<PAGE>
GT GLOBAL
OVER 25 YEARS
OF INVESTING
WORLDWIDE
/ /
GT GLOBAL
LATIN AMERICA
GROWTH 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 LATIN AMERICA GROWTH 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 LATIN AMERICA GROWTH FUND
Performance Summary
INVESTMENT OBJECTIVE
Seeks capital appreciation by investing primarily in securities of a broad
range of Latin American issuers.
GT Global MSCI Emerging IFCI Investable
Latin America Latin America Latin America
Growth Fund Index
8/13/91 9525 10000 10000
9952 11079 11026
10085 10995 10863
10965 11789 12213
10771 11110 11740
11421 12582 13423
12892 14614 15650
13658 15986 16523
13665 17163 16566
13893 17149 16758
14014 17417 16832
11864 14150 13572
11891 14403 13664
11025 13266 12917
10131 12858 12366
10474 13849 12914
10648 13888 12823
11156 14724 13886
11200 14416 13479
11164 14302 13350
11810 15350 14486
11628 14620 13951
11773 14845 14138
12100 15814 14918
12499 16273 15346
13494 17674 16690
13668 17902 16962
14357 18553 18109
15047 19840 19492
17063 22423 22322
18958 25938 25319
18730 25087 24168
17454 23303 22547
15588 21544 20893
15972 22771 21986
15131 21242 20299
7/31/94 16326 23090 22241
19076 26834 25912
19828 27916 27063
19253 26543 25482
19150 25793 25036
15930 21597 20232
13279 19130 17015
11784 16244 14548
10997 15695 14113
12484 18027 16331
12547 18378 16374
12862 18684 16716
13373 19340 17612
13554 19578 17861
13176 19389 17633
12099 17785 15952
12052 18101 16505
12531 18674 16823
13672 20606 18405
12990 19420 17433
13347 19674 17712
13862 20753 18644
14313 21410 19132
14266 21941 19473
13577 21071 18614
14020 21677 19119
14392 22158 19489
14218 21932 19126
14353 22118 19212
14662 22776 19719
15541 24991 21536
16333 26636 22944
16056 26232 22702
16301 27507 23650
17196 29443 25558
18456 31999 27610
19422 33845 29139
17387 30647 26609
18971 33564 28851
10/31/97 15430 27153 23480
The chart above shows the performance of the GT Global Latin America Growth
Fund, Class A shares, since the Fund's inception, versus various indices.
This represents a cumulative return of 54.30% and an average annual total
return of 7.23% 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 April 1, 1993, would have been valued
at $12,614 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 complete redemption at the end of
the period. A $10,000 investment in Advisor Class shares at inception on June
1, 1995, would have been worth $12,425 on October 31, 1997.
AVERAGE ANNUAL TOTAL RETURNS%(1)
October 31, 1997
<TABLE>
<CAPTION>
Share Class Without Sales Charge(2) With Sales Charge
1-Year 5-Year Life of Fund 1-Year 5-Year Life of Fund
<S> <C> <C> <C> <C> <C> <C>
Class A(3) 8.52 8.06 8.07 3.37 7.01 7.23
Class B(3) 8.04 N/A 5.56 3.04 N/A 5.20
Advisor Class(4) 8.91 N/A 9.39 N/A N/A N/A
</TABLE>
HISTORICAL PERFORMANCE%(2)
Annual Returns (per calendar year)
1991 1992 1993 1994 1995 1996
Class A 19.91(3) (2.32) 52.94 (6.64) (21.34) 17.00
Class B N/A N/A 44.28(3) (7.12) (21.70) 16.47
(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 August 13, 1991; Class B shares commenced on
April 1, 1993.
(4) The Fund began offering Advisor Class shares on June 1, 1995. Advisor
Class shares are not sold directly to the general public and are only
available through certain employee benefit plans, financial institutions and
other entities that have entered into specific agreements with GT Global.
Please see the "Alternative Purchase Plan" section in the Fund's prospectus.
The above data represent past performance of the Fund's shares, which does
not guarantee future results. The investment return and principal value of an
investment in the Fund will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
2
<PAGE>
GT GLOBAL LATIN AMERICA GROWTH FUND
INTERVIEW WITH PORTFOLIO MANAGER
DAVID MANUEL
As part of our commitment to enhance Fund performance, we have recently
appointed David Manuel as a Portfolio Manager for the Latin America Growth
Fund. Mr. Manuel joins us from Abbey Life Investment Services where he spent
a total of 10 years, the latter three of which were in the capacity of Head
of Latin American Equities. He received his PhD from London University and
his B.A. from Cambridge University.
The Fund has been undergoing significant restructuring in conjunction with a
revamping of our approach to managing emerging market products. Under the new
structure, Latin America Growth Fund managers and dedicated analysts are
members of a team based in London.
Q HOW DID THE FUND PERFORM?
A After an encouraging start, performance of the Latin American markets ended
the final month of the 12-month reporting period to October 31, 1997 on a
disappointing note. October was a particularly devastating month, as effects
of the Asian currency crisis were felt in the region. Against this backdrop,
the Fund's Class A shares returned a total of 8.52% (3.37% including the
maximum 4.75% sales charge); total return for the Fund's Class B shares was
8.04% (3.04% including the maximum 5% contingent deferred sales charge). The
Morgan Stanley Capital International (MSCI) Emerging Latin America Index
returned 23.80%, and the International Finance Corporation (IFC)(5) Investable
Latin America Index returned 22.78% over the same period.
While the Fund's underweighting in Chile contributed positively to
performance against the indices, poor stock selection in Brazil and Mexico
was primarily responsible for relative underperformance. Additionally, the
Fund was underweighted Brazil over the first nine months of the period, a
period in which the market was up close to 70% as measured by the IFC Index.
Within Brazil the Fund was underweighted the parastatal (state owned)
companies which performed exceptionally well.
Most of the Fund's relative underperformance occurred in the first six months
of the period. Some of the evolutionary changes we discussed in the
semiannual report, such as enhanced risk control guidelines and more
disciplined stock selection, began exerting a positive influence toward the
end of the annual reporting period.
Q WHAT TRIGGERED THE DOWNTURN IN LATIN AMERICAN MARKETS OVER THE LAST SEVERAL
MONTHS?
A The initial trigger was a devaluation in the Thai currency in early July,
which highlighted the instability of its banking sector and many years of
excessive spending based on cheap dollar financings. While, in the beginning,
tremors were contained to Asia, in October the sudden sharp decline in the
Hong Kong market--a market previously considered immune to regional
malaise--prompted fears of a global meltdown. Even the U.S. suffered a severe
bout of volatility as investors fled to quality and liquidity. Meanwhile,
confidence in emerging equity markets was battered on a grand scale. This
effect was also evident in emerging bond markets, where spreads to U.S.
Treasuries widened dramatically, raising corporate and government borrowing
rates considerably.
