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

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

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<PAGE>
INVESTING IN
A BROAD
RANGE OF
INDUSTRIES
WORLDWIDE
GT GLOBAL
FINANCIAL
SERVICES
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 Financial Services Fund seeks long-term growth of capital. The
Fund invests primarily in the equity securities of companies around the world
engaged in banking, insurance, investment management, brokerage and diversified
financial activities.
PERFORMANCE REVIEW
The Fund's total return for the 12 months ended October 31, 1995, was 2.58% for
Class A shares (-2.29% including the maximum 4.75% sales charge). Total return
for Class B shares was 1.98% (-3.02% 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%.
The more relevant MSCI Banking Index(2) posted a return of 3.85%. The indices
are not available for investment and do not include the effects of sales charges
and professional management fees. For additional performance information, please
see page 9.
While U.S. stocks were strong throughout most of last year, the increase in the
benchmark MSCI Banking Index during this period was primarily due to currency
translation gains for the index as the yen and the deutsche mark strengthened
against the dollar. Although we correctly foresaw declines in the price of
Japanese and German financial stocks during the period, local currency
appreciation outweighed price depreciation and negatively impacted the Fund's
performance relative to the index.
In addition, the Fund's significant position in emerging markets performed
poorly and also negatively affected the Fund's performance compared to the MSCI
Banking Index, which maintains less than a 5% weighting in emerging market
companies. The severe stock price declines of financial companies in virtually
every developing nation was the result of the crisis in confidence that began in
Mexico with the devaluation of the peso in December 1994. The Fund's positions
in Mexico, Brazil, Uruguay and Thailand fell dramatically in value in a very
short period of time.

- ------------------
(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 Banking Index is an arithmetic average, weighted by market value,
of the performance of 117 securities listed on major world stock exchanges.
It includes the effect of reinvested dividends and is measured in U.S.
dollars.

1
<PAGE>
MARKET REVIEW
Since last October, financial stocks have been weak throughout most of the
world, with the exception of the U.S. and the UK. A weaker dollar, slower global
economic growth and a number of surprises, such as the collapse of Baring
Securities and Daiwa Bank's U.S. bond trading losses, all contributed to the
overall tumultuous environment for financial services.

U.S. financial stocks were the clear standout, led by bank stocks which were
driven by a wave of bank mergers. Chemical and Chase, and First Fidelity and
First Union(3) agreed to merge, creating behemoths with even greater financial
strength. Asset managers and brokers benefited from surging stock markets, and
insurance companies joined the sector rally on the back of falling interest
rates.

Companies in Japan were not as fortunate. Massive bad debt problems, failures of
several financial institutions and Daiwa New York's $1.1 billion loss, sent bank
stocks spiraling down. A sluggish stock market and negligible economic growth
were also negatives for most brokerage and insurance firms. A major government
initiative to bail out the financial system and jump-start the economy may be
the prerequisite for stronger Japanese financial stock performance next year.

Emerging market banks also had a tough year. While there were a few bright
spots, such as South Africa and Turkey, the crisis in Mexico and the
deteriorating relationship between the Peoples' Republic of China and the
majority of the rest of the world made it difficult for many banks located in
the developing world.

Performance in Europe was mixed. Financial companies in peripheral countries,
such as Ireland and Sweden, showed strong gains, while those in core nations,
Germany and France in particular, performed poorly. We believe stronger gross
domestic product (GDP) growth and a consensus on monetary union would likely be
positive for European financial stocks in the future.

- ------------------
(3) There can be no assurance the Fund held, holds, or will hold these or any
other securities mentioned in this report.

2
<PAGE>
PORTFOLIO STRATEGY AND OUTLOOK
The primary strategy of the Fund remains unchanged: to attempt to benefit from
the dramatic transformation of the financial services industry around the world
while seeking to reduce risk by diversifying among markets and industry
subsectors. We continue to search out stocks that stand to profit from, among
other factors, the following investment themes: improving standards of living in
the emerging markets, creating demand for banking and other financial services;
consolidation driven by economies of scale and new applications of technology in
both the U.S. and abroad; and the recovery of depressed subsectors within the
financial services industry.

IMPROVING STANDARDS OF LIVING IN EMERGING MARKETS
Thailand provides some remarkable statistics which support our belief that a
rise in living standards driven by gross national product (GNP) growth will
result in increased profitability for financial services companies. From
1990-94, growth ranged from 7.6% to 12.2% per year. The banking industry has
profited handsomely, with deposits and loans increasing at close to 20% per year
and earnings growing at more than double that rate. We expect strong economic
growth in Thailand will continue into the immediate future with a corresponding
increase in disposable income and demand for financial services.

As living standards rise in many emerging market nations, consumers are able to
afford financial service products such as checking accounts, credit cards, life
insurance and savings and investment products for the first time. In addition,
rising real incomes spur purchases of homes, autos, appliances and other big
ticket items that result in greater demand for financing from companies
positioned to take advantage of the increased need. This last year has
demonstrated that emerging markets can be volatile; however, in the long term we
expect higher standards of living to fuel profitability of financial services
companies in nations as diverse as Peru, Pakistan and the Philippines.

CONSOLIDATION IN THE U.S.
Consolidation in U.S. financial services is being driven by technology,
efficiency, scale and legislation. We believe companies able to adapt to this
changing environment are the most likely to show strong growth in profitability.

The ongoing changes in government regulation, in our opinion, should spur
consolidation in the financial services industry and promote higher
profitability. In 1994 we saw the passage of interstate banking legislation,
which should also

3
<PAGE>
result in a reduction of redundant regulatory oversight. This year has already
witnessed the announcement of a massive reduction in FDIC insurance premiums.
The next major initiative in Washington, D.C. is the proposed reform of the
Glass-Steagall Act, which would remove the so-called "fire walls" between
investment and commercial banking. In general, we believe further reduction in
regulatory oversight may accelerate consolidation, enhance efficiency and
increase profitability in the financial services industry.

RECOVERY OF DEPRESSED SECTORS
Profitability in many financial services subsectors, such as banking, insurance,
brokerage and real estate investment, is somewhat cyclical in nature and is
driven by such factors as interest rates and GDP growth. Presently, consumer
banking in Thailand, real estate finance in the U.S. and trade finance in
Uruguay, for example, are experiencing increased profitability, and the Fund has
attempted to take advantage of these trends. In contrast, we believe banking in
Japan and France may be approaching the bottom of a cycle of low profitability
or outright financial losses, and that the time is approaching when stocks in
these industries will become attractive.

OUTLOOK
The Fund seeks to benefit from increased opportunities in the global financial
services sector. Specifically, the Fund's performance will be driven by
investments in companies expected to benefit from:(4)
/ / GDP growth in the emerging markets (for example, Thai Farmers Bank in
Thailand and Banco Commercial in Uruguay);
/ / The secular rise in the use of credit cards (such as Transaction Network
Service, Inc., and Dean Witter Discover);
/ / The recovery of profitability of companies in the English-speaking nations
(for example, Bank of Ireland, National Westminster Bank of the United
Kingdom, and Citicorp in the United States); and
/ / The increased demand for consumer investment products (Franklin Resources
and Alliance Capital in the U.S., and M&G Group and Invesco PLC in the
United Kingdom).

