<PAGE>
GT GLOBAL GROWTH & INCOME FUND
PROSPECTUS -- FEBRUARY 29, 1996, AS REVISED OCTOBER 31, 1996
- --------------------------------------------------------------------------------
GT GLOBAL GROWTH & INCOME FUND ("FUND") is a mutual fund, organized as a
non-diversified series of G.T. Investment Funds, Inc., which seeks long-term
capital appreciation together with current income. The Fund invests in a global
portfolio of both equity and debt securities, in such relative proportions as
deemed most appropriate by the Fund's investment manager in view of then-current
economic and market conditions. There can be no assurance that the Fund will
achieve its investment objective.
The Fund's investment manager, Chancellor LGT Asset Management, Inc. (the
"Manager") and its worldwide affiliates are part of Liechtenstein Global Trust,
a provider of global asset management and private banking products and services
to individual and institutional investors.
This Prospectus sets forth concisely information an investor should know before
investing and should be read carefully and retained for future reference. A
Statement of Additional Information, dated February 29, 1996, as revised October
31, 1996, has been filed with the Securities and Exchange Commission ("SEC") and
is incorporated herein by reference. The Statement of Additional Information
which may be amended or supplemented from time to time, is available without
charge by writing to the Fund at 50 California Street, San Francisco, California
94111, or by calling (800) 824-1580.
FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR ENDORSED OR GUARANTEED BY,
ANY BANK, NOR ARE THEY FEDERALLY INSURED OR OTHERWISE PROTECTED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
An investment in the GT Global Growth & Income Fund offers the following
advantages:
/ / Professional Management by a Leading Manager with Offices in the World's
Major Markets
/ / Low $500 Minimum Investment
/ / Alternative Purchase Plan
/ / Automatic Dividend and Other Distribution Reinvestment at No Additional
Sales Charge
/ / Exchange Privileges with the Corresponding Classes of the Other GT Global
Mutual Funds
/ / Reduced Sales Charge Plans
/ / Dollar Cost Averaging Program
/ / Automatic Investment Plan
/ / Systematic Withdrawal Plan
FOR FURTHER INFORMATION, CALL
(800) 824-1580 OR CONTACT YOUR FINANCIAL ADVISOR.
[LOGO]
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus Page 1
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
TABLE OF CONTENTS
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Page
---------
<S> <C>
Prospectus Summary........................................................................ 3
Financial Highlights...................................................................... 6
Alternative Purchase Plan................................................................. 7
Investment Objective and Policies......................................................... 8
How To Invest............................................................................. 12
How To Make Exchanges..................................................................... 19
How To Redeem Shares...................................................................... 20
Shareholder Account Manual................................................................ 22
Calculation of Net Asset Value............................................................ 23
Dividends, Other Distributions and Federal Income Taxation................................ 23
Management................................................................................ 25
Other Information......................................................................... 28
</TABLE>
Prospectus Page 2
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
PROSPECTUS SUMMARY
- ------------------------------------------------------------
The following summary is qualified in its entirety by the more detailed
information appearing in the body of this Prospectus.
<TABLE>
<S> <C> <C>
Investment Objective: The Fund seeks long-term capital appreciation together with current income
Principal Investments: Invests principally in blue-chip equity securities and high
quality government bonds of issuers located in the United States
and throughout the world
Investment Manager: Chancellor LGT Asset Management, Inc. (the "Manager") is part of
Liechtenstein Global Trust, a provider of global asset management
and private banking products and services to individual and
institutional investors, entrusted with approximately $80 billion
in total assets
Alternative Purchase Plan: Investors may select Class A or Class B shares, each subject to
different expenses and a different sales charge structure
Class A Shares: Offered at net asset value plus any applicable sales charge
(maximum is 4.75% of public offering price) and subject to service
and distribution fees at the annualized rate of 0.35% of the
average daily net assets of the Class A shares
Class B Shares: Offered at net asset value (a maximum contingent deferred sales
charge of 5% of the lesser of the shares' net asset value or the
original purchase price is imposed on certain redemptions made
within six years of date of purchase) and subject to service and
distribution fees at the annualized rate of 1.00% of the average
daily net assets of the Class B shares
Shares Available Through: Most brokerage firms nationwide or directly through the Fund's
distributor
Exchange Privileges: Shares of a class of the Fund may be exchanged without a sales
charge for shares of the corresponding class of other GT Global
Mutual Funds, which are open-end management investment companies
advised and/or administered by the Manager
Dividends and Other Dividends paid quarterly from net investment income and realized
Distributions: net short-term capital gains; other distributions paid annually
from net capital gain and net gains from foreign currency
transactions, if any
Reinvestment: Dividends and other distributions may be reinvested automatically
in Fund shares of the distributing class or in shares of the
corresponding class of other GT Global Mutual Funds without a
sales charge
First Purchase: $500 minimum ($100 for individual retirement accounts ("IRAs") and
reduced amounts for certain other retirement plans)
Subsequent Purchases: $100 minimum (reduced amounts for IRAs and certain other
retirement plans)
Net Asset Value: Class A and Class B shares are quoted daily in the financial
section of most newspapers
Other Features:
Class A Shares: Letter of Intent Dollar Cost Averaging Program
Quantity Discounts Automatic Investment Plan
Right of Accumulation Systematic Withdrawal Plan
Reinstatement Privilege Portfolio Rebalancing Program
Class B Shares: Reinstatement Privilege Automatic Investment Plan
Systematic Withdrawal Plan Dollar Cost Averaging Program
Portfolio Rebalancing Program
</TABLE>
Prospectus Page 3
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
PROSPECTUS SUMMARY
(Continued)
- --------------------------------------------------------------------------------
INVESTMENT MANAGER AND ADMINISTRATOR. The Manager and its worldwide asset
management affiliates maintain fully-staffed investment offices in Frankfurt,
Hong Kong, London, New York, San Francisco, Singapore, Sydney, Tokyo and
Toronto. The Manager is part of Liechtenstein Global Trust, a provider of global
asset management and private banking products and services to individual and
institutional investors. As of October 31, 1996, assets entrusted to
Liechtenstein Global Trust total approximately $80 billion. The companies
comprising Liechtenstein Global Trust are indirect subsidiaries of the Prince of
Liechtenstein Foundation. See "Management."
INVESTMENT OBJECTIVE AND POLICIES. The Fund seeks its objective of long-term
capital appreciation together with current income by investing in a global
portfolio of both equity securities and debt obligations allocated among diverse
international markets. The Fund currently expects to choose its investments
principally from issuers in the United States, Canada, Japan, the Western
European nations, New Zealand and Australia. See "Investment Objective and
Policies." Consistent with the Fund's investment objective, the Manager employs
a conservative investment style in managing the Fund's assets, in order to
attempt to limit volatility and risk to capital.
The Fund seeks its investment objective by normally investing at least 65% of
its total assets in a combination of blue-chip equity securities and high
quality government bonds. The remainder of the Fund's assets may be invested in
other equity securities and investment grade government and corporate debt
securities which the Manager believes will assist the Fund in achieving its
objective. The relative proportions of equity and debt securities held by the
Fund at any one time will vary, depending upon the Manager's assessment of
global political and economic conditions and the relative strengths and
weaknesses of the world equity and debt markets. To enable the Fund to respond
to economic and market changes, the Fund is authorized to invest up to 100% of
its assets in either equity or debt securities.
INVESTMENT TECHNIQUES AND RISK FACTORS. The Fund may engage in certain foreign
currency, options and futures transactions to attempt to hedge against the
overall level of investment and currency risk associated with its present or
planned investments. The Fund's participation in the currency, options and
futures markets involves certain risks and transaction costs.
Investments in foreign securities involve risks relating to political and
economic developments abroad and the differences between the regulations to
which U.S. and foreign issuers are subject. Individual foreign economies also
may differ favorably or unfavorably from the U.S. economy. Changes in foreign
currency exchange rates will affect the Fund's net asset value, earnings and
gains and losses realized on sales of securities. Securities of foreign
companies may be less liquid and their prices more volatile than securities of
comparable U.S. companies.
There is no assurance that the Fund will achieve its investment objective. The
Fund's net asset value will fluctuate, reflecting fluctuations in the market
value of its portfolio positions. The value of the debt securities held by the
Fund generally fluctuates inversely with interest rate movements. Certain
investment grade debt securities may possess speculative qualities.
PURCHASES AND REDEMPTIONS. Shares of the Fund's common stock are available
through broker/dealers that have entered into agreements to sell shares with the
Fund's distributor, GT Global, Inc. ("GT Global"). Shares also may be acquired
directly through GT Global or through exchanges for shares of the other GT
Global Mutual Funds. See "How to Invest" and "Shareholder Account Manual."
Shares may be redeemed through the Fund's transfer agent, GT Global Investor
Services, Inc. ("Transfer Agent"). See "How to Redeem Shares" and "Shareholder
Account Manual."
Prospectus Page 4
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
PROSPECTUS SUMMARY
(Continued)
- --------------------------------------------------------------------------------
SUMMARY OF INVESTOR COSTS. The expenses and maximum transactions costs
associated with investing in the Class A and Class B shares of the Fund are
reflected in the following tables+*:
<TABLE>
<CAPTION>
CLASS A CLASS B
----------- -----------
<S> <C> <C>
SHAREHOLDER TRANSACTION COSTS: TRIANGLE
Maximum sales charge on purchases of shares (as a % of offering price)............................. 4.75% None
Sales charges on reinvested distributions to shareholders.......................................... None None
Maximum contingent deferred sales charge........................................................... None 5.0%
Redemption charges................................................................................. None None
Exchange Fees:
-- On first four exchanges each year............................................................. None None
-- On each additional exchange................................................................... $7.50 $7.50
ANNUAL FUND OPERATING EXPENSES:
(AS A % OF AVERAGE NET ASSETS)
Investment management and administration fees...................................................... 0.97% 0.97%
12b-1 distribution and service fees................................................................ 0.35% 1.00%
Other expenses..................................................................................... 0.42% 0.42%
----------- -----------
Total Fund Operating Expenses........................................................................ 1.74% 2.39%
----------- -----------
----------- -----------
</TABLE>
HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES*:
An investor would have directly or indirectly paid the following expenses at the
end of the periods shown on a $1,000 investment in the Fund, assuming a 5%
annual return:
<TABLE>
<CAPTION>
ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS
---- ----- ----- -----
<S> <C> <C> <C> <C>
Class A Shares (1)........................................................................ $64 $100 $139 $256
Class B Shares:
Assuming a complete redemption at end of period (2)................................... $74 $105 $152 $301
Assuming no redemption................................................................ $24 $ 75 $132 $301
</TABLE>
- ------------------
(1) Assumes payment of maximum sales charge by the investor.
(2) Assumes payment of the applicable contingent deferred sales charge.
+ The Fund offers Advisor Class shares to certain categories of investors. See
"Alternative Purchase Plan." Advisor Class shares are not subject to a
distribution or service fee. "Total Fund Operating Expenses" for Advisor
Class shares are estimated to approximate 1.39%.
* THESE TABLES ARE INTENDED TO ASSIST INVESTORS IN UNDERSTANDING THE VARIOUS
COSTS AND EXPENSES ASSOCIATED WITH INVESTING IN THE FUND. Expenses are based
on the Fund's fiscal year ended October 31, 1995. Long-term shareholders may
pay more than the economic equivalent of the maximum front-end sales charges
permitted by the National Association of Securities Dealers, Inc. ("NASD")
rules regarding investment companies. "Other expenses" include custody,
transfer agent, legal, audit and other expenses. See "Management" herein and
the Statement of Additional Information for more information. THE
"HYPOTHETICAL EXAMPLE" SET FORTH ABOVE IS NOT A REPRESENTATION OF PAST OR
FUTURE EXPENSES. THE FUND'S ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE
SHOWN. The above tables and the assumption in the example of a 5% annual
return are required by regulation of the Securities and Exchange Commission
applicable to all mutual funds. The 5% annual return is not a prediction of
and does not represent the Fund's projected or actual performance.
TRIANGLE Sales charge waivers are available for Class A and Class B shares,
and reduced sales charge purchase plans are available for Class A shares.
The maximum 5% contingent deferred sales charge on Class B shares applies to
redemptions during the first year after purchase; the charge generally
declines by 1% annually thereafter, reaching zero after six years. See "How
to Invest."
Prospectus Page 5
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The tables below provide condensed information concerning income and capital
changes for one share of each class of shares of the Fund for the periods shown.
This information is supplemented by the financial statements and accompanying
notes appearing in the Statement of Additional Information. The financial
statements and notes for the fiscal year ended October 31, 1995, and each of the
preceding five reporting periods have been audited by Coopers & Lybrand L.L.P.,
independent accountants, whose report thereon also is included in the Statement
of Additional Information.
<TABLE>
<CAPTION>
CLASS A+
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SEPTEMBER 25, 1990
YEAR ENDED OCTOBER 31, (COMMENCEMENT OF
------------------------------------------------------ OPERATIONS) TO
1995 1994 1993(A) 1992 1991 OCTOBER 31, 1990
-------- -------- -------- ------- ------- ------------------
Per Share Operating Performance:
Net asset value, beginning of
period................................. $ 6.21 $ 6.29 $ 5.28 $ 5.25 $ 4.77 $ 4.76
-------- -------- -------- ------- ------- -------
Income from investment operations:
Net investment income................... 0.24 0.22 0.24* 0.21* 0.27* 0.01*
Net realized and unrealized gain (loss)
on investments......................... 0.13 (0.03) 1.05 0.10 0.47 --
-------- -------- -------- ------- ------- -------
Net increase (decrease) from investment
operations............................. 0.37 0.19 1.29 0.31 0.74 0.01
-------- -------- -------- ------- ------- -------
Distributions:
Net investment income................. (0.22) (0.21) (0.24) (0.14) (0.26) --
Net realized gain on investments...... (0.01) (0.06) -- (0.14) -- --
Sources other than net income......... -- -- (0.04) -- -- --
-------- -------- -------- ------- ------- -------
Total distributions................. (0.23) (0.27) (0.28) (0.28) (0.26) --
-------- -------- -------- ------- ------- -------
Net asset value, end of period.......... $ 6.35 $ 6.21 $ 6.29 $ 5.28 $ 5.25 $ 4.77
-------- -------- -------- ------- ------- -------
-------- -------- -------- ------- ------- -------
Total investment return (e)............. 6.27% 3.14% 25.1% 5.9% 15.68% 0.2%(b)
-------- -------- -------- ------- ------- -------
-------- -------- -------- ------- ------- -------
Ratios and supplemental data:
Net assets, end of period (in 000's).... $284,069 $317,847 $251,428 $27,754 $71,376 $9,486
Ratio of net investment income to
average net
assets................................. 3.85% 3.30% 3.3%* 4.1%* 5.0%* 2.9%*(c)
Ratio of expenses to average net assets:
With expense reductions................. 1.70% 1.67% 1.8%* 1.9%* 1.9%* 0.6%*(c)
Without expense reductions.............. 1.74% --%(f) --%(f) --%(f) --%(f) --%(f)
Portfolio turnover rate+++.............. 83% 117% 24% 53% 46% none
<CAPTION>
CLASS B++
----------------------------------------------
<S> <C><C> <C> <C> <C>
OCTOBER 22,
YEAR ENDED OCTOBER 31, 1992 TO
------------------------------ OCTOBER 31,
1995 1994 1993(A) 1992(A)
-------- -------- -------- -----------
Per Share Operating Performance:
Net asset value, beginning of
period................................. $ 6.21 $ 6.29 $ 5.28 $ 5.29
-------- -------- -------- -----------
Income from investment operations:
Net investment income................... 0.20 0.18 0.20 0.01
Net realized and unrealized gain (loss)
on investments......................... 0.13 (0.03) 1.05 (0.02)
-------- -------- -------- -----------
Net increase (decrease) from investment
operations............................. 0.33 0.15 1.25 (0.01)
-------- -------- -------- -----------
Distributions:
Net investment income................. (0.18) (0.17) (0.20) --
Net realized gain on investments...... (0.01) (0.06) -- --
Sources other than net income......... -- -- (0.04) --
-------- -------- -------- -----------
Total distributions................. (0.19) (0.23) (0.24) --
-------- -------- -------- -----------
Net asset value, end of period.......... $ 6.35 $ 6.21 $ 6.29 $ 5.28
-------- -------- -------- -----------
-------- -------- -------- -----------
Total investment return (e)............. 5.57% 2.48% 24.3% (0.2)%(b)
-------- -------- -------- -----------
-------- -------- -------- -----------
Ratios and supplemental data:
Net assets, end of period (in 000's).... $356,796 $359,242 $150,768 $ 280
Ratio of net investment income to
average net
assets................................. 3.20% 2.65% 2.6% N/A(d)
Ratio of expenses to average net assets:
With expense reductions................. 2.35% 2.32% 2.5%* N/A(d)
Without expense reductions.............. 2.39% --%(f) --%(f) --%(d)(f)
Portfolio turnover rate+++.............. 83% 117% 24% 53%
<FN>
- --------------------
+ All capital shares issued and outstanding as of October 21, 1992 were
reclassified as Class A shares.
++ Commencing October 22, 1992 the Fund began offering Class B shares.
+++ Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
* Includes reimbursement by the Manager of Fund operating expenses of $0.005,
$0.02, $0.03 and $0.01 for the years ended October 31, 1993, 1992, 1991 and
for the period from September 25, 1990 to October 31, 1990, respectively.
Without such reimbursements, the expense ratios would have been 1.93%,
2.20%, 2.46% and 2.40% and the net investment income to average net assets
would have been 3.20%, 3.70%, 4.40% and 1.04% for the years ended October
31, 1993, 1992, 1991 and for the period from September 25, 1990 to October
31, 1990, respectively.
(a) These selected per share data were calculated based upon weighted average
shares outstanding during the year.
(b) Not annualized.
(c) Annualized.
(d) Ratios not meaningful due to short period of operation of Class B shares.
(e) Total investment return does not include sales charges.
(f) Calculation of "Ratio of expenses to average net assets" was made without
considering the effect of expense reductions, if any.
</TABLE>
Prospectus Page 6
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
ALTERNATIVE PURCHASE PLAN
- --------------------------------------------------------------------------------
DIFFERENCES BETWEEN THE CLASSES. The primary distinction between the two classes
of the Fund's shares offered through this Prospectus lies in their sales charge
structures and ongoing expenses, as summarized below. Class A and Class B shares
of the Fund represent interests in the same Fund and have the same rights,
except that each class bears the separate expenses of its Rule 12b-1
distribution plan and has exclusive voting rights with respect to such plan, and
each class has a separate exchange privilege. See "Management" and "How to
Exchange Shares." Each class has distinct advantages and disadvantages for
different investors, and investors should choose the class that better suits
their circumstances and objectives.
CLASS A SHARES. Class A shares are sold at net asset value plus an initial sales
charge of up to 4.75% of the public offering price imposed at the time of
purchase. This initial sales charge is reduced or waived for certain purchases.
Purchases of $500,000 or more must be for Class A shares. Class A shares of the
Fund also bear annual service and distribution fees of up to 0.35% of the
average daily net assets of that class.
CLASS B SHARES. Class B shares are sold at net asset value with no initial sales
charge at the time of purchase. Therefore, the entire amount of an investor's
purchase payment is invested in the Fund. Class B shares bear annual service and
distribution fees of up to 1.00% of the average daily net assets of that class,
and Class B shareholders pay a contingent deferred sales charge of up to 5% of
the lesser of the original purchase price or the net asset value of such shares
at the time of redemption. The higher service and distribution fees paid by the
Class B shares of the Fund should cause that class to have a higher expense
ratio and to pay lower per share dividends than Class A shares of the Fund.
FACTORS TO CONSIDER IN CHOOSING A CLASS OF SHARES. In deciding which class to
purchase, investors should consider the foregoing factors as well as the
following:
INTENDED HOLDING PERIOD. Over time, the cumulative expense of the 1.00% annual
service and distribution fees on the Class B shares will approximate or exceed
the expense of the applicable 4.75% maximum initial sales charge plus the 0.35%
service and distribution fees on the Class A shares. For example, if net asset
value remains constant, the Class B shares' aggregate service and distribution
fees would be equal to the Class A shares' initial maximum sales charge and
service and distribution fees approximately seven years after purchase.
Thereafter, Class B shares would experience higher cumulative expenses.
Investors who expect to maintain their investment in the Fund over the long-term
but do not qualify for a reduced initial sales charge, might elect the Class A
initial sales charge alternative because the indirect expense to the shareholder
of the accumulated service and distribution fees on the Class B shares
eventually will exceed the initial sales charge paid by the shareholder plus the
indirect expense to the shareholder of the accumulated distribution fees of
Class A shares. Class B investors, however, enjoy the benefit of permitting all
their dollars to work from the time the investments are made. Any positive
investment return on this additional invested amount would partially or wholly
offset the higher annual expenses borne by Class B shares. Because the Funds'
future returns cannot be predicted, however, there can be no assurance that such
a positive return will be achieved.
Finally, Class B shareholders pay a contingent deferred sales charge if they
redeem during the first six years after purchase, unless a sales charge waiver
applies. Investors expecting to redeem during this period should consider the
cost of the applicable contingent deferred sales charge in addition to the
annual Class B service and distribution fees, as compared with the cost of the
applicable initial sales charge and the annual service and distribution fees
applicable to the Class A shares.
The "Hypothetical Example of Effect of Expenses" under "Prospectus Summary"
shows for the Fund the cumulative expenses an investor would pay over time on a
hypothetical investment in Class A and Class B shares of the Fund, assuming an
annual return of 5%.
REDUCED SALES CHARGES. Class A share purchases of $50,000 or more and Class A
share purchases made under the Fund's reduced sales charge plans may be made at
a reduced initial sales charge. See "How to Invest" for a complete list of
reduced sales charges applicable to Class A purchases.
WAIVER OF SALES CHARGES. The entire initial sales charge on Class A shares of
the Fund is waived for certain eligible purchasers and these purchasers' entire
purchase price would be immediately invested in the Fund. Investors eligible for
complete initial sales charge waivers should purchase Class A shares. The
contingent deferred sales charge is waived for certain redemptions of Class B
Prospectus Page 7
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
shares. A 1% contingent deferred sales charge is imposed on certain redemptions
of Class A shares on which no initial sales charge was assessed.
Investors should understand that the contingent deferred sales charge on the
Class B shares and the initial sales charge on the Class A shares are both
intended to compensate GT Global and selling broker/dealers for their
distribution services. Broker/dealers may receive different levels of
compensation for selling a particular class of shares of the Fund.
See "How to Invest," "How to Redeem Shares," and "Management" for a more
complete description of the initial and contingent deferred sales charges,
service fees and distribution fees for Class A and Class B shares of the Fund
and "Dividends, Other Distributions and Federal Income Taxation," and
"Calculation of Net Asset Value" for other differences between these two
classes.
ADVISOR CLASS SHARES. Advisor Class shares are offered through a separate
prospectus to (a) trustees or other fiduciaries purchasing shares for employee
benefit plans which are sponsored by organizations which have at least 1,000
employees; (b) any account with assets of at least $10,000 if (i) a financial
planner, trust company, bank trust department or registered investment adviser
has investment discretion over such account, and (ii) the account holder pays
such person as compensation for its advice and other services an annual fee of
at least .50% on the assets in the account ("Advisory Account"); (c) any account
with assets of a least $10,000 if (i) such account is established under a "wrap
fee" program, and (ii) the account holder pays the sponsor of such program an
annual fee of at least .50% on the assets in the account; (d) accounts advised
by one of the companies comprising or affiliated with Liechtenstein Global
Trust; and (e) any of the companies comprising or affiliated with Liechtenstein
Global Trust.
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
AND POLICIES
- --------------------------------------------------------------------------------
The Fund's investment objective is long-term capital appreciation together with
current income. The Fund seeks its objective by investing in a global portfolio
of both equity and debt securities, allocated among diverse international
markets. See "Investment Objective and Policies -- Risk Factors." There is no
assurance that the Fund's investment objective will be achieved.
Consistent with the Fund's investment objective, the Manager employs a
conservative investment style in managing the Fund's assets. In so doing the
Manager attempts to limit volatility and risk to capital.
At least 65% of the Fund's total assets normally will be invested in a
combination of blue-chip equity securities and high quality government bonds.
The Fund considers an equity security to be "blue chip" if: (i) during the
issuer's most recent fiscal year the security offered an above average dividend
yield relative to the latest reported dividend yield on the Morgan Stanley
Capital International World Index; AND (ii) the total equity market
capitalization of the issuer is at least $1 billion. Government bonds are deemed
to be high quality if at the time of the Fund's investment they are rated within
one of the two highest ratings categories of Moody's Investors Service, Inc.
("Moody's") or by Standard and Poor's Ratings Group ("S&P") or, if not rated,
are deemed to be of equivalent quality in the judgment of the Manager.
Up to 35% of the Fund's total assets may be invested in other equity securities
and investment grade government and corporate debt obligations which the Manager
believes will assist the Fund in achieving its objective. "Investment grade"
debt refers to those securities rated within one of the four highest ratings
categories of Moody's or S&P, or, if not rated, deemed to be of equivalent
quality in the judgment of the Manager.
The equity securities in which the Fund may invest include common stocks,
preferred stocks and warrants to acquire such stocks and other equity
securities. Government bonds that the Fund may purchase include debt obligations
issued or guaranteed by the United States or foreign governments (including
foreign states, provinces or municipalities) or their agencies, authorities or
instrumentalities. Such government securities also may include debt obligations
of supranational entities organized or supported by several national
governments, such as the World Bank and the Asian Development Bank. The debt
obligations held by the Fund may include debt obligations convertible into
equity securities or having attached warrants or rights to purchase equity
securities.
The Fund currently contemplates that it will invest principally in securities of
issuers in the United States, Canada, Japan, the Western European nations, New
Zealand and Australia. The Fund may invest substantially in securities
denominated in
Prospectus Page 8
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
one or more currencies. Under normal conditions, the Fund invests in issuers of
not less than three different countries and issuers of any one country, other
than the United States, will represent no more than 40% of the Fund's total
assets. The Fund may purchase securities that are issued by the government or a
corporation or financial institution of one nation but denominated in the
currency of another nation (or a multinational currency unit).
According to the Manager, as of December 31, 1995, approximately 67% of the
total equity market capitalization worldwide was represented by non-U.S. equity
securities, and as of December 31, 1995, more than 65% of the value of all
outstanding government debt obligations throughout the world was represented by
obligations denominated in currencies other than the U.S. dollar. Moreover, from
time to time the equity and debt securities of issuers located outside the
United States have substantially outperformed the equity and debt securities of
U.S. issuers. Accordingly, the Manager believes that the Fund's policy of
investing in equity and debt securities of issuers throughout the world may
enable the achievement of results superior to those produced by mutual funds
with similar objectives to that of the Fund that invest solely in U.S. equity
and debt securities.
SELECTION OF INVESTMENTS AND ASSET ALLOCATION. The Manager allocates the Fund's
assets among securities of countries and in currency denominations where
opportunities for meeting the Fund's investment objective are expected to be the
most attractive. The relative proportions of equity and debt securities held by
the Fund at any one time will vary, depending upon the Manager's assessment of
global political and economic conditions and the relative strengths and
weaknesses of the world equity and debt markets. To enable the Fund to respond
to general economic changes and market conditions around the world, the Fund is
authorized to invest up to 100% of its total assets in either equity securities
or debt securities.
The Manager attempts to identify those countries and industries where economic
and political factors are likely to produce above-average growth rates and to
further identify companies in such countries and industries that are best
positioned and managed to benefit from these factors. In evaluating possible
equity investments, the Manager attempts to identify and acquire only securities
it deems to represent high or improving investment quality. Securities
representing high investment quality generally will include those of well-known,
established and successful issuers that the Manager believes will continue to be
successful in the future. Securities representing improving investment quality
may include those of an issuer which, for instance, has improved its sales or
earnings or of an issuer the balance sheet and financial condition of which is
improving. The Manager seeks to avoid investing in equity securities that appear
overly speculative or risky, even if they have attractive features or investment
potential.
In evaluating debt securities considered for the Fund, the Manager analyzes
their yield, maturity, issue classification and quality characteristics, coupled
with expectations regarding local and world economies, movements in the general
level and term of interest rates, currency values, political developments, and
variations in the supply of funds available for investment in the world bond
market relative to the demands placed upon it. The Manager may increase the
average maturity of the portion of the Fund's portfolio invested in debt
securities when it expects interest rates to decline, and may decrease such
maturity when it expects interest rates to rise. There are no limitations on the
maximum or minimum maturities of the debt securities considered by the Fund or
on the average weighted maturity of the debt portion of the Fund's portfolio.
Should the rating of any debt security be revised while such security is owned
by the Fund, the Manager will evaluate what action, if any, is appropriate with
respect to such security. A description of the Moody's and S&P ratings is
included in the "Appendix" to the Statement of Additional Information.
The Manager generally evaluates currencies on the basis of fundamental economic
criteria (e.g., relative inflation and interest rate levels and trends, growth
rate forecasts, balance of payments status and economic policies) as well as
technical and political data. If the currency in which a security is denominated
appreciates against the U.S. dollar, the dollar value of the security will
increase. Conversely, if the exchange rate of the foreign currency declines, the
dollar value of the security will decrease. However, the Fund may seek to
protect itself against such negative currency movements by engaging in hedging
techniques through the use of options, futures and forward currency contracts.
These instruments are often referred to as "derivatives". See "Options, Futures
and Forward Currency Transactions."
OTHER POLICIES. The Fund may invest up to 10% of its net assets in illiquid
securities and other securities for which no readily available market exists,
and up to 5% of its total assets in a combination of securities purchased on a
when-issued basis or with respect to which it has entered into forward
commitment agreements.
TEMPORARY DEFENSIVE STRATEGIES. The Fund retains the flexibility to respond
promptly to changes in market and economic conditions. Accordingly, in the
interest of preserving shareholders' capital, the Manager may employ a temporary
defensive investment strategy if it determines such a strategy
Prospectus Page 9
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
to be warranted due to market conditions. Under a defensive strategy, the Fund
may hold cash (U.S. dollars, foreign currencies or multinational currency units)
and/or invest any portion or all of its assets in high quality money market
instruments of U.S. or foreign government or corporate issuers, and most or all
of the Fund's investments may be made in the United States and denominated in
U.S. dollars. To the extent the Fund adopts a temporary defensive posture, it
will not be invested so as to directly achieve its investment objective. In
addition, pending investment of proceeds from new sales of Fund shares or in
order to meet ordinary daily cash needs, the Fund may hold cash (U.S. dollars,
foreign currencies or multinational currency units) and may invest in foreign or
domestic high quality money market instruments. Money market instruments in
which the Fund may invest include, but are not limited to, U.S. or foreign
government securities; high grade commercial paper; bank certificates of
deposit; bankers' acceptances; and repurchase agreements relating to any of the
foregoing.
BORROWING AND SECURITIES LENDING. From time to time, it may be advantageous for
the Fund to borrow money rather than sell existing portfolio positions to meet
redemption requests. Accordingly, the Fund may borrow from banks or may borrow
through reverse repurchase agreements and "roll" transactions in connection with
meeting requests for the redemption of Fund shares. The Fund also may borrow up
to 5% of its total assets for temporary or emergency purposes other than to meet
redemptions. However, the Fund will not borrow for leverage purposes nor will
the Fund purchase securities while borrowings in excess of 5% of the Fund's
total assets are outstanding. See "Investment Objective and Policies" in the
Statement of Additional Information.
The Fund is authorized to make loans of its portfolio securities to
broker/dealers or to other institutional investors. The borrower must maintain
with the Fund's custodian collateral consisting of cash, U.S. government
securities or other liquid, high grade debt securities equal to at least 100% of
the value of the borrowed securities, plus any accrued interest. The Fund will
receive any interest paid on the loaned securities and a fee and/or a portion of
the interest earned on the collateral. Income received in connection with
securities lending may be used to offset the Fund's custody fees. The Fund will
limit its loans of portfolio securities to an aggregate of 30% of the value of
its total assets, measured at the time any such loan is made. The risks in
lending portfolio securities, as with other extensions of secured credit,
consist of possible delays in receiving additional collateral or in recovery of
the securities and possible loss of rights in the collateral should the borrower
fail financially.
RISK FACTORS. The Fund's net asset value will fluctuate, reflecting fluctuations
in the market value of its portfolio positions. Equity securities, particularly
common stocks, generally represent the most junior position in an issuer's
capital structure, and entitle holders to an interest in the assets of an
issuer, if any, remaining after all more senior claims have been satisfied. In
addition, the value of debt securities held by the Fund generally will fluctuate
with changes in the perceived creditworthiness of the issuers of such securities
and movements in interest rates. Further, investments in foreign government
securities involve special risks, including the risk that the government issuers
may be unable or unwilling to repay principal and interest when due. Investment
grade debt securities rated Baa by Moody's are described by Moody's as having
speculative characteristics, and therefore may be affected by economic
conditions and changes in the circumstances of their issuers to a greater extent
than higher rated bonds.
The Fund normally will invest in a substantial number of issuers; however, the
Fund has registered under the 1940 Act as a "non-diversified" mutual fund so
that it will be able to invest, with respect to 50% of its assets, more than 5%
of its assets in the securities of a single issuer. Since, as a
"non-diversified" fund, the Fund is permitted to invest a greater proportion of
its assets in the securities of a smaller number of issuers, the value of the
Fund's shares may fluctuate more widely and the Fund may be subject to greater
investment and credit risk with respect to its portfolio than a fund which is
diversified.
FOREIGN INVESTING. Foreign investing entails certain risks. The securities of
non-U.S. issuers generally will not be registered with, nor the issuers thereof
be subject to the reporting requirements of the SEC. Accordingly, there may be
less publicly available information about foreign securities and issuers than is
available about domestic securities and issuers. Foreign companies generally are
not subject to uniform accounting, auditing and financial reporting standards,
practices and requirements comparable to those applicable to domestic companies.
In addition, certain costs attributable to foreign investing, such as custody
charges, are higher than those attributable to domestic investing. Securities of
some foreign companies are less liquid and their prices may be more volatile
than securities of comparable domestic companies. The Fund's net investment
income from foreign issuers may be subject to non-U.S. withholding taxes,
thereby reducing the Fund's net investment income.
With respect to some foreign countries, there is the increased possibility of
expropriation or confiscatory taxation, limitations on the removal of funds or
other assets of the Fund, political or social instability, or diplomatic or
economic developments which could affect the Fund's investments in
Prospectus Page 10
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
those countries. Moreover, individual foreign economies may differ favorably or
unfavorably from the U.S. economy in such respects as growth of gross national
product, rate of inflation, rate of savings and capital reinvestment, resource
self-sufficiency and balance of payments positions. The Manager will rely on its
worldwide financial and investment expertise to attempt to limit these risks.
Since the Fund may invest substantially in securities denominated in foreign
currencies, and since the Fund may hold foreign currencies, the Fund will be
affected favorably or unfavorably by exchange control regulations or changes in
the exchange rates between such currencies and the U.S. dollar. Changes in
currency exchange rates will influence the value of the Fund's shares, and also
may affect the value of dividends and interest earned by the Fund and gains and
losses realized by the Fund.
OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. To attempt to increase
return, the Fund may write call options on securities; this strategy will be
employed only when, in the opinion of the Manager, the size of the premium the
Fund receives for writing the option is adequate to compensate the Fund against
the risk that appreciation in the underlying security may not be fully realized
if the option is exercised. The Fund also is authorized to write put options to
attempt to enhance return, although it does not have the current intention of so
doing.
In seeking to protect against currency exchange rate or interest rate changes
that are adverse to its present or prospective positions, the Fund may employ
certain risk management practices involving the use of forward currency
contracts, futures contracts, options on securities, options on currencies,
options on indices and options on futures contracts to attempt to reduce the
overall level of investment risk normally associated with the Fund. These
instruments are often referred to as "derivatives," which may be defined as
financial instruments whose performance is derived, at least in part, from the
performance of another asset (such as a security, currency, or an index of
securities). The Fund may enter into such instruments up to the full value of
its portfolio assets. There can be no assurance that the Fund's risk management
policies will succeed. These techniques are described below and are detailed
further in the Statement of Additional Information.
To attempt to hedge against adverse movements in exchange rates between
currencies, the Fund may enter into forward currency contracts for the purchase
or sale of a specified currency at a specified future date. Such contracts may
involve the purchase or sale of a foreign currency against the U.S. dollar, or
may involve two foreign currencies. The Fund may enter into forward currency
contracts either with respect to specific transactions or with respect to the
Fund's portfolio positions. For example, when the Fund anticipates making a
purchase or sale of a security, the Fund may enter into a forward currency
contract in order to set the rate (either relative to the U.S. dollar or another
currency) at which a currency exchange transaction related to the purchase or
sale will be made. Further, when the Manager believes that a particular currency
may decline compared to the U.S. dollar or another currency, the Fund may enter
into a forward contract to sell the currency the Manager expects to decline in
an amount approximating the value of some or all of the Fund's portfolio
securities denominated in a foreign currency.
The Fund also may purchase and sell put and call options on currencies to hedge
against movements in exchange rates. Premiums paid for currency options held by
the Fund may not exceed 5% of the Fund's total assets. The Fund may also
purchase and sell currency futures contracts and options on such futures
contracts to hedge the Fund's portfolio against movements in foreign currency
exchange rates.
In addition, the Fund may purchase and sell put and call options on equity and
debt securities to hedge against the risk of fluctuations in the prices of
securities held by the Fund or that the Manager intends to include in the Fund's
portfolio. The Fund also may write call and put options and buy put and call
options on stock indices. Such stock index options serve to hedge against
overall fluctuations in the securities markets or in a specific market sector,
rather than anticipated increases or decreases in the value of a particular
security.
Further, the Fund may sell index futures contracts and may purchase put options
or write call options on such futures contracts to protect against a general
market or a specific market sector decline that could adversely affect the
Fund's portfolio. The Fund also may buy index futures contracts and purchase
call options or write put options on such contracts to hedge against a general
market or market sector advance and thereby attempt to lessen the cost of future
securities acquisitions. Similarly, the Fund may use interest rate futures
contracts and options thereon to hedge the debt portion of its portfolio against
changes in the general level of interest rates.
In addition, the Fund may write and purchase put and call options on securities,
currencies and indices that are traded on recognized securities exchanges and
over-the-counter ("OTC") markets.
These practices may result in the loss of principal under certain conditions. In
addition, certain provisions of the Internal Revenue Code of 1986, as amended
("Code"), limit the extent to which the Fund may enter into forward contracts,
futures contracts, or engage in options transactions. See
Prospectus Page 11
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
"Taxes" in the Statement of Additional Information.
Although the Fund might not employ any of the foregoing strategies, its use of
forward currency contracts, options and futures would involve certain investment
risks and transaction costs to which it might not otherwise be subject. These
risks include: (1) dependence on the Manager's ability to predict movements in
the prices of individual securities, fluctuations in the general securities
markets and movements in interest rates and currency markets; (2) imperfect
correlation, or even no correlation, between movements in the price of forward
contracts, options, futures contracts or options thereon and movements in the
price of the currency or security hedged or used for cover; (3) the fact that
the skills and techniques needed to trade options, futures contracts and options
thereon or to use forward currency contracts are different from those needed to
select the securities in which the Fund invests; (4) the lack of assurance that
a liquid secondary market will exist for any particular option, futures contract
or option thereon at any particular time; (5) the possible inability of the Fund
to purchase or sell a portfolio security at a time when it would otherwise be
favorable for it to do so, or the possible need for the Fund to sell a security
at a disadvantageous time, due to the need for the Fund to maintain "cover" or
to set aside securities in connection with hedging transactions; and (6) the
possible need to defer closing out certain options, futures contracts and
options thereon and forward currency contracts in order to continue to qualify
for the beneficial tax treatment afforded regulated investment companies under
the Code. See "Dividends, Other Distributions and Federal Income Taxation"
herein and "Taxes" in the Statement of Additional Information. If the Manager
incorrectly forecasts securities market movements, currency exchange rates or
interest rates in utilizing a strategy for the Fund, the Fund would be in a
better position if it had not hedged at all. The Fund may also conduct its
foreign currency exchange transactions on a spot (I.E., cash) basis at the spot
rate prevailing in the foreign currency exchange market.
OTHER INFORMATION. The Fund's investment objective may not be changed without
the approval of a majority of the Fund's outstanding voting securities. As
defined in the 1940 Act and as used in this Prospectus, a "majority of the
Fund's outstanding voting securities" means the lesser of (i) 67% of the shares
represented at a meeting at which more than 50% of the outstanding shares are
represented, or (ii) more than 50% of the outstanding shares. In addition, the
Fund has adopted certain investment limitations which also may not be changed
without shareholder approval. A complete description of these limitations is
included in the Statement of Additional Information. Unless specifically noted,
the Fund's investment policies described in this Prospectus and in the Statement
of Additional Information may be changed by a vote of a majority of the
Company's Board of Directors without shareholder approval. The Fund's policies
regarding lending, and the percentage of Fund assets that may be committed to
borrowing, are fundamental policies and may not be changed without shareholder
approval. See "Investment Limitations" in the Statement of Additional
Information.
