<PAGE>
INVESTING IN
A BROAD
RANGE OF
INDUSTRIES
WORLDWIDE
GT GLOBAL
NATURAL
RESOURCES
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 Natural Resources Fund seeks long-term capital growth by
investing in equity securities of companies throughout the world that own,
explore or develop natural resources, including but not limited to ferrous and
non-ferrous metals, strategic metals and precious metals, chemicals, forestry
products, foodstuffs and refined products including steel, and other basic
commodities, or that supply goods and services to such companies.
PERFORMANCE REVIEW
The Fund's total return for the 12 months ending October 31, 1995, was -7.58%
for Class A shares (-11.97% including the maximum 4.75% sales charge). Total
return for Class B shares was -8.05% (-12.64% including the maximum effect of
the 5% contingent deferred sales charge). During the same period the Morgan
Stanley Capital International (MSCI) World Index(1) returned 10.03%. The index
is not available for investment and does not include the effects of sales
charges and professional management fees. In addition, the index is designed to
represent the performance of all markets and does not reflect the Fund's
concentration in the natural resources industry. For more performance
information, please see page 7.
The past 12 months were a particularly difficult time for the Fund, with much of
the investment period marked by a global selloff in cyclical stocks (earnings of
cyclical companies usually move with the economy). The Fund underperformed the
index in part because the sectors in which it invests were especially hard-hit
by short-term concerns for their growth potential. The most affected areas over
the period included steel stocks (down 19%) and gold (down 13%). Nominal gains
were registered by energy stocks (up 7%), chemical stocks (up 3%) and forest
product stocks (up 1%); non-ferrous metal stocks were unchanged. Though the Fund
had a 30% weighting in energy stocks, the declines in gold and steel offset the
modest gains in the energy sector. Finally, the Fund suffered relative to the
index because of its overweighting in Australia. In general, as natural
resources were sold off globally in the first quarter, Australian cyclicals were
sold off even more.
While profits in forest products, chemicals, mining and steel industries
increased substantially, investors were unwilling to pay for these earnings,
fearing that they might be peak cyclical earnings. Energy stocks increased, not
because of an increase in oil prices but, rather, because they are considered
defensive industries.
- ------------------
(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.
1
<PAGE>
Defensive securities are generally considered more stable than average
securities and typically provide a more stable return. We believe the selloff in
natural resource stocks reflected concerns about continued global economic
growth, particularly in the United States.
In addition, although the Fund does not maintain a large exposure to emerging
markets, holdings in South America, South Africa and India suffered in the
general selloff of emerging markets following the collapse of the Mexican market
in December 1994.
MARKET REVIEW
The strong correlation between global economic growth and commodity prices
encourages natural resource investors to follow world industrial production with
considerable interest. World growth declined modestly during 1995 and is
expected to remain at current levels, or accelerate modestly in 1996. For the
latter half of 1995, the United States, Germany and Japan reduced interest
rates, which we feel should increase economic activity over the long run. Growth
in the Asian regional economies continued to be rapid, although decelerating
slightly. Asia represents a significant proportion of global demand for natural
resources.
We expect sustained economic growth to continue to fuel demand for most
commodities into 1996. We expect there to be modest supply additions in most
primary commodities, with the exception of steel and copper which should
experience significant additions to supply. Given the modest demand for natural
resources and the modest supply additions, we are projecting that most commodity
prices will stay at or near current levels.
PRECIOUS METALS
Low levels of inflation worldwide continued to drive down investor demand for
gold. Performance has been lackluster since early 1994 and prices steady,
trading between US$370 and US$400. The outlook for platinum, on the other hand,
we feel is generally more positive due to the European regulatory requirements
for catalytic converters and the expected gradual economic recovery in Japan. In
addition, platinum's premium over gold has widened over speculation about a new
technology that utilizes platinum to remove pollutants from the air.
OTHER METALS AND BULK COMMODITIES
Although stockpiles for all base metals on the London Metals Exchange continued
to decline, speculative selling drove down base metal prices from their 1994
highs, with the exception of copper. As fundamentals begin to reassert
themselves,
2
<PAGE>
we expect prices to resume their upward trend in 1996. The outlook for the major
bulk commodities, coal and iron ore, is positive as major producers continue to
ship record tonnage in response to growing demand.
ENERGY
The price of oil has traded between US$17 and US$20 a barrel for most of the
year. Supply and demand appear to be fairly well in balance and are projected to
increase 1% to 1.5%, with a major increase in supply from the North Sea. We
expect oil to trade in a range between US$17 to US$22 a barrel over the next 12
months. U.S. natural gas prices have been low all year due to the overhang of
gas inventories from 1994's exceptionally warm winter. Assuming normal
temperatures, we anticipate seasonally strong gas prices this winter.
