G T INVESTMENT FUNDS INC, N-30D, 1998-01-07

G T INVESTMENT FUNDS INC
N-30D, 1998-01-07

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<PAGE>
GT GLOBAL
OVER 25 YEARS
OF INVESTING
WORLDWIDE

/ /
GT GLOBAL
GROWTH &
INCOME FUND

/ /
ANNUAL REPORT
OCTOBER 31, 1997

[LOGO]
<PAGE>
TABLE
OF CONTENTS

<TABLE>
<S> <C>
Message from the
Chairman............. 1

Report from the Fund
Managers and Key
Portfolio Holdings... 2

Report of Independent
Accountants.......... F1

Financial
Statements........... F2

Views of the Fund's management
described in this report are as
of the date written. Portfolio
holdings and allocations are as
of October 31, 1997, unless
otherwise noted. These views,
portfolio holdings and
allocations may have changed
subsequently.
</TABLE>
<PAGE>

GT GLOBAL GROWTH & INCOME FUND
MESSAGE FROM THE CHAIRMAN

Dear Shareholder,

Fiscal 1997 has been a challenging and exciting year. The volatility of the
market--and the resulting record highs and lows--has made investing a
sometimes awe-inspiring endeavor for investors and investment professionals
alike.

Across the GT Global family, our Funds have continued to seek their
investment goals and objectives regardless of world events. Whether it be the
recent turmoil in the Asian markets, the privatization and reform underway
across eastern Europe, deregulation occurring in Latin America or the ups and
downs of the U.S. market, our Funds have maintained their focus. In fact, we
believe these changes are yielding new investment opportunities in both
established economies and dynamic new markets around the world. Looking
forward to 1998, our commitment is to continue to monitor world markets and
seek additional ways to capitalize on events as they unfold for the benefit
of our shareholders.

In an effort to provide our customers easier access to information about the
GT Global Funds, we launched our website, www.gtglobal.com, during the latter
part of this year. We hope to continually enhance the information it
contains, from our worldwide economic outlook, to fund price and performance
reporting, to the Millennium Minute message of the day. Used in conjunction
with annual and semiannual reports and your quarterly statement on our Funds,
we hope it helps you monitor your investments and achieve your financial
goals.

Be assured that we will continue to strive to offer you the quality
investment products you need to build a well-diversified portfolio. As
always, we appreciate your continued confidence in our Funds. Should you or
your financial adviser have any questions regarding GT Global Funds, please
call us at 800-824-1580. One of our representatives will be happy to assist
you.

Sincerely,

/s/ William J. Guilfoyle
William J. Guilfoyle
Chairman of the Board and President
GT Global Mutual Funds

1
<PAGE>
GT GLOBAL GROWTH & INCOME FUND
PERFORMANCE SUMMARY

INVESTMENT OBJECTIVE
AND CURRENT STRATEGY

The Fund seeks long-term capital appreciation and current income. In an
effort to meet both objectives, the Fund invests primarily in stock of
blue-chip companies and high-quality govern-ment bonds from around the world.

GT Global JP Morgan Global
Growth & Income Fund Government
Class A Shares Bond Index MSCI World Index

9/25/90 9525 10000 10000
9525 10045 9678
9545 10443 10583
9625 10625 10412
9712 10744 10632
10015 10987 11023
10338 10997 12045
10314 10653 11692
10560 10781 11785
10826 10791 12054
10417 10647 11312
10895 10872 11848
11040 11098 11813
11188 11503 12124
11041 11616 12323
10852 11806 11788
11571 12402 12648
11401 12159 12416
11529 12124 12204
11314 12012 11631
11637 12112 11795
12048 12456 12267
11981 12796 11858
11938 13078 11891
11916 13426 12182
11758 13412 12072
11691 13077 11748
11647 12846 11960
11869 12967 12059
12004 13187 12101
12475 13399 12390
12812 13605 13111
12903 13853 13721
13084 13941 14039
13197 13952 13924
13519 13958 14213
14070 14371 14867
14046 14523 14595
14627 14516 14999
14418 14410 14153
12/31/93 15117 14557 14848
15610 14694 15830
14905 14533 15627
14382 14466 14956
14573 14455 15421
14430 14336 15464
14309 14506 15423
14718 14642 15719
14982 14604 16195
14721 14677 15773
15086 14897 16224
14600 14709 15524
14577 14743 15677
14430 15042 15444
14676 15429 15672
14722 16214 16431
15093 16473 17007
15465 16933 17156
15384 17038 17154
15834 17119 18015
15459 16643 17617
15855 17018 18134
16032 17184 17852
16310 17376 18475
16810 17591 19018
16939 17410 19366
17016 17309 19487
17087 17282 19815
17217 17218 20285
17502 17236 20306
17575 17387 20412
17367 17707 19695
17863 17780 19925
18145 17878 20709
18725 18233 20857
19515 18493 22029
19671 18365 21680
19565 17905 21945
19857 17781 22201
19907 17646 21766
20041 17547 22481
20897 17961 23873
21453 18165 25068
22261 18098 26226
21318 18076 24475
22582 18477 25809
10/31/97 22284 18869 24454

The chart above shows the performance of the GT Global Growth & Income Fund
Class A shares since inception versus various indices. This represents a
cumulative return of 122.84% and an average annual total return of 11.95% for
the Fund. The chart assumes a hypothetical $10,000 initial investment in the
Fund's Class A shares and reflects all Fund expenses and the maximum 4.75%
sales charge. A $10,000 investment in the Fund's Class B shares at inception
on October 22, 1992, would have been valued at $18,331 on October 31, 1997.
This figure reflects all Fund expenses and the applicable contingent deferred
sales charge (5% in the first year, decreasing to 0% after six years),
assuming a complete redemption at the end of the period. A $10,000 investment
in Advisor Class shares at inception on June 1, 1995, would have been worth
$14,509 on October 31, 1997.

AVERAGE ANNUAL TOTAL RETURNS%(1)
October 31, 1997

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) 19.01 13.77 12.72 13.35 12.67 11.95
Class B(3) 18.28 13.05 12.94 13.28 12.81 12.82
Advisor Class(4) 19.23 N/A 16.63 N/A N/A N/A

HISTORICAL PERFORMANCE%(2)
Annual Total Returns (per calendar year)

1990 1991 1992 1993 1994 1995 1996

Class A 1.97(3) 19.14 2.58 27.36 (3.57) 15.32 17.02
Class B N/A N/A 1.17(3) 26.80 (4.19) 14.56 16.10

(1) Figures assume reinvestment of all dividends and capital gains
distributions at net asset value.

(2) Performance data do not reflect the maximum 4.75% sales charge or the
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 September 25, 1990; Class B shares commenced
on October 22, 1992.

(4) The Fund began offering Advisor Class shares on June 1, 1995. Advisor
Class shares are not sold directly to the general public and are only
available through certain employee benefit plans, financial institutions and
other entities that have entered into specific agreements with GT Global.
Please see the "Alternative Purchase Plan" section in the Fund's prospectus.

The above data represent past performance of the Fund's shares, which does
not guarantee future results. The investment return and principal value of an
investment in the Fund will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original cost.

2
<PAGE>

INTERVIEW WITH PORTFOLIO MANAGERS
NICK TRAIN AND PAUL GRIFFITHS

Q HOW DID THE FUND PERFORM?

A The Fund continued to perform well, ending the 12-month period to October
31, 1997 with a total return of 19.01% for Class A shares (13.35% including
the maximum 4.75% sales charge) and 18.28% for Class B shares (13.28%
including the maximum 5% contingent deferred sales charge). Total return over
the same period was 17.25% for the Morgan Stanley Capital International
(MSCI) World Index(5) and 3.49% for the J.P. Morgan Global Government Bond
Index.(6)

For the period overall, the GT Global Growth & Income Fund's equity
allocation allowed it to outperform the J.P. Morgan Global Government Bond
Index. During the first six months of the reporting period, global fixed
income markets ran into difficulties when fears of inflationary pressures
prompted a hike in U.S. short-term rates in February. These markets, however,
rebounded as investors fled to quality in the wake of the Asian currency
crisis, which began with the devaluation of the Thai baht in early July.

Q WHAT MAIN FACTORS CONTRIBUTED TO FUND PERFORMANCE ON THE EQUITY SIDE?

A Certainly, the Fund's concentration in large cap stocks has worked to its
advantage. On a global basis, large cap stocks outperformed small cap stocks
for the year through the end of the reporting period. Uncertainties over the
direction of U.S. interest rates early in the year, the increasing popularity
of large cap index tracker funds and the recent global volatility
precipitated by Asian market turmoil have fueled the performance of large cap
stocks.

We are also increasingly looking at the Fund's equity exposure to sector or
industry types rather than purely on a geographical basis. This approach
broadly encompasses three category groups: interest rate-sensitive stocks,
defensives (such as consumer staples, pharmaceuticals, health care, retailers
and service providers) and industrial cyclicals (capital goods). Within its
holdings, the Fund has benefited from being considerably overweighted in
financial stocks, which have enjoyed a global bull market this year on the
back of a rally in the U.S. long bond. The merger and aquisition (M&A)
activity we've seen in U.S. financial companies is also beginning to spill
over into the rest of the world, particularly Europe, which has buoyed Fund
returns. Additionally, the Fund has been very underweighted in industrial
cyclicals, which lagged the overall market.

