<PAGE>
A VARIABLE
ANNUITY ISSUED
BY GENERAL
AMERICAN LIFE
INSURANCE COMPANY
GT GLOBAL
ALLOCATOR
ANNUAL REPORT
DECEMBER 31, 1996
[LOGO]
<PAGE>
TABLE
OF CONTENTS
<TABLE>
<S> <C>
Reports on the
Funds................ 1
Funds'
Financial
Statements........... F1
Portfolio holdings
and views of the
Funds' managers
described in this
annual report are as
of the date of the
report, unless
otherwise noted, and
are subject to
change.
</TABLE>
UNDERSTANDING THE PERFORMANCE TABLES
The performance data shown in the upper left hand corner of each report are for
the GT Global Variable Investment Divisions available in the GT Global Allocator
variable annuity issued by General American Life Insurance Company and for their
corresponding GT Global Variable Investment Funds, which are the underlying
investment vehicles for the Divisions. Division performance reflects Fund
performance, less the 1.4% annuity charges (mortality and expense risk, and
administrative charges), but not the $30 administration fee for contracts less
than $20,000. Division performance which reflects the surrender charge (maximum
6% in the first year, decreasing 1% annually thereafter) assumes a complete
withdrawal at the end of the period noted. Fund performance reflects all Fund
expenses but not the charges and expenses of the separate account described
above.
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate; therefore, an investor's units, when
surrendered, may be worth more or less than their original cost. From time to
time, the investment advisor may waive some fees and/or reimburse some expenses,
without which performance would be lower. Waivers and/or reimbursements are
subject to change.
Fund holdings and geographic allocations will change as market conditions
change.
GT GLOBAL, INC., DISTRIBUTOR AND PRINCIPAL UNDERWRITER.
POLICY FORM #10079
<PAGE>
GT GLOBAL
VARIABLE STRATEGIC INCOME FUND
TOTAL RETURNS THROUGH DECEMBER 31, 1996
Inception date: February 10, 1993
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DIVISION PERFORMANCE
AVERAGE WITH APPLICABLE WITHOUT
ANNUALIZED SURRENDER CHARGE SURRENDER CHARGE
<S> <C> <C>
1 Year 13.90% 19.90%
Life of Fund 9.53% 10.12%
Fund Performance
Average Annualized
1 Year 21.58%
Life of Fund 11.67%
</TABLE>
PERFORMANCE
We are pleased with the Fund's performance over the 12 months ended December 31,
1996. Total return for the period was 21.58%; total return over the same
investment period was 4.44% for the J.P. Morgan Global Government Bond Index(1)
and 34.16% for the J.P. Morgan Emerging Markets Brady (EMBI) Index.(2)
These index returns highlight the considerable divergence in the performance of
core and emerging markets over the period. Emerging market debt has enjoyed
improving performance because of the panic selloff in Mexico, the resulting
general turbulence in emerging markets and their subsequent rebound. The Fund's
significant weighting in these markets, as well as its holdings in smaller,
higher-yielding European markets, accounts for a good deal of its strong
performance. Russia and Panama stand out as the biggest contributors to
performance. The Fund also benefited from being underweighted in the U.S. and
Japan relative to the J.P. Morgan Global Government Bond Index.
MARKET REVIEW
The U.S. market is the most important determinant of global yields. Over the
past year, relatively stable growth and subdued inflation have served as a good
background for bond rallies elsewhere. Going forward, we expect inflation should
not be a problem and Treasuries should trade in a range we've seen over the last
year.
In Japan, structural economic problems continued to dampen economic activity.
Given the presence of abundant resources, we believe the inflation outlook will
continue to be favorable for bonds. We also find no reason to expect enough
increased economic activity in Japan to push monetary authorities to raise
interest rates dramatically. Hence, with no inflation and no expected upside
surprises in economic activity, bond markets and yields in Japan appear to us to
be fairly stable, even though they are at historically low levels (roughly
2.6%).
While many people have been surprised by the significant outperformance of
emerging market debt in 1995 and 1996, a few observations can help explain its
occurrence. First, value has come back from an extremely low base. Also,
post-crisis, government securities in these markets behaved less like typical
fixed income investments, that is, driven by fundamentals, and more like
equities whose value was driven by growth expectations.
OUTLOOK
In our view, the universe of emerging markets, with the exception of a few
countries, is doing very well. At an average of 5%, economic growth continues to
be about twice as fast as in the industrialized countries. It is also coming on
the heels of improving macroeconomic performance, measured in terms of lower
inflation, lower fiscal deficits and declining current account deficits.
Although we do not anticipate a repeat of 1996's outperformance in emerging
market debt, we believe value is still to be found and that emerging market
fixed income should continue to exhibit above-average performance, provided the
U.S. remains stable (U.S. 30-year Treasury at 6 1/2%-7%) and no massive
correction occurs in U.S. Treasuries.
In our opinion, the greatest risk over the next 12 months is not necessarily
from the country or the value element but primarily from the global yield side
- -- in particular, the massive convergence in yields in Europe, both at the long
and short end of the yield curve. The convergence, however, has occurred on the
back of the political push to achieve European Monetary Union (EMU), and we have
no reason to expect the political willingness to push for EMU will change any
time soon. On the contrary, it is picking up quite a bit of momentum. Based on
political indicators, it may go forward, but the system being devised is based
on fragile fundamental conditions, a similar situation to what occurred in the
1992 currency crisis in the Exchange Rate Mechanism (ERM).
PERFORMANCE SUMMARY
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
GT GLOBAL JPM JP
VARIABLE GLOBAL MORGAN
STRATEGIC GOVERNMENT EMBI
INCOME BOND
<S> <C> <C> <C>
10-Feb-93 10,000 10,000 10,000
10,008 10,209 10,118
10,078 10,366 10,646
10,082 10,555 10,860
10,143 10,622 11,229
10,521 10,630 11,622
10,871 10,635 12,106
11,459 10,950 12,349
11,502 11,065 12,511
12,168 11,060 13,565
11,986 10,979 13,429
12,755 11,092 14,249
12,842 11,196 14,288
11,553 11,073 13,099
10,506 11,022 11,601
10,396 11,014 11,606
10,569 10,923 12,408
10,447 11,052 11,409
10,482 11,156 11,689
10,856 11,127 12,524
11,053 11,183 12,647
10,975 11,350 12,289
10,878 11,207 12,414
31-Dec-94 10,575 11,233 11,588
10,487 11,461 11,187
10,438 11,756 10,604
10,579 12,354 10,304
11,130 12,551 11,411
11,584 12,901 12,416
11,615 12,982 12,657
11,614 13,043 12,666
11,614 12,681 12,965
11,884 12,966 13,411
11,946 13,093 13,274
12,233 13,239 13,738
12,637 13,403 14,779
13,170 13,265 16,081
12,686 13,188 14,951
12,804 13,168 15,334
13,109 13,119 16,106
13,273 13,132 16,306
13,472 13,247 16,758
13,700 13,491 16,885
13,995 13,547 17,433
14,518 13,622 18,522
14,760 13,892 18,570
15,278 14,090 19,610
31-Dec-96 15,364 13,992 19,828
</TABLE>
The chart above shows the performance of the Fund since inception compared to
the various indices for the same period. It assumes a hypothetical $10,000
initial investment in the Fund and reflects all Fund expenses but not charges
and expenses of the separate account. Past performance is no guarantee of future
results.
(1) The J.P. Morgan Global Government Bond Index is an arithmetic average,
weighted by market value, of government bonds from 13 major bond markets. It
includes the effect of reinvested coupons and is measured in U.S. dollars.
(2) The J.P. Morgan EMBI (Brady) Index is an arithmetic average, weighted by
market value, of Brady bonds from nine emerging bond markets. It includes
the effect of reinvested coupons and is measured in U.S. dollars.
The indices are unmanaged, not available for direct investment and do not
include the effects of sales charges and professional management fees.
1
<PAGE>
GT GLOBAL
VARIABLE GLOBAL GOVERNMENT INCOME FUND
TOTAL RETURNS THROUGH DECEMBER 31, 1996
Inception date: February 10, 1993
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DIVISION PERFORMANCE
AVERAGE WITH APPLICABLE WITHOUT
ANNUALIZED SURRENDER CHARGE SURRENDER CHARGE
<S> <C> <C>
1 Year -1.30% 4.70%
Life of Fund 3.26% 3.95%
Fund Performance
Average Annualized
1 Year 6.17%
Life of Fund 5.40%
</TABLE>
PERFORMANCE
The Fund outperformed its index over the 12 months ended December 31, 1996.
Total return for the period was 6.17%; total return for the J.P. Morgan Global
Government Bond Index(1) over the same period was 4.44%.
Relative to the index, the Fund has done well by being overweighted in Italy,
Sweden and the UK, and underweighted in the U.S. and Japan. The Fund also
benefited from its holdings in Mexico, Australia and Canada, markets that
enjoyed very strong returns over the period.
MARKET REVIEW
The world is not changed much and yields in the big three (U.S., Germany and
Japan) have ended roughly where they began, despite the large moves earlier in
the year. A weak yen and strong dollar provided support to a healthy global
liquidity environment. In the U.S., growth has remained moderate with a few
strong quarters followed by a few weak quarters. Inflation has been steady and a
recession appears unlikely. We believe yields are currently at fair value and
U.S. bonds will remain in the trading range they've been in over the last
several months.
Europe and Japan are experiencing generally weaker growth than the U.S.
Following that, their bond markets, Europe in particular, outperformed the U.S.;
smaller, higher-yielding markets also outperformed their larger counterparts.
Europe has rallied as a result of a combination of forces. The German economy
has remained weak, resulting in a weak deutschemark (DM) and low and falling
short rates.
Other Eurocurrencies have strengthened against the DM, allowing those countries
to cut interest rates faster than Germany. In addition to this benign
environment, the European Monetary Union (EMU) has been the source of good
political news, the most important being talk about a political stability pact
for which countries like Italy and Spain might be eligible. This news, along
with sound attempts by European countries to get their budgets in order has
created a good deal of positive sentiment.
The Fund has also maintained an underweighted position in Japan, where the story
has been the same for years -- deflation, low growth, financial sector problems
and a weak stock market. As a result, the yen has weakened and interest rates
have fallen to incredibly low levels. While the fundamentals justify its current
position, the value is so low that at some point these will have to turn around
and the risks will be quite big. In our opinion, opportunity for capital gains
and yields is poor, and although we believe Japanese bonds are important for
their effect on the rest of the world, it is difficult to justify their
purchase.
OUTLOOK
The fall in global bond yields over the last few months has been justified by
the fundamentals but we now believe many markets are close to fair value.
Similarly, the outperformance of European and smaller, higher-yielding markets
now means that relative valuations are more neutral. Hence, we see a very
neutral environment for bonds over the near term, with many bond markets trading
around current levels and performance being very similar across markets.
Our economics team is forecasting a possible increase in global economic
activity later in 1997, especially in Europe. Accordingly, we may adopt a more
defensive bond strategy when appropriate.
PERFORMANCE SUMMARY
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
GT GLOBAL
VARIABLE JPM
GLOBAL GLOBAL
GOVERNMENT GOVERNMENT
INCOME BOND
<S> <C> <C>
10-Feb-93 10,000 10,000
10,008 10,209
9,935 10,366
9,952 10,555
10,011 10,622
10,239 10,630
10,319 10,635
10,664 10,950
10,642 11,065
10,820 11,060
10,707 10,979
10,925 11,092
11,030 11,196
10,511 11,073
10,228 11,022
10,049 11,014
9,846 10,923
10,023 11,052
10,084 11,156
9,999 11,127
10,034 11,183
10,227 11,350
10,162 11,207
31-Dec-94 9,975 11,233
10,078 11,461
10,309 11,756
10,626 12,354
10,877 12,551
11,112 12,901
11,076 12,982
11,089 13,043
10,887 12,681
11,067 12,966
11,196 13,093
11,376 13,239
11,556 13,403
11,556 13,265
11,323 13,188
11,293 13,168
11,277 13,119
11,262 13,132
11,371 13,247
11,510 13,491
11,560 13,547
11,713 13,622
12,007 13,892
12,281 14,090
31-Dec-96 12,297 13,992
</TABLE>
The chart above shows the performance of the Fund since inception compared to
the various indices for the same time period. It assumes a hypothetical $10,000
initial investment in the Fund and reflects all Fund expenses but not charges
and expenses of the separate account. Past performance is no guarantee of future
results.
(1) The J.P. Morgan Global Government Bond Index is an arithmetic average,
weighted by market value, of government bonds from 13 major bond markets. It
includes the effect of reinvested coupons and is measured in U.S. dollars.
2
<PAGE>
GT GLOBAL
VARIABLE U.S. GOVERNMENT INCOME FUND
TOTAL RETURNS THROUGH DECEMBER 31, 1996
Inception date: February 10, 1993
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DIVISION PERFORMANCE
AVERAGE WITH APPLICABLE WITHOUT
ANNUALIZED SURRENDER CHARGE SURRENDER CHARGE
<S> <C> <C>
1 Year -5.19% 0.81%
Life of Fund 1.94% 2.66%
Fund Performance
Average Annualized
1 Year 2.23%
Life of Fund 4.11%
</TABLE>
PERFORMANCE
The Fund's total return for the 12 month period ended December 31, 1996, was
2.23%; total return for the J.P. Morgan U.S. Government Bond Index(1) over the
same period was 2.94%.
MARKET REVIEW
The year began on a positive note, with the Federal Reserve lowering the Federal
Funds Rate by 25 basis points, to 5.25%. But during the first half of the year,
evidence of growing economic momentum appeared and raised the specter of Fed
tightening to slow growth in the face of ever lower levels of unemployment and
concerns over increasing wage pressures and their impact on the general level of
inflation. Yields on the 30-year Treasury bonds increased during the first half
of the year, from approximately 5.95% to 6.87%. However, continued positive
inflation statistics and evidence that the economy was slowing provided
breathing room for the Fed to hold rates steady as the first half of 1996 came
to a close.
Additional signs that economic growth was subsiding emerged late in the third
quarter. As a result, the yield on 30-year Treasury bonds fell back to 6.35% in
early December, on anticipation that the Federal Reserve's next move would be to
lower rates to maintain economic growth. Unfortunately, the roller coaster ride
continued as December economic releases indicated that economic momentum
remained strong and hopes of a Fed rate cut receded. Disappointed investors,
further disheartened by Fed Chairman Greenspan's remarks regarding "irrational
exuberance" in the capital markets, drove interest rates up 30 basis points in
the long end, to end the year at approximately a 6.64% level for 30-year
Treasury bonds.
As 1996 ended, the U.S. economic outlook was mixed. Consumer confidence was at a
10-year high and unemployment was near a 10-year low. However, retail sales were
weak over the Christmas shopping season, reinforcing that consumer confidence
and low employment have never been good predictors of consumer spending, a key
driver of the economy.
OUTLOOK
Despite some indications of a firmer economy, we believe economic growth for
1997 will once again range between 2%-3%. Moderately restrictive monetary policy
and controlled federal spending should prevent the economy from overheating.
Inflation should decelerate due to continued productivity gains, international
competitive pressures, moderate money growth and a projected decline in energy
prices later in the year. These favorable economic conditions should allow the
Federal Reserve to hold monetary policy steady. The major risks to our forecast
are stubbornly high oil prices, accelerating unit labor costs and a premature
resumption of growth in Europe or Japan.
While our outlook is favorable for financial assets in general and fixed income
specifically, we expect a high degree of volatility as the year progresses and
signs of economic growth ebb and flow.
PERFORMANCE SUMMARY
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
GT GLOBAL
VARIABLE JP MORGAN
U.S. GOVERNMENT U.S. GOVERNMENT
INCOME BOND
<S> <C> <C>
10-Feb-93 10,000 10,000
10,008 10,195
9,932 10,230
9,973 10,314
9,977 10,291
10,188 10,501
10,286 10,551
10,933 10,767
10,916 10,812
10,992 10,847
10,656 10,745
10,638 10,792
10,891 10,928
10,444 10,711
10,110 10,501
9,994 10,420
9,963 10,414
9,963 10,399
10,107 10,569
10,125 10,583
9,980 10,457
9,953 10,451
9,925 10,420
31-Dec-94 9,971 10,479
10,129 10,661
10,296 10,886
10,343 10,958
10,446 11,092
10,805 11,504
10,880 11,596
10,832 11,564
10,947 11,688
11,034 11,792
11,168 11,958
11,304 12,136
11,440 12,296
11,519 12,381
11,313 12,155
11,204 12,063
11,113 11,997
11,090 11,981
11,215 12,119
11,233 12,149
11,240 12,137
11,399 12,319
11,660 12,568
11,851 12,773
31-Dec-96 11,695 12,658
</TABLE>
The chart above shows the performance of the Fund since inception compared to
the JP Morgan US Government Bond Index for the same period. It assumes a
hypothetical $10,000 initial investment in the Fund and reflects all Fund
expenses but not expenses and charges of the separate account. Past performance
is no guarantee of future results.
(1) The J.P. Morgan U.S. Government Bond Index is a market capitalization
weighted index of U.S. Treasury issues with remaining maturities of at least
one year. All returns are calculated with reinvested coupons and are
expressed in U.S. dollar terms.
The index is unmanaged, not available for direct investment and does not
include the effect of sales charges or professional management fees.
3
<PAGE>
GT GLOBAL
VARIABLE LATIN AMERICA FUND
TOTAL RETURNS THROUGH DECEMBER 31, 1996
Inception date: February 10, 1993
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DIVISION PERFORMANCE
AVERAGE WITH APPLICABLE WITHOUT
ANNUALIZED SURRENDER CHARGE SURRENDER CHARGE
<S> <C> <C>
1 Year 14.77% 20.77%
Life of Fund 8.74% 9.34%
Fund Performance
Average Annualized
1 Year 22.48%
Life of Fund 10.87%
</TABLE>
PERFORMANCE
The Fund's total return for the year ended December 31, 1996, was 22.48%,
performing in line with the MSCI Emerging Markets Global Latin America Index,(1)
which rose 21.96% over the period. The Fund's underweighted position in Brazil
and Argentina was mitigated by an overweighted position in Venezuela and an
underweighted position in Chile.
