<PAGE>
INVESTING IN
PHARMACEUTICALS
HEALTH CARE SERVICES
BIOTECHNOLOGY
MEDICAL TECHNOLOGY
GT GLOBAL
HEALTH CARE
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 Health Care Fund pursues its objective of long-term capital
appreciation by investing in the securities of a variety of health care
companies throughout the world. The Fund invests primarily in equity securities
of global health care companies, including those that specialize in
pharmaceuticals, biotechnology, medical devices and supplies, and health care
services. As one of the G.T. Global Theme Funds, the Fund invests in companies
we believe will benefit from economic, political and regulatory trends we see
developing in certain countries.
PERFORMANCE REVIEW
The Fund's total return for the 12 months ended October 31, 1995, was 19.79% for
Class A shares (14.10% including the maximum 4.75% sales charge). Total return
for Class B shares was 19.17% (14.17% including the maximum effect of the 5%
contingent deferred sales charge). Total return for the Morgan Stanley Capital
International (MSCI) World Index(1) over the same investment period was 10.03%,
while the MSCI Health and Personal Care Index(2) returned 39.85%. The indices
are not available for investment and they do not include the effects of sales
charges and professional management fees. For additional performance
information, please see page 8.
The MSCI Health and Personal Care Index is solely composed of health care
product companies, whereas the Fund invests in a broader category of health care
product and health care service companies. We underperformed the index because,
over the past period, the product companies (which were underweighted relative
to the index) significantly outperformed the service companies (which were
unrepresented in the index). Lastly, a small portion of the Fund's
underperformance relative to the index was due to our premature hedge back into
U.S. dollars during the first four months of 1995.
MARKET REVIEW
The past 12 months have been an exciting period for the health care industry
and, on balance, a rewarding time for the industry's investors. Indeed, from an
- ------------------
(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 MSCI Health and Personal Care Index is an arithmetic average, weighted
by market value, of the performance of 56 securities listed on major world
stock exchanges. It includes the effect of reinvested dividends and is
measured in U.S. dollars.
1
<PAGE>
investor's viewpoint, the health care industry has traveled in two short years
from being an investment pariah to a position where its recent formidable stock
performance has been surpassed only by the red-hot technology sector. Of course,
past performance is not an indication of future performance.
Looking back to the summer of 1994, health care equities, particularly health
care product companies, in our view, were significantly undervalued. The reasons
for this were twofold. First, there were the political uncertainties engendered
by President Clinton's attempts at health care reform. Many investors worried
that the entire U.S. health care system would effectively be nationalized,
accompanied by the customary trappings of centrally-planned economies such as
price limits, rationing and outlawing private transactions. Investors were
fearful that this type of government regulation would dramatically impair the
ability of health care companies to offer a decent return to their shareholders.
To compensate for this risk, P/E ratios (price per share divided by earnings per
share) declined significantly and stocks performed poorly.
This concern now seems almost farcical given that the political debate over
health care has moved to the other end of the ideological spectrum (e.g., how
fast should we privatize Medicare?). The political landscape has changed
dramatically since the November 1994 U.S. Congressional elections.
The second reason for the 30-month bear market in health care stocks, which
began in January 1992, centered around the market-based reform that was actually
taking place. This was, very simply, the shift from fee-for-service medicine
(where doctors and hospitals get paid more for doing more), toward prepaid,
"capitated" health care (where providers have a fixed amount of money and a
financial incentive to spend less, and focus on preventative care).
For the product companies, this meant weakening demand for their products (which
slowed down sales growth) and accompanying price declines (which hurt
profitability). With medical product companies traditionally enjoying some of
the highest profit margins of any industry, much of Wall Street believed this
"one-two punch" would send the entire medical products industry into a tailspin
for years to come. Although the environment undoubtedly became more competitive
for both service and product companies, the industry has nevertheless continued
its strong growth. Moreover, the U.S. FDA appears to have reduced approval times
for both drugs and medical devices which has helped these industries improve
revenue growth.
2
<PAGE>
Meanwhile, health care firms began to focus on operating efficiencies. Bloated
administrative expenses were reduced, R&D expenses streamlined, manufacturing
plants consolidated, product lines bundled, and a host of other measures taken
to increase competitiveness in the face of the new health care environment.
Consequently, corporate earnings have been decidedly more stable and robust than
was anticipated a year ago.
All these factors -- low valuations, better than expected earnings, an
increasingly optimistic outlook -- were augmented by a market environment that
increasingly favored growth companies over cyclicals. Growth companies typically
enjoy faster-than-average earnings growth, tend to have higher P/E ratios and
are generally more volatile. In contrast, earnings of cyclical companies usually
move with the economy. This set the stage for a strong sector rally in health
care stocks which, though over a year old, is continuing.
PORTFOLIO STRATEGY
The Fund continues to diversify across the health care industry, investing in
biotechnology, pharmaceuticals, medical technology and supplies, and health care
service companies. Although our exposure to managed care companies such as HMOs
had a positive effect on the Fund's performance from 1992 into 1994, for most of
the past 12 months these stocks and other service providers have not matched the
performance of the large capitalization pharmaceutical and medical device
stocks. Despite their stronger performance over the last few months, we feel
they will remain a volatile group.
We continue to prefer service companies that produce good revenue growth and
have management teams with strong track records. Nevertheless, we have reduced
our exposure to the service companies somewhat, while adding to our positions in
the product companies. We also slightly reduced our non-U.S. exposure, believing
that better values could be found for comparable companies here in the U.S.
Overall, though, we have not dramatically altered our broadly diversified
approach to investing in the health care industry. Of course, our holdings and
weightings are likely to change with changing market conditions.
In addition, we believe the Fund will benefit in the long term from a targeted
exposure to the biotechnology industry. While recognizing that biotechnology
firms are inherently high-risk investments, the Fund attempts to minimize risk
by targeting biotech companies with strong cash positions, close relationships
with large drug companies, products that are already approved or in late stages
of the
3
<PAGE>
approval process, clear technological expertise, and low valuations. We also
look for similar attributes in emerging medical device companies.
OUTLOOK
We believe the fundamentals that make health care an attractive growth industry
are straightforward. Advancing technology provides new products; people demand
the best health care available. The result is an industry with a record of
reliable growth, consistent innovation and high returns on capital, despite
attempts by governments everywhere to hold down health care costs. In fact, we
believe these attempts present more opportunities than risks as governments
increasingly use HMOs to "privatize" public health care spending.
Finally, we believe the powerful stimulus of demographics should not be
underestimated. The elderly are by far the largest consumers of health care.
They are also the fastest-growing segment of the population in most developed
countries, a trend we feel is almost certain to continue over the next few
decades.
Of course, there will always be some uncertainty regarding political
developments that may affect the regulatory guidelines surrounding health care
companies. Nevertheless, we anticipate that powerful demand factors, combined
with the industry's renewed focus on operating efficiencies and steady progress
on new, truly innovative medical advances, will position health care companies
to offer shareholders attractive ongoing returns in the coming years.
