<PAGE>
LGT ASSET MANAGEMENT
A PIONEER IN
INTERNATIONAL
MARKETS
GT GLOBAL
CONSUMER
PRODUCTS AND
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 Consumer Products and Services Fund seeks long-term capital
growth by investing primarily in securities of companies throughout the world
that manufacture, market, retail or distribute consumer products and services.
PERFORMANCE REVIEW
The Fund's total return from inception on December 30, 1994, through October 31,
1995, was 27.65% for Class A shares (21.58% including the maximum 4.75% sales
charge). Total return for Class B shares was 27.12% (22.12% including the
maximum effect of the 5% contingent deferred sales charge). During the same
period, the Morgan Stanley Capital International (MSCI) World Index(1) returned
13.87%. For more performance information, please see page 6.
The Fund outperformed the index because of its overweighting in the United
States, and its stock selection. Throughout the period, the Fund had an average
weighting in the U.S. of approximately 60%, and U.S. markets outperformed every
other major stock market in the world.
MARKET REVIEW
DEVELOPED MARKETS
A significant portion of the Fund's holdings are in multinational companies
domiciled in the U.S. or Europe. Overall, these multinationals performed well as
a result of strong demand for consumer products in their respective markets, as
well as significant foreign demand. We believe these companies are well
positioned to take advantage of rising income levels in many emerging markets.
In addition, many smaller consumer products companies in the developed markets
performed well because of the uniqueness of their products.
EMERGING MARKETS
Gross domestic product (GDP) of the emerging markets has been rising at a faster
rate than the GDP of the developed world. While emerging market nations have
enjoyed GDP growth at 5.2% per annum since 1989, G-7 (the U.S., Japan, Germany,
Italy, France, the UK and Canada) GDP has grown at a mere 2.0%. Looking forward,
the International Monetary Fund estimates that developing world GDP will grow
6.3% in 1996, versus 2.4% for the developed world.(2)
- ------------------
(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) Source: World Economic Outlook October 1995, International Monetary Fund,
1995.
1
<PAGE>
Historically, higher emerging market growth rates have generally translated into
increased sales of consumer products. As countries increase their wealth,
consumers tend to spend a lower percentage of their total income on basic
necessities such as food, which creates increased funds to spend on luxury
items. For example, in Asia there is a strong correlation between GDP per capita
and the percentage of income spent on food. In Vietnam, Indonesia, China and the
Philippines, where annual per capita income is low ($200-$800), the percentage
of income spent on food is very high (55%-78%), while in Hong Kong and
Singapore, where the annual per capita income is higher ($18,000), the
percentage of income spent on food is lower (15%-18%).(3)
PORTFOLIO STRATEGY
Our investment strategy is to select companies whose earnings growth, in our
opinion, is likely to outpace expectations. We look for companies with potential
for positive quarterly earnings surprises and positive earnings revisions by
Wall Street analysts. In addition, we invest in companies we believe display
strong fundamentals, such as high return on equity, low debt and highly
predictable earnings and cash flow. On October 31, 1995, the Fund was
overweighted in the U.S. (61%) relative to its other holdings, and invested in
Europe (24%), Asia (8%), Canada (4%), and Africa (3%). We expect to continue to
overweight the U.S. because of its abundance of attractive consumer
multinational companies which, in our opinion, will benefit from economic growth
outside of North America.(4)
Currently, the Fund tends to be less affected by macroeconomic cycles and more
affected by individual company selection. We focus on the superiority of the
product or service offered by the company and its ability to consistently grow
that product or service. At the end of October, the Fund was invested in the
following industry groups: consumer non-durables (36.9%), services (30.7%),
consumer durables (12.3%), health care and technology (3.8%), multi-industry
(3%), with 13.3% in other related areas.
- ------------------
(3) There is no assurance that the trends mentioned in this report will
ultimately benefit Fund performance.
(4) Geographic allocations will change as market conditions change.
2
<PAGE>
OUTLOOK
Our outlook for global consumerism continues to be optimistic. We expect to see
global economic growth remain healthy over the medium term and a corresponding
rise in income levels, resulting in increased purchases of consumer products and
services. We also believe these companies will remain attractive investments in
light of their attributes. They often have distinguished franchises or
name-brand products that tend to compete more on perceived value rather than
strictly on price. Most consumer products are also repetitive purchases, bought
over and over, making them less dependent on business cycles. Children outgrow
shoes, there's always a "hot" new toy, and appliances break or wear out. Lastly,
many consumer product companies tend to have low fixed assets and high
unrestricted cash flow. High cash generation allows many of these companies to
reinvest in core businesses, make acquisitions, repurchase stock or debt, or
increase their dividend.
