<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 14 1996
Registration Nos. 33-23512, 811-5629
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.
Post-Effective Amendment No. 26
and/or
REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 27
THE GCG TRUST
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
1001 Jefferson Street, Suite 400
Wilmington, DE 19801
[302-576-3400]
(ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES)
MARILYN TALMAN, ESQ. COPY TO:
Golden American Life Insurance Company Jeffrey S. Puretz, Esq.
1001 Jefferson Street Dechert Price & Rhoads
Wilminigton, DE 19801 1500 K Street, N.W., Suite 500
Washington, D.C. 20005
(NAME AND ADDRESS OF AGENT FOR SERVICE OF PROCESS)
__________
Approximate date of commencement of proposed sale to the public:
A soon as practical after the effective date of the Registration Statement
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE:
[X] immediately upon filing pursuant to paragraph (b)
[ ] on _________ pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(i)
[ ] on _________ pursuant to paragraph (a)(i)
[ ] 75 days after filing pursuant to paragraph (a)(ii)
[ ] on _________ pursuant to paragraph (a)(ii) of Rule 485.
IF APPROPRIATE, CHECK THE FOLLOWING BOX:
[ ] this Post-Effective Amendment designates a new effective date
for a previously filed Post-Effective Amendment.
__________
DECLARATION PURSUANT TO RULE 24F-2
The Registrant has previously filed a declaration of indefinite registration of
its shares of beneficial interest pursuant under the Securities Act of 1933
pursuant to Rule 24f-2 under the Investment Company Act of 1940. The
Rule 24f-2 Notice for the year ended December 31, 1995 was filed on
February 28, 1996.
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<PAGE>
THE GCG TRUST
CROSS-REFERENCE SHEET
Multiple Allocation Series, Fully Managed Series, Limited Maturity Bond
Series, All-Growth Series, Natural Resources Series, Real Estate Series,
Capital Appreciation Series, Rising Dividends Series, Emerging Markets
Series, Value Equity Series, Strategic Equity Series, Small Cap Series,
Liquid Asset Series, and Market Manager Series
The Prospectuses and the Statement of Additional Information for the
above-listed Series are not affected by this Post-Effective Amendment
and are incorporated by reference from The GCG Trust's Post-Effective
Amendment No. 25, which was filed with the Securities and Exchange
Commission on May 2, 1995.
THE FUND FOR LIFE
CROSS-REFERENCE SHEET
<PAGE>
THE FUND FOR LIFE
1001 JEFFERSON STREET, SUITE 400
WILMINGTON, DELAWARE 19801
(800) 366-0066
The Fund For Life (the "Fund") is a diversified portfolio
("Series") of an open-end management investment company, The GCG Trust
(the "Trust"). The Fund's investment objective is high total investment
return (capital appreciation and current income) consistent with prudent
investment risk and a balanced investment approach. The Fund seeks to
achieve its objective by investing in shares of other management
investment companies ("mutual funds") using an allocation strategy that
emphasizes mutual funds that invest primarily in domestic equity
securities (approximately 60%), while also allocating a portion of the
Fund's assets to mutual funds that invest in international equity
securities (approximately 10%), and allocating a portion of the Fund's
assets to mutual funds that invest primarily in debt securities
(approximately 30%). There can be no assurance that the Fund's
investment objective will be achieved.
The Trust has retained Directed Services, Inc. ("DSI") to provide
investment advisory administrative services to the Fund. The Fund's
policy of investing in shares of other investment companies involves
certain expenses not normally attributable to a mutual fund that invests
in other types of securities. See "Risks and Other Considerations."
As of the date of this Prospectus, shares of the Fund are sold only
to separate accounts of insurance companies (the "Separate Accounts") to
serve as the investment medium for variable annuity contracts issued by
the insurance companies.
This Prospectus sets forth concisely the information a prospective
investor should know before investing in the Fund. A Statement of
Additional Information (the "SAI") dated May 1, 1996, containing
additional and more detailed information about the Fund has been filed
with the Securities and Exchange Commission and is hereby incorporated
by reference into this Prospectus. It is available without charge and
can be obtained by writing or calling the Trust at the address and
telephone number printed above.
___________
THIS PROSPECTUS SHOULD BE READ IN CONJUNCTION WITH THE PROSPECTUS
FOR THE SEPARATE ACCOUNT. BOTH PROSPECTUSES SHOULD BE READ CAREFULLY
AND RETAINED FOR FUTURE REFERENCE.
___________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS MAY 1, 1996.
<PAGE>
TABLE OF CONTENTS
PAGE
----
Prospectus Synopsis 1
Financial Highlights 1
Investment Objective and Policies 2
Risks and Other Considerations 7
Management of the Trust 8
Investment in the Trust 10
Dividends, Distributions, and Taxes 12
Other Information 13
Appendix A-1
PROSPECTUS SYNOPSIS
This Prospectus offers shares of The Fund For Life (the "Fund"), a
portfolio ("Series") of The GCG Trust (the "Trust"). The Trust is an
open-end management investment company organized as a Massachusetts
business trust.
The Fund's investment objective is high total investment return
(capital appreciation and current income) consistent with prudent
investment risk and a balanced investment approach.
The Fund seeks to achieve this objective by investing in shares of
other open-end management investment companies ("mutual funds") based
on an investment program that emphasizes mutual funds that invest
primarily in domestic equity securities (approximately 60%), while
also allocating a portion of the Fund's assets to mutual funds that
invest in international equity securities (approximately 10%), and
allocating a portion of the Fund's assets to mutual funds that invest
primarily in debt securities rated at least investment grade
(approximately 30%). Under this asset allocation strategy,
investments are allocated between two asset classes of mutual funds:
generally 70% of the Fund's assets are composed of mutual funds
investing primarily in equity securities (including a portion in
equity securities of foreign issuers), and generally 30% of the
Fund's assets are composed of mutual funds investing primarily in
debt securities rated at least investment grade. This asset
allocation strategy is based upon the Portfolio Manager's belief that
an allocation of 70% of a portfolio's assets to common stocks and 30%
to debt securities provides the majority of investment return that
would otherwise be obtained by investing exclusively in common
stocks, yet with significantly lower volatility. There can be no
assurance that the Fund's investment objective will be attained.
This policy of investing in other investment companies involves
certain expenses not normally attributable to a mutual fund that
invests in other types of securities. See "Management of the Trust -
Expenses."
<PAGE>
Shares of the Fund currently are offered only to separate accounts
of Golden American Life Insurance Company ("Golden American") to
serve as the investment medium for variable annuity contracts issued
by Golden American (the "Variable Contracts"). However, shares of the
Fund may be offered in the future to other separate accounts
established by Golden American or other affiliated or unaffiliated
insurance companies. See "Purchase of Shares." The Trust's shares
will not be offered directly to the public.
FUND MANAGEMENT
The Trust has retained Directed Services, Inc. ("DSI" or the
"Manager") as Manager to manage the assets of the Fund and to act as
Administrator to the Fund. The Trust pays DSI monthly fees for
management and administrative services totalling on an annual basis
0.30% of the value of the average daily net assets of the Fund.
FINANCIAL HIGHLIGHTS
The following table presents selected financial highlights with
respect to the Fund for the years ended December 31, 1995 and 1994
and the period March 1, 1993 (commencement of operations) to
December 31, 1993. Information in the table is derived from the
Fund's financial statements that have been audited by Ernst & Young
LLP. The condensed financial information below does not include
deductions at the Separate Account level or contract specific
deductions that may be incurred under a Variable Contract for which
the Fund serves as an underlying investment vehicle. These charges
would reduce the total return to any owner of a Variable Contract.
The table should be read in conjunction with the Fund's financial
statements, which are incorporated by reference in the Fund's
Statement of Additional Information from the Fund's Annual Report
dated December 31, 1995. The Fund's Annual Report, which contains
further information about the Fund's performance, is available to
Shareholders upon request and without charge.
<PAGE>
Year Ending December 31
-----------------------
Per Share Operating Performance 1995 1994 1993**
---- ---- ----
Net asset value, beginning of period $9.23 $10.51 $10.00
------ ------ ------
Income from Operations:
Net investment income (loss***) (0.24) 0.44 0.33
Net gain (loss) on securities - realized
and unrealized 1.98 (0.67) 0.51
------ ------ ------
Total from investment operations 1.74 (0.23) 0.84
------ ------ ------
Less Distributions:
Dividends from net investment income 0.02 0.44 0.33
Debt from net realized gains --- 0.61 ---
------ ------ ------
Total distributions 0.02 1.05 0.33
------ ------ ------
Net asset value, end of period $10.95 $9.23 $10.51
Total Investment Return 18.79% (2.15%) 8.42%*
RATIOS AND SUPPLEMENTAL DATA
Total net assets, end of period (000's
omitted) $333 $1,346 $4,267
Ratio of expenses to average net assets 4.25% 1.84% 0.42%*
Decrease reflected in above expense ratio
due to expense limitations 0.68% --- 3.15%*
Ratio of net investment income to average
net assets (2.32)% 2.23% 4.89%*
Portfolio turnover rate 5.68% 13.06% 19.79%*
____________________________________
* Not annualized.
** Commenced operations 12/1/93.
*** Per share data numbers have been calculated using the average share
method.
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The investment objective of The Fund For Life is to realize high
total investment return (capital appreciation and current income)
consistent with prudent investment risk and a balanced investment
approach. The Fund seeks to achieve its objective by investing in
shares of other open-end management investment companies ("mutual
funds").
The Fund's investment program emphasizes investment in mutual
funds that invest primarily in domestic equity securities, while also
allocating a portion of the Fund's assets to mutual funds that invest
in international equity securities and a portion of the Fund's assets
to mutual funds that invest primarily in debt securities rated at
least investment grade. Generally, the Fund strives to maintain 70%
of its assets invested in mutual funds emphasizing equity investments
(including the equity securities of foreign issuers) and 30% of its
assets invested in mutual funds emphasizing debt investments rated at
least investment grade. The Fund will invest only in mutual funds
that are not affiliated with the Fund or its Manager.
Toward this end, the Fund allocates its assets among unaffiliated
mutual funds that generally fall into three general classifications,
as follows:
1. EQUITY FUNDS. Approximately 60% of the Fund's assets will
be invested in mutual funds that seek growth, growth and income,
capital appreciation, or a similar objective or objectives,
primarily through investment in domestic equity securities under
normal circumstances. This may include underlying mutual funds
generally classified as "growth," "growth and income," "equity
income," "capital appreciation," "aggressive growth" and "small
company growth" funds by fund rating services.
2. INTERNATIONAL EQUITY FUNDS. Approximately 10% of the
Fund's assets will be invested in mutual funds that seek growth,
growth and income, capital appreciation, or a similar objective or
objectives, primarily through investment in equity securities that
may be from issuers domiciled or traded in countries outside of
the United States. This may include funds generally classified as
"global," "foreign," or "international" funds by fund rating
services.
3. INCOME FUNDS. Approximately 30% of the Fund's assets will
be invested in mutual funds that seek as their objective income,
growth, or total return primarily through investment in debt
securities that are rated investment grade or better. This may
include funds generally classified as "income," "fixed income,"
and "high-grade corporates" by fund rating services.
The Fund's asset allocation strategy is based upon the Manager's
belief that an allocation of 70% of a portfolio's assets to common
stocks and 30% to debt securities provides the majority of investment
return that would otherwise be obtained by investing exclusively in
common stocks, yet with significantly lower volatility. The asset
allocation strategy has also been designed to reflect the Manager's
belief that with the increasing globalization of securities markets,
investors should have some exposure to foreign stock markets.
<PAGE>
In managing the Fund's portfolio, the Manager will generally
attempt to select mutual funds that have had the best performance
within their classification, as measured over time periods deemed
appropriate by the Manager. In most circumstances, the Manager will
consider time periods equal to or exceeding ten years but in special
situations may consider time periods of less than ten years or may
consider performance over several time periods. The Manager may take
into account any other factors that it deems appropriate including,
among other things, an underlying mutual fund's investment adviser
and the adviser's investment methodology or research capabilities;
the underlying fund's portfolio; any sales load; and the expense
level of an underlying fund. The Fund will not be managed to switch
in and out of underlying mutual funds to attempt to obtain short-term
gains. Once an underlying mutual fund is selected for investment, the
Fund generally will attempt to maintain its investment in the mutual
fund for at least one year from the time of the initial investment.
Generally, the Fund's portfolio will be reconfigured at least once a
year. However, if the Manager believes it appropriate, the Fund may
redeem its investment in any mutual fund in which it invests at any
time, or may maintain its investment in a mutual fund for longer than
one year.
The Fund will normally seek to maintain the allocation of its
assets among the three classifications indicated above at
approximately the percentages indicated above. However, the value of
the shares of the underlying mutual funds may not generally move in
the same direction or to the same extent, and, consequently, the
relative percentages of the Fund's investment in the three
classifications may vary. The Fund is not obligated to redeem shares
of underlying mutual funds in order to reduce such discrepancies.
However, the Fund will seek to reduce such variations by investing
its available cash in mutual funds of the appropriate class, and the
Fund will not invest in the shares of any mutual fund in one of the
three classifications if, at the time of the investment, the
percentage of the Fund's assets invested in such classification
varies from the percentages indicated above by more than 10% of the
Fund's assets.
It is intended that the Fund will normally be invested in not less
than 10 nor more than 15 mutual funds. In addition, the Fund may not
purchase or otherwise acquire the securities of any investment
company (except in connection with a merger, consolidation,
acquisition of substantially all of the assets or reorganization of
another investment company) if, as a result, the Fund and all of its
affiliates, including private discretionary investment advisory
accounts managed by the Manager, if any, would own more than 3% of
the total outstanding stock of that company.
The Fund may invest in underlying mutual funds that are both
diversified and non-diversified. A non-diversified mutual fund may
invest more than 5% and up to 25% of its assets in the securities of
one issuer. The Fund itself is classified as diversified under the
Investment Company Act of 1940 (the "1940 Act").
<PAGE>
DESCRIPTIONS OF MUTUAL FUNDS. The mutual funds in the first two
classifications indicated above, Equity Funds and International
Equity Funds, will generally invest primarily in equity securities.
Generally, such mutual funds may also invest in securities
convertible into or exchangeable for common stock (such as
convertible preferred stock, convertible debentures, or warrants)
which may or may not be considered "equity securities" depending on
the policy of the underlying fund. Many of the mutual funds may also
be permitted to invest a portion of their assets in debt securities,
including securities issued, guaranteed or insured by the U.S.
Government, its agencies or instrumentalities; corporate bonds; and
money market instruments. Typically, mutual funds that invest
primarily in equity securities are permitted to invest in other types
of securities for temporary defensive purposes, which may include
corporate bonds, U.S. Government securities, commercial paper,
certificates of deposit or other money market securities, and
repurchase agreements.
The mutual funds in these two classifications may present certain
risks. Any of these mutual funds may trade their portfolios actively
(which results in higher brokerage commissions) and/or invest in
companies whose securities may be subject to erratic market
movements. These mutual funds also may invest up to 15% of their
assets in restricted or illiquid securities; invest in warrants; lend
their portfolio securities; sell securities short; borrow money for
investment purposes (i.e., leverage their portfolios), but any such
fund that borrows for investment purposes must maintain asset
coverage of at least 300% of the amount borrowed; write (sell) or
purchase call or put options on securities or on stock indexes;
concentrate more than 25% of their assets in one industry; and enter
into futures contracts and options on futures contracts. Some of the
risks associated with these investments are described in the Appendix
to this Prospectus.
The mutual funds in the International Equity Fund classification
described above, which may primarily invest in equity securities of
foreign issuers, may also invest in debt obligations of foreign
governments, corporations, and international or supranational
organizations (and their agencies or instrumentalities). In
anticipation of foreign exchange requirements and to avoid losses due
to adverse movements in foreign currency exchange rates, these funds
also may enter into forward contracts to purchase and sell foreign
currencies.
The investments of these funds in foreign issuers may involve
special risks in addition to those normally associated with
investments in the securities of U.S. issuers. For example, there
may be less publicly available information about foreign issuers than
is available for U.S. issuers, and foreign auditing, accounting, and
financial reporting practices may differ from U.S. practices. Also,
foreign securities markets may be less active than U.S. markets,
trading may be thin and consequently securities prices may be more
volatile. Generally, all foreign investments are subject to risks of
foreign political and economic instability, adverse movements in
foreign exchange rates, the imposition or tightening of exchange
controls or other limitations, the repatriation of foreign capital,
<PAGE>
and changes in foreign governmental attitudes toward private
investment, possibly leading to nationalization, increased taxation,
or confiscation of underlying fund assets. Also, there is the risk
of possible losses through the holding of securities by custodians
and securities depositories in foreign countries.
The mutual funds in the third classification, Income Funds, invest
primarily in investment grade debt securities, which may include
corporate bonds; securities issued, guaranteed, or insured by the
U.S. Government or its agencies or instrumentalities; commercial
paper; preferred stock; convertible preferred stock; or convertible
debentures. These mutual funds also may lend their portfolio
securities, sell securities short, borrow money for investment
purposes (but any fund that borrows money for investment purposes
must maintain asset coverage of at least 300% of the amount
borrowed), write or purchase call or put options on securities or on
stock indexes, and enter into futures contracts and options on
futures contracts.
The Fund will invest only in mutual funds in this classification
that invest primarily in investment grade debt securities.
Investment grade debt securities are considered to be those rated
within one of the four highest quality grades assigned by Standard &
Poor's Rating Group ("S&P") or Moody's Investors Service, Inc.
("Moody's") or which are unrated but are deemed by an underlying
fund's investment adviser to be of comparable quality. These include
bonds rated AAA, AA, A, and BBB by S&P and bonds rated Aaa, Aa, A,
and Baa by Moody's. Bonds rated BBB by S&P or Baa by Moody's
normally indicate a greater degree of investment risk than bonds with
higher ratings. The Fund will not invest in any underlying fund that
invests more than 10% of its assets in debt securities rated lower
than investment grade.
OTHER FUND INVESTMENTS. The Fund intends to maintain its assets
invested in mutual funds in accordance with the investment program
described above. At times, for temporary purposes pending full
investment of its assets or to meet anticipated redemptions, the Fund
may invest in money market mutual funds or invest directly in (or
enter into repurchase agreements with respect to) short-term debt
securities, including U.S. Treasury bills and other short-term U.S.
Government securities, commercial paper, certificates of deposit,
time deposits, and bankers' acceptances. The Fund may not purchase
shares of any investment company that is not registered with the
Securities and Exchange Commission.
The Fund will not employ a defensive strategy in response to
market or financial conditions, but will attempt to remain as fully
invested as practicable in the shares of mutual funds allocated as
described above. However, the mutual funds themselves may adopt
defensive strategies consistent with their own investment policies.
This may result, for example, in the Fund holding underlying funds
that, in turn, have committed significant assets to defensive
investments so they are not primarily invested in equity or
longer-term debt securities in which they would normally be invested.
<PAGE>
The Fund's investments other than mutual funds are more fully
described as follows:
U.S. GOVERNMENT SECURITIES. U.S. Government securities are
obligations issued or guaranteed by the U.S. Government, its agencies
or instrumentalities. U.S. Treasury bills, which have a maturity of
up to one year, are direct obligations of the United States and are
the most frequently issued marketable U.S. Government security. The
U.S. Treasury also issues securities with longer maturities in the
form of notes and bonds.
U.S. Government agency and instrumentality obligations are debt
securities issued by U.S. Government-sponsored enterprises and
Federal agencies. Some obligations of agencies are supported by the
full faith and credit of the United States or U.S. Treasury
guarantees; others, by the right of the issuer to borrow from the
U.S. Treasury; others, by discretionary authority of the U.S.
Government to purchase certain obligations of the agency or
instrumentality; and others, only by the credit of the agency or
instrumentality issuing the obligation. In the case of obligations
not backed by the full faith and credit of the United States, the
investor must look principally to the agency issuing or guaranteeing
the obligation for ultimate repayment.
BANK OBLIGATIONS. These obligations include negotiable
certificates of deposit, bankers' acceptances, and fixed time
deposits. The Fund limits its investments in United States bank
obligations to obligations of United States banks which have more
than $1 billion in total assets at the time of investment and are
members of the Federal Reserve System or are examined by the
Comptroller of the Currency or whose deposits are insured by the
Federal Deposit Insurance Corporation.
