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

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

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

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

<PAGE>
LGT ASSET MANAGEMENT
A PIONEER IN
INTERNATIONAL
MARKETS
GT GLOBAL
GROWTH &
INCOME 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 Growth & Income Fund seeks long-term capital appreciation and
current income. In an effort to meet both objectives, the Fund invests in common
and convertible preferred stock of blue-chip companies as well as high-quality
government bonds from around the world.
PERFORMANCE REVIEW
The Fund's total return for the 12 months ended October 31, 1995, was 6.27% for
Class A shares (1.22% including the maximum 4.75% sales charge). Total return
for Class B shares was 5.57% (0.57 % including the maximum effect of the 5%
contingent deferred sales charge). During the same period, the Morgan Stanley
Capital International (MSCI) World Index(1) returned 10.03%, while the total
return for the J.P. Morgan Global Government Bond Index(2) was 15.36%. The
indices are not available for investment and do not include the effects of sales
charges and professional management fees. For more performance information,
please see page 6.
The Fund's underperformance compared to the indices is primarily attributable to
two factors. First, over the year the Fund maintained a lower weighting in the
U.S. stock market than the benchmark (approximately 22% of the Fund's equity
exposure was to the U.S. versus 41.5% for the MSCI Index). Since the U.S. was
the best-performing major stock market during the period, the Fund's performance
suffered accordingly. Nevertheless, we have remained underweighted in the U.S.
because, at recent record levels for the S&P 500, there are few stocks that meet
our purchase criteria. Second, we expected the U.S. dollar to recover in early
1995 and employed foreign currency hedges, as provided for in the prospectus.
The dollar did not recover as anticipated, and thus the Fund did not benefit
from currency gains when the dollar weakened.

- ------------------
(1) The MSCI World Index is an arithmetic average, weighted by market value, of
the performance
of 1,577 securities listed on major world stock exchanges -- the U.S., Europe,
Canada, Australia,
New Zealand and the Far East. It includes the effect of reinvested dividends
and is measured in U.S. dollars.
(2) The J.P. Morgan Global Government Bond Index is an arithmetic average,
weighted by market value, of government bonds from 13 major bond markets. It
includes the effect of reinvested dividends and is measured in U.S. dollars.
The Fund has changed benchmarks from indices provided by Salomon Brothers to
indices provided by J.P. Morgan. Because the J.P. Morgan indices use
weightings based on liquidity, we consider them a better reflection of the
investment opportunities.

1
<PAGE>
MARKET REVIEW
Over the period, developed world financial markets made a steady recovery as
inflation fears of 1994 gradually subsided. The recovery of government bond
prices in the U.S., Europe and Japan, and the sluggish performance in the price
of gold seem to provide clear evidence in support of declining inflation
expectations.

Most major markets have responded positively to the combination of moderating
economic growth and modest inflation. Throughout 1995, the U.S. has been the
leading performer as long bond yields declined below 6.5% and the unique U.S.
technology sector shot up. Elsewhere, the Japanese Nikkei Index has recovered
from lows of 14,500 in July of this year to current 18,000 levels, as a result
of monetary authorities reducing short-term interest rates to the historic low
level of 0.5%. European stocks and bonds appreciated over the period, although
they continued to lag the U.S. Overall, we believe European markets have much to
gain from lower inflation expectations, but their economies remain overregulated
and sluggish compared to the U.S.

Despite continued high levels of economic growth, many Asian markets posted
declines. In Asia, asset prices were depressed by the tight credit policies of
central banks fending off the incipient inflationary pressures and the aftermath
of the speculative blow-off in equity markets in late 1993. An exception is Hong
Kong, where prices have recovered in recent months as concerns about the Chinese
economy have alleviated.

PORTFOLIO STRATEGY
Our strategy remains to identify assets that meet our valuation criteria and, at
the same time, provide exposure to key economic trends as we perceive them. This
led us to commit some 35% of the portfolio to government bonds over the 12-month
period. We continue to be attracted by the higher, above-inflation income
returns available from bond markets, particularly in Europe. We are likely to
retain a bond weighting of this magnitude as long as we believe inflation
expectations have further to decline. Of course, portfolio holdings are subject
to change with changing market conditions. Our bond holdings at October 31 were
split between Europe and the U.S., with a duration of over seven years, compared
to the benchmark's four years, and we are anticipating potentially good capital
returns from these instruments.

2
<PAGE>
On the stock side, we favor interest rate-sensitive stock markets and
corporations, especially those more cheaply valued than the world average, as
measured by dividend yields and price/cash multiples (price per share divided by
net cash per share). The Fund's equity portion is underweighted in the U.S. and
Japan, overweighted in Hong Kong and Australia and overweighted in Europe,
particularly the UK and the hard currency markets of the Netherlands,
Switzerland and Germany. Neither the U.S., Japan, nor the Pacific ex-Japan
offers sufficient stocks that meet our investment standards. In Japan
especially, even after the five-year bear market, there are few or no companies
with yields sufficient to merit inclusion. Moreover, price/cash multiples in
Japan (12 times) and the Pacific (11.4 times) are well above the world average
(9.1 times).

Meanwhile, European stock markets offer an average yield of 3.2%, as compared to
a 2.3% yield of the World Index. The 7.1 times price/cash multiple for Europe
also compares favorably to the 9.1 times for the World Index. We expect bond
prices to rise in Europe as economies continue to slow, which we hope will focus
investor attention on the relatively cheap values available in equity markets.

OUTLOOK
The outlook generally remains positive for financial markets. We believe the
current structure of the portfolio, with its emphasis on what we feel are
undervalued assets, should begin to deliver more competitive relative
performance. If the U.S. market begins to lag the rest of the world after
several years of strong gains, the Fund could potentially stand to benefit.

CHRISTIAN WIGNALL PAUL GRIFFITHS
CHIEF INVESTMENT OFFICER PORTFOLIO MANAGER
GLOBAL EQUITIES LONDON
SAN FRANCISCO NICK TRAIN
PORTFOLIO MANAGER
LONDON

NOVEMBER 20, 1995

G.T. GLOBAL GROWTH & INCOME FUND

3
<PAGE>
KEY PORTFOLIO HOLDINGS*

SWISS BANK CORP. SWITZERLAND
Swiss Bank Corp. offers a broad range of banking operations, including foreign
exchange and bank note dealings, precious metal trading, mortgages and building
loans. It has operations throughout Switzerland and an extensive network of
international subsidiaries.

ELEKTROWATT AG SWITZERLAND
Elektrowatt is a Swiss electric power utility offering an above-average dividend
yield compared to the Swiss equity market as a whole. Since utilities have
historically been extremely interest rate-sensitive, Elektrowatt's price should
continue to appreciate if Swiss interest rates post further declines, as we
expect they will.