TOTAL EUROPEAN M&A VOLUME, 1988-96

1988 148
1989 215
1990 243
1991 180
1992 170
1993 170
1994 164
1995 279
1996 344

We believe corporate merger and acquisition activity will be one of the main
drivers of improved corporate profitability in Europe. The volume of M&A
activity reached new levels in 1996 and we believe it will continue. Source:
Securities Data Company.

Q WHICH COMPANIES PERFORMED EXCEPTIONALLY WELL FOR THE FUND?

A The ongoing consolidation story and focus on shareholder value throughout
Europe provided a big boost to the Fund. Among its equity holdings benefiting
from both this trend and a favorable interest rate environment were Royal Sun
Alliance in the UK, Swiss Bank Corp. in Switzerland and AEGON in the
Netherlands. In the U.S., Bristol Myers Squibb enjoyed strong returns on the
back of general large cap buoyancy.
CONTINUED P.4

(5) MSCI World Index is a market value-weighted average of the performance of
1,568 securities listed on major world stock exchanges--the U.S., Europe,
Canada, Australia, New Zealand and the Far East. It includes the effect of
reinvested dividends and is measured in U.S. dollars.

(6) J.P. Morgan Global Government Bond Index is a market value-weighted
average of government bonds from 13 major bond markets. It includes the
effect of reinvested coupons and is measured in U.S. dollars.

Indices are unmanaged, not available for direct investment and do not incur
sales charges and professional management fees.

3
<PAGE>

INTERVIEW WITH THE PORTFOLIO MANAGERS CONTINUED

Q WHY IS THE FUND OVERWEIGHTED IN AUSTRALASIA, THE UK AND SEVERAL OTHER
EUROPEAN EQUITY MARKETS? WHAT ARE YOUR BASIC BUY/SELL CRITERIA?

A While there are a number of criteria we employ to value securities, our
primary buy/sell discipline centers on dividend yield. As such, only stocks
offering a dividend yield above the average for the MSCI World Index during
their most recent fiscal year are eligible for inclusion in the portfolio.
Similarly, we sell stocks once their dividend yields fall below average. As
of October, the average yield of the MSCI was about 1.8%; therefore we will
not buy securities with a dividend yield less than 1.8%. To put this in
perspective, 46% of the 2,500 stocks in the MSCI universe offer an
above-average dividend, which means we are looking at about 1,500 stocks as a
starting universe.

Our analyses reveal that Australia, New Zealand, the UK and several European
equity markets have the highest proportion of above-average yielding shares.
On the other end of the spectrum are Japan, most of the Asian tiger economies
and now the U.S., following its massive five-year bull market (as markets go
up, dividend yields tend to go down).

Q WHAT DO YOU FIND SO ATTRACTIVE ABOUT THE UK MARKET?

A We believe the granting of complete operational independence to the Bank
of England is the single most bullish event in the UK this year. This has
enabled the Bank of England, no longer concerned with political issues, to
embark on an aggressive path of raising interest rates. For investors, the
big bonus is that inflation should stay low. Confidence is being reflected in
higher valuations, both in bond and equity markets--in our opinion, more
than offsetting the potential for a slowdown in growth.

UK Gilts have also provided an interesting play on European Monetary Union
(EMU), providing upside potential while having limited downside. Currently,
with the UK not taking part in the first round of EMU, yields are just barely
discounting EMU participation. However, if we see EMU continue at its current
pace and the market begins to discount UK participation, we believe that
there is room for the UK to rally quite sharply.

Equally, if we were to see a breakup in the EMU, the downside to owning Gilts
is limited. The major risk for Gilts, however, is inflation. If inflation
does begin to tick up, we would expect the Bank of England to continue
combating pressures through hikes in short-term interest rates.

Q WHAT WORKED WELL ON THE BOND SIDE?

A Over the reporting period, the Fund was overweighted in dollar-bloc
countries--the U.S., Canada, New Zealand and Australia. Its position in the
U.S., in particular, worked exceptionally well as the long bond (U.S.
30-year) rallied from 645 basis points (100 bps equal 1%) a year ago to 612
bps at the end of October, having gone as high as 720 bps in February. The
Fund's holdings benefited as bond yields fell and prices rose.

Q IS GROWTH A CONCERN IN YOUR OUTLOOK FOR U.S. TREASURIES?

A We've seen a rally in this asset class since April and believe trends are
in place for it to continue. Because of the inverse relationship between
yields and prices, a drop in yields could contribute favorably to
performance. Most importantly, although there may be growth in the U.S., we
don't think it will be hugely out of control. Thus, we foresee little need
for the Federal Reserve to significantly raise rates. Even if they do, we do
not envision the market being hit particularly hard.

The biggest risk to the portfolio from a bond perspective would be a rate cut
because we would see it as purely for equity market manipulation and not for
fundamental economic reasons. In other words, the Fed would be gambling with
future inflation, and we would not be surprised to see the long bond suffer
as a result.

Q WHY DOES THE FUND HOLD SO LITTLE IN CORE EUROPEAN DEBT, APART FROM GERMANY?

A We find core Europe distinctly uninteresting simply because yield spreads
to Germany (the difference between core European yields and German yields)
are so tight. Spreads have been driven down to these unattractive levels
primarily on the back of high global liquidity and exceptionally low yen
borrowing rates. Moreover, at these levels, we feel investors are not being
compensated for the risk that EMU may not happen.

While we are not overly excited about the prospects for core Europe, we own a
relatively large amount of German debt, primarily as a proxy for everything
else. Even this position has been slowly reduced over the course of the
period and reallocated to the U.S. As European growth resumes, however, we
are concerned
CONTINUED P.5

4
<PAGE>

INTERVIEW WITH THE PORTFOLIO MANAGERS CONTINUED

about the yield level there. On the other hand, we believe the EMU project
may cause some confusion and yields may not necessarily rebound if growth
were to pick up. Secondly, if the U.S. continues to rally as we expect,
prospects for Germany and the rest of Europe to sell off are relatively
limited. While a sideways movement in yields is possible, we do not think
this scenario overly bearish.

Q WHAT IS YOUR OUTLOOK FOR OTHER DOLLAR-BLOC BOND MARKETS?

A Australia has come a long way, and spreads to the U.S have narrowed quite
nicely. We expect this to continue. However, because of problems in Asia, we
do have some concerns about the Australian dollar that could lead us to
lighten our exposure there.

We continue to like Canada and believe the Canadian dollar will outperform
the U.S. dollar in 1998. We've been expecting this for some time and feel
prospects for the Canadian dollar remain very strong, both fundamentally and
from a trade perspective. This would be favorable for Canadian bonds.

Q WHAT IS YOUR LIKELY INVESTMENT STRATEGY FOR 1998?

A While our strategy is always contingent on current market conditions, with
respect to the equity/bond split, in the past we've been substantially
overweighted in equities relative to bonds. This allocation continues to appear
prudent through the end of 1997. Over the next few years, however, we think
relative returns between equities and bonds are likely to converge and,
therefore, expect to see the Fund's bond content gradually rise.

On the equity side, we expect to remain overweighted in interest
rate-sensitive stocks, particularly financials, until we believe U.S. bond
yields have troughed and prices have peaked. However, as markets continue to
become more expensive, we intend to build the Fund's exposure to defensive
sectors. We've already set the wheels in motion this year by buying a number
of European consumer staple-type companies--Guinness and Pernod Ricard in
France, for example. European stocks are particularly attractive because we
find them comparable to U.S. companies, but much cheaper.

We are likely to remain underweighted in capital goods until we feel the
inflation expectations cycle has turned. At the moment, the level of
inflation continues to surprise people by how low it remains.

In this type of environment, we think it is premature to own capital goods
companies. Once inflation starts to edge up more quickly, perhaps several
years down the line, we could conceivably increase exposure to these types of
companies.

On the bond side, we think next year will be a little bit more exciting. We
expect the focus to be on the U.S., which is why it currently holds the
largest position in the portfolio. This is a fairly dramatic change from a
year ago, when we held a lot of European bonds in the portfolio and not many
from the U.S.

In the early part of 1997, we mostly sold out of Europe and bought into the
U.S. market as it was selling off. While initially we may have been a couple
months ahead of the curve, we have since done very well. The U.S. bond market
rallied sharply on the back of the Asian situation and the ensuing flight to
quality. Looking ahead, we expect the U.S. to continue to perform strongly
and would not be surprised to see U.S. yields move below German yields in
1998.

ABOUT THE PORTFOLIO MANAGERS

NICK J. TRAIN -- Portfolio Manager for Chancellor LGT Asset Management since
1984; Investment Analyst since 1981. Prior to joining Chancellor LGT, Mr.
Train received his B.A. from Oxford University.

PAUL GRIFFITHS -- Portfolio Manager for Chancellor LGT Asset Management since
1994. Prior to joining Chancellor LGT, Mr. Griffiths was a Fixed Income Fund
Manager at Lazard Investors from 1993-94 and at Sanwa International from
1991-93. He received his B.Sc from the University of York, England.

SECTOR ALLOCATION OF NET ASSETS%
OCTOBER 31, 1997

EQUITY

Finance 28.4
Energy 14.2
Consumer Non-Durables 7.8
Services 7.7
Materials/Basic Industry 4.7
Health Care 4.4
Capital Goods 2.7
Consumer Durables 1.4
Multi Industry/Misc. 1.3

FIXED INCOME INVESTMENTS

Gov't & Gov't Agency Obligations 20.6
Corporate Bonds 5.5
Short-Term &Other 1.3

5
<PAGE>

GEOGRAPHIC ALLOCATION OF NET ASSETS

Australia/NZ 8.2%
Germany 13.0%
UK 20.5%
North America 28.8%
Other Europe 29.5%

Allocations may change as market conditions change. A complete listing may be
found in the Financial Statements section of this report.

