, obligations of foreign branches of U.S. banks and of foreign banks
are obligations of the issuing bank and may be general obligations of the parent
bank. Such obligations, however, may be limited by the terms of a specific
obligation and by government regulation. As with investment in non-U.S.
securities in general, investments in the obligations of foreign branches of
U.S. banks and of foreign banks may subject the Fund to investment risks that
are different in some respects from those of investments in obligations of
domestic issuers. Although the Fund typically will acquire obligations issued
and supported by the credit of U.S. or foreign banks having total assets at the
time of purchase in excess of $1 billion, this $1 billion figure is not an
investment policy or restriction of the Fund. For the purposes of calculation
with respect to the $1 billion figure, the assets of a bank will be deemed to
include the assets of its U.S. and non-U.S. branches.
REPURCHASE AGREEMENTS
The Fund will invest only in repurchase agreements collateralized at all times
in an amount at least equal to the repurchase price plus accrued interest. To
the extent that the proceeds from any sale of such collateral upon a default in
the obligation to repurchase were less than the repurchase price, the Fund would
suffer a loss. If the financial institution which is party to the repurchase
agreement petitions for bankruptcy or otherwise becomes subject to bankruptcy or
other liquidation proceedings, there may be restrictions on the Fund's ability
to sell the collateral and the Fund could suffer a loss. However, with respect
to financial institutions whose bankruptcy or liquidation proceedings are
subject to the U.S. Bankruptcy Code, the Fund intends to comply with provisions
under the U.S. Bankruptcy Code that would allow it immediately to resell the
collateral. There is no limitation on the amount of the Fund's assets that may
be subject to repurchase agreements at any given time. The Fund will not enter
into a repurchase agreement with a maturity of more than seven days if, as a
result, more than 10% of the value of its net assets would be invested in such
repurchase agreements and other illiquid investments.
BORROWING, REVERSE REPURCHASE AGREEMENTS AND "ROLL" TRANSACTIONS
The Fund's borrowings will not exceed 33 1/3% of the Fund's total assets, i.e.,
the Fund's total assets at all times will equal at least 300% of the amount of
outstanding borrowings. If market fluctuations in the value of the Fund's
portfolio holdings or other factors cause the ratio of the Fund's total assets
to outstanding borrowings to fall below 300%, within three days (excluding
Sundays and holidays) of such event the Fund may be required to sell portfolio
securities to restore the 300% asset coverage, even though from an investment
standpoint such sales might be disadvantageous. The Fund also may borrow up to
5% of its total assets for temporary or emergency purposes other than to meet
redemptions. Any borrowing by the Fund may cause greater fluctuation in the
value of its shares than would be the case if the Fund did not borrow.
The Fund's fundamental investment limitations permit the Fund to borrow money
for leveraging purposes. The Fund, however, currently is prohibited, pursuant to
a non-fundamental investment policy, from borrowing money in order to purchase
securities. Nevertheless, this policy may be changed in the future by a vote of
a majority of the Company's Board of Directors. In the event that the Fund
employs leverage in the future, it would be subject to certain additional risks.
Use
Statement of Additional Information Page 3
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
of leverage creates an opportunity for greater growth of capital but would
exaggerate any increases or decreases in the Fund's net asset value. When the
income and gains on securities purchased with the proceeds of borrowings exceed
the costs of such borrowings, the Fund's earnings or net asset value will
increase faster than otherwise would be the case; conversely, if such income and
gains fail to exceed such costs, the Fund's earnings or net asset value would
decline faster than would otherwise be the case.
The Fund may enter into reverse repurchase agreements. A reverse repurchase
agreement is a borrowing transaction in which the Fund transfers possession of a
security to another party, such as a bank or broker/dealer in return for cash,
and agrees to repurchase the security in the future at an agreed upon price,
which includes an interest component. The Fund also may engage in "roll"
borrowing transactions which involve the Fund's sale of Government National
Mortgage Association ("GNMA") certificates or other securities together with a
commitment (for which the Fund may receive a fee) to purchase similar, but not
identical, securities at a future date. The Fund will maintain, in a segregated
account with a custodian, cash, U.S. government securities or other liquid, high
grade debt securities in an amount sufficient to cover its obligations under
"roll" transactions and reverse repurchase agreements with broker/dealers. No
segregation is required for reverse repurchase agreements with banks.
SHORT SALES
The Fund is authorized to make short sales of securities, although it has no
current intention of doing so. A short sale is a transaction in which the Fund
sells a security in anticipation that the market price of that security will
decline. The Fund may make short sales (i) as a form of hedging to offset
potential declines in long positions in securities it owns, or anticipates
acquiring, and (ii) in order to maintain portfolio flexibility. The Fund may
only make short sales "against the box." In this type of short sale, at the time
of the sale the Fund owns the security it has sold short or has the immediate
and unconditional right to acquire the identical security at no additional cost.
In a short sale, the seller does not immediately deliver the securities sold and
does not receive the proceeds from the sale. To make delivery to the purchaser,
the executing broker borrows the securities being sold short on behalf of the
seller. The seller is said to have a short position in the securities sold until
it delivers the securities sold, at which time it receives the proceeds of the
sale. To secure its obligation to deliver securities sold short, the Fund will
deposit in a separate account with its custodian an equal amount of the
securities sold short or securities convertible into or exchangeable for such
securities at no cost. The Fund could close out a short position by purchasing
and delivering an equal amount of the securities sold short, rather than by
delivering securities already held by the Fund, because the Fund might want to
continue to receive interest and dividend payments on securities in its
portfolio that are convertible into the securities sold short.
The Fund might make a short sale "against the box" in order to hedge against
market risks when G.T. Capital believes that the price of a security may
decline, causing a decline in the value of a security owned by the Fund or a
security convertible into or exchangeable for such security, or when G.T.
Capital wants to sell the security the Fund owns at a current attractive price,
but also wishes to defer recognition of gain or loss for federal income tax
purposes and for purposes of satisfying certain tests applicable to regulated
investment companies under the Internal Revenue Code of 1986, as amended
("Code"). In such case, any future losses in the Fund's long position should be
reduced by a gain in the short position. Conversely, any gain in the long
position should be reduced by a loss in the short position. The extent to which
such gains or losses in the long position are reduced will depend upon the
amount of the securities sold short relative to the amount of the securities the
Fund owns, either directly or indirectly, and, in the case where the Fund owns
convertible securities, changes in the investment values or conversion premiums
of such securities. There will be certain additional transaction costs
associated with short sales "against the box," but the Fund will endeavor to
offset these costs with income from the investment of the cash proceeds of short
sales.
Statement of Additional Information Page 4
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
OPTIONS, FUTURES AND CURRENCY
STRATEGIES
- --------------------------------------------------------------------------------
SPECIAL RISKS OF OPTIONS, FUTURES AND CURRENCY STRATEGIES
The use of options, futures contracts and forward currency contracts ("Forward
Contracts") involves special considerations and risks, as described below. Risks
pertaining to particular instruments are described in the sections that follow.
(1) Successful use of most of these instruments depends upon G.T.
Capital's ability to predict movements of the overall securities and
currency markets, which requires different skills than predicting changes in
the prices of individual securities. While G.T. Capital is experienced in
the use of these instruments, there can be no assurance that any particular
strategy adopted will succeed.
(2) There might be imperfect correlation, or even no correlation,
between price movements of an instrument and price movements of the
investments being hedged. For example, if the value of an instrument used in
a short hedge increased by less than the decline in value of the hedged
investment, the hedge would not be fully successful. Such a lack of
correlation might occur due to factors unrelated to the value of the
investments being hedged, such as speculative or other pressures on the
markets in which the hedging instrument is traded. The effectiveness of
hedges using hedging instruments on indices will depend on the degree of
correlation between price movements in the index and price movements in the
investments being hedged.
(3) Hedging strategies, if successful, can reduce risk of loss by wholly
or partially offsetting the negative effect of unfavorable price movements
in the investments being hedged. However, hedging strategies can also reduce
opportunity for gain by offsetting the positive effect of favorable price
movements in the hedged investments. For example, if a Fund entered into a
short hedge because G.T. Capital projected a decline in the price of a
security in the Fund's portfolio, and the price of that security increased
instead, the gain from that increase might be wholly or partially offset by
a decline in the price of the hedging instrument. Moreover, if the price of
the hedging instrument declined by more than the increase in the price of
the security, the Fund could suffer a loss. In either such case, the Fund
would have been in a better position had it not hedged at all.
(4) As described below, a Fund might be required to maintain assets as
"cover," maintain segregated accounts or make margin payments when it takes
positions in instruments involving obligations to third parties (I.E.,
instruments other than purchased options). If the Fund were unable to close
out its positions in such instruments, it might be required to continue to
maintain such assets or accounts or make such payments until the position
expired or matured. The requirements might impair the Fund's ability to sell
a portfolio security or make an investment at a time when it would otherwise
be favorable to do so, or require that the Fund sell a portfolio security at
a disadvantageous time. The Fund's ability to close out a position in an
instrument prior to expiration or maturity depends on the existence of a
liquid secondary market or, in the absence of such a market, the ability and
willingness of the other party to the transaction ("contra party") to enter
into a transaction closing out the position. Therefore, there is no
assurance that any position can be closed out at a time and price that is
favorable to the Fund.
WRITING CALL OPTIONS
The Fund may write (sell) call options on securities, indices and currencies.
Call options generally will be written on securities and currencies that, in the
opinion of G.T. Capital, the Fund's investment manager, are not expected to make
any major price moves in the near future but that, over the long term, are
deemed to be attractive investments for the Fund.
A call option gives the holder (buyer) the right to purchase a security or
currency at a specified price (the exercise price) at any time until (American
style) or on (European style) a certain date (the expiration date). So long as
the obligation of the writer of a call option continues, he may be assigned an
exercise notice, requiring him to deliver the underlying security or currency
against payment of the exercise price. This obligation terminates upon the
expiration of the call option, or such earlier time at which the writer effects
a closing purchase transaction by purchasing an option identical to that
previously sold.
Statement of Additional Information Page 5
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
Portfolio securities or currencies on which call options may be written will be
purchased solely on the basis of investment considerations consistent with the
Fund's investment objective. When writing a call option, the Fund, in return for
the premium, gives up the opportunity for profit from a price increase in the
underlying security or currency above the exercise price, and retains the risk
of loss should the price of the security or currency decline. Unlike one who
owns securities or currencies not subject to an option, the Fund has no control
over when it may be required to sell the underlying securities or currencies,
since most options may be exercised at any time prior to the option's
expiration. If a call option that the Fund has written expires, the Fund will
realize a gain in the amount of the premium; however, such gain may be offset by
a decline in the market value of the underlying security or currency during the
option period. If the call option is exercised, the Fund will realize a gain or
loss from the sale of the underlying security or currency, which will increased
or offset by the premium received. The Fund does not consider a security or
currency covered by a call option to be "pledged" as that term is used in the
Fund's policy that limits the pledging or mortgaging of its assets.
Writing call options can serve as a limited short hedge because declines in the
value of the hedged investment would be offset to the extent of the premium
received for writing the option. However, if the security or currency
appreciates to a price higher than the exercise price of the call option, it can
be expected that the option will be exercised and a Fund will be obligated to
sell the security or currency at less than its market value.
The premium that the Fund receives for writing a call option is deemed to
constitute the market value of an option. The premium the Fund will receive from
writing a call option will reflect, among other things, the current market price
of the underlying investment, the relationship of the exercise price to such
market price, the historical price volatility of the underlying investment, and
the length of the option period. In determining whether a particular call option
should be written, G.T. Capital will consider the reasonableness of the
anticipated premium and the likelihood that a liquid secondary market will exist
for those options.
Closing transactions will be effected in order to realize a profit on an
outstanding call option, to prevent an underlying security or currency from
being called, or to permit the sale of the underlying security or currency.
Furthermore, effecting a closing transaction will permit the Fund to write
another call option on the underlying security or currency with either a
different exercise price, expiration date or both.
The Fund will pay transaction costs in connection with the writing of options
and in entering into closing purchase contracts. Transaction costs relating to
options activity normally are higher than those applicable to purchases and
sales of portfolio securities.
The exercise price of the options may be below, equal to or above the current
market values of the underlying securities or currencies at the time the options
are written. From time to time, the Fund may purchase an underlying security or
currency for delivery in accordance with the exercise of an option, rather than
delivering such security or currency from its portfolio. In such cases,
additional costs will be incurred.
The Fund will realize a profit or loss from a closing purchase transaction if
the cost of the transaction is less or more, respectively, than the premium
received from writing the option. Because increases in the market price of a
call option generally will reflect increases in the market price of the
underlying security or currency, any loss resulting from the repurchase of a
call option is likely to be offset in whole or in part by appreciation of the
underlying security or currency owned by the Fund.
WRITING PUT OPTIONS
The Fund may write put options on securities, indices and currencies. A put
option gives the purchaser of the option the right to sell, and the writer
(seller) the obligation to buy, the underlying security or currency at the
exercise price at any time until (American style) or on (European style) the
expiration date. The operation of put options in other respects, including their
related risks and rewards, is substantially identical to that of call options.
The Fund generally would write put options in circumstances where G.T. Capital
wishes to purchase the underlying security or currency for the Fund's portfolio
at a price lower than the current market price of the security or currency. In
such event, the Fund would write a put option at an exercise price that, reduced
by the premium received on the option, reflects the lower price it is willing to
pay. Since the Fund also would receive interest on debt securities or currencies
maintained to cover the exercise price of the option, this technique could be
used to enhance current return during periods of market uncertainty. The risk in
such a transaction would be that the market price of the underlying security or
currency would decline below the exercise price less the premium received.
Writing put options can serve as a limited long hedge because increases in the
value of the hedged investment would be offset to the extent of the premium
received for writing the option. However, if the security or currency
depreciates to a
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G.T. GLOBAL GROWTH & INCOME FUND
price lower than the exercise price of the put option, it can be expected that
the put option will be exercised and the Fund will be obligated to purchase the
security or currency at more than its market value.
PURCHASING PUT OPTIONS
The Fund may purchase put options on securities, indices and currencies. As the
holder of a put option, the Fund has the right to sell the underlying security
or currency at the exercise price any any time until (American style) or
(European style) the expiration date. The Fund may enter into closing sale
transactions with respect to such options, exercise them or permit them to
expire.
The Fund may purchase a put option on an underlying security or currency
("protective put") owned by the Fund in order to protect against an anticipated
decline in the value of the security or currency. Such hedge protection is
provided only during the life of the put option when the Fund, as the holder of
the put option, is able to sell the underlying security or currency at the put
exercise price regardless of any decline in the underlying security's market
price or currency's exchange value. For example, a put option may be purchased
in order to protect unrealized appreciation of a security or currency when G.T.
Capital deems it desirable to continue to hold the security or currency because
of tax considerations. The premium paid for the put option and any transaction
costs would reduce any profit otherwise available for distribution when the
security or currency is eventually sold.
The Fund also may purchase put options at a time when the Fund does not own the
underlying security or currency. By purchasing put options on a security or
currency it does not own, the Fund seeks to benefit from a decline in the market
price of the underlying security or currency. If the put option is not sold when
it has remaining value, and if the market price of the underlying security or
currency remains equal to or greater than the exercise price during the life of
the put option, the Fund will lose its entire investment in the put option. In
order for the purchase of a put option to be profitable, the market price of the
underlying security or currency must decline sufficiently below the exercise
price to cover the premium and transaction costs, unless the put option is sold
in a closing sale transaction.
PURCHASING CALL OPTIONS
The Fund may purchase call options on securities, indices and currencies. As the
holder of a call option, the Fund would have the right to purchase the
underlying security or currency at the exercise price at any time until
(American style) or (European style) the expiration date. The Fund may enter
into closing sale transactions with respect to such options, exercise them or
permit them to expire.
Call options may be purchased by the Fund for the purpose of acquiring the
underlying security or currency for its portfolio. Utilized in this fashion, the
purchase of call options would enable the Fund to acquire the security or
currency at the exercise price of the call option plus the premium paid. At
times, the net cost of acquiring the security or currency in this manner may be
less than the cost of acquiring the security or currency directly. This
technique also may be useful to the Fund in purchasing a large block of
securities that would be more difficult to acquire by direct market purchases.
So long as it holds such a call option, rather than the underlying security or
currency itself, the Fund is partially protected from any unexpected decline in
the market price of the underlying security or currency and, in such event,
could allow the call option to expire, incurring a loss only to the extent of
the premium paid for the option.
The Fund also may purchase call options on underlying securities or currencies
it owns in order to protect unrealized gains on call options previously written
by it. A call option could be purchased for this purpose where tax
considerations make it inadvisable to realize such gains through a closing
purchase transaction. Call options also may be purchased at times to avoid
realizing losses that would result in a reduction of the Fund's current return.
For example, where the Fund has written a call option on an underlying security
or currency having a current market value below the price at which such security
or currency was purchased by the Fund, an increase in the market price could
result in the exercise of the call option written by the Fund and the
realization of a loss on the underlying security or currency. Accordingly, the
Fund could purchase a call option on the same underlying security or currency,
which could be exercised to fulfill the Fund's delivery obligations under its
written call (if it is exercised). This strategy could allow the Fund to avoid
selling the portfolio security or currency at a time when it has an unrealized
loss; however, the Fund would have to pay a premium to purchase the call option
plus transaction costs.
Aggregate premiums paid for put and call options will not exceed 5% of the
Fund's total assets at the time of purchase.
The Fund may attempt to accomplish objectives similar to those involved in using
Forward Contracts by purchasing put or call options on currencies. A put option
gives the Fund as purchaser the right (but not the obligation) to sell a
specified amount of currency at the exercise price at any time until (American
style) or on (European style) the expiration date. A call option gives the Fund
as purchaser the right (but not the obligation) to purchase a specified amount
of currency at the exercise price at any time until (American style) or on
(European style) the expiration date. The Fund might purchase a
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G.T. GLOBAL GROWTH & INCOME FUND
currency put option, for example, to protect itself against a decline in the
dollar value of a currency in which it holds or anticipates holding securities.
If the currency's value should decline against the dollar, the loss in currency
value should be offset, in whole or in part, by an increase in the value of the
put. If the value of the currency instead should rise against the dollar, any
gain to the Fund would be reduced by the premium it had paid for the put option.
A currency call option might be purchased, for example, in anticipation of, or
to protect against, a rise in the value against the dollar of a currency in
which the Fund anticipates purchasing securities.
Options may be either listed on an exchange or traded over-the-counter ("OTC
options"). Listed options are third-party contracts (I.E., performance of the
obligations of the purchaser and seller is guaranteed by the exchange or
clearing corporation), and have standardized strike prices and expiration dates.
OTC options are two-party contracts with negotiated strike prices and expiration
dates. The Fund will not purchase an OTC option unless it believes that daily
valuations for such options are readily obtainable. OTC options differ from
exchange-traded options in that OTC options are transacted with dealers directly
and not through a clearing corporation (which guarantees performance).
Consequently, there is a risk of non-performance by the dealer. Since no
exchange is involved, OTC options are valued on the basis of a quote provided by
the dealer. In the case of OTC options, there can be no assurance that a liquid
secondary market will exist for any particular option at any specific time.
The Securities and Exchange Commission ("SEC") staff considers purchased OTC
options to be illiquid securities. The Fund may also sell OTC options and, in
connection therewith, segregate assets or cover its obligations with respect to
OTC options written by the Fund. The assets used as cover for OTC options
written by the Fund will be considered illiquid unless the OTC options are sold
to qualified dealers who agree that the Fund may repurchase any OTC option it
writes at a maximum price to be calculated by a formula set forth in the option
agreement. The cover for an OTC option written subject to this procedure would
be considered illiquid only to the extent that the maximum repurchase price
under the formula exceeds the intrinsic value of the option.
The Fund's ability to establish and close out positions in exchange-listed
options depends on the existence of a liquid market. The Fund intends to
purchase or write only those exchange-traded options for which there appears to
be a liquid secondary market. However, there can be no assurance that such a
market will exist at any particular time. Closing transactions can be made for
OTC options only by negotiating directly with the contra party, or by a
transaction in the secondary market if any such market exists. Although the Fund
will enter into OTC options only with contra parties that are expected to be
capable of entering into closing transactions with the Fund, there is no
assurance that the Fund will in fact be able to close out an OTC option position
at a favorable price prior to expiration. In the extent of insolvency of the
contra party, the Fund might be unable to close out an OTC option position at
any time prior to its expiration.
INDEX OPTIONS
Puts and calls on indices are similar to puts and calls on securities or futures
contracts except that all settlements are in cash and gain or loss depends on
changes in the index in question (and thus on price movements in the securities
market or a particular market sector generally) rather than on price movements
in individual securities or futures contracts. When the Fund writes a call on an
index, it receives a premium and agrees that, prior to the expiration date, the
purchaser of the call, upon exercise of the call, will receive from the Fund an
amount of cash if the closing level of the index upon which the call is based is
greater than the exercise price of the call. The amount of cash is equal to the
difference between the closing price of the index and the exercise price of the
call times a specified multiple (the "multiplier"), which determines the total
dollar value for each point of such difference. When the Fund buys a call on an
index, it pays a premium and has the same rights as to such calls as are
indicated above. When the Fund buys a put on an index, it pays a premium and has
the right, prior to the expiration date, to require the seller of the put, upon
the Fund's exercise of the put, to deliver to the Fund an amount of cash if the
closing level of the index upon which the put is based is less than the exercise
price of the put, which amount of cash is determined by the multiplier, as
described above for calls. When the Fund writes a put on an index, it receives a
premium and the purchaser has the right, prior to the expiration date, to
require the Fund to deliver to it an amount of cash equal to the difference
between the closing level of the index and the exercise price times the
multiplier, if the closing level is less than the exercise price.
The risks of investment in index options may be greater than options on
securities. Because index options are settled in cash, when a Fund writes a call
on an index it cannot provide in advance for its potential settlement
obligations by acquiring and holding the underlying securities. The Fund can
offset some of the risk of writing a call index option position by holding a
diversified portfolio of securities similar to those on which the underlying
index is based. However, the Fund cannot, as a practical matter, acquire and
hold a portfolio containing exactly the same securities as underlie the index
and, as a result, bears a risk that the value of the securities held will vary
from the value of the index.
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G.T. GLOBAL GROWTH & INCOME FUND
Even if the Fund could assemble a securities portfolio that exactly reproduced
the composition of the underlying index, it still would not be fully covered
from a risk standpoint because of the "timing risk" inherent in writing index
options. When an index option is exercised, the amount of cash that the holder
is entitled to receive is determined by the difference between the exercise
price and the closing index level on the date when the option is exercised. As
with other kinds of options, the Fund as the call writer will not know that it
has been assigned until the next business day at the earliest. The time lag
between exercise and notice of assignment poses no risk for the writer of a
covered call on a specific underlying security, such as common stock, because
there the writer's obligation is to deliver the underlying security, not to pay
its value as of a fixed time in the past. So long as the writer already owns the
underlying security, it can satisfy its settlement obligations by simply
delivering it, and the risk that its value may have declined since the exercise
date is borne by the exercising holder. In contrast, even if the writer of an
index call holds securities that exactly match the composition of the underlying
index, it will not be able to satisfy its assignment obligations by delivering
those securities against payment of the exercise price. Instead, it will be
required to pay cash in an amount based on the closing index value on the
exercise date; and by the time it learns that it has been assigned, the index
may have declined, with a corresponding decline in the value of its securities
portfolio. This "timing risk" is an inherent limitation on the ability of index
call writers to cover their risk exposure by holding securities positions.
If the Fund has purchased an index option and exercises it before the closing
index value for that day is available, it runs the risk that the level of the
underlying index may subsequently change. If such a change causes the exercised
option to fall out-of-the-money, the Fund will be required to pay the difference
between the closing index value and the exercise price of the option (times the
applicable multiplier) to the assigned writer.
INTEREST RATE, CURRENCY AND STOCK INDEX FUTURES CONTRACTS
The Fund may enter into interest rate or currency futures contracts, and may
enter into stock index futures contracts (collectively, "Futures" or "Futures
Contracts"), as a hedge against changes in prevailing levels of interest rates,
currency exchange rates or stock price levels in order to establish more
definitely the effective return on securities or currencies held or intended to
be acquired by the Fund. The Fund's hedging may include sales of Futures as an
offset against the effect of expected increases in interest rates and decreases
in currency exchange rates or stock prices, and purchases of Futures as an
offset against the effect of expected declines in interest rates, and increases
in currency exchange rates or stock prices.
The Fund only will enter into Futures Contracts that are traded on futures
exchanges and are standardized as to maturity date and underlying financial
instrument. Futures exchanges and trading thereon in the United States are
regulated under the Commodity Exchange Act by the Commodity Futures Trading
Commission ("CFTC"). Futures are exchanged in London at the London International
Financial Futures Exchange.
Although techniques other than sales and purchases of Futures Contracts could be
used to reduce the Fund's exposure to interest rate, currency exchange rate and
stock market fluctuations, the Fund may be able to hedge its exposure more
effectively and at a lower cost through using Futures Contracts.
A Futures Contract provides for the future sale by one party and purchase by
another party of a specified amount of a specific financial instrument (security
or currency) for a specified price at a designated date, time and place. A stock
index Futures Contract provides for the delivery, at a designated date, time and
place, of an amount of cash equal to a specified dollar amount times the
difference between the stock index value at the close of trading on the contract
and the price at which the Futures Contract is originally struck; no physical
delivery of stocks comprising the index is made. Brokerage fees are incurred
when a Futures Contract is bought or sold, and margin deposits must be
maintained at all times the Futures Contract is outstanding.
