GT GLOBAL VARIABLE INVESTMENT SERIES, 497, 1995-10-10

GT GLOBAL VARIABLE INVESTMENT SERIES
497, 1995-10-10

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G.T. GLOBAL

VARIABLE

INVESTMENT

FUNDS
PROSPECTUS

October 2, 1995

<PAGE> 2

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G. T. G L O B A L V A R I A B L E
I N V E S T M E N T F U N D S

LOGO PROSPECTUS -- OCTOBER 2, 1995

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The G.T. GLOBAL VARIABLE INVESTMENT FUNDS (individually a "Fund"; collectively,
the "Funds") are mutual funds that are offered for investment exclusively to
separate accounts that fund certain variable annuity contracts ("VA Contracts")
offered by certain life insurance companies ("Participating Insurance
Companies").

The Funds' investment manager, G.T. CAPITAL MANAGEMENT, INC. ("G.T. Capital"),
is a part of the G.T. Group, a leading international investment advisory
organization with offices throughout the world that long has emphasized global
investment.
The G.T. Global Variable Investment Funds currently include:

- -G.T. Global: Variable New Pacific Fund

- -G.T. Global: Variable Europe Fund

- -G.T. Global: Variable Latin America Fund

- -G.T. Global: Variable America Fund

- -G.T. Global: Variable International Fund

- -G.T. Global: Variable Infrastructure Fund

- -G.T. Global: Variable Natural Resources Fund

- -G.T. Global: Variable Telecommunications Fund

- -G.T. Global: Variable Emerging Markets Fund

- -G.T. Global: Variable Growth & Income Fund

- -G.T. Global: Variable Global Government
Income Fund

- -G.T. Global: Variable Strategic Income Fund

- -G.T. Global: Variable U.S. Government
Income Fund

- - G.T. Global: Money Market Fund

EACH OF THE FOLLOWING FUNDS IS CLASSIFIED AS A "DIVERSIFIED" INVESTMENT COMPANY
UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED ("1940 ACT"): G.T. GLOBAL:
VARIABLE NEW PACIFIC FUND ("NEW PACIFIC FUND"), G.T. GLOBAL: VARIABLE EUROPE
FUND ("EUROPE FUND"), G.T. GLOBAL: VARIABLE AMERICA FUND ("AMERICA FUND"), G.T.
GLOBAL: VARIABLE INFRASTRUCTURE FUND ("INFRASTRUCTURE FUND"), G.T. GLOBAL:
VARIABLE NATURAL RESOURCES FUND ("NATURAL RESOURCES FUND"), G.T. GLOBAL:
VARIABLE TELECOMMUNICATIONS FUND ("TELECOMMUNICATIONS FUND"), G.T. GLOBAL:
VARIABLE INTERNATIONAL FUND ("INTERNATIONAL FUND"), G.T. GLOBAL: VARIABLE
EMERGING MARKETS FUND ("EMERGING MARKETS FUND"), G.T. GLOBAL: VARIABLE U.S.
GOVERNMENT INCOME FUND ("U.S. GOVERNMENT INCOME FUND") AND G.T. GLOBAL: MONEY
MARKET FUND ("MONEY MARKET FUND"). EACH OF THE FOLLOWING FUNDS IS CLASSIFIED AS
A "NON-DIVERSIFIED" INVESTMENT COMPANY UNDER THE 1940 ACT: G.T. GLOBAL: VARIABLE
LATIN AMERICA FUND ("LATIN AMERICA FUND"), G.T. GLOBAL: VARIABLE GROWTH & INCOME
FUND ("GROWTH & INCOME FUND"), G.T. GLOBAL: VARIABLE STRATEGIC INCOME FUND
("STRATEGIC INCOME FUND") AND G.T. GLOBAL: VARIABLE GLOBAL GOVERNMENT INCOME
FUND ("GLOBAL GOVERNMENT INCOME FUND").

THE STRATEGIC INCOME FUND MAY INVEST UP TO 50% OF ITS ASSETS IN LOWER RATED AND
COMPARABLE UNRATED DEBT SECURITIES WHOSE CREDIT QUALITY IS GENERALLY CONSIDERED
THE EQUIVALENT OF DEBT SECURITIES COMMONLY KNOWN AS "JUNK BONDS." INVESTMENTS OF
THIS TYPE ARE SUBJECT TO A GREATER RISK OF LOSS OF PRINCIPAL AND INTEREST.
INVESTORS SHOULD CAREFULLY CONSIDER THE RISKS ASSOCIATED WITH AN INVESTMENT IN
THE STRATEGIC INCOME FUND.

THIS PROSPECTUS CONCISELY SETS FORTH INFORMATION ABOUT THE FUNDS THAT AN
INVESTOR SHOULD KNOW BEFORE INVESTING THROUGH THE VA CONTRACTS. THIS PROSPECTUS,
IN ADDITION TO THE VA CONTRACTS PROSPECTUS, SHOULD BE READ CAREFULLY AND
RETAINED FOR FUTURE REFERENCE. A STATEMENT OF ADDITIONAL INFORMATION, DATED
OCTOBER 2, 1995, HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE
"SEC") AND IS INCORPORATED HEREIN BY REFERENCE. THE STATEMENT OF ADDITIONAL
INFORMATION, WHICH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, IS
AVAILABLE WITHOUT CHARGE BY WRITING TO THE FUNDS AT 50 CALIFORNIA STREET, 27TH
FLOOR, SAN FRANCISCO, CALIFORNIA 94111, OR BY CALLING (800) 824-1580.

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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

FUND SHARES ARE AVAILABLE AS A POOLED FUNDING VEHICLE FOR VARIABLE ANNUITY
CONTRACTS OFFERED BY PARTICIPATING INSURANCE COMPANIES. THIS
PROSPECTUS SHOULD BE ACCOMPANIED BY THE PROSPECTUS FOR SUCH
CONTRACTS.

AN INVESTMENT IN THE G.T. GLOBAL: MONEY MARKET FUND IS NEITHER INSURED NOR
GUARANTEED BY THE U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE
G.T. GLOBAL: MONEY MARKET FUND WILL BE ABLE TO MAINTAIN A STABLE
NET ASSET VALUE OF $1.00 PER SHARE.

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Prospectus Page 1
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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

TABLE OF CONTENTS
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<TABLE>
<CAPTION>
PAGE
<S> <C>
General Information...................................................................... 3
Financial Highlights..................................................................... 4
Investment Objectives and Policies....................................................... 10
Risk Factors............................................................................. 27
Currency, Options and Futures Strategies................................................. 34
How to Invest............................................................................ 36
Calculation of Net Asset Value........................................................... 37
Dividends, Other Distributions and Federal Income Taxation............................... 37
Management............................................................................... 39
Other Information........................................................................ 46
</TABLE>

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Prospectus Page 2
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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

GENERAL INFORMATION
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Each G.T. Global Variable Investment Fund is organized as a separate series of
either G.T. Global Variable Investment Series or G.T. Global Variable Investment
Trust. (G.T. Global Variable Investment Series and G.T. Global Variable
Investment Trust are referred to herein collectively as the "Companies," and may
be referred to singularly as a "Company"). Each Company is registered with the
Securities and Exchange Commission ("SEC") as an open-end management investment
company. See "Other Information." Each Fund is treated as a separate entity for
certain matters under the 1940 Act and for other purposes, including federal
income tax purposes. A shareholder of one Fund is not deemed to be a shareholder
of any other Fund.

The G.T. Global Variable Investment Funds are mutual funds that serve as funding
vehicles for the VA Contracts offered by Participating Insurance Companies
through separate accounts. Shares of the Funds may be offered to separate
accounts of Participating Insurance Companies and serve as the underlying
investments for VA Contracts ("shared funding"). Due to differences in tax
treatment or other considerations, the interests of various VA Contract holders
might at some time be in conflict. The Companies currently do not foresee any
such conflict. However, the Companies' Board of Trustees intends to monitor
events to identify any material irreconcilable conflict that may arise and to
determine what action, if any, should be taken in response to such conflict. If
such a conflict were to occur, one or more Participating Insurance Companies'
separate accounts might be required to withdraw all or a substantial portion of
its investments in one or more Funds. This might disrupt a Fund's orderly
portfolio management to the potential detriment of VA Contract holders.

The following Funds are organized as series of G.T. Global Variable Investment
Series:

- - G.T. Global: Variable New Pacific Fund
- - G.T. Global: Variable Europe Fund
- - G.T. Global: Variable America Fund
- - G.T. Global: Variable International Fund
- - G.T. Global: Money Market Fund
The following Funds are organized as series of G.T. Global Variable Investment
Trust:

- - G.T. Global: Variable Latin America Fund
- - G.T. Global: Variable Infrastructure Fund
- - G.T. Global: Variable Natural Resources Fund
- - G.T. Global: Variable Telecommunications Fund
- - G.T. Global: Variable Growth & Income Fund
- - G.T. Global: Variable Strategic Income Fund
- - G.T. Global: Variable Emerging Markets Fund
- - G.T. Global: Variable Global Government Income Fund
- - G.T. Global: Variable U.S. Government Income Fund

The VA Contracts are described in a separate prospectus issued by each
Participating Insurance Company for which the Companies assume no
responsibility. Individual VA Contract holders are not the "shareholders" of
either Company or any Fund. Rather, each Participating Insurance Company and its
separate accounts are the shareholders (the "shareholders"). In accordance with
current law, shareholder voting rights will be passed on to VA Contract holders.
As described below, for certain matters Company shareholders vote together as a
group; as to other matters, they vote separately by Fund.

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Prospectus Page 3
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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

FINANCIAL HIGHLIGHTS

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Contained below is per share operating performance data for a share outstanding,
total investment return ratios and supplemental data for the periods shown. This
information is supplemented by the financial statements and accompanying notes
appearing in the Statement of Additional Information. The financial statements
and notes for fiscal year ended December 31, 1994 have been audited by Coopers &
Lybrand, L.L.P. independent accountants, whose report thereon appears in the
Statement of Additional Information.

G.T. GLOBAL VARIABLE INVESTMENT SERIES

<TABLE>
<CAPTION>
JULY 5, 1994
(COMMENCEMENT
SIX MONTHS ENDED OF OPERATIONS) TO
JUNE 30, 1995 DECEMBER 31, SIX MONTHS ENDED
(UNAUDITED)***** 1994**** JUNE 30, 1995 (UNAUDITED)***
---------------- -------------- --------------------------------------------
G.T. GLOBAL: G.T. GLOBAL: G.T. GLOBAL:
---------------- -------------- --------------------------------------------
VARIABLE VARIABLE VARIABLE VARIABLE VARIABLE MONEY
INTERNATIONAL INTERNATIONAL NEW PACIFIC EUROPE AMERICA MARKET
FUND FUND FUND FUND FUND FUND
---------------- -------------- ----------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.... $11.25 $12.00 $ 14.01 $ 15.22 $15.81 $ 1.00
Income from investment operations
Net investment income................ 0.12 0.06 0.11 0.17 0.08 0.03
Net gains or losses on securities
(both realized and unrealized)..... (0.72) (0.76) (0.19) 0.23 3.86 0.00
------ ------ ------- ------- -------- --------
Total from investment operations........ (0.60) (0.70) (0.08) 0.40 3.94 0.03
------ ------ ------- ------- -------- --------
Less distributions
From net investment income........... (0.00) (0.05) (0.05) (0.16) (0.07) (0.03)
From capital gain.................... (0.02) (0.00) (0.00) (0.00) (0.29) (0.00)
In excess of capital gains........... (0.00) (0.00) (0.00) (0.00) (0.00) (0.00)
Return of capital.................... (0.00) (0.00) (0.00) (0.00) (0.00) (0.00)
------ ------ ------- ------- -------- --------
Total distributions.............. (0.02) (0.05) (0.05) (0.16) (0.36) (0.03)
------ ------ ------- ------- -------- --------
Net asset value, end of period.......... $10.63 $11.25 $ 13.88 $ 15.46 $19.39 $ 1.00
====== ====== ======= ======= ======== ========
Total returns+(b)....................... (5.38)% (5.81)% (0.57)% 2.63% 24.92% 2.64%
Ratios/supplemental data
Net assets, end of period (in
000's)............................. $2,998 $2,229 $20,305 $15,285 $34,052 $15,674
Ratio of net investment income to
average net assets(a).............. 2.31% 3.33% 1.76% 2.26% 1.90% 5.22%
Ratio of expenses to average net
assets(a).......................... 1.25% 0.69% 1.20% 1.19% 1.00% 0.75%
Portfolio turnover(a)................ 134% 17% 33% 85% 57% N/A
------ ------ ------- ------- ------- -------
</TABLE>

- ------------
(a) Annualized.
(b) Not annualized.
* Includes reimbursement by G.T. Capital Management, Inc. for New Pacific
Fund, Europe Fund, America Fund and Money Market Fund operating expenses
for the fiscal year ended December 31, 1993 of $0.03, $0.03, $0.10 and
$0.01, respectively. Without such reimbursement, the expense ratios would
have been 1.3%, 1.4%, 1.3%, and 1.0%, respectively, and the ratio of net
investment income to average net assets would have been 0.3%, 0.4%, 12.8%
and 2.1%, respectively. Without assumption of expenses by G.T. Capital, the
expense ratios would have been 3.6%, 4.6%, 6.5% and 5.7%, respectively, and
the ratio of net investment income to average net assets would have been
(2.0)%, (2.8)%, 7.6% and (2.6)%, respectively.
** Includes reimbursement by G.T. Capital Management, Inc. for New Pacific
Fund, Europe Fund, America Fund and Money Market Fund operating expenses
for the fiscal year ended December 31, 1994, of $0.03, $0.04, $0.28 and
$0.00, respectively. Without such reimbursement, the expense ratios would
have been 1.60%, 1.66%, 2.05%, and .81%, respectively, and the ratio of net
investment income to average net assets would have been .48%, 1.07%, .76%
and 3.64%, respectively.

*** Includes reimbursement by G.T. Capital Management, Inc. of New Pacific
Fund, Europe Fund, America Fund and Money Market Fund operating expenses
for the six-month period ended June 30, 1995 of $0.02, $0.03, $0.01 and
$0.00, respectively. Without such reimbursements, the expense ratios would
have been 1.57%, 1.61%, 1.16% and 1.16%, respectively, and the ratio of net
investment income to average net assets would have been 1.39%, 1.84%, 1.74%
and 4.81%, respectively.

**** Includes reimbursement by G.T. Capital Management, Inc. of International
Fund operating expenses of $0.11. Without such reimbursement, the expenses
ratio would have been 6.58% and the ratio of net investment income to
average net assets would have been
(2.56%).

***** Includes reimbursement by G.T. Capital Management, Inc. of International
Fund operating expenses of $0.14. Without such reimbursement, the expenses
ratio would have been 4.02% and the ratio of net investment income to
average net assets would have been (0.46)%.

+ Total returns do not include initial sales charges. Total return
information shown in the above table does not reflect expenses that apply
to the Separate Accounts or the related insurance policies, and inclusion
of these charges would reduce the total return figures for all periods
shown.

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Prospectus Page 4
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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL VARIABLE INVESTMENT SERIES

<TABLE>
<CAPTION>
YEAR ENDED FEBRUARY 10, 1993 (COMMENCEMENT OF
DECEMBER 31, 1994** OPERATIONS) TO DECEMBER 31, 1993*
--------------------------------------- -----------------------------------------
G.T. GLOBAL: G.T. GLOBAL:
--------------------------------------- -----------------------------------------
VARIABLE VARIABLE VARIABLE MONEY VARIABLE VARIABLE VARIABLE MONEY
NEW PACIFIC EUROPE AMERICA MARKET NEW PACIFIC EUROPE AMERICA MARKET
FUND FUND FUND FUND FUND FUND FUND FUND
----------- -------- ------- ------- ------------ -------- -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period.............................. $ 16.07 $ 15.33 $ 13.75 $ 1.00 $12.00 $12.00 $12.00 $ 1.00
Income from investment operations
Net investment income............. 0.08 0.16 0.48 0.03 0.04 0.05 1.11 0.03
Net gains or losses on securities
(both realized and
unrealized)..................... (2.08) (0.25) 2.08 0.00 4.03 3.28 0.64 0.00
------- ------- ------- ------- ------ ------ ------ ------
Total from investment operations..... (2.00) (0.09) 2.56 0.03 4.07 3.33 1.75 0.03
------- ------- ------- ------- ------ ------ ------ ------
Less distributions
From net investment income........ (0.06) (0.00) (0.50) (0.03) (0.00) (0.00) (0.00) (0.03)
From capital gain................. (0.00) (0.02) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00)
In excess of capital gains........ (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00)
Return of capital................. (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00)
------- ------- ------- ------- ------ ------ ------ ------
Total distributions........... (0.06) (0.02) (0.50) (0.03) (0.00) (0.00) (0.00) (0.03)
------- ------- ------- ------- ------ ------ ------ ------
Net asset value, end of period....... $ 14.01 $ 15.22 $ 15.81 $ 1.00 $16.07 $15.33 $13.75 $ 1.00
======= ======= ======= ======= ====== ====== ====== ======
Total returns+....................... (12.47)% (0.59)% 18.88% 3.48% 33.9%(b) 27.8%(b) 14.7%(b) 2.6%(b)
Ratios/supplemental data
Net assets, end of period
(in 000's)...................... $19,391 $15,020 $15,257 $19,474 $7,945 $5,410 $1,700 $3,775
Ratio of net investment income to
average net assets.............. 0.83% 1.48% 1.83% 3.70% 0.9%(a) 1.1%(a) 14.1%(a) 2.9%(a)
Ratio of expenses to average net
assets.......................... 1.25% 1.25% 0.98% 0.75% 0.6%(a) 0.7%(a) 0.00%(a) 0.2%(a)
Portfolio turnover................ 30% 61% 139% N/A 15%(a) 27%(a) 831%(a) N/A
------- ------- ------- ------- ------ ------ ------ ------
</TABLE>

*** Includes reimbursement by G.T. Capital Management, Inc. of New Pacific
Fund, Europe Fund, America Fund and Money Market Fund operating expenses
for the six-month period ended June 30, 1995 of $0.02, $0.03, $0.01 and
$0.00, respectively. Without such reimbursements, the expenses ratio would
have been 1.57%, 1.61%, 1.16% and 1.16%, respectively, and the ratio of net
investment income to average net assets would have been 1.39%, 1.84%, 1.74%
and 4.81%, respectively.

***** Includes reimbursement by G.T. Capital Management, Inc. of Variable
International Fund operating expenses of $0.14. Without such
reimbursement, the expenses ratio would have been 4.02% and the ratio of
net investment income to average net assets would have been (0.46)%.

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL VARIABLE INVESTMENT TRUST

<TABLE>
<CAPTION>
JULY 5, 1994
JANUARY 31, 1995 (COMMENCEMENT
(COMMENCEMENT OF OPERATIONS)
OF OPERATIONS) TO SIX MONTHS ENDED TO DECEMBER 31,
JUNE 30, 1995 JUNE 30, 1995 1994***
(UNAUDITED)***** (UNAUDITED)**** -------------
-------------------------- ----------------
G.T. GLOBAL: G.T. GLOBAL: G.T. GLOBAL:
VARIABLE VARIABLE VARIABLE
-------------------------- ---------------- -------------
NATURAL EMERGING EMERGING
INFRASTRUCTURE RESOURCES MARKETS MARKETS
FUND FUND FUND FUND
------------- --------- ---------------- -------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period......................... $12.00 $12.00 $11.89 $12.00
Income from investment operations
Net investment income..................................... 0.07 0.08 0.12 0.07
Net gains or losses on securities (both realized and
unrealized)............................................. 1.16 1.20 (0.85) (0.05)
------ ------ ------ ------
Total from investment operations............................. 1.23 1.28 (0.73) 0.02
------ ------ ------ ------
Less distributions
From net investment income................................ (0.00) (0.00) (0.00) (0.07)
From capital gain......................................... (0.00) (0.00) (0.00) (0.00)
In excess of capital gains................................ (0.00) (0.00) (0.00) (0.06)
Return of capital......................................... (0.00) (0.00) (0.00) (0.00)
====== ====== ====== ======
Total distributions................................... (0.00) (0.00) (0.00) (0.13)
------ ------ ------ ------
Net asset value, end of period............................... $13.23 $13.28 $11.16 $11.89
====== ====== ====== ======
Total returns+(b)............................................ 10.25% 10.67% (6.14)% 0.12%
Ratios/supplemental data
Net assets, end of period (in 000's)...................... $ 575 $ 576 $7,901 $7,267
Ratio of net investment income to average net assets(a)... 2.28% 3.51% 2.54% 4.1%
Ratio of expenses to average net assets(a)................ 1.25% 1.16% 1.23% 0.0%
Portfolio turnover(a)..................................... 90% 195% 203% 117%
------ ------ ------ ------
</TABLE>

- ------------
(a) Annualized.
(b) Not annualized.
* Includes reimbursement by G.T. Capital Management, Inc. for Latin America
Fund, Growth & Income Fund, Strategic Income Fund, Global Government Income
Fund, U.S. Government Income Fund and Telecommunications Fund operating
expenses for the fiscal year ended December 31, 1994 of $0.04, $0.03,
$0.04, $0.08, $0.48 and $0.01, respectively. Without such reimbursement,
the expense ratios would have been 1.58%, 1.49%, 1.15%, 1.68%, 4.63% and
1.49%, respectively, and the ratio of net investment income to average net
assets would have been 0.49%, 3.45%, 7.43%, 6.21%, 1.29% and 0.07%,
respectively.

** Includes reimbursement by G.T. Capital Management, Inc. of operating
expenses for the period ended June 30, 1995 for the Latin America Fund, the
Growth & Income Fund, the Strategic Income Fund, the Global Government
Income Fund, the U.S. Government Income Fund and the Telecommunications
Fund of $0.04, $0.02, $0.01, $0.06, $0.11, and $0.01, respectively. Without
such reimbursement, the expenses ratios would have been 1.93%, 1.50%,
1.20%, 2.05%, 3.14% and 1.37%, respectively, and the ratio of net
investment income to average net assets would have been 3.89%, 4.23%,
9.85%, 6.03%, 3.48% and 0.11%, respectively.

*** Includes reimbursement by G.T. Capital Management, Inc. of Emerging Markets
Fund operating expenses of $0.07. Without such reimbursement, the expense
ratio would have been 4.30% and the ratio of net investment income to
average net assets would have been (.20)%.

**** Includes reimbursement by G.T. Capital Management, Inc. of Emerging
Markets Fund operating expenses for the six-month period ended June 30,
1995 of $0.09. Without such reimbursement, the expense ratio would have
been 3.24% and the ratio of net investment income to average net assets
would have been 0.53%.

***** Includes reimbursement by G.T. Capital Management, Inc. of operating
expenses for the period January 31, 1995 to June 30, 1995 for the Variable
Infrastructure Fund and Variable Natural Resources Fund of $0.77 and
$0.73, respectively. Without such reimbursement, the expenses ratios would
have been 25.57% and 33.50%, respectively, and the ratio of net investment
income to average net assets would have been (22.04)% and (28.83)%,
respectively.

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL VARIABLE INVESTMENT TRUST

<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30, 1995 (UNAUDITED)**
-------------------------------------------------------------------------------
G.T. GLOBAL: VARIABLE
-------------------------------------------------------------------------------
GLOBAL U.S.
LATIN GROWTH & STRATEGIC GOVERNMENT GOVERNMENT
AMERICA INCOME INCOME INCOME INCOME TELECOMMUNICATIONS
FUND FUND FUND FUND FUND FUND
------- --------- -------- ----------- ----------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period...... $ 19.17 $ 12.99 $ 10.82 $ 10.63 $10.79 $ 13.98
Income from investment operations
Net investment income.................. 0.30 0.29 0.54 0.39 0.32 0.02
Net gains or losses on securities (both
realized and unrealized)............. (4.45) 0.41 0.49 0.77 0.65 2.07
------- ------- ------- ------- ------ -------
Total from investment operations.......... (4.15) 0.70 1.03 1.16 0.97 2.09
------- ------- ------- ------- ------ -------
Less distributions
From net investment income............. (0.16) (0.20) (0.48) (0.39) (0.30) (0.03)
From capital gain...................... (2.00) (0.00) (0.00) (0.00) (0.00) (0.36)
In excess of capital gains............. (0.00) (0.00) (0.00) (0.00) (0.00) (0.00)
Return of capital...................... (0.00) (0.00) (0.00) (0.00) (0.00) (0.00)
------- ------- ------- ------- ------ -------
Total distributions................ (2.16) (0.20) (0.48) (0.39) (0.30) (0.39)
------- ------- ------- ------- ------ -------
Net asset value, end of period............ $ 12.86 $ 13.49 $ 11.37 $ 11.40 $11.46 $ 15.68
======= ======= ======= ======= ====== =======
Total returns+(b)......................... (21.45)% 5.42% 9.84% 11.04% 9.11% 15.01%
Ratios/supplemental data
Net assets, end of period (in 000's)... $20,870 $27,736 $23,872 $10,823 $4,131 $43,477
Ratio of net investment income to
average net assets(a)................ 4.60% 4.50% 10.05% 7.08% 5.62% 0.30%
Ratio of expenses to average net
assets(a)............................ 1.22% 1.23% 1.00% 1.00% 1.00% 1.18%
Portfolio turnover(a).................. 190% 79% 245% 433% 272% 76%
------- ------- ------- ------- ------ -------
</TABLE>

**** Includes reimbursement by G.T. Capital Management, Inc. of Emerging
Markets Fund operating expenses for the six-month period ended June 30,
1995 of $0.09. Without such reimbursement, the expenses ratio would have
been 3.24% and the ratio of net investment income to average net assets
would have been 0.53%.

+ Total returns do not include sales charges. Total return information shown
in the above table does not reflect expenses that apply to the Separate
Accounts or the related insurance policies, and inclusion of these charges
would reduce the total return figures for all periods shown.

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL VARIABLE INVESTMENT TRUST

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1994*
-------------------------------------------------------------------------------
G.T. GLOBAL: VARIABLE
-------------------------------------------------------------------------------
GLOBAL U.S.
LATIN GROWTH & STRATEGIC GOVERNMENT GOVERNMENT
AMERICA INCOME INCOME INCOME INCOME TELECOMMUNICATIONS
FUND FUND FUND FUND FUND FUND
------- --------- -------- ----------- ----------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period...... $ 17.68 $ 13.77 $ 14.57 $12.53 $12.23 $ 13.07
Income from investment operations
Net investment income.................. 0.11 0.46 1.71 0.77 0.63 0.01
Net gains or losses on securities (both
realized and unrealized)............. 1.49 (0.85) (4.17) (1.85) (1.39) 0.92
------- ------- ------- ------ ------ -------
Total from investment operations.......... 1.60 (0.39) (2.46) (1.08) (0.76) 0.93
------- ------- ------- ------ ------ -------
Less distributions
From net investment income............. (0.04) (0.39) (0.79) (0.73) (0.62) (0.02)
From capital gain...................... (0.07) (0.00) (0.45) (0.00) (0.06) (0.00)
In excess of capital gains............. (0.00) (0.00) (0.00) (0.00) (0.00) (0.00)
Return of capital...................... (0.00) (0.00) (0.05) (0.09) (0.00) (0.00)
------- ------- ------- ------ ------ -------
Total distributions................ (0.11) (0.39) (1.29) (0.82) (0.68) (0.02)
------- ------- -------- ------ ------ -------
Net asset value, end of period............ $ 19.17 $ 12.99 $ 10.82 $10.63 $10.79 13.98
======= ======= ======= ====== ====== =======
Total returns+............................ 9.14% (2.85)% (17.09)% (8.70)% (6.27)% 7.15%
Ratios/supplemental data
Net assets, end of period (in 000's)... $26,631 $25,580 $23,367 $9,654 $2,415 $36,029
Ratio of net investment income to
average net assets................... .82% 3.69% 7.58% 6.89% 5.53% 0.31%
Ratio of expenses to average net
assets............................... 1.25% 1.25% 1.00% 1.00% 0.38% 1.25%
Portfolio turnover..................... 185% 53% 313% 350% 34% 81%
------- ------- ------- ------ ------ -------
</TABLE>

**** Includes reimbursement by G.T. Capital Management, Inc. of Emerging
Markets Fund operating expenses for the six-month period ended June 30,
1995 of $0.09. Without such reimbursement, the expenses ratio would have
been 3.24% and the ratio of net investment income to average net assets
would have been 0.53%.

***** Includes reimbursement by G.T. Capital Management, Inc. of operating
expenses for the period January 31, 1995 to June 30, 1995 for the Variable
Infrastructure Fund and Variable Natural Resources Fund of $0.77 and
$0.73, respectively. Without such reimbursement, the expenses ratio would
have been 25.57% and 33.50%, respectively, and the ratio of net investment
income to average net assets would have been (22.04)% and (28.83)%,
respectively.

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL VARIABLE INVESTMENT TRUST

<TABLE>
<CAPTION>
OCTOBER 18, 1993
(COMMENCEMENT OF
FEBRUARY 10, 1993 (COMMENCEMENT OF OPERATIONS) TO
OPERATIONS) TO DECEMBER 31, 1993 DECEMBER 31, 1993
----------------------------------------------------------- ------------------
G.T. GLOBAL: VARIABLE
--------------------------------------------------------------------------------
GLOBAL U.S.
LATIN GROWTH & STRATEGIC GOVERNMENT GOVERNMENT
AMERICA INCOME INCOME INCOME INCOME TELECOMMUNICATIONS
FUND FUND FUND FUND FUND FUND
------- --------- -------- ----------- ----------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period...... $12.00 $ 12.00 $ 12.00 $12.00 $12.00 $12.00
Income from investment operations
Net investment income*................. 0.04 0.31 0.61 0.57 0.53 0.04
Net gains or losses on securities (both
realized and unrealized)............. 5.64 1.79 2.57 0.52 0.23 1.03
------- ------- ------- ------ ------ ------
Total from investment operations.......... 5.68 2.10 3.18 1.09 0.76 1.07
------- ------- ------- ------ ------ ------
Less distributions
From net investment income............. (0.00) (0.28) (0.61) (0.56) (0.53) (0.00)
From capital gain...................... (0.00) (0.05) (0.00) (0.00) (0.00) (0.00)
In excess of capital gains............. (0.00) (0.00) (0.00) (0.00) (0.00) (0.00)
------- ------- ------- ------ ------ ------
Total distributions................ (0.00) (0.33) (0.61) (0.56) (0.53) (0.00)
------- ------- ------- ------ ------ ------
Net asset value, end of period............ $17.68 $ 13.77 $ 14.57 $12.53 $12.23 $13.07
====== ======= ======= ====== ====== ======
Total returns+(b)......................... 47.3% 17.8% 27.5% 9.5% 6.4% 8.9%
Ratios/supplemental data
Net assets, end of period
(in 000's)........................... $8,240 $11,677 $18,089 $6,136 $ 974 $7,903
Ratio of net investment income to
average net assets*(a)............... 1.0% 3.2% 6.6% 6.1% 5.3% 2.5%
Ratio of expenses to average net
assets*(a)........................... 0.7% 0.6% 0.5% 0.5% 0.0% 0.9%
Portfolio turnover(a).................. 78% 17% 245% 298% 81% 20%
------ ------- ------- ------ ------ ------
</TABLE>

- ------------
(a) Annualized.
(b) Not annualized.

* Includes reimbursement by G.T. Capital Management, Inc. for Latin America
Fund, Growth & Income Fund, Strategic Income Fund, Global Government Income
Fund, U.S. Government Income Fund and Telecommunications Fund operating
expenses for the fiscal year ended December 31, 1993 of $0.02, $0.05, $0.03,
$0.06, $0.19 and $0.00, respectively. Without such reimbursement, the expense
ratios would have been 1.3%, 1.2%, 0.9%, 1.1%, 1.9% and 1.1%, respectively,
and the ratio of net investment income to average net assets would have been
0.4%, 2.7%, 6.3%, 5.5%, 3.4% and 2.3%, respectively. Without assumption of
expenses by G.T. Capital, the expense ratio would have been 4.2%, 2.8%, 1.9%,
4.2%, 12.3% and 1.8%, respectively, and the ratio of net investment income to
average net assets would have been (2.5)%, 1.1%, 5.2%, 2.4%, (6.9)% and 1.6%,
respectively.

+ Total returns do not include initial sales charges. Total return information
shown in the above table does not reflect expenses that apply to the Separate
Accounts or the related insurance policies, and inclusion of these charges
would reduce the total return figures for all periods shown.

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INVESTMENT OBJECTIVES AND POLICIES
- --------------------------------------------------------------------------------

Each Fund has its own investment objective(s) and investment policies. The
objective(s) and policies of each Fund determine the types of securities in
which that Fund may invest, and will affect both the investment return and the
degree of risk to which that Fund is subject. There can be no assurance that any
Fund will achieve its investment objective(s).

GLOBAL GROWTH FUNDS

The investment objective of each of the New Pacific Fund, the Europe Fund, the
International Fund, and the America Fund (collectively, "Global Growth Funds")
listed below is long-term growth of capital. Each Global Growth Fund seeks this
objective by investing, under normal circumstances, at least 65% of its total
assets in equity securities of issuers domiciled in that Fund's "Primary
Investment Area." Equity securities in which the Global Growth Funds may invest
include common stocks, preferred stocks and warrants to acquire such securities.

The Primary Investment Areas of the Global Growth Funds are as follows:

NEW PACIFIC FUND -- Australia, Hong Kong, Indonesia, Malaysia, New Zealand, the
Philippines, Singapore, South Korea, Taiwan and Thailand.

EUROPE FUND -- Austria, Belgium, Denmark, Finland, France, Germany, Greece,
Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden,
Switzerland, Turkey and the United Kingdom.

INTERNATIONAL FUND -- all countries listed for each other Global Growth Fund,
and Argentina, Brazil, Canada, Chile, Japan, Mexico, and Venezuela, but not the
United States.

AMERICA FUND -- the United States.

Each Global Growth Fund may invest up to 35% of its assets in the securities of
issuers domiciled outside of the relevant Primary Investment Area, including:
(a) securities of issuers in countries that are linked by tradition, economic
markets, cultural similarities or geography to the countries in the Primary
Investment Area; and (b) securities of issuers located elsewhere in the world
which have operations in the relevant Primary Investment Area or which stand to
benefit from political and economic events in the Primary Investment Area.

In managing the Global Growth Funds, G.T. Capital seeks to identify those
countries and industries where economic and political factors, including
currency movements, are likely to produce above-average growth rates. G.T.
Capital further attempts to identify those companies in such countries and
industries that are best positioned and managed to take advantage of these
economic and political factors. G.T. Capital intends to invest in such countries
and industries only after balancing the potential for growth of selected
companies in each market relative to the risks of investing in each such
country. Among the factors to be considered are that several of the markets
included in the relevant countries of the New Pacific Fund, the Europe Fund and
the International Fund are so-called developing markets, i.e., less developed
and more prone to uncertainty, instability and risk than the other markets in
which those Funds invest. Under ordinary circumstances, the assets of the
International Fund are invested in the equity securities of issuers domiciled in
at least three different countries. The America Fund currently expects to invest
a majority of its assets in the securities of mid and small-sized companies. In
selecting securities for inclusion in the America Fund's portfolio, the Fund's
managers initially focus on companies with a total equity market capitalization
of $2 billion or less.

Up to 35% of each Global Growth Fund's assets may be invested in convertible
bonds and debt securities. The Global Growth Funds will limit their purchases of
debt securities to obligations rated no lower than investment grade, i.e., rated
no lower than Baa by Moody's Investors Service, Inc. ("Moody's") or BBB by
Standard & Poor's ("S&P"), or if unrated determined by G.T. Capital to be of
equivalent quality. See "Description of Debt Ratings" in the Statement of
Additional Information for a full description of S&P's and Moody's ratings. The
Global Growth Funds may also use instruments (including forward currency
contracts) often referred to as "derivatives." See "Currency, Options and
Futures Strategies."

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Because the development of the world's economies and stock markets is rapidly
evolving, from time to time the Board of Trustees may redefine a Global Growth
Fund's Primary Investment Area. For example, on July 5, 1994, Japan was
eliminated from the Primary Investment Area of the New Pacific Fund.

INFRASTRUCTURE FUND

The INFRASTRUCTURE FUND'S investment objective is long-term capital growth. The
Infrastructure Fund seeks its objective by investing primarily in equity
securities of companies throughout the world that design, develop or provide
products and services significant to a country's infrastructure. The
Infrastructure Fund invests in infrastructure companies which, in the opinion of
G.T. Capital, have potential for above average, long-term growth in sales and
earnings on a sustained basis.

At least 65% of the Infrastructure Fund's total assets normally will be invested
in common stocks and preferred stocks and warrants to acquire such securities
issued by infrastructure companies. An "infrastructure" company is an entity in
which (i) at least 50% of either the revenues or earnings was derived from
infrastructure activities, or (ii) at least 50% of the assets was devoted to
such activities, based on the company's most recent fiscal year. The remainder
of the Infrastructure Fund's assets may be invested in debt securities issued by
infrastructure companies and/or equity and debt securities of companies outside
of the infrastructure industries which, in the opinion of G.T. Capital, stand to
benefit from developments in the infrastructure industries.

The Infrastructure Fund will not invest more than 20% of its total assets in
debt securities rated below investment grade. Investment in non-investment grade
securities involves a high degree of risk and can be speculative. These debt
securities are the equivalent of high yield, high risk bonds, commonly known as
"junk bonds." See "Risk Factors" for a complete discussion.

The Infrastructure Fund may invest substantially in securities denominated in
one or more currencies. Under normal conditions, the Infrastructure Fund invests
in the securities of issuers located in at least three different countries,
including the United States. Investments in securities of issuers in any one
country, other than the United States, will represent no more than 50% of the
Fund's assets. The Infrastructure Fund may also use instruments (including
forward currency contracts) often referred to as "derivatives." See "Currency,
Options and Futures Strategies."

In analyzing companies for investment by the Infrastructure Fund, G.T. Capital
ordinarily looks for several of the following characteristics: above-average per
share earnings growth; high return on invested capital; a healthy balance sheet;
sound financial and accounting policies and overall financial strength; strong
competitive advantages; effective research and product development and
marketing; development of new technologies; efficient service; pricing
flexibility; strong management; and general operating characteristics which will
enable the companies to compete successfully in their respective markets.

For purposes of the Infrastructure Fund's policy of investing at least 65% of
its total assets in the securities of infrastructure companies, the companies in
which the Infrastructure Fund will principally invest will be those engaged in
designing, developing or providing the following products and services:
electricity production; oil, gas, and coal exploration, development, production
and distribution; water supply, including water treatment facilities; nuclear
power and other alternative energy sources; transportation, including the
construction or operation of transportation systems; steel, concrete, or similar
types of products; communications equipment and services (including equipment
and services for both data and voice transmission); mobile communications and
cellular radio/paging; emerging technologies combining telephone, television
and/or computer systems; and other products and services which, in G.T.
Capital's judgment, constitute services significant to the development of a
country's infrastructure. In addition, long-term growth rates of certain foreign
countries' economies may be substantially higher than those of the U.S. economy.
An integral aspect of the foreign countries' economies may be the development or
improvement of their infrastructure.

G.T. Capital believes that a country's infrastructure is one key to the
long-term success of that country's economy. G.T. Capital believes that adequate
energy, transportation, water, and communications systems are essential elements
for long-term economic growth. G.T. Capital believes that many developing
nations, especially

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

in Asia and Latin America, plan to make significant expenditures to the
development of their infrastructure in the coming years, which is expected to
facilitate increased levels of services and manufactured goods.

In the developed countries of North America, Europe, Japan and the south
Pacific, G.T. Capital expects that the replacement and upgrade of transportation
and communications systems should stimulate growth in the industries of those
countries. In G.T. Capital's view, deregulation of telecommunications and
electric and gas utilities in many countries is promoting significant changes in
these industries.

G.T. Capital believes that strong economic growth in developing countries and
infrastructure replacement, upgrade, and deregulation in more developed
countries provide an environment for favorable investment opportunities in
infrastructure companies worldwide.

NATURAL RESOURCES FUND

The NATURAL RESOURCES FUND'S investment objective is long-term capital growth.
The Natural Resources Fund seeks its objective by investing primarily in equity
securities of companies throughout the world that own, explore or develop
natural resources and other basic commodities, or supply goods and services to
such companies. The Natural Resources Fund expects to invest in those natural
resource companies which include those that own, explore or develop energy
sources, ferrous and non-ferrous metals, strategic metals and precious metals,
chemicals, forest products, foodstuffs, refined products, such as steel, and
other basic commodities, which, in G.T. Capital's opinion, historically have
been produced and marketed profitably during periods of improving supply and
demand fundamentals and rising inflation. The Natural Resources Fund invests in
natural resource companies which, in the opinion of G.T. Capital, have potential
for above average, long-term growth in sales and earnings.

At least 65% of the Natural Resources Fund's total assets will normally be
invested in common stock and preferred stock, and warrants to acquire such
securities, issued by natural resource companies. A "natural resource" company
is an entity in which (i) at least 50% of either the revenues or earnings was
derived from natural resource activities, or (ii) at least 50% of the assets was
devoted to such activities, based upon the company's most recent fiscal year.
The remainder of the Natural Resources Fund's assets may be invested in debt
securities issued by natural resource companies and/or equity and debt
securities of companies outside of the natural resource industries which, in the
opinion of G.T. Capital, stand to benefit from developments in the natural
resource industries.

The Natural Resources Fund will not invest more than 20% of its total assets in
debt securities rated below investment grade. Investment in non-investment grade
debt securities involves a high degree of risk and can be speculative. These
debt securities are the equivalent of high yield, high risk bonds, commonly
known as "junk bonds." See "Risk Factors" for a more complete discussion.

The Natural Resources Fund may invest substantially in securities denominated in
one or more currencies. Under normal conditions, the Natural Resources Fund
invests in the securities of issuers located in at least three different
countries, including the United States. Investments in securities of issuers in
any one country, other than the United States, will represent no more than 50%
of the Fund's assets. The Natural Resources Fund may also use instruments
(including forward currency contracts) often referred to as "derivatives." See
"Currency, Options and Futures Strategies."

The Natural Resources Fund may invest in securities of companies in those
natural resource industries and commodity groups which, in G.T. Capital's
opinion, may perform well during periods of rising inflation. In analyzing such
companies for possible investment by the Natural Resources Fund, G.T. Capital
ordinarily looks for several of the following characteristics: above-average per
share earnings growth; high return on invested capital; a healthy balance sheet;
sound financial and accounting policies and overall financial strength; strong
competitive advantages; development of new technologies; efficient service;
strong management; and general operating characteristics which will enable the
companies to compete successfully in their respective markets.

The natural resource industries are comprised of a variety of companies. For
purposes of the Natural Resources Fund's policy of investing of at least 65% of
its total assets in the securities of natural resource companies, the companies
in which the Natural Resources Fund will principally invest will be those which
own, explore or develop: energy

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

sources (such as oil, gas and coal); ferrous and non-ferrous metals (such as
iron, aluminum, copper, nickel, zinc and lead), strategic metals (such as
uranium and titanium) and precious metals (such as gold, silver and platinum);
chemicals; forest products (such as timber, coated and uncoated tree sheet, pulp
and newsprint); other basic commodities (such as foodstuffs); refined products
(such as chemicals and steel) and service companies that sell to these producers
and refiners; and other products and services which, in G.T. Capital's opinion
are significant to the ownership and development of natural resources and other
basic commodities.

G.T. Capital will allocate the Natural Resources Fund's investments among those
natural resource companies depending on its assessment of their long-term growth
potential. In assessing these companies' long-term growth potential, G.T.
Capital will evaluate, among other factors, their capabilities for expanded
exploration and production, superior exploration programs and production
techniques and facilities, current inventories, expected production and demand
levels, and the potential to accumulate new resources.

G.T. Capital believes that the liberalization of formerly socialist economies
will bring about dramatic changes in both the supply and demand for natural
resources. In addition, rapid industrialization in developing countries of Asia
and Latin America are generating new demands for industrial materials which are
affecting world commodities markets. G.T. Capital believes these changes are
likely to create investment opportunities which benefit from new sources of
supply and/or from changes in commodities prices.

G.T. Capital believes that investments in natural resource industries offer an
opportunity to protect wealth against the capital-eroding effects of inflation.
During periods of accelerating inflation or currency uncertainty, worldwide
investment demand for natural resources, particularly precious metals, tends to
increase, and during periods of disinflation or currency stability, it tends to
decrease. G.T. Capital believes that rising commodity prices and increasing
worldwide industrial production may favorably affect share prices of natural
resource companies, and investments in such companies can offer excellent
opportunities to offset the effects of inflation.

TELECOMMUNICATIONS FUND
The TELECOMMUNICATIONS FUND seeks long-term growth of capital as its investment
objective. In seeking that objective, the Telecommunications Fund normally
invests at least 65% of its total assets in common and preferred stocks and
warrants to acquire such stocks issued by telecommunications companies. A
"telecommunications company" is an entity which (i) derives at least 50% of
either its revenues or earnings from telecommunications activities, or (ii)
devotes at least 50% of its assets to telecommunications activities, based on
the company's most recent fiscal year.

Up to 35% of the Telecommunications Fund's assets may be invested in debt
securities issued by telecommunications companies, and/or in equity and debt
securities of companies outside of the telecommunications industry which, in the
opinion of G.T. Capital, stand to benefit from developments in the
telecommunications industry. G.T. Capital will allocate the Telecommunications
Fund's assets among securities of countries and in currency denominations and
industry sectors where opportunities for meeting the Fund's investment objective
are expected to be the most attractive. The Telecommunications Fund may invest
substantially in securities denominated in one or more currencies. Under normal
conditions, the Telecommunications Fund invests in the securities of issuers
located in at least three different countries, including the United States.
Investments in securities of issuers in any one country, other than the United
States, will represent no more than 40% of the Fund's assets. The
Telecommunications Fund may also use instruments (including forward currency
contracts) often referred to as "derivatives." See "Currency, Options and
Futures Strategies."

The telecommunications industry is comprised of a variety of sectors, ranging
from companies concentrating on established technologies to those primarily
engaged in emerging or developing technologies. The characteristics of companies
focusing on the same technology will vary among countries depending upon the
extent to which the technology is established in the particular country. G.T.
Capital will allocate the Telecommunications Fund's investments among these
sectors depending upon its assessment of their relative long-term growth
potentials.

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

For purposes of the Telecommunications Fund's policy of investing at least 65%
of its total assets in the securities of telecommunications companies, the
companies in which the Fund will invest are those engaged in designing,
developing or providing the following products and services: communications
equipment and services (including equipment and services for both data and voice
transmission); electronic components and equipment; broadcasting (including
television and radio, satellite, microwave and cable television and
narrowcasting); computer equipment, mobile communications and cellular
radio/paging; electronic mail; local and wide area networking and linkage of
word and data processing systems; publishing and information systems; videotext
and teletext; and emerging technologies combining telephone, television and/or
computer systems.

The Telecommunications Fund expects that, from time to time, a significant
portion of its assets may be invested in the securities of domestic issuers.
Telecommunications, however, is a global industry with significant, growing
markets outside of the United States. A sizeable proportion of the companies
which comprise the telecommunications industry are headquartered outside of the
United States. The communication and use of information using existing and
developing technology increasingly is permeating global civilization.

For these reasons, G.T. Capital believes that a portfolio comprised only of
securities of U.S. issuers does not provide the greatest potential for return
from a telecommunications investment. G.T. Capital uses its financial expertise
in markets located throughout the world and the substantial global resources of
the G.T. Group in attempting to identify those countries and telecommunications
companies then providing the greatest potential for long-term capital
appreciation. In this fashion, G.T. Capital and the Telecommunications Fund seek
to enable shareholders to capitalize on the substantial investment opportunities
and the potential for long-term growth of capital presented by the global
telecommunications industry.

LATIN AMERICA FUND

The LATIN AMERICA FUND'S investment objective is capital appreciation. In
seeking that objective, the Latin America Fund normally invests at least 65% of
its total assets in a broad range of securities of Latin American issuers.
Consistent with its investment objective and policies, the Latin America Fund
may invest in common stock, preferred stock, rights, warrants and securities
convertible into common stock, and other substantially similar forms of equity
with comparable risk characteristics, as well as bonds, notes, debentures or
other forms of indebtedness that may be developed in the future. These
securities may be listed on securities exchanges, traded in various
over-the-counter ("OTC") markets or have no organized market.

Up to 35% of the Latin America Fund's total assets may be invested in a
combination of equity and debt securities of U.S. issuers. In evaluating
investments in securities of U.S. issuers, G.T. Capital will consider, among
other things, the issuer's Latin American business activities and the impact
that developments in Latin America may have on the issuer's results. The Latin
America Fund may invest up to 50% of its assets in debt securities. There are no
credit quality limitations placed on the debt securities in which the Latin
America Fund may invest, and some or all of such debt securities may be the
equivalent of high yield, high risk bonds, commonly known as "junk bonds." The
Latin America Fund may also use instruments (including forward currency
contracts) often referred to as "derivatives." See "Currency, Options and
Futures Strategies."

The Latin America Fund purchases equity and debt securities in seeking its
objective of capital appreciation. Capital appreciation in debt securities may
arise as a result of a favorable change in relative foreign exchange rates, in
relative interest rate levels, or in the credit worthiness of issuers. The
receipt of income from such debt securities is incidental to the Latin America
Fund's objective of capital appreciation.

The Latin America Fund defines securities of Latin American issuers as the
following: (a) securities of companies organized under the laws of a Latin
American country or for which the principal trading market is in Latin America;
(b) securities issued or guaranteed by the government of a country in Latin
America, its agencies or instrumentalities, or municipalities, or the central
bank of such country; (c) U.S. dollar-denominated securities or securities
denominated in a Latin American currency issued by companies to finance
operations in Latin America; (d) securities of companies that derive at least
50% of their revenues from either goods

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

or services produced in Latin America or sales made in Latin America; and (e)
securities of Latin American issuers, as defined herein, in the form of
depositary shares. For purposes of the foregoing definition, the Latin America
Fund's purchases of securities issued by companies outside of Latin America to
finance their Latin American operations will be limited to securities the
performance of which is materially related to such company's Latin American
activities. For purposes of this Prospectus, unless otherwise indicated, the
Latin America Fund defines Latin America to consist of the following countries:
Argentina, the Bahamas, Barbados, Belize, Bolivia, Brazil, Chile, Colombia,
Costa Rica, Dominican Republic, Ecuador, El Salvador, French Guiana, Guatemala,
Guyana, Haiti, Honduras, Jamaica, Mexico, the Netherlands Antilles, Nicaragua,
Panama, Paraguay, Peru, Suriname, Trinidad and Tobago, Uruguay and Venezuela.

The extent of the Latin America Fund's holdings in any Latin American country
will vary from time to time, based upon G.T. Capital's judgment as to where the
greatest investment opportunities then lie. In allocating investments among the
various Latin American markets, G.T. Capital looks principally at the stage of
industrialization, potential for productivity gains through economic
deregulation, the impact of financial liberalization and monetary conditions and
the political outlook in each country. Under current market conditions the Latin
America Fund intends to invest primarily in securities issued by companies and
governments in Mexico, Chile, Brazil, and Argentina, which currently have the
most developed capital markets in Latin America. The Latin America Fund may
invest more than 25% of its assets in any of these four countries but does not
expect to invest more than 50% of its total assets in any one country. The
portion of the Latin America Fund's total assets invested directly in Chile may
be less than the portions invested in other Latin American countries at present.
Due to onerous repatriation restrictions, investment by the Fund in Chile for
practical purposes is limited to investment in other investment funds which
purchase securities of Chilean issuers. The Fund's investment in Chile will not
likely exceed 15% of its total assets. The Latin America Fund's investment in
Latin American debt securities may consist substantially of Brady Bonds and
other sovereign debt securities issued by Latin American governments. "Sovereign
debt securities" are those debt securities issued by Latin American governments,
and other emerging market governments, that are traded in the markets of
developed countries or groups of developed countries. See "Investment Objectives
and Policies -- Other Investment Information."

EMERGING MARKETS FUND

The EMERGING MARKETS FUND'S investment objective is long-term growth of capital.
Under normal circumstances, the Emerging Markets Fund seeks its objective by
investing at least 65% of its total assets in equity securities of companies in
emerging markets. The Emerging Markets Fund may invest in the following types of
equity securities: common stock, preferred stock, securities convertible into
common stock and rights and warrants to acquire such securities and
substantially similar forms of equity with comparable risk characteristics.
These securities may be listed on securities exchanges, traded in various
over-the-counter ("OTC") markets, or have no organized market.

For purposes of the Emerging Markets Fund's operations, "emerging markets" will
consist of all countries determined by G.T. Capital to have developing or
emerging economies and markets. These countries generally include every country
in the world except the United States, Canada, Japan, Australia, New Zealand and
most countries located in Western Europe. See "Investment Objectives and
Policies" in the Statement of Additional Information for a complete list of all
the countries which the Emerging Markets Fund does not consider to be emerging
markets.

The Emerging Markets Fund will focus its investments in those emerging markets
which G.T. Capital believes have strongly developing economies and in which the
markets are becoming more sophisticated. For purposes of the Emerging Markets
Fund's policy of normally investing at least 65% of its total assets in equity
securities of issuers in emerging markets, the Emerging Markets Fund will
consider investment in the following emerging markets:

<TABLE>
<S> <C>
Algeria Malaysia
Argentina Mexico
Bolivia Morocco
Botswana Nicaragua
Brazil Nigeria
</TABLE>

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<TABLE>
<S> <C>
Chile Pakistan
China Panama
Colombia Peru
Costa Rica Philippines
Czech Republic Poland
Ecuador Portugal
Egypt Russia
Finland Singapore
Greece Slovakia
Hong Kong South Korea
Hungary Sri Lanka
India Taiwan
Indonesia Thailand
Israel Turkey
Ivory Coast Uruguay
Jamaica Venezuela
Jordan Zimbabwe
Kenya
</TABLE>

Although the Emerging Markets Fund considers each of the above-listed countries
eligible for investment pursuant to the above described 65% of total assets
investment policy, the Emerging Markets Fund will not be invested in all such
markets at all times. Moreover, investing in some of those markets currently may
not be desirable or feasible, due to the lack of adequate custody arrangements
for the Emerging Markets Fund's assets, overly burdensome repatriation and
similar restrictions, the lack of organized and liquid securities markets,
unacceptable political risks or for other reasons.

As used in this Prospectus, a company in an emerging market is an entity: (i)
for which the principal securities trading market is an emerging market, as
defined above; (ii) that (alone or on a consolidated basis) derives 50% or more
of its total revenue from either goods produced, sales made or services
performed in emerging markets; or (iii) organized under the laws of, and with a
principal office in, an emerging market.

In managing the Emerging Markets Fund, G.T. Capital seeks to identify those
countries and industries where economic and political factors, including
currency movements, are likely to produce above-average growth rates. G.T.
Capital then seeks to invest in those companies in such countries and industries
that are best positioned and managed to take advantage of these economic and
political factors. The assets of the Emerging Markets Fund ordinarily will be
invested in the securities of issuers in at least three different emerging
markets. The Emerging Markets Fund may invest up to 15% of its net assets in
illiquid securities.

The Emerging Markets Fund may invest up to 35% of its total assets in a
combination of (i) debt securities of government or corporate issuers in
emerging markets; (ii) equity and debt securities of issuers in developed
countries, including the United States; (iii) securities of issuers in emerging
markets not included in the list of emerging markets above, if investing therein
becomes feasible and desirable subsequent to the date of this Prospectus; and
(iv) cash and money market instruments. In evaluating investments in securities
of issuers in developed markets, G.T. Capital will consider, among other things,
the business activities of the issuer in emerging markets and the impact that
developments in emerging markets are likely to have on the issuer.

Capital appreciation in debt securities in which the Emerging Markets Fund
invests may arise as a result of favorable changes in relative foreign exchange
rates, in relative interest rate levels and/or in the creditworthiness of
issuers. The receipt of income from debt securities owned by the Emerging
Markets Fund is incidental to the Emerging Markets Fund's objective of long-term
growth of capital.

The Emerging Markets Fund may invest in debt securities of both governmental and
corporate issuers in emerging markets. Emerging market debt securities often are
rated below investment grade. "Investment grade" debt securities are those rated
within the four highest ratings categories of S&P or Moody's or, if unrated,
determined by G.T. Capital to be of comparable quality. Securities rated BBB by
S&P and Baa by Moody's are investment grade debt securities but may have
speculative characteristics. Many emerging market debt securities are not rated
by U.S. ratings agencies. See "Risk Factors."

The Emerging Markets Fund will not invest more than 20% of its total assets in
debt securities rated below investment grade. Investment in non-investment grade
debt securities involves a high degree of risk and can be speculative. These
debt securities are the equivalent of high yield, high risk bonds, commonly
known as "junk bonds." See "Risk Factors" for a more complete discussion. The
Emerging Markets Fund may also use instruments (including forward currency
contracts) often referred to as "derivatives." See "Currency, Options and
Futures Strategies."

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If the rating of any of the Emerging Markets Fund's investments drops below a
minimum rating considered acceptable by G.T. Capital for investment by the
Emerging Markets Fund, the Fund will dispose of any such security as soon as
practicable and consistent with the best interests of the Emerging Markets Fund
and its shareholders.

GROWTH & INCOME FUND

The investment objectives of the GROWTH & INCOME FUND are long-term capital
appreciation together with current income. In seeking those objectives, the
Growth & Income Fund normally invests at least 65% of its assets in a
combination of blue-chip equity securities and high quality government bonds.
The Growth & Income Fund considers an equity security to be "blue chip" if: (i)
during the issuer's most recent fiscal year the security offered an above
average dividend yield relative to the latest reported dividend yield on the
Morgan Stanley Capital International World Index; and (ii) the total equity
market capitalization of the issuer is at least $1 billion. Government bonds are
deemed to be high quality if at the time of the Fund's investment they are rated
within one of the two highest ratings categories of Moody's or S&P, i.e., rated
Aaa or Aa by Moody's or AAA or AA by S&P, or, if unrated, are determined by G.T.
Capital to be of comparable quality.

Up to 35% of the Growth & Income Fund's assets may be invested in other equity
securities and investment grade government and corporate debt obligations which
G.T. Capital believes will assist the Fund in achieving its objectives.

The equity securities in which the Growth & Income Fund may invest include
common stocks, preferred stocks, and warrants to acquire such stocks and other
equity securities. Government bonds that the Fund may purchase include debt
obligations issued or guaranteed by the U.S. or foreign governments (including
foreign states, provinces or municipalities) or their agencies, authorities or
instrumentalities. Such government securities also may include debt obligations
of supranational entities organized or supported by several national
governments, such as the World Bank and the Asian Development Bank. The debt
obligations held by the Growth & Income Fund may include debt obligations
convertible into equity securities or having attached warrants or rights to
purchase equity securities.

The Growth & Income Fund currently contemplates that it will invest principally
in securities of issuers in the United States, Canada, Japan, Mexico, the
Western European nations, New Zealand and Australia. The Growth & Income Fund
may invest substantially in securities denominated in more than one currency.
Under normal market conditions, the Growth & Income Fund invests in the
securities of issuers located in at least three different countries. Investments
in securities of issuers in any one country, other than the United States, will
represent no more than 40% of the Fund's assets. The Growth & Income Fund may
purchase securities of an issuer located in one country but denominated in the
currency of another country (or a multinational currency unit).

G.T. Capital allocates the Growth & Income Fund's assets among securities of
issuers located in countries where opportunities for meeting the Fund's
investment objectives are expected to be the most attractive. The relative
proportions of equity and debt securities held by the Growth & Income Fund at
any one time will vary, and will depend upon G.T. Capital's assessment of global
political and economic conditions and the relative strengths and weaknesses of
the world equity and debt markets. To enable the Growth & Income Fund to respond
to general economic changes and market conditions around the world, the Fund is
authorized to invest up to 100% of its assets in either equity securities or
debt securities.

The Growth & Income Fund may invest up to 5% of its assets in a combination of
securities purchased on a when-issued basis or with respect to which it has
entered into forward commitment agreements. The Growth & Income Fund may also
use instruments (including forward currency contracts) often referred to as
"derivatives." See "Currency, Options and Future Strategies."

STRATEGIC INCOME FUND

The STRATEGIC INCOME FUND seeks high current income as its primary investment
objective and capital appreciation as its secondary investment objective.

The Strategic Income Fund allocates its assets among debt securities of issuers
located in three separate investment areas: (1) the United States, (2) developed
foreign countries, and (3) emerging markets. The Strategic Income Fund will
select particular debt securities in each sector based on their relative
investment

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

merits. Within each area, the Strategic Income Fund selects debt securities from
those issued by governments, their agencies and instrumentalities; central
banks; and commercial banks and other corporate entities. Debt securities in
which the Strategic Income Fund may invest include bonds, notes, debentures, and
other similar instruments. The Strategic Income Fund normally invests at least
50% of its total assets in U.S. and foreign debt and other fixed income
securities that, at the time of purchase, are rated at least investment grade by
Moody's or S&P, or, if unrated, are determined by G.T. Capital to be of
comparable quality. No more than 50% of the Strategic Income Fund's assets may
be invested in securities rated below investment grade, which involve a high
degree of risk and are predominantly speculative. These debt securities are the
equivalent of high yield, high risk bonds, commonly known as "junk bonds." See
"Risk Factors." Consistent with the foregoing, the Strategic Income Fund may
invest in securities that are in default as to payment of principal and/or
interest.

For purposes of the Strategic Income Fund's operations, "emerging markets"
consist of all countries determined by G.T. Capital to have developing or
emerging economies and markets. These countries generally are expected to
include every country in the world except the United States, Canada, Japan,
Australia, New Zealand and most countries in Western Europe. The Strategic
Income Fund currently considers investment in the following emerging markets:

<TABLE>
<S> <C>
Algeria Malaysia
Argentina Mexico
Bolivia Morocco
Botswana Nicaragua
Brazil Nigeria
Chile Pakistan
China Panama
Colombia Peru
Costa Rica Philippines
Czech Republic Poland
Ecuador Portugal
Egypt Russia
Finland Singapore
Greece Slovakia
Hong Kong South Korea
Hungary Sri Lanka
India Taiwan
Indonesia Thailand
Israel Turkey
Ivory Coast Uruguay
Jamaica Venezuela
Jordan Zimbabwe
Kenya
</TABLE>

The Strategic Income Fund's investments in emerging market securities may
consist substantially of Brady Bonds and other sovereign debt securities issued
by emerging market governments. "Sovereign debt securities" are those debt
securities issued by emerging market governments that are traded in the markets
of developed countries or groups of developed countries ("Sovereign Debt"). G.T.
Capital may invest in debt securities of emerging market issuers that it
determines to be suitable investments for the Strategic Income Fund without
regard to ratings. Currently, substantially all emerging market debt securities
are of below investment grade quality. Because the Strategic Income Fund's
investment in debt securities rated below investment grade is limited to 50% of
its total assets, its investment in emerging market debt securities is therefore
effectively limited to 50% of its assets as well.

The Strategic Income Fund also may consider making carefully selected
investments in debt securities rated below investment grade of corporate issuers
in the United States and in developed foreign markets, subject to the overall
50% limitation. See "Risk Factors" for a more complete description of the risks
associated with investment in emerging market debt securities. The Strategic
Income Fund also may invest in bank loan participations and assignments, which
are fixed and floating rate loans arranged through private negotiations between
foreign entities. See "Other Investment Information -- Loan Participations and
Assignments." The Strategic Income Fund may also use instruments (including
forward currency contracts) often referred to as "derivatives." See "Currency,
Options and Futures Strategies."

GLOBAL GOVERNMENT
INCOME FUND

The GLOBAL GOVERNMENT INCOME FUND primarily seeks high current income. The
Fund's secondary objectives are capital appreciation and protection of principal
through active management of the maturity structure and currency exposure. The
Global Government Income Fund normally invests at least 65% of its total assets
in debt obligations issued or guaranteed by the U.S. or

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foreign governments (including foreign states, provinces or municipalities) or
their agencies, authorities or instrumentalities. For purposes of this policy,
the Global Government Income Fund considers debt obligations of supranational
entities organized or supported by several national governments, such as the
World Bank and the Asian Development Bank, to be "government securities." The
Global Government Income Fund also may purchase debt obligations of U.S. or
foreign companies and financial institutions.

The Global Government Income Fund currently contemplates that it will invest
principally in obligations of the United States, Canada, Japan, the Western
European nations, New Zealand and Australia, as well as in multinational
currency units. Under normal market conditions, the Global Government Income
Fund invests in the securities of issuers located in at least three different
countries. Investments in securities of issuers in any one country, other than
the United States, will represent no more than 40% of the Fund's total assets.
The Global Government Income Fund does not invest in a foreign currency or in
securities denominated in a foreign currency if such currency is not at the time
of investment considered by G.T. Capital to be fully exchangeable into U.S.
dollars (or a multinational currency unit) without legal restriction. The Global
Government Income Fund may purchase securities of an issuer located in one
country but denominated in the currency of another country (or a multinational
currency unit).

The Global Government Income Fund invests primarily in high quality government
securities, i.e., those securities rated in the two highest ratings categories
of Moody's or S&P, or, if unrated, determined by G.T. Capital to be of
comparable quality.

Consistent with its investment objectives, the Global Government Income Fund may
invest up to 35% of its assets in a combination of: (a) foreign government
securities that are not high quality but are rated at least investment grade by
S&P or Moody's, or if unrated, determined by G.T. Capital to be of equivalent
quality; (b) corporate debt obligations of U.S. or foreign issuers rated at
least investment grade by Moody's or S&P, including debt obligations convertible
into equity securities or having attached warrants or rights to purchase equity
securities; and (c) common and preferred stock, and warrants to acquire such
stocks, provided that the Fund will not invest more than 20% of its total assets
in such securities. In addition, the Global Government Income Fund may invest in
debt obligations convertible into equity securities or having attached warrants
or rights to purchase equity securities.

The U.S. government securities in which the Global Government Income Fund may
invest include direct obligations of the U.S. Treasury (such as Treasury bills,
notes and bonds) and obligations issued or guaranteed by U.S. government
agencies and instrumentalities, including securities that are supported by the
full faith and credit of the United States (such as Government National Mortgage
Association ("GNMA") certificates), securities that are supported by the right
of the issuer to borrow from the U.S. Treasury (such as securities of the
Federal Home Loan Banks) and securities that are supported primarily or solely
by the creditworthiness of the issuer (such as securities of the Federal
National Mortgage Association ("FNMA"), the Federal Home Loan Mortgage
Corporation ("FHLMC"), the Student Loan Marketing Association ("SLMA") and the
Tennessee Valley Authority ("TVA")). The Global Government Income Fund may also
use instruments (including forward currency contracts) often referred to as
"derivatives." See "Currency, Options and Futures Strategies."

G.T. Capital allocates the Global Government Income Fund's assets among
securities of countries and in currency denominations where opportunities for
meeting the Fund's investment objectives are expected to be the most attractive.
G.T. Capital selects securities of particular issuers on the basis of its views
as to the best values then currently available in the marketplace. Such values
are a function of yield, maturity, issue classification and quality
characteristics, coupled with expectations regarding the local and world
economies, movements in the general level and term of interest rates, currency
values, political developments, and variations of the supply of funds available
for investment in the world bond market relative to the demands placed upon it.

U.S. GOVERNMENT INCOME FUND

The investment objective of the U.S. GOVERNMENT INCOME FUND is a high level of
current income, consistent with the preservation

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

of capital. The U.S. Government Income Fund normally invests at least 65% of its
total assets in U.S. government securities including: direct obligations of the
U.S. Treasury (such as Treasury bills, notes and bonds); and obligations issued
or guaranteed by U.S. government agencies and instrumentalities, including
securities that are supported by the full faith and credit of the United States
(such as GNMAs), securities that are supported by the right of the issuer to
borrow from the U.S. Treasury (such as securities of the Federal Home Loan
Banks) and securities supported primarily or solely by the creditworthiness of
the issuer (such as securities of FNMA, FHLMC, SLMA and TVA).

The U.S. Government Income Fund may invest in mortgage-related securities, such
as collateralized mortgage obligations ("CMOs"), fixed-rate mortgage obligations
and adjustable rate mortgage obligations ("ARMs"). These securities are issued
or guaranteed by GNMA, FNMA or FHLMC, among others.

Treasury bills, notes and bonds and other obligations backed by the "full faith
and credit" pledge of the U.S. government historically have involved little risk
of loss of principal if held to maturity. While not backed by the full faith and
credit of the U.S. government, mortgage-related securities issued or guaranteed
by FNMA or FHLMC are high quality investments having minimal credit risks. All
securities in which the U.S. Government Income Fund invests, however, are
subject to variations in market value due to interest rate fluctuations.

A number of U.S. government agencies or government-sponsored organizations also
sell their own debt securities. These agencies typically are created by Congress
to fulfill a specific function, such as providing credit to home buyers or
farmers; for example, Federal Home Loan Banks, Federal Farm Credit Banks, and
SLMA. Some of these obligations are backed by the full faith and credit of the
U.S. government, as noted above, and some are supported primarily or solely by
the creditworthiness of the issuing agency, such as those issued by TVA. These
securities traditionally offer somewhat higher yields than U.S. Treasury
securities having similar maturities but may have greater principal risk.

The Resolution Funding Corporation ("Refcorp") issues bonds whose interest
payments are guaranteed by U.S. Treasury zero-coupon securities. The amount and
maturity date of the Refcorp bonds are the same as the amount and maturity date
of the corresponding U.S. Treasury zero-coupon bonds held in a separate custody
account at the Federal Reserve Bank of New York. Upon maturity, the Refcorp
bonds will be repaid from the proceeds of those U.S. Treasury zero-coupon bonds
maturing on the same date.

Consistent with its investment objective, the U.S. Government Income Fund may
invest up to 35% of its total assets in a combination of: foreign government
securities that are at least of investment grade quality and any U.S. government
securities that are rated below "high quality" but are rated at least investment
grade by Moody's or S&P, or if unrated determined by G.T. Capital to be of
equivalent quality. For purposes of this policy, the U.S. Government Income Fund
considers debt obligations of supranational entities organized or supported by
several national governments, such as the World Bank and the Asian Development
Bank, to be "foreign government securities." The U.S. Government Income Fund may
purchase securities that are issued by the government of one country but
denominated in the currency of another country (or a multinational currency
unit). The U.S. Government Income Fund will not invest in a security denominated
in a foreign currency if such currency is not at the time of investment
considered by G.T. Capital to be fully exchangeable into U.S. dollars (or a
multinational currency unit) without legal restriction. The U.S. Government
Income Fund may also use instruments (including forward currency contracts)
often referred to as "derivatives." See "Currency, Options and Futures
Strategies."

MONEY MARKET FUND

The investment objective of the MONEY MARKET FUND is maximum current income
consistent with liquidity and conservation of capital. The Money Market Fund
seeks this objective by investing in high quality, U.S. dollar-denominated money
market instruments, i.e., debt obligations with remaining maturities of 13
months or less.

The Money Market Fund seeks to maintain a net asset value of $1.00 per share. To
do so, the Money Market Fund will maintain a dollar-weighted average maturity of
90 days or less and will purchase only instruments having remaining maturities
of 13 months or less.

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

The Money Market Fund invests only in high quality, U.S. dollar-denominated
money market instruments determined by G.T. Capital to present minimal credit
risks in accordance with procedures established by the Board of Trustees. To be
considered high quality, a security must be rated in accordance with applicable
rules in one of the two highest rating categories for short-term securities by
at least two nationally recognized statistical rating organizations
("NRSROs")(or one, if only one NRSRO has rated the security); or, if the issuer
has no applicable short-term rating, determined by G.T. Capital to be of
equivalent credit quality.

High quality securities are divided into "first tier" and "second tier"
securities. The Money Market Fund will invest only in first tier securities.
First tier securities have received the highest rating for short-term debt from
at least two NRSROs, i.e., rated not lower than A-1 by S&P or P-1 by Moody's (or
one, if only one such NRSRO has rated the security), or, if unrated, determined
to be of equivalent quality as described above. If a security has been assigned
different ratings by different NRSROs, at least two NRSROs must have assigned
the higher rating in order for G.T. Capital to determine the security's
eligibility for purchase by the Fund.

The rating criteria of S&P and Moody's, two NRSROs which are currently rating
instruments of the type the Money Market Fund may purchase, are more fully
described in the "Description of Debt Ratings" in the Statement of Additional
Information.

The Money Market Fund may invest in the following types of money market
instruments:

Obligations issued or guaranteed by the U.S. and foreign governments, their
agencies and instrumentalities. These include direct obligations of the U.S.
Treasury, such as Treasury bills and notes; obligations backed by the full faith
and credit of the U.S. government, such as those issued by the GNMA; obligations
supported primarily or solely by the creditworthiness of the issuer, such as
securities of the FNMA, the FHLMC and the TVA; and similar U.S. dollar-
denominated instruments of foreign governments, their agencies, authorities and
instrumentalities.

Obligations of U.S. and non-U.S. banks, including certificates of deposit,
bankers' acceptances and similar instruments, when such banks have total assets
at the time of purchase equal to at least $1 billion.

Interest-bearing deposits in U.S. commercial and savings banks having total
assets of $1 billion or less, in principal amounts at each such bank not greater
than are insured by an agency of the U.S. government, provided that the
aggregate amount of such deposits (including interest earned) does not exceed 5%
of the Money Market Fund's assets.

Commercial paper and other short-term debt obligations of U.S. and foreign
companies, rated at least A-1 by S&P or Prime-1 by Moody's, or, if not rated,
determined to be of equivalent quality by G.T. Capital, provided that any
outstanding intermediate- or long-term debt of the issuer is rated at least AA
by S&P or Aa by Moody's. See the "Description of Debt Ratings" in the Statement
of Additional Information. These instruments may include corporate bonds and
notes (corporate obligations that mature, or that may be redeemed, in one year
or less). These corporate obligations include variable rate master notes, which
are redeemable upon notice and permit investment of fluctuating amounts at
varying rates of interest pursuant to direct arrangements with the issuer of the
instrument.

Repurchase agreements secured by any of the foregoing.

In managing the Money Market Fund, G.T. Capital may employ a number of
professional money management techniques, including varying the composition of
the Fund's investments and the average weighted maturity of the Fund's
securities within the limitations described above. Determinations to use such
techniques will be based on G.T. Capital's identification and assessment of the
relative values of various money market instruments and the future of interest
rate patterns, economic conditions and shifts in fiscal and monetary policy.
G.T. Capital also may seek to improve the Money Market Fund's income by
purchasing or selling securities in order to take advantage of yield disparities
that regularly occur in the market. For example, frequently there are yield
disparities between different types of money market instruments, and market
conditions from time to time result in similar securities trading at different
prices.

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OTHER INVESTMENT INFORMATION

INVESTMENT IN ILLIQUID SECURITIES. Each Fund, other than the Money Market Fund,
may invest up to 15% of its net assets in illiquid securities. The Money Market
Fund may invest up to 10% of its net assets in illiquid securities. Repurchase
agreements maturing in more than seven days are considered illiquid securities.
G.T. Capital believes, in the case of the Infrastructure Fund, the Natural
Resources Fund, the Telecommunications Fund and the Latin America Fund, that
carefully selected investments in joint ventures, cooperatives, partnerships and
state enterprises, private placements, and other similar vehicles which are
illiquid (collectively, "Special Situations") could enable the Infrastructure
Fund, the Natural Resources Fund, the Telecommunications Fund and the Latin
America Fund to achieve capital appreciation substantially exceeding the
appreciation the Fund would realize if it did not make such investments.
However, in order to limit investment risk, the Infrastructure Fund, the Natural
Resources Fund, the Telecommunications Fund and the Latin America Fund are
permitted to invest no more than 5% of their respective total assets in Special
Situations, and no more than 15% of their respective net assets in Special
Situations and other illiquid investments. See "Risk Factors" in the Statement
of Additional Information.

BRADY BONDS. The Latin America Fund and the Strategic Income Fund may invest in
"Brady Bonds," which are debt restructurings that provide for the exchange of
cash and loans for newly issued bonds. Brady Bonds have been issued by the
countries of, among others, Argentina, Brazil, Costa Rica, Mexico, Nigeria,
Poland, Uruguay, Venezuela and the Philippines. In addition, Peru and Panama
have announced intentions to issue Brady Bonds. Approximately $136 billion in
principal amount of Brady Bonds has been issued as of the date of this
Prospectus, the largest proportion having been issued by Brazil, Argentina and
Mexico. Brady Bonds issued by such countries may be rated below investment
grade. As of the date of this Prospectus, the Funds are not aware of the
occurrence of any payment defaults on Brady Bonds. Investors should recognize,
however, that Brady Bonds have been issued only recently, and, accordingly, do
not have a long payment history. Brady Bonds may be collateralized or
uncollateralized, are issued in various currencies (primarily the U.S. dollar)
and are actively traded in the secondary market for Latin American debt. The
Salomon Brothers Brady Bond Index provides a benchmark that can be used to
compare returns of emerging market Brady Bonds with returns in other bond
markets, e.g., the U.S. bond market.

The Strategic Income Fund may invest in either collateralized or
uncollateralized Brady Bonds. U.S. dollar-denominated, collateralized Brady
Bonds, which may be fixed rate par bonds or floating rate discount bonds, are
collateralized in full as to principal by U.S. Treasury zero coupon bonds having
the same maturity as the bonds. Interest payments on such bonds generally are
collateralized by cash or securities in an amount that, in the case of fixed
rate bonds, is equal to at least one year of rolling interest payments or, in
the case of floating rate bonds, initially is equal to at least one year's
rolling interest payments based on the applicable interest rate at that time and
is adjusted at regular intervals thereafter.

PRIVATIZATIONS. The governments of some foreign countries have been engaged in
programs of selling part or all of their stakes in government owned or
controlled enterprises ("privatizations"). In certain foreign countries, the
ability of foreign entities such as the Funds to participate in privatizations
may be limited by local law, or the terms on which the Funds may be permitted to
participate may be less advantageous than those for local investors. There can
be no assurance that foreign governments will continue to sell companies
currently owned or controlled by them or that privatization programs will be
successful. G.T. Capital believes that privatizations may offer opportunities
for significant capital appreciation and intends to invest assets of the
Infrastructure Fund, the Natural Resources Fund, the Telecommunications Fund,
the Emerging Markets Fund, and the Latin America Fund, respectively, in
privatizations in appropriate circumstances.

TEMPORARY DEFENSIVE INVESTMENT STRATEGIES. Each Fund retains the flexibility to
respond promptly to changes in market and economic conditions. Accordingly, in
the interest of preserving shareholders' capital and consistent with each Fund's
investment objective(s), G.T. Capital may employ a temporary defensive
investment strategy if it determines such a strategy to be warranted due to
market

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

conditions. Under a defensive strategy, a Fund may hold cash (U.S. dollars,
foreign currencies or multinational currency units) and/or invest any portion or
all of its assets in debt securities or high quality money market instruments
issued by corporations or the U.S. or a foreign government. In addition, for
temporary defensive purposes, such as during times of international political or
economic uncertainty, most or all of a Fund's investments may be made in the
United States and denominated in U.S. dollars. To the extent a Fund adopts a
temporary defensive position, it will not be invested so as to achieve directly
its investment objective.

In addition, pending investment of proceeds from new sales of shares of a Fund
or to meet its ordinary daily cash needs, a Fund may hold cash (U.S. dollars,
foreign currencies or multinational currency units) and may invest any portion
or all of its assets in foreign or domestic high quality money market
instruments. Money market instruments in which a Fund may invest include, but
are not limited to, U.S. or foreign government securities; high grade commercial
paper; bank certificates of deposit; bankers' acceptances; and repurchase
agreements related to any of the foregoing. High grade commercial paper refers
to commercial paper rated A-1 by S&P or P-1 by Moody's or, if not rated,
determined by G.T. Capital to be of comparable quality to commercial paper so
rated.

LOAN PARTICIPATIONS AND ASSIGNMENTS. The Strategic Income Fund may invest in
fixed and floating rate loans ("Loans") arranged through private negotiations
between a foreign entity and one or more financial institutions ("Lenders"). The
majority of the Strategic Income Fund's investments in Loans in emerging markets
is expected to be in the form of participations in Loans ("Participations") and
assignments of portions of Loans ("Assignments") from third parties.
Participations typically will result in the Strategic Income Fund's having a
contractual relationship only with the Lender, not with the borrowing
government. The Strategic Income Fund will have the right to receive payments of
principal, interest and any fees to which it is entitled only from the Lender
selling the
Participation and only upon receipt by the Lender of the payments from the
borrower. In connection with purchasing Participations, the Strategic Income
Fund generally will have no right to enforce compliance by the borrower with the
terms of the loan agreement relating to the loan ("Loan Agreement"), nor any
rights of set-off against the borrower, and the Fund may not directly benefit
from any collateral supporting the Loan in which it has purchased the
Participation. As a result, the Strategic Income Fund will assume the credit
risk of both the borrower and the Lender that is selling the Participation. In
the event of the insolvency of the Lender selling a Participation, the Strategic
Income Fund may be treated as a general creditor of the Lender and may not
benefit from any set-off between the Lender and the borrower. The Strategic
Income Fund will acquire Participations only if the Lender interpositioned
between the Fund and the borrower is determined by G.T. Capital to be
creditworthy. When the Strategic Income Fund purchases Assignments from Lenders,
the Fund will acquire direct rights against the borrower on the Loan. However,
because Assignments are arranged through private negotiations between potential
assignees and potential assignors, the rights and obligations acquired by the
Strategic Income Fund as the purchaser of an Assignment may differ from, and be
more limited than, those held by the assigning Lender.

The Strategic Income Fund may have difficulty disposing of Assignments and
Participations. Because there is no liquid market for such securities, the
Strategic Income Fund anticipates that such securities could be sold only to a
limited number of institutional investors. The lack of a liquid secondary market
will have an adverse impact on the value of such securities and on the Strategic
Income Fund's ability to dispose of particular Assignments or Participations
when necessary to meet the Fund's liquidity needs or in response to a specific
economic event, such as a deterioration in the creditworthiness of the borrower.
The lack of a liquid secondary market for Assignments and Participations also
may make it more difficult for the Fund to assign a value to those securities
for purposes of valuing the Strategic Income Fund's holdings and calculating its
net asset value. The Strategic Income Fund's investment in illiquid securities,
including Assignments and Participations, is limited to 15% of its net assets.

BORROWING AND LENDING. From time to time, it may be advantageous for the Funds
to borrow money rather than sell existing securities to meet

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

redemption requests. Accordingly, a Fund may borrow from banks or (except for
the Money Market Fund) may borrow through reverse repurchase agreements in
connection with meeting requests for the redemption of shares of the Fund. Each
Fund also may borrow up to 5% of its total assets for temporary or emergency
purposes other than to meet redemptions by its investors. The Funds (except for
the Strategic Income Fund) will not borrow for leveraging purposes, nor will the
Funds (except for the Infrastructure Fund, the Natural Resources Fund, the
Telecommunications Fund, the Emerging Markets Fund and the Latin America Fund)
purchase securities while borrowings
are outstanding. The Infrastructure Fund,
the Natural Resources Fund, the Telecommunications Fund, the Emerging Markets
Fund and the Latin America Fund may each purchase additional securities when
outstanding borrowings represent no more than 5% of its assets. See "Investment
Objectives and Policies" in the Statement of Additional Information.

The Strategic Income Fund is authorized to borrow money from banks in an amount
up to 33 1/3% of its total assets, (including the amount borrowed), less all
liabilities and indebtedness other than the borrowing and may use the proceeds
of such borrowings for investment purposes. Borrowings create leverage, a
speculative factor. The Strategic Income Fund will borrow only when G.T. Capital
believes that such borrowings will benefit the Fund, after taking into account
considerations such as the costs of the borrowing and the likely investment
returns on the securities purchased with the borrowed monies.

Borrowing by the Strategic Income Fund will create an opportunity for increased
net income but, at the same time, will involve special risk considerations. For
example, leveraging might exaggerate changes in the net asset value of the
Strategic Income Fund's shares and in the yield on the Fund's portfolio.
Although the principal of such borrowings will be fixed, the Strategic Income
Fund's assets may change in value during the time the borrowing is outstanding.
To the extent the income derived from the assets obtained with borrowed funds
exceeds the interest and other expenses that the Strategic Income Fund will have
to pay, the Fund's net income will be greater than if borrowing were not used.
Conversely, if the income from the assets obtained with borrowed funds is not
sufficient to cover the cost of borrowing, the net income of the Strategic
Income Fund will be less than if borrowing were not used, and therefore the
amount available for distribution to shareholders as dividends will be reduced.
The Strategic Income Fund expects that some of its borrowings may be made on a
secured basis. In such situations, the Strategic Income Fund's custodian will
segregate the pledged assets for the benefit of the lender or arrangements will
be made with a suitable subcustodian, which may include the lender.

Each Fund (except the Money Market Fund) is authorized to make loans of its
securities to broker/dealers or to other institutional investors. The borrower
must maintain with the lending Fund's custodian collateral consisting of cash,
U.S. government securities or other liquid, high grade debt securities equal to
at least the value of the borrowed securities, plus any accrued interest. A Fund
will receive any interest paid on the loaned securities and a fee and/or a
portion of the interest earned on the collateral. Each Fund will limit its loans
of securities to an aggregate of 30% of the value of its total assets, measured
at the time any such loan is made. The risks in lending portfolio securities, as
with other extensions of secured credit, consist of possible delay in receiving
additional collateral or in recovery of the securities or possible loss of
rights in the collateral should the borrower fail financially. See "Investment
Objectives and Policies" in the Statement of Additional Information.

INVESTMENT IN OTHER INVESTMENT COMPANIES OR VEHICLES. With respect to certain
countries, investments by a Fund currently may be made only by acquiring shares
of other investment companies with local government approval to invest in those
countries. Pursuant to the Investment Company Act of 1940, as amended (the "1940
Act"), each Fund (except the Money Market Fund) may invest up to 10% of its
total assets in the aggregate in shares of other investment companies, and up to
5% of its total assets in any one investment company, but may purchase no more
than 3% of the voting stock of the acquired investment company, all as of the
time such shares are purchased. Investment in other investment companies or
vehicles may be the most practical or only manner in which a Fund can
participate in certain securities markets. Such investment may involve the
payment of

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

substantial premiums above the value of such issuers' portfolio securities, and
is subject to limitations under the 1940 Act and market availability. There can
be no assurance that investment companies or other vehicles for investing in
certain countries will be available for investment. A Fund will not invest in
such vehicles or funds unless, in the judgment of G.T. Capital, the potential
benefits of such investment justify the payment of any applicable premium or
sales charge. As a shareholder in an investment company, a Fund would bear its
ratable share of that investment company's expenses, including its advisory and
administration fees. At the same time, a Fund would continue to pay its own
management fees and other expenses. See "Investment Objectives and Policies" in
the Statement of Additional Information.

WHEN-ISSUED AND FORWARD COMMITMENT SECURITIES. The Funds may purchase debt
securities on a "when-issued" basis and may purchase or sell such securities on
a "forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. The price of the securities, which is generally
expressed in yield terms, is fixed at the time the commitment is made, but
delivery and payment for the securities take place at a later date. When-issued
securities and forward commitments may be sold prior to the settlement date, but
a Fund will enter into when-issued and forward commitments only with the
intention of actually receiving or delivering the securities, as the case may
be. No income accrues on securities which have been purchased pursuant to a
forward commitment or on a when-issued basis prior to delivery to the Fund. If a
Fund disposes of the right to acquire a when-issued security prior to its
acquisition or disposes of its right to deliver or receive against a forward
commitment, it may incur a gain or loss. At the time a Fund enters into a
transaction on a when-issued or forward commitment basis, a segregated account
consisting of cash or high grade liquid debt securities equal to the value of
the when-issued or forward commitment securities will be established and
maintained at the Funds' custodian bank and will be marked to market daily.
There is a risk that the securities purchased on a when-issued or forward
commitment basis may not be delivered and that the Fund may incur a loss or miss
an opportunity to make an alternative investment as a result.

REPURCHASE AGREEMENTS. Repurchase agreements are transactions in which a Fund
purchases a security from a bank or recognized securities dealer and
simultaneously commits to resell that security to the bank or dealer at an
agreed-upon price, date and market rate of interest unrelated to the coupon rate
or maturity of the purchased security. Although repurchase agreements carry
certain risks not associated with direct investments in securities, including
possible decline in the market value of the underlying securities and delays and
costs to the Fund if the other party to the repurchase agreement becomes
bankrupt, the Funds intend to enter into repurchase agreements only with banks
and dealers believed by G.T. Capital to present minimal credit risks in
accordance with guidelines approved by the Companies' Boards of Trustees. G.T.
Capital reviews and monitors the creditworthiness of such institutions under the
Board's general supervision. See "Investment Objectives and
Policies -- Repurchase Agreements" in the Statement of Additional Information.

The Funds will invest only in repurchase agreements collateralized at all times
in an amount at least equal to the repurchase price plus accrued interest. To
the extent that the proceeds from any sale of such collateral upon a default in
the obligation to repurchase were less than the repurchase price, a Fund would
suffer a loss. If the financial institution that is party to a repurchase
agreement petitions for bankruptcy or otherwise becomes subject to bankruptcy or
other liquidation proceedings, there may be restrictions on a Fund's ability to
sell the collateral and the Fund could suffer a loss. However, with respect to
financial institutions whose bankruptcy or liquidation proceedings are subject
to the U.S. Bankruptcy Code, the Funds intend to comply with provisions under
the U.S. Bankruptcy Code that would allow them immediately to resell such
collateral. The Funds will not enter into a repurchase agreement with a maturity
of more than seven days if, as a result, more than 15% (10% with respect to the
Money Market Fund) of the value of their respective net assets would be invested
in such repurchase agreements and other illiquid securities.

STRIPPED MORTGAGE SECURITIES. The U.S. Government Income Fund may invest in
"stripped" mortgage securities which are derivative multi-class mortgage
securities. The stripped mortgage

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

securities in which the U.S. Government Income Fund may invest are issued or
guaranteed by agencies or instrumentalities of the U.S. government. Stripped
mortgage securities have greater market volatility than other types of mortgage
securities in which the U.S. Government Income Fund may invest.

Stripped mortgage securities are usually structured with two classes that
receive different proportions of the interest and principal distributions on a
pool of mortgage assets. A common type of stripped mortgage security will have
one class receiving some of the interest and most of the principal from the
mortgage assets, while the other class will receive most of the interest and the
remainder of the principal. In the most extreme case, one class will receive all
of the interest (the interest-only or "IO" class), while the other class will
receive all of the principal (the principal-only or "PO" class). The yield to
maturity on an IO class is extremely sensitive not only to changes in prevailing
interest rates but also to the rate of principal payments (including
prepayments) on the related underlying mortgage assets, and a rapid rate of
principal payments may have a material adverse effect on the yield to maturity
of certain mortgage securities held by the U.S. Government Income Fund. If the
underlying mortgage assets experience greater than anticipated prepayments of
principal, the U.S. Government Income Fund may fail to fully recoup its initial
investment in these securities even if the securities are rated in the highest
rating categories, AAA or Aaa, by S&P or Moody's, respectively.

ZERO COUPON SECURITIES. The Strategic Income Fund and the U.S. Government
Income Fund may invest in certain zero coupon securities that are "stripped"
U.S. Treasury notes and bonds. The Strategic Income Fund also may invest in zero
coupon and other deep discount securities issued by foreign governments and
domestic and foreign corporations, including certain Brady Bonds and other
foreign debt securities and in payment-in-kind securities. Zero coupon
securities pay no interest to holders prior to maturity, and payment-in-kind
securities pay interest in the form of additional securities. However, a portion
of the original issue discount on zero coupon securities and the "interest" on
payment-in-kind securities are included in the investing Fund's income.
Accordingly, to continue to qualify for tax treatment as a regulated investment
company and to avoid a certain excise tax (see "Taxes" in the Statement of
Additional Information), the Strategic Income Fund or the U.S. Government Income
Fund may be required to distribute as a dividend an amount that is greater than
the total amount of cash it actually receives. These distributions must be made
from the Funds' respective cash assets or, if necessary, from the proceeds of
sales of portfolio securities. The Strategic Income Fund and the U.S. Government
Income Fund will not be able to purchase additional income-producing securities
with cash used to make such distributions, and their respective current incomes
ultimately may be reduced as a result. Zero coupon and payment-in-kind
securities usually trade at a deep discount from their face or par value and are
subject to greater fluctuations of market value in response to changing interest
rates than are debt obligations of comparable maturities that make current
distributions of interest in cash.

OTHER INFORMATION. The investment objective(s) of each Fund may not be changed
without the approval by holders of a "majority of the outstanding voting
securities" of such Fund. As defined in the 1940 Act and as used in this
Prospectus, a "majority of the outstanding voting securities" of a Fund means
the lesser of (i) 67% or more of the outstanding shares of the Fund, represented
at a shareholders' meeting at which more than 50% of the outstanding shares of
the Fund are represented at the meeting in person or by proxy or (ii) more than
50% of the outstanding shares of the Fund. In addition, certain investment
limitations have been adopted by each Fund and may not be changed without the
approval by holders of a "majority of the outstanding voting securities" of the
Fund. A complete description of these limitations is included in the Statement
of Additional Information. Unless specifically noted, the investment policies
described in this Prospectus and in the Statement of Additional Information are
not fundamental policies and may be changed by the Board of Trustees of the
relevant Company, without the approval of "a majority of the outstanding voting
securities" of the respective Funds, provided that any such policies as so
amended do not conflict with the fundamental investment limitations of such
Funds. See "Investment Limitations" in the Statement of Additional Information.

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

PORTFOLIO TURNOVER. G.T. Capital does not regard portfolio turnover as a
limiting factor and will buy or sell securities for the Funds as necessary in
response to market conditions to meet the respective Funds' objectives. The
Funds engage in portfolio trading when G.T. Capital concludes that the sale of a
security owned by a Fund and/or the purchase of another security of better value
can enhance principal and/or increase income. A security may be sold to avoid
any prospective decline in market value, or a security may be purchased in
anticipation of a market rise. Consistent with each Fund's investment
objective(s), a security also may be sold and a comparable security purchased in
order to take advantage of what is believed to be a disparity in the normal
yield and price relationship between the two securities. Although the Funds
generally do not intend to trade for short-term profits, the securities in each
Fund's portfolio will be sold whenever G.T. Capital believes it is appropriate
to do so, without regard to the length of time a particular security may have
been held (except to the extent necessary to avoid non-compliance with the
"Short-Short Limitation" described in "Taxes" in the Statement of Additional
Information).

G.T. Capital anticipates that: (i) the annual portfolio turnover rates of the
New Pacific Fund, the Europe Fund, the Infrastructure Fund, the Natural
Resources Fund, the Telecommunications Fund, the International Fund, the
Emerging Markets Fund, and the Money Market Fund will not exceed 100%; (ii) such
turnover rates of the Latin America Fund, the America Fund, the Growth & Income
Fund, and the U.S. Government Income Fund may exceed 100%; and (iii) the annual
portfolio turnover rates of the Strategic Income Fund and the Global Government
Income Fund are likely to exceed 100%. The portfolio turnover rate is calculated
by dividing the lesser of sales or purchases of securities by the respective
Funds' average month-end portfolio value, excluding short-term investments. This
calculation excludes purchases and sales of debt securities having a maturity on
the date of purchase of one year or less. High turnover involves correspondingly
greater transaction costs in the form of dealer spreads or brokerage commissions
and other costs that a Fund will bear directly, and could result in the
realization of net capital gains which would be taxable when distributed to
shareholders. See "Execution of Portfolio Transactions" in the Statement of
Additional Information.

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RISK FACTORS
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The net asset value of each Fund (other than the Money Market Fund) will
fluctuate, reflecting changes in the market value of its investments. There can
be no assurance, however, that the Money Market Fund will be able to maintain a
stable net asset value of $1.00 per share. The value of debt securities held by
a Fund generally varies inversely with movements in interest rates. In addition,
the various investment policies of each Fund present certain specific risks.
These risks are described below.

GENERAL RISKS OF FOREIGN INVESTING. All of the Funds (to a lesser extent the
America Fund) are authorized to invest in foreign securities. Foreign investing
entails certain risks not associated with investing in the securities of U.S.
issuers. Foreign securities generally will not be registered with, nor will the
issuers thereof be subject to the reporting requirements of, the SEC.
Accordingly, there may be less publicly available information about foreign
securities and issuers than is available about U.S. securities and issuers.
Foreign companies generally are not subject to uniform accounting, auditing and
financial reporting standards, practices and requirements comparable to those
applicable to U.S. companies. Securities of some foreign companies are less
liquid and their prices may be more volatile than securities of comparable U.S.
companies. In addition, certain costs attributable to foreign investing, such as
custody charges, are higher than those attributable to domestic investing. The
respective Funds' net investment income from foreign issuers may be subject to
non-U.S. withholding taxes, thereby reducing the respective Funds' net
investment income.

In addition, with respect to some foreign countries, there is the possibility of
expropriation

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

or confiscatory taxation, limitations on the removal of funds or other assets of
the Funds, political or social instability, or diplomatic or economic
developments which could affect the Funds' investments in those countries.
Moreover, individual foreign economies may differ favorably or unfavorably from
the U.S. economy in such respects as growth of gross national product, rates of
inflation, rates of savings and capital reinvestment, resource self-sufficiency
and balance of payments positions. G.T. Capital will rely on its worldwide
financial and investment expertise to attempt to limit these risks. See "Risk
Factors" in the Statement of Additional Information.

Because the Funds (except the Money Market Fund) may invest substantially, and
the America Fund to a lesser extent, in securities denominated in currencies
other than the U.S. dollar, and because most of the Funds may hold foreign
currencies, such Funds will be affected favorably or unfavorably by exchange
control regulations or changes in the exchange rates between such currencies and
the U.S. dollar. Changes in currency exchange rates will influence the value of
the securities held by the Funds and, as a result, the value of the Funds'
shares, and also may affect the value of dividends and interest earned by the
Funds and gains and losses realized by the Funds. Exchange rates are determined
by the forces of supply and demand in the foreign exchange markets. These forces
are affected by the international balance of payments and other economic and
financial conditions, government intervention, speculation and other factors. If
the currency in which a security is denominated appreciates against the U.S.
dollar, the dollar value of the security will increase. Conversely, a decline in
the exchange rate of the currency would adversely affect the value of the
security expressed in U.S. dollars.

SPECIAL RISKS OF A GLOBAL THEME FUND. The Infrastructure Fund, the Natural
Resources Fund and the Telecommunications Fund concentrate their investments in
a specific industry. Accordingly, the value of the securities held by the
Infrastructure Fund, the Natural Resources Fund and the Telecommunications Fund
and, as a result, the share price of each Fund, may be more volatile than those
of investment companies that do not concentrate their investments in a specific
industry and, thus, each fund individually should not be considered a complete
investment program.

The net asset value of Infrastructure Fund shares will be susceptible to factors
affecting the infrastructure industries. In both the U.S. and foreign countries,
these industries may be subject to greater political, environmental and other
governmental regulation than many other industries. The nature of such
regulation continues to evolve in both the United States and foreign countries,
and changes in governmental policies and the need for regulatory approvals may
have a material effect on the products and services of this industry. Electric,
gas, water and most telecommunications companies in the United States, for
example, are subject to both federal and state regulation affecting permitted
rates of return and the kinds of services that may be offered. Changes in
prevailing interest rates may also affect the Infrastructure Fund's share values
because prices of equity and debt securities of infrastructure companies often
tend to increase when interest rates decline and decrease when interest rates
rise. In addition, many infrastructure companies, including coal, steel, and
other types of companies, have historically been subject to the risks attendant
to increases in fuel and other operating costs, high interest costs on borrowed
funds, costs associated with compliance with environmental and other safety
regulations and changes in the regulatory climate. Such governmental regulation
may also hamper the development of new technologies, and it is impossible to
predict the direction, type or effect of any future regulation. Further
competition is intense for many infrastructure companies. As a result, many of
these companies may be adversely affected in the future and such companies may
be subject to increased share price volatility. In addition, many companies have
diversified into oil and gas exploration and development, therefore returns may
be more sensitive to energy prices. Other infrastructure companies, such as
water supply companies, are in a highly fragmented industry due to local
ownership. Generally these companies are mature and are experiencing little or
no growth.

The net asset value of Natural Resources Fund shares will be susceptible to
factors affecting the natural resource industries. In both the U.S. and foreign
countries, for example, these industries may be subject to greater political,
environmental and other governmental regulation than other industries. The
nature of such regulation continues to evolve in both the U.S. and foreign
countries, and changes in governmental policies

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

and the need for regulatory approvals may have a material effect on the products
and services of natural resource companies. For example, the exploration,
development and distribution of coal, oil and gas in the United States are
subject to significant federal and state regulation, which may affect rates of
return on such investments and the kinds of services that may be offered. In
addition, many natural resource companies historically have been subject to
significant costs associated with compliance with environmental and other safety
regulations and changes in the regulatory climate. Such governmental regulations
may also hamper the development of new technologies, and it is impossible to
predict the direction, type or effect of any future regulation. Further,
competition is intense for many natural resource companies. As a result, many of
these companies may be adversely affected in the future and the value of the
securities issued by such companies may be subject to increased share price
volatility.

The value of the securities held in the portfolio of the Natural Resources Fund
will fluctuate in response to stock market developments, as well as market
conditions for the particular natural resources with which the issuer is
involved. The price of the commodity will fluctuate due to changes in worldwide
levels of inventory, and changes, perceived or actual, in production and
consumption. The values of natural resources may fluctuate directly with respect
to various stages of the inflationary cycle and perceived inflationary trends
and are subject to numerous factors, including national and international
politics. The Natural Resources Fund's investments in precious metals are
subject to many risks, including substantial price fluctuations over short
periods of time. Further, the Natural Resources Fund's investments in companies
are expected to be subject to irregular fluctuations in earnings, because these
companies are affected by changes in the availability of money, the level of
interest rates, and other factors.

The net asset value of Telecommunications Fund shares will be susceptible to
factors affecting the telecommunications industry. This industry may be subject
to greater governmental regulation than many other industries, and changes in
governmental policies and the need for regulatory approvals may have a material
effect on the products and services of the industry. Telephone operating
companies in the United States, for example, are subject to both federal and
state regulations affecting permitted rates of return and the kinds of services
that may be offered. In addition, government regulation in certain foreign
countries may include interest rate controls, credit controls and price
controls. In some cases foreign governments have taken steps to nationalize the
operations of certain financial services companies, including banks. Certain
types of companies in which the Telecommunications Fund might invest are engaged
in fierce competition for a share of the market for their products. In recent
years, these have been companies providing goods and services such as private
and local area networks and telephone set equipment. Moreover, the investment
flexibility of the Telecommunications Fund may be restricted by the necessity of
satisfying certain diversification requirements in order to maintain the
qualification of the Fund as a regulated investment company within the meaning
of the Internal Revenue Code of 1986, as amended (the "Code").

While the holdings of the Telecommunications Fund, the Infrastructure Fund and
the Natural Resources Fund normally will include securities of established
suppliers of traditional products and services, each of these Funds may invest
in smaller companies which can benefit from the development of new products and
services. These smaller companies may present greater opportunities for capital
appreciation, but may involve greater risks than large, established issuers.
Such smaller companies may have limited product lines, markets or financial
resources, and their securities may trade less frequently and in more limited
volume than the securities of larger, more established companies. As a result,
the prices of the securities of such smaller companies may fluctuate to a
greater degree than the prices of the securities of other issuers.

SPECIAL RISKS OF EMERGING MARKETS. The Latin America Fund and the Emerging
Markets Fund concentrate their investments in emerging markets. Most of the
other Funds also may invest a portion of their assets in emerging markets.
Investing in emerging markets involves risks relating to potential political and
economic instability within such markets and the risks of expropriation,
nationalization, confiscation of assets and property or the imposition of
restrictions on foreign investment and on repatriation of capital invested. In
the event of such expropriation, nationalization or other

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

confiscation in any emerging market, the Funds could lose their entire
investment in that market.

The net asset value of the Funds that invest in emerging markets will fluctuate,
reflecting fluctuations in the market value of their portfolio positions and
their net currency exposure. There is no assurance that these Funds will achieve
their investment objectives.

G.T. Capital believes that the issuers of securities in emerging markets often
have sales and earnings growth rates which exceed those in developed countries
and that such growth rates may in turn be reflected in more rapid share price
appreciation. Accordingly, G.T. Capital believes that investing in equity
securities in emerging markets may enable Funds investing in such markets to
achieve results superior to those produced by mutual funds with similar
objectives that invest solely in equity securities of issuers domiciled in the
U.S. and/or in other developed markets.

Nonetheless, investing in the Funds that invest in emerging markets entails a
substantial degree of risk. Because of the special risks associated with
investing in emerging markets, an investment in such Funds should be considered
speculative. Investors are strongly advised to consider carefully the special
risks involved in emerging markets, which are in addition to the usual risks of
investing in developed markets around the world.

Economies in individual emerging markets may differ favorably or unfavorably
from the U.S. economy in the following respects: growth of gross national
product, rates of inflation, currency depreciation, capital reinvestment,
resource self-sufficiency and balance of payments positions. Many emerging
markets have experienced substantial, and in some periods extremely high, rates
of inflation for many years. Inflation and rapid fluctuations in inflation rates
have had and may continue to have very negative effects on the economies and
securities markets of certain countries with emerging markets.

Economies in emerging markets generally are dependent heavily upon international
trade and, accordingly, have been and may continue to be affected adversely by
trade barriers, exchange controls, managed adjustments in relative currency
values and other protectionist measures imposed or negotiated by the countries
with which they trade. These economies also have been and may continue to be
affected adversely by economic conditions in the countries in which they trade.

The securities markets of emerging countries are substantially smaller, less
developed, less liquid and more volatile than the securities markets of the
United States and other developed countries. Disclosure and regulatory standards
in many respects are less stringent than in more developed markets. There also
may be a lower level of monitoring and regulation of emerging markets and the
activities of investors in such markets, and enforcement of existing regulations
has been extremely limited.

In addition, brokerage commissions, custodial services and other costs relating
to investment in foreign markets, particularly emerging markets, generally are
more expensive than in the United States. Such markets have different settlement
and clearance procedures. In certain markets there have been times when
settlements have been unable to keep pace with the volume of securities
transactions, making it difficult to conduct such transactions.

The inability of a Fund to make intended securities purchases due to settlement
problems could cause the Fund to miss attractive investment opportunities.
Inability to dispose of a portfolio security caused by settlement problems could
result either in losses to the Fund due to subsequent declines in value of the
portfolio security or, if the Fund has entered into a contract to sell the
security, in possible liability to the purchaser.

The risk also exists that an emergency situation may arise in one or more
emerging markets as a result of which trading of securities may cease or may be
substantially curtailed and prices for a Fund's investments in such markets may
not be readily available. Section 22(e) of the 1940 Act permits a registered
investment company to suspend redemption of its shares for any period, during
which an emergency exists, as determined by the SEC. Accordingly, if a Fund
believes that circumstances dictate, it will promptly apply to the SEC for a
determination that such an emergency exists within the meaning of Section 22(e)
of the 1940 Act. During the period commencing from a Fund's identification of
such conditions until the date of SEC action, the Fund's investments in the
affected markets will be valued at fair value determined in good faith by or
under the direction of the relevant Company's Board of Trustees.

LOWER QUALITY DEBT SECURITIES. There are no credit quality limitations placed
on the debt securities in which the Latin America Fund may

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

invest. In addition, the Infrastructure Fund, the Natural Resources Fund and the
Emerging Markets Fund may each invest up to 20% of its total assets, the
Telecommunications Fund may invest up to 5% of its assets, and the Strategic
Income Fund may invest up to 50% of its assets, in debt securities rated below
investment grade. Such investments involve a high degree of risk. However, the
Infrastructure Fund and the Natural Resources Fund will not invest in securities
in default as to principal and interest.

Investment grade debt securities include those rated at least BBB by S&P or at
least Baa by Moody's, as well as unrated securities determined by G.T. Capital
to be of comparable quality. Moody's considers securities rated Baa to have
speculative characteristics. Debt securities rated below investment grade, i.e.,
rated BB, B, CCC, CC and C by S&P or Ba, B, Caa, Ca or C by Moody's are regarded
by S&P and Moody's, on balance, as predominantly speculative with respect to
capacity to pay interest and repay principal in accordance with the terms of the
obligation. BB indicates the lowest degree of speculation and C the highest
degree of speculation. While such debt will likely have some quality and
protective characteristics, these are outweighed by large uncertainties or major
risk exposures to adverse conditions. Similarly, debt securities rated Ba and
below by Moody's are regarded by Moody's as speculative. Debt rated C by Moody's
or S&P is the lowest rated debt that is not in default as to principal or
interest, and such issues so rated can be regarded as having extremely poor
prospects of ever attaining any real investment standing. Such securities are
also generally considered to be subject to greater risk than securities with
higher ratings with regard to a deterioration of general economic conditions.
These debt securities are the equivalent of high yield, high risk bonds,
commonly known as "junk bonds."

