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GT GLOBAL INCOME FUNDS
SUPPLEMENT TO PROSPECTUS DATED MARCH 1, 1998
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THE FOLLOWING SUPPLEMENTS, AS APPLICABLE, THE DISCUSSION UNDER "INVESTMENT
OBJECTIVES AND POLICIES," "HOW TO INVEST," "MANAGEMENT" AND "OTHER INFORMATION"
WITH RESPECT TO G.T. INVESTMENT FUNDS, INC. (THE "COMPANY"), GLOBAL HIGH INCOME
PORTFOLIO (THE "PORTFOLIO") AND EACH FUND:
On January 30, 1998, Liechtenstein Global Trust, AG ("LGT"), the indirect parent
organization of GT Global, Inc. and Chancellor LGT Asset Management, Inc.
("Chancellor LGT"), entered into an agreement with AMVESCAP PLC ("AMVESCAP")
pursuant to which AMVESCAP will acquire LGT's Asset Management Division, which
includes Chancellor LGT (the "Purchase"). AMVESCAP is a holding company formed
in 1997 by the merger of INVESCO PLC and A I M Management Group Inc.
Consummation of the purchase is subject to a number of contingencies, including
regulatory approvals. The transaction would constitute an assignment of, and
thereby result in the termination of, the Company's investment management
agreement with Chancellor LGT. Accordingly, the Portfolio's Board of Trustees
and the Company's Board of Directors has approved, subject to shareholder
approval, new investment management and administration agreements between A I M
Advisors, Inc. ("A I M"), a wholly-owned subsidiary of AMVESCAP, and the
Portfolio or Company, as applicable, and sub-advisory and sub-administration
agreements between A I M and Chancellor LGT, which will become a separate,
indirect wholly-owned subsidiary of AMVESCAP. Under the new agreements, A I M
would serve as investment manager and administrator and Chancellor LGT would
serve as investment sub-adviser and sub-administrator of the Portfolio or
Company, as applicable. In addition to shareholder approval, implementation of
the new investment advisory arrangements is contingent upon the consummation of
the Purchase.
The Board of Directors of the Company has also approved the following matters,
subject to shareholder approval:
1. The adoption of compensation-type Rule 12b-1 plans of distribution for each
Fund that would replace each Fund's current reimbursement-type Rule 12b-1
plans of distribution.
2. Amendments to the fundamental investment restrictions of each Fund.
3. The reorganization of the Company from a Maryland corporation into a
Delaware business trust.
In addition, the Board has approved new distribution agreements for the Funds
pursuant to which A I M Distributors, Inc. ("A I M Distributors"), a
wholly-owned subsidiary of A I M, would serve as each Fund's principal
underwriter. In connection with the appointment of A I M Distributors as each
Fund's principal underwriter, each Fund's Class A shares would be sold subject
to a sales charge determined in accordance with the following amended schedule:
<TABLE>
<CAPTION>
INVESTOR'S SALES CHARGE DEALER CONCESSION
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AMOUNT OF AS A PERCENTAGE OF AS A PERCENTAGE OF AS A PERCENTAGE OF
INVESTMENT IN THE PUBLIC THE NET AMOUNT THE PUBLIC
SINGLE TRANSACTION OFFERING PRICE INVESTED OFFERING PRICE
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<S> <C> <C> <C>
Less than $50,000............................... 4.75% 4.99% 4.00%
$50,000 but less than $100,000.................. 4.00 4.17 3.25
$100,000 but less than $250,000................. 3.75 3.90 3.00
$250,000 but less than $500,000................. 2.50 2.56 2.00
$500,000 but less than $1,000,000*.............. 2.00 2.04 1.60
</TABLE>
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* Purchases of $1,000,000 or more will be at net asset value, subject to a
contingent deferred sales charge of 1% if shares are redeemed prior to 18
months from the date such shares were purchased.
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Implementation of the new distribution arrangements is contingent upon (1)
shareholder approval of the new investment advisory arrangements and the new
Rule 12b-1 plans; and (2) the consummation of the Purchase.