- ------------------
(4) There can be no assurance that the trends/forecasts mentioned in this report
will materialize or ultimately benefit Fund performance.

4
<PAGE>
Even after the recent impressive performance of U.S. stocks, we believe it is
quite possible there may be more good news ahead as financial companies continue
to consolidate in a manner that increases profitability. Non-inflationary
economic growth is projected for 1996, and a reduction in the U.S. budget
deficit would likely lead to lower interest rates. We hope that a return to
economic growth in Latin America and a calmer Far East will provide a more
nurturing environment for financial services stocks in the coming year.

<TABLE>
<S> <C>
CHRISTIAN WIGNALL JAMES ELLMAN
CHIEF INVESTMENT OFFICER PORTFOLIO MANAGER
GLOBAL EQUITY INVESTMENTS SAN FRANCISCO
SAN FRANCISCO

NOVEMBER 20, 1995
</TABLE>

G.T. GLOBAL FINANCIAL SERVICES FUND

5
<PAGE>
KEY PORTFOLIO HOLDINGS*

ALLIANCE CAPITAL MANAGEMENT UNITED STATES
Alliance Capital Management is a large U.S.-based asset manager with more than
$125 billion under management in a mix of mutual funds, variable annuities and
institutional accounts. Funds are distributed through brokers, banks and the
Equitable sales force. Equitable owns a majority stake in Alliance. Since 1988,
Alliance's assets have been growing, their margins rising and their highly
profitable international assets increasing as a percentage of total business.

BANK OF IRELAND IRELAND
Bank of Ireland is a large financial services company with significant
operations in Ireland, the United Kingdom and the United States. Profitability
has been increasing (earnings have more than doubled since 1992) due to strong
GDP growth in Ireland and a recovery in U.S. operations. The Bank of Ireland has
benefited, and we believe will continue to benefit, from peace talks in Northern
Ireland and increasing European economic harmony.

INVESCO PLC UNITED KINGDOM
Invesco PLC is one of the few truly international asset managers, with growing
businesses in the Americas, Asia and Europe. During the 1990s, assets have been
growing, margins rising and highly profitable international assets increasing as
a percent of total business. We think Invesco may be a prime future
consolidation candidate as it represents an attractive acquisition for banks and
insurance companies focused on increasing their international presence and
fee-based businesses.

BANK HAPOALIM ISRAEL
Bank Hapoalim has interests in commercial banking, brokerage, underwriting and
trade finance activities, and is one of the largest financial companies in
Israel. In addition, Hapoalim has extensive equity holdings in a wide range of
industrial concerns. We believe the company should benefit from continued growth
of the highly modern Israeli economy, as well as from the expansion in trade and
decrease in defense spending as a result of the ongoing peace initiatives in the
Levant.

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

6
<PAGE>
CORPORACION MAPFRE SPAIN
This multi-line Spanish insurance company offers life, property/casualty and
reinsurance products domestically and throughout Latin America, which is the
source of half the company's revenue. Historically, many people in Latin America
have not owned insurance. However, rising standards of living are allowing
consumers to purchase Mapfre products for the first time. We expect revenues,
margins and profitability to increase in the future and believe the company will
benefit from new operations in Portugal and the Philippines.

US ORDER UNITED STATES
US Order specializes in the rapidly growing market for at-home banking services.
The company has licensed its on-line banking computer software on an exclusive
basis with VISA, which is now in use by more than 70 banks across the United
States. Royalties from this product are expected to increase by more than 100%
in 1996. US Order also manufactures screen-phones for use with home banking and
sells customer support service for third parties that use its home banking
products.

BANCO COMMERCIAL URUGUAY
Banco Commercial is the largest private financial services company in Uruguay.
Its primary activities are commercial banking, trade finance, consumer lending
and private client asset management. Due to strong economic growth of major
trade partners Brazil and Argentina, as well as an increase in domestic demand
stemming from a more efficient Uruguayan economy, Banco Commercial has seen
profitability steadily increase since 1991.

UNIDANMARK DENMARK
Unidanmark is among the largest Danish financial institutions. This company is
enjoying the current domestic environment of a strong currency, rising GDP and
falling interest rates. We expect continued industry consolidation and the
increasing use of technology to accelerate profitability over the remainder of
the decade.

7
<PAGE>
FIRST FINANCIAL CARIBBEAN PUERTO RICO
First Financial is a dominant mortgage bank in Puerto Rico, where it enjoys a
market share of more than 40%. Revenues are rising as the company grows and
diversifies into other areas of banking. Branches are being opened in Florida to
target the under-served Hispanic market on the mainland. Management is composed
of expatriate Cubans who may be interested in expanding operations to their home
country if the U.S. economic embargo is lifted.

HSBC HOLDINGS PLC HONG KONG
Through Midland Bank in the UK and Hong Kong Shanghai Banking Corp. in Hong
Kong, we view HSBC Holdings as providing cheap exposure to the turnaround of the
UK operation and Hong Kong's stable economic growth. We expect lower bond
trading losses and bad debt provisions to further enhance the company's earnings
growth.

8
<PAGE>
G.T. GLOBAL FINANCIAL SERVICES FUND
PORTFOLIO SUMMARY

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
PERFORMANCE SUMMARY
<S> <C> <C> <C>
Month G.T. Global Financial Services Fund MSCI World Index MSCI Banking
05/31/94 9,525 10,000 10,000
06/30/94 9,525 9,974 10,012
07/31/94 9,508 10,165 10,010
08/31/94 9,950 10,473 10,042
09/30/94 9,683 10,200 9,707
10/31/94 9,683 10,492 9,971
11/30/94 9,283 10,039 9,542
12/31/94 9,075 10,138 9,631
01/31/95 8,825 9,987 9,507
02/28/95 8,650 10,135 9,550
03/31/95 8,408 10,626 9,943
04/30/95 8,583 10,998 10,534
05/31/95 9,242 11,094 10,648
06/30/95 9,400 11,093 10,141
07/31/95 9,850 11,650 10,915
08/31/95 9,942 11,393 10,355
09/30/95 10,117 11,727 10,736
10/31/95 9,933 11,544 10,355
</TABLE>

PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
THE CHART AT LEFT SHOWS THE PERFORMANCE OF THE G.T. GLOBAL
FINANCIAL SERVICES FUND CLASS A SHARES SINCE THE FUND'S INCEPTION VERSUS THE
MSCI WORLD INDEX. THIS REPRESENTS A CUMULATIVE RETURN OF -0.67% AND AN AVERAGE
TOTAL RETURN OF -0.47%. THE CHART ASSUMES A HYPOTHETICAL $10,000 INITIAL
INVESTMENT IN THE FUND'S CLASS A SHARES AND REFLECTS ALL FUND EXPENSES AND THE
MAXIMUM 4.75% SALES CHARGE. INVESTORS SHOULD NOTE THAT THE FUND IS A
PROFESSIONALLY MANAGED MUTUAL FUND WHILE THE INDEX IS UNMANAGED, DOES NOT INCUR
EXPENSES AND IS NOT AVAILABLE FOR INVESTMENT. THE PERFORMANCE OF OTHER CLASSES
WILL BE GREATER OR LESS THAN THE LINE SHOWN BASED ON DIFFERENCES IN CHARGES AND
FEES PAID BY SHAREHOLDERS INVESTING IN DIFFERENT CLASSES.

