<PAGE>
CHANCELLOR LGT
ASSET MANAGEMENT
OVER 25 YEARS
OF INVESTING
WORLDWIDE
GT GLOBAL
GROWTH &
INCOME FUND
ANNUAL REPORT
OCTOBER 31, 1996
[LOGO]
<PAGE>
TABLE
OF CONTENTS
<TABLE>
<S> <C>
Message from the
Chairman............. 1
Report from the Fund
Managers and Key
Portfolio Holdings... 2
Report of Independent
Accountants.......... F1
Financial
Statements........... F2
The views of the Fund's manage-
ment and portfolio holdings
described in this report are as
of October 31, 1996; these views
and portfolio holdings may have
changed.
</TABLE>
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
MESSAGE FROM THE CHAIRMAN
Dear Investor,
Fiscal 1996 has been a year of economic strengthening, and the Funds have
benefited from low inflation and low interest rates worldwide. We're proud of
their performance over the past year and remain enthusiastic about their long-
term potential.
Consistent, above-average performance of GT Global Funds is our priority. To
that end, we enhanced the breadth and depth of our investment capabilities this
fall when Liechtenstein Global Trust (LGT), the parent company of GT Global,
acquired a premier institutional money manager, Chancellor Capital Management.
On October 31, Chancellor merged with LGT Asset Management, the Funds' advisor,
and the combined entities are now known as Chancellor LGT Asset Management. This
acquisition increased assets entrusted to LGT to over $80 billion.
We are confident about the partnership's success because both firms share a
commitment to providing investors around the world with solutions to their
investment needs through combined, top-notch expertise. Individual investors
will now have access to the same high-quality management services enjoyed by
over 320 institutional investors, including some of the country's largest
organizations.
Chancellor's strengths--disciplined U.S. equity and fixed income processes and
professionals, coupled with proven fundamental and quantitative investment
capabilities--represent an ideal complement to LGT's advantages as an
experienced global investment manager with an extensive global infrastructure.
Chancellor LGT Asset Management's global investment team includes 12 economists,
98 portfolio managers, 72 analysts and 19 traders located in nine regional
offices.
Warren Shaw, LGT's new Chief Investment Officer, has been the principal
architect of Chancellor's investment policies, with excellent results. The
disciplined, repeatable process he created leverages the effectiveness of a
strong investment team approach.
As always, we appreciate your continued confidence. Should you and your adviser
have any questions regarding GT Global Funds, please call us at 800-824-1580.
One of our registered representatives will be happy to assist you.
Sincerely,
David A. Minella
CHAIRMAN
GT GLOBAL MUTUAL FUNDS
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
INVESTMENT OBJECTIVE
AND CURRENT STRATEGY
The Fund seeks long-term capital appreciation and current income. In an effort
to meet both objectives, the types of securities in which the Fund invests
include common and convertible preferred stock of blue-chip companies as well
as high-quality government bonds from around the world. We continue to focus
our attention on the attractive opportunities we feel exist in Europe in both
the equity and debt markets.
Performance Summary
GT Global Growth & Income Fund
JP Morgan Global Government Bond Index
MSCI World Index
9/25/1990 9525 10000 10000
9/30/1990 9525 10045 9678
10/31/1990 9545 10443 10583
11/30/1990 9625 10625 10412
12/31/1990 9712 10744 10632
1/31/1991 10015 10987 11023
2/28/1991 10338 10997 12045
3/31/1991 10314 10653 11692
4/30/1991 10560 10781 11785
5/31/1991 10826 10791 12054
6/30/1991 10417 10647 11312
7/31/1991 10895 10872 11848
8/31/1991 11040 11098 11813
9/30/1991 11188 11503 12124
10/31/1991 11041 11616 12323
11/30/1991 10852 11806 11788
12/31/1991 11571 12402 12648
1/31/1992 11401 12159 12416
2/29/1992 11529 12124 12204
3/31/1992 11314 12012 11631
4/30/1992 11637 12112 11795
5/31/1992 12048 12456 12267
6/30/1992 11981 12796 11858
7/31/1992 11938 13078 11891
8/31/1992 11916 13426 12182
9/30/1992 11758 13412 12072
10/31/1992 11691 13077 11748
11/30/1992 11647 12846 11960
12/31/1992 11869 12967 12059
1/31/1993 12004 13187 12101
2/28/1993 12475 13399 12390
3/31/1993 12812 13605 13111
4/30/1993 12903 13853 13721
5/31/1993 13084 13941 14039
6/30/1993 13197 13952 13924
7/31/1993 13519 13958 14213
8/31/1993 14070 14371 14867
9/30/1993 14046 14523 14595
10/31/1993 14627 14516 14999
11/30/1993 14418 14410 14153
12/31/1993 15117 14557 14848
1/31/1994 15610 14694 15830
2/28/1994 14905 14533 15627
3/31/1994 14382 14466 14956
4/30/1994 14573 14455 15421
5/31/1994 14430 14336 15464
6/30/1994 14309 14506 15423
7/31/1994 14718 14642 15719
8/31/1994 14982 14604 16195
9/30/1994 14721 14677 15773
10/31/1994 15086 14897 16224
11/30/1994 14600 14709 15524
12/31/1994 14577 14743 15677
1/31/1995 14430 15042 15444
2/28/1995 14676 15429 15672
3/31/1995 14722 16214 16431
4/30/1995 15093 16473 17007
5/31/1995 15465 16933 17156
6/30/1995 15384 17038 17154
7/31/1995 15834 17119 18015
8/31/1995 15459 16643 17617
9/30/1995 15855 17018 18134
10/31/1995 16032 17184 17852
11/30/1995 16310 17376 18475
12/31/1995 16810 17591 19018
1/31/1996 16939 17410 19366
2/29/1996 17016 17309 19487
3/31/1996 17087 17282 19815
4/30/1996 17217 17218 20285
5/31/1996 17502 17236 20306
6/30/1996 17575 17387 20412
7/31/1996 17367 17707 19695
8/31/1996 17863 17780 19925
9/30/1996 18145 17878 20709
10/31/1996 18725 18233 20857
The chart above shows the performance of the GT Global Growth & Income Fund,
Class A shares, since the Fund's inception versus the various indices shown
above. This represents a cumulative return of 87.25% and an average annual total
return of 10.83% for the Fund. The chart assumes a hypothetical $10,000 initial
investment in the Fund's Class A shares and reflects all Fund expenses and the
maximum 4.75% sales charge. A $10,000 investment in the Fund's Class B shares at
inception on October 22, 1992, would have been valued at $15,382 on October 31,
1996. This figure reflects all Fund expenses and the applicable contingent
deferred sales charge (5% in the first year, decreasing to 0% after six years)
assuming a complete redemption at the end of the period. A $10,000 investment in
Advisor Class shares at inception on June 1, 1995, would have been worth $12,168
on October 31, 1996.
AVERAGE ANNUAL TOTAL RETURNS%(1)
October 31, 1996
<TABLE>
<CAPTION>
Share Class Without Sales Charge(2) With Sales Charge
1-Year 5-Year Life of Fund 1-Year 5-Year Life of Fund
<S> <C> <C> <C> <C> <C> <C>
Class A(3) 16.80 11.14 11.72 11.25 10.07 10.83
Class B(3) 16.06 N/A 11.65 11.06 N/A 11.29
Advisor Class(4) 17.19 N/A 14.83 N/A N/A N/A
</TABLE>
HISTORICAL PERFORMANCE%(2)
Annual Total Returns (per calendar year)
1990 1991 1992 1993 1994 1995
Class A 1.97(3) 19.14 2.58 27.36 -3.57 15.32
Class B N/A N/A 1.17(3) 26.80 -4.19 14.56
(1) Figures assume reinvestment of all dividends and capital gain distributions
at net asset value.
