<PAGE>
LGT ASSET MANAGEMENT
OVER 25 YEARS
OF INVESTING
WORLDWIDE
GT GLOBAL
EMERGING
MARKETS
FUND
SEMIANNUAL REPORT
APRIL 30, 1996
[LOGO]
<PAGE>
TABLE
OF CONTENTS
<TABLE>
<S> <C>
Report from the Fund
Managers and Key
Portfolio Holdings... 1
Report of Independent
Accountants.......... F1
Financial
Statements........... F2
</TABLE>
<PAGE>
GT GLOBAL EMERGING MARKETS FUND
PORTFOLIO SUMMARY
INVESTMENT OBJECTIVE
The GT 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 in the world except the U.S.,
Canada, Japan, Australia, New Zealand and most of the countries of western
Europe.
PERFORMANCE SUMMARY
GT GLOBAL EMERGING MARKETS FUND
MSCI Emerging Markets Index
IFC Global Composite Index
GT Global MSCI Emerging IFC Global
Emerging Markets Markets Index Composite Index
---------------- ------------- ---------------
5.18.92 9525 10000 10000
9550 9974 9845
9358 9273 9470
9333 9063 9068
9100 8680 8886
8942 8500 8689
9258 9033 9129
9075 9091 9080
9034 9181 9167
9269 9136 9105
9529 9573 9537
9630 10019 9729
9915 10171 9902
10159 10311 9979
10176 10402 10195
10386 10530 10340
10956 11065 10812
11150 11420 11170
12107 12295 12038
12736 12992 12875
14857 15494 15354
15556 15922 15811
15053 15436 15272
13739 14153 14003
4.30.94 13270 14241 14082
13526 14689 14453
12945 14390 14187
13858 15353 15087
15787 16931 16730
16197 17390 17254
16051 16966 16889
15522 16172 16166
14299 15329 15273
12809 13649 13537
11988 13407 13367
12139 13595 13313
12711 13873 13523
13130 14361 14034
12934 14325 14007
13344 14543 14273
13077 14061 13718
12898 14216 13801
12354 13744 13394
11791 13400 13013
12318 13919 13391
13282 14551 14083
13237 14366 13994
13318 14569 14215
4.30.96 13612 15612 15270
The chart above shows the performance of the GT Global Emerging Markets Fund,
Class A shares, since the Fund's inception versus the various indices shown
above. This represents a cumulative return of 36.12% and an average annual total
return of 8.11% for the Fund. 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. A $10,000 investment in the Fund's Class B shares at
inception on 4/1/93 would have been valued at $13,628 on 4/30/96. This figure
reflects the maximum applicable contingent deferred sales charge (5% in the
first year, decreasing to 0% after six years). A $10,000 investment in Advisor
Class shares at inception on 6/1/95 would have been worth $10,421. Investors
should note that the Fund is a professionally managed mutual fund while the
indices are unmanaged, do not incur expenses and are not available for
investment.
AVERAGE ANNUAL TOTAL RETURNS+
APRIL 30, 1996
SHARE CLASS WITHOUT SALES CHARGE++ WITH SALES CHARGE
---------------------- ---------------------
1 YEAR LIFE OF FUND 1 YEAR LIFE OF FUND
------ ------------ ------ ------------
CLASS A* 7.09 9.45 2.01 8.11
CLASS B* 6.60 11.35 1.60 10.56
ADVISOR CLASS** N/A 4.21 N/A N/A
HISTORICAL PERFORMANCE++
ANNUAL RETURNS
1992 1993 1994 1995
---- ---- ---- ----
CLASS A -5.16* 64.46 -3.75 -13.86
CLASS B N/A 53.92* -4.28 -14.34
* The Fund began operations on May 18, 1992; Class B shares commenced 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 GT
Global. Please see the "Alternative Purchase Plan" section in the Fund's
prospectus.
+ Figures assume reinvestment of all dividends and capital gain
distributions at net asset value.
++ The above performance data do not reflect the maximum 4.75% sales
charge and the contingent deferred sales charge (5% in the first year,
decreasing to 0% after six years) for Class A and Class B shares,
respectively, which if included, would have reduced performance quoted.
The above data 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.
1
<PAGE>
INTERVIEW WITH THE PORTFOLIO MANAGER JONATHAN CHEW
Q HOW HAS THE FUND PERFORMED?
A The Fund performed well. For the six months ended April 30, 1996, the
Fund's total return was 10.11% for Class A shares (4.88% including the
maximum 4.75% sales charge) and 9.80% for Class B shares (4.80% including the
maximum 5% contingent deferred sales charge). Total returns for the
International Financial Corp. (IFC) Global and the IFC Free Indices were
14.01% and 15.15%, respectively. The total return for the Morgan Stanley
Capital International (MSCI) Emerging Markets Index was 13.59% for the
period, while the total return for the MSCI Emerging Markets Free Index was
13.32%. The IFC Indices are substantially similar to the MSCI Indices,(1)
except that they invest in larger companies than the MSCI Indices.
Q THE FUND'S PERFORMANCE HAS IMPROVED SIGNIFICANTLY SINCE LAST OCTOBER'S
ANNUAL REPORT. WHICH MARKETS CONTRIBUTED THE MOST?
A The Fund was buoyed by general strength across four of its key geographic
allocations - Hong Kong, Mexico, Malaysia and Brazil. South Africa was the
exception. We took some profits there, but it remained 12.9% of the Fund's
geographic holdings at April 30, 1996, as our medium-term outlook is still
positive.
Q WERE THERE ANY AREAS THAT DID NOT LIVE UP TO YOUR EXPECTATIONS?
A Over the six-month period, Thailand lagged the other ASEAN markets. During
late 1995, floods triggered fears of higher food prices and temporarily
dampened investor demand for construction materials such as cement. However,
we feel the period of tight money policy that caused Thailand to lag will
soon be over.
Q WHAT MARKETS WERE A POSITIVE SURPRISE?
A Given an uncertain political environment, the cancellation of the gigantic
Enron power project in late 1995 and a major stock market scandal, it is
perhaps surprising that India's stock market has risen by 11.53% (based on
the MSCI India Index) over the six-month period.
Q HOW DO YOU VIEW LATIN AMERICA? HAS THE ECONOMIC ENVIRONMENT IMPROVED SINCE
THE MEXICAN PESO DEVALUATION?
A We're very positive on developments in this region. In general, the Latin
American markets have been rising this year as investors have focused on
actual or potential economic recoveries.
Foreign investors, especially, have manifested their confidence in Mexico
this year: portfolio capital has returned to the stock market; the peso has
risen against the U.S. dollar; yields on 28-day Cetes have fallen to around
30%, the lowest level for about seven months; and inflation has slipped to
about 30% a year. We regard these developments as being consistent with a
slow pickup in economic growth after the slump of 1995. The Fund is focusing
on sectors we believe can benefit from a recovery in domestic demand such as
cement, construction and media. The Fund also holds two stocks listed in
Panama which are exposed to rising consumer demand in Mexico and elsewhere in
Latin America.
We remain fairly neutral to Brazil, despite a better looking economic
background, because of the extremely slow passage of the Reform of Social
Security bill through Brazil's legislative maze, and other disappointments
such as the recent privatization of its electric utility2 at the minimum
price. Following a reduction in interest rates from 4% per month to 2% per
month, and a removal of constraints on consumer credit, it appears reasonable
to expect that economic growth will increase later in the year. In the
meantime, the stock market has been buoyed by the strong results of Brazil's
telecoms giant,(2) whose tariffs increased by 500% last year.