CHRISTIAN WIGNALL TED GOMOLL
CHIEF INVESTMENT OFFICER PORTFOLIO MANAGER
GLOBAL EQUITIES SAN FRANCISCO
SAN FRANCISCO MICHAEL YELLEN
RESEARCH ANALYST
SAN FRANCISCO
NOVEMBER 20, 1995
G.T. GLOBAL HEALTH CARE FUND
4
<PAGE>
KEY PORTFOLIO HOLDINGS*
PACIFICARE UNITED STATES
Pacificare remains the largest Medicare-risk HMO in the country. More than 50%
of its $4 billion in annual revenue comes from its medicare members. The company
has consistently increased membership in this medical program by 30% annually.
With the increased incentives the Federal government has given the elderly to
join HMOs instead of the traditional fee-for-service Medicare program, we
believe Pacificare is well positioned to capture much of this business.
MEDTRONIC UNITED STATES
Medtronic has been a leader for years in heart pacemakers and has used this
expertise to develop the leading market position in implantable defibrillators,
currently one of the fastest-growing products in the medical industry. We think
Medtronic shows strength in both the quality of its resources and the broadness
of its product line. In addition, we think that the company has a powerful
domestic and international marketing and distribution infrastructure.
CORDIS UNITED STATES
Cordis is one of the leading manufacturers of angiography and angioplasty
catheters. Angioplasty catheters are balloon-tipped devices used to reopen
clogged coronary arteries. Angiography catheters are used in the diagnosis part
of the procedure, to view the arteries. At the end of October, Cordis was in the
process of being acquired by Johnson & Johnson in a stock transaction for
$109/share (please see below).
ELI LILLY UNITED STATES
Eli Lilly is one of the world's largest pharmaceutical companies with one of the
industry's strongest new product lines. Specifically, two new drugs with
potential sales of over $1 billion each are expected to come to market.
Olanzapine is a breakthrough drug for schizophrenia that has a better side
effect profile than drugs currently on the market. Roloxifene, a drug for
menopausal women, has the positive effects of hormonal therapy (reducing bone
loss and benefiting the cardiovascular system) without the negative side effects
(the slight increased risk of uterine and breast cancer).
JOHNSON & JOHNSON UNITED STATES
Johnson & Johnson (J&J) is one of the largest, highest-quality health care
companies in the industry. Despite its large size, J&J's sales and earnings
growth
- --------------
* The Fund may or may not continue to hold these or any other securities
mentioned in this report.
5
<PAGE>
have been accelerating recently, driven by a promising new product line. J&J has
also benefited from its strong international presence, which accounts for half
of total sales. One of its fastest-growing products is the coronary stent, with
over $400 million in sales projected for this year. We believe the announced
acquisition of Cordis should propel this division to one of the world's most
formidable interventional cardiology participants.
ROCHE SWITZERLAND
Roche is one of the world's premier pharmaceutical companies. Based in
Switzerland, it is also one of the world's leading producers of fragrances and
vitamins. In our opinion, Roche should continue to experience strong earnings
growth over the next few years as as a result of its acquisition of the U.S.
pharmaceutical company Syntex. Roche has also been at the forefront of
supporting the early stage research by biotechnology companies, with many
corporate collaborations. In addition, Roche's majority ownership of Genentech
has provided access to a strong new line of biotechnology products which are
approaching market launch.
MERCK UNITED STATES
Merck is the world's second-largest pharmaceutical company. Its present
franchise is concentrated in cardiovascular and cholesterol drugs. Notably,
Zocor has seen accelerating growth this year as it became the first
cholesterol-lowering drug to be specifically indicated for lowering the
incidence of congestive heart failure and mortality. Fosamax, a new drug that
has been shown to dramatically slow the rate of bone loss in post-menopausal
women, could become significant in the treatment of osteoporosis.
AMGEN UNITED STATES
Amgen is the largest company in the biotechnology industry. Amgen's growth has
been driven by its two flagship products: Epogen, which stimulates production of
red blood cells; and Neupogen, a white blood cell stimulant. These two
proprietary drugs are used by kidney dialysis patients (Epogen) and cancer
chemotherapy patients (Neupogen). Amgen is plowing a significant portion of its
sales back into research and development, and has developed a promising product
line we believe should help maintain the growth of the company as Epogen and
Neupogen become mature products.
6
<PAGE>
SANDOZ SWITZERLAND
Sandoz is a premier pharmaceutical company based in Switzerland with leading
products in the areas of the central nervous system, oncology, transplantation/
immunology and dermatology. Sandoz is also undergoing an extensive
reorganization of its business lines, and is selling off its less profitable
chemical division. This divestiture should benefit the company by allowing
greater resources to be deployed for developing the substantial number of drugs
it currently has in clinical trials.
BAYER GERMANY
Based in Germany, Bayer is one of the world's leading chemical companies, with
an emphasis on pharmaceuticals. Bayer's health care operations should benefit
from increased sales of recombinant Factor VIII used in the treatment of
hemophilia. Bayer has significant exposure to European industry and, in our
opinion, should benefit from any acceleration in the economic growth of that
region.