Ratings of debt securities represent the rating agency's opinion regarding their
quality and are not a guarantee of quality. Credit ratings attempt to evaluate
the safety of principal and interest payments and do not evaluate the risks of
fluctuations in market value. Also, rating agencies may fail to make timely
changes in credit ratings in response to subsequent events, so that an issuer's
current financial condition may be better or worse than the rating indicates.

The market values of lower rated debt securities tend to reflect individual
developments of the issuer to a greater extent than do higher rated securities,
which react primarily to fluctuations in the general level of interest rates,
tend to be more sensitive to economic conditions and generally have more
volatile prices than higher rated securities. Issuers of lower rated debt
securities are often highly leveraged and may not have available to them more
traditional methods of financing. For example, during an economic downturn or a
sustained period of rising interest rates, highly leveraged issuers of lower
rated debt securities may experience financial stress. During such periods, such
issuers may not have sufficient revenues to meet their interest payment
obligations. The issuer's ability to service its debt obligations may also be
adversely affected by specific developments affecting the issuer, such as the
issuer's inability to meet specific projected business forecasts or the
unavailability of additional financing.

Similarly, certain emerging market governments that issue lower quality debt
securities are among the largest debtors to commercial banks, foreign
governments and supranational organizations such as the World Bank, and may not
be able or willing to make principal and/or interest repayments as they come
due. The risk of loss due to default by the issuer is significantly greater for
the holders of lower rated debt securities because such securities are generally
unsecured and are often subordinated to other creditors of the issuer.

Lower rated debt securities frequently have call or buy-back features which
would permit an issuer to call or repurchase the security from a Fund. If an
issuer exercises these provisions in a declining interest rate market, a Fund
may have to replace the security with a lower yielding security, resulting in a
decreased return for investors. In addition, a Fund may have difficulty
disposing of such lower rated securities because there may be no established
retail secondary market for many of these securities. The lack of a liquid
secondary market may have an adverse impact on market price and may make it more
difficult for a Fund to obtain accurate market quotations for purposes of
valuing the securities held by such Fund. Adverse publicity and investor
perceptions, whether or not based on fundamental analysis, may also decrease the
values and liquidity of lower rated securities, especially in a thinly traded
market. The Infrastructure Fund, the Natural Resources Fund, the
Telecommunications Fund and the

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

Strategic Income Fund may also acquire lower rated securities during an initial
underwriting or which are sold without registration under applicable securities
laws. Such securities involve special considerations and risks.

Factors having an adverse effect on the market value of lower rated securities
or their equivalents, to the extent a Fund has invested in such securities, will
adversely impact the Fund's net asset value. In addition to the factors noted
above, such factors may include: (i) potential adverse publicity; (ii)
heightened sensitivity to general economic conditions; and (iii) likely adverse
impact of a major economic recession. The Funds may also incur additional
expenses to the extent they are required to seek recovery upon a default in the
payment of principal or interest on its holdings, and the Funds may have limited
legal recourse in the event of a default. Debt securities issued by governments
in emerging markets can differ from debt obligations issued by private entities
in that remedies from defaults generally must be pursued in the courts of the
defaulting government, and legal recourse is therefore somewhat diminished.
Political conditions, in terms of a government's willingness to meet the terms
of its debt obligations, also are of considerable significance. There can be no
assurance that the holders of commercial bank debt may not contest payments to
the holders of debt securities issued by governments in emerging markets in the
event of default by the governments under commercial bank loan agreements.

As of December 31, 1994, the Strategic Income Fund had 74.4% of its total net
assets in debt securities that received a rating from Moody's and 20.2% of its
total net assets in debt securities that were not so rated. In addition, the
Strategic Income Fund had 5.4% of its total net assets in cash and cash items.
The Strategic Income Fund had the following percentages of its total net assets
invested in rated securities: Aaa (including cash and cash items)--41.3%,
Aa--6.9%, A--6.5%, Baa--0.8%, Ba--10.8%, B--13.5%, Caa--0%, Ca--0%, C--0%. It
should be noted that this information reflects the composition of the Fund's
assets as of December 31, 1994 and is not necessarily representative of its
assets at any time after that date.

G.T. Capital attempts to minimize the speculative risks associated with
investments in lower quality securities through credit analysis and by carefully
monitoring current trends in interest rates, political developments and other
factors. Nonetheless, investors should carefully review the investment
objective(s) and policies of each Fund and consider their ability to assume the
investment risks involved before making an investment. See "Description of Debt
Ratings" in the Statement of Additional Information.

SOVEREIGN DEBT. The Latin America Fund, the Emerging Markets Fund, and the
Strategic Income Fund may invest in Sovereign Debt. Investments in Sovereign
Debt involve special risks. The issuer of the debt or the governmental
authorities that control the repayment of the debt may be unable or unwilling to
repay principal or interest when due in accordance with the terms of such debt,
and a Fund may have limited legal recourse in the event of a default. Periods of
economic uncertainty may result in the volatility of market prices of Sovereign
Debt and, in turn, a Fund's net asset value, to a greater extent than the
volatility inherent in domestic fixed income securities.

Sovereign Debt differs from debt obligations issued by private entities in that,
generally, remedies for defaults must be pursued in the courts of the defaulting
party. Legal recourse is therefore somewhat limited. Political conditions,
especially a sovereign entity's willingness to meet the terms of its debt
obligations, are of considerable significance. Also, there can be no assurance
that the holders of commercial bank loans to the same sovereign entity may not
contest payments to the holders of Sovereign Debt in the event of default under
commercial bank loan agreements.

A sovereign debtor's willingness or ability to repay principal and pay interest
in a timely manner may be affected by, among other factors, its cash flow
situation, the extent of its foreign reserves, the availability of sufficient
foreign exchange on the date a payment is due, the relative size of the debt
service burden to the sovereign debtor's economy as a whole, the sovereign
debtor's policy toward principal international lenders and the political
constraints to which the sovereign debtor may be subject. Sovereign debtors may
default on their Sovereign Debt. Sovereign debtors also may be dependent on
expected disbursements from foreign governments, multilateral agencies and
others abroad to reduce principal and interest arrearages on their debt. The
commitment on the part of these governments, agencies and

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

others to make such disbursements may be conditioned on a sovereign debtor's
implementation of economic reforms and/or economic performance and the timely
service of such debtor's obligations. Failure to implement such reforms, achieve
such levels of economic performance or repay principal or interest when due, may
result in the cancellation of such third parties' commitments to lend funds to
the sovereign debtor, which may further impair such debtor's ability or
willingness to timely service its debts.

The occurrence of political, social or diplomatic changes in one or more of the
countries issuing Sovereign Debt could adversely affect a Fund's investments.
The countries issuing such instruments are faced with social and political
issues, and some of them have experienced high rates of inflation in recent
years and have extensive internal debt. Among other effects, high inflation and
internal debt service requirements may adversely affect the cost and
availability of future domestic sovereign borrowing to finance governmental
programs, and may have other adverse social, political and economic
consequences. Political changes or a deterioration of a country's domestic
economy or balance of trade may affect the willingness of countries to service
their Sovereign Debt. Although G.T. Capital intends to manage the respective
Funds' investments in a manner that will minimize the exposure to such risks,
there can be no assurance that adverse political changes will not cause a Fund
to suffer a loss of interest or principal on any of its holdings.

In recent years, some of the emerging market countries in which the Funds may
invest have encountered difficulties in servicing their Sovereign Debt. Some of
these countries have withheld payments of interest on and/or principal of
Sovereign Debt. These difficulties have also led to agreements to restructure
external debt obligations -- in particular, commercial bank loans -- typically
by rescheduling principal payments, reducing interest rates and extending new
credits to finance interest payments on existing debt. In the future, holders of
Sovereign Debt may be requested to participate in similar rescheduling of such
debt. Certain emerging market countries are among the largest debtors to
commercial banks and foreign governments. Currently, Brazil, Mexico and
Argentina are the largest debtors among developing countries. At times certain
emerging market countries have declared moratoria on the payment of principal
and interest on external debt; such a moratorium is currently in effect in
certain emerging market countries. There is no bankruptcy proceeding by which a
creditor may collect in whole or in part Sovereign Debt on which an emerging
market government has defaulted.

The ability of emerging market governments to make timely payments on their
Sovereign Debt is likely to be influenced strongly by a country's balance of
trade and its access to trade and other international credits. A country whose
exports are concentrated in a few commodities could be vulnerable to a decline
in the international prices of one or more of such commodities. Increased
protectionism on the part of a country's trading partners could also adversely
affect its exports. Such events could diminish a country's trade account
surplus, if any. To the extent that a country receives payment for its exports
in currencies other than hard currencies, its ability to make hard currency
payments could be affected.

Investors should also be aware that certain Sovereign Debt instruments in which
the Funds may invest involve great risk. Sovereign Debt issued by emerging
market issuers generally is deemed to be the equivalent in terms of quality to
securities rated below investment grade by Moody's and S&P. Such securities are
regarded as predominantly speculative with respect to the issuer's capacity to
pay interest and repay principal in accordance with the terms of the obligations
and involve major risk exposure to adverse conditions. Some of such Sovereign
Debt, which may not be paying interest currently or may be in payment default,
may be comparable to securities rated D by S&P or C by Moody's. A Fund may have
difficulty disposing of and valuing certain Sovereign Debt obligations because
there may be a limited trading market for such securities. Because there is no
liquid secondary market for many of these securities, the Funds anticipate that
such securities could be sold only to a limited number of dealers or
institutional investors.

ARMS. ARMs differ from conventional bonds in that principal is repaid over the
life of the ARM rather than at maturity. The holder of an ARM, (e.g., the U.S.
Government Income Fund) receives not only monthly scheduled payments of
principal and interest, but also may receive unscheduled principal payments
representing prepayments on the underlying mortgages. An investor, therefore,
may have to reinvest the

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

periodic payments and any unscheduled prepayments of principal it receives, at a
rate of interest which is lower than the rate on the ARMs held by it. For this
reason, ARMs may be less effective than other types of U.S. government
securities as a means of "locking in" long-term interest rates.

The market value of ARMs, like other U.S. government securities, will generally
vary inversely with changes in market interest rates, declining when interest
rates rise and rising when interest rates decline. ARMs have less risk of price
decline during periods of rapidly rising rates than other investments of
comparable maturities. However, they will also have less potential for capital
appreciation due to the likelihood of increased prepayments of mortgages as
interest rates decline. In addition, to the extent ARMs are purchased at a
premium, mortgage foreclosures and unscheduled principal prepayments will result
in some loss of the holder's principal investment to the extent of the premium
paid. On the other hand, if ARMs are purchased at a discount, both a scheduled
payment of principal and an unscheduled prepayment of principal will increase
current and total returns and will accelerate the recognition of income which,
when distributed to shareholders, will be taxable as ordinary income.

RISKS OF THE MONEY MARKET FUND. In periods of declining interest rates the
Money Market Fund's yield will tend to be somewhat higher than prevailing market
rates; conversely, in periods of rising interest rates, the Money Market Fund's
yield will tend to be somewhat lower than those rates. Also, when interest rates
are falling, the net new money flowing into the Money Market Fund from the sale
of its shares and reinvestment of dividends likely will be invested by the Fund
in instruments producing lower yields than the balance of the securities held by
the Fund, thereby reducing the Fund's yield. The opposite generally will be true
in periods of rising interest rates. The Money Market Fund is designed to
provide maximum current income consistent with the liquidity and safety afforded
by investment in high quality money market instruments; the Money Market Fund's
yield may be lower than that produced by funds investing directly in lower
quality and/or longer-term securities.

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CURRENCY, OPTIONS AND
FUTURES STRATEGIES
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Each Fund (except the Money Market Fund) may employ certain risk management
practices involving the use of forward currency contracts, options contracts and
futures contracts to attempt to hedge its portfolio, i.e., reduce the overall
level of investment risk normally associated with the Fund. These instruments
are often referred to as "derivatives," which may be defined as financial
instruments whose performance is derived, at least in part, from the performance
of another asset (such as a security, currency, or an index of securities). The
Funds may enter into such investments up to the full value of their portfolio
assets. There can be no assurance that such risk management practices will
succeed. These hedging techniques are described below and are further detailed
in the Statement of Additional Information.

To attempt to increase return, the Growth & Income Fund, the Strategic Income
Fund, the Global Government Income Fund and the U.S. Government Income Fund may
write covered call options on securities they hold. This strategy will be
employed only when, in the opinion of G.T. Capital, the size of the premium the
Fund receives for writing the option is adequate to compensate the Fund against
the risk that appreciation in the underlying security may not be fully realized
if the option is exercised. Each of these Funds is also authorized to write
covered put options to attempt to enhance return.

To attempt to hedge against adverse movements in exchange rates between
currencies, each Fund (except the Money Market Fund) may enter into forward
currency contracts for the purchase or sale of a specified currency at a
specified future date. Such contracts may involve the purchase or sale of a
foreign currency against the U.S. dollar or may involve two foreign currencies.
Each such Fund may enter into forward currency contracts either with respect to
specific transactions or with respect to specific securities held by the Fund.
For example, when a Fund anticipates making a purchase or sale of a security, it
may enter into a

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

forward currency contract in order to set the rate (either relative to the U.S.
dollar or another currency) at which a currency exchange transaction related to
the purchase or sale will be made. Further, when G.T. Capital believes that a
particular currency may decline compared to the U.S. dollar or another currency,
each such Fund may enter into a forward contract to sell the currency G.T.
Capital expects to decline in an amount approximating the value of some or all
of the Fund's securities denominated in a foreign currency. Each such Fund also
may write covered call options and purchase put and call options on currencies
to hedge against movements in exchange rates.

In addition, each Fund (except the Money Market Fund) may write covered call
options and purchase put and call options on equity and debt securities to hedge
against the risk of fluctuations in the prices of securities held by the Fund or
which G.T. Capital intends to purchase for the Fund. Each such Fund, except for
the Strategic Income Fund, the Global Government Income Fund and the U.S.
Government Income Fund, also may write covered call options and buy put and call
options on stock indices. Such stock index options serve to hedge against
overall fluctuations in the securities markets generally, rather than
anticipated increases or decreases in the value of a particular security.

Further, each such Fund, except for the Strategic Income Fund, the Global
Government Income Fund and the U.S. Government Income Fund, may sell stock index
futures contracts and may purchase put options or write covered call options on
such futures contracts to protect against a general stock market decline that
could adversely affect the value of securities held by the Fund. Such Funds also
may buy stock index futures contracts and purchase call options on such
contracts to hedge against a general stock market or market sector advance and
thereby attempt to lessen the cost of future securities acquisitions. Such
Funds, (including the Strategic Income Fund, the Global Government Income Fund
and the U.S. Government Income Fund), may use interest rate futures contracts
and options thereon to hedge debt securities held by it against changes in the
general level of interest rates. Each Fund may write only "covered" call
options. Each Fund will also "cover" stock index options and options on futures
contracts that it writes.

SWAPS, CAPS, FLOORS AND COLLARS. The Strategic Income Fund may enter into
interest rate, currency and index swaps, and purchase or sell related caps,
floors and collars and other derivative instruments. The Strategic Income Fund
expects to enter into these transactions primarily to preserve a return or
spread on a particular investment or portion of its portfolio, to protect
against currency fluctuations as a duration management technique or to protect
against any increase in the price of securities the Fund anticipates purchasing
at a later date. The Strategic Income Fund intends to use these transactions as
hedges and not as speculative investments and will not sell interest rate caps
or floors if it does not own securities or other instruments providing the
income the Strategic Income Fund may be obligated to pay. Interest rate swaps
involve the exchange by the Strategic Income Fund with another party of their
respective commitments to pay or receive interest (for example, an exchange of
floating rate payments for fixed rate payments) with respect to a notional
amount of principal.

A currency swap is an agreement to exchange cash flows on a notional amount
based on changes in the values of the reference indices. The purchase of an
interest rate cap entitles the purchaser to receive payments on a notional
principal amount from the party selling the cap to the extent that a specified
index exceeds a predetermined interest rate. The purchase of an interest rate
floor entitles the purchaser to receive payments of interest on a notional
principal amount from the party selling the interest rate floor to the extent
that a specified index falls below a predetermined interest rate or amount. A
collar is a combination of a cap and a floor that preserves a certain return
with a predetermined range of interest rates or values.

The Strategic Income Fund enters into interest rate protection transactions only
with banks and recognized securities dealers believed by G.T. Capital to present
minimal credit risks in accordance with guidelines established by the Company's
Board of Trustees. If there is a default by the other party to such a
transaction, the Strategic Income Fund will have to rely on its contractual
remedies (which may be limited by bankruptcy, insolvency or similar laws)
pursuant to the agreements related to the transaction. The swap market has grown
substantially in recent years, with a large number of banks and investment
banking firms acting both as principals and as agents utilizing standardized
swap documentation. Caps, collars and floors are more recent

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

innovations for which documentation is less standardized, and, accordingly, are
less liquid than swaps.

INDEXED COMMERCIAL PAPER. The Strategic Income Fund also may invest without
limitation in commercial paper which is indexed to certain specific foreign
currency exchange rates. The terms of such commercial paper provide that its
principal amount is adjusted upwards or downwards (but not below zero) at
maturity to reflect changes in the exchange rate between two currencies while
the obligation is outstanding. The Fund will purchase such commercial paper with
the currency in which it is denominated and, at maturity, will receive interest
and principal payments thereon in that currency, but the amount of principal
payable by the issuer at maturity will change in proportion to the change (if
any) in the exchange rate between the two specified currencies between the date
the instrument is issued and the date the instrument matures. While such
commercial paper entails the risk of loss of principal, the potential for
realizing gains as a result of changes in foreign currency exchange rates
enables the Strategic Income Fund to hedge (or cross-hedge) against a decline in
the U.S. dollar value of investments denominated in foreign currencies while
providing an attractive money market rate of return. The Strategic Income Fund
will purchase such commercial paper for hedging purposes only, not for
speculation. The staff of the SEC is currently considering whether the purchase
of this type of commercial paper by mutual funds such as the Strategic Income
Fund would result in the issuance of a "senior security" within the meaning of
the 1940 Act. The Strategic Income Fund believes that such investments do not
involve the creation of such a senior security but, nevertheless, has
undertaken, pending the resolution of this issue by the SEC staff, to establish
a segregated account with respect to its investments in this type of commercial
paper and to maintain in such account cash not available for investment or U.S.
government securities or liquid, high grade debt securities having a value equal
to the aggregate, outstanding principal amount of the commercial paper of this
type that is held by the Strategic Income Fund.

Although the Funds might not employ any of the foregoing strategies, the use of
forward currency contracts, options and futures would involve certain investment
risks and transaction costs to which they might not otherwise be subject. These
risks include: dependence on G.T. Capital's ability to predict movements in the
prices of individual securities, fluctuations in the general securities markets
and movements in interest rates and currency markets; imperfect correlation
between movements in the prices of currencies, options, futures contracts or
options thereon and movements in the price of the currency or security hedged or
used for cover; the fact that skills and techniques needed to trade options,
futures contracts and options thereon or to use forward currency contracts are
different from those needed to select the securities in which the Funds invest;
lack of assurance that a liquid secondary market will exist for any particular
option, futures contract or option thereon at any particular time, which may
cause a Fund to purchase or sell a portfolio security at a disadvantageous time,
which, in turn, may cause an increase in that Fund's rate of portfolio turnover;
and the possible need to defer closing out of certain options, futures contracts
and options thereon in order for a Fund to qualify or continue to qualify for
the beneficial tax treatment afforded regulated investment companies under the
Code. See "Taxes" in the Statement of Additional Information.

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HOW TO INVEST
- --------------------------------------------------------------------------------

Shares of the Funds currently are offered to separate accounts established by
the Participating Insurance Companies for funding variable annuity contracts
("Separate Accounts") pursuant to the insurance laws of their respective
jurisdictions.

The owners of such contracts may allocate premium payments among the general
accounts of the Participating Insurance Companies and the divisions of the
Separate Accounts which correspond to the Funds. Individuals may not pay
variable annuity premiums directly to the Funds. These Separate Accounts are
registered with the SEC as unit investment trusts, each having a prospectus of
its own.

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

Shares of the Funds are offered and redeemed at their respective net asset
values without the addition of any sales load or redemption charge next
determined following receipt by a Separate Account of premium payments,
surrender requests under policies, loan payments, transfer requests, and similar
or related transactions. The Funds do not issue share certificates. See
"Calculation of Net Asset Value."

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CALCULATION OF NET ASSET VALUE
- --------------------------------------------------------------------------------

Each Fund calculates its net asset value as of the close of normal trading on
the New York Stock Exchange ("NYSE") (currently 4:00 p.m. Eastern Time, unless
weather, equipment failure or other factors contribute to an earlier closing
time) each Business Day. Net asset value per share is computed by determining
the value of each Fund's assets (the securities it holds plus any cash or other
assets, including interest and dividends accrued but not yet received),
subtracting all the Fund's liabilities (including accrued expenses), and
dividing the result by the total number of shares outstanding at such time.

Equity securities are valued at the last sale price on the exchange or in the
principal OTC market in which such securities are traded, as of the close of
business on the day the securities are being valued, or, lacking any sales, at
the last available bid price. Fixed income securities and debt securities
generally are valued at the mean of representative quoted bid or asked prices.
Short-term debt investments are amortized to maturity based on their cost,
adjusted for foreign exchange translation.

Securities for which market quotations are not readily available are valued at
fair value as determined in good faith by or under direction of the respective
Company's Board of Trustees. Securities quoted in foreign currencies will be
valued in U.S. dollars based on the prevailing exchange rates on that day. Each
Fund's portfolio securities, from time to time, may be listed primarily on
foreign exchanges or OTC dealer markets which may trade on days when the NYSE is
closed (such as Saturday). As a result, the net asset value of a Fund may be
affected significantly by such trading on days when shareholders have no access
to that Fund.

The Money Market Fund uses the amortized cost method of valuing its investments,
pursuant to which the market value of an instrument is approximated by
amortizing the difference between the acquisition cost and value at maturity of
the instrument on a straight-line basis over its remaining life. All cash,
receivables and current payables are carried at their face value.

The Money Market Fund intends to use its best efforts to maintain its net asset
value at $1.00 per share. There can be no assurance that the Money Market Fund
will be able to maintain a stable $1.00 per share price. The value of each share
of the Money Market Fund is computed by dividing the Fund's net assets by the
number of its outstanding shares. "Net assets" equal the value of the Money
Market Fund's investments and other assets, less its liabilities.

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DIVIDENDS, OTHER DISTRIBUTIONS
AND FEDERAL INCOME TAXATION
- --------------------------------------------------------------------------------

The Money Market Fund declares dividends from net investment income on each day
the Fund determines its net asset value, payable to shareholders of record as of
the close of regular trading on the NYSE on the preceding business day.
Dividends are usually paid on the last calendar day of each month. The Fund's
net investment income consists of accrued interest and earned discount
(including both original issue and market discounts), less amortization of
market premium and applicable expenses, and is calculated immediately prior to
the determination of net asset value per share. The Fund generally distributes
to its shareholders any net short-term capital gain annually after the end of
its fiscal year on December 31 but may make earlier distributions of that gain
if necessary to maintain its net asset value per share at $1.00 or to avoid

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

income or excise taxes. The Fund does not expect to realize long-term capital
gain.

The Strategic Income Fund, the Global Government Income Fund and the U.S.
Government Income Fund declare and pay dividends from net investment income, if
any, monthly.

The Growth & Income Fund declares and pays dividends from net investment income,
if any, and net short-term capital gains, if any, quarterly.

Each other Fund declares and pays dividends from net investment income, if any,
annually, and all Funds also annually distribute to their shareholders all of
their net short-term capital gain (the excess of net long-term capital gain over
net short-term capital loss), if any, and any net gains from foreign currency
transactions. Dividends and other distributions from a Fund are paid in
additional shares of that Fund at net asset value per share, unless the transfer
agent is instructed otherwise. See the applicable VA Contract prospectus for
information regarding the federal income tax treatment of distributions to the
Separate Accounts.

Each Fund intends to qualify for treatment as a regulated investment company
("RIC") under Subchapter M of the Code. In each taxable year that a Fund so
qualifies, the Fund (but not its shareholders) will be relieved of federal
income tax on that part of its investment company taxable income (consisting
generally of net investment income, net gains from certain foreign currency
transactions and net short-term capital gain), and net capital gain that is
distributed to Fund shareholders. Each Fund will distribute to its shareholders
at least 90% of its investment company taxable income.

Fund shares are offered only to Separate Accounts established to fund variable
annuity contracts. Under the Code, no tax is imposed on an insurance company
with respect to income of a qualifying separate account properly allocable to
the value of eligible variable annuity or variable life insurance contracts. See
the applicable VA Contract prospectus for a discussion of the federal income tax
status of (1) the Separate Accounts that purchase and hold shares of the Funds
and (2) the holders of VA Contracts funded through those accounts.

Each Fund intends to comply with the diversification requirements imposed by
section 817(h) of the Code and the regulations thereunder. These requirements,
which are in addition to the diversification requirements imposed on the Funds
by the 1940 Act and Subchapter M of the Code, place certain limitations on the
amount of assets of each Separate Account -- and, because section 817(h) and
those regulations treat each Fund's assets as assets of the related Separate
Accounts -- that can be invested in securities of a single issuer.

Specifically, the regulations provide in part that, except as permitted by the
"safe harbor" described below, as of the end of each calender quarter or within
30 days thereafter, no more than 55% of the total assets of a Fund may be
invested in the securities of any one issuer. For this purpose, all securities
of the same issuer are consolidated, and, while each U.S. government agency and
instrumentality is considered a separate issuer, a particular foreign government
and its agencies, instrumentalities and political subdivisions are all
considered to be the same issuer. Section 817(h) provides, as a safe harbor,
that adequate diversification will exist for a separate account if the
diversification requirements under Subchapter M are satisfied and no more than
55% of the value of the separate account's total assets are cash and cash items,
government securities and securities of other RICs. Failure of a Fund to satisfy
the section 817(h) requirements would result in treatment of the VA Contract
holders other than as described in the applicable VA Contract prospectus.

The foregoing is only a summary of some of the important federal income tax
considerations generally affecting the Funds and the Separate Accounts. See the
Statement of Additional Information for a more detailed discussion.

- --------------------------------------------------------------------------------
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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

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

MANAGEMENT
- --------------------------------------------------------------------------------

Each Company's Board of Trustees has overall responsibility for the operation of
the Funds organized as series of that Company. Pursuant to such responsibility,
the Board of each Company has approved contracts with various financial
organizations to provide, among other things, day to day management services
required by its Funds.

INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES FOR THE FUNDS. Services
provided by G.T. Capital as each Fund's investment manager and administrator
include, but are not limited to, determining the composition of each securities
portfolio and placing orders to buy, sell or hold particular securities;
furnishing corporate officers and clerical staff; providing office space,
services and equipment; and supervising all matters relating to each Fund's
operation. For these services, the Money Market Fund pays G.T. Capital an
investment management and administration fee at the annualized rate of 0.50% of
that Fund's average daily net assets. The America Fund, the Strategic Income
Fund, the Global Government Income Fund and the U.S. Government Income Fund each
pays G.T. Capital an investment management and administration fee at the
annualized rate of 0.75% of the Fund's average daily net assets. Each other Fund
pays G.T. Capital an investment management and administration fee at the
annualized rate of 1.00% of its average daily net assets. All fees are computed
daily and paid monthly. These rates are higher than those paid by most mutual
funds.

In addition, G.T. provides services as each Fund's pricing and fund accounting
agent. For those services, each Fund pays G.T. Capital a pro-rated fee
(calculated based on each Fund's average daily net assets) at the
annualized rate of .03% of the first $5 billion of G.T. U.S. mutual fund assets
and .02% in excess of $5 billion thereafter.

G.T. Capital, organized in 1973, provides investment management and/or
administration services to all the other G.T. Global Mutual Funds as well as to
other institutional, corporate and individual clients. The offices of G.T.
Capital are located at 50 California Street, San Francisco, California 94111.

G.T. Capital is the U.S. member of the G.T. Group, an international investment
advisory organization established in 1969 for the purpose of rendering
international portfolio management services to both institutional and individual
clients. Since the G.T. Group was established, it has gained a reputation as a
leader in identifying and investing in emerging and established markets around
the world. As of August 31, 1995, aggregate assets under G.T. Group management
exceeded $22 billion, of which more than $19 billion was invested in the
securities of non-U.S. issuers.

In addition to the San Francisco office, the G.T. Group maintains fully staffed
investment offices in London, Hong Kong, Tokyo, Toronto, Singapore and Sydney.
Many of G.T. Capital's investment managers are natives of the countries in which
they invest, and have the advantage of being close to the financial markets they
follow. G.T. Capital's experienced management team is situated to react quickly
to changes in foreign markets which are in time zones different from those in
the United States.

G.T. Capital and the other companies in the G.T. Group are subsidiaries of BIL
GT Group Limited ("BIL GT Group"), a financial services holding company. BIL GT
Group in turn is controlled by the Prince of Liechtenstein Foundation, which
serves as the parent organization for the various business enterprises of the
Princely Family of Liechtenstein. Its principal business address is Herrengasse
12, FL-9490, Vaduz, Liechtenstein.

In managing the Funds, G.T. Capital employs a team approach, taking advantage of
the resources of its various investment offices around the world in seeking to
achieve the Funds' objectives. In addition, in managing the Funds these
individuals utilize the research and related work of other members of G.T.
Capital's investment staff.

The investment professionals primarily responsible for the portfolio management
of each Fund are as follows:

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

NEW PACIFIC FUND
--------------------

<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE FUND LAST FIVE YEARS
------------ ------------------ -------------------
<S> <C> <C>
Lawrence Yip Portfolio Manager since Portfolio Manager for G.T. Capital
Hong Kong 1995 since 1993. Prior thereto, Mr.
Yip was a Portfolio Manager for
G.T. Management (Asia) Ltd.
</TABLE>

EUROPE FUND
---------------

<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE FUND LAST FIVE YEARS
------------ ------------------ -------------------
<S> <C> <C>
Anna Powell Portfolio Manager since Portfolio Manager for G.T.
London 1995 Management PLC (London) and G.T.
Capital since March 1995. From
1989 to 1995, Ms. Powell was a
Portfolio Manager for Robert
Fleming & Co., Ltd. (London).
Prior thereto, Ms. Powell was an
Equity Analyst for Charterhouse
Bank Ltd. (London).
</TABLE>

LATIN AMERICA FUND
------------------------

<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE FUND LAST FIVE YEARS
------------ ------------------ -------------------
<S> <C> <C>
Andrew Boczek Portfolio Manager since Assistant Portfolio Manager and
San Francisco 1995 Investment Analyst for G.T.
Capital since 1993. From 1991 to
1993, Mr. Boczek was an Analyst
at Continental Bank Corporation.
Prior thereto, he was a Research
Assistant at the International
Monetary Fund (Washington,
D.C.).
</TABLE>

EMERGING MARKETS FUND

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

<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE FUND LAST FIVE YEARS
------------ ------------------ -------------------
<S> <C> <C>
James M. Bogin Portfolio Manager since Portfolio Manager for G.T. Capital
San Francisco Fund inception in 1994 since 1993. From 1989 to 1993,
Mr. Bogin was a Fund Manager at
Nomura Investment Management Co.
(Tokyo).
</TABLE>

AMERICA FUND

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

<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE FUND LAST FIVE YEARS
------------ ------------------ -------------------
<S> <C> <C>
Kevin L. Wenck Portfolio Manager since Portfolio Manager for G.T. Capital
San Francisco Fund inception in 1993 since 1991. Prior thereto, Mr.
Wenck was a Portfolio Manager of
Matuschka & Co. (Greenwick, CT).
</TABLE>

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

INFRASTRUCTURE FUND

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

<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE FUND LAST FIVE YEARS
------------ ------------------ -------------------
<S> <C> <C>
David L. Sherry Portfolio Manager since Portfolio Manager and Investment
San Francisco Fund inception in 1995 Analyst for G.T. Capital since
1993. From 1992 to 1993, Mr.
Sherry was Senior Securities
Analyst for Franklin Resources,
Inc. (San Mateo, CA). From 1990
to 1992, he was a student at
University of California at Los
Angeles Graduate School of
Business (where he received a
Masters of Business
Administration). Prior thereto,
he was an Assistant Treasurer
with Brown Brothers Harriman
(NY).

Michael J. Mahoney Portfolio Manager since Portfolio Manager for G.T. Capital
San Francisco Fund inception in 1995 since 1993. From 1991 to 1993,
Mr. Mahoney was an Investment
Analyst of G.T. Capital. From
1989 to 1991, he was a student
at Stanford University Graduate
School of Business (where he
received a Masters of Business
Administration). Prior thereto,
he was a Management Consultant
of Bain & Co., management
consulting (Boston).
</TABLE>

NATURAL RESOURCES FUND

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

<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE FUND LAST FIVE YEARS
------------ ------------------ -------------------
<S> <C> <C>
Charles A. Wall Portfolio Manager since Portfolio Manager for G.T.
Sydney Fund inception in 1995 Management (Australia) Ltd.
since 1992. Prior thereto, Mr.
Wall was a Portfolio Manager for
Baring Securities (Sydney).

Derek H. Webb Portfolio Manager since Portfolio Manager for G.T. Capital
San Francisco Fund inception in 1995 since 1994. Analyst for G.T.
Capital since 1992. From 1990 to
1992, Mr. Webb was a student at
the University of Pennsylvania,
Wharton School of Business.
During 1989, he was Vice
President, Citicorp Investment
Bank of Los Angeles. Prior
thereto, he was a Bond Trader
for Trust Co. of the West (Los
Angeles).
</TABLE>

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

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

TELECOMMUNICATIONS FUND

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

<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE FUND LAST FIVE YEARS
------------ ------------------ -------------------
<S> <C> <C>
Michael J. Mahoney Portfolio Manager since Portfolio Manager for G.T. Capital
San Francisco Fund inception in 1993 since 1993. From 1991 to 1993,
Mr. Mahoney was an Investment
Analyst of G.T. Capital. From
1989 to 1991, he was a student
at Stanford University Graduate
School of Business (where he
received a Masters of Business
Administration). Prior thereto,
he was a Management Consultant
of Bain & Co., management
consulting (Boston).

David L. Sherry Portfolio Manager since Portfolio Manager and Investment
San Francisco Fund inception in 1993 Analyst for G.T. Capital since
1993. From 1992 to 1993, Mr.
Sherry was Senior Securities
Analyst for Franklin Resources,
Inc. (San Mateo, CA). From 1990
to 1992, he was a student at
University of California at Los
Angeles Graduate School of
Business (where he received a
Masters of Business
Administration). Prior thereto,
he was an Assistant Treasurer
with Brown Brothers Harriman
(NY).
</TABLE>

GROWTH & INCOME FUND

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

<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE FUND LAST FIVE YEARS
------------ ------------------ -------------------
<S> <C> <C>
Paul Griffiths Portfolio Manager since Portfolio Manager for G.T.
London 1995 Management PLC (London) since
1994; from 1993 to 1994, Global
Bond Fund Manager, Lazard
Investors; from 1991 to 1993,
Global Bond Fund Manager, Sanwa
International PLC; from 1989 to
1991, Account Officer, Royal
Bank of Canada.

Nicholas S. Train Portfolio Manager Portfolio Manager for G.T.
London Management PLC (London);
Portfolio Manager for G.T.
Capital since 1991.
</TABLE>

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

STRATEGIC INCOME FUND

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

<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE FUND LAST FIVE YEARS
------------ ------------------ -------------------
<S> <C> <C>
Gary Kreps Portfolio Manager since Chief Investment Officer -- Global
San Francisco Fund inception in 1993 Fixed Income Investments for
G.T. Capital since 1992. From
1988 to 1992, Mr. Kreps was
Senior Vice President for Global
Fixed Income of Putnam
Management Co. (Boston).
Simon Nocera Portfolio Manager since Portfolio Manager and Economist of
San Francisco Fund inception in 1993 G.T. Capital since 1992. From
1991 to 1992, Mr. Nocera was a
Senior Vice President and
Director for Global Fixed Income
Research at Putnam Companies
(Boston). Prior thereto, he was
a Financial Economist for the
International Monetary Fund
(Washington, DC).
Nikos G. Pappayliou Portfolio Manager since Portfolio Manager for G.T. Capital
San Francisco 1994 since 1994; Trader, Global Fixed
Income Investments for G.T.
Capital since 1992. From 1991 to
1992, Mr. Pappayliou was
European Fixed Income
Arbitrageur for Swiss Bank
(London). Prior thereto, he was
Fixed Income Arbitrageur for
Credit Lyonnais (Paris).
</TABLE>

INTERNATIONAL FUND

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

<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE FUND LAST FIVE YEARS
------------ ------------------ -------------------
<S> <C> <C>
F. Christian Wignall Portfolio Manager since Chief Investment Officer-- Global
San Francisco Fund inception in 1994 Equities for G.T. Capital.
</TABLE>

U.S. GOVERNMENT INCOME FUND

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

- --------------------------------------------------------------------------------
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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

GLOBAL GOVERNMENT INCOME FUND

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

MONEY MARKET FUND

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

<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE FUND LAST FIVE YEARS
------------ ------------------ -------------------
<S> <C> <C>
Gary Kreps Portfolio Manager since Chief Investment Officer -- Global
San Francisco Fund inception in 1993 Fixed Income Investments for
G.T. Capital since 1992. From
1988 to 1992, Mr. Kreps was
Senior Vice President for Global
Fixed Income of Putnam
Management Co. (Boston).
Jeffrey W. Gorman Portfolio Manager since Portfolio Manager for G.T. Capital
San Francisco 1995 since May 1995; Money Market
Analyst and Trader for G.T.
Capital from April 1994 to May
1995; Investment Operations
Specialist for G.T. Capital from
February 1993 to April 1994;
Financial Services
Representative for G.T. Capital
from June 1992 to February 1993;
prior thereto, a student at the
University of California at
Berkeley.
</TABLE>

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

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

Prospectus Page 44
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- --------------------------------------------------------------------------------
------------------------------------------------
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

In placing securities orders for the Funds, G.T. Capital seeks to obtain the
best net results. G.T. Capital has no agreement or commitment to place orders
with any broker/dealer. Commissions or discounts in foreign securities exchanges
or OTC markets often are fixed and generally are higher than those in U.S.
securities exchanges or markets. Debt securities generally are traded on a "net"
basis with a dealer acting as principal for its own account without a stated
commission, although the price of the security usually includes a profit to the
dealer. U.S. and foreign government securities and money market instruments
generally are traded in the OTC markets. In underwritten offerings, securities
usually are purchased at a fixed price which includes an amount of compensation
to the underwriter. On occasion, securities may be purchased directly from an
issuer, in which case no commissions are paid and no discounts obtained.
Broker/dealers may receive commissions on futures, currency and options
transactions. Brokerage transactions for the Funds may be executed through any
of the BIL GT Group affiliates.

FUND EXPENSES. Each Fund pays all of its respective expenses not assumed by
G.T. Capital and other agents. These expenses include, in addition to the
advisory and brokerage fees discussed above, legal and audit expenses, custodian
and transfer agent fees, Trustees fees, organizational fees, fidelity bond and
other insurance premiums, taxes, extraordinary expenses and expenses of reports
and prospectuses sent to existing investors. Certain of these expenses, such as
custodial fees and brokerage fees, generally are higher for non-U.S. securities.

G.T. Capital has undertaken to limit the total operating expenses (exclusive of
brokerage commissions, interest, taxes and extraordinary items) of each of the
New Pacific Fund, the Europe Fund, the International Fund, the Emerging Markets
Fund, the Latin America Fund, the Infrastructure Fund, the Natural Resources
Fund, the Telecommunications Fund, and the Growth & Income Fund to 1.25% of
their respective net assets. In addition, G.T. Capital has undertaken to limit
the total operating expenses (exclusive of brokerage commissions, interest,
taxes and extraordinary items) of each of the America Fund, the Strategic Income
Fund, the Global Government Income Fund, and the U.S. Government Income Fund to
1.00% of their respective net assets. Likewise, G.T. Capital has undertaken to
limit the total operating expenses (exclusive of brokerage commissions,
interest, taxes and extraordinary items) of the Money Market Fund to .75% of its
net assets.

During the fiscal period ended December 31, 1994, G.T. Capital in its sole
discretion had undertaken to waive or reimburse the total operating expenses
(exclusive of brokerage commissions, interest, taxes and extraordinary items) of
each of the Emerging Markets Fund and the International Fund until the total
assets of each Fund reach $2 million; thereafter G.T. Capital had undertaken to
limit such operating expenses (exclusive of brokerage commissions, interest,
taxes and extraordinary items) to an annual rate of 1.25% of each Fund's average
daily net assets.

During the fiscal period January 31, 1995 through December 31, 1995, G.T.
Capital in its sole discretion has undertaken to waive or reimburse the total
operating expenses (exclusive of brokerage commissions, interest, taxes and
extraordinary items) of each of the Infrastructure Fund and the Natural
Resources Fund until the total assets of each Fund reach $2 million; thereafter
G.T. Capital has undertaken to limit such operating expenses (exclusive of
brokerage commissions, interest, taxes and extraordinary items) to an annual
rate of 1.25% of each Fund's average daily net assets.

From time to time, G.T. Capital in its sole discretion may waive its fees and/or
voluntarily assume certain Fund expenses. All general expenses of each Company
and joint expenses of the Funds (see "Other Information") are allocated among
the Funds on a basis deemed fair and equitable.

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

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<PAGE> 47

<PAGE> 48

- --------------------------------------------------------------------------------
------------------------------------------------
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

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

OTHER INFORMATION
- --------------------------------------------------------------------------------

DIVERSIFICATION STANDARDS. Each of the following Funds is classified as a
"diversified" investment company under the 1940 Act: the New Pacific Fund, the
Europe Fund, the America Fund, the Infrastructure Fund, the Natural Resources
Fund, the Telecommunications Fund, the U.S. Government Income Fund, the
International Fund, the Emerging Markets Fund, and the Money Market Fund. This
means that with respect to 75% of each Fund's total assets, no more than 5% will
be invested in the securities of any one issuer, and each Fund will purchase no
more than 10% of the voting securities of any one issuer.

Each of the following Funds is classified as a "non-diversified" investment
company under the 1940 Act: the Latin America Fund, the Growth & Income Fund,
the Strategic Income Fund and the Global Government Income Fund. Each such Fund,
however, intends to continue to qualify as a regulated investment company for
federal income tax purposes. This means, in general, that more than 5% of the
Fund's total assets may be invested in securities of one issuer but only if, at
the close of each quarter of the Fund's taxable year, the aggregate amount of
such holdings does not exceed 50% of the value of its total assets and no more
than 25% of the value of its total assets is invested in the securities of a
single issuer.

Because each such Fund is permitted to invest a greater proportion of its assets
in the securities of a smaller number of issuers, each such Fund may be subject
to greater investment and credit risk with respect to its portfolio than a Fund
that is more broadly diversified.

ORGANIZATION. Each of G.T. Global Variable Investment Trust and G.T. Global
Variable Investment Series is organized as a Massachusetts business trust and is
registered with the SEC as an open-end management investment company. Each
Company and each Fund of each Company, except the Telecommunications Fund, the
Emerging Markets Fund, the International Fund, the Infrastructure Fund and the
Natural Resources Fund, commenced operations on February 10, 1993. The
Telecommunications Fund commenced operations on October 18, 1993. The Emerging
Markets Fund and the International Fund commenced operations on July 5, 1994.
The Infrastructure Fund and the Natural Resources Fund commenced operations on
January 31, 1995. The fiscal year end for each Company is December 31.

From time to time, each Company's Board of Trustees may, in its discretion,
establish additional series and issue shares of additional series of the
Company's shares of beneficial interest. Shares of the Funds are entitled to one
vote per share (with proportional voting for fractional shares). Shareholders
have no preemptive or conversion rights.

On any matter submitted to a vote of shareholders, shares of each Fund will be
voted by that Fund's shareholders individually when the matter affects the
specific interest of that Fund only. The shares of all Funds of a Company will
be voted in the aggregate on other matters, such as the election of Trustees and
ratification of that Company's Board of Trustees' selection of the Company's
independent accountants. In accordance with current law, the Funds anticipate
that when a Participating Insurance Company issues a VA Contract that invests in
a Company, VA Contract holders will be asked for instructions on how to vote,
and shares will be voted by a Participating Insurance Company in accordance with
the voting instructions received. For further information on voting rights, see
the VA Contract prospectus.

The Companies normally will not hold annual meetings of shareholders, except as
required under the 1940 Act. Either Company would be required to hold a
shareholders meeting in the event that at any time less than a majority of that
Company's Trustees holding office had been elected by shareholders. Trustees
shall continue to hold office until their successors are elected and have
qualified. Fund shares do not have cumulative voting rights, which means that
the holders of a majority of the shares of all of a Company's Funds in the
aggregate voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed upon a majority vote of the shareholders qualified to
vote in the election. Shareholders holding 10% of a Company's outstanding voting
shares may call a meeting of

- --------------------------------------------------------------------------------
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- --------------------------------------------------------------------------------
------------------------------------------------
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

shareholders for the purpose of voting upon the question of removal of any
Trustee or for any other purpose. The 1940 Act requires each Company to assist
shareholders in calling such a meeting.

Pursuant to each Company's Declaration of Trust, each Company may issue an
unlimited number of shares for each of its Funds. Each share of a Fund
represents an interest in that Fund only, has no par value, represents an equal
proportionate interest in the Fund with other shares of the Fund and is entitled
to such dividends and other distributions out of the income earned and gain
realized on the assets belonging to the Fund as may be declared by the Board of
Trustees.

Effective July 5, 1994, the name of "G.T. Global: Variable Pacific Fund" was
changed to "G.T. Global: Variable New Pacific Fund" and its investment policy
was revised by the Board of Trustees to remove Japan from the Fund's Primary
Investment Area.

Currently, owners of VA Contracts issued by the Participating Insurance
Companies for which shares of one or more Funds are the investment vehicle will
receive from such Participating Insurance Company unaudited semi-annual
financial statements and audited year-end financial statements certified by the
Fund's independent public auditors. Each report will show the investments owned
by the Fund and the market values thereof as determined by the Trustees and will
provide other information about the Fund and its operations.

PERFORMANCE INFORMATION. The Funds, from
time to time, may include information on
their investment results and/or comparisons
of their investment results to various
unmanaged indices or results of other mutual
funds or groups of mutual funds whose
shares are offered to insurance company
separate accounts, in advertisements, sales
literature or reports furnished to present or
prospective shareholders.

In such materials, each Fund may quote its average annual total return
("Standardized Return"). Standardized Return shows percentage rates reflecting
the average annual change in the value of an assumed investment in the Fund at
the end of a one-year period and at the end of five-and ten-year periods. If a
one-, five-and/or ten-year period has not yet elapsed, data will be provided as
of the end of a shorter period corresponding to the life of the Fund.
Standardized Return assumes the reinvestment of all dividends and other
distributions at net asset value on the reinvestment date as established by the
Board of Trustees.

In addition, in order to more completely represent each Fund's performance or
more accurately compare such performance to other measures of investment return,
each Fund also may include in advertisements, sales literature and shareholder
reports other total return performance data ("Non-Standardized Return").
Non-Standardized Return reflects percentage rates of return encompassing all
elements of return (i.e., income and capital appreciation or depreciation); it
assumes reinvestment of all dividends and other distributions. Non-Standardized
Return may be quoted for the same or different periods as those for which
Standardized Return is quoted; it may consist of an aggregate or average annual
percentage rate of return, actual year-by-year rates or any combination thereof.

The Strategic Income Fund, the Global Government Income Fund and the U.S.
Government Income Fund also may refer in advertising and promotional materials
to their respective yields, which will fluctuate over time. A Fund's yield shows
the rate of income that it earns on its investments, expressed as a percentage
of the public offering price of its shares. A Fund calculates yield by
determining the interest income it earned from its portfolio investments for a
specified thirty-day period (net of expenses), dividing such income by the
average number of shares outstanding, and expressing the result as an annualized
percentage based on the public offering price at the end of that thirty-day
period. Yield accounting methods differ from the methods used for other
accounting purposes; accordingly, a Fund's yield may not equal the dividend
income actually paid to investors or the income reported in the Fund's financial
statements.

From time to time the Money Market Fund may advertise its "yield" and "effective
yield" in advertisements or promotional materials. Both yield figures are based
on historical earnings and are not intended to indicate future performance. It
can be expected that these yields will fluctuate substantially. The "yield" of
the Money Market

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

Fund refers to the income generated by an investment in the Fund over a
seven-day period (which period will be stated in the advertisement). This income
is then "annualized." That is, the amount of income generated by the investment
during that week is assumed to be generated each week over a 52-week period and
is shown as a percentage of the investment. The "effective yield" is calculated
similarly but, when annualized, the income earned by an investment in the Fund
is assumed to be reinvested. The "effective yield" will be slightly higher than
the "yield" because of the compounding effect of this assumed reinvestment. The
Statement of Additional Information describes the methods used to calculate the
Money Market Fund's yield and effective yield.

In addition to "yield" and "effective yield," advertisements or promotional
materials also may include other performance data of the Money Market Fund which
may consist of (1) the actual return or total income (including realized net
short-term capital gain, if any) generated by a hypothetical investment in the
Fund year-by-year since the commencement of the Fund's operations, (2) the
compounded return or total income generated by a hypothetical investment in the
Fund year by year for the same period, assuming reinvestment of all dividends
and any other distributions, and (3) the cumulative return (or overall change in
account value) of a hypothetical investment in the Fund year by year over the
same period, also assuming reinvestment of all dividends and any other
distributions.

Each Fund's performance data will reflect past performance and will not
necessarily be indicative of future results. The Fund's investment results will
vary from time to time depending upon market conditions, the composition of its
portfolio and its operating expenses. Yield and performance information of any
Fund will not be compared with such information for funds that offer their
shares directly to the public, because Fund data do not reflect charges imposed
by a Participating Insurance Company on the VA Contracts. The effective yield
and total return for a Fund should be distinguished from the rate of return of a
corresponding division of a separate account of such Participating Insurance
Company, which rate will reflect the deduction of additional charges, including
mortality and expense risk charges, and will therefore be lower. Accordingly,
performance figures for a Fund will only be advertised if comparable performance
figures for the corresponding division of the separate account are included in
the advertisement. VA Contract holders should consult their Participating
Insurance Company's VA Contract prospectus for further information. Each Fund's
results also should be considered relative to the risks associated with its
investment objectives and policies.

Calculations of a Fund's yield or performance information may reflect any
undertaking that may be in effect. See "Management" and "Investment Results" in
the Statement of Additional Information.

Each Fund's annual report contains additional information with respect to its
performance. The annual report is available to investors upon request and free
of charge.

TRANSFER AGENT. Reporting and general transfer agent functions for the Funds
and servicing of the Separate Accounts are performed by G.T. Global Investor
Services, Inc., an affiliate of G.T. Capital and a subsidiary of BIL GT Group.
G.T. Global Investor Services, Inc. maintains its offices at 50 California
Street, San Francisco, California 94111.

CUSTODIAN AND ACCOUNTING AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, is custodian of each Fund's
assets.

COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 M Street, N.W.,
Washington, D.C. 20036-5891, acts as counsel to the Companies. Kirkpatrick &
Lockhart LLP also acts as counsel to G.T. Capital, and G.T. Global Financial
Services, Inc. in connection with other matters.

INDEPENDENT ACCOUNTANTS. The Companies' and the Funds' independent accountants
are Coopers & Lybrand L.L.P., One Post Office Square, Boston Massachusetts
02109. Coopers & Lybrand L.L.P. conducts an annual audit of the Funds, assists
in the preparation of the Funds' federal and state income tax returns and
consults with the Companies and the Funds as to matters of accounting,
regulatory filings, and federal and state income taxation.

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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE FUNDS'
OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUNDS' SHARES,
AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUNDS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM, SUCH
OFFERING MAY NOT LAWFULLY BE MADE.

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Prospectus Page 49
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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

NOTES
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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

NOTES
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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

NOTES
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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

NOTES
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<PAGE> 55
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LOGO G. T. G L O B A L V A R I A B L E
I N V E S T M E N T F U N D S
G.T. GLOBAL: VARIABLE NEW PACIFIC FUND
G.T. GLOBAL: VARIABLE EUROPE FUND
G.T. GLOBAL: VARIABLE LATIN AMERICA FUND
G.T. GLOBAL: VARIABLE AMERICA FUND
G.T. GLOBAL: VARIABLE INTERNATIONAL FUND
G.T. GLOBAL: VARIABLE INFRASTRUCTURE FUND
G.T. GLOBAL: VARIABLE NATURAL RESOURCES FUND
G.T. GLOBAL: VARIABLE TELECOMMUNICATIONS FUND
G.T. GLOBAL: VARIABLE EMERGING MARKETS FUND
G.T. GLOBAL: VARIABLE GROWTH & INCOME FUND
G.T. GLOBAL: VARIABLE GLOBAL GOVERNMENT INCOME FUND
G.T. GLOBAL: VARIABLE STRATEGIC INCOME FUND
G.T. GLOBAL: VARIABLE U.S. GOVERNMENT INCOME FUND
G.T. GLOBAL: MONEY MARKET FUND
50 CALIFORNIA STREET, 27TH FLOOR
SAN FRANCISCO, CALIFORNIA 94111
(415) 392-6181
TOLL FREE: (800) 824-1580

STATEMENT OF ADDITIONAL INFORMATION DATED OCTOBER 2, 1995

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THIS STATEMENT OF ADDITIONAL INFORMATION RELATES TO THE G.T. GLOBAL VARIABLE
INVESTMENT FUNDS (INDIVIDUALLY A "FUND," COLLECTIVELY, THE "FUNDS"). EACH FUND
IS ORGANIZED AS A SEPARATE SERIES OF EITHER G.T. GLOBAL VARIABLE INVESTMENT
SERIES OR G.T. GLOBAL VARIABLE INVESTMENT TRUST (INDIVIDUALLY, THE "COMPANY",
COLLECTIVELY, THE "COMPANIES"). THIS STATEMENT OF ADDITIONAL INFORMATION
CONCERNING THE FUNDS, WHICH IS NOT A PROSPECTUS, SUPPLEMENTS AND SHOULD BE READ
IN CONJUNCTION WITH THE FUNDS' CURRENT PROSPECTUS DATED OCTOBER 2, 1995, A COPY
OF WHICH IS AVAILABLE WITHOUT CHARGE BY WRITING TO THE ABOVE ADDRESS OR BY
CALLING THE FUNDS AT THE TOLL-FREE PHONE NUMBER PRINTED ABOVE. SHARES OF EACH
FUND ARE OFFERED ONLY TO SEPARATE ACCOUNTS THAT FUND VARIABLE ANNUITY CONTRACTS
("VA CONTRACTS") OFFERED BY CERTAIN LIFE INSURANCE COMPANIES ("PARTICIPATING
INSURANCE COMPANIES").

G.T. CAPITAL MANAGEMENT, INC. ("G.T. CAPITAL") SERVES AS THE FUNDS' INVESTMENT
MANAGER AND ADMINISTRATOR. THE FUNDS' TRANSFER AGENT IS G.T. GLOBAL INVESTOR
SERVICES, INC. ("G.T. SERVICES" OR "TRANSFER AGENT").

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TABLE OF CONTENTS
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<TABLE>
<CAPTION>
PAGE NO.
<S> <C>
Investment Objectives and Policies.................................................... 2
Options, Futures and Currency Strategies.............................................. 16
Risk Factors.......................................................................... 27
Investment Limitations................................................................ 31
Execution of Portfolio Transactions................................................... 43
Trustees and Executive Officers....................................................... 46
Management............................................................................ 48
Valuation of Shares................................................................... 49
Information Relating to Sales and Redemptions ........................................ 51
Taxes................................................................................. 52
Additional Information................................................................ 54
Investment Results.................................................................... 55
Description of Debt Ratings........................................................... 73
Appendix.............................................................................. 77
Financial Statements.................................................................. 81
</TABLE>

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Statement of Additional Information Page 1
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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

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INVESTMENT OBJECTIVES AND POLICIES
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Each Fund has its own investment objective(s) and investment policies. The
objective(s) and policies of each Fund determine the types of securities in
which that Fund may invest.

The investment objective of each of the following Global Growth Funds, as
defined in the Prospectus, is long-term growth of capital: G.T. GLOBAL: VARIABLE
NEW PACIFIC FUND ("New Pacific Fund"), G.T. GLOBAL: VARIABLE INTERNATIONAL FUND
("International Fund"), G.T. GLOBAL: VARIABLE EUROPE FUND ("Europe Fund") and
G.T. GLOBAL: VARIABLE AMERICA FUND ("America Fund"). G.T. GLOBAL: VARIABLE LATIN
AMERICA FUND ("Latin America Fund") seeks capital appreciation. The investment
objective of each of G.T. GLOBAL: VARIABLE EMERGING MARKETS FUND ("Emerging
Markets Fund") and G.T. GLOBAL: VARIABLE TELECOMMUNICATIONS FUND
("Telecommunications Fund") is long-term growth of capital. The investment
objective of each of G.T. GLOBAL: VARIABLE INFRASTRUCTURE FUND ("Infrastructure
Fund") and G.T. GLOBAL: VARIABLE NATURAL RESOURCES FUND ("Natural Resources
Fund") is long-term capital growth. The investment objectives of G.T. GLOBAL:
VARIABLE GROWTH & INCOME FUND ("Growth & Income Fund") are long-term capital
appreciation together with current income. G.T. GLOBAL: VARIABLE STRATEGIC
INCOME FUND ("Strategic Income Fund") seeks high current income as its primary
investment objective. The Strategic Income Fund's secondary investment objective
is capital appreciation. G.T. GLOBAL: VARIABLE GLOBAL GOVERNMENT INCOME FUND
("Global Government Income Fund") primarily seeks high current income. The
Global Government Income Fund's secondary investment objectives are capital
appreciation and protection of principal through active management of the
maturity structure and currency exposure. The investment objective of G.T.
GLOBAL: VARIABLE U.S. GOVERNMENT INCOME FUND ("U.S. Government Income Fund") is
a high level of current income, consistent with the preservation of capital. The
investment objective of G.T. GLOBAL: MONEY MARKET FUND ("Money Market Fund") is
maximum current income consistent with liquidity and conservation of capital.

Each Fund seeks to achieve its investment objective(s) through a distinct set of
investment policies. In determining the appropriate distribution of investments
among various countries and geographic regions for the Funds, G.T. Capital
ordinarily considers the following factors: prospects for relative economic
growth between the different countries in which each Fund may invest; expected
levels of inflation; government policies influencing business conditions; the
outlook for currency relationships; and the range of the individual investment
opportunities available to international investors.

In analyzing companies for investment by each Fund, G.T. Capital ordinarily
looks for one or more of the following characteristics: above-average earnings
growth per share; high return on invested capital; healthy balance sheet; sound
financial and accounting policies and overall financial strength; strong
competitive advantages; effective research and product development and
marketing; efficient service; pricing flexibility; strength of management; and
general operating characteristics which will enable the companies to compete
successfully in their respective marketplaces. In certain countries,
governmental restrictions and other limitations on investment may affect the
maximum percentage of equity ownership in any one company by a Fund or the Funds
in the aggregate. In addition, in some instances only special classes of
securities may be purchased by foreigners and the market prices, liquidity and
rights with respect to those securities may vary from shares owned by nationals.

There may be times when, in the opinion of G.T. Capital, prevailing market,
economic or political conditions warrant reducing the proportion invested in
equity securities of issuers domiciled in a Fund's area of investment focus
below the applicable percentage of the Fund's assets and increasing the
proportion held in cash or short-term obligations denominated in U.S. dollars or
other currencies. A portion of each Fund's assets normally will be held in U.S.
dollars or short-term interest-bearing U.S. dollar-denominated securities to
provide for ongoing expenses and redemptions.

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

At this time, G.T. Capital is not aware of the existence of any investment or
exchange control regulations which might substantially impair the operations of
the Funds as described in the Prospectus and this Statement of Additional
Information. Although restrictions may in the future make it undesirable to
invest in certain countries, G.T. Capital does not believe that any current
repatriation restrictions would affect its decisions to invest in the countries
eligible for investment by any Fund. It should be noted, however, that this
situation could change at any time.

Each GLOBAL GROWTH FUND under normal circumstances invests at least 65% of its
total assets in equity securities of issuers domiciled in that Fund's "Primary
Investment Area."

For investment purposes, an issuer typically is considered as domiciled in a
particular country if it is incorporated under the laws of that country, and
either (i) at least 50% of the value of its assets are located in that country;
or (ii) it normally derives at least 50% of its income from operations or sales
in that country. However, these are not absolute requirements, and certain
companies incorporated in a particular country and considered by G.T. Capital to
be domiciled in that country may have substantial off-shore operations or
subsidiaries and/or export sales exceeding in size the assets or sales in that
country.

Each Global Growth Fund may also invest up to 35% of its assets in (1) the
equity securities of issuers domiciled outside of its Primary Investment Area,
including, (a) securities of issuers in countries that are not located in the
Primary Investment Area but are linked by tradition, economic markets, cultural
similarities or geography to the countries in such Primary Investment Area; and
(b) securities of issuers located elsewhere in the world which have operations
in the Primary Investment Area or which stands to benefit from political and
economic events in the Primary Investment Area; and (2) convertible bonds and
debt securities.

SPECIAL RISKS

Special Considerations Affecting Europe. Currently, the Europe Fund includes
European countries in its Primary Investment Area. The countries that are
members of the European Economic Community ("Common Market") (Belgium, Denmark,
France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal,
Spain and the United Kingdom) eliminated certain import tariffs and quotas,
limitations on the employment of non-citizens and other trade barriers that
existed with respect to one another, over the past several years. G.T. Capital
believes that this deregulation should improve the prospects for economic growth
in many European countries. Among other things, the deregulation could enable
companies domiciled in one country to avail themselves of lower labor costs
existing in other countries. In addition, this deregulation could benefit
companies domiciled in one country by opening additional markets for their goods
and services in other countries. Since, however, it is not clear at this time
the exact effect these Common Market reforms will have on business in the Common
Market, it is impossible to predict the impact of the implementation of this
program on the securities owned by the Europe Fund.

Special Considerations Affecting Japan and Hong Kong. The concentration of
investments by a Fund in Japan means that the Fund may be more volatile than a
Fund that is broadly diversified geographically. Overseas trade is important to
Japan's economy. Japan has few natural resources and must export to pay for its
imports of these basic requirements. Because of the concentration of Japanese
exports in highly visible products, Japan has had difficult relations with its
trading partners, particularly the U.S., where the trade imbalance is the
greatest. It is possible that trade sanctions or other protectionist measures
could impact Japan adversely in both the short and the long term. The Japanese
securities markets are less regulated than those in the United States. Evidence
has emerged from time to time of distortion of market prices to serve political
or other purposes. Shareholders' rights are not always equally enforced.

Hong Kong is a British colony which will transfer sovereignty to the Peoples
Republic of China in 1997. China has espoused policies antagonistic to free
enterprise capitalism and democracy. There can be no guarantee that property
rights will continue to be safeguarded in Hong Kong after 1997, although,
recently China has moved progressively towards free enterprise, and has
established stock exchanges of its own.

Special Considerations Affecting Emerging Markets. Investing in the securities
of issuers domiciled in emerging markets, including the markets of Latin America
and certain Asian

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

markets such as Taiwan, Malaysia and Indonesia, may entail special risks
relating to the potential political and economic instability and the risks of
expropriation, nationalization, confiscation or the imposition of restrictions
on foreign investment and on repatriation of capital invested. In the event of
such expropriation, nationalization or other confiscation by any country, a Fund
could lose its entire investment in any such country.

Emerging securities markets are substantially smaller, less developed, less
liquid and more volatile than the major securities markets. The limited size of
emerging securities markets and limited trading volume in issuers compared to
the volume of trading in U.S. securities could cause prices to be erratic for
reasons apart from factors that affect the quality of the securities. For
example, limited market size may cause prices to be unduly influenced by traders
who control large positions. Adverse publicity and investors' perceptions,
whether or not based on fundamental analysis, may decrease the value and
liquidity of portfolio securities in these markets.

Most emerging market countries have experienced substantial, and in some periods
extremely high, rates of inflation for many years. Inflation and rapid
fluctuations in inflation rates have had and may continue to have negative
effects on the economies and securities markets of certain emerging market
countries.

The INFRASTRUCTURE FUND normally invests at least 65% of its total assets in
securities of companies throughout the world that design, develop or provide
products and services significant to a country's infrastructure.

The NATURAL RESOURCES FUND normally invests at least 65% of its total assets in
securities of companies throughout the world that own, explore or develop
natural resources and other basic commodities, or supply goods and services to
such companies. In analyzing the natural resource industry, G.T. Capital has
identified four areas that it expects will create investment opportunities: (i)
improving supply/demand fundamentals, which may result in higher commodity
prices; (ii) privatization of state-owned natural resource businesses; (iii)
management which can improve production efficiencies without correspondingly
increasing commodity prices; and (iv) service companies with emerging
technologies that can enhance productivity or reduce production costs. Of
course, there is no certainty that these factors will produce the anticipated
results.

The TELECOMMUNICATIONS FUND normally invests at least 65% of its total assets in
common and preferred stocks and warrants to acquire such stocks, issued by
companies throughout the world engaged in the development, manufacture or sale
of telecommunications services or equipment. In analyzing the telecommunications
industry, G.T. Capital has identified four areas that it expects will create
investment opportunities and lead to growth in the sector: (a) the deregulation
of companies in the industry, which will allow competition to promote greater
efficiencies; (b) the privatization of state-owned telecommunications
businesses; (c) the development of infrastructure in underdeveloped countries
and upgrading of services in other countries; and (d) emerging technologies,
that will enhance productivity and reduce costs in the telecommunications
industry. Of course, there is no certainty that these factors will produce the
anticipated results.

G.T. Capital believes that there are opportunities for continued growth in
demand for components, products, media and systems to collect, store, retrieve,
transmit, process, distribute, record, reproduce and use information. The
pervasive societal impact of communications and information has been accelerated
by the lower costs and higher efficiencies that result from the blending of
computers with telecommunications systems. Accordingly, companies engaged in the
production of methods for using electronic and, potentially, video technology to
communicate information are expected to be important in the Telecommunications
Fund's holdings. Older technologies, such as photography and print also may be
represented.

The Telecommunications Fund and G.T. Capital believe that a global portfolio of
telecommunications investments may be less

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

subject to market risk (the risk attendant to investing in a particular market)
and price fluctuation, than a portfolio invested solely in U.S.
telecommunications securities. Under the Telecommunications Fund's policies,
G.T. Capital may shift the country allocations of the investments as market
conditions in individual countries change. Moreover, the number of different
investment opportunities from which the Telecommunications Fund may choose is
significantly broader than that of a fund investing solely in U.S.
telecommunications securities.

The LATIN AMERICA FUND normally invests at least 65% of its total assets in
securities of a broad range of Latin American issuers. Under normal market
conditions, the Fund expects to invest primarily in equity and debt securities
issued by companies and governments in Mexico, Chile, Brazil, and Argentina.
Although the Latin America Fund can normally invest up to 35% of its total
assets in U.S. securities, the Fund reserves the right to be primarily invested
in U.S. securities for temporary defensive purposes or pending investment of the
proceeds of the sale of its shares.

It should be noted that some Latin American countries require governmental
approval for the repatriation of investment income, capital, or the proceeds of
securities sales by foreign investors. For instance, at present, capital
invested directly in Chile cannot under most circumstances be repatriated for at
least one year. The Latin America Fund could be adversely affected by delays in,
or a refusal to grant, any required governmental approval for repatriation, as
well as by the application to it of other restrictions on investments.

Several Latin American countries have adopted debt conversion programs, pursuant
to which investors may use external debt of a country, directly or indirectly,
to make investments in local companies. The terms of the various programs vary
from country to country, although each program includes significant restrictions
on the application of the proceeds received in the conversion and on the
remittance of profits on the investment and of the invested capital. The Latin
America Fund intends to acquire Sovereign Debt to hold and trade in appropriate
circumstances, as well as to use to participate in Latin American debt
conversion programs. See "Risk Factors" in the Funds' Prospectus and "Risk
Factors" below. G.T. Capital will evaluate opportunities to enter into debt
conversion transactions as they arise but does not currently intend to invest
more than 5% of the Latin America Fund's assets in such programs.

As described in the Prospectus, several Latin American countries have issued
so-called "Brady Bonds." In Venezuela, bearer bonds known as Frontloaded
Interest Reduction Bonds, Debt Conversion Bonds and New Money Bonds have been
issued. Each of the foregoing types of bonds provides for a dollar-for-dollar
exchange of loans for bonds. At present, Frontloaded Interest Reduction Bonds
have a 12-year average life and pay below market rates for the first six years.
Debt Conversion Bonds also have a 12-year average life, pay interest at the
London InterBank Offer Rate ("LIBOR") plus 13/16% and, for every $1.00 in face
amount, enable the holder to purchase, at par, $0.20 face amount, which have an
average life of 11 years and pay interest at LIBOR plus 7/8% or 1%.

Political and Economic Risks. Even though opportunities for investment may exist
in Latin American countries, any change in the leadership or policies of the
governments of those countries or in the leadership or policies of any other
government which exercises a significant influence over those countries, may
halt the expansion of or reverse the liberalization of foreign investment
policies now occurring and thereby eliminate any investment opportunities which
may currently exist.

Investors should note that upon the accession to power of authoritarian regimes,
the governments of a number of Latin American countries previously expropriated
large quantities of real and personal property, similar to the property which
will be represented by the securities purchased by the Latin America Fund. The
claims of property owners against those governments were never finally settled.
There can be no assurance that any property represented by securities purchased
by the Latin America Fund will not also be expropriated, nationalized, or
otherwise confiscated. If such confiscation were to occur, the Latin America
Fund could lose a substantial portion of its investments in such countries. The
Latin America Fund's investments would similarly be adversely affected by
exchange control regulations in any of those countries.

Further, there is a risk that an emergency situation may arise in one or more
Latin American markets as a result of which prices for portfolio securities in
such markets may not be

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readily available. Section 22(e) of the Investment Company Act of 1940, as
amended ("1940 Act") permits a registered investment company to suspend
redemption of its shares for any period during which an emergency, as determined
by the Securities and Exchange Commission ("SEC"), exists. Accordingly, if the
Latin America Fund believes that appropriate circumstances exist, it will
promptly apply to the SEC for a determination that an emergency, within the
meaning of Section 22(e) of the 1940 Act, is present. During the period
commencing from the Latin America Fund's identification of such conditions until
the date of SEC action, the securities held by the Fund in the affected markets
will be valued at fair value determined in good faith by or under the direction
of the Company's Board of Trustees.

The Latin America Fund invests in securities denominated in currencies of Latin
American countries. Accordingly, changes in the value of these currencies
against the U.S. dollar will result in corresponding changes in the U.S. dollar
value of the Latin America Fund's assets denominated in those currencies. Such
changes will also affect the Latin America Fund's income.

In addition, many of the currencies of Latin American countries have experienced
steady devaluations relative to the U.S. dollar, and major devaluations have
historically occurred in certain countries.

Some Latin American countries also may have managed currencies which are not
free floating against the U.S. dollar. In addition, there is a risk that certain
Latin American countries may restrict the free conversion of their currencies
into other currencies. Further, certain Latin American currencies may not be
internationally traded. Certain of these currencies have experienced a steady
devaluation relative to the U.S. dollar. Any devaluations in the currencies in
which the securities held by the Latin America Fund are denominated may have a
detrimental impact on the Fund.

Illiquid Securities. On December 31, 1994, the market capitalizations of listed
equity securities on the major exchanges in Argentina, Brazil (Sao Paulo only
for market capitalization), Chile, and Mexico were US$24.2 billion, $94.8
billion, $38.8 billion, and $108.4 billion, respectively. By comparison, at
December 31, 1994, the market capitalization of the New York Stock Exchange
("NYSE") alone was US$4.4 trillion. A high proportion of the shares of many
Latin American companies may be held by a limited number of persons, which may
further limit the number of shares available for investment by the Latin America
Fund. A limited number of issuers in most, if not all, Latin American securities
markets may represent a disproportionately large percentage of market
capitalization and trading value. The limited liquidity of Latin American
securities markets also may affect the Latin America Fund's ability to acquire
or dispose of securities at the price and time it wishes. In addition, certain
Latin American securities markets, including those of Argentina, Brazil, Chile,
and Mexico, are susceptible to being influenced by large investors trading
significant blocks of securities or by large dispositions of securities
resulting from the failure to meet margin calls when due.

Accordingly, at any one time more than 15% of the Latin America Fund's net
assets may consist of illiquid securities, either because of adverse events
which occur following the purchase of the securities which cause them to become
illiquid, or because liquid securities are sold to meet cash needs of the Fund.
Illiquid securities are more difficult to value accurately due to, among other
things, the fact that such securities often trade infrequently or only in
smaller amounts. The Latin America Fund, however, will make every effort to hold
illiquid securities that reflect no more than 15% of the Fund's net assets.

The high volatility of certain Latin American securities markets is evidenced by
dramatic movements in the Brazilian and Mexican markets in recent years. The
stock markets in Brazil declined sharply in mid 1989, and closed briefly,
following a large settlement failure. Another significant decline occurred in
the first quarter of 1990. In 1987, the Mexican stock exchange experienced a
severe correction, its index declining over 70 percent. In June, 1992, the
Mexican stock exchange experienced a decline of approximately 14% of its index.
This market volatility may result in greater volatility in the Latin America
Fund's net asset value than would be the case for funds investing in domestic
securities. If the Latin America Fund were to experience unexpected cash
requirements, whether through the unexpected net redemption of Fund shares or
otherwise, it could be forced to sell securities without regard to investment
merit, thereby decreasing the asset base over which Fund expenses can be spread
and possibly reducing the Fund's rate of return.

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Foreign Investment Restrictions. Certain countries prohibit or impose
substantial restrictions on investments in their capital markets, particularly
their equity markets, by foreign entities such as the Latin America Fund. As
illustrations, certain countries require governmental approval prior to
investments by foreign persons or limit the amount of investment by foreign
persons in a particular company or limit the investment by foreign persons to
only a specific class of securities of a company that may have less advantageous
terms than securities of the company available for purchase by nationals.
Moreover, the national policies of certain countries may restrict investment
opportunities in issuers or industries deemed sensitive to national interests.
In addition, some countries require governmental approval for the repatriation
of investment income, capital or the proceeds of securities sales by foreign
investors. The Latin America Fund could be adversely affected by delays in, or a
refusal to grant, any required governmental approval for repatriation, as well
as by the application to it of other restrictions on investments.

As of 1994, the relevant foreign investment restrictions in each of the four
principal economies of Latin America, which are susceptible to significant and
immediate changes, can be summarized as follows:

ARGENTINA. Previous restrictions on foreign investment have been abolished and
prior approval of such investment is no longer required (except where required
in specific statutes governing certain activities) ensuring equal treatment of
national and foreign capital applied to economic activities. At present, foreign
capital can move freely in and out of Argentina and no foreign exchange
restrictions are applied to dividend or capital gains remittance.

BRAZIL. Under regulations adopted by the government of Brazil, the Latin
America Fund is able to purchase Brazilian securities without regard to any
diversification or repatriation restrictions. However, the regulations require
that the Latin America Fund's investments be limited to securities issued by
publicly-held corporations acquired on the Brazilian stock exchanges or on
over-the-counter markets organized by the Commissao de Valores Mobiliarios
("CVM") or units of certain Financial Investment Funds. The Latin America Fund's
authority to invest in Brazil pursuant to this regulation remains subject to
approval by the CVM. In addition, the Latin America Fund is required to appoint
a Brazilian administrator to perform certain functions with respect to its
holdings of Brazilian securities.

CHILE. Direct investment by foreign investors in Chile is subject to certain
Chilean investment restrictions, including a requirement that invested capital
must remain in Chile for a minimum of one year. The remittance of dividends and
capital gains can be effected without material restrictions on timing and
amount. Indirect investments, however, may be made through already established
investment funds and such investments will not be subject to the restriction
regarding residency of capital, although they will be subject to the
limitations, described below, regarding investments by the Latin America Fund in
the securities of other investment companies. In addition to investing
indirectly in the Chilean market, the Latin America Fund may establish its own
foreign investment fund in Chile for which a Chilean administrator will be
required. The Latin America Fund may also gain access to investment in Chile via
American Depositary Receipts ("ADRs") currently traded in the U.S. on the New
York Stock Exchange. Several Chilean companies plan ADR listings in the U.S. in
1994. G.T. Global believes these events significantly broaden the Latin America
Fund's ability to gain access to the Chilean market.

MEXICO. Generally, foreigners may directly acquire shares of Mexican companies
up to a limit of 49 percent of the share capital of the issuer without prior
approval. Foreigners may acquire shares in the share capital of certain Mexican
listed companies usually reserved to Mexican nationals, and may acquire in
excess of the 49 percent limit referred to above, through trust arrangements
with Nacional Financiera, S.N.C. ("Nafin"), the Mexican government development
finance bank. Under this arrangement Nafin will acquire the securities that the
Fund purchases and then issue Ordinary Certificates of Participation ("CEPOS").
As a holder of the CEPOS, the Latin America Fund would have all rights of the
shares acquired, but it would not have voting rights. There are no restrictions
on the movement of capital in and out of Mexico. Dividends and capital gains can
also be freely remitted, subject to any withholding tax.

VENEZUELA. G.T. Global believes that the Latin America Fund may invest a
greater percentage of

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its assets than previously in Venezuela if political and economic conditions
change materially. The following are relevant foreign investment restrictions
relating to Venezuela.

In order to stabilize the country's financial system, the government suspended
foreign exchange trading on July 6, 1994. The market was "officially" opened
July 11, however, the Bolivar did not begin trading until January 10, 1995 at a
level of 212 and 220 (the level held since December 1994).

The Venezuelan Exchange Administration Board issued Resolution No. 41 regarding
foreign investment registration and repatriation for capital dividends and
interest. The Resolution provides that all investment should be registered with
the Superintendency of Foreign Investment (SEIX) and the Technical
Administration Exchange Office (OTAC). Article 2 of the Resolution states that
"investments" is defined as those transactions executed through the local stock
exchange (this prohibits OTC transaction proceeds from being eligible for
repatriation).

Resolution No. 41 also required re-filing by funds previously approved. The Fund
has complied with the regulations and has obtained approval by the Regulatory
Commission. This avoids jeopardizing the assets held by the Fund.

In November 1994 the government passed a Resolution allowing foreign investors
to repatriate without restrictions under the new controlled exchange system. It
is now possible to repatriate any capital or income provided that the OTAC has
proof that the investor has obtained a tax identification code and complied with
all tax return filing requirements.

The EMERGING MARKETS FUND seeks its investment objective by investing, under
normal circumstances, at least 65% of its total assets in equity securities of
companies in emerging markets. The Emerging Markets Fund does not consider the
following countries to be emerging markets: Australia, Austria, Belgium, Canada,
Denmark, England, Finland, France, Germany, Ireland, Italy, Japan, the
Netherlands, New Zealand, Norway, Spain, Sweden, Switzerland and United States.
The Emerging Markets Fund normally may invest up to 35% of its assets in a
combination of (i) debt securities of government or corporate issuers in
emerging markets; (ii) equity and debt securities of issuers in developed
countries, including the United States; (iii) securities of issuers in emerging
markets not included in the list of emerging markets set forth in the Emerging
Markets Fund's current Prospectus, if investing therein becomes feasible and
desirable subsequent to the date of the Emerging Markets Fund's current
Prospectus; and (iv) cash and money market instruments.

In determining what countries constitute emerging markets, G.T. Capital will
consider, among other things, data, analysis, and classification of countries
published or disseminated by the International Bank for Reconstruction and
Development (commonly known as the World Bank) and the International Finance
Corporation.

Although the Emerging Markets Fund values its assets daily in terms of U.S.
dollars, the Emerging Markets Fund does not intend to convert its holdings of
foreign currencies into U.S. dollars on a daily basis. The Emerging Markets Fund
will do so from time to time, and investors should be aware of the costs of
currency conversion. Although foreign exchange dealers do not charge a fee for
conversion, they do realize a profit based on the difference ("spread") between
the prices at which they are buying and selling various currencies. Thus, a
dealer may offer to sell a foreign currency to the Emerging Markets Fund at one
rate, while offering a lesser rate of exchange should the Emerging Markets Fund
desire to sell that currency to the dealer.

The Emerging Markets Fund may be prohibited under the 1940 Act from purchasing
the securities of any foreign company that, in its most recent fiscal year,
derived more than 15% of its gross revenues from securities-related activities
("securities-related companies"). In a number of countries, commercial banks act
as securities broker/dealers, investment advisers and underwriters or otherwise
engage in securities-related activities, which may limit the Emerging Markets
Fund's ability to hold securities issued by banks. The SEC has proposed a rule
which, if adopted, may permit the Emerging Markets Fund to invest in certain of
these securities subject to certain restrictions. The Emerging Markets Fund has
obtained an exemption from the SEC to permit the Emerging Markets Fund to invest
in a manner that is consistent with the SEC's proposed rule.

The GROWTH & INCOME FUND seeks its investment objectives by assembling a global
portfolio of both equity securities and debt obligations allocated among diverse
international markets.

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For investment purposes, an issuer is typically considered as located in a
particular country if it is incorporated under the laws of that country, at
least 50% of the value of its assets are located in that country, and it
normally derives at least 50% of its income from operations or sales in that
country. However, these are not absolute requirements, and certain companies
incorporated in a particular country and considered by G.T. Capital to be
located in that country may have substantial off-shore operations or
subsidiaries and/or export sales exceeding in size the assets or sales in that
country.

In certain countries, governmental restrictions and other limitations on
investment may affect the Growth and Income Fund's ability to invest. For
example, in some instances only special classes of securities may be purchased
by foreigners and the market prices, liquidity and rights with respect to those
securities may vary from shares owned by nationals. G.T. Capital is not aware at
this time of the existence of any investment or exchange control regulations
which might substantially impair the operations of the Growth & Income Fund as
described in the Prospectus and this Statement of Additional Information.
Although restrictions may in the future make it undesirable to invest in certain
countries, G.T. Capital does not believe that any current repatriation
restrictions would affect its decisions to invest in the countries eligible for
investment by the Growth & Income Fund. It should be noted, however, that this
situation could change at any time. The Growth & Income Fund has no present
intention of making any significant investment in any country or stock market
where the political or economic situation might be considered by G.T. Capital to
be at risk of substantial or total loss because of such political or economic
situation.

G.T. Capital attempts to identify those countries and industries where economic
and political factors are likely to produce above-average growth rates and to
further identify companies in such countries and industries that are best
positioned and managed to benefit from these factors. In evaluating possible
equity investments, G.T. Capital attempts to identify and acquire
only securities it deems to represent high or improving investment quality.
Securities representing high investment quality generally will include those of
well-known, established and successful issuers that G.T. Capital believes will
continue to be successful in the future. Securities representing improving
investment quality may include those of an issuer which, for instance, has
improved its sales or earnings or of an issuer the balance sheet and financial
condition of which are improving. G.T. Capital will avoid equity securities that
appear overly speculative or risky, even if they have otherwise attractive
features or investment potential.

In evaluating debt securities considered for investment by the Growth & Income
Fund, G.T. Capital analyzes their yield, maturity, issue classification and
quality characteristics, coupled with expectations regarding the local and world
economies, movements in the general level and term of interest rates, currency
values, political developments, and variations of the supply of funds available
for investment in the world bond market relative to the demands placed upon it.
G.T. Capital may increase the average maturity of the portion of the Fund's
holdings invested in debt obligations when it expects interest rates to decline,
and may decrease such maturity when it expects interest rates to rise. There are
no limitations on the maximum or minimum maturities of the debt securities
considered by the Growth & Income Fund for investment or on the average weighted
maturity of the debt portion of the Fund's holdings.

Should the rating of any debt security be revised while such security is owned
by the Growth & Income Fund, G.T. Capital will evaluate what action, if any, is
appropriate with respect to such security. See "Description of Debt Ratings."

G.T. Capital generally evaluates currencies on the basis of fundamental economic
criteria (e.g., relative inflation and interest rate levels
and trends, growth rate forecasts, balance of payments status and economic
policies) as well as technical and political data. If the currency in which a
security is denominated appreciates against the U.S. dollar, the dollar value of
the security will increase. Conversely, if the exchange rate of the foreign
currency declines, the dollar value of the security will decrease. However, the
Growth & Income Fund may seek to protect itself against such negative currency
movements through the use of hedging techniques.

According to G.T. Capital, as of December 31, 1994, 63% of the total equity
market capitalization worldwide was represented by non-U.S. equity securities,
and more than 63% of the value of all outstanding government debt obligations
throughout the world was represented by obligations denominated in

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

currencies other than the U.S. dollar. Moreover, from time to time, the equity
and debt securities of issuers located outside the United States have
substantially outperformed the equity and debt securities of U.S. issuers.
Accordingly, G.T. Capital believes that the Growth & Income Fund's policy of
investing in equity and debt securities of issuers throughout the world may
enable the achievement of results superior to those produced by mutual funds
with similar objectives to those of the Fund that invest solely in U.S. equity
and debt securities.

The STRATEGIC INCOME FUND seeks to achieve its investment objectives by
investing in U.S. and foreign debt securities.

The Strategic Income Fund may invest up to 50% of its assets in debt securities
in emerging markets. The Strategic Income Fund does not consider the following
countries to be emerging markets: Australia, Austria, Belgium, Canada, Denmark,
England, Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, New
Zealand, Norway, Spain, Sweden, Switzerland, and the United States. In
determining what countries constitute emerging markets G.T. Capital will
consider, among other things, data analysis, and classification of countries
published or disseminated by the International Bank for Reconstruction and
Development (commonly known as the World Bank) and the International Finance
Corporation.

A company in an emerging market means: (i) a company the principal securities
trading market for which is an emerging market, as defined above; (ii) a company
that (alone or on a consolidated basis) derives 50% or more of its total
revenues from either goods produced, sales made or services performed in
emerging markets; or (iii) a company organized under the laws of, and with a
principal office in, an emerging market.

In determining the appropriate distribution of investments among various
countries and geographic regions for the Strategic Income Fund, G.T. Capital
ordinarily considers the following factors: prospects for relative economic
growth between the different countries in which the Fund may invest; expected
levels of inflation; government policies influencing business conditions; the
outlook for currency relationships; and the range of the individual investment
opportunities available to international investors.

The Strategic Income Fund may invest in the following types of money market
instruments (i.e., debt instruments with less than 13 months remaining until
maturity) denominated in U.S. dollars or other currencies: (a) obligations
issued or guaranteed by the U.S. or foreign governments, their agencies,
instrumentalities or municipalities; (b) obligations of international
organizations designed or supported by multiple foreign governmental entities to
promote economic construction or development; (c) finance company obligations,
corporate commercial paper and other short-term commercial obligations; (d) bank
obligations (including certificates of deposit, time deposits and bankers'
acceptances), subject to the restriction that the Strategic Income Fund may not
invest more than 25% of its total assets in bank securities; (e) repurchase
agreements with respect to all of the foregoing; and (f) other substantially
similar short-term debt securities with comparable characteristics.

The GLOBAL GOVERNMENT INCOME FUND seeks to achieve its investment objectives by
investing primarily in high quality debt securities issued or guaranteed by the
U.S. and foreign governments (including foreign states, provinces or
municipalities), their agencies and instrumentalities.

The Global Government Income Fund invests primarily in debt obligations
allocated among diverse international markets and denominated in various
currencies, including U.S. dollars, or in multinational currency units such as
European Currency Units. The Global Government Income Fund is designed for
investors who wish to accept the risks entailed in such investments, which are
different from those associated with a portfolio consisting entirely of U.S.
investments. The Global Government Income Fund will not invest in a foreign
currency or in securities denominated in a foreign currency if such currency is
not at the time of investment considered by G.T. Capital to be fully
exchangeable into U.S. dollars (or a multinational currency unit) without legal
restriction. The Global Government Income Fund may purchase securities that are
issued by the government or a company or financial institution of one nation but
denominated in the currency of another nation (or a multinational currency
unit).

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

The Global Government Income Fund may invest in the following types of money
market instruments (i.e., debt instruments with less than 13 months remaining
until maturity) denominated in U.S. dollars or other currencies: (a) obligations
issued or guaranteed by the U.S. or foreign governments, their agencies,
instrumentalities or municipalities; (b) obligations of international
organizations designed or supported by multiple foreign governmental entities to
provide economic reconstruction or development; (c) finance company obligations,
corporate commercial paper and other short-term commercial obligations; (d) bank
obligations (including certificates of deposit, time deposits and bankers'
acceptances), subject to the restriction that the Global Government Income Fund
may not invest more than 25% of its total assets in bank securities; (e)
repurchase agreements with respect to the foregoing; and (f) other substantially
similar short-term debt securities with comparable characteristics.

The U.S. GOVERNMENT INCOME FUND seeks to achieve its investment objective by
investing primarily in U.S. government and U.S. government agency securities.
The U.S. Government Income Fund may also invest in mortgage-related securities,
including collateralized mortgage obligations ("CMOs"), fixed-rate mortgage
obligations and adjustable rate mortgage obligations ("ARMs").

ARMs are pass-through mortgage securities which are collateralized by mortgages
with adjustable rather than fixed interest rates. The ARMs in which the U.S.
Government Income Fund invests are issued primarily by the Government National
Mortgage Association ("GNMA"), the Federal National Mortgage Association
("FNMA"), and the Federal Home Loan Mortgage Corporation ("FHLMC"). The
underlying mortgages collateralizing ARMs issued by GNMA are fully guaranteed by
the Federal Housing Administration or the Veterans Administration. The
underlying mortgages which collateralize ARMs issued by FNMA or FHLMC are
typically conventional residential mortgages conforming to minimum standards
prescribed by the U.S. government agency.

The U.S. Government Income Fund may also invest in CMOs, which are generally
issued by government agencies. All CMOs purchased by the U.S. Government Income
Fund either will be issued by a U.S. government agency or will be rated in the
highest category by a nationally recognized statistical rating organization. The
U.S. Government Income Fund may purchase CMOs that are:

(1) collateralized by pools of mortgages in which each mortgage is guaranteed
as to payment of principal and interest by an agency or instrumentality of
the U.S. government;

(2) collateralized by pools of mortgages in which payment of principal and
interest are guaranteed by the issuer and the guarantee is collateralized by
U.S. government securities; or

(3) securities in which the proceeds of the issuance are invested in mortgage
securities, and payment of the principal and interest is supported by the
credit of an agency or instrumentality of the U.S. government.

Resets. The interest rates on the mortgages underlying the ARMs and CMOs in
which the U.S. Government Income Fund may invest generally are reset at
intervals of one year or less in response to changes in a predetermined interest
rate index. There are two main categories of indices: those based on U.S.
Treasury securities and those derived from a calculated measure such as a
cost-of-funds index or a moving average of mortgage rates. Commonly used indices
include the one-year and three-year constant maturity Treasury rates ("CMT");
the three-month Treasury bill rate; the 180-day Treasury bill rate; the Eleventh
District Federal Home Loan Bank Cost-of-Funds Index ("EDCOFI"); the Median
National Cost-of-Funds Index; the one-month, three-month, six-month, or one-year
London Interbank Offered Rate ("LIBOR"); or an established index based on prime
lending rates or certificate of deposit rates. Some indices, such as the
one-year CMT rate, closely mirror changes in market interest rate levels.
Others, such as the EDCOFI, tend to lag behind changes in market rate levels and
tend to be somewhat less volatile. The net asset value of the U.S. Government
Income Fund's shares could fluctuate to the extent interest rates on underlying
mortgages differ from prevailing market interest rates during periods between
interest rate reset dates.

Caps and Floors. The underlying mortgages which collateralize the ARMs and CMOs
in which the U.S. Government Income Fund invests will

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frequently have caps and floors which limit the maximum amount by which the loan
rate may change up or down, either at each reset or adjustment interval or over
the life of the loan. This provides the mortgage borrower with some degree of
protection against large changes in monthly payments. Some residential mortgage
loans restrict periodic adjustments by limiting changes in the borrower's
monthly principal and interest payments rather than limiting interest rate
changes. These payment caps may result in negative amortization, i.e., an
increase in the balance of the mortgage loan.

The MONEY MARKET FUND seeks to obtain its investment objective by investing in
high quality, U.S. dollar-denominated money market instruments.

The Money Market Fund may purchase variable and floating rate securities with
remaining maturities in excess of 13 months. Such securities must comply with
conditions established by the SEC under which they may be considered to have
remaining maturities of 13 months or less. The yield of these securities varies
in relation to changes in specific money market rates such as the prime rate.
These changes are reflected in adjustments to the yields of the variable and
floating rate securities, and different securities may have different adjustment
rates. To the extent that the Money Market Fund invests in such variable and
floating rate securities, it is G.T. Capital's view that the Money Market Fund
may be able to take advantage of the higher yield that is usually paid on
longer-term securities. G.T. Capital further believes that the variable and
floating rates paid on such securities may substantially reduce the wide
fluctuations in market value caused by interest rate changes and other factors
which are typical of longer-term debt securities.

The Money Market Fund may acquire participation interests in securities in which
it is permitted to invest. Participation interests are pro rata interests in
securities held by others.

Although the Money Market Fund may invest in instruments of non-U.S. issuers,
all such instruments will be denominated in U.S. dollars and be of high quality.
Obligations of non-U.S. issuers are subject to the same risks that pertain to
domestic issues, notably credit risk, market risk and liquidity risk.
Nonetheless, these instruments present risks that are different from those
presented by investment in instruments of U.S. issuers. Obligations of foreign
entities may be subject to certain sovereign risks, including adverse political
and economic developments in a foreign country, the extent and quality of
government regulation of financial markets and institutions, interest
limitations, currency controls, foreign withholding taxes, and expropriation or
nationalization of foreign issuers and their assets. There may be less publicly
available information about foreign issuers than about domestic issuers, and
foreign issuers may not be subject to the same accounting, auditing and
financial recordkeeping standards and requirements as are domestic issuers.
Accordingly, while the Money Market Fund's ability to invest in these
instruments may provide it with the potential to produce greater income, and
therefore a higher yield for the Fund, than money market funds investing solely
in instruments of domestic issuers, the Money Market Fund presents greater risk
than such other funds.

INVESTMENTS IN OTHER INVESTMENT COMPANIES

With respect to certain countries, investments by a Fund currently may be made
only by acquiring shares of other investment companies with local government
approval to invest in those countries. The Funds (except for the Money Market
Fund) may invest in the securities of investment companies within the limits of
the 1940 Act. These limitations currently provide that, in general, each Fund
may not purchase shares of another investment company if (a) such a purchase
would cause a Fund to own more than 3 percent of the total outstanding voting
stock of the investment company, or (b) such a purchase would cause a Fund to
have more than 5 percent of its assets invested in the investment company or
more than 10 percent of its assets invested in an aggregate of all such
investment companies. Investment through investment companies also may involve
the payment of substantial premiums above the value of the securities held by
such companies. The Funds do not intend to invest in such investment companies
unless, in the judgment of G.T. Capital, the potential benefits of such
investments justify the payment of any applicable premiums or sales charges. The
yield of such securities will be reduced by the operating expenses of such
companies including payments to the investment managers of those investment
companies. At such time as direct investment in these countries is allowed, the
Funds anticipate investing directly in these markets.

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DEPOSITORY RECEIPTS

Each Fund, except for the Global Government Income Fund, the U.S. Government
Income Fund and the Money Market Fund, may hold securities of foreign issuers in
the form of American Depository Receipts ("ADRs"), American Depository Shares
("ADSs") and European Depository Receipts ("EDRs") or other securities
convertible into securities of eligible issuers. These securities may not
necessarily be denominated in the same currency as the securities for which they
may be exchanged. ADRs and ADSs are typically issued by an American bank or
trust company that evidences ownership of underlying securities issued by a
foreign corporation. EDRs, which are sometimes referred to as Continental
Depository Receipts ("CDRs"), are receipts issued in Europe, typically by
foreign banks and trust companies that evidence ownership of either foreign or
domestic securities. Generally, ADRs and ADSs in registered form are designed
for use in U.S. securities markets and EDRs and CDRs in bearer form are designed
for use in European securities markets. For purposes of the Funds' respective
investment policies, the Funds' investments in ADRs, ADSs, EDRs, and CDRs will
be deemed to be investments in the equity securities representing securities of
foreign issuers into which they may be converted.

ADR facilities may be established as either "unsponsored" or "sponsored." While
ADRs issued under these two types of facilities are in some respects similar,
there are distinctions between them relating to the rights and obligations of
ADR holders and the practices of market participants. A depository may establish
an unsponsored facility without participation by (or even necessarily the
acquiescence of) the issuer of the deposited securities, although typically the
depository requests a letter of non-objection from such issuer prior to the
establishment of the facility. Holders of unsponsored ADRs generally bear all
the costs of such facilities. The depository usually charges fees upon the
deposit and withdrawal of the deposited securities, the conversion of dividends
into U.S. dollars, the disposition of non-cash distributions, and the
performance of other services. The depository of an unsponsored facility
frequently is under no obligation to distribute shareholder communications
received from the issuer of the deposited securities or to pass through voting
rights to ADR holders with respect to the deposited securities. Sponsored ADR
facilities are created in generally the same manner as unsponsored facilities,
except that the issuer of the deposited securities enters into a deposit
agreement with the depository. The deposit agreement sets out the rights and
responsibilities of the issuer, the depository and the ADR holders. With
sponsored facilities, the issuer of the deposited securities generally will bear
some of the costs relating to the facility (such as dividend payment fees of the
depository), although ADR holders continue to bear certain other costs (such as
deposit and withdrawal fees). Under the terms of most sponsored arrangements,
depositories agree to distribute notices of shareholder meetings and voting
instructions, and to provide shareholder communications and other information to
the ADR holders at the request of the issuer of the deposited securities. The
Funds may invest in sponsored and unsponsored ADRs.

SAMURAI AND YANKEE BONDS

Subject to their respective fundamental investment limitations, the New Pacific
Fund, the International Fund, the Strategic Income Fund, and the Global
Government Income Fund may invest in yen-denominated bonds sold in Japan by
non-Japanese issuers ("Samurai bonds"), and the America Fund, the Strategic
Income Fund and the Global Government Income Fund may invest in U.S.
dollar-denominated bonds sold in the United States by non-U.S. issuers ("Yankee
bonds"). As compared with bonds issued in their countries of domicile, such bond
issues normally carry a higher interest rate but are less actively traded. It is
the policy of each Fund to invest in Samurai or Yankee bond issues only after
taking into account considerations of quality and liquidity, as well as yield.
These bonds would be issued by governments which are members of the Organization
for Economic Cooperation and Development or have AAA ratings.

WARRANTS OR RIGHTS

Warrants or rights may be acquired by the Funds, except for the Money Market
Fund, in connection with other securities or separately, and may provide the
Funds with the right to purchase at a later date other securities of the issuer.
The Pacific Fund, the International Fund, and the Europe Fund will not purchase
warrants in excess of 10% of their respective net assets taken at cost or at
market value, whichever is

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lower. The other Funds will not purchase warrants or rights, valued at the lower
of cost or market, in excess of 5% of the value of their respective net assets
and not more than 2% of such assets will be invested in warrants and rights
which are not listed on the American Stock Exchange or New York Stock Exchange
("NYSE"). Warrants or rights acquired by a Fund in units or attached to
securities will be deemed to be without value for purpose of this restriction.
These limits are not fundamental policies of the Funds and may be changed by a
Fund's Board of Trustees without shareholder approval.

LENDING OF SECURITIES

For the purpose of realizing additional income, each Fund, except the Money
Market Fund, may make secured loans of securities held by that Fund which amount
to not more than 30% of its total assets. Securities loans are made to broker-
dealers or institutional investors pursuant to agreements requiring that the
loans continuously be secured by collateral at least equal at all times to the
value of the securities lent plus any accrued interest, "marked to market" on a
daily basis. The collateral received will consist of cash, U.S. short-term
government securities, bank letters of credit or such other collateral as may be
permitted under the Fund's investment policies and by regulatory agencies and
approved by that Fund's Board of Trustees. While the securities loan is
outstanding, the Fund will continue to receive the equivalent of the interest or
dividends paid by the issuer on the securities, as well as interest on the
investment of the collateral or a fee from the borrower. The Fund has a right to
call each loan and obtain the securities on five business days' notice. All
Funds will not have the right to vote equity securities while they are being
lent, but each will call in a loan in anticipation of any important vote. The
risks in lending securities, as with other extensions of secured credit, consist
of possible delay in receiving additional collateral or in recovery of the
securities or possible loss of rights in the collateral should the borrower fail
financially. Loans will be made only to firms deemed by G.T. Capital to be of
good standing and will not be made unless, in the judgment of G.T. Capital, the
consideration to be earned from such loans would justify the risk.

COMMERCIAL BANK OBLIGATIONS

For the purposes of the Funds' respective investment policies regarding bank
obligations, obligations of foreign branches of U.S. banks and of foreign banks
are obligations of the issuing bank and may be general obligations of the parent
bank. Such obligations may, however, be limited by the terms of a specific
obligation and by government regulation. As with investment in non-U.S.
securities in general, investments in the obligations of foreign branches of
U.S. banks and of foreign banks may subject a Fund to investment risks that are
different in some respects from those of investments in obligations of domestic
issuers. Although a Fund typically will acquire obligations issued and supported
by the credit of U.S. or foreign banks having total assets at the time of
purchase in excess of $1 billion, this $1 billion figure is not a fundamental
investment policy or restriction of such Fund. For purposes of calculation with
respect to the $1 billion figure, the assets of a bank will be deemed to include
the assets of its U.S. and non-U.S. branches.

REPURCHASE AGREEMENTS

Each Fund will invest only in repurchase agreements collateralized at all times
in an amount at least equal to the repurchase price plus accrued interest. To
the extent that the proceeds from any sale of such collateral upon default in
the obligation to repurchase were less than the repurchase price, the Fund would
suffer a loss. If the financial institution which is party to the repurchase
agreement petitions for bankruptcy or otherwise becomes subject to bankruptcy or
other liquidation proceedings, there may be restrictions on the Fund's ability
to sell the collateral and the Fund could suffer a loss. However, with respect
to financial institutions whose bankruptcy or liquidation proceedings are
subject to the U.S. Bankruptcy Code, the Fund intends to comply with provisions
under the U.S. Bankruptcy Code that would allow it immediately to resell the
collateral. There is no limitation on the amount of the Fund assets may be
subject to repurchase agreements at any given time. A Fund will not enter into a
repurchase agreement with a maturity of more than seven days if, as a result
more than 15% (10% for the Money Market Fund) of the value of their net assets
would be invested in such repurchase agreements and other illiquid investments.

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

BORROWING, REVERSE REPURCHASE AGREEMENTS AND "ROLL" TRANSACTIONS

Each Fund's (other than the Money Market Fund) borrowings will not exceed
33 1/3% of the Fund's total assets, i.e., the Fund's total assets at all times
will equal at least 300% of the amount of outstanding borrowing. If market
fluctuations in the value of a Fund's securities holdings or other factors cause
the ratio of the Fund's total assets to outstanding borrowings to fall below
300%, within three days (excluding Sundays and holidays) of such event the Fund
may be required to sell securities to restore the 300% asset coverage, even
though from an investment standpoint such sales might be disadvantageous. Each
Fund also may borrow up to 5% of its total assets for temporary or emergency
purposes other than to provide cash to meet redemptions of Fund shares. Any
borrowing by a Fund may cause greater fluctuation in its net asset value than
would be the case if the Fund did not borrow.

Each Fund (except the Money Market Fund and the Strategic Income Fund) currently
is prohibited from borrowing money in order to purchase securities. In the event
that a Fund is permitted to employ leverage in the future, it would be subject
to certain additional risks. Use of leverage creates an opportunity for greater
growth of capital but would exaggerate any increases or decreases in the Fund's
net asset value. When the income and gains on securities purchased with the
proceeds of borrowings exceed the costs of such borrowings, the Fund's earnings
or net asset value will increase faster than otherwise would be the case;
conversely if such income and gains fail to exceed such costs, the Fund's
earnings or net asset value would decline faster than would otherwise be the
case.

Excluding the Money Market Fund, each Fund may enter into reverse repurchase
agreements. A reverse repurchase agreement is a borrowing transaction in which a
Fund transfers possession of a security to another party, such as a bank or
broker/dealer in return for cash, and agrees to repurchase the security in the
future at an agreed upon price, which includes an interest component. Reverse
repurchase agreements involve the risk that the market value of the securities
retained in lieu of sale by a Fund may decline below the price of the securities
the Fund had sold but is obligated to repurchase. In the event the buyer of
securities under a reverse repurchase agreement files for bankruptcy or becomes
insolvent, such buyer or its trustee or receiver may receive an extension of
time to determine whether to enforce the Fund's obligation to repurchase the
securities, and the Fund's use of the proceeds of the reverse repurchase
agreement may effectively be restricted pending such decision.

The Funds (except for the Latin America Fund and the Money Market Fund) also may
engage in "roll" borrowing transactions, which involve the sale of GNMA
certificates or other securities together with a commitment (for which a Fund
may receive a fee) to purchase similar, but not identical, securities at a
future date. Each Fund will maintain, in a segregated account with a custodian,
cash, U.S. government securities or other liquid, high grade debt securities in
an amount sufficient to cover its obligations under "roll" transactions and
reverse repurchase agreements with broker/dealers (but no segregation is
required for reverse repurchase agreements with banks).

The Strategic Income Fund also may enter into "dollar rolls," in which the Fund
sells fixed income securities for delivery in the current month, and
simultaneously contracts to repurchase substantially similar (same type, coupon
and maturity) securities on a specified future date. During the roll period, the
Strategic Income Fund would forego principal and interest paid on such
securities. The Strategic Income Fund would be compensated by the difference
between the current sales price and the forward price for the future purchase,
as well as by the interest earned on the cash proceeds of the initial sale.

SHORT SALES

The Funds (except for the Money Market Fund, the New Pacific Fund, the
International Fund, the Europe Fund and the America Fund) are authorized to make
short sales of securities, although they have no current intention of doing so.
However, the Strategic Income Fund, the Global Government Income Fund, the
Growth & Income Fund and the U.S. Government Income Fund may only make short
sales "against the box."

A short sale is a transaction in which a Fund sells a security in anticipation
that the market price of that security will decline. A Fund may make short sales
(i) as a form of hedging to offset potential

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

declines in long positions in securities it owns, or anticipates acquiring, or
in similar securities, and (ii) in order to maintain investment flexibility.
When a Fund makes a short sale of a security it does not own, it must borrow the
security sold short and deliver it to the broker-dealer or other intermediary
through which it made the short sale. The Fund may have to pay a fee to borrow
particular securities and will often be obligated to pay over any payments
received on such borrowed securities.

The Fund's obligation to replace the borrowed security when the borrowing is
called or expires will be secured by collateral (usually cash, U.S. government
securities or other highly liquid securities similar to those borrowed)
deposited with the intermediary. The Fund also will be required to deposit
similar collateral with its custodian to the extent necessary so that the value
of both collateral deposits in the aggregate is at all times equal to at least
100% of the current market value of the security sold short. Depending on
arrangements made with the intermediary from which it borrowed the security,
regarding payment of any amounts received by the Fund on such security, the Fund
may not receive any payments (including interest) on its collateral deposited
with such intermediary.

If the price of the security sold short increases between the time of the short
sale and the time the Fund replaces the borrowed security, the Fund will incur a
loss; conversely, if the price declines, the Fund will realize a gain. Any gain
will be decreased, and any loss increased, by the transaction costs associated
with the transaction. Although the Fund's gain is limited by the price at which
it sold the security short, its potential loss theoretically is unlimited.

