<PAGE>
CHANCELLOR LGT
ASSET MANAGEMENT
OVER 25 YEARS
OF INVESTING
WORLDWIDE
GT GLOBAL
THEME FUNDS
ANNUAL REPORT
OCTOBER 31, 1996
[LOGO]
<PAGE>
GT GLOBAL
THEME FUNDS
TABLE OF CONTENTS
Message from the Chairman. . . . . . . 2
Introduction to Theme Funds. . . . . . 3
GT Global
Consumer Products
and Services Fund. . . . . . . . . . . 4
GT Global
Financial Services Fund. . . . . . . . 8
GT Global
Health Care Fund . . . . . . . . . . .12
GT Global
Infrastructure Fund. . . . . . . . . .16
GT Global
Natural Resources Fund . . . . . . . .20
GT Global
Telecommunications Fund. . . . . . . .24
Report of
Independant Accountants. . . . . . . F-1
Financials . . . . . . . . . . . . . F-2
Inside Back
List of Funds. . . . . . . . . . . Cover
The views of the Funds' management and portfolio holdings described in this
annual report are as of October 31, 1996; these views and portfolio holdings may
have changed subsequent to these dates.
<PAGE>
MESSAGE FROM THE CHAIRMAN
Dear Investor,
If the 19th century was a time of industrialization and growth, the 20th century
will likely be remembered for amazing innovations in the areas of science and
technology. Within the GT Global Theme Funds we have identified multiple
industries-from consumer products to health care and technology-we believe are
at the forefront of these discoveries, making them drivers of global growth.
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 (five out of six Funds outperformed their
respective broad-based indices excluding sales charges) 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 9 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. Because response to the
enhanced content and redesigned format of the Theme Funds' previous semiannual
report was so positive, we're especially pleased to send you this consolidated
annual review of the year ended October 31, 1996.
Should you and your adviser have any questions regarding the GT Global Theme
Funds, please call us at 800-824-1580. One of our registered representatives
will be happy to assist you.
Sincerely,
/s/ David A. Minella
David A. Minella
CHAIRMAN
GT GLOBAL MUTUAL FUNDS
2
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GT GLOBAL THEME FUNDS
GT Global Theme Funds provide investors with access to a new dimension of global
investing. Each Fund is structured to include multiple industries that, in
combination, represent important global investment themes. From health care to
natural resources to telecommunications, these themes are central to our modern
lives and form the gears that drive global growth.
As the world economy becomes ever more global, we believe it is increasingly
appropriate for investors to expand their options by investing in specific
industries as well as in regions. With GT Global Theme Funds, you and your
adviser can evaluate how one or more of these six globally diversified Funds can
help you realize your investment goals.
The Funds are based on themes we believe will continue to gain importance in the
years to come.
[GRAPHIC]
GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
Seeking to benefit from the changing needs of the new global consumer, the
Fund's portfolio invests in companies that manufacture, market, retail or
distribute consumer products and services.
GT GLOBAL FINANCIAL SERVICES FUND
Focusing globally on issuers in the financial services industries, such as
banks, brokerage and investment advisory firms and insurance companies, this
Fund concentrates on the worldwide growth potential of capital markets.
GT GLOBAL HEALTH CARE FUND
Searching out promising issuers in global health care industries, including
pharmaceutical, biotechnology, health care services, and medical technology and
supply companies around the world, this Fund emphasizes the increased health
care needs of the world's aging population and the growing demand for health
care in emerging markets.
GT GLOBAL INFRASTRUCTURE FUND
Seeking to capitalize on the growing need for energy, transportation and
communications in emerging markets and the need to upgrade existing
infrastructure in developed markets, the Fund's portfolio invests in companies
that build, upgrade and repair basic infrastructure.
GT GLOBAL NATURAL RESOURCES FUND
Focusing on companies that own, explore or develop natural resources, including
precious and base metals, fossil fuels, forest and agricultural products, the GT
Global Natural Resources Fund seeks to benefit from a rise in global industrial
production and related business and inflationary cycles.
GT GLOBAL TELECOMMUNICATIONS FUND
Concentrating on companies engaged in the development, manufacture or sale of
telecommunications services or equipment, the Fund seeks to participate in the
growth of worldwide demand for information and the means by which it travels.
3
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[PHOTO]
INVESTMENT OBJECTIVE AND CURRENT STRATEGY
The Fund seeks long-term capital growth by investing worldwide, primarily in
securities of companies that manufacture, market, retail or distribute consumer
products and services. The Fund looks for companies well positioned to benefit
from demographic and economic trends, and that have strong earnings growth and
fundamentals.
GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
PERFORMANCE SUMMARY
GT GLOBAL CONSUMER
CLASS A SHARES PRODUCTS AND SERVICES FUND MSCI World Index
12/30/94 9525 10000
9467 9852
9533 9997
9858 10481
9708 10849
9867 10943
10508 10942
11400 11492
11542 11238
12083 11567
12158 11387
11/30/95 12475 11785
12894 12132
13101 12353
13575 12431
14472 12640
15352 12939
16654 12953
16456 13021
15912 12563
17318 12710
18776 13210
10/31/96 18094 13304
Global Consumer Products
CLASS B SHARES and Services B MSCI World
12/30/94 10,000 10,000
01/30/95 9,939 9,852
02/28/95 10,009 9,997
03/31/95 10,341 10,481
04/30/95 10,175 10,849
05/31/95 10,350 10,943
06/30/95 11,015 10,942
07/31/95 11,942 11,492
08/31/95 12,082 11,238
09/30/95 12,633 11,567
10/31/95 12,712 11,387
11/30/95 13,036 11,785
12/31/95 13,467 12,132
01/31/96 13,675 12,353
02/29/96 14,164 12,431
03/31/96 15,097 12,640
04/30/96 16,012 12,939
05/31/96 17,361 12,953
06/30/96 17,153 13,021
07/31/96 16,582 12,563
08/31/96 18,040 12,710
09/30/96 19,544 13,210
10/31/96 18,428 13,304
The charts above show the performance of the GT Global Consumer Products and
Services Fund, Class A and Class B shares, versus the MSCI World Index since the
Fund's inception. The chart assumes a hypothetical $10,000 initial investment in
Class A shares and reflects all Fund expenses and the maximum 4.75% sales
charge. For Class B shares, results reflect all Fund expenses and the maximum
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 $18,485 on October 31, 1996.
AVERAGE ANNUAL TOTAL RETURNS %(1)
OCTOBER 31, 1996
Share Class Without Sales Charge(2) With Sales Charge
1-Year Life of Fund 1-Year Life of Fund
Class A(3) 48.82 41.77 41.75 38.07
Class B(3) 48.11 41.09 43.11 39.45
Advisor Class(4) 49.50 54.18 N/A N/A
(1) Figures assume reinvestment of all dividends and capital gain distributions
at net asset value.
(2) This performance data does 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 December 30, 1994.
(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.
From time to time, the Fund's investment advisor may waive some fees and/or
reimburse some expenses, without which performance would be lower. Waivers and
reimbursements are subject to change.
4
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GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
INTERVIEW WITH PORTFOLIO MANAGER DEREK WEBB
Q HOW HAS THE FUND PERFORMED IN THE PAST YEAR?
A We're very pleased with its performance. Total return from November 1,
1995, to October 31, 1996, was 48.82% for Class A shares (41.75% including the
maximum 4.75% sales charge), and 48.11% for Class B shares (43.11% including the
maximum effect of the 5% contingent deferred sales charge). To put that in
perspective, the Fund's benchmark, the Morgan Stanley Capital International
(MSCI) World Index(5) returned 16.83%.
Q HAS YOUR INVESTMENT STRATEGY CHANGED SINCE THE LAST REPORT?
A No, we're continuing our strategy of selecting companies whose earnings
growth, in our opinion, is likely to outpace expectations. Individual company
selection, as opposed to macroeconomic cycles, is the key to the Fund's
performance. We look for companies with potential for positive quarterly
earnings surprises and positive earnings revisions by Wall Street analysts. In
addition, we invest in companies we believe display strong fundamentals, such as
high return on equity, low debt and highly predictable earnings and cash flow.
We also focus on companies offering superior products or services with the
ability to consistently grow sales of those products or services.
Q WHICH STOCKS WERE STRONG, POSITIVE CONTRIBUTORS TO THE FUND'S PERFORMANCE?
A Adidas, Fila Holdings, Coachman Industries, Imax Corp., Nike, Ross Stores,
Safeway, TJX Companies, The Finish Line, and Vons were all strong contributors.
These companies represent a range of industries and were chosen for their sound
fundamentals rather than for the industry segments they represent.
Q WHY IS THE LARGEST PORTION OF THE FUND'S HOLDINGS IN U.S. EQUITIES?
A Currently, U.S. companies fit our investment strategy. The overweighted
U.S. portion of the portfolio is made up of multinational companies, meaning
companies with a significant portion of their revenues invested internationally,
and domestic U.S. companies. We currently expect to remain heavily weighted in
the U.S. because of its abundance of multinational consumer companies which we
believe are well positioned to take advantage of rising income levels in many
emerging markets. Continued p.6
OUTPERFORMANCE OF INDIVIDUAL SECTOR COMPONENTS
ONE-YEAR TOTAL RETURNS TO OCTOBER 31, 1996
GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND(6)
(CLASS A SHARES) 48.82%
RECREATION AND OTHER CONSUMER 27.34%
LEISURE AND TOURISM 21.52%
FOOD AND HOUSEHOLD PRODUCTS 15.84%
TEXTILES AND APPAREL 14.50%
MULTI-INDUSTRY 14.20%
WHOLESALE AND INTERNATIONAL TRADE -0.73%
THE GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND HAS HAD AN IMPRESSIVE RUN.
REPRESENTED ABOVE ARE SOME OF THE SECTORS IN WHICH THE FUND INVESTS. AS YOU CAN
SEE FROM THE CHART, THE FUND HAS OUTPERFORMED THESE AREAS, DEMONSTRATING, WE
BELIEVE, THAT THE FUND INVESTED IN COMPANIES WITH SUPERIOR FUNDAMENTALS THAT
OUTPERFORMED THEIR RESPECTIVE SECTORS.
Source: Various sectors represented by their respective MSCI Index. Please note
that the MSCI World Index does not fully reflect the Fund's concentration in
consumer products and services companies.
(5) The 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) Does not include the maximum 4.75% sales charge. Past performance is no
guarantee of future results.
The index is unmanaged, not available for direct investment and does not incur
sales charges and professional management fees.
5
<PAGE>
INTERVIEW WITH THE PORTFOLIO MANAGER CONTINUED
Q GROSS DOMESTIC PRODUCT (GDP) IN EMERGING MARKETS HAS BEEN RISING FASTER
THAN GDP IN THE DEVELOPED WORLD. WHAT DOES THAT MEAN FOR SALES OF CONSUMER
PRODUCTS?
A Emerging market nations have enjoyed GDP growth at an average of 5.2% per
year since 1989, while G-7 (the U.S., Japan, Germany, Italy, France, the UK and
Canada) GDP has grown at a mere 2.0%. Looking forward, the International
Monetary Fund estimates that emerging markets GDP will grow 6.3% in 1996, versus
2.4% for the developed world.
Historically, as incomes have risen, consumption has correspondingly increased.
As countries increase their wealth, consumers tend to spend a lower percentage
of their total income on basic necessities such as food, and more of their
income on luxury items. With global economic growth expected to remain healthy
over the medium term, we anticipate that global income will rise,
as it has in the past, resulting in higher consumption levels of consumer
products and services.
Q WHAT'S YOUR OUTLOOK FOR THE CONSUMER PRODUCTS AND SERVICES INDUSTRIES?
SHOULD INVESTORS EXPECT THE CURRENT LEVEL OF PERFORMANCE TO CONTINUE?
A We believe consumer products and services companies will remain attractive
investments. Often, they have distinguished franchises or name-brand products
that tend to compete more on perceived value than strictly on price. We also
find them good investments because many of them tend to have low fixed assets
and high unrestricted cash flows. High cash generation makes it possible for
them to reinvest in core businesses, make acquisitions, repurchase stock or
debt, or increase their dividends. Many consumer products are also repetitive
purchases, bought over and over, making them less dependent on business cycles.
While the Fund has performed well over the past year, emerging markets and
consumer demand can be volatile and, of course, past performance is no guarantee
of future results. However, overall, we're optimistic about the outlook for
global consumerism. Consumers need stoves and refrigerators, everyone needs new
clothes, and teenagers are likely to continue wanting the latest in
fashionable footwear.
ABOUT THE PORTFOLIO MANAGER
DEREK WEBB, CFA - Portfolio Manager for Chancellor LGT Asset Management since
1994, and a Research Analyst from 1992 to 1994. Mr. Webb received an M.B.A. from
the Wharton Business School.
GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
ALLOCATION OF NET ASSETS %
1996 1995
October 31 October 31
Services 51.0 30.7
Consumer Non-Durables 35.9 36.9
Multi-Industry/Misc. 3.2 3.0
Finance 3.1 -
Consumer Durables 1.2 12.3
Technology 1.1 -
Materials/Basic Industry 0.8 -
Health Care & Technology - 3.8
Short-Term & Other 3.7 13.3
6
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GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
GEOGRAPHIC ALLOCATION OF NET ASSETS
Asia-Pacific 0.6%
Europe 16.8%
North America & Other 82.6%
Allocations will change based on current market conditions.
A complete listing may be found in the Financial Statements section of this
report.
<TABLE>
<CAPTION>
GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND % of
KEY PORTFOLIO HOLDINGS(7) Country Net Assets
<S> <C> <C>
VONS COMPANIES, INC. Operates 325 supermarkets and food and drug combination retail stores under the names U.S. 4.5
Vons and Pavilions. The company also operates a fluid milk processing facility, an ice cream plant, a bakery
and distribution facilities for meat, grocery, produce and general merchandise to support the store network.
CENTRAL GARDEN & PET COMPANY Wholesales lawn and garden, pet and pool supplies throughout the U.S. to U.S. 3.7
retail stores such as Target, Builders Emporium and WalMart.
FOOTSTAR, INC. Owns and operates Meldisco, an operator of leased footwear departments in Kmart stores. The U.S. 3.6
company also owns and operates Footaction, a mall-based, branded athletic footwear chain.
PHILIP MORRIS COMPANIES, INC. Has five principal operating companies, which include Philip Morris USA, U.S. 3.5
Philip Morris International, Inc., Kraft Foods, Inc., Miller Brewing Company and Philip Morris Capital
Corporation. Philip Morris Capital Corporation provides financial services.
TJX COMPANIES, INC. Operates chains of off-price apparel stores and a mail order catalog business. The U.S. 3.4
company's chain of stores includes T.J. Maxx, Winners Apparel Ltd., HomeGoods and Marshalls. TJX also offers
catalog sales through Chadwick's of Boston.
JONES APPAREL GROUP, INC. Designs, markets and contracts for the manufacture of better-priced women's suits U.S. 3.4
and sportswear. The company sells its apparel under brand-names Christian Dior, Jones New York, Saville and
Ellen Kaye.
COACHMAN, INC. Develops and constructs lodging properties, under the trade name Coachman Inn, located in U.S. 3.3
Phoenix, Arizona, San Antonio, Texas, and Midwest City, Oklahoma. Innkeepers, Inc., a subsidiary, manages
the properties.
WET SEAL, INC. A specialty retailer of moderately priced casual apparel designed primarily for young women. U.S. 3.3
The company offers sportswear, dresses, accessories, swimwear, outerwear, gifts and cosmetics. Wet Seal
currently operates 364 Wet Seal and Contempo Casuals stores in 34 states and Puerto Rico.
TIFFANY & CO. Designs, manufactures and sells fine jewelry and gift items. Tiffany also sells crystal, china, U.S. 3.3
silverware and fragrances. Products are sold through Tiffany & Co. stores, and to retailers and distributors
in the U.S., Asia-Pacific, Europe, Canada and the Middle East.
EAGLE HARDWARE & GARDEN Operates 25 warehouse home improvement centers in Washington, Utah, Alaska, U.S. 3.3
Colorado, Hawaii, Oregon and Montana. The stores offer do-it-yourself and home improvement products to
professional contractors and consumers.
</TABLE>
(7) There is no assurance the Fund will continue to hold these or any other
securities mentioned in this report.
7
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[PHOTO]
INVESTMENT OBJECTIVE AND CURRENT STRATEGY
The Fund seeks long-term growth of capital primarily by investing in the equity
securities of financial services companies, including those engaged in banking,
insurance, investment management, brokerage and diversified financial
activities. The Fund invests in financial services companies we believe will
experience rising profitability, among other attributes.
GT GLOBAL FINANCIAL SERVICES FUND
PERFORMANCE SUMMARY
GT GLOBAL FINANCIAL MSCI MSCI
CLASS A SHARES SERVICES FUND World Index Banking Index
5/31/1994 9525 10000 10000
9525 9974 10012
9508 10165 10010
9950 10473 10042
9683 10200 9707
9683 10492 9971
9283 10039 9542
9075 10138 9631
8825 9987 9507
8650 10135 9550
8408 10626 9943
8583 10998 10534
9242 11094 10648
9400 11093 10141
9850 11650 10915
8/31/1995 9942 11393 10355
10117 11727 10736
9933 11544 10355
10458 11947 11041
10805 12299 11566
11007 12524 11437
10990 12602 11374
11158 12814 11648
11411 13118 11818
11537 13131 11641
11386 13200 11602
10998 12736 11369
11369 12885 11513
11781 13392 12033
10/31/1996 11941 13488 12173
CLASS B SHARES
GT Global Financial Services B
MSCI World
MSCI Banking
Month GT Global MSCI World MSCI Banking
05/31/94 10,000 10,000 10,000
06/30/94 10,000 9,974 10,012
07/31/94 9,974 10,165 10,010
08/31/94 10,437 10,473 10,042
09/30/94 10,149 10,200 9,707
10/31/94 10,149 10,492 9,971
11/30/94 9,720 10,039 9,542
12/31/94 9,493 10,138 9,631
01/31/95 9,230 9,987 9,507
02/28/95 9,046 10,135 9,550
03/31/95 8,793 10,626 9,943
04/30/95 8,968 10,998 10,534
05/31/95 9,650 11,094 10,648
06/30/95 9,816 11,093 10,141
07/31/95 10,280 11,650 10,915
08/31/95 10,367 11,393 10,355
09/30/95 10,551 11,727 10,736
10/31/95 10,350 11,544 10,355
11/30/95 10,892 11,947 11,041
12/31/95 11,255 12,299 11,566
01/31/96 11,458 12,524 11,437
02/29/96 11,431 12,602 11,374
03/31/96 11,607 12,814 11,648
04/30/96 11,863 13,118 11,818
05/31/96 12,004 13,131 11,641
06/30/96 11,837 13,200 11,602
07/31/96 11,431 12,736 11,369
08/31/96 11,810 12,885 11,513
09/30/96 12,233 13,392 12,033
10/31/96 12,101 13,488 12,173
The charts above show the performance of the GT Global Financial Services Fund,
Class A and Class B shares, since the Fund's inception, versus the MSCI World
Index and the MSCI Banking Index. The chart assumes a hypothetical $10,000
initial investment in Class A shares and reflects all Fund expenses and the
maximum 4.75% sales charge. For Class B shares the results reflect all Fund
expenses and the maximum 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 $13,024 on October 31,1996.
AVERAGE ANNUAL TOTAL RETURNS %(1)
OCTOBER 31, 1996
Share Class Without Sales Charge(2) With Sales Charge
1-Year Life of Fund 1-Year Life of Fund
Class A(3) 20.21 9.79 14.50 7.61
Class B(3) 19.81 9.30 14.81 8.20
Advisor Class(4) 20.87 20.46 N/A N/A
(1) Figures assume reinvestment of all dividends and capital gain distributions
at net asset value.
(2) This performance data does 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 May 31, 1994.
(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.
From time to time, the Fund's investment advisor may waive some fees and/or
reimburse some expenses, without which performance would be lower. Waivers and
reimbursements are subject to change.
8
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GT GLOBAL FINANCIAL SERVICES FUND
INTERVIEW WITH PORTFOLIO MANAGER JAMES ELLMAN
Q HOW DID THE FUND PERFORM?
A Overall, the Fund has had a strong year. For the 12 months ended
October 31, 1996, the Fund's total return was 20.21% for Class A shares (14.50%
including the maximum 4.75% sales charge) and 19.81% for Class B shares (14.81%
including the maximum 5% contingent deferred sales charge). Total return over
the same investment period was 17.55% for the Morgan Stanley Capital
International (MSCI) Banking Index(5) and 16.83% for the MSCI World Index.(6)
The industry enjoyed generally healthy investment returns across the board,
especially from the U.S. stock market. However, some of the larger Japanese
banks, Thai banks and South African banks, performed poorly.
Much of the Fund's performance can be attributed to its nearly 40% weighting in
the U.S. In addition, the Fund's holdings in the Swedish company Sparbanken
Sverige and in PT Bank Internasional Indonesia have done particularly well.
Q WHAT ARE THE FORCES DRIVING GROWTH IN THE FINANCIAL SERVICES INDUSTRY?
A On the demand side, two-thirds of the world is now industrializing. Not
only have we seen tremendous growth in emerging market GDPs, but GDP per capita
is rising faster in these markets than in developed ones. As these countries
become more affluent, their citizens are consuming more, saving more and
becoming more sophisticated in the types of financial products they require. So
while financial services is often a cyclical business in many developed markets,
it is enjoying a growth stage in emerging markets. Our enthusiasm accounts for
the Fund's substantial position in these markets.
On the supply side, the information revolution has been improving the way
financial services companies conduct their business, allowing them to increase
profits and better serve their customers.
Finally, the decline in trade barriers around the world ensures that goods and
services can move more freely across borders. As trade barriers decrease, the
best companies are able to furnish goods and services to their customers
regardless of location. We now view Hong Kong Shanghai Bank (HSBC) as a true
international competitor, along with Citicorp and ABN Amro. We believe such
large global franchises will continue to increase in value. As demand grows and
technology continues to revolutionize how banks do business, we expect them to
become more profitable and to be rewarded by higher stock prices.
Q COULD YOU DISCUSS THE ROLE OF TECHNOLOGY IN THE FINANCIAL SERVICES
INDUSTRY?
A Technology is changing the way banks set up their cost structure and
profitability targets, allowing them to significantly reduce office costs and
implement lower-cost distribution networks by scaling back on the expensive
branch system.
Historically, small banks were more profitable than large banks. They were
located in small towns and could service their customers better because they
knew them better. Today all this is changing because small banks can't keep up
with spending on technology. They are left with no real solutions other than to
sell out or lose customers and eventually go out of business. Meanwhile, larger
banks are enjoying increasing margins, which is driving consolidation. The
combined entities are often able to merge back offices, cut costs, bring in new
technology and increase margins, and so the cycle continues.
This trend in technology is gaining momentum elsewhere in the world, and we
expect consolidation and improving margins to continue and increasingly spread
to markets outside the U.S. These expectations are currently influencing our
current investment thinking in Sweden and Hong Kong, where the trend is already
in evidence.
Q COULD YOU DESCRIBE YOUR INVESTMENT PROCESS?
A We primarily look for strong franchises where earnings estimates have been
rising, the expectations of management are positive and industry analysts are
confirming that business is improving. In other words, we like strong businesses
that are getting better. We also consider companies that may be mispriced, that
is, companies where fear and uncertainty have led to stock prices at lower
levels than we feel they should be. Such opportunities are particularly
available in emerging markets. Also as part of our investment process, should we
commit to an investment we see is not working out, we move quickly and
decisively. CONTINUED P.10
(5) The MSCI World Banking is an arithmetic average, weighted by market value,
of the performance of 109 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) The 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.
The indices are unmanaged, not available for direct investment and do not incur
sales charges and professional management fees.
9
<PAGE>
INTERVIEW WITH THE PORTFOLIO MANAGER CONTINUED
In Israel, for example, we've been discouraged by the lack of focus on
shareholder value. One of the major reasons for our purchase was the potential
for privatization of large, government-owned banks, a decision that has since
been put on hold. As a result, we feel little shareholder value will be created
over the next year or two, and have therefore reduced our holdings.
Q WHAT WAS YOUR INVESTMENT STRATEGY OVER THE YEAR?
A In the U.S., we've been purchasing large companies committed to increasing
profitability by focusing on their customer base and technology. Examples
include Bank of America, Citibank, Chase and First Chicago NBD.
Outside the banking industry, the Fund did well by investing in asset managers
that had a great year on the back of more and more money coming into mutual
funds. They also benefited from market appreciation, which increased their
assets under management.
The Fund holds a significant weighting in Europe, mostly in the peripheral
nations, including large overweighted positions in Sweden, Denmark and Ireland.
Generally, we see more opportunities for consolidation in these markets, as well
as more shareholder-friendly management and a better overall environment for
financial services generally.
In Asia, the Fund's holdings include Peregrine Investments, the dominant
investment bank of Southeast Asia. In addition, the Fund holds HSBC, a Hong
Kong-based bank that has performed well for the Fund over the past six months on
the back of strong earnings reports.
Q WHAT IS YOUR OUTLOOK FOR THE FUND?
A Once the U.S. market finally ceases to outperform the rest of the world, we
expect the performance of the Fund to remain strong. Over the year, we reduced
the Fund's U.S. allocation because we are finding more compelling valuations for
banks elsewhere. For example, stock of many foreign banks can be purchased at
60%-70% of book value, while U.S. banks have already had a huge rerating and
many are at the top of historical price levels.
However, we currently expect to maintain the Fund's U.S. allocation, primarily
because we are gearing up for takeover activity. In the emerging markets, we
will continue to seek out attractive opportunities and will be watching Thailand
closely for signs of strengthening and an opportunity to get back into the
market. In Denmark and Sweden, we may look for an opportunity to increase
holdings. We anticipate consolidation in the Nordic region, which should be
positive for stock prices. In Ireland, as well, we expect the environment for
financials to be very positive.
ABOUT THE PORTFOLIO MANAGER
A. JAMES ELLMAN - Portfolio Manager for Chancellor LGT Asset Management since
1995; Investment Analyst from 1994 to 1995. Prior to joining Chancellor LGT
Asset Management, Mr. Ellman was an International Bank Examiner for the Federal
Reserve Bank of New York. He received an M.B.A. from the Harvard Graduate School
of Business.
EMERGING MARKETS
FINANCIAL SERVICES PENETRATION
Financial Service Penetration
Average Consumer Demand
GNP per capita (US$)
"Mattress Economy" 1,000 - Vietnam, Philippines
"Checking Account, ATM Card" 3,000 - Peru, South Africa
"First Mortgage" 4,000 - Uruguay, Malaysia
"Insurance, Mutual Funds" 14,000 - South Korea, Israel
"Brokerage, Foreign Investments, Private Banking" 20,000 - Singapore, Hong Kong
AS EMERGING ECONOMIES' GNP CONTINUES TO GROW, CONSUMER DEMAND FOR FINANCIAL
SERVICES INCREASES AS DOES THE LEVEL OF SOPHISTICATION OF THE PRODUCTS.
Sources: GNP/Capita, World Bank, 1995 Factbook; Financial service examples, GT
Global, Inc.
GT GLOBAL FINANCIAL SERVICES FUND
ALLOCATION OF NET ASSETS %
1996 1995
October 31 October 31
Banks-Regional 37.7 24.5
Banks-Money Center 17.2 17.2
Consumer Finance 9.6 5.2
Securities Broker 7.0 12.4
Other Financial 6.3 10.7
Investment Management 5.8 8.1
Real Estate 2.4 2.8
Insurance - Multi-Line 2.2 4.6
Short-Term & Other 11.8 14.5
10
<PAGE>
GT GLOBAL FINANCIAL SERVICES FUND
GEOGRAPHIC ALLOCATION OF NET ASSETS
Africa & Middle East 4.2%
Latin America 6.0%
Asia-Pacific 18.7%
Europe 23.1%
U.S. Canada & Other 48.0%
Allocations will change based on current market conditions.
A complete listing may be found in the Financial Statements section in this
report.
<TABLE>
<CAPTION>
GT GLOBAL FINANCIAL SERVICES FUND % OF
KEY PORTFOLIO HOLDINGS(7) COUNTRY NET ASSETS
<S> <C> <C>
BANKAMERICA CORP. Provides diverse financial products and services to individuals, businesses, government U.S. 3.0
agencies, and financial institutions throughout the world. The company's banking subsidiaries operate over
2,000 offices throughout the western and midwestern United States.
FIRST CHICAGO NBD CORP. Provides domestic retail banking, worldwide commercial banking, trust and U.S. 2.5
investment management services, and other financial services. The company operates over 700 offices
throughout the world.
CITICORP Citicorp, the parent of Citibank, provides a broad range of financial services. The company's U.S. 2.5
operations include commercial, mortgage and investment banking, trust services, consumer finance and credit
card services. The company operates in over 3,400 location in 96 countries and territories throughout the
world.
INVESCO PLC A holding company with interests primarily in investment management groups. The groups activities UK 2.5
include equity, fixed income and real estate, serving institutional, collective and individual investors
throughout the world.
UNIDANMARK A financial services company providing banking, life insurance, annuity, disability insurance DENMARK 2.4
and asset management and investment services. The Unibank subsidiary has over 280 branches, some of
which are outside Denmark.
PEREGRINE INVESTMENT HOLDINGS An investment holding company whose subsidiaries are principally HONG KONG 2.3
engaged in corporate finance, securities and commodities brokerage, investment trading and other financial
services.
ALLIANCE CAPITAL MANAGEMENT Provides investment management services internationally to institutions and U.S. 2.3
individual investors. The company offers a variety of mutual funds and cash management products.
ZAGREBACKA BANKA Croatia's second largest bank with significant investments in the industrial holdings and CROATIA 2.3
reconstructive infrastructure of the Croatian economy.
DEN DANSKE BANK One of Denmark's premier banks with commercial and retail banking activities. The DENMARK 2.2
bank has over 400 branches in Denmark, in addition to offices in Europe, Asia and North America.
BANCO LATINOAMERICANO DE EXPORTACIONES S.A. A specialized multinational bank established to finance Latin PANAMA 2.1
American and Caribbean foreign trade.
</TABLE>
(7) There is no assurance the Fund will continue to hold these or any other
securities mentioned in this report.
11
<PAGE>
[PHOTO]
INVESTMENT OBJECTIVE AND CURRENT STRATEGY
The Fund seeks long-term capital appreciation by investing primarily in equity
securities of health care companies, including those specializing in
pharmaceuticals, biotechnology, medical devices and supplies, and health care
services. The Fund's strategy is to invest in the securities of a variety of
health care companies worldwide that we believe will benefit from economic,
political and regulatory developments.
GT GLOBAL HEALTH CARE FUND
PERFORMANCE SUMMARY
GT GLOBAL MSCI Health &
HEALTH CARE Personal Care MSCI World
CLASS A SHARES FUND Index Index
8/7/1989 9525 10000 10000
9608 9856 10034
9650 10136 10347
9858 9800 10050
10200 10193 10365
10368 10522 10564
9900 10032 10219
9908 9604 9696
10184 9025 9513
10184 8897 9668
11286 9835 10734
11587 9767 11097
11612 9858 11452
10844 8937 10502
10409 7996 9870
10718 8744 10758
11445 8602 11139
11729 8784 11243
12509 9107 11550
13546 9951 12607
14326 9660 12807
14034 9737 12852
14737 9959 13214
14051 9346 12603
15045 9789 13522
15422 9759 13790
15576 10017 13950
16527 10181 14712
15902 9739 14453
18518 10450 16468
18276 10258 15572
17517 10083 15263
16344 9610 14554
15317 9745 14471
15679 10135 15087
15066 9797 14553
15679 9824 15213
15291 10065 15276
14946 9974 14813
15058 9706 14685
16007 9881 14847
16016 9963 14649
2/28/1993 15446 9998 13688
13444 10237 13239
13634 10832 13387
13720 11336 13991
14540 11599 14405
14583 11504 13779
14195 11743 13123
14298 12283 13819
14868 12058 13950
15412 12392 14359
15567 11693 14161
16433 12267 14628
17550 13078 15124
16849 12911 14542
15749 12357 13906
15714 12741 14245
15654 12776 14437
14814 12743 14446
15437 12987 14429
17030 13381 15598
17022 13031 15579
16970 13404 16022
16554 12825 16077
16481 12952 16425
17012 12760 16837
17338 12949 17335
17897 13575 18319
17450 14051 18973
17385 14174 19209
17664 14172 19974
18773 14884 20632
19127 14555 20275
20049 14982 21750
20329 14749 22406
21409 15264 23270
22573 15713 24437
23729 16000 25028
24429 16100 25041
24906 16371 25446
25097 16759 25234
25521 16777 25687
24323 16865 26469
22106 16272 25841
23920 16462 26595
25691 17109 28206
10/31/1996 25034 17232 28849
CLASS B SHARES
GT Global Health Care B
MSCI World
MSCI Health and Personal Care
Month GT Global MSCI World MSCI Health and Personal Care
04/01/93 10,000 10,000 10,000
04/30/93 10,199 10,377 10,573
05/31/93 10,802 10,618 10,886
06/30/93 10,827 10,531 10,413
07/31/93 10,532 10,750 9,917
08/31/93 10,603 11,244 10,443
09/30/93 11,020 11,038 10,542
10/31/93 11,418 11,344 10,851
11/30/93 11,520 10,704 10,702
12/31/93 12,160 11,230 11,054
01/31/94 12,983 11,972 11,430
02/28/94 12,456 11,819 10,990
03/31/94 11,640 11,312 10,509
04/30/94 11,608 11,663 10,765
05/31/94 11,563 11,695 10,910
06/30/94 10,939 11,665 10,917
07/31/94 11,389 11,889 10,904
08/31/94 12,559 12,249 11,787
09/30/94 12,552 11,929 11,773
10/31/94 12,507 12,271 12,108
11/30/94 12,199 11,741 12,150
12/31/94 12,138 11,857 12,412
01/31/95 12,525 11,681 12,724
02/28/95 12,760 11,853 13,100
03/31/95 13,169 12,427 13,843
04/30/95 12,830 12,863 14,338
05/31/95 12,781 12,975 14,516
06/30/95 12,982 12,974 15,094
07/31/95 13,785 13,625 15,592
08/31/95 14,041 13,324 15,322
09/30/95 14,712 13,715 16,436
10/31/95 14,906 13,502 16,932
11/30/95 15,694 13,973 17,585
12/31/95 16,537 14,384 18,467
01/31/96 17,381 14,647 18,913
02/29/96 17,887 14,739 18,923
03/31/96 18,234 14,987 19,230
04/30/96 18,368 15,342 19,070
05/31/96 18,668 15,358 19,412
06/30/96 17,784 15,438 20,002
07/31/96 16,158 14,895 19,528
08/31/96 17,476 15,069 20,098
09/30/96 18,763 15,662 21,316
10/31/96 17,973 15,774 21,802
The charts above show the performance of the GT Global Health Care Fund, Class A
and Class B shares, versus the MSCI World Index and the MSCI Health and Personal
Care Index since the Fund's inception. The chart assumes a hypothetical $10,000
initial investment in Class A shares and reflects all Fund expenses and the
maximum 4.75% sales charge. For Class B shares, results reflect all Fund
expenses and the maximum 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 $14,499 on October 31, 1996.