Q WHAT ARE THE LONGER-TERM IMPLICATIONS OF ASIA'S TURMOIL FOR LATIN AMERICAN
MARKETS?
A Emerging markets have once again come under scrutiny, emphasizing the
importance of structural reform and political stability. As panic subsides,
we expect Latin America to decouple from events in Asia. A decade of reform
has delivered relatively stable growth and tame inflation in many Latin
American countries. True, our expectations are more modest than several
months ago but, despite the recent downturn, we are forecasting that the
region as a whole will
Continued p4
(5) The MSCI Emerging Latin America and IFC Investable Latin America indices
are market value-weighted averages of companies listed in Argentina,
Brazil, Chile, Colombia, Mexico, Peru and Venezuela. Both indices are
measured in U.S. dollars and include the effect of reinvested dividends.
The MSCI Emerging Latin America Index has an aggregate market
capitalization of $318.95 billion, and the IFC Investable Latin America
Index has an aggregate market capitalization of $267.9 billion. The Fund
has changed benchmarks to the IFC Investable Latin America Index because
we feel it presents a more accurate reflection of investment
opportunities for foreign investors.
Indices are unmanaged, not available for direct investment and do not incur
sales charges and professional management fees.
3
<PAGE>
INTERVIEW WITH THE PORTFOLIO MANAGER CONTINUED
turn in its best economic performance for a generation this year, with 1997
growth of around an average of 5.5% and inflation below 13%. Meanwhile, we
believe reform and privatization remain well entrenched in the region as a
whole. At the extreme, we think capital flows may take some time to recover,
as perceptions of risk have been altered and confidence remains fragile.
Q SPECIFICALLY, WHAT COMPANIES PERFORMED WELL?
A A number of the Fund's holdings performed exceptionally well over the
period. Strong market rallies in Brazil and Mexico, in particular,
contributed to impressive returns for Petrobras, Telebras and Eletrobras in
Brazil, and Alfa and San Luis in Mexico.
Brazil's Telebras has done well even taking into account October's plummet in
its share price--since the start of the year to October 31, Telebras enjoyed
a return of about 35%. We are generally pleased with the progress being made
in Brazil on regulatory reform and with the overall growth of the
telecommunications industry there--cellular growth has been remarkable and
even landline growth has been quite impressive.
Eletrobras, another privatization play, saw its share price strengthen
further with the introduction of a regulatory regime in the energy sector.
The Fund's other big performer in Brazil, Petrobras, has expanded exploration
activities and experienced vast growth in its oil reserves.
KEY MARKETS
BRAZIL
In Brazil's case, the turmoil in Southeast Asian currency markets intensified
concerns about overvaluation of the real, which have been looming for some
time. However, while Brazil may share some characteristics with economies
whose currency regimes have come under attack, Brazil's rapid reaction to
investor flight by dramatically raising interest rates provides some
assurance about the strength of their commitment to currency stability and
low inflation. Higher interest rates, in our opinion, will most certainly
impact near-term growth, yet, reassuringly, the government seems to recognize
that mitigating currency uncertainties remains critical to long-term economic
success.
Effects of higher interest rates on the private sector remain to be seen,
leading us to stay cautious for the present. The state sector, on the other
hand, continues to be compelling as renewed momentum of the reform process
and privatization are seemingly back on track. Indeed, the critical component
of this equation will be the time it takes for interest rates to fall to
normal levels. In the meantime, we believe one result of lower economic
activity should be a reduction in the level of imports and redirection of
sales to the export market, which would give some needed relief to the
current account deficit.
ARGENTINA
Supported by its currency peg to the U.S. dollar, the Argentine economy has
proved flexible and resilient since the recession of 1995. With roughly 28%
of its exports destined for Brazil, Argentina's trade balance is closely
correlated with Brazil's, both in sentiment and economic impact, although
exports remain a small percentage of GDP. Thus, of all regional markets,
Argentina stands to bear most of the impact of any slowdown in Brazil. We
believe the key for Argentina, like Brazil, will be the rate at which
interest rates return to normal levels. With current uncertainties in mind,
we remain underweighted relative the IFC Investable Latin America Index.
MEXICO
While events in Asia soured investor sentiment here too, Mexico has been the
least affected of all the Latin American markets. Indeed, confidence in the
economy and its growth prospects has given Mexico regional safe haven status.
In October 1997, fundamental economic news regarding GDP and industrial
production received a warm welcome--both exceeded expectations; the economy
grew 7.3% in the first nine months of the year, while industrial production
rose 13.1% year-on-year to the end of September. Led by manufacturing and
construction, industrial production was much higher than the consensus
expectation of 8.7%.
Moreover, with the U.S. as its largest trading partner (nearly 85% of exports
are bound for the U.S.), we expect Mexico to continue to benefit from steady,
relatively low inflationary growth in the U.S., particularly since concerns
of peso overvaluation were quickly mitigated in late October. In light of our
expectations of a solid uptrend in economic growth and currently relatively
cheap valuations, we remain modestly overweighted in Mexico.
Continued p.5
4
<PAGE>
GT GLOBAL LATIN AMERICA GROWTH FUND
LATIN AMERICA AT A GLANCE
GEOGRAPHIC ALLOCATION OF NET ASSETS%
October 31 October 31
1997 1996
Argentina 4.2 6.9
Bolivia -- 3.0
Brazil 34.3 36.2
Chile 13.4 7.4
Colombia N/A 0.3
Mexico 32.0 26.2
Panama 1.2 1.5
Peru 2.8 3.3
United States & Other 5.7 6.8
Venezuela 6.4 8.4
Allocations may change as market conditions change.
CHILE
Chile's relationship with Asia has been a source of concern for investors.
However, while 40% percent of its trade goes to Asia, exports are primarily
commodity based and alternate markets, in our opinion, should not be
difficult to find. We therefore believe the impact on Chile's trade balance
is limited to commodity price deflation and should not result in a reduction
in volumes of exports.
Meanwhile, valuations in Chile are currently trading lower than they have in
a number of years and are beginning to look attractive. Adding to the allure
are improving earnings prospects for Chilean companies, which are beginning
to derive significant benefit from their capital investments at home and
acquisitions abroad over recent years. Meanwhile, in an unprecedented
exercise of shareholder power, the chief executive officer of Latin America's
largest private-sector electricity firm was forced to resign after a revolt
by shareholders. While currently an isolated event, we believe it may
eventually represent a fundamental shift in accountability.
VENEZUELA
Thanks, in part, to growth in the oil sector over the past years and, in
part, to structural reforms, growth in Venezuela's non-oil economy is
beginning to accelerate. We are currently focusing on stocks we believe can
benefit from acceleration in domestic demand. As of October 31, 1997, the
Fund was overweighted in Venezuela relative to the IFC Investable Latin
America Index.