(2) This performance data do not reflect the maximum 4.75% sales charge and the
contingent deferred sales charge (5% in the first year, decreasing to
0% after six years) for Class A and Class B shares, respectively, which
if included, would have reduced performance quoted.
(3)The Fund began operations on September 25, 1990; Class B shares commenced
on October 22, 1992.
(4)The Fund began offering Advisor Class shares on June 1, 1995. Advisor Class
shares are not sold directly to the general public and are only
available through certain employee benefit plans, financial institutions and
other entities that have entered into specific agreements with GT
Global. Please see the "Alternative Purchase Plan" section in the
Fund's prospectus.
The above data represent past performance of the Fund's shares, which does not
guarantee future results. The investment return and principal value of an
investment in the Fund will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
2
<PAGE>
INTERVIEW WITH PORTFOLIO MANAGERS
NICK TRAIN AND PAUL GRIFFITHS
CONVERGENCE IN EUROPEAN YIELDS
Italian 10-year
German 10-year
Oct-95 6.44 11.882
6.169 11.455
6.031 10.858
Jan-96 5.896 10.186
6.388 10.575
6.438 10.869
Apr-96 6.339 9.814
6.496 9.647
6.505 9.413
Jul-96 6.373 9.509
6.386 9.573
6.096 8.596
Oct-96 6 8.14
Source: Bloomberg, 1996
Q HOW HAS THE FUND PERFORMED OVER THE PAST 12 MONTHS TO OCTOBER 31, 1996?
A The Fund had a strong year and enjoyed an improvement in returns generally
across the board. For the 12 months ending October 31, 1996, the Fund's total
return was 16.80% for Class A shares (11.25% including the maximum 4.75%
sales charge) and 16.06% for Class B shares (11.06% including the maximum 5%
contingent deferred sales charge). Total return over the same investment
period was 16.83% for the Morgan Stanley Capital International (MSCI) World
Index(5) and 6.11% for the J.P. Morgan Global Government Bond Index.(6)
Going forward, the Fund could pick up in terms of relative performance when
the U.S. market peaks out or plateaus. At this point, in our opinion,
international markets are likely to perform relatively better because
companies in many markets are only beginning to take the sort of
rationalization measures that U.S. companies have embraced for the last 10
years.
Q WHY DO YOU THINK THE FUND HAS PERFORMED AS WELL AS IT HAS THIS YEAR?
A In general, the equity markets in which we focused met or exceeded
expectations. Positive earnings and dividend growth surprises in the U.S. and
UK were helpful to the Fund. Furthermore, this year we've seen a much more
broadly based move in equity markets, with some value stocks catching up,
particularly in continental Europe. In contrast, 1995 was an extremely good
year for growth stocks such as technology issues. This had an adverse impact
on the Fund in 1995, given the Fund's value-oriented approach, with a
dividend-yield hurdle in stock selection, and we were unable to capture much
of that high-tech growth stock boom.
The Fund also benefited from having low exposure to Japan. The Fund did not
hold any Japanese equities and the Japanese bond content was reduced last
year, which proved a good move as the yen weakened.
The performance of the Fund has been most notably enhanced by the strong
performance of the higher-yielding European bond markets this year. In
particular, Italian bonds have risen dramatically as yields have declined in
the face of falling inflation and an improving fiscal backdrop. The political
move toward European Monetary Union (EMU) has also pushed Italian yields
lower as speculation over the likelihood of full participation has risen.
Elsewhere, the portfolio has benefited from core positions in mainstream
European markets such as Germany, and in the North American bloc. European
bonds outperformed those in the U.S. as yields rose rapidly in the first half
of 1996 on the back of a pickup in U.S. growth. More recently, the portfolio
has increased the U.S. exposure at the expense of Europe, taking advantage of
the high yields in the U.S.
Q WHICH STOCKS HAVE DONE WELL FOR THE FUND?
A A number of companies performed well for the Fund. In particular, Bristol
Meyers Squibb enjoyed very substantial cost savings from the combined group.
The purchase took place when sentiment was very depressed for the
pharmaceutical and health care sectors in the early 1990s. The Fund was
fortunate to purchase shares at a time when there was a very attractive
dividend yield, major dividend growth potential from the cost savings, plus a
rerating.
Another attractive company, Monsanto, a specialty U.S. chemicals company, has
been a big beneficiary of a more competitive dollar, and is also part of the
Fund's current strategy of concentrating on industrials with improving
returns on equity.
Elektrowatt, the Swiss power utility, has been diversifying its prodigious
cash flows into an industrial services subsidiary. It has a dividend yield
Continued p.4
(5) MSCI World Index is an arithmetic average, weighted by market value, of the
performance of 1,561 securities listed on major world stock exchanges--
the U.S., Europe, Canada, Australia, New Zealand and the Far East. It
includes the effect of reinvested dividends and is measured in U.S. dollars.
(6) J.P. Morgan Global Government Bond Index is an arithmetic average, weighted
by market value, of government bonds from 13 major bond markets.
It includes the effect of reinvested coupons and is measured in U.S.
dollars.
The indices are unmanaged, not available for direct investment and do not incur
sales charges and professional management fees.
3
<PAGE>
INTERVIEW WITH THE PORTFOLIO MANAGERS CONTINUED
of just under 3% at a time when Swiss inflation is just 1%. Meanwhile, the
company is growing its dividend at 5% or 6% per annum, so we find there is a
very attractive real yield opportunity. Elektrowatt is an example of a
company that in the past was a big, sleepy utility and is now making rational
use of its cash flow.
Finally GKN, a UK auto components business with a global market position, is
an example of an industrial conglomerate focusing on core businesses and
improving returns.
Q HAS THE FUND BENEFITED FROM THE INCREASING EMPHASIS BY EUROPEAN COMPANIES
ON SHAREHOLDER VALUE?
A The trend toward continental European companies' greater awareness of
shareholder value has been a major benefit to this portfolio, which had a
significant weighting in continental European equities. We've been responding
to good value in continental Europe for some time, and have waited for that
value to be released. One of the factors that triggered the release is
companies behaving in a much more rational, shareholder friendly fashion.
That's been particularly true of the German exposure we have, where a number
of key stocks have espoused shareholder friendly policies. This has also been
true of chemical companies like Bayer and BASF, but also of diversified
utility companies like VEBA.
Q HOW WOULD YOU DESCRIBE YOUR EQUITY INVESTMENT STRATEGY?
A We take a three-step approach to investing. First we screen for dividend
yield, by reviewing the Morgan Stanley equity universe for all stocks
offering a historic dividend yield above the average. We then examine the
resulting universe for companies offering participation in industries or
themes we favor. We also consider stocks that are attractive on other
valuation criteria. Under normal circumstances, the equity portion of the
Fund is invested primarily in companies with market capitalizations of at
least US$1 billion.
Q WHAT IS THE FUND'S CURRENT INVESTMENT FOCUS?
A In terms of industries, there are three areas of focus for this Fund, and
one or two areas where we are deliberately less exposed. We are looking for
1) companies that act as bond market proxies, which generally include
financial companies and, to a lesser extent, utilities. Within the
financials, the Fund concentrates largely on banks and insurance companies
that typically do well when inflation is low and bond yields are falling. To
the extent that bond markets have rallied this year, it has been positive for
that sector of the Fund; 2)industrial cyclicals, particularly in Europe,
which include chemical, engineering and diversified industrial companies. We
expect the greatest release of shareholder value from these types of
sprawling industrial conglomerates in Europe as a result of their more
focused management approach; and 3) we also have substantial exposure to a
number of the big, integrated oil companies and are attracted to the cash
generative characteristics of companies like Shell.