Although Futures Contracts typically require future delivery of and payment for
financial instruments or currencies, Futures Contracts usually are closed out
before the delivery date. Closing out an open Futures Contract sale or purchase
is effected by entering into an offsetting Futures Contract purchase or sale,
respectively, for the same aggregate amount of the identical financial
instrument or currency and the same delivery date. If the offsetting purchase
price is less than the original sale price, the Fund realizes a gain; if it is
more, the Fund realizes a loss. Conversely, if the offsetting sale price is more
than the original purchase price, the Fund realizes a gain; if it is less, the
Fund realizes a loss. The transaction costs also must be included in these
calculations. There can be no assurance, however, that the Fund will be able to
enter into an offsetting transaction with respect to a particular Futures
Contract at a particular time. If the Fund is not able to enter into an
offsetting transaction, the Fund will continue to be required to maintain the
margin deposits on the Futures Contract.
As an example of an offsetting transaction, the contractual obligations arising
from the sale of one Futures Contract of September Deutschemarks on an exchange
may be fulfilled at any time before delivery under the Futures Contract is
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G.T. GLOBAL GROWTH & INCOME FUND
required (I.E., on a specified date in September, the "delivery month") by the
purchase of another Futures Contract of September Deutschemarks on the same
exchange. In such instance the difference between the price at which the Futures
Contract was sold and the price paid for the offsetting purchase, after
allowance for transaction costs, represents the profit or loss to the Fund.
The Fund's Futures transactions will be entered into for hedging purposes; that
is, Futures Contracts will be sold to protect against a decline in the price of
securities or currencies that the Fund owns, or Futures Contracts will be
purchased to protect the Fund against an increase in the price of securities or
currencies it has committed to purchase or expects to purchase.
"Margin" with respect to Futures Contracts is the amount of funds that must be
deposited by the Fund in order to initiate Futures trading and to maintain the
Fund's open positions in Futures Contracts. A margin deposit made when the
Futures Contract is entered into ("initial margin") is intended to assure the
Fund's performance under the Futures Contract. The margin required for a
particular Futures Contract is set by the exchange on which the Futures Contract
is traded, and may be modified significantly from time to time by the exchange
during the term of the Futures Contract.
Subsequent payments, called "variation margin," to and from the futures
commission merchant through which the Fund entered into the Futures Contract
will be made on a daily basis as the price of the underlying security, currency
or index fluctuates making the Futures Contract more or less valuable, a process
known as marking-to-market.
RISKS OF USING FUTURES CONTRACTS. The prices of Futures Contracts are
volatile and are influenced, among other things, by actual and anticipated
changes in interest rates and currency exchange rates, and in stock market
movements, which in turn are affected by fiscal and monetary policies and
national and international political and economic events.
There is a risk of imperfect correlation between changes in prices of Futures
Contracts and prices of the securities or currencies in the Fund's portfolio
being hedged. The degree of imperfection of correlation depends upon
circumstances such as: variations in speculative market demand for futures and
for debt securities or currencies, including technical influences in Futures
trading; and differences between the financial instruments being hedged and the
instruments underlying the standard Futures Contracts available for trading. A
decision of whether, when, and how to hedge involves skill and judgment, and
even a well-conceived hedge may be unsuccessful to some degree because of
unexpected market behavior or interest or currency rate trends.
Because of the low margin deposits required, Futures trading involves an
extremely high degree of leverage. As a result, a relatively small price
movement in a Futures Contract may result in immediate and substantial loss, as
well as gain, to the investor. For example, if at the time of purchase, 10% of
the value of the Futures Contract is deposited as margin, a subsequent 10%
decrease in the value of the Futures Contract would result in a total loss of
the margin deposit, before any deduction for the transaction costs, if the
account were then closed out. A 15% decrease would result in a loss equal to
150% of the original margin deposit, if the Futures Contract were closed out.
Thus, a purchase or sale of a Futures Contract may result in losses in excess of
the amount invested in the Futures Contract.
Most U.S. Futures exchanges limit the amount of fluctuation permitted in Futures
Contract and options on Futures Contract prices during a single trading day. The
daily limit establishes the maximum amount that the price of a Futures Contract
or option may vary either up or down from the previous day's settlement price at
the end of a trading session. Once the daily limit has been reached in a
particular type of Futures Contract or option, no trades may be made on that day
at a price beyond that limit. The daily limit governs only price movement during
a particular trading day and therefore does not limit potential losses, because
the limit may prevent the liquidation of unfavorable positions. Futures Contract
and option prices occasionally have moved to the daily limit for several
consecutive trading days with little or no trading, thereby preventing prompt
liquidation of positions and subjecting some traders to substantial losses.
If the Fund were unable to liquidate a Futures or option on Futures position due
to the absence of a liquid secondary market or the imposition of price limits,
it could incur substantial losses. The Fund would continue to be subject to
market risk with respect to the position. In addition, except in the case of
purchased options, the Fund would continue to be required to make daily
variation margin payments and might be required to maintain the position being
hedged by the Future or option or to maintain cash or securities in a segregated
account.
Certain characteristics of the Futures market might increase the risk that
movements in the prices of Futures Contracts or options on Futures might not
correlate perfectly with movements in the prices of the investments being
hedged. For example, all participants in the Futures and options on Futures
markets are subject to daily variation margin calls and might be compelled to
liquidate Futures or options on Futures positions whose prices are moving
unfavorably to avoid being subject to further calls. These liquidations could
increase price volatility of the instruments and distort the normal
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G.T. GLOBAL GROWTH & INCOME FUND
price relationship between the Futures or options and the investments being
hedged. Also, because initial margin deposit requirements in the Futures market
are less onerous than margin requirements in the securities markets, there might
be increased participation by speculators in the Futures markets. This
participation also might cause temporary price distortions. In addition,
activities of large traders in both the Futures and securities markets involving
arbitrage, "program trading" and other investment strategies might result in
temporary price distortions.
OPTIONS ON FUTURES CONTRACTS
Options on Futures Contracts are similar to options on securities or currencies
except that options on Futures Contracts give the purchaser the right, in return
for the premium paid, to assume a position in a Futures Contract (a long
position if the option is a call and a short position if the option is a put) at
a specified exercise price at any time during the period of the option. Upon
exercise of the option, the delivery of the Futures position by the writer of
the option to the holder of the option will be accompanied by delivery of the
accumulated balance in the writer's Futures margin account, which represents the
amount by which the market price of the Futures Contract, at exercise, exceeds
(in the case of a call) or is less than (in the case of a put) the exercise
price of the option on the Futures Contract. If an option is exercised on the
last trading day prior to the expiration date of the option, the settlement will
be made entirely in cash equal to the difference between the exercise price of
the option and the closing level of the securities, currencies or index upon
which the Futures Contract is based on the expiration date. Purchasers of
options who fail to exercise their options prior to the exercise date suffer a
loss of the premium paid.
The purchase of call options on Futures can serve as a long hedge, and the
purchase of put options on Futures can serve as a short hedge. Writing call
options on Futures can serve as a limited short hedge, and writing put options
on Futures can serve as a limited long hedge, using a strategy similar to that
used for writing options on securities, foreign currencies or indices.
If the Fund writes an option on a Futures Contract, it will be required to
deposit initial and variation margin pursuant to requirements similar to those
applicable to Futures Contracts. Premiums received from the writing of an option
on a Futures Contract are included in the initial margin deposit.
The Fund may seek to close out an option position by selling an option covering
the same Futures Contract and having the same exercise price and expiration
date. The ability to establish and close out positions on such options is
subject to the maintenance of a liquid secondary market.
LIMITATION ON USE OF FUTURES, OPTIONS ON FUTURES AND CERTAIN OPTIONS ON
CURRENCIES
To the extent that the Fund enters into Futures Contracts, options on Futures
Contracts, and options on foreign currencies traded on a CFTC-regulated
exchange, in each case other than for BONA FIDE hedging purposes (as defined by
the CFTC), the aggregate initial margin and premiums required to establish those
positions (excluding the amount by which options are "in-the-money") will not
exceed 5% of the liquidation value of the Fund's portfolio, after taking into
account unrealized profits and unrealized losses on any contracts the Fund has
entered into. In general, a call option on a Futures Contract is "in-the-money"
if the value of the underlying Futures Contract exceeds the strike, I.E.,
exercise, price of the call; a put option on a futures contract is
"in-the-money" if the value of the underlying Futures Contract is exceeded by
the strike price of the put. This guideline may be modified by the Company's
Board of Directors without a shareholder vote. This limitation does not limit
the percentage of the Fund's assets at risk to 5%.
FORWARD CURRENCY CONTRACTS
A Forward Contract is an obligation, usually arranged with a commercial bank or
other currency dealer, to purchase or sell a currency against another currency
at a future date and price as agreed upon by the parties. The Fund either may
accept or make delivery of the currency at the maturity of the Forward Contract.
The Fund may also, if its contra party agrees, prior to maturity, enter into a
closing transaction involving the purchase or sale of an offsetting contract.
The Fund engages in forward currency transactions in anticipation of, or to
protect itself against, fluctuations in exchange rates. The Fund might sell a
particular foreign currency forward, for example, when it holds bonds
denominated in a foreign currency but anticipates, and seeks to be protected
against, a decline in the currency against the U.S. dollar. Similarly, the Fund
might sell the U.S. dollar forward when it holds bonds denominated in U.S.
dollars but anticipates, and seeks to be protected against, a decline in the
U.S. dollar relative to other currencies. Further, the Fund might purchase a
currency forward to "lock in" the price of securities denominated in that
currency that it anticipates purchasing.
Forward Contracts are traded in the interbank market conducted directly between
currency traders (usually large commercial banks) and their customers. A Forward
Contract generally has no deposit requirement and no commissions are
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G.T. GLOBAL GROWTH & INCOME FUND
charged at any stage for trades. The Fund will enter into such Forward Contracts
with major U.S. or foreign banks and securities or currency dealers in
accordance with the guidelines approved by the Company's Board of Directors.
The Fund may enter into Forward Contracts either with respect to specific
transactions or with respect to the Fund's portfolio positions. The precise
matching of the Forward Contract amounts and the value of specific securities
generally will not be possible because the future value of such securities in
foreign currencies will change as a consequence of market movements in the value
of those securities between the date the Forward Contract is entered into and
the date it matures. Accordingly, it may be necessary for the Fund to purchase
additional foreign currency on the spot (I.E., cash) market (and bear the
expense of such purchase) if the market value of the security is less than the
amount of foreign currency the Fund is obligated to deliver and if a decision is
made to sell the security and make delivery of the foreign currency. Conversely,
it may be necessary to sell on the spot market some of the foreign currency the
Fund is obligated to deliver. The projection of short-term currency market
movements is extremely difficult, and the successful execution of a short-term
hedging strategy is highly uncertain. Forward Contracts involve the risk that
anticipated currency movements will not be predicted accurately, causing the
Fund to sustain losses on these contracts and transaction costs.
At or before the maturity of a Forward Contract requiring the Fund to sell a
currency, the Fund either may sell a portfolio security and use the sale
proceeds to make delivery of the currency or retain the security and offset its
contractual obligation to deliver the currency by purchasing a second contract
pursuant to which the Fund will obtain, on the same maturity date, the same
amount of the currency that it is obligated to deliver. Similarly, the Fund may
close out a Forward Contract requiring it to purchase a specified currency by,
if its contra party agrees, entering into a second contract entitling it to sell
the same amount of the same currency on the maturity date of the first contract.
The Fund would realize a gain or loss as a result of entering into such an
offsetting Forward Contract under either circumstance to the extent the exchange
rate or rates between the currencies involved moved between the execution dates
of the first contract and the offsetting contract.
The cost to the Fund of engaging in Forward Contracts varies with factors such
as the currencies involved, the length of the contract period and the market
conditions then prevailing. Because Forward Contracts usually are entered into
on a principal basis, no fees or commissions are involved. The use of Forward
Contracts does not eliminate fluctuations in the prices of the underlying
securities the Fund owns or intends to acquire, but it does establish a rate of
exchange in advance. In addition, while Forward Contract sales limit the risk of
loss due to a decline in the value of the hedged currencies, they also limit any
potential gain that might result should the value of the currencies increase.
FOREIGN CURRENCY STRATEGIES -- SPECIAL CONSIDERATIONS
A Fund may use options on foreign currencies, Futures on foreign currencies,
options on Futures on foreign currencies and Forward Contracts to hedge against
movements in the values of the foreign currencies in which the Fund's securities
are denominated. Such currency hedges can protect against price movements in a
security that a Fund owns or intends to acquire that are attributable to changes
in the value of the currency in which it is denominated. Such hedges do not,
however, protect against price movements in the securities that are attributable
to other causes.
A Fund might seek to hedge against changes in the value of a particular currency
when no Futures Contract, Forward Contract or option involving that currency is
available or one of such contracts is more expensive than certain other
contracts. In such cases, the Fund may hedge against price movements in that
currency by entering into a contract on another currency or basket of
currencies, the values of which G.T. Capital believes will have a positive
correlation to the value of the currency being hedged. The risk that movements
in the price of the contract will not correlate perfectly with movements in the
price of the currency being hedged is magnified when this strategy is used.
The value of Futures Contracts, options on Futures Contracts, Forward Contracts
and options on foreign currencies depends on the value of the underlying
currency relative to the U.S. dollar. Because foreign currency transactions
occurring in the interbank market might involve substantially larger amounts
than those involved in the use of Futures Contracts, Forward Contracts or
options, a Fund could be disadvantaged by dealing in the odd lot market
(generally consisting of transactions of less than $1 million) for the
underlying foreign currencies at prices that are less favorable than for round
lots.
There is no systematic reporting of last sale information for foreign currencies
or any regulatory requirements that quotations available through dealers or
other market sources be firm or revised on a timely basis. Quotation information
generally is representative of very large transactions in the interbank market
and thus might not reflect odd-lot transactions where rates might be less
favorable. The interbank market in foreign currencies is a global,
round-the-clock market. To the extent the U.S. options or Futures markets are
closed while the markets for the underlying currencies remain open,
Statement of Additional Information Page 12
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
significant price and rate movements might take place in the underlying markets
that cannot be reflected in the markets for the Futures contracts or options
until they reopen.
Settlement of Futures Contracts, Forward Contracts and options involving foreign
currencies might be required to take place within the country issuing the
underlying currency. Thus, the Fund might be required to accept or make delivery
of the underlying foreign currency in accordance with any U.S. or foreign
regulations regarding the maintenance of foreign banking arrangements by U.S.
residents and might be required to pay any fees, taxes and charges associated
with such delivery assessed in the issuing country.
COVER
Transactions using Forward Contracts, Futures Contracts and options (other than
options that a Fund has purchased) expose the Fund to an obligation to another
party. A Fund will not enter into any such transactions unless it owns either
(1) an offsetting ("covered") position in securities, currencies, or other
options, Forward Contracts or Futures Contracts, or (2) cash, receivables and
short-term debt securities with a value sufficient at all times to cover its
potential obligations not covered as provided in (1) above. Each Fund will
comply with SEC guidelines regarding cover for these instruments and, if the
guidelines so require, set aside cash, U.S. government securities or other
liquid, high-grade debt securities in a segregated account with its custodian in
the prescribed amount.
Assets used as cover or held in a segregated account cannot be sold while the
position in the corresponding Forward Contract, Futures Contract or option is
open, unless they are replaced with other appropriate similar assets. If a large
portion of a Fund's assets are used for cover or segregated accounts, it could
affect portfolio management or the Fund's ability to meet redemption requests or
other current obligations.
- --------------------------------------------------------------------------------
RISK FACTORS
- --------------------------------------------------------------------------------
POLITICAL, SOCIAL AND ECONOMIC RISKS. Investing in securities of non-U.S.
companies may entail additional risks due to the potential political, social and
economic instability of certain countries and the risks of expropriation,
nationalization, confiscation or the imposition of restrictions on foreign
investment, convertibility of currencies into U.S. dollars and on repatriation
of capital invested. In the event of such expropriation, nationalization or
other confiscation by any country, the Fund could lose its entire investment in
any such country.
Certain countries in which the Fund may invest may have groups that advocate
radical religious or revolutionary philosophies or support ethnic independence.
Any disturbance on the part of such individuals could carry the potential for
widespread destruction or confiscation of property owned by individuals and
entities foreign to such country and could cause the loss of the Fund's
investment in those countries. Instability may also result from, among other
things: (i) authoritarian governments or military involvement in political and
economic decision-making, including changes in government through
extra-constitutional means; (ii) popular unrest associated with demands for
improved political, economic and social conditions; and (iii) hostile relations
with neighboring or other countries. Such political, social and economic
instability could disrupt the principal financial markets in which the Fund
invests and adversely affect the value of the Fund's assets.
ILLIQUID SECURITIES. The Fund may invest up to 10% of its net assets in
illiquid securities. See "Investment Limitations." Securities may be considered
illiquid if the Fund cannot reasonably expect within seven days to sell the
securities for approximately the amount at which the Fund values such
securities. The sale of illiquid securities, if they can be sold at all,
generally will require more time and result in higher brokerage charges or
dealer discounts and other selling expenses than the sale of liquid securities,
such as securities eligible for trading on U.S. securities exchanges or in the
over-the-counter markets. Moreover, restricted securities which may be illiquid
for purposes of this limitation, often sell, if at all, at a price lower than
similar securities that are not subject to restrictions on resale.
With respect to liquidity determinations generally, the Company's Board of
Directors has the ultimate responsibility for determining whether specific
securities, including restricted securities pursuant to Rule 144A under the
Securities Act of 1933, are liquid or illiquid. The Board has delegated the
function of making day-to-day determinations of liquidity to G.T. Capital in
accordance with procedures approved by the Company's Board of Directors. G.T.
Capital takes into account a
Statement of Additional Information Page 13
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
number of factors in reaching liquidity decisions, including, but not limited
to: (i) the frequency of trading in the security; (ii) the number of dealers who
make quotes for the security; (iii) the number of dealers who have undertaken to
make a market in the security; (iv) the number of other potential purchasers;
and (v) the nature of the security and how trading is effected (e.g., the time
needed to sell the security, how offers are solicited and the mechanics of
transfer). G.T. Capital monitors the liquidity of securities in the Fund's
portfolio and periodically reports on such decisions to the Board of Directors.
FOREIGN INVESTMENT RESTRICTIONS. Certain countries prohibit or impose
substantial restrictions on investments in their capital markets, particularly
their equity markets, by foreign entities such as the Fund. These restrictions
or controls may at times limit or preclude investment in certain securities and
may increase the cost and expenses of the Fund. For example, certain countries
require prior governmental approval before investments by foreign persons may be
made, or may limit the amount of investment by foreign persons in a particular
company, or limit the investment by foreign persons to only a specific class of
securities of a company that may have less advantageous terms than securities of
the company available for purchase by nationals. Moreover, the national policies
of certain countries may restrict investment opportunities in issuers or
industries deemed sensitive to national interests. In addition, some countries
require governmental approval for the repatriation of investment income, capital
or the proceeds of securities sales by foreign investors. In addition, if there
is a deterioration in a country's balance of payments or for other reasons, a
country may impose restrictions on foreign capital remittances abroad. The Fund
could be adversely affected by delays in, or a refusal to grant, any required
governmental approval for repatriation, as well as by the application to it of
other restrictions on investments.
NON-UNIFORM CORPORATE DISCLOSURE STANDARDS AND GOVERNMENTAL
REGULATION. Foreign companies are subject to accounting, auditing and financial
standards and requirements that differ in some cases significantly from those
applicable to U.S. companies. In particular, the assets, liabilities and profits
appearing on the financial statements of such a company may not reflect its
financial position or results of operations in the way they would be reflected
had such financial statements been prepared in accordance with U.S. generally
accepted accounting principles. Most of the securities held by the Fund will not
be registered with the SEC or regulators of any foreign country, nor will the
issuers thereof be subject to the SEC's reporting requirements. Thus, there will
be less available information concerning most foreign issuers of securities held
by the Fund than is available concerning U.S. issuers. In instances where the
financial statements of an issuer are not deemed to reflect accurately the
financial situation of the issuer, G.T. Capital will take appropriate steps to
evaluate the proposed investment, which may include on-site inspection of the
issuer, interviews with its management and consultations with accountants,
bankers and other specialists. There is substantially less publicly available
information about foreign companies than there are reports and ratings published
about U.S. companies and the U.S. Government. In addition, where public
information is available, it may be less reliable than such information
regarding U.S. issuers. Issuers of securities in foreign jurisdictions are
generally not subject to the same degree of regulation as are U.S. issuers with
respect to such matters as restrictions on market manipulation, insider trading
rules, shareholder proxy requirements and timely disclosure of information.
CURRENCY FLUCTUATIONS. Because the Fund, under normal circumstances, will
invest a substantial portion of its total assets in the securities of foreign
issuers which are denominated in foreign currencies, the strength or weakness of
the U.S. dollar against such foreign currencies will account for part of the
Fund's investment performance. A decline in the value of any particular currency
against the U.S. dollar will cause a decline in the U.S. dollar value of the
Fund's holdings of securities and cash denominated in such currency and,
therefore, will cause an overall decline in the Fund's net asset value and any
net investment income and capital gains derived from such securities to be
distributed in U.S. dollars to shareholders of the Fund. Moreover, if the value
of the foreign currencies in which the Fund receives its income falls relative
to the U.S. dollar between receipt of the income and the making of Fund
distributions, the Fund may be required to liquidate securities in order to make
distributions if the Fund has insufficient cash in U. S. dollars to meet
distribution requirements.
The rate of exchange between the U.S. dollar and other currencies is determined
by several factors including the supply and demand for particular currencies,
central bank efforts to support particular currencies, the movement of interest
rates, the pace of business activity in certain other countries and the U.S.,
and other economic and financial conditions affecting the world economy.
Although the Fund values its assets daily in terms of U.S. dollars, the Fund
does not intend to convert its holdings of foreign currencies into U.S. dollars
on a daily basis. The Fund will do so from time to time, and investors should be
aware of the costs of currency conversion. Although foreign exchange dealers do
not charge a fee for conversion, they do realize a profit based on the
difference ("spread") between the prices at which they are buying and selling
various currencies.
Statement of Additional Information Page 14
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
Thus, a dealer may offer to sell a foreign currency to the Fund at one rate,
while offering a lesser rate of exchange should the Fund desire to sell that
currency to the dealer.
ADVERSE MARKET CHARACTERISTICS. Securities of many foreign issuers may be
less liquid and their prices more volatile than securities of comparable U.S.
issuers. In addition, foreign securities markets and brokers generally are
subject to less governmental supervision and regulation than in the U.S., and
foreign securities transactions usually are subject to fixed commissions, which
generally are higher than negotiated commissions on U.S. transactions. In
addition, foreign securities transactions may be subject to difficulties
associated with the settlement of such transactions. Delays in settlement could
result in temporary periods when assets of the Fund are uninvested and no return
is earned thereon. The inability of the Fund to make intended security purchases
due to settlement problems could cause the Fund to miss attractive
opportunities. Inability to dispose of a portfolio security due to settlement
problems either could result in losses to the Fund due to subsequent declines in
value of the portfolio security or, if the Fund has entered into a contract to
sell the security, could result in possible liability to the purchaser. G.T.
Capital will consider such difficulties when determining the allocation of the
Fund's assets, although G.T. Capital does not believe that such difficulties
will have a material adverse effect on the Fund's portfolio trading activities.
The Fund may use foreign custodians, which may involve risks in addition to
those related to the use of U.S. custodians. Such risks include uncertainties
relating to: (i) determining and monitoring the financial strength, reputation
and standing of the foreign custodian; (ii) maintaining appropriate safeguards
to protect the Funds' investments and (iii) possible difficulties in obtaining
and enforcing judgments against such custodians.
WITHHOLDING TAXES. The Fund's net investment income from foreign issuers may
be subject to withholding taxes by the foreign issuer's country, thereby
reducing the Fund's net investment income or delaying the receipt of income
where those taxes may be recaptured. See "Taxes."
SPECIAL CONSIDERATIONS AFFECTING EUROPE. The countries that are members of
the European Economic Community ("Common Market") (Belgium, Denmark, France,
Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, the United
Kingdom and Germany) eliminated certain import tariffs and quotas and other
trade barriers with respect to one another over the past several years. G.T.
Capital believes that this deregulation should improve the prospects for
economic growth in many European countries. Among other things, the deregulation
could enable companies domiciled in one country to avail themselves of lower
labor costs existing in other countries. In addition, this deregulation could
benefit companies domiciled in one country by opening additional markets for
their goods and services in other countries. Since, however, it is not clear at
this time what the exact form or effect of these Common Market reforms will be
on business in Western Europe or the emerging European markets, it is impossible
to predict the long-term impact of the implementation of these programs on the
securities owned by the Fund.
SPECIAL CONSIDERATIONS AFFECTING JAPAN AND HONG KONG. The concentration of
investments by the Fund in Japan means that the Fund may be more volatile than a
fund that is broadly diversified geographically. Overseas trade is important to
Japan's economy. Japan has few natural resources and must export to pay for its
imports of these basic requirements. Because of the concentration of Japanese
exports in highly visible products, Japan has had difficult relations with its
trading partners, particularly the United States, where the trade imbalance is
the greatest. It is possible that trade sanctions or other protectionist
measures could impact Japan adversely in both the short and the long term. The
Japanese securities markets are less regulated than those in the United States.
Evidence has emerged from time to time of distortion of market prices to serve
political or other purposes. Shareholders' rights are not always equally
enforced.
Hong Kong is a British colony which will transfer sovereignty to the Peoples
Republic of China in 1997. China has espoused policies antagonistic to free
enterprise capitalism and democracy. There can be no guarantee that property
rights will continue to be safeguarded in Hong Kong after 1997, although
recently, China has moved toward free enterprise, and has established stock
exchanges of its own.