% of
GT GLOBAL GROWTH & INCOME FUND(7) Country Net Assets
KEY EQUITY HOLDINGS

BRISTOL MYERS SQUIBB CO. This well-established U.S. 3.2
company offers a wide range of prescription and
non-prescription drugs, medical devices, health and
skin care products, toiletries and beauty aids.

SWISS BANK CORP. Offering a broad range of banking Switzerland 2.7
operations, including foreign exchange and bank note
dealings, precious metal trading, mortgages and
building loans, Swiss Bank has operations throughout
Switzerland and an extensive network of international
subsidiaries.

ROYAL & SUN ALLIANCE INSURANCE GROUP PLC This Group UK 2.6
is the holding company for the multi-national
insurance companies Sun Alliance Group PLC and Royal
Insurance Holdings.

ROYAL DUTCH PETROLEUM CO. One of the largest oil Netherlands 2.6
companies worldwide, Royal Dutch is a key player in
the energy industry, both within Europe and on a
global basis. Its success is based on a proven track
record of exploration, together with succesful
marketing and chemical activities.

ELEKTROWATT AG A holding company that operates Switzerland 2.5
subsidiaries which generate and sell electricity; the
company also has interests in hydro and nuclear power
plants.

CS HOLDING AG Provides universal bank services in Switzerland 2.0
Switzerland, investment, trust and management
services and life insurance through its subsidiaries.
It is the parent company of Credit Suisse, CS First
Boston, Elektrowatt and CS Life.

AEGON NV A Netherlands-based international insurance Netherlands 2.0
group, primarily writes life and health insurance,
and offers related pension, savings and investment
products in Europe, North America and the Caribbean.

FIRST TENNESSEE NATIONAL CORP. A bank holding U.S. 1.9
company. The company's subsidiary banks attract
deposits and offer real estate mortgage,
construction, commercial and consumer loans. First
Tennessee serves customers throughout Tennessee,
northern Mississippi and northern west Arkansas.

TELECOM CORPORATION OF NEW ZEALAND LIMITED Provides New Zealand 1.9
telecommunications services throughout New Zealand
and internationally.

UNION BANK OF SWITZERLAND Provides a wide range of Switzerland 1.8
banking and financial services, globally.

Source: Bloomberg, November 1997.
(7) There is no assurance the Fund will continue to hold these or any other
securities mentioned in this report.

6
<PAGE>
GT GLOBAL
GROWTH &
INCOME FUND

FINANCIAL
STATEMENTS
<PAGE>
GT GLOBAL GROWTH & INCOME FUND

REPORT OF INDEPENDENT ACCOUNTANTS

- --------------------------------------------------------------------------------

ANNUAL REPORT
To the Shareholders of GT Global Growth & Income Fund and Board of Directors of
G.T. Investment Funds, Inc.:

We have audited the accompanying statement of assets and liabilities of GT
Global Growth & Income Fund, one of the funds organized as a series of G.T.
Investment Funds, Inc., including the portfolio of investments, as of October
31, 1997, the related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the five years in the period
then ended. These financial statements and the financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and the financial highlights based on our
audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1997, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of GT
Global Growth & Income Fund as of October 31, 1997, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the five years in the period then ended, in conformity with generally accepted
accounting principles.

COOPERS & LYBRAND L.L.P.

BOSTON, MASSACHUSETTS
DECEMBER 15, 1997

F1
<PAGE>
GT GLOBAL GROWTH & INCOME FUND

PORTFOLIO OF INVESTMENTS

October 31, 1997

- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ---------------------------------------------------------- -------- -------------- ------------ -------------
<S> <C> <C> <C> <C>
Finance (28.4%)
Schweizerischer Bankverein (Swiss Bank Corp.) .......... SWTZ 74,750 $ 20,102,411 2.7
BANKS-MONEY CENTER
Royal & Sun Alliance Insurance Group PLC ............... UK 2,081,400 19,951,696 2.6
INSURANCE - MULTI-LINE
CS Holding AG - Registered ............................. SWTZ 108,300 15,258,696 2.0
BANKS-MONEY CENTER
AEGON N.V. ............................................. NETH 187,875 14,809,312 2.0
INSURANCE-LIFE
First Tennessee National Corp. ......................... US 245,400 14,141,175 1.9
BANKS-REGIONAL
Union Bank of Switzerland - Bearer ..................... SWTZ 11,752 13,531,589 1.8
BANKS-MONEY CENTER
ABN AMRO Holding N.V. .................................. NETH 667,296 13,442,181 1.8
BANKS-MONEY CENTER
ING Groep N.V. ......................................... NETH 264,262 11,096,009 1.5
OTHER FINANCIAL
Deutsche Bank AG ....................................... GER 134,150 8,774,787 1.2
BANKS-MONEY CENTER
American General Corp. ................................. US 170,000 8,670,000 1.1
INSURANCE-LIFE
IKB Deutsche Industriebank AG .......................... GER 394,000 8,339,229 1.1
BANKS-REGIONAL
General Accident PLC ................................... UK 400,000 6,806,441 0.9
INSURANCE - PROPERTY-CASUALTY
National Westminster Bank PLC .......................... UK 471,800 6,781,828 0.9
BANKS-MONEY CENTER
Fortis Amev N.V. ....................................... NETH 164,542 6,468,086 0.9
OTHER FINANCIAL
Lloyds TSB Group PLC ................................... UK 513,428 6,415,697 0.8
BANKS-REGIONAL
Commonwealth Bank of Australia ......................... AUSL 546,000 6,275,641 0.8
BANKS-SUPER REGIONAL
Generale de Banque S.A.: ............................... BEL -- -- 0.8
BANKS-MONEY CENTER
Common ............................................... -- 14,762 6,038,244 --
Strip VVPR-/- ........................................ -- 1,342 567 --
Kredietbank N.V. ....................................... BEL 12,980 5,446,409 0.7
BANKS-REGIONAL
Commercial Union PLC ................................... UK 361,550 5,093,962 0.7
INSURANCE - MULTI-LINE
Mercury Asset Management Group PLC ..................... UK 196,698 4,272,457 0.6
INVESTMENT MANAGEMENT
M & G Group PLC ........................................ UK 155,000 3,139,257 0.4
INVESTMENT MANAGEMENT
General Property Trust ................................. AUSL 1,500,000 2,688,928 0.4
REAL ESTATE
Reinsurance Australia Corporation Ltd. ................. AUSL 880,000 2,276,555 0.3
INSURANCE - MULTI-LINE
Infrastructure Trust of Australia Group ................ AUSL 2,830,000 2,188,401 0.3
OTHER FINANCIAL
</TABLE>

The accompanying notes are an integral part of the financial statements.

F2
<PAGE>
GT GLOBAL GROWTH & INCOME FUND

PORTFOLIO OF INVESTMENTS (cont'd)

October 31, 1997

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ---------------------------------------------------------- -------- -------------- ------------ -------------
<S> <C> <C> <C> <C>
Finance (Continued)
National Australia Bank Ltd. ........................... AUSL 125,000 $ 1,709,139 0.2
BANKS-REGIONAL
Realty Development Corp., Ltd. "A" ..................... HK 5,000 14,230 --
REAL ESTATE
------------
213,732,927
------------
Energy (14.2%)
Royal Dutch Petroleum Co. .............................. NETH 371,840 19,674,378 2.6
OIL
Elektrowatt "B" AG ..................................... SWTZ 49,068 18,821,083 2.5
ELECTRICAL & GAS UTILITIES
Exxon Corp. ............................................ US 182,600 11,218,488 1.5
OIL
Mobil Corp. ............................................ US 127,600 9,290,875 1.2
OIL
Shell Transport & Trading Co., PLC ..................... UK 1,121,700 7,953,685 1.1
OIL
Electrabel S.A. ........................................ BEL 34,760 7,801,667 1.0
ELECTRICAL & GAS UTILITIES
Elf Aquitaine .......................................... FR 52,475 6,498,283 0.9
OIL
RWE AG ................................................. GER 134,620 5,839,128 0.8
ELECTRICAL & GAS UTILITIES
PG&E Corp. ............................................. US 220,000 5,623,750 0.7
ELECTRICAL & GAS UTILITIES
Reunies Electrobel & Tractebel S.A. .................... BEL 57,935 4,935,325 0.7
ELECTRICAL & GAS UTILITIES
Groupe Bruxelles Lambert S.A. .......................... BEL 31,025 4,805,337 0.6
OIL
Santos Ltd. ............................................ AUSL 907,472 4,172,138 0.6
OIL
------------
106,634,137
------------
Consumer Non-Durables (7.8%)
Avon Products, Inc. .................................... US 182,000 11,921,000 1.6
PERSONAL CARE/COSMETICS
Universal Corp. ........................................ US 280,500 10,501,219 1.4
TOBACCO
Philip Morris Cos., Inc. ............................... US 255,000 10,104,375 1.3
TOBACCO
Guinness PLC ........................................... UK 871,500 7,791,169 1.0
BEVERAGES - ALCOHOLIC
Pernod Ricard .......................................... FR 158,720 7,358,318 1.0
BEVERAGES - ALCOHOLIC
Cadbury Schweppes PLC .................................. UK 670,000 6,742,704 0.9
BEVERAGES - NON-ALCOHOLIC
Brown-Forman Corp. "B" ................................. US 93,600 4,603,950 0.6
BEVERAGES - ALCOHOLIC
------------
59,022,735
------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