On the other hand, the Fund is light in pure consumer companies because we
don't expect a return to strong pricing conditions for those companies. The
Fund is also underweighted in real estate and telecom.
In terms of geographic regions, the Fund has had a structural underweighting
in the U.S. market for several years. Despite the strong performance of the
U.S. market last year, we find it encouraging that this year the U.S. market
has only gone up by roughly the same amount as the rest of the world. In this
respect, we are beginning to see a transition in market performance, away
from pure U.S. leadership to more of a balance of separate returns.
Q WERE THERE ANY SIGNIFICANT CHANGES TO THE FUND'S GEOGRAPHIC ALLOCATIONS?
A The most significant change to the Fund's holdings over the last three to
four months has been the exit from the Hong Kong stock market, where we've
had up to approximately 4% of the portfolio in the past. While we feel there
is a bit of momentum left in the market, we wanted to use it to exit out
rather than to build up the Fund's position. Moreover, the Fund has a value
and yield orientation. Given this objective, we feel comfortable being out of
Hong Kong in the run up to the handover of the colony to the Chinese in 1997.
Q WHERE DO YOU SEE OPPORTUNITIES GOING FORWARD?
A While we've cut the Fund's position in Hong Kong, the money has stayed in
Asia and the Pacific Rim (Australia and New Zealand, in particular). In our
opinion, Australia and New Zealand are two of the world's cheapest stock
markets from a statistical valuation analysis. They have a very low price to
earnings (P/E) ratio relative to the rest of the world (a P/E of 10x or 11x,
versus 17x or 18x for the world) and very high dividend yields (4%-5%), in
addition to declining bond yields and attractive trade fundamentals. Bond
yields are declining because the inflation experience of these countries is
improving. Furthermore, both economies are major exporters of capital goods
and commodities to the rest of Asia, so to the extent that
Continued p.5
4
<PAGE>
INTERVIEW WITH THE PORTFOLIO MANAGERS CONTINUED
the rest of Asia is growing rapidly, Australia and New Zealand are big
beneficiaries.
In terms of themes, our expectations are for continued sluggishness in global
economic growth--we believe growth is slowing in the U.S., while in Europe
growth may pick up a bit. As a result, we think inflation is likely to stay
lower than expectations over the next two to three years, and that, over that
period, bond markets are likely to continue to deliver fairly attractive
returns. Therefore, the bond proxy sectors in which this Fund invests could
also do quite well. Eventually, when we reach the bottom of the interest rate
and inflation expectations cycle, it will be necessary to make a shift in the
portfolio structure; however, at the moment we're happy to go with this trend.
Looking forward on the bond side, we continue to find the North American bloc
attractive as growth remains relatively mild and inflation does not appear to
threaten.
We believe the performance of peripheral markets, such as Canada and
Australia, may also add value, both from a bond perspective and the likely
pickup in the currencies relative to the U.S. dollar. Across Europe, we
believe the higher yielding markets are beginning to look somewhat overvalued
as the EMU bandwagon gathers pace. The portfolio remains a selective holder
of a number of these markets, with a view to reducing exposure gradually
where appropriate. With the European economies beginning to show gradual
signs of life, the inevitable issue, in our opinion, is the timing of an
interest rate increase by the Bundesbank. This appears likely by the middle
of 1997, suggesting European yields are unlikely to fall dramatically further
from current levels.
GEOGRAPHIC ALLOCATION OF NET ASSETS
Asia-Pacific 9.2
Germany 14.6
UK 19.2
North America & Other 26.6
Other Europe 30.4
Allocations may change as market conditions change.
A complete listing may be found in the financial statements
of this report.
ABOUT THE PORTFOLIO MANAGERS
NICK J. TRAIN -- Portfolio Manager for Chancellor LGT Asset Management since
1984; Investment Analyst since 1981. Prior to joining Chancellor LGT, Mr.
Train received his B.A. from Oxford University.
PAUL GRIFFITHS -- Portfolio Manager for Chancellor LGT Asset Management since
1994. Prior to joining Chancellor LGT, Mr. Griffiths was a Fixed Income Fund
manager at Lazard Investors from 1993-94 and Sanwa International PLC from
1991-93. He received his B.Sc from the University of York.
5
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
SECTOR ALLOCATION OF NET ASSETS AS OF OCTOBER 31, 1996%
EQUITY FIXED INCOME INVESTMENTS
Finance 22.8 Gov't & Gov't Agency Obligations 25.6
Energy 12.9 Corporate Bonds 4.5
Services 6.4 Short-Term & Other 5.1
Materials/Basic Industry 6.3
Consumer Non-Durables 5.7
Health Care 3.7
Capital Goods 3.4
Consumer Durables 1.9
Multi Industry/Misc. 1.4
Technology 0.3
<TABLE>
<CAPTION>
GT GLOBAL GROWTH & INCOME FUND
% of
KEY PORTFOLIO HOLDINGS(7) Country Net Assets
<S> <C> <C>
ELEKTROWATT AG A holding company that operates subsidiaries which generate and Switzerland 2.6
sell electricity; the company also has interests in hydro and nuclear power plants.
TELECOM CORPORATION OF NEW ZEALAND LTD. This full-service telecommunications New Zealand 2.3
company provides local, national and international telephone activities that offer
cellular, directories, leased circuits, mobile radio, paging and data
communications.
BRISTOL MEYERS SQUIBB CO. This well-established company offers a wide range of U.S. 2.2
prescription and non-prescription drugs, medical devices, health and skin care
products, toiletries and beauty aids.
ROYAL DUTCH PETROLEUM CO. One of the largest oil companies worldwide, Royal Netherlands 2.1
Dutch is a key player in the energy industry, both within Europe and on a global
basis. Its success is based on a proven track record of exploration, together
with well-run marketing and chemical activities.
ROYAL & SUN ALLIANCE INSURANCE GROUP PLC The holding company for multi-national UK 2.1
insurance companies Sun Alliance Group Plc and Royal Insurance Holdings.
SWISS BANK CORP. Offering a broad range of banking operations, including Switzerland 2.0
foreign exchange and bank note dealings, precious metal trading, mortgages and
building loans, Swiss Bank has operations throughout Switzerland and an
extensive network of international subsidiaries.
GKN PLC The premier UK engineering company, GKN holds high market shares in UK 1.9
niche areas such as constant velocity joints for autos and industrial pallets.
UNION BANK OF SWITZERLAND Provides a wide range of banking and financial Switzerland 1.5
services including retail banking and basic banking services, corporate finance,
merchant banking, investment counseling and portfolio management, trading,
and risk management. The company also invests in real estate.
AVON PRODUCTS, INC. A worldwide manufacturer and direct seller of beauty U.S. 1.5
products, fragrances, fashion jewelry and other goods. The company markets
its products in 119 countries through its network of approximately 1.7 million
independent sales representatives.
CS HOLDING AG Provides universal bank services in Switzerland, investment, Switzerland 1.5
trust and management services and life insurance through its subsidiaries.
It is the parent company of Credit Suisse, CS First Boston, Elektrowatt and
CS Life.
</TABLE>
(7)There is no assurance the Fund will continue to hold these or any other
securities mentioned in this report.
