G T INVESTMENT FUNDS INC, N-30D, 1996-01-08

G T INVESTMENT FUNDS INC
N-30D, 1996-01-08

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<PAGE>
LGT ASSET MANAGEMENT
A PIONEER IN
GLOBAL
INVESTING
GT GLOBAL
EMERGING
MARKETS
FUND

ANNUAL REPORT
OCTOBER 31, 1995

[LOGO]
<PAGE>
TABLE
OF CONTENTS

<TABLE>
<S> <C>
Report from the Fund
Managers and Key
Portfolio Holdings..... 1

Report of Independent
Accountants............ F-1

Financial Statements... F-2
</TABLE>

REPORT FROM THE FUND MANAGERS

The G.T. Global Emerging Markets Fund seeks long-term growth of capital. The
Fund primarily invests in equity securities of companies located in emerging
markets, which generally include every country except the U.S., Canada, Japan,
Australia, New Zealand and most of the countries of western Europe.
PERFORMANCE REVIEW
The Fund's total return for the 12 months ended October 31, 1995, was -23.04%
for Class A shares (-26.69% including the maximum 4.75% sales charge). Total
return for Class B shares was -23.37% (-27.04 % including the maximum effect of
the 5% contingent deferred sales charge). Total returns for the International
Financial Corp (IFC) Global and the IFC Free Indices were -20.7% and -23.5%,
respectively.(1) The total return for the Morgan Stanley Capital International
(MSCI) Emerging Markets Index was -18.99% for the period, while total return for
the MSCI Emerging Markets Free Index was -19.43%. The IFC Indices are
substantially similar to the MSCI Indices, except that they reflect larger
companies than the MSCI Indices. Therefore, we believe the IFC Indices are more
representative of the opportunities available to foreign investors. The Fund
performed in line with the IFC Free Index. The indices are not available for
investment, and do not include the effects of sales charges and professional
management fees. For additional performance information, please see page 7.
The Fund's performance in absolute terms was primarily affected by last
December's devaluation of the Mexican peso and the subsequent volatility across
virtually all emerging markets.
COUNTRY REVIEW(2)
SOUTH AFRICA
As we expected, South African financial markets have been buoyant and resilient
in the emerging markets' crisis. Over the period, the South African stock market
outperformed most emerging market indices by a substantial margin. In

- ------------------
(1) The MSCI Emerging Markets and IFC Indices are arithmetic averages, weighted
by market value, of the performance of securities listed on 23 emerging
market stock exchanges. They include the effect of reinvested dividends and
are measured in U.S. dollars.
(2) Geographic allocations of the Fund's holdings are subject to changing market
conditions.

1
<PAGE>
particular, industrial stocks proved to be especially rewarding. Moreover, the
currency (the rand) continued to appreciate despite general expectations to the
contrary. We remain largely optimistic on South Africa, notwithstanding a
possible consolidation over the short term following the gains of the past few
months. Although we feel the economy is likely to accelerate in 1996, inflation
is on a downward trend; so too, we believe, are interest rates.

BRAZIL
Brazil celebrated its first anniversary of a stable currency but continued to be
plagued by serious issues. Its traditional ebullience was inhibited by concerns
over its budget, trade deficit, inflation, a crisis in banking, and the slow
progress of constitutional reform. On the positive side, the Brazilian economy
grew at a rapid rate before slowing down sharply in recent months, inflation has
plunged from several thousand percent a year to less than 30% and unemployment
has fallen to its lowest point in a decade. We will consider taking a closer
look at Brazil when we feel reforms have made a more noteworthy impact.

MEXICO
As expected, the Mexican economy contracted sharply as a result of the fiscal
and monetary austerity measures implemented by the government in the aftermath
of the late 1994 peso devaluation. Third quarter GDP fell by 9.6% from the same
period in 1994, although recovery is expected over the remainder of the year.
The volatility in the peso since September reflects political uncertainties, but
Mexico has returned to a current account and budget surplus, foreign reserves
have grown to US$15 billion and it has secured access to an additional US$10
billion of reserve funding. Perhaps the worst has passed.

KOREA
Korea began the third quarter of 1995 by increasing the maximum limit on foreign
investment ownership of Korean companies to 15%, which brightened investor
sentiment, helping push the market up. Figures announced during July and August
suggest a healthy and moderate economic slowdown in the economy with a fall in
GDP growth and low stable inflation. With the improvement in the macroeconomic
outlook and stable interest rates, our view on the market remains positive.
Furthermore, as we expect a gradual slowdown in capital equipment investment,
the demand for machinery should abate, improving the balance of payments.

2
<PAGE>
THAILAND
Thailand is similar to other ASEAN countries. Throughout 1995, it has been
battling with inflation and a deteriorating current account deficit. The Thai
central bank has been the most proactive in the region in trying to cool down
its economy, and we are beginning to see some early signs of success. The rates
of loan growth, industrial production, and imports seem to have peaked. While it
is likely that the Thai central bank will have to continue to exercise restraint
for some time to come, there are grounds to believe that liquidity conditions
could begin to improve.

INDIA
In light of next year's forthcoming elections, the government's agenda appeared
more focused on enhancing subsidies and infrastructure spending rather than
prudent economic management and deregulation. While the government's spending
spree has already taken a toll on the budget deficit and will most likely have
some adverse implications over the long run, it has resulted in an economic boom
in the short term. Industrial production has surged and this year's GDP growth
rate is expected to be 5%, with a similar figure forecasted for 1996.

MALAYSIA
With the government suppressing inflation through price controls, the economy's
overheating is showing up in a sharp deterioration in the trade and current
account. High rates of investment and personal consumption continue to fuel
rapid growth. For 1995, GDP is forecasted to grow at 9.2% year-on-year; since
1988, the economy has expanded by more than 7.5% per year. The government has
been careful not to raise interest rates in order to avoid hot money, but may be
prompted to do so by excess liquidity concerns.

PORTFOLIO STRATEGY
During the early part of the period, the focus of our investment strategy was on
non-dollar bloc countries (countries whose currencies are not linked to the
dollar), South Korea and India, in particular. This benefited the Fund to a
certain extent, enabling it to avoid some, but not all, of the turbulence in
Latin America.

3
<PAGE>
The broad thrust of our policy to underweight Southeast Asia proved largely
correct during the third quarter of the year as those economies continued to
suffer from the symptoms of overheating. In contrast, under current market
conditions, we remain positive in North Asia largely because we expect
corporates may be a net beneficiary of a weak yen as the cost of their imports
from Japan fall. Within Latin America we will continue to hold a small
percentage of the Fund's assets in Argentina and Brazil, and hold a relatively
larger exposure to Mexico and Chile.

We believe South African economic and corporate fundamentals will continue to
surprise positively.

OUTLOOK
Looking forward, we believe U.S. interest rates are likely to remain steady or
fall slightly; despite an expected pickup in economic activity in Europe and
Japan in 1996-7, global inflationary pressures should be well subdued. With
reasonably stable U.S. yields and the recent strong performance of U.S.
equities, the merits of individual emerging countries and companies should come
back into focus.

CHRISTIAN WIGNALL JONATHAN CHEW
CHIEF INVESTMENT OFFICER PORTFOLIO MANAGER
GLOBAL EQUITIES LONDON
SAN FRANCISCO JAMES BOGIN
SECURITY SELECTION FOR LATIN
AMERICA
SAN FRANCISCO
JAMES LEGAT
SECURITY SELECTION FOR EUROPE AND
AFRICA
LONDON

NOVEMBER 20, 1995

G.T. GLOBAL EMERGING MARKETS FUND

4
<PAGE>
KEY PORTFOLIO HOLDINGS*

ISCOR SOUTH AFRICA
Iscor is South Africa's largest steel producer, with about 75% of the market. In
our view, low operating margins, new management, strong domestic product demand
and an improving export market could lead to a significant rise in earnings over
the medium term. Steel equities are also close to the trough of their cycle.

CEMEX MEXICO
Cemex, the largest producer of cement in Mexico, sells its ready-mix concrete
and aggregates in 54 countries and has made respectable gains in cutting costs.
Although the Mexican economy has slowed, the company has profitably diversified
into Spain. Cemex has also made gains in cutting costs. In addition, the company
constructs and operates hotels in Mexico.

SAMSUNG ELECTRONICS SOUTH KOREA
Samsung is South Korea's largest integrated electronics company and exporter,
manufacturing and exporting a wide range of consumer and industrial electronic
equipment and products. We expect profits to increase significantly over the
next two years as a result of the relative weakness of the Korean won, offshore
expansion and research and development (8% of sales).

SAPPI SOUTH AFRICA
SAPPI is an integrated forest products company with mills in South Africa,
Swaziland, the UK and Germany. The majority of the company's domestic lumber
requirements are harvested from its own forests. We expect a recovery in pulp
and paper prices as we move into 1996-7, as well as significant growth in
domestic demand, to lead to a strong cyclical recovery in earnings.

PANAMERICAN BEVERAGES MEXICO
Panamco, which is classified as a Mexican holding, is the largest soft drink
bottler in Latin America and the largest Coca-Cola bottler outside of the United
States. The company's market territory has a population of about 70 million
people.