A special meeting of shareholders of the Company will be held on May 20, 1998 to
consider and vote on, among other proposals, the matters noted above that
require shareholder approvals. If the matters are approved by shareholders and
the Purchase consummated, it is anticipated that the changes described above
will become effective on or about June 1, 1998.
THE FOLLOWING REVISES AND SUPERSEDES THE DISCLOSURE ABOUT MORTGAGE-BACKED AND
ASSET-BACKED SECURITIES UNDER "INVESTMENT OBJECTIVES AND POLICIES" WITH RESPECT
TO GT GLOBAL GOVERNMENT INCOME FUND ("GLOBAL GOVERNMENT INCOME FUND") AND GT
GLOBAL STRATEGIC INCOME FUND ("STRATEGIC INCOME FUND"):
The Global Government Income Fund and the Strategic Income Fund may invest in
mortgage-backed and asset-backed securities of U.S. and foreign issuers,
including privately issued mortgage-backed and asset-backed securities.
Mortgage-backed securities represent direct or indirect interests in pools of
underlying mortgage loans that are secured by real property. Investors typically
receive payments out of the interest on and principal of the underlying
mortgages. Asset-backed securities are similar to mortgage-backed securities,
except that the underlying assets are other financial assets or financial
receivables, such as motor vehicle installment sales contracts, home equity
loans, leases of various types of real and personal property, and receivables
from credit cards. Any mortgage-backed and asset-backed securities purchased by
the Global Government Income Fund and the Strategic Income Fund will be subject
to the same rating requirements that apply to its other investments. In
addition, privately issued mortgage-backed and asset-backed securities purchased
by Global Government Income Fund will be subject to the limitation of that Fund
which allows no more than 35% of its total assets to be invested in securities
of non-governmental issuers.
THE FOLLOWING SUPPLEMENTS THE DISCLOSURE ABOUT MORTGAGE-BACKED AND ASSET-BACKED
SECURITIES UNDER "RISK FACTORS" WITH RESPECT TO GLOBAL GOVERNMENT INCOME FUND
AND STRATEGIC INCOME FUND:
Foreign mortgage-backed securities markets are substantially smaller than U.S.
markets, but have been established in several countries, including Germany,
Denmark, Sweden, Canada and Australia, and may be developed elsewhere. Foreign
mortgage-backed securities generally are structured similar to domestic
mortgage-backed securities, and they normally present substantially similar
investment risks as well as the other risks normally associated with foreign
securities.
THE FOLLOWING REVISES AND SUPERSEDES, AS APPLICABLE, THE DISCUSSION UNDER
"MANAGEMENT" WITH RESPECT TO GLOBAL GOVERNMENT INCOME FUND AND THE PORTFOLIO:
David B. Hughes has been named a Portfolio Manager for the Global Government
Income Fund. Mr. Hughes has been Head of Global Fixed Income, North America, for
Chancellor LGT since January 1998, and was a Senior Portfolio Manager for
global/international fixed income for Chancellor LGT from July 1995 to December
1997. Prior thereto, Mr. Hughes was an Assistant Vice President for Fiduciary
Trust Company International from 1994 to 1995, and Assistant Treasurer at the
Bankers Trust Company from 1991 to 1994. Cheng-Hock Lau remains the other
Portfolio Manager for the Global Government Income Fund.
Craig Munro has been named a Portfolio Manager for the Portfolio. Mr. Munro has
been a Portfolio Manager for Chancellor LGT since August 1997. Prior thereto,
Mr. Munro was a Vice President, Senior Analyst in the Emerging Markets Group of
the Global Fixed Income Division of Merrill Lynch Asset Management from 1993 to
August 1997. Mr. Lau and Mr. Mabbutt remain the other Portfolio Managers for the
Portfolio.
On October 31, 1996, Chancellor Capital Management, Inc. ("Chancellor Capital")
merged with LGT Asset Management, Inc., and the resulting entity was renamed
Chancellor LGT Asset Management, Inc. Mr. Hughes was an employee only of
Chancellor Capital prior to October 31, 1996.
INCST803M March 25, 1998