- --------------------------------------------------------------------------------
HOW TO INVEST
- --------------------------------------------------------------------------------
GENERAL. The Fund is authorized to issue three classes of shares. Class A shares
are sold to investors subject to an initial sales charge, while Class B shares
are sold without an initial sales charge but are subject to higher ongoing
expenses and a contingent deferred sales charge payable upon certain
redemptions. The third class of shares of the Fund, the Advisor Class, is
offered through a separate prospectus only to certain investors. See
"Alternative Purchase Plan."
Orders received before the close of regular trading on the New York Stock
Exchange ("NYSE") (currently 4:00 P.M. Eastern time, unless weather, equipment
failure or other factors contribute to an earlier closing time) on any Business
Day will be executed at the public offering price for the applicable class of
shares determined that day. A "Business Day" is any day Monday through Friday on
which the NYSE is open for business. The minimum initial investment is $500
($100 for IRAs and $25 for custodial accounts under Code Section 403(b)(7) and
other tax-qualified employer-sponsored retirement accounts, if made by such
investors under a systematic investment plan providing for monthly or quarterly
payments of at least that amount), and the minimum for additional purchases is
$100 (with a $25 minimum for IRAs, Code Section 403(b)(7) custodial accounts and
other tax-qualified employer-sponsored retirement accounts, as mentioned above).
All purchase orders will be executed at the public offering price next
determined after the purchase order is
Prospectus Page 12
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
received, which includes any applicable sales charge for Class A shares. See
"Purchasing Class A Shares" and "Purchasing Class B Shares" below. The Fund and
GT Global reserve the right to reject any purchase order and to suspend the
offering of shares for a period of time.
WHEN PLACING PURCHASE ORDERS, INVESTORS SHOULD SPECIFY WHETHER THE ORDER IS FOR
CLASS A OR CLASS B SHARES OF THE FUND. ALL PURCHASE ORDERS THAT FAIL TO SPECIFY
A CLASS WILL AUTOMATICALLY BE INVESTED IN CLASS A SHARES. PURCHASES OF $500,000
OR MORE MUST BE FOR CLASS A SHARES.
PURCHASES THROUGH BROKER/DEALERS. Shares of the Fund may be purchased through
broker/dealers with which GT Global has entered into dealer agreements. Orders
received by such broker/dealers before the close of regular trading on the NYSE
on a Business Day will be effected that day, provided that such order is
transmitted to the Transfer Agent prior to its close of business on such day.
The broker/dealer will be responsible for forwarding the investor's order to the
Transfer Agent so that it will be received prior to such time. After an initial
investment is made and a shareholder account is established through a
broker/dealer, at the investor's option, subsequent purchases may be made
directly through GT Global. See "Shareholder Account Manual."
Broker/dealers that do not have dealer agreements with GT Global also may offer
to place orders for the purchase of shares. Purchases made through such
broker/dealers will be effected at the public offering price next determined
after the order is received by the Transfer Agent. Such a broker/ dealer may
charge the investor a transaction fee as determined by the broker/dealer. That
fee will be in addition to the sales charge payable by the investor with respect
to Class A shares, and may be avoided if shares are purchased through a broker/
dealer that has a dealer agreement with GT Global or directly through GT Global.
PURCHASES THROUGH THE DISTRIBUTOR. Investors may purchase shares and open an
account directly through GT Global, the Fund's distributor, by completing and
signing an Account Application accompanying this Prospectus. Investors should
mail to the Transfer Agent the completed Application together with a check to
cover the purchase in accordance with the instructions provided in the
Shareholder Account Manual. Purchases will be executed at the public offering
price next determined after the Transfer Agent has received the Account
Application and check. Subsequent investments do not need to be accompanied by
such an application.
Investors also may purchase shares of the Fund through GT Global by bank wire.
Bank wire purchases will be effected at the next determined public offering
price after the bank wire is received. A wire investment is considered received
when the Transfer Agent is notified that the bank wire has been credited to the
Fund. The investor is responsible for providing prior telephonic or facsimile
notice to the Transfer Agent that a bank wire is being sent. An investor's bank
may charge a service fee for wiring money to the Fund. The Transfer Agent
currently does not charge a service fee for facilitating wire purchases, but
reserves the right to do so in the future. Investors desiring to open an account
by bank wire should call the Transfer Agent at the appropriate toll-free number
provided in the Shareholder Account Manual to obtain an account number and
detailed instructions.
CERTIFICATES. In the interest of economy and convenience, physical certificates
representing the Fund's shares will not be issued unless an investor submits a
written request to the Transfer Agent, or unless the investor's broker requests
that the Transfer Agent provide certificates. Shares of the Fund are recorded on
a register by the Transfer Agent, and shareholders who do not elect to receive
certificates have the same rights of ownership as if certificates had been
issued to them. Redemptions and exchanges by shareholders who hold certificates
may take longer to effect than similar transactions involving non-certificated
shares because the physical delivery and processing of properly executed
certificates is required. ACCORDINGLY, THE FUND AND GT GLOBAL RECOMMEND THAT
SHAREHOLDERS DO NOT REQUEST ISSUANCE OF CERTIFICATES.
PURCHASING CLASS A SHARES
The Fund's public offering price for Class A shares is equal to the net asset
value per share (see "Calculation of Net Asset Value") including any sales
charge determined in accordance with the following schedule:
<TABLE>
<CAPTION>
SALES CHARGE AS PERCENTAGE OF DEALER
REALLOWANCE AS
AMOUNT OF PURCHASE ------------------------------ PERCENTAGE OF
AT THE PUBLIC OFFERING NET THE OFFERING
OFFERING PRICE PRICE INVESTMENT PRICE
- ----------------------- ------------- --------------- -------------------
<S> <C> <C> <C>
Less than
$50,000.............. 4.75% 4.99% 4.25%
$50,000 but less than
$100,000............. 4.00% 4.17% 3.50%
$100,000 but less than
$250,000............. 3.00% 3.09% 2.75%
$250,000 but
less than
$500,000............. 2.00% 2.04% 1.75%
$500,000 or more....... 0.00% 0.00% *
</TABLE>
- --------------------
* GT Global will pay the following commissions to brokers that initiate and
are responsible for purchases by any single purchaser of Class A shares of
$500,000 or more in the aggregate: 1.00% of the purchase amount up to $3
million, plus 0.50% on the excess over $3 million. For purposes of
determining the appropriate commission to be paid in connection with the
transaction, GT Global will combine purchases made by a broker on behalf of
a single client so that the broker's commission, as outlined above, will be
based on the aggregate amount of such client's share purchases over a
rolling twelve month period from the date of the transaction.
All shares purchased pursuant to a sales charge waiver based on the aggregate
purchase amount equalling at least $500,000 will be subject to a contingent
deferred sales charge, for the first year
Prospectus Page 13
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
after their purchase, as described under "Contingent Deferred Sales Charge --
Class A Shares," equal to 1% of the lower of the original purchase price or the
net asset value of such shares at the time of redemption.
From time to time, GT Global may reallow to broker/ dealers the full amount of
the sales charge or may pay out additional amounts to broker/dealers who sell
Class A shares. In some instances, GT Global may offer these reallowances or
additional payments only to broker/dealers that have sold or may sell
significant amounts of Class A shares. To the extent that GT Global reallows the
full amount of the sales charge to broker/dealers, such broker/dealers may be
deemed to be underwriters under the Securities Act of 1933, as amended.
Commissions also may be paid to broker/dealers and other financial institutions
that initiate purchases made pursuant to sales charge waivers (i) and (vii),
described below under "Sales Charge Waivers -- Class A Shares."
The following purchases may be aggregated for purposes of determining the
"Amount of Purchase":
(a) Individual purchases on behalf of a single purchaser, the purchaser's spouse
and their children under the age of 21 years. This includes shares purchased in
connection with an employee benefit plan(s) exclusively for the benefit of such
individual(s), such as an IRA, individual Code Section 403(b) plan or
single-participant, self-employed individual retirement plan ("Keogh Plan").
This also includes purchases made by a company controlled by such individual(s);
(b) Individual purchases by a trustee or other fiduciary purchasing shares for a
single trust estate or a single fiduciary account, including an employee benefit
plan (such as employer-sponsored pension, profit-sharing and stock bonus plans,
including plans under Code Section 401(k), and medical, life and disability
insurance trusts) other than a plan described in "(a)" above;
and
(c) Individual purchases by a trustee or other fiduciary purchasing shares
concurrently for two or more employee benefit plans of a single employer or of
employers affiliated with each other (again excluding an employee benefit plan
described in "(a)" above).
SALES CHARGE WAIVERS -- CLASS A SHARES. Class A shares are sold at net asset
value without imposition of sales charges when investments are made by the
following classes of investors:
(i) Trustees or other fiduciaries purchasing shares for employee benefit plans
which are sponsored by organizations which have at least 100 but less than 1,000
employees.
(ii) Current or retired Trustees, Directors and officers of the investment
companies for which the Manager serves as investment manager and/or
administrator; employees or retired employees of the companies comprising
Liechtenstein Global Trust or affiliated companies of Liechtenstein Global
Trust; the children, siblings and parents of the persons in the foregoing
categories; and trusts primarily for the benefit of such persons.
(iii) Registered representatives or full-time employees of broker/dealers that
have entered into dealer agreements with GT Global, and the children, siblings
and parents of such persons, and employees of financial institutions that
directly, or through their affiliates, have entered into dealer agreements with
GT Global (or that otherwise have an arrangement with respect to sales of Fund
shares with a broker/dealer that has entered into a dealer agreement with GT
Global) and the children, siblings and parents of such employees.
(iv) Companies exchanging shares with or selling assets to one or more of the GT
Global Mutual Funds pursuant to a merger, acquisition or exchange offer.
(v) Shareholders of any of the GT Global Mutual Funds as of April 30, 1987 who
since that date continually have owned shares of one or more of the GT Global
Mutual Funds.
(vi) Purchases made through the automatic investment of dividends and other
distributions paid by any of the other GT Global Mutual Funds.
(vii) Registered investment advisers, trust companies and bank trust departments
exercising DISCRETIONARY investment authority with respect to the money to be
invested in the GT Global Mutual Funds provided that the aggregate amount
invested pursuant to this sales charge waiver is at least $500,000, and further
provided that such money is not eligible to be invested in the Advisor Class.
(viii) Clients of administrators of tax-qualified employee benefit plans which
have entered into agreements with GT Global.
Prospectus Page 14
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
(ix) Retirement plan participants who borrow from their retirement accounts by
redeeming GT Global Mutual Fund shares and subsequently repay such loans via a
purchase of Fund shares.
(x) Retirement plan participants who receive distributions from a tax-qualified
employer-sponsored retirement plan which is invested in GT Global Mutual Funds,
the proceeds of which are reinvested in Fund shares.
(xi) Accounts not eligible for the Advisor Class as to which a financial
institution or broker/dealer charges an account management fee, provided the
financial institution or broker/dealer has entered into an agreement with GT
Global regarding such accounts.
(xii) Certain former AMA Investment Advisers' shareholders who became
shareholders of the GT Global Health Care Fund in October, 1989, and who have
continuously held shares in the GT Global Mutual Funds since that time.
(xiii) An investor purchasing shares of a fund with redemption proceeds from a
registered management investment company that is not one of the GT Global Mutual
Funds, on which the investor was subject to a front-end sales charge or a
contingent deferred sales charge.
REINSTATEMENT PRIVILEGE. Shareholders who redeem their Class A shares in the
Fund have a one-time privilege of reinstating their investment by investing the
proceeds of the redemption at net asset value without a sales charge in Class A
shares of the Fund and/or one or more of the other GT Global Mutual Funds. The
Transfer Agent must receive from the investor or the investor's broker within
180 days after the date of the redemption both a written request for
reinvestment and a check not exceeding the amount of the redemption proceeds.
The reinstatement purchase will be effected at the net asset value per share
next determined after such receipt. For a discussion of the federal income tax
consequences of a reinstatement, see "Dividends, Other Distributions and Federal
Income Taxation -- Taxes."
REDUCED SALES CHARGE PLANS -- CLASS A SHARES. Class A shares of the Fund may be
purchased at reduced sales charges either through the Right of Accumulation or
under a Letter of Intent. For more details on these plans, investors should
contact their brokers or the Transfer Agent.
RIGHT OF ACCUMULATION. Pursuant to the Right of Accumulation, investors are
permitted to purchase shares of the Fund at the sales charge applicable to the
total of (a) the dollar amount then being purchased plus (b) the dollar amount
of the investor's concurrent purchases of other GT Global Mutual Funds (other
than GT Global Dollar Fund) plus (c) the price of all shares of GT Global Mutual
Funds (other than shares of GT Global Dollar Fund not acquired by exchange)
already held by the investor. To receive the Right of Accumulation, at the time
of purchase investors must give their brokers, the Transfer Agent or GT Global
sufficient information to permit confirmation of qualification. THE FOREGOING
RIGHT OF ACCUMULATION APPLIES ONLY TO CLASS A SHARES OF THE FUND AND OTHER GT
GLOBAL MUTUAL FUNDS (OTHER THAN GT GLOBAL DOLLAR FUND).
LETTER OF INTENT. In executing a Letter of Intent ("LOI") an investor indicates
an aggregate investment amount he or she intends to invest in the Class A shares
of the Fund and the Class A shares of other GT Global Mutual Funds (other than
GT Global Dollar Fund) in the following thirteen months. The LOI is included as
part of the Account Application located at the end of this Prospectus. The sales
charge applicable to that aggregate amount then becomes the applicable sales
charge on all purchases made concurrently with the execution of the LOI and in
the thirteen months following that execution. If an investor executes an LOI
within 90 days of a prior purchase of GT Global Mutual Fund Class A shares
(other than shares of GT Global Dollar Fund), the prior purchase may be included
under the LOI and an appropriate adjustment, if any, with respect to the sales
charges paid by the investor in connection with the prior purchase will be made,
based on the then-current net asset value(s) of the pertinent Fund(s).
If at the end of the thirteen month period covered by the LOI the total amount
of purchases does not equal the amount indicated, the investor will be required
to pay the difference between the sales charges paid at the reduced rate and the
sales charges applicable to the purchases actually made. Shares having a value
equal to 5% of the amount specified in the LOI will be held in escrow during the
thirteen month period (while remaining registered in the investor's name) and
are subject to redemption to assure any necessary payment to GT Global of a
higher applicable sales charge.
For purposes of an LOI, any registered investment adviser, trust company or bank
trust department which exercises investment discretion and which intends within
thirteen months to invest $500,000 or more can be treated as a single purchaser,
Prospectus Page 15
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
provided further that such entity places all purchase and redemption orders.
Such entities should be prepared to establish their qualification for such
treatment. THE FOREGOING LOI APPLIES ONLY TO CLASS A SHARES OF THE FUND AND
OTHER GT GLOBAL MUTUAL FUNDS (OTHER THAN GT GLOBAL DOLLAR FUND).
CONTINGENT DEFERRED SALES CHARGE -- CLASS A SHARES. Purchases of Class A shares
of $500,000 or more may be made without a sales charge. Purchases of Class A
shares of two or more GT Global Mutual Funds (other than the GT Global Dollar
Fund) may be combined for this purpose, and the right of accumulation also
applies to such purchases. If a shareholder within one year after the date of
purchase redeems any Class A shares that were purchased without a sales charge
by reason of a purchase of $500,000 or more as described above under "Purchasing
Class A shares," a contingent deferred sales charge of 1% of the lower of the
original purchase price or the net asset value of such shares at the time of
redemption will be charged. Class A shares that are redeemed will not be subject
to the contingent deferred sales charge to the extent that the value of such
shares represents (1) reinvestment of dividends or other distributions or (2)
Class A shares redeemed more than one year after their purchase. Such shares
purchased in amounts of at least $500,000 without a sales charge may be
exchanged for Class A shares of another GT Global Mutual Fund (other than GT
Global Dollar Fund) without the imposition of a contingent deferred sales
charge, although the contingent deferred sales charge described above will apply
to the redemption of the shares acquired through an exchange. The waivers set
forth under "Contingent Deferred Sales Charge Waivers" below apply to
redemptions of Class A shares upon which a contingent deferred sales charge
would otherwise be imposed. For federal income tax purposes, the amount of the
contingent deferred sales charge will reduce the gain or increase the loss, as
the case may be, on the amount realized on redemption. The amount of any
contingent deferred sales charge will be paid to GT Global.
PURCHASING CLASS B SHARES
The public offering price of the Class B shares of the Fund is the next
determined net asset value per share. See "Calculation of Net Asset Value." No
initial sales charge is imposed. A contingent deferred sales charge, however, is
imposed on certain redemptions of Class B shares. Since the Class B shares are
sold without an initial sales charge, the Fund receives the full amount of the
investor's purchase payment.
Class B shares of the Fund that are redeemed will not be subject to a contingent
deferred sales charge to the extent that the value of such shares represents:
(1) reinvestment of dividends or capital gain distributions or (2) shares
redeemed more than six years after their purchase. Redemptions of most other
Class B shares will be subject to a contingent deferred sales charge. See
"Contingent Deferred Sales Charge Waivers." The amount of any applicable
contingent deferred sales charge will be calculated by multiplying the lesser of
the original purchase price or the net asset value of such shares at the time of
redemption by the applicable percentage shown in the table below. Accordingly,
no charge is imposed on increases in net asset value above the original purchase
price:
<TABLE>
<CAPTION>
CONTINGENT DEFERRED SALES
CHARGE AS A PERCENTAGE OF THE
LESSER OF NET ASSET VALUE AT
REDEMPTION
OR THE ORIGINAL
REDEMPTION DURING PURCHASE PRICE
- -------------------------------------- -----------------------------
<S> <C>
1st Year Since Purchase............... 5%
2nd Year Since Purchase............... 4%
3rd Year Since Purchase............... 3%
4th Year Since Purchase............... 3%
5th Year Since Purchase............... 2%
6th year Since Purchase............... 1%
Thereafter............................ 0%
</TABLE>
In determining whether a contingent deferred sales charge is applicable to a
redemption, the calculation will be made in a manner that results in the lowest
possible rate. It will be assumed that the redemption is made first of amounts
representing shares acquired pursuant to the reinvestment of dividends and
distributions; then of amounts representing the cost of shares purchased seven
years or more prior to the redemption; and finally, of amounts representing the
cost of shares held for the longest period of time within the applicable
six-year period.
For example, assume an investor purchased 100 shares at $10 per share for a cost
of $1,000. Subsequently, the shareholder acquired 15 additional shares through
dividend reinvestment. During the second year after the purchase the investor
decided to redeem $500 of his or her investment. Assuming at the time of the
redemption a net asset value of $11 per share, the value of the investor's
shares would be $1,265 (115 shares at $11 per share). The contingent deferred
sales charge would not be applied to the value of the reinvested dividend
shares. Therefore, the 15 shares currently valued at $165.00 would be sold
without a contingent deferred sales charge. The number of shares needed to fund
the remaining $335.00 of the
Prospectus Page 16
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
redemption would equal 30.455. Using the lower of cost or market price to
determine the contingent deferred sales charge the original purchase price of
$10.00 per share would be used. The contingent deferred sales charge calculation
would therefore be 30.455 shares times $10.00 per share at a contingent deferred
sales charge rate of 4% (the applicable rate in the second year after purchase)
for a total contingent deferred sales charge of $12.18.
For federal income tax purposes, the amount of the contingent deferred sales
charge will reduce the gain or increase the loss, as the case may be, on the
amount realized on the redemption. The amount of any contingent deferred sales
charge will be paid to GT Global.
CONTINGENT DEFERRED
SALES CHARGE WAIVERS
The contingent deferred sales charge will be waived for exchanges, as described
below, and for redemptions in connection with the Fund's systematic withdrawal
plan not in excess of 12% of the value of the account annually. In addition, the
contingent deferred sales charge will be waived in the following circumstances:
(1) total or partial redemptions made within one year following the death or
disability of a shareholder; (2) minimum required distributions made in
connection with a GT Global IRA, Keogh Plan or custodial account under Section
403(b) of the Code or other retirement plan following attainment of age 70 1/2;
(3) total or partial redemptions resulting from a distribution following
retirement in the case of a tax-qualified employer-sponsored retirement plan;
(4) when a redemption results from a tax-free return of an excess contribution
pursuant to Section 408(d)(4) or (5) of the Code or from the death or disability
of the employee; (5) a one-time reinvestment in Class B shares of the Fund
within 180 days of a prior redemption; and (6) redemptions pursuant to the
Fund's right to liquidate a shareholder's account involuntarily; (7) redemptions
pursuant to distributions from a tax-qualified employer-sponsored retirement
plan, which is invested in GT Global Mutual Funds, which are permitted to be
made without penalty pursuant to the Code (other than tax-free rollovers or
transfers of assets) and the proceeds of which are reinvested in Fund shares;
(8) redemptions made in connection with participant-directed exchanges between
options in an employer-sponsored benefit plan; (9) redemptions made for the
purpose of providing cash to fund a loan to a participant in a tax-qualified
retirement plan; (10) redemptions made in connection with a distribution from
any retirement plan or account that is permitted in accordance with the
provisions of Section 72(t)(2) of the Code, and the regulations promulgated
thereunder; (11) redemptions made in connection with a distribution from any
retirement plan or account that involves the return of an excess deferral amount
pursuant to Section 401(k)(8) or Section 402(g)(2) of the Code or the return of
excess aggregate contributions pursuant to Section 401(m)(6) of the Code; (12)
redemptions made in connection with a distribution (from a qualified
profit-sharing or stock bonus plan described in Section 401(k) of the Code) to a
participant or beneficiary under Section 401(k)(2)(B)(IV) of the Code upon
hardship of the covered employee (determined pursuant to Treasury Regulation
Section 1.401(k)-1(d)(2)); and (13) redemptions made by or for the benefit of
certain states, counties or cities, or any instrumentalities, departments or
authorities thereof, where such entities are prohibited or limited by applicable
law from paying a sales charge or commission.
PROGRAMS APPLICABLE TO CLASS A SHARES AND CLASS B SHARES
AUTOMATIC INVESTMENT PLAN. Investors may purchase either Class A or Class B
shares of the Fund through the GT Global Automatic Investment Plan. Under this
Plan, an amount specified by the shareholder of $100 or more ($25 or more for
IRAs, Code Section 403(b)(7) custodial accounts and other tax-qualified
employer-sponsored retirement accounts) on a monthly or quarterly basis will be
sent to the Transfer Agent from the investor's bank for investment in the Fund.
Participants in the Automatic Investment Plan should not elect to receive
dividends or other distributions from the Fund in cash. A sales charge will be
applied to each automatic monthly purchase of Class A Fund shares in an amount
determined in accordance with the Right of Accumulation privilege described
above. To participate in the Automatic Investment Plan, investors should
complete the appropriate portion of the Supplemental Application provided at the
end of this Prospectus. Investors should contact their brokers or GT Global for
more information.
DOLLAR COST AVERAGING PROGRAM. Dollar cost averaging is a systematic,
disciplined investment method through which a shareholder invests the same
dollar amount each month; accordingly, the investor purchases more shares when
the Fund's net asset value is relatively low and fewer shares
Prospectus Page 17
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
when the Fund's net asset value is relatively high. This can result in a lower
average cost-per-share than if the shareholder followed a less systematic
approach. The GT Global Dollar Cost Averaging Program provides a convenient
means for investors to use this method to purchase either Class A or Class B
shares of the GT Global Mutual Funds. Dollar cost averaging does not assure a
profit and does not protect against loss in declining markets. Because such a
program involves continuous investment in securities regardless of fluctuating
price levels of such securities, investors should consider their financial
ability to continue purchases when prices are declining.
A participant in the GT Global Dollar Cost Averaging Program first designates
the size of his or her monthly investment in the Fund ("Monthly Investment")
after participation in the Program begins. The Monthly Investment must be at
least $1,000. The investor then will make an initial investment of at least
$10,000 in the GT Global Dollar Fund. Thereafter, each month an amount equal to
the specified Monthly Investment automatically will be redeemed from the GT
Global Dollar Fund and invested in Fund shares. A sales charge will be applied
to each automatic monthly purchase of Class A Fund shares in an amount
determined in accordance with the Right of Accumulation privilege described
above. For more information about the GT Global Dollar Cost Averaging Program,
investors should consult their brokers or GT Global.
PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program ("Program")
permits eligible shareholders to establish and maintain an allocation across a
range of GT Global Mutual Funds. The Program will automatically rebalance their
holdings of GT Global Mutual Funds to the established allocation on a periodic
basis. Under the Program, a shareholder may predesignate, on a percentage basis,
how the total value of his or her holdings in a minimum of two, and a maximum of
ten, GT Global Mutual Funds ("Personal Portfolio") is to be rebalanced on a
monthly, quarterly, semiannual, or annual basis.
Rebalancing under the Program will be effected through the exchange of shares of
one or more GT Global Mutual Funds in the shareholders' Personal Portfolio for
shares of the same class(es) of one or more other GT Global Mutual Funds in the
shareholder's Personal Portfolio. See "How to Make Exchanges." If shares of the
Funds in a shareholder's Personal Portfolio have appreciated during a
rebalancing period, the Program will result in shares of Fund(s) that have
appreciated most during the period being exchanged for shares of Fund(s) that
have appreciated least. SUCH EXCHANGES ARE NOT TAX-FREE AND MAY RESULT IN A
SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE MAY BE, FOR TAX PURPOSES.
See "Dividends, Other Distributions and Federal Income Taxation."
The Program will automatically rebalance the shareholder's Personal Portfolio on
the 28th day of the last month of the period chosen (or immediately preceding
business day if the 28th is not a business day), subject to any limitations
below. The Program will not execute an exchange if the variance in a
shareholder's Personal Portfolio for a particular Fund would be 2% or less. In
predesignating percentages, shareholders must use whole percentages and totals
must equal 100%. Shareholders participating in the Program may not request
issuance of physical certificates representing a Fund's shares. Exchanges made
under the Program are not subject to the four free exchanges per year
limitation. The Funds and GT Global reserve the right to modify, suspend, or
terminate the Program at any time on 60 days' prior written notice to
shareholders. A request to participate in the Program must be received in good
order at least five business days prior to the next rebalancing date. Once a
shareholder establishes the Program for his or her Personal Portfolio, a
shareholder cannot cancel or change which rebalancing frequency, which Funds or
what allocation percentages are assigned to the Program, unless canceled or
changed in writing and received by the Transfer Agent in good order at least
five business days prior to the rebalancing date. Shareholders participating in
the Program may also participate in the Right of Accumulation, Letter of Intent,
and Dollar Cost Averaging programs. Certain brokers may charge a fee for
establishing accounts relating to the Program.
A shareholder interested in more information regarding the Program should
contact his or her financial adviser. Participation in the Program does not
assure that a shareholder will profit from purchases under the Program nor does
it prevent or lessen losses in a declining market.
Prospectus Page 18
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
HOW TO MAKE EXCHANGES
- --------------------------------------------------------------------------------
Shares of the Fund may be exchanged for shares of any of the other GT Global
Mutual Funds, based on their respective net asset values without imposition of
any sales charges, provided that the registration remains identical. This
exchange privilege is available only in those jurisdictions where the sale of GT
Global Mutual Fund shares to be acquired may be legally made. CLASS A SHARES MAY
BE EXCHANGED FOR CLASS A SHARES OF OTHER GT GLOBAL MUTUAL FUNDS. CLASS B SHARES
MAY BE EXCHANGED ONLY FOR CLASS B SHARES OF OTHER GT GLOBAL MUTUAL FUNDS. The
exchange of Class B shares will not be subject to a contingent deferred sales
charge. For purposes of computing the contingent deferred sales charge, the
length of time of ownership of Class B shares will be measured from the date of
original purchase and will not be affected by the exchange. EXCHANGES ARE NOT
TAX-FREE AND MAY RESULT IN A SHAREHOLDER REALIZING A GAIN OR LOSS, AS THE CASE
MAY BE, FOR TAX PURPOSES. See "Dividends, Other Distributions and Federal Income
Taxation." In addition to the Fund, the GT Global Mutual Funds currently
include:
-- GT GLOBAL AMERICA GROWTH FUND
-- GT GLOBAL AMERICA SMALL CAP
GROWTH FUND
-- GT GLOBAL AMERICA VALUE FUND
-- GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
-- GT GLOBAL DOLLAR FUND
-- GT GLOBAL EMERGING MARKETS FUND
-- GT GLOBAL EUROPE GROWTH FUND
-- GT GLOBAL FINANCIAL SERVICES FUND
-- GT GLOBAL GOVERNMENT INCOME FUND
-- GT GLOBAL HEALTH CARE FUND
-- GT GLOBAL HIGH INCOME FUND
-- GT GLOBAL INFRASTRUCTURE FUND
-- GT GLOBAL INTERNATIONAL GROWTH FUND
-- GT GLOBAL JAPAN GROWTH FUND
-- GT GLOBAL LATIN AMERICA GROWTH FUND*
-- GT GLOBAL NATURAL RESOURCES FUND
-- GT GLOBAL NEW PACIFIC GROWTH FUND
-- GT GLOBAL STRATEGIC INCOME FUND
-- GT GLOBAL TELECOMMUNICATIONS FUND
-- GT GLOBAL WORLDWIDE GROWTH FUND
- --------------
* Formerly G.T. Latin America Growth Fund
Up to four exchanges each year may be made without charge. A $7.50 service
charge will be imposed on each subsequent exchange. If an investor does not
surrender all of his or her shares in an exchange, the remaining balance in the
investor's account after the exchange must be at least $500. Exchange requests
received in good order by the Transfer Agent before the close of regular trading
on the NYSE on any Business Day will be processed at the net asset value
calculated on that day.
A shareholder interested in making an exchange should write or call his or her
broker or the Transfer Agent to request the prospectus of the other GT Global
Mutual Fund(s) being considered. Certain brokers may charge a fee for handling
exchanges.
EXCHANGES BY TELEPHONE. A shareholder may give exchange instructions to the
shareholder's broker/ dealer or the Transfer Agent by telephone at the
appropriate toll-free number provided in the Shareholder Account Manual.
Exchange orders will be accepted by telephone provided that the exchange
involves only uncertificated shares on deposit in the shareholder's account or
for which certificates previously have been deposited.
Shareholders automatically have telephone privileges to authorize exchanges. The
Fund, GT Global and the Transfer Agent will not be liable for any loss or damage
for acting in good faith upon instructions received by telephone and reasonably
believed to be genuine. The Fund employs reasonable procedures to confirm that
instructions communicated by telephone are genuine, including requiring some
form of personal identification prior to acting upon instructions received by
telephone, providing written confirmation of such transactions, and/or tape
recording of telephone instructions.
EXCHANGES BY MAIL. Exchange orders should be sent by mail to the investor's
broker/dealer or to the Transfer Agent at the address set forth in the
Shareholder Account Manual.
OTHER INFORMATION ABOUT EXCHANGES. Purchases, redemptions and exchanges should
be made for investment purposes only. A pattern of frequent exchanges, purchases
and sales is not acceptable and can be limited by the Fund's or GT Global's
refusal to accept further purchase and exchange orders from the investor or
broker/dealer. The terms of the exchange offer described above may be modified
at any time, on 60 days' prior written notice to shareholders.
Prospectus Page 19
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
HOW TO REDEEM SHARES
- --------------------------------------------------------------------------------
As described below, Fund shares may be redeemed at their net asset value
(subject to any applicable contingent deferred sales charge for Class B shares
or, in limited circumstances, Class A shares) and redemption proceeds will be
sent within seven days of the execution of a redemption request. Shareholders
with broker/dealers which sell shares may redeem shares through such
broker/dealers; if the shares are held in the broker/dealer's "street name" the
redemption must be made through the broker/dealer. Other shareholders may redeem
shares through the Transfer Agent. If a redeeming shareholder owns both Class A
and Class B shares of the Fund, the Class A shares will be redeemed first unless
the shareholder specifically requests otherwise.
REDEMPTIONS THROUGH BROKERS/DEALERS. Shareholders with accounts at
broker/dealers which sell shares of the Fund may submit redemption requests to
such broker/dealers. Broker/dealers may honor a redemption request either by
repurchasing shares from a redeeming shareholder at the shares' net asset value
next computed after the broker/dealer receives the request or, as described
below, by forwarding such requests to the Transfer Agent (see "How to Redeem
Shares -- Redemptions Through the Transfer Agent"). Redemption proceeds (less
any applicable contingent deferred sales charge for Class B shares) normally
will be paid by check or, if offered by the broker/ dealer, credited to the
shareholder's brokerage account at the election of the shareholder. Broker/
dealers may impose a service charge for handling redemption transactions placed
through them and may have other requirements concerning redemptions.
Accordingly, shareholders should contact their broker/dealers for more details.
REDEMPTIONS THROUGH THE TRANSFER AGENT. Redemption requests may be transmitted
to the Transfer Agent by telephone or by mail, in accordance with the
instructions provided in the Shareholder Account Manual. All redemptions will be
effected at the net asset value next determined after the Transfer Agent has
received the request and any required supporting documentation (less any
applicable contingent deferred sales charge for Class B shares or, in limited
circumstances, Class A shares). Redemption requests received before the close of
regular trading on the NYSE on any Business Day will be effected at the net
asset value calculated on that day. Redemption requests will not require a
signature guarantee if the redemption proceeds are to be sent either: (i) to the
redeeming shareholder at the shareholder's address of record as maintained by
the Transfer Agent, provided the shareholder's address of record has not been
changed within the preceding thirty days; or (ii) directly to a pre-designated
bank, savings and loan or credit union account ("Pre-Designated Account"). ALL
OTHER REDEMPTION REQUESTS MUST BE ACCOMPANIED BY A SIGNATURE GUARANTEE OF THE
REDEEMING SHAREHOLDER'S SIGNATURE. A signature guarantee can be obtained from
any bank, U.S. trust company, a member firm of a U.S. stock exchange or a
foreign branch of any of the foregoing or other eligible guarantor institutions.
A notary public is not an acceptable guarantor. A shareholder with questions
concerning the Fund's signature guarantee requirement should contact the
Transfer Agent.
Shareholders may qualify to have redemption proceeds sent to a Pre-Designated
Account by completing the appropriate section of the Account Application at the
end of this Prospectus. Shareholders with Pre-Designated Accounts should request
that redemption proceeds be sent either by bank wire or by check. The minimum
redemption amount for a bank wire is $1,000. Shareholders requesting a bank wire
should allow two business days from the time the redemption request is effected
for the proceeds to be deposited in the shareholder's Pre-Designated Account.
See "How to Redeem Shares -- Other Important Redemption Information."
Shareholders may change their Pre-Designated Accounts only by a letter of
instruction to the Transfer Agent containing all account signatures, each of
which must be guaranteed. The Transfer Agent currently does not charge a bank
wire service fee for each wire redemption sent but reserves the right to do so
in the future.
REDEMPTIONS BY TELEPHONE. Redemption requests may be made by telephone by
calling the Transfer Agent at the appropriate toll free number provided in the
Shareholder Account Manual.
Prospectus Page 20
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
Shareholders who hold certificates for shares may not redeem by telephone.
REDEMPTION REQUESTS MAY NOT BE MADE BY TELEPHONE FOR THIRTY DAYS FOLLOWING ANY
CHANGE OF THE SHAREHOLDER'S ADDRESS OF RECORD.
Shareholders automatically have telephone privileges to authorize redemptions.
The Fund, GT Global and the Transfer Agent will not be liable for any loss or
damage for acting in good faith upon instructions received by telephone and
reasonably believed to be genuine. The Fund employs reasonable procedures to
confirm that instructions communicated by telephone are genuine, including
requiring some form of personal identification prior to acting upon instructions
received by telephone, providing written confirmation of such transactions,
and/or tape recording of telephone instructions.
REDEMPTIONS BY MAIL. Redemption requests should be mailed directly to the
Transfer Agent at the appropriate address provided in the Shareholder Account
Manual. As discussed above, requests for payment of redemption proceeds to a
party other than the registered account owner(s) and/or requests that redemption
proceeds be mailed to an address other than the shareholder's address of record
require a signature guarantee. In addition, if the shareholder's address of
record has been changed within the preceding thirty days, a signature guarantee
is required. Redemptions of shares for which certificates have been issued must
be accompanied by properly endorsed share certificates.
SYSTEMATIC WITHDRAWAL PLAN. Shareholders owning shares with a value of $10,000
or more may participate in the GT Global Systematic Withdrawal Plan. A
participating shareholder will receive proceeds from monthly, quarterly or
annual redemptions of Fund shares with respect to either Class A or Class B
shares. No contingent deferred sales charge will be imposed on redemptions made
under the Systematic Withdrawal Plan. The minimum withdrawal amount is $100. The
amount or percentage a participating shareholder specifies to be redeemed may
not, on an annualized basis, exceed 12% of the value of the account, as of the
time the shareholder elects to participate in the Systematic Withdrawal Plan. To
participate in the Systematic Withdrawal Plan, investors should complete the
appropriate portion of the Supplemental Application provided at the end of this
Prospectus. Investors should contact their brokers or the Transfer Agent for
more information. With respect to Class A shares, participation in the
Systematic Withdrawal Plan concurrent with purchases of Class A shares of the
Fund may be disadvantageous to investors because of the sales charges involved
and possible tax implications, and therefore is discouraged. In addition,
shareholders who participate in the Systematic Withdrawal Plan should not elect
to reinvest dividends or other distributions in additional Fund shares.
OTHER IMPORTANT REDEMPTION INFORMATION. A request for redemption will not be
processed until all of the necessary documentation has been received in good
order. A shareholder in doubt as to what documents are required should contact
his or her broker or the Transfer Agent.
Except in extraordinary circumstances and as permitted under the 1940 Act,
payment for shares redeemed by telephone or in writing will be made promptly
after receipt of a redemption request, if in good order, but not later than
seven days after the date the request is executed. Requests for redemption which
are subject to any special conditions or which specify a future or past
effective date cannot be accepted.
If the Transfer Agent is requested to redeem shares for which the Fund has not
yet received good payment, the Fund may delay payment of redemption proceeds
until it has assured itself that good payment has been collected for the
purchase of the shares. In the case of purchases by check it can take up to 10
business days to confirm that the check has cleared and good payment has been
received. Redemption proceeds will not be delayed when shares have been paid for
by wire or when the investor's account holds a sufficient number of shares for
which funds already have been collected.
The Fund may redeem the shares of any shareholder whose account is reduced to
less than $500 in value through redemptions or other action by the shareholder.
Written notice will be given to the shareholder at least 60 days prior to the
date fixed for such redemption, during which time the shareholder may increase
his or her holdings to an aggregate amount of $500 or more (with a minimum
purchase of $100).
Prospectus Page 21
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
SHAREHOLDER ACCOUNT MANUAL
- --------------------------------------------------------------------------------
Shareholders are encouraged to place purchase, exchange and redemption orders
through their brokers. Shareholders also may place such orders directly through
GT Global in accordance with this Manual. See "How to Invest"; "How to Make
Exchanges;" "How to Redeem Shares"; and "Dividends, Other Distributions and
Federal Income Taxation -- Taxes" for more information.
The Fund's Transfer Agent is GT GLOBAL INVESTOR SERVICES, INC.
INVESTMENTS BY MAIL
Send completed Account Application (if initial purchase) or letter stating Fund
name, class of shares, shareholder's registered name and account number (if
subsequent purchase) with a check to:
GT Global
P.O. Box 7345
San Francisco, California 94120-7345
INVESTMENTS BY BANK WIRE
An investor opening a new account should call 1-800-223-2138 to obtain an
account number. WITHIN SEVEN DAYS OF PURCHASE SUCH AN INVESTOR MUST SEND A
COMPLETED ACCOUNT APPLICATION CONTAINING THE INVESTOR'S CERTIFIED TAXPAYER
IDENTIFICATION NUMBER TO GT GLOBAL AT THE ADDRESS PROVIDED ABOVE UNDER
"INVESTMENTS BY MAIL." Wire instructions must state Fund name, class of shares,
shareholder's registered name and account number. Bank wires should be sent
through the Federal Reserve Bank Wire System to:
WELLS FARGO BANK N.A.
ABA 121000248
Attn: GT GLOBAL
Account No. 4023-050701
EXCHANGES BY TELEPHONE
Call GT Global at 1-800-223-2138
EXCHANGES BY MAIL
Send complete instructions, including name of Fund exchanging from, class of
shares, amount of exchange, name of the GT Global Mutual Fund exchanging into,
shareholder's registered name and account number, to:
GT Global
P.O. Box 7893
San Francisco, California 94120-7893
REDEMPTIONS BY TELEPHONE
Call GT Global at 1-800-223-2138
REDEMPTIONS BY MAIL
Send complete instructions, including name of Fund, class of shares, amount of
redemption, shareholder's registered name and account number, to:
GT Global
P.O. Box 7893
San Francisco, California 94120-7893
OVERNIGHT MAIL
Overnight mail services do not deliver to post office boxes. To send purchase,
exchange or redemption orders by overnight mail, comply with the instructions
but send to the following:
GT Global Investor Services
California Plaza
2121 N. California Boulevard
Suite 450
Walnut Creek, California 94596
ADDITIONAL QUESTIONS
Shareholders with additional questions regarding purchase, exchange and
redemption procedures may call GT Global at 1-800-223-2138.