SOUTH AFRICAN BREWERIES SOUTH AFRICA
South African Breweries has interests in brewing (half the company's profits
come from beer sales) and fruit juices and is also a Coca-Cola bottler. We
expect profits to increase over the next several years as a result of continuing
improvement in

- --------------
* There can be no assurance the Fund will continue to hold these or any other
securities mentioned in this report.

5
<PAGE>
the South African economy, which should enable consumers to purchase more of
these products.

HSBC HOLDINGS PLC HONG KONG
We view HSBC Holdings as providing good exposure to the turnaround of the
Chinese economy, and Hong Kong's own recovery following the fall in U.S. bond
yields. We expect lower bond trading losses and bad debt provisions to further
enhance the company's earnings growth.

SIAM COMMERCIAL BANK THAILAND
Siam Commercial Bank is Thailand's fourth largest commercial bank and has
benefited from a recent change in management strategy. Going forward, we believe
the prime quality of this bank will make it one of the first to receive foreign
investor attention when the current tight monetary policy in Thailand is
relaxed.

MALBAK NPV SOUTH AFRICA
Malbak is one of the largest industrial companies in South Africa, deriving most
of its income and revenue from pharmaceutical, food processing, packaging and
branded consumer products. Malbak has a conservative balance sheet and little
debt. We expect income growth during the next couple of years to be about 20%.

KOREA ELECTRIC POWER SOUTH KOREA
KEPCO, the monopoly provider of electricity in Korea, is one of the largest
integrated utility companies in the world. Its tariff structure is set by the
government to provide a fair rate of return on assets and to encourage further
investment in capacity. To keep up with Korea's rapid pace of economic
development, KEPCO plans to increase its capacity base by 61% by 1998 and to
double capacity by 2002.

6
<PAGE>
G.T. GLOBAL EMERGING MARKETS FUND
PORTFOLIO SUMMARY

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
PERFORMANCE SUMMARY
<S> <C> <C> <C>
Month G.T. Global Emerging Markets Fund MSCI Emerging Markets Global Index IFC Global Composite Index
05/18/92 9,525 10,000 10,000
05/31/92 9,550 9,974 9,845
06/30/92 9,358 9,273 9,470
07/31/92 9,333 9,063 9,068
08/31/92 9,100 8,680 8,886
09/30/92 8,942 8,500 8,689
10/31/92 9,258 9,033 9,129
11/30/92 9,075 9,091 9,080
12/31/92 9,034 9,181 9,167
01/31/93 9,269 9,136 9,105
02/28/93 9,529 9,573 9,537
03/31/93 9,630 10,019 9,729
04/30/93 9,915 10,171 9,902
05/31/93 10,159 10,311 9,979
06/30/93 10,176 10,402 10,195
07/31/93 10,386 10,530 10,340
08/31/93 10,956 11,065 10,812
09/30/93 11,150 11,420 11,170
10/31/93 12,107 12,295 12,038
11/30/93 12,736 12,992 12,875
12/31/93 14,857 15,494 15,354
01/31/94 15,556 15,922 15,811
02/28/94 15,053 15,436 15,272
03/31/94 13,739 14,153 14,003
04/30/94 13,270 14,241 14,082
05/31/94 13,526 14,689 14,453
06/30/94 12,945 14,390 14,187
07/31/94 13,858 15,353 15,087
08/31/94 15,787 16,931 16,730
09/30/94 16,197 17,390 17,254
10/31/94 16,051 16,966 16,889
11/30/94 15,522 16,172 16,166
12/31/94 14,299 15,329 15,273
01/31/95 12,809 13,649 13,537
02/28/95 11,988 13,407 13,367
03/31/95 12,139 13,595 13,313
04/30/95 12,711 13,873 13,523
05/31/95 13,130 14,361 14,034
06/30/95 12,934 14,325 14,007
07/31/95 13,344 14,543 14,273
08/31/95 13,077 14,061 13,718
09/30/95 12,898 14,216 13,801
10/31/95 12,354 13,744 13,394
</TABLE>

THE CHART AT LEFT SHOWS THE PERFORMANCE OF THE G.T. GLOBAL
EMERGING MARKETS FUND CLASS A SHARES SINCE THE FUND'S INCEPTION VERSUS THE MSCI
EMERGING MARKETS INDEX AND THE IFC GLOBAL COMPOSITE INDEX. THIS REPRESENTS A
CUMULATIVE RETURN OF 23.54% AND AN AVERAGE ANNUAL TOTAL RETURN OF 6.31%. THE
CHART ASSUMES A HYPOTHETICAL $10,000 INITIAL INVESTMENT IN THE FUND'S CLASS A
SHARES AND REFLECTS ALL FUND EXPENSES AND THE MAXIMUM 4.75% SALES CHARGE.
INVESTORS SHOULD NOTE THAT THE FUND IS A PROFESSIONALLY MANAGED MUTUAL FUND
WHILE THE INDEX IS UNMANAGED, DOES NOT INCUR EXPENSES AND IS NOT AVAILABLE FOR
INVESTMENT. THE PERFORMANCE OF OTHER CLASSES WILL BE GREATER OR LESS THAN THE
LINE SHOWN BASED ON THE DIFFERENCES IN CHARGES AND FEES PAID BY SHAREHOLDERS
INVESTING IN DIFFERENT CLASSES.

PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.

AVERAGE ANNUAL TOTAL RETURNS+
OCTOBER 31, 1995

<TABLE>
<CAPTION>
WITHOUT SALES CHARGE WITH SALES CHARGE++
--------------------------- ---------------------------
SHARE LIFE OF LIFE OF
CLASS 1 YEAR 5 YEAR FUND 1 YEAR 5 YEAR FUND
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>

CLASS A* -23.04% N/A 7.82% -26.69% N/A 6.31%

CLASS B** -23.37% N/A 9.61% -27.04% N/A 8.60%

ADVISOR
CLASS*** N/A N/A -5.71% N/A N/A N/A
<FN>
* The Fund began operations on May 18, 1992.
** The Fund began offering Class B shares on April 1, 1993.
*** The Fund began offering Advisor Class shares on June 1, 1995. Advisor Class
shares are not sold directly to the general public and are only available
through certain employee benefit plans, financial institutions and other
entities that have entered into specific agreements with G.T. Global. Please
see the "Alternative Purchase Plan" section in the Fund's prospectus.
+ Figures assume reinvestment of all dividends and capital gains distributions
at net asset value.
++ The performance of the Class A and Class B shares reflects the effects of
the maximum 4.75% sales charge or the maximum applicable contingent deferred
sales charge (5% in first year, decreasing to 0% after six years).
</TABLE>

THE DATA ABOVE REPRESENT PAST PERFORMANCE OF THE FUND'S SHARES, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE, SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<S> <C>
SECTOR ALLOCATION OF NET ASSETS AS OF OCTOBER 31, 1995
FINANCE 30.4%
MATERIALS/BASIC INDUSTRY 17.7%
CONSUMER NON-DURABLES 10.6%
ENERGY 10.6%
MULTI-INDUSTRY/ MISCELLANEOUS 8.9%
SERVICES 5.7%
CAPITAL GOODS 5.0%
CONSUMER DURABLES 3.7%
SHORT-TERM & OTHER 7.4%
GEOGRAPHIC ALLOCATION OF NET ASSETS AS OF OCTOBER 31, 1995
ASIA-PACIFIC 48.2%
LATIN AMERICA 24.7%
AFRICA 20.0%
EUROPE 6.0%
UNITED STATES 1.1%
</TABLE>

ALLOCATIONS WILL CHANGE BASED ON CURRENT MARKET CONDITIONS.

7
<PAGE>
GT GLOBAL
EMERGING
MARKETS
FUND

FINANCIAL
STATEMENTS
<PAGE>
G.T. GLOBAL EMERGING MARKETS FUND

REPORT OF
INDEPENDENT ACCOUNTANTS

- --------------------------------------------------------------------------------

ANNUAL REPORT

To the Shareholders of G.T. Global Emerging Markets Fund and Board of Directors
of G.T. Investment Funds, Inc.:

We have audited the accompanying statement of assets and liabilities of G.T.
Global Emerging Markets Fund, one of the funds organized as a series of G.T.
Investment Funds, Inc., including the portfolio of investments, as of October
31, 1995, 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 three years in the period
then ended and for the period from May 18, 1992 (commencement of operations) to
October 31, 1992. 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, 1995 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 Emerging Markets Fund as of October 31, 1995, 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 three years in the period then ended and for the period from May 18, 1992
(commencement of operations) to October 31, 1992, in conformity with generally
accepted accounting principles.
COOPERS & LYBRAND L.L.P.