6
<PAGE>
GT GLOBAL
GROWTH &
INCOME FUND
FINANCIAL
STATEMENTS
<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, 1996, 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, 1996, 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, 1996, 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 13, 1996
F1
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
PORTFOLIO OF INVESTMENTS
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
% OF NET
EQUITY INVESTMENTS COUNTRY SHARES VALUE ASSETS
- ---------------------------------------------------------- -------- -------------- ------------ -------------
<S> <C> <C> <C> <C>
Finance (22.8%)
Royal & Sun Alliance Insurance Group PLC ............... UK 2,081,400 $ 14,274,489 2.1
INSURANCE - MULTI-LINE
Schweizerischer Bankverein (Swiss Bank Corp.) .......... SWTZ 69,590 13,425,103 2.0
BANKS-MONEY CENTER
Union Bank of Switzerland - Bearer ..................... SWTZ 10,652 10,160,837 1.5
BANKS-MONEY CENTER
CS Holding AG - Registered ............................. SWTZ 98,500 9,852,341 1.5
BANKS-MONEY CENTER
AEGON N.V. ............................................. NETH 187,875 9,553,717 1.4
INSURANCE-LIFE
First Tennessee National Corp. ......................... US 245,400 8,926,425 1.3
BANKS-REGIONAL
ABN AMRO Holding N.V. .................................. NETH 151,374 8,553,866 1.3
BANKS-REGIONAL
ING Groep N.V. ......................................... NETH 264,262 8,237,263 1.2
OTHER FINANCIAL
Commonwealth Bank of Australia ......................... AUSL 757,700 7,113,005 1.1
BANKS-SUPER REGIONAL
American General Corp. ................................. US 170,000 6,332,500 0.9
INSURANCE-LIFE
IKB Deutsche Industriebank AG .......................... GER 33,700 6,123,629 0.9
BANKS-REGIONAL
Lloyds Abbey Life PLC .................................. UK 599,000 6,115,726 0.9
INSURANCE-LIFE
National Westminster Bank PLC .......................... UK 471,800 5,385,091 0.8
BANKS-MONEY CENTER
Deutsche Bank AG ....................................... GER 112,500 5,213,922 0.8
BANKS-MONEY CENTER
Generale de Banque S.A. ................................ BEL 14,762 5,162,201 0.8
BANKS-MONEY CENTER
General Accident PLC ................................... UK 400,000 4,764,074 0.7
INSURANCE - PROPERTY-CASUALTY
Kredietbank N.V. ....................................... BEL 12,980 4,195,492 0.6
BANKS-REGIONAL
Fortis Amev N.V. ....................................... NETH 135,042 4,034,311 0.6
OTHER FINANCIAL
Commercial Union PLC ................................... UK 361,550 3,823,747 0.6
INSURANCE - MULTI-LINE
Mercury Asset Management Group PLC ..................... UK 196,698 3,614,878 0.5
INVESTMENT MANAGEMENT
M & G Group PLC ........................................ UK 155,000 2,824,601 0.4
INVESTMENT MANAGEMENT
Banco de Santander S.A. ................................ SPN 48,750 2,503,823 0.4
BANKS-MONEY CENTER
Dresdner Bank AG ....................................... GER 72,350 1,936,154 0.3
BANKS-MONEY CENTER
Gerrard & National Holdings PLC ........................ UK 375,880 1,608,468 0.2
SECURITIES BROKER
Realty Development Corp., Ltd. "A" ..................... HK 5,000 19,142 --
REAL ESTATE
</TABLE>
The accompanying notes are an integral part of the financial statements.
F2
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
PORTFOLIO OF INVESTMENTS (cont'd)
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
% OF NET
EQUITY INVESTMENTS COUNTRY SHARES VALUE ASSETS
- ---------------------------------------------------------- -------- -------------- ------------ -------------
<S> <C> <C> <C> <C>
Finance (Continued)
Generale de Banque Strip VVPR .......................... BEL 1,342 $ 861 --
BANKS-MONEY CENTER
------------
153,755,666
------------
Energy (12.9%)
Elektrowatt AG ......................................... SWTZ 45,508 17,306,164 2.6
ELECTRICAL & GAS UTILITIES
Royal Dutch Petroleum Co. .............................. NETH 87,050 14,372,406 2.1
OIL
Exxon Corp. ............................................ US 91,300 8,091,463 1.2
OIL
Electrabel S.A. ........................................ BEL 34,760 8,073,866 1.2
ELECTRICAL & GAS UTILITIES
Mobil Corp. ............................................ US 63,800 7,448,650 1.1
OIL
Shell Transport & Trading Co., PLC ..................... UK 358,800 5,881,728 0.9
OIL
RWE AG ................................................. GER 134,620 5,545,269 0.8
ELECTRICAL & GAS UTILITIES
Reunies Electrobel & Tractebel S.A. .................... BEL 11,587 5,520,274 0.8
ELECTRICAL & GAS UTILITIES
Pacific Gas and Electric Co. ........................... US 220,000 5,170,000 0.8
ELECTRICAL & GAS UTILITIES
Elf Aquitaine .......................................... FR 52,475 4,197,589 0.6
OIL
Groupe Bruxelles Lambert S.A. .......................... BEL 31,025 3,856,974 0.6
OIL
British Gas PLC ........................................ UK 459,500 1,427,994 0.2
GAS PRODUCTION & DISTRIBUTION
------------
86,892,377
------------
Services (6.4%)
Telecom Corporation of New Zealand Limited: ............ NZ -- -- 2.3
TELEPHONE NETWORKS
Common ............................................... -- 2,614,200 13,588,663 --
ADR{\/} .............................................. -- 19,000 1,581,750 --
McGraw-Hill, Inc. ...................................... US 162,000 7,593,750 1.1
BROADCASTING & PUBLISHING
United News & Media PLC ................................ UK 639,291 7,010,773 1.0
BROADCASTING & PUBLISHING
Dun & Bradstreet Corp. ................................. US 109,800 6,354,675 0.9
BROADCASTING & PUBLISHING
Royal PTT Nederland N.V. ............................... NETH 112,735 4,078,681 0.6
TELEPHONE NETWORKS
EMI Group PLC .......................................... UK 158,900 3,121,896 0.5
LEISURE & TOURISM
------------
43,330,188
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F3
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
PORTFOLIO OF INVESTMENTS (cont'd)
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
% OF NET
EQUITY INVESTMENTS COUNTRY SHARES VALUE ASSETS
- ---------------------------------------------------------- -------- -------------- ------------ -------------
<S> <C> <C> <C> <C>
Materials/Basic Industry (6.3%)
Western Mining Corporation Holdings Ltd. ............... AUSL 1,437,900 $ 9,033,151 1.3
METALS - NON-FERROUS
CSR Ltd. ............................................... AUSL 2,405,200 8,078,942 1.2
BUILDING MATERIALS & COMPONENTS
Solvay S.A. "A" ........................................ BEL 11,754 7,042,218 1.1
CHEMICALS
Akzo Nobel N.V. ........................................ NETH 51,450 6,481,651 1.0
CHEMICALS
Monsanto Co. ........................................... US 160,500 6,359,813 0.9
CHEMICALS
BASF AG ................................................ GER 180,800 5,782,159 0.8
CHEMICALS
------------
42,777,934
------------
Consumer Non-Durables (5.7%)
Avon Products, Inc. .................................... US 182,000 9,873,500 1.5
PERSONAL CARE/COSMETICS
EMAIL Ltd. ............................................. AUSL 3,264,200 8,973,124 1.3
HOUSEHOLD PRODUCTS
Philip Morris Cos., Inc. ............................... US 85,000 7,873,125 1.2
FOOD
Universal Corp. ........................................ US 280,500 7,643,625 1.1
TOBACCO
Brown-Forman Corp. "B" ................................. US 93,600 4,048,200 0.6
BEVERAGES - ALCOHOLIC
------------
38,411,574
------------
Health Care (3.7%)
Bristol Myers Squibb Co. ............................... US 138,700 14,667,525 2.2
PHARMACEUTICALS
Bayer AG ............................................... GER 258,600 9,777,383 1.5
PHARMACEUTICALS
------------
24,444,908
------------
Capital Goods (3.4%)
General Electric PLC ................................... UK 1,473,000 9,095,404 1.4
AEROSPACE/DEFENSE
BICC PLC ............................................... UK 1,559,172 7,420,400 1.1
INDUSTRIAL COMPONENTS
Lockheed Martin Corp. .................................. US 69,545 6,232,971 0.9
AEROSPACE/DEFENSE
------------
22,748,775
------------
Consumer Durables (1.9%)
GKN PLC ................................................ UK 685,800 12,888,041 1.9
------------
AUTO PARTS
Multi-Industry/Miscellaneous (1.4%)
VEBA AG ................................................ GER 170,200 9,083,556 1.4
------------
CONGLOMERATE
</TABLE>
The accompanying notes are an integral part of the financial statements.