Prospectus Page 22
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
CALCULATION OF NET ASSET VALUE
- --------------------------------------------------------------------------------
The Fund calculates its net asset value as of the close of normal trading on the
NYSE (currently 4:00 p.m. Eastern Time, unless weather, equipment failure or
other factors contribute to an earlier closing time) each Business Day. The
Fund's net asset value per share is computed by determining the value of its
total assets (the securities it holds plus any cash or other assets, including
the interest accrued but not yet received), subtracting all of its liabilities
(including accrued expenses), and dividing the result by the total number of
shares outstanding at such time. Net asset value is determined separately for
each class of the Fund.
Equity securities are valued at the last sale price on the exchange or in the
over-the-counter market in which such securities are primarily 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. Long-term obligations are valued at the
mean of representative quoted bid and asked prices for such securities or, if
such prices are not available, at prices for securities of comparable maturity,
quality and type; however, when the Manager deems it appropriate, prices
obtained from a bond pricing service will be used. Short-term debt investments
are amortized to maturity based on their cost, adjusted for foreign exchange
translation and market fluctuations, provided such valuations represent fair
value. When market quotations for futures and options positions held by the Fund
are readily available, those positions are valued based upon such quotations.
Securities and other assets for which market quotations are not readily
available are valued at fair value determined in good faith by or under the
direction of the Company's Board of Directors. Securities and other assets
quoted in foreign currencies are valued in U.S. dollars based on the prevailing
exchange rates on that day.
The Fund's portfolio securities, from time to time, may be listed primarily on
foreign exchanges or over-the-counter dealer markets which trade on days when
the NYSE is closed (such as a Saturday). As a result, the net asset values of
the Fund may be significantly affected by such trading on days when shareholders
cannot purchase or redeem shares of the Fund.
The different expenses borne by each class of shares will result in different
net asset values and dividends. The per share net asset value of the Class B
shares of the Fund generally will be lower than that of the Class A shares of
that Fund because of the higher expenses borne by the Class B shares. The per
share net asset value of the Advisor Class shares of the Fund generally will be
higher than that of the Class A and Class B shares of the Fund because of the
lower expenses borne by the Advisor Class shares. It is expected, however, that
the net asset value per share of Class A and Class B shares of the Fund will
tend to converge immediately after the payment of dividends, which will differ
by approximately the amount of the service and distribution expense accrual
differential between the classes.
- --------------------------------------------------------------------------------
DIVIDENDS, OTHER DISTRIBUTIONS
AND FEDERAL INCOME TAXATION
- --------------------------------------------------------------------------------
DIVIDENDS AND OTHER DISTRIBUTIONS. The Fund pays quarterly dividends from its
net investment income, if any, which includes dividends, accrued interest and
earned discount (including both original issue and market discounts) less
applicable expenses. The Fund also annually distributes substantially all of its
realized net short-term capital gain (the excess of short-term capital gains
over short-term capital losses), net capital gain (the excess of net long-term
capital gain over net short-term capital loss) and net gains from foreign
currency transactions, if any. The Fund may make an additional dividend or other
distribution if
Prospectus Page 23
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
necessary to avoid a 4% excise tax on certain undistributed income and gain.
Dividends and other distributions paid by the Fund with respect to all classes
of its shares are calculated in the same manner and at the same time. The per
share income dividends on Class B shares will be lower than the per share income
dividends on Class A shares as a result of the higher service and distribution
fees applicable to Class B shares; and the per share income dividends on both
such classes of shares will be lower than the per share income dividends on the
Advisor Class shares as a result of the absence of any service and distribution
fees applicable to Advisor Class shares. SHAREHOLDERS MAY ELECT:
/ / to have all dividends and other distributions automatically reinvested in
additional Fund shares of the distributing class (or in shares of the
corresponding class of other GT Global Mutual Funds); or
/ / to receive dividends in cash and have other distributions automatically
reinvested in additional Fund shares of the distributing class (or in shares
of the corresponding class of other GT Global Mutual Funds); or
/ / to receive other distributions in cash and have dividends automatically
reinvested in additional Fund shares of the distributing class (or in shares
of the corresponding class of other GT Global Mutual Funds); or
/ / to receive dividends and other distributions in cash.
Automatic reinvestments in additional shares are made at net asset value without
imposition of a sales charge. IF NO ELECTION IS MADE BY A SHAREHOLDER, ALL
DIVIDENDS AND OTHER DISTRIBUTIONS WILL BE REINVESTED AUTOMATICALLY IN ADDITIONAL
FUND SHARES OF THE DISTRIBUTING CLASS. Reinvestments in another GT Global Mutual
Fund may only be directed to an account with the identical shareholder
registration and account number. These elections may be changed by a shareholder
at any time; to be effective with respect to a distribution, the shareholder or
the shareholder's broker must contact the Transfer Agent by mail or telephone at
least 15 Business Days prior to the payment date. THE FEDERAL INCOME TAX STATUS
OF DIVIDENDS AND OTHER DISTRIBUTIONS IS THE SAME WHETHER THEY ARE RECEIVED IN
CASH OR REINVESTED IN ADDITIONAL SHARES.
Any dividend or other distribution paid by the Fund has the effect of reducing
the net asset value per share on the ex-dividend date by the amount thereof.
Therefore, a dividend or other distribution paid shortly after a purchase of
shares would represent, in substance, a return of capital to the shareholder (to
the extent it is paid on the shares so purchased), even though subject to income
tax, as discussed below.
TAXES. The Fund intends to continue to qualify for treatment as a regulated
investment company under the Code. In each taxable year that the Fund so
qualifies, the Fund (but not its shareholders) will be relieved of federal
income tax on that part of its investment company taxable income (consisting
generally of net investment income, net gains from certain foreign currency
transactions and net short-term capital gain) and net capital gain that is
distributed to its shareholders.
Dividends from the Fund's investment company taxable income (whether paid in
cash or reinvested in additional shares) are taxable to its shareholders as
ordinary income to the extent of the Fund's earnings and profits. Distributions
of the Fund's net capital gain, when designated as such, are taxable to its
shareholders as long-term capital gains, regardless of how long they have held
their Fund shares, and whether paid in cash or reinvested in additional shares.
The Fund provides federal tax information to its shareholders annually,
including information about dividends and other distributions paid during the
preceding year and, under certain circumstances, the shareholders' respective
shares of any foreign taxes paid by the Fund, in which event each shareholder
would be required to include in his or her gross income his or her pro rata
share of those taxes but might be entitled to claim a credit or deduction for
them.
The Fund must withhold 31% from dividends, capital gain distributions and
redemption proceeds payable to any individuals and certain other noncorporate
shareholders who have not furnished to the Fund a correct taxpayer
identification number or a properly completed claim for exemption on Form W-8 or
W-9. Withholding at that rate also is required from dividends and capital gain
distributions payable to for such shareholders who otherwise are subject to
backup withholding. Fund accounts opened via a bank wire purchase (see "How to
Invest -- Purchases Through the Distributor") are considered to have uncertified
taxpayer identification numbers unless a completed Form W-8 or W-9 or Account
Application is received by the Transfer Agent within seven days after the
purchase. A shareholder should contact the Transfer Agent if the shareholder is
uncertain whether a
Prospectus Page 24
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
proper taxpayer identification number is on file with the Fund.
A redemption of Fund shares may result in taxable gain or loss to the redeeming
shareholder, depending upon whether the redemption proceeds are more or less
than the shareholder's adjusted basis for the redeemed shares (which normally
includes any initial sales charge paid on Class A shares). An exchange of Fund
shares for shares of another GT Global Mutual Fund generally will have similar
tax consequences. However, special tax rules apply when a shareholder (1)
disposes of Class A shares of the Fund through a redemption or exchange within
90 days after purchase and (2) subsequently acquires Class A shares of the Fund
or any other GT Global Mutual Fund on which an initial sales charge normally is
imposed without paying that sales charge due to the reinstatement privilege or
exchange privilege. In these cases, any gain on the disposition of the original
Class A shares will be increased, or loss decreased, by the amount of the sales
charge paid when those shares were acquired, and that amount will increase the
adjusted basis of the shares subsequently acquired. In addition, if Fund shares
are purchased within 30 days before or after redeeming other Fund shares
(regardless of class) at a loss, all or a part of the loss will not be
deductible and instead will increase the basis of the newly purchased shares.
The foregoing is only a summary of some of the important federal tax
considerations generally affecting the Fund and its shareholders. See "Taxes" in
the Statement of Additional Information for a further discussion. There may be
other federal, state, local or foreign tax considerations applicable to a
particular investor. Prospective investors therefore are urged to consult their
tax advisers.
- --------------------------------------------------------------------------------
MANAGEMENT
- --------------------------------------------------------------------------------
The Company's Board of Directors has overall responsibility for the operation of
the Fund. Pursuant to such responsibility, the Board has approved contracts with
various financial organizations to provide, among other things, day to day
management services required by the Fund.
INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by Chancellor LGT
Asset Management, Inc. ("the Manager") as the Fund's investment manager and
administrator include, but are not limited to, determining the composition of
the Fund's portfolio and placing orders to buy, sell or hold particular
securities; furnishing corporate officers and clerical staff; providing office
space, services and equipment; and supervising all matters relating to the
Fund's operation. For these services, the Fund pays the Manager investment
management and administration fees, computed daily and paid monthly, based on
the average daily net assets, at the annualized rate of .975% on the first $500
million, .95% on the next $500 million, .925% on the next $500 million and .90%
on amounts thereafter. This rate is higher than that paid by most mutual funds.
The Manager and GT Global have undertaken to limit the Fund's expenses
(exclusive of brokerage commissions, taxes, interest and extraordinary expenses)
to the annual rate of 1.85% and 2.50% of the average daily net assets of the
Fund's Class A and Class B shares, respectively.
The Manager also serves as the Fund's pricing and accounting agent. The monthly
fee for these services to the Manager 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 GT Global Mutual Funds
and 0.02% to the assets in excess of $5 billion and allocating the result
according to each Fund's average daily net assets.
The Manager provides investment management and/or administration services to the
GT Global Mutual Funds. The Manager and its worldwide asset management
affiliates have provided investment management and/or administration services to
institutional, corporate and individual clients around the world since 1969. The
U.S. offices of the Manager are located at 50 California Street, 27th Floor, San
Francisco, CA 94111 and 1166 Avenue of the Americas, New York, NY 10036.
The Manager and its worldwide affiliates, including LGT Bank in Liechtenstein,
formerly Bank in Liechtenstein, comprise Liechtenstein Global Trust, formerly
BIL GT Group Limited. Liechtenstein Global Trust is a provider of global asset
management and private banking products and
Prospectus Page 25
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
services to individual and institutional investors. Liechtenstein Global Trust
is controlled by the Prince of Liechtenstein Foundation, which serves as a
parent organization for the various business enterprises of the Princely Family
of Liechtenstein. The principal business address of the Prince of Liechtenstein
Foundation is Herrengasse 12, FL-9490, Vaduz, Liechtenstein.
As of October 31, 1996, the Manager and its worldwide asset management
affiliates manage approximately $59 billion. In the United States, as of October
31, 1996, the Manager manages or administers approximately $10 billion of GT
Global Mutual Funds. As of October 31, 1996, assets entrusted to Liechtenstein
Global Trust total approximately $80 billion.
On October 31, 1996, Chancellor Capital Management, Inc. ("Chancellor Capital")
merged with LGT Asset Management, Inc. As of September 30, 1996, Chancellor
Capital and its affiliates, based in New York, were the 15th largest independent
investment manager in the United States with approximately $33 billion in assets
under management. Chancellor Capital specialized in public and private U.S.
equity and bond portfolio management for over 300 U.S. institutional clients.
In addition to the investment resources of its San Francisco and New York
offices, the Manager draws upon the expertise, personnel, data and systems of
other offices of Liechtenstein Global Trust, including investment offices in
Frankfurt, Hong Kong, London, Singapore, Sydney, Tokyo, and Toronto. In managing
the GT Global Mutual Funds, the Manager employs a team approach, taking
advantage of its investment resources around the world in seeking to achieve
each Fund's investment objective. Many of the GT Global Mutual Funds' portfolio
managers are natives of the countries in which they invest, speak local
languages and/or live or work in the markets they follow.
The investment professionals primarily responsible for the portfolio management
of the Fund are as follows:
GROWTH & INCOME FUND
<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE FUND LAST FIVE YEARS
- ----------------------------------- ---------------------------------------- ----------------------------------------
<S> <C> <C>
Nicholas S. Train Portfolio Manager since Fund inception Portfolio Manager for the Manager since
London in 1991 1991; prior thereto, Portfolio Manager
for LGT Asset Management PLC (London)
Paul Griffiths Portfolio Manager since 1995 Portfolio Manager for LGT Asset
London Management PLC (London) and the Manager
since 1994; from 1993 to 1994, Global
Bond Fund Manager, Lazard Investors;
from 1991 to 1993, Global Bond Fund
Manager; Sanwa International PLC; from
1989 to 1991, Account Officer, Royal
Bank of Canada
</TABLE>
In placing securities orders for the Fund's portfolio transactions, the Manager
seeks to obtain the best net results. The Manager has no agreement or commitment
to place orders with any broker-dealer. Commissions or discounts in foreign
securities exchanges or OTC markets often are fixed and generally are higher
than those in U.S. securities exchanges or markets. Debt securities generally
are traded on a "net" basis with a dealer acting as principal for its own
account without a stated commission, although the price of the security usually
includes a profit to the dealer. U.S. and foreign government securities and
money market instruments generally are traded in the OTC markets. In
underwritten offerings, securities usually are purchased at a fixed price which
includes an amount of compensation to the underwriter. On occasion, securities
may be purchased directly from an issuer, in which case no commissions or
discounts are paid. Broker/dealers may receive commissions on futures, forward
currency and options transactions. Consistent with its obligation to obtain the
best net results, the Manager may consider a broker/dealer's sale of shares of
the GT Global Mutual Funds as a factor in considering through whom portfolio
transactions will be effected. Brokerage transactions may be executed through
any Liechtenstein Global Trust affiliate.
DISTRIBUTION OF FUND SHARES. GT Global is the distributor, or principal
underwriter, of the Fund's Class A and Class B shares. GT Global is a subsidiary
of Liechtenstein Global Trust with offices at 50 California Street, 27th Floor,
San Francisco, California 94111. As distributor, GT Global collects the sales
charges imposed on purchases of Class A
Prospectus Page 26
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
shares and any contingent deferred sales charges that may be imposed on certain
redemptions on Class A or Class B shares. GT Global reallows a portion of the
sales charge on Class A shares to broker/dealers that have sold such shares in
accordance with the schedule set forth above under "How to Invest." In addition,
GT Global pays a commission equal to 4.00% of the amount invested to
broker/dealers who sell Class B shares. A commission with respect to Class B
shares is not paid on exchanges or certain reinvestments in Class B shares.
GT Global, at its own expense, may provide additional promotional incentives to
brokers that sell shares of the Fund and/or shares of the other GT Global Mutual
Funds. In some instances additional compensation or promotional incentives may
be offered to brokers that have sold or may sell significant amounts of shares
during specified periods of time. Such compensation and incentives may include,
but are not limited to, cash, merchandise, trips and financial assistance to
brokers in connection with preapproved conferences or seminars, sales or
training programs for invited sales personnel, payment for travel expenses
(including meals and lodging) incurred by sales personnel and members of their
families or other invited guests to various locations for such seminars or
training programs, seminars for the public, advertising and sales campaigns
regarding one or more of the GT Global Mutual Funds, and/or other events
sponsored by the broker. In addition, GT Global makes ongoing payments to
brokerage firms, financial institutions (including banks) and others that
facilitate the administration and servicing of shareholder accounts.
Under a plan of distribution adopted by the Company's Board of Directors
pursuant to Rule 12b-1 under the 1940 Act, with respect to the Fund's Class A
shares ("Class A Plan"), the Fund may pay GT Global a service fee at the
annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class A shares for its expenditures incurred in servicing and maintaining
shareholder accounts, and may pay GT Global a distribution fee at the annualized
rate of up to 0.35% 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
its expenditures incurred in providing services as distributor. All expenses for
which GT Global is reimbursed under the Class A Plan will have been incurred
within one year of such reimbursement.
Pursuant to a separate plan of distribution adopted with respect to the Fund's
Class B shares ("Class B Plan"), the Fund may pay GT Global a service fee at the
annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class B shares for its expenditures incurred in servicing and maintaining
shareholder accounts, and may pay GT Global a distribution fee at the annualized
rate of up to 0.75% of the average daily net assets of the Fund's Class B shares
for its 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.
GT Global's service and distribution expenses covered by the Plans include the
payment of ongoing commissions; the cost of any additional compensation paid by
GT Global to brokers/dealers; the costs of printing and mailing to prospective
investors prospectuses and other materials relating to the Fund; the costs of
developing, printing, distributing and publishing advertisements and other sales
literature; and allocated costs relating to GT Global's distribution activities,
including, among other things, employee salaries, bonuses and other overhead
expenses. In addition, its expenses under the Class B Plan include payment of
initial sales commissions to broker/ dealers and interest on any unreimbursed
amounts carried forward thereunder.
The Glass-Steagall Act and other applicable laws, among other things, generally
prohibit federally chartered or supervised banks from engaging in the business
of underwriting or distributing securities. Accordingly, GT Global intends to
engage banks (if at all) only to perform administrative and shareholder
servicing functions. Banks and broker/ dealer affiliates of banks may also
execute dealer agreements with GT Global for the purpose of selling shares of
the Fund. If a bank were prohibited from so acting, its shareholder clients
would be permitted to remain shareholders, and alternative means for continuing
the servicing of such shareholders would be sought. It is not expected that
shareholders would suffer any adverse financial consequences as a result of any
of these occurrences.
Prospectus Page 27
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
OTHER INFORMATION
- --------------------------------------------------------------------------------
CONFIRMATIONS AND REPORTS TO SHAREHOLDERS. Each time a transaction is made that
affects a shareholder's account in the Fund, such as an additional investment, a
redemption or the payment of a dividend or other distribution, the shareholder
will receive from the Transfer Agent a confirmation statement reflecting the
transaction. Confirmations for transactions effected pursuant to the Fund's
Automatic Investment Plan, Systematic Withdrawal Plan, and automatic dividend
reinvestment program may be provided quarterly. Shortly after the end of the
Fund's fiscal year on October 31 and fiscal half-year on April 30 of each year,
shareholders receive an annual and semiannual report, respectively. These
reports list the securities held by the Fund and include the Fund's financial
statements. Under certain circumstances, duplicate mailings of such reports to
the same household may be consolidated. In addition, the federal income tax
status of distributions made by the Fund to shareholders are reported after the
end of each calendar year on Form 1099-DIV.
ORGANIZATION OF THE COMPANY. The Company was organized as a Maryland corporation
on October 29, 1987. From time to time, the Company has and may continue to
establish other funds, each corresponding to a distinct investment portfolio and
a distinct series of the Company's common stock. Shares of the Fund are entitled
to one vote per share (with proportional voting for fractional shares) and are
freely transferable. Shareholders have no preemptive or conversion rights.
On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of its investment
management arrangements. In addition, each class of shares of the Fund has
exclusive voting rights with respect to its distribution plan. The shares of all
the Company's funds will be voted in the aggregate on other matters, such as the
election of Directors and ratification of the Board of Directors' selection of
the Company's independent accountants.
Normally there will be no annual meeting of shareholders in any year, except as
required under the 1940 Act. The Company would be required to hold a
shareholders' meeting in the event that at any time less than a majority of the
Directors holding office had been elected by shareholders. Directors shall
continue to hold office until their successors are elected and have qualified.
Shares of the Company's funds do not have cumulative voting rights, which means
that the holders of a majority of the shares voting for the election of
Directors can elect all the Directors. A Director may be removed upon a majority
vote of the shareholders qualified to vote in the election. Shareholders holding
10% of the Company's outstanding voting securities may call a meeting of
shareholders for the purpose of voting upon the question of removal of any
Director or for any other purpose. The 1940 Act requires the Company to assist
shareholders in calling such a meeting.
Pursuant to the Company's Articles of Incorporation, it may issue six billion
shares. Of this number, 300 million shares have been classified as shares of the
Fund; 100 million shares have been classified as Class A shares, 100 million
shares have been classified as Class B shares, and 100 million shares have been
classified as Advisor Class shares. This amount may be increased from time to
time in the discretion of the Board of Directors. Each share of the Fund
represents an interest in the Fund only, has a par value of $0.0001 per share,
represents an equal proportionate interest in the Fund with other shares of the
Fund and is entitled to such dividends and other distributions out of the income
earned and gain realized on the assets belonging to the Fund as may be declared
at the discretion of the Board of Directors. Each Class A, Class B and Advisor
Class share of the Fund is equal as to earnings, assets and voting privileges,
except as noted above, and each class bears the expenses, if any, related to the
distribution of its shares. Shares of the Fund when issued are fully paid and
nonassessable.
SHAREHOLDER INQUIRIES. Shareholder inquiries may be made by calling the Fund
toll free at (800) 223-2138 or by writing to the Fund at 50 California Street,
27th Floor, San Francisco, California 94111.
PERFORMANCE INFORMATION. The Fund, from time to time, may include information on
its investment
Prospectus Page 28
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
results and/or comparisons of its investment results to various unmanaged
indices or results of other mutual funds or groups of mutual funds in
advertisements, sales literature or reports furnished to present or prospective
shareholders.
In such materials, the Fund may quote its average annual total return
("Standardized Return"). Standardized Return is calculated separately for each
class of shares of the Fund. Standardized Return shows percentage rates
reflecting the average annual change in the value of an assumed investment in
the Fund at the end of a one-year period and at the end of five- and ten-year
periods, reduced by the maximum applicable sales charge imposed on sales of Fund
shares. If a one-, five- and/or ten-year period has not yet elapsed, data will
be provided as of the end of a shorter period corresponding to the life of the
Fund. Standardized Return assumes the reinvestment of all dividends and other
distributions at net asset value on the reinvestment date as established by the
Board of Directors.
In addition, in order to more completely represent the Fund's performance or
more accurately compare such performance to other measures of investment return,
the Fund also may include in advertisements, sales literature and shareholder
reports other total return performance data ("Non-Standardized Return").
Non-Standardized return reflects percentage rates of return encompassing all
elements of total return (e.g., income and capital appreciation or
depreciation); it assumes reinvestment of all dividends and other distributions.
Non-Standardized Return may be quoted for the same or different periods as those
for which Standardized Return is quoted; it may consist of an aggregate or
average annual percentage rate of return, actual year-by-year rates or any
combination thereof. Non-Standardized Return may or may not take sales charges
into account; performance data calculated without taking the effect of sales
charges into account will be higher than data including the effect of such
charges.
The Fund's performance data reflects past performance and is not necessarily
indicative of future results. The Fund's investment results will vary from time
to time depending upon market conditions, the composition of its portfolio and
its operating expenses. These factors and possible differences in calculation
methods should be considered when comparing the Fund's investment results with
those published for other investment companies, other investment vehicles and
unmanaged indices. The Fund's results also should be considered relative to the
risks associated with its investment objective and policies. See "Investment
Results" in the Statement of Additional Information.
The Fund's annual report contains additional information with respect to its
performance. The annual report is available to investors upon request and free
of charge.
TRANSFER AGENT. Shareholder servicing, reporting and general transfer agent
functions for the Fund are performed by GT Global Investor Services, Inc. The
Transfer Agent is an affiliate of the Manager and GT Global and a subsidiary of
Liechtenstein Global Trust, and maintains its offices at California Plaza, 2121
North California Boulevard, Suite 450, Walnut Creek, California 94596.
CUSTODIAN. State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02110 is custodian of the Fund's assets.
COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts Avenue,
N.W., Washington, D.C. 20036-1800, acts as counsel to the Company and the Fund.
Kirkpatrick & Lockhart LLP also acts as counsel to the Manager, GT Global and GT
Global Investor Services, Inc. in connection with other matters.
INDEPENDENT ACCOUNTANTS. The Company's and the Fund's independent accountants
are Coopers & Lybrand L.L.P., One Post Office Square, Boston, Massachusetts
02109. Coopers & Lybrand L.L.P. conducts an annual audit of the Fund, assists in
the preparation of the Fund's federal and state income tax returns and consults
with the Company and the Fund as to matters of accounting, regulatory filings,
and federal and state income taxation.
MULTIPLE TRANSLATIONS OF THE PROSPECTUS. This Prospectus may be translated into
other languages. In the event of any inconsistency or ambiguity as to the
meaning of any word or phrase contained in a translation, the English text shall
prevail.
Prospectus Page 29
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
NOTES
- --------------------------------------------------------------------------------
Prospectus Page 30
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
NOTES
- --------------------------------------------------------------------------------
Prospectus Page 31
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
NOTES
- --------------------------------------------------------------------------------
Prospectus Page 32
<PAGE>
<TABLE>
<S> <C>
[LOGO]
GT GLOBAL MUTUAL FUNDS
P.O. Box 7345 ACCOUNT APPLICATION
SAN FRANCISCO, CA 94120-7345
800/223-2138
</TABLE>
<TABLE>
<S> <C> <C>
/ / INDIVIDUAL / / JOINT TENANT / / GIFT/TRANSFER FOR MINOR / / TRUST / / CORP.
ACCOUNT REGISTRATION / / NEW ACCOUNT / / ACCOUNT REVISION (Account No.: --------------------------------------)
</TABLE>
NOTE: Trust registrations should specify name of trustee(s), beneficiary(ies)
and date of trust instrument. Registration for Uniform Gifts/Transfers to
Minors accounts should be in the name of one custodian and one minor and
include the state under which the custodianship is created.
<TABLE>
<S> <C> <C> <C>
------------------------------------ --------------------------------------------------------------------------------
Owner Social Security Number / / or Tax I.D. Number / / (Check applicable box)
------------------------------------ If more than one owner, social security number or taxpayer identification number
Co-owner 1 should be provided for first owner listed. If a purchase is made under Uniform Gift/
------------------------------------ Transfer to Minors Act, social security number of the minor must be provided.
Co-owner 2 Resident of / / U.S. / / Other (specify)-----------------------------------------
( )
---------------------------------------------------------------------- ---------------------------
Street Address Home Telephone
( )
---------------------------------------------------------------------- ---------------------------
City, State, Zip Code Business Telephone
</TABLE>
FUND SELECTION $500 minimum initial investment required for each Fund
selected. Checks should be made payable to "GT GLOBAL."
TO PURCHASE THE FUNDS LISTED BELOW PLEASE SELECT EITHER / / Class A Shares or
/ /Class B Shares (Not available for purchases of $500,000 or more or, except
for investors participating in the Portfolio Rebalancing Program, for the
GT Global Dollar Fund).
If a class share box is not checked, your investment will be made in Class A
shares.
<TABLE>
<S> <C> <C> <C> <C>
INITIAL INITIAL
INVESTMENT INVESTMENT
07 / / GT GLOBAL WORLDWIDE GROWTH FUND $ 13 / / GT GLOBAL LATIN AMERICA GROWTH FUND $
---------- ----------
05 / / GT GLOBAL INTERNATIONAL GROWTH FUND $ 24 / / GT GLOBAL AMERICA SMALL CAP GROWTH $
---------- FUND ----------
16 / / GT GLOBAL EMERGING MARKETS FUND $ 06 / / GT GLOBAL AMERICA GROWTH FUND $
---------- ----------
11 / / GT GLOBAL HEALTH CARE FUND $ 23 / / GT GLOBAL AMERICA VALUE FUND $
---------- ----------
15 / / GT GLOBAL TELECOMMUNICATIONS FUND $ 04 / / GT GLOBAL JAPAN GROWTH FUND $
---------- ----------
19 / / GT GLOBAL INFRASTRUCTURE FUND $ 10 / / GT GLOBAL GROWTH & INCOME FUND $
---------- ----------
17 / / GT GLOBAL FINANCIAL SERVICES FUND $ 09 / / GT GLOBAL GOVERNMENT INCOME FUND $
---------- ----------
21 / / GT GLOBAL NATURAL RESOURCES FUND $ 08 / / GT GLOBAL STRATEGIC INCOME FUND $
---------- ----------
22 / / GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND $ 18 / / GT GLOBAL HIGH INCOME FUND $
---------- ----------
02 / / GT GLOBAL NEW PACIFIC GROWTH FUND $ 01 / / GT GLOBAL DOLLAR FUND $
---------- ----------
03 / / GT GLOBAL EUROPE GROWTH FUND $
----------
CHECKWRITING PRIVILEGE
Checkwriting privilege available on Class A shares of GT Global Dollar Fund and GT Global Government Income Fund.
/ / Check here if desired. You will be sent a book of checks.
CAPITAL GAINS AND DIVIDEND DISTRIBUTIONS TOTAL INITIAL INVESTMENT: $
----------
All capital gains and dividend distributions will be reinvested in additional shares of the same class unless appropriate
boxes below are checked:
/ / Pay capital gain distributions only in cash / / Pay dividends only in cash / / Pay capital gain distributions AND
dividends in cash.
SPECIAL CAPITAL GAINS AND DIVIDEND DISTRIBUTIONS OPTION
Pay distributions noted above to another GT Global Mutual Fund: Fund Name ------------------------------------------
</TABLE>
AGREEMENTS & SIGNATURES
By the execution of this Account Application, I/we represent and warrant that
I/we have full right, power and authority and am/are of legal age in my/our
state of residence to make the investment applied for pursuant to this
Application. The person(s), if any, signing on behalf of the investor
represent and warrant that they are duly authorized to sign this Application
and to purchase, redeem or exchange shares of the Fund(s) on behalf of the
investor. I/WE HEREBY AFFIRM THAT I/WE HAVE RECEIVED A CURRENT PROSPECTUS OF
THE GT GLOBAL MUTUAL FUND(S) IN WHICH I/WE AM/ARE INVESTING AND I/WE AGREE TO
ITS TERMS AND CONDITIONS.
I/WE AND MY/OUR ASSIGNS AND SUCCESSORS UNDERSTAND AND AGREE THAT THE ACCOUNT
WILL BE SUBJECT TO THE TELEPHONE EXCHANGE AND TELEPHONE REDEMPTION PRIVILEGES
DESCRIBED IN THE CURRENT PROSPECTUS TO WHICH THIS APPLICATION IS ATTACHED AND
AGREE THAT GT GLOBAL, INC., G.T. GLOBAL GROWTH SERIES, G.T. INVESTMENT FUNDS,
INC., G.T. INVESTMENT PORTFOLIOS, INC. AND THE FUNDS' TRANSFER AGENT, THEIR
OFFICERS AND EMPLOYEES, WILL NOT BE LIABLE FOR ANY LOSS OR DAMAGES ARISING OUT
OF ANY SUCH TELEPHONE, TELEX OR TELEGRAPHIC INSTRUCTIONS REASONABLY BELIEVED
TO BE GENUINE, INCLUDING ANY SUCH LOSS OR DAMAGES DUE TO NEGLIGENCE ON THE
PART OF SUCH ENTITIES. THE INVESTOR(S) CERTIFIES(Y) AND AGREE(S) THAT THE
CERTIFICATIONS, AUTHORIZATIONS, DIRECTIONS AND RESTRICTIONS CONTAINED HEREIN
WILL CONTINUE UNTIL GT GLOBAL, INC., G.T. GLOBAL GROWTH SERIES, G.T.
INVESTMENT FUNDS, INC., G.T. INVESTMENT PORTFOLIOS, INC. OR THE FUNDS'
TRANSFER AGENT RECEIVES WRITTEN NOTICE OF ANY CHANGE OR REVOCATION. ANY CHANGE
IN THESE INSTRUCTIONS MUST BE IN WRITING AND IN SOME CASES, AS DESCRIBED IN
THE PROSPECTUS, REQUIRES THAT ALL SIGNATURES BE GUARANTEED.
PLEASE INDICATE THE NUMBER OF SIGNATURES REQUIRED TO PROCESS CHECKS OR
WRITTEN REDEMPTION REQUESTS: / / ONE / / TWO / / THREE / / FOUR.
(If you do not indicate the number of required signatures, ALL account
owners must sign checks and/or written redemption requests.)
UNDER PENALTIES OF PERJURY, I CERTIFY THAT THE TAXPAYER IDENTIFICATION
NUMBER ("NUMBER") PROVIDED ON THIS FORM IS MY (OR MY EMPLOYER'S, TRUST'S,
MINOR'S OR OTHER PAYEE'S) TRUE, CORRECT AND COMPLETE NUMBER AND MAY BE
ASSIGNED TO ANY NEW ACCOUNT OPENED UNDER THE EXCHANGE PRIVILEGE. I FURTHER
CERTIFY THAT I AM (OR THE PAYEE WHOSE NUMBER IS GIVEN IS) NOT SUBJECT TO
BACKUP WITHHOLDING BECAUSE: (A) I AM (OR THE PAYEE IS) EXEMPT FROM BACKUP
WITHHOLDING; (B) THE INTERNAL REVENUE SERVICE (THE "I.R.S.") HAS NOT NOTIFIED
ME THAT I AM (OR THE PAYEE IS) SUBJECT TO BACKUP WITHHOLDING AS A RESULT OF A
FAILURE TO REPORT ALL INTEREST OR DIVIDENDS; OR (C) THE I.R.S. HAS NOTIFIED ME
THAT I AM (THE PAYEE IS) NO LONGER SUBJECT TO BACKUP WITHHOLDING;
OR, / / I AM (THE PAYEE IS) SUBJECT TO BACKUP WITHHOLDING.
ALL ACCOUNT OWNERS MUST SIGN BELOW (Minors are not authorized signers)
Account revisions may require that signatures be guaranteed. Please see the
Prospectus.
THE I.R.S. DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT
OTHER THAN THE CERTIFICATIONS REQUIRED TO AVOID BACKUP WITHHOLDING.
<TABLE>
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-----------------------------------------------------------
Date
X X
--------------------------------------------------------- ----------------------------------------------------------
X X
--------------------------------------------------------- ----------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
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ACCOUNT PRIVILEGES
TELEPHONE EXCHANGE AND REDEMPTION AUTHORITY TO TRANSMIT REDEMPTION PROCEEDS TO
PRE-DESIGNATED ACCOUNT
I/We, either directly or through the Authorized By completing the following section, redemptions
Agent, if any, named below, hereby authorize the which exceed $1,000 may be wired or mailed to a
Transfer Agent of the GT Global Mutual Funds, to Pre-Designated Account at your bank. (Wiring
honor any telephone, telex or telegraphic instructions may be obtained from your bank.) A
instructions reasonably believed to be authentic bank wire service fee may be charged.
for redemption and/or exchange between a similar
class of shares of any of the Funds distributed --------------------------------------------------
by GT Global, Inc. Name of Bank
SPECIAL PURCHASE AND REDEMPTION PLANS --------------------------------------------------
/ / I have completed and attached the Bank Address
Supplemental Application for:
/ / AUTOMATIC INVESTMENT PLAN --------------------------------------------------
/ / SYSTEMATIC WITHDRAWAL PLAN Bank A.B.A Number Account Number
OTHER
/ / I/We owned shares of one or more Funds --------------------------------------------------
distributed by GT Global, Inc. as of April Names(s) in which Bank Account is Established
30, 1987 and since that date continuously A corporation (or partnership) must also submit a
have owned shares of such Funds. Attached is "Corporate Resolution" (or "Certificate of
a schedule showing the numbers of each of Partnership") indicating the names and titles of
my/our Shareholder Accounts. Officers authorized to act on its behalf.
</TABLE>
RIGHT OF ACCUMULATION -- CLASS A SHARES
/ / I/We qualify for the Right of Accumulation sales charge discount
described in the Prospectus and Statement of Additional Information of
the Fund purchased.
/ / I/We own shares of more than one Fund distributed by GT Global. Listed
below are the numbers of each of my/our Shareholder Accounts.
/ / The registration of some of my/our shares differs from that shown on this
Application. Below are the account number(s) and registration(s) in each
case.
LIST OF OTHER GT GLOBAL MUTUAL FUND ACCOUNTS:
<TABLE>
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------------------------------------------- --------------------------------------------------
------------------------------------------- --------------------------------------------------
Account Numbers Account Registrations
</TABLE>
LETTER OF INTENT -- CLASS A SHARES
/ / I agree to the terms of the Letter of Intent set forth below. Although I
am not obligated to do so, it is my intention to invest over a
thirteen-month period in Class A shares of one or more of the GT Global
Mutual Funds in an aggregate amount at least equal to:
/ / $50,000 / / $100,000 / / $250,000 / / $500,000
When a shareholder signs a Letter of Intent in order to qualify for a reduced
sales charge, Class A shares equal to 5% (in no case in excess of 1/2 of 1%
after an aggregate of $500,000 has been purchased under the Letter) of the
dollar amount specified in this Letter will be held in escrow in the
Shareholder's Account out of the initial purchase (or subsequent purchases, if
necessary) by GT Global, Inc. All dividends and other distributions will be
credited to the Shareholder's Account in shares (or paid in cash, if
requested). If the intended investment is not completed within the specified
thirteen-month period, the purchaser will remit to GT Global, Inc. the
difference between the sales charge actually paid and the sales charge which
would have been paid if the total of such purchases had been made at a single
time. If this difference is not paid within twenty days after written request
by GT Global, Inc. or the shareholder's Authorized Agent, the appropriate
number of escrowed shares will be redeemed to pay such difference. If the
proceeds from this redemption are inadequate, the purchaser will be liable to
GT Global, Inc. for the balance still outstanding. The Letter of Intent may be
revised upward at any time during the thirteen-month period, and such a
revision will be treated as a new Letter, except that the thirteen-month
period during which the purchase must be made will remain unchanged. Exchange
requests involving escrowed shares must specifically reference those shares.
Exchanges of escrowed shares may be delayed to allow for the extra processing
required.
Any questions relating to this Letter of Intent should be directed to GT
Global, 50 California Street, 27th Floor, San Francisco, CA 94111.
FOR USE BY AUTHORIZED AGENT (BROKER/DEALER) ONLY
We hereby submit this Account Application for the purchase of Class A shares
including such shares purchased under a Right of Accumulation or Letter of
Intent or for the purchase of Class B shares in accordance with the terms of
our Dealer Agreement with GT Global, Inc. and with the Prospectus and
Statement of Additional Information of each Fund purchased. We agree to notify
GT Global, Inc. of any purchases properly made under a Letter of Intent or
Right of Accumulation.
<TABLE>
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---------------------------------------------------------------------------------------------------------------------------------
Investment Dealer Name
---------------------------------------------------------------------------------------------------------------------------------
Main Office Address Branch Number Representative's Number Representative's Name
( )
- -----------------------------------------------------------------------------------------------------------------------
Branch Address Telephone
X
- -----------------------------------------------------------------------------------------------------------------------
Investment Dealer's Authorized Signature Title
</TABLE>
<PAGE>
<TABLE>
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[LOGO]
GT GLOBAL MUTUAL FUNDS SUPPLEMENTAL APPLICATION
P.O. Box 7345 SPECIAL INVESTMENT AND
SAN FRANCISCO, CA 94120-7345 WITHDRAWAL OPTIONS
800/223-2138
</TABLE>
<TABLE>
<S> <C> <C>
ACCOUNT REGISTRATION
Please supply the following information exactly as it appears on the Fund's records.
- --------------------------------------------------------- ---------------------------------------------------------
Fund Name Account Number
- ---------------------------------------------------------- ----------------------------------------------------------
Owner's Name Co-Owner 1
- ---------------------------------------------------------- ----------------------------------------------------------
Co-Owner 2 Telephone Number
- ---------------------------------------------------------- ----------------------------------------------------------
Street Address Social Security or Tax I.D. Number
- ----------------------------------------------------------
City, State, Zip Code
Resident of / / U.S. / / Other ------------------
AUTOMATIC INVESTMENT PLAN / / YES / / NO
I/We hereby authorize the Transfer Agent of the GT Global Mutual Funds to debit my/our personal checking account on
the designated dates in order to purchase / / Class A shares or / / Class B shares of the Fund indicated at the top of
this Supplemental Application at the applicable public offering price determined on that day.
/ / Monthly on the 25th day / / Quarterly beginning on the 25th day of the month you first select
(The request for participation in the Plan must be received by the 1st day of the month in which you wish investments
to begin.)
Amount of each debit (minimum $100) $
-------------------------------------------------
NOTE: A Bank Authorization Form (below) and a voided personal check must accompany the Automatic Investment Plan
Application.
</TABLE>
- --------------------------------------------------------------------------------
[LOGO]
<TABLE>
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GT GLOBAL MUTUAL FUNDS AUTOMATIC INVESTMENT PLAN
</TABLE>
<TABLE>
<S> <C> <C> <C>
BANK AUTHORIZATION
- ------------------------- ------------------------------ ------------
Bank Name Bank Address Bank Account Number
I/We authorize you, the above named bank, to debit my/our account for amounts drawn by the Transfer Agent of the GT
Global Mutual Funds, acting as my agent. I/We agree that your rights in respect to each withdrawal shall be the same as
if it were a check drawn upon you and signed by me/us. This authority shall remain in effect until I/we revoke it in
writing and you receive it. I/We agree that you shall incur no liability when honoring any such debit.
I/We further agree that you will incur no liability to me if you dishonor any such withdrawal. This will be so even
though such dishonor results in the forfeiture of investment.