The Infrastructure Fund, the Natural Resources Fund, the Telecommunications
Fund, the Emerging Markets Fund, and the Latin America Fund will not make a
short sale if, after giving effect to such sale, the market value of the
securities sold short exceeds 25% of the value of their respective total assets,
or their respective aggregate short sales of the securities of any one issuer
exceed the lesser of 2% of net assets or 2% of the securities of any class of
the issuer. Moreover, the Infrastructure Fund, the Natural Resources Fund, the
Telecommunications Fund and the Latin America Fund may engage in short sales
only with respect to securities listed on a national securities exchange. The
Funds might make a short sale "against the box" in order to hedge against market
risks when G.T. Capital believes that the price of a security may decline,
causing a decline in the value of a security owned by a Fund or a security
convertible into or exchangeable for such security, or when G.T. Capital wants
to sell the security a Fund owns at a current attractive price, but also wishes
to defer recognition of gain or loss for federal income tax purposes and for
purposes of satisfying certain tests applicable to regulated investment
companies, such as the Funds, under the Internal Revenue Code of 1986, as
amended ("Code"). In such case, any future losses in a Fund's long position
should be reduced by a gain in the short position. Conversely, any gain in the
long position should be reduced by a loss in the short position. The extent to
which such gains or losses in the long position are reduced will depend upon the
amount of the securities sold short relative to the amount of the securities the
Fund owns, either directly or indirectly, and, in the case where the Fund owns
convertible securities, changes in the investment values or conversion premiums
of such securities. There will be certain additional transaction costs
associated with short sales "against the box," but the respective Funds will
endeavor to offset these costs with income from the investment of the cash
proceeds of short sales.

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OPTIONS, FUTURES AND CURRENCY
STRATEGIES
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SPECIAL RISKS OF OPTIONS, FUTURES
AND CURRENCY STRATEGIES

The use of options, futures contracts and forward currency contracts ("Forward
Contracts") involves special considerations and risks, as described below. Risks
pertaining to particular instruments are described in the sections that follow.

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

(1) Successful use of most of these instruments depends upon G.T. Capital's
ability to predict movements of the overall securities and currency markets,
which requires different skills than predicting changes in the prices of
individual securities. While G.T. Capital is experienced in the use of these
instruments, there can be no assurance that any particular strategy adopted will
succeed.

(2) There might be imperfect correlation, or even no correlation, between price
movements of an instrument and price movements of the investments being hedged.
For example, if the value of an instrument used in a short hedge increased by
less than the decline in value of the hedged investment, the hedge would not be
fully successful. Such a lack of correlation might occur due to factors
unrelated to the value of the investments being hedged, such as speculative or
other pressures on the markets in which the hedging instrument is traded. The
effectiveness of hedges using hedging instruments on indices will depend on the
degree of correlation between price movements in the index and price movements
in the investments being hedged.

(3) Hedging strategies, if successful, can reduce risk of loss by wholly or
partially offsetting the negative effect of unfavorable price movements in the
investments being hedged. However, hedging strategies can also reduce
opportunity for gain by offsetting the positive effect of favorable price
movements in the hedged investments. For example, if a Fund entered into a short
hedge because G.T. Capital projected a decline in the price of a security in the
Fund's portfolio, and the price of that security increased instead, the gain
from that increase might be wholly or partially offset by a decline in the price
of the hedging instrument. Moreover, if the price of the hedging instrument
declined by more than the increase in the price of the security, the Fund could
suffer a loss. In either such case, the Fund would have been in a better
position had it not hedged at all.

(4) As described below, a Fund might be required to maintain assets as "cover,"
maintain segregated accounts or make margin payments when it takes positions in
instruments involving obligations to third parties (i.e., instruments other than
purchased options). If a Fund were unable to close out its positions in such
instruments, it might be required to continue to maintain such assets or
accounts or make such payments until the position expired or matured. The
requirements might impair the Fund's ability to sell a portfolio security or
make an investment at a time when it would otherwise be favorable to do so, or
require that the Fund sell a portfolio security at a disadvantageous time. The
Fund's ability to close out a position in an instrument prior to expiration or
maturity depends on the existence of a liquid secondary market or, in the
absence of such a market, the ability and willingness of the other party to the
transaction ("contra party") to enter into a transaction closing out the
position. Therefore, there is no assurance that any position can be closed out
at a time and price that is favorable to the Fund.

(5) These strategies might result in the loss of principal under certain
conditions. The Fund might need to defer closing out certain options, futures
contracts, options on futures contracts and Forward Contracts in order to
continue to qualify for the beneficial tax treatment afforded regulated
investment companies under the Internal Revenue Code of 1986, as amended. See
"Taxes."

WRITING CALL OPTIONS

All Funds, other than the Money Market Fund, may write (sell) call options on
securities, currencies and (except for the Strategic Income Fund, the Global
Government Income Fund and the U.S. Government Income Fund) stock indices. Call
options generally will be written on securities and currencies that, in the
opinion of G.T. Capital, are not expected to make any major price moves in the
near future but that, over the long term, are deemed to be attractive
investments for the Fund.

A call option gives the holder (buyer) the right to purchase a security or
currency at a specified price (the exercise price) at any time until (American
style) or on (European style) a certain date (the expiration date). As long as
the obligation of the writer of a call option continues, he may be assigned an
exercise notice, requiring him to deliver the underlying security or currency
against payment of the exercise price. This obligation terminates upon the
expiration of the call option, or such earlier time at which the writer effects
a closing purchase transaction by purchasing an option identical to that
previously sold.

Portfolio securities or currencies on which call options may be written will be
purchased solely

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

on the basis of investment considerations consistent with each Fund's investment
objective(s). When writing a call option, a Fund, in return for the premium,
gives up the opportunity for profit from a price increase in the underlying
security or currency above the exercise price, and retains the risk of loss
should the price of the security or currency decline. Unlike one who owns
securities or currencies not subject to an option, a Fund has no control over
when it may be required to sell the underlying securities or currencies, since
most options may be exercised at any time prior to the option's expiration. If a
call option that a Fund has written expires, the Fund will realize a gain in the
amount of the premium; however, such gain may be offset by a decline in the
market value of the underlying security or currency during the option period. If
the call option is exercised, the Fund will realize a gain or loss from the sale
of the underlying security or currency, which will be increased or offset by the
premium received. A Fund does not consider a security or currency covered by a
call option to be "pledged" as that term is used in the Fund's investment
limitations that limit the pledging or mortgaging of its assets.

Writing call options can serve as a limited short hedge because declines in the
value of the hedged investment would be offset to the extent of the premium
received for writing the option. However, if the security or currency
appreciates to a price higher than the exercise price of the call option, it can
be expected that the option will be exercised and a Fund will be obligated to
sell the security or currency at less than its market value.

The premium that a Fund receives for writing a call option is deemed to
constitute the market value of an option. The premium a Fund will receive from
writing a call option will reflect, among other things, the current market price
of the underlying investment, the relationship of the exercise price to such
market price, the historical price volatility of the underlying investment, and
the length of the option period. In determining whether a particular call option
should be written, G.T. Capital will consider the reasonableness of the
anticipated premium and the likelihood that a liquid secondary market will exist
for those options.

Closing transactions will be effected in order to realize a profit on an
outstanding call option, to prevent an underlying security or currency from
being called, or to permit the sale of the underlying security or currency.
Furthermore, effecting a closing transaction will permit a Fund to write another
call option on the underlying security or currency with either a different
exercise price or expiration date or both.

A Fund will pay transaction costs in connection with the writing of options and
in entering into closing purchase contracts. Transaction costs relating to
options activity normally are higher than those applicable to purchases and
sales of portfolio securities.

The exercise price of the options may be below, equal to or above the current
market values of the underlying securities or currencies at the time the options
are written. From time to time, a Fund may purchase an underlying security or
currency for delivery in accordance with the exercise of an option, rather than
delivering the security or currency currently held by it. In such cases,
additional costs will be incurred.

A Fund will realize a profit or loss from a closing purchase transaction if the
cost of the transaction is less or more, respectively, than the premium received
from writing the option. Because increases in the market price of a call option
generally will reflect increases in the market price of the underlying security
or currency, any loss resulting from the repurchase of a call option is likely
to be offset in whole or in part by appreciation of the underlying security or
currency owned by the Fund.

WRITING PUT OPTIONS

The Funds, other than the Money Market Fund, may write put options on
securities, currencies and (except for the Strategic Income Fund, the Global
Government Income Fund and the U.S. Government Income Fund) stock indices. A put
option gives the purchaser of the option the right to sell, and the writer
(seller) the obligation to buy, the underlying security or currency at the
exercise price at any time until (American style) or on (European style) the
expiration date. The operation of put options in other respects, including their
related risks and rewards, is substantially identical to that of call options.

A Fund generally would write put options in circumstances where G.T. Capital
wishes to purchase the underlying security or currency for the Fund at a price
lower than the current market price of the security or currency. In such

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

event, the Fund would write a put option at an exercise price that, reduced by
the premium received on the option, reflects the lower price it is willing to
pay. Since the Fund also would receive interest on debt securities or currencies
maintained to cover the exercise price of the option, this technique could be
used to enhance current return during periods of market uncertainty. The risk in
such a transaction would be that the market price of the underlying security or
currency would decline below the exercise price less the premiums received.

Writing put options can serve as a limited long hedge because increases in the
value of the hedged investment would be offset to the extent of the premium
received for writing the option. However, if the security or currency
depreciates to a price lower than the exercise price of the put option, it can
be expected that the put option will be exercised and a Fund will be obligated
to purchase the security or currency at more than its market value.

PURCHASING PUT OPTIONS

Each Fund, other than the Money Market Fund, may purchase put options on
securities, currencies and (except for the Strategic Income Fund, the Global
Government Income Fund and the U.S. Government Income Fund) stock indices. As
the holder of a put option, a Fund would have the right to sell the underlying
security or currency at the exercise price at any time until (American style) or
on (European style) the expiration date. A Fund may enter into closing sale
transactions with respect to such option, exercise such option or permit such
option to expire.

A Fund may purchase a put option on an underlying security or currency
("protective put") owned by the Fund as a hedging technique in order to protect
against an anticipated decline in the value of the security or currency. Such
hedge protection is provided only during the life of the put option when the
Fund, as the holder of the put option, is able to sell the underlying security
or currency at the put exercise price regardless of any decline in the
underlying security's market price or currency's exchange value. For example, a
put option may be purchased in order to protect unrealized appreciation of a
security or currency when G.T. Capital deems it desirable to continue to hold
the security or currency because of tax considerations. The premium paid for the
put option and any transaction costs would reduce any profit otherwise
realizable when the security or currency eventually is sold.

A Fund also may purchase put options at a time when the Fund does not own the
underlying security or currency. By purchasing put options on a security or
currency it does not own, a Fund seeks to benefit from a decline in the market
price of the underlying security or currency. If the put option is not sold when
it has remaining value, and if the market price of the underlying security or
currency remains equal to or greater than the exercise price during the life of
the put option, the Fund will lose its entire investment in the put option. In
order for the purchase of a put option to be profitable, the market price of the
underlying security or currency must decline sufficiently below the exercise
price to cover the premium and transaction costs, unless the put option is sold
in a closing sale transaction.

PURCHASING CALL OPTIONS

Each Fund, other than the Money Market Fund, may purchase call options on
securities, currencies and (except for the Strategic Income Fund, the Global
Government Income Fund and the U.S. Government Income Fund) stock indices. As
the holder of a call option, a Fund would have the right to purchase the
underlying security or currency at the exercise price at any time until
(American style) or on (European style) the expiration date. A Fund may enter
into closing sale transactions with respect to such option, exercise such option
or permit such option to expire.

Call options may be purchased by a Fund for the purpose of acquiring the
underlying security or currency for its portfolio. Utilized in this fashion, the
purchase of call options would enable a Fund to acquire the security or currency
at the exercise price of the call option plus the premium paid. At times the net
cost of acquiring the security or currency in this manner may be less than the
cost of acquiring the security or currency directly. This technique also may be
useful to the Funds in purchasing a large block of securities that would be more
difficult to acquire by direct market purchases. So long as it holds such a call
option, rather than the underlying security or currency itself, a Fund is
partially protected from any unexpected decline in the market price of the
underlying security or currency and, in such

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

event, could allow the call option to expire, incurring a loss only to the
extent of the premium paid for the option.

Each Fund also may purchase call options on underlying securities or currencies
it owns in order to protect unrealized gains on call options previously written
by it. A call option could be purchased for this purpose where tax
considerations make it inadvisable to realize such gains through a closing
purchase transaction. Call options also may be purchased at times to avoid
realizing losses that would result in a reduction of a Fund's current return.
For example, where a Fund has written a call option on an underlying security or
currency having a current market value below the price at which such security or
currency was purchased by the Fund, an increase in the market price could result
in the exercise of the call option written by the Fund and the realization of a
loss on the underlying security or currency. Accordingly, the Fund could
purchase a call option on the same underlying security or currency, which could
be exercised to fulfill the Fund's delivery obligations under its written call
(if it is exercised). This strategy could allow the Fund to avoid selling the
portfolio security or currency at a time when it has an unrealized loss;
however, the Fund would have to pay a premium to purchase the call option plus
transaction costs.

Aggregate premiums paid for put and call options will not exceed 5% of the
Fund's total assets at the time of purchase.

Each Fund may attempt to accomplish objectives similar to those involved in
using Forward Contracts by purchasing put or call options on currencies. A put
option gives a Fund as purchaser the right (but not the obligation) to sell a
specified amount of currency at the exercise price at any time until (American
style) or on (European style) the expiration date of the option. A call option
gives a Fund as purchaser the right (but not the obligation) to purchase a
specified amount of currency at the exercise price at any time until (American
style) or on (European style) the expiration date of the option. A Fund might
purchase a currency put option, for example, to protect itself against a decline
in the dollar value of a currency in which it holds or anticipates holding
securities. If the currency's value should decline against the dollar, the loss
in currency value should be offset, in whole or in part, by an increase in the
value of the put. If the value of the currency instead should rise against the
dollar, any gain to the Fund would be reduced by the premium it had paid for the
put option. A currency call option might be purchased, for example, in
anticipation of, or to protect against, a rise in the value against the dollar
of a currency in which the Fund anticipates purchasing securities.

Options may be either listed on an exchange or traded over-the-counter ("OTC").
Listed options are third-party contracts (i.e., performance of the obligations
of the purchaser and seller is guaranteed by the exchange or clearing
corporation), and have standardized strike prices and expiration dates. OTC
options are two-party contracts with negotiated strike prices and expiration
dates. A Fund will not purchase an OTC option unless it believes that daily
valuations for such options are readily obtainable. OTC options differ from
exchange-traded options in that OTC options are transacted with dealers directly
and not through a clearing corporation (which guarantees performance).
Consequently, there is a risk of non-performance by the dealer. Since no
exchange is involved, OTC options are valued on the basis of a quote provided by
the dealer. In the case of OTC options, there can be no assurance that a liquid
secondary market will exist for any particular option at any specific time.

The Securities and Exchange Commission (the "SEC") staff considers purchased OTC
options to be illiquid securities. A fund may also sell OTC options and, in
connection therewith, segregate assets or cover its obligations with respect to
OTC options written by the Fund. The assets used as cover for OTC options
written by a Fund will be considered illiquid unless the OTC options are sold to
qualified dealers who agree that the Fund may repurchase any OTC option it
writes at a maximum price to be calculated by a formula set forth in the option
agreement. The cover for an OTC option written subject to this procedure would
be considered illiquid only to the extent that the maximum repurchase price
under the formula exceeds the intrinsic value of the option.

A Fund's ability to establish and close out positions in exchange-listed options
depends on the existence of a liquid market. Each Fund intends to purchase or
write only those exchange-traded options for which there appears to be a liquid
secondary market. However, there can be no assurance that such a market will
exist at any

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

particular time. Closing transactions can be made for OTC options only by
negotiating directly with the contra party, or by a transaction in the secondary
market if any such market exists. Although each Fund will enter into OTC options
only with contra parties that are expected to be capable of entering into
closing transactions with the Fund, there is no assurance that the Fund will in
fact be able to close out an OTC option position at a favorable price prior to
expiration. In the event of insolvency of the contra party, the Fund might be
unable to close out an OTC option position at any time prior to its expiration.

INDEX OPTIONS

Puts and calls on indices are similar to puts and calls on securities or futures
contracts except that all settlements are in cash and gain or loss depends on
changes in the index in question (and thus on price movements in the securities
market or a particular market sector generally) rather than on price movements
in individual securities or futures contracts. When a Fund writes a call on an
index, it receives a premium and agrees that, prior to the expiration date, the
purchaser of the call, upon exercise of the call, will receive from the Fund an
amount of cash if the closing level of the index upon which the call is based is
greater than the exercise price of the call. The amount of cash is equal to the
difference between the closing price of the index and the exercise price of the
call times a specified multiple (the "multiplier"), which determines the total
dollar value for each point of such difference. When a Fund buys a call on an
index, it pays a premium and has the same rights as to such call as are
indicated above. When a Fund buys a put on an index, it pays a premium and has
the right, prior to the expiration date, to require the seller of the put, upon
the Fund's exercise of the put, to deliver to the Fund an amount of cash if the
closing level of the index upon which the put is based is less than the exercise
price of the put, which amount of cash is determined by the multiplier, as
described above for calls. When a Fund writes a put on an index, it receives a
premium and the purchaser has the right, prior to the expiration date, to
require the Fund to deliver to it an amount of cash equal to the difference
between the closing level of the index and the exercise price times the
multiplier, if the closing level is less than the exercise price.

The risks of investment in index options may be greater than options on
securities. Because index options are settled in cash, when a Fund writes a call
on an index it cannot provide in advance for its potential settlement
obligations by acquiring and holding the underlying securities. A Fund can
offset some of the risk of writing a call index option position by holding a
diversified portfolio of securities similar to those on which the underlying
index is based. However, a Fund cannot, as a practical matter, acquire and hold
a portfolio containing exactly the same securities as underlie the index and, as
a result, bears a risk that the value of the securities held will vary from the
value of the index.

Even if a Fund could assemble a securities portfolio that exactly reproduced the
composition of the underlying index, it still would not be fully covered from a
risk standpoint because of the "timing risk" inherent in writing index options.
When an index option is exercised, the amount of cash that the holder is
entitled to receive is determined by the difference between the exercise price
and the closing index level on the date when the option is exercised. As with
other kinds of options, the Fund as the call writer will not know that it has
been assigned until the next business day at the earliest. The time lag between
exercise and notice of assignment poses no risk for the writer of a covered call
on a specific underlying security, such as common stock, because there the
writer's obligation is to deliver the underlying security, not to pay its value
as of a fixed time in the past. So long as the writer already owns the
underlying security, it can satisfy its settlement obligations by simply
delivering it, and the risk that its value may have declined since the exercise
date is borne by the exercising holder. In contrast, even if the writer of an
index call holds securities that exactly match the composition of the underlying
index, it will not be able to satisfy its assignment obligations by delivering
those securities against payment of the exercise price. Instead, it will be
required to pay cash in an amount based on the closing index value on the
exercise date; and by the time it learns that it has been assigned, the index
may have declined, with a corresponding decline in the value of its securities
portfolio. This "timing risk" is an inherent limitation on the ability of index
call writers to cover their risk exposure by holding securities positions.

If a Fund has purchased an index option and exercises it before the closing
index value for that day is available, it runs the risk that the level of the
underlying index may subsequently change. If

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

such a change causes the exercised option to fall out-of-the-money, the Fund
will be required to pay the difference between the closing index value and the
exercise price of the option (times the applicable multiplier) to the assigned
writer.

INTEREST RATE, CURRENCY AND STOCK INDEX FUTURES CONTRACTS

The Funds, except for the Money Market Fund, may enter into interest rate or
currency futures contracts, and the Funds, except for the Strategic Income Fund,
the Global Government Income Fund, the U.S. Government Income Fund and the Money
Market Fund, may enter into stock index futures contracts ("Futures" or "Futures
Contracts"), as a hedge against changes in prevailing levels of interest rates,
currency exchange rates or stock price levels in order to establish more
definitely the effective return on securities or currencies held or intended to
be acquired by the Funds. The Funds' hedging may include sales of Futures as an
offset against the effect of expected increases in interest rates, or declines
in currency exchange rates or stock prices and purchases of futures as an offset
against the effect of expected declines in interest rates or increases in
currency exchange rates or stock prices.

The Funds only will enter into Futures Contracts that are traded on futures
exchanges and are standardized as to maturity date and underlying financial
instrument. Futures exchanges and trading thereon in the United States are
regulated under the Commodity Exchange Act by the Commodity Futures Trading
Commission ("CFTC"). Futures are exchanged in London at the London International
Financial Futures Exchange.

Although techniques other than sales and purchases of Futures Contracts could be
used to reduce the Funds' exposure to interest rate and currency exchange rate
fluctuations, a Fund may be able to hedge its exposure more effectively and at a
lower cost through using Futures Contracts.

A Futures Contract provides for the future sale by one party and purchase by
another party of a specified amount of a specific financial instrument (security
or currency) for a specified price at a designated date, time and place. A index
Futures Contract provides for the delivery, at a designated date, time and
place, of an amount of cash equal to a specified dollar amount times the
difference between the index value at the close of trading on the contract and
the price at which the Futures Contract is originally struck; no physical
delivery of the securities comprising the index is made. Brokerage fees are
incurred when a Futures Contract is bought or sold, and margin deposits must be
maintained at all times during which the Futures Contract is outstanding.

Although Futures Contracts typically require future delivery of and payment for
financial instruments or currencies, Futures Contracts usually are closed out
before the delivery date. Closing out an open Futures Contract sale or purchase
is effected by entering into an offsetting Futures Contract purchase or sale,
respectively, for the same aggregate amount of the identical financial
instrument or currency and the same delivery date. If the offsetting purchase
price is less than the original sale price, the Fund realizes a gain; if it is
more, the Fund realizes a loss. Conversely, if the offsetting sale price is more
than the original purchase price, the Fund realizes a gain; if it is less, the
Fund realizes a loss. The transaction costs also must be included in these
calculations. There can be no assurance, however, that the Funds will be able to
enter into an offsetting transaction with respect to a particular Futures
Contract at a particular time. If a Fund is not able to enter into an offsetting
transaction, the Fund will continue to be required to maintain the margin
deposits on the Futures Contract.

As an example of an offsetting transaction, the contractual obligations arising
from the sale of one Futures Contract of September Deutschemarks on an exchange
may be fulfilled at any time before delivery under the Futures Contract is
required (i.e., on a specified date in September, the "delivery month") by the
purchase of another Futures Contract of September Deutschemarks on the same
exchange. In such instance, the difference between the price at which the
Futures Contract was sold and the price paid for the offsetting purchase, after
allowance for transaction costs, represents the profit or loss to the Fund.

The Funds' Futures transactions will be entered into for hedging purposes; that
is, Futures Contracts will be sold to protect against a decline in the price of
securities or currencies that a Fund owns, or Futures Contracts will be
purchased to protect the Funds against an increase in the price of securities or
currencies it

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

has committed to purchase or expects to purchase.

"Margin" with respect to Futures Contracts is the amount of funds that must be
deposited by a Fund in order to initiate Futures trading and to maintain the
Fund's open positions in Futures Contracts. A margin deposit made when the
Futures Contract is entered into ("initial margin") is intended to ensure the
Fund's performance under the Futures Contract. The margin required for a
particular Futures Contract is set by the exchange on which the Futures Contract
is traded and may be significantly modified from time to time by the exchange
during the term of the Futures Contract.

Subsequent payments, called "variation margin," to and from the futures
commission merchant through which the Fund entered into the Futures Contract
will be made on a daily basis as the price of the underlying security, currency
or index fluctuates making the Futures Contract more or less valuable, a process
known as marking-to-market.

Risks of Using Futures Contracts. The prices of Futures Contracts are volatile
and are influenced by, among other things, actual and anticipated changes in
interest and currency rates, which in turn are affected by fiscal and monetary
policies and national and international political and economic events.

There is a risk of imperfect correlation between changes in prices of Futures
Contracts and prices of the Fund's securities or currencies being hedged. The
degree of imperfection of correlation depends upon circumstances such as:
variations in speculative market demand for Futures and for securities or
currencies, including technical influences in Futures trading; and differences
between the financial instruments being hedged and the instruments underlying
the standard Futures Contracts available for trading. A decision of whether,
when and how to hedge involves skill and judgment, and even a well-conceived
hedge may be unsuccessful to some degree because of unexpected market behavior
or interest or currency rate trends.

Because of the low margin deposits required, Futures trading involves an
extremely high degree of leverage. As a result, a relatively small price
movement in a Futures Contract may result in immediate and substantial loss, as
well as gain, to the investor. For example, if at the time of purchase, 10% of
the value of the Futures Contract is deposited as margin, a subsequent 10%
decrease in the value of the Futures Contract would result in a total loss of
the margin deposit, before any deduction for the transaction costs, if the
account were then closed out. A 15% decrease would result in a loss equal to
150% of the original margin deposit, if the Futures Contract were closed out.
Thus, a purchase or sale of a Futures Contract may result in losses in excess of
the amount invested in the Futures Contract.

Most U.S. futures exchanges limit the amount of fluctuation permitted in Futures
Contract and option on Futures Contract prices during a single trading day. The
daily limit establishes the maximum amount that the price of a Futures Contract
or option may vary either up or down from the previous day's settlement price at
the end of a trading session. Once the daily limit has been reached in a
particular type of Futures Contract or option, no trades may be made on that day
at a price beyond that limit. The daily limit governs only price movement during
a particular trading day and therefore does not limit potential losses, because
the limit may prevent the liquidation of unfavorable positions. Futures Contract
and option prices occasionally have moved to the daily limit for several
consecutive trading days with little or no trading, thereby preventing prompt
liquidation of positions and subjecting some traders to substantial losses.

If a Fund were unable to liquidate a Futures or option on Futures position due
to the absence of a liquid secondary market or the imposition of price limits,
it could incur substantial losses. The Fund would continue to be subject to
market risk with respect to the position. In addition, except in the case of
purchased options, the Fund would continue to be required to make daily
variation margin payments and might be required to maintain the position being
hedged by the Future or option or to maintain cash or securities in a segregated
account.

Certain characteristics of the Futures market might increase the risk that
movements in the prices of Futures Contracts or options on Futures might not
correlate perfectly with movements in the prices of the investments being
hedged. For example, all participants in the Futures and options on Futures
markets are subject to daily variation margin calls and might be compelled to
liquidate Futures or options on Futures positions

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

whose prices are moving unfavorably to avoid being subject to further calls.
These liquidations could increase price volatility of the instruments and
distort the normal price relationship between the Futures or options and the
investments being hedged. Also, because of initial margin deposit requirements
in the Futures market are less onerous than margin requirements in the
securities markets, there might be increased participation by speculators in the
Futures markets. This participation also might cause temporary price
distortions. In addition, activities of large traders in both the Futures and
securities markets involving arbitrage, "program trading" and other investment
strategies might result in temporary price distortions.

OPTIONS ON FUTURES CONTRACTS

Options on Futures Contracts are similar to options on securities or currencies
except that options on Futures Contracts give 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 short position if the option is a put) at a
specified exercise price at any time during the period of the option. Upon
exercise of the option, the delivery of the Futures position by the writer of
the option to the holder of the option will be accompanied by delivery of the
accumulated balance in the writer's Futures margin account, which represents the
amount by which the market price of the Futures Contract, at exercise, exceeds
(in the case of a call) or is less than (in the case of a put) the exercise
price of the option on the Futures Contract. If an option is exercised on the
last trading day prior to the expiration date of the option, the settlement will
be made entirely in cash equal to the difference between the exercise price of
the option and the closing level of the securities, currencies or index upon
which the Futures Contract is based on the expiration date. Purchasers of
options who fail to exercise their options prior to the exercise date suffer a
loss of the premium paid.

The purchase of call options on Futures can serve as a long hedge, and the
purchase of put options on Futures can serve as a short hedge. Writing call
options on Futures can serve as a limited short hedge, and writing put options
on Futures can serve as a limited long hedge, using a strategy similar to that
used for writing options on securities, foreign currencies or indices.

If a Fund writes an option on a Futures Contract, it will be required to deposit
initial and variation margin pursuant to requirements similar to those
applicable to Futures Contracts. Premiums received from the writing of an option
on a Futures Contract are included in the initial margin deposit.

A Fund may seek to close out an option position by selling an option covering
the same Futures Contract and having the same exercise price and expiration
date. The ability to establish and close out positions on such options is
subject to the maintenance of a liquid secondary market.

LIMITATION ON USE OF FUTURES, OPTIONS ON FUTURES AND CERTAIN OPTIONS ON
CURRENCIES

To the extent that a Fund enters into Futures Contracts, options on Futures
Contracts, and options on foreign currencies traded on a CFTC-regulated
exchange, in each case other than for bona fide hedging purposes (as defined by
the CFTC), the aggregate initial margin and premiums required to establish those
positions (excluding the amount by which options are "in-the-money") will not
exceed 5% of the liquidation value of a Fund's portfolio, after taking into
account unrealized profits and unrealized losses on any contracts the Fund has
entered into. In general, a call option on a Futures Contract is "in-the-money"
if the value of the underlying Futures Contract exceeds the strike, i.e.,
exercise, price of the call; a put option on a Futures Contract is
"in-the-money" if the value of the underlying Futures Contract is exceeded by
the strike price of the put. This guideline may be modified by each Fund's Board
of Trustee without a shareholder vote. This limitation does not limit the
percentage of a Fund's assets at risk to 5%.

FORWARD CURRENCY CONTRACTS

A Forward Contract is an obligation, usually arranged with a commercial bank or
other currency dealer, to purchase or sell a currency against another currency
at a future date and price as agreed upon by the parties. A Fund may either
accept or make delivery of the currency at the maturity of the Forward Contract.
A Fund may also, if its contra party agrees, prior to maturity, enter into a
closing transaction involving the purchase or sale of an offsetting contract.

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

A Fund engages in forward currency transactions in anticipation of, or to
protect itself against, fluctuations in exchange rates. A Fund might sell a
particular foreign currency forward, for example, when it holds bonds
denominated in a foreign currency but anticipates, and seeks to be protected
against, a decline in the currency against the U.S. dollar. Similarly, a Fund
might sell the U.S. dollar forward when it holds bonds denominated in U.S.
dollars but anticipates, and seeks to be protected against, a decline in the
U.S. dollar relative to other currencies. Further, a Fund might purchase a
currency forward to "lock in" the price of securities denominated in that
currency that it anticipates purchasing.

Forward 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. A Fund will enter into such Forward Contracts with major
U.S. or foreign banks and securities or currency dealers in accordance with
guidelines approved by that Fund's Board of Trustees.

A Fund may enter into Forward Contracts either with respect to specific
transactions or with respect to the overall investments of the Fund. The precise
matching of the Forward Contract amounts and the value of specific securities
generally will not be possible because the future value of such securities in
foreign currencies will change as a consequence of market movements in the value
of those securities between the date the Forward Contract is entered into and
the date it matures. Accordingly, it may be necessary for a Fund to purchase
additional foreign currency on the spot (i.e., cash) market (and bear the
expense of such purchase) if the market value of the security is less than the
amount of foreign currency the Fund is obligated to deliver and if a decision is
made to sell the security and make delivery of the foreign currency. Conversely,
it may be necessary to sell on the spot market some of the foreign currency the
Fund is obligated to deliver. The projection of short-term currency market
movements is extremely difficult, and the successful execution of a short-term
hedging strategy is highly uncertain. Forward Contracts involve the risk that
anticipated currency movements will not be predicted accurately, causing a Fund
to sustain losses on such contracts and transaction costs.

At or before the maturity of a Forward Contract requiring a Fund to sell a
currency, the Fund may either sell a security and use the sale proceeds to make
delivery of the currency or retain the security and offset its contractual
obligation to deliver the currency by purchasing a second contract pursuant to
which the Fund will obtain, on the same maturity date, the same amount of the
currency that it is obligated to deliver. Similarly, a Fund may close out a
Forward Contract requiring it to purchase a specified currency by, if its contra
party agrees, entering into a second Forward Contract entitling it to sell the
same amount of the same currency on the maturity date of the first Forward
Contract. The Fund would realize a gain or loss as a result of entering into
such an offsetting Forward Contract under either circumstance to the extent the
exchange rate or rates between the currencies involved moved between the
execution dates of the first Forward Contract and the offsetting Forward
Contract.

The cost to a Fund of engaging in Forward Contracts varies with factors such as
the currencies involved, the length of the contract period and the market
conditions then prevailing. Because Forward Contracts usually are entered into
on a principal basis, no fees or commissions are involved. The use of Forward
Contracts does not eliminate fluctuations in the prices of the underlying
securities a Fund owns or intends to acquire, but it does establish a rate of
exchange in advance. In addition, while Forward Contracts limit the risk of loss
due to a decline in the value of the hedged currencies, they also limit any
potential gain that might result should the value of the currencies increase.

FOREIGN CURRENCY STRATEGIES -- SPECIAL CONSIDERATIONS

A Fund may use options on foreign currencies, Futures on foreign currencies,
options on Futures on foreign currencies and Forward Contracts, to hedge against
movements in the values of the foreign currencies in which the Fund's securities
are denominated. Such currency hedges can protect against price movements in a
security that the Fund owns or intends to acquire that are attributable to
changes in the value of the currency in which it is denominated. Such hedges do
not, however, protect against price movements in the securities that are
attributable to other causes.

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

A Fund might seek to hedge against changes in the value of a particular currency
when no Futures Contract, Forward Contract or option involving that currency is
available or one of such contracts is more expensive than certain other
contracts. In such cases, the Fund may hedge against price movements in that
currency by entering into a contract on another currency or basket of
currencies, the values of which G.T. Capital believes will have a positive
correlation to the value of the currency being hedged. The risk that movements
in the price of the contract will not correlate perfectly with movements in the
price of the currency being hedged is magnified when this strategy is used.

The value of Futures Contracts, options on Futures Contracts, Forward Contracts
and options on foreign currencies depends on the value of the underlying
currency relative to the U.S. dollar. Because foreign currency transactions
occurring in the interbank market might involve substantially larger amounts
than those involved in the use of Futures Contracts, Forward Contracts or
options, a Fund could be disadvantaged by dealing in the odd lot market
(generally consisting of transactions of less than $1 million) for the
underlying foreign currencies at prices that are less favorable than for round
lots.

There is no systematic reporting of last sale information for foreign currencies
or any regulatory requirements that quotations available through dealers or
other market sources be firm or revised on a timely basis. Quotation information
generally is representative of very large transactions in the interbank market
and thus might not reflect odd-lot transactions where rates might be less
favorable. The interbank market in foreign currencies is a global, round-
the-clock market. To the extent the U.S. options or Futures markets are closed
while the markets for the underlying currencies remain open, significant price
and rate movements might take place in the underlying markets that cannot be
reflected in the markets for the Futures contracts or options until they reopen.

Settlement of Futures Contracts, Forward Contracts and options involving foreign
currencies might be required to take place within the country issuing the
underlying currency. Thus, a Fund might be required to accept or make delivery
of the underlying foreign currency in accordance with any U.S. or foreign
regulations regarding the maintenance of foreign banking arrangements by U.S.
residents and might be required to pay any fees, taxes and charges associated
with such delivery assessed in the issuing country.

COVER

Transactions using Forward Contracts, Futures Contracts and options (other than
options that a Fund has purchased) expose the Fund to an obligation to another
party. A Fund will not enter into any such transactions unless it owns either
(1) an offsetting ("covered") position in securities, currencies, or other
options, Forward Contracts or Futures Contracts, or (2) cash, receivables and
short-term debt securities with a value sufficient at all times to cover its
potential obligations not covered as provided in (1) above. Each Fund will
comply with SEC guidelines regarding cover for these instruments and, if the
guidelines so require, set aside cash, U.S. government securities or other
liquid, high-grade debt securities in a segregated account with its custodian in
the prescribed amount.

Assets used as cover or held in a segregated account cannot be sold while the
position in the corresponding Forward Contract, Futures Contract or option is
open, unless they are replaced with other appropriate assets. If a large portion
of a Fund's assets are used for cover or segregated accounts, it could affect
portfolio management or the Fund's ability to meet redemption requests or other
current obligations.

INTEREST RATE AND CURRENCY SWAPS

The Strategic Income Fund usually will enter into swaps on a net basis, that is,
the two payment streams are netted out in a cash settlement on the payment date
or dates specified in the instrument, with the Fund's receiving or paying, as
the case may be, only the net amount of the two payments. The net amount of the
excess, if any, of the Strategic Income Fund's obligations over its entitlements
with respect to each swap, will be accrued on a daily basis, and an amount of
cash, U.S. government securities or other liquid high grade debt obligations
having an aggregate net asset value at least equal to the accrued excess, will
be maintained in an account by a custodian that satisfies the requirement of the
1940 Act. The Strategic Income Fund will also establish and maintain such
segregated accounts with respect to its total obligations under any

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

swaps that are not entered into on a net basis and with respect to any caps or
floors that are written by the Fund. G.T. Capital and the Strategic Income Fund
believe that swaps, caps and floors do not constitute senior securities under
the 1940 Act and, accordingly, will not treat them as being subject to the
Fund's borrowing restrictions.

The Strategic Income Fund will not enter into any swap, cap, floor, collar or
other derivative transaction unless, at the time of entering into the
transaction, the unsecured long-term debt rating of the counterparty combined
with any credit enhancements is rated at least A by Moody's or S&P or has an
equivalent rating from a nationally recognized statistical rating organization
or is determined to be of equivalent credit quality by G.T. Capital. If a
counterparty defaults, the Strategic Income Fund may have contractual remedies
pursuant to the agreements related to the transactions. The swap market has
grown substantially in recent years, with a large number of banks and investment
banking firms acting both as principals and as agents utilizing standardized
swap documentation. As a result, the swap market has become relatively liquid.
Caps, floors and collars are more recent innovations for which standardized
documentation has not yet been fully developed, and, for that reason, they are
less liquid than swaps.

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RISK FACTORS

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Emerging Countries. Investing in securities in emerging countries may entail
greater risks than investing in securities in developed countries. These risks
include (i) less social, political and economic stability; (ii) the small
current size of the markets for such securities and the currently low or
nonexistent volume of trading, which result in a lack of liquidity and in
greater price volatility; (iii) certain national policies which may restrict the
Funds' respective investment opportunities, including restrictions on investment
in issuers or industries deemed sensitive to national interests; (iv) foreign
taxation; and (v) the absence of developed structures governing private or
foreign investment or allowing for judicial redress for injury to private
property. Investing in the securities of companies in emerging markets,
including the markets of Latin America and certain Asian markets such as Taiwan,
Malaysia and Indonesia, may entail special risks relating to the potential
political and economic instability and the risks of expropriation,
nationalization, confiscation or the imposition of restrictions on foreign
investment, convertibility of currencies into U.S. dollars and on repatriation
of capital invested. In the event of such expropriation, nationalization or
other confiscation by any country, a Fund could lose its entire investment in
any such country.

Settlement mechanisms in emerging securities markets may be less efficient and
reliable than in more developed markets. In such emerging securities markets
there may be share registration and delivery delays or failures.

Most Latin American countries have experienced substantial, and in some periods
extremely high, rates of inflation for many years. Inflation and rapid
fluctuations in inflation rates and corresponding currency devaluations have had
and may continue to have negative effects on the economies and securities
markets of certain Latin American countries.

Political, Social and Economic Risks. Investing in securities of non-U.S.
companies may entail additional risks due to the potential political, social and
economic instability of certain countries and the risks of expropriation,
nationalization, confiscation or the imposition of restrictions on foreign
investment; convertibility of currencies into U.S. dollars and on repatriation
of capital invested. In the event of such expropriation, nationalization or
other confiscation by any country, a Fund could lose its entire investment in
any such country.

An investment in a fund that invests in the emerging markets (including the
Latin America Fund, the Emerging Markets Fund, the Infrastructure Fund, the
Natural Resources Fund, the Strategic Income Fund and the International Fund) is
subject to the political and economic risks associated with investments in
emerging markets. Even though opportunities for investment may exist in emerging
markets, any change in the leadership or policies of the

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

governments of those countries or in the leadership or policies of any other
government which exercises a significant influence over those countries, may
halt the expansion, or reverse the liberalization, of foreign investment
policies now occurring and thereby eliminate any investment opportunities which
may currently exist.

Investors should note that upon the accession to power of authoritarian regimes,
the governments of a number of emerging market countries previously expropriated
large quantities of real and personal property similar to the property which
will be represented by the securities purchased by the Funds. The claims of
property owners against those governments were never finally settled. There can
be no assurance that any property represented by securities purchased by the
Funds will not also be expropriated, nationalized, or otherwise confiscated. If
such confiscation were to occur, a Fund could lose its entire investment in such
countries. A Fund's investments would similarly be adversely affected by
exchange control regulation in any of those countries.

Certain countries in which a Fund may invest may have groups that advocate
radical religious or revolutionary philosophies or support ethnic independence.
Any disturbance on the part of such individuals could carry the potential for
widespread destruction or confiscation of property owned by individuals and
entities foreign to such country and could cause the loss of a Fund's investment
in those countries. Instability may also result from, among other things: (i)
authoritarian governments or military involvement in political and economic
decision-making, including changes in government through extra-constitutional
means; (ii) popular unrest associated with demands for improved political,
economic and social conditions; and (iii) hostile relations with neighboring or
other countries. Such political, social and economic instability could disrupt
the principal financial markets in which the Fund invests and adversely affect
the value of a Fund's assets.

Sovereign Debt. Sovereign Debt generally offers high yields, reflecting not only
perceived credit risk, but also the need to compete with other local investments
in domestic financial markets. Certain Latin American countries are among the
largest debtors to commercial banks and foreign governments.

In recent years, some of the Latin American countries in which the Latin America
Fund and the Strategic Income Fund expect to invest have encountered
difficulties in servicing their Sovereign Debt. Some of these countries have
withheld payments of interest on and/or principal of Sovereign Debt. These
difficulties have also led to agreements to restructure external debt
obligations -- in particular, commercial bank loans, typically by rescheduling
principal payments, reducing interest rates and extending new credits to finance
interest payments on existing debt. In the future, holders of Sovereign Debt may
be requested to participate in similar reschedulings of such debt.

Illiquid Securities. Each Fund, other than the Money Market Fund, may invest up
to 15% of its net assets in illiquid securities. The Money Market Fund may
invest up to 10% of its net assets in illiquid securities. Securities may be
considered illiquid if a Fund cannot reasonably expect within seven days to sell
the security approximately the amount at which the Fund values such securities.
See "Investment Limitations." The sale of illiquid securities if they can be
sold at all, generally will require more time and result in higher brokerage
charges or dealer discounts and other selling expenses than the sale of liquid
securities such as securities eligible for trading on securities exchanges or in
the OTC markets. Moreover, restricted securities, which may be illiquid for
purposes of this limitation, often sell, if at all, at a price lower than
similar securities that are not subject to restrictions on resale.

Rule 144A under the Securities Act of 1933 ("1933 Act") establishes a "safe
harbor" from

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

the registration requirements of the 1933 Act for resales of certain securities
to qualified institutional buyers. Institutional markets for restricted
securities that might develop as a result of Rule 144A could provide both
readily ascertainable values for restricted securities and the ability to
liquidate an investment to satisfy share redemption orders. Such markets might
include automated systems for the trading, clearance and settlement of
unregistered securities of domestic and foreign issuers, such as the PORTAL
System sponsored by the National Association of Securities Dealers, Inc. An
insufficient number of qualified institutional buyers interested in purchasing
Rule 144A-eligible restricted securities held by the Funds, however, could
affect adversely the marketability of such portfolio securities, and,
consequently, the Funds might be unable to dispose of such securities promptly
or at favorable prices.

With respect to liquidity determinations generally, a Fund's Board of Trustees
has the ultimate responsibility for determining whether specific securities,
including restricted securities pursuant to Rule 144A under the 1933 Act, are
liquid or illiquid. G.T. Capital monitors the liquidity of securities in the
respective Funds' portfolios and periodically reports on such decisions to the
Boards of Trustees. G.T. Capital takes into account a number of factors in
reaching liquidity decisions, including, but not limited to: (i) the frequency
of trading in the security; (ii) the number of dealers who make quotes for the
security; (iii) the number of dealers who have undertaken to make a market in
the security; (iv) the number of other potential purchasers; and (v) the nature
of the security and how trading is effected (e.g., the time needed to sell the
security, how offers are solicited, and the mechanics of transfer). Religious,
Political or Ethnic Instability. Certain countries in which a Fund may invest
may have vocal minorities that advocate radical religious or revolutionary
philosophies or support ethnic independence. Any disturbance on the part of such
individuals could carry the potential for wide-spread destruction or
confiscation of property owned by individuals and entities foreign to such
country and could cause the loss of a Fund's investment in those countries.

Foreign Investment Restrictions. Certain countries prohibit or impose
substantial restrictions on investments in their capital markets, particularly
their equity markets, by foreign entities such as a Fund. These restrictions or
controls may at times limit or preclude investment in certain securities and may
increase the cost and expenses of a Fund. For example, certain countries require
prior governmental approval before to investments by foreign persons maybe made
or may limit the amount of investment by foreign persons in a particular
company, or limit the investment by foreign persons to only a specific class of
securities of a company that may have less advantageous terms than securities of
the company available for purchase by nationals. Moreover, the national policies
of certain countries may restrict investment opportunities in issuers or
industries deemed sensitive to national interests. In addition, some countries
require governmental approval for the repatriation of investment income, capital
or the proceeds of securities sales by foreign investors. In addition, if there
is a deterioration in a country's balance of payments, or for other reasons, a
country may impose restrictions on foreign capital remittances abroad. A Fund
could be adversely affected by delays in, or a refusal to grant, any required
governmental approval for repatriation, as well as by the application to it of
other restrictions on investments.

Non-Uniform Corporate Disclosure Standards and Governmental Regulation. Foreign
companies are subject to accounting, auditing and financial standards and
requirements that differ in some cases significantly from those applicable to
U.S. companies. In particular, the assets, liabilities and profits appearing on
the financial statements of such a company may not reflect its financial
position or results of operations in the way they would be reflected had such
financial statements been prepared in accordance with U.S. generally accepted
accounting principles. Most of the securities held by a Fund will not be
registered with the SEC or regulators of any foreign country, nor will the
issuers thereof be subject to the SEC's reporting requirements. Thus, there will
be less available information concerning foreign issuers of securities held by
the Fund than is available concerning U.S. issuers. In instances where the
financial statements of an issuer are not deemed to reflect accurately the
financial situation of the issuer, G.T. Capital will take appropriate steps to
evaluate the proposed investment, which may include on-site inspection of the
issuer, interviews with its management and consultations with accountants,
bankers and other

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specialists. There is substantially less publicly available information about
foreign companies than there are reports and ratings published about U.S.
companies and the U.S. government. In addition, where public information is
available, it may be less reliable than such information regarding U.S. issuers.
Issuers of securities on foreign jurisdictions are generally not subject to the
same degree of regulation as are U.S. issuers with respect to such matters as
restrictions on market manipulation, insider trading rules, shareholder proxy
requirements and timely disclosure of information.

Currency Fluctuations. Because each Fund (except the Money Market Fund), under
normal circumstances will invest a substantial portion, and the America Fund to
a lesser extent, of its total assets in the securities of foreign issuers which
are denominated in foreign currencies, the strength or weakness of the U.S.
dollar against such foreign currencies will account for a significant part of a
Fund's investment performance. A decline in the value of any particular currency
against the U.S. dollar will cause a decline in the U.S. dollar value of a
Fund's holdings of securities and cash denominated in such currency and,
therefore, will cause an overall decline in the Fund's net asset value and any
net investment income and capital gains derived from such securities to be
distributed in U.S. dollars to investors in the Fund. Moreover, if the value of
the foreign currencies in which a Fund receives its income falls relative to the
U.S. dollar between receipt of the income and the making of Fund distributions,
the Fund may be required to liquidate securities in order to make distributions
if the Fund has insufficient cash in U.S. dollars to meet distribution
requirements.

The rate of exchange between the U.S. dollar and other currencies is determined
by several factors including the supply and demand for particular currencies,
central bank efforts to support particular currencies, the movement of interest
rates, the pace of business activity in certain other countries, and the U.S.
and other economic and financial conditions affecting the world economy.

Although each Fund values its assets daily in terms of U.S. dollars, the Funds
do not intend to convert their holdings of foreign currencies into U.S. dollars
on a daily basis. Each Fund will do so, from time to time, and investors should
be aware of the costs of currency conversion. Although foreign exchange dealers
do not charge a fee for conversion, they do realize a profit based on the
difference ("spread") between the prices at which they are buying and selling
various currencies. Thus, a dealer may offer to sell a foreign currency to a
Fund at one rate, while offering a lesser rate of exchange should a Fund desire
to sell that currency to the dealer.

Adverse Market Characteristics. Securities of many foreign issuers may be less
liquid and their prices more volatile than securities of comparable U.S.
issuers. In addition, foreign securities markets and brokers generally are
subject to less governmental supervision and regulation than in the United
States, and foreign securities transactions usually are subject to fixed
commissions, which generally are higher than negotiated commissions on U.S.
transactions. In addition, foreign securities transactions may be subject to
difficulties associated with the settlement of such transactions. Delays in
settlement could result in temporary periods when assets of a Fund are
uninvested and no return is earned thereon. The inability of a Fund to make
intended security purchases due to settlement problems could cause the Fund to
miss attractive investment opportunities. Inability to dispose of a security due
to settlement problems either could result in losses to a Fund due to subsequent
declines in value of that security or, if a Fund has entered into a contract to
sell that security, could result in possible liability to the purchaser, G.T.
Capital will consider such difficulties when determining the allocation of each
Fund's assets, although G.T. Capital does not believe that such difficulties
will have a material adverse effect on a Fund's trading activities.

The Fund may use foreign custodians, which may involve risks in addition to
those related to the use of U.S. custodians. Such risks include uncertainties
relating to: (i) determining the financial strength, reputation and standing of
the foreign custodian; (ii) maintaining appropriate safeguards to protect the
Fund's investments and (iii) possible difficulties in obtaining and enforcing
judgments against such custodians.

Withholding Taxes. A Fund's net investment income from foreign issuers may be
subject to withholding taxes by the foreign issuer's country, thereby reducing
the Fund's net investment

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

income or delaying the receipt of income when those taxes may be recaptured. See
"Taxes."

Special Considerations Affecting Europe. The countries that are members of the
European Economic Community ("Common Market") (Belgium, Denmark, France, Greece,
Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, the United Kingdom and
Germany) eliminated certain import tariffs and quotas and other trade barriers
with respect to one another over the past several years. G.T. Capital believes
that this deregulation should improve the prospects for economic growth in many
European countries. Among other things, the deregulation could enable companies
domiciled in one country to avail themselves of lower labor costs existing in
other countries. In addition, this deregulation could benefit companies
domiciled in one country by opening additional markets for their goods and
services in other countries. Since, however, it is not clear at this time what
the exact form or effect of these Common Market reforms will be on business in
Western Europe or the emerging European markets, it is impossible to predict the
long-term impact of the implementation of these programs on the securities owned
by the Fund.

Special Considerations Affecting Japan and Hong Kong. The concentration of
investments by a Fund in Japan means that the Fund may be more volatile than a
fund that is broadly diversified geographically. Overseas trade is important to
Japan's economy. Japan has few natural resources and must export to pay for its
imports of these basic requirements. Because of the concentration of Japanese
exports in highly visible products, Japan has had difficult relations with its
trading partners, particularly the United States, where the trade imbalance is
the greatest. It is possible that trade sanctions or other protectionist
measures could impact Japan adversely in both the short and the long term. The
Japanese securities markets are less regulated than those in the United States.
Evidence has emerged from time to time of distortion of market prices to serve
political or other purposes. Shareholders' rights are not always equally
enforced.

Hong Kong is a British colony which will transfer sovereignty to the Peoples
Republic of China in 1997. China has espoused policies antagonistic to free
enterprise capitalism and democracy. There can be no guarantee that property
rights will continue to be safeguarded in Hong Kong after 1997, although
recently China has moved toward free enterprise, and has established stock
exchanges of its own.

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INVESTMENT LIMITATIONS

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Each Fund is subject to the following fundamental investment policies which
(unless otherwise noted) may not be changed without approval by the holders of
the lesser of (i) 67% or more of the outstanding shares of the Fund represented
at a shareholders' meeting at which more than 50% of the outstanding shares of
the Fund are represented at the meeting in person or by proxy, or (ii) more than
50% of the outstanding shares of the Fund.

NEW PACIFIC FUND, INTERNATIONAL FUND, EUROPE FUND AND AMERICA FUND

Fundamental Investment Limitations.

No Fund may:

(1) Invest in companies for the purpose of exercising control or management;

(2) Purchase or sell real estate; provided that a Fund may invest in
securities secured by real estate or interests therein or issued by companies
that invest in real estate or interests therein;

(3) Purchase or sell interests in oil, gas or other mineral exploration or
development programs, except that a Fund may invest in the securities of
companies that engage in these activities;

(4) Purchase or sell commodities or commodity contracts, except that a Fund
may purchase and sell financial and currency futures contracts and options
thereon, and may purchase and sell currency forward contracts, options on
foreign currencies and may otherwise engage in other transactions in foreign
currencies;

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

(5) Mortgage, pledge or in any other manner transfer as security for any
indebtedness, any of its assets except to secure permitted borrowings.
Collateral arrangements with respect to initial or variation margin for
futures contracts will not be deemed to be a pledge of a Fund's assets;

(6) Borrow money in excess of 33 1/3% of a Fund's total assets (including the
amount borrowed), less all liabilities and indebtedness (other than
borrowing). Transactions involving options, futures contracts, options on
futures contracts and forward currency contracts, and collateral arrangements
relating thereto will not be deemed to be borrowings;

(7) Purchase securities on margin or effect short sales, except that a Fund
may obtain such short-term credits as may be necessary for the clearance of
purchases or sales of securities and except in connection with the use of
options, futures contracts, options thereon or forward currency contracts. A
Fund may make deposits of margin in connection with futures and forward
contracts and options thereon;

(8) Participate on a joint or a joint and several basis in any trading account
in securities. (The "bunching" of orders for the sale or purchase of
marketable securities with other accounts under the management of G.T. Capital
to save brokerage costs or average prices among them is not deemed to result
in a securities trading account);

(9) Make loans, except that a Fund may purchase debt securities and enter into
repurchase agreements and make loans of securities;

(10) Purchase or retain the securities of an issuer if, to the knowledge of
the Fund, one or more of the Trustees or officers of that Company or G.T.
Capital individually own beneficially more than 1/2 of 1% of the securities of
such issuer and together own beneficially more than 5% of such securities;

(11) Underwrite securities of other issuers, except to the extent that, in
connection with the disposition of securities, a Fund may be deemed an
underwriter under federal or state securities laws; and

(12) Invest more than 25% of the value of a Fund's total assets in securities
of issuers conducting their principal business activities in any one industry,
except that this limitation shall not apply to securities issued or guaranteed
as to principal and interest by the U.S. government or any of its agencies or
instrumentalities.

For purposes of the concentration policy of the Fund contained in limitation
(12) above, the Fund intends to comply with the SEC staff position that
securities issued or guaranteed as to principal and interest by any single
foreign government or any supranational organizations in the aggregate are
considered to be securities of issuers in the same industry.

The following investment policies of each Fund, which are not fundamental
policies and may be changed by the Company's Board of Trustees without
shareholder or investor approval, are that each Fund will not:

(1) Invest more than 15% of its net assets in illiquid securities, a term
which means securities that cannot be disposed of within seven days in the
normal course of business at approximately the amount at which the Fund has
valued the securities and includes, among other things, repurchase agreements
maturing in more than seven days;

(2) Invest more than 5% of its assets in securities of companies which,
together with any predecessor, have been in operation for less than three
years;

(3) Borrow money except for temporary or emergency purposes (not for
leveraging) not in excess of 33 1/3% of the value of the Fund's total assets;
and

(4) Enter into a futures contract, an option on a futures contract, or an
option on foreign currency traded on a CFTC-regulated exchange, in each case
other than for bona fide hedging purposes (as defined by the CFTC), if the
aggregate initial margin and premiums required to establish all of these
positions (excluding the amount by which options are "in-the-money") exceeds
5% of the liquidation value of a Fund's portfolio, after taking into account
unrealized profits and unrealized losses on any contracts the Fund has entered
into.

A Fund will not knowingly exercise rights or otherwise acquire securities when
to do so would jeopardize the Fund's status under the 1940 Act as a diversified
investment company. A Fund may

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

exchange securities, exercise conversion or subscription rights, warranties, or
other rights to purchase common stock or other equity securities and may hold,
except to the extent limited by the 1940 Act, any such securities so acquired
without regard to the Fund's investment policies and restrictions. The original
cost of the securities so acquired will be included in any subsequent
determination of a Fund's compliance with the investment percentage limitations
referred to above and in the Funds' Prospectus.

INFRASTRUCTURE FUND, NATURAL RESOURCES FUND

Fundamental Investment Limitations.

Neither Fund may:

(1) Buy or sell real estate (including real estate limited partnerships);
however, each Fund may invest in debt securities secured by real estate or
interests therein or issued by companies which invest in real estate or
interests therein, including real estate investment trusts;

(2) Buy or sell commodities or commodity contracts, except that each Fund may
purchase and sell financial and currency futures contracts and options
thereon, and may purchase and sell currency forward contracts, options on
foreign currencies and may otherwise engage in other transactions in foreign
currencies;

(3) Underwrite securities of other issuers, except to the extent that the
disposition of an investment position may technically cause it to be
considered an underwriter as that term is defined under the Securities Act of
1933;

(4) Make loans, except that each Fund may purchase debt securities and enter
into repurchase agreements and may make loans of portfolio securities;

(5) Purchase securities on margin, provided that each Fund may obtain such
short-term credits as may be necessary for the clearance of purchases and
sales of securities; except that it may make margin deposits in connection
with futures contracts;

(6) Borrow money except from banks not in excess of 33 1/3% of the value of
each Fund's total assets, (including the amount borrowed), less all
liabilities and indebtedness (other than the borrowing). This restriction
shall not prevent either Fund from entering into reverse repurchase
agreements, provided that reverse repurchase agreements, and any other
transactions constituting borrowing by a Fund may not exceed one-third of that
Fund's total assets. Transactions involving options, futures contracts,
options on futures contracts and forward currency contracts, as described in
the Prospectus and Statement of Additional Information, and collateral
arrangements relating thereto will not be deemed to be borrowings;

(7) Mortgage, pledge, or hypothecate any of its assets, provided that this
restriction shall not apply to the transfer of securities in connection with
any permissible borrowing or to collateral arrangements in connection with
permissible activities; or

(8) Invest in direct interests or leases in oil, gas, or other mineral
exploration or development programs; however, each Fund may invest in the
securities of companies that engage in these activities.

In addition, each Fund has adopted as a fundamental investment policy a
classification as a "diversified" investment company under the 1940 Act. This
means that, with respect to 75% of the Fund's total assets, no more than 5% will
be invested in the securities of any one issuer, and the Fund will purchase no
more than 10% of the outstanding voting securities of any one issuer. This
policy cannot be changed without approval by the holders of a majority of the
Fund's outstanding voting securities as defined above and in the Prospectus.

The following investment policies of each Fund are not fundamental policies and
may be changed by vote of the Company's Board of Trustees without shareholder
approval. Neither Fund may:

(1) Invest in securities of an issuer if the investment would cause the Fund
to own more than 10% of any class of securities of any one issuer;

(2) Invest in companies for the purpose of exercising control or management;

(3) Invest more than 15% of its net assets in illiquid securities, including
securities that are illiquid by virtue of the absence of a readily available
market;

(4) Invest more than 5% of its total assets in securities of companies having,
together with

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

their predecessors, a record of less than three years of continuous operation;

(5) Purchase or retain the securities of any issuer, if those individual
officers and Trustees of the Company, the Fund's investment adviser, or
distributor, each owning beneficially more than 1/2 of 1% of the securities of
such issuer, together own more than 5% of the securities of such issuer;

(6) Enter into a futures contract, an option on a futures contract, or an
option on foreign currency traded on a CFTC-regulated exchange, in each case
other than for bona fide hedging purposes (as defined by the CFTC), if the
aggregate initial margin and premiums required to establish all of those
positions (excluding the amount by which options are "in-the-money") exceeds
5% of the liquidation value of a Fund's portfolio, after taking into account
unrealized profits and unrealized losses on any contracts the Fund has entered
into;

(7) Borrow money except for temporary or emergency purposes (not for
leveraging) in excess of 33 1/3% of the value of the Fund's total assets.
While borrowings exceed 5% of the Infrastructure Fund's or Natural Resources
Fund's total assets, such Fund will not make any additional investments; and

(8) Invest more than 10% of its total assets in shares of other investment
companies and may not invest more than 5% of its total assets in any one
investment company or acquire more than 3% of the outstanding voting
securities of any one investment company.

TELECOMMUNICATIONS FUND

Fundamental Investment Limitations.

The Fund may not:

(1) Invest 25% or more of the value of its total assets in the securities of
issuers conducting their principal business activities in the same industry,
other than the telecommunications industry, except that this limitation shall
not apply to securities issued or guaranteed as to principal and interest by
the U.S. government or any of its agencies or instrumentalities;

(2) Buy or sell real estate (including real estate limited partnerships);
however, the Fund may invest in debt securities secured by real estate or
interests therein or issued by companies which invest in real estate or
interests therein, including real estate investment trusts;

(3) Purchase or sell commodities or commodity contracts, except that the Fund
may purchase and sell financial and currency futures contracts and options
thereon, and may purchase and sell currency forward contracts, options on
foreign currencies and may otherwise engage in other transactions in foreign
currencies.

(4) Engage in the business of underwriting securities of other issuers, except
to the extent that the disposition of an investment position may technically
cause it to be considered an underwriter as that term is defined under the
Securities Act of 1933;

(5) Make loans, except that the Fund may purchase debt securities and enter
into repurchase agreements and may make loans of securities;

(6) Purchase securities on margin, provided that the Fund may obtain such
short-term credits as may be necessary for the clearance of purchases and
sales of securities except that it may make margin deposits in connection with
futures contracts;

(7) Borrow money except from banks not in excess of 33 1/3% of the value of
the Fund's total assets, including the amount borrowed, less all liabilities
and indebtedness (other than the borrowing). This restriction shall not
prevent the Fund from entering into reverse repurchase agreements, provided
that reverse repurchase agreements, and any other transactions constituting
borrowing by the Fund may not exceed one-third of the Fund's total assets,
respectively. Transactions involving options, futures contracts, options on
futures contracts and forward currency contracts, as described in the Funds'
Prospectus and Statement of Additional Information, and collateral
arrangements relating thereto will not be deemed to be borrowings;

(8) Mortgage, pledge, or hypothecate any of its assets, provided that this
restriction shall not apply to the transfer of securities in connection with
any permissible borrowing or to collateral arrangements in connection with
permissible activities; or

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

(9) Invest in direct interests or leases in oil, gas, or other mineral
exploration or development programs; however, the Fund may invest in the
securities of companies that engage in these activities.

In addition, the Fund has adopted as a fundamental investment policy to be
classified as a "diversified" investment company under the 1940 Act. This means
that, with respect to 75% of the Fund's total assets, respectively, no more than
5% will be invested in the securities of any one issuer, and the Fund will
purchase no more than 10% of the outstanding voting securities of any one
issuer. This policy cannot be changed without the approval by the holders of a
majority of the outstanding voting securities of the Fund, as defined above and
in the Funds' Prospectus.

For purposes of the concentration policy contained in limitation (1) above, the
Telecommunications Fund intends to comply with the SEC staff position that
securities issued or guaranteed as to principal and interest by any single
foreign government or any supranational organizations in the aggregate are
considered to be securities of issuers in the same industry.

The following investment policies of the Fund, which are not fundamental
policies and may be changed by the Company's Board of Trustees without
shareholder approval, are that the Fund will not:

(1) Invest in securities of an issuer if the investment would cause the Fund
to own more than 10% of any class of securities of any one issuer;

(2) Invest in companies for the purpose of exercising control or management;

(3) Invest more than 15% of its net assets in illiquid securities, including
securities that are illiquid by virtue of the absence of a readily available
market;

(4) Invest more than 5% of its total assets in securities of companies having,
together with their predecessors, a record of less than three years of
continuous operation;

(5) Purchase or retain the securities of any issuer, if those individual
officers and Trustees of the Company, the Fund's investment adviser or
distributor, each owning beneficially more than 1/2 of 1% of the securities of
such issuer, together own more than 5% of the securities of such issuer;

(7) Borrow money except for temporary or emergency purposes (not for
leveraging) not in excess of 33 1/3% of the value of the Fund's total assets.
While borrowings exceed 5% of the Fund's total assets, the Fund will not make
any additional investments.

EMERGING MARKETS FUND

Fundamental Investment Limitations.

The Fund may not:

(1) Invest 25% or more of the value of its total assets in the securities of
issuers conducting their principal business activities in the same industry,
except that this limitation shall not apply to securities issued or guaranteed
as to principal and interest by the U.S. Government or any of its agencies or
instrumentalities;

(2) Purchase or sell real estate, provided that the Fund may invest in
securities secured by real estate or interests therein or issued by companies
that invest in real estate or interests therein;

(4) Underwrite securities of other issuers, except to the extent that, in
connection with the disposition of portfolio securities, the Fund may be
deemed an underwriter under federal or state securities laws;

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

(5) Make loans, except that the Fund may purchase debt securities and enter
into repurchase agreements and make loans of portfolio securities;

(6) Purchase securities on margin, provided that the Fund may obtain such
short-term credits as may be necessary for the clearance of purchases and
sales of securities; except that it may make margin deposits in connection
with the use of options, futures contracts, options thereon or forward
currency contracts. The Fund may make deposits of margin in connection with
futures and forward contracts and options thereon;

(7) Borrow money in excess of 33 1/3% of the Fund's total assets (including
the amount borrowed), less all liabilities and indebtedness (other than
borrowing). Transactions involving options, futures contracts, options on
futures contracts and forward currency contracts, and collateral arrangements
relating thereto will not be deemed to be borrowings;

(8) Mortgage, pledge, or in any other manner transfer as security for any
indebtedness any of its assets, except to secure permitted borrowings.
Collateral arrangements with respect to initial or variation margin for
futures contracts will not be deemed to be a pledge of the Fund's assets;

(9) Invest in direct interests or leases in oil, gas, or other mineral
exploration or development programs, however, the Fund may invest in
securities of companies that engage in these activities; or

(10) With respect to 75% of its total assets, invest more than 5% of its
assets in the securities of any one issuer or purchase more than 10% of the
outstanding voting securities of any one issuer.

For purposes of concentration policy of the Fund contained in limitation (1)
above, the Fund intends to comply with the SEC staff position that securities
issued or guaranteed as to principal and interest by any single foreign
government or any supranational organizations in the aggregate are considered to
be securities of issuers in the same industry.

The following operating policies of the Fund are not fundamental policies and
may be changed by vote of a majority of the Company's Board of Trustees without
shareholder approval. The Fund may not:

(1) Invest in securities of an issuer if the investment would cause the Fund
to own more than 10% of any class of securities of any one issuer;

(2) Invest in companies for the purpose of exercising control or management;

(3) Purchase or retain the securities of any issuer, if, to the Fund's
knowledge, one or more of the officers or Trustees of the Fund, its investment
adviser, or distributor, each own beneficially more than 1/2 of 1% of the
securities of such issuer and together own beneficially more than 5% of the
securities of such issuer;

(4) Enter into a futures contract, an option on a futures contract, or an
option on foreign currency traded on a CFTC-regulated exchange, in each case
other than for bona fide hedging purposes (as defined by the CFTC), if the
aggregate initial margin and premiums required to establish all of those
positions (excluding the amount by which options are "in-the-money") exceeds
5% of the liquidation value of a Fund's portfolio, after taking into account
unrealized profits and unrealized losses on any contracts the Fund has entered
into;

(5) Borrow money, except for temporary or emergency purposes (not for
leveraging) not in excess of 33 1/3% of the value of the Fund's total assets
and except that the Fund may purchase securities when outstanding borrowings
represent no more than 5% of the Fund's assets;

(6) Invest more than 5% of its total assets in securities of companies having,
together with their predecessors, a record of less than three years of
continuous operation; or

(7) Invest more than 10% of its total assets in securities that are restricted
as to resale without registration under the 1933 Act.

LATIN AMERICA FUND

Fundamental Investment Limitations.

The Fund may not:

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

principal and interest by the U.S. government or any of its agencies or
instrumentalities;

(2) Buy and sell real estate (including real estate limited partnerships) or
commodities or commodity contracts; however, the Fund may invest in debt
securities secured by real estate or interests therein or issued by companies
which invest in real estate or interests therein, including real estate
investment trusts, and may purchase or sell currencies (including forward
currency exchange contracts), futures contracts and related options generally
as described in the Funds' Prospectus and Statement of Additional Information;

(3) Engage in the business of underwriting securities of other issuers, except
to the extent that the disposal of an investment position
may technically cause it to be considered an underwriter as that term is
defined under the Securities Act of 1933;

(4) Make loans, except that the Fund may purchase debt securities and enter
into repurchase agreements and may make loans of securities;

(5) Purchase securities on margin, provided that the Fund may obtain such
short-term credits as may be necessary for the clearance of purchases and
sales of securities; except that it may make margin deposits in connection
with futures contracts;

(6) Borrow money except from banks for temporary or emergency purposes not in
excess of 33 1/3% of the value of the Fund's total assets (at the lower of
cost or fair market value). The Fund will not purchase securities while
borrowings (including reverse repurchase agreements) in excess of 5% of total
assets are outstanding. This restriction shall not prevent the Fund from
entering into reverse repurchase agreements provided that reverse repurchase
agreements, and any other transactions constituting borrowing by the Fund, may
not exceed one-third of the Fund's total assets. In the event that the asset
coverage for the Fund's borrowings falls below 300%, the Fund will reduce,
within three days (excluding Sundays and holidays), the amount of its
borrowings in order to provide for 300% asset coverage;

(8) Invest in direct interests or leases in oil, gas, or other mineral
exploration or development programs; however, the Fund may invest in the
securities of companies that engage in these activities.

For purposes of the concentration policy of the Fund contained in limitation
(1), above, the Fund intends to comply with the SEC staff position that
securities issued or guaranteed as to principal and interest by any single
foreign government or any supranational organizations in the aggregate are
considered to be securities of issuers in the same industry.

The following investment policies of the Fund, which are not fundamental
policies and may be changed by the Company's Board of Trustees, without
shareholder or investor approval, are that the Fund will not:

(1) Invest in securities of an issuer if the investment would cause the Fund
to own more than 10% of any class of securities of any one issuer;

(2) Invest in companies for the purpose of exercising control or management;

(3) Invest more than 15% of its net assets in illiquid securities, including
securities that are illiquid by virtue of the absence of a readily available
market;

(4) Invest more than 5% of its total assets in securities of companies having,
together with their predecessors, a record of less than three years of
continuous operation;

(5) Purchase or retain the securities of any issuer, if those individual
officers and Trustees of the Company, the Fund or the Fund's investment
adviser, or distributor, each owning beneficially more than 1/2 of 1% of the
securities of such issuer, together own more than 5% of the securities of such
issuer; or

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

Statement of Additional Information Page 37
<PAGE> 92
- --------------------------------------------------------------------------------
------------------------------------------------
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

"in-the-money") exceeds 5% of the liquidation value of a Fund's portfolio,
after taking into account unrealized profits and unrealized losses on any
contracts the Fund has entered into.

GROWTH & INCOME FUND

Fundamental Investment Limitations.

The Fund may not:

(1) Invest 25% or more of the value of its total assets in the securities of
issuers conducting their principal business activities in the same industry,
except that this limitation shall not apply to securities issued or guaranteed
as to principal and interest by the U.S. government or any of its agencies or
instrumentalities;

(2) Invest in companies for the purpose of exercising control or management;

(3) Buy or sell real estate (including real estate limited partnerships) or
commodities or commodity contracts; however, the Fund may invest in debt
securities secured by real estate or interests therein or issued by companies
which invest in real estate or interests therein, including real estate
investment trusts, and may purchase or sell currencies (including forward
currency exchange contracts), futures contracts and related options generally
as described in the Funds' Prospectus and Statement of Additional information
and subject to investment policy (4) below;

(4) Acquire securities subject to restrictions on disposition or securities
for which there is no readily available market, or enter into repurchase
agreements or purchase time deposits maturing in more than seven days, or
purchase over-the-counter options or hold assets set aside to cover
over-the-counter options written by the Fund, if, immediately after and as a
result, the value of such securities would exceed, in the aggregate, 15% of
the Fund's net assets;

(5) Engage in the business of underwriting securities of other issuers, except
to the extent that the disposal of an investment position may technically
cause it to be considered an underwriter as that term is defined under the
Securities Act of 1933;

(6) Make loans, except that the Fund may purchase debt securities and enter
into repurchase agreements and make loans of securities;

(7) Purchase securities on margin, provided that the Fund may obtain such
short-term credits as may be necessary for the clearance of purchases and
sales of securities, except that it may make margin deposits in connection
with futures contracts subject to investment policy (4) below;

(8) Borrow money except from banks for temporary or emergency purposes not in
excess of 33 1/3% of the value of the Fund's total assets (at the lower of
cost or fair market value). The Fund will not purchase securities while
borrowings in excess of 5% of total assets are outstanding. This restriction
shall not prevent the Fund from entering into reverse repurchase agreements
and engaging in "roll" transactions, provided that reverse repurchase
agreements, "roll" transactions and any other transactions constituting
borrowing by the Fund may not exceed one-third of the Fund's total assets. In
the event that the asset coverage for the Fund's borrowings falls below 300%,
the Fund will reduce, within three days (excluding Sundays and holidays), the
amount of its borrowings in order to provide for 300% asset coverage;

(9) Mortgage, pledge, or hypothecate any of its assets, provided that this
restriction shall not apply to the transfer of securities in connection with
any permissible borrowing or to collateral arrangements in connection with
permissible activities;

(10) Invest in interests in oil, gas, or other mineral exploration or
development programs; or

(11) Purchase or retain the securities of any issuer, if those individual
officers and Trustees of the Company, the Fund or the Fund's investment
adviser, or distributor, each owning beneficially more than 1/2 of 1% of the
securities of such issuer, together own more than 5% of the securities of such
issuer.

(1) Invest in securities of an issuer if the investment would cause the Fund
to own more than 10% of any class of securities of any one issuer;

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

Statement of Additional Information Page 38
<PAGE> 93
- --------------------------------------------------------------------------------
------------------------------------------------
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

(2) Sell securities short, except to the extent that the Fund
contemporaneously owns or has the right to acquire at no additional cost
securities identical to those sold short;

(3) Invest more than 5% of its total assets in securities of companies having,
together with their predecessors, a record of less than three years of
continuous operation; or

(4) Enter into a futures contract, an option on a futures contract, or an
option on foreign currency traded on a CFTC-regulated exchange, in each case
other than for bona fide hedging purposes (as defined by the CFTC), if the
aggregate initial margin and premiums required to establish all of those
positions (excluding the amount by which options are "in-the-money") exceeds
5% of the liquidation value of a Fund's portfolio, after taking into account
unrealized profits and unrealized losses on any contracts the Fund has entered
into.

STRATEGIC INCOME FUND

Fundamental Investment Limitations.

The Fund may not:

(1) Invest 25% or more of the value of its total assets in the securities of
issuers conducting their principal business activities in the same industry,
except that this limitation shall not apply to securities issued or guaranteed
as to principal and interest by the U.S. government or any of its agencies or
instrumentalities;

(2) Invest in companies for the purpose of exercising control or management;

(3) Buy or sell real estate (including real estate limited partnerships) or
commodities or commodity contracts; however the Fund may invest in debt
securities secured by real estate or interests therein or issued by companies
which invest in real estate or interests therein, including real estate
investment trusts, and may purchase or sell currencies (including forward
currency exchange contracts), futures contracts and related options generally
as described in the Funds' Prospectus and Statement of Additional Information
and subject to (13) below;

(4) Engage in the business of underwriting securities of other issuers, except
to the extent that the disposal of an investment position may technically
cause it to be considered an underwriter as that term is defined under the
Securities Act of 1933;

(5) Make loans, except that the Fund may invest in loans and participations,
purchase debt securities and enter into repurchase agreements and make loans
of securities;

(6) Sell securities short, except to the extent that the Fund
contemporaneously owns or has the right to acquire at no additional cost
securities identical to those sold short;

(7) Purchase securities on margin provided that the Fund may obtain such
short-term credits as may be necessary for the clearance of purchases and
sales of securities, except that the Fund may make margin deposits in
connection with futures contracts subject to (13) below;

(8) Borrow money in excess of 33 1/3% of the Fund's total assets (including
the amount borrowed), less all liabilities and indebtedness (other than
borrowing). The restriction shall not prevent the Fund from entering into
reverse repurchase agreements and engaging in "roll" transactions, provided
that reverse repurchase agreements, "roll" transactions and any other
transactions constituting borrowing by the Fund may not exceed one-third of
the Fund's total assets. In the event that the asset coverage for the Fund's
borrowings fall below 300%, the Fund, as the case may be, will reduce, within
three days (excluding Sundays and holidays), the amount of its borrowings in
order to provide for 300% asset coverage. Transactions involving options,
futures contracts, options on futures contracts and forward currency
contracts, and collateral arrangements relating thereto will not be deemed to
be borrowings;

(9) Mortgage or hypothecate any of its assets, provided that this restriction
shall not apply to the transfer of securities in connection with any
permissible borrowing;

(10) Invest in interests in oil, gas or other mineral exploration or
development programs;

(11) Invest more than 5% of its total assets in securities of companies
having, together with predecessors, a record of less than three years of
continuous operation;

(12) Purchase or retain the securities of any issuer, if those individual
officers and Trustees of the Company, the Fund or the Fund's

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

Statement of Additional Information Page 39
<PAGE> 94
- --------------------------------------------------------------------------------
------------------------------------------------
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

investment adviser, or distributor, each owning beneficially more than 1/2 of
1% of the securities of such issuer, together own more than 5% of the
securities of such issuer; or

(13) Enter into a futures contract if, as a result thereof, more than 5% of
the Fund's total assets (taken at market value at the time of entering into
the contract), would be committed to margin on such futures contracts.

For purposes of the Fund's concentration policy contained in limitation (1)
above, the Fund intends to comply with the SEC staff position that securities
issued or guaranteed as to principal and interest by any single foreign
government or any supranational organizations in the aggregate are considered to
be securities of issuers in the same industry.

The following investment policies of the Fund, which are not fundamental
policies and may be changed by action of the Company's Board of Trustees,
without shareholder or investor approval, are that the Fund will not:

(1) Invest more than 15% of its net assets in illiquid securities; or

(2) Invest in securities of an issuer if the investment would cause the Fund
to own more than 10% of any class of securities of any one issuer.

GLOBAL GOVERNMENT INCOME FUND

Fundamental Investment Limitations.

The Fund may not:

(1) Invest 25% or more of the value of its total assets in the securities of
issuers conducting their principal business activities in the same industry,
except that this limitation shall not apply to securities issued or guaranteed
as to principal and interest by the U.S. government or any of its agencies or
instrumentalities;

(2) Invest in companies for the purpose of exercising control or management;

(4) Acquire securities subject to restrictions on disposition of securities
for which there is no readily available market, or enter into repurchase
agreements or purchase time deposits maturing in more than seven days, or
purchase over-the-counter options or hold assets set aside to cover
over-the-counter options written by the Fund, if, immediately after and as a
result, the value of such securities would exceed, in the aggregate, 15% of
the Fund's net assets;

(6) Make loans, except that the Fund may purchase debt securities and enter
into repurchase agreements and make loans of securities;

(7) Sell securities short, except to the extent that the Fund
contemporaneously owns or has the right to acquire at no additional cost
securities identical to those sold short;

(8) Purchase securities on margin, provided that the Fund may obtain such
short-term credits as may be necessary for the clearance of purchases and
sales of securities, except that the Fund may make margin deposits in
connection with futures contracts subject to (14) below;

(9) Borrow money, except from banks or for temporary or emergency purposes not
in excess of 30% of the value of the Fund's total assets. The Fund will not
purchase securities while such borrowings are outstanding. This restriction
shall not prevent the Fund from entering into reverse repurchase agreements
and engaging in "roll" transactions, provided that reverse repurchase
agreements, "roll" transactions and any other transactions constituting
borrowing by the Fund may not exceed one-third of the Fund's total assets. In
the event that the asset coverage for the Fund's borrowings falls below 300%,
the Fund will reduce, within three days (excluding Sundays

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

Statement of Additional Information Page 40
<PAGE> 95
- --------------------------------------------------------------------------------
------------------------------------------------
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

and holidays), the amount of its borrowings in order to provide for 300% asset
coverage;

(10) Mortgage, pledge, or hypothecate any of its assets, provided that this
restriction shall not apply to the transfer of securities in connection with
any permissible borrowing;

(11) Invest in interests in oil, gas, or other mineral exploration or
development programs;

(12) Invest more than 5% of its total assets in securities of companies
having, together with their predecessors, a record of less than three years of
continuous operation;

(13) Purchase or retain the securities of any issuer, if those individual
officers and Trustees of the Company, the Fund or the Fund's investment
adviser, or distributor, each owning beneficially more than 1/2 of 1% of the
securities of such issuer, together own more than 5% of the securities of such
issuer; or

(14) Enter into a futures contract if, as a result thereof, more than 5% of
the Fund's total assets (taken at market value at the time of entering into
the contract), would be committed to margin on such futures contracts.

An investment policy of the Fund which may be changed by the Company's Board of
Trustees, without shareholder or investor approval, is that the Fund will not
invest in securities of an issuer if the investment would cause the Fund to own
more than 10% of any class of securities of any one issuer.

U.S. GOVERNMENT INCOME FUND

Fundamental Investment Limitations.

The Fund may not:

(1) Invest 25% or more of the value of its total assets in the securities of
issuers conducting their principal business activities in the same industry,
except that this limitation shall not apply to securities issued or guaranteed
as to principal and interest by the U.S. government or any of its agencies or
instrumentalities;

(2) Buy or sell real estate (including real estate limited partnerships) or
commodities or commodity contracts; however the Fund may invest in debt
securities secured by real estate or interests therein or issued by companies
which invest in real estate or interests therein, including real estate
investment trusts, and may purchase or sell currencies (including forward
currency exchange contracts), futures contracts and related options generally
as described in the Funds' Prospectus and Statement of Additional Information
and subject to investment policy (6) below;

(3) Engage in the business of underwriting securities of other issuers, except
to the extent that the disposal of an investment position may technically
cause it to be considered an underwriter as that term is defined under the
Securities Act of 1933;

(4) Make loans, except that the Fund may invest in loans and participations,
purchase debt securities and enter into repurchase agreements and make loans
of securities;

(5) Sell securities short, except to the extent that the Fund
contemporaneously owns or has the right to acquire at no additional cost
securities identical to those sold short;

(6) Purchase securities on margin provided that the Fund may obtain such
short-term credits as may be necessary for the clearance of purchases and
sales of securities, except that the Fund may make margin deposits in
connection with futures contracts subject to investment policy (6) below;

(7) Borrow money in excess of 33 1/3% of the Fund's total assets (including
the amount borrowed), less all liabilities and indebtedness (other than
borrowing). The restriction shall not prevent the Fund from entering into
reverse repurchase agreements and engaging in "roll" transactions, provided
that reverse repurchase agreements, "roll" transactions and any other
transactions constituting borrowing by the Fund may not exceed one-third of
the Fund's total assets. In the event that the asset coverage for the Fund's
borrowings fall below 300%, the Fund, as the case may be, will reduce, within
three days (excluding Sundays and holidays), the amount of its borrowings in
order to provide for 300% asset coverage. Transactions involving options,
futures contracts, options on futures contracts and

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

Statement of Additional Information Page 41
<PAGE> 96
- --------------------------------------------------------------------------------
------------------------------------------------
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

forward currency contracts, and collateral arrangements relating thereto will
not be deemed to be borrowings;

(8) Mortgage, pledge or hypothecate any of its assets, provided that this
restriction shall not apply to the transfer of securities in connection with
any permissible borrowing; or

(9) Invest in interests in oil, gas or other mineral exploration or
development programs.

(1) Invest in companies for the purpose of exercising control or management;

(2) Invest more than 15% of its net assets in illiquid securities;

(3) Invest in securities of an issuer if the investment would cause the Fund
to own more than 10% of any class of securities of any one issuer;

(4) Invest more than 5% of its total assets in securities of companies having,
together with predecessors, a record of less than three years of continuous
operation;

MONEY MARKET FUND

Fundamental Investment Limitations.

The Fund may not:

(1) Purchase common stocks, preferred stocks, warrants or other equity
securities;

(2) Issue senior securities;

(3) Pledge, mortgage or hypothecate its assets except to secure borrowings as
disclosed in the Funds' Prospectus;

(4) Sell securities short, purchase securities on margin, or engage in option
transactions;

(5) Underwrite the sale of securities of other issuers;

(6) Purchase or sell real estate interests, commodities or commodity contracts
or oil and gas investments;

(7) Make loans, except: (i) the purchase of debt securities in accordance with
the Fund's objectives and policies shall not be considered making loans, and
(ii) pursuant to contracts providing for the compensation of service provided
by compensating balances;

(8) Purchase the securities issued by other investment companies, except as
they may be acquired as part of a merger, consolidation or acquisition of
assets; and

(9) Invest more than 25% of the value of the Fund's assets in securities of
issuers in any one industry, except that the Fund is permitted
to invest without such limitation in U.S. government-backed obligations.

An additional investment policy of the Fund, which is not a fundamental policy
and may be changed by a vote of the Company's Board of Trustees, without
shareholder approval to the extent consistent with regulatory requirements
provides that the Fund may not invest more than 10% of its net assets in
illiquid securities.

For purposes of the Fund's concentration policy contained in limitation (9),
above, the Fund intends to comply with the SEC staff position that securities
issued or guaranteed as to principal and interest by any single foreign
government or any supranational organizations in the aggregate are considered to
be securities of issuers in the same industry.

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

Statement of Additional Information Page 42
<PAGE> 97
- --------------------------------------------------------------------------------
------------------------------------------------
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

ALL FUNDS

If a percentage restriction is adhered to at the time of investment, a later
increase or decrease in percentage resulting from a change in values or assets
will not constitute a violation of that restriction.

All of the Funds have the following investment policies, which may be changed by
the Company's Board of Trustees without shareholder or investor approval:

No Fund may:

(1) Hold assets of any issuers, at the end of any calendar quarter (or within
30 days thereafter), to the extent such holdings would cause the Fund to fail
to comply with the diversification requirements for segregated asset accounts
used to fund variable annuity contracts imposed by Section 817(h) of the Code
and the Treasury regulations issued thereunder; or

(2) Except under unusual circumstances, purchase securities issued by
investment companies unless they are issued by companies that follow a policy
of investment primarily in the capital markets of a single foreign entity.

Policies that are designated as operating policies may be changed only upon
approval by the Board of Trustees and following appropriate notice to
shareholders.

Investors should refer to the Funds' Prospectus for further information with
respect to the Funds' respective investment objectives, which may not be changed
without shareholder approval, and other investment policies, techniques and
limitations, which may be changed without shareholder approval.

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

EXECUTION OF PORTFOLIO TRANSACTIONS
- --------------------------------------------------------------------------------

Subject to policies established by each Company's Board of Trustees, G.T.
Capital is responsible for the execution of the Funds' securities transactions
and the selection of broker/dealers who execute such transactions on behalf of
the Funds. In executing securities transactions, G.T. Capital seeks the best net
results for each Fund, taking into account such factors as the price (including
the applicable brokerage commission or dealer spread), size of the order,
difficulty of execution and operational facilities of the firm involved. While
G.T. Capital generally seeks reasonably competitive commission rates and
spreads, payment of the lowest commission or spread is not necessarily
consistent with the best net results. While the Funds may engage in soft dollar
arrangements for research services, as described below, the Funds have no
obligation to deal with any broker or dealer or group of brokers or dealers in
the execution of securities transactions.

Consistent with the interests of the Funds, G.T. Capital may select brokers on
the basis of the research and brokerage services they provide to G.T. Capital
for its use in managing the Funds and its other advisory accounts. Such services
may include furnishing analyses, reports and information concerning issuers,
industries, securities, geographic regions, economic factors and trends,
portfolio strategy, and performance of accounts; and effecting securities
transactions and performing functions incidental thereto (such as clearance and
settlement). Research and brokerage services received from such brokers are in
addition to, and not in lieu of, the services required to be performed by G.T.
Capital under the Management Contract (defined below). A commission paid to such
brokers may be higher than that which another qualified broker would have
charged for effecting the same transaction, provided that G.T. Capital
determines in good faith that such commission is reasonable in terms either of
that particular transaction or the overall responsibility of G.T. Capital to the
Funds and its other clients and that the total commissions paid by each Fund
will be reasonable in relation to the benefits received by the Funds over the
long term. Research services may also be received from dealers who execute Fund
transactions.

The securities generally are traded on a "net" basis with a dealer acting as
principal for its own account without a stated commission, although the price of
the security usually includes a profit to the dealer. U.S. and foreign
government securities and money market instruments generally are traded in the
OTC markets. In underwritten offerings, securities usually are purchased at a

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

Statement of Additional Information Page 43
<PAGE> 98
- --------------------------------------------------------------------------------
------------------------------------------------
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

fixed price which includes an amount of compensation to the underwriter. On
occasion, securities may be purchased directly from an issuer, in which case no
commissions or discounts are paid. Broker/dealers may receive commissions on
futures, currency and options transactions.

G.T. Capital may allocate brokerage transactions to broker/dealers who have
entered into arrangements under which the broker/dealer allocates a portion of
the commissions paid by the Funds toward payment of the Funds' expenses, such as
transfer and custodian fees.

Investment decisions for each Fund and for other investment accounts managed by
G.T. Capital are made independently of each other in light of differing
conditions. However, the same investment decision occasionally may be made for
two or more of such accounts, including one or more Funds. In such cases
simultaneous transactions may occur. Purchases or sales are then allocated as to
price or amount in a manner deemed fair and equitable to all accounts involved.
While in some cases this practice could have a detrimental effect upon the price
or value of the security as far as a Fund is concerned, in other cases G.T.
Capital believes that coordination and the ability to participate in volume
transactions will be beneficial to the Funds.

Under a policy adopted by each Company's Board of Trustees, and subject to the
policy of obtaining the best net results, G.T. Capital may consider a
broker/dealer's sale of the shares of the Funds, and the other G.T. Global
Mutual Funds in selecting brokers and dealers for the execution of securities
transactions. This policy does not imply a commitment to execute securities
transactions through all broker/dealers that sell shares of such funds.

Each Fund contemplates purchasing most foreign equity securities in OTC markets
or stock exchanges located in the countries in which the respective principal
offices of the issuers of the various securities are located if that is the best
available market. The fixed commissions paid in connection with most such
foreign stock transactions generally are higher than negotiated commissions on
U.S. transactions. There generally is less government supervision and regulation
of foreign stock exchanges and brokers than in the United States. Foreign
security settlements may in some instances be subject to delays and related
administrative uncertainties.

Foreign equity securities may be held by a Fund in the form of ADRs, ADSs, EDRs,
CDRs or securities convertible into foreign equity securities. ADRs, ADSs, EDRs
and CDRs may be listed on stock exchanges, or traded in the OTC markets in the
United States or Europe, as the case may be. ADRs, like other securities traded
in the United States, will be subject to negotiated commission rates. The
foreign and domestic debt securities and money market instruments in which the
Funds may invest are generally traded in the OTC markets.

The Funds contemplate that, consistent with the policy of obtaining the best net
results, brokerage transactions may be conducted through certain companies that
are members of the BIL G.T. Group. Each Company's Board of Trustees has adopted
procedures in conformity with Rule 17e-1 under the 1940 Act to ensure that all
brokerage commissions paid to such affiliates are reasonable and fair in the
context of the market in which they are operating. Any such transactions will be
effected and related compensation paid only in accordance with applicable SEC
regulations.

The aggregate brokerage commission paid by the Funds (except the International
Fund and Emerging Markets Fund for the fiscal year ended December 31, 1994 and
for the International Fund and Emerging Markets Fund the fiscal period July 5,
1994 (commencement of operations) through December 31, 1994 were:

<TABLE>
<CAPTION>
AGGREGATE
BROKERAGE
G.T. GLOBAL: COMMISSIONS
----------- -----------
<S> <C>
Variable America Fund..................... $ 12,879
Variable Europe Fund...................... 14,294
Variable New Pacific Fund................. 46,394
Variable International Fund............... 9,920
Money Market Fund......................... 0
Variable Growth & Income Fund............. 13,389
Variable Strategic Income Fund............ 0
Variable Global Government Income Fund.... 0
Variable U.S. Government Income Fund...... 0
Variable Latin America Fund............... 113,444
Variable Emerging Markets Fund............ 33,112
</TABLE>

SECURITIES TRADING AND TURNOVER

The Funds engage in securities trading when G.T. Capital has concluded that the
sale of a security owned by a Fund and/or the purchase of another security of
better value can enhance principal and/or increase income. A security

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

Statement of Additional Information Page 44
<PAGE> 99
- --------------------------------------------------------------------------------
------------------------------------------------
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

may be sold to avoid any prospective decline in
market value, or a security may be purchased in anticipation of a market rise.
Consistent with a Fund's investment objective(s), a security also may be sold
and a comparable security purchased coincidentally in order to take advantage of
what is believed to be a disparity in the normal yield and price relationship
between the two securities.

Although the Funds generally do not intend to trade for short-term profits, the
securities held by a Fund will be sold whenever G.T. Capital believes it is
appropriate to do so, without regard to the length of time a particular security
may have been held, except when doing so could violate the Short-Short
Limitation described below in "Taxes -- General."

No Fund will consider portfolio turnover to be a limiting factor in the purchase
or sale of portfolio securities. A 100% turnover rate would occur if the lesser
of the value of purchases or sales of portfolio securities for a Fund for a year
(excluding purchases of U.S. Treasury and other securities with a maturity at
the date of purchase of one year or less) was equal to 100% of the average
monthly value of the securities (excluding short-term investments) held by that
Fund during such year. Higher turnover involves correspondingly greater
brokerage commissions and other transaction costs that a Fund will bear
directly.

The portfolio turnover rates for the Funds (except the Telecommunications Fund)
for the fiscal period February 10, 1993 (commencement of operations) to December
31, 1993, such turnover rate for the Telecommunications Fund for the period
October 18, 1993 (commencement of operations) through December 31, 1993, the
portfolio turnover rates for the Funds (except the International Fund and the
Emerging Markets Fund) for the fiscal year ended December 31, 1994, and such
turnover rates for the International Fund and the Emerging Markets Fund for the
fiscal period July 5, 1994 (commencement of operations) through December 31,
1994, were as follows:

<TABLE>
<CAPTION>
FEBRUARY 10, 1993 OCTOBER 18, 1993 JULY 5, 1994
(COMMENCEMENT (COMMENCEMENT (COMMENCEMENT
OF OPERATIONS) OF OPERATIONS) YEAR ENDED OF OPERATIONS)
G.T. GLOBAL: TO DECEMBER 31, 1993 TO DECEMBER 31, 1993 DECEMBER 31, 1994 TO DECEMBER 31, 1994
- ------------------------------- --------------------- --------------------- ----------------- ---------------------
<S> <C> <C> <C> <C>
America Fund................... 831% N/A 139% N/A
Europe Fund.................... 27% N/A 61% N/A
New Pacific Fund............... 15% N/A 30% N/A
International Fund............. N/A N/A N/A 17%
Money Market Fund.............. N/A N/A N/A N/A
Growth and Income Fund......... 17% N/A 53% N/A
Strategic Income Fund.......... 245% N/A 313% N/A
Global Government Income
Fund......................... 298% N/A 350% N/A
U.S. Government Income Fund.... 81% N/A 34% N/A
Latin America Fund............. 78% N/A 185% N/A
Telecommunications Fund........ N/A 20% 81% N/A
Emerging Markets Fund.......... N/A N/A N/A 117%
</TABLE>

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

Statement of Additional Information Page 45
<PAGE> 100
- --------------------------------------------------------------------------------
------------------------------------------------
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

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

TRUSTEES AND EXECUTIVE OFFICERS

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

The Trustees and Executive Officers of each Company are listed below:

<TABLE>
<S> <C>
C. Derek Anderson, 54 Chairman, Anderson Capital Management, Inc. from 1988 to
Trustee present; Chairman, Plantagenet Holdings, Ltd. from 1991 to
220 Sansome Street present; Director, Munsingwear, Inc.; Director, American
Suite 400 Heritage Group Inc.; and Director, various other companies.
San Francisco, CA 94104 Mr. Anderson also is a director or trustee of each of the
other investment companies registered under the 1940 Act
that is managed or administered by G.T. Capital.
Frank S. Bayley, 55 A Partner of Baker & McKenzie (a law firm), and serves as
Trustee Director and Chairman of C.D. Stimson Company (a private
2 Embarcadero Center investment company); Trustee, Seattle Art Museum. Mr.
Suite 2400 Bayley also is a director or trustee of each of the other
San Francisco, CA 94111 investment companies registered under the 1940 Act that is
managed or administered by G.T. Capital.
Arthur C. Patterson, 51 Managing Partner of Accel Partner (a venture capital firm),
Trustee Mr. Patterson also serves as a director of various
One Embarcadero Center computing and software companies. Mr. Patterson also is a
Suite 202 director or trustee of each of the other investment
San Francisco, CA 94111 companies registered under the 1940 Act that is managed or
administered by G.T. Capital.
Ruth H. Quigley, 60 Private investor. From 1984 to 1986, Miss Quigley was
Trustee President of Quigley Friedlander & Co., Inc. (a financial
1055 California Street advisory services firm). Miss Quigley also is a director or
San Francisco, CA 94108 trustee of each of the other investment companies
registered under the 1940 Act that is managed or
administered by G.T. Capital.
F. Christian Wignall, 39 Senior Vice President, Chief Investment Officer and a
Vice President and Chief Director of G.T. Capital since 1987, and Chairman of the
Investment Officer Investment Policy Committee of the affiliated international
50 California Street G.T. companies since 1990. Prior to joining G.T. Capital,
San Francisco, CA 94111 Mr. Wignall was Managing Director of G.T. Management
(Japan) Ltd.
Gary Kreps, 40 Vice President and Chief Investment Officer -- Global Fixed
Vice President and Chief Income of G.T. Capital since 1992. Prior to joining G.T.
Investment Officer -- Global Capital, Mr. Kreps was Senior Vice President of the Putnam
Fixed Income Companies.
50 California Street
San Francisco, CA 94111
</TABLE>

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

Statement of Additional Information Page 46
<PAGE> 101
- --------------------------------------------------------------------------------
------------------------------------------------
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

<TABLE>
<CAPTION>
NAME, POSITION(S) WITH EACH COMPANY
AND PRINCIPAL OCCUPATIONS AND BUSINESS EXPERIENCE FOR PAST 5
THE FUNDS AND ADDRESS YEARS
- ----------------------------------- -----------------------------------------------------------
<S> <C>
James R. Tufts, 37 Vice President -- Finance of G.T. Capital and G.T. Global
Vice President and Principal since 1987; Vice President -- Finance of G.T. Services
Financial Officer since 1990; and a Director of G.T. Capital, G.T. Global and
50 California Street G.T. Services since 1991.
San Francisco, CA 94111
Kenneth W. Chancey, 49 Vice President of G.T. Capital and G.T. Global since 1992.
Vice President and Principal From 1989 to 1992, Mr. Chancey was Vice President of Putnam
Accounting Officer Fiduciary Trust Company.
50 California Street
San Francisco, CA 94111
Helge K. Lee, 48 Senior Vice President, General Counsel and Secretary of
Vice President and Secretary G.T. Capital, G.T. Global and G.T. Services since May,
50 California Street 1994. Mr. Lee was the Senior Vice President, General
San Francisco, CA 94111 Counsel and Secretary of Strong/Corneliuson Management,
Inc. and Secretary of each of the Strong Funds from
October, 1991 through May, 1994. For more than five years
prior to October, 1991, he was a shareholder in the law
firm of Godfrey & Kahn, S.C., Milwaukee, Wisconsin.
Peter R. Guarino, 36 Assistant General Counsel of G.T. Capital, G.T. Global and
Assistant Secretary G.T. Services since 1991. From 1989 to 1991, Mr. Guarino
50 California Street was an attorney at The Dreyfus Corporation. Prior thereto,
San Francisco, CA 94111 he was associated with Colonial Management Associates, Inc.
David J. Thelander, 39 Assistant General Counsel of G.T. Capital since January
Assistant Secretary 1995. From 1993 to 1994, Mr. Thelander was an associate at
50 California Street Kirkpatrick & Lockhart LLP (a law firm). Prior thereto, he
San Francisco, CA 94111 was an attorney with the U.S. Securities and Exchange
Commission.
</TABLE>

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

* Mr. Minella is an "interested person" of the Company as defined by the 1940
Act due to his affiliation with the G.T. companies.

The Board of Trustees of each Company has a Nominating and Audit Committee,
comprised of Miss Quigley and Messrs. Anderson, Bayley and Patterson, which is
responsible for nominating persons to serve as Trustees, reviewing audits of the
Company and its Funds and recommending firms to serve as independent auditors of
the Company. Each of the Trustees and Officers of each Company is also a
Director and Officer of G.T. Investment Funds, Inc., G.T. Investment Portfolios,
Inc. and G.T. Global Developing Markets Fund, Inc. and a Trustee and Officer of
G.T. Global Growth Series, G.T. Greater Europe Fund, Global High Income
Portfolio, and Global Investment Portfolio, which also are registered investment
companies managed by G.T. Capital. Each Trustee and Officer serves in total as a
Director and or Trustee and Officer, respectively, of 9 registered investment
companies and 38 series funds managed or administered by G.T. Capital.

Each Company pays each Trustee who is not a director, officer or employee of
G.T. Capital or any affiliated company $5,000 per annum and reimburses travel
and other expenses incurred in connection with attending Board meetings. Other
Trustees and officers receive no compensation or expense reimbursements from the
Company. For the fiscal year ended December 31, 1994, the Companies paid
aggregate Trustees' fees and expenses of $24,374. Such amount was divided
equally among the four Trustees who are not directors, officers or employees of
G.T. Capital or any affiliated company. Mr. Anderson, Mr. Bayley, Mr. Patterson
and Ms. Quigley, who are not directors, officers or employees of G.T. Capital or
any affiliated company, each received total compensation of $86,260.80,
$91,278.72, $74,492.00 and $78,665.19, respectively, from the 38 G.T. Funds for
which he or she serves as a Director or Trustee for the calendar year ended
December 31, 1994. Fees and expenses disbursed to the Trustees contained no
accrued or payable pension, or retirement benefits. As of the date of this
Statement of Additional Information, the officers and Trustees and their
families as a group do not own beneficially or of record any of the outstanding
shares of any Fund.

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

Statement of Additional Information Page 47
<PAGE> 102
- --------------------------------------------------------------------------------
------------------------------------------------
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

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

MANAGEMENT
- --------------------------------------------------------------------------------

INVESTMENT MANAGEMENT AND
ADMINISTRATION SERVICES

G.T. Capital serves as each Fund's investment manager and administrator under an
Investment Management and Administration Contract (individually, a "Management
Contract;" collectively, the "Management Contracts") between that Fund and G.T.
Capital. As investment manager, G.T. Capital makes all investment decisions for
each Fund and administers each Fund's affairs. G.T. Capital also serves as the
Company's administrator under an Administration Contract ("Administration
Contract") between each Company and G.T. Capital. As administrator, G.T.
Capital, among other things, furnishes the services and pays the compensation
and travel expenses of persons who perform the executive, administrative,
clerical and bookkeeping functions of the Company, and provides suitable office
space, and necessary small office equipment and utilities.

Each Management Contract has an initial two-year term from the date of
commencement of operations. Each Management Contract may be renewed for
additional one-year terms thereafter, provided that any such renewal has been
specifically approved at least annually by: (i) that Fund's Board of Trustees,
or by the vote of a majority of that Fund's outstanding voting securities (as
defined in the 1940 Act), and (ii) a majority of Trustees who are not parties to
that Management Contract or "interested persons" of any such party (as defined
in the 1940 Act), cast in person at a meeting called for the purpose of voting
on such approval. Each Management Contract was approved by the Board of Trustees
of the respective Funds most recently on June 15, 1994, and by G.T. Capital as
the initial shareholder of each Fund on January 13, 1993. The Management
Contract for the Telecommunications Fund was approved by G.T. Capital as the
initial shareholder on October 15, 1993. The Management Contract for the
International Fund and the Emerging Markets Fund was approved by the Board of
Trustees on June 15, 1994 and by G.T. Capital as the initial shareholder on June
15, 1994. The Management Contracts for the Infrastructure Fund, and Natural
Resources Fund were approved by G.T. Capital as the initial shareholder on
January 24, 1995. Either the Fund or G.T. Capital may terminate a Management
Contract without penalty upon sixty (60) days' written notice to the other
party. Each Management Contract terminates automatically in the event of its
assignment (as defined in the 1940 Act).

With respect to any Fund, either the Company or G.T. Capital may terminate the
Administration Contract without penalty upon sixty (60) days' written notice to
the other party. The Administration Contract terminates automatically in the
event of its assignment (as defined in the 1940 Act).

The amounts of investment management and administration fees paid by each Fund
(except International Fund and Emerging Markets Fund) to G.T. Capital for the
fiscal year ended December 31, 1994, and such fees paid to G.T. Capital by
International Fund and Emerging Markets Fund for the period July 5, 1994
(commencement of operations) to December 31, 1994, were as follows:

<TABLE>
<CAPTION>
INVESTMENT
MANAGEMENT REIMBURSEMENT
G.T. GLOBAL: FEES AMOUNT
- --------------------- ---------- -------------
<S> <C> <C>
Variable America
Fund................ $ 51,664 $ 0
Variable Europe
Fund................ 125,533 0
Variable New Pacific
Fund................ 155,724 0
Variable
International
Fund................ 6,985 4,627
Money Market Fund.... 52,363 0
Variable Strategic
Income Fund......... 174,302 0
Variable Global
Government Income
Fund................ 69,318 0
Variable U.S.
Government Income
Fund................ 12,663 6,479
Variable Latin
America Fund........ 203,425 0
Variable Emerging
Markets Fund........ 20,347 20,347
Variable
Telecommunications
Fund................ 239,566 0
Variable Growth &
Income Fund......... 210,934 0
</TABLE>

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

Statement of Additional Information Page 48
<PAGE> 103
- --------------------------------------------------------------------------------
------------------------------------------------
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

In addition to payment of the investment management and administration fees, the
Funds paid other operating expenses and received reimbursement pursuant to
undertakings in effect. The amount of such expenses and reimbursements for the
Funds (except International Fund and Emerging Markets Fund) for the fiscal year
ended December 31, 1994, and for the International Fund and Emerging Markets
Fund for the period July 5, 1994 (commencement of operations) through December
31, 1994, were as follows:

<TABLE>
<CAPTION>
OTHER
EXPENSES REIMBURSEMENT
G.T. GLOBAL: PAID AMOUNT
- ----------------------- -------- -------------
<S> <C> <C>
Variable America
Fund.................. $ 89,223 $70,882
Variable Europe Fund... 83,548 49,678
Variable New Pacific
Fund.................. 93,370 51,141
Variable International
Fund.................. 15,531 15,531
Money Market Fund...... 73,413 47,231
Variable Strategic
Income Fund........... 92,973 34,872
Variable Global
Government Income
Fund.................. 86,210 63,070
Variable U.S.
Government Income
Fund.................. 65,435 65,140
Variable Latin America
Fund.................. 118,753 63,441
Variable Emerging
Markets Fund.......... 22,391 22,391
Variable
Telecommunications
Fund.................. 116,804 44,272
Variable Growth &
Income Fund........... 102,726 47,986
</TABLE>

TRANSFER AGENCY SERVICES

G.T. Services ("Transfer Agent") performs shareholder servicing, reporting and
general transfer agent functions for the Funds. For these services, the Transfer
Agent receives a fee of $125 per month from each Fund. The Transfer Agent also
is reimbursed by the Funds for its out-of-pocket expenses for such items as
postage, forms, telephone charges, stationery and office supplies.

EXPENSES OF THE FUNDS

As described in the Funds' Prospectus, each Fund pays all of its respective
expenses not assumed by other parties. The allocation of general Company
expenses and expenses shared by the Funds with one another, are allocated on a
basis deemed fair and equitable, which may be based on the relative net assets
of the Funds or the nature of the services performed and relative applicability
to each Fund. Expenditures, including costs incurred in connection with the
purchase or sale of securities, which are capitalized in accordance with
generally accepted accounting principles applicable to investment companies, are
accounted for as capital items and not as expenses. The ratio of each Fund's
expenses to its relative net assets can be expected to be higher than the
expense ratios of funds investing solely in domestic securities, since the cost
of maintaining the custody of foreign securities and the rate of investment
management fees paid by each Fund generally are higher than the comparable
expenses of such other funds.

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

VALUATION OF SHARES

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

As described in the Funds' Prospectus, each Fund's net asset value per share is
determined each day on which the New York Stock Exchange Inc. ("NYSE") is open
for business ("Business Day") as of the close of regular trading on the NYSE
(currently 4:00 p.m. Eastern Time unless weather, equipment failure or other
factors contribute to an earlier closing time). Currently, the NYSE is closed on
weekends and on certain days relating to the following holidays: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, July 4th, Labor Day, Thanksgiving
Day and Christmas Day.