We are also reasonably sanguine about the outlook for Argentina, where
financial virtue on the part of the government is being rewarded. Industrial
production is still lower than it was last year, but the rate of decrease is
slowing. Authorities have cut Value Added Tax on bank loan interest, bank
commissions and new homes from 21% to 10.5% and have slashed other taxes in a
move to provide an additional boost to domestic demand. The government was
able to issue US$250 million of 90-day Letes (Treasury bills) during April.
However, given that Argentina's export sector is relatively small, accounting
for only 10% or so of GDP, it is difficult to envisage that the successful
financial reforms will translate quickly into strong economic growth.
Q DID YOU MAKE ANY STRATEGIC CHANGES TO THE FUND'S HOLDINGS OVER THE SIX-
MONTH PERIOD?
A We took some profits in South Africa early in the year after a strong
performance through 1995. The stock market has been a laggard so far this
year, but we expect a better second half. The weakness in the U.S. bond
market has been a major contibutor to the lackluster performance of South
Africa's financial markets and to the weakness of the rand. The recent
departure of the National party from the Government of National Unity could
be a positive development for the medium term, given that it should increase
the ability of the dominant African National Congress to take full
responsibility for economic policies for which it will be held accountable by
investors. Nonetheless, based on our current expectations, we plan to retain
a significant holding of South African industrial stocks in the portfolio.
CONTINUED ON P.3
2
<PAGE>
INTERVIEW WITH THE PORTFOLIO MANAGER CONTINUED
We have also generally avoided some of the southern European emerging
markets. Portugal has had to contend with slow growth in western Europe at a
time when other economies in the vicinity offer lower wage rates. Austere
monetary and fiscal policies have kept a lid on domestic demand, corporate
earnings and share prices in Greece. Although Turkey's notoriously volatile
stock market has swung wildly in line with the ability of the government to
forge a coalition, there is no clear sign that the country's fiscal problems
will be addressed.
Q WHAT IS YOUR OUTLOOK GOING FORWARD? WHAT COUNTRIES OR SECTORS ARE YOU
POSITIVE ON AND WHY?
A We are positive on the outlook for emerging markets as a whole. A number
of positive developments have been taking shape: the Chinese economy is
accelerating once more; following the successful resolution of the Mexican
peso crisis, we believe the commitment of Latin American governments to
economic reform is no longer in doubt; and flows of portfolio capital from
U.S. retail investors to overseas (including emerging) financial markets have
been increasing.
Arguably the most important development in Asia-Pacific in 1997 will be the
possible acceleration of the PRC economy back towards its long-term average
real growth rate of about 10%. Inflation in the People's Republic of China
(PRC) has fallen from about 35% to below 15%. Strong growth in the Chinese
economy, in our opinion, should ease the political tensions surrounding the
transfer of sovereignty in Hong Kong in mid-1997, giving the PRC government
the opportunity and the incentive to ease policy. Although not, strictly
speaking, an emerging market, we believe Hong Kong should be the main
beneficiary of a revival in the fortunes of the PRC.
Elsewhere in Asia, the macroeconomic problems in ASEAN are slowly working out
of the system and current account imbalances are stabilizing, although
inflation still remains a problem in some countries. In effect, we believe we
are starting to see light at the end of the tunnel.
The strong performance of the small and illiquid stock markets of eastern
Europe so far this year suggests that investors have recognized many of the
positive developments taking place. The Czech Republic, where share prices
have risen by about a quarter, is in the throes of a wave of takeovers as
industries restructure and consolidate. An export boom has contributed to the
33% rise in Poland's stock market over the past six months (based on MSCI
Poland Index) and to an appreciation in the currency. We believe many of
these countries are well placed to benefit from the recovery in the German
economy that we expect to occur later in 1996. Notwithstanding the difficulty
in finding stocks of suitable quality and liquidity, we have been
overweighted in the eastern European markets and remain sanguine about the
opportunities these markets present.
Finally, in Latin America, while the performance of the Chilean market has
been weak over the past six months (the MSCI Chile Index returned -0.89%), we
believe higher commodity prices may soon be forthcoming, providing some
support to the staggering market. Moreover, the rise in foreign investment of
22.5% year-on- year to US$1.37 billion in the first quarter suggests the
merits of the Chilean economy continue to be recognized. Encouragingly, only
16% of this money flowed into the mining sector while the service and
industrial sectors received 38% and 27%, respectively, suggesting that the
economy continues to diversify as it grows.
ABOUT THE PORTFOLIO MANAGERS
JONATHAN CHEW - Emerging Markets Chief Investment Officer for LGT Asset
Management since 1993; Senior Portfolio Manager since 1989. Previous to
working for LGT Asset Management, Mr. Chew was an Investment Analyst for T.C.
Coombs from 1979-1989. He received his B.Sc. from Loughborough University.
JAMES M. BOGIN - Portfolio Manager for LGT Asset Management since 1993.
Previous to working for LGT Asset Management, Mr. Bogin was a Fund Manager
for Nomura Investment Management from 1989-1993. He received his B.A. from
Harvard College.
JOHN R. LEGAT - Portfolio Manager for LGT Asset Management since 1983. He
received his B.A. from Portsmouth Polytechnic in the UK.
(1) The MSCI Emerging Markets and IFC Indices are arithmetic averages,
weighted by market value, of the performance of securities listed on the
exchanges of 50 and 31 countries, respectively. They include the effect
of reinvested dividends and are measured in U.S. dollars.
(2) There is no assurance the Fund will hold these securities.
The indices are not available for investment and they do not incur the
effects of sales charges and professional management fees.
3
<PAGE>
ALLOCATION OF NET ASSETS
Finance 39.2%
Capital Goods 3.4%
Short-Term & Other 4.0%
Materials/Basic Industry 14.5%
Energy 12.4%
Consumer Non-Durables 9.5%
Multi Industry/Misc. 8.8%
Services 8.2%
Allocations will change based on current market conditions.
A complete listing may be found in the financials.
GEOGRAPHIC ALLOCATION OF NET ASSETS
APRIL 30, 1996 APRIL 30, 1995
-------------- --------------
ARGENTINA 1.6% 5.6%
AUSTRALIA 0.4% 0.3%
BOLIVIA 2.0% 1.3%
BRAZIL 8.5% 9.3%
CHILE 2.5% -
CHINA - 0.2%
COLOMBIA 0.5% 0.8%
CZECH REPUBLIC 2.5% 1.1%
GREECE 2.8% 0.4%
HONG KONG 12.1% 2.5%
INDIA 6.0% 6.3%
INDONESIA 0.1% 0.7%
KOREA 10.0% 12.5%
MALAYSIA 9.6% 1.5%
MEXICO 9.4% 8.1%
PAKISTAN 1.4% 2.5%
PANAMA 2.0% -
PERU - 1.6%
PHILIPPINES 0.5% 3.2%
POLAND 0.7% -
SINGAPORE - 4.6%
SOUTH AFRICA 12.9% 12.8%
THAILAND 9.8% 2.4%
TURKEY 0.9% 2.9%
UNITED KINGDOM 0.1% 0.2%
UNITED STATES & OTHER 1.3% 17.7%
VENEZUELA 0.9% 0.8%
ZIMBABWE 1.5% 0.7%
4
<PAGE>
GT GLOBAL EMERGING MARKETS FUND
KEY PORTFOLIO HOLDINGS*
<TABLE>
<CAPTION>
% of
Country Net Assets
------- ----------
<S> <C> <C>
PANAMERICAN BEVERAGES The largest soft drink bottler in Latin America and the largest Coca-Cola bottler MEXICO 2.8
outside of the United States, Panamerican's territory covers a population of
about 70 million people.
SIAM COMMERCIAL BANK As Thailand's fourth largest commercial bank, Siam Commercial Bank THAILAND 2.6
has over 400 branches throughout Thailand in addition to other branches
worldwide.