The Fund may not invest in fixed time deposits maturing in more
than seven calendar days that are subject to withdrawal penalties.
Investments in fixed time deposits maturing from two business days
through seven calendar days that are subject to withdrawal penalties
may not, along with other illiquid securities, exceed 15% of the
value of the total assets of the Fund.
COMMERCIAL PAPER. Commercial paper includes short-term unsecured
promissory notes, variable rate demand notes, and variable rate
master demand notes issued by domestic and foreign bank holding
companies, corporations, and financial institutions, as well as
similar taxable instruments issued by government agencies and
instrumentalities. All commercial paper purchased by the Fund must
be, at the time of investment, (i) rated "P-1" by Moody's or "A-1" by
S&P, (ii) issued or guaranteed as to principal and interest by
issuers having an existing debt security rating of "Aa" or better by
Moody's or "AA" or better by S&P or (iii) securities which, if not
rated, are in the opinion of the Manager of an investment quality
comparable to rated commercial paper in which the Fund may invest.
<PAGE>
CORPORATE DEBT SECURITIES. Fund investments in these securities
are limited to non-convertible corporate debt securities (corporate
bonds, debentures, notes and other similar corporate debt
instruments) which have one year or less remaining to maturity and
which are rated "AA" or better by S&P or "Aa" or better by Moody's.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase
agreements. A repurchase agreement is a transaction in which the
seller of a security commits itself at the time of the sale to
repurchase that security from the buyer at a mutually agreed-upon
time and price. These agreements may be considered to be loans by
the purchaser collateralized by the underlying securities. The Fund
may not enter into a repurchase agreement of greater than seven days
maturity if, after such investment, the amount of the Fund's total
assets in such agreements and other illiquid securities is greater
than 15%. In the event of default by the seller under the repurchase
agreement, the Fund may experience problems in exercising its rights
to the underlying securities and may experience time delays and costs
in connection with the disposition of such securities.
BORROWING. The Fund may, for temporary or emergency purposes,
such as to facilitate redemptions, borrow from a bank in an amount
not in excess of 25% of the Fund's total assets, and the Fund may
pledge a portion of its total assets to secure such borrowings.
RISKS AND OTHER CONSIDERATIONS
Because a mutual fund invests in securities, any investment in a
mutual fund involves risk, and, although the Fund invests in a number
of mutual funds, this practice does not eliminate investment risk.
Moreover, investing through the Fund in a portfolio of mutual funds
involves certain additional expenses that would not be present in a
direct investment in the underlying funds. See "Management of the
Trust - Expenses." Further, the Manager has not had previous
experience in investing the assets of an investment company in a
portfolio of mutual funds.
The Fund, together with any "affiliated persons" (as defined in
the 1940 Act), may purchase only up to 3% of the total outstanding
securities of any underlying fund. Accordingly, when "affiliated
persons" of the Fund hold shares of any of the underlying mutual
funds, the Fund's ability to invest fully in shares of those mutual
funds is restricted, and the Manager must then, in some instances,
select alternative investments.
The 1940 Act also provides that an underlying mutual fund whose
shares are purchased by the Fund will be obligated to redeem shares
held by the Fund only in an amount up to 1% of the mutual fund's
outstanding securities during any period of less than 30 days.
Shares held by the Fund in excess of 1% of a mutual fund's
outstanding securities therefore will be considered not readily
marketable, and these securities together with other illiquid
securities may not, at the time of investment in any such security,
exceed 15% of the Fund's assets.
<PAGE>
Investment decisions by the investment advisers of the underlying
mutual funds are made independently of the Fund and the Manager.
Therefore, the investment adviser of one mutual fund may be
purchasing shares of the same issuer whose shares are being sold by
the investment adviser of another such fund. The result of this
would be an indirect expense to the Fund without accomplishing any
investment purpose.
Generally, the Fund will invest in underlying funds that can be
acquired by paying little or no sales load or other transactional
expenses. These include investments in "no-load" mutual funds or so
called "low load" mutual funds, the latter of which generally charge
a sales load no greater than 3% (or 3.09% of the net amount
invested). However, the Fund may also purchase shares of mutual
funds with sales loads higher than 3% when the Manager believes that
the investment merit of such funds is sufficient to purchase the
funds.
Under the 1940 Act a mutual fund must sell, and therefore the Fund
must buy, shares of underlying funds at the price (including sales
load, if any) described in its prospectus, and current rules under
the 1940 Act do not permit negotiation of sales charges. Therefore,
the Fund currently is not able to negotiate the level of the sales
charges at which it will purchase shares of load funds, which may be
as great as 8.5% of the public offering price (or 9.29% of the net
amount invested). Nevertheless, whenever possible, the Fund will
purchase such shares pursuant to (i) letters of intent, permitting it
to obtain reduced sales charges by aggregating its intended purchases
over time (generally thirteen months from the initial purchase under
the letter); (ii) rights of accumulation, permitting it to obtain
reduced sales charges as it purchases additional shares of an
underlying fund; and (iii) the right to obtain reduced sales charges
by aggregating its purchases of several funds within a "family" of
mutual funds.
The Fund may also acquire shares of mutual funds that pay certain
distribution expenses under a plan adopted pursuant to Rule 12b-1
under the 1940 Act (under which the Distributor may receive
distribution payments for its assistance in transaction execution),
and shares of mutual funds that impose a contingent deferred sales
charge. Under certain circumstances, a mutual fund may determine to
make payment of a redemption by the Fund wholly or partly by a
distribution in kind of securities from its portfolio, in lieu of
cash, in conformity with the rules of the Securities and Exchange
Commission. In such cases, the Fund may hold securities distributed
by a mutual fund until the Manager determines that it is appropriate
to dispose of such securities.
The Fund may invest in shares of mutual funds that are both
diversified and non-diversified under the 1940 Act. Non-diversified
funds are permitted to invest a greater proportion of their assets in
the securities of a smaller number of issuers, and may be more
susceptible to any single economic, political or regulatory
occurrence.
<PAGE>
MANAGEMENT OF THE TRUST
The business and affairs of the Trust are managed under the
direction of the Board of Trustees. The Trustees are Terry L.
Kendall, Dr. Robert A. Grayson, John L. Murphy, Dr. M. Norvel Young
and Roger B. Vincent. The Officers of the Trust are Terry L. Kendall,
Barnet Chernow, Myles R. Tashman and Mary Bea Wilkinson. Additional
information about the Trustees and Officers of the Trust may be found
in the Statement of Additional Information under the heading
"Management of the Trust."
MANAGEMENT AND ADMINISTRATION
Directed Services, Inc. ("DSI" or the "Manager") serves as the
Manager and Administrator to the Trust. The Trust pays DSI monthly
fees for management and administrative services totalling on an
annual basis 0.30% of the value of the average daily net assets of
the Fund. DSI's address is 1001 Jefferson Street, Wilmington, DE
19801. DSI is a New York corporation that is a wholly owned
subsidiary of BT Variable, Inc. ("BT Variable"), which is an indirect
subsidiary of Bankers Trust Company. DSI's business activities
include those of a distributor and underwriter of variable insurance
products, broker-dealer and investment manager. DSI is registered
with the SEC as a broker-dealer and investment adviser and is a
member of the National Association of Securities Dealers, Inc.
("NASD"). It is also registered as a broker-dealer and/or investment
adviser in various states. The Trust currently offers the shares of
its operating Series exclusively to separate accounts of Golden
American, a subsidiary of Bankers Trust Company, to serve as the
investment medium for Variable Contracts issued by Golden American.
DSI is the principal underwriter and distributor of these Variable
Contracts. Golden American is a stock life insurance company
organized under the laws of the State of Delaware. Prior to
December 30, 1993, Golden American was a Minnesota corporation.
Golden American is an indirect wholly owned subsidiary of Bankers
Trust Company.
United States banking laws and regulations, including the
Glass-Steagall Act as currently interpreted by the Board of Governors
of the Federal Reserve System (the "Board"), prohibit a bank holding
company registered under the Bank Holding Company Act of 1956, or any
affiliate thereof, from sponsoring, organizing, controlling, or
distributing the shares of a registered open-end investment company,
such as the Trust, continuously engaged in the issuance of its shares
and, except as otherwise provided by order of the Board, prohibit
banks generally from issuing, underwriting, selling or distributing
securities. The same laws and regulations generally permit a bank or
bank affiliate to act as investment adviser, transfer, dividend
disbursing and shareholder servicing agent and custodian to an
investment company and to purchase such shares as agent for and upon
the order of a customer.
<PAGE>
DSI performs the activities described above in this Prospectus and
below under the caption "Distributor." On September 30, 1992, a
wholly owned subsidiary of Bankers Trust Company acquired all of the
stock of Golden American and DSI and certain related assets, in a
transaction involving settlement of pre-existing claims of Bankers
Trust Company against the former parent of Golden American and DSI.
Under applicable banking law, stock so acquired is subject to various
divestiture requirements, and Bankers Trust Company is under contract
to divest its ownership of the stock of DSI. Equitable of Iowa
Companies ("Equitable of Iowa") and Whitewood Properties Corp., a
subsidiary of Bankers Trust Company, have entered into a definitive
agreement providing for the acquisition by Equitable of Iowa of all
interest in BT Variable, Inc. BT Variable, Inc., an indirect
subsidiary of Bankers Trust Company, is the corporate parent of DSI.
The acquisition, which is subject to the approval of the appropriate
regulators and satisfaction of certain other customary conditions set
forth in the agreement, is expected to close during the second half
of 1996. With assets of $10 billion as of March 31, 1996, Equitable
of Iowa is the holding company for Equitable Life Insurance Company
of Iowa, USG Annuity & Life Company, Locust Street Securities, Inc.,
and Equitable Investment Services, Inc. In addition, judicial or
administrative decisions or interpretations, as well as changes in
either U.S. Federal or state banking statutes or regulations, could
prevent Bankers Trust Company from continuing to own stock of DSI or
prevent Bankers Trust Company or DSI from performing certain of the
activities contemplated by this Prospectus. In such event, changes
in the operation of the Fund might occur. It is not expected,
however, that the Trust would suffer adverse financial consequences
as a result of such occurrence. Pursuant to a Management Agreement
between the Trust and DSI, the Trust pays the Manager for management
services a monthly fee at an annual rate of 0.10% of the average
daily net assets of the Fund. For more information on the Management
Agreement, see the Statement of Additional Information.
Pursuant to the terms of an Administrative Services Agreement
between the Trust and DSI, DSI provides administrative services
necessary for the Trust's operation and furnishes or procures on
behalf of the Trust and the Fund the services and information
necessary to the proper conduct of the Fund's business. The
Administrator also acts as liaison among the various service
providers to the Fund, including the custodian, portfolio accounting
agent, Manager, and the insurance company or companies to which the
Fund's shares are offered. DSI is also responsible for ensuring that
the Fund is operated in compliance with applicable legal
requirements. Under the Administrative Services Agreement, the Trust
pays DSI for administrative services a monthly fee at an annual rate
of 0.20% of the average daily net assets of the Fund. For more
information on the Administrative Services Agreement, see the
Statement of Additional Information. DSI is currently providing
(non-advisory) management and administrative services to the other
operational series of the Trust.
<PAGE>
DISTRIBUTOR
DSI acts as distributor ("Distributor") of shares of the Fund, in
addition to serving as Manager and Administrator to the Fund. The
Distributor is a registered broker-dealer and a member of the
National Association of Securities Dealers, Inc., and acts as
Distributor without remuneration from the Trust.
CUSTODIAN
The Custodian for the Trust is Bankers Trust Company, 280 Park
Avenue, New York, NY 10017. DSI provides portfolio accounting
services for the Trust pursuant to a portfolio accounting agreement.
EXPENSES
Investors in the Fund should recognize that an investment in the
Fund will bear not only a proportionate share of the expenses of the
Fund (including operating costs and management fees) but also
indirectly similar expenses of the underlying mutual funds.
Shareholders also will bear their proportionate share of any sales
charges incurred by the Fund related to the purchase of shares of the
mutual funds. In addition, shareholders of the Fund may indirectly
bear expenses paid by a mutual fund related to the distribution of
its shares.
OTHER EXPENSES
The Trust bears all costs of its operations other than expenses
specifically borne by DSI pursuant to the Administrative Services
Agreement or the Management Agreement. See "Management of the Trust"
in the SAI. Trust expenses directly attributable to the Fund are
charged to the Fund; other expenses are allocated among all the
Series. The Trust will reimburse DSI for the Fund's organizational
expenses that DSI advanced. The Fund's organizational expenses are
amortized over a period not exceeding five years from March 1, 1993,
the date of the Fund's commencement of operations.
PORTFOLIO TRANSACTIONS
Pursuant to the Management Agreement, the Manager places orders
for the purchase and sale of no-load mutual funds for the Fund's
account directly with the mutual fund or its agent. Purchase and sale
orders of load mutual funds may be placed with the Distributor,
although other brokers or dealers may be selected at the discretion
of the Manager. With respect to purchases of certain money market
instruments, purchase orders may be placed directly with the issuer
or its agent.
The Distributor may also assist in the execution of Fund portfolio
transactions to purchase underlying fund shares for which it may
receive distribution payments from the mutual funds or their
distributors in accordance with the distribution plans of those
funds. In providing execution assistance, the Distributor receives
orders from the Manager, places them with the mutual fund's
distributor or other person, as appropriate, confirms the trade,
price and number of shares purchased, assures prompt payment by the
Fund and proper completion of the order.
<PAGE>
The Fund has no restrictions upon portfolio turnover, although its
annual turnover rate is not expected to exceed 100%. A 100% annual
portfolio turnover rate would be achieved if each security in the
Fund's portfolio (other than securities with less than one year
remaining to maturity) were replaced once during the year. To the
extent that the Fund purchases shares of load funds, a higher
turnover rate would result in correspondingly higher sales loads paid
by the Fund. There is no limit on the portfolio turnover rates of
the mutual funds in which the Fund may invest.
INVESTMENT IN THE TRUST
DETERMINATION OF NET ASSET VALUE
The net asset value per share of the Fund is calculated at or
about 4:00 p.m. (New York City time), Monday through Friday, on each
day that the New York Stock Exchange is open for trading, exclusive
of federal holidays. Net asset value per share is calculated by
dividing the aggregate value of the Fund's assets less all
liabilities by the number of the Fund's outstanding shares.
The assets of the Fund consist primarily of the mutual funds,
which are valued at their respective net asset values under the 1940
Act. Each mutual fund is required to value securities in its
portfolio for which market quotations are readily available at their
current market value (generally the last reported sale price) and all
other securities and assets at fair value pursuant to methods
established in good faith by the board of directors of the underlying
fund. Money market funds with portfolio securities that mature in
one year or less may use the amortized cost or penny-rounding methods
to value their securities. Securities having 60 days or less
remaining to maturity generally are valued at their amortized cost,
which approximates market value.
Other assets of the Fund are valued at their current market value
if market quotations are readily available and, if market quotations
are not available, they are valued at fair value pursuant to methods
established in good faith by the Board of Trustees. Securities
having 60 days or less remaining to maturity are valued at their
amortized cost.
PURCHASE OF SHARES
As of the date of this Prospectus, shares of the Fund may be
offered only for purchase by separate accounts of Golden American to
serve as an investment medium for variable annuity contracts issued
by Golden American. In the future, shares of the Fund may be sold to
insurance company separate accounts funding both variable annuity
contracts and variable life insurance contracts and may be sold to
different insurance companies that are not affiliated. The Trust
currently does not foresee any disadvantages to Variable Contract
owners arising from offering the Trust's shares to separate accounts
of unaffiliated insurers or to separate accounts funding both life
insurance policies and annuity contracts; however, in some
circumstances, it is theoretically possible that the interests of
owners of various contracts participating in the Trust might at some
time be in conflict. If and when applicable, the Board of Trustees
and insurance companies whose separate accounts invest in the Trust
<PAGE>
are required to monitor events in order to identify any material
conflicts between variable annuity contract owners and variable life
policy owners and, if and when applicable, between separate accounts
of unaffiliated insurers. The Board of Trustees will determine what
action, if any, should be taken in event of such a conflict. If such
a conflict were to occur, one or more insurance company separate
accounts might withdraw their investment in the Trust. This might
force the Trust to redeem underlying mutual fund shares when
disadvantageous to do so.
Shares of the Fund are sold at their respective net asset values
(without a sales charge) next computed after receipt of a purchase
order by an insurance company whose separate account invests in the
Trust. The Fund reserves the right to cease offering its shares at
any time.
REDEMPTION OF SHARES
Shares of the Fund may be redeemed on any business day.
Redemptions are effected at the net asset value per share next
determined after receipt of the redemption request by an insurance
company whose separate account invests in the Trust. Redemption
proceeds normally will be paid within seven days following receipt of
instructions in proper form. The right of redemption may be
suspended by the Trust or the payment date postponed beyond seven
days when the New York Stock Exchange is closed (other than customary
weekend and holiday closings) or for any period during which trading
thereon is restricted because an emergency exists, as determined by
the Securities and Exchange Commission, making disposal of portfolio
securities or valuation of net assets not reasonably practicable, and
whenever the Securities and Exchange Commission has by order
permitted such suspension or postponement for the protection of
shareholders.
If the Board of Trustees should determine that it would be
detrimental to the best interests of the remaining shareholders of
the Fund to make payment wholly or partly in cash, the Fund may pay
the redemption price in whole or in part by a distribution in kind of
securities from the portfolio of the Fund, in lieu of cash, in
conformity with applicable rules of the Securities and Exchange
Commission. If shares are redeemed in kind, the redeeming
shareholder might incur brokerage costs in converting the assets into
cash.
Because the underlying mutual funds may invest some or all of
their assets in foreign securities primarily listed on foreign stock
exchanges, there may be times when disposal of portfolio securities
by or valuation of net assets of the underlying funds may not be
reasonably practicable. Such a situation may affect the ability of
the Fund to value its net assets and consequently may affect the
ability of shareholders of the Fund to redeem their shares. In such
a case, the Board of Trustees may take such action as it deems
reasonably necessary for the protection of shareholders of the Fund,
including seeking an order of the Securities and Exchange Commission
suspending or postponing the right of shareholders of the Fund to
redeem their shares.
<PAGE>
DIVIDENDS, DISTRIBUTIONS, AND TAXES
The Trust intends that the Fund continue to qualify and elect to
be treated as a regulated investment company under Subchapter M of
the Internal Revenue Code of 1986, as amended (the "Code"). In any
year in which the Fund qualifies as a regulated investment company
and distributes substantially all of its net investment income (which
includes, among other items, the excess of net short-term capital
gains over net long-term capital losses) and its net capital gains
(the excess of net long-term capital gains over net short-term
capital losses), the Fund generally will not be subject to federal
income tax to the extent it distributes to shareholders such income
and capital gains in the manner required under the Code.
Income received by the Fund from an underlying mutual fund
(including dividends and distributions of net short-term capital
gains), as well as interest received on money market instruments and
net short-term capital gains received by the Fund on the sale of
mutual fund shares, will be distributed by the Fund and are
includable in the gross income of the shareholder (the insurance
company separate account) as ordinary income. The Fund is actively
managed and may realize taxable capital gains by selling or redeeming
shares of an underlying fund with unrealized portfolio appreciation.
As a result, an investment in the Fund rather than a direct
investment in an underlying fund may result in increased taxable
income to the shareholders (the insurance company separate accounts)
since the Fund must distribute gains in accordance with the rules in
the Code. Note that the Fund's ability to dispose of shares of
mutual funds held less than three months may be limited by
requirements relating to the Fund's qualification as a regulated
investment company for federal income tax purposes.
Distributions of net capital gains designated as capital gain
dividends received by the Fund from underlying funds, as well as net
long-term capital gains realized by the Fund from the sale (or
redemption) of mutual fund shares or other securities held by the
Fund for more than one year, will be distributed by the Fund and
(generally) will be includable in the gross income of shareholders
(the insurance company separate accounts) as long-term capital gains
(even if the shareholder had held the shares of the Fund for one year
or less).