Statement of Additional Information Page 15
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
INVESTMENT LIMITATIONS
- --------------------------------------------------------------------------------
The Fund has adopted the following investment limitations as fundamental
policies which (unless otherwise noted) may not be changed without approval by
the holders of the lesser of (i) 67% of the Fund's shares represented at a
meeting at which more than 50% of the outstanding shares are represented, and
(ii) more than 50% of the outstanding shares.
The Fund may not:
(1) Invest 25% or more of the value of its total assets in the
securities of issuers conducting their principal business activities in the
same industry, except that this limitation shall not apply to securities
issued or guaranteed as to principal and interest by the U.S. Government or
any of its agencies or instrumentalities;
(2) Invest in companies for the purpose of exercising control or
management;
(3) Buy or sell real estate (including real estate limited partnerships)
or commodities or commodity contracts; however, the Fund may invest in debt
securities secured by real estate or interests therein or issued by
companies which invest in real estate or interests therein, including real
estate investment trusts, and may purchase or sell currencies (including
forward currency exchange contracts), futures contracts and related options
generally as described in the Prospectus and Statement of Additional
Information and subject to operating policy (4) below;
(4) Acquire securities subject to restrictions on disposition or
securities for which there is no readily available market, or enter into
repurchase agreements or purchase time deposits maturing in more than seven
days, or purchase over-the-counter options or hold assets set aside to cover
over-the-counter options written by the Fund, if, immediately after and as a
result, the value of such securities would exceed, in the aggregate, 10% of
the Fund's net assets;
(5) Engage in the business of underwriting securities of other issuers,
except to the extent that the disposal of an investment position may
technically cause it to be considered an underwriter as that term is defined
under the Securities Act of 1933;
(6) Make loans, except that the Fund may purchase debt securities and
enter into repurchase agreements and make loans of portfolio securities;
(7) Purchase securities on margin, provided that the Fund may obtain
such short-term credits as may be necessary for the clearance of purchases
and sales of securities; except that it may make margin deposits in
connection with futures contracts subject to operating policy (4) below;
(8) Borrow money except from banks for temporary or emergency purposes
not in excess of 33 1/3% of the value of the Fund's total assets at the
lower of cost or fair market value. The Fund will not purchase securities
while borrowings in excess of 5% of its total assets are outstanding. This
restriction shall not prevent the Fund from entering into reverse repurchase
agreements and engaging in "roll" transactions, provided that reverse
repurchase agreements, "roll" transactions and any other transactions
constituting borrowing by the Fund may not exceed one-third of the Fund's
total assets. In the event that the asset coverage for the Fund's borrowings
falls below 300%, the Fund will reduce, within three days (excluding Sundays
and holidays), the amount of its borrowings in order to provide for 300%
asset coverage;
(9) Mortgage, pledge, or hypothecate any of its assets, provided that
this restriction shall not apply to the transfer of securities in connection
with any permissible borrowing or to collateral arrangements in connection
with permissible activities;
(10) Invest in interests in oil, gas, or other mineral exploration or
development programs; or
(11) Purchase or retain the securities of any issuer, if those individual
officers and Directors of the Fund, its investment adviser, or distributor,
each owning beneficially more than 1/2 of 1% of the securities of such
issuer, together own more than 5% of the securities of such issuer.
Statement of Additional Information Page 16
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
For purposes of the concentration policy of the Fund contained in limitation (1)
above, the Fund intends to comply with the SEC staff position that securities
issued or guaranteed as to principal and interest by any single foreign
government or any supranational organizations in the aggregate are considered to
be securities of issuers in the same industry.
The following operating policies of the Fund are not fundamental policies and
may be changed by vote of a majority of the Company's Board of Directors without
shareholder approval. The Fund may not: (1) invest in securities of an issuer if
the investment would cause the Fund to own more than 10% of any class of
securities of any one issuer; (2) sell securities short, except to the extent
that the Fund contemporaneously owns or has the right to acquire at no
additional cost securities identical to those sold short; (3) invest more than
5% of its total assets in securities of companies having, together with their
predecessors, a record of less than three years of continuous operation; or (4)
enter into a futures contract, an option on a futures contract, or an option on
foreign currency traded on a CFTC-regulated exchange, in each case other than
for BONA FIDE hedging purposes (as defined by the CFTC), if the aggregate
initial margin and premiums required to establish all of those positions
(excluding the amount by which options are "in-the-money") exceeds 5% of the
liquidation value of the Fund's portfolio, after taking into account unrealized
profits and unrealized losses on any contracts the Fund has entered into.
Investors should refer to the Prospectus for further information with respect to
the Fund's investment objective, which may not be changed without the approval
of the shareholders, and other investment policies, techniques and limitations,
which may be changed without shareholder approval.
- --------------------------------------------------------------------------------
EXECUTION OF PORTFOLIO
TRANSACTIONS
- --------------------------------------------------------------------------------
Subject to policies established by the Company's Board of Directors, G.T.
Capital is responsible for the execution of the Fund's portfolio transactions
and the selection of broker/dealers who execute such transactions on behalf of
the Fund. In executing portfolio transactions, G.T. Capital seeks the best net
results for the Fund, taking into account such factors as the price (including
the applicable brokerage commission or dealer spread), size of the order,
difficulty of execution and operational facilities of the firm involved.
Although G.T. Capital generally seeks reasonably competitive commission rates
and spreads, payment of the lowest commission or spread is not necessarily
consistent with the best net results. While the Fund may engage in soft dollar
arrangements for research services, as described below, the Fund has no
obligation to deal with any broker/dealer or group of broker/dealers in the
execution of portfolio transactions.
Debt securities generally are traded on a "net" basis with a dealer acting as
principal for its own account without a stated commission, although the price of
the security usually includes a profit to the dealer. U.S. and foreign
government securities and money market instruments generally are traded in the
OTC markets. In underwritten offerings, securities usually are purchased at a
fixed price which includes an amount of compensation to the underwriter. On
occasion, securities may be purchased directly from an issuer, in which case no
commissions or discounts are paid. Broker/dealers may receive commissions on
futures, currency and options transactions.
Consistent with the interests of the Fund, G.T. Capital may select brokers to
execute the Fund's portfolio transactions, on the basis of the research and
brokerage services they provide to G.T. Capital for its use in managing the Fund
and its other advisory accounts. Such services may include furnishing analyses,
reports and information concerning issuers, industries, securities, geographic
regions, economic factors and trends, portfolio strategy, and performance of
accounts; and effecting securities transactions and performing functions
incidental thereto (such as clearance and settlement). Research and brokerage
services received from such brokers are in addition to, and not in lieu of, the
services required to be performed by G.T. Capital under the Management Contract
(defined below). A commission paid to such brokers may be higher than that which
another qualified broker would have charged for effecting the same transaction,
provided that G.T. Capital determines in good faith that such commission is
reasonable in terms either of that particular transaction or the overall
responsibility of G.T. Capital to the Fund and its other clients and that the
total commissions paid by the Fund will be reasonable in relation to the
benefits received by the Fund over the long term. Research services may also be
received from dealers who execute Fund transactions in over-the-counter markets.
G.T. Capital may allocate brokerage transactions to broker/dealers who have
entered into arrangements under which the broker/dealer allocates a portion of
the commissions paid by the Fund toward payment of the Fund's expenses, such as
transfer agent and custodian fees.
Statement of Additional Information Page 17
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
Investment decisions for the Fund and for other investment accounts managed by
G.T. Capital are made independently of each other in light of differing
conditions. However, the same investment decision occasionally may be made for
two or more of such accounts including the Fund. In such cases, simultaneous
transactions may occur. Purchases or sales are then allocated as to price or
amount in a manner deemed fair and equitable to all accounts involved. While in
some cases this practice could have a detrimental effect upon the price or value
of the security as far as the Fund is concerned, in other cases, G.T. Capital
believes that coordination and the ability to participate in volume transactions
will be beneficial to the Fund.
Under a policy adopted by the Company's Board of Directors, and subject to the
policy of obtaining the best net results, G.T. Capital may consider a
broker/dealer's sale of the shares of the Fund and the other funds for which
G.T. Capital serves as investment manager in selecting brokers and dealers for
the execution of portfolio transactions. This policy does not imply a commitment
to execute portfolio transactions through all broker/dealers that sell shares of
the Fund and such other funds.
The Fund contemplates purchasing most foreign equity securities in
over-the-counter markets or stock exchanges located in the countries in which
the respective principal offices of the issuers of the various securities are
located, if that is the best available market. The fixed commissions paid in
connection with most such foreign stock transactions generally are higher than
negotiated commissions on United States transactions. There generally is less
government supervision and regulation of foreign stock exchanges and brokers
than in the United States. Foreign security settlements may in some instances be
subject to delays and related administrative uncertainties.
Foreign equity securities may be held by the Fund in the form of ADRs, ADSs,
EDRs, CDRs or securities convertible into foreign equity securities. ADRs, ADSs,
EDRs and CDRs may be listed on stock exchanges, or traded in the over-the-
counter markets in the United States or Europe, as the case may be. ADRs, like
other securities traded in the United States, will be subject to negotiated
commission rates. The foreign and domestic debt securities and money market
instruments in which the Fund may invest generally are traded in the
over-the-counter markets.
The Fund contemplates that, consistent with the policy of obtaining the best net
results, brokerage transactions may be conducted through certain companies that
are members of the BIL GT Group. The Company's Board of Directors has adopted
procedures in conformity with Rule 17e-1 under the 1940 Act to ensure that all
brokerage commissions paid to such affiliates are reasonable and fair in the
context of the market in which they are operating. Any such transactions will be
effected and related compensation paid only in accordance with applicable SEC
regulations. For the Fund's fiscal years ended October 31, 1994, 1993 and 1992,
the Fund paid aggregate brokerage commissions of $280,861, $382,594 and
$195,064, respectively.
For the fiscal years ended October 31, 1994, 1993 and 1992, the Fund paid
aggregate brokerage commissions of $280,861, $382,594 and $195,064,
respectively. For the fiscal year ended October 31, 1994, 1993 and 1992 the Fund
paid to Bank-in-Liechtenstein, Frankfurt, an "affiliated broker" as defined in
the 1940 Act, aggregate brokerage commissions of $2,485 for transactions
involving purchase and sales of portfolio securities which represented 0.89% of
the total brokerage commissions paid by the Fund and 0.35% of the aggregate
dollar amount of transactions involving payment of commissions by the Fund.
PORTFOLIO TRADING AND TURNOVER
The Fund engages in portfolio trading when G.T. Capital has concluded that the
sale of a security owned by the Fund and/ or the purchase of another security of
better value can enhance principal and/or increase income. A security may be
sold to avoid any prospective decline in market value, or a security may be
purchased in anticipation of a market rise. Consistent with the Fund's
investment objective, a security also may be sold and a comparable security
purchased coincidentally in order to take advantage of what is believed to be a
disparity in the normal yield and price relationship between the two securities.
Although the Fund does not intend generally to trade for short-term profits, the
securities in the Fund's portfolio will be sold whenever management believes it
is appropriate to do so, without regard to the length of time a particular
security may have been held. The Fund anticipates that its annual portfolio
turnover rate should not exceed 100%, but this expectation will not be a
limiting factor when G.T. Capital deems portfolio changes appropriate. A 100%
portfolio turnover rate would occur if the lesser of the value of purchases or
sales of portfolio securities for the Fund for a year (excluding purchases of
U.S. Treasury and other securities with a maturity at the date of purchase of
one year or less) were equal to 100% of the average monthly value of the
securities, excluding short-term investments, held by the Fund during such year.
Higher portfolio turnover involves correspondingly greater brokerage commissions
and other transaction costs that the Fund will bear directly. For the fiscal
years ended October 31, 1994 and 1993, the Fund's portfolio turnover rates were
117% and 24%, respectively.
Statement of Additional Information Page 18
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
DIRECTORS AND EXECUTIVE
OFFICERS
- --------------------------------------------------------------------------------
The Company's By-laws authorize a Board of Directors of between 1 and 25
persons, as fixed by the Board of Directors. Directors normally are elected by
shareholders; however, a majority of remaining Directors may fill Director
vacancies caused by resignation, death or expansion of the Board. The Company's
Directors and Executive Officers are listed below.
<TABLE>
<CAPTION>
NAME, POSITION(S) WITH THE PRINCIPAL OCCUPATIONS AND BUSINESS
COMPANY AND ADDRESS EXPERIENCE FOR PAST 5 YEARS
- --------------------------------------- ------------------------------------------------------------------------------------------
<S> <C>
David A. Minella*, 42 Director of BIL G.T. Group Limited (holding company of the various international G.T.
Director, Chairman of the Board and companies) since 1990; Director and President of G.T. Capital since 1989; Director and
President President of G.T. Global since 1987; and Director and President of G.T. Services since
50 California St. 1990. Mr. Minella also is a director or trustee of each of the other investment companies
San Francisco, CA 94111 registered under the 1940 Act that is managed or administered by G.T. Capital.
C. Derek Anderson, 53 Chairman, Anderson Capital Management, Inc. from 1988 to present; Chairman, Plantagenet
Director Holdings, Ltd. from 1991 to present; Director, Munsingwear, Inc.; Director, American
220 Sansome Street Heritage Group Inc.; Director, T.L. Higgins Inc. and various other companies. Mr. Anderson
Suite 400 also is a director or trustee of each of the other investment companies registered under
San Francisco, CA 94104 the 1940 Act that is managed or administered by G.T. Capital.
Frank S. Bayley, 55 A Partner with Baker & McKenzie (a law firm) and serves as Director and Chairman of C.D.
Director Stinson Company (a private investment company); Trustee, Seattle Art Museum. Mr. Bayley
2 Embarcadero Center also is a director or trustee of each of the other investment companies registered under
San Francisco, CA 94118 the 1940 Act that is managed or administered by G.T. Capital.
Arthur C. Patterson, 52 Managing Partner of Accel Partners (a venture capital firm). Mr. Patterson also serves as
Director a director of various computing and software companies. Mr. Patterson also is a director
One Embarcadero Center or trustee of each of the other investment companies registered under the 1940 Act that is
Suite 3820 managed or administered by G.T. Capital.
San Francisco, CA 94111
Ruth H. Quigley, 59 Private investor. From 1984 to 1986, Miss Quigley was President of Quigley Friedlander &
Director Co., Inc. (a financial advisory services firm). Ms. Quigley also is a director or trustee
1055 California Street of each of the other investment companies registered under the 1940 Act that is managed or
San Francisco, CA 94108 administered by G.T. Capital.
F. Christian Wignall, 39 Senior Vice President, Chief Investment Officer - Global Equities and a Director of G.T.
Vice President and Chief Investment Capital since 1987, and Chairman of the Investment Policy Committee of the affiliated
Officer - international G.T. companies since 1990.
Global Equities
50 California Street
San Francisco, CA 94111
Gary Kreps, 40 Senior Vice President and Chief Investment Officer - Global Fixed Income Investments and a
Vice President and Chief Investment director of G.T. Capital since 1992. Prior to joining G.T. Capital, Mr. Kreps was Senior
Officer - Global Vice President of the Putnam Companies from 1988 to 1992.
Fixed Income
50 California Street
San Francisco, CA 94111
</TABLE>
Statement of Additional Information Page 19
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
<TABLE>
<CAPTION>
NAME, POSITION(S) WITH THE PRINCIPAL OCCUPATIONS AND BUSINESS
COMPANY AND ADDRESS EXPERIENCE FOR PAST 5 YEARS
- --------------------------------------- ------------------------------------------------------------------------------------------
James R. Tufts, 37 Senior Vice President -- Finance and Administration of G.T. Capital, G.T. Global and G.T.
Vice President and Chief Services since 1994. Prior thereto, Mr. Tufts was Vice President -- Finance of G.T.
Financial Officer Capital and G.T. Global since 1987; Vice President -- Finance of G.T. Services since 1990;
50 California Street and a Director of G.T. Capital, G.T. Global and G.T. Services since 1991.
San Francisco, CA 94111
<S> <C>
Kenneth W. Chancey, 50 Vice President of G.T. Capital and G.T. Global since 1992. Mr. Chancey was Vice President
Vice President and of Putnam Fiduciary Trust Company from 1989 to 1992.
Chief Accounting Officer
50 California Street
San Francisco, CA 94111
Helge K. Lee, 48 Senior Vice President, General Counsel and Secretary of G.T. Capital, G.T. Global and G.T.
Vice President and Secretary Services since May, 1994. Mr. Lee was the Senior Vice President, General Counsel and
50 California Street Secretary of Strong/Corneliuson Management, Inc. and Secretary of each of the Strong Funds
San Francisco, CA 94111 from October, 1991 through May, 1994. For more than five years prior to October, 1991, he
was a shareholder in the law firm of Godfrey & Kahn, S.C., Milwaukee, Wisconsin.
Peter R. Guarino, 36 Assistant General Counsel of G.T. Capital, G.T. Global and G.T. Services since 1991. From
Assistant Secretary 1989 to 1991, Mr. Guarino was an attorney at The Dreyfus Corporation. Prior thereto, he
50 California Street was associated with Colonial Management Associates, Inc.
San Francisco, CA 94111
David J. Thelander, 39 Assistant General Counsel of G.T. Capital since January 1995. From 1993 to 1994, Mr.
Assistant Secretary Thelander was an associate at Kirkpatrick & Lockhart LLP (a law firm). Prior thereto, he
50 California Street was an attorney with the U.S. Securities and Exchange Commission.
San Francisco, CA 94111
<FN>
- --------------
* Mr. Minella is an "interested person" of the Company as defined by the 1940
Act due to his affiliation with the G.T. companies.
</TABLE>
The Board of Directors has a Nominating and Audit Committee, comprised of Miss
Quigley and Messrs. Anderson, Bayley and Patterson, which is responsible for
nominating persons to serve as Directors, reviewing audits of the Company and
its funds and recommending firms to serve as independent auditors for the
Company. Each of the Directors and officers of the Company is also a Director
and officer of G.T. Investment Portfolios, Inc. and G.T. Global Developing
Markets Fund, Inc., a Trustee and officer of G.T. Global Growth Series and a
Trustee of G.T. Greater Europe Fund, G.T. Global Variable Investment Trust, G.T.
Global Variable Investment Series, Global High Income Portfolio and Global
Investment Portfolio, which are also registered investment companies managed by
G.T. Capital. Each Director and Officer serves in total as a Director and or
Trustee and Officer, respectively, of 9 registered investment companies with 38
series managed or administered by G.T. Capital. The Company pays each Director,
who is not a director, officer or employee of G.T. Capital or any affiliated
company, $5,000 per annum, plus $300 per Fund for each meeting of the Board
attended, and reimburses travel and other expenses incurred in connection with
attendance at such meetings. Other Directors and officers receive no
compensation or expense reimbursement from the Company. For the fiscal year
ended December 31, 1994, Mr. Anderson, Mr. Bayley, Mr. Patterson and Ms. Quigley
received Directors' fees and expense reimbursements of $37,114, $39,425, $31,941
and $33,178, respectively. For the fiscal year ended October 31, 1994 Mr.
Anderson, Mr. Bayley, Mr. Patterson and Ms. Quigley, who are not directors,
officers or employees of G.T. Capital or any affiliated company, received total
compensation of $86,260.80, $91,278.72, $74,492.00 and $78,665.19, respectively,
from the 38 G.T. Funds for which he or she serves as a Director or Trustee. Fees
and expenses disbursed to the Directors contained no accrued or payable pension
or retirement benefits. As of the date of this Statement of Additional
Information, the officers and Directors and their families as a group owned in
the aggregate beneficially or of record less than 1% of the outstanding shares
of the Fund or of all the Company's funds in the aggregate.
Statement of Additional Information Page 20
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
MANAGEMENT
- --------------------------------------------------------------------------------
INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES
G.T. Capital serves as the Fund's investment manager and administrator under an
Investment Management and Administration Contract ("Management Contract")
between the Company and G.T. Capital. As investment manager and administrator,
G.T. Capital makes all investment decisions for the Fund and administers the
Fund's affairs. Among other things, G.T. Capital furnishes the services and pays
the compensation and travel expenses of persons who perform the executive,
administrative, clerical and bookkeeping functions of the Company and the Fund,
and provides suitable office space, necessary small office equipment and
utilities. For these services, the Fund pays G.T. Capital investment management
and administration fees, based on the Fund's average daily net assets, computed
daily and paid monthly, at the annualized rate of .975% on the first $500
million, .95% on the next $500 million, .925% on the next $500 million, and .90%
on amounts thereafter.
The Management Contract had an initial two-year term with respect to the Fund
from the date of the commencement of Fund operations, and may be renewed for
additional one-year terms thereafter with respect to the Fund, provided that any
such renewal has been specifically approved at least annually by: (i) the
Company's Board of Directors, or by the vote of a majority of the Fund's
outstanding voting securities (as defined in the 1940 Act), and (ii) a majority
of Directors who are not parties to the Management Contract or "interested
persons" of any such party (as defined in the 1940 Act), cast in person at a
meeting called for the specific purpose of voting on such approval. The
Management Contract most recently was approved on June 15, 1994 with respect to
the Fund by the vote of the Board of Directors of the Company, including a
majority of Directors who are not parties to the Management Contract or an
"interested person" of any such party. The Management Contract provides that
with respect to the Fund, the Company or G.T. Capital may terminate the Contract
without penalty upon sixty days' written notice. The Management Contract
terminates automatically in the event of its assignment (as defined in the 1940
Act).
Under the Management Contract, G.T. Capital has agreed to waive its investment
management and administration fees from the Fund and to reimburse the Fund to
the extent necessary to assure that the Fund's annual expenses (exclusive of
brokerage commissions, organizational expenses, taxes, interest,
distribution-related expenses, certain expenses attributable to investing
outside the U.S. and extraordinary expenses) do not exceed the most stringent
expense limitations prescribed by any state in which the Fund's shares are
offered for sale. Currently, the most restrictive applicable limitation provides
that the Fund's expenses may not exceed an annual rate of 2 1/2% of the first
$30 million of average net assets, 2% of the next $70 million of average net
assets and 1 1/2% of assets in excess of that amount. In addition, G.T. Capital
and G.T. Global have voluntarily undertaken to limit the Fund's expenses
(exclusive of brokerage commissions, taxes, interest and extraordinary expenses)
to the maximum annual level of 1.50% of the average daily net assets of the
Fund's Advisor Class, during each fiscal year and G.T. Capital and G.T. Global
have agreed to reimburse the Fund if the Fund's expenses exceed that amount.
The following table discloses the amount of investment management and
administration fees paid by the Fund to G.T. Capital during the Fund's last
three fiscal years:
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31, AMOUNT PAID
- --------------------------------------------------------------------------------------------------------- -------------
<S> <C>
1994..................................................................................................... $ 5,676,421
1993..................................................................................................... $ 2,226,185
1992..................................................................................................... $ 1,094,168
</TABLE>
The fees shown in the table above do not include the effect of reimbursements of
Fund operating expenses made by G.T. Capital. During the Fund's fiscal years
ended October 31, 1993 and 1992, G.T. Capital reimbursed the Fund for a portion
of the Fund's aggregate operating expenses in the amounts of $183,449 and
$381,540, respectively.
DISTRIBUTION SERVICES
The Fund's Advisor Class shares are offered continuously through the Fund's
principal underwriter and distributor, G.T. Global, on a "best efforts" basis
without a sales charge or a contingent deferred sales charge.
Statement of Additional Information Page 21
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
TRANSFER AGENCY SERVICES
G.T. Global Investor Services, Inc. ("Transfer Agent") has been retained by the
Fund to perform shareholder servicing, reporting and general transfer agent
functions for the Fund. For these services, the Transfer Agent receives an
annual maintenance fee of $17.50 per account, a new account fee of $4.00 per
account, a per transaction fee of $1.75 for all transactions other than
exchanges and a per exchange fee of $2.25. The Transfer Agent also is reimbursed
by the Fund for its out-of-pocket expenses for such items as postage, forms,
telephone charges, stationery and office supplies.
EXPENSES OF THE FUND
The Fund pays all expenses not assumed by G.T. Capital, G.T. Global and other
agents. These expenses include, in addition to the advisory, distribution,
transfer agency and brokerage fees discussed above, legal and audit expenses,
custodian fees, directors' fees, organizational fees, fidelity bond and other
insurance premiums, taxes, extraordinary expenses and the expenses of reports
and prospectuses sent to existing investors. The allocation of general Company
expenses and expenses shared among the Fund and other funds organized as series
of the Company are allocated on a basis deemed fair and equitable, which may be
based on the relative net assets of the Fund or the nature of the services
performed and relative applicability to the Fund. Expenditures, including costs
incurred in connection with the purchase or sale of portfolio securities, which
are capitalized in accordance with generally accepted accounting principles
applicable to investment companies, are accounted for as capital items and not
as expenses. The ratio of the Fund's expenses to its relative net assets can be
expected to be higher than the expense ratios of funds investing solely in
domestic securities, since the cost of maintaining the custody of foreign
securities and the rate of investment management fees paid by the Fund generally
are higher than the comparable expenses of such other funds.
- --------------------------------------------------------------------------------
VALUATION OF FUND SHARES
- --------------------------------------------------------------------------------
As described in the Prospectus, the Fund's net asset value per share for each
class of shares is determined at the close of regular trading on The New York
Stock Exchange ("NYSE") (currently 4:00 p.m. Eastern time, unless weather,
equipment failure or other factors contribute to an earlier closing time) on
each business day the NYSE is open for business. Currently, the NYSE is closed
on weekends and on certain days relating to the following holidays: New Year's
Day, Presidents' Day, Good Friday, Memorial Day, July 4th, Labor Day,
Thanksgiving Day and Christmas Day.
The Fund's portfolio securities and other assets are valued as follows:
Equity securities, including ADRs, ADSs, and EDRs, which are traded on stock
exchanges, are valued at the last sale price on the exchange 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 to be the primary market.