The portfolio securities of the Funds, and other assets of the Funds, other than
those of the Money Market are valued as follows:

Equity securities including ADRs, ADSs and EDRs, which are traded on stock
exchanges, are valued at the last sale price on the exchange on which such
securities are traded, as of the close of business on the day the securities are
being valued or, lacking any sales, at the last available bid price. In cases
where securities are traded on more than one exchange, the securities are valued
on the exchange determined by

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

Statement of Additional Information Page 49
<PAGE> 104
- --------------------------------------------------------------------------------
------------------------------------------------
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. Capital to be the primary market. Securities traded in the OTC market are
valued at the last available bid price prior to the time of valuation.
Securities and other assets for which market quotations are not readily
available (including restricted securities which are subject to limitations as
to their sale) are valued at fair value as determined in good faith by or under
the direction of the relevant Company's Board of Trustees. Trading in securities
on European and Far Eastern securities exchanges and OTC markets normally is
completed well before the close of regular trading on the NYSE.

Long-term debt obligations are valued at the mean of representative quoted bid
and asked prices for such securities or, if such prices are not available, at
prices for securities of comparable maturity, quality and type; however, when
G.T. Capital deems it appropriate, prices obtained for the day of valuation from
a bond pricing service will be used. Short-term debt investments are amortized
to maturity based on their cost, adjusted for foreign exchange translation,
provided such valuations represent fair value.

Options on indices, securities and currencies purchased by the Funds are valued
at their last bid price in the case of listed options or at the average of the
last bid prices obtained from dealers in the case of OTC options. When market
quotations for futures and options on futures held by a Fund are readily
available, those positions will be valued based upon such quotations.

The valuation procedures applied in any specific instance are likely to vary
from case to case. However, consideration generally is given to the financial
position of the issuer and other fundamental analytical data relating to the
investment and to the nature of the restrictions on disposition of the
securities (including any registration expenses that might be borne by a Fund in
connection with such disposition). In addition, specific factors generally are
considered, such as the cost of the investment, the market value of any
unrestricted securities of the same class (both at the time of purchase and at
the time of valuation), the size of the holding, the prices of any recent
transactions or offers with respect to such securities and any available
analysts' reports regarding the issuer.

The fair value of any other assets is added to the value of all securities
positions to arrive at the value of a Fund's total assets. A Fund's liabilities,
including accruals for expenses, are deducted from its total assets. Once the
total value of a Fund's net assets is so determined, that value is then divided
by the total number of shares outstanding (excluding treasury shares), and the
result, rounded to the nearer cent, is the net asset value per share.

Any assets or liabilities initially expressed in terms of foreign currencies are
translated into U.S. dollars at the official exchange rate or, at the mean of
the current bid and asked prices of such currencies against the U.S. dollar last
quoted by a major bank that is a regular participant in the foreign exchange
market or on the basis of a pricing service that takes into account the quotes
provided by a number of such major banks. If none of these alternatives are
available or none are deemed to provide a suitable methodology for converting a
foreign currency into U.S. dollars, the relevant Company's Board of Trustees, in
good faith, will establish a conversion rate for such currency.

Trading in foreign securities may not take place on all days on which the NYSE
is open. Further, trading takes place in Japanese markets on certain Saturdays
and in various foreign markets on days on which the NYSE is not open,
consequently, the calculation of the Funds' respective net asset values may not
take place contemporaneously with the determination of the prices of securities
held by the respective Funds. Events affecting the values of such securities
that occur between the time their prices are determined and the close of regular
trading on the NYSE will not be reflected in the respective Funds' net asset
values unless G.T. Capital, under the supervision of the relevant Company's
Board of Trustees, determines that the particular
event would materially affect net asset value.
As a result, a Fund's net asset value may be significantly affected by such
trading on days when a shareholder cannot purchase or redeem shares of the Fund.

A Fund may declare a suspension of the determination of net asset value during
the periods when it may suspend redemption privileges.

The Board of Trustees of G.T. Global Variable Investment Series has determined
in good faith that the net asset value of each share of the Money Market Fund
will remain constant at $1.00 and, although no assurance can be given that it
will be able to do so on a continuing basis,

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

Statement of Additional Information Page 50
<PAGE> 105
- --------------------------------------------------------------------------------
------------------------------------------------
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

the Money Market Fund will, as described below, employ specific investment
policies and procedures to accomplish this result. The Money Market Fund values
its portfolio securities using the amortized cost method. The amortized cost
method involves valuing a security at its cost and thereafter accruing any
discount or premium at a constant rate to maturity. Although this method
provides certainty in valuation, it may result in periods during which the value
of the Money Market Fund's securities, as determined by amortized cost, is
higher or lower than the price the Money Market Fund would receive if it sold
the securities. During periods of declining interest rates, the daily yield on
the Money Market Fund computed as described above may tend to be higher than a
like computation made by a similar fund with identical investments utilizing a
method of valuation based upon market prices and estimates of market prices for
all of its securities. Thus, if the Money Market Fund's use of amortized cost
resulted in a lower aggregate value on a particular day, a prospective investor
in the Money Market Fund would be able to obtain a somewhat higher yield than
would result from investment in a similar fund utilizing solely market values,
and existing Money Market Fund shareholders would receive less investment
income. The converse would apply in a period of rising interest rates.

In connection with the Money Market Fund's policy of valuing its securities
using the amortized cost method, the Fund adheres to certain conditions,
including maintaining a dollar-weighted average maturity of 90 days or less and
purchasing only securities having remaining maturities of 13 months or less. The
Board of Trustees of G.T. Global Variable Investment Series also has established
procedures designed to stabilize, to the extent reasonably possible, the Money
Market Fund's net asset value per share at $1.00. Such procedures include review
of securities holdings by the Board of Trustees, at such intervals as it may
deem appropriate, to determine whether the Money Market Fund's net asset value
calculated by using available market quotations deviates from the net asset
value calculated by using the amortized cost method and, if so, whether such
deviation may result in material dilution or may be otherwise unfair to existing
investors. In the event the Board of Trustees of G.T. Global Variable Investment
Series determines that such a deviation exists, the Board has agreed to take
such corrective action as it deems necessary and appropriate, which action might
include selling securities prior to maturity to realize capital gains or losses
or to shorten average maturity, withholding income, or establishing a net asset
value by using available market quotations or market equivalents.

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

INFORMATION RELATING TO SALES
AND REDEMPTIONS

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

Each Company is a funding vehicle for VA Contracts offered by the separate
accounts of the Participating Insurance Companies. Individual VA Contract
holders are not the shareholders of a Fund. Rather, each Participating Insurance
Company and its separate accounts are the shareholders (the "shareholders"). The
offering is without a sales charge and is made at each Fund's net asset value
per share, which is determined in the manner set forth above under "Valuation of
Shares."

G.T. Global Financial Services, Inc. pays any distribution expenses and costs
(that is, those arising from any activity which is primarily intended to result
in the sale of shares issued by the Companies), including expenses and costs
attributable to the Companies, which are related to the printing and
distributing of prospectuses to prospective owners of the VA Contracts.

Each Company redeems all full and fractional shares of its Funds at the net
asset value per share applicable to each of its Funds. See "Valuation of Shares"
above.

Payment upon redemption is made in cash and ordinarily will occur within seven
days of receipt of a proper notice of redemption. The right to redeem shares or
to receive payment with respect to any redemption of shares of any Fund may only
be suspended: (1) for any period during which trading on the NYSE is restricted
or such Exchange is closed, other than customary weekend and holiday closing;
(2) for any period

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

Statement of Additional Information Page 51
<PAGE> 106
- --------------------------------------------------------------------------------
------------------------------------------------
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

during which an emergency exists as a result of which disposal of securities or
determination of the net asset value of that Fund is not reasonably practicable;
or (3) for such other periods as the SEC may by order permit for the protection
of shareholders of that Fund.

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

TAXES

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

Shares of the Funds are offered only to Participating Insurance Company Separate
Accounts that fund certain variable contracts. See the applicable VA Contract
prospectus for a discussion of the special taxation of insurance companies with
respect to such accounts and of the VA Contract holders.

Each Fund is treated as a separate corporation for federal income tax purposes.
In order to continue to qualify for treatment as a regulated investment company
("RIC") under the Code, each Fund must distribute to its shareholders for each
taxable year at least 90% of its investment company taxable income (consisting
generally of net investment income, net short-term capital gain, and net gains
from certain foreign currency transactions) and must meet several additional
requirements. With respect to each Fund, these requirements include the
following: (1) the Fund must derive at least 90% of its gross income each
taxable year from dividends, interest, payments with respect to securities
loans, and gains from the sale or other disposition of securities or foreign
currencies, or other income (including gains from options, Futures, or Forward
Contracts) derived with respect to its business of investing in securities or
those currencies ("Income Requirement"); (2) the Fund must derive less than 30%
of its gross income each taxable year from the sale or other disposition of
securities, or any of the following, that were held for less than three months
- -- options, Futures, or Forward Contracts (other than those on foreign
currencies), or foreign currencies (or options, Futures, or Forward Contracts
thereon) that are not directly related to the Fund's principal business of
investing in securities (or options and Futures with respect to securities)
("Short-Short Limitation"); (3) at the close of each quarter of the Fund's
taxable year, at least 50% of the value of its total assets must be represented
by cash and cash items, U.S. government securities, securities of other RICs,
and other securities, with these other securities limited, with respect to any
one issuer, to an amount that does not exceed 5% of the value of the Fund's
total assets and that does not represent more than 10% of the issuer's
outstanding voting securities; and (4) at the close of each quarter of the
Fund's taxable year, not more than 25% of the value of its total assets may be
invested in securities (other than U.S. government securities or the securities
of other RICs) of any one issuer.

As noted in the Funds' Prospectus, each Fund intends to continue to comply with
the diversification requirements imposed by section 817(h) of the Code and the
regulations thereunder. These requirements, which are in addition to the
diversification requirements mentioned above, place certain limitations on the
proportion of each Fund's assets that may be represented by any single
investment (which includes all securities of the same issuer). For these
purposes, each U.S. government agency or instrumentality is treated as a
separate issuer, while a particular foreign government and its agencies,
instrumentalities, and political subdivisions all are considered the same
issuer.

Dividends and other distributions declared by a Fund in, and payable to
shareholders of record as of a date in, October, November, or December of any
year will be deemed to have been paid by the Fund and received by the
shareholders on December 31 of that year if the distributions are paid by the
Fund during the following January.

Dividends and interest received by a Fund may be subject to income, withholding,
or other taxes imposed by foreign countries that would reduce the yield on its
securities. Tax conventions between certain countries and the United States may
reduce or eliminate these foreign taxes, however, and many foreign countries do
not impose taxes on capital gains with respect to investments by foreign
investors.

Each Fund (other than the Money Market Fund and the America Fund) may invest in
the stock of "passive foreign investment companies" ("PFICs"). A PFIC is a
foreign corporation that,

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

Statement of Additional Information Page 52
<PAGE> 107
- --------------------------------------------------------------------------------
------------------------------------------------
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

in general, meets either of the following tests: (1) at least 75% of its gross
income is passive or (2) an average of at least 50% of its assets produce, or
are held for the production of, passive income. Under certain circumstances, a
Fund will be subject to federal income tax on a portion of any "excess
distribution" received on the stock of a PFIC or of any gain from disposition of
the stock (collectively "PFIC income"), plus interest thereon, even if the Fund
distributes the PFIC income as a taxable dividend to its shareholders. The
balance of the PFIC income will be included in the Fund's investment company
taxable income and, accordingly, will not be taxable to it to the extent that
income is distributed to its shareholders.

If a Fund invests in a PFIC and elects to treat the PFIC as a "qualified
electing fund" ("QEF"), then in lieu of the foregoing tax and interest
obligation, the Fund will be required to include in income each year its pro
rata share of the QEF's annual ordinary earnings and net capital gain (the
excess of net long-term capital gain over net short-term capital loss) -- which
would have to be distributed because of the distribution requirements described
above -- even if those earnings and gain were not received by the Fund. In most
instances, it will be very difficult, if not impossible, to make this election
because of certain requirements thereof.

Three bills passed by Congress in 1991 and 1992 and vetoed by President Bush
would have substantially modified the taxation of U.S. shareholders of foreign
corporations, including eliminating the provisions described above dealing with
PFICs and replacing them (and other provisions) with a regulatory scheme
involving entities called "passive foreign corporations." The "Tax
Simplification and Technical Corrections Bill of 1993," approved in November
1993 by the House Ways and Means Committee, contains the same modifications. It
is unclear at this time whether, and in what form, the proposed modifications
may be enacted into law.

Proposed regulations have been published pursuant to which open-end RICs, such
as the Funds, would be entitled to elect to "mark-to-market" their stock in
certain PFICs. "Marking-to-market," in this context, means recognizing as gain
for each taxable year the excess, as of the end of that year, of the fair market
value of such a PFIC's stock over the adjusted basis in that stock (including
mark-to-market gain for each prior year for which an election was in effect).

OPTIONS, FUTURES, AND FOREIGN CURRENCY TRANSACTIONS

The use of hedging strategies, such as entering into Forward Contracts and
selling (writing)
and purchasing options and Futures, involves complex rules that will determine
for federal income tax purposes the character and timing of recognition of the
gains and losses a Fund realizes in connection therewith. Income from the
disposition of foreign currencies (except certain gains therefrom that may be
excluded by future regulations), and income from transactions in options,
Futures, and Forward Contracts derived by a Fund with respect to its business of
investing in securities or foreign currencies, will qualify
as permissible income under the Income Requirement. However, income from the
disposition of options and Futures (other than those on foreign currencies) will
be subject to the Short-Short Limitation if they are held for less than three
months. Income from the disposition of foreign currencies, and options, Futures,
and Forward Contracts on foreign currencies, that are not directly related to a
Fund's principal business of investing in securities (or options and Futures
with respect thereto) also will be subject to the Short-Short Limitation if they
are held for less than three months.

If a Fund satisfies certain requirements, any increase in value of a position
that is part of a "designated hedge" will be offset by any decrease in value
(whether realized or not) of the offsetting hedging position during the period
of the hedge for purposes of determining whether the Fund satisfies the
Short-Short Limitation. Thus, only the net gain (if any) from the designated
hedge will be included in gross income for purposes of that limitation. Each
Fund, when it engages in hedging transactions, will consider whether it should
seek to qualify for this treatment for its hedging transactions. To the extent a
Fund does not qualify for this treatment, it may be forced to defer the closing
out of certain options, Futures, and Forward Contracts beyond the time when it
otherwise would be advantageous to do so, in order for the Fund to continue to
qualify as a RIC.

Futures and Forward Contracts that are subject to section 1256 of the Code
(other than Forward

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

Statement of Additional Information Page 53
<PAGE> 108
- --------------------------------------------------------------------------------
------------------------------------------------
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

Contracts that are part of a "mixed straddle") ("Section 1256 Contracts") and
that are held by a Fund at the end of its taxable year generally will be deemed
to have been sold at market value for federal income tax purposes. Sixty percent
of any net gain or loss recognized on these deemed sales, and 60% of any net
realized gain or loss from any actual sales of Section 1256 Contracts, will be
treated as long-term capital gain or loss, and the balance will be treated as
short-term capital gain or loss. Section 988 of the Code also may apply to
Forward Contracts and options on foreign currencies. Under section 988, each
foreign currency gain or loss generally is computed separately and treated as
ordinary income or loss. In the case of overlap between sections 1256 and 988,
special provisions determine the character and timing of any income gain, or
loss. Each Fund attempts to monitor section 988 transactions to minimize any
adverse tax impact.

The foregoing is a general and abbreviated summary of certain federal income tax
considerations affecting each Fund and the separate accounts. No attempt is made
to present a complete explanation of the federal tax treatment of the Funds'
activities, and this discussion is not intended as a substitute for careful tax
planning. Accordingly, potential investors are urged to consult their own tax
advisers for more detailed information and for information regarding any state,
local, or foreign taxes applicable to the Funds and to dividends and other
distributions therefrom.

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

ADDITIONAL INFORMATION

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

BIL GT GROUP

Other subsidiaries of the BIL GT Group include the Bank in Liechtenstein AG, an
international financial services institution founded in 1920, with over $17
billion in assets under administration and principal offices in Vaduz,
Liechtenstein, Bank in Liechtenstein (Frankfurt) GmbH, and Bilfinanz und
Verwaltung AG located in Zurich, Switzerland. In total, BIL GT Group encompasses
over $43 billion in assets under management and administration.

CUSTODIAN

State Street Bank and Trust Company ("State Street"), 225 Franklin Street,
Boston, Massachusetts 02110, acts as custodian of the Funds' assets. State
Street is authorized to establish and has established individual accounts in
foreign currencies and to cause securities of the Funds to be held in such
accounts outside the United States in the custody of non-U.S. banks.

INDEPENDENT ACCOUNTANTS

The Companies' and the Funds' independent accountants are Coopers & Lybrand
L.L.P., One Post Office Square, Boston, Massachusetts 02109. Coopers & Lybrand
L.L.P. conducts an annual audit of each Fund, assists in the preparation of the
Funds' federal and state income tax returns and consults with the Companies and
the Funds as to matters of accounting, regulatory filings, and federal and state
income taxation.

The audited financial statements of each Company and each Fund included in this
Statement of Additional Information have been examined by Coopers & Lybrand
L.L.P., as stated in its opinion appearing herein, and are included in reliance
upon such opinion given upon the authority of said firm as experts in accounting
and auditing.

USE OF NAME

G.T. Capital has granted each Company the right to use the "G.T." name and has
reserved the right to withdraw its consent to the use of such name by either
Company and/or any of the Funds at any time, or to grant the use of such name to
any other company.

SHAREHOLDER LIABILITY

Under certain circumstances, a shareholder of
a Fund may be held personally liable for the obligations of the Fund. Each
Company's Declaration of Trust provides that shareholders shall not be subject
to any personal liability for the acts or obligations of a Fund or the Company
and that every written agreement, obligation or other undertaking made or issued
by a Fund or the Company shall contain a provision to the effect that
shareholders are not personally liable

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Statement of Additional Information Page 54
<PAGE> 109
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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

thereunder. Each Declaration of Trust provides for indemnification out of the
Company's assets under certain circumstances, and further provides that the
Company shall, upon request, assume the defense of any act or obligation of a
Fund or the Company and that the Fund in which the shareholder holds shares will
indemnify the shareholder for all legal and other expenses incurred therewith.
Thus, the risk of any shareholder incurring financial loss beyond his or her
investment, on account of this theoretical shareholder liability, is limited to
circumstances in which the Fund or the Company itself would be unable to meet
its obligations.

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

INVESTMENT RESULTS

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

The Funds' "Standardized Return", as referred to in the Funds' Prospectus (see
"Other Information -- Performance Information" in the Prospectus), is calculated
as follows: Standardized Return ("T") is computed by using the value at the end
of the period ("EV") of a hypothetical initial investment of $1,000 ("P") over a
period of years ("n") according to the following formula as required by the SEC:
P(1+T)n = EV. The following assumptions will be reflected in computations made
in accordance with this formula: (1) reinvestment of dividends and
other distributions at net asset value on the reinvestment date determined by
the Board of Trustees; and (2) a complete redemption at the end of any period
illustrated. The Standardized Return quotation does not reflect the charges
deducted from the Participating Insurance Companies' separate accounts. See the
VA Contract prospectus. If these charges were deducted to reflect the effective
Standardized Return to the VA Contract owner, that Standardized Return would be
lower than the Standardized Returns quoted.

"Non-Standardized Return," as referred to in the Funds' Prospectus, is
calculated for a specified period of time by assuming the investment of $1,000
in Fund shares and further assuming the reinvestment of all dividends and other
distributions made to Fund shareholders in additional Fund shares at their net
asset value. Percentage rates of return are then calculated by comparing this
assumed initial investment to the value of the hypothetical account at the end
of the period for which the Non-Standardized Return is quoted. The
Non-Standardized Return quotation does not reflect the charges deducted from the
Participating Insurance Companies' separate accounts. See the VA Contract
prospectus. If these charges were deducted, the Non-Standardized Return
quotation would be lower than those stated. Non-Standardized Returns may be
quoted for the same or different time periods for which Standardized Returns are
quoted.

As discussed in the Prospectus, each Fund may quote Non-Standardized Total
Returns that do not reflect the effect of sales charges. Non-Standardized
Returns may be quoted for the same or different time periods for which
Standardized Returns are quoted.

The Non-Standardized Returns for each Fund (except the Telecommunications Fund)
for the fiscal year ended December 31, 1994, and from inception on February 10,
1993 to December 31, 1994, quoted as average annual total return, were as
follows:

<TABLE>
<S> <C>
Variable America Fund
-- Year ended December 31, 1994.... 18.88%
-- From inception on February 10,
1993 to December 31, 1994....... 17.84%
Variable Europe Fund
-- Year ended December 31, 1994.... -.59%
-- From inception on February 10,
1993 to December 31, 1994....... 13.50%
Variable New Pacific Fund*
-- Year ended December 31, 1994.... -12.47%
-- From inception on February 10,
1993 to December 31, 1994....... 8.78%
Variable Growth and Income Fund
-- Year ended December 31, 1994.... -2.85%
-- From inception on February 10,
1993 to December 31, 1994....... 7.38%
Variable Strategic Income Fund
-- Year ended December 31, 1994.... -17.09%
-- From inception on February 10,
1993 to December 31, 1994....... 3.00%
Variable Global Government Income
Fund
-- Year ended December 31, 1994.... -8.70%
-- From inception on February 10,
1993 to December 31, 1994....... -.13%
</TABLE>

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Statement of Additional Information Page 55
<PAGE> 110
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------------------------------------------------
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

<TABLE>
<S> <C>
Variable U.S. Government Income Fund
-- Year ended December 31, 1994.... -6.27%
-- From inception on February 10,
1993 to December 31, 1994....... -.15%
Variable Latin America Fund
-- Year ended December 31, 1994.... 9.14%
-- From inception on February 10,
1993 to December 31, 1994....... 28.61%
Money Market Fund
-- Year ended December 31, 1994.... 3.48%
-- From inception on February 10,
1993 to December 31, 1994....... 3.20%
- ------------
*Formerly, G.T. Global: Variable
Pacific Fund
</TABLE>

The Non-Standardized Returns for the Telecommunications Fund for the fiscal year
ended December 31, 1994, and from inception on October 18, 1993 to December 31,
1994, quoted as average annual total return, were 7.15% and 13.70%,
respectively.

The Non-Standardized Returns of each Fund, except the Telecommunications Fund,
the International Fund and the Emerging Markets Fund, quoted as aggregate total
returns, for the period February 10, 1993 (commencement of operations) through
December 31, 1994, were as follows:

<TABLE>
<CAPTION>
AGGREGATE
G.T. GLOBAL: RETURN
----------- ---------
<S> <C>
Variable America Fund............. 36.32%
Variable Europe Fund.............. 26.99
Variable New Pacific Fund*........ 17.22
Variable Growth & Income Fund..... 14.39
Variable Strategic Income Fund.... 5.75
Variable Global Government
Income.......................... -.25
Fund Variable U.S. Government
Income Fund..................... -.29
Variable Latin America Fund....... 60.80
Money Market Fund................. 6.13
</TABLE>

- ------------
*Formerly, Variable Pacific Fund

The Non-Standardized Return for the Telecommunications Fund quoted as aggregate
total returns for the period October 18, 1993 (commencement of operations)
through December 31, 1994, was 16.70%.

The Non-Standardized Returns for the International Fund and the Emerging Markets
Fund, quoted as aggregate total return for the period July 5, 1994 (commencement
of operations) through December 31, 1994, were -5.81 and .12%, respectively.
Each Fund's investment results will vary from time to time depending upon market
conditions, the composition of the Fund's portfolio and operating expenses of a
Fund, so that current or past yield or total return should not be considered
representations of what an investment in a Fund may earn in any future period.
These factors and possible differences in the methods used in calculating
investment results should be considered when comparing a Fund's investment
results with those published for other investment companies and other investment
vehicles. A Fund's results also should be considered relative to the risks
associated with such Fund's investment objective and policies.

Current yield ("YIELD") is computed by dividing the difference between dividends
and interest earned during a one-month period ("a") and expenses accrued for the
period (net of reimbursements) ("b") by the product of the average daily number
of shares outstanding during the period that were entitled to receive dividends
("c") and the maximum offering price per share on the last day of the period
("d") according to the following formula as required by the SEC:

<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -
a-b1
YIELD = 2 cd + 1 6 - 1
( )

- -
</TABLE>

Performance figures for a Fund will only be advertised if comparable performance
figures for the corresponding division of the separate account are included in
the advertisement. Each Fund's investment results will vary from time to time
depending upon market conditions, the composition of the Fund's portfolio and
operating expenses of a Fund, so that current or past yield or total return
should not be considered representations of what an investment in a Fund may
earn in any future period. These factors and possible differences in the methods
used in calculating investment results should be considered when comparing a
Fund's investment results with those published for other investment companies
and other investment vehicles whose shares are offered to insurance company
separate accounts. A Fund's results also should be considered relative to the
risks associated with such Fund's investment objectives and policies.

The Money Market Fund may, from time to
time, provide yield information or comparisons of its yield to various averages
including data from

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Statement of Additional Information Page 56
<PAGE> 111
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------------------------------------------------
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

Lipper Analytical Services, Inc., Bank Rate Monitor(TM), IBC/Donaghue's Money
Fund Report, Money Magazine, and other industry publications (to the extent they
apply to investment companies whose shares are offered to insurance company
separate accounts, in advertisements or in reports furnished to current or
prospective shareholders).

The Money Market Fund calculates its yield for its shares daily, based upon the
seven days ending on the day of the calculation, called the "base period." The
yield is computed by determining the net change in the value of a hypothetical
account with a balance of one share at the beginning of the base period, with
the net change, excluding capital changes, but including the value of any
additional shares purchased with dividends earned from the original one share
and all dividends declared on the original and any purchased shares; dividing
the net change in the account's value by the value of the account at the
beginning of the base period to determine the base period return; and
multiplying the base period return by ( 365/7). The Money Market Fund's
effective yield is computed by compounding the unannualized base period return
by adding 1 to the base period return; raising the sum to the 365/7th power; and
subtracting 1 from the result.

For the seven-day period ended December 31, 1994, the Fund's share yield was
5.07% and effective yield was 5.20% which reflects .09% of expenses reimbursed
pursuant to undertakings in effect. See "Management" in the Prospectus. The
seven-day and effective yields are calculated as follows:

<TABLE>
<S> <C>
Assumptions:
Value of hypothetical pre-
existing account with
exactly one share at the
beginning of the period:... $1.000000000
Value of same account*
(excluding capital changes)
at the end of the seven-day
period ending December 31,
1994:...................... 1.000972434
</TABLE>

- ------------
* Value includes additional shares acquired with dividends paid on the original
shares.

<TABLE>
<S> <C>
Calculation:
Ending account value:......... $1.000972434
Less beginning account
value:..................... $1.000000000
Net change in account
value:..................... $ .000972434
Seven-day yield = $.000972434X 365/7
= 5.07%
Effective yield**
= [1 + .000972434] 365/7 - 1 = 5.20%
</TABLE>

- ------------
** The effective yield assumes a year's compounding of the seven-day yield.

The Money Market Fund's investment results may also be calculated for longer
periods in accordance with the following method: by subtracting (a) the net
asset value of one share at the beginning of the period, from (b) the net asset
value of all shares an investor would own at the end of the period for the share
held at the beginning of the period (assuming reinvestment of all dividends and
distributions) and dividing by (c) the net asset value per share at the
beginning of the period. The resulting percentage indicates the positive or
negative rate of return that an investor would have earned from the reinvested
dividends and distributions and any changes in share price during the period.
These performance quotations do not reflect the charges deducted from the
Participating Insurance Companies' separate accounts. See the VA Contract
prospectus. If these charges were deducted, such quotations would be lower than
those calculated for the Money Market Fund.

The performance figures for the Money Market Fund will only be advertised if
comparable performance figures for the corresponding division of the separate
account are included in the advertisement. The Money Market Fund's investment
results will vary from time to time depending upon market conditions, the
composition of the Fund's portfolio and operating expenses of the Fund, so that
any yield figure should not be considered representative of what an investment
in the Fund may earn in any future period. These factors and possible
differences in calculation methods should be considered when comparing the
Fund's investment results with those published for other investment companies
and other investment vehicles whose shares are offered to insurance company
separate accounts. Investment results also should be considered relative to the
risks associated with the investment objective and policies.

- --------------------------------------------------------------------------------
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Statement of Additional Information Page 57
<PAGE> 112
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------------------------------------------------
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

IMPORTANT POINTS TO NOTE ABOUT THE FOLLOWING WORLD FINANCIAL AND ECONOMIC DATA

The following information is based on sources believes to be reliable, but which
may be subject to revision and which has not been independently verified by
either Company or G.T. Global. The authors and publishers of such material are
not to be considered as "experts" under the Securities Act of 1933, on account
of the inclusion of such information herein.

A portion of the performance figures for each market includes the positive or
negative effects of the currency exchange rates effective at December 31 of each
year between the U.S. dollar and currency of the foreign market (e.g. Japanese
Yen, German Deutschemark, Hong Kong Dollar). A foreign currency which has
strengthened or weakened against the U.S. dollar will positively or negatively
affect the reported returns, as the case may be.

G.T. Global believes that this information may be useful to investors
considering whether and to what extent to diversify their investments through
the purchase of mutual funds investing in securities on a global basis. However,
this data is not a representation of the past performance of any of these Funds,
nor is it a prediction of such performance. The performance of the Funds will
differ from the historical performance of the indices represented above. The
performance of indices does not take expenses into account, while each Fund
incurs expenses in its operations, which will reduce performance. Each Fund is
actively managed, i.e., G.T. Capital, as each Fund's investment manager,
actively purchases and sells securities in seeking each Fund's investment
objective. Moreover, each Fund may invest a portion of its assets in corporate
bonds, while the above data relates only to government bonds. Each of these
factors will cause the performance of each Fund to differ from the indices shown
above.

The Funds, from time to time, may be compared with the following to the extent
they apply to investment companies whose shares are offered to insurance company
separate accounts:

(1) The Salomon Brothers Non-U.S. Dollars Indices, which are measures of the
total return performance of high quality non-U.S. dollar denominated
securities in major sectors of the worldwide bond markets.

(2) The Lehman Brothers Long Treasury Bond Index, which is a measure of the
total return on all ten-year and longer U.S. treasuries with a base year of
1980 = $1,000.

(3) The Consumer Price Index, which is a measure of the average change in
prices over time in a fixed market basket of goods and services (e.g., food,
clothing, shelter, fuels, transportation fares, charges for doctors' and
dentists' services, prescription medicines, and other goods and services that
people buy for day-to-day living). There is inflation risk which does not
affect a security's value but its purchasing power; the risk of changing price
levels in the economy that affects security prices or the price of goods and
services.

(4) Data, mutual fund and variable account rankings and comparisons published
or prepared by Lipper Analytical Data Services, Inc. ("Lipper"),
CDA/Wiesenberger Investment Company Services ("CDA/ Wiesenberger"),
Morningstar, Inc. ("Morningstar"), Financial Planning Resources Inc.,
publisher of a compilation of data regarding variable accounts ("VARDS")
and/or other companies that rank or compare mutual funds or variable annuity
account divisions by overall performance, investment objectives, assets,
expense levels, periods of existence and/or other factors. In this regard,
each Fund may be compared to the Fund's "peer group" as defined by Lipper,
CDA/ Wiesenberger, Morningstar, VARDS and/or other firms, as applicable, or to
specific funds or groups of funds within or without such peer group. Lipper
generally ranks funds on the basis of total return, assuming reinvestment of
distributions, but does not take sales charges or redemption fees into
consideration, and is prepared without regard to tax consequences. In addition
to the mutual fund rankings, the Fund's performance may be compared to mutual
fund performance indices prepared by Lipper. Morningstar is a mutual fund
rating service that also rates mutual funds on the basis of risk-adjusted
performance. Morningstar ratings are calculated from a fund's three, five and
ten year average annual returns with appropriate fee adjustments and a risk
factor that reflects fund performance relative to the three-month U.S.
Treasury bill monthly returns. Ten percent of the fund in an investment
category receive five stars and

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Statement of Additional Information Page 58
<PAGE> 113
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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

22.5% receive four stars. The ratings are subject to change each month.

(5) Bear Stearns Foreign Bond Index, which provides simple average returns for
individual countries and GNP-weighted index, beginning in 1975. The returns
are broken down by local market and currency.

(6) Ibbottson Associates International Bond Index, which provides a detailed
breakdown of local market and currency returns since 1960.

(7) Standard & Poor's 500 Composite Stock Price Index which is a widely
recognized index composed of the capitalization-weighted average of the price
of 500 of the largest publicly traded stocks in the United States.

(8) Salomon Brothers Broad Investment Grade Index which is a widely used index
composed of U.S. domestic government, corporate and mortgage-backed fixed
income securities.

(9) Dow Jones Industrial Average.

(10) CNBC/Financial News Composite Index.

(11) Morgan Stanley Capital International World Indices, including, among
others, the Morgan Stanley Capital International Europe, Australia, Far East
Index ("EAFE Index"). The EAFE Index is an unmanaged index of more than 1,000
companies of Europe, Australia and the Far East.

(12) Salomon Brothers World Government Bond Index and Salomon Brothers World
Government Bond Index-Non-U.S. are each a widely used index composed of world
government bonds.

(13) The World Bank Publication of Trends in Developing Countries ("TIDE").
TIDE provides brief reports on most of the World Bank's borrowing members. The
World Development Report is published annually and looks at global and
regional economic trends and their implications for the developing economies.

(14) Salomon Brothers Global Telecommunications Index is composed of
telecommunications companies in the developing and emerging countries.

(15) Datastream and Worldscope each is an on-line database retrieval service
for information including, but not limited to, international financial and
economic data.

(16) International Financial Statistics, which is produced by the
International Monetary Fund.

(17) Various publications and annual reports such as the World Development
Report, produced by the World Bank and its affiliates.

(18) Various publications from the International Bank for Reconstruction and
Development.

(19) Various publications including, but not limited to ratings agencies such
as Moody's Investors Services, Fitch Investors Service, Inc., Standard &
Poor's Ratings Group.

(20) Wilshire Associates which is an on-line database for international
financial and economic data including performance measure for a wide range of
securities.

(21) Bank Rate National Monitor Index, which an average of the quoted rates
for 100 leading banks and thrifts in ten U.S. cities.

(22) International Finance Corporation Emerging Markets Data Base which
provides detailed statistics on stock and bond markets in developing
countries.

(23) Various publications from the Organization for Economic Corporation and
Development.

To the extent that they apply to investment companies whose shares are offered
to insurance company separate accounts, indices, economic and financial data
prepared by the research departments of such financial organizations as Salomon
Brothers, Inc., Lehman Brothers, Merrill Lynch, Pierce, Fenner & Smith, Inc.,
J.P. Morgan, Morgan Stanley, Smith Barney, S.G. Warburg, Jardine Flemming,
Barings Securities, The Bank for International Settlements, Asian Development
Bank, Bloomberg, L.P., and Ibbottson Associates may be used, as well as
information reported by the Federal Reserve and the respective Central Banks of
various nations. In addition, G.T. Global may use performance rankings, ratings
and commentary reported periodically in national financial publications,
including but not limited to Money Magazine, Smart Money, Global Finance,
EuroMoney, Financial World, Forbes, Fortune, Business Week, Latin Finance, The
Wall Street Journal, Emerging Markets Weekly, Kiplinger's Guide To Personal
Finance,

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Statement of Additional Information Page 59
<PAGE> 114
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------------------------------------------------
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

Barron's, The Financial Times, USA Today, The New York Times, Far Eastern
Economic Review, The Economist and Investors Business Digest. Each Fund may
compare its performance to that of other compilations or indices of comparable
quality to those listed above and other indices which may be developed and made
available in the future.

From time to time, each Fund and G.T. Global may refer to the number of
contractholders or the dollar amount of each Fund's assets under management in
advertising materials.

From time to time, each Fund and G.T. Global may refer to the total amount of
assets under BIL GT Group management, or the total amount of assets under
custody with the BIL GT Group, in advertising materials.

G.T. Global believes each Fund is an appropriate investment for long-term
investment goals including, but not limited to funding retirement, paying for
education or purchasing a house. G.T. Global may provide information designed to
help individuals understand their investment goals and explore various financial
strategies. For example, G.T. Global may describe general principles of
investing, such as asset allocation, diversification and risk tolerance. Each
Fund does not represent a complete investment program and the investors should
consider each Fund as appropriate for a portion of their overall investment
portfolio with regard to their long-term investment goals. There is no assurance
that any such information will lead to achieving these goals or guarantee future
results.

From time to time, G.T. Global may refer to or advertise the names of companies,
or their products although there can be no assurance that any G.T. Global
Variable Investment Fund may own the securities of these companies.

Advertising and sales literature for the Contract may discuss the financial
ratings of any of the Participating Insurance Companies as compiled by
independent agencies. These independent agencies rate insurance companies'
overall financial strength, ability to meet contractual obligations, ability to
discharge senior policyholder obligations and claims, overall claims-paying
ability and other financial measures related to long-term solvency and
liquidity. The independent agencies which may be quoted include, but are not
limited to:
- A.M. Best Company
- Moody's Investors Service
- Standard & Poor's Insurance Rating Services
- Duff & Phelps, Incorporated

Ratings descriptions are relevant only to the insurance company and do not apply
to variable annuities or the underlying accounts which are subject to market
risk and whose value will fluctuate with market conditions.

In addition, advertising and sales literature for the Contracts may discuss the
assets of any of the Participating Insurance Companies, including a breakdown of
annuity assets under management, as well as the number of years the company has
been involved in the annuity marketplace.

Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical returns
of the capital markets in the United States, including common stocks, small
capitalization stocks, long-term corporate bonds, intermediate-term government
bonds, long-term government bonds, Treasury bills, the U.S. rate of inflation
(based on the CPI), and combinations of various capital markets. The performance
of these capital markets are based on the returns of different indices.

G.T. Global Variable Investment Funds may use the performance of these capital
markets in order to demonstrate general risk-versus-reward investment scenarios.
Performance comparisons may also include the value of a hypothetical investment
in any of these capital markets. The risks associated with the security types in
any capital market may or may not correspond directly to those of the funds.
Ibbotson calculates total returns in the same method as the funds. The funds may
also compare performance to that of other compilations or indices that may be
developed and made available in the future.

Each Fund may quote various measures of volatility and benchmark correlation in
advertising. In addition, each Fund may compare these measures to those of other
funds. Measures of volatility seek to compare each Fund's historical share price
fluctuations or total returns compared to those of a benchmark. All measures of
volatility and correlation are calculated using averages of historical data.

Each Fund may describe in its sales material and advertisements how an investor
may invest in the G.T. Global Variable Investment Funds through various
retirement accounts and plans that offer deferral of income taxes on investment
earnings and may also enable an investor to make pre-tax

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

contributions. Because of their advantages, these retirement accounts and plans
may produce returns superior to comparable non-retirement investments. The Funds
may also discuss these accounts and plans which include:

SEP-IRAS AND SALARY-REDUCTION SEP-IRAS: Simplified Employee Pension (SEP) plans
and salary-reduction SEPs provide self-employed individuals (and any eligible
employees) with benefits similar to Keogh-type plans or 401(k) plans, but with
fewer administrative requirements and therefore potential lower annual
administration expenses.

403(B)(7) CUSTODIAL ACCOUNTS: Employees of public schools and most other
not-for-profit organizations can make pre-tax salary reduction contributions to
these accounts.

PROFIT SHARING (INCLUDING 401(K)) AND MONEY PURCHASE PENSION PLANS: Corporations
can sponsor these qualified defined contribution plans for their employees. A
401(k) plan, a type of profit sharing plan, additionally permit the eligible,
participating employees to make pre-tax salary reduction contributions to the
plan (up to certain limitations).

G.T. Global may from time to time in its sales materials and advertising discuss
the risks inherent in investing. The major types of investment risks are market
risk, industry risk, credit risk, interest risk and inflation risk. Risk
represents the possibility that you may lose some or all of your investment over
a period of time. A basic tenet of investing is the greater the potential
reward, the greater the risk.

From time to time, the G.T. Global Variable Investment Funds and G.T. Global
will quote information including but not limited to data regarding: individual
countries, regions, world stock exchanges, and economic and demographic
statistics from sources G.T. Global deems reliable including the economic and
financial data of the referenced financial organizations such as:

1) Stock market capitalization: Morgan Stanley Capital International World
Indices, International Finance Corporation and Datastream.

2) Stock market trading volume: Morgan Stanley Capital International World
Indices, International Finance Corporation.

3) The number of listed companies: International Finance Corporation, G.T.
Guide to World Equity Markets, Salomon Brothers, Inc, S.G. Warburg and Barings
Securities.

4) Wage rates: U.S. Department of Labor, Bureau of Labor Statistics and Morgan
Stanley Capital International World Indices.

5) International industry performance: Morgan Stanley Capital International
World Indices, Wilshire Associates and Salomon Brothers, Inc.

6) Stock market performance: Morgan Stanley Capital International World
Indices, International Finance Corporation and Datastream.

7) The Consumer Price Index and inflation rate: The World Bank, Datastream and
International Finance Corporation.

8) Gross Domestic Product (GDP): Datastream and The World Bank.

9) GDP growth rate: International Finance Corporation, The World Bank and
Datastream.

10) Population: The World Bank, Datastream and United Nations.

11) Average annual growth rate (%) of population: The World Bank, Datastream
and United Nations.

12) Age distribution within populations: Organization for Economic Cooperation
and Development and United Nations.

13) Total exports and imports by year: International Finance Corporation, The
World Bank and Datastream.

14) Top three companies by country or market: International Finance
Corporation, G.T. Guide to World Equity Markets, Salomon Brothers Inc, S.G.
Warburg and Barings Securities.

15) Foreign direct investments to developing countries: The World Bank and
Datastream.

From time to time, G.T. Global may include in its advertisement and sales
material information about privatization which is an economic process involving
the sale of state-owned companies to the private sector.

In advertising and sales materials, G.T. Global may make reference to or discuss
its products, services and accomplishments. Among these accomplishments are that
in 1983 G.T. Global provided assistance to the government of Hong

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

Kong in linking its currency to the U.S. dollar, and that in 1987 Japan's
Ministry of Finance licensed G.T. Management (Japan) Ltd. as one of the first
foreign discretionary investment managers for Japanese investors. Such
accomplishments, however, should not be viewed as an endorsement of G.T. Global
by the government of Hong Kong, Japan's Ministry of Finance or any other
government or government agency. Nor do any such accomplishments of G.T. Global
provide any assurance that the G.T. Global Variable Investment Funds' investment
objectives will be achieved.

THE G.T. ADVANTAGE

G.T. Capital has developed a unique team approach to its global money management
which we call the G.T. Advantage. G.T. Capital's money management style combines
the best of the "top-down" and "bottom-up" investment manager strategies. The
top-down approach is implemented by G.T. Capital's Investment Policy Committee
which sets broad guidelines for asset allocation and currency management based
on G.T. Capital's own macroeconomic forecasts and research from our worldwide
offices. The bottom-up approach utilizes regional teams of individual portfolio
managers to implement the committee's guidelines by selecting local securities
that offer both strong income and/or growth potential.

EQUITY MARKET DIVERSIFICATION

As indicated by the following table, a globally diversified equity portfolio for
the ten year period ended December 31, 1994, resulted in greater return and
reduced risk (as measured by price volatility) relative to a portfolio
consisting solely of U.S. equities. The following chart was prepared by G.T.
Capital. It uses the Morgan Stanley Capital International EAFE Index as a
"proxy" for the non-North America investment universe ("Non-U.S.") and the
Standard & Poor's 500 Index as a "proxy" for the universe of U.S. stocks
("U.S."). All dividends and distributions were assumed to be reinvested. The
time period shown was generally a period of increasing market prices for global
equity securities.

EQUITY MARKET DIVERSIFICATION
10 YEARS ENDED DECEMBER 31, 1994

<TABLE>
<CAPTION>
AVERAGE ANNUAL
PORTFOLIO STANDARD TOTAL
% NON-U.S./% U.S. DEVIATION(%) RETURN(%)
- ----------------- ------------ --------------
<S> <C> <C>
100/0 19.35 17.89
90/10 18.15 17.59
80/20 17.06 17.27
70/30 16.11 16.95
60/40 15.32 16.61
50/50 14.73 16.27
40/60 14.35 15.92
30/70 14.20 15.56
20/80 14.29 15.19
10/90 14.61 14.81
0/100 15.16 14.42
</TABLE>

Source: Morgan Stanley Capital International (MSCI) Europe, Australia, Far East
(EAFE) Index vs. MSCI U.S. Index, December 31, 1994. Prepared by G.T. Capital
Management, Inc.

Standard deviation of returns is a statistical measure of the degree to which a
value tends to vary from its average annual mean. In general, greater risk must
be assumed to generate greater returns. This data may not correspond to the
actual performance of any of the G.T. Global Variable Investment Funds. The bar
chart below shows the yield to maturity, as of December 31, 1994 (including
future interest payments and principal repayment at par for 10-year government
bonds, as priced by Salomon Brothers, Inc.). This data is based on U.S. dollar
values for the period shown. The actual yield will differ depending on whether
the bonds are held to maturity and on exchange rates at the time of maturity.
Historical yields are not necessarily indicative of future yields nor will they
correspond to the yields of the Funds. Yields to maturity over longer periods
have fluctuated greatly.

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<PAGE> 117
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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

GOVERNMENT BONDS
YEAR-END YIELDS TO MATURITY
<TABLE>
<CAPTION>
U.S. CANADA GERMANY JAPAN U.K. SWITZ. NETH. FRANCE
----- ------ ------- ----- ----- ----- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1994....................................... 7.82 9.14 7.62 4.57 8.71 5.22 7.75 8.27
1993....................................... 6.35 6.61 5.54 3.18 6.39 4.06 5.56 5.60
1992....................................... 6.67 7.95 7.27 4.70 8.16 5.85 7.29 8.09
1991....................................... 6.70 8.26 7.92 5.51 9.80 6.30 8.33 8.40
1990....................................... 8.09 10.27 8.70 6.53 10.93 6.37 8.98 10.00
1989....................................... 7.90 9.63 7.27 5.57 10.58 5.67 7.59 8.93
1988....................................... 9.19 10.17 6.54 4.70 10.07 4.11 6.46 8.43
1987....................................... 8.86 10.09 6.56 4.90 9.65 3.74 6.74 9.82
1986....................................... 7.23 8.75 6.05 5.30 10.54 4.32 6.25 8.87
1985....................................... 9.01 9.63 6.28 6.18 10.96 4.46 6.81 10.10
1984....................................... 11.52 11.58 7.00 6.76 11.16 4.65 7.72 12.70

<CAPTION>
AUSTL.
-----
<S> <C>
1994....................................... 9.99
1993....................................... 6.68
1992....................................... 8.95
1991....................................... 9.35
1990....................................... 12.04
1989....................................... 12.93
1988....................................... 12.85
1987....................................... 12.84
1986....................................... 13.27
1985....................................... 14.86
1984....................................... 13.50
</TABLE>

The following charts show total returns as of December 31 for the years 1985
through 1994, on bonds issued by various governments. All returns are calculated
in U.S. dollars and include reinvestment of gross yields, and do not assure
deduction of any withholding taxes. These charts were prepared by G.T. Capital
based on Salomon Brothers, Inc. indexes of government bonds with remaining
maturities of at least one year. The time periods shown were generally a period
of decreasing interest rates and increasing market prices for global fixed
income securities.

GOVERNMENT BONDS
ANNUAL TOTAL RETURNS

<TABLE>
<CAPTION>
AUSTRALIA BELGIUM CANADA FRANCE GERMANY ITALY JAPAN U.K. USA
-------- ------- ------ ------ ------- ------- ------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1994......... 6.88% 12.22% -9.86% 4.37% 9.98% 4.57% 8.88% -1.54% -3.36%
1993......... 15.66% 4.00% 12.01% 13.15% 6.70% 11.08% 27.58% 19.53% 10.69%
1992......... -0.26% 7.64% -0.42% 4.27% 5.94% -13.88% 10.84% -4.12% 7.21%
1991......... 23.49% 10.89% 21.59% 12.51% 9.75% 13.24% 22.46% 12.65% 15.30%
1990......... 16.24% na 7.69% 23.52% 15.36% na 7.83% 30.88% 8.62%
1989......... 5.62% na 16.23% 9.14% 6.35% na -14.26% -3.91% 14.40%
1988......... 28.80% na 19.41% 1.63% -7.12% na 3.04% 2.44% 7.07%
1987......... 28.99% na 10.00% 26.58% 29.38% na 38.12% 46.61% 1.93%
1986......... 16.64% na 15.72% 34.09% 37.17% na 40.09% 14.77% 15.73%
1985......... -12.06% na 14.80% 50.51% 43.02% na 36.85% 40.18% 20.94%
10 Year Average Annualized Returns from 12/84-12/94
12.28% na 10.32% 17.10% 14.81% na 16.88% 14.47% 9.64%
</TABLE>

Source: Salomon Brothers, Inc. Countries identified as "na" were not part of the
Salomon Brothers World Government Bond Index during the years indicated.

From time to time, each Fund and G.T. Global may quote data for stock market
trading volume and number of listed companies for various countries, from
information provided by the International Finance Corporation (IFC).

Further, from time to time, each Fund and G.T. Global may also quote information
similar to that described above, including such data from established markets
from, but not limited to, other sources such as S.G. Warburg, Salomon Brothers,
Inc and Datastream.

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<PAGE> 118
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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

Each Fund and G.T. Global, from time to time, may quote information on stock
market capitalization and may show the performance of certain national stock
markets. The table below, prepared by G.T. Capital, includes performance data
through December 31, 1994, relating to the various nations' stock markets as
measured by Morgan Stanley Capital International World Stock Market indices. The
results assume reinvestment of all dividends and are reported in U.S. dollars
after currency translation at reported December 31, 1994 exchange rates. The
performance of the stock markets shown does not reflect expenses and will not
correspond to the performance of the Funds, which are actively managed and incur
expenses.

MORGAN STANLEY CAPITAL INTERNATIONAL
INTERNATIONAL INDICES 12/31/94 (US$, GROSS DIVIDENDS REINVESTED)

<TABLE>
<CAPTION>
MARKET ANNUALIZED RETURNS (%)
CAPITALIZATION ----------------------------------------
(US$ BN)+ 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C>
International Indices
THE WORLD................................... 7,592.9 5.58 7.42 4.24 15.51
NORTH AMERICA............................... 2,918.2 1.73 6.07 8.52 13.94
EAFE........................................ 4,661.8 8.06 8.19 1.82 17.89
EUROPE 14................................... 2,084.1 2.66 8.46 6.98 18.99
NORDIC COUNTRIES............................ 156.2 20.57 11.62 5.06 19.79
PACIFIC..................................... 2,577.6 13.03 7.93 -1.62 17.06
FAR EAST.................................... 2,436.8 13.45 7.78 -2.07 17.22
Free Indices
THE WORLD FREE.............................. 7,602.4 5.57 7.43 4.27
EAFE FREE................................... 4,671.3 -4.17 7.57 1.78
EUROPE 14 FREE.............................. 2,080.5 -3.09 8.28 7.11
EUROPE 14 FREE EX UK........................ -0.57 10.02 6.44
NORDIC COUNTRIES FREE....................... 152.6 4.91 12.16 6.51
PACIFIC FREE................................ 2,590.9 -5.04 7.06 -1.76
PACIFIC FREE EX JAPAN....................... -18.65 14.34 14.00
FAR EAST FREE............................... -4.81 6.91 -2.18
Special Areas
THE WORLD EX USA............................ 7.64 7.93 1.76 17.13
EAFE + CANADA............................... 7.65 7.89 1.76 17.29
KOKUSAI (WORLD EX JAPAN).................... 0.55 7.85 8.35 15.51
EASEA (EAFE EX JAPAN)....................... -0.77 9.83 8.05 18.98
PACIFIC EX JAPAN............................ -13.99 18.42 15.31 18.80
THE WORLD EX THE UK......................... 6.48 7.63 3.82 15.21
EAFE EX THE UK.............................. 10.22 8.74 0.70 17.97
EUROPE 14 EX THE UK......................... 1,351.6 5.27 10.22 6.08 19.87
THE WORLD EX AUSTRALIA...................... 5.57 7.39 4.19 15.51
National Indices
AUSTRALIA................................... 122.8 6.48 9.48 8.37 15.98
AUSTRIA..................................... 17.5 -6.05 2.74 0.40 23.31
BELGIUM..................................... 48.5 9.43 10.92 7.23 24.90
CANADA...................................... 168.1 -2.43 0.76 0.12 8.17
DENMARK..................................... 34.4 4.25 0.09 3.17 17.17
FINLAND..................................... 25.9 52.47 34.70 6.81
FINLAND FREE................................ 25.9 52.47 33.65 7.77
FRANCE...................................... 275.0 -4.70 6.20 4.23 20.83
GERMANY..................................... 290.1 5.11 8.95 5.09 18.73
GREECE...................................... 7.6 -0.78 -0.81 8.05
HONG KONG................................... 154.1 -28.90 26.79 27.18 26.50
IRELAND..................................... 12.1 14.50 8.71 3.71
ITALY....................................... 98.5 12.13 4.52 -1.54 17.14
JAPAN....................................... 2,121.1 21.62 6.36 -3.43 16.86
MALAYSIA.................................... 105.3 -19.94 25.57 13.86
NETHERLANDS................................. 163.9 12.66 16.74 13.18 22.05
NEW ZEALAND................................. 18.1 10.27 23.39 7.57
</TABLE>

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<PAGE> 119
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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

<TABLE>
<CAPTION>
MARKET ANNUALIZED RETURNS (%)
CAPITALIZATION ----------------------------------------
(US$ BN)+ 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C>
NORWAY...................................... 18.5 24.07 11.39 3.49 16.03
NORWAY FREE................................. 14.8 27.41 13.14 4.78
PORTUGAL.................................... 8.5 11.95 8.01 -3.48
SINGAPORE................................... 56.3 6.68 23.95 16.02 16.50
SINGAPORE FREE.............................. 69.5 5.81 24.23 18.65
SPAIN....................................... 80.0 -3.93 -0.08 0.37 20.05
SWEDEN...................................... 77.4 18.80 12.22 5.37 21.43
SWEDEN FREE................................. 77.4 18.80 15.40 7.70
SWITZERLAND................................. 210.0 4.18 21.77 14.81 21.32
SWITZERLAND FREE............................ 210.0 4.18 21.97 14.85
UNITED KINGDOM.............................. 732.6 -1.63 5.65 8.58 17.73
USA......................................... 2,750.1 2.00 6.42 9.16 14.36
EAFE (GDP WEIGHTED)......................... 8.21 9.65 3.97 19.91
Emerging Markets
EMG (EMERGING MARKETS GLOBAL)............... 840.4 -1.07 20.41 9.52
EMG FAR EAST................................ 469.4 1.05 21.99 2.43
EMG LATIN AMERICA........................... 281.0 -3.69 19.73 32.62
EMF (EMERGING MARKETS FREE)................. 594.2 -7.32 21.76 20.89
EMF FAR EAST................................ 235.5 -13.97 26.90 13.12
EMF LATIN AMERICA........................... 268.7 0.64 20.66 32.23
INDIA....................................... 55.2 9.93
INDONESIA................................... 22.1 -25.92 14.98 -2.15
KOREA....................................... 121.5 23.67 18.17 0.26
MALAYSIA.................................... 105.3 -19.94 25.57 13.86
PAKISTAN.................................... 6.9 -7.09 0.00 0.00
PHILIPPINES................................. 20.9 0.80 47.51 21.44
PHILIPPINES FREE............................ 13.2 -7.88 41.69 23.46
SRI LANKA................................... 1.3 -3.03
TAIWAN...................................... 129.0 20.78 19.40 -2.98
THAILAND.................................... 70.6 -9.03 35.86 17.47
ARGENTINA................................... 24.2 -23.63 -9.39 28.67
BRAZIL...................................... 94.8 65.73 46.49 26.87
CHILE....................................... 38.8 44.76 34.06 46.83
COLOMBIA.................................... 7.3 21.30
MEXICO...................................... 108.4 -43.39 2.94 29.69
MEXICO FREE................................. 96.7 -40.55 3.53 32.47
PERU........................................ 4.3 45.42
VENEZUELA................................... 3.0 -34.14
VENEZUELA FREE.............................. 2.4 -14.55
GREECE...................................... 7.6 -0.78 -0.81 8.05
ISRAEL...................................... 13.2
ISRAEL -- DOMESTIC.......................... 10.9
ISRAEL -- NON DOMESTIC...................... 2.3
JORDAN...................................... 1.2 -8.70 15.66 10.60
PORTUGAL.................................... 8.5 11.95 8.01 -3.48
TURKEY...................................... 9.3 -50.49 -4.23 -7.47
COMBINED FAR EAST FREE...................... 2,580.2 12.07 8.44 -1.68
COMBINED FAR EAST EX JAPAN.................. 679.8 -7.40 24.17 9.17
COMB FAR EAST FREE EX JAPAN................. 459.2 -17.48 26.91 20.14
EAFE AND EMG................................ 5,396.8 6.42 8.79 2.22
EAFE AND EMF................................ 5,150.7 5.91 8.39 2.25
ALL-COUNTRY WORLD INDEX..................... 8,344.7 3.85 7.50 4.21
</TABLE>

+ Market capitalization is not a measure of investment performance. Accordingly,
the above market capitalization figures are not intended to illustrate
investment performance in any individual developing market. Although the
period December 31, 1984 to December 31, 1994 was one of growing market
capitalization throughout the world, market capitalization in certain emerging
markets encountered periods of volatility rather than a steadily increasing
trend.

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

Statement of Additional Information Page 65
<PAGE> 120
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------------------------------------------------
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

The Fund and G.T. Global may also quote information similar to that shown above
from other sources, but not limited to, the International Finance Corporation
(IFC), S.G. Warburg, Salomon Brothers, Wilshire Associates, Inc. and Datastream.

MORGAN STANLEY CAPITAL INTERNATIONAL
INTERNATIONAL INDUSTRY INDICES DECEMBER 31, 1994 (US$ WITHOUT DIVIDENDS)

<TABLE>
<CAPTION>
MARKET ANNUALIZED RETURNS (%)
CAPITALIZATION ----------------------------------------
(US$ BN) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C>
Energy
ENERGY SOURCES............................... 447.6 5.40 4.05 2.35 10.72
UTILITIES -- ELECTRICAL & GAS................ 412.8 -11.94 -0.05 -1.03 9.88
Sector............................................ 860.4
Materials
BUILDING MATERIALS & COMPONENTS.............. 107.9 -4.87 5.17 -1.34 13.68
CHEMICALS.................................... 303.5 15.59 7.33 2.47 14.06
FOREST PRODUCTS & PAPER...................... 111.2 9.97 5.74 0.96 10.76
METALS -- NON FERROUS........................ 92.1 12.77 9.54 1.49 10.42
METALS -- STEEL.............................. 109.8 26.99 6.24 -7.78 13.56
MISC. MATERIALS & COMMODITIES................ 73.1 9.52 6.97 -0.72 12.00
Sector............................................ 797.6
Capital Equipment
AEROSPACE & MILITARY TECHNOLOGY.............. 59.1 6.34 8.97 6.06 7.13
CONSTRUCTION & HOUSING....................... 103.1 2.36 -5.42 -9.33 16.82
DATA PROCESSING & REPRODUCTION............... 107.0 22.96 -0.53 -3.43 -1.20
ELECTRICAL & ELECTRONICS..................... 264.9 3.77 7.35 2.80 11.80
ELECTRONIC COMPONENTS & INSTRUMENTS.......... 177.2 15.59 7.33 2.47 14.06
ENERGY EQUIPMENT & SERVICES.................. 20.7 -13.03 -3.86 -3.90 3.21
INDUSTRIAL COMPONENTS........................ 126.7 16.11 14.02 2.49 12.22
MACHINERY & ENGINEERING...................... 177.8 18.97 9.29 0.32 14.45
Sector............................................ 1036.5
Consumer Goods
APPLIANCES & HOUSEHOLD DURABLES.............. 136.5 18.11 10.40 0.39 11.20
AUTOMOBILES.................................. 233.7 12.06 15.36 2.61 12.27
BEVERAGES & TOBACCO.......................... 260.5 4.93 -1.30 6.57 18.26
FOOD & HOUSEHOLD PRODUCTS.................... 277.8 5.12 2.10 4.68 17.21
HEALTH & PERSONAL CARE....................... 517.4 9.54 -0.91 8.69 17.09
RECREATION, OTHER CONSUMER
GOODS...................................... 93.5 9.20 4.78 1.49 9.86
TEXTILES & APPAREL........................... 30.9 5.21 -3.29 -5.32 11.12
Sector............................................ 1550.3
Services
BROADCASTING & PUBLISHING.................... 143.4 0.80 13.97 5.08 13.77
BUSINESS & PUBLIC SERVICES................... 267.2 9.71 10.04 5.61 13.82
LEISURE & TOURISM............................ 114.3 -2.56 11.13 3.04 15.59
MERCHANDISING................................ 389.4 -2.54 2.66 5.45 15.15
TELECOMMUNICATIONS........................... 375.5 -5.99 5.72 3.36 11.47
TRANSPORTATION -- AIRLINES................... 50.1 4.61 0.86 -3.68 10.67
TRANSPORTATION -- ROAD & RAIL................ 103.8 -0.70 3.59 -4.67 12.25
TRANSPORTATION -- SHIPPING................... 36.5 7.17 4.04 -4.12 15.00
WHOLESALE & INTERNATIONAL TRADE.............. 66.0 35.10 9.31 -3.01 14.63
Sector............................................ 1546.2
</TABLE>

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

Statement of Additional Information Page 66
<PAGE> 121
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------------------------------------------------
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

The Fund(s) and G.T. Global may also quote information from, but not limited to,
the International Finance Corporation (IFC), S.G. Warburg, Salomon Brothers,
World Scope, Bloomberg, Datastream and Wilshire Associates, Inc.

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

Statement of Additional Information Page 67
<PAGE> 122
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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

From time to time, each Fund and G.T. Global may quote information on the top
companies listed on an exchange or index for countries around the world such as,
but not limited to, those listed below.

Further, from time to time, G.T. Global and each Fund will quote information
similar to that described below from sources other than G.T. Capital Management
Inc. such as, but not limited to, S.G. Warburg, Morgan Stanley Capital
International, Wilshire Associates, Inc. and World Scope. There can be no
assurance that any of the G.T. Global Mutual Funds will own or continue to own
the securities of the companies listed below.

THREE LARGEST COMPANIES

<TABLE>
<S> <C>
MEXICO Telmex
Banacci
Tlevisa
CHILE Telefonos
Endesa
Enersis
ARGENTINA VPF
Telefonica de Argentina
Telecom Arg. Stet-France Telecom.
BRAZIL Telebras
Electrobras
Petrobras
JAPAN Mitsubishi Bank
Industrial Bank of Japan
Toyota Motor
HONG KONG HSBC Holdings plc
Hong Kong Telecommunications
Sun Hung Kai Properties
SOUTH KOREA KEPCO
POSCO
Samsung Electronics
TAIWAN Cathjay Life Insurance Co. Ltd.
Hua Nan Commercial Bank
First Commercial Bank
SINGAPORE Singapore Telecom Ltd.
OCBC Bank Ltd.
Singapore Airlines Ltd.
MALAYSIA TNB
Telekom
Resorts
THAILAND Telecomasia
Bangkok Bank
Shinawatra
INDONESIA Barito Pacific Timber
Astra Int'l Inc.
H M Sampoerna
PHILIPPINES San Miguel Corp. (A & B)
Philippine Long Distance
Telephone Co.
Ayala Corp. (A & B)
AUSTRALIA BHP
News Corporation
National Australia Bank
NEW ZEALAND Telecom Corporation of
New Zealand Ltd.
Carter Holt Harvey Ltd.
Fletcher Challenge Ltd. --
Ordinary Division
UNITED KINGDOM British Telecommunications
HSBC Holdings
Shell Transport & Trading Co.
(The)
GERMANY Allians AG Holding N-AKT
Siemens AG
Deutsche Bank AG
FRANCE Alcatel Alsthom
Elf Aquitaine
Eaux (Cie Gie des)
NETHERLANDS Royal Dutch
Unilever Cert.
Internationale Nederlanden Groep
SPAIN Endesa
Telefonica
Bayer AG
ITALY Generali Assicurazioni
Sip
Stet
SWITZERLAND Roche
Nestle
UBS
SWEDEN Astra
Ericsson
ASEA
DENMARK Novo Nordisk B
Den Danske Bank
Sophus Berendsen
NORWAY Norsk Hydro
Hafslund Nycomed
Kvaerner
FINLAND Nokia Corporation
Repola Ltd.
Kymmene Corporation
U.S. (NYSE) Exxon Corp
General Electric Co.
Coca Cola Co.
CANADA General Motors
Mobil Corporation
Ford Motor Co.
</TABLE>

Source: The G.T. Guide to World Equity Markets 1994-1995. Euromoney Publications
Plc, 1994.

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

WAGE RATES

From time to time the Fund and G.T. Global may quote data on wage rates for, but
not limited to, the following countries:

US$ PER HOUR

<TABLE>
<S> <C>
Germany............................................................... $25.56
Switzerland........................................................... $22.66
Japan................................................................. $19.20
Sweden................................................................ $17.91
U.S................................................................... $16.79
Canada................................................................ $16.36
France................................................................ $16.31
Italy................................................................. $15.97
UK.................................................................... $12.82
Australia............................................................. $12.25
Spain................................................................. $11.53
New Zealand........................................................... $ 8.01
Singapore............................................................. $ 5.38
South Korea........................................................... $ 5.37
Taiwan................................................................ $ 5.23
Asian NIE's........................................................... $ 5.15
Portugal.............................................................. $ 4.60
Hong Kong............................................................. $ 4.31
Mexico................................................................ $ 2.65
</TABLE>

Source: U.S. Department of Labor, Bureau of Labor Statistics, International
Comparison of Hourly Compensation Costs for Production Workers in Manufacturing,
1993, Report 873, June 1994.

G.T. Global and each Fund may also quote information similar to that shown above
from other sources such as, but not limited to, Morgan Stanley, S.G. Warburg and
the U.S. Department of Labor.

From time to time, each Fund and G.T. Global may quote and compare real GDP
growth rates of emerging and established countries.

REAL GDP GROWTH RATES (ANNUAL PERCENT CHANGE)

<TABLE>
<CAPTION>
ESTABLISHED EMERGING
COUNTRIES COUNTRIES
---------- ---------
<S> <C> <C>
1994.................................................... 3.0% 6.3%
1993.................................................... 1.2% 6.1%
1992.................................................... 1.6% 5.9%
1991.................................................... 0.6% 4.4%
1990.................................................... 2.4% 3.7%
1989.................................................... 3.3% 4.0%
1988.................................................... 4.4% 5.3%
1987.................................................... 3.2% 5.7%
1986.................................................... 2.9% 5.0%
</TABLE>

Source: International Monetary Fund, May 1995, World Economic Outlook, May 1995.

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Statement of Additional Information Page 69
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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

From time to time, each Fund and G.T. Global may quote the most currently
available data for GDP, GDP Growth, Population, Per Capita GDP, Total Exports,
Total Imports and Inflation Rates for, but not limited to, the following
countries:

<TABLE>
<CAPTION>
GDP GDP GROWTH POPULATION TOTAL EXPORTS TOTAL IMPORTS INFLATION
(US$ MILLIONS) RATE (%) (MILLIONS) (US$ MILLIONS) (US$ MILLIONS) RATE (%)
-------------- ---------- ---------- -------------- -------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Hong Kong............. 77,828 5.5 5.8 30,251 123,427 8.5
China................. 506,075 13.1 1,162.2 84,940 80,585 13.0
South Korea........... 296,136 5.3 43.7 76,394 81,413 4.8
Taiwan................ na 5.7 na 88,337 70,071 2.9
Singapore............. 46,025 9.8 2.8 63,386 72,067 2.4
Malaysia.............. 57,568 7.4 18.6 40,705 38,361 3.6
Indonesia............. 126,364 6.5 184.3 33,815 27,280 9.7
Thailand.............. 110,337 7.8 58.0 32,473 40,466 3.3
Philippines........... 52,462 1.8 64.3 9,790 15,465 7.6
India................. 214,598 4.1 883.6 19,795 22,530 9.9
Pakistan.............. 41,904 5.1 119.3 7,264 9,360 8.7
Australia............. 294,760 3.0 17.5 38,045 42,140 1.1
New Zealand........... 41,304 3.7 3.4 9,338 9,200 1.6
Japan................. 3,670,979 0.1 124.5 339,492 230,975 1.3
Brazil................ 360,405 5.0 153.9 35,956 23,115 2,103.3
Mexico................ 329,011 0.4 85.0 27,166 47,877 9.8
Argentina............. na 6.0 33.1 12,235 14,864 10.6
Venezuela............. 61,137 -1.0 20.2 13,997 12,222 38.7
Chile................. 41,203 6.0 13.6 9,646 9,456 12.7
Portugal.............. 79,547 -0.8 9.8 18,541 30,482 6.8
Turkey................ 99,696 6.8 58.5 14,715 22,871 65.5
Poland................ 83,823 4.0 38.4 13,324 15,309 35.3
Hungary............... 35,218 -1.6 10.3 10,700 11,078 22.5
Greece................ 67,278 na 10.3 9,842 23,407 14.0
United Kingdom........ 903,126 1.9 57.8 190,481 221,658 3.4
France................ 1,319,883 -0.7 57.4 231,452 238,299 2.1
Netherlands........... 320,290 3.0 15.2 139,919 134,376 1.5
Spain................. 574,844 -1.0 39.1 64,302 99,473 4.3
Italy................. 1,222,962 -7.0 57.8 178,349 184,510 4.4
Switzerland........... 241,406 -0.7 6.9 65,616 65,603 2.3
Sweden................ 220,834 -1.7 8.7 55,933 49,849 2.9
Norway................ 112,906 1.8 4.3 35,178 25,897 2.4
Finland............... 93,869 -2.6 5.0 23,515 20,741 1.2
Denmark............... 123,546 0.3 5.2 39,570 33,601 1.2
United States......... 5,920,199 3.0 255.4 420,812 551,591 3.0
</TABLE>

Sources: 1992 GDP, mid-1992 population, 1992 exports and 1992 imports, The World
Development Report 1994, The World Bank, June 1994, 1993 GDP Growth Rate and
1993 Inflation Rate, World Economic Outlook -- October 1994, International
Monetary Fund, October 1994.

G.T. Global and each Fund may also quote the information from other sources such
as, but not limited to, International Financial Statistics, an IMF publication,
and Trends in Developing Economies, a World Bank publication.

Further, the Funds in their advertising and sales material sent to prospective
investors may refer to the increasing importance of an investment strategy which
includes global investments, the potential benefits of tax-deferral and
diversification through the purchase of a financial product which invests in
mutual funds that invest in securities on a global basis and may indicate that
potential investors may consider diversifying their investment portfolios in
order to seek protection of the value of their assets against inflation.

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

NUMBER OF LISTED COMPANIES AND TRADING VOLUME

<TABLE>
<CAPTION>
NUMBER ANNUAL
OF LISTED TRADING VOLUME
COMPANIES (US$ MILLIONS)
--------- ---------------
<S> <C> <C>
Canada............................ 1,124 142,222
U.S............................... 7,607 3,507,223
Argentina......................... 180 10,339
Brazil............................ 550 57,409
Chile............................. 263 2,797
Columbia.......................... 89 732
Mexico............................ 190 62,454
Venezuela......................... 93 1,874
Korea............................. 693 211,710
Philippines....................... 180 6,785
Taiwan............................ 183 43,395
India............................. 6,800 21,879
Indonesia......................... 174 9,158
Malaysia.......................... 410 153,661
Pakistan.......................... 653 1,844
Hong Kong......................... 450 131,550
Singapore......................... 178 81,623
Japan............................. 2,155 954,341
Australia......................... 1,070 67,711
New Zealand....................... 136 6,785
Greece............................ 143 2,713
Jordan............................ 101 1,377
Nigeria........................... 174 10
Portugal.......................... 183 4,835
Turkey............................ 152 23,242
UK................................ 1,646 423,526
France............................ 472 174,283
Germany........................... 426 302,985
</TABLE>

Source: Emerging Stock Markets Factbook 1994, International Finance Corporation
(IFC), June 1994.

In addition, the G.T. Global: Variable Strategic Income Fund, from time to time,
may quote yields and total returns of representative debt instruments from the
following emerging market countries in its advertising and sales literature:

<TABLE>
<S> <C> <C>
Argentina Hungary Poland
Brazil India Russia
Chile Malaysia South Korea
China Mexico Thailand
Ecuador Morocco Turkey
Finland Nigeria Venezuela
Greece Portugal
</TABLE>

G.T. believes that before emerging market countries with high debt levels can
attract substantial amounts of foreign capital, they must put their financial
houses in order. Some emerging markets governments have implemented debt
restructuring programs. From time to time, each Fund may include in its
advertising and sales material information on emerging market countries' debt
restructuring activities.

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

COUNTRIES CURRENTLY RESTRUCTURING UNDER THE BRADY PLAN:

<TABLE>
<CAPTION>
FIRST BOND
ISSUANCE
--------------
<S> <C>
Mexico............................ March 1990
Costa Rica........................ May 1990
Venezuela......................... December 1990
Nigeria........................... January 1992
Philippines....................... December 1992
Argentina......................... April 1993
Brazil............................ April 1994
Poland............................ October 1994
Ecuador........................... In progress
Peru.............................. In progress
Panama............................ In progress
</TABLE>

Source: G.T. Capital Management, Inc., October 1994.

The following table indicates that from April 1, 1990 to February 1, 1995, a
portfolio of global government bonds further diversified to include Brady Bonds
issued by governments in developing countries was shown to have reduced
volatility while increasing returns. In producing the following table, the
Salomon Brothers Brady Bond Index was used as a "proxy" for the universe of
Brady Bonds and the Salomon Brothers World Government Bond Index was used as a
"proxy" for the universe of global government bonds. All distributions and
interest payments were deemed to reinvested in the appropriate index on a
monthly basis.

Salomon Brothers Brady Bond Index vs. Salomon World Government Bond Index April
1, 1990 -- February 1, 1995.

DIVERSIFICATION EFFECTS OF THE BRADY BOND INDEX, 1 APRIL 1990-1 FEBRUARY, 1995

<TABLE>
<CAPTION>
ANNUAL
PORTFOLIO* RETURN (%) VOLATILITY
--------------------------- ---------- ---------
<S> <C> <C>
100% BBI/ 0% WGBI.............................................. 16.80 13.71
90% BBI/ 10% WGBI.............................................. 16.25 12.41
80% BBI/ 20% WGBI.............................................. 15.71 11.14
70% BBI/ 30% WGBI.............................................. 15.17 9.92
60% BBI/ 40% WGBI.............................................. 14.63 8.76
50% BBI/ 50% WGBI.............................................. 14.09 7.70
40% BBI/ 60% WGBI.............................................. 13.55 6.78
30% BBI/ 70% WGBI.............................................. 13.01 6.07
20% BBI/ 80% WGBI.............................................. 12.47 5.64
10% BBI/ 90% WGBI.............................................. 11.93 5.57
0% BBI/100% WGBI.............................................. 11.38 5.86
</TABLE>

* BBI=Salomon Brothers Brady Bond Index. WGBI=Salomon Brothers World Government
Bond Index.

Source: Salomon Brothers, Inc. Brady Bonds are denominated in U.S. dollars and
therefore involve no currency risk relative to the dollar; results would have
been different with respect to non-dollar denominated emerging market debt.

Charts prepared by G.T. Capital Management, Inc.

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

ECONOMIC DEVELOPMENT IN EMERGING MARKETS

G.T. has identified six phases to track the progress of developing economies.

In addition, G.T. focuses on the transitions between each phase:

Between Phases 1 & 2, Stabilization: Developing nations recognize the need for
economic reform and launch initiatives to stabilize their economies. Typical
measures might include initiating monetary reforms to contain inflation,
controlling government spending, and addressing external trade imbalances.

Between Phases 2 & 3, Renovation: Economic development gathers momentum as the
governments of developing nations take further steps to increase productivity
and external competitiveness. Typical reforms include easing market regulations,
privatizing state-owned industries, lowering trade barriers and reforming the
national tax structure.

Between Phases 3 & 4, New Construction: As economic reforms take hold,
infrastructure improvements are needed to facilitate and support long-term
growth. The construction and upgrading of highways and airports, communications
and utility systems generally require financing in the form of public debt.
Similarly, as the private sector develops, bolstered by new privatizations,
corporate debt securities typically are issued to finance business expansion.

EMERGING MARKET TRADING

The annual trading volume of debt securities from developing economies according
to Salomon Brothers, Inc. has grown from $90 billion in 1990, to $150 billion in
1991, to $400 billion in 1992 and was estimated to be $1,200 billion at the end
of 1993 and $1.5 trillion at the end of 1994, respectively.

INFORMATION ABOUT CURRENT GLOBAL ECONOMIC CONDITIONS

G.T. believes that there is a current worldwide trend toward disinflation which
can provide a superior environment for global bond investing. As of December 31,
1993, ISI Group (for years 1963-1992) and Bloomberg L.P. (1993) reports that the
average inflation rates of the U.S., Japan, Germany the UK, France and Canada
are approaching their lowest levels since 1963 (the low during this time period
was reported in 1986). We believe that the current disinflationary environment
should eventually lead to lower interest rates globally and could provide the
potential for capital appreciation.
- --------------------------------------------------------------------------------

DESCRIPTION OF DEBT RATINGS
- --------------------------------------------------------------------------------

DESCRIPTION OF COMMERCIAL PAPER RATINGS

Moody's Investors Service, Inc. ("Moody's") employs the designations "Prime-1,"
and "Prime-2" to indicate commercial paper having the highest capacity for
timely repayment. Issuers rated Prime-1 (for supporting institutions) have a
superior ability for repayment of short-term debt obligations. Prime-1 repayment
capacity normally will be evidenced by many of the following characteristics:
leading market positions in well-established industries; high rates of return on
funds employed; conservative capitalization structures with moderate reliance on
debt and ample asset protections; broad margins in earnings coverage of fixed
financial charges and high internal cash generation; and well-established access
to a range of financial markets and assured sources of alternate liquidity.
Issuers rated Prime-2 (for supporting institutions) have a strong ability for
repayment of short-term debt obligations. This normally will be evidenced by
many of the characteristics cited above, but to a lesser degree. Earnings trends
and coverage ratios, while sound, may be more subject to variation.
Capitalization characteristics, while
still appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.

Ratings by Standard & Poor's ("S&P") of commercial paper are graded into four
categories ranging from "A-1" for the highest quality obligations to "D" for the
lowest. A-1 -- This

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

highest category indicates that the degree of safety regarding timely payment is
strong. Those issues determined to possess extremely strong safety
characteristics will be denoted with a plus sign (+) designation.
A-2 -- Capacity for timely payments on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated "A-1."

DESCRIPTION OF BOND RATINGS

Moody's rates the debt securities issued by various entities from "Aaa" to "C."
Investment Grade Ratings are the first four categories.

AAA -- Best quality. These securities carry the smallest degree of investment
risk and are generally referred to as "gilt edged." Interest payments are
protected by a large or exceptionally stable margin and principal is secure.
While the various protective elements are likely to change, such changes as
can be visualized are most unlikely to impair the fundamentally strong
position of such issues.

AA -- High quality by all standards. Together with the Aaa group they comprise
what are generally known as high grade bonds. They are rated lower than the
best bonds because margins of protection may not be as large as in Aaa
securities or fluctuation of protective elements may be of greater amplitude
or there may be other elements present which make the long-term risk appear
somewhat larger than the Aaa securities.

A -- Upper-medium-grade obligations. These bonds possess many favorable
investment attributes. Factors giving security to principal and interest are
considered adequate, but elements may be present which suggest a
susceptibility to impairment sometime in the future.

BAA -- 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. Such bonds lack
outstanding investment characteristics and, in fact, have speculative
characteristics as well.

BA -- Have speculative elements and their future cannot be considered to be
well-assured. Often the protection of interest and principal payments may be
very moderate and thereby not well safeguarded during both good and bad times
over the future. Uncertainty of position characterizes bonds in this class.

B -- Generally lack characteristics of the desirable investment. Assurance of
interest and principal payments or of maintenance of other terms of the
contract over any long period of time may be small.

CAA -- 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. Such issues are often in default or have
other marked shortcomings.

C -- Lowest rated class of bonds. Issues so rated can be regarded as having
extremely poor prospects of ever attaining any real investment standing.

ABSENCE OF RATING: Where no rating has been assigned or where a rating has been
suspended or withdrawn, it may be for reasons unrelated to the quality of the
issue.

Should no rating be assigned, the reason may be one of the following:

1. An application for rating was not received or accepted.

2. The issue or issuer belongs to a group of securities or companies that are
not rated as a matter of policy.

3. There is a lack of essential data pertaining to the issue or issuer.

4. The issue was privately placed, in which case the rating is not published
in Moody's publications.

Suspension or withdrawal may occur if new and material circumstances arise, the
effects of which preclude satisfactory analysis; if there is no longer available
reasonable up-to-date data to permit a judgement to be formed; if a bond is
called for redemption; or for other reasons.

Note: Moody's applies numerical modifiers 1, 2 and 3 in each generic rating
classification from Aa to B in its corporate bond rating system.
The modifier 1 indicates that the security ranks in the higher end of its
generic rating category; the modifier 2 indicates a mid-range ranking; and the
modifier 3 indicates that the issue ranks in the lower end of its generic rating
category.

S&P rates the securities debt of various entities in categories ranging from
"AAA" to "D"

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<PAGE> 129
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------------------------------------------------
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

according to quality. Investment grade ratings are the first four categories:

AAA -- Highest rating. Capacity to pay interest and repay principal is
extremely strong.

AA -- Very strong capacity to pay interest and repay principal and differs
from AAA issues only in a small degree.

A -- Has 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 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 to pay interest and repay principal for debt in this category than in
higher rated categories.

BB, B, CCC, CC, C -- Debt rated "BB," "B," "CCC," "CC," and "C" is regarded, on
balance, as predominantly speculative with respect to capacity to pay interest
and repay principal in accordance with the terms of the obligation. "BB"
indicates the lowest degree of speculation and "C" the highest degree of
speculation. While such debt will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposure to adverse conditions.

BB -- Has less near-term vulnerability to default than other speculative
issues. However, it faces major ongoing uncertainties or exposure to adverse
business, financial or economic conditions which could lead to inadequate
capacity to meet timely interest and principal payments. The "BB" rating
category is also used for debt subordinated to senior debt that is assigned an
actual or implied "BBB-" rating.

B -- Has a greater vulnerability to default but currently has the capacity to
meet interest payments and principal repayments. Adverse business, financial
or economic conditions will likely impair capacity or willingness to pay
interest and repay principal. The "B" rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied "BB" or
"BB-" rating.

CCC -- Has a currently identifiable vulnerability to default and is dependent
upon favorable business, financial, and economic conditions to meet timely
payment of interest and repayment of principal. In the event of adverse
business, financial or economic conditions, it is not likely to have the
capacity to pay interest and repay principal. The
"CCC" rating category is also used for debt subordinated to senior debt that
is assigned an actual or implied "B"or "B-" rating.

CC -- Typically applied to debt subordinated to senior debt that is assigned
an actual or implied "CCC" rating.

C -- Typically applied to debt subordinated to senior debt which is assigned
an actual or implied "CCC-" debt rating. The "C" rating may be used to cover a
situation where a bankruptcy petition has been filed, but debt service
payments are continued.

C1 -- This rating is reserved for income bonds on which no interest is being
paid.

D -- In payment default. The "D" rating category is used when interest
payments or principal payments are not made on the date due even if the
applicable grace period has
not expired, unless S&P believes that such payments will be made during such
grace period. The "D" rating also will be used upon the filing of a bankruptcy
petition if debt service payments are jeopardized.

NOTE RATINGS

S&P: The SP-1 rating denotes a very strong or strong capacity to pay principal
and interest. Those issues determined to possess overwhelming safety
characteristics will be given a plus (+) designation.

The SP-2 rating denotes a satisfactory capacity to pay principal and interest.

Moody's: The MIG 1 designation denotes best quality. There is present strong
protection by established cash flows, superior liquidity support or demonstrated
broad-based access to the market for refinancing.

The MIG 2 designation denotes high quality. Margins of protection are ample
although not as large as in the preceding group.

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

The following is a list of government credit ratings of sovereign issuers for
some of the world's governments. Sovereign issuer credit is rated by Standard &
Poor's Ratings Group and Moody's Investors Service, Inc. The ratings are as of
June 15, 1995 and June 30, 1995, respectively, and are subject to change by the
rating agencies. Ratings may not directly correspond to the ratings of
securities issued in the countries shown. See "Appendix" for a description of
the ratings.

ESTABLISHED ECONOMIES:

CURRENT GOVERNMENT CREDIT RATINGS

<TABLE>
<CAPTION>
MOODY'S STANDARD & POOR'S
------- -----------------
<S> <C> <C>
U.S. Aaa AAA
Austria Aaa AAA
France Aaa AAA
Germany Aaa AAA
Japan Aaa AAA
Netherlands Aaa AAA
Switzerland Aaa AAA
UK Aaa AAA
Norway Aa1 AAA
Canada Aa2 AA+
Sweden Aa3 AA+
Belgium Aa1 AA+
Denmark Aa1 AA+
Australia Aa2 AA
Italy A1 AA
Ireland Aa2 AA
New Zealand Aa2 AA
</TABLE>

DEVELOPING ECONOMIES:

CURRENT GOVERNMENT CREDIT RATINGS

<TABLE>
<CAPTION>
MOODY'S STANDARD & POOR'S
-------- -----------------
<S> <C> <C>
Finland Aa2 AA-
Portugal A1 AA-
South Korea A1 AA-
Thailand A2 A
Malaysia A1 A+
Singapore Aa2 AAA
Turkey Baa3 B+
China A3 BBB
Chile Baa1 BBB+
Greece Baa3 BBB-
Colombia Ba1 BBB-
Hungary Ba1 BB+
Venezuela Ba2 B+
India Ba3 BB+
Mexico Ba2 BB
Philippines Ba2 BB
Argentina B1 BB-
Brazil B1 B
Poland Baa3 BB
South Africa Baa3 BB
</TABLE>

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Statement of Additional Information Page 76
<PAGE> 131
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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

APPENDIX
- --------------------------------------------------------------------------------

The Fund and G.T. Capital believe that certain political and market factors
merit an investor's consideration of a telecommunications investment. In
analyzing the telecommunications industry, G.T. Capital has identified four
areas that it expects will create investment opportunities. G.T. Capital
believes that deregulation of companies in the industry, which will allow
competition to promote greater efficiencies, privatization of state-owned
telecommunications businesses, development of infrastructure in underdeveloped
countries and upgrading of services in other countries, and emergence of
technologies that will enhance productivity and reduce costs in the
telecommunications industry, will lead to growth in the sector. Of course, there
is no certainty that these factors will produce the anticipated results. The
following chart provides information on the key emerging trends, as identified
by G.T. Capital, occurring in the telecommunications industry in some of the
world's countries.

LOGO

<TABLE>
<S> <C>
____________________________________________________________________________________

Infrastructure

Argentina Brazil Canada China France Germany Hong Kong Italy Japan Malaysia
X X X X X

Mexico New Zealand Philippines Spain Sweden United Kingdom United States
X X X
____________________________________________________________________________________

Privatization

Argentina Brazil Canada China France Germany Hong Kong Italy Japan Malaysia
X X X X X X

Mexico New Zealand Philippines Spain Sweden United Kingdom United States
X X X X
____________________________________________________________________________________

Deregulation

Argentina Brazil Canada China France Germany Hong Kong Italy Japan Malaysia
X X X X X X X X X

Mexico New Zealand Philippines Spain Sweden United Kingdom United States
X X X X X X
____________________________________________________________________________________

New Technologies

Argentina Brazil Canada China France Germany Hong Kong Italy Japan Malaysia
X X X X X

Mexico New Zealand Philippines Spain Sweden United Kingdom United States
X X X
____________________________________________________________________________________
</TABLE>

Source: G.T. Capital management, Inc., December 31, 1994.

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Statement of Additional Information Page 77

LOGO

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

Moreover, according to G.T. Capital, the telecommunications industry
historically has proven to be a relatively non-cyclical industry that provides
goods and services to the public in periods of economic weakness as well as
economic strength. G.T. Capital believes that the emerging economies around the
world lack access to basic telephone service. The following chart illustrates
the need for basic telephone service outside the United States.

<TABLE>
<CAPTION>
TELEPHONE LINES/
1,000 PERSONS
----------------------------
<S> <C>
U.S.................................................. 545
Switzerland.......................................... 587
Sweden............................................... 683
Denmark.............................................. 566
Norway............................................... 503
France............................................... 495
Germany.............................................. 483
Finland.............................................. 535
Netherlands.......................................... 464
Italy................................................ 388
U.K.................................................. 442
Spain................................................ 323
Portugal............................................. 241
Greece............................................... 391
Hungary.............................................. 96
Turkey............................................... 123
Poland............................................... 86
Japan................................................ 441
Australia............................................ 456
Singapore............................................ 385
Hong Kong............................................ 434
New Zealand.......................................... 437
South Korea.......................................... 310
Malaysia............................................. 89
Thailand............................................. 24
Philippines.......................................... 10
Indonesia............................................ 6
Argentina............................................ 96
Mexico............................................... 66
Chile................................................ 65
Brazil............................................... 63
</TABLE>

Source: The World Development Report 1994, The World Bank, June
1994.

DEREGULATION IN THE UNITED STATES
The United States has been the bellwether for deregulation of the telephone
industry. The divestiture of the Bell System from American Telephone and
Telegraph has produced new competing companies in the United States. Such U.S.
market-driven competition has, for example, led to lower costs for consumers
which in turn led to greater consumer usage and to higher industrywide revenues.
G.T. Capital expects this scenario to continue to benefit such companies in the
U.S. and similarly to be realized by the established telecommunications
companies in established economies, although no assurances can be made in this
regard. The above information on the deregulation of long distance and
international telephone service carriers in the United States is based on a
study from a source that indicated the study would not be updated in the near
future. It is believed by G.T. Global, however, that although the study has not
been updated, G.T. Global believes the trend continues to be accurate.

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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

DEREGULATION OF U.S. LONG DISTANCE SERVICE
A CHRONOLOGY

<TABLE>
<S> <C>
---------------
Higher Industry
- --------------------------- Revenues
Growing Demand for ---------------
Telecommunications Services ------------ ----------- -------------- ---------------
- ---------------------------
Deregulation Increased Lower Prices Greater Usage
- --------------------------- Competition for Consumers
Extensive Regulation ------------- ----------- ------------- ---------------
and Lack of Competition
- --------------------------
</TABLE>
Source: G.T. Capital Management, Inc.

INTERNATIONAL TELEPHONE SERVICE --
FALLING PRICES AND RISING USAGE LEADS TO HIGHER REVENUE

<TABLE>
<CAPTION>
REVENUE ($ MILLIONS) PRICE PER MINUTE
-------------------- ----------------
<S> <C> <C>
1975......... $ 576 $ 2.25
1976......... $ 679 $ 2.22
1977......... $ 807 $ 2.20
1978......... $ 977 $ 2.12
1979......... $ 1,122 $ 1.78
1980......... $ 2,097 $ 1.34
1981......... $ 2,239 $ 1.21
1982......... $ 2,382 $ 1.09
1983......... $ 2,876 $ 1.09
1984......... $ 3,197 $ 1.05
1985......... $ 3,487 $ 1.03
1986......... $ 4,004 $ 0.99
1987......... $ 4,750 $ 1.02
1988......... $ 5,800 $ 1.06
1989......... $ 6,901 $ 1.07
1990......... $ 8,042 $ 1.06
1991......... $ 9,096 $ 1.01
1992......... $ 10,179 $ 1.00
</TABLE>

While the price per minute of international telephone service has fallen, usage
has increased, driving total revenue for international telephone service upward.

Source: 1975 to 1979, Trends in the International Communications Industry,
1975-1990, Federal Communications Commission (FCC), October 4, 1991; 1980 to
1992, Trends in the International Communications Industry, Federal
Communications Commission (FCC), March 1994. From 1975 to 1979, the FCC report
classified calls between the continental U.S. and Hawaii and Puerto Rico as
overseas calls. This information is reflected in the data for that time period.

- --------------------------------------------------------------------------------
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G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE INFRASTRUCTURE FUND

The following table describes that in some Asian countries the demand for energy
is growing faster than the economy.

<TABLE>
<CAPTION>
ELECTRICITY
GDP GROWTH CONSUMPTION
RATE (%) GROWTH RATE (%)
---------- ---------------
<S> <C> <C>
China............ 9.3 8.7
Korea............ 8.9 11.7
Thailand......... 8.4 12.3
Taiwan........... 8.1 8.5
Singapore........ 6.5 8.4
Hong Kong........ 6.5 8.9
Malaysia......... 6.2 12.3
Indonesia........ 5.8 15.7
Pakistan......... 5.4 10.2
India............ 5.2 11.0
Sri Lanka........ 4.0 7.4
Philippines...... 0.6 4.6
</TABLE>

Source: Jardine Fleming, Asian Power Review, April 1994. Data from 1983-1992.

The following chart shows that some emerging market countries have doubled the
number of kilometers of paved roads in twenty years.

[BAR GRAPH]

<TABLE>
<S> <C>
South Korea 847
Indonesia 453
Thailand 313
Pakistan 250
Brazil 219
Turkey 140
India 134
Singapore 128
</TABLE>

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

Statement of Additional Information Page 80
<PAGE> 135
- --------------------------------------------------------------------------------
------------------------------------------------
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

The audited financial statements of the Funds, except G.T. Global: Variable
International Fund and G.T. Global: Variable Emerging Markets Fund, as of
December 31, 1994, and for their fiscal years then-ended, the audited financial
statements of G.T. Global: Variable International Fund and G.T. Global: Variable
Emerging Markets Fund for the period July 5, 1994 (commencement of operations)
through December 31, 1994, the audited financial statement of G.T. Global:
Variable Infrastructure Fund and G.T. Global: Variable Natural Resources Fund as
of January 20, 1995, the unaudited financial statements of G.T. Global: Variable
Infrastructure Fund and G.T. Global: Variable Natural Resources Fund for the
period January 31, 1995 (commencement of operations) through June 30, 1995 and
the unaudited financial statements for the Funds, except G.T. Global: Variable
Infrastructure Fund and G.T. Global: Variable Natural Resources Fund, for the
six-month period ended June 30, 1995, appear on the following pages.

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

Statement of Additional Information Page 81
<PAGE> 136

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

REPORT OF
INDEPENDENT ACCOUNTANTS

================================================================================

ANNUAL REPORT

To the Shareholders and Boards of Trustees of the G.T. Global Variable
Investment Trust comprised of the following Funds: G.T. Global: Variable
Strategic Income Fund, G.T. Global: Variable Global Government Income Fund, G.T.
Global: Variable U.S. Government Income Fund, G.T. Global: Variable Latin
America Fund, G.T. Global: Variable Growth & Income Fund, G.T. Global: Variable
Telecommunications Fund, G.T. Global: Variable Emerging Markets Fund; and G.T.
Global Variable Investment Series comprised of the following Funds: G.T. Global:
Variable America Fund, G.T. Global: Variable New Pacific Fund, G.T. Global:
Variable Europe Fund, G.T. Global: Money Market Fund and G.T. Global:Variable
International Fund (collectively, "the Funds"):

We have audited the accompanying statements of assets and liabilities of the
Funds, including the portfolios of investments, as of December 31, 1994, and the
related statements of operations for the year then ended, and the statements of
changes in net assets and financial highlights for each of the periods indicated
herein. These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1994 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Funds as of December 31, 1994, the results of their operations for the year then
ended, and the changes in their net assets and the financial highlights for each
of the periods indicated herein, in conformity with generally accepted
accounting principles.

COOPERS & LYBRAND L.L.P.

Boston, Massachusetts
February 10, 1995

F-1
<PAGE> 137

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE STRATEGIC INCOME FUND

PORTFOLIO OF INVESTMENTS

DECEMBER 31, 1994

================================================================================

<TABLE>
<CAPTION>
PRINCIPAL % OF NET
FIXED INCOME INVESTMENTS CURRENCY AMOUNT MARKET VALUE ASSETS(A)
- ------------------------ -------- --------- ------------ ---------
<S> <C> <C> <C> <C>
GOVERNMENT & GOVERNMENT AGENCY OBLIGATIONS (73.9%)

ARGENTINA (5.9%)

Republic of Argentina:
Discount Bond, 7.125% due 3/31/23 (b) ............................. USD 1,950,000 $ 1,189,500 5.0
Par Bond, 4.25% due 3/31/23 (c) ................................... USD 300,000 126,750 0.5
BOCON Pro 1, 3.16% due 4/1/07 (b) ................................. ARS 250,000 85,821 0.4

AUSTRALIA (4.8%)

Australian Government, 12% due 7/15/99 .............................. AUD 1,350,000 1,122,085 4.8

AUSTRIA (2.5%)

Republic of Austria, 7.00%, due 9/20/99 ............................. ATS 6,350,000 575,023 2.5

BRAZIL (5.0%)

Federal Republic of Brazil, C Bond, 4% due 4/15/14 (b) .............. USD 2,407,200 1,158,465 5.0

BULGARIA (2.5%)

Bulgaria:
Discount Bond Series A, 6.0625% due 7/28/24 144A (b)(d) ........... USD 950,000 439,375 1.9
Past Due Interest, 6.0625% due 7/28/11 (b)(d) ..................... USD 329,186 139,288 0.6

FRANCE (2.3%)

France O.A.T., 7.5%, due 4/25/05 .................................... FRF 3,000,000 531,342 2.3

GERMANY (3.8%)

Deutschland Republic, 6.25% due 1/4/24 .............................. DEM 1,720,000 900,426 3.8

GREECE (2.6%)

Greece Government, 9.75% due 11/28/99 ............................... USD 600,000 597,000 2.6

ITALY (3.0%)

BTPS, 8.5% due 1/1/99 ............................................... ITL 1,250,000,000 692,996 3.0

MEXICO (6.0%)

United Mexican States, Discount Bond:
Series A, 6.6875% due 12/31/19 (b)(e) ............................. USD 1,000,000 734,375 3.1
Series B, 6.9375% due 12/31/19 (b)(e) ............................. USD 750,000 550,781 2.4
Cetes due 1/11/96, effective yield 14.46% ......................... MXN 723,180 126,959 0.5

NEW ZEALAND (5.2%)

New Zealand Government, 8% due 7/15/98 .............................. NZD 2,000,000 1,239,923 5.2

NIGERIA (2.5%)

Central Bank of Nigeria, Par Bond, 5.5% due 11/15/20 (c)(e) ......... USD 1,500,000 588,750 2.5

NORWAY (2.4%)

Norwegian Government, 9.00% due 1/31/99 ............................. NOK 3,660,000 565,868 2.4

PHILIPPINES (2.5%)

Republic of the Philippines:
Par Bond Series B, 5.75% due 12/1/17 (c) .......................... USD 550,000 341,000 1.5
Debt Conversion Bond Series B, 7.25% due 12/1/09 (b) .............. USD 250,000 225,625 1.0

POLAND (4.3%)

Poland, Past Due Interest Bond, 3.25% due 10/27/14 144A (c)(d) ...... USD 1,173,000 526,384 2.3
Poland, Discount Bond, 6.8125% due 10/27/24 144A (b)(d) ............. USD 635,000 457,994 2.0
</TABLE>

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

F-2
<PAGE> 138

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE STRATEGIC INCOME FUND

<TABLE>
<CAPTION>
PRINCIPAL % OF NET
FIXED INCOME INVESTMENTS CURRENCY AMOUNT MARKET VALUE ASSETS (A)
- ------------------------ -------- ---------- ------------ ---------
<S> <C> <C> <C> <C>
SPAIN (2.8%)

Spanish Government, 12.25% due 3/25/00 ............................... ESP 84,500,000 $ 653,036 2.8

UNITED STATES (13.3%)

U.S. Treasury Notes:
7.75% due 11/30/99 ................................................. USD 2,890,000 2,878,711 12.3
7.75% due 12/31/99 ................................................. USD 240,000 239,175 1.0

VENEZUELA (2.5%)

Republic of Venezuela, Par Bond Series A, 6.75% due 3/31/20 (e) ...... USD 1,250,000 576,563 2.5
----------- -----
Total Government & Government Obligations (cost $18,266,622) ............. 17,263,215 73.9
----------- -----

SOVEREIGN DEBT (5.9%)

MOROCCO (4.7%)

Kingdom of Morocco, Tranche A Loan Agreement, 5.9375% due 1/1/09(b) .. USD 1,660,000 1,099,750 4.7

RUSSIA (1.2%)

Vnesheconombank Loan Agreement (f)(g) ................................ USD 1,000,000 278,125 1.2
----------- -----
Total Sovereign Debt (cost $1,782,485) ................................... 1,377,875 5.9
----------- -----

SUPRANATIONAL (5.0%)

World Bank, 4.5% due 6/20/00 (cost $1,187,625) ......................... JPY 115,000,000 1,172,524 5.0
----------- -----
Total Fixed Income Investments (cost $21,236,732) ........................ 19,813,614 84.8
----------- -----

OPTION (0.0%)

Canadian Dollar Call Option, Strike 1.3407, expires 3/31/95
(cost $38,760)(g) .................................................... USD 2,400,000 1,680 --

REPURCHASE AGREEMENT (9.8%)

Dated December 30, 1994 with State Street Bank & Trust Company,
due January 3, 1995, for an effective yield of 5.25% collateralized
by $1,665,000 U.S. Treasury Bond, 12% due 8/15/2013. (Market
value $2,293,040, including accrued interest.)(cost $2,287,667) ....... 2,287,667 9.8
----------- -----
Total Investments (cost $23,563,159)* .................................... 22,102,961 94.6
Other Assets and Liabilities ............................................. 1,264,455 5.4
----------- -----
Net Assets ............................................................... $23,367,416 100.0
=========== =====
</TABLE>

- ---------------
(a) Percentages indicated are based on net assets of $23,367,416.

(b) The coupon rate shown on floating rate notes represents the rate at period
end.

(d) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.

(e) Issued with detachable warrants or value recovery rights. The current market
value of each warrant or right is zero.

(f) Underlying loan agreement currently in default.

(g) Non-income producing security.

* For Federal income tax purposes, cost is $23,875,550 and appreciation
(depreciation) of securities is as follows:

<TABLE>
<S> <C>
Unrealized appreciation: $ 129,719
Unrealized depreciation: (1,902,308)
------------
Net unrealized depreciation: $ (1,772,589)
============
</TABLE>

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

F-3
<PAGE> 139

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE STRATEGIC INCOME FUND

FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
DECEMBER 31, 1994

<TABLE>
<CAPTION>
UNREALIZED
MARKET VALUE CONTRACT DELIVERY APPRECIATION
(U.S. DOLLARS) PRICE DATE (DEPRECIATION)
-------------- ----------- --------- --------------
CONTRACTS TO SELL:
- ------------------
<S> <C> <C> <C> <C>
Australian Dollars................................................ 77,495 1.32619 20-Jan-95 $ (2,091)
Austrian Schillings............................................... 594,915 10.98550 28-Feb-95 (5,502)
Deutsche Marks.................................................... 1,066,167 1.55138 31-Jan-95 (2,598)
Deutsche Marks.................................................... 974,789 1.56970 31-Jan-95 (13,724)
Deutsche Marks.................................................... 1,068,099 1.53160 20-Mar-95 9,206
Deutsche Marks.................................................... 649,562 1.55300 01-Jun-95 (5,647)
Italian Lira...................................................... 719,106 1652.43000 27-Feb-95 (11,058)
New Zealand Dollars............................................... 1,239,142 1.63666 01-Feb-95 (53,802)
New Zealand Dollars............................................... 43,434 1.63345 01-Feb-95 (1,804)
Norwegian Kroner.................................................. 601,241 6.83750 28-Feb-95 (7,457)
Spanish Pesetas................................................... 1,102,207 130.06000 21-Feb-95 12,663
--------- --------
Total Contracts to Sell (Receivable amount $8,054,343)............ 8,136,157 (81,814)
--------- --------
The Value of Contracts to Sell as a Percentage of Net Assets
is 34.8%.

Contracts to Buy:
- -----------------
Australian Dollars................................................ 131,742 1.36054 20-Jan-95 6,792
Danish Kroner..................................................... 1,224,809 6.15610 14-Feb-95 15,439
Deutsche Marks.................................................... 1,176,014 1.55385 31-Jan-95 4,730
Deutsche Marks.................................................... 1,227,787 1.55950 01-Feb-95 9,448
Deutsche Marks.................................................... 614,966 1.54500 20-Mar-95 79
French Francs..................................................... 536,748 5.41740 21-Feb-95 7,897
Indonesian Rupiahs................................................ 234,414 2240.00000 03-Apr-95 4,414
New Zealand Dollars............................................... 584,759 1.56448 07-Feb-95 (643)
Pounds Sterling................................................... 964,610 0.64135 13-Jan-95 4,143
Spanish Pesetas................................................... 350,122 132.82000 21-Feb-95 3,337
--------- --------
Total Contracts to Buy (Payable amount $6,990,335)................ 7,045,971 55,636
--------- --------
The Value of Contracts to Buy as a Percentage of Net Assets
is 30.2%.

Total Open Forward Foreign Currency Contracts, Net........... $(26,178)
========
</TABLE>

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

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

F-4

<PAGE> 140

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE GLOBAL GOVERNMENT INCOME FUND

PORTFOLIO OF INVESTMENTS

DECEMBER 31, 1994
================================================================================

<TABLE>
<CAPTION>
PRINCIPAL % OF NET
FIXED INCOME INVESTMENTS CURRENCY AMOUNT MARKET VALUE ASSETS (A)
- ------------------------ -------- --------- ------------ ----------
<S> <C> <C> <C> <C>
GOVERNMENT & GOVERNMENT AGENCY OBLIGATIONS (79.2%)

AUSTRALIA (9.3%)

Australian Government, 7% due 4/15/00....................... AUD 800,000 $ 544,176 5.6
New South Wales Treasury Corporation, 12% due 12/1/01....... AUD 425,000 355,418 3.7

CANADA (4.6%)

Canadian Government, 7.75% due 9/1/99....................... CAD 650,000 441,738 4.6

DENMARK (4.4%)

Denmark Bullet, 9% due 11/15/00............................. DKK 2,585,000 425,130 4.4

FINLAND (4.6%)

Finnish Government, 11% due 1/15/99......................... FIM 2,000,000 447,380 4.6

FRANCE (9.3%)

France O.A.T., 5.5% due 4/25/04............................. FRF 3,000,000 464,313 4.8
Societe National Chemins de France, 9.375% due 3/12/01...... ECU 345,000 438,071 4.5

GERMANY (13.8%)

Treuhandanstalt, 6.25% due 3/4/04........................... DEM 1,185,000 695,146 7.2
Deutschland Republic, 6.75% due 7/15/04..................... DEM 810,000 491,795 5.1
German Unity Fund, 8% due 1/21/02........................... DEM 220,000 144,356 1.5

ITALY (5.0%)

BTPS, 8.5% due 4/1/99....................................... ITL 875,000,000 481,102 5.0

NEW ZEALAND (4.8%)

New Zealand Government, 8% due 7/15/98...................... NZD 742,000 459,652 4.8

SPAIN (4.6%)

Spanish Government, 7.4% due 7/30/99........................ ESP 68,200,000 443,520 4.6

UNITED KINGDOM (9.4%)

Treasury, 6% due 8/10/99.................................... GBP 645,000 909,020 9.4

UNITED STATES (9.4%)

U.S. Treasury Note, 7.75% due 11/30/99...................... USD 908,000 904,877 9.4
--------- ----
Total Government & Government Agency Obligations
(cost $7,771,760)............................................. 7,645,694 79.2
--------- ----

SUPRANATIONAL BONDS (9.4%)

European Investment Bank, 4.625% due 2/26/03.................. JPY 45,000,000 452,599 4.8
Japan Development Bank, 6.5% due 9/20/01...................... JPY 40,000,000 447,766 4.6
--------- ----
Total Supranational Bonds (cost $888,359)....................... 900,365 9.4
--------- ----
Total Fixed Income Investments (cost $8,660,119)................ 8,546,059 88.6
--------- ----
</TABLE>

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

F-5

<PAGE> 141
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE GLOBAL GOVERNMENT INCOME FUND

<TABLE>
<CAPTION>
% OF NET
SHORT TERM INVESTMENTS MARKET VALUE ASSETS (A)
- ---------------------- ------------ ----------
<S> <C> <C>
REPURCHASE AGREEMENT (8.1%)

Dated December 30, 1994 with State Street Bank & Trust Company, due
January 3, 1995, for an effective yield of 5.25% collateralized by
$570,000 U.S. Treasury Bond, 12% due 8/15/13. (Market value
$785,005, including accrued interest.)(cost $784,229)............................. $ 784,229 8.1
---------- -----
Total Investments (cost $9,444,348)*................................................. 9,330,288 96.7

Other Assets and Liabilities......................................................... 323,315 3.3
---------- -----
Net Assets........................................................................... $9,653,603 100.0
========== =====
</TABLE>

- ---------------
(a) Percentages indicated are based on net assets of $9,653,603.