BOSTON, MASSACHUSETTS
DECEMBER 15, 1995

F-1
<PAGE>
G.T. GLOBAL EMERGING MARKETS FUND

PORTFOLIO OF INVESTMENTS

October 31, 1995

- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Market % of Net
Equity Investments Country Shares Value Assets {d}
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Finance (30.4%)
HSBC Holdings PLC ......................................... HK 818,000 $ 11,903,073 2.5
BANKS-MONEY CENTER
Siam Commercial Bank PLC - Foreign ........................ THAI 949,600 11,096,280 2.3
BANKS-MONEY CENTER
Hang Seng Bank ............................................ HK 840,000 7,035,130 1.5
BANKS-MONEY CENTER
Land and House Co., Ltd. - Foreign ........................ THAI 383,400 6,186,820 1.3
REAL ESTATE
Commerce Asset Holding Bhd. ............................... MAL 1,244,000 6,169,809 1.3
BANKS-MONEY CENTER
State Bank of India Ltd.: ................................. IND -- -- 1.2
BANKS-REGIONAL
Common-/- ............................................... -- 500,500 3,082,258 --
New-/- .................................................. -- 467,050 2,876,261 --
Uniao Bancos Brasileiras "A" Preferred ................... BRZL 165,720,000 5,808,387 1.2
BANKS-MONEY CENTER
National Finance & Securities Public Co., Ltd. -
Foreign-/- ............................................... THAI 1,233,000 5,635,731 1.2
SECURITIES BROKER
City Developments Ltd. .................................... SING 884,000 5,476,106 1.1
REAL ESTATE
Samsung Securities Co., Ltd.-/- ........................... KOR 114,120 4,817,770 1.0
SECURITIES BROKER
Credit Bank of Athens .................................... GREC 80,000 4,813,457 1.0
BANKS-REGIONAL
Commercial Bank of Korea-/- ............................... KOR 403,350 4,495,842 0.9
BANKS-MONEY CENTER
Siam City Bank Ltd. - Foreign ............................. THAI 3,506,800 4,460,159 0.9
BANKS-REGIONAL
Amalgamated Banks of South Africa-/- ...................... SAFR 929,000 4,394,694 0.9
BANKS-REGIONAL
Malayan Banking Bhd. ...................................... MAL 530,000 4,276,717 0.9
BANKS-MONEY CENTER
Sun Hung Kai Properties Ltd. .............................. HK 505,000 4,033,494 0.8
REAL ESTATE
Banco Bradesco S.A. Preferred ............................. BRZL 437,192,750 4,001,348 0.8
BANKS-MONEY CENTER
Hong Kong Land Holdings Ltd.{\/} .......................... HK 2,080,000 3,744,000 0.8
REAL ESTATE INVESTMENT TRUST
Public Bank Bhd. - Foreign ................................ MAL 1,839,000 3,257,430 0.7
BANKS-MONEY CENTER
Industrial Finance Corporation of Thailand: ............... THAI -- -- 0.6
BANKS-MONEY CENTER
Local .................................................. -- 930,466 3,051,011 --
Foreign-/- .............................................. -- 32,534 106,679 --
Cho Hung Bank ............................................. KOR 211,000 3,049,999 0.6
BANKS-REGIONAL
Bank of Ayudhya Ltd. - Foreign ........................... THAI 503,500 2,901,729 0.6
BANKS-REGIONAL
Komercni Banka ............................................ CZCH 50,000 2,839,931 0.6
BANKS-REGIONAL
</TABLE>

The accompanying notes are an integral part of the financial statements.

F-2
<PAGE>
G.T. GLOBAL EMERGING MARKETS FUND
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Country Shares Value Assets {d}
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Finance (Continued)
Finance One Co., Ltd. - Foreign ........................... THAI 458,700 $ 2,825,855 0.6
SECURITIES BROKER
Land & General Bhd. ....................................... MAL 1,085,000 2,519,780 0.5
REAL ESTATE
Shin Young Securities Co.-/- .............................. KOR 98,800 2,453,535 0.5
SECURITIES BROKER
Hanshin Securities Co. .................................... KOR 109,700 2,451,797 0.5
SECURITIES BROKER
Housing Development Finance Corp.-/- ...................... IND 30,320 2,427,378 0.5
OTHER FINANCIAL
Daewoo Securities Co.-/- ................................. KOR 63,950 2,155,795 0.5
SECURITIES BROKER
Kookmin Bank-/- .......................................... KOR 101,000 2,144,286 0.4
BANKS-MONEY CENTER
Henderson Land Development Co., Ltd. ...................... HK 311,000 1,862,492 0.4
REAL ESTATE
General Finance & Securities Co., Ltd. - Foreign ......... THAI 397,100 1,767,695 0.4
SECURITIES BROKER
Seoul Bank-/- ............................................ KOR 168,500 1,620,912 0.3
BANKS-REGIONAL
Dhana Siam Finance & Securities Co., Ltd. - Foreign ....... THAI 308,600 1,484,126 0.3
SECURITIES BROKER
Banco Ganadero S.A. - ADR-/- {\/} ......................... COL 150,000 1,462,500 0.3
BANKS-REGIONAL
Banco Itau S.A. Preferred ................................. BRZL 2,970,000 880,343 0.2
BANKS-REGIONAL
Kookmin Bank-/- .......................................... KOR 27,768 589,530 0.1
BANKS-MONEY CENTER
Korea First Bank-/- ...................................... KOR 50,000 486,211 0.1
BANKS-REGIONAL
Banco LatinoAmericano de Exportaciones, S.A.
(Bladex){\/} ............................................. PAN 7,300 304,775 0.1
OTHER FINANCIAL
HDFC Bank Ltd. - Subscription Shares ..................... IND 500 499 --
BANKS-MONEY CENTER
------------
146,951,624
------------
Materials/Basic Industry (17.7%)
SA Iron & Steel Industrial Corp., Ltd. (ISCOR) ............ SAFR 14,797,200 15,014,299 3.1
METALS - STEEL
Cementos de Mexico S.A. "B" ............................... MEX 4,679,125 14,457,971 3.0
CEMENT
Sappi Ltd. ................................................ SAFR 684,900 12,959,852 2.7
FOREST PRODUCTS
Pohang Iron & Steel Co., Ltd. ............................. KOR 98,529 9,863,202 2.1
METALS - STEEL
Barlow Ltd. ............................................... SAFR 518,000 6,676,539 1.4
CEMENT
Companhia Vale do Rio Doce Preferred ...................... BRZL 34,200,000 5,513,261 1.2
METALS - NON-FERROUS
General Mining Union Corp. (Gencor) ....................... SAFR 1,440,400 5,056,114 1.1
METALS - NON-FERROUS
Kloof Gold Mining Co., Ltd. ............................... SAFR 474,800 4,492,143 0.9
GOLD
Indian Petrochemicals - GDR-/- {\/} ....................... IND 296,000 3,330,000 0.7
CHEMICALS
Ashanti Goldfields Co., Ltd. - GDR{\/} ................... SAFR 185,000 3,260,625 0.7
GOLD
</TABLE>

The accompanying notes are an integral part of the financial statements.

F-3
<PAGE>
G.T. GLOBAL EMERGING MARKETS FUND
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Country Shares Value Assets {d}
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Materials/Basic Industry (Continued)
Paranapanema S.A. Min., Ind. E Construacao Preferred-/-.... BRZL 146,600,000 $ 1,686,319 0.4
METALS - NON-FERROUS
Kimberly-Clark de Mexico, S.A. de C.V. "A" ................ MEX 57,000 744,522 0.2
PAPER/PACKAGING
Associated Cement Cos., Ltd.-/- ........................... IND 8,460 707,067 0.1
CEMENT
Cementos Norte Pacasmayo S.A.-/- .......................... PERU 163,490 360,183 0.1
CEMENT
Dandot Cement Co. Ltd. .................................... PAK 140,770 98,740 --
CEMENT
Engro Chemicals Pakistan Ltd. ............................. PAK 3,252 12,926 --
CHEMICALS
------------
84,233,763
------------
Energy (10.6%)
Sasol Ltd. ................................................ SAFR 1,159,788 10,018,736 2.1
ENERGY SOURCE
Korea Electric Power Corp.-/- ............................. KOR 207,130 9,252,628 1.9
ELECTRICAL & GAS UTILITIES
Compania Boliviana de Energia Electrica{::} {\/} .......... BOL 291,700 8,495,763 1.8
ELECTRICAL & GAS UTILITIES
Chilgener S.A. - ADR{\/} .................................. CHLE 227,400 5,457,600 1.1
ELECTRICAL & GAS UTILITIES
Yukong Ltd. ............................................... KOR 129,842 4,887,531 1.0
OIL
C.A. La Electricidad de Caracas .......................... VENZ 5,503,255 3,655,521 0.8
ELECTRICAL & GAS UTILITIES
Empresa Nacional de Electricidad S.A. - ADR{\/} ........... CHLE 121,600 2,614,400 0.5
ELECTRICAL & GAS UTILITIES
Electricidad de Argentina S.A. - ADR-/- {\/} .............. ARG 100,000 1,700,000 0.4
ELECTRICAL & GAS UTILITIES
China Light & Power Co., Ltd. ............................. HK 230,000 1,225,683 0.3
ELECTRICAL & GAS UTILITIES
Korea Electric Power Corp. - ADR New{\/} .................. KOR 43,500 1,071,188 0.2
ELECTRICAL & GAS UTILITIES
Yukong Ltd. - New ........................................ KOR 15,558 568,067 0.1
OIL
Dragon Oil PLC-/- ......................................... UK 25,846,152 510,632 0.1
OIL
Polifin Ltd.-/- .......................................... SAFR 173,900 374,363 0.1
ENERGY SOURCE
Madras Refineries Ltd.-/- ................................. IND 199,500 348,101 0.1
OIL
Pakistan State Oil Co., Ltd. .............................. PAK 28,000 292,964 0.1
OIL
------------
50,473,177
------------
Consumer Non-Durables (10.6%)
Panamerican Beverages, Inc. "A"{\/} ....................... MEX 450,000 12,318,750 2.6
BEVERAGES - NON ALCOHOLIC
South African Breweries Ltd. .............................. SAFR 369,100 12,121,137 2.5
BEVERAGES - ALCOHOLIC
Companhia Tecidos Norte de Mina Preferred ................. BRZL 24,740,000 7,719,189 1.6
TEXTILES & APPAREL
Hellenic Bottling Co. S.A. ................................ GREC 160,055 5,108,505 1.1
BEVERAGES - NON ALCOHOLIC
</TABLE>

The accompanying notes are an integral part of the financial statements.