F4
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
PORTFOLIO OF INVESTMENTS (cont'd)
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
% OF NET
EQUITY INVESTMENTS COUNTRY SHARES VALUE ASSETS
- ---------------------------------------------------------- -------- -------------- ------------ -------------
<S> <C> <C> <C> <C>
Technology (0.3%)
Alcatel Alsthom Compagnie Generale d'Electricite ....... FR 21,860 $ 1,864,976 0.3
TELECOM TECHNOLOGY
------------ -----
TOTAL EQUITY INVESTMENTS (cost $317,278,795) ............. 436,197,995 64.8
------------ -----
<CAPTION>
PRINCIPAL % OF NET
FIXED INCOME INVESTMENTS CURRENCY AMOUNT VALUE ASSETS
- ---------------------------------------------------------- -------- -------------- ------------ -------------
<S> <C> <C> <C> <C>
Government & Government Agency Obligations (25.6%)
Australia (2.0%)
Australian Government, 7.5% due 7/15/05 .............. AUD 16,500,000 13,198,170 2.0
Canada (0.6%)
Canadian Government, 8.75% due 12/1/05 ............... CAD 5,000,000 4,348,475 0.6
Denmark (1.1%)
Kingdom of Denmark, 8% due 3/15/06 ................... DKK 40,000,000 7,409,447 1.1
Germany (5.9%)
Deutschland Republic:
6.75% due 4/22/03 .................................. DEM 23,000,000 16,167,173 2.4
6.25% due 1/4/24 ................................... DEM 23,000,000 14,113,222 2.1
Bundesschatzanweisungen, 6.875% due 12/2/98 .......... DEM 7,000,000 4,907,956 0.7
Treuhandanstalt, 6.375% due 7/1/99 ................... DEM 7,000,000 4,888,067 0.7
Italy (3.2%)
Italian Buoni Poliennali del Tesoro (BTPS):
10.5% due 4/15/98 .................................. ITL 17,645,000,000 12,144,605 1.8
10.5% due 9/01/05 .................................. ITL 12,295,000,000 9,267,211 1.4
Spain (1.5%)
Kingdom of Spain, 10.3% due 6/15/02 .................. ESP 1,162,430,000 10,354,587 1.5
Sweden (2.4%)
Swedish Government, 6% due 2/9/05 .................... SEK 115,000,000 16,132,404 2.4
United Kingdom (3.7%)
United Kingdom Treasury:
7.75% due 9/8/06 ................................... GBP 11,895,000 19,487,111 2.9
9.5% due 1/15/99 ................................... GBP 3,000,000 5,144,717 0.8
United States (5.2%)
United States Treasury Note:
7.25% due 5/15/04 .................................. USD 8,600,000 9,109,617 1.4
7.5% due 2/15/05 ................................... USD 8,050,000 8,666,328 1.3
United States Treasury Bond:
6.25% due 8/15/23 .................................. USD 10,000,000 9,405,859 1.4
6% due 2/15/26 ..................................... USD 8,200,000 7,492,429 1.1
------------
Total Government & Government Agency Obligations (cost
$160,273,837) ........................................... 172,237,378
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F5
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
PORTFOLIO OF INVESTMENTS (cont'd)
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL % OF NET
FIXED INCOME INVESTMENTS CURRENCY AMOUNT VALUE ASSETS
- ---------------------------------------------------------- -------- -------------- ------------ -------------
<S> <C> <C> <C> <C>
Corporate Bonds (4.5%)
Germany (2.2%)
Siemens Capital Corp., 8% due 6/24/02+/+ ............. USD 4,710,000 $ 6,224,265 0.9
Deutsche Bank AG, 9% due 12/31/02+/+ ................. DEM 5,625,000 4,395,112 0.7
Commerzbank AG, Convertible Bond, 9.45% due
12/31/00+ ........................................... DEM 4,173,000 4,056,088 0.6
United Kingdom (2.3%)
Daily Mail & General Trust, Convertible Bond, 5.75%
due 9/26/03 ......................................... GBP 3,405,000 8,836,601 1.3
Land Securities PLC, Convertible Bond, 9.375% due
7/31/04 ............................................. GBP 3,485,000 6,560,600 1.0
------------
Total Corporate Bonds (cost $26,125,358) ................. 30,072,666
------------ -----
TOTAL FIXED INCOME INVESTMENTS (cost $186,399,195) ....... 202,310,044 30.1
------------ -----
<CAPTION>
% OF NET
REPURCHASE AGREEMENT VALUE ASSETS
- ---------------------------------------------------------- ------------ -------------
<S> <C> <C> <C> <C>
Dated October 31, 1996, with State Street Bank & Trust
Co., due November 1, 1996, for an effective yield of
5.55%, collateralized by $8,645,000 U.S. Treasury Bond,
7.125% due 2/15/23 (market value of collateral is
$9,130,814, including accrued interest). (cost
$8,946,379) ........................................... 8,946,379 1.3
------------ -----
TOTAL INVESTMENTS (cost $512,624,369) * ................. 647,454,418 96.2
Other Assets and Liabilities ............................. 25,799,981 3.8
------------ -----
NET ASSETS ............................................... $673,254,399 100.0
------------ -----
------------ -----
</TABLE>
- --------------
{\/} U.S. currency denominated.
+ 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 $513,138,202 and
appreciation (depreciation) is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $ 141,338,898
Unrealized depreciation: (7,022,682)
-------------
Net unrealized appreciation: $ 134,316,216
-------------
-------------
</TABLE>
Abbreviation:
ADR--American Depository Receipt
The accompanying notes are an integral part of the financial statements.