* For Federal income tax purposes, cost is $9,444,348 and appreciation
(depreciation) of securities is as follows:

<TABLE>
<S> <C>
Unrealized appreciation: $ 83,928
Unrealized depreciation: (197,988)
----------
Net unrealized depreciation: $ (114,060)
==========
</TABLE>

================================================================================

FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
DECEMBER 31, 1994

<TABLE>
<CAPTION>
UNREALIZED
MARKET VALUE CONTRACT DELIVERY APPRECIATION
(U.S. DOLLARS) PRICE DATE (DEPRECIATION)
<S> <C> <C> <C> <C>
CONTRACTS TO SELL:
- ------------------
Australian Dollars....................................................... 259,408 1.35388 06-Feb-95 $(11,973)
Australian Dollars....................................................... 212,947 1.33174 06-Feb-95 (6,449)
Australian Dollars....................................................... 19,359 1.31527 06-Feb-95 (351)
Canadian Dollars......................................................... 382,833 1.40480 22-Feb-95 (572)
Canadian Dollars......................................................... 60,597 1.40230 22-Feb-95 18
Danish Kroner............................................................ 419,511 6.01070 14-Feb-95 4,732
Deutsche Marks........................................................... 369,147 1.56770 31-Mar-95 (5,557)
European Currency Units.................................................. 919,568 0.82433 09-Jan-95 (9,743)
Finnish Marks............................................................ 444,069 4.53160 31-Jan-95 19,343
Italian Lira............................................................. 241,534 1625.07853 02-Feb-95 (120)
Italian Lira............................................................. 239,702 1652.42999 27-Feb-95 (3,686)
Pounds Sterling.......................................................... 443,157 0.64185 13-Jan-95 (2,243)
Spanish Pesetas.......................................................... 456,086 130.06000 21-Feb-95 5,240
--------- -------
Total Contracts to Sell (Receivable amount $4,456,557)................... 4,467,918 (11,361)
--------- -------
The Value of Contracts to Sell as a Percentage of Net Assets is 46.3%.

CONTRACTS TO BUY:
- ------------------
Australian Dollars....................................................... 104,538 1.29144 06-Feb-95 3
Danish Kroner............................................................ 245,126 6.14260 14-Feb-95 2,558
Danish Kroner............................................................ 231,143 6.15620 14-Feb-95 2,917
European Currency Units.................................................. 501,165 0.83072 09-Jan-95 9,120
Japanese Yen............................................................. 36,396 99.60000 28-Feb-95 252
New Zealand Dollars...................................................... 255,395 1.59515 07-Feb-95 4,635
--------- -------
Total Contracts to Buy (Payable amount $1,354,278)....................... 1,373,763 19,485
--------- -------
The Value of Contracts to Buy as a Percentage of Net Assets is 14.2%.

Total Open Forward Foreign Currency Contracts, Net................... $ 8,124
=======
</TABLE>

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

F-6
<PAGE> 142

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE U.S. GOVERNMENT INCOME FUND

PORTFOLIO OF INVESTMENTS

DECEMBER 31, 1994

================================================================================

<TABLE>
<CAPTION>
PRINCIPAL % OF NET
FIXED INCOME INVESTMENTS AMOUNT MARKET VALUE ASSETS (A)
- ------------------------ --------- ------------ ----------
<S> <C> <C> <C>
GOVERNMENT & GOVERNMENT AGENCY OBLIGATIONS (78.9%)

U.S. Treasury Notes:....................................................... -- $ -- 55.4
7.25% due 5/15/04........................................................ 520,000 499,525 --
6.75% due 6/30/99........................................................ 480,000 460,500 --
7.75% due 12/31/99....................................................... 378,000 376,701 --
Federal National Mortgage Association:..................................... -- -- 7.5
7.85% due 9/10/98........................................................ 100,000 99,292 --
6.8% due 1/10/03......................................................... 90,000 83,109 --
Federal Home Loan Bank, 5.01% due 11/23/98................................. 200,000 180,210 7.5
Financial Assistance Corporation, 9.375% due 7/21/03....................... 75,000 80,571 3.3
Federal Farm Credit Bank, 5.79% due 3/1/99................................. 70,000 64,300 2.7
Federal Home Loan Mortgage Corporation, 6.185% due 11/26/03................ 70,000 60,145 2.5
---------- -----

Total Government & Government Agency Obligations
(cost $1,997,375).......................................................... 1,904,353 78.9
---------- -----

SUPRANATIONAL BONDS (11.6%)

Asia Development Bank, 8% due 4/30/01...................................... 200,000 198,420 8.2
International Bank for Reconciliation & Development,
5.25% due 9/16/03........................................................ 100,000 82,284 3.4
---------- -----
Total Supranational Bonds (cost $295,584).................................... 280,704 11.6
---------- -----

SHORT-TERM INVESTMENTS (38.8%)

TREASURY BILLS (17.6%)

U.S. Treasury Bills due 1/5/95, effective yield 1% (cost $424,953)......... 425,000 424,953 17.6

REPURCHASE AGREEMENT (21.2%)

Dated December 30, 1994 with State Street Bank & Trust Company, due
January 3, 1995, for an effective yield of 5.25% collateralized by
$375,000 U.S. Treasury Bond, 12% due 8/15/13. (Market value
$516,450, including accrued interest.)(cost $ 511,149)..................... 511,149 21.2
---------- -----

Total Short-Term Investments (cost $936,102)................................. 936,102 38.8
---------- -----
Total Investments (cost $3,229,061)*......................................... 3,121,159 129.3
Other Assets and Liabilities................................................. (706,414) (29.3)
---------- -----
Net Assets................................................................... $2,414,745 100.0
========== =====
</TABLE>

- ---------------
(a) Percentages indicated are based on net assets of $2,414,745.

* For Federal income tax purposes, cost is $3,229,061 and appreciation
(depreciation) of securities is as follows:

<TABLE>
<S> <C>
Unrealized appreciation: $ 0
Unrealized depreciation: (107,902)
----------
Net unrealized depreciation: $ (107,902)
==========
</TABLE>

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

F-7

<PAGE> 143

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE LATIN AMERICA FUND

PORTFOLIO OF INVESTMENTS

DECEMBER 31, 1994

================================================================================

<TABLE>
<CAPTION>
% OF NET
EQUITY INVESTMENTS COUNTRY SHARES MARKET VALUE ASSETS (A)
- ------------------ ------- ----------- ------------ ----------
<S> <C> <C> <C> <C>
SERVICES (18.0%)

Ceteco CVA (c).................................................... NETH 33,000 $ 825,285 3.1
Retailers-Other
Mesbla S.A. (Preferred) (c)....................................... BRZL 3,339,000 599,915 2.3
Retailers-Other
Casa Anglo S.A. (Preferred) (c)................................... BRZL 2,528,810 597,827 2.2
Retailers-Other
Compania Peruana de Telefonos "B" (c)............................. PERU 474,000 556,114 2.1
Telephone Networks
Grupo Elektra, S.A. de C.V. "CPO" (c)............................. MEX 73,000 537,340 2.0
Retailers-Other
Sears Roebuck de Mexico, S.A. de C.V. "B1" (c).................... MEX 66,000 415,052 1.6
Retailers-Other
Telefonos de Mexico, S.A. de C.V. "L" ADR (b)..................... MEX 10,000 410,000 1.5
Telephone Networks
Telecomunicacoes Brasileiras S.A. - Telebras:..................... BRZL -- -- 1.4
Telephone Networks
Preferred....................................................... -- 8,160,000 365,560 --
Preferred New (c)............................................... -- 252,135 10,166 --
Gran Cadena de Almacenes Colombianos 144A ADR (b)(d).............. COL 20,000 320,000 1.2
Retailers-Other
Grupo Marti S.A................................................... MEX 218,000 160,915 0.6
Retailers-Apparel
---------
4,798,174
---------
CONSUMER NON-DURABLES (17.9%)

Panamerican Beverages, Inc. "A" (b)............................... MEX 24,800 784,300 3.0
Beverages-Non alcoholic
Fomento Economico Mexicano, S.A. de C.V. (Femsa) "B".............. MEX 252,000 661,955 2.5
Beverages-Alcoholic
Tectoy Industria Brinquedos (Preferred) (c)....................... BRZL 600,040,000 624,155 2.3
Toys
Industrias J B Duarte S.A. (Preferred)............................ BRZL 215,600,000 578,501 2.2
Food
Buenos Aires Embotelladora, S.A. (BAESA) 144A ADR (b)(d).......... ARG 15,100 486,975 1.8
Beverages-Non alcoholic
Grupo Embotellador de Mexico, S.A. de C.V. 144A GDR (b)(c)(d)..... MEX 30,000 431,250 1.6
Beverages-Non alcoholic
Grupo Herdez S.A. Series A........................................ MEX 812,500 402,062 1.5
Food
San Juan:......................................................... PERU -- -- 1.8
Beverages-Alcoholic
Common.......................................................... -- 128,804 250,879 --
Class T......................................................... -- 122,439 248,581 --
Ekco S.A. Series CP (c)........................................... MEX 656,000 151,489 0.6
Household Products
Inversiones Aledo (c)............................................. VENZ 463,268 95,379 0.4
Food
Industrias Chocolate Lacta S.A. (Preferred)....................... BRZL 43,000 50,827 0.2
Food

---------
4,766,353
---------
</TABLE>

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

F-8

<PAGE> 144
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE LATIN AMERICA FUND

<TABLE>
<CAPTION>
% OF NET
EQUITY INVESTMENTS COUNTRY SHARES MARKET VALUE ASSETS (A)
- ------------------ ------- ----------- ------------ ----------
<S> <C> <C> <C> <C>
MATERIALS/BASIC INDUSTRIES (17.3%)

Caemi Mineracao E Metal (Preferred) (c)............................... BRZL 4,300,000 $ 701,418 2.6
Metals-Steel
Estrada S.A........................................................... ARG 93,000 638,507 2.4
Paper/Packaging
Venezolana de Prerreducidos Caroni C.A. - Venprecar 144A GDR(b)(d).... VENZ 100,000 625,000 2.4
Metals-Steel
Grupo Fernandez Editores BCP (c)...................................... MEX 501,000 551,616 2.1
Paper/Packaging
La Cemento Nacional 144A GDR (b)(c)(d)................................ ECDR 1,300 510,141 1.9
Cement
Cia de Minas Buenaventura "C" (c)..................................... PERU 60,000 285,976 1.1
Gold
Acos Villares S.A. (Preferred) (c).................................... BRZL 1,060,000 269,448 1.0
Metals-Steel
Ttolmex S.A. de C.V. Series B2........................................ MEX 30,000 259,794 1.0
Cement
Empaques Ponderosa, S.A. de C.V. "B".................................. MEX 100,000 257,732 1.0
Paper/Packaging
Crisoba A............................................................. MEX 50,000 255,670 1.0
Paper/Packaging
Corporacion Cementera Argentina S.A. (Corcemar) (c)................... ARG 32,500 213,433 0.8
Cement
---------
4,568,735
---------

FINANCE (17.1%)

Uniao Bancos Brasileiros - Unibanco (Preferred "A") (c)............... BRZL 33,282,000 986,658 3.7
Banks-Money Center
Banco Bradesco de Investimento S.A. (Preferred) (c)................... BRZL 92,381,950 786,229 3.0
Banks-Money Center
First Financial Caribbean Corporation (b)............................. US 52,600 592,800 2.2
Other Financial
Banco Nacional S.A. (Preferred)....................................... BRZL 23,096,000 586,955 2.2
Banks-Money Center
Banco Mercantil do Sao Paulo S.A. (Preferred)......................... BRZL 5,738,000 515,470 1.9
Banks-Regional
Grupo Financiero Bancrecer, S.A. de C.V. "B".......................... MEX 429,810 372,207 1.4
Banks-Regional
Interbanc (c)......................................................... PERU 243,655 367,381 1.4
Banks-Money Center
Grupo Financiero Bancomer, S.A. de C.V. "C"........................... MEX 620,000 345,155 1.3
Banks-Money Center

---------
4,552,855
---------

CONSUMER DURABLES (10.8%)

Brasinca Industrial S.A. (Preferred) (c).............................. BRZL 822,500 729,167 2.7
Auto Parts
Iochpe Maxion (Preferred) (c)......................................... BRZL 693,000 483,298 1.8
Auto Parts
Continental 2001 S.A. (Preferred)..................................... BRZL 17,448,000 470,230 1.8
Appliances & Household Durables
Capco Automotive Products Corporation 144A (b)(c)(d).................. BRZL 35,000 420,000 1.6
Auto Parts
Brasmotor S.A. (Preferred) (c)........................................ BRZL 1,000,000 405,437 1.5
Appliances & Household Durables
Refripar (Preferred).................................................. BRZL 109,412,063 362,120 1.4
Appliances & Household Durables

---------
2,870,252
---------
</TABLE>

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

F-9

<PAGE> 145
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE LATIN AMERICA FUND

<TABLE>
<CAPTION>
% OF NET
EQUITY INVESTMENTS COUNTRY SHARES MARKET VALUE ASSETS (A)
- ------------------ ------- ------- ------------ ----------
<S> <C> <C> <C> <C>
CAPITAL GOODS (3.5%)

John Deere S.A. de C.V. Series A........................................ MEX 183,000 $ 606,730 2.3
Machinery & Engineering
Grupo Tribasa, S.A. de C.V. Sponsored ADR (b)(c)........................ MEX 20,000 332,500 1.2
Construction

-----------
939,230
-----------

MULTI-INDUSTRY/CONGLOMERATE (2.7%)

Grupo Carso, S.A. de C.V. "A1" (c)...................................... MEX 53,000 398,866 1.5
Conglomerate
Grupo Industrial Alfa, S.A. de C.V. "A"................................. MEX 21,000 207,835 0.8
Conglomerate
Consolidada Carabobo "B"................................................ VENZ 894,000 118,324 0.4
Miscellaneous

-----------
725,025
-----------

ENERGY (0.9%)

Industrias Ventane...................................................... VENZ 474,725 142,418 0.5
Gas Production & Distribution
C.A. La Electricidad de Caracas......................................... VENZ 64,774 92,589 0.3
Electrical & Gas Utilities
Centrais Electricas Brasileiras S.A. - Electrobras (Preferred).......... BRZL 70,347 24,447 0.1
Electrical & Gas Utilities

-----------
259,454
----------- -----

Total Equity Investments (cost $24,529,226)............................... 23,480,078 88.2
----------- -----

SHORT-TERM INVESTMENTS

REPURCHASE AGREEMENT (11.1%)

Dated December 30, 1994, with State Street Bank and Trust Company,
due January 3, 1995, for an effective yield of 5.25% collateralized
by $2,155,000 U.S. Treasury Bond, 12.0% due 08/15/13. (Market value
$2,967,868 including accrued interest.) (cost $2,960,863).............. 2,960,863 11.1
----------- -----
Total Investments (cost $27,490,089)*..................................... 26,440,941 99.3
Other Assets and Liabilities.............................................. 190,395 0.7
----------- -----
Net Assets................................................................ $26,631,336 100.0
=========== =====
</TABLE>

- ---------------
(a) Percentages indicated are based on net assets of $26,631,336.
(b) U.S. currency denominated.
(c) Non-income producing security.
(d) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.

Abbreviations:
ADR-American Depository Receipt
GDR-Global Depository Receipt
* For Federal income tax purposes, cost is $27,605,663 and appreciation
(depreciation) of securities is as follows:

<TABLE>
<S> <C>
Unrealized appreciation: $ 2,682,375
Unrealized depreciation: (3,847,097)
-----------
Net unrealized depreciation: $ (1,164,722)
============
</TABLE>

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

F-10

<PAGE> 146

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE LATIN AMERICA FUND

The Fund's Portfolio of Investments at December 31, 1994 was concentrated in the
following countries:

<TABLE>
<CAPTION>
PERCENTAGE OF NET ASSETS (A)
----------------------------
SHORT-TERM
COUNTRY EQUITY & OTHER TOTAL
------- ------ ---------- -----
<S> <C> <C> <C>
Argentina 5.0 5.0
Brazil 35.9 35.9
Columbia 1.2 1.2
Ecuador 1.9 1.9
Mexico 28.5 28.5
Netherlands 3.1 3.1
Peru 6.4 6.4
United States 2.2 11.8 14.0
Venezuela 4.0 4.0
---- ---- -----
Total 88.2 11.8 100.0
==== ==== =====
</TABLE>

- ---------------
(a) Percentages indicated are based on net assets of $26,631,336.

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

F-11

<PAGE> 147

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE GROWTH & INCOME FUND

PORTFOLIO OF INVESTMENTS

DECEMBER 31, 1994

================================================================================

<TABLE>
<CAPTION>
% OF NET
EQUITY INVESTMENTS COUNTRY SHARES MARKET VALUE ASSETS (A)
- ------------------ ------- ------ ------------ ----------
<S> <C> <C> <C> <C>
FINANCE (14.1%)

National Australian Bank Ltd.................... AUSL 64,300 $ 514,719 2.0
Banks-Money Center
Swiss Bank Corp. (Bearer) (b)................... SWTZ 971 268,630 1.1
Banks-Money Center
CS Holdings (Bearer)............................ SWTZ 565 241,804 0.9
Banks-Money Center
Union Bank of Switzerland (Bearer) (b).......... SWTZ 253 209,979 0.8
Banks-Money Center
Aegon N.V....................................... NETH 3,025 193,486 0.8
Insurance-Life
International Nederlande Group N.V.............. NETH 3,995 188,769 0.7
Other Financial
Fortis Amev N.V................................. NETH 4,423 187,839 0.7
Other Financial
Generale de Banque S.A.......................... BEL 644 164,089 0.6
Banks-Money Center
ABN-AMRO Holding N.V.:.......................... NETH -- -- 0.6
Banks-Regional................................
Common........................................ -- 4,498 156,292 --
Conv. Preferred 6% until 10/31/03 -- 55 1,832 --
Ayala Land, Inc. "B"............................ PHIL 75,000 117,769 0.5
Real Estate
Commercial Union PLC............................ UK 13,382 106,243 0.4
Insurance-Multi-Line
S.G. Warburg Group PLC.......................... UK 9,300 100,777 0.4
Other Financial
National Westminster Bank PLC................... UK 12,000 96,398 0.4
Banks-Money Center
Dresdner Bank, AG............................... GER 330 86,724 0.3
Banks-Money Center
MAI PLC:........................................ UK -- -- 0.3
Other Financial
Common........................................ -- 12,400 43,689 --
Conv. Preferred 5.9% until 8/1/00............. -- 31,196 42,989 --
Banco Popular Espanol S.A. (Reg.)............... SPN 710 84,466 0.3
Banks-Money Center
Hopewell Holdings (b)........................... HK 94,000 77,761 0.3
Real Estate
M & G Group PLC................................. UK 5,000 76,495 0.3
Investment Management
Banco de Santander S.A.......................... SPN 1,915 73,368 0.3
Banks-Regional
Kredietbank N.V................................. BEL 315 66,092 0.3
Banks-Regional
Henderson Investment Ltd........................ HK 94,000 61,966 0.2
Real Estate
Sparebanken (NOR) (Union Bank of Norway)........ NOR 3,000 58,589 0.2
Banks-Regional
Sun Hung Kai Properties Ltd..................... HK 9,400 56,134 0.2
Real Estate
Gerrard & National Holdings PLC................. UK 7,080 53,660 0.2
Securities Broker
Societe Generale................................ FR 475 49,906 0.2
Banks-Money Center
</TABLE>

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

F-12
<PAGE> 148

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE GROWTH & INCOME FUND

<TABLE>
<CAPTION>
% OF NET
EQUITY INVESTMENTS COUNTRY SHARES MARKET VALUE ASSETS (A)
- ------------------ ------ ------ ------------ ----------
<S> <C> <C> <C> <C>
General Accident Fire and Life Assurance Corp. PLC....... UK 5,700 $ 45,343 0.2
Insurance-Property-Casualty
Sedgwick Group PLC....................................... UK 17,000 40,464 0.2
Insurance-Multi-Line
Lloyds Abbey Life PLC.................................... UK 7,000 36,502 0.1
Insurance-Life
Amoy Properties Ltd...................................... HK 39,000 35,287 0.1
Real Estate
Compagnie Financiere de Paribas S.A...................... FR 524 34,838 0.1
Other Financial
Compagnie UAP............................................ FR 1,316 33,963 0.1
Insurance-Multi-Line
Commerzbank, AG.......................................... GER 130 27,617 0.1
Banks-Money Center
Realty Development Corp. Ltd. "A"........................ HK 10,000 25,851 0.1
Real Estate
IKB Deutsche Industriebank, AG:.......................... GER -- -- 0.1
Banks-Regional
Common................................................. -- 100 16,982 --
Common (New) until 10/95 (b)........................... -- 22 3,615 --
---------
3,680,927
---------
ENERGY (11.1%)

Penn West Petroleum Ltd. (b)............................. CAN 100,000 418,955 1.7
Oil
Elektrowatt, AG.......................................... SWTZ 1,442 381,301 1.5
Electrical & Gas Utilities
Electrabel............................................... BEL 1,720 308,399 1.2
Electrical & Gas Utilities
Royal Dutch Petroleum Co................................. NETH 2,400 261,381 1.0
Oil
Reunies Electrobel & Tractebel S.A....................... BEL 763 230,652 0.9
Electrical & Gas Utilities
Mobil Corp............................................... US 2,400 202,200 0.8
Oil
Elf Aquitaine............................................ FR 2,720 191,488 0.8
Oil
Veba, AG................................................. GER 540 188,287 0.7
Energy Sources
RWE, AG.................................................. GER 480 134,668 0.5
Electrical & Gas Utilities
Grupe Bruxelles Lambert S.A.............................. BEL 1,067 126,201 0.5
Oil
Exxon Corp............................................... US 1,700 103,275 0.4
Oil
British Gas PLC.......................................... UK 21,000 102,599 0.4
Gas Production & Distribution
Pacific Gas & Electric Co................................ US 2,950 71,906 0.3
Electrical & Gas Utilities
Shell Transport & Trading Co. PLC........................ UK 6,530 71,476 0.3
Oil
Union Electrica Fenosa S.A............................... SPN 5,000 20,829 0.1
Electrical & Gas Utilities
Iberdrola S.A............................................ SPN 2,000 12,345 --
Electrical & Gas Utilities
Chevron Corp............................................. US 160 7,140 --
Oil
---------
2,833,102
---------
</TABLE>

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

F-13
<PAGE> 149

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE GROWTH & INCOME FUND

<TABLE>
<CAPTION>
% OF NET
EQUITY INVESTMENTS COUNTRY SHARES MARKET VALUE ASSETS (A)
- ------------------ ------- ------ ------------ ----------
<S> <C> <C> <C> <C>
SERVICES (9.0%)

Telecom Corp. of New Zealand Ltd:........................... NZ -- $ -- 2.2
Telephone Networks
Common (NZ registered).................................... -- 149,200 487,207 --
Common (AUSL registered).................................. -- 16,960 55,911 --
AT&T Corp................................................... US 5,500 276,375 1.1
Telephone-Long Distance
Koninklijke PTT Nederland N.V............................... NETH 5,915 199,394 0.8
Telephone Networks
Dun & Bradstreet Corp....................................... US 3,300 181,500 0.7
Broadcasting & Publishing
J.C. Penney Company, Inc.................................... US 4,020 179,393 0.7
Retailers-Other
McGraw Hill, Inc............................................ US 2,490 166,519 0.7
Broadcasting & Publishing
Tele Danmark AS-B........................................... DEN 2,570 130,603 0.5
Telephone Networks
TNT Ltd. Conv. Preferred 8% until 5/31/97................... AUSL 67,000 119,531 0.5
Transportation-Road & Rail
Thorn EMI PLC............................................... UK 5,500 89,399 0.4
Leisure & Tourism
Granada Group PLC 7.5% Conv. Preferred until 4/30/03........ UK 23,482 66,556 0.3
Broadcasting & Publishing
British Telecommunications PLC.............................. UK 10,146 59,977 0.2
Telephone Networks
Cathay Pacific Airways...................................... HK 36,000 52,349 0.2
Transportation-Airlines
Stet Societal Finanziaria Telefonica S.P.A. 144A (c)........ ITLY 16,000 47,195 0.2
Telephone Networks
Dairy Farm International Holdings Ltd....................... HK 36,000 38,622 0.2
Retailers-Food
Sime Darby (Hong Kong) Ltd.................................. HK 28,000 31,125 0.1
Wholesale & International Trade
AirTouch Communications, Inc. (b)........................... US 900 26,213 0.1
Wireless Communications
Pacific Telesis Group....................................... US 900 25,650 0.1
Telephone-Regional/Local
Telecom Italia S.P.A........................................ ITLY 4,500 11,719 --
Telephone Networks
Mandarin Oriental Hotel Group............................... HK 10,000 11,698 --
Leisure & Tourism
---------
2,256,936
---------

MATERIALS/BASIC INDUSTRIES (8.1%)

Broken Hill Proprietary Co. Ltd............................. AUSL 39,927 607,019 2.4
Misc. Materials & Commodities
Amcor Ltd................................................... AUSL 56,200 406,286 1.6
Paper/Packaging
Solvay SA-A................................................. BEL 691 329,306 1.3
Chemicals
Akzo Nobel N.V.............................................. NETH 2,345 270,795 1.1
Chemicals
Monsanto Co................................................. US 3,300 232,650 0.9
Chemicals
WHX Corp. Conv. Preferred 6.5% until 12/31/49 (b)........... US 2,500 118,750 0.5
Metals-Steel
NOVA Corp................................................... CAN 6,000 55,623 0.2
Chemicals
BASF AG..................................................... GER 100 20,630 0.1
Chemicals
---------
2,041,059
---------
</TABLE>

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

F-14
<PAGE> 150

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE GROWTH & INCOME FUND

<TABLE>
<CAPTION>
% OF NET
EQUITY INVESTMENTS COUNTRY SHARES MARKET VALUE ASSETS (A)
- ------------------ ------- ------- ------------ ----------
<S> <C> <C> <C> <C>
CAPITAL GOODS (5.2%)

General Electric Co., PLC..................... UK 51,900 $ 224,309 0.9
Aerospace/Defense
Mannesmann, AG................................ GER 770 209,815 0.8
Machinery & Engineering
CSF Thomson (b)............................... FR 6,550 196,028 0.8
Aerospace/Defense
Alcatel Alsthom............................... FR 1,790 152,868 0.6
Telecom Equipment
Siemens, AG................................... GER 357 149,605 0.6
Telecom Equipment
Lockheed Corp................................. US 1,550 112,569 0.4
Aerospace/Defense
Rolls-Royce PLC............................... UK 35,900 101,190 0.4
Aerospace/Defense
BICC PLC...................................... UK 17,200 96,962 0.4
Electrical Plant/Equipment
Trafalgar House PLC:.......................... UK -- -- 0.3
Machinery & Engineering
Conv. Preferred 6% until 12/31/49........... -- 44,800 68,049 --
Common (b).................................. -- 5,500 6,632 --
-----------
1,318,027
-----------

CONSUMER NON-DURABLES (2.5%)

Noble China Corp. (b)......................... CAN 100,000 463,524 1.9
Beverages-Alcoholic
Booker PLC.................................... UK 13,800 86,439 0.3
Food
Bass PLC...................................... UK 6,600 53,174 0.2
Beverages-Alcoholic
Associated British Foods Group................ UK 4,200 37,225 0.1
Food
Burns, Philp & Co. Ltd........................ AUSL 2,050 4,850 --
Food
-----------
645,212
-----------

HEALTH CARE (2.1%)

Bristol-Myers Squibb Co....................... US 4,700 272,013 1.1
Pharmaceuticals
Bayer, AG..................................... GER 1,110 260,173 1.0
Pharmaceuticals
-----------
532,186
-----------

CONSUMER DURABLES (1.0%)

GKN PLC....................................... UK 28,600 263,115 1.0
Auto Parts

CONGLOMERATE (0.2%)

Hutchison Whampoa Ltd......................... HK 13,000 52,595 0.2
Conglomerate
-----------
Total Equity Investments (cost $13,916,378)..... 13,623,159 53.3
-----------
</TABLE>

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

F-15
<PAGE> 151

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE GROWTH & INCOME FUND

<TABLE>
<CAPTION>
PRINCIPAL % OF NET
FIXED INCOME INVESTMENTS CURRENCY AMOUNT MARKET VALUE ASSETS (A)
- ------------------------ -------- --------- ------------ ----------
<S> <C> <C> <C> <C>
GOVERNMENT & GOVERNMENT AGENCY OBLIGATIONS (25.9%)

AUSTRALIA (1.1%)

Australian Government Bond 9% due 9/15/04............................ AUD 400,000 $ 290,459 1.1

FRANCE (1.3%)

France OAT Bond 6.75% due 10/25/04................................... FRF 1,900,000 320,326 1.3

GERMANY (10.0%)

Deutschland Republic Bonds:.......................................... DEM -- -- 8.8
6.75% due 4/22/03.................................................. -- 2,500,000 1,527,733 --
6% due 6/20/16..................................................... -- 850,000 439,599 --
9% due 10/20/00.................................................... -- 400,000 275,405 --
Treuhandanstalt Bond 6.375% due 7/1/99............................... DEM 500,000 311,229 1.2

ITALY (6.6%)

Italy Government Bond 5.125% due 7/29/03............................. JPY 100,000,000 1,034,907 4.0
BTPS Bond 8.5% due 1/1/99............................................ ITLY 1,200,000,000 665,276 2.6

SPAIN (0.6%)

Spanish Government Bond 10.25% due 11/30/98.......................... ESP 20,000,000 145,602 0.6

SWEDEN (1.1%)

Sweden Government Bond 11% due 1/21/99............................... SEK 2,000,000 274,288 1.1

UNITED KINGDOM (2.0%)

Conversion Bonds:.................................................... GBP -- -- 2.0
9% due 7/12/11..................................................... -- 220,000 356,346 --
9.5% due 4/18/05................................................... -- 100,000 164,129 --

UNITED STATES (3.2%)

United States Treasury:.............................................. USD -- -- 3.2
Note 7.25% due 5/15/04............................................. -- 500,000 480,000 --
Note 8.5% due 11/15/00............................................. -- 200,000 206,313 --
Bond 8.125% due 5/15/21............................................ -- 130,000 132,234 --
---------- ----
Total Government & Government Agency Obligations (cost $6,751,618)....... 6,623,846 25.9
---------- ----

CORPORATE BONDS (5.3%)

GERMANY (2.2%)

Siemens Capital Corp. Bond 8% due 6/24/02 (Issued with warrants)..... USD 180,000 240,300 0.9
Commerzbank Genus Conv. Bond 7% due 12/31/00......................... DEM 187,000 169,649 0.7
Deutsche Bank, AG Bond 9% due 12/31/02 (Issued with warrants)........ DEM 175,000 159,666 0.6
Commerzbank, AG Bond VRN 8.0% due 6/1/07............................. DEM 1,000 653 --
IKB Deutsche Industriebank Bond 6.45% due 3/31/06.................... DEM 1,500 843 --

SWITZERLAND (0.1%)

Elektrowatt, AG Conv. Bond 3% due 4/29/04........................... CHF 28,000 17,600 0.1

UNITED KINGDOM (3.0%)

Daily Mail & General Trust:......................................... GBP -- -- 1.1
Conv. Bond 5.75% due 9/26/03...................................... -- 86,000 147,463 --
Conv. Bond 8.75% due 9/27/05...................................... -- 56,000 141,184 --
Land Securities:.................................................... GBP -- -- 0.8
Conv. Bond 9.375% due 7/31/04..................................... -- 105,000 177,576 --
Conv. Bond 7% due 9/30/08......................................... -- 10,000 15,659 --
S.G. Warburg Group PLC Conv. Bond 6.5% due 8/4/08................... GBP 90,000 136,001 0.5
Elf Enterprises Finance PLC Conv. Bond 8.75% due 6/27/06............ GBP 65,000 100,895 0.4
Reckitt & Colman Capital Conv. Bond 9.5% due 3/31/05................ GBP 22,000 48,058 0.2
---------- ----
Total Corporate Bonds (cost $1,402,291).................................. 1,355,547 5.3
---------- ----
Total Fixed Income Investments (cost $8,153,909)......................... 7,979,393 31.2
---------- ----
</TABLE>

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

F-16
<PAGE> 152

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE GROWTH & INCOME FUND

<TABLE>
<CAPTION>
NO. OF % OF NET
WARRANTS (0.0%) COUNTRY WARRANTS MARKET VALUE ASSETS (A)
- --------------- ------- -------- ------------ ---------
<S> <C> <C> <C> <C>
Electrowatt, AG expires 4/28/97 (b) . . . . . . . . . . . . . . . . . . SWTZ 140 $ 1,872 --
Electrical & Gas Utilities
Commerzbank, AG expires 12/10/99 (b) . . . . . . . . . . . . . . . . . . GER 6 105 --
Banks-Money Center
Groupe Bruxelles Lambert S.A. expires 12/20/98 (b) . . . . . . . . . . . BEL 51 641 --
Oil
Henderson Investment Ltd. expires 1/26/96 (b) . . . . . . . . . . . . . HK 9,400 95 --
Real Estate
----------- ----
Total Warrants (cost $0) . . . . . . . . . . . . . . . . . . . . . . . . . 2,713 --
----------- ----

REPURCHASE AGREEMENT (14.0%)

Dated December 30, 1994 with State Street Bank & Trust Company, due
January 3, 1995, for an effective yield of 5.25% collateralized by
$3,595,000 U.S. Treasury Note 6.875% due 10/31/96. (Market value
$3,591,270, including accrued interest.) (cost $3,589,047) . . . . . 3,589,047 14.0
----------- ----
Total Investments (cost $25,659,334)* . . . . . . . . . . . . . . . . . . 25,194,312 98.5
Other Assets and Liabilities . . . . . . . . . . . . . . . . . . . . . . . 385,926 1.5
----------- ----
Total Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $25,580,238 100.0
=========== =====
</TABLE>

- ---------------
(a) Percentages indicated are based on net assets of $25,580,238.
(b) Non-income producing security.
(c) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.

* For Federal income tax purposes, cost is $25,690,691 and appreciation
(depreciation) of securities is as follows:

<TABLE>
<S> <C>
Unrealized appreciation: $ 733,574
Unrealized depreciation: (1,229,953)
-----------
Net unrealized depreciation: $ (496,379)
===========
</TABLE>

================================================================================

The Fund's Portfolio of Investments at December 31, 1994 was concentrated in
the following countries:

<TABLE>
<CAPTION>
PERCENTAGE OF NET ASSETS (A)
SHORT-TERM
COUNTRY EQUITY FIXED INCOME & OTHER TOTAL
------- ------ ------------ ---------- -----
<S> <C> <C> <C> <C>
Australia............. 6.5 1.1 7.6
Belgium............... 4.8 4.8
Canada................ 3.8 3.8
Denmark............... 0.5 0.5
France................ 2.6 1.3 3.9
Germany............... 4.2 12.2 16.4
Hong Kong............. 1.6 1.6
Italy................. 0.2 6.6 6.8
Netherlands........... 5.7 5.7
New Zealand........... 2.2 2.2
Norway................ 0.2 0.2
Philippines........... 0.5 0.5
Spain................. 0.7 0.6 1.3
Sweden................ 1.1 1.1
Switzerland........... 4.3 0.1 4.4
United Kingdom........ 7.7 5.0 12.7
United States......... 7.8 3.2 15.5 26.5
---- ---- ---- -----
Total................. 53.3 31.2 15.5 100.0
==== ==== ==== =====
</TABLE>

- ---------------
(a) Percentages indicated are based on net assets of $25,580,238.

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

F-17

<PAGE> 153

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE GROWTH & INCOME FUND

FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING

DECEMBER 31, 1994

<TABLE>
<CAPTION>
UNREALIZED
MARKET VALUE CONTRACT DELIVERY APPRECIATION
CONTRACTS TO SELL: (U.S. DOLLARS) PRICE DATE (DEPRECIATION)
-------------- -------- --------- --------------
<S> <C> <C> <C> <C>
Contracts to Sell:
Deutsche Marks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,169,704 1.49493 03-Feb-95 $ 41,053
Deutsche Marks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,326,483 1.56900 03-Feb-95 (32,028)
French Francs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 603,188 5.12720 03-Feb-95 24,835
--------- --------
Total Contracts to Sell (Receivable amount $4,133,235) . . . . . . . . . 4,099,375 33,860
--------- --------
The Value of Contracts to Sell as a Percentage of Net Assets is 16.0%.

CONTRACTS TO BUY:

Deutsche Marks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 555,771 1.53030 03-Feb-95 (6,210)
French Francs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 292,228 5.26400 03-Feb-95 (4,125)
--------- --------
Total Contracts to Buy (Payable amount $858,334) . . . . . . . . . . . . 847,999 (10,335)
--------- --------
The Value of Contracts to Buy as a Percentage of Net Assets is 3.3%.
Total Open Forward Foreign Currency Contracts, Net . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 23,525
========
</TABLE>

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

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

F-18
<PAGE> 154
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE TELECOMMUNICATIONS FUND

PORTFOLIO OF INVESTMENTS

DECEMBER 31, 1994
================================================================================
<TABLE>
<CAPTION>
% OF NET
EQUITY INVESTMENTS COUNTRY SHARES MARKET VALUE ASSETS (a)
- ------------------ ------- ---------- ------------ ----------
<S> <C> <C> <C> <C>
TECHNOLOGY (27.8%)

Nokia AB Preferred ADR (b)........................... FIN 23,000 $ 1,725,000 4.8
Telecom Equipment
Broadband Technologies Inc. (c)...................... US 50,000 1,525,000 4.2
Telecom Equipment
U.S. Robotics Inc. (c)............................... US 35,000 1,513,750 4.2
Telecom Equipment
Cisco Systems, Inc. (c).............................. US 38,000 1,334,750 3.7
Networking
Glenayre Technologies Inc. (c)....................... US 18,000 1,039,500 2.9
Telecom Equipment
Motorola Inc......................................... US 14,600 844,975 2.3
Telecom Equipment
Benefon OY (c)...................................... FIN 2,500 818,979 2.3
Telecom Equipment
Newbridge Networks Corp. (b)(c)...................... CAN 19,000 726,750 2.0
Telecom Equipment
Champion Technology Holdings......................... HK 1,889,849 393,286 1.1
Telecom Equipment
Teledata Communications Ltd. (c)..................... US 22,800 108,300 0.3
Telecom Equipment
------------
10,030,290
------------
TELEPHONE NETWORKS (25.7%)

Stet Di Risp......................................... ITLY 757,000 1,796,152 5.0
Telefonica de Espana ADR (b)......................... SPN 50,000 1,756,250 4.9
Compania de Telefonos de Chile S.A. ADR (b).......... CHLE 13,000 1,023,750 2.8
Telecomunicacoes Brasileiras S.A. - Telebras:........ BRZL -- -- 2.6
Preferred.......................................... -- 20,500,000 918,381 --
Preferred New (c).................................. -- 376,150 15,166 --
Telecom Corp. of New Zealand ADR (b)................ NZ 15,800 811,725 2.2
Tele Danmark A.S. ADR (b)(c)......................... DEN 31,000 790,500 2.2
British Telecom PLC ADR (b).......................... UK 13,100 787,638 2.2
Koninklijke PTT Nederland N.V........................ NETH 22,000 741,616 2.1
Telecom Argentina S.A. Class B....................... ARG 80,000 390,050 1.1
Matav (e)............................................ HGRY 1,000 221,043 0.6
------------
9,252,271
------------
WIRELESS COMMUNICATIONS (14.0%)

Centennial Cellular Corp. Class A (c)................ US 71,500 1,215,500 3.4
PriCellular Corp. Class A (c)........................ US 100,000 975,000 2.7
Paging Network Inc. (c).............................. US 25,000 850,000 2.4
Telephone and Data Systems Inc....................... US 15,200 701,100 1.9
DDI Corp............................................. JPN 60 518,333 1.4
Star Paging International Holdings Ltd. (d).......... HK 1,450,000 449,816 1.2
Grupo Iusacell S.A. Series "D" ADR (b)(c)............ MEX 22,000 342,320 1.0
------------
5,052,069
------------
</TABLE>

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

F-19
<PAGE> 155

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE TELECOMMUNICATIONS FUND

<TABLE>
<CAPTION>
% OF NET
EQUITY INVESTMENTS COUNTRY SHARES MARKET VALUE ASSETS (a)
- ------------------ ------- ---------- ------------ ----------
<S> <C> <C> <C> <C>
TELEPHONE - LONG DISTANCE (11.9%)

IDB Communications Group Inc. (c)........................... US 210,000 $ 1,929,375 5.4
Call-Net Enterprises Inc. Class B (c)....................... CAN 233,000 913,856 2.5
PT Indonesia Satellite (Indosat) ADR (b)(c)................. INDO 20,000 715,000 2.0
MCI Communications Corp..................................... US 23,400 429,975 1.2
Philippine Long Distance Telephone Company ADR (b).......... PHIL 5,000 275,625 0.8
------------
4,263,831
------------
SERVICES (7.6%)

Cellstar Corporation (c).................................... US 55,000 1,244,375 3.5
Wholesale & International Trade...........................
Century Telephone Enterprises............................... US 25,500 752,250 2.1
Telephone-Regional/Local..................................
Southwestern Bell Corp...................................... US 9,360 377,910 1.0
Telephone-Regional/Local..................................
IntelCom Group, Inc. (c).................................... US 25,000 331,250 0.9
Telephone-Regional/Local..................................
Audiovox Corp. Class A (c).................................. US 6,000 46,500 0.1
Wholesale & International Trade
------------
2,752,285
------------
CAPITAL GOODS (5.1%)

Mannesmann AG............................................... GER 6,740 1,836,560 5.1
Machinery & Engineering

CABLE TELEVISION (2.9%)

Tele-Communications Inc. Class A (c)........................ US 35,000 761,250 2.1
Associated Group Inc.:...................................... US -- -- 0.8
Class A (c)............................................... -- 6,500 152,750 --
Class B (c)............................................... -- 6,500 152,750 --
------------
1,066,750
------------
CONSUMER DURABLES (0.1%)

Three Five Systems Inc. (c)................................. US 500 18,188 0.1
Consumer Electronics......................................

BEVERAGES - ALCOHOLIC (0.0%)

Bavaria (c)................................................. COL 3,000 11,731 --
------------
Total Equity Investments (cost $32,543,536)................... 34,283,975 95.1
------------

NO. OF
WARRANTS (0.0%) WARRANTS
----------
Star Paging International Holdings Ltd. expires 1996 (c).... HK 200,000 5,945 --
Wireless Communications ------------

Total Warrants (cost $0)..................................... 5,945 --
-------------
</TABLE>

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

F-20
<PAGE> 156

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE TELECOMMUNICATIONS FUND
<TABLE>
<CAPTION>
% OF NET
MARKET VALUE ASSETS (A)
------------ ----------
<S> <C> <C>
SHORT-TERM INVESTMENTS (9.2%)

REPURCHASE AGREEMENT

Dated December 30, 1994, with State Street Bank & Trust Company, due
January 3, 1995, for an effective yield of 5.25% collateralized
by $3,305,000 United States Treasury Notes, 6.875% due 10/31/96.
(Market value $3,301,571 including accrued interest.)
(cost $3,299,962)........................................................ $ 3,299,962 9.2
------------ -----
Total Investments (cost $35,843,498)*....................................... 37,589,882 104.3
Other Assets and Liabilities................................................ (1,561,355) (4.3)
------------ -----
Net Assets.................................................................. $36,028,527 100.0
============ =====
</TABLE>

- ------------------
(a) Percentages indicated are based on net assets of $36,028,527.
(b) U.S. currency-denominated.
(c) Non-income producing security.
(d) Issued with detachable warrants. The current market value of each
warrant is zero.
(e) Restricted securities - At December 31, 1994, the fund owned the
following restricted security constituting 0.6% of net assets which may
not be publicly sold without registration under the Securities Act of
1933. (Note 1). Additional information on the restricted security is as
follows:
<TABLE>
<CAPTION>
MARKET
VALUE
ACQUISITION ACQUISITION PER SHARE
DESCRIPTION DATE SHARES COST AT 12/31/94
----------- ----------- ------ ----------- -----------
<S> <C> <C> <C> <C>
Matav............................................................... 7/20/94 1,000 $247,819 $221.04

</TABLE>

Abbreviation:
ADR-American Depository Receipt

* For Federal income tax purposes, cost is $35,875,603 and appreciation
(depreciation) of securities is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $3,882,570
Unrealized depreciation: (2,168,291)
----------
Net unrealized appreciation: $1,714,279
==========
</TABLE>

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

F-21

<PAGE> 157

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE TELECOMMUNICATIONS FUND

The Fund's Portfolio of Investments at December 31, 1994, was concentrated in
the following countries:
<TABLE>
<CAPTION>
PERCENTAGE OF NET ASSETS (a)
------------------------------------
SHORT-TERM
COUNTRY EQUITY & OTHER TOTAL
------- ------ ---------- -----
<S> <C> <C> <C>
Argentina...................................... 1.1 1.1
Brazil......................................... 2.6 2.6
Canada......................................... 4.5 4.5
Chile.......................................... 2.8 2.8
Denmark........................................ 2.2 2.2
Finland........................................ 7.1 7.1
Germany........................................ 5.1 5.1
Hong Kong...................................... 2.3 2.3
Hungary........................................ 0.6 0.6
Indonesia...................................... 2.0 2.0
Italy.......................................... 5.0 5.0
Japan.......................................... 1.4 1.4
Mexico......................................... 1.0 1.0
Netherlands.................................... 2.1 2.1
New Zealand.................................... 2.2 2.2
Philippines.................................... 0.8 0.8
Spain.......................................... 4.9 4.9
United Kingdom................................. 2.2 2.2
United States.................................. 45.2 4.9 50.1
---- --- -----
Total.......................................... 95.1 4.9 100.0
==== === =====
</TABLE>

- ------------------
(a) Percentages indicated are based on net assets of $36,028,527.
================================================================================

FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
DECEMBER 31, 1994

<TABLE>
<CAPTION>
UNREALIZED
MARKET VALUE CONTRACT DELIVERY APPRECIATED
(U.S. DOLLARS) PRICE DATE (DEPRECIATION)
-------------- -------- -------- --------------
<S> <C> <C> <C> <C>
CONTRACTS TO SELL:

Deutsche Marks......................................................... 1,874,111 1.49493 03-Feb-95 $65,776
Deutsche Marks......................................................... 1,744,863 1.56900 03-Feb-95 (24,021)
------------
Total Contracts to Sell (Receivable amount $3,660,729)................. 3,618,974 41,755
------------
The Value of Contracts to Sell as a Percentage of Net Assets is 10.0%.

CONTRACTS TO BUY:

Deutsche Marks......................................................... 995,218 1.53030 03-feb-95 (11,121)
------------ -------
Total Contracts to Buy (Payable amount $1,006,339)..................... 995,218 (11,121)
------------ -------
The Value of Contracts to Buy as a Percentage of Net Assets is 2.8%.
Total Open Forward Foreign Currency Contracts, Net................. $30,634
=======
</TABLE>

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

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

F-22
<PAGE> 158

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE EMERGING MARKETS FUND

PORTFOLIO OF INVESTMENTS

DECEMBER 31, 1994

<TABLE>
<CAPTION>
% OF NET
EQUITY INVESTMENTS COUNTRY SHARES MARKET VALUE ASSETS (A)
- ------------------ ------- ----------- ------------ ----------
<S> <C> <C> <C> <C>
CONSUMER NON-DURABLES (19.6%)

Cervecerias Backus & Johnston "T" . . . . . . . . . . . . . . . . . . PERU 200,000 $ 456,460 6.3
Beverages-Alcoholic
Embotelladora Lima S.A. (c) . . . . . . . . . . . . . . . . . . . . . PERU 52,000 320,770 4.4
Beverages-Non alcoholic
Panamerican Beverages, Inc. "A" (b) . . . . . . . . . . . . . . . . . MEX 9,600 303,600 4.2
Beverages-Non alcoholic
Tectoy Industria Brinquedos (Preferred) (c) . . . . . . . . . . . . . BRZL 253,900,000 264,104 3.6
Toys
Hellenic Biscuit Co. (c) . . . . . . . . . . . . . . . . . . . . . . . GREC 5,650 42,039 0.6
Food
Compania Cervecerias Unidas S.A. ADR (b) . . . . . . . . . . . . . . . CHLE 1,504 37,788 0.5
Beverages-Alcoholic
-----------
1,424,761
-----------
FINANCE (16.1%)

Banco Latino Americano de Exportaciones, S.A. (b) . . . . . . . . . . PAN 11,600 362,500 5.0
Banks-Regional
Ayala Land, Inc. "B" . . . . . . . . . . . . . . . . . . . . . . . . . PHIL 222,000 348,595 4.8
Real Estate
Peregrine Investment Holdings Limited . . . . . . . . . . . . . . . . HK 205,000 241,130 3.3
Investment Management
Grupo Financiero Bancomer, S.A. de C.V. "C" . . . . . . . . . . . . . MEX 215,000 119,691 1.6
Banks-Regional
Turkiye Garanti Bankasi A.S. . . . . . . . . . . . . . . . . . . . . . TRKY 249,000 63,382 0.9
Banks-Regional
Bangkok Bank Public Co. Ltd. (Foreign) . . . . . . . . . . . . . . . . THAI 3,200 34,174 0.5
Banks-Regional
-----------
1,169,472
-----------
SERVICES (15.5%)

Grupo Televisa, S.A. de C.V. 144A GDR (b)(d) . . . . . . . . . . . . . MEX 9,000 285,750 3.9
Broadcasting & Publishing
PT Indonesia Satellite (Indosat) ADR (b)(c) . . . . . . . . . . . . . INDO 7,500 268,125 3.7
Telephone Networks
Telefonos de Mexico, S.A. de C.V. "L" ADR (b) . . . . . . . . . . . . MEX 6,000 246,000 3.4
Telephone Networks
Saha Pathanapibul (Foreign) . . . . . . . . . . . . . . . . . . . . . THAI 55,100 144,913 2.0
Wholesale & International Trade
Telecomunicacoes Brasileiras S.A. - Telebras Sponsored ADR (b) . . . . BRZL 1,950 87,019 1.2
Telephone Networks
Pacific Basin Bulk Shipping - Units (b) . . . . . . . . . . . . . . . HK 5,000 66,250 0.9
Transportation-Shipping
Compania de Telefonos de Chile S.A. ADR (b) . . . . . . . . . . . . . CHLE 350 27,563 0.4
Telephone Networks
-----------
1,125,620
-----------
</TABLE>

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

F-23
<PAGE> 159

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE EMERGING MARKETS FUND

<TABLE>
<CAPTION>
% OF NET
EQUITY INVESTMENTS COUNTRY SHARES MARKET VALUE ASSETS (A)
- ------------------ ------- ------ ------------ ----------
<S> <C> <C> <C> <C>
MATERIALS/BASIC INDUSTRIES (12.0%)

Hylsamex 144A ADR (b)(c)(d) . . . . . . . . . . . . . . . . . . . . . MEX 14,100 $ 237,938 3.3
Metals-Steel
NTS Steel Groups Co. Ltd. (Foreign) . . . . . . . . . . . . . . . . . THAI 98,000 214,784 3.0
Metals-Steel
Caemi Mineracao E Metal (Preferred) (c) . . . . . . . . . . . . . . . BRZL 1,150,000 187,589 2.6
Metals-Ferrous
Venezolana de Pulpa Y Papel 144A GDR (b)(d) . . . . . . . . . . . . . VENZ 56,000 164,500 2.2
Forest Products
Kartonsan Karton Sanayi (c) . . . . . . . . . . . . . . . . . . . . . TRKY 73,000 35,078 0.5
Forest Products
Indo Gulf Fertilizers 144A GDR (d) . . . . . . . . . . . . . . . . . . IND 7,500 21,375 0.3
Chemicals
TPI Polene Company Ltd. (Foreign) . . . . . . . . . . . . . . . . . . THAI 925 8,257 0.1
Chemicals
-----------
869,521
-----------

MULTI-INDUSTRY (6.5%)

Aboitiz Equity Ventures Inc. 144A GDR (b)(c)(d) . . . . . . . . . . . PHIL 1,104,000 260,033 3.6
Conglomerate
Mirgor 144A GDR (b)(c)(d) . . . . . . . . . . . . . . . . . . . . . . ARG 28,000 157,500 2.2
Auto Parts
Cesk En Zavody (b)(c)(d) . . . . . . . . . . . . . . . . . . . . . . . CZCH 1,000 48,693 0.7
Miscellaneous
-----------
466,226
-----------

ENERGY (3.0%)

Companhia Energetica de Minas Gerais (CEMIG) 144A ADR (b)(c)(d) . . . BRZL 8,200 193,823 2.7
Electrical & Gas Utilities
Czech Power Company GDR (b)(c) . . . . . . . . . . . . . . . . . . . . CZCH 500 23,000 0.3
Electrical & Gas Utilities
-----------
216,823
-----------

COUNTRY FUNDS (2.0%)

Harvard Investment Co. Growth Fund (c) . . . . . . . . . . . . . . . . CZCH 4,833 93,268 1.3
Country Funds
Harvard Investment Co. Dividend Fund (c) . . . . . . . . . . . . . . . CZCH 2,500 50,125 0.7
Country Funds
-----------
143,393
-----------

CONSUMER DURABLES (1.9%)

Consorcio Grupo Dina, S.A. de C.V. ADR (b) . . . . . . . . . . . . . . MEX 12,500 118,750 1.6
Automobiles
Tofas Turk Otomobil Fabrikasi 144A GDR (b)(d) . . . . . . . . . . . . TRKY 5,700 24,567 0.3
Automobiles
-----------
143,317
-----------

CAPITAL GOODS (1.8%)

Netas Telekomunik: . . . . . . . . . . . . . . . . . . . . . . . . . . TRKY -- -- 1.1
Telecom Equipment
New (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 142,500 45,341 --
Common (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 114,000 36,273 --
Tadiran Ltd. (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . ISRL 2,400 50,100 0.7
Telecom Equipment
-----------
131,714
----------- ----
Total Equity Investments(cost $6,201,823) . . . . . . . . . . . . . . . 5,690,847 78.4
----------- ----
</TABLE>

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

F-24
<PAGE> 160

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE EMERGING MARKETS FUND

<TABLE>
<CAPTION>
PRINCIPAL % OF NET
FIXED INCOME INVESTMENTS CURRENCY AMOUNT MARKET VALUE ASSETS (A)
- ------------------------ -------- --------- ------------ ----------
<S> <C> <C> <C> <C>
GOVERNMENT OBLIGATION (1.6%)

Republic of Venezuela, Debt Conversion Bond, 7.6875%
due 12/18/07 (b)(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . USD 250,000 $ 113,594 1.6
----------- -----
Total Fixed Income Investments (cost $123,871) . . . . . . . . . . . . . . . . . 113,594 1.6
----------- -----

SHORT-TERM INVESTMENTS
REPURCHASE AGREEMENT (21.6%)

Dated December 30, 1994 with State Street Bank & Trust Company, due
January 3, 1995, for an effective yield of 5.25% collateralized by
$1,150,000 United States Treasury Bond, 12.0% due 08/15/13.
(Market Value $1,583,781, including accrued interest.) (cost $1,577,460) . . 1,577,460 21.6
----------- -----
Total Investments (cost $7,903,154)* . . . . . . . . . . . . . . . . . . . . . . 7,381,901 101.6
Other Assets and Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . (115,276) (1.6)
----------- -----
Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,266,625 100.0
=========== =====
</TABLE>

- -----------------
(a) Percentages indicated are based on net assets of $7,266,625.
(b) U.S. currency denominated.
(c) Non-income producing security.
(d) Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
(e) The coupon rate shown on floating rate note represents the rate at period
end.

Abbreviations:
ADR - American Depository Receipt
GDR - Global Depository Receipt

* For Federal income tax purposes, cost is $7,903,154 and appreciation
(depreciation) of securities is as follows:

<TABLE>
<S> <C>
Unrealized appreciation: $ 267,271)
Unrealized depreciation: (788,524)
----------
Net unrealized depreciation: $ (521,253)
==========
</TABLE>

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

F-25

<PAGE> 161

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE EMERGING MARKETS FUND

The Fund's Portfolio of Investments at December 31, 1994 was concentrated in
the following countries:

<TABLE>
<CAPTION>
PERCENTAGE OF NET ASSETS (A)
---------------------------------------------
SHORT-TERM
COUNTRY EQUITY FIXED INCOME & OTHER TOTAL
------- ------ ------------ ---------- -----
<S> <C> <C> <C> <C>
Argentina . . . . . . 2.2 2.2
Brazil . . . . . . . . 10.1 10.1
Chile . . . . . . . . 0.9 0.9
Czech Republic . . . . 3.0 3.0
Greece . . . . . . . . 0.6 0.6
Hong Kong . . . . . . 4.2 4.2
India . . . . . . . . 0.3 0.3
Indonesia . . . . . . 3.7 3.7
Israel . . . . . . . . 0.7 0.7
Mexico . . . . . . . . 18.0 18.0
Panama . . . . . . . . 5.0 5.0
Peru . . . . . . . . . 10.7 10.7
Philippines . . . . . 8.4 8.4
Thailand . . . . . . . 5.6 5.6
Turkey . . . . . . . . 2.8 2.8
United States . . . . 20.0 20.0
Venezuela . . . . . . 2.2 1.6 3.8
---- --- ---- -----
Total . . . . . . . . 78.4 1.6 20.0 100.0
==== === ==== =====
</TABLE>

(a) Percentages indicated are based on net assets of $7,266,625.

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

F-26

<PAGE> 162

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE AMERICA FUND

PORTFOLIO OF INVESTMENTS

December 31, 1994

<TABLE>
<CAPTION>
% OF NET
EQUITY INVESTMENTS SHARES MARKET VALUE ASSETS (A)
- ------------------ ------ ------------ ----------
<S> <C> <C> <C>
TECHNOLOGY (20.8%)

Seagate Technology (b) . . . . . . . . . . . . . . . . . . . . . . . . 18,000 $ 432,000 2.8
Computers & Peripherals
Lattice Semiconductor Corp. (b) . . . . . . . . . . . . . . . . . . . 24,700 413,725 2.7
Semiconductors
Applied Materials Inc. (b) . . . . . . . . . . . . . . . . . . . . . . 9,600 405,600 2.7
Semiconductors
BMC Software (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,600 375,375 2.5
Software
Cirrus Logic Inc. (b) . . . . . . . . . . . . . . . . . . . . . . . . 15,800 355,500 2.3
Semiconductors
Integrated Device Technology Inc. (b) . . . . . . . . . . . . . . . . 11,500 339,250 2.2
Semiconductors
Cisco Systems Inc. (b) . . . . . . . . . . . . . . . . . . . . . . . . 8,900 312,613 2.0
Networking
Dallas Semiconductor Corp. (b) . . . . . . . . . . . . . . . . . . . . 16,400 272,650 1.8
Semiconductors
S3 Incorporated (b) . . . . . . . . . . . . . . . . . . . . . . . . . 13,100 206,325 1.4
Semiconductors
Excalibur Technology Corp. (b)(c) . . . . . . . . . . . . . . . . . . 11,000 63,250 0.4
Software
---------
3,176,288
---------

SERVICES (9.7%)

Proffitt's Inc. (b) . . . . . . . . . . . . . . . . . . . . . . . . . 13,100 291,475 1.9
Retailers-Other
United Video Satellite Group Inc. Class A (b) . . . . . . . . . . . . 10,600 254,400 1.7
Cable Television
Savoy Pictures Entertainment Inc. (b) . . . . . . . . . . . . . . . . 37,200 241,800 1.6
Leisure & Tourism
Equity Inns Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,700 238,700 1.5
Leisure & Tourism
Rio Hotel and Casino Inc. (b) . . . . . . . . . . . . . . . . . . . . 16,200 196,425 1.3
Leisure & Tourism
Friedman's Inc. Class A (b) . . . . . . . . . . . . . . . . . . . . . 10,400 179,400 1.2
Retailers-Other
The Buckle Inc. (b) . . . . . . . . . . . . . . . . . . . . . . . . . 7,600 81,700 0.5
Retailers-Apparel
---------
1,483,900
---------

FINANCE (9.2%)

Leader Financial Corp. (b) . . . . . . . . . . . . . . . . . . . . . . 17,600 363,000 2.4
Savings & Loan
Advanta Corporation Class B . . . . . . . . . . . . . . . . . . . . . 13,200 333,300 2.2
Consumer Finance
Mid-America Apartment Communities Inc. . . . . . . . . . . . . . . . . 8,000 214,000 1.4
Real Estate
Signet Banking Corp. . . . . . . . . . . . . . . . . . . . . . . . . . 7,100 203,238 1.3
Banks-Regional
Trans Financial Bancorp Inc. . . . . . . . . . . . . . . . . . . . . . 10,100 131,300 0.9
Savings & Loan
RFS Hotel Investors Inc. . . . . . . . . . . . . . . . . . . . . . . 8,500 124,313 0.8
Real Estate
Capitol American Financial Corp. . . . . . . . . . . . . . . . . . . . 1,400 32,200 0.2
Insurance-Multi-Line
---------
1,401,351
---------
</TABLE>

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

F-27
<PAGE> 163

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE AMERICA FUND

<TABLE>
<CAPTION>
% OF NET
EQUITY INVESTMENTS SHARES MARKET VALUE ASSETS (A)
- ------------------ ------ ------------ ----------
<S> <C> <C> <C>
CONSUMER NON-DURABLES (7.9%)

Haggar Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,400 $ 464,600 3.0
Textiles & Apparel
Premark International Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 8,100 362,601 2.4
Household Products
Drypers Corp. (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,300 191,250 1.3
Personal Care/Cosmetics
Varsity Spirit Corp. (b) . . . . . . . . . . . . . . . . . . . . . . . . . . 9,900 180,675 1.2
Textiles & Apparel
-----------
1,199,126
-----------

CONSUMER DURABLES (5.3%)

Eaton Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,900 440,474 2.9
Auto Parts
Syratech Corp. (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,500 192,938 1.3
Appliances & Household Durables
Lifetime Hoan Corp. (b) . . . . . . . . . . . . . . . . . . . . . . . . . . 14,300 168,025 1.1
Appliances & Household Durables
-----------
801,437
-----------

HEALTH CARE (4.3%)

Health Systems International Inc. Class A (b) . . . . . . . . . . . . . . . 12,900 391,838 2.6
Health Care Services
Nellcor Inc. (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,300 108,900 0.7
Medical Technology & Supplies
Abaxis Inc. (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,000 106,250 0.7
Medical Technology & Supplies
Grancare Inc. (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,400 42,000 0.3
Health Care Services
-----------
648,988
-----------

CAPITAL GOODS (0.7%)

OfficeMax Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,100 108,650 0.7
Office Equipment
----------- ----
Total Equity Investments (cost $8,338,044) . . . . . . . . . . . . . . . . . . 8,819,740 57.9
----------- ----
</TABLE>

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

F-28
<PAGE> 164

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE AMERICA FUND

<TABLE>
<CAPTION>
PRINCIPAL % OF NET
SHORT-TERM INVESTMENTS AMOUNT MARKET VALUE ASSETS (A)
- ---------------------- --------- ------------ ----------
<S> <C> <C> <C>
TREASURY BILLS (26.2%)

United States Treasury Bill due 1/5/95 . . . . . . . . . . . . . . . . . . . . 4,000,000 $ 3,999,556 26.2
Government/Agency (cost $3,999,556)
Repurchase Agreement (20.1%)
Dated December 30, 1994, with State Street Bank and Trust
Company due January 3, 1995, for an effective yield of 5.25%
collateralized by $2,235,000 United States Treasury Bond, 12.0%
due 08/15/13.(Market Value $3,078,044, including accrued interest.)
(cost $3,073,896) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,073,896 20.1
----------- -----
Total Short-Term Investments (cost $7,073,452) . . . . . . . . . . . . . . . . . 7,073,452 46.3
----------- -----
Total Investments (cost $15,411,496)* . . . . . . . . . . . . . . . . . . . . . 15,893,192 104.2
Other Assets and Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . (635,926) (4.2)
----------- -----
Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $15,257,266 100.0
=========== =====
</TABLE>

- -----------------
(a) Percentages indicated are based on net assets $15,257,266.
(b) Non-income producing security.
(c) The following is a restricted security bought from a private placement
and is subject to restriction from public resale:

<TABLE>
<CAPTION>
MARKET VALUE
ACQUISTION PER SHARE AT
DATE SHARES COST 12/31/94
---------- ------ ------------ ------------
<S> <C> <C> <C> <C>
Excalibur Technology Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4/19/94 11,000 $88,000 $5.75
</TABLE>

* For Federal income tax purposes, cost is $15,425,837 and appreciation
(depreciation) of securities is as follows:

<TABLE>
<S> <C>
Unrealized appreciation: $957,949
Unrealized depreciation: (490,594)
--------
Net unrealized appreciation: $467,355
========
</TABLE>

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

F-29

<PAGE> 165
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE NEW PACIFIC FUND

PORTFOLIO OF INVESTMENTS

December 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
% OF NET
EQUITY INVESTMENTS COUNTRY SHARES MARKET VALUE ASSETS (A)
- ------------------ ------- ------ ------------ ----------
<S> <C> <C> <C> <C>
FINANCE (18.8%)

Phatra Thanakit Co. Ltd. (Foreign)...................... THAI 67,500 $ 521,817 2.7
Investment Management
Ayala Land, Inc. "B".................................... PHIL 250,000 392,562 2.0
Real Estate
Development & Commercial Bank Bhd....................... MAL 150,000 364,420 1.9
Banks-Money Center
Bangkok Bank Public Co. Ltd.(Foreign)................... THAI 30,000 320,383 1.6
Banks-Money Center
Development Bank of Singapore (Foreign)................. SING 30,000 309,066 1.6
Banks-Money Center
Westpac Banking Corporation Ltd.:....................... AUSL -- -- 1.4
Banks-Money Center
Common................................................ -- 76,747 258,959 --
6.5% Conv. Preferred until 6/30/98.................... -- 2,800 15,529 --
Siam Commercial Bank Public Co. Ltd. (Foreign).......... THAI 25,000 229,129 1.2
Banks-Money Center
Public Finance Berhad (Foreign)......................... MAL 120,000 199,373 1.0
Banks-Money Center
PT Lippo Bank (Foreign)................................. INDO 120,000 185,708 1.0
Banks-Money Center
Kay Hian James Capel Holdings Ltd. (Foreign)............ SING 144,000 181,978 0.9
Securities Broker
Siam City Bank Ltd. (Foreign)........................... THAI 140,000 178,522 0.9
Banks-Money Center
Bank of East Asia, Ltd.................................. HK 31,801 127,015 0.7
Banks-Money Center
Hang Seng Bank.......................................... HK 16,030 114,996 0.6
Banks-Money Center
HSBC Holdings PLC....................................... HK 10,000 107,930 0.6
Banks-Money Center
PT Bank Bali (Foreign).................................. INDO 40,000 92,854 0.5
Banks-Money Center
Cheung Kong (Holdings) Ltd.............................. HK 10,000 40,716 0.2
Real Estate
------------
3,640,957
------------

MATERIALS/BASIC INDUSTRY (15.9%)

Broken Hill Proprietary Company Ltd..................... AUSL 33,606 510,398 2.6
Misc. Materials & Commodities
TPI Polene Company Ltd. (Foreign) (c)................... THAI 55,375 494,282 2.5
Chemicals
PT Barito Pacific Timber (Foreign) (c).................. INDO 245,000 387,517 2.0
Forest Products
Western Mining Corporation Holdings Limited............. AUSL 66,000 382,935 2.0
Metals-Non-Ferrous
Carter Holt Harvey Limited.............................. NZ 150,000 307,338 1.6
Forest Products
Siam Cement Co. Ltd. (Foreign).......................... THAI 5,000 299,661 1.5
Cement
Amcor Ltd............................................... AUSL 40,000 289,172 1.5
Paper/Packaging
Royal Ceramic Industry Company, Ltd. (Local)............ THAI 100,000 127,515 0.7
Building Materials & Components
Normandy Poseidon Ltd................................... AUSL 86,794 126,569 0.7
Gold

</TABLE>

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

F-30
<PAGE> 166
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE NEW PACIFIC FUND

% OF NET
EQUITY INVESTMENTS COUNTRY SHARES MARKET VALUE ASSETS (A)
- ------------------ ------- ------ ------------ ----------
<S> <C> <C> <C> <C>
PT Ekadharma Tape Industries............................ INDO 66,000 $ 105,143 0.5
Chemicals
Hong Leong Industries Bhd............................... MAL 12,000 62,069 0.3
Building Materials & Components
------------
3,092,599
------------

SERVICES (15.3%)

Mandarin Oriental Hotel Group........................... HK 370,000 432,818 2.2
Leisure & Tourism
International Container Terminal Services (ICTS) (c).... PHIL 350,000 282,025 1.5
Transportation-Shipping
Overseas Union Enterprises Ltd.......................... SING 40,000 226,648 1.1
Leisure & Tourism
News Corporation Ltd.:.................................. AUSL -- -- 1.2
Broadcasting & Publishing
Common................................................ -- 40,078 156,992 --
Preferred............................................. -- 20,039 69,014 --
PT Modern Photo Film Company............................ INDO 50,000 211,652 1.1
Retailers-Other
Matichon Newspaper Group (Foreign) (c).................. THAI 30,000 193,664 1.0
Broadcasting & Publishing
Apollo Enterprises Ltd.................................. SING 200,000 189,560 1.0
Leisure & Tourism
Telekom Malaysia Bhd. (c)............................... MAL 25,000 169,475 0.9
Telephone Networks
Telecom Corporation of New Zealand Ltd.................. NZ 48,000 156,742 0.8
Telephone Networks
AAPC Limited............................................ AUSL 235,500 138,830 0.7
Leisure & Tourism
Ito-Yokado Co. Ltd...................................... JPN 2,000 107,082 0.6
Retailers-Other
Shimamura Co. Ltd....................................... JPN 2,000 100,452 0.5
Retailers-Apparel
Autobacs Seven.......................................... JPN 800 95,630 0.5
Retailers-Other
Ten Allied Co........................................... JPN 3,000 84,380 0.4
Restaurants
Philippine Long Distance Telephone Company ADR (b)...... PHIL 1,500 82,688 0.4
Telephone-Long Distance
Marui Co., Ltd.......................................... JPN 4,000 73,129 0.4
Retailers-Other
Hankyu Department Store................................. JPN 4,000 51,431 0.3
Retailers-Other
Asatsu.................................................. JPN 1,000 49,021 0.2
Business & Public Services
Malaysian Airlines System Bhd. (c)...................... MAL 16,000 47,962 0.2
Transportation-Airlines
Thai Airways International Ltd.......................... THAI 17,000 36,920 0.2
Transportation-Airlines
High Fashion International (c).......................... HK 170,000 22,853 0.1
Retailers-Apparel
------------
2,978,968
------------
CONSUMER DURABLES (11.2%)

Samsung Electronics Co.:................................ KOR -- -- 1.9
Consumer Electronics
144A GDR (b)(c)(d).................................... -- 7,000 350,000 --
New GDR (b)(c)(d)..................................... -- 290 14,500 --
Johnson Electric Holdings (c)........................... HK 140,000 321,205 1.7
Auto Parts
Edaran Otomobil Nasional Bhd............................ MAL 40,000 304,075 1.6
Automobiles

</TABLE>

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

F-31

<PAGE> 167

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE NEW PACIFIC FUND

% OF NET
EQUITY INVESTMENTS COUNTRY SHARES MARKET VALUE ASSETS (A)
- ------------------ ------- ------ ------------ ----------
<S> <C> <C> <C> <C>
PT Astra International (Foreign)........................... INDO 118,800 $ 227,110 1.2
Automobiles
Diversified Resources Bhd. (c)............................. MAL 100,000 225,313 1.2
Automobiles
Hyundai Motor Co. 144A GDR (b)(c)(d)....................... KOR 12,000 225,000 1.1
Automobiles
Futuris Corporation Ltd.................................... AUSL 200,000 172,200 0.9
Auto Parts
GP Batteries International Ltd. (b)........................ SING 48,000 132,000 0.7
Consumer Electronics
Mr Max..................................................... JPN 3,300 85,193 0.4
Appliances & Household Durables
Tokai Rubber Industries.................................... JPN 2,000 33,752 0.2
Auto Parts
Singer Thailand Ltd.:...................................... THAI -- -- 0.2
Appliances & Household Durables
Foreign.................................................. -- 3,500 29,847 --
Local.................................................... -- 1,500 12,791 --
Jardine International Motor Holdings Ltd................... HK 20,000 21,069 0.1
Automobiles
------------
2,154,055
------------
COUNTRY FUNDS (5.9%)

India Growth Fund, Inc. (b)................................ IND 25,000 481,250 2.5
Korea Fund, Inc. (b)....................................... KOR 20,565 467,854 2.4
Taiwan Fund, Inc. (b)...................................... TWN 4,000 115,500 0.6
R.O.C. Taiwan Fund (b)..................................... TWN 7,000 83,125 0.4

------------
1,147,729
------------
CAPITAL GOODS (5.3%)

E.R.G. Australia Limited (c)............................... AUSL 200,000 333,540 1.7
Electrical Plant/Equipment
United Engineers (Malaysia) Ltd............................ MAL 42,000 207,367 1.1
Construction
International Engineering Public Company Ltd. (Foreign).... THAI 24,000 202,750 1.0
Telecom Equipment
Uniphone Telecommunications Bhd............................ MAL 80,000 154,859 0.8
Telecom Equipment
PT United Tractors (Local)................................. INDO 50,000 106,964 0.6
Machinery & Engineering
Mitsubishi Heavy Industries Ltd............................ JPN 3,000 22,903 0.1
Machinery & Engineering
------------
1,028,383
------------
TECHNOLOGY (4.6%)

Hosiden Electronics........................................ JPN 20,000 429,935 2.2
Computers & Peripherals
Varitronix International Ltd............................... HK 250,000 355,458 1.8
Computers & Peripherals
Kyocera Corporation........................................ JPN 1,000 74,234 0.4
Semiconductors
Tokyo Electron Ltd......................................... JPN 1,000 31,140 0.2
Semiconductors
------------
890,767
------------
MULTI-INDUSTRY/CONGLOMERATE (4.3%)

First Pacific Company Ltd.................................. HK 570,000 416,274 2.2
Conglomerate
Straits Steamship Land Ltd................................. SING 120,000 412,088 2.1
Conglomerate
------------
828,362
------------
</TABLE>

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

F-32

<PAGE> 168

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE NEW PACIFIC FUND

% OF NET
EQUITY INVESTMENTS COUNTRY SHARES MARKET VALUE ASSETS (A)
- ------------------ ------- ------ ------------ ----------
<S> <C> <C> <C> <C>
CONSUMER NON-DURABLES (2.6%)

Seafresh Industry (c)....................................... THAI 35,000 $ 181,311 0.9
Food
Reliance Industries Ltd. 144A GDR (b)(c)(d)................. IND 8,000 156,000 0.8
Textiles & Apparel
Sega Enterprises............................................ JPN 1,000 57,760 0.3
Toys
Magnum Corporation Bhd...................................... MAL 30,000 53,840 0.3
Recreation
Sri Charoen Industries Ltd.................................. THAI 6,000 31,560 0.2
Household Products
Essex International Company Ltd. (c)........................ THAI 10,000 27,296 0.1
Other Consumer Goods
------------
507,767
------------
ENERGY (2.0%)

Oil Search Ltd.............................................. AUSL 560,000 403,971 2.0
Oil

HEALTH CARE (1.6%)

PT Dankos Laboratories (Foreign) (c)........................ INDO 46,500 240,225 1.2
Pharmaceuticals
Sankyo Co. Ltd.............................................. JPN 2,000 49,824 0.3
Pharmaceuticals
SRL Inc..................................................... JPN 1,000 18,081 0.1
Health Care Services
------------
308,130
------------ ----
Total Equity Investments (cost $17,764,239) 16,981,688 87.5
------------ ----

PRINCIPAL
FIXED INCOME INVESTMENTS CURRENCY AMOUNT
-------- ---------
CORPORATE BONDS (2.0%)

ACER Inc., Conv. Bond 4% due 6/10/21........................ USD 80,000 192,400 1.0
Taiwanese Corporate Bond
Daewoo Corp., Conv. Bond, 0% due 12/31/04................... USD 265,000 191,463 1.0
Korean Corporate Bond
United Engineers (Malaysia) Ltd., Convertible
Unsecured Loan Stock, 4%
until 5/22/99............................................ MYR 21,000 8,969 --
Malaysian Corporate Bond
------------ ----
Total Fixed Income Investments (cost $396,821)............. 392,832 2.0
------------ ----

NO. OF
RIGHTS/
COUNTRY WARRANTS
------- --------
RIGHTS (0.0%)

Development & Commercial Bank Bhd. expires 1/12/95 (c)...... MAL 37,500 0 --
Banks-Money Center
------------ ----
Total Rights (cost $0)........................................ 0 --
------------ ----
Warrants (0.1%)

Uniphone Telecommunications Bhd. expires 9/7/99 (c)......... MAL 20,000 13,402 0.1
Telecom Technology ------------ ---

Total Warrants (cost $4,556).................................. 13,402 0.1
------------ ---
</TABLE>

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

F-33

<PAGE> 169

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE NEW PACIFIC FUND

% OF NET
SHORT-TERM INVESTMENTS MARKET VALUE ASSETS (A)
- ---------------------- ------------ ----------

REPURCHASE AGREEMENT (9.8%)

<S> <C> <C>
Dated December 30, 1994, with State Street Bank and Trust Company, due
January 3, 1995, for an effective yield of 5.25% collateralized by
$1,380,000 U.S. Treasury Bond, 12.0% due 08/15/13. (Market value
$1,900,538 including accrued interest.)
(Cost $1,895,553).............................................................. $ 1,895,553 9.8
----------- -----
Total Investments (cost $20,061,169)*............................................. 19,283,475 99.4
Other Assets and Liabilities...................................................... 107,756 0.6
----------- -----
Net Assets........................................................................ $19,391,231 100.0
=========== =====

</TABLE>
- ------------------
(a) Percentages indicated are based on net assets of $19,391,231.
(b) U.S. currency denominated.
(c) Non-income producing security
(d) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.

Abbreviations:
ADR-American Depository Receipt
GDR-Global Depository Receipt
* For Federal income tax purposes, cost is $20,061,169 and appreciation
(depreciation) of securities is as follows:

Unrealized appreciation: $ 1,303,594
Unrealized depreciation: (2,081,288)
------------
Net unrealized depreciation: $ (777,694)
============
- --------------------------------------------------------------------------------

The Fund's Portfolio of Investments at December 31, 1994 was concentrated in
the following countries:
<TABLE>
<CAPTION>

PERCENTAGE OF NET ASSETS (A)
------------------------------------------------------
FIXED RIGHTS & SHORT-TERM
COUNTRY EQUITY INCOME WARRANTS & OTHER TOTAL
------- ------ ------ -------- ---------- -----
<S> <C> <C> <C> <C> <C>
Australia 14.7 14.7
Hong Kong 10.2 10.2
India 3.3 3.3
Indonesia 8.1 8.1
Japan 7.1 7.1
Korea 5.4 1.0 6.4
Malaysia 9.3 0.0 0.1 9.4
New Zealand 2.4 2.4
Philippines 3.9 3.9
Singapore 7.4 7.4
Taiwan 1.0 1.0 2.0
Thailand 14.7 14.7
United States 10.4 10.4
---- --- --- ---- -----
Total 87.5 2.0 0.1 10.4 100.0
==== === === ==== =====
</TABLE>

- ------------------------
(a) Percentages indicated are based on net assets of $19,391,231.

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

F-34
<PAGE> 170
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE EUROPE FUND

PORTFOLIO OF INVESTMENTS

December 31, 1994

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
% OF NET
EQUITY INVESTMENTS COUNTRY SHARES MARKET VALUE ASSETS (A)
- ------------------ ------- ------ ------------ ----------
<S> <C> <C> <C> <C>
FINANCE (18.8%)

Anglo-Irish Bank Corporation PLC UK 500,000 $ 422,80 2.8
Banks-Money Center
Cetelem Group FR 1,700 304,055 2.0
Consumer Finance
Cardif S.A. FR 2,000 264,444 1.8
Insurance-Multi-Line
Banco de Santander S.A. SPN 6,000 229,875 1.5
Banks-Money Center
Skandinaviska Enskilda Banken "A" Free (b) SWDN 40,000 228,885 1.5
Banks-Money Center
Deutsche Bank AG GER 400 185,962 1.2
Banks-Money Center
Baloise Holding Ltd. (Registered) SWTZ 100 181,888 1.2
Insurance-Multi-Line
CS Holdings (Bearer) SWTZ 400 171,188 1.1
Banks-Money Center
Lloyds Bank PLC UK 15,000 129,776 0.9
Banks-Money Center
Assicurazioni Generali S.P.A. ITLY 5,500 129,482 0.9
Insurance-Multi-Line
Perpetual PLC UK 7,000 125,509 0.8
Investment Management
M & G Group PLC UK 7,400 113,213 0.8
Investment Management
Istituto Mobiliare Italiano S.P.A. ADR (c) ITLY 6,000 110,250 0.7
Banks-Money Center
National Westminster Bank PLC UK 11,500 92,382 0.6
Banks-Money Center
Axa FR 1,776 82,289 0.5
Insurance-Multi-Line
Aegon N.V. NETH 1,029 65,817 0.4
Insurance-Life
Unitas Bank Ltd. "A" (b) FIN 14,000 36,098 0.2
Banks-Money Center
-----------
2,873,913
-----------

SERVICES (15.6%)

British Airport Authority PLC UK 40,000 296,273 2.0
Transportation-Airlines
Ecco Travail Temporaire S.A. FR 5,000 279,989 1.9
Business & Public Services
Marieberg Tidnings AB-A Free SWDN 10,000 226,193 1.5
Broadcasting & Publishing
Euro RSCG Worldwide, S.A. FR 2,028 208,896 1.4
Broadcasting & Publishing
Telecom Italia S.P.A. (b) ITLY 80,000 208,331 1.4
Telephone Networks
Granada Group PLC UK 25,168 201,785 1.3
Leisure & Tourism
Stet Societa' Finanziaria Telfonica S.P.A. ITLY 60,000 176,982 1.2
Telephone Networks
Macintosh N.V. NETH 6,250 160,266 1.1
Retailers-Other

</TABLE>

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

F-35

<PAGE> 171

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE EUROPE FUND

<TABLE>
<CAPTION>
% OF NET
EQUITY INVESTMENTS COUNTRY SHARES MARKET VALUE ASSETS (A)
- ------------------ ------- ------ ------------ ----------
<S> <C> <C> <C> <C>

Telefonica de Espana SPN 12,000 $ 141,847 1.0
Telephone Networks
S.I.T.A. FR 1,000 129,787 0.9
Business & Public Services
Bremer Vulkan Verbund AG (b) GER 1,500 91,141 0.6
Transportation-Shipping
National Express Group PLC UK 20,000 89,884 0.6
Transportation-Road & Rail
Hagemeyer N.V. NETH 898 73,221 0.5
Wholesale & International Trade
Elsevier N.V. NETH 3,000 31,290 0.2
Broadcasting & Publishing
-----------
2,315,885
-----------
CAPITAL GOODS (14.4%)

Allgon AB-A Free SWDN 25,200 475,004 3.2
Telecom Equipment
Nokia AB: FIN -- -- 2.6
Telecom Equipment
Preferred Free -- 2,000 295,044 --
Common -- 600 88,513 --
Bilfinger & Berger Bau AG GER 565 288,209 1.9
Machinery & Engineering
General Electric PLC UK 60,000 259,317 1.7
Aerospace/Defense
Costain Group PLC (b) UK 500,000 168,337 1.1
Construction
Weir Group PLC UK 37,971 167,677 1.1
Machinery & Engineering
Siebe PLC UK 19,000 165,424 1.1
Industrial Components
Mannesmann AG GER 503 137,061 0.9
Machinery & Engineering
Alcatel Alsthom FR 1,326 113,242 0.8
Telecom Equipment
-----------
2,157,828
-----------
MATERIALS/BASIC INDUSTRY (13.4%)

Hoechst AG GER 2,000 435,204 2.9
Chemicals
RTZ Corporation PLC (Registered) (b) UK 19,000 246,351 1.6
Metals-Non-Ferrous
British Steel PLC UK 100,000 241,152 1.6
Metals-Steel
Burgo (Cartiere) S.P.A. (b) ITLY 35,999 238,809 1.6
Forest Products
Montedison S.P.A. (b) ITLY 300,000 226,412 1.5
Chemicals
Meyer International PLC UK 40,000 223,614 1.5
Building Materials & Components
Outokumpu OY "A" (b) FIN 12,000 220,649 1.5
Metals-Non-Ferrous
Repola OY FIN 10,000 180,704 1.2
Forest Products
-----------
2,012,895
-----------

</TABLE>

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

F-36

<PAGE> 172
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE EUROPE FUND

<TABLE>
<CAPTION>
% OF NET
EQUITY INVESTMENTS COUNTRY SHARES MARKET VALUE ASSETS (A)
- ------------------ ------- ------ ------------ ----------
<S> <C> <C> <C> <C>
CONSUMER DURABLES (9.1%)
Merloni Elettrodomestici S.P.A...................................... ITLY 80,000 $306,078 2.0
Appliances & Household Durables
Volvo AB-B Free..................................................... SWDN 15,000 282,741 1.9
Automobiles
Lucas Industries PLC................................................ UK 80,000 258,064 1.7
Auto Parts
Volkswagen AG....................................................... GER 800 220,056 1.5
Automobiles
C.H.A. Chemie Holding AG............................................ GER 600 126,997 0.9
Appliances & Household Durables
Mayflower Corporation PLC........................................... UK 150,000 119,793 0.8
Auto Parts
Bellway PLC........................................................ UK 15,200 47,604 0.3
Housing
----------
1,361,333
----------
ENERGY (4.1%)
British Petroleum Company PLC....................................... UK 45,000 299,836 2.0
Oil
BBC Brown Boveri AG (Bearer)........................................ SWTZ 300 258,387 1.7
Energy Equipment & Services
Motor-Columbus Ltd. (b)............................................. SWTZ 40 56,859 0.4
Electrical & Gas Utilities
----------
615,082
----------
CONSUMER NON-DURABLES (3.9%)
Polygram............................................................ NETH 7,000 325,516 2.2
Recreation
Viscofan Industria Navarra de
Envolturas Celulosicas S.A......................................... SPN 12,000 182,440 1.2
Food
Parmalat Finanziaria S.P.A.......................................... ITLY 65,000 68,189 0.5
Food
----------
576,145
----------
MULTI-INDUSTRY/MISC. (3.7%)
Hanson PLC.......................................................... UK 83,000 300,235 2.0
Conglomerate
Fitzwilton PLC...................................................... IRL 250,000 156,592 1.0
Conglomerate
Wassall PLC......................................................... UK 25,000 111,181 0.7
Conglomerate
----------
568,008
----------
HEALTH CARE (3.4%)
Sulzer AG (Registered).............................................. SWTZ 200 138,479 0.9
Medical Technology & Supplies
Zeneca Group PLC.................................................... UK 10,000 137,567 0.9
Pharmaceuticals
Astra AB-A Free..................................................... SWDN 5,000 129,253 0.9
Pharmaceuticals
Bayer AG............................................................ GER 450 105,476 0.7
Pharmaceuticals
----------
510,775
---------- ----
Total Equity Investments (cost $12,993,102) 12,991,864 86.5
---------- ----
</TABLE>

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

F-37
<PAGE> 173

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE EUROPE FUND

<TABLE>
<CAPTION>
% OF NET
EQUITY INVESTMENTS COUNTRY SHARES MARKET VALUE ASSETS (A)
- ------------------ ------- ------ ------------ ----------
<S> <C> <C> <C> <C>
Parmalat Finanziaria expires 7/16/99 (b)............................ ITLY 4,000 $3,156 --
Food
Burgo (Cartiere) S.P.A. expires 12/31/95 (b)........................ ITLY 13,798 2,197 --
Forest Products
Baloise Holding Ltd. expires 8/30/95 (b)............................ SWTZ 100 879 --
Insurance-Multi-Line
Interdiscount Holding expires 11/15/96 (b).......................... SWTZ 500 726 --
Retailers-Other
Swiss Reinsurance Co. "B" expires 6/30/95 (b)...................... SWTZ 1 12 --
Insurance-Multi-Line
----------- ----
Total Warrants (cost $0)............................................... 6,970 --
----------- ----

SHORT-TERM INVESTMENTS

REPURCHASE AGREEMENT (7.9%)
Dated December 30, 1994, with State Street Bank
and Trust Company due January 3, 1995, for an
effective yield of 5.25% collateralized by
$865,000 U.S. Treasury Bond, 12% due 08/15/13
(Market value $1,191,279 including accrued
interest)(cost $1,186,346)......................................... 1,186,346 7.9
----------- ----
Total Investments (cost $14,179,448)*.................................. 14,185,180 94.4
Other Assets and Liabilities........................................... 835,307 5.6
----------- ----
Net Assets............................................................. $15,020,487 100.0
=========== =====
</TABLE>

(a) Percentages indicated are based on net assets of $15,020,487.
(b) Non-income producing security.
(c) U.S. currency denominated.
* For Federal income tax purposes, cost is $14,179,448 and appreciation
(depreciation) of securities is as follows:

Unrealized appreciation: $ 999,102
Unrealized depreciation: (993,370)
---------
Net unrealized appreciation: $ 5,732
=========

================================================================================

The Fund's Portfolio of Investments at December 31, 1994 was concentrated in the
following countries:

<TABLE>
<CAPTION>
PERCENTAGE OF NET ASSETS (A)
-------------------------------------------------
RIGHTS & SHORT-TERM
COUNTRY EQUITY WARRANTS & OTHER TOTAL
------- ------ -------- ---------- -----
<S> <C> <C> <C>
Finland........................ 5.5 5.5
France......................... 9.3 9.3
Germany........................ 10.6 10.6
Ireland........................ 1.0 1.0
Italy.......................... 9.8 0.0 9.8
Netherlands.................... 4.4 4.4
Spain.......................... 3.7 3.7
Sweden......................... 9.0 9.0
Switzerland.................... 5.3 0.0 5.3
United Kingdom................. 27.9 27.9
United States.................. 13.5 13.5
---- --- ---- -----
Total.......................... 86.5 0.0 13.5 100.0
==== === ==== =====
</TABLE>

(a) Percentages indicated are based on net assets of $15,020,487.

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

F-38
<PAGE> 174

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE EUROPE FUND

FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
DECEMBER 31, 1994

<TABLE>
<CAPTION>
Unrealized
Market Value Contract Delivery Appreciation
(U.S. Dollars) Price Date (Depreciation)
-------------- -------- --------- --------------
<S> <C> <C> <C> <C>
CONTRACTS TO SELL:
Deutsche Marks 1,925,811 1.49493 03-Feb-95 $ 67,590
French Francs 1,620,366 5.12720 03-Feb-95 66,715
--------- --------
Total Contracts to Sell (Receivable amount $3,680,482) 3,546,177 134,305
--------- --------
The Value of Contracts to Sell as a Percentage of Net Assets is 23.6%.

CONTRACTS TO BUY:
Deutsche Marks 924,131 1.53030 03-Feb-95 (10,327)
French Francs 820,486 5.26400 03-Feb-95 (11,580)
--------- --------
Total Contracts to Buy (Payable amount $1,766,524) 1,744,617 (21,907)

The Value of Contracts to Buy as a Percentage of Net Assets is 11.6%.
Total Open Forward Foreign Currency Contracts, Net $112,398
========
</TABLE>

See Note 1 of the financial statements.

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

F-39

<PAGE> 175

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: MONEY MARKET FUND

PORTFOLIO OF INVESTMENTS

DECEMBER 31, 1994

<TABLE>
<CAPTION>
MATURITY PRINCIPAL % OF NET
SHORT-TERM INVESTMENTS YIELD DATE AMOUNT MARKET VALUE ASSETS (A)
- ---------------------- ----- --------- --------- ------------ ----------
<S> <C> <C> <C> <C> <C>
COMMERCIAL PAPER-DISCOUNTED (68.7%)
Pitney Bowes Inc................................................ 5.320% 03-Jan-95 $ 500,000 $ 499,852 2.6
Banc One Corp................................................... 5.480% 03-Jan-95 600,000 599,817 3.1
Toronto Dominion Holdings....................................... 5.200% 05-Jan-95 500,000 499,711 2.5
Dupont & Company................................................ 5.640% 05-Jan-95 600,000 599,624 3.1
AT&T Corp....................................................... 5.900% 05-Jan-95 100,000 99,934 0.5
Shell Oil Co.................................................... 5.600% 06-Jan-95 600,000 599,533 3.1
Bellsouth Capital Funding Corp.................................. 6.000% 06-Jan-95 600,000 599,500 3.1
Ameritech Corp.................................................. 5.850% 09-Jan-95 700,000 699,090 3.6
Ford Motor Credit Co............................................ 6.000% 09-Jan-95 600,000 599,200 3.1
Atlantic Richfield Co........................................... 5.400% 11-Jan-95 600,000 599,100 3.1
AIG Funding Inc................................................. 5.950% 11-Jan-95 700,000 698,843 3.6
Banc One Corp................................................... 5.970% 17-Jan-95 250,000 249,337 1.3
Bank of Nova Scotia............................................. 5.300% 17-Jan-95 500,000 498,822 2.6
Proctor & Gamble Co............................................. 5.850% 17-Jan-95 160,000 159,584 0.8
Proctor & Gamble Co............................................. 5.900% 19-Jan-95 600,000 598,230 3.1
Emerson Electric Co............................................. 5.850% 20-Jan-95 100,000 99,691 0.5
General Electric Capital Corp................................... 5.950% 20-Jan-95 500,000 498,430 2.5
Motorola Inc.................................................... 5.900% 23-Jan-95 700,000 697,476 3.6
Metlife Funding Inc............................................. 5.900% 26-Jan-95 600,000 597,542 3.1
Emerson Electric Co............................................. 5.900% 01-Feb-95 700,000 696,444 3.6
Philip Morris Companies Inc..................................... 5.850% 01-Feb-95 750,000 746,222 3.8
Hanson Finance.................................................. 5.630% 02-Feb-95 600,000 596,997 3.0
AT&T Corp....................................................... 5.830% 13-Feb-95 700,000 695,126 3.6
Pitney Bowes Inc................................................ 5.950% 13-Feb-95 265,000 263,117 1.3
General Electric Capital Corp................................... 5.870% 14-Feb-95 200,000 198,565 1.0
Dresdner U.S. Finance Inc....................................... 6.080% 21-Feb-95 700,000 693,971 3.5
----------- -----
Total Discounted Commercial Paper (amortized cost $13,383,758)..... 13,383,758 68.7
----------- -----

TREASURY BILLS (5.1%)
United States Treasury Bill..................................... 4.650% 09-Feb-95 1,000,000 994,962 5.1
----------- -----
Total Treasury Bills (amortized cost $994,962)..................... 994,962 5.1
----------- -----

CORPORATE BONDS (3.8%)
Toyota Motor Credit Corp........................................ 5.750% 15-Jun-95 750,000 746,684 3.8
----------- -----
Total Corporate Bonds (amortized cost $746,684).................... 746,684 3.8
----------- -----

MEDIUM TERM NOTES-FLOATING RATE (2.6%)
PHH Corp........................................................ 5.840% 19-Oct-95 500,000 500,000 2.6
----------- -----
Total Medium Term Notes (amortized cost $500,000).................. 500,000 2.6
----------- -----

REPURCHASE AGREEMENT (20.1%)
Dated December 30, 1994, with State Street Bank & Trust
Company, due January 3, 1995, for an effective yield of 5.25%
collateralized by $3,920,000 Federal Home Loan Mortgage
Corporation Notes, 7.3379% due 1/15/99. (Market value
$3,914,570, including accrued interest)(cost $3,908,140)....... 3,908,140 20.1
----------- -----
Total Short Term Investments (cost $19,533,544)*................... 19,533,544 100.3
Other Assets and Liabilities....................................... (59,822) (0.3)
----------- -----
Net Assets......................................................... $19,473,722 100.0
=========== =====
</TABLE>

(a) Percentages indicated are based on net assets of $19,473,722.
* For Federal income tax purposes, cost is $19,533,544.

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

F-40

<PAGE> 176

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE INTERNATIONAL FUND

PORTFOLIO OF INVESTMENTS

DECEMBER 31, 1994

<TABLE>
<CAPTION>
% OF NET
EQUITY INVESTMENTS COUNTRY SHARES MARKET VALUE ASSETS (A)
- ------------------ ------- ------ ------------ ----------
<S> <C> <C> <C> <C>
MATERIALS/BASIC INDUSTRY (19.3%)
Carter Holt Harvey Limited.......................................... NZ 30,000 $ 61,466 2.8
Forest Products
European Vinyls Corp. Intl. NV(c)................................... NETH 1,100 48,744 2.2
Misc. Materials & Commodities
Western Mining Corporation Holdings Limited......................... AUSL 8,000 46,416 2.1
Metals-Non-Ferrous
Inco Ltd. (b)....................................................... CAN 1,600 45,800 2.1
Metals-Non-Ferrous
TPI Polene Company Ltd. (Foreign) (c)............................... THAI 5,000 44,630 2.0
Chemicals
Hoechst AG.......................................................... GER 200 43,520 2.0
Chemicals
Outokumpu OY "A" (c)................................................ FIN 2,000 36,775 1.6
Metals-Non-Ferrous
British Steel PLC................................................... UK 11,000 26,527 1.2
Metals-Steel
NTS Steel Groups Co. Ltd. (Foreign)................................. THAI 12,000 26,300 1.2
Metals-Steel
Montedison S.P.A. (c)............................................... ITLY 30,000 22,641 1.0
Chemicals
Ttolmex S.A. de C.V. Series B2...................................... MEX 1,500 12,990 0.6
Building Materials & Components
Compania Siderurgica Nacional - CSN 144A ADR (b)(c)(d).............. BRZL 300 10,219 0.5
Metals-Steel
--------
426,028
--------
CONSUMER DURABLES (15.1%)
Merloni Elettrodomestici S.P.A...................................... ITLY 14,000 53,564 2.4
Appliances & Household Durables
Edaran Otomobil Nasional Bhd........................................ MAL 7,000 53,213 2.4
Automobiles
Suzuki Motor Co. Ltd................................................ JPN 4,000 47,012 2.1
Automobiles
Hyundai Motor Co. 144A GDR (b)(c)(d)................................ KOR 1,700 31,875 1.4
Automobiles
Lucas Industries PLC................................................ UK 8,900 28,710 1.3
Auto Parts
PSA Peugeot Citroen S.A. (c)........................................ FR 200 27,418 1.2
Automobiles
Samsung Electronics Co. 144A GDR (b)(c)(d).......................... KOR 500 25,000 1.1
Consumer Electronics
Electrolux AB-B Free (c)............................................ SWDN 380 19,288 0.9
Appliances & Household Durables
Volvo AB-B Free..................................................... SWDN 950 17,907 0.8
Automobiles
Futuris Corporation Ltd............................................. AUSL 19,566 16,846 0.8
Auto Parts
Bridgestone Corp.................................................... JPN 1,000 15,671 0.7
Auto Parts
--------
336,504
--------
</TABLE>

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

F-41

<PAGE> 177

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE INTERNATIONAL FUND

<TABLE>
<CAPTION>
% OF NET
EQUITY INVESTMENTS COUNTRY SHARES MARKET VALUE ASSETS (A)
- ------------------ ------- ------ ------------ ----------
<S> <C> <C> <C> <C>
SERVICES (13.6%)
Marco Polo Developments Ltd......................................... SING 40,000 $ 57,143 2.6
Leisure & Tourism
British Airport Authority PLC....................................... UK 7,000 51,848 2.3
Transportation-Airlines
MacIntosh N.V....................................................... NETH 2,000 51,285 2.3
Retailers-Other
Shimachu............................................................ JPN 1,000 36,062 1.6
Retailers-Other
Mitsui O.S.K. Lines Ltd.(c)......................................... JPN 9,000 34,174 1.5
Transportation-Shipping
Compass Group PLC................................................... UK 6,000 31,663 1.4
Restaurants
Telecomunicacoes Brasileiras S.A. - Telebras Sponsored ADR (b)...... BRZL 409 18,302 0.8
Telephone Networks
Telecom Italia Di Risp.............................................. ITLY 7,900 15,771 0.7
Telephone Networks
Aoyama Trading...................................................... JPN 400 9,121 0.4
Retailers-Apparel
--------
305,369
--------
FINANCE (10.1%)
Ayala Land, Inc. "B"................................................ PHIL 29,000 45,537 2.0
Real Estate
Bangkok Bank Public Co. Ltd.(Foreign)............................... THAI 4,000 42,718 2.0
Banks-Money Center
Anglo-Irish Bank Corporation PLC.................................... IRL 43,000 36,361 1.6
Banks-Money Center
Kim Eng Holdings (c)................................................ SING 24,000 25,055 1.1
Securities Broker
Barclays PLC........................................................ UK 2,200 21,049 0.9
Banks-Money Center
Banco de Santander S.A.............................................. SPN 460 17,624 0.8
Banks-Regional
S.G. Warburg Group PLC.............................................. UK 1,600 17,338 0.8
Other Financial
Grupo Financiero Banamex Accival, S.A. de C.V. "C".................. MEX 4,500 13,639 0.6
Banks-Regional
Cetelem Group....................................................... FR 40 7,154 0.3
Consumer Finance
--------
226,475
--------
ENERGY (7.4%)
Norsk Hydro AS ADR (b).............................................. NOR 1,200 46,950 2.1
Electrical & Gas Utilities
British Petroleum Company PLC....................................... UK 7,000 46,641 2.1
Oil
BBC Brown Boveri AG (Bearer)........................................ SWTZ 50 43,065 1.9
Energy Equipment & Services
Oil Search Ltd. (c)................................................. AUSL 40,000 28,855 1.3
Oil
--------
165,511
--------
CONSUMER NON-DURABLES (7.1%)
Hoya Corp........................................................... JPN 2,000 53,440 2.4
Other Consumer Goods
Polygram............................................................ NETH 1,000 46,502 2.1
Recreation
Reliance Industries Ltd. 144A GDR (b)(c)(d)......................... IND 1,800 35,100 1.6
Textiles & Apparel
</TABLE>

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

F-42
<PAGE> 178

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE INTERNATIONAL FUND

<TABLE>
<CAPTION>
% OF NET
EQUITY INVESTMENTS COUNTRY SHARES MARKET VALUE ASSETS (A)
- ------------------ ------- ------ ------------ ----------
<S> <C> <C> <C> <C>
Viscofan Industria Navarra de Envolturas Celulosicas S.A............ SPN 1,400 $ 21,285 1.0
Food
----------
156,327
----------
CAPITAL GOODS (6.9%)
Alcatel Alsthom..................................................... FR 500 42,701 1.9
Telecom Equipment
Bilfinger & Berger Bau AG........................................... GER 70 35,707 1.6
Machinery & Engineering
Costain Group PLC (c)............................................... UK 100,000 33,667 1.5
Construction
Allgon AB-B Free.................................................... SWDN 1,300 24,504 1.1
Telecom Equipment
Canon Inc........................................................... JPN 1,000 16,976 0.8
Office Equipment
----------
153,555
----------
TECHNOLOGY (4.3%)
Kyocera Corporation................................................. JPN 1,000 74,234 3.3
Semiconductors
Hosiden Electronics................................................. JPN 1,000 21,497 1.0
Computers & Peripherals
----------
95,731
----------
CONGLOMERATE (3.8%)
Valmet Corporation "A" (c).......................................... FIN 1,800 34,277 1.5
Conglomerate
Wassall PLC......................................................... UK 4,200 18,678 0.8
Conglomerate
BTR PLC............................................................. UK 4,000 18,415 0.8
Conglomerate
Grupo Carso, S.A. de C.V. "A1" (c).................................. MEX 2,000 15,052 0.7
Conglomerate
----------
86,422
---------- -----
Total Equity Investments (cost $2,088,832) 1,951,922 87.6
---------- -----

SHORT-TERM INVESTMENTS
REPURCHASE AGREEMENT (10.9%)
Dated December 30, 1994, with State Street Bank and Trust
Company, due January 3, 1995, for an effective yield of
5.25% collateralized by $180,000 U.S. Treasury Bond,
12.0% due 08/15/13. (Market value $247,896 including
accrued interest.)(Cost $243,071).................................. 243,071 10.9
---------- -----
Total Investments (cost $2,331,903)*................................... 2,194,993 98.5
Other Assets and Liabilities........................................... 33,927 1.5
---------- -----
Net Assets............................................................. $2,228,920 100.0
========== =====
</TABLE>

(a) Percentages indicated are based on net assets of $2,228,920.
(b) U.S. currency denominated.
(c) Non-income producing security.
(d) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.

Abbreviations:
ADR - American Depository Receipt
GDR - Global Depository Receipt
* For Federal income tax purposes, cost is $2,335,259 and appreciation
(depreciation) of securities is as follows:

Unrealized appreciation: $ 32,495
Unrealized depreciation: (172,761)
Net unrealized depreciation: $(140,266)

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

F-43
<PAGE> 179
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE INTERNATIONAL FUND

The Fund's Portfolio of Investments at December 31, 1994 was concentrated in the
following countries:

<TABLE>
<CAPTION>
PERCENTAGE OF NET ASSETS (A)
-------------------------------
SHORT-TERM
COUNTRY EQUITY & OTHER TOTAL
------- ------ ---------- -----
<S> <C> <C> <C>
Australia................. 4.2 4.2
Brazil.................... 1.3 1.3
Canada.................... 2.1 2.1
Finland................... 3.1 3.1
France.................... 3.4 3.4
Germany................... 3.6 3.6
India..................... 1.6 1.6
Ireland................... 1.6 1.6
Italy..................... 4.1 4.1
Japan..................... 13.8 13.8
Korea..................... 2.5 2.5
Malaysia.................. 2.4 2.4
Mexico.................... 1.9 1.9
Netherlands............... 6.6 6.6
Norway.................... 2.1 2.1
New Zealand............... 2.8 2.8
Philippines............... 2.0 2.0
Singapore................. 3.7 3.7
Spain..................... 1.8 1.8
Sweden.................... 2.8 2.8
Switzerland............... 1.9 1.9
Thailand.................. 5.2 5.2
United Kingdom............ 13.1 13.1
United States............. 12.4 12.4
---- ---- -----
Total..................... 87.6 12.4 100.0
==== ==== =====
</TABLE>

- ----------------
(a) Percentages indicated are based on net assets of $2,228,920.

FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
DECEMBER 31, 1994

Deutsche Marks...................................................... 77,549 1.49493 03-Feb-95 $2,722
Deutsche Marks...................................................... 38,775 1.56900 03-Feb-95 (534)
French Francs....................................................... 78,677 5.12720 03-Feb-95 3,239
Japanese Yen........................................................ 54,493 96.15999 10-Feb-95 1,664
------- ------
Total Contracts to Sell (Receivable amount $256,585)................ 249,494 7,091
------- -----
The Value of Contracts to Sell as a Percentage of Net Assets is 11.2%.