For purposes of determining the character of income received by
the Fund when an underlying fund distributes capital gains dividends
to the Fund, the Fund must treat the distribution as a long-term
capital gain, even if it has held shares of the mutual fund for one
year or less. Any loss incurred by the Fund on the sale of that
underlying fund's shares held for six months or less will be treated
as a long-term capital loss to the extent of the capital gains
dividends received with respect to such shares.
Tax consequences to the Variable Contract owners are described in
the prospectus for the pertinent Variable Contract.
<PAGE>
The Fund intends to declare as a dividend and to distribute net
investment income quarterly. The Fund will distribute any net
realized capital gains at least once annually. All distributions
will be reinvested automatically at net asset value in additional
shares of the Fund, unless a shareholder elects to receive
distributions in cash. Dividends declared in October, November, or
December to shareholders of record in such month and paid during the
following January will be treated as having been distributed and
received by shareholders on December 31.
Regulations under Section 817(h) of the Code contain certain
diversification requirements. Generally, under those regulations,
the Fund will be required to diversify its investments so that, on
the last day of each quarter of a calendar year, no more than 55% of
the value of its assets will be represented by any one investment
(such as a mutual fund), no more than 70% will be represented by any
two investments, no more than 80% will be represented by any three
investments, and no more than 90% will be represented by any four
investments. For this purpose, all securities of a given issuer are
treated as a single investment, but each U.S. Government agency and
instrumentality is treated as a separate issuer. In addition, any
security issued, guaranteed, or insured (to the extent so guaranteed
or insured) by the United States or an instrumentality of the U.S.
will be treated as a security issued by the U.S. Government or its
instrumentality, whichever is applicable. If the Fund fails to meet
the diversification requirements under Code Section 817(h), income
with respect to Variable Contracts invested in the Fund at any time
during the calendar quarter in which the failure occurred could
become currently taxable to the owners of such Variable Contracts and
income for prior periods with respect to such contracts also would be
taxable, most likely in the year of the failure to achieve the
required diversification. Other adverse tax consequences also could
ensue. If the Fund failed to qualify as a regulated investment
company, the results would be substantially the same as a failure to
meet the diversification requirements under Code Section 817(h).
In connection with the issuance of the regulations governing
diversification under Code Section 817(h), the Treasury Department
announced that it would issue future regulations or rulings
addressing the circumstances in which a Variable Contract owner's
control of the investments of a separate account may cause the
contract owner, rather than the insurance company, to be treated as
the owner of the assets held by the separate account. If the Variable
Contract owner is considered the owner of the securities underlying
the separate account, income and gains produced by those securities
would be included currently in the Variable Contract owner's gross
income. These future rules and regulations proscribing investment
control may adversely affect the ability of the Fund to operate as
described in this Prospectus. There is, however, no certainty as to
what standards, if any, Treasury will ultimately adopt, and there can
be no certainty that the future rules and regulations will not be
given retroactive application.
<PAGE>
In the event that unfavorable rules or regulations are adopted,
there can be no assurance that the Fund will be able to operate as
currently described in the Prospectus, or that the Fund will not have
to change its investment objectives, investment policies, or
investment restrictions. While the Fund's investment objective is
fundamental and may be changed only by a vote of majority of its
outstanding shares, the Trustees have reserved the right to modify
the investment policies of the Fund as necessary to prevent any such
prospective rules and regulations from causing the Variable Contract
owners to be considered the owners of the Fund.
See the SAI for additional information relating to taxation.
OTHER INFORMATION
CAPITALIZATION
The Trust was organized as a Massachusetts business trust on
August 3, 1988. The Trust currently consists of fourteen portfolios
that are operational, one of which is described in this prospectus.
Ten other portfolios are offered by means of a separate prospectus.
The Board of Trustees may establish additional portfolios in the
future. The capitalization of the Trust consists solely of an
unlimited number of shares of beneficial interest with a par value of
$0.001 each. When issued in accordance with the Trust's Agreement
and Declaration of Trust, shares of the Fund are fully paid,
redeemable, freely transferable, and non-assessable by the Trust.
Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the
Trust. However, the Declaration of Trust disclaims liability of the
shareholders, Trustees or officers of the Trust for acts or
obligations of the Trust, which are binding only on the assets and
property of the Trust, and requires that notice of the disclaimer be
given in each contract or obligation entered into or executed by the
Trust or the Trustees. The Declaration of Trust provides for
indemnification out of Trust property for all losses and expenses of
any shareholder held personally liable for the obligations of the
Trust. The risk of a shareholder incurring financial loss on account
of shareholder liability is limited to circumstances in which the
Trust itself would be unable to meet its obligations, and should be
considered remote.
VOTING RIGHTS
Shareholders of the Trust are given certain voting rights. Each
share of the Fund will be given one vote, unless a different
allocation of voting rights is required under applicable law for a
mutual fund that is an investment medium for variable insurance
products.
<PAGE>
Massachusetts business trust law does not require the Trust to
hold annual shareholder meetings, although special meetings may be
called for the Fund, or for the Trust as a whole, for purposes such
as electing or removing Trustees, changing fundamental policies, or
approving a contract for investment advisory services. In accordance
with current laws, it is anticipated that an insurance company
issuing a Variable Contract that participates in the Trust will
request voting instructions from Variable Contract owners and will
vote shares or other voting interests in the Separate Account in
proportion to the voting instructions received.
PERFORMANCE INFORMATION
The Trust may, from time to time, include quotations of the Fund's
total return in advertisements or reports to shareholders or
prospective investors. Performance information for the Fund will not
be advertised or included in sales literature unless accompanied by
comparable performance information for a separate account to which
the Fund offers its shares. Quotations of total return will be
expressed in terms of the average annual compounded rate of return of
a hypothetical investment in the Fund over periods of 1, 5 and 10
years (up to the life of the Fund). All total return figures will
reflect the deduction of a proportional share of Fund expenses on an
annual basis, and will assume that all dividends and distributions
are reinvested when paid. Quotations of total return reflect only
the performance of a hypothetical investment in the Fund during the
particular time period on which the calculations are based. Total
return for the Fund will vary based on changes in market conditions
and the level of the Fund's expenses, and no reported performance
figure should be considered an indication of performance which may be
expected in the future.
Quotations of total return for the Fund will not take into account
charges or deductions against any Separate Account to which the Fund
shares are sold or charges and deductions against the pertinent
Variable Contract, although comparable performance information for
the Separate Account will take such charges into account. The Fund's
total return should not be compared with mutual funds that sell their
shares directly to the public since the figures provided do not
reflect charges against the separate accounts or the Variable
Contracts.
Reports and promotional literature may also contain other
information, including the effect of tax deferred compounding on the
Fund's investment returns, or returns in general, which may be
illustrated by graphs, charts, or otherwise, and which may include a
comparison, at various points in time, of the return from an
investment in the Fund (or returns in general) on a tax-deferred
basis (assuming one or more tax rates) with the return on a taxable
basis.
For a more detailed description of the methods used to calculate
the Fund's yield and total return, see the SAI.
<PAGE>
LEGAL COUNSEL
Dechert Price & Rhoads, 1500 K Street, N.W., Washington, D.C.
20005, has passed upon certain securities matters in connection with
the shares offered by this Prospectus, and also acts as outside
counsel to the Trust.
INDEPENDENT AUDITORS
Ernst & Young LLP, 787 Seventh Avenue, New York, New York 10019,
serves as independent auditors of the Trust.
<PAGE>
APPENDIX
DESCRIPTION OF VARIOUS SECURITIES INVESTED IN, AND INVESTMENT
TECHNIQUES EMPLOYED BY, MUTUAL FUNDS IN WHICH THE FUND FOR LIFE MAY
INVEST.
ILLIQUID AND RESTRICTED SECURITIES. An underlying fund may invest
not more than 15% of its total assets in securities for which there
is no readily available market ("illiquid securities"), which would
include securities that are illiquid because their disposition is
subject to legal restrictions (so-called "restricted securities") and
repurchase agreements having more than seven days to maturity. A
considerable period of time may elapse between an underlying fund's
decision to dispose of such securities and the time when the
underlying fund is able to dispose of them, during which time the
value of the securities (and therefore the value of the underlying
fund's shares held by the Fund) could decline.
FOREIGN SECURITIES. An underlying fund may invest up to 100% of
its assets in securities of foreign issuers. There may be less
publicly available information about these issuers than is available
about companies in the U.S., and foreign auditing, accounting, and
financial reporting requirements may not be comparable to those in
the U.S. In addition, the value of the underlying fund's foreign
securities may be adversely affected by fluctuations in the exchange
rates between foreign currencies and the U.S. dollar, as well as
other political and economic developments, including the possibility
of expropriation, confiscatory or other taxation, exchange controls
or other foreign governmental restrictions. Many foreign securities
markets, while growing in volume, have, for the most part,
substantially less volume than U.S. markets. Securities of many
foreign companies are less liquid and their prices more volatile than
securities of comparable U.S. companies. Transactional costs in
non-U.S. securities markets are generally higher than in U.S.
securities markets. There is generally less government supervision
and regulation of exchanges, brokers, and issuers than there is in
the U.S. In addition, transactions in foreign securities may involve
greater time from the trade date until settlement than domestic
securities transactions and involve the risk of possible losses
through the holding of securities by custodians and securities
depositories in foreign countries. In addition, foreign securities
and dividends and interest payable on those securities may be subject
to foreign taxes, including taxes withheld from payments on those
securities.
<PAGE>
The underlying funds will calculate generally their net asset
values and complete orders to purchase, exchange or redeem shares
only on a Monday-Friday basis (excluding holidays on which the New
York Stock Exchange is closed). Foreign securities in which the
underlying funds may invest may be listed primarily on foreign stock
exchanges which may trade on other days (such as Saturday). As a
result, the net asset value of an underlying fund's portfolio may be
significantly affected by such trading on days when the Manager does
not have access to the underlying funds and shareholders do not have
access to the Fund.
FOREIGN CURRENCY TRANSACTIONS. In connection with its portfolio
transactions in securities traded in a foreign currency, an
underlying fund may enter into forward contracts to purchase or sell
an agreed-upon amount of a specific currency at a future date, which
may be any fixed number of days from the date of the contract agreed
upon by the parties at a price set at the time of the contract.
Although such contracts tend to minimize the risk of loss due to a
decline in the value of the subject currency, they tend to limit
commensurately any potential gain which might result should the value
of such currency increase during the contract period.
INDUSTRY CONCENTRATION. An underlying fund may concentrate its
investments within one industry. Because the scope of investment
alternatives within an industry is limited, the value of the shares
of such an underlying fund may be subject to greater market
fluctuation than an investment in a fund which invests in a broader
range of securities.
REPURCHASE AGREEMENTS. Underlying funds, particularly money
market funds, may enter into repurchase agreements with banks and
broker-dealers under which they acquire securities subject to an
agreement with the seller to repurchase the securities at an
agreed-upon time and price. The Fund also may enter into repurchase
agreements. These agreements are considered under the 1940 Act to be
loans by the purchaser, collateralized by the underlying securities.
If the seller should default on its obligation to repurchase the
securities, the underlying fund may experience delays or difficulties
in exercising its right to realize a gain upon the securities held as
collateral and might incur a loss if the value of the securities
should decline. For a more complete discussion of repurchase
agreements, see "Investment Policies" in the SAI.
LOANS OF PORTFOLIO SECURITIES. An underlying fund may lend its
portfolio securities provided: (1) that the loan is secured
continuously by collateral consisting of U.S. Government securities
or cash or cash equivalents maintained on a daily marked-to-market
basis in an amount at least equal to the current market value of the
securities loaned; (2) the fund may at any time call the loan and
obtain the return of the securities loaned; (3) the fund will receive
any interest or dividends paid on the loaned securities; and (4) the
aggregate market value of the securities loaned will not at any time
exceed one-third of the total assets of the fund. Loans of
securities involve a risk that the borrower may fail to return the
securities or may fail to provide additional collateral.
<PAGE>
SHORT SALES. An underlying fund may sell securities short. The
underlying fund will incur a loss as a result of the short sale if
the price of the security increases between the date of the short
sale and the date on which the fund replaces the borrowed security.
The fund will realize a gain if the security declines in price
between those dates. The amount of any gain will be decreased and
the amount of any loss increased by the amount of any premium,
dividends or interest the fund may be required to pay in connection
with a short sale.
OPTIONS. Certain underlying mutual funds may purchase and write
call and put options on securities, securities indexes, and on
foreign currencies. The purchase and writing of options involves
certain risks. During the option period, the covered call writer
has, in return for the premium on the option, given up the
opportunity to profit from a price increase in the underlying
securities above the exercise price, but, as long as its obligation
as a writer continues, has retained the risk of loss should the price
of the underlying security decline. The writer of an option has no
control over the time when it may be required to fulfill its
obligation as a writer of the option. Once an option writer has
received an exercise notice, it cannot effect a closing purchase
transaction in order to terminate its obligation under the option and
must deliver the underlying securities at the exercise price. If a
put or call option purchased by a mutual fund is not sold when it has
remaining value, and if the market price of the underlying security,
in the case of a put, remains equal to or greater than the exercise
price, or in the case of a call, remains less than or equal to the
exercise price, the fund will lose its entire investment in the
option. Also, where a put or call option on a particular security is
purchased to hedge against price movements in a related security, the
price of the put or call option may move more or less than the price
of the related security. There can be no assurance that a liquid
market will exist when a mutual fund seeks to close out an option
position. Furthermore, if trading restrictions or suspensions are
imposed on the options market a fund may be unable to close out a
position. If a mutual fund cannot effect a closing transaction, it
will not be able to sell the underlying security while the previously
written option remains outstanding, even if it might otherwise be
advantageous to do so.
FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS. An underlying
mutual fund may invest in financial futures contracts such as
interest rate futures contracts, stock index futures contracts, and
others, and may purchase and write options on such futures contracts.
Generally, transactions in futures contracts and options thereon by a
mutual fund must constitute bona fide hedging or other permissible
transactions under regulations promulgated by the Commodities Futures
Trading Commission (the "CFTC"), under which a fund engaging in such
transactions would not be a "commodity pool."
<PAGE>
There are several risks associated with the use of futures
contracts. While a mutual fund's use of futures contracts for
hedging may protect a fund against adverse movements in the general
level of interest rates or securities prices, such transactions could
also preclude the opportunity to benefit from favorable movements in
the level of interest rates or securities prices. There can be no
guarantee that there will be a correlation between price movements in
the hedging vehicle and in the securities being hedged. An incorrect
correlation could result in a loss on both the hedged securities in a
mutual fund and the hedging vehicle so that the fund's return might
have been better had hedging not been attempted.
There can be no assurance that a liquid market will exist at a
time when a mutual fund seeks to close out a futures contract or
futures option position. Most futures exchanges and boards of trade
limit the amount of fluctuation permitted in futures contract prices
during a single day; once the daily limit has been reached on a
particular contract, no trades may be made that day at a price beyond
that limit. In addition, certain of these instruments are relatively
new and without a significant trading history. As a result, there is
no assurance that an active secondary market will develop or continue
to exist. Lack of a liquid market for any reason may prevent the
fund from liquidating an unfavorable position and the fund would
remain obligated to meet margin requirements until the position is
closed.
LEVERAGE THROUGH BORROWING. An underlying fund may borrow a
percentage of the value of its net assets on an unsecured basis from
banks to increase its holdings of portfolio securities. Under the
1940 Act, the fund is required to maintain continuous asset coverage
of 300% with respect to such borrowings and to sell (within three
days) sufficient portfolio holdings to restore such coverage if it
should decline to less than 300% due to market fluctuations or
otherwise, even if disadvantageous from an investment standpoint.
Leveraging will exaggerate the effect of any increase or decrease in
the value of portfolio securities on the fund's net asset value, and
money borrowed will be subject to interest costs (which may include
commitment fees and/or the cost of maintaining minimum average
balances) which may or may not exceed the interest and option
premiums received from the securities purchased with borrowed funds.
WARRANTS. An underlying fund may invest in warrants, which are
options to purchase equity securities at specific prices valid for a
specific period of time. The prices do not necessarily move parallel
to the prices of the underlying securities. Warrants have no voting
rights, receive no dividends and have no rights with respect to the
assets of the issuer. If a warrant is not exercised within the
specified time period, it will become worthless and the fund will
lose the purchase price and the right to purchase the underlying
security.
IN 2999 05/96
<PAGE>
THE FUND FOR LIFE
1001 JEFFERSON STREET, SUITE 400
WILMINGTON, DELAWARE 19801
(800) 366-0066
STATEMENT OF ADDITIONAL INFORMATION
May 1, 1996
This Statement of Additional Information describes The Fund
For Life (the "Fund"), one of the Series of The GCG Trust (the
"Trust"). The Trust is an open-end management investment company
organized as a Massachusetts business trust. The Fund's Manager
is Directed Services, Inc. ("DSI" or the "Manager").
The Fund's investment objective is high total investment
return (capital appreciation and current income) consistent with
prudent investment risk and a balanced investment approach. The
Fund seeks to achieve its investment objective by investing in
shares of other open-end investment companies--commonly called
mutual funds.
As of the date of this Statement of Additional Information,
shares of the Fund are sold only to separate accounts of
insurance companies to serve as the investment medium for
variable annuity contracts issued by the insurance companies.
This Statement of Additional Information is intended to
supplement the information provided to investors in the
Prospectus dated May 1, 1996, of The Fund For Life and has been
filed with the Securities and Exchange Commission as part of the
Trust's Registration Statement. Investors should note, however,
that this Statement of Additional Information is not itself a
prospectus and should be read carefully in conjunction with the
Fund's Prospectus and retained for future reference. The
contents of this Statement of Additional Information are
incorporated by reference in the Prospectus in their entirety. A
copy of the Prospectus may be obtained free of charge from the
Trust at the address and telephone number listed above.
Manager:
Directed Services, Inc.
(800) 447-3644
<PAGE>
TABLE OF CONTENTS
Page
INTRODUCTION 1
INVESTMENT POLICIES 1
U.S. Government Securities 1
Banking Industry Obligations 1
Commercial Paper 2
Corporate Debt Securities 3
Repurchase Agreements 4
INVESTMENT RESTRICTIONS 5
MANAGEMENT OF THE TRUST 7
The Management Agreement 10
The Administrative Services Agreement 11
Distribution of Trust Shares 13
Purchases and Redemptions 13
PORTFOLIO TRANSACTIONS 14
NET ASSET VALUE 15
ADVERTISING 16
TAXATION 17
Distributions 20
Other Taxes 20
OTHER INFORMATION 20
Capitalization 20
Voting Rights 21
Custodian 22
Independent Auditors 22
Counsel 22
Registration Statement 22
FINANCIAL STATEMENTS 22
Appendix A: Description of Bond Ratings A-1
Appendix B: Securities and Investment Techniques
of Underlying Mutual Funds B-1
INTRODUCTION
<PAGE>
This Statement of Additional Information is designed to
elaborate upon the discussion of certain securities and
investment techniques which are described in the Prospectus. The
more detailed information contained herein is intended solely for
investors who have read the Prospectus and are interested in a
more detailed explanation of certain aspects of some of the
Fund's securities and some investment techniques. Some of the
Fund's investment techniques are described only in the Prospectus
and are not repeated herein. Captions and defined terms in this
Statement of Additional Information generally correspond to like
captions and terms in the Prospectus.
INVESTMENT POLICIES
Although the Fund invests primarily in the shares of other
mutual funds, it is also authorized to invest for temporary
purposes or as may be considered necessary to meet anticipated
redemptions in a variety of short-term debt securities, including
U.S. Government securities, commercial paper, certificates of
deposit, bankers' acceptances and repurchase agreements with
respect to such securities. The following information
supplements the discussion of the investment objective and
policies of the Fund found under "Investment Objective and
Policies" in the Prospectus.
U.S. Government Securities
- --------------------------
The Fund may invest in obligations issued or guaranteed by
the U.S. Government or its agencies or instrumentalities which
have remaining maturities not exceeding one year. Agencies and
instrumentalities which issue or guarantee debt securities and
which have been established or sponsored by the U.S. Government
include the Bank for Cooperatives, the Export-Import Bank, the
Federal Farm Credit System, the Federal Home Loan Banks, the
Federal Home Loan Mortgage Corporation, the Federal Intermediate
Credit Banks, the Federal Land Banks, the Federal National
Mortgage Association and the Student Loan Marketing Association.