FOREST PRODUCTS
The turnaround in world demand since its trough in April 1994 has led to a
considerable rise in forest product prices: pulp (up 110%), newsprint (up 70%),
linerboard (up 70%), and paper (up 70%). While the price increases have been
nothing short of dramatic, it appears they are slowing or have possibly peaked.
Significant inventory levels in all grades portend a slowing in the price
momentum. We anticipate higher prices in 1996 only in newsprint and paper, as
inventories in these two products are the lowest and capacity additions will be
low.
STEEL
Steel prices are declining due to significant increases in capacity of electric
arc flat-rolled steel (forecasted to increase 4% to 7% annually in North America
over the next three years). In addition, the slowdown in the U.S. economy has
weakened demand for steel. Overall, the increased capacity in the U.S., combined
with the softening in demand, has affected prices globally. We expect steel
prices to continue to be soft in 1996, as the market absorbs the new electric
arc furnace capacity.
CHEMICALS AND FERTILIZERS
Commodity chemical prices appear to have peaked. Prices for ethylene, styrene
and propylene are declining after increasing 60% to 80% in the first quarter of
1994. Price declines are the product of new capacity additions and lower demand
in the U.S. and China, and we expect commodity chemical prices to remain soft in
1996. Fertilizer prices, on the other hand, continue to rise due to strong
demand in North America, China and India. We expect them to further rise, as
world grain inventories are at 20-year lows and China and India have instituted
policies to increase the amount of fertilizer application.
3
<PAGE>
PORTFOLIO STRATEGY
Our emphasis going forward will be on international oil companies, machinery
suppliers to the forest products and mining industries, manufacturers of carbon
electrodes used in electric arc furnaces, and specialty chemical and fertilizer
companies.
OUTLOOK
We continue to expect companies involved in forest products (other than lumber),
chemicals and base metals to generate strong cash flows over the next few years,
primarily as a result of high prices. While some companies need to reduce debt,
others are looking to expand their operations to maintain growth. Share buybacks
and takeover activity should also continue throughout 1996.
We anticipate a modest outlook for world growth, making commodity selection
important. Over the next year, the commodity prices we expect to remain firm are
those in which capacity utilization is the most constricted, such as paper,
newsprint, fertilizers and selected specialty chemicals. We are also focused on
companies that supply capital goods to the forest products and mining
industries, as well as the electric arc steel industry. We feel neutral about
energy (apart from oil) and precious metals and own companies that have
substantial expected production growth, or cost-cutting potential.
CHRISTIAN WIGNALL CHARLES WALL
CHIEF INVESTMENT OFFICER PORTFOLIO MANAGER
GLOBAL EQUITIES SYDNEY
SAN FRANCISCO DEREK WEBB
PORTFOLIO MANAGER
SAN FRANCISCO
NOVEMBER 20, 1995
G.T. GLOBAL NATURAL RESOURCES FUND
4
<PAGE>
KEY PORTFOLIO HOLDINGS*
UCAR INTERNATIONAL UNITED STATES
UCAR is the largest manufacturer of carbon graphite rods for electric arc
furnaces, with 32% of the market. Demand for graphite rods is expected to
increase 4% to 7% over the next three years due to an 11% annual increase in
electric arc furnaces during the period. Electric arc furnaces produce steel at
lower costs than integrated steel companies. UCAR's earnings are expected to
increase as a result of a 3% to 4% increase in graphite rod volumes, a 1% to 2%
increase in price, continued cost-cutting and lower interest expenses.
MOBIL UNITED STATES
Mobil is an international integrated oil company based in the U.S. Its
operations in exploration and production represent half of earnings, refining
and marketing one-quarter and chemicals one-quarter. We expect company earnings
to be enhanced by further restructuring and cost-cutting, strong profits from
the chemical division and solid prospects from the oil exploration and
production division. The company's CEO would like to increase earnings by 40%
over the next three years, exclusive of any improvement in oil or chemical
prices.
BRITISH PETROLEUM (BP) UK
British Petroleum is an international integrated oil company based in the UK. We
expect two-thirds of operating profits to be derived from oil exploration and
production, one-quarter from refining and marketing and the balance from
chemicals. Although BP is now three years into its restructuring, we think
profits should benefit from further cost-cutting and productivity improvements.
SAGA PETROLEUM NORWAY
Saga is a pure exploration and production company operating in the North Sea.
Saga's production is 95% oil and 5% natural gas, and we expect the company to
increase production by 40% over the next three years. In addition, Saga is
expected to reduce administration costs 25% by 1996. Saga is also one of the
cheapest international oil companies as measured by cash flow multiples or net
asset values.
CYTEC INDUSTRIES UNITED STATES
Cytec is a specialty chemical company spun off from American Cyanamid. The
company manufactures many different chemicals for the paint, apparel, water
treatment and construction industries. Prices continue to rise for the majority
of the company's chemicals. In addition, the company continues to actively cut
costs and plans to expand margins to 15% from the current level of 8%.
- ------------------
* The Fund may or may not continue to hold these or any other securities
mentioned in this report.