F-4
<PAGE>
G.T. GLOBAL EMERGING MARKETS FUND
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Country Shares Value Assets {d}
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Consumer Non-Durables (Continued)
Sun Brewing Ltd. - 144A GDR{.} {\/} ...................... TRKY 500,000 $ 4,750,000 1.0
BEVERAGES - ALCOHOLIC
Companhia Cervejaria Brahma Preferred ..................... BRZL 8,404,543 3,207,974 0.7
BEVERAGES - ALCOHOLIC
Embotelladora Andina S.A. - ADR{\/} ....................... CHLE 80,000 2,660,000 0.6
BEVERAGES - NON ALCOHOLIC
Dhan Fibres Ltd. ......................................... PAK 6,114,000 1,804,763 0.4
TEXTILES & APPAREL
Mahavir Spinning Mills Ltd.-/- ............................ IND 135,716 529,332 0.1
TEXTILES & APPAREL
Nishat Mills Ltd. ........................................ PAK 45,712 41,750 --
TEXTILES & APPAREL
Dewan Salman Fibre Ltd.-/- ................................ PAK 50 112 --
TEXTILES & APPAREL
------------
50,261,512
------------
Multi-Industry/Miscellaneous (8.9%)
Malbak Ltd. ............................................... SAFR 1,600,000 10,640,340 2.2
CONGLOMERATE
Hutchison Whampoa ......................................... HK 1,857,000 10,232,331 2.1
CONGLOMERATE
Grupo Carso S.A. de C.V. .................................. MEX -- -- 2.1
CONGLOMERATE
"A1"-/- ................................................. -- 1,829,000 9,581,699 --
"A1" 144A ADR{.} -/- {\/} ............................... -- 24,600 255,225 --
Renong Bhd. .............................................. MAL 3,320,000 5,070,498 1.1
MULTI-INDUSTRY
BPL Ltd.-/- ............................................... IND 648,700 1,655,041 0.3
MISCELLANEOUS
KEC International Ltd.-/- ................................. IND 481,500 1,581,466 0.3
MISCELLANEOUS
Koc Holding AS-/- ......................................... AUSL 6,838,200 1,366,573 0.3
CONGLOMERATE
Swire Pacific Ltd. "A" .................................... HK 159,000 1,192,829 0.2
MULTI-INDUSTRY
Czeske Energeticke Zavody (CEZ AS)-/- ..................... CZCH 29,500 1,179,097 0.2
MISCELLANEOUS
Nicholas Piramel India Ltd.-/- ........................... IND 80,000 574,780 0.1
MISCELLANEOUS
Grasim Industries Ltd.-/- ................................. IND 6,500 114,751 --
MISCELLANEOUS
------------
43,444,630
------------
Services (5.7%)
Resorts World Bhd. ........................................ MAL 1,276,000 6,228,065 1.3
LEISURE & TOURISM
Pakistan Telecommunications Co., Ltd. - 144A GDR{.} -/-
{\/} .................................................... PAK 59,733 5,585,036 1.2
TELEPHONE NETWORKS
Daewoo Corp.-/- ........................................... KOR 329,500 4,565,024 1.0
WHOLESALE & INTERNATIONAL TRADE
Berjaya Sports Toto Bhd. .................................. MAL 1,577,000 3,289,943 0.7
CONSUMER SERVICES
McCarthy Retail Ltd.-/- ................................... SAFR 687,100 2,882,937 0.6
RETAILERS-OTHER
CPT Telefonica De Peru "B" ................................ PERU 1,185,952 2,120,576 0.4
TELEPHONE NETWORKS
</TABLE>

The accompanying notes are an integral part of the financial statements.

F-5
<PAGE>
G.T. GLOBAL EMERGING MARKETS FUND
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Country Shares Value Assets {d}
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Services (Continued)
Grupo Televisa, S.A. de C.V. - GDR{\/} .................... MEX 47,200 $ 808,300 0.2
BROADCASTING & PUBLISHING
Gran Cadena de Almacenes Colombianos S.A. ................. COL 460,000 516,673 0.1
RETAILERS-OTHER
Keppel Philippine Holding "B"-/- ......................... PHIL 925,661 427,557 0.1
TRANSPORTATION - SHIPPING
Dusit Thani PLC - Foreign-/- .............................. THAI 259,747 402,628 0.1
LEISURE & TOURISM
Indian Hotels Co., Ltd.-/- ................................ IND 3,000 48,387 --
LEISURE & TOURISM
------------
26,875,126
------------
Capital Goods (5.0%)
Hindalco Industries Ltd. - GDR{.} -/- {\/} ................ IND 210,000 6,594,000 1.4
INDUSTRIAL COMPONENTS
Tata Engineering and Locomotive Co., Ltd. ................. IND 450,860 5,487,006 1.1
MACHINERY & ENGINEERING
Delta Electrical Industries Ltd. .......................... ZBBW 3,500,000 5,380,259 1.1
ELECTRICAL PLANT/EQUIPMENT
Murray & Roberts Holdings Ltd. ............................ SAFR 445,000 3,111,888 0.6
CONSTRUCTION
Netas Telekomunik-/- ...................................... TRKY 7,060,020 2,443,271 0.5
TELECOM EQUIPMENT
Gujarat Telephone Cables-/- .............................. IND 1,600,000 1,219,941 0.3
TELECOM EQUIPMENT
------------
24,236,365
------------
Consumer Durables (3.7%)
Samsung Electronics Co.: .................................. KOR -- -- 2.9
CONSUMER ELECTRONICS
Common-/- ............................................... -- 37,601 8,421,523 --
New-/- .................................................. -- 21,021 4,566,846 --
New 2-/- ................................................ -- 727 157,942 --
Tofas Turk Otomobil Fabrikasi - GDR-/- {\/} ............... TRKY 3,444,720 2,583,540 0.5
AUTOMOBILES
Brasmotor S.A. Preferred .................................. BRZL 7,910,000 1,851,014 0.4
APPLIANCES & HOUSEHOLD
------------
17,580,865
------------
Technology (1.1%)
SPT Telecom-/- ........................................... CZCH 50,000 4,924,460 1.0
TELECOM TECHNOLOGY
Himachal Telematics Ltd.-/- ............................... IND 750,000 670,821 0.1
TELECOM TECHNOLOGY
------------
5,595,281
------------
Health Care (0.9%)
Ranbaxy Laboratories Ltd.-/- .............................. IND 225,200 4,253,044 0.9
MEDICAL TECHNOLOGY & SUPPLIES
Core Healthcare-/- ........................................ IND 29,400 116,393 --
PHARMACEUTICALS
------------
4,369,437
------------ -----

TOTAL EQUITY INVESTMENTS (cost $456,709,363) ................ 454,021,780 94.6
------------ -----
</TABLE>

The accompanying notes are an integral part of the financial statements.

F-6
<PAGE>
G.T. GLOBAL EMERGING MARKETS FUND
<TABLE>
<CAPTION>
Principal Market % of Net
Fixed Income Investments Currency Amount Value Assets {d}
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Government & Government Agency Obligations (1.1%)
Argentina (1.1%)
Republic of Argentina, Par Bond, 5.25% due 3/31/23=/=
(cost $5,784,037) ...................................... USD 11,250,000 $ 5,371,875 1.1
------------
Corporate Bonds (0.2%)
India (0.1%)
Mahavir Spinning Mills Ltd., Convertible Bond, 14%
2/22/02 ................................................ INR 6,785,800 188,789 0.1
Korea (0.1%)
Yukong Ltd., 1% due 12/31/98 ............................ CHF 500,000 478,016 0.1
------------
Total Corporate Bonds (cost $1,021,985) ..................... 666,805
------------ -----

TOTAL FIXED INCOME INVESTMENTS (cost $6,806,022) ............ 6,038,680 1.3
------------ -----
<CAPTION>

No. of Market % of Net
Warrants (0.2%) Country Warrants Value Assets {d}
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Tata Engineering & Locomotive Co. Ltd. Warrants, expire
3/8/96-/- {\/} ........................................... IND 142,500 819,375 0.2
AUTOMOBILES
National Finance & Securities Public Co., Ltd. Warrants,
expire 11/15/99-/- ....................................... THAI 411,000 245,032 --
SECURITIES BROKER
Securities One Ltd. Warrants, expire 9/16/00-/- .......... THAI 20,883 8,300 --
WARRANTS
Dragon Oil PLC Warrants, expire 11/1/99-/- ................ UK 923,076 7,295 --
OIL
------------ -----

TOTAL WARRANTS (cost $437,850) .............................. 1,080,002 0.2
------------ -----
<CAPTION>

No. of Market % of Net
Rights (0.0%) Country Rights Value Assets {d}
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Dewan Salmon Fibre Ltd. Rights, expire 12/31/95-/- ........ PAK 15,000 -- --
TEXTILES & APPAREL
SCF Finance & Securities Co., Ltd. Rights, expire
12/31/95-/- .............................................. THAI 43,842 -- --
BANKS-MONEY CENTER
Siam City Finance & Securities Co., Ltd. Rights, expire
12/31/95-/- .............................................. THAI 34,816 -- --
BANKS-MONEY CENTER
------------ -----

TOTAL RIGHTS (cost $0) ..................................... -- --
------------ -----
</TABLE>

The accompanying notes are an integral part of the financial statements.