F6
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
PORTFOLIO OF INVESTMENTS (cont'd)
October 31, 1996
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at October 31, 1996, 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) ................. 4.9 2.0 6.9
Belgium (BEL/BEF) .................... 5.1 5.1
Canada (CAN/CAD) ..................... 0.6 0.6
Denmark (DEN/DKK) .................... 1.1 1.1
France (FR/FRF) ...................... 0.9 0.9
Germany (GER/DEM) .................... 6.5 8.1 14.6
Italy (ITLY/ITL) ..................... 3.2 3.2
Netherlands (NETH/NLG) ............... 8.2 8.2
New Zealand (NZ/NZD) ................. 2.3 2.3
Spain (SPN/ESP) ...................... 0.4 1.5 1.9
Sweden (SWDN/SEK) .................... 2.4 2.4
Switzerland (SWTZ/CHF) ............... 7.6 7.6
United Kingdom (UK/GBP) .............. 13.2 6.0 19.2
United States & Other (US/USD) ....... 15.7 5.2 5.1 26.0
----- ----- ----- -----
Total ............................... 64.8 30.1 5.1 100.0
----- ----- ----- -----
----- ----- ----- -----
</TABLE>
- --------------
{d} Percentages indicated are based on net assets of $673,254,399.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
OCTOBER 31, 1996
<TABLE>
<CAPTION>
MARKET VALUE
(U.S. CONTRACT DELIVERY UNREALIZED
CONTRACTS TO BUY: DOLLARS) PRICE DATE APPRECIATION
- ---------------------------------------- ------------ -------- -------- ------------
<S> <C> <C> <C> <C>
French Francs........................... 978,657 5.14010 11/19/96 $ 5,913
------------ ------------
Total Contracts to Buy (Payable
amount $972,744)................... 978,657 5,913
------------ ------------
THE VALUE OF CONTRACTS TO BUY AS A PERCENTAGE OF NET ASSETS IS 0.15%.
CONTRACTS TO SELL:
- ----------------------------------------
Deutsche Marks 30,578,692 1.46710 11/29/96 912,004
French Francs 1,389,297 4.99600 11/06/96 31,840
French Francs 3,777,615 5.05905 11/19/96 37,330
Netherland Guilders 12,432,967 1.64860 11/15/96 365,771
Swiss Francs 14,014,758 1.23274 12/19/96 262,381
------------ ------------
Total Contracts to Sell (Receivable
amount $63,802,655)................ 62,193,329 1,609,326
------------ ------------
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF NET ASSETS IS 9.24%.
Total Open Forward Foreign Currency
Contracts.......................... $1,615,239
------------
------------
</TABLE>
- --------------
See Note 1 to the financial statements.
The accompanying notes are an integral part of the financial statements.
F7
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
STATEMENT OF ASSETS
AND LIABILITIES
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Assets:
Investments in securities, at value (cost $512,624,369) (Note 1)............................. $647,454,418
U.S. currency..................................................................... $ 756
Foreign currencies (cost $44,124)................................................. 44,048 44,804
---------
Receivable for Fund shares sold.............................................................. 20,169,512
Interest and interest withholding tax reclaims receivable.................................... 5,131,683
Receivable for open forward foreign currency contracts, net (Note 1)......................... 1,615,239
Dividends and dividend withholding tax reclaims receivable................................... 1,127,871
Miscellaneous receivable..................................................................... 4,762
Cash held as collateral for securities loaned (Note 1)....................................... 109,660,818
-----------
Total assets............................................................................... 785,209,107
-----------
Liabilities:
Payable for Fund shares repurchased (Note 2)................................................. 1,082,087
Payable for investment management and administration fees (Note 2)........................... 534,801
Payable for service and distribution expenses (Note 2)....................................... 401,630
Payable for printing and postage expenses.................................................... 106,632
Payable for transfer agent fees (Note 2)..................................................... 61,755
Payable for professional fees................................................................ 49,075
Payable for custodian fees (Note 1).......................................................... 22,818
Payable for registration and filing fees..................................................... 13,380
Payable for fund accounting fees (Note 2).................................................... 12,818
Payable for Directors' fees and expenses (Note 2)............................................ 4,464
Other accrued expenses....................................................................... 4,430
Collateral for securities loaned (Note 1).................................................... 109,660,818
-----------
Total liabilities.......................................................................... 111,954,708
-----------
Net assets..................................................................................... $673,254,399
-----------
-----------
Class A:
Net asset value and redemption price per share ($286,203,273 DIVIDED BY 40,255,902 shares
outstanding).................................................................................. $ 7.11
-----------
-----------
Maximum offering price per share (100/95.25 of $7.11) *........................................ $ 7.46
-----------
-----------
Class B:+
Net asset value and offering price per share ($383,966,080 DIVIDED BY 53,993,849 shares
outstanding).................................................................................. $ 7.11
-----------
-----------
Advisor Class:
Net asset value, offering price per share, and redemption price per share ($3,085,046 DIVIDED
BY 434,291 shares outstanding)................................................................ $ 7.10
-----------
-----------
Net assets consist of:
Paid in capital (Note 4)..................................................................... $544,529,295
Undistributed net investment income.......................................................... 755,291
Accumulated net realized loss on investments and foreign currency transactions............... (8,514,803)
Net unrealized appreciation on translation of assets and liabilities in foreign currencies... 1,654,567
Net unrealized appreciation of investments................................................... 134,830,049
-----------
Total -- representing net assets applicable to capital shares outstanding...................... $673,254,399
-----------
-----------
<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.
F8
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
STATEMENT OF OPERATIONS
Year ended October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Investment income: (Note 1)
Interest income (net of foreign withholding tax of $70,369)................................ $15,829,738
Dividend income (net of foreign withholding tax of $1,768,337)............................. 15,064,935
----------
Total investment income.................................................................. 30,894,673
----------
Expenses:
Investment management and administration fees (Note 2)..................................... 6,282,438
Transfer agent fees (Note 2)............................................................... 1,236,857
Service and distribution expenses: (Note 2)
Class A...................................................................... $ 968,051
Class B...................................................................... 3,702,842 4,670,893
----------
Custodian fees (Note 1).................................................................... 456,141
Printing and postage expenses.............................................................. 170,158
Fund accounting fees (Note 2).............................................................. 162,035
Audit fees................................................................................. 57,724
Registration and filing fees............................................................... 43,188
Legal fees................................................................................. 25,986
Directors' fees and expenses (Note 2)...................................................... 16,712
Other expenses............................................................................. 23,615
----------
Total expenses before reductions......................................................... 13,145,747
----------
Expense reductions (Note 1 & 5)........................................................ (426,518)
----------
Total net expenses....................................................................... 12,719,229
----------
Net investment income........................................................................ 18,175,444
----------
Net realized and unrealized gain on investments and foreign currencies: (Note 1)
Net realized gain on investments............................................... 11,446,471
Net realized gain on foreign currency transactions............................. 4,285,938
----------
Net realized gain during the year........................................................ 15,732,409
Net change in unrealized appreciation on translation of assets and liabilities
in foreign currencies......................................................... 1,957,055
Net change in unrealized appreciation of investments........................... 62,236,320
----------
Net unrealized appreciation during the year.............................................. 64,193,375
----------
Net realized and unrealized gain on investments and foreign currencies....................... 79,925,784
----------
Net increase in net assets resulting from operations......................................... $98,101,228
----------
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F9
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1996 1995
------------ ------------
Increase (Decrease) in net assets
Operations:
Net investment income...................................................... $ 18,175,444 $ 22,728,600
Net realized gain (loss) on investments and foreign currency
transactions.............................................................. 15,732,409 (17,910,394)
Net change in unrealized appreciation (depreciation) on translation of
assets and liabilities in foreign currencies.............................. 1,957,055 (583,752)
Net change in unrealized appreciation of investments....................... 62,236,320 32,281,086
------------ ------------
Net increase in net assets resulting from operations..................... 98,101,228 36,515,540
------------ ------------
Class A:
Distributions to shareholders: (Note 1)
From net investment income................................................. (9,963,848) (10,790,288)
From net realized gain on investments...................................... (1,766,763) (506,546)
Class B:
Distributions to shareholders: (Note 1)
From net investment income................................................. (10,894,963) (10,618,028)
From net realized gain on investments...................................... (2,225,842) (580,255)
Advisor Class:
Distributions to shareholders: (Note 1)
From net investment income................................................. (65,132) (18,236)
From net realized gain on investments...................................... (5,890) --
------------ ------------
Total distributions...................................................... (24,922,438) (22,513,353)
------------ ------------
Capital share transactions: (Note 4)
Increase from capital shares sold and reinvested........................... 237,835,679 150,425,919
Decrease from capital shares repurchased................................... (279,569,655) (199,707,569)
------------ ------------
Net decrease from capital share transactions............................. (41,733,976) (49,281,650)
------------ ------------
Total increase (decrease) in net assets...................................... 31,444,814 (35,279,463)
Net assets:
Beginning of year.......................................................... 641,809,585 677,089,048
------------ ------------
End of year................................................................ $673,254,399* $641,809,585**
------------ ------------
------------ ------------
<FN>
- --------------
* Includes undistributed net investment income of $755,291.