Banking Industry Obligations
- ----------------------------
The Fund may invest in certificates of deposit, time
deposits, bankers' acceptances, and other short-term debt
obligations issued by commercial banks.
Certificates of deposit are negotiable certificates issued
against funds deposited in a commercial bank for a definite
period of time and earning a specified return. Bankers'
acceptances are negotiable drafts or bills of exchange, which are
normally drawn by an importer or exporter to pay for specific
merchandise, and which are "accepted" by a bank, meaning, in
effect, that the bank unconditionally agrees to pay the face
value of the instrument on maturity. Fixed-time deposits are
<PAGE>
bank obligations payable at a stated maturity date and bearing
interest at a fixed rate. Fixed-time deposits may be withdrawn
on demand by the investor, but may be subject to early withdrawal
penalties which vary depending upon market conditions and the
remaining maturity of the obligation. There are no contractual
restrictions on the right to transfer a beneficial interest in a
fixed-time deposit to a third party, because there is no market
for such deposits. The Fund will not invest in fixed-time
deposits (i) which are not subject to prepayment; (ii) which
mature in more than seven days that are subject to withdrawal
penalties upon prepayment; or (iii) which mature from two
business days through seven calendar days that provide for
withdrawal penalties upon prepayment (other than overnight
deposits), if, in the aggregate, more than 15% of its assets
would be invested in such deposits, in repurchase agreements
maturing in more than seven days, and in other illiquid assets.
Obligations of foreign banks involve somewhat different
investment risks than those affecting obligations of U.S. banks,
which include: (i) the possibility that their liquidity could be
impaired because of future political and economic developments;
(ii) their obligations may be less marketable than comparable
obligations of U.S. banks; (iii) a foreign jurisdiction might
impose withholding taxes on interest income payable on those
obligations; (iv) foreign deposits may be seized or nationalized;
(v) foreign governmental restrictions, such as exchange controls,
may be adopted which might adversely affect the payment of
principal and interest on those obligations; and (vi) the
selection of those obligations may be more difficult because
there may be less publicly available information concerning
foreign banks and/or because the accounting, auditing, and
financial reporting standards, practices and requirements
applicable to foreign banks may differ from those applicable to
U.S. banks. Foreign banks are not generally subject to
examination by any U.S. Government agency or instrumentality.
Commercial Paper
- ----------------
The Fund may invest in commercial paper (including variable
amount master demand notes), denominated in U.S. dollars, issued
by U.S. corporations or foreign corporations. The Fund may
invest in commercial paper (i) rated, at the date of investment,
Prime-1 by Moody's Investors Service, Inc. ("Moody's") or A-1 by
Standard & Poor's Corporation ("S&P"); (ii) if not rated by
either Moody's or S&P, issued by a corporation having an
outstanding debt issue rated Aa or better by Moody's or AA or
better by S&P; or (iii) if not rated, is determined to be of an
investment quality comparable to rated commercial paper in which
the Fund may invest.
<PAGE>
Commercial paper obligations may include variable amount
master demand notes. These notes are obligations that permit the
investment of fluctuating amounts at varying rates of interest
pursuant to direct arrangements between the Fund, as lender, and
the borrower. These notes permit daily changes in the amounts
borrowed. The lender has the right to increase or to decrease
the amount under the note at any time up to the full amount
provided by the note agreement; and the borrower may prepay up to
the full amount of the note without penalty. Because variable
amount master demand notes are direct lending arrangements
between the lender and borrower, and because no secondary market
exists for those notes, such instruments will probably not be
traded. However, the notes are redeemable (and thus immediately
repayable by the borrower) at face value, plus accrued interest,
at any time. In connection with master demand note arrangements,
the Manager will monitor, on an ongoing basis, the earning power,
cash flow, and other liquidity ratios of the borrower and its
ability to pay principal and interest on demand. The Manager
also will consider the extent to which the variable amount master
demand notes are backed by bank letters of credit. These notes
generally are not rated by Moody's or S&P; the Fund may invest in
them only if the Manager believes that at the time of investment
the notes are of comparable quality to the other commercial paper
in which the Fund may invest. Master demand notes are considered
by the Fund to have a maturity of one day, unless the Manager has
reason to believe that the borrower could not make immediate
repayment upon demand. See Appendix A for a description of
Moody's and S&P ratings applicable to commercial paper.
Corporate Debt Securities
- -------------------------
Fund investments in these securities are limited to
non-convertible corporate debt securities (corporate bonds,
debentures, notes and similar corporate debt instruments) which
have one year or less remaining to maturity and which are rated
"AA" or better by S&P or "Aa" or better by Moody's.
The rating "P-1" is the highest commercial paper rating
assigned by Moody's and the ratings "A-1" and "A-1+" are the
highest commercial paper ratings assigned by S&P. Debt
obligations rated "Aa" or better by Moody's or "AA" or better by
S&P are generally regarded as high-grade obligations and such
ratings indicate that the ability to pay principal and interest
is very strong.
After purchase by the Fund, a security may cease to be rated
or its rating may be reduced below the minimum required for
purchase by the Fund. Neither event will require a sale of such
security by the Fund. However, the Manager will consider such
event in its determination of whether the Fund should continue to
hold the security. To the extent the ratings given by Moody's or
S&P may change as a result of changes in such organizations or
their rating systems, the Fund will attempt to use comparable
ratings as standards for investments in accordance with the
investment policies contained in the Prospectus and in this
Statement of Additional Information.
<PAGE>
Repurchase Agreements
- ---------------------
The Fund may invest in repurchase agreements. A repurchase
agreement is a transaction in which the seller of a security
commits itself at the time of the sale to repurchase that
security from the buyer at a mutually agreed upon time and price.
These agreements may be considered to be loans by the purchaser
collateralized by the underlying securities. The term of such an
agreement is generally quite short, possibly overnight or for a
few days, although it may extend over a number of months (up to
one year) from the date of delivery. The resale price is in
excess of the purchase price by an amount which reflects an
agreed upon market rate of return, effective for the period of
time the Fund is invested in the security. This results in a
fixed rate of return protected from market fluctuations during
the period of the agreement. This rate is not tied to the coupon
rate on the security subject to the repurchase agreement.
The Fund may engage in repurchase transactions in accordance
with guidelines approved by the Board of Trustees of the Trust,
which include monitoring the creditworthiness of the parties with
which the Fund engages in repurchase transactions, obtaining
collateral at least equal in value to the repurchase obligation,
and marking the collateral to market on a daily basis. The Fund
may not enter into a repurchase agreement having more than seven
days remaining to maturity if, as a result, such agreements,
together with any other securities that are not readily
marketable, would exceed 15% of the net assets of the Fund. If
the seller should become bankrupt or default on its obligations
to repurchase the securities, the Fund may experience delays or
difficulties in exercising its rights to the securities held as
collateral and might incur a loss if the value of the securities
should decline. The Fund also might incur disposition costs in
connection with liquidating the securities.
INVESTMENT RESTRICTIONS
The investment restrictions set forth below, together with
the Fund's investment objective and policies, are fundamental
policies of the Fund and may not be changed by the Fund without
the approval of a majority of the outstanding voting shares of
the Fund. Under these restrictions, the Fund may not:
(1) Invest in a security if more than 25% of its total
assets (taken at market value at the time of such
investment) would be invested in the securities of issuers
in any particular industry or the securities of issuers that
are registered investment companies and that themselves
invest more than 25% of their total assets in one industry,
except that this restriction does not apply to securities
issued or guaranteed by the U.S. Government or its agencies
or instrumentalities (or repurchase agreements with respect
thereto) or securities or obligations issued by U.S. banks;
<PAGE>
(2) Purchase or sell real estate, except that the Fund
may invest in securities secured by real estate or real
estate interests or issued by companies in the real estate
industry or which invest in real estate or real estate
interests;
(3) Purchase securities on margin (except for use of
short-term credit necessary for clearance of purchases and
sales of portfolio securities), except that to the extent
the Fund engages in transactions in options, futures, and
options on futures, the Fund may make margin deposits in
connection with those transactions and except that effecting
short sales will be deemed not to constitute a margin
purchase for purposes of this restriction, and subject to
the restrictions described in the Prospectus and in the
Statement of Additional Information, purchase securities on
margin;
(4) Lend any funds or other assets, except that the
Fund may, consistent with its investment objective and
policies:
(a) invest in debt obligations, even though
the purchase of such obligations may be deemed to be
the making of loans;
(b) enter into repurchase agreements; and
(c) lend its portfolio securities in
accordance with applicable guidelines established by
the Board of Trustees;
(5) Issue senior securities, except insofar as the
Fund may be deemed to have issued a senior security by
reason of borrowing money in accordance with the Fund's
borrowing policies, or in connection with any repurchase
agreement, and except, for purposes of this investment
restriction, collateral or escrow arrangements with respect
to the making of short sales, purchase or sale of futures
contracts or related options, purchase or sale of forward
currency contracts, writing of stock options, and collateral
arrangements with respect to margin or other deposits
respecting futures contracts, related options, and forward
currency contracts are not deemed to be an issuance of a
senior security;
(6) Act as an underwriter of securities of other
issuers, except when in connection with the disposition of
portfolio securities, the Fund may be deemed to be an
underwriter under the federal securities laws; and
(7) Borrow money or pledge, mortgage, or hypothecate
its assets, except that the Fund may borrow from banks but
only if immediately after each borrowing and continuing
thereafter, there is asset coverage of 300%.
<PAGE>
The Fund is also subject to the following restrictions and
policies that are not fundamental and may, therefore, be changed
by the Board of Trustees (without shareholder approval). Unless
otherwise indicated, the Fund may not:
(1) Invest in securities that are illiquid because
they are subject to legal or contractual restrictions on
resale, in repurchase agreements maturing in more than seven
days, or other securities which in the determination of the
Manager are illiquid if, as a result of such investment,
more than 15% of the total assets of the Fund (taken at
market value at the time of such investment) would be
invested in such securities;
(2) Purchase or sell commodities or commodities
contracts; and
(3) Invest in puts, calls, straddles, spreads, or any
combination thereof, provided that this restriction does not
apply to puts that are a feature of variable or floating
rate securities or to puts that are a feature of other
corporate debt securities.
MANAGEMENT OF THE TRUST
The business and affairs of the Trust are managed under the
direction of the Board of Trustees according to the applicable
laws of the Commonwealth of Massachusetts and the Trust's
Agreement and Declaration of Trust. The Trustees are Terry L.
Kendall, Dr. Robert A. Grayson, Dr. M. Norvel Young, Roger B.
Vincent, and John L. Murphy. The officers of the Trust are Terry
L. Kendall, Barnett Chernow, Myles R. Tashman and Mary Bea
Wilkinson.
The Trustees and officers of the Trust, their business addresses,
and principal occupations during the past five years are:
Position with Business Affiliations and
Name and Address Account D Principal Occupations
- -------------------- -------------------- --------------------------------
Terry L. Kendall* Chairman of the Managing Director, Bankers Trust
1001 Jefferson St., Board and President Company; President, Director,
Suite 400 and Chief Executive Officer,
Wilmington, DE 19801 Golden American Life Insurance
Company; President, Director,
and Chief Executive Officer, BT
Variable, Inc.; Chairman and
Chief Executive Officer of
Directed Services, Inc.;
Chairman of the Board and
President of The GCG Trust;
formerly, President and Chief
Executive Officer, United
Pacific Life Insurance Company
(1983-1993).
<PAGE>
Position with Business Affiliations and
Name and Address Account D Principal Occupations
- -------------------- -------------------- --------------------------------
Robert A. Grayson Trustee Co-founder, Grayson Associates,
Grayson Assoc. Inc.; Adjunct Professor of
108 Loma Media Rd Marketing, New York University
Santa Barbara, CA School of Business
93103 Administration; Member of the
Board of the Board of Trustees
of The GCG Trust; former
Director, The Golden Financial
Group, Inc.; former Senior Vice
President, David & Charles
Advertising.
John L. Murphy* Trustee Former Managing Director,
32 Talmadgeville Bankers Trust Company and group
Road head of Bankers Trust Global
Darien, CT 06820 Investors; Member of the Board
of Trustees of The GCG Trust.
Mr. Murphy joined Bankers Trust
Company in 1969 and served as a
Managing Director (1986-1996).
Roger B. Vincent Trustee President, Springwell
230 Park Avenue Corporation; Director,
New York, NY 10169 Petralone, Inc.; Member of the
Board of Trustees of The GCG
Trust; formerly, Managing
Director, Bankers Trust Company.
M. Norvel Young Trustee Chancellor Emeritus and Board of
Pepperdine University Regents, Pepperdine University;
Malibu, CA Director of Imperial Bancorp,
90263 Imperial Bank, Imperial Trust
Co. and 20th Century Christian
Publishing Company; Member of
the Board of Trustees of The GCG
Trust. Formerly: Chancellor,
Pepperdine University, 1971 to
1984; President, Pepperdine
University, 1957 to 1971;
Director, National Conference of
Christians and Jews, 1978 to 1982.
<PAGE>
Position with Business Affiliations and
Name and Address Account D Principal Occupations
- -------------------- -------------------- --------------------------------
Barnett Chernow Executive Vice Executive Vice President, BT
1001 Jefferson St., President Variable, Inc.; Executive Vice
Suite 400 President, Golden American Life
Wilmington, DE 19801 Insurance Company; Executive
Vice President, Directed
Services, Inc.; Senior Vice
President and Chief Financial
Officer, Reliance Insurance
Company, August 1977 to July
1993.
Myles R. Tashman Secretary Executive Vice President and
1001 Jefferson St., Secretary, Golden American Life
Suite 400 Insurance Company; Executive
Wilmington, DE 19801 Vice President, BT Variable,
Inc.; Executive Vice President
and Secretary, Directed
Services, Inc.; Secretary of
The GCG Trust; formerly, Senior
Vice President and General
Counsel, United Pacific Life
Insurance Company (1986-1993).
Mary B. Wilkinson Treasurer Senior Vice President and
1001 Jefferson St., Treasurer, Golden American
Suite 400 Life Insurance Company; Senior
Wilmington, DE 19801 Vice President and Treasurer,
BT Variable, Inc.; President
and Treasurer, Directed
Services, Inc.; Assistant Vice
President, CIGNA Insurance
Companies, August 1993 to
October 1993; various
positions with United Pacific
Life Insurance Company, January
1987 to July 1993, and was
Vice President and Controller
upon leaving.
__________________________
*Messrs. Kendall and Murphy are "interested persons" of the
Account (as that term is defined in the Investment Company
Act of 1940) because of their affiliations with the Manager
and its affiliated companies as shown above.
<PAGE>
None of the Trustees directly owns shares of the Fund. In
addition, as of April 18, 1995, the Trustees and Officers as a
group owned Variable Contracts that entitled them to give voting
instructions with respect to less than one percent of the
outstanding shares of the Fund in the aggregate.
The table below lists each Variable Contract Owner who owns
a Variable Contract that entitles the owner to give voting
instructions with respect to 5% or more of the shares of the Fund
as of April 18, 1995. The address for each record owner is c/o
Golden American Life Insurance Company, 1001 Jefferson Street,
Suite 400, Wilmington, DE 19801.
Name: Percentage:
- ---- ----------
Helen B. Yungman 33.45%
Paul W. Colflesh 14.23%
Renee J. Walser 10.07%
David C. Nonell 5.88%
As indicated above, the Trustees and Officers hold positions
with Separate Account D of Golden American Life Insurance Company
("Separate Account D"), another fund for which the Manager serves
as investment adviser. Trustees other than those affiliated with
the Manager receive a fee for each Board of Trustees meeting
attended based on the level of the Trust's assets at the time of
the meeting as follows: $2,000 per meeting for aggregate assets
up to $500 million; $3,000 per meeting for aggregate assets in
excess of $500 million and up to $1 billion; $4,000 per meeting
for aggregate assets in excess of $1 billion and up to $2 billion;
and $5,000 per meeting for aggregate assets in excess of $2
billion. Trustees are reimbursed for any expenses incurred in
attending such meetings or otherwise in carrying out their
responsibilities as Trustees of the Trust. During the fiscal year
ended December 31, 1995, fees totaling $54,000 were paid by the
Trust or accrued to Messrs. Kendall ($0), Grayson ($18,000),
Murphy ($0), Young ($18,000), and Vincent ($18,000). During the
fiscal year ended December 31, 1995, Messrs. Kendall, Grayson,
Murphy, Young, and Vincent earned total fees of $0, $20,500, $0,
$20,500, and $20,500, respectfully, from the Trust and Separate
Account D. No officer or Trustee received any other compensation
directly from the Trust.
<PAGE>
The Management Agreement
- ------------------------
Subject to the supervision of the Trust's Board of Trustees,
the Manager will provide a continuous investment program for the
Fund's portfolio and determine the composition of the assets of
the Fund's portfolio, including determination of the purchase,
retention, or sale of the securities, cash, and other investments
contained in the portfolio. The Manager will provide investment
research and conduct a continuous program of evaluation,
investment, sales, and reinvestment of the Fund's assets by
determining the securities and other investments that shall be
purchased, entered into, sold, closed, or exchanged for the Fund,
when these transactions should be executed, and what portion of
the assets of the Fund should be held in the various securities
and other investments in which it may invest in accordance with
the Fund's investment objective or objectives, policies, and
restrictions.
Pursuant to the Management Agreement, the Manager is
authorized to exercise full investment discretion and make all
determinations with respect to the investment of the Fund's
assets and the purchase and sale of its portfolio securities.
The Management Agreement will continue in effect until
February 1996, and from year to year thereafter provided such
continuance is approved annually by (i) the holders of a majority
of the outstanding voting securities of the Fund or by the Board
of Trustees, and (ii) a majority of the Trustees who are not
parties to such Management Agreement or "interested persons" (as
defined in the 1940 Act) of any such party. The Management
Agreement was approved by the Board of Trustees, including a
majority of the Trustees who are not parties to the Management
Agreement, or interested persons of such party, at a meeting held
on September 27, 1994. The Management Agreement may be
terminated without penalty by vote of the Trustees or the
shareholders of the Fund, or by the Manager, on 60 days' written
notice by either party to the Management Agreement and will
terminate automatically if assigned.
The Trust pays the Manager a monthly fee at an annual rate
of 0.10% of the average daily net assets of the Fund. Gross fees
paid to the Manager for the fiscal years ended December 31, 1995
and 1994 and for the period March 1, 1993 (commencement of
operations) to December 31, 1993 under the Management Agreement
were $830, $2,601 and $2,333, respectively.
<PAGE>
The Administrative Services Agreement
- -------------------------------------
Directed Services, Inc. ("Administrator") serves as
Administrator to the Fund pursuant to an Administrative Services
Agreement between the Administrator and the Trust. Its address
is 1001 Jefferson Street, Suite 400, Wilmington, DE 19801. DSI
also serves as Manager to the Fund.
Pursuant to the Administrative Services Agreement, the
Administrator, subject to the direction of the Board of Trustees,
is responsible for providing all supervisory and management
services reasonably necessary for the operation of the Trust and
the Fund other than the services performed by the Manager. These
services shall include, but are not limited to, (i) coordinating
all matters relating to the functions of the Fund's Manager,
Custodian, Dividend Disbursing Agent, and Recordkeeping Agent
(including pricing and valuation of the Fund's portfolio),
accountants, attorneys, and other parties performing services or
operational functions for the Trust, (ii) providing the Trust and
the Fund, at the Administrator's expense, with the services of a
sufficient number of persons competent to perform such
administrative and clerical functions as are necessary to ensure
compliance with federal securities laws as well as other
applicable laws and to provide effective supervision and
administration of the Trust; (iii) maintaining or supervising the
maintenance by the Manager or third parties approved by the Trust
of such books and records of the Trust and the Fund as may be
required by applicable federal or state law; (iv) preparing or
supervising the preparation by third parties approved by the
Trust of all federal, state, and local tax returns and reports of
the Trust required by applicable law; (v) preparing and, after
approval by the Trust, filing and arranging for the distribution
of proxy materials and periodic reports to shareholders of the
Trust as required by applicable law; (vi) preparing and, after
approval by the Trust, arranging for the filing of such
registration statements and other documents with the Securities
and Exchange Commission and other federal and state regulatory
authorities as may be required by applicable law; (vii) taking
such other action with respect to the Trust, after approval by
the Trust, as may be required by applicable law, including
without limitation the rules and regulations of the Securities
and Exchange Commission and other regulatory agencies; and (viii)
providing the Trust, at the Administrator's expense, with
adequate personnel, office space, communications facilities, and
other facilities necessary for its operations as contemplated in
the Administrative Services Agreement. Other responsibilities of
the Administrator are described in the Prospectus.