7
<PAGE>
G.T. GLOBAL HEALTH CARE FUND
PORTFOLIO SUMMARY
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Month G.T. Global Health Care MSCI World Index
<S> <C> <C>
08/07/89 9525 10000
08/31/89 9608 9856
09/30/89 9650 10136
10/31/89 9858 9800
11/30/89 10200 10193
12/31/89 10368 10522
01/31/90 9900 10032
02/28/90 9908 9604
03/31/90 10184 9025
04/30/90 10184 8897
05/31/90 11286 9835
06/30/90 11587 9767
07/31/90 11612 9858
08/31/90 10844 8937
09/30/90 10409 7996
10/31/90 10718 8744
11/30/90 11445 8602
12/31/90 11729 8784
01/31/91 12509 9107
02/28/91 13546 9951
03/31/91 14326 9660
04/30/91 14034 9737
05/31/91 14737 9959
06/30/91 14051 9346
07/31/91 15045 9789
08/31/91 15422 9759
09/30/91 15576 10017
10/31/91 16527 10181
11/30/91 15902 9739
12/31/91 18518 10450
01/31/92 18276 10258
02/29/92 17517 10083
03/31/92 16344 9610
04/30/92 15317 9745
05/31/92 15679 10135
06/30/92 15066 9797
07/31/92 15679 9824
08/31/92 15291 10065
09/30/92 14946 9974
10/31/92 15058 9706
11/30/92 16007 9881
12/31/92 16016 9963
01/31/93 15446 9998
02/28/93 13444 10237
03/31/93 13634 10832
04/30/93 13720 11336
05/31/93 14540 11599
06/30/93 14583 11504
07/31/93 14195 11743
08/31/93 14298 12283
09/30/93 14868 12058
10/31/93 15412 12392
11/30/93 15567 11693
12/31/93 16433 12267
01/31/94 17550 13078
02/28/94 16849 12911
03/31/94 15749 12357
04/30/94 15714 12741
05/31/94 15654 12776
06/30/94 14814 12743
07/31/94 15437 12987
08/31/94 17030 13381
09/30/94 17022 13031
10/31/94 16970 13404
11/30/94 16554 12825
12/31/94 16481 12952
01/31/95 17012 12760
02/28/95 17338 12949
03/31/95 17897 13575
04/30/95 17450 14051
05/31/95 17385 14174
06/30/95 17664 14172
07/31/95 18773 14884
08/31/95 19127 14555
09/30/95 20049 14982
10/31/95 20329 14749
* Index return without dividends before Dec 93, with dividends after Dec
93
<CAPTION>
Month MSCI Health and Personal Care Index*
<S> <C>
08/07/89 10000
08/31/89 10034
09/30/89 10347
10/31/89 10050
11/30/89 10365
12/31/89 10564
01/31/90 10219
02/28/90 9696
03/31/90 9513
04/30/90 9668
05/31/90 10734
06/30/90 11097
07/31/90 11452
08/31/90 10502
09/30/90 9870
10/31/90 10758
11/30/90 11139
12/31/90 11243
01/31/91 11550
02/28/91 12607
03/31/91 12807
04/30/91 12852
05/31/91 13214
06/30/91 12603
07/31/91 13522
08/31/91 13790
09/30/91 13950
10/31/91 14712
11/30/91 14453
12/31/91 16468
01/31/92 15572
02/29/92 15263
03/31/92 14554
04/30/92 14471
05/31/92 15087
06/30/92 14553
07/31/92 15213
08/31/92 15276
09/30/92 14813
10/31/92 14685
11/30/92 14847
12/31/92 14649
01/31/93 13688
02/28/93 13239
03/31/93 13387
04/30/93 13991
05/31/93 14405
06/30/93 13779
07/31/93 13123
08/31/93 13819
09/30/93 13950
10/31/93 14359
11/30/93 14161
12/31/93 14628
01/31/94 15124
02/28/94 14542
03/31/94 13906
04/30/94 14245
05/31/94 14437
06/30/94 14446
07/31/94 14429
08/31/94 15598
09/30/94 15579
10/31/94 16022
11/30/94 16077
12/31/94 16425
01/31/95 16837
02/28/95 17335
03/31/95 18319
04/30/95 18973
05/31/95 19209
06/30/95 19974
07/31/95 20632
08/31/95 20275
09/30/95 21750
10/31/95 22406
* Index return without dividends before Dec 93, with dividends after Dec
93
</TABLE>
THE CHART AT RIGHT SHOWS THE PERFORMANCE OF THE G.T. GLOBAL
HEALTH CARE FUND CLASS A SHARES SINCE THE FUND'S INCEPTION VERSUS THE MSCI WORLD
INDEX AND THE MSCI HEALTH AND PERSONAL CARE INDEX. THIS REPRESENTS A CUMULATIVE
RETURN OF 103.29% AND AN AVERAGE ANNUAL TOTAL RETURN OF 12.05%. 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
INDICES ARE UNMANAGED, DO NOT INCUR EXPENSES AND ARE 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.
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* 19.79% 13.66% 12.93% 14.10% 12.56% 12.05%
CLASS B** 19.17% N/A 16.71% 14.17% N/A 15.79%
ADVISOR
CLASS*** N/A N/A 17.10% N/A N/A N/A
</TABLE>
* The Fund began operations on August 7, 1989.
** The Fund began offering Class B shares on April 1, 1993.
*** The Fund began offering Advisor Class shares on June 1, 1995. Advisor Class
shares are not sold directly to the general public and are only available
through certain employee benefit plans, financial institutions and other
entities that have entered into specific agreements with G.T. Global. Please
see the "Alternative Purchase Plan" section in the Fund's prospectus.
+ Figures assume reinvestment of all dividends and capital gains distributions
at net asset value.
++ The performance of the Class A and Class B shares reflects the effects of
the maximum 4.75% sales charge or the maximum applicable contingent deferred
sales charge (5% in first year, decreasing to 0% after six years).
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>
North America 76.90%
Europe 19.60%
Asia-Pacific 3.50%
100.00%
SECTOR ALLOCATION OF NET ASSETS
AS OF OCTOBER 31, 1995
Pharmaceuticals 38.80%
Health Care Services 24.00%
Medical Technology & Supplies 23.60%
Biotechnology 8.00%
Short-Term & Other 5.60%
100.00%
</TABLE>
ALLOCATIONS WILL CHANGE BASED ON CURRENT MARKET CONDITIONS.
8
<PAGE>
GT GLOBAL
HEALTH CARE
FUND
FINANCIAL
STATEMENTS
<PAGE>
G.T. GLOBAL HEALTH CARE FUND
REPORT OF
INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
ANNUAL REPORT
To the Shareholders of G.T. Global Health Care 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 Health Care Fund, one of the funds organized as a series of G.T.