F3
<PAGE>
GT GLOBAL GROWTH & INCOME FUND

PORTFOLIO OF INVESTMENTS (cont'd)

October 31, 1997

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ---------------------------------------------------------- -------- -------------- ------------ -------------
<S> <C> <C> <C> <C>
Services (7.7%)
Telecom Corporation of New Zealand Limited: ............ NZ -- -- 1.9
TELEPHONE NETWORKS
Common ............................................... -- 2,614,200 $ 12,660,904 --
ADR{\/} .............................................. -- 38,000 1,479,625 --
McGraw-Hill, Inc. ...................................... US 162,000 10,590,750 1.4
BROADCASTING & PUBLISHING
Woolworths Ltd. ........................................ AUSL 2,100,000 6,776,098 0.9
RETAILERS-OTHER
PMP Communications Ltd. ................................ AUSL 2,656,500 5,509,086 0.7
BROADCASTING & PUBLISHING
Qantas Airways Ltd. .................................... AUSL 2,890,000 5,180,668 0.7
TRANSPORTATION - AIRLINES
Royal PTT Nederland N.V. ............................... NETH 112,735 4,309,602 0.6
TELEPHONE NETWORKS
Cognizant Corp. ........................................ US 109,800 4,302,788 0.6
CONSUMER SERVICES
Dun & Bradstreet Corp. ................................. US 109,800 3,136,163 0.4
BROADCASTING & PUBLISHING
EMI Group PLC .......................................... UK 381,600 3,088,259 0.4
LEISURE & TOURISM
ACNielsen Corp.-/- ..................................... US 36,600 837,218 0.1
CONSUMER SERVICES
------------
57,871,161
------------
Materials/Basic Industry (4.7%)
Akzo Nobel N.V. ........................................ NETH 58,950 10,389,900 1.4
CHEMICALS
BASF AG ................................................ GER 234,000 7,937,953 1.1
CHEMICALS
Solvay S.A. "A" ........................................ BEL 117,540 7,083,515 0.9
CHEMICALS
Monsanto Co. ........................................... US 160,500 6,861,375 0.9
CHEMICALS
Aberfoyle Ltd. ......................................... AUSL 1,160,000 2,324,077 0.3
METALS - NON-FERROUS
Solutia, Inc. .......................................... US 32,100 710,213 0.1
CHEMICALS
------------
35,307,033
------------
Health Care (4.4%)
Bristol Myers Squibb Co. ............................... US 277,400 24,341,850 3.2
PHARMACEUTICALS
Bayer AG ............................................... GER 258,600 9,072,369 1.2
PHARMACEUTICALS
------------
33,414,219
------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

F4
<PAGE>
GT GLOBAL GROWTH & INCOME FUND

PORTFOLIO OF INVESTMENTS (cont'd)

October 31, 1997

TOTAL EQUITY INVESTMENTS (cost $338,444,171) ............. 546,163,855 72.6
------------ -----
<CAPTION>

PRINCIPAL VALUE % OF NET
FIXED INCOME INVESTMENTS CURRENCY AMOUNT (NOTE 1) ASSETS
- ---------------------------------------------------------- -------- -------------- ------------ -------------
<S> <C> <C> <C> <C>
Government & Government Agency Obligations (20.6%)
Australia (0.7%)
Australian Government, 8.75% due 8/15/08 ............. AUD 5,774,000 4,934,994 0.7
Canada (1.2%)
Canadian Government, 8.75% due 12/1/05 ............... CAD 10,620,000 9,179,080 1.2
Denmark (0.7%)
Kingdom of Denmark, 7% due 11/15/07 .................. DKK 31,100,000 5,034,931 0.7
Germany (3.8%)
Deutschland Republic:
6.75% due 4/22/03 .................................. DEM 23,000,000 14,318,817 1.9
6.25% due 1/4/24 ................................... DEM 4,300,000 2,508,188 0.3
Treuhandanstalt:
6.625% due 7/9/03 .................................. DEM 12,060,000 7,473,074 1.0
6.375% due 7/1/99 .................................. DEM 7,000,000 4,192,288 0.6
Italy (1.8%)
Italian Buoni Poliennali del Tesoro (BTPS):
6% due 2/15/00 ..................................... ITL 18,365,000,000 10,984,835 1.5
10.5% due 9/01/05 .................................. ITL 2,725,000,000 2,039,827 0.3
New Zealand (0.4%)
New Zealand Government, 8% due 4/15/04 ............... NZD 4,440,000 2,955,320 0.4
Sweden (0.6%)
Swedish Government, 8% due 8/15/07 ................... SEK 30,000,000 4,469,072 0.6
United Kingdom (4.0%)
United Kingdom Treasury:
8% due 6/10/03 ..................................... GBP 14,000,000 24,942,355 3.3
7.5% due 12/7/06 ................................... GBP 3,116,000 5,556,353 0.7
</TABLE>

The accompanying notes are an integral part of the financial statements.

F5
<PAGE>
GT GLOBAL GROWTH & INCOME FUND

PORTFOLIO OF INVESTMENTS (cont'd)

October 31, 1997

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL VALUE % OF NET
FIXED INCOME INVESTMENTS CURRENCY AMOUNT (NOTE 1) ASSETS
- ---------------------------------------------------------- -------- -------------- ------------ -------------
<S> <C> <C> <C> <C>
Government & Government Agency Obligations (Continued)
United States (7.4%)
United States Treasury Bonds:
6% due 2/15/26 ..................................... USD 24,060,000 $ 23,404,459 3.1
6.25% due 8/15/23 .................................. USD 9,075,000 9,101,587 1.2
United States Treasury Notes:
7.5% due 2/15/05 ................................... USD 15,460,000 16,928,096 2.2
6.5% due 8/15/05 ................................... USD 2,580,000 2,676,397 0.3
Federal National Mortgage Association, 6.375% due
8/15/07 ............................................. AUD 5,940,000 4,241,014 0.6
------------
Total Government & Government Agency Obligations (cost
$151,129,623) ........................................... 154,940,687
------------
Corporate Bonds (5.5%)
Germany (2.5%)
Siemens Capital Corp., 8% due 6/24/02+/+ ............. USD 4,710,000 7,985,805 1.1
Commerzbank AG, Convertible Bond, 9.45% due
12/31/00+ ........................................... DEM 4,173,000 6,630,339 0.9
Deutsche Bank AG, 9.00% due 12/31/02+/+ .............. DEM 5,625,000 3,892,976 0.5
United Kingdom (3.0%)
Daily Mail & General Trust, Convertible Bond, 5.75%
due 9/26/03 ......................................... GBP 3,405,000 7,795,748 1.0
Land Securities PLC, Convertible Bond, 9.375% due
7/31/04 ............................................. GBP 3,485,000 7,679,334 1.0
MBNA Chester Asset Receivable #3, 6.6% due
11/17/03+ ........................................... GBP 4,500,000 7,568,182 1.0
------------
Total Corporate Bonds (cost $33,669,644) ................. 41,552,384
------------ -----

TOTAL FIXED INCOME INVESTMENTS (cost $184,799,267) ....... 196,493,071 26.1
------------ -----

NO. OF VALUE % OF NET
WARRANTS COUNTRY WARRANTS (NOTE 1) ASSETS
- ---------------------------------------------------------- -------- -------------- ------------ -------------
<S> <C> <C> <C> <C>
Societe Generale Banque put warrants due 11/15/99
Tractebel (cost $0) ................................... BEL 11,587 84,839 --
------------ -----
BANKS-MONEY CENTER
<CAPTION>

NO. OF VALUE % OF NET
RIGHTS COUNTRY RIGHTS (NOTE 1) ASSETS
- ---------------------------------------------------------- -------- -------------- ------------ -------------
<S> <C> <C> <C> <C>
Infrastructure Trust of Australia Group Rights, expire
12/1/97 (cost $0) ..................................... AUSL 943,333 6,632 --
------------ -----
OTHER FINANCIAL
</TABLE>

The accompanying notes are an integral part of the financial statements.

F6
<PAGE>
GT GLOBAL GROWTH & INCOME FUND

PORTFOLIO OF INVESTMENTS (cont'd)

October 31, 1997

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
REPURCHASE AGREEMENT (NOTE 1) ASSETS
- ---------------------------------------------------------- ------------ -------------
<S> <C> <C> <C> <C>
Dated October 31, 1997, with State Street Bank & Trust
Co., due November 3, 1997, for an effective yield of
5.57%, collateralized by $1,935,000 U.S. Treasury
Bonds, 8.875% due 8/15/17 (market value of collateral
is $2,538,597, including accrued interest). (cost
$2,485,384) ........................................... $ 2,485,383 0.3
------------ -----

TOTAL INVESTMENTS (cost $525,728,822) * ................. 745,233,780 99.0
Other Assets and Liabilities ............................. 7,244,043 1.0
------------ -----

NET ASSETS ............................................... $752,477,823 100.0
------------ -----
------------ -----
</TABLE>

- --------------

-/- Non-income producing security.
{\/} U.S. currency denominated.
+ The coupon rate shown on floating rate note represents the rate at
period end.
+/+ Issued with detachable warrants or value recovery rights. The
current market value of each warrant or right is zero.
* For Federal income tax purposes, cost is $527,143,379 and
appreciation (depreciation) is as follows:

<TABLE>
<S> <C>
Unrealized appreciation: $ 232,777,964
Unrealized depreciation: (14,687,563)
-------------
Net unrealized appreciation: $ 218,090,401
-------------
-------------
</TABLE>

Abbreviation:
ADR--American Depository Receipt

The accompanying notes are an integral part of the financial statements.