Long-term debt obligations are valued at the mean of representative quoted bid
and asked prices for such securities or, if such prices are not available, at
prices for securities of comparable 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 are amortized to
maturity based on their cost, adjusted for foreign exchange translation,
provided such valuations represent fair value.
Options on indices, securities and currencies purchased by the Fund are valued
at their last bid price in the case of listed options or at the average of the
last bid prices obtained from dealers in the case of OTC options. The value of
each security denominated in a currency other than U.S. dollars will be
translated into U.S. dollars at the prevailing market rate as determined by G.T.
Capital on that day. When market quotations for futures and options on futures
held by the Fund are readily available, those positions will be valued based
upon such quotations.
Securities and other assets for which market quotations are not readily
available (including restricted securities which are subject to limitations as
to their sale) are valued at fair value as determined in good faith by or under
the direction of the Company's Board of Directors. The valuation procedures
applied in any specific instance are likely to vary from case to case. However,
consideration generally is given to the financial position of the issuer and
other fundamental analytical
Statement of Additional Information Page 22
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
data relating to the investment and to the nature of the restrictions on
disposition of the securities (including any registration expenses that might be
borne by the Fund in connection with such disposition). In addition, specific
factors also generally are considered, such as the cost of the investment, the
market value of any unrestricted securities of the same class (both at the time
of purchase and at the time of valuation), the size of the holding, the prices
of any recent transactions or offers with respect to such securities and any
available analysts' reports regarding the issuer.
The fair value of any other assets is added to the value of all securities
positions to arrive at the value of the Fund's total assets. The Fund's
liabilities, including accruals for expenses, are deducted from its total
assets. Once the total value of the Fund's net assets is so determined, that
value is then divided by the total number of shares outstanding (excluding
treasury shares), and the result, rounded to the nearer cent, is the net asset
value per share.
Any assets or liabilities initially expressed in terms of foreign currencies are
translated into U.S. dollars at the official exchange rate or at the mean of the
current bid and asked prices of such currencies against the U.S. dollar last
quoted by a major bank that is a regular participant in the foreign exchange
market or on the basis of a pricing service that takes into account the quotes
provided by a number of such major banks. If none of these alternatives are
available, or none are deemed to provide a suitable methodology for converting a
foreign currency into U.S. dollars, the Board of Directors, in good faith, will
establish a conversion rate for such currency.
European, Far Eastern, or Latin American securities trading may not take place
on all days on which the NYSE is open. Further, trading takes place in Japanese
markets on certain Saturdays and in various foreign markets on days on which the
NYSE is not open. In addition, trading in securities on European and Far Eastern
securities exchanges and OTC markets generally is completed well before the
close of the business day in New York. Consequently, the calculation of the
Fund's net asset value may not take place contemporaneously with the
determination of the prices of securities held by the Fund. Events affecting the
values of portfolio securities that occur between the time their prices are
determined and the close of regular trading on the NYSE will not be reflected in
the Fund's net asset value unless G.T. Capital, under the supervision of the
Company's Board of Directors, determines that the particular event would
materially affect net asset value. As a result, the Fund's net asset value may
be significantly affected by such trading on days when a shareholder cannot
purchase or redeem shares of the Fund.
- --------------------------------------------------------------------------------
INFORMATION RELATING TO SALES
AND REDEMPTIONS
- --------------------------------------------------------------------------------
PAYMENT AND TERMS OF OFFERING
Payment for Advisor Class shares purchased should accompany the purchase order,
or funds should be wired to the Transfer Agent as described in the Prospectus.
Payment for Fund shares, other than by wire transfer, must be made by check or
money order drawn on a U.S. bank. Checks or money orders must be payable in U.S.
dollars.
As a condition of this offering, if an order to purchase either class of shares
is cancelled due to nonpayment (for example, on account of a check returned for
"not sufficient funds"), the person who made the order will be responsible for
any loss incurred by the Fund by reason of such cancellation, and if such
purchaser is a shareholder, the Fund shall have the authority as agent of the
shareholder to redeem shares in his or her account at their then-current net
asset value per share to reimburse the Fund for the loss incurred. Investors
whose purchase orders have been cancelled due to nonpayment may be prohibited
from placing future orders.
The Fund reserves the right at any time to waive or increase the minimum
requirements applicable to initial or subsequent investments with respect to any
person or class of persons. An order to purchase shares is not binding on the
Fund until it has been confirmed in writing by the Transfer Agent (or other
arrangements made with the Fund, in the case of orders utilizing wire transfer
of funds, as described above) and payment has been received. To protect existing
shareholders, the Fund reserves the right to reject any offer for a purchase of
shares by any individual.
SALES OUTSIDE THE UNITED STATES
Sales of Fund shares made through brokers outside the United States will be at
net asset value plus a sales commission, if any, established by that broker or
by local law; such a commission, if any, may be more or less than the sales
charges listed in the sales charge table included in the Prospectus.
Statement of Additional Information Page 23
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
EXCHANGES BETWEEN FUNDS
Shares of the Fund may be exchanged for shares of other G.T. Global Mutual
Funds, based on their respective net asset values without imposition of any
sales charges provided that the registration remains identical. Advisor Class
shares may be exchanged only for Class A shares of other G.T. Global Mutual
Funds. The exchange privilege is not an option or right to purchase shares but
is permitted under the current policies of the respective G.T. Global Mutual
Funds. The privilege may be discontinued or changed at any time by any of the
funds upon 60 days prior notice to the shareholders of such fund and is
available only in states where the exchange may be legally made. Before
purchasing shares through the exercise of the exchange privilege, a shareholder
should obtain and read a copy of the prospectus of the fund to be purchased and
should consider the investment objective(s) of the fund.
TELEPHONE REDEMPTIONS
A corporation or partnership wishing to utilize telephone redemption services
must submit a "Corporate Resolution" or "Certificate of Partnership" indicating
the names, titles and the required number of signatures of persons authorized to
act on its behalf. The certificate must be signed by a duly authorized
officer(s) and, in the case of a corporation, the corporate seal must be
affixed. All shareholders may request that redemption proceeds be transmitted by
bank wire upon request directly to the shareholder's predesignated account at a
domestic bank or savings institution, if the proceeds are at least $1,000. Costs
in connection with the administration of this service, including wire charges,
currently are borne by the Fund. Proceeds of less than $1,000 will be mailed to
the shareholder's registered address of record. The Fund and the Transfer Agent
reserve the right to refuse any telephone instructions and may discontinue the
aforementioned redemption options upon 30 days' written notice.
SUSPENSION OF REDEMPTION PRIVILEGES
The Fund may suspend redemption privileges or postpone the date of payment for
more than seven days after a redemption order is received during any period (1)
when the NYSE is closed other than customary weekend and holiday closings, or
trading on the NYSE is restricted as determined by the SEC, (2) when an
emergency exists, as defined by the SEC, which would prohibit the Fund from
disposing of its portfolio securities or in fairly determining the value of its
assets, or (3) as the SEC may otherwise permit.
REDEMPTIONS IN KIND
It is possible that conditions may arise in the future which would, in the
opinion of the Company's Board of Directors, make it undesirable for the Fund to
pay for all redemptions in cash. In such cases, the Board may authorize payment
to be made in portfolio securities or other property of the Fund, so called
"redemptions in kind." Payment of redemptions in kind will be made in readily
marketable securities. Such securities would be valued at the same value
assigned to them in computing the net asset value per share. Shareholders
receiving such securities would incur brokerage costs in selling any such
securities so received. However, despite the foregoing, the Company has filed
with the SEC an election pursuant to Rule 18f-1 under the 1940 Act. This means
that the Fund will pay in cash all requests for redemption made by any
shareholder of record, limited in amount with respect to each shareholder during
any ninety-day period to the lesser of $250,000 or 1% of the value of the net
assets of the Fund at the beginning of such period. This election is irrevocable
so long as Rule 18f-1 remains in effect, unless the SEC by order upon
application permits the withdrawal of such election.
- --------------------------------------------------------------------------------
TAXES
- --------------------------------------------------------------------------------
GENERAL
In order to qualify or to continue to qualify for treatment as a regulated
investment company ("RIC") under the Internal Revenue Code of 1986, as amended
("Code"), the Fund must distribute to its shareholders for each taxable year at
least 90% of its investment company taxable income (consisting generally of net
investment income, net short-term capital gain and net gains from certain
foreign currency transactions) ("Distribution Requirement") and must meet
several additional requirements. These requirements include the following: (1)
the Fund must derive at least 90% of its gross income each taxable year from
dividends, interest, payments with respect to securities loans and gains from
the sale or other disposition of securities or foreign currencies, or other
income (including gains from options, Futures or Forward Contracts) derived with
respect to its business of investing in securities or those currencies ("Income
Requirement"); (2) the Fund must derive less than 30% of its gross income each
taxable year from the sale or other disposition of securities, or any of the
following,
Statement of Additional Information Page 24
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
that were held for less than three months -- options or Futures (other than
those on foreign currencies), or foreign currencies (or options, Futures or
Forward Contracts thereon) that are not directly related to the Fund's principal
business of investing in securities (or options and Futures with respect to
securities) ("Short-Short Limitation"); (3) at the close of each quarter of the
Fund's taxable year, at least 50% of the value of its total assets must be
represented by cash and cash items, U.S. government securities, securities of
other RICs and other securities, with these other securities limited, in respect
of any one issuer, to an amount that does not exceed 5% of the value of the
Fund's total assets and that does not represent more than 10% of the issuer's
outstanding voting securities; and (4) at the close of each quarter of the
Fund's taxable year, not more than 25% of the value of its total assets may be
invested in securities (other than U.S. government securities or the securities
of other RICs) of any one issuer.
Dividends and other distributions declared by the Fund in, and payable to
shareholders of record as of a date in, October, November or December of any
year will be deemed to have been paid by the Fund and received by the
shareholders on December 31 of that year if the distributions are paid by the
Fund during the following January. Accordingly, those distributions will be
taxed to shareholders for the year in which that December 31 falls.
A portion of the dividends from the Fund's investment company taxable income
(whether paid in cash or reinvested in additional shares) may be eligible for
the dividends-received deduction allowed to corporations. The eligible portion
may not exceed the aggregate dividends received by the Fund from U.S.
corporations. However, dividends received by a corporate shareholder and
deducted by it pursuant to the dividends-received deduction are subject
indirectly to the alternative minimum tax.
If Fund shares are sold at a loss after being held for six months or less, the
loss will be treated as long-term, instead of short-term, capital loss to the
extent of any capital gain distributions received on those shares. Investors
also should be aware that if shares are purchased shortly before the record date
for any dividend or other distribution, the shareholder will pay full price for
the shares and receive some portion of the price back as a taxable distribution.
The Fund will be subject to a nondeductible 4% excise tax ("Excise Tax") to the
extent it fails to distribute by the end of any calendar year substantially all
of its ordinary income for that year and capital gain net income for the
one-year period ending on October 31 of that year plus certain other amounts.
FOREIGN TAXES
Dividends and interest received by the Fund may be subject to income,
withholding or other taxes imposed by foreign countries and U.S. possessions
that would reduce the yield on its securities. Tax conventions between certain
countries and the United States may reduce or eliminate these foreign taxes,
however, and many foreign countries do not impose taxes on capital gains in
respect of investments by foreign investors. If more than 50% of the value of
the Fund's total assets at the close of its taxable year consists of securities
of foreign corporations, the Fund will be eligible to, and may, file an election
with the Internal Revenue Service that will enable its shareholders, in effect,
to receive the benefit of the foreign tax credit with respect to any foreign
income taxes paid by it. Pursuant to the election, the Fund will treat those
taxes as dividends paid to its shareholders and each shareholder will be
required to (1) include in gross income, and treat as paid by him, his
proportionate share of those taxes, (2) treat his share of those taxes and of
any dividend paid by the Fund that represents income from foreign sources as his
own income from those sources, and (3) either deduct the taxes deemed paid by
him in computing his taxable income or, alternatively, use the foregoing
information in calculating the foreign tax credit against his federal income
tax. The Fund will report to its shareholders shortly after each taxable year
their respective shares of the Fund's income from sources within, and taxes paid
to, foreign countries if it makes this election.
PASSIVE FOREIGN INVESTMENT COMPANIES
The Fund may invest in the stock of "passive foreign investment companies"
("PFICs"). A PFIC is a foreign corporation that, in general, meets either of the
following tests: (1) at least 75% of its gross income is passive or (2) an
average of at least 50% of its assets produce, or are held for the production
of, passive income. Under certain circumstances, the Fund would be subject to
federal income tax on a portion of any "excess distribution" received on, or of
any gain from disposition of, stock of a PFIC (collectively "PFIC income"), plus
interest thereon, even if the Fund distributed the PFIC income as a taxable
dividend to its shareholders. The balance of the PFIC income would be included
in the Fund's investment company taxable income and, accordingly, would not be
taxable to the Fund to the extent that income is distributed to its
shareholders.
If the Fund does invest in a PFIC and elects to treat the PFIC as a "qualified
electing fund" ("QEF"), then in lieu of the foregoing tax and interest
obligation, the Fund would be required to include in income each taxable year
its pro rata share of the QEF's ordinary earnings and net capital gain (the
excess of net long-term capital gain over net short-term capital loss) -- which
most likely would have to be distributed to satisfy the Distribution Requirement
and to avoid imposition of
Statement of Additional Information Page 25
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
the Excise Tax -- even if those earnings and gain were not received by the Fund.
In most instances it will be very difficult, if not impossible, to make this
election because of certain requirements thereof.
The "Tax Simplification and Technical Corrections Bill of 1993," passed in May
1994 by the House of Representatives, would substantially modify the taxation of
U.S. shareholders of foreign corporations, including eliminating the provisions
described above dealing with PFICs and replacing them (and other provisions)
with a regulatory scheme involving entities called "passive foreign
corporations." Three similar bills were passed by Congress in 1991 and 1992 and
vetoed. It is unclear at this time whether, and in what form, the proposed
modifications may be enacted into law.
Pursuant to proposed regulations, open-end RICs, such as the Fund, would be
entitled to elect to "mark-to-market" their stock in certain PFICs.
"Marking-to-market," in this context, means recognizing as gain for each taxable
year the excess, as of the end of that year, of the fair market value of each
such PFIC's stock over the adjusted basis in that stock (including
mark-to-market gain for each prior year for which an election was in effect).
NON-U.S. SHAREHOLDERS
Dividends paid by the Fund to a shareholder who, as to the United States, is a
nonresident alien individual, nonresident alien fiduciary of a trust or estate,
foreign corporation or foreign partnership ("foreign shareholder") will be
subject to U.S. withholding tax (at a rate of 30% or lower treaty rate).
Withholding will not apply if a dividend paid by the Fund to a foreign
shareholder is "effectively connected with the conduct of a U.S. trade or
business," in which case the reporting and withholding requirements applicable
to domestic shareholders will apply. Distributions of net capital gain are not
subject to withholding, but in the case of a foreign shareholder who is a
nonresident alien individual, those distributions ordinarily will be subject to
U.S. income tax at a rate of 30% (or lower treaty rate) if the individual is
physically present in the United States for more than 182 days during the
taxable year and the distributions are attributable to a fixed place of business
maintained by the individual in the United States.
OPTIONS, FUTURES AND FOREIGN CURRENCY TRANSACTIONS
The use of hedging transactions, such as selling (writing) and purchasing
options and Futures Contracts and entering into Forward Contracts, involves
complex rules that will determine, for federal income tax purposes, the
character and timing of recognition of the gains and losses the Fund realizes in
connection therewith. Income from foreign currencies (except certain gains
therefrom that may be excluded by future regulations), and income from
transactions in options, Futures and Forward Contracts derived by the Fund with
respect to its business of investing in securities or foreign currencies, will
qualify as permissible income under the Income Requirement. However, income from
the disposition by the Fund of options and Futures (other than those on foreign
currencies) will be subject to the Short-Short Limitation if they are held for
less than three months. Income from the disposition by the Fund of foreign
currencies, and options, Futures and Forward Contracts on foreign currencies,
that are not directly related to the Fund's principal business of investing in
securities (or options and Futures with respect thereto) also will be subject to
the Short-Short Limitation if they are held for less than three months.
If the Fund satisfies certain requirements, any increase in value of a position
that is part of a "designated hedge" will be offset by any decrease in value
(whether realized or not) of the offsetting hedging position during the period
of the hedge for purposes of determining whether the Fund satisfies the
Short-Short Limitation. Thus, only the net gain (if any) from the designated
hedge will be included in gross income for purposes of that limitation. The Fund
intends that, when it engages in hedging transactions, it will qualify for this
treatment, but at the present time it is not clear whether this treatment will
be available for all those transactions. To the extent this treatment is not
available, the Fund may be forced to defer the closing out of certain options,
Futures, Forward Contracts or foreign currency positions beyond the time when it
otherwise would be advantageous to do so, in order for the Fund to continue to
qualify as a RIC.
Futures and Forward Contracts that are subject to section 1256 of the Code
(other than those that are part of a "mixed straddle") ("Section 1256
Contracts") and that are held by the Fund at the end of its taxable year
generally will be deemed to have been sold at market value for federal income
tax purposes. Sixty percent of any net gain or loss recognized on these deemed
sales, and 60% of any net gain or loss realized from any actual sales of Section
1256 Contracts, will be treated as long-term capital gain or loss, and the
balance will be treated as short-term capital gain or loss. Section 988 of the
Code also may apply to gains and losses from transactions in foreign currencies,
foreign-currency-denominated debt securities and options, futures and Forward
Contracts and options on foreign currencies. Each section 988 gain or loss
generally is computed separately and treated as ordinary income or loss. In the
case of overlap between sections 1256 and 988, special provisions determine the
character and timing of any income, gain or loss. The Fund attempts to monitor
section 988 transactions to minimize any adverse tax impact.
Statement of Additional Information Page 26
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
The foregoing is a general and abbreviated summary of certain U.S. federal
income tax considerations affecting the Fund and its shareholders. Investors are
urged to consult their own tax advisers for more detailed information and for
information regarding any foreign, state and local taxes applicable to
distributions received from the Fund.
- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
BIL GT GROUP
Other subsidiaries of the BIL GT Group include the Bank in Liechtenstein AG, an
international financial services institution founded in 1920, with over $17
billion in assets under administration and principal offices in Vaduz,
Liechtenstein, Bank in Liechtenstein (Frankfurt) GmbH, and Bilfinanz und
Verwaltung AG located in Zurich, Switzerland. In total, BIL GT Group encompasses
over $43 billion in assets under management and administration.
CUSTODIAN
State Street Bank and Trust Company ("State Street"), 225 Franklin Street,
Boston, Massachusetts 02110, acts as custodian of the Fund's assets. State
Street is authorized to establish and has established separate accounts in
foreign currencies and to cause securities of the Fund to be held in separate
accounts outside the United States in the custody of non-U.S. banks.
INDEPENDENT ACCOUNTANTS
The Fund's independent accountants are Coopers & Lybrand L.L.P., One Post Office
Square, Boston, Massachusetts 02109. Coopers & Lybrand L.L.P., conducts an
annual audit of the Fund, assists in the preparation of the Fund's federal and
state income tax returns and consults with the Company and the Fund as to
matters of accounting, regulatory filings, and federal and state income
taxation.
The audited financial statements of the Company included in this Statement of
Additional Information have been examined by Coopers & Lybrand L.L.P., as stated
in their opinion appearing herein and are included in reliance upon such opinion
given upon the authority of said firm as experts in accounting and auditing.
USE OF NAME
G.T. Capital has granted the Company the right to use the "G.T." name and has
reserved the right to withdraw its consent to the use of such name by the
Company and/or the Fund at any time, or to grant the use of such name to any
other company.
Statement of Additional Information Page 27
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
INVESTMENT RESULTS
- --------------------------------------------------------------------------------
The Fund's "Standardized Return," as referred to in the Prospectus (see "Other
Information -- Performance Information in the Prospectus"), is calculated
separately for Class A, Class B and Advisor Class shares of the Fund, as
follows: Standardized Return ("T") is computed by using the value at the end of
the period ("EV") of a hypothetical initial investment of $1,000 ("P") over a
period of years ("n") according to the following formula as required by the SEC:
P(1+T) to the (n)th power = EV. The following assumptions will be reflected in
computations made in accordance with this formula: (1) For Class A shares
deduction of the maximum sales charge of 4.75% from the $1,000 initial
investment; (2) for Class B shares, deduction of the applicable contingent
deferred sales charge imposed on a redemption of Class B shares held for the
period; (3) reinvestment of dividends and other distributions at net asset value
on the reinvestment date determined by the Board and (4) a complete redemption
at the end of any period illustrated.
The Fund's Standardized Returns for its Class A shares, stated as average
annualized total returns, at October 31, 1994, were as follows:
<TABLE>
<CAPTION>
PERIOD STANDARDIZED RETURN
- ---------------------------------------------------------------------------------------------------- ---------------------
<S> <C>
Year ended October 31, 1994......................................................................... (1.76)%
September 25, 1990 through
October 31, 1994................................................................................... 10.54%
</TABLE>
The Fund's Standardized Returns for its Class B shares, which were first offered
on October 22, 1992, stated as average annual total returns, for the periods
shown, were:
<TABLE>
<CAPTION>
PERIOD STANDARDIZED RETURN
- ---------------------------------------------------------------------------------------------------- ---------------------
<S> <C>
Year ended October 31, 1994......................................................................... (2.45)%
October 22, 1992 to October 31, 1994................................................................ 10.84%
</TABLE>
"Non-Standardized Return," as referred to in the Prospectus, is calculated for a
specified period of time by assuming the investment of $1,000 in Fund shares and
further assuming the reinvestment of all dividends and other distributions made
to Fund shareholders in additional Fund shares at their net asset value.
Percentage rates of return are then calculated by comparing this assumed initial
investment to the value of the hypothetical account at the end of the period for
which the Non-Standardized Return is quoted. As discussed in the Prospectus, the
Fund may quote non-standardized total returns that do not reflect the effect of
sales charges. Non-Standardized Returns may be quoted from the same or different
time periods for which Standardized Returns are quoted. The Fund's
Non-Standardized Returns for its Class A shares, stated as aggregate total
returns, at October 31, 1994, were as follows:
<TABLE>
<CAPTION>
NON-STANDARDIZED
PERIOD AGGREGATE TOTAL RETURN
- -------------------------------------------------------------------------------------------------- -----------------------
<S> <C>
Year ended October 31, 1994....................................................................... 3.14%
September 25, 1990
through October 31, 1994......................................................................... 58.38%
</TABLE>
The Fund's Non-Standardized Returns for its Class B shares which were first
offered on October 22, 1992, stated as aggregate total returns, for the period
shown, were as follows:
<TABLE>
<CAPTION>
PERIOD NON-STANDARDIZED RETURN
- ------------------------------------------------------------------------------------------------ -------------------------
<S> <C>
Year ended October 31, 1994..................................................................... 2.48%
October 22, 1992 through October 31, 1994....................................................... 27.18%
</TABLE>
The Fund's Non-Standardized Returns for its Class A shares, stated as average
annualized total returns, at October 31, 1994, were as follows:
<TABLE>
<CAPTION>
NON-STANDARDIZED
AVERAGE ANNUALIZED
PERIOD TOTAL RETURN
- ----------------------------------------------------------------------------------------------------- ---------------------
<S> <C>
Year ended October 31, 1994.......................................................................... 3.14%
September 25, 1990 through October 31, 1994.......................................................... 11.86%
</TABLE>
Statement of Additional Information Page 28
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
The Fund's Non-Standardized Returns for its Class B shares which were first
offered on October 22, 1992, stated as average annual total returns, for the
periods shown, were as follows:
<TABLE>
<CAPTION>
PERIOD NON-STANDARDIZED RETURN
- ------------------------------------------------------------------------------------------------ -------------------------
<S> <C>
Year ended October 31, 1994..................................................................... 2.48%
October 22, 1992 through October 31, 1994....................................................... 23.45%
</TABLE>
Standardized Returns and Non-Standardized Returns are not presented for the
Advisor Class shares because no shares of that class were outstanding during the
fiscal year ended October 31, 1994.
The Fund's investment results will vary from time to time depending upon market
conditions, the composition of the Fund's portfolio and operating expenses of
the Fund, so that current or past total return should not be considered
representative of what an investment in the Fund may earn in any future period.
These factors and possible differences in the methods used in calculating
investment results should be considered when comparing the Fund's investment
results with those published for other investment companies and other investment
vehicles. The Fund's results also should be considered relative to the risks
associated with the Fund's investment objective and policies. The Fund will
include performance data for all classes of shares of the Fund in any
advertisement or information including performance data for the Fund.
In advertising and sales materials, G.T. Global may make reference to or discuss
its products, services and accomplishments. Among these accomplishments are that
in 1983 G.T. Global provided assistance to the government of Hong Kong in
linking its currency to the U.S. dollar, and that in 1987 Japan's Ministry of
Finance licensed G.T. Management (Japan) Ltd. as one of the first foreign
discretionary investment managers for Japanese investors. Such accomplishments,
however, should not be viewed as an endorsement of G.T. Global by the government
of Hong Kong, Japan's Ministry of Finance or any other government or government
agency. Nor do any such accomplishments of G.T. Global provide any assurance
that the G.T. Global Mutual Funds' investment objectives will be achieved.
In addition, G.T. Global may in its radio, television and other advertising,
employ the use of sound effects such as, for example, sounds of electronic data
being communicated.
The Fund and G.T. Global may from time to time compare the Fund with the
following:
(1) Various Salomon Brothers World Bond Indices, which measure the total
return performance of high quality non-U.S. dollar denominated securities in
major sectors of the worldwide bond markets.