F-7
<PAGE>
G.T. GLOBAL EMERGING MARKETS FUND
<TABLE>
<CAPTION>
Principal Market % of Net
Short-Term Investments Currency Amount Value Assets {d}
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Treasury Bills (2.8%)
Mexico (2.8%)
Mexican Cetes: .......................................... MXN -- -- 2.8
Effective yield 45.15%, due 8/22/96 ................... -- 33,500,000 $ 3,434,315 --
Effective yield 45.14%, due 10/3/96 ................... -- 33,180,330 3,275,998 --
Effective yield 45.14%, due 9/19/96 ................... -- 23,500,000 2,349,142 --
Effective yield 45.15%, due 8/29/96 ................... -- 20,707,860 2,109,439 --
Effective yield 45.15%, due 9/5/96 .................... -- 11,100,000 1,123,594 --
Effective yield 45.16%, due 8/15/96 ................... -- 7,084,500 730,947 --
Effective yield 45.14%, due 9/26/96 ................... -- 5,028,570 499,559 --
------------
Total Treasury Bills (cost $15,393,816) ..................... 13,522,994
------------ -----

TOTAL SHORT-TERM INVESTMENTS (cost $15,393,816) ............. 13,522,994 2.8
------------ -----
<CAPTION>

Market % of Net
Repurchase Agreement Value Assets {d}
- ------------------------------------------------------------- ------------ -------------
<S> <C> <C> <C> <C>
Dated October 31, 1995, with State Street Bank & Trust
Company, due November 1, 1995 for an effective yield of
5.80% collateralized by $7,860,000, U.S. Treasury Strips,
due 8/15/00 (market value of collateral is $8,947,104,
including accrued interest). (cost $8,771,413) .......... 8,771,413 1.8
------------ -----

TOTAL INVESTMENTS (cost $488,118,464) ...................... 483,434,869 100.7
Other Assets and Liabilities ................................ (3,442,182) (0.7)
------------ -----

NET ASSETS .................................................. $479,992,687 100.0
------------ -----
------------ -----
<FN>
- ----------------
{d} Percentages indicated are based on net assets of $479,992,687.
{\/} U.S. currency denominated.
-/- Non-income producing security.
{.} Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers.
{::} See Note 5 of Notes to Financial Statements.
=/= The coupon rate shown on step-up coupon bond represents the rate at
period end.
* For Federal income tax purposes, cost is $489,840,394 and
appreciation (depreciation) is as follows:

Unrealized appreciation: $ 53,173,590
Unrealized depreciation: (59,579,115)
-------------
Net unrealized depreciation: $ (6,405,525)
-------------
-------------
</TABLE>

Abbreviations:
ADR -- American Depository Receipt
GDR -- Global Depository Receipt

The accompanying notes are an integral part of the financial statements.

F-8
<PAGE>
G.T. GLOBAL EMERGING MARKETS FUND

The Fund's Portfolio of Investments at October 31, 1995, was concentrated in the
following countries:

<TABLE>
<CAPTION>
Percentage of Net Assets {d}
-------------------------------------------
Fixed Income,
Rights & Short-Term
Country(Country Code/Currency Code) Equity Warrants & Other Total
- -------------------------------------- ------ ------------- ---------- -----
<S> <C> <C> <C> <C>
Argentina (ARG/ARS) ................. 0.4 1.1 1.5
Australia (AUSL/AUD) ................. 0.3 0.3
Bolivia (BOL/BOL) .................... 1.8 1.8
Brazil (BRZL/BRL) .................... 6.5 6.5
Chile (CHLE/CLP) ..................... 2.2 2.2
Colombia (COL/COP) ................... 0.4 0.4
Czech Republic (CZCH/CSK) ........... 1.8 1.8
Greece (GREC/GRD) .................... 2.1 2.1
Hong Kong (HK/HKD) ................... 8.6 8.6
India (IND/INR) ...................... 7.2 0.3 7.5
Korea (KOR/KRW) ...................... 14.0 0.1 14.1
Malaysia (MAL/MYR) ................... 6.5 6.5
Mexico (MEX/MXN) ..................... 8.1 2.8 10.9
Pakistan (PAK/PKR) .................. 1.7 1.7
Panama (PAN/PND) ..................... 0.1 0.1
Peru (PERU/PES) ...................... 0.5 0.5
Philippines (PHIL/PHP) ............... 0.1 0.1
Singapore (SING/SGD) ................. 1.1 1.1
South Africa (S AFR/ZAR) ............. 18.9 18.9
Thailand (THAI/THB) .................. 8.3 8.3
Turkey (TRKY/TRL) .................... 2.0 2.0
United Kingdom (UK/GBP) .............. 0.1 0.1
United States (US/USD) ............... 1.1 1.1
Venezuela (VENZ/VEB) ................. 0.8 0.8
Zimbabwe (ZBBW/ZWD) .................. 1.1 1.1
------ --- --- -----
Total ............................... 94.6 1.5 3.9 100.0
------ --- --- -----
------ --- --- -----
<FN>
- ----------------
{d} Percentages indicated are based on net assets of $479,992,687.
</TABLE>

The accompanying notes are an integral part of the financial statements.

F-9
<PAGE>
G.T. GLOBAL EMERGING MARKETS FUND

STATEMENT OF ASSETS
AND LIABILITIES

October 31, 1995

- --------------------------------------------------------------------------------

<TABLE>
<S> <C> <C>
Assets:
Investments in securities, at value (cost $488,118,464)
(Note 1)................................................. $483,434,869
U.S. currency.............................. $ 512
Foreign currencies (cost $5,032,122)....... 4,833,255 4,833,767
----------
Receivable for securities sold............................ 2,587,251
Dividends receivable...................................... 947,644
Receivable for Fund shares sold........................... 594,544
Interest receivable....................................... 272,508
Unamortized organizational costs (Note 1)................. 46,409
Cash held as collateral for securities loaned (Note 1).... 7,974,500
------------
Total assets............................................ 500,691,492
------------
Liabilities:
Payable for securities purchased.......................... 7,912,571
Payable for Fund shares repurchased....................... 3,724,139
Payable for investment management and administration fees
(Note 2)................................................. 415,732
Payable for service and distribution expenses (Note 2).... 309,997
Payable for transfer agent fees (Note 2).................. 150,596
Payable for printing and postage expenses................. 98,561
Payable for custodian fees (Note 1)....................... 36,517
Payable for professional fees............................. 31,623
Payable for registration and filing fees.................. 17,956
Payable for fund accounting fees (Note 2)................. 10,747
Payable for Directors' fees and expenses (Note 2)......... 4,399
Other accrued expenses.................................... 11,467
Collateral for securities loaned (Note 1)................. 7,974,500
------------
Total liabilities....................................... 20,698,805
------------
Net assets.................................................. $479,992,687
------------
------------
Class A:
Net asset value and redemption price per share
($252,456,916 DIVIDED BY 18,232,878 shares outstanding).... $ 13.85
------------
------------
Maximum offering price per share
(100/95.25 of $13.85) *.................................... $ 14.54
------------
------------
Class B:+
Net asset value and offering price per share
($225,860,627 DIVIDED BY 16,510,242 shares outstanding).... $ 13.68
------------
------------
Advisor Class: (Notes 1 & 4)
Net asset value, offering price per share, and redemption
price per share
($1,675,144 DIVIDED BY 120,718 shares outstanding)......... $ 13.88
------------
------------
Net assets consist of:
Paid in capital (Note 4).................................. $522,570,214
Undistributed net investment income....................... 40,513
Accumulated net realized loss on investments and foreign
currency transactions.................................... (37,564,716)
Net unrealized depreciation on translation of assets and
liabilities in foreign currencies........................ (369,729)
Net unrealized depreciation of investments................ (4,683,595)
------------
Total -- representing net assets applicable to capital
shares outstanding......................................... $479,992,687
------------
------------
<FN>
- ----------------
* On sales of $50,000 or more, the offering price is reduced.
+ Redemption price per share is equal to the net asset value per share less
any applicable contingent deferred sales charge.
</TABLE>

The accompanying notes are an integral part of the financial statements.