- --------------------------------------------------------- ---------------------------------------------------------
Account Holder's Name Joint Account Holder's Name
X X
- ------------------------------------ -------------- ------------------------------------ --------------
Account Holder's Signature Date Joint Account Holder's Signature Date
</TABLE>
(OVER)
<PAGE>
<TABLE>
<S> <C> <C> <C>
SYSTEMATIC WITHDRAWAL PLAN / / YES / / NO
MINIMUM REQUIREMENTS: $10,000 INITIAL ACCOUNT BALANCE AND $100 MINIMUM PERIODIC PAYMENT.
I/We hereby authorize the Transfer Agent of the GT Global Mutual Funds to redeem the necessary number of / / Class A
or / / Class B shares from my/our GT Global Account on the designated dates in order to make the following periodic
payments:
/ / Monthly on the 25th day / / Quarterly beginning on the 25th day of the month you first select
(The request for participation in the Plan must be received by the 18th day of the month in which you wish withdrawals
to begin.)
Maximum annual withdrawal of 12% of initial account balance for shares subject to a contingent deferred sales charge.
Withdrawals in excess of 12% of the initial account balance annually may result in assessment of a contingent deferred
sales charge, as described in the applicable Fund's prospectus.
Amount of each check ($100 minimum): $ -----------------
Please make checks payable to: --------------------------------------------------------------------------------------
(TO BE COMPLETED ONLY IF Recipient
REDEMPTION PROCEEDS TO BE PAID --------------------------------------------------------------------------------------
TO OTHER THAN ACCOUNT HOLDER Street Address
OF RECORD OR MAILED TO ADDRESS --------------------------------------------------------------------------------------
OTHER THAN ADDRESS OF RECORD) City, State, Zip Code
NOTE: If recipient of checks is not the registered shareholder, signature(s) below must be guaranteed. A corporation
(or partnership) must also submit a "Corporate Resolution" (or "Certification of Partnership") indicating the names
and titles of Officers authorized to act on its behalf.
AGREEMENT AND SIGNATURES
The investor(s) certifies(y) and agree(s) that the certifications, authorizations, directions and restrictions
contained herein will continue until the Transfer Agent of the GT Global Mutual Funds receives written notice of any
change or revocation. Any change in these instructions must be in writing with all signatures guaranteed (if
applicable).
- ----------------------------------------------------------
Date
X X
- ----------------------------------------------------- ---------------------------------------------------
Signature Signature
- ----------------------------------------------------------- ---------------------------------------------------------
Signature Guarantee* (if applicable) Signature Guarantee* (if applicable)
X X
- ----------------------------------------------------- ---------------------------------------------------
Signature Signature
- ----------------------------------------------------------- ---------------------------------------------------------
Signature Guarantee* (if applicable) Signature Guarantee* (if applicable)
*Acceptable signature guarantors: (1) a commercial bank; (2) a U.S. trust company; (3) a member firm of a U.S. stock
exchange; (4) a foreign branch of any of the foregoing; or (5) any other eligible guarantor institution. A notary
public is NOT an acceptable guarantor. An investor with questions concerning the GT Global Mutual Funds signature
guarantee requirement should contact the Transfer Agent.
</TABLE>
- --------------------------------------------------------------------------------
INDEMNIFICATION AGREEMENT
To: Bank Named on the Reverse
In consideration of your compliance with the request and authorization of the
depositor(s) named on the reverse, the Transfer Agent of the GT Global Mutual
Funds hereby agrees:
1. To indemnify and hold you harmless from any loss you may incur because of the
payment by you and of any debit by the Transfer Agent to its own order on the
account of such depositor(s) and received by you in the regular course of
business for payment, or arising out of the dishonor by you of any debit,
provided there are sufficient funds in such account to pay the same upon
presentation.
2. To defend at its own expense any action which might be brought by any
depositor or any other persons because of your actions taken pursuant to the
above mentioned request or in any manner arising by reason of your participation
in connection with such request.
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
GT GLOBAL MUTUAL FUNDS
GT GLOBAL OFFERS A BROAD RANGE OF MUTUAL FUNDS TO COMPLEMENT MANY INVESTORS'
PORTFOLIOS. FOR MORE INFORMATION AND A PROSPECTUS ON ANY GT GLOBAL MUTUAL
FUND, PLEASE CONTACT YOUR FINANCIAL ADVISOR OR CALL GT GLOBAL DIRECTLY AT
1-800-824-1580.
GROWTH FUNDS
/ / GLOBALLY DIVERSIFIED FUNDS
GT GLOBAL WORLDWIDE GROWTH FUND
Invests around the world, including the U.S.
GT GLOBAL INTERNATIONAL GROWTH FUND
Provides portfolio diversity by investing outside
the U.S.
GT GLOBAL EMERGING MARKETS FUND
Gives access to the growth potential of developing economies
/ / GLOBAL THEME FUNDS
GT GLOBAL CONSUMER PRODUCTS AND
SERVICES FUND
Invests in companies that manufacture, market, retail, or distribute consumer
products or services
GT GLOBAL FINANCIAL SERVICES FUND
Focuses on the worldwide opportunities from the demand for financial services
and products
GT GLOBAL HEALTH CARE FUND
Invests in growing health care industries worldwide
GT GLOBAL INFRASTRUCTURE FUND
Seeks companies that build, improve or maintain a country's infrastructure
GT GLOBAL NATURAL RESOURCES FUND
Concentrates on companies that own, explore or develop natural resources
GT GLOBAL TELECOMMUNICATIONS FUND
Invests in companies worldwide that develop, manufacture or sell
telecommunications services or equipment
/ / REGIONALLY DIVERSIFIED FUNDS
GT GLOBAL NEW PACIFIC GROWTH FUND
Offers access to the emerging and established markets of the Pacific Rim,
excluding Japan
GT GLOBAL EUROPE GROWTH FUND
Focuses on investment opportunities in the new, unified Europe
GT GLOBAL LATIN AMERICA GROWTH FUND
Invests in the emerging markets of Latin America
/ / SINGLE COUNTRY FUNDS
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
Invests in equity securities of small U.S. companies
GT GLOBAL AMERICA GROWTH FUND
Concentrates on small and medium-sized companies in the U.S.
GT GLOBAL AMERICA VALUE FUND
Concentrates on equity securities of large cap U.S. companies believed to be
undervalued
GT GLOBAL JAPAN GROWTH FUND
Provides U.S. investors with direct access to the Japanese market
GROWTH AND INCOME FUND
GT GLOBAL GROWTH & INCOME FUND
Invests in blue-chip stocks and government bonds from around the world
INCOME FUNDS
GT GLOBAL GOVERNMENT INCOME FUND
Earns monthly income from global government securities
GT GLOBAL STRATEGIC INCOME FUND
Allocates its assets among debt securities from the U.S., developed foreign
countries and emerging markets
GT GLOBAL HIGH INCOME FUND
Invests in debt securities in emerging markets
MONEY MARKET FUND
GT GLOBAL DOLLAR FUND
Invests in high quality, U.S. dollar-denominated money market securities
worldwide for stability and preservation of capital
[LOGO]
NO DEALER, SALES REPRESENTATIVE OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY G.T. INVESTMENT FUNDS, INC.,
GT GLOBAL GROWTH & INCOME FUND, CHANCELLOR LGT ASSET MANAGEMENT, INC. OR GT
GLOBAL, INC. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR
SOLICITATION OF ANY OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH
JURISDICTION.
GROPR610017MC
<PAGE>
GT GLOBAL GROWTH &
INCOME FUND
50 California Street, 27th Floor
San Francisco, California 94111
(415) 392-6181
Toll Free: (800) 824-1580
Statement of Additional Information
February 29, 1996, As Revised October 31, 1996
- --------------------------------------------------------------------------------
GT Global Growth & Income Fund ("Fund") is a non-diversified mutual fund
organized as a separate series of G.T. Investment Funds, Inc. ("Company"), a
registered open-end management investment company. This Statement of Additional
Information relating to the Class A and Class B shares of the Fund, which is not
a prospectus, supplements and should be read in conjunction with the Fund's
current Class A and Class B Prospectus dated February 29, 1996, as revised
October 31, 1996 a copy of which is available without charge by writing to the
above address or by calling the Fund at the toll-free telephone number listed
above.
Chancellor LGT Asset Management, Inc. (the "Manager") serves as the Fund's
investment manager and administrator. The distributor of the Fund's shares is GT
Global, Inc. ("GT Global"). The Fund's transfer agent is GT Global Investor
Services, Inc. ("GT Services" or "Transfer Agent").
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
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Page No.
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<S> <C>
Investment Objective and Policies........................................................................................ 2
Options, Futures and Currency Strategies................................................................................. 5
Risk Factors............................................................................................................. 13
Investment Limitations................................................................................................... 16
Execution of Portfolio Transactions...................................................................................... 17
Directors and Executive Officers......................................................................................... 20
Management............................................................................................................... 22
Valuation of Fund Shares................................................................................................. 24
Information Relating to Sales and Redemptions............................................................................ 25
Taxes.................................................................................................................... 27
Additional Information................................................................................................... 30
Investment Results....................................................................................................... 31
Description of Debt Ratings.............................................................................................. 37
Financial Statements..................................................................................................... 40
</TABLE>
[LOGO]
Statement of Additional Information Page 1
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
INVESTMENT OBJECTIVE AND
POLICIES
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The investment objective of the Fund is long-term capital appreciation together
with current income. The Fund seeks its objective by investing in a global
portfolio of both equity securities and debt obligations allocated among diverse
international markets.
SELECTION OF EQUITY INVESTMENTS
For investment purposes, an issuer is typically considered as located in a
particular country if it (a) is incorporated under the laws of or has its
principal office in that country, or (b) it normally derives 50% or more of its
total revenue from business in that country. However, these are not absolute
requirements, and certain companies incorporated in a particular country and
considered by the Manager to be located in that country may have substantial
off-shore operations or subsidiaries and/or export sales exceeding in size the
assets or sales in that country.
In certain countries, governmental restrictions and other limitations on
investment may affect the Fund's ability to invest. For example, in some
instances only special classes of securities may be purchased by foreigners and
the market prices, liquidity and rights with respect to those securities may
vary from shares owned by nationals. The Manager is not aware at this time of
the existence of any investment or exchange control regulations which might
substantially impair the operations of the Fund as described in the Prospectus
and this Statement of Additional Information. Although restrictions may in the
future make it undesirable to invest in certain countries, the Manager does not
believe that any current repatriation restrictions would affect its decisions to
invest in the countries eligible for investment by the Fund. The Fund has no
present intention of making any significant investment in any country or stock
market the Manager considers the political or economic situation to be at risk
of substantial or total loss because of such political or economic situation.
The Fund may invest in the securities of investment companies within the limits
of the Investment Company Act of 1940, as amended ("1940 Act"). These
limitations currently provide that, in general, the Fund may purchase shares of
a closed-end investment company unless (a) such a purchase would cause the Fund
to own in the aggregate more than 3 percent of the total outstanding voting
stock of the investment company or (b) such a purchase would cause the Fund to
have more than 5 percent of its total assets invested in the investment company
or more than 10 percent of its total assets invested in an aggregate of all such
investment companies. Investment in such investment companies may also involve
the payment of substantial premiums above the value of such companies' portfolio
securities. The Fund does not intend to invest in such investment companies
unless, in the judgment of the Manager, the potential benefits of such
investments justify the payment of any applicable premiums. The yield of such
securities will be reduced by operating expenses of such companies including
payments to the investment managers of those investment companies.
DEPOSITORY RECEIPTS
The Fund may hold equity securities of foreign issuers in the form of American
Depository Receipts ("ADRs"), American Depository Shares ("ADSs") and European
Depository Receipts ("EDRs"), or other securities convertible into securities of
eligible issuers. These securities may not necessarily be denominated in the
same currency as the securities for which they may be exchanged. ADRs and ADSs
typically are issued by an American bank or trust company and evidence ownership
of underlying securities issued by a foreign corporation. EDRs, which are
sometimes referred to as Continental Depository Receipts ("CDRs"), are issued in
Europe typically by foreign banks and trust companies and evidence ownership of
either foreign or domestic securities. Generally, ADRs and ADSs in registered
form are designed for use in United States securities markets and EDRs in bearer
form are designed for use in European securities markets. For purposes of the
Fund's investment policies, the Fund's investments in ADRs, ADSs and EDRs will
be deemed to be investments in the equity securities representing securities of
foreign issuers into which they may be converted.
WARRANTS OR RIGHTS
Warrants or rights may be acquired by the Fund in connection with other
securities or separately and provide the Fund with the right to purchase at a
later date other securities of the issuer. As a condition of its continuing
registration in a state, the Fund has undertaken that its investments in
warrants or rights, valued at the lower of cost or market, will not exceed 5% of
the value of its net assets and not more than 2% of such assets will be invested
in warrants and rights which are not
Statement of Additional Information Page 2
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
listed on the American or New York Stock Exchange. Warrants or rights acquired
by the Fund in units or attached to securities will be deemed to be without
value for purpose of this restriction. These limits are not fundamental policies
of the Fund and may be changed by the Company's Board of Directors without
shareholder approval.
LENDING OF PORTFOLIO SECURITIES
For the purpose of realizing additional income, the Fund may make secured loans
of portfolio securities amounting to not more than 30% of its total assets.
Securities loans are made to broker/dealers or institutional investors pursuant
to agreements requiring that the loans continuously be secured by collateral at
least equal at all times to the value of the securities lent plus any accrued
interest, "marked to market" on a daily basis. The collateral received will
consist of cash, U.S. short-term government securities, bank letters of credit
or such other collateral as may be permitted under the Fund's investment program
and by regulatory agencies and approved by the Company's Board of Directors.
While the securities loan is outstanding, the Fund will continue to receive the
equivalent of the interest or dividends paid by the issuer on the securities, as
well as interest on the investment of the collateral or a fee from the borrower.
The Fund will have a right to call each loan and obtain the securities on five
business days' notice. The Fund will not have the right to vote equity
securities while they are lent, but it may call in a loan in anticipation of any
important vote. The risks in lending portfolio securities, as with other
extensions of secured credit, consist of possible delay in receiving additional
collateral or in recovery of the securities or possible loss of rights in the
collateral should the borrower fail financially. Loans will be made only to
firms deemed by the Manager to be of good standing and will not be made unless,
in the judgment of the Manager, the consideration to be earned from such loans
would justify the risk.
COMMERCIAL BANK OBLIGATIONS
For the purposes of the Fund's investment policies with respect to bank
obligations, obligations of foreign branches of U.S. banks and of foreign banks
are obligations of the issuing bank and may be general obligations of the parent
bank. Such obligations, however, may be limited by the terms of a specific
obligation and by government regulation. As with investment in non-U.S.
securities in general, investments in the obligations of foreign branches of
U.S. banks and of foreign banks may subject the Fund to investment risks that
are different in some respects from those of investments in obligations of
domestic issuers. Although the Fund typically will acquire obligations issued
and supported by the credit of U.S. or foreign banks having total assets at the
time of purchase in excess of $1 billion, this $1 billion figure is not an
investment policy or restriction of the Fund. For the purposes of calculation
with respect to the $1 billion figure, the assets of a bank will be deemed to
include the assets of its U.S. and non-U.S. branches.
REPURCHASE AGREEMENTS
Repurchase agreements are transactions in which the Fund purchases a security
from a bank or recognized securities dealer and simultaneously commits to resell
that security to the bank or dealer at an agreed upon price, date, and market
rate of interest unrelated to the coupon rate or maturity of the purchased
security. Although repurchase agreements carry certain risks not associated with
direct investments in securities, the Fund intends to enter into repurchase
agreements only with banks and dealers believed by the Manager to present
minimum credit risks in accordance with guidelines established by the Company's
Board of Directors. The Manager will review and monitor the creditworthiness of
such institutions under the Board's general supervision.
The Fund will invest only in repurchase agreements collateralized at all times
in an amount at least equal to the repurchase price plus accrued interest. To
the extent that the proceeds from any sale of such collateral upon a default in
the obligation to repurchase were less than the repurchase price, the Fund would
suffer a loss. If the financial institution which is party to the repurchase
agreement petitions for bankruptcy or otherwise becomes subject to bankruptcy or
other liquidation proceedings, there may be restrictions on the Fund's ability
to sell the collateral and the Fund could suffer a loss. However, with respect
to financial institutions whose bankruptcy or liquidation proceedings are
subject to the U.S. Bankruptcy Code, the Fund intends to comply with provisions
under the U.S. Bankruptcy Code that would allow it immediately to resell the
collateral. There is no limitation on the amount of the Fund's assets that may
be subject to repurchase agreements at any given time. The Fund will not enter
into a repurchase agreement with a maturity of more than seven days if, as a
result, more than 10% of the value of its net assets would be invested in such
repurchase agreements and other illiquid investments.
BORROWING, REVERSE REPURCHASE AGREEMENTS AND "ROLL" TRANSACTIONS
The Fund's borrowings will not exceed 33 1/3% of the Fund's total assets, i.e.,
the Fund's total assets at all times will equal at least 300% of the amount of
outstanding borrowings. If market fluctuations in the value of the Fund's
portfolio holdings or other factors cause the ratio of the Fund's total assets
to outstanding borrowings to fall below 300%, within three days (excluding
Sundays and holidays) of such event the Fund may be required to sell portfolio
securities to restore the 300% asset coverage, even though from an investment
standpoint such sales might be disadvantageous. The Fund also may
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GT GLOBAL GROWTH & INCOME FUND
borrow up to 5% of its total assets for temporary or emergency purposes other
than to meet redemptions. Any borrowing by the Fund may cause greater
fluctuation in the value of its shares than would be the case if the Fund did
not borrow.
The Fund's fundamental investment limitations permit the Fund to borrow money
for leveraging purposes. The Fund, however, currently is prohibited, pursuant to
a non-fundamental investment policy, from borrowing money in order to purchase
securities. Nevertheless, this policy may be changed in the future by a vote of
a majority of the Company's Board of Directors. In the event that the Fund
employs leverage in the future, it would be subject to certain additional risks.
Use of leverage creates an opportunity for greater growth of capital but would
exaggerate any increases or decreases in the Fund's net asset value. When the
income and gains on securities purchased with the proceeds of borrowings exceed
the costs of such borrowings, the Fund's earnings or net asset value will
increase faster than otherwise would be the case; conversely, if such income and
gains fail to exceed such costs, the Fund's earnings or net asset value would
decline faster than would otherwise be the case.
The Fund may enter into reverse repurchase agreements. A reverse repurchase
agreement is a borrowing transaction in which the Fund transfers possession of a
security to another party, such as a bank or broker/dealer in return for cash,
and agrees to repurchase the security in the future at an agreed upon price,
which includes an interest component. The Fund also may engage in "roll"
borrowing transactions which involve the Fund's sale of Government National
Mortgage Association certificates or other securities together with a commitment
(for which the Fund may receive a fee) to purchase similar, but not identical,
securities at a future date. The Fund will maintain, in a segregated account
with a custodian, cash, U.S. government securities or other liquid securities in
an amount sufficient to cover its obligations under "roll" transactions and
reverse repurchase agreements with broker/dealers. No segregation is required
for reverse repurchase agreements with banks.
SHORT SALES
The Fund is authorized to make short sales of securities, although it has no
current intention of doing so. A short sale is a transaction in which the Fund
sells a security in anticipation that the market price of that security will
decline. The Fund may make short sales (i) as a form of hedging to offset
potential declines in long positions in securities it owns, or anticipates
acquiring, and (ii) in order to maintain portfolio flexibility. The Fund may
only make short sales "against the box." In this type of short sale, at the time
of the sale the Fund owns the security it has sold short or has the immediate
and unconditional right to acquire the identical security at no additional cost.
In a short sale, the seller does not immediately deliver the securities sold and
does not receive the proceeds from the sale. To make delivery to the purchaser,
the executing broker borrows the securities being sold short on behalf of the
seller. The seller is said to have a short position in the securities sold until
it delivers the securities sold, at which time it receives the proceeds of the
sale. To secure its obligation to deliver securities sold short, the Fund will
deposit in a separate account with its custodian an equal amount of the
securities sold short or securities convertible into or exchangeable for such
securities at no cost. The Fund could close out a short position by purchasing
and delivering an equal amount of the securities sold short, rather than by
delivering securities already held by the Fund, because the Fund might want to
continue to receive interest and dividend payments on securities in its
portfolio that are convertible into the securities sold short.
The Fund might make a short sale "against the box" in order to hedge against
market risks when the Manager believes that the price of a security may decline,
causing a decline in the value of a security owned by the Fund or a security
convertible into or exchangeable for such security, or when the Manager wants to
sell the security the Fund owns at a current attractive price, but also wishes
to defer recognition of gain or loss for federal income tax purposes and for
purposes of satisfying certain tests applicable to regulated investment
companies under the Internal Revenue Code of 1986, as amended ("Code"). In such
case, any future losses in the Fund's long position should be reduced by a gain
in the short position. Conversely, any gain in the long position should be
reduced by a loss in the short position. The extent to which such gains or
losses in the long position are reduced will depend upon the amount of the
securities sold short relative to the amount of the securities the Fund owns,
either directly or indirectly, and, in the case where the Fund owns convertible
securities, changes in the investment values or conversion permiums of such
securities. There will be certain additional transaction costs associated with
short sales "against the box," but the Fund will endeavor to offset these costs
with income from the investment of the cash proceeds of short sales.
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OPTIONS, FUTURES AND CURRENCY
STRATEGIES
- --------------------------------------------------------------------------------
SPECIAL RISKS OF OPTIONS, FUTURES AND CURRENCY STRATEGIES
The use of options, futures contracts and forward currency contracts ("Forward
Contracts") involves special considerations and risks, as described below. Risks
pertaining to particular instruments are described in the sections that follow.
(1) Successful use of most of these instruments depends upon the
Manager's ability to predict movements of the overall securities and
currency markets, which requires different skills than predicting changes in
the prices of individual securities. While the Manager is experienced in the
use of these instruments, there can be no assurance that any particular
strategy adopted will succeed.
(2) There might be imperfect correlation, or even no correlation,
between price movements of an instrument and price movements of the
investments being hedged. For example, if the value of an instrument used in
a short hedge increased by less than the decline in value of the hedged
investment, the hedge would not be fully successful. Such a lack of
correlation might occur due to factors unrelated to the value of the
investments being hedged, such as speculative or other pressures on the
markets in which the hedging instrument is traded. The effectiveness of
hedges using hedging instruments on indices will depend on the degree of
correlation between price movements in the index and price movements in the
investments being hedged.
(3) Hedging strategies, if successful, can reduce risk of loss by wholly
or partially offsetting the negative effect of unfavorable price movements
in the investments being hedged. However, hedging strategies can also reduce
opportunity for gain by offsetting the positive effect of favorable price
movements in the hedged investments. For example, if a Fund entered into a
short hedge because the Manager projected a decline in the price of a
security in the Fund's portfolio, and the price of that security increased
instead, the gain from that increase might by wholly or partially offset by
a decline in the price of the hedging instrument. Moreover, if the price of
the hedging instrument declined by more than the increase in the price of
the security, the Fund could suffer a loss. In either such case, the Fund
would have been in a better position had it not hedged at all.
(4) As described below, a Fund might be required to maintain assets as
"cover," maintain segregated accounts or make margin payments when it takes
positions in instruments involving obligations to third parties (I.E.,
instruments other than purchased options). If the Fund were unable to close
out its positions in such instruments, it might be required to continue to
maintain such assets or accounts or make such payments until the position
expired or matured. The requirements might impair the Fund's ability to sell
a portfolio security or make an investment at a time when it would otherwise
be favorable to do so, or require that the Fund sell a portfolio security at
a disadvantageous time. The Fund's ability to close out a position in an
instrument prior to expiration or maturity depends on the existence of a
liquid secondary market or, in the absence of such a market, the ability and
willingness of the other party to the transaction ("contra party") to enter
into a transaction closing out the position. Therefore, there is no
assurance that any position can be closed out at a time and price that is
favorable to the Fund.
WRITING CALL OPTIONS
The Fund may write (sell) call options on securities, indices and currencies.
Call options generally will be written on securities and currencies that, in the
opinion of the Manager are not expected to make any major price moves in the
near future but that, over the long term, are deemed to be attractive
investments for the Fund.
A call option gives the holder (buyer) the right to purchase a security or
currency at a specified price (the exercise price) at any time until (American
Style) or on (European Style) a certain date (the expiration date). So long as
the obligation of the writer of a call option continues, he may be assigned an
exercise notice, requiring him to deliver the underlying security or currency
against payment of the exercise price. This obligation terminates upon the
expiration of the call option, or such earlier time at which the writer effects
a closing purchase transaction by purchasing an option identical to that
previously sold.
Portfolio securities or currencies on which call options may be written will be
purchased solely on the basis of investment considerations consistent with the
Fund's investment objective. When writing a call option, the Fund, in return for
the
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GT GLOBAL GROWTH & INCOME FUND
premium, gives up the opportunity for profit from a price increase in the
underlying security or currency above the exercise price, and retains the risk
of loss should the price of the security or currency decline. Unlike one who
owns securities or currencies not subject to an option, the Fund has no control
over when it may be required to sell the underlying securities or currencies,
since most options may be exercised at any time prior to the option's
expiration. If a call option that the Fund has written expires, the Fund will
realize a gain in the amount of the premium; however, such gain may be offset by
a decline in the market value of the underlying security or currency during the
option period. If the call option is exercised, the Fund will realize a gain or
loss from the sale of the underlying security or currency, which will be
increased or offset by the premium received. The Fund does not consider a
security or currency covered by a call option to be "pledged" as that term is
used in the Fund's policy that limits the pledging or mortgaging of its assets.
Writing call options can serve as a limited short hedge because declines in the
value of the hedged investment would be offset to the extent of the premium
received for writing the option. However, if the security or currency
appreciates to a price higher than the exercise price of the call option, it can
be expected that the option will be exercised and the Fund will be obligated to
sell the security or currency at less than its market value.
The premium that the Fund receives for writing a call option is deemed to
constitute the market value of an option. The premium the Fund will receive from
writing a call option will reflect, among other things, the current market price
of the underlying investment, the relationship of the exercise price to such
market price, the historical price volatility of the underlying investment, and
the length of the option period. In determining whether a particular call option
should be written, the Manager will consider the reasonableness of the
anticipated premium and the likelihood that a liquid secondary market will exist
for those options.
Closing transactions will be effected in order to realize a profit on an
outstanding call option, to prevent an underlying security or currency from
being called, or to permit the sale of the underlying security or currency.
Furthermore, effecting a closing transaction will permit the Fund to write
another call option on the underlying security or currency with either a
different exercise price, expiration date or both.
The Fund will pay transaction costs in connection with the writing of options
and in entering into closing purchase contracts. Transaction costs relating to
options activity normally are higher than those applicable to purchases and
sales of portfolio securities.
The exercise price of the options may be below, equal to or above the current
market values of the underlying securities or currencies at the time the options
are written. From time to time, the Fund may purchase an underlying security or
currency for delivery in accordance with the exercise of an option, rather than
delivering such security or currency from its portfolio. In such cases,
additional costs will be incurred.
The Fund will realize a profit or loss from a closing purchase transaction if
the cost of the transaction is less or more, respectively, than the premium
received from writing the option. Because increases in the market price of a
call option generally will reflect increases in the market price of the
underlying security or currency, any loss resulting from the repurchase of a
call option is likely to be offset in whole or in part by appreciation of the
underlying security or currency owned by the Fund.
WRITING PUT OPTIONS
The Fund may write put options on securities, indices and currencies. A put
option gives the purchaser of the option the right to sell, and the writer
(seller) the obligation to buy, the underlying security or currency at the
exercise price at any time until (American style) or on (European style) the
expiration date. The operation of put options in other respects, including their
related risks and rewards, is substantially identical to that of call options.
The Fund generally would write put options in circumstances where the Manager
wishes to purchase the underlying security or currency for the Fund's portfolio
at a price lower than the current market price of the security or currency. In
such event, the Fund would write a put option at an exercise price that, reduced
by the premium received on the option, reflects the lower price it is willing to
pay. Since the Fund also would receive interest on debt securities or currencies
maintained to cover the exercise price of the option, this technique could be
used to enhance current return during periods of market uncertainty. The risk in
such a transaction would be that the market price of the underlying security or
currency would decline below the exercise price less the premium received.
Writing put options can serve as a limited long hedge because increases in the
value of the hedged investment would be offset to the extent of the premium
received for writing the option. However, if the security or currency
depreciates to a price lower than the exercise price of the put option, it can
be expected that the put option will be exercised and the Fund will be obligated
to purchase the security or currency at greater than its market value.
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GT GLOBAL GROWTH & INCOME FUND
PURCHASING PUT OPTIONS
The Fund may purchase put options on securities, indices and currencies. As the
holder of a put option, the Fund has the right to sell the underlying security
or currency at the exercise price at any time until (American style) or on
(European style) the expiration date. The Fund may enter into closing sale
transactions with respect to such options, exercise them or permit them to
expire.
The Fund may purchase a put option on an underlying security or currency
("protective put") owned by the Fund in order to protect against an anticipated
decline in the value of the security or currency. Such hedge protection is
provided only during the life of the put option when the Fund, as the holder of
the put option, is able to sell the underlying security or currency at the put
exercise price regardless of any decline in the underlying security's market
price or currency's exchange value. For example, a put option may be purchased
in order to protect unrealized appreciation of a security or currency when the
Manager deems it desirable to continue to hold the security or currency because
of tax considerations. The premium paid for the put option and any transaction
costs would reduce any profit otherwise available for distribution when the
security or currency is eventually sold.
The Fund also may purchase put options at a time when the Fund does not own the
underlying security or currency. By purchasing put options on a security or
currency it does not own, the Fund seeks to benefit from a decline in the market
price of the underlying security or currency. If the put option is not sold when
it has remaining value, and if the market price of the underlying security or
currency remains equal to or greater than the exercise price during the life of
the put option, the Fund will lose its entire investment in the put option. In
order for the purchase of a put option to be profitable, the market price of the
underlying security or currency must decline sufficiently below the exercise
price to cover the premium and transaction costs, unless the put option is sold
in a closing sale transaction.
PURCHASING CALL OPTIONS
The Fund may purchase call options on securities, indices and currencies. As the
holder of a call option, the Fund would have the right to purchase the
underlying security or currency at the exercise price at any time until
(American style) or on (European style) the expiration date. The Fund may enter
into closing sale transactions with respect to such options, exercise them or
permit them to expire.
Call options may be purchased by the Fund for the purpose of acquiring the
underlying security or currency for its portfolio. Utilized in this fashion, the
purchase of call options would enable the Fund to acquire the security or
currency at the exercise price of the call option plus the premium paid. At
times, the net cost of acquiring the security or currency in this manner may be
less than the cost of acquiring the security or currency directly. This
technique also may be useful to the Fund in purchasing a large block of
securities that would be more difficult to acquire by direct market purchases.
So long as it holds such a call option, rather than the underlying security or
currency itself, the Fund is partially protected from any unexpected decline in
the market price of the underlying security or currency and, in such event,
could allow the call option to expire, incurring a loss only to the extent of
the premium paid for the option.
The Fund also may purchase call options on underlying securities or currencies
it owns in order to protect unrealized gains on call options previously written
by it. A call option could be purchased for this purpose where tax
considerations make it inadvisable to realize such gains through a closing
purchase transaction. Call options also may be purchased at times to avoid
realizing losses that would result in a reduction of the Fund's current return.
For example, where the Fund has written a call option on an underlying security
or currency having a current market value below the price at which such security
or currency was purchased by the Fund, an increase in the market price could
result in the exercise of the call option written by the Fund and the
realization of a loss on the underlying security or currency. Accordingly, the
Fund could purchase a call option on the same underlying security or currency,
which could be exercised to fulfill the Fund's delivery obligations under its
written call (if it is exercised). This strategy could allow the Fund to avoid
selling the portfolio security or currency at a time when it has an unrealized
loss; however, the Fund would have to pay a premium to purchase the call option
plus transaction costs.
Aggregate premiums paid for put and call options will not exceed 5% of the
Fund's total assets at the time of purchase.
The Fund may attempt to accomplish objectives similar to those involved in using
Forward Contracts by purchasing put or call options on currencies. A put option
gives the Fund as purchaser the right (but not the obligation) to sell a
specified amount of currency at the exercise price at any time until (American
style) or on (European style) the expiration date. A call option gives the Fund
as purchaser the right (but not the obligation) to purchase a specified amount
of currency at the exercise price at any time until (American style) or an
(European style) the expiration date. The Fund might purchase a currency put
option, for example, to protect itself against a decline in the dollar value of
a currency in which it holds or anticipates holding securities. If the
currency's value should decline against the dollar, the loss in currency value
should be
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GT GLOBAL GROWTH & INCOME FUND
offset, in whole or in part, by an increase in the value of the put. If the
value of the currency instead should rise against the dollar, any gain to the
Fund would be reduced by the premium it had paid for the put option. A currency
call option might be purchased, for example, in anticipation of, or to protect
against, a rise in the value against the dollar of a currency in which the Fund
anticipates purchasing securities.
Options may be either listed on an exchange or traded over-the-counter ("OTC
options"). Listed options are third-party contracts (I.E., performance of the
obligations of the purchaser and seller is guaranteed by the exchange or
clearing corporation), and have standardized strike prices and expiration dates.
OTC options are two-party contracts with negotiated strike prices and expiration
dates. The Fund will not purchase an OTC option unless it believes that daily
valuations for such options are readily obtainable. OTC options differ from
exchange-traded options in that OTC options are transacted with dealers directly
and not through a clearing corporation (which guarantees performance).
Consequently, there is a risk of non-performance by the dealer. Since no
exchange is involved, OTC options are valued on the basis of an average of the
last bid prices obtained from dealers, unless a quotation from only one dealer
is available, in which case only that dealer's price will be used. In the case
of OTC options, there can be no assurance that a liquid secondary market will
exist for any particular option at any specific time.
The staff of the Securities and Exchange Commission ("SEC") considers purchased
OTC options to be illiquid securities. The Fund may also sell OTC options and,
in connection therewith, segregate assets or cover its obligations with respect
to OTC options written by the Fund. The assets used as cover for OTC options
written by the Fund will be considered illiquid unless the OTC options are sold
to qualified dealers who agree that the Fund may repurchase any OTC option it
writes at a maximum price to be calculated by a formula set forth in the option
agreement. The cover for an OTC option written subject to this procedure would
be considered illiquid only to the extent that the maximum repurchase price
under the formula exceeds the intrinsic value of the option.
The Fund's ability to establish and close out positions in exchange-listed
options depends on the existence of a liquid market. The Fund intends to
purchase or write only those exchange-traded options for which there appears to
be a liquid secondary market. However, there can be no assurance that such a
market will exist at any particular time. Closing transactions can be made for
OTC options only by negotiating directly with the contra party, or by a
transaction in the secondary market if any such market exists. Although the Fund
will enter into OTC options only with contra parties that are expected to be
capable of entering into closing transactions with the Fund, there is no
assurance that the Fund will in fact be able to close out an OTC option position
at a favorable price prior to expiration. In the event of insolvency of the
contra party, the Fund might be unable to close out an OTC option position at
any time prior to its expiration.
INDEX OPTIONS
Puts and calls on indices are similar to puts and calls on securities or futures
contracts except that all settlements are in cash and gain or loss depends on
changes in the index in question (and thus on price movements in the securities
market or a particular market sector generally) rather than on price movements
in individual securities or futures contracts. When the Fund writes a call on an
index, it receives a premium and agrees that, prior to the expiration date, the
purchaser of the call, upon exercise of the call, will receive from the Fund an
amount of cash if the closing level of the index upon which the call is based is
greater than the exercise price of the call. The amount of cash is equal to the
difference between the closing price of the index and the exercise price of the
call times a specified multiple (the "multiplier"), which determines the total
dollar value for each point of such difference. When the Fund buys a call on an
index, it pays a premium and has the same rights as to such call as are
indicated above. When the Fund buys a put on an index, it pays a premium and has
the right, prior to the expiration date, to require the seller of the put, upon
the Fund's exercise of the put, to deliver to the Fund an amount of cash if the
closing level of the index upon which the put is based is less than the exercise
price of the put, which amount of cash is determined by the multiplier, as
described above for calls. When the Fund writes a put on an index, it receives a
premium and the purchaser has the right, prior to the expiration date, to
require the Fund to deliver to it an amount of cash equal to the difference
between the closing level of the index and the exercise price times the
multiplier, if the closing level is less than the exercise price.
The risks of investment in index options may be greater than options on
securities. Because index options are settled in cash, when a Fund writes a call
on an index it cannot provide in advance for its potential settlement
obligations by acquiring and holding the underlying securities. The Fund can
offset some of the risk of writing a call index option position by holding a
diversified portfolio of securities similar to those on which the underlying
index is based. However, the Fund cannot, as a practical matter, acquire and
hold a portfolio containing exactly the same securities as underlie the index
and, as a result, bears a risk that the value of the securities held will vary
from the value of the index.
Even if the Fund could assemble a securities portfolio that exactly reproduced
the composition of the underlying index, it still would not be fully covered
from a risk standpoint because of the "timing risk" inherent in writing index
options. When
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GT GLOBAL GROWTH & INCOME FUND
an index option is exercised, the amount of cash that the holder is entitled to
receive is determined by the difference between the exercise price and the
closing index level on the date when the option is exercised. As with other
kinds of options, the Fund as the call writer will not know that it has been
assigned until the next business day at the earliest. The time lag between
exercise and notice of assignment poses no risk for the writer of a covered call
on a specific underlying security, such as common stock, because there the
writer's obligation is to deliver the underlying security, not to pay its value
as of a fixed time in the past. So long as the writer already owns the
underlying security, it can satisfy its settlement obligations by simply
delivering it, and the risk that its value may have declined since the exercise
date is borne by the exercising holder. In contrast, even if the writer of an
index call holds securities that exactly match the composition of the underlying
index, it will not be able to satisfy its assignment obligations by delivering
those securities against payment of the exercise price. Instead, it will be
required to pay cash in an amount based on the closing index value on the
exercise date; and by the time it learns that it has been assigned, the index
may have declined, with a corresponding decline in the value of its securities
portfolio. This "timing risk" is an inherent limitation on the ability of index
call writers to cover their risk exposure by holding securities positions.
If the Fund has purchased an index option and exercises it before the closing
index value for that day is available, it runs the risk that the level of the
underlying index may subsequently change. If such a change causes the exercised
option to fall out-of-the-money, the Fund will be required to pay the difference
between the closing index value and the exercise price of the option (times the
applicable multiplier) to the assigned writer.
INTEREST RATE, CURRENCY AND STOCK INDEX FUTURES CONTRACTS
The Fund may enter into interest rate or currency futures contracts, and may
enter into stock index futures contracts (collectively, "Futures" or "Futures
Contracts"), as a hedge against changes in prevailing levels of interest rates,
currency exchange rates or stock price levels in order to establish more
definitely the effective return on securities or currencies held or intended to
be acquired by the Fund. The Fund's hedging may include sales of Futures as an
offset against the effect of expected increases in interest rates and decreases
in currency exchange rates or stock prices, and purchases of Futures as an
offset against the effect of expected declines in interest rates, and increases
in currency exchange rates or stock prices.
The Fund only will enter into Futures Contracts that are traded on futures
exchanges and are standardized as to maturity date and underlying financial
instrument. Futures exchanges and trading thereon in the United States are
regulated under the Commodity Exchange Act by the Commodity Futures Trading
Commission ("CFTC"). Futures are exchanged in London at the London International
Financial Futures Exchange.
Although techniques other than sales and purchases of Futures Contracts could be
used to reduce the Fund's exposure to interest rate, currency exchange rate and
stock market fluctuations, the Fund may be able to hedge its exposure more
effectively and at a lower cost through using Futures Contracts.
A Futures Contract provides for the future sale by one party and purchase by
another party of a specified amount of a specific financial instrument (security
or currency) for a specified price at a designated date, time and place. A stock
index Futures Contract provides for the delivery, at a designated date, time and
place, of an amount of cash equal to a specified dollar amount times the
difference between the stock index value at the close of trading on the contract
and the price at which the Futures Contract is originally struck; no physical
delivery of stocks comprising the index is made. Brokerage fees are incurred
when a Futures Contract is bought or sold, and margin deposits must be
maintained at all times the Futures Contract is outstanding.
Although Futures Contracts typically require future delivery of and payment for
financial instruments or currencies, Futures Contracts usually are closed out
before the delivery date. Closing out an open Futures Contract sale or purchase
is effected by entering into an offsetting Futures Contract purchase or sale,
respectively, for the same aggregate amount of the identical financial
instrument or currency and the same delivery date. If the offsetting purchase
price is less than the original sale price, the Fund realizes a gain; if it is
more, the Fund realizes a loss. Conversely, if the offsetting sale price is more
than the original purchase price, the Fund realizes a gain; if it is less, the
Fund realizes a loss. The transaction costs also must be included in these
calculations. There can be no assurance, however, that the Fund will be able to
enter into an offsetting transaction with respect to a particular Futures
Contract at a particular time. If the Fund is not able to enter into an
offsetting transaction, the Fund will continue to be required to maintain the
margin deposits on the Futures Contract.
As an example of an offsetting transaction, the contractual obligations arising
from the sale of one Futures Contract of September Deutschemarks on an exchange
may be fulfilled at any time before delivery under the Futures Contract is
required (I.E., on a specified date in September, the "delivery month") by the
purchase of another Futures Contract of September Deutschemarks on the same
exchange. In such instance the difference between the price at which the Futures
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GT GLOBAL GROWTH & INCOME FUND
Contract was sold and the price paid for the offsetting purchase, after
allowance for transaction costs, represents the profit or loss to the Fund.