AVERAGE ANNUAL TOTAL RETURNS %(1)
OCTOBER 31, 1996
Share Class Without Sales Charge(2) With Sales Charge
1-Year 5-Year Life of Fund 1-Year 5-Year Life of Fund
Class A(3) 23.14 8.66 14.29 17.30 7.61 13.53
Class B(3) 22.59 N/A 18.32 17.59 N/A 17.78
Advisor Class(4) 23.82 N/A 29.92 N/A N/A N/A
HISTORICAL PERFORMANCE %(2)
ANNUAL TOTAL RETURNS
1989 1990 1991 1992 1993 1994 1995
Class A 8.85(3) 13.14 57.88 -13.51 2.61 0.29 36.96
Class B N/A N/A N/A N/A 21.60(3) -0.19 36.24
(1) Figures assume reinvestment of all dividends and capital gain distributions
at net asset value.
(2) This performance data does 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 August 7, 1989; Class B shares commenced on
April 1, 1993.
(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 data above represent past performance of the Fund's shares, which does not
guarantee future results. The investment return and principal value of an
investment in the Fund will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
From time to time, the Fund's investment advisor may waive some fees and/or
reimburse some expenses, without which performance would be lower. Waivers and
reimbursements are subject to change.
12
<PAGE>
GT GLOBAL HEALTH CARE FUND
INTERVIEW WITH PORTFOLIO MANAGER MIKE YELLEN
Q IT LOOKS LIKE THE FUND PERFORMED QUITE WELL OVER THE PAST YEAR.
A Yes, it's been an excellent year. The Fund's total return for the 12 months
ended October 31, 1996, was 23.14% for Class A shares (17.30% including the
maximum 4.75% sales charge). Total return for Class B shares was 22.59% (17.59%
including the effect of the 5% contingent deferred sales charge).
Q HOW HAS THE FUND PERFORMED RELATIVE TO ITS PEERS?
A As of September 30, 1996, the Fund's one-year total return for Class A
shares placed it fourth within its peer group of 19 health/biotechnology funds,
according to Lipper.(5)
Q HOW DID THE FUND PERFORM RELATIVE TO ITS BENCHMARK INDICES, THE MORGAN
STANLEY CAPITAL INTERNATIONAL (MSCI) WORLD INDEX(6) AND THE MSCI HEALTH
AND PERSONAL CARE INDEX?(7)
A Total return for the MSCI World Index for the 12 months ended October 31,
1996, was 16.83%, while the return for the MSCI Health and Personal Care Index
was 28.76% over the same investment period. It's important to remember that the
MSCI Health and Personal Care Index comprises solely health care products
companies, whereas the Fund invests in a broader category of health care
products and services companies.
Q HOW HAS HEALTH CARE PERFORMED OVERALL?
A Health care industries have traditionally performed very strongly,
basically because of sound fundamentals. The July/August market correction was,
in our opinion, a temporary setback, and actually provided some buying oppor-
tunities. The market has been recovering well since then.
Q HAVE YOU MADE ANY CHANGES TO THE FUND'S ALLOCATIONS AMONG THE INDUSTRIES?
A Yes. We've decreased our holdings in health care services and increased our
weighting in biotechnology.
Health care services are underweighted due to increasing reimbursement pressures
and/or overvaluations affecting almost all health maintenance organization (HMO)
stocks. We had large positions in United Healthcare and Pacificare, which were
both hurt in the summer correction. When they subsequently rebounded, we sold
off most of our positions to reduce the overall exposure. We're still positive
about the long-term growth prospects for the sector and the better-managed
companies; we simply think the risk factors have increased over the near term,
and earnings estimates may not be achieved.
We also don't have significant exposure in other service companies such as home
health care, nursing homes and physician practice management companies. Again,
we believe the reimbursement and regulatory environment will continue to worsen.
In fact, avoiding these types of investments is one reason we believe the Fund
has done as well as it has. We have taken a common sense approach, steering
clear of "hot" stocks. If we think the market is overpaying and the long-term
fundamentals of a stock don't make sense, we aren't interested. For now, we find
few areas in health care services attractive over the next 6 to 12 months.
Q WHY IS THE FUND OVERWEIGHTED IN BIOTECH?
A We prefer biotech companies, and have increased our weighting to 30.7% of
the portfolio. The proprietary nature of their products can translate into
increased pricing flexibility, higher profit margins and, in general, higher
quality and more stable revenue and profit streams. Continued p.14
GT GLOBAL HEALTH CARE FUND
ALLOCATION OF NET ASSETS %
1996 1995
October 31 October 31
Biotechnology 30.7 8.0
Pharmaceuticals 25.4 38.8
Medical Technology & Supplies 22.3 23.6
Health Care Services 8.2 24.0
Short-Term & Other 13.4 5.6
(5) The Fund's Class A shares ranked seventh out of eight funds for the five-
year period ended September 30, 1996. Lipper rankings do not include sales
charges. Different classes of shares are offered and their performance will
vary. Past performance is no guarantee of future results. Lipper is a
nationally recognized mutual fund research organization.
(6) The 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.
(7) The MSCI Health and Personal Care Index is an arithmetic average, weighted
by market value, of the performance of 53 securities listed on major world
stock exchanges. Index returns are given without dividends before December
1993; with dividends after December 1994. It is measured in U.S. dollars.
The indices are unmanaged, not available for direct investment and do not
include the effects of sales charges and professional management fees.
13
<PAGE>
INTERVIEW WITH THE PORTFOLIO MANAGER CONTINUED
We believe the Fund's heavier biotechnology weighting doesn't increase the risk
profile. Most of the sector weighting is in companies whose product development
risk is minimal because their products either are already approved or have had
very compelling data released based on well-designed clinical trials.
In general, however, we don't think early-stage biotech (or medical device)
companies are good long-term investments. The risk profile for early-stage
companies is simply too high and the time line until sales and earnings begin is
too long. The stocks are illiquid, and any setbacks with product development or
large sellers looking to exit can precipitate extremely poor performance.
Accordingly, we currently expect the Fund will have very minimal exposure to
early-stage companies unless they are extremely attractively valued (that is,
trading at little more than cash with a low cash-burn rate).
Instead, our biotech positions(8) are in companies that have already
commercialized (Amgen), are in the process of ramping up sales with initial
product launches (Biochem Pharma, Biogen, Centocor, Genetics Institute, Guilford
Pharmaceutical), or are within 12 months of product approval for important
drugs. In the latter case, the risk/reward profile, given previously released
data and potential market size, must also be attractive (examples are Agouron
Pharmaceuticals, Protein Design Labs and Myriad Genetics).
Within the biotech/pharmaceutical sector, companies can be split between large
cap pharmaceuticals (such as Astra, Pfizer, Merck and Zeneca) and smaller cap
plays (like TheraTech and Watson Pharmaceuticals). Although fundamentals remain
strong for large cap drugs, valuations are full and we find better buying
opportunities now in small caps that have sold off substantially from their
highs. This approach is consistent with our current strategy to add value
through underfollowed, smaller cap companies.
Q WHAT ABOUT THE MEDICAL DEVICES/SUPPLIES SECTOR?
A In medical devices/supplies, as in the biotechnology area, we seek to
minimize risk by investing in companies with large target markets whose products
have received regulatory clearance and are commercialized, or are on the verge
of receiving clearance. In that sector our choices range from niche specialty
plays (VISX) to standard value plays (Circon, Baxter, Sunrise Medical, Bard,
Vital Signs, Utah Medical Products and Research Medical) to emerging technology
plays somewhat similar to biotech companies from a risk/reward perspective (for
example, Neoprobe, Neopath, Angeion, Lifecore Biomedical, Conceptus and
Endosonics).
Q WHAT'S YOUR OUTLOOK FOR THE INDUSTRY?
A We believe the fundamentals that make health care an attractive growth
industry are straightforward. First, demographics are a powerful stimulus. The
elderly-the fastest-growing segment of the population in most developed
countries-are by far the largest consumers of health care. We feel this trend is
almost certain to continue over the next few decades. Second, innovation is
providing a constant flow of new products to meet the demands of consumers. The
result is an industry with a record of reliable growth, consistent innovation
and high returns on capital, despite attempts by governments everywhere to hold
down health care costs.
Third, we believe some of the greatest growth opportunities are in emerging
markets, especially in the dynamic Asia-Pacific region. As standards of living
improve, the portion of income spent on health care rises. Emerging nations and
regions such as China, India and Southeast Asia are spending 1%-3% of their
gross domestic product (GDP) on health care, while the developed world spends
between 10%-15% of their GDP on health care. We believe these factors will drive
growth for several decades.
ABOUT THE PORTFOLIO MANAGER
MIKE YELLEN - Portfolio Manager for Chancellor LGT Asset Management since 1996;
Investment Analyst 1994-96. Prior to joining Chancellor LGT Asset Management,
Mr. Yellen was a Senior Securities Analyst and Co-Portfolio Manager of the
Franklin Global Health Care Fund for Franklin Resources. He is a graduate of
Stanford University.
(8) All holdings are as of October 31, 1996.
14
<PAGE>
GT GLOBAL HEALTH CARE FUND
GEOGRAPHIC ALLOCATION OF NET ASSETS
Asia-Pacific 1.1%
Europe 11.5%
North America & Other 87.4%
Allocations will change based on current market conditions.
A complete listing may be found in the Financial Statements section of this
report.
<TABLE>
<CAPTION>
GT GLOBAL HEALTH CARE FUND % of
KEY PORTFOLIO HOLDINGS(9) Country Net Assets
<S> <C> <C>
AMGEN The largest company in the biotechnology industry, Amgen's growth has been driven by its two flagship U.S. 5.0
products: Epogen, which stimulates production of red blood cells (used by kidney dialysis patients);
and Neupogen, a white blood cell stimulant (used for chemotherapy patients).
PROTEIN DESIGN LABS, INC. Develops human and humanized antibodies and other novel proteins to treat certain U.S. 4.9
disease conditions, including viral infections, autoimmune conditions, inflammatory diseases and cancer.
ASTRA AB Develops, manufactures and markets pharmaceuticals for gastrointestinal diseases SWEDEN 4.5
(such as Losec, an ulcer agent) and respiratory disease agents, cardiovascular preparations, anesthetics,
agents for nervous system disorders and anti-infective agents.
BIOGEN Develops and manufactures drugs for human health care through genetic engineering. Primary focus is U.S. 4.5
on the development and testing of products used for the treatment of multiple sclerosis, inflammatory and
respiratory diseases, certain viruses and cancer.
VISX, INC. Develops and manufactures excimer laser systems designed to recontour the front surface of the U.S. 4.1
cornea of the human eye to reduce or eliminate dependence on corrective lenses. These systems are designed to
treat refractive disorders such as myopia, astigmatism and hyperopia with a procedure known as photorefractive
keratectomy.
BIOCHEM PHARMA, INC. A pharmaceutical company specializing in the research, development, manufacturing and CANADA 3.9
marketing of high-quality products for the prevention, treatment and detection of human diseases. Currently
under development are tests for detecting infectious diseases, new vaccines and compounds for treating immune
system diseases.
AGOURON PHARMACEUTICALS, INC. Designs and develops proprietary therapeutic and novel synthetic drugs U.S. 3.4
directed at developing treatments for cancer and other diseases. The company's first drug, AG-337, is in
Phase II clinical trials for treatment of solid tumors.
GENETICS INSTITUTE, INC. Develops, manufactures and commercializes protein-based pharmaceutical products using U.S. 3.2
recombinant DNA and other technologies. The company is developing products to treat anemia, hemophilia, cancer
and AIDS.
PFIZER, INC. Produces ethical drugs, hospital products, animal health items, specialty chemicals, consumer U.S. 3.0
products and mineral-based material science products. The company's products include Zoloft anti-depressant,
Zithromax antibiotic, Norvasc and Procardia cardiovascular drugs and Diflucan anti-fungal infection drug.
THERATECH, INC. Develops advanced, controlled-release drug delivery products that administer drugs through U.S. 2.8
the skin, by mouth to the gastrointestinal tract, through tissues in the oral cavity and by other means. The
company currently has over 20 products in development that span a variety of delivery technologies and
therapeutic areas.
</TABLE>
(9) There is no assurance the Fund will continue to hold these or any other
securities mentioned in this report.
15
<PAGE>
[PHOTO]
INVESTMENT OBJECTIVE AND CURRENT STRATEGY
The Fund seeks long-term growth of capital by investing in equity securities of
companies in established and emerging economies throughout the world that
design, develop or provide products and services necessary for creating and
maintaining a country's infrastructure. We continue to focus a sizable portion
of our attention on companies in emerging markets based on our belief that the
bulk of rapid infrastructure growth is in emerging nations.
GT GLOBAL INFRASTRUCTURE FUND
PERFORMANCE SUMMARY
GT GLOBAL MSCI
CLASS A SHARES INFRASTRUCTURE FUND World Index
5/31/1994 9525 10000
9567 9974
9992 10165
10400 10473
10325 10200
10392 10492
10042 10039
9817 10138
9567 9987
9308 10135
9133 10626
9625 10998
10000 11094
10292 11093
10750 11650
8/31/1995 10583 11393
10600 11727
10092 11544
10267 11947
10417 12299
10725 12524
10833 12602
10942 12814
11742 13118
12033 13131
12183 13200
11650 12736
11917 12885
12167 13392
10/31/1996 12008 13488
CLASS B SHARES
GT Global Infrastructure B
MSCI World
Month GT Global MSCI World
05/31/94 10,000 10,000
06/30/94 10,044 9,974
07/31/94 10,481 10,165
08/31/94 10,901 10,473
09/30/94 10,822 10,200
10/31/94 10,892 10,492
11/30/94 10,525 10,039
12/31/94 10,271 10,138
01/31/95 10,017 9,987
02/28/95 9,738 10,135
03/31/95 9,554 10,626
04/30/95 10,061 10,998
05/31/95 10,446 11,094
06/30/95 10,752 11,093
07/31/95 11,225 11,650
08/31/95 11,041 11,393
09/30/95 11,050 11,727
10/31/95 10,525 11,544
11/30/95 10,700 11,947
12/31/95 10,857 12,299
01/31/96 11,164 12,524
02/29/96 11,277 12,602
03/31/96 11,382 12,814
04/30/96 12,213 13,118
05/31/96 12,511 13,131
06/30/96 12,660 13,200
07/31/96 12,100 12,736
08/31/96 12,371 12,885
09/30/96 12,633 13,392
10/31/96 12,158 13,488
The charts above show the performance of the GT Global Infrastructure Fund Class
A and Class B shares since the Fund's inception versus the MSCI World Index. The
chart assumes a hypothetical $10,000 initial investment in Class A shares and
reflects all Fund expenses and the maximum 4.75% sales charge. For Class B
shares, results reflect all Fund expenses and the maximum 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 $12,100
on October 31,1996.
AVERAGE ANNUAL TOTAL RETURNS %(1)
OCTOBER 31, 1996
Share Class Without Sales Charge(2) With Sales Charge
1-Year Life of Fund 1-Year Life of Fund
Class A(3) 19.08 10.05 13.42 7.86
Class B(3) 18.37 9.51 13.37 8.41
Advisor Class(4) 19.60 14.38 N/A N/A
(1) Figures assume reinvestment of all dividends and capital gain distributions
at net asset value.
(2) This performance data does not reflect the maximum 4.75% sales charge and
the 5.0% contingent deferred sales charge for Class A and Class B shares,
respectively, which if included, would have reduced performance quoted.
(3) The Fund began operations on May 31, 1994.
(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.
From time to time, the Fund's Investment advisor may waive some fees and/or
reimburse some expenses, without which performances would be lower. Waiver and
reimbursements are subject to change.
16
<PAGE>
GT GLOBAL INFRASTRUCTURE FUND
INTERVIEW WITH PORTFOLIO MANAGER DAVID SHERRY
Q HOW DID THE FUND PERFORM?
A While the Fund has had a good year, most of the gains where achieved during
the first six months of the period. For the 12 months ended October 31, 1996,
the Fund's total return was 19.08% for Class A shares (13.42% including the
maximum 4.75% sales charge) and 18.37% for Class B shares (13.37% 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)
Q WHAT FACTORS WORKED IN FAVOR OF THE FUND?
A The Fund's returns were buoyed by the performance of U.S., Italian and
Spanish markets, in addition to general strength in Latin America. In the U.S.,
the Fund benefited from a continuation of the bull market, as well as a shift
from technology to more cyclical infrastructure-type stocks. Post-electoral
gains in Italy and Spain also worked in favor of the Fund, largely due to
expectations of lower interest rates. Specifically, DSP Communications (a
leading provider of chip sets) in the U.S. and Spain's Endesa (a major producer
and provider of electricity) and Telefonica (the dominant provider of
telecommunications services) have done particularly well.
Q WHAT IMPACT HAVE EMERGING MARKETS HAD ON THE FUND'S PERFORMANCE?
A By now the Mexican peso crisis has become a dim memory and increasing
confidence in emerging markets has been positive for the Fund. Private sector
capital flows have resumed, and even Mexico has come back into favor with
foreign investors. Even the peso's recent bout of instability, in our opinion,
is vastly different from the conditions that caused the devaluation at the end
of 1994. In fact, we believe fundamentals actually continue to favor the peso,
as monetary policy has sensibly balanced supply and demand for them.
Although we continue to believe in Asia's long-term potential, over the shorter
term, the Fund's holdings in a number of these markets detracted somewhat from
its positive returns. While regional stock markets demonstrated strong growth
over the first six months of the year, weakness was a common trend over the
remainder of the period, apart from Malaysia and Indonesia which enjoyed solid
gains over the last three months. In particular, the Korean and Thai markets
were two of the worst performers over the 12 months and affected the Fund's
performance. Korea's blue-chip companies suffered from weak earnings on the back
of disappointing export growth. As exports continued to post negative growth and
import growth refused to come down, the trade deficit expanded to US$3billion
and the current account deficit hit a record high at US$2.3billion in July.
Similarly in Thailand, stock market underperformance has been driven by poor
corporate profits and problems in their banking industry.
ASIAN INFRASTRUCTURE REQUIREMENT ESTIMATES
US$ billions
TRANSPORTATION POWER TELECOM ENVIRONMENT
1322.2 205.6 89.3 61.8
Source: Infrastructure Finance, 1995, 1996.
Q WHAT MARKETS ARE CURRENTLY IN YOUR FAVOR?
A In general, the emerging markets have enormous power needs and tremendous
potential. Pakistan is one such country and, while its stock market has had a
difficult year, we are encouraged by the World Bank's support of certain
infrastructure projects. We are also attracted by opportunities such as Hub
Power, the Fund's largest holding in Pakistan, a company that is partially owned
and managed by National Power of the UK. CONTINUED P.18
(5) The MSCI World Index is an arithmetic average, weighted by market value, of
the performance of 1,561 securities listed on the 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.
The index is unmanaged, not available for direct investment and does not include
the effects of sales charges and professional management fees.
17
<PAGE>
INTERVIEW WITH THE PORTFOLIO MANAGER CONTINUED
Q HOW HAVE PRIVATIZATIONS AFFECTED THE FUND'S PERFORMANCE?
A We've seen an increasing number of privatizations around the world as
governments have recognized that private companies can often provide
infrastructure projects with good access to capital and better management skills
- - a significant break from their traditional view of state control. Over the
past year, as this trend has become more pronounced, the Fund has benefited from
rail privatizations in Canada, New Zealand and the UK, and we anticipate further
opportunities arising from privatizations in Australia and Continental Europe.
Q COULD YOU DESCRIBE YOUR INVESTMENT STRATEGY?
A The basic strategy of the Fund is to find infrastructure opportunities at
attractive valuations. We use a number of measures to determine value, including
price-to-earnings relative to earnings growth rate, price-to-replacement value
and price-to-cash flow ratios.
No major shifts have occurred in the Fund's strategy, essentially due to the
nature of the industry. Infrastructure development tends to take place over a
long period of time, with the exception of the telecommunications sector where
dramatic changes from a technological or regulatory perspective can take place
quickly. In most other infrastructure sectors we remain focused on finding
companies we think will grow with the pace of infrastructure development around
the world.
Q LOOKING AHEAD, WHERE DO YOU EXPECT TO FIND OPPORTUNITIES?
A Emerging economies continue to stand out as areas of tremendous potential
although, over the short term, their markets can be volatile. As these nations
enjoy increasing stability and economic growth, we anticipate their needs for
infrastructure development will accelerate. We are also attracted by capital
goods producers (power plants and other infrastructure building blocks), which
we believe stand to benefit from an increase in demand for equipment to build
emerging market infrastructure.
In general, we continue to like the growth of telecom, the stability of electric
utilities, the sales potential of the capital goods side and the rationalization
opportunities in transportation. Moreover, we believe privatizations, whereby
entrepreneurial and managerial skills are applied to formerly state-run
companies, can lead to improved returns and are often attractive investments.
ABOUT THE PORTFOLIO MANAGER
DAVID L. SHERRY, CFA - Portfolio Manager for Chancellor LGT Asset Management
since 1994; Investment Analyst from 1993. Prior to joining Chancellor LGT Asset
Management, Mr. Sherry was a Senior Securities Analyst for Franklin Resources.
He received an M.B.A. from the University of California, Los Angeles.
GT GLOBAL INFRASTRUCTURE FUND
ALLOCATION OF NET ASSETS %
1996 1995
October 31 October 31
Energy 30.8 27.3
Services 27.2 20.7
Materials/Basic Industry 17.2 15.0
Capital Goods 12.9 20.7
Technology 2.7 9.3
Multi Industry/Misc. 1.6 2.2
Short-Term & Other 7.6 4.8
18
<PAGE>
GT GLOBAL INFRASTRUCTURE FUND
GEOGRAPHICAL ALLOCATION OF NET ASSETS
Middle East 8.2%
Latin America 15.2%
Asia-Pacific 18.4%
Europe 24.7%
US. & Canada 33.5%
Allocations will change based on current market conditions.
A complete listing may be found in the Financial Statements section in this
report.
<TABLE>
<CAPTION>
GT GLOBAL INFRASTRUCTURE FUND % of
KEY PORTFOLIO HOLDINGS(6) Country Net Assets
<S> <C> <C>
LA CEMENTOS NACIONAL, C.A. With a greater than 60% market share, La Cementos Nacional is Ecuador's ECUADOR 3.3
largest cement manufacturer and enjoys a virtual monopoly in much of its territory. We believe the company,
a subsidiary of Holderbank, the Swiss cement giant, has one of the best management teams in the region and
yet trades at a large discount to comparable cement companies in Latin America.
TADIRAN TELECOMMUNICATIONS LTD. A partial spin-off from Tadiran of Israel, it is a developer and supplier ISRAEL 3.2
of Wireless Local Loop systems, which, in our opinion, have major potential in emerging markets. In addition,
the company is a provider of advanced telecommunications equipment which is also sold to developing market.
MANNESMANN AG Manufactures plant and machinery equipment, automotive technology and electronic GERMANY 3.2
engineering through its subsidiaries. The company also provides telecommunication services, tube and pipe
production, and other activities.
GIANT CEMENT HOLDING Manufactures portland and masonry cement for the residential, commercial and U.S. 2.9
infrastructure construction markets. The company owns and operates two limestone quarries and manufacturing
facilities through its wholly owned subsidiaries, Giant Cement Company and Keystone Cement Company.
EDISON S.p.A. The company's activities include providing thermoelectric and co-generating services, running ITALY 2.9
power stations, and researching, producing and distributing crude oil.
COMPANIA BOLIVIANA DE ENERGIA ELECTRICA Generates, transmits, distributes and sells electricity in Bolivia. BOLIVIA 2.9
RMI TITANIUM CO. Produces titanium mill (ingot, slab, bloom, billet, bar, plate, sheet, strip and welded tube) U.S. 2.8
and fabricated products for the global market. The company's fabricated products include pipe, tube and cut
shapes, used primarily in the aerospace, oil and gas, geothermal energy production and chemical process
industries.
COMPANHIA ENERGETICA DE MINAS GERAIS (CEMIG) Provides electrical utility services for industrial, BRAZIL 2.8
commercial, residential and rural customers in the State of Minas Gerais.
ENRON GLOBAL POWER & PIPELINES L.L.C. Owns and manages the non-United States power plant and U.S. 2.7
natural gas pipeline operations of Enron Corporation. The company's interests include two power plants in
the Philippines, a power plant in Guatemala and a natural gas pipeline system in Argentina. Its activities
also include developing projects in India, Colombia and other developing countries.
DSP COMMUNICATIONS, INC. Develops chipsets and products for the wireless personal communications U.S. 2.7
services (PCS) market. The company also develops, markets, licenses and supports application-specific
integrated circuits (ASIC) and soft-ware based on digital signal processing (DSP) technology for a
variety of cellular and PCS applications.
</TABLE>
(6) There is no assurance the Fund will continue to hold these or any other
securities mentioned in this report.
19
<PAGE>
[PHOTO]
INVESTMENT OBJECTIVE AND CURRENT STRATEGY
The Fund seeks long-term growth of capital by investing in equity securities of
companies worldwide that own, develop or explore natural resources, or that
supply goods and services to such companies. Natural resources companies include
those that own, explore or develop ferrous and non-ferrous metals, strategic
metals and precious metals, chemicals, forestry products, foodstuffs, refined
products such as steel, and other basic commodities. The Fund seeks to invest in
companies we believe have potential earnings growth that outpaces expectations,
such as those growing their reserves quickly by making new discoveries or
increasing production.
GT GLOBAL NATURAL RESOURCES FUND
PERFORMANCE SUMMARY
GT GLOBAL
NATURAL
CLASS A SHARES RESOURCES MSCI World
FUND Index
5/31/1994 9525 10000
9358 9974
9658 10165
10142 10473
10475 10200
10342 10492
9783 10039
9691 10138
9098 9987
8989 10135
9023 10626
9441 10998
9566 11094
9624 11093
8/31/1995 10142 11650
10009 11393
9917 11727
9558 11544
9950 11947
10375 12299
10878 12524
11658 12602
12212 12814
13235 13118
13721 13131
13034 13200
12581 12736
13587 12885
14376 13392
10/31/1996 14627 13488
CLASS B SHARES
GT Global Natural Resources B
MSCI World
Month GT Global MSCI World
05/31/94 10,000 10,000
06/30/94 9,825 9,974
07/31/94 10,131 10,165
08/31/94 10,630 10,473
09/30/94 10,971 10,200
10/31/94 10,831 10,492
11/30/94 10,245 10,039
12/31/94 10,143 10,138
01/31/95 9,512 9,987
02/28/95 9,407 10,135
03/31/95 9,433 10,626
04/30/95 9,862 10,998
05/31/95 9,994 11,094
06/30/95 10,047 11,093
07/31/95 10,581 11,650
08/31/95 10,441 11,393
09/30/95 10,345 11,727
10/31/95 9,959 11,544
11/30/95 10,371 11,947
12/31/95 10,799 12,299
01/31/96 11,325 12,524
02/29/96 12,132 12,602
03/31/96 12,694 12,814
04/30/96 13,755 13,118
05/31/96 14,264 13,131
06/30/96 13,536 13,200
07/31/96 13,071 12,736
08/31/96 14,106 12,885
09/30/96 14,922 13,392
10/31/96 14,876 13,488
The chart above shows the performance of the GT Global Natural Resources Fund,
Class A and Class B shares, since the Fund's inception, versus the MSCI World
Index. The chart assumes a hypothetical $10,000 initial investment in Class A
shares and reflects all Fund expenses and the maximum 4.75% sales charge. For
Class B shares, results reflect all Fund expenses and the maximum 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 $15,403 on October 31, 1996.
AVERAGE ANNUAL TOTAL RETURNS %(1)
OCTOBER 31, 1996
Share Class Without Sales Charge(2) With Sales Charge
1-Year Life of Fund 1-Year Life of Fund
Class A(3) 53.04 19.40 45.77 17.02
Class B(3) 52.39 18.82 47.39 17.84
Advisor Class(4) 53.76 35.58 N/A N/A
(1) Figures assume reinvestment of all dividends and capital gain distributions
at net asset value.
(2) This performance data does 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 May 31, 1994.
(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.
From time to time, the Fund's investment advisor may waive some fees and/or
reimburse some expenses, without which performance would be lower. Waivers and
reimbursements are subject to change.
20
<PAGE>
GT GLOBAL NATURAL RESOURES FUND
INTERVIEW WITH PORTFOLIO MANAGER DEREK WEBB
Q HOW HAS THE FUND PERFORMED OVER THE PAST YEAR?
A The Fund continues to do well. Its total return for the 12 months ending
October 31, 1996, was 53.04% for Class A shares (45.77% including the maximum
4.75% sales charge). Total return for Class B shares was 52.39% (47.39%
including the effect of the 5% contingent deferred sales charge). During the
same period the Morgan Stanley Capital International (MSCI) World Index(5)
returned 16.83%. The index is designed to represent the performance of all
markets, however, and does not reflect the Fund's concentration in the natural
resources industry.
Q THE FUND IS OVERWEIGHTED IN ENERGY EQUIPMENT AND SERVICES STOCKS. CAN YOU
EXPLAIN WHY?
A As of the end of the period, energy equipment and services accounted for
26.8% of the portfolio because earnings keep coming in better than expected.
These companies have the earnings revisions, earnings surprises, earnings
momentum and relative strength that are key to our strategy. An example is
Reading and Bates, which operates offshore oil platforms. The company has done
very well because the market for these platforms has gotten very tight. As oil
companies look for oil further and further offshore, demand for these platforms
is at a premium because there is only a limited supply. Accordingly, Reading and
Bates' leasing rates have risen dramatically, and the company has shown very
strong earnings growth.
Many of the companies in our top 10 holdings fall into the energy equipment and
services group: Rowan Companies (contract drilling of oil and gas wells),
Western Atlas (supplies oilfield services and industrial automation systems),
Energy Ventures (manufactures oil well equipment), Atwood Oceanics (owns or
operates oil and gas drilling rigs), Cooper Cameron (manufactures production
equipment for oil and gas industry) and Global Marine (operates offshore
drilling rigs). All have been strong contributors to the Fund's return this year
because the prices of what they sell--whether pipes or leasing offshore drilling
platforms--are rising.
Q WHAT IS YOUR OUTLOOK FOR THE VARIOUS COMMODITIES?
A It's important to remember that our stock selection is primarily based on
company specifics and, to a lesser degree, on whether we are bullish, neutral or
bearish on the related commodity. However, based on current assessments, we
tend to feel bullish on uranium, grain prices, tin, lead, zinc and nickel. We
are neutral on gold, silver, platinum, oil and natural gas and chemicals. And we
are bearish on forest products, carbon steel, copper and aluminum.