STATE BANK OF INDIA Provides a wide range of domestic banking and financial services. International INDIA 2.6
operations include export promotion and foreign currency and trade.
CEMEX, S.A. DE C.V. Mexico's largest cement producer, Cemex sells its ready-mix concrete and aggregates MEXICO 2.2
in 54 countries and also constructs and operates hotels in Mexico.
GRUPO CARSO, S.A. DE C.V. A conglomerate with holdings in Telmex (the Mexican telephone company, MEXICO 2.1
which accounts for 35% of earnings), Condumex (the cable manufacturer, 10% of earnings), two mining
companies (13% of earnings) and the Philip Morris franchise in Mexico (15% of earnings), the company
also derives revenues by investing in food and beverage, chemicals and the manufacture of porcelain.
KOREA ELECTRIC POWER KEPCO, the monopoly provider of electricity in Korea, is one of the largest SOUTH KOREA 2.0
integrated utility companies in the world.
SASOL The holding company for a group of companies that explore for and produce coal and crude oil, SOUTH AFRICA 2.0
and produce and market liquid fuels, pipeline gas, petrochemicals, plastics,
fertilizers, waxes, mining
explosives and polymers derived from coal and crude oil.
COMPANHIA ENERGETICA DE MINAS GERAIS (CEMIG) Providing electrical utility service, CEMIG produces, BRAZIL 2.0
transforms, transmits, distributes and markets electric power and related
services.
SA IRON & STEEL INDUSTRIAL CORP., LTD. (ISCOR) ISCOR is South Africa's largest steel producer, with SOUTH AFRICA 2.0
about 75% of the market. In our view, low operating margins, new management, strong domestic product
demand and an improving export market indicate a sharp rise in earnings over the medium term.
COMPANIA BOLIVIANA DE ENERGIA ELECTRICA A Bolivian geerator, transmitter and distributor of BOLIVIA 2.0
electricity.
</TABLE>
*There is no assurance the Fund will continue to hold these or any other
securities mentioned in this report
5
<PAGE>
GT GLOBAL
EMERGING
MARKETS
FUND
FINANCIAL
STATEMENTS
<PAGE>
GT GLOBAL EMERGING MARKETS FUND
REPORT OF
INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders of the GT 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 GT
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 April 30,
1996, the related statement of operations for the six months then ended, the
statements of changes in net assets for the six months then ended and for the
year ended October 31, 1995, and the financial highlights for the six months
ended April 30, 1996, for each of the three years in the period ended October
31, 1995, 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 April
30, 1996 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 GT
Global Emerging Markets Fund as of April 30, 1996, the results of its operations
for the six months then ended, the changes in its net assets for the six months
then ended and for the year ended October 31, 1995 and the financial highlights
for the six months ended April 30, 1996, for each of the three years in the
period ended October 31, 1995 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
JUNE 14, 1996
F1
<PAGE>
GT GLOBAL EMERGING MARKETS FUND
PORTFOLIO OF INVESTMENTS
April 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET % OF NET
EQUITY INVESTMENTS COUNTRY SHARES VALUE ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Finance (39.2%)
Siam Commercial Bank PLC - Foreign ........................ THAI 949,600 $ 13,994,030 2.6
BANKS-MONEY CENTER
State Bank of India Ltd. .................................. IND 1,573,850 13,845,318 2.6
BANKS-REGIONAL
Malayan Banking Bhd. ...................................... MAL 1,098,800 10,711,184 2.0
BANKS-MONEY CENTER
Banco LatinoAmericano de Exportaciones S.A. (Bladex)
"E"{\/} .................................................. PAN 192,400 10,654,150 2.0
OTHER FINANCIAL
HSBC Holdings PLC ......................................... HK 668,000 9,974,661 1.8
BANKS-MONEY CENTER
Henderson Land Development Co., Ltd. ...................... HK 1,250,000 8,968,972 1.7
REAL ESTATE
Commerce Asset Holdings Bhd.-/- ........................... MAL 1,244,000 8,483,633 1.6
BANKS-MONEY CENTER
Hang Seng Bank ............................................ HK 810,800 8,228,546 1.5
BANKS-MONEY CENTER
Siam City Bank Ltd. - Foreign ............................. THAI 6,454,600 7,734,883 1.4
BANKS-REGIONAL
National Finance & Securities Public Co., Ltd. -
Foreign .................................................. THAI 1,233,000 7,277,938 1.3
SECURITIES BROKER
Uniao Bancos Brasileiras "A" Preferred .................... BRZL 165,720,000 7,083,194 1.3
BANKS-MONEY CENTER
Land and House Co., Ltd. - Foreign ........................ THAI 383,400 5,923,464 1.1
REAL ESTATE
Public Bank Bhd. - Foreign ................................ MAL 1,839,000 5,274,731 1.0
BANKS-MONEY CENTER
Cheung Kong (Holdings) Ltd. ............................... HK 729,000 5,207,143 1.0
REAL ESTATE
Grupo Financiero Banamex Accival, S.A. de C.V.: ........... MEX -- -- 0.9
BANKS-REGIONAL
"B"-/- .................................................. -- 2,116,000 4,882,199 --
"L"-/- .................................................. -- 63,480 130,553 --
Samsung Securities Co., Ltd. .............................. KOR 114,120 4,985,968 0.9
SECURITIES BROKER
Banco Bradesco S.A. Preferred ............................. BRZL 437,192,750 4,936,047 0.9
BANKS-MONEY CENTER
Sun Hung Kai Properties Ltd. .............................. HK 505,000 4,814,964 0.9
REAL ESTATE
Commercial Bank of Korea-/- ............................... KOR 403,350 4,716,635 0.9
BANKS-MONEY CENTER
Credit Bank of Athens ..................................... GREC 88,566 4,436,485 0.8
BANKS-REGIONAL
Amalgamated Banks of South Africa ......................... SAFR 940,400 4,413,233 0.8
BANKS-REGIONAL
Komercni Banka ............................................ CZCH 50,000 3,908,501 0.7
BANKS-REGIONAL
Industrial Finance Corporation of Thailand - Foreign ...... THAI 963,000 3,891,217 0.7
BANKS-MONEY CENTER
Bank Gdanski S.A. - GDR-/- {\/} ........................... POL 347,600 3,649,800 0.7
BANKS-REGIONAL
</TABLE>
The accompanying notes are an integral part of the financial statements.