BROKEN HILL PROPRIETARY COMPANY AUSTRALIA
Broken Hill Proprietary Company (BHP) is an Australian-based international
natural resources company with extensive interests in oil, gas, steel and
mining. We believe its shares will respond to investor expectations of higher
growth in the developed world. The company has been successfully managed during
a difficult period in its core markets, which we believe could translate into
increased dividend growth.

UNION BANK OF SWITZERLAND SWITZERLAND
Union Bank of Switzerland (UBS) provides a wide range of banking and financial
services including retail banking and basic banking services, corporate finance,
merchant banking, investment counseling and portfolio management, trading, and
risk management. The company also invests in real estate. UBS is AAA-rated by
Standard & Poor's and pays attractive dividends.

NATIONAL AUSTRALIA BANK (NAB) AUSTRALIA
NAB is one of Australia's largest banks, with a successful record of asset
growth and diversification that has driven dividends to 9.4% annually over the
past five years. By valuation measures, such as historic dividend yield (6.8%)
and price/ book value (price of a stock divided by the per share total net value
of the company's assets -- 1.63 times), we consider the company undervalued,
particularly in light of our expectations of declining Australian inflation and
continued growth in the Pacific Basin.

- --------------
*The Fund may or may not continue to hold these or any other securities
mentioned in this report.

4
<PAGE>
BRISTOL-MYERS SQUIBB UNITED STATES
Bristol-Myers Squibb offers a wide range of pharmaceutical and toiletry products
and is valued at approximately US$37 billion. The company is the result of one
of the health care mergers that have been a feature of the sector on a global
basis over the past few years. We expect the company's profits to be fueled by
merger benefits for some time to come. In the meantime, the shares are supported
by a historic dividend yield of 3.9%, well in excess of the U.S., stock market
and world average.

CS HOLDINGS (CSH) SWITZERLAND
Since 1990, CSH has expanded its balance sheet by 80% by acquiring domestic
banks, as well as other businesses including international investment banking,
such as U.S.-based First Boston. The company's stock yields at a premium to the
Swiss market, despite ample opportunities for cost reduction and revenue
generation. The bank has recently focused on shareholder-friendly services such
as its recent conversion of three classes of shares into one.

ROYAL DUTCH PETROLEUM CORP. NETHERLANDS
This Anglo-Dutch oil company, one of the largest internationally, is a key
player in the energy industry, both within Europe and on a global basis. Its
success is based on a proven track record of exploration, together with well-run
marketing and chemical activities. Although the company is exposed to a number
of competitive commodity businesses, it has a solid history of dividend growth.
We see it in a healthy position to expand as a result of its ability to
restructure.

GKN UK
GKN is the premier UK engineering company with high market shares in niche areas
such as constant velocity joints for autos and industrial pallets. We believe
this means its margins are under less threat than they would be at more exposed
companies. We think GKN's growth prospects are good, as auto companies continue
to outsource production.

TELECOM CORPORATION OF NEW ZEALAND LTD. NEW ZEALAND
We view this full service telecommunications company as having the potential to
benefit from continuing deregulation of the New Zealand economy. We expect
revenues to grow from the increasing demand for toll and cellular services that,
as yet, have shown no signs of slowing. In addition, the company is using its
strong cash flow to invest in added value products such as advanced networks and
information and entertainment services.

5
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
PORTFOLIO SUMMARY
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
MONTH G.T. GLOBAL GROWTH & INCOME FUND J.P. MORGAN GLOBAL GOVERNMENT BOND INDEX MSCI WORLD INDEX
<S> <C> <C> <C>
09/25/90 9,525 10,000 10,000
09/30/90 9,525 10,045 9,678
10/31/90 9,545 10,443 10,583
11/30/90 9,625 10,625 10,412
12/31/90 9,712 10,744 10,632
01/31/91 10,015 10,987 11,023
02/28/91 10,338 10,997 12,045
03/31/91 10,314 10,653 11,692
04/30/91 10,560 10,781 11,785
05/31/91 10,826 10,791 12,054
06/30/91 10,417 10,647 11,312
07/31/91 10,895 10,872 11,848
08/31/91 11,040 11,098 11,813
09/30/91 11,188 11,503 12,124
10/31/91 11,041 11,616 12,323
11/30/91 10,852 11,806 11,788
12/31/91 11,571 12,402 12,648
01/31/92 11,401 12,159 12,416
02/29/92 11,529 12,124 12,204
03/31/92 11,314 12,012 11,631
04/30/92 11,637 12,112 11,795
05/31/92 12,048 12,456 12,267
06/30/92 11,981 12,796 11,858
07/31/92 11,938 13,078 11,891
08/31/92 11,916 13,426 12,182
09/30/92 11,758 13,412 12,072
10/31/92 11,691 13,077 11,748
11/30/92 11,647 12,846 11,960
12/31/92 11,869 12,967 12,059
01/31/93 12,004 13,187 12,101
02/28/93 12,475 13,399 12,390
03/31/93 12,812 13,605 13,111
04/30/93 12,903 13,853 13,721
05/31/93 13,084 13,941 14,039
06/30/93 13,197 13,952 13,924
07/31/93 13,519 13,958 14,213
08/31/93 14,070 14,371 14,867
09/30/93 14,046 14,523 14,595
10/31/93 14,627 14,516 14,999
11/30/93 14,418 14,410 14,153
12/31/93 15,117 14,557 14,848
01/31/94 15,610 14,694 15,830
02/28/94 14,905 14,533 15,627
03/31/94 14,382 14,466 14,956
04/30/94 14,573 14,455 15,421
05/31/94 14,430 14,336 15,464
06/30/94 14,309 14,506 15,423
07/31/94 14,718 14,642 15,719
08/31/94 14,982 14,604 16,195
09/30/94 14,721 14,677 15,773
10/31/94 15,086 14,897 16,224
11/30/94 14,600 14,709 15,524
12/31/94 14,577 14,743 15,677
01/31/95 14,430 15,042 15,444
02/28/95 14,676 15,429 15,672
03/31/95 14,722 16,214 16,431
04/30/95 15,093 16,473 17,007
05/31/95 15,465 16,933 17,156
06/30/95 15,384 17,038 17,154
07/31/95 15,834 17,119 18,015
08/31/95 15,459 16,643 17,617
09/30/95 15,855 17,018 18,134
10/31/95 16,032 17,184 17,852