NATIONS REFORMING MINING LAWS
AMERICAS
Argentina: 30-Year Tax Stability on Triton Energy--Colombia
Mining Investments, 1993 Benton Oil & Gas--Venezuela
Ecuador: New Mining Code introduced, 1991
Mexico: New Mining Law introduced, 1990
AFRICA
Ghana: New Minerals and Mining Law, 1986 Abacan Resource--Nigeria
Mali: New Mining Code introduced, 1991 H.J. Joel Mining--S. Africa
Zimbabwe: New Small Scale Mining
Regulations, 1991
S.E. ASIA
Philippines: Mining Law introduced, 1990 Bre-X Minerals--Indonesia
Rutherford Moran--Thailand
CENTRAL ASIA
Mongolia: Mining Law introduced, 1990
EUROPE
Sweden: New Economic Policies about Mining
Investments, 1992
Russia: New Mineral Exploration Licensing
Law, 1993
(5) The 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.
The index is unmanaged, not available for direct investment and does not incur
sales charges and professional management fees.
21
<PAGE>
INTERVIEW WITH THE PORTFOLIO MANAGER CONTINUED
Q WHAT IS YOUR STOCK SELECTION CRITERIA? HAVE YOU MADE ANY CHANGES IN YOUR
STRATEGY?
A Our strategy remains the same. We look for companies whose stock prices we
believe will increase independently of the relevant commodity prices. We look
for companies growing their reserves quickly by making new discoveries, or
increasing production quickly using new discoveries or current reserves. We
screen for companies going through major reorganizations such as cost-cutting,
spinoffs or takeovers, and select companies whose earnings growth, in our
opinion, is likely to outpace expectations. Companies with potential for
positive quarterly earnings surprises and positive earnings revisions by Wall
Street analysts are also attractive. Finally, we invest in companies we believe
display strong fundamentals, such as high return on equity, low debt and highly
predictable earnings and cash flow.
An example of a company that continues to do well because of growth in reserves
includes Bre-X Minerals, a Canadian company that has discovered a large gold
mine in Indonesia. Although the price of gold has remained flat, we believe
Bre-X's stock price has risen because of its huge growth in reserves.
Q WHERE ARE YOU FINDING GLOBAL OPPORTUNITIES?
A Many countries have rewritten their mining laws to allow foreign
participation in the realization of their mineral wealth. Not only are these
emerging markets a source of new demand for raw materials and fuel, they are
also a vast new area of supply. While keeping in mind that many emerging markets
can be volatile, we're finding opportunities in North American companies that
are taking advantage of the opening up of mineral resources in Latin American,
African, Southeast Asian and former eastern bloc markets.
At the same time, new technology is enabling companies to find huge amounts of
mineral reserves. We're keeping our eye on companies that have been taking
advantage of new technology and staking claims around the world. These new
explorations are leading to rapid growth in reserves and production, and we will
continue to seek out high-growth companies benefiting from these opportunities.
Q WHAT'S YOUR OUTLOOK FOR THE NATURAL RESOURCES SECTOR?
A We continue to feel bullish, although we realize these markets can be
volatile. We maintain our belief that global economic growth should provide a
positive environment for commodity prices.
Q WHAT WERE THE MAJOR FACTORS AFFECTING THE FUND'S PERFORMANCE?
A The Fund's strong showing over the past year can be attributed primarily to
company-specific, rather than macroeconomic, factors. Chesapeake Energy Corp.
continues to be a strong performer and is a good example of a company that meets
our investment criteria. Chesapeake, which produces natural gas in Texas and
Louisiana, is growing its reserves and production very quickly because of new
technology. Instead of drilling vertically, they're drilling horizontally, which
has led to dramatically increased production.
ABOUT THE PORTFOLIO MANAGER
DEREK WEBB, CFA -- Portfolio Manager for Chancellor LGT Asset Management since
1994, and Research Analyst from 1992 to 1994. Mr. Webb received an M.B.A. from
the Wharton Business School.
GT GLOBAL NATURAL RESOURCES FUND
ALLOCATION OF NET ASSETS %
1996 1995
October 31 October 31
Energy Equipment & Services 26.8 -
Oil 25.8 31.3
Gold 12.4 4.8
Gas Production & Distribution 11.8 -
Chemicals 4.7 12.8
Metals--Steel 4.7 7.1
Metals--Non-Ferrous 2.5 8.2
Energy Sources 1.9 -
Misc. Materials & Commodities 1.6 6.5
Transportation--Shipping 1.1 -
Miscellaneous 1.1 -
Machinery & Engineering - 9.5
Forest Products - 7.7
Food - 3.2
Short-Term & Other 5.6 8.9
22
<PAGE>
GT GLOBAL NATURAL RESOURCES FUND
GEOGRAPHIC ALLOCATION OF NET ASSETS
Africa 1.7%
Asia-Pacific 4.2%
Europe 10.5%
Canada 15.5%
U.S. & Other 68.1%
Allocations will change based on current market conditions.
A complete listing may be found in the Financial Statements section in this
report.
<TABLE>
<CAPTION>
GT GLOBAL NATURAL RESOURCES FUND % OF
KEY PORTFOLIO HOLDINGS(6) COUNTRY NET ASSETS
<S> <C> <C>
ENI SpA. SPONSORED ADR Operating in 80 countries, ENI explores for, produces, refines, transports and ITALY 6.3
markets oil and natural gas and produces chemicals. The company offers engineering and project management
services to the petroleum industry.
VERITAS DGC, INC. Provides seismic data acquisition and processing services on a worldwide basis to the U.S. 5.6
petroleum industry. The company operates seismic survey ships, land data acquisition crews and geophysical
data processing centers around the world.
ROWAN COMPANIES, INC. Performs contract drilling of oil and gas wells and provides contract and charted U.S. 3.3
aviation services to related operations. The company operates domestically offshore and onshore and in foreign
waters. Rowan owns 24 offshore rigs and 17 deep water jack-ups. The company also manufactures heavy mining,
timber and construction equipment and builds oil rigs.
BENTON OIL & GAS COMPANY Explores, develops and manages oil and gas properties. The company's properties U.S. 3.3
are located in the Gulf Coast region of Louisiana, the West Siberian region of Russia and the eastern
region of Venezuela. Benton also has operations in Oklahoma, Texas, Mississippi and California.
ABACAN RESOURCE CORP Acquires, explores for and develops oil and gas properties in Nigeria. U.S. 3.2
ENERGY VENTURES, INC. Offers oil and gas drilling services for exploration companies, including workover U.S. 3.2
and completion services on offshore rigs. The company manufactures oil well equipment, such as downhole
sucker rod pumps and downhole packers, and explores for and develops oil and gas in Louisiana, Oklahoma and
Texas.
ATWOOD OCEANICS, INC. Owns or operates oil and gas drilling rigs, with which it performs contract drilling of U.S. 3.1
exploratory and developmental wells in offshore areas, primarily outside of U.S. waters. In addition, Atwood
provides related support, management and consulting services.
WESTERN ATLAS, INC A supplier of oilfield services and industrial automation systems. The company's oilfield U.S. 3.1
services include worldwide seismic services and wireline logging for exploration, development and production
of crude oil and natural gas.
COOPER CAMERON CORP. Manufactures, markets and services production equipment for the oil and gas industry. U.S. 3.0
The company manufactures pressure control equipment such as wellheads and gate and ball valves, undersea
production systems and compression and power equipment.
GLOBAL MARINE, INC. An offshore drilling rig contractor that primarily operates in the Gulf of Mexico, the U.S. 3.0
North Sea and offshore West Africa. The company owns approximately 26 oil and gas drilling rigs and offers
offshore drilling management services.
</TABLE>
(6) There can be no assurance the Fund will continue to hold these or any other
securities mentioned in this report.
23
<PAGE>
[PHOTO]
INVESTMENT OBJECTIVE AND CURRENT STRATEGY
The Fund seeks long-term growth of capital by investing primarily in equity
securities of companies throughout the world engaged in the development,
manufacture or sale of telecommunications services or equipment. The Fund's
strategy is to invest in companies that, in our opinion, are fast growing and
innovative, including equipment providers, wireless services and emerging market
telecommunications companies.
GT GLOBAL TELECOMMUNICATIONS FUND
PERFORMANCE SUMMARY
GT GLOBAL
CLASS A SHARES TELECOMMUNICATIONS MSCI World MSCI Salomon
FUND Index Telecommunications Global Telecom
1/27/92 9525 10000 10000 10000
9467 10054 9906 9867
9617 9882 9771 10137
9533 9418 9529 9870
9608 9551 10159 10296
9767 9933 10240 10530
9342 9602 10174 9879
9467 9628 10519 10346
9300 9864 10506 10407
9050 9775 10316 10070
9300 9512 10082 10006
9733 9684 10440 10331
9987 9764 10865 10715
10266 9799 10936 10715
10527 10033 11412 11038
10696 10616 11775 12082
10865 11110 11559 12100
11355 11368 12037 12549
11827 11275 12305 12584
12258 11509 12425 12904
13364 12038 13153 13806
13583 11818 12945 13581
14284 12145 13511 14252
13549 11460 12800 13436
14746 12023 13032 14315
15399 12818 13624 15453
14944 12654 12736 14620
14025 12111 12353 13826
14257 12487 12774 13962
5/31/94 14179 12521 12865 13898
13819 12489 12823 13770
14480 12728 13225 14330
15253 13114 13661 15094
14892 12772 13288 14658
15287 13137 13601 14840
14617 12570 12693 13874
14097 12694 12682 13618
13400 12506 12991 13376
13129 12690 13007 12909
13074 13305 13287 13509
13572 13771 13484 13863
13789 13891 13716 13890
14594 13890 13970 14126
15653 14588 14330 14681
15997 14265 14685 14901
16024 14684 15591 15306
14848 14455 15439 14817
15291 14960 15571 15051
15307 15400 16091 15386
16011 15681 16405 15717
16173 15780 16304 15593
16202 16045 16098 15565
17601 16425 16651 16183
18115 16442 16513 16141
17449 16528 16508 16259
15173 15947 15437 15447
16268 16134 15550 15759
16497 16768 15770 15958
10/31/96 15887 16888 16121 16137
CLASS B SHARES
GT Global Telecommunications B
MSCI World
MSCI Telecommunications*
Salomon Global Telecom
<TABLE>
<CAPTION>
Month GT Global MSCI World MSCI Telec Salomon Global Telecom
<S> <S> <S> <S> <C>
04/01/93 10,000 10,000 10,000 10,000
04/30/93 10,150 10,377 9,801 9,839
05/31/93 10,599 10,618 10,207 10,204
06/30/93 11,041 10,531 10,434 10,232
07/31/93 11,435 10,750 10,536 10,492
08/31/93 12,461 11,244 11,153 11,226
09/30/93 12,658 11,038 10,976 11,043
10/31/93 13,304 11,344 11,457 11,588
11/30/93 12,618 10,704 10,854 10,925
12/31/93 13,720 11,230 11,050 11,640
01/31/94 14,322 11,972 11,552 12,565
02/28/94 13,897 11,819 10,799 11,888
03/31/94 13,038 11,312 10,475 11,243
04/30/94 13,247 11,663 10,831 11,353
05/31/94 13,167 11,695 10,909 11,301
06/30/94 12,830 11,665 10,873 11,197
07/31/94 13,432 11,889 11,214 11,652
08/31/94 14,154 12,249 11,583 12,273
09/30/94 13,801 11,929 11,267 11,919
10/31/94 14,170 12,271 11,533 12,066
11/30/94 13,544 11,741 10,763 11,281
12/31/94 13,049 11,857 10,754 11,073
01/31/95 12,406 11,681 11,016 10,876
02/28/95 12,144 11,853 11,029 10,497
03/31/95 12,093 12,427 11,267 10,985
04/30/95 12,550 12,863 11,434 11,273
05/31/95 12,744 12,975 11,631 11,294
06/30/95 13,489 12,974 11,846 11,486
07/31/95 14,453 13,625 12,151 11,937
08/31/95 14,766 13,324 12,452 12,116
09/30/95 14,782 13,715 13,220 12,446
10/31/95 13,692 13,502 13,091 12,048
11/30/95 14,097 13,973 13,203 12,238
12/31/95 14,104 14,384 13,644 12,511
01/31/96 14,745 14,647 13,911 12,780
02/29/96 14,887 14,739 13,825 12,679
03/31/96 14,905 14,987 13,650 12,656
04/30/96 16,187 15,342 14,119 13,159
05/31/96 16,650 15,358 14,002 13,124
06/30/96 16,036 15,438 13,997 13,220
07/31/96 13,934 14,895 13,089 12,561
08/31/96 14,940 15,069 13,185 12,814
09/30/96 15,136 15,662 13,372 12,976
10/31/96 14,275 15,774 13,669 13,121
</TABLE>
The chart above shows the performance of the GT Global Telecommunications Fund,
Class A and Class B shares, since the Fund's inception versus its various
indices. The chart assumes a hypothetical $10,000 initial investment in Class A
shares and reflects all Fund expenses and the maximum 4.75% sales charge. For
Class B shares, reflect all Fund expenses and the maximum 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 $11,603
on October 31, 1996.
AVERAGE ANNUAL TOTAL RETURNS %(1)
OCTOBER 31, 1996
Share Class Without Sales Charge(2) With Sales Charge
1-Year Life of Fund 1-Year Life of Fund
Class A(3) 7.0 11.34 1.92 10.21
Class B(3) 6.46 11.09 1.46 10.44
Advisor Class(4) 7.49 11.04 N/A N/A
HISTORICAL PERFORMANCE(2)
ANNUAL TOTAL RETURNS %
1992 1993 1994 1995
Class A 4.85(3) 47.65 -4.40 8.58
Class B N/A 37.20(3) -4.89 8.08
(1) Figures assume reinvestment of all dividends and capital gain distributions
at net asset value.
(2) This above performance data does 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 January 27, 1992; Class B shares commenced on
April 1, 1993.
(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.
From time to time, the Fund's investment advisor may waive some fees and/or
reimburse some expenses, without which performance would be lower. Waivers and
reimbursements are subject to change.
24
<PAGE>
GT GLOBAL TELECOMMUNICATIONS FUND
INTERVIEW WITH LEAD PORTFOLIO MANAGER MICHAEL MAHONEY
Q HOW DID THE FUND PERFORM?
A The telecom area has been a difficult one this year. For the 12 months
ended October 31, 1996, the Fund's total return was 7.0% for Class A shares
(1.92% including the maximum 4.75% sales charge) and 6.46% for Class B shares
(1.46% including the maximum 5% contingent deferred sales charge). Total return
over the same investment period was 4.42% for the MSCI Telecommunications
Index(5) and 16.83% for the MSCI World Index.(6) The more comprehensive Salomon
Brothers Global Telecommunications Index,(7) which has a component of emerging
market stocks, returned 8.91% over the period.
Q COULD YOU DESCRIBE THE FUND'S INVESTMENT STRATEGY AND HOW THE RECENT
ENVIRONMENT HAS IMPACTED THE FUND?
A Although the Fund is designed to invest in telecommunications stocks all
over the world, recent market conditions have dictated a significant emphasis on
equipment stocks in general, and U.S. equipment stocks in particular. While this
strategy worked well for some time, the last nine months have seen a slowdown in
the rate of growth for many equipment companies, as a result of regulatory and
legal issues that have delayed the onset of competition in the U.S.
Consequently, telecommunications companies have been slow to make capital
commitments as they await a clearer picture of the market. In the meantime, they
have been cutting back on equipment purchases and redirecting capital
expenditure to particular types of upgrades and away from more mundane upgrading
of basic infrastructure in the ground.
A number of equipment companies that sell to the cable TV industry have also
been hurt by this delay, as well as by insufficient capital at cable TV
companies. While we think the correction in equipment companies has been
overdone and companies will have no choice but to upgrade in the long run, we
believe regulatory uncertainty will remain in place until early 1997 at least.
Accordingly, we have shifted the Fund's emphasis somewhat, modestly increasing
our investments outside North America and shifting into some new service
providers in the U.S. and Canada.
We also continue to emphasize many of the wireless service operators because we
believe they are in a market generally made more attractive by increasing
competition. We hold these stocks in several markets around the world, most
notably in Japan, the U.S., Italy and Germany. Recent regulatory changes in the
U.S. may also reduce the access fees wireless carriers pay to local phone
companies, significantly increasing their profitability. Another type of
equipment company that may do well in the near future is wireless equipment,
where we hold companies like Ericsson (which is enjoying a strong upswing in its
share price as a result of improved earnings in its cellular and PCS
businesses), Nokia and other smaller players.
Q WHAT COMPANIES HAD A SIGNIFICANT IMPACT ON THE FUND'S PERFORMANCE?
A. Holdings in Ericsson, MFS Communications (see case study below), and DSP
Communications (maker of chip sets for cellular phones, primarily for the
exploding Japanese market) have done well for the Fund. In addition, the Fund
benefited from its holdings in Grupo Carso (a Mexican conglomerate with
significant holdings in Telmex), 3Com Corp. (a leading global data networking
company) and Andrew Corp. (an international supplier of communications systems
and services). CONTINUED P.26
HOW TO CONSOLIDATE AND GAIN MFS - A CASE STUDY
Not long ago, MFS Communications was the leading competitive access provider in
the U.S.-commendable in itself. They have, however, in a short time become one
of the best-positioned companies of their kind in the world. The genius lies in
their determination and success in capturing the highest margin segment of the
market- the business customer.
STEP 1. MFS became the leading local service provider to target the business
segment.
STEP 2. Earlier this year they bought out UUNET, a provider of internet access
options, also targeted to businesses.
STEP 3. The proposed merger with WorldCom, the fourth largest long-distance
company in the U.S. selling to businesses, would enable them to become a fully
integrated service company.
Customer and market reaction has been tremendous. The company's share price has
enjoyed an increase of almost 140% over the period. Meanwhile, London is
expected to be its largest market within six months, a difficult market to
penetrate (currently New York is MFS's largest market) and an additional
reaffirmation of its achievements.
(5) The MSCI Telecommunications Index is an arithmetic average, weighted by
market value, of the performance of 29 securities listed on 10 major stock
exchanges. It includes the effect of reinvested dividends and is measured
in U.S. dollars.
(6) The 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.
(7) The Salomon Brothers Global Telecommunications Index is an arithmetic
average, weighted by market value, of the performance of 80 securities. It
consists of telecommunications companies with total adjusted market
capitalization of US$100 million or more, including those in emerging
markets. It includes the effect of reinvested dividends and is measured in
U.S. dollars.
The indices are unmanaged, not available for direct investment and do not incur
the effects of sales charges and professional management fees.
25
<PAGE>
INTERVIEW WITH THE PORTFOLIO MANAGER CONTINUED
Q. HOW IS THE FUND POSITIONING ITSELF TO TAKE ADVANTAGE OF ADVANCEMENTS IN
TECHNOLOGY?
A. Networking still represents a huge opportunity because of the remaining
scope for increased global penetration. We are enticed by products that help
Baby Bells connect their local networks together, aid in quick problem
resolution or cut costs. We also like products that help build the wireless
infrastructure, preferably with limited exposure to handsets. Our technology
holdings are almost entirely positioned in the U.S., which dominates telecom
technology.
Q WHAT IS YOUR VIEW ON EMERGING MARKET TELECOM STOCKS?
A While emerging markets have been doing reasonably well in the last couple
of months, in general they have been laggards over the past two years. In part,
their weakness is a result of previously strong performance of the stocks and
fears over increasing competition in some countries. We have been selectively
buying some of these stocks over the last year as confidence begins to return.
Although competition is appearing in many markets, it is important to remember
that telecom stocks in competitive countries tend to sell at higher multiples
than those in countries with highly regulated, uncompetitive markets. The issue
is timing. At first, it is often hard for the incumbent monopoly to deal with
new realities of a competitive marketplace but, over time, they usually learn
how it's done. As they become more efficient, they tend to become more
profitable (and usually remain the dominant market share player).
Q WHAT IS YOUR OUTLOOK FOR 1997?
A We are optimistic about the industry's future and see very attractive
valuations in several areas, especially emerging market telephone service
companies. For now we will concentrate on selected equipment manufacturers and
service providers in cellular and emerging market landlines, hoping to produce
superior returns in the coming year.
We are somewhat concerned about service and equipment companies. It seems clear
that cable companies are facing a greater challenge than ever in terms of
raising the money they need to upgrade their basic infrastructure, although they
continue to maintain a very good market position with the infrastructure they
already have in the ground. Going forward, we don't think they have any choice
but to spend; however, they may choose to slow that spending for a brief period
of time because of bond rating issues or temporary concerns. Nevertheless, we
believe the equipment area is well situated in the long run because of the
trends toward increasing expenditure and greater competition in the U.S. and
around the world.
OPPORTUNITIES IN THE FUND'S MAJOR GLOBAL TELECOMMUNICATIONS THEMES REMAIN
UNDIMINISHED
STRONG GROWTH IN EMERGING MARKETS DEMAND FOR TELECOMMUNICATIONS SERVICES. The
number of telephone lines per capita is a fraction of that in the developed
world, and around 30% of the Fund is currently invested in emerging markets.
DEREGULATION OF PARTICULAR MARKETS. Telecommunications services and hardware are
strong examples.
PRIVATIZATION OF NATIONAL TELEPHONE SYSTEMS. Many companies hold actual or near-
monopoly positions in countries with highly indebted governments.
THE DEVELOPMENT OF NEW TECHNOLOGIES. The Fund's heavy weighting in the U.S.
recognizes American leadership in this area.
THE RAPID EXPANSION IN THE NEED FOR EQUIPMENT. Most suppliers are currently
based in, or listed principally on stock markets in, developed markets.
ABOUT THE PORTFOLIO MANAGERS
MICHAEL MAHONEY - Portfolio Manager for Chancellor LGT Asset Management since
1993; Investment Analyst from 1991 to 1993. Mr. Mahoney received an M.B.A. from
Stanford Graduate School of Business.
DAVID L. SHERRY, CFA - Portfolio Manager for Chancellor LGT Asset Management
since 1993. Previously, Mr. Sherry was a Senior Securities Analyst for Franklin
Resources, Inc. He received an M.B.A. from the University of California, Los
Angeles.
A. JAMES ELLMAN - Portfolio Manager for Chancellor LGT Asset Management since
1995; Investment Analyst from 1994 to 1995. Previously, Mr. Ellman was an
international bank examiner for the Federal Reserve Bank of New York. He
received an M.B.A. from the Harvard Graduate School of Business.
GT GLOBAL TELECOMMUNICATIONS FUND
ALLOCATION OF NET ASSETS%
1996 1995
October 31 October 31
Telecom Equipment 25.4 18.8
Wireless Communications 20.7 16.5
Telephone Networks 15.6 14.2
Telephone - Regional/Local 5.9 3.9
Networking 5.5 0.3
Broadcasting & Publishing 5.0 7.8
Cable Television 4.4 7.1
Telecom Technology 3.3 3.2
Aerospace/Defense 2.1 1.2
Multi-Industry/Misc. 1.8 0.9
Semiconductors 1.6 3.8
Consumer Electronics 1.4 2.0
Telecom - Other 1.0 0.1
Telephone - Long-Distance 0.9 3.3
Short-Term & Other 5.4 16.9
26
<PAGE>
GT GLOBAL TELECOMMUNICATIONS FUND
GEOGRAPHIC ALLOCATION OF NET ASSETS
Japan 9.0%
Latin America 9.3%
Asia-Pacific ex-Japan 12.9%
Europe 25.9%
North America & Other 42.9%
Allocations will change based on current market conditions.
A complete listing may be found in the Financial Statements section in this
report.
<TABLE>
<CAPTION>
GT GLOBAL TELECOMMUNICATIONS FUND % of
KEY PORTFOLIO HOLDINGS(8) Country Net Assets
<S> <C> <C>
MFS COMMUNICATIONS CO., INC. The largest provider of local competitive access (CAP) U.S. 5.0
telecommunications services in the U.S. Its subsidiary, MFS Datanet, is a leading provider of transmission
facilities for Internet traffic.
3COM CORPORATION A leading global data networking company, 3Com provides a range of networking solutions U.S. 4.6
including adapters, hubs, routers and switches for Ethernet, Token Ring and other high speed networks.
DDI CORP. Japan's second-largest provider of cellular phone services. The company also has JAPAN 4.5
a significant share of the domestic long-distance market.
L.M. ERICSSON TELEPHONE CO. One of the world's premier telecommunications equipment companies. SWEDEN 4.0
Its revenues derive primarily from its fast-growing radio communications division, with the remainder
coming from its public telecommunications division and other telecommunications and defense-related
businesses. The company enjoys product sales in over 100 countries.
NEWBRIDGE NETWORKS Manufactures time division multiplexer (TDM) products for telecom networks, CANADA 3.8
and packet switching, particularly frame relay asynchronous transfer mode (ATM), products. ATM boosts the
efficiency and capacity of existing networks. The company controls half the world market for this
technology.
NOKIA Manufactures and develops telecommunication systems and equipment. The company is the world's FINLAND 3.2
second-largest, but fastest-growing, supplier of cellular equipment.
MANNESMANN A diversified industrial conglomerate involved in telecommunications, machinery, plant GERMANY 2.8
construction, automotive technology, tubes and pipes. Mannesmann is the majority owner of Germany's second
largest cellular company and also has investments in Italian cellular and Spanish and French paging
companies.
ECI TELECOMMUNICATIONS LTD. The worldwide leader in digital circuit multiplication equipment (DCME) ISRAEL 2.6
products, which when attached to various telecom transmission cables, increases carrying capacity. ECI is
also a leader in the development of products for the SDH fiberoptic environment that multiplex, monitor and
manage high-speed digital transmission of voice and data.
ORBITAL SCIENCES CORP. A space and information company that designs, manufactures and markets space U.S. 2.1
technology products and satellite-based services.
SPT TELECOM The monopoly utility in the Czech Republic. The company is managed by a joint venture CZECH 2.1
between the state telephone companies of Switzerland and the Netherlands.
</TABLE>
(8) There is no assurance the Fund will continue to hold these or any other
securities mentioned in this report.
27
<PAGE>
CHANCELLOR LGT ASSET MANAGEMENT'S WORLDWIDE INVESTMENT OFFICES
[WORLD MAP}
Singapore 1990
Hong Kong 1970
Tokyo 1982
Sydney 1982
San Francisco 1974
New York 1996
Toronto 1994
London 1969
Frankfurt 1985
Chancellor LGT Asset Management is a member of the $80 billion Liechtenstein
Global Trust. Chancellor LGT Asset Management maintains fully staffed investment
offices in London, Frankfurt, Hong Kong, Tokyo, Singapore, Sydney, Toronto, New
York and San Francisco.
28
<PAGE>
GT GLOBAL
THEME FUNDS
FINANCIAL
STATEMENTS
<PAGE>
GT GLOBAL THEME FUNDS
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
ANNUAL REPORT
To the Shareholders and Board of Directors of
G.T. Investment Funds, Inc.:
We have audited the accompanying statements of assets and liabilities of GT
Global Consumer Products & Services Fund - Consolidated, GT Global Financial
Services Fund - Consolidated, GT Global Health Care Fund, GT Global
Infrastructure Fund - Consolidated, GT Global Natural Resources Fund -
Consolidated, and GT Global Telecommunications Fund, six series of G.T.
Investment Funds, Inc., including the portfolios of investments, as of October
31, 1996, the related statements of operations for the year then ended, and the
statements of changes in net assets and financial highlights for each of the
periods indicated herein. These financial statements and financial highlights
are the responsibility of the Funds' management. Our responsibility is to
express an opinion on these financial statements and 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 the
aforementioned series of G.T. Investments Funds, Inc. as of October 31, 1996,
the results of their operations, changes in their net assets and their financial
highlights for each of the periods indicated therein, in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
BOSTON, MASSACHUSETTS
DECEMBER 13, 1996
F1
<PAGE>
GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND - CONSOLIDATED
PORTFOLIO OF INVESTMENTS
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Services (51.0%)
Vons Cos., Inc.-/- ........................................ US 134,500 $ 7,447,937 4.5
RETAILERS-FOOD
Central Garden and Pet Co.-/- ............................. US 273,400 6,459,075 3.7
WHOLESALE & INTERNATIONAL TRADE
Footstar, Inc.-/- ......................................... US 280,000 6,160,000 3.6
RETAILERS-APPAREL
TJX Cos., Inc. ............................................ US 147,200 5,888,000 3.4
RETAILERS-APPAREL
Jones Apparel Group, Inc.-/- .............................. US 186,000 5,812,500 3.4
RETAILERS-APPAREL
Tiffany & Co. ............................................. US 155,300 5,746,100 3.3
RETAILERS-APPAREL
Ross Stores, Inc. ......................................... US 132,200 5,486,300 3.2
RETAILERS-APPAREL
Sun International Hotels Ltd.-/- .......................... US 114,100 5,391,225 3.1
LEISURE & TOURISM
The Finish Line, Inc.-/- .................................. US 124,200 5,278,500 3.1
RETAILERS-APPAREL
Seattle Filmworks, Inc.-/- ................................ US 276,500 5,253,500 3.0
CONSUMER SERVICES
Vans, Inc.-/- ............................................. US 311,100 5,172,038 3.0
RETAILERS-APPAREL
Safeway, Inc.-/- .......................................... US 109,500 4,694,813 2.7
RETAILERS-FOOD
Universal Outdoor Holdings, Inc.-/- ....................... US 127,400 3,742,375 2.2
BUSINESS & PUBLIC SERVICES
Imax Corp.-/- {\/} ........................................ CAN 96,100 3,459,600 2.0
CONSUMER SERVICES
Tuesday Morning Corp.-/- .................................. US 173,600 3,363,500 1.9
RETAILERS-OTHER
Borders Group, Inc.-/- .................................... US 84,600 2,664,900 1.5
RETAILERS-OTHER
United Auto Group, Inc.-/- ................................ US 60,000 2,062,500 1.2
CONSUMER SERVICES
Dominick's Supermarkets, Inc.-/- .......................... US 80,000 1,590,000 0.9
RETAILERS-FOOD
Abercrombie & Fitch Co.-/- ................................ US 68,800 1,513,600 0.9
RETAILERS-APPAREL
Lamar Advertising Co.-/- .................................. US 22,700 624,250 0.4
BUSINESS & PUBLIC SERVICES
------------
87,810,713
------------
Consumer Non-Durables (35.9%)
Philip Morris Cos., Inc. .................................. US 66,500 6,159,563 3.5
FOOD
Coachmen Industries, Inc. ................................. US 212,300 5,944,400 3.3
RECREATION
Eagle Hardware & Garden, Inc.-/- .......................... US 198,400 5,679,200 3.3
HOUSEHOLD PRODUCTS
</TABLE>
The accompanying notes are an integral part of the financial statements.
F2
<PAGE>
GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND - CONSOLIDATED
PORTFOLIO OF INVESTMENTS (cont'd)
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Consumer Non-Durables (Continued)
Wet Seal, Inc. "A"-/- ..................................... US 183,400 $ 5,777,100 3.3
TEXTILES & APPAREL
Nike, Inc. "B" ............................................ US 93,600 5,510,700 3.2
TEXTILES & APPAREL
Gucci Group - NY Registered Shares{\/} .................... ITLY 77,000 5,313,000 3.1
TEXTILES & APPAREL
Adidas AG - 144A ADR{.} -/- {\/} .......................... GER 121,100 5,177,025 3.0
TEXTILES & APPAREL
Cannondale Corp.-/- ....................................... US 266,500 5,130,125 3.0
RECREATION
Fila Holding S.p.A. - ADR{\/} ............................. ITLY 66,200 4,766,400 2.8
TEXTILES & APPAREL
Harley-Davidson, Inc. ..................................... US 72,400 3,267,050 1.9
OTHER CONSUMER GOODS
Barco N.V. (Barco Industries) ............................. BEL 17,320 2,850,549 1.7
OTHER CONSUMER GOODS
K2, Inc. .................................................. US 109,000 2,507,000 1.5
RECREATION
Consolidated Cigar Holdings, Inc.-/- ...................... US 75,000 2,043,750 1.2
TOBACCO
Noble China-/- {/\} ....................................... CHNA 341,200 954,352 0.6
BEVERAGES - ALCOHOLIC
Rally's Hamburgers, Inc.-/- ............................... US 190,400 833,000 0.5
FOOD
------------
61,913,214
------------
Multi-Industry/Miscellaneous (3.2%)
Bulgari S.p.A. ............................................ ITLY 314,000 5,474,098 3.2
------------
MULTI-INDUSTRY
Finance (3.1%)
Amer Group Ltd. ........................................... FIN 231,600 5,239,010 3.0
INVESTMENT MANAGEMENT
Metris Cos., Inc.-/- ...................................... US 1,000 23,750 0.1
OTHER FINANCIAL
------------
5,262,760
------------
Consumer Durables (1.2%)
Boyds Wheels, Inc. ........................................ US 151,200 2,097,900 1.2
------------
AUTO PARTS
Technology (1.1%)
Ingram Micro, Inc. "A"-/- ................................. US 95,000 1,710,000 1.0
COMPUTERS & PERIPHERALS
CyberMedia, Inc.-/- ....................................... US 5,800 129,050 0.1
SOFTWARE
------------
1,839,050
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F3
<PAGE>
GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND - CONSOLIDATED
PORTFOLIO OF INVESTMENTS (cont'd)
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Materials/Basic Industry (0.8%)
Kevco, Inc.-/- ............................................ US 115,000 $ 1,380,000 0.8
MISC. MATERIALS & COMMODITIES
------------ -----
TOTAL EQUITY INVESTMENTS (cost $156,514,774) ................ 165,777,735 96.3
------------ -----
<CAPTION>
VALUE % OF NET
REPURCHASE AGREEMENT (NOTE 1) 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 $9,665,000 U.S. Treasury Bond, 7.875%
due 11/15/07 (market value of collateral is $10,791,312,
including accrued interest). (cost $10,575,630) .......... 10,575,630 6.1
------------ -----
TOTAL INVESTMENTS (cost $167,090,404) * ..................... 176,353,365 102.4
Other Assets and Liabilities ................................ (4,102,558) (2.4)
------------ -----
NET ASSETS .................................................. $172,250,807 100.0
------------ -----
------------ -----
</TABLE>
- --------------
{/\} Security is denominated in Canadian Dollars.