AVERAGE ANNUAL TOTAL RETURNS+
OCTOBER 31, 1995

<TABLE>
<CAPTION>
SHARE WITHOUT SALES CHARGE WITH SALES CHARGE++

CLASS 1 YEAR LIFE OF FUND 1 YEAR LIFE OF FUND
<S> <C> <C> <C> <C>
CLASS A* 2.58% 3.00% -2.29% -0.47%
CLASS B* 1.98% 2.45% -3.02% -0.35%
ADVISOR CLASS** N/A 7.75% N/A N/A
</TABLE>

* The Fund began operations on May 31, 1994.

** 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>
UNITED STATES 42.2%
ASIA-PACIFIC 32.9%
EUROPE 22.2%
LATIN AMERICA 2.7%
SECTOR ALLOCATION OF NET ASSETS AS OF OCTOBER 31, 1995
BANKS-REGIONAL 24.5%
BANKS-MONEY CENTER 17.2%
SECURITIES BROKER 12.4%
OTHER FINANCIAL 10.7%
INVESTMENT MANAGEMENT 8.1%
CONSUMER FINANCE 5.2%
INSURANCE-MULTI-LINE 4.6%
INSURANCE-PROPERTY/CASUALTY 3.6%
REAL ESTATE INVESTMENT TRUST 2.8%
SHORT TERM & OTHER 10.9%
</TABLE>

ALLOCATIONS WILL CHANGE BASED ON CURRENT MARKET CONDITIONS.

9
<PAGE>
GT GLOBAL
FINANCIAL
SERVICES
FUND

FINANCIAL
STATEMENTS
<PAGE>
G.T. GLOBAL FINANCIAL SERVICES FUND

REPORT OF
INDEPENDENT ACCOUNTANTS

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

ANNUAL REPORT
To the Shareholders of G.T. Global Financial Services 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 Financial Services Fund, one of the funds organized as a series of G.T.
Investment Funds, Inc., as of October 31, 1995, the related statement of
operations for the year then ended, the statements of changes in net assets and
the financial highlights for the year then ended and for the period from May 31,
1994 (commencement of operations) to October 31, 1994. 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. 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 Financial Services Fund as of October 31, 1995, the results of its
operations for the year then ended, the changes in its net assets and the
financial highlights for the year then ended and for the period from May 31,
1994 (commencement of operations) to October 31, 1994, in conformity with
generally accepted accounting principles.

COOPERS & LYBRAND L.L.P.

BOSTON, MASSACHUSETTS
DECEMBER 15, 1995

F-1
<PAGE>
G.T. GLOBAL FINANCIAL SERVICES FUND

STATEMENT OF ASSETS
AND LIABILITIES

October 31, 1995

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

<TABLE>
<S> <C>
Assets:
Investments in Global Financial Services Portfolio
(cost $9,002,833) (Note 1)....................... $ 9,793,244
Receivable from G.T. Capital Management, Inc.
(Note 2)......................................... 508,326
Unamortized organizational costs (Note 1)......... 45,222
Receivable for Fund shares sold................... 14,613
-----------
Total assets.................................... 10,361,405
-----------
Liabilities:
Payable for professional fees..................... 25,862
Payable for printing and postage expenses......... 23,965
Payable for administration fees (Note 2).......... 18,755
Payable for registration and filing fees.......... 7,768
Payable for service and distribution expenses
(Note 2)......................................... 6,302
Payable for transfer agent fees (Note 2).......... 5,473
Payable for Fund shares repurchased............... 4,661
Payable for Directors' fees and expenses (Note
2)............................................... 672
Payable for fund accounting fees (Note 2)......... 229
Other accrued expenses............................ 1,933
-----------
Total liabilities............................... 95,620
-----------
Net assets.......................................... $10,265,785
-----------
-----------
Class A:
Net asset value and redemption price per share
($5,687,073 DIVIDED BY 477,029 shares
outstanding)....................................... $ 11.92
-----------
-----------
Maximum offering price per share
(100/95.25 of $11.92) *............................ $ 12.51
-----------
-----------
Class B:+
Net asset value and offering price per share
($4,547,654 DIVIDED BY 384,353 shares
outstanding)....................................... $ 11.83
-----------
-----------
Advisor Class: (Notes 1 & 3)
Net asset value, offering price per share, and
redemption price per share
($31,058 DIVIDED BY 2,599 shares outstanding)...... $ 11.95
-----------
-----------
Net assets consist of:
Paid in capital (Note 3).......................... $ 9,845,942
Undistributed net investment income............... 86,274
Accumulated net realized loss on investments and
foreign currency transactions.................... (456,842)
Net unrealized appreciation on translation of
assets and liabilities in foreign currencies --
Global Financial Services Portfolio.............. 13,982
Net unrealized appreciation of investments --
Global Financial Services Portfolio.............. 776,429
-----------
Total -- representing net assets applicable to
capital shares outstanding......................... $10,265,785
-----------
-----------
<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-2
<PAGE>
G.T. GLOBAL FINANCIAL SERVICES FUND

STATEMENT OF OPERATIONS

Year ended October 31, 1995

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

<TABLE>
<S> <C> <C>
Investment income:
Dividend income -- Global Financial Services Portfolio.... $ 224,978
Interest income -- Global Financial Services Portfolio.... 60,482
----------
Total investment income................................. 285,460
----------
Expenses:
Expenses -- Global Financial Services Portfolio........... 103,397
Registration and filing fees.............................. 174,700
Printing and postage expenses............................. 133,800
Legal fees................................................ 82,518
Service and distribution expenses: (Note 2)
Class A.................................. $ 20,817
Class B.................................. 33,277 54,094
----------
Audit fees................................................ 52,550
Transfer agent fees (Note 2).............................. 51,593
Administration fees (Note 2).............................. 18,756
Directors' fees and expenses (Note 2)..................... 11,950
Amortization of organization costs (Note 1)............... 12,620
Fund accounting fees (Note 2)............................. 1,930
Other expenses............................................ 4,491
----------
Total expenses before reductions........................ 702,399
----------
Expenses reimbursed by G.T. Capital Management, Inc.
(Note 2).............................................. (508,326)
Expense reductions -- Global Financial Services
Portfolio............................................. (1,771)
----------
Total net expenses...................................... 192,302
----------
Net investment income....................................... 93,158
----------
Net realized and unrealized gain (loss) on
investments and foreign currencies:
Net realized loss on investments -- Global
Financial Services Portfolio.............. (405,844)
Net realized loss on foreign currency
transactions -- Global
Financial Services Portfolio.............. (32,894)
----------
Net realized loss during the year....................... (438,738)
Net change in unrealized appreciation on
translation of assets and liabilities
in foreign currencies -- Global Financial
Services Portfolio........................ 13,973
Net change in unrealized appreciation of
investments -- Global
Financial Services Portfolio.............. 743,739
----------
Net unrealized appreciation during the year............. 757,712
----------
Net realized and unrealized gain on investments and foreign
currencies................................................. 318,974
----------
Net increase in net assets resulting from operations........ $ 412,132
----------
----------
</TABLE>