Investment Funds, Inc., including the portfolio of investments, as of October
31, 1995, the related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the 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 Health Care 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 HEALTH CARE FUND
PORTFOLIO OF INVESTMENTS
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Country Shares Value Assets {d}
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Pharmaceuticals (38.8%)
Eli Lilly & Co. ........................................... US 200,000 $ 19,325,000 3.9
Roche Holdings AG Genusscheine ............................ SWTZ 2,500 18,173,407 3.7
Merck & Co., Inc. ......................................... US 300,000 17,250,000 3.5
Sandoz AG - Registered .................................... SWTZ 15,000 12,384,351 2.5
Bayer AG ................................................. GER 45,000 11,971,861 2.4
Pfizer, Inc. .............................................. US 200,000 11,475,000 2.3
American Home Products Corp. .............................. US 100,000 8,862,500 1.8
Elan Corp., PLC - ADR-/- {\/} ............................. IRE 200,000 8,025,000 1.6
Sanofi S.A. ............................................... FR 110,000 7,018,308 1.4
Warner-Lambert Co. ........................................ US 80,000 6,810,000 1.4
Ethical Holdings PLC - ADR{::} -/- {\/} ................... UK 730,000 6,478,750 1.3
Ares-Serono Group "B" ..................................... SWTZ 9,220 6,052,428 1.2
Takeda Chemical Industries ................................ JPN 400,000 5,635,456 1.1
Schering-Plough Corp. ..................................... US 100,000 5,362,500 1.1
SmithKline Beecham PLC - ADR Units{\/} .................... UK 100,000 5,187,500 1.0
Upjohn Co. ................................................ US 100,000 5,075,000 1.0
Sankyo Co., Ltd. .......................................... JPN 220,000 4,842,970 1.0
Allergan, Inc. ............................................ US 160,000 4,700,000 0.9
R.P. Scherer Corp.-/- ..................................... US 100,000 4,450,000 0.9
Astra AB "B" Free ......................................... SWDN 120,000 4,341,599 0.9
Teva Pharmaceutical Industries Ltd. - ADR{\/} ............. ISRL 100,000 3,925,000 0.8
Roussel-Uclaf ............................................. FR 20,000 3,281,170 0.7
Santen Pharmaceutical ..................................... JPN 120,000 2,841,209 0.6
Pharmacia Aktiebolag - ADR{\/} ............................ SWDN 75,000 2,625,000 0.5
Advanced Therapeutic Systems-/- ........................... US 77,400 2,138,175 0.4
Merck KGaA-/- ............................................. GER 50,000 2,089,107 0.4
Dura Pharmaceuticals, Inc.-/- ............................. US 60,000 1,755,000 0.4
Therapeutic Discovery Corp. Units-/- ...................... US 100,000 675,000 0.1
------------
192,751,291
------------
Health Care Services (24.0%)
Pacificare Health Systems Inc.: ........................... US -- -- 5.4
"B"-/- .................................................. -- 275,000 20,006,250 --
"A"-/- .................................................. -- 100,000 7,050,000 --
United Healthcare Corp. ................................... US 200,000 10,625,000 2.1
Health Management Associates, Inc. "A"-/- ................. US 375,000 8,062,500 1.6
Columbia/HCA Healthcare Corp. ............................. US 150,000 7,368,750 1.5
Health Systems International, Inc. "A"-/- ................. US 200,000 6,075,000 1.2
Health Care & Retirement Corp.-/- ......................... US 200,000 5,875,000 1.2
Vencor, Inc.-/- ........................................... US 200,000 5,550,000 1.1
FHP International Corp.-/- ................................ US 200,000 4,850,000 1.0
HealthCare COMPARE Corp.-/- .............................. US 125,000 4,625,000 0.9
HEALTHSOUTH Corp.-/- ...................................... US 130,000 3,396,250 0.7
Coventry Corp.-/- ......................................... US 165,000 3,238,125 0.7
Wellpoint Health Networks, Inc. "A"-/- .................... US 100,000 3,050,000 0.6
Physician Reliance Network, Inc.-/- ....................... US 85,000 2,826,250 0.6
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-2
<PAGE>
G.T. GLOBAL HEALTH CARE FUND
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Country Shares Value Assets {d}
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Health Care Services (Continued)
Lincare Holdings, Inc.-/- ................................. US 99,000 $ 2,462,625 0.5
Apria Healthcare Group, Inc.-/- ........................... US 100,000 2,162,500 0.4
Humana, Inc.-/- ........................................... US 100,000 2,112,500 0.4
Total Renal Care Holdings, Inc.-/- ........................ US 100,000 2,037,500 0.4
Horizon/CMS Healthcare Corp.-/- ........................... US 100,000 2,025,000 0.4
Multicare Companies, Inc.-/- .............................. US 100,000 1,875,000 0.4
Cerner Corp.-/- ........................................... US 70,000 1,855,000 0.4
Owen Healthcare, Inc. .................................... US 100,000 1,825,000 0.4
Inphynet Medical Management, Inc.-/- ...................... US 100,000 1,800,000 0.4
Physicians Health Services, Inc. "A"-/- ................... US 50,000 1,662,500 0.3
Community Health Systems, Inc.-/- ......................... US 50,000 1,587,500 0.3
GranCare, Inc.-/- ........................................ US 100,000 1,462,500 0.3
Genesis Health Ventures, Inc.-/- .......................... US 44,600 1,287,825 0.3
Bergen Brunswig Corp. "A" ................................. US 50,000 1,037,500 0.2
Coastal Physician Group, Inc.-/- .......................... US 62,300 817,688 0.2
Physician Corporation of America-/- ....................... US 20,000 307,500 0.1
------------
118,916,263
------------
Medical Technology & Supplies (23.6%)
Medtronic, Inc. ........................................... US 425,000 24,543,750 4.9
Cordis Corp.-/- ........................................... US 200,000 22,100,000 4.4
Johnson & Johnson ......................................... US 225,000 18,337,500 3.7
Boston Scientific Corp.-/- ................................ US 200,000 8,425,000 1.7
Nellcor, Inc.-/- .......................................... US 128,000 7,360,000 1.5
Becton, Dickinson & Co. ................................... US 100,000 6,500,000 1.3
Target Therapeutics, Inc.-/- .............................. US 80,000 6,200,000 1.3
Fresenius AG Preferred .................................... GER 6,975 5,575,837 1.1
Amersham International PLC ................................ UK 300,000 4,556,662 0.9
MediSense, Inc.-/- ........................................ US 100,000 2,137,500 0.4
Orthologic Corp.-/- ....................................... US 200,000 1,925,000 0.4
St. Jude Medical, Inc.-/- ................................. US 30,000 1,597,500 0.3
TECNOL Medical Products, Inc.-/- .......................... US 75,000 1,425,000 0.3
Mentor Corp. .............................................. US 60,000 1,320,000 0.3
Sonus Pharmaceuticals, Inc.-/- ........................... US 150,000 1,200,000 0.2
Angeion Corp.-/- .......................................... US 150,000 1,143,750 0.2
Anesta Corp.-/- .......................................... US 100,000 1,062,500 0.2
ATS Medical, Inc.-/- ...................................... US 125,000 984,375 0.2
Maxxim Medical, Inc.-/- ................................... US 45,000 624,375 0.1
KeraVision, Inc.-/- ....................................... US 40,000 495,000 0.1
Molecular Dynamics, Inc.-/- ............................... US 80,000 480,000 0.1
------------
117,993,749
------------
Biotechnology (8.0%)
Amgen, Inc.-/- ............................................ US 300,000 14,400,000 2.9
Genzyme Corp.: ............................................ US -- -- 1.3
General Division-/- ..................................... -- 100,000 5,825,000 --
Tissue Repair Division-/- ............................... -- 13,499 241,295 --
Metra Biosystems, Inc.-/- ................................. US 200,000 3,700,000 0.7
Protein Design Labs, Inc.-/- .............................. US 200,000 3,350,000 0.7
COR Therapeutics, Inc.-/- ................................. US 300,000 3,112,500 0.6
Biochem Pharma, Inc.-/- .................................. CAN 70,000 2,677,500 0.5
Matrix Pharmaceutical, Inc.-/- ........................... US 100,000 1,450,000 0.3
Somatix Therapy Corp.-/- .................................. US 250,000 1,218,750 0.2
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-3
<PAGE>
G.T. GLOBAL HEALTH CARE FUND
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Country Shares Value Assets {d}
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Biotechnology (Continued)
Gilead Sciences, Inc.-/- .................................. US 50,000 $ 975,000 0.2
Neurex Corp.-/- ........................................... US 200,000 950,000 0.2
Univax Biologics, Inc.-/- ................................. US 100,000 631,250 0.1
Alpha-Beta Technology, Inc.-/- ............................ US 80,000 610,000 0.1
Ribi ImmunoChem Research, Inc.-/- ......................... US 100,000 450,000 0.1
Liposome Co., Inc. Convertible Preferred "A"-/- ........... US 10,000 310,000 0.1
Enzon, Inc. Preferred ..................................... US 16,000 105,000 --
------------
40,006,295
------------ -----
TOTAL EQUITY INVESTMENTS (cost $354,468,534) ................ 469,667,598 94.4
------------ -----
<CAPTION>
No. of Market % of Net
Warrants Country Warrants Value Assets {d}
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Elan Corp. - ADR Warrants, expire 8/12/98-/- .............. US 77,400 1,122,300 0.2
PHARMACEUTICALS
ATS Medical Inc. Warrants, expire 3/2/97-/- ............... US 125,000 78,125 --
MEDICAL TECHNOLOGY & SUPPLIES
------------ -----
TOTAL WARRANTS (cost $864,953) .............................. 1,200,425 0.2
------------ -----
<CAPTION>
Market % of Net
Repurchase Agreement Value Assets {d}
- ------------------------------------------------------------- ------------ -------------
<S> <C> <C> <C> <C>
Dated October 31, 1995 with State Street Bank & Trust
Company, due November 1, 1995 for an effective yield of
5.80% collateralized by $52,180,000 U.S. Treasury Strips
due 2/15/02 (market value of collateral is $36,112,125,
including accrued interest). (cost $34,975,634) ......... 34,975,634 7.0
------------ -----
TOTAL INVESTMENTS (cost $390,309,121) ...................... 505,843,657 101.6
Other Assets and Liabilities ................................ (8,184,630) (1.6)
------------ -----
NET ASSETS .................................................. $497,659,027 100.0
------------ -----
------------ -----
</TABLE>
- ----------------
{d} Percentages indicated are based on net assets of $497,659,027.