-/- Non-income producing security.
{\/} U.S. currency denominated.
{.} Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers.
* For Federal income tax purposes, cost is $167,206,893 and
appreciation (depreciation) is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $ 13,635,691
Unrealized depreciation: (4,489,219)
-------------
Net unrealized appreciation: $ 9,146,472
-------------
-------------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at October 31, 1996, was concentrated in the
following countries:
<TABLE>
<CAPTION>
PERCENTAGE OF NET ASSETS
{D}
---------------------------
SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE) EQUITY & OTHER TOTAL
- -------------------------------------- ------ ---------- -----
<S> <C> <C> <C>
Belgium (BEL/BEF) .................... 1.7 1.7
Canada (CAN/CAD) ..................... 2.0 2.0
China (CHNA/RMB) ..................... 0.6 0.6
Finland (FIN/FIM) .................... 3.0 3.0
Germany (GER/DEM) .................... 3.0 3.0
Italy (ITLY/ITL) ..................... 9.1 9.1
United States (US/USD) ............... 76.9 3.7 80.6
------ ----- -----
Total ............................... 96.3 3.7 100.0
------ ----- -----
------ ----- -----
</TABLE>
- --------------
{d} Percentages indicated are based on net assets of $172,250,807.
The accompanying notes are an integral part of the financial statements.
F4
<PAGE>
GT GLOBAL FINANCIAL SERVICES FUND - CONSOLIDATED
PORTFOLIO OF INVESTMENTS
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Banks-Regional (37.7%)
BankAmerica Corp. ......................................... US 6,200 $ 567,300 3.0
Zagrebacka Banka - 144A GDR{.} -/- {\/} ................... CRT 20,000 387,500 2.3
Sovereign Bancorp, Inc. ................................... US 31,000 364,250 2.1
First Tennessee National Corp. ............................ US 10,000 363,750 2.1
Anglo-Irish Bank Corp., PLC: .............................. IRE -- -- 2.1
Common{/\} .............................................. -- 259,000 299,203 --
Common .................................................. -- 50,000 58,168 --
Sparbanken Sverige AB "A" ................................. SWDN 21,000 332,648 1.9
NationsBank Corp. ......................................... US 3,300 311,025 1.8
Banco Commercial S.A. - 144A ADR{.} {\/} .................. URGY 18,400 303,600 1.8
Commerce Bancorp, Inc. .................................... US 9,150 253,913 1.5
Bank of Nova Scotia ....................................... CAN 7,700 242,653 1.4
Bank of Montreal .......................................... CAN 8,000 241,963 1.4
Banco BHIF - ADR-/- {\/} .................................. CHLE 13,300 239,400 1.4
Canadian Imperial Bank of Commerce ........................ CAN 5,700 236,809 1.4
Bank of Boston Corp. ...................................... US 3,300 211,200 1.2
Norbanken AB-/- ........................................... SWDN 7,700 202,894 1.2
LLoyds TSB Group PLC ...................................... UK 31,400 199,252 1.2
Christiania Bank Og Kreditkasse-/- ........................ NOR 66,600 182,749 1.1
Sydbank A/S ............................................... DEN 4,500 164,920 1.0
Mellon Bank Corp. ......................................... US 2,500 162,813 0.9
Mark Twain Bancshares, Inc. ............................... US 3,500 160,563 0.9
Zions Bancorp. ............................................ US 1,700 153,850 0.9
Cullen/Frost Bankers, Inc. ................................ US 5,000 150,313 0.9
PT Bank Internasional Indonesia - Foreign ................. INDO 180,658 145,485 0.8
Jyske Bank ................................................ DEN 2,000 144,197 0.8
Grupo Financiero Banorte "B"-/- ........................... MEX 120,000 119,701 0.7
Westpac Banking Corp., Ltd. ............................... AUSL 20,000 114,077 0.7
Allied Irish Bank PLC{/\} ................................. IRE 17,794 112,769 0.7
Amalgamated Banks of South Africa-/- ...................... SAFR 18,000 91,747 0.5
------------
6,518,712
------------
Banks-Money Center (17.2%)
Citicorp .................................................. US 4,500 445,500 2.5
Unidanmark AS "A" ......................................... DEN 9,000 415,039 2.4
Den Danske Bank ........................................... DEN 5,280 378,863 2.2
HSBC Holdings PLC ......................................... HK 13,000 264,819 1.5
Chase Manhattan Corp. ..................................... US 3,000 257,250 1.5
Bank Hapoalim Ltd.-/- ..................................... ISRL 158,000 214,480 1.2
Bank of New York Co., Inc. ................................ US 6,000 198,750 1.2
Bank of Tokyo - Mitsubishi ................................ JPN 8,750 178,493 1.0
Bangkok Bank Co., Ltd. - Foreign .......................... THAI 14,300 152,593 0.9
Bank of Ireland ........................................... IRE 18,000 147,901 0.9
Security Bank Corp.-/- .................................... PHIL 70,000 130,716 0.8
Thai Farmers Bank Ltd. - Foreign .......................... THAI 14,100 107,866 0.6
</TABLE>
The accompanying notes are an integral part of the financial statements.
F5
<PAGE>
GT GLOBAL FINANCIAL SERVICES FUND - CONSOLIDATED
PORTFOLIO OF INVESTMENTS (cont'd)
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Banks-Money Center (Continued)
Commercial Bank of Korea .................................. KOR 9,900 $ 85,303 0.5
------------
2,977,573
------------
Consumer Finance (9.6%)
First Chicago NBD Corp. ................................... US 9,000 459,000 2.5
Green Tree Financial Corp. ................................ US 6,600 261,525 1.5
Promise Co., Ltd. ......................................... JPN 5,000 233,448 1.4
Dean Witter, Discover & Co. ............................... US 3,600 211,950 1.2
Nichiei Co., Ltd. ......................................... JPN 3,000 199,947 1.2
Acom Co., Ltd. ............................................ JPN 4,000 153,697 0.9
First Financial Caribbean Corp. ........................... US 5,100 131,325 0.8
Metris Cos., Inc.-/- ...................................... US 500 11,875 0.1
------------
1,662,767
------------
Securities Broker (7.0%)
Peregrine Investment Holdings Ltd. ........................ HK 245,000 394,512 2.3
Hambrecht & Quist Group-/- ................................ US 8,500 168,938 1.0
Nomura Securities Co., Ltd. ............................... JPN 10,000 165,304 1.0
Daiwa Securities Co., Ltd. ................................ JPN 14,000 151,411 0.9
Nikko Securities Co., Ltd. ................................ JPN 15,000 143,762 0.8
Yamaichi Securities Co., Ltd. ............................. JPN 22,000 122,641 0.7
Dongwon Securities Co. .................................... KOR 3,500 54,794 0.3
------------
1,201,362
------------
Other Financial (6.3%)
Banco LatinoAmericano de Exportaciones S.A. (Bladex)
"E"{\/} .................................................. PAN 7,200 376,200 2.1
Shohkoh Fund .............................................. JPN 1,200 252,176 1.5
Investors Financial Services Corp. ........................ US 7,000 181,125 1.1
Transaction Network Service-/- ............................ US 11,050 150,556 0.9
JACCS Co., Ltd. ........................................... JPN 16,000 127,178 0.7
------------
1,087,235
------------
Investment Management (5.8%)
Invesco PLC: .............................................. UK -- -- 2.5
ADR{\/} ................................................. -- 9,000 336,375 --
Common .................................................. -- 23,300 88,143 --
Alliance Capital Management L.P. .......................... US 14,200 395,825 2.3
Franklin Resources, Inc. .................................. US 2,500 176,250 1.0
------------
996,593
------------
Real Estate (2.4%)
Alexander Haagen Properties, Inc. ......................... US 15,400 227,150 1.4
Beacon Properties Corp. ................................... US 5,500 161,563 0.9
Tornet Fastighets AB-/- ................................... SWDN 1,700 21,621 0.1
------------
410,334
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F6
<PAGE>
GT GLOBAL FINANCIAL SERVICES FUND - CONSOLIDATED
PORTFOLIO OF INVESTMENTS (cont'd)
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Insurance - Multi-Line (2.2%)
Corporacion Mapfre ........................................ SPN 4,000 $ 197,601 1.1
Axa Group ................................................. FR 2,940 183,689 1.1
------------
381,290
------------
Telecom - Other (1.5%)
Gilat Satellite Networks Ltd.-/- {\/} ..................... ISRL 9,000 175,500 1.0
Olivetti Group-/- ......................................... ITLY 303,000 87,956 0.5
------------
263,456
------------
Cable Television (1.0%)
Matav-Cable Systems Media Ltd. - ADR-/- {\/} .............. ISRL 11,000 166,375 1.0
------------
Conglomerate (0.5%)
First National Bank Holdings Ltd.-/- ...................... SAFR 14,000 76,882 0.5
------------ -----
TOTAL EQUITY INVESTMENTS (cost $14,352,751) ................. 15,742,579 91.2
------------ -----
<CAPTION>
NO. OF % OF NET
RIGHTS COUNTRY RIGHTS ASSETS
- ------------------------------------------------------------- -------- ----------- -------------
<S> <C> <C> <C> <C>
Security Bank Corp. Rights, expire 12/19/96 (cost
$28,521)-/- .............................................. PHIL 28,000 25,610 0.2
------------ -----
BANKS-MONEY CENTER
<CAPTION>
NO. OF % OF NET
WARRANTS COUNTRY WARRANTS ASSETS
- ------------------------------------------------------------- -------- ----------- -------------
<S> <C> <C> <C> <C>
Peregrine Investment Holdings Ltd. Warrants, expire 5/15/98
(cost $0)-/- ............................................. HK 24,500 4,595 --
------------ -----
SECURITIES BROKER
<CAPTION>
% OF NET
REPURCHASE AGREEMENT 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 $510,000 U.S. Treasury Bonds, 7.125% due
2/15/23 (market value of collateral is $538,660, including
accrued interest). (cost $523,081) ....................... 523,081 3.0
------------ -----
TOTAL INVESTMENTS (cost $14,904,353) * ...................... 16,295,865 94.4
Other Assets and Liabilities ................................ 963,793 5.6
------------ -----
NET ASSETS .................................................. $ 17,259,658 100.0
------------ -----
------------ -----
</TABLE>
- --------------
-/- Non-income producing security.
{\/} U.S. currency denominated.
{/\} Security denominated in Great Britain Pounds.
{.} Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers.
* For Federal income tax purposes, cost is $15,004,209 and
appreciation (depreciation) is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $ 1,748,260
Unrealized depreciation: (456,604)
-------------
Net unrealized appreciation: $ 1,291,656
-------------
-------------
</TABLE>
Abbreviations:
ADR--American Depository Receipt
GDR--Global Depository Receipt
The accompanying notes are an integral part of the financial statements.
F7
<PAGE>
GT GLOBAL FINANCIAL SERVICES FUND - CONSOLIDATED
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,
RIGHTS & SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE) EQUITY WARRANTS & OTHER TOTAL
- -------------------------------------- ------ ------------- ---------- ------
<S> <C> <C> <C> <C>
Australia (AUSL/AUD) ................. 0.7 0.7
Canada (CAN/CAD) ..................... 4.2 4.2
Chile (CHLE/CLP) ..................... 1.4 1.4
Croatia (CRT/HRK) .................... 2.3 2.3
Denmark (DEN/DKK) .................... 6.4 6.4
France (FR/FRF) ...................... 1.1 1.1
Hong Kong (HK/HKD) ................... 3.8 3.8
Indonesia (INDO/IDR) ................. 0.8 0.8
Ireland (IRE/IEP) .................... 3.7 3.7
Israel (ISRL/ILS) .................... 3.2 3.2
Italy (ITLY/ITL) ..................... 0.5 0.5
Japan (JPN/JPY) ...................... 10.1 10.1
Korea (KOR/KRW) ...................... 0.8 0.8
Mexico (MEX/MXN) ..................... 0.7 0.7
Norway (NOR/NOK) ..................... 1.1 1.1
Panama (PAN/PND) ..................... 2.1 2.1
Philippines (PHIL/PHP) ............... 0.8 0.2 1.0
South Africa (SAFR/ZAR) .............. 1.0 1.0
Spain (SPN/ESP) ...................... 1.1 1.1
Sweden (SWDN/SEK) .................... 3.2 3.2
Thailand (THAI/THB) .................. 1.5 1.5
United Kingdom (UK/GBP) .............. 3.7 3.7
United States (US/USD) ............... 35.2 8.6 43.8
Uruguay (URGY/UYP) ................... 1.8 1.8
------ ----- ----- ------
Total ............................... 91.2 0.2 8.6 100.0
------ ----- ----- ------
------ ----- ----- ------
</TABLE>
- --------------
{d} Percentages indicated are based on net assets of $17,259,658.
The accompanying notes are an integral part of the financial statements.
F8
<PAGE>
GT GLOBAL HEALTH CARE FUND
PORTFOLIO OF INVESTMENTS
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Biotechnology (30.7%)
Amgen, Inc.-/- ............................................ US 503,700 $ 30,883,100 5.0
Protein Design Labs, Inc.{::} -/- ......................... US 1,191,400 28,295,750 4.9
Biogen, Inc.-/- ........................................... US 345,100 25,709,950 4.5
Biochem Pharma, Inc.{\/} -/- .............................. CAN 531,800 22,667,975 3.9
Agouron Pharmaceuticals, Inc.-/- .......................... US 339,300 19,424,925 3.4
Genetics Institute, Inc.-/- ............................... US 278,500 18,241,750 3.2
Centocor, Inc.-/- ......................................... US 446,200 13,107,125 2.3
SangStat Medical Corp.-/- ................................. US 210,000 5,512,500 1.0
Guilford Pharmaceuticals, Inc.-/- ......................... US 133,100 3,826,625 0.7
COR Therapeutics, Inc.-/- ................................. US 302,300 2,720,700 0.5
Myriad Genetics, Inc.-/- .................................. US 91,600 2,267,100 0.4
Lumisys, Inc.-/- .......................................... US 132,000 1,270,500 0.2
Alpha-Beta Technology, Inc.-/- ............................ US 100,000 1,037,500 0.2
Genelabs Technologies, Inc.-/- ............................ US 206,800 840,125 0.2
Genzyme Transgenics Corp. ................................. US 54,600 348,075 0.1
Somatix Therapy Corp.-/- .................................. US 100,000 331,250 0.1
Targeted Genetics Corp.-/- ................................ US 60,000 262,500 0.1
NABI, Inc.-/- ............................................. US 26,000 240,500 --
Enzon, Inc. Preferred-/- .................................. US 16,000 90,800 --
------------
177,078,750
------------
Pharmaceuticals (25.4%)
Astra AB "B" Free ......................................... SWDN 572,000 26,136,623 4.5
Pfizer, Inc. .............................................. US 210,000 17,377,500 3.0
TheraTech, Inc.{::} -/- ................................... US 1,467,000 16,228,688 2.8
Merck & Co., Inc. ......................................... US 180,000 13,342,500 2.3
Sandoz AG - Registered .................................... SWTZ 10,000 11,575,028 2.0
Ciba-Geigy AG - Registered-/- ............................. SWTZ 8,500 10,485,264 1.8
Watson Pharmaceuticals, Inc.-/- ........................... US 280,700 9,368,363 1.6
Zeneca Group PLC .......................................... UK 322,600 8,786,730 1.5
R.P. Scherer Corp.-/- ..................................... US 182,000 8,440,250 1.5
Altana AG ................................................. GER 9,520 7,611,471 1.3
Spiros Development Corp.(.) -/- ........................... US 100,000 5,700,723 1.0
Sonus Pharmaceuticals, Inc.-/- ............................ US 134,500 3,076,688 0.5
Pliva D.D. - Reg. S GDR-/- {c} {\/} ....................... CRT 44,700 2,201,475 0.4
SEQUUS Pharmaceuticals, Inc. .............................. US 127,600 1,794,375 0.3
Catalytica, Inc.-/- ....................................... US 398,600 1,544,575 0.3
Penederm, Inc.-/- ......................................... US 137,500 1,203,125 0.2
Therapeutic Discovery Corp. "A" ........................... US 100,000 1,037,500 0.2
Anesta Corp.-/- ........................................... US 22,500 309,375 0.1
Interneuron Pharmaceuticals ............................... US 10,000 247,500 0.1
------------
146,467,753
------------
Medical Technology & Supplies (22.3%)
Visx, Inc.{::} -/- ........................................ US 939,400 23,719,850 4.1
Circon Corp.{::} -/- ...................................... US 875,400 14,444,100 2.5
</TABLE>
The accompanying notes are an integral part of the financial statements.
F9
<PAGE>
GT GLOBAL HEALTH CARE FUND
PORTFOLIO OF INVESTMENTS (cont'd)
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Medical Technology & Supplies (Continued)
Sunrise Medical, Inc.-/- .................................. US 783,700 $ 11,657,538 2.0
Baxter International, Inc. ................................ US 270,000 11,238,750 2.0
Conmed Corp. .............................................. US 625,000 10,781,250 1.9
Vital Signs, Inc.-/- ...................................... US 335,400 7,127,250 1.2
AVECOR Cardiovascular, Inc.{::} ........................... US 550,800 6,747,300 1.2
Mentor Corp.-/- ........................................... US 288,100 6,374,213 1.1
Advanced Technology Laboratories, Inc.-/- ................. US 193,700 5,907,850 1.0
Neoprobe Corp.-/- ......................................... US 357,200 5,134,750 0.9
Angeion Corp.-/- .......................................... US 650,000 2,762,500 0.5
Utah Medical Products, Inc.-/- ............................ US 202,800 2,585,700 0.5
TECNOL Medical Products, Inc.-/- .......................... US 200,000 2,550,000 0.4
Life Medical Sciences, Inc.{::} -/- ....................... US 450,000 2,418,750 0.4
INAMED Corp.-/- ........................................... US 256,900 2,312,100 0.4
Research Medical, Inc.-/- ................................. US 114,700 2,222,313 0.4
Lifecore Biomedical, Inc.-/- .............................. US 113,900 1,922,063 0.3
General Surgical Innovations, Inc.-/- ..................... US 250,900 1,819,025 0.3
NeoPath, Inc.-/- .......................................... US 75,000 1,223,438 0.2
Eclipse Surgical Technologies, Inc.-/- .................... US 116,500 1,121,313 0.2
Becton, Dickinson & Co. ................................... US 22,800 991,800 0.2
Conceptus, Inc.-/- ........................................ US 75,000 900,000 0.2
KeraVision, Inc.-/- ....................................... US 47,500 736,250 0.1
Endovascular Technologies, Inc.-/- ........................ US 60,000 630,000 0.1
Pharmacopeia, Inc.-/- ..................................... US 17,500 332,500 0.1
Endosonics Corp.-/- ....................................... US 25,000 315,625 0.1
Versa Technologies, Inc. .................................. US 11,200 154,000 --
Innerdyne, Inc.-/- ........................................ US 40,000 122,500 --
Calypte Biomedical Corp.-/- ............................... US 19,000 97,375 --
Optical Sensors, Inc.-/- .................................. US 10,000 87,500 --
Molecular Dynamics, Inc.-/- ............................... US 10,000 75,000 --
Quidel Corp.-/- ........................................... US 10,000 36,875 --
------------
128,549,478
------------
Health Care Services (8.2%)
Quorum Health Group, Inc.-/- .............................. US 360,000 9,720,000 1.7
Health Management Associates, Inc. "A"-/- ................. US 350,000 7,700,000 1.3
Tenet Healthcare Corp.-/- ................................. US 315,300 6,581,888 1.1
Parkway Holdings Ltd. ..................................... SING 1,670,000 6,225,591 1.1
Cohr, Inc.-/- ............................................. US 206,300 5,054,350 0.9
AmeriSource Health Corp. "A"-/- ........................... US 101,500 4,301,063 0.8
Pacificare Health Systems, Inc. "A"-/- .................... US 55,200 3,712,200 0.6
Grupo Casa Autrey, S.A. de C.V. - ADR{\/} ................. MEX 135,100 2,550,013 0.4
Allegiance Corp.-/- ....................................... US 54,000 1,012,500 0.2
Unison Healthcare Corp.-/- ................................ US 50,000 412,500 0.1
------------
47,270,105
------------ -----
TOTAL EQUITY INVESTMENTS (cost $437,287,782) ................ 499,366,086 86.6
------------ -----
</TABLE>
The accompanying notes are an integral part of the financial statements.
F10
<PAGE>
GT GLOBAL HEALTH CARE FUND
PORTFOLIO OF INVESTMENTS (cont'd)
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NO. OF VALUE % OF NET
WARRANTS COUNTRY WARRANTS (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
ATS Medical Inc. Warrants, expire 3/2/97-/- ............... US 125,000 $ 50,781 --
MEDICAL TECHNOLOGY & SUPPLIES
ALZA Corp. Warrants, expire 12/31/96-/- ................... US 100,000 12,500 --
PHARMACEUTICALS
------------ -----
TOTAL WARRANTS (cost $0) .................................... 63,281 --
------------ -----
<CAPTION>
VALUE % OF NET
REPURCHASE AGREEMENT (NOTE 1) 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 63,055,000 U.S. Treasury Bonds, 7.125%
due 2/15/23 (market value of collateral is $66,598,433,
including accrued interest). (cost $65,289,064) .......... 65,289,064 11.3
------------ -----
TOTAL INVESTMENTS (cost $502,576,846) * ..................... 564,718,431 97.9
Other Assets and Liabilities ................................ 11,915,807 2.1
------------ -----
NET ASSETS .................................................. $576,634,238 100.0
------------ -----
------------ -----
</TABLE>
- --------------
-/- Non-income producing security.
{::} See Note 6 of Notes to Financial Statements.
{\/} U.S. currency denominated.
{c} Security issued under Regulation S. Rule 144A and additional
restrictions may apply in the resale of such securities.
(.) Restricted securities. At October 31, 1996, the Fund owned the
following restricted security constituting 1.0% of net assets which
may not be publicly sold without registration under the Securities
Act of 1933 (Note 1). Additional information on the restricted
security is as follows:
<TABLE>
<CAPTION>
VALUE
ACQUISITION ACQUISITION PER SHARE
DESCRIPTION DATE SHARES COST (NOTE 1)
---------------------------------------- ----------- ------- ----------- ---------
<S> <C> <C> <C> <C>
Spiros Development Corp................. 1/3/96 100,000 $ 3,000,000 $57.01
</TABLE>
* For Federal income tax purposes, cost is $503,725,361 and
appreciation (depreciation) is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $ 68,928,144
Unrealized depreciation: (7,935,074)
-------------
Net unrealized appreciation: $ 60,993,070
-------------
-------------
</TABLE>
Abbreviations:
ADR--American Depository Receipt
GDR--Global Depository Receipt
The accompanying notes are an integral part of the financial statements.
F11
<PAGE>
GT GLOBAL HEALTH CARE 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}
-----------------------------
SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE) EQUITY & OTHER TOTAL
- -------------------------------------- -------- ------- --------
<S> <C> <C> <C>
Canada (CAN/CAD) ..................... 3.9 3.9
Croatia (CRT/HRK) .................... 0.4 0.4
Germany (GER/DEM) .................... 1.3 1.3
Mexico (MEX/MXN) ..................... 0.4 0.4
Singapore (SING/SGD) ................. 1.1 1.1
Sweden (SWDN/SEK) .................... 4.5 4.5
Switzerland (SWTZ/CHF) ............... 3.8 3.8
United Kingdom (UK/GBP) .............. 1.5 1.5
United States (US/USD) ............... 69.7 13.4 83.1
-------- ------- --------
Total ............................... 86.6 13.4 100.0
-------- ------- --------
-------- ------- --------
</TABLE>
- --------------
{d} Percentages indicated are based on net assets of $576,634,238.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
OCTOBER 31, 1996
<TABLE>
<CAPTION>
MARKET
VALUE
(U.S. CONTRACT DELIVERY UNREALIZED
CONTRACTS TO SELL: DOLLARS) PRICE DATE APPRECIATION
- ---------------------------------------- ------------ ----------- -------- --------------
<S> <C> <C> <C> <C>
Swiss Francs............................ 11,944,396 1.23274 12/19/96 $ 223,620
Swiss Francs............................ 4,777,759 1.23335 12/19/96 87,040
------------ --------------
Total Contracts to Sell (Receivable
amount $17,032,815).................. 16,722,155 310,660
------------ --------------
THE VALUE OF CONTRACTS TO SELL AS
PERCENTAGE OF NET ASSETS IS 2.90%.
Total Open Forward Foreign Currency Contracts.............................. $ 310,660
--------------
--------------
</TABLE>
- ----------------
See Note 1 to the financial statements.
The accompanying notes are an integral part of the financial statements.
F12
<PAGE>
GT GLOBAL INFRASTRUCTURE FUND - CONSOLIDATED
PORTFOLIO OF INVESTMENTS
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Energy (30.8%)
Edison S.p.A. ............................................. ITLY 450,000 $ 2,682,589 2.9
ELECTRICAL & GAS UTILITIES
Compania Boliviana de Energia Electrica{\/} ............... BOL 62,300 2,632,175 2.9
ELECTRICAL & GAS UTILITIES
Companhia Energetica de Minas Gerais (Cemig) - ADR{\/} .... BRZL 81,174 2,536,688 2.8
ELECTRICAL & GAS UTILITIES
Enron Global Power & Pipelines L.L.C. ..................... US 90,000 2,531,250 2.7
ELECTRICAL & GAS UTILITIES
IES Industries, Inc. ...................................... US 81,000 2,490,750 2.7
ELECTRICAL & GAS UTILITIES
Empresa Nacional de Electridad S.A. - ADR{\/} ............. SPN 40,000 2,460,000 2.7
ELECTRICAL & GAS UTILITIES
EVN Energie-Versorgung Niederoesterreich AG ............... ASTRI 16,800 2,279,651 2.5
ELECTRICAL & GAS UTILITIES
Hub Power Co.-/- .......................................... PAK 2,400,000 2,053,897 2.2
ELECTRICAL & GAS UTILITIES
BSES Ltd. ................................................. IND -- -- 2.1
ELECTRICAL & GAS UTILITIES
GDR-/- {\/} ............................................. -- 80,600 1,491,100 --
Reg. S GDR-/- {\/} ...................................... -- 24,400 451,400 --
Capex S.A. ................................................ ARG 260,000 1,885,377 2.0
ELECTRICAL & GAS UTILITIES
Korea Electric Power Corp.: ............................... KOR -- -- 1.7
ELECTRICAL & GAS UTILITIES
Common .................................................. -- 31,000 914,199 --
ADR{\/} ................................................. -- 38,000 684,000 --
MetroGas S.A. - ADR{\/} ................................... ARG 100,000 925,000 1.0
ELECTRICAL & GAS UTILITIES
AES China Generating Co., Ltd. "A"-/- ..................... US 54,100 723,588 0.8
ELECTRICAL & GAS UTILITIES
Hafslund ASA "A" .......................................... NOR 80,800 633,467 0.7
ELECTRICAL & GAS UTILITIES
Edelnor S.A. "B" .......................................... PERU 490,200 532,000 0.6
ELECTRICAL & GAS UTILITIES
Metzler Group, Inc.-/- .................................... US 21,400 498,888 0.5
ENERGY EQUIPMENT & SERVICES
------------
28,406,019
------------
Services (27.2%)
Mannesmann AG ............................................. GER 7,500 2,913,969 3.2
WIRELESS COMMUNICATIONS
Tranz Rail Holdings Ltd. - ADR-/- {\/} .................... NZ 147,200 2,410,400 2.6
TRANSPORTATION - ROAD & RAIL
DDI Corp. ................................................. JPN 295 2,217,753 2.4
WIRELESS COMMUNICATIONS
Telefonica de Espana - ADR{\/} ............................ SPN 34,000 2,048,500 2.2
TELEPHONE NETWORKS
SPT Telecom-/- ............................................ CZCH 19,000 2,034,175 2.2
TELEPHONE NETWORKS
Hellenic Telecommunications - 144A{.} ..................... GREC 110,000 1,944,713 2.1
TELEPHONE NETWORKS
</TABLE>
The accompanying notes are an integral part of the financial statements.
F13
<PAGE>
GT GLOBAL INFRASTRUCTURE FUND - CONSOLIDATED
PORTFOLIO OF INVESTMENTS (cont'd)
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Services (Continued)
Philippine Long Distance Telephone Co. - ADR{\/} .......... PHIL 30,000 $ 1,796,250 1.9
TELEPHONE NETWORKS
ABC Rail Products Corp.-/- ................................ US 115,100 1,740,888 1.9
TRANSPORTATION - ROAD & RAIL
Canadian National Railway Co.{\/} ......................... CAN 60,900 1,674,750 1.8
TRANSPORTATION - ROAD & RAIL
Paging Network, Inc.-/- ................................... US 97,000 1,661,125 1.8
WIRELESS COMMUNICATIONS
PT Indonesia Satellite (Indosat) - ADR{\/} ................ INDO 40,000 1,205,000 1.3
TELEPHONE - LONG DISTANCE
Portugal Telecom S.A. - ADR{\/} ........................... PORT 43,000 1,112,625 1.2
TELEPHONE - REGIONAL/LOCAL
CPT Telefonica Del Peru, S.A. - ADR{\/} ................... PERU 40,900 843,563 0.9
TELEPHONE NETWORKS
Centennial Cellular Corp. "A"-/- .......................... US 50,000 643,750 0.7
WIRELESS COMMUNICATIONS
Pakistan Telecommunications Co., Ltd.: .................... PAK -- -- 0.7
TELEPHONE NETWORKS
GDR-/- {\/} ............................................. -- 4,892 366,900 --
New Voucher-/- .......................................... -- 2,800 226,348 --
Korea Mobile Telecom ...................................... KOR 290 298,535 0.3
WIRELESS COMMUNICATIONS
------------
25,139,244
------------
Materials/Basic Industry (17.2%)
La Cementos Nacional, C.A. 144A - GDR{.} -/- {\/} ......... ECDR 15,060 3,027,060 3.3
CEMENT
Giant Cement Holding, Inc.-/- ............................. US 179,800 2,697,000 2.9
CEMENT
RMI Titanium Co.-/- ....................................... US 106,600 2,571,725 2.8
METALS - NON-FERROUS
Northwest Pipe Co.-/- ..................................... US 127,500 2,199,375 2.4
METALS - STEEL
PT Bakrie and Brothers .................................... INDO 1,170,000 1,733,668 1.9
BUILDING MATERIALS & COMPONENTS
Hylsamex, S.A. de C.V. 144A - ADR{.} {\/} ................. MEX 75,000 1,612,500 1.7
METALS - STEEL
Cimpor-Cimentos de Portugal S.A. .......................... PORT 45,900 965,100 1.0
CEMENT
Siam Cement Co., Ltd. - Foreign ........................... THAI 28,000 957,866 1.0
CEMENT
HI Cement Corp.-/- ........................................ PHIL 439,000 135,514 0.2
CEMENT
------------
15,899,808
------------
Capital Goods (12.9%)
Tadiran Telecommunications Ltd.-/- {\/} ................... ISRL 130,000 2,990,000 3.2
TELECOM EQUIPMENT
ABB AB "B" ................................................ SWDN 22,000 2,456,172 2.7
ELECTRICAL PLANT/EQUIPMENT
</TABLE>
The accompanying notes are an integral part of the financial statements.