The Fund's Futures transactions will be entered into for hedging purposes; that
is, Futures Contracts will be sold to protect against a decline in the price of
securities or currencies that the Fund owns, or Futures Contracts will be
purchased to protect the Fund against an increase in the price of securities or
currencies it has committed to purchase or expects to purchase.
"Margin" with respect to Futures Contracts is the amount of funds that must be
deposited by the Fund in order to initiate Futures trading and to maintain the
Fund's open positions in Futures Contracts. A margin deposit made when the
Futures Contract is entered into ("initial margin") is intended to assure the
Fund's performance under the Futures Contract. The margin required for a
particular Futures Contract is set by the exchange on which the Futures Contract
is traded, and may be modified significantly from time to time by the exchange
during the term of the Futures Contract.
Subsequent payments, called "variation margin," to and from the futures
commission merchant through which the Fund entered into the Futures Contract
will be made on a daily basis as the price of the underlying security, currency
or index fluctuates making the Futures Contract more or less valuable, a process
known as marking-to-market.
RISKS OF USING FUTURES CONTRACTS. The prices of Futures Contracts are
volatile and are influenced, among other things, by actual and anticipated
changes in interest rates and currency exchange rates, and in stock market
movements, which in turn are affected by fiscal and monetary policies and
national and international political and economic events.
There is a risk of imperfect correlation between changes in prices of Futures
Contracts and prices of the securities or currencies in the Fund's portfolio
being hedged. The degree of imperfection of correlation depends upon
circumstances such as: variations in speculative market demand for futures and
for securities or currencies, including technical influences in Futures trading;
and differences between the financial instruments being hedged and the
instruments underlying the standard Futures Contracts available for trading. A
decision of whether, when, and how to hedge involves skill and judgment, and
even a well-conceived hedge may be unsuccessful to some degree because of
unexpected market behavior or interest or currency rate trends.
Because of the low margin deposits required, Futures trading involves an
extremely high degree of leverage. As a result, a relatively small price
movement in a Futures Contract may result in immediate and substantial loss, as
well as gain, to the investor. For example, if at the time of purchase, 10% of
the value of the Futures Contract is deposited as margin, a subsequent 10%
decrease in the value of the Futures Contract would result in a total loss of
the margin deposit, before any deduction for the transaction costs, if the
account were then closed out. A 15% decrease would result in a loss equal to
150% of the original margin deposit, if the Futures Contract were closed out.
Thus, a purchase or sale of a Futures Contract may result in losses in excess of
the amount invested in the Futures Contract.
Most U.S. Futures exchanges limit the amount of fluctuation permitted in Futures
Contract and options on Futures Contract prices during a single trading day. The
daily limit establishes the maximum amount that the price of a Futures Contract
or option may vary either up or down from the previous day's settlement price at
the end of a trading session. Once the daily limit has been reached in a
particular type of Futures Contract or option, no trades may be made on that day
at a price beyond that limit. The daily limit governs only price movement during
a particular trading day and therefore does not limit potential losses, because
the limit may prevent the liquidation of unfavorable positions. Futures Contract
and option prices occasionally have moved to the daily limit for several
consecutive trading days with little or no trading, thereby preventing prompt
liquidation of positions and subjecting some traders to substantial losses.
If the Fund were unable to liquidate a Futures or option on Futures position due
to the absence of a liquid secondary market or the imposition of price limits,
it could incur substantial losses. The Fund would continue to be subject to
market risk with respect to the position. In addition, except in the case of
purchased options, the Fund would continue to be required to make daily
variation margin payments and might be required to maintain the position being
hedged by the Future or option or to maintain cash or securities in a segregated
account.
Certain characteristics of the Futures market might increase the risk that
movements in the prices of Futures Contracts or options on Futures might not
correlate perfectly with movements in the prices of the investments being
hedged. For example, all participants in the Futures and options on Futures
markets are subject to daily variation margin calls and might be compelled to
liquidate Futures or options on Futures positions whose prices are moving
unfavorably to avoid being subject to further calls. These liquidations could
increase price volatility of the instruments and distort the normal price
relationship between the Futures or options and the investments being hedged.
Also, because initial margin deposit requirements in the Futures market are less
onerous than margin requirements in the securities markets, there might be
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GT GLOBAL GROWTH & INCOME FUND
increased participation by speculators in the Futures markets. This
participation also might cause temporary price distortions. In addition,
activities of large traders in both the Futures and securities markets involving
arbitrage, "program trading" and other investment strategies might result in
temporary price distortions.
OPTIONS ON FUTURES CONTRACTS
Options on Futures Contracts are similar to options on securities or currencies
except that options on Futures Contracts give the purchaser the right, in return
for the premium paid, to assume a position in a Futures Contract (a long
position if the option is a call and a short position if the option is a put) at
a specified exercise price at any time during the period of the option. Upon
exercise of the option, the delivery of the Futures position by the writer of
the option to the holder of the option will be accompanied by delivery of the
accumulated balance in the writer's Futures margin account, which represents the
amount by which the market price of the Futures Contract, at exercise, exceeds
(in the case of a call) or is less than (in the case of a put) the exercise
price of the option on the Futures Contract. If an option is exercised on the
last trading day prior to the expiration date of the option, the settlement will
be made entirely in cash equal to the difference between the exercise price of
the option and the closing level of the securities, currencies or index upon
which the Futures Contract is based on the expiration date. Purchasers of
options who fail to exercise their options prior to the exercise date suffer a
loss of the premium paid.
The purchase of call options on Futures can serve as a long hedge, and the
purchase of put options on Futures can serve as a short hedge. Writing call
options on Futures can serve as a limited short hedge, and writing put options
on Futures can serve as a limited long hedge, using a strategy similar to that
used for writing options on securities, foreign currencies or indices.
If the Fund writes an option on a Futures Contract, it will be required to
deposit initial and variation margin pursuant to requirements similar to those
applicable to Futures Contracts. Premiums received from the writing of an option
on a Futures Contract are included in the initial margin deposit.
The Fund may seek to close out an option position by selling an option covering
the same Futures Contract and having the same exercise price and expiration
date. The ability to establish and close out positions on such options is
subject to the maintenance of a liquid secondary market.
LIMITATIONS ON USE OF FUTURES, OPTIONS ON FUTURES AND CERTAIN OPTIONS ON
CURRENCIES
To the extent that the Fund enters into Futures Contracts, options on Futures
Contracts, and options on foreign currencies traded on a CFTC-regulated
exchange, in each case other than for BONA FIDE hedging purposes (as defined by
the CFTC), the aggregate initial margin and premiums required to establish those
positions (excluding the amount by which options are "in-the-money") will not
exceed 5% of the liquidation value of the Fund's portfolio, after taking into
account unrealized profits and unrealized losses on any contracts the Fund has
entered into. In general, a call option on a Futures Contract is
"in-the-money"if the value of the underlying Futures Contract exceeds the
strike, I.E., exercise, price of the call; a put option on a Futures Contract is
"in-the-money" if the value of the underlying Futures Contract is exceeded by
the strike price of the put. This guideline may be modified by the Company's
Board of Directors without a shareholder vote. This limitation does not limit
the percentage of the Fund's assets at risk to 5%.
FORWARD CURRENCY CONTRACTS
A Forward Contract is an obligation, usually arranged with a commercial bank or
other currency dealer, to purchase or sell a currency against another currency
at a future date and price as agreed upon by the parties. The Fund either may
accept or make delivery of the currency at the maturity of the Forward Contract.
The Fund may also, if its contra party agrees, prior to maturity, enter into a
closing transaction involving the purchase or sale of an offsetting contract.
The Fund engages in forward currency transactions in anticipation of, or to
protect itself against, fluctuations in exchange rates. The Fund might sell a
particular foreign currency forward, for example, when it holds bonds
denominated in a foreign currency but anticipates, and seeks to be protected
against, a decline in the currency against the U.S. dollar. Similarly, the Fund
might sell the U.S. dollar forward when it holds bonds denominated in U.S.
dollars but anticipates, and seeks to be protected against, a decline in the
U.S. dollar relative to other currencies. Further, the Fund might purchase a
currency forward to "lock in" the price of securities denominated in that
currency that it anticipates purchasing.
Forward Contracts are traded in the interbank market conducted directly between
currency traders (usually large commercial banks) and their customers. A Forward
Contract generally has no deposit requirement and no commissions are charged at
any stage for trades. The Fund will enter into such Forward Contracts with major
U.S. or foreign banks and securities or currency dealers in accordance with the
guidelines approved by the Company's Board of Directors.
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GT GLOBAL GROWTH & INCOME FUND
The Fund may enter into Forward Contracts either with respect to specific
transactions or with respect to the Fund's portfolio positions. The precise
matching of the Forward Contract amounts and the value of specific securities
generally will not be possible because the future value of such securities in
foreign currencies will change as a consequence of market movements in the value
of those securities between the date the Forward Contract is entered into and
the date it matures. Accordingly, it may be necessary for the Fund to purchase
additional foreign currency on the spot (I.E., cash) market (and bear the
expense of such purchase) if the market value of the security is less than the
amount of foreign currency the Fund is obligated to deliver and if a decision is
made to sell the security and make delivery of the foreign currency. Conversely,
it may be necessary to sell on the spot market some of the foreign currency the
Fund is obligated to deliver. The projection of short-term currency market
movements is extremely difficult, and the successful execution of a short-term
hedging strategy is highly uncertain. Forward Contracts involve the risk that
anticipated currency movements will not be predicted accurately, causing the
Fund to sustain losses on these contracts and transaction costs.
At or before the maturity of a Forward Contract requiring the Fund to sell a
currency, the Fund either may sell a portfolio security and use the sale
proceeds to make delivery of the currency or retain the security and offset its
contractual obligation to deliver the currency by purchasing a second contract
pursuant to which the Fund will obtain, on the same maturity date, the same
amount of the currency that it is obligated to deliver. Similarly, the Fund may
close out a Forward Contract requiring it to purchase a specified currency by,
if its contra party agrees entering, into a second contract entitling it to sell
the same amount of the same currency on the maturity date of the first contract.
The Fund would realize a gain or loss as a result of entering into such an
offsetting Forward Contract under either circumstance to the extent the exchange
rate or rates between the currencies involved moved between the execution dates
of the first contract and the offsetting contract.
The cost to the Fund of engaging in Forward Contracts varies with factors such
as the currencies involved, the length of the contract period and the market
conditions then prevailing. Because Forward Contracts usually are entered into
on a principal basis, no fees or commissions are involved. The use of Forward
Contracts does not eliminate fluctuations in the prices of the underlying
securities the Fund owns or intends to acquire, but it does establish a rate of
exchange in advance. In addition, while Forward Contract sales limit the risk of
loss due to a decline in the value of the hedged currencies, they also limit any
potential gain that might result should the value of the currencies increase.
FOREIGN CURRENCY STRATEGIES -- SPECIAL CONSIDERATIONS
The Fund may use options on foreign currencies, Futures on foreign currencies,
options on Futures on foreign currencies and Forward Contracts to hedge against
movements in the values of the foreign currencies in which the Fund's securities
are denominated. Such currency hedges can protect against price movements in a
security that the Fund owns or intends to acquire that are attributable to
changes in the value of the currency in which it is denominated. Such hedges do
not, however, protect against price movements in the securities that are
attributable to other causes.
The Fund might seek to hedge against changes in the value of a particular
currency when no Futures Contract, Forward Contract or option involving that
currency is available or one of such contracts is more expensive than certain
other contracts. In such cases, the Fund may hedge against price movements in
that currency by entering into a contract on another currency or basket of
currencies, the values of which the Manager believes will have a positive
correlation to the value of the currency being hedged. The risk that movements
in the price of the contract will not correlate perfectly with movements in the
price of the currency being hedged is magnified when this strategy is used.
The value of Futures Contracts, options on Futures Contracts, Forward Contracts,
and options on foreign currencies depends on the value of the underlying
currency relative to the U.S. dollar. Because foreign currency transactions
occurring in the interbank market might involve substantially larger amounts
than those involved in the use of Futures Contracts, Forward Contracts or
options, the Fund could be disadvantaged by dealing in the odd lot market
(generally consisting of transactions of less than $1 million) for the
underlying foreign currencies at prices that are less favorable than for round
lots.
There is no systematic reporting of last sale information for foreign currencies
or any regulatory requirements that quotations available through dealers or
other market sources be firm or revised on a timely basis. Quotation information
generally is representative of very large transactions in the interbank market
and thus might not reflect odd-lot transactions where rates might be less
favorable. The interbank market in foreign currencies is a global,
round-the-clock market. To the extent the U.S. options or Futures markets are
closed while the markets for the underlying currencies remain open, significant
price and rate movements might take place in the underlying markets that cannot
be reflected in the markets for the Futures contracts or options until they
reopen.
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GT GLOBAL GROWTH & INCOME FUND
Settlement of Futures Contracts, Forward Contracts and options involving foreign
currencies might be required to take place within the country issuing the
underlying currency. Thus, the Fund might be required to accept or make delivery
of the underlying foreign currency in accordance with any U.S. or foreign
regulations regarding the maintenance of foreign banking arrangements by U.S.
residents and might be required to pay any fees, taxes and charges associated
with such delivery assessed in the issuing country.
COVER
Transactions using Forward Contracts, Futures Contracts and options (other than
options that the Fund has purchased) expose the Fund to an obligation to another
party. The Fund will not enter into any such transactions unless it owns either
(1) an offsetting ("covered") position in securities, currencies, or other
options, Forward Contracts or Futures Contracts, or (2) cash, receivables and
short-term debt securities with a value sufficient at all times to cover its
potential obligations not covered as provided in (1) above. The Fund will comply
with SEC guidelines regarding cover for these instruments and, if the guidelines
so require, set aside cash, U.S. government securities or other liquid
securities.
Assets used as cover or held in a segregated account cannot be sold while the
position in the corresponding Forward Contract, Futures Contract or option is
open, unless they are replaced with other appropriate assets. If a large portion
of the Fund's assets are used for cover or otherwise set aside, it could affect
portfolio management or the Fund's ability to meet redemption requests or other
current obligations.
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RISK FACTORS
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POLITICAL, SOCIAL AND ECONOMIC RISKS. Investing in securities of non-U.S.
companies may entail additional risks due to the potential political, social and
economic instability of certain countries and the risks of expropriation,
nationalization, confiscation or the imposition of restrictions on foreign
investment, convertibility of currencies into U.S. dollars and on repatriation
of capital invested. In the event of such expropriation, nationalization or
other confiscation by any country, the Fund could lose its entire investment in
any such country.
Certain countries in which the Fund may invest may have groups that advocate
radical religious or revolutionary philosophies or support ethnic independence.
Any disturbance on the part of such individuals could carry the potential for
widespread destruction or confiscation of property owned by individuals and
entities foreign to such country and could cause the loss of the Fund's
investment in those countries. Instability may also result from, among other
things: (i) authoritarian governments or military involvement in political and
economic decision-making, including changes in government through
extra-constitutional means; (ii) popular unrest associated with demands for
improved political, economic and social conditions; and (iii) hostile relations
with neighboring or other countries. Such political, social and economic
instability could disrupt the principal financial markets in which the Fund
invests and adversely affect the value of the Fund's assets.
ILLIQUID SECURITIES. The Fund may invest up to 10% of its net assets in
illiquid securities. See "Investment Limitations." Securities may be considered
illiquid if the Fund cannot reasonably expect within seven days to sell the
security approximately the amount at which the Fund values such securities. The
sale of illiquid securities, if they can be sold at all, generally will require
more time and result in higher brokerage charges or dealer discounts and other
selling expenses than the sale of liquid securities, such as securities eligible
for trading on U.S. securities exchanges or in the over-the-counter markets.
Moreover, restricted securities which may be illiquid for purposes of this
limitation, often sell, if at all, at a price lower than similar securities that
are not subject to restrictions on resale.
Illiquid securities include those that are subject to restrictions contained in
the securities laws of other countries. However, securities that are freely
marketable in the country where they are principally traded, but would not be
freely marketable in the United States, will not be considered illiquid. Where
registration is required, the Fund may be obligated to pay all or part of the
registration expenses and a considerable period may elapse between the time of
the decision to sell and the time the Fund may be permitted to sell a security
under an effective registration statement. If, during such a period, adverse
market conditions were to develop, the Fund might obtain a less favorable price
than prevailed when it decided to sell.
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GT GLOBAL GROWTH & INCOME FUND
Not all restricted securities are illiquid. In recent years a large
institutional market has developed for certain securities that are not
registered under the Securities Act of 1933, as amended ("1933 Act"), including
private placements, repurchase agreements, commercial paper, foreign securities
and corporate bonds and notes. These instruments are often restricted securities
because the securities are sold in transactions not requiring registration.
Institutional investors generally will not seek to sell these instruments to the
general public, but instead will often depend either on an efficient
institutional market in which such unregistered securities can be readily resold
or on an issuer's ability to honor a demand for repayment. Therefore, the fact
that there are contractual or legal restrictions on resale to the general public
or certain institutions is not dispositive of the liquidity of such investments.
Rule 144A under the 1933 Act establishes a "safe harbor" from the registration
requirements of the 1933 act for resales of certain securities to qualified
institutional buyers. Institutional markets for restricted securities have
developed as a result of Rule 144A, providing both readily ascertainable values
for restricted securities and the ability to liquidate an investment to satisfy
share redemption orders. Such markets include automated systems for the trading,
clearance and settlement of unregistered securities of domestic and foreign
issuers, such as the PORTAL System sponsored by the National Association of
Securities Dealers, Inc. An insufficient number of qualified institutional
buyers interested in purchasing Rule 144A-eligible restricted securities held by
a Fund, however, could affect adversely the marketability of such portfolio
securities and the Fund might be unable to dispose of such securities promptly
or at favorable prices.
With respect to liquidity determinations generally, the Company's Board of
Directors has the ultimate responsibility for determining whether specific
securities, including restricted securities pursuant to Rule 144A under the 1933
Act, are liquid or illiquid. The Board has delegated the function of making
day-to-day determinations of liquidity to the Manager in accordance with
procedures approved by the Company's Board of Directors. The Manager takes into
account a number of factors in reaching liquidity decisions, including, but not
limited to: (i) the frequency of trading in the security; (ii) the number of
dealers who make quotes for the security; (iii) the number of dealers who have
undertaken to make a market in the security; (iv) the number of other potential
purchasers; and (v) the nature of the security and how trading is effected
(e.g., the time needed to sell the security, how offers are solicited and the
mechanics of transfer). The Manager monitors the liquidity of securities in the
Fund's portfolio and periodically reports on such decisions to the Board of
Directors.
FOREIGN INVESTMENT RESTRICTIONS. Certain countries prohibit or impose
substantial restrictions on investments in their capital markets, particularly
their equity markets, by foreign entities such as the Fund. These restrictions
or controls may at times limit or preclude investment in certain securities and
may increase the cost and expenses of the Fund. For example, certain countries
require prior governmental approval before investments by foreign persons may be
made, or may limit the amount of investment by foreign persons in a particular
company, or limit the investment by foreign persons to only a specific class of
securities of a company that may have less advantageous terms than securities of
the company available for purchase by nationals. Moreover, the national policies
of certain countries may restrict investment opportunities in issuers or
industries deemed sensitive to national interests. In addition, some countries
require governmental approval for the repatriation of investment income, capital
or the proceeds of securities sales by foreign investors. In addition, if there
is a deterioration in a country's balance of payments or for other reasons, a
country may impose restrictions on foreign capital remittances abroad. The Fund
could be adversely affected by delays in, or a refusal to grant, any required
governmental approval for repatriation, as well as by the application to it of
other restrictions on investments.
NON-UNIFORM CORPORATE DISCLOSURE STANDARDS AND GOVERNMENTAL
REGULATION. Foreign companies are subject to accounting, auditing and financial
standards and requirements that differ in some cases significantly from those
applicable to U.S. companies. In particular, the assets, liabilities and profits
appearing on the financial statements of such a company may not reflect its
financial position or results of operations in the way they would be reflected
had such financial statements been prepared in accordance with U.S. generally
accepted accounting principles. Most of the securities held by the Fund will not
be registered with the SEC or regulators of any foreign country, nor will the
issuers thereof be subject to the SEC's reporting requirements. Thus, there will
be less available information concerning most foreign issuers of securities held
by the Fund than is available concerning U.S. issuers. In instances where the
financial statements of an issuer are not deemed to reflect accurately the
financial situation of the issuer, the Manager will take appropriate steps to
evaluate the proposed investment, which may include on-site inspection of the
issuer, interviews with its management and consultations with accountants,
bankers and other specialists. There is substantially less publicly available
information about foreign companies than there are reports and ratings published
about U.S. companies and the U.S. Government. In addition, where public
information is available, it may be less reliable than such information
regarding U.S. issuers. Issuers of securities on foreign jurisdictions are
generally not subject to the same degree of regulation as are U.S. issuers with
respect to such matters as restrictions on market manipulation, insider trading
rules, shareholder proxy requirements and timely disclosure of information.
Statement of Additional Information Page 14
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GT GLOBAL GROWTH & INCOME FUND
CURRENCY FLUCTUATIONS. Because the Fund, under normal circumstances, will
invest a substantial portion of its total assets in the securities of foreign
issuers which are denominated in foreign currencies, the strength or weakness of
the U.S. dollar against such foreign currencies will account for part of the
Fund's investment performance. A decline in the value of any particular currency
against the U.S. dollar will cause a decline in the U.S. dollar value of the
Fund's holdings of securities and cash denominated in such currency and,
therefore, will cause an overall decline in the Fund's net asset value and any
net investment income and capital gains derived from such securities to be
distributed in U.S. dollars to shareholders of the Fund. Moreover, if the value
of the foreign currencies in which the Fund receives its income falls relative
to the U.S. dollar between receipt of the income and the making of Fund
distributions, the Fund may be required to liquidate securities in order to make
distributions if the Fund has insufficient cash in U.S. dollars to meet
distribution requirements.
The rate of exchange between the U.S. dollar and other currencies is determined
by several factors including the supply and demand for particular currencies,
central bank efforts to support particular currencies, the movement of interest
rates, the pace of business activity in certain other countries and the U.S.,
and other economic and financial conditions affecting the world economy.
Although the Fund values its assets daily in terms of U.S. dollars, the Fund
does not intend to convert its holdings of foreign currencies into U.S. dollars
on a daily basis. The Fund will do so from time to time, and investors should be
aware of the costs of currency conversion. Although foreign exchange dealers do
not charge a fee for conversion, they do realize a profit based on the
difference ("spread") between the prices at which they are buying and selling
various currencies. Thus, a dealer may offer to sell a foreign currency to the
Fund at one rate, while offering a lesser rate of exchange should the Fund
desire to sell that currency to the dealer.
ADVERSE MARKET CHARACTERISTICS. Securities of many foreign issuers may be
less liquid and their prices more volatile than securities of comparable U.S.
issuers. In addition, foreign securities markets and brokers generally are
subject to less governmental supervision and regulation than in the U.S., and
foreign securities transactions usually are subject to fixed commissions, which
generally are higher than negotiated commissions on U.S. transactions. In
addition, foreign securities transactions may be subject to difficulties
associated with the settlement of such transactions. Delays in settlement could
result in temporary periods when assets of the Fund are uninvested and no return
is earned thereon. The inability of the Fund to make intended security purchases
due to settlement problems could cause the Fund to miss attractive
opportunities. Inability to dispose of a portfolio security due to settlement
problems either could result in losses to the Fund due to subsequent declines in
value of the portfolio security or, if the Fund has entered into a contract to
sell the security, could result in possible liability to the purchaser. The
Manager will consider such difficulties when determining the allocation of the
Fund's assets, although the Manager does not believe that such difficulties will
have a material adverse effect on the Fund's portfolio trading activities.
The Fund may use foreign custodians, which may involve risks in addition to
those related to the use of U.S. custodians. Such risks include uncertainties
relating to: (i) determining and monitoring the financial strength, reputation
and standing of the foreign custodian; (ii) maintaining appropriate safeguards
to protect the Fund's investments and (iii) possible difficulties in obtaining
and enforcing judgments against such custodians.
WITHHOLDING TAXES. The Fund's net investment income from foreign issuers may
be subject to withholding taxes by the foreign issuer's country, thereby
reducing the Fund's net investment income or delaying the receipt of income
where those taxes may be recaptured. See "Taxes."
SPECIAL CONSIDERATIONS AFFECTING EUROPE. The countries that are members of
the European Economic Community ("Common Market") (Belgium, Denmark, France,
Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, and
the United Kingdom and Germany) eliminated certain import tariffs and quotas and
other trade barriers with respect to one another over the past several years.
The Manager believes that this deregulation should improve the prospects for
economic growth in many European countries. Among other things, the deregulation
could enable companies domiciled in one country to avail themselves of lower
labor costs existing in other countries. In addition, this deregulation could
benefit companies domiciled in one country by opening additional markets for
their goods and services in other countries. Since, however, it is not clear at
this time what the exact form or effect of these Common Market reforms will be
on business in Western Europe or the emerging European markets, it is impossible
to predict the long-term impact of the implementation of these programs on the
securities owned by the Fund.
SPECIAL CONSIDERATIONS AFFECTING JAPAN AND HONG KONG. The concentration of
investments by the Fund in Japan means that the Fund may be more volatile than a
fund that is broadly diversified geographically. Overseas trade is important to
Japan's economy. Japan has few natural resources and must export to pay for its
imports of these basic requirements.
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GT GLOBAL GROWTH & INCOME FUND
Because of the concentration of Japanese exports in highly visible products,
Japan has had difficult relations with its trading partners, particularly the
United States, where the trade imbalance is the greatest. It is possible that
trade sanctions or other protectionist measures could impact Japan adversely in
both the short and the long term. The Japanese securities markets are less
regulated than those in the United States. Evidence has emerged from time to
time of distortion of market prices to serve political or other purposes.
Shareholders' rights are not always equally enforced.
Hong Kong is a British colony which will transfer sovereignty to the Peoples
Republic of China in 1997. China has espoused policies antagonistic to free
enterprise capitalism and democracy. There can be no guarantee that property
rights will continue to be safeguarded in Hong Kong after 1997, although
recently China has moved toward free enterprise, and has established stock
exchanges of its own.
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INVESTMENT LIMITATIONS
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The Fund has adopted the following investment limitations as fundamental
policies which (unless otherwise noted) may not be changed without approval by
the holders of the lesser of (i) 67% of the Fund's shares represented at a
meeting at which more than 50% of the outstanding shares are represented, and
(ii) more than 50% of the outstanding shares.
The Fund may not:
(1) Invest 25% or more of the value of its total assets in the
securities of issuers conducting their principal business activities in the
same industry, except that this limitation shall not apply to securities
issued or guaranteed as to principal and interest by the U.S. Government or
any of its agencies or instrumentalities;
(2) Invest in companies for the purpose of exercising control or
management;
(3) Buy or sell real estate (including real estate limited partnerships)
or commodities or commodity contracts; however, the Fund may invest in debt
securities secured by real estate or interests therein or issued by
companies which invest in real estate or interests therein, including real
estate investment trusts, and may purchase or sell currencies (including
forward currency exchange contracts), futures contracts and related options
generally as described in the Prospectus and Statement of Additional
Information and subject to operating policy (4) below;
(4) Acquire securities subject to restrictions on disposition or
securities for which there is no readily available market, or enter into
repurchase agreements or purchase time deposits maturing in more than seven
days, or purchase over-the-counter options or hold assets set aside to cover
over-the-counter options written by the Fund, if, immediately after and as a
result, the value of such securities would exceed, in the aggregate, 10% of
the Fund's net assets;
(5) Engage in the business of underwriting securities of other issuers,
except to the extent that the disposal of an investment position may
technically cause it to be considered an underwriter as that term is defined
under the Securities Act of 1933;
(6) Make loans, except that the Fund may purchase debt securities and
enter into repurchase agreements and make loans of portfolio securities;
(7) Purchase securities on margin, provided that the Fund may obtain
such short-term credits as may be necessary for the clearance of purchases
and sales of securities; except that it may make margin deposits in
connection with futures contracts subject to operating policy (4) below;
(8) Borrow money except from banks for temporary or emergency purposes
not in excess of 33 1/3% of the value of the Fund's total assets at the
lower of cost or fair market value. The Fund will not purchase securities
while borrowings in excess of 5% of its total assets are outstanding. This
restriction shall not prevent the Fund from entering into reverse repurchase
agreements and engaging in "roll" transactions, provided that reverse
repurchase agreements, "roll" transactions and any other transactions
constituting borrowing by the Fund may not exceed one-third of the Fund's
total assets. In the event that the asset coverage for the Fund's borrowings
falls below 300%, the Fund will
Statement of Additional Information Page 16
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GT GLOBAL GROWTH & INCOME FUND
reduce, within three days (excluding Sundays and holidays), the amount of
its borrowings in order to provide for 300% asset coverage;
(9) Mortgage, pledge, or hypothecate any of its assets, provided that
this restriction shall not apply to the transfer of securities in connection
with any permissible borrowing or to collateral arrangements in connection
with permissible activities;
(10) Invest in interests in oil, gas, or other mineral exploration or
development programs; or
(11) Purchase or retain the securities of any issuer, if those individual
officers and Directors of the Fund, its investment adviser, or distributor,
each owning beneficially more than 1/2 of 1% of the securities of such
issuer, together own more than 5% of the securities of such issuer.
For purposes of the concentration policy of the Fund contained in limitation (1)
above, the Fund intends to comply with the SEC staff position that securities
issued or guaranteed as to principal and interest by any single foreign
government or any supranational organizations in the aggregate are considered to
be securities of issuers in the same industry.
The following operating policies of the Fund are not fundamental policies and
may be changed by vote of a majority of the Company's Board of Directors without
shareholder approval. The Fund may not: (1) invest in securities of an issuer if
the investment would cause the Fund to own more than 10% of any class of
securities of any one issuer; (2) sell securities short, except to the extent
that the Fund contemporaneously owns or has the right to acquire at no
additional cost securities identical to those sold short; (3) invest more than
5% of its total assets in securities of companies having, together with their
predecessors, a record of less than three years of continuous operation; or (4)
enter into a futures contract, an option on a futures contract, or an option on
foreign currency traded on a CFTC-regulated exchange, in each case other than
for BONA FIDE hedging purposes (as defined by the CFTC), if the aggregate
initial margin and premiums required to establish all of those positions
(excluding the amount by which options are "in-the-money") exceeds 5% of the
liquidation value of the Fund's portfolio, after taking into account unrealized
profits and unrealized losses on any contracts the Fund has entered into.
Investors should refer to the Prospectus for further information with respect to
the Fund's investment objective, which may not be changed without the approval
of the shareholders, and other investment policies, techniques and limitations,
which may be changed without shareholder approval.
- --------------------------------------------------------------------------------
EXECUTION OF PORTFOLIO
TRANSACTIONS
- --------------------------------------------------------------------------------
Subject to policies established by the Company's Board of Directors, the Manager
is responsible for the execution of the Fund's portfolio transactions and the
selection of broker/dealers who execute such transactions on behalf of the Fund.
In executing portfolio transactions, the Manager seeks the best net results for
the Fund, taking into account such factors as the price (including the
applicable brokerage commission or dealer spread), size of the order, difficulty
of execution and operational facilities of the firm involved. Although the
Manager generally seeks reasonably competitive commission rates and spreads,
payment of the lowest commission or spread is not necessarily consistent with
the best net results. While the Fund may engage in soft dollar arrangements for
research services, as described below, the Fund has no obligation to deal with
any broker/dealer or group of broker/dealers in the execution of portfolio
transactions.
Debt securities generally are traded on a "net" basis with a dealer acting as
principal for its own account without a stated commission, although the price of
the security usually includes a profit to the dealer. U.S. and foreign
government securities and money market instruments generally are traded in the
OTC markets. In underwritten offerings, securities usually are purchased at a
fixed price which includes an amount of compensation to the underwriter. On
occasion, securities may be purchased directly from an issuer, in which case no
commissions or discounts are paid. Broker/dealers may receive commissions on
futures, currency and options transactions.
Consistent with the interests of the Fund, the Manager may select brokers to
execute the Fund's portfolio transactions, on the basis of the research and
brokerage services they provide to the Manager for its use in managing the Fund
and its other advisory accounts. Such services may include furnishing analyses,
reports and information concerning issuers, industries,
Statement of Additional Information Page 17
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
securities, geographic regions, economic factors and trends, portfolio strategy,
and performance of accounts; and effecting securities transactions and
performing functions incidental thereto (such as clearance and settlement).
Research and brokerage services received from such brokers are in addition to,
and not in lieu of, the services required to be performed by the Manager under
the Management Contract (defined below). A commission paid to such brokers may
be higher than that which another qualified broker would have charged for
effecting the same transaction, provided that the Manager determines in good
faith that such commission is reasonable in terms either of that particular
transaction or the overall responsibility of the Manager to the Fund and its
other clients and that the total commissions paid by the Fund will be reasonable
in relation to the benefits received by the Fund over the long term. Research
services may also be received from dealers who execute Fund transactions in
over-the-counter markets.
The Manager may allocate brokerage transactions to broker/dealers who have
entered into arrangements under which the broker/dealer allocates a portion of
the commissions paid by the Fund toward payment of the Fund's expenses, such as
transfer agent and custodian fees.
Investment decisions for the Fund and for other investment accounts managed by
the Manager are made independently of each other in light of differing
conditions. However, the same investment decision occasionally may be made for
two or more of such accounts including the Fund. In such cases, simultaneous
transactions may occur. Purchases or sales are then allocated as to price or
amount in a manner deemed fair and equitable to all accounts involved. While in
some cases this practice could have a detrimental effect upon the price or value
of the security as far as the Fund is concerned, in other cases, the Manager
believes that coordination and the ability to participate in volume transactions
will be beneficial to the Fund.
Under a policy adopted by the Company's Board of Directors, and subject to the
policy of obtaining the best net results, the Manager may consider a
broker/dealer's sale of the shares of the Fund and the other funds for which the
Manager serves as investment manager in selecting brokers and dealers for the
execution of portfolio transactions. This policy does not imply a commitment to
execute portfolio transactions through all broker/dealers that sell shares of
the Fund and such other funds.
The Fund contemplates purchasing most foreign equity securities in
over-the-counter markets or stock exchanges located in the countries in which
the respective principal offices of the issuers of the various securities are
located, if that is the best available market. The fixed commissions paid in
connection with most such foreign stock transactions generally are higher than
negotiated commissions on United States transactions. There generally is less
government supervision and regulation of foreign stock exchanges and brokers
than in the United States. Foreign security settlements may in some instances be
subject to delays and related administrative uncertainties.
Foreign equity securities may be held by the Fund in the form of ADRs, ADSs,
EDRs, CDRs or securities convertible into foreign equity securities. ADRs, ADSs,
EDRs and CDRs may be listed on stock exchanges, or traded in the over-the-
counter markets in the United States or Europe, as the case may be. ADRs, like
other securities traded in the United States, will be subject to negotiated
commission rates. The foreign and domestic debt securities and money market
instruments in which the Fund may invest generally are traded in the
over-the-counter markets.
The Fund contemplates that, consistent with the policy of obtaining the best net
results, brokerage transactions may be conducted through certain companies that
are members of the Liechtenstein Global Trust. The Company's Board of Directors
has adopted procedures in conformity with Rule 17e-1 under the 1940 Act to
ensure that all brokerage commissions paid to such affiliates are reasonable and
fair in the context of the market in which they are operating. Any such
transactions will be effected and related compensation paid only in accordance
with applicable SEC regulations.
For the Fund's fiscal years ended October 31, 1995, 1994 and 1993, the Fund paid
aggregate brokerage commissions of $318,958, $280,861 and $382,594,
respectively. For the fiscal year ended October 31, 1994, the Fund paid Bank-in-
Liechtenstein, Frankfurt, as "affiliated broker" as defined in the 1940 Act,
aggregate brokerage commissions of $2,485 for transactions involving purchases
and sales of portfolio securities, which represented 0.89% of the total
brokerage commissions paid by the Fund and 0.35% of the aggregate dollar amount
of transactions involving payment of commissions by the Fund.
PORTFOLIO TRADING AND TURNOVER
The Fund engages in portfolio trading when the Manager has concluded that the
sale of a security owned by the Fund and/ or the purchase of another security of
better value can enhance principal and/or increase income. A security may be
sold to avoid any prospective decline in market value, or a security may be
purchased in anticipation of a market rise. Consistent with the Fund's
investment objective, a security also may be sold and a comparable security
purchased coincidentally in order to take advantage of what is believed to be a
disparity in the normal yield and price relationship between the two securities.
Although the Fund does not intend generally to trade for short-term profits, the
securities in the Fund's
Statement of Additional Information Page 18
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
portfolio will be sold whenever management believes it is appropriate to do so,
without regard to the length of time a particular security may have been held.
However, the portfolio turnover rate will not be a limiting factor when the
Manager deems portfolio changes appropriate. Higher portfolio turnover involves
correspondingly greater brokerage commissions and other transaction costs that
the Fund will bear directly, and may result in the realization of net capital
gains that are taxable when distributed to the Fund's shareholders. For the
fiscal years ended October 31, 1995 and 1994, the Fund's portfolio turnover
rates were 83% and 117%, respectively.
Statement of Additional Information Page 19
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
DIRECTORS AND EXECUTIVE
OFFICERS
- --------------------------------------------------------------------------------
The Company's Directors and Executive Officers are listed below.
<TABLE>
<CAPTION>
NAME, POSITION(S) WITH THE PRINCIPAL OCCUPATIONS AND BUSINESS
COMPANY AND ADDRESS EXPERIENCE FOR PAST 5 YEARS
- --------------------------------------- ------------------------------------------------------------------------------------------
<S> <C>
David A. Minella*, 43 Chairman, the Manager since October 1996; Director, Liechtenstein Global Trust (holding
Director, Chairman of the Board and company of the various international LGT companies) since 1990; President, Asset
President Management Division, Liechtenstein Global Trust since 1995; Director and President, LGT
50 California, Street Asset Management Holdings, Inc. ("LGT Asset Management Holdings") since 1988; Director and
San Francisco CA 94111 President, the Manager since 1989; Director, GT Global since 1987 and President, GT Global
from 1987 to 1995; Director, GT Services since 1990; President, GT Services from 1990 to
1995; Director, G.T. Global Insurance Agency, Inc. ("G.T. Insurance") since 1992; and
President, G.T. Insurance from 1992 to 1995. Mr. Minella also is a director or trustee of
each of the other investment companies registered under the 1940 Act that is managed or
administered by the Manager.
C. Derek Anderson, 54 Chief Executive Officer, Anderson Capital Management, Inc.; Chairman and Chief Executive
Director Officer, Plantagenet Holdings, Ltd. from 1991 to present; Director, Munsingwear, Inc.; and
220 Sansome Street Director, American Heritage Group Inc. and various other companies. Mr. Anderson also is a
Suite 400 director or trustee of each of the other investment companies registered under the 1940
San Francisco, CA 94104 Act that is managed or administered by the Manager.
Frank S. Bayley, 55 Partner with Baker & McKenzie (a law firm); Director and Chairman, C.D. Stimson Company (a
Director private investment company); and Trustee, Seattle Art Museum. Mr. Bayley also is a
Two Embarcadero Center director or trustee or each of the other investment companies registered under the 1940
Suite 2400 Act that is managed or administered by the Manager.
San Francisco, CA 94111
Arthur C. Patterson, 52 Managing Partner, Accel Partners (a venture capital firm). He also serves as a director of
Director various computing and software companies. Mr. Patterson also is a director or trustee of
One Embarcadero Center each of the other investment companies registered under the 1940 Act that is managed or
Suite 3820 administered by the Manager.
San Francisco, CA 94111
Ruth H. Quigley, 59 Private investor; and President, Quigley Friedlander & Co., Inc. (a financial advisory
Director services firm) from 1984 to 1986. Ms. Quigley also is a director or trustee or each of the
1055 California Street other investment companies registered under the 1940 Act that is managed or administered
San Francisco, CA 94108 by the Manager.
F. Christian Wignall, 39 Director, LGT Asset Management Holdings since 1989; Senior Vice President, Chief
Vice President and Chief Investment Officer -- Global Equities and Director, the Manager since 1987; and Chairman,
Investment Officer -- Investment Policy Committee of the affiliated international LGT companies since 1990.
Global Equities
50 California Street
San Francisco, CA 94111
</TABLE>
- --------------
* Mr. Minella is an "interested person" of the Company as defined by the 1940
Act due to his affiliation with the LGT companies.
Statement of Additional Information Page 20
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
<TABLE>
<CAPTION>
NAME, POSITION(S) WITH THE PRINCIPAL OCCUPATIONS AND BUSINESS
COMPANY AND ADDRESS EXPERIENCE FOR PAST 5 YEARS
- --------------------------------------- ------------------------------------------------------------------------------------------
<S> <C>
James R. Tufts, 37 President, GT Services since 1995; Senior Vice President -- Finance and
Vice President and Chief Administration, GT Global, GT Services and G.T. Insurance, from 1994 to
Financial Officer 1995; Senior Vice President -- Finance and Administration, LGT Asset
50 California Street Management Holdings and the Manager since 1994; Vice President --
San Francisco, CA 94111 Finance, LGT Asset Management Holdings, the Manager, GT Global and GT
Services from 1990 to 1994; Vice President -- Finance, G.T. Insurance
from 1992 to 1994; and a Director of the Manager, GT Global and GT
Services since 1991.