F2
<PAGE>
GT GLOBAL EMERGING MARKETS FUND
<TABLE>
<CAPTION>
MARKET % OF NET
EQUITY INVESTMENTS COUNTRY SHARES VALUE ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Finance (Continued)
AMMB Holdings Bhd. ........................................ MAL 223,400 $ 3,383,083 0.6
INVESTMENT MANAGEMENT
Kookmin Bank .............................................. KOR 131,862 3,288,671 0.6
BANKS-MONEY CENTER
Cho Hung Bank ............................................. KOR 211,000 3,279,692 0.6
BANKS-REGIONAL
Finance One Co., Ltd. - Foreign ........................... THAI 458,700 3,216,333 0.6
SECURITIES BROKER
Ergo Bank S.A. ............................................ GREC 60,230 3,033,148 0.6
BANKS-REGIONAL
Bangkok Bank Co., Ltd. - Foreign .......................... THAI 209,100 3,031,755 0.6
BANKS-MONEY CENTER
Bank of Ayudhya Ltd. - Foreign ............................ THAI 490,600 2,895,829 0.5
BANKS-REGIONAL
Land & General Bhd. ....................................... MAL 1,085,000 2,894,436 0.5
REAL ESTATE
New World Development Co., Ltd. ........................... HK 620,000 2,781,383 0.5
REAL ESTATE
Dongwon Securities Co.-/- ................................. KOR 109,700 2,762,940 0.5
SECURITIES BROKER
Banco Ganadero S.A. - ADR{\/} ............................. COL 150,000 2,325,000 0.4
BANKS-REGIONAL
Philippine Commercial International Bank-/- ............... PHIL 168,100 2,252,489 0.4
BANKS-MONEY CENTER
Henderson China Holding Ltd. .............................. HK 659,500 1,828,866 0.3
REAL ESTATE
Guangzhou Investment Co., Ltd. ............................ HK 7,278,000 1,806,562 0.3
REAL ESTATE
General Finance & Securities Co., Ltd. - Foreign .......... THAI 397,100 1,604,572 0.3
SECURITIES BROKER
Seoul Bank-/- ............................................. KOR 168,500 1,543,825 0.3
BANKS-REGIONAL
Shinhan Bank .............................................. KOR 49,510 1,258,427 0.2
BANKS-REGIONAL
Banco Itau S.A. Preferred ................................. BRZL 2,970,000 1,161,653 0.2
BANKS-REGIONAL
Korea First Bank-/- ....................................... KOR 50,000 523,002 0.1
BANKS-REGIONAL
Henderson Investment Ltd. ................................. HK 220,000 191,984 --
REAL ESTATE
Housing Development Finance Corp.-/- ...................... IND 272 24,165 --
OTHER FINANCIAL
HDFC Bank Ltd. - Subscription Shares-/- ................... IND 500 522 --
BANKS-MONEY CENTER
------------
213,215,786
------------
Materials/Basic Industry (14.5%)
Cemex, S.A. de C.V. "B" ................................... MEX 2,813,125 12,018,337 2.2
CEMENT
SA Iron & Steel Industrial Corp., Ltd. (ISCOR) ............ SAFR 11,797,200 10,799,291 2.0
METALS - STEEL
Pohang Iron & Steel Co., Ltd. ............................. KOR 98,529 9,343,922 1.7
METALS - STEEL
</TABLE>
The accompanying notes are an integral part of the financial statements.
F3
<PAGE>
GT GLOBAL EMERGING MARKETS FUND
<TABLE>
<CAPTION>
MARKET % OF NET
EQUITY INVESTMENTS COUNTRY SHARES VALUE ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Materials/Basic Industry (Continued)
Barlow Ltd. ............................................... SAFR 718,000 $ 8,278,216 1.5
CEMENT
Sappi Ltd. ................................................ SAFR 584,900 7,353,610 1.4
FOREST PRODUCTS
Kimberly-Clark de Mexico, S.A. de C.V. "A" ................ MEX 322,000 5,901,887 1.1
PAPER/PACKAGING
General Mining Union Corp. (Gencor) ....................... SAFR 1,440,400 5,791,643 1.1
METALS - NON-FERROUS
Kloof Gold Mining Co., Ltd. ............................... SAFR 474,800 5,666,790 1.0
GOLD
Companhia Vale do Rio Doce Preferred ...................... BRZL 273,600 5,019,677 0.9
METALS - NON-FERROUS
Ashanti Goldfields Co., Ltd. - GDR{\/} .................... SAFR 185,000 4,046,875 0.7
GOLD
Titan Cement Co., S.A. .................................... GREC 48,250 2,229,667 0.4
BUILDING MATERIALS & COMPONENTS
Paranapanema S.A. Min., Ind. E Construacao Preferred ...... BRZL 146,600,000 1,625,605 0.3
METALS - NON-FERROUS
Associated Cement Cos., Ltd.-/- ........................... IND 8,460 994,357 0.2
CEMENT
Dandot Cement Co. Ltd.-/- ................................. PAK 140,770 34,467 --
CEMENT
Engro Chemicals Pakistan Ltd. ............................. PAK 3,902 14,051 --
CHEMICALS
------------
79,118,395
------------
Energy (12.4%)
Korea Electric Power Corp.: ............................... KOR -- -- 2.0
ELECTRICAL & GAS UTILITIES
Common .................................................. -- 207,130 9,895,235 --
ADR{\/} ................................................. -- 43,500 1,207,125 --
Sasol Ltd. ................................................ SAFR 1,059,700 11,051,333 2.0
ENERGY SOURCES
Companhia Energetica de Minas Gerais (CEMIG): ............. BRZL -- -- 2.0
ELECTRICAL & GAS UTILITIES
Preferred ............................................... -- 235,000,000 5,922,379 --
ADR{\/} ................................................. -- 199,300 4,957,588 --
Compania Boliviana de Energia Electrica{::} {\/} .......... BOL 291,700 10,792,900 2.0
ELECTRICAL & GAS UTILITIES
Chilgener S.A. - ADR{\/} .................................. CHLE 447,400 10,010,575 1.8
ELECTRICAL & GAS UTILITIES
C.A. La Electricidad de Caracas ........................... VENZ 6,200,333 4,891,299 0.9
ELECTRICAL & GAS UTILITIES
Czeske Energeticke Zavody (CEZ AS)-/- ..................... CZCH 99,500 3,817,273 0.7
ELECTRICAL & GAS UTILITIES
Empresa Nacional de Electricidad S.A. - ADR{\/} ........... CHLE 121,600 2,371,200 0.4
ELECTRICAL & GAS UTILITIES
Electricidad de Argentina S.A.(.) -/- {\/} ................ ARG 100,000 1,360,000 0.3
ELECTRICAL & GAS UTILITIES
Dragon Oil PLC-/- ......................................... UK 18,230,152 445,407 0.1
OIL
Madras Refineries Ltd.-/- ................................. IND 199,500 390,326 0.1
OIL
</TABLE>
The accompanying notes are an integral part of the financial statements.
F4
<PAGE>
GT GLOBAL EMERGING MARKETS FUND
<TABLE>
<CAPTION>
MARKET % OF NET
EQUITY INVESTMENTS COUNTRY SHARES VALUE ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Energy (Continued)
Pakistan State Oil Co., Ltd. .............................. PAK 36,400 $ 336,578 0.1
OIL
------------
67,449,218
------------
Consumer Non-Durables (9.5%)
Panamerican Beverages, Inc. "A"{\/} ....................... MEX 342,800 15,040,350 2.8
BEVERAGES - NON-ALCOHOLIC
Companhia Cervejaria Brahma Preferred ..................... BRZL 17,254,543 8,296,791 1.5
BEVERAGES - ALCOHOLIC
Companhia Tecidos Norte de Mina Preferred ................. BRZL 18,490,000 7,753,871 1.4
TEXTILES & APPAREL
South African Breweries Ltd. .............................. SAFR 219,100 6,410,516 1.2
BEVERAGES - ALCOHOLIC
Hellenic Bottling Co. S.A. ................................ GREC 148,455 5,335,721 1.0
BEVERAGES - NON-ALCOHOLIC
Sun Brewing Ltd. - 144A GDR{.} -/- {\/} ................... TRKY 500,000 3,187,500 0.6
BEVERAGES - ALCOHOLIC
Quilmes Industrial S.A.: .................................. ARG -- -- 0.5
BEVERAGES - ALCOHOLIC
ADR{\/} ................................................. -- 223,600 2,655,250 --
Common .................................................. -- 1,900 22,800 --
Embotelladora Andina S.A. - ADR{\/} ....................... CHLE 44,000 1,540,000 0.3
BEVERAGES - NON-ALCOHOLIC
Dhan Fibres Ltd.-/- ....................................... PAK 6,114,000 1,144,769 0.2
TEXTILES & APPAREL
Mahavir Spinning Mills Ltd. ............................... IND 67,866 226,220 --
TEXTILES & APPAREL
Nishat Mills Ltd.-/- ...................................... PAK 45,712 34,894 --
TEXTILES & APPAREL
Dewan Salman Fibre Ltd.-/- ................................ PAK 60 73 --
TEXTILES & APPAREL
------------
51,648,755
------------
Multi Industry/Miscellaneous (8.8%)
Grupo Carso, S.A. de C.V.: ................................ MEX -- -- 2.1
CONGLOMERATE
"A1"-/- ................................................. -- 1,409,000 10,766,887 --
"A1" - 144A ADR{.} -/- {\/} ............................. -- 24,600 369,000 --
Hutchison Whampoa ......................................... HK 1,533,000 9,513,122 1.8
MULTI-INDUSTRY
Renong Bhd. ............................................... MAL 4,861,000 8,463,070 1.6
MULTI-INDUSTRY
Citic Pacific Ltd.-/- ..................................... HK 1,965,000 7,722,818 1.4
CONGLOMERATE
Swire Pacific Ltd. "A"-/- ................................. HK 389,000 3,319,198 0.6
MULTI-INDUSTRY
Koc Holding AS-/- ......................................... AUSL 6,838,200 1,999,739 0.4
CONGLOMERATE
KEC International Ltd.-/- ................................. IND 481,500 1,730,609 0.3
MISCELLANEOUS
Guangdong Investments ..................................... HK 2,776,000 1,713,691 0.3
CONGLOMERATE
BPL Ltd. .................................................. IND 648,700 1,325,604 0.2
MISCELLANEOUS
</TABLE>
The accompanying notes are an integral part of the financial statements.