MARKET REVIEW
Most regional stock markets had a strong 1996, continuing the recovery that
began in March 1995. Leading the charge was the Venezuelan stock market, up a
spectacular 100.53% in U.S. dollar terms over the period, as the Caldera
administration finally got serious about attacking spiraling inflation and
associated economic ills. The lifting of foreign exchange controls and
commitment to reduce the government's burgeoning budget deficit were accompanied
by a timely rise in world oil prices, leading to a dramatic increase in foreign
reserves and a bull market in equities.
The Brazilian Bovespa Index rose by 53.2% in dollar terms for the year, led once
again by bellwether Telebras and other state-owned utilities on the back of
progress toward privatization and gradually falling interest rates. Most other
Brazilian stocks continued to lag, as the FGV-100 Index of the largest private
sector companies rose a paltry 6.7% over the same period. Earnings of industrial
companies have continued to be weighed down by a weak pricing environment,
rising wage costs and the strong Brazilian currency.
Argentine stocks, as measured by the Merval Index, rose 25.19% in 1996 as
liquidity continued to flow into the financial system following the post-Mexican
devaluation Tequila Crisis. Bank deposits and foreign reserves have surpassed
pre-crisis levels, and economic growth in the second half of 1996 is expected to
reach about 8%. The Mexican Bolsa rose 17.98% for the year, with most gains
coming in the first half. Although the economic recovery in Argentina is on
track, consumption remains subdued in the face of continuing deterioration of
real wages.
OUTLOOK
We remain cautious on the longer-term prospects for Brazil and Argentina. In the
absence of a substantial jump in exports, we believe Brazil is likely to face an
external financing constraint over the next year or two, and the government's
fiscal deficit has yet to be seriously addressed. Argentina remains inexorably
linked to U.S. monetary policy and Brazilian demand for Argentine exports. A
rise in world interest rates or recession in Brazil could have serious
consequences for the Argentine economy.
We are still fairly optimistic about the Mexican economy and, consequently, its
stock market. Real wages, which have been falling for more than two years, are
likely to begin recovering this year, boosting domestic demand and consumption
stocks. The Venezuelan stock market has already recovered much of the ground
lost in 1994 and 1995, though we have not yet seen a recovery in the domestic
economy, which could give further impetus to the stock market.
We think the Chilean economy should benefit from a gradual easing in monetary
policy, though the magnitude may be disappointing and competitive issues
continue to plague many listed stocks. We find Colombian equities inexpensive
compared to the rest of the region, though uncertainties about the political
situation will likely weigh on the stock market this year. Peru's economy
remains constrained by a large trade deficit. As a result, in the absence of
improvement in mining exports, we believe economic growth and company earnings
may prove insufficient to spur the stock market there.
PERFORMANCE SUMMARY
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
MSCI
GT GLOBAL EMG
VARIABLE LATIN
LATIN AMERICA AMERICA
<S> <C> <C>
10-Feb-93 10,000 10,000
10,008 9,892
9,983 10,617
10,017 10,112
10,167 10,268
10,017 10,938
10,358 11,256
10,875 12,224
11,192 12,382
12,000 12,832
12,767 13,722
14,733 15,509
17,058 17,941
16,658 17,351
15,708 16,118
14,075 14,901
14,285 15,750
13,731 14,692
14,779 15,971
17,766 18,560
18,688 19,309
18,395 18,359
18,395 17,840
31-Dec-94 16,080 14,938
13,765 13,231
12,070 11,235
10,820 10,855
12,498 12,469
12,339 12,712
12,630 12,923
13,102 13,377
13,190 13,541
12,817 13,410
11,658 12,301
11,736 12,519
12,198 12,916
13,377 14,252
12,758 13,432
12,994 13,607
13,740 14,354
14,084 14,809
14,112 15,176
13,496 14,574
14,031 14,993
14,455 15,326
14,455 15,170
14,607 15,298
31-Dec-96 14,940 15,753
</TABLE>
The chart above shows the performance of the Fund since inception, compared to
the MSCI Emerging Markets Global Latin America Index for the same period. It
assumes a hypothetical $10,000 initial investment in the Fund and reflects all
Fund expenses but not expenses and charges of the separate account. Past
performance is no guarantee of future results.
(1) The MSCI Emerging Markets Global Latin America Index is an arithmetic
average, weighted by market value, of the performance of securities listed
on the stock exchanges of Argentina, Brazil, Chile, Colombia, Mexico, Peru
and Venezuela. The index is measured in U.S. dollars, has an aggregate
market capitalization of $271 billion and includes the effect of reinvested
dividends.
The index is unmanaged, not available for direct investment and does not
include the effects of sales charges and professional management fees.
4
<PAGE>
GT GLOBAL
VARIABLE GROWTH & INCOME FUND
TOTAL RETURNS THROUGH DECEMBER 31, 1996
Inception date: February 10, 1993
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DIVISION PERFORMANCE
AVERAGE WITH APPLICABLE WITHOUT
ANNUALIZED SURRENDER CHARGE SURRENDER CHARGE
<S> <C> <C>
1 Year 8.71% 14.71%
Life of Fund 9.54% 10.13%
Fund Performance
Average Annualized
1 Year 16.33%
Life of Fund 11.68%
</TABLE>
PERFORMANCE
The Fund had a strong year and enjoyed an improvement in returns generally
across the board. For the 12 months ending December 31, 1996, the Fund's total
return was 16.33%. Total return over the same investment period was 14.00% for
the Morgan Stanley Capital International (MSCI) World Index(1) and 4.44% for the
J.P. Morgan Global Government Bond Index.(2)
MARKET REVIEW
In general, the equity markets on which we focused met or exceeded expectations.
Positive earnings and dividend growth surprises in the U.S. and UK were helpful
to the Fund. In addition, in 1996 we saw a much more broadly based move in
equity markets, with some value stocks catching up, particularly in continental
Europe.
Relative to the indices, the Fund also benefited from having low exposure to
Japan. The Fund did not hold any Japanese equities and the Japanese bond content
was reduced over the year, which proved a good move as the yen weakened.
The trend toward continental European companies' greater awareness of
shareholder value has been a major contributor to this portfolio, which had a
significant weighting in continental European equities. Companies have actually
been behaving in a much more rational, shareholder friendly fashion, one factor
that triggered the release of shareholder value. It's been particularly true of
the German exposure we have, where a number of key stocks have adopted
shareholder friendly policies.
The performance of the Fund has been most notably enhanced by the strong
performance of the high-yielding European bond markets this year. In particular,
Italian bonds have risen dramatically as yields have declined in the face of
falling inflation and an improving fiscal backdrop. The political move toward
European Monetary Union (EMU) has also pushed Italian yields lower as
speculation over the likelihood of full participation has risen.
OUTLOOK
In terms of themes, our expectations are for continued sluggishness in global
economic growth - we believe growth is slowing in the U.S., while in Europe
growth may pick up a bit. As a result, we think inflation is likely to stay
lower than expectations over the next two to three years, and that, over that
period, bond markets are likely to continue to deliver fairly attractive
returns. Therefore, bond proxy sectors in which this Fund invests could also do
quite well. Eventually, when we reach the bottom of the interest rate and
inflation expectations cycle, it will be necessary to make a shift in the
portfolio structure; however, at the moment we're happy to go with this trend.
Looking forward on the bond side, we continue to find the North American bloc
attractive as growth continues to be relatively mild and inflation does not
appear to threaten. We believe the performance of peripheral markets, such as
Canada and Australia, may also add value, both from a bond perspective and the
likely pickup we see in the currencies relative to the U.S. dollar. Across
Europe, we believe the higher-yielding markets are beginning to look somewhat
overvalued as the EMU bandwagon gathers pace. The portfolio remains a selective
holder of a number of these markets, with a view to reduce exposure gradually
where appropriate.
PERFORMANCE SUMMARY
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
GT GLOBAL JPM GLOBAL
VARIABLE MSCI GOVERNMENT
GROWTH & INCOME WORLD BOND
<S> <C> <C> <C>
10-Feb-93 10,000 10,000 10000
10,008 10,102 10209
10,228 10,689 10366
10,261 11,187 10555
10,361 11,447 10622
10,437 11,352 10630
10,673 11,588 10635
11,145 12,121 10950
11,155 11,899 11065
11,460 12,229 11060
11,333 11,539 10979
11,775 12,106 11092
12,135 12,906 11196
11,639 12,741 11073
11,312 12,194 11022
11,467 12,573 11014
11,355 12,608 10923
11,278 12,575 11052
11,573 12,816 11156
11,721 13,204 11127
11,455 12,860 11183
11,796 13,228 11350
11,394 12,656 11207
31-Dec-94 11,439 12,781 11233
11,360 12,592 11461
11,580 12,778 11756
11,590 13,396 12354
11,821 13,866 12551
12,114 13,987 12901
12,059 13,986 12982
12,417 14,688 13043
12,166 14,363 12681
12,471 14,785 12966
12,597 14,555 13093
12,813 15,063 13239
13,211 15,506 13403
13,301 15,789 13265
13,392 15,888 13188
13,410 16,156 13168
13,483 16,538 13119
13,647 16,556 13132
13,694 16,642 13247
13,602 16,057 13491
13,951 16,245 13547
14,200 16,884 13622
14,653 17,005 13892
15,245 17,961 14090
31-Dec-96 15,368 17,676 13992
</TABLE>
The chart above shows the performance of the Fund since inception, compared to
the various indices shown above for the same time period. It assumes a
hypothetical $10,000 initial investment in the Fund and reflects all Fund
expenses but not expenses and charges of the separate account. Past performance
is no guarantee of future results.
(1) MSCI World Index is an arithmetic average, weighted by market value, of the
performance of 1,563 securities listed on major world stock exchanges -- the
U.S., Europe, Canada, Australia, New Zealand and the Far East. It includes
the effect of reinvested dividends and is measured in U.S. dollars.
(2) J.P. Morgan Global Government Bond Index is an arithmetic average, weighted
by market value, of government bonds from 13 major bond markets. It includes
the effect of reinvested coupons and is measured in U.S. dollars.
The indices are unmanaged, not available for direct investment and do not
incur sales charges and professional management fees.
5
<PAGE>
GT GLOBAL
VARIABLE TELECOMMUNICATIONS FUND
TOTAL RETURNS THROUGH DECEMBER 31, 1996
Inception date: October 18, 1993
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DIVISION PERFORMANCE
AVERAGE WITH APPLICABLE WITHOUT
ANNUALIZED SURRENDER CHARGE SURRENDER CHARGE
<S> <C> <C>
1 Year 11.69% 17.69%
Life of Fund 16.19% 16.86%
Fund Performance
Average Annualized
1 Year 19.34%
Life of Fund 18.50%
</TABLE>
PERFORMANCE
The Fund has performed well in a generally difficult year for the telecoms area.
For the 12 months ended December 31, 1996, the Fund's total return was 19.34%.
By comparison, the total return over the same investment period was 8.51% for
the Morgan Stanley Capital International (MSCI) Telecommunications Index(1) and
14.00% for the MSCI World Index.(2) The Fund continues to hold a strong
long-term track record, outperforming these indices since its inception.
A number of the Fund's company holdings did particularly well, with U.S.
companies contributing the lion's share of performance to the portfolio -
specifically Tel-Save Holdings, DSP Communications and IntelCom Group. In other
markets, Germany's Mannessmann, Spain's Telefonica, Israel's Tadiran
Telecommunications and Brazil's Telebras(3) were also strong contributors.
MARKET REVIEW
The last nine months have seen a slowdown in the rate of growth for many
equipment companies as a result of regulatory and legal issues that have delayed
the onset of competition in the U.S. Consequently, telecommunications companies
have been slow to make capital commitments as they await a clearer picture of
the market. In the meantime, they have been cutting back on equipment purchases
and redirecting capital expenditure to particular types of upgrades and away
from more mundane upgrading of basic infrastructure in the ground.
While emerging markets have been doing reasonably well in the last couple of
months, in general they have been laggards over the past two years. In part,
their weakness is a result of previous huge runs on the stocks and fears over
increasing competition in some countries. We have been selectively buying some
of these stocks over the last year as confidence begins to return. Although
competition is appearing in many markets, it is important to remember that
telecom stocks in competitive countries tend to sell at higher multiples than
those in countries with highly regulated, uncompetitive markets. The issue is
timing. At first, it is often hard for the incumbent monopoly to deal with new
realities of a competitive marketplace, but over time, they usually learn how
to. As they become more efficient, they tend to become more profitable (and
usually remain the dominant market share player).
OUTLOOK
We are optimistic about the industry's future and see very attractive valuations
in several areas, especially emerging market telephone service companies. For
now we will concentrate on selected equipment manufacturers and service
providers in cellular and emerging market landlines, hoping to produce superior
returns in the coming year.
We are somewhat concerned about the cable TV/equipment side. It seems clear that
cable companies are facing a greater challenge than ever in terms of raising the
money they need to upgrade their basic infrastructure, although they continue to
maintain a very good position in terms of the infrastructure they already have
in the ground. Going forward, we don't think they have any choice but to spend;
however, they may choose to slow that spending for a brief period of time
because of bond rating issues or temporary stock market perception concerns.
Nevertheless, we believe the equipment area is well situated in the long run
because of the trends toward increasing expenditure and greater competition in
the U.S. and around the world.
PERFORMANCE SUMMARY
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
GT GLOBAL
VARIABLE MSCI MSCI
TELECOMMUNICATIONS WORLD TELECOMMUNICATIONS
<S> <C> <C> <C>
18-Oct-93 10,000 10,000 10,000
10,008 10,020 9,995
9,942 9,455 9,469
10,892 9,919 9,640
11,358 10,575 10,078
11,033 10,440 9,421
10,167 9,991 9,138
10,402 10,302 9,449
10,485 10,330 9,517
10,226 10,303 9,485
10,927 10,501 9,783
11,662 10,819 10,105
11,562 10,537 9,830
11,871 10,838 10,062
11,370 10,370 9,390
11,670 10,473 9,382
11,529 10,317 9,610
11,337 10,470 9,622
11,345 10,977 9,829
30-Apr-95 11,662 11,361 9,975
12,422 11,461 10,147
13,422 11,459 10,334
14,552 12,035 10,600
14,920 11,769 10,863
15,399 12,114 11,533
14,166 11,926 11,420
14,423 12,342 11,519
14,432 12,705 11,903
14,594 12,937 12,136
15,579 13,018 12,061
15,476 13,237 11,908
17,231 13,551 12,317
18,018 13,565 12,215
17,746 13,636 12,211
16,208 13,157 11,419
16,939 13,311 11,503
17,024 13,834 11,666
16,255 13,933 11,925
17,024 14,717 12,603
31-Dec-96 17,223 14,483 12,916
</TABLE>
The chart above shows the performance of the Fund since inception, compared to
the MSCI World and Telecommunications indices for the same period. It assumes a
hypothetical $10,000 initial investment in the Fund and reflects all Fund
expenses but not charges and expenses of the separate account. Past performance
is no guarantee of future results.
(1) The MSCI Telecommunications Index is an arithmetic average, weighted by
market value, of the performance of 30 securities listed on 10 major stock
exchanges. It includes the effect of reinvested dividends and is measured in
U.S. dollars.
(2) The MSCI World Index is an arithmetic average, weighted by market value, of
the performance of 1,563 securities listed on major world stock exchanges --
the U.S., Europe, Canada, Australia, New Zealand and the Far East. It
includes the effect of reinvested dividends and is measured in U.S. dollars.
(3) There can be no assurance the Fund will continue to own the companies
mentioned.
The indices are unmanaged, not available for direct investment and do not
include the effects of sales charges and professional management fees.
6
<PAGE>
GT GLOBAL
VARIABLE EMERGING MARKETS FUND
TOTAL RETURNS THROUGH DECEMBER 31, 1996
Inception date: July 5, 1994
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DIVISION PERFORMANCE
AVERAGE WITH APPLICABLE WITHOUT
ANNUALIZED SURRENDER CHARGE SURRENDER CHARGE
<S> <C> <C>
1 Year 23.24% 29.24%
Life of Fund 5.10% 6.57%
Fund Performance
Average Annualized
1 Year 31.07%
Life of Fund 8.07%
</TABLE>
PERFORMANCE
The Fund enjoyed a strong year. For the 12 months ended December 31, 1996, the
Fund's total return was 31.07%. By comparison, total return for the
International Financial Corp. (IFC) Global Index was 7.89%, while the total
return for the Morgan Stanley Capital International (MSCI) Emerging Markets
Global Index(1) was 5.99% for the period. The IFC Index is substantially similar
to the MSCI Index, except that the IFC invests in larger companies.
Relative to the MSCI Emerging Markets Index, the Fund has done well by being
underweighted in South Korea and Thailand, and overweighted in Hong Kong. The
Fund benefited substantially as a result of its security selection in Asia and
Israel, and by concentrating the Fund in a smaller number of stocks than it
usually holds.
MARKET REVIEW
In general, the Fund was buoyed by overall strength in Latin America and
benefited particularly from its holdings in Brazil, where the overall market
ended well for the year but individual results were very mixed. Brazilian state
companies continue to be a focus of market attention, in the hope of
privatization and reform. The real economy has been somewhat weak, so profit
growth in most of the private sector is also weak.
In Asia, performance has varied a great deal by market. Hong Kong, the
Philippines and Malaysia have done very well; Thailand, India and South Korea
have had a poor year. Strengthening Hong Kong property values and the downward
trend in Chinese inflation, coupled with relaxation measures on the part of
authorities, have had a positive impact on Hong Kong companies. The Philippine
market has strengthened as investors have focused on the positive aspects of the
Ramos administration's economic reforms, and the Malaysian market outperformed
other regional markets largely as a result of improving trade figures and
continued news of corporate restructurings. Meanwhile, the Thai market suffered
on the back of political instability and concerns over the health of its banking
and finance industry. South Korea has been particularly hard hit by the downturn
in demand for electronics and disappointing trade figures. Finally, the Indian
market felt the weight of a continued foreign selloff of shares.