Kenneth W. Chancey, 50 Vice President -- Mutual Fund Accounting, the Manager since 1992; and
Vice President and Vice President, Putnam Fiduciary Trust Company from 1989 to 1992.
Principal Accounting Officer
50 California Street
San Francisco, CA 94111
Helge K. Lee, 48 Senior Vice President, General Counsel and Secretary, LGT Asset
Vice President and Secretary Management Holdings, the Manager, GT Global, GT Services and G.T.
50 California Street Insurance since February 1996. Senior Vice President, Secretary and
San Francisco, CA 94111 General Counsel, LGT Asset Management Holdings, the Manager, GT Global,
GT Services and G.T. Insurance from May 1994 to February 1996; Senior
Vice President, General Counsel and Secretary, Strong/Corneliuson
Management, Inc. and Secretary, each of the Strong Funds from October
1991 through May 1994; and shareholder in the law firm of Godfrey &
Kahn, S.C., Milwaukee, Wisconsin for more than five years prior to
October 1991.
</TABLE>
The Board of Directors has a Nominating and Audit Committee, comprised of Miss
Quigley and Messrs. Anderson, Bayley and Patterson, which is responsible for
nominating persons to serve as Directors, reviewing audits of the Company and
its funds and recommending firms to serve as independent auditors for the
Company. Each of the Directors and officers of the Company is also a Director
and officer of G.T. Investment Portfolios, Inc. and G.T. Global Developing
Markets Fund, Inc., a Trustee and officer of G.T. Global Growth Series and a
Trustee of G.T. Greater Europe Fund, G.T. Global Variable Investment Trust, G.T.
Global Variable Investment Series, Global High Income Portfolio and Global
Investment Portfolio, which are also registered investment companies managed by
the Manager. Each Director and officer serves in total as a Director or Trustee
and Officer, respectively, of 10 registered investment companies with 40 series
managed or administered by the Manager. The Company pays each Director, who is
not a director, officer or employee of the Manager or any affiliated company,
$5,000 per annum, plus $300 per Fund for each meeting of the Board attended, and
reimburses travel and other expenses incurred in connection with attendance at
such meetings. Other Directors and Officers receive no compensation or expense
reimbursement from the Company. For the fiscal year ended October 31, 1995, Mr.
Anderson, Mr. Bayley, Mr. Patterson and Ms. Quigley received total compensation
of 36,705.30, 34,230.22, 36,755.58 and 33,706.85, respectively, from the Company
for which he or she serves as a Director. For the fiscal year ended October 31,
1995, Mr. Anderson, Mr. Bayley, Mr. Patterson and Ms. Quigley, who are not
directors, officers or employees of the Manager or any affiliated company,
received total compensation of $92,176.78, $87,868.84, $92,280.90 and
$86,957.55, respectively, from the 40 GT Global Mutual Funds for which he or she
serves as a Director or Trustee. Fees and expenses disbursed to the Directors
contained no accrued or payable pension or retirement benefits. As of the date
of this Statement of Additional Information, the officers and Directors and
their families as a group owned in the aggregate beneficially or of record less
than 1% of the outstanding shares of the Fund or of all the Company's funds in
the aggregate.
Statement of Additional Information Page 21
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
MANAGEMENT
- --------------------------------------------------------------------------------
INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES
Chancellor LGT Asset Management, Inc. (the "Manager") serves as the Fund's
investment manager and administrator under an Investment Management and
Administration Contract ("Management Contract") between the Company and the
Manager. As investment manager and administrator, the Manager makes all
investment decisions for the Fund and administers the Fund's affairs. Among
other things, the Manager furnishes the services and pays the compensation and
travel expenses of persons who perform the executive, administrative, clerical
and bookkeeping functions of the Company and the Fund, and provides suitable
office space, necessary small office equipment and utilities. For these
services, the Fund pays the Manager investment management and administration
fees, based on the Fund's average daily net assets, computed daily and paid
monthly, at the annualized rate of .975% on the first $500 million, .95% on the
next $500 million, .925% on the next $500 million, and .90% on amounts
thereafter.
The Management Contract may be renewed for one-year terms, provided that any
such renewal has been specifically approved at least annually by: (i) the
Company's Board of Directors, or by the vote of a majority of the Fund's
outstanding voting securities (as defined in the 1940 Act), and (ii) a majority
of Directors who are not parties to the Management Contract or "interested
persons" of any such party (as defined in the 1940 Act), cast in person at a
meeting called for the specific purpose of voting on such approval. The
Management Contract provides that with respect to the Fund, the Company or the
Manager may terminate the Contract without penalty upon sixty days' written
notice. The Management Contract terminates automatically in the event of its
assignment (as defined in the 1940 Act).
Under the Management Contract, the Manager has agreed to waive its investment
management and administration fees from the Fund and to reimburse the Fund to
the extent necessary to assure that the Fund's annual expenses (exclusive of
brokerage commissions, organizational expenses, taxes, interest,
distribution-related expenses, certain expenses attributable to investing
outside the U.S. and extraordinary expenses) do not exceed the most stringent
expense limitations prescribed by any state in which the Fund's shares are
offered for sale. Currently, the most restrictive applicable limitation provides
that the Fund's expenses may not exceed an annual rate of 2 1/2% of the first
$30 million of average net assets, 2% of the next $70 million of average net
assets and 1 1/2% of assets in excess of that amount. In addition, the Manager
and GT Global have voluntarily undertaken to limit the Fund's Class A share and
Class B share expenses (exclusive of brokerage commissions, taxes, interest and
extraordinary expenses) to the maximum annual level of 1.85% and 2.50% of the
Fund's average daily net assets of those respective classes of the Fund, during
each fiscal year and the Manager and GT Global have agreed to reimburse the Fund
if the Fund's expenses exceed that amount.
The following table discloses the amount of investment management and
administration fees paid by the Fund to the Manager during the Fund's last three
fiscal years:
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31, AMOUNT PAID
- ----------------------------------------------------------------------------------------------------------- -------------
<S> <C>
1995....................................................................................................... $ 6,301,399
1994....................................................................................................... 5,676,421
1993....................................................................................................... 2,226,185
</TABLE>
The fees shown in the table above do not include the effect of reimbursements of
Fund operating expenses made by the Manager. During the Fund's fiscal year ended
October 31, 1993, the Manager reimbursed the Fund for a portion of the Fund's
aggregate operating expenses in the amount of $183,449.
DISTRIBUTION SERVICES
The Fund's Class A and Class B shares are offered continuously through the
Fund's principal underwriter and distributor, GT Global, on a "best efforts"
basis pursuant to a Distribution Contract between the Company and GT Global
dated February 24, 1989.
As described in the Prospectus, the Company has adopted separate Distribution
Plans with respect to each class of the Fund in accordance with the provisions
of Rule 12b-1 under the 1940 Act ("Class A Plan" and "Class B Plan")
(collectively, "Plans"). The rate of payments by the Fund under the Plans, as
described in the Prospectus, may not be increased without the approval of the
majority of the outstanding voting securities of the Fund. All expenses for
which GT Global is
Statement of Additional Information Page 22
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
reimbursed under the Class A Plan will have been incurred within one year of
such reimbursement. The Fund makes no payments to any party other than GT
Global, which is the distributor (principal underwriter) of the Fund's shares.
The Class B Plan took effect on October 22, 1992. The following table discloses
payments made by the Fund to GT Global under the Plans during the Fund's last
fiscal year:
<TABLE>
<CAPTION>
CLASS A CLASS B
AMOUNT PAID AMOUNT PAID
------------- -------------
<S> <C> <C>
Year ended October 31, 1995................................................................. $ 1,035,465 $ 3,539,336
</TABLE>
In approving the Plans, the Directors including a majority of Directors who are
not "interested persons" of the Company (as defined in the 1940 Act) and who
have no direct or indirect financial interests in the operation of the Plans or
in any agreement related thereto, determined that each Plan was in the best
interests of the Fund and its shareholders. Agreements related to the Plan must
also be approved by such vote of the Directors and Qualified Directors as
described above. A plan of distribution which was substantially similar to the
Class A Plan was approved by the shareholders of the Fund on January 20, 1992,
which was subsequently amended to reflect certain changes, including (i)
reference to the addition of the Class B Plan and (ii) changes in the rules of
the National Association of Securities Dealers, Inc. ("NASD"). The Class B Plan
was approved by the initial sole shareholder of the Class B shares on October
21, 1992.
Each Plan requires that, at least quarterly, the Directors review the amounts
expended thereunder and the purposes for which such expenditures were made. Each
Plan requires that so long as it is in effect the selection and nomination of
Directors who are not "interested persons" of the Company will be committed to
the discretion of the Directors who are not "interested persons" of the Company,
as defined in the 1940 Act.
As discussed in the Prospectus, GT Global collects sales charges on sales of
Class A shares of the Fund, retains certain amounts of such charges and reallows
other amounts of such charges to broker/dealers who sell shares.The following
table reviews the extent of such activity during the Fund's last three fiscal
years under a sales structure substantially similar to the current Class A
structure:
<TABLE>
<CAPTION>
SALES CHARGES AMOUNTS AMOUNTS
YEAR ENDED OCTOBER 31, COLLECTED RETAINED REALLOWED
- ----------------------------------------------------------------------------------- ------------- --------- ----------
<S> <C> <C> <C>
1995............................................................................... $ 556,296 $ 80,112 $ 476,184
1994............................................................................... 2,299,883 442,313 1,857,570
1993............................................................................... 2,304,000 0 2,304,000
</TABLE>
GT Global receives no compensation or reimbursements relating to its
distribution efforts with respect to Class A shares other than as described
above. GT Global receives any contingent deferred sales charges payable with
respect to redemptions of Class B shares. For the fiscal years ended October 31,
1995 and 1994, and for the period April 1, 1993 to October 31, 1993, GT Global
collected contingent deferred sales charges in the amounts of $1,533,810,
$321,440 and $30,523, respectively. Purchases of Class A shares exceeding
$500,000 may be subject to a contingent deferred sales charge upon redemption.
GT Global collected contingent deferred sales charges in the amount of $19,017
for the fiscal year ended October 31, 1995.
TRANSFER AGENCY AND ACCOUNTING AGENT SERVICES
GT Global Investor Services, Inc. ("Transfer Agent") has been retained by the
Fund to perform shareholder servicing, reporting and general transfer agent
functions for the Fund. For these services, the Transfer Agent receives an
annual maintenance fee of $17.50 per account, a new account fee of $4.00 per
account, a per transaction fee of $1.75 for all transactions other than
exchanges and a per exchange fee of $2.25. The Transfer Agent also is reimbursed
by the Fund for its out-of-pocket expenses for such items as postage, forms,
telephone charges, stationery and office supplies. The Manager serves as the
Fund's pricing and accounting agent. The monthly fee for these services to the
Manager is a percentage, not to exceed 0.08% 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 the Manager ("GT
Global Mutual Funds") and 0.02% to the assets in excess of $6 billion and
allocating the result according to each Fund's average daily net assets.
As of October 31, 1995, the Fund paid the Manager fees of $40,735 for such
accounting services.
EXPENSES OF THE FUND
The Fund pays all expenses not assumed by the Manager, GT Global and other
agents. These expenses include, in addition to the advisory, distribution,
transfer agency, pricing and accounting agency and brokerage fees discussed
above, legal and audit expenses, custodian fees, directors' fees, organizational
fees, fidelity bond and other insurance premiums, taxes, extraordinary expenses
and the expenses of reports and prospectuses sent to existing investors. The
allocation of general Company expenses and expenses shared among the Fund and
other funds organized as series of the Company are
Statement of Additional Information Page 23
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
allocated on a basis deemed fair and equitable, which may be based on the
relative net assets of the Fund or the nature of the services performed and
relative applicability to the Fund. Expenditures, including costs incurred in
connection with the purchase or sale of portfolio securities, which are
capitalized in accordance with generally accepted accounting principles
applicable to investment companies, are accounted for as capital items and not
as expenses. The ratio of the Fund's expenses to its relative net assets can be
expected to be higher than the expense ratios of funds investing solely in
domestic securities, since the cost of maintaining the custody of foreign
securities and the rate of investment management fees paid by the Fund generally
are higher than the comparable expenses of such other funds.
- --------------------------------------------------------------------------------
VALUATION OF FUND SHARES
- --------------------------------------------------------------------------------
As described in the Prospectus, the Fund's net asset value per share for each
class of shares is determined at the close of regular trading on the New York
Stock Exchange ("NYSE") (currently 4:00 p.m. Eastern time, unless weather,
equipment failure or other factors contribute to an earlier closing time) on
each business day the NYSE is open for business. Currently, the NYSE is closed
on weekends and on certain days relating to the following holidays: New Year's
Day, Presidents' Day, Good Friday, Memorial Day, July 4th, Labor Day,
Thanksgiving Day and Christmas Day.
The Fund's portfolio securities and other assets are valued as follows:
Equity securities, including ADRs, ADSs, and EDRs, which are traded on stock
exchanges, are valued at the last sale price on the exchange or in the principal
over-the-counter market in which such securities are traded, as of the close of
business on the day the securities are being valued or, lacking any sales, at
the last available bid price. In cases where securities are traded on more than
one exchange, the securities are valued on the exchange determined by the
Manager to be the primary market.
Long-term debt obligations are valued at the mean of representative quoted bid
and asked prices for such securities or, if such prices are not available, at
prices for securities of comparable maturity, quality and type; however, when
the Manager deems it appropriate, prices obtained for the day of valuation from
a bond pricing service will be used. Short-term investments are amortized to
maturity based on their cost, adjusted for foreign exchange translation,
provided such valuations represent fair value.
Options on indices, securities and currencies purchased by the Fund are valued
at their last bid price in the case of listed options or, in the case of OTC
options, at the average of the last bid prices obtained from dealers unless a
quotation from only one dealer is available, in which case only that dealer's
price will be used. The value of each security denominated in a currency other
than U.S. dollars will be translated into U.S. dollars at the prevailing market
rate as determined by the Manager on that day. When market quotations for
futures and options on futures held by the Fund are readily available, those
positions will be valued based upon such quotations.
Securities and other assets for which market quotations are not readily
available (including restricted securities which are subject to limitations as
to their sale) are valued at fair value as determined in good faith by or under
the direction of the Company's Board of Directors. The valuation procedures
applied in any specific instance are likely to vary from case to case. However,
consideration generally is given to the financial position of the issuer and
other fundamental analytical data relating to the investment and to the nature
of the restrictions on disposition of the securities (including any registration
expenses that might be borne by the Fund in connection with such disposition).
In addition, specific factors also generally are considered, such as the cost of
the investment, the market value of any unrestricted securities of the same
class (both at the time of purchase and at the time of valuation), the size of
the holding, the prices of any recent transactions or offers with respect to
such securities and any available analysts' reports regarding the issuer.
The fair value of any other assets is added to the value of all securities
positions to arrive at the value of the Fund's total assets. The Fund's
liabilities, including accruals for expenses, are deducted from its total
assets. Once the total value of the Fund's net assets is so determined, that
value is then divided by the total number of shares outstanding (excluding
treasury shares), and the result, rounded to the nearer cent, is the net asset
value per share.
Any assets or liabilities initially expressed in terms of foreign currencies are
translated into U.S. dollars at the official exchange rate or at the mean of the
current bid and asked prices of such currencies against the U.S. dollar last
quoted by a
Statement of Additional Information Page 24
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
major bank that is a regular participant in the foreign exchange market or on
the basis of a pricing service that takes into account the quotes provided by a
number of such major banks. If none of these alternatives are available, or none
are deemed to provide a suitable methodology for converting a foreign currency
into U.S. dollars, the Board of Directors, in good faith, will establish a
conversion rate for such currency.
European, Far Eastern, or Latin American securities trading may not take place
on all days on which the NYSE is open. Further, trading takes place in Japanese
markets on certain Saturdays and in various foreign markets on days on which the
NYSE is not open. In addition, trading in securities on European and Far Eastern
securities exchanges and OTC markets generally is completed well before the
close of the business day in New York. Consequently, the calculation of the
Fund's net asset value may not take place contemporaneously with the
determination of the prices of securities held by the Fund. Events affecting the
values of portfolio securities that occur between the time their prices are
determined and the close of regular trading on the NYSE will not be reflected in
the Fund's net asset value unless the Manager, under the supervision of the
Company's Board of Directors, determines that the particular event would
materially affect net asset value. As a result, the Fund's net asset value may
be significantly affected by such trading on days when a shareholder cannot
purchase or redeem shares of the Fund.
- --------------------------------------------------------------------------------
INFORMATION RELATING TO SALES
AND REDEMPTIONS
- --------------------------------------------------------------------------------
PAYMENT AND TERMS OF OFFERING
Payment for Class A or Class B shares purchased should accompany the purchase
order, or funds should be wired to the Transfer Agent as described in the
Prospectus. Payment for Fund shares, other than by wire transfer, must be made
by check or money order drawn on a U.S. bank. Checks or money orders must be
payable in U.S. dollars.
As a condition of this offering, if an order to purchase either class of shares
is cancelled due to nonpayment (for example, on account of a check returned for
"not sufficient funds"), the person who made the order will be responsible for
any loss incurred by the Fund by reason of such cancellation, and if such
purchaser is a shareholder, the Fund shall have the authority as agent of the
shareholder to redeem shares in his or her account at their then-current net
asset value per share to reimburse the Fund for the loss incurred. Investors
whose purchase orders have been cancelled due to nonpayment may be prohibited
from placing future orders.
The Fund reserves the right at any time to waive or increase the minimum
requirements applicable to initial or subsequent investments with respect to any
person or class of persons. An order to purchase shares is not binding on the
Fund until it has been confirmed in writing by the Transfer Agent (or other
arrangements made with the Fund, in the case of orders utilizing wire transfer
of funds, as described above) and payment has been received. To protect existing
shareholders, the Fund reserves the right to reject any offer for a purchase of
shares by any individual.
SALES OUTSIDE THE UNITED STATES
Sales of Fund shares made through brokers outside the United States will be at
net asset value plus a sales commission, if any, established by that broker or
by local law; such a commission, if any, may be more or less than the sales
charges listed in the sales charge table included in the Prospectus.
LETTER OF INTENT -- CLASS A SHARES
The Letter of Intent ("LOI") is not a binding obligation to purchase the
indicated amount. During such time as Class A shares are held in escrow under an
LOI to assure payment of applicable sales charges if the indicated amount is not
met, all dividends and capital gain distributions on escrowed shares will be
reinvested in additional Class A shares or paid in cash, as specified by the
shareholder. If the intended investment is not completed within the specified
13-month period, the purchaser must remit to GT Global the difference between
the sales charge actually paid and the sales charge which would have been
applicable if the total Class A purchases had been made at a single time. If
this amount is not paid to GT Global within 20 business days after written
request, the appropriate number of escrowed shares will be redeemed and the
proceeds paid to GT Global.
Statement of Additional Information Page 25
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
A registered investment adviser, trust company or trust department seeking to
execute an LOI as a single purchaser with respect to accounts over which it
exercises investment discretion is required to provide the Transfer Agent with
information establishing that it has discretionary authority with respect to the
money invested (e.g., by providing a copy of the pertinent investment advisory
agreement). Class A shares purchased in this manner must be restrictively
registered with the Transfer Agent so that only the investment adviser, trust
company or trust department, and not the beneficial owner, will be able to place
purchase, redemption and exchange orders.
AUTOMATIC INVESTMENT PLAN -- CLASS A SHARES AND CLASS B SHARES
To establish participation in the GT Global Automatic Investment Plan ("AIP"),
investors or their brokers should specify whether investment will be in Class A
shares or Class B shares and send the following documents to the Transfer Agent:
(1) an AIP Application; (2) a Bank Authorization Form; and (3) a voided personal
check from the pertinent bank account. The necessary forms are included at the
back of the Fund's prospectus. Providing that an investor's bank accepts the
Bank Authorization Form, investment amounts will be drawn on the designated
dates (monthly on the 25th day or beginning quarterly on the 25th day of the
month the investor first selects) in order to purchase full and fractional
shares of the Fund at the public offering price determined on that day. In the
event that the 25th day falls on a Saturday, Sunday or holiday, shares will be
purchased on the next business day. If an investor's check is returned because
of insufficient funds, a stop payment order or the account is closed, the AIP
may be discontinued, and any share purchase made upon deposit of such check may
be cancelled. Furthermore, the shareholder will be liable for any loss incurred
by the Fund by reason of such cancellation. Investors should allow one month for
the establishment of an AIP. An AIP may be terminated by the Transfer Agent or
the Fund upon 30 days' written notice or by the participant, at any time,
without penalty, upon written notice to the Fund or the Transfer Agent.
INDIVIDUAL RETIREMENT ACCOUNTS (IRAS)
Class A or Class B shares of the Fund may be purchased as the underlying
investment for an IRA meeting the requirements of section 408(a) of the Internal
Revenue Code of 1986, as amended ("Code"). IRA applications are available from
brokers or GT Global.
EXCHANGES BETWEEN FUNDS
Shares of the Fund may be exchanged for shares of other GT Global Mutual Funds,
based on their respective net asset values without imposition of any sales
charges provided that the registration remains identical. Class A shares may be
exchanged only for Class A shares of other GT Global Mutual Funds. Class B
shares may be exchanged only for Class B shares of other GT Global Mutual Funds.
The exchange privilege is not an option or right to purchase shares but is
permitted under the current policies of the respective GT Global Mutual Funds.
The privilege may be discontinued or changed at any time by any of the funds
upon 60 days prior notice to the shareholders of such fund and is available only
in states where the exchange may be legally made. Before purchasing shares
through the exercise of the exchange privilege, a shareholder should obtain and
read a copy of the prospectus of the fund to be purchased and should consider
the investment objective(s) of the fund.
TELEPHONE REDEMPTIONS
A corporation or partnership wishing to utilize telephone redemption services
must submit a "Corporate Resolution" or "Certificate of Partnership" indicating
the names, titles and the required number of signatures of persons authorized to
act on its behalf. The certificate must be signed by a duly authorized
officer(s) and, in the case of a corporation, the corporate seal must be
affixed. All shareholders may request that redemption proceeds be transmitted by
bank wire upon request directly to the shareholder's predesignated account at a
domestic bank or savings institution, if the proceeds are at least $1,000. Costs
in connection with the administration of this service, including wire charges,
currently are borne by the Fund. Proceeds of less than $1,000 will be mailed to
the shareholder's registered address of record. The Fund and the Transfer Agent
reserve the right to refuse any telephone instructions and may discontinue the
aforementioned redemption options upon 30 days' written notice.
SYSTEMATIC WITHDRAWAL PLAN
Shareholders owning Class A or Class B shares of the Fund with a value of
$10,000 or more may establish a Systematic Withdrawal Plan ("SWP"). Under a SWP,
a shareholder will receive monthly or quarterly payments, in amounts of not less
than $100 per payment, through the automatic redemption of the necessary number
of shares on the designated dates (monthly on the 25th day or beginning
quarterly on the 25th day of the month the investor first selects). In the event
that the 25th day falls on a Saturday, Sunday or holiday, the redemption will
take place on the prior business day. Certificates, if any, for the shares being
redeemed must be held by the Transfer Agent. Checks will be made payable to the
designated recipient and mailed within seven days. If the recipient is other
than the registered shareholder, the signature of each shareholder must be
guaranteed on the SWP application (see "How to Redeem Shares" in the
Prospectus). A corporation
Statement of Additional Information Page 26
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
(or partnership) also must submit a "Corporation Resolution" or "Certification
of Partnership" indicating the names, titles, and signatures of the individuals
authorized to act on its behalf, and the SWP application must be signed by a
duly authorized officer(s) and the corporate seal affixed.
With respect to a SWP, the maximum annual SWP withdrawal is 12% of the initial
account value. Withdrawals in excess of 12% of the initial account value
annually may result in assessment of a contingent deferred sales charge. See
"How to Invest" in the Prospectus.
Shareholders should be aware that such systematic withdrawals may deplete or use
up entirely the initial investment and result in realized long-term or
short-term capital gains or losses. The SWP may be terminated at any time by the
Transfer Agent or the Fund upon 30 days' written notice or by a shareholder upon
written notice to the Fund or its Transfer Agent. Applications and further
details regarding establishment of a SWP are provided at the back of the Fund's
Prospectus.
SUSPENSION OF REDEMPTION PRIVILEGES
The Fund may suspend redemption privileges or postpone the date of payment for
more than seven days after a redemption order is received during any period (1)
when the NYSE is closed other than customary weekend and holiday closings, or
trading on the NYSE is restricted as determined by the SEC, (2) when an
emergency exists, as defined by the SEC, which would prohibit the Fund from
disposing of its portfolio securities or in fairly determining the value of its
assets, or (3) as the SEC may otherwise permit.
REDEMPTIONS IN KIND
It is possible that conditions may arise in the future which would, in the
opinion of the Company's Board of Directors, make it undesirable for the Fund to
pay for all redemptions in cash. In such cases, the Board may authorize payment
to be made in portfolio securities or other property of the Fund, so called
"redemption in kind." Payment of redemptions in kind will be made in readily
marketable securities. Such securities would be valued at the same value
assigned to them in computing the net asset value per share. Shareholders
receiving such securities would incur brokerage costs in selling any such
securities so received. However, despite the foregoing, the Company has filed
with the SEC an election pursuant to Rule 18f-1 under the 1940 Act. This means
that the Fund will pay in cash all requests for redemption made by any
shareholder of record, limited in amount with respect to each shareholder during
any ninety-day period to the lesser of $250,000 or 1% of the value of the net
assets of the Fund at the beginning of such period. This election is irrevocable
so long as Rule 18f-1 remains in effect, unless the SEC by order upon
application permits the withdrawal of such election.
- --------------------------------------------------------------------------------
TAXES
- --------------------------------------------------------------------------------
GENERAL
In order to qualify or to continue to qualify for treatment as a regulated
investment company ("RIC") under the Code, the Fund must distribute to its
shareholders for each taxable year at least 90% of its investment company
taxable income (consisting generally of net investment income, net short-term
capital gain and net gains from certain foreign currency transactions)
("Distribution Requirement") and must meet several additional requirements.
These requirements include the following: (1) the Fund must derive at least 90%
of its gross income each taxable year from dividends, interest, payments with
respect to securities loans and gains from the sale or other disposition of
securities or foreign currencies, or other income (including gains from options,
Futures or Forward Contracts) derived with respect to its business of investing
in securities or those currencies ("Income Requirement"); (2) the Fund must
derive less than 30% of its gross income each taxable year from the sale or
other disposition of securities, or any of the following, that were held for
less than three months -- options or Futures (other than those on foreign
currencies), or foreign currencies (or options, Futures or Forward Contracts
thereon) that are not directly related to the Fund's principal business of
investing in securities (or options and Futures with respect to securities)
("Short-Short Limitation"); (3) at the close of each quarter of the Fund's
taxable year, at least 50% of the value of its total assets must be represented
by cash and cash items, U.S. government securities, securities of other RICs and
other securities, with these other securities limited, in respect of any one
issuer, to an amount that does not exceed 5% of the value of the Fund's total
assets and that does not represent more than 10% of the issuer's outstanding
voting securities; and (4) at the close of each quarter of the Fund's taxable
year, not more than 25% of
Statement of Additional Information Page 27
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
the value of its total assets may be invested in securities (other than U.S.
government securities or the securities of other RICs) of any one issuer.
Dividends and other distributions declared by the Fund in, and payable to
shareholders of record as of a date in, October, November or December of any
year will be deemed to have been paid by the Fund and received by the
shareholders on December 31 of that year if the distributions are paid by the
Fund during the following January. Accordingly, those distributions will be
taxed to shareholders for the year in which that December 31 falls.
A portion of the dividends from the Fund's investment company taxable income
(whether paid in cash or reinvested in additional shares) may be eligible for
the dividends-received deduction allowed to corporations. The eligible portion
may not exceed the aggregate dividends received by the Fund from U.S.
corporations. However, dividends received by a corporate shareholder and
deducted by it pursuant to the dividends-received deduction are subject
indirectly to the alternative minimum tax.
If Fund shares are sold at a loss after being held for six months or less, the
loss will be treated as long-term, instead of short-term, capital loss to the
extent of any capital gain distributions received on those shares. Investors
also should be aware that if shares are purchased shortly before the record date
for any dividend or other distribution, the shareholder will pay full price for
the shares and receive some portion of the price back as a taxable distribution.
The Fund will be subject to a nondeductible 4% excise tax ("Excise Tax") to the
extent it fails to distribute by the end of any calendar year substantially all
of its ordinary income for that year and capital gain net income for the
one-year period ending on October 31 of that year, plus certain other amounts.
FOREIGN TAXES
Dividends and interest received by the Fund may be subject to income,
withholding or other taxes imposed by foreign countries and U.S. possessions
that would reduce the yield on its securities. Tax conventions between certain
countries and the United States may reduce or eliminate these foreign taxes,
however, and many foreign countries do not impose taxes on capital gains in
respect of investments by foreign investors. If more than 50% of the value of
the Fund's total assets at the close of its taxable year consists of securities
of foreign corporations, the Fund will be eligible to, and may, file an election
with the Internal Revenue Service that will enable its shareholders, in effect,
to receive the benefit of the foreign tax credit with respect to any foreign
income taxes paid by it. Pursuant to the election, the Fund will treat those
taxes as dividends paid to its shareholders and each shareholder will be
required to (1) include in gross income, and treat as paid by him, his
proportionate share of those taxes, (2) treat his share of those taxes and of
any dividend paid by the Fund that represents income from foreign sources as his
own income from those sources, and (3) either deduct the taxes deemed paid by
him in computing his taxable income or, alternatively, use the foregoing
information in calculating the foreign tax credit against his federal income
tax. The Fund will report to its shareholders shortly after each taxable year
their respective shares of the Fund's income from sources within, and taxes paid
to, foreign countries if it makes this election.
PASSIVE FOREIGN INVESTMENT COMPANIES
The Fund may invest in the stock of "passive foreign investment companies"
("PFICs"). A PFIC is a foreign corporation that, in general, meets either of the
following tests: (1) at least 75% of its gross income is passive or (2) an
average of at least 50% of its assets produce, or are held for the production
of, passive income. Under certain circumstances, the Fund would be subject to
federal income tax on a portion of any "excess distribution" received on, of any
gain from disposition of, stock of a PFIC (collectively "PFIC income"), plus
interest thereon, even if the Fund distributed the PFIC income as a taxable
dividend to its shareholders. The balance of the PFIC income would be included
in the Fund's investment company taxable income and, accordingly, would not be
taxable to the Fund to the extent that income is distributed to its
shareholders.
If the Fund does invest in a PFIC and elects to treat the PFIC as a "qualified
electing fund" ("QEF"), then in lieu of the foregoing tax and interest
obligation, the Fund would be required to include in income each taxable year
its pro rata share of the QEF's ordinary earnings and net capital gain (the
excess of net long-term capital gain over net short-term capital loss) -- which
most likely would have to be distributed to satisfy the Distribution Requirement
and to avoid imposition of the Excise Tax -- even if those earnings and gain
were not received by the Fund. In most instances it will be very difficult, if
not impossible, to make this election because of certain requirements thereof.
Pursuant to proposed regulations, open-end RICs, such as the Fund, would be
entitled to elect to "mark-to-market" their stock in certain PFICs.
"Marking-to-market," in this context, means recognizing as gain for each taxable
year the excess, as of the end of that year, of the fair market value of each
such PFIC's stock over the adjusted basis in that stock (including
mark-to-market gain for each prior year for which an election was in effect).
Statement of Additional Information Page 28
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
NON-U.S. SHAREHOLDERS
Dividends paid by the Fund to a shareholder who, as to the United States, is a
nonresident alien individual, nonresident alien fiduciary of a trust or estate,
foreign corporation or foreign partnership ("foreign shareholder") will be
subject to U.S. withholding tax (at a rate of 30% or lower treaty rate).
Withholding will not apply if a dividend paid by the Fund to a foreign
shareholder is "effectively connected with the conduct of a U.S. trade or
business," in which case the reporting and withholding requirements applicable
to domestic shareholders will apply. Distributions of net capital gain are not
subject to withholding, but in the case of a foreign shareholder who is a
nonresident alien individual, those distributions ordinarily will be subject to
U.S. income tax at a rate of 30% (or lower treaty rate) if the individual is
physically present in the United States for more than 182 days during the
taxable year and the distributions are attributable to a fixed place of business
maintained by the individual in the United States.
OPTIONS, FUTURES AND FOREIGN CURRENCY TRANSACTIONS
The use of hedging transactions, such as selling (writing) and purchasing
options and Futures Contracts and entering into Forward Contracts, involves
complex rules that will determine, for federal income tax purposes, the
character and timing of recognition of the gains and losses the Fund realizes in
connection therewith. Gains from foreign currencies (except certain gains that
may be excluded by future regulations), and gains from the disposition of
options, Futures and Forward Contracts derived by the Fund with respect to its
business of investing in securities or foreign currencies, will qualify as
permissible income under the Income Requirement. However, income from the
disposition by the Fund of options and Futures (other than those on foreign
currencies) will be subject to the Short-Short Limitation if they are held for
less than three months. Income from the disposition by the Fund of foreign
currencies, and options, Futures and Forward Contracts on foreign currencies,
that are not directly related to the Fund's principal business of investing in
securities (or options and Futures with respect thereto) also will be subject to
the Short-Short Limitation if they are held for less than three months.
If the Fund satisfies certain requirements, any increase in value of a position
that is part of a "designated hedge" will be offset by any decrease in value
(whether realized or not) of the offsetting hedging position during the period
of the hedge for purposes of determining whether the Fund satisfies the
Short-Short Limitation. Thus, only the net gain (if any) from the designated
hedge will be included in gross income for purposes of that limitation. The Fund
intends that, when it engages in hedging transactions, it will qualify for this
treatment, but at the present time it is not clear whether this treatment will
be available for all those transactions. To the extent this treatment is not
available, the Fund may be forced to defer the closing out of certain options,
Futures, Forward Contracts or foreign currency positions beyond the time when it
otherwise would be advantageous to do so, in order for the Fund to continue to
qualify as a RIC.
Futures and Forward Contracts that are subject to section 1256 of the Code
(other than those that are part of a "mixed straddle") ("Section 1256
Contracts") and that are held by the Fund at the end of its taxable year
generally will be deemed to have been sold at market value for federal income
tax purposes. Sixty percent of any net gain or loss recognized on these deemed
sales, and 60% of any net gain or loss realized from any actual sales of Section
1256 Contracts, will be treated as long-term capital gain or loss, and the
balance will be treated as short-term capital gain or loss. Section 988 of the
Code also may apply to gains and losses from transactions in foreign currencies,
foreign-currency-denominated debt securities and options, Futures and Forward
Contracts on foreign currencies ("Section 988" gains or losses). Each Section
988 gain or loss generally is computed separately and treated as ordinary income
or loss. In the case of overlap between Sections 1256 and 988, special
provisions determine the character and timing of any income, gain or loss. The
Fund attempts to monitor Section 988 transactions to minimize any adverse tax
impact.
The foregoing is a general and abbreviated summary of certain federal tax
considerations affecting the Fund and its shareholders. Investors are urged to
consult their own tax advisers for more detailed information and for information
regarding any foreign, state and local taxes applicable to distributions
received from the Fund.
Statement of Additional Information Page 29
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
LIECHTENSTEIN GLOBAL TRUST
Liechtenstein Global Trust, formerly BIL GT Group, is composed of the Manager
and its worldwide affiliates. Other worldwide affiliates of Liechtenstein Global
Trust include LGT Bank in Liechtenstein, formerly Bank in Liechtenstein, an
international financial services institution founded in 1920. LGT Bank in
Liechtenstein has principal offices in Vaduz, Liechtenstein. Its subsidiaries
currently include LGT Bank in Liechtenstein (Deutschland) GmbH, formerly Bank in
Liechtenstein (Frankfurt) GmbH, and LGT Asset Management AG, formerly Bilfinanz
and Verwaltung AG, located in Zurich, Switzerland.
Worldwide asset management affiliates also currently include LGT Asset
Management PLC, formerly G.T. Management PLC in London, England; LGT Asset
Management Ltd., formerly G.T. Management (Asia) Ltd. in Hong Kong; LGT Asset
Management Ltd., formerly G.T. Management (Japan) in Tokyo; LGT Asset Management
Pte. Ltd., formerly G.T. Management (Singapore) PTE Ltd. located in Singapore;
LGT Asset Management Ltd., formerly G.T. Management (Australia) Ltd., located in
Sydney; and LGT Asset Management GmbH, formerly BIL Asset Management GmbH,
located in Frankfurt, Germany.
CUSTODIAN
State Street Bank and Trust Company ("State Street"), 225 Franklin Street,
Boston, Massachusetts 02110, acts as custodian of the Fund's assets. State
Street is authorized to establish and has established separate accounts in
foreign currencies and to cause securities of the Fund to be held in separate
accounts outside the United States in the custody of non-U.S. banks.
INDEPENDENT ACCOUNTANTS
The Fund's independent accountants are Coopers & Lybrand L.L.P., One Post Office
Square, Boston, Massachusetts 02109. Coopers & Lybrand L.L.P. conducts an annual
audit of the Fund, assists in the preparation of the Fund's federal and state
income tax returns and consults with the Company and the Fund as to matters of
accounting, regulatory filings, and federal and state income taxation.
The audited financial statements of the Company included in this Statement of
Additional Information have been examined by Coopers & Lybrand L.L.P., as stated
in their opinion appearing herein and are included in reliance upon such opinion
given upon the authority of said firm as experts in accounting and auditing.
USE OF NAME
The Manager has granted the Company the right to use the "GT" and "GT Global"
names and has reserved the right to withdraw its consent to the use of such
names by the Company and/or the Fund at any time, or to grant the use of such
names to any other company.
Statement of Additional Information Page 30
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
INVESTMENT RESULTS
- --------------------------------------------------------------------------------
The Fund's "Standardized Return," as referred to in the Prospectus (see "Other
Information -- Performance Information in the Prospectus"), is calculated
separately for Class A, Class B and Advisor Class shares of the Fund, as
follows: Standardized Return ("T") is computed by using the value at the end of
the period ("EV") of a hypothetical initial investment of $1,000 ("P") over a
period of years ("n") according to the following formula as required by the SEC:
P(1+T)(n) = EV. The following assumptions will be reflected in computations made
in accordance with this formula: (1) for Class A shares deduction of the maximum
sales charge of 4.75% from the $1,000 initial investment; (2) for Class B
shares, deduction of the applicable contingent deferred sales charge imposed on
a redemption of Class B shares held for the period; (3) reinvestment of
dividends and other distributions at net asset value on the reinvestment date
determined by the Board and (4) a complete redemption at the end of any period
illustrated.
The Fund's Standardized Returns for its Class A shares, stated as average
annualized total returns, for the periods shown were as follows:
<TABLE>
<CAPTION>
PERIOD STANDARDIZED RETURN
- ---------------------------------------------------------------------------------------------------- ---------------------
<S> <C>
Year ended October 31, 1995......................................................................... 1.22%
October 31, 1990 to October 31, 1995................................................................ 9.85%
September 25, 1990 (commencement of operations) through October 31, 1995............................ 9.69%
</TABLE>
The Fund's Standardized Returns for its Class B shares, which were first offered
on October 22, 1992, stated as average annualized total returns for the periods
shown, were:
<TABLE>
<CAPTION>
PERIOD STANDARDIZED RETURN
- -------------------------------------------------------------------------------------------------- ---------------------
<S> <C>
Year ended October 31, 1995....................................................................... 0.57%
October 22, 1992 (commencement of operations) to October 31, 1995................................. 9.41%
</TABLE>
"Non-Standardized Return," as referred to in the Prospectus, is calculated for a
specified period of time by assuming the investment of $1,000 in Fund shares and
further assuming the reinvestment of all dividends and other distributions made
to Fund shareholders in additional Fund shares at their net asset value.