F5
<PAGE>
GT GLOBAL EMERGING MARKETS FUND
<TABLE>
<CAPTION>
MARKET % OF NET
EQUITY INVESTMENTS COUNTRY SHARES VALUE ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Multi Industry/Miscellaneous (Continued)
Nicholas Piramel India Ltd.-/- ............................ IND 80,000 $ 678,261 0.1
MISCELLANEOUS
Grasim Industries Ltd. .................................... IND 6,500 112,101 --
MULTI-INDUSTRY
------------
47,714,100
------------
Services (8.2%)
Daewoo Corp.-/- ........................................... KOR 760,500 9,870,278 1.8
WHOLESALE & INTERNATIONAL TRADE
Resorts World Bhd. ........................................ MAL 1,276,000 7,729,300 1.4
LEISURE & TOURISM
SPT Telecom-/- ............................................ CZCH 50,000 6,123,919 1.1
TELEPHONE NETWORKS
Pakistan Telecommunications Co., Ltd. - GDR-/- {\/} ....... PAK 57,533 5,810,833 1.1
TELEPHONE NETWORKS
Berjaya Sports Toto Bhd. .................................. MAL 1,577,000 5,060,976 0.9
CONSUMER SERVICES
Metro Cash and Carry Ltd.-/- .............................. SAFR 960,000 3,782,155 0.7
RETAILERS-OTHER
McCarthy Retail Ltd. ...................................... SAFR 837,100 2,677,168 0.5
RETAILERS-OTHER
Cifra, S.A. de C.V. "B" - ADR-/- {\/} ..................... MEX 1,200,000 1,596,000 0.3
RETAILERS-OTHER
PT Indosat - Foreign-/- ................................... INDO 227,000 788,127 0.1
TELECOM - OTHER
Gran Cadena de Almacenes Colombianos S.A. ................. COL 460,000 528,487 0.1
RETAILERS-OTHER
Dusit Thani PLC - Foreign ................................. THAI 259,747 421,884 0.1
LEISURE & TOURISM
Keppel Philippine Holdings, Inc. "B" ...................... PHIL 1,157,076 341,098 0.1
TRANSPORTATION - SHIPPING
Indian Hotels Co., Ltd.-/- ................................ IND 3,000 67,391 --
LEISURE & TOURISM
------------
44,797,616
------------
Capital Goods (3.4%)
Delta Electrical Industries Ltd.-/- ....................... ZBBW 3,500,000 8,210,097 1.5
ELECTRICAL PLANT/EQUIPMENT
Tata Engineering and Locomotive Co., Ltd.-/- .............. IND 532,460 7,562,475 1.4
MACHINERY & ENGINEERING
Netas Telekomunik-/- ...................................... TRKY 7,060,020 1,829,993 0.3
TELECOM EQUIPMENT
Gujarat Telephone Cables-/- ............................... IND 1,417,900 801,422 0.2
TELECOM EQUIPMENT
------------
18,403,987
------------
Technology (1.0%)
Telecom Argentina S.A. - ADR{\/} .......................... ARG 90,100 4,077,025 0.8
TELECOM TECHNOLOGY
Himachal Telematics Ltd. .................................. IND 750,000 456,522 0.1
TELECOM TECHNOLOGY
</TABLE>
The accompanying notes are an integral part of the financial statements.
F6
<PAGE>
GT GLOBAL EMERGING MARKETS FUND
<TABLE>
<CAPTION>
MARKET % OF NET
EQUITY INVESTMENTS COUNTRY SHARES VALUE ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Technology (Continued)
Korea Mobile Telecom-/- ................................... KOR 290 $ 416,151 0.1
TELECOM TECHNOLOGY
------------
4,949,698
------------
Health Care (0.8%)
Ranbaxy Laboratories Ltd. ................................. IND 225,200 4,308,174 0.8
MEDICAL TECHNOLOGY & SUPPLIES
Core Healthcare-/- ........................................ IND 29,400 80,957 --
PHARMACEUTICALS
------------
4,389,131
------------
Consumer Durables (0.2%)
Samsung Electronics Co.: .................................. KOR -- -- 0.2
CONSUMER ELECTRONICS
New ..................................................... -- 7,049 931,323 --
Common .................................................. -- 1,642 223,660 --
------------
1,154,983
------------ -----
TOTAL EQUITY INVESTMENTS (cost $493,865,634) ................ 532,841,669 98.0
------------ -----
<CAPTION>
NO. OF MARKET % OF NET
WARRANTS (0.6%) COUNTRY WARRANTS VALUE ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Dhana Siam Finance & Securities Co., Ltd. Warrants, expire
10/28/98-/- .............................................. THAI 247,350 2,273,311 0.4
INVESTMENT MANAGEMENT
National Finance & Securities Public Co., Ltd. Warrants,
expire 11/15/99-/- ....................................... THAI 411,000 1,074,595 0.2
SECURITIES BROKER
Securities One Ltd. Warrants, expire 9/16/00-/- ........... THAI 20,883 69,905 --
SECURITIES BROKER
Dragon Oil PLC Warrants, expire 11/1/99-/- ................ UK 923,076 10,409 --
OIL
------------ -----
TOTAL WARRANTS (cost $2,831,393) ............................ 3,428,220 0.6
------------ -----
<CAPTION>
PRINCIPAL MARKET % OF NET
FIXED INCOME INVESTMENTS CURRENCY AMOUNT VALUE ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Corporate Bonds (0.1%)
Korea (0.1%)
Yukong Ltd., Convertible Bond, 1% due 12/31/98
(cost $544,589) ....................................... CHF 500,000 460,240 0.1
------------ -----
</TABLE>
The accompanying notes are an integral part of the financial statements.
F7
<PAGE>
GT GLOBAL EMERGING MARKETS FUND
<TABLE>
<CAPTION>
NO. OF MARKET % OF NET
RIGHTS (0.0%) COUNTRY RIGHTS VALUE ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Quilmes Industrial S.A. Rights, expire 5/3/96-/- .......... ARG 10,000 $ 60,500 --
BEVERAGES - ALCOHOLIC
Banco Comercial Portugues (BCP) Rights, expire
6/4/96-/- ................................................ PORT 68,180 26,086 --
BANKS-REGIONAL
------------ -----
TOTAL RIGHTS (cost $55,758) ................................. 86,586 --
------------ -----
TOTAL INVESTMENTS (cost $497,297,374) * ..................... 536,816,715 98.7
Other Assets and Liabilities ................................ 7,110,031 1.3
------------ -----
NET ASSETS .................................................. $543,926,746 100.0
------------ -----
------------ -----
<FN>
- --------------
-/- Non-income producing security.