(2) The Shearson Lehman Government/Corporate Bond Index, which is a
comprehensive measure of all public obligations of the U.S. Treasury
(excluding flower bonds and foreign targeted issues), all publicly issued
debt of agencies of the U.S. Government (excluding mortgage-backed
securities), and all public, fixed rate, non-convertible investment grade
domestic corporate debt rated at least Baa by Moody's Investors Service Inc.
or BBB by Standard and Poor's Ratings Group, or, in the case of nonrated
bonds, BBB by Fitch Investors Service (excluding Collateralized Mortgage
Obligations).
(3) Average of Savings Accounts, which is a measure of all kinds of
savings deposits, including longer-term certificates (based on figures
supplied by the U.S. League of Savings Institutions). Savings accounts offer
a guaranteed rate of return on principal, but no opportunity for capital
growth. During a portion of the period, the maximum rates paid on some
savings deposits were fixed by law.
(4) The Consumer Price Index, which is a measure of the average change
in prices over time in a fixed market basket of goods and services (e.g.,
food, clothing, shelter, fuels, transportation fares, charges for doctors'
and dentists' services, prescription medicines, and other goods and services
that people buy for day-to-day living).
(5) Data and mutual fund rankings and comparisons published or prepared
by Lipper Analytical Data Services, Inc. ("Lipper"), CDA/Wiesenberger
Investment Company Services ("CDA/Wiesenberger") and/or other companies that
rank or compare mutual funds by overall performance, investment objectives,
assets, expense levels, periods of existence and/or other factors. In this
regard, the Fund may be compared to the Fund's "peer group" as defined by
Lipper, CDA/Wiesenberger and/or other firms, as applicable, or to specific
funds or groups of funds within or without such peer group. Morningstar is a
mutual fund rating service that also rates mutual funds on the basis of
risk-adjusted performance. Morningstar ratings are calculated from a fund's
three, five and ten year average annual returns with appropriate fee
adjustments and a risk factor that reflects fund performance relative to the
three-month U.S. Treasury bill monthly returns. Ten percent of the funds in
an investment category receive five stars and 22.5% receive four stars. The
ratings are subject to change each month.
Statement of Additional Information Page 29
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
(6) Bear Stearns Foreign Bond Index, which provides simple average
returns for individual countries and GNP-weighted index, beginning in 1975.
The returns are broken down by local market and currency.
(7) Ibbottson Associates International Bond Index, which provides a
detailed breakdown of local market and currency returns since 1960.
(8) Standard & Poor's 500 Composite Stock Price Index which is a widely
recognized index composed of the capitalization-weighted average of the
price of 500 of the largest publicly traded stocks in the U.S.
(9) Salomon Brothers Broad Investment Grade Index which is a widely used
index composed of U.S. domestic government, corporate and mortgage-backed
fixed income securities.
(10) Dow Jones Industrial Average.
(11) CNBC/Financial News Composite Index.
(12) Morgan Stanley Capital International World Indices, including, among
others, the Morgan Stanley Capital International Europe, Australia, Far East
Index ("EAFE Index"). The EAFE index is an unmanaged index of more than
1,000 companies of Europe, Australia and the Far East.
(13) Salomon Brothers World Government Bond Index and Salomon Brothers
World Government Bond Index-Non-U.S. are each a widely used index composed
of world government bonds.
(14) The World Bank Publication of Trends in Developing Countries (TIDE)
provides brief reports on most of the World Bank's borrowing members. The
World Development Report is published annually and looks at global and
regional economic trends and their implications for the developing
economies.
(15) Salomon Brothers Global Telecommunications Index is composed of
telecommunications companies in the developing and emerging countries.
(16) Datastream and Worldscope each is an on-line database retrieval
service for information including but not limited to international financial
and economic data.
(17) International Financial Statistics, which is produced by the
International Monetary Fund.
(18) Various publications and reports produced by the World Bank and its
affiliates.
(19) Various publications from the International Bank for Reconstruction
and Development/The World Bank.
(20) Various publications including but not limited to ratings agencies
such as Moody's Investors Services, Fitch Investors Service, Standard &
Poor's Ratings Group.
(21) Wilshire Associates which is an on-line database for international
financial and economic data including performance measure for a wide range
of securities.
(22) Bank Rate National Monitor Index, which is an average of the quoted
rates for 100 leading banks and thrifts in ten U.S. cities.
(23) International Finance Corporation (IFC) Emerging Markets Data Base
which provides detailed statistics on stock and bond markets in developing
countries.
(24) Various publications from the Organization for Economic Cooperation
and Development (OECD).
Indices, economic and financial data prepared by the research departments of
such financial organizations as Salomon Brothers, Inc., Lehman Brothers, Merrill
Lynch, Pierce, Fenner & Smith, Inc. J. P. Morgan, Morgan Stanley, Smith Barney
Shearson, S.G. Warburg, Jardine Flemming, Barings Securities, The Bank for
International Settlements, Asian Development Bank, Bloomberg, L.P. and Ibbottson
Associates may be used as well as information reported by the Federal Reserve
and the respective Central Banks of various nations. In addition, performance
rankings, ratings and commentary reported periodically in national financial
publications, included but not limited to Money Magazine, Smart Money, Global
Finance, EuroMoney, Financial World, Forbes, Fortune, Business Week, Latin
Finance, the Wall Street Journal, Emerging Markets Weekly, Kiplinger's Guide To
Personal Finance, Barron's, The Financial Times, USA Today, The New York Times,
Far Eastern Economic Review, The Economist and Investors Business Digest. Each
Fund may compare its performance to that of other compilations or indices of
comparable quality to those listed above and other indices which may be
developed and made available.
Statement of Additional Information Page 30
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
From time to time, the Fund and G.T. Global may refer to the number of
shareholders in the Fund or the aggregate number of shareholders in all G.T.
Global Mutual Funds or the dollar amount of Fund assets under management in
advertising materials.
G.T. Global believes the Fund is an appropriate investment for long-term
investment goals including, but not limited to funding retirement, paying for
education or purchasing a house. The Fund does not represent a complete
investment program and the investors should consider the Fund as appropriate for
a portion of their overall investment portfolio with regard to their long-term
investment goals.
G.T. Global believes that a growing number of consumer products, including, but
not limited to home appliances, automobiles and clothing, purchased by Americans
are manufactured abroad. G.T. Global believes that investing globally in the
companies that produce products for U.S. consumers can help U.S. investors seek
protection of the value of their assets against the potentially increasing costs
of foreign manufactured goods. Of course, there can be no assurance that there
will be any correlation between global investing and the costs of such foreign
goods unless there is a corresponding change in value of the U.S. dollar to
foreign currencies. From time to time, G.T. Global may refer to or advertise the
names of such companies although there can be no assurance that any G.T. Global
Mutual Fund may own the securities of these companies.
The Fund may compare its performance to that of other compilations or indices of
comparable quality to those listed above which may be developed and made
available in the future. The Fund may be compared in advertising to Certificates
of Deposit (CDs), the Bank Rate Monitor National Index, an average of the quoted
rates for 100 leading banks and thrifts in ten U.S. cities chosen to represent
the ten largest Consumer Metropolitan statistical areas, or other investments
issued by banks. The Fund differs from bank investments in several respects. The
Fund may offer greater liquidity or higher potential returns than CDs; but
unlike CDs, the Fund will have a fluctuating share price and return and is not
FDIC insured.
The Fund's performance may be compared to the performance of other mutual funds
in general, or to the performance of particular types of mutual funds. These
comparisons may be expressed as mutual fund rankings prepared by Lipper
Analytical Services, Inc. (Lipper), an independent service which monitors the
performance of mutual funds. Lipper generally ranks funds on the basis of total
return, assuming reinvestment of distributions, but does not take sales charges
or redemption fees into consideration, and is prepared without regard to tax
consequences. In addition to the mutual fund rankings, the Fund's performance
may be compared to mutual fund performance indices prepared by Lipper.
G.T. Global may provide information designed to help individuals understand
their investment goals and explore various financial strategies. For example,
G.T. Global may describe general principles of investing, such as asset
allocation, diversification and risk tolerance.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical returns
of the capital markets in the United States, including common stocks, small
capitalization stocks, long-term corporate bonds, intermediate-term government
bonds, long-term government bonds, Treasury bills, the U.S. rate of inflation
(based on the CPI), and combinations of various capital markets. The performance
of these capital markets is based on the returns of different indices.
G.T. Global Mutual Funds may use the performance of these capital markets in
order to demonstrate general risk-versus-reward investment scenarios.
Performance comparisons may also include the value of a hypothetical investment
in any of these capital markets. The risks associated with the security types in
any capital market may or may not correspond directly to those of the funds.
Ibbotson calculates total returns in the same method as the funds. The funds may
also compare performance to that of other compilations or indices that may be
developed and made available in the future.
In advertising materials, G.T. Global may reference or discuss its products and
services, which may include: retirement investing; the effects of dollar-cost
averaging and saving for college or a home. In addition, G.T. Global may quote
financial or business publications and periodicals, including model portfolios
or allocations, as they relate to fund management, investment philosophy, and
investment techniques.
The Fund may discuss its Quotron number, CUSIP number, and its current portfolio
management team.
From time to time, the Fund's performance also may be compared to other mutual
funds tracked by financial or business publications and periodicals. For
example, the fund may quote Morningstar, Inc. in its advertising materials.
Morningstar, Inc. is a mutual fund rating service that rates mutual funds on the
basis of risk-adjusted performance. In addition, the Fund may quote financial or
business publications and periodicals as they relate to fund management,
investment philosophy, and investment techniques. Rankings that compare the
performance of G.T. Global Funds to one another in appropriate categories over
specific periods of time may also be quoted in advertising.
Statement of Additional Information Page 31
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
The Fund may quote various measures of volatility and benchmark correlation,
such as beta, standard deviation and R(2) in advertising. In addition, the Fund
may compare these measures to those of other funds. Measures of volatility seek
to compare the Fund's historical share price fluctuations or total returns
compared to those of a benchmark. All measures of volatility and correlation are
calculated using averages of historical data.
The Fund may advertise examples of the effects of periodic investment plans,
including the principle of dollar cost averaging. In such a program, an investor
invests a fixed dollar amount in a fund at periodic intervals, thereby
purchasing fewer shares when prices are high and more shares when prices are
low. While such a strategy does not assure a profit or guard against loss in a
declining market, the investor's average cost per share can be lower than if
fixed numbers of shares are purchased at the same intervals. In evaluating such
a plan, investors should consider their ability to continue purchasing shares
through periods of low price levels.
Each Fund may be available for purchase through retirement plans or other
programs offering deferral of or exemption from income taxes, which may produce
superior after tax returns over time. For example, a $10,000 investment earning
a taxable return of 10% annually would have an after-tax value of $17,976 after
ten years, assuming tax was deducted from the return each year at a 39.6% rate.
An equivalent tax-deferred investment would have an after-tax value of $19,626
after ten years, assuming tax was deducted at a 39.6% rate from the deferred
earnings at the end of the ten-year period.
The Fund may describe in its sales material and advertisements how an investor
may invest in the G.T. Global Funds through various retirement plans that offer
deferral of income taxes on investment earnings and may also enable an investor
to make pre-tax contributions. Because of their advantages, these retirement
plans may produce returns superior to comparable non-retirement investments. The
Funds may also discuss these plans which include:
INDIVIDUAL RETIREMENT ACCOUNTS (IRAS): Any individual who receives earned income
from employment (including self-employment) can contribute up to $2,000 each
year to an IRA (or if less, 100% of compensation). If your spouse is not
employed, a total of $2,250 may be contributed each year to IRAs set up for you
and your spouse (subject to the maximum of $2,000 to either IRA). Some
individuals may be able to take an income tax deduction for the contribution.
Regular contributions may not be made for the year you become 70 1/2, or
thereafter. Please consult your tax advisor for more information.
ROLLOVER IRAS: Individuals who receive distributions from qualified retirement
plans (other than required distributions) and who wish to keep their savings
growing tax-deferred can rollover (or make a direct transfer of) their
distribution to a Rollover IRA. These accounts can also receive rollovers or
transfers from an existing IRA. If an "eligible rollover distribution" from a
qualified employer-sponsored retirement plan is not directly rolled over to an
IRA (or certain qualified plans), withholding at the rate of 20% will be
required for federal income tax purposes. A distribution from a qualified plan
that is not an "eligible rollover distribution," including a distribution that
is one of a series of substantially equal periodic payments, generally is
subject to regular wage withholding or withholding at the rate of 10% (depending
on the type and amount of the distribution), unless you elect not to have any
withholding apply. Please consult your tax advisor for more information.
SEP-IRAS AND SALARY-REDUCTION SEP-IRAS: Simplified employee pension (SEP) plans
and salary-reduction SEPs provide self-employed individuals (and any eligible
employees) with benefits similar to Keogh-type plans or 401(k) plans, but with
fewer administrative requirements and therefore potential lower annual
administration expenses.
403(B)(7) CUSTODIAL ACCOUNTS: Employees of public schools and most other
not-for-profit corporations can make pre-tax salary reduction contributions to
these accounts.
PROFIT-SHARING (INCLUDING 401(K)) AND MONEY PURCHASE PENSION PLANS: Corporations
can sponsor these qualified defined contribution plans for their employees. A
401(k) plan, a type of profit-sharing plan, additionally permit the eligible,
participating employees to make pre-tax salary reduction contributions to the
plan (up to certain limitations).
G.T. Global may from time to time in its sales methods and advertising discuss
the risks inherent in investing. The major types of investment risk are market
risk, industry risk, credit risk, interest rate risk and inflation risk. Risk
represents the possibility that you may lose some or all of your investment over
a period of time. A basic tenet of investing is the greater the potential
reward, the greater the risk.
From time to time, the Funds and G.T. Global will quote information including
but not limited to data regarding: individual countries, regions, world stock
exchanges, and economic and demographic statistics from sources G.T. Global
Statement of Additional Information Page 32
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
deems reliable including but not limited to the economic and financial data of
the referenced financial organizations such as:
1) Stock market capitalization: Morgan Stanley Capital International World
Indices, International Finance Corporation and Datastream.
2) Stock market trading volume: Morgan Stanley Capital International World
Indices, International Finance Corporation.
3) The number of listed companies: International Finance Corporation, G.T.
Guide to World Equity Markets, Salomon Brothers, Inc., S.G. Warburg and
Barings Securities.
4) Wage rates: U.S. Department of Labor Statistics and Morgan Stanley Capital
International World Indices.
5) International industry performance: Morgan Stanley Capital International
World Indices, Wilshire Associates and Salomon Brothers, Inc.
6) Stock market performance: Morgan Stanley Capital International World
Indices, International Finance Corporation and Datastream.
7) The Consumer Price Index and inflation rate: The World Bank, Datastream and
International Finance Corporation.
8) Gross Domestic Product (GDP): Datastream and The World Bank.
9) GDP growth rate: International Finance Corporation, The World Bank and
Datastream.
10) Population: The World Bank, Datastream and United Nations.
11) Average annual growth rate (%) of population: The World Bank, Datastream and
United Nations.
12) Age distribution within populations: Organization for Economic Cooperation
and Development and United Nations.
13) Total exports and imports by year: International Finance Corporation, The
World Bank and Datastream.
14) Top three companies by country or market: International Finance Corporation,
G.T. Guide to World Equity Markets, Salomon Brothers Inc., S.G. Warburg and
Barings Securities.
15) Foreign direct investments to developing countries: The World Bank and
Datastream.
In advertising and sales materials, G.T. Global may make reference to or discuss
its products, services and accomplishments. Among these accomplishments are that
in 1983 G.T. Global provided assistance to the government of Hong Kong in
linking its currency to the U.S. dollar, and that in 1987 Japan's Ministry of
Finance licensed G.T. Management (Japan) Ltd. as one of the first foreign
discretionary investment managers for Japanese investors. Such accomplishments,
however, should not be viewed as an endorsement of G.T. Global by the government
of Hong Kong, Japan's Ministry of Finance or any other government or government
agency. Nor do any such accomplishments of G.T. Global provide any assurance
that the G.T. Global Mutual Funds' investment objectives will be achieved.
THE G.T. ADVANTAGE
G.T. Capital has developed a unique team approach to its global money management
which we call the G.T. Advantage. G.T Capital's money management style combines
the best of the "top-down" and "bottom-up" investment manager strategies. The
top-down approach is implemented by G.T. Capital's Investment Policy Committee
which sets broad guidelines for asset allocation and currency management based
on G.T. Capital's own macroeconomic forecasts and research from our worldwide
offices. The bottom-up approach utilizes regional teams of individual portfolio
managers to implement the committee's guidelines by selecting local securities
that offer strong growth and income potential.
Statement of Additional Information Page 33
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
EQUITY MARKET DIVERSIFICATION
As indicated by the following table, a globally diversified equity portfolio for
the ten year period ended December 31, 1994, resulted in greater return and
reduced risk (as measured by price volatility) relative to a portfolio
consisting solely of U.S. equities. The following chart was prepared by G.T.
Capital. It uses the Morgan Stanley Capital International EAFE Index as a
"proxy" for the non-North America investment universe and the Standard & Poor's
500 Index as a "proxy" for the universe of U.S. stocks. All dividends and
distributions were assumed to be reinvested.
EQUITY MARKET DIVERSIFICATION
10 YEARS ENDED DECEMBER 31, 1994
<TABLE>
<CAPTION>
PORTFOLIO STANDARD AVERAGE ANNUAL
% NON-U.S./% U.S. DEVIATION (%) TOTAL RETURN (%)
- ------------------- --------------- -----------------
<S> <C> <C>
100/0 19.35 17.89
90/10 18.15 17.59
80/20 17.06 17.27
70/30 16.11 16.95
60/40 15.32 16.61
50/50 14.73 16.27
40/60 14.35 15.92
30/70 14.20 15.56
20/80 14.29 15.19
10/90 14.61 14.81
0/100 15.16 14.42
<FN>
- --------------
Source: Morgan Stanley Capital International (MSCI) Europe, Australia, Far East
(EAFE) Index vs. MSCI U.S. Index, December 31, 1994. Prepared by G.T. Capital
Management, Inc.
</TABLE>
Standard deviation of returns is a statistical measure of the degree to which a
value tends to vary from its average annual mean. In general, greater risk must
be assumed to generate greater returns. This data will not correspond to the
actual performance of any of the Global Mutual Funds. There is no guarantee that
stock market diversification will provide greater total return and/or less
volatility than non-diversification during a particular time.
As shown in more detail in the chart below, at February 1995, only 27%* of the
world's public companies meet the Fund's strict definition of the term blue
chip. And of those that do, a full 64% exist outside the United States. The
reported dividend yield on the MSCI World Index as of February 28, 1995 was
2.4%.
<TABLE>
<CAPTION>
ANNUAL
DIVIDEND NUMBER OF U.S. NON-U.S.
YIELD COMPANIES COMPANIES COMPANIES
- ------------ --------------- --------------- ---------------
<S> <C> <C> <C>
> 8% 15 6 9
7-8% 26 11 15
6-7% 42 14 28
5-6% 99 24 75
4-5% 162 42 120
3-4% 221 80 141
2.4-3% 146 76 70
2-2.4 % 108 41 67
1-2 % 363 284 79
< 1 % 532 134 398
</TABLE>
- --------------
Source: Morgan Stanley Capital International World Index, February 28, 1995
Statement of Additional Information Page 34
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
HISTORICAL WORLD BOND PERFORMANCE
The following chart shows the yield to maturity (including future interest
payments and principal repayment at par) of 10 year government bonds, as priced
by Salomon Brothers, Inc. This data is based on U.S. dollar values on December
31 of the years shown. The actual total returns of foreign bonds held to
maturity will differ depending on exchange rates during a bond's life.
GOVERNMENT BONDS
YEAR-END YIELDS TO MATURITY
<TABLE>
<CAPTION>
U.S. CANADA GERMANY JAPAN U.K. SWITZ.
--------- ----------- ------------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
1994.............................................. 7.82 9.14 7.62 4.57 8.71 5.22
1993.............................................. 6.35 6.61 5.54 3.18 6.39 4.06
1992.............................................. 6.67 7.95 7.27 4.70 8.16 5.85
1991.............................................. 6.70 8.26 7.92 5.51 9.80 6.30
1990.............................................. 8.09 10.27 8.70 6.53 10.93 6.37
1989.............................................. 7.90 9.63 7.27 5.57 10.58 5.67
1988.............................................. 9.19 10.17 6.54 4.70 10.07 4.11
1987.............................................. 8.86 10.09 6.56 4.90 9.65 3.74
1986.............................................. 7.23 8.75 6.05 5.30 10.54 4.32
1985.............................................. 9.01 9.65 6.28 6.18 10.96 4.46
<CAPTION>
NETH. FRANCE AUSTL.
--------- ----------- ---------
<S> <C> <C> <C>
1994.............................................. 7.75 8.27 9.99
1993.............................................. 5.56 5.60 6.68
1992.............................................. 7.29 8.09 8.95
1991.............................................. 8.33 8.40 9.35
1990.............................................. 8.98 10.00 12.04
1989.............................................. 7.59 8.93 12.93
1988.............................................. 6.46 8.43 12.85
1987.............................................. 6.74 9.82 12.84
1986.............................................. 6.25 8.87 13.27
1985.............................................. 6.81 10.10 14.86
</TABLE>
The following chart shows total returns as of December 31 for the years 1985
through 1994 on bonds issued by various governments. All returns are calculated
in U.S. dollars and include reinvestment of gross yields, and do not assure
deduction of any withholding taxes. This chart was prepared by G.T. Capital
based on Salomon Brothers, Inc. indexes of 10-year government bonds with
remaining maturities of at least one year.
GOVERNMENT BONDS
ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
AUSTRALIA BELGIUM CANADA FRANCE GERMANY ITALY JAPAN UK USA
--------- ------- ------ ------ ------- ------- ------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1994...................................... 6.88% 12.22% -9.86% 4.37% 9.98% 4.57% 8.88% -1.54% -3.36%
1993...................................... 15.66% 4.00% 12.01% 13.15% 6.70% 11.08% 27.58% 19.53% 10.69%
1992...................................... -0.26% 7.64% -0.42% 4.27% 5.94% -13.88% 10.84% -4.12% 7.21%
1991...................................... 23.49% 10.89% 21.59% 12.51% 9.75% 13.24% 22.46% 12.65% 15.30%
1990...................................... 16.24% n/a 7.69% 23.52% 16.36% n/a 7.83% 30.88% 8.62%
1989...................................... 5.62% n/a 16.23% 9.14% 6.35% n/a -14.26% -3.91% 14.40%
1988...................................... 28.80% n/a 19.41% 1.63% -7.12% n/a 3.04% 2.44% 7.07%
1987...................................... 28.99% n/a 10.00% 26.58% 29.38% n/a 38.12% 46.61% 1.93%
1986...................................... 16.64% n/a 15.72% 34.09% 37.17% n/a 40.09% 14.77% 15.73%
1985...................................... -12.06% n/a 14.80% 50.51% 43.02% n/a 36.85% 40.18% 20.94%
10 Year Average Annualized Returns from 12/85-12/94
12.28% N/A 10.32% 17.10% 14.81% N/A 16.88% 14.47% 9.64%
<FN>
- --------------
Source: Salomon Brothers, Inc. Countries Identified As "N/A" Were Not Part of
the Salomon Brothers World Government Bond Index During the Years Indicated.
</TABLE>
Statement of Additional Information Page 35
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
From time to time the Fund and G.T. Global may quote data for stock market
trading volume and number of listed companies from information provided by the
International Finance Corporation (IFC) for, but not limited to, the following
countries:
NUMBER OF LISTED COMPANIES AND TRADING VOLUME
<TABLE>
<CAPTION>
NUMBER OF ANNUAL
LISTED TRADING VOLUME
COMPANIES (US$ MILLIONS)
----------- ---------------
<S> <C> <C>
Canada............................................................................. 1,124 142,222
U.S................................................................................ 7,607 3,507,223
Argentina.......................................................................... 180 10,339
Brazil............................................................................. 550 57,409
Chile.............................................................................. 263 2,797
Colombia........................................................................... 89 732
Mexico............................................................................. 190 62,454
Venezuela.......................................................................... 93 1,874
Korea.............................................................................. 693 211,710
Philippines........................................................................ 180 6,785
Taiwan............................................................................. 183 43,395
India.............................................................................. 6,800 21,879
Indonesia.......................................................................... 174 9,158
Malaysia........................................................................... 410 153,661
Pakistan........................................................................... 653 1,844
Hong Kong.......................................................................... 450 131,550
Singapore.......................................................................... 178 81,623
Japan.............................................................................. 2,155 954,341
Australia.......................................................................... 1,070 67,711
New Zealand........................................................................ 136 6,785
Greece............................................................................. 143 2,713
Jordan............................................................................. 101 1,377
Nigeria............................................................................ 174 10
Portugal........................................................................... 183 4,835
Turkey............................................................................. 152 23,242
UK................................................................................. 1,646 423,526
France............................................................................. 472 174,283
Germany............................................................................ 426 302,985
<FN>
- --------------
Source: Emerging Stock Markets Factbook 1994, International Finance Corporation
(IFC), June 1994.
</TABLE>
From time to time the Fund and G.T. Global may also quote information similar to
that shown above from, but not limited to, other sources such as S.G. Warburg,
Salomon Brothers and Datastream.