5
<PAGE>
READING & BATES UNITED STATES
Reading & Bates owns and operates a fleet of off-shore oil rigs leased to the
major oil companies to search for new reserves. The fleet comprises 16 rigs, 6
of which can drill in water greater than 1,500 feet, and 10 rigs that can
operate to depths of 300 feet. Rigs are located throughout the Gulf of Mexico,
the North Sea, the Mediterranean, Africa and Asia. Rates have been increasing
due to major oil companies' expanding interest in off-shore drilling.
REPSOL SPAIN
Repsol is the largest oil company in Spain and controls 65% of Spain's gas
stations. A fully integrated firm, with 50% in refining and marketing, 25% in
natural gas distribution, 13% in chemicals and 10% in exploration and
production, margins are expected to expand with a recovery in Spanish GNP. Gas
consumption in Spain is expected to continue to increase 15% annually through
the end of the decade, and we anticipate a 30% increase in Repsol's oil
production over this time.
CABOT CORPORATION UNITED STATES
Cabot is a specialty chemical company with roughly 70% of its business in carbon
black (used in tires). Prices of this product have been increasing as
significant capacity has been shut down in North America. As a result,
management is actively divesting the remaining non-carbon black businesses. The
company is generating significant excess cash which it will use to reduce debt
and buy back stock.
RAUMA FINLAND
Rauma manufactures machinery for the forest products industry (67% of
production) and the construction industry (33%). Orders for the company's forest
products equipment have been increasing due to the rebound of the industry. As
forest product companies continue to profit from current high prices, we expect
spending on plant and equipment to rise.
LONRHO UK
Lonrho is a diversified resource house whose key assets include mining, hotels
and assorted agricultural and industrial businesses. Though Lonrho is based in
the UK, many of its assets are in Africa. Lonrho has traded at a significant
discount to the value of its underlying assets for some time, but we expect
changes at the top management level to produce a consolidation in the company's
diverse holdings and a turnaround in the profit performance of its wholly owned
interests.
6
<PAGE>
G.T. GLOBAL NATURAL RESOURCES FUND
PORTFOLIO SUMMARY
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PERFORMANCE SUMMARY
<S> <C> <C>
Month G.T. Global Natural Resources Fund MSCI World
05/31/94 9,525 10,000
06/30/94 9,358 9,974
07/31/94 9,658 10,165
08/31/94 10,142 10,473
09/30/94 10,475 10,200
10/31/94 10,342 10,492
11/30/94 9,783 10,039
12/31/94 9,691 10,138
01/31/95 9,098 9,987
02/28/95 8,989 10,135
03/31/95 9,023 10,626
04/30/95 9,441 10,998
05/31/95 9,566 11,094
06/30/95 9,624 11,093
07/31/95 10,142 11,650
08/31/95 10,009 11,393
09/30/95 9,917 11,727
10/31/95 9,558 11,544
</TABLE>
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
THE CHART AT LEFT SHOWS THE PERFORMANCE OF THE G.T. GLOBAL
NATURAL RESOURCES FUND CLASS A SHARES SINCE THE FUND'S INCEPTION VERSUS THE MSCI
WORLD INDEX. THIS REPRESENTS A CUMULATIVE RETURN OF -4.42% AND AN AVERAGE TOTAL
RETURN OF -3.14%. 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* -7.58% 0.24% -11.97% -3.14%
CLASS B* -8.05% -0.29% -12.64% -3.11%
ADVISOR CLASS** N/A 0.17% 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.
+ 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 35.0%
EUROPE 33.6%
ASIA-PACIFIC 8.8%
CANADA 7.3%
AFRICA 6.4%
SHORT-TERM & OTHER 8.9%
SECTOR ALLOCATION OF NET ASSETS AS OF OCTOBER 31, 1995
OIL 31.3%
CHEMICALS 12.8%
MACHINARY & ENGINEERING 9.5%
METAL & NON-FERROUS 8.2%
FOREST PRODUCTS 7.7%
METALS-STEEL 7.1%
MISC. MATERIALS & COMPONENTS 6.5%
GOLD 4.8%
FOOD 3.2%
SHORT-TERM & OTHER 8.9%
</TABLE>
ALLOCATIONS WILL CHANGE BASED ON CURRENT MARKET CONDITIONS.
7
<PAGE>
GT GLOBAL
NATURAL
RESOURCES
FUND
FINANCIAL
STATEMENTS
<PAGE>
G.T. GLOBAL NATURAL RESOURCES FUND
REPORT OF
INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
ANNUAL REPORT
To the Shareholders of G.T. Global Natural Resources 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 Natural Resources Fund, one of the funds organized as a series of G.T.
Investment Funds, Inc., as of October 31, 1995, 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 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 Natural Resources Fund as of October 31, 1995, the results of its
operations, 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 NATURAL RESOURCES FUND
STATEMENT OF ASSETS
AND LIABILITIES
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets:
Investments in Global Natural Resources Portfolio
(cost $25,952,266) (Note 1)...................... $26,759,884
Receivable from G.T. Capital Management, Inc.