CHRISTIAN WIGNALL DEREK WEBB
CHIEF INVESTMENT OFFICER PORTFOLIO MANAGER
GLOBAL EQUITIES SAN FRANCISCO
SAN FRANCISCO
NOVEMBER 20, 1995
G.T. GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
3
<PAGE>
KEY PORTFOLIO HOLDINGS*
GUCCI ITALY
Gucci designs, produces and markets high-end quality leather goods throughout
the world: U.S. sales compose 33% of the total sales, Europe 20%, Japan 19%,
Asia ex-Japan 12%, and other countries 16%. These products are sold through
high-end department stores and boutiques, duty free shops and Gucci stores.
After difficulties in the late 1980s, the company has new management and is
enjoying substantial revenue and profit growth.
ROBERT MONDAVI UNITED STATES
Robert Mondavi produces three different brands of wine, each targeted to a
different market segment. Premium wine sales have been very strong as Americans
are drinking not only more, but better-quality wine. We think Mondavi's brands
are well positioned to take advantage of increased demand.
FILA HOLDINGS ITALY
Fila manufactures athletic footwear and athletic/fashion apparel (65% and 35% of
production, respectively). The company sells these products primarily in the
U.S. (60% of revenues), followed by Europe (25%), and South Korea (15%). Revenue
has been growing rapidly at approximately 40% annually for apparel and 25% for
footwear. One of the main drivers of this growth is the popularity of the Grant
Hill line of basketball sneakers and apparel.
HEINEKEN N.V. NETHERLANDS
Heineken is an international beverage producer, with the majority of its income
derived from beer sales. Fifty-eight percent of sales are in Europe, followed by
18% in the United States, 18% in Asia, and the balance in Africa and Latin
America. We believe Heineken is unique in that it has benefited from increased
beer sales in both developed and emerging markets. Sales have grown at
approximately 5% a year for the last five years, while profits have increased at
13% per year.
SAFEWAY STORES UNITED STATES
Safeway operates grocery stores throughout the United States and Canada, and we
believe the company has one of the best managements in the grocery store
industry. Management has been cutting costs and increasing profits through
continued introduction of private label goods, which are more profitable than
branded goods. We expect these trends to continue.
- ------------------
* The Fund may or may nor continue to hold these or any other securities
mentioned in this report.
4
<PAGE>
REDMAN INDUSTRIES UNITED STATES
Redman manufactures modular housing. The manufactured housing industry has been
growing rapidly, propelled by the low cost of manufactured homes. Total
manufactured housing shipments increased 13% this year and Redman outpaced the
industry with sales up approximately 20% over this same period. The company has
no debt.
VONS COMPANY UNITED STATES
Vons operates grocery stores in the Los Angeles area. New management is reducing
costs and increasing the company's market share throughout Southern California.
The company currently operates 326 supermarkets under the "Vons" and
"Pavillions" names.
BELMONT HOMES, INC. UNITED STATES
Belmont Homes is a low-cost, high-quality homes producer. Like Redman
Industries, the company is also growing faster than the industry average, with
housing volumes increasing 17% excluding acquisitions, and 81% including
acquisitions.
MATTEL TOYS UNITED STATES
Mattel manufactures Barbie dolls (35% of production), Fisher Price Toys (25%),
Disney Toys (15%), and other toys (25%). Fifty-three percent of Mattel's sales
are in the United States, 30% in Europe, and the balance in Asia and Latin
America. In our view, the U.S. toy market is very attractive, as the two largest
toy companies control only 37% of the market. Internationally, Mattel has grown
14% annually for the last five years, and we expect international growth to
continue to be strong, as 80% of the world's children live in emerging markets.
BLACK & DECKER CORP. UNITED STATES
Black & Decker makes power tools for the professional and do-it-yourself
customer. The company has introduced many new products that are showing strong
sales, such as the Snake Light and a new line of professional power tools. In
addition, the company is restructuring by reducing costs and its debt level.