F14
<PAGE>
GT GLOBAL INFRASTRUCTURE FUND - CONSOLIDATED
PORTFOLIO OF INVESTMENTS (cont'd)
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Capital Goods (Continued)
United Engineers Ltd. ..................................... MAL 270,000 $ 2,137,767 2.3
CONSTRUCTION
Caterpillar, Inc. ......................................... US 30,000 2,058,750 2.2
MACHINERY & ENGINEERING
KCI Konecranes International-/- ........................... FIN 42,660 1,148,596 1.3
MACHINERY & ENGINEERING
C & P Homes, Inc. ......................................... PHIL 1,497,300 684,739 0.7
CONSTRUCTION
Cheung Kong Infrastructure ................................ HK 264,000 491,690 0.5
CONSTRUCTION
------------
11,967,714
------------
Technology (2.7%)
DSP Communications, Inc. .................................. US 65,900 2,504,200 2.7
------------
TELECOM TECHNOLOGY
Multi-Industry/Miscellaneous (1.6%)
E.R.G. Ltd. ............................................... AUSL 1,503,378 1,476,819 1.6
MULTI-INDUSTRY
------------ -----
TOTAL EQUITY INVESTMENTS (cost $75,266,645) ................. 85,393,804 92.4
------------ -----
<CAPTION>
VALUE % OF NET
REPURCHASE AGREEMENT (NOTE 1) 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 $5,685,000 U.S. Treasury Bond, 7.875%
due 11/15/07 (market value of collateral is $6,347,502,
including accrued interest). (cost $6,217,958) ........... 6,217,958 6.7
------------ -----
TOTAL INVESTMENTS (cost $81,484,603) * ...................... 91,611,762 99.1
Other Assets and Liabilities ................................ 806,829 0.9
------------ -----
NET ASSETS .................................................. $ 92,418,591 100.0
------------ -----
------------ -----
</TABLE>
- --------------
-/- Non-income producing security.
{\/} U.S. currency denominated.
{.} Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers.
* For Federal income tax purposes, cost is $81,484,603 and
appreciation (depreciation) is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $ 15,411,502
Unrealized depreciation: (5,284,343)
-------------
Net unrealized appreciation: $ 10,127,159
-------------
-------------
</TABLE>
Abbreviations:
ADR--American Depository Receipt
GDR--Global Depository Receipt
The accompanying notes are an integral part of the financial statements.
F15
<PAGE>
GT GLOBAL INFRASTRUCTURE FUND - CONSOLIDATED
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}
-----------------------------------
SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE) EQUITY & OTHER TOTAL
- -------------------------------------- ------ ------------- ----------
<S> <C> <C> <C>
Argentina (ARG/ARS) .................. 3.0 3.0
Australia (AUSL/AUD) ................. 1.6 1.6
Austria (ASTRI/ATS) .................. 2.5 2.5
Bolivia (BOL/BOL) .................... 2.9 2.9
Brazil (BRZL/BRL) .................... 2.8 2.8
Canada (CAN/CAD) ..................... 1.8 1.8
Czech Republic (CZCH/CSK) ............ 2.2 2.2
Ecuador (ECDR/ECS) ................... 3.3 3.3
Finland (FIN/FIM) .................... 1.3 1.3
Germany (GER/DEM) .................... 3.2 3.2
Greece (GREC/GRD) .................... 2.1 2.1
Hong Kong (HK/HKD) ................... 0.5 0.5
India (IND/INR) ...................... 2.1 2.1
Indonesia (INDO/IDR) ................. 3.2 3.2
Israel (ISRL/ILS) .................... 3.2 3.2
Italy (ITLY/ITL) ..................... 2.9 2.9
Japan (JPN/JPY) ...................... 2.4 2.4
Korea (KOR/KRW) ...................... 2.0 2.0
Malaysia (MAL/MYR) ................... 2.3 2.3
Mexico (MEX/MXN) ..................... 1.7 1.7
New Zealand (NZ/NZD) ................. 2.6 2.6
Norway (NOR/NOK) ..................... 0.7 0.7
Pakistan (PAK/PKR) ................... 2.9 2.9
Peru (PERU/PES) ...................... 1.5 1.5
Philippines (PHIL/PHP) ............... 2.8 2.8
Portugal (PORT/PTE) .................. 2.2 2.2
Spain (SPN/ESP) ...................... 4.9 4.9
Sweden (SWDN/SEK) .................... 2.7 2.7
Thailand (THAI/THB) .................. 1.0 1.0
United States (US/USD) ............... 24.1 7.6 31.7
------ ----- ----------
Total ............................... 92.4 7.6 100.0
------ ----- ----------
------ ----- ----------
</TABLE>
- --------------
{d} Percentages indicated are based on net assets of $92,418,591.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
OCTOBER 31, 1996
<TABLE>
<CAPTION>
MARKET VALUE CONTRACT DELIVERY UNREALIZED
CONTRACTS TO SELL: (U.S. DOLLARS) PRICE DATE APPRECIATION
- ---------------------------------------- -------------- --------- -------- ------------
<S> <C> <C> <C> <C>
Deutsche Marks.......................... 1,720,879 1.46900 11/29/96 $49,033
Japanese Yen............................ 339,752 106.30000 11/12/96 23,748
Japanese Yen............................ 291,769 110.00000 01/07/97 6,958
-------------- ------------
Total Contracts to Sell (Receivable
amount $2,432,139)................... 2,352,400 79,739
-------------- ------------
THE VALUE OF CONTRACTS TO SELL AS
PERCENTAGE OF NET ASSETS IS 2.55%.
Total Open Forward Foreign Currency
Contracts............................ $79,739
------------
------------
</TABLE>
- --------------
See Note 1 to the financial statements.
The accompanying notes are an integral part of the financial statements.
F16
<PAGE>
GT GLOBAL NATURAL RESOURCES FUND - CONSOLIDATED
PORTFOLIO OF INVESTMENTS
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Energy Equipment & Services (26.8%)
Veritas DGC, Inc. ......................................... US -- -- 5.6
Common-/- ............................................... -- 158,200 $ 3,243,100 --
Common-/- {/\} .......................................... -- 157,200 3,048,557 --
Rowan Cos., Inc.-/- ....................................... US 165,900 3,712,013 3.3
Energy Ventures, Inc.-/- .................................. US 81,300 3,577,200 3.2
Western Atlas, Inc.-/- .................................... US 49,900 3,461,813 3.1
Global Marine, Inc.-/- .................................... US 179,900 3,305,663 3.0
Seacor Holdings, Inc.-/- .................................. US 59,100 3,191,400 2.8
Input/Output, Inc.-/- ..................................... US 84,700 2,519,825 2.3
Tuboscope Vetco International Corp.-/- .................... US 119,100 1,816,275 1.6
Reading & Bates Corp.-/- .................................. US 43,000 1,236,250 1.1
Weatherford Enterra, Inc.-/- .............................. US 32,300 936,700 0.8
------------
30,048,796
------------
Oil (25.8%)
Ente Nazionale Idrocarburi (ENI) S.p.A. - ADR{\/} ......... ITLY 147,700 7,015,750 6.3
Benton Oil & Gas Co.-/- ................................... US 149,800 3,670,100 3.3
Abacan Resource Corp.-/- .................................. CAN 475,900 3,602,883 3.2
Cooper Cameron Corp.-/- ................................... US 53,200 3,398,150 3.0
Rutherford-Moran Oil Corp.-/- ............................. US 91,600 2,725,100 2.4
BJ Services Co.-/- ........................................ US 47,000 2,109,125 1.9
Petroleum Securities Australia Ltd. ....................... AUSL -- -- 1.5
Common-/- ............................................... -- 248,137 1,014,329 --
ADR-/- {\/} ............................................. -- 32,000 652,000 --
Basic Petroleum International Ltd.-/- ..................... US 52,800 1,610,400 1.4
Canadian 88 Energy Corp.-/- ............................... CAN 346,200 1,471,873 1.3
HarCor Energy, Inc.-/- .................................... US 239,900 1,229,488 1.1
Petroleo Brasileiro S.A. (Petrobras) Preferred-/- ......... BRZL 3,750,000 485,496 0.4
------------
28,984,694
------------
Gold (12.4%)
Bre-X Minerals Ltd.-/- .................................... CAN 191,700 3,202,864 2.9
Greenstone Resources Ltd.-/- .............................. CAN 219,400 2,781,980 2.5
Meridian Gold, Inc.-/- .................................... CAN 564,000 2,439,919 2.2
Getchell Gold Corp.-/- .................................... US 45,800 2,038,100 1.8
Oryx Gold Holdings Ltd.-/- ................................ SAFR 824,300 1,300,879 1.2
Asquith Resources, Inc.-/- ................................ CAN 487,400 908,854 0.8
HJ Joel Mining Co., Ltd.-/- ............................... SAFR 549,900 603,964 0.5
Arian Resources Corp.-/-{\/} .............................. CAN 200,000 290,000 0.3
Arizona Star Resource Corp.-/- ............................ CAN 16,200 97,270 0.1
Bema Gold Corp.-/- ........................................ CAN 10,900 65,447 0.1
Bro-X Minerals Ltd.-/- .................................... CAN 19,070 55,473 --
------------
13,784,750
------------
Gas Production & Distribution (11.8%)
Atwood Oceanics, Inc.-/- .................................. US 63,000 3,496,500 3.1
Triton Energy Ltd.-/- ..................................... US 71,400 3,186,225 2.9
</TABLE>
The accompanying notes are an integral part of the financial statements.
F17
<PAGE>
GT GLOBAL NATURAL RESOURCES FUND - CONSOLIDATED
PORTFOLIO OF INVESTMENTS (cont'd)
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Gas Production & Distribution (Continued)
Chesapeake Energy Corp.-/- ................................ US 54,600 $ 3,180,450 2.8
Enterprise Oil PLC ........................................ UK 247,700 2,242,842 2.0
Falcon Drilling Co., Inc.-/- .............................. US 33,000 1,167,375 1.0
------------
13,273,392
------------
Chemicals (4.7%)
Monsanto Co. .............................................. US 77,300 3,063,013 2.7
Cytec Industries, Inc.-/- ................................. US 61,800 2,209,350 2.0
------------
5,272,363
------------
Metals - Steel (4.7%)
UCAR International, Inc.-/- ............................... US 70,900 2,773,963 2.5
SGL Carbon AG ............................................. GER 22,100 2,489,791 2.2
------------
5,263,754
------------
Metals - Non-Ferrous (2.5%)
PT Tambang Timah: ......................................... INDO -- -- 1.6
144A GDR{.} {\/} ........................................ -- 97,200 1,484,730 --
Reg. S GDR{c} {\/} ...................................... -- 20,000 305,500 --
International Curator Resources Ltd.-/- ................... CAN 100,000 950,996 0.9
------------
2,741,226
------------
Energy Sources (1.9%)
Transocean Offshore, Inc.-/- .............................. US 33,300 2,106,225 1.9
------------
Misc. Materials & Commodities (1.6%)
Aber Resources Ltd.-/- .................................... CAN 88,200 1,374,938 1.2
Yamana Resources, Inc.-/-{\/} ............................. US 162,400 442,127 0.4
------------
1,817,065
------------
Transportation - Shipping (1.1%)
Trico Marine Services, Inc.-/- ............................ US 36,200 1,276,050 1.1
------------
Miscellaneous (1.1%)
Orogen Minerals Ltd. - 144A ADR{.} -/- {\/} ............... AUSL 82,000 1,230,000 1.1
------------ -----
TOTAL EQUITY INVESTMENTS (cost $90,052,470) ................. 105,798,315 94.4
------------ -----
<CAPTION>
NO. OF VALUE % OF NET
WARRANTS COUNTRY WARRANTS (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Yamana Resources, Inc. Warrants, expire 12/31/98-/- ....... US 81,200 85,393 0.1
MISC. MATERIALS & COMMODITIES
Arian Resources Corp. Warrants, expire 3/29/97-/- {\/} .... CAN 100,000 -- --
GOLD
------------ -----
TOTAL WARRANTS (cost $65,108) ............................... 85,393 0.1
------------ -----
</TABLE>
The accompanying notes are an integral part of the financial statements.
F18
<PAGE>
GT GLOBAL NATURAL RESOURCES FUND - CONSOLIDATED
PORTFOLIO OF INVESTMENTS (cont'd)
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
REPURCHASE AGREEMENT (NOTE 1) 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 $5,390,000 U.S. Treasury Bonds, 7.125%
due 2/15/23 (market value of collateral is $5,692,896,
including accrued interest). (cost $5,576,860) ........... $ 5,576,860 5.0
------------ -----
TOTAL INVESTMENTS (cost $95,694,438) * ...................... 111,460,568 99.5
Other Assets and Liabilities ................................ 518,655 0.5
------------ -----
NET ASSETS .................................................. $111,979,223 100.0
------------ -----
------------ -----
</TABLE>
- --------------
{/\} Security is denominated in Canadian Dollars.
-/- Non-income producing security.
{\/} U.S. currency denominated.
{.} Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers.
{c} Security issued under Regulation S. Rule 144A and additional
restrictions may apply in the resale of such securities.
* For Federal income tax purposes, cost is $96,324,663 and
appreciation (depreciation) is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $ 16,474,023
Unrealized depreciation: (1,338,118)
-------------
Net unrealized appreciation: $ 15,135,905
-------------
-------------
</TABLE>
Abbreviations:
ADR--American Depository Receipt
GDR--Global Depository Receipt
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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,
RIGHTS & SHORT-TERM
COUNTRY(COUNTRY CODE/CURRENCY CODE) EQUITY WARRANTS & OTHER TOTAL
- -------------------------------------- ------ ------------- ---------- -----
<S> <C> <C> <C> <C>
Australia (AUSL/AUD) ................. 2.6 2.6
Brazil (BRZL/BRL) .................... 0.4 0.4
Canada (CAN/CAD) ..................... 15.5 15.5
Germany (GER/DEM) .................... 2.2 2.2
Indonesia (INDO/IDR) ................. 1.6 1.6
Italy (ITLY/ITL) ..................... 6.3 6.3
South Africa (SAFR/ZAR) .............. 1.7 1.7
United Kingdom (UK/GBP) .............. 2.0 2.0
United States (US/USD) ............... 62.1 0.1 5.5 67.7
------ ----- ----- -----
Total ............................... 94.4 0.1 5.5 100.0
------ ----- ----- -----
------ ----- ----- -----
</TABLE>
- --------------
{d} Percentages indicated are based on net assets of $111,979,223.
The accompanying notes are an integral part of the financial statements.
F19
<PAGE>
GT GLOBAL NATURAL RESOURCES FUND - CONSOLIDATED
PORTFOLIO OF INVESTMENTS (cont'd)
October 31, 1996
- --------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
OCTOBER 31, 1996
<TABLE>
<CAPTION>
MARKET
VALUE
(U.S. CONTRACT DELIVERY UNREALIZED
CONTRACTS TO SELL: DOLLARS) PRICE DATE APPRECIATION
- ---------------------------------------- ------------ ----------- -------- --------------
<S> <C> <C> <C> <C>
Deutsche Marks.......................... 529,501 1.46900 11/29/96 $ 15,087
------------ --------------
Total Contracts to Sell (Receivable
amount $544,588)..................... 529,501 15,087
------------ --------------
THE VALUE OF CONTRACTS TO SELL AS
PERCENTAGE OF NET ASSETS IS 0.47%.
Total Open Forward Foreign Currency
Contracts............................ $ 15,087
--------------
--------------
</TABLE>
- --------------
See Note 1 to the financial statements.
The accompanying notes are an integral part of the financial statements.
F20
<PAGE>
GT GLOBAL TELECOMMUNICATIONS FUND
PORTFOLIO OF INVESTMENTS
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ----------------------------------------------------------- -------- ----------- -------------- -------------
<S> <C> <C> <C> <C>
Telecom Equipment (25.4%)
L.M. Ericsson Telephone Co.: ............................ SWDN -- -- 4.0
ADR ................................................... -- 2,327,300 $ 64,291,657 --
"B" Free .............................................. -- 871,200 23,619,465 --
Newbridge Networks Corp.-/- {\/} ........................ CAN 2,664,800 84,274,300 3.8
Nokia AB "A" ............................................ FIN 1,524,160 70,469,527 3.2
ECI Telecommunications Ltd.{\/} ......................... ISRL 2,879,500 57,590,000 2.6
Andrew Corp.-/- ......................................... US 647,350 31,558,313 1.4
ICG Communications, Inc.-/- ............................. US 1,254,600 23,523,750 1.1
ANTEC Corp.{::} -/- ..................................... US 2,162,300 23,109,581 1.0
Mitel Corp.-/- {\/} ..................................... CAN 2,798,100 18,887,175 0.9
Geotek Communications, Inc.-/- .......................... US 2,471,100 18,224,363 0.8
EchoStar Communications Corp. "A"-/- .................... US 609,200 17,971,400 0.8
DSC Communications Corp.-/- ............................. US 1,220,100 16,928,888 0.8
Tekelec{::} -/- ......................................... US 1,084,100 15,990,475 0.7
General Instrument Corp.-/- ............................. US 750,000 15,093,750 0.7
Tadiran Ltd. - ADR{\/} .................................. ISRL 435,600 11,434,500 0.5
Octel Communications Corp.-/- ........................... US 704,600 11,185,525 0.5
Champion Technology Holding Ltd. ........................ HK 73,439,163 9,688,419 0.4
Gandalf Technologies, Inc.{::} -/- {\/} ................. CAN 2,800,000 9,625,000 0.4
BroadBand Technologies, Inc.-/- ......................... US 492,300 8,799,863 0.4
Spectrian Corp.{::} -/- ................................. US 792,500 7,925,000 0.4
Scientific-Atlanta, Inc. ................................ US 537,700 7,796,650 0.4
Allen Group, Inc.-/- .................................... US 300,000 4,762,500 0.2
Motorola, Inc. .......................................... US 100,000 4,600,000 0.2
Netas Telekomunik ....................................... TRKY 17,820,000 4,306,361 0.2
--------------
561,656,462
--------------
Wireless Communications (20.7%)
DDI Corp. ............................................... JPN 13,320 100,137,167 4.5
Mannesmann AG ........................................... GER 160,900 62,514,339 2.8
Millicom International Cellular S.A.-/- {\/} ............ LUX 1,057,000 42,015,750 1.9
Korea Mobile Telecommunications: ........................ KOR -- -- 1.4
Common ................................................ -- 16,940 17,438,538 --
ADR{\/} ............................................... -- 990,000 12,375,000 --
Advanced Info. Service - Foreign ........................ THAI 1,993,150 27,054,920 1.2
Nextel Communications, Inc. "A"-/- ...................... US 1,585,700 25,371,200 1.1
Shinawatra Computer Co., Ltd. - Foreign ................. THAI 1,399,100 22,613,935 1.0
Vodafone Group PLC ...................................... UK 5,795,000 22,393,630 1.0
Telecom Italia Mobile S.p.A. - Di Risp .................. ITLY 14,630,000 16,780,821 0.7
United Communication Industry - Foreign ................. THAI 1,967,800 16,366,167 0.7
Telephone and Data Systems, Inc. ........................ US 408,500 14,297,500 0.7
Grupo Iusacell S.A. - "L" ADR-/- {\/} ................... MEX 1,672,100 12,749,763 0.6
Clearnet Communications, Inc. "A"-/- {\/} ............... CAN 797,000 11,755,750 0.5
International Engineering PLC - Foreign{::} ............. THAI 3,057,700 11,036,030 0.5
Tele 2000 S.A.{::} -/- .................................. PERU 7,043,222 10,919,724 0.5
Olivetti Group-/- ....................................... ITLY 30,086,997 8,733,725 0.4
WinStar Communications, Inc.-/- ......................... US 405,700 8,519,700 0.4
</TABLE>
The accompanying notes are an integral part of the financial statements.
F21
<PAGE>
GT GLOBAL TELECOMMUNICATIONS FUND
PORTFOLIO OF INVESTMENTS (cont'd)
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ----------------------------------------------------------- -------- ----------- -------------- -------------
<S> <C> <C> <C> <C>
Wireless Communications (Continued)
Western Wireless Corp. "A"-/- ........................... US 479,000 $ 7,903,500 0.4
Intercel, Inc.-/- ....................................... US 365,000 6,113,750 0.3
American Portable Telecom, Inc.-/- ...................... US 230,000 1,753,750 0.1
--------------
458,844,659
--------------
Telephone Networks (15.6%)
SPT Telecom-/- .......................................... CZCH 445,090 47,652,155 2.1
Stet Societa' Finanziaria Telefonica S.p.A. - Di Risp ... ITLY 16,820,000 44,909,248 2.0
Nippon Telegraph & Telephone Corp. ...................... JPN 6,120 42,780,269 1.9
Telefonica de Argentina S.A. "B" - ADR{\/} .............. ARG 1,668,000 38,781,000 1.7
Telecomunicacoes Brasileiras S.A. (Telebras) -
ADR{\/} ................................................ BRZL 477,800 35,596,100 1.6
Telecom Italia S.p.A.: .................................. ITLY -- -- 1.5
Di Risp ............................................... -- 12,172,000 23,057,683 --
Common ................................................ -- 4,274,001 9,562,242 --
Pakistan Telecommunications Co., Ltd. - GDR-/- {\/} ..... PAK 225,437 16,907,775 0.8
Telecom Argentina S.A. - ADR{\/} ........................ ARG 432,200 16,315,550 0.7
Hellenic Telecommunications - 144A{.} ................... GREC 880,000 15,557,704 0.7
TelecomAsia Corp. - Foreign-/- .......................... THAI 6,622,652 12,730,873 0.6
Atlantic Tele-Network, Inc.{::} -/- ..................... US 610,100 10,753,013 0.5
PT Indonesia Satellite (Indosat) - ADR{\/} .............. INDO 300,000 9,037,500 0.4
CPT Telefonica De Peru - ADR{\/} ........................ PERU 414,000 8,538,750 0.4
Russian Telecommunications Development Corp.: ........... RUS -- -- 0.4
Non-Voting(.) -/- {\/} (::) ........................... -- 453,000 4,530,000 --
Voting(.) -/- {\/} (::) ............................... -- 331,000 3,310,000 --
PLD Telekon, Inc.-/- {\/} ............................... CAN 510,000 3,378,750 0.2
Jasmine International Public Co., Ltd. - Foreign ........ THAI 560,400 1,538,956 0.1
--------------
344,937,568
--------------
Telephone - Regional/Local (5.9%)
MFS Communications Co., Inc.-/- ......................... US 2,244,900 112,525,613 5.0
Intermedia Communications of Florida, Inc.{::} -/- ...... US 593,900 19,004,800 0.9
--------------
131,530,413
--------------
Networking (5.5%)
3Com Corp.-/- ........................................... US 1,500,000 101,437,500 4.6
Bay Networks, Inc.-/- ................................... US 1,000,000 20,250,000 0.9
--------------
121,687,500
--------------
Broadcasting & Publishing (5.0%)
Granada Group PLC ....................................... UK 1,500,000 21,562,805 1.0
Grupo Televisa, S.A. de C.V. - GDR-/- {\/} .............. MEX 800,000 21,000,000 1.0
Canal Plus .............................................. FR 84,390 20,905,536 0.9
Sistem Televisyen Malaysia Bhd. ......................... MAL 7,436,000 16,779,572 0.8
Time Warner, Inc. ....................................... US 283,200 10,549,200 0.5
Home Shopping Network, Inc.-/- .......................... US 800,600 8,106,075 0.4
Tele-Communications Liberty Media Group, Inc. "A"-/- .... US 231,800 5,968,850 0.3
</TABLE>
The accompanying notes are an integral part of the financial statements.
F22
<PAGE>
GT GLOBAL TELECOMMUNICATIONS FUND
PORTFOLIO OF INVESTMENTS (cont'd)
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ----------------------------------------------------------- -------- ----------- -------------- -------------
<S> <C> <C> <C> <C>
Broadcasting & Publishing (Continued)
International Broadcasting Corp., Ltd. - Foreign-/- ..... THAI 1,741,900 $ 2,921,390 0.1
--------------
107,793,428
--------------
Cable Television (4.4%)
Nynex CableComms Group: ................................. UK -- -- 1.3
Units-/- .............................................. -- 15,134,000 27,948,405 --
ADR-/- {\/} ........................................... -- 98,900 1,818,833 --
Comcast Corp. "A" ....................................... US 1,704,300 25,138,425 1.1
International CableTel, Inc.-/- ......................... US 855,833 20,326,034 0.9
Bell Cablemedia PLC - ADR-/- {\/} ....................... UK 963,300 15,653,625 0.7
Comcast UK Cable Partners Ltd. "A"-/- ................... US 415,000 5,239,375 0.2
United International Holdings, Inc. "A"-/- .............. US 373,000 4,569,250 0.2
--------------
100,693,947
--------------
Telecom Technology (3.3%)
Kyushu-Matsushita Electric Co., Ltd. .................... JPN 1,861,000 28,635,804 1.3
Murata Manufacturing Co., Ltd. .......................... JPN 881,000 28,351,886 1.3
DSP Communications, Inc.{::} -/- ........................ US 408,200 15,511,600 0.7
--------------
72,499,290
--------------
Aerospace/Defense (2.1%)
Orbital Sciences Corp.{::} -/- .......................... US 2,163,500 45,433,500 2.1
--------------
Multi-Industry (1.8%)
Grupo Carso, S.A. de C.V. "A1"-/- ....................... MEX 8,795,000 40,027,120 1.8
--------------
Semiconductors (1.6%)
LSI Logic Corp.-/- ...................................... US 1,300,000 34,450,000 1.6
--------------
Consumer Electronics (1.4%)
Amcol Holdings Ltd.(::) ................................. SING 10,644,000 14,209,132 0.6
Three-Five Systems, Inc.{::} -/- ........................ US 749,000 9,268,875 0.4
Sapura Telecommunications Bhd. .......................... MAL 4,730,000 7,490,103 0.3
Himachal Futuristic Communications Ltd. - 144A GDR{.} -/-
{\/} ................................................... IND 2,248,000 1,978,240 0.1
--------------
32,946,350
--------------
Telecom - Other (1.0%)
Carso Global Telecom "A1"-/- ............................ MEX 8,975,683 21,823,668 1.0
--------------
Telephone - Long Distance (0.9%)
Call-Net Enterprises, Inc.: ............................. CAN -- -- 0.9
"B"-/- ................................................ -- 1,036,700 10,825,539 --
"A"-/- ................................................ -- 519,400 5,617,439 --
144A{.} -/- ........................................... -- 379,400 3,961,811 --
--------------
20,404,789
--------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F23
<PAGE>
GT GLOBAL TELECOMMUNICATIONS FUND
PORTFOLIO OF INVESTMENTS (cont'd)
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ----------------------------------------------------------- -------- ----------- -------------- -------------
<S> <C> <C> <C> <C>
Industrial Components (0.8%)
Oak Industries, Inc.-/- ................................. US 577,800 $ 14,661,675 0.6
PT Kabelindo Murni - Foreign{::} ........................ INDO 4,000,000 1,460,293 0.1
PT Kabelmetal Indonesia - Local ......................... INDO 2,600,000 1,116,695 0.1
--------------
17,238,663
--------------
Automobiles (0.4%)
Edaran Otomobil Nasional Bhd. ........................... MAL 983,000 9,184,006 0.4
--------------
Other Financial (0.1%)
Phatra Thanakit Co., Ltd. - Foreign ..................... THAI 619,500 2,296,695 0.1
--------------
Software (0.1%)
Quarterdeck Corp.-/- .................................... US 248,100 1,271,513 0.1
--------------
Retailers-Other (0.0%)
Gran Cadena de Almacenes Colombianos S.A. ............... COL 64,000 58,048 --
-------------- -----
TOTAL EQUITY INVESTMENTS (cost $2,035,304,624) ............ 2,124,777,619 96.0
-------------- -----
<CAPTION>
PRINCIPAL VALUE % OF NET
FIXED INCOME INVESTMENTS CURRENCY AMOUNT (NOTE 1) ASSETS
- ----------------------------------------------------------- -------- ----------- -------------- -------------
<S> <C> <C> <C> <C>
Structured Notes (1.1%)
Russia (1.1%)
Credit Suisse Synthetic Equity Medium Term Note, 3.25%
due 4/29/97 (This is an equity linked note. The value
of this note is linked to the underlying value of
Rostelecom.)-/- ...................................... USD 7,000,000 25,854,500 1.1
--------------
Corporate Bonds (0.1%)
Malaysia (0.1%)
Sapura Telecommunications Bhd., Convertible Bond, 2%
due 12/31/00 ......................................... MYR 3,547,500 1,249,911 0.1
-------------- -----
TOTAL FIXED INCOME INVESTMENTS (cost $8,399,408) .......... 27,104,411 1.2
-------------- -----
<CAPTION>
NO. OF VALUE % OF NET
WARRANTS COUNTRY WARRANTS (NOTE 1) ASSETS
- ----------------------------------------------------------- -------- ----------- -------------- -------------
<S> <C> <C> <C> <C>
American Satellite Network Warrants, expire 1/1/99
(cost$0)-/- (::) ....................................... US 65,825 -- --
-------------- -----
WIRELESS COMMUNICATIONS
</TABLE>
The accompanying notes are an integral part of the financial statements.
F24
<PAGE>
GT GLOBAL TELECOMMUNICATIONS FUND
PORTFOLIO OF INVESTMENTS (cont'd)
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
REPURCHASE AGREEMENT (NOTE 1) 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 $14,665,000 U.S. Treasury
Bonds, 7.125% due 2/15/23 (market value of collateral is
$15,489,113, including accrued interest). (cost
$15,183,346) ........................................... $ 15,183,346 0.7
-------------- -----
TOTAL INVESTMENTS (cost $2,058,887,378) * ................. 2,167,065,376 97.9
Other Assets and Liabilities .............................. 45,961,289 2.1
-------------- -----
NET ASSETS ................................................ $2,213,026,665 100.0
-------------- -----
-------------- -----
</TABLE>
- --------------
-/- Non-income producing security.
{::} See Note 6 of Notes to Financial Statements.
{\/} U.S. currency denominated.
{.} Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers.
(::) Valued in good faith at fair value using procedures approved by the
board of directors (See Note 1 of Notes to Financial Statements).
(.) Restricted securities. At October 31, 1996, the Fund owned the
following restricted securities constituting 0.4% of net assets
which may not be publicly sold without registration under the
Securities Act of 1933 (Note 1). Additional information on
restricted securities are as follows:
<TABLE>
<CAPTION>
VALUE
ACQUISITION PER
DESCRIPTION ACQUISITION DATE SHARES COST SHARE
----------------------------------------------- ----------------- ------ ----------- ------
<S> <C> <C> <C> <C>
Russian Telecommunications Development
Corporation:
Non-voting................................... 12/22/93 453,000 $ 4,530,000 $10.00
Voting....................................... 12/22/93 331,000 3,310,000 10.00
</TABLE>
* For Federal income tax purposes, cost is $2,061,952,105 and
appreciation (depreciation) is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $ 477,822,867
Unrealized depreciation: (372,709,596)
-------------
Net unrealized appreciation: $ 105,113,271
-------------
-------------
</TABLE>
Abbreviations:
ADR--American Depository Receipt
GDR--Global Depository Receipt
The accompanying notes are an integral part of the financial statements.
F25
<PAGE>
GT GLOBAL TELECOMMUNICATIONS 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,
RIGHTS & SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE) EQUITY WARRANTS & OTHER TOTAL
- -------------------------------------- --------- ------------- ------------- ---------
<S> <C> <C> <C> <C>
Argentina (ARG/ARS) .................. 2.4 2.4
Brazil (BRZL/BRL) .................... 1.6 1.6
Canada (CAN/CAD) ..................... 6.7 6.7
Czech Republic (CZCH/CSK) ............ 2.1 2.1
Finland (FIN/FIM) .................... 3.2 3.2
France (FR/FRF) ...................... 0.9 0.9
Germany (GER/DEM) .................... 2.8 2.8
Greece (GREC/GRD) .................... 0.7 0.7
Hong Kong (HK/HKD) ................... 0.4 0.4
India (IND/INR) ...................... 0.1 0.1
Indonesia (INDO/IDR) ................. 0.6 0.6
Israel (ISRL/ILS) .................... 3.1 3.1
Italy (ITLY/ITL) ..................... 4.6 4.6
Japan (JPN/JPY) ...................... 9.0 9.0
Korea (KOR/KRW) ...................... 1.4 1.4
Luxembourg (LUX/LUF) ................. 1.9 1.9
Malaysia (MAL/MYR) ................... 1.5 0.1 1.6
Mexico (MEX/MXN) ..................... 4.4 4.4
Pakistan (PAK/PKR) ................... 0.8 0.8
Peru (PERU/PES) ...................... 0.9 0.9
Russia (RUS/SUR) ..................... 0.4 1.1 1.5
Singapore (SING/SGD) ................. 0.6 0.6
Sweden (SWDN/SEK) .................... 4.0 4.0
Thailand (THAI/THB) .................. 4.3 4.3
Turkey (TRKY/TRL) .................... 0.2 0.2
United Kingdom (UK/GBP) .............. 4.0 4.0
United States (US/USD) ............... 33.4 2.8 36.2
--------- ----- ----- ---------
Total ............................... 96.0 1.2 2.8 100.0
--------- ----- ----- ---------
--------- ----- ----- ---------
</TABLE>
- --------------
{d} Percentages indicated are based on net assets of $2,213,026,665.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 1,370,120 5.14010 11/19/96 $ 8,279
------------ --------------
Total Contracts to Buy (Payable amount
$1,361,841).......................... 1,370,120 8,279
------------ --------------
THE VALUE OF CONTRACTS TO BUY AS
PERCENTAGE OF NET ASSETS IS 0.06%.