** Includes undistributed net investment income of $3,503,788.
</TABLE>
The accompanying notes are an integral part of the financial statements.
F10
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, 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,
--------------------------------------------------------
1996 1995 1994 1993 (D) 1992
--------- --------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
Per Share Operating
Performance:
Net asset value, beginning of
period....................... $ 6.35 $ 6.21 $ 6.29 $ 5.28 $ 5.25
--------- --------- --------- --------- --------
Income from investment
operations:
Net investment income....... 0.22 0.24 0.22 0.24* 0.21*
Net realized and unrealized
gain (loss) on
investments................ 0.82 0.13 (0.03) 1.05 0.10
--------- --------- --------- --------- --------
Net increase (decrease)
from investment
operations............... 1.04 0.37 0.19 1.29 0.31
--------- --------- --------- --------- --------
Distributions to shareholders:
From net investment
income..................... (0.24) (0.22) (0.21) (0.24) (0.14)
From net realized gain on
investments................ (0.04) (0.01) (0.06) -- (0.14)
From sources other than net
investment income.......... -- -- -- (0.04) --
--------- --------- --------- --------- --------
Total distributions....... (0.28) (0.23) (0.27) (0.28) (0.28)
--------- --------- --------- --------- --------
Net asset value, end of
period....................... $ 7.11 $ 6.35 $ 6.21 $ 6.29 $ 5.28
--------- --------- --------- --------- --------
--------- --------- --------- --------- --------
Total investment return (e)... 16.80% 6.27% 3.14% 25.1% 5.9%
Ratios and supplemental data:
Net assets, end of period (in
000's)....................... $286,203 $284,069 $317,847 $251,428 $27,754
Ratio of net investment income
to average net assets........ 3.17% 3.85% 3.30% 3.3%* 4.1%*
Ratio of expenses to average
net assets:
With expense reductions
(Notes 1 & 5).............. 1.59% 1.70% 1.67% 1.8%* 1.9%*
Without expense
reductions................. 1.66% 1.74% --%** --%** --%**
Portfolio turnover rate++++... 39% 83% 117% 24% 53%
Average commission rate per
share paid on portfolio
transactions++++............. $ 0.0139 N/A N/A N/A N/A
</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 rate and average commission rate are calculated on
the basis of the Fund as a whole without distinguishing among the
classes of shares issued.
* Includes reimbursement by Chancellor LGT Asset Management, Inc. of
Fund operating expenses of $0.005 and $0.02 for the year ended October
31, 1993 and 1992, respectively. Without such reimbursements, the
expense ratios would have been 1.9% and 2.2%, and the net investment
income to average net assets would have been 3.2% and 3.7% for the
year ended October 31, 1993 and 1992, 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.
F11
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
FINANCIAL HIGHLIGHTS (cont'd)
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, 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, --------------------------
1992 YEAR JUNE 1, 1995
YEAR ENDED OCTOBER 31, TO ENDED TO
--------------------------------------------- OCTOBER 31, OCTOBER 31, OCTOBER 31,
1996 1995 1994 1993 (D) 1992 (D) 1996 1995
--------- --------- --------- --------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating
Performance:
Net asset value, beginning of
period....................... $ 6.35 $ 6.21 $ 6.29 $ 5.28 $ 5.29 $ 6.35 $ 6.24
--------- --------- --------- --------- ----------- ----------- ------------
Income from investment
operations:
Net investment income....... 0.17 0.20 0.18 0.20 0.01 0.23 0.11
Net realized and unrealized
gain (loss) on
investments................ 0.82 0.13 (0.03) 1.05 (0.02) 0.82 0.13
--------- --------- --------- --------- ----------- ----------- ------------
Net increase (decrease)
from investment
operations............... 0.99 0.33 0.15 1.25 (0.01) 1.05 0.24
--------- --------- --------- --------- ----------- ----------- ------------
Distributions to shareholders:
From net investment
income..................... (0.20) (0.18) (0.17) (0.20) -- (0.26) (0.13)
From net realized gain on
investments................ (0.03) (0.01) (0.06) -- -- (0.04) --
From sources other than net
investment income.......... -- -- -- (0.04) -- -- --
--------- --------- --------- --------- ----------- ----------- ------------
Total distributions....... (0.23) (0.19) (0.23) (0.24) -- (0.30) (0.13)
--------- --------- --------- --------- ----------- ----------- ------------
Net asset value, end of
period....................... $ 7.11 $ 6.35 $ 6.21 $ 6.29 $ 5.28 $ 7.10 $ 6.35
--------- --------- --------- --------- ----------- ----------- ------------
--------- --------- --------- --------- ----------- ----------- ------------
Total investment return (e)... 16.06% 5.57% 2.48% 24.3% (0.2)% (a) 17.19% 3.83% (a)
Ratios and supplemental data:
Net assets, end of period (in
000's)....................... $383,966 $356,796 $359,242 $150,768 $ 280 $ 3,085 $ 944
Ratio of net investment income
to average net assets........ 2.52% 3.20% 2.65% 2.6% N/A(c) 3.52% 4.20% (b)
Ratio of expenses to average
net assets:
With expense reductions
(Notes 1 & 5).............. 2.24% 2.35% 2.32% 2.5% N/A(c) 1.24% 1.35% (b)
Without expense
reductions................. 2.31% 2.39% --%** --%** --% **(c) 1.31% 1.39% (b)
Portfolio turnover rate++++... 39% 83% 117% 24% 53% 39% 83%
Average commission rate per
share paid on portfolio
transactions++++............. $ 0.0139 N/A N/A N/A N/A $ 0.0139 N/A
</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 rate and average commission rate are calculated on
the basis of the Fund as a whole without distinguishing among the
classes of shares issued.
* Includes reimbursement by Chancellor LGT Asset Management, Inc. of
Fund operating expenses of $0.005 and $0.02 for the year ended October
31, 1993 and 1992, respectively. Without such reimbursements, the
expense ratios would have been 1.9% and 2.2%, and the net investment
income to average net assets would have been 3.2% and 3.7% for the
year ended October 31, 1993 and 1992, 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.
F12
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
NOTES TO
FINANCIAL STATEMENTS
October 31, 1996
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
GT Global Growth & Income Fund ("Fund") is a separate series of GT 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. 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, and
the financial statements may include certain estimates made by management.