CONTRACTS TO BUY:

Deutsche Marks...................................................... 38,775 1.53030 03-Feb-95 (433)
French Francs....................................................... 37,465 5.26400 03-Feb-95 (529)
------- ------
Total Contracts to Buy (Payable amount $77,202)..................... 76,240 (962)
------- ------
The Value of Contracts to Buy as a Percentage of Net Assets is 3.4%.
Total Open Forward Foreign Currency Contracts, Net........................................................ $6,129
------
</TABLE>

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

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

F-44
<PAGE> 180
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

STATEMENTS OF ASSETS
AND LIABILITIES

DECEMBER 31, 1994

================================================================================

<TABLE>
<CAPTION>
G.T. GLOBAL:
-----------------------------------------------------------------
VARIABLE VARIABLE GLOBAL VARIABLE U.S. VARIABLE
STRATEGIC GOVERNMENT GOVERNMENT LATIN AMERICA
INCOME FUND INCOME FUND INCOME FUND FUND
----------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Assets:
Investments in securities: (Note 1)
At identified cost......................................... $21,275,492 $ 8,660,119 $2,717,912 $24,529,226
=========== =========== ========== ===========
At value................................................... $19,815,294 $ 8,546,059 $2,610,010 $23,480,078
Repurchase Agreement, at value and cost (Note 1)........... 2,287,667 784,229 511,149 2,960,863
Cash and foreign currency.................................. 30,989 53,103 660 443,496
Receivable for Fund shares sold............................ 407,056 -- -- 9,531,788
Receivable for securities sold............................. 527,859 871,894 -- 4,709
Receivable for forward foreign currency contracts --
closed (Note 1).......................................... 125,004 -- -- --
Receivable for open forward foreign currency contracts,
net (Note 1)............................................. -- 8,124 -- --
Dividends and dividend tax reclaims receivable............. -- -- -- 89,522
Interest and interest tax reclaims receivable.............. 641,714 318,831 36,797 --
Reimbursement from G.T. Capital Management, Inc. (Note 2).. 51,403 29,009 24,638 69,752
Unamortized deferred organizational expenses (Note 1)...... 19,527 19,527 19,527 19,527
Cash held as collateral for securities loaned (Note 1)..... -- -- -- 88,500
----------- ----------- ---------- -----------
Total assets............................................... 23,906,513 10,630,776 3,202,781 36,688,235
----------- ----------- ---------- -----------

Liabilities:
Payable for Fund shares repurchased........................ 210,795 1,254 161,346 720,780
Payable for securities purchased........................... 239,737 934,460 578,858 9,184,737
Payable for deferred organizational expenses (Note 1)...... 31,333 31,333 31,333 31,333
Payable for investment management and administration fees
(Note 2)................................................ 25,991 -- 15,872 29,943
Payable for forward foreign currency contracts-- closed
(Note 1)................................................ -- 1,797 -- --
Payable for open forward foreign currency contracts, net
(Note 1)................................................ 26,178 -- -- --
Distribution payable (Note 1).............................. -- -- -- --
Accrued expenses........................................... 5,063 8,329 627 1,606
Collateral for securities loaned (Note 1).................. -- -- -- 88,500
----------- ----------- ---------- -----------
Total liabilities.......................................... 539,097 977,173 788,036 10,056,899
----------- ----------- ---------- -----------
Net assets.................................................... $23,367,416 $ 9,653,603 $2,414,745 $26,631,336
=========== =========== ========== ===========

Net assets consist of:
Paid in capital (Note 4)................................... $28,463,511 $10,933,299 $2,595,187 $24,786,208
Accumulated net investment income (loss)................... -- -- -- 167,406
Accumulated net realized gain (loss) on investments,
options, and foreign currency transactions.............. (3,617,550) (1,169,229) (72,540) 2,726,005
Net unrealized appreciation (depreciation) of dividends and
dividend withholding tax reclaims receivable, interest
and interest withholding tax reclaims receivable,
securities purchased and sold and foreign currency
transactions............................................. (18,347) 3,593 -- 865
Net unrealized appreciation (depreciation) of investments
and options.............................................. (1,460,198) (114,060) (107,902) (1,049,148)
----------- ----------- ---------- -----------
Total -- representing net assets applicable to capital
shares outstanding...................................... $23,367,416 $ 9,653,603 $2,414,745 $26,631,336
=========== =========== ========== ===========
Shares outstanding............................................ 2,158,894 907,727 223,831 1,389,344
=========== =========== ========== ===========
Net asset value per share..................................... $ 10.82 $ 10.63 $ 10.79 $ 19.17
=========== =========== ========== ===========
</TABLE>

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

F-45
<PAGE> 181
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

STATEMENTS OF ASSETS
AND LIABILITIES

DECEMBER 31, 1994

================================================================================

<TABLE>
<CAPTION>
G.T. GLOBAL:
------------------------------------------------------------------
VARIABLE VARIABLE TELE- VARIABLE VARIABLE
GROWTH & COMMUNICATIONS EMERGING AMERICA
INCOME FUND FUND MARKETS FUND FUND
----------- -------------- ------------ -----------
<S> <C> <C> <C> <C>
Assets:
Investments in securities: (Note 1)
At identified cost......................................... $22,070,287 $32,543,536 $6,325,694 $12,337,600
=========== =========== ========== ===========
At value................................................... $21,605,265 $34,289,920 $5,804,441 $12,819,296
Repurchase Agreement, at value and cost (Note 1)........... 3,589,047 3,299,962 1,577,460 3,073,896
Cash and foreign currency.................................. 54,195 228,327 2,778 904
Receivable for Fund shares sold............................ 35,689 1,693,540 532,591 90,399
Receivable for securities sold............................. -- 5,787,681 152,000 2,222,166
Receivable for forward foreign currency contracts --
closed (Note 1).......................................... 244 104 -- --
Receivable for open forward foreign currency contracts,
net (Note 1)............................................. 23,525 30,634 -- --
Dividends and dividend tax reclaims receivable............. 70,464 42,281 7,354 44,294
Interest and interest tax reclaims receivable.............. 258,677 -- -- --
Reimbursement from G.T. Capital Management, Inc. (Note 2).. 47,648 32,652 21,465 42,840
Unamortized deferred organizational expenses (Note 1)...... 19,527 23,817 -- 19,527
Cash held as collateral for securities loaned (Note 1)..... 692,839 4,297,200 -- --
----------- ----------- ---------- -----------
Total assets............................................... 26,397,120 49,726,118 8,098,089 18,313,322
----------- ----------- ---------- -----------

Liabilities:
Payable for Fund shares repurchased........................ 51,234 1,586,199 563,611 79,356
Payable for securities purchased........................... 8,625 7,746,763 252,593 2,917,432
Payable for deferred organizational expenses (Note 1)...... 31,333 31,333 -- 31,333
Payable for investment management and administration fees
(Note 2)................................................ 32,851 -- 15,260 25,059
Payable for forward foreign currency contracts-- closed
(Note 1)................................................ -- -- -- --
Payable for open forward foreign currency contracts, net
(Note 1)................................................ -- -- -- --
Distribution payable (Note 1).............................. -- -- -- --
Accrued expenses........................................... -- 36,096 -- 2,876
Collateral for securities loaned (Note 1).................. 692,839 4,297,200 -- --
----------- ----------- ---------- -----------
Total liabilities.......................................... 816,882 13,697,591 831,464 3,056,056
----------- ----------- ---------- -----------
Net assets.................................................... $25,580,238 $36,028,527 $7,266,625 $15,257,266
=========== =========== ========== ===========

Net assets consist of:
Paid in capital (Note 4)................................... $26,206,655 $33,265,717 $7,868,021 $14,190,475
Accumulated net investment income (loss)................... 87,189 73,358 -- 126,208
Accumulated net realized gain (loss) on investments,
options, and foreign currency transactions.............. (275,236) 913,276 (79,949) 458,887
Net unrealized appreciation (depreciation) of dividends and
dividend withholding tax reclaims receivable, interest
and interest withholding tax reclaims receivable,
securities purchased and sold and foreign currency
transactions............................................. 26,652 29,792 (194) --
Net unrealized appreciation (depreciation) of investments
and options.............................................. (465,022) 1,746,384 (521,253) 481,696
----------- ----------- ---------- -----------
Total -- representing net assets applicable to capital
shares outstanding...................................... $25,580,238 $36,028,527 $7,266,625 $15,257,266
=========== =========== ========== ===========
Shares outstanding............................................ 1,969,940 2,576,382 611,354 965,210
=========== =========== ========== ===========
Net asset value per share..................................... $ 12.99 $ 13.98 $ 11.89 $ 15.81
=========== =========== ========== ===========
</TABLE>

<TABLE>
<CAPTION>
G.T. GLOBAL:
-------------------------------------------------------------
VARIABLE VARIABLE MONEY VARIABLE
NEW PACIFIC EUROPE MARKET INTERNATIONAL
FUND FUND FUND FUND
----------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Assets:
Investments in securities: (Note 1)
At identified cost......................................... $18,165,616 $12,993,102 $15,625,404 $2,088,832
=========== =========== =========== ==========
At value................................................... $17,387,922 $12,998,834 $15,625,404 $1,951,922
Repurchase Agreement, at value and cost (Note 1)........... 1,895,553 1,186,346 3,908,140 243,071
Cash and foreign currency.................................. 84,186 772,614 899 51,956
Receivable for Fund shares sold............................ 53,929 303,744 949,722 47,293
Receivable for securities sold............................. -- -- -- --
Receivable for forward foreign currency contracts --
closed (Note 1).......................................... -- 470 -- 35
Receivable for open forward foreign currency contracts,
net (Note 1)............................................. -- 112,398 -- 6,129
Dividends and dividend tax reclaims receivable............. 34,067 72,717 -- 2,492
Interest and interest tax reclaims receivable.............. 1,342 -- 7,642 144
Reimbursement from G.T. Capital Management, Inc. (Note 2).. 44,112 33,591 27,314 5,903
Unamortized deferred organizational expenses (Note 1)...... 19,527 19,527 19,527 --
Cash held as collateral for securities loaned (Note 1)..... 975,750 804,910 -- --
----------- ----------- ----------- ----------
Total assets............................................... 20,496,388 16,305,151 20,538,648 2,308,945
----------- ----------- ----------- ----------

Liabilities:
Payable for Fund shares repurchased........................ 70,613 429,390 947,287 25,569
Payable for securities purchased........................... -- -- -- 48,807
Payable for deferred organizational expenses (Note 1)...... 31,333 31,333 31,333 --
Payable for investment management and administration fees
(Note 2)................................................ 24,069 15,878 9,810 5,239
Payable for forward foreign currency contracts-- closed
(Note 1)................................................ -- -- -- --
Payable for open forward foreign currency contracts, net
(Note 1)................................................ -- -- -- --
Distribution payable (Note 1).............................. -- -- 72,799 --
Accrued expenses........................................... 3,392 3,153 3,697 410
Collateral for securities loaned (Note 1).................. 975,750 804,910 -- --
----------- ----------- ----------- ----------
Total liabilities.......................................... 1,105,157 1,284,664 1,064,926 80,025
----------- ----------- ----------- ----------
Net assets.................................................... $19,391,231 $15,020,487 $19,473,722 $2,228,920
=========== =========== =========== ==========

Net assets consist of:
Paid in capital (Note 4)................................... $20,522,348 $14,925,785 $19,473,722 $2,365,410
Accumulated net investment income (loss)................... 75,297 153,696 -- 1,440
Accumulated net realized gain (loss) on investments,
options, and foreign currency transactions.............. (428,066) (182,134) -- (7,154)
Net unrealized appreciation (depreciation) of dividends and
dividend withholding tax reclaims receivable, interest
and interest withholding tax reclaims receivable,
securities purchased and sold and foreign currency
transactions............................................. (654) 117,408 -- 6,134
Net unrealized appreciation (depreciation) of investments
and options.............................................. (777,694) 5,732 -- (136,910)
----------- ----------- ----------- ----------
Total -- representing net assets applicable to capital
shares outstanding...................................... $19,391,231 $15,020,487 $19,473,722 $2,228,920
=========== =========== =========== ==========
Shares outstanding............................................ 1,384,187 986,966 19,473,722 198,172
=========== =========== =========== ==========
Net asset value per share..................................... $ 14.01 $ 15.22 $ 1.00 $ 11.25
=========== =========== =========== ==========
</TABLE>

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

F-46
<PAGE> 182
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

STATEMENTS OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 1994

Expenses:
Investment management and administration fees (Note 2).. 174,302 69,318 12,663 203,425
Custodian fees (Note 1)................................. 28,330 21,532 831 57,050
Printing and postage expenses........................... 30,113 30,182 30,139 29,059
Professional fees....................................... 20,728 20,728 20,737 20,359
Registration fees....................................... 2,848 2,848 2,848 1,545
Trustees' fee and expenses (Note 2)..................... 2,493 2,493 2,493 2,493
Other expenses.......................................... 2,198 2,164 2,124 1,984
Amortization of organizational expenses (Note 1)........ 6,263 6,263 6,263 6,263
----------- ----------- --------- -----------
Total expenses.......................................... 267,275 155,528 78,098 322,178
----------- ----------- --------- -----------

Expenses reimbursed by G.T. Capital
Management, Inc. (Note 2)............................. (34,872) (63,070) (71,619) (63,441)
Other expense reductions (Notes 1 & 5).................. -- -- -- (4,456)
----------- ----------- --------- -----------
Total net expenses after reimbursement and reductions... 232,403 92,458 6,479 254,281
----------- ----------- --------- -----------
Net investment income...................................... 1,761,766 636,934 93,354 167,407
----------- ----------- --------- -----------

Net realized and unrealized gain (loss) on investments,
options and foreign currencies (Note 1):
Net realized gain (loss) on investments and options........ (3,345,918) (660,871) (71,665) 2,682,363
Net realized gain (loss) on foreign currency transactions.. (515,086) (626,861) -- 43,643
----------- ----------- --------- -----------
Net realized gain (loss) during the period................. (3,861,004) (1,287,732) (71,665) 2,726,006
----------- ----------- --------- -----------
Net change in unrealized appreciation (depreciation) of
dividends and dividend withholding tax reclaims
receivable, interest and interest withholding tax
reclaims receivable, securities purchased and sold, and
foreign currency transactions........................... (72,024) (15,202) (101,640) (1,004)
Net change in unrealized appreciation (depreciation)
of investments and options.............................. (1,980,697) (103,152) -- (2,572,849)
----------- ----------- --------- -----------

Net unrealized appreciation (depreciation) during the
period.................................................. (2,052,721) (118,354) (101,640) (2,573,853)
----------- ----------- --------- -----------
Net realized and unrealized gain (loss) on investments,
options and foreign currencies.......................... (5,913,725) (1,406,086) (173,305) 152,153
----------- ----------- --------- -----------
Net increase (decrease) in net assets resulting from
operations.............................................. $(4,151,959) $ (769,152) $ (79,951) $ 319,560
=========== =========== ========= ===========
* Net of foreign withholding taxes of..................... 1,225 -- -- 29,182
</TABLE>

** The Variable International and Variable Emerging Markets Funds did not
commence operations until July 5, 1994.

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

F-47
<PAGE> 183
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

STATEMENTS OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 1994

Expenses:
Investment management and administration fees (Note 2).. 210,934 239,566 20,347 51,664
Custodian fees (Note 1)................................. 38,955 53,962 6,205 24,432
Printing and postage expenses........................... 30,113 30,113 14,355 32,625
Professional fees....................................... 19,853 19,535 1,831 19,978
Registration fees....................................... 2,848 2,848 -- 1,555
Trustees' fee and expenses (Note 2)..................... 2,493 1,937 -- 2,493
Other expenses.......................................... 2,201 2,146 -- 1,877
Amortization of organizational expenses (Note 1)........ 6,263 6,263 -- 6,263
----------- ---------- --------- --------
Total expenses.......................................... 313,660 356,370 42,738 140,887
----------- ---------- --------- --------

Expenses reimbursed by G.T. Capital
Management, Inc. (Note 2)............................. (47,986) (44,272) (42,738) (70,882)
Other expense reductions (Notes 1 & 5).................. (2,007) (12,641) -- (2,813)
----------- ---------- --------- --------
Total net expenses after reimbursement and reductions... 263,667 299,457 -- 67,192
----------- ---------- --------- --------
Net investment income...................................... 778,934 73,852 40,749 126,208
----------- ---------- --------- --------

Net realized and unrealized gain (loss) on investments,
options and foreign currencies (Note 1):
Net realized gain (loss) on investments and options........ (139,512) 943,284 (42,408) 480,878
Net realized gain (loss) on foreign currency transactions.. (171,265) (30,007) (3,439) --
----------- ---------- --------- --------
Net realized gain (loss) during the period................. (310,777) 913,277 (45,847) 480,878
----------- ---------- --------- --------
Net change in unrealized appreciation (depreciation) of
dividends and dividend withholding tax reclaims
receivable, interest and interest withholding tax
reclaims receivable, securities purchased and sold, and
foreign currency transactions........................... (4,932) 29,242 (194) --
Net change in unrealized appreciation (depreciation)
of investments and options.............................. (1,038,064) 1,222,998 (521,253) 365,915
----------- ---------- --------- --------

Net unrealized appreciation (depreciation) during the
period.................................................. (1,042,996) 1,252,240 (521,447) 365,915
----------- ---------- --------- --------
Net realized and unrealized gain (loss) on investments,
options and foreign currencies.......................... (1,353,773) 2,165,517 (567,294) 846,793
----------- ---------- --------- --------
Net increase (decrease) in net assets resulting from
operations.............................................. $ (574,839) $2,239,369 $(526,545) $973,001
=========== ========== ========= ========
* Net of foreign withholding taxes of..................... 48,984 7,488 505 --
</TABLE>

<TABLE>
<CAPTION>
G.T. GLOBAL:
---------------------------------------------------------
VARIABLE VaRIABLE MONEY VARIABLE
NEW PACIFIC EUROPE MARKET INTERNATIONAL
FUND FUND FUND FUND**
----------- --------- -------- -------------
<S> <C> <C> <C> <C>
Investment income (Note 1):
Interest................................................ $ 91,513 $ 61,328 $466,149 $ 7,301
Dividends............................................... 232,914 281,711 -- 6,451
----------- --------- -------- ---------
Total investment income*................................ 324,427 343,039 466,149 13,752
----------- --------- -------- ---------

Expenses:
Investment management and administration fees (Note 2).. 155,724 125,533 52,363 6,985
Custodian fees (Note 1)................................. 28,012 18,463 7,636 2,612
Printing and postage expenses........................... 32,625 32,625 32,625 10,553
Professional fees....................................... 20,228 19,982 20,553 2,366
Registration fees....................................... 1,555 1,555 1,555 --
Trustees' fee and expenses (Note 2)..................... 2,493 2,493 2,493 --
Other expenses.......................................... 2,194 2,167 2,288 --
Amortization of organizational expenses (Note 1)........ 6,263 6,263 6,263 --
----------- --------- -------- ---------
Total expenses.......................................... 249,094 209,081 125,776 22,516
----------- --------- -------- ---------

Expenses reimbursed by G.T. Capital
Management, Inc. (Note 2)............................. (51,141) (49,678) (47,231) (20,158)
Other expense reductions (Notes 1 & 5).................. (3,298) (2,487) -- --
----------- --------- -------- ---------
Total net expenses after reimbursement and reductions... 194,655 156,916 78,545 2,358
----------- --------- -------- ---------
Net investment income...................................... 129,772 186,123 387,604 11,394
----------- --------- -------- ---------

Net realized and unrealized gain (loss) on investments,
options and foreign currencies (Note 1):
Net realized gain (loss) on investments and options........ (414,814) (125,959) -- (3,524)
Net realized gain (loss) on foreign currency transactions.. (26,623) (86,541) -- (3,630)
----------- --------- -------- ---------
Net realized gain (loss) during the period................. (441,437) (212,500) -- (7,154)
----------- --------- -------- ---------
Net change in unrealized appreciation (depreciation) of
dividends and dividend withholding tax reclaims
receivable, interest and interest withholding tax
reclaims receivable, securities purchased and sold, and
foreign currency transactions........................... (28,748) 101,790 -- 6,134
Net change in unrealized appreciation (depreciation)
of investments and options.............................. (1,706,578) (402,308) -- (136,910)
----------- --------- -------- ---------

Net unrealized appreciation (depreciation) during the
period.................................................. (1,735,326) (300,518) -- (130,776)
----------- --------- -------- ---------
Net realized and unrealized gain (loss) on investments,
options and foreign currencies.......................... (2,176,763) (513,018) -- (137,930)
----------- --------- -------- ---------
Net increase (decrease) in net assets resulting from
operations.............................................. $(2,046,991) $(326,895) $387,604 $(126,536)
=========== ========= ======== =========
* Net of foreign withholding taxes of..................... 29,063 50,252 -- 1,398
</TABLE>

** The Variable International and Variable Emerging Markets Funds did not
commence operations until July 5, 1994.

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

F-48
<PAGE> 184
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

STATEMENTS OF CHANGES IN NET ASSETS

FOR THE YEAR ENDED DECEMBER 31, 1994

================================================================================
<TABLE>
<CAPTION>
G.T. GLOBAL:
----------------------------------------------------------------
VARIABLE VaRIABLE GLOBAL VARIABLE U.S. VARIABLE
STRATEGIC GOVERNMENT GOVERNMENT LATIN AMERICA
INCOME FUND INCOME FUND INCOME FUND FUND
------------- --------------- ------------- -------------
<S> <C> <C> <C> <C>
Increase in net assets
Operations:
Net investment income........................................ $ 1,761,766 $ 636,934 $ 93,354 $ 167,407
Net realized gain (loss) on investments, options and
foreign currency transactions.............................. (3,861,004) (1,287,732) (71,665) 2,726,006
Net change in unrealized appreciation (depreciation) of
dividends and dividend withholding tax reclaims
receivable, interest and interest withholding tax
reclaims receivable, securities purchased and sold
and foreign currency transactions.......................... (72,024) (15,202) (101,640) (1,004)
Net change in unrealized appreciation (depreciation) of
investments and options.................................... (1,980,697) (103,152) -- (2,572,849)
------------ ----------- ----------- ------------
Net increase(decrease) in net assets resulting from
operations................................................. (4,151,959) (769,152) (79,951) 319,560
------------ ----------- ----------- ------------
Distributions to shareholders from: (Note 1)
Net investment income........................................ (1,533,744) (604,061) (94,526) (33,315)
Net realized gain on investments............................. (877,393) -- (9,966) (58,519)
In excess of net realized gain on investments................ -- -- -- --
Return of capital............................................ (93,845) (69,860) -- --
Capital share transactions: (Note 4)
Increase from capital shares sold and reinvested............. 26,867,913 11,332,658 4,795,207 37,598,809
Decrease from capital shares repurchased..................... (14,932,250) (6,371,492) (3,169,722) (19,435,079)
------------ ----------- ----------- ------------
Net increase from capital share transactions.................... 11,935,663 4,961,166 1,625,485 18,163,730
------------ ----------- ----------- ------------
Total increase (decrease) in net assets......................... 5,278,722 3,518,093 1,441,042 18,391,456
Net assets:
Beginning of period.......................................... 18,088,694 6,135,510 973,703 8,239,880
------------ ----------- ----------- ------------
End of period................................................ $ 23,367,416 $ 9,653,603 $ 2,414,745 $26,631,336
============ =========== =========== ============
</TABLE>

================================================================================

February 10, 1993 (commencement of operations) to December 31, 1993

================================================================================

<TABLE>
<CAPTION>
G.T. GLOBAL:
----------------------------------------------------------------
VARIABLE VARIABLE GLOBAL VARIABLE U.S. VARIABLE
STRATEGIC GOVERNMENT GOVERNMENT LATIN AMERICA
INCOME FUND INCOME FUND INCOME FUND FUND
------------- --------------- ------------- -------------
<S> <C> <C> <C> <C>
Increase in net assets
Operations:
Net investment income........................................ $ 313,063 $ 98,086 $ 25,825 $ 17,610
Net realized gain (loss) on investments, options and
foreign currency transactions.............................. 910,970 79,266 9,966 74,784
Net change in unrealized appreciation (depreciation) of
dividends and dividend witholding tax reclaims
receivable, interest and interest withholding tax
reclaims receivable, securities purchased and sold
and foreign currency transactions.......................... 55,253 (3,388) -- 1,869
Net change in unrealized appreciation (depreciation)
of investments, options and forward foreign currency
contracts.................................................. 518,923 11,275 (6,262) 1,523,701
------------ ----------- ----------- ------------
Net increase in net assets resulting from operations......... 1,798,209 185,239 29,529 1,617,964
------------ ----------- ----------- ------------
Distributions to shareholders from: (Note 1)
Net investment income........................................ (313,063) (92,235) (25,528) --
Sources other than net income................................ (18,144) -- -- --
Capital share transactions: (Note 4)
Increase from capital shares sold and reinvested............. 21,188,093 7,531,834 1,112,505 8,921,929
Decrease from capital shares repurchased..................... (4,586,401) (1,509,328) (162,803) (2,320,013)
------------ ----------- ----------- ------------
Net increase from capital share transactions.................... 16,601,692 6,022,506 949,702 6,601,916
------------ ----------- ----------- ------------
Total increase in net assets.................................... 18,068,694 6,115,510 953,703 8,219,880
Net assets:
Beginning of period.......................................... 20,000 20,000 20,000 20,000
------------ ----------- ----------- ------------
End of period................................................ $ 18,088,694 $ 6,135,510 $ 973,703 $ 8,239,880
============ =========== =========== ============
</TABLE>

* The Variable Telecommunications Fund did not commence operations until
October 18, 1993.

** The Variable International and Variable Emerging Markets Funds did not
commence operations until July 5, 1994.

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

F-49
<PAGE> 185
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

STATEMENTS OF CHANGES IN NET ASSETS

FOR THE YEAR ENDED DECEMBER 31, 1994

================================================================================
<TABLE>
<CAPTION>
G.T. GLOBAL:
-----------------------------------------------------------------
VARIABLE VARIABLE TELE- VARIABLE VARIABLE
GROWTH & COMMUNICATIONS EMERGING AMERICA
INCOME FUND FUND* MARKETS FUND** FUND
----------- -------------- -------------- -----------
<S> <C> <C> <C> <C>
Increase in net assets
Operations:
Net investment income........................................ $ 778,934 $ 73,852 $ 40,749 $ 126,208
Net realized gain (loss) on investments, options and
foreign currency transactions.............................. (310,777) 913,277 (45,847) 480,878
Net change in unrealized appreciation (depreciation) of
dividends and dividend withholding tax reclaims
receivable, interest and interest withholding tax
reclaims receivable, securities purchased and sold
and foreign currency transactions.......................... (4,932) 29,242 (194) --
Net change in unrealized appreciation (depreciation) of
investments and options.................................... (1,038,064) 1,222,998 (521,253) 365,915
----------- ------------ ----------- -----------
Net increase(decrease) in net assets resulting from
operations................................................. (574,839) 2,239,369 (526,545) 973,001
----------- ------------ ----------- -----------
Distributions to shareholders from: (Note 1)
Net investment income........................................ (644,305) (31,627) (40,749) (136,601)
Net realized gain on investments............................. -- -- -- --
In excess of net realized gain on investments................ -- -- (34,465) --
Return of capital............................................ -- -- -- --
Capital share transactions: (Note 4)
Increase from capital shares sold and reinvested............. 21,823,916 36,093,905 11,452,183 21,471,531
Decrease from capital shares repurchased..................... (6,701,077) (10,175,735) (3,583,799) (8,750,561)
----------- ------------ ----------- -----------
Net increase from capital share transactions.................... 15,122,839 25,918,170 7,868,384 12,720,970
----------- ------------ ----------- -----------
Total increase (decrease) in net assets......................... 13,903,695 28,125,912 7,266,625 13,557,370
Net assets:
Beginning of period.......................................... 11,676,543 7,902,615 -- 1,699,896
----------- ------------ ----------- -----------
End of period................................................ $25,580,238 $ 36,028,527 $ 7,266,625 $15,257,266
=========== ============ =========== ===========
</TABLE>

<TABLE>
<CAPTION>
G.T. GLOBAL:
--------------------------------------------------------------
VARIABLE VARIABLE MONEY VARIABLE
NEW PACIFIC EUROPE MARKET INTERNATIONAL
FUND FUND FUND FUND**
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
Increase in net assets
Operations:
Net investment income........................................ $ 129,772 $ 186,123 $ 387,604 $ 11,394
Net realized gain (loss) on investments, options and
foreign currency transactions.............................. (441,437) (212,500) -- (7,154)
Net change in unrealized appreciation (depreciation) of
dividends and dividend withholding tax reclaims
receivable, interest and interest withholding tax
reclaims receivable, securities purchased and sold
and foreign currency transactions.......................... (28,748) 101,790 -- 6,134
Net change in unrealized appreciation (depreciation) of
investments and options.................................... (1,706,578) (402,308) -- (136,910)
------------ ------------ ------------ -----------
Net increase(decrease) in net assets resulting from
operations................................................. (2,046,991) (326,895) 387,604 (126,536)
------------ ------------ ------------ -----------
Distributions to shareholders from: (Note 1)
Net investment income........................................ (51,590) (1,710) (387,604) (9,954)
Net realized gain on investments............................. -- (12,542) -- --
In excess of net realized gain on investments................ -- -- -- --
Return of capital............................................ -- -- -- --
Capital share transactions: (Note 4)
Increase from capital shares sold and reinvested............. 40,348,942 21,078,341 75,875,884 4,426,908
Decrease from capital shares repurchased..................... (26,803,641) (11,126,870) (60,177,597) (2,061,498)
------------ ------------ ------------ -----------
Net increase from capital share transactions.................... 13,545,301 9,951,471 15,698,287 2,365,410
------------ ------------ ------------ -----------
Total increase (decrease) in net assets......................... 11,446,720 9,610,324 15,698,287 2,228,920
Net assets:
Beginning of period.......................................... 7,944,511 5,410,163 3,775,435 --
------------ ------------ ------------ -----------
End of period................................................ $ 19,391,231 $ 15,020,487 $ 19,473,722 $ 2,228,920
============ ============ ============ ===========
</TABLE>

================================================================================

February 10, 1993 (commencement of operations) to December 31, 1993

================================================================================

<TABLE>
<CAPTION>
G.T. GLOBAL:
-----------------------------------------------------------------
VARIABLE VARIABLE TELE- VARIABLE VARIABLE
GROWTH & COMMUNICATIONS EMERGING AMERICA
INCOME FUND FUND* MARKETS FUND** FUND
----------- -------------- -------------- -----------
<S> <C> <C> <C> <C>
Increase in net assets
Operations:
Net investment income........................................ $ 101,690 $ 21,870 $ -- $ 136,956
Net realized gain (loss) on investments, options and
foreign currency transactions.............................. (8,149) 8,906 -- (21,991)
Net change in unrealized appreciation (depreciation) of
dividends and dividend witholding tax reclaims
receivable, interest and interest withholding tax
reclaims receivable, securities purchased and sold
and foreign currency transactions.......................... 14,494 446 -- --
Net change in unrealized appreciation (depreciation)
of investments, options and forward foreign currency
contracts.................................................. 590,132 523,386 -- 115,781
----------- ------------ ----------- -----------
Net increase in net assets resulting from operations......... 698,167 554,608 -- 230,746
----------- ------------ ----------- -----------
Distributions to shareholders from: (Note 1)
Net investment income........................................ (101,690) -- -- --
Sources other than net income................................ (18,009) -- -- --
Capital share transactions: (Note 4)
Increase from capital shares sold and reinvested............. 13,957,675 8,265,911 -- 7,444,411
Decrease from capital shares repurchased..................... (2,879,600) (917,916) -- (6,000,261)
----------- ------------ ----------- -----------
Net increase from capital share transactions.................... 11,078,075 7,347,995 -- 1,444,150
----------- ------------ ----------- -----------
Total increase in net assets.................................... 11,656,543 7,902,603 -- 1,674,896
Net assets:
Beginning of period.......................................... 20,000 12 -- 25,000
----------- ------------ ----------- -----------
End of period................................................ $11,676,543 $ 7,902,615 $ -- $ 1,699,896
=========== ============ =========== ===========
</TABLE>

<TABLE>
<CAPTION>
G.T. GLOBAL:
--------------------------------------------------------------
VARIABLE VARIABLE MONEY VARIABLE
NEW PACIFIC EUROPE MARKET INTERNATIONAL
FUND FUND FUND FUND**
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
Increase in net assets
Operations:
Net investment income........................................ $ 19,858 $ 17,188 $ 31,019 $ --
Net realized gain (loss) on investments, options and
foreign currency transactions.............................. (9,372) (10,891) -- --
Net change in unrealized appreciation (depreciation) of
dividends and dividend witholding tax reclaims
receivable, interest and interest withholding tax
reclaims receivable, securities purchased and sold
and foreign currency transactions.......................... (39) 3,610 -- --
Net change in unrealized appreciation (depreciation)
of investments, options and forward foreign currency
contracts.................................................. 957,018 420,048 -- --
------------ ------------ ------------ -----------
Net increase in net assets resulting from operations......... 967,465 429,955 31,019 --
------------ ------------ ------------ -----------
Distributions to shareholders from: (Note 1)
Net investment income........................................ -- -- (31,019) --
Sources other than net income................................ -- -- -- --
Capital share transactions: (Note 4)
Increase from capital shares sold and reinvested............. 9,333,887 6,793,906 8,884,059 --
Decrease from capital shares repurchased..................... (2,381,841) (1,838,698) (5,133,624) --
------------ ------------ ------------ -----------
Net increase from capital share transactions.................... 6,952,046 4,955,208 3,750,435 --
------------ ------------ ------------ -----------
Total increase in net assets.................................... 7,919,511 5,385,163 3,750,435 --
Net assets:
Beginning of period.......................................... 25,000 25,000 25,000 --
------------ ------------ ------------ -----------
End of period................................................ $ 7,944,511 $ 5,410,163 $ 3,775,435 $ --
============ ============ ============ ===========
</TABLE>

* The Variable Telecommunications Fund did not commence operations until
October 18, 1993.

** The Variable International and Variable Emerging Markets Funds did not
commence operations until July 5, 1994.

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

F-50
<PAGE> 186

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

FINANCIAL HIGHLIGHTS

DECEMBER 31, 1994

Contained below is per share operating performance data for a share outstanding,
total investment return, ratios and supplemental data. This information has been
derived from information provided in the financial statements and market price
data for the shares.

<TABLE>
<CAPTION>
G.T. GLOBAL:
-------------------------------------------------------------
VARIABLE VARIABLE GLOBAL VARIABLE U.S. VARIABLE
STRATEGIC GOVERNMENT GOVERNMENT LATIN AMERICA
INCOME FUND INCOME FUND INCOME FUND FUND
----------- --------------- ------------- -------------
<S> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period . . . . . . . . . . . . . . . $ 14.57 $ 12.53 $ 12.23 $ 17.68
-------- ------- ------- --------
Net investment income (a) . . . . . . . . . . . . . . . . . . . 1.71 0.77 0.63 .11
Net realized and unrealized gain (loss) on investments . . . . . (4.17) (1.85) (1.39) 1.49
-------- ------- ------- --------
Net increase(decrease) resulting from operations . . . . . . . (2.46) (1.08) (0.76) 1.60
-------- ------- ------- --------
Distributions to shareholders from:
Net investment income . . . . . . . . . . . . . . . . . . . . . (0.79) (0.73) (0.62) (0.04)
Net realized gain on investments . . . . . . . . . . . . . . . . (0.45) -- (0.06) (0.07)
In excess of net realized gain on investments . . . . . . . . . -- -- -- --
Return of capital . . . . . . . . . . . . . . . . . . . . . . . (0.05) (0.09) -- --
-------- ------- ------- --------
Total distributions . . . . . . . . . . . . . . . . . . . . . (1.29) (0.82) (0.68) (0.11)
Net asset value, end of period . . . . . . . . . . . . . . . . . . $ 10.82 $ 10.63 $ 10.79 $ 19.17
======== ======= ======= ========
Total investment return (d) . . . . . . . . . . . . . . . . . . . . (17.09)% (8.70)% (6.27)% 9.14%
======== ======= ======= ========
Ratios and supplemental data:
Net assets, end of period (in 000's) . . . . . . . . . . . . . . . $ 23,367 $ 9,654 $ 2,415 $ 26,631
Ratio of net investment income to average net assets:
With reimbursement by G.T. Capital and expense reductions (a) . . 7.58% 6.89% 5.53% 0.82%
Without reimbursement by G.T. Capital and expense reductions . . 7.43% 6.21% 1.29% 0.49%
Ratio of expenses to average net assets:
With reimbursement by G.T. Capital and expense reductions (a) . . 1.00% 1.00% 0.38% 1.25%
Without reimbursement by G.T. Capital and expense reductions . . 1.15% 1.68% 4.63% 1.58%
Portfolio turnover . . . . . . . . . . . . . . . . . . . . . . . . 313% 350% 34% 185%
</TABLE>

February 10, 1993 (commencement of operations) to December 31, 1993

<TABLE>
<CAPTION>
G.T. GLOBAL:
-------------------------------------------------------------
VARIABLE VARIABLE GLOBAL VARIABLE U.S. VARIABLE
STRATEGIC GOVERNMENT GOVERNMENT LATIN AMERICA
INCOME FUND INCOME FUND INCOME FUND FUND
----------- --------------- ------------- -------------
<S> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period . . . . . . . . . . . . $ 12.00 $ 12.00 $ 12.00 $ 12.00
-------- ------- ------- -------
Net investment income (b) . . . . . . . . . . . . . . . . 0.61 0.57 0.53 0.04
Net realized and unrealized gain on investments . . . . . 2.57 0.52 0.23 5.64
-------- ------- ------- -------
Net increase resulting from operations . . . . . . . 3.18 1.09 0.76 5.68
-------- ------- ------- -------
Distributions to shareholders from:
Net investment income . . . . . . . . . . . . . . . . . . (0.61) (0.56) (0.53) (0.00)
Sources other than net income . . . . . . . . . . . . . . (0.00) (0.00) (0.00) (0.00)
-------- ------- ------- -------
Total distributions . . . . . . . . . . . . . . . . (0.61) (0.56) (0.53) (0.00)
-------- ------- ------- -------
Net asset value, end of period . . . . . . . . . . . . . $ 14.57 $ 12.53 $ 12.23 $ 17.68
======== ======= ======= =======
Total investment return (d) . . . . . . . . . . . . . . 27.5% 9.5% 6.4% 47.3%
======== ======= ======= =======
Ratios and supplemental data:
Net assets, end of period (in 000's) . . . . . . . . . . $ 18,089 $ 6,136 $ 974 $ 8,240
Ratio of net investment income to average net assets:
With reimbursement by G.T. Capital (b) . . . . . . . 6.6% 6.1% 5.3% 1.0%
Without reimbursement by G.T. Capital . . . . . . . . 6.3% 5.5% 3.4% 0.4%
Without expenses assumed by G.T. Capital (c) . . . . . 5.2% 2.4% (6.9)% (2.5)%
Ratio of expenses to average net assets:
With reimbursement by G.T. Capital (b) . . . . . . . . 0.5% 0.5% 0.0% 0.7%
Without reimbursement by G.T. Capital . . . . . . . . 0.9% 1.1% 1.9% 1.3%
Without expenses assumed by G.T. Capital (c) . . . . . 1.9% 4.2% 12.3% 4.2%
Portfolio turnover . . . . . . . . . . . . . . . . . . . 245% 298% 81% 78%
</TABLE>

- -------------------
(a) Includes reimbursement by G.T. Capital Management, Inc. of Fund operating
expenses of $0.00 for the Money Market Fund, $0.07 for the Variable
Emerging Markets Fund, $0.28 for the Variable America Fund, $0.11 for the
Variable International Fund, $0.03 for the Variable New Pacific Fund,
$0.04 for the Variable Europe Fund, $0.04 for the Variable Latin America
Fund, $0.03 for the Variable Growth & Income Fund, $0.01 for the Variable
Telecommunications Fund, $0.04 for the Variable Strategic Income Fund,
$0.08 for the Variable Global Government Income Fund and $0.48 for the
Variable U.S. Government Income Fund (Note 2).
(b) Includes reimbursement by G.T. Capital Management, Inc. of Fund operating
expenses of $0.01 for the Money Market Fund, $0.10 for the Variable
America Fund, $0.03 for the Variable New Pacific Fund, $0.03 for the
Variable Europe Fund, $0.02 for the Variable Latin America Fund, $0.05
for the Variable Growth & Income Fund, $0.003 for the Variable
Telecommunications Fund, $0.03 for the Variable Strategic Income Fund,
$0.06 for the Variable Global Government Income Fund and $0.19 for the
Variable U.S. Government Income Fund (Note 2).

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

F-51
<PAGE> 187

<TABLE>
<CAPTION>
G.T. GLOBAL:
--------------------------------------------------------
VARIABLE VARIABLE TELE- VARIABLE VARIABLE
GROWTH & COMMUNICATIONS EMERGING AMERICA
INCOME FUND FUND MARKETS FUND** FUND
----------- -------------- -------------- --------
<S> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period . . . . . . . . . . . . . . . $ 13.77 $ 13.07 $ 12.00 $ 13.75
-------- -------- ------- --------
Net investment income (a) . . . . . . . . . . . . . . . . . . . 0.46 0.01 0.07 0.48
Net realized and unrealized gain (loss) on investments . . . . . (0.85) 0.92 (0.05) 2.08
-------- -------- ------- --------
Net increase(decrease) resulting from operations . . . . . . . (0.39) 0.93 0.02 2.56
-------- -------- ------- --------
Distributions to shareholders from:
Net investment income . . . . . . . . . . . . . . . . . . . . . (0.39) (0.02) (0.07) (0.50)
Net realized gain on investments . . . . . . . . . . . . . . . . -- -- -- --
In excess of net realized gain on investments . . . . . . . . . -- -- (0.06) --
Return of capital . . . . . . . . . . . . . . . . . . . . . . . -- -- -- --
-------- -------- ------- --------
Total distributions . . . . . . . . . . . . . . . . . . . . . (0.39) (0.02) (0.13) (0.50)
Net asset value, end of period . . . . . . . . . . . . . . . . . . $ 12.99 $ 13.98 $ 11.89 $ 15.81
======== ======== ======= ========
Total investment return (d) . . . . . . . . . . . . . . . . . . . . (2.85)% 7.15% 0.12% 18.88%
======== ======== ======= ========
Ratios and supplemental data:
Net assets, end of period (in 000's) . . . . . . . . . . . . . . . $ 25,580 $ 36,029 $ 7,267 $ 15,257
Ratio of net investment income to average net assets:
With reimbursement by G.T. Capital and expense reductions (a) . . 3.69% 0.31% 4.10% 1.83%
Without reimbursement by G.T. Capital and expense reductions . . 3.45% 0.07% (.20)% .76%
Ratio of expenses to average net assets:
With reimbursement by G.T. Capital and expense reductions (a) . . 1.25% 1.25% 0.00% 0.98%
Without reimbursement by G.T. Capital and expense reductions . . 1.49% 1.49% 4.30% 2.05%
Portfolio turnover . . . . . . . . . . . . . . . . . . . . . . . . 53% 81% 117% 139%
</TABLE>

<TABLE>
<CAPTION>
G.T. GLOBAL:
----------------------------------------------------
VARIABLE VARIABLE MONEY VARIABLE
NEW PACIFIC EUROPE MARKET INTERNATIONAL
FUND FUND FUND FUND**
----------- -------- ------ -------------
<S> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period . . . . . . . . . . . . . . . $ 16.07 $ 15.33 $ 1.00 $ 12.00
-------- ------- -------- -------
Net investment income (a) . . . . . . . . . . . . . . . . . . . 0.08 0.16 0.03 0.06
Net realized and unrealized gain (loss) on investments . . . . . (2.08) (0.25) 0.00 (0.76)
-------- ------- -------- -------
Net increase(decrease) resulting from operations . . . . . . . (2.00) (0.09) 0.03 (0.70)
-------- ------- -------- -------
Distributions to shareholders from:
Net investment income . . . . . . . . . . . . . . . . . . . . . (0.06) -- (0.03) (0.05)
Net realized gain on investments . . . . . . . . . . . . . . . . -- (0.02) -- --
In excess of net realized gain on investments . . . . . . . . . -- -- -- --
Return of capital . . . . . . . . . . . . . . . . . . . . . . . -- -- --
-------- ------- -------- -------
Total distributions . . . . . . . . . . . . . . . . . . . . . (0.06) (0.02) (0.03) (0.05)
Net asset value, end of period . . . . . . . . . . . . . . . . . . $ 14.01 $ 15.22 $ 1.00 $ 11.25
======== ======= ======== =======
Total investment return (d) . . . . . . . . . . . . . . . . . . . . (12.47)% (0.59)% 3.48% (5.81)%
======== ======= ======== =======
Ratios and supplemental data:
Net assets, end of period (in 000's) . . . . . . . . . . . . . . . $ 19,391 $15,020 $ 19,474 $ 2,229
Ratio of net investment income to average net assets:
With reimbursement by G.T. Capital and expense reductions (a) . . 0.83% 1.48% 3.70% 3.33%
Without reimbursement by G.T. Capital and expense reductions . . 0.48% 1.07% 3.64% (2.56)%
Ratio of expenses to average net assets:
With reimbursement by G.T. Capital and expense reductions (a) . . 1.25% 1.25% 0.75% 0.69%
Without reimbursement by G.T. Capital and expense reductions . . 1.60% 1.66% 0.81% 6.58%
Portfolio turnover . . . . . . . . . . . . . . . . . . . . . . . . 30% 61% N/A 17%
</TABLE>

February 10, 1993 (commencement of operations) to December 31, 1993

<TABLE>
<CAPTION>
G.T. GLOBAL:
--------------------------------------------------------
VARIABLE VARIABLE TELE- VARIABLE VARIABLE
GROWTH & COMMUNICATIONS EMERGING AMERICA
INCOME FUND FUND MARKETS FUND** FUND
----------- -------------- -------------- --------
<S> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period . . . . . . . . . . . . $ 12.00 $ 12.00 $ -- $ 12.00
-------- ------- ------ -------
Net investment income (b) . . . . . . . . . . . . . . . . 0.31 0.04 -- 1.11
Net realized and unrealized gain on investments . . . . . 1.79 1.03 -- 0.64
-------- ------- ------ -------
Net increase resulting from operations . . . . . . . 2.10 1.07 -- 1.75
-------- ------- ------ -------
Distributions to shareholders from:
Net investment income . . . . . . . . . . . . . . . . . . (0.28) (0.00) -- (0.00)
Sources other than net income . . . . . . . . . . . . . . (0.05) (0.00) -- --
-------- ------- ------ -------
Total distributions . . . . . . . . . . . . . . . . (0.33) (0.00) -- (0.00)
-------- ------- ------ -------
Net asset value, end of period . . . . . . . . . . . . . $ 13.77 $ 13.07 $ -- $ 13.75
======== ======= ====== =======
Total investment return (d) . . . . . . . . . . . . . . 17.8% 8.9% --% 14.7%
======== ======= ====== =======
Ratios and supplemental data:
Net assets, end of period (in 000's) . . . . . . . . . . $ 11,677 $ 7,903 --% $ 1,700
Ratio of net investment income to average net assets:
With reimbursement by G.T. Capital (b) . . . . . . . 3.2% 2.5% --% 14.1%
Without reimbursement by G.T. Capital . . . . . . . . 2.7% 2.3% --% 12.8%
Without expenses assumed by G.T. Capital (c) . . . . . 1.1% 1.6% --% 7.6%
Ratio of expenses to average net assets:
With reimbursement by G.T. Capital (b) . . . . . . . . 0.6% 0.9% --% 0.0%
Without reimbursement by G.T. Capital . . . . . . . . 1.2% 1.1% --% 1.3%
Without expenses assumed by G.T. Capital (c) . . . . . 2.8% 1.8% --% 6.5%
Portfolio turnover . . . . . . . . . . . . . . . . . . . 17% 20% --% 831%
</TABLE>

<TABLE>
<CAPTION>
G.T. GLOBAL:
-----------------------------------------------------
VARIABLE VARIABLE MONEY VARIABLE
NEW PACIFIC EUROPE MARKET INTERNATIONAL
FUND FUND FUND FUND**
----------- -------- ------ -------------
<S> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period . . . . . . . . . . . . $ 12.00 $ 12.00 $ 1.00 $ --
------- ------- ------- -----
Net investment income (b) . . . . . . . . . . . . . . . . 0.04 0.05 0.03 --
Net realized and unrealized gain on investments . . . . . 4.03 3.28 0.00 --
------- ------- ------- -----
Net increase resulting from operations . . . . . . . 4.07 3.33 0.03 --
------- ------- ------- -----
Distributions to shareholders from:
Net investment income . . . . . . . . . . . . . . . . . . (0.00) (0.00) (0.03) --
Sources other than net income . . . . . . . . . . . . . . -- -- -- --
------- ------- ------- -----
Total distributions . . . . . . . . . . . . . . . . (0.00) (0.00) (0.03) --
------- ------- ------- -----
Net asset value, end of period . . . . . . . . . . . . . $ 16.07 $ 15.33 $ 1.00 $ --
======= ======= ======= =====
Total investment return (d) . . . . . . . . . . . . . . 33.9% 27.8% 2.6% --%
======= ======= ======= =====
Ratios and supplemental data:
Net assets, end of period (in 000's) . . . . . . . . . . $ 7,945 $ 5,410 3,775
Ratio of net investment income to average net assets:
With reimbursement by G.T. Capital (b) . . . . . . . 0.9% 1.1% 2.9% --%
Without reimbursement by G.T. Capital . . . . . . . . 0.3% 0.4% 2.1% --%
Without expenses assumed by G.T. Capital (c) . . . . . (2.0)% (2.8)% (2.6)% --%
Ratio of expenses to average net assets:
With reimbursement by G.T. Capital (b) . . . . . . . . 0.6% 0.7% 0.2% --%
Without reimbursement by G.T. Capital . . . . . . . . 1.3% 1.4% 1.0% --%
Without expenses assumed by G.T. Capital (c) . . . . . 3.6% 4.6% 5.7% --%
Portfolio turnover . . . . . . . . . . . . . . . . . . . 15% 27% N/A --%
</TABLE>

- -------------------
(c) During the period ended December 31, 1993, G.T. Capital voluntarily
assumed certain expenses for the Funds (Note 2).
(d) Total returns do not include initial sales charges.
+ Not annualized
++ Annualized
* The Variable Telecommunications Fund did not commence operations until
October 18, 1993.
** The Variable International and Variable Emerging Markets Funds did not
commence operations until July 5, 1994.

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

F-52

<PAGE> 188
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

NOTES TO
FINANCIAL STATEMENTS

DECEMBER 31, 1994

================================================================================

1. SIGNIFICANT ACCOUNTING POLICIES

G.T. Global Variable Investment Series and G.T. Global Variable Investment Trust
("Companies") were organized as Massachusetts business trusts on May 26, 1992
and September 17, 1992, respectively. The Companies are registered under the
Investment Company Act of 1940 ("Act") as open-end management investment
companies. The G.T. Global Variable Investment Series operates as a series
company currently issuing five classes of shares of beneficial interest: G.T.
Global: Variable New Pacific Fund (formerly G.T. Global:Variable Pacific Fund),
G.T. Global: Variable Europe Fund, G.T. Global: Variable America Fund, G.T.
Global: Variable International Fund and G.T. Global: Money Market Fund. G.T.
Global Variable Investment Trust operates as a series company currently issuing
seven classes of shares of beneficial interest: G.T. Global: Variable Latin
America Fund, G.T. Global: Variable Growth & Income Fund, G.T. Global: Variable
Strategic Income Fund, G.T. Global: Variable Global Government Income Fund, G.T.
Global: Variable U.S. Government Income Fund, G.T. Global: Variable Emerging
Markets Fund and G.T. Global: Variable Telecommunications Fund. (The classes of
shares of beneficial interest for the two companies are referred to herein
collectively as the "Funds.") Each of the Funds is classified as a diversified
management investment company; except for G.T. Global: Variable Latin America
Fund, G.T. Global: Variable Growth & Income Fund, G.T. Global: Variable
Strategic Income Fund and G.T. Global: Variable Global Government Income Fund,
which are each registered as a non-diversified management investment company
under the Investment Company Act of 1940, as amended.

The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of the financial statements. The
policies are in conformity with generally accepted accounting principles.

(A) PORTFOLIO VALUATION

The Funds calculate the net asset value of and complete orders to purchase,
exchange or repurchase Fund shares on each business day, with the exception of
those days on which the New York Stock Exchange is closed.

Equity securities are valued at the last sales price on the exchange on which
such securities are traded, or, in the principal over-the-counter market in
which such securities are traded, as of the close of business on the day the
securities are being valued or, lacking any sales, at the last available bid
price. Securities traded in the over-the-counter market are valued at the last
available sales price in the over-the-counter market prior to valuation. In
cases where securities are traded on more than one exchange, the securities are
valued on the exchange determined by G.T. Capital, Inc. ("G.T. Capital") to be
the primary market.

Fixed income investments are valued at the mean of representative quoted bid and
ask prices for such investments or, if such prices are not available, at prices
for investments of comparative maturity, quality and type; however, when G.T.
Capital deems it appropriate, prices obtained for the day of valuation from a
bond pricing service will be used. Short-term investments with a maturity of 60
days or less are valued at amortized cost adjusted for foreign exchange
translation and market fluctuations, if any.

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

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

(B) FOREIGN CURRENCY TRANSLATION

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

As of January 1, 1994, the Funds adopted Statement of Position 93-4: "Foreign
Currency Accounting and Financial Statement Presentation for Investment
Companies." As permitted under the SOP, the Funds do not isolate that portion of
the results of operations resulting from changes in foreign exchange rates on
investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.

F-53
<PAGE> 189

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

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

With respect to repurchase agreements entered into by the Funds, it is the
Funds' policy to always receive, as collateral, United States government
securities or other high quality debt securities of which the value, including
accrued interest, is at least equal to the amount to be repaid to the Funds
under each agreement at its maturity. G.T. Capital is responsible for
determining that the value of these underlying securities remains at least equal
to the resale price.

(D) FORWARD FOREIGN CURRENCY CONTRACTS

A forward foreign currency contract ("Forward") is an agreement between two
parties to buy and sell a currency at a set price on a future date. The market
value of the Forward fluctuates with changes in currency exchange rates. The
Forward is marked-to-market daily and the change in market value is recorded by
the Funds as an unrealized gain or loss. When the Forward is closed, the Funds
record a realized gain or loss equal to the difference between the value at the
time it was opened and the value at the time it was closed. Forwards involve
market risk in excess of the amount shown in the Funds' "Statements of Assets
and Liabilities." The Funds could be exposed to risk if the counterparties are
unable to meet the terms of the contracts or if the value of the currency
changes unfavorably. The Funds may enter into Forwards in connection with
planned purchases or sales of securities or to hedge the value of portfolio
securities denominated in a particular currency.

(E) OPTION ACCOUNTING PRINCIPLES

When a Fund writes a call or put option, an amount equal to the premium received
is included in the Fund's "Statement of Assets and Liabilities" as an asset and
an equivalent liability. The amount of the liability is subsequently
marked-to-market to reflect the current market value of the option. The current
market value of an option is the last sale price or, in the absence of a sale,
the last offering price. If an option expires on its stipulated expiration date
or if a Fund enters into a closing purchase transaction, a gain or loss is
realized without regard to any unrealized gain or loss on the underlying
security, and the liability related to such option is extinguished. If a written
call option is exercised, a gain or loss is realized from the sale of the
underlying security and the proceeds of the sale are increased by the premium
originally received. If a written put option is exercised, the cost of the
underlying security purchased would be decreased by the premium originally
received. A Fund can write options only on a covered basis, which, for a call,
requires that the Fund hold the underlying securities and, for a put, requires
the Fund to set aside cash, U.S. government securities or other liquid, high
grade debt securities in an amount not less than the exercise price at all times
while the put option is outstanding. The Funds will use options in order to
manage their exposure to currency levels or interest rates.

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

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

(F) FUTURES CONTRACTS

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

(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME

Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities

F-54
<PAGE> 190

sold is determined on a first-in, first-out basis, unless otherwise specified.
Dividends are recorded on the ex-dividend date. Interest income is recorded on
the accrual basis. Where a high level of uncertainty exists as to its
collection, income is recorded net of all withholding tax with any rebate
recorded when received. A Fund may trade securities on other than normal
settlement terms. This may increase the risk if the other party to the
transaction fails to deliver and causes the Fund to subsequently invest at less
advantageous prices.

(H) DISTRIBUTIONS TO SHAREHOLDERS

Distributions to shareholders are recorded by the Fund on the ex-date. For the
Money Market Fund, dividends are declared daily and paid monthly from net
investment income. The Variable Strategic Income Fund, Variable Global
Government Income Fund and Variable U.S. Government Income Fund declare and pay
dividends from net investment income, if any, monthly. The Variable Growth &
Income Fund declares and pays dividends from net investment income, if any,
quarterly. The Variable Latin America Fund, Variable Telecommunications Fund,
Variable New Pacific Fund, Variable Europe Fund, Variable Emerging Markets Fund,
Variable International Fund and Variable America Fund declare and pay dividends
from net investment income, if any, annually. With respect to each Fund,
dividends from net realized capital gains, if any, are normally declared and
paid annually.

Income and capital gain distributions are determined in accordance with Federal
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments of
income and gains on various investment securities held by the Fund and timing
differences.

(I) TAXES

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

<TABLE>
<CAPTION>
CAPITAL LOSS EXPIRES IN
G.T. GLOBAL FUNDS CARRYFORWARD YEAR
- ----------------- ------------ ----------
<S> <C> <C>
Variable Strategic Income $3,286,925 2002
Variable Global
Government Income 1,196,724 2002
Variable U.S.
Government Income 71,665 2002
Variable Growth and Income 221,307 2002
Variable New Pacific Fund 415,778 2002
12,288 2001
Variable Europe Fund 69,767 2002
</TABLE>

(J) DEFERRED ORGANIZATIONAL EXPENSES

Costs incurred by G.T. Global Variable Investment Series and Trust in connection
with their organization, which aggregated $125,333 and $188,000, respectively,
are being amortized on a straight-line basis for a five year period. While G.T.
Capital has advanced certain of the Companies' organizational costs incurred to
date, the Companies may reimburse G.T. Capital for the amount of these advances.
In the event that G.T. Capital redeems any of the initial 2,083.333 shares of
each of the Variable New Pacific Fund, Variable Europe Fund and Variable America
Fund; or the initial 25,000 shares of the Money Market Fund; or the initial
1,666.667 shares of each of the Variable Strategic Income Fund, Variable
Government Income Fund, Variable U.S. Government Income Fund, Variable Latin
America Fund and the Variable Growth & Income Fund; or the initial 1.000 share
of the Variable Telecommunications Fund, within the five year amortization
period, the respective Fund's unamortized organizational expenses allocable to
the shares redeemed will be deducted from G.T. Capital's redemption proceeds.

(K) FOREIGN SECURITIES

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

(L) INDEXED SECURITIES

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

(M) RESTRICTED SECURITIES

The Funds are permitted to invest in privately placed restricted securities.
These securities may be resold in transactions exempt from registration or to
the public if the securities are registered. Disposal of these securities may
involve time-consuming negotiations and expense, and prompt sale at an
acceptable price may be difficult. At the end of the period, restricted
securities (excluding 144A issues) are shown at the end of the Portfolio of
Investments.

F-55
<PAGE> 191

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

(N) Portfolio Securities Loaned

At December 31, 1994, stocks with an aggregate value listed below were on loan
to brokers. The loans were secured by cash collateral received by the Fund:

<TABLE>
<CAPTION>
DECEMBER 31, 1994 YEAR ENDED
---------------------------------
AGGREGATE VALUE DECEMBER 31, 1994
ON LOAN CASH COLLATERAL FEES RECEIVED
--------------- --------------- -----------------
<S> <C> <C> <C>
G.T. GLOBAL:
Variable Strategic Income Fund $ - $ - $ -
Variable Global Government Income Fund - - -
Variable U.S. Government Income Fund - - -
Variable Latin America Fund 80,387 88,500 345
Variable Growth & Income Fund 665,886 692,839 2,007
Variable Telecommunications Fund 4,110,350 4,297,200 6,653
Variable Emerging Markets Fund - - -
Variable America Fund - - -
Variable New Pacific Fund 943,057 975,750 2,539
Variable Europe Fund 782,538 804,910 2,487
Money Market Fund - - -
Variable International Fund - - -
</TABLE>

For international securities, cash collateral is received by the Fund against
loaned securities in an amount at least equal to 105% of the market value of the
loaned securities at the inception of each loan. This collateral must be
maintained at not less than 103% of the market value of the loaned securities
during the period of the loan. For domestic securities, cash collateral is
received by the Fund against loaned securities in an amount at least equal to
102% of the market value of the loaned securities at the inception of each loan.
This collateral must be maintained at not less than 100% of the market value of
the loaned securities during the period of the loan. Fees received from
securities loaned were used to reduce the Funds' custodian fees.

2. Related Parties

G.T. Capital is the Funds' investment manager and administrator. For these
services, the Money Market Fund pays G.T. Capital an investment management and
administration fee at the annualized rate of 0.50% of that Fund's average daily
net assets. The Variable Strategic Income Fund, Variable Global Government
Income Fund, Variable U.S. Government Income Fund and Variable America Fund each
pays G.T. Capital an investment management and administration fee at the
annualized rate of 0.75% of the Fund's average daily net assets. The Variable
Growth & Income Fund, Variable Latin America Fund, Variable Telecommunications
Fund, Variable New Pacific Fund, Variable Emerging Markets Fund, Variable
International Fund and Variable Europe Fund each pays G.T. Capital an investment
management and administration fee at the annualized rate of 1.00% of its average
daily net assets. All fees are computed daily and paid monthly.

G.T. Capital has undertaken to limit the total operating expenses (exclusive of
brokerage commissions, interest, taxes and extraordinary items) of each of the
Variable New Pacific Fund, the Variable Europe Fund, the Variable Latin America
Fund, the Variable Telecommunications Fund, Variable Emerging Markets Fund,
Variable International and the Variable Growth & Income Fund to 1.25% of their
respective average daily net assets. In addition, G.T. Capital has undertaken to
limit the total operating expenses (exclusive of brokerage commissions,
interest, taxes and extraordinary items) of each of the Variable Strategic
Income Fund, the Variable Global Government Income Fund, the Variable U.S.
Government Income Fund, and the Variable America Fund to 1.00% of their
respective net assets. Likewise, G.T. Capital has undertaken to limit the total
operating expenses (exclusive of brokerage commissions, interest, taxes and
extraordinary items) of the Money Market Fund to .75% of its net assets. From
time to time, G.T. Capital in its sole discretion may waive its fees and/or
voluntarily assume certain Fund expenses.

All general expenses of the Companies and joint expenses of the Funds are
allocated among the Funds on a basis deemed fair and equitable.

G.T. Global Financial Services, Inc. ("G.T. Global"), an affiliate of G.T.
Capital, is the Funds' distributor. G.T. Global Investor Services, Inc. ("G.T.
Services"), an affiliate of G.T. Capital and G.T. Global, is the Funds' transfer
agent.

The Companies pay each of their Trustees who is not an employee, officer or
director of G.T. Capital, G.T. Global or G.T. Services $5,000 per year.

F-56
<PAGE> 192

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

3. PURCHASES AND SALES OF SECURITIES

The following summarizes purchases and sales of investment securities, other
than short-term investments, by Fund, for the year ended December 31, 1994:

<TABLE>
<CAPTION>
PURCHASES AND SALES OF SECURITIES

PURCHASES
------------------------------
U.S. GOVERNMENT OTHER ISSUES
--------------- ------------
<S> <C> <C>
G.T. GLOBAL:
Variable Strategic Income Fund $3,362,663 $63,765,625
Variable Global Government Income Fund 2,083,744 30,011,258
Variable U.S. Government Income Fund 1,707,588 199,086
Variable Latin America Fund -- 50,577,390
Variable Growth & Income Fund 4,455,845 22,476,411
Variable Telecommunications Fund -- 42,418,568
Variable Emerging Markets Fund -- 9,015,233
Variable America Fund -- 12,816,000
Variable New Pacific Fund -- 16,803,710
Variable Europe Fund -- 11,689,743
Money Market Fund -- --
Variable International Fund -- 2,226,280
</TABLE>

<TABLE>
<CAPTION>
SALES
------------------------------
U.S. GOVERNMENT OTHER ISSUES
--------------- ------------
<S> <C> <C>
G.T. GLOBAL:
Variable Strategic Income Fund $1,055,933 $59,483,128
Variable Global Government Income Fund 1,617,497 26,633,865
Variable U.S. Government Income Fund 423,764 --
Variable Latin America Fund -- 34,974,166
Variable Growth & Income Fund 3,950,583 9,503,970
Variable Telecommunications Fund -- 17,515,186
Variable Emerging Markets Fund -- 2,649,503
Variable America Fund -- 6,248,059
Variable New Pacific Fund -- 4,082,588
Variable Europe Fund -- 3,340,102
Money Market Fund -- --
Variable International Fund -- 133,924
</TABLE>

The Funds' written options activity for the year ended December 31, 1994, was as
follows:

G.T. GLOBAL: VARIABLE STRATEGIC INCOME FUND
COVERED CALL OPTIONS WRITTEN

<TABLE>
<CAPTION>
NUMBER OF
TRANSACTIONS PREMIUM
------------ -------
<S> <C> <C>
Options outstanding at December 31, 1993 -- --
Options written during the year ended December 31, 1994 8 $ 91,892
Options cancelled in closing purchase transactions (6) (72,649)
Options expired prior to exercise (2) (19,243)
Options exercised -- --
---- --------
Options outstanding at December 31, 1994 0 $ 0
==== ========
</TABLE>

G.T. GLOBAL: VARIABLE GLOBAL GOVERNMENT INCOME FUND
COVERED CALL OPTIONS WRITTEN

<TABLE>
<CAPTION>
NUMBER OF
TRANSACTIONS PREMIUM
------------ -------
<S> <C> <C>
Options outstanding at December 31, 1993 -- --
Options written during the year ended December 31, 1994 3 $ 20,456
Options cancelled in closing purchase transactions (2) (15,381)
Options expired prior to exercise (1) (5,075)
Options exercised -- --
---- --------
Options outstanding at December 31, 1994 0 $ 0
==== ========
</TABLE>

F-57
<PAGE> 193
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

4. CAPITAL SHARES

At December 31, 1994, there were an unlimited number of shares of beneficial
interest authorized, at no par value. Transactions in capital shares of the
Funds were as follows:

CAPITAL SHARE TRANSACTIONS

<TABLE>
<CAPTION>
FEBRUARY 10, 1993
(COMMENCEMENT OF
YEAR ENDED OPERATIONS)
DECEMBER 31, 1994 TO DECEMBER 31, 1993
----------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
--------- ----------- --------- -----------
<S> <C> <C> <C> <C>
G.T. GLOBAL: VARIABLE STRATEGIC INCOME FUND
Shares sold........................................................ 1,978,885 $24,363,028 1,555,580 $20,856,885
Shares issued in connection with reinvestment of distributions..... 217,861 2,504,885 24,301 331,208
---------- ----------- --------- -----------
2,196,746 26,867,913 1,579,881 21,188,093

Shares repurchased................................................. (1,279,651) (14,932,250) (339,749) (4,586,401)
---------- ----------- --------- -----------
Net increase....................................................... 917,095 $11,935,663 1,240,132 $16,601,692
========== =========== ========= ===========

G.T. GLOBAL: VARIABLE GLOBAL GOVERNMENT INCOME FUND
Shares sold........................................................ 929,187 $10,658,737 602,269 $ 7,439,598
Shares issued in connection with reinvestment of distributions..... 60,221 673,921 7,456 92,236
---------- ----------- --------- -----------

Shares repurchased................................................. (571,500) (6,371,492) (121,573) (1,509,328)
---------- ----------- --------- -----------
Net increase....................................................... 417,908 $ 4,961,166 488,152 $ 6,022,506
========== =========== ========= ===========

G.T. GLOBAL: VARIABLE U.S. GOVERNMENT INCOME FUND
Shares sold........................................................ 423,487 $ 4,690,715 89,129 $ 1,086,977
Shares issued in connection with reinvestment of distributions..... 9,399 104,492 2,058 25,528
---------- ----------- --------- -----------
432,886 4,795,207 91,187 1,112,505

Shares repurchased................................................. (288,661) (3,169,722) (13,248) (162,803)
---------- ----------- --------- -----------
Net increase....................................................... 144,225 $ 1,625,485 77,939 $ 949,702
========== =========== ========= ===========

G.T. GLOBAL: VARIABLE LATIN AMERICA FUND
Shares sold........................................................ 1,888,080 $37,506,975 627,159 $ 8,921,929
Shares issued in connection with reinvestment of distributions..... 5,690 91,834 -- --
---------- ----------- --------- -----------
1,893,770 37,598,809 627,159 8,921,929

Shares repurchased................................................. (970,532) (19,435,079) (162,720) (2,320,013)
---------- ----------- --------- -----------
Net increase....................................................... 923,238 $18,163,730 464,439 $ 6,601,916
========== =========== ========= ===========

G.T. GLOBAL: VARIABLE GROWTH & INCOME FUND
Shares sold........................................................ 1,577,747 $21,179,611 1,057,397 $13,837,976
Shares issued in connection with reinvestment of distributions..... 49,422 644,305 8,995 119,699
---------- ----------- --------- -----------
1,627,169 21,823,916 1,066,392 13,957,675

Shares repurchased................................................. (505,030) (6,701,077) (220,258) (2,879,600)
---------- ----------- --------- -----------
Net increase....................................................... 1,122,139 $15,122,839 846,134 $11,078,075
========== =========== ========= ===========
<CAPTION>
OCTOBER 18, 1993
(COMMENCEMENT OF
OPERATIONS)
TO DECEMBER 31, 1993
-----------------------
<S> <C> <C> <C> <C>
G.T. GLOBAL: VARIABLE TELECOMMUNICATIONS FUND
Shares sold........................................................ 2,738,401 $36,062,278 680,051 $ 8,265,911
Shares issued in connection with reinvestment of distributions..... 2,609 31,627 -- --
---------- ----------- --------- -----------
2,741,010 36,093,905 680,051 8,265,911

Shares repurchased................................................. (769,197) (10,175,735) (75,482) (917,916)
---------- ----------- --------- -----------
Net increase....................................................... 1,971,813 $25,918,170 604,569 $ 7,347,995
========== =========== ========= ===========
<CAPTION>
JULY 5, 1994
(COMMENCEMENT OF
OPERATIONS)
TO DECEMBER 31, 1994
------------------------
<S> <C> <C>
G.T. GLOBAL: VARIABLE EMERGING MARKETS FUND SHARES AMOUNT
---------- -----------
Shares sold........................................................ 880,133 $11,376,969
Shares issued in connection with reinvestment of distributions..... 5,988 75,214
---------- -----------
Shares repurchased................................................. (274,767) (3,583,799)
---------- -----------
Net increase....................................................... 611,354 $ 7,868,384
========== ===========

</TABLE>

F-58
<PAGE> 194
G.T. GLOBAL VARIABLE INVESTMENT FUNDS
<TABLE>
<CAPTION>
FEBRUARY 10, 1993
(COMMENCEMENT OF
YEAR ENDED OPERATIONS)
DECEMBER 31, 1994 TO DECEMBER 31, 1993
------------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
----------- ----------- --------- ----------
<S> <C> <C> <C> <C>
G.T. GLOBAL: VARIABLE AMERICA FUND
Shares sold........................................................ 1,410,056 $21,334,929 573,519 $ 7,444,411
Shares issued in connection with reinvestment of distributions..... 9,566 136,602 -- --
----------- ----------- --------- -----------
1,419,622 21,471,531 573,519 7,444,411

Shares repurchased................................................. (578,009) (8,750,561) (452,005) (6,000,261)
----------- ----------- --------- -----------
Net increase....................................................... 841,613 $12,720,970 121,514 $ 1,444,150
=========== =========== ========= ===========

G.T. GLOBAL: VARIABLE NEW PACIFIC FUND
Shares sold........................................................ 2,682,038 $40,297,352 659,599 $ 9,333,887
Shares issued in connection with reinvestment of distributions..... 3,541 51,590 -- --
----------- ----------- --------- -----------
2,685,579 40,348,942 659,599 9,333,887

Shares repurchased................................................. (1,795,774) (26,803,641) (167,300) (2,381,841)
----------- ----------- --------- -----------
Net increase....................................................... 889,805 $13,545,301 492,299 $ 6,952,046
=========== =========== ========= ===========

G.T. GLOBAL: VARIABLE EUROPE FUND
Shares sold........................................................ 1,354,348 $21,064,089 482,062 $ 6,793,906
Shares issued in connection with reinvestment of distributions..... 927 14,252 -- --
----------- ----------- --------- -----------
1,355,275 21,078,341 482,062 6,793,906

Shares repurchased................................................. (721,304) (11,126,870) (131,150) (1,838,698)
----------- ----------- --------- -----------
Net increase....................................................... 633,971 $ 9,951,471 350,912 $ 4,955,208
=========== =========== ========= ===========

G.T. GLOBAL: MONEY MARKET FUND
Shares sold........................................................ 75,553,997 $75,553,997 8,864,007 $ 8,864,007
Shares issued in connection with reinvestment of distributions..... 321,887 321,887 20,052 20,052
----------- ----------- --------- -----------
75,875,884 75,875,884 8,884,059 8,884,059

Shares repurchased................................................. (60,177,597) (60,177,597) (5,133,624) (5,133,624)
----------- ----------- --------- -----------
Net increase....................................................... 15,698,287 $15,698,287 3,750,435 $ 3,750,435
=========== =========== ========= ===========

<CAPTION>
JULY 5, 1994
(COMMENCEMENT OF
OPERATIONS)
TO DECEMBER 31, 1994
------------------------
G.T. GLOBAL: VARIABLE INTERNATIONAL FUND SHARES AMOUNT
---------- -----------
<S> <C> <C>
Shares sold........................................................ 371,362 $ 4,416,954
Shares issued in connection with reinvestment of distributions..... 885 9,954
---------- -----------
372,247 $ 4,426,908

Shares repurchased................................................. (174,075) (2,061,498)
---------- -----------
Net increase....................................................... 198,172 $ 2,365,410
========== ===========
</TABLE>

5. EXPENSE REDUCTIONS

G.T. Capital has directed certain portfolio trades to brokers who paid a portion
of the Funds' expenses. For the year ended December 31, 1994, the Funds'
expenses were reduced by $13,671 under these arrangements.

F-59

<PAGE> 195

- --------------------------------------------------------------------------------
------------------------------------------------
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

REPORT OF
INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------

To the Shareholder and Board of Trustees of G.T. Global Variable Investment
Trust:

We have audited the accompanying statement of assets and liabilities of G.T.
Global Variable Investment Trust (comprising, respectively, G.T. Global:
Variable Natural Resources Fund and G.T. Global: Variable Infrastructure Fund,
as of January 20, 1995. This financial statement is the responsibility of the
Funds' management. Our responsibility is to express an opinion on this financial
statement based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. Our procedures included
confirmation of cash held by the custodian as of January 20, 1995. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

In our opinion, the statement of assets and liabilities referred to above
presents fairly, in all material respects, the financial position of each of the
aforementioned Funds as of January 20, 1995, in conformity with generally
accepted accounting principles.

COOPERS & LYBRAND L.L.P.

Boston, Massachusetts
January 23, 1995

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

F-60
<PAGE> 196

- --------------------------------------------------------------------------------
------------------------------------------------
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

STATEMENT OF ASSETS
AND LIABILITIES

January 20, 1995

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

<TABLE>
<CAPTION>
G.T. GLOBAL:
------------------------------------
VARIABLE VARIABLE
NATURAL RESOURCES INFRASTRUCTURE
FUND FUND
----------------- --------------
<S> <C> <C>
ASSETS
Cash.......................................................... $ 100,000 $100,000
----------------- --------------
100,000 100,000
----------------- --------------
LIABILITIES
NET ASSETS, applicable to shares of beneficial interest, no par
value, issued and outstanding (Note 1)........................ $ 100,000 $100,000
============== ===========
SHARES OUTSTANDING.............................................. 8,333 8,333
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE.................. $ 12.00 $ 12.00
============== ===========
</TABLE>

The accompanying notes are an integral part of this financial statement.

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

F-61
<PAGE> 197

- --------------------------------------------------------------------------------
------------------------------------------------
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

NOTES TO
STATEMENT OF ASSETS AND
LIABILITIES

January 20, 1995

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

NOTE 1.

The G.T. Global Variable Investment Trust ("Company") operates as a series
company comprised of nine separate funds: G.T. Global: Variable Latin American
Fund, G.T. Global: Variable Emerging Markets Fund, G.T. Global: Variable
Telecommunications Fund, G.T. Global: Variable Natural Resources Fund, G.T.
Global: Variable Infrastructure Fund, G.T. Global: Variable Growth & Income
Fund, G.T. Global: Variable Strategic Income Fund, G.T. Global: Variable Global
Government Income Fund and G.T. Global: Variable U.S. Government Income Fund
(each a "Fund," collectively the "Funds"). The Company is organized as a
Massachusetts business trust and is registered under the Investment Company Act
of 1940, as amended ("1940 Act"). G.T. Global: Variable U.S. Government Income
Fund, G.T. Global: Variable Emerging Markets Fund, G.T. Global: Variable
Telecommunications Fund, G.T. Global: Variable Natural Resources Fund, G.T.
Global: Variable Infrastructure Fund, is classified as a diversified open-end
management investment company. G.T. Global: Variable Latin America Fund, G.T.
Global: Variable Growth & Income Fund, G.T. Global: Variable Strategic Income
Fund and G.T. Global: Variable Global Government Income Fund are each classified
as a "non-diversified," open-end management investment company. The Company has
eight series of shares of beneficial interest outstanding, and each series
correspond to a Fund.

The G.T. Global: Variable Natural Resources Fund and G.T. Global: Variable
Infrastructure Fund have had no operations to date other than those relating to
the registration of its shares, and the sale and issuance of all of the
outstanding shares to G.T. Capital Management, Inc. ("G.T. Capital"), the Funds'
investment manager and administrator.

NOTE 2.

G.T. Capital serves as the investment manager and administrator of the Funds.
G.T. Global: Variable Latin America Fund, G.T. Global: Variable Emerging Markets
Fund, G.T. Global: Variable Telecommunications Fund, G.T. Global: Variable
Natural Resources Fund, G.T. Global: Variable Infrastructure Fund, and G.T.
Global: Variable Growth & Income Fund each pay G.T. Capital an investment
management and administration fee, calculated daily and paid monthly, at the
annualized rate of 1.00% of the Fund's average daily net assets. G.T. Global:
Variable Strategic Income Fund, G.T. Global: Variable Global Government Income
Fund and G.T. Global: U.S. Government Income Fund, each pay G.T. Capital an
investment management and administration fee, calculated daily and paid monthly,
at an annualized rate of 0.75% of the Fund's average daily net assets. G.T.
Global Financial Services, Inc. ("G.T. Global"), an affiliate of G.T. Capital,
is the Funds' distributor, G.T. Global Investor Services, Inc., an affiliate of
G.T. Capital and G.T. Global, is the Funds' transfer agent.

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

F-62
<PAGE> 198

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE STRATEGIC INCOME FUND

PORTFOLIO OF INVESTMENTS

June 30, 1995 (Unaudited)

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal % of Net
Fixed Income Investments Currency Amount Market Value Assets*
------------------------ -------- --------- ------------ --------
<S> <C> <C> <C> <C>
Government & Government Agency Obligations (84.9%)
Argentina (6.9%)
Republic of Argentina:
Discount Bond, 6.875% due 3/31/23 **.................................. USD 1,950,000 $ 1,123,688 4.7
BOCON Pre 2, 6.0625% due 4/1/01 *** **................................ USD 500,000 375,625 1.6
Par Bond, 5% due 3/31/23 ****......................................... USD 300,000 142,500 0.6
Australia (2.5%)
Australian Government, 7.5% due 7/15/05................................. AUD 950,000 600,394 2.5
Brazil (7.1%)
Republic of Brazil:
Discount Bond, 7.25% due 4/15/24 **................................... USD 1,000,000 571,250 2.4
Par Bond Series YL4, 4.25% due 4/15/24 ****........................... USD 1,000,000 446,250 1.9
C Bond, 4% due 4/15/14 *** ****..................................... USD 894,744 439,543 1.8
Earned Interest Bond, 7.25% due 4/15/06 **............................ USD 400,000 239,500 1.0
Bulgaria (3.5%)
Bulgaria:
Discount Bond Series A, 7.5625% due 7/28/24 - 144A ** *****........... USD 950,000 471,438 2.0
Past Due Interest Bond (IAB), 7.5625% due 7/28/11 **.................. USD 829,186 350,331 1.5
Canada (2.3%)
Canadian Government, 8.75% due 12/1/05.................................. CAD 700,000 537,795 2.3
Denmark (2.9%)
Kingdom of Denmark, 7% due 12/15/04..................................... DKK 4,200,000 700,908 2.9
Ecuador (1.9%)
Ecuador:
Par Bond, 3% due 2/28/25 - EURO ****.................................. USD 1,000,000 325,000 1.4
Discount Bond, 7.25% due 2/28/25 - EURO **............................ USD 250,000 125,000 0.5
France (4.2%)
France O.A.T.:
6% due 10/25/25....................................................... FRF 3,600,000 562,321 2.4
7.5% due 4/25/05...................................................... FRF 2,160,000 441,752 1.8
Germany (4.5%)
Deutschland Republic, 6.25% due 1/4/24.................................. DEM 1,360,000 831,395 3.5
Bundesobligation Series 104, 7% due 12/22/97............................ DEM 310,000 231,923 1.0
Ireland (2.0%)
Irish Gilts, 6.25% due 10/18/04......................................... IEP 350,000 482,239 2.0
Italy (6.9%)
Italian Buoni Poliennali del Tesoro (BTPS):
10.5% due 4/1/00...................................................... ITL 1,100,000,000 632,319 2.6
9.5% due 1/1/05....................................................... ITL 900,000,000 465,644 1.9
Republic of Italy, 5.125% due 7/29/03................................. JPY 43,000,000 574,796 2.4
Mexico (4.0%)
United Mexican States:
Discount Bond Series B, 7.1875% due 12/31/19 **....................... USD 750,000 534,375 2.2
Aztec Bonds, 8.125% due 3/31/08 **.................................... USD 500,000 441,250 1.8
</TABLE>

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

F-63
<PAGE> 199

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE STRATEGIC INCOME FUND
<TABLE>
<CAPTION>
Principal % of Net
Fixed Income Investments Currency Amount Market Value Assets*
------------------------ -------- --------- ------------ --------
<S> <C> <C> <C> <C>
Nigeria (2.9%)
Central Bank of Nigeria:
Par Bond, 6.25% due 11/15/20 **** ******.............................. USD 1,500,000 $ 660,000 2.8
Promissory Notes, 5.092% due 1/5/10................................... USD 100,000 33,875 0.1
Norway (1.7%)
Norwegian Government, 9% due 1/31/99.................................... NOK 2,300,000 397,865 1.7
Philippines (2.6%)
Central Bank of the Philippines:
Par Bond Series B, 5.75% due 12/1/17 ****............................. USD 550,000 398,063 1.7
Debt Conversion Bond Series B, 6.875% due 12/1/09 **.................. USD 250,000 214,063 0.9
Poland (4.7%)
Poland:
Past Due Interest Bond, 3.25% due 10/27/14 - 144A **** *****.......... USD 1,149,000 663,548 2.8
Discount Bond, 7.125% due 10/27/24 - 144A ** *****.................... USD 384,000 293,760 1.2
Par Bond, 2.75% due 10/27/24 - 144A **** *****........................ USD 384,000 165,120 0.7
Par Bond, 2.75% due 10/27/24 - EURO ****.............................. USD 16,000 6,880 0.0
Spain (4.6%)
Kingdom of Spain:
5.75% due 3/23/02..................................................... JPY 42,000,000 585,467 2.5
8.2% due 2/28/09...................................................... ESP 81,000,000 508,550 2.1
Sweden (2.7%)
Swedish Government, 6% due 2/9/05....................................... SEK 6,500,000 636,356 2.7
United States (14.9%)
United States Treasury Note:
7.75% due 11/30/99.................................................... USD 1,330,000 1,418,944 5.9
6.25% due 5/31/00..................................................... USD 1,100,000 1,111,688 4.7
6.875% due 3/31/00.................................................... USD 1,000,000 1,034,688 4.3
Venezuela (2.1%)
Republic of Venezuela, Par Bond Series A, 6.75% due 3/31/20 ******...... USD 1,000,000 502,500 2.1
-----------
Total Government & Government Agency Obligations (cost $20,213,389) 20,278,603
-----------
Sovereign Debt (5.5%)
Morocco (4.1%)
Kingdom of Morocco, Tranche A Loan Agreement, 7.375%
due 1/1/09 **......................................................... USD 1,660,000 977,325 4.1
Russia (1.4%)
Bank for Foreign Economic Affairs (Vnesheconombank)
Loan Agreement ******* ********....................................... USD 1,000,000 325,000 1.4
-----------
Total Sovereign Debt (cost $1,788,146) ...................................... 1,302,325
-----------
Supranational Bond (3.0%)
International Bank of Reconstruction & Development, 4.5%
due 6/20/00 (cost $723,456)............................................. JPY 55,000,000 723,035 3.0
-----------

Corporate Bonds (0.8%)
Brazil (0.8%)
Banco BCN - BCN Leasing, 11% due 6/9/97 - 144A (cost $200,000) *****.... USD 200,000 198,000 0.8
----------- ----
Total Fixed Income Investments (cost $22,924,991)............................ 22,501,963 94.2
----------- ----
</TABLE>

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

F-64

<PAGE> 200
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE STRATEGIC INCOME FUND
<TABLE>
<CAPTION>
Underlying
Nominal % of Net
Options (0.1%) Currency Amount Market Value Assets*
-------------- -------- ---------- ------------ --------
<S> <C> <C> <C> <C>
Japanese Government Bond Call Option, strike 112.50, expires 8/29/95
(cost $14,647).......................................................... JPY 86,000,000 $ 16,948 0.1

Short-Term Investments
Repurchase Agreement (3.4%)
United States (3.4%)
Dated June 30, 1995 with State Street Bank and Trust Company, due
July 3, 1995, for an effective yield of 6.10% collateralized by $605,000
United States Treasury Bond, 9.875% due 11/15/15 (market value of
collateral is $823,436, including accrued interest). (cost $807,137).... 807,137 3.4
----------- -----
Total Investments (cost $23,746,775) *********............................... 23,326,048 97.7
Other Assets and Liabilities................................................. 546,162 2.3
----------- -----

Net Assets................................................................... $23,872,210 100.0
=========== =====
</TABLE>
- ------------

* Percentages indicated are based on net assets of $23,872,210.

******* Underlying loan agreement currently in default.

******** Non-income producing security.

***** Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers.

*** Bond pays stated or additional interest with "payment-in-kind" (PIK)
shares.

** The coupon rate shown on floating rate note represents the rate at
period end.

**** The coupon rate shown on step-up coupon bond represents the rate at
period end.

****** Issued with detachable warrants or value recovery rights. The current
market value of each warrant or right is zero.

********* For Federal income tax purposes, cost is $24,059,166 and appreciation
(depreciation) is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $ 755,631
Unrealized depreciation: (1,488,749)
-----------
Net unrealized depreciation: $ (733,118)
===========
</TABLE>

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

F-65
<PAGE> 201

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE STRATEGIC INCOME FUND

FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
JUNE 30, 1995 (UNAUDITED)

<TABLE>
<CAPTION>
Unrealized
Market Value Contract Delivery Appreciation
(U.S. Dollars) Price Date (Depreciation)
-------------- -------- -------- ------------
<S> <C> <C> <C> <C>
Contracts to Buy:
Australian Dollars.......................................... 92,354 1.37525 07/20/95 $ (2,172)
Australian Dollars.......................................... 447,570 1.37665 07/20/95 (10,062)
Canadian Dollars............................................ 232,931 1.37941 07/19/95 947
Deutsche Marks.............................................. 471,322 1.39152 08/30/95 4,207
Deutsche Marks.............................................. 524,812 1.38962 08/30/95 3,973
Deutsche Marks.............................................. 519,571 1.38952 08/30/95 3,896
Deutsche Marks.............................................. 326,300 1.39646 08/30/95 4,056
French Francs............................................... 303,523 4.86370 09/13/95 256
French Francs............................................... 656,433 4.85112 09/13/95 (1,147)
Japanese Yen................................................ 431,387 83.99700 08/15/95 (1,128)
Japanese Yen................................................ 524,837 83.85500 08/15/95 (2,264)
Japanese Yen................................................ 1,662,378 83.37200 08/15/95 (16,843)
New Zealand Dollars......................................... 467,977 1.50602 07/07/95 3,177
New Zealand Dollars......................................... 491,376 1.50133 07/07/95 1,811
Norwegian Krona............................................. 242,072 6.41200 07/31/95 9,695
Pounds Sterling............................................. 793,903 0.62733 09/13/95 (3,122)
--------- ---------
Total Contracts to Buy (Payable amount $8,193,466).......... 8,188,746 (4,720)
--------- ---------
The value of Contracts to Buy as a Percentage of
Net Assets is 34.30%.

Contracts to Sell:
Australian Dollars.......................................... 856,066 1.35227 07/20/95 35,031
Australian Dollars.......................................... 321,114 1.39958 07/20/95 1,840
Canadian Dollars............................................ 59,325 1.36000 07/19/95 602
Canadian Dollars............................................ 247,489 1.37573 07/19/95 (347)
Danish Kroner............................................... 504,620 5.54360 08/14/95 (13,062)
French Francs............................................... 257,223 4.93700 09/13/95 (4,033)
French Francs............................................... 802,535 4.93200 09/13/95 (11,781)
Irish Punts................................................. 520,885 0.61233 07/31/95 (1,559)
Japanese Yen................................................ 301,603 83.66300 08/15/95 1,996
Japanese Yen................................................ 603,562 84.11500 08/15/95 730
Japanese Yen................................................ 94,993 83.66400 08/15/95 628
Japanese Yen................................................ 849,129 85.13200 08/15/95 (9,129)
New Zealand Dollars......................................... 30,084 1.48876 07/07/95 142
Norwegian Krona............................................. 649,857 6.21000 07/31/95 (5,735)
Pounds Sterling............................................. 307,888 0.62740 10/03/95 1,323
Spanish Pesetas............................................. 541,401 127.23000 08/22/95 (26,270)
Swedish Krona............................................... 653,373 7.33500 10/05/95 0
--------- ---------
Total Contracts to Sell (Receivable amount $7,571,523)...... 7,601,147 (29,624)
--------- ---------

The value of Contracts to Sell as a Percentage of Net
Assets is 31.84%.

Total Open Forward Foreign Currency Contracts, Net.... $ (34,344)
=========
</TABLE>

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

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

F-66

<PAGE> 202
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE GLOBAL GOVERNMENT INCOME FUND
PORTFOLIO OF INVESTMENTS

June 30, 1995 (Unaudited)

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal % of Net
Fixed Income Investments Currency Amount Market Value Assets*
- ------------------------ -------- ------ ------------ -------
<S> <C> <C> <C> <C>
Government & Government Agency Obligations (89.6%)
Australia (4.7%)
Australian Government:
7% due 4/15/00 . . . . . . . . . . . . . . . . . . . . . AUD 400,000 $ 266,827 2.5
10% due 2/15/06 . . . . . . . . . . . . . . . . . . . . . AUD 150,000 111,559 1.0
New South Wales Treasury, 6.50% due 5/1/06 . . . . . . . . AUD 225,000 131,277 1.2
Austria (4.8%)
Republic of Austria, 3.75% due 2/3/09 . . . . . . . . . . . JPY 42,000,000 519,177 4.8
Canada (4.6%)
Canadian Government:
8.5% due 3/1/00 . . . . . . . . . . . . . . . . . . . . . CAD 500,000 377,767 3.5
8.75% due 12/1/05 . . . . . . . . . . . . . . . . . . . . CAD 150,000 115,141 1.1
Denmark (4.6%)
Kingdom of Denmark, 7% due 12/15/04 . . . . . . . . . . . . DKK 3,000,000 500,649 4.6
Finland (2.4%)
Finnish Housing Fund, 10.75% due 3/15/02 . . . . . . . . . FIM 1,000,000 261,565 2.4
France (10.0%)
France O.A.T., 7.5% due 4/25/05 . . . . . . . . . . . . . . FRF 4,772,000 976,437 9.0
French Treasury Bond (BTAN), 7.25% due 8/12/97 . . . . . . FRF 498,000 103,841 1.0
Germany (9.8%)
Bundesobligation Series 104, 7% due 12/22/97 . . . . . . . DEM 720,000 538,399 5.0
Deutschland Republic, 6.25% due 1/4/24 . . . . . . . . . . DEM 860,000 525,735 4.8
Ireland (2.8%)
Irish Gilts, 6.25% due 10/18/04 . . . . . . . . . . . . . . IEP 220,000 302,852 2.8
Italy (5.7%)
Italian Buoni Poliennali del Tesoro (BTPS):
9.5% due 12/1/99 . . . . . . . . . . . . . . . . . . . . ITL 555,000,000 309,531 2.9
9.5% due 1/1/05 . . . . . . . . . . . . . . . . . . . . . ITL 580,000,000 300,082 2.8
Spain (3.8%)
Kingdom of Spain:
12.25% due 3/25/00 . . . . . . . . . . . . . . . . . . . ESP 25,000,000 210,347 1.9
10% due 2/28/05 . . . . . . . . . . . . . . . . . . . . . ESP 27,920,000 208,322 1.9
Sweden (4.8%)
Swedish Government, 10.25% Due 5/5/03 . . . . . . . . . . . SEK 3,900,000 519,126 4.8
United Kingdom (6.7%)
United Kingdom Treasury, 8.5% due 12/7/05 . . . . . . . . . GBP 455,480 726,401 6.7
United States (24.9%)
United States Treasury Note:
8.5% due 11/15/00 . . . . . . . . . . . . . . . . . . . . USD 870,000 968,419 8.9
7.875% due 11/15/04 . . . . . . . . . . . . . . . . . . . USD 830,000 924,152 8.5
6.25% due 5/31/00 . . . . . . . . . . . . . . . . . . . . USD 800,000 809,249 7.5
-----------
Total Government & Government Agency Obligations
(cost $9,540,361) . . . . . . . . . . . . . . . . . . . . . . 9,706,855
-----------
</TABLE>

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

F-67
<PAGE> 203
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE GLOBAL GOVERNMENT INCOME FUND

<TABLE>
<CAPTION>
Principal % of Net
Fixed Income Investments Currency Amount Market Value Assets*
- ------------------------ -------- ------ ------------ -------
<S> <C> <C> <C> <C>
Supranational Bond (4.7%)
International Bank of Reconstruction & Development, 4.75%
due 12/20/04 (cost $509,490). . . . . . . . . . . . . . JPY 37,000,000 $ 506,218 4.7
----------- -----
Total Fixed Income Investments (cost $10,049,851) . . . . . 10,213,073 94.3
----------- -----
<CAPTION>
Underlying
Nominal
Options (0.1%) Amount
- -------------- ------
<S> <C> <C> <C> <C>
Japanese Government Bond Call Option, strike 112.50,
expires 8/29/95 (cost $6,727) . . . . . . . . . . . . . . . JPY 39,500,000 7,784 0.1

<CAPTION>
Principal
Short-Term Investments Amount
- ---------------------- ------
<S> <C> <C> <C> <C>
Treasury Bills (2.4%)
Mexico (2.4%)
Mexican Tesobonos, effective yield 16.02% due 8/3/95
(cost $257,223) . . . . . . . . . . . . . . . . . . . . USD 261,000 257,223 2.4
Repurchase Agreement (1.5%)
United States (1.5%)
Dated June 30, 1995 with State Street Bank and Trust
Company, due July 3, 1995, for an effective yield of
6.10% collateralized by $125,000 United States Treasury
Bond, 9.875% due 11/15/15 (market value of collateral is
$170,131, including accrued interest). (cost $165,028). . 165,028 1.5
----------- -----

Total Short-Term Investments (cost $422,251) . . . . . . . . . 422,251 3.9
----------- -----

Total Investments (cost $10,478,829)** . . . . . . . . . . . . 10,643,108 98.3
----------- -----

Other Assets and Liabilities . . . . . . . . . . . . . . . . . 179,528 1.7
----------- -----

Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . $10,822,636 100.0
=========== =====
</TABLE>

- -----------------
* Percentages indicated are based on net assets of $10,822,636.
** For Federal income tax purposes, cost is $10,478,829 and appreciation
(depreciation) is as follows:

<TABLE>
<S> <C>
Unrealized appreciation: $199,976
Unrealized depreciation: (35,697)
--------

Net unrealized appreciation: $164,279
========
</TABLE>

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

F-68
<PAGE> 204
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE GLOBAL GOVERNMENT INCOME FUND

Forward Foreign Currency Contracts Outstanding
June 30, 1995 (Unaudited)

<TABLE>
<CAPTION>
Unrealized
Market Value Contract Delivery Appreciation
Contracts to Buy: (U.S. Dollars) Price Date (Depreciation)
- ----------------- -------------- ----- ---- --------------
<S> <C> <C> <C> <C>
Australian Dollars . . . . . . . . . . . . . . . . . . . . . . 39,074 1.39198 07/20/95 $ (438)
Australian Dollars . . . . . . . . . . . . . . . . . . . . . . 261,438 1.40174 07/20/95 (1,093)
Australian Dollars . . . . . . . . . . . . . . . . . . . . . . 61,300 1.35930 07/20/95 (2,178)
Canadian Dollars . . . . . . . . . . . . . . . . . . . . . . . 29,116 1.38195 07/19/95 172
Deutsche Marks . . . . . . . . . . . . . . . . . . . . . . . . 532,956 1.38667 08/30/95 2,909
Deutsche Marks . . . . . . . . . . . . . . . . . . . . . . . . 326,300 1.37818 08/30/95 (218)
Deutsche Marks . . . . . . . . . . . . . . . . . . . . . . . . 183,787 1.37690 08/30/95 (294)
French Francs . . . . . . . . . . . . . . . . . . . . . . . . . 432,134 4.85112 09/13/95 (755)
Japanese Yen . . . . . . . . . . . . . . . . . . . . . . . . . 49,574 83.79000 08/15/95 (252)
Japanese Yen . . . . . . . . . . . . . . . . . . . . . . . . . 271,324 83.83400 08/15/95 (1,239)
Japanese Yen . . . . . . . . . . . . . . . . . . . . . . . . . 542,648 83.99700 08/15/95 (1,419)
Japanese Yen . . . . . . . . . . . . . . . . . . . . . . . . . 860,162 83.37200 08/15/95 (8,715)
New Zealand Dollars . . . . . . . . . . . . . . . . . . . . . . 300,842 1.50602 07/07/95 2,042
New Zealand Dollars . . . . . . . . . . . . . . . . . . . . . . 208,584 1.50133 07/07/95 769
New Zealand Dollars . . . . . . . . . . . . . . . . . . . . . . 33,427 1.52590 07/07/95 659
--------- ---------

Total Contracts to Buy (Payable amount $4,142,716) . . . . . . 4,132,666 (10,050)
--------- ---------
</TABLE>

The value of Contracts to Buy as a Percentage of Net Assets is 38.19%.

<TABLE>
<CAPTION>
Contracts to Sell:
- ------------------
<S> <C> <C> <C> <C>
Australian Dollars . . . . . . . . . . . . . . . . . . . . . . 663,540 1.35227 07/20/95 27,152
Australian Dollars . . . . . . . . . . . . . . . . . . . . . . 113,669 1.39958 07/20/95 651
Canadian Dollars . . . . . . . . . . . . . . . . . . . . . . . 206,726 1.37573 07/19/95 (290)
Danish Kroner . . . . . . . . . . . . . . . . . . . . . . . . . 314,809 5.54360 08/14/95 (8,149)
Finnish Marks . . . . . . . . . . . . . . . . . . . . . . . . . 269,371 4.27200 09/28/95 (177)
French Francs . . . . . . . . . . . . . . . . . . . . . . . . . 566,053 5.01650 08/30/95 (17,862)
French Francs . . . . . . . . . . . . . . . . . . . . . . . . . 547,370 4.93200 09/13/95 (8,035)
Irish Punts . . . . . . . . . . . . . . . . . . . . . . . . . . 314,188 0.61691 09/26/95 (2,959)
Japanese Yen . . . . . . . . . . . . . . . . . . . . . . . . . 529,883 82.63000 01/08/00 10,175
Pounds Sterling . . . . . . . . . . . . . . . . . . . . . . . . 182,511 0.62739 10/03/95 788
Spanish Pesetas . . . . . . . . . . . . . . . . . . . . . . . . 214,776 127.23000 08/22/95 (10,422)
Swedish Krona . . . . . . . . . . . . . . . . . . . . . . . . 430,121 7.33500 10/05/95 0
--------- --------
Total Contracts to Sell (Receivable amount $4,343,889) . . . . 4,353,017 (9,128)
--------- --------

The Value of Contracts to Sell as a Percentage of Net Assets is 40.22%.

Total Open Forward Foreign Currency Contracts, Net . . . . $(19,178)
========
</TABLE>

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

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

F-69
<PAGE> 205
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE U.S. GOVERNMENT INCOME FUND

PORTFOLIO OF INVESTMENTS

June 30, 1995 (Unaudited)

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

<TABLE>
<CAPTION>
Principal % of Net
Fixed Income Investments Amount Market Value Assets*
------------------------ --------- ------------ --------
<S> <C> <C> <C>
Government & Government Agency Obligations (52.1%)
United States (52.1%)
United States Treasury Note:
7.625% due 2/15/25................................................................... 550,000 $ 620,640 15.0
6.25% due 5/31/00.................................................................... 500,000 505,781 12.3
Sallie Mae, 7.5% due 3/8/00............................................................ 350,000 371,379 9.0
Federal Home Loan Mortgage Corp., 7.125% due 7/21/99................................... 350,000 363,107 8.8
Federal National Mortgage Association:
7.85% due 9/10/98.................................................................... 100,000 105,134 2.6
6.8% due 1/10/03..................................................................... 90,000 92,282 2.2
Financial Assistance Corp., 9.375% due 7/21/03......................................... 75,000 88,797 2.2
-----------
Total Government & Government Agency Obligations (cost $2,048,874).......................... 2,147,120
-----------
Supranational Bond (7.9%)
United States (7.9%)
International Bank of Reconstruction & Development,
5.25% due 9/16/03 (cost $314,850).................................................... 350,000 327,761 7.9
Corporate Bond (5.2%)
United States (5.2%)
Asian Development Bank, 8% due 4/30/01 (cost $199,086)................................. 200,000 216,519 5.2
----------- -----
Total Fixed Income Investments (cost $2,562,810)............................................ 2,691,400 65.2
----------- -----
<CAPTION>
Short-Term Investments
----------------------
Government & Government Agency Obligation (23.7%)
United States (23.7%)
United States Treasury Bill, effective yield 5.48%, due 11/9/95
(cost $980,059)...................................................................... 1,000,000 980,295 23.7
Repurchase Agreement (9.1%)
United States (9.1%)
Dated June 30, 1995 with State Street Bank and Trust Company, due July
3, 1995, for an effective yield of 6.10% collateralized by $285,000
United States Treasury Bond, 9.875% due 11/15/15 (market value of
collateral is $387,899 including accrued interest). (cost $376,064).................. 376,064 9.1
----------- -----
Total Short-Term Investments (cost $1,356,123).............................................. 1,356,359 32.8
----------- -----
Total Investments (cost $3,918,933)**....................................................... 4,047,759 98.0
Other Assets and Liabilities................................................................ 83,313 2.0
----------- -----

Net Assets.................................................................................. $ 4,131,072 100.0
=========== =====
</TABLE>

- -------------------------
* Percentages indicated are based on net assets of $4,131,072
** For Federal income tax purposes, cost is $3,918,933 and appreciation
(depreciation) is as follows:

<TABLE>
<S> <C>
Unrealized appreciation: $137,768
Unrealized depreciation: (8,942)
--------
Net unrealized appreciation: $128,826
========
</TABLE>

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

F-70

<PAGE> 206
G.T. GLOBAL VARIABLE INVESTMENT FUNDS
G.T. GLOBAL: VARIABLE LATIN AMERICA FUND

PORTFOLIO OF INVESTMENTS
June 30, 1995 (Unaudited)
- -------------------------------------------------------------------------------

<TABLE>
<CAPTION>
% of Net
Equity Investments Country Shares Market Value Assets*
- ------------------ ------- ------ ------------ --------
<S> <C> <C> <C> <C>

Materials/Basic Industries (22.7%)
Hylsamex, S.A. de C.V. -- 144A ADR ** *** + . . . . . . . . . . . MEX 34,400 $ 619,200 3.0
Metals-Steel

Apasco SA de CV *** . . . . . . . . . . . . . . . . . . . . . . . MEX 155,000 616,026 2.9
Cement

Grupo Simec, S.A. de C.V. -- ADR ** *** . . . . . . . . . . . . . MEX 50,000 493,750 2.4
Metals-Steel

Grupo Mexico S.A. "B" . . . . . . . . . . . . . . . . . . . . . . MEX 100,000 488,782 2.3
Metals-Non-Ferrous
Grupo Industrial Durango, S.A. de C.V. "A" -- ADR ** ***. . . . . MEX 54,150 433,200 2.1
Forest Products

Cia de Minas Buenaventura "C" *** . . . . . . . . . . . . . . . . PERU 67,768 390,383 1.9
Gold
Angel Estrada y Cia S.A.. . . . . . . . . . . . . . . . . . . . . ARG 93,000 367,460 1.8
Paper/Packaging
Companhia Siderurgica Nacional S.A.***. . . . . . . . . . . . . . BRZL 16,100,000 367,325 1.8
Metal-Steel
Internacional de Ceramica, S.A. de C.V. "A" -- ADR ** *** . . . . MEX 37,900 298,463 1.4
Building Materials & Components

Cemento Argos S.A. ***. . . . . . . . . . . . . . . . . . . . . . COL 28,375 256,373 1.2
Cement
Caemi Mineracao e Metalurgia S.A. Preferred *** . . . . . . . . . BRZL 2,300,000 201,250 1.0
Metals-Steel
Industrias Penoles S.A. "CP" ***. . . . . . . . . . . . . . . . . MEX 65,000 194,375 0.9
Metals-Non-Ferrous
----------
4,726,587
----------

Finance (20.3%)
- ---------------
First Financial Caribbean Corp. . . . . . . . . . . . . . . . . . US 55,000 811,250 3.9
Other Financial
Banco Bradesco S.A. Preferred . . . . . . . . . . . . . . . . . . BRZL 67,681,950 573,825 2.7
Banks-Money Center
Grupo Financiero Banamex Accival, S.A. de C.V.: . . . . . . . . . MEX -- -- 2.4
Banks-Money Center
"B" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 310,000 476,923 --
"L" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 15,500 23,597 --
Grupo Financiero Bancomer, S.A. de C.V.:. . . . . . . . . . . . . MEX -- -- 2.0
Banks-Money Center
"B" *** . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 1,388,000 407,058 --
"L" *** . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 62,519 16,531 --
Banco LatinoAmericano de Exportaciones, S.A. (Bladex) ** . . . . PN 11,700 387,563 1.9
Other Financial
Administradora de Fondos de Pensiones Provida S.A. -- ADR ** . . CHLE 14,100 378,938 1.8
Other Financial

Banco Nacional S.A. Preferred . . . . . . . . . . . . . . . . . . BRZL 17,366,000 337,882 1.6
Banks-Money Center
Banco Mercantil do Sao Paulo S.A. Preferred . . . . . . . . . . . BRZL 4,728,000 323,765 1.6
Banks-Regional
Banco Ganadero S.A.:. . . . . . . . . . . . . . . . . . . . . . . COL -- -- 1.3
Banks-Money Center
ADR Preferred ** . . . . . . . . . . . . . . . . . . . . . . . -- 11,400 233,700 --
ADR ** . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 1,700 40,800 --
Interbanc *** . . . . . . . . . . . . . . . . . . . . . . . . . . PERU 188,318 221,202 1.1
Banks-Money Center
----------
4,233,034
----------
</TABLE>

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

F-71

<PAGE> 207

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE LATIN AMERICA FUND

<TABLE>
<CAPTION>
% of Net
Equity Investments Country Shares Market Value Assets*
- ------------------ ------- ------ ------------ --------
<S> <C> <C> <C> <C>
Services (16.5%)
- ----------------
CPT Telefonica del Peru:. . . . . . . . . . . . . . . . . . . . . PERU -- $ -- 3.1
Telephone Networks
"B" *** . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 306,649 524,422 --
"A" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 80,000 130,693 --
Telecomunicacoes Brasileiras S.A. (Telebras) Preferred. . . . . . BRZL 14,612,135 481,247 2.3
Telephone Networks
Ceteco Holding N.V. . . . . . . . . . . . . . . . . . . . . . . . NETH 15,000 455,132 2.2
Retailers-Other
Gran Cadena de Almacenes Colombianos S.A.:. . . . . . . . . . . . COL -- -- 2.1
Retailers-Other
144A ADR ** *** + . . . . . . . . . . . . . . . . . . . . . . . -- 20,000 415,000 --
Common ***. . . . . . . . . . . . . . . . . . . . . . . . . . . -- 10,000 19,069 --
Lojas Americanas S.A. Preferred *** . . . . . . . . . . . . . . . BRZL 16,000,000 356,522 1.7
Retailers-Other
Compania de Telecomunicaciones de Chile S.A. -- ADR ** . . . . . CHLE 3,700 301,088 1.4
Telephone Networks

Grupo Fernandez Editores "B" ***. . . . . . . . . . . . . . . . . MEX 639,000 241,673 1.2
Broadcasting & Publishing
Mesbla S.A. Preferred *** . . . . . . . . . . . . . . . . . . . . BRZL 3,339,000 199,614 1.0
Retailers-Other
Grupo Marti S.A.. . . . . . . . . . . . . . . . . . . . . . . . . MEX 218,000 111,795 0.5
Retailers-Other
Casa Anglo Brasil S.A. Preferred ***. . . . . . . . . . . . . . . BRZL 1,138,810 107,692 0.5
Retailers-Other
Grupo Situr, S.A. de C.V. "B" . . . . . . . . . . . . . . . . . . MEX 216,000 103,846 0.5
Leisure & Tourism

----------
3,447,793
----------

Consumer Non-Durables (12.5%)
- -----------------------------
Panamerican Beverages, Inc. "A" ** . . . . . . . . . . . . . . . MEX 23,000 690,000 3.3
Beverages-Non alcoholic
Fomento Economico Mexicano, S.A. de C.V. (Femsa) "B". . . . . . . MEX 197,000 460,929 2.2
Beverages-Alcoholic

Embotelladora Andina S.A. -- ADR ** . . . . . . . . . . . . . . . CHLE 10,000 351,250 1.7
Beverages-Non alcoholic
Industrias J B Duarte S.A. Preferred. . . . . . . . . . . . . . . BRZL 215,600,000 276,530 1.3
Food
Bavaria *** . . . . . . . . . . . . . . . . . . . . . . . . . . . COL 83,906 247,623 1.2
Beverages-Alcoholic
San Juan: . . . . . . . . . . . . . . . . . . . . . . . . . . . . PERU -- -- 1.1
Beverages-Alcoholic
Common. . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 114,471 186,106 --
"T" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 18,624 32,269 --
Tectoy Industria Brinquedos Preferred *** . . . . . . . . . . . . BRZL 224,640,000 134,296 0.6
Toys
Inversiones Aledo *** . . . . . . . . . . . . . . . . . . . . . . VENZ 472,885 128,282 0.6
Food
Ekco S.A. "CP" ***. . . . . . . . . . . . . . . . . . . . . . . . MEX 656,000 114,590 0.5
Household Products

----------
2,621,875
----------
Multi-Industry/Miscellaneous (6.6%)
- -----------------------------------
Grupo Sidek, S.A. de C.V. -- ADR ** ***. . . . . . . . . . . . . MEX 179,400 829,725 4.0
Conglomerate

Alfa, S.A. de C.V.. . . . . . . . . . . . . . . . . . . . . . . . MEX 45,000 547,356 2.6
Conglomerate

----------
1,377,081
----------
</TABLE>

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

F-72

<PAGE> 208

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE LATIN AMERICA FUND

<TABLE>
<CAPTION>
% of Net
Equity Investments Country Shares Market Value Assets*
- ------------------ ------- ------ ------------ --------
<S> <C> <C> <C> <C>
Consumer Durables (3.7%)
- ------------------------
Refrigeracao Parama S.A. Preferred. . . . . . . . . . . . . . . . . . . BRZL 207,512,063 $ 403,746 1.9
Appliances & Household
Brasinca Industrial S.A. Preferred ***. . . . . . . . . . . . . . . . . BRZL 670,500 211,353 1.0
Auto Parts
Brasmotor S.A. Preferred *** . . . . . . . . . . . . . . . . . . . . . BRZL 940,000 173,696 0.8
Appliances & Household
-----------
788,795
-----------

Energy (1.3%)
Industrias Ventane. . . . . . . . . . . . . . . . . . . . . . . . . . . VENZ 714,215 261,560 1.3
Gas Production & Distribution

Capital Goods (1.1%)
Inepar S.A. Preferred . . . . . . . . . . . . . . . . . . . . . . . . . BRZL 172,400,000 234,239 1.1
Industrial Components
----------- -----
Total Equity Investments (cost $18,877,621). . . . . . . . . . . . . . . . 17,690,964 84.7
----------- -----

<CAPTION> No. of
Rights (0.0%) Rights
- ------------- ------
<S> <C> <C> <C> <C>
Banco Bradesco S.A. Preferred Rights, expire 7/13/95 (cost $0) ***. . . BRZL 1,222,201 1,328 0.0
Banks-Money Center

<CAPTION>
Principal
Short-Term Investments Currency Amount
- ---------------------- -------- ---------
<S> <C> <C> <C> <C>
Treasury Bills (11.0%)
- ----------------------
Mexico (11.0%)
- --------------
Mexican Cetes, effective yield 47.69%, due 1/18/96. . . . . . . . . . . MXN 13,738,960 1,738,793 8.3
Mexican Tesobonos, effective yield 21.80%, due 7/13/95. . . . . . . . . USD 555,000 550,997 2.7
----------- -----
Total Short-Term Investments (cost $2,756,647) . . . . . . . . . . . . . . 2,289,790 11.0
----------- -----
Total Investments (cost $21,634,268) ++. . . . . . . . . . . . . . . . . . 19,982,082 95.7
Other Assets and Liabilities . . . . . . . . . . . . . . . . . . . . . . . 888,407 4.3
----------- -----
Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $20,870,489 100.0
=========== =====
</TABLE>

* Percentages indicated are based on net assets of $20,870,489.
** U.S. currency denominated.
*** Non-income producing security.
+ Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
++ For Federal income tax purposes, cost is $21,749,842 and appreciation
(depreciation) is as follows:

<TABLE>
<S> <C>
Unrealized appreciation: $ 1,900,763
Unrealized depreciation: (3,668,523)
------------
Net unrealized depreciation: $(1,767,760)
============
</TABLE>

Abbreviations:
ADR -- American Depository Receipt
GDR -- Global Depository Receipt

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

F-73

<PAGE> 209

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE LATIN AMERICA FUND

The Fund's Portfolio of Investments at June 30, 1995, was concentrated in the
following countries:

- -------------
* Percentages indicated are based on net assets of $20,870,489.