OUTLOOK
With respect to the Fund's largest position, Hong Kong, we believe the handover
to the Chinese has been so well publicized that it will be a relatively
unexciting event in the stock market. There are fears, however, that Hong Kong
will become less efficient and more corrupt and, of course, there is the
potential for market volatility with the handover. Whether or not that occurs,
we are currently still finding very attractive companies there and maintaining
our weighting. The Chinese have a strong interest in seeing that the transition
progresses smoothly.
Emerging markets have been weak over the past couple of years, due mainly to
sluggish exports in Asia and the devalued Mexican peso. India and Korea, in
particular, have fallen for a variety of political and economic reasons, to a
point where their markets are looking relatively inexpensive. We believe they
will pick up eventually.
PERFORMANCE SUMMARY
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
MSCI
GT GLOBAL EMERGING IFC
VARIABLE MARKETS GLOBAL
EMERGING MARKETS GLOBAL COMPOSITE
<S> <C> <C> <C>
5-Jul-94 10,000 10,000 10,000
10,025 10,552 10,524
10,408 11,636 11,669
11,358 11,952 12,035
11,400 11,661 11,780
10,917 11,115 11,276
10,012 10,535 10,653
9,095 9,381 9,442
8,337 9,214 9,324
8,135 9,343 9,286
8,867 9,535 9,432
9,406 9,870 9,789
9,398 9,846 9,770
9,886 9,995 9,956
9,381 9,664 9,568
30-Sep-95 9,356 9,771 9,627
9,103 9,446 9,343
8,724 9,210 9,077
9,257 9,566 9,340
9,896 10,001 9,821
10,381 9,873 9,759
10,857 10,013 9,914
11,699 10,730 10,652
11,853 10,522 10,447
11,614 10,660 10,600
11,155 9,937 9,939
11,291 10,156 10,160
11,487 10,244 10,251
11,521 9,954 10,022
12,133 10,133 10,166
31-Dec-96 12,133 10,139 10,077
</TABLE>
The chart above shows the performance of the Fund since inception, compared to
the various indices for the same period. It assumes a hypothetical $10,000
initial investment in the Fund and reflects all Fund expenses but not charges
and expenses of the separate account. Past performance is no guarantee of future
results.
(1) The MSCI Emerging Markets and IFC Indices are arithmetic averages, weighted
by market value, of the performance of securities listed on the exchanges of
26 and 31 countries, respectively. They include the effect of reinvested
dividends and are measured in U.S. dollars.
The indices are unmanaged, not available for direct investment and do not
include the effects of sales charges and professional management fees.
7
<PAGE>
GT GLOBAL
VARIABLE INFRASTRUCTURE FUND
TOTAL RETURNS THROUGH DECEMBER 31, 1996
Inception date: January 31, 1995
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DIVISION PERFORMANCE
AVERAGE WITH APPLICABLE WITHOUT
ANNUALIZED SURRENDER CHARGE SURRENDER CHARGE
<S> <C> <C>
1 Year 17.14% 23.14%
Life of Fund 14.40% 16.69%
Fund Performance
Average Annualized
1 Year 24.88%
Life of Fund 18.33%
</TABLE>
PERFORMANCE
The Fund has enjoyed a strong year. For the 12 months ended December 31, 1996,
the Fund's total return was 24.88%. Total return over the same investment period
was 14.00% for the Morgan Stanley Capital International (MSCI) World Index.(1)
The index is designed to represent the performance of all markets, however, and
does not reflect the Fund's concentration in infrastructure industries.
MARKET REVIEW
The Fund's returns were buoyed by performance of the U.S., Italian and Spanish
markets, in addition to general strength in Latin America. In the U.S., the Fund
benefited from a continuation of the bull market as well as a shift from
technology to more cyclical infrastructure-type stocks. Post-electoral gains in
Italy and Spain also worked in favor of the Fund, largely due to expectations of
lower interest rates.
By now the Mexican peso crisis has become a dim memory and increasing confidence
in emerging markets has been positive for the Fund. Private sector capital flows
have resumed and even Mexico has come back into favor with foreign investors.
We've also seen an increasing number of privatizations around the world as
governments have recognized that private companies can often provide
infrastructure projects with good access to capital and better management skills
- - a significant break from their traditional view of state control. Over the
past year, as this trend has become more pronounced, the Fund has benefited from
rail privatizations in Canada, New Zealand and the UK. Looking ahead, we
anticipate further opportunities arising from privatizations in Australia and
continental Europe.
OUTLOOK
Emerging economies continue to stand out as areas of tremendous potential
although, over the short term, many of their markets may experience considerable
volatility. As these nations enjoy increasing stability and economic growth, we
anticipate their needs for infrastructure development will accelerate. We are
also attracted by capital goods producers (power plants and other infrastructure
building blocks) which we believe stand to benefit from an increase in demand
for equipment to build emerging market infrastructure.
In general, we continue to like the growth of telecom, the stability of electric
utilities, the sales potential of the capital goods side and the rationalization
opportunities in transportation. Moreover, we believe privatizations, whereby
entrepreneurial and managerial skills are applied to formerly state-run
companies, can lead to improved returns and are often attractive investments.
PERFORMANCE SUMMARY
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
GT GLOBAL
VARIABLE MSCI
INFRASTRUCTURE WORLD
<S> <C> <C>
31-Jan-95 10,000 10,000
9,942 10,148
9,967 10,639
10,467 11,012
10,742 11,108
11,025 11,107
11,550 11,665
11,250 11,407
11,225 11,741
10,700 11,559
10,900 11,962
31-Dec-95 11,058 12,314
11,308 12,539
11,392 12,618
11,508 12,830
12,450 13,134
12,925 13,148
13,033 13,217
12,608 12,752
12,925 12,901
13,181 13,409
13,038 13,505
13,508 14,264
31-Dec-96 13,809 14,038
</TABLE>
The chart above shows the performance of the Fund since inception, compared to
the MSCI World Index for the same period. It assumes a hypothetical $10,000
initial investment in the Fund and reflects all Fund expenses but not expenses
and charges of the separate account. Past performance is no guarantee of future
results.
(1) The MSCI World Index is an arithmetic average, weighted by market value, of
the performance of 1,563 securities listed on major world stock exchanges --
the U.S., Europe, Canada, Australia, New Zealand and the Far East. It
includes the effect of reinvested dividends and is measured in U.S. dollars.
The index is unmanaged, not available for direct investment and does not
include the effects of sales charges and professional management fees.
8
<PAGE>
GT GLOBAL
VARIABLE NATURAL RESOURCES FUND
TOTAL RETURNS THROUGH DECEMBER 31, 1996
Inception date: January 31, 1995
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DIVISION PERFORMANCE
AVERAGE WITH APPLICABLE WITHOUT
ANNUALIZED SURRENDER CHARGE SURRENDER CHARGE
<S> <C> <C>
1 Year 43.05% 49.05%
Life of Fund 33.78% 35.76%
Fund Performance
Average Annualized
1 Year 51.15%
Life of Fund 37.71%
</TABLE>
PERFORMANCE
The Fund continues to do well. Its total return for the 12 months ending
December 31, 1996, was 51.15%. During the same period the Morgan Stanley Capital
International (MSCI) World Index(1) returned 14.00%. The index is designed to
represent the performance of all markets, however, and does not reflect the
Fund's concentration in the natural resources industries.
We believe the Fund's strong showing over the past year can be attributed
primarily to company-specific, rather than macroeconomic, factors. Chesapeake
Energy Corp. continues to be a strong performer and is a good example of a
company that meets our investment criteria. Chesapeake, which produces natural
gas in Texas and Louisiana, is growing its reserves and production very quickly
because of new technology. Instead of drilling vertically, they're drilling
horizontally, which has led to dramatically increased production.
As of the end of the period, energy equipment and services equities accounted
for 33.4% of the portfolio because earnings keep coming in better than expected.
These companies exhibit the earnings revisions, earnings surprises, earnings
momentum and relative strength that feature prominently in our strategy. Many of
the Fund's key holdings fall into this category: Rowan Companies (contract
drilling of oil and gas wells), Energy Ventures, Inc. (manufactures oil well
equipment), Atwood Oceanics (owns or operates oil and gas drilling rigs), Cooper
Cameron (manufactures production equipment for the oil and gas industry) and
Global Marine (operates offshore drilling rigs). All have been strong
contributors to the Fund's return this year because the prices of what they sell
- -- whether pipes or offshore drilling platform leases -- are rising.
MARKET REVIEW
Many countries have rewritten their mining laws to allow foreign participation
in the realization of their mineral wealth. Not only are these emerging markets
a source of new demand for raw materials and fuel, they are also a vast new area
of supply. While keeping in mind that many emerging markets can be volatile,
we're finding opportunities in North American companies that are taking
advantage of the opening up of mineral resources in Latin American, African,
Southeast Asian and former eastern bloc markets.
At the same time, new technology is enabling companies to find huge amounts of
mineral reserves. We're keeping our eye on companies such as Bre-X Minerals and
Triton Energy,(2) which have been taking advantage of new technology and staking
claims around the world. These new explorations are leading to rapid growth in
reserves and production, and we will continue to seek out high-growth companies
benefiting from these opportunities.
OUTLOOK
We continue to feel bullish, although we realize these markets can be volatile.
We maintain our belief that global economic growth should provide a positive
environment for commodity prices. It's important to remember that our stock
selection is primarily based on company specifics and, to a lesser degree, on
whether we are bullish, neutral or bearish on the related commodity. However,
based on current assessments, we tend to feel bullish on uranium, grain prices,
tin, lead, zinc and nickel. We are neutral on gold, silver, platinum, oil and
natural gas and chemicals, and we are bearish on forest products, carbon steel,
copper and aluminum.
PERFORMANCE SUMMARY
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
GT GLOBAL
VARIABLE
NATURAL MSCI
RESOURCES WORLD
<S> <C> <C>
31-Jan-95 10,000 10,000
10,050 10,148
10,375 10,639
10,683 11,012
10,750 11,108
11,067 11,107
11,867 11,665
11,717 11,407
11,650 11,741
11,358 11,559
11,767 11,962
31-Dec-95 12,220 12,314
12,643 12,539
13,532 12,618
14,280 12,830
15,574 13,134
16,208 13,148
15,407 13,217
14,976 12,752
16,252 12,901
17,282 13,409
17,643 13,505
18,321 14,264
31-Dec-96 18,471 14,038
</TABLE>
The chart above shows the performance of the Fund since inception, compared to
the MSCI World Index for the same period. It assumes a hypothetical $10,000
initial investment in the Fund and reflects all Fund expenses but not charges
and expenses of the separate account. Past performance is no guarantee of future
results.
(1) The MSCI World Index is an arithmetic average, weighted by market value, of
the performance of 1,563 securities listed on major world stock exchanges --
the U.S., Europe, Canada, Australia, New Zealand and the Far East. It
includes the effect of reinvested dividends and is measured in U.S. dollars.
(2) There can be no assurance the Fund will continue to own the companies
mentioned.
The index is unmanaged, not available for direct investment and does not incur
sales charges and professional management fees.
9
<PAGE>
GT GLOBAL
VARIABLE AMERICA FUND
TOTAL RETURNS THROUGH DECEMBER 31, 1996
Inception date: February 10, 1993
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DIVISION PERFORMANCE
AVERAGE WITH APPLICABLE WITHOUT
ANNUALIZED SURRENDER CHARGE SURRENDER CHARGE
<S> <C> <C>
1 Year 10.91% 16.91%
Life of Fund 17.75% 18.23%
Fund Performance
Average Annualized
1 Year 18.55%
Life of Fund 19.90%
</TABLE>
PERFORMANCE
For the 12 months ended December 31, 1996, the Fund's total return was 18.55%;
total return over the same investment period was 19.20% for the S&P Midcap 400
Index(1) and 16.49% for the Russell 2000 Index.(2)
Please note the market capitalization range of the Fund changed on January 2,
1997. The Fund now invests primarily in companies with a market capitalization
of $1 billion to $5 billion at the time of purchase. Previously the Fund
normally initially focused on companies having a market capitalization of $2
billion or less at the time of purchase.
MARKET REVIEW
Undaunted by Federal Reserve Chairman Alan Greenspan's cautionary statements in
early December, the equity market forged ahead to new highs, and the Fund
benefited accordingly. This is the second straight year the equity market has
turned in impressive gains, bringing the two-year appreciation close to 70% or
better for both the S&P 500 and the Dow Jones Industrials.
The foundation for the strong advance was what many have referred to as a
"Goldilocks" economy -- one that grows fast enough to allow good gains in
corporate profits, but not so fast as to force the Federal Reserve to raise
interest rates to tighten monetary policy. Despite a sharp, but brief, midyear
correction and periodic fears of a hike in interest rates by the Federal
Reserve, the market enjoyed a year characterized by moderation in most of the
key economic variables. As well, the Fed's stable monetary posture and the
balanced results of the November elections enhanced investor confidence in
financial markets. With mutual fund inflows from retirement plans and
individuals reaching a record pace and yields on money market instruments at low
levels, the stage was set for the market's advance.
Performance for the year was heavily skewed toward liquid, large cap issues, as
reflected by the Dow's strong 29% advance, while smaller capitalization stocks
lagged noticeably - the Russell 2000 Index rose just 17%. In fact, more than
half the S&P 500's advance for the year was generated by the 10 largest
capitalization stocks in the index. Even more striking was that the two largest
stocks in the NASDAQ 100 (Intel and Microsoft)(3) accounted for 80% of the
NASDAQ 100's 45% return for the year.
OUTLOOK
Vital signs for the economy and interest rates remain positive. Still, the
market's mood has understandably turned cautious considering the powerful move
of the last 24 months. We believe economic growth is likely to remain moderate
for the coming year (in the 2%-3% range), paving the way for further growth in
corporate profits. Inflation, which studies suggest may be more tame than
indicators imply, should remain muted as long as wage growth does not exceed
productivity gains. Interest rates, which have backed up recently on fears of a
stronger economy, will most likely stabilize and trend lower as evidence of
extended moderate growth begins to predominate. A rising U.S. dollar and the
possibility of a domestic budget compromise should also help bolster markets.
Major imponderables remain the pace of new investment flows into the markets and
the effect a market correction might have on these flows.
While investors may take some time to digest their recent gains, we see little
reason, on either fundamental or valuation grounds, to project a major market
reversal in the first months of 1997. Barring a significant deterioration in the
market backdrop, equities have the potential to produce positive, although less
impressive, returns for investors in 1997.
PERFORMANCE SUMMARY
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
GT GLOBAL
VARIABLE S&P 400 RUSSELL
AMERICA MIDCAP 2000
<S> <C> <C> <C>
10-Feb-93 10,000 10,000 10,000
10,008 9,725 9,733
9,908 10,061 10,049
9,525 9,798 9,772
10,150 10,244 10,205
9,817 10,295 10,268
9,992 10,275 10,410
10,308 10,700 10,859
10,417 10,813 11,166
11,108 10,848 11,453
11,225 10,608 11,080
11,467 11,100 11,459
11,650 11,359 11,818
12,033 11,197 11,775
12,275 10,679 11,155
12,502 10,758 11,221
12,675 10,656 11,095
12,666 10,289 10,720
12,640 10,638 10,897
13,365 11,195 11,504
13,485 10,986 11,465
13,511 11,106 11,418
13,339 10,605 10,957
31-Dec-94 13,632 10,702 11,250
13,761 10,814 11,108
14,442 11,381 11,570
14,986 11,578 11,769
15,606 11,811 12,030
16,003 12,096 12,237
17,028 12,588 12,872
17,968 13,244 13,613
18,135 13,490 13,895
18,222 13,817 14,143
17,555 13,461 13,511
18,012 14,049 14,078
17,089 14,014 14,450
17,204 14,217 14,434
17,581 14,701 14,884
17,766 14,877 15,187
19,180 15,331 15,999
19,294 15,538 16,629
18,574 15,305 15,947
17,424 14,270 14,554
18,338 15,093 15,399
19,581 15,751 16,001
19,592 15,797 15,754
20,445 16,686 16,403
31-Dec-96 20,260 16,705 16,833
</TABLE>
The chart above shows the performance of the Fund since inception compared to
the various indices for the same period. It assumes a hypothetical $10,000
initial investment in the Fund and reflects all Fund expenses but not charges
and expenses of the separate account. Past performance is no guarantee of future
results.
(1) The S&P Midcap 400 Index comprises the market value-weighted average price
of 400 selected common stocks of medium-size domestic companies. It includes
the effect of reinvested dividends and is measured in U.S. dollars.
(2) The Russell 2000 Index comprises 2,000 U.S.-domiciled common stocks designed
to measure small company stock performance. The index represents roughly 10%
of the U.S. stock market, and market capitalization of index companies
ranged from $90 million to $1.17 billion as of June 1996. It includes the
effect of reinvested dividends and is measured in U.S. dollars.
(3) There can be no assurance the Fund will continue to own the companies
mentioned.
The indices are unmanaged, not available for direct investment and do not
include the effects of sales charges and professional management fees.
10
<PAGE>
GT GLOBAL
VARIABLE NEW PACIFIC FUND
TOTAL RETURNS THROUGH DECEMBER 31, 1996
Inception date: February 10, 1993
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DIVISION PERFORMANCE
AVERAGE WITH APPLICABLE WITHOUT
ANNUALIZED SURRENDER CHARGE SURRENDER CHARGE
<S> <C> <C>
1 Year 23.15% 29.15%
Life of Fund 9.45% 10.04%
Fund Performance
Average Annualized
1 Year 30.97%
Life of Fund 11.59%
</TABLE>
PERFORMANCE
The Fund enjoyed a strong year, returning a total of 30.97% over the 12-month
period to December 31, 1996. Total return for the Morgan Stanley Capital
International (MSCI) Pacific ex-Japan Index(1) over the same period was 20.97%.
Relative to the index, the Fund benefited from security selection in Malaysia,
Hong Kong and the Philippines. An underweighted position in Singapore also
proved positive.
MARKET REVIEW
Performance varied significantly throughout the region in 1996. Hong Kong was
the most robust market and, together with Malaysia and Indonesia, considerably
outperformed Korea, Thailand and Singapore (the Fund held relatively minor
positions in the latter three markets).
The Hong Kong market was fueled by a recovery in the property market and growing
optimism about the Chinese business cycle. At the sector level, "red chips"
(companies managed in Hong Kong but with substantial business operations in
China) enjoyed a period of strong performance. In particular, speculation about
potential asset injection and spin-offs helped add momentum to companies with
Chinese provincial or ministerial parentage.