{\/} U.S. currency denominated.
{.} 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.
(.) Restricted securities: At April 30, 1996, the Fund owned the
following restricted security constituting 0.3% of net assets which
may not be publicly sold without registration under the Securities
Act of 1933 (Note 1). Additional information on the restricted
security is as follows:
</TABLE>
<TABLE>
<CAPTION>
MARKET
VALUE
PER
DESCRIPTION ACQUISITION DATE SHARES COST SHARE
----------------------------------------------- ----------------- ------ ----------- ------
<S> <C> <C> <C> <C>
Electricidad de Argentina S.A.................. 12/23/93 100,000 $ 1,750,000 $13.60
</TABLE>
* For Federal income tax purposes, cost is $499,019,304 and appreciation
(depreciation) is as follows:
<TABLE>
<C> <S> <C>
Unrealized appreciation: $ 73,417,465
Unrealized depreciation: (35,620,054)
------------
Net unrealized appreciation: $ 37,797,411
------------
------------
</TABLE>
Abbreviations:
ADR--American Depository Receipt
GDR--Global Depository Receipt
The accompanying notes are an integral part of the financial statements.
F8
<PAGE>
GT GLOBAL EMERGING MARKETS FUND
The Fund's Portfolio of Investments at April 30, 1996, 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) .................. 1.6 1.6
Australia (AUSL/AUD) ................. 0.4 0.4
Bolivia (BOL/BOL) .................... 2.0 2.0
Brazil (BRZL/BRL) .................... 8.5 8.5
Chile (CHLE/CLP) ..................... 2.5 2.5
Colombia (COL/COP) ................... 0.5 0.5
Czech Republic (CZCH/CSK) ............ 2.5 2.5
Greece (GREC/GRD) .................... 2.8 2.8
Hong Kong (HK/HKD) ................... 12.1 12.1
India (IND/INR) ...................... 6.0 6.0
Indonesia (INDO/IDR) ................. 0.1 0.1
Korea (KOR/KRW) ...................... 9.9 0.1 10.0
Malaysia (MAL/MYR) ................... 9.6 9.6
Mexico (MEX/MXN) ..................... 9.4 9.4
Pakistan (PAK/PKR) ................... 1.4 1.4
Panama (PAN/PND) ..................... 2.0 2.0
Philippines (PHIL/PHP) ............... 0.5 0.5
Poland (POL/PLZ) ..................... 0.7 0.7
South Africa (SAFR/ZAR) .............. 12.9 12.9
Thailand (THAI/THB) .................. 9.2 0.6 9.8
Turkey (TRKY/TRL) .................... 0.9 0.9
United Kingdom (UK/GBP) .............. 0.1 0.1
United States & Other (US/USD) ....... 1.3 1.3
Venezuela (VENZ/VEB) ................. 0.9 0.9
Zimbabwe (ZBBW/ZWD) .................. 1.5 1.5
------ ----- ----- -----
Total ............................... 98.0 0.7 1.3 100.0
------ ----- ----- -----
------ ----- ----- -----
<FN>
- --------------
{d} Percentages indicated are based on net assets of $543,926,746.
</TABLE>
The accompanying notes are an integral part of the financial statements.
F9
<PAGE>
GT GLOBAL EMERGING MARKETS FUND
STATEMENT OF ASSETS
AND LIABILITIES
April 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Assets:
Investments in securities, at value (cost $497,297,374) (Note 1)................... $536,816,715
Foreign currencies (cost $7,808,027)............................................... 7,640,789
Receivable for securities sold..................................................... 9,651,232
Receivable for Fund shares sold.................................................... 2,586,198
Dividends and dividend withholding tax reclaims receivable......................... 2,131,926
Unamortized organizational costs (Note 1).......................................... 31,458
Interest receivable................................................................ 8,816
Cash held as collateral for securities loaned (Note 1)............................. 19,959,900
------------
Total assets..................................................................... 578,827,034
------------
Liabilities:
Due to custodian................................................................... 11,106,013
Payable for securities purchased................................................... 1,417,267
Payable for Fund shares repurchased................................................ 1,332,786
Payable for investment management and administration fees (Note 2)................. 428,675
Payable for service and distribution expenses (Note 2)............................. 322,960
Payable for transfer agent fees (Note 2)........................................... 137,499
Payable for printing and postage expenses.......................................... 91,181
Payable for custodian fees (Note 1)................................................ 48,958
Payable for professional fees...................................................... 32,407
Payable for fund accounting fees (Note 2).......................................... 10,920
Payable for registration and filing fees........................................... 5,694
Payable for Directors' fees and expenses (Note 2).................................. 790
Other accrued expenses............................................................. 5,238
Collateral for securities loaned (Note 1).......................................... 19,959,900
------------
Total liabilities................................................................ 34,900,288
------------
Net assets........................................................................... $543,926,746
------------
------------
Class A:
Net asset value and redemption price per share ($281,449,537 DIVIDED BY 18,458,063
shares outstanding)................................................................. $ 15.25
------------
------------
Maximum offering price per share (100/95.25 of $15.25) *............................. $ 16.01
------------
------------
Class B:+
Net asset value and offering price per share ($260,072,389 DIVIDED BY 17,309,451
shares outstanding)................................................................. $ 15.02
------------
------------
Advisor Class:
Net asset value, offering price per share, and redemption price per share ($2,404,820
DIVIDED BY 156,843 shares outstanding).............................................. $ 15.33
------------
------------
Net assets consist of:
Paid in capital (Note 4)........................................................... $535,303,045
Undistributed net investment income................................................ 3,018,378
Accumulated net realized loss on investments and foreign currency transactions..... (33,704,042)
Net unrealized depreciation on translation of assets and liabilities in foreign
currencies........................................................................ (209,976)
Net unrealized appreciation of investments......................................... 39,519,341
------------
Total -- representing net assets applicable to capital shares outstanding............ $543,926,746
------------
------------
<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.