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

F-3
<PAGE>
G.T. GLOBAL FINANCIAL SERVICES FUND

STATEMENT OF CHANGES IN NET ASSETS

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

<TABLE>
<CAPTION>
MAY 31, 1994
(COMMENCEMENT OF
YEAR ENDED OPERATIONS) TO
OCTOBER 31, 1995 OCTOBER 31, 1994
----------------- -----------------
Increase in net assets
<S> <C> <C>
Operations:
Net investment income...................... $ 93,158 $ 5,694
Net realized loss on investments and
foreign currency transactions -- Global
Financial Services Portfolio.............. (438,738) (32,440)
Net change in unrealized appreciation on
translation of assets and liabilities in
foreign currencies -- Global Financial
Services Portfolio........................ 13,973 9
Net change in unrealized appreciation of
investments -- Global Financial Services
Portfolio................................. 743,739 32,690
----------------- -----------------
Net increase in net assets resulting from
operations.............................. 412,132 5,953
Capital share transactions: (Note 3)
Increase from capital shares sold and
reinvested................................ 10,643,479 5,652,003
Decrease from capital shares repurchased... (6,199,828) (347,954)
----------------- -----------------
Net increase from capital share
transactions............................ 4,443,651 5,304,049
----------------- -----------------
Total increase in net assets................. 4,855,783 5,310,002
Net assets:
Beginning of period........................ 5,410,002 100,000
----------------- -----------------
End of period.............................. $10,265,785 $5,410,002
----------------- -----------------
----------------- -----------------
</TABLE>

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

F-4
<PAGE>
G.T. GLOBAL FINANCIAL SERVICES 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>
ADVISOR
CLASS A CLASS B CLASS+
--------------------------------- --------------------------------- -------------
MAY 31, 1994 MAY 31, 1994 JUNE 1, 1995
YEAR ENDED (COMMENCEMENT OF YEAR ENDED (COMMENCEMENT OF TO
OCTOBER 31, OPERATIONS) TO OCTOBER 31, OPERATIONS) TO OCTOBER 31,
1995(D) OCTOBER 31, 1994 1995(D) OCTOBER 31, 1994 1995
------------ ------------------- ------------ ------------------- -------------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 11.62 $ 11.43 $ 11.60 $ 11.43 $ 11.09
------------ ------- ------------ ------- -------------
Income from investment operations:
Net investment income................. 0.17* 0.02* 0.11* 0.00* 0.09*
Net realized and unrealized gain on
investments.......................... 0.13 0.17 0.12 0.17 0.77
------------ ------- ------------ ------- -------------
Net increase from investment
operations......................... 0.30 0.19 0.23 0.17 0.86
------------ ------- ------------ ------- -------------
Net asset value, end of period.......... $ 11.92 $ 11.62 $ 11.83 $ 11.60 $ 11.95
------------ ------- ------------ ------- -------------
------------ ------- ------------ ------- -------------
Total investment return (b)............. 2.58 % 1.66%(c) 1.98 % 1.49%(c) 7.75%(c)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 5,687 $ 3,175 $ 4,548 $ 2,235 $ 31
Ratio of net investment income (loss) to
average net assets:
With expense reductions and
reimbursement from G.T. Capital
(Notes 1 & 2)........................ 1.46 % 0.66%(a) 0.96 % 0.16%(a) 1.96%(a)
Without expense reductions and
reimbursement from G.T. Capital...... (5.34)% (7.26)%(a) (5.84)% (7.76)%(a) (4.84)%(a)
Ratio of expenses to average net assets:
With expense reductions and
reimbursement from G.T. Capital
(Notes 1 & 2)........................ 2.34 % 2.40%(a) 2.84 % 2.90%(a) 1.84%(a)
Without expense reductions and
reimbursement from G.T. Capital...... 9.14 % 10.32%(a) 9.64 % 10.82%(a) 8.64%(a)
</TABLE>

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

(a) Annualized.
(b) Total investment return does not include sales charges.
(c) Not annualized.
(d) These selected per share data were calculated based upon weighted
average shares outstanding during the period.
* Before reimbursement by G.T. Capital Management, Inc., the net
investment income per share would have been reduced by $0.59, $0.59,
$0.30 for Class A, Class B, and Advisor Class, respectively, for the
period ended October 31, 1995, and $0.23 for Class A and Class B from
May 31, 1994 to October 31, 1994.
+ Commencing June 1, 1995, the Fund began offering Advisor Class shares.

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

F-5
<PAGE>
G.T. GLOBAL FINANCIAL SERVICES FUND

NOTES TO
FINANCIAL STATEMENTS

October 31, 1995

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

1. SIGNIFICANT ACCOUNTING POLICIES
G.T. Global Financial Services 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 invests substantially all of
its investable assets in Global Financial Services Portfolio ("Portfolio"),
which is registered as an open-end management investment company under the 1940
Act and has investment objectives, policies and limitations substantially
identical to those of the Fund. The value of the Fund's investment in the
Portfolio reflects the Fund's proportionate interest in the net assets of the
Portfolio. The financial statements of the Portfolio, including the Portfolio of
Investments, are included elsewhere in this Report and should be read in
conjunction with the Fund's financial statements.

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) INVESTMENT VALUATION
Valuation of securities and other investment practices by the Portfolio are
discussed in Note 1 of the Portfolio's Notes to Financial Statements which are
included elsewhere in this Report.

(B) TAXES
It is the policy of the Fund to meet the requirements for qualification as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended ("Code"). It is also the intention of the Fund to make distributions
sufficient to avoid imposition of any excise tax under Section 4982 of the Code.
Therefore, no provision has been made for Federal taxes on income, capital
gains, or unrealized appreciation of securities held, and excise tax on income
and capital gains. The Fund currently has a capital loss carryforward of
$437,824, of which $22,442 expires in 2002 and $415,382 expires in 2003.

(C) 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 Portfolio and timing differences.

(D) 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 $63,100. These expenses
are being amortized on a straightline basis over a five-year period.

2. RELATED PARTIES
G.T. Capital Management, Inc. ("G.T. Capital") is the Fund's administrator. The
Fund pays administration fees to G.T. Capital at the annualized rate of 0.25% of
the Fund's average daily net assets. 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 items) 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

F-6
<PAGE>
G.T. GLOBAL FINANCIAL SERVICES FUND
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 $6,892
of such sales charges. G.T. Global also makes ongoing shareholder servicing and
trail commission payments to dealers whose clients hold Class A shares.