Percentage rates of return are then calculated by comparing this assumed initial
investment to the value of the hypothetical account at the end of the period for
which the Non-Standardized Return is quoted. As discussed in the Prospectus, the
Fund may quote non-standardized total returns that do not reflect the effect of
sales charges. Non-Standardized Returns may be quoted from the same or different
time periods for which Standardized Returns are quoted. The Fund's
Non-Standardized Returns for its Class A shares, stated as aggregate total
returns, at October 31, 1995, were as follows:
<TABLE>
<CAPTION>
NON-STANDARDIZED
PERIOD AGGREGATE TOTAL RETURN
- ------------------------------------------------------------------------------------------------ -----------------------
<S> <C>
Year ended October 31, 1995..................................................................... 6.27%
September 25, 1990 (commencement of operations) through October 31, 1995........................ 68.31%
</TABLE>
The Fund's Non-Standardized Returns for its Class B shares which were first
offered on October 22, 1992, stated as aggregate total returns, for the periods
shown, were as follows:
<TABLE>
<CAPTION>
PERIOD AGGREGATE TOTAL RETURN
- ------------------------------------------------------------------------------------------------ -----------------------
<S> <C>
Year ended October 31, 1995..................................................................... 0.57%
October 22, 1992 (commencement of operations) through October 31, 1995.......................... 31.27%
</TABLE>
The Fund's Non-Standardized Returns for its Class A shares, stated as average
annualized total returns for the periods shown, were as follows:
<TABLE>
<CAPTION>
NON-STANDARDIZED
AVERAGE ANNUALIZED
PERIOD TOTAL RETURN
- --------------------------------------------------------------------------------------------------- ---------------------
<S> <C>
Year ended October 31, 1995........................................................................ 6.27%
October 31, 1990 to October 31, 1995............................................................... 10.93%
September 25, 1990 (commencement of operations) through October 31, 1995........................... 10.75%
</TABLE>
Statement of Additional Information Page 31
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
The Fund's Non-Standardized Returns for its Class B shares which were first
offered on October 22, 1992, stated as average annualized total returns for the
periods shown, were as follows:
<TABLE>
<CAPTION>
PERIOD NON-STANDARDIZED RETURN
- ---------------------------------------------------------------------------------------------- -------------------------
<S> <C>
Year ended October 31, 1995................................................................... 5.57%
October 22, 1992 (commencement of operations) through October 31, 1995........................ 10.23%
</TABLE>
IMPORTANT POINTS TO NOTE ABOUT DATA RELATING TO WORLD EQUITY AND BOND MARKETS
Information relating to foreign market performance, capitalization and
diversification is based on sources believed to be reliable, but which may be
subject to revision and which has not been independently verified by the Company
or GT Global. The authors and publishers of such material are not to be
considered as "experts" under the Securities Act of 1933, on account of the
inclusion of such information herein.
GT Global believes that this information may be useful to investors considering
whether and to what extent to diversify their investments through the purchase
of mutual funds investing in securities on a global basis. However, this data is
not a representation of the past performance of any of these Funds, nor is it a
prediction of such performance. The performance of the Funds will differ from
the historical performance of relevant indices. The performance of indices does
not take expenses into account, while each Fund incurs expenses in its
operations, which will reduce performance. Each Fund is actively managed, I.E.,
the Manager, as each Fund's investment manager, actively purchases and sells
securities in seeking each Fund's investment objective. Moreover, each Fund may
invest a portion of its assets in corporate bonds, while certain indices relate
only to government bonds. Each of these factors will cause the performance of
each Fund to differ from relevant indices.
In addition, GT Global may in its radio, television and other advertising,
employ the use of sound effects such as, for example, sounds of electronic data
being communicated.
The Fund and GT Global may from time to time compare the Fund with the
following:
(1) Various Salomon Brothers World Bond Indices, which measure the total
return performance of high quality non-U.S. dollar denominated securities in
major sectors of the worldwide bond markets.
(2) The Lehman Brothers Government/Corporate Bond Index, which is a
comprehensive measure of all public obligations of the U.S. Treasury
(excluding flower bonds and foreign targeted issues), all publicly issued
debt of agencies of the U.S. Government (excluding mortgage-backed
securities), and all public, fixed rate, non-convertible investment grade
domestic corporate debt rated at least Baa by Moody's Investors Service Inc.
or BBB by Standard and Poor's, or, in the case of nonrated bonds, BBB by
Fitch Investors Service (excluding Collateralized Mortgage Obligations).
(3) Average of Savings Accounts, which is a measure of all kinds of
savings deposits, including longer-term certificates. Savings accounts offer
a guaranteed rate of return on principal, but no opportunity for capital
growth. During a portion of the period, the maximum rates paid on some
savings deposits were fixed by law.
(4) The Consumer Price Index, which is a measure of the average change
in prices over time in a fixed market basket of goods and services (e.g.,
food, clothing, shelter, fuels, transportation fares, charges for doctors'
and dentists' services, prescription medicines, and other goods and services
that people buy for day-to-day living).
(5) Data and mutual fund rankings and comparisons published or prepared
by Lipper Analytical Data Services, Inc. ("Lipper"), CDA/Wiesenberger
Investment Company Services ("CDA/Wiesenberger") and/or other companies that
rank or compare mutual funds by overall performance, investment objectives,
assets, expense levels, periods of existence and/or other factors. In this
regard, the Fund may be compared to the Fund's "peer group" as defined by
Lipper, CDA/Wiesenberger and/or other firms, as applicable, or to specific
funds or groups of funds within or without such peer group. Morningstar is a
mutual fund rating service that also rates mutual funds on the basis of
risk-adjusted performance. Morningstar ratings are calculated from a fund's
three, five and ten year average annual returns with appropriate fee
adjustments and a risk factor that reflects fund performance relative to the
three-month U.S. Treasury bill monthly returns. Ten percent of the funds in
an investment category receive five stars and 22.5% receive four stars. The
ratings are subject to change each month.
(6) Bear Stearns Foreign Bond Index, which provides simple average
returns for individual countries and GNP-weighted index, beginning in 1975.
The returns are broken down by local market and currency.
(7) Ibbottson Associates International Bond Index, which provides a
detailed breakdown of local market and currency returns since 1960.
Statement of Additional Information Page 32
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GT GLOBAL GROWTH & INCOME FUND
(8) Standard & Poor's 500 Composite Stock Price Index which is a widely
recognized index composed of the capitalization-weighted average of the
price of 500 of the largest publicly traded stocks in the U.S.
(9) Salomon Brothers Broad Investment Grade Index which is a widely used
index composed of U.S. domestic government, corporate and mortgage-backed
fixed income securities.
(10) Dow Jones Industrial Average.
(11) CNBC/Financial News Composite Index.
(12) Morgan Stanley Capital International World Indices, including, among
others, the Morgan Stanley Capital International Europe, Australia, Far East
Index ("EAFE Index"). The EAFE index is an unmanaged index of more than
1,000 companies of Europe, Australia and the Far East.
(13) Salomon Brothers World Government Bond Index and Salomon Brothers
World Government Bond Index-Non-U.S. are each a widely used index composed
of world government bonds.
(14) The World Bank Publication of Trends in Developing Countries (TIDE)
provides brief reports on most of the World Bank's borrowing members. The
World Development Report is published annually and looks at global and
regional economic trends and their implications for the developing
economies.
(15) Salomon Brothers Global Telecommunications Index is composed of
telecommunications companies in the developing and emerging countries.
(16) Datastream and Worldscope each is an on-line database retrieval
service for information including but not limited to international financial
and economic data.
(17) International Financial Statistics, which is produced by the
International Monetary Fund.
(18) Various publications and annual reports such as the World
Development Report, produced by the World Bank and its affiliates.
(19) Various publications from the International Bank for Reconstruction
and Development/The World Bank.
(20) Various publications including but not limited to ratings agencies
such as Moody's Investors Services, Fitch Investors Service, Standard &
Poor's.
(21) Wilshire Associates which is an on-line database for international
financial and economic data including performance measure for a wide range
of securities.
(22) Bank Rate National Monitor Index, which is an average of the quoted
rates for 100 leading banks and thrifts in ten U.S. cities.
(23) International Finance Corporation (IFC) Emerging Markets Data Base
which provides detailed statistics on stock and bond markets in developing
countries.
(24) Various publications from the Organization for Economic Cooperation
and Development (OECD).
Indices, economic and financial data prepared by the research departments of
such financial organizations as Salomon Brothers, Inc., Lehman Brothers, Merrill
Lynch, Pierce, Fenner & Smith, Inc. J. P. Morgan, Morgan Stanley, Smith Barney,
S.G. Warburg, Jardine Flemming, The Bank for International Settlements, Asian
Development Bank, Bloomberg, L.P. and Ibbottson Associates may be used as well
as information reported by the Federal Reserve and the respective Central Banks
of various nations. In addition, performance rankings, ratings and commentary
reported periodically in national financial publications, included but not
limited to Money Magazine, Smart Money, Global Finance, EuroMoney, Financial
World, Forbes, Fortune, Business Week, Latin Finance, the Wall Street Journal,
Emerging Markets Weekly, Kiplinger's Guide To Personal Finance, Barron's, The
Financial Times, USA Today, The New York Times, Far Eastern Economic Review, The
Economist and Investors Business Digest. Each Fund may compare its performance
to that of other compilations or indices of comparable quality to those listed
above and other indices which may be developed and made available.
From time to time, the Fund and GT Global may refer to the number of
shareholders in the Fund or the aggregate number of shareholders in all GT
Global Mutual Funds or the dollar amount of Fund assets under management or
rankings by DALBAR Surveys, Inc. in advertising materials.
Statement of Additional Information Page 33
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
GT Global believes the Fund is an appropriate investment for long-term
investment goals including, but not limited to funding retirement, paying for
education or purchasing a house. The Fund does not represent a complete
investment program and the investors should consider the Fund as appropriate for
a portion of their overall investment portfolio with regard to their long-term
investment goals.
GT Global believes that a growing number of consumer products, including, but
not limited to home appliances, automobiles and clothing, purchased by Americans
are manufactured abroad. GT Global believes that investing globally in the
companies that produce products for U.S. consumers can help U.S. investors seek
protection of the value of their assets against the potentially increasing costs
of foreign manufactured goods. Of course, there can be no assurance that there
will be any correlation between global investing and the costs of such foreign
goods unless there is a corresponding change in value of the U.S. dollar to
foreign currencies. From time to time, GT Global may refer to or advertise the
names of such companies although there can be no assurance that any GT Global
Mutual Fund may own the securities of these companies.
The Fund may compare its performance to that of other compilations or indices of
comparable quality to those listed above which may be developed and made
available in the future. The Fund may be compared in advertising to Certificates
of Deposit (CDs), the Bank Rate Monitor National Index, an average of the quoted
rates for 100 leading banks and thrifts in ten U.S. cities chosen to represent
the ten largest Consumer Metropolitan statistical areas, or other investments
issued by banks. The Fund differs from bank investments in several respects. The
Fund may offer greater liquidity or higher potential returns than CDs; but
unlike CDs, the Fund will have a fluctuating share price and return and is not
FDIC insured.
The Fund's performance may be compared to the performance of other mutual funds
in general, or to the performance of particular types of mutual funds. These
comparisons may be expressed as mutual fund rankings prepared by Lipper
Analytical Services, Inc. (Lipper), an independent service which monitors the
performance of mutual funds. Lipper generally ranks funds on the basis of total
return, assuming reinvestment of distributions, but does not take sales charges
or redemption fees into consideration, and is prepared without regard to tax
consequences. In addition to the mutual fund rankings, the Fund's performance
may be compared to mutual fund performance indices prepared by Lipper.
GT Global may provide information designed to help individuals understand their
investment goals and explore various financial strategies. For example, GT
Global may describe general principles of investing, such as asset allocation,
diversification and risk tolerance.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical returns
of the capital markets in the United States, including common stocks, small
capitalization stocks, long-term corporate bonds, intermediate-term government
bonds, long-term government bonds, Treasury bills, the U.S. rate of inflation
(based on the CPI), and combinations of various capital markets. The performance
of these capital markets is based on the returns of different indices.
GT Global Mutual Funds may use the performance of these capital markets in order
to demonstrate general risk-versus-reward investment scenarios. Performance
comparisons may also include the value of a hypothetical investment in any of
these capital markets. The risks associated with the security types in any
capital market may or may not correspond directly to those of the funds.
Ibbotson calculates total returns in the same method as the funds. The funds may
also compare performance to that of other compilations or indices that may be
developed and made available in the future.
In advertising materials, GT Global may reference or discuss its products and
services, which may include: retirement investing; the effects of dollar-cost
averaging and saving for college or a home. In addition, GT Global may quote
financial or business publications and periodicals, including model portfolios
or allocations, as they relate to fund management, investment philosophy, and
investment techniques.
The Fund may discuss its Quotron number, CUSIP number, and its current portfolio
management team.
From time to time, the Fund's performance also may be compared to other mutual
funds tracked by financial or business publications and periodicals. For
example, the fund may quote Morningstar, Inc. in its advertising materials.
Morningstar, Inc. is a mutual fund rating service that rates mutual funds on the
basis of risk-adjusted performance. In addition, the Fund may quote financial or
business publications and periodicals as they relate to fund management,
investment philosophy, and investment techniques. Rankings that compare the
performance of GT Global Mutual Funds to one another in appropriate categories
over specific periods of time may also be quoted in advertising.
The Fund may quote various measures of volatility and benchmark correlation such
as beta, standard deviation and R(2) in advertising. In addition, the Fund may
compare these measures to those of other funds. Measures of volatility seek to
Statement of Additional Information Page 34
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
compare the Fund's historical share price fluctuations or total returns compared
to those of a benchmark. All measures of volatility and correlation are
calculated using averages of historical data.
The Fund may advertise examples of the effects of periodic investment plans,
including the principle of dollar cost averaging. In such a program, an investor
invests a fixed dollar amount in a fund at periodic intervals, thereby
purchasing fewer shares when prices are high and more shares when prices are
low. While such a strategy does not assure a profit or guard against loss in a
declining market, the investor's average cost per share can be lower than if
fixed numbers of shares are purchased at the same intervals. In evaluating such
a plan, investors should consider their ability to continue purchasing shares
through periods of low price levels.
The Fund may be available for purchase through retirement plans or other
programs offering deferral of or exemption from income taxes, which may produce
superior after tax returns over time. For example, a $10,000 investment earning
a taxable return of 10% annually would have an after-tax value of $17,976 after
ten years, assuming tax was deducted from the return each year at a 39.6% rate.
An equivalent tax-deferred investment would have an after-tax value of $19,626
after ten years, assuming tax was deducted at a 39.6% rate from the deferred
earnings at the end of the ten-year period.
The Fund may describe in its sales material and advertisements how an investor
may invest in the GT Global Mutual Funds through various retirement accounts and
plans that offer deferral of income taxes on investment earnings and may also
enable you to make pre-tax contributions. Because of their advantages, these
retirement accounts and plans may produce returns superior to comparable
non-retirement investments. The Fund may also discuss these accounts and plans,
which include:
INDIVIDUAL RETIREMENT ACCOUNTS (IRAS): Any individual who receives earned income
from employment (including self-employment) can contribute up to $2,000 each
year to an IRA (or, if less, 100% of compensation). If your spouse is not
employed, a total of $2,250 may be contributed each year to IRAs set up for you
or your spouse (subject to the maximum of $2,000 to either IRA). Some
individuals may be able to take an income tax deduction for the contribution.
Regular contributions may not be made for the year you become 70 1/2, or
thereafter. Please consult your tax advisor for more information.
ROLLOVER IRAS: Individuals who receive distributions from qualified retirement
plans (other than required distributions) and who wish to keep their savings
growing tax-deferred can rollover (or make a direct transfer of) their
distribution to a Rollover IRA. These accounts can also receive roll overs or
transfers from an existing IRA.
SEP-IRAS AND SALARY-REDUCTION SEP-IRAS: Simplified employee pension (SEP) plans
and salary-reduction SEPs provide self-employed individuals (and any eligible
employees) with benefits similar to Keogh-type plans or 401(k) plans, but with
fewer administrative requirements and therefore lower annual administration
expenses.
403(B)(7) CUSTODIAL ACCOUNTS: Employees of public schools and most other
not-for-profit corporations can make pre-tax salary reduction contributions to
these accounts.
PROFIT-SHARING (INCLUDING 401(K)) AND MONEY PURCHASE PENSION PLANS: Corporations
can sponsor these qualified defined contribution plans for their employees.
401(k) plans, a type of profit-sharing plan, additionally permit the eligible,
participating employees to make pre-tax salary reduction contributions to the
plan (up to certain limitations).
GT Global may from time to time in its sales methods and advertising discuss the
risks inherent in investing. The major types of investment risk are market risk,
industry risk, credit risk, interest rate risk and inflation risk. Risk
represents the possibility that you may lose some or all of your investment over
a period of time. A basic tenet of investing is the greater the potential
reward, the greater the risk.
From time to time, the Fund and GT Global will quote information including but
not limited to data regarding: individual countries, regions, world stock
exchanges, and economic and demographic statistics from sources GT Global deems
reliable including, but not limited to, the economic and financial data of the
referenced financial organizations such as:
1) Stock market capitalization: Morgan Stanley Capital International World
Indices, International Finance Corporation and Datastream.
2) Stock market trading volume: Morgan Stanley Capital International Industry
Indices, International Finance Corporation.
3) The number of listed companies: International Finance Corporation, G.T.
Guide to World Equity Markets, Salomon Brothers, Inc., and S.G. Warburg.
4) Wage rates: U.S. Department of Labor Statistics and Morgan Stanley Capital
International World Indices.
Statement of Additional Information Page 35
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
5) International industry performance: Morgan Stanley Capital International
World Indices, Wilshire Associates and Salomon Brothers, Inc.
6) Stock market performance: Morgan Stanley Capital International World
Indices, International Finance Corporation and Datastream.
7) The Consumer Price Index and inflation rate: The World Bank, Datastream and
International Finance Corporation.
8) Gross Domestic Product (GDP): Datastream and The World Bank.
9) GDP growth rate: International Finance Corporation, The World Bank and
Datastream.
10) Population: The World Bank, Datastream and United Nations.
11) Average annual growth rate (%) of population: The World Bank, Datastream and
United Nations.
12) Age distribution within populations: Organization for Economic Cooperation
and Development and United Nations.
13) Total exports and imports by year: International Finance Corporation, The
World Bank and Datastream.
14) Top three companies by country, industry or market: International Finance
Corporation, G.T. Guide to World Equity Markets, Salomon Brothers Inc., and
S.G. Warburg.
15) Foreign direct investments to developing countries: The World Bank and
Datastream.
17) Standard deviation and performance returns for U.S. and non-U.S. equity and
bond markets: Morgan Stanley Capital International.
18) Countries restructuring their debt, including those under the Brady Plan:
The Manager.
19) Political and economic structure of countries: Economist Intelligence Unit.
20) Government and corporate bonds -- credit ratings, yield to maturity and
performance returns: Salomon Brothers, Inc.
21) Dividend yields for U.S. and non-U.S. companies: Bloomberg.
In advertising and sales materials, GT Global may make reference to or discuss
its products, services and accomplishments. Among these accomplishments are that
in 1983 the Manager provided assistance to the government of Hong Kong in
linking its currency to the U.S. dollar, and that in 1987 Japan's Ministry of
Finance licensed LGT Asset Management Ltd. as one of the first foreign
discretionary investment managers for Japanese investors. Such accomplishments,
however, should not be viewed as an endorsement of the Manager by the government
of Hong Kong, Japan's Ministry of Finance or any other government or government
agency. Nor do any such accomplishments of the Manager provide any assurance
that the GT Global Mutual Funds' investment objectives will be achieved.
THE GT ADVANTAGE
The Manager has developed a unique team approach to its global money management
which we call the GT Advantage. The Manager's money management style combines
the best of the "top-down" and "bottom-up" investment manager strategies. The
top-down approach is implemented by the Manager's Investment Policy Committee
which sets broad guidelines for asset allocation and currency management based
on the Manager's own macroeconomic forecasts and research from our worldwide
offices. The bottom-up approach utilizes regional teams of individual portfolio
managers to implement the committee's guidelines by selecting local securities
that offer strong growth and income potential.
Statement of Additional Information Page 36
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
DESCRIPTION OF DEBT RATINGS
- --------------------------------------------------------------------------------
DESCRIPTION OF BOND RATINGS
MOODY'S INVESTORS SERVICE, INC. ("Moody's") rates the debt securities issued
by various entities from "Aaa" to "C". Investment grade ratings are the first
four categories:
Aaa -- Best quality. These securities carry the smallest degree of
investment risk and are generally referred to as "gilt edge." Interest
payments are protected by a large or exceptionally stable margin, and
principal is secure. While the various protective elements are likely to
change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa -- High quality by all standards. They are rated lower than the best
bond because margins of protection may not be as large as in Aaa securities,
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risk appear somewhat
greater.
A -- Upper medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
Baa -- Medium grade obligations. Interest payments and principal
security appear adequate for the present but certain protective elements may
be lacking or may be characteristically unreliable over any great length of
time. Such bonds lack outstanding investment characteristics and in fact
have speculative characteristics as well.
Ba -- Have speculative elements and their future cannot be considered to
be well assured. Often the protection of interest and principal payments may
be very moderate, and thereby not well safeguarded during other good and bad
times over the future. Uncertainty of position characterizes bonds in this
class.
B -- Generally lack characteristics of the desirable investment.
Assurance of interest and principal payments or of maintenance of other
terms of the contract over any long period of time may be small.
Caa -- Poor standing. Such issues may be in default or there may be
present elements of danger with respect to principal or interest.
Ca -- Speculative in a high degree. Such issues are often in default or
have other marked shortcomings.
C -- Lowest rated class of bonds. Issues so rated can be regarded as
having extremely poor prospects of ever attaining any real investment
standing.
ABSENCE OF RATING: Where no rating has been assigned or where a rating has been
suspended or withdrawn, it may be for reasons unrelated to the quality of the
issue.
Should no rating be assigned, the reason may be one of the following:
1. An application for rating was not received or accepted.
2. The issue or issuer belongs to a group of securities or companies that are
not rated as a matter of policy.
3. There is a lack of essential data pertaining to the issue or issuer.
4. The issue was privately placed, in which case the rating is not published in
Moody's publications.
Suspension or withdrawal may occur if new and material circumstances arise, the
effects of which preclude satisfactory analysis; if there is no longer available
reasonable up-to-date data to permit a judgment to be formed; if a bond is
called for redemption; or for other reasons.
Note: Moody's applies numerical modifiers 1, 2 and 3 in each generic rating
classification from Aa to B in its corporate bond rating system. The modifier 1
indicates that the Company ranks in the higher end of its generic rating
category; the modifier 2 indicates a mid-range ranking; and the modifier 3
indicates that the issue ranks in the lower end of its generic rating category.
Statement of Additional Information Page 37
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
STANDARD & POOR'S RATINGS GROUP ("S&P") rates the securities debt of various
entities in categories ranging from "AAA" to "DD" according to quality.
Investment grade ratings are the first four categories:
AAA -- Highest rating. Capacity to pay interest and repay principal is
extremely strong.
AA -- High grade. Very strong capacity to pay interest and repay
principal. Generally, these bonds differ from AAA issues only in a small
degree.
A -- Have a strong capacity to pay interest and repay principal although
they are somewhat more susceptible to the adverse effects of change in
circumstances and economic conditions than debt in higher rated categories.
BBB -- Regarded as having adequate capacity to pay interest and repay
principal. These bonds normally exhibit adequate protection parameters, but
adverse economic conditions or changing circumstances are more likely to
lead to a weakened capacity to pay interest and repay principal than for
debt in higher rated categories.
BB, B, CCC, CC, C -- Debt rated "BB," "B," "CCC," "CC," and "C" are
regarded, on balance, as predominantly speculative with respect to capacity
to pay interest and repay principal in accordance with the terms of this
obligation. "BB" indicates the lowest degree of speculation and "C" the
highest degree of speculation. While such debt will likely have some quality
and protective characteristics, these are outweighed by large uncertainties
or major risk exposures to adverse conditions.
BB -- Has less near-term vulnerability to default than other speculative
issues; however, it faces major ongoing uncertainties or exposure to adverse
business, financial or economic conditions which could lead to inadequate
capacity to meet timely interest and principal payments. The "BB" rating
category is also used for debt subordinated to senior debt that is assigned
an actual or implied "BBB-" rating.
B -- Has a greater vulnerability to default but currently has the
capacity to meet interest payments and principal repayments. Adverse
business, financial or economic conditions will likely impair capacity or
willingness to pay interest and repay principal. The "B" rating category is
also used for debt subordinated to senior debt that is assigned an actual or
implied "BB" or "BB-" rating.
CCC -- Has a currently indefinable vulnerability to default, and is
dependent upon favorable business, financial and economic conditions to meet
timely payment of interest and repayment of principal. In the event of
adverse business, financial or economic conditions, it is not likely to have
the capacity to pay interest and repay principal. The "CCC" rating category
is also used for debt subordinated to senior debt that is assigned an actual
or implied "B" or "B-" rating.
CC -- Typically applied to debt subordinated to senior debt that is
assigned an actual or implied "CCC" rating.
C -- Typically applied to debt subordinated to senior debt which is
assigned an actual or implied "CCC-" debt rating. The "C" rating may be used
to cover a situation where a bankruptcy petition has been filed, but debt
service payments are continued.
C -- Reserved for income bonds on which no interest is being paid.
D -- In payment default. The "D" rating is used when interest payments
are not made on the date due even if the applicable grace period has not
expired, unless S&P believes that such payments will be made during such
grace period. The "D" rating also will be used upon the filing of a
bankruptcy petition if debt service payments are jeopardized.
PLUS (+) OR MINUS (-): The ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
NR: Indicates that no public rating has been requested, that there is
insufficient information on which to base a rating, or that S&P does not rate a
particular type of obligation as a matter of policy.
DESCRIPTION OF COMMERCIAL PAPER RATINGS
MOODY'S employs the designations "Prime-1" and "Prime-2" to indicate
commercial paper having the highest capacity for timely repayment. Issuers rated
Prime-1 have a superior capacity for repayment of short-term promissory
obligations. Prime-1 repayment capacity normally will be evidenced by the
following characteristics: leading market positions in well-established
industries; high rates of return on funds employed; conservative capitalization
structures with moderate reliance on debt and ample asset protections; broad
margins in earnings coverage of fixed financial charges and high internal cash
generation; and well-established access to a range of financial markets and
assured sources of alternate liquidity. Issues rated Prime-2 have a strong
capacity for repayment of short-term promissory obligations. This normally will
be evidenced by many of the characteristics cited above, but to a lesser degree.
Earnings trends and coverage ratios,
Statement of Additional Information Page 38
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
while sound, will be more subject to variation. Capitalization characteristics,
while still appropriate, may be more affected by external conditions. Ample
alternate liquidity is maintained.
S&P ratings of commercial paper are graded into four categories ranging from
"A" for the highest quality obligations to "D" for the lowest. A -- Issues
assigned its highest rating are regarded as having the greatest capacity for
timely payment. Issues in this category are delineated with numbers 1, 2, and 3
to indicate the relative degree of safety. A-1 -- This designation indicates
that the degree of safety regarding timely payment is either overwhelming or
very strong. Those issues determined to possess overwhelming safety
characteristics will be denoted with a plus (++) sign designation. A-2 --
Capacity for timely payments on issues with this designation is strong; however,
the relative degree of safety is not as high as for issues designated "A-1."
COMMERCIAL PAPER RATINGS
The Fund may invest only in high quality commercial paper, i.e. commercial paper
rated Prime-1 by Moody's, A-1 by S&P, or, if unrated, judged by the Manager to
be of comparable quality. Issuers rated Prime-1 by Moody's have, in Moody's
judgment, a superior capacity for repayment of short-term debt obligations.
Prime-1 repayment capacity will normally be evidenced by the following
characteristics: leading market positions in well-established industries; high
rates of return on funds employed; conservative capitalization structures with
moderate reliance on debt and ample asset protections; broad margins in earnings
coverage of fixed financial charges and high internal cash generation; and
well-established access to a range of financial markets and assured sources of
alternate liquidity. Issues assigned the A-1 rating by S&P are regarded by S&P
as having the greatest capacity for timely payment. This designation indicates
that the degree of safety regarding timely payment is either overwhelming or
very strong.
Statement of Additional Information Page 39
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The audited financial statements of the Fund as of October 31, 1995, and for its
fiscal year then-ended appear on the following pages.
Statement of Additional Information Page 40
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
REPORT OF
INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
ANNUAL REPORT
To the Shareholders of GT Global Growth & Income Fund and Board of Directors of
G.T. Investment Funds, Inc.:
We have audited the accompanying statement of assets and liabilities of GT
Global Growth & Income Fund, one of the funds organized as a series of G.T.
Investment Funds, Inc., including the portfolio of investments, as of October
31, 1995, and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the five years in the period
then ended. These financial statements and the financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and the financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1995 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of GT
Global Growth & Income Fund as of October 31, 1995, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the five years in the period then ended, in conformity with generally accepted
accounting principles.
COOPERS & LYBRAND L.L.P.
BOSTON, MASSACHUSETTS
DECEMBER 15, 1995
Statement of Additional Information Page 41
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
PORTFOLIO OF INVESTMENTS
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Country Shares Value Assets {d}
- ---------------------------------------------------------- -------- -------------- ------------ -------------
<S> <C> <C> <C> <C>
Finance (24.5%)
Swiss Bank Corp. - Bearer .............................. SWTZ 34,795 $ 14,287,135 2.2
BANKS-MONEY CENTER
Union Bank of Switzerland - Bearer .................... SWTZ 10,652 11,544,594 1.8
BANKS-MONEY CENTER
National Australia Bank Ltd. ........................... AUSL 1,309,437 11,207,792 1.7
BANKS-MONEY CENTER
CS Holding AG - Registered ............................ SWTZ 98,500 10,067,847 1.6
BANKS-MONEY CENTER
AEGON N.V. ............................................. NETH 189,852 7,206,676 1.1
INSURANCE-LIFE
First Tennessee National Corp. ......................... US 122,700 6,564,450 1.0
BANKS-REGIONAL
Internationale Nederlanden Groep N.V. ................. NETH 105,705 6,303,448 1.0
OTHER FINANCIAL
Mercury Asset Management Group PLC ..................... UK 397,698 5,804,870 0.9
INVESTMENT MANAGEMENT
American General Corp. ................................. US 170,000 5,588,750 0.9
INSURANCE-LIFE
Deutsche Bank AG ....................................... GER 112,500 5,089,800 0.8
BANKS-MONEY CENTER
ABN AMRO Holding N.V. .................................. NETH 115,974 4,872,672 0.8
BANKS-REGIONAL
MAI PLC: .............................................. UK -- -- 0.7
OTHER FINANCIAL
Convertible Preferred, 5.9% till 12/31/49 ............ -- 1,463,200 2,798,280 --
Common ............................................... -- 374,000 1,932,954 --
National Westminster Bank PLC ......................... UK 471,800 4,705,323 0.7
BANKS-MONEY CENTER
IKB Deutsche Industriebank AG ......................... GER 23,600 4,418,816 0.7
BANKS-REGIONAL
Generale de Banque S.A. ................................ BEL 13,420 4,343,402 0.7
BANKS-MONEY CENTER
Lloyds Abbey Life PLC ................................. UK 599,000 4,336,052 0.7
INSURANCE-LIFE
General Accident PLC ................................... UK 400,000 4,071,440 0.6
INSURANCE - PROPERTY-CASUALTY
Sun Hung Kai Properties Ltd. ........................... HK 494,500 3,949,629 0.6
REAL ESTATE
Dresdner Bank AG ....................................... GER 132,350 3,536,105 0.6
BANKS-MONEY CENTER
Commercial Union PLC ................................... UK 361,550 3,514,355 0.6
INSURANCE - MULTI-LINE
Fortis Amev N.V. ....................................... NETH 54,017 3,392,322 0.5
OTHER FINANCIAL
Kredietbank N.V. ....................................... BEL 12,980 3,258,465 0.5
BANKS-REGIONAL
M & G Group PLC ........................................ UK 155,000 3,197,013 0.5
INVESTMENT MANAGEMENT
Sparebanken NOR (Union Bank of Norway) ................. NOR 112,000 2,968,293 0.5
BANKS-REGIONAL
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 42
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Country Shares Value Assets {d}
- ---------------------------------------------------------- -------- -------------- ------------ -------------
<S> <C> <C> <C> <C>
Finance (Continued)
Gerrard & National Holdings PLC ........................ UK 375,880 $ 2,631,813 0.4
SECURITIES BROKER
Henderson Investment Ltd. .............................. HK 2,691,000 2,192,842 0.3
REAL ESTATE
Banco de Santander S.A. ............................... SPN 48,750 2,127,389 0.3
BANKS-MONEY CENTER
Bank of Montreal ...................................... CAN 88,000 1,954,752 0.3
BANKS-REGIONAL
Hopewell Holdings ..................................... HK 2,631,000 1,659,008 0.3
REAL ESTATE
Amoy Properties Ltd. .................................. HK 1,581,500 1,523,978 0.2
REAL ESTATE
Societe Generale Paris ................................. FR 12,280 1,404,218 0.2
BANKS-MONEY CENTER
Banco Popular Espanol S.A. ............................. SPN 7,880 1,253,328 0.2
BANKS-MONEY CENTER
UAP Compagnie .......................................... FR 42,367 1,100,667 0.2
INSURANCE - MULTI-LINE
Compagnie Financiere de Paribas S.A. ................... FR 18,332 1,008,757 0.2
OTHER FINANCIAL
Realty Development Corp., Ltd. "A" .................... HK 280,000 800,393 0.1
REAL ESTATE
Commerzbank AG ......................................... GER 2,250 520,891 0.1
BANKS-MONEY CENTER
------------
157,138,519
------------
Energy (11.4%)
Elektrowatt AG ......................................... SWTZ 45,508 13,753,850 2.1
ELECTRICAL & GAS UTILITIES
Royal Dutch Petroleum Co. .............................. NETH 80,550 9,999,838 1.6
OIL
Electrabel S.A. ........................................ BEL 34,760 7,812,586 1.2
ELECTRICAL & GAS UTILITIES
Exxon Corp. ............................................ US 91,300 6,973,038 1.1
OIL
Pacific Gas and Electric Co. ........................... US 220,000 6,462,500 1.0
ELECTRICAL & GAS UTILITIES
Mobil Corp. ............................................ US 63,800 6,427,850 1.0
OIL
Reunies Electrobel & Tractebel S.A. .................... BEL 11,587 4,246,964 0.7
ELECTRICAL & GAS UTILITIES
Groupe Bruxelles Lambert S.A. .......................... BEL 31,025 4,001,496 0.6
OIL
Shell Transport & Trading Co., PLC ..................... UK 324,700 3,792,529 0.6
OIL
Elf Aquitaine .......................................... FR 52,475 3,574,547 0.6
OIL
British Gas PLC ........................................ UK 859,500 3,273,898 0.5
GAS PRODUCTION & DISTRIBUTION
Iberdrola S.A. ........................................ SPN 134,000 1,011,238 0.2
ELECTRICAL & GAS UTILITIES
Union Electrica Fenosa S.A. ............................ SPN 206,000 959,790 0.2
ELECTRICAL & GAS UTILITIES
Groupe Bruxelles Lambert S.A. - VVPR ................... BEL 742 95,701 --
OIL
------------
72,385,825
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 43
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Country Shares Value Assets {d}
- ---------------------------------------------------------- -------- -------------- ------------ -------------
<S> <C> <C> <C> <C>
Materials/Basic Industries (8.1%)
Broken Hill Proprietary Co., Ltd. ...................... AUSL 939,403 $ 12,718,996 2.0
MISC. MATERIALS & COMPONENTS
Amcor Ltd. ............................................. AUSL 1,121,546 8,403,908 1.3
PAPER/PACKAGING
Monsanto Co. ........................................... US 65,800 6,892,550 1.1
CHEMICALS
Solvay S.A. "A" ........................................ BEL 11,754 5,933,900 0.9
CHEMICALS
Akzo Nobel N.V. ........................................ NETH 51,450 5,859,040 0.9
CHEMICALS
RWE AG ................................................. GER 13,462 4,792,483 0.8
MISC. MATERIALS & COMPONENTS
BASF AG ................................................ GER 18,080 3,969,815 0.6
CHEMICALS
CRA Ltd. ............................................... AUSL 132,200 2,037,563 0.3
METALS - NON-FERROUS
St Laurent Paperboard, Inc.-/- ......................... CAN 80,000 1,157,321 0.2
FOREST PRODUCTS
------------
51,765,576
------------
Services (6.0%)
Telecom Corporation of New Zealand Limited ............. NZ -- -- 1.5
TELEPHONE NETWORKS
Common ............................................... -- 2,082,600 8,640,297 --
ADR{\/} .............................................. -- 19,000 1,261,125 --
McGraw-Hill, Inc. ...................................... US 81,000 6,631,875 1.0
BROADCASTING & PUBLISHING
Dun & Bradstreet Corp. ................................. US 109,800 6,560,550 1.0
BROADCASTING & PUBLISHING
Granada PLC, Convertible Preferred, 7.5% till
4/30/03 .............................................. UK 1,040,000 3,887,466 0.6
LEISURE & TOURISM
THORN EMI PLC .......................................... UK 140,000 3,259,365 0.5
LEISURE & TOURISM
Royal PTT Nederland N.V. ............................... NETH 86,335 3,036,497 0.5
TELEPHONE NETWORKS
British Telecommunications PLC ......................... UK 359,000 2,133,460 0.3
TELEPHONE NETWORKS
Tele Danmark AS "B" .................................... DEN 39,394 2,055,226 0.3
TELEPHONE NETWORKS
Cathay Pacific Airways ................................. HK 1,393,000 2,054,041 0.3
TRANSPORTATION - AIRLINES
------------
39,519,902
------------
Consumer Non-Durables (4.4%)
Philip Morris Cos., Inc. ............................... US 85,000 7,182,500 1.1
FOOD
Avon Products, Inc. ................................... US 91,000 6,472,375 1.0
PERSONAL CARE/COSMETICS
Universal Corp. ........................................ US 280,500 5,890,500 0.9
TOBACCO
Fleming Cos., Inc. ..................................... US 206,700 4,676,588 0.7
FOOD
Brown-Forman Corp. "B" ................................. US 84,300 3,213,938 0.5
BEVERAGES - ALCOHOLIC
Dairy Farm International Holdings Ltd.{\/} ............. HK 1,390,000 1,139,800 0.2
FOOD
------------
28,575,701
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 44
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Country Shares Value Assets {d}
- ---------------------------------------------------------- -------- -------------- ------------ -------------
<S> <C> <C> <C> <C>
Capital Goods (3.7%)
General Electric PLC .................................. UK 1,473,000 $ 7,310,289 1.1
AEROSPACE/DEFENSE
BICC PLC ............................................... UK 1,221,500 5,058,211 0.8
INDUSTRIAL COMPONENTS
Lockheed Martin Corp. .................................. US 69,545 4,737,753 0.7
AEROSPACE/DEFENSE
Siemens AG ............................................ GER 6,953 3,646,212 0.6
TELECOM EQUIPMENT
TransCanada Pipelines Ltd. ............................. CAN 145,000 1,935,246 0.3
MACHINERY & ENGINEERING
Thomson CSF S.A. ....................................... FR 62,560 1,304,053 0.2
AEROSPACE/DEFENSE
Trafalgar House PLC ................................... UK 131,000 47,621 --
MACHINERY & ENGINEERING
------------
24,039,385
------------
Health Care (2.8%)
Bristol Myers Squibb Co. .............................. US 138,700 10,575,875 1.7
PHARMACEUTICALS
Bayer AG ............................................... GER 25,860 6,879,829 1.1
PHARMACEUTICALS
------------
17,455,704
------------
Multi-Industry/Miscellaneous (2.0%)
VEBA AG ................................................ GER 170,200 6,989,169 1.1
CONGLOMERATE
Hutchison Whampoa ...................................... HK 565,000 3,113,230 0.5
CONGLOMERATE
Brascan Ltd. "A" ....................................... CAN 179,000 2,806,690 0.4
CONGLOMERATE
------------
12,909,089
------------
Consumer Durables (1.4%)
GKN PLC ............................................... UK 685,800 8,730,686 1.4
------------
AUTO PARTS
Technology (0.3%)
Alcatel Alsthom Compagnie Generale d'Electricite ....... FR 21,860 1,867,390 0.3
TELECOM TECHNOLOGY
------------ -----
TOTAL EQUITY INVESTMENTS (cost $351,769,551) ............ 414,387,777 64.6
------------ -----
<CAPTION>
Principal Market % of Net
Fixed Income Investments Currency Amount Value Assets {d}
- ---------------------------------------------------------- -------- -------------- ------------ -------------
<S> <C> <C> <C> <C>
Government & Government Agency Obligations (29.1%)
Canada (0.6%)
Canadian Government, 8.75% due 12/1/05 ............... CAD 5,000,000 4,039,424 0.6
Denmark (1.1%)
Kingdom of Denmark, 8% due 3/15/06 ................... DKK 40,000,000 7,361,060 1.1
Germany (7.8%)
Deutschland Republic:
6.75% due 4/22/03 ................................. DEM 26,000,000 19,014,567 3.0
6.25% due 1/4/24 ................................... DEM 23,000,000 14,449,975 2.3
Bundesschatzanweisungen, 6.875% due 12/2/98 .......... DEM 14,635,000 10,984,829 1.7
Treuhandanstalt, 6.375% due 7/1/99 ................... DEM 7,000,000 5,181,980 0.8
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 45
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
<TABLE>
<CAPTION>
Principal Market % of Net
Fixed Income Investments Currency Amount Value Assets {d}
- ---------------------------------------------------------- -------- -------------- ------------ -------------
<S> <C> <C> <C> <C>
Government & Government Agency Obligations (Continued)
Italy (1.9%)
Italian Buoni Del Tesoro Poliennali (BTPS), 8.50% due
8/1/04 .............................................. ITL 23,000,000,000 $ 11,997,457 1.9
New Zealand (1.2%)
New Zealand Government, 8% due 4/15/04 ............... NZD 11,000,000 7,610,947 1.2
Spain (1.5%)
Kingdom of Spain, 8% due 5/30/04 ..................... ESP 1,350,000,000 9,399,393 1.5
Sweden (2.2%)
Swedish Government, 6% due 2/9/05 .................... SEK 117,600,000 14,292,473 2.2
United Kingdom (4.6%)
Conversion, 9.5% due 4/18/05 ........................ GBP 10,500,000 18,244,725 2.8
United Kingdom Treasury:
6% due 8/10/99 ..................................... GBP 3,865,000 5,852,937 0.9
8% due 12/7/15 ..................................... GBP 3,500,000 5,466,157 0.9
United States (8.2%)
United States Treasury Note:
7.25% due 5/15/04 ................................. USD 16,600,000 17,881,351 2.8
7.5% due 2/15/05 ................................... USD 8,050,000 8,849,969 1.4
6.5% due 8/15/05 ................................... USD 4,000,000 4,136,252 0.6
United States Treasury Bond:
6.875% due 8/15/25 ................................. USD 11,500,000 12,322,975 1.9
6.25% due 8/15/23 ................................. USD 10,000,000 9,762,500 1.5
------------
Total Government & Government Agency Obligations (cost
$177,666,101) ........................................... 186,848,971
------------
Corporate Bonds (5.1%)
Canada (0.2%)
St. Laurent Paperboard Inc., Convertible Bond, 8% due
6/15/04 ............................................. CAD 1,080,000 1,056,373 0.2
Germany (1.4%)
Deutsche Bank AG, 9% due 12/31/02+/+ ................. DEM 5,625,000 4,562,593 0.7
Commerzbank AG, Convertible Bond, 8.40% due
12/31/00+ ........................................... DEM 4,173,000 4,169,145 0.7
IKB Deutsche Industriebank, 6.45% due 3/31/06 ........ DEM 445,700 294,536 --
United Kingdom (2.5%)
Daily Mail & General Trust, Convertible Bond, 5.75%
due 9/26/03 ......................................... GBP 3,405,000 6,899,336 1.1
Land Securities PLC, Convertible Bond, 9.375% due
7/31/04 ............................................. GBP 3,485,000 5,990,102 0.9
Elf Enterprises Finance PLC, 8.75% due 6/27/06 ....... GBP 1,465,000 2,298,107 0.4
Trafalgar House PLC, Convertible Bond, 6% due
1/31/49 ............................................. GBP 1,236,000 908,393 0.1
United States (1.0%)
Siemens Capital Corp., 8% due 6/24/02+/+ ............. USD 4,710,000 6,405,600 1.0
------------
Total Corporate Bonds (cost $31,805,823) ................ 32,584,185
------------ -----
TOTAL FIXED INCOME INVESTMENTS (cost $209,471,924) ....... 219,433,156 34.2
------------ -----
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 46
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
<TABLE>
<CAPTION>
No. of Market % of Net
Warrants (0.0%) Country Warrants Value Assets {d}
- ---------------------------------------------------------- -------- -------------- ------------ -------------
<S> <C> <C> <C> <C>
Henderson Investment Warrants, expire 3/31/96 (cost
$0)-/- ................................................ HK 269,100 $ 14,271 --
------------ -----
INVESTMENT MANAGEMENT
<CAPTION>
Market % of Net
Repurchase Agreement (0.1%) Value Assets {d}
- ---------------------------------------------------------- ------------ -------------
<S> <C> <C> <C> <C>
Dated October 31, 1995 with State Street Bank & Trust
Company, due November 1, 1995, for an effective yield
of 5.80% collateralized by $1,310,000 U.S. Treasury
Strips, due 2/15/02 (market value of collateral is
$906,610, including accrued interest) (cost $877,141)
...................................................... 877,141 0.1
------------ -----
TOTAL INVESTMENTS (cost $562,118,616) .................... 634,712,345 98.9
Other Assets and Liabilities ............................. 7,097,240 1.1
------------ -----
NET ASSETS ............................................... $641,809,585 100.0
------------ -----
------------ -----
</TABLE>
- ----------------
{d} Percentages indicated are based on net assets of $641,809,585.