5
<PAGE>
G.T. GLOBAL CONSUMER PRODUCTS AND
SERVICES FUND
PORTFOLIO SUMMARY
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PERFORMANCE SUMMARY
<S> <C> <C>
G.T. Global Consumer Products and Services Fund MSCI World
12/30/94 9,525 10,000
01/31/95 9,467 9,852
02/28/95 9,533 9,997
03/31/95 9,858 10,481
04/30/95 9,708 10,849
05/31/95 9,867 10,943
06/30/95 10,508 10,942
07/31/95 11,400 11,492
08/31/95 11,542 11,238
09/30/95 12,083 11,567
10/31/95 12,158 11,387
</TABLE>
THE CHART AT RIGHT SHOWS THE PERFORMANCE OF THE G.T. GLOBAL
CONSUMER PRODUCTS AND SERVICES FUND CLASS A SHARES SINCE THE FUND'S INCEPTION
VERSUS THE MSCI WORLD INDEX. THIS REPRESENTS A CUMULATIVE RETURN OF 21.58%. 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
DECEMBER 30, 1994 -- OCTOBER 31, 1995
<TABLE>
<CAPTION>
SHARE WITHOUT SALES CHARGE WITH SALES CHARGE+
CLASS LIFE OF FUND LIFE OF FUND
<S> <C> <C>
CLASS A* 27.65% 21.58%
CLASS B* 27.12% 22.12%
ADVISOR CLASS** 23.65% N/A
<FN>
* The Fund began operations on December 30, 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.
+ The performance of the Class A and Class B shares reflects the effects of
the maximum 4.75% sales charge or the maximum applicable contingent deferred
sales charge (5% in first year, decreasing to 0% after six years).
</TABLE>
THE DATA ABOVE REPRESENT PAST PERFORMANCE OF THE FUND'S SHARES, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE, SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
GEOGRAPHIC ALLOCATION OF NET ASSETS AS OF OCTOBER 31, 1995
<S> <C>
UNITED STATES 64.9%
EUROPE 24.3%
ASIA PACIFIC 7.8%
AFRICA 3.0%
SECTOR ALLOCATION OF NET ASSETS AS OF OCTOBER 31, 1995
CONSUMER NON-DURABLES 36.9%
SERVICES 30.7%
CONSUMER DURABLES 12.3%
HEALTH CARE & TECHNOLOGY 3.8%
MULTI-INDUSTRY/MISCELLANEOUS 3.0%
SHORT TERM & OTHER 13.3%
</TABLE>
ALLOCATIONS WILL CHANGE BASED ON CURRENT MARKET CONDITIONS.
6
<PAGE>
GT GLOBAL
CONSUMER
PRODUCTS AND
SERVICES FUND
FINANCIAL
STATEMENTS
<PAGE>
G.T. GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
REPORT OF
INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
ANNUAL REPORT
To the Shareholders of G.T. Global Consumer Products and 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 Consumer Products and 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, the statement of changes in net assets and the
financial highlights for the period from December 30, 1994 (commencement of
operations) to October 31, 1995. 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 audit.
We conducted our audit 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 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
audit provides 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 Consumer Products and Services Fund as of October 31, 1995, the
results of its operations, the changes in its net assets and the financial
highlights for the period from December 30, 1994 (commencement of operations) to
October 31, 1995, in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
BOSTON, MASSACHUSETTS
DECEMBER 15, 1995
F-1
<PAGE>
G.T. GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
STATEMENT OF ASSETS
AND LIABILITIES
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets:
Investments in Global Consumer Products and
Services Portfolio (cost $6,112,921) (Note 1).... $6,502,154
Receivable for Fund shares sold................... 490,612
Receivable from G.T. Capital Management, Inc.
(Note 2)......................................... 267,192
Unamortized organizational costs (Note 1)......... 42,893
----------
Total assets.................................... 7,302,851
----------
Liabilities:
Payable for organization expenses (Note 1)........ 40,263
Payable for professional fees..................... 25,016
Payable for printing and postage expenses......... 9,758
Payable for service and distribution expenses
(Note 2)......................................... 7,324
Payable for administration fees (Note 2).......... 5,933
Payable for registration and filing fees.......... 4,366
Payable for transfer agent fees (Note 2).......... 3,186
Payable for Directors' fees and expenses (Note
2)............................................... 697
Payable for fund accounting fees (Note 2)......... 123
Other accrued expenses............................ 1,210
----------
Total liabilities............................... 97,876
----------
Net assets.......................................... $7,204,975
----------
----------
Class A:
Net asset value and redemption price per share
($4,082,173 DIVIDED BY 279,721 shares
outstanding)....................................... $ 14.59
----------
----------
Maximum offering price per share
(100/95.25 of $14.59) *............................ $ 15.32
----------
----------
Class B:+
Net asset value and offering price per share
($2,958,974 DIVIDED BY 203,634 shares
outstanding)....................................... $ 14.53
----------
----------
Advisor Class: (Notes 1 & 3)
Net asset value, offering price per share, and
redemption price per share
($163,828 DIVIDED BY 11,194 shares outstanding).... $ 14.64
----------
----------
Net assets consist of:
Paid in capital (Note 3).......................... $6,418,609
Accumulated net realized gain on investments and
foreign currency transactions.................... 397,133
Net unrealized appreciation on translation of
assets and liabilities in foreign currencies --
Global Consumer Products and Services
Portfolio........................................ 6,921
Net unrealized appreciation of investments --
Global Consumer Products and Services
Portfolio........................................ 382,312
----------
Total -- representing net assets applicable to
capital shares outstanding......................... $7,204,975
----------
----------
<FN>
- ----------------
* On sales of $50,000 or more, the offering price is reduced.