Class B shares are not subject to initial sales charges. When Class B shares are
sold, G.T. Global from its own resources pays commissions to dealers through
which the sales are made. Certain redemptions of Class B shares made within six
years of purchase are subject to contingent deferred sales charges ("CDSCs"), in
accordance with the Fund's current prospectus. For the year ended October 31,
1995, G.T. Global collected CDSCs in the amount of $7,543. 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 plans of distribution with respect to the Fund's Class A shares
("Class A Plan") and Class B shares ("Class B Plan"), pursuant to which the Fund
reimburses G.T. Global for a portion of its shareholder servicing and
distribution expenses. Under the Class A Plan, the Fund may pay G.T. Global a
service fee at the annualized rate of up to 0.25% of the average daily net
assets of the Fund's Class A shares for G.T. Global's expenditures incurred in
servicing and maintaining shareholder accounts, and may pay G.T. Global a
distribution fee at the annualized rate of up to 0.50% of the average daily net
assets of the Fund's Class A shares, less any amounts paid by the Fund as the
aforementioned service fee, for G.T. Global's expenditures incurred in providing
services as distributor. All expenses for which G.T. Global is reimbursed under
the Class A Plan will have been incurred within one year of such reimbursement.

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

G.T. Capital and G.T. Global voluntarily have undertaken to limit the Fund's
expenses (exclusive of brokerage commissions, taxes, interest, and extraordinary
expenses) to the maximum annual rate of 2.40%, 2.90%, and 1.90% of the average
daily net assets of the Fund's Class A, Class B, and Advisor Class shares,
respectively. If necessary, this limitation will be effected by waivers by G.T.
Capital of 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 $616 to G.T. Capital.

The Company pays each of its Directors who is not an employee, officer or
director of G.T. Capital, G.T. Global or G.T. Services $5,000 per year plus $300
for each meeting of the board or any committee thereof attended by the Director.

F-7
<PAGE>
G.T. GLOBAL FINANCIAL SERVICES FUND

3. CAPITAL SHARES
At October 31, 1995, there were 6,000,000,000 shares of the Company's common
stock authorized, at $0.0001 par value. Of this amount, 200,000,000 were
classified as shares of the Fund; 400,000,000 were classified as shares of G.T.
Global Government Income Fund; 200,000,000 were classified as shares of G.T.
Global Health Care Fund; 200,000,000 were classified as shares of G.T. Global
Emerging Markets Fund; 200,000,000 were classified as shares of G.T. Global
Currency Fund (inactive); 200,000,000 were classified as shares of G.T. Global
Growth & Income Fund; 200,000,000 were classified as shares of G.T. Global Small
Companies Fund (inactive); 200,000,000 were classified as shares of G.T. Latin
America Growth Fund; 400,000,000 were classified as shares of G.T. Global
Telecommunications Fund; 200,000,000 were classified as shares of G.T. Global
Strategic Income Fund; 200,000,000 were classified as shares of G.T. Global High
Income Fund; 200,000,000 were classified as shares of G.T. Global Natural
Resources Fund; 200,000,000 were classified as shares of G.T. Global
Infrastructure Fund; 200,000,000 were classified as shares of G.T. Global
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>
MAY 31, 1994
(COMMENCEMENT OF
YEAR ENDED OPERATIONS)
OCTOBER 31, 1995 TO OCTOBER 31, 1994
---------------------- ---------------------
CLASS A SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------- --------- ----------- --------- ----------
<S> <C> <C> <C> <C>
Shares sold................................................................ 669,827 $ 7,432,400 288,905 $3,352,036
Shares repurchased......................................................... (465,993) (5,162,753) (20,084) (233,975)
--------- ----------- --------- ----------
Net increase............................................................... 203,834 $ 2,269,647 268,821 $3,118,061
--------- ----------- --------- ----------
--------- ----------- --------- ----------

MAY 31, 1994
(COMMENCEMENT OF
YEAR ENDED OPERATIONS)
OCTOBER 31, 1995 TO OCTOBER 31, 1994
---------------------- ---------------------
CLASS B SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------- --------- ----------- --------- ----------
<S> <C> <C> <C> <C>
Shares sold................................................................ 286,019 $ 3,181,342 198,242 $2,299,967
Shares repurchased......................................................... (94,377) (1,037,075) (9,906) (113,979)
--------- ----------- --------- ----------
Net increase............................................................... 191,642 $ 2,144,267 188,336 $2,185,988
--------- ----------- --------- ----------
--------- ----------- --------- ----------
</TABLE>

<TABLE>
<CAPTION>
JUNE 1, 1995
(COMMENCEMENT OF
SALE OF SHARES)
TO OCTOBER 31, 1995
----------------------
ADVISOR CLASS SHARES AMOUNT
- --------------------------------------------------------------------------- --------- -----------
<S> <C> <C> <C> <C>
Shares sold................................................................ 2,599 $ 29,737
Shares repurchased......................................................... -- --
--------- -----------
Net increase............................................................... 2,599 $ 29,737
--------- -----------
--------- -----------
</TABLE>

4. 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):
For its fiscal year ended October 31, 1995, the total amount of income received
by the Fund from sources within foreign countries and possessions of the United
States was approximately $0.071 per share (representing an approximate total of
$71,998). The total amount of dividend and capital gain taxes paid by the Fund
to such countries was approximately $0.017 per share (representing an
approximate total of $17,755).

F-8
<PAGE>
GLOBAL FINANCIAL SERVICES PORTFOLIO

REPORT OF
INDEPENDENT ACCOUNTANTS

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

ANNUAL REPORT
To the Shareholders and Board of Trustees of
Global Financial Services Portfolio:

We have audited the accompanying statement of assets and liabilities of Global
Financial Services Portfolio, 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 and supplementary data for the year then
ended and for the period from May 31, 1994 (commencement of operations) to
October 31, 1994. These financial statements and the supplementary data are the
responsibility of the Portfolio's management. Our responsibility is to express
an opinion on these financial statements and the supplementary data 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
supplementary data 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 supplementary data referred to
above present fairly, in all material respects, the financial position of Global
Financial Services Portfolio as of October 31, 1995, the results of its
operations for the year then ended, the changes in its net assets and
supplementary data for the year then ended and for the period from May 31, 1994
(commencement of operations) to October 31, 1994, in conformity with generally
accepted accounting principles.

COOPERS & LYBRAND L.L.P.