-/- Non-income producing security.
{\/} U.S. currency denominated.
{::} See Note 5 of Notes to Financial Statements.
{F} The principal amount should be read as units.
* For Federal income tax purposes, cost is $390,841,738 and
appreciation (depreciation) is as follows:
Unrealized appreciation: $ 122,972,190
Unrealized depreciation: (7,970,271)
-------------
Net unrealized appreciation: $ 115,001,919
-------------
-------------
Abbreviation:
ADR -- American Depository Receipt
The accompanying notes are an integral part of the financial statements.
F-4
<PAGE>
G.T. GLOBAL HEALTH CARE FUND
The Fund's Portfolio of Investments at October 31, 1995, was concentrated in the
following countries:
<TABLE>
<CAPTION>
Percentage of Net Assets {d}
--------------------------------------------
Fixed Income,
Rights & Short-Term
Country(Country Code/Currency Code) Equity Warrants & Other Total
- -------------------------------------- ------ ------------- ---------- ------
<S> <C> <C> <C> <C>
Canada (CAN/CAD) ..................... 0.5 0.5
France (FR/FRF) ...................... 2.1 2.1
Germany (GER/DEM) .................... 3.9 3.9
Ireland (IRE/IEP) .................... 1.6 1.6
Israel (ISRL/ILS) .................... 0.8 0.8
Japan (JPN/JPY) ...................... 2.7 2.7
Sweden (SWDN/SEK) .................... 1.4 1.4
Switzerland (SWTZ/CHF) ............... 7.4 7.4
United Kingdom (UK/GBP) .............. 3.2 3.2
United States (US/USD) ............... 70.8 0.2 5.4 76.4
------ --- --- ------
Total ............................... 94.4 0.2 5.4 100.0
------ --- --- ------
------ --- --- ------
<FN>
- ----------------
{d} Percentages indicated are based on net assets of $497,659,027.
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
OCTOBER 31, 1995
<TABLE>
<CAPTION>
Market Value Unrealized
(U.S. Contract Delivery Appreciation
Contracts to Buy: Dollars) Price Date (Depreciation)
- ---------------------------------------------------------------------------- ------------- ----------- --------- -------------
<S> <C> <C> <C> <C>
Deutsche Marks.............................................................. 1,778,980 1.42407 11/30/95 23,448
Japanese Yen................................................................ 1,237,648 97.97200 11/14/95 $ (53,537)
Japanese Yen................................................................ 753,351 100.01800 11/14/95 (16,512)
Japanese Yen................................................................ 1,029,516 99.87500 11/24/95 (21,798)
------------- -------------
Total Contracts to Buy (Payable amount $4,867,894)........................ 4,799,495 (68,399)
------------- -------------
THE VALUE OF CONTRACTS TO BUY AS A PERCENTAGE OF NET ASSETS IS .96%
Contracts to Sell:
Deutsche Marks.............................................................. 1,279,045 1.37700 11/03/95 28,145
Deutsche Marks.............................................................. 2,561,731 1.45648 11/30/95 (90,009)
French Francs............................................................... 1,935,154 4.81600 11/06/95 29,132
Japanese Yen................................................................ 2,152,431 91.70000 11/14/95 246,696
Japanese Yen................................................................ 3,815,674 92.70000 11/14/95 391,446
Japanese Yen................................................................ 1,907,837 96.50400 11/14/95 112,805
Japanese Yen................................................................ 1,029,516 95.10240 11/24/95 74,557
Japanese Yen................................................................ 2,456,978 96.52300 11/30/95 133,078
------------- -------------
Total Contracts to Sell (Receivable amount $18,064,216)................... 17,138,366 925,850
------------- -------------
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF NET ASSETS IS 3.44%
Total Open Forward Foreign Currency Contracts, Net........................ $ 857,451
-------------
-------------
</TABLE>
- ----------------
See Note 1 to the financial statements.
The accompanying notes are an integral part of the financial statements.