<PAGE>
The Administrator shall make its officers and employees
available to the Board of Trustees and officers of the Trust for
consultation and discussions regarding the supervision and
administration of the Fund. The Trust pays the Administrator a
monthly fee at an annual rate of 0.20% of the Fund's average
daily assets. Gross fees paid the Administrator under the
Administrative Services Agreement for the fiscal years ended
December 31, 1995 and 1994 and for the fiscal period March 1,
1993 (commencement of operations) to December 31, 1993 were
$1,660, $5,201 and $4,367, respectively.
The Trust bears all of its costs of operation other than
those specifically borne by the Administrator or the Manager.
The Fund's costs include any direct charges relating to the
purchase and sale of portfolio securities, interest charges, fees
and expenses of the Trust's attorneys and auditors, taxes and
governmental fees, cost of share certificates and other expenses
of issue, sale, repurchase or redemption of shares, expenses of
registering and qualifying shares for sale, expenses of printing
and distributing reports, notices and proxy materials to
shareholders, fees and expenses of data processing, recordkeeping
and financial accounting services rendered to the Trust, expenses
of printing and filing reports and other documents with
governmental agencies, expenses of typesetting, printing and
distributing Prospectuses to the existing shareholders, expenses
of annual and special shareholders' meetings, charges of
custodians, fees and expenses of Trustees of the Trust who are
not officers or employees to the Manager or its affiliates,
membership dues in the Investment Company Institute or other
industry associations, insurance premiums and extraordinary
expenses such as litigation expense and the expense of compliance
with any governmental tax withholding requirements.
Certain of the expenses incurred by the Fund in connection
with its organization, its registration with the Securities and
Exchange Commission and any states where registered, and the
public offering of its shares were advanced on behalf of the
Trust by the Manager. These organizational expenses are deferred
and amortized by the Fund over a period not exceeding 60 months
from the date of the Fund's commencement of operations.
Distribution of Trust Shares
- ----------------------------
Directed Services, Inc. (the "Distributor") serves as the
Trust's Distributor pursuant to a Distribution Agreement with the
Trust. The Distributor is not obligated to sell a specific
amount of Trust shares. The Distributor bears all expenses of
providing services pursuant to the Distribution Agreement
including the costs of sales presentations, mailings,
advertising, and any other marketing efforts by the Distributor
in connection with the distribution or sale of the shares.
<PAGE>
Purchases and Redemptions
- -------------------------
For information on purchase and redemption of shares, see
"Purchase of Shares" and "Redemption of Shares" in the Fund's
Prospectus. The Trust may suspend the right of redemption of
shares of the Fund and may postpone payment beyond seven days for
any period: (i) during which the New York Stock Exchange is
closed other than customary weekend and holiday closing or during
which trading on the New York Stock Exchange is restricted; (ii)
when the Securities and Exchange Commission determines that a
state of emergency exists which may make payment or transfer not
reasonably practicable; (iii) as the Securities and Exchange
Commission may by order permit for the protection of the security
holders of the Trust; or (iv) at any other time when the Trust
may, under applicable laws and regulations, suspend payment on
the redemption of its shares. If the Board of Trustees should
determine that it would be detrimental to the best interests of
the remaining shareholders of the Fund to make payment wholly or
partly in cash, the Fund may pay the redemption price in whole or
in part by a distribution in kind of securities from its
portfolio, in lieu of cash, in conformity with applicable rules
of the Securities and Exchange Commission. If shares are
redeemed in kind, the redeeming shareholder might incur brokerage
costs in converting the assets into cash.
PORTFOLIO TRANSACTIONS
As part of its obligations under the Management Agreement,
the Manager places all orders for the purchase and sale of
portfolio investments for the Fund's account with brokers or
dealers selected by it in its discretion. With respect to orders
for the purchase and sale of no-load mutual funds, the Manager
places orders directly with the mutual fund or its agent. With
respect to purchases of certain money market instruments,
purchase orders are placed directly with the issuer or its agent.
Purchases of load fund shares may be effected by the Manager
itself, which is a registered broker-dealer, although other
brokers or dealers may be selected at the discretion of the
Manager.
When appropriate, the Fund may arrange to be included within
a class of investors entitled to a reduced sales charge on load
fund shares and may purchase load fund shares under letters of
intent, rights of accumulation and cumulative purchase
privileges, which permit it to obtain reduced sales charges for
larger purchases of shares. Therefore, in a majority of cases,
the sales charges paid by the Fund on a load fund purchase do not
exceed 1% of the public offering price.
<PAGE>
Under the 1940 Act, a mutual fund must sell its shares at
the price (including sales load, if any) described in its
prospectus, and current rules under the 1940 Act do not permit
negotiations of sales charges. Therefore, the Fund currently is
not able to negotiate the level of the sales charges at which it
purchases shares of load funds, which may be as great as 8.5% of
the public offering price (or 9.29% of the net amount invested).
Nevertheless, certain factors tend to keep the Fund's portfolio
transaction costs as low as possible, including: (1) the Fund,
to the extent feasible, purchases shares of no-load funds which
can be acquired without incurring a sales charge or utilizing a
broker to effect the transaction; (2) the Fund, to the extent
feasible, takes advantage of exchange or conversion privileges
offered by many "families" of mutual funds; and (3) insofar as
the Fund invests in U.S. Government and other money market
securities, the transaction costs should be minimal.
With respect to all non-mutual fund securities, in executing
transactions, the Manager attempts to obtain the best execution
for the Fund taking into account such factors as price (including
the applicable brokerage commission or dollar spread), size of
order, the nature of the market for the security, the timing of
the transaction, the reputation, experience and financial
stability of the broker-dealer involved, the quality of the
service, the difficulty of execution and operational facilities
of the firms involved, and the firm's risk in positioning a block
of securities. In the case of securities traded on the
over-the-counter markets, there is generally no stated
commission, but the price includes an undisclosed commission or
markup.
The Manager may in the future provide advisory services to
clients other than the Fund. A particular security may be bought
or sold by the Manager for certain clients even though it could
have been bought or sold for other clients at the same time.
Likewise, a particular security may be bought for one or more
clients when one or more clients are selling the security. In
some instances, one client may sell a particular security to
another client. Two or more clients of the Manager also may
simultaneously purchase or sell the same security, in which event
each day's transactions in such security are, insofar as
possible, allocated between such clients in a manner deemed fair
and reasonable by the Manager. Although there is no specified
formula for allocating such transactions, the various allocation
methods used by the Manager, and the results of such allocations,
are subject to periodic review by the Trust's Board of Trustees.
There may be circumstances when purchases or sales of portfolio
securities for one or more clients will have an adverse effect on
other clients.
<PAGE>
NET ASSET VALUE
As indicated under "Net Asset Value" in the Prospectus, the
Fund's net asset value per share for the purpose of pricing
purchase and redemption orders is determined at or about 4:00
P.M., New York City time, on each day the New York Stock Exchange
is open for trading, exclusive of federal holidays.
ADVERTISING
The Trust may, from time to time, include the total return
of the Fund in advertisements or sales literature. Performance
information for the Fund will not be advertised or included in
sales literature unless accompanied by comparable performance
information for a separate account to which the Fund offers its
shares.
Quotations of average annual total return for the Fund will
be expressed in terms of the average annual compounded rate of
return of a hypothetical investment in the Fund over certain
periods that will include periods of one, five, and ten years
(or, if less, up to the life of the Fund), calculated pursuant to
the following formula: P (1 + T)n = ERV (where P = a
hypothetical initial payment of $1,000, T = the average annual
total return, n = the number of years, and ERV = the ending
redeemable value of a hypothetical $1,000 payment made at the
beginning of the period). Quotations of total return may also be
shown for other periods. All total return figures reflect the
deduction of a proportional share of Fund expenses on an annual
basis, and assume that all dividends and distributions are
reinvested when paid. For the fiscal year ended December 31,
1995 and the period from the commencement of operations of the
Fund on March 1, 1993 to December 31, 1995, the total return of
the Fund was 18.79% and 26.03%, respectively. For the fiscal
year ended December 31, 1994 and the period from the commencement
of operations of the Fund on March 1, 1993 to December 31, 1994,
the total return of the Fund was (2.15)% and 3.28%, respectively.
Performance information for the Fund may be compared, in
advertisements, sales literature, and reports to shareholders to:
(i) the Standard & Poor's 500 Stock Index, the Dow Jones
Industrial Average, the Lehman Brothers Government Bond Index,
the Donoghue Money Market Institutional Averages, the Lehman
Brothers Government Corporate Index, the Salomon High Yield
Index, or other indexes that measure performance of a pertinent
group of securities; (ii) other groups of mutual funds tracked by
Lipper Analytical Services, Inc., a widely used independent
research firm which ranks mutual funds by overall performance,
<PAGE>
investment objectives, and assets, or tracked by other services,
companies, publications, or persons who rank mutual funds on
overall performance or other criteria; and (iii) the Consumer
Price Index (measure for inflation) to assess the real rate of
return from an investment in the Fund. Unmanaged indices may
assume the reinvestment of dividends but generally do not reflect
deductions for administrative and management costs and expenses.
Quotations of total return for the Fund will not take into
account charges and deductions against any separate accounts to
which the Fund shares are sold or charges and deductions against
the life insurance policies or annuity contracts issued by Golden
American Life Insurance Company, although comparable performance
information for the separate account will take such charges into
account. Performance information for the Fund reflects only the
performance of a hypothetical investment in the Fund during the
particular time period on which the calculations are based.
Performance information should be considered in light of the
Fund's investment objective and investment policies, the
characteristics and quality of the portfolios, and the market
conditions during the given time period, and should not be
considered as a representation of what may be achieved in the
future.
Advertisements may include discussion of the underlying
mutual funds held by the Fund.
TAXATION
The following discussion summarizes certain U.S. federal tax
considerations incident to an investment in the Fund.
The Fund intends to qualify annually and to elect to be
treated as a regulated investment company under the Internal
Revenue Code of 1986, as amended (the "Code").
To qualify as a regulated investment company, the Fund
generally must, among other things: (i) derive in each taxable
year at least 90% of its gross income from dividends, interest,
payments with respect to securities loans, and gains from the
sale or other disposition of stock, securities or foreign
currencies, or other income derived with respect to its business
of investing in such stock, securities, or currencies; (ii)
derive in each taxable year less than 30% of its gross income
from the sale or other disposition of certain assets held less
than three months (namely (a) stock or securities, (b) options,
futures, or forward contracts (other than those on foreign
currencies), or (c) foreign currencies (including options,
futures, or forward contracts on such currencies) not directly
related to the Fund's principal business of investing in stocks
or securities (or options and futures with respect to stocks and
securities)); (iii) diversify its holdings so that, at the end of
each quarter of the taxable year, (a) at least 50% of the market
value of the Fund's assets is represented by cash, U.S.
<PAGE>
Government securities, the securities of other regulated
investment companies, and other securities, with such other
securities of any one issuer limited for the purposes of this
calculation to an amount not greater than 5% of the value of the
Fund's total assets and 10% of the outstanding voting securities
of such issuer, and (b) not more than 25% of the value of its
total assets is invested in the securities of any one issuer
(other than U.S. Government securities or the securities of other
regulated investment companies); and (iv) distribute at least 90%
of its net investment income (which includes, among other items,
dividends, interest, and net short-term capital gains in excess
of any net long-term capital losses) each taxable year.
As a regulated investment company, the Fund generally will
not be subject to U.S. federal income tax on its net investment
income and net capital gains (net long-term capital gains in
excess of the net short-term capital losses) that it distributes
to shareholders. The Fund intends to distribute to its
shareholders, at least annually, substantially all of its net
investment income and any net capital gains.
In general, amounts not distributed by a regulated
investment company on a timely basis in accordance with a
calendar year distribution requirement are subject to a
nondeductible 4% excise tax. To avoid the tax, a regulated
investment company must distribute during each calendar year, (i)
at least 98% of its ordinary income (not taking into account any
capital gains or losses) of the calendar year, (ii) at least 98%
of its capital gains in excess of its capital losses for the
twelve month period ending on October 31 of the calendar year
(adjusted for certain ordinary losses), and (iii) all ordinary
income and capital gains for previous years that were not
distributed during such years. The Fund will not be subject to
the excise tax on undistributed amounts for any calendar year if
at all times during the calendar year the shareholders of the
Fund consist only of segregated asset accounts of life insurance
companies established in connection with variable contracts, as
defined in the Code. (For this purpose, any shares of the Fund
attributable to an investment in the Fund not exceeding $250,000
made in connection with the organization of the Fund shall not be
taken into account.) In the event the Fund fails to meet this
exception, the Fund intends to make its distributions in
accordance with the calendar year distribution requirement.
A distribution will be treated as paid on December 31 of a
calendar year if it is declared by the Fund in October, November,
or December of that year with a record date in such a month and
paid by the Fund during January of the following calendar year.
Such distributions will be taxable to shareholders (the insurance
company separate accounts) for the calendar year in which the
distributions are declared, rather than the calendar year in
which the distributions are received.
<PAGE>
If the Fund invests in shares of an investment company
organized abroad, the Fund may be subject to U.S. federal income
tax on a portion of an "excess distribution" from, or on the gain
from the sale of part or all of the shares in, such company. In
addition, an interest charge may be imposed with respect to
deferred taxes arising from such distributions or gains.
To comply with regulations under Section 817(h) of the Code,
the Fund generally will be required to diversify its investments
following the first anniversary of the beginning of its
operations. Generally, pursuant to Section 817(h), the Fund will
be required to diversify its investments so that on the last day
of each quarter of a calendar year, no more than 55% of the value
of its assets is represented by any one investment, no more than
70% is represented by any two investments, no more than 80% is
represented by any three investments, and no more than 90% is
represented by any four investments.
In connection with the issuance of the diversification
regulations, the Treasury Department announced that it would
issue future regulations or rulings addressing the circumstances
in which a variable contract owner's control of the investments
of a separate account may cause the contract owner, rather than
the insurance company, to be treated as the owner of the assets
held by the separate account. If the variable contract owner is
considered the owner of the securities underlying the separate
account, income and gains produced by those securities would be
included currently in the contract owner's gross income. The
insurance company to which the Fund offers its shares (the
"Company") has advised the Trust that it believes that, for
federal income tax purposes, the Fund will be the owner of the
shares of the mutual funds and any income therefrom, and the
separate accounts of the Company will be the owners of the Shares
of the Fund and any income therefrom. Although it is not known
what standards will be incorporated in future regulations or
other pronouncements, the Treasury staff has indicated informally
that it is concerned that there may be too much contract owner
control where a mutual fund (or series) underlying a separate
account invests solely in securities issued by companies in a
specific industry. Similarly, the ability of a contract owner to
select a fund representing a specific economic risk or to direct
(without restriction) the issuer of a variable contract at any
time to invest in the Fund or other investments may also be
proscribed. The belief of the Company with respect to the
ownership by the Fund of the mutual fund shares and the income
therefrom, and by the separate accounts of the Shares of the Fund
and the income therefrom, is based upon published Internal
Revenue Service rulings and the Company's understanding of the
current Internal Revenue Service policy.
<PAGE>
In connection with the issuance of the temporary
diversification regulations in 1986, the Treasury announced that
such regulations did not provide guidance concerning the extent
to which owners may direct their investments to particular
divisions of a separate account without being considered the
owners of the assets of the account. It is possible that
regulations or revenue rulings may be issued in this area at some
time in the future. These future rules and regulations
proscribing investment control may adversely affect the ability
of the Fund to operate as described in the Prospectus. There is,
however, no certainty as to what standards, if any, Treasury will
ultimately adopt. In the event that unfavorable rules or
regulations are adopted, there can be no assurance that the Fund
will be able to operate as currently described in the Prospectus,
or that the Fund will not have to change its investment objective
or objectives, investment policies, or investment restrictions.
While the Fund's investment objective is fundamental and may be
changed only by a vote of a majority of its outstanding shares,
the Trustees have the right to modify the investment policies of
the Fund as necessary to prevent any such prospective rules and
regulations from causing the Variable Contract owners to be
considered the owners of the assets underlying the Separate
Accounts.
Distributions
- -------------
Distributions of net investment income by the Fund are
taxable to shareholders (the insurance company separate accounts)
as ordinary income. Net capital gains will be treated, to the
extent distributed and designated as capital gains dividends, as
long-term capital gains in the hands of the shareholders.
Other Taxes
- -----------
Distributions may also be subject to additional state, local
and foreign taxes, depending on each shareholder's particular
situation. Shareholders are advised to consult their own tax
advisers with respect to the particular tax consequences to them
of an investment in the Fund.
<PAGE>
OTHER INFORMATION
Capitalization
- --------------
The Trust is a Massachusetts business trust established
under an Agreement and Declaration of Trust dated August 3, 1988.
The capitalization of the Trust consists of an unlimited number
of shares of beneficial interest with a par value of $0.001 each.
The Trust currently consists of fourteen operational Series, one
of which is discussed in this Statement of Additional
Information. The Board of Trustees may establish additional
Series (with different investment objectives and fundamental
policies) at any time in the future. Establishment and offering
of additional Series will not alter the rights of the Trust's
shareholders, the Separate Accounts. When issued in accordance
with the terms of the Agreement and Declaration of Trust, shares
are fully paid, redeemable, freely transferable, and
non-assessable by the Trust. Shares do not have preemptive
rights or subscription rights. In liquidation of a Series of the
Trust, each shareholder is entitled to receive his or her pro
rata share of the net assets of that portfolio.
Expenses incurred by the Fund in connection with its
organization and the public offering of its shares aggregated
approximately $51,850.03. These costs have been deferred and are
being amortized over a period not exceeding five years from the
Fund's commencement of operations.
On January 31, 1992, the name of the Trust was changed to
The GCG Trust. Prior to that change, the name of the Trust was
The Specialty Managers Trust, and prior to July 17, 1989, the
name of the Trust was Western Capital Specialty Managers Trust.
Voting Rights
- -------------
Shareholders of the Trust are given certain voting rights.
Each share of each Series will be given one vote, unless a
different allocation of voting rights is required under
applicable law for a mutual fund that is an investment medium for
variable insurance products.
<PAGE>
Massachusetts business law does not require the Trust to
hold annual shareholder meetings, although special meetings may
be called for a specific Series, or for the Trust as a whole, for
purposes of electing or removing Trustees, changing fundamental
policies, or approving a contract for investment advisory
services. It is not anticipated that the Trust will hold
meetings of the shareholders of the Fund unless required by law
or the Agreement and Declaration of Trust. In this regard, the
Trust will be required to hold a meeting to elect Trustees to
fill any existing vacancies on the Board if, at any time, fewer
than a majority of the Trustees have been elected by the
shareholders of the Trust. In addition, the Agreement and
Declaration of Trust provides that the holders of not less than
two-thirds of the outstanding shares or other voting interests of
the Trust may remove a person serving as Trustee either by
declaration in writing or at a meeting called for such purpose.
The Trust's shares do not have cumulative voting rights. The
Trustees are required to call a meeting for the purpose of
considering the removal of a person serving as Trustee, if
requested in writing to do so by the holders of not less than 10%
of the outstanding shares of the Trust. The Trust is required to
assist in shareholders' communications.
Custodian
- ---------
The Custodian for the Trust is Bankers Trust Company, 280
Park Avenue, New York, NY 10017. DSI provides portfolio
accounting services for the Trust pursuant to a Portfolio
Accounting Agreement.
Independent Auditors
- --------------------
Ernst & Young LLP, 787 Seventh Avenue, New York, NY 10019, serves
as independent auditors for the Trust.