(Note 2)......................................... 319,110
Unamortized organizational costs (Note 1)......... 36,854
Receivable for Fund shares sold................... 33,663
-----------
Total assets.................................... 27,149,511
-----------
Liabilities:
Payable for Fund shares repurchased............... 302,940
Payable for administration fees (Note 2).......... 74,485
Payable for printing and postage expenses......... 32,910
Payable for professional fees..................... 25,278
Payable for service and distribution expenses
(Note 2)......................................... 18,237
Payable for registration and filing fees.......... 12,148
Payable for transfer agent fees (Note 2).......... 8,635
Payable for Directors' fees and expenses (Note
2)............................................... 752
Payable for fund accounting fees (Note 2)......... 610
Other accrued expenses............................ 2,298
-----------
Total liabilities............................... 478,293
-----------
Net assets.......................................... $26,671,218
-----------
-----------
Class A:
Net asset value and redemption price per share
($12,597,970 DIVIDED BY 1,101,106 shares
outstanding)....................................... $ 11.44
-----------
-----------
Maximum offering price per share
(100/95.25 of $11.44) *............................ $ 12.01
-----------
-----------
Class B:+
Net asset value and offering price per share
($13,978,465 DIVIDED BY 1,230,103 shares
outstanding)....................................... $ 11.36
-----------
-----------
Advisor Class: (Notes 1 & 3)
Net asset value, offering price per share, and
redemption price per share
($94,783 DIVIDED BY 8,267 shares outstanding)...... $ 11.47
-----------
-----------
Net assets consist of:
Paid in capital (Note 3).......................... $28,316,783
Undistributed net investment income............... 47,438
Accumulated net realized loss on investments and
foreign currency transactions.................... (2,500,621)
Net unrealized depreciation on translation of
assets and liabilities in foreign
currencies -- Global Natural Resources
Portfolio........................................ (48,503)
Net unrealized appreciation of investments --
Global Natural Resources Portfolio............... 856,121
-----------
Total -- representing net assets applicable to
capital shares outstanding......................... $26,671,218
-----------
-----------
<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 NATURAL RESOURCES FUND
STATEMENT OF OPERATIONS
Year ended October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Investment income:
Interest income -- Global Natural Resources Portfolio...... $ 437,615
Dividend income -- Global Natural Resources Portfolio...... 392,475
-----------
Total investment income.................................. 830,090
-----------
Expenses:
Expenses -- Global Natural Resources Portfolio............. 284,129
Service and distribution expenses: (Note 2)
Class A.................................. $ 73,794
Class B.................................. 149,950 223,744
-----------
Transfer agent fees (Note 2)............................... 141,492
Registration and filing fees............................... 136,100
Printing and postage expenses.............................. 120,650
Administration fees (Note 2)............................... 74,485
Audit fees................................................. 53,750
Legal fees................................................. 44,782
Directors' fees and expenses (Note 2)...................... 12,450
Amortization of organization costs (Note 1)................ 10,300
Fund accounting fees (Note 2).............................. 7,619
Other expenses............................................. 1,251
-----------
Total expenses before reductions......................... 1,110,752
-----------
Expenses reimbursed by G.T. Capital Management, Inc.
(Note 2)............................................... (319,110)
Expense reductions -- Global Natural Resources
Portfolio.............................................. (9,670)
-----------
Total net expenses....................................... 781,972
-----------
Net investment income........................................ 48,118
-----------
Net realized and unrealized gain (loss) on
investments and foreign currencies:
Net realized loss on investments -- Global
Natural Resources Portfolio............... (2,302,171)
Net realized loss on foreign currency
transactions -- Global Natural Resources
Portfolio................................. (89,256)
-----------
Net realized loss during the year........................ (2,391,427)
Net change in unrealized depreciation on
translation of assets and liabilities in
foreign currencies -- Global Natural
Resources Portfolio....................... (43,764)
Net change in unrealized appreciation of
investments -- Global Natural Resources
Portfolio................................. 177,530
-----------
Net unrealized appreciation during the year.............. 133,766
-----------
Net realized and unrealized loss on investments and foreign
currencies.................................................. (2,257,661)
-----------
Net decrease in net assets resulting from operations......... $(2,209,543)
-----------