Statement of Additional Information Page 36
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
From time to time the Fund and G.T. Global may quote information on
sector/industry stock market capitalization and total returns for, but not
limited to, the following Morgan Stanley Capital International industry indices:
MORGAN STANLEY CAPITAL INTERNATIONAL
INTERNATIONAL INDUSTRY INDICES DECEMBER 31, 1994 (US$ WITHOUT DIVIDENDS)
<TABLE>
<CAPTION>
ANNUALIZED RETURNS (%)
MARKET CAPITALIZATION ------------------------------------
(US$ BN) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
--------------------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C>
ENERGY
Energy Sources.................................. 447.6 5.40 4.05 2.35 10.72
Utilities -- Electrical & Gas................... 412.8 -11.94 -0.05 -1.03 9.88
Sector........................................ 860.4
MATERIALS
Building Materials & Components................. 107.9 -4.87 5.17 -1.34 13.68
Chemicals....................................... 303.5 15.59 7.33 2.47 14.06
Forest Products & Paper......................... 111.2 9.97 5.74 0.96 10.76
Metals -- Non Ferrous........................... 92.1 12.77 9.54 1.49 10.42
Metals -- Steel................................. 109.8 26.99 6.24 -7.78 13.56
Misc. Materials & Commodities................... 73.1 9.52 6.97 -0.72 12.00
Sector........................................ 797.6
CAPITAL EQUIPMENT
Aerospace & Military Technology................. 59.1 6.34 8.97 6.06 7.13
Construction & Housing.......................... 103.1 2.36 -5.42 -9.33 16.82
Data Processing & Reproduction.................. 107.0 22.96 -0.53 -3.43 -1.20
Electrical & Electronics........................ 264.9 3.77 7.35 2.80 11.80
Electronic Components & Instruments............. 177.2 15.59 7.33 2.47 14.06
Energy Equipment & Services..................... 20.7 -13.03 -3.86 -3.90 3.21
Industrial Components........................... 126.7 16.11 14.02 2.49 12.22
Machinery & Engineering......................... 177.8 18.97 9.29 0.32 14.45
Sector........................................ 1036.5
CONSUMER GOODS
Appliances & Household Durables................. 136.5 18.11 10.40 0.39 11.20
Automobiles..................................... 233.7 12.06 15.36 2.61 12.27
Beverages & Tobacco............................. 260.5 4.93 -1.30 6.57 18.26
Food & Household Products....................... 277.8 5.12 2.10 4.68 17.21
Health & Personal Care.......................... 517.4 9.54 -0.91 8.69 17.09
Recreation, Other Consumer Goods................ 93.5 9.20 4.78 1.49 9.86
Textiles & Apparel.............................. 30.9 5.21 -3.29 -5.32 11.12
Sector........................................ 1550.3
SERVICES
Broadcasting & Publishing....................... 145.4 0.80 13.97 5.08 13.77
Business & Public Services...................... 267.2 9.71 10.04 5.61 13.82
Leisure & Tourism............................... 114.3 -2.56 11.13 3.04 15.59
Merchandising................................... 389.4 -2.54 2.66 5.45 15.15
Telecommunications.............................. 375.5 -5.99 5.72 3.36 11.47
Transportation -- Airlines...................... 50.1 4.61 0.86 -3.68 10.67
Transportation -- Road & Rail................... 103.8 -0.70 3.59 -4.67 12.25
Transportation -- Shipping...................... 36.5 7.17 4.04 -4.12 15.00
Wholesale & International Trade................. 66.0 35.10 9.31 -3.01 14.63
Sector........................................ 1546.2
FINANCE
Banking......................................... 1008.9 0.71 4.63 -0.66 15.28
Financial Services.............................. 181.9 8.01 5.29 -2.93 13.77
Insurance....................................... 282.9 -2.55 5.06 1.34 13.21
Real Estate..................................... 110.6 -20.78 6.62 0.21 15.36
Sector........................................ 1584.3
MULTI INDUSTRY
Multi-Industry.................................. 237.6 -6.75 7.70 4.66 11.80
Sector........................................ 237.6
GOLD MINES
Gold Mines...................................... 37.8 -11.16 14.07 0.20 2.37
Sector........................................ 37.8
<FN>
- --------------
The Fund(s) and G.T. Global may also quote information from, but not limited to,
the International Finance Corporation (IFC), S.G. Warburg, Salomon Brothers,
World Scope, Bloomberg, Datastream and Wilshire Associates, Inc.
</TABLE>
The investment objectives and policies of the G.T. Global Mutual Funds and their
portfolios and performance will not correspond to the composition and
performance of MSCI industry indices.
Statement of Additional Information Page 37
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
From time to time the Fund and G.T. Global may quote information on stock market
capitalization and total returns for, but not limited to, the following Morgan
Stanley Capital International stock market indices:
MORGAN STANLEY CAPITAL INTERNATIONAL
INTERNATIONAL INDICES 12/31/94 (US$, GROSS DIVIDENDS REINVESTED)
<TABLE>
<CAPTION>
MARKET ANNUALIZED RETURNS (%)
CAPITALIZATION ------------------------------------
(US$BN) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C>
INTERNATIONAL INDICES
THE WORLD............................. 7,592.9 5.58 7.42 4.24 15.51
NORTH AMERICA......................... 2,918.2 1.73 6.07 8.52 13.94
EAFE.................................. 4,661.8 8.06 8.19 1.82 17.89
EUROPE 14............................. 2,084.1 2.66 8.46 6.98 18.99
NORDIC COUNTRIES...................... 156.2 20.57 11.62 5.06 19.79
PACIFIC............................... 2,577.6 13.03 7.93 -1.62 17.06
FAR EAST.............................. 2,436.8 13.45 7.78 -2.07 17.22
FREE INDICES
THE WORLD FREE........................ 7,602.4 5.57 7.43 4.27
EAFE FREE............................. 4,671.3 -4.17 7.57 1.78
EUROPE 14 FREE........................ 2,080.5 -3.09 8.28 7.11
EUROPE 14 FREE EX UK.................. -0.57 10.02 6.44
NORDIC COUNTRIES FREE................. 152.6 4.91 12.16 6.51
PACIFIC FREE.......................... 2,590.0 -5.04 7.06 -1.76
PACIFIC FREE EX JAPAN................. -18.65 14.34 14.00
FAR EAST FREE......................... -4.81 6.91 -2.18
SPECIAL AREAS
THE WORLD EX USA...................... 7.64 7.93 1.76 17.13
EAFE + CANADA......................... 7.65 7.89 1.76 17.29
KOKUSAI (WORLD EX JAPAN).............. 0.55 7.85 8.35 15.51
EASEA (EAFE EX JAPAN)................. -0.77 9.83 8.05 18.98
PACIFIC EX JAPAN...................... -13.99 18.42 15.31 18.80
THE WORLD EX THE UK................... 6.48 7.63 3.82 15.21
EAFE EX THE UK........................ 10.22 8.74 0.70 17.97
EUROPE 14 EX THE UK................... 1,351.6 5.27 10.22 6.08 19.87
THE WORLD EX AUSTRALIA................ 5.57 7.39 4.19 15.51
National Indices
AUSTRALIA............................. 122.8 6.48 9.48 8.37 15.98
AUSTRIA............................... 17.5 -6.05 2.74 0.40 23.31
BELGIUM............................... 48.5 9.43 10.92 7.23 24.90
CANADA................................ 168.1 -2.43 0.76 0.12 8.17
DENMARK............................... 34.4 4.25 0.09 3.17 17.17
FINLAND............................... 25.9 52.47 34.70 6.81
FINLAND FREE.......................... 25.9 52.47 33.65 7.77
FRANCE................................ 275.0 -4.70 6.20 4.23 20.83
GERMANY............................... 290.1 5.11 8.95 5.09 18.73
GREECE................................ 7.6 -0.78 -0.81 8.05
HONG KONG............................. 154.1 -28.90 26.79 27.18 26.50
IRELAND............................... 12.1 14.50 8.71 3.71
ITALY................................. 98.5 12.13 4.52 -1.54 17.14
JAPAN................................. 2,121.1 21.62 6.36 -3.43 16.86
MALAYSIA.............................. 105.3 -19.94 25.57 13.86
NETHERLANDS........................... 163.9 12.66 16.74 13.18 22.05
NEW ZEALAND........................... 18.1 10.27 23.39 7.57
NORWAY................................ 18.5 24.07 11.39 3.49 16.03
NORWAY FREE........................... 14.8 27.41 13.14 4.78
PORTUGAL.............................. 8.5 11.95 8.01 -3.48
SINGAPORE............................. 56.3 6.68 23.95 16.02 16.50
SINGAPORE FREE........................ 69.5 5.81 24.23 18.65
</TABLE>
Statement of Additional Information Page 38
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
<TABLE>
<CAPTION>
MARKET ANNUALIZED RETURNS (%)
CAPITALIZATION ------------------------------------
(US$BN) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C>
SPAIN................................. 80.0 -3.93 -0.08 0.37 20.05
SWEDEN................................ 77.4 18.80 12.22 5.37 21.43
SWEDEN FREE........................... 77.4 18.80 15.40 7.70
SWITZERLAND........................... 210.0 4.18 21.77 14.81 21.32
SWITZERLAND FREE...................... 210.0 4.18 21.97 14.85
UNITED KINGDOM........................ 732.6 -1.63 5.65 8.58 17.73
USA................................... 2,750.1 2.00 6.42 9.16 14.36
EAFE (GDP WEIGHTED)................... 8.21 9.65 3.97 19.91
EMERGING MARKETS
EMG (EMERGING MARKETS GLOBAL)......... 840.4 -1.07 20.41 9.52
EMG FAR EAST.......................... 469.4 1.05 21.99 2.43
EMG LATIN AMERICA..................... 281.0 -3.69 19.73 32.62
EMF (EMERGING MARKETS FREE)........... 594.2 -7.32 21.76 20.89
EMF FAR EAST.......................... 235.5 -13.97 26.90 13.12
EMF LATIN AMERICA..................... 268.7 0.64 20.66 32.23
INDIA................................. 55.2 9.93
INDONESIA............................. 22.1 -25.92 14.98 -2.15
KOREA................................. 121.5 23.67 18.17 0.26
MALAYSIA.............................. 105.3 -19.94 25.57 13.86
PAKISTAN.............................. 6.9 -7.09 0.00 0.00
PHILIPPINES........................... 20.9 0.80 47.51 21.44
PHILIPPINES FREE...................... 13.2 -7.88 41.69 23.46
SRI LANKA............................. 1.3 -3.03
TAIWAN................................ 129.0 20.78 19.40 -2.98
THAILAND.............................. 70.6 -9.03 35.86 17.47
ARGENTINA............................. 24.2 -23.63 -9.39 28.67
BRAZIL................................ 94.8 65.73 46.49 26.87
CHILE................................. 38.8 44.76 34.06 46.83
COLOMBIA.............................. 7.3 21.30
MEXICO................................ 108.4 -43.39 2.94 29.69
MEXICO FREE........................... 96.7 -40.55 3.53 32.47
PERU.................................. 4.3 45.42
VENEZUELA............................. 3.0 -34.14
VENEZUELA FREE........................ 2.4 -14.55
GREECE................................ 7.6 -0.78 -0.81 8.05
ISRAEL................................ 13.2
ISRAEL - DOMESTIC..................... 10.9
ISRAEL - NON DOMESTIC................. 2.3
JORDAN................................ 1.2 -8.70 15.66 10.60
PORTUGAL.............................. 8.5 11.95 8.01 -3.48
TURKEY................................ 9.3 -50.49 -4.23 -7.47
COMBINED FAR EAST FREE................ 2,580.2 12.07 8.44 -1.68
COMBINED FAR EAST EX JAPAN............ 679.8 -7.40 24.17 9.17
COMBINED FAR EAST FREE EX JAPAN....... 459.2 -17.48 26.91 20.14
EAFE + EMG............................ 5,396.8 6.42 8.79 2.22
EAFE + EMF............................ 5,150.7 5.91 8.39 2.25
ALL-COUNTRY WORLD INDEX............... 8,344.7 3.85 7.50 4.21
</TABLE>
The Fund and G.T. Global may also quote information similar to that shown above
from other sources, but not limited to, the International Finance Corporation
(IFC) S.G. Warburg, Salomon Brothers, Wilshire Associates, Inc. and Datastream.
Market capitalization is not a measure of investment performance. Accordingly,
the above market capitalization figures are not intended to illustrate
investment performance in any individual developing market. Although the period
from December 31, 1984 to December 31, 1994 was one of growing market
capitalization throughout the world, market capitalization in certain emerging
markets encountered periods of volatility rather than a steadily increasing
trend.
The investment objectives and policies of the G.T. Global Mutual Funds and their
portfolios and performance will not correspond to the composition and
performance of MSCI indices.
Statement of Additional Information Page 39
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
WAGE RATES
From time to time the Fund and G.T. Global may quote data on wage rates for, but
not limited to, the following countries:
<TABLE>
<CAPTION>
US$ PER
HOUR
-----------
<S> <C>
Germany.............................................................................................. $ 25.56
Switzerland.......................................................................................... $ 22.66
Japan................................................................................................ $ 19.20
Sweden............................................................................................... $ 17.91
U.S.................................................................................................. $ 16.79
Canada............................................................................................... $ 16.36
France............................................................................................... $ 16.31
Italy................................................................................................ $ 15.97
UK................................................................................................... $ 12.82
Australia............................................................................................ $ 12.25
Spain................................................................................................ $ 11.53
New Zealand.......................................................................................... $ 8.01
Singapore............................................................................................ $ 5.38
South Korea.......................................................................................... $ 5.37
Taiwan............................................................................................... $ 5.23
Asian NIE's.......................................................................................... $ 5.15
Portugal............................................................................................. $ 4.60
Hong Kong............................................................................................ $ 4.31
Mexico............................................................................................... $ 2.65
<FN>
- --------------
Source: U.S. Department of Labor, Bureau of Labor Statistics, International
Comparison of Hourly Compensation Costs for Production Workers in Manufacturing,
1993, Report 873, June 1994.
</TABLE>
G.T. Global and the Fund may also quote information similar to that shown above
from other sources such as, but not limited to, S.G. Warburg and Morgan Stanley
International.
Statement of Additional Information Page 40
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
From time to time, each Fund and G.T. Global may quote and compare real GDP
growth rates of emerging and established countries.
REAL GDP GROWTH RATES (ANNUAL PERCENT CHANGE)
<TABLE>
<CAPTION>
ESTABLISHED EMERGING
COUNTRIES COUNTRIES
----------- ---------
<S> <C> <C>
1993................................................................................... 1.2% 6.1%
1992................................................................................... 1.6% 5.9%
1991................................................................................... 0.6% 4.4%
1990................................................................................... 2.4% 3.7%
1989................................................................................... 3.3% 4.0%
1988................................................................................... 4.4% 5.3%
1987................................................................................... 3.2% 5.7%
1986................................................................................... 2.9% 5.0%
<FN>
- --------------
Source: International Monetary Fund, World Economic Outlook -- October 1994,
October 1994.
</TABLE>
Statement of Additional Information Page 41
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
From time to time the Fund and G.T. Global may quote information on the top
companies listed on an exchange or index for countries around the world such as,
but not limited to, the following:
<TABLE>
<CAPTION>
THREE LARGEST COMPANIES
<S> <C>
MEXICO Telmex
Banacci
Tlevisa
CHILE Telefonos
Endesa
Enersis
ARGENTINA YPF
Telefonica de Argentina
Telecom Arg. Stet-France Telecom.
BRAZIL Telebras
Electrobras
Petrobras
JAPAN Mitsubishi Bank
Industrial Bank of Japan
Toyota Motor
HONG KONG HSBC Holdings plc
Hong Kong Telecommunications
Sun Hung Kai Properties
SOUTH KOREA KEPCO
POSCO
Samsung Electronics
TAIWAN Cathjay Life Insurance Co. Ltd.
Hua Nan Commercial Bank
First Commercial Bank
SINGAPORE Singapore Telecom Ltd.
OCBC Bank Ltd.
Singapore Airlines Ltd.
MALAYSIA TNB
Telekom
Resorts
THAILAND Telecomasia
Bangkok Bank
Shinawatra
INDONESIA Barito Pacific Timber
Astra Int'l Inc
H M Sampoerna
PHILIPPINES San Miguel Corp. (A & B)
Philippine Long Distance Telephone Co.
Ayala Corp. (A & B)
AUSTRALIA BHP
News Corporation
National Australia Bank
<CAPTION>
THREE LARGEST COMPANIES
<S> <C>
NEW ZEALAND Telecom Corporation of New Zealand Ltd.
Carter Holt Harvey Ltd.
Fletcher Challenge Ltd - Ordinary Division
UNITED KINGDOM British Telecommunications
HSBC Holdings
Shell Transport & Trading Co. (The)
GERMANY Allianz AG Holding N-AKT
Siemens AG
Deutsche Bank AG
FRANCE Alcatel Alsthom
Elf Aquitaine
Eaux (Cie Gie des)
NETHERLANDS Royal Dutch
Unilever Cert.
Internationale Nederlanden Groep
SPAIN Endesa
Telefonica
Bayer AG
ITALY Generali Assicurazioni
Sip
Stet
SWITZERLAND Roche
Nestle
UBS
SWEDEN Astra
Ericsson
ASEA
DENMARK Novo Nordisk B
Den Danske Bank
Sophus Berendsen
NORWAY Norsk Hydro
Hafslund Nycomed
Kvaerner
FINLAND Nokia Corporation
Repola Ltd.
Kymmene Corporation
U.S. (NYSE) Exxon Corp.
General Electric Co.
Coca Cola Co.
CANADA General Motors
Mobil Corporation
Ford Motor Co.
<FN>
- ------------------
Source: The G. T. Guide to World Equity Markets 1994-1995. Euromoney
Publications Plc, 1994.
</TABLE>
From time to time G.T. Global and the Fund will quote information similar to
that shown above from sources other than G.T. Capital Management Inc. such as,
but not limited to, S.G. Warburg, Morgan Stanley Capital International, World
Scope and Wilshire Associates. There can be no assurance that any of the G.T.
Global Mutual Funds will own or continue to own the securities of the companies
listed above.
Statement of Additional Information Page 42
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
From time to time the Fund and G.T. Global may quote data for GDP, GDP Growth,
Population, Per Capita GDP, Total Exports, Total Imports and Inflation Rates
for, but not limited to, the following countries:
<TABLE>
<CAPTION>
GDP (US$ GDP GROWTH POPULATION TOTAL EXPORTS TOTAL IMPORTS INFLATION
MILLIONS) RATE (%) (MILLIONS) (US$ MILLIONS) (US$ MILLIONS) RATE (%)
-------------- ---------- ---------- -------------- -------------- --------
<S> <C> <C> <C> <C> <C> <C>
Hong Kong............................... 77,828 5.5 5.8 30,251 123,427 8.5
China................................... 506,075 13.1 1162.2 84,940 80,585 13.0
South Korea............................. 296,136 5.3 43.7 76,394 81,413 4.8
Taiwan.................................. n/a 5.7 n/a 88,337 70,071 2.9
Singapore............................... 46,025 9.8 2.8 63,386 72,067 2.4
Malaysia................................ 57,568 7.4 18.6 40,705 38,361 3.6
Indonesia............................... 126,364 6.5 184.3 33,815 27,280 9.7
Thailand................................ 110,337 7.8 58.0 32,473 40,466 3.3
Philippines............................. 52,462 1.8 64.3 9,790 15,465 7.6
India................................... 214,598 4.1 883.6 19,795 22,530 9.9
Pakistan................................ 41,904 5.1 119.3 7,264 9,360 8.7
Australia............................... 294,760 3.0 17.5 38,045 42,140 1.1
New Zealand............................. 41,304 3.7 3.4 9,338 9,200 1.6
Japan................................... 3,670,979 0.1 124.5 339,492 230,975 1.3
Brazil.................................. 360,405 5.0 153.9 35,956 23,115 2,103.3
Mexico.................................. 329,011 0.4 85.0 27,166 47,877 9.8
Argentina............................... n/a 6.0 33.1 12,235 14,864 10.6
Venezuela............................... 61,137 -1.0 20.2 13,997 12,222 38.7
Chile................................... 41,203 6.0 13.6 9,646 9,456 12.7
Portugal................................ 79,547 -0.8 9.8 18,541 30,482 6.8
Turkey.................................. 99,696 6.8 58.5 14,715 22,871 65.5
Poland.................................. 83,823 4.0 38.4 13,324 15,309 35.3
Hungary................................. 35,218 -1.6 10.3 10,700 11,078 22.5
Greece.................................. 67,278 n/a 10.3 9,842 23,407 14.0
United Kingdom.......................... 903,126 1.9 57.8 190,481 221,658 3.4
France.................................. 1,319,883 -0.7 57.4 231,452 238,299 2.1
Netherlands............................. 320,290 3.0 15.2 139,919 134,376 1.5
Spain................................... 574,844 -1.0 39.1 64,302 99,473 4.3
Italy................................... 1,222,962 -7.0 57.8 178,349 184,510 4.4
Switzerland............................. 241,406 -0.7 6.9 65,616 65,603 2.3
Sweden.................................. 220,834 -1.7 8.7 55,933 49,849 2.9
Norway.................................. 112,906 1.8 4.3 35,178 25,897 2.4
Finland................................. 93,869 -2.6 5.0 23,515 20,741 1.2
Denmark................................. 123,546 0.3 5.2 39,570 33,601 1.2
United States........................... 5,920,199 3.0 255.4 420,812 551,591 3.0
<FN>
- --------------
Sources: 1992 GDP, mid-1992 population, 1992 exports and 1992 imports, The World
Development Report 1994. The World Bank, June 1994; 1993 GDP Growth Rate and
1993 Inflation Rate, World Economic Outlook -- October 1994, International
Monetary Fund, October 1994.
</TABLE>
G.T. Global and each Fund may also quote information from other sources such as,
but not limited to, International Financial Statistics, an IMF publication, and
Trends in Developing Economies, a World Bank publication.
Statement of Additional Information Page 43
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
IMPORTANT POINTS TO NOTE ABOUT THE ABOVE DATA RELATING TO WORLD EQUITY AND BOND
MARKET PERFORMANCE AND EQUITY MARKET DIVERSIFICATION
The information contained above relating to foreign market performance and
diversification is based on sources believed to be reliable, but is neither
all-inclusive nor warranted as to accuracy by the Company or G.T. Capital. The
authors and publishers of such material are not to be considered as "experts"
under the Securities Act of 1933 on account of the inclusion of such information
herein.
A portion of the performance figures for each market includes the positive or
negative effects of the currency exchange rates effective at December 31 of each
year between the U.S. dollar and currency of the foreign market (e.g. Japanese
Yen, German Deutschemark, Hong Kong Dollar). A foreign currency which has
strengthened or weakened against the U.S. dollar will positively or negatively
affect the reported returns, as the case may be.
G.T. Global believes that the above information relating to foreign market
performance and diversification may be useful to investors considering whether
and to what extent to diversify their investments through the purchase of mutual
funds investing in securities on a global basis. However, this data is not a
representation of the past performance of the Fund, nor is it a prediction of
such performance. The performance of the Fund will differ from the historical
performance of the indices represented above. The performance of indices does
not take expenses into account, while the Fund incurs expenses in its operations
which will reduce performance. The Fund is actively managed, I.E. G.T. Capital,
as the Fund's investment manager, actively purchases and sells securities in
seeking the Fund's investment objective. Moreover, the Fund may invest a portion
of its assets in corporate bonds, while the above data relates only to
government bonds. Each of these factors will cause the performance of the Fund
to differ from the indices shown above.
Statement of Additional Information Page 44
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
DESCRIPTION OF DEBT RATINGS
- --------------------------------------------------------------------------------
DESCRIPTION OF BOND RATINGS
MOODY'S INVESTORS SERVICE, INC. ("Moody's") rates the debt securities issued
by various entities from "Aaa" to "C". Investment grade ratings are the first
four categories:
Aaa -- Best quality. These securities carry the smallest degree of
investment risk and are generally referred to as "gilt edge." Interest
payments are protected by a large or exceptionally stable margin, and
principal is secure. While the various protective elements are likely to
change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa -- High quality by all standards. They are rated lower than the best
bond because margins of protection may not be as large as in Aaa securities,
fluctuation of protective elements may be of greater amplitude, or there may
be other elements present which make the long-term risks appear somewhat
greater.
A -- Upper medium grade obligations. These bonds possess many favorable
investment attributes. Factors giving security to principal and interest are
considered adequate, but elements may be present which suggest a
susceptibility to impairment sometime in the future.
Baa -- Medium grade obligations. Interest payments and principal
security appear adequate for the present but certain protective elements may
be lacking or may be characteristically unreliable over any great length of
time. Such bonds lack outstanding investment characteristics and, in fact,
have speculative characteristics as well.
Ba -- Have speculative elements and their future cannot be considered to
be well assured. Often the protection of interest and principal payments may
be very moderate and thereby not well safeguarded during other good and bad
times over the future. Uncertainty of position characterizes bonds in this
class.
B -- Generally lack characteristics of the desirable investment.
Assurance of interest and principal payments or of maintenance of other
terms of the contract over any long period of time may be small.
Caa -- Poor standing. Such issues may be in default or there may be
present elements of danger with respect to principal or interest.
Ca -- Speculative in a high degree. Such issues are often in default or
have other marked shortcomings.
C -- Lowest rated class of bonds. Issues so rated can be regarded as
having extremely poor prospects of ever attaining any real investment
standing.
ABSENCE OF RATING: Where no rating has been assigned or where a rating has been
suspended or withdrawn, it may be for reasons unrelated to the quality of the
issue.
Should no rating be assigned, the reason may be one of the following:
1. An application for rating was not received or accepted.
2. The issue or issuer belongs to a group of securities that are not rated as a
matter of policy.
3. There is a lack of essential data pertaining to the issue or issuer.
4. The issue was privately placed, in which case the rating is not published in
Moody's publications.
Suspension or withdrawal may occur if new and material circumstances arise, the
effects of which preclude satisfactory analysis; if there is no longer available
reasonable up-to-date data to permit a judgement to be formed; if a bond is
called for redemption; or for other reasons.
Note: Moody's applies numerical modifiers 1, 2 and 3 in each generic ratings
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.