F-5
<PAGE>
G.T. GLOBAL HEALTH CARE FUND
STATEMENT OF ASSETS
AND LIABILITIES
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets:
Investments in securities, at value (cost
$390,309,121) (Note 1)........................... $505,843,657
Foreign currencies (cost $5,466,965).............. 5,461,800
Receivable for securities sold.................... 13,966,323
Receivable for Fund shares sold................... 3,110,272
Receivable for open forward foreign currency
contracts, net (Note 1).......................... 857,451
Dividends and dividend withholding tax reclaims
receivable....................................... 232,677
Cash held as collateral for securities loaned
(Note 1)......................................... 24,944,125
------------
Total assets.................................... 554,416,305
------------
Liabilities:
Payable for Fund shares repurchased (Note 2)...... 25,896,723
Payable for securities purchased.................. 3,974,762
Payable for forward foreign currency contracts --
closed (Note 1).................................. 968,248
Payable for investment management and
administration fees (Note 2)..................... 416,830
Payable for service and distribution expenses
(Note 2)......................................... 242,109
Payable for transfer agent fees (Note 2).......... 124,655
Payable for printing and postage expenses......... 64,476
Payable for professional fees..................... 34,148
Payable for registration and filing fees.......... 25,618
Payable for custodian fees (Note 1)............... 14,291
Payable for fund accounting fees (Note 2)......... 10,782
Payable for Directors' fees and expenses (Note
2)............................................... 1,229
Other accrued expenses............................ 39,282
Collateral for securities loaned (Note 1)......... 24,944,125
------------
Total liabilities............................... 56,757,278
------------
Net assets.......................................... $497,659,027
------------
------------
Class A:
Net asset value and redemption price per share
($426,380,030 DIVIDED BY 19,527,021 shares
outstanding)....................................... $ 21.84
------------
------------
Maximum offering price per share
(100/95.25 of $21.84) *............................ $ 22.93
------------
------------
Class B:+
Net asset value and offering price per share
($70,739,602 DIVIDED BY 3,280,666 shares
outstanding)....................................... $ 21.56
------------
------------
Advisor Class: (Notes 1 & 4)
Net asset value, offering price per share, and
redemption price per share
($539,395 DIVIDED BY 24,658 shares outstanding).... $ 21.88
------------
------------
Net assets consist of:
Paid in capital................................... $317,402,692
Accumulated net realized gain on investments and
foreign currency transactions.................... 63,862,315
Net unrealized appreciation on translation of
assets and liabilities in foreign currencies..... 859,484
Net unrealized appreciation of investments........ 115,534,536
------------
Total -- representing net assets applicable to
capital shares outstanding......................... $497,659,027
------------
------------
<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-6
<PAGE>
G.T. GLOBAL HEALTH CARE FUND
STATEMENT OF OPERATIONS
Year ended October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Investment income: (Note 1)
Dividend income (net of foreign withholding tax of
$137,619)................................................. $ 3,781,268
Interest income............................................ 1,320,732
Other income............................................... 99,687
-----------
Total investment income.................................. 5,201,687
-----------
Expenses:
Investment management and administration fees (Note 2)..... 4,453,857
Service and distribution expenses: (Note 2)
Class A.................................. $ 2,021,331
Class B.................................. 523,545 2,544,876
-----------
Transfer agent fees (Note 2)............................... 1,365,000
Printing and postage expenses.............................. 185,925
Custodian fees (Note 1).................................... 128,144
Fund accounting fees (Note 2).............................. 116,877
Registration and filing fees............................... 71,223
Audit fees................................................. 51,100
Legal fees................................................. 38,150
Directors' fees and expenses (Note 2)...................... 10,950
Insurance expenses......................................... 5,377
Other expenses............................................. 20,000
-----------
Total expenses before reductions......................... 8,991,479
-----------
Expense reductions (Notes 1 & 6)....................... (259,926)
-----------
Total net expenses....................................... 8,731,553
-----------
Net investment loss.......................................... (3,529,866)
-----------
Net realized and unrealized gain on
investments and foreign currencies: (Note 1)
Net realized gain on investments........... 71,316,381
Net realized loss on foreign currency
transactions.............................. (4,272,875)
-----------
Net realized gain during the year........................ 67,043,506
Net change in unrealized appreciation on
translation of assets and liabilities in
foreign
currencies................................ 961,568
Net change in unrealized appreciation of
investments............................... 19,234,934
-----------
Net unrealized appreciation during the year.............. 20,196,502
-----------
Net realized and unrealized gain on investments and foreign
currencies.................................................. 87,240,008
-----------
Net increase in net assets resulting from operations......... $83,710,142
-----------
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-7
<PAGE>
G.T. GLOBAL HEALTH CARE FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, 1995 OCTOBER 31, 1994
----------------- -----------------
Increase in net assets
<S> <C> <C>
Operations:
Net investment loss........................ $ (3,529,866) $ (5,648,191)
Net realized gain on investments and
foreign currency transactions............. 67,043,506 57,958,127
Net change in unrealized appreciation
(depreciation) on translation of assets
and liabilities in foreign currencies..... 961,568 (2,695,118)
Net change in unrealized appreciation
(depreciation) of investments............. 19,234,934 (4,582,027)
----------------- -----------------
Net increase in net assets resulting from
operations.............................. 83,710,142 45,032,791
Class A:
Distributions to shareholders: (Note 1)
From net realized gain on investments...... (27,521,553) --
In excess of net realized gain on
investments............................... -- (1,492,549)
Class B:
Distributions to shareholders: (Note 1)
From net realized gain on investments...... (2,846,079) --
In excess of net realized gain on
investments............................... -- (28,033)
----------------- -----------------
Total distributions...................... (30,367,632) (1,520,582)
----------------- -----------------
Capital share transactions: (Note 4)
Increase from capital shares sold and
reinvested................................ 1,635,173,338 785,204,559
Decrease from capital shares repurchased... (1,668,897,114) (820,493,437)
----------------- -----------------
Net decrease from capital share
transactions............................ (33,723,776) (35,288,878)
----------------- -----------------
Total increase in net assets................. 19,618,734 8,223,331
Net assets:
Beginning of year.......................... 478,040,293 469,816,962
----------------- -----------------
End of year................................ $ 497,659,027 $ 478,040,293
----------------- -----------------
----------------- -----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-8
<PAGE>
G.T. GLOBAL HEALTH CARE 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+
---------------------------------------------------------------
1995 1994(D) 1993(D) 1992 1991
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 19.60 $ 17.86 $ 17.44 $ 19.29 $ 12.83
----------- ----------- ----------- ----------- -----------
Income from investment operations:
Net investment income (loss).......... (0.15) (0.22) (0.15) (0.18) 0.03
Net realized and unrealized gain on
investments.......................... 3.73 2.02 0.57 (1.53) 6.78
----------- ----------- ----------- ----------- -----------
Net increase (decrease) from
investment operations.............. 3.58 1.80 0.42 (1.71) 6.81
----------- ----------- ----------- ----------- -----------
Distributions to shareholders:
From net investment income............ 0.00 0.00 0.00 0.00 (0.07)
From net realized gain on
investments.......................... (1.34) 0.00 0.00 (0.14) (0.28)
In excess of net realized gain on
investments.......................... 0.00 (0.06) 0.00 0.00 0.00
----------- ----------- ----------- ----------- -----------
Total distributions................. (1.34) (0.06) 0.00 (0.14) (0.35)
----------- ----------- ----------- ----------- -----------
Net asset value, end of period.......... $ 21.84 $ 19.60 $ 17.86 $ 17.44 $ 19.29
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Total investment return (c)............. 19.79% 10.11% 2.4% (8.9)% 54.2%
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 426,380 $ 438,940 $ 461,113 $ 655,867 $ 552,897
Ratio of net investment income (loss) to
average net assets..................... (0.72)% (1.23)% (0.90)% (0.97)% 0.19%
Ratio of expenses to average net assets:
With expense reduction................ 1.85% 1.98% 2.00% 2.05% 2.01%
Without expense reduction............. 1.91% --%* --%* --%* --%*
Portfolio turnover rate++++............. 99% 64% 61% 30% 23%
</TABLE>
- ----------------
+ All capital shares issued and outstanding as of March 31, 1993 were
reclassified as Class A shares.