F10
<PAGE>
GT GLOBAL EMERGING MARKETS FUND
STATEMENT OF OPERATIONS
Six months ended April 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Investment income: (Note 1)
Dividend income (net of foreign withholding tax of $158,537)............................... $ 6,324,005
Interest income............................................................................ 2,112,355
-----------
Total investment income.................................................................. 8,436,360
-----------
Expenses:
Investment management and administration fees (Note 2)..................................... 2,471,378
Service and distribution expenses: (Note 2)
Class A..................................................................... $ 670,310
Class B..................................................................... 1,186,659 1,856,969
-----------
Transfer agent fees (Note 2)............................................................... 945,854
Custodian fees (Note 1).................................................................... 277,204
Printing and postage expenses.............................................................. 100,464
Fund accounting fees (Note 2).............................................................. 63,662
Registration and filing fees............................................................... 49,720
Audit fees................................................................................. 41,840
Amortization of organization costs (Note 1)................................................ 14,951
Legal fees................................................................................. 13,104
Directors' fees and expenses (Note 2)...................................................... 5,824
Other expenses............................................................................. 4,674
-----------
Total expenses before reductions......................................................... 5,845,644
-----------
Expense reductions (Notes 1 & 6)....................................................... (387,149)
-----------
Total net expenses....................................................................... 5,458,495
-----------
Net investment income........................................................................ 2,977,865
-----------
Net realized and unrealized gain on investments and foreign currencies: (Note 1)
Net realized gain on investments.............................................. 4,905,809
Net realized loss on foreign currency transactions............................ (1,045,135)
-----------
Net realized gain during the period...................................................... 3,860,674
Net change in unrealized depreciation on translation of assets and liabilities
in foreign currencies........................................................ 159,753
Net change in unrealized appreciation of investments.......................... 44,202,936
-----------
Net unrealized appreciation during the period............................................ 44,362,689
-----------
Net realized and unrealized gain on investments and foreign currencies....................... 48,223,363
-----------
Net increase in net assets resulting from operations......................................... $51,201,228
-----------
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F11
<PAGE>
GT GLOBAL EMERGING MARKETS FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1996 OCTOBER 31, 1995
---------------- ----------------
Increase (Decrease) in net assets
Operations:
Net investment income......................................................... $ 2,977,865 $ 3,715,528
Net realized gain (loss) on investments and foreign currency transactions..... 3,860,674 (39,959,384)
Net change in unrealized appreciation (depreciation) on translation of assets
and liabilities in foreign currencies........................................ 159,753 (337,162)
Net change in unrealized appreciation (depreciation) of investments........... 44,202,936 (117,020,037)
---------------- ----------------
Net increase (decrease) in net assets resulting from operations............. 51,201,228 (153,601,055)
---------------- ----------------
Class A:
Distributions to shareholders: (Note 1)
From net realized gain on investments......................................... -- (15,193,744)
Class B:
Distributions to shareholders: (Note 1)
From net realized gain on investments......................................... -- (12,477,553)
---------------- ----------------
Total distributions......................................................... -- (27,671,297)
---------------- ----------------
Capital share transactions: (Note 4)
Increase from capital shares sold and reinvested.............................. 626,584,585 550,507,913
Decrease from capital shares repurchased...................................... (613,851,754) (597,853,943)
---------------- ----------------
Net increase (decrease) from capital share transactions..................... 12,732,831 (47,346,030)
---------------- ----------------
Total increase (decrease) in net assets......................................... 63,934,059 (228,618,382)
Net assets:
Beginning of period........................................................... 479,992,687 708,611,069
---------------- ----------------
End of period................................................................. $ 543,926,746* $ 479,992,687**
---------------- ----------------
---------------- ----------------
<FN>
- --------------
* Includes undistributed net investment income of $3,018,378.
** Includes undistributed net investment income of $40,513.
</TABLE>
The accompanying notes are an integral part of the financial statements.
F12
<PAGE>
GT GLOBAL EMERGING MARKETS FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
CLASS A+
----------------------------------------------------------------
MAY 18, 1992
SIX MONTHS (COMMENCEMENT
ENDED YEAR ENDED OCTOBER 31, OF OPERATIONS)
APRIL 30, ---------------------------------- TO OCTOBER 31,
1996 (D) 1995 (D) 1994 1993 1992
----------- ---------- ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 13.85 $ 18.81 $ 14.42 $ 11.10 $ 11.43
----------- ---------- ---------- ---------- ---------------
Income from investment operations:
Net investment income (loss).......... 0.11 0.13 (0.02) 0.02* * 0.07* *
Net realized and unrealized gain
(loss) on investments................ 1.29 (4.32) 4.68 3.38 (0.40)
----------- ---------- ---------- ---------- ---------------
Net increase (decrease) from
investment operations.............. 1.40 (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.......... $ 15.25 $ 13.85 $ 18.81 $ 14.42 $ 11.10
----------- ---------- ---------- ---------- ---------------
----------- ---------- ---------- ---------- ---------------
Total investment return (c)............. 10.11%(a) (23.04)% 32.58% 30.90% (2.90)% (a)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 281,450 $ 252,457 $ 417,322 $ 187,808 $ 84,558
Ratio of net investment income (loss) to
average net assets..................... 1.41%(b) 0.89% (0.11)% 0.1%** 1.7% **(b)
Ratio of expenses to average net assets:
With expense reductions (Notes 1 &
6)................................... 1.92%(b) 2.12% 2.06% 2.4%** 2.4% **(b)
Without expense reductions............ 2.07%(b) 2.14% --%* --%* --% *
Portfolio turnover rate++++............. 52%(b) 114% 100% 99% 32% (b)
Average commission rate paid on
portfolio transactions++++............. $ 0.0022 N/A N/A N/A N/A
</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 rate and average commission rate are 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 LGT Asset 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 LGT Asset 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 (loss) to
average net assets would have been (0.76%). See Note 2.
The accompanying notes are an integral part of the financial statements.
F13
<PAGE>
GT GLOBAL EMERGING MARKETS FUND
FINANCIAL HIGHLIGHTS (cont'd)
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
CLASS B++ ADVISOR CLASS+++
---------------------------------------------------- --------------------------
SIX MONTHS YEAR ENDED OCTOBER 31, APRIL 1, 1993 SIX MONTHS JUNE 1, 1995
ENDED TO ENDED TO
APRIL 30, ---------------------- OCTOBER 31, APRIL 30, OCTOBER 31,
1996 (D) 1995 (D) 1994 1993 1996 (D) 1995
----------- ---------- ---------- --------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 13.68 $ 18.68 $ 14.39 $ 11.47 $ 13.88 $ 14.71
----------- ---------- ---------- --------------- ----------- -------------
Income from investment operations:
Net investment income (loss).......... 0.06 0.06 (0.12) 0.00 * * 0.14 0.08
Net realized and unrealized gain
(loss) on investments................ 1.28 (4.29) 4.67 2.92 1.31 (0.91)
----------- ---------- ---------- --------------- ----------- -------------
Net increase (decrease) from
investment operations.............. 1.34 (4.23) 4.55 2.92 1.45 (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.......... $ 15.02 $ 13.68 $ 18.68 $ 14.39 $ 15.33 $ 13.88
----------- ---------- ---------- --------------- ----------- -------------
----------- ---------- ---------- --------------- ----------- -------------
Total investment return (c)............. 9.80%(a) (23.37)% 31.77% 25.50% (a) 10.45%(a) (5.71)%(a)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 260,072 $ 225,861 $ 291,289 $ 32,318 $ 2,405 $ 1,675
Ratio of net investment income (loss) to
average net assets..................... 0.91%(b) 0.39% (0.61)% (0.4)% ***(b) 1.91%(b) 1.39%(b)
Ratio of expenses to average net assets:
With expense reductions (Notes 1 &
6)................................... 2.42%(b) 2.62% 2.56% 2.9% ***(b) 1.42%(b) 1.62%(b)
Without expense reductions............ 2.57%(b) 2.64% --%* --% * 1.57%(b) 1.64%(b)
Portfolio turnover rate++++............. 52%(b) 114% 100% 99% 52%(b) 114%
Average commission rate paid on
portfolio transactions++++............. $ 0.0022 N/A N/A N/A $ 0.0022 N/A
</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 rate and average commission rate are 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 LGT Asset 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 LGT Asset 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 (loss) to
average net assets would have been (0.76%). See Note 2.
The accompanying notes are an integral part of the financial statements.
F14
<PAGE>
GT GLOBAL EMERGING MARKETS FUND
NOTES TO
FINANCIAL STATEMENTS
April 30, 1996
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
GT 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. 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, and
the financial statements may include certain estimates made by management.
(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 LGT Asset Management, Inc.