In Malaysia, an improvement in its current account, together with expectations
that local interest rates had peaked, led foreign investors to substantially
increase their exposure to the market. Meanwhile, the Indonesian market made
strong gains in the first half of the year. The past six months, however, were
marked by increasing turbulence. The Jakarta market fell on heavy profit-taking
and political unrest, with the government's suppression of key opposition
figures in late summer.
Korea led the underperformers and continued to disappoint investors. The MSCI
Korea Index slid another 20% in the last quarter of the year on deteriorating
economic fundamentals, increasing stock supply and soaring outstanding margin
positions. The Thai market also underperformed other regional markets as the
economy weakened and the poor earnings outlook continued. Moreover, worries over
banking and finance companies' bad loans spurred further market declines.
Finally, Singapore's GDP growth in 1996 was adversely affected by a slowdown in
the electronics cycle, and the market ended on a down note.
OUTLOOK
Going forward, we intend to continue focusing on asset allocation, a strategy
that has paid off well over the last few months. We currently expect allocation
will favor both Hong Kong and Malaysia, particularly, with other countries
performing a rather minimal role over the next few months. We anticipate
additional restructuring to take place in both these markets and feel the
portfolio is well positioned to benefit from that trend.
The Hong Kong market is also optimistic that the transition back to China will
be a smooth one and prosperity will be maintained. There is, of course, the
potential for market volatility with the handover. We believe the continuation
of the cyclical recovery in China will result in a decoupling of Hong Kong
equities from the U.S. market, and feel the potential for Hong Kong companies to
generate further value from China should not be underestimated.
Additionally, we are positive about the Philippine market. The country began to
turn around not long after Ramos took over as president several years ago.
Sensible economic policies have led to a strong boom, and the market is
performing well after the central bank's decision to cut bank reserve
requirements by 2% in the near term.
PERFORMANCE SUMMARY
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
GT GLOBAL MSCI
VARIABLE PACIFIC
NEW PACIFIC EX-JAPAN
<S> <C> <C>
10-Feb-93 10,000 10,000
10,008 10,540
10,308 10,719
10,833 11,268
11,258 11,700
10,892 11,345
11,308 11,746
11,692 12,633
11,808 12,877
12,425 14,960
11,992 14,513
13,392 17,527
13,425 17,046
12,900 16,216
11,808 14,494
12,174 15,167
12,417 15,668
11,990 14,974
12,425 15,763
13,262 16,822
13,019 16,381
12,960 16,645
11,940 15,311
31-Dec-94 11,722 15,075
10,526 13,774
10,818 15,061
10,869 15,219
11,028 15,421
11,638 16,468
11,655 16,157
12,226 16,824
11,773 16,379
11,714 16,590
11,319 16,298
11,134 16,443
11,697 17,090
13,025 18,226
13,008 18,503
12,941 18,744
13,630 19,261
14,269 19,069
13,875 18,714
13,467 17,776
14,232 18,576
14,351 19,056
14,461 19,579
15,295 20,629
31-Dec-96 15,320 20,674
</TABLE>
The chart above shows the performance of the Fund since inception, compared to
the MSCI Pacific ex-Japan Index for the same period. It assumes a hypothetical
$10,000 initial investment in the Fund and reflects all Fund expenses but not
charges and expenses of the separate account. Past performance is no guarantee
of future results.
(1) The MSCI Pacific ex-Japan Index is an arithmetic average, weighted by market
value, of the performance of 216 securities listed on five major Pacific Rim
stock exchanges (Australia, Hong Kong, Malaysia, New Zealand and Singapore).
It includes the effect of reinvested dividends and is measured in U.S.
dollars.
The index is unmanaged, not available for direct investment and does not
include the effects of sales charges and professional management fees.
11
<PAGE>
GT GLOBAL
VARIABLE EUROPE FUND
TOTAL RETURNS THROUGH DECEMBER 31, 1996
Inception date: February 10, 1993
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DIVISION PERFORMANCE
AVERAGE WITH APPLICABLE WITHOUT
ANNUALIZED SURRENDER CHARGE SURRENDER CHARGE
<S> <C> <C>
1 Year 22.44% 28.44%
Life of Fund 14.41% 14.92%
Fund Performance
Average Annualized
1 Year 30.25%
Life of Fund 16.54%
</TABLE>
PERFORMANCE
The Fund enjoyed a strong year, returning a total of 30.25% over the 12-month
period to December 31, 1996. The Morgan Stanley Capital International (MSCI)
Europe Index(1) returned 21.57% over the same period.
During the year, an underweighted exposure to Switzerland and good securities
selection in France and Germany benefited the Fund relative to the index. In
terms of sectors, consumer and services companies were strong contributors to
performance as they comprise companies with a visible earnings outlook that were
fueled by strong demand. The Fund also benefited from its holdings in mid-cap
stocks such as Altran Technologies in France and Nearmedic, a company with
Russian interests.
MARKET REVIEW
European equity markets have made solid progress in 1996, largely reflecting the
rise in bond prices. The environment was supportive as inflation remained
benign. Peripheral bond markets benefited in particular from a convergence of
yields towards the level of German bonds, with the expectation of monetary union
taking place.
Corporate reform has been among the factors responsible for the strength of
continental European stock markets over the last two years. Leading companies in
countries such as France and Germany have restructured to increase returns to
shareholders. This reform has involved divesting themselves of non-core
operations, reducing staffing levels, introducing schemes to provide management
incentives, and the easing of legal restrictions on hostile takeovers and share
buybacks.
OUTLOOK
We expect positive returns from European equities in 1997. Valuation levels are
currently supportive despite our belief that long bond yields will rise over the
year. The upturn in economic growth rates and the focus on controlling costs
should have a beneficial impact on corporate profitability.
In our opinion, the greatest appreciation potential resides with medium-sized
companies, which have lagged the recent rise in markets and are typically more
sensitive to an improvement in domestic economies. From a sectoral perspective,
we anticipate that the Fund's focus on services, consumer goods and health care
will prove rewarding over the long term.
We also think eastern Europe has significant long-term potential, as trend
economic growth rates are superior to the more developed European countries,
although over the short term many of these markets may be vulnerable to
relatively greater volatility. The Fund's exposure to this region is likely to
increase in the medium term.
PERFORMANCE SUMMARY
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
GT GLOBAL
VARIABLE MSCI
EUROPE EUROPE
<S> <C> <C>
10-Feb-93 10,000 10,000
10,008 10,164
10,133 10,690
10,525 10,930
10,858 11,051
10,842 10,893
11,183 10,934
11,875 11,897
11,958 11,864
12,400 12,362
12,075 12,099
12,775 13,011
13,708 13,677
13,158 13,196
12,758 12,826
13,083 13,361
12,557 12,798
12,399 12,667
12,950 13,335
13,225 13,763
12,891 13,221
13,292 13,802
12,674 13,277
31-Dec-94 12,699 13,357
12,457 13,257
12,290 13,562
11,907 14,197
12,466 14,656
12,783 14,961
13,033 15,107
13,598 15,900
13,362 15,291
13,842 15,758
13,673 15,689
13,699 15,806
13,926 16,313
14,264 16,425
14,904 16,730
15,621 16,936
16,211 17,064
16,573 17,201
16,916 17,397
16,074 17,185
16,899 17,701
16,924 18,079
17,187 18,505
17,833 19,449
31-Dec-96 18,139 19,831
</TABLE>
The chart above shows the performance of the Fund since inception compared to
the MSCI Europe Index for the same period. It assumes a hypothetical $10,000
initial investment in the Fund and reflects all Fund expenses but not charges
and expenses of the separate account. Past performance is no guarantee of future
results.
(1) The MSCI Europe Index is an arithmetic average, weighted by market value, of
the performance of 573 securities listed on 14 major European stock
exchanges. It includes the effect of reinvested dividends and is measured in
U.S. dollars.
The index is unmanaged, not available for direct investment and does not
include the effects of sales charges and professional management fees.
12
<PAGE>
GT GLOBAL
MONEY MARKET FUND
The GT Global Money Market Fund's investment objective is to maximize current
income while maintaining liquidity and conservation of capital.
PERFORMANCE
The Fund's total return for the 12 months ended December 31, 1996, was 4.75%. As
of December 31, 1996, the Fund's SEC seven-day yield was 4.78%. Because the Fund
invests only in short-term debt obligations with remaining maturities of 13
months or less, its performance generally reflects the level of short-term
interest rates.
MARKET REVIEW
The year began on a positive note, with the Federal Reserve lowering the Federal
Funds Rate by 25 basis points, to 5.25%. But during the first half of the year,
evidence of growing economic momentum appeared and raised the specter of Fed
tightening to slow growth in the face of ever lower levels of unemployment and
concerns over increasing wage pressures and their impact on the general level of
inflation. Yields on three-month Treasury bills increased during the first half
of the year from approximately 5.1% to 5.3%. However, continued positive
inflation statistics and evidence that the economy was slowing provided
breathing room for the Fed to hold rates steady as the first half of 1996 came
to a close.
Additional signs that economic growth was subsiding emerged late in the third
quarter. As a result, the yield on three-month Treasury bills fell back to its
year-low level of 4.9% in early December, in anticipation that the Federal
Reserve's next move would be to lower rates to maintain economic growth.
Unfortunately, the roller coaster ride continued as December economic releases
indicated that economic momentum remained strong and hopes of a Fed rate cut
receded. Disappointed investors, further disheartened by Fed Chairman
Greenspan's remarks regarding "irrational exuberance" in the capital markets,
drove interest rates up 30 basis points in the short end, to end the year at
approximately a 5.2% level on three-month Treasury bills.
As 1996 ended, the U.S. economic outlook was mixed. Consumer confidence was at a
10-year high and unemployment was near a 10-year low. However, retail sales were
weak over the Christmas shopping season, reinforcing that consumer confidence
and low unemployment have never been good predictors of consumer spending, a key
driver of the economy.
OUTLOOK
Despite some indications of a firmer economy, we believe economic growth for
1997 will once again range between 2%-3%. Moderately restrictive monetary policy
and controlled federal spending should prevent the economy from overheating.
Inflation should decelerate due to continued productivity gains, international
competitive pressures, moderate money growth and a projected decline in energy
prices later in the year. These favorable economic conditions should allow the
Federal Reserve to hold monetary policy steady. The major risks to our forecast
are stubbornly high oil prices, accelerating unit labor costs and a premature
resumption of growth in Europe or Japan.
While our outlook is favorable for financial assets in general and fixed income
specifically, we expect a high degree of volatility as the year progresses and
signs of economic growth ebb and flow. The current strategy in the Fund is to
invest in some longer-maturity instruments to lock in attractive yields.
However, we plan to keep a large portion of assets in instruments under 30 days
due to the high liquidity requirements of the Fund.
The Fund's strategy remains conservative. We continue to invest in commercial
paper of large issuers, rated in the highest categories by S&P or Moody's, or of
equivalent quality, and U.S. Treasury and Agency obligations. We do not use
derivatives in the management of the Fund.
13
<PAGE>
GT GLOBAL
VARIABLE INTERNATIONAL FUND
TOTAL RETURNS THROUGH DECEMBER 31, 1996
Inception date: July 5, 1994
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DIVISION PERFORMANCE
AVERAGE WITH APPLICABLE WITHOUT
ANNUALIZED SURRENDER CHARGE SURRENDER CHARGE
<S> <C> <C>
1 Year 1.01% 7.01%
Life of Fund -2.61% -1.00%
Fund Performance
Average Annualized
1 Year 8.52%
Life of Fund 0.42%
</TABLE>
PERFORMANCE
The Fund's total return for the 12 months ended December 31, 1996, was 8.52%.
Total return for the Morgan Stanley Capital International Europe, Australia, Far
East (MSCI-EAFE) Index(1) over the same period was 6.36%.
The Fund outperformed the index primarily as a result of country selection in
Europe and being underweighted in Japan.
MARKET REVIEW
Corporate reform has been among the factors responsible for the strength of
continental European stock markets over the last two years. Leading companies in
countries such as France and Germany have restructured to increase returns to
shareholders. This reform has involved divestiture of non-core operations,
reduction in staffing levels, introduction of schemes to provide management
incentives, and easing of legal restrictions on hostile takeovers and share
buybacks.
Meanwhile in Japan, the transitional period the country entered into in the
early 1990s continued in 1996, with sluggish economic growth and deflation
persisting throughout the year. Japanese banks have yet to overcome the bad debt
crisis fueled by a collapse in property and stock prices. The fragile financial
system has not only depressed consumer confidence, but could also worsen as
declining share prices erode the value of banks' stock portfolios.
The Hong Kong market, on the other hand, was driven by a recovery in the
property market and growing optimism about the Chinese business cycle. At the
sector level, "red chips" (companies managed in Hong Kong but with substantial
business operations in China) enjoyed a period of especially strong performance.
Moreover, speculation about potential asset injection and spin-offs helped add
momentum to companies with Chinese provincial or ministerial parentage.
The Australian market rose by nearly 18% in 1996, largely driven by easier
monetary policy and a consequent decline in bond yields. The banking sector was
the best performer given the added impetus from expectations of mergers or
takeovers, while the oil and gas sector also performed well on much stronger oil
prices.
With respect to the Fund's largest position in Latin America, Mexico, the latest
statistics confirm that an investment-led recovery in the Mexican economy is
well underway. Consequently, we remain fairly optimistic about its stock market.
Real wages, which have been falling for more than two years, are likely to begin
recovering this year, which could boost domestic demand and consumption stocks.
OUTLOOK
Our outlook for global financial markets remains favorable as global
disinflation continues to underpin both equity and bond markets.
Our outlook for the UK and European stock markets is more promising than for the
U.S. Price/earnings and price/cash flow ratios are 25%-40% lower than those of
American stocks. And, at long last, managers in France, Germany, Switzerland and
Italy are beginning to focus on adding value for shareholders, and the resulting
corporate restructuring is providing investors with exciting opportunities.
While our outlook for Hong Kong following the transfer of sovereignty is
promising, we may see some consolidation in the first quarter of 1997. Over the
longer term, the territory's political transition provides the Chinese
government with strong incentive to promote a positive economic environment in
southern China.
Conversely, our outlook for the Japanese stock market remains bleak, underscored
by the continued importance of careful sector and stock selection. Real economic
growth is low; nominal growth is lower. Many companies are continuing to find
their margins under pressure. Moreover, Japanese big businesses are, for the
most part, way behind their counterparts elsewhere in embracing the need for
restructuring.
Finally, in emerging Asia we believe the era of rapid economic growth is not yet
over. However, there is a much greater need for a more selective approach than
was the case in the late 1980s. The acceleration of the Chinese economy is
important for the entire region.
PERFORMANCE SUMMARY
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
GT GLOBAL
VARIABLE MSCI
INTERNATIONAL EAFE
<S> <C> <C>
5-Jul-94 10,000 10,000
10,025 10,045
10,217 10,285
9,800 9,963
10,083 10,297
9,625 9,805
9,420 9,868
8,817 9,492
8,599 9,467
8,557 10,060
8,792 10,441
8,750 10,319
8,913 10,141
9,374 10,775
9,240 10,367
30-Sep-95 9,391 10,572
9,081 10,290
9,089 10,579
9,313 11,008
9,456 11,056
9,473 11,096
9,600 11,335
9,795 11,667
9,795 11,455
9,843 11,522
9,325 11,188
9,546 11,216
9,707 11,517
9,673 11,402
10,072 11,858
31-Dec-96 10,106 11,708
</TABLE>
The chart above shows the performance of the Fund since inception, compared to
the MSCI EAFE Index for the same period. It assumes a hypothetical $10,000
initial investment in the Fund and reflects all Fund expenses but not charges
and expenses of the separate account. Past performance is no guarantee of future
results.
(1) The MSCI-EAFE is an arithmetic average, weighted by market value, of the
performance of 1,098 securities listed on 20 major world stock exchanges. It
includes the effect of reinvested dividends and is measured in U.S. dollars.
The index is unmanaged, not available for direct investment and does not
include the effects of sales charges and professional management fees.
14
<PAGE>
GT GLOBAL
ALLOCATOR
DIVISIONS'
FINANCIAL
STATEMENTS
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT TWENTY-EIGHT AND
GENERAL AMERICAN SEPARATE ACCOUNT TWENTY-NINE
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
The Board of Directors and Contractholders
General American Life Insurance Company:
We have audited the statements of assets and liabilities, including the schedule
of investments of the Money Market, Variable Strategic Income, Variable Global
Government Income, and Variable U.S. Government Income Divisions of General
American Separate Account Twenty-eight and of the Variable New Pacific, Variable
Europe, Variable America, Variable Growth & Income, Variable Latin America,
Variable Telecommunications, Variable International, Variable Emerging Markets,
Variable Natural Resources, and Variable Infrastructure Divisions of General
American Separate Account Twenty-nine as of December 31, 1996, the related
statements of operations, changes in net assets and condensed financial
information for the periods presented. These financial statements and condensed
financial information are the responsibility of management of Separate Accounts
Twenty-eight and Twenty-nine. Our responsibility is to express an opinion on
these financial statements and condensed financial information 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 condensed
financial information 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 investments
owned as of December 31, 1996 by correspondence with GT Global Variable
Investment Funds. 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 condensed financial information
referred to above present fairly, in all material respects, the financial
position of the Money Market, Variable Strategic Income, Variable Global
Government Income, and Variable U.S. Government Income Divisions of General
American Separate Account Twenty-eight and of the Variable New Pacific, Variable
Europe, Variable America, Variable Growth & Income, Variable Latin America,
Variable Telecommunications, Variable International, Variable Emerging Markets,
Variable Natural Resources and Variable Infrastructure Divisions of General
American Separate Account Twenty-nine as of December 31, 1996, the results of
their operations, changes in their net assets and the condensed financial
information for all periods presented, in conformity with generally accepted
accounting principles.
KPMG PEAT MARWICK LLP
ST. LOUIS, MISSOURI
FEBRUARY 14, 1997
D1
<PAGE>
(THIS PAGE INTENTIONALLY LEFT BLANK)
D2
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT TWENTY-EIGHT
STATEMENTS OF ASSETS
AND LIABILITIES
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
VARIABLE VARIABLE GLOBAL VARIABLE U.S.