++ Commencing April 1, 1993, the Fund began offering Class B shares.
+++ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
* Calculation of "Ratios of expenses to average net assets" was made
without considering the effect of expense reduction, if any.
(a) Not annualized.
(b) Annualized.
(c) Total investment return does not include sales charge.
(d) These selected per share data were calculated based upon weighted
average shares outstanding during the period.
The accompanying notes are an integral part of the financial statements.
F-9
<PAGE>
G.T. GLOBAL HEALTH CARE FUND
FINANCIAL HIGHLIGHTS (CONT'D)
- --------------------------------------------------------------------------------
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>
ADVISOR
CLASS B++ CLASS+++
---------------------------------------- -------------
APRIL 1, 1993 JUNE 1, 1995
YEAR ENDED OCTOBER 31, TO TO
----------------------- OCTOBER 31, OCTOBER 31,
1995(D) 1994(D) 1993(D) 1995
--------- ----------- -------------- -------------
<S> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 19.46 $ 17.80 $15.59 $18.66
--------- ----------- ------- -------------
Income from investment operations:
Net investment income (loss).......... (0.25) (0.32) (0.14) (0.02)
Net realized and unrealized gain on
investments.......................... 3.69 2.02 2.35 3.24
--------- ----------- ------- -------------
Net increase (decrease) from
investment operations.............. 3.44 1.70 2.21 3.22
--------- ----------- ------- -------------
Distributions to shareholders:
From net investment income............ 0.00 0.00 0.00 0.00
From net realized gain on
investments.......................... (1.34) 0.00 0.00 0.00
In excess of net realized gain on
investments.......................... 0.00 (0.04) 0.00 0.00
--------- ----------- ------- -------------
Total distributions................. (1.34) (0.04) 0.00 0.00
--------- ----------- ------- -------------
Net asset value, end of period.......... $ 21.56 $ 19.46 $17.80 $21.88
--------- ----------- ------- -------------
--------- ----------- ------- -------------
Total investment return (c)............. 19.17% 9.55% 14.2%(a) 17.10%(a)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $70,740 $39,100 $8,604 $ 539
Ratio of net investment income (loss) to
average net assets..................... (1.22)% (1.73)% (1.40)%(b) (0.22)%(b)
Ratio of expenses to average net assets:
With expense reduction................ 2.35% 2.48% 2.54%(b) 1.35%(b)
Without expense reduction............. 2.41% --%* --%* 1.41%(b)
Portfolio turnover rate++++............. 99% 64% 61% 99%
</TABLE>
- ----------------
+ All capital shares issued and outstanding as of March 31, 1993 were
reclassified as Class A shares.
++ Commencing April 1, 1993, the Fund began offering Class B shares.
+++ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
* Calculation of "Ratios of expenses to average net assets" was made
without considering the effect of expense reduction, if any.
(a) Not annualized.
(b) Annualized.
(c) Total investment return does not include sales charge.
(d) These selected per share data were calculated based upon weighted
average shares outstanding during the period.
The accompanying notes are an integral part of the financial statements.
F-10
<PAGE>
G.T. GLOBAL HEALTH CARE FUND
NOTES TO
FINANCIAL STATEMENTS
October 31, 1995
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
G.T. Global Health Care 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 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 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 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 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-11
<PAGE>
G.T. GLOBAL HEALTH CARE FUND
between the trade and settlement dates on securities transactions, and the
difference between the amounts of dividends, interest, and foreign withholding
taxes recorded on the Fund's books and the U.S. dollar equivalent of the amounts
actually received or paid. Net unrealized foreign exchange gains or losses arise
from changes in the value of assets and liabilities other than investments in
securities at year end, resulting from changes in exchange rates.
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Fund, it is the Fund's
policy to always receive, as collateral, 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 market and to fluctuation 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
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<PAGE>
G.T. GLOBAL HEALTH CARE 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 market and to fluctuations in
currency values or interest rates.
(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out basis, unless otherwise specified. Dividends are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Where a high
level of uncertainty exists as to its collection, income is recorded net of all
withholding tax with any rebate recorded when received. The Fund may trade
securities on other than normal settlement terms. This may increase the risk if
the other party to the transaction fails to deliver and causes the Fund to
subsequently invest at less advantageous prices.
(H) PORTFOLIO SECURITIES LOANED
At October 31, 1995, stocks with an aggregate value of approximately $24,415,520
were on loan to brokers. The loans were secured by cash collateral of
$24,944,125. For international securities, cash collateral is received by the
Fund against loaned securities in an amount at least equal to 105% of the market
value of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 103% of the market value of the loaned
securities during the period of the loan. For domestic securities, cash
collateral is received by the Fund against loaned securities in an amount at
least equal to 102% of the market value of the loaned securities at the
inception of each loan. This collateral must be maintained at not less than 100%
of the market value of the loaned securities during the period of the loan. For
the year ended October 31, 1995, the Fund received $188,401 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.
(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) 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.
In addition, the Fund may focus its investments in certain related health care
industries, subjecting the Fund to greater risk than a fund that is more
diversified.
(L) INDEXED SECURITIES
The Fund may invest in indexed securities whose value is linked either directly
or indirectly to changes in foreign currencies, interest rates, equities,
indices, or other reference instruments. Indexed securities may be more volatile
than the reference instrument itself, but any loss is limited to the amount of
the original investment.
(M) RESTRICTED SECURITIES
The Fund is permitted to invest in privately placed restricted securities. These
securities may be resold in transactions exempt from registration or to the
public if the securites are registered. Disposal of these securities may involve
time-consuming negotiations and expense, and prompt sale at an acceptable price
may be difficult.
2. RELATED PARTIES
G.T. Capital is the Fund's investment manager and
administrator. The Fund pays investment management 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
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<PAGE>
G.T. GLOBAL HEALTH CARE FUND
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
$67,325 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 $3,342 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 CDSCs in
the amount of $178,859. In addition, G.T. Global makes ongoing shareholder
servicing and trail commission payments to dealers whose clients hold Class B
shares.