("LGT") 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 LGT
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 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 period
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
F15
<PAGE>
GT GLOBAL EMERGING MARKETS FUND
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, unless a quotation from only one
broker is available, in which case only that broker's price will be used. 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 "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 April 30, 1996, stocks with an aggregate value of approximately $19,036,588
were on loan to brokers. The loans were secured by cash collateral of
$19,959,900 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 period ended April 30, 1996, the Fund received securities lending fees of
$67,524 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
F16
<PAGE>
GT GLOBAL EMERGING MARKETS FUND
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 $149,510. 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
LGT is the Fund's investment manager and administrator. The Fund pays investment
management and administration fees to LGT 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.
GT Global, Inc. ("GT Global"), an affiliate of LGT, 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. GT Global collects the sales charges imposed on sales of Class A
shares, and reallows a portion of such charges to dealers through which the
sales are made. For the period ended April 30, 1996, GT Global retained $86,490
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. GT Global collected CDSCs in the
amount of $15,588 for the period ended April 30, 1996. GT 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, GT 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 period ended April 30, 1996, GT Global collected CDSCs in
the amount of $622,408. In addition, GT 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 GT Global for a portion of its shareholder servicing and distribution
expenses. Under the Class A Plan, the Fund may pay GT 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 GT Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay GT 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 GT Global's expenditures incurred in providing services as distributor.
All expenses for which GT 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 GT 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 GT Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay GT 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 GT Global's expenditures incurred in providing services as
distributor. Expenses incurred under the Class B Plan in excess of 1.00%
F17
<PAGE>
GT GLOBAL EMERGING MARKETS FUND
annually may be carried forward for reimbursement in subsequent years as long as
that Plan continues in effect.
LGT and GT 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 LGT
of investment management and administration fees, waivers by GT Global of
payments under the Class A Plan and/or Class B Plan and/or reimbursements by LGT
or GT Global of portions of the Fund's other operating expenses.
GT Global Investor Services, Inc. ("GT Services"), an affiliate of LGT and GT
Global, is the transfer agent of the Fund.
LGT is the pricing and accounting agent for the Fund. The monthly fee for these
services to LGT 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 LGT and
0.02% to the assets in excess of $5 billion and allocating the result according
to the Fund's average daily net assets.
The Company pays each of its Directors who is not an employee, officer or
director of LGT, GT Global or GT 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 period ended April 30, 1996, purchases and sales of investment
securities by the Fund, other than short-term investments, aggregated
$152,706,654 and $126,840,851, respectively. There were no purchases or sales of
U.S. government obligations by the Fund for the period ended April 30, 1996.
4. CAPITAL SHARES
At April 30, 1996, 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 GT Global
Health Care Fund; 200,000,000 were classified as shares of GT Global Strategic
Income Fund; 200,000,000 were classified as shares of GT Global Currency Fund
(inactive); 200,000,000 were classified as shares of GT Global Growth & Income
Fund; 200,000,000 were classified as shares of GT Global Small Companies Fund
(inactive); 200,000,000 were classified as shares of GT Global Latin America
Growth Fund; 400,000,000 were classified as shares of GT Global
Telecommunications Fund; 200,000,000 were classified as shares of GT Global High
Income Fund; 200,000,000 were classified as shares of GT Global Financial
Services Fund; 200,000,000 were classified as shares of GT Global Natural
Resources Fund; 200,000,000 were classified as shares of GT Global
Infrastructure Fund; and 200,000,000 were classified as shares of GT Global
Consumer Products and Services Fund. The shares of each of the foregoing series
of the Company were divided equally into two classes, designated as 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:
F18
<PAGE>
GT GLOBAL EMERGING MARKETS FUND
CAPITAL SHARE TRANSACTIONS
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1996 OCTOBER 31, 1995
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
CLASS A
- ----------------------------------------
Shares sold............................. 33,569,519 $ 487,492,699 26,517,243 $ 389,593,563
Shares issued in connection with
reinvestment of distributions......... -- -- 788,804 13,204,560
----------- ------------- ----------- -------------
33,569,519 487,492,699 27,306,047 402,798,123
Shares repurchased...................... (33,344,334) (486,866,814) (31,260,135) (469,990,809)
----------- ------------- ----------- -------------
Net increase (decrease)................. 225,185 $ 625,885 (3,954,088) $ (67,192,686)
----------- ------------- ----------- -------------
----------- ------------- ----------- -------------
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1996 OCTOBER 31, 1995
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
CLASS B
- ----------------------------------------
Shares sold............................. 9,418,808 $ 135,223,373 9,004,842 $ 135,163,005
Shares issued in connection with
reinvestment of distributions......... -- -- 637,782 10,599,912
----------- ------------- ----------- -------------
9,418,808 135,223,373 9,642,624 145,762,917
Shares repurchased...................... (8,619,599) (123,574,159) (8,726,345) (127,721,360)
----------- ------------- ----------- -------------
Net increase............................ 799,209 $ 11,649,214 916,279 $ 18,041,557
----------- ------------- ----------- -------------
----------- ------------- ----------- -------------
</TABLE>
<TABLE>
<CAPTION>
JUNE 1, 1995
(COMMENCEMENT OF SALE OF
SIX MONTHS ENDED SHARES) TO OCTOBER 31,
APRIL 30, 1996 1995
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
ADVISOR CLASS
- ----------------------------------------
Shares sold............................. 264,212 $ 3,868,513 130,495 $ 1,946,873
Shares issued in connection with
reinvestment of distributions......... -- -- -- --
----------- ------------- ----------- -------------
264,212 3,868,513 130,495 1,946,873
Shares repurchased...................... (228,087) (3,410,781) (9,777) (141,774)
----------- ------------- ----------- -------------
Net increase............................ 36,125 $ 457,732 120,718 $ 1,805,099
----------- ------------- ----------- -------------
----------- ------------- ----------- -------------
</TABLE>
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 April 30, 1996 amounted to $10,792,900,
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 Boliviana de Energia
Electrica............................. $ -- $ -- $ -- $ 113,771
</TABLE>
6. EXPENSE REDUCTIONS
LGT has directed certain portfolio trades to brokers who paid a portion of the
Fund's expenses. For the period ended April 30, 1996, the Fund's expenses were
reduced by $319,625 under these arrangements.
F19
<PAGE>
GT GLOBAL EMERGING MARKETS FUND
NOTES
- --------------------------------------------------------------------------------
<PAGE>
GT GLOBAL EMERGING MARKETS FUND
NOTES
- --------------------------------------------------------------------------------
<PAGE>
GT GLOBAL EMERGING MARKETS FUND
NOTES
- --------------------------------------------------------------------------------
<PAGE>
GT GLOBAL EMERGING MARKETS FUND
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 CONSUMER PRODUCTS AND SERVICES FUND
Invests in companies that manufacture, market, retail, or distribute consumer
products or services
GT GLOBAL FINANCIAL SERVICES FUND
Focuses on the worldwide opportunities from the demand for financial services
and products
GT GLOBAL HEALTH CARE FUND
Invests in growing health care industries worldwide
GT GLOBAL INFRASTRUCTURE FUND
Seeks companies that build, improve or maintain a country's infrastructure
GT GLOBAL NATURAL RESOURCES FUND
Concentrates on companies that own, explore or develop natural resources
GT GLOBAL TELECOMMUNICATIONS FUND
Invests in companies worldwide that develop, manufacture or sell
telecommunications services or equipment
/ / REGIONALLY DIVERSIFIED FUNDS
GT GLOBAL NEW PACIFIC GROWTH FUND
Offers access to the emerging and established markets of the Pacific Rim,
excluding Japan
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 SMALL CAP GROWTH FUND
Invests in equity securities of small U.S. companies
GT GLOBAL AMERICA GROWTH FUND
Concentrates on small and medium-sized companies in the U.S.
GT GLOBAL AMERICA VALUE FUND
Concentrates on equity securities of large cap 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
[LOGO]
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
GT GLOBAL EMERGING MARKETS FUND
EMESAR606075M