BOSTON, MASSACHUSETTS
DECEMBER 15, 1995

F-9
<PAGE>
GLOBAL FINANCIAL SERVICES PORTFOLIO

PORTFOLIO OF INVESTMENTS

October 31, 1995

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

<TABLE>
<CAPTION>
Market % of Net
Equity Investments Country Shares Value Assets {d}
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Banks-Regional (24.5%)
Banco Commercial S.A. - 144A ADR{.} -/- {\/} .............. URGY 11,300 $ 189,274 1.9
Unidanmark AS "A" ......................................... DEN 4,000 183,788 1.9
Thai Farmers Bank, Ltd. - Foreign-/- ...................... THAI 21,100 174,435 1.8
Sparbanken Sverige AB "A" ................................. SWDN 15,000 158,287 1.6
Den Danske Bank ........................................... DEN 2,280 151,087 1.5
Bancorp Hawaii, Inc. ...................................... US 4,000 134,000 1.4
First Tennessee National Corp. ............................ US 2,400 128,400 1.3
Cullen/Frost Bankers, Inc. ................................ US 2,500 127,500 1.3
BayBanks, Inc. ............................................ US 1,500 121,500 1.2
Fokus Banken AS-/- ........................................ NOR 23,600 119,975 1.2
Anglo-Irish Bank Corp. PLC ................................ IRE 109,000 110,258 1.1
Bank of Melbourne Ltd. ................................... AUSL 19,800 100,417 1.0
Mellon Bank Corp. ......................................... US 2,000 100,250 1.0
Union Bank Corp. ......................................... US 2,000 100,250 1.0
Espirito Santo Financial Holding S.A. - ADR{\/} .......... LUX 9,000 99,000 1.0
Advance Bank of Australia Ltd. ............................ AUSL 13,000 96,025 1.0
Allied Irish Bank PLC ..................................... IRE 17,500 88,475 0.9
Westpac Banking Corp., Ltd. ............................... AUSL 20,000 82,090 0.8
PT Bank Internasional Indonesia - Foreign ................. INDO 23,000 80,551 0.8
Commerce Bancorp, Inc. .................................... US 3,000 69,375 0.7
Glacier Bancorp, Inc. ..................................... US 550 11,275 0.1
------------
2,426,212
------------
Banks-Money Center (17.2%)
Bank of Ireland ........................................... IRE 36,000 239,378 2.4
Bank Hapoalim Ltd.-/- ..................................... ISRL 133,000 211,494 2.2
HSBC Holdings PLC ......................................... HK 12,000 174,617 1.8
Bangkok Bank Co., Ltd. - Foreign .......................... THAI 14,300 147,774 1.5
National Westminster Bank PLC ............................. UK 14,800 147,602 1.5
Commercial Bank of Korea-/- ............................... KOR 9,900 110,348 1.1
Krung Thai Bank Ltd. - Foreign ............................ THAI 24,750 98,370 1.0
Bank Leumi Le - Israel-/- ................................. ISRL 67,500 92,833 1.0
Sumitomo Bank ............................................. JPN 5,000 88,543 0.9
Mitsubishi Bank ........................................... JPN 4,000 78,270 0.8
Banco O'Higgins - ADR{\/} ................................ CHLE 3,600 76,950 0.8
Fuji Bank Ltd. ............................................ JPN 4,000 74,357 0.8
Dai-Ichi Kangyo Bank Ltd. ................................. JPN 4,000 67,704 0.7
Citicorp .................................................. US 1,000 64,875 0.7
------------
1,673,115
------------
Securities Brokers (12.4%)
Daiwa Securities Co., Ltd. ................................ JPN 14,000 164,368 1.7
Edwards (A.G.), Inc. ...................................... US 5,600 142,800 1.5
Nikko Securities Co., Ltd. ................................ JPN 14,000 130,672 1.3
Nomura Securities Co., Ltd. ............................... JPN 7,000 128,070 1.3
Peregrine Investment Holdings Ltd. ........................ HK 100,000 127,406 1.3
</TABLE>

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

F-10
<PAGE>
GLOBAL FINANCIAL SERVICES PORTFOLIO
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Country Shares Value Assets {d}
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Securities Brokers (Continued)
Dean Witter, Discover & Co. ............................... US 2,500 $ 124,375 1.3
Yamaichi Securities ....................................... JPN 22,000 115,370 1.2
Charles Schwab Corp. ...................................... US 4,600 105,225 1.1
Kankaku Securities Co.-/- ................................. JPN 27,000 87,173 0.9
Hanshin Securities Co. .................................... KOR 3,500 78,225 0.8
------------
1,203,684
------------
Other Financial (10.7%)
U.S. Order, Inc. .......................................... US 13,100 196,500 2.0
Aboitiz Equity Ventures, Inc.-/- .......................... PHIL 730,000 139,088 1.4
Transaction Network Service-/- ............................ US 6,000 138,000 1.4
Acom Co., Ltd. ............................................ JPN 4,000 130,320 1.3
DST Systems, Inc. ......................................... US 5,000 105,000 1.1
Shohkoh Fund .............................................. JPN 600 104,491 1.1
Compagnie Financiere de Paribas S.A. ...................... FR 1,800 99,049 1.0
JACCS Co., Ltd. ........................................... JPN 10,000 91,185 0.9
State Street Boston Corp. ................................. US 1,250 48,594 0.5
------------
1,052,227
------------
Investment Management (8.1%)
Alliance Capital Management L.P. .......................... US 12,200 256,199 2.6
Invesco PLC - ADR{\/} ..................................... UK 6,000 229,499 2.3
Franklin Resources, Inc. .................................. US 2,000 101,500 1.0
Invesco PLC-/- ............................................ UK 23,300 89,488 0.9
M & G Group PLC ........................................... UK 3,500 72,191 0.7
Eaton Vance Corp. ........................................ US 1,600 58,400 0.6
------------
807,277
------------
Consumer Finance (5.2%)
First Financial Caribbean Corp. ........................... US 10,000 178,124 1.8
Nichiei Co., Ltd. ........................................ JPN 2,000 124,254 1.3
Promise Co., Ltd. ......................................... JPN 3,000 118,286 1.2
Green Tree Financial Corp. ................................ US 3,400 90,525 0.9
------------
511,189
------------
Insurance - Multi-Line (4.6%)
Corporacion Mapfre ........................................ SPN 4,000 205,068 2.1
Allmerica Financial Corp. ................................. US 5,000 125,625 1.3
Axa Group ................................................. FR 2,036 113,118 1.2
------------
443,811
------------
Insurance - Property-Casualty (3.6%)
RenaissanceRe Holdings Ltd. ............................... US 4,000 108,500 1.1
Mid Ocean Ltd. ............................................ US 2,700 95,513 1.0
MBIA, Inc. ................................................ US 1,200 83,550 0.9
AMBAC, Inc. .............................................. US 1,300 54,763 0.6
------------
342,326
------------
Real Estate Investment Trust (2.8%)
Alexander Haagen Properties, Inc. ......................... US 8,900 97,900 1.0
Beacon Properties Corp. ................................... US 4,300 93,525 1.0
</TABLE>

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

F-11
<PAGE>
GLOBAL FINANCIAL SERVICES PORTFOLIO
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Country Shares Value Assets {d}
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Real Estate Investment Trust (Continued)
Evans Withycombe Residential, Inc. ........................ US 4,000 $ 75,500 0.8
------------
266,925
------------
Savings & Loans (2.0%)
Leader Financial Corp. .................................... US 3,000 106,875 1.1
Long Island Bancorp, Inc. ................................. US 3,800 86,925 0.9
------------
193,800
------------
Banks-Super Regional (1.6%)
NationsBank Corp. ......................................... US 1,500 98,625 1.0
BankAmerica Corp. ......................................... US 1,000 57,500 0.6
------------
156,125
------------
Insurance-Life (0.9%)
Mapfre Vida Seguros ....................................... SPN 1,700 89,943 0.9
------------ -----