{\/} U.S. currency denominated.
-/- Non-income producing security.
+ The coupon rate shown on floating rate note represents the rate at
period end.
+/+ Issued with detachable warrants or value recovery rights. The
current market value of each warrant or right is zero.
* For Federal income tax purposes, cost is $562,357,582 and
appreciation (depreciation) is as follows:
Unrealized appreciation: $ 86,308,381
Unrealized depreciation: (13,953,618)
-------------
Net unrealized appreciation: $ 72,354,763
-------------
-------------
Abbreviations:
ADR -- American Depository Receipt
GDR -- Global Depository Receipt
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at October 31, 1995, was concentrated in the
following countries:
<TABLE>
<CAPTION>
Percentage of Net Assets {d}
-------------------------------------
Fixed Income, Short-Term
Rights & &
Country(Country Code/Currency Code) Equity Warrants Other Total
- -------------------------------------- ------ ------------- ----- -----
<S> <C> <C> <C> <C>
Australia (AUSL/AUD) ................. 5.3 5.3
Belgium (BEL/BEF) ................... 4.6 4.6
Canada (CAN/CAD) ..................... 1.2 0.8 2.0
Denmark (DEN/DKK) .................... 0.3 1.1 1.4
France (FR/FRF) ...................... 1.7 1.7
Germany (GER/DEM) .................... 6.4 9.2 15.6
Hong Kong (HK/HKD) ................... 2.5 2.5
Italy (ITLY/ITL) ..................... 1.9 1.9
Netherlands (NETH/NLG) ............... 6.4 6.4
New Zealand (NZ/NZD) ................. 1.5 1.2 2.7
Norway (NOR/NOK) ..................... 0.5 0.5
Spain (SPN/ESP) ...................... 0.9 1.5 2.4
Sweden (SWDN/SEK) .................... 2.2 2.2
Switzerland (SWTZ/CHF) ............... 7.7 7.7
United Kingdom (UK/GBP) .............. 10.9 7.1 18.0
United States (US/USD) ............... 14.7 9.2 1.2 25.1
------ --- ----- -----
Total ............................... 64.6 34.2 1.2 100.0
------ --- ----- -----
------ --- ----- -----
<FN>
- ----------------
{d} Percentages indicated are based on net assets of $641,809,585.
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 47
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
OCTOBER 31, 1995
<TABLE>
<CAPTION>
Unrealized
Market Value Contract Delivery Appreciation
Contracts to Sell: (U.S. Dollars) Price Date (Depreciation)
- --------------------------------------------------------------------------- -------------- ----------- --------- --------------
<S> <C> <C> <C> <C>
Deutsche Marks............................................................. 32,968,774 1.37500 01/24/96 $ 631,227
Dutch Guilders............................................................. 12,674,263 1.58183 11/15/95 (30,640)
Dutch Guilders............................................................. 697,084 1.64532 11/15/96 (28,522)
French Francs.............................................................. 1,462,617 4.81600 11/06/96 22,019
French Francs.............................................................. 3,947,691 4.90035 11/16/95 (9,463)
Swiss Francs............................................................... 15,511,679 1.21830 11/17/95 (1,065,319)
-------------- --------------
Total Contracts to Sell (Receivable amount $66,781,410)................ 67,262,108 (480,698)
-------------- --------------
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF NET ASSETS IS 10.48%
Total Open Forward Foreign Currency Contracts.......................... $ (480,698)
--------------
--------------
</TABLE>
- ----------------
See Note 1 to the financial statements.
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 48
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
STATEMENT OF ASSETS
AND LIABILITIES
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Assets:
Investments in securities, at value (cost $562,118,616)
(Note 1)................................................. $634,712,345
U.S. currency.............................. $2,148,396
Foreign currencies (cost $86,368).......... 86,113 2,234,509
----------
Interest and interest withholding tax reclaims
receivable............................................... 6,136,649
Dividends and dividend withholding tax reclaims
receivable............................................... 1,839,340
Receivable for Fund shares sold........................... 1,589,616
Miscellaneous receivable.................................. 57,542
Cash held as collateral for securities loaned (Note 1).... 66,191,073
------------
Total assets............................................ 712,761,074
------------
Liabilities:
Payable for Fund shares repurchased....................... 1,909,711
Payable for forward foreign currency contracts -- closed
(Note 1)................................................. 1,061,853
Payable for investment management and administration fees
(Note 2)................................................. 530,977
Payable for open forward foreign currency contracts, net
(Note 1)................................................. 480,698
Payable for service and distribution expenses (Note 2).... 382,987
Payable for printing and postage expenses................. 157,836
Payable for transfer agent fees (Note 2).................. 109,594
Payable for custodian fees (Note 1)....................... 36,195
Payable for professional fees............................. 33,921
Payable for registration and filing fees.................. 30,951
Payable for fund accounting fees (Note 2)................. 13,794
Distribution payable...................................... 5,449
Payable for Directors' fees and expenses (Note 2)......... 2,315
Other accrued expenses.................................... 4,135
Collateral for securities loaned (Note 1)................. 66,191,073
------------
Total liabilities....................................... 70,951,489
------------
Net assets.................................................. $641,809,585
------------
------------
Class A:
Net asset value and redemption price per share ($284,069,241
DIVIDED BY 44,716,651 shares outstanding).................. $ 6.35
------------
------------
Maximum offering price per share (100/95.25 of $6.35) *..... $ 6.67
------------
------------
Class B:+
Net asset value and offering price per share ($356,796,017
DIVIDED BY 56,149,732 shares outstanding).................. $ 6.35
------------
------------
Advisor Class: (Notes 1 & 4)
Net asset value, offering price per share, and redemption
price per share ($944,327 DIVIDED BY 148,711 shares
outstanding)............................................... $ 6.35
------------
------------
Net assets consist of:
Paid in capital (Note 4).................................. $585,988,405
Undistributed net investment income....................... 3,503,788
Accumulated net realized loss on investments and foreign
currency transactions.................................... (19,973,849)
Net unrealized depreciation on translation of assets and
liabilities in foreign currencies........................ (302,488)
Net unrealized appreciation of investments................ 72,593,729
------------
Total -- representing net assets applicable to capital
shares outstanding......................................... $641,809,585
------------
------------
<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.
Statement of Additional Information Page 49
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
STATEMENT OF OPERATIONS
Year ended October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Investment income: (Note 1)
Interest income............................................. $ 20,124,306
Dividend income (net of foreign withholding tax of
$1,834,759)................................................ 15,986,542
------------
Total investment income................................... 36,110,848
------------
Expenses:
Investment management and administration fees (Note 2)...... 6,301,399
Service and distribution expenses: (Note 2)
Class A.................................. $ 1,035,465
Class B.................................. 3,539,336 4,574,801
------------
Transfer agent fees (Note 2)................................ 1,373,300
Custodian fees (Note 1)..................................... 520,103
Printing and postage expenses............................... 413,672
Fund accounting fees (Note 2)............................... 165,947
Registration and filing fees................................ 118,965
Audit fees.................................................. 59,085
Legal fees.................................................. 39,930
Directors' fees and expenses (Note 2)....................... 17,950
Amortization of organization costs (Note 1)................. 17,648
Insurance expenses.......................................... 12,047
------------
Total expenses before reductions.......................... 13,614,847
------------
Expense reductions (Notes 1 & 5)........................ (232,599)
------------
Total net expenses........................................ 13,382,248
------------
Net investment income......................................... 22,728,600
------------
Net realized and unrealized gain (loss) on
investments and foreign currencies: (Note 1)
Net realized gain on investments........... 13,795,663
Net realized loss on foreign currency
transactions.............................. (31,706,057)
------------
Net realized loss during the year......................... (17,910,394)
Net change in unrealized depreciation on
translation of assets and liabilities in
foreign currencies........................ (583,752)
Net change in unrealized appreciation of
investments............................... 32,281,086
------------
Net unrealized appreciation during the year............... 31,697,334
------------
Net realized and unrealized gain on investments and foreign
currencies................................................... 13,786,940
------------
Net increase in net assets resulting from operations.......... $ 36,515,540
------------
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 50
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, 1995 OCTOBER 31, 1994
----------------- -----------------
<S> <C> <C>
Increase (Decrease) in net assets
Operations:
Net investment income...................... $ 22,728,600 $ 17,564,361
Net realized gain (loss) on investments and
foreign currency transactions............. (17,910,394) 8,687,940
Net change in unrealized depreciation on
translation of assets and liabilities in
foreign currencies........................ (583,752) (1,672,868)
Net change in unrealized appreciation
(depreciation) of investments............. 32,281,086 (9,822,058)
----------------- -----------------
Net increase in net assets resulting from
operations.............................. 36,515,540 14,757,375
----------------- -----------------
Class A:
Distributions to shareholders: (Note 1)
From net investment income................. (10,790,288) (9,757,675)
From net realized gain on investments...... (506,546) (3,136,804)
Class B:
Distributions to shareholders: (Note 1)
From net investment income................. (10,618,028) (7,806,686)
From net realized gain on investments...... (580,255) (2,807,047)
Advisor Class:
Distributions to shareholders: (Note 1)
From net investment income................. (18,236) --
----------------- -----------------
Total distributions...................... (22,513,353) (23,508,212)
----------------- -----------------
Capital share transactions: (Note 4)
Increase from capital shares sold and
reinvested................................ 150,425,919 385,623,629
Decrease from capital shares repurchased... (199,707,569) (101,979,754)
----------------- -----------------
Net increase (decrease) from capital
share transactions...................... (49,281,650) 283,643,875
----------------- -----------------
Total increase (decrease) in net assets...... (35,279,463) 274,893,038
Net assets:
Beginning of year.......................... 677,089,048 402,196,010
----------------- -----------------
End of year................................ $ 641,809,585 $ 677,089,048
----------------- -----------------
----------------- -----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 51
<PAGE>
GT GLOBAL GROWTH & INCOME 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+
---------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------
1995 1994 1993(D) 1992 1991
--------- ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 6.21 $ 6.29 $ 5.28 $ 5.25 $ 4.77
--------- ----------- ----------- ---------- ----------
Income from investment operations:
Net investment income................. 0.24 0.22 0.24* 0.21* 0.27*
Net realized and unrealized gain
(loss) on investments................ 0.13 (0.03) 1.05 0.10 0.47
--------- ----------- ----------- ---------- ----------
Net increase (decrease) from
investment operations.............. 0.37 0.19 1.29 0.31 0.74
--------- ----------- ----------- ---------- ----------
Distributions to shareholders:
From net investment income............ (0.22) (0.21) (0.24) (0.14) (0.26)
From net realized gain on
investments.......................... (0.01) (0.06) -- (0.14) --
From sources other than net investment
income............................... -- -- (0.04) -- --
--------- ----------- ----------- ---------- ----------
Total distributions................. (0.23) (0.27) (0.28) (0.28) (0.26)
--------- ----------- ----------- ---------- ----------
Net asset value, end of period.......... $ 6.35 $ 6.21 $ 6.29 $ 5.28 $ 5.25
--------- ----------- ----------- ---------- ----------
--------- ----------- ----------- ---------- ----------
Total investment return (e)............. 6.27% 3.14% 25.1% 5.9% 15.68%
Ratios and supplemental data:
Net assets, end of period (in 000's).... $284,069 $317,847 $251,428 $27,754 $71,376
Ratio of net investment income to
average net assets..................... 3.85% 3.30% 3.3%* 4.1%* 5.0%*
Ratio of expenses to average net assets:
With expense reductions (Notes 1 &
5)................................... 1.70% 1.67% 1.8%* 1.9%* 1.9%*
Without expense reductions............ 1.74% --%** --%** --%** --%**
Portfolio turnover rate++++............. 83% 117% 24% 53% 46%
</TABLE>
- ----------------
+ All capital shares issued and outstanding as of October 21, 1992 were
reclassified as Class A shares.
++ Commencing October 22, 1992, the Fund began offering Class B shares.
+++ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
* Includes reimbursement by LGT Asset Management, Inc. of Fund operating
expenses of $0.005, $0.02, and $0.03 for the year ended October 31,
1993, 1992 and 1991, respectively. Without such reimbursements, the
expense ratios would have been 1.93%, 2.20% and 2.46% and the net
investment income to average net assets would have been 3.2%, 3.70%
and 4.40%, for the year ended October 31, 1993, 1992 and 1991,
respectively.
** Calculation of "Ratio of expenses to average net assets" was made
without considering the effect of expense reductions, if any.
(a) Not annualized.
(b) Annualized.
(c) Ratios are not meaningful due to short period of operations of Class B
shares.
(d) These selected per share data were calculated based upon weighted
average shares outstanding during the year.
(e) Total investment return does not include sales charges.
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 52
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
FINANCIAL HIGHLIGHTS (CONT'D)
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding,
total investment return, ratios and supplemental data. This information has been
derived from information provided in the financial statements.
<TABLE>
<CAPTION>
CLASS B++ ADVISOR
------------------------------------------------------ CLASS+++
OCTOBER 22, ------------
YEAR ENDED 1992 JUNE 1, 1995
OCTOBER 31, TO TO
------------------------------------- OCTOBER 31, OCTOBER 31,
1995 1994 1993(D) 1992(D) 1995
--------- ----------- ----------- -------------- ------------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 6.21 $ 6.29 $ 5.28 $ 5.29 $ 6.24
--------- ----------- ----------- ------- ------------
Income from investment operations:
Net investment income................. 0.20 0.18 0.20 0.01 0.11
Net realized and unrealized gain
(loss) on investments................ 0.13 (0.03) 1.05 (0.02) 0.13
--------- ----------- ----------- ------- ------------
Net increase (decrease) from
investment operations.............. 0.33 0.15 1.25 (0.01) 0.24
--------- ----------- ----------- ------- ------------
Distributions to shareholders:
From net investment income............ (0.18) (0.17) (0.20) -- (0.13)
From net realized gain on
investments.......................... (0.01) (0.06) -- -- --
From sources other than net investment
income............................... -- -- (0.04) -- --
--------- ----------- ----------- ------- ------------
Total distributions................. (0.19) (0.23) (0.24) -- (0.13)
--------- ----------- ----------- ------- ------------
Net asset value, end of period.......... $ 6.35 $ 6.21 $ 6.29 $ 5.28 $ 6.35
--------- ----------- ----------- ------- ------------
--------- ----------- ----------- ------- ------------
Total investment return (e)............. 5.57% 2.48% 24.3% (0.2)%(a) 3.83%(a)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $356,796 $359,242 $150,768 $ 280 $ 944
Ratio of net investment income to
average net assets..................... 3.20% 2.65% 2.6% N/A(c) 4.20%(b)
Ratio of expenses to average net assets:
With expense reductions (Notes 1 &
5)................................... 2.35% 2.32% 2.5% N/A(c) 1.35%(b)
Without expense reductions............ 2.39% --%** --%** --%**(c) 1.39%(b)
Portfolio turnover rate++++............. 83% 117% 24% 53% 83%
</TABLE>
- ----------------
+ All capital shares issued and outstanding as of October 21, 1992 were
reclassified as Class A shares.
++ Commencing October 22, 1992, the Fund began offering Class B shares.
+++ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
* Includes reimbursement by LGT Asset Management, Inc. of Fund operating
expenses of $0.005, $0.02, and $0.03 for the year ended October 31,
1993, 1992 and 1991, respectively. Without such reimbursements, the
expense ratios would have been 1.93%, 2.20% and 2.46% and the net
investment income to average net assets would have been 3.2%, 3.70%
and 4.40%, for the year ended October 31, 1993, 1992 and 1991,
respectively.
** Calculation of "Ratio of expenses to average net assets" was made
without considering the effect of expense reductions, if any.
(a) Not annualized.
(b) Annualized.
(c) Ratios are not meaningful due to short period of operations of Class B
shares.
(d) These selected per share data were calculated based upon weighted
average shares outstanding during the year.
(e) Total investment return does not include sales charges.
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 53
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
NOTES TO
FINANCIAL STATEMENTS
October 31, 1995
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
GT Global Growth & Income Fund ("Fund") is a separate series of G.T. Investment
Funds, Inc. ("Company"). The Company is organized as a Maryland corporation and
is registered under the Investment Company Act of 1940, as amended ("1940 Act"),
as a non-diversified, open-end management investment company. The Company has
twelve series of shares in operation, each series corresponding to a distinct
portfolio of investments.
The Fund offers Class A, Class B, and Advisor Class shares, each of which has
equal rights as to assets and voting privileges. Class A and Class B each has
exclusive voting rights with respect to its distribution plan. The Fund
commenced sale of Advisor Class shares on June 1, 1995. Investment income,
realized and unrealized capital gains and losses, and the common expenses of the
Fund are allocated on a pro rata basis to each class based on the relative net
assets of each class to the total net assets of the Fund. Each class of shares
differs in its respective service and distribution expenses, and may differ in
its transfer agent, registration, and certain other class-specific fees and
expenses.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of the financial statements. The
policies are in conformity with generally accepted accounting principles.
(A) PORTFOLIO VALUATION
The Fund calculates the net asset value of and completes orders to purchase,
exchange or repurchase Fund shares 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 LGT Asset Management, Inc.
("LGT Asset Management") to be the primary market.
Fixed income investments are valued at the mean of representative quoted bid and
ask prices for such investments or, if such prices are not available, at prices
for investments of comparative maturity, quality and type; however, when LGT
Asset Management 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
Company's Board of Directors.
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Company's Board of Directors.
(B) FOREIGN CURRENCY TRANSLATION
The accounting records of the Fund are maintained in U.S. dollars. The market
values of foreign securities, currency holdings, and other assets and
liabilities are recorded in the books and records of the Fund after translation
to U.S. dollars based on the exchange rates on that day. The cost of each
security is determined using historical exchange rates. Income and withholding
taxes are translated at prevailing exchange rates when earned or incurred.
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized
Statement of Additional Information Page 54
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
between the trade and settlement dates on securities transactions, and the
difference between the amounts of dividends, interest, and foreign withholding
taxes recorded on the Fund's books and the U.S. dollar equivalent of the amounts
actually received or paid. Net unrealized foreign exchange gains and losses
arise from changes in the value of assets and liabilities other than investments
in securities at year end, resulting from changes in exchange rates.
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Fund, it is the Fund's
policy to always receive, as collateral, United States government securities or
other high quality debt securities of which the value, including accrued
interest, is at least equal to the amount to be repaid to the Fund under each
agreement at its maturity.
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract fluctuates with changes in currency
exchange rates. The Forward Contract is marked-to-market daily and the change in
market value is recorded by the Fund as an unrealized gain or loss. When the
Forward Contract is closed, the Fund records a realized gain or loss equal to
the difference between the value at the time it was opened and the value at the
time it was closed. Forward Contracts involve market risk in excess of the
amounts shown in the Fund's "Statement of Assets and Liabilities." The Fund
could be exposed to risk if a counterparty is unable to meet the terms of the
contract or if the value of the currency changes unfavorably. The Fund may enter
into Forward Contracts in connection with planned purchases or sales of
securities, or to hedge against adverse fluctuations in exchange rates between
currencies.
(E) OPTION ACCOUNTING PRINCIPLES
When the Fund writes a call or put option, an amount equal to the premium
received is included in the Fund's "Statement of Assets and Liabilities" as an
asset and an equivalent liability. The amount of the liability is subsequently
marked-to-market to reflect the current market value of the option. The current
market value of an option listed on a traded exchange is valued at its last bid
price, or, in the case of an over-the-counter option, is valued at the average
of the last bid prices obtained from brokers. If an option expires on its
stipulated expiration date or if the Fund enters into a closing purchase
transaction, a gain or loss is realized without regard to any unrealized gain or
loss on the underlying security, and the liability related to such option is
extinguished. If a written call option is exercised, a gain or loss is realized
from the sale of the underlying security and the proceeds of the sale are
increased by the premium originally received. If a written put option is
exercised, the cost of the underlying security purchased would be decreased by
the premium originally received. The Fund can write options only on a covered
basis, which, for a call, requires that the Fund hold the underlying security
and, for a put, requires the Fund to set aside cash, U.S. government securities,
or other liquid, high grade debt securities in an amount not less than the
exercise price or otherwise provide adequate cover at all times while the put
option is outstanding. The Fund may use options to manage its exposure to the
stock or bond market and to fluctuations in currency values or interest rates.
The premium paid by the Fund for the purchase of a call or put option is
included in the Fund's "Statement of Assets and Liabilities" as an investment
and subsequently "marked-to-market" to reflect the current market value of the
option. If an option which the Fund has purchased expires on the stipulated
expiration date, the Fund realizes a loss in the amount of the cost of the
option. If the Fund enters into a closing sale transaction, the Fund realizes a
gain or loss, depending on whether proceeds from the closing sale transaction
are greater or less than the cost of the option. If the Fund exercises a call
option, the cost of the securities acquired by exercising the call is increased
by the premium paid to buy the call. If the Fund exercises a put option, it
realizes a gain or loss from the sale of the underlying security, and the
proceeds from such sale are decreased by the premium originally paid.
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Fund may forego the
opportunity of profit if the market value of the underlying security or index
increases and the option is exercised. The risk in writing a put option is that
the Fund may incur a loss if the market value of the underlying security or
index decreases and the option is exercised. In addition, there is the risk the
Fund may not be able to enter into a closing transaction because of an illiquid
secondary market.
(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract the
Fund is required to pledge to the broker an amount of cash or securities equal
to the minimum "initial margin" requirements of the exchange on which the
contract is traded. Pursuant to the contract, the Fund agrees to receive from or
pay to the broker an amount
Statement of Additional Information Page 55
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
of cash equal to the daily fluctuation in value of the contract. Such receipts
or payments are known as "variation margin" and are recorded by the Fund as
unrealized gains or losses. When the contract is closed, the Fund records a
realized gain or loss equal to the difference between the value of the contract
at the time it was opened and the value at the time it was closed. The potential
risk to the Fund is that the change in value of the underlying securities may
not correlate to the change in value of the contracts. The Fund may use futures
contracts to manage its exposure to the stock or bond market and to fluctuations
in currency values or interest rates.
(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out basis, unless otherwise specified. Dividends are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Where a high
level of uncertainty exists as to collection, income is recorded net of all
withholding tax with any rebate recorded when received. The Fund may trade
securities on other than normal settlement terms. This may increase the risk if
the other party to the transaction fails to deliver and causes the Fund to
subsequently invest at less advantageous prices.
(H) PORTFOLIO SECURITIES LOANED
At October 31, 1995, stocks with an aggregate value of approximately $62,622,697
were on loan to brokers. The loans were secured by cash collateral of
$66,191,073. For international securities, cash collateral is received by the
Fund against loaned securities in an amount at least equal to 105% of the market
value of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 103% of the market value of the loaned
securities during the period of the loan. For domestic securities, cash
collateral is received by the Fund against loaned securities in an amount at
least equal to 102% of the market value of the loaned securities at the
inception of each loan. This collateral must be maintained at not less than 100%
of the market value of the loaned securities during the period of the loan. For
the period ended October 31, 1995, the Fund received $192,015 of income from
securities lending which was used to offset the Fund's custody expenses.
(I) TAXES
It is the policy of the Fund to meet the requirements for qualification as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended ("Code"). It is also the intention of the Fund to make distributions
sufficient to avoid imposition of any excise tax under Section 4982 of the Code.
Therefore, no provision has been made for Federal taxes on income, capital
gains, or unrealized appreciation of securities held, and excise tax on income
and capital gains. The Fund currently has a capital loss carryforward of
$24,154,904, which expires in 2003.
(J) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by the Fund on the ex-date. Income
and capital gain distributions are determined in accordance with Federal income
tax regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments of income and gains
on various investment securities held by the Fund and timing differences.
(K) DEFERRED ORGANIZATIONAL EXPENSES
Expenses incurred by the Fund in connection with its organization, its initial
registration with the Securities and Exchange Commission and with various states
and the initial public offering of its shares aggregated $107,435. These
expenses have been amortized on a straightline basis over a five-year period.
(L) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investments of domestic origin. The Fund's investments in emerging market
countries may involve greater risks than investments in more developed markets
and the 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.
(M) INDEXED SECURITIES
The Fund may invest in indexed securities whose value is linked either directly
or indirectly to changes in foreign currencies, interest rates, equities,
indices, or other reference instruments. Indexed securities may be more volatile
than the reference instrument itself, but any loss is limited to the amount of
the original investment.
(N) RESTRICTED SECURITIES
The Fund is permitted to invest in privately placed restricted securities. These
securities may be resold in transactions exempt from registration or to the
public if the securities are registered. Disposal of these securities may
involve time-consuming negotiations and expense, and prompt sale at an
acceptable price may be difficult. At the end of the period, restricted
securities (excluding 144A issues) are shown at the end of the Fund's Portfolio
of Investments.
Statement of Additional Information Page 56
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
2. RELATED PARTIES
LGT Asset Management is the Fund's investment manager and administrator. The
Fund pays investment management and administration fees to LGT Asset Management
at the annualized rate of 0.975% on the first $500 million of average daily net
assets of the Fund; 0.95% on the next $500 million; 0.925% on the next $500
million and 0.90% on amounts thereafter. These fees are computed daily and paid
monthly, and are subject to reduction in any year to the extent that the Fund's
expenses (exclusive of brokerage commissions, taxes, interest, distribution-
related expenses and extraordinary expenses) exceed the most stringent limits
prescribed by the laws or regulations of any state in which the Fund's shares
are offered for sale, based on the average total net asset value of the Fund.
GT Global Financial Services, Inc. ("GT Global"), an affiliate of LGT Asset
Management, serves as the Fund's distributor. The Fund offers Class A, Class B,
and Advisor Class shares for purchase.
Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Fund's current
prospectus. GT Global collects the sales charges imposed on sales of Class A
shares, and reallows a portion of such charges to dealers through which the
sales are made. For the year ended October 31, 1995, GT Global retained $80,112
of such sales charges. Purchases of Class A shares exceeding $500,000 may be
subject to a contingent deferred sales charge ("CDSC") upon redemption, in
accordance with the Fund's current prospectus. GT Global collected CDSCs in the
amount of $19,017 for the year ended October 31, 1995. GT Global also makes
ongoing shareholder servicing and trail commission payments to dealers whose
clients hold Class A shares.
Class B shares are not subject to initial sales charges. When Class B shares are
sold, GT Global from its own resources pays commissions to dealers through which
the sales are made. Certain redemptions of Class B shares made within six years
of purchase are subject to CDSCs, in accordance with the Fund's current
prospectus. For the year ended October 31, 1995, GT Global collected CDSC's in
the amount of $1,533,810. In addition, GT Global makes ongoing shareholder
servicing and trail commission payments to dealers whose clients hold Class B
shares.
Pursuant to Rule 12b-1 under the 1940 Act, the Company's Board of Directors has
adopted separate distribution plans with respect to the Fund's Class A shares
("Class A Plan") and Class B shares ("Class B Plan"), pursuant to which the Fund
reimburses GT Global for a portion of its shareholder servicing and distribution
expenses. Under the Class A Plan, the Fund may pay GT Global a service fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class A shares for GT Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay GT Global a distribution fee at
the annualized rate of up to 0.35% of the average daily net assets of the Fund's
Class A shares, less any amounts paid by the Fund as the aforementioned service
fee, for GT Global's expenditures incurred in providing services as distributor.
All expenses for which GT Global is reimbursed under the Class A Plan will have
been incurred within one year of such reimbursement.
Pursuant to the Fund's Class B Plan, the Fund may pay GT Global a service fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class B shares for GT Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay GT Global a distribution fee at
the annualized rate of up to 0.75% of the average daily net assets of the Fund's
Class B Shares for GT Global's expenditures incurred in providing services as
distributor. Expenses incurred under the Class B Plan in excess of 1.00%
annually may be carried forward for reimbursement in subsequent years as long as
that Plan continues in effect.
LGT Asset Management and GT Global voluntarily have undertaken to limit the
Fund's expenses (exclusive of brokerage commissions, taxes, interest, and
extraordinary expenses) to the maximum annual rate of 1.85%, 2.50%, and 1.50% of
the average daily net assets of the Fund's Class A, Class B, and Advisor Class
shares, respectively. If necessary, this limitation will be effected by waivers
by LGT Asset Management of investment management and administration fees,
waivers by GT Global of payments under the Class A Plan and/or Class B Plan
and/or reimbursements by LGT Asset Management or GT Global of portions of the
Fund's other operating expenses.
GT Global Investor Services, Inc. ("GT Services"), an affiliate of LGT Asset
Management and GT Global, is the transfer agent of the Fund.
Effective May 1, 1995, LGT Asset Management has assumed the role of pricing and
accounting agent for the Fund. The monthly fee for these services to LGT Asset
Management is a percentage, not to exceed 0.03% annually, of the Fund's average
daily net assets. The annual fee rate is derived by applying 0.03% to the first
$5 billion of assets of all registered mutual funds advised by LGT Asset
Management ("GT Funds") and 0.02% to the assets in excess of $5 billion and
dividing the result by the aggregate assets of the GT Funds. For the period
ended October 31, 1995,
Statement of Additional Information Page 57
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
the Fund paid fund accounting fees of $40,735 to LGT Asset Management.
The Company pays each of its Directors who is not an employee, officer or
director of LGT Asset Management, GT Global or GT Services $5,000 per year plus
$300 for each meeting of the board or any committee thereof attended by the
Director.
3. PURCHASES AND SALES OF SECURITIES
For the year ended October 31, 1995, purchases and sales of investment
securities by the Fund, other than short-term investments and U.S. government
obligations, aggregated $445,884,925 and $478,744,953, respectively. Purchases
and sales of U.S. government obligations were $64,778,477 and $57,362,609,
respectively, for the year ended October 31, 1995.
4. CAPITAL SHARES
At October 31, 1995, there were 6,000,000,000 shares of the Company's common
stock authorized, at $0.0001 par value. Of this amount, 200,000,000 were
classified as shares of the Fund; 400,000,000 were classified as shares of GT
Global Government Income Fund; 200,000,000 were classified as shares of GT
Global Health Care Fund; 200,000,000 were classified as shares of GT Global
Strategic Income Fund; 200,000,000 were classified as shares of GT Global
Currency Fund (inactive); 200,000,000 were classified as shares of GT Global
Latin America Growth Fund; 200,000,000 were classified as shares of GT Global
Small Companies Fund (inactive); 400,000,000 were classified as shares of GT
Global Telecommunications Fund; 200,000,000 were classified as shares of GT
Global Emerging Markets Fund; 200,000,000 were classified as shares of GT Global
Financial Services Fund; 200,000,000 were classified as shares of G.T. Global
Natural Resources Fund; 200,000,000 were classified as shares of GT Global
Infrastructure Fund; 200,000,000 were classified as shares of GT Global High
Income Fund; and 200,000,000 were classified as shares of GT Global Consumer
Products and Services Fund. The shares of each of the foregoing series of the
Company were divided equally into two classes, designated Class A and Class B
common stock. With respect to the issuance of Advisor Class shares, 100,000,000
shares were classified as shares of each of the fourteen series of the Company
and designated as Advisor Class common stock. 1,400,000,000 shares remain
unclassified. Transactions in capital shares of the Fund were as follows:
CAPITAL SHARE TRANSACTIONS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, 1995 OCTOBER 31, 1994
-------------------------- -------------------------
CLASS A: SHARES AMOUNT SHARES AMOUNT
----------- ------------- ---------- -------------
<S> <C> <C> <C> <C>
Shares sold................................................................ 11,447,072 $ 70,539,906 18,375,623 $ 115,141,878
Shares issued in connection with reinvestment of distributions............. 1,579,506 9,534,463 1,777,962 10,875,825
----------- ------------- ---------- -------------
13,026,578 80,074,369 20,153,585 126,017,703
Shares repurchased......................................................... (19,470,580) (119,773,578) (8,951,499) (55,403,713)
----------- ------------- ---------- -------------
Net increase (decrease).................................................... (6,444,002) $ (39,699,209) 11,202,086 $ 70,613,990
----------- ------------- ---------- -------------
----------- ------------- ---------- -------------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, 1995 OCTOBER 31, 1994
-------------------------- -------------------------
CLASS B: SHARES AMOUNT SHARES AMOUNT
----------- ------------- ---------- -------------
<S> <C> <C> <C> <C>
Shares sold................................................................ 9,868,499 $ 60,082,182 39,929,440 $ 250,659,375
Shares issued in connection with reinvestment of distributions............. 1,542,069 9,322,768 1,464,527 8,946,551
----------- ------------- ---------- -------------
11,410,568 69,404,950 41,393,967 259,605,926
Shares repurchased......................................................... (13,074,922) (79,926,629) (7,536,482) (46,576,041)
----------- ------------- ---------- -------------
Net increase (decrease).................................................... (1,664,354) $ (10,521,679) 33,857,485 $ 213,029,885
----------- ------------- ---------- -------------
----------- ------------- ---------- -------------
</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................................................................ 146,947 $ 928,364
Shares issued in connection with reinvestment of distributions............. 2,927 18,236
----------- -------------
149,874 946,600
Shares repurchased......................................................... (1,163) (7,362)
----------- -------------
Net increase............................................................... 148,711 $ 939,238
----------- -------------
----------- -------------
</TABLE>
Statement of Additional Information Page 58
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
5. EXPENSE REDUCTIONS
G.T. Capital has directed certain portfolio trades to brokers who paid a portion
of the Fund's expenses. For the year ended October 31, 1995, the Fund's expenses
were reduced by $40,584 under these arrangements.
6. 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 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
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 $0.228 per share (representing an approximate total of $22,862,317).
The total amount of taxes paid by the Fund to such countries was approximately
$0.019 per share (representing a total of $1,834,759).
Pursuant to Section 852 of the Internal Revenue Code, the Fund designates
$3,288,542 as capital gain dividends for the fiscal year ended October 31, 1995.
Statement of Additional Information Page 59
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
NOTES
- --------------------------------------------------------------------------------
Statement of Additional Information Page 60
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
NOTES
- --------------------------------------------------------------------------------
Statement of Additional Information Page 61
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
NOTES
- --------------------------------------------------------------------------------
Statement of Additional Information Page 62
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
GT GLOBAL MUTUAL FUNDS
GT GLOBAL OFFERS A BROAD RANGE OF MUTUAL FUNDS TO COMPLEMENT MANY INVESTORS'
PORTFOLIOS. FOR MORE INFORMATION AND A PROSPECTUS ON ANY GT GLOBAL MUTUAL
FUND, PLEASE CONTACT YOUR FINANCIAL ADVISOR OR CALL GT GLOBAL DIRECTLY AT
1-800-824-1580.
GROWTH FUNDS
/ / GLOBALLY DIVERSIFIED FUNDS
GT GLOBAL WORLDWIDE GROWTH FUND
Invests around the world, including the U.S.
GT GLOBAL INTERNATIONAL GROWTH FUND
Provides portfolio diversity by investing outside the U.S.
GT GLOBAL EMERGING MARKETS FUND
Gives access to the growth potential of developing economies
/ / GLOBAL THEME FUNDS
GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
Invests in companies that manufacture, market, retail, or distribute consumer
products or services
GT GLOBAL FINANCIAL SERVICES FUND
Focuses on the worldwide opportunities from the demand for financial services
and products
GT GLOBAL HEALTH CARE FUND
Invests in the growing health care industries worldwide
GT GLOBAL INFRASTRUCTURE FUND
Seeks companies that build, improve or maintain a country's infrastructure
GT GLOBAL NATURAL RESOURCES FUND
Concentrates on companies that own, explore or develop natural resources
GT GLOBAL TELECOMMUNICATIONS FUND
Invests in companies worldwide that develop, manufacture or sell
telecommunications services or equipment
/ / REGIONALLY DIVERSIFIED FUNDS
GT GLOBAL NEW PACIFIC GROWTH FUND
Offers access to the emerging and established markets of the Pacific Rim,
excluding Japan
GT GLOBAL EUROPE GROWTH FUND
Focuses on investment opportunities in the new, unified Europe
GT GLOBAL LATIN AMERICA GROWTH FUND
Invests in the emerging markets of Latin America
/ / SINGLE COUNTRY FUNDS
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
Invests in equity securities of small U.S. companies
GT GLOBAL AMERICA GROWTH FUND
Concentrates on small and medium-sized companies in the U.S.
GT GLOBAL AMERICA VALUE FUND
Concentrates on equity securities of large cap U.S. companies believed to be
undervalued
GT GLOBAL JAPAN GROWTH FUND
Provides U.S. investors with direct access to the Japanese market
GROWTH AND INCOME FUNDS
GT GLOBAL GROWTH & INCOME FUND
Invests in blue-chip stocks and government bonds from around the world
FIXED INCOME FUNDS
GT GLOBAL GOVERNMENT INCOME FUND
Earns monthly income from global government securities
GT GLOBAL STRATEGIC INCOME FUND
Allocates its assets among debt securities from the U.S., developed foreign
countries and emerging markets
GT GLOBAL HIGH INCOME FUND
Invests in debt securities in emerging markets
MONEY MARKET FUND
GT GLOBAL DOLLAR FUND
Invests in high quality, U.S. dollar-denominated money market securities
worldwide for stability and preservation of capital
[LOGO]
NO DEALER, SALES REPRESENTATIVE OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY G.T. INVESTMENT FUNDS, INC.,
GT GLOBAL GROWTH & INCOME FUND, CHANCELLOR LGT ASSET MANAGEMENT, INC. OR GT
GLOBAL, INC. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR
SOLICITATION OF ANY OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON IN SUCH JURISDICTION TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER.
GRPSA602