+ Redemption price per share is equal to the net asset value 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 CONSUMER PRODUCTS AND SERVICES FUND
STATEMENT OF OPERATIONS
December 30, 1994 (commencement of operations) to October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Investment income:
Interest income -- Global Consumer Products and Services
Portfolio.............................................. $ 37,739
Dividend income -- Global Consumer Products and Services
Portfolio.............................................. 22,144
----------
Total investment income............................... 59,883
----------
Expenses:
Expenses -- Global Consumer Products and Services
Portfolio.............................................. 54,854
Registration and filing fees............................ 101,900
Legal fees.............................................. 39,448
Audit fees.............................................. 31,280
Transfer agent fees (Note 2)............................ 29,425
Printing and postage expenses........................... 28,600
Service and distribution expenses: (Note 2)
Class A.................................. $ 8,002
Class B.................................. 7,388 15,390
--------
Directors' fees and expenses (Note 2)................... 9,520
Amortization of organization costs (Note 1)............. 8,607
Administration fees (Note 2)............................ 5,933
Fund accounting fees (Note 2)........................... 622
Other expenses.......................................... 2,014
----------
Total expenses before reductions...................... 327,593
----------
Expenses reimbursed by G.T. Capital Management, Inc.
(Note 2)............................................ (267,192)
Expense reductions -- Global Consumer Products and
Services Portfolio.................................. (1,677)
----------
Total net expenses.................................... 58,724
----------
Net investment income..................................... 1,159
----------
Net realized and unrealized gain on
investments and foreign currencies:
Net realized gain on investments -- Global
Consumer Products and Services
Portfolio................................. 402,673
Net realized loss on foreign currency
transactions -- Global Consumer Products
and Services Portfolio.................... (6,699)
--------
Net realized gain during the period................... 395,974
Net change in unrealized appreciation on
translation of assets and liabilities in
foreign currencies -- Global Consumer
Products and Services Portfolio........... 6,921
Net change in unrealized appreciation of
investments -- Global Consumer Products
and Services Portfolio.................... 382,312
--------
Net unrealized appreciation during the period......... 389,233
----------
Net realized and unrealized gain on investments and
foreign currencies....................................... 785,207
----------
Net increase in net assets resulting from operations...... $ 786,366
----------
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-3
<PAGE>
G.T. GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DECEMBER 30, 1994
(COMMENCEMENT OF
OPERATIONS) TO
OCTOBER 31, 1995
-----------------
Increase in net assets
<S> <C>
Operations:
Net investment income............................. $ 1,159
Net realized gain on investments and foreign
currency transactions -- Global Consumer Products
and Services Portfolio........................... 395,974
Net change in unrealized appreciation on
translation of assets and liabilities in foreign
currencies -- Global Consumer Products and
Services Portfolio............................... 6,921
Net change in unrealized appreciation of
investments -- Global Consumer Products and
Services
Portfolio........................................ 382,312
-----------------
Net increase in net assets resulting from
operations....................................... 786,366
-----------------
Capital share transactions: (Note 3)
Increase from capital shares sold and
reinvested....................................... 7,649,630
Decrease from capital shares repurchased.......... (1,331,021)
-----------------
Net increase from capital share transactions.... 6,318,609
-----------------
Total increase in net assets........................ 7,104,975
Net assets:
Beginning of period............................... 100,000
-----------------
End of period..................................... $ 7,204,975
-----------------
-----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-4
<PAGE>
G.T. GLOBAL CONSUMER PRODUCTS AND 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+
------------------------------ ------------------------------ -------------
DECEMBER 30, 1994 DECEMBER 30, 1994 JUNE 1, 1995
(COMMENCEMENT OF OPERATIONS) (COMMENCEMENT OF OPERATIONS) TO
TO OCTOBER 31, TO OCTOBER 31, OCTOBER 31,
1995* 1995* 1995*
------------------------------ ------------------------------ -------------
<S> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 11.43 $ 11.43 $ 11.84
------- ------- -------------
Income from investment operations:
Net investment income (loss).......... 0.02** (0.04)** 0.04**
Net realized and unrealized gain on
investments.......................... 3.14 3.14 2.76
------- ------- -------------
Net increase from investment
operations......................... 3.16 3.10 2.80
------- ------- -------------
Net asset value, end of period.......... $ 14.59 $ 14.53 $ 14.64
------- ------- -------------
------- ------- -------------
Total investment return (c)............. 27.65 %(b) 27.12 %(b) 23.65%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 4,082 $ 2,959 $ 164
Ratio of net investment income (loss) to
average net assets:
With expense reductions and
reimbursement by G.T. Capital (Notes
1 & 2)............................... 0.20 %(a) (0.30)%(a) 0.70%(a)
Without expense reductions and
reimbursement by G.T. Capital........ (11.11)%(a) (11.61)%(a) (10.61)%(a)
Ratio of expenses to average net assets:
With expense reductions and
reimbursement by G.T. Capital (Notes
1 & 2)............................... 2.32 %(a) 2.82 %(a) 1.82%(a)
Without expense reductions and
reimbursement by G.T. Capital........ 13.63 %(a) 14.13 %(a) 13.13%(a)
</TABLE>
- ----------------
(a) Annualized.