F-10
<PAGE>
G.T. GLOBAL EMERGING MARKETS FUND

STATEMENT OF OPERATIONS

Year ended October 31, 1995

- --------------------------------------------------------------------------------

<TABLE>
<S> <C> <C>
Investment income: (Note 1)
Dividend income (net of foreign withholding tax of
$927,107)................................................... $ 9,668,900
Interest income.............................................. 7,101,959
-------------
Total investment income.................................... 16,770,859
-------------
Expenses:
Investment management and administration fees (Note 2)....... 5,410,744
Service and distribution expenses: (Note 2)
Class A.................................. $ 1,518,742
Class B.................................. 2,519,288 4,038,030
-------------
Transfer agent fees (Note 2)................................. 1,961,000
Custodian fees (Note 1)...................................... 923,573
Printing and postage expenses................................ 323,393
Registration and filing fees................................. 201,785
Fund accounting fees (Note 1)................................ 140,645
Audit fees................................................... 49,130
Amortization of organization costs (Note 1).................. 29,985
Legal fees................................................... 29,325
Directors' fees and expenses (Note 2)........................ 20,610
Insurance expenses........................................... 8,104
-------------
Total expenses before reductions........................... 13,136,324
-------------
Expense reductions (Notes 1 & 6)......................... (80,993)
-------------
Total net expenses......................................... 13,055,331
-------------
Net investment income.......................................... 3,715,528
-------------
Net realized and unrealized loss on
investments and foreign currencies: (Note 1)
Net realized loss on investments........... (38,362,863)
Net realized loss on foreign currency
transactions.............................. (1,596,521)
-------------
Net realized loss during the year.......................... (39,959,384)
Net change in unrealized depreciation on
translation of assets and liabilities in
foreign currencies........................ (337,162)
Net change in unrealized depreciation of
investments............................... (117,020,037)
-------------
Net unrealized depreciation during the year................ (117,357,199)
-------------
Net realized and unrealized loss on investments and foreign
currencies.................................................... (157,316,583)
-------------
Net decrease in net assets resulting from operations........... $(153,601,055)
-------------
-------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

F-11
<PAGE>
G.T. GLOBAL EMERGING MARKETS FUND

STATEMENT OF CHANGES IN NET ASSETS

- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, 1995 OCTOBER 31, 1994
----------------- -----------------
Increase (Decrease) in net assets
<S> <C> <C>
Operations:
Net investment income (loss)............... $ 3,715,528 $ (1,425,620)
Net realized gain (loss) on investments and
foreign currency transactions............. (39,959,384) 28,233,921
Net change in unrealized appreciation
(depreciation) on translation of assets
and liabilities in foreign currencies..... (337,162) 34,245
Net change in unrealized appreciation
(depreciation) of investments............. (117,020,037) 81,938,011
----------------- -----------------
Net increase (decrease) in net assets
resulting from operations............... (153,601,055) 108,780,557
Class A:
Distributions to shareholders: (Note 1)
From net realized gain on investments...... (15,193,744) (4,115,024)
Class B:
Distributions to shareholders: (Note 1)
From net realized gain on investments...... (12,477,553) (1,126,597)
----------------- -----------------
Total distributions...................... (27,671,297) (5,241,621)
----------------- -----------------
Capital share transactions: (Note 4)
Increase from capital shares sold and
reinvested................................ 550,507,913 883,196,940
Decrease from capital shares repurchased... (597,853,943) (498,150,727)
----------------- -----------------
Net increase (decrease) from capital
share transactions...................... (47,346,030) 385,046,213
----------------- -----------------
Total increase (decrease) in net assets...... (228,618,382) 488,585,149
Net assets:
Beginning of year.......................... 708,611,069 220,025,920
----------------- -----------------
End of year................................ $ 479,992,687 $ 708,611,069
----------------- -----------------
----------------- -----------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

F-12
<PAGE>
G.T. GLOBAL EMERGING MARKETS FUND

FINANCIAL HIGHLIGHTS

- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share
outstanding, total investment return, ratios and supplemental data. This
information has been derived from information provided in the financial
statements.

<TABLE>
<CAPTION>
CLASS A+
-------------------------------------------------------
MAY 18, 1992
(COMMENCEMENT
YEAR ENDED OCTOBER 31, OF OPERATIONS)
------------------------------------- TO OCTOBER 31,
1995(D) 1994 1993 1992
----------- ----------- ----------- ----------------
<S> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 18.81 $ 14.42 $ 11.10 $ 11.43
----------- ----------- ----------- ----------------
Income from investment operations:
Net investment income (loss).......... 0.13 (0.02) 0.02** 0.07**
Net realized and unrealized gain
(loss) on investments................ (4.32) 4.68 3.38 (0.40)
----------- ----------- ----------- ----------------
Net increase (decrease) from
investment operations.............. (4.19) 4.66 3.40 (0.33)
----------- ----------- ----------- ----------------
Distributions to shareholders:
From net investment income............ -- (0.01) (0.08) --
From net realized gain on
investments.......................... (0.77) (0.26) -- --
----------- ----------- ----------- ----------------
Total distributions................. (0.77) (0.27) (0.08) --
----------- ----------- ----------- ----------------
Net asset value, end of period.......... $ 13.85 $ 18.81 $ 14.42 $ 11.10
----------- ----------- ----------- ----------------
----------- ----------- ----------- ----------------
Total investment return (c)............. (23.04)% 32.58% 30.90% (2.90)%(a)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 252,457 $ 417,322 $ 187,808 $ 84,558
Ratio of net investment income (loss) to
average net assets..................... 0.89% (0.11)% 0.1%** 1.7 %**(b)
Ratio of expenses to average net assets:
With expense reductions (Notes 1 &
6)................................... 2.12% 2.06% 2.4%** 2.4 %**(b)
Without expense reductions............ 2.14% --%* --%* -- %*
Portfolio turnover rate++++............. 114% 100% 99% 32 %(b)
</TABLE>

- ----------------

+ All capital shares issued and outstanding as of March 31, 1993
were reclassified as Class A shares.
++ Commencing April 1, 1993, the Fund began offering Class B shares.
+++ Commencing June 1, 1995, the Fund began offering Advisor Class
shares.
++++ Portfolio turnover is calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares
issued.
(a) Not annualized.
(b) Annualized.
(c) Total investment return does not include sales charges.
(d) These selected per share data were calculated based upon weighted
average shares outstanding during the period.
* Calculation of "Ratio of expenses to average net assets" was made
without considering the effect of expense reductions, if any.
** Includes reimbursement by G.T. Capital Management, Inc. of Fund
operating expenses of $0.02 for the year ended October 31, 1993
and for the period from May 18, 1992 to October 31, 1992,
respectively. Without such reimbursements, the expense ratios
would have been 2.61% and 2.91% and the ratio of net investment
income to average net assets would have been 0.36% and 1.21% for
the year ended October 31, 1993 and for the period from May 18,
1992 to October 31, 1992, respectively (See Note 2).
*** Includes reimbursement by G.T. Capital Management, Inc. of Fund
operating expenses of $0.02. Without such reimbursements, the
expense ratio would have been 3.63% and the ratio of net
investment income to average net assets would have been (0.76%).
(See Note 2).

The accompanying notes are an integral part of the financial statements.

F-13
<PAGE>
G.T. GLOBAL EMERGING MARKETS FUND

FINANCIAL HIGHLIGHTS (CONT'D)

<TABLE>
<CAPTION>
CLASS B++ ADVISOR
--------------------------------------- CLASS+++
APRIL 1, -------------
YEAR ENDED 1993 JUNE 1, 1995
OCTOBER 31, TO TO
----------------------- OCTOBER 31, OCTOBER 31,
1995(D) 1994 1993 1995
---------- ---------- ------------- -------------
<S> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 18.68 $ 14.39 $ 11.47 $14.71
---------- ---------- ------------- -------------
Income from investment operations:
Net investment income (loss).......... 0.06 (0.12) 0.00*** 0.08
Net realized and unrealized gain
(loss) on investments................ (4.29) 4.67 2.92 (0.91)
---------- ---------- ------------- -------------
Net increase (decrease) from
investment operations.............. (4.23) 4.55 2.92 (0.83)
---------- ---------- ------------- -------------
Distributions to shareholders:
From net investment income............ -- -- -- --
From net realized gain on
investments.......................... (0.77) (0.26) -- --
---------- ---------- ------------- -------------
Total distributions................. (0.77) (0.26) -- --
---------- ---------- ------------- -------------
Net asset value, end of period.......... $ 13.68 $ 18.68 $ 14.39 $13.88
---------- ---------- ------------- -------------
---------- ---------- ------------- -------------
Total investment return (c)............. (23.37)% 31.77% 25.50%(a) (5.71)%(a)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $225,861 $291,289 $32,318 $1,675
Ratio of net investment income (loss) to
average net assets..................... 0.39% (0.61)% (0.4)%***(b) 1.39%(b)
Ratio of expenses to average net assets:
With expense reductions (Notes 1 &
6)................................... 2.62% 2.56% 2.9%***(b) 1.62%(b)
Without expense reductions............ 2.64% --%* --%* 1.64%(b)
Portfolio turnover rate++++............. 114% 100% 99% 114%
</TABLE>

- ----------------

The accompanying notes are an integral part of the financial statements.