F7
<PAGE>
GT GLOBAL GROWTH & INCOME FUND

PORTFOLIO OF INVESTMENTS (cont'd)

October 31, 1997

- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at October 31, 1997, 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) ................. 5.2 0.7 5.9
Belgium (BEL/BEF) .................... 4.7 4.7
Canada (CAN/CAD) ..................... 1.2 1.2
Denmark (DEN/DKK) .................... 0.7 0.7
France (FR/FRF) ...................... 1.9 1.9
Germany (GER/DEM) .................... 6.7 6.3 13.0
Italy (ITLY/ITL) ..................... 1.8 1.8
Netherlands (NETH/NLG) ............... 10.8 10.8
New Zealand (NZ/NZD) ................. 1.9 0.4 2.3
Sweden (SWDN/SEK) .................... 0.6 0.6
Switzerland (SWTZ/CHF) ............... 9.0 9.0
United Kingdom (UK/GBP) .............. 13.5 7.0 20.5
United States & Other (US/USD) ....... 18.9 7.4 1.3 27.6
------ ----- --- -----
Total ............................... 72.6 26.1 1.3 100.0
------ ----- --- -----
------ ----- --- -----
</TABLE>

- --------------

{d} Percentages indicated are based on net assets of $752,477,823.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
OCTOBER 31, 1997

<TABLE>
<CAPTION>
MARKET VALUE UNREALIZED
(U.S. CONTRACT DELIVERY APPRECIATION
CONTRACTS TO SELL: DOLLARS) PRICE DATE (DEPRECIATION)
- ---------------------------------------- ------------ -------- -------- -------------
<S> <C> <C> <C> <C>
Deutsche Marks.......................... 26,803,508 1.80000 11/21/97 $(1,136,841)
French Francs........................... 2,481,413 6.14000 11/21/97 (152,423)
French Francs........................... 1,238,580 5.72800 02/06/98 945
Netherland Guilders..................... 10,870,680 2.08800 11/14/97 (765,316)
Swiss Francs............................ 12,639,800 1.44000 12/19/97 (417,578)
------------ -------------
Total Contracts to Sell (Receivable
amount $51,562,768).................. 54,033,981 (2,471,213)
------------ -------------
THE VALUE OF CONTRACTS TO SELL AS
PERCENTAGE OF NET ASSETS IS 7.18%.
Total Open Forward Foreign Currency
Contracts............................ $(2,471,213)
-------------
-------------
</TABLE>

- ----------------
See Note 1 to the financial statements.

The accompanying notes are an integral part of the financial statements.

F8
<PAGE>
GT GLOBAL GROWTH & INCOME FUND

STATEMENT OF ASSETS
AND LIABILITIES
October 31, 1997

- --------------------------------------------------------------------------------

<TABLE>
<S> <C> <C>
Assets:
Investments in securities, at value (cost $525,728,822) (Note 1)............................. $745,233,780
U.S. currency..................................................................... $ 710
Foreign currencies (cost $66,141)................................................. 65,897 66,607
---------
Receivable for Fund shares sold.............................................................. 6,808,910
Interest and interest withholding tax reclaims receivable.................................... 4,291,268
Dividends and dividend withholding tax reclaims receivable................................... 1,596,979
-----------
Total assets............................................................................... 757,997,544
-----------
Liabilities:
Payable for open forward foreign currency contracts (Note 1)................................. 2,471,213
Payable for Fund shares repurchased (Note 2)................................................. 1,507,330
Payable for investment management and administration fees (Note 2)........................... 631,265
Payable for service and distribution expenses (Note 2)....................................... 484,947
Payable for printing and postage expenses.................................................... 124,328
Payable for forward foreign currency contracts -- closed (Note 1)............................ 97,836
Payable for transfer agent fees (Note 2)..................................................... 94,599
Payable for custodian fees (Note 1).......................................................... 37,200
Payable for professional fees................................................................ 33,142
Payable for fund accounting fees (Note 2).................................................... 16,751
Payable for registration and filing fees..................................................... 9,540
Payable for Directors' fees and expenses (Note 2)............................................ 7,754
Other accrued expenses....................................................................... 3,816
-----------
Total liabilities.......................................................................... 5,519,721
-----------
Net assets..................................................................................... $752,477,823
-----------
-----------
Class A:
Net asset value and redemption price per share ($292,527,640 DIVIDED BY 35,620,970 shares
outstanding).................................................................................. $ 8.21
-----------
-----------
Maximum offering price per share (100/95.25 of $8.21) *........................................ $ 8.62
-----------
-----------
Class B:+
Net asset value and offering price per share ($456,893,047 DIVIDED BY 55,651,933 shares
outstanding).................................................................................. $ 8.21
-----------
-----------
Advisor Class:
Net asset value, offering price per share, and redemption price per share ($3,057,136 DIVIDED
BY 372,705 shares outstanding)................................................................ $ 8.20
-----------
-----------
Net assets consist of:
Paid in capital (Note 4)..................................................................... $521,143,879
Accumulated net realized gain on investments and foreign currency transactions............... 14,233,867
Net unrealized depreciation on translation of assets and liabilities in foreign currencies... (2,404,881)
Net unrealized appreciation of investments................................................... 219,504,958
-----------
Total -- representing net assets applicable to capital shares outstanding...................... $752,477,823
-----------
-----------
<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.

F9
<PAGE>
GT GLOBAL GROWTH & INCOME FUND

STATEMENT OF OPERATIONS

Year ended October 31, 1997

- --------------------------------------------------------------------------------

<TABLE>
<S> <C> <C>
Investment income: (Note 1)
Dividend income (net of foreign withholding tax of $1,854,546)............................ $16,116,249
Interest income (net of foreign withholding tax of $3,879)................................ 14,091,494
Other income.............................................................................. 43,134
-----------
Total investment income................................................................. 30,250,877
-----------
Expenses:
Investment management and administration fees (Note 2).................................... 6,900,695
Service and distribution expenses: (Note 2)
Class A..................................................................... $ 994,519
Class B..................................................................... 4,233,024 5,227,543
----------
Transfer agent fees (Note 2).............................................................. 1,258,598
Custodian fees (Note 1)................................................................... 472,449
Printing and postage expenses............................................................. 230,825
Fund accounting fees (Note 2)............................................................. 183,323
Registration and filing fees.............................................................. 70,955
Audit fees................................................................................ 54,630
Legal fees................................................................................ 25,414
Directors' fees and expenses (Note 2)..................................................... 14,779
Other expenses (Note 1)................................................................... 30,664
-----------
Total expenses before reductions........................................................ 14,469,875
-----------
Expense reductions (Notes 1 & 5)...................................................... (1,009,844)
-----------
Total net expenses...................................................................... 13,460,031
-----------
Net investment income....................................................................... 16,790,846
-----------
Net realized and unrealized gain on investments and foreign currencies: (Note 1)
Net realized gain on investments.............................................. 11,255,273
Net realized gain on foreign currency transactions............................ 12,750,255
----------
Net realized gain during the year....................................................... 24,005,528
Net change in unrealized depreciation on translation of assets and liabilities
in foreign currencies........................................................ (4,059,448)
Net change in unrealized appreciation of investments.......................... 84,674,909
----------
Net unrealized appreciation during the year............................................. 80,615,461
-----------
Net realized and unrealized gain on investments and foreign currencies...................... 104,620,989
-----------
Net increase in net assets resulting from operations........................................ $121,411,835
-----------
-----------
</TABLE>

The accompanying notes are an integral part of the financial statements.

F10
<PAGE>
GT GLOBAL GROWTH & INCOME FUND

STATEMENT OF CHANGES IN NET ASSETS

- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1997 1996
------------ ------------
<S> <C> <C>
Increase in net assets
Operations:
Net investment income...................................................... $ 16,790,846 $ 18,175,444
Net realized gain on investments and foreign currency transactions......... 24,005,528 15,732,409
Net change in unrealized appreciation (depreciation) on translation of
assets and liabilities in foreign currencies.............................. (4,059,448) 1,957,055
Net change in unrealized appreciation of investments....................... 84,674,909 62,236,320
------------ ------------
Net increase in net assets resulting from operations..................... 121,411,835 98,101,228
------------ ------------
Class A:
Distributions to shareholders: (Note 1)
From net investment income................................................. (7,733,156) (9,963,848)
From net realized gain on investments...................................... (757,327) (1,766,763)
Class B:
Distributions to shareholders: (Note 1)
From net investment income................................................. (9,266,887) (10,894,963)
From net realized gain on investments...................................... (907,529) (2,225,842)
Advisor Class:
Distributions to shareholders: (Note 1)
From net investment income................................................. (125,777) (65,132)
From net realized gain on investments...................................... (12,318) (5,890)
------------ ------------
Total distributions...................................................... (18,802,994) (24,922,438)
------------ ------------
Capital share transactions: (Note 4)
Increase from capital shares sold and reinvested........................... 426,976,337 237,835,679
Decrease from capital shares repurchased................................... (450,361,754) (279,569,655)
------------ ------------
Net decrease from capital share transactions............................. (23,385,417) (41,733,976)
------------ ------------
Total increase in net assets................................................. 79,223,424 31,444,814
Net assets:
Beginning of year.......................................................... 673,254,399 641,809,585
------------ ------------
End of year................................................................ $752,477,823* $673,254,399*
------------ ------------
------------ ------------
* Includes undistributed net investment income of........................... $ -- $ 755,291
------------ ------------
------------ ------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