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-3
<PAGE>
G.T. GLOBAL NATURAL RESOURCES 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 (Decrease) in net assets
<S> <C> <C>
Operations:
Net investment income...................... $ 48,118 $ 106,264
Net realized loss on investments and
foreign currency transactions -- Global
Natural Resources Portfolio............... (2,391,427) (130,259)
Net change in unrealized depreciation on
translation of assets and
liabilities in foreign currencies --
Global Natural Resources Portfolio........ (43,764) (4,739)
Net change in unrealized appreciation of
investments -- Global Natural
Resources Portfolio....................... 177,530 678,591
----------------- -----------------
Net increase (decrease) in net assets
resulting from operations............... (2,209,543) 649,857
Class A:
Distributions to shareholders: (Note 1)
From net investment income................. (36,529) --
Class B:
Distributions to shareholders: (Note 1)
From net investment income................. (30,368) --
----------------- -----------------
Total distributions...................... (66,897) --
----------------- -----------------
Capital share transactions: (Note 3)
Increase from capital shares sold and
reinvested................................ 38,611,615 34,666,146
Decrease from capital shares repurchased... (37,864,366) (7,215,594)
----------------- -----------------
Net increase from capital share
transactions............................ 747,249 27,450,552
----------------- -----------------
Total increase (decrease) in net assets...... (1,529,191) 28,100,409
Net assets:
Beginning of period........................ 28,200,409 100,000
----------------- -----------------
End of period.............................. $ 26,671,218 $28,200,409
----------------- -----------------
----------------- -----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-4
<PAGE>
G.T. GLOBAL NATURAL RESOURCES FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share
outstanding, total investment return, ratios and supplemental data. This
information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
CLASS A CLASS B ADVISOR
------------------------------- ------------------------------- CLASS+
MAY 31, 1994 MAY 31, 1994 -------------
(COMMENCEMENT OF (COMMENCEMENT OF JUNE 1, 1995
YEAR ENDED OPERATIONS) TO YEAR ENDED OPERATIONS) TO TO
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1995 1994 1995 1994 1995
----------- ------------------ ----------- ------------------ -------------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 12.41 $ 11.43 $ 12.38 $ 11.43 $ 11.45
----------- -------- ----------- -------- -------------
Income from investment operations:
Net investment income (loss).......... 0.04* 0.06* (0.02)* 0.03* 0.11*
Net realized and unrealized gain
(loss) on investments................ (0.98) 0.92 (0.98) 0.92 (0.09)
----------- -------- ----------- -------- -------------
Net increase (decrease) from
investment operations.............. (0.94) 0.98 (1.00) 0.95 0.02
----------- -------- ----------- -------- -------------
Distributions to shareholders:
From net investment income............ (0.03) 0.00 (0.02) 0.00 0.00
----------- -------- ----------- -------- -------------
Total distributions................. (0.03) 0.00 (0.02) 0.00 0.00
----------- -------- ----------- -------- -------------
Net asset value, end of period.......... $ 11.44 $ 12.41 $ 11.36 $ 12.38 $ 11.47
----------- -------- ----------- -------- -------------
----------- -------- ----------- -------- -------------
Total investment return (c)............. (7.58)% 8.57 %(b) (8.05)% 8.31 %(b) 0.17%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 12,598 $ 14,797 $ 13,978 $ 13,404 $ 95
Ratio of net investment income (loss) to
average net assets:
With expense reductions and
reimbursement from G.T. Capital
(Notes 1 & 2)........................ 0.41% 2.63 %(a) (0.09)% 2.13 %(a) 0.91%(a)
Without expense reductions and
reimbursement from G.T. Capital...... (0.69)% 0.65 %(a) (1.19)% 0.15 %(a) (0.19)%(a)
Ratio of expenses to average net assets:
With expense reductions and
reimbursement from G.T. Capital
(Notes 1 & 2)........................ 2.37% 2.40 %(a) 2.87% 2.90 %(a) 1.87%(a)
Without expense reductions and
reimbursement from G.T. Capital...... 3.47% 4.38 %(a) 3.97% 4.88 %(a) 2.97%(a)
</TABLE>
- ----------------
(a) Annualized.
(b) Not annualized.
(c) Total investment return does not include sales charges.
* Before reimbursement by G.T. Capital Management, Inc., the net
investment income (loss) per share would have been affected by $0.14,
$0.13, and $0.12 for Class A, Class B, and Advisor Class,
respectively, for the year ended October 31, 1995, and $0.04 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.
F-5
<PAGE>
G.T. GLOBAL NATURAL RESOURCES FUND
NOTES TO
FINANCIAL STATEMENTS
October 31, 1995
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
G.T. Global Natural Resources 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 Natural Resources 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 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
$2,547,364, of which $91,443 expires in 2002 and $2,455,921 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 $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.