Counsel
- -------
Dechert Price & Rhoads, 1500 K Street, N.W., Washington,
D.C. 20005, has passed upon certain securities matters in
connection with the shares offered by the Trust and acts as
outside counsel to the Trust.
<PAGE>
Registration Statement
- ----------------------
This Statement of Additional Information and the Prospectus
do not contain all the information included in the Trust's
Registration Statement filed with the Securities and Exchange
Commission under the Securities Act of 1933 with respect to the
securities offered by the Prospectus. Certain portions of the
Registration Statement have been omitted pursuant to the rules
and regulations of the Securities and Exchange Commission. The
Registration Statement, including the exhibits filed therewith,
may be examined at the offices of the Securities and Exchange
Commission in Washington, D.C.
Statements contained herein and in the Prospectus as to the
contents of any contract or other documents referred to are not
necessarily complete, and, in each instance, reference is made to
the copy of such contract or other documents filed as an exhibit
to the Registration Statement, each such statement being
qualified in all respects by such reference.
FINANCIAL STATEMENTS
The audited financial statements for the Fund dated as of
December 31, 1995, including notes thereto, are incorporated by
reference in this Statement of Additional Information from the
Fund's Annual Report dated as of December 31, 1995.
<PAGE>
APPENDIX A: DESCRIPTION OF BOND RATINGS
Excerpts from Moody's Investors Service, Inc.'s ("Moody's")
description of its bond ratings:
Aaa - judged to be the best quality; they carry the smallest
degree of investment risk. Aa - judged to be of high quality by
all standards; together with the Aaa group, they comprise what
are generally known as high grade bonds. A - possess many
favorable investment attributes and are to be considered as
"upper medium grade obligations." Baa - considered as medium
grade obligations, i.e., they are neither highly protected nor
poorly secured; interest payments and principal security appear
adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great
length of time. Ba - judged to have speculative elements; their
future cannot be considered as well assured. B - generally lack
characteristics of the desirable investment. Caa - are of poor
standing; such issues may be in default or there may be present
elements of danger with respect to principal or interest. Ca -
speculative in a high degree; often in default. C - lowest rate
class of bonds; regarded as having extremely poor prospects.
Moody's also applies numerical indicators 1, 2, and 3 to
rating categories. The modifier 1 indicates that the security is
in the higher end of its rating category; 2 indicates a mid-range
ranking; and 3 indicates a ranking toward the lower end of the
category.
Excerpts from the Standard & Poor's Rating Group ("S&P")
description of its bond ratings:
AAA - highest grade obligations; capacity to pay interest
and repay principal is extremely strong. AA - also qualify as
high grade obligations; a very strong capacity to pay interest
and repay principal and differs from AAA issues only in small
degree. A - regarded as upper medium grade; they have a strong
capacity to pay interest and repay principal although it is
somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated
categories. BBB - regarded as having an adequate capacity to pay
interest and repay principal; whereas it normally exhibits
adequate protection parameters, adverse economic conditions or
changing circumstances are more likely to lead to a weakened
capacity than in higher rated categories - this group is the
lowest which qualifies for commercial bank investment. BB, B,
CCC, CC - predominantly speculative with respect to capacity to
pay interest and repay principal in accordance with terms of the
obligation: BB indicates the lowest degree of speculation and C
the highest.
S&P applies indicators "+", no character, and "-" to its rating
categories. The indicators show relative standing within the
major rating categories.
<PAGE>
APPENDIX B: SECURITIES AND INVESTMENT TECHNIQUES
OF UNDERLYING MUTUAL FUNDS
FOREIGN CURRENCY TRANSACTIONS. An underlying fund may enter
into forward contracts in connection with its portfolio
transactions in securities traded in a foreign currency. Under
such an arrangement, concurrently with the entry into a contract
to acquire a foreign security for a specified amount of currency,
the fund would purchase with U.S. dollars the required amount of
foreign currency for delivery at the settlement date of the
purchase; the fund would enter into similar forward currency
transactions in connection with the sale of foreign securities.
The effect of such transactions would be to fix a U.S. dollar
price for the security to protect against a possible loss
resulting from an adverse change in the relationship between the
U.S. dollar and the subject foreign currency during the period
between the date the security is purchased or sold and the date
on which payment is made or received, the normal range of which
is three to fourteen days. These contracts are traded in the
interbank market conducted directly between currency traders
(usually large commercial banks) and their customers. A forward
contract generally has no deposit requirement and no commissions
are charged at any stage for trades.
Under the Internal Revenue Code (the "Code"), gains or
losses attributable to fluctuations in exchange rates which occur
between the time an underlying fund accrues interest or other
receivables or accrues expenses or other liabilities denominated
in a foreign currency and the time it actually collects such
receivables or pays such liabilities generally are treated as
ordinary income or ordinary loss. Similarly, on disposition of
debt securities denominated in a foreign currency and on
disposition of certain futures contracts, forward contracts and
options, gains or losses attributable to fluctuations in the
value of foreign currency between the date of acquisition of the
security or contract and the date of disposition also are treated
as ordinary gain or loss. These gains or losses, referred to
under the Code as "section 988" gains or losses, may increase or
decrease the amount of an underlying fund's investment company
taxable income to be distributed to the Fund as ordinary income.
This, in turn, will affect the amount of investment company
taxable income of the Fund. See "Dividends, Distributions, and
Taxes" in the Fund's Prospectus.
MASTER DEMAND NOTES. Although the Fund itself will not do
so, underlying funds (particularly money market mutual funds) may
invest up to 100% of their assets in master demand notes. Master
demand notes are unsecured obligations of U.S. corporations
redeemable upon notice that permit investment by a fund of
fluctuating amounts at varying rates of interest pursuant to
direct arrangements between the fund and the issuing corporation.
Because they are direct arrangements between the fund and the
issuing corporation, there is no secondary market for the notes.
However, they are redeemable at face value, plus accrued
interest, at any time.
<PAGE>
SHORT SALES. An underlying fund may sell securities short.
In a short sale, the fund sells stock which it does not own,
making delivery with securities "borrowed" from a broker. The
fund is then obligated to replace the security borrowed by
purchasing it at the market price at the time of replacement.
This price may or may not be less than the price at which the
security was sold by the fund. Until the security is replaced,
the fund is required to pay to the lender any dividends or
interest which accrue during the period of the loan. In order to
borrow the security, the fund also may have to pay a premium
which would increase the cost of the security sold. The proceeds
of the short sale will be retained by the broker, to the extent
necessary to meet margin requirements, until the short position
is closed out.
The underlying fund also must deposit in a segregated
account an amount of cash or U.S. Government securities equal to
the difference between (a) the market value of the securities
sold short at the time they were sold short and (b) the value of
the collateral deposited with the broker in connection with the
short sale (not including the proceeds from the short sale).
While the short position is open, the fund must maintain daily
the segregated account at such a level that (1) the amount
deposited in it plus the amount deposited with the broker as
collateral equals the current market value of the securities sold
short and (2) the amount deposited in it plus the amount
deposited with the broker as collateral is not less than the
market value of the securities at the time they were sold short.
Depending upon market conditions, up to 80% of the value of a
fund's net assets may be deposited as collateral for the
obligation to replace securities borrowed to effect short sales
and allocated to a segregated account in connection with short
sales.
A short sale is "against the box" if at all times when the
short position is open the fund owns at least an equal amount of
the securities or securities convertible into, or exchangeable
without further consideration for, securities of the same issue
as the securities sold short. Such a transaction serves to defer
a gain or loss for federal income tax purposes.
OPTIONS ACTIVITIES. An underlying fund may write (i.e.,
sell) listed call options ("calls") if the calls are "covered"
throughout the life of the option. A call is "covered" if the
fund owns the optioned securities. When a fund writes a call, it
receives a premium and gives the purchaser the right to buy the
underlying security at any time during the call period (usually
not more than nine months in the case of common stock) at a fixed
exercise price regardless of market price changes during the call
period. If the call is exercised, the fund will forgo any gain
from an increase in the market price of the underlying security
over the exercise price.
<PAGE>
An underlying fund may purchase a call on securities only to
effect a "closing purchase transaction," which is the purchase of
a call covering the same underlying security and having the same
exercise price and expiration date as a call previously written
by the fund on which it wishes to terminate its obligation. If
the fund is unable to effect a closing purchase transaction, it
will not be able to sell the underlying security until the call
previously written by the fund expires (or until the call is
exercised and the fund delivers the underlying security).
An underlying fund also may write and purchase put options
("puts"). When a fund writes a put, it receives a premium and
gives the purchaser of the put the right to sell the underlying
security to the fund at the exercise price at any time during the
option period. When an underlying fund writes a put, it must
"cover" the put by either maintaining cash or fixed income
securities with a value equal to the exercise price in a
segregated account with its custodian or by holding a put on the
same security and in the same principal amount as the put written
when the exercise price of the put held is equal to or greater
than the exercise price of the put written. When a fund
purchases a put, it pays a premium in return for the right to
sell the underlying security at the exercise price at any time
during the option period. An underlying fund also may purchase
stock index puts, which differ from puts on individual securities
in that they are settled in cash based on the values of the
securities in the underlying index rather than by delivery of the
underlying securities. Purchase of a stock index put is designed
to protect against a decline in the value of the portfolio
generally rather than an individual security in the portfolio.
If any put is not exercised or sold, it will become worthless on
its expiration date.
An underlying fund's option positions may be closed out only
on an exchange which provides a secondary market for options of
the same series, but there can be no assurance that a liquid
secondary market will exist at a given time for any particular
option. In this regard, trading in options on certain securities
(such as U.S. Government securities) is relatively new so that it
is impossible to predict to what extent liquid markets will
develop or continue.
The underlying fund's custodian, or a securities depository
acting for it, generally acts as escrow agent as to the
securities on which the fund has written puts or calls, or as to
other securities acceptable for such escrow so that no margin
deposit is required of the fund. Until the underlying securities
are released from escrow, they cannot be sold by the fund.
<PAGE>
In the event of a shortage of the underlying securities
deliverable on exercise of an option, the Options Clearing
Corporation has the authority to permit other, generally
comparable securities, to be delivered in fulfillment of option
exercise obligations. If the Options Clearing Corporation
exercises its discretionary authority to allow such other
securities to be delivered, it may also adjust the exercise
prices of the affected options by setting different prices at
which otherwise ineligible securities may be delivered. As an
alternative to permitting such substitute deliveries, the Options
Clearing Corporation may impose special exercise settlement
procedures.
FUTURES CONTRACTS. An underlying fund may enter into
futures contracts for the purchase or sale of debt securities and
stock indexes. A futures contract is an agreement between two
parties to buy and sell a security or an index for a set price on
a future date. Futures contracts are traded on designated
"contract markets" which, through their clearing corporations,
guarantee performance of the contracts.
Generally, if market interest rates increase, the value of
outstanding debt securities declines (and vice versa). Entering
into a futures contract for the sale of securities has an effect
similar to the actual sale of securities, although sale of the
futures contract might be accomplished more easily and quickly.
For example, if an underlying fund holds long-term U.S.
Government securities and it anticipates a rise in long-term
interest rates, it could, in lieu of disposing of its portfolio
securities, enter into futures contracts for the sale of similar
long-term securities. If rates increased and the value of the
fund's portfolio securities declined, the value of the fund's
futures contracts would increase, thereby protecting the fund by
preventing the net asset value from declining as much as it
otherwise would have. Similarly, entering into futures contracts
for the purchase of securities has an effect similar to the
actual purchase of the underlying securities, but permits the
continued holding of securities other than the underlying
securities. For example, if the fund expects long-term interest
rates to decline, it might enter into futures contracts for the
purchase of long-term securities so that it could gain rapid
market exposure that may offset anticipated increases in the cost
of securities it intends to purchase while continuing to hold
higher-yield short-term securities or waiting for the long-term
market to stabilize.
<PAGE>
A stock index futures contract may be used to hedge an
underlying fund's portfolio with regard to market risk as
distinguished from risk relating to a specific security. A stock
index futures contract does not require the physical delivery of
securities, but merely provides for profits and losses resulting
from changes in the market value of the contract to be credited
or debited at the close of each trading day to the respective
accounts of the parties to the contract. On the contract's
expiration date, a final cash settlement occurs. Changes in the
market value of a particular stock index futures contract reflect
changes in the specified index of equity securities on which the
future is based.
There are several risks in connection with the use of
futures contracts. In the event of an imperfect correlation
between the futures contract and the portfolio position which is
intended to be protected, the desired protection may not be
obtained and the fund may be exposed to risk of loss. Further,
unanticipated changes in interest rates or stock price movements
may result in a poorer overall performance for the fund than if
it had not entered into futures contracts on debt securities or
stock indexes. Also, the successful use of futures depends upon
the underlying fund investment advisor's ability to predict
correctly movements in the direction of the market.
In addition, the market prices of futures contracts may be
affected by certain factors. First, all participants in the
futures market are subject to margin deposit and maintenance
requirements. Rather than meeting additional margin deposit
requirements, investors may close futures contracts through
offsetting transactions which could distort the normal
relationship between the securities and futures markets. Second,
from the point of view of speculators, the deposit requirements
in the futures market are less onerous than margin requirements
in the securities market. Therefore, increased participation by
speculators in the futures market also may cause temporary price
distortions, although speculators generally serve an important
function by bringing liquidity to the futures markets. When
purchasing a futures contract, a fund must deposit in a
segregated account cash or high quality debt instruments equal in
value to the current value of the underlying instruments less the
margin deposit.
Finally, positions in futures contracts may be closed out
only on an exchange or board of trade which provides a secondary
market for such futures. There is no assurance that a liquid
secondary market on an exchange or board of trade will exist for
any particular contract or at any particular time.
<PAGE>
OPTIONS ON FUTURES CONTRACTS. An underlying fund also may
purchase and sell listed put and call options on futures
contracts. An option on a futures contract gives the purchaser
the right, in return for the premium paid, to assume a position
in a futures contract (a long position if the option is a call
and a short position if the option is a put), at a specified
exercise price at any time during the option period. When an
option on a futures contract is exercised, delivery of the
futures position is accompanied by cash representing the
difference between the current market price of the futures
contract and the exercise price of the option. The fund may
purchase put options on futures contracts in lieu of, and for the
same purpose as, a sale of a futures contract. It also may
purchase such put options in order to hedge a long position in
the underlying futures contract in the same manner as it
purchases "protective puts" on securities.
<PAGE>
PART C. OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements
(1) Part A for The GCG Trust (Multiple Allocation Series, Fully
Managed Series, Limited Maturity Bond Series, Natural
Resources Series, Real Estate Series, All-Growth Series,
Capital Appreciation Series, Rising Dividends Series,
Emerging Markets Series, Value Equity Series, Strategic
Equity Series, Small Cap Series, and Liquid Asset Series):
Financial Highlights
(Not applicable for the Small Cap Series, which
commenced operations January 2, 1996) (15)
Part A for Market Manager Series:
Financial Highlights (15)
Part B for The GCG Trust (Multiple Allocation Series, Fully
Managed Series, Limited Maturity Bond Series, Natural
Resources Series, Real Estate Series, All-Growth Series,
Capital Appreciation Series, Rising Dividends Series,
Emerging Markets Series, Value Equity Series, Strategic
Equity Series, Small Cap Series, and Liquid Asset Series):
The audited financial statements (for all series except the
Small Cap Series) dated as of December 31, 1995 are
incorporated by reference from the Trust's Annual Report
dated as of December 31, 1995.
Statements of Assets and Liabilities
Statements of Operations
Statements of Changes in Net Assets
Statements of Investments
Notes to Financial Statements
Report of Ernst & Young LLP, Independent Auditors
(2) Part A for The Fund For Life Series of The GCG Trust:
Financial Highlights
Part B for The Fund For Life Series of The GCG Trust: The
audited financial statements dated as of December 31, 1995
are incorporated by reference from The Fund For Life's
Annual Report dated as of December 31, 1995.
Statement of Net Assets
Statement of Operations
Statement of Changes in Net Assets
Notes to Financial Statements
Report of Ernst & Young LLP, Independent Auditors
- 1 -
<PAGE>
(b) Exhibits (the number of each exhibit relates to the exhibit
designation in Form N-1A):
(1) Restated Agreement and Declaration of Trust (15)
(2) By-laws(2)
(3) Not Applicable
(4) Not Applicable
(5) (a) (i) (A) Form of Management Agreement (on behalf of all
Series except The Fund For Life)(1)
(B) Form of Addendum to Management Agreement (adding
the Strategic Equity Series)(1)
(C) Form of Addendum to Management Agreement (adding
the Small Cap Series)(14)
(ii) Form of Management Agreement (for The Fund For Life)(3)
(b) Portfolio Management Agreements
(i) (A) Van Eck Associates Corporation(4)
(B) Form of Addendum to Portfolio Management
Agreement(5)
(C) Form of Addendum to Portfolio Management
Agreement(6)
(ii) T. Rowe Price Associates, Inc.(7)
(iii) (A) Zweig Advisors Inc.(1)
(B) Form of Addendum to Portfolio Management
Agreement(1)
(C) Form of Addendum to Portfolio Management
Agreement(1)
(D) Form of Addendum to Portfolio Management Agreement
(adding Strategic Equity Series)(1)
(iv) (A) Chancellor Capital Management, Inc.(4)
(B) Form of Addendum to Portfolio Management
Agreement(5)
(C) Form of Assignment Agreement(4)
(D) Form of Addendum to Portfolio Management
Agreement(6)
(v) (A) Form of Portfolio Management Agreement among the
Trust, Directed Services, Inc., and Bankers Trust
Company(8)
(B) Form of Addendum to the Portfolio Management
Agreement(5)
- 2 -
<PAGE>
(C) Form of Addendum to the Portfolio Management
Agreement (adding the Market Manager Series)9
(vi) (A) Form of Portfolio Management Agreement among the
Trust, Directed Services, Inc., and Kayne,
Anderson Investment Management, Inc.(5)
(B) Form of Substitution Agreement(6)
(C) Form of Addendum to Portfolio Management
Agreement(6)
(vii) Portfolio Management Agreement among the
Trust, Directed Services, Inc., and Warburg,
Pincus Counsellors, Inc.(9)
(viii) Form of Portfolio Management Agreement among
the Trust, Directed Services, Inc., and Eagle
Asset Management, Inc.(10)
(ix) Portfolio Management Agreement among the
Trust, Directed Services, Inc., and E.I.I.