F-14
<PAGE>
G.T. GLOBAL EMERGING MARKETS FUND

NOTES TO
FINANCIAL STATEMENTS

October 31, 1995

- --------------------------------------------------------------------------------

1. SIGNIFICANT ACCOUNTING POLICIES
G.T. Global Emerging Markets Fund ("Fund") is a separate series of G.T.
Investment Funds, Inc. ("Company"). The Company is organized as a Maryland
corporation and is registered under the Investment Company Act of 1940, as
amended ("1940 Act"), as a diversified, open-end management investment company.
The Company has twelve series of shares in operation, each series corresponding
to a distinct portfolio of investments.

The Fund offers Class A, Class B, and Advisor Class shares, each of which has
equal rights as to assets and voting privileges. Class A and Class B each has
exclusive voting rights with respect to its distribution plan. The Fund
commenced sale of Advisor Class shares on June 1, 1995. Investment income,
realized and unrealized capital gains and losses, and the common expenses of the
Fund are allocated on a pro rata basis to each class based on the relative net
assets of each class to the total net assets of the Fund. Each class of shares
differs in its respective service and distribution expenses, and may differ in
its transfer agent, registration, and certain other class-specific fees and
expenses.

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 fluctuation, if any.

Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
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 rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Company's Board of Directors.

(B) FOREIGN CURRENCY TRANSLATION
The accounting records are maintained in U.S. dollars. The market values of
foreign securities, currency holdings, and other assets and liabilities are
recorded in the books and records of the 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 earned 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 currencies, currency gains or losses realized

F-15
<PAGE>
G.T. GLOBAL EMERGING MARKETS FUND
between the trade and settlement dates on securities transactions, and the
difference between the amounts of dividends, interest, and foreign withholding
taxes recorded on the Fund's books and the U.S. dollar equivalent of the amounts
actually received or paid. Net unrealized foreign exchange gains or losses arise
from changes in the value of assets and liabilities other than investments in
securities at year end, resulting from changes in exchange rates.

(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Fund, it is the Fund's
policy to always receive, as collateral, U.S. government securities or other
high quality debt securities of which the value, including accrued interest, is
at least equal to the amount to be repaid to the Fund under each agreement at
its maturity.

(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract fluctuates with changes in currency
exchange rates. The Forward Contract is marked-to-market daily and the change in
market value is recorded by the Fund as an unrealized gain or loss. When the
Forward Contract 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 Contracts in connection with
planned purchases or sales of securities, or to hedge against adverse
fluctuations in exchange rates between currencies.

(E) OPTION ACCOUNTING PRINCIPLES
When the Fund writes a call or put option, an amount equal to the premium
received is included in the Fund's "Statement of Assets and Liabilities" as an
asset and an equivalent liability. The amount of the liability is subsequently
marked-to-market to reflect the current market value of the option. The current
market value of an option listed on a traded exchange is valued at its last bid
price, or in the case of an over-the-counter option, is valued at the average of
the last bid prices obtained from brokers. If an option expires on its
stipulated expiration date or if the Fund enters into a closing purchase
transaction, a gain or loss is realized without regard to any unrealized gain or
loss on the underlying security, and the liability related to such option is
extinguished. If a written call option is exercised, a gain or loss is realized
from the sale of the underlying security and the proceeds of the sale are
increased by the premium originally received. If a written put option is
exercised, the cost of the underlying security purchased would be decreased by
the premium originally received. The Fund can write options only on a covered
basis, which, for a call, requires that the Fund hold the underlying securities
and, for a put, requires the Fund to set aside cash, U.S. government securities,
or other liquid, high grade debt securities in an amount not less than the
exercise price or otherwise provide adequate cover at all times while the put
option is outstanding. The Fund may use options to manage its exposure to the
stock market and to fluctuations in currency values or interest rates.

The premium paid by the Fund for the purchase of a call or put option is
included in the Fund's "Statement of Assets and Liabilities" as an investment
and subsequently "marked-to-market" to reflect the current market value of the
option. If an option which the Fund has purchased expires on the stipulated
expiration date, the Fund would realize a loss in the amount of the cost of the
option. If the Fund enters into a closing sale transaction, the Fund would
realize a gain or loss, depending on whether proceeds from the closing sale
transaction are greater or less than the cost of the option. If the Fund
exercises a call option, the cost of the securities acquired by exercising the
call is increased by the premium paid to buy the call. If the Fund exercises a
put option, it realizes a gain or loss from the sale of the underlying security,
and the proceeds from such sale are decreased by the premium originally paid.

The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Fund may forego the
opportunity of profit if the market value of the underlying security or index
increases and the option is exercised. The risk in writing a put option is that
the fund may incur a loss if the market value of the underlying security or
index decreases and the option is exercised. In addition, there is the risk the
Fund may not be able to enter into a closing transaction because of an illiquid
secondary market.

(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract the
Fund is required to pledge to the broker an amount of cash or securities equal
to the minimum "initial margin" requirements of the exchange on which the
contract is traded. Pursuant to the contract, the Fund agrees to receive from or
pay to the broker an amount of cash equal to the daily fluctuation in value of
the contract. Such receipts or payments are known as

F-16
<PAGE>
G.T. GLOBAL EMERGING MARKETS FUND
"variation margin" and are recorded by the Fund as unrealized gains or losses.
When the contract is closed, the Fund records a realized gain or loss equal to
the difference between the value of the contract at the time it was opened and
the value at the time it was closed. The potential risk to the Fund is that the
change in value of the underlying securities may not correlate to the change in
value of the contracts. The Fund may use futures contracts to manage its
exposure to the stock market and to fluctuations in currency values or interest
rates.

(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out basis, unless otherwise specified. Dividends are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Where a high
level of uncertainty exists as to its collection, income is recorded net of all
withholding tax with any rebate recorded when received. The 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.

(H) PORTFOLIO SECURITIES LOANED
At October 31, 1995, stocks with an aggregate value of approximately $7,467,563
were on loan to brokers. The loans were secured by cash collateral of $7,974,500
received by the Fund. 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 each loan. For
the year ended October 31, 1995, the Fund received fees of $64,388 which were
used to reduce the Fund's custodian fees.

(I) TAXES
It is the policy of the Fund to meet the requirements for qualification as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended ("Code"). It is also the intention of the Fund to make distributions
sufficient to avoid imposition of any excise tax under Section 4982 of the Code.
Therefore, no provision has been made for Federal taxes on income, capital
gains, or unrealized appreciation of securities held, and excise tax on income
and capital gains. The Fund currently has a capital loss carryforward of
$35,842,783 which expires in 2003.

(J) 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.

(K) DEFERRED ORGANIZATIONAL EXPENSES
Expenses incurred by the Fund in connection with its organization, its initial
registration with the Securities and Exchange Commission and with various states
and the initial public offering of its shares aggregated $61,975. These expenses
are being amortized on a straightline basis over a five-year period.

(L) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investments of domestic origin. The Fund's investments in emerging market
countries may involve greater risks than investments in more developed markets
and the prices 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.

(M) 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.

(N) 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.

2. RELATED PARTIES
G.T. Capital is the Fund's investment manager and administrator. The Fund pays
investment management

F-17
<PAGE>
G.T. GLOBAL EMERGING MARKETS FUND
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, Class B, and
Advisor Class 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, 1995, G.T. Global retained
$230,239 of such sales charges. Purchases of Class A shares exceeding $500,000
may be subject to a contingent deferred sales charge ("CDSC") upon redemption,
in accordance with the Fund's current prospectus. G.T. Global collected CDSCs in
the amount of $56,294 for the period ended October 31, 1995. 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 CDSCs, in accordance with the Fund's current
prospectus. For the year ended October 31, 1995, G.T. Global collected CDSCs in
the amount of $1,059,193. 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 0.50% of the average daily net
assets of the Fund's Class A shares, less any amounts paid by the Fund as the
aforementioned service fee, for G.T. Global's expenditures incurred in providing
services as distributor. All expenses for which G.T. Global is reimbursed under
the Class A Plan will have been incurred within one year of such reimbursement.

Pursuant to the Fund's Class B Plan, the Fund may pay G.T. Global a service fee
at the annualized rate of up to 0.25% of the average daily net assets of the
Fund's Class B shares for G.T. Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay G.T. Global a distribution fee at
the annualized rate of up to 0.75% of the average daily net assets of the Fund's
Class B Shares for G.T. Global's expenditures incurred in providing services as
distributor. Expenses incurred under the Class B Plan in excess of 1.00%
annually may be carried forward for reimbursement in subsequent years as long as
that Plan continues in effect.

G.T. Capital and G.T. Global voluntarily have undertaken to limit the Fund's
expenses (exclusive of brokerage commissions, taxes, interest, and extraordinary
expenses) to the maximum annual rate of 2.40%, 2.90% and 1.90% of the average
daily net assets of the Fund's Class A, Class B and Advisor Class 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.

Effective May 1, 1995, G.T. Capital has assumed the role of pricing and
accounting agent for the Fund. The monthly fee for these services to G.T.
Capital is a percentage, not to exceed 0.03% annually, of the Fund's average
daily net assets. The annual fee rate is derived by applying 0.03% to the first
$5 billion of assets of all registered mutual funds advised by G.T. Capital
("G.T. Funds") and 0.02% to the assets in excess of $5 billion and dividing the
result by the aggregate assets of the G.T. Funds. For the period ended October
31, 1995, the Fund paid fund accounting fees of $33,216 to G.T. Capital.