MONEY STRATEGIC GOVERNMENT GOVERNMENT
MARKET INCOME INCOME INCOME
DIVISION DIVISION DIVISION DIVISION
------------ ------------ --------------- -------------
Assets:
Investments in GT Global Variable Investment Funds, at
market value
(see Schedule of Investments):........................... $ 16,765,081 $ 32,794,928 $ 10,378,048 $ 5,404,215
Receivable from General American Life Insurance Company... 2,985,089 0 0 48,768
Receivable from GT Global Financial Services, Inc......... 71,778 0 0 0
------------ ------------ --------------- -------------
Total assets............................................ 19,821,948 32,794,928 10,378,048 5,452,983
------------ ------------ --------------- -------------
Liability:
Payable to General American Life Insurance Company........ 0 1,243,790 11,908 0
------------ ------------ --------------- -------------
Total net assets........................................ $ 19,821,948 $ 31,551,138 $ 10,366,140 $ 5,452,983
------------ ------------ --------------- -------------
------------ ------------ --------------- -------------
Total net assets represented by:
Individual variable annuity contracts cash value
invested in Separate Account............................. $ 19,821,948 $ 31,546,646 $ 10,366,140 $ 5,231,490
Individual variable annuity contracts cash value in
payment period........................................... 0 4,492 0 0
General American Life Insurance Company seed money cash
value.................................................... 0 0 0 221,493
------------ ------------ --------------- -------------
Total net assets........................................ $ 19,821,948 $ 31,551,138 $ 10,366,140 $ 5,452,983
------------ ------------ --------------- -------------
------------ ------------ --------------- -------------
Total individual units held................................. 1,490,411 1,806,852 742,891 393,460
Total seed money units held................................. 0 0 0 16,666
Individual unit value....................................... $ 13.30 $ 17.46 $ 13.95 $ 13.29
Cost of investments......................................... $ 16,765,081 $ 30,651,375 $ 10,149,258 $ 5,431,503
</TABLE>
See accompanying notes to the financial statements.
D3
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT TWENTY-EIGHT
STATEMENTS OF OPERATIONS
For the year ended December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
VARIABLE VARIABLE GLOBAL VARIABLE U.S.
MONEY STRATEGIC GOVERNMENT GOVERNMENT
MARKET INCOME INCOME INCOME
DIVISION DIVISION DIVISION DIVISION
---------- ----------- --------------- -------------
Investment income:
Dividend income........................................... $ 714,358 $ 1,997,857 $ 704,616 $ 260,876
Expenses:
Mortality, expense and administrative charges............. (214,552) (380,402) (150,461) (72,476)
---------- ----------- --------------- -------------
Net investment income..................................... 499,806 1,617,455 554,155 188,400
---------- ----------- --------------- -------------
Net realized gain (loss) on investments:
Realized gain (loss) on sales............................. 0 2,520,865 19,403 (6,593)
---------- ----------- --------------- -------------
Net realized gain (loss) on investments................... 0 2,520,865 19,403 (6,593)
---------- ----------- --------------- -------------
Net unrealized gain (loss) on investments:
Unrealized gain on investments, beginning of period....... 0 1,405,306 325,567 108,085
Unrealized gain (loss) on investments, end of period...... 0 2,143,553 228,790 (27,288)
---------- ----------- --------------- -------------
Net unrealized gain (loss) on investments................. 0 738,247 (96,777) (135,373)
---------- ----------- --------------- -------------
Net gain (loss) on investments............................ 0 3,259,112 (77,374) (141,966)
---------- ----------- --------------- -------------
Net increase in net assets resulting from operations...... $ 499,806 $ 4,876,567 $ 476,781 $ 46,434
---------- ----------- --------------- -------------
---------- ----------- --------------- -------------
</TABLE>
See accompanying notes to the financial statements.
D4
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT TWENTY-EIGHT
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended December 31, 1996 and 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VARIABLE
STRATEGIC INCOME
MONEY MARKET DIVISION DIVISION
------------------------- ------------------------
1996 1995 1996 1995
----------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
Operations:
Net investment income..................................... $ 499,806 $ 589,944 $ 1,617,455 $ 1,662,908
Net realized gain (loss) on investments................... 0 0 2,520,865 (3,614,851)
Net unrealized gain (loss) on investments................. 0 0 738,247 5,698,975
----------- ------------ ----------- -----------
Net increase in net assets resulting from operations.... 499,806 589,944 4,876,567 3,747,032
----------- ------------ ----------- -----------
Deposits into Separate Account............................ 14,414,776 10,769,393 3,955,884 2,989,136
Transfers to (from) Separate Account...................... (6,048,583) (12,838,342) 499,563 (2,608,659)
Withdrawals from Separate Account......................... (3,951,533) (3,110,109) (3,078,289) (2,137,433)
----------- ------------ ----------- -----------
Net deposits into (withdrawals from) Separate Account... 4,414,660 (5,179,058) 1,377,158 (1,756,956)
----------- ------------ ----------- -----------
Increase (decrease) in net assets......................... 4,914,466 (4,589,114) 6,253,725 1,990,076
Net assets, beginning of period........................... 14,907,482 19,496,596 25,297,413 23,307,337
----------- ------------ ----------- -----------
Net assets, end of period................................. $19,821,948 $ 14,907,482 $31,551,138 $25,297,413
----------- ------------ ----------- -----------
----------- ------------ ----------- -----------
</TABLE>
<TABLE>
<CAPTION>
VARIABLE VARIABLE
GLOBAL GOVERNMENT U.S. GOVERNMENT
INCOME DIVISION INCOME DIVISION
------------------------- ------------------------
1996 1995 1996 1995
----------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
Operations:
Net investment income..................................... $ 554,155 $ 569,411 $ 188,400 $ 170,297
Net realized gain (loss) on investments................... 19,403 (607,687) (6,593) 241,347
Net unrealized gain (loss) on investments................. (96,777) 1,451,325 (135,373) 125,215
----------- ------------ ----------- -----------
Net increase in net assets resulting from operations.... 476,781 1,413,049 46,434 536,859
----------- ------------ ----------- -----------
Deposits into Separate Account............................ 877,625 1,998,263 1,776,392 2,187,551
Transfers to (from) Separate Account...................... (1,896,264) (126,814) (1,851,071) 1,369,582
Withdrawals from Separate Account......................... (998,792) (995,738) (479,299) (525,767)
----------- ------------ ----------- -----------
Net deposits into (withdrawals from) Separate Account... (2,017,431) 875,711 (553,978) 3,031,366
----------- ------------ ----------- -----------
Increase (decrease) in net assets......................... (1,540,650) 2,288,760 (507,544) 3,568,225
Net assets, beginning of period........................... 11,906,790 9,618,030 5,960,527 2,392,302
----------- ------------ ----------- -----------
Net assets, end of period................................. $10,366,140 $ 11,906,790 $ 5,452,983 $ 5,960,527
----------- ------------ ----------- -----------
----------- ------------ ----------- -----------
</TABLE>
See accompanying notes to the financial statements.
D5
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT TWENTY-NINE
STATEMENTS OF ASSETS
AND LIABILITIES
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VARIABLE VARIABLE VARIABLE
NEW PACIFIC EUROPE AMERICA
DIVISION DIVISION DIVISION
------------ ------------ ------------
<S> <C> <C> <C>
Assets:
Investments in GT Global Variable Investment Funds, at
market value
(see Schedule of Investments):........................... $ 32,504,929 $ 24,819,775 $ 41,598,928
Receivable from General American Life Insurance Company... 0 0 0
------------ ------------ ------------
Total assets............................................ 32,504,929 24,819,775 41,598,928
------------ ------------ ------------
Liability:
Payable to General American Life Insurance Company........ 1,573,281 445,358 117,092
------------ ------------ ------------
Total net assets........................................ $ 30,931,648 $ 24,374,417 $ 41,481,836
------------ ------------ ------------
------------ ------------ ------------
Total net assets represented by:
Individual variable annuity contracts cash value invested
in Separate Account...................................... $ 30,927,170 $ 24,365,150 $ 41,441,858
Individual variable annuity contracts cash value in
payment period........................................... 4,478 9,267 39,978
------------ ------------ ------------
Total net assets........................................ $ 30,931,648 $ 24,374,417 $ 41,481,836
------------ ------------ ------------
------------ ------------ ------------
Total individual units held................................. 1,776,419 1,182,288 1,801,893
Individual unit value....................................... $ 17.41 $ 20.62 $ 23.02
Cost of investments......................................... $ 31,447,610 $ 23,809,657 $ 40,357,202
</TABLE>
See accompanying notes to the financial statements.
D6
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT TWENTY-NINE
STATEMENTS OF ASSETS
AND LIABILITIES (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VARIABLE VARIABLE VARIABLE VARIABLE
GROWTH & VARIABLE TELECOM- VARIABLE EMERGING NATURAL
INCOME LATIN AMERICA MUNICATIONS INTERNATIONAL MARKETS RESOURCES
DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION
------------ ------------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investments in GT Global Variable
Investment Funds, at market value
(see Schedule of Investments):....... $ 36,367,040 $ 21,675,681 $ 62,289,120 $ 4,598,808 $ 17,887,677 $ 16,104,241
Receivable from General American Life
Insurance Company.................... 0 261,101 492,517 0 0 0
------------ ------------- ------------ ------------- ------------ ------------
Total assets........................ 36,367,040 21,936,782 62,781,637 4,598,808 17,887,677 16,104,241
------------ ------------- ------------ ------------- ------------ ------------
Liability:
Payable to General American Life
Insurance Company.................... 30,320 0 0 108,452 537,670 4,572
------------ ------------- ------------ ------------- ------------ ------------
Total net assets.................... $ 36,336,720 $ 21,936,782 $ 62,781,637 $ 4,490,356 $ 17,350,007 $ 16,099,669
------------ ------------- ------------ ------------- ------------ ------------
------------ ------------- ------------ ------------- ------------ ------------
Total net assets represented by:
Individual variable annuity contracts
cash value invested in Separate
Account.............................. $ 36,316,606 $ 21,932,226 $ 62,725,407 $ 4,485,853 $ 17,343,813 $ 16,075,006
Individual variable annuity contracts
cash value in payment period......... 20,114 4,556 56,230 4,503 6,194 24,663
------------ ------------- ------------ ------------- ------------ ------------
Total net assets.................... $ 36,336,720 $ 21,936,782 $ 62,781,637 $ 4,490,356 $ 17,350,007 $ 16,099,669
------------ ------------- ------------ ------------- ------------ ------------
------------ ------------- ------------ ------------- ------------ ------------
Total individual units held............. 2,080,144 1,291,662 3,176,554 383,643 1,233,863 746,479
Individual unit value................... $ 17.47 $ 16.98 $ 19.76 $ 11.70 $ 14.06 $ 21.57
Cost of investments..................... $ 32,149,986 $ 20,072,506 $ 55,206,225 $ 4,420,487 $ 16,957,308 $ 15,029,519
<CAPTION>
VARIABLE
INFRASTRUCTURE
DIVISION
--------------
<S> <C>
Assets:
Investments in GT Global Variable
Investment Funds, at market value
(see Schedule of Investments):....... $ 5,905,729
Receivable from General American Life
Insurance Company.................... 1,784
--------------
Total assets........................ 5,907,513
--------------
Liability:
Payable to General American Life
Insurance Company.................... 0
--------------
Total net assets.................... $ 5,907,513
--------------
--------------
Total net assets represented by:
Individual variable annuity contracts
cash value invested in Separate
Account.............................. $ 5,902,965
Individual variable annuity contracts
cash value in payment period......... 4,548
--------------
Total net assets.................... $ 5,907,513
--------------
--------------
Total individual units held............. 366,167
Individual unit value................... $ 16.13
Cost of investments..................... $ 5,480,598
</TABLE>
See accompanying notes to the financial statements.
D7
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT TWENTY-NINE
STATEMENTS OF OPERATIONS
For the year ended December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VARIABLE VARIABLE VARIABLE
NEW PACIFIC EUROPE AMERICA
DIVISION DIVISION DIVISION
----------- ---------- -----------
<S> <C> <C> <C>
Investment income:
Dividend income........................................... $ 317,282 $ 155,185 $ 541,722
Expenses:
Mortality, expense and administrative charges............. (406,153) (285,551) (545,918)
----------- ---------- -----------
Net investment income (loss).............................. (88,871) (130,366) (4,196)
----------- ---------- -----------
Net realized gain (loss) on investments:
Realized gain from distributions.......................... 0 0 4,925,337
Realized gain (loss) on sales............................. 7,828,491 4,326,709 (1,027,283)
----------- ---------- -----------
Net realized gain on investments........................ 7,828,491 4,326,709 3,898,054
----------- ---------- -----------
Net unrealized gain (loss) on investments:
Unrealized gain (loss) on investments, beginning of
period................................................... 728,386 288,135 (745,361)
Unrealized gain on investments, end of period............. 1,057,319 1,010,118 1,241,726
----------- ---------- -----------
Net unrealized gain (loss) on investments............... 328,933 721,983 1,987,087
----------- ---------- -----------
Net gain on investments................................... 8,157,424 5,048,692 5,885,141
----------- ---------- -----------
Net increase in net assets resulting from operations...... $8,068,553 $4,918,326 $ 5,880,945
----------- ---------- -----------
----------- ---------- -----------
</TABLE>
See accompanying notes to the financial statements.
D8
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT TWENTY-NINE
STATEMENTS OF OPERATIONS (cont'd)
For the year ended December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VARIABLE VARIABLE VARIABLE VARIABLE
GROWTH & VARIABLE TELECOM- VARIABLE EMERGING NATURAL
INCOME LATIN AMERICA MUNICATIONS INTERNATIONAL MARKETS RESOURCES
DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION
------------ ------------- ----------- ------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Dividend income....................... $ 838,414 $ 605,826 $ 74,236 $ 0 $ 0 $ 0
Expenses:
Mortality, expense and administrative
charges.............................. (449,652) (310,535) (846,567 ) (60,474) (210,729) (107,139)
------------ ------------- ----------- ------------- ---------- ----------
Net investment income (loss).......... 388,762 295,291 (772,331 ) (60,474) (210,729) (107,139)
------------ ------------- ----------- ------------- ---------- ----------
Net realized gain (loss) on investments:
Realized gain from distributions...... 0 0 6,342,347 13,807 0 0
Realized gain (loss) on sales......... 2,170,219 936,972 4,979,696 145,599 2,569,947 1,296,927
------------ ------------- ----------- ------------- ---------- ----------
Net realized gain on investments.... 2,170,219 936,972 11,322,043 159,406 2,569,947 1,296,927
------------ ------------- ----------- ------------- ---------- ----------
Net unrealized gain (loss) on
investments:
Unrealized gain (loss) on investments,
beginning of period.................. 2,270,948 (1,215,906) 8,765,942 (17,291) 10,396 (11,123)
Unrealized gain on investments, end of
period............................... 4,217,054 1,603,175 7,082,895 178,321 930,369 1,074,722
------------ ------------- ----------- ------------- ---------- ----------
Net unrealized gain (loss) on
investments........................ 1,946,106 2,819,081 (1,683,047 ) 195,612 919,973 1,085,845
------------ ------------- ----------- ------------- ---------- ----------
Net gain on investments............... 4,116,325 3,756,053 9,638,996 355,018 3,489,920 2,382,772
------------ ------------- ----------- ------------- ---------- ----------
Net increase in net assets resulting
from operations...................... $ 4,505,087 $ 4,051,344 $8,866,665 $294,544 $3,279,191 $2,275,633
------------ ------------- ----------- ------------- ---------- ----------
------------ ------------- ----------- ------------- ---------- ----------
<CAPTION>
VARIABLE
INFRASTRUCTURE
DIVISION
--------------
<S> <C>
Investment income:
Dividend income....................... $ 25,964
Expenses:
Mortality, expense and administrative
charges.............................. (48,502)
--------------
Net investment income (loss).......... (22,538)
--------------
Net realized gain (loss) on investments:
Realized gain from distributions...... 0
Realized gain (loss) on sales......... 200,704
--------------
Net realized gain on investments.... 200,704
--------------
Net unrealized gain (loss) on
investments:
Unrealized gain (loss) on investments,
beginning of period.................. (11,781)
Unrealized gain on investments, end of
period............................... 425,131
--------------
Net unrealized gain (loss) on
investments........................ 436,912
--------------
Net gain on investments............... 637,616
--------------
Net increase in net assets resulting
from operations...................... $615,078
--------------
--------------
</TABLE>
See accompanying notes to the financial statements.