Realty Securities, Inc.(7)
(x) Portfolio Management Agreement among the
Trust, Directed Services, Inc., and Fred
Alger Management, Inc.(14)
(c) Form of Sub-Investment Advisory Agreement between
Bankers Trust Company and BT Fund Managers
(International) Limited for the Emerging Markets
Series(11)
(d) Form of Administrative Services Agreement for The Fund
For Life(3)
(e) Administration and Fund Accounting Agreement among the
Trust, Directed Services, Inc., and The Shareholder
Services Group, Inc.(6)
(6) (i) Distribution Agreement(10)
(ii) Form of Addendum to the Distribution
Agreement (adding The Fund For Life, Zero
Target 2002 Series, and Capital Appreciation
Series)(3)
(iii) Form of Addendum to the Distribution
Agreement (adding the Market Manager Series
and Value Equity Series)(10)
(iv) Form of Addendum to the Distribution
Agreement (adding the Strategic Equity
Series)(1)
(v) Form of Addendum to the Distribution
Agreement (adding the Small Cap Series)(14)
(7) Not Applicable
(8) (a) (i) Custodian Agreement(4)
(ii) Form of Addendum to Custodian Agreement(5)
- 3 -
<PAGE>
(iii) Form of Addendum to Custodian Agreement
(adding the Market Manager Series and Value
Equity Series)(10)
(iv) Form of Addendum to the Custodian Agreement
(adding the Strategic Equity Series)(1)
(v) Form of Addendum to the Custodian Agreement
(adding the Small Cap Series)(14)
(9) (a) (i) Transfer Agency and Service Agreement(12)
(ii) Form of Addendum to the Transfer Agency and
Service Agreement for The Fund For Life, Zero
Target 2002 Series, and Capital Appreciation
Series(3)
(b) (i) Form of Organizational Agreement for Golden
American Life Insurance Company(12)
(ii) Assignment Agreement for Organizational
Agreement(13)
(iii) Form of Organizational Agreement for The
Mutual Benefit Life Insurance Company(13)
(iv) Assignment Agreement for Organizational
Agreement(13)
(v) Form of Addendum to Organizational Agreement
(adding Market Manager Series and Value
Equity Series)(10)
(vi) Form of Addendum to the Organizational
Agreement (adding the Strategic Equity
Series)(1)
(vii) Form of Addendum to the Organizational
Agreement (adding the Small Cap Series)(14)
(c) (i) Form of Settlement Agreement for Golden
American Life Insurance Company(12)
(ii) Assignment Agreement for Settlement
Agreement(13)
(iii) Form of Settlement Agreement for The Mutual
Benefit Life Insurance Company(13)
(iv) Form of Assignment Agreement for Settlement
Agreement(13)
(d) Indemnification Agreement(13)
(e) (i) Form of Expense Reimbursement Agreement(13)
(ii) Amendment No. 1 to the Expense Reimbursement
Agreement(4)
(iii) Amendment No. 2 to the Expense Reimbursement
Agreement(4)
(iv) Amendment No. 3 to the Expense Reimbursement
Agreement(4)
(v) Amendment No. 4 to the Expense Reimbursement
Agreement(4)
(10) Opinion and Consent of Counsel(12)
(11) Consent of Ernst & Young LLP
(12) Not Applicable
- 4 -
<PAGE>
(13) (a) Initial Capital Agreement(12)
(b) Form of Initial Capital Agreement for The Fund For
Life(4)
(14) Not Applicable
(15) Not Applicable
(16) Schedule showing computation of performance quotations
provided in response to Item 22 (unaudited)(7)
(17) Financial Data Schedules
(18) Secretary's Certificate pursuant to Rule 483(b)(10)
(19) Powers of Attorney
- -----------------------
(1) Incorporated by reference to Post-Effective Amendment No. 22 to the
Registration Statement on Form N-1A of The GCG Trust as filed on September
26, 1995, File No. 33-23512.
(2) Incorporated by reference to the original Registration Statement on Form
N-1A of Western Capital Specialty Managers Trust as filed on August 4,
1988, File No. 33-23512.
(3) Incorporated by reference to Post-Effective Amendment No. 8 to the
Registration Statement on Form N-1A of the Specialty Managers Trust as
filed on December 4, 1991, File No. 33-23512.
(4) Incorporated by reference to Post-Effective Amendment No. 12 to the
Registration Statement on Form N-1A of The GCG Trust as filed on May 3,
1993, File No. 33-23512.
(5) Incorporated by reference to Post-Effective Amendment No. 13 to the
Registration Statement on Form N-1A of The GCG Trust as filed on August 2,
1993, File No. 33-23512.
(6) Incorporated by reference to Post-Effective Amendment No. 20 to the
Registration Statement on Form N-1A of The GCG Trust as filed on April 28,
1995, File No. 33-23512.
(7) Incorporated by reference to Post-Effective Amendment No. 19 to the
Registration Statement on Form N-1A of The GCG Trust as filed on March 2,
1995, File No. 33-23512.
(8) Incorporated by reference to Post-Effective Amendment No. 11 to the
Registration Statement on Form N-1A of The GCG Trust as filed on April 30,
1992, File No. 33-23512.
(9) Incorporated by reference to Post-Effective Amendment No. 17 to the
Registration Statement on Form N-1A of The GCG Trust as filed on August 5,
1994, File No. 33-23512.
(10) Incorporated by reference to Post-Effective Amendment No. 18 to the
Registration Statement on Form N-1A of The GCG Trust as filed on
October 17, 1994, File No. 33-23512.
(11) Incorporated by reference to Post-Effective Amendment No. 14 to the
Registration Statement on Form N-1A of The GCG Trust as filed on
October 1, 1993, File No. 33-23512.
- 5 -
<PAGE>
(12) Incorporated by reference to Pre-Effective Amendment No. 1 to the
Registration Statement on Form N-1A of Western Capital Specialty
Managers Trust as filed on November 23, 1988, File No. 33-23512.
(13) Incorporated by reference to Post-Effective Amendment No. 6 to the
Registration Statement on Form N-1A of The Specialty Managers Trust as
filed on April 23, 1991, File No. 33-23512.
(14) Incorporated by reference to Post-Effective Amendment No. 24 to the
Registration Statement on Form N-1A of The GCG Trust as filed on
December 22, 1995, File No. 33-23512.
(15) Incorporated by reference to Post-Effective Amendment No. 25 to the
Registration Statement on Form N-1A of The GCG Trust as filed on
May 2, 1996, File No. 33-23512.
ITEM 25. PERSONS CONTROLLED BY OR UNDER CONTROL WITH REGISTRANT.
As of the date of this Post-Effective Amendment, a separate account of
The Mutual Benefit Life Insurance Company ("MBL"), separate accounts
of Hartford Life Insurance Company, separate accounts of Security
Equity Life Insurance Company, and Golden American Life Insurance
Company and its separate accounts own all of the outstanding shares of
Registrant.
MBL, Hartford Life Insurance Company, Security Equity Life Insurance
Company, and Golden American Life Insurance Company are required to
vote fund shares in accordance with instructions received from owners
of variable life insurance and annuity contracts funded by separate
accounts of that company.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES.
As of the date of this Registration Statement, there are 9
shareholders of record of Registrant's shares.
ITEM 27. INDEMNIFICATION.
Reference is made to Article V, Section 5.4 of the Registrant's
Agreement and Declaration of Trust, which is incorporated by reference
herein.
Pursuant to Indemnification Agreements between the Trust and each
Independent Trustee, the Trust indemnifies each Independent Trustee
against any liabilities resulting from the Independent Trustee's
serving in such capacity, provided that the Trustee has not engaged in
certain disabling conduct.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors,
officers and controlling persons of the Registrant by the Registrant
pursuant to the Trust's Agreement and Declaration of Trust, its By-
laws or otherwise, the Registrant is aware that in the opinion of
the Securities and Exchange Commission, such indemnification is against
public policy as expressed in the Act and, therefore, is unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid
by directors, officers or controlling persons or the Registrant in
connection with the successful defense of any act, suit or proceeding)
is asserted by such directors, officers or controlling persons in
connection with the shares being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a
- 6 -
<PAGE>
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issues.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
DIRECTED SERVICES, INC.
The Manager of all Series of the Trust is Directed Services, Inc.
The directors and officers of the Manager have, during the past two
fiscal years, had substantial affiliations as follows. In addition to
Directed Services, Inc., BT Variable, Inc. and Golden American Life
Insurance Company have a principal business address of 1001 Jefferson
Street, Wilmington, Delaware 19801. Unless otherwise stated, the
principal business address of each other organization listed is 280
Park Avenue, New York, New York 10017.
Name Position With Adviser Other Affiliations
---- --------------------- ------------------
Paul Daniel Borge, Jr. Director Managing Director,
Bankers Trust Company;
Director, Golden American
Life Insurance Company,
Whitewood Properties Corp.
and BT Variable, Inc.
Richard A. Marin Director Managing Director,
Bankers Trust Company,
Director, Whitewood
Properties Corp., BT
Variable, Inc., and
Golden American Life
Insurance Company.
Terry L. Kendall Chief Executive Managing Director,Bankers
Officer and Director Trust Company; President,
Director, and Chief
Executive Officer, Golden
American Life Insurance
Company; President,
Director, and Chief
Executive Officer, BT
Variable, Inc., 1993 to
present; Director,
Whitewood Properties
Corp.; President and
Chief Executive Officer,
United Pacific Life
Insurance Company, 1983
to 1993.
Mary Bea Wilkinson President Senior Vice President,
Golden American Life
Insurance Company and BT
Variable, Inc.; formerly,
Assistant Vice President,
CIGNA Insurance Companies
and Vice President and
Controller, United
Pacific Life Insurance
Company.
Barnett Chernow Executive Vice Executive Vice President,
President Golden American Life
Insurance Company;
- 7 -
<PAGE>
Executive Vice President,
BT Variable, Inc.; Senior
Vice President and Chief
Financial Officer,
Reliance Insurance
Company, August 1977-
July 1993.
Mitchell R. Katcher Executive Vice Executive Vice President
President of BT Variable,
Inc. and Golden American
Life Insurance Company;
formerly, Consulting
Actuary, Tillinghast.
Myles R. Tashman Executive Vice Executive Vice President
President and Secretary, Golden
American Life Insurance
Company and BT Variable,
Inc.; formerly Senior
Vice President and
General Counsel, United
Pacific Life Insurance
Company.
ZWEIG ADVISORS INC.
For information regarding Zweig Advisors Inc., reference is made to Form
ADV of Zweig Advisors Inc., SEC File No. 801-27366, which is incorporated
by reference.
T. ROWE PRICE ASSOCIATES, INC.
For information regarding T. Rowe Price Associates, Inc., reference is made
to Form ADV of T. Rowe Price Associates, Inc., SEC File No. 801-00856,
which is incorporated by reference.
VAN ECK ASSOCIATES CORPORATION
For information regarding Van Eck Associates Corporation, reference is made
to Item 28 on Form N-1A for Van Eck Funds, Registration No. 2-97596, which
is incorporated by reference.
WARBURG, PINCUS COUNSELLORS, INC.
For information regarding Warburg, Pincus Counsellors, Inc., reference
is made to Form ADV of Warburg, Pincus Counsellors, Inc., SEC File No.
801-7321, which is incorporated by reference.
KAYNE, ANDERSON INVESTMENT MANAGEMENT, L.P.
For information regarding Kayne, Anderson Investment Management, L.P,
reference is made to Form ADV of Kayne, Anderson Investment Management,
L.P., SEC File No. 801-24241, which is incorporated by reference.
- 8 -
<PAGE>
EAGLE ASSET MANAGEMENT, INC.
For information regarding Eagle Asset Management, Inc., reference is made
to Form ADV of Eagle Asset Management, Inc., SEC File No. 801-21343, which
is incorporated by reference.
E.I.I. REALTY SECURITIES, INC.
For information regarding E.I.I. Realty Securities, Inc., reference is made
to Form ADV of E.I.I. Realty Securities, Inc., SEC File No. 801-44099,
which is incorporated herein by reference.
FRED ALGER MANAGEMENT, INC.
For information regarding Fred Alger Management, Inc., reference is made to
Form ADV of Fred Alger Management, Inc., SEC File No. 801-6709, which is
incorporated by reference.
CHANCELLOR TRUST COMPANY
For information regarding Chancellor Trust Company, Inc. ("CTC"), reference
is made to Form ADV of Chancellor Capital Management, Inc. ("CCM"), the
direct parent of CTC, SEC File No. 801-9087, which is incorporated by
reference. Officers and directors of CCM have the same titles and
responsibilities in CTC.
BANKERS TRUST COMPANY
For information regarding Bankers Trust Company, reference is made to Part
C of the Registration Statement of BT Investment Funds, SEC File Nos.
33-07404, and 811-7460, which is incorporated by reference.
ITEM 29. PRINCIPAL UNDERWRITERS.
(a) DIRECTED SERVICES, INC. serves as Distributor of Shares of The
GCG Trust. Directed Services, Inc. also serves as principal
underwriter to DSI Series Fund, Inc.
(b) The following officers of Directed Services, Inc. hold positions
with the registrant: Terry Kendall (President and Chairman),
Barnett Chernow (Vice President), Myles R. Tashman (Secretary),
and Mary Bea Wilkinson (Treasurer).
(c) Not Applicable
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS.
The Trust maintains its books of account for each Series as required
by Section 31(a) of the 1940 Act and rules thereunder at its principal
office at 280 Park Avenue, New York, New York 10017.
ITEM 31. MANAGEMENT SERVICES.
There are no management-related service contracts not discussed in
Part A or Part B.
- 9 -
<PAGE>
ITEM 32. UNDERTAKINGS.
(a) Not Applicable
(b) Not Applicable
(c) Registrant undertakes to furnish to each person to whom a
prospectus for The GCG Trust or The Fund For Life is provided a
copy of the Trust's or The Fund For Life's latest Annual Report
upon request and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all the requirements
for effectivess of this Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1933 and has duly caused this Post-Effective Amendment No. 25
to the Registration Statement on Form N-1A (File No. 33-23512) to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Wilmington, and the State of Delaware, on April 29, 1996.
THE GCG TRUST
----------------------------
(Registrant)
----------------------------
Terry L. Kendall*
President
*By: /s/ Myles R. Tashman
---------------------
Myles R. Tashman
as Attorney-in-Fact
Pursuant to the requirements of the Securities Act of 1933, this Post-Effective
Amendment No. 25 to the Registration Statement on Form N-1A (File No. 33-23512)
has been duly signed below by the following persons on behalf of The GCG Trust
in the capacity indicated on April 29, 1996.
SIGNATURE TITLE
---------------------- Chairman of the Board
Terry L. Kendall* and President
---------------------- Trustee
Robert A. Grayson*
---------------------- Trustee
John L. Murphy*
---------------------- Trustee
M. Norvel Young*
---------------------- Trustee
Roger B. Vincent*
---------------------- Treasurer
Mary Bea Wilkinson*
*By: /s/ Myles R. Tashman
---------------------
Myles R. Tashman
as Attorney-in-Fact
<PAGE>
EXHIBIT LIST
NUMBER: EXHIBIT NAME: PAGE:
11 Consent of Ernst & Young LLP EX-99.B11
17 Financial Data Schedules
EX-27.01
EX-27.02
EX-27.03
EX-27.04
EX-27.05
EX-27.06
EX-27.07
EX-27.08
EX-27.09
EX-27.10
EX-27.11
EX-27.12
EX-27.13
EX-27.14
19 Powers of Attorney EX-99.B19
<PAGE>
11 -- CONSENT OF ERNST & YOUNG LLP
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Financial
Highlights," "Independent Auditors" and "Financial Statements" and to the
incorporation by reference of our reports dated February 9, 1996 on the
financial statements of the Series comprising The GCG Trust included in this
Registration Statement (Form N-1A No. 33-23512) of The GCG Trust.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
New York, New York
May 10, 1996
19 -- POWERS OF ATTORNEY
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned, being the duly
elected Persident and Chairman of the Board of Trustees and a Trustee of The GCG
Trust (the "Trust") and a duly elected Governor of the Managed Global Account of
Separate Account D (the "Account") of Golden American Life Insurance Company,
constitutes and appoints Myles R. Tashman, and Marilyn Talman, and each of them,
his true and lawful attorneys-in-fact and agents with full power of substitution
and resubstitution for him in his name, place and stead, in any and all
capacities, to sign on behalf of the Trust and the Account registration
statements and applications for exemptive relief, and any and all amendments
thereto, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents full power and authority to do and perform
each and every act and thing requisite and necessary to be done, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
affirming all that said attorneys-in-fact and agents, or any of them, or his or
her substitute or substitutes, may lawfully do or cause to be done by virtue
thereof.
Date: April 12, 1996
/s/ Terry L. Kendall
---------------------------
Terry L. Kendall
Chairman of the Board,
President, Trustee
and Governor
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned, being a duly
elected Trustee of The GCG Trust (the "Trust") and a duly elected Governor of
the Managed Global Account of Separate Account D (the "Account") of Golden
American Life Insurance Company, constitutes and appoints Myles R. Tashman, and
Marilyn Talman, and each of them, his true and lawful attorneys-in-fact and
agents with full power of substitution and resubstitution for him in his name,
place and stead, in any and all capacities, to sign on behalf of the Trust and
the Account registration statements and applications for exemptive relief, and
any and all amendments thereto, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and necessary
to be done, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and affirming all that said attorneys-in-fact and
agents, or any of them, or his or her substitute or substitutes, may lawfully do
or cause to be done by virtue thereof.
Date: April 10, 1996
/s/ Robert A. Grayson
---------------------------
Robert A. Grayson
Trustee and Governor
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned, being a duly
elected Trustee of The GCG Trust (the "Trust") and a duly elected Governor of
the Managed Global Account of Separate Account D (the "Account") of Golden
American Life Insurance Company, constitutes and appoints Myles R. Tashman, and
Marilyn Talman, and each of them, his true and lawful attorneys-in-fact and
agents with full power of substitution and resubstitution for him in his name,
place and stead, in any and all capacities, to sign on behalf of the Trust and
the Account registration statements and applications for exemptive relief, and
any and all amendments thereto, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and necessary
to be done, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and affirming all that said attorneys-in-fact and
agents, or any of them, or his or her substitute or substitutes, may lawfully do
or cause to be done by virtue thereof.
Date: April 23, 1996
/s/ John L. Murphy
---------------------------
John L. Murphy
Trustee and Governor
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned, being a duly
elected Trustee of The GCG Trust (the "Trust") and a duly elected Governor of
the Managed Global Account of Separate Account D (the "Account") of Golden
American Life Insurance Company, constitutes and appoints Myles R. Tashman, and
Marilyn Talman, and each of them, his true and lawful attorneys-in-fact and
agents with full power of substitution and resubstitution for him in his name,
place and stead, in any and all capacities, to sign on behalf of the Trust and
the Account registration statements and applications for exemptive relief, and
any and all amendments thereto, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and necessary
to be done, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and affirming all that said attorneys-in-fact and
agents, or any of them, or his or her substitute or substitutes, may lawfully do
or cause to be done by virtue thereof.
Date: April 10, 1996
/s/ M. Norvel Young
---------------------------
M. Norvel Young
Trustee and Governor
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned, being a duly
elected Trustee of The GCG Trust (the "Trust") and a duly elected Governor of
the Managed Global Account of Separate Account D (the "Account") of Golden
American Life Insurance Company, constitutes and appoints Myles R. Tashman, and
Marilyn Talman, and each of them, his true and lawful attorneys-in-fact and
agents with full power of substitution and resubstitution for him in his name,
place and stead, in any and all capacities, to sign on behalf of the Trust and
the Account registration statements and applications for exemptive relief, and
any and all amendments thereto, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and necessary
to be done, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and affirming all that said attorneys-in-fact and
agents, or any of them, or his or her substitute or substitutes, may lawfully do
or cause to be done by virtue thereof.