STOCK MARKET CAPITALIZATION (US$ BILLION)
October 31, 1997
Brazil 122.1
Mexico 94.7
Chile 36.3
Argentina 33.2
Venezuela 14.0
Peru 10.0
Colombia 8.7
Source: MSCI, October 1997
REAL GDP GROWTH
1997e
Argentina 8.0%
Mexico 7.3%
Peru 7.1%
Chile 5.9%
Venezuela 4.0%
Brazil 3.1%
Colombia 2.8%
Source: GT Global, Inc., October 1997
INFLATION (CONSUMER PRICE INDEX)
1997e
Venezuela 38.4%
Colombia 17.7%
Mexico 16.2%
Peru 7.0%
Chile 5.9%
Brazil 4.5%
Argentina 0%
Source: GT Global, Inc., October 1997
5
<PAGE>
ALLOCATION OF NET ASSETS
Consumer Durables 0.9%
Consumer Non-Durables 8.1%
Finance 9.9%
Multi Industry/Misc. 10.6%
Materials/Basic Industries 13.4%
Energy 24.6%
Services/Other 32.5%
Allocations may change as market conditions change. A complete listing may be
found in the Financial Statements section of this report.
<TABLE>
<CAPTION>
GT GLOBAL LATIN AMERICA GROWTH FUND % of
KEY PORTFOLIO HOLDINGS(6) Country Net Assets
<S> <C> <C>
TELEBRAS Operator of Brazil's local and long-distance services. The company Brazil 10.4
is currently state-controlled and scheduled for privatization in 1998.
ELETROBRAS Brazil's state-controlled holding company is responsible for the Brazil 4.7
planning, coordination and financing of the country's electric utility
sector. Its assets are primarily hydroelectric electricity generation plants
that collectively represent 47% of the country's generating capacity.
KIMBERLY-CLARK DE MEXICO, S.A. DE C.V. The largest manufacturer of diapers, Mexico 3.9
tissue paper, notebooks and paper in Mexico. The company's management is
conservative and has concentrated on lowering costs every year to retain its
competitive position in the marketplace.
ALFA, S.A. DE C.V. Operates several companies which manufacture various Mexico 3.4
products for industries in Mexico, including steel mills, an insulation
manufacturing plant, and a processor and distributor of meats and dairy
products. The company also has interests in petrochemical plants producing
textiles, and a manufacturer of aluminum autoparts and products.
PETROBRAS Produces oil and natural gas liquids through approximately 7,258 Brazil 3.1
producing wells and also produces at sea through its fixed and floating
platforms. The company's main products are oil products and fuel alcohol.
Petrobras also provides maritime freight services.
FOMENTO ECONOMICO MEXICANO, S.A. DE C.V. Produces and distributes soft drinks Mexico 3.1
and beer and operates retail stores. The company sells its beer in Mexico
and exports to 63 countries throughout the world.
GRUPO CARSO, S.A. DE C.V. A holding company with investments in many sectors, Mexico 2.9
including tobacco, mining, construction, auto parts, paper products and food
and beverages.
APASCO S.A. DE C.V. Operates mills throughout Mexico which manufacture cement Mexico 2.8
and ready-mixed concrete. The company markets its products to the engineering
and construction industries throughout Mexico. Apasco also operates mines
from which it produces limestone, silica sand, iron and gypsum.
C.A. LA ELECTRICIDAD DE CARACAS Generates electric power and other related Venezuela 2.5
services in Venezuela.
TELEFONOS DE MEXICO, S.A. Provides national and international long-distance Mexico 2.5
and local telephone service to 7,320 communities throughout Mexico. The
company also provides voice, data, image signal and cellular transmission
services.
</TABLE>
Source: Bloomberg, November 1997.
(6) There is no assurance the Fund will continue to hold these or any other
securities mentioned in this report.
6
<PAGE>
GT GLOBAL
LATIN AMERICA
GROWTH FUND
FINANCIAL
STATEMENTS
<PAGE>
GT GLOBAL LATIN AMERICA GROWTH FUND
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
ANNUAL REPORT
To the Shareholders of GT Global Latin America Growth Fund and Board of
Directors of G.T. Investment Funds, Inc.:
We have audited the accompanying statement of assets and liabilities of GT
Global Latin America Growth 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 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 Latin America Growth Fund as of October 31, 1997, the results of
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 LATIN AMERICA GROWTH FUND
PORTFOLIO OF INVESTMENTS
October 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Services (28.3%)
Telecomunicacoes Brasileiras S.A. (Telebras): ............. BRZL -- -- 10.4
TELEPHONE NETWORKS
ADR{\/} ................................................. -- 208,900 $ 21,203,350 --
Common .................................................. -- 106,900,000 9,502,114 --
Telefonos de Mexico, S.A. de C.V. "L" - ADR{\/} ........... MEX 170,500 7,374,125 2.5
TELEPHONE NETWORKS
Cifra, S.A. de C.V.: ...................................... MEX -- -- 2.3
RETAILERS-OTHER
"C" ..................................................... -- 3,340,500 5,800,868 --
"B" - ADR{\/} ........................................... -- 335,792 648,079 --
"A" ..................................................... -- 104,372 192,244 --
Compania Anonima Nacional Telefonos de Venezuela (CANTV) -
ADR{\/} .................................................. VENZ 147,400 6,448,750 2.2
TELEPHONE NETWORKS
Telefonica del Peru S.A. - ADR{\/} ........................ PERU 254,100 5,018,475 1.7
TELEPHONE NETWORKS
Companhia de Saneamento Basico do Estado de Sao Paulo -
SABESP-/- ................................................ BRZL 26,748,622 4,852,798 1.7
BUSINESS & PUBLIC SERVICES
Cia de Telecomunicaciones de Chile S.A. - ADR{\/} ......... CHLE 163,000 4,523,250 1.5
TELEPHONE NETWORKS
Telecomunicacoes de Sao Paulo S.A. (TELESP): .............. BRZL -- -- 1.2
TELEPHONE NETWORKS
Preferred ............................................... -- 11,109,390 2,902,308 --
Common-/- ............................................... -- 2,802,000 597,306 --
Santa Isabel S.A. - ADR{\/} ............................... CHLE 181,100 3,350,350 1.1
RETAILERS-FOOD
Telecomunicacoes do Rio de Janeiro S.A. (TELERJ)
Preferred ................................................ BRZL 34,694,581 3,304,546 1.1
TELEPHONE NETWORKS
Controladora Comercial Mexicana, S.A. de C.V.: ............ MEX -- -- 1.0
RETAILERS-FOOD
UBC ..................................................... -- 2,682,000 2,665,940 --
GDR{\/} ................................................. -- 13,900 276,263 --
Telefonica de Argentina S.A. - ADR{\/} .................... ARG 90,900 2,556,563 0.9
TELEPHONE NETWORKS
Grupo Televisa, S.A. de C.V. - GDR-/- {\/} ................ MEX 47,000 1,457,000 0.5
BROADCASTING & PUBLISHING
Supermercados Unimarc S.A. - ADR (Chile){\/} -/- .......... CHLE 33,000 495,000 0.2
RETAILERS-FOOD
------------
83,169,329
------------
Energy (24.6%)
Centrais Eletricas Brasileiras S.A. (Eletrobras): ......... BRZL -- -- 4.7
ELECTRICAL & GAS UTILITIES
"B" Preferred ........................................... -- 20,252,000 8,762,885 --
Common-/- ............................................... -- 11,999,000 4,843,573 --
Petroleo Brasileiro S.A. (Petrobras) Preferred ............ BRZL 48,642,000 9,045,365 3.1
OIL
C.A. La Electricidad de Caracas ........................... VENZ 5,672,038 7,456,318 2.5
ELECTRICAL & GAS UTILITIES
Light - Servicos de Electricidade S.A. .................... BRZL 17,602,000 5,843,915 2.0
ELECTRICAL & GAS UTILITIES
</TABLE>
The accompanying notes are an integral part of the financial statements.