F-6
<PAGE>
G.T. GLOBAL NATURAL RESOURCES FUND
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
$16,516 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 $73,935. 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 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 $1,931 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 NATURAL RESOURCES 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 Financial
Services 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
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................................................................ 2,262,790 $25,998,648 1,647,315 $20,040,497
Shares issued in connection with reinvestment of distributions............. 2,665 30,350 -- --
---------- ----------- --------- -----------
2,265,455 26,028,998 1,647,315 20,040,497
Shares repurchased......................................................... (2,356,872) (27,189,124) (459,166) (5,648,929)
---------- ----------- --------- -----------
Net increase (decrease).................................................... (91,417) $(1,160,126) 1,188,149 $14,391,568
---------- ----------- --------- -----------
---------- ----------- --------- -----------
<CAPTION>
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................................................................ 1,073,588 $12,447,266 1,205,189 $14,625,649
Shares issued in connection with reinvestment of distributions............. 2,190 24,898 -- --
---------- ----------- --------- -----------
1,075,778 12,472,164 1,205,189 14,625,649
Shares repurchased......................................................... (928,373) (10,660,475) (126,865) (1,566,665)
---------- ----------- --------- -----------
Net increase............................................................... 147,405 $ 1,811,689 1,078,324 $13,058,984
---------- ----------- --------- -----------
---------- ----------- --------- -----------
</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................................................................ 9,525 $ 110,453
Shares issued in connection with reinvestment of distributions............. -- --
---------- -----------
9,525 110,453
Shares repurchased......................................................... (1,258) (14,767)
---------- -----------
Net increase............................................................... 8,267 $ 95,686
---------- -----------
---------- -----------
</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 $0.160 per share (representing an approximate total of
$394,789). The total amount of taxes paid by the Fund to such countries was
approximately $0.015 per share (representing an approximate total of $36,734).
F-8
<PAGE>
GLOBAL NATURAL RESOURCES PORTFOLIO
REPORT OF
INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
ANNUAL REPORT
To the Shareholders and Board of Trustees of Global Natural Resources Portfolio:
We have audited the accompanying statement of assets and liabilities of Global
Natural Resources Portfolio, including the schedule of Portfolio Investments, as
of October 31, 1995, the related statement of operations for the year then
ended, the statements of changes in net assets and the 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
Natural Resources Portfolio as of October 31, 1995, the results of its
operations for the year then ended, the changes in its net assets and the
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 NATURAL RESOURCES PORTFOLIO
PORTFOLIO OF INVESTMENTS
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Country Shares Value Assets {d}
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Oil (31.3%)
Mobil Corp. ............................................... US 11,000 $ 1,108,250 4.1
British Petroleum Co., PLC ................................ UK 150,100 1,103,153 4.1
Saga Petroleum AS "A" ..................................... NOR 85,000 1,064,923 4.0
Reading & Bates Corp.-/- .................................. US 90,000 1,035,000 3.9
Repsol S.A. - ADR{\/} ..................................... SPN 34,900 1,033,913 3.9
Shell Transport & Trading Co., PLC ........................ UK 80,500 940,248 3.5
Anadarko Petroleum Corp. .................................. US 20,000 867,500 3.2
Total Compagnie Francaise des Petroles S.A. - ADR{\/} ..... FR 20,100 620,588 2.3
Norsk Hydro AS ............................................ NOR 15,175 604,485 2.3
------------
8,378,060
------------
Chemicals (12.8%)
Cytec Industries-/- ....................................... US 19,300 1,056,675 3.9
Cabot Corp. ............................................... US 21,000 997,500 3.7
Occidental Petroleum Corp. ................................ US 33,000 709,500 2.6
Potash Corporation of Saskatchewan, Inc.{\/} .............. CAN 10,000 696,250 2.6
------------
3,459,925
------------
Machinery & Engineering (9.5%)
Rauma Oy - ADR-/- {\/} ................................... FIN 45,700 993,975 3.7
Valmet Corp. "A" .......................................... FIN 32,500 903,799 3.4
Harnischfeger Industries, Inc. ........................... US 20,000 630,000 2.4
------------
2,527,774
------------
Metals - Non-Ferrous (8.2%)
Lonrho PLC ................................................ UK 400,000 986,249 3.7
Diamond Fields Resources, Inc.-/- ......................... CAN 42,800 770,962 2.9
PT Tambang Timah - 144A GDR{.} -/- {\/} ................... INDO 37,500 426,375 1.6
------------
2,183,586
------------
Forest Products (7.7%)
James River Corporation of Virginia ....................... US 30,000 963,750 3.6
Asia Pulp & Paper Co., Ltd. - ADR{\/}-/- ................. INDO 59,000 604,750 2.3
St Laurent Paperboard, Inc.-/- ........................... CAN 33,900 490,415 1.8
------------
2,058,915
------------
Metals - Steel (7.1%)
UCAR International, Inc.-/- ............................... US 41,400 1,179,900 4.4
SGL Carbon AG-/- .......................................... GER 10,900 714,894 2.7
------------
1,894,794
------------
Misc. Materials & Components (6.5%)
Broken Hill Proprietary Co., Ltd. ......................... AUSL 56,167 760,470 2.8
Anglovaal Ltd. "N" ........................................ SAFR 17,350 658,981 2.5
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-10
<PAGE>
GLOBAL NATURAL RESOURCES PORTFOLIO
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Country Shares Value Assets {d}
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Misc. Materials & Components (Continued)
De Beers Centenary AG - Linked Unit ....................... SAFR 11,400 $ 314,973 1.2
------------
1,734,424
------------
Gold (4.8%)
Ashanti Goldfields Co., Ltd. - GDR{\/} ................... SAFR 41,000 722,625 2.7
Acacia Resources Ltd.-/- .................................. AUSL 352,000 576,302 2.1
------------
1,298,927
------------
Food (3.2%)
IBP, Inc. ................................................. US 14,100 844,238 3.2
------------ -----
TOTAL EQUITY INVESTMENTS (cost $23,524,522) ................. 24,380,643 91.1
------------ -----
<CAPTION>
Market
Repurchase Agreement Value
- ------------------------------------------------------------- ------------
<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 $2,820,000 U.S. Treasury Bill, due
10/17/96 (market value of collateral is $2,675,240,
including collateralized accrued interest) (cost
$2,620,422) ............................................ 2,620,422 9.8
------------ -----
TOTAL INVESTMENTS (cost $26,144,944) ........................ 27,001,065 100.9
Other Assets and Liabilities ................................ (241,081) (0.9)
------------ -----
NET ASSETS .................................................. $ 26,759,984 100.0
------------ -----
------------ -----
<FN>
- ----------------
{d} Percentages indicated are based on net assets of $26,759,984.