<CAPTION>
MONTH SALOMON WORLD GOVERNMENT BOND INDEX
<S> <C>
09/25/90 10,000
09/30/90 10,018
10/31/90 10,466
11/30/90 10,640
12/31/90 10,745
01/31/91 11,013
02/28/91 11,017
03/31/91 10,617
04/30/91 10,780
05/31/91 10,766
06/30/91 10,654
07/31/91 10,882
08/31/91 11,093
09/30/91 11,527
10/31/91 11,648
11/30/91 11,830
12/31/91 12,445
01/31/92 12,225
02/29/92 12,156
03/31/92 12,028
04/30/92 12,113
05/31/92 12,485
06/30/92 12,834
07/31/92 13,133
08/31/92 13,501
09/30/92 13,636
10/31/92 13,265
11/30/92 13,054
12/31/92 13,133
01/31/93 13,360
02/28/93 13,623
03/31/93 13,832
04/30/93 14,125
05/31/93 14,266
06/30/93 14,236
07/31/93 14,276
08/31/93 14,705
09/30/93 14,880
10/31/93 14,855
11/30/93 14,748
12/31/93 14,874
01/31/94 14,993
02/28/94 14,896
03/31/94 14,874
04/30/94 14,891
05/31/94 14,761
06/30/94 14,973
07/31/94 15,093
08/31/94 15,040
09/30/94 15,149
10/31/94 15,392
11/30/94 15,181
12/31/94 15,223
01/31/95 15,542
02/28/95 15,940
03/31/95 16,887
04/30/95 17,199
05/31/95 17,683
06/30/95 17,787
07/31/95 17,829
08/31/95 17,216
09/30/95 17,601
10/31/95 17,732
</TABLE>

THE CHART AT RIGHT SHOWS THE PERFORMANCE OF THE G.T. GLOBAL
GROWTH & INCOME FUND CLASS A SHARES SINCE THE FUND'S INCEPTION VERSUS THE MSCI
WORLD INDEX AND THE J.P. MORGAN GLOBAL GOVERNMENT BOND INDEX AND THE SALOMON
WORLD GOVERNMENT BOND INDEX. THIS REPRESENTS A CUMULATIVE RETURN OF 60.32% AND
AN AVERAGE ANNUAL TOTAL RETURN OF 9.69%. 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* 6.27% 10.93% 10.75% 1.22% 9.85% 9.69%
CLASS B** 5.57% N/A 10.23% 0.57% N/A 9.69%
ADVISOR
CLASS*** N/A N/A 3.83% N/A N/A N/A
</TABLE>

* The Fund began operations on September 25, 1990.
** The Fund began offering Class B shares on October 22, 1992.
*** 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).

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

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
GEOGRAPHIC ALLOCATION OF NET ASSETS AS OF OCTOBER 31, 1995
<S> <C>
EUROPE 62.4%
NORTH AMERICA 25.9%
ASIA-PACIFIC 10.5%
OTHER 1.2%
SECTOR ALLOCATION OF NET ASSETS AS OF OCTOBER 31, 1995
FIXED-INCOME INVESTMENTS 34.2%
FINANCE 24.5%
ENERGY 11.4%
MATERIALS/BASIC INDUSTRIES 8.1%
SERVICES 6.0%
CONSUMER NON-DURABLES 4.4%
CAPITAL GOODS 3.7%
HEALTH CARE 2.8%
MULTI-INDUSTRY/ MISCELLANEOUS 2.0%
SHORT TERM & OTHER 2.9%
</TABLE>

ALLOCATIONS WILL CHANGE BASED ON CURRENT MARKET CONDITIONS.

6
<PAGE>
GT GLOBAL
GROWTH &
INCOME FUND

FINANCIAL
STATEMENTS
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND

REPORT OF
INDEPENDENT ACCOUNTANTS

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

ANNUAL REPORT

To the Shareholders of G.T. Global Growth & Income 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 Growth & Income 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, 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 five years in the period
then ended. 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 Growth & Income 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 five years in the period then ended, in conformity with generally accepted
accounting principles.

COOPERS & LYBRAND L.L.P.

BOSTON, MASSACHUSETTS
DECEMBER 15, 1995

F-1
<PAGE>
G.T. GLOBAL GROWTH & INCOME 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 (24.5%)
Swiss Bank Corp. - Bearer .............................. SWTZ 34,795 $ 14,287,135 2.2
BANKS-MONEY CENTER
Union Bank of Switzerland - Bearer .................... SWTZ 10,652 11,544,594 1.8
BANKS-MONEY CENTER
National Australia Bank Ltd. ........................... AUSL 1,309,437 11,207,792 1.7
BANKS-MONEY CENTER
CS Holding AG - Registered ............................ SWTZ 98,500 10,067,847 1.6
BANKS-MONEY CENTER
AEGON N.V. ............................................. NETH 189,852 7,206,676 1.1
INSURANCE-LIFE
First Tennessee National Corp. ......................... US 122,700 6,564,450 1.0
BANKS-REGIONAL
Internationale Nederlanden Groep N.V. ................. NETH 105,705 6,303,448 1.0
OTHER FINANCIAL
Mercury Asset Management Group PLC ..................... UK 397,698 5,804,870 0.9
INVESTMENT MANAGEMENT
American General Corp. ................................. US 170,000 5,588,750 0.9
INSURANCE-LIFE
Deutsche Bank AG ....................................... GER 112,500 5,089,800 0.8
BANKS-MONEY CENTER
ABN AMRO Holding N.V. .................................. NETH 115,974 4,872,672 0.8
BANKS-REGIONAL
MAI PLC: .............................................. UK -- -- 0.7
OTHER FINANCIAL
Convertible Preferred, 5.9% till 12/31/49 ............ -- 1,463,200 2,798,280 --
Common ............................................... -- 374,000 1,932,954 --
National Westminster Bank PLC ......................... UK 471,800 4,705,323 0.7
BANKS-MONEY CENTER
IKB Deutsche Industriebank AG ......................... GER 23,600 4,418,816 0.7
BANKS-REGIONAL
Generale de Banque S.A. ................................ BEL 13,420 4,343,402 0.7
BANKS-MONEY CENTER
Lloyds Abbey Life PLC ................................. UK 599,000 4,336,052 0.7
INSURANCE-LIFE
General Accident PLC ................................... UK 400,000 4,071,440 0.6
INSURANCE - PROPERTY-CASUALTY
Sun Hung Kai Properties Ltd. ........................... HK 494,500 3,949,629 0.6
REAL ESTATE
Dresdner Bank AG ....................................... GER 132,350 3,536,105 0.6
BANKS-MONEY CENTER
Commercial Union PLC ................................... UK 361,550 3,514,355 0.6
INSURANCE - MULTI-LINE
Fortis Amev N.V. ....................................... NETH 54,017 3,392,322 0.5
OTHER FINANCIAL
Kredietbank N.V. ....................................... BEL 12,980 3,258,465 0.5
BANKS-REGIONAL
M & G Group PLC ........................................ UK 155,000 3,197,013 0.5
INVESTMENT MANAGEMENT
Sparebanken NOR (Union Bank of Norway) ................. NOR 112,000 2,968,293 0.5
BANKS-REGIONAL
</TABLE>