(b) Not annualized.
(c) Total investment return does not include sales charges.
* These selected per share data were calculated based upon weighted
average shares outstanding during the period.
** Before reimbursement by G.T. Capital Management, Inc., net investment
income per share would have been reduced by $1.12, $1.04 and $0.61 for
Class A, Class B, and Advisor Class, respectively.
+ 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 CONSUMER PRODUCTS AND SERVICES FUND
NOTES TO
FINANCIAL STATEMENTS
October 31, 1995
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
G.T. Global Consumer Products and 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 Consumer Products and 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.
(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 $51,500. 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 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
F-6
<PAGE>
G.T. GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
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 period ended
October 31, 1995, G.T. Global retained $3,380 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 period ended October 31,
1995, G.T. Global collected CDSCs in the amount of $986. 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 $318 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 CONSUMER PRODUCTS AND 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; and 200,000,000 were classified as shares of G.T. Global
Financial 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>
DECEMBER 30, 1994
(COMMENCEMENT OF OPERATIONS)
TO OCTOBER 31, 1995
-----------------------------
CLASS A SHARES AMOUNT
- ---------------------------------------------------- ------------ --------------
<S> <C> <C>
Shares sold......................................... 330,327 $ 4,257,766
Shares repurchased.................................. (54,980) (746,671)
------------ --------------
Net increase........................................ 275,347 $ 3,511,095
------------ --------------
------------ --------------
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 30, 1994
(COMMENCEMENT OF
OPERATIONS)
TO OCTOBER 31, 1995
-------------------
CLASS B SHARES AMOUNT
- ---------------------------------------------------- ------- ----------
<S> <C> <C>
Shares sold......................................... 246,365 $3,239,565
Shares repurchased.................................. (47,105) (579,906)
------- ----------
Net increase........................................ 199,260 $2,659,659
------- ----------
------- ----------
</TABLE>
<TABLE>
<CAPTION>
JUNE 1, 1995
(COMMENCEMENT OF
SALE OF
SHARES) TO OCTOBER
31, 1995
-------------------
ADVISOR CLASS SHARES AMOUNT
- ---------------------------------------------------- ------- ----------
<S> <C> <C>
Shares sold......................................... 11,525 $ 152,299
Shares repurchased.................................. (331) (4,444)
------- ----------
Net increase........................................ 11,194 $ 147,855
------- ----------
------- ----------
</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."
F-8
<PAGE>
GLOBAL CONSUMER PRODUCTS AND SERVICES PORTFOLIO
REPORT OF
INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
ANNUAL REPORT
To the Shareholders and Board of Trustees of Global Consumer Products and
Services Portfolio:
We have audited the accompanying statement of assets and liabilities of Global
Consumer Products and Services Portfolio, including the portfolio of
investments, as of October 31, 1995, the related statement of operations, the
statement of changes in net assets and supplementary data for the period from
December 30, 1994 (commencement of operations) to October 31, 1995. 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 audit.