F2
<PAGE>
GT GLOBAL LATIN AMERICA GROWTH 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>
Energy (Continued)
Enersis S.A. - ADR{\/} .................................... CHLE 174,500 $ 5,758,500 2.0
ELECTRICAL & GAS UTILITIES
Empresa Nacional de Electricidad S.A. - ADR{\/} ........... CHLE 254,300 5,117,788 1.7
ELECTRICAL & GAS UTILITIES
YPF S.A. - ADR{\/} ........................................ ARG 148,900 4,764,800 1.6
OIL
Companhia Energetica de Minas Gerais (CEMIG) - ADR{\/} .... BRZL 112,200 4,488,000 1.5
ELECTRICAL & GAS UTILITIES
Harken Energy Corp.-/- .................................... US 674,500 4,426,406 1.5
OIL
Chilgener S.A. - ADR{\/} .................................. CHLE 121,819 3,289,113 1.1
ELECTRICAL & GAS UTILITIES
Light - Participacoes S.A. ................................ BRZL 10,585,000 2,707,701 0.9
ELECTRICAL & GAS UTILITIES
Companhia Brasileira de Petroleo Ipiranga S.A.
Preferred ................................................ BRZL 173,785,000 2,522,279 0.9
OIL
Perez Companc S.A. "B" .................................... ARG 377,196 2,362,665 0.8
OIL
Compania Paulista de Forca e Luz .......................... BRZL 5,030,000 736,842 0.3
ELECTRICAL & GAS UTILITIES
------------
72,126,150
------------
Materials/Basic Industry (13.4%)
Kimberly-Clark de Mexico, S.A. de C.V. "A" ................ MEX 2,614,000 11,520,383 3.9
PAPER/PACKAGING
Apasco, S.A. de C.V. ...................................... MEX 1,331,000 8,129,461 2.8
CEMENT
Companhia Vale do Rio Doce Preferred ...................... BRZL 306,600 5,923,966 2.0
METALS - STEEL
Sociedad Quimica y Minera de Chile S.A. - ADR{\/} ......... CHLE 95,100 4,933,313 1.7
CHEMICALS
Grupo Industrial Minera Mexico "L" ........................ MEX 1,406,724 4,178,055 1.4
METALS - NON-FERROUS
Industrias Penoles S.A. (CP) .............................. MEX 978,200 3,895,228 1.3
METALS - NON-FERROUS
Corporacion Venezolana de Cementos, S.A.C.A.: ............. VENZ -- -- 0.3
CEMENT
"A" ..................................................... -- 347,758 704,225 --
"B" ..................................................... -- 161,928 324,987 --
------------
39,609,618
------------
Multi-Industry/Miscellaneous (10.6%)
Alfa, S.A. de C.V. "A" .................................... MEX 1,356,600 9,942,984 3.4
CONGLOMERATE
Grupo Carso, S.A. de C.V. "A1" ............................ MEX 1,357,000 8,629,545 2.9
MULTI-INDUSTRY
Sanluis Corporacion, S.A. de C.V.-/- ...................... MEX 830,200 6,442,750 2.2
CONGLOMERATE
Desc, S.A. de C.V. - ADR{\/} .............................. MEX 93,800 3,177,475 1.1
CONGLOMERATE
</TABLE>
The accompanying notes are an integral part of the financial statements.
F3
<PAGE>
GT GLOBAL LATIN AMERICA GROWTH 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>
Multi-Industry/Miscellaneous (Continued)
Empresas La Moderna, S.A. de C.V. "A"-/- .................. MEX 355,000 $ 1,743,114 0.6
MULTI-INDUSTRY
Commercial Del Plata-/- ................................... ARG 697,410 1,032,786 0.4
CONGLOMERATE
------------
30,968,654
------------
Finance (9.9%)
Uniao Bancos Brasileiras "A" Preferred .................... BRZL 247,114,000 6,271,997 2.1
BANKS-MONEY CENTER
Banco LatinoAmericano de Exportaciones S.A. (Bladex)
"E"{\/} .................................................. PAN 89,035 3,539,141 1.2
OTHER FINANCIAL
Banco BHIF - ADR-/-{\/} ................................... CHLE 195,500 3,396,813 1.2
BANKS-MONEY CENTER
Grupo Financiero Banorte "B"-/- ........................... MEX 2,279,000 3,138,743 1.1
BANKS-MONEY CENTER
Credicorp Ltd. - ADR{\/} .................................. PERU 140,320 2,516,990 0.9
BANKS-MONEY CENTER
Administradora de Fondos de Pensiones Provida S.A. -
ADR{\/} .................................................. CHLE 149,900 2,510,825 0.9
INVESTMENT MANAGEMENT
Banco Provincial S.A. ..................................... VENZ 1,196,992 2,390,332 0.8
BANKS-MONEY CENTER
Banco de A. Edwards - ADR{\/} ............................. CHLE 125,100 2,173,613 0.7
BANKS-MONEY CENTER
Banco Frances del Rio de la Plata S.A. - ADR{\/} .......... ARG 58,000 1,428,250 0.5
BANKS-MONEY CENTER
ARA, S.A. de C.V.-/- ...................................... MEX 230,000 848,383 0.3
REAL ESTATE
Banco Wiese - ADR{\/} ..................................... PERU 131,400 730,913 0.2
BANKS-MONEY CENTER
------------
28,946,000
------------
Consumer Non-Durables (8.1%)
Fomento Economico Mexicano, S.A. de C.V. "B" .............. MEX 1,274,500 9,005,449 3.1
BEVERAGES - ALCOHOLIC
Grupo Industrial Maseca, S.A. de C.V. "B" ................. MEX 4,980,000 4,830,898 1.6
FOOD
Companhia Cervejaria Brahma Preferred ..................... BRZL 6,838,000 4,279,949 1.5
BEVERAGES - ALCOHOLIC
Compania Cervecerias Unidas S.A. - ADR{\/} ................ CHLE 138,800 3,383,250 1.2
BEVERAGES - ALCOHOLIC
Mavesa S.A. - ADR{\/} ..................................... VENZ 147,500 1,106,250 0.4
FOOD
Sudamtex de Venezuela "B" - ADR{\/} ....................... VENZ 53,200 691,600 0.2
TEXTILES & APPAREL
Embotelladora Andina S.A. - ADR{\/} ....................... CHLE 15,000 360,000 0.1
BEVERAGES - NON-ALCOHOLIC
Cerveceria Backus & Johnston S.A. "T" ..................... PERU 75,905 69,463 --
BEVERAGES - ALCOHOLIC
------------
23,726,859
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F4
<PAGE>
GT GLOBAL LATIN AMERICA GROWTH 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>
Consumer Durables (0.9%)
Brasmotor S.A. Preferred .................................. BRZL 18,327,000 $ 2,576,819 0.9
APPLIANCES & HOUSEHOLD DURABLES
------------ -----
TOTAL EQUITY INVESTMENTS (cost $290,305,760) ................ 281,123,429 95.8
------------ -----
<CAPTION>
NO. OF VALUE % OF NET
RIGHTS COUNTRY RIGHTS (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Telecomunicacoes do Rio de Janeiro S.A. (TELERJ) Rights -
Preferred, expire 11/12/97 ............................... BRZL 1,689,830 22,993 --
TELEPHONE NETWORKS
Telecomunicacoes de Sao Paulo S.A. (TELESP) Rights, expire
11/12/97 ................................................. BRZL 513,280 466 --
TELEPHONE NETWORKS
------------ -----
TOTAL RIGHTS (cost $0) ...................................... 23,459 --