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

F-2
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Country Shares Value Assets {d}
- ---------------------------------------------------------- -------- -------------- ------------ -------------
<S> <C> <C> <C> <C>
Finance (Continued)
Gerrard & National Holdings PLC ........................ UK 375,880 $ 2,631,813 0.4
SECURITIES BROKER
Henderson Investment Ltd. .............................. HK 2,691,000 2,192,842 0.3
REAL ESTATE
Banco de Santander S.A. ............................... SPN 48,750 2,127,389 0.3
BANKS-MONEY CENTER
Bank of Montreal ...................................... CAN 88,000 1,954,752 0.3
BANKS-REGIONAL
Hopewell Holdings ..................................... HK 2,631,000 1,659,008 0.3
REAL ESTATE
Amoy Properties Ltd. .................................. HK 1,581,500 1,523,978 0.2
REAL ESTATE
Societe Generale Paris ................................. FR 12,280 1,404,218 0.2
BANKS-MONEY CENTER
Banco Popular Espanol S.A. ............................. SPN 7,880 1,253,328 0.2
BANKS-MONEY CENTER
UAP Compagnie .......................................... FR 42,367 1,100,667 0.2
INSURANCE - MULTI-LINE
Compagnie Financiere de Paribas S.A. ................... FR 18,332 1,008,757 0.2
OTHER FINANCIAL
Realty Development Corp., Ltd. "A" .................... HK 280,000 800,393 0.1
REAL ESTATE
Commerzbank AG ......................................... GER 2,250 520,891 0.1
BANKS-MONEY CENTER
------------
157,138,519
------------
Energy (11.4%)
Elektrowatt AG ......................................... SWTZ 45,508 13,753,850 2.1
ELECTRICAL & GAS UTILITIES
Royal Dutch Petroleum Co. .............................. NETH 80,550 9,999,838 1.6
OIL
Electrabel S.A. ........................................ BEL 34,760 7,812,586 1.2
ELECTRICAL & GAS UTILITIES
Exxon Corp. ............................................ US 91,300 6,973,038 1.1
OIL
Pacific Gas and Electric Co. ........................... US 220,000 6,462,500 1.0
ELECTRICAL & GAS UTILITIES
Mobil Corp. ............................................ US 63,800 6,427,850 1.0
OIL
Reunies Electrobel & Tractebel S.A. .................... BEL 11,587 4,246,964 0.7
ELECTRICAL & GAS UTILITIES
Groupe Bruxelles Lambert S.A. .......................... BEL 31,025 4,001,496 0.6
OIL
Shell Transport & Trading Co., PLC ..................... UK 324,700 3,792,529 0.6
OIL
Elf Aquitaine .......................................... FR 52,475 3,574,547 0.6
OIL
British Gas PLC ........................................ UK 859,500 3,273,898 0.5
GAS PRODUCTION & DISTRIBUTION
Iberdrola S.A. ........................................ SPN 134,000 1,011,238 0.2
ELECTRICAL & GAS UTILITIES
Union Electrica Fenosa S.A. ............................ SPN 206,000 959,790 0.2
ELECTRICAL & GAS UTILITIES
Groupe Bruxelles Lambert S.A. - VVPR ................... BEL 742 95,701 --
OIL
------------
72,385,825
------------
</TABLE>

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

F-3
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Country Shares Value Assets {d}
- ---------------------------------------------------------- -------- -------------- ------------ -------------
<S> <C> <C> <C> <C>
Materials/Basic Industries (8.1%)
Broken Hill Proprietary Co., Ltd. ...................... AUSL 939,403 $ 12,718,996 2.0
MISC. MATERIALS & COMPONENTS
Amcor Ltd. ............................................. AUSL 1,121,546 8,403,908 1.3
PAPER/PACKAGING
Monsanto Co. ........................................... US 65,800 6,892,550 1.1
CHEMICALS
Solvay S.A. "A" ........................................ BEL 11,754 5,933,900 0.9
CHEMICALS
Akzo Nobel N.V. ........................................ NETH 51,450 5,859,040 0.9
CHEMICALS
RWE AG ................................................. GER 13,462 4,792,483 0.8
MISC. MATERIALS & COMPONENTS
BASF AG ................................................ GER 18,080 3,969,815 0.6
CHEMICALS
CRA Ltd. ............................................... AUSL 132,200 2,037,563 0.3
METALS - NON-FERROUS
St Laurent Paperboard, Inc.-/- ......................... CAN 80,000 1,157,321 0.2
FOREST PRODUCTS
------------
51,765,576
------------
Services (6.0%)
Telecom Corporation of New Zealand Limited ............. NZ -- -- 1.5
TELEPHONE NETWORKS
Common ............................................... -- 2,082,600 8,640,297 --
ADR{\/} .............................................. -- 19,000 1,261,125 --
McGraw-Hill, Inc. ...................................... US 81,000 6,631,875 1.0
BROADCASTING & PUBLISHING
Dun & Bradstreet Corp. ................................. US 109,800 6,560,550 1.0
BROADCASTING & PUBLISHING
Granada PLC, Convertible Preferred, 7.5% till
4/30/03 .............................................. UK 1,040,000 3,887,466 0.6
LEISURE & TOURISM
THORN EMI PLC .......................................... UK 140,000 3,259,365 0.5
LEISURE & TOURISM
Royal PTT Nederland N.V. ............................... NETH 86,335 3,036,497 0.5
TELEPHONE NETWORKS
British Telecommunications PLC ......................... UK 359,000 2,133,460 0.3
TELEPHONE NETWORKS
Tele Danmark AS "B" .................................... DEN 39,394 2,055,226 0.3
TELEPHONE NETWORKS
Cathay Pacific Airways ................................. HK 1,393,000 2,054,041 0.3
TRANSPORTATION - AIRLINES
------------
39,519,902
------------
Consumer Non-Durables (4.4%)
Philip Morris Cos., Inc. ............................... US 85,000 7,182,500 1.1
FOOD
Avon Products, Inc. ................................... US 91,000 6,472,375 1.0
PERSONAL CARE/COSMETICS
Universal Corp. ........................................ US 280,500 5,890,500 0.9
TOBACCO
Fleming Cos., Inc. ..................................... US 206,700 4,676,588 0.7
FOOD
Brown-Forman Corp. "B" ................................. US 84,300 3,213,938 0.5
BEVERAGES - ALCOHOLIC
Dairy Farm International Holdings Ltd.{\/} ............. HK 1,390,000 1,139,800 0.2
FOOD
------------
28,575,701
------------
</TABLE>