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

F-74

<PAGE> 210
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE GROWTH & INCOME FUND

PORTFOLIO OF INVESTMENTS
June 30, 1995 (Unaudited)

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
% of Net
Equity Investments Country Shares Market Value Assets*
- ------------------ ------- ------ ------------ --------
<S> <C> <C> <C> <C>
Finance (18.1%)
National Australia Bank Ltd...................... AUSL 64,300 $508,366 1.8
Banks-Money Center
Swiss Bank Corp. (Bearer)**...................... SWTZ 1,074 380,706 1.4
Banks-Money Center
Union Bank of Switzerland (Bearer)............... SWTZ 290 300,582 1.1
Banks-Money Center
S.G. Warburg Group PLC........................... UK 24,200 280,371 1.0
Investment Management
Fortis Amev N.V.................................. NETH 5,070 276,575 1.0
Other Financial
AEGON N.V........................................ NETH 7,562 261,668 0.9
Insurance-Life
CS Holding AG -- Registered**.................... SWTZ 2,825 258,938 0.9
Banks-Money Center
Generale de Banque S.A........................... BEL 754 242,345 0.9
Banks-Money Center
Internationale Nederlanden Groep N.V............. NETH 3,995 221,027 0.8
Other Financial
ABN-AMRO Holding N.V............................. NETH -- -- 0.8
Banks-Regional
Common......................................... -- 5,398 208,393 --
Convertible Preferred, 6% til 10/31/03......... -- 55 2,003 --
National Westminster Bank PLC.................... UK 22,700 197,289 0.7
Banks-Money Center
Australia & New Zealand Banking Group Ltd........ AUSL 50,000 177,746 0.6
Banks-Money Center
Dresdner Bank AG................................. GER 4,540 131,356 0.5
Banks-Money Center
Commercial Union PLC............................. UK 13,382 124,499 0.5
Insurance-Multi-Line
General Accident PLC............................. UK 12,300 112,672 0.4
Insurance-Property/Casualty
Ayala Land, Inc. "B"............................. PHIL 93,750 108,498 0.4
Real Estate
Banco Popular Espanol S.A........................ SPN 710 105,576 0.4
Banks-Money Center
MAI PLC:......................................... UK -- -- 0.4
Other Financial
Common......................................... -- 12,400 50,878 --
Convertible Preferred, 5.9% til 12/31/49....... -- 31,196 47,627 --
M & G Group PLC.................................. UK 5,000 84,685 0.3
Investment Management
Hopewell Holdings................................ HK 94,000 79,576 0.3
Real Estate
Henderson Investment Ltd......................... HK 94,000 77,146 0.3
Real Estate
Banco de Santander S.A........................... SPN 1,915 75,540 0.3
Banks-Money Center
Kredietbank N.V.................................. BEL 315 74,549 0.3
Banks-Regional
Sparebanken NOR (Union Bank of Norway)........... NOR 3,000 72,571 0.3
Banks-Regional
Sun Hung Kai Properties Ltd...................... HK 9,400 69,553 0.3
Real Estate
</TABLE>

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

F-75
<PAGE> 211
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE GROWTH & INCOME FUND

<TABLE>
<CAPTION>
% of Net
Equity Investments Country Shares Market Value Assets*
- ------------------ ------- ------ ------------ --------
<S> <C> <C> <C> <C>
Societe Generale Paris........................... FR 475 $ 55,525 0.2
Banks-Money Center
Gerrard & National Holdings PLC.................. UK 7,080 48,416 0.2
Securities Broker
Lloyds Abbey Life PLC............................ UK 7,000 43,527 0.2
Insurance-Life
Sedgwick Group PLC............................... UK 17,000 37,309 0.1
Insurance-Multi-Line
UAP Compagnie.................................... FR 1,316 34,511 0.1
Insurance-Multi-Line
Amoy Properties Ltd.............................. HK 39,000 34,276 0.1
Real Estate
Compagnie Financiere de Paribas S.A.............. FR 524 31,502 0.1
Other Financial
Commerzbank AG................................... GER 130 31,106 0.1
Banks-Money Center
First Tennessee National Corp.................... US 600 27,825 0.1
Banks-Regional
Henderson Land Development Co., Ltd.............. HK 5,000 27,400 0.1
Real Estate
Realty Development Corp., Ltd. "A"............... HK 10,000 26,237 0.1
Real Estate
IKB Deutsche Industriebank AG:................... GER -- -- 0.1
Banks-Regional
Common......................................... -- 100 18,807 --
New**.......................................... -- 22 3,978 --
----------
4,951,154
----------
Energy (10.3%)
Elektrowatt AG................................... SWTZ 1,580 454,370 1.6
Electrical & Gas Utilities
Penn West Petroleum Ltd.**....................... CAN 100,000 446,039 1.6
Oil
Electrabel S.A................................... BEL 1,880 397,327 1.4
Electrical & Gas Utilities
Royal Dutch Petroleum Co......................... NETH 2,678 327,100 1.2
Oil
Reunies Electrobel & Tractebel S.A............... BEL 763 277,033 1.0
Electrical & Gas Utilities
Mobil Corp....................................... US 2,400 230,400 0.8
Oil
Elf Aquitaine.................................... FR 2,720 201,035 0.7
Oil
Groupe Bruxelles Lambert S.A.:................... BEL -- -- 0.5
Oil
Common......................................... -- 1,050 143,818 --
VVPR**......................................... -- 17 2,281 --
Exxon Corp....................................... US 1,700 120,063 0.4
Oil
British Gas PLC.................................. UK 21,000 96,684 0.3
Gas Production & Distribution
Pacific Gas and Electric Co...................... US 2,950 85,550 0.3
Electrical & Gas Utilities
Shell Transport & Trading Co., PLC............... UK 6,530 78,042 0.3
Oil
Union Electrica Fenosa S.A....................... SPN 5,000 23,461 0.1
Electrical & Gas Utilities
Iberdrola S.A.................................... SPN 2,000 15,068 0.1
Electrical & Gas Utilities
Chevron Corp..................................... US 160 7,460 0.0
Oil
----------
2,905,731
----------
</TABLE>

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

F-76
<PAGE> 212

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE GROWTH & INCOME FUND

<TABLE>
<CAPTION>
% of Net
Equity Investments Country Shares Market Value Assets*
- ------------------ ------- ------ ------------ --------
<S> <C> <C> <C> <C>
Services (8.4%)
Telecom Corporation of New Zealand Limited............. NZ -- $ -- 2.2
Telephone Networks
Common-NZD........................................... -- 149,200 558,801 --
Common-AUD........................................... -- 16,960 62,703 --
AT&T Corp.............................................. US 5,500 292,188 1.1
Telephone-Long Distance
Royal PTT Nederland N.V................................ NETH 5,915 212,696 0.8
Telephone Networks
J.C. Penney Co., Inc................................... US 4,020 192,960 0.7
Retailers-Other
McGraw-Hill, Inc....................................... US 2,490 188,929 0.7
Broadcasting & Publishing
Dun & Bradstreet Corp.................................. US 3,300 173,250 0.6
Broadcasting & Publishing
Tele Danmark AS "B".................................... DEN 2,570 143,122 0.5
Telephone Networks
British Telecommunications PLC......................... UK 19,546 121,852 0.4
Telephone Networks
THORN EMI PLC.......................................... UK 5,500 113,884 0.4
Leisure & Tourism
Granada PLC, Convertible Preferred, 7.5% til 4/30/03... UK 23,482 80,290 0.3
Leisure & Tourism
Cathay Pacific Airways................................. HK 36,000 52,577 0.2
Transportation-Airlines
Stet Societa' Finanziaria Telefonica S.p.A............. ITLY 16,000 44,275 0.2
Telephone Networks
Sime Darby Ltd......................................... HK 28,000 30,760 0.1
Wholesale & International Trade
AirTouch Communications, Inc.**........................ US 900 25,650 0.1
Wireless Communications
Pacific Telesis Group.................................. US 900 24,075 0.1
Telephone-Regional/Local
Telecom Italia S.p.A................................... ITLY 4,500 12,205 0.0
Telephone Networks
Mandarin Oriental International Ltd.** ***............. HK 10,000 10,000 0.0
Leisure & Tourism
----------
2,340,217
----------
Materials/Basic Industries (8.3%)
Broken Hill Proprietary Co., Ltd....................... AUSL 44,591 549,105 2.0
Misc. Materials & Components
Amcor Ltd.............................................. AUSL 71,200 525,458 1.9
Paper/Packaging
Solvay S.A. "A"........................................ BEL 751 411,984 1.5
Chemicals
Akzo Nobel N.V......................................... NETH 2,644 316,119 1.1
Chemicals
Monsanto Co............................................ US 3,300 297,413 1.1
Chemicals
RWE AG................................................. GER 480 166,828 0.6
Misc. Materials & Components
BASF AG................................................ GER 100 21,367 0.1
Chemicals
----------
2,288,274
----------
Health Care (7.6%)
Bristol Myers Squibb Co................................ US 26,400 1,798,500 6.5
Pharmaceuticals
Bayer AG............................................... GER 1,250 311,031 1.1
Pharmaceuticals
----------
2,109,531
----------
</TABLE>

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

F-77
<PAGE> 213
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE GROWTH & INCOME FUND

<TABLE>
<CAPTION>
% of Net
Equity Investments Country Shares Market Value Assets*
- ------------------ ------- ------ ------------ --------
<S> <C> <C> <C> <C>
Capital Goods (4.2%)
General Electric PLC................................... UK 51,900 $ 253,392 0.9
Aerospace/Defense
Mannesmann AG**........................................ GER 770 235,317 0.8
Machinery & Engineering
Siemens AG............................................. GER 427 212,033 0.8
Telecom Equipment
Thomson CSF S.A.**..................................... FR 6,550 146,786 0.5
Aerospace/Defense
Rolls-Royce PLC........................................ UK 42,548 118,076 0.4
Aerospace/Defense
Lockheed Martin Corp.**................................ US 1,526 96,329 0.3
Aerospace/Defense
BICC PLC............................................... UK 17,200 81,241 0.3
Industrial Components
Trafalgar House PLC:................................... UK -- -- 0.2
Machinery & Engineering
Convertible Preferred, 6% til 1/31/49................ -- 44,800 52,366 --
Common**............................................. -- 4,800 3,435 --
-----------
1,198,975
-----------

Consumer Non-Durables (3.9%)
Noble China**.......................................... CAN 100,000 360,472 1.3
Beverages-Alcoholic
Philip Morris Cos., Inc................................ US 4,100 304,938 1.1
Food
Brown-Forman Corp. "B"................................. US 6,200 206,925 0.7
Beverages-Alcoholic
Booker PLC............................................. UK 13,800 91,298 0.3
Food
Bass PLC............................................... UK 6,600 63,135 0.2
Beverages-Alcoholic
Associated British Foods Group PLC..................... UK 4,200 44,351 0.2
Food
Dairy Farm International Holdings Ltd.................. HK 36,000 30,960 0.1
Food
-----------
1,102,079
-----------

Consumer Durables (1.1%)
GKN PLC................................................ UK 28,600 291,549 1.1
Auto Parts
Multi-Industry/Miscellaneous (1.0%)
Veba AG................................................ GER 540 212,289 0.8
Conglomerate
Hutchison Whampoa...................................... HK 13,000 62,839 0.2
Conglomerate
-----------
275,128
-----------

Technology (0.6%)
Alcatel Alsthom Compagnie Generale d'Electricite....... FR 1,790 161,194 0.6
Telecom Technology
----------- ----
Total Equity Investments (cost $16,658,677)............... 17,623,832 63.5
----------- ----
</TABLE>

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

F-78

<PAGE> 214

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE GROWTH & INCOME FUND

<TABLE>
<CAPTION>
Principal % of Net
Fixed Income Investments Currency Amount Market Value Assets*
- ------------------------ -------- ----------- ------------ --------
<S> <C> <C> <C> <C>
Government & Government Agency Obligations (28.5%)
Canada (1.0%)
Canadian Government, 8.75% due 12/1/05............................. CAD 380,000 $ 291,690 1.0
Denmark (1.1%)
Kingdom of Denmark, 7% due 12/15/04................................ DKK 1,820,000 304,098 1.1
Germany (11.0%)
Deutschland Republic:
6.75% due 4/22/03................................................ DEM 2,000,000 1,427,414 5.1
6% due 6/20/16................................................... DEM 850,000 515,441 1.9
6.25% due 1/4/24................................................. DEM 670,000 409,585 1.5
Treuhandanstalt:
6.375% due 7/1/99................................................ DEM 500,000 365,823 1.3
7.375% due 12/2/02............................................... DEM 440,000 325,743 1.2
Italy (3.3%)
Republic of Italy, 5.125% due 7/29/03.............................. JPY 50,000,000 668,368 2.4
Buoni Poliennali Del Tesoro (BTPS), 8.5% due 8/1/04................ ITL 520,000,000 252,901 0.9
Netherlands (0.8%)
Netherland Government, 5.75% due 1/15/04........................... NLG 360,000 215,094 0.8
New Zealand (1.0%)
New Zealand Government, 8% due 4/15/04............................. NZD 400,000 274,412 1.0
Sweden (0.7%)
Swedish Government, 6% due 2/9/05.................................. SEK 2,100,000 207,715 0.7
United Kingdom (6.1%)
United Kingdom Treasury:
7.25% due 3/30/98................................................ GBP 465,000 727,718 2.6
6.75% due 11/26/04............................................... GBP 440,000 621,462 2.2
8% due 9/25/09................................................... GBP 235,000 358,428 1.3
United States (3.5%)
United States Treasury Note:
6.25% due 8/15/23................................................ USD 645,000 610,129 2.2
7.25% due 5/15/04................................................ USD 330,000 352,328 1.3
----------
Total Government & Government Agency Obligations (cost $7,182,583)...... 7,928,349
----------
Corporate Bonds (5.4%)
Germany (1.2%)
Commerzbank AG:
Convertible Bond, 7% due 12/31/00+............................... DEM 187,000 192,749 0.7
8% due 6/1/07+................................................... DEM 1,000 743 0.0
Deutsche Bank AG, 9% due 12/31/02.................................. DEM 175,000 147,468 0.5
IKB Deutsche Industriebank, 6.45% due 3/31/06...................... DEM 1,500 1,012 0.0
Switzerland (0.1%)
Elektrowatt AG, 3% due 4/29/04..................................... CHF 28,000 21,128 0.1
United Kingdom (3.2%)
Daily Mail & General Trust:
Convertible Bond, 5.75% due 9/26/03.............................. GBP 86,000 158,480 0.6
Convertible Bond, 8.75% due 9/27/05.............................. GBP 56,000 149,618 0.5
</TABLE>

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

F-79

<PAGE> 215
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE GROWTH & INCOME FUND

<TABLE>
<CAPTION>
Principal % of Net
Fixed Income Investments Currency Amount Market Value Assets*
- ------------------------ -------- ----------- ------------ --------
<S> <C> <C> <C> <C>
Land Securities PLC:
Convertible Bond, 9.375% due 7/31/04......................................... GBP 140,000 $ 242,824 0.9
Convertible Bond, 7% due 9/30/08............................................. GBP 10,000 16,380 0.1
S.G. Warburg Group PLC, Convertible Bond, 6.5% due 8/4/08 (Bearer)............. GBP 90,000 140,983 0.5
Elf Enterprises Finance PLC, 8.75% due 6/27/06................................. GBP 65,000 101,821 0.4
Reckitt & Colman Capital, Convertible Bond, 9.5% due 3/31/05................... GBP 22,000 54,230 0.2
United States (0.9%)
Siemens Capital Corp., 8% due 6/24/02 (Issued with warrants)................... USD 180,000 248,400 0.9
-----------
Total Corporate Bonds (cost $1,596,981)............................................. 1,475,836
----------- -----
Total Fixed Income Investments (cost $8,779,564).................................... 9,404,185 33.9
----------- -----
</TABLE>

<TABLE>
<CAPTION>
No. of
Warrants (0.2%) Country Warrants
- --------------- ------- --------
<S> <C> <C> <C> <C>
Deutsche Bank AG Warrants, expire 6/30/95**...................................... GER 350 36,076 0.2
Banks-Money Center
Elektrowatt AG Warrants, expire 4/28/97**........................................ SWTZ 140 2,919 0.0
Electrical & Gas Utilities
Henderson Investment Warrants, expire 3/31/96**.................................. HK 9,400 668 0.0
Investment Management
Groupe Bruxelles Lambert S.A. Warrants, expire 12/20/98**........................ BEL 51 551 0.0
Oil
Commerzbank AG Warrants, expire 12/10/99**....................................... GER 6 102 0.0
Banks-Money Center
----------- -----
Total Warrants (cost $35,103)....................................................... 40,316 0.2
----------- -----

Short-Term Investments
Repurchase Agreement (1.4%)
United States (1.4%)
Dated June 30, 1995 with State Street Bank and Trust Company, due July
3, 1995, for an effective yield of 6.10% collateralized by $290,000
United States Treasury Bond, 9.875% due 11/15/15 (market value of
collateral is $394,704 including accrued interest).
(cost $381,065).............................................................. 381,065 1.4
----------- -----
Total Investments (cost $25,854,409)++.............................................. 27,449,398 99.0
Other Assets and Liabilities........................................................ 286,806 1.0
----------- -----
Net Assets.......................................................................... $27,736,204 100.0
=========== =====
</TABLE>

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

* Percentages indicated are based on net assets of $27,736,204.
** Non-income producing security.
*** U.S. currency denominated.
+ The coupon rate shown on floating rate note represents the rate at period
end.
++ For Federal income tax purposes, cost is $25,885,766 and appreciation
(depreciation) is as follows:

<TABLE>
<S> <C>
Unrealized appreciation: $2,493,520
Unrealized depreciation: (929,888)
----------
Net unrealized appreciation: $1,563,632
==========
</TABLE>

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

F-80
<PAGE> 216

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE GROWTH & INCOME FUND

The Fund's Portfolio of Investments at June 30, 1995, was concentrated in the
following countries:

<TABLE>
<CAPTION>
Percentage of Net Assets*
----------------------------------------------
Fixed Income,
Rights & Short-Term
Country (Country Code/Currency Code) Equity Warrants & Other Total
------------------------------------ ------ ------------- ---------- -----
<S> <C> <C> <C> <C>
Australia (AUSL/AUD)..................... 6.3 6.3
Belgium (BEL/BEF)........................ 5.6 5.6
Canada (CAN/CAD)......................... 2.9 1.0 3.9
Denmark (DEN/DKK)........................ 0.5 1.1 1.6
France (FR/FRF).......................... 2.2 2.2
Germany (GER/DEM)........................ 4.9 12.4 17.3
Hong Kong (HK/HKD)....................... 1.8 1.8
Italy (ITLY/ITL)......................... 0.2 3.3 3.5
Netherlands (NETH/NLG)................... 6.6 0.8 7.4
New Zealand (NZ/NZD)..................... 2.2 1.0 3.2
Norway (NOR/NOK)......................... 0.3 0.3
Philippines (PHIL/PHP)................... 0.4 0.4
Spain (SPN/ESP).......................... 0.9 0.9
Sweden (SWDN/SEK)........................ 0.7 0.7
Switzerland (SWTZ/CHF)................... 5.0 0.1 5.1
United Kingdom (UK/GBP).................. 9.1 9.3 18.4
United States (US/USD)................... 14.6 4.4 2.4 21.4
---- ---- --- -----
Total.................................... 63.5 34.1 2.4 100.0
==== ==== === =====
</TABLE>

- -------------------------
* Percentages indicated are based on net assets of $27,736,204.

===========================================================================

FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
JUNE 30, 1995 (UNAUDITED)

<TABLE>
<CAPTION>
Unrealized
Market Value Contract Delivery Appreciation
(U.S. Dollars) Price Date (Depreciation)
-------------- -------- -------- --------------
Contracts to Sell:
- ------------------
<S> <C> <C> <C> <C>
Deutsche Marks............................................................ 1,075,230 1.43800 07/25/95 $ (42,546)
Deutsche Marks............................................................ 1,558,986 1.43286 08/30/95 (58,492)
French Francs............................................................. 341,916 4.95000 08/04/95 (6,562)
French Francs............................................................. 180,624 4.96615 08/16/95 (3,988)
Japanese Yen.............................................................. 148,332 82.00000 08/10/95 4,107
Japanese Yen.............................................................. 243,917 85.61500 08/31/95 (4,473)
Netherland Guilders....................................................... 647,124 1.59740 08/15/95 (21,106)
Netherland Guilders....................................................... 1,035,398 1.60070 08/15/95 (35,835)
Swiss Francs.............................................................. 1,064,201 1.20510 08/17/95 (51,837)
--------- ---------
Total Contracts to Sell (Receivable amount $6,074,996).................... 6,295,728 (220,732)
--------- ---------
The Value of Contracts to Sell as a Percentage of Net Assets is 22.70%.

Total Open Forward Foreign Currency Contracts, Net......................................................... $(220,732)
=========
</TABLE>

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

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

F-81

<PAGE> 217
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE TELECOMMUNICATIONS FUND

PORTFOLIO OF INVESTMENTS

June 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
% of Net
Equity Investments Country Shares Market Value Assets*
------------------ ------- ---------- ------------ --------
<S> <C> <C> <C> <C>
Services (47.4%)
WorldCom, Inc. **.......................................... US 65,144 $ 1,758,888 4.0
Telephone-Long Distance
Stet Di Risp .............................................. ITLY 757,000 1,682,737 3.9
Telephone Networks
Call-Net Enterprises, Inc. "B" **.......................... CAN 233,000 1,569,509 3.6
Telephone-Long Distance
Telefonica de Espana -- ADR *** ........................... SPN 40,000 1,550,000 3.6
Telephone Networks
Centennial Cellular Corp. "A" **........................... US 71,500 1,197,625 2.8
Wireless Communications
DDI Corp. ................................................. JPN 143 1,147,510 2.6
Wireless Communications
IntelCom Group, Inc ** .................................... US 125,000 1,117,188 2.6
Telephone-Regional/Local
PriCellular Corp. "A" ..................................... US 118,500 1,096,125 2.5
Wireless Communications
Tele Danmark AS -- ADR ***................................. DEN 31,000 868,000 2.0
Telephone Networks
British Telecommunications PLC -- ADR ***.................. UK 13,100 822,025 1.9
Telephone-Long Distance
Tele-Communications, Inc. "A" **........................... US 35,000 820,313 1.9
Cable Television
Royal PTT Nederland N.V ................................... NETH 22,000 791,091 1.8
Telephone Networks
PT Indonesia Satellite (Indosat) -- ADR ** ***............. INDO 20,000 765,000 1.8
Telephone-Long Distance
Century Telephone Enterprises, Inc. ....................... US 25,500 723,563 1.7
Telephone-Regional/Local
Philippine Long Distance Telephone Co. -- ADR *** ......... PHIL 10,000 717,500 1.6
Telephone-Long Distance
Telecomunicacoes Brasileiras S.A. (Telebras) Preferred..... BRZL 20,876,150 687,552 1.6
Telephone Networks
Paging Network, Inc. ...................................... US 17,500 599,375 1.4
Wireless Communications
Telecom Argentina S.A. -- ADR *** ......................... ARG 10,000 455,000 1.0
Telephone Networks
Nynex CableComms Group -- ADR ***.......................... UK 20,000 405,000 0.9
Cable Television
United International Holdings, Inc. "A" **................. US 20,000 335,000 0.8
Cable Television
Pakistan Telecommunications Co., Ltd. -- 144A GDR *** +.... PAK 3,300 328,350 0.8
Telephone Networks
MobileMedia Corp. ......................................... US 15,000 307,500 0.7
Wireless Communications
Associated Group, Inc.: ................................... US -- -- 0.6
Cable Television
"B" **................................................... -- 6,500 120,250 --
"A" **................................................... -- 6,500 112,125 --
Grupo Iusacell, S.A. de C.V. "D" -- ADR ** ***............. MEX 22,000 231,000 0.5
Wireless Communications
Matav (Hungarian Telecommunications Co., Ltd.) ............ HGRY 1,000 182,986 0.4
Telephone Networks
Telephone and Data Systems, Inc. .......................... US 4,200 152,775 0.4
Wireless Communications
</TABLE>

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

F-82

<PAGE> 218

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE TELECOMMUNICATIONS FUND

<TABLE>
<CAPTION>
% of Net
Equity Investments Country Shares Market Value Assets*
------------------ ------- ---------- ------------ --------
<S> <C> <C> <C> <C>
Star Paging (International Holding) Ltd. Warrants, expire 12/31/96 **... HK 200,000 $ 1,809 0.0
Wireless Communications
------------
20,545,796
------------
Capital Goods (22.2%)
Nokia AB Preferred -- ADR*** ........................................... FIN 37,000 2,206,125 5.1
Telecom Equipment
Mannesmann AG **........................................................ GER 6,740 2,059,783 4.7
Machinery & Engineering
CellStar Corp **........................................................ US 55,000 1,285,625 3.0
Wholesale & International Trade
BroadBand Technologies, Inc **.......................................... US 50,000 1,237,500 2.8
Telecom Equipment
Glenayre Technologies, Inc **........................................... US 19,500 994,500 2.3
Telecom Equipment
DSC Communications Corp **.............................................. US 20,000 930,000 2.1
Telecom Equipment
Newbridge Networks Corp **.............................................. CAN 19,000 669,750 1.5
Telecom Equipment
Champion Technology Holdings ........................................... HK 1,889,849 170,976 0.4
Telecom Equipment
EchoStar Communications Corp. "A" ...................................... US 10,000 152,500 0.3
Telecom Equipment
-----------
9,706,759
-----------
Technology (18.1%)
Three-Five Systems, Inc **.............................................. US 61,800 2,124,375 4.9
Telecom Technology
DSP Communications, Inc **.............................................. US 70,000 1,452,500 3.3
Telecom Technology
Cisco Systems, Inc **................................................... US 26,000 1,314,625 3.0
Networking
Spectrian Corp **....................................................... US 28,000 1,113,000 2.6
Telecom Technology
Benefon OY **........................................................... FIN 25,000 948,700 2.2
Telecom Equipment
Dialogic Corp **........................................................ US 52,000 923,000 2.1
Telecom Technology
-----------
7,876,200
-----------
Materials/Basic Industries (1.4%)
PT Bakrie and Brothers **............................................... INDO 200,000 610,961 1.4
Building Materials & Components

Consumer Durables (0.1%)
Audiovox Corp. "A" **................................................... US 6,000 30,000 0.1
Consumer Electronics
Consumer Non-Durables (0.0%)

Bavaria **.............................................................. COL 3,150 9,296 0.0
Beverages-Alcoholic
----------- ----
Total Equity Investments (cost $33,159,520) ............................... 38,779,012 89.2
----------- ----

</TABLE>

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

F-83

<PAGE> 219
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE TELECOMMUNICATIONS FUND

<TABLE>
<CAPTION>
% of Net
Short-Term Investments Market Value Assets*
---------------------- ------------ --------
<S> <C> <C>
Repurchase Agreement (7.5%)
United States (7.5%)
Dated June 30, 1995 with State Street Bank and Trust Company, due
July 3, 1995, for an effective yield of 6.10% collateralized by
$2,440,000 United States Treasury Bond, 9.875% due 11/15/15
(market value of collateral is $3,320,961 including accrued
interest). (cost $3,254,551)........................................... $ 3,254,551 7.5
----------- -----
Total Investment (cost $36,414,071) ++........................................ 42,033,563 96.7
Other Assets and Liabilities.................................................. 1,443,396 3.3
----------- -----
Net Assets.................................................................... $43,476,959 100.0
=========== =====
</TABLE>

- ----------------
* Percentages indicated are based on net assets of $43,476,959.
** Non-income producing security.
*** U.S. currency denominated.
+ Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
++ For Federal income tax purposes, cost is $36,446,176 and appreciation
(depreciation) is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $7,155,259
Unrealized depreciation: (1,567,872)
----------
Net unrealized appreciation: $5,587,387
==========
</TABLE>

Abbreviations:
ADR -- American Depository Receipt
GDR -- Global Depository Receipt

================================================================================
The Fund's Portfolio of Investments at June 30, 1995, was concentrated in the
following countries:
<TABLE>
<CAPTION>

Percentage of Net Assets*
----------------------------
Short-Term
Country (Country Code/Currency Code) Equity & Other Total
------------------------------------ ------ ---------- -----
<S> <C> <C> <C>
Argentina (ARG/ARS)..................... 1.0 1.0
Brazil (BRZL/BRL)....................... 1.6 1.6
Canada (CAN/CAD)........................ 5.1 5.1
Denmark (DEN/DKK)....................... 2.0 2.0
Finland (FIN/FIM)....................... 7.3 7.3
Germany (GER/DEM)....................... 4.7 4.7
Hong Kong (HK/HKD)...................... 0.4 0.4
Hungary (HGRY/HUF)...................... 0.4 0.4
Indonesia (INDO/IDR).................... 3.2 3.2
Italy (ITLY/ITL)........................ 3.9 3.9
Japan (JPN/JPY)......................... 2.6 2.6
Mexico (MEX/MXN)........................ 0.5 0.5
Netherlands (NETH/NLG).................. 1.8 1.8
Pakistan (PAK/PKR)...................... 0.8 0.8
Philippines (PHIL/PHP).................. 1.6 1.6
Spain (SPN/ESP)......................... 3.6 3.6
United Kingdom (UK/GBP)................. 2.8 2.8
United States (US/USD).................. 45.9 10.8 56.7
---- ---- -----
Total................................... 89.2 10.8 100.0
==== ==== =====
</TABLE>

- ----------------
* Percentages indicated are based on net assets of $43,476,959.

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

F-84

<PAGE> 220
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE TELECOMMUNICATIONS FUND

FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING

JUNE 30, 1995 (UNAUDITED)

<TABLE>
<CAPTION>
Unrealized
Market Value Contract Delivery Appreciation
(U.S. Dollars) Price Date (Depreciation)
-------------- ----------- -------- --------------
<S> <C> <C> <C> <C>
Contracts to Sell:
- ------------------
Deutsche Marks ........................................................ 101,368 1.43800 07/25/95 $ (4,011)
Deutsche Marks ........................................................ 1,050,344 1.37248 08/03/95 6,141
Deutsche Marks ........................................................ 36,256 1.43286 08/30/95 (1,360)
Italian Lira .......................................................... 855,353 1,664.24992 08/16/95 (9,662)
Japanese Yen .......................................................... 129,346 82.00000 08/10/95 3,581
Japanese Yen .......................................................... 196,323 85.61500 08/31/95 (3,600)
Netherland Guilders ................................................... 258,849 1.59740 08/15/95 (8,443)
Netherland Guilders ................................................... 388,274 1.60070 08/15/95 (13,438)
-------------- --------
Total Contracts to Sell (Receivable amount $2,985,321)................. 3,016,113 (30,792)
-------------- --------
The Value of Contracts to Sell as a Percentage of Net Assets is 6.94%

Total Open Forward Foreign Currency Contracts, Net........................................................ $(30,792)
========
</TABLE>
- ----------------
See Note 1 to the financial statements.

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

F-85

<PAGE> 221
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE EMERGING MARKETS FUND

PORTFOLIO OF INVESTMENTS

June 30, 1995 (Unaudited)

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

<TABLE>
<CAPTION>
% of Net
Equity Investments Country Shares Market Value Assets*
- ------------------ -------- ---------- ------------ --------
<S> <C> <C> <C> <C>
Finance (31.2%)
Peregrine Investment Holdings Ltd. . . . . . . . . . . . . . HK 305,000 $ 433,614 5.5
Securities Broker
Banco LatinoAmericano de Exportaciones, S.A. (Bladex)** . . . PN 11,600 384,250 4.8
Other Financial
First Financial Caribbean Corp. . . . . . . . . . . . . . . . US 18,700 275,825 3.5
Other Financial
Dhana Siam Finance & Securities Co., Ltd. (Foreign) . . . . . THAI 42,000 248,511 3.1
Investment Management
Administradora de Fondos de Pensiones Provida S.A.-- ADR**. . CHLE 8,000 215,000 2.7
Other Financial
Robinson's Land Corp. "B"*** . . . . . . . . . . . . . . . . PHIL 1,505,000 206,635 2.6
Real Estate
Espirito Santo Financial Holding S.A.-- ADR** . . . . . . . . LUX 17,400 202,275 2.6
Banks-Money Center
Banco Ganadero S.A.-- ADR** . . . . . . . . . . . . . . . . COL 8,000 192,000 2.4
Banks-Money Center
Bangkok Bank Co., Ltd. (Foreign) . . . . . . . . . . . . . . THAI 17,000 187,396 2.4
Banks-Money Center
Israel Land Development Co., Ltd.-- ADR** . . . . . . . . . ISRL 15,000 127,500 1.6
Investment Management
-----------
2,473,006
-----------
Services (17.1%)
Ceteco Holding N.V. . . . . . . . . . . . . . . . . . . . . NETH 9,000 273,079 3.4
Retailers-Other
Resorts World Bhd. . . . . . . . . . . . . . . . . . . . . . MAL 32,000 187,733 2.4
Leisure & Tourism
Dickson Concepts International Ltd. . . . . . . . . . . . . HK 271,000 161,991 2.1
Retailers-Apparel
Wo Kee Hong Holdings Ltd. . . . . . . . . . . . . . . . . . HK 658,000 153,077 1.9
Retailers-Other
Pakistan Telecommunications Co., Ltd.-- 144A GDR** **** . . . PAK 1,500 149,250 1.9
Telephone Networks
Robinson & Co., Ltd. . . . . . . . . . . . . . . . . . . . . SING 36,000 148,175 1.9
Retailers-Apparel
Keppel Corp., Ltd. . . . . . . . . . . . . . . . . . . . . . SING 18,000 146,886 1.9
Transportation-Shipping
Petersburg Long Distance, Inc.** *** . . . . . . . . . . . . RUS 22,000 129,250 1.6
Telephone-Long Distance
-----------
1,349,441
-----------
Consumer Non-Durables (15.8%)
Panamerican Beverages, Inc. "A"** . . . . . . . . . . . . . MEX 9,600 288,000 3.7
Beverages-Non alcoholic
Noble China*** . . . . . . . . . . . . . . . . . . . . . . . CAN 72,300 260,621 3.3
Beverages-Alcoholic
Cervecer Backus & Johnston "T" . . . . . . . . . . . . . . . PERU 100,000 236,724 3.0
Beverages-Alcoholic
</TABLE>

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

F-86
<PAGE> 222
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE EMERGING MARKETS FUND

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

<TABLE>
<CAPTION>
% of Net
Equity Investments Country Shares Market Value Assets*
- ------------------ ------- ----------- ------------ --------
<S> <C> <C> <C> <C>
Embotelladora Lima S.A.-- Trabejo*** .................. PERU 107,853 $ 224,734 2.8
Beverages-Non alcoholic
Rothmans Industries.................................... SING 30,000 163,207 2.1
Tobacco
Tectoy Industria Brinquedos Preferred***............... BRZL 119,600,000 71,500 0.9
Toys
-----------
1,244,786
-----------
Multi-Industry/Miscellaneous (12.8%)
Grupo Sidek, S.A. de C.V.-- ADR** ***.................. MEX 56,300 260,388 3.3
Conglomerate
Mirgor S.A.C.I.F.I.A.-- 144A GDR** *** ****............ ARG 85,000 170,000 2.2
Miscellaneous
Sime Darby Bhd. ....................................... MAL 36,000 100,431 1.3
Miscellaneous
Harvard Investment Co. Growth Fund..................... CZCH 4,833 97,820 1.2
Country Funds
Grasim Industries Ltd.-- GDR Tranche 2** ***........... IND 4,000 95,520 1.2
Miscellaneous
Mahindra & Mahindra Ltd.-- GDR**....................... IND 8,000 93,040 1.2
Miscellaneous
Pakistan Investment Fund, Inc. ........................ US 12,900 87,075 1.1
Country Funds
Czeske Energeticke Zavody (CEZ AS)***.................. CZCH 1,500 54,567 0.7
Miscellaneous
Harvardsky Dividendovy Investment Fund***.............. CZCH 2,500 48,375 0.6
Country Funds
-----------
1,007,216
-----------
Materials/Basic Industries (12.6%)
Paranapanema S.A. Min., Ind. E Construacao Preferred*** BRZL 21,600,000 397,957 5.0
Metals-Non-Ferrous
Malaysia Mining Corp., Bhd. ........................... MAL 149,000 270,187 3.4
Metals-Non-Ferrous
Cementos Paz del Rio S.A.-- 144A ADR** *** ****........ COL 14,400 237,600 3.0
Cement
Venezolana de Pulpa Y Papel-- 144A GDR** ****.......... VENZ 56,000 77,000 1.0
Forest Products
Indo Gulf Fertilizer & Chemical-- GDR** ***............ IND 7,500 15,000 0.2
Chemicals
-----------
997,744
-----------
Consumer Durables (6.5%)
Singer Co. N.V.** ..................................... HK 9,000 232,875 2.9
Appliances & Household
Marco Polo S.A. Preferred "B"***....................... BRZL 1,100,000 185,302 2.3
Auto Parts
Tata Engineering and Locomotive Co. Ltd.-- GDR** ***... IND 5,000 99,350 1.3
Automobiles
-----------
517,527
-----------
Health Care (3.2%)
PT Darya Varia Laboratoria***......................... INDO 56,000 251,572 3.2
Pharmaceuticals -----------
</TABLE>

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

F-87
<PAGE> 223
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE EMERGING MARKETS FUND

- -----------------------
* Percentages indicated are based on net assets of $7,901,028.
** U.S. currency denominated.
*** Non-income producing security.
**** Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
+ For Federal income tax purposes, cost is $7,973,976 and appreciation
(depreciation) is as follows:

<TABLE>
<S> <C>
Unrealized appreciation: $ 502,382
Unrealized depreciation: (439,316)
----------
Net unrealized appreciation: $ 63,066
==========
</TABLE>

Abbreviations:
ADR -- American Depository Receipt
GDR -- Global Depository Receipt

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

F-88
<PAGE> 224
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE EMERGING MARKETS FUND

The Fund's Portfolio of Investments at June 30, 1995, was concentrated in the
following countries:

<TABLE>
<CAPTION>
Percentage of Net Assets*
----------------------------
Short-Term
Country (Country Code/Currency Code) Equity & Other Total
----------------------------------- ------ ---------- -----
<S> <C> <C> <C>
Argentina (ARG/ARS) ................................ 2.2 2.2
Brazil (BRZL/BRL) .................................. 8.2 8.2
Canada (CAN/CAD) ................................... 3.3 3.3
Chile (CHLE/CLP) ................................... 2.7 2.7
Colombia (COL/COP) ................................. 5.4 5.4
Czech Republic (CZCH/CSK) .......................... 2.7 2.7
Hong Kong (HK/HKD) ................................. 12.4 12.4
India (IND/INR) .................................... 5.2 5.2
Indonesia (INDO/IDR) ............................... 3.2 3.2
Israel (ISRL/ILS) .................................. 1.6 1.6
Luxembourg (LUX/ECU) ............................... 2.6 2.6
Malaysia (MAL/MYR) ................................. 7.1 7.1
Mexico (MEX/MXN) ................................... 7.0 7.0
Netherlands (NETH/NLG) ............................. 3.4 3.4
Pakistan (PAK/PKR) ................................. 1.9 1.9
Panama (PN/PND) .................................... 4.8 4.8
Peru (PERU/PES) .................................... 5.8 5.8
Philippines (PHIL/PHP) ............................. 2.6 2.6
Russia (RUS/SUR) ................................... 1.6 1.6
Singapore (SING/SGD) ............................... 5.9 5.9
Thailand (THAI/THB) ................................ 5.5 5.5
United States (US/USD) ............................. 4.6 (1.7) 2.9
Venezuela (VENZ/VEB) ............................... 2.0 2.0
----- ---- -----
Total .............................................. 101.7 (1.7) 100.0
===== ==== =====
</TABLE>

- -----------------------
* Percentages indicated are based on net assets of $7,901,028.

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

F-89
<PAGE> 225
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE INFRASTRUCTURE FUND

PORTFOLIO OF INVESTMENTS

June 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
% of Net
Equity Investments Country Shares Market Value Assets*
------------------ ------- ------ ------------ --------
<S> <C> <C> <C> <C>
Energy (25.0%)
ASEA AB "B" Free ............................................. SWDN 200 $ 17,002 3.0
Electrical & Gas Utilities
Korea Electric Power Corp. -- ADR **.......................... KOR 700 15,838 2.8
Electrical & Gas Utilities
Chilegener S.A. -- ADR **..................................... CHLE 500 15,812 2.7
Electrical & Gas Utilities
Empresa Nacional de Electridad S.A. -- ADR **................. SPN 300 14,775 2.6
Electrical & Gas Utilities
Edison S.p.A ................................................. ITLY 3,200 14,285 2.5
Electrical & Gas Utilities
EVN Energie-Versorgung Niederoesterreich AG .................. ASTRI 100 13,977 2.4
Electrical & Gas Utilities
Capex S.A. ***................................................ ARG 1,700 13,179 2.3
Electrical & Gas Utilities
Companhia Energetica de Minas Gerais (Cemig) -- ADR ** ***.... BRZL 589 11,633 2.0
Electrical & Gas Utilities
Enron Global Power & Pipelines L.L.C ......................... US 400 9,500 1.7
Electrical & Gas Utilities
MetroGas S.A. -- ADR ** ***................................... ARG 700 6,038 1.0
Electrical & Gas Utilities
Compania Boliviana de Energia Electrica **.................... BOL 200 5,950 1.0
Electrical & Gas Utilities
Consolidated Electric Power Asia ............................. HK 2,000 4,640 0.8
Electrical & Gas Utilities
Powergen PLC -- ADR ** ***.................................... UK 100 1,213 0.2
Electrical & Gas Utilities
-------
143,842
-------
Capital Goods (22.6%)
Nokia AB Preferred -- ADR **.................................. FIN 400 23,850 4.2
Telecom Equipment
Mannesmann AG ***............................................. GER 60 18,336 3.2
Machinery & Engineering
Allgon AB "B" Free ........................................... SWDN 700 16,658 2.9
Telecom Equipment
Caterpillar, Inc ............................................. US 200 12,850 2.2
Machinery & Engineering
United Engineers Ltd ......................................... MAL 2,000 12,718 2.2
Construction
BroadBand Technologies, Inc. ***.............................. US 500 12,375 2.2
Telecom Equipment
Acme-Cleveland Corp .......................................... US 500 11,812 2.1
Machine Tools
Fluor Corp ................................................... US 200 10,400 1.8
Construction
Hopewell Holdings ............................................ HK 5,000 4,233 0.7
Construction
E.R.G. Ltd ................................................... AUSL 3,000 3,071 0.5
Electrical Plant/Equipment
AES China Generating Co., Ltd. "A" ***........................ HK 200 2,050 0.4
Electrical Plant/Equipment
</TABLE>

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

F-90

<PAGE> 226
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE INFRASTRUCTURE FUND
<TABLE>
<CAPTION>
% of Net
Equity Investments Country Shares Market Value Assets*
- ------------------ ------- ------ ------------ --------
<S> <C> <C> <C> <C>
Harbin Power Equipment Co., Ltd. -- 144A *** +................ CHNA 4,000 $ 1,279 0.2
Electrical Plant/Equipment
--------
129,632
--------
Services (22.5%)
WorldCom, Inc. ***............................................ US 600 16,200 2.8
Telephone-Long Distance
DDI Corp ..................................................... JPN 2 16,049 2.8
Wireless Communications
Telefonica de Espana -- ADR **................................ SPN 400 15,500 2.7
Telephone Networks
PT Indonesia Satellite (Indosat) -- ADR ** ***................ INDO 400 15,300 2.7
Telephone-Long Distance
Philippine Long Distance Telephone Co. -- ADR **.............. PHIL 200 14,350 2.5
Telephone-Long Distance
Stet Di Risp ................................................. ITLY 5,800 12,893 2.2
Telephone Networks
RailTex, Inc. ***............................................. US 500 11,875 2.0
Transportation-Road & Rail
ABC Rail Products Corp. ***................................... US 500 11,500 2.0
Transportation-Road & Rail
International Container Terminal Services (ICTS) ***.......... PHIL 7,025 4,892 0.9
Transportation-Shipping
Pakistan Telecommunications Co., Ltd. -- 144A GDR ** +........ PAK 40 3,980 0.7
Telephone Networks
Philippino Telephone -- New .................................. PHIL 4,100 3,217 0.6
Wireless Communications
PST Vans, Inc ................................................ US 300 1,894 0.3
Transportation-Road & Rail
PriCellular Corp. "A" ........................................ US 200 1,850 0.3
Wireless Communications
--------
129,500
--------
Materials/Basic Industries (16.6%)
Giant Cement Holding, Inc. ***................................ US 1,300 15,925 2.8
Cement
Lone Star Industries, Inc .................................... US 600 12,900 2.2
Cement
Siam Cement Co., Ltd. (Foreign) .............................. THAI 200 12,774 2.2
Cement
PT Bakrie and Brothers ***.................................... INDO 4,000 12,219 2.1
Building Materials & Components
Grupo Simec, S.A. de C.V. -- ADR ** ***....................... MEX 1,100 10,863 1.9
Metals-Steel
La Cementos Nacional, C.A. -- 144A GDR ** +................... ECDR 40 9,200 1.6
Cement
Hylsamex, S.A. de C.V. -- 144A ADR ** *** +................... MEX 500 9,000 1.6
Metals-Steel
Cementos Paz del Rio S.A. -- 144A ADR ** *** +................ COL 400 6,600 1.1
Cement
PT Semen Cibinong (Foreign) .................................. INDO 2,000 6,289 1.1
Cement
--------
95,770
--------
</TABLE>

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

F-91

<PAGE> 227
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE INFRASTRUCTURE FUND
<TABLE>
<CAPTION>
% of Net
Equity Investments Country Shares Market Value Assets*
- ------------------ ------- ------ ------------ --------
<S> <C> <C> <C> <C>
Technology (6.1%)
Three-Five Systems, Inc. ***.............................................. US 600 $ 20,625 3.6
Telecom Technology
DSP Communications, Inc. ***.............................................. US 700 14,525 2.5
Telecom Technology
--------
35,150
--------
Multi-Industry/Miscellaneous (2.0%)
General Electric Co....................................................... US 200 11,275 2.0
Conglomerate
-------- -----
Total Equity Investments (cost $518,496)..................................... 545,169 94.8
-------- -----

Short-Term Investments

Repurchase Agreement (2.1%)
United States (2.1%)
Dated June 30, 1995 with State Street Bank and Trust Company, due
July 3, 1995, for an effective yield of 6.10% collateralized by
$10,000 United States Treasury Bond, 9.875% due 11/15/15 (market
value of collateral is $13,610, including accrued interest).
(cost $12,002)........................................................ 12,002 2.1
-------- -----
Total Investments (cost $530,498) ++......................................... 557,171 96.9
Other Assets and Liabilities................................................. 18,062 3.1
-------- -----
Net Assets................................................................... $575,233 100.0
======== =====
</TABLE>
- ----------------
* Percentages indicated are based on net assets of $575,233.
** U.S. currency denominated.
*** Non-income producing security.
+ Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
++ For Federal income tax purposes, cost is $530,498 and appreciation
(depreciation) is as follows:

<TABLE>
<S> <C>
Unrealized appreciation: $ 36,864
Unrealized depreciation: (10,191)
--------
Net unrealized appreciation: $ 26,673
========
</TABLE>

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

F-92

<PAGE> 228

G.T. GLOBAL: VARIABLE INFRASTRUCTURE FUND

The Fund's Portfolio of Investments at June 30, 1995, was concentrated in the
following countries:

<TABLE>
<CAPTION>
Percentage of Net Assets*
---------------------------
Short-Term
Country (Country Code/Currency Code) Equity & Other Total
------------------------------------ ------ ---------- -----
<S> <C> <C> <C>
Argentina (ARG/ARS) ................... 3.3 3.3
Australia (AUSL/AUD) .................. 0.5 0.5
Austria (ASTRI/ATS) ................... 2.4 2.4
Bolivia (BOL/BOL) ..................... 1.0 1.0
Brazil (BRZL/BRL) ..................... 2.0 2.0
Chile (CHLE/CLP) ...................... 2.7 2.7
China (CHNA/RMB) ...................... 0.2 0.2
Colombia (COL/COP) .................... 1.1 1.1
Ecuador (ECDR/ECS) .................... 1.6 1.6
Finland (FIN/FIM) ..................... 4.2 4.2
Germany (GER/DEM) ..................... 3.2 3.2
Hong Kong (HK/HKD) .................... 1.9 1.9
Indonesia (INDO/IDR) .................. 5.9 5.9
Italy (ITLY/ITL) ...................... 4.7 4.7
Japan (JPN/JPY) ....................... 2.8 2.8
Korea (KOR/KRW) ....................... 2.8 2.8
Malaysia (MAL/MYR) .................... 2.2 2.2
Mexico (MEX/MXN) ...................... 3.5 3.5
Pakistan (PAK/PKR) .................... 0.7 0.7
Philippines (PHIL/PHP)................. 4.0 4.0
Spain (SPN/ESP) ....................... 5.3 5.3
Sweden (SWDN/SEK) ..................... 5.9 5.9
Thailand (THAI/THB) ................... 2.2 2.2
United Kingdom (UK/GBP)................ 0.2 0.2
United States (US/USD)................. 30.5 5.2 35.7
---- --- -----
Total ................................. 94.8 5.2 100.0
==== === =====
</TABLE>

- ----------------
* Percentages indicated are based on net assets of $575,233.

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

F-93

<PAGE> 229
G.T. GLOBAL VARIABLE INVESTMENT FUNDS
G.T. GLOBAL: VARIABLE NATURAL RESOURCES FUND

PORTFOLIO OF INVESTMENTS
June 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
% of Net
Equity Investments Country Shares Market Value Assets*
- ------------------ ------- ------ ------------ --------
<S> <C> <C> <C> <C>
Materials/Basic Industries (48.0%)
- ----------------------------------
Agrium, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . CAN 650 $ 22,008 3.8
Chemicals
Dow Chemical Co.. . . . . . . . . . . . . . . . . . . . . . . . US 300 21,563 3.7
Chemicals
J&L Specialty Steel, Inc. **. . . . . . . . . . . . . . . . . . US 1,100 21,175 3.7
Metals-Steel
Cabot Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . US 400 21,100 3.7
Chemicals
Cytec Industries, Inc. ** . . . . . . . . . . . . . . . . . . . US 500 20,438 3.5
Chemicals
Rainy River Forest Products, Inc. **. . . . . . . . . . . . . . CAN 2,000 20,208 3.5
Forest Products
Mississippi Chemical Corp.. . . . . . . . . . . . . . . . . . . US 1,000 19,938 3.5
Chemicals
Cambior, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . CAN 1,600 19,808 3.5
Gold
St Laurent Paperboard, Inc. **. . . . . . . . . . . . . . . . . CAN 1,300 19,526 3.4
Forest Products
Easco, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . US 1,500 18,375 3.2
Misc. Materials & Components
Asarco, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . US 430 13,115 2.3
Metals-Non-Ferrous
Reynolds Metals Co. . . . . . . . . . . . . . . . . . . . . . . US 250 12,938 2.3
Metals-Non-Ferrous
Mo Och Domsjoe AB "B" Free. . . . . . . . . . . . . . . . . . . SWDN 200 11,541 2.0
Forest Products
Kimmene Oy. . . . . . . . . . . . . . . . . . . . . . . . . . . FIN 300 9,346 1.6
Forest Products
Anglovaal Ltd. "N". . . . . . . . . . . . . . . . . . . . . . . SAFR 260 8,940 1.6
Metals-Non-Ferrous
Broken Hill Proprietary Co., Ltd. . . . . . . . . . . . . . . . AUSL 700 8,620 1.5
Misc. Materials & Components
Acacia Resources Ltd. **. . . . . . . . . . . . . . . . . . . . AUSL 4,000 7,053 1.2
Gold
--------
275,692
--------
Energy (35.5%)
- --------------
Total Compagnie Francaise des Petroles S.A. -- ADR +. . . . . . FR 1,200 36,300 6.3
Oil
Repsol S.A. -- ADR +. . . . . . . . . . . . . . . . . . . . . . SPN 1,100 34,788 6.0
Oil

Shell Transport & Trading Co., PLC: . . . . . . . . . . . . . . UK -- -- 4.0
Oil
ADR+. . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 200 14,475 --
Common. . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 700 8,366 --
British Petroleum Co., PLC -- ADR + . . . . . . . . . . . . . . UK 250 21,406 3.7
Oil
Saga Petroleum AS "A" . . . . . . . . . . . . . . . . . . . . . NOR 1,400 19,888 3.4
Oil
Anadarko Petroleum Corp.. . . . . . . . . . . . . . . . . . . . US 460 19,838 3.4
Oil
</TABLE>

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

F-94
<PAGE> 230

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE NATURAL RESOURCES FUND

<TABLE>
<CAPTION>
% of Net
Equity Investments Country Shares Market Value Assets*
- ------------------ ------- ------ ------------ --------
<S> <C> <C> <C> <C>
Mobil Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . US 200 $ 19,200 3.3
Oil
Norsk Hydro AS -- ADR + . . . . . . . . . . . . . . . . . . . . . . . . . . NOR 450 18,788 3.3
Oil
Northstar Energy Corp. ** . . . . . . . . . . . . . . . . . . . . . . . . . CAN 1,500 12,152 2.1
Gas Production & Distribution
---------
205,201
---------

Consumer Non-Durables (6.2%)

IBP, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . US 500 21,750 3.8
Food
Pioneer Hi-Bred International, Inc. . . . . . . . . . . . . . . . . . . . . US 335 14,070 2.4
Food
---------
35,820
---------

Capital Goods (3.6%)

Harnischfeger Industries, Inc.. . . . . . . . . . . . . . . . . . . . . . . US 600 20,775 3.6
Machinery & Engineering
--------- -----
Total Equity Investments (cost $519,564) . . . . . . . . . . . . . . . . . . . 537,488 93.3
--------- -----

<CAPTION>
Principal
Short-Term Investments Currency Amount
- ---------------------- -------- ---------
<S> <C> <C> <C> <C>
Repurchase Agreement (21.4%)
- ----------------------------
United States (21.4%)
---------------------
Dated June 30, 1995 with State Street Bank and Trust Company, due July
3, 1995, for an effective yield of 6.10% collateralized by $95,000
United States Treasury Bond, 9.675% due 11/15/15 (market value of
collateral is $129,300, including accrued interest). (cost $123,021). . 123,021 21.4
Commercial Paper -- Discounted (20.7%)
- --------------------------------------
United States (20.7%)
---------------------
Federal National Mortgage Association, effective yield

5.85% due 8/7/95 (cost $119,283). . . . . . . . . . . . . . . . . . . . USD 120,000 119,283 20.7

Treasury Bill (1.4%)
- --------------------
Mexico (1.4%)
-------------
Mexican Tesobonos, effective yield 25.02% due
7/27/95 (cost $7,858) . . . . . . . . . . . . . . . . . . . . . . . . . USD 8,000 7,858 1.4
--------- -----
Total Short-Term Investments (cost $250,162) . . . . . . . . . . . . . . . . . 250,162 43.5
--------- -----
Total Investments (cost $769,726) ++ . . . . . . . . . . . . . . . . . . . . . 787,650 136.8
--------- -----
Other Assets and Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . (211,941) (36.8)
--------- -----
Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 575,709 100.0
========= =====
</TABLE>

- -------------
* Percentages indicated are based on net assets of $575,709.
** Non-income producing security.
+ U.S. currency denominated.
++ For Federal income tax purposes, cost is $769,726 and appreciation
(depreciation) is as follows:

<TABLE>
<S> <C>
Unrealized appreciation: $25,588
Unrealized depreciation: (7,664)
-------
Net unrealized appreciation: $17,924
=======
</TABLE>

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

F-95

<PAGE> 231

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE NATURAL RESOURCES FUND

The Fund's Portfolio of Investments at June 30, 1995 was concentrated in the
following countries:

<TABLE>
<CAPTION>
Percentage of Net Assets *
-----------------------------
Short-Term
Country (Country Code/Currency Code) Equity & Other Total
------------------------------------ ------ ---------- -----
<S> <C> <C> <C>
Australia (AUSL/AUD).................................. 2.7 2.7
Canada (CAN/CAD)...................................... 16.3 16.3
Finland (FIN/FIM)..................................... 1.6 1.6
France (FR/FRF)....................................... 6.3 6.3
Mexico (MEX/MXN)...................................... 1.4 1.4
Norway (NOR/NOK)...................................... 6.7 6.7
South Africa (SAFR/ZAR)............................... 1.6 1.6
Spain (SPN/ESP)....................................... 6.0 6.0
Sweden (SWDN/SEK)..................................... 2.0 2.0
United Kingdom (UK/GBP)............................... 7.7 7.7
United States (US/USD)................................ 42.4 5.3 47.7
---- --- -----
Total................................................. 93.3 6.7 100.0
==== === =====
</TABLE>

- ------------
* Percentages indicated are based on net assets of $575,709.

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

F-96
<PAGE> 232
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE AMERICA FUND
PORTFOLIO OF INVESTMENTS

June 30, 1995 (Unaudited)

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

<TABLE>
<CAPTION>
% of Net
Equity Investments Shares Market Value Assets*
- ------------------ ------ ------------ -------
<S> <C> <C> <C>
Technology (30.0%)
Integrated Device Technology, Inc. ** . . . . . . . . . . . . . . . . . 21,900 $ 1,012,875 3.0
Semiconductors
Micron Technology, Inc. . . . . . . . . . . . . . . . . . . . . . . . . 18,400 1,009,700 3.0
Semiconductors
LAM Research Corp. ** . . . . . . . . . . . . . . . . . . . . . . . . . 15,400 985,600 2.9
Semiconductors
Applied Materials, Inc. ** . . . . . . . . . . . . . . . . . . . . . . 11,000 952,875 2.8
Semiconductors
Cabletron Systems, Inc. ** . . . . . . . . . . . . . . . . . . . . . . 17,600 937,200 2.7
Networking
National Semiconductor Corp. ** . . . . . . . . . . . . . . . . . . . . 27,900 774,225 2.3
Semiconductors
BMC Software, Inc. ** . . . . . . . . . . . . . . . . . . . . . . . . . 9,700 749,325 2.2
Software
Cirrus Logic, Inc. ** . . . . . . . . . . . . . . . . . . . . . . . . . 11,600 727,175 2.1
Semiconductors
Seagate Technology, Inc. ** . . . . . . . . . . . . . . . . . . . . . . 15,700 616,225 1.8
Computers & Peripherals
Compuware Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,400 565,800 1.7
Software
Dallas Semiconductor Corp. . . . . . . . . . . . . . . . . . . . . . . 23,700 485,850 1.4
Semiconductors
Lattice Semiconductor Corp. ** . . . . . . . . . . . . . . . . . . . . 13,400 460,625 1.4
Semiconductors
Cisco Systems, Inc. ** . . . . . . . . . . . . . . . . . . . . . . . . 8,800 444,950 1.3
Networking
Western Digital Corp **. . . . . . . . . . . . . . . . . . . . . . . . 16,500 286,688 0.8
Computers & Peripherals
Excalibur Technologies Corp.: . . . . . . . . . . . . . . . . . . . . . -- -- 0.3
Software
Common -- Restricted ** + . . . . . . . . . . . . . . . . . . . . . . 11,000 88,000 --
Common ** . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000 16,000 --
Chipcom Corp. ** . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,200 99,750 0.3
Computer & Peripherals
-----------
10,212,863
-----------

Services (14.5%)
AnnTaylor Stores, Inc. ** . . . . . . . . . . . . . . . . . . . . . . . 37,400 869,550 2.6
Retailers-Apparel
Michaels Stores, Inc. ** . . . . . . . . . . . . . . . . . . . . . . . 40,900 869,125 2.5
Retailers-Other
Sports Authority, Inc. ** . . . . . . . . . . . . . . . . . . . . . . . 33,200 676,450 2.0
Retailers-Other
Kelly Services, Inc. "A" . . . . . . . . . . . . . . . . . . . . . . . 22,800 587,100 1.7
Business & Public Services
United Video Satellite Group, Inc. "A" . . . . . . . . . . . . . . . . 19,700 574,663 1.7
Cable Television
Proffitt's, Inc. ** . . . . . . . . . . . . . . . . . . . . . . . . . . 13,100 389,725 1.1
Retailers-Other
Savoy Pictures Entertainment, Inc. . . . . . . . . . . . . . . . . . . 37,200 339,450 1.0
Leisure & Tourism
Rio Hotel and Casino, Inc. ** . . . . . . . . . . . . . . . . . . . . . 21,500 295,625 0.9
Leisure & Tourism
Friedman's, Inc. "A" ** . . . . . . . . . . . . . . . . . . . . . . . . 12,500 237,500 0.7
Retailers-Other
</TABLE>

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

F-97
<PAGE> 233
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE AMERICA FUND

<TABLE>
<CAPTION>
% of Net
Equity Investments Shares Market Value Assets*
- ------------------ ------ ------------ -------
<S> <C> <C> <C>
Buckle, Inc. ** . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,600 $ 118,750 0.3
Retailers-Apparel
-----------
4,957,938
-----------
Finance (12.8%)
- ---------------
H&R Block, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,500 760,813 2.2
Consumer Finance
Equity Inns, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,000 645,238 1.9
Real Estate Investment Trust
KeyCorp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,200 602,400 1.8
Banks-Regional
Leader Financial Corp. . . . . . . . . . . . . . . . . . . . . . . . . 17,600 499,400 1.5
Savings&Loans
ADVANTA Corp. "B" . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,200 498,300 1.5
Consumer Finance
Signet Banking Corp. . . . . . . . . . . . . . . . . . . . . . . . . . 22,600 494,375 1.4
Banks-Regional
RFS Hotel Investors, Inc. . . . . . . . . . . . . . . . . . . . . . . . 28,900 440,550 1.3
Real Estate Investment Trust
Mid-America Apartment Communities, Inc. . . . . . . . . . . . . . . . . 9,100 227,500 0.7
Real Estate Investment Trust
Trans Financial Bancorp, Inc. . . . . . . . . . . . . . . . . . . . . . 10,100 154,025 0.4
Banks-Regional
Capitol American Financial Corp. . . . . . . . . . . . . . . . . . . . 1,400 31,850 0.1
Insurance-Multi-Line
-----------
4,354,451
-----------
Consumer Non-Durables (7.1%)
- ----------------------------
V F Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,900 639,618 1.9
Textiles & Apparel
Haggar Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,500 575,250 1.7
Textiles & Apparel
Premark International, Inc. . . . . . . . . . . . . . . . . . . . . . . 10,700 555,063 1.6
Household Products
Jones Apparel Group, Inc. ** . . . . . . . . . . . . . . . . . . . . . 14,300 427,213 1.3
Textiles & Apparel
Varsity Spirit Corp. . . . . . . . . . . . . . . . . . . . . . . . . . 14,850 211,613 0.6
Textiles & Apparel
-----------
2,408,757
-----------
Health Care (5.3%)
- ------------------
Coventry Corp. ** . . . . . . . . . . . . . . . . . . . . . . . . . . . 57,700 815,013 2.4
Health Care Services
Health Systems International, Inc. "A" ** . . . . . . . . . . . . . . . 20,000 580,000 1.7
Health Care Services
Abaxis, Inc. ** . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,400 275,800 0.8
Medical Technology & Supplies
GranCare, Inc. ** . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,400 135,450 0.4
Health Care Services
-----------
1,806,263
-----------
Capital Goods (1.5%)
- --------------------
Eaton Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,900 517,313 1.5
Industrial Components

Materials/Basic Industries (1.2%)
- ---------------------------------
Georgia Gulf Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . 12,700 414,338 1.2
Chemicals
</TABLE>

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

F-98
<PAGE> 234
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE AMERICA FUND

<TABLE>
<CAPTION>
% of Net
Equity Investments Shares Market Value Assets*
- ------------------ ------ ------------ -------
<S> <C> <C> <C>
Consumer Durables (1.2%)
Syratech Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,900 $ 237,038 0.7
Appliances & Household
Lifetime Hoan Corp. ** . . . . . . . . . . . . . . . . . . . . . . . . 14,300 160,875 0.5
Appliances & Household
-----------
397,913
----------- -----
Total Equity Investments (cost $20,370,204) . . . . . . . . . . . . . . . 25,069,836 73.6
----------- -----

<CAPTION>
Principal
Amount
------
<S> <C> <C> <C>
Short-Term Investments
Commercial Paper -- Discounted (20.2%)
United States (20.2%)
Federal National Mortgage Association, effective yield
5.84% due 8/7/95 . . . . . . . . . . . . . . . . . . . . . . . . . 4,880,000 4,850,860 14.3
Federal Home Loan Bank, effective yield 6.07% due 7/3/95 . . . . . . 2,000,000 1,999,326 5.9
-----------
Total Commercial Paper -- Discounted (cost $6,850,186) . . . . . . . . . 6,850,186
-----------
Repurchase Agreement(7.8%)
United States (7.8%)
Dated June 30, 1995 with State Street Bank and Trust Company, due
July 3, 1995, for an effective yield of 6.10% collateralized by
$2,000,000 United States Treasury Bond, 9.875% due 11/15/15
(market value of collateral is $2,722,100, including accrued
interest). (cost $2,662,451) . . . . . . . . . . . . . . . . . . . 2,662,451 7.8
----------- -----
Total Short-Term Investments (cost $9,512,637) . . . . . . . . . . . . . 9,512,637 28.0
----------- -----
Total Investments (cost $29,882,841)++ . . . . . . . . . . . . . . . . . 34,582,473 101.6
Other Assets and Liabilities . . . . . . . . . . . . . . . . . . . . . . (530,379) (1.6)
----------- -----
Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $34,052,094 100.0
=========== =====
</TABLE>

- -----------------
* Percentages indicated are based on net assets of $34,052,094.
** Non-income producing security.
+ Restricted securities -- At June 30, 1995, the Fund owned the following
restricted security constituting 0.3% of net assets which may not be publicly
sold without registration under the Securities Act of 1933 (Note 1).
Additional information on the restricted security is as follows:

<TABLE>
<CAPTION>
Market Value
Acquistion Per Share at
Date Shares Cost 6/30/95
---------- ------ ------- ------------
<S> <C> <C> <C> <C>
Excalibur Technologies Corp. . . . . . . . . . . . . . . . . 4/19/94 11,000 $88,000 $8.00
</TABLE>
++ For Federal income tax purposes, cost is $29,897,182 and appreciation
(depreciation) of securities is as follows:

<TABLE>
<S> <C>
Unrealized appreciation: $4,990,123
Unrealized depreciation: (304,832)
----------
Net unrealized appreciation: $4,685,291
==========
</TABLE>

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

F-99
<PAGE> 235
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE NEW PACIFIC FUND

PORTFOLIO OF INVESTMENTS

June 30, 1995 (Unaudited)

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

<TABLE>
<CAPTION>
% of Net
Fixed Income Investments Country Shares Market Value Assets*
- ------------------------ -------- --------- ------------ --------
<S> <C> <C> <C> <C>
Finance (37.5%)
TA Enterprise Bhd....................................... MAL 170,000 $ 585,846 2.9
Investment Management
Phatra Thanakit Co., Ltd. (Foreign)..................... THAI 67,500 563,526 2.8
Investment Management
Peregrine Investment Holdings Ltd....................... HK 350,000 497,590 2.5
Securities Broker
National Australia Bank Ltd............................. AUSL 60,200 475,950 2.3
Banks-Money Center
Land and House Co., Ltd. (Foreign)...................... THAI 20,900 440,446 2.2
Real Estate
DCB Holdings Bhd.**..................................... MAL 150,000 440,000 2.2
Banks-Regional
Land & General Bhd...................................... MAL 130,000 434,667 2.1
Real Estate
United Overseas Bank Ltd. (Foreign)..................... SING 46,000 434,646 2.1
Banks-Money Center
Kay Hian James Capel Holdings Ltd. (Foreign)............ SING 357,000 431,875 2.1
Securities Broker
Thai Farmers Bank, Ltd. (Foreign)....................... THAI 45,000 430,395 2.1
Banks-Regional
Westpac Banking Corp., Ltd.:............................ AUSL -- -- 2.1
Banks-Regional
Common................................................ -- 110,000 398,080 --
Convertible Preferred, 6.5 till 6/30/98............... -- 2,800 14,771 --
HSBC Holdings PLC....................................... HK 30,000 384,824 1.9
Banks-Money Center
Ayala Land, Inc. "B".................................... PHIL 312,500 361,661 1.8
Real Estate
Development Bank of Singapore (Foreign)................. SING 30,000 341,446 1.7
Banks-Money Center
Bangkok Bank Co., Ltd. (Foreign)........................ THAI 30,000 330,699 1.6
Banks-Money Center
Siam Commercial Bank PLC (Foreign)...................... THAI 25,000 239,108 1.2
Banks-Money Center
PT Lippo Bank (Foreign)................................. INDO 120,000 211,590 1.0
Banks-Money Center
Siam City Bank Ltd. (Foreign)........................... THAI 140,000 192,908 1.0
Banks-Regional
Hang Seng Bank.......................................... HK 16,030 122,235 0.6
Banks-Money Center
Bank of East Asia, Ltd.................................. HK 38,161 114,918 0.6
Banks-Money Center
PT Bank Bali (Foreign).................................. INDO 40,000 101,527 0.5
Banks-Money Center
Cheung Kong (Holdings) Ltd.............................. HK 10,000 49,501 0.2
Real Estate
----------
7,598,209
----------
Materials/Basic Industries (14.5%)
PT Semen Gresik (Foreign)............................... INDO 91,000 611,164 3.0
Cement
</TABLE>

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

F-100
<PAGE> 236
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE NEW PACIFIC FUND

<TABLE>
<CAPTION>
% of Net
Equity Investments Country Shares Market Value Assets*
- ------------------ ------- --------- ------------ --------
<S> <C> <C> <C> <C>
TPI Polene Co., Ltd. (Foreign).......................... THAI 55,375 $ 377,021 1.9
Chemicals
Carter Holt Harvey Ltd.................................. NZ 150,000 367,175 1.8
Forest Products
Western Mining Corporation Holdings Ltd................. AUSL 66,000 363,669 1.8
Metals-Non-Ferrous
PT Barito Pacific Timber (Foreign)...................... INDO 245,000 352,201 1.7
Forest Products
Siam Cement Co., Ltd. (Foreign)......................... THAI 5,000 319,352 1.6
Cement
Broken Hill Proprietary Co., Ltd........................ AUSL 20,566 253,255 1.3
Misc. Materials & Components
Royal Ceramic Industry (Foreign)**...................... THAI 100,000 241,135 1.2
Building Materials & Components
PT Ekadharma Tape Industries............................ INDO 66,000 47,439 0.2
Chemicals
----------
2,932,411
----------
Services (12.7%)
Telecom Corporation of New Zealand Ltd.................. NZ 100,000 374,532 1.8
Telephone Networks
Mandarin Oriental International Ltd.+ **................ HK 370,000 370,000 1.8
Leisure & Tourism
International Container Terminal Services (ICTS)**...... PHIL 437,500 304,654 1.5
Transportation-Shipping
PT Modern Photo Film Co.**.............................. INDO 50,000 271,788 1.3
Retailers-Other
Overseas Union Enterprise Ltd........................... SING 40,000 244,810 1.2
Leisure & Tourism
News Corp., Ltd......................................... AUSL 40,180 224,539 1.1
Broadcasting & Publishing
Apollo Enterprises Ltd.................................. SING 200,000 191,840 0.9
Leisure & Tourism
Matichon Newspaper Group (Foreign)...................... THAI 30,000 154,407 0.8
Broadcasting & Publishing
AAPC Ltd................................................ AUSL 235,500 110,508 0.5
Leisure & Tourism
Philippine Long Distance Telephone Co. -- ADR+.......... PHIL 1,500 107,625 0.5
Telephone-Long Distance
Ito-Yokado Co., Ltd..................................... JPN 2,000 105,499 0.5
Retailers-Other
News Corp., Ltd. Preferred.............................. AUSL 20,039 99,305 0.5
Broadcasting & Publishing
Ten Allied Co........................................... JPN 3,600 60,751 0.3
Restaurants
----------
2,620,258
----------
Multi-Industry/Miscellaneous (11.1%)
First Pacific Co., Ltd.**............................... HK 570,000 504,633 2.5
Conglomerate
India Growth Fund, Inc.................................. US 25,000 459,375 2.3
Country Funds
Straits Steamship Land Ltd.............................. SING 120,000 415,748 2.1
Conglomerate
Hutchison Whampoa....................................... HK 80,000 386,698 1.9
Conglomerate
Korea Fund, Inc.+ **.................................... KOR 12,500 245,313 1.2
Country Funds
</TABLE>

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

F-101
<PAGE> 237
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE NEW PACIFIC FUND

<TABLE>
<CAPTION>
% of Net
Equity Investments Currency Shares Market Value Assets*
- ------------------ -------- --------- ------------ --------
<S> <C> <C> <C> <C>
Taiwan Fund, Inc........................................ TWN 10,000 $ 218,750 1.1
Country Funds
----------
2,230,517
----------
Consumer Durables (7.6%)
Samsung Electronics Co.:................................ KOR -- -- 2.2
Consumer Electronics
GDR................................................... -- 7,000 364,000 --
New-GDR Non-voting+................................... -- 1,385 69,859 --
New-144A GDR+ ** ***.................................. -- 290 20,880 --
New-GDR Voting........................................ -- 57 3,981 --
Edaran Otomobil Nasional Bhd............................ MAL 40,000 390,564 1.9
Automobiles
Johnson Electric Holdings**............................. HK 140,000 282,269 1.4
Auto Parts
PT Astra International (Foreign)........................ INDO 118,800 210,809 1.0
Auto Parts
Hyundai Motor Co. -- 144A GDR+ ** ***................... KOR 8,000 160,000 0.8
Automobiles
Singer Thailand Ltd.:................................... THAI -- -- 0.3
Appliances & Household
Foreign............................................... -- 3,600 31,514 --
Common................................................ -- 1,400 11,461 --
Mr. Max................................................. JPN 300 6,160 0.0
Appliances & Household
----------
1,551,497
----------
Capital Goods (4.3%)
E.R.G. Ltd.............................................. AUSL 320,000 327,622 1.6
Electrical Plant/Equipment
United Engineers Ltd.................................... MAL 42,000 267,077 1.3
Construction
International Engineering PLC (Foreign)................. THAI 24,000 179,939 0.9
Telecom Equipment
PT United Tractors (Foreign)............................ INDO 50,000 106,694 0.5
Machinery & Engineering
----------
881,332
----------
Technology (3.1%)
Varitronix International Ltd............................ HK 250,000 437,814 2.2
Computers & Peripherals
Hosiden Electronics..................................... JPN 10,000 105,027 0.5
Computers & Peripherals
Kyocera Corp............................................ JPN 1,000 82,370 0.4
Semiconductors
----------
625,211
----------
Energy (2.1%)
Oil Search Ltd.......................................... AUSL 560,000 418,059 2.1
Oil
Consumer Non-Durables (1.5%)
Seafresh Industry (Foreign)**........................... THAI 35,000 167,376 0.8
Food
Reliance Industries Ltd. -- 144A GDR+ ** ***............ IND 8,000 143,040 0.7
Textiles & Apparel
----------
310,416
----------
</TABLE>

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

F-102

<PAGE> 238
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE NEW PACIFIC FUND

<TABLE>
<CAPTION>
% of Net
Equity Investments Currency Shares Market Value Assets*
- ------------------ -------- --------- ------------ --------
<S> <C> <C> <C> <C>
Health Care (1.3%)
PT Dankos Laboratories (Foreign)............................................. INDO 69,750 $ 222,473 1.1
Pharmaceuticals
Sankyo Co., Ltd.............................................................. JPN 2,000 46,495 0.2
Pharmaceuticals
-----------
268,968
----------- -----
Total Equity Investments (cost $19,594,557)..................................... 19,436,878 95.7
----------- -----
</TABLE>

<TABLE>
<CAPTION>
Principal
Fixed Income Investments Currency Amount
- ------------------------ -------- ---------
<S> <C> <C> <C> <C>
Corporate Bonds (1.1%)
United States (1.1%)
Acer Inc., Convertible Bond, 4% due 6/10/01 (cost $139,600)................ USD 80,000 219,600 1.1
</TABLE>

<TABLE>
<CAPTION>
No. of
Warrants (0.2%) Country Warrants
- --------------- ------- --------
<S> <C> <C> <C> <C>
Development & Commercial Bank Warrants,
expire 12/28/99 (cost $5,939)**............................................ MAL 37,500 43,076 0.2
Banks-Money Center
</TABLE>

<TABLE>
<CAPTION>
No. of
Rights (0.1%) Rights
- ------------- ------
<S> <C> <C> <C> <C>
United Engineers Ltd., Convertible Unsecured Loan Stock,
4% till 5/22/99 (cost $7,859).............................................. MAL 21,000 11,717 0.1
Construction

Short-Term Investments
Repurchase Agreement (2.5%)
United States (2.5%)
Dated June 30, 1995 with State Street Bank and Trust Company, due July
3, 1995, for an effective yield of 6.10% collateralized by $380,000
United States Treasury Bond, 9.875% due 11/15/15 (market value
of collateral is $517,199, including accrued interest). (cost $506,086) 506,086 2.5
----------- -----
Total Investments (cost $20,254,041)++.......................................... 20,217,357 99.6
Other Assets and Liabilities.................................................... 87,597 0.4
----------- -----
Net Assets...................................................................... $20,304,954 100.0
=========== =====
</TABLE>

* Percentages indicated are based on net assets of $20,304,954.
** Non-income producing security.
*** Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
+ U.S. currency denominated.
++ For Federal income tax purposes, cost is $20,254,041 and appreciation
(depreciation) is as follows:

<TABLE>
<S> <C>
Unrealized appreciation: $ 2,006,734
Unrealized depreciation: (2,043,418)
-----------
Net unrealized depreciation: $ (36,684)
===========
</TABLE>

Abbreviations:
ADR -- American Depository Receipt
GDR -- Global Depository Receipt

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

F-103
<PAGE> 239

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE NEW PACIFIC FUND

The Fund's Portfolio of Investments at June 30, 1995, was concentrated in the
following countries:

<TABLE>
<CAPTION>
Percentage of Net Assets*
---------------------------------------------
Fixed Income,
Rights & Short-Term
Country (Country Code/Currency Code) Equity Warrants & Other Total
------------------------------------ ------ ------------- ---------- ------
<S> <C> <C> <C> <C>
Australia (AUSL/AUD) . . . . . . . . . . . 13.3 13.3
Hong Kong (HK/HKD) . . . . . . . . . . . . 15.6 15.6
India (IND/INR) . . . . . . . . . . . . . 0.7 0.7
Indonesia (INDO/IDR) . . . . . . . . . . . 10.3 10.3
Japan (JPN/JPY) . . . . . . . . . . . . . 1.9 1.9
Korea (KOR/KRW) . . . . . . . . . . . . . 4.2 4.2
Malaysia (MAL/MYR) . . . . . . . . . . . . 10.4 0.3 10.7
New Zealand (NZ/NZD) . . . . . . . . . . . 3.6 3.6
Philippines (PHIL/PHP) . . . . . . . . . . 3.8 3.8
Singapore (SING/SGD) . . . . . . . . . . . 10.1 10.1
Taiwan (TWN/TWD) . . . . . . . . . . . . . 1.1 1.1
Thailand (THAI/THB) . . . . . . . . . . . 18.4 18.4
United States (US/USD) . . . . . . . . . . 2.3 1.1 2.9 6.3
---- --- --- -----
Total 95.7 1.4 2.9 100.0
==== === === =====
</TABLE>

- -------------------------
* Percentages indicated are based on net assets of $20,304,954.

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

F-104

<PAGE> 240
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE EUROPE FUND

PORTFOLIO OF INVESTMENTS

June 30, 1995 (Unaudited)

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

<TABLE>
<CAPTION>
% of Net
Equity Investments Country Shares Market Value Assets*
- ------------------ ------- ------ ------------ --------
<S> <C> <C> <C> <C>
Finance (23.0%)
- ---------------
Anglo-Irish Bank Corp. PLC . . . . . . . . . . . . . . . . . . . . . . . IRE 500,000 $ 429,389 2.8
Banks-Money Center
Sparbanken Sverige AB "A". . . . . . . . . . . . . . . . . . . . . . . . SWDN 50,000 419,555 2.8
Investment Management
Cetelem Group. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . FR 2,550 394,289 2.6
Consumer Finance
British Airport Authority PLC. . . . . . . . . . . . . . . . . . . . . . UK 40,000 313,931 2.1
Real Estate
M & G Group PLC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . UK 17,000 287,929 1.9
Investment Management
Societe Generale Paris . . . . . . . . . . . . . . . . . . . . . . . . . FR 2,140 250,156 1.6
Banks-Money Center
ABN AMRO Holding N.V. . . . . . . . . . . . . . . . . . . . . . . . . . NETH 6,300 243,215 1.6
Banks-Regional
Baloise Holding Ltd. -- Registered **. . . . . . . . . . . . . . . . . . SWTZ 100 228,063 1.5
Insurance-Multi-Line
National Westminster Bank PLC. . . . . . . . . . . . . . . . . . . . . . UK 21,336 185,435 1.2
Banks-Money Center
CS Holding AG -- Registered**. . . . . . . . . . . . . . . . . . . . . . SWTZ 2,000 183,319 1.2
Banks-Money Center
Axa Group. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . FR 3,200 172,848 1.1
Insurance-Multi-Line
Lloyds Bank PLC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . UK 15,000 148,736 1.0
Banks-Money Center
Assicurazioni Generali S.p.A. . . . . . . . . . . . . . . . . . . . . . ITLY 5,500 129,323 0.9
Insurance-Multi-Line
Istituto Mobiliare Italiano S.p.A. -- ADR +. . . . . . . . . . . . . . . ITLY 6,000 111,000 0.7
Banks-Money Center
----------
3,497,188
----------

Services (17.6%)
- ----------------
National Express Group PLC . . . . . . . . . . . . . . . . . . . . . . . UK 70,000 409,669 2.7
Transportation-Road & Rail
Ecco Travail Temporaire S.A. . . . . . . . . . . . . . . . . . . . . . . FR 6,000 403,257 2.7
Business & Public Services
Vodafone Group PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . UK 100,000 371,342 2.4
Wireless Communications
Elsevier N.V.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NETH 24,000 283,538 1.9
Broadcasting & Publishing
Granada Group PLC. . . . . . . . . . . . . . . . . . . . . . . . . . . . UK 25,502 247,395 1.6
Leisure & Tourism
Hagemeyer N.V. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NETH 5,508 245,709 1.6
Wholesale & International Trade
Telecom Italia S.p.A.. . . . . . . . . . . . . . . . . . . . . . . . . . ITLY 80,000 216,970 1.4
Telephone Networks
Wolters Kluwer CVA . . . . . . . . . . . . . . . . . . . . . . . . . . . NETH 2,400 211,801 1.4
Broadcasting & Publishing
Telefonica de Espana . . . . . . . . . . . . . . . . . . . . . . . . . . SPN 12,000 154,647 1.0
Telephone Networks
Industrielle de Transports Automobiles S.A. (S.I.T.A.) . . . . . . . . . FR 1,000 142,253 0.9
Business & Public Services
----------
2,686,581
----------
</TABLE>

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

F-105

<PAGE> 241

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE EUROPE FUND

<TABLE>
<CAPTION>
% of Net
Equity Investments Country Shares Market Value Assets*
- ------------------ ------- ------ ------------ --------
<S> <C> <C> <C> <C>
Capital Goods (12.8%)
- ---------------------
Nokia AB "A" **. . . . . . . . . . . . . . . . . . . . . . . . . . . . . FIN 7,400 $ 433,357 2.8
Telecom Equipment
L.M. Ericsson Telephone Co. -- ADR + . . . . . . . . . . . . . . . . . . SWDN 18,000 360,000 2.4
Telecom Equipment
Allgon AB "B" Free . . . . . . . . . . . . . . . . . . . . . . . . . . . SWDN 13,000 309,371 2.0
Telecom Equipment
Mannesmann AG ** . . . . . . . . . . . . . . . . . . . . . . . . . . . . GER 1,003 306,523 2.0
Machinery & Engineering
General Electric PLC . . . . . . . . . . . . . . . . . . . . . . . . . . UK 60,638 296,054 1.9
Aerospace/Defense
Bilfinger & Berger Bau AG. . . . . . . . . . . . . . . . . . . . . . . . GER 565 260,942 1.7
Machinery & Engineering
----------
1,966,247
----------

Health Care (12.1%)
- -------------------
SmithKline Beecham PLC "A" . . . . . . . . . . . . . . . . . . . . . . . UK 65,500 592,708 3.9
Pharmaceuticals
Amersham International PLC . . . . . . . . . . . . . . . . . . . . . . . UK 35,000 537,134 3.5
Pharmaceuticals
Roche Holdings AG Genusscheine . . . . . . . . . . . . . . . . . . . . . SWTZ 45 290,096 1.9
Pharmaceuticals
Zeneca Group PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . UK 10,000 168,814 1.1
Pharmaceuticals
Astra AB "A" Free. . . . . . . . . . . . . . . . . . . . . . . . . . . . SWDN 5,000 154,410 1.0
Pharmaceuticals
Bayer AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GER 450 111,971 0.7
Pharmaceuticals
----------
1,855,133
----------

Materials/Basic Industries (9.4%)
- ---------------------------------
Repola Oy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . FIN 15,000 316,233 2.1
Forest Products
RTZ Corp., PLC -- Registered . . . . . . . . . . . . . . . . . . . . . . UK 19,000 247,622 1.6
Metals-Non-Ferrous
Imperial Chemical Industries PLC . . . . . . . . . . . . . . . . . . . . UK 20,000 245,070 1.6
Chemicals
Hoechst AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GER 1,000 216,130 1.4
Chemicals
Montedison S.p.A. ** . . . . . . . . . . . . . . . . . . . . . . . . . . ITLY 300,000 214,830 1.4
Chemicals
Acerinox S.A.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SPN 1,600 196,547 1.3
Metals-Steel
----------
1,436,432
----------

Energy (7.5%)
- -------------
British Petroleum Co., PLC . . . . . . . . . . . . . . . . . . . . . . . UK 45,335 324,800 2.1
Oil
BBC Brown Boveri AG (Bearer) . . . . . . . . . . . . . . . . . . . . . . SWTZ 300 310,686 2.0
Energy Equipment & Services
Elf Aquitaine. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . FR 3,750 277,162 1.8
Oil
Norsk Hydro AS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NOR 5,900 247,609 1.6
Energy Source
----------
1,160,257
----------
</TABLE>

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

F-106

<PAGE> 242

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE EUROPE FUND

<TABLE>
<CAPTION>
% of Net
Equity Investments Country Shares Market Value Assets*
- ------------------ ------- ------ ------------ --------
<S> <C> <C> <C> <C>
Consumer Durables (5.8%)
- ------------------------
Moulinex **. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . FR 10,300 $ 249,086 1.6
Appliances & Household
Lucas Industries PLC . . . . . . . . . . . . . . . . . . . . . . . . . . UK 80,000 239,822 1.6
Auto Parts
Merloni Elettrodomestici S.p.A.. . . . . . . . . . . . . . . . . . . . . ITLY 80,000 234,826 1.5
Appliances & Household
Mayflower Corp., PLC . . . . . . . . . . . . . . . . . . . . . . . . . . UK 150,000 163,406 1.1
Auto Parts
----------
887,140
----------

Multi-Industry/Miscellaneous (3.6%)
- -----------------------------------
Hanson PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . UK 120,000 418,893 2.8
Conglomerate
Wassall PLC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . UK 25,000 103,173 0.7
Conglomerate
U.S. Industries, Inc **. . . . . . . . . . . . . . . . . . . . . . . . . US 1,200 16,350 0.1
Conglomerate
----------
538,416
----------

Consumer Non-Durables (2.7%)
- ----------------------------
Polygram . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NETH 7,000 413,493 2.7
Recreation

Technology (0.8%)
- -----------------
Alcatel Alsthom Compagnie Generale d'Electricite . . . . . . . . . . . . FR 1,326 119,410 0.8
Telecom Technology

---------- -----
Total Equity Investments (cost $12,878,194) . . . . . . . . . . . . . . . . 14,560,297 95.3
---------- -----

Principal
Fixed Income Investments Currency Amount
- ------------------------ -------- ---------
Corporate Bonds (0.0%)
- ----------------------
France (0.0%)
-------------
AXA, Convertible Bond, 4.5% due 1/1/99 (cost $6,629) . . . . . . . . . FRF 11,800 7,379 0.0

No. of
Warrants (0.0%) Country Warrants
- --------------- ------- --------
Burgo (Cartiere) S.p.A. Warrants, expire 12/31/95 ** . . . . . . . . . . ITLY 13,798 1,215 0.0
Warrants
Baloise Holding Ltd. Warrants, expire 8/30/95 ** . . . . . . . . . . . . SWTZ 100 956 0.0
Insurance-Multi-Line
Swiss Reinsurance Co. "B" Warrants, expire 6/30/95 **. . . . . . . . . . SWTZ 1 24 0.0
Warrants
---------- -----
Total Warrants (cost $0) . . . . . . . . . . . . . . . . . . . . . . . . . 2,195 0.0
---------- -----
</TABLE>

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

F-107

<PAGE> 243

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE EUROPE FUND

<TABLE>
<CAPTION> % of Net
Short Term Investments Market Value Assets*
- ---------------------- ------------ --------
<S> <C> <C>
Repurchase Agreement (2.5%)
- ---------------------------
United States (2.5%)
--------------------
Dated June 30, 1995 with State Street Bank and Trust Company, due July
3, 1995, for an effective yield of 6.10% collateralized by $290,000
United States Treasury Bond, 9.875% due 11/15/15 (market value of
collateral is $394,705, including accrued interest).
(cost $381,065). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 381,065 2.5
----------- -----
Total Investments (cost $13,265,888) ++ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,950,936 97.8
Other Assets and Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 333,805 2.2
----------- -----

Net Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $15,284,741 100.0
=========== =====
</TABLE>

* Percentages indicated are based on net assets of $15,284,741.
** Non-income producing security.
+ U.S. currency denominated.
++ For Federal income tax purposes, cost is $13,265,888 and appreciation
(depreciation) is as follows:

<TABLE>
<S> <C>
Unrealized appreciation: $1,975,264
Unrealized depreciation: (290,216)
----------
Net unrealized appreciation: $1,685,048
==========
</TABLE>

Abbreviation:

ADR -- American Depository Receipt

The Fund's Portfolio of Investments at June 30, 1995 was concentrated in the
following countries:

* Percentages indicated are based on net assets of $15,284,741.

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

F-108

<PAGE> 244

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE EUROPE FUND

FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
JUNE 30, 1995 (UNAUDITED)

<TABLE>
<CAPTION>
Unrealized
Market Value Contract Delivery Appreciation
(U.S. Dollars) Price Date (Depreciation)
-------------- -------- -------- --------------
<S> <C> <C> <C> <C>
Contracts to Sell:
- ------------------
Deutsche Marks . . . . . . . . . . . . . . . . . . . . . . . . . 579,500 1.37248 08/03/95 $ 3,389
French Francs . . . . . . . . . . . . . . . . . . . . . . . . . 467,559 4.95000 08/04/95 (8,973)
French Francs . . . . . . . . . . . . . . . . . . . . . . . . . 362,513 5.08825 08/04/95 (16,618)
French Francs . . . . . . . . . . . . . . . . . . . . . . . . . 637,249 4.96615 08/16/95 (14,070)
Italian Lira . . . . . . . . . . . . . . . . . . . . . . . . . 410,285 1,664.25001 08/16/95 (4,635)
Netherland Guilders . . . . . . . . . . . . . . . . . . . . . . 258,849 1.59740 08/15/95 (8,443)
Netherland Guilders . . . . . . . . . . . . . . . . . . . . . . 452,986 1.60070 08/15/95 (15,678)
Swiss Francs . . . . . . . . . . . . . . . . . . . . . . . . . 785,068 1.20510 08/17/95 (38,240)
--------- ---------
Total Contracts to Sell (Receivable amount $3,850,741) . . . . . 3,954,009 (103,268)
--------- ---------
The Value of Contracts to Sell as a Percentage of Net Assets is 25.87%.

Total Open Forward Foreign Currency Contracts, Net . . . . $(103,268)
==========
</TABLE>

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

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

F-109

<PAGE> 245
G.T. GLOBAL VARIABLE INVESTMENT FUNDS
G.T. GLOBAL: MONEY MARKET FUND

Portfolio of Investments
June 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>

Effective Maturity Principal % of Net
Short-Term Investments Yield Date Amount Market Value Assets *
- ---------------------- --------- -------- --------- ------------ --------
Commercial Paper - Discounted (58.0%)
- -------------------------------------
<S> <C> <C> <C> <C> <C>
Minnesota Mining & Manufacturing Co.............................. 6.09% 12-Jul-95 750,000 $ 748,625 4.8
Unilever Capital Corp............................................ 6.00% 04-Aug-95 700,000 696,106 4.4
Coca Cola Co..................................................... 6.09% 31-Aug-95 700,000 693,061 4.4
Toronto Dominion Holdings USA, Inc............................... 5.99% 18-Sep-95 700,000 691,044 4.4
Ford Motor Credit Co............................................. 6.02% 10-Jul-95 600,000 599,111 3.8
Banc One Corp.................................................... 6.05% 21-Jul-95 600,000 598,017 3.8
Federal Home Loan Bank........................................... 5.88% 18-Aug-95 600,000 595,336 3.8
Federal National Mortgage Association............................ 5.88% 05-Sep-95 600,000 593,598 3.8
General Electric Capital Corp.................................... 5.97% 06-Sep-95 600,000 593,501 3.8
Philip Morris Cos., Inc.......................................... 6.18% 03-Jul-95 579,000 578,804 3.7
Shell Oil Co..................................................... 5.97% 05-Jul-95 500,000 499,672 3.2
E.I. DuPont de Nemours & Co...................................... 6.03% 07-Jul-95 500,000 499,504 3.2
Emerson Electric Co.............................................. 6.02% 17-Jul-95 500,000 498,684 3.2
Ameritech Corp................................................... 5.97% 06-Jul-95 400,000 399,672 2.6
Motorola, Inc.................................................... 6.03% 12-Jul-95 400,000 399,274 2.5
E.I. DuPont de Nemours & Co...................................... 6.03% 26-Jul-95 200,000 199,176 1.3
Shell Oil Co..................................................... 5.95% 11-Aug-95 200,000 198,672 1.3
----------- -----
Total Commercial Paper - Discounted (amortized cost $9,081,857) 9,081,857 58.0
----------- -----
Treasury Bills (22.0%)
- ----------------------
United States Treasury Bill...................................... 5.70% 05-Oct-95 2,500,000 2,463,100 15.7
United States Treasury Bill...................................... 5.60% 28-Sep-95 1,000,000 986,526 6.3
----------- -----
Total Treasury Bills (amortized cost $3,449,626).................... 3,449,626 22.0
----------- -----
Medium-Term Notes-Floating Rate (8.3%)
- --------------------------------------
Federal Farm Credit Corp......................................... 5.99% 14-Nov-95 800,000 799,662 5.1
PHH Corp......................................................... 5.86% 19-Oct-95 500,000 500,000 3.2
----------- -----
Total Medium-Term Notes (amortized cost $1,299,662)................. 1,299,662 8.3
----------- -----
Repurchase Agreement
- --------------------
Dated June 30, 1995 with State Street Bank and Trust Company,
due July 3, 1995, for an effective yield of 6.10%
collateralized by $1,405,000 United States Treasury Bond,
9.875% due 11/15/15 (market value of collateral is
$1,917,677 including accrued interest). (cost $1,869,316)...... 1,869,316 11.9
----------- -----
Total Short-Term Investments (cost $15,700,461) ++.................. 15,700,461 100.2
Other Assets and Liabilities........................................ (26,450) (0.2)
----------- -----
Net Assets.......................................................... $15,674,011 100.0
=========== =====
</TABLE>

- ------------------
* Percentage indicated are based on net assets of $15,674,011.
++ For Federal income tax purposes, cost is $15,700,461.

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

F-110

<PAGE> 246
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE INTERNATIONAL FUND

PORTFOLIO OF INVESTMENTS

JUNE 30, 1995 (UNAUDITED)

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

Services (17.4%)
Granada Group PLC .......................... UK 7,700 74,698 2.5
Leisure & Tourism
Compass Group PLC .......................... UK 12,000 70,992 2.4
Restaurants
Wolters Kluwer CVA ......................... NETH 800 70,600 2.4
Broadcasting & Publishing
Fast Retailing Co., Ltd .................... JPN 700 59,724 2.0
Retailers-Apparel
DDI Corp. .................................. JPN 7 56,172 1.9
Wireless Communications
Club Mediterrannee ** .................... FR 550 56,072 1.9
Leisure & Tourism
Autobacs Seven Co., Ltd .................... JPN 500 48,678 1.6
Retailers-Other
Cortefiel S.A .............................. SPN 1,500 45,539 1.5
Retailers-Apparel
</TABLE>

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

F-111
<PAGE> 247

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE INTERNATIONAL FUND

<TABLE>
<CAPTION>
% of Net
Equity Investments Country Shares Market Value Assets(*)
- ------------------ -------- ------ ------------ ---------
<S> <C> <C> <C> <C>
National Express Group PLC ........................ UK 3,000 $ 17,557 0.6
Transportation-Road & Rail
Telecom Italia -- Di Risp ......................... ITLY 7,900 16,715 0.6
Telephone Networks
--------
516,747
--------

Consumer Durables (12.5%)
Moulinex (**) ..................................... FR 2,500 60,458 2.0
Appliances & Household
Toyota Motor Corp ................................. JPN 3,000 59,476 2.0
Automobiles
Suzuki Motor Co., Ltd ............................. JPN 4,000 44,607 1.5
Automobiles
Merloni Elettrodomestici S.p.A .................... ITLY 14,000 41,095 1.4
Appliances & Household
Nissan Motor Corp., Ltd ........................... JPN 6,000 38,376 1.3
Automobiles
Electrolux AB OBO Free ............................ SWDN 780 35,515 1.2
Appliances & Household
Hyundai Motor Co. -- 144A GDR (+) (**) (***)....... KOR 1,700 34,000 1.1
Automobiles
Samsung Electronics Co.: .......................... KOR -- -- 1.1
Consumer Electronics
GDR (+) ......................................... -- 500 26,000 --
New -- GDR Non-voting (+) ....................... -- 98 4,943 --
Lucas Industries PLC .............................. UK 8,900 26,680 0.9
Auto Parts
--------
371,150
--------

Materials/Basic Industries (7.5%)
Nippon Steel Co ................................... JPN 15,000 48,855 1.6
Metals-Steel
European Vinyls Corp. International N.V.(**)....... NETH 1,000 46,611 1.5
Misc. Materials & Components
RWE AG ............................................ GER 100 34,756 1.2
Misc. Materials & Components
TPI Polene Co., Ltd. (Foreign) .................... THAI 5,000 34,043 1.1
Chemicals
Sumitomo Metal Mining Co .......................... JPN 10,000 26,080 0.9
Metals-Steel
NTS Steel Groups Co., Ltd. (Foreign) .............. THAI 12,000 23,465 0.8
Metals-Steel
SA Iron & Steel Industrial Corp., Ltd. (ISCOR)..... SAFR 10,000 11,360 0.4
Metals-Steel
--------
225,170
--------

Consumer Non-Durables (6.8%)
Hoya Corp ......................................... JPN 2,000 59,004 2.0
Other Consumer Goods
Salomon S.A ....................................... FR 100 45,253 1.5
Recreation
Polygram .......................................... NETH 600 35,442 1.2
Recreation
Reliance Industries Ltd. -- 144A GDR(+)(**)(***)... IND 1,800 32,184 1.1
Textiles & Apparel
</TABLE>

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

F-112

<PAGE> 248

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE INTERNATIONAL FUND

<TABLE>
<CAPTION>
% of Net
Equity Investments Country Shares Market Value Assets(*)
- ------------------ ------- ------ ------------ ---------
<S> <C> <C> <C> <C>
Nestle S.A. -- Registered ................... SWTZ 30 $ 31,251 1.0
Food
----------
203,134
----------

Energy (6.1%)
British Petroleum Co., PLC ............... UK 8,052 57,688 1.9
Oil
Elf Aquitaine ............................ FR 750 55,432 1.8
Oil
Norsk Hydro AS -- ADR (+) ................ NOR 1,200 50,100 1.7
Electrical & Gas Utilities
BBC Brown Boveri AG (Bearer) ............. SWTZ 20 20,712 0.7
Energy Equipment & Services
----------
183,932
----------

Capital Goods (6.0%)
Canon, Inc ............................... JPN 3,000 48,855 1.6
Office Equipment
Telefonaktiebolaget LM Ericsson "B" Free.. SWDN 2,400 47,871 1.6
Telecom Equipment
Allgon AB "B" Free ....................... SWDN 2,000 47,595 1.6
Telecom Equipment
Nokia AB "K" ............................. FIN 600 35,699 1.2
Telecom Equipment
----------
180,020
----------

Multi-Industry/Miscellaneous (3.6%)
Barlow Ltd ............................... SAFR 6,500 66,600 2.2
Conglomerate
Valmet Corp. "A" ......................... FIN 1,800 40,689 1.4
Conglomerate
----------
107,289
----------

Technology (3.4%)
Kyocera Corp ............................. JPN 1,000 82,370 2.7
Semiconductors
Hosiden Electronics ...................... JPN 2,000 21,005 0.7
Computers & Peripherals
----------
103,375
----------

Health Care (2.1%)
SmithKline Beecham PLC "A" ............... UK 7,000 63,343 2.1
Pharmaceuticals
---------- ----
Total Equity Investments (cost $2,751,145) .. 2,786,385 93.0
---------- ----
</TABLE>

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

F-113
<PAGE> 249

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE INTERNATIONAL FUND

<TABLE>
<CAPTION>
% of Net
Short-Term Investments Market Value Assets(*)
---------------------- ------------ ---------
<S> <C> <C>
Repurchase Agreement (5.2%)
United States (5.2%)
Dated June 30, 1995 with State Street Bank and Trust Company, due July
3, 1995, for an effective yield of 6.10% collateralized by $120,000 United
States Treasury Bond, 9.875% due 11/15/15 (market value of
collateral is $163,326, including accrued interest). (cost $157,027) ........ $ 157,027 5.2
----------- -----
Total Investments (cost $2,908,172) (++) ......................................... 2,943,412 98.2
Other Assets and Liabilities ..................................................... 54,365 1.8
----------- -----
Net Assets ....................................................................... $ 2,997,777 100.0
=========== =====
</TABLE>

- -----------------
* Percentages indicated are based on net assets of $2,997,777.
** Non-income producing security.
*** Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
+ U.S. currency denominated.
++ For Federal income tax purposes, cost is $2,911,528 and appreciation
(depreciation) is as follows:

<TABLE>
<S> <C>
Unrealized appreciation: $ 178,697
Unrealized depreciation: (146,813)
---------
Net unrealized appreciation: $ 31,884
=========
</TABLE>

Abbreviations:
ADR -- American Depository Receipt
GDR -- Global Depository Receipt

================================================================================

The Fund's Portfolio of Investments at June 30, 1995, was concentrated in the
following countries:

<TABLE>
<CAPTION>
Percentage of Net Assets(*)
-------------------------------------
Short-Term
Country (Country Code/Currency Code) Equity & Other Total
- ------------------------------------ ------ ---------- -----
<S> <C> <C> <C>
Australia (AUSL/AUD) ............. 1.8 1.8
Finland (FIN/FIM) ................ 2.6 2.6
France (FR/FRF) .................. 10.7 10.7
Germany (GER/DEM) ................ 1.2 1.2
Hong Kong (HK/HKD) ............... 2.8 2.8
India (IND/INR) .................. 1.1 1.1
Ireland (IRE/IEP) ................ 1.2 1.2
Italy (ITLY/ITL) ................. 2.0 2.0
Japan (JPN/JPY) .................. 19.8 19.8
Korea (KOR/KRW) .................. 2.2 2.2
Malaysia (MAL/MYR) ............... 3.4 3.4
Netherlands (NETH/NLG) ........... 5.1 5.1
Norway (NOR/NOK) ................. 1.7 1.7
Philippines (PHIL/PHP) ........... 1.4 1.4
Singapore (SING/SGD) ............. 2.8 2.8
South Africa (S AFR/ZAR) ......... 2.6 2.6
Spain (SPN/ESP) .................. 1.5 1.5
Sweden (SWDN/SEK) ................ 6.1 6.1
Switzerland (SWTZ/CHF) ........... 1.7 1.7
Thailand (THAI/THB) .............. 5.9 5.9
United Kingdom (UK/GBP) .......... 15.4 15.4
United States (US/USD) ........... 7.0 7.0
---- --- -----
Total ............................ 93.0 7.0 100.0
==== === =====
</TABLE>

- ----------------
(*) Percentages indicated are based on net assets of $2,997,777.