------------ -----
<CAPTION>
PRINCIPAL VALUE % OF NET
FIXED INCOME INVESTMENTS CURRENCY AMOUNT (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Corporate Bonds (0.0%)
Brazil (0.0%)
Companhia Vale do Rio Doce - Non Convertible (cost
$0) .................................................... BRL 276,400 -- --
------------ -----
TOTAL INVESTMENTS (cost $290,305,760) * .................... 281,146,888 95.8
Other Assets and Liabilities ................................ 12,433,174 4.2
------------ -----
NET ASSETS .................................................. $293,580,062 100.0
------------ -----
------------ -----
</TABLE>
- --------------
{\/} U.S. currency denominated.
-/- Non-income producing security.
* For Federal income tax purposes, cost is $290,596,548 and
appreciation (depreciation) is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $ 26,409,562
Unrealized depreciation: (35,859,222)
-------------
Net unrealized depreciation: $ (9,449,660)
-------------
-------------
</TABLE>
Abbreviations:
ADR--American Depository Receipt
GDR--Global Depository Receipt
The accompanying notes are an integral part of the financial statements.
F5
<PAGE>
GT GLOBAL LATIN AMERICA GROWTH 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}
-----------------------------
SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE) EQUITY & OTHER TOTAL
- -------------------------------------- ----- ------- -----
<S> <C> <C> <C>
Argentina (ARG/ARS) .................. 4.2 4.2
Brazil (BRZL/BRL) .................... 34.3 34.3
Chile (CHLE/CLP) ..................... 13.4 13.4
Mexico (MEX/MXN) ..................... 32.0 32.0
Panama (PAN/PND) ..................... 1.2 1.2
Peru (PERU/PES) ...................... 2.8 2.8
United States (US/USD) ............... 1.5 4.2 5.7
Venezuela (VENZ/VEB) ................. 6.4 6.4
----- ------- -----
Total ............................... 95.8 4.2 100.0
----- ------- -----
----- ------- -----
</TABLE>
- --------------
{d} Percentages indicated are based on net assets of $293,580,062.
The accompanying notes are an integral part of the financial statements.
F6
<PAGE>
GT GLOBAL LATIN AMERICA GROWTH FUND
STATEMENT OF ASSETS
AND LIABILITIES
October 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Assets:
Investments in securities, at value (cost $290,305,760) (Note 1)............................. $281,146,888
U.S. currency..................................................................... $ 924
Foreign currencies (cost $44,025)................................................. 44,033 44,957
---------
Receivable for Fund shares sold.............................................................. 14,119,361
Receivable for securities sold............................................................... 4,099,448
Dividends receivable......................................................................... 686,435
Miscellaneous receivable..................................................................... 19,727
-----------
Total assets............................................................................... 300,116,816
-----------
Liabilities:
Payable for loan outstanding (Note 1)........................................................ 3,238,000
Payable for Fund shares repurchased.......................................................... 2,418,769
Payable for investment management and administration fees (Note 2)........................... 305,562
Payable for service and distribution expenses (Note 2)....................................... 233,877
Payable for transfer agent fees (Note 2)..................................................... 174,161
Payable for printing and postage expenses.................................................... 87,242
Payable for professional fees................................................................ 37,498
Payable for custodian fees (Note 1).......................................................... 17,552
Payable for registration and filing fees..................................................... 5,729
Payable for Directors' fees and expenses (Note 2)............................................ 5,654
Payable for fund accounting fees (Note 2).................................................... 5,612
Other accrued expenses....................................................................... 7,098
-----------
Total liabilities.......................................................................... 6,536,754
-----------
Net assets..................................................................................... $293,580,062
-----------
-----------
Class A:
Net asset value and redemption price per share ($159,496,474 DIVIDED BY 8,177,513 shares
outstanding).................................................................................. $ 19.50
-----------
-----------
Maximum offering price per share (100/95.25 of $19.50) *....................................... $ 20.47
-----------
-----------
Class B:+
Net asset value and offering price per share ($133,448,007 DIVIDED BY 6,939,727 shares
outstanding).................................................................................. $ 19.23
-----------
-----------
Advisor Class:
Net asset value, offering price per share, and redemption price per share ($635,581 DIVIDED BY
32,476 shares outstanding).................................................................... $ 19.57
-----------
-----------
Net assets consist of:
Paid in capital (Note 4)..................................................................... $317,756,097
Undistributed net investment income.......................................................... 219,672
Accumulated net realized loss on investments and foreign currency transactions............... (15,230,114)
Net unrealized depreciation on translation of assets and liabilities in foreign currencies... (6,721)
Net unrealized depreciation of investments................................................... (9,158,872)
-----------
Total -- representing net assets applicable to capital shares outstanding...................... $293,580,062
-----------
-----------
<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.