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

F-4
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Country Shares Value Assets {d}
- ---------------------------------------------------------- -------- -------------- ------------ -------------
<S> <C> <C> <C> <C>
Capital Goods (3.7%)
General Electric PLC .................................. UK 1,473,000 $ 7,310,289 1.1
AEROSPACE/DEFENSE
BICC PLC ............................................... UK 1,221,500 5,058,211 0.8
INDUSTRIAL COMPONENTS
Lockheed Martin Corp. .................................. US 69,545 4,737,753 0.7
AEROSPACE/DEFENSE
Siemens AG ............................................ GER 6,953 3,646,212 0.6
TELECOM EQUIPMENT
TransCanada Pipelines Ltd. ............................. CAN 145,000 1,935,246 0.3
MACHINERY & ENGINEERING
Thomson CSF S.A. ....................................... FR 62,560 1,304,053 0.2
AEROSPACE/DEFENSE
Trafalgar House PLC ................................... UK 131,000 47,621 --
MACHINERY & ENGINEERING
------------
24,039,385
------------
Health Care (2.8%)
Bristol Myers Squibb Co. .............................. US 138,700 10,575,875 1.7
PHARMACEUTICALS
Bayer AG ............................................... GER 25,860 6,879,829 1.1
PHARMACEUTICALS
------------
17,455,704
------------
Multi-Industry/Miscellaneous (2.0%)
VEBA AG ................................................ GER 170,200 6,989,169 1.1
CONGLOMERATE
Hutchison Whampoa ...................................... HK 565,000 3,113,230 0.5
CONGLOMERATE
Brascan Ltd. "A" ....................................... CAN 179,000 2,806,690 0.4
CONGLOMERATE
------------
12,909,089
------------
Consumer Durables (1.4%)
GKN PLC ............................................... UK 685,800 8,730,686 1.4
------------
AUTO PARTS
Technology (0.3%)
Alcatel Alsthom Compagnie Generale d'Electricite ....... FR 21,860 1,867,390 0.3
TELECOM TECHNOLOGY
------------ -----

TOTAL EQUITY INVESTMENTS (cost $351,769,551) ............ 414,387,777 64.6
------------ -----
<CAPTION>

Principal Market % of Net
Fixed Income Investments Currency Amount Value Assets {d}
- ---------------------------------------------------------- -------- -------------- ------------ -------------
<S> <C> <C> <C> <C>
Government & Government Agency Obligations (29.1%)
Canada (0.6%)
Canadian Government, 8.75% due 12/1/05 ............... CAD 5,000,000 4,039,424 0.6
Denmark (1.1%)
Kingdom of Denmark, 8% due 3/15/06 ................... DKK 40,000,000 7,361,060 1.1
Germany (7.8%)
Deutschland Republic:
6.75% due 4/22/03 ................................. DEM 26,000,000 19,014,567 3.0
6.25% due 1/4/24 ................................... DEM 23,000,000 14,449,975 2.3
Bundesschatzanweisungen, 6.875% due 12/2/98 .......... DEM 14,635,000 10,984,829 1.7
Treuhandanstalt, 6.375% due 7/1/99 ................... DEM 7,000,000 5,181,980 0.8
</TABLE>

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

F-5
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
<TABLE>
<CAPTION>
Principal Market % of Net
Fixed Income Investments Currency Amount Value Assets {d}
- ---------------------------------------------------------- -------- -------------- ------------ -------------
<S> <C> <C> <C> <C>
Government & Government Agency Obligations (Continued)
Italy (1.9%)
Italian Buoni Del Tesoro Poliennali (BTPS), 8.50% due
8/1/04 .............................................. ITL 23,000,000,000 $ 11,997,457 1.9
New Zealand (1.2%)
New Zealand Government, 8% due 4/15/04 ............... NZD 11,000,000 7,610,947 1.2
Spain (1.5%)
Kingdom of Spain, 8% due 5/30/04 ..................... ESP 1,350,000,000 9,399,393 1.5
Sweden (2.2%)
Swedish Government, 6% due 2/9/05 .................... SEK 117,600,000 14,292,473 2.2
United Kingdom (4.6%)
Conversion, 9.5% due 4/18/05 ........................ GBP 10,500,000 18,244,725 2.8
United Kingdom Treasury:
6% due 8/10/99 ..................................... GBP 3,865,000 5,852,937 0.9
8% due 12/7/15 ..................................... GBP 3,500,000 5,466,157 0.9
United States (8.2%)
United States Treasury Note:
7.25% due 5/15/04 ................................. USD 16,600,000 17,881,351 2.8
7.5% due 2/15/05 ................................... USD 8,050,000 8,849,969 1.4
6.5% due 8/15/05 ................................... USD 4,000,000 4,136,252 0.6
United States Treasury Bond:
6.875% due 8/15/25 ................................. USD 11,500,000 12,322,975 1.9
6.25% due 8/15/23 ................................. USD 10,000,000 9,762,500 1.5
------------
Total Government & Government Agency Obligations (cost
$177,666,101) ........................................... 186,848,971
------------
Corporate Bonds (5.1%)
Canada (0.2%)
St. Laurent Paperboard Inc., Convertible Bond, 8% due
6/15/04 ............................................. CAD 1,080,000 1,056,373 0.2
Germany (1.4%)
Deutsche Bank AG, 9% due 12/31/02+/+ ................. DEM 5,625,000 4,562,593 0.7
Commerzbank AG, Convertible Bond, 8.40% due
12/31/00+ ........................................... DEM 4,173,000 4,169,145 0.7
IKB Deutsche Industriebank, 6.45% due 3/31/06 ........ DEM 445,700 294,536 --
United Kingdom (2.5%)
Daily Mail & General Trust, Convertible Bond, 5.75%
due 9/26/03 ......................................... GBP 3,405,000 6,899,336 1.1
Land Securities PLC, Convertible Bond, 9.375% due
7/31/04 ............................................. GBP 3,485,000 5,990,102 0.9
Elf Enterprises Finance PLC, 8.75% due 6/27/06 ....... GBP 1,465,000 2,298,107 0.4
Trafalgar House PLC, Convertible Bond, 6% due
1/31/49 ............................................. GBP 1,236,000 908,393 0.1
United States (1.0%)
Siemens Capital Corp., 8% due 6/24/02+/+ ............. USD 4,710,000 6,405,600 1.0
------------
Total Corporate Bonds (cost $31,805,823) ................ 32,584,185
------------ -----

TOTAL FIXED INCOME INVESTMENTS (cost $209,471,924) ....... 219,433,156 34.2
------------ -----
</TABLE>

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

F-6
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
<TABLE>
<CAPTION>
No. of Market % of Net
Warrants (0.0%) Country Warrants Value Assets {d}
- ---------------------------------------------------------- -------- -------------- ------------ -------------
<S> <C> <C> <C> <C>
Henderson Investment Warrants, expire 3/31/96 (cost
$0)-/- ................................................ HK 269,100 $ 14,271 --
------------ -----
INVESTMENT MANAGEMENT
<CAPTION>

Market % of Net
Repurchase Agreement (0.1%) 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 $1,310,000 U.S. Treasury
Strips, due 2/15/02 (market value of collateral is
$906,610, including accrued interest) (cost $877,141)
...................................................... 877,141 0.1
------------ -----

TOTAL INVESTMENTS (cost $562,118,616) .................... 634,712,345 98.9
Other Assets and Liabilities ............................. 7,097,240 1.1
------------ -----