We conducted our audit 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 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 audit provides 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
Consumer Products and Services Portfolio as of October 31, 1995, the results of
its operations, the changes in its net assets and the supplementary data for the
period from December 30, 1994 (commencement of operations) to October 31, 1995,
in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
BOSTON, MASSACHUSETTS
DECEMBER 15, 1995
F-9
<PAGE>
GLOBAL CONSUMER PRODUCTS AND 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>
Consumer Non-Durables (36.9%)
Gucci Group - NY Registered Shares{\/} .................... ITLY 9,000 $ 270,000 4.2
TEXTILES & APPAREL
Robert Mondavi Corp. "A"-/- ............................... US 8,400 237,300 3.7
BEVERAGES - ALCOHOLIC
Fila Holding S.p.A. - ADR{\/} ............................. ITLY 5,400 232,875 3.6
TEXTILES & APPAREL
Heineken N.V. ............................................. NETH 1,225 217,361 3.3
BEVERAGES - ALCOHOLIC
Mattel, Inc. .............................................. US 7,000 201,250 3.1
TOYS
Philip Morris Cos., Inc. .................................. US 2,225 188,013 2.9
TOBACCO
Healthy Planet Products, Inc.-/- .......................... US 14,000 171,500 2.6
OTHER CONSUMER GOODS
Noble China-/- ............................................ CAN 50,400 154,290 2.4
BEVERAGES - ALCOHOLIC
St. John Knits, Inc. ...................................... US 3,000 143,625 2.2
TEXTILES & APPAREL
Amway Japan Ltd. - ADR{\/} ................................ JPN 7,500 142,500 2.2
HOUSEHOLD PRODUCTS
De Rigo S.p.A. - ADR{\/} .................................. ITLY 5,000 103,125 1.6
TEXTILES & APPAREL
Seagram Co., Ltd. ......................................... CAN 2,800 101,919 1.6
BEVERAGES - ALCOHOLIC
Gillette Co. ............................................. US 2,000 96,750 1.5
PERSONAL CARE/COSMETICS
Nike, Inc. "B" ............................................ US 1,200 68,100 1.0
TEXTILES & APPAREL
Amway Asia Pacific Ltd.{\/} ............................... HK 1,900 62,225 1.0
HOUSEHOLD PRODUCTS
------------
2,390,833
------------
Services (30.7%)
Safeway, Inc.-/- .......................................... US 4,600 217,350 3.3
RETAILERS-FOOD
Vons Cos., Inc.-/- ........................................ US 8,100 205,538 3.2
RETAILERS-FOOD
Hennes & Mauritz AB "B" Free ............................. SWDN 2,970 194,314 3.0
RETAILERS-APPAREL
Wickes PLC ................................................ UK 94,000 184,969 2.8
RETAILERS-OTHER
Fast Retailing Co., Ltd. .................................. JPN 3,700 180,638 2.8
RETAILERS-APPAREL
Polygram N.V. - ADR{\/} ................................... NETH 2,900 179,800 2.8
BROADCASTING & PUBLISHING
Emmis Broadcasting Corp. "A"-/- ........................... US 6,400 169,600 2.6
BROADCASTING & PUBLISHING
Tandy Corp. ............................................... US 3,300 162,938 2.5
RETAILERS-OTHER
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-10
<PAGE>
GLOBAL CONSUMER PRODUCTS AND SERVICES PORTFOLIO
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Country Shares Value Assets {d}
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Services (Continued)
La Quinta Inns, Inc. ..................................... US 5,900 $ 151,925 2.3
LODGING
Fabri-Centers of America: ................................. US -- -- 2.0
RETAILERS-APPAREL
"A"-/- .................................................. -- 4,900 72,888 --
"B"-/- .................................................. -- 4,900 56,963 --
Aoyama Trading Co., Ltd. ................................. JPN 4,400 118,814 1.8
RETAILERS-APPAREL
Capital Cities/ABC, Inc. .................................. US 900 106,763 1.6
BROADCASTING & PUBLISHING
------------
2,002,500
------------
Consumer Durables (12.3%)
Redman Industries, Inc.-/- ............................... US 8,100 210,600 3.2
HOUSING
Belmont Homes, Inc. ....................................... US 11,500 201,250 3.1
HOUSING
Black & Decker Corp. ...................................... US 5,800 196,475 3.0
APPLIANCES & HOUSEHOLD
Nokia AB Preferred - ADR{\/} .............................. FIN 3,500 195,125 3.0
CONSUMER ELECTRONICS
------------
803,450
------------
Multi Industry/Miscellaneous (3.0%)
Malbak Ltd. ............................................... SAFR 29,000 192,856 3.0
------------
CONGLOMERATE
Health Care (2.9%)
COR Therapeutics, Inc.-/- ................................. US 10,000 103,750 1.6
BIOTECHNOLOGY
Biovail Corporation International-/- ...................... US 2,200 85,250 1.3
PHARMACEUTICALS
------------
189,000
------------
Technology (0.9%)
Brooktree Corp.-/- ........................................ US 5,000 60,000 0.9
COMPUTERS & PERIPHERALS
------------ -----
TOTAL EQUITY INVESTMENTS (cost $5,256,327) ................. 5,638,639 86.7
------------ -----
<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
5.8%, collateralized by $1,180,000 U.S. Treasury Bill, due
2/08/96 (market value of collateral is $1,162,595,
including accrued interest). (cost $1,138,183) .......... 1,138,183 17.5
------------ -----
TOTAL INVESTMENTS (cost $6,394,510) ......................... 6,776,822 104.2
Other Assets and Liabilities ................................ (274,568) (4.2)
------------ -----
NET ASSETS .................................................. $ 6,502,254 100.0
------------ -----
------------ -----
</TABLE>
- ----------------
{d} Percentages indicated are based on net assets of $6,502,254.