F7
<PAGE>
GT GLOBAL LATIN AMERICA GROWTH 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 $266,649).............................. $ 8,471,075
Interest income........................................................................... 530,160
-----------
Total investment income................................................................. 9,001,235
-----------
Expenses:
Investment management and administration fees (Note 2).................................... 3,538,586
Service and distribution expenses: (Note 2)
Class A.................................................................... $ 1,011,259
Class B.................................................................... 1,587,737 2,598,996
-----------
Transfer agent fees (Note 2).............................................................. 1,261,524
Custodian fees (Note 1)................................................................... 196,565
Printing and postage expenses............................................................. 175,200
Fund accounting fees (Note 2)............................................................. 90,733
Audit fees................................................................................ 73,365
Registration and filing fees.............................................................. 64,495
Legal fees................................................................................ 17,155
Directors' fees and expenses (Note 2)..................................................... 13,140
Other expenses (Note 1)................................................................... 215,751
-----------
Total expenses before reductions........................................................ 8,245,510
-----------
Expense reductions (Notes 1 & 6)...................................................... (361,233)
-----------
Total net expenses...................................................................... 7,884,277
-----------
Net investment income....................................................................... 1,116,958
-----------
Net realized and unrealized gain (loss) on investments and foreign currencies:
(Note 1)
Net realized gain on investments............................................. 85,442,902
Net realized loss on foreign currency transactions........................... (897,287)
-----------
Net realized gain during the year....................................................... 84,545,615
Net change in unrealized depreciation on translation of assets and
liabilities in foreign currencies........................................... 25,640
Net change in unrealized depreciation of investments......................... (47,707,162)
-----------
Net unrealized depreciation during the year............................................. (47,681,522)
-----------
Net realized and unrealized gain on investments and foreign currencies...................... 36,864,093
-----------
Net increase in net assets resulting from operations........................................ $37,981,051
-----------
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F8
<PAGE>
GT GLOBAL LATIN AMERICA GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1997 1996
------------- -------------
<S> <C> <C>
Decrease in net assets
Operations:
Net investment income.................................................... $ 1,116,958 $ 878,406
Net realized gain (loss) on investments and foreign currency
transactions............................................................ 84,545,615 (4,964,724)
Net change in unrealized appreciation on translation of assets and
liabilities in foreign currencies....................................... 25,640 608,089
Net change in unrealized appreciation (depreciation) of investments...... (47,707,162) 63,484,288
------------- -------------
Net increase in net assets resulting from operations................... 37,981,051 60,006,059
------------- -------------
Class A:
Distributions to shareholders: (Note 1)
From net investment income............................................... -- (842,524)
In excess of net investment income....................................... -- (381,092)
Class B:
Distributions to shareholders: (Note 1)
From net investment income............................................... -- (93,201)
In excess of net investment income....................................... -- (42,157)
Advisor Class:
Distributions to shareholders: (Note 1)
From net investment income............................................... -- (4,285)
In excess of net investment income....................................... -- (1,938)
------------- -------------
Total distributions.................................................... -- (1,365,197)
------------- -------------
Capital share transactions: (Note 4)
Increase from capital shares sold and reinvested......................... 1,267,100,757 1,551,794,195
Decrease from capital shares repurchased................................. (1,327,093,718) (1,612,200,649)
------------- -------------
Net decrease from capital share transactions........................... (59,992,961) (60,406,454)
------------- -------------
Total decrease in net assets............................................... (22,011,910) (1,765,592)
Net assets:
Beginning of year........................................................ 315,591,972 317,357,564
------------- -------------
End of year *............................................................ $ 293,580,062 $ 315,591,972
------------- -------------
------------- -------------
* Includes undistributed net investment income of......................... $ 219,672 --
------------- -------------
------------- -------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F9
<PAGE>
GT GLOBAL LATIN AMERICA GROWTH FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
CLASS A+
----------------------------------------------------------
YEAR ENDED OCTOBER 31,
----------------------------------------------------------
1997 (A) 1996 (A) 1995 (A) 1994 (A) 1993 (A)
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 17.95 $ 15.38 $ 26.11 $ 19.78 $ 15.59
---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income (loss).......... 0.11 0.09 0.15 (0.08) 0.18*
Net realized and unrealized gain
(loss) on investments................ 1.44 2.59 (9.28) 6.75 5.21
---------- ---------- ---------- ---------- ----------
Net increase (decrease) from
investment operations.............. 1.55 2.68 (9.13) 6.67 5.39
---------- ---------- ---------- ---------- ----------
Distributions to shareholders:
From net investment income............ -- (0.08) -- (0.19) (0.12)
From net realized gain on
investments.......................... -- -- (1.60) (0.15) (1.08)
In excess of net investment income.... -- (0.03) -- -- --
---------- ---------- ---------- ---------- ----------
Total distributions................. -- (0.11) (1.60) (0.34) (1.20)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period.......... $ 19.50 $ 17.95 $ 15.38 $ 26.11 $ 19.78
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Total investment return (d)............. 8.52% 17.52% (37.16)% 34.10% 37.1%
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 159,496 $ 177,373 $ 182,462 $ 336,960 $ 129,280
Ratio of net investment income (loss) to
average net assets..................... 0.52% 0.46% 0.86% (0.29)% 1.3%*
Ratio of expenses to average net assets:
With expense reductions (Notes 1 &
6)................................... 1.96% 2.03% 2.11% 2.04% 2.4%*
Without expense reductions............ 2.06% 2.10% 2.12% N/A N/A
Portfolio turnover rate++++............. 130% 101% 125% 155% 112%
Average commission rate per share paid
on portfolio transactions++++.......... $ 0.0007 $ 0.0005 N/A N/A N/A
</TABLE>
- ----------------
+ All capital shares issued and outstanding as of March 31, 1993 were
reclassified as Class A shares.
++ Commencing April 1, 1993, the Fund began offering Class B shares.
+++ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover rate and average commission rate are calculated on
the basis of the Fund as a whole without distinguishing between the
classes of shares issued.
* Includes reimbursement by Chancellor LGT Asset Management, Inc. of
Fund operating expenses of $0.02 for the year ended October 31, 1993.
Without such reimbursements, the expense ratio would have been 2.49%
and the ratio of net investment income to average net assets would
have been 1.25% for the year ended October 31, 1993.
(a) These selected per share data were calculated based upon average
shares outstanding during the period.
(b) Not annualized.
(c) Annualized.
(d) Total investment return does not include sales charges.
N/A Not Applicable.
The accompanying notes are an integral part of the financial statements.