D9
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT TWENTY-NINE
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended December 31, 1996 and 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VARIABLE VARIABLE VARIABLE
NEW PACIFIC DIVISION EUROPE DIVISION AMERICA DIVISION
---------------------- ---------------------- ----------------------
1996 1995 1996 1995 1996 1995
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income (loss).......... $ (88,871) $ (193,973) $ (130,366) $ (60,815) $ (4,196) $ 157,097
Net realized gain (loss) on
investments.......................... 7,828,491 (1,608,622) 4,326,709 641,809 3,898,054 6,135,755
Net unrealized gain (loss) on
investments.......................... 328,933 2,077,298 721,983 636,478 1,987,087 (1,364,532)
---------- ---------- ---------- ---------- ---------- ----------
Net increase (decrease) in net
assets resulting from operations... 8,068,553 274,703 4,918,326 1,217,472 5,880,945 4,928,320
Deposits into Separate Account........ 3,830,544 3,610,697 2,410,618 1,602,275 5,680,228 9,612,392
Transfers to (from) Separate
Account.............................. (1,319,905) 1,060,224 2,917,523 (1,000,759) (3,361,891) 10,537,113
Withdrawals from Separate Account..... (2,387,202) (1,530,691) (1,437,759) (1,193,359) (4,243,739) (2,731,105)
---------- ---------- ---------- ---------- ---------- ----------
Net deposits into (withdrawals from)
Separate Account................... 123,437 3,140,230 3,890,382 (591,853) (1,925,402) 17,418,400
---------- ---------- ---------- ---------- ---------- ----------
Increase (decrease) in net assets..... 8,191,990 3,414,933 8,808,708 625,599 3,955,543 22,346,720
Net assets, beginning of period....... 22,739,658 19,324,725 15,565,709 14,940,110 37,526,293 15,179,573
---------- ---------- ---------- ---------- ---------- ----------
Net assets, end of period............. $30,931,648 $22,739,658 $24,374,417 $15,565,709 $41,481,836 $37,526,293
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
</TABLE>
<TABLE>
<CAPTION>
VARIABLE VARIABLE VARIABLE
EMERGING MARKETS NATURAL RESOURCES INFRASTRUCTURE
DIVISION DIVISION * DIVISION *
---------------------- ---------------------- ----------------------
1996 1995 1996 1995 1996 1995
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income (loss).......... $ (210,729) $ (15,320) $ (107,139) $ 54,318 $ (22,538) $ (8,272)
Net realized gain (loss) on
investments.......................... 2,569,947 (1,243,757) 1,296,927 42,120 200,704 35,838
Net unrealized gain (loss) on
investments.......................... 919,973 698,392 1,085,845 (11,123) 436,912 (11,781)
---------- ---------- ---------- ---------- ---------- ----------
Net increase (decrease) in net
assets resulting from operations... 3,279,191 (560,685) 2,275,633 85,315 615,078 15,785
Deposits into Separate Account........ 3,819,231 3,361,077 3,910,507 432,320 1,855,866 934,944
Transfers to (from) Separate
Account.............................. 2,368,261 (104,693) 9,030,189 828,362 2,122,405 634,407
Withdrawals from Separate Account..... (921,653) (736,190) (357,938) (104,719) (167,696) (103,276)
---------- ---------- ---------- ---------- ---------- ----------
Net deposits into (withdrawals from)
Separate Account................... 5,265,839 2,520,194 12,582,758 1,155,963 3,810,575 1,466,075
---------- ---------- ---------- ---------- ---------- ----------
Increase (decrease) in net assets..... 8,545,030 1,959,509 14,858,391 1,241,278 4,425,653 1,481,860
Net assets, beginning of period....... 8,804,977 6,845,468 1,241,278 0 1,481,860 0
---------- ---------- ---------- ---------- ---------- ----------
Net assets, end of period............. $17,350,007 $8,804,977 $16,099,669 $1,241,278 $5,907,513 $1,481,860
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
</TABLE>
- ----------------
* The Variable Natural Resources Division and the Variable
Infrastructure Division commenced operations January 31, 1995.
See accompanying notes to the financial statements.
D10
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT TWENTY-NINE
STATEMENTS OF CHANGES IN NET ASSETS (cont'd)
For the years ended December 31, 1996 and 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VARIABLE VARIABLE
GROWTH & INCOME DIVISION LATIN AMERICA DIVISION
-------------------------- --------------------------
1996 1995 1996 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Operations:
Net investment income
(loss)................... $ 388,762 $ 425,089 $ 295,291 $ 2,705,828
Net realized gain (loss)
on investments........... 2,170,219 202,914 936,972 (8,731,669)
Net unrealized gain (loss)
on investments........... 1,946,106 3,063,937 2,819,081 (441,963)
------------ ------------ ------------ ------------
Net increase (decrease)
in net assets resulting
from operations........ 4,505,087 3,691,940 4,051,344 (6,467,804)
Deposits into Separate
Account.................. 4,430,985 2,987,675 2,380,136 3,938,984
Transfers to (from)
Separate Account......... 850,032 850,154 (2,174,243) (2,665,686)
Withdrawals from Separate
Account.................. (3,936,966) (2,559,892) (1,721,962) (1,934,144)
------------ ------------ ------------ ------------
Net deposits into
(withdrawals from)
Separate Account....... 1,344,051 1,277,987 (1,516,069) (660,846)
------------ ------------ ------------ ------------
Increase (decrease) in net
assets................... 5,849,138 4,969,927 2,535,275 (7,128,650)
Net assets, beginning of
period................... 30,487,582 25,517,655 19,401,507 26,530,157
------------ ------------ ------------ ------------
Net assets, end of
period................... $ 36,336,720 $ 30,487,582 $ 21,936,782 $ 19,401,507
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
<CAPTION>
VARIABLE
TELECOMMUNICATIONS VARIABLE
DIVISION INTERNATIONAL DIVISION
-------------------------- ------------------------
1996 1995 1996 1995
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
Operations:
Net investment income
(loss)................... $ (772,331) $ 428,193 $ (60,474) $ (8,508)
Net realized gain (loss)
on investments........... 11,322,043 1,517,580 159,406 (64,759)
Net unrealized gain (loss)
on investments........... (1,683,047) 6,185,065 195,612 69,183
------------ ------------ ----------- -----------
Net increase (decrease)
in net assets resulting
from operations........ 8,866,665 8,130,838 294,544 (4,084)
Deposits into Separate
Account.................. 9,584,291 7,406,448 811,961 1,134,850
Transfers to (from)
Separate Account......... (819,084) 2,141,926 176,650 726,150
Withdrawals from Separate
Account.................. (5,542,852) (2,951,598) (222,037) (358,943)
------------ ------------ ----------- -----------
Net deposits into
(withdrawals from)
Separate Account....... 3,222,355 6,596,776 766,574 1,502,057
------------ ------------ ----------- -----------
Increase (decrease) in net
assets................... 12,089,020 14,727,614 1,061,118 1,497,973
Net assets, beginning of
period................... 50,692,617 35,965,003 3,429,238 1,931,265
------------ ------------ ----------- -----------
Net assets, end of
period................... $ 62,781,637 $ 50,692,617 $ 4,490,356 $ 3,429,238
------------ ------------ ----------- -----------
------------ ------------ ----------- -----------
</TABLE>
- ----------------
* The Variable Natural Resources Division and the Variable
Infrastructure Division commenced operations January 31, 1995.
See accompanying notes to the financial statements.
D11
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT TWENTY-EIGHT AND
GENERAL AMERICAN SEPARATE ACCOUNT TWENTY-NINE
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
- --------------------------------------------------------------------------------
NOTE 1 -- ORGANIZATION
General American Separate Account Twenty-eight and General American Separate
Account Twenty-nine (the Separate Accounts) commenced operations on February 10,
1993, and are registered under the Investment Company Act of 1940 (1940 Act) as
unit investment trusts. The Separate Accounts receive purchase payments from
individual variable annuity contracts issued by General American Life Insurance
Company (General American) which may be qualified or non-tax qualified.
Separate Account Twenty-eight is divided into four divisions and Separate
Account Twenty-nine is divided into ten divisions. Each division invests
exclusively in shares of a single fund of GT Global Variable Investment Funds
(the Funds), an open-end diversified management investment company. Separate
Account Twenty-eight invests in the Money Market, Variable Strategic Income,
Variable Global Government Income, and Variable U.S. Government Income Funds.
Separate Account Twenty-nine invests in the Variable New Pacific, Variable
Europe, Variable America, Variable Growth & Income, Variable Latin America,
Variable Telecommunications, Variable International, Variable Emerging Markets,
Variable Natural Resources and Variable Infrastructure Funds.
Contractholders have the option of directing their deposits into one or all of
the Divisions as well as a fixed account of General American, which is not
generally subject to regulation under the Securities Act of 1933 or the 1940
Act. The unit values for the Separate Accounts for all divisions began at $12.00
on February 10, 1993, except the following Divisions of Separate Account
Twenty-nine which began at $12.00: the Variable Telecommunications Division on
October 18, 1993, the Variable International Division on July 12, 1994, the
Variable Emerging Markets Division on July 6, 1994, and the Variable Natural
Resources and Variable Infrastructure Divisions on January 31, 1995.
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Separate Accounts in the preparation of financial statements. The policies
followed are in conformity with generally accepted accounting principles.
(A) INVESTMENTS
The Separate Accounts' investments in the GT Global Variable Funds are valued
daily on the respective shares held and based on the net asset values as
reported to General American by the Funds at the close of each business day. The
specific identification method is used in determining the cost of shares sold on
withdrawals by the Separate Accounts. Share transactions are recorded on the
trade date, which is the same as the settlement date.
(B) FEDERAL INCOME TAXES
Under current Federal income tax law, the investment income and capital gains
from sales of investments of the Separate Accounts are not taxable. Therefore,
no Federal income tax expense has been provided.
(C) DIVIDEND REIMBURSEMENT
Dividends received from the underlying mutual funds are recorded on the
ex-dividend date and immediately reinvested on the pay date.
(D) USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of increase and decrease in net assets from operations
during the period. Actual results could differ from those estimates.
NOTE 3 -- CONTRACT CHARGES
MORTALITY AND EXPENSE ASSURANCE CHARGE: General American assumes the mortality
and expense risks and provides certain administrative services related to
operating the Separate Accounts, for which the Separate Accounts are charged an
annual fee of 1.25% based on the values at the end of each valuation period.
Mortality and expense charges for Separate Accounts Twenty-eight and Twenty-nine
totaled $3,650,992 for the period ended December 31, 1996.
SURRENDER CHARGE: Under Separate Account contractual arrangements, General
American is entitled to collect payment for sales charges. Contracts are subject
to a deferred sales charge contingent upon surrender of the contract or a
greater than 10% partial withdrawal of funds on deposit. The sales charge is 6%
the first contract year, decreasing by 1% each subsequent year. The contingent
deferred sales charge will be waived in the event of annuitization after the
third year or on death if the date of issue is prior to the annuitant's 75th
birthday. Sales charges as a result of surrenders are disclosed in Note 6.
ACCOUNT FEE AND ADMINISTRATIVE CHARGES: General American has the responsibility
for the administration of the contract. As reimbursement for account
administrative expenses, on the last day of the contract year, General American
deducts an account fee. For contracts with accumulated values less than $20,000,
the fee is the lesser of $30 or 2% of the accumulated value for contract years
ending prior to December 31, 1999. Thereafter, the account fee may be adjusted
annually. The account fee is waived for contracts with accumulated values of
$20,000 or more. General American charges $25 for each transfer in excess of
twelve (12) during the Contract Year, excluding transfers made under the Dollar
Cost Averaging program and reserves the right to charge a fee to cover the
expenses for special handling. Account fees are disclosed in Note 6. General
American also provides certain administrative services for which it charges an
administrative charge to the Separate Accounts at an annual rate of 0.15% at the
end of each valuation period.
D12
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT TWENTY-EIGHT AND
GENERAL AMERICAN SEPARATE ACCOUNT TWENTY-NINE
NOTE 3 -- CONTRACT CHARGES (CONT'D)
Administrative charges for Separate Account Twenty-eight and Twenty-nine totaled
$438,119 for the period ended December 31, 1996.
PREMIUM TAXES: In states which charge premium taxes, the taxes are withdrawn
from the purchase payment or the accumulated value of the contract. Premium
taxes are disclosed in Note 6.
NOTE 4 -- PURCHASES AND SALES OF GT GLOBAL VARIABLE INVESTMENT FUND SHARES
During the period ended December 31, 1996, cost of purchases and proceeds from
sales of GT Global Variable Investment Fund shares were as follows:
<TABLE>
<CAPTION>
SEPARATE ACCOUNT TWENTY-EIGHT PURCHASES SALES
- -------------------------------------------------------------------------------- ------------ ------------
<S> <C> <C>
Money Market Fund............................................................... $240,727,626 $237,728,348
Variable Strategic Income Fund.................................................. 31,862,287 27,537,728
Variable Global Government Income Fund.......................................... 5,485,242 6,948,703
Variable U.S. Government Income Fund............................................ 3,033,131 3,462,829
<CAPTION>
SEPARATE ACCOUNT TWENTY-NINE
- --------------------------------------------------------------------------------
<S> <C> <C>
Variable New Pacific Fund....................................................... $150,317,489 $148,752,329
Variable Europe Fund............................................................ 65,696,335 61,542,578
Variable America Fund........................................................... 39,268,767 36,702,868
Variable Growth & Income Fund................................................... 21,035,454 19,507,638
Variable Latin America Fund..................................................... 18,735,009 20,305,543
Variable Telecommunications Fund................................................ 26,237,869 18,053,753
Variable International Fund..................................................... 7,496,575 7,215,086
Variable Emerging Markets Fund.................................................. 23,729,690 18,135,763
Variable Natural Resources Fund................................................. 24,335,436 11,856,545
Variable Infrastructure Fund.................................................... 5,313,907 1,519,333
</TABLE>
NOTE 5 -- ACCUMULATION UNIT ACTIVITY
The following is a summary of the accumulation unit activity for the years ended
December 31, 1996 and 1995 for Separate Account Twenty-eight (in thousands):
<TABLE>
<CAPTION>
VARIABLE
STRATEGIC
MONEY MARKET INCOME
DIVISION DIVISION
------------- ------------
1996 1995 1996 1995
----- ------ ----- -----
<S> <C> <C> <C> <C>
Individual units held:
Deposits............................................................ 1,097 856 253 229
Transfers........................................................... (462) (1,022) 15 (214)
Withdrawals......................................................... (303) (248) (198) (164)
Outstanding units, beginning of period.............................. 1,158 1,572 1,737 1,886
----- ------ ----- -----
Outstanding units, end of period.................................... 1,490 1,158 1,807 1,737
----- ------ ----- -----
----- ------ ----- -----
General American Life Insurance Company seed money:
Deposits............................................................ 0 0 0 0
Transfers........................................................... 0 0 0 0
Withdrawals......................................................... 0 0 0 0
Outstanding units, beginning of period.............................. 0 0 0 0
----- ------ ----- -----
Outstanding units, end of period.................................... 0 0 0 0
----- ------ ----- -----
----- ------ ----- -----
<CAPTION>
VARIABLE VARIABLE
GLOBAL U.S.
GOVERNMENT GOVERNMENT
INCOME INCOME
DIVISION DIVISION
------------ ------------
1996 1995 1996 1995
----- ----- ----- -----
<S> <C> <C> <C> <C>
Individual units held:
Deposits............................................................ 67 158 137 176
Transfers........................................................... (141) (11) (142) 113
Withdrawals......................................................... (76) (79) (37) (42)
Outstanding units, beginning of period.............................. 893 825 435 188
----- ----- ----- -----
Outstanding units, end of period.................................... 743 893 393 435
----- ----- ----- -----
----- ----- ----- -----
General American Life Insurance Company seed money:
Deposits............................................................ 0 0 0 0
Transfers........................................................... 0 0 0 0
Withdrawals......................................................... 0 0 0 0
Outstanding units, beginning of period.............................. 0 0 17 17
----- ----- ----- -----
Outstanding units, end of period.................................... 0 0 17 17
----- ----- ----- -----
----- ----- ----- -----
</TABLE>
D13
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT TWENTY-EIGHT AND
GENERAL AMERICAN SEPARATE ACCOUNT TWENTY-NINE
The following is a summary of the accumulation unit activity for the years ended
December 31, 1996 and 1995 for all Divisions. There was no activity in Separate
Account Twenty-nine relating to General American Life Insurance Company seed
money.