NET ASSETS ............................................... $641,809,585 100.0
------------ -----
------------ -----
<FN>
- ----------------
{d} Percentages indicated are based on net assets of $641,809,585.
{\/} U.S. currency denominated.
-/- Non-income producing security.
+ The coupon rate shown on floating rate note represents the rate at
period end.
+/+ Issued with detachable warrants or value recovery rights. The
current market value of each warrant or right is zero.
* For Federal income tax purposes, cost is $562,357,582 and
appreciation (depreciation) is as follows:

Unrealized appreciation: $ 86,308,381
Unrealized depreciation: (13,953,618)
-------------
Net unrealized appreciation: $ 72,354,763
-------------
-------------
</TABLE>

<TABLE>
<C> <S>
Abbreviations:
ADR -- American Depository Receipt
GDR -- Global Depository Receipt
</TABLE>

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

<TABLE>
<S> <C> <C> <C> <C>
following countries:

<S> <C> <C> <C> <C>
Percentage of Net Assets {d}
-------------------------------------------
<CAPTION>
Fixed Income,
Rights & Short-Term
Country(Country Code/Currency Code) Equity Warrants & Other Total
- -------------------------------------- ------ ------------- ---------- -----
<S> <C> <C> <C> <C>
Australia (AUSL/AUD) ................. 5.3 5.3
Belgium (BEL/BEF) ................... 4.6 4.6
Canada (CAN/CAD) ..................... 1.2 0.8 2.0
Denmark (DEN/DKK) .................... 0.3 1.1 1.4
France (FR/FRF) ...................... 1.7 1.7
Germany (GER/DEM) .................... 6.4 9.2 15.6
Hong Kong (HK/HKD) ................... 2.5 2.5
Italy (ITLY/ITL) ..................... 1.9 1.9
Netherlands (NETH/NLG) ............... 6.4 6.4
New Zealand (NZ/NZD) ................. 1.5 1.2 2.7
Norway (NOR/NOK) ..................... 0.5 0.5
Spain (SPN/ESP) ...................... 0.9 1.5 2.4
Sweden (SWDN/SEK) .................... 2.2 2.2
Switzerland (SWTZ/CHF) ............... 7.7 7.7
United Kingdom (UK/GBP) .............. 10.9 7.1 18.0
United States (US/USD) ............... 14.7 9.2 1.2 25.1
------ --- --- -----
Total ............................... 64.6 34.2 1.2 100.0
------ --- --- -----
------ --- --- -----
<FN>
- ----------------
{d} Percentages indicated are based on net assets of $641,809,585.
</TABLE>

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

F-7
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND

FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
OCTOBER 31, 1995

<TABLE>
<CAPTION>
Unrealized
Market Value Contract Delivery Appreciation
Contracts to Sell: (U.S. Dollars) Price Date (Depreciation)
- --------------------------------------------------------------------------- -------------- ----------- --------- --------------
<S> <C> <C> <C> <C>
Deutsche Marks............................................................. 32,968,774 1.37500 01/24/96 $ 631,227
Dutch Guilders............................................................. 12,674,263 1.58183 11/15/95 (30,640)
Dutch Guilders............................................................. 697,084 1.64532 11/15/96 (28,522)
French Francs.............................................................. 1,462,617 4.81600 11/06/96 22,019
French Francs.............................................................. 3,947,691 4.90035 11/16/95 (9,463)
Swiss Francs............................................................... 15,511,679 1.21830 11/17/95 (1,065,319)
-------------- --------------
Total Contracts to Sell (Receivable amount $66,781,410)................ 67,262,108 (480,698)
-------------- --------------
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF NET ASSETS IS 10.48%
Total Open Forward Foreign Currency Contracts.......................... $ (480,698)
--------------
--------------
</TABLE>

- ----------------
See Note 1 to the financial statements.

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

F-8
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND

STATEMENT OF ASSETS
AND LIABILITIES

October 31, 1995

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

<TABLE>
<S> <C> <C>
Assets:
Investments in securities, at value (cost $562,118,616)
(Note 1)................................................. $634,712,345
U.S. currency.............................. $2,148,396
Foreign currencies (cost $86,368).......... 86,113 2,234,509
----------
Interest and interest withholding tax reclaims
receivable............................................... 6,136,649
Dividends and dividend withholding tax reclaims
receivable............................................... 1,839,340
Receivable for Fund shares sold........................... 1,589,616
Miscellaneous receivable.................................. 57,542
Cash held as collateral for securities loaned (Note 1).... 66,191,073
------------
Total assets............................................ 712,761,074
------------
Liabilities:
Payable for Fund shares repurchased....................... 1,909,711
Payable for forward foreign currency contracts -- closed
(Note 1)................................................. 1,061,853
Payable for investment management and administration fees
(Note 2)................................................. 530,977
Payable for open forward foreign currency contracts, net
(Note 1)................................................. 480,698
Payable for service and distribution expenses (Note 2).... 382,987
Payable for printing and postage expenses................. 157,836
Payable for transfer agent fees (Note 2).................. 109,594
Payable for custodian fees (Note 1)....................... 36,195
Payable for professional fees............................. 33,921
Payable for registration and filing fees.................. 30,951
Payable for fund accounting fees (Note 2)................. 13,794
Distribution payable...................................... 5,449
Payable for Directors' fees and expenses (Note 2)......... 2,315
Other accrued expenses.................................... 4,135
Collateral for securities loaned (Note 1)................. 66,191,073
------------
Total liabilities....................................... 70,951,489
------------
Net assets.................................................. $641,809,585
------------
------------
Class A:
Net asset value and redemption price per share
($284,069,241 DIVIDED BY 44,716,651 shares outstanding).... $ 6.35
------------
------------
Maximum offering price per share
(100/95.25 of $6.35) *..................................... $ 6.67
------------
------------
Class B:+
Net asset value and offering price per share
($356,796,017 DIVIDED BY 56,149,732 shares outstanding).... $ 6.35
------------
------------
Advisor Class: (Notes 1 & 4)
Net asset value, offering price per share, and redemption
price per share
($944,327 DIVIDED BY 148,711 shares outstanding)........... $ 6.35
------------
------------
Net assets consist of:
Paid in capital (Note 4).................................. $585,988,405
Undistributed net investment income....................... 3,503,788
Accumulated net realized loss on investments and foreign
currency transactions.................................... (19,973,849)
Net unrealized depreciation on translation of assets and
liabilities in foreign currencies........................ (302,488)
Net unrealized appreciation of investments................ 72,593,729
------------
Total -- representing net assets applicable to capital
shares outstanding......................................... $641,809,585
------------
------------
<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-9
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND

STATEMENT OF OPERATIONS

Year ended October 31, 1995

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

<TABLE>
<S> <C> <C>
Investment income: (Note 1)
Interest income............................................. $ 20,124,306
Dividend income (net of foreign withholding tax of
$1,834,759)................................................ 15,986,542
------------
Total investment income................................... 36,110,848
------------
Expenses:
Investment management and administration fees (Note 2)...... 6,301,399
Service and distribution expenses: (Note 2)
Class A.................................. $ 1,035,465
Class B.................................. 3,539,336 4,574,801
------------
Transfer agent fees (Note 2)................................ 1,373,300
Custodian fees (Note 1)..................................... 520,103
Printing and postage expenses............................... 413,672
Fund accounting fees (Note 2)............................... 165,947
Registration and filing fees................................ 118,965
Audit fees.................................................. 59,085
Legal fees.................................................. 39,930
Directors' fees and expenses (Note 2)....................... 17,950
Amortization of organization costs (Note 1)................. 17,648
Insurance expenses.......................................... 12,047
------------
Total expenses before reductions.......................... 13,614,847
------------
Expense reductions (Notes 1 & 5)........................ (232,599)
------------
Total net expenses........................................ 13,382,248
------------
Net investment income......................................... 22,728,600
------------
Net realized and unrealized gain (loss) on
investments and foreign currencies: (Note 1)
Net realized gain on investments........... 13,795,663
Net realized loss on foreign currency
transactions.............................. (31,706,057)
------------
Net realized loss during the year......................... (17,910,394)
Net change in unrealized depreciation on
translation of assets and liabilities in
foreign currencies........................ (583,752)
Net change in unrealized appreciation of
investments............................... 32,281,086
------------
Net unrealized appreciation during the year............... 31,697,334
------------
Net realized and unrealized gain on investments and foreign
currencies................................................... 13,786,940
------------
Net increase in net assets resulting from operations.......... $ 36,515,540
------------
------------
</TABLE>

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

F-10
<PAGE>
G.T. GLOBAL GROWTH & INCOME 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...................... $ 22,728,600 $ 17,564,361
Net realized gain (loss) on investments and
foreign currency transactions............. (17,910,394) 8,687,940
Net change in unrealized depreciation on
translation of assets and liabilities in
foreign currencies........................ (583,752) (1,672,868)
Net change in unrealized appreciation
(depreciation) of investments............. 32,281,086 (9,822,058)
----------------- -----------------
Net increase in net assets resulting from
operations.............................. 36,515,540 14,757,375
Class A:
Distributions to shareholders: (Note 1)
From net investment income................. (10,790,288) (9,757,675)
From net realized gain on investments...... (506,546) (3,136,804)
Class B:
Distributions to shareholders: (Note 1)
From net investment income................. (10,618,028) (7,806,686)
From net realized gain on investments...... (580,255) (2,807,047)
Advisor Class:
Distributions to shareholders: (Note 1)
From net investment income................. (18,236) 0
----------------- -----------------
Total distributions...................... (22,513,353) (23,508,212)
----------------- -----------------
Capital share transactions: (Note 4)
Increase from capital shares sold and
reinvested................................ 150,425,919 385,623,629
Decrease from capital shares repurchased... (199,707,569) (101,979,754)
----------------- -----------------
Net increase (decrease) from capital
share transactions...................... (49,281,650) 283,643,875
----------------- -----------------
Total increase (decrease) in net assets...... (35,279,463) 274,893,038
Net assets:
Beginning of year.......................... 677,089,048 402,196,010
----------------- -----------------
End of year................................ $ 641,809,585 $ 677,089,048
----------------- -----------------
----------------- -----------------
</TABLE>

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

F-11
<PAGE>
G.T. GLOBAL GROWTH & INCOME 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+
---------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------
1995 1994 1993(D) 1992 1991
--------- ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 6.21 $ 6.29 $ 5.28 $ 5.25 $ 4.77
--------- ----------- ----------- ---------- ----------
Income from investment operations:
Net investment income................. 0.24 0.22 0.24* 0.21* 0.27*
Net realized and unrealized gain
(loss) on investments................ 0.13 (0.03) 1.05 0.10 0.47
--------- ----------- ----------- ---------- ----------
Net increase (decrease) from
investment operations.............. 0.37 0.19 1.29 0.31 0.74
--------- ----------- ----------- ---------- ----------
Distributions to shareholders:
From net investment income............ (0.22) (0.21) (0.24) (0.14) (0.26)
From net realized gain on
investments.......................... (0.01) (0.06) -- (0.14) --
From sources other than net investment
income............................... -- -- (0.04) -- --
--------- ----------- ----------- ---------- ----------
Total distributions................. (0.23) (0.27) (0.28) (0.28) (0.26)
--------- ----------- ----------- ---------- ----------
Net asset value, end of period.......... $ 6.35 $ 6.21 $ 6.29 $ 5.28 $ 5.25
--------- ----------- ----------- ---------- ----------
--------- ----------- ----------- ---------- ----------
Total investment return (e)............. 6.27% 3.14% 25.1% 5.9% 15.68%
Ratios and supplemental data:
Net assets, end of period (in 000's).... $284,069 $317,847 $251,428 $27,754 $71,376
Ratio of net investment income to
average net assets..................... 3.85% 3.30% 3.3%* 4.1%* 5.0%*
Ratio of expenses to average net assets:
With expense reductions (Notes 1 &
5)................................... 1.70% 1.67% 1.8%* 1.9%* 1.9%*
Without expense reductions............ 1.74% --%** --%** --%** --%**
Portfolio turnover rate++++............. 83% 117% 24% 53% 46%
</TABLE>

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

+ 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.
+++ 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.
* Includes reimbursement by G.T. Capital Management, Inc. of Fund
operating expenses of $0.005, $0.02, and $0.03 for the year ended
October 31, 1993, 1992 and 1991, respectively. Without such
reimbursements, the expense ratios would have been 1.93%, 2.20% and
2.46% and the net investment income to average net assets would have
been 3.2%, 3.70% and 4.40%, for the year ended October 31, 1993, 1992
and 1991, respectively.
** Calculation of "Ratio of expenses to average net assets" was made
without considering the effect of expense reductions, if any.
(a) Not annualized.
(b) Annualized.
(c) Ratios are not meaningful due to short period of operations 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.