<CAPTION>
CONTRACTS TO SELL:
- ----------------------------------------
<S> <C> <C> <C> <C>
Deutsche Marks.......................... 36,403,205 1.46900 11/29/96 1,037,231
French Francs........................... 15,658,510 5.05905 11/19/96 154,736
Japanese Yen............................ 14,261,848 106.41100 11/12/96 980,937
Japanese Yen............................ 31,759,430 106.41100 11/12/96 2,184,429
Japanese Yen............................ 2,229,844 110.00000 1/07/97 53,174
------------ --------------
Total Contracts to Sell (Receivable
amount $104,723,144)................. 100,312,837 4,410,507
------------ --------------
THE VALUE OF CONTRACTS TO SELL AS
PERCENTAGE OF NET ASSETS IS 4.53%.
Total Open Forward Foreign Currency Contracts, Net......................... $4,418,786
--------------
--------------
</TABLE>
- --------------
See Note 1 to the financial statements.
The accompanying notes are an integral part of the financial statements.
F26
<PAGE>
GT GLOBAL THEME FUNDS
STATEMENT OF ASSETS
AND LIABILITIES
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GT GLOBAL
-----------------------------------------------------------------------------
CONSUMER NATURAL
PRODUCTS AND FINANCIAL INFRASTRUCTURE RESOURCES
SERVICES FUND- SERVICES FUND- HEALTH FUND- FUND-
CONSOLIDATED CONSOLIDATED CARE CONSOLIDATED CONSOLIDATED
(NOTE 1) (NOTE 1) FUND (NOTE 1) (NOTE 1)
-------------- -------------- ------------ -------------- ------------
<S> <C> <C> <C> <C> <C>
Assets:
Investments in securities: (Note 1)
At identified cost............................ $156,514,774 $14,381,272 $437,287,782 $ 75,266,645 $ 90,117,578
-------------- -------------- ------------ -------------- ------------
-------------- -------------- ------------ -------------- ------------
At value...................................... $165,777,735 $15,772,784 $499,429,367 $ 85,393,804 $105,883,708
Repurchase agreement, at value and cost (Note
1)............................................. 10,575,630 523,081 65,289,064 6,217,958 5,576,860
U.S. currency................................... 589 559 807 613 610
Foreign currencies (cost $229, $367,172,
$30,826, $87,210, $0, and $4,844,257,
respectively).................................. 244 370,106 30,766 85,042 --
Dividends and dividend withholding tax reclaims
receivable..................................... 54,386 18,230 151,779 56,171 2,230
Interest receivable............................. -- -- -- -- --
Receivable for forward foreign currency
contracts -- closed (Note 1)................... 1,301 -- 7,862 -- --
Receivable for Fund shares sold................. 2,751,357 930,632 26,125,858 675,763 2,205,515
Receivable for open forward foreign currency
contracts, net (Note 1)........................ -- -- 310,660 79,739 15,087
Receivable for securities sold.................. 160,000 313,698 5,341,038 447,146 4,361,795
Unamortized organizational costs (Note 1)....... 32,564 32,566 -- 26,580 26,525
Miscellaneous receivable........................ -- -- 12,890 -- --
Cash held as collateral for securities loaned
(Note 1)....................................... 10,659,295 805,810 21,329,702 7,455,555 3,777,600
-------------- -------------- ------------ -------------- ------------
Total assets.................................. 190,013,101 18,767,466 618,029,793 100,438,371 121,849,930
-------------- -------------- ------------ -------------- ------------
Liabilities:
Due to custodian................................ -- -- -- -- 8,709
Payable for custodian fees (Note 1)............. 2,063 272 6,150 9,020 5,312
Payable for Directors' and Trustees' fees and
expenses
(Note 2)....................................... 6,279 6,378 7,119 9,488 6,401
Payable for fund accounting fees (Note 2)....... 3,495 322 11,566 1,882 2,093
Payable for Fund shares repurchased (Note 2).... 517,537 102,280 895,196 103,995 2,118,238
Payable for investment management and
administration fees (Note 2)................... 138,354 2,560 471,859 77,016 84,624
Payable for printing and postage expenses....... 32,438 18,382 103,881 46,232 34,516
Payable for professional fees................... 49,782 38,114 61,605 52,463 45,047
Payable for registration and filing fees........ 2,715 7,444 16,637 4,674 4,491
Payable for securities purchased................ 6,154,529 501,995 18,051,876 164,460 3,692,099
Payable for service and distribution expenses
(Note 2)....................................... 103,066 10,634 288,857 62,404 63,963
Payable for transfer agent fees (Note 2)........ 46,516 4,998 137,193 27,203 19,697
Other accrued expenses.......................... 46,125 8,519 13,914 5,288 7,817
Collateral for securities loaned (Note 1)....... 10,659,295 805,810 21,329,702 7,455,555 3,777,600
-------------- -------------- ------------ -------------- ------------
Total liabilities............................. 17,762,194 1,507,708 41,395,555 8,019,680 9,870,607
Minority interest (Notes 1 & 2)................. 100 100 -- 100 100
-------------- -------------- ------------ -------------- ------------
Net assets........................................ $172,250,807 $17,259,658 $576,634,238 $ 92,418,591 $111,979,223
-------------- -------------- ------------ -------------- ------------
-------------- -------------- ------------ -------------- ------------
<CAPTION>
TELECOM-
MUNICATIONS
FUND
--------------
<S> <C>
Assets:
Investments in securities: (Note 1)
At identified cost............................ $2,043,704,032
--------------
--------------
At value...................................... $2,151,882,030
Repurchase agreement, at value and cost (Note
1)............................................. 15,183,346
U.S. currency................................... 274
Foreign currencies (cost $229, $367,172,
$30,826, $87,210, $0, and $4,844,257,
respectively).................................. 4,826,005
Dividends and dividend withholding tax reclaims
receivable..................................... 665,209
Interest receivable............................. 139,474
Receivable for forward foreign currency
contracts -- closed (Note 1)................... --
Receivable for Fund shares sold................. 53,176,602
Receivable for open forward foreign currency
contracts, net (Note 1)........................ 4,418,786
Receivable for securities sold.................. 7,959,285
Unamortized organizational costs (Note 1)....... --
Miscellaneous receivable........................ 8,542
Cash held as collateral for securities loaned
(Note 1)....................................... 222,733,129
--------------
Total assets.................................. 2,460,992,682
--------------
Liabilities:
Due to custodian................................ --
Payable for custodian fees (Note 1)............. 11,725
Payable for Directors' and Trustees' fees and
expenses
(Note 2)....................................... 3,702
Payable for fund accounting fees (Note 2)....... 45,056
Payable for Fund shares repurchased (Note 2).... 18,334,671
Payable for investment management and
administration fees (Note 2)................... 1,813,363
Payable for printing and postage expenses....... 392,798
Payable for professional fees................... 51,371
Payable for registration and filing fees........ 17,038
Payable for securities purchased................ 2,479,350
Payable for service and distribution expenses
(Note 2)....................................... 1,421,742
Payable for transfer agent fees (Note 2)........ 638,786
Other accrued expenses.......................... 23,286
Collateral for securities loaned (Note 1)....... 222,733,129
--------------
Total liabilities............................. 247,966,017
Minority interest (Notes 1 & 2)................. --
--------------
Net assets........................................ $2,213,026,665
--------------
--------------
</TABLE>
F27
<PAGE>
GT GLOBAL THEME FUNDS
STATEMENT OF ASSETS
AND LIABILITIES (cont'd)
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GT GLOBAL
-----------------------------------------------------------------------------
CONSUMER NATURAL
PRODUCTS AND FINANCIAL INFRASTRUCTURE RESOURCES
SERVICES FUND- SERVICES FUND- HEALTH FUND- FUND-
CONSOLIDATED CONSOLIDATED CARE CONSOLIDATED CONSOLIDATED
(NOTE 1) (NOTE 1) FUND (NOTE 1) (NOTE 1)
-------------- -------------- ------------ -------------- ------------
<S> <C> <C> <C> <C> <C>
Class A:
Net assets...................................... $ 76,899,940 $ 7,301,731 $467,860,558 $ 38,397,219 $ 48,728,791
-------------- -------------- ------------ -------------- ------------
-------------- -------------- ------------ -------------- ------------
Shares outstanding.............................. 3,665,880 514,137 19,822,541 2,663,494 2,795,302
Net asset value and redemption price per
share.......................................... $ 20.98 $ 14.20 $ 23.60 $ 14.42 $ 17.43
-------------- -------------- ------------ -------------- ------------
-------------- -------------- ------------ -------------- ------------
Maximum offering price per share (100/95.25 of
Class A net asset value) *..................... $ 22.03 $ 14.91 $ 24.78 $ 15.14 $ 18.30
-------------- -------------- ------------ -------------- ------------
-------------- -------------- ------------ -------------- ------------
Class B:+
Net assets...................................... $ 87,904,447 $ 9,886,172 $107,622,082 $ 53,677,528 $ 57,748,785
-------------- -------------- ------------ -------------- ------------
-------------- -------------- ------------ -------------- ------------
Shares outstanding.............................. 4,229,101 702,892 4,649,095 3,768,398 3,340,490
Net asset value and offering price per share.... $ 20.79 $ 14.06 $ 23.15 $ 14.24 $ 17.29
-------------- -------------- ------------ -------------- ------------
-------------- -------------- ------------ -------------- ------------
Advisor Class:
Net assets...................................... $ 7,446,420 $ 71,755 $ 1,151,688 $ 343,844 $ 5,501,647
-------------- -------------- ------------ -------------- ------------
-------------- -------------- ------------ -------------- ------------
Shares outstanding.............................. 352,047 5,031 48,446 23,685 314,997
Net asset value, offering price per share, and
redemption price per share..................... $ 21.15 $ 14.26 $ 23.77 $ 14.52 $ 17.47
-------------- -------------- ------------ -------------- ------------
-------------- -------------- ------------ -------------- ------------
Net assets consist of:
Paid in capital (Note 4)........................ $155,328,612 $14,559,393 $472,931,662 $ 77,651,961 $ 92,455,436
Undistributed net investment income............. -- -- -- -- --
Accumulated net realized gain on investments and
foreign currency transactions.................. 7,659,347 1,301,123 41,248,577 4,567,246 3,740,782
Net unrealized appreciation (depreciation) on
translation of assets and liabilities in
foreign currencies............................. (113) 7,630 312,414 72,225 16,875
Net unrealized appreciation of investments...... 9,262,961 1,391,512 62,141,585 10,127,159 15,766,130
-------------- -------------- ------------ -------------- ------------
Total -- representing net assets applicable to
capital shares outstanding....................... $172,250,807 $17,259,658 $576,634,238 $ 92,418,591 $111,979,223
-------------- -------------- ------------ -------------- ------------
-------------- -------------- ------------ -------------- ------------
<CAPTION>
TELECOM-
MUNICATIONS
FUND
--------------
<S> <C>
Class A:
Net assets...................................... $1,204,427,814
--------------
--------------
Shares outstanding.............................. 72,150,592
Net asset value and redemption price per
share.......................................... $ 16.69
--------------
--------------
Maximum offering price per share (100/95.25 of
Class A net asset value) *..................... $ 17.52
--------------
--------------
Class B:+
Net assets...................................... $1,007,654,047
--------------
--------------
Shares outstanding.............................. 61,550,681
Net asset value and offering price per share.... $ 16.37
--------------
--------------
Advisor Class:
Net assets...................................... $ 944,804
--------------
--------------
Shares outstanding.............................. 56,192
Net asset value, offering price per share, and
redemption price per share..................... $ 16.81
--------------
--------------
Net assets consist of:
Paid in capital (Note 4)........................ $1,928,891,755
Undistributed net investment income............. 5,534
Accumulated net realized gain on investments and
foreign currency transactions.................. 171,566,775
Net unrealized appreciation (depreciation) on
translation of assets and liabilities in
foreign currencies............................. 4,384,603
Net unrealized appreciation of investments...... 108,177,998
--------------
Total -- representing net assets applicable to
capital shares outstanding....................... $2,213,026,665
--------------
--------------
<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.
F28
<PAGE>
GT GLOBAL THEME FUNDS
STATEMENT OF OPERATIONS
Year ended October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GT GLOBAL
-----------------------------------------------------------------------------
CONSUMER NATURAL
PRODUCTS AND FINANCIAL HEALTH INFRASTRUCTURE RESOURCES
SERVICES FUND- SERVICES FUND- CARE FUND- FUND-
CONSOLIDATED CONSOLIDATED FUND CONSOLIDATED CONSOLIDATED
-------------- -------------- ------------ -------------- ------------
<S> <C> <C> <C> <C> <C>
Investment income:
Dividend income (net of foreign withholding tax
of $6,469, $14,755, $180,801, $121,927, $14,864,
and $1,982,953, respectively)................... $ 359,427 $ 298,448 $ 4,282,409 $ 1,455,213 $ 279,542
Interest income.................................. 286,745 82,401 1,726,617 249,111 103,047
Other income..................................... -- -- 137,615 -- --
-------------- -------------- ------------ -------------- ------------
Total investment income........................ 646,172 380,849 6,146,641 1,704,324 382,589
-------------- -------------- ------------ -------------- ------------
Expenses:
Investment management and administration fees
(Note 2)........................................ 570,263 134,856 5,495,494 854,191 573,359
Amortization of organization costs (Note 1)...... 10,329 12,656 -- 10,328 10,329
Audit fees....................................... 43,914 50,836 67,326 59,469 60,546
Custodian Fees (Note 1).......................... 54,316 9,966 105,999 90,835 42,780
Directors' and Trustees' fees and expenses (Note
2).............................................. 10,248 18,836 19,532 16,836 19,336
Fund accounting fees (Note 2).................... 14,778 3,493 141,582 21,910 14,761
Insurance expenses............................... -- -- 4,691 2,912 --
Legal fees....................................... 27,084 22,744 23,816 26,626 26,268
Printing and postage expenses.................... 72,698 42,822 181,817 69,906 57,462
Registration and filing fees..................... 43,398 38,908 109,174 41,516 37,568
Service and distribution expenses: (Note 2)
Class A........................................ 144,407 31,297 2,335,519 177,035 139,991
Class B........................................ 285,201 76,454 969,596 518,147 296,729
Transfer agent fees (Note 2)..................... 234,686 53,854 1,414,082 323,010 212,761
Other expenses................................... 4,241 14,142 3,875 12,156 7,917
-------------- -------------- ------------ -------------- ------------
Total expenses before reductions............... 1,515,563 510,864 10,872,503 2,224,877 1,499,807
-------------- -------------- ------------ -------------- ------------
Expenses reimbursed by Chancellor LGT Asset
Management, Inc. (Note 2)................... -- (138,132) -- -- --
Expense reductions (Notes 1 & 5)............. (62,446) (10,706) (217,027) (98,566) (61,692)
-------------- -------------- ------------ -------------- ------------
Total net expenses............................. 1,453,117 362,026 10,655,476 2,126,311 1,438,115
-------------- -------------- ------------ -------------- ------------
Net investment income (loss)....................... (806,945) 18,823 (4,508,835) (421,987) (1,055,526)
-------------- -------------- ------------ -------------- ------------
Net realized and unrealized gain on investments and
foreign currencies: (Note 1)
Net realized gain on investments................. 8,408,399 1,705,569 174,045,838 4,996,832 7,289,530
Net realized gain on foreign currency
transactions.................................... 64,343 58,811 2,843,700 311,306 27,175
-------------- -------------- ------------ -------------- ------------
Net realized gain during the year.............. 8,472,742 1,764,380 176,889,538 5,308,138 7,316,705
-------------- -------------- ------------ -------------- ------------
Net change in unrealized appreciation
(depreciation) on translation of assets and
liabilities in foreign currencies............... (7,034) (6,352) (547,070) (86,155) 65,378
Net change in unrealized appreciation
(depreciation) of
investments..................................... 8,880,649 615,083 (53,392,951) 9,582,726 14,910,009
-------------- -------------- ------------ -------------- ------------
Net unrealized appreciation (depreciation)
during the period............................. 8,873,615 608,731 (53,940,021) 9,496,571 14,975,387
-------------- -------------- ------------ -------------- ------------
Net realized and unrealized gain on investments and
foreign currencies................................ 17,346,357 2,373,111 122,949,517 14,804,709 22,292,092
-------------- -------------- ------------ -------------- ------------
Net increase in net assets resulting from
operations........................................ $16,539,412 $2,391,934 $118,440,682 $14,382,722 $21,236,566
-------------- -------------- ------------ -------------- ------------
-------------- -------------- ------------ -------------- ------------
<CAPTION>
TELECOM-
MUNICATIONS
FUND
------------
<S> <C>
Investment income:
Dividend income (net of foreign withholding tax
of $6,469, $14,755, $180,801, $121,927, $14,864,
and $1,982,953, respectively)................... $ 20,581,055
Interest income.................................. 1,720,560
Other income..................................... --
------------
Total investment income........................ 22,301,615
------------
Expenses:
Investment management and administration fees
(Note 2)........................................ 23,119,601
Amortization of organization costs (Note 1)...... 12,074
Audit fees....................................... 67,129
Custodian Fees (Note 1).......................... 1,025,576
Directors' and Trustees' fees and expenses (Note
2).............................................. 23,176
Fund accounting fees (Note 2).................... 621,480
Insurance expenses............................... --
Legal fees....................................... 24,222
Printing and postage expenses.................... 491,519
Registration and filing fees..................... 102,132
Service and distribution expenses: (Note 2)
Class A........................................ 6,774,499
Class B........................................ 11,294,711
Transfer agent fees (Note 2)..................... 6,517,937
Other expenses................................... 70,269
------------
Total expenses before reductions............... 50,144,325
------------
Expenses reimbursed by Chancellor LGT Asset
Management, Inc. (Note 2)................... --
Expense reductions (Notes 1 & 5)............. (1,344,233)
------------
Total net expenses............................. 48,800,092
------------
Net investment income (loss)....................... (26,498,477)
------------
Net realized and unrealized gain on investments and
foreign currencies: (Note 1)
Net realized gain on investments................. 186,997,632
Net realized gain on foreign currency
transactions.................................... 43,492,161
------------
Net realized gain during the year.............. 230,489,793
------------
Net change in unrealized appreciation
(depreciation) on translation of assets and
liabilities in foreign currencies............... (21,852,465)
Net change in unrealized appreciation
(depreciation) of
investments..................................... (5,766,662)
------------
Net unrealized appreciation (depreciation)
during the period............................. (27,619,127)
------------
Net realized and unrealized gain on investments and
foreign currencies................................ 202,870,666
------------
Net increase in net assets resulting from
operations........................................ $176,372,189
------------
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F29
<PAGE>
GT GLOBAL THEME FUNDS
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
GT GLOBAL
--------------------------------------------------------------
CONSUMER PRODUCTS
AND SERVICES
FUND-CONSOLIDATED
--------------------------------
DECEMBER 30, FINANCIAL SERVICES
1994 FUND-CONSOLIDATED
(COMMENCEMENT ---------------------------
YEAR ENDED OF OPERATIONS) TO YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1996 1995 1996 1995
------------- ----------------- ------------- ------------
Increase (decrease) in net assets
Operations:
Net investment income (loss)...... $ (806,945) $ 1,159 $ 18,823 $ 93,158
Net realized gain (loss) on
investments and foreign currency
transactions..................... 8,472,742 395,974 1,764,380 (438,738)
Net change in unrealized
appreciation (depreciation) on
translation of assets and
liabilities in foreign
currencies....................... (7,034) 6,921 (6,352) 13,973
Net change in unrealized
appreciation (depreciation) of
investments...................... 8,880,649 382,312 615,083 743,739
------------- ----------------- ------------- ------------
Net increase (decrease) in net
assets resulting from
operations..................... 16,539,412 786,366 2,391,934 412,132
------------- ----------------- ------------- ------------
Class A:
Distributions to shareholders: (Note
1)
From net investment income........ -- -- (56,390) --
From net realized gain on
investments...................... (217,050) -- (8,739) --
Class B:
Distributions to shareholders: (Note
1)
From net investment income........ -- -- (37,999) --
From net realized gain on
investments...................... (180,431) -- (7,991) --
Advisor Class:
Distributions to shareholders: (Note
1)
From net investment income........ -- -- (377) --
From net realized gain on
investments...................... (5,969) -- (43) --
------------- ----------------- ------------- ------------
Total distributions............. (403,450) -- (111,539) --
------------- ----------------- ------------- ------------
Capital share transactions: (Note 4)
Increase from capital shares sold
and reinvested................... 241,650,741 7,649,630 19,900,814 10,643,479
Decrease from capital shares
repurchased...................... (92,740,871) (1,331,021) (15,187,336) (6,199,828)
------------- ----------------- ------------- ------------
Net increase (decrease) from
capital share transactions..... 148,909,870 6,318,609 4,713,478 4,443,651
------------- ----------------- ------------- ------------
Total increase (decrease) in net
assets............................. 165,045,832 7,104,975 6,993,873 4,855,783
Net assets:
Beginning of year................. 7,204,975 100,000 10,265,785 5,410,002
------------- ----------------- ------------- ------------
End of year....................... $ 172,250,807* $ 7,204,975* $ 17,259,658* $ 10,265,785*
------------- ----------------- ------------- ------------
------------- ----------------- ------------- ------------
* Includes undistributed investment
income........................... $ -- $ 397,133 $ -- $ 86,274
------------- ----------------- ------------- ------------
------------- ----------------- ------------- ------------
<CAPTION>
HEALTH CARE
FUND
----------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1996 1995
---------------- ----------------
Increase (decrease) in net assets
Operations:
Net investment income (loss)...... $ (4,508,835) $ (3,529,866)
Net realized gain (loss) on
investments and foreign currency
transactions..................... 176,889,538 67,043,506
Net change in unrealized
appreciation (depreciation) on
translation of assets and
liabilities in foreign
currencies....................... (547,070) 961,568
Net change in unrealized
appreciation (depreciation) of
investments...................... (53,392,951) 19,234,934
---------------- ----------------
Net increase (decrease) in net
assets resulting from
operations..................... 118,440,682 83,710,142
---------------- ----------------
Class A:
Distributions to shareholders: (Note
1)
From net investment income........ -- --
From net realized gain on
investments...................... (54,405,334) (27,521,553)
Class B:
Distributions to shareholders: (Note
1)
From net investment income........ -- --
From net realized gain on
investments...................... (9,956,648) (2,846,079)
Advisor Class:
Distributions to shareholders: (Note
1)
From net investment income........ -- --
From net realized gain on
investments...................... (69,184) --
---------------- ----------------
Total distributions............. (64,431,166) (30,367,632)
---------------- ----------------
Capital share transactions: (Note 4)
Increase from capital shares sold
and reinvested................... 2,138,295,778 1,635,173,338
Decrease from capital shares
repurchased...................... (2,113,330,083) (1,668,897,114)
---------------- ----------------
Net increase (decrease) from
capital share transactions..... 24,965,695 (33,723,776)
---------------- ----------------
Total increase (decrease) in net
assets............................. 78,975,211 19,618,734
Net assets:
Beginning of year................. 497,659,027 478,040,293
---------------- ----------------
End of year....................... $ 576,634,238* $ 497,659,027*
---------------- ----------------
---------------- ----------------
* Includes undistributed investment
income........................... $ -- $ --
---------------- ----------------
---------------- ----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F30
<PAGE>
GT GLOBAL THEME FUNDS
STATEMENT OF CHANGES IN NET ASSETS (cont'd)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GT GLOBAL
-----------------------------------------------------------
INFRASTRUCTURE NATURAL RESOURCES
FUND-CONSOLIDATED FUND-CONSOLIDATED
---------------------------- -----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1996 1995 1996 1995
------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets
Operations:
Net investment income (loss)...... $ (421,987) $ (507,328) $ (1,055,526) $ 48,118
Net realized gain (loss) on
investments and foreign currency
transactions..................... 5,308,138 (58,363) 7,316,705 (2,391,427)
Net change in unrealized
appreciation (depreciation) on
translation of assets and
liabilities in foreign
currencies....................... (86,155) 157,236 65,378 (43,764)
Net change in unrealized
appreciation (depreciation) of
investments...................... 9,582,726 (565,235) 14,910,009 177,530
------------- ------------- -------------- -------------
Net increase (decrease) in net
assets resulting from
operations..................... 14,382,722 (973,690) 21,236,566 (2,209,543)
------------- ------------- -------------- -------------
Class A:
Distributions to shareholders: (Note
1)
From net investment income........ -- -- (46,497) (36,529)
From net realized gain on
investments...................... -- -- (9,643) --
Class B:
Distributions to shareholders: (Note
1)
From net investment income........ -- -- -- (30,368)
From net realized gain on
investments...................... -- -- (10,136) --
Advisor Class:
Distributions to shareholders: (Note
1)
From net investment income........ -- -- (853) --
From net realized gain on
investments...................... -- -- (69) --
------------- ------------- -------------- -------------
Total distributions............. -- -- (67,198) (66,897)
------------- ------------- -------------- -------------
Capital share transactions: (Note 4)
Increase from capital shares sold
and reinvested................... 42,853,853 69,579,771 219,606,793 38,611,615
Decrease from capital shares
repurchased...................... (51,456,466) (36,537,085) (155,468,156) (37,864,366)
------------- ------------- -------------- -------------
Net increase (decrease) from
capital share transactions..... (8,602,613) 33,042,686 64,138,637 747,249
------------- ------------- -------------- -------------
Total increase (decrease) in net
assets............................. 5,780,109 32,068,996 85,308,005 (1,529,191)
Net assets:
Beginning of year................. 86,638,482 54,569,486 26,671,218 28,200,409
------------- ------------- -------------- -------------
End of year....................... $ 92,418,591* $ 86,638,482* $ 111,979,223* $ 26,671,218*
------------- ------------- -------------- -------------
------------- ------------- -------------- -------------
* Includes undistributed investment
income........................... $ -- $ 0 $ -- $ 47,438
------------- ------------- -------------- -------------
------------- ------------- -------------- -------------
<CAPTION>
TELECOMMUNICATIONS
FUND
----------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1996 1995
---------------- ----------------
<S> <C> <C>
Increase (decrease) in net assets
Operations:
Net investment income (loss)...... $ (26,498,477) $ (18,253,687)
Net realized gain (loss) on
investments and foreign currency
transactions..................... 230,489,793 112,281,604
Net change in unrealized
appreciation (depreciation) on
translation of assets and
liabilities in foreign
currencies....................... (21,852,465) 20,055,808
Net change in unrealized
appreciation (depreciation) of
investments...................... (5,766,662) (203,028,268)
---------------- ----------------
Net increase (decrease) in net
assets resulting from
operations..................... 176,372,189 (88,944,543)
---------------- ----------------
Class A:
Distributions to shareholders: (Note
1)
From net investment income........ -- --
From net realized gain on
investments...................... (64,901,484) (78,594,102)
Class B:
Distributions to shareholders: (Note
1)
From net investment income........ -- --
From net realized gain on
investments...................... (54,643,650) (58,563,435)
Advisor Class:
Distributions to shareholders: (Note
1)
From net investment income........ -- --
From net realized gain on
investments...................... (33,321) --
---------------- ----------------
Total distributions............. (119,578,455) (137,157,537)
---------------- ----------------
Capital share transactions: (Note 4)
Increase from capital shares sold
and reinvested................... 3,156,330,159 1,799,851,047
Decrease from capital shares
repurchased...................... (3,466,020,319) (1,936,308,797)
---------------- ----------------
Net increase (decrease) from
capital share transactions..... (309,690,160) (136,457,750)
---------------- ----------------
Total increase (decrease) in net
assets............................. (252,896,426) (362,559,830)
Net assets:
Beginning of year................. 2,465,923,091 2,828,482,921
---------------- ----------------
End of year....................... $ 2,213,026,665* $ 2,465,923,091*
---------------- ----------------
---------------- ----------------
* Includes undistributed investment
income........................... $ 5,534 $ 0
---------------- ----------------
---------------- ----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F31
<PAGE>
GT GLOBAL THEME FUNDS
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>
<S> <C> <C> <C> <C>
CONSUMER PRODUCTS AND SERVICES FUND
-----------------------------------------------------------------
CLASS A CLASS B
------------------------------- -------------------------------
DECEMBER 30, 1994 DECEMBER 30, 1994
YEAR (COMMENCEMENT YEAR (COMMENCEMENT
ENDED OF OPERATIONS) ENDED OF OPERATIONS)
OCTOBER 31, TO OCTOBER 31, OCTOBER 31, TO OCTOBER 31,
1996+++ 1995+++ 1996+++ 1995+++
----------- ----------------- ----------- -----------------
Per Share Operating Performance:
Net asset value, beginning of
period............................ $ 14.59 $11.43 $ 14.53 $11.43
----------- -------- ----------- --------
Income from investment operations:
Net investment income (loss)..... (0.22) * 0.02* * (0.31) * (0.04) * *
Net realized and unrealized gain
on investments.................. 7.13 3.14 7.09 3.14
----------- -------- ----------- --------
Net increase from investment
operations.................... 6.91 3.16 6.78 3.10
----------- -------- ----------- --------
Distributions to shareholders:
From net realized gain on
investments..................... (0.52) -- (0.52) --
----------- -------- ----------- --------
Total distributions............ (0.52) -- (0.52) --
----------- -------- ----------- --------
Net asset value, end of period..... $ 20.98 $14.59 $ 20.79 $14.53
----------- -------- ----------- --------
----------- -------- ----------- --------
Total investment return (c)........ 48.82% 27.65% (b) 48.11% 27.12% (b)
Ratios and supplemental data:
Net assets, end of period (in
000's)............................ $76,900 $4,082 $87,904 $2,959
Ratio of net investment income to
average net assets:
With expense reductions and
reimbursement by Chancellor LGT
Asset Management, Inc. (Notes 1,
2 & 5).......................... (1.14)% 0.20% (a) (1.64)% (0.30)% (a)
Without expense reductions and
reimbursement by Chancellor LGT
Asset Management, Inc........... (1.24)% (11.11)% (a) (1.74)% (11.61)% (a)
Ratio of expenses to average net
assets:
With expense reductions and
reimbursement by Chancellor LGT
Asset Management, Inc. (Notes 1,
2 & 5).......................... 2.24% 2.32% (a) 2.74% 2.82% (a)
Without expense reductions and
reimbursement by Chancellor LGT
Asset Management, Inc........... 2.34% 13.63% (a) 2.84% 14.13% (a)
Portfolio turnover rate++.......... 169% 240% (a) 169% 240% (a)
Average commission rate per share
paid on portfolio
transactions++.................... $0.0545 N/A $0.0545 N/A
<CAPTION>
ADVISOR CLASS+
--------------------------
YEAR JUNE 1, 1995
ENDED TO
OCTOBER 31, OCTOBER 31,
1996+++ 1995+++
----------- ------------
Per Share Operating Performance:
Net asset value, beginning of
period............................ $ 14.64 $11.84
----------- ------------
Income from investment operations:
Net investment income (loss)..... (0.13) * 0.04* *
Net realized and unrealized gain
on investments.................. 7.16 2.76
----------- ------------
Net increase from investment
operations.................... 7.03 2.80
----------- ------------
Distributions to shareholders:
From net realized gain on
investments..................... (0.52) --
----------- ------------
Total distributions............ (0.52) --
----------- ------------
Net asset value, end of period..... $ 21.15 $14.64
----------- ------------
----------- ------------
Total investment return (c)........ 49.50% 23.65% (b)
Ratios and supplemental data:
Net assets, end of period (in
000's)............................ $ 7,446 $ 164
Ratio of net investment income to
average net assets:
With expense reductions and
reimbursement by Chancellor LGT
Asset Management, Inc. (Notes 1,
2 & 5).......................... (0.64)% 0.70% (a)
Without expense reductions and
reimbursement by Chancellor LGT
Asset Management, Inc........... (0.74)% (10.61)% (a)
Ratio of expenses to average net
assets:
With expense reductions and
reimbursement by Chancellor LGT
Asset Management, Inc. (Notes 1,
2 & 5).......................... 1.74% 1.82% (a)
Without expense reductions and
reimbursement by Chancellor LGT
Asset Management, Inc........... 1.84% 13.13% (a)
Portfolio turnover rate++.......... 169% 240% (a)
Average commission rate per share
paid on portfolio
transactions++.................... $0.0545 N/A
</TABLE>
- ----------------
(a) Annualized.
(b) Not annualized.
(c) Total investment return does not include sales charges.
* Before reimbursement by Chancellor LGT Asset Management, Inc, net
investment income per share would have been reduced by $0.05 for Class
A, Class B and Advisor Class.
* * Before reimbursement by Chancellor LGT Asset Management, Inc., net
investment income per share would have been reduced by $1.12, $1.04
and $0.61 for Class A, Class B and Advisor Class, respectively.
+ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++ Portfolio turnover rate and average commission rate are calculated on
the basis of the Portfolio as a whole without distinguishing between
the classes of shares issued.
+++ These selected per share operating data were calculated based upon
weighted average shares outstanding during the period.
N/A Not Applicable
The accompanying notes are an integral part of the financial statements.