Date: April 9, 1996
/s/ Roger B. Vincent
---------------------------
Roger B. Vincent
Trustee and Governor
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned, being the duly
elected Treasurer of The GCG Trust (the "Trust") constitutes and appoints Myles
R. Tashman, and Marilyn Talman, and each of them, her true and lawful attorneys-
in-fact and agents with full power of substitution and resubstitution for her in
her name, place and stead, in any and all capacities, to sign on behalf of the
Trust and the Account registration statements and applications for exemptive
relief, and any and all amendments thereto, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as she
might or could do in person, hereby ratifying and affirming all that said
attorneys-in-fact and agents, or any of them, or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
Date: April 29, 1996
/s/ Mary Bea Wilkinson
---------------------------
Mary Bea Wilkinson
Treasurer
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> GCG TRUST MULTIPLE ALLOCATION SERIES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 295,333,987
<INVESTMENTS-AT-VALUE> 310,499,612
<RECEIVABLES> 2,932,210
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 313,431,822
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 5,740,902
<TOTAL-LIABILITIES> 5,740,902
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 286,468,604
<SHARES-COMMON-STOCK> 24,570,757
<SHARES-COMMON-PRIOR> 26,414,658
<ACCUMULATED-NII-CURRENT> 3,272,200
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 2,784,501
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 15,165,615
<NET-ASSETS> 307,690,920
<DIVIDEND-INCOME> 3,076,889
<INTEREST-INCOME> 13,502,765
<OTHER-INCOME> 0
<EXPENSES-NET> 3,076,344
<NET-INVESTMENT-INCOME> 13,503,310
<REALIZED-GAINS-CURRENT> 21,863,102
<APPREC-INCREASE-CURRENT> 17,506,930
<NET-CHANGE-FROM-OPS> 52,873,342
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (10,231,220)
<DISTRIBUTIONS-OF-GAINS> (11,548,721)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 681,202
<NUMBER-OF-SHARES-REDEEMED> (4,270,291)
<SHARES-REINVESTED> 1,745,188
<NET-CHANGE-IN-ASSETS> 8,298,863
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (7,529,770)
<GROSS-ADVISORY-FEES> 3,056,095
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,076,344
<AVERAGE-NET-ASSETS> 305,661,341
<PER-SHARE-NAV-BEGIN> 11.33
<PER-SHARE-NII> 0.58
<PER-SHARE-GAIN-APPREC> 1.56
<PER-SHARE-DIVIDEND> (0.45)
<PER-SHARE-DISTRIBUTIONS> (0.50)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 12.52
<EXPENSE-RATIO> 1.01
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 2
<NAME> GCG TRUST FULLY MANAGED SERIES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 105,756,752
<INVESTMENTS-AT-VALUE> 118,119,291
<RECEIVABLES> 893,227
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 119,012,518
<PAYABLE-FOR-SECURITIES> 174,756
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 248,813
<TOTAL-LIABILITIES> 423,569
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 107,221,217
<SHARES-COMMON-STOCK> 8,601,294
<SHARES-COMMON-PRIOR> 8,535,516
<ACCUMULATED-NII-CURRENT> 901,688
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (1,896,482)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 12,362,526
<NET-ASSETS> 118,588,949
<DIVIDEND-INCOME> 2,000,690
<INTEREST-INCOME> 2,873,190
<OTHER-INCOME> 0
<EXPENSES-NET> 1,110,105
<NET-INVESTMENT-INCOME> 3,763,775
<REALIZED-GAINS-CURRENT> (1,084,355)
<APPREC-INCREASE-CURRENT> 18,065,630
<NET-CHANGE-FROM-OPS> 20,745,050
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (2,873,042)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 918,348
<NUMBER-OF-SHARES-REDEEMED> (1,061,671)
<SHARES-REINVESTED> 209,101
<NET-CHANGE-IN-ASSETS> 18,734,802
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (801,172)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,102,160
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,110,105
<AVERAGE-NET-ASSETS> 110,275,101
<PER-SHARE-NAV-BEGIN> 11.70
<PER-SHARE-NII> 0.45
<PER-SHARE-GAIN-APPREC> 1.98
<PER-SHARE-DIVIDEND> (0.34)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 13.79
<EXPENSE-RATIO> 1.01
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 3
<NAME> GCG TRUST LIMITED MATURITY BOND SERIES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 88,542,644
<INVESTMENTS-AT-VALUE> 89,271,751
<RECEIVABLES> 867,735
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 90,139,486
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 58,118
<TOTAL-LIABILITIES> 58,118
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 84,355,576
<SHARES-COMMON-STOCK> 8,079,425
<SHARES-COMMON-PRIOR> 7,235,836
<ACCUMULATED-NII-CURRENT> 4,807,767
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 188,918
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 729,107
<NET-ASSETS> 90,081,368
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 5,332,243
<OTHER-INCOME> 0
<EXPENSES-NET> 522,864
<NET-INVESTMENT-INCOME> 4,809,379
<REALIZED-GAINS-CURRENT> 2,463,897
<APPREC-INCREASE-CURRENT> 2,326,656
<NET-CHANGE-FROM-OPS> 9,599,932
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,239,979
<NUMBER-OF-SHARES-REDEEMED> (2,396,390)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 17,868,409
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (2,276,591)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 516,872
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 522,864
<AVERAGE-NET-ASSETS> 86,207,530
<PER-SHARE-NAV-BEGIN> 9.98
<PER-SHARE-NII> 0.60
<PER-SHARE-GAIN-APPREC> 0.57
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 11.15
<EXPENSE-RATIO> 0.61
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 4
<NAME> GCG TRUST NATURAL RESOURCES SERIES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 22,670,938
<INVESTMENTS-AT-VALUE> 26,596,931
<RECEIVABLES> 1,405,883
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 48,000
<TOTAL-ASSETS> 28,050,814
<PAYABLE-FOR-SECURITIES> 813,021
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 90,775
<TOTAL-LIABILITIES> 903,796
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 22,706,248
<SHARES-COMMON-STOCK> 1,804,987
<SHARES-COMMON-PRIOR> 2,369,573
<ACCUMULATED-NII-CURRENT> 44,414
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 470,559
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3,925,797
<NET-ASSETS> 27,147,018
<DIVIDEND-INCOME> 494,731
<INTEREST-INCOME> 59,501
<OTHER-INCOME> 0
<EXPENSES-NET> 294,547
<NET-INVESTMENT-INCOME> 259,685
<REALIZED-GAINS-CURRENT> 851,341
<APPREC-INCREASE-CURRENT> 1,526,580
<NET-CHANGE-FROM-OPS> 2,637,606
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (224,208)
<DISTRIBUTIONS-OF-GAINS> (349,161)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 762,645
<NUMBER-OF-SHARES-REDEEMED> (1,365,405)
<SHARES-REINVESTED> 38,174
<NET-CHANGE-IN-ASSETS> (5,731,503)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (22,684)
<GROSS-ADVISORY-FEES> 291,869
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 294,547
<AVERAGE-NET-ASSETS> 29,174,157
<PER-SHARE-NAV-BEGIN> 13.88
<PER-SHARE-NII> 0.15
<PER-SHARE-GAIN-APPREC> 1.34
<PER-SHARE-DIVIDEND> (0.13)
<PER-SHARE-DISTRIBUTIONS> (0.20)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 15.04
<EXPENSE-RATIO> 1.01
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 5
<NAME> GCG TRUST REAL ESTATE SERIES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 31,149,608
<INVESTMENTS-AT-VALUE> 34,486,872
<RECEIVABLES> 397,480
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 120,442
<TOTAL-ASSETS> 35,004,794
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 29,875
<TOTAL-LIABILITIES> 29,875
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 31,219,617
<SHARES-COMMON-STOCK> 2,770,209
<SHARES-COMMON-PRIOR> 3,306,077
<ACCUMULATED-NII-CURRENT> 609,884
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (191,846)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3,337,264
<NET-ASSETS> 34,974,919
<DIVIDEND-INCOME> 2,248,846
<INTEREST-INCOME> 117,161
<OTHER-INCOME> 0
<EXPENSES-NET> 350,806
<NET-INVESTMENT-INCOME> 2,015,201
<REALIZED-GAINS-CURRENT> 39,122
<APPREC-INCREASE-CURRENT> 3,141,679
<NET-CHANGE-FROM-OPS> 5,196,002
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1,405,317)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 283,832
<NUMBER-OF-SHARES-REDEEMED> (931,767)
<SHARES-REINVESTED> 112,067
<NET-CHANGE-IN-ASSETS> (2,361,276)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (230,968)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 347,823
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 350,806
<AVERAGE-NET-ASSETS> 34,790,167
<PER-SHARE-NAV-BEGIN> 11.29
<PER-SHARE-NII> 0.75
<PER-SHARE-GAIN-APPREC> 1.12
<PER-SHARE-DIVIDEND> (0.53)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 12.63
<EXPENSE-RATIO> 1.01
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 6
<NAME> GCG TRUST ALL-GROWTH SERIES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 86,262,449
<INVESTMENTS-AT-VALUE> 93,636,351
<RECEIVABLES> 27,546
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 19,424
<TOTAL-ASSETS> 93,683,321
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 484,919
<TOTAL-LIABILITIES> 484,919
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 84,483,605
<SHARES-COMMON-STOCK> 6,764,223
<SHARES-COMMON-PRIOR> 6,006,022
<ACCUMULATED-NII-CURRENT> 267,485
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1,073,410
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 7,373,902
<NET-ASSETS> 93,198,402
<DIVIDEND-INCOME> 999,437
<INTEREST-INCOME> 1,025,963
<OTHER-INCOME> 0
<EXPENSES-NET> 838,821
<NET-INVESTMENT-INCOME> 1,186,579
<REALIZED-GAINS-CURRENT> 6,321,047
<APPREC-INCREASE-CURRENT> 8,831,778
<NET-CHANGE-FROM-OPS> 16,339,404
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (919,094)
<DISTRIBUTIONS-OF-GAINS> (3,826,657)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,383,667
<NUMBER-OF-SHARES-REDEEMED> (971,114)
<SHARES-REINVESTED> 345,648
<NET-CHANGE-IN-ASSETS> 21,980,799
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (1,420,982)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 832,889
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 838,821
<AVERAGE-NET-ASSETS> 83,352,828
<PER-SHARE-NAV-BEGIN> 11.86
<PER-SHARE-NII> 0.18
<PER-SHARE-GAIN-APPREC> 2.47
<PER-SHARE-DIVIDEND> (0.14)
<PER-SHARE-DISTRIBUTIONS> (0.59)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 13.78
<EXPENSE-RATIO> 1.01
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 7
<NAME> GCG TRUST LIQUID ASSETS SERIES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 38,602,533
<INVESTMENTS-AT-VALUE> 38,602,533
<RECEIVABLES> 84,880
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 38,687,413
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 98,724
<TOTAL-LIABILITIES> 98,724
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 38,588,876
<SHARES-COMMON-STOCK> 38,588,906
<SHARES-COMMON-PRIOR> 46,122,242
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (187)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 38,588,689
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 2,544,008
<OTHER-INCOME> 0
<EXPENSES-NET> 258,158
<NET-INVESTMENT-INCOME> 2,285,850
<REALIZED-GAINS-CURRENT> 51
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 2,285,901
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (2,285,850)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 39,465,529
<NUMBER-OF-SHARES-REDEEMED> (49,284,713)
<SHARES-REINVESTED> 2,285,849
<NET-CHANGE-IN-ASSETS> (7,533,284)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (238)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 254,546
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 258,158
<AVERAGE-NET-ASSETS> 42,403,616
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.05
<PER-SHARE-GAIN-APPREC> (0.00)
<PER-SHARE-DIVIDEND> (0.05)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.61
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 8
<NAME> GCG TRUST CAPITAL APPREC SERIES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 105,880,204
<INVESTMENTS-AT-VALUE> 122,310,953
<RECEIVABLES> 186,374
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 122,497,327
<PAYABLE-FOR-SECURITIES> 157,047
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 113,040
<TOTAL-LIABILITIES> 270,087
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 104,344,471
<SHARES-COMMON-STOCK> 9,045,920
<SHARES-COMMON-PRIOR> 7,837,978
<ACCUMULATED-NII-CURRENT> 379,294
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1,072,726
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 16,430,749
<NET-ASSETS> 122,227,240
<DIVIDEND-INCOME> 2,153,465
<INTEREST-INCOME> 529,149
<OTHER-INCOME> 0
<EXPENSES-NET> 1,062,664
<NET-INVESTMENT-INCOME> 1,619,950
<REALIZED-GAINS-CURRENT> 10,480,166
<APPREC-INCREASE-CURRENT> 15,080,708
<NET-CHANGE-FROM-OPS> 27,180,824
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1,240,656)
<DISTRIBUTIONS-OF-GAINS> (9,067,480)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,496,478
<NUMBER-OF-SHARES-REDEEMED> (1,055,510)
<SHARES-REINVESTED> 766,974
<NET-CHANGE-IN-ASSETS> 33,337,592
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (339,960)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,055,352
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,062,664
<AVERAGE-NET-ASSETS> 105,631,788
<PER-SHARE-NAV-BEGIN> 11.34
<PER-SHARE-NII> 0.19
<PER-SHARE-GAIN-APPREC> 3.22
<PER-SHARE-DIVIDEND> (0.15)
<PER-SHARE-DISTRIBUTIONS> (1.09)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 13.51
<EXPENSE-RATIO> 1.01
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 9
<NAME> GCG TRUST FUND FOR LIFE SERIES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 274,641
<INVESTMENTS-AT-VALUE> 311,704
<RECEIVABLES> 371
<ASSETS-OTHER> 26,729
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 338,804
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 5,755
<TOTAL-LIABILITIES> 5,755
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 214,969
<SHARES-COMMON-STOCK> 30,416
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 81,017
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 37,063
<NET-ASSETS> 333,049
<DIVIDEND-INCOME> 16,069
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 35,276
<NET-INVESTMENT-INCOME> (19,207)
<REALIZED-GAINS-CURRENT> 82,284
<APPREC-INCREASE-CURRENT> 105,511
<NET-CHANGE-FROM-OPS> 168,587
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (614)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 719
<NUMBER-OF-SHARES-REDEEMED> (116,153)
<SHARES-REINVESTED> 56
<NET-CHANGE-IN-ASSETS> (1,012,937)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,490
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 40,888
<AVERAGE-NET-ASSETS> 828,234
<PER-SHARE-NAV-BEGIN> 9.23
<PER-SHARE-NII> (0.24)
<PER-SHARE-GAIN-APPREC> 1.98
<PER-SHARE-DIVIDEND> 0.02
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.95
<EXPENSE-RATIO> 4.25
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 10
<NAME> GCG TRUST RISING DIVIDENDS SERIES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 64,409,167
<INVESTMENTS-AT-VALUE> 81,153,496
<RECEIVABLES> 127,178
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 12,666
<TOTAL-ASSETS> 81,293,340
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 83,631
<TOTAL-LIABILITIES> 83,631
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 64,800,458
<SHARES-COMMON-STOCK> 6,105,857
<SHARES-COMMON-PRIOR> 4,962,344
<ACCUMULATED-NII-CURRENT> 225,568
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (560,646)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 16,744,329
<NET-ASSETS> 81,209,709
<DIVIDEND-INCOME> 1,244,072
<INTEREST-INCOME> 200,243
<OTHER-INCOME> 0
<EXPENSES-NET> 645,869
<NET-INVESTMENT-INCOME> 798,446
<REALIZED-GAINS-CURRENT> 3,219
<APPREC-INCREASE-CURRENT> 16,739,426
<NET-CHANGE-FROM-OPS> 17,541,091
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (572,878)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,699,595
<NUMBER-OF-SHARES-REDEEMED> (599,318)
<SHARES-REINVESTED> 43,236
<NET-CHANGE-IN-ASSETS> 30,497,550
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (563,865)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 641,200
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 645,869
<AVERAGE-NET-ASSETS> 64,208,060
<PER-SHARE-NAV-BEGIN> 10.22
<PER-SHARE-NII> 0.13
<PER-SHARE-GAIN-APPREC> 3.04
<PER-SHARE-DIVIDEND> (0.09)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 13.30
<EXPENSE-RATIO> 1.01
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 11
<NAME> GCG TRUST MARKET MANAGER SERIES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 50,186,214
<INVESTMENTS-AT-VALUE> 47,450,128
<RECEIVABLES> 129,134
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 761,947
<TOTAL-ASSETS> 48,341,209
<PAYABLE-FOR-SECURITIES> 191,751
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 175,075
<TOTAL-LIABILITIES> 366,826
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 63,338,880
<SHARES-COMMON-STOCK> 5,297,187
<SHARES-COMMON-PRIOR> 6,472,923
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (12,529,260)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (2,835,237)
<NET-ASSETS> 47,974,383
<DIVIDEND-INCOME> 818,975
<INTEREST-INCOME> 234,064
<OTHER-INCOME> 0
<EXPENSES-NET> 834,872
<NET-INVESTMENT-INCOME> 218,167
<REALIZED-GAINS-CURRENT> (12,829,743)
<APPREC-INCREASE-CURRENT> 6,612,101
<NET-CHANGE-FROM-OPS> (5,999,475)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (7,833)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,967,737
<NUMBER-OF-SHARES-REDEEMED> (3,144,286)
<SHARES-REINVESTED> 813
<NET-CHANGE-IN-ASSETS> (17,249,529)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (10,728)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 817,859
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 834,872
<AVERAGE-NET-ASSETS> 54,494,075
<PER-SHARE-NAV-BEGIN> 10.08
<PER-SHARE-NII> 0.04
<PER-SHARE-GAIN-APPREC> (1.06)
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 9.06
<EXPENSE-RATIO> 1.53
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 12
<NAME> GCG TRUST MARKET MANAGER SERIES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 4,879,462
<INVESTMENTS-AT-VALUE> 5,851,699
<RECEIVABLES> 8,388
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 92,817
<TOTAL-ASSETS> 5,952,904
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 483
<TOTAL-LIABILITIES> 483
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 4,979,248
<SHARES-COMMON-STOCK> 494,701
<SHARES-COMMON-PRIOR> 274,824
<ACCUMULATED-NII-CURRENT> 145
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 791
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 972,237
<NET-ASSETS> 5,952,421
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 223,253
<OTHER-INCOME> 0
<EXPENSES-NET> 45,970
<NET-INVESTMENT-INCOME> 177,283
<REALIZED-GAINS-CURRENT> 26,779
<APPREC-INCREASE-CURRENT> 972,237
<NET-CHANGE-FROM-OPS> 1,176,299
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (177,138)
<DISTRIBUTIONS-OF-GAINS> (25,988)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 283,159
<NUMBER-OF-SHARES-REDEEMED> (80,266)
<SHARES-REINVESTED> 16,984
<NET-CHANGE-IN-ASSETS> 3,198,175
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 51,724
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 52,718
<AVERAGE-NET-ASSETS> 5,181,379
<PER-SHARE-NAV-BEGIN> 10.02
<PER-SHARE-NII> 0.37
<PER-SHARE-GAIN-APPREC> 2.06
<PER-SHARE-DIVIDEND> (0.37)
<PER-SHARE-DISTRIBUTIONS> (0.05)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 12.03
<EXPENSE-RATIO> 0.89
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 13
<NAME> GCG TRUST VALUE EQUITY SERIES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 8,672,037
<INVESTMENTS-AT-VALUE> 8,683,884
<RECEIVABLES> 111,175
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 179,303
<TOTAL-ASSETS> 8,974,362
<PAYABLE-FOR-SECURITIES> 900,113
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 6,789
<TOTAL-LIABILITIES> 906,902
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 8,039,403
<SHARES-COMMON-STOCK> 805,853
<SHARES-COMMON-PRIOR> 500
<ACCUMULATED-NII-CURRENT> 27,042
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (10,827)
<ACCUM-APPREC-OR-DEPREC> 11,842
<NET-ASSETS> 8,067,460
<DIVIDEND-INCOME> 33,184
<INTEREST-INCOME> 23,603
<OTHER-INCOME> 0
<EXPENSES-NET> 11,085
<NET-INVESTMENT-INCOME> 45,702
<REALIZED-GAINS-CURRENT> (10,833)
<APPREC-INCREASE-CURRENT> 11,842
<NET-CHANGE-FROM-OPS> 46,711
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (18,654)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 818,961
<NUMBER-OF-SHARES-REDEEMED> (15,481)
<SHARES-REINVESTED> 1,873
<NET-CHANGE-IN-ASSETS> 8,062,460
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 11,085
<AVERAGE-NET-ASSETS> 4,390,488
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.06
<PER-SHARE-GAIN-APPREC> (0.03)
<PER-SHARE-DIVIDEND> (0.02)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.01
<EXPENSE-RATIO> 1.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 14
<NAME> GCG TRUST VALUE EQUITY SERIES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 26,383,392
<INVESTMENTS-AT-VALUE> 28,738,959
<RECEIVABLES> 1,244,757
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 29,983,716
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,153,228
<TOTAL-LIABILITIES> 1,153,228
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 26,252,585
<SHARES-COMMON-STOCK> 2,187,943
<SHARES-COMMON-PRIOR> 500
<ACCUMULATED-NII-CURRENT> 44,111
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 178,227
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,355,565
<NET-ASSETS> 28,830,488
<DIVIDEND-INCOME> 232,858
<INTEREST-INCOME> 42,179
<OTHER-INCOME> 0
<EXPENSES-NET> 109,396
<NET-INVESTMENT-INCOME> 165,641
<REALIZED-GAINS-CURRENT> 776,757
<APPREC-INCREASE-CURRENT> 2,355,565
<NET-CHANGE-FROM-OPS> 3,297,963
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (121,533)
<DISTRIBUTIONS-OF-GAINS> (598,527)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,389,084
<NUMBER-OF-SHARES-REDEEMED> (256,691)
<SHARES-REINVESTED> 55,050
<NET-CHANGE-IN-ASSETS> 28,825,488
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 108,140
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 109,396
<AVERAGE-NET-ASSETS> 10,893,079
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.08
<PER-SHARE-GAIN-APPREC> 3.44
<PER-SHARE-DIVIDEND> (0.06)
<PER-SHARE-DISTRIBUTIONS> (0.28)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 13.18
<EXPENSE-RATIO> 1.01
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