Pursuant to Rule 12b-1 under the 1940 Act, the Company's Board of Directors has
adopted separate distribution plans with respect to the Fund's Class A shares
("Class A Plan") and Class B shares ("Class B Plan"), pursuant to which the Fund
reimburses G.T. Global for a portion of its shareholder servicing and
distribution expenses. Under the Class A Plan, the Fund may pay G.T. Global a
service fee at the annualized rate of up to 0.25% of the average daily net
assets of the Fund's Class A shares for G.T. Global's expenditures incurred in
servicing and maintaining shareholder accounts, and may pay G.T. Global a
distribution fee at the annualized rate of up to 0.50% of the average daily net
assets of the Fund's Class A shares, less any amounts paid by the Fund as the
aforementioned service fee, for G.T. Global's expenditures incurred in providing
services as distributor. All expenses for which G.T. Global is reimbursed under
the Class A Plan will have been incurred within one year of such reimbursement.
Pursuant to the Fund's Class B Plan, the Fund may pay G.T. Global a service fee
at the annualized rate of up to 0.25% of the average daily net assets of the
Fund's Class B shares for G.T. Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay G.T. Global a distribution fee at
the annualized rate of up to 0.75% of the average daily net assets of the Fund's
Class B Shares for G.T. Global's expenditures incurred in providing services as
distributor. Expenses incurred under the Class B Plan in excess of 1.00%
annually may be carried forward for reimbursement in subsequent years as long as
that Plan continues in effect.
G.T. Capital and G.T. Global voluntarily have undertaken to limit the Fund's
expenses (exclusive of brokerage commissions, taxes, interest, and extraordinary
expenses) to the maximum annual rate of 2.40%, 2.90%, and 1.90% of the average
daily net assets of the Fund's Class A and Class B shares, respectively. If
necessary, this limitation will be effected by waivers by G.T. Capital of
investment management and administration fees, waivers by G.T. Global of
payments under the Class A Plan and/ or Class B Plan and/or reimbursements by
G.T. Capital or G.T. Global of portions of the Fund's other operating expenses.
G.T. Global Investor Services, Inc. ("G.T. Services"), an affiliate of G.T.
Capital and G.T. Global, is the transfer agent of the Fund.
Effective May 1, 1995, G.T. Capital has assumed the role of pricing and
accounting agent for the Fund. The monthly fee for these services to G.T.
Capital is a percentage, not to exceed 0.03% annually, of the Fund's average
daily net assets. The annual fee rate is derived by applying 0.03% to the first
$5 billion of assets of all registered mutual funds advised by G.T. Capital
("G.T. Funds") and 0.02% to the assets in excess of $5 billion and dividing the
result by the aggregate assets of the G.T. Funds. For the period ended October
31, 1995, the Fund paid fund accounting fees of $30,660 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
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<PAGE>
G.T. GLOBAL HEALTH CARE FUND
$300 for each meeting of the board or any committee thereof attended by the
Director.
3. PURCHASES AND SALES OF SECURITIES
For the year ended October 31, 1995, purchases and sales of investment
securities by the Fund, other than short-term investments, aggregated
$432,262,470 and $488,668,484, respectively. There were no purchases or sales of
U.S. government obligations by the Fund for the year.
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 Strategic Income Fund; 200,000,000 were classified as shares of G.T.
Global Growth & Income Fund; 200,000,000 were classifed as G.T. Global Currency
Fund (inactive); 200,000,000 were classified as shares of G.T. Latin America
Growth Fund, and 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; and 200,000,000 were classified as shares of G.T. Global
Financial Services Fund; 200,000,000 were classified as shares of G.T. Global
Natural Resources Fund; 200,000,000 were classified as shares of G.T. Global
Infrastructure Fund; and 200,000,000 were classified as shares of G.T. Global
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
----------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------------- ----------- -------------
<S> <C> <C> <C> <C>
CLASS A:
Shares sold................... 78,194,828 $ 1,518,869,435 34,050,013 $ 640,715,739
Shares issued in connection
with reinvestment of
distributions............... 1,197,686 21,103,166 59,903 1,108,216
----------- --------------- ----------- -------------
79,392,514 1,539,972,601 34,109,916 641,823,955
Shares repurchased............ (82,265,383) (1,598,688,749) (37,533,619) (705,605,096)
----------- --------------- ----------- -------------
Net decrease.................. (2,872,869) $ (58,716,148) (3,423,703) $ (63,781,141)
----------- --------------- ----------- -------------
----------- --------------- ----------- -------------
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, 1995 OCTOBER 31, 1994
----------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------------- ----------- -------------
<S> <C> <C> <C> <C>
CLASS B:
Shares sold................... 4,710,190 $ 92,123,273 7,582,598 $ 143,354,981
Shares issued in connection
with reinvestment of
distributions............... 140,259 2,451,761 1,390 25,623
----------- --------------- ----------- -------------
4,850,449 94,575,034 7,583,988 143,380,604
Shares repurchased............ (3,578,957) $ (70,045,915) (6,058,397) (114,888,341)
----------- --------------- ----------- -------------
Net increase.................. 1,271,492 $ 24,529,119 1,525,591 $ 28,492,263
----------- --------------- ----------- -------------
----------- --------------- ----------- -------------
</TABLE>
<TABLE>
<CAPTION>
JUNE 1, 1995
(COMMENCEMENT OF SALE OF
SHARES) TO OCTOBER 31, 1995
-----------------------------
ADVISOR CLASS: SHARES AMOUNT
----------- ---------------
<S> <C> <C>
Shares sold................... 32,235 $ 625,703
Shares repurchased............ (7,577) (162,450)
----------- ---------------
Net increase.................. 24,658 $ 463,253
----------- ---------------
----------- ---------------
</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 October 31, 1995 amounted to $6,478,750,
at value.
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<PAGE>
G.T. GLOBAL HEALTH CARE FUND
6. EXPENSE REDUCTIONS
G.T. Capital has directed certain portfolio trades to brokers who paid a portion
of the Fund's expenses. For the year ended October 31, 1995, the Fund's expenses
were reduced by $71,525 under these arrangements.
7. SUBSEQUENT EVENT:
Effective January 1, 1996, as part of a unified corporate identity effort, the
name of the BIL GT Group (of which G.T. Capital is a member) will be changed to
Liechtenstein Global Trust ("LGT"). The Fund's (or Portfolio's) investment
manager and administrator, currently named G.T. Capital Management, Inc., will
be changed to "LGT Asset Management, Inc.", and G.T. Global Financial Services,
Inc., which serves as the Fund's distributor, will be known as "GT Global, Inc."
- --------------
FEDERAL TAX INFORMATION (UNAUDITED):
Pursuant to Section 852 of the Internal Revenue Code, the Fund designates
$30,367,632 as capital gain dividends for the fiscal year ended October 31,
1995.
F-16
<PAGE>
G.T. GLOBAL HEALTH CARE FUND
NOTES
- --------------------------------------------------------------------------------
<PAGE>
GT GLOBAL HEALTH CARE 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 Financial Services, Inc.
Fifty California Street
27th Floor
San Francisco, California
94111-4624
DATED MATERIAL
PLEASE EXPEDITE
G.T. GLOBAL HEALTH CARE FUND