TOTAL EQUITY INVESTMENTS (cost $8,390,205) ................. 9,166,634 93.6
------------ -----
<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 $860,000 U.S. Treasury Strips due
2/15/02 (market value of collateral is $595,179, including
accrued interest). (cost $575,093) ...................... 575,093 5.9
------------ -----

TOTAL INVESTMENTS (cost $8,965,298) ......................... 9,741,727 99.5
Other Assets and Liabilities ................................ 51,617 0.5
------------ -----

NET ASSETS .................................................. $ 9,793,344 100.0
------------ -----
------------ -----
<FN>
- ----------------
{d} Percentages indicated are based on net assets of $9,793,344.
{\/} U.S. currency denominated.
-/- Non-income producing security.
{.} Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers.
* For Federal income tax purposes, cost is $8,976,777 and
appreciation (depreciation) is as follows:

Unrealized appreciation: $ 969,371
Unrealized depreciation: (204,421)
-------------
Net unrealized appreciation: $ 764,950
-------------
-------------
</TABLE>

Abbreviation:
ADR -- American Depository Receipt

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

F-12
<PAGE>
GLOBAL FINANCIAL SERVICES PORTFOLIO

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

<TABLE>
<CAPTION>
Percentage of Net Assets
{d}
---------------------------
Short-Term
Country(Country Code/Currency Code) Equity & Other Total
- -------------------------------------- ------ ---------- -----
<S> <C> <C> <C>
Australia (AUSL/AUD) ................. 2.8 2.8
Chile (CHLE/CLP) ..................... 0.8 0.8
Denmark (DEN/DKK) .................... 3.4 3.4
France (FR/FRF) ...................... 2.2 2.2
Hong Kong (HK/HKD) ................... 3.1 3.1
Indonesia (INDO/IDR) ................. 0.8 0.8
Ireland (IRE/IEP) .................... 4.4 4.4
Israel (ISRL/ILS) .................... 3.2 3.2
Japan (JPN/JPY) ...................... 15.4 15.4
Korea (KOR/KRW) ...................... 1.9 1.9
Luxembourg (LUX/ECU) ................. 1.0 1.0
Norway (NOR/NOK) ..................... 1.2 1.2
Philippines (PHIL/PHP) ............... 1.4 1.4
Spain (SPN/ESP) ...................... 3.0 3.0
Sweden (SWDN/SEK) .................... 1.6 1.6
Thailand (THAI/THB) .................. 4.3 4.3
United Kingdom (UK/GBP) .............. 5.4 5.4
United States (US/USD) ............... 35.8 6.4 42.2
Uruguay (URGY/UYP) ................... 1.9 1.9
------ --- -----
Total ............................... 93.6 6.4 100.0
------ --- -----
------ --- -----
<FN>
- ----------------
{d} Percentages indicated are based on net assets of $9,793,344.
</TABLE>

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

FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
OCTOBER 31, 1995

<TABLE>
<CAPTION>
Market Value
(U.S. Contract Delivery Unrealized
Contracts to Sell Dollars) Price Date Appreciation
- ------------------------------------------------------------------------------- ------------- ---------- --------- ------------
<S> <C> <C> <C> <C>
Japanese Yen................................................................... 466,686 99.83000 11/14/95 $ 11,126
------------- ------------
Total Contracts to Sell (Receivable amount $477,812)........................... 466,686 $ 11,126
------------- ------------
</TABLE>

THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF NET ASSETS IS 4.77%
- ----------------
See Note 1 to the financial statements.

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

F-13
<PAGE>
GLOBAL FINANCIAL SERVICES PORTFOLIO

STATEMENT OF ASSETS
AND LIABILITIES

October 31, 1995

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

<TABLE>
<S> <C>
Assets:
Investments in securities, at value (cost
$8,965,298) (Note 1)............................. $ 9,741,727
Foreign currencies (cost $524).................... 524
Receivable for securities sold.................... 767,833
Dividends and dividend withholding tax reclaims
receivable....................................... 13,818
Receivable for open forward foreign currency
contracts, net (Note 1).......................... 11,126
Interest receivable............................... 20
Cash held as collateral for securities loaned
(Note 1)......................................... 223,830
-----------
Total assets.................................... 10,758,878
-----------
Liabilities:
Payable for securities purchased.................. 667,221
Payable for investment management and
administration fees (Note 2)..................... 51,353
Payable for professional fees..................... 7,214
Payable for printing and postage expenses......... 4,007
Payable for custodian fees (Note 1)............... 2,943
Payable for Trustees' fees and expenses (Note
2)............................................... 2,849
Other accrued expenses............................ 6,117
Collateral for securities loaned (Note 1)......... 223,830
-----------
Total liabilities............................... 965,534
-----------
Net assets.......................................... $ 9,793,344
-----------
-----------
Net assets consist of:
Paid in capital................................... $ 9,303,972
Accumulated net investment income................. 170,139
Accumulated net realized loss on investments and
foreign currency transactions.................... (471,178)
Net unrealized appreciation on translation of
assets and liabilities in foreign currencies..... 13,982
Net unrealized appreciation of investments........ 776,429
-----------
Total -- representing net assets applicable to
shares of beneficial interest outstanding.......... $ 9,793,344
-----------
-----------
</TABLE>

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

F-14
<PAGE>
GLOBAL FINANCIAL SERVICES PORTFOLIO

STATEMENT OF OPERATIONS

Year ended October 31, 1995

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

<TABLE>
<S> <C> <C>
Investment income: (Note 1)
Dividend income (net of foreign withholding tax of
$10,038)................................................. $ 224,978
Interest income........................................... 60,482
----------
Total investment income................................. 285,460
----------
Expenses:
Investment management and administration fees (Note 2).... 51,353
Custodian fees (Note 1)................................... 25,175
Legal fees................................................ 12,300
Trustees' fees and expenses (Note 2)...................... 7,119
Audit fees................................................ 5,550
Other expenses............................................ 1,900
----------
Total expenses before reductions........................ 103,397
----------
Expense reductions (Note 1 & 4)....................... (1,771)
----------
Total net expenses...................................... 101,626
----------
Net investment income....................................... 183,834
----------
Net realized and unrealized gain (loss) on
investments and foreign currencies: (Note 1)
Net realized loss on investments........... $ (405,844)
Net realized loss on foreign currency
transactions.............................. (32,894)
----------
Net realized loss during the year....................... (438,738)
Net change in unrealized appreciation on
translation of assets and liabilities in
foreign currencies........................ 13,973
Net change in unrealized appreciation of
investments............................... 743,739
----------
Net unrealized appreciation during the year............. 757,712
----------
Net realized and unrealized gain on investments and foreign
currencies................................................. 318,974
----------
Net increase in net assets resulting from operations........ $ 502,808
----------
----------
</TABLE>

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

F-15
<PAGE>
GLOBAL FINANCIAL SERVICES PORTFOLIO

STATEMENT OF CHANGES IN NET ASSETS

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

Beneficial interest transactions:
Contributions.............................. 9,881,645 5,089,171
Withdrawals................................ (5,766,944) --
----------------- -----------------
Net increase from beneficial interest
transactions............................ 4,114,701 5,089,171
----------------- -----------------
Total increase in net assets................. 4,617,509 5,075,735
Net assets:
Beginning of period........................ 5,175,835 100,100
----------------- -----------------
End of period.............................. $ 9,793,344 $5,175,835
----------------- -----------------
----------------- -----------------
</TABLE>

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

F-16
<PAGE>
GLOBAL FINANCIAL SERVICES PORTFOLIO

SUPPLEMENTARY DATA

- --------------------------------------------------------------------------------
Contained below are ratios and supplemental data that have been derived
from information provided in the financial statements.