F10
<PAGE>
GT GLOBAL LATIN AMERICA GROWTH 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++
-------------------------------------------------------------
APRIL 1, 1993
YEAR ENDED OCTOBER 31, TO
---------------------------------------------- OCTOBER 31,
1997 (A) 1996 (A) 1995 (A) 1994 (A) 1993 (A)
---------- ---------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 17.78 $ 15.21 $ 25.94 $ 19.75 $ 16.26
---------- ---------- ---------- ---------- -------------
Income from investment operations:
Net investment income (loss).......... 0.01 (0.00) 0.06 (0.22) (0.07)
Net realized and unrealized gain
(loss) on investments................ 1.44 2.59 (9.19) 6.74 3.56
---------- ---------- ---------- ---------- -------------
Net increase (decrease) from
investment operations.............. 1.45 2.59 (9.13) 6.52 3.49
---------- ---------- ---------- ---------- -------------
Distributions to shareholders:
From net investment income............ -- (0.01) -- (0.18) --
From net realized gain on
investments.......................... -- -- (1.60) (0.15) --
In excess of net investment income.... -- (0.01) -- -- --
---------- ---------- ---------- ---------- -------------
Total distributions................. -- (0.02) (1.60) (0.33) --
---------- ---------- ---------- ---------- -------------
Net asset value, end of period.......... $ 19.23 $ 17.78 $ 15.21 $ 25.94 $ 19.75
---------- ---------- ---------- ---------- -------------
---------- ---------- ---------- ---------- -------------
Total investment return (d)............. 8.04% 17.02% (37.42)% 33.33% 21.5% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 133,448 $ 137,400 $ 134,527 $ 211,673 $13,576
Ratio of net investment income (loss) to
average net assets..................... 0.02% (0.04)% 0.36% (0.79)% (0.7)% (c)
Ratio of expenses to average net assets:
With expense reductions (Notes 1 &
6)................................... 2.46% 2.53% 2.61% 2.54% 2.9% (c)
Without expense reductions............ 2.56% 2.60% 2.62% N/A N/A
Portfolio turnover rate++++............. 130% 101% 125% 155% 112%
Average commission rate per share paid
on portfolio transactions++++.......... $ 0.0007 $ 0.0005 N/A N/A N/A
<CAPTION>
ADVISOR CLASS+++
-----------------------------------
YEAR ENDED JUNE 1, 1995
OCTOBER 31, TO
--------------------- OCTOBER 31,
1997 (A) 1996 (A) 1995
-------- ---------- ------------
<S> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 17.94 $ 15.40 $ 15.95
-------- ---------- ------------
Income from investment operations:
Net investment income (loss).......... 0.19 0.17 0.09
Net realized and unrealized gain
(loss) on investments................ 1.44 2.58 (0.64)
-------- ---------- ------------
Net increase (decrease) from
investment operations.............. 1.63 2.75 (0.55)
-------- ---------- ------------
Distributions to shareholders:
From net investment income............ -- (0.14) --
From net realized gain on
investments.......................... -- -- --
In excess of net investment income.... -- (0.07) --
-------- ---------- ------------
Total distributions................. -- (0.21) --
-------- ---------- ------------
Net asset value, end of period.......... $ 19.57 $ 17.94 $ 15.40
-------- ---------- ------------
-------- ---------- ------------
Total investment return (d)............. 8.91% 18.16% (3.45)%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 636 $ 818 $ 369
Ratio of net investment income (loss) to
average net assets..................... 1.02% 0.96% 1.36 %(c)
Ratio of expenses to average net assets:
With expense reductions (Notes 1 &
6)................................... 1.46% 1.53% 1.61 %(c)
Without expense reductions............ 1.56% 1.60% 1.62 %(c)
Portfolio turnover rate++++............. 130% 101% 125 %
Average commission rate per share paid
on portfolio transactions++++.......... $0.0007 $ 0.0005 N/A
</TABLE>
- ----------------
+ All capital shares issued and outstanding as of March 31, 1993 were
reclassified as Class A shares.
++ Commencing April 1, 1993, the Fund began offering Class B shares.
+++ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover rate and average commission rate are calculated on
the basis of the Fund as a whole without distinguishing between the
classes of shares issued.
* Includes reimbursement by Chancellor LGT Asset Management, Inc. of
Fund operating expenses of $0.02 for the year ended October 31, 1993.
Without such reimbursements, the expense ratio would have been 2.49%
and the ratio of net investment income to average net assets would
have been 1.25% for the year ended October 31, 1993.
(a) These selected per share data were calculated based upon average
shares outstanding during the period.
(b) Not annualized.
(c) Annualized.
(d) Total investment return does not include sales charges.
N/A Not Applicable.
The accompanying notes are an integral part of the financial statements.
F11
<PAGE>
GT GLOBAL LATIN AMERICA GROWTH FUND
NOTES TO
FINANCIAL STATEMENTS
October 31, 1997
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
GT Global Latin America Growth 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
Manager deems it appropriate, prices obtained for the day of valuation from a
bond pricing service will be used. Short-term investments with maturity of 60
days or less are valued at amortized cost adjusted for foreign exchange
translation and market fluctuation, if any.
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Company's Board of Directors.
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 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 differences 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
F12
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GT GLOBAL LATIN AMERICA GROWTH 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 amount shown in the Fund's "Statement of
Assets and Liabilities." The Fund could be exposed to risk if a counterparty is
unable to meet the terms of the contract or if the value of the currency changes
unfavorably. The Fund may enter into Forward Contracts in connection with
planned purchases or sales of securities, or to hedge against adverse
fluctuations in exchange rates between currencies.
(E) OPTION ACCOUNTING PRINCIPLES
When the Fund writes a call or put option, an amount equal to the premium
received is included in the Fund's "Statement of Assets and Liabilities" as an
asset and an equivalent liability. The amount of the liability is subsequently
marked-to-market to reflect the current market value of the option. The current
market value of an option listed on a traded exchange is valued at its last bid
price, or, in the case of an over-the-counter option, is valued at the average
of the last bid prices obtained from brokers. If an option expires on its
stipulated expiration date or if the Fund enters into a closing purchase
transaction, a gain or loss is realized without regard to any unrealized gain or
loss on the underlying security, and the liability related to such option is
extinguished. If a written call option is exercised, a gain or loss is realized
from the sale of the underlying security and the proceeds of the sale are
increased by the premium originally received. If a written put option is
exercised, the cost of the underlying security purchased would be decreased by
the premium originally received. The Fund can write options only on a covered
basis, which, for a call, requires that the fund hold the underlying securities
and, for a put, requires the Fund to maintain in a segregated account cash, U.S.
government securities, or other liquid securities in an amount not less than the
exercise price or otherwise provide adequate cover at all times while the put
option is outstanding. The Fund 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. At October 31,
1997, the fund had no open futures contracts.
(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. Interest income is recorded on the
accrual basis. Where a high level of uncertainty exists as to its collection,
income is recorded net of all withholding tax with any rebate recorded when
received. The Fund may trade securities on other than normal settlement terms.
This may increase the risk if the other party to the transaction fails to
deliver and causes the Fund to subsequently invest at less advantageous prices.
(H) TAXES
It is the policy of the Fund to meet the requirements for qualification as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended ("Code"). It is also the intention of the Fund to make distributions
sufficient to avoid imposition of any excise tax under Section 4982 of the Code.
Therefore, no provision has been made for Federal taxes on income, capital
gains, or unrealized appreciation of securities held, and excise tax on income
and capital gains. The Fund currently has a capital loss carryforward of
$14,939,326, of which $8,211,999 expires in 2003 and $6,727,327 expires in 2004.