F11
<PAGE>
GT GLOBAL GROWTH & INCOME FUND

FINANCIAL HIGHLIGHTS

CLASS A
----------------------------------------------------------
YEAR ENDED OCTOBER 31,
----------------------------------------------------------
1997 (D) 1996 1995 1994 1993 (D)
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 7.11 $ 6.35 $ 6.21 $ 6.29 $ 5.28
---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income................. 0.21 0.22 0.24 0.22 0.24*
Net realized and unrealized gain
(loss) on investments................ 1.12 0.82 0.13 (0.03) 1.05
---------- ---------- ---------- ---------- ----------
Net increase from investment
operations......................... 1.33 1.04 0.37 0.19 1.29
---------- ---------- ---------- ---------- ----------
Distributions to shareholders:
From net investment income............ (0.21) (0.24) (0.22) (0.21) (0.24)
From net realized gain on
investments.......................... (0.02) (0.04) (0.01) (0.06) --
From sources other than net investment
income............................... -- -- -- -- (0.04)
---------- ---------- ---------- ---------- ----------
Total distributions................. (0.23) (0.28) (0.23) (0.27) (0.28)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period.......... $ 8.21 $ 7.11 $ 6.35 $ 6.21 $ 6.29
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------

Total investment return (c)............. 19.01% 16.80% 6.27% 3.14% 25.1%
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 292,528 $ 286,203 $ 284,069 $ 317,847 $ 251,428
Ratio of net investment income to
average net assets..................... 2.74% 3.17% 3.85% 3.30% 3.3%*
Ratio of expenses to average net assets:
With expense reductions (Notes 1 &
5)................................... 1.50% 1.59% 1.70% 1.67% 1.8%*
Without expense reductions............ 1.64% 1.66% 1.74% N/A N/A
Portfolio turnover rate++............... 50% 39% 83% 117% 24%
Average commission rate per share paid
on portfolio transactions++............ $ 0.0151 $ 0.0139 N/A N/A N/A
</TABLE>

- ----------------

+ 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
class of shares issued.
* Includes reimbursement by Chancellor LGT Asset Management, Inc. of
Fund operating expenses of $0.005 for the year ended October 31, 1993.
Without such reimbursement, the expense ratio would have been 1.9% and
the ratio of net investment income to average net assets would have
been 3.2%.
(a) Annualized
(b) Not annualized
(c) Total investment return does not include sales charges.
(d) These selected per share data were calculated based upon average
shares outstanding during the year.

The accompanying notes are an integral part of the financial statements.

F12
<PAGE>
GT GLOBAL GROWTH & INCOME FUND

FINANCIAL HIGHLIGHTS (cont'd)

- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
CLASS B
----------------------------------------------------------
YEAR ENDED OCTOBER 31,
----------------------------------------------------------
1997 (D) 1996 1995 1994 1993 (D)
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 7.11 $ 6.35 $ 6.21 $ 6.29 $ 5.28
---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income................. 0.16 0.17 0.20 0.18 0.20
Net realized and unrealized gain
(loss) on investments................ 1.13 0.82 0.13 (0.03) 1.05
---------- ---------- ---------- ---------- ----------
Net increase from investment
operations......................... 1.29 0.99 0.33 0.15 1.25
---------- ---------- ---------- ---------- ----------
Distributions to shareholders:
From net investment income............ (0.17) (0.20) (0.18) (0.17) (0.20)
From net realized gain on
investments.......................... (0.02) (0.03) (0.01) (0.06) --
From sources other than net investment
income............................... -- -- -- -- (0.04)
---------- ---------- ---------- ---------- ----------
Total distributions................. (0.19) (0.23) (0.19) (0.23) (0.24)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period.......... $ 8.21 $ 7.11 $ 6.35 $ 6.21 $ 6.29
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------

Total investment return (c)............. 18.28% 16.06% 5.57% 2.48% 24.3%
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 456,893 $ 383,966 $ 356,796 $ 359,242 $ 150,768
Ratio of net investment income to
average net assets..................... 2.09% 2.52% 3.20% 2.65% 2.6%
Ratio of expenses to average net assets:
With expense reductions (Notes 1 &
5)................................... 2.15% 2.24% 2.35% 2.32% 2.5%
Without expense reductions............ 2.29% 2.31% 2.39% N/A N/A
Portfolio turnover rate++............... 50% 39% 83% 117% 24%
Average commission rate per share paid
on portfolio transactions++............ $ 0.0151 $ 0.0139 N/A N/A N/A

<CAPTION>
ADVISOR CLASS+
----------------------------------------
YEAR JUNE 1, 1995
ENDED YEAR ENDED TO
OCTOBER 31, OCTOBER 31, OCTOBER 31,
1997 (D) 1996 1995
----------- ----------- -------------
<S> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 7.10 $ 6.35 $ 6.24
----------- ----------- -------------
Income from investment operations:
Net investment income................. 0.23 0.23 0.11
Net realized and unrealized gain
(loss) on investments................ 1.13 0.82 0.13
----------- ----------- -------------
Net increase from investment
operations......................... 1.36 1.05 0.24
----------- ----------- -------------
Distributions to shareholders:
From net investment income............ (0.24) (0.26) (0.13)
From net realized gain on
investments.......................... (0.02) (0.04) --
From sources other than net investment
income............................... -- -- --
----------- ----------- -------------
Total distributions................. (0.26) (0.30) (0.13)
----------- ----------- -------------
Net asset value, end of period.......... $ 8.20 $ 7.10 $ 6.35
----------- ----------- -------------
----------- ----------- -------------
Total investment return (c)............. 19.23% 17.19% 3.83%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 3,057 $ 3,085 $ 944
Ratio of net investment income to
average net assets..................... 3.09% 3.52% 4.20%(a)
Ratio of expenses to average net assets:
With expense reductions (Notes 1 &
5)................................... 1.15% 1.24% 1.35%(a)
Without expense reductions............ 1.29% 1.31% 1.39%(a)
Portfolio turnover rate++............... 50% 39% 83%
Average commission rate per share paid
on portfolio transactions++............ $0.0151 $ 0.0139 N/A
</TABLE>

- ----------------

The accompanying notes are an integral part of the financial statements.

F13
<PAGE>
GT GLOBAL GROWTH & INCOME FUND

NOTES TO
FINANCIAL STATEMENTS
October 31, 1997

- --------------------------------------------------------------------------------

1. SIGNIFICANT ACCOUNTING POLICIES
GT Global Growth & Income Fund ("Fund") is a separate series of G.T. Investment
Funds, Inc. ("Company"). The Company is organized as a Maryland corporation and
is registered under the Investment Company Act of 1940, as amended ("1940 Act"),
as a non-diversified, open-end management investment company. The Company has
thirteen series of shares in operation, each series corresponding to a distinct
portfolio of investments.

The Fund offers Class A, Class B, and Advisor Class shares, each of which has
equal rights as to assets and voting privileges. Class A and Class B each has
exclusive voting rights with respect to its distribution plan. Investment
income, realized and unrealized capital gains and losses, and the common
expenses of the Fund are allocated on a pro rata basis to each class based on
the relative net assets of each class to the total net assets of the Fund. Each
class of shares differs in its respective service and distribution expenses, and
may differ in its transfer agent, registration, and certain other class-specific
fees and expenses.

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Funds in the preparation of the
financial statements.

(A) PORTFOLIO VALUATION
The Fund calculates the net asset value of and completes orders to purchase,
exchange or repurchase Fund shares on each business day, with the exception of
those days on which the New York Stock Exchange is closed.

Equity securities are valued at the last sale price on the exchange on which
such securities are traded, or on the principal over-the-counter market on which
such securities are traded, as of the close of business on the day the
securities are being valued, or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined by, Chancellor LGT Asset
Management, Inc. ("the Manager") to be the primary market.

Fixed income investments are valued at the mean of representative quoted bid and
ask prices for such investments or, if such prices are not available, at prices
for investments of comparative maturity, quality and type; however, when the
Fund deems it appropriate, prices obtained for the day of valuation from a bond
pricing service will be used. Short-term investments are valued at amortized
cost adjusted for foreign exchange translation and market fluctuations, if any.

Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Company's Board of Directors.

Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Company's Board of Directors.

(B) FOREIGN CURRENCY TRANSLATION
The accounting records of the Fund are maintained in U.S. dollars. The market
values of foreign securities, currency holdings, and other assets and
liabilities are recorded in the books and records of the Fund after translation
to U.S. dollars based on the exchange rates on that day. The cost of each
security is determined using historical exchange rates. Income and withholding
taxes are translated at prevailing exchange rates when earned or incurred.

The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.

Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in the
value of assets and liabilities other than investments in securities at year
end, resulting from changes in exchange rates.

(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Fund, it is the Fund's
policy to always receive, as collateral, United States government securities or
other high quality debt securities of which the value, including accrued
interest, is at least equal to the amount to be repaid to the Fund under each
agreement at its maturity.