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

F-114
<PAGE> 250
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. GLOBAL: VARIABLE INTERNATIONAL FUND

Forward Foreign Currency Contracts Outstanding
June 30, 1995 (Unaudited)

<TABLE>
<CAPTION>
Unrealized
Market Value Contract Delivery Appreciation
Contracts to Buy: (U.S. Dollars) Price Date (Depreciation)
- ----------------- -------------- -------- -------- --------------
<S> <C> <C> <C> <C>
Deutsche Marks ........................................................ 72,438 1.45543 08/03/95 $ 3,729
------- -------
Total Contracts to Buy (Payable amount $68,709) ....................... 72,438 3,729
------- -------
The value of Contracts to Buy as a Percentage of Net Assets is 2.42%.

Contracts to Sell:
Deutsche Marks ........................................................ 144,876 1.37248 08/03/95 849
French Francs ......................................................... 45,314 4.95000 08/04/95 (870)
French Francs ......................................................... 21,751 5.08825 08/04/95 (997)
French Francs ......................................................... 70,812 4.96615 08/16/95 (1,564)
Japanese Yen .......................................................... 248,011 82.00000 08/10/95 6,867
Japanese Yen .......................................................... 178,476 85.61500 08/31/95 (3,273)
Netherland Guilders ................................................... 64,712 1.59740 08/15/95 (2,111)
Netherland Guilders ................................................... 64,712 1.60070 08/15/95 (2,240)
Swedish Krona ......................................................... 69,918 7.50080 08/22/00 (1,859)
Swiss Francs .......................................................... 78,507 1.20510 08/17/95 (3,824)
------- -------
Total Contracts to Sell (Receivable amount $978,067) .................. 987,089 (9,022)
------- -------
The Value of Contracts to Sell as a Percentage of Net Assets is 32.93%

Total Open Forward Foreign Currency Contracts, Net ......................................................... $(5,293)
=======
</TABLE>

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

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

F-115
<PAGE> 251
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

STATEMENTS OF ASSETS
AND LIABILITIES

June 30, 1995 (Unaudited)

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
G.T. GLOBAL:
-----------------------------
VARIABLE VARIABLE GLOBAL
STRATEGIC GOVERNMENT
INCOME FUND INCOME FUND
----------- ---------------
<S> <C> <C>
Assets:
Investments in securities: (Note 1)
At identified cost......................................................... $22,939,638 $10,313,801
=========== ===========
At value................................................................... $22,518,911 $10,478,080
Repurchase agreement, at value and cost (Note 1)........................... 807,137 165,028
U.S. and foreign currencies................................................ 1,654 207
Receivable for Fund shares sold............................................ 13,328 30
Receivable for securities sold............................................. -- 7,878
Receivable for forward foreign currency contracts --
closed (Note 1).......................................................... 13,924 --
Dividends and dividend tax reclaims receivable............................. -- --
Interest and interest tax reclaims receivable.............................. 565,524 229,842
Reimbursement from G.T. Capital Management, Inc. (Note 2).................. 62,808 60,263
Unamortized organizational expenses (Note 1)............................... 16,421 16,421
Other receivables.......................................................... -- --
Cash held as collateral for securities loaned (Note 1)..................... -- --
----------- -----------
Total assets............................................................... 23,999,707 10,957,749
----------- -----------

Liabilities:
Due to custodian........................................................... -- --
Payable for Fund shares repurchased........................................ 5,389 40,001
Payable for securities purchased........................................... 34,751 --
Payable for forward foreign currency contracts -- closed (Note 1).......... -- 36,821
Payable for open forward foreign currency contracts, net (Note 1).......... 34,344 19,178
Payable for investment management and administration fees (Note 2)......... 29,615 13,617
Payable for Trustees' fees and expenses (Note 2)........................... 1,477 1,477
Distribution payable (Note 1).............................................. -- --
Other accrued expenses 21,921 24,019
Collateral for securities loaned (Note 1).................................. -- --
----------- -----------
Total liabilities.......................................................... 127,497 135,113
----------- -----------
Net assets.................................................................... $23,872,210 $10,822,636
=========== ===========

Net assets consist of:
Paid in capital (Note 4)................................................... $27,930,692 $11,400,340
Undistributed/Accumulated net investment income (loss)..................... 130,690 6,088
Accumulated net realized gain (loss) on investments and
foreign currency transactions............................................ (3,743,153) (733,481)
Net unrealized appreciation (depreciation) on translation of
assets and liabilities in foreign currencies............................. (25,292) (14,590)
Net unrealized appreciation (depreciation) of investments.................. (420,727) 164,279
----------- -----------
Total -- representing net assets applicable to capital shares outstanding.. $23,872,210 $10,822,636
=========== ===========
Shares outstanding............................................................ 2,098,866 949,731
=========== ===========
Net asset value per share..................................................... $ 11.37 $ 11.40
=========== ===========

<CAPTION>
G.T. GLOBAL:
----------------------------
VARIABLE U.S. VARIABLE
GOVERNMENT LATIN AMERICA
INCOME FUND FUND
------------- -------------
<S> <C> <C>
Assets:
Investments in securities: (Note 1)
At identified cost......................................................... $ 3,542,869 $21,634,268
=========== ===========
At value................................................................... $ 3,671,695 $19,982,082
Repurchase agreement, at value and cost (Note 1)........................... 376,064 --
U.S. and foreign currencies................................................ 221 813,672
Receivable for Fund shares sold............................................ 5,000 537,749
Receivable for securities sold............................................. -- 281,756
Receivable for forward foreign currency contracts --
closed (Note 1).......................................................... -- --
Dividends and dividend tax reclaims receivable............................. -- 117,487
Interest and interest tax reclaims receivable.............................. 54,343 --
Reimbursement from G.T. Capital Management, Inc. (Note 2).................. 48,826 113,160
Unamortized organizational expenses (Note 1)............................... 16,421 16,421
Other receivables.......................................................... -- --
Cash held as collateral for securities loaned (Note 1)..................... -- 1,243,100
----------- -----------
Total assets............................................................... 4,172,570 23,105,427
----------- -----------

Liabilities:
Due to custodian........................................................... -- 9,966
Payable for Fund shares repurchased........................................ 5,000 511,143
Payable for securities purchased........................................... -- 402,228
Payable for forward foreign currency contracts -- closed (Note 1).......... -- --
Payable for open forward foreign currency contracts, net (Note 1).......... -- --
Payable for investment management and administration fees (Note 2)......... 4,474 35,561
Payable for Trustees' fees and expenses (Note 2)........................... 1,477 1,477
Distribution payable (Note 1).............................................. -- --
Other accrued expenses 30,547 31,463
Collateral for securities loaned (Note 1).................................. -- 1,243,100
----------- -----------
Total liabilities.......................................................... 41,498 2,234,938
----------- -----------
Net assets.................................................................... $ 4,131,072 $20,870,489
=========== ===========

Net assets consist of:
Paid in capital (Note 4)................................................... $ 4,080,379 $27,602,886
Undistributed/Accumulated net investment income (loss)..................... 7,444 417,821
Accumulated net realized gain (loss) on investments and
foreign currency transactions............................................ (85,577) (5,492,567)
Net unrealized appreciation (depreciation) on translation of
assets and liabilities in foreign currencies............................. -- (5,465)
Net unrealized appreciation (depreciation) of investments.................. 128,826 (1,652,186)
----------- -----------
Total -- representing net assets applicable to capital shares outstanding.. $ 4,131,072 $20,870,489
=========== ===========
Shares outstanding............................................................ 360,360 1,623,417
=========== ===========
Net asset value per share..................................................... $ 11.46 $ 12.86
=========== ===========
</TABLE>

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

F-116
<PAGE> 252
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

STATEMENTS OF ASSETS
AND LIABILITIES

June 30, 1995 (Unaudited)

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
G.T. GLOBAL:
------------------------------------------
VARIABLE VARIABLE TELE- VARIABLE
GROWTH & COMMUNICATIONS EMERGING
INCOME FUND FUND MARKETS FUND
----------- -------------- ------------
<S> <C> <C> <C>
Assets:
Investments in securities: (Note 1)
At identified cost......................................................... $25,473,344 $33,159,520 $ 7,973,976
=========== =========== ===========
At value................................................................... $27,068,333 $38,779,012 $ 8,037,042
Repurchase agreement, at value and cost (Note 1)........................... 381,065 3,254,551 --
U.S. and foreign currencies................................................ 173,441 64,551 159,059
Receivable for Fund shares sold............................................ 33,874 304,216 59,928
Receivable for securities sold............................................. 267,926 2,066,473 349,885
Receivable for forward foreign currency contracts --
closed (Note 1).......................................................... -- -- --
Dividends and dividend tax reclaims receivable............................. 103,801 40,964 15,569
Interest and interest tax reclaims receivable.............................. 220,672 -- --
Reimbursement from G.T. Capital Management, Inc. (Note 2).................. 58,224 26,259 27,014
Unamortized organizational expenses (Note 1)............................... 16,421 20,711 --
Other receivables.......................................................... -- -- --
Cash held as collateral for securities loaned (Note 1)..................... 572,765 4,051,475 --
----------- ----------- -----------
Total assets............................................................... 28,896,522 48,608,212 8,648,497
----------- ----------- -----------

Liabilities:
Due to custodian........................................................... -- -- 90,772
Payable for Fund shares repurchased........................................ 5,901 312,072 10,000
Payable for securities purchased........................................... 293,545 618,800 608,307
Payable for forward foreign currency contracts -- closed (Note 1).......... -- -- --
Payable for open forward foreign currency contracts, net (Note 1).......... 220,732 30,792 --
Payable for investment management and administration fees (Note 2)......... 46,333 52,968 13,199
Payable for Trustees' fees and expenses (Note 2)........................... 1,477 1,477 1,477
Distribution payable (Note 1).............................................. -- -- --
Other accrued expenses 19,565 63,669 23,714
Collateral for securities loaned (Note 1).................................. 572,765 4,051,475 --
----------- ----------- -----------
Total liabilities.......................................................... 1,160,318 5,131,253 747,469
----------- ----------- -----------
Net assets.................................................................... $27,736,204 $43,476,959 $ 7,901,028
=========== =========== ===========

Net assets consist of:
Paid in capital (Note 4)................................................... $27,360,352 $36,253,686 $ 8,870,075
Undistributed/Accumulated net investment income (loss)..................... 276,045 47,882 80,686
Accumulated net realized gain (loss) on investments and
foreign currency transactions............................................ (1,284,379) 1,586,707 (1,114,003)
Net unrealized appreciation (depreciation) on translation of
assets and liabilities in foreign currencies............................. (210,803) (30,808) 1,204
Net unrealized appreciation (depreciation) of investments.................. 1,594,989 5,619,492 63,066
----------- ----------- -----------
Total -- representing net assets applicable to capital shares outstanding.. $27,736,204 $43,476,959 $ 7,901,028
=========== =========== ===========
Shares outstanding............................................................ 2,056,766 2,773,463 707,685
=========== =========== ===========
Net asset value per share..................................................... $ 13.49 $ 15.68 $ 11.16
=========== =========== ===========

<CAPTION>
G.T. GLOBAL:
-------------------------------------------
VARIABLE VARIABLE VARIABLE
INFRASTRUCTURE NATURAL AMERICA
FUND RESOURCES FUND FUND
-------------- -------------- -----------
<S> <C> <C> <C>
Assets:
Investments in securities: (Note 1)
At identified cost......................................................... $ 518,496 $ 646,705 $27,220,390
=========== =========== ===========
At value................................................................... $ 545,169 $ 664,629 $31,920,022
Repurchase agreement, at value and cost (Note 1)........................... 12,002 123,021 2,662,451
U.S. and foreign currencies................................................ 189 155 985
Receivable for Fund shares sold............................................ 6,034 300 152,522
Receivable for securities sold............................................. 12,797 -- 252,401
Receivable for forward foreign currency contracts --
closed (Note 1).......................................................... -- -- --
Dividends and dividend tax reclaims receivable............................. 1,037 877 20,656
Interest and interest tax reclaims receivable.............................. -- -- --
Reimbursement from G.T. Capital Management, Inc. (Note 2).................. 33,406 31,469 48,038
Unamortized organizational expenses (Note 1)............................... -- -- 16,421
Other receivables.......................................................... -- 37 --
Cash held as collateral for securities loaned (Note 1)..................... -- -- --
----------- ----------- -----------
Total assets............................................................... 610,634 820,488 35,073,496
----------- ----------- -----------

Liabilities:
Due to custodian........................................................... -- -- --
Payable for Fund shares repurchased........................................ -- -- 125
Payable for securities purchased........................................... 3,998 214,204 951,501
Payable for forward foreign currency contracts -- closed (Note 1).......... -- -- --
Payable for open forward foreign currency contracts, net (Note 1).......... -- -- --
Payable for investment management and administration fees (Note 2)......... 1,373 945 38,431
Payable for Trustees' fees and expenses (Note 2)........................... 1,167 1,167 1,410
Distribution payable (Note 1).............................................. -- -- --
Other accrued expenses 28,863 28,463 29,935
Collateral for securities loaned (Note 1).................................. -- -- --
----------- ----------- -----------
Total liabilities.......................................................... 35,401 244,779 1,021,402
----------- ----------- -----------
Net assets.................................................................... $ 575,233 $ 575,709 $34,052,094
=========== =========== ===========

Net assets consist of:
Paid in capital (Note 4)................................................... $ 535,922 $ 550,107 $27,918,527
Undistributed/Accumulated net investment income (loss)..................... 3,137 3,425 240,597
Accumulated net realized gain (loss) on investments and
foreign currency transactions............................................ 9,498 4,306 1,193,338
Net unrealized appreciation (depreciation) on translation of
assets and liabilities in foreign currencies............................. 3 (53) --
Net unrealized appreciation (depreciation) of investments.................. 26,673 17,924 4,699,632
----------- ----------- -----------
Total -- representing net assets applicable to capital shares outstanding.. $ 575,233 $ 575,709 $34,052,094
=========== =========== ===========
Shares outstanding............................................................ 43,488 43,365 1,756,499
=========== =========== ===========
Net asset value per share..................................................... $ 13.23 $ 13.28 $ 19.39
=========== =========== ===========

<CAPTION>
G.T. GLOBAL:
-------------------------
VARIABLE VARIABLE
NEW PACIFIC EUROPE
FUND FUND
----------- -----------
<S> <C> <C>
Assets:
Investments in securities: (Note 1)
At identified cost......................................................... $19,747,955 $12,884,823
=========== ===========
At value................................................................... $19,711,271 $14,569,871
Repurchase agreement, at value and cost (Note 1)........................... 506,086 381,065
U.S. and foreign currencies................................................ 38,196 305,840
Receivable for Fund shares sold............................................ 12,656 10,092
Receivable for securities sold............................................. -- --
Receivable for forward foreign currency contracts --
closed (Note 1).......................................................... -- --
Dividends and dividend tax reclaims receivable............................. 55,656 109,848
Interest and interest tax reclaims receivable.............................. 2,942 --
Reimbursement from G.T. Capital Management, Inc. (Note 2).................. 66,985 53,688
Unamortized organizational expenses (Note 1)............................... 16,421 16,421
Other receivables.......................................................... 252 810
Cash held as collateral for securities loaned (Note 1)..................... 1,335,813 1,278,516
----------- -----------
Total assets............................................................... 21,746,278 16,726,151
----------- -----------

Liabilities:
Due to custodian........................................................... -- --
Payable for Fund shares repurchased........................................ 39,094 10,015
Payable for securities purchased........................................... -- --
Payable for forward foreign currency contracts -- closed (Note 1).......... -- --
Payable for open forward foreign currency contracts, net (Note 1).......... -- 103,268
Payable for investment management and administration fees (Note 2)......... 35,323 21,385
Payable for Trustees' fees and expenses (Note 2)........................... 1,410 1,410
Distribution payable (Note 1).............................................. -- --
Other accrued expenses 29,684 26,816
Collateral for securities loaned (Note 1).................................. 1,335,813 1,278,516
----------- -----------
Total liabilities.......................................................... 1,441,324 1,441,410
----------- -----------
Net assets.................................................................... $20,304,954 $15,284,741
=========== ===========

Net assets consist of:
Paid in capital (Note 4)................................................... $21,304,397 $15,007,053
Undistributed/Accumulated net investment income (loss)..................... 169,988 164,326
Accumulated net realized gain (loss) on investments and
foreign currency transactions............................................ (1,132,473) (1,471,298)
Net unrealized appreciation (depreciation) on translation of
assets and liabilities in foreign currencies............................. (274) (100,388)
Net unrealized appreciation (depreciation) of investments.................. (36,684) 1,685,048
----------- -----------
Total -- representing net assets applicable to capital shares outstanding.. $20,304,954 $15,284,741
=========== ===========
Shares outstanding............................................................ 1,463,288 988,956
=========== ===========
Net asset value per share..................................................... $ 13.88 $ 15.46
=========== ===========

<CAPTION>
G.T. GLOBAL:
---------------------------
MONEY VARIABLE
MARKET INTERNATIONAL
FUND FUND
----------- -------------
<S> <C> <C>
Assets:
Investments in securities: (Note 1)
At identified cost......................................................... $13,831,145 $ 2,751,145
=========== ===========
At value................................................................... $13,831,145 $ 2,786,385
Repurchase agreement, at value and cost (Note 1)........................... 1,869,316 157,027
U.S. and foreign currencies................................................ 260 28,909
Receivable for Fund shares sold............................................ 244,782 4,834
Receivable for securities sold............................................. -- --
Receivable for forward foreign currency contracts --
closed (Note 1).......................................................... -- --
Dividends and dividend tax reclaims receivable............................. -- 15,633
Interest and interest tax reclaims receivable.............................. 12,204 --
Reimbursement from G.T. Capital Management, Inc. (Note 2).................. 59,478 42,374
Unamortized organizational expenses (Note 1)............................... 16,421 --
Other receivables.......................................................... -- --
Cash held as collateral for securities loaned (Note 1)..................... -- 97,851
----------- -----------
Total assets............................................................... 16,033,606 3,133,013
----------- -----------

Liabilities:
Due to custodian........................................................... -- --
Payable for Fund shares repurchased........................................ 245,741 --
Payable for securities purchased........................................... -- --
Payable for forward foreign currency contracts -- closed (Note 1).......... -- --
Payable for open forward foreign currency contracts, net (Note 1).......... -- 5,293
Payable for investment management and administration fees (Note 2)......... 12,010 5,765
Payable for Trustees' fees and expenses (Note 2)........................... 1,410 1,410
Distribution payable (Note 1).............................................. 67,481 --
Other accrued expenses 32,953 24,917
Collateral for securities loaned (Note 1).................................. -- 97,851
----------- -----------
Total liabilities.......................................................... 359,595 135,236
----------- -----------
Net assets.................................................................... $15,674,011 $ 2,997,777
=========== ===========

Net assets consist of:
Paid in capital (Note 4)................................................... $15,674,011 $ 3,251,730
Undistributed/Accumulated net investment income (loss)..................... -- 34,785
Accumulated net realized gain (loss) on investments and
foreign currency transactions............................................ -- (319,320)
Net unrealized appreciation (depreciation) on translation of
assets and liabilities in foreign currencies............................. -- (4,658)
Net unrealized appreciation (depreciation) of investments.................. -- 35,240
----------- -----------
Total -- representing net assets applicable to capital shares outstanding.. $15,674,011 $ 2,997,777
=========== ===========
Shares outstanding............................................................ 15,674,011 282,093
=========== ===========
Net asset value per share..................................................... $ 1.00 $ 10.63
=========== ===========
</TABLE>

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

F-117
<PAGE> 253
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

STATEMENTS OF OPERATIONS
Six months ended June 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
G.T. GLOBAL:
----------------------------------------------------------
VARIABLE VARIABLE GLOBAL VARIABLE U.S. VARIABLE
STRATEGIC GOVERNMENT GOVERNMENT LATIN AMERICA
INCOME FUND INCOME FUND INCOME FUND FUND
----------- --------------- ------------- -------------
<S> <C> <C> <C> <C>
Investment income (Note 1):
Dividends....................................................... $ -- $ -- $ -- $ 225,660
Interest........................................................ 1,222,123 411,912 123,458 377,058
---------- ---------- -------- ---------
Total investment income*........................................ 1,222,123 411,912 123,458 602,718
---------- ---------- -------- ---------
Expenses:
Investment management and administration fees
(Note 2)...................................................... 82,818 38,170 13,911 140,686
Audit fees...................................................... 9,050 9,050 9,050 9,050
Custodian and fund accounting fees (Note 1)..................... 13,100 29,086 7,671 22,503
Legal fees...................................................... 3,101 3,284 3,101 3,101
Printing and postage expenses................................... 18,100 18,100 18,100 18,100
Registration fees............................................... 1,810 1,810 1,810 1,810
Trustees' fees and expenses (Note 2)............................ 1,810 1,810 1,810 1,810
Amortization of organizational expenses (Note 1)................ 3,106 3,106 3,106 3,106
---------- ---------- -------- ---------
Total expenses.................................................. 132,895 104,416 58,559 200,166
---------- ---------- -------- ---------
Expenses reimbursed by G.T. Capital Management,
Inc. (Note 2)............................................... (22,085) (52,968) (40,013) (69,926)
Other expense reductions (Notes 1 & 5)........................ -- -- -- (3,345)
---------- ---------- -------- ---------
Total net expenses after reimbursement and reductions........... 110,810 51,448 18,546 126,895
---------- ---------- -------- ---------
Net investment income (loss)....................................... 1,111,313 360,464 104,912 475,823
---------- ---------- -------- ---------
Net realized and unrealized gain (loss) on investments
and foreign currencies (Note 1):
Net realized gain (loss) on investments......................... 105,402 678,464 (13,037) (5,463,776)
Net realized gain (loss) on foreign currency transactions....... (231,005) (242,716) -- 14,896
---------- ---------- -------- ---------
Net realized gain (loss) during the period................. (125,603) 435,748 (13,037) (5,448,880)
---------- ---------- -------- ---------
Net change in unrealized appreciation (depreciation) on
translation of assets and liabilities in foreign currencies... (6,945) (18,183) -- (6,330)
Net change in unrealized appreciation (depreciation) of
investments................................................... 1,039,471 278,339 236,728 (603,038)
---------- ---------- -------- ---------
Net unrealized appreciation (depreciation) during the
period................................................... 1,032,526 260,156 236,728 (609,368)
---------- ---------- -------- ---------
Net realized and unrealized gain (loss) on investments and
foreign currencies............................................... 906,923 695,904 223,691 (6,058,248)
---------- ---------- -------- ---------
Net increase (decrease) in net assets resulting from operations.... $2,018,236 $1,056,368 328,603 $ (5,582,425)
========== ========== ======== ============
* Net of foreign withholding taxes of.............................. $ 6,129 $ 142 $ -- $ 29,025

</TABLE>

** The Variable Infrastructure and Variable Natural Resources Funds did not
commence operations until January 31, 1995.

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

F-118
<PAGE> 254

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

STATEMENTS OF OPERATIONS
Six months ended June 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
G.T. GLOBAL:
----------------------------------------------------------
VARIABLE VARIABLE TELE- VARIABLE- VARIABLE
GROWTH & COMMUNICATIONS EMERGING INFRASTRUCTURE
INCOME FUND FUND MARKETS FUND FUND**
----------- -------------- ------------ --------------
<S> <C> <C> <C> <C>
Investment income (Note 1):
Dividends....................................................... $ 343,145 $ 220,907 $ 73,640 $ 2,078
Interest........................................................ 409,431 54,027 53,000 2,776
----------- ---------- ----------- --------
Total investment income*........................................ 752,576 274,934 126,640 4,854
----------- ---------- ----------- --------
Expenses:
Investment management and administration fees
(Note 2)...................................................... 142,523 199,257 45,761 1,373
Audit fees...................................................... 9,050 9,050 8,430 7,500
Custodian and fund accounting fees (Note 1)..................... 18,100 18,200 30,100 6,000
Legal fees...................................................... 3,380 2,715 2,715 2,250
Printing and postage expenses................................... 18,100 18,100 18,100 15,000
Registration fees............................................... 1,810 1,810 1,810 1,500
Trustees' fees and expenses (Note 2)............................ 1,810 1,810 1,810 1,500
Amortization of organizational expenses (Note 1)................ 3,106 3,106 -- --
----------- ---------- ----------- --------
Total expenses.................................................. 197,879 254,048 108,726 35,123
----------- ---------- ----------- --------
Expenses reimbursed by G.T. Capital Management,
Inc. (Note 2)............................................... (33,909) (22,814) (61,978) (33,406)
Other expense reductions (Notes 1 & 5)........................ (2,148) (11,281) (794) --
----------- ---------- ----------- --------
Total net expenses after reimbursement and reductions........... 161,822 219,953 45,954 1,717
----------- ---------- ----------- --------
Net investment income (loss)....................................... 590,754 54,981 80,686 3,137
----------- ---------- ----------- --------
Net realized and unrealized gain (loss) on investments
and foreign currencies (Note 1):
Net realized gain (loss) on investments......................... (282,154) 2,331,316 (1,023,674) 9,474
Net realized gain (loss) on foreign currency transactions....... (726,989) (692,407) (10,380) 24
----------- ---------- ----------- --------
Net realized gain (loss) during the period................. (1,009,143) 1,638,909 (1,034,054) 9,498
----------- ---------- ----------- --------
Net change in unrealized appreciation (depreciation) on
translation of assets and liabilities in foreign currencies... (237,455) (60,600) 1,398 3
Net change in unrealized appreciation (depreciation) of
investments................................................... 2,060,011 3,873,108 584,319 26,673
----------- ---------- ----------- --------
Net unrealized appreciation (depreciation) during the
period................................................... 1,822,556 3,812,508 585,717 26,676
----------- ---------- ----------- --------
Net realized and unrealized gain (loss) on investments and
foreign currencies............................................... 813,413 5,451,417 (448,337) 36,174
----------- ---------- ----------- --------
Net increase (decrease) in net assets resulting from operations.... $ 1,404,167 $5,506,398 $ (367,651) $ 39,311
=========== ========== =========== ========
* Net of foreign withholding taxes of.............................. $ 48,744 $ 44,813 $ 5,841 $ 261

</TABLE>
<TABLE>
<CAPTION>
G.T. GLOBAL:
---------------------------------------------------------
VARIABLE VARIABLE VARIABLE VARIABLE
NATURAL RE- AMERICA NEW PACIFIC EUROPE
SOURCES FUND** FUND FUND FUND
-------------- -------- ----------- ---------
<S> <C> <C> <C> <C>
Investment income (Note 1):
Dividends....................................................... $ 1,893 $ 64,298 $ 221,003 $ 224,639
Interest........................................................ 2,667 290,649 65,562 27,271
-------- ---------- --------- -----------
Total investment income*........................................ 4,560 354,947 286,565 251,910
-------- ---------- --------- -----------
Expenses:
Investment management and administration fees
(Note 2)...................................................... 945 91,807 96,818 72,742
Audit fees...................................................... 7,500 9,050 9,050 9,050
Custodian and fund accounting fees (Note 1)..................... 4,000 13,531 17,963 7,860
Legal fees...................................................... 2,250 3,100 3,101 3,100
Printing and postage expenses................................... 15,000 18,100 18,100 18,100
Registration fees............................................... 1,500 1,810 1,810 1,810
Trustees' fees and expenses (Note 2)............................ 1,500 1,810 1,810 1,810
Amortization of organizational expenses (Note 1)................ -- 3,106 3,106 3,106
-------- ---------- --------- -----------
Total expenses.................................................. 32,695 142,314 151,758 117,578
-------- ---------- --------- -----------
Expenses reimbursed by G.T. Capital Management,
Inc. (Note 2)............................................... (31,469) (19,645) (30,487) (26,651)
Other expense reductions (Notes 1 & 5)........................ (91) -- (4,745) (4,098)
-------- ---------- --------- -----------
Total net expenses after reimbursement and reductions........... 1,135 122,669 116,526 86,829
-------- ---------- --------- -----------
Net investment income (loss)....................................... 3,425 232,278 170,039 165,081
-------- ---------- --------- -----------
Net realized and unrealized gain (loss) on investments
and foreign currencies (Note 1):
Net realized gain (loss) on investments......................... 4,014 1,222,850 (595,843) (570,107)
Net realized gain (loss) on foreign currency transactions....... 292 -- (108,564) (719,057)
-------- ---------- --------- -----------
Net realized gain (loss) during the period................. 4,306 1,222,850 (704,407) (1,289,164)
-------- ---------- --------- -----------
Net change in unrealized appreciation (depreciation) on
translation of assets and liabilities in foreign currencies... (53) -- 380 (217,796)
Net change in unrealized appreciation (depreciation) of
investments................................................... 17,924 4,217,936 741,010 1,679,316
-------- ---------- --------- -----------
Net unrealized appreciation (depreciation) during the
period................................................... 17,871 4,217,936 741,390 1,461,520
-------- ---------- --------- -----------
Net realized and unrealized gain (loss) on investments and
foreign currencies............................................... 22,177 5,440,786 36,983 172,356
-------- ---------- --------- -----------
Net increase (decrease) in net assets resulting from operations.... $ 25,602 $5,673,064 $ 207,022 $ 337,437
======== ========== ========= ===========
* Net of foreign withholding taxes of.............................. $ 200 $ -- $ 35,978 $ 34,936

</TABLE>
<TABLE>
<CAPTION>
G.T. GLOBAL:
-------------------------
MONEY VARIABLE
MARKET INTERNATIONAL
FUND FUND
-------- -------------
<S> <C> <C>
Investment income (Note 1):
Dividends....................................................... $ -- $ 37,571
Interest........................................................ 492,454 13,793
-------- ---------
Total investment income*........................................ 492,454 51,364
-------- ---------

Expenses:
Investment management and administration fees
(Note 2)...................................................... 41,091 14,415
Audit fees...................................................... 9,050 13,050
Custodian and fund accounting fees (Note 1)..................... 18,100 6,104
Legal fees...................................................... 2,715 2,715
Printing and postage expenses................................... 18,100 18,100
Registration fees............................................... 1,810 1,810
Trustees' fees and expenses (Note 2)............................ 1,810 1,810
Amortization of organizational expenses (Note 1)................ 3,106 --
-------- ---------
Total expenses.................................................. 95,782 58,004
-------- ---------

Expenses reimbursed by G.T. Capital Management,
Inc. (Note 2)............................................... (34,145) (39,981)
Other expense reductions (Notes 1 & 5)........................ -- (4)

Total net expenses after reimbursement and reductions........... 61,637 18,019
-------- ---------

Net investment income (loss)....................................... 430,817 33,345
-------- ---------

Net realized and unrealized gain (loss) on investments
and foreign currencies (Note 1):
Net realized gain (loss) on investments......................... -- (192,058)
Net realized gain (loss) on foreign currency transactions....... -- (115,913)
-------- ---------

Net realized gain (loss) during the period................. -- (307,971)
-------- ---------

Net change in unrealized appreciation (depreciation) on
translation of assets and liabilities in foreign currencies... -- (10,792)
Net change in unrealized appreciation (depreciation) of
investments................................................... -- 172,150
-------- ---------

Net unrealized appreciation (depreciation) during the
period................................................... -- 161,358
-------- ---------

Net realized and unrealized gain (loss) on investments and
foreign currencies............................................... -- (146,613)
-------- ---------

Net increase (decrease) in net assets resulting from operations.... $430,817 $(113,268)
======== =========

* Net of foreign withholding taxes of.............................. $ -- $ 7,192

</TABLE>

** The Variable Infrastructure and Variable Natural Resources Funds did not
commence operations until January 31, 1995.

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

F-119

<PAGE> 255
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

STATEMENTS OF CHANGES IN NET ASSETS

Six months ended June 30, 1995 (Unaudited)

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

of assets and liabilities in foreign currencies . . . . . . . . . . . . . . (6,945) (18,183)
Net change in unrealized appreciation (depreciation) of investments . . . . . 1,039,471 278,339
------------ -----------

Net increase (decrease) in net assets resulting from operations . . . . . . . 2,018,236 1,056,368
------------ -----------

Distributions to shareholders: (Note 1)
From net investment income. . . . . . . . . . . . . . . . . . . . . . . . . . (980,623) (354,376)
From net realized gain on investments . . . . . . . . . . . . . . . . . . . . -- --

Capital share transactions: (Note 4)
Increase from capital shares sold and reinvested. . . . . . . . . . . . . . . 14,156,803 4,236,219
Decrease from capital shares repurchased. . . . . . . . . . . . . . . . . . . (14,689,622) (3,769,178)
------------ -----------

Net increase (decrease) from capital share transactions . . . . . . . . . . . (532,819) 467,041
------------ -----------

Total increase (decrease) in net assets. . . . . . . . . . . . . . . . . . . . . 504,794 1,169,033
Net assets:
Beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,367,416 9,653,603
------------ -----------

End of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 23,872,210 $10,822,636
============ ===========

<CAPTION>
G.T. GLOBAL:
-----------------------------
VARIABLE U.S. VARIABLE
GOVERNMENT LATIN AMERICA
INCOME FUND FUND
------------- -------------
<S> <C> <C>
Increase (decrease) in net assets Operations:
Net investment income (loss). . . . . . . . . . . . . . . . . . . . . . . . . $ 104,912 $ 475,823
Net realized gain (loss) on investments and foreign currency transactions . . (13,037) (5,448,880)
Net change in unrealized appreciation (depreciation) on translation

of assets and liabilities in foreign currencies . . . . . . . . . . . . . . -- (6,330)
Net change in unrealized appreciation (depreciation) of investments . . . . . 236,728 (603,038)
------------ ------------

Net increase (decrease) in net assets resulting from operations . . . . . . . 328,603 (5,582,425)
------------ ------------

Distributions to shareholders: (Note 1)
From net investment income. . . . . . . . . . . . . . . . . . . . . . . . . . (97,468) (225,408)
From net realized gain on investments . . . . . . . . . . . . . . . . . . . . -- (2,769,692)

Capital share transactions: (Note 4)
Increase from capital shares sold and reinvested. . . . . . . . . . . . . . . 13,585,780 22,085,557
Decrease from capital shares repurchased. . . . . . . . . . . . . . . . . . . (12,100,588) (19,268,879)
------------ ------------

Net increase (decrease) from capital share transactions . . . . . . . . . . . 1,485,192 2,816,678
------------ ------------

Total increase (decrease) in net assets. . . . . . . . . . . . . . . . . . . . . 1,716,327 (5,760,847)
Net assets:
Beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,414,745 26,631,336
------------ ------------

End of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,131,072 $ 20,870,489
============ ============
</TABLE>

================================================================================

For the year ended December 31, 1994

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

<TABLE>
<CAPTION>
G.T. GLOBAL:
------------------------------
VARIABLE VARIABLE GLOBAL
STRATEGIC GOVERNMENT
INCOME FUND INCOME FUND
------------ ---------------
<S> <C> <C>
Increase in net assets
Operations:
Net investment income (loss). . . . . . . . . . . . . . . . . . . . . . . . . $ 1,761,766 $ 636,934
Net realized gain (loss) on investments and foreign currency transactions . . (3,861,004) (1,287,732)
Net change in unrealized appreciation (depreciation) on translation . . . . .
of assets and liabilities in foreign currencies . . . . . . . . . . . . . . (72,024) (15,202)
Net change in unrealized appreciation (depreciation) of investments . . . . . (1,980,697) (103,152)
------------ -----------

Net increase (decrease) in net assets resulting from operations . . . . . . . (4,151,959) (769,152)
------------ -----------

Distributions to shareholders: (Note 1). . . . . . . . . . . . . . . . . . . . .

From net investment income. . . . . . . . . . . . . . . . . . . . . . . . . . (1,533,744) (604,061)
From net realized gain on investments . . . . . . . . . . . . . . . . . . . . (877,393) --
In excess of net realized gain on investments -- --
Return of capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (93,845) (69,860)

Capital share transactions: (Note 4)

Increase from capital shares sold and reinvested. . . . . . . . . . . . . . . 26,867,913 11,332,658
Decrease from capital shares repurchased. . . . . . . . . . . . . . . . . . . (14,932,250) (6,371,492)
------------ -----------

Net increase from capital share transactions. . . . . . . . . . . . . . . . . 11,935,663 4,961,166
------------ -----------

Total increase in net assets . . . . . . . . . . . . . . . . . . . . . . . . . . 5,278,722 3,518,093
Net assets:
Beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,088,694 6,135,510
------------ -----------

End of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 23,367,416 $ 9,653,603
============ ===========

<CAPTION>
G.T. GLOBAL:
-----------------------------
VARIABLE U.S. VARIABLE
GOVERNMENT LATIN AMERICA
INCOME FUND FUND
------------- -------------
<S> <C> <C>
Increase in net assets
Operations:
Net investment income (loss). . . . . . . . . . . . . . . . . . . . . . . . . $ 93,354 $ 167,407
Net realized gain (loss) on investments and foreign currency transactions . . (71,665) 2,726,006
Net change in unrealized appreciation (depreciation) on translation . . . . .
of assets and liabilities in foreign currencies . . . . . . . . . . . . . . (101,640) (1,004)
Net change in unrealized appreciation (depreciation) of investments . . . . . -- (2,572,849)
----------- ------------

Net increase (decrease) in net assets resulting from operations . . . . . . . (79,951) 319,560
----------- ------------

Distributions to shareholders: (Note 1). . . . . . . . . . . . . . . . . . . . .

From net investment income. . . . . . . . . . . . . . . . . . . . . . . . . . (94,526) (33,315)
From net realized gain on investments . . . . . . . . . . . . . . . . . . . . (9,966) (58,519)
In excess of net realized gain on investments -- --
Return of capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- --

Capital share transactions: (Note 4)

Increase from capital shares sold and reinvested. . . . . . . . . . . . . . . 4,795,207 37,598,809
Decrease from capital shares repurchased. . . . . . . . . . . . . . . . . . . (3,169,722) (19,435,079)
----------- ------------

Net increase from capital share transactions. . . . . . . . . . . . . . . . . 1,625,485 18,163,730
----------- ------------

Total increase in net assets . . . . . . . . . . . . . . . . . . . . . . . . . . 1,441,042 18,391,456
Net assets:
Beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 973,703 8,239,880
----------- ------------

End of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,414,745 $ 26,631,336
=========== ============
</TABLE>

- ------------
* The Variable International and Variable Emerging Markets Funds did not
commence operations until July 5, 1994.
** The Variable Infrastructure and Variable Natural Resources Funds did not
commence operations until January 31, 1995.

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

F-120

<PAGE> 256

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

STATEMENTS OF CHANGES IN NET ASSETS

Six months ended June 30, 1995 (Unaudited)

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

<TABLE>
<CAPTION>
G.T. GLOBAL:
--------------------------------------------
VARIABLE VARIABLE TELE- VARIABLE
GROWTH & COMMUNICATIONS EMERGING
INCOME FUND FUND MARKETS FUND*
----------- -------------- -------------
<S> <C> <C> <C>
Increase (decrease) in net assets Operations:
Net investment income (loss). . . . . . . . . . . . . . . . . . . . . . . . . $ 590,754 $ 54,981 $ 80,686
Net realized gain (loss) on investments and foreign currency transactions . . (1,009,143) 1,638,909 (1,034,054)
Net change in unrealized appreciation (depreciation) on translation

of assets and liabilities in foreign currencies . . . . . . . . . . . . . . (237,455) (60,600) 1,398
Net change in unrealized appreciation (depreciation) of investments . . . . . 2,060,011 3,873,108 584,319
----------- ----------- -----------

Net increase (decrease) in net assets resulting from operations . . . . . . . 1,404,167 5,506,398 (367,651)
----------- ----------- -----------

Distributions to shareholders: (Note 1)
From net investment income. . . . . . . . . . . . . . . . . . . . . . . . . . (401,898) (80,457) --
From net realized gain on investments . . . . . . . . . . . . . . . . . . . . -- (965,478) --

Capital share transactions: (Note 4)
Increase from capital shares sold and reinvested. . . . . . . . . . . . . . . 4,994,302 9,268,902 6,464,902
Decrease from capital shares repurchased. . . . . . . . . . . . . . . . . . . (3,840,605) (6,280,933) (5,462,848)

Net increase (decrease) from capital share transactions . . . . . . . . . . . 1,153,697 2,987,969 1,002,054
----------- ----------- -----------

Total increase (decrease) in net assets. . . . . . . . . . . . . . . . . . . . . 2,155,966 7,448,432 634,403
Net assets:
Beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,580,238 36,028,527 7,266,625
----------- ----------- -----------

End of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $27,736,204 $43,476,959 $ 7,901,028
=========== =========== ===========

<CAPTION>
G.T. GLOBAL:
----------------------------------------------
VARIABLE VARIABLE VARIABLE
INFRASTRUCTURE NATURAL RE- AMERICA
FUND** SOURCES FUND** FUND
-------------- -------------- --------
<S> <C> <C> <C>
Increase (decrease) in net assets Operations:
Net investment income (loss). . . . . . . . . . . . . . . . . . . . . . . . . $ 3,137 $ 3,425 $ 232,278
Net realized gain (loss) on investments and foreign currency transactions . . 9,498 4,306 1,222,850
Net change in unrealized appreciation (depreciation) on translation

of assets and liabilities in foreign currencies . . . . . . . . . . . . . . 3 (53) --
Net change in unrealized appreciation (depreciation) of investments . . . . . 26,673 17,924 4,217,936
--------- ---------- ------------

Net increase (decrease) in net assets resulting from operations . . . . . . . 39,311 25,602 5,673,064
--------- ---------- ------------

Distributions to shareholders: (Note 1)
From net investment income. . . . . . . . . . . . . . . . . . . . . . . . . . -- -- (117,889)
From net realized gain on investments . . . . . . . . . . . . . . . . . . . . -- -- (488,399)

Capital share transactions: (Note 4)
Increase from capital shares sold and reinvested. . . . . . . . . . . . . . . 686,461 1,167,198 28,224,098
Decrease from capital shares repurchased. . . . . . . . . . . . . . . . . . . (250,539) (717,091) (14,496,046)

Net increase (decrease) from capital share transactions . . . . . . . . . . . 435,922 450,107 13,728,052
--------- ---------- ------------

Total increase (decrease) in net assets. . . . . . . . . . . . . . . . . . . . . 475,233 475,709 18,794,828
Net assets:
Beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000 100,000 15,257,266
--------- ---------- ------------

End of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 575,233 $ 575,709 $ 34,052,094
========= ========== ============

<CAPTION>
G.T. GLOBAL:
-------------------------
VARIABLE VARIABLE
NEW PACIFIC EUROPE
FUND FUND
----------- --------
<S> <C> <C>
Increase (decrease) in net assets Operations:
Net investment income (loss). . . . . . . . . . . . . . . . . . . . . . . . . $ 170,039 $ 165,081
Net realized gain (loss) on investments and foreign currency transactions . . (704,407) (1,289,164)
Net change in unrealized appreciation (depreciation) on translation

of assets and liabilities in foreign currencies . . . . . . . . . . . . . . 380 (217,796)
Net change in unrealized appreciation (depreciation) of investments . . . . . 741,010 1,679,316
------------ -----------

Net increase (decrease) in net assets resulting from operations . . . . . . . 207,022 337,437
------------ -----------

Distributions to shareholders: (Note 1)
From net investment income. . . . . . . . . . . . . . . . . . . . . . . . . . (75,348) (154,451)
From net realized gain on investments . . . . . . . . . . . . . . . . . . . . -- --

Capital share transactions: (Note 4)
Increase from capital shares sold and reinvested. . . . . . . . . . . . . . . 43,083,846 8,750,796
Decrease from capital shares repurchased. . . . . . . . . . . . . . . . . . . (42,301,797) (8,669,528)

Net increase (decrease) from capital share transactions . . . . . . . . . . . 782,049 81,268
------------ -----------

Total increase (decrease) in net assets. . . . . . . . . . . . . . . . . . . . . 913,723 264,254
Net assets:
Beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,391,231 15,020,487
------------ -----------

End of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 20,304,954 $15,284,741
============ ===========

<CAPTION>
G.T. GLOBAL:
------------------------
MONEY VARIABLE
MARKET INTERNATIONAL
FUND FUND*
------ -------------
<S> <C> <C>
Increase (decrease) in net assets Operations:
Net investment income (loss). . . . . . . . . . . . . . . . . . . . . . . . . $ 430,817 $ 33,345
Net realized gain (loss) on investments and foreign currency transactions . . -- (307,971)
Net change in unrealized appreciation (depreciation) on translation

of assets and liabilities in foreign currencies . . . . . . . . . . . . . . -- (10,792)
Net change in unrealized appreciation (depreciation) of investments . . . . . -- 172,150
------------ -----------

Net increase (decrease) in net assets resulting from operations . . . . . . . 430,817 (113,268)
------------ -----------

Distributions to shareholders: (Note 1)
From net investment income. . . . . . . . . . . . . . . . . . . . . . . . . . (430,817) --
From net realized gain on investments . . . . . . . . . . . . . . . . . . . . -- (4,195)

Capital share transactions: (Note 4)
Increase from capital shares sold and reinvested. . . . . . . . . . . . . . . 67,699,176 9,086,747
Decrease from capital shares repurchased. . . . . . . . . . . . . . . . . . . (71,498,887) (8,200,427)

Net increase (decrease) from capital share transactions . . . . . . . . . . . (3,799,711) 886,320
------------ -----------

Total increase (decrease) in net assets. . . . . . . . . . . . . . . . . . . . . (3,799,711) 768,857
Net assets:
Beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,473,722 2,228,920
------------ -----------

End of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 15,674,011 $ 2,997,777
============ ===========
</TABLE>

================================================================================

For the year ended December 31, 1994

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

<TABLE>
<CAPTION>
G.T. GLOBAL:
--------------------------------------------
VARIABLE VARIABLE TELE- VARIABLE
GROWTH & COMMUNICATIONS EMERGING
INCOME FUND FUND MARKETS FUND*
----------- -------------- -------------
<S> <C> <C> <C>
Increase in net assets
Operations:
Net investment income (loss). . . . . . . . . . . . . . . . . . . . . . . . . $ 778,934 $ 73,852 $ 40,749
Net realized gain (loss) on investments and foreign currency transactions . . (310,777) 913,277 (45,847)
Net change in unrealized appreciation (depreciation) on translation . . . . .

of assets and liabilities in foreign currencies . . . . . . . . . . . . . . (4,932) 29,242 (194)
Net change in unrealized appreciation (depreciation) of investments . . . . . (1,038,064) 1,222,998 (521,253)
----------- ------------ -----------

Net increase (decrease) in net assets resulting from operations . . . . . . . (574,839) 2,239,369 (526,545)
----------- ------------ -----------

Distributions to shareholders: (Note 1). . . . . . . . . . . . . . . . . . . . .

From net investment income. . . . . . . . . . . . . . . . . . . . . . . . . . (644,305) (31,627) (40,749)
From net realized gain on investments . . . . . . . . . . . . . . . . . . . . -- -- --
In excess of net realized gain on investments -- -- (34,465)
Return of capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- -- --

Capital share transactions: (Note 4)

Increase from capital shares sold and reinvested. . . . . . . . . . . . . . . 21,823,916 36,093,905 11,452,183
Decrease from capital shares repurchased. . . . . . . . . . . . . . . . . . . (6,701,077) (10,175,735) (3,583,799)
----------- ------------ -----------

Net increase from capital share transactions. . . . . . . . . . . . . . . . . 15,122,839 25,918,170 7,868,384
----------- ------------ -----------

Total increase in net assets . . . . . . . . . . . . . . . . . . . . . . . . . . 13,903,695 28,125,912 7,266,625
Net assets:
Beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,676,543 7,902,615 --
----------- ------------ -----------

End of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $25,580,238 $ 36,028,527 $ 7,266,625
=========== ============ ===========

<CAPTION>
G.T. GLOBAL:
---------------------------------------------
VARIABLE VARIABLE VARIABLE
INFRASTRUCTURE NATURAL RE- AMERICA
FUND** SOURCES FUND** FUND
-------------- -------------- --------
<S> <C> <C> <C>
Increase in net assets
Operations:
Net investment income (loss). . . . . . . . . . . . . . . . . . . . . . . . . -- -- $ 126,208
Net realized gain (loss) on investments and foreign currency transactions . . -- -- 480,878
Net change in unrealized appreciation (depreciation) on translation . . . . .

of assets and liabilities in foreign currencies . . . . . . . . . . . . . . -- -- --
Net change in unrealized appreciation (depreciation) of investments . . . . . -- -- 365,915
-------------- -------------- ------------

Net increase (decrease) in net assets resulting from operations . . . . . . . -- -- 973,001
-------------- -------------- ------------

Distributions to shareholders: (Note 1). . . . . . . . . . . . . . . . . . . . .

From net investment income. . . . . . . . . . . . . . . . . . . . . . . . . . -- -- (136,601)
From net realized gain on investments . . . . . . . . . . . . . . . . . . . . -- -- --
In excess of net realized gain on investments -- -- --
Return of capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- -- --

Capital share transactions: (Note 4)

Increase from capital shares sold and reinvested. . . . . . . . . . . . . . . -- -- 21,471,531
Decrease from capital shares repurchased. . . . . . . . . . . . . . . . . . . -- -- (8,750,561)
-------------- -------------- ------------

Net increase from capital share transactions. . . . . . . . . . . . . . . . . -- -- 12,720,970
-------------- -------------- ------------

Total increase in net assets . . . . . . . . . . . . . . . . . . . . . . . . . . -- -- 13,557,370
Net assets:
Beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- -- 1,699,896
-------------- -------------- ------------

End of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- -- $ 15,257,266
============== ============== ============

<CAPTION>
G.T. GLOBAL:
----------------------------
VARIABLE VARIABLE
NEW PACIFIC EUROPE
FUND FUND
----------- --------
<S> <C> <C>
Increase in net assets
Operations:
Net investment income (loss). . . . . . . . . . . . . . . . . . . . . . . . . $ 129,772 $ 186,123
Net realized gain (loss) on investments and foreign currency transactions . . (441,437) (212,500)
Net change in unrealized appreciation (depreciation) on translation . . . . .

of assets and liabilities in foreign currencies . . . . . . . . . . . . . . (28,748) 101,790
Net change in unrealized appreciation (depreciation) of investments . . . . . (1,706,578) (402,308)
------------ ------------

Net increase (decrease) in net assets resulting from operations . . . . . . . (2,046,991) (326,895)
------------ ------------

Distributions to shareholders: (Note 1). . . . . . . . . . . . . . . . . . . . .

From net investment income. . . . . . . . . . . . . . . . . . . . . . . . . . (51,590) (1,710)
From net realized gain on investments . . . . . . . . . . . . . . . . . . . . -- (12,542)
In excess of net realized gain on investments -- --
Return of capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- --

Capital share transactions: (Note 4)

Increase from capital shares sold and reinvested. . . . . . . . . . . . . . . 40,348,942 21,078,341
Decrease from capital shares repurchased. . . . . . . . . . . . . . . . . . . (26,803,641) (11,126,870)
------------ ------------

Net increase from capital share transactions. . . . . . . . . . . . . . . . . 13,545,301 9,951,471
------------ ------------

Total increase in net assets . . . . . . . . . . . . . . . . . . . . . . . . . . 11,446,720 9,610,324
Net assets:
Beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,944,511 5,410,163
------------ ------------

End of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 19,391,231 $ 15,020,487
============ ============

<CAPTION>
G.T. GLOBAL:
---------------------------
MONEY VARIABLE
MARKET INTERNATIONAL
FUND FUND*
------ -------------
<S> <C> <C>
Increase in net assets
Operations:
Net investment income (loss). . . . . . . . . . . . . . . . . . . . . . . . . $ 387,604 $ 11,394
Net realized gain (loss) on investments and foreign currency transactions . . -- (7,154)
Net change in unrealized appreciation (depreciation) on translation . . . . .

of assets and liabilities in foreign currencies . . . . . . . . . . . . . . -- 6,134
Net change in unrealized appreciation (depreciation) of investments . . . . . -- (136,910)
------------ ------------

Net increase (decrease) in net assets resulting from operations . . . . . . . 387,604 (126,536)
------------ ------------

Distributions to shareholders: (Note 1). . . . . . . . . . . . . . . . . . . . .

From net investment income. . . . . . . . . . . . . . . . . . . . . . . . . . (387,604) (9,954)
From net realized gain on investments . . . . . . . . . . . . . . . . . . . . --
In excess of net realized gain on investments -- --
Return of capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- --

Capital share transactions: (Note 4)

Increase from capital shares sold and reinvested. . . . . . . . . . . . . . . 75,875,884 4,426,908
Decrease from capital shares repurchased. . . . . . . . . . . . . . . . . . . (60,177,597) (2,061,498)
------------ ------------

Net increase from capital share transactions. . . . . . . . . . . . . . . . . 15,698,287 2,365,410
------------ ------------

Total increase in net assets . . . . . . . . . . . . . . . . . . . . . . . . . . 15,698,287 2,228,920
Net assets:
Beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,775,435 --
------------ ------------

End of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 19,473,722 $ 2,228,920
============ ============
</TABLE>

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

F-121

<PAGE> 257
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

FINANCIAL HIGHLIGHTS

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

<TABLE>
<CAPTION>
G.T. GLOBAL:
-------------------------------------------------------------
VARIABLE STRATEGIC INCOME FUND
-------------------------------------------------------------
SIX MONTHS FEBRUARY 10, 1993 (COM-
ENDED JUNE 30, YEAR ENDED MENCEMENT OF OPERATIONS)
1995 (UNAUDITED) DECEMBER 31, 1994 TO DECEMBER 31, 1993
---------------- ----------------- ------------------------
<S> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period........................... $ 10.82 $ 14.57 $ 12.00
------- ------- -------
Net investment income (loss)................................ 0.54(a) 1.71(b) 0.61(c)
Net realized and unrealized gain (loss) on investments...... 0.49 (4.17) 2.57
------- ------- -------
Net increase(decrease) resulting from operations.......... 1.03 (2.46) 3.18
------- ------- -------
Distributions to shareholders:
From net investment income.................................. (0.48) (0.79) (0.61)
From net realized gain on investments....................... -- (0.45) --
In excess of net realized gain on investments............... -- -- --
Return of capital........................................... -- (0.05) --
------- ------- -------
Total distributions....................................... (0.48) (1.29) (0.61)
Net asset value, end of period................................. $ 11.37 $ 10.82 $ 14.57
======= ======= =======
Total investment return........................................ 9.84% (17.09)% 27.5%
======= ======= =======

Ratios and supplemental data:
Net assets, end of period (in 000's)........................... $23,872 $23,367 $18,089
Ratio of net investment income (loss) to average net assets:
With reimbursement by G.T. Capital and expense reductions
(Notes 1, 2, & 5) (++)..................................... 10.05% 7.58% 6.6%
Without reimbursement by G.T. Capital and expense
reductions (++)............................................ 9.85% 7.43% 6.3%
Without expenses assumed by G.T. Capital (d) (++)........... --% --% 5.2%
Ratio of expenses to average net assets:
With reimbursement by G.T. Capital and expense reductions
(Notes 1, 2, & 5) (++).. 1.00% 1.00% 0.5%
Without reimbursement by G.T. Capital and expense
reductions (++)............................................ 1.20% 1.15% 0.9%
Without expenses assumed by G.T. Capital (d) (++)........... --% --% 1.9%
Portfolio turnover (++)........................................ 245% 313% 245%
=====================================================================================================================
</TABLE>

<TABLE>
<CAPTION>
G.T. GLOBAL:
-------------------------------------------------------------
VARIABLE GROWTH & INCOME FUND
-------------------------------------------------------------
SIX MONTHS FEBRUARY 10, 1993 (COM-
ENDED JUNE 30, YEAR ENDED MENCEMENT OF OPERATIONS)
1995 (UNAUDITED) DECEMBER 31, 1994 TO DECEMBER 31, 1993
---------------- ----------------- ------------------------
<S> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.......................... $ 12.99 $ 13.77 $ 12.00
------- ------- -------
Net investment income (loss)............................... 0.29(a) 0.46(b) 0.31(c)
Net realized and unrealized gain (loss) on investments..... 0.41 (0.85) 1.79
------- ------- -------
Net increase(decrease) resulting from operations......... 0.70 (0.39) 2.10
------- ------- -------
Distributions to shareholders:
From net investment income................................. (0.20) (0.39) (0.28)
From net realized gain on investments...................... -- -- (0.05)
In excess of net realized gain on investments.............. -- -- --
Return of capital.......................................... -- -- --
------- ------- -------
Total distributions...................................... (0.20) (0.39) (0.33)
Net asset value, end of period................................ $ 13.49 $ 12.99 $ 13.77
======= ======= =======
Total investment return....................................... 5.42% (2.85)% 17.8%
======= ======= =======

Ratios and supplemental data:
Net assets, end of period (in 000's).......................... $27,736 $25,580 $11,677
Ratio of net investment income (loss) to average net assets:
With reimbursement by G.T. Capital and expense reductions
(Notes 1, 2, & 5) (++).................................... 4.50% 3.69% 3.2%
Without reimbursement by G.T. Capital and expense
reductions (++)........................................... 4.23% 3.45% 2.7%
Without expenses assumed by G.T. Capital (d) (++).......... --% --% 1.1%
Ratio of expenses to average net assets:
With reimbursement by G.T. Capital and expense reductions
(Notes 1, 2, & 5) (++).................................... 1.23% 1.25% 0.6%
Without reimbursement by G.T. Capital and expense
reductions (++)........................................... 1.50% 1.49% 1.2%
Without expenses assumed by G.T. Capital (d) (++).......... --% --% 2.8%
Portfolio turnover (++)....................................... 79% 53% 17%
</TABLE>

(a) Includes reimbursement by G.T. Capital Management, Inc. of Fund operating
expenses of $0.01 for the Variable Strategic Income Fund, $0.06 for the
Variable Global Government Income Fund, $0.11 for the Variable U.S.
Government Income Fund, $0.04 for the Variable Latin America Fund, $0.02 for
the Variable Growth & Income Fund, $0.01 for the Variable Telecommunications
Fund, $0.09 for the Variable Emerging Markets Fund, $0.77 for the Variable
Infrastructure Fund, and $0.73 for the Variable Natural Resources Fund (Note
2).

(b) Includes reimbursement by G.T. Capital Management, Inc. of Fund operating
expenses of $0.04 for the Variable Strategic Income Fund, $0.08 for the
Variable Global Government Income Fund, $0.48 for the Variable U.S.
Government Income Fund, $0.04 for the Variable Latin America Fund, $0.03 for
the Variable Growth & Income Fund, $0.01 for the Variable Telecommunications
Fund, and $0.07 for the Variable Emerging Markets Fund(Note 2).

(c) Includes reimbursement by G.T. Capital Management, Inc. of Fund operating
expenses of $0.03 for the Variable Strategic Income Fund, $0.06 for the
Variable Global Government Income Fund, $0.19 for the Variable U.S.
Government Income Fund, $0.02 for the Variable Latin America Fund, $0.05 for
the Variable Growth & Income Fund, and $0.00 for the Variable
Telecommunications Fund (Note 2).

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

F-122
<PAGE> 258

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

FINANCIAL HIGHLIGHTS

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
G.T. GLOBAL:
--------------------------------------------------------------
VARIABLE GLOBAL GOVERNMENT INCOME FUND
--------------------------------------------------------------
SIX MONTHS FEBRUARY 10, 1993 (COM-
ENDED JUNE 30, YEAR ENDED MENCEMENT OF OPERATIONS)
1995 (UNAUDITED) DECEMBER 31, 1994 TO DECEMBER 31, 1993
----------------- ----------------- ------------------------
<S> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period........................... $ 10.63 $ 12.53 $ 12.00
--------- --------- --------
Net investment income (loss)................................ 0.39(a) 0.77(b) 0.57(c)
Net realized and unrealized gain (loss) on investments...... 0.77 (1.85) 0.52
--------- --------- --------
Net increase(decrease) resulting from operations.......... 1.16 (1.08) 1.09
--------- --------- --------
Distributions to shareholders:
From net investment income.................................. (0.39) (0.73) (0.56)
From net realized gain on investments....................... -- -- --
In excess of net realized gain on investments............... -- -- --
Return of capital........................................... -- (0.09) --
--------- --------- --------
Total distributions....................................... (0.39) (0.82) (0.56)
Net asset value, end of period................................. $ 11.40 $ 10.63 $ 12.53
========= ========= ========
Total investment return........................................ 11.04% (8.70)% 9.5%
========= ========= ========

Ratios and supplemental data:
Net assets, end of period (in 000's)........................... $ 10,823 $ 9,654 $ 6,136
Ratio of net investment income (loss) to average net assets:
With reimbursement by G.T. Capital and expense reductions
(Notes 1, 2, & 5) (++)..................................... 7.08% 6.89% 6.1%
Without reimbursement by G.T. Capital and expense
reductions (++)............................................ 6.03% 6.21% 5.5%
Without expenses assumed by G.T. Capital (d) (++)........... --% --% 2.4%
Ratio of expenses to average net assets:
With reimbursement by G.T. Capital and expense reductions
(Notes 1, 2, & 5) (++).. 1.00% 1.00% 0.5%
Without reimbursement by G.T. Capital and expense
reductions (++)............................................ 2.05% 1.68% 1.1%
Without expenses assumed by G.T. Capital (d) (++)........... --% --% 4.2%
Portfolio turnover (++)........................................ 433% 350% 298%

<CAPTION>
G.T. GLOBAL:
-------------------------------------------------------------
VARIABLE U.S. GOVERNMENT INCOME FUND
-------------------------------------------------------------
SIX MONTHS FEBRUARY 10, 1993 (COM-
ENDED JUNE 30, YEAR ENDED MENCEMENT OF OPERATIONS)
1995 (UNAUDITED) DECEMBER 31, 1994 TO DECEMBER 31, 1993
---------------- ----------------- ------------------------
<S> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period........................... $ 10.79 $ 12.23 $ 12.00
--------- --------- ---------
Net investment income (loss)................................ 0.32(a) 0.63(b) 0.53(c)
Net realized and unrealized gain (loss) on investments...... 0.65 (1.39) 0.23
--------- --------- ---------
Net increase(decrease) resulting from operations.......... 0.97 (0.76) 0.76
--------- --------- ---------
Distributions to shareholders:
From net investment income.................................. (0.30) (0.62) (0.53)
From net realized gain on investments....................... -- (0.06) --
In excess of net realized gain on investments............... -- -- --
Return of capital........................................... -- -- --
--------- --------- ---------
Total distributions....................................... (0.30) (0.68) (0.53)
Net asset value, end of period................................. $ 11.46 $ 10.79 $ 12.23
========= ========= =========
Total investment return........................................ 9.11% (6.27)% 6.4%
========= ========= =========

Ratios and supplemental data:
Net assets, end of period (in 000's)........................... $ 4,131 $ 2,415 $ 974
Ratio of net investment income (loss) to average net assets:
With reimbursement by G.T. Capital and expense reductions
(Notes 1, 2, & 5) (++)..................................... 5.62% 5.53% 5.3%
Without reimbursement by G.T. Capital and expense
reductions (++)............................................ 3.48% 1.29% 3.4%
Without expenses assumed by G.T. Capital (d) (++)........... --% --% (6.9)%
Ratio of expenses to average net assets:
With reimbursement by G.T. Capital and expense reductions
(Notes 1, 2, & 5) (++).. 1.00% 0.38% 0.0%
Without reimbursement by G.T. Capital and expense
reductions (++)............................................ 3.14% 4.63% 1.9%
Without expenses assumed by G.T. Capital (d) (++)........... --% --% 12.3%
Portfolio turnover (++)........................................ 272% 34% 81%

<CAPTION>
G.T. GLOBAL:
-------------------------------------------------------------
VARIABLE LATIN AMERICA FUND
-------------------------------------------------------------
SIX MONTHS FEBRUARY 10, 1993 (COM-
ENDED JUNE 30, YEAR ENDED MENCEMENT OF OPERATIONS)
1995 (UNAUDITED) DECEMBER 31, 1994 TO DECEMBER, 31, 1993
---------------- ----------------- ------------------------
<S> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period........................... $ 19.17 $ 17.68 $ 12.00
--------- --------- ---------
Net investment income (loss)................................ 0.30(a) 0.11(b) 0.04(c)
Net realized and unrealized gain (loss) on investments...... (4.45) 1.49 5.64
--------- --------- ---------
Net increase(decrease) resulting from operations.......... (4.15) 1.60 5.68
--------- --------- ---------
Distributions to shareholders:
From net investment income.................................. (0.16) (0.04) --
From net realized gain on investments....................... (2.00) (0.07) --
In excess of net realized gain on investments............... -- -- --
Return of capital........................................... -- -- --
--------- --------- ---------
Total distributions....................................... (2.16) (0.11) --
Net asset value, end of period................................. $ 12.86 $ 19.17 $ 17.68
========= ========= =========
Total investment return........................................ (21.45)% 9.14% 47.3%
========= ========= =========

Ratios and supplemental data:
Net assets, end of period (in 000's)........................... $ 20,870 $ 26,631 $ 8,240
Ratio of net investment income (loss) to average net assets:
With reimbursement by G.T. Capital and expense reductions
(Notes 1, 2, & 5) (++)..................................... 4.60% 0.82% 1.0%
Without reimbursement by G.T. Capital and expense
reductions (++)............................................ 3.89% 0.49% 0.4%
Without expenses assumed by G.T. Capital (d) (++)........... --% --% (2.5)%
Ratio of expenses to average net assets:
With reimbursement by G.T. Capital and expense reductions
(Notes 1, 2, & 5) (++).. 1.22% 1.25% 0.7%
Without reimbursement by G.T. Capital and expense
reductions (++)............................................ 1.93% 1.58% 1.3%
Without expenses assumed by G.T. Capital (d) (++)........... --% --% 4.2%
Portfolio turnover (++)........................................ 190% 185% 78%
====================================================================================================================
</TABLE>

<TABLE>
<CAPTION>
G.T. GLOBAL:
-----------------------------------------------------------
VARIABLE TELECOMMUNICATIONS FUND*
-----------------------------------------------------------
SIX MONTHS -
ENDED JUNE 30, YEAR ENDED OCTOBER 18, 1993
1995 (UNAUDITED) DECEMBER 31, 1994 TO DECEMBER, 31, 1993
---------------- ----------------- ---------------------
<S> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.......................... $ 13.98 $ 13.07 $ 12.00
--------- -------- ---------
Net investment income (loss)............................... 0.02(a) 0.01(b) 0.04(c)
Net realized and unrealized gain (loss) on investments..... 2.07 0.92 1.03
--------- -------- ---------
Net increase(decrease) resulting from operations......... 2.09 0.93 1.07
--------- -------- ---------
Distributions to shareholders:
From net investment income................................. (0.03) (0.02) --
From net realized gain on investments...................... (0.36) -- --
In excess of net realized gain on investments.............. -- -- --
Return of capital.......................................... -- -- --
--------- -------- ---------
Total distributions...................................... (0.39) (0.02) --
Net asset value, end of period................................ $ 15.68 $ 13.98 $ 13.07
========= ======== =========
Total investment return....................................... 15.01% 7.15% 8.9%
========= ======== =========

Ratios and supplemental data:
Net assets, end of period (in 000's).......................... $ 43,477 $ 36,029 $ 7,903
Ratio of net investment income (loss) to average net assets:
With reimbursement by G.T. Capital and expense reductions
(Notes 1, 2, & 5) (++).................................... 0.30% 0.31% 2.5%
Without reimbursement by G.T. Capital and expense
reductions (++)........................................... 0.11% 0.07% 2.3%
Without expenses assumed by G.T. Capital (d) (++).......... --% --% 1.6%
Ratio of expenses to average net assets:
With reimbursement by G.T. Capital and expense reductions
(Notes 1, 2, & 5) (++).................................... 1.18% 1.25% 0.9%
Without reimbursement by G.T. Capital and expense
reductions (++)........................................... 1.37% 1.49% 1.1%
Without expenses assumed by G.T. Capital (d) (++).......... --% --% 1.8%
Portfolio turnover (++)....................................... 76% 81% 20%

<CAPTION>
G.T. GLOBAL:
-----------------------------------
VARIABLE EMERGING MARKETS FUND (**)
-----------------------------------
SIX MONTHS
ENDED JUNE 30, JULY 5, 1994 TO
1995 (UNAUDITED) DECMBER 31, 1994
---------------- ----------------
<S> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.......................... $11.89 $ 12.00
------ ---------
Net investment income (loss)............................... 0.12(a) 0.07(b)
Net realized and unrealized gain (loss) on investments..... (0.85) (0.05)
------ ---------
Net increase(decrease) resulting from operations......... (0.73) 0.02
------ ---------
Distributions to shareholders:
From net investment income................................. -- (0.07)
From net realized gain on investments...................... -- --
In excess of net realized gain on investments.............. -- (0.06)
Return of capital.......................................... -- --
------ ---------
Total distributions...................................... -- (0.13)
Net asset value, end of period................................ $11.16 $ 11.89
====== =========
Total investment return....................................... (6.14)% 0.12%
====== =========

Ratios and supplemental data:
Net assets, end of period (in 000's).......................... $7,901 $ 7,267
Ratio of net investment income (loss) to average net assets:
With reimbursement by G.T. Capital and expense reductions
(Notes 1, 2, & 5) (++).................................... 2.54% 4.10%
Without reimbursement by G.T. Capital and expense
reductions (++)........................................... 0.53% (0.20)%
Without expenses assumed by G.T. Capital (d) (++).......... --% --%
Ratio of expenses to average net assets:
With reimbursement by G.T. Capital and expense reductions
(Notes 1, 2, & 5) (++).................................... 1.23% 0.00%
Without reimbursement by G.T. Capital and expense
reductions (++)........................................... 3.24% 4.30%
Without expenses assumed by G.T. Capital (d) (++).......... --% --%
Portfolio turnover (++)....................................... 203% 117%

<CAPTION>
G.T. GLOBAL:
--------------------------------------------------------------------------
VARIABLE INFRASTRUCTURE FUND*** VARIABLE NATURAL RESOURCES FUND***
---------------------------------- -------------------------------------

JANUARY 31,1995 JANUARY 31,1995
TO JUNE 30, 1995 (UNAUDITED) TO JUNE 30, 1995 (UNAUDITED)
---------------------------------- -------------------------------------
<S> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period................... $ 12.00 $ 12.00
--------- ---------
Net investment income (loss)........................ 0.07(a) 0.08(a)
Net realized and unrealized gain (loss) on
investments........................................ 1.16 1.20
--------- ---------
Net increase(decrease) resulting from operations.. 1.23 1.28
--------- ---------
Distributions to shareholders:
From net investment income.......................... -- --
From net realized gain on investments............... -- --
In excess of net realized gain on investments....... -- --
Return of capital................................... -- --
--------- ---------
Total distributions............................... -- --
Net asset value, end of period......................... $ 13.23 $ 13.28
========= =========
Total investment return................................ 10.25% 10.67%
========= =========

Ratios and supplemental data:
Net assets, end of period (in 000's)................... $ 575 $ 576
Ratio of net investment income (loss) to average
net assets:
With reimbursement by G.T. Capital and expense
reductions (Notes 1, 2, & 5) (++).................. 2.28% 3.51%
Without reimbursement by G.T. Capital and expense
reductions (++).................................... (22.04)% (28.83)%
Without expenses assumed by G.T.
Capital (d) (++)................................... --% --%
Ratio of expenses to average net assets:
With reimbursement by G.T. Capital and expense
reductions (Notes 1, 2, & 5) (++).................. 1.25% 1.16%
Without reimbursement by G.T. Capital and expense
reductions (++).................................... 25.57% 33.50%
Without expenses assumed by G.T. Capital (d) (++)... --% --%
Portfolio turnover (++)................................ 90% 195%
</TABLE>

- ---------------
(d) During the period ended December 31, 1993, G.T. Capital voluntarily assumed
certain expenses for the Funds (Note 2).

+ Not annualized for periods less than one year.

++ Annualized for periods less than one year.

* The Variable Telecommunications Fund did not commence operations until
October 18, 1993.

** The Variable Emerging Markets Fund did not commence operations until July 5,
1994.

*** The Variable Infrastructure and Variable Natural Resources Funds did not
commence operations until January 31, 1995.

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

F-123
<PAGE> 259
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

FINANCIAL HIGHLIGHTS

- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding,
total investment return, ratios and supplemental data. This information has been
derived from information provided in the financial statements.

<TABLE>
<CAPTION>
G.T. GLOBAL:
------------
VARIABLE AMERICA FUND
-------------------------------------------------------------
SIX MONTHS FEBRUARY 10, 1993 (COM-
ENDED JUNE 30, YEAR ENDED MENCEMENT OF OPERATIONS)
1995 (UNAUDITED) DECEMBER 31, 1994 TO DECEMBER 31, 1993
---------------- ----------------- ------------------------
<S> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period................................ $ 15.81 $ 13.75 $12.00
------- ------- ------
Net investment income (loss)..................................... 0.08 (a) 0.48 (b) 1.11 (c)
Net realized and unrealized gain (loss) on investments........... 3.86 2.08 0.64
------- ------- ------
Net increase(decrease) resulting from operations............... 3.94 2.56 1.75
------- ------- ------
Distributions to shareholders:
From net investment income....................................... (0.07) (0.50) --
From net realized gain on investments............................ (0.29) -- --
------- ------- ------
Total distributions............................................ (0.36) (0.50) --
Net asset value, end of period...................................... $ 19.39 $ 15.81 $13.75
======= ======= ======
Total investment return +........................................... 24.92% 18.88% 14.7%
Ratios and supplemental data:
Net assets, end of period (in 000's)................................ $34,052 $15,257 $1,700
======= ======= ======
Ratio of net investment income (loss) to average net assets:
With reimbursement by G.T. Capital and expense reductions
(Notes 1, 2, & 5)++............................................ 1.90% 1.83% 14.1%
Without reimbursement by G.T. Capital and expense reductions++... 1.74% 0.76% 12.8%
Without expenses assumed by G.T. Capital (d)++................... --% --% 7.6%
Ratio of expenses to average net assets:
With reimbursement by G.T. Capital and expense reductions
(Notes 1, 2, & 5)++............................................ 1.00% 0.98% 0.0%
Without reimbursement by G.T. Capital and expense reductions++... 1.16% 2.05% 1.3%
Without expenses assumed by G.T. Capital (d)++................... --% --% 6.5%
Portfolio turnover rate++........................................... 57% 139% 831%
</TABLE>

================================================================================

<TABLE>
<CAPTION>
G.T. GLOBAL:
------------
VARIABLE INTERNATIONAL FUND*
-----------------------------------
SIX MONTHS JULY 5, 1994, TO
ENDED JUNE 30, DECEMBER 31, 1994
1995 (UNAUDITED) 1994
---------------- -----------------
<S> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period................................ $11.25 $12.00
====== ======
Net investment income (loss)..................................... 0.12 (a) 0.06 (b)
Net realized and unrealized gain (loss) on investments........... (0.72) (0.76)
------ ------
Net increase(decrease) resulting from operations............... (0.60) (0.70)
------ ------
Distributions to shareholders:
From net investment income....................................... -- (0.05)
From net realized gain on investments............................ (0.02) --
------ ------
Total distributions............................................ (0.02) (0.05)
Net asset value, end of period...................................... $10.63 $11.25
====== ======
Total investment return +........................................... (5.38)% (5.81)%
====== ======
Ratios and supplemental data:
Net assets, end of period (in 000's)................................ $2,998 $2,229
Ratio of net investment income (loss) to average net assets:
With reimbursement by G.T. Capital and expense reductions........
(Notes 1, 2, & 5)++............................................ 2.31% 3.33%
Without reimbursement by G.T. Capital and expense reductions++... (0.46)% (2.56)%
Without expenses assumed by G.T. Capital (d)++................... --% --%
Ratio of expenses to average net assets:
With reimbursement by G.T. Capital and expense reductions........
(Notes 1, 2, & 5)++............................................ 1.25% 0.69%
Without reimbursement by G.T. Capital and expense reductions++... 4.02% 6.58%
Without expenses assumed by G.T. Capital (d)++................... --% --%
Portfolio turnover rate++........................................... 134% 17%
</TABLE>

- -------------------------
(a) Includes reimbursement by G.T. Capital Management Inc. of Fund operating
expenses of $0.01 for the Variable America Fund, $0.02 for the Variable New
Pacific Fund, $0.03 for the Variable Europe Fund, $0.00 for the Money Market
Fund, and $0.14 for the Variable International Fund (Note 2).
(b) Includes reimbursement by G.T. Capital Management, Inc. of Fund operating
expenses of $0.28 for the Variable America Fund, $0.03 for the Variable New
Pacific Fund, $0.04 for the Variable Europe Fund, $0.00 for the Money Market
Fund, and $0.11 for the Variable International Fund (Note 2).
(c) Includes reimbursement by G.T. Capital Management, Inc. of Fund operating
expenses of $0.10 for the Variable America Fund, $0.03 for the Variable New
Pacific Fund, $0.03 for the Variable Europe Fund, and $0.01 for the Money
Market Fund (Note 2).
(d) During the period ended December 31, 1993, G.T. Capital voluntarily assumed
certain expenses for the Funds (Note 2).
+ Not annualized for periods less than one year.
++ Annualized for periods less than one year.
* The Variable International Fund did not commence operations until July 5,
1994.

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

F-124

<PAGE> 260

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

FINANCIAL HIGHLIGHTS
- ---------------------------------------------------------------------

<TABLE>
<CAPTION>
G.T. GLOBAL:
------------
VARIABLE NEW PACIFIC FUND
-------------------------------------------------------------
SIX MONTHS FEBRUARY 10, 1993 (COM-
ENDED JUNE 30, YEAR ENDED MENCEMENT OF OPERATIONS)
1995 (UNAUDITED) DECEMBER 31, 1994 TO DECEMBER 31, 1993
---------------- ----------------- ------------------------
<S> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period................................ $ 14.01 $ 16.07 $12.00
------- ------- ------
Net investment income (loss)..................................... 0.11 (a) 0.08 (b) 0.04 (c)
Net realized and unrealized gain (loss) on investments........... (0.19) (2.08) 4.03
------- ------- ------
Net increase(decrease) resulting from operations............... (0.08) (2.00) 4.07
------- ------- ------
Distributions to shareholders:
From net investment income....................................... ($0.05) (0.06) --
From net realized gain on investments............................ -- -- --
------- ------- ------
Total distributions............................................ (0.05) (0.06) --
Net asset value, end of period...................................... $ 13.88 $ 14.01 $16.07
======= ======= ======
Total investment return +........................................... (0.57)% (12.47)% 33.9%
Ratios and supplemental data:
Net assets, end of period (in 000's)................................ $20,305 $19,391 $7,945
======= ======= ======
Ratio of net investment income (loss) to average net assets:
With reimbursement by G.T. Capital and expense reductions
(Notes 1, 2, & 5)++............................................ 1.76% 0.83% 0.9%
Without reimbursement by G.T. Capital and expense reductions++... 1.39% 0.48% 0.3%
Without expenses assumed by G.T. Capital (d)++................... --% --% (2.0)%
Ratio of expenses to average net assets:
With reimbursement by G.T. Capital and expense reductions
(Notes 1, 2, & 5)++............................................ 1.20% 1.25% 0.6%
Without reimbursement by G.T. Capital and expense reductions++... 1.57% 1.60% 1.3%
Without expenses assumed by G.T. Capital (d)++................... --% --% 3.6%
Portfolio turnover rate++........................................... 33% 30% 15%
</TABLE>

<TABLE>
<CAPTION>
G.T. GLOBAL:
------------
VARIABLE EUROPE FUND
-------------------------------------------------------------
SIX MONTHS FEBRUARY 10, 1993 (COM-
ENDED JUNE 30, YEAR ENDED MENCEMENT OF OPERATIONS)
1995 (UNAUDITED) DECEMBER 31, 1994 TO DECEMBER 31, 1993
---------------- ----------------- ------------------------
<S> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period................................ $ 15.22 $ 15.33 $12.00
------- ------- ------
Net investment income (loss)..................................... 0.17 (a) 0.16 (b) 0.05 (c)
Net realized and unrealized gain (loss) on investments........... 0.23 (0.25) 3.28
------- ------- ------
Net increase(decrease) resulting from operations............... 0.40 (0.09) 3.33
------- ------- ------
Distributions to shareholders:
From net investment income....................................... (0.16) -- --
From net realized gain on investments............................ -- (0.02) --
------- ------- ------
Total distributions............................................ (0.16) (0.02) --
Net asset value, end of period...................................... $ 15.46 $ 15.22 $15.33
======= ======= ======
Total investment return +........................................... 2.63% (0.59)% 27.8%
Ratios and supplemental data:
Net assets, end of period (in 000's)................................ $15,285 $15,020 $5,410
======= ======= ======
Ratio of net investment income (loss) to average net assets:
With reimbursement by G.T. Capital and expense reductions
(Notes 1, 2, & 5)++............................................ 2.26% 1.48% 1.1%
Without reimbursement by G.T. Capital and expense reductions++... 1.84% 1.07% 0.4%
Without expenses assumed by G.T. Capital (d)++................... --% --% (2.8)%
Ratio of expenses to average net assets:
With reimbursement by G.T. Capital and expense reductions
(Notes 1, 2, & 5)++............................................ 1.19% 1.25% 0.7%
Without reimbursement by G.T. Capital and expense reductions++... 1.61% 1.66% 1.4%
Without expenses assumed by G.T. Capital (d)++................... --% --% 4.6%
Portfolio turnover rate++........................................... 85% 61% 27%
</TABLE>

<TABLE>
<CAPTION>
G.T. GLOBAL:
------------
MONEY MARKET FUND
-------------------------------------------------------------
SIX MONTHS FEBRUARY 10, 1993 (COM
ENDED JUNE 30, YEAR ENDED MENCEMENT OF OPERATIONS)
1995 (UNAUDITED) DECEMBER 31, 1994 TO DECEMBER, 31, 1993
---------------- ----------------- ------------------------
<S> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period................................ $ 1.00 $ 1.00 $ 1.00
------- ------- ------
Net investment income (loss)..................................... 0.03 (a) 0.03 (b) 0.03 (c)
Net realized and unrealized gain (loss) on investments........... -- -- --
------- ------- ------
Net increase(decrease) resulting from operations............... 0.03 0.03 0.03
------- ------- ------
Distributions to shareholders:
From net investment income....................................... (0.03) (0.03) (0.03)
From net realized gain on investments............................ -- -- --
------- ------- ------
Total distributions............................................ (0.03) (0.03) (0.03)
Net asset value, end of period...................................... $ 1.00 $ 1.00 $ 1.00
======= ======= ======
Total investment return +........................................... 2.64% 3.48% 2.6%
Ratios and supplemental data:
Net assets, end of period (in 000's)................................ $15,674 $19,474 $3,775
======= ======= ======
Ratio of net investment income (loss) to average net assets:
With reimbursement by G.T. Capital and expense reductions
(Notes 1, 2, & 5)++............................................ 5.22% 3.70% 2.9%
Without reimbursement by G.T. Capital and expense reductions++... 4.81% 3.64% 2.1%
Without expenses assumed by G.T. Capital (d)++................... --% --% (2.6)%
Ratio of expenses to average net assets:
With reimbursement by G.T. Capital and expense reductions
(Notes 1, 2, & 5)++............................................ 0.75% 0.75% 0.2%
Without reimbursement by G.T. Capital and expense reductions++... 1.16% 0.81% 1.0%
Without expenses assumed by G.T. Capital (d)++................... --% --% 5.7%
Portfolio turnover rate++........................................... N/A N/A N/A
</TABLE>

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

F-125

<PAGE> 261
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

NOTES TO
FINANCIAL STATEMENTS

June 30, 1995 (Unaudited)

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

1. SIGNIFICANT ACCOUNTING POLICIES

G.T. Global Variable Investment Series and G.T. Global Variable Investment Trust
("Companies") were organized as Massachusetts business trusts on May 26, 1992
and September 17, 1992, respectively. The Companies are registered under the
Investment Company Act of 1940, as amended ("1940 Act") as open-end management
investment companies. The G.T. Global Variable Investment Series operates as a
series company currently issuing five classes of shares of beneficial interest:
G.T. Global: Variable New Pacific Fund (formerly G.T. Global:Variable Pacific
Fund), G.T. Global: Variable Europe Fund, G.T. Global: Variable America Fund,
G.T. Global: Variable International Fund and G.T. Global: Money Market Fund.
G.T. Global Variable Investment Trust operates as a series company currently
issuing nine classes of shares of beneficial interest: G.T. Global: Variable
Latin America Fund, G.T. Global: Variable Growth & Income Fund, G.T. Global:
Variable Strategic Income Fund, G.T. Global: Variable Global Government Income
Fund, G.T. Global: Variable U.S. Government Income Fund, G.T. Global: Variable
Emerging Markets Fund, G.T. Global: Variable Telecommunications Fund, G.T.
Global: Variable Infrastructure Fund, and G.T. Global: Variable Natural
Resources Fund. (The classes of shares of beneficial interest for the two
companies are referred to herein collectively as the "Funds.") Each of the Funds
is classified as a diversified management investment company; except for G.T.
Global: Variable Latin America Fund, G.T. Global: Variable Growth & Income Fund,
G.T. Global: Variable Strategic Income Fund and G.T. Global: Variable Global
Government Income Fund, which are each registered as a non-diversified
management investment company under the 1940 Act.

(A) PORTFOLIO VALUATION

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

(B) FOREIGN CURRENCY TRANSLATION

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

F-126
<PAGE> 262
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

books and the U.S. dollar equivalent of the amounts actually received or paid.
Net unrealized foreign exchange gains and losses arise from changes in the value
of assets and liabilities other than investments in securities at period end,
resulting from changes in exchange rates.

(D) FORWARD FOREIGN CURRENCY CONTRACTS

A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract fluctuates with changes in currency
exchange rates. The Forward Contract is marked-to-market daily and the change in
market value is recorded by the Funds as an unrealized gain or loss. When the
Forward Contract is closed, the Funds record a realized gain or loss equal to
the difference between the value at the time it was opened and the value at the
time it was closed. Forward Contracts involve market risk in excess of the
amounts shown in the Funds' "Statements of Assets and Liabilities." The Funds
could be exposed to risk if the counterparties are unable to meet the terms of
the contracts or if the value of the currency changes unfavorably. The Funds may
enter into Forward Contracts in connection with planned purchases or sales of
securities or to hedge against adverse fluctuations in exchange rates between
currencies.

(E) OPTION ACCOUNTING PRINCIPLES

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

(F) FUTURES CONTRACTS

(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME

Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities

F-127
<PAGE> 263
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

(H) DISTRIBUTIONS TO SHAREHOLDERS

Distributions to shareholders are recorded by the Fund on the ex-date. For the
Money Market Fund, dividends are declared daily and paid monthly from net
investment income. The Variable Strategic Income Fund, Variable Global
Government Income Fund and Variable U.S. Government Income Fund declare and pay
dividends from net investment income, if any, monthly. The Variable Growth &
Income Fund declares and pays dividends from net investment income, if any,
quarterly. The Variable Latin America Fund, Variable Telecommunications Fund,
Variable New Pacific Fund, Variable Europe Fund, Variable Emerging Markets Fund,
Variable International Fund, Variable America Fund, Variable Infrastructure
Fund, and Variable Natural Resources Fund declare and pay dividends from net
investment income, if any, annually. With respect to each Fund, dividends from
net realized capital gains, if any, are normally declared and paid annually.

(I) TAXES

<TABLE>
<CAPTION>
Capital Loss Expires in
G.T. Global Funds Carryforward Year
- ----------------- ------------ ----
<S> <C> <C>
Variable Strategic Income $3,286,925 2002
Variable Global Government Income 1,196,724 2002
Variable U.S. Government Income 71,665 2002
Variable Growth and Income 221,307 2002
Variable New Pacific Fund 415,778 2002
12,228 2001
Variable Europe Fund 69,767 2002
Variable International Fund 7,253 2002
</TABLE>

(J) DEFERRED ORGANIZATIONAL EXPENSES

(K) FOREIGN SECURITIES

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

(L) INDEXED SECURITIES

(M) RESTRICTED SECURITIES

F-128
<PAGE> 264
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

(N) PORTFOLIO SECURITIES LOANED

At June 30, 1995 stocks with an aggregate value listed below were on loan to
brokers. The loans were secured by cash collateral received by the Fund:

<TABLE>
<CAPTION>
JUNE 30, 1995 SIX MONTHS ENDED
--------------------------------------- JUNE 30, 1995
AGGREGATE VALUE ----------------
ON LOAN CASH COLLATERAL FEES RECEIVED
--------------- --------------- ----------------
<S> <C> <C> <C>
G.T. GLOBAL:
Variable Strategic Income Fund . . . . . . . . . . . $ -- $ -- $ --
Variable Global Government Income Fund . . . . . . . -- -- --
Variable U.S. Government Income Fund . . . . . . . . -- -- --
Variable Latin America Fund . . . . . . . . . . . . . 895,163 1,243,100 1,044
Variable Growth and Income Fund . . . . . . . . . . . 532,616 572,765 2,148
Variable Telecommunications Fund . . . . . . . . . . 3,839,630 4,051,475 10,168
Variable Emerging Markets Fund . . . . . . . . . . . -- -- --
Variable Infrastructure Fund . . . . . . . . . . . . -- -- --
Variable Natural Resources Fund . . . . . . . . . . . -- -- --
Variable America Fund . . . . . . . . . . . . . . . . -- -- --
Variable New Pacific Fund . . . . . . . . . . . . . . 1,248,444 1,335,813 4,533
Variable Europe Fund . . . . . . . . . . . . . . . . 1,195,157 1,278,516 4,098
Money Market Fund . . . . . . . . . . . . . . . . . . -- -- --
Variable International Fund . . . . . . . . . . . . . 93,077 97,851 4
</TABLE>

2. RELATED PARTIES

G.T. Capital is the Funds' investment manager and administrator. For these
services, the Money Market Fund pays G.T. Capital an investment management and
administration fee at the annualized rate of 0.50% of that Fund's average daily
net assets. The Variable Strategic Income Fund, Variable Global Government
Income Fund, Variable U.S. Government Income Fund and Variable America Fund each
pays G.T. Capital an investment management and administration fee at the
annualized rate of 0.75% of the Fund's average daily net assets. The Variable
Growth & Income Fund, Variable Latin America Fund, Variable Telecommunications
Fund, Variable New Pacific Fund, Variable Emerging Markets Fund, Variable
International Fund, Variable Europe Fund, Variable Infrastructure Fund, and
Variable Natural Resources Fund each pays G.T. Capital an investment management
and administration fee at the annualized rate of 1.00% of its average daily net
assets. All fees are computed daily and paid monthly.

G.T. Capital has undertaken to limit the total operating expenses (exclusive of
brokerage commissions, interest, taxes and extraordinary items) of each of the
Variable New Pacific Fund, the Variable Europe Fund, the Variable Latin America
Fund, the Variable Telecommunications Fund, Variable Emerging Markets Fund,
Variable International Fund, Variable Infrastructure Fund, Variable Natural
Resources Fund, and the Variable Growth & Income Fund to 1.25% of their
respective average daily net assets. In addition, G.T. Capital has undertaken to
limit the total operating expenses (exclusive of brokerage commissions,
interest, taxes and extraordinary items) of each of the Variable Strategic
Income Fund, the Variable Global Government Income Fund, the Variable U.S.
Government Income Fund, and the Variable America Fund to 1.00% of their
respective net assets. Likewise, G.T. Capital has undertaken to limit the total
operating expenses (exclusive of brokerage commissions, interest, taxes and
extraordinary items) of the Money Market Fund to .75% of its net assets. From
time to time, G.T. Capital in its sole discretion may waive its fees and/or
voluntarily assume certain Fund expenses.

All general expenses of the Companies and joint expenses of the Funds are
allocated among the Funds on a basis deemed fair and equitable.

F-129
<PAGE> 265
G.T. GLOBAL VARIABLE INVESTMENT FUNDS

G.T. Global is the principal underwriter of the Variable Annuity Contracts.
Underwriting commissions retained by G.T. Global are as follows:

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1995
----------------
<S> <C>
G.T. GLOBAL:
Variable Strategic Income Fund . . . . . . . . . . . $15,675
Variable Global Government Income Fund . . . . . . . 9,023
Variable U.S. Government Income Fund . . . . . . . . 4,720
Variable Latin America Fund . . . . . . . . . . . . . 29,515
Variable Growth and Income Fund . . . . . . . . . . . 10,111
Variable Telecommunications Fund . . . . . . . . . . 33,022
Variable Emerging Markets Fund . . . . . . . . . . . 27,091
Variable Infrastructure Fund . . . . . . . . . . . . 1,089
Variable Natural Resources Fund . . . . . . . . . . . 293
Variable America Fund . . . . . . . . . . . . . . . . 39,298
Variable New Pacific Fund . . . . . . . . . . . . . . 17,548
Variable Europe Fund . . . . . . . . . . . . . . . . 10,239
Money Market Fund . . . . . . . . . . . . . . . . . . 65,410
Variable International Fund . . . . . . . . . . . . . 1,376
</TABLE>

The Companies pay each of their Trustees who is not an employee, officer or
director of G.T. Capital, G.T. Global or G.T. Services $5,000 per year.

3. PURCHASES AND SALES OF SECURITIES

The following summarizes purchases and sales of investment securities, other
than short-term investments, by Fund, for the period ended June 30, 1995:

PURCHASES AND SALES OF SECURITIES

<TABLE>
<CAPTION>
PURCHASES
------------------------------------
U.S. GOVERNMENT OTHER ISSUES
--------------- ------------
<S> <C> <C>
G.T. GLOBAL:
Variable Strategic Income Fund . . . . . . . $7,005,916 $20,005,183
Variable Global Government Income Fund . . . 4,461,930 16,570,848
Variable U.S. Government Income Fund . . . . 3,279,174 217,250
Variable Latin America Fund . . . . . . . . . -- 16,382,958
Variable Growth & Income Fund . . . . . . . . 1,591,124 11,106,314
Variable Telecommunications Fund . . . . . . -- 13,375,807
Variable Emerging Markets Fund . . . . . . . -- 8,545,149
Variable Infrastructure Fund . . . . . . . . -- 602,516
Variable Natural Resources Fund . . . . . . . -- 666,042
Variable America Fund . . . . . . . . . . . . -- 15,296,950
Variable New Pacific Fund . . . . . . . . . . -- 5,011,779
Variable Europe Fund . . . . . . . . . . . . -- 6,311,722
Money Market Fund . . . . . . . . . . . . . -- --
Variable International Fund . . . . . . . . . -- 2,523,438

<CAPTION>
SALES
------------------------------------
U.S. GOVERNMENT OTHER ISSUES
--------------- ------------
<S> <C> <C>
G.T. GLOBAL:
Variable Strategic Income Fund . . . . . . . $6,810,434 $18,795,058
Variable Global Government Income Fund . . . 2,770,613 17,566,857
Variable U.S. Government Income Fund . . . . 3,214,910 --
Variable Latin America Fund . . . . . . . . . -- 16,577,294
Variable Growth & Income Fund . . . . . . . . 570,538 8,685,788
Variable Telecommunications Fund . . . . . . -- 15,091,138
Variable Emerging Markets Fund . . . . . . . -- 5,879,560
Variable Infrastructure Fund . . . . . . . . -- 93,494
Variable Natural Resources Fund . . . . . . . -- 150,493
Variable America Fund . . . . . . . . . . . . -- 4,487,639
Variable New Pacific Fund . . . . . . . . . . -- 2,809,946
Variable Europe Fund . . . . . . . . . . . . -- 5,856,523
Money Market Fund . . . . . . . . . . . . . -- --
Variable International Fund . . . . . . . . . -- 1,669,068
</TABLE>

F-130
<PAGE> 266
G.T. GLOBAL
VARIABLE INVESTMENT FUNDS

The Funds' written options activity for the period ended June 30, 1995, was as
follows:

G.T. GLOBAL: VARIABLE STRATEGIC INCOME FUND
COVERED CALL OPTIONS WRITTEN
<TABLE>
<CAPTION>

UNDERLYING
PRINCIPAL AMOUNT PREMIUMS
---------------- --------
<S> <C> <C>
Options outstanding at December 31, 1994 .................................................. $ -- $ --
Options written during the period ended June 30, 1995...................................... 1,000,000 8,750
Options cancelled in closing purchase transactions ........................................ -- --
Options expired prior to exercise ......................................................... (1,000,000) (8,750)
Options exercised ......................................................................... -- --
----------- -------
Options outstanding at June 30, 1995 ...................................................... $ -- $ --
=========== =======
</TABLE>

G.T. GLOBAL: VARIABLE GLOBAL GOVERNMENT INCOME FUND
COVERED CALL OPTIONS WRITTEN

<TABLE>
<CAPTION>
UNDERLYING NOMINAL
AMOUNT IN USD PREMIUMS
------------------ --------
<S> <C> <C>
Options outstanding at December 31, 1994 .................................................. $ -- $ --
Options written during the period ended June 30, 1995 ..................................... 980,000 4,508
Options cancelled in closing purchase transactions (Realized loss of $11,564) ............. (980,000) (4,508)
Options expired prior to exercise ......................................................... -- --
Options exercised ......................................................................... -- --
---------- -------
Options outstanding at June 30, 1995 ...................................................... $ -- $ --
========== =======
</TABLE>

4. CAPITAL SHARES
At June 30, 1995, there were an unlimited number of shares of beneficial
interest authorized, at no par value. Transactions in capital shares of the
Funds were as follows:

CAPITAL SHARE TRANSACTIONS
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1995 (UNAUDITED) DECEMBER 31, 1994
------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
G.T. GLOBAL: VARIABLE STRATEGIC INCOME FUND
Shares sold...................................................... 1,194,405 $ 13,176,179 1,978,885 $ 24,363,028
Shares issued in connection with reinvestment of distributions... 90,722 980,624 217,861 2,504,885
---------- ------------ ---------- ------------
1,285,127 14,156,803 2,196,746 26,867,913
Shares repurchased............................................... (1,345,155) (14,689,622) (1,279,651) (14,932,250)
---------- ------------ ---------- ------------
Net increase (decrease).......................................... (60,028) $ (532,819) 917,095 $ 11,935,663
========== ============ ========== ============

G.T. GLOBAL: VARIABLE GLOBAL GOVERNMENT INCOME FUND
Shares sold...................................................... 403,380 $ 3,881,843 929,187 $ 10,658,737
Shares issued in connection with reinvestment of distribution.... 32,118 354,376 60,221 673,921
---------- ------------ ---------- ------------
435,498 4,236,219 989,408 11,332,658
Shares repurchased............................................... (393,494) (3,769,178) (571,500) (6,371,492)
---------- ------------ ---------- ------------
Net increase..................................................... 42,004 $ 467,041 417,908 $ 4,961,166
========== ============ ========== ============

G.T. GLOBAL: VARIABLE U.S. GOVERNMENT INCOME FUND
Shares sold...................................................... 1,219,528 $ 13,488,313 423,487 $ 4,690,715
Shares issued in connection with reinvestmentf distributions..... 8,772 97,467 9,399 104,492
---------- ------------ ---------- ------------
1,228,300 13,585,780 432,886 4,795,207
Shares repurchased............................................... (1,091,771) (12,100,588) (288,661) (3,169,722)
---------- ------------ ---------- ------------
Net increase..................................................... 136,529 $ 1,485,192 144,225 $ 1,625,485
========== ============ ========== ============

G.T. GLOBAL: VARIABLE LATIN AMERICA FUND
Shares sold...................................................... 1,287,265 $ 19,094,289 1,888,080 $ 37,506,975
Shares issued in connection with reinvestment of distributions... 236,651 2,991,268 5,690 91,834
---------- ------------ ---------- ------------
1,523,916 22,085,557 1,893,770 37,598,809
Shares repurchased............................................... (1,289,843) (19,268,879) (970,532) (19,435,079)
---------- ------------ ---------- ------------
Net increase..................................................... 234,073 $ 2,816,678 923,238 $ 18,163,730
========== ============ ========== ============

G.T. GLOBAL: VARIABLE GROWTH & INCOME FUND
Shares sold...................................................... 349,366 $ 4,592,404 1,577,747 $ 21,179,611
Shares issued in connection with reinvestment of distributions... 30,307 401,898 49,422 644,305
---------- ------------ ---------- ------------
379,673 4,994,302 1,627,169 21,823,916
Shares repurchased............................................... (292,847) (3,840,605) (505,030) (6,701,077)
---------- ------------ ---------- ------------
Net increase..................................................... 86,826 $ 1,153,697 1,122,139 $ 15,122,839
========== ============ ========== ============

G.T. GLOBAL: VARIABLE TELECOMMUNICATIONS FUND
Shares sold...................................................... 580,465 $ 8,222,967 2,738,401 $ 36,062,278
Shares issued in connection with reinvestment of distributions... 68,050 1,045,935 2,609 31,627
---------- ------------ ---------- ------------
648,515 9,268,902 2,741,010 36,093,905
Shares repurchased............................................... (451,434) (6,280,933) (769,197) (10,175,735)
---------- ------------ ---------- ------------
Net increase..................................................... 197,081 $ 2,987,969 1,971,813 $ 25,918,170
========== ============ ========== ============
</TABLE>
F-131
<PAGE> 267

G.T. GLOBAL VARIABLE INVESTMENT FUNDS

<TABLE>
<CAPTION>
JULY 5, 1994
(COMMENCEMENT OF
SIX MONTHS ENDED OPERATIONS) TO
JUNE 30, 1995 (UNAUDITED) DECEMBER 31, 1994
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
G.T. GLOBAL: VARIABLE EMERGING MARKETS FUND
Shares sold........................................................ 608,339 $ 6,464,902 880,133 $ 11,376,969
Shares issued in connection with reinvestment of distributions..... -- -- 5,988 75,214
----------- ------------ ----------- ------------
608,339 6,464,902 886,121 11,452,183
Shares repurchased................................................. (512,008) (5,462,848) (274,767) (3,583,799)
----------- ------------ ----------- ------------
Net increase....................................................... 96,331 $ 1,002,054 611,354 $ 7,868,384
=========== ============ =========== ============
<CAPTION>
JANUARY 31, 1995
(COMMENCEMENT OF
OPERATIONS) TO
JUNE 30, 1995 (UNAUDITED)
--------------------------
SHARES AMOUNT
----------- ------------
<S> <C> <C>
G.T. GLOBAL: VARIABLE INFRASTRUCTURE FUND
Shares sold........................................................ 55,201 $ 686,461
Shares repurchased................................................. (20,046) (250,539)
----------- ------------
Net increase....................................................... 35,155 $ 435,922
=========== ============
G.T. GLOBAL: VARIABLE NATURAL RESOURCES FUND
Shares sold........................................................ 92,103 $ 1,167,198
Shares repurchased................................................. (57,071) (717,091)
----------- ------------
Net increase....................................................... 35,032 $ 450,107
=========== ============
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1995 (UNAUDITED) DECEMBER 31, 1994
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
G.T. GLOBAL: VARIABLE AMERICA FUND
Shares sold........................................................ 1,584,076 $ 27,617,810 1,410,056 $ 21,334,929
Shares issued in connection with reinvestment of distributions..... 31,220 606,288 9,566 136,602
----------- ------------ ----------- ------------
1,615,296 28,224,098 1,419,622 21,471,531
Shares repurchased................................................. (824,007) (14,496,046) (578,009) (8,750,561)
----------- ------------ ----------- ------------
Net increase....................................................... 791,289 $ 13,728,052 841,613 $ 12,720,970
=========== ============ =========== ============
G.T. GLOBAL: VARIABLE NEW PACIFIC FUND
Shares sold........................................................ 3,233,022 $ 43,008,498 2,682,038 $ 40,297,352
Shares issued in connection with reinvestment of distributions..... 5,429 75,348 3,541 51,590
----------- ------------ ----------- ------------
3,238,451 43,083,846 2,685,579 40,348,942
Shares repurchased................................................. (3,159,350) (42,301,797) (1,795,774) (26,803,641)
----------- ------------ ----------- ------------
Net increase....................................................... 79,101 $ 782,049 889,805 $ 13,545,301
=========== ============ =========== ============
G.T. GLOBAL: VARIABLE EUROPE FUND
Shares sold........................................................ 570,602 $ 8,596,345 1,354,348 $ 21,064,089
Shares issued in connection with reinvestment of distributions..... 9,965 154,451 927 14,252
----------- ------------ ----------- ------------
580,567 8,750,796 1,355,275 21,078,341
Shares repurchased................................................. (578,577) (8,669,528) (721,304) (11,126,870)
----------- ------------ ----------- ------------
Net increase....................................................... 1,990 $ 81,268 633,971 $ 9,951,471
=========== ============ =========== ============
G.T. GLOBAL: MONEY MARKET FUND
Shares sold........................................................ 67,268,359 $ 67,268,359 75,553,997 $ 75,553,997
Shares issued in connection with reinvestment of distributions..... 430,817 430,817 321,887 321,887
----------- ------------ ----------- ------------
67,699,176 67,699,176 75,875,884 75,875,884
Shares repurchased................................................. (71,498,887) (71,498,887) (60,177,597) (60,177,597)
----------- ------------ ----------- ------------
Net increase (decrease)............................................ (3,799,711) $ (3,799,711) 15,698,287 $ 15,698,287
=========== ============ =========== ============
<CAPTION>
JULY 5, 1994
(COMMENCEMENT OF
SIX MONTHS ENDED OPERATIONS)
JUNE 30, 1995 (UNAUDITED) TO DECEMBER 31, 1994
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
G.T. GLOBAL: VARIABLE INTERNATIONAL FUND
Shares sold........................................................ 869,194 $ 9,082,552 371,362 $ 4,416,954
Shares issued in connection with reinvestment of distributions..... 396 4,195 885 9,954
----------- ------------ ----------- ------------
869,590 9,086,747 372,247 4,426,908
Shares repurchased................................................. (785,669) (8,200,427) (174,075) (2,061,498)
----------- ------------ ----------- ------------
Net increase....................................................... 83,921 $ 886,320 198,172 $ 2,365,410
=========== ============ =========== ============
</TABLE>

5. EXPENSE REDUCTIONS
G.T. Capital has directed certain portfolio trades to brokers who paid a portion
of the Funds' expenses. For the period ended June 30, 1995, the Funds' expenses
were reduced by $4,511 under these arrangements.

F-132