-/- Non-income producing security.
{\/} U.S. currency denominated.
{.} Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers.
* For Federal income tax purposes, cost is $26,144,944 and
appreciation (depreciation) is as follows:
Unrealized appreciation: $ 1,790,765
Unrealized depreciation: (934,644)
-------------
Net unrealized appreciation: $ 856,121
-------------
-------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-11
<PAGE>
GLOBAL NATURAL RESOURCES 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) ................. 4.9 4.9
Canada (CAN/CAD) ..................... 7.3 7.3
Finland (FIN/FIM) .................... 7.1 7.1
France (FR/FRF) ...................... 2.3 2.3
Germany (GER/DEM) .................... 2.7 2.7
Indonesia (INDO/IDR) ................. 3.9 3.9
Norway (NOR/NOK) ..................... 6.3 6.3
South Africa (SAFR/ZAR/ZAL) .......... 6.4 6.4
Spain (SPN/ESP) ...................... 3.9 3.9
United Kingdom (UK/GBP) .............. 11.3 11.3
United States (US/USD) ............... 35.0 8.9 43.9
------ --- -----
Total ............................... 91.1 8.9 100.0
------ --- -----
------ --- -----
<FN>
- ----------------
{d} Percentages indicated are based on net assets of $26,759,984.
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
OCTOBER 31, 1995
<TABLE>
<CAPTION>
Market Value Unrealized
(U.S. Contract Delivery Appreciation
Contracts to Buy: Dollars) Price Date (Depreciation)
------------ ---------- --------- -------------
<S> <C> <C> <C> <C>
Deutsche Marks................................................................ 213,478 1.42407 11/30/95 $ 2,813
Swedish Krona................................................................. 662,756 7.16200 11/22/95 48,403
------------ -------------
Total Contracts to Buy (Payable amount $825,018).......................... 876,234 51,216
------------ -------------
THE VALUE OF CONTRACTS TO BUY AS A PERCENTAGE OF NET ASSETS IS 3.27%
<CAPTION>
Contracts to Sell:
<S> <C> <C> <C> <C>
Deutsche Marks................................................................ 106,739 1.45648 11/30/95 (3,750)
Deutsche Marks................................................................ 284,637 1.46545 11/30/95 (11,683)
French Francs................................................................. 409,069 5.07400 11/20/95 (14,903)
Swedish Krona................................................................. 662,756 7.41800 11/22/95 (69,605)
------------ -------------
Total Contracts to Sell (Receivable amount $1,363,260).................... 1,463,201 (99,941)
------------ -------------
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF NET ASSETS IS 5.47%
Total Open Forward Foreign Currency Contracts, Net........................ $ (48,725)
-------------
-------------
</TABLE>
- ----------------
See Note 1 to the financial statements.
The accompanying notes are an integral part of the financial statements.