(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract

F14
<PAGE>
GT GLOBAL GROWTH & INCOME FUND

fluctuates with changes in currency exchange rates. The Forward Contract is
marked-to-market daily and the change in market value is recorded by the Fund as
an unrealized gain or loss. When the Forward Contract is closed, the Fund
records a realized gain or loss equal to the difference between the value at the
time it was opened and the value at the time it was closed. Forward Contracts
involve market risk in excess of the amounts shown in the Fund's "Statement of
Assets and Liabilities." The Fund could be exposed to risk if a counter party is
unable to meet the terms of the contract or if the value of the currency changes
unfavorably. The Fund may enter into Forward Contracts in connection with
planned purchases or sales of securities, or to hedge against adverse
fluctuations in exchange rates between currencies.

(E) OPTION ACCOUNTING PRINCIPLES
When the Fund writes a call or put option, an amount equal to the premium
received is included in the Fund's "Statement of Assets and Liabilities" as an
asset and an equivalent liability. The amount of the liability is subsequently
marked-to-market to reflect the current market value of the option. The current
market value of an option listed on a traded exchange is valued at its last bid
price, or, in the case of an over-the-counter option, is valued at the average
of the last bid prices obtained from brokers. If an option expires on its
stipulated expiration date or if the Fund enters into a closing purchase
transaction, a gain or loss is realized without regard to any unrealized gain or
loss on the underlying security, and the liability related to such option is
extinguished. If a written call option is exercised, a gain or loss is realized
from the sale of the underlying security and the proceeds of the sale are
increased by the premium originally received. If a written put option is
exercised, the cost of the underlying security purchased would be decreased by
the premium originally received. The Fund can write options only on a covered
basis, which, for a call, requires that the Fund hold the underlying security
and, for a put, requires the Fund to set aside cash, U.S. government securities,
or other liquid, high grade debt securities in an amount not less than the
exercise price or otherwise provide adequate cover at all times while the put
option is outstanding. The Fund may use options to manage its exposure to the
stock or bond market and to fluctuations in currency values or interest rates.

The premium paid by the Fund for the purchase of a call or put option is
included in the Fund's "Statement of Assets and Liabilities" as an investment
and subsequently "marked-to-market" to reflect the current market value of the
option. If an option which the Fund has purchased expires on the stipulated
expiration date, the Fund realizes a loss in the amount of the cost of the
option. If the Fund enters into a closing sale transaction, the Fund realizes a
gain or loss, depending on whether proceeds from the closing sale transaction
are greater or less than the cost of the option. If the Fund exercises a call
option, the cost of the securities acquired by exercising the call is increased
by the premium paid to buy the call. If the Fund exercises a put option, it
realizes a gain or loss from the sale of the underlying security, and the
proceeds from such sale are decreased by the premium originally paid.

The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Fund may forego the
opportunity of profit if the market value of the underlying security or index
increases and the option is exercised. The risk in writing a put option is that
the Fund may incur a loss if the market value of the underlying security or
index decreases and the option is exercised. In addition, there is the risk the
Fund may not be able to enter into a closing transaction because of an illiquid
secondary market.

(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract the
Fund is required to pledge to the broker an amount of cash or securities equal
to the minimum "initial margin" requirements of the exchange on which the
contract is traded. Pursuant to the contract, the Fund agrees to receive from or
pay to the broker an amount of cash equal to the daily fluctuation in value of
the contract. Such receipts or payments are known as "variation margin" and are
recorded by the Fund as unrealized gains or losses. When the contract is closed,
the Fund records a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the value at the time it was
closed. The potential risk to the Fund is that the change in value of the
underlying securities may not correlate to the change in value of the contracts.
The Fund may use futures contracts to manage its exposure to the stock or bond
market and to fluctuations in currency values or interest rates.

(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out basis, unless otherwise specified. Dividends are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Where a high
level of uncertainty exists as to collection, income is recorded net of all
withholding tax with any rebate recorded when received. The Fund may trade
securities on other than normal settlement terms. This may increase the risk if
the other to the transaction fails to deliver and causes the Fund to
subsequently invest at less advantageous prices.

(H) PORTFOLIO SECURITIES LOANED
At October 31, 1997, stocks with an aggregate value of approximately $51,986,675
were on loan to brokers. The loans were secured by cash collateral of
$54,846,747. For international securities, cash collateral is received by the
Fund against loaned securities in an amount at least equal to 105% of the market
value of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 103% of the market value of the loaned
securities during the period of the loan. For domestic securities, cash
collateral is received by the Fund against loaned securities in an amount at
least equal to 102% of the market value of the loaned securities at the
inception of each loan. This collateral must be maintained at not less than 100%
of the market value of the loaned securities during the period of the loan. For
the year ended October 31, 1997, the Fund

F15
<PAGE>
GT GLOBAL GROWTH & INCOME FUND

received $976,164 of income from securities lending which was used to offset the
Fund's custody and administrative expenses.

(I) TAXES
It is the policy of the Fund to meet the requirements for qualification as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended ("Code"). It is also the intention of the Fund to make distributions
sufficient to avoid imposition of any excise tax under Section 4982 of the Code.
Therefore, no provision has been made for Federal taxes on income, capital
gains, or unrealized appreciation of securities held, and excise tax on income
and capital gains.

(J) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by the Fund on the ex-date. Income
and capital gain distributions are determined in accordance with Federal income
tax regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments of income and gains
on various investment securities held by the Fund and timing differences.

(K) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investment of domestic origin. The Fund's investments in emerging market
countries may involve greater risks than investments in more developed markets
and the price of such investments may be volatile. These risks of investing in
foreign and emerging markets may include foreign currency exchange rate
fluctuations, perceived credit risk, adverse political and economic developments
and possible adverse foreign government intervention.

(L) INDEXED SECURITIES
The Fund may invest in indexed securities whose value is linked either directly
or indirectly to changes in foreign currencies, interest rates, equities,
indices, or other reference instruments. Indexed securities may be more volatile
than the reference instrument itself, but any loss is limited to the amount of
the original investment.

(M) RESTRICTED SECURITIES
The Fund is permitted to invest in privately placed restricted securities. These
securities may be resold in transactions exempt from registration or to the
public if the securities are registered. Disposal of these securities may
involve time-consuming negotiations and expense, and prompt sale at an
acceptable price may be difficult.

(N) LINE OF CREDIT
The Fund, along with certain other funds ("GT Funds") advised or administered by
the Manager, has a line of credit with each of BankBoston and State Street Bank
& Trust Company. The arrangements with the banks allow the Fund and the GT Funds
to borrow an aggregate maximum amount of $200,000,000. The Fund is limited to
borrowing up to 33 1/3% of the value of each Fund's total assets. On October 31,
1997, the Fund had no loan outstanding.

For the year ended October 31, 1997, the weighted average outstanding daily
balance of bank loans (based on the number of days the loans were outstanding)
for the Fund was $2,560,909, with a weighted average interest rate of 6.41%.
Interest expense for the Fund for the year ended October 31, 1997 was $5,014,
included in "Other Expenses" on the Statement of Operations.

2. RELATED PARTIES
Chancellor LGT Asset Management, Inc., is the Funds' investment manager and
administrator. The Fund pays investment management and administration fees to
the Manager at the annualized rate of 0.975% on the first $500 million of
average daily net assets of the Fund; 0.95% on the next $500 million; 0.925% on
the next $500 million and 0.90% on amounts thereafter. These fees are computed
daily and paid monthly.

GT Global , Inc. ("GT Global"), an affiliate of the Manager, serves as the
Fund's distributor. The Fund offers Class A, Class B, and Advisor Class shares
for purchase.

Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Fund's current
prospectus. GT Global collects the sales charges imposed on sales of Class A
shares, and reallows a portion of such charges to dealers through which the
sales are made. For the year ended October 31, 1997, GT Global retained $52,850
of such sales charges. Purchases of Class A shares exceeding $500,000 may be
subject to a contingent deferred sales charge ("CDSC") upon redemption, in
accordance with the Fund's current prospectus. GT Global collected CDSCs in the
amount of $32 for the year ended October 31, 1997. GT Global also makes ongoing
shareholder servicing and trail commission payments to dealers whose clients
hold Class A shares.

Class B shares are not subject to initial sales charges. When Class B shares are
sold, GT Global from its own resources pays commissions to dealers through which
the sales are made. Certain redemptions of Class B shares made within six years
of purchase are subject to CDSCs, in accordance with the Fund's current
prospectus. For the year ended October 31, 1997 GT Global collected CDSCs in the
amount of $1,199,605. In addition, GT Global makes ongoing shareholder servicing
and trail commission payments to dealers whose clients hold Class B shares.

Pursuant to Rule 12b-1 under the 1940 Act, the Company's Board of Directors has
adopted separate distribution plans with respect to the Fund's Class A shares
("Class A Plan") and Class B shares ("Class B Plan"), pursuant to which the Fund
reimburses GT Global for a portion of its shareholder servicing and distribution
expenses. Under the Class A Plan, the Fund may pay GT Global a service fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class A shares for GT Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay GT Global a distribution fee at
the annualized rate of up to 0.35% of the average daily net assets of the Fund's
Class A shares, less any amounts paid by the Fund as the aforementioned service
fee, for GT Global's expenditures incurred in providing services as distributor.
All expenses for which GT Global is reimbursed under the Class A Plan will have
been incurred within one year of such reimbursement.

F16
<PAGE>
GT GLOBAL GROWTH & INCOME FUND

Pursuant to the Fund's Class B Plan, the Fund may pay GT Global a service fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class B shares for GT Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay GT Global a distribution fee at
the annualized rate of up to 0.75% of the average daily net assets of the Fund's
Class B shares for GT Global's expenditures incurred in providing services as
distributor. Expenses incurred under the Class B Plan in excess of 1.00%
annually may be carried forward for reimbursement in subsequent years as long as
that Plan continues in effect.