{\/} U.S. currency denominated.
-/- Non-income producing security.
The accompanying notes are an integral part of the financial statements.
F-11
<PAGE>
GLOBAL CONSUMER PRODUCTS AND SERVICES PORTFOLIO
<TABLE>
<C> <S>
* For Federal income tax purposes, cost is $6,394,510 and
appreciation (depreciation) is as follows:
Unrealized appreciation: $ 536,510
Unrealized depreciation: (154,198)
-------------
Net unrealized appreciation: $ 382,312
-------------
-------------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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>
Canada (CAN/CAD) ..................... 4.0 4.0
Finland (FIN/FIM) .................... 3.0 3.0
Hong Kong (HK/HKD) ................... 1.0 1.0
Italy (ITLY/ITL) ..................... 9.4 9.4
Japan (JPN/JPY) ...................... 6.8 6.8
Netherlands (NETH/NLG) ............... 6.1 6.1
South Africa (SAFR/ZAR) .............. 3.0 3.0
Sweden (SWDN/SEK) .................... 3.0 3.0
United Kingdom (UK/GBP) .............. 2.8 2.8
United States (US/USD) ............... 47.6 13.3 60.9
------ --- -----
Total ............................... 86.7 13.3 100.0
------ --- -----
------ --- -----
<FN>
- ----------------
{d} Percentages indicated are based on net assets of $6,502,254.
</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.................................................................. 193,549 98.70000 11/24/95 $ 6,451
------------- -------------
Total Contracts to Sell (Receivable amount $200,000)...................... 193,549 6,451
------------- -------------
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF NET ASSETS IS 2.98%
Total Open Forward Foreign Currency Contracts, Net........................ $ 6,451
-------------
-------------
</TABLE>
- ----------------
See Note 1 to the financial statements.
The accompanying notes are an integral part of the financial statements.
F-12
<PAGE>
GLOBAL CONSUMER PRODUCTS AND SERVICES PORTFOLIO
STATEMENT OF ASSETS
AND LIABILITIES
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets:
Investments in securities, at value (cost
$5,256,327) (Note 1)............................. $5,638,639
Repurchase agreement, at value and cost (Note
1)............................................... 1,138,183
Receivable for open forward foreign currency
contracts, net (Note 1).......................... 6,451
Dividends receivable.............................. 4,747
----------
Total assets.................................... 6,788,020
----------
Liabilities:
Payable for securities purchased.................. 192,170
Due to custodian.................................. 54,178
Payable for investment management and
administration fees (Note 2)..................... 16,284
Payable for professional fees..................... 8,405
Payable for Trustees' fees and expenses (Note
2)............................................... 6,080
Payable for printing and postage expenses......... 3,200
Payable for custodian fees (Note 1)............... 2,409
Other accrued expenses............................ 3,040
----------
Total liabilities............................... 285,766
----------
Net assets.......................................... $6,502,254
----------
----------
Net assets consist of:
Paid in capital................................... $5,710,341
Accumulated net investment income................. 6,706
Accumulated net realized gain on investments and
foreign currency transactions.................... 395,974
Net unrealized appreciation on translation of
assets and liabilities in foreign currencies..... 6,921
Net unrealized appreciation of investments........ 382,312
----------
Total -- representing net assets applicable to
shares of beneficial interest outstanding.......... $6,502,254
----------
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-13
<PAGE>
GLOBAL CONSUMER PRODUCTS AND SERVICES PORTFOLIO
STATEMENT OF OPERATIONS
December 30, 1994 (commencement of operations) to October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Investment income: (Note 1)
Interest income......................................... $ 37,739
Dividend income (net of foreign withholding tax of
$525).................................................. 22,144
--------
Total investment income............................... 59,883
--------
Expenses:
Investment management and administration fees (Note
2)..................................................... 16,284
Custodian fees (Note 1)................................. 15,890
Legal fees.............................................. 6,080
Trustees' fees and expenses (Note 2).................... 6,080
Audit fees.............................................. 4,280
Printing and postage expenses........................... 3,200
Other expenses.......................................... 3,040
--------
Total expenses before reductions...................... 54,854
--------
Expense reductions (Notes 1 & 4).................... (1,677)
--------
Total net expenses.................................... 53,177
--------
Net investment income..................................... 6,706
--------
Net realized and unrealized gain on
investments and foreign currencies: (Note 1)