(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, Chancellor LGT Asset
Management, Inc. (the "Manager") 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 the
Manager 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 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
F13
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
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 counter party 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 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 to the transaction fails to deliver and causes the Fund to
subsequently invest at less advantageous prices.
(H) PORTFOLIO SECURITIES LOANED
At October 31, 1996, stocks with an aggregate value of approximately
$103,616,512 were on loan to brokers. The loans were secured by cash collateral
of $109,660,818. For international securities, cash collateral is received by
the Fund against loaned securities in an amount at least equal to 105% of the
market value of the loaned securities at the inception of each loan. This
collateral must be maintained at not less than 103% of the market value of the
loaned securities during the period of the loan. For domestic securities, cash
collateral is received by the Fund against loaned securities in an amount at
least equal to 102% of the market value of the loaned securities at the
inception of each loan. This collateral must be maintained at not less than 100%
of the market value of the loaned securities during the period of the loan. For
the year ended October 31, 1996, the Fund received $408,455 of income from
securities lending which was used to offset the Fund's custody expenses.
F14
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
(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 carry forward of
$6,939,210, 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) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investment 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.
(L) INDEXED SECURITIES
The Fund may invest in indexed securities whose value is linked either directly
or indirectly to changes in foreign currencies, interest rates, equities,
indices, or other reference instruments. Indexed securities may be more volatile
than the reference instrument itself, but any loss is limited to the amount of
the original investment.
(M) RESTRICTED SECURITIES
The Fund is permitted to invest in privately placed restricted securities. These
securities may be resold in transactions exempt from registration or to the
public if the securities are registered. Disposal of these securities may
involve time-consuming negotiations and expense, and prompt sale at an
acceptable price may be difficult.
2. RELATED PARTIES
Chancellor LGT Asset Management, Inc., is the Fund's investment manager and
administrator. On October 31, 1996, Chancellor Capital Management, Inc. merged
with LGT Asset Management, Inc., and the surviving entity was renamed Chancellor
LGT Asset Management, Inc. The Fund pays investment management and
administration fees to the Manager 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, Inc. ("GT Global"), an affiliate of the Manager, 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, 1996, GT Global retained $55,131
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 $11,699 for the year ended October 31, 1996. 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, 1996, GT Global collected CDSCs in
the amount of $1,473,414. 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%
F15
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
annually may be carried forward for reimbursement in subsequent years as long as
that Plan continues in effect.
The Manager 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 the
Manager 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
the Manager or GT Global of portions of the Fund's other operating expenses.
GT Global Investor Services, Inc. ("GT Services"), an affiliate of the Manager
and GT Global, is the transfer agent of the Fund. For performing shareholder
servicing, reporting, and general transfer agent services, GT Services 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. GT Services 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 is the pricing and accounting agent for the Fund. 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 all registered mutual funds
advised by the Manager and 0.02% to the assets in excess of $5 billion and
allocating the result according to the Fund's average daily net assets.
The Company pays each of its Directors who is not an employee, officer or
director of the Manager, 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, 1996, purchases and sales of investment
securities by the Fund, other than short-term investments and U.S. government
obligations, aggregated $221,734,292 and $306,804,136, respectively. Purchases
and sales of U.S. government obligations were $27,669,250 and $12,391,250,
respectively, for the year ended October 31, 1996.
4. CAPITAL SHARES
At October 31, 1996, 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 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 GT 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:
F16
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
CAPITAL SHARE TRANSACTIONS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, 1996 OCTOBER 31, 1995
------------------------- --------------------------
CLASS A SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------- ----------- ------------ ----------- -------------
<S> <C> <C> <C> <C>
Shares sold............................. 21,196,018 $143,350,526 11,447,072 $ 70,539,906
Shares issued in connection with
reinvestment of distributions......... 1,500,319 9,894,388 1,579,506 9,534,463
----------- ------------ ----------- -------------
22,696,337 153,244,914 13,026,578 80,074,369
Shares repurchased...................... (27,157,086) (182,477,096) (19,470,580) (119,773,578)
----------- ------------ ----------- -------------
Net decrease............................ (4,460,749) $(29,232,182) (6,444,002) $ (39,699,209)
----------- ------------ ----------- -------------
----------- ------------ ----------- -------------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, 1996 OCTOBER 31, 1995
------------------------- --------------------------
CLASS B SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------- ----------- ------------ ----------- -------------
<S> <C> <C> <C> <C>
Shares sold............................. 9,561,545 $ 63,970,280 9,868,499 $ 60,082,182
Shares issued in connection with
reinvestment of distributions......... 1,656,409 10,934,244 1,542,069 9,322,768
----------- ------------ ----------- -------------
11,217,954 74,904,524 11,410,568 69,404,950
Shares repurchased...................... (13,373,837) (89,395,191) (13,074,922) 79,926,629)
----------- ------------ ----------- -------------
Net decrease............................ (2,155,883) $(14,490,667) (1,664,354) $ (10,521,679)
----------- ------------ ----------- -------------
----------- ------------ ----------- -------------
</TABLE>
<TABLE>
<CAPTION>
JUNE 1, 1995
(COMMENCEMENT OF SALE OF
YEAR ENDED SHARES) TO OCTOBER 31,
OCTOBER 31, 1996 1995
------------------------- --------------------------
ADVISOR CLASS SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------- ----------- ------------ ----------- -------------
<S> <C> <C> <C> <C>
Shares sold............................. 1,416,928 $ 9,616,882 146,947 $ 928,364
Shares issued in connection with
reinvestment of distributions......... 10,469 69,359 2,927 18,236
----------- ------------ ----------- -------------
1,427,397 9,686,241 149,874 946,600
Shares repurchased...................... (1,141,817) (7,697,368) (1,163) (7,362)
----------- ------------ ----------- -------------
Net increase............................ 285,580 $ 1,988,873 148,711 $ 939,238
----------- ------------ ----------- -------------
----------- ------------ ----------- -------------
</TABLE>
5. EXPENSE REDUCTIONS
The Manager has directed certain portfolio trades to brokers who paid a portion
of the Fund's expenses. For the year ended October 31, 1996, the Fund's expenses
were reduced by $18,063 under these arrangements.
F17
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
NOTES
- --------------------------------------------------------------------------------
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
NOTES
- --------------------------------------------------------------------------------
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
NOTES
- --------------------------------------------------------------------------------
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
NOTES
- --------------------------------------------------------------------------------
<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 OF THE GT GLOBAL
MUTUAL FUNDS, PLEASE CONTACT YOUR INVESTMENT COUNSELOR OR CALL GT GLOBAL
DIRECTLY AT 1-800-824-1580. THE PROSPECTUS CONTAINS MORE COMPLETE
INFORMATION, INCLUDING CHARGES, EXPENSES AND RISKS. INVESTORS SHOULD READ
THE PROSPECTUS CAREFULLY BEFORE INVESTING.
GROWTH FUNDS
/ / GLOBALLY DIVERSIFIED FUNDS
GT GLOBAL WORLDWIDE GROWTH FUND
Invests around the world, including the U.S.
GT GLOBAL INTERNATIONAL GROWTH FUND
Provides portfolio diversity by investing outside the U.S.
GT GLOBAL EMERGING MARKETS FUND
Gives access to the growth potential of developing economies
/ / GLOBAL THEME FUNDS
GT GLOBAL 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
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THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENT PROSPECTUS.
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GT Global, Inc.
Fifty California Street
27th Floor
San Francisco, California
94111-4624
DATED MATERIAL
PLEASE EXPEDITE
GT GLOBAL GROWTH & INCOME FUND
G&IAR612054M.584