Statement of Additional Information Page 45
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
STANDARD & POOR'S RATINGS GROUP ("S&P") rates the securities debt of various
entities in categories ranging from "AAA" to "DD" according to quality.
Investment grade ratings are the first four categories:
AAA -- Highest rating. Capacity to pay interest and repay principal is
extremely strong.
AA -- High grade. Very strong capacity to pay interest and repay
principal. Generally, these bonds differ from AAA issues only in a small
degree.
A -- Have a strong capacity to pay interest and repay principal although
they are somewhat more susceptible to the adverse effects of change in
circumstances and economic conditions than debt in higher rated categories.
BBB -- Regarded as having adequate capacity to pay interest and repay
principal. These bonds normally exhibit adequate protection parameters, but
adverse economic conditions or changing circumstances are more likely to
lead to a weakened capacity to pay interest and repay principal than for
debt in higher rated categories.
BB, B, CCC, CC, C -- Debt rated "BB," "B," "CCC," "CC," and "C" are
regarded, on balance, as predominantly speculative with respect to capacity
to pay interest and repay principal in accordance with the terms of this
obligation. "BB" indicates the lowest degree of speculation and "C" the
highest degree of speculation. While such debt will likely have some quality
and protective characteristics, these are outweighed by large uncertainties
or major risk exposures to adverse conditions.
BB -- Has less near-term vulnerability to default than other speculative
issues; however, it faces major ongoing uncertainties or exposure to adverse
business, financial or economic conditions which could lead to inadequate
capacity to meet timely interest and principal payments. The "BB" rating
category is also used for debt subordinated to senior debt that is assigned
an actual or implied "BBB-" rating.
B -- Has a greater vulnerability to default but currently has the
capacity to meet interest payments and principal repayments. Adverse
business, financial or economic conditions will likely impair capacity or
willingness to pay interest and repay principal. The "B" rating category is
also used for debt subordinated to senior debt that is assigned an actual or
implied "BB" or "BB-" rating.
CCC -- Has a currently indefinable vulnerability to default, and is
dependent upon favorable business, financial and economic conditions to meet
timely payment of interest and repayment of principal. In the event of
adverse business, financial or economic conditions, it is not likely to have
the capacity to pay interest and repay principal. The "CCC" rating category
is also used for debt subordinated to senior debt that is assigned an actual
or implied "B" or "B-" rating.
CC -- Typically applied to debt subordinated to senior debt that is
assigned an actual or implied "CCC" rating.
C -- Typically applied to debt subordinated to senior debt which is
assigned an actual or implied "CCC-" debt rating. The "C" rating may be used
to cover a situation where a bankruptcy petition has been filed, but debt
service payments are continued.
C -- Reserved for income bonds on which no interest is being paid.
D -- In payment default. The "D" rating is used when interest payments
are not made on the date due even if the applicable grace period has not
expired, unless S&P believes that such payments will be made during such
grace period. The "D" rating also will be used upon the filing of a
bankruptcy petition if debt service payments are jeopardized.
PLUS (+) OR MINUS (-): The ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
NR: Indicates that no rating has been requested, that there is insufficient
information on which to base a rating, or that S&P does not rate a particular
type of obligation as a matter of policy.
DESCRIPTION OF COMMERCIAL PAPER RATINGS
MOODY'S employs the designations "Prime-1" and "Prime-2" to indicate
commercial paper having the highest capacity for timely repayment. Issuers rated
Prime-1 have a superior capacity for repayment of short-term promissory
obligations. Prime-1 repayment capacity normally will be evidenced by the
following characteristics: leading market positions in well-established
industries; high rates of return on funds employed; conservative capitalization
structures with moderate reliance on debt and ample asset protections; broad
margins in earnings coverage of fixed financial charges and high internal cash
generation; and well-established access to a range of financial markets and
assured sources of alternate liquidity. Issues rated Prime-2 have a strong
capacity for repayment of short-term promissory obligations. This normally will
be evidenced by many of the characteristics cited above, but to a lesser degree.
Earnings trends and coverage ratios,
Statement of Additional Information Page 46
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
while sound, will be more subject to variation. Capitalization characteristics,
while still appropriate, may be more affected by external conditions. Ample
alternate liquidity is maintained.
S&P ratings of commercial paper are graded into four categories ranging from
"A" for the highest quality obligations to "D" for the lowest. A -- Issues
assigned its highest rating are regarded as having the greatest capacity for
timely payment. Issues in this category are delineated with numbers 1, 2, and 3
to indicate the relative degree of safety. A-1 -- This designation indicates
that the degree of safety regarding timely payment is either overwhelming or
very strong. Those issues determined to possess overwhelming safety
characteristics will be denoted with a plus (++) sign designation. A-2 --
Capacity for timely payments on issues with this designation is strong; however,
the relative degree of safety is not as high as for issues designated "A-1."
COMMERCIAL PAPER RATINGS
The Fund may invest only in high quality commercial paper, i.e. commercial paper
rated Prime-1 by Moody's, A-1 by Standard & Poor's Ratings Group ("S&P"), or, if
unrated, judged by G.T. Capital to be of comparable quality. Issuers rated
Prime-1 by Moody's have, in Moody's judgment, a superior capacity for repayment
of short-term debt obligations. Prime-1 repayment capacity will normally be
evidenced by the following characteristics: leading market positions in well-
established industries; high rates of return on funds employed; conservative
capitalization structures with moderate reliance on debt and ample asset
protections; broad margins in earnings coverage of fixed financial charges and
high internal cash generation; and well-established access to a range of
financial markets and assured sources of alternate liquidity. Issues assigned
the A-1 rating by S&P are regarded by S&P as having the greatest capacity for
timely payment. This designation indicates that the degree of safety regarding
timely payment is either overwhelming or very strong.
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The audited financial statements of the Fund as of October 31, 1994, and for its
fiscal year then-ended appear on the following pages.
Statement of Additional Information Page 47
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
REPORT OF
INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
ANNUAL REPORT
To the Shareholders and Board of Directors of
G.T. Investment Funds, Inc.:
We have audited the accompanying statement of assets and liabilities of G.T.
Global Growth & Income Fund, one of the funds organized as a series of G.T.
Investment Funds, Inc., including the schedule of portfolio investments, as of
October 31, 1994 and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended and the financial highlights for each of the four years in the
period then ended and for the period from September 25, 1990 (commencement of
operations) to October 31, 1990. These financial statements and the financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and the financial
highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1994 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of
G.T. Global Growth & Income Fund as of October 31, 1994, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended and the financial highlights for each of
the four years in the period then ended and for the period from September 25,
1990 (commencement of operations) to October 31, 1990, in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
BOSTON, MASSACHUSETTS
DECEMBER 16, 1994
Statement of Additional Information Page 48
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
PORTFOLIO OF INVESTMENTS
October 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Equity Market % of Net
Investments Country Shares Value Assets(a)
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------
Finance (18.1%)
- -----------------------------------------------
Swiss Bank Corp.
(Bearer) SWTZ 34,795 $10,044,490 1.4
BANKS-MONEY CENTER
Union Bank of
Switzerland
(Bearer) (c) SWTZ 10,652 9,997,930 1.4
BANKS-MONEY CENTER
CS Holdings
(Bearer) SWTZ 19,700 8,624,641 1.2
BANKS-MONEY CENTER
National
Australian Bank
Ltd. AUSL 779,437 6,161,832 0.9
BANKS-MONEY CENTER
International
Nederland Groep
N.V. NETH 105,705 4,943,761 0.7
OTHER FINANCIAL
Aegon N.V. NETH 75,150 4,637,294 0.7
INSURANCE-LIFE
ABN-AMRO Holding
N.V.: NETH -- -- 0.6
BANKS-REGIONAL
Common -- 115,974 4,117,868 --
Conv.
Preferred, 6%
till 10/31/03 -- 4,300 149,366 --
IKB Deutsche
Industriebank
AG: GER -- -- 0.6
BANKS-REGIONAL
Common -- 19,310 3,339,719 --
New -- 4,290 733,407 --
Sun Hung Kai
Properties HK 494,500 3,775,786 0.6
REAL ESTATE
MAI PLC: UK -- -- 0.5
OTHER FINANCIAL
Conv.
Preferred,
5.9% till
12/31/49 -- 1,463,200 2,225,672 --
Common -- 374,000 1,494,104 --
S.G. Warburg
Group PLC UK 335,000 3,353,288 0.5
OTHER FINANCIAL
Generale de
Banque S.A. BEL 13,420 3,264,911 0.5
BANKS-MONEY CENTER
<CAPTION>
Equity Market % of Net
Investments Country Shares Value Assets(a)
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------
Commercial Union
PLC UK 361,550 $3,240,586 0.5
INSURANCE - MULTI-LINE
National
Westminster
Bank PLC UK 371,800 3,052,725 0.5
BANKS-MONEY CENTER
Banco de
Santander S.A. SPN 73,750 3,001,899 0.4
BANKS-REGIONAL
Gerrard &
National
Holdings PLC UK 375,880 2,834,162 0.4
SECURITIES BROKER
Hopewell
Holdings HK 2,631,000 2,706,930 0.4
REAL ESTATE
Kredietbank N.V. BEL 12,980 2,586,762 0.4
BANKS-REGIONAL
Henderson
Investment Ltd. HK 2,691,000 2,472,641 0.4
REAL ESTATE
M & G Group PLC UK 155,000 2,435,660 0.4
INVESTMENT MANAGEMENT
Urban Shopping
Centers, Inc. US 121,000 2,389,750 0.4
REAL ESTATE
Fortis Amev N.V. NETH 54,017 2,244,571 0.4
OTHER FINANCIAL
Westfield Trust: AUSL -- -- 0.3
REAL ESTATE
Units -- 1,031,728 1,839,771 --
Partly-Paid
till 6/30/95
(f) -- 678,389 383,071 --
Dresdner Bank AG GER 8,235 2,204,874 0.3
BANKS-MONEY CENTER
Sparebanken NOR
(Union Bank of
Norway) NOR 112,000 2,141,655 0.3
BANKS-REGIONAL
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 49
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
<TABLE>
<CAPTION>
Equity Market % of Net
Investments Country Shares Value Assets(a)
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Societe Generale
Paris FR 18,280 $2,063,470 0.3
BANKS-MONEY CENTER
Amoy Properties
Ltd. HK 1,581,500 1,964,851 0.3
REAL ESTATE
General Accident
Fire and Life
Assurance
Corporation PLC UK 200,000 1,916,912 0.3
INSURANCE - PROPERTY-CASUALTY
Lend Lease
Corporation
Ltd. AUSL 148,403 1,830,366 0.3
REAL ESTATE
Compagnie
Financiere de
Paribas S.A. FR 27,132 1,805,461 0.3
OTHER FINANCIAL
Lloyds Abbey
Life PLC UK 299,000 1,728,762 0.3
INSURANCE-LIFE
UAP Compagnie FR 62,367 1,645,510 0.2
INSURANCE - MULTI-LINE
Bank of Montreal CAN 88,000 1,635,355 0.2
BANKS-REGIONAL
Banco Popular
Espanol S.A. SPN 12,080 1,517,607 0.2
BANKS-MONEY CENTER
QBE Insurance
Group Ltd AUSL 408,000 1,424,772 0.2
INSURANCE - MULTI-LINE
Realty
Development
Corporation
Ltd. "A" HK 280,000 1,275,527 0.2
REAL ESTATE
Republic New
York Corp.,
Conv.
Preferred,
3.375% due
12/31/49 US 23,600 1,256,700 0.2
BANKS-MONEY CENTER
Deutsche Bank AG GER 2,184 1,076,528 0.2
BANKS-MONEY CENTER
Sedgwick Group
PLC UK 320,600 802,287 0.1
INSURANCE - MULTI-LINE
Commerzbank AG GER 2,250 473,708 0.1
BANKS-MONEY CENTER
--------------
122,816,942
--------------
<CAPTION>
Equity Market % of Net
Investments Country Shares Value Assets(a)
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------
Materials/Basic Industries (10.1%)
- -----------------------------------------------
Dow Chemical
Company US 129,100 $9,488,850 1.4
CHEMICALS
Broken Hill
Proprietary
Company Ltd. AUSL 486,343 7,465,522 1.1
MISC. MATERIALS & COMMODITIES
Akzo Nobel NETH 51,450 6,493,008 1.0
CHEMICALS
Solvay S.A. - A BEL 11,754 5,827,566 0.9
CHEMICALS
Monsanto Company US 74,800 5,694,150 0.8
CHEMICALS
Carter Holt
Harvey Limited NZ 2,047,000 4,968,079 0.7
FOREST PRODUCTS
WHX Corpo-
ration, Conv.
Preferred, 6.5%
till 12/31/49 US 90,100 4,876,660 0.7
METALS - STEEL
RWE AG GER 13,462 4,128,239 0.6
MISC. MATERIALS & COMMODITIES
Amcor Ltd. AUSL 578,546 3,851,529 0.6
PAPER/PACKAGING
BASF AG GER 18,080 3,828,154 0.6
CHEMICALS
Chesapeake
Corporation US 122,800 3,806,800 0.6
PAPER/PACKAGING
Pasminco Limited AUSL 1,400,000 2,350,843 0.3
METALS - NON-FERROUS
RTZ Corpo-
ration PLC
(Registered) UK 111,237 1,563,759 0.2
METALS - NON-FERROUS
Australian
National
Industries Ltd. AUSL 1,400,000 1,508,285 0.2
METALS - STEEL
Poseidon Gold AUSL 443,000 1,191,515 0.2
GOLD
St Laurent
Paperboard Inc. CAN 80,000 1,013,314 0.1
FOREST PRODUCTS
Kidston Gold
Mines Ltd. AUSL 298,700 810,056 0.1
GOLD
--------------
68,866,329
--------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 50
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
<TABLE>
<CAPTION>
Equity Market % of Net
Investments Country Shares Value Assets(a)
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Energy (10.0%)
- -----------------------------------------------
Elektrowatt AG SWTZ 45,508 $12,338,692 1.8
ELECTRICAL & GAS UTILITIES
Royal Dutch
Petroleum
Company NETH 80,550 9,368,056 1.4
OIL
Electrabel BEL 34,760 6,207,544 0.9
ELECTRICAL & GAS UTILITIES
Elf Aquitaine FR 65,475 4,840,341 0.7
OIL
Veba AG GER 13,170 4,415,406 0.7
ENERGY SOURCES
British Gas PLC UK 859,500 4,090,849 0.6
GAS PRODUCTION & DISTRIBUTION
Westcoast
Energy, Inc. CAN 246,000 4,048,447 0.6
GAS PRODUCTION & DISTRIBUTION
Grupe Bruxelles
Lambert S.A. BEL 31,767 3,905,357 0.6
OIL
Shell Transport
& Trading
Company PLC UK 324,700 3,903,410 0.6
OIL
Reunies
Electrobel &
Tractebel S.A. BEL 11,587 3,621,172 0.5
ELECTRICAL & GAS UTILITIES
Exxon
Corporation US 57,200 3,596,450 0.5
OIL
Chilectra S.A.
Sponsored ADR
(b)(d) CHLE 43,000 2,246,750 0.3
ELECTRICAL & GAS UTILITIES
Union Electrica
Fenosa S.A. SPN 316,000 1,455,546 0.2
ELECTRICAL & GAS UTILITIES
Pacific Gas and
Electric
Company US 63,600 1,438,950 0.2
ELECTRICAL & GAS UTILITIES
Santos Limited AUSL 478,000 1,406,405 0.2
OIL
Iberdrola S.A. SPN 205,000 1,352,459 0.2
ELECTRICAL & GAS UTILITIES
--------------
68,235,834
--------------
<CAPTION>
Equity Market % of Net
Investments Country Shares Value Assets(a)
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------
Services (8.8%)
- -----------------------------------------------
Telecom
Corporation of
New Zealand
Ltd.: NZ -- -- 0.9
TELEPHONE NETWORKS
Common -- 1,332,600 $4,646,123 --
ADR (b) -- 19,000 1,059,250 --
Dun & Bradstreet
Corporation US 96,700 5,669,038 0.8
BROADCASTING & PUBLISHING
McGraw-Hill,
Inc. US 67,000 5,008,250 0.7
BROADCASTING & PUBLISHING
J.C. Penney
Company, Inc. US 91,800 4,658,850 0.7
RETAILERS-OTHER
Tele Danmark AS
"B" DEN 79,394 4,576,529 0.7
TELEPHONE NETWORKS
Granada Group
PLC, Conv.
Preferred, 7.5%
due 4/30/03 UK 1,180,000 3,724,894 0.6
BROADCASTING & PUBLISHING
Pacific Telesis
Group US 116,700 3,690,638 0.5
TELEPHONE - REGIONAL/LOCAL
Compania de
Telefonos de
Chile ADR (b) CHLE 30,500 2,870,813 0.4
TELEPHONE NETWORKS
Cedar Fair, L.P. US 94,000 2,796,500 0.4
LEISURE & TOURISM
Royal PTT
Nederland N.V. NETH 86,335 2,748,186 0.4
TELEPHONE NETWORKS
Foodland
Associated Ltd. AUSL 770,500 2,530,359 0.4
RETAILERS-FOOD
British
Telecommuni-
cations PLC UK 359,000 2,316,413 0.3
TELEPHONE NETWORKS
Thorn EMI PLC UK 140,000 2,225,711 0.3
LEISURE & TOURISM
Cathay Pacific
Airways HK 1,393,000 2,064,171 0.3
TRANSPORTATION - AIRLINES
Australian
Consolidated
Press Ltd. AUSL 585,000 1,825,544 0.3
BROADCASTING & PUBLISHING
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 51
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
<TABLE>
<CAPTION>
Equity Market % of Net
Investments Country Shares Value Assets(a)
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Dairy Farm
International
Holdings Ltd. HK 1,390,000 $1,807,882 0.3
RETAILERS-FOOD
Bradlees, Inc. US 108,000 1,660,500 0.2
RETAILERS-APPAREL
Woolworth
Corporation US 100,000 1,550,000 0.2
RETAILERS-OTHER
Southwestern
Bell
Corporation US 27,500 1,151,563 0.2
TELEPHONE - LONG DISTANCE
Burswood
Property Trust AUSL 800,000 760,829 0.1
LEISURE & TOURISM
TNT Limited,
Conv.
Preferred, 8%
due 5/31/97 AUSL 320,000 589,643 0.1
TRANSPORTATION - ROAD & RAIL
--------------
59,931,686
--------------
Capital Goods (4.7%)
- -----------------------------------------------
General Electric
PLC UK 1,473,000 6,649,460 1.0
AEROSPACE/DEFENSE
BICC PLC UK 881,500 4,873,193 0.7
ELECTRICAL PLANT/EQUIPMENT
Mannesmann AG GER 16,592 4,436,895 0.7
MACHINERY & ENGINEERING
Rolls-Royce PLC UK 1,083,750 3,084,274 0.5
AEROSPACE/DEFENSE
Siemens AG GER 6,953 2,906,912 0.4
TELECOM EQUIPMENT
CSF Thomson FR 92,560 2,512,266 0.4
AEROSPACE/DEFENSE
Alcatel Alsthom FR 26,910 2,467,752 0.4
TELECOM EQUIPMENT
Trafalgar House
PLC: UK -- -- 0.3
MACHINERY & ENGINEERING
Conv.
Preferred, 6%
due 12/31/49 -- 1,236,000 2,233,857 --
Common -- 150,000 202,404 --
Lockheed
Corporation US 31,500 2,268,000 0.3
AEROSPACE/DEFENSE
--------------
31,635,013
--------------
<CAPTION>
Equity Market % of Net
Investments Country Shares Value Assets(a)
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------
Pharmaceuticals (2.1%)
- -----------------------------------------------
Warner-Lambert
Co. US 79,700 $6,077,125 0.9
Bayer AG GER 20,060 4,695,745 0.7
Bristol Myers
Squibb Co. US 52,700 3,076,363 0.5
--------------
13,849,233
--------------
Consumer Non-Durables (1.8%)
- -----------------------------------------------
Universal
Corporation US 153,800 3,460,500 0.5
TOBACCO
Booker PLC UK 344,500 2,293,286 0.3
FOOD
Bass PLC UK 202,500 1,854,760 0.3
BEVERAGES - ALCOHOLIC
Avon Products,
Inc. US 21,500 1,359,875 0.2
PERSONAL CARE/COSMETICS
Clorox Company US 22,700 1,225,800 0.2
HOUSEHOLD PRODUCTS
Associated
British Foods
Group UK 106,300 963,202 0.1
FOOD
Lion Nathan Ltd.
- Capital Stock
(c) AUSL 1,000,000 724,422 0.1
BEVERAGES - ALCOHOLIC
John Labatt Ltd. CAN 50,100 472,467 0.1
BEVERAGES - ALCOHOLIC
--------------
12,354,312
--------------
Multi-Industry/Conglomerate (1.7%)
- -----------------------------------------------
Brascan, Ltd.
Class A CAN 399,000 6,197,485 0.9
CONGLOMERATE
Hutchison
Whampoa Ltd. HK 565,000 2,610,392 0.4
CONGLOMERATE
Fletcher
Challenge Ltd. NZ 960,000 2,590,120 0.4
MULTI-INDUSTRY
--------------
11,397,997
--------------
Auto Parts (1.0%)
- -----------------------------------------------
GKN PLC UK 685,800 6,831,079 1.0
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Total Equity Investments
(cost $357,309,249)........................... 395,918,425 58.3
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 52
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
<TABLE>
<CAPTION>
Fixed Income Market % of Net
Investments Currency Principal Amount Value Assets(a)
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Government & Government Agency
Obligations (24.0%)
- ----------------------------------------------------------------------------
Australia (1.1%)
- -----------------------------------------------
Australian
Government, 9%
due 9/15/04 AUD 11,500,000 $7,762,222 1.1
Denmark (0.9%)
- -----------------------------------------------
Denmark Bullet,
7% due 12/15/04 DKK 42,000,000 6,227,512 0.9
France (0.6%)
- -----------------------------------------------
France O.A.T.,
Coupon Strip,
0% due 10/25/03 FRF 46,761,050 4,390,987 0.6
Germany (6.0%)
- -----------------------------------------------
Deutschland
Republic: DEM -- -- 3.4
9% due
10/20/00 -- 13,000,000 9,264,219 --
6.75% due
4/22/03 -- 11,500,000 7,217,621 --
6% due 6/20/16 -- 11,150,000 5,887,256 --
Treuhandanstalt: DEM -- -- 2.6
6.375% due
7/1/99 -- 14,500,000 9,361,871 --
7.75% due
10/1/02 -- 12,500,000 8,349,963 --
Italy (2.8%)
- -----------------------------------------------
BTPS, 8.5% due
1/1/99 ITL 32,600,000,000 19,124,344 2.8
Spain (1.6%)
- -----------------------------------------------
Spanish
Government,
10.25% due
11/30/98 ESP 1,375,000,000 10,708,617 1.6
Sweden (1.3%)
- -----------------------------------------------
Swedish
Government, 11%
due 1/21/99 SEK 62,000,000 8,800,490 1.3
United Kingdom (3.7%)
- -----------------------------------------------
Treasury: GBP -- -- 2.1
8% due 9/27/13 -- 4,500,000 6,980,649 --
7% due 11/6/01 -- 3,500,000 5,195,044 --
8% due 6/10/03 -- 1,200,000 1,865,186 --
<CAPTION>
Fixed Income Market % of Net
Investments Currency Principal Amount Value Assets(a)
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------
Conversion: GBP -- -- 1.6
9% due 7/12/11 -- 3,500,000 $5,908,826 --
9.5% due
4/18/05 -- 1,800,000 3,081,146 --
9% due 3/3/00 -- 1,000,000 1,655,013 --
United States (6.0%)
- -----------------------------------------------
U.S. Treasury
Notes: USD -- -- 6.0
7.25% due
5/15/04 -- 22,000,000 21,195,625 --
8.5% due
11/15/00 -- 8,700,000 9,088,781 --
6.375% due
7/15/99 -- 8,000,000 7,660,000 --
8% due 5/15/01 -- 2,350,000 2,397,734 --
7.875% due
8/15/01 -- 600,000 607,686 --
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Total Government & Government Agency
Obligations
(cost $163,760,393)........................... 162,730,792 24.0
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Corporate Bonds (6.2%)
- -----------------------------------------------
Belgium (0%)
- -----------------------------------------------
Kreditbank
Bankverein AG,
5.75% due
11/30/03 BEL 2,412,400 71,718 --
Canada (0.2%)
- -----------------------------------------------
St. Laurent
Paperboard
Inc., Conv.
Bond, 8% due
6/15/04 CAD 1,080,000 1,022,485 0.2
France (0%)
- -----------------------------------------------
Euro Disneyland
S.C.A., Conv.
Bond, 6.75% due
10/1/01 FRF 2,100,000 262,289 --
Germany (2.1%)
- -----------------------------------------------
Deutsche Bank
AG, 9% due
12/31/02
(Issued with
Warrants) DEM 5,625,000 5,530,333 0.8
Siemens Capital
Corp., 8% due
6/24/02 USD 3,310,000 4,418,850 0.7
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 53
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
<TABLE>
<CAPTION>
Fixed Income Market % of Net
Investments Currency Principal Amount Value Assets(a)
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Commerzbank AG: DEM -- -- 0.6
7% due
12/31/00 (e) -- 4,173,000 $3,775,215 --
8% due 6/1/07
(Issued with
warrants) -- 32,000 21,361 --
IKB Deutsche
Industriebank,
6.45% due
3/31/06 DEM 450,200 254,553 --
Japan (1.2%)
- -----------------------------------------------
Japan
Development
Bank, 6.5% due
9/20/01 JPY 700,000,000 7,971,138 1.2
Switzerland (0.1%)
- -----------------------------------------------
Electrowatt AG,
3% due 4/29/04 CHF 1,069,000 694,765 0.1
United Kingdom (2.6%)
- -----------------------------------------------
Land Securities
PLC, Conv.