(I) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by the Fund on the ex-date. Income
and capital gain distributions are determined in
F13
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GT GLOBAL LATIN AMERICA GROWTH FUND
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.
(J) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investments of domestic origin. The Fund's investments in emerging market
countries may involve greater risks than investments in more developed markets
and the prices 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.
(K) 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.
(L) 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.
(M) PORTFOLIO SECURITIES LOANED
At October 31, 1997, stocks with an aggregate value of approximately $32,165,965
were on loan to brokers. The loans were secured by cash collateral of
$34,658,600. 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 received $315,802 of income from
securities lending which was used to reduce custodian and administrative
expenses.
(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 $3,238,000 in loans 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 $7,810,915, with a weighted average interest rate of 6.37%.
Interest expense for the Fund for the year ended October 31, 1997 was $98,132,
included in "Other Expenses" on the Statement of Operations.
2. RELATED PARTIES
Chancellor LGT Asset Management, Inc. is the Funds Portfolios' investment
manager and administrator. The Fund pays investment management and
administration fees to the Manager at the annualized rate of 0.975% of the first
$500 million of average daily net assets of the Fund; 0.95% of the next $500
million; 0.925% of 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, is 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 period ended October 31, 1997, GT Global retained
$50,871 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 $282 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 $923,487. 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 0.50% of the average daily net assets of the Fund's
Class A shares, less any amounts paid by the Fund as the aforementioned service
fee, for GT Global's expenditures incurred in providing services as distributor.
F14
<PAGE>
GT GLOBAL LATIN AMERICA GROWTH FUND
All expenses for which GT Global is reimbursed under the Class A Plan will have
been incurred within one year of such reimbursement.
Pursuant to the Fund's Class B Plan, the Fund may pay GT Global a service fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class B shares for GT Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay GT Global a distribution fee at
the annualized rate of up to 0.75% of the average daily net assets of the Fund's
Class B Shares for GT Global's expenditures incurred in providing services as
distributor. Expenses incurred under the Class B Plan in excess of 1.00%
annually may be carried forward for reimbursement in subsequent years as long as
that Plan continues in effect.
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 2.40%, 2.90%, and 1.90% of the average
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 2.00%, 2.50% and 1.50% 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 results according to the Funds 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, aggregated
$439,672,522 and $508,014,202. There were no purchases or sales of U.S.
government obligations 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 Global
Growth & Income Fund; 200,000,000 were classified as shares of GT Global Small
Companies Fund (inactive); 200,000,000 were classified as shares of GT Global
Natural Resources Fund; 200,000,000 were classified as shares of GT Global
Infrastructure Fund; 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; and 200,000,000 were classified as shares of GT Global
Financial Services 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:
F15
<PAGE>
GT GLOBAL LATIN AMERICA GROWTH FUND
CAPITAL SHARE TRANSACTIONS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31,1997 OCTOBER 31, 1996
-------------------------- ----------------------------
CLASS A SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------- ----------- ------------- ----------- ---------------
<S> <C> <C> <C> <C>
Shares sold....................................... 46,171,230 $ 937,785,689 76,364,877 $ 1,304,172,875
Shares issued in connection with reinvestment of
distributions................................... -- -- 66,851 1,023,814
----------- ------------- ----------- ---------------
46,171,230 937,785,689 76,431,728 1,305,196,689
Shares repurchased................................ (47,874,889) (980,118,186) (78,414,835) (1,346,357,898)
----------- ------------- ----------- ---------------
Net decrease...................................... (1,703,659) $ (42,332,497) (1,983,107) $ (41,161,209)
----------- ------------- ----------- ---------------
----------- ------------- ----------- ---------------
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, 1997 OCTOBER 31, 1996
-------------------------- ----------------------------
CLASS B SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------- ----------- ------------- ----------- ---------------
<S> <C> <C> <C> <C>
Shares sold....................................... 14,424,170 $ 299,346,687 13,503,991 $ 230,324,732
Shares issued in connection with reinvestment of
distributions................................... -- -- 6,914 105,073
----------- ------------- ----------- ---------------
14,424,170 299,346,687 13,510,905 230,429,805
Shares repurchased................................ (15,210,392) (316,506,347) (14,627,921) (250,064,111)
----------- ------------- ----------- ---------------
Net decrease...................................... (786,222) $ (17,159,660) (1,117,016) $ (19,634,306)
----------- ------------- ----------- ---------------
----------- ------------- ----------- ---------------
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, 1997 OCTOBER 31, 1996
-------------------------- ----------------------------
ADVISOR CLASS SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------- ----------- ------------- ----------- ---------------
<S> <C> <C> <C> <C>
Shares sold....................................... 1,448,623 $ 29,968,381 932,074 $ 16,161,478
Shares issued in connection with reinvestment of
distributions................................... -- -- 408 6,223
----------- ------------- ----------- ---------------
1,448,623 29,968,381 932,482 16,167,701
Shares repurchased................................ (1,461,777) (30,469,185) (910,792) (15,778,640)
----------- ------------- ----------- ---------------
Net increase (decrease)........................... (13,154) $ (500,804) 21,690 $ 389,061
----------- ------------- ----------- ---------------
----------- ------------- ----------- ---------------
</TABLE>
5. HOLDINGS OF 5% VOTING SECURITIES OF PORTFOLIO COMPANIES
Investments of 5% or more of an issuer's outstanding voting securities by the
Fund are defined in the Investment Company Act of 1940 as an affiliated company.
There were no investments in affiliated companies at October 31, 1997.
Transactions during the year with companies that were affiliates are as follows:
<TABLE>
<CAPTION>
NET
REALIZED
PURCHASES SALES GAIN DIVIDEND
AFFILIATES COST PROCEEDS (LOSS) INCOME
- -------------------------------------------------- ---------- ---------- ---------- --------
<S> <C> <C> <C> <C>
Compania Boliviana de Energia Electrica........... $ -- $9,666,400 $2,805,315 $ 44,960
Sanluis Corporacion, S.A. de C.V.................. -- 5,738,935 2,214,183 318,107
</TABLE>
6. EXPENSE REDUCTIONS
The Manager has directed certain portfolio trades to brokers who paid a portion
of the Fund's expenses. For the year ended October 31, 1997, the Fund's expenses
were reduced by $45,431 under these arrangements.
F16
<PAGE>
GT GLOBAL LATIN AMERICA GROWTH FUND
NOTES
- --------------------------------------------------------------------------------
<PAGE>
GT GLOBAL LATIN AMERICA GROWTH 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 ADVISOR 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
[LOGO]
THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENT PROSPECTUS.
<PAGE>
[LOGO]
GT Global, Inc.
Fifty California Street
27th Floor
San Francisco, California
94111-4624
DATED MATERIAL
PLEASE EXPEDITE
GT Global Latin America Growth Fund
LATAR712XXXMER.675
December, 1997