Net realized gain on investments........... $402,673
Net realized loss on foreign currency
transactions.............................. (6,699)
--------
Net realized gain during the period................... 395,974
Net change in unrealized appreciation on
translation of assets and liabilities in
foreign currencies........................ 6,921
Net change in unrealized appreciation of
investments............................... 382,312
--------
Net unrealized appreciation during the period......... 389,233
--------
Net realized and unrealized gain on investments and
foreign currencies....................................... 785,207
--------
Net increase in net assets resulting from operations...... $791,913
--------
--------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-14
<PAGE>
GLOBAL CONSUMER PRODUCTS AND SERVICES PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DECEMBER 30, 1994
(COMMENCEMENT OF
OPERATIONS) TO
OCTOBER 31, 1995
-----------------
Increase in net assets
<S> <C>
Operations:
Net investment income............................. $ 6,706
Net realized gain on investments and foreign
currency transactions............................ 395,974
Net change in unrealized appreciation on
translation of assets and liabilities in foreign
currencies....................................... 6,921
Net change in unrealized appreciation of
investments...................................... 382,312
-----------------
Net increase in net assets resulting from
operations....................................... 791,913
-----------------
Beneficial interest transactions:
Contributions..................................... 6,002,349
Withdrawals....................................... (392,108)
-----------------
Net increase from beneficial interest
transactions................................... 5,610,241
-----------------
Total increase in net assets........................ 6,402,154
Net assets:
Beginning of period............................... 100,100
-----------------
End of period..................................... $6,502,254
-----------------
-----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-15
<PAGE>
GLOBAL CONSUMER PRODUCTS AND SERVICES PORTFOLIO
SUPPLEMENTARY DATA
- --------------------------------------------------------------------------------
Contained below are ratios and supplemental data that have been derived
from information provided in the financial statements.
<TABLE>
<CAPTION>
DECEMBER 30, 1994
(COMMENCEMENT OF OPERATIONS)
TO OCTOBER 31, 1995
------------------------------
<S> <C>
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 6,502
Ratio of net investment income to
average net assets:.................... 0.30 %(a)
Ratio of expenses to average net assets:
With expense reductions (Notes 1 &
4)................................... 2.37 %(a)
Without expense reductions............ 2.44 %(a)
Portfolio turnover rate................. 240 %(a)
</TABLE>
- ----------------
(a) Annualized.
The accompanying notes are an integral part of the financial statements.
F-16
<PAGE>
GLOBAL CONSUMER PRODUCTS AND SERVICES PORTFOLIO
NOTES TO
FINANCIAL STATEMENTS
October 31, 1995
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Global Consumer Products and 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 and
maturities of short-term securities, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
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.
F-17
<PAGE>
GLOBAL CONSUMER PRODUCTS AND SERVICES PORTFOLIO
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contracts") 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 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 amount 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.
F-18
<PAGE>
GLOBAL CONSUMER PRODUCTS AND SERVICES PORTFOLIO
(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 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
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. At
October 31, 1995, there were no securities on loan to brokers. For the period
ended October 31, 1995, the Fund received fees of $107 which were used to reduce
the Fund's custodian fees.
(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 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 Portfolio may focus its investments in certain related consumer
products and 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 Consumer Products and Services Fund or G.T.
Capital.
3. PURCHASES AND SALES OF SECURITIES
For the period ended October 31, 1995, purchases and sales of investment
securities by the Portfolio, other than short-term investments, aggregated
$8,990,298 and $4,141,883, respectively. There were no purchases or sales of
U.S. government obligations by the Portfolio for the period 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 period ended October 31, 1995, the
Portfolio's expenses were reduced by $1,570 under these arrangements.
F-19
<PAGE>
G.T. GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
NOTES
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<PAGE>
GT GLOBAL CONSUMER PRODUCTS AND 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
G.T. GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