F-12
<PAGE>
GLOBAL NATURAL RESOURCES PORTFOLIO
STATEMENT OF ASSETS
AND LIABILITIES
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets:
Investments in securities, at value (cost
$26,144,944) (Note 1 )........................... $27,001,065
Foreign currencies (cost $1,757).................. 1,771
Dividends and dividend withholding tax reclaims
receivable....................................... 43,460
-----------
Total assets.................................... 27,046,296
-----------
Liabilities:
Payable for investment management and
administration fees (Note 2)..................... 213,856
Payable for open forward foreign currency
contracts, net (Note 1).......................... 48,725
Payable for professional fees..................... 7,553
Payable for printing and postage expenses......... 4,713
Payable for Trustees' fees and expenses (Note
2)............................................... 2,801
Payable for custodian fees (Note 1)............... 2,521
Other accrued expenses............................ 6,143
-----------
Total liabilities............................... 286,312
-----------
Net assets.......................................... $26,759,984
-----------
-----------
Net assets consist of:
Paid in capital................................... $27,781,110
Accumulated net investment income................. 692,942
Accumulated net realized loss on investments and
foreign currency transactions.................... (2,521,686)
Net unrealized depreciation on translation of
assets and liabilities in foreign currencies..... (48,503)
Net unrealized appreciation of investments........ 856,121
-----------
Total -- representing net assets applicable to
shares of beneficial interest outstanding.......... $26,759,984
-----------
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-13
<PAGE>
GLOBAL NATURAL RESOURCES PORTFOLIO
STATEMENT OF OPERATIONS
Year ended October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Investment income: (Note 1)
Interest income............................................ $ 437,615
Dividend income (net of foreign withholding tax of
$36,734).................................................. 392,475
-----------
Total investment income.................................. 830,090
-----------
Expenses:
Investment management and administration fees (Note 2)..... 213,856
Custodian fees (Note 1).................................... 40,204
Legal fees................................................. 12,300
Audit fees................................................. 8,750
Trustees' fees and expenses (Note 2)....................... 7,119
Other expenses............................................. 1,900
-----------
Total expenses before reductions......................... 284,129
-----------
Expense reductions (Notes 1 & 4)....................... (9,670)
-----------
Total net expenses....................................... 274,459
-----------
Net investment income........................................ 555,631
-----------
Net realized and unrealized gain (loss) on
investments and foreign currencies: (Note 1)
Net realized loss on investments........... $(2,302,171)
Net realized loss on foreign currency
transactions.............................. (89,256)
-----------
Net realized loss during the year........................ (2,391,427)
Net change in unrealized depreciation on
translation of assets and liabilities in
foreign currencies........................ (43,764)
Net change in unrealized appreciation of
investments............................... 177,530
-----------
Net unrealized appreciation during the year.............. 133,766
-----------
Net realized and unrealized loss on investments and foreign
currencies.................................................. (2,257,661)
-----------
Net decrease in net assets resulting from operations......... $(1,702,030)
-----------
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-14
<PAGE>
GLOBAL NATURAL RESOURCES PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MAY 31, 1994
(COMMENCEMENT OF
YEAR ENDED OPERATIONS) TO
OCTOBER 31, 1995 OCTOBER 31, 1994
----------------- -----------------
Increase (Decrease) in net assets
<S> <C> <C>
Operations:
Net investment income...................... $ 555,631 $ 137,311
Net realized loss on investments and
foreign currency transactions............. (2,391,427) (130,259)
Net change in unrealized depreciation on
translation of assets and
liabilities in foreign currencies......... (43,764) (4,739)
Net change in unrealized appreciation of
investments............................... 177,530 678,591
----------------- -----------------
Net increase (decrease) in net assets
resulting from operations............... (1,702,030) 680,904
Beneficial interest transactions:
Contributions.............................. 34,259,648 33,302,836
Withdrawals................................ (32,747,373) (7,134,101)
----------------- -----------------
Net increase from beneficial interest
transactions............................ 1,512,275 26,168,735
----------------- -----------------
Total increase (decrease) in net assets...... (189,755) 26,849,639
Net assets:
Beginning of period........................ 26,949,739 100,100
----------------- -----------------
End of period.............................. $ 26,759,984 $26,949,739
----------------- -----------------
----------------- -----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-15
<PAGE>
GLOBAL NATURAL RESOURCES 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).... $ 26,760 $ 26,950
Ratio of net investment income to
average net assets..................... 1.88% 3.47 %(a)
Ratio of expenses to average net assets:
With expense reductions (Notes 1 &
4)................................... 0.93% 2.15 %(a)
Without expense reductions............ 0.96% -- % *
Portfolio turnover rate................. 87% 137 %
</TABLE>
- ----------------
(a) Annualized.
* Calculation of "Ratio of expenses to 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-16
<PAGE>
GLOBAL NATURAL RESOURCES PORTFOLIO
NOTES TO
FINANCIAL STATEMENTS
October 31, 1995
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Global Natural Resources 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 fluctuations, if any.
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
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 accrued 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 period 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-17
<PAGE>
GLOBAL NATURAL RESOURCES 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-18
<PAGE>
GLOBAL NATURAL RESOURCES 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
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 an amount
at least equal to 102% of the market value of the loaned securities at the
inception of each loan. This collateral must be maintained at not less than 100%
of the market value of the loaned securities during the period of the loan. For
the year ended October 31, 1995, the Portfolio received $1,364 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 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 natural
resources 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 Natural Resources 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
$20,836,799 and $23,399,771, 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 $8,306 under these arrangements.
F-19
<PAGE>
GLOBAL NATURAL RESOURCES PORTFOLIO
NOTES
- --------------------------------------------------------------------------------
<PAGE>
GT GLOBAL NATURAL RESOURCES 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