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

F-12
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND

FINANCIAL HIGHLIGHTS (CONT'D)

<TABLE>
<CAPTION>
CLASS B++ ADVISOR
------------------------------------------------------ CLASS+++
OCTOBER 22, ------------
YEAR ENDED 1992 JUNE 1, 1995
OCTOBER 31, TO TO
------------------------------------- OCTOBER 31, OCTOBER 31,
1995 1994 1993(D) 1992(D) 1995
--------- ----------- ----------- -------------- ------------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 6.21 $ 6.29 $ 5.28 $ 5.29 $ 6.24
--------- ----------- ----------- ------- ------------
Income from investment operations:
Net investment income................. 0.20 0.18 0.20 0.01 0.11
Net realized and unrealized gain
(loss) on investments................ 0.13 (0.03) 1.05 (0.02) 0.13
--------- ----------- ----------- ------- ------------
Net increase (decrease) from
investment operations.............. 0.33 0.15 1.25 (0.01) 0.24
--------- ----------- ----------- ------- ------------
Distributions to shareholders:
From net investment income............ (0.18) (0.17) (0.20) -- (0.13)
From net realized gain on
investments.......................... (0.01) (0.06) -- -- --
From sources other than net investment
income............................... -- -- (0.04) -- --
--------- ----------- ----------- ------- ------------
Total distributions................. (0.19) (0.23) (0.24) -- (0.13)
--------- ----------- ----------- ------- ------------
Net asset value, end of period.......... $ 6.35 $ 6.21 $ 6.29 $ 5.28 $ 6.35
--------- ----------- ----------- ------- ------------
--------- ----------- ----------- ------- ------------
Total investment return (e)............. 5.57% 2.48% 24.3% (0.2)%(a) 3.83%(a)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $356,796 $359,242 $150,768 $ 280 $ 944
Ratio of net investment income to
average net assets..................... 3.20% 2.65% 2.6% N/A(c) 4.20%(b)
Ratio of expenses to average net assets:
With expense reductions (Notes 1 &
5)................................... 2.35% 2.32% 2.5% N/A(c) 1.35%(b)
Without expense reductions............ 2.39% --%** --%** --%**(c) 1.39%(b)
Portfolio turnover rate++++............. 83% 117% 24% 53% 83%
</TABLE>

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

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

F-13
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND

NOTES TO
FINANCIAL STATEMENTS

October 31, 1995

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

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 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 on the principal over-the-counter market on 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.

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 of the Fund 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-14
<PAGE>
G.T. GLOBAL GROWTH & INCOME 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 and 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, United States government securities or
other high quality debt securities of which the value, including accrued
interest, is at least equal to the amount to be repaid to the 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. Forward Contracts involve market risk in excess of the
amounts shown in the Fund's "Statement of Assets and Liabilities." 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 Forward Contracts in connection with planned purchases or sales of
securities, or to hedge against adverse fluctuations in exchange rates between
currencies.

(E) OPTION ACCOUNTING PRINCIPLES
When the 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 security
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 or bond 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 realizes a loss in the amount of the cost of the
option. If the Fund enters into a closing sale transaction, the Fund realizes a
gain or loss, depending on whether proceeds from the closing sale transaction
are greater or less than the cost of the option. If the 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

F-15
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
of cash equal to the daily fluctuation in value of the contract. Such receipts
or payments are known as "variation margin" and are recorded by the 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 or bond 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 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 $62,622,697
were on loan to brokers. The loans were secured by cash collateral of
$66,191,073. 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 period ended October 31, 1995, the Fund received $192,015 of income from
securities lending which was used to offset the Fund's custody expenses.

(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
$24,154,904, 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 $107,435. These
expenses have been 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 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.

(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. At the end of the period, restricted
securities (excluding 144A issues) are shown at the end of the Fund's Portfolio
of Investments.

F-16
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND

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, 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
$80,112 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 $19,017 for the year 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 CDSC's in
the amount of $1,533,810. 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.

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%, 2.50%, and 1.50% 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

F-17
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND
ended October 31, 1995, the Fund paid fund accounting fees of $40,735 to G.T.
Capital.

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 and U.S. government
obligations, aggregated $445,884,925 and $478,744,953, respectively. Purchases
and sales of U.S. government obligations were $64,778,477 and $57,362,609,
respectively, 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. 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; 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
-------------------------- -------------------------
CLASS A: SHARES AMOUNT SHARES AMOUNT
----------- ------------- ---------- -------------
<S> <C> <C> <C> <C>
Shares sold................................................................ 11,447,072 $ 70,539,906 18,375,623 $ 115,141,878
Shares issued in connection with reinvestment of distributions............. 1,579,506 9,534,463 1,777,962 10,875,825
----------- ------------- ---------- -------------
13,026,578 80,074,369 20,153,585 126,017,703
Shares repurchased......................................................... (19,470,580) (119,773,578) (8,951,499) (55,403,713)
----------- ------------- ---------- -------------
Net increase (decrease).................................................... (6,444,002) $ (39,699,209) 11,202,086 $ 70,613,990
----------- ------------- ---------- -------------
----------- ------------- ---------- -------------
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, 1995 OCTOBER 31, 1994
-------------------------- -------------------------
CLASS B: SHARES AMOUNT SHARES AMOUNT
----------- ------------- ---------- -------------
<S> <C> <C> <C> <C>
Shares sold................................................................ 9,868,499 $ 60,082,182 39,929,440 $ 250,659,375
Shares issued in connection with reinvestment of distributions............. 1,542,069 9,322,768 1,464,527 8,946,551
----------- ------------- ---------- -------------
11,410,568 69,404,950 41,393,967 259,605,926
Shares repurchased......................................................... (13,074,922) (79,926,629) (7,536,482) (46,576,041)
----------- ------------- ---------- -------------
Net increase (decrease).................................................... (1,664,354) $ (10,521,679) 33,857,485 $ 213,029,885
----------- ------------- ---------- -------------
----------- ------------- ---------- -------------
</TABLE>

<TABLE>
<CAPTION>
JUNE 1, 1995
(COMMENCEMENT OF SALE OF
SHARES) TO OCTOBER 31,
1995
--------------------------
ADVISOR CLASS: SHARES AMOUNT
----------- -------------
<S> <C> <C> <C> <C>
Shares sold................................................................ 146,947 $ 928,364
Shares issued in connection with reinvestment of distributions............. 2,927 18,236
----------- -------------
149,874 946,600
Shares repurchased......................................................... (1,163) (7,362)
----------- -------------
Net increase............................................................... 148,711 $ 939,238
----------- -------------
----------- -------------
</TABLE>

F-18
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND

5. 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 $40,584 under these arrangements.

6. 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 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
For its fiscal year ended October 31, 1995, the total amount of income received
by the Fund from sources within foreign countries and possessions of the United
States was $0.228 per share (representing an approximate total of $22,862,317).
The total amount of taxes paid by the Fund to such countries was approximately
$0.019 per share (representing a total of $1,834,759).

Pursuant to Section 852 of the Internal Revenue Code, the Fund designates
$3,288,542 as capital gain dividends for the fiscal year ended October 31, 1995.

F-19
<PAGE>
G.T. GLOBAL GROWTH & INCOME FUND

NOTES

- --------------------------------------------------------------------------------
<PAGE>
GT GLOBAL GROWTH & INCOME 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.
<PAGE>
[LOGO]

GT Global, Inc.
Fifty California Street
27th Floor
San Francisco, California
94111-4624

DATED MATERIAL
PLEASE EXPEDITE