<TABLE>
<CAPTION>
VARIABLE NEW VARIABLE VARIABLE
PACIFIC EUROPE AMERICA
DIVISION DIVISION DIVISION
------------- ------------ ------------
1996 1995 1996 1995 1996 1995
----- ------ ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Individual units held:
Deposits........................................ 244 276 129 107 268 510
Transfers....................................... (1) 118 163 (65) (171) 583
Withdrawals..................................... (154) (117) (80) (79) (201) (140)
Outstanding units, beginning of period.......... 1,687 1,410 970 1,007 1,906 953
----- ------ ----- ----- ----- -----
Outstanding units, end of period................ 1,776 1,687 1,182 970 1,802 1,906
----- ------ ----- ----- ----- -----
----- ------ ----- ----- ----- -----
<CAPTION>
VARIABLE VARIABLE
GROWTH & LATIN
INCOME AMERICA
DIVISION DIVISION
------------ ------------
1996 1995 1996 1995
----- ----- ----- -----
<S> <C> <C> <C> <C>
Individual units held:
Deposits........................................ 282 216 150 267
Transfers....................................... 49 63 (129) (168)
Withdrawals..................................... (253) (185) (109) (131)
Outstanding units, beginning of period.......... 2,002 1,908 1,380 1,412
----- ----- ----- -----
Outstanding units, end of period................ 2,080 2,002 1,292 1,380
----- ----- ----- -----
----- ----- ----- -----
</TABLE>
<TABLE>
<CAPTION>
VARIABLE VARIABLE
TELECOMMUNICA- VARIABLE EMERGING
TIONS INTERNATIONAL MARKETS
DIVISION DIVISION DIVISION
------------- ------------ ------------
1996 1995 1996 1995 1996 1995
----- ------ ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Individual units held:
Deposits........................................ 510 487 72 106 291 312
Transfers....................................... (54) 115 18 70 205 (9)
Withdrawals..................................... (298) (195) (20) (34) (71) (68)
Outstanding units, beginning of period.......... 3,019 2,612 314 172 809 574
----- ------ ----- ----- ----- -----
Outstanding units, end of period................ 3,177 3,019 384 314 1,234 809
----- ------ ----- ----- ----- -----
----- ------ ----- ----- ----- -----
<CAPTION>
VARIABLE VARIABLE
NATURAL INFRA-
RESOURCES STRUCTURE
DIVISION DIVISION
------------ ------------
1996 1995 1996 1995
----- ----- ----- -----
<S> <C> <C> <C> <C>
Individual units held:
Deposits........................................ 203 32 124 72
Transfers....................................... 476 61 141 49
Withdrawals..................................... (19) (7) (12) (8)
Outstanding units, beginning of period.......... 86 0 113 0
----- ----- ----- -----
Outstanding units, end of period................ 746 86 366 113
----- ----- ----- -----
----- ----- ----- -----
</TABLE>
NOTE 6 -- SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT
Deposits into the Separate Account are used to purchase shares in GT Global
Variable Investment Funds. Net deposits represent the amounts available for
investment in such shares after deduction of premium taxes, administrative
costs, and surrender charges. Activity for Separate Account Twenty-eight
follows:
<TABLE>
<CAPTION>
VARIABLE STRATEGIC INCOME
MONEY MARKET DIVISION DIVISION
--------------------------------- --------------------------------
1996 1995 1996 1995
--------------- ---------------- --------------- ---------------
<S> <C> <C> <C> <C>
Total gross deposits.............................. $ 14,452,991 $ 10,798,707 $ 3,968,594 $ 2,995,532
Transfers between fund divisions and General
American......................................... (6,048,583) (12,838,342) 499,563 (2,608,659)
Surrenders and withdrawals........................ (3,849,956) (3,059,601) (3,024,036) (2,090,617)
--------------- ---------------- --------------- ---------------
Total of gross deposits, transfers, and
surrenders between fund divisions............ 4,554,452 (5,099,236) 1,444,121 (1,703,744)
--------------- ---------------- --------------- ---------------
Deductions:
Premium taxes................................... (2,014) 0 (546) (16)
Account fees.................................... (36,201) (29,314) (12,164) (6,380)
Surrender charges............................... (101,577) (50,508) (54,253) (46,816)
--------------- ---------------- --------------- ---------------
Total deductions.............................. (139,792) (79,822) (66,963) (53,212)
--------------- ---------------- --------------- ---------------
Net deposits into (deductions from) Separate
Account.......................................... $ 4,414,660 $ (5,179,058) $ 1,377,158 $ (1,756,956)
--------------- ---------------- --------------- ---------------
--------------- ---------------- --------------- ---------------
</TABLE>
<TABLE>
<CAPTION>
VARIABLE GLOBAL GOVERNMENT INCOME VARIABLE U.S. GOVERNMENT INCOME
DIVISION DIVISION
--------------------------------- --------------------------------
1996 1995 1996 1995
--------------- ---------------- --------------- ---------------
<S> <C> <C> <C> <C>
Total gross deposits.............................. $ 880,325 $ 2,001,213 $ 1,777,642 $ 2,189,649
Transfers between fund divisions and General
American......................................... (1,896,264) (126,814) (1,851,071) 1,369,582
Surrenders and withdrawals........................ (985,931) (981,723) (471,235) (517,308)
--------------- ---------------- --------------- ---------------
Total of gross deposits, transfers, and
surrenders between fund divisions............ (2,001,870) 892,676 (544,664) 3,041,923
--------------- ---------------- --------------- ---------------
Deductions:
Premium taxes................................... (40) 0 (40) (2)
Account fees.................................... (2,660) (2,950) (1,210) (2,096)
Surrender charges............................... (12,861) (14,015) (8,064) (8,459)
--------------- ---------------- --------------- ---------------
Total deductions.............................. (15,561) (16,965) (9,314) (10,557)
--------------- ---------------- --------------- ---------------
Net deposits into (deductions from) Separate
Account.......................................... $ (2,017,431) $ 875,711 $ (553,978) $ 3,031,366
--------------- ---------------- --------------- ---------------
</TABLE>
D14
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT TWENTY-EIGHT AND
GENERAL AMERICAN SEPARATE ACCOUNT TWENTY-NINE
<TABLE>
<CAPTION>
VARIABLE NEW PACIFIC VARIABLE EUROPE
DIVISION DIVISION
-------------------------------- --------------------------------
1996 1995 1996 1995
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Total gross deposits.............................. $ 3,858,542 $ 3,625,120 $ 2,421,423 $ 1,607,354
Transfers between fund divisions and
General American................................. (1,319,905) 1,060,224 2,917,523 (1,000,779)
Surrenders and withdrawals........................ (2,334,135) (1,494,877) (1,410,434) (1,162,758)
--------------- --------------- --------------- ---------------
Total of gross deposits, transfers, and
surrenders between fund divisions............ 204,502 3,190,467 3,928,512 (556,183)
--------------- --------------- --------------- ---------------
Deductions:
Premium taxes................................... (75) (488) (708) (22)
Account fees.................................... (27,923) (13,935) (10,097) (5,057)
Surrender charges............................... (53,067) (35,814) (27,325) (30,611)
--------------- --------------- --------------- ---------------
Total deductions.............................. (81,065) (50,237) (38,130) (35,690)
--------------- --------------- --------------- ---------------
Net deposits into (deductions from)
Separate Account................................. $ 123,437 $ 3,140,230 $ 3,890,382 $ (591,873)
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
<CAPTION>
VARIABLE AMERICA
DIVISION
--------------------------------
1996 1995
--------------- ---------------
<S> <C> <C>
Total gross deposits.............................. $ 5,700,168 $ 9,630,823
Transfers between fund divisions and
General American................................. (3,361,891) 10,537,113
Surrenders and withdrawals........................ (4,149,012) (2,670,026)
--------------- ---------------
Total of gross deposits, transfers, and
surrenders between fund divisions............ (1,810,735) 17,497,910
--------------- ---------------
Deductions:
Premium taxes................................... (414) (6)
Account fees.................................... (19,526) (18,425)
Surrender charges............................... (94,727) (61,079)
--------------- ---------------
Total deductions.............................. (114,667) (79,510)
--------------- ---------------
Net deposits into (deductions from)
Separate Account................................. $ (1,925,402) $ 17,418,400
--------------- ---------------
--------------- ---------------
</TABLE>
<TABLE>
<CAPTION>
VARIABLE EMERGING MARKETS VARIABLE NATURAL RESOURCES
DIVISION DIVISION*
-------------------------------- --------------------------------
1996 1995 1996 1995
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Total gross deposits.............................. $ 3,824,754 $ 3,363,325 $ 3,917,604 $ 432,775
Transfers between fund divisions and
General American................................. 2,368,261 (104,693) 9,030,189 828,362
Surrenders and withdrawals........................ (907,826) (726,356) (353,717) (104,551)
--------------- --------------- --------------- ---------------
Total of gross deposits, transfers, and
surrenders between fund divisions.............. 5,285,189 2,532,276 12,594,076 1,156,586
--------------- --------------- --------------- ---------------
Deductions:
Premium taxes................................... 5 (5) 0 0
Account fees.................................... (5,528) (2,243) (7,097) (455)
Surrender charges............................... (13,827) (9,834) (4,221) (168)
--------------- --------------- --------------- ---------------
Total deductions.............................. (19,350) (12,082) (11,318) (623)
--------------- --------------- --------------- ---------------
Net deposits into Separate Account................ $ 5,265,839 $ 2,520,194 $ 12,582,758 $ 1,155,963
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
<CAPTION>
VARIABLE INFRASTRUCTURE
DIVISION*
--------------------------------
1996 1995
--------------- ---------------
<S> <C> <C>
Total gross deposits.............................. $ 1,856,356 $ 935,004
Transfers between fund divisions and
General American................................. 2,122,405 634,407
Surrenders and withdrawals........................ (165,583) (102,860)
--------------- ---------------
Total of gross deposits, transfers, and
surrenders between fund divisions.............. 3,813,178 1,466,551
--------------- ---------------
Deductions:
Premium taxes................................... 0 0
Account fees.................................... (490) (60)
Surrender charges............................... (2,113) (416)
--------------- ---------------
Total deductions.............................. (2,603) (476)
--------------- ---------------
Net deposits into Separate Account................ $ 3,810,575 $ 1,466,075
--------------- ---------------
--------------- ---------------
</TABLE>
- ----------------
* The Variable Natural Resources Division and the Variable Infrastructure
Division commenced operations January 31, 1995.
D15
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT TWENTY-EIGHT AND
GENERAL AMERICAN SEPARATE ACCOUNT TWENTY-NINE
<TABLE>
<CAPTION>
VARIABLE GROWTH & INCOME VARIABLE LATIN AMERICA DIVISION
DIVISION
-------------------------------- --------------------------------
1996 1995 1996 1995
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Total gross deposits.............................. $ 4,439,621 $ 2,997,409 $ 2,386,980 $ 3,946,085
Transfers between fund divisions and General
American......................................... 850,032 850,154 (2,174,243) (2,665,686)
Surrenders and withdrawals........................ (3,875,684) (2,495,073) (1,689,032) (1,896,475)
--------------- --------------- --------------- ---------------
Total of gross deposits, transfers, and
surrenders between fund divisions.............. 1,413,969 1,352,490 (1,476,295) (616,076)
Deductions:
Premium taxes................................... (393) 0 (850) (22)
Account fees.................................... (8,243) (9,734) (5,994) (7,079)
Surrender charges............................... (61,282) (64,769) (32,930) (37,669)
--------------- --------------- --------------- ---------------
Total deductions.............................. (69,918) (74,503) (39,774) (44,770)
--------------- --------------- --------------- ---------------
Net deposits into (deductions from) Separate
Account.......................................... $ 1,344,051 $ 1,277,987 $ (1,516,069) $ (660,846)
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
</TABLE>
<TABLE>
<CAPTION>
VARIABLE TELECOMMUNICATIONS VARIABLE INTERNATIONAL
DIVISION DIVISION
-------------------------------- --------------------------------
1996 1995 1996 1995
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Total gross deposits.............................. $ 9,624,221 $ 7,440,798 $ 813,886 $ 1,136,543
Transfers between fund divisions and General
American......................................... (819,084) 2,141,926 176,650 726,150
Surrenders and withdrawals........................ (5,447,592) (2,885,630) (217,017) (350,536)
--------------- --------------- --------------- ---------------
Total of gross deposits, transfers, and
surrenders between fund divisions.............. 3,357,545 6,697,094 773,519 1,512,157
Deductions:
Premium taxes................................... (1,370) (26) 0 0
Account fees.................................... (38,560) (34,324) (1,925) (1,693)
Surrender charges............................... (95,260) (65,968) (5,020) (8,407)
--------------- --------------- --------------- ---------------
Total deductions.............................. (135,190) (100,318) (6,945) (10,100)
--------------- --------------- --------------- ---------------
Net deposits into (deductions from) Separate
Account.......................................... $ 3,222,355 $ 6,596,776 $ 766,574 $ 1,502,057
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
</TABLE>
D16
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT TWENTY-EIGHT AND
GENERAL AMERICAN SEPARATE ACCOUNT TWENTY-NINE
SCHEDULE OF INVESTMENTS
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SEPARATE ACCOUNT TWENTY-EIGHT: NO. OF SHARES MARKET VALUE
- -------------------------------------------------------------------------------- ------------- ------------
<S> <C> <C>
GT Global Money Market Fund................................................... 16,765,081 $ 16,765,081
GT Global Variable Strategic Income Fund...................................... 2,451,041 32,794,928
GT Global Variable Global Government Income Fund.............................. 907,172 10,378,048
GT Global Variable U.S. Government Income Fund................................ 473,639 5,404,215
<CAPTION>
SEPARATE ACCOUNT TWENTY-NINE:
- --------------------------------------------------------------------------------
<S> <C> <C>
GT Global Variable New Pacific Fund........................................... 1,803,825 32,504,929
GT Global Variable Europe Fund................................................ 1,162,519 24,819,775
GT Global Variable America Fund............................................... 2,110,549 41,598,928
GT Global Variable Growth & Income Fund....................................... 2,202,728 36,367,040
GT Global Variable Latin America Fund......................................... 1,464,573 21,675,681
GT Global Variable Telecommunications Fund.................................... 3,433,799 62,289,120
GT Global Variable International Fund......................................... 386,130 4,598,808
GT Global Variable Emerging Markets Fund...................................... 1,254,395 17,887,677
GT Global Variable Natural Resources Fund..................................... 767,600 16,104,241
GT Global Variable Infrastructure Fund........................................ 358,575 5,905,729
</TABLE>
See accompanying independent auditors' report.
D17
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT TWENTY-EIGHT AND
GENERAL AMERICAN SEPARATE ACCOUNT TWENTY-NINE
CONDENSED FINANCIAL INFORMATION
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ACCUMULATION TOTAL UNITS
ACCUMULATION UNIT VALUE: OUTSTANDING,
UNIT VALUE: END OF END OF PERIOD
SEPARATE ACCOUNT TWENTY-EIGHT: BEGINNING OF PERIOD* PERIOD (IN THOUSANDS)
- ---------------------------------------------------------------------- -------------------- ------------ --------------
<S> <C> <C> <C> <C>
Money Market Division................................................. 1996 12.87 13.30 1,490
1995 12.40 12.87 1,158
1994 12.15 12.40 1,572
1993 12.00 12.15 303
Variable Strategic Income Division.................................... 1996 14.56 17.46 1,807
1995 12.36 14.56 1,737
1994 15.11 12.36 1,886
1993 12.00 15.11 1,187
Variable Global Government Income Division............................ 1996 13.33 13.95 743
1995 11.66 13.33 893
1994 12.95 11.66 825
1993 12.00 12.95 464
Variable U.S. Government Income Division.............................. 1996 13.18 13.29 410
1995 11.65 13.18 452
1994 12.61 11.65 205
1993 12.00 12.61 69
</TABLE>
- --------------
* At inception of Separate Account on February 10, 1993.
See accompanying independent auditors' report.
D18
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT TWENTY-EIGHT AND
GENERAL AMERICAN SEPARATE ACCOUNT TWENTY-NINE
<TABLE>
<CAPTION>
ACCUMULATION TOTAL UNITS
ACCUMULATION UNIT VALUE: OUTSTANDING,
UNIT VALUE: END OF END OF PERIOD
SEPARATE ACCOUNT TWENTY-NINE: BEGINNING OF PERIOD* PERIOD (IN THOUSANDS)
- ---------------------------------------------------------------------- -------------------- ------------ --------------
<S> <C> <C> <C> <C>
Variable New Pacific Division......................................... 1996 13.48 17.41 1,776
1995 13.70 13.48 1,687
1994 15.87 13.70 1,410
1993 12.00 15.87 492
Varible Europe Division............................................... 1996 16.05 20.62 1,182
1995 14.84 16.05 970
1994 15.14 14.84 1,007
1993 12.00 15.14 349
Variable America Division............................................. 1996 19.69 23.02 1,802
1995 15.93 19.69 1,906
1994 13.59 15.93 953
1993 12.00 13.59 117
Variable Growth & Income Division..................................... 1996 15.23 17.47 2,080
1995 13.37 15.23 2,002
1994 13.96 13.37 1,908
1993 12.00 13.96 827
Variable Latin America Division....................................... 1996 14.06 16.98 1,292
1995 18.79 14.06 1,380
1994 17.46 18.79 1,412
1993 12.00 17.46 463
Variable Telecommunications Division.................................. 1996 16.79 19.76 3,177
1995 13.77 16.79 3,019
1994 13.03 13.77 2,612
1993 12.00 13.03 605
Variable International Division....................................... 1996 10.94 11.70 384
1995 11.22 10.94 314
1994 12.00 11.22 172
Variable Emerging Markets Division.................................... 1996 10.88 14.06 1,234
1995 11.93 10.88 809
1994 12.00 11.93 574
Variable Natural Resources Division................................... 1996 14.47 21.57 746
1995 12.00 14.47 86
Variable Infrastructure Division...................................... 1996 13.10 16.13 366
1995 12.00 13.10 113
</TABLE>
- --------------
* At inception of Separate Account on February 10, 1993, except for the Variable
Telecommunications Division, which commenced operations on October 18, 1993;
the Variable International Growth Division, which commenced operations on July
12, 1994; the Variable Emerging Markets Division, which commenced operations
on July 6, 1994; and the Variable Natural Resources Division and Variable
Infrastructure Division which commenced operations on January 31, 1995.
See accompanying independent auditors' report.
D19
<PAGE>
GT GLOBAL
ALLOCATOR
FUNDS'
FINANCIAL
STATEMENTS
<PAGE>
GT GLOBAL VARIABLE INVESTMENT FUNDS
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
ANNUAL REPORT
To the Shareholders and Board of Trustees of the GT Global Variable Investment
Trust comprising the following Funds: GT Global Variable Strategic Income Fund,
GT Global Variable Global Government Income Fund, GT Global Variable U.S.
Government Income Fund, GT Global Variable Latin America Fund, GT Global
Variable Growth & Income Fund, GT Global Variable Telecommunications Fund, GT
Global Variable Emerging Markets Fund, GT Global Variable Infrastructure Fund,
GT Global Variable Natural Resources Fund, and the GT Global Variable Investment
Series comprising the following Funds: GT Global Variable America Fund, GT
Global Variable New Pacific Fund, GT Global Variable Europe Fund, GT Global
Money Market Fund, and GT 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, 1996, the
related statements of operations for the year then ended, the related statements
of changes in net assets and the 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 the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1996 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial positions of
the Funds as of December 31, 1996, the results of their operations for the year
then ended, the related 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 14, 1997
F1
<PAGE>
GT GLOBAL VARIABLE STRATEGIC INCOME FUND
PORTFOLIO OF INVESTMENTS
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL VALUE % OF NET
FIXED INCOME INVESTMENTS CURRENCY AMOUNT (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Government & Government Agency Obligations (72.0%)
Argentina (5.7%)
Republic of Argentina:
Discount Bond, 6.375% due 3/31/23+ .................... USD 950,000 $ 733,281 2.3
BOCON Pre 4, 5.375% due 9/1/02[.] + ................... USD 480,000 516,120 1.6
Par Bond, 5.25% due 3/31/23++ ......................... USD 760,000 484,500 1.5
Floating Rate Bond, 6.625% due 3/31/05+ ............... USD 118,580 103,387 0.3
Australia (2.1%)
Commonwealth of Australia, 9.5% due 8/15/03 ............. AUD 760,000 673,838 2.1
Brazil (3.5%)
Federal Republic of Brazil:
C Bond, 4.5% due 4/15/14 (Effective rate at year end is
7.08125%, including "payment-in-kind" bonds.)[.]