F32
<PAGE>
GT GLOBAL THEME FUNDS
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>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL SERVICES FUND
------------------------------------------------------------------------------------
CLASS A CLASS B
------------------------------------------ ----------------------------------------
MAY 31, 1994 MAY 31, 1994
YEAR ENDED OCTOBER 31, (COMMENCEMENT YEAR ENDED OCTOBER 31, (COMMENCEMENT
OF OPERATIONS) OF OPERATIONS)
------------------------ TO OCTOBER 31, ------------------------ TO OCTOBER 31,
1996+++ 1995+++ 1994 1996+++ 1995+++ 1994
----------- ----------- ---------------- ----------- ----------- --------------
Per Share Operating Performance:
Net asset value, beginning of period.... $ 11.92 $ 11.62 $ 11.43 $ 11.83 $ 11.60 $ 11.43
----------- ----------- -------- ----------- ----------- --------------
Income from investment operations:
Net investment income (loss).......... 0.05* 0.17* * 0.02 * * (0.01) * 0.11* * 0.00* * *
Net realized and unrealized gain on
investments.......................... 2.36 0.13 0.17 2.34 0.12 0.17
----------- ----------- -------- ----------- ----------- --------------
Net increase from investment
operations......................... 2.41 0.30 0.19 2.33 0.23 0.17
----------- ----------- -------- ----------- ----------- --------------
Distributions to shareholders:
From net investment income............ (0.12) -- -- (0.09) -- --
From net realized gain on
investments.......................... (0.01) -- -- (0.01) -- --
----------- ----------- -------- ----------- ----------- --------------
Total distributions................. (0.13) -- -- (0.10) -- --
----------- ----------- -------- ----------- ----------- --------------
Net asset value, end of period.......... $ 14.20 $ 11.92 $ 11.62 $ 14.06 $ 11.83 $ 11.60
----------- ----------- -------- ----------- ----------- --------------
----------- ----------- -------- ----------- ----------- --------------
Total investment return (c)............. 20.21% 2.58% 1.66 % (b) 19.81% 1.98% 1.49 %(b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 7,302 $ 5,687 $ 3,175 $ 9,886 $ 4,548 $ 2,235
Ratio of net investment income (loss) to
average net assets:
With expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc. (Notes 1, 2, & 5)... 0.41% 1.46% 0.66 % (a) (0.09)% 0.96% 0.16 %(a)
Without expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc...................... (0.66)% (5.34)% (7.26)% (a) (1.16)% (5.84)% (7.76)%(a)
Ratio of expenses to average net assets:
With expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc. (Notes 1, 2, & 5)... 2.32% 2.34% 2.40 % (a) 2.82% 2.84% 2.90 %(a)
Without expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc...................... 3.39% 9.14% 10.32 % (a) 3.89% 9.64% 10.82 %(a)
Portfolio turnover rate++............... 103% 170% 53 % (a) 103% 170% 53 %(a)
Average commission rate per share paid
on portfolio transactions++............ $ 0.0080 N/A N/A $ 0.0080 N/A N/A
</TABLE>
- ----------------
(a) Annualized.
(b) Not annualized
(c) Total investment return does not include sales charges.
* Before reimbursement by Chancellor LGT Asset Management, Inc., the net
investment income per share would have been reduced by $0.13 for each
of the three classes.
* * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
investment income per share would have been reduced by $0.59, $0.59,
$0.30 for Class A, Class B, and Advisor Class, respectively.
* * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
investment income per share would have been reduced by $0.23 for Class
A and Class B.
+ 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 Portfolio as a whole without distinguishing between
the classes of shares issued.
+++ These selected per share data were calculated based upon weighted
average shares outstanding during the period.
N/A Not Applicable
The accompanying notes are an integral part of the financial statements.
F33
<PAGE>
GT GLOBAL THEME FUNDS
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>
<S> <C> <C>
FINANCIAL SERVICES FUND
--------------------------
ADVISOR CLASS+
--------------------------
YEAR JUNE 1, 1995
ENDED TO
OCTOBER 31, OCTOBER 31,
1996+++ 1995
----------- -------------
Per Share Operating Performance:
Net asset value, beginning of period.... $ 11.95 $ 11.09
----------- -------------
Income from investment operations:
Net investment income (loss).......... 0.12* 0.09* *
Net realized and unrealized gain on
investments.......................... 2.36 0.77
----------- -------------
Net increase from investment
operations......................... 2.48 0.86
----------- -------------
Distributions to shareholders:
From net investment income............ (0.16) --
From net realized gain on
investments.......................... (0.01) --
----------- -------------
Total distributions................. (0.17) --
----------- -------------
Net asset value, end of period.......... $ 14.26 $ 11.95
----------- -------------
----------- -------------
Total investment return (c)............. 20.87% 7.75%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 72 $ 31
Ratio of net investment income (loss) to
average net assets:
With expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc. (Notes 1, 2, & 5)... 0.91% 1.96%(a)
Without expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc...................... (0.16)% (4.84)%(a)
Ratio of expenses to average net assets:
With expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc. (Notes 1, 2, & 5)... 1.82% 1.84%(a)
Without expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc...................... 2.89% 8.64%(a)
Portfolio turnover rate++............... 103% 170%
Average commission rate per share paid
on portfolio transactions++............ $ 0.0080 N/A
</TABLE>
- ----------------
(a) Annualized.
(b) Not annualized
(c) Total investment return does not include sales charges.
* Before reimbursement by Chancellor LGT Asset Management, Inc., the net
investment income per share would have been reduced by $0.13 for each
of the three classes.
* * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
investment income per share would have been reduced by $0.59, $0.59,
$0.30 for Class A, Class B, and Advisor Class, respectively.
* * * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
investment income per share would have been reduced by $0.23 for Class
A and Class B.
+ 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 Portfolio as a whole without distinguishing between
the classes of shares issued.
+++ These selected per share data were calculated based upon weighted
average shares outstanding during the period.
N/A Not Applicable
The accompanying notes are an integral part of the financial statements.
F34
<PAGE>
GT GLOBAL THEME FUNDS
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>
<S> <C> <C> <C> <C> <C>
HEALTH CARE FUND
----------------------------------------------------------
CLASS A+
----------------------------------------------------------
YEAR ENDED OCTOBER 31,
----------------------------------------------------------
1996 (D) 1995 1994 (D) 1993 (D) 1992
---------- ---------- ---------- ---------- ----------
Per Share Operating Performance:
Net asset value, beginning of period.... $ 21.84 $ 19.60 $ 17.86 $ 17.44 $ 19.29
---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income (loss).......... (0.17) (0.15) (0.22) (0.15) (0.18)
Net realized and unrealized gain
(loss) on investments................ 4.79 3.73 2.02 0.57 (1.53)
---------- ---------- ---------- ---------- ----------
Net increase (decrease) from
investment operations.............. 4.62 3.58 1.80 0.42 (1.71)
---------- ---------- ---------- ---------- ----------
Distributions to shareholders:
From net investment income............ -- -- -- -- --
From net realized gain on
investments.......................... (2.86) (1.34) -- -- (0.14)
In excess of net realized gain on
investments.......................... -- -- (0.06) -- --
---------- ---------- ---------- ---------- ----------
Total distributions................. (2.86) (1.34) (0.06) -- (0.14)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period.......... $ 23.60 $ 21.84 $ 19.60 $ 17.86 $ 17.44
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Total investment return (c)............. 23.14% 19.79% 10.11% 2.4% (8.9)%
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 467,861 $ 426,380 $ 438,940 $ 461,113 $ 655,867
Ratio of net investment income (loss) to
average net assets..................... (0.71)% (0.72)% (1.23)% (0.9)% (0.97)%
Ratio of expenses to average net assets:
With expense reductions (Notes 1 &
5)................................... 1.80% 1.85% 1.98% 2.0% 2.05%
Without expense reductions............ 1.84% 1.91% --%* --%* --%*
Portfolio turnover rate++++............. 157% 99% 64% 61% 30%
Average commission rate per share paid
on portfolio transactions++++.......... $ 0.0548 N/A N/A N/A N/A
</TABLE>
- ----------------
(a) Annualized.
(b) Not annualized.
(c) Total investment return does include sales charge.
(d) These selected per share data were calculated based upon weighted
average shares outstanding during the period.
* Calculation of "Ratios of expenses to average net assets" was made
without considering the effect of expense reduction, if any.
+ All capital shares issued and outstanding as of March 31, 1993 were
reclassified as Class A shares.
++ Commencing April 1, 1993, 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 between the
classes of shares issued.
N/A Not Applicable
The accompanying notes are an integral part of the financial statements.
F35
<PAGE>
GT GLOBAL THEME FUNDS
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>
<S> <C> <C> <C> <C> <C> <C>
HEALTH CARE FUND
-----------------------------------------------------------------------------
CLASS B++ ADVISOR CLASS+++
------------------------------------------------- --------------------------
APRIL 1, 1993 YEAR JUNE 1, 1995
YEAR ENDED OCTOBER 31, TO ENDED TO
---------------------------------- OCTOBER 31, OCTOBER 31, OCTOBER 31,
1996 (D) 1995 (D) 1994 (D) 1993 (D) 1996 (D) 1995
---------- ---------- ---------- ------------- ----------- -------------
Per Share Operating Performance:
Net asset value, beginning of period.... $ 21.56 $ 19.46 $ 17.80 $ 15.59 $ 21.88 $ 18.66
---------- ---------- ---------- ------------- ----------- -------------
Income from investment operations:
Net investment income (loss).......... (0.27) (0.25) (0.32) (0.14) (0.05) (0.02)
Net realized and unrealized gain
(loss) on investments................ 4.72 3.69 2.02 2.35 4.80 3.24
---------- ---------- ---------- ------------- ----------- -------------
Net increase (decrease) from
investment operations.............. 4.45 3.44 1.70 2.21 4.75 3.22
---------- ---------- ---------- ------------- ----------- -------------
Distributions to shareholders:
From net investment income............ -- -- -- -- -- --
From net realized gain on
investments.......................... (2.86) (1.34) -- -- (2.86) --
In excess of net realized gain on
investments.......................... -- -- (0.04) -- -- --
---------- ---------- ---------- ------------- ----------- -------------
Total distributions................. (2.86) (1.34) (0.04) -- (2.86) --
---------- ---------- ---------- ------------- ----------- -------------
Net asset value, end of period.......... $ 23.15 $ 21.56 $ 19.46 $ 17.80 $ 23.77 $ 21.88
---------- ---------- ---------- ------------- ----------- -------------
---------- ---------- ---------- ------------- ----------- -------------
Total investment return (c)............. 22.59% 19.17% 9.55% 14.2%(a) 23.82% 17.10%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 107,622 $ 70,740 $ 39,100 $ 8,604 $ 1,152 $ 539
Ratio of net investment income (loss) to
average net assets..................... (1.21)% (1.22)% (1.73)% (1.4)%(b) (0.21)% (0.22)%(a)
Ratio of expenses to average net assets:
With expense reductions (Notes 1 &
5)................................... 2.30% 2.35% 2.48% 2.5%(b) 1.30% 1.35%(a)
Without expense reductions............ 2.34% 2.41% --%* --%* 1.34% 1.41%(a)
Portfolio turnover rate++++............. 157% 99% 64% 61% 157% 99%
Average commission rate per share paid
on portfolio transactions++++.......... $ 0.0548 N/A N/A N/A $ 0.0548 N/A
</TABLE>
- ----------------
(a) Annualized.
(b) Not annualized.
(c) Total investment return does include sales charge.
(d) These selected per share data were calculated based upon weighted
average shares outstanding during the period.
* Calculation of "Ratios of expenses to average net assets" was made
without considering the effect of expense reduction, if any.
+ All capital shares issued and outstanding as of March 31, 1993 were
reclassified as Class A shares.
++ Commencing April 1, 1993, 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 between the
classes of shares issued.
N/A Not Applicable
The accompanying notes are an integral part of the financial statements.
F36
<PAGE>
GT GLOBAL THEME FUNDS
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>
<S> <C> <C> <C> <C> <C> <C>
INFRASTRUCTURE FUND
--------------------------------------------------------------------------------------
CLASS A CLASS B
------------------------------------------ ------------------------------------------
YEAR ENDED OCTOBER 31, MAY 31, 1994 YEAR ENDED OCTOBER 31, MAY 31, 1994
(COMMENCEMENT OF (COMMENCEMENT OF
----------------------- OPERATIONS) TO ----------------------- OPERATIONS) TO
1996+++ 1995 OCTOBER 31, 1994 1996+++ 1995 OCTOBER 31, 1994
----------- ---------- ----------------- ----------- ---------- -----------------
Per Share Operating Performance:
Net asset value, beginning of period.... $ 12.11 $ 12.47 $ 11.43 $ 12.03 $ 12.45 $ 11.43
----------- ---------- ----------------- ----------- ---------- -----------------
Income from investment operations:
Net investment income (loss).......... (0.03) (0.03) * 0.01* * (0.09) (0.09) * (0.01) * *
Net realized and unrealized gain
(loss) on investments................ 2.34 (0.33) 1.03 2.30 (0.33) 1.03
----------- ---------- ----------------- ----------- ---------- -----------------
Net increase (decrease) from
investment operations.............. 2.31 (0.36) 1.04 2.21 (0.42) 1.02
----------- ---------- ----------------- ----------- ---------- -----------------
Net asset value, end of period.......... $ 14.42 $ 12.11 $ 12.47 $ 14.24 $ 12.03 $ 12.45
----------- ---------- ----------------- ----------- ---------- -----------------
----------- ---------- ----------------- ----------- ---------- -----------------
Total investment return (c)............. 19.08% (2.89)% 9.10% (b) 18.37% (3.37)% 8.92% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 38,397 $ 36,241 $ 23,615 $ 53,678 $ 50,181 $ 30,954
Ratio of net investment income (loss) to
average net assets:
With expense reductions and
reimbursement by Chancellor LGT Asset
Management Inc. (Notes 1 & 5)........ (0.19)% (0.32)% 0.41% (a) (0.69)% (0.82)% (0.09)% (a)
Without expense reductions and
reimbursement by Chancellor LGT Asset
Management Inc....................... (0.30)% (0.58)% (0.47)% (a) (0.80)% (1.08)% (0.97)% (a)
Ratio of expenses to average net assets:
With expense reductions and
reimbursement by Chancellor LGT Asset
Management Inc. (Notes 1 & 5)........ 2.14% 2.36% 2.40% (a) 2.64% 2.86% 2.90% (a)
Without expense reductions and
reimbursement by Chancellor LGT Asset
Management Inc....................... 2.25% 2.62% 3.28% (a) 2.75% 3.12% 3.78% (a)
Portfolio turnover rate++............... 41% 45% 18% 41% 45% 18%
Average commission rate per share paid
on portfolio transactions++............ $ 0.0109 N/A N/A $ 0.0109 N/A N/A
</TABLE>
- ----------------
(a) Annualized.
(b) Not Annualized
(c) Total investment return does not include sales charges.
* Before reimbursement by Chancellor LGT Asset Management Inc., the net
investment income per share would have been reduced by $0.03 for Class
A shares, $0.03 for Class B shares, and $0.02 for Advisor Class shares
for the period ended October 31, 1995.
* * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
investment income per share would have been reduced by $0.02 for Class
A and Class B shares from May 31, 1994 to October 31, 1994.
+ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++ Portfolio turnover and average commission rates calculated on the
basis of the Portfolio as a whole without distinguishing between the
classes of shares issued.
+++ These selected per share operating data were calculated based upon
average shares outstanding during the period.
N/A Not Applicable
The accompanying notes are an integral part of the financial statements.
F37
<PAGE>
GT GLOBAL THEME FUNDS
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>
<S> <C> <C>
INFRASTRUCTURE FUND
--------------------------
ADVISOR CLASS+
--------------------------
YEAR JUNE 1, 1995
ENDED TO
OCTOBER 31, OCTOBER 31,
1996+++ 1995
----------- -------------
Per Share Operating Performance:
Net asset value, beginning of period.... $ 12.14 $ 12.00
----------- -------------
Income from investment operations:
Net investment income (loss).......... 0.04 0.02*
Net realized and unrealized gain
(loss) on investments................ 2.34 0.12
----------- -------------
Net increase (decrease) from
investment operations.............. 2.38 0.14
----------- -------------
Net asset value, end of period.......... $ 14.52 $ 12.14
----------- -------------
----------- -------------
Total investment return (c)............. 19.60% 1.17%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 344 $ 216
Ratio of net investment income (loss) to
average net assets:
With expense reductions and
reimbursement by Chancellor LGT Asset
Management Inc. (Notes 1 & 5)........ 0.31% 0.18%(a)
Without expense reductions and
reimbursement by Chancellor LGT Asset
Management Inc....................... 0.20% (0.08)%(a)
Ratio of expenses to average net assets:
With expense reductions and
reimbursement by Chancellor LGT Asset
Management Inc. (Notes 1 & 5)........ 1.64% 1.86%(a)
Without expense reductions and
reimbursement by Chancellor LGT Asset
Management Inc....................... 1.75% 2.12%(a)
Portfolio turnover rate++............... 41% 45%
Average commission rate per share paid
on portfolio transactions++............ $ 0.0109 N/A
</TABLE>
- ----------------
(a) Annualized.
(b) Not Annualized
(c) Total investment return does not include sales charges.
* Before reimbursement by Chancellor LGT Asset Management Inc., the net
investment income per share would have been reduced by $0.03 for Class
A shares, $0.03 for Class B shares, and $0.02 for Advisor Class shares
for the period ended October 31, 1995.
* * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
investment income per share would have been reduced by $0.02 for Class
A and Class B shares from May 31, 1994 to October 31, 1994.
+ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++ Portfolio turnover and average commission rates calculated on the
basis of the Portfolio as a whole without distinguishing between the
classes of shares issued.
+++ These selected per share operating data were calculated based upon
average shares outstanding during the period.
N/A Not Applicable
The accompanying notes are an integral part of the financial statements.
F38
<PAGE>
GT GLOBAL THEME FUNDS
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>
<S> <C> <C> <C> <C> <C> <C>
NATURAL RESOURCES FUND
----------------------------------------------------------------------------------
CLASS A CLASS B
---------------------------------------- ----------------------------------------
MAY 31, 1994 MAY 31, 1994
YEAR ENDED OCTOBER 31, (COMMENCEMENT YEAR ENDED OCTOBER 31, (COMMENCEMENT
OF OPERATIONS) OF OPERATIONS)
----------------------- TO OCTOBER 31, ----------------------- TO OCTOBER 31,
1996+++ 1995 1994 1996+++ 1995 1994
----------- ---------- --------------- ----------- ---------- ---------------
Per Share Operating Performance:
Net asset value, beginning of period.... $ 11.44 $ 12.41 $ 11.43 $ 11.36 $ 12.38 $ 11.43
----------- ---------- --------------- ----------- ---------- ---------------
Income from investment operations:
Net investment income (loss).......... (0.24) 0.04* 0.06* * (0.31) (0.02) * 0.03* *
Net realized and unrealized gain
(loss) on investments................ 6.28 (0.98) 0.92 6.25 (0.98) 0.92
----------- ---------- --------------- ----------- ---------- ---------------
Net increase (decrease) from
investment operations.............. 6.04 (0.94) 0.98 5.94 (1.00) 0.95
----------- ---------- --------------- ----------- ---------- ---------------
Distributions to shareholders:
From net investment income............ (0.04) (0.03) -- -- (0.02) --
From net realized gain on
investments.......................... (0.01) -- -- (0.01) -- --
----------- ---------- --------------- ----------- ---------- ---------------
Total distributions................. (0.05) (0.03) -- (0.01) (0.02) --
----------- ---------- --------------- ----------- ---------- ---------------
Net asset value, end of period.......... $ 17.43 $ 11.44 $ 12.41 $ 17.29 $ 11.36 $ 12.38
----------- ---------- --------------- ----------- ---------- ---------------
----------- ---------- --------------- ----------- ---------- ---------------
Total investment return (c)............. 53.04% (7.58)% 8.57% (b) 52.39% (8.05)% 8.31% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 48,729 $ 12,598 $ 14,797 $ 57,749 $ 13,978 $ 13,404
Ratio of net investment income (loss) to
average net assets:
With expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc. (Notes 2 & 5)....... (1.55)% 0.41% 2.63% (a) (2.05)% (0.09)% 2.13% (a)
Without expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc...................... (1.65)% (0.69)% 0.65% (a) (2.15)% (1.19)% 0.15% (a)
Ratio of expenses to average net assets:
With expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc. (Notes 2 & 5)....... 2.20% 2.37% 2.40% (a) 2.70% 2.87% 2.90% (a)
Without expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc...................... 2.30% 3.47% 4.38% (a) 2.80% 3.97% 4.88% (a)
Portfolio turnover rate++............... 94% 87% 137% 94% 87% 137%
Average commission rate per share paid
on portfolio transactions++............ $ 0.0243 N/A N/A $ 0.0243 N/A N/A
</TABLE>
- ----------------
(a) Annualized
(b) Not annualized
(c) Total investment return does not include sales charges.
* Before reimbursement by Chancellor LGT Asset Management, Inc., the net
investment income (loss) per share would have been reduced (increased)
by $0.14, $0.13, and $0.12 for Class A, Class B, and Advisor Class,
respectively.
* * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
investment income per share would have been reduced by $0.04 for Class
A and Class B.
+ 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 Portfolio as a whole without distinguishing between
the classes of shares issued.
+++ These selected per share operating data were calculated based upon
average shares outstanding during the period.
N/A Not Applicable
The accompanying notes are an integral part of the financial statements.
F39
<PAGE>
GT GLOBAL THEME FUNDS
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>
<S> <C> <C>
NATURAL RESOURCES FUND
--------------------------
ADVISOR CLASS+
--------------------------
YEAR JUNE 1, 1995
ENDED TO
OCTOBER 31, OCTOBER 31,
1996+++ 1995
----------- -------------
Per Share Operating Performance:
Net asset value, beginning of period.... $ 11.47 $ 11.45
----------- -------------
Income from investment operations:
Net investment income (loss).......... (0.17) 0.11*
Net realized and unrealized gain
(loss) on investments................ 6.28 (0.09)
----------- -------------
Net increase (decrease) from
investment operations.............. 6.11 0.02
----------- -------------
Distributions to shareholders:
From net investment income............ (0.10) --
From net realized gain on
investments.......................... (0.01) --
----------- -------------
Total distributions................. (0.11) --
----------- -------------
Net asset value, end of period.......... $ 17.47 $ 11.47
----------- -------------
----------- -------------
Total investment return (c)............. 53.76% 0.17%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 5,502 $ 95
Ratio of net investment income (loss) to
average net assets:
With expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc. (Notes 2 & 5)....... (1.05)% 0.91%(a)
Without expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc...................... (1.15)% (0.19)%(a)
Ratio of expenses to average net assets:
With expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc. (Notes 2 & 5)....... 1.70% 1.87%(a)
Without expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc...................... 1.80% 2.97%(a)
Portfolio turnover rate++............... 94% 87%
Average commission rate per share paid
on portfolio transactions++............ $ 0.0243 N/A
</TABLE>
- ----------------
(a) Annualized
(b) Not annualized
(c) Total investment return does not include sales charges.
* Before reimbursement by Chancellor LGT Asset Management, Inc., the net
investment income (loss) per share would have been reduced (increased)
by $0.14, $0.13, and $0.12 for Class A, Class B, and Advisor Class,
respectively.
* * Before reimbursement by Chancellor LGT Asset Management, Inc., the net
investment income per share would have been reduced by $0.04 for Class
A and Class B.
+ 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 Portfolio as a whole without distinguishing between
the classes of shares issued.
+++ These selected per share operating data were calculated based upon
average shares outstanding during the period.
N/A Not Applicable
The accompanying notes are an integral part of the financial statements.
F40
<PAGE>
GT GLOBAL THEME FUNDS
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>
TELECOMMUNICATIONS FUND
--------------------------------------------------------------
CLASS A+
--------------------------------------------------------------
JANUARY 27,
1992
(COMMENCEMENT
YEAR ENDED OCTOBER 31, OF OPERATIONS)
---------------------------------------------- TO OCTOBER 31,
1996 (D) 1995 1994 (D) 1993 1992
---------- ---------- ---------- ---------- --------------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 16.42 $ 17.80 $ 16.92 $ 11.16 $ 11.43
---------- ---------- ---------- ---------- --------------
Income from investment operations:
Net investment income (loss).......... (0.13) (0.09) (0.01) 0.08 0.14*
Net realized and unrealized gain
(loss) on investments................ 1.22 (0.43) 1.17 5.83 (0.41)
---------- ---------- ---------- ---------- --------------
Net increase (decrease) from
investment operations.............. 1.09 (0.52) 1.16 5.91 (0.27)
---------- ---------- ---------- ---------- --------------
Distributions to shareholders:
From net investment income............ -- -- (0.01) (0.15) --
From net realized gain on
investments.......................... (0.82) (0.86) (0.27) -- --
---------- ---------- ---------- ---------- --------------
Total distributions................. (0.82) (0.86) (0.28) (0.15) --
---------- ---------- ---------- ---------- --------------
Net asset value, end of period.......... $ 16.69 $ 16.42 $ 17.80 $ 16.92 $ 11.16
---------- ---------- ---------- ---------- --------------
---------- ---------- ---------- ---------- --------------
Total investment return (c)............. 7.00% (2.88)% 7.02% 53.6% (2.4)%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $1,204,428 $1,353,722 $1,644,402 $1,223,340 $ 442,862
Ratio of net investment income (loss) to
average net assets..................... (0.84)% (0.49)% (0.02)% 0.8% 2.1 %(a)
Ratio of expenses to average net assets:
With expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc. (Notes 1 & 7)....... 1.74% 1.77% 1.80% 2.0% 2.3 %(a)
Without expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc...................... 1.79% 1.83% --%** --%** -- %**
Portfolio turnover rate++++............. 37% 62% 57% 41% 4 %(a)
Average commission rate per share paid
on portfolio transactions++++.......... $ 0.0165 N/A N/A N/A N/A
</TABLE>
- ----------------
+ All capital shares issued and outstanding March 31, 1993 were
reclassified as Class A shares.
++ Commencing April 1, 1993, the Fund began offering Class B shares.
+++ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover and average commission rates are calculated on the
basis of the Fund as whole without distinguishing between the classes
of shares issued.
* Includes reimbursements by Chancellor LGT Asset Management, Inc. of
Fund operating expenses of less than $0.01. Without such
reimbursement, the annualized expense ratio would have been 2.30% and
the annualized ratio of net investment income to average net assets
would have been 2.04% (See Note 2).
** Calculation of "Ratio of expenses to average net assets" was made
without considering the effect of expense reductions, if any.
(a) Annualized
(b) Not Annualized
(c) Total investment return does not include sales charge.
(d) These per share operating performance data were calculated based upon
the weighted average shares outstanding during the year.
The accompanying notes are an integral part of the financial statements.
F41
<PAGE>
GT GLOBAL THEME FUNDS
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>
TELECOMMUNICATIONS FUND
---------------------------------------------------------------------------
CLASS B++
----------------------------------------------- ADVISOR CLASS+++
APRIL 1, --------------------------
1993 YEAR JUNE 1, 1995
YEAR ENDED OCTOBER 31, TO ENDED TO
---------------------------------- OCTOBER 31, OCTOBER 31, OCTOBER 31,
1996 (D) 1995 1994 (D) 1993 1996 (D) 1995
---------- ---------- ---------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 16.20 $ 17.66 $ 16.87 $ 12.68 $ 16.46 $ 15.24
---------- ---------- ---------- ----------- ----------- -------------
Income from investment operations:
Net investment income (loss).......... (0.23) (0.17) (0.10) 0.01 (0.05) --
Net realized and unrealized gain
(loss) on investments................ 1.22 (0.43) 1.17 4.18 1.22 1.22
---------- ---------- ---------- ----------- ----------- -------------
Net increase (decrease) from
investment operations.............. 0.99 (0.60) 1.07 4.19 1.17 1.22
---------- ---------- ---------- ----------- ----------- -------------
Distributions to shareholders:
From net investment income............ -- -- (0.01) -- -- --
From net realized gain on
investments.......................... (0.82) (0.86) (0.27) -- (0.82) --
---------- ---------- ---------- ----------- ----------- -------------
Total distributions................. (0.82) (0.86) (0.28) -- (0.82) --
---------- ---------- ---------- ----------- ----------- -------------
Net asset value, end of period.......... $ 16.37 $ 16.20 $ 17.66 $ 16.87 $ 16.81 $ 16.46
---------- ---------- ---------- ----------- ----------- -------------
---------- ---------- ---------- ----------- ----------- -------------
Total investment return (c)............. 6.46% (3.37)% 6.50% 33.0%(b) 7.49% 7.94%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $1,007,654 $1,111,520 $1,184,081 $ 455,335 $ 945 $ 681
Ratio of net investment income (loss) to
average net assets..................... (1.34)% (0.99)% (0.52)% 0.3%(a) (0.34)% 0.01%(a)
Ratio of expenses to average net assets:
With expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc. (Notes 1 & 7)....... 2.24% 2.27% 2.30% 2.5%(a) 1.24% 1.27%(a)
Without expense reductions and
reimbursement by Chancellor LGT Asset
Management, Inc...................... 2.29% 2.33% --%** --%** 1.29% 1.33%(a)
Portfolio turnover rate++++............. 37% 62% 57% 41% 37% 62%
Average commission rate per share paid
on portfolio transactions++++.......... $ 0.0165 N/A N/A N/A $ 0.0165 N/A
</TABLE>
- ----------------
+ All capital shares issued and outstanding March 31, 1993 were
reclassified as Class A shares.
++ Commencing April 1, 1993, the Fund began offering Class B shares.
+++ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover and average commission rates are calculated on the
basis of the Fund as whole without distinguishing between the classes
of shares issued.
* Includes reimbursements by Chancellor LGT Asset Management, Inc. of
Fund operating expenses of less than $0.01. Without such
reimbursement, the annualized expense ratio would have been 2.30% and
the annualized ratio of net investment income to average net assets
would have been 2.04% (See Note 2).
** Calculation of "Ratio of expenses to average net assets" was made
without considering the effect of expense reductions, if any.
(a) Annualized
(b) Not Annualized
(c) Total investment return does not include sales charge.
(d) These per share operating performance data were calculated based upon
the weighted average shares outstanding during the year.
The accompanying notes are an integral part of the financial statements.
F42
<PAGE>
GT GLOBAL THEME FUNDS
NOTES TO
FINANCIAL STATEMENTS
October 31, 1996
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
GT Global Consumer Products and Services Fund, GT Global Financial Services
Fund, GT Global Health Care Fund, GT Global Infrastructure Fund, GT Global
Natural Resources Fund, and GT Global Telecommunications Fund ("Funds") are
separate series of G.T. Investment Funds, Inc. ("Company"). Collectively, these
Funds are known as the "GT Global Theme Funds." The Company is organized as a
Maryland corporation and is registered under the Investment Company Act of 1940,
as amended ("1940 Act"), as an open-end management investment company. The
Company has a total of twelve series of shares in operation, each series
corresponding to a distinct portfolio of investments.
The GT Global Consumer Products and Services Fund, GT Global Financial Services
Fund, GT Global Infrastructure Fund, and GT Global Natural Resources Fund each
invests substantially all of its investable assets in Global Consumer Products
and Services Portfolio, Global Financial Services Portfolio, Global
Infrastructure Portfolio, and Global Natural Resources Portfolio ("Portfolios"),
respectively. Each of these Portfolios is organized as a New York Trust and is
registered under the 1940 Act as a diversified, open-end management investment
company.
The Portfolios have investment objectives, policies, and limitations
substantially identical to those of their corresponding Funds. Therefore, the
financial statements of the aforementioned Funds and their respective Portfolios
have been presented on a consolidated basis, and represent all activities of
both the respective Funds and Portfolios. Through October 31, 1996, all of the
shares of beneficial interest of each Portfolio were owned by either its
respective fund or Chancellor LGT Asset Management, Inc. (the "Manager"), which
has a nominal ($100) investment in each Portfolio.
The Funds offer 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 each 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 Funds and Portfolios 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 Funds calculate the net asset value of and complete 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 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 fluctuation, if any.
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Company's Board of Directors or the Portfolio's Board of Trustees.
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Company's Board of Directors or
the Portfolio's Board of Trustees.
(B) FOREIGN CURRENCY TRANSLATION
The accounting records of each Fund and Portfolio are maintained in U.S.
dollars. The market values of foreign securities, currency holdings, and other
assets and liabilities are recorded in the books and records of the Funds or
Portfolios (the phrase "Fund or Portfolio" hereinafter includes the GT Global
Health Care Fund, the GT Global Telecommunications Fund, and each of the four
Portfolios) 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.
A Fund or Portfolio does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss from
investments.
F43
<PAGE>
GT GLOBAL THEME FUNDS
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 a
Fund's or Portfolio's books and the U.S. dollar equivalent of the amounts
actually received or paid. Net unrealized foreign exchange gains or losses arise
from changes in the value of assets and liabilities other than investments in
securities at year end, resulting from changes in exchange rates.
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by a Fund or Portfolio, it is
the Fund's or Portfolio's policy to always receive, as collateral, United States
government securities or other high quality debt securities of which the value,
including accrued interest, is at least equal to the amount to be repaid to the
Fund or Portfolio under each agreement at its maturity.
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy 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 a Fund or Portfolio as an unrealized gain or loss.