Bond: GBP -- -- 1.2
9.375% due
7/31/04 -- 3,485,000 6,184,535 --
7% due 9/30/08 -- 1,075,000 1,811,008 --
Daily Mail &
General Trust,
Conv. Bond: GBP -- -- 0.9
5.75% due
9/26/03 -- 1,842,000 3,419,480 --
8.75% due
9/27/05 -- 1,082,000 2,964,262 --
Reckitt & Colman
Capital, Conv.
Bond, 9.5% due
3/31/05 GBP 926,000 2,146,884 0.3
S.G. Warburg
Group PLC,
Conv. Bond,
6.5% due 8/4/08
(Bearer) GBP 810,000 1,200,626 0.2
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Total Corporate Bonds
(cost $39,927,153)............................ 41,749,502 6.2
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
<CAPTION>
Fixed Income Market % of Net
Investments Currency Principal Amount Value Assets(a)
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------
Supranational Bond (1.5%)
- -----------------------------------------------
International
Bank of
Reconstruction
& Development,
4.5% due
3/20/03 (cost
$9,824,230) JPY 1,000,000,000 $10,181,743 1.5
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Other Security
- -----------------------------------------------
COMETS, 8% due
10/15/96 (cost
$2,049,375) (d) USD 70,000 2,012,500 0.3
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Total Fixed Investments
(cost $215,561,151)........................... 216,674,537 32.0
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
<CAPTION>
Market % of Net
Warrants (0.1%) Country Shares Value Assets(a)
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------
Grupe Bruxelles
Lambert S.A.
expires
12/20/98 (c) BEL 2,226 347,115 0.1
OIL
CS Holding
expires
12/16/94 (c) SWTZ 19,700 164,952 --
BANKS-MONEY CENTER
Electrowatt AG
expires 4/28/97
(c) SWTZ 5,345 74,591 --
ELECTRICAL & GAS UTILITIES
Commerzbank AG
expires
12/10/99 (c) GER 192 3,423 --
BANKS-MONEY CENTER
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Total Warrants (cost $0)....................... 590,081 0.1
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 54
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
<TABLE>
<CAPTION>
Short-Term Market % of Net
Investments Value Assets(a)
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Repurchase Agreements (8.3%)
- -----------------------------------------------
Dated October 31, 1994 with State Street Bank &
Trust Company, due November 1, 1994, for an
effective yield of 4.7% collateralized by:
$19,225,000 Federal Home Loan Mortgage
Corporation Note, 7.5% due 8/1/22. (Market
value $18,124,369, including accrued
interest.) (cost $18,002,350)...............
$18,002,350 2.7
$18,165,000 Federal Home Loan Mortgage
Corporation Note, 6.5% due 5/1/23. (Market
value $16,101,759, including accrued
interest.) (cost $16,002,089)...............
16,002,089 2.4
<CAPTION>
Short-Term Market % of Net
Investments Value Assets(a)
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------
$15,600,000 Federal Home Loan Mortgage
Corporation Note, 5.5% due 12/15/14. (Market
value $15,359,500, including accrued
interest.) (cost $15,285,996)...............
$15,285,996 2.3
$6,125,000 Federal National Mortgage
Association Note, 5.4% due 10/25/02. (Market
value $6,030,063, including accrued
interest.) (cost $6,000,783)................
6,000,783 0.9
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Total Short-Term Investments ($55,291,218).....
55,291,218 8.3
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Total Investments
(cost $628,161,618)*.......................... 668,474,261 98.7
Other Assets Less Liabilities.................. 8,614,787 1.3
- ----------------------------------------------------------------------------
Net Assets..................................... $677,089,048 100.0
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
<FN>
- --------------------------------------------------------------------------------
(a) Percentages indicated are based on net assets of $677,089,048.
(b) U.S. currency denominated.
(c) Non-income producing security.
(d) At October 31, 1994, the Fund owned the following restricted securities
constituting 0.6% of net assets which may not be publicly sold without
registration under the Securities Act of 1933. (Note 1)
Additional information on restricted securities is as follows:
Acquisition Market
Description Acquisition Dates Shares Cost Value
- ---------------------------------------- ------------------ ------ ----------- ------------
Chilectra S.A. Sponsored ADR............ 3/19/92 to 5/29/92 43,000 $ 1,380,414 $2,246,750
COMETS, 8% due 10/15/96................. 8/2/94 to 8/5/94 70,000 2,049,375 2,012,500
----------- ------------
Total................................. $ 3,429,789 $4,259,250
----------- ------------
----------- ------------
(e) The coupon rate shown on floating rate note represents the rate at period
end.
(f) The partly-paid shares were obtained through a 1-for-7 rights issue on
Westfield Trust Units ex-date 2/22/94. The issue price per new unit is
AUD2.50 whereby AUD1.00 was due on 3/31/94 and the remaining AUD1.50 is
due on 6/30/95.
Abbreviation:
ADR -- American Depository Receipt
COMETS -- Collateralized Market Equity Trust Securities (these are Units of
Equity Enhanced U.S. Treasuries Trust issued by Merrill Lynch & Co. The issue
price of each COMET was based upon the closing price per common share of
Newbridge Network Corporation on the date the COMETS were issued for initial
sale. The COMETS are not subject to redemption prior to maturity date.)
* For Federal income tax purposes, cost is $630,499,942 and appreciation
(depreciation) of securities is as follows:
Unrealized appreciation: $ 50,287,599
Unrealized depreciation: (12,313,280)
------------
Net unrealized
appreciation: $ 37,974,319
------------
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 55
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
The Fund's Portfolio of Investments at October 31, 1994, was concentrated in the
following countries:
<TABLE>
<CAPTION>
Percentage of Net Assets (a)
----------------------------------------------------------------------------
Fixed
Country Equity Income Warrants Short-Term Other Total
- ------------------------- ----------- ----------- ----------- ------------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Australia................ 5.5 1.1 6.6
Belgium.................. 3.8 0.1 3.9
Canada................... 1.9 0.2 2.1
Chile.................... 0.7 0.7
Denmark.................. 0.7 0.9 1.6
France................... 2.3 0.6 2.9
Germany.................. 4.9 8.1 13.0
Hong Kong................ 2.9 2.9
Italy.................... 2.8 2.8
Japan.................... 2.7 2.7
Netherlands.............. 5.1 5.1
New Zealand.............. 2.0 2.0
Norway................... 0.3 0.3
Spain.................... 1.0 1.6 2.6
Sweden................... 1.3 1.3
Switzerland.............. 5.8 0.1 5.9
UK....................... 10.3 6.3 16.6
U.S...................... 11.1 6.3 8.3 1.3 27.0
--- --- --- --- --- ---------
Total.................... 58.3 32.0 0.1 8.3 1.3 100.0
--- --- --- --- --- ---------
--- --- --- --- --- ---------
<FN>
- ----------------
(a) Percentages indicated are based on net assets of $677,089,048.
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 56
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
STATEMENT OF ASSETS
AND LIABILITIES
October 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Assets:
Investments in securities, at value (cost $628,161,618) (Note 1)..................................... $ 668,474,261
U.S. currency.............................................................................
$ 361
Foreign currency (cost $564,364)..........................................................
564,390 564,751
---------
Interest and interest withholding tax reclaims receivable............................................ 5,671,024
Dividends and dividend withholding tax reclaims receivable........................................... 2,077,055
Receivable for Fund shares sold...................................................................... 1,787,846
Receivable for securities sold....................................................................... 1,675,073
Prepaid assets....................................................................................... 23,339
Cash held as collateral for securities loaned (Note 1)............................................... 44,682,426
-------------
Total assets......................................................................................... 724,955,775
-------------
Liabilities:
Payable for securities purchased..................................................................... 1,002,555
Payable for Fund shares repurchased.................................................................. 951,451
Payable for investment management and administration fees (Note 2)................................... 539,268
Payable for service and distribution expenses (Note 2)............................................... 385,254
Payable for transfer agent fees (Note 2)............................................................. 84,845
Payable for registration fees........................................................................ 76,457
Payable for printing and postage expenses............................................................ 64,912
Payable for professional fees........................................................................ 38,013
Payable for custodian fees (Note 1).................................................................. 20,753
Payable for Directors' fees (Note 2)................................................................. 2,812
Accrued expenses..................................................................................... 17,981
Collateral for securities loaned (Note 1)............................................................ 44,682,426
-------------
Total liabilities.................................................................................... 47,866,727
-------------
Net assets............................................................................................. $ 677,089,048
-------------
-------------
Class A:
Net asset value and redemption price per share
($317,847,180 DIVIDED BY 51,160,653 shares outstanding).............................................. $ 6.21
-------------
-------------
Maximum offering price per share
(100/95.25 of $6.21)*................................................................................. $ 6.52
-------------
-------------
Class B:+
Net asset value and offering price per share
($359,241,868 DIVIDED BY 57,814,086 shares outstanding).............................................. $ 6.21
-------------
-------------
Net assets consist of:
Paid in capital (Note 4)............................................................................. $ 633,795,893
Accumulated net realized gain on investments, foreign currency conversions, and forward foreign
currency contracts.................................................................................. 2,699,248
Net unrealized appreciation of investments, dividends and dividend withholding tax reclaims
receivable, interest and interest withholding tax reclaims receivable, securities purchased and sold
and foreign currency conversions.................................................................... 40,593,907
-------------
Total -- representing net assets applicable to capital shares outstanding............................ $ 677,089,048
-------------
-------------
<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.
Statement of Additional Information Page 57
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
STATEMENT OF OPERATIONS
For the year ended October 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Investment income: (Note 1)
Interest income (net of foreign tax withheld of $153,755)............................................ $ 16,448,503
Dividend income (net of foreign tax withheld of $1,334,532).......................................... 12,762,283
------------
Total investment income.............................................................................. 29,210,786
------------
Expenses:
Investment management and administration fees (Note 2)............................................... 5,676,421
Service and distribution expenses (Note 2):
Class A.............................................................................. $ 1,041,993
Class B.............................................................................. 2,866,478 3,908,471
------------
Transfer agent fees (Note 2)......................................................................... 1,296,125
Custodian fees (Note 1).............................................................................. 368,928
Registration fees.................................................................................... 150,205
Printing and postage expenses........................................................................ 121,250
Professional fees.................................................................................... 83,078
Amortization of organizational expenses (Note 1)..................................................... 21,411
Directors' fees (Note 2)............................................................................. 11,462
Miscellaneous expenses............................................................................... 9,074
------------
Total expenses....................................................................................... 11,646,425
------------
Net investment income.................................................................................. 17,564,361
------------
Net realized and unrealized gain (loss) on investments and foreign currencies (Note 1):
Net realized gain on investments....................................................... 8,663,664
Net realized gain on foreign currency conversions and forward foreign currency
contracts............................................................................. 24,276
------------
Net realized gain.................................................................................... 8,687,940
Change in unrealized appreciation of dividends and dividend withholding tax reclaims
receivable, interest and interest withholding tax reclaims receivable, securities
purchased and sold, foreign currency conversions, and forward foreign currency
contracts............................................................................. (1,672,868)
Change in unrealized appreciation of investments....................................... (9,822,058)
------------
Net unrealized depreciation.......................................................................... (11,494,926)
------------
Net realized and unrealized loss on investments and foreign currencies................................. (2,806,986)
------------
Net increase in net assets resulting from operations................................................... $ 14,757,375
------------
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 58
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, 1994 OCTOBER 31, 1993
----------------- ----------------
<S> <C> <C>
Increase in net assets
Operations:
Net investment income.......................................................................
$ 17,564,361 $ 7,031,248
Net realized gain (loss) on investments, foreign currency conversions, and forward foreign
currency contracts.........................................................................
8,687,940 (1,931,026)
Change in unrealized appreciation (depreciation) of investments, dividends and dividend
withholding tax reclaims receivable and interest and interest withholding tax reclaims
receivable, securities purchased and sold, foreign currency conversions and forward foreign
currency contracts.........................................................................
(11,494,926) 49,026,615
----------------- ----------------
Net increase in net asssets resulting from operations.......................................
14,757,375 54,126,837
Class A:
Distributions to shareholders from: (Note 1)
Net investment income.......................................................................
(9,757,675) (7,660,557)
Net realized gain on investments............................................................
(3,136,804) 0
Sources other than net income...............................................................
0 (1,444,529)
Class B:
Distributions to shareholders from: (Note 1)
Net investment income.......................................................................
(7,806,686) (1,196,093)
Net realized gain on investments............................................................
(2,807,047) 0
Sources other than net income...............................................................
0 (352,269)
Capital share transactions: (Note 4)
Increase from capital shares sold and reinvested............................................
385,623,629 256,574,850
Decrease from capital shares repurchased....................................................
(101,979,754) (44,647,392)
----------------- ----------------
Net increase from capital share transactions................................................
283,643,875 211,927,458
----------------- ----------------
Total increase in net assets..................................................................
274,893,038 255,400,847
Net assets:
Beginning of year...........................................................................
402,196,010 146,795,163
----------------- ----------------
End of year.................................................................................
$ 677,089,048* $ 402,196,010*
-----------------
----------------- ----------------
----------------
<FN>
- ----------------
* Including undistributed net investment income of $0.
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 59
<PAGE>
G.T. GLOBAL GROWTH & INCOME 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+
--------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SEPTEMBER 25, 1990
YEAR ENDED OCTOBER 31, (COMMENCEMENT OF
------------------------------------ OPERATIONS) TO
1994 1993(D) 1992 1991 OCTOBER 31, 1990
-------- -------- ------- ------- ------------------
Per Share Operating Performance:
Net asset value, beginning of
period................................. $ 6.29 $ 5.28 $ 5.25 $ 4.77 $ 4.76
-------- -------- ------- ------- -------
Income from investment operations:
Net investment income................. 0.22 0.24* 0.21* 0.27* 0.01*
Net realized and unrealized gain
(loss) on investments................ (0.03) 1.05 0.10 0.47 0.00
-------- -------- ------- ------- -------
Net increase (decrease) from
investment operations................ 0.19 1.29 0.31 0.74 0.01
-------- -------- ------- ------- -------
Distributions:
Net investment income................. (0.21) (0.24) (0.14) (0.26) (0.00)
Net realized gain on investments...... (0.06) (0.00) (0.14) (0.00) (0.00)
Sources other than net income......... (0.00) (0.04) (0.00) (0.00) (0.00)
-------- -------- ------- ------- -------
Total distributions................. (0.27) (0.28) (0.28) (0.26) (0.00)
-------- -------- ------- ------- -------
Net asset value, end of period.......... $ 6.21 $ 6.29 $ 5.28 $ 5.25 $ 4.77
-------- -------- ------- ------- -------
-------- -------- ------- ------- -------
Total investment return (e)............. 3.14% 25.1% 5.9% 19.1% 0.2%(a)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $317,847 $251,428 $27,754 $71,376 $9,486
Ratio of net investment income to
average net assets..................... 3.30% 3.3%* 4.1%* 5.0%* 2.9%*(b)
Ratio of expenses to average net
assets................................. 1.67% 1.8%* 1.9%* 1.9%* 0.6%*(b)
Portfolio turnover rate+++.............. 117% 24% 53% 46% none
<CAPTION>
CLASS B++
---------------------------------------
<S> <C> <C> <C>
YEAR ENDED OCTOBER
31, OCTOBER 22, 1992
------------------ TO
1994 1993(D) OCTOBER 31, 1992(D)
-------- -------- -------------------
Per Share Operating Performance:
Net asset value, beginning of
period................................. $ 6.29 $ 5.28 $ 5.29
-------- -------- ------
Income from investment operations:
Net investment income................. 0.18 0.20 0.01
Net realized and unrealized gain
(loss) on investments................ (0.03) 1.05 (0.02)
-------- -------- ------
Net increase (decrease) from
investment operations................ 0.15 1.25 (0.01)
-------- -------- ------
Distributions:
Net investment income................. (0.17) (0.20) (0.00)
Net realized gain on investments...... (0.06) (0.00) (0.00)
Sources other than net income......... (0.00) (0.04) (0.00)
-------- -------- ------
Total distributions................. (0.23) (0.24) (0.00)
-------- -------- ------
Net asset value, end of period.......... $ 6.21 $ 6.29 $ 5.28
-------- -------- ------
-------- -------- ------
Total investment return (e)............. 2.48% 24.3% (0.2)%(a)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $359,242 $150,768 $ 280
Ratio of net investment income to
average net assets..................... 2.65% 2.6% N/A(c)
Ratio of expenses to average net
assets................................. 2.32% 2.5% N/A(c)
Portfolio turnover rate+++.............. 117% 24% 53%
<FN>
- ------------------
+ All capital shares issued and outstanding as of October 21, 1992 were
reclassified as Class A shares.
++ Commencing October 22, 1992, the Fund began offering Class B shares.
+++ Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
* Includes reimbursement by G.T. Capital Management, Inc. of Fund operating
expenses of $0.005, $0.02, $0.03 and $0.01 for the year ended October 31,
1993, 1992, 1991 and for the period from September 25, 1990 to October 31,
1990, respectively. Without such reimbursements, the expense ratios would
have been 1.93%, 2.20%, 2.46% and 2.40% and the net investment income to
average net assets would have been 3.2%, 3.70%, 4.40% and 1.04% for the
year ended October 31, 1993, 1992, 1991 and for the period from September
25, 1990 to October 31, 1990, respectively.
(a) Not annualized.
(b) Annualized.
(c) Ratios not meaningful due to short period of operation of Class B shares.
(d) These selected per share data were calculated based upon weighted average
shares outstanding during the year.
(e) Total investment return does not include sales charges.
</TABLE>
Statement of Additional Information Page 60
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
NOTES TO
FINANCIAL STATEMENTS
October 31, 1994
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
G.T. Global Growth & Income 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 non-diversified, open-end management investment
company. The Company has eleven series of shares in operation, each series
corresponding to a distinct portfolio of investments. 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) PORTFOLIO VALUATION
The Fund calculates the net asset value of and completes orders to purchase,
exchange or repurchase Fund shares 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 fluctuations, if any.
Options written or purchased by the Fund are valued at their last bid price in
the case of listed options, or at the average of the last bid prices obtained
from brokers in the case of over-the-counter options.
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
Company's Board of Directors.
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 rate, 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 Company's Board of Directors.
(B) FOREIGN CURRENCY TRANSLATION
The accounting records of the Fund are maintained in U.S. dollars. The market
values of foreign securities, currency holdings, other assets and liabilities
are recorded in the books and records of the Fund 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 accured or incurred.
The Fund 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 currency conversions, currency gains or losses realized between the
trade and settlement dates on securities transactions, the difference between
the amounts of dividends, interest, and foreign withholding taxes recorded on
the Fund's books, and the U.S. dollar equivalent of the amounts actually
received or paid. Net unrealized foreign exchange gains and losses arise from
changes in the value of assets and liabilities other than investments in
securities at fiscal year end, resulting from changes in the exchange rate.
Statement of Additional Information Page 61
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Fund, it is the Fund'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 paid to the Fund under each
agreement at its maturity.
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward") 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 fluctuates with changes in currency exchange rates. The
Forward is marked-to-market daily and the change in market value is recorded by
the Fund as an unrealized gain or loss. When the Forward is closed, the Fund
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. The Fund 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 Fund may enter into
Forwards in connection with planned purchases or sales of securities, or to
hedge the value of portfolio securities denominated in a foreign currency.
(E) 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 an identified
cost basis. 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
collection, income is recorded net of all withholding tax with any rebate
recorded when received. The Fund 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 Fund to subsequently invest at less
advantageous prices.
(F) PORTFOLIO SECURITIES LOANED
At October 31, 1994, stocks with an aggregate value of approximately $42,997,297
were on loan to brokers. The loans were secured by cash collateral of
$44,682,426. For international securities, cash collateral is received by the
Fund 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 Fund against loaned securities in an 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. For
the year ended October 31, 1994, the Fund received $202,785 of income from
securities lending which was used to offset the Fund's custody expenses.
(G) 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, and capital
gains, or unrealized appreciation of securities held, and excise tax on income
and capital gains.
(H) 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 Fund and timing differences.
(I) 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 $72,082. These expenses
are being amortized on a straightline basis over a five-year period.
(J) ADOPTION OF AICPA STATEMENT OF POSITION 93-2
As of November 1, 1993, the Fund adopted Statement of Position 93-2
"Determination, Disclosure, and Financial Statement Presentation of Income,
Capital Gain, and Return of Capital Distributions by Investment Companies."
Accordingly, permanent book and tax basis differences relating to shareholder
distributions have been reclassified to paid-in capital. As of November 1, 1993,
the cumulative effect of such differences totaling $4,296,311 was reclassified
from accumulated net realized gains on investments to paid-in capital. Net
investment income, net realized gain on investments and net assets were not
affected by this change. The Statement of Changes in Net Assets and the
Financial Highlights, for the prior periods, have not been restated to reflect
the change in presentation.
(K) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and
Statement of Additional Information Page 62
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
currency transactions that are not inherent with investments of domestic origin.
The Fund's investment 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.
(L) INDEXED SECURITIES
The Fund 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.
(M) RESTRICTED SECURITIES
The Fund 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. At the end of the period, restricted
securities (excluding 144A issues) are shown at the end of the Fund's Portfolio
of Investments.
2. RELATED PARTIES
G.T. Capital is the Fund's investment manager and administrator. The Fund pays
investment management and administration fees to G.T. Capital at the annualized
rate of 0.975% on the first $500 million of average daily net assets of the
Fund; 0.95% on the next $500 million; 0.925% on the next $500 million and 0.90%
on amounts thereafter. 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 expenses) 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 year ended October 31, 1994, G.T. Global retained
$442,313 of such sales charges. G.T. Global also makes ongoing shareholder
servicing and trail commission payments to dealers whose clients hold Class A
shares.
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 year ended October 31,
1994, G.T. Global collected CDSC's in the amount of $321,440. 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 distribution plans 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 0.35% 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.
Statement of Additional Information Page 63
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
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 1.85% and 2.50% 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 investment
management and 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.
3. PURCHASES AND SALES OF SECURITIES
For the year ended October 31, 1994, purchases and sales of investment
securities by the Fund, other than U.S. government obligations and short-term
investments, aggregated $628,582,751 and $401,593,709, respectively. Purchases
and sales of U.S. government obligations were $218,026,646 and $205,776,248,
respectively, for the year ended October 31, 1994.
4. CAPITAL SHARES
At October 31, 1994, 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
Strategic Income 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. Latin
America Growth Fund; 200,000,000 were classified as shares of G.T. Global Small
Companies Fund (inactive); 400,000,000 were classified as shares of G.T. Global
Telecommunications 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
Financial Services 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 High
Income Fund; 200,000,000 were classified as shares of G.T. Global Consumer
Products and Services Fund (inactive); 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>
YEAR ENDED YEAR ENDED
OCTOBER 31, 1994 OCTOBER 31, 1993
------------------------- -------------------------
CLASS A SHARES AMOUNT SHARES AMOUNT
---------- ------------- ---------- -------------
<S> <C> <C> <C> <C>
Shares sold.................................................................. 18,375,623 $ 115,141,878 17,871,139 $ 102,406,169
Shares issued in connection with reinvestment of distributions............... 1,777,962 10,875,825 1,274,901 7,192,425
---------- ------------- ---------- -------------
20,153,585 126,017,703 19,146,040 109,598,594
Shares repurchased........................................................... (8,951,499) (55,403,713) (6,941,766) (39,368,265)
---------- ------------- ---------- -------------
Net increase................................................................. 11,202,086 $ 70,613,990 12,204,274 $ 70,230,329
---------- ------------- ---------- -------------
---------- ------------- ---------- -------------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, 1994 OCTOBER 31, 1993
------------------------- -------------------------
CLASS B SHARES AMOUNT SHARES AMOUNT
---------- ------------- ---------- -------------
<S> <C> <C> <C> <C>
Shares sold.................................................................. 39,929,440 $ 250,659,375 24,574,230 $ 145,767,067
Shares issued in connection with reinvestment of distributions............... 1,464,527 8,946,551 203,658 1,209,189
---------- ------------- ---------- -------------
41,393,967 259,605,926 24,777,888 146,976,256
Shares repurchased........................................................... (7,536,482) (46,576,041) (874,323) (5,279,127)
---------- ------------- ---------- -------------
Net Increase................................................................. 33,857,485 $ 213,029,885 23,903,565 $ 141,697,129
---------- ------------- ---------- -------------
---------- ------------- ---------- -------------
</TABLE>
- --------------
FEDERAL TAX INFORMATION:
For Federal income tax purposes, the Fund had distributions from long-term
capital gains of $3,513,361.
Statement of Additional Information Page 64
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
NOTES
- --------------------------------------------------------------------------------
Statement of Additional Information Page 65
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
NOTES
- --------------------------------------------------------------------------------
Statement of Additional Information Page 66
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
NOTES
- --------------------------------------------------------------------------------
Statement of Additional Information Page 67
<PAGE>
G.T. GLOBAL GROWTH & INCOME 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 FUNDS, PLEASE CONTACT YOUR INVESTMENT COUNSELOR OR CALL G.T.
GLOBAL DIRECTLY AT 1- 800-824-1580.
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 the 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,
excluding Japan
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 FUNDS
G.T. GLOBAL GROWTH & INCOME FUND
Invests in blue-chip stocks and government bonds from around the world
FIXED 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
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY G.T. INVESTMENT FUNDS, INC., G.T. GLOBAL
GROWTH & INCOME FUND, G.T. CAPITAL MANAGEMENT, INC. OR G.T. GLOBAL FINANCIAL
SERVICES, INC. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR
SOLICITATION OF ANY OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON IN SUCH JURISDICTION TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER.
GROSX603