F-18
<PAGE>
G.T. GLOBAL EMERGING MARKETS 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, 1995, purchases and sales of investment
securities by the Fund, other than short-term investments, aggregated
$580,388,902 and $563,548,434, respectively. There were no purchases or sales of
U.S. government obligations by the Fund for the year ended October 31, 1995.

4. CAPITAL SHARES
At October 31, 1995, there were 6,000,000,000 shares of the Company's common
stock authorized, at $0.0001 par value. Of this amount, 200,000,000 were
classified as shares of the Fund; 400,000,000 were classified as shares of G.T.
Global Government Income Fund; 200,000,000 were classified as shares of G.T.
Global Health Care Fund; 200,000,000 were classified as shares of G.T. Global
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. Global
Growth & Income Fund; 200,000,000 were classified as shares of G.T. Global Small
Companies Fund (inactive); 200,000,000 were classified as shares of G.T. Latin
America Growth Fund; 400,000,000 were classified as shares of G.T. Global
Telecommunications Fund; 200,000,000 were classified as shares of G.T. Global
High Income 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; and 200,000,000 were classified as shares of G.T. Global
Consumer Products and Services Fund. 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. With respect to the issuance of Advisor Class shares,
100,000,000 shares were classified as shares of each of the fourteen series of
the Company and designated as Advisor Class common stock. 1,400,000,000 shares
remain unclassified. Transactions in capital shares of the Fund were as follows:

CAPITAL SHARE TRANSACTIONS

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, 1995 OCTOBER 31, 1994
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
CLASS A:
Shares sold............................................................... 26,517,243 $ 389,593,563 31,738,988 $ 542,276,829
Shares issued in connection with reinvestment of distributions............ 788,804 13,204,560 224,680 3,671,269
----------- ------------- ----------- -------------
27,306,047 402,798,123 31,963,668 545,948,098
Shares repurchased........................................................ (31,260,135) (469,990,809) (22,802,389) (390,541,648)
----------- ------------- ----------- -------------
Net increase (decrease)................................................... (3,954,088) $ (67,192,686) 9,161,279 $ 155,406,450
----------- ------------- ----------- -------------
----------- ------------- ----------- -------------
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, 1995 OCTOBER 31, 1994
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
CLASS B:
Shares sold............................................................... 9,004,842 $ 135,163,005 19,746,670 $ 336,338,827
Shares issued in connection with reinvestment of distributions............ 637,782 10,599,912 55,761 910,015
----------- ------------- ----------- -------------
9,642,624 145,762,917 19,802,431 337,248,842
Shares repurchased........................................................ (8,726,345) (127,721,360) (6,446,858) (107,609,079)
----------- ------------- ----------- -------------
Net increase.............................................................. 916,279 $ 18,041,557 13,355,573 $ 229,639,763
----------- ------------- ----------- -------------
----------- ------------- ----------- -------------
</TABLE>

<TABLE>
<CAPTION>
JUNE 1, 1995
(COMMENCEMENT OF SALE OF
SHARES) TO OCTOBER 31,
1995
--------------------------
SHARES AMOUNT
----------- -------------
<S> <C> <C> <C> <C>
ADVISOR CLASS:
Shares sold............................................................... 130,495 $ 1,946,873
Shares repurchased........................................................ (9,777) (141,774)
----------- -------------
Net increase.............................................................. 120,718 $ 1,805,099
----------- -------------
----------- -------------
</TABLE>

F-19
<PAGE>
G.T. GLOBAL EMERGING MARKETS FUND

5. HOLDINGS OF 5% VOTING SECURITIES OF PORTFOLIO COMPANIES
Investments of 5% or more of an issuer's outstanding voting securities by the
Fund are defined in the Investment Company Act of 1940 as an affiliated company.
Investments in affiliated companies at October 31, 1995 amounted to $8,495,763,
at value.

Transactions with affiliated companies are as follows:

<TABLE>
<CAPTION>
PURCHASES NET REALIZED DIVIDEND
AFFILIATES COST SALES COST GAIN INCOME
- ----------------------------------------------------------------------------- ----------- ---------- ------------ -----------
<S> <C> <C> <C> <C>
Compania Boliviara de Energia Electrica...................................... $ -- $ -- $ -- $ 218,775
</TABLE>

6. EXPENSE REDUCTIONS
G.T. Capital has directed certain portfolio trades to brokers who paid a portion
of the Fund's expenses. For the year ended October 31, 1995, the Fund's expenses
were reduced by $16,605 under these arrangements.

7. SUBSEQUENT EVENT:
Effective January 1, 1996, as part of a unified corporate identity effort, the
name of the BIL GT Group (of which G.T. Capital is a member) will be changed to
Liechtenstein Global Trust ("LGT"). The Fund's (or Portfolio's) investment
manager and administrator, currently named G.T. Capital Management, Inc., will
be changed to "LGT Asset Management, Inc.", and G.T. Global Financial Services,
Inc., which serves as the Fund's distributor, will be known as "GT Global, Inc."

- --------------
FEDERAL TAX INFORMATION (UNAUDITED):
Pursuant to Section 852 of the Internal Revenue Code, the Fund designates
$17,505,694 as capital gain dividends for the fiscal year ended October 31,
1995.

F-20
<PAGE>
G.T. GLOBAL EMERGING MARKETS FUND

NOTES

- --------------------------------------------------------------------------------
<PAGE>
GT GLOBAL EMERGING MARKETS FUND

[LOGO]

GT GLOBAL MUTUAL FUNDS

GT GLOBAL OFFERS A BROAD RANGE OF MUTUAL FUNDS TO COMPLEMENT MANY INVESTORS'
PORTFOLIOS. FOR MORE INFORMATION AND A PROSPECTUS ON ANY OF THE GT GLOBAL
MUTUAL FUNDS, PLEASE CONTACT YOUR INVESTMENT COUNSELOR OR CALL GT GLOBAL
DIRECTLY AT 1-800-824-1580. THE PROSPECTUS CONTAINS MORE COMPLETE
INFORMATION, INCLUDING CHARGES, EXPENSES AND RISKS. INVESTORS SHOULD READ
THE PROSPECTUS CAREFULLY BEFORE INVESTING.

GROWTH FUNDS

/ / GLOBALLY DIVERSIFIED FUNDS

GT GLOBAL WORLDWIDE GROWTH FUND
Invests around the world, including the U.S.

GT GLOBAL INTERNATIONAL GROWTH FUND
Provides portfolio diversity by investing outside
the U.S.

GT GLOBAL EMERGING MARKETS FUND
Gives access to the growth potential of developing economies

/ / GLOBAL THEME FUNDS

GT GLOBAL HEALTH CARE FUND
Invests in growing health care industries worldwide

GT GLOBAL TELECOMMUNICATIONS FUND
Invests in companies worldwide that develop, manufacture, or sell
telecommunications services or equipment

GT GLOBAL INFRASTRUCTURE FUND
Seeks companies that build, improve, or maintain a country's infrastructure

GT GLOBAL FINANCIAL SERVICES FUND
Focuses on the worldwide opportunities from the demand for financial services
and products

GT GLOBAL NATURAL RESOURCES FUND
Concentrates on companies that own, explore, or develop natural resources

GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
Invests in companies that manufacture, market, retail, or distribute consumer
products or services

/ / REGIONALLY DIVERSIFIED FUNDS

GT GLOBAL NEW PACIFIC GROWTH FUND
Offers access to the emerging and established markets of the Pacific Rim

GT GLOBAL EUROPE GROWTH FUND
Focuses on investment opportunities in the new, unified Europe

GT GLOBAL LATIN AMERICA GROWTH FUND
Invests in the emerging markets of Latin America

/ / SINGLE COUNTRY FUNDS

GT GLOBAL AMERICA GROWTH FUND
Concentrates on small and medium-sized companies in the U.S.

GT GLOBAL AMERICA SMALL CAP GROWTH FUND
Invests in equity securities of small U.S. domiciled companies
GT GLOBAL AMERICA VALUE FUND
Concentrates on large cap equity securities of U.S. companies believed to be
undervalued

GT GLOBAL JAPAN GROWTH FUND
Provides U.S. investors with direct access to the Japanese market

GROWTH AND INCOME FUND

GT GLOBAL GROWTH & INCOME FUND
Invests in blue-chip stocks and government bonds from around the world

INCOME FUNDS

GT GLOBAL GOVERNMENT INCOME FUND
Earns monthly income from global government securities

GT GLOBAL STRATEGIC INCOME FUND
Allocates its assets among debt securities from the U.S., developed foreign
countries and emerging markets

GT GLOBAL HIGH INCOME FUND
Invests in debt securities in emerging markets

MONEY MARKET FUND

GT GLOBAL DOLLAR FUND
Invests in high quality, U.S. dollar-denominated money market securities
worldwide for stability and preservation of capital

THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENT PROSPECTUS.
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GT Global Financial Services, Inc.
Fifty California Street
27th Floor
San Francisco, California
94111-4624

DATED MATERIAL
PLEASE EXPEDITE

G.T. GLOBAL EMERGING MARKETS FUND