When the Forward Contract is closed, the Fund or Portfolio records a realized
gain or loss equal to the difference between the value at the time it was opened
and the value at the time it was closed. Forward Contracts involve market risk
in excess of the amount shown in the Fund's or Portfolio's "Statement of Assets
and Liabilities". A Fund or Portfolio could be exposed to risk if a counterparty
is unable to meet the terms of the contract or if the value of the currency
changes unfavorably. A Fund or Portfolio may enter into Forward Contracts in
connection with planned purchases or sales of securities, or to hedge against
adverse fluctuations in exchange rates between currencies.
(E) OPTION ACCOUNTING PRINCIPLES
When a Fund or Portfolio writes a call or put option, an amount equal to the
premium received is included in the Fund's or Portfolio's "Statement of Assets
and Liabilities" as an asset and an equivalent liability. The amount of the
liability is subsequently marked-to-market to reflect the current market value
of the option. The current market value of an option listed on a traded exchange
is valued at its last bid price, or, in the case of an over-the-counter option,
is valued at the average of the last bid prices obtained from brokers, unless a
quotation from only one broker is available, in which case only that broker's
price will be used. If an option expires on its stipulated expiration date or if
the Fund or Portfolio enters into a closing purchase transaction, a gain or loss
is realized without regard to any unrealized gain or loss on the underlying
security and the liability related to such option is extinguished. If a written
call option is exercised, a gain or loss is realized from the sale of the
underlying security and the proceeds of the sale are increased by the premium
originally received. If a written put option is exercised, the cost of the
underlying security purchased would be decreased by the premium originally
received. The Fund or Portfolio can write options only on a covered basis,
which, for a call, requires that the Fund or Portfolio hold the underlying
security and, for a put, requires the Fund or Portfolio to set aside cash, U.S.
government securities or other liquid 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 or Portfolio may use options to manage its
exposure to the stock market and to fluctuations in currency values or interest
rates.
The premium paid by the Fund or Portfolio for the purchase of a call or put
option is included in the Fund's or Portfolio's "Statement of Assets and
Liabilities" as an investment and subsequently "marked-to-market" to reflect the
current market value of the option. If an option which the Fund or Portfolio has
purchased expires on the stipulated expiration date, the Fund or Portfolio
realizes a loss in the amount of the cost of the option. If the Fund or
Portfolio enters into a closing sale transaction, the Fund or Portfolio realizes
a gain or loss, depending on whether proceeds from the closing sale transaction
are greater or less than the cost of the option. If the Fund or Portfolio
exercises a call option, the cost of the securities acquired by exercising the
call is increased by the premium paid to buy the call. If the Fund or Portfolio
exercises a put option, it realizes a gain or loss from the sale of the
underlying security, and the proceeds from such sale are decreased by the
premium originally paid.
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Fund or Portfolio may forego
the opportunity of profit if the market value of the underlying security or
index increases and the option is exercised. The risk in writing a put option is
that the Fund or Portfolio may incur a loss if the market value of the
underlying security or index decreases and the option is exercised. In addition,
there is the risk the Fund or Portfolio may not be able to enter into a closing
transaction because of an illiquid secondary market.
(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract a
Fund or Portfolio is required to pledge to the broker an amount of cash or
securities equal to the minimum "initial margin" requirements of the exchange of
which the contract is traded. Pursuant to the contract, the Fund or Portfolio
agrees to receive from or pay to the broker an amount of cash equal to the daily
fluctuation in value of the contract. Such receipts or payments are known as
"variation margin" and are recorded by the Fund or Portfolio as unrealized gains
or losses. When the contract is closed, the Fund or Portfolio records a realized
gain or loss equal to the difference between the value of the contract at the
time it was opened and the value at the time it was closed. The potential risk
to the Fund or Portfolio is that the change in value of the underlying
securities may not correlate to the change in value of the contracts. A Fund or
F44
<PAGE>
GT GLOBAL THEME FUNDS
Portfolio may use futures contracts to manage its exposure to the stock market
and to fluctuations in currency values or interest rates.
(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out basis, unless otherwise specified. Dividends are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Where a high
level of uncertainty exists as to its collection, income is recorded net of all
withholding tax with any rebate recorded when received. A Fund or Portfolio may
trade securities on other than normal settlement terms. This may increase the
risk if the other party to the transaction fails to deliver and causes the Fund
or Portfolio to subsequently invest at less advantageous prices.
(H) PORTFOLIO SECURITIES LOANED
At October 31, 1996, stocks with an aggregate value listed below were on loan to
brokers. The loans were secured by cash collateral received by the Funds or
Portfolios:
<TABLE>
<CAPTION>
OCTOBER 31, 1996
--------------------------------------
AGGREGATE VALUE ON
LOAN CASH COLLATERAL
------------------- -----------------
<S> <C> <C>
Global Consumer Products and Services Portfolio................................. $ 10,331,341 $ 10,659,295
Global Financial Services Portfolio............................................. 750,391 805,810
GT Global Health Care Fund...................................................... 20,556,418 21,329,702
Global Infrastructure Portfolio................................................. 6,788,616 7,455,555
Global Natural Resources Portfolio.............................................. 3,663,443 3,777,600
GT Global Telecommunications Fund............................................... 214,505,953 222,733,129
<CAPTION>
YEAR ENDED
OCTOBER 31, 1996
--------------------
FEES RECEIVED
--------------------
<S> <C>
Global Consumer Products and Services Portfolio................................. $ 44,553
Global Financial Services Portfolio............................................. 1,304
GT Global Health Care Fund...................................................... 86,339
Global Infrastructure Portfolio................................................. 88,349
Global Natural Resources Portfolio.............................................. 16,439
GT Global Telecommunications Fund............................................... 944,549
</TABLE>
For international securities, cash collateral is received by a Fund or Portfolio
against loaned securities in an amount at least equal to 105% of the market
value of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 103% of the market value of the loaned
securities during the period of the loan. For domestic securities, cash
collateral is received by a Fund or Portfolio against loaned securities in an
amount at least equal to 102% of the market value of the loaned securities at
the inception of each loan. This collateral must be maintained at not less than
100% of the market value of the loaned securities during the period of the loan.
Fees received from securities loaned were used to reduce the Funds' or
Portfolios' custodian fees.
(I) TAXES
It is the intended policy of the Funds and Portfolios 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 Funds 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.
(J) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by each 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 Funds or Portfolios and timing
differences.
(K) DEFERRED ORGANIZATIONAL EXPENSES
Expenses incurred by the GT Global Consumer Products and Services Fund, GT
Global Financial Services Fund, GT Global Infrastructure Fund, GT Global Natural
Resources Fund, and GT Global Telecommunications Fund in connection with their
organizations, their initial registration with the Securities and Exchange
Commission and with various states and the initial public offering of its shares
aggregated $51,500, $63,100, $51,500, $51,500 and $88,750, respectively. These
expenses are being 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 or Portfolio's investments in
emerging market countries may involve greater risks than investments in more
developed markets and the price of such investments may be volatile. These risks
of investing in foreign and emerging markets may include foreign currency
exchange rate fluctuations, perceived credit risk, adverse political and
economic developments and possible adverse foreign government intervention.
In addition, each Fund or Portfolio may focus its investments in certain related
consumer products and services, financial services, health care, infrastructure,
natural resources, or telecommunications industries, subjecting the Fund or
Portfolio to greater risk than a fund that is more diversified.
(M) INDEXED SECURITIES
A Fund or Portfolio may invest in indexed securities whose value is linked
either directly or indirectly to changes in foreign currencies, interest rates,
equities, indices, or other reference instruments. Indexed securities may be
more volatile than the reference instrument itself, but any loss is limited to
the amount of the original investment.
F45
<PAGE>
GT GLOBAL THEME FUNDS
(N) RESTRICTED SECURITIES
A Fund or Portfolio is permitted to invest in privately placed restricted
securities. These securities may be resold in transactions exempt from
registration or to the public if the securities are registered. Disposal of
these securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period,
restricted securities (excluding 144A issues) are shown at the end of the Fund's
or Portfolio's Portfolio of Investments.
2. RELATED PARTIES
Chancellor LGT Asset Management, Inc., is the Funds' and Portfolios' 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. GT Global Consumer Products and
Services Fund, GT Global Financial Services Fund, GT Global Infrastructure Fund,
and GT Global Natural Resources Fund each pays the Manager administration fees
at the annualized rate of 0.25% of such Fund's average daily net assets. Each of
the Portfolios pays investment management and administration fees to the Manager
at the annualized rate of 0.725% on the first $500 million of the average daily
net assets of the Portfolio; 0.70% on the next $500 million; 0.675% on the next
$500 million; and 0.65% on amounts thereafter. GT Global Health Care Fund and GT
Global Telecommunications Fund each 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 a 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 Funds'
distributor. The Funds offer 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 Funds' 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 the
following sales charges: $115,133 for the GT Global Consumer Products and
Services Fund, $4,721 for the GT Global Financial Services Fund, $90,926 for the
GT Global Health Care Fund, $19,811 for the GT Global Infrastructure Fund,
$49,532 for the GT Global Natural Resources Fund, and $231,226 for the GT Global
Telecommunications Fund. Purchases of Class A shares exceeding $500,000 may be
subject to a contingent deferred sales charge ("CDSC") upon redemption, in
accordance with the Funds' current prospectus. GT Global collected CDSCs for the
year ended October 31, 1996, as follows: $0 for the GT Global Consumer Products
and Services Fund, $1,470 for the GT Global Financial Services Fund, $5,017 for
the GT Global Health Care Fund, $4,529 for the GT Global Infrastructure Fund,
$3,537 for the GT Global Natural Resources Fund, and $18,969 for the GT Global
Telecommunications Fund. 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 Funds' current
prospectus. For the year ended October 31, 1996, GT Global collected CDSCs in
the amount of: $45,035 for the GT Global Consumer Products and Services Fund,
$23,553 for the GT Global Financial Services Fund, $286,785 for the GT Global
Health Care Fund, $239,035 for the GT Global Infrastructure Fund, $90,557 for
the GT Global Natural Resources Fund, and $5,617,501 for the GT Global
Telecommunications Fund. 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 Funds' Class A shares
("Class A Plan") and Class B shares ("Class B Plan"), pursuant to which a Fund
reimburses GT Global for a portion of its shareholder servicing and distribution
expenses. Under the Class A Plan, a 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 0.50% of the average daily net assets of the Fund's
Class A shares, less any amounts paid by the Fund as the aforementioned service
fee, for 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, a 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.
The Manager and GT Global voluntarily have undertaken to limit each Fund's
expenses (exclusive of brokerage commissions, taxes, interest, and extraordinary
expense) to the maximum annual rate of 2.40%, 2.90%, and 1.90% of the average
daily net assets of the Fund's Class A, Class B, and Advisor Class shares,
respectively. If necessary, this limitation will be effected by waivers by the
Manager of
F46
<PAGE>
GT GLOBAL THEME FUNDS
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 Funds. 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 Funds. The monthly fee
for these services to the Manager is a percentage, not to exceed 0.03% annually,
of a Fund or Portfolio'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 each 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.
Each Portfolio pays each of its Trustees who is not an employee, officer or
director of the Manager, GT Global or GT Services $500 per year plus $150 for
each meeting of the board or any committee thereof attended by the Trustees.
At October 31, 1996, all of the shares of beneficial interest of each Portfolio
were owned either by its Fund or the Manager.
3. PURCHASES AND SALES OF SECURITIES
The following summarizes purchases and sales of investment securities, other
than short-term investments, by each Fund or Portfolio for the year ended
October 31, 1996:
PURCHASES AND SALES OF SECURITIES
<TABLE>
<CAPTION>
PURCHASES
------------------------------
U.S. GOVERNMENT OTHER ISSUES
--------------- ------------
<S> <C> <C>
Global Consumer Products and Services Portfolio................................. $ -- $239,257,063
Global Financial Services Portfolio............................................. -- 17,579,805
GT Global Health Care Fund...................................................... -- 839,344,279
Global Infrastructure Portfolio................................................. -- 34,122,375
Global Natural Resources Portfolio.............................................. -- 161,696,208
GT Global Telecommunications Fund............................................... -- 891,464,656
</TABLE>
<TABLE>
<CAPTION>
SALES
--------------------------------
U.S. GOVERNMENT OTHER ISSUES
--------------- --------------
<S> <C> <C>
Global Consumer Products and Services Portfolio................................. $ -- $ 96,407,016
Global Financial Services Portfolio............................................. -- 13,303,919
GT Global Health Care Fund...................................................... -- 931,408,323
Global Infrastructure Portfolio................................................. -- 45,967,339
Global Natural Resources Portfolio.............................................. -- 102,403,195
GT Global Telecommunications Fund............................................... -- 1,310,205,434
</TABLE>
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, 400,000,000 were
classified as shares of the GT Global Telecommunications 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 Growth & Income Fund; 200,000,000 were classified as shares
of GT Global Small Companies 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 Emerging Markets Fund; 200,000,000 were classified as shares
of GT Global High Income 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; 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 Funds were as
follows:
F47
<PAGE>
GT GLOBAL THEME FUNDS
CAPITAL SHARE TRANSACTIONS
GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
<TABLE>
<CAPTION>
DECEMBER 30, 1994
(COMMENCEMENT
YEAR ENDED OF OPERATIONS)
OCTOBER 31, 1996 TO OCTOBER 31, 1995
--------------------------------- -----------------------------
CLASS A SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------- ------------- ----------------- ------------ --------------
<S> <C> <C> <C> <C>
Shares sold....................................... 6,142,401 $ 118,779,939 330,327 $ 4,257,766
Shares issued in connection with reinvestment of
distributions................................... 13,656 202,166 -- --
------------- ----------------- ------------ --------------
6,156,057 118,982,105 330,327 4,257,766
Share repurchased................................. (2,769,898) (54,486,898) (54,980) (746,671)
------------- ----------------- ------------ --------------
Net increase...................................... 3,386,159 $ 64,495,207 275,347 $ 3,511,095
------------- ----------------- ------------ --------------
------------- ----------------- ------------ --------------
<CAPTION>
DECEMBER 30, 1994
(COMMENCEMENT
YEAR ENDED OF OPERATIONS)
OCTOBER 31, 1996 TO OCTOBER 31, 1995
--------------------------------- -----------------------------
CLASS B SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------- ------------- ----------------- ------------ --------------
<S> <C> <C> <C> <C>
Shares sold....................................... 5,689,956 $ 110,105,123 246,365 $ 3,239,565
Shares issued in connection with reinvestment of
distributions................................... 10,957 161,052 -- --
------------- ----------------- ------------ --------------
5,700,913 110,266,175 246,365 3,239,565
Share repurchased................................. (1,675,446) (32,960,366) (47,105) (579,906)
------------- ----------------- ------------ --------------
Net increase...................................... 4,025,467 $ 77,305,809 199,260 $ 2,659,659
------------- ----------------- ------------ --------------
------------- ----------------- ------------ --------------
<CAPTION>
JUNE 1, 1995
(COMMENCEMENT OF
YEAR ENDED SALE OF SHARES)
OCTOBER 31, 1996 TO OCTOBER 31, 1995
--------------------------------- -----------------------------
ADVISOR CLASS SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------- ------------- ----------------- ------------ --------------
<S> <C> <C> <C> <C>
Shares sold....................................... 589,226 $ 12,396,492 11,525 $ 152,299
Shares issued in connection with reinvestment of
distributions................................... 402 5,969 -- --
------------- ----------------- ------------ --------------
589,628 12,402,461 11,525 152,299
Share repurchased................................. (248,775) (5,293,607) (331) (4,444)
------------- ----------------- ------------ --------------
Net increase...................................... 340,853 $ 7,108,854 11,194 $ 147,855
------------- ----------------- ------------ --------------
------------- ----------------- ------------ --------------
</TABLE>
F48
<PAGE>
GT GLOBAL THEME FUNDS
GT GLOBAL FINANCIAL SERVICES FUND
<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....................................... 900,372 $ 11,973,497 669,827 $ 7,432,400
Shares issued in connection with reinvestment of
distributions................................... 3,997 50,562 -- --
--------- ------------ -------- -----------
904,369 12,024,059 669,827 7,432,400
Share repurchased................................. (867,261) (11,494,650) (465,993) (5,162,753)
--------- ------------ -------- -----------
Net increase...................................... 37,108 $ 529,409 203,834 $ 2,269,647
--------- ------------ -------- -----------
--------- ------------ -------- -----------
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, 1996 OCTOBER 31, 1995
----------------------- -------------------------
CLASS B SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------- --------- ------------ -------- -----------
<S> <C> <C> <C> <C>
Shares sold....................................... 596,980 $ 7,792,181 286,019 $ 3,181,342
Shares issued in connection with reinvestment of
distributions................................... 2,898 36,456 -- --
--------- ------------ -------- -----------
599,878 7,828,637 286,019 3,181,342
Share repurchased................................. (281,339) (3,677,982) (94,377) (1,037,075)
--------- ------------ -------- -----------
Net increase...................................... 318,539 $ 4,150,655 191,642 $ 2,144,267
--------- ------------ -------- -----------
--------- ------------ -------- -----------
<CAPTION>
JUNE 1, 1995
(COMMENCEMENT OF
YEAR ENDED SALE OF SHARES)
OCTOBER 31, 1996 TO OCTOBER 31, 1995
----------------------- -------------------------
ADVISOR CLASS SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------- --------- ------------ -------- -----------
<S> <C> <C> <C> <C>
Shares sold....................................... 3,500 $ 47,698 2,599 $ 29,737
Shares issued in connection with reinvestment of
distributions................................... 35 420 -- --
--------- ------------ -------- -----------
3,535 48,118 2,599 29,737
Share repurchased................................. (1,103) (14,704) -- --
--------- ------------ -------- -----------
Net increase...................................... 2,432 $ 33,414 2,599 $ 29,737
--------- ------------ -------- -----------
--------- ------------ -------- -----------
</TABLE>
F49
<PAGE>
GT GLOBAL THEME FUNDS
GT GLOBAL HEALTH CARE FUND
<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....................................... 84,410,204 $1,903,687,570 78,194,828 $ 1,518,869,435
Shares issued in connection with reinvestment of
distributions................................... 2,009,491 41,475,881 1,197,686 21,103,166
----------- ------------- ----------- ---------------
86,419,695 1,945,163,451 79,392,514 1,539,972,601
Share repurchased................................. (86,124,175) (1,957,478,015) (82,265,383) (1,598,688,749)
----------- ------------- ----------- ---------------
Net increase (decrease)........................... 295,520 $ (12,314,564) (2,872,869) $ (58,716,148)
----------- ------------- ----------- ---------------
----------- ------------- ----------- ---------------
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, 1996 OCTOBER 31, 1995
--------------------------- -----------------------------
CLASS B SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------- ----------- ------------- ----------- ---------------
<S> <C> <C> <C> <C>
Shares sold....................................... 6,741,207 $ 157,453,975 4,710,190 $ 92,123,273
Shares issued in connection with reinvestment of
distributions................................... 411,416 8,363,880 140,259 2,451,761
----------- ------------- ----------- ---------------
7,152,623 165,817,855 4,850,449 94,575,034
Share repurchased................................. (5,784,194) (129,761,569) (3,578,957) (70,045,915)
----------- ------------- ----------- ---------------
Net increase...................................... 1,368,429 $ 36,056,286 1,271,492 $ 24,529,119
----------- ------------- ----------- ---------------
----------- ------------- ----------- ---------------
<CAPTION>
JUNE 1, 1995
(COMMENCEMENT OF
YEAR ENDED SALE OF SHARES)
OCTOBER 31, 1996 TO OCTOBER 31, 1995
--------------------------- -----------------------------
ADVISOR CLASS SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------- ----------- ------------- ----------- ---------------
<S> <C> <C> <C> <C>
Shares sold....................................... 1,142,479 $ 27,246,793 32,235 $ 625,703
Shares issued in connection with reinvestment of
distributions................................... 3,280 67,679 -- --
----------- ------------- ----------- ---------------
1,145,759 27,314,472 32,235 625,703
Share repurchased................................. (1,121,971) (26,090,499) (7,577) (162,450)
----------- ------------- ----------- ---------------
Net increase...................................... 23,788 $ 1,223,973 24,658 $ 463,253
----------- ------------- ----------- ---------------
----------- ------------- ----------- ---------------
</TABLE>
F50
<PAGE>
GT GLOBAL THEME FUNDS
GT GLOBAL INFRASTRUCTURE FUND
<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....................................... 2,175,475 $ 30,275,819 2,997,022 $ 35,715,669
Share repurchased................................. (2,503,715) (33,964,432) (1,898,557) (23,075,894)
------------- ---------------- ------------- ----------------
Net increase (decrease)........................... (328,240) $ (3,688,613) 1,098,465 $ 12,639,775
------------- ---------------- ------------- ----------------
------------- ---------------- ------------- ----------------
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, 1996 OCTOBER 31, 1995
------------------------------- -------------------------------
CLASS B SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------- ------------- ---------------- ------------- ----------------
<S> <C> <C> <C> <C>
Shares sold....................................... 903,064 $ 12,423,925 2,815,712 $ 33,606,616
Share repurchased................................. (1,306,101) (17,421,173) (1,130,463) (13,421,180)
------------- ---------------- ------------- ----------------
Net increase (decrease)........................... (403,037) $ (4,997,248) 1,685,249 $ 20,185,436
------------- ---------------- ------------- ----------------
------------- ---------------- ------------- ----------------
</TABLE>
<TABLE>
<CAPTION>
JUNE 1, 1995
(COMMENCEMENT OF
YEAR ENDED SALE OF SHARES)
OCTOBER 31, 1996 TO OCTOBER 31, 1995
------------------------------- -------------------------------
ADVISOR CLASS SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------- ------------- ---------------- ------------- ----------------
<S> <C> <C> <C> <C>
Shares sold....................................... 11,122 $ 154,109 21,018 $ 257,486
Share repurchased................................. (5,256) (70,861) (3,199) (40,011)
------------- ---------------- ------------- ----------------
Net increase...................................... 5,866 $ 83,248 17,819 $ 217,475
------------- ---------------- ------------- ----------------
------------- ---------------- ------------- ----------------
</TABLE>
F51
<PAGE>
GT GLOBAL THEME FUNDS
GT GLOBAL NATURAL RESOURCES FUND
<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....................................... 9,220,103 $ 142,385,816 2,262,790 $ 25,998,648
Shares issued in connection with reinvestment of
distributions................................... 3,977 47,892 2,665 30,350
------------- ------------------ ------------- ----------------
9,224,080 142,433,708 2,265,455 26,028,998
Share repurchased................................. (7,529,884) (116,812,100) (2,356,872) (27,189,124)
------------- ------------------ ------------- ----------------
Net increase (decrease)........................... 1,694,196 $ 25,621,608 (91,417) $ (1,160,126)
------------- ------------------ ------------- ----------------
------------- ------------------ ------------- ----------------
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, 1996 OCTOBER 31, 1995
--------------------------------- -------------------------------
CLASS B SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------- ------------- ------------------ ------------- ----------------
<S> <C> <C> <C> <C>
Shares sold....................................... 4,288,540 $ 66,460,658 1,073,588 $ 12,447,266
Shares issued in connection with reinvestment of
distributions................................... 709 8,495 2,190 24,898
------------- ------------------ ------------- ----------------
4,289,249 66,469,153 1,075,778 12,472,164
Share repurchased................................. (2,178,862) (33,276,553) (928,373) (10,660,475)
------------- ------------------ ------------- ----------------
Net increase...................................... 2,110,387 $ 33,192,600 147,405 $ 1,811,689
------------- ------------------ ------------- ----------------
------------- ------------------ ------------- ----------------
</TABLE>
<TABLE>
<CAPTION>
JUNE 1, 1995
(COMMENCEMENT OF
YEAR ENDED SALE OF SHARES)
OCTOBER 31, 1996 TO OCTOBER 31, 1995
--------------------------------- -------------------------------
ADVISOR CLASS SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------- ------------- ------------------ ------------- ----------------
<S> <C> <C> <C> <C>
Shares sold....................................... 663,037 $ 10,703,010 9,525 $ 110,453
Shares issued in connection with reinvestment of
distributions................................... 77 922 -- --
------------- ------------------ ------------- ----------------
663,114 10,703,932 9,525 110,453
Share repurchased................................. (356,384) (5,379,503) (1,258) (14,767)
------------- ------------------ ------------- ----------------
Net increase...................................... 306,730 $ 5,324,429 8,267 $ 95,686
------------- ------------------ ------------- ----------------
------------- ------------------ ------------- ----------------
</TABLE>
F52
<PAGE>
GT GLOBAL THEME FUNDS
GT GLOBAL TELECOMMUNICATIONS FUND
<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....................................... 161,134,594 $ 2,777,197,821 83,031,164 $ 1,357,464,500
Shares issued in connection with reinvestment of
distributions................................... 3,376,395 52,886,360 3,938,085 63,284,987
------------ --------------- ----------- ---------------
164,510,989 2,830,084,181 86,969,249 1,420,749,487
Share repurchased................................. (174,818,005) (3,017,740,549) (96,901,218) (1,584,327,366)
------------ --------------- ----------- ---------------
Net decrease...................................... (10,307,016) $ (187,656,368) (9,931,969) $ (163,577,879)
------------ --------------- ----------- ---------------
------------ --------------- ----------- ---------------
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, 1996 OCTOBER 31, 1995
----------------------------- ----------------------------
CLASS B SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------- ------------ --------------- ----------- ---------------
<S> <C> <C> <C> <C>
Shares sold....................................... 15,365,874 $ 260,167,785 20,348,248 $ 330,809,778
Shares issued in connection with reinvestment of
distributions................................... 2,882,770 44,452,585 2,988,078 47,599,706
------------ --------------- ----------- ---------------
18,248,644 304,620,370 23,336,326 378,409,484
Share repurchased................................. (25,319,583) (426,829,324) (21,776,751) (351,935,028)
------------ --------------- ----------- ---------------
Net increase (decrease)........................... (7,070,939) $ (122,208,954) 1,559,575 $ 26,474,456
------------ --------------- ----------- ---------------
------------ --------------- ----------- ---------------
<CAPTION>
JUNE 1, 1995
(COMMENCEMENT OF
YEAR ENDED SALE OF SHARES)
OCTOBER 31, 1996 TO OCTOBER 31, 1995
----------------------------- ----------------------------
ADVISOR CLASS SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------- ------------ --------------- ----------- ---------------
<S> <C> <C> <C> <C>
Shares sold....................................... 1,229,487 $ 21,592,338 44,033 $ 692,076
Shares issued in connection with reinvestment of
distributions................................... 2,119 33,270 -- --
------------ --------------- ----------- ---------------
1,231,606 21,625,608 44,033 692,076
Share repurchased................................. (1,216,785) (21,450,446) (2,662) (46,403)
------------ --------------- ----------- ---------------
Net increase...................................... 14,821 $ 175,162 41,371 $ 645,673
------------ --------------- ----------- ---------------
------------ --------------- ----------- ---------------
</TABLE>
5. EXPENSE REDUCTIONS
The Manager has directed certain portfolio trades to brokers who paid a portion
of a Fund's or Portfolio's expenses. For the year ended October 31, 1996, the
Funds' or Portfolios' expenses were reduced by the following amounts under these
arrangements:
<TABLE>
<CAPTION>
EXPENSE
REDUCTION
---------
<S> <C>
Global Consumer Products and Services Portfolio.......................................................................... $ 17,893
Global Financial Services Portfolio...................................................................................... 9,402
GT Global Health Care Fund............................................................................................... 130,688
Global Infrastructure Portfolio.......................................................................................... 10,217
Global Natural Resources Portfolio....................................................................................... 45,253
GT Global Telecommunications Fund........................................................................................ 399,684
</TABLE>
F53
<PAGE>
GT GLOBAL THEME FUNDS
6. HOLDINGS OF 5% VOTING SECURITIES OF PORTFOLIO COMPANIES
Investments of 5% or more of an issuer's outstanding voting securities by a Fund
or Portfolio are defined in the Investment Company Act of 1940 as an affiliated
company. Investments in affiliated companies by GT Global Health Care Fund and
GT Global Telecommunications Fund at October 31, 1996 amounted to $91,854,438
and $180,037,891, respectively, at value.
Transactions with affiliated companies are as follows:
GT GLOBAL HEALTH CARE FUND:
<TABLE>
<CAPTION>
NET REALIZED
PURCHASES COST SALES COST GAIN (LOSS) DIVIDEND INCOME
--------------- ---------- -------------- ---------------
<S> <C> <C> <C> <C>
AVECOR Cardiovascular, Inc........................ $ 6,330,675 $ -- $ -- $ --
Cardiometrics, Inc................................ 2,706,928 -- -- --
Circon Corp....................................... 12,258,385 -- -- --
Ethical Holdings PLC - ADR........................ -- 52,500 15,000 --
Protein Design Labs, Inc.......................... 24,215,876 -- -- --
Life Medical Sciences, Inc........................ 3,070,938 78,750 12,500 --
Visx, Inc......................................... 21,024,153 -- -- --
TheraTech, Inc.................................... 17,041,018 -- -- --
</TABLE>
GT GLOBAL TELECOMMUNICATIONS FUND:
<TABLE>
<CAPTION>
NET REALIZED DIVIDEND
PURCHASES COST SALES COST GAIN (LOSS) INCOME
--------------- -------------- --------------- ------------
<S> <C> <C> <C> <C>
ANTEC Corp........................................ $ 1,439,140 $ -- $ -- $ --
Tekelec........................................... 14,825,646 -- -- --
Gandalf Technologies, Inc......................... 31,367,695 -- -- --
Spectrian Corp.................................... 774,360 65,000 (10,649) --
International Engineering PLC - Foreign........... -- -- -- 363,579
Tele 2000 S.A..................................... 921,175 -- -- --
Orbital Sciences Corp............................. 988,000 -- -- --
Three-Five Systems, Inc........................... -- -- -- --
PT Kabelindo Murni - Foreign...................... -- 544,781 (429,432) --
Atlantic Tele-Network, Inc........................ -- 600,000 418,750 --
Intermedia Communications of Florida, Inc......... 4,654,000 3,164,600 11,357,407 --
DSP Communications, Inc........................... 8,594,164 5,887,500 27,129,998 --
Grupo Mexicano de Video - 144A ADR................ -- 2,013,000 (1,997,750) --
</TABLE>
F54
<PAGE>
GT GLOBAL THEME FUNDS
- --------------
FEDERAL TAX INFORMATION (UNAUDITED):
Listed below is the amount of income received by the Funds from sources within
foreign countries and possessions of the United States and the amount of taxes
paid by the Funds to such countries for the fiscal year ended October 31, 1996:
<TABLE>
<CAPTION>
FOREIGN SOURCE FOREIGN TAXES
FUND INCOME PER SHARE PAID PER SHARE
- -------------------------------------------------- ----------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
GT Global Consumer Products and Services Fund..... -- -- -- --
GT Global Financial Services Fund................. $ 225,129 $ .16 $ 31,826 $ .02
GT Global Health Care Fund........................ -- -- -- --
GT Global Infrastructure Fund..................... 1,352,652 .21 121,927 .02
GT Global Natural Resources Fund.................. -- -- -- --
GT Global Telecommunications Fund................. 21,566,789 .17 2,964,143 .02
</TABLE>
Pursuant to Section 852 of the Internal Revenue Code, the Funds designate the
following amounts as capital gain dividends for the fiscal year ended October
31, 1996:
<TABLE>
<CAPTION>
CAPITAL GAIN
FUND DIVIDEND
- -------------------------------------------------- ----------------
<S> <C>
GT Global Consumer Products and Services Fund..... $ 3,871
GT Global Financial Services Fund................. --
GT Global Health Care Fund........................ 184,899,943
GT Global Infrastructure Fund..................... --
GT Global Natural Resources Fund.................. --
GT Global Telecommunications Fund................. 89,356,749
</TABLE>
Pursuant to Section 854 of the Internal Revenue Code, the Funds designate the
following percentage amounts of ordinary income dividends paid (including
short-term capital gain distributions, if any) by the Funds as income qualifying
for the dividends received deduction for corporations for the fiscal year ended
October 31, 1996:
<TABLE>
<CAPTION>
FUND
- --------------------------------------------------
<S> <C>
GT Global Consumer Products and Services Fund..... 1.25%
GT Global Financial Services Fund................. 18.00%
GT Global Health Care Fund........................ 3.75%
GT Global Infrastructure Fund..................... 10.00%
GT Global Natural Resources Fund.................. 3.50%
GT Global Telecommunications Fund................. 9.50%
</TABLE>
F55
<PAGE>
GT GLOBAL THEME FUNDS
NOTES
- --------------------------------------------------------------------------------
<PAGE>
GT GLOBAL THEME FUNDS
NOTES
- --------------------------------------------------------------------------------
<PAGE>
GT GLOBAL THEME FUNDS
NOTES
- --------------------------------------------------------------------------------
<PAGE>
GT GLOBAL THEME FUNDS
NOTES
- --------------------------------------------------------------------------------
<PAGE>
GT GLOBAL THEME FUNDS
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 THEME FUNDS