<TABLE>
<CAPTION>
YEAR
ENDED MAY 31, 1994
OCTOBER 31, (COMMENCEMENT OF OPERATIONS)
1995 TO OCTOBER 31, 1994
------------ ------------------------------
<S> <C> <C>
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 9,793 $ 5,176
Ratio of net investment income to
average net assets..................... 2.60 % 1.19 %(a)
Ratio of operating expenses to average
net assets:
With expense reductions............... 1.43 % 4.43 %(a)
Without expense reductions............ 1.46 % -- %*
Portfolio turnover rate................. 170 % 53 %
</TABLE>

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

(a) Annualized
* Calculation of "Ratio of expenses to average net assets" was made
without considering the effect of expense reductions, if any.

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

F-17
<PAGE>
GLOBAL FINANCIAL SERVICES PORTFOLIO

NOTES TO
FINANCIAL STATEMENTS

October 31, 1995

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

1. SIGNIFICANT ACCOUNTING POLICIES
Global Financial Services Portfolio ("Portfolio") is organized as a New York
Trust and is registered under the Investment Company Act of 1940, as amended
("1940 Act"), as a diversified, open-end management investment company. The
following is a summary of significant accounting policies consistently followed
by the Portfolio in the preparation of the financial statements. The policies
are in conformity with generally accepted accounting principles.

(A) PORTFOLIO VALUATION
The Portfolio calculates the net asset value of and completes orders to purchase
or repurchase Portfolio shares of beneficial interest on each business day, with
the exception of those days on which the New York Stock Exchange is closed.

Equity securities are valued at the last sale price on the exchange on which
such securities are traded, or on the principal over-the-counter market on which
such securities are traded, as of the close of business on the day the
securities are being valued or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined by G.T. Capital Management,
Inc. ("G.T. Capital") to be the primary market.

Fixed income investments are valued at the mean of representative quoted bid and
ask prices for such investments or, if such prices are not available, at prices
for investments of comparative maturity, quality and type; however, when G.T.
Capital deems it appropriate, prices obtained for the day of valuation from a
bond pricing service will be used. Short-term investments with a maturity of 60
days or less are valued at amortized cost adjusted for foreign exchange
translation and market 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
Portfolio's Board of Trustees.

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 Portfolio's Board of Trustees.

(B) FOREIGN CURRENCY TRANSLATION
The accounting records of the Portfolio 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 Portfolio 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 Portfolio 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 of
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 Portfolio'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 Portfolio, it is the
Portfolio'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 Portfolio
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

F-18
<PAGE>
GLOBAL FINANCIAL SERVICES PORTFOLIO
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 Portfolio as an unrealized gain or loss. When the Forward Contract is
closed, the Portfolio 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 Portfolio's "Statement of Assets and Liabilities." The Portfolio 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 Portfolio 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 Portfolio writes a call or put option, an amount equal to the premium
received is included in the Portfolio'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 Portfolio 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 Portfolio can write options
only on a covered basis, which, for a call, requires that the Portfolio holds
the underlying security and, for a put, requires the Portfolio 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 Portfolio 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 Portfolio for the purchase of a call or put option is
included in the Portfolio'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 Portfolio has purchased expires on
the stipulated expiration date, the Portfolio realizes a loss in the amount of
the cost of the option. If the Portfolio enters into a closing sale transaction,
the Portfolio 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
Portfolio 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
Portfolio 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 Portfolio 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 Portfolio 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
Portfolio 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
Portfolio 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 Portfolio 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 Portfolio as unrealized gains or losses. When the
contract is closed, the Portfolio 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 Portfolio is that the
change in value of the underlying securities may not correlate to the change in
value of the contracts. The Portfolio 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-

F-19
<PAGE>
GLOBAL FINANCIAL SERVICES PORTFOLIO
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 Portfolio 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 Portfolio to
subsequently invest at less advantageous prices.

(H) PORTFOLIO SECURITIES LOANED
At October 31, 1995, stocks with an aggregate value of approximately $204,255
were on loan to brokers. The loans were secured by cash collateral of $223,830.
For international securities, cash collateral is received by the Portfolio
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 Portfolio against loaned securities in the 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 Portfolio received $201 of income from
securities lending which was used to offset the Portfolio's custody expenses.

(I) TAXES
It is the policy of the Portfolio to meet the requirements of the Internal
Revenue Code of 1986, as amended ("Code"). Therefore, no provision has been made
for Federal taxes on income, capital gains, or unrealized appreciation of
securities held.

(J) 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 Portfolio'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.

In addition, the Portfolio may focus its investments in certain related
financial services industries, subjecting the Portfolio to greater risk than a
fund that is more diversified.

(K) INDEXED SECURITIES
The Portfolio 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.

(L) RESTRICTED SECURITIES
The Portfolio is permitted to invest in privately placed restricted securities.
These securities may be resold in transactions exempt from registration or to
the public if the securities are registered. Disposal of these securities may
involve time-consuming negotiations and expense, and prompt sale at an
acceptable price may be difficult.

2. RELATED PARTIES
G.T. Capital is the Portfolio's investment manager and administrator. The
Portfolio pays investment management and administration fees to G.T. Capital at
the annualized rate of 0.725% on the first $500 million of average daily net
assets of the Portfolio; 0.70% on the next $500 million; 0.675% on the next $500
million; and 0.65% on amounts thereafter. These fees are computed daily and paid
monthly.

The Portfolio pays each of its Trustees who is not an employee, officer or
director of G.T. Capital, G.T. Global Financial Services, Inc. or G.T. Global
Investor Services Inc. $500 per year plus $150 for each meeting of the board or
any committee thereof attended by the Trustees.

At October 31, 1995, all of the shares of beneficial interest of the Portfolio
were owned either by G.T. Global Financial Services Fund or G.T. Capital.

3. PURCHASES AND SALES OF SECURITIES
For the year ended October 31, 1995, purchases and sales of investment
securities by the Portfolio, other than short-term investments, aggregated
$14,536,797 and $10,774,813, respectively. There were no purchases or sales of
U.S. government obligations by the Portfolio for the year ended October 31,
1995.

4. EXPENSE REDUCTIONS
G.T. Capital has directed certain portfolio trades to brokers who paid a portion
of the Portfolio's expenses. For the year ended October 31, 1995, the
Portfolio's expenses were reduced by $1,570 under these arrangements.

F-20
<PAGE>
GLOBAL FINANCIAL SERVICES PORTFOLIO

NOTES

- --------------------------------------------------------------------------------
<PAGE>
GT GLOBAL FINANCIAL SERVICES 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