The Manager and GT Global voluntarily have undertaken to limit the Fund's
expenses (exclusive of brokerage commissions, taxes, interest, and extraordinary
expenses) to the maximum annual rate of 1.85%, 2.50%, and 1.50% of the average
daily net assets of the Fund's Class A, Class B, and Advisor Class shares,
respectively. If necessary, this limitation will be effected by waivers by the
Manager of investment management and administration fees, waivers by GT Global
of payments under the Class A Plan and/or Class B Plan and/or reimbursements by
the Manager or GT Global of portions of the Fund's other operating expenses.

Effective November 1, 1997, the Manager and GT Global have undertaken to limit
each Fund's expenses (exclusive of brokerage commissions, taxes, interest, and
extraordinary expenses) to the annual rate of 1.75%, 2.40% and 1.40% of the
average daily net assets of the Fund's Class A, Class B and Advisor Class
shares, respectively. This undertaking may be changed or eliminated in the
future.

GT Global Investor Services, Inc. ("GT Services"), an affiliate of the Manager
and GT Global, is the transfer agent of the Fund. For performing shareholder
servicing, reporting, and general transfer agent services, GT Services receives
an annual maintenance fee of $17.50 per account, a new account fee of $4.00 per
account, a per transaction fee of $1.75 for all transactions other than
exchanges and a per exchange fee of $2.25. GT Services also is reimbursed by the
Fund for its out-of-pocket expenses for such items as postage, forms, telephone
charges, stationery and office supplies.

The Manager is the pricing and accounting agent for the Fund. The monthly fee
for these services to the Manager is a percentage, not to exceed 0.03% annually,
of the Fund's average daily net assets. The annual fee rate is derived by
applying 0.03% to the first $5 billion of assets of all registered mutual funds
advised by the Manager and 0.02% to the assets in excess of $5 billion and
allocating the result according to the Fund's average daily net assets.

The Company pays each of its Directors who is not an employee, officer or
director of the Manager, GT Global or GT Services $5,000 per year plus $300 for
each meeting of the board or any committee thereof attended by the Director.

3. PURCHASES AND SALES OF SECURITIES
For the year ended October 31, 1997, purchases and sales of investment
securities by the Fund, other than short-term investments and U.S. government
obligations, aggregated $322,737,917 and $326,736,141, respectively. Purchases
and sales of U.S. government obligations were $32,891,598 and $17,886,577,
respectively, for the year ended October 31, 1997.

4. CAPITAL SHARES
At October 31, 1997, there were 6,000,000,000 shares of the Company's common
stock authorized, at $0.0001 par value. Of this amount, 200,000,000 were
classified as shares of the Fund; 400,000,000 were classified as shares of GT
Global Government Income Fund; 200,000,000 were classified as shares of GT
Global Developing Markets Fund; 200,000,000 were classified as shares of GT
Global Health Care Fund; 200,000,000 were classified as shares of GT Global
Strategic Income Fund; 200,000,000 were classified as shares of GT Global
Currency Fund (inactive); 200,000,000 were classified as shares of GT Latin
America Growth Fund; 200,000,000 were classified as shares of GT Global Small
Companies Fund (inactive); 400,000,000 were classified as shares of GT Global
Telecommunications Fund; 200,000,000 were classified as shares of GT Global
Emerging Markets Fund; 200,000,000 were classified as shares of GT Global
Financial Services Fund; 200,000,000 were classified as shares of GT Global
Natural Resources Fund; 200,000,000 were classified as shares of GT Global
Infrastructure Fund; 200,000,000 were classified as shares of GT Global High
Income Fund; and 200,000,000 were classified as shares of GT Global Consumer
Products and Services Fund. The shares of each of the foregoing series of the
Company were divided equally into two classes, designated Class A and Class B
common stock. With respect to the issuance of Advisor Class shares, 100,000,000
shares were classified as shares of each of the fifteen series of the Company
and designated as Advisor Class common stock. 1,100,000,000 shares remain
unclassified. Transactions in capital shares of the Fund were as follows:

F17
<PAGE>
GT GLOBAL GROWTH & INCOME FUND

CAPITAL SHARE TRANSACTIONS

YEAR ENDED YEAR ENDED
OCTOBER 31, 1997 OCTOBER 31, 1996
------------------------- -------------------------
CLASS A SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------- ----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Shares sold.................................................... 37,585,791 $289,617,397 21,196,018 $143,350,526
Shares issued in connection with reinvestment of
distributions................................................ 935,467 7,161,559 1,500,319 9,894,388
----------- ------------ ----------- ------------
38,521,258 296,778,956 22,696,337 153,244,914
Shares repurchased............................................. (43,156,190) (332,338,391) (27,157,086) (182,477,096)
----------- ------------ ----------- ------------
Net decrease................................................... (4,634,932) $(35,559,435) (4,460,749) $(29,232,182)
----------- ------------ ----------- ------------
----------- ------------ ----------- ------------

YEAR ENDED YEAR ENDED
OCTOBER 31, 1997 OCTOBER 31, 1996
------------------------- -------------------------
CLASS B SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------- ----------- ------------ ----------- ------------
Shares sold.................................................... 12,634,686 $ 97,336,518 9,561,545 $ 63,970,280
Shares issued in connection with reinvestment of
distributions................................................ 1,087,287 8,343,350 1,656,409 10,934,244
----------- ------------ ----------- ------------
13,721,973 105,679,868 11,217,954 74,904,524
Shares repurchased............................................. (12,063,889) (93,059,122) (13,373,837) (89,395,191)
----------- ------------ ----------- ------------
Net increase (decrease)........................................ 1,658,084 $ 12,620,746 (2,155,883) $(14,490,667)
----------- ------------ ----------- ------------
----------- ------------ ----------- ------------

YEAR ENDED YEAR ENDED
OCTOBER 31, 1997 OCTOBER 31, 1996
------------------------- -------------------------
ADVISOR CLASS SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------- ----------- ------------ ----------- ------------
Shares sold.................................................... 3,177,501 $ 24,442,634 1,416,928 $ 9,616,882
Shares issued in connection with reinvestment of
distributions................................................ 9,792 74,879 10,469 69,359
----------- ------------ ----------- ------------
3,187,293 24,517,513 1,427,397 9,686,241
Shares repurchased............................................. (3,248,879) (24,964,241) (1,141,817) (7,697,368)
----------- ------------ ----------- ------------
Net increase (decrease)........................................ (61,586) $ (446,728) 285,580 $ 1,988,873
----------- ------------ ----------- ------------
----------- ------------ ----------- ------------
</TABLE>

5. EXPENSE REDUCTIONS
The Manager directed certain portfolio trades to brokers who paid a portion of
the Fund's expenses. For the period ended October 31, 1997, the Fund's expenses
were reduced by $33,680 under these arrangements.

- --------------
FEDERAL TAX INFORMATION (UNAUDITED):
Pursuant to Section 852 of the Internal Revenue Code, the Fund designates
$1,489,466 as a capital gain dividend for the fiscal year ended October 31,
1997.

Pursuant to Section 854 of the Internal Revenue Code, the Fund designates 76% of
the ordinary income dividends paid (including short-term capital gain
distributions, if any) as income qualifying for the corporate dividends received
deduction for the fiscal year ended October 31, 1997.

F18
<PAGE>
GT GLOBAL GROWTH & INCOME FUND

NOTES

- --------------------------------------------------------------------------------
<PAGE>
GT GLOBAL GROWTH & INCOME FUND

GT GLOBAL FUNDS

GT GLOBAL OFFERS A BROAD RANGE OF FUNDS TO COMPLEMENT MANY INVESTORS'
PORTFOLIOS. FOR MORE INFORMATION AND A PROSPECTUS ON ANY OF THE GT GLOBAL
FUNDS, PLEASE CONTACT YOUR INVESTMENT ADVISER OR CALL GT GLOBAL DIRECTLY AT
1-800-824-1580. THE PROSPECTUS CONTAINS MORE COMPLETE INFORMATION, INCLUDING
CHARGES, EXPENSES AND THE RISKS OF GLOBAL AND EMERGING MARKET INVESTING.
INVESTORS SHOULD READ THE PROSPECTUS CAREFULLY BEFORE INVESTING.

GROWTH FUNDS

/ / GLOBALLY DIVERSIFIED FUNDS

GT GLOBAL NEW DIMENSION FUND
Captures global growth opportunities by investing directly in the six GT Global
Theme 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

GT GLOBAL DEVELOPING MARKETS FUND
Invests in debt and equity securities of developing market issuers

/ / GLOBAL THEME FUNDS

GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
Focuses on worldwide opportunities from the demand for consumer products and
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 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 MID CAP GROWTH FUND
Concentrates on medium-sized companies in the U.S.

GT GLOBAL AMERICA VALUE FUND
Focuses 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 securities

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

GT GLOBAL FLOATING RATE FUND
Invests primarily in senior secured floating rate loans with the potential to
achieve a high level of current income

MONEY MARKET FUND

GT GLOBAL DOLLAR FUND
Invests in high-quality, U.S. dollar-denominated money market securities
worldwide for stability and preservation of capital

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THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENT PROSPECTUS.
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GT Global, Inc.
Fifty California Street
27th Floor
San Francisco, California
94111-4624

DATED MATERIAL
PLEASE EXPEDITE

GT Global Growth & Income Fund
G&IAR712XXXMER.674
December, 1997