++ ................................................... USD 1,333,759 983,647 3.1
Multi-Year Deposit Financing Agreement (MYDFA) Floating
Rate Note, 6.6875% due 9/15/07 - 144A+ {.} ............. USD 167,000 143,203 0.4
Bulgaria (1.5%)
Bulgaria, Discount Bond Series A, 6.6875% due 7/28/24 -
EURO+ .................................................. USD 858,000 487,451 1.5
Canada (2.4%)
Canadian Government:
8.75% due 12/1/05 ..................................... CAD 586,000 497,663 1.6
8% due 11/1/98 ........................................ CAD 340,000 264,697 0.8
Costa Rica (0.3%)
Banco Central de Costa Rica, Principal Bond Series A,
6.25% due 5/21/10 ...................................... USD 100,000 81,750 0.3
Denmark (2.6%)
Kingdom of Denmark, 7% due 12/15/04 ..................... DKK 4,700,000 832,868 2.6
Ecuador (2.8%)
Ecuador:
Past Due Interest Bond, 3% due 2/27/15 - EURO
Registered (Effective rate at year end is 5.1525%,
including "payment-in-kind" bonds.)[.] + ............. USD 687,304 422,692 1.3
Past Due Interest Bond, 3% due 2/27/15 - EURO Bearer
(Effective rate at year end is 5.1525%, including
"payment-in-kind" bonds.)[.] + ....................... USD 404,980 249,063 0.8
Discount Bond, 6.5% due 2/28/25 - EURO+ ............... USD 330,000 227,700 0.7
France (1.5%)
French O.A.T., 7.25% due 4/25/06 ........................ FRF 2,200,000 469,050 1.5
Germany (12.2%)
Deutschland Republic:
8.25% due 9/20/01 ..................................... DEM 2,250,000 1,673,748 5.3
6% due 1/5/06 ......................................... DEM 2,380,000 1,569,593 4.9
Treuhandanstalt, 7.125% due 1/29/03 ..................... DEM 896,000 638,968 2.0
Italy (3.5%)
Italian Buoni Poliennali del Tesoro (BTPS):
10.5% due 11/1/00 ..................................... ITL 650,000,000 483,317 1.5
9.5% due 2/1/99 ....................................... ITL 460,000,000 322,000 1.0
Republic of Italy, 0.56259% due 7/26/99+ ................ JPY 35,000,000 303,922 1.0
</TABLE>
The accompanying notes are an integral part of the financial statements.
F2
<PAGE>
GT GLOBAL VARIABLE STRATEGIC INCOME FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL VALUE % OF NET
FIXED INCOME INVESTMENTS CURRENCY AMOUNT (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Government & Government Agency Obligations (Continued)
Kazahkstan (0.3%)
Republic of Kazakhstan, 9.25% due 12/20/99 - 144A{.} .... USD 100,000 $ 100,813 0.3
Mexico (4.6%)
United Mexican States:
Discount Bond Series C, 6.375% due 12/31/19+ +/+ ...... USD 525,000 452,813 1.4
Discount Bond Series B, 6.375% due 12/31/19+ +/+ ...... USD 500,000 431,250 1.4
Global Bond, 11.5% due 5/15/26 ........................ USD 200,000 211,500 0.7
11.375% due 9/15/16 - 144A{.} ......................... USD 170,000 177,650 0.6
Banco Nacional de Comercio Exterior, S.N.C. (BNCE) Trust
Division, 11.25% due 5/30/06 - 144A{.} ................. USD 154,000 164,010 0.5
New Zealand (1.1%)
New Zealand Government, 8% due 2/15/01 .................. NZD 460,000 336,415 1.1
Nigeria (0.5%)
Central Bank of Nigeria, Par Bond, 6.25% due
11/15/20+/+ ............................................ USD 250,000 172,500 0.5
Panama (1.8%)
Panama, Interest Reduction Bond, 3.5% due 7/17/14 -
144A++ {.} ............................................. USD 824,000 570,620 1.8
Philippines (1.5%)
Republic of Philippines, 8.75% due 10/7/16 - 144A{.} .... USD 470,000 489,094 1.5
Poland (1.3%)
Poland, Past Due Interest Bond, 4% due 10/27/14 -
EURO++ ................................................. USD 500,000 422,500 1.3
Russia (0.7%)
Russian Ministry of Finance:
3% due 5/14/11 - GDR - 144A{.} ........................ USD 390,000 142,350 0.4
3% due 5/14/06 - GDR - 144A{.} ........................ USD 229,000 109,920 0.3
Spain (2.1%)
Kingdom of Spain, 10.1% due 2/28/01{./} ................. ESP 75,000,000 665,209 2.1
Supranational (1.4%)
International Bank of Reconstruction & Development, 4.75%
due 12/20/04 ........................................... JPY 43,000,000 432,043 1.4
Sweden (1.3%)
Swedish Government, 13% due 6/15/01 ..................... SEK 2,100,000 397,348 1.3
United Kingdom (3.5%)
United Kingdom Treasury:
7.5% due 12/7/06 ...................................... GBP 350,000 598,754 1.9
7% due 11/6/01{./} .................................... GBP 300,000 508,241 1.6
United States (9.8%)
United States Treasury:
6.875% due 3/31/00{./} ................................ USD 2,500,000 2,557,418 8.1
6.875% due 8/15/25 .................................... USD 525,000 535,018 1.7
Uruguay (0.7%)
Banco Central del Uruguay, Par Bond Series B, 6.75% due
2/19/21+/+ ............................................. USD 250,000 207,500 0.7
</TABLE>
The accompanying notes are an integral part of the financial statements.
F3
<PAGE>
GT GLOBAL VARIABLE STRATEGIC INCOME FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL VALUE % OF NET
FIXED INCOME INVESTMENTS CURRENCY AMOUNT (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Government & Government Agency Obligations (Continued)
Venezuela (3.3%)
Republic of Venezuela:
Debt Conversion Bond, 6.5% due 12/18/07+ .............. USD 500,000 $ 441,250 1.4
Par Bond Series A, 6.75% due 3/31/20+/+ ............... USD 500,000 382,500 1.2
Front Loaded Interest Reduction Bond Series B, 6.4375%
due 3/31/07+ ......................................... USD 250,000 223,125 0.7
------------
Total Government & Government Agency Obligations (cost
$21,469,723) ............................................... 22,892,299
------------
Corporate Bonds (9.1%)
Argentina (0.5%)
Industrias Metallurgicas Pescarmona S.A. (IMPSA), 11.75%
due 3/27/98 - 144A{.} .................................. USD 100,000 103,000 0.3
Central Termica Guemes S.A., 12% due 11/26/01 -
144A{.} ................................................ USD 72,000 73,260 0.2
Brazil (0.2%)
Tevecap S.A., 12.625% due 11/26/04 - 144A{.} ............ USD 61,000 62,373 0.2
China (0.4%)
AES China Generating Co., Ltd., 10.125% due 12/15/06 .... USD 110,000 113,850 0.4
Indonesia (1.8%)
PT Polysindo International Finance, 13% due 6/15/01:
EURO .................................................. USD 113,000 126,843 0.4
DTC ................................................... USD 20,000 22,450 0.1
PT Tjiwi Kimia, 13.25% due 8/1/01 ....................... USD 130,000 147,550 0.5
Tri Polyta Finance BV, 11.375% due 12/1/03 .............. USD 115,000 120,463 0.4
FSW International Finance Co., 12.5% due 11/1/06 -
144A{.} ................................................ USD 96,000 102,120 0.3
Rapp International Finance, 13.25% due 12/15/05 ......... USD 30,000 33,225 0.1
Jamaica (0.3%)
Mechala Group Jamaica Ltd., 12.75% due 12/30/99 -
144A{.} ................................................ USD 95,000 95,119 0.3
Luxembourg (0.2%)
Millicom International Cellular, effective yield 13.5%,
due 6/1/06 - 144A{.} ................................... USD 100,000 62,500 0.2
Mexico (0.8%)
Grupo Industrial Durango, S.A., 12.625% due 8/1/03 ...... USD 141,000 153,514 0.5
Cemex, S.A. de C.V. "B", 12.75% due 7/15/06 - 144A{.} ... USD 85,000 95,413 0.3
Philippines (0.1%)
Filinvest Capital, Convertible Bond, 3.75% due 2/1/02 -
144A{.} ................................................ USD 34,000 32,810 0.1
Poland (0.2%)
Poland Communications, Inc., 9.875% due 11/01/03 -
144A{.} ................................................ USD 60,000 60,000 0.2
Qatar (3.4%)
Ras Laffan Liquefied Natural Gas, 8.294% due 3/15/14 .... USD 1,047,000 1,070,024 3.4
Turkey (0.3%)
Sultan Ltd., 8.33984% due 6/11/99+ ...................... USD 100,000 96,250 0.3
United States (0.9%)
Chase Manhattan Corp., 6.25% due 1/15/06 ................ USD 152,000 144,102 0.5
</TABLE>
The accompanying notes are an integral part of the financial statements.
F4
<PAGE>
GT GLOBAL VARIABLE STRATEGIC INCOME FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL VALUE % OF NET
FIXED INCOME INVESTMENTS CURRENCY AMOUNT (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Corporate Bonds (Continued)
General Motors Acceptance Corp., 6.625% due 10/15/05 .... USD 143,000 $ 139,173 0.4
------------
Total Corporate Bonds (cost $2,772,053) ..................... 2,854,039
------------
Sovereign Debt (6.9%)
Morocco (2.4%)
Kingdom of Morocco, Tranche A Loan Agreement, 6.375% due
1/1/09+ ................................................ USD 910,000 750,750 2.4
Russia (4.5%)
Bank for Foreign Economic Affairs (Vnesheconombank) Loan
Agreement - Assignment ** {./} -/- ..................... USD 1,621,000 1,290,721 4.1
Bank for Foreign Economic Affairs (Vnesheconombank) Loan
Agreement - Assignment ** -/- .......................... DEM 234,000 128,563 0.4
------------
Total Sovereign Debt (cost $1,599,773) ...................... 2,170,034
------------ -----
TOTAL FIXED INCOME INVESTMENTS (cost $25,841,549) ........... 27,916,372 88.0
------------ -----
<CAPTION>
UNDERLYING VALUE % OF NET
OPTIONS CURRENCY AMOUNT (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Brazil C Bond, due 4/15/14, Call Options, strike price
$74.1875, expire 3/3/97-/- ............................... USD 3,588,019 55,708 0.2
GOVERNMENT & GOVERNMENT AGENCY OBLIGATIONS
Venezuela Debt Conversion Bond, due 12/18/07, Call Options,
strike price $87.188, expire 3/5/97-/- ................... USD 750,000 14,817 --
GOVERNMENT & GOVERNMENT AGENCY OBLIGATIONS
------------ -----
TOTAL OPTIONS (cost $100,826) ............................... 70,525 0.2
------------ -----
<CAPTION>
PRINCIPAL VALUE % OF NET
SHORT-TERM INVESTMENTS CURRENCY AMOUNT (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Treasury Bills (1.5%)
Mexico (1.5%)
Mexican Cetes: .......................................... MXN -- -- 1.5
Current yield 22.53% due 1/16/97 ...................... -- 1,944,010 244,811 --
Current yield 23.64% due 1/23/97 ...................... -- 1,425,840 178,662 --
Current yield 24.21% due 1/30/97 ...................... -- 387,750 48,345 --
Current yield 24.96% due 2/20/97 ...................... -- 101,500 12,470 --
Current yield 24.56% due 2/6/97 ....................... -- 42,290 5,247 --
------------
Total Treasury Bills (cost $480,509) ........................ 489,535
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F5
<PAGE>
GT GLOBAL VARIABLE STRATEGIC INCOME FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL VALUE % OF NET
SHORT-TERM INVESTMENTS CURRENCY AMOUNT (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Structured Notes (1.4%)
Russia (1.4%)
Russian Federation GKO (Treasury Bills) linked notes with
cancellable currency forwards attached: ................ USD -- -- 1.4
Due 7/2/97 ............................................ -- 258,048 $ 218,172 --
Due 7/30/97 ........................................... -- 253,691 209,559 --
(Notes issued by Credit Suisse First Boston (Cayman)
Ltd. These notes are linked to the local price in
Russian rubles of 1,427 and 1,402 Titles of Russian
treasury bills maturing 7/2/97 and 7/30/97,
respectively. These 7/2/97 and 7/30/97 notes include
options to sell the Russian ruble proceeds at maturity
for US dollars at the contracted forward rates of
6,333.41 and 6,399.46, respectively.)
------------
Total Structured Notes (cost $425,457) ...................... 427,731
------------
Commercial Paper - Indexed (0.6%)
Philippines (0.6%)
National Westminster Bank PLC, Currency-Linked CD,
12.3798% due 2/28/97 (cost $194,500) ................... USD 194,500 190,279 0.6
------------ -----
TOTAL SHORT-TERM INVESTMENTS (cost $1,100,466) .............. 1,107,545 3.5
------------ -----
<CAPTION>
VALUE % OF NET
REPURCHASE AGREEMENT (NOTE 1) ASSETS
- ------------------------------------------------------------- ------------ -------------
<S> <C> <C> <C> <C>
Dated December 31, 1996 with State Street Bank & Trust Co.,
due January 2, 1997, for an effective yield of 6.25%
collateralized by $2,950,000 U.S. Treasury Notes, 6.125%
due 3/31/98 (market value of collateral is $3,012,381,
including accrued interest). (cost $2,951,512) ........... 2,951,512 9.3
------------ -----
TOTAL INVESTMENTS (cost $29,994,353) * ..................... 32,045,954 101.0
Other Assets and Liabilities ................................ (328,033) (1.0)
------------ -----
NET ASSETS .................................................. $ 31,717,921 100.0
------------ -----
------------ -----
</TABLE>
- --------------
+ The coupon rate shown on floating rate note represents the rate at
period end.
-/- Non-income producing security.
** Underlying loan agreement currently in default.
{./} All or part of the Fund's holdings in this security is segregated
as collateral for when-issued securities or forward currency
contracts held by the Fund. See Note 1 to the Financial Statements.
{.} 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.
++ The coupon rate shown on step-up coupon bond represents the rate at
period end.
[.] Bond pays stated or additional interest with "payment-in-kind"
(PIK) bonds.
+/+ 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 $30,113,639 and
appreciation (depreciation) is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $ 2,061,810
Unrealized depreciation: (129,495)
-------------
Net unrealized appreciation: $ 1,932,315
-------------
-------------
</TABLE>
Abbreviation:
GDR--Global Depository Receipt
The accompanying notes are an integral part of the financial statements.
F6
<PAGE>
GT GLOBAL VARIABLE STRATEGIC INCOME FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
DECEMBER 31, 1996
<TABLE>
<CAPTION>
UNREALIZED
MARKET VALUE CONTRACT DELIVERY APPRECIATION
CONTRACTS TO BUY: (U.S. DOLLARS) PRICE DATE (DEPRECIATION)
- ---------------------------------------- -------------- ----------- -------- --------------
<S> <C> <C> <C> <C>
British Pounds.......................... 871,344 0.61514 02/05/97 $ 42,259
Canadian Dollars........................ 304,246 1.34183 02/28/97 (5,034)
Deutsche Marks.......................... 538,419 1.53950 02/05/97 1,826
Spanish Pesetas......................... 340,043 130.53000 03/19/97 1,424
Swedish Kronor.......................... 279,000 6.81090 01/21/97 36
-------------- --------------
Total Contracts to Buy (Payable amount
$2,292,541).......................... 2,333,052 40,511
-------------- --------------
THE VALUE OF CONTRACTS TO BUY AS
PERCENTAGE OF NET ASSETS IS 7.36%.
<CAPTION>
CONTRACTS TO SELL:
- ----------------------------------------
<S> <C> <C> <C> <C>
Australian Dollars...................... 381,141 1.26264 02/12/97 (986)
British Pounds.......................... 555,268 0.60853 02/05/97 (21,195)
Canadian Dollars........................ 799,105 1.33598 02/28/97 16,779
Deutsche Marks.......................... 1,042,835 1.54337 02/05/97 (6,143)
Deutsche Marks.......................... 397,781 1.48850 02/13/97 12,028
Deutsche Marks.......................... 1,143,046 1.54773 03/11/97 (12,358)
Italian Liras........................... 824,705 1546.70000 01/21/97 (16,532)
Japanese Yen............................ 364,090 111.93000 02/28/97 9,358
Japanese Yen............................ 391,962 111.70000 02/28/97 10,903
New Zealand Dollars..................... 169,244 1.43771 03/10/97 (2,312)
New Zealand Dollars..................... 172,770 1.42005 03/10/97 (241)
Swedish Kronor.......................... 543,317 6.61090 01/21/97 16,365
-------------- --------------
Total Contracts to Sell (Receivable
amount $6,790,930)................... 6,785,264 5,666
-------------- --------------
THE VALUE OF CONTRACTS TO SELL AS
PERCENTAGE OF NET ASSETS IS 21.39%.
Total Open Forward Foreign Currency
Contracts, Net....................... $ 46,177
--------------
--------------
</TABLE>
- ----------------
See Note 1 to the financial statements.
The accompanying notes are an integral part of the financial statements.
F7
<PAGE>
GT GLOBAL VARIABLE GLOBAL GOVERNMENT INCOME FUND
PORTFOLIO OF INVESTMENTS
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL VALUE % OF NET
FIXED INCOME INVESTMENTS CURRENCY AMOUNT (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Government & Government Agency Obligations (82.3%)
Australia (4.6%)
Commonwealth of Australia, 9.5% due 8/15/03 ............. AUD 540,000 $ 478,780 4.6
Canada (8.0%)
Canadian Government:
7% due 12/01/06 ....................................... CAD 600,000 456,924 4.4
8.75% due 12/1/05 ..................................... CAD 445,000 377,918 3.6
Colombia (1.2%)
Republic of Colombia, 7.25% due 2/23/04 ................. USD 125,000 120,873 1.2
Denmark (1.9%)
Kingdom of Denmark, 7% due 12/15/04 ..................... DKK 1,100,000 194,927 1.9
Germany (19.7%)
Deutschland Republic, 6% due 1/5/06 ..................... DEM 3,100,000 2,043,964 19.7
Italy (12.1%)
Italian Buoni Poliennali del Tesoro (BTPS):
8.25% due 7/1/01 ...................................... ITL 600,000,000 422,178 4.1
8.75% due 7/1/06 ...................................... ITL 440,000,000 317,366 3.1
10.5% due 11/1/00{z} .................................. ITL 410,000,000 304,861 2.9
9.5% due 2/1/01 ....................................... ITL 290,000,000 210,504 2.0
Mexico (0.4%)
United Mexican States:
7.5625% due 8/6/01 - 144A+ {.} ........................ USD 25,000 25,059 0.2
7.5625% due 8/6/01 - Reg S+ {c} ....................... USD 25,000 25,059 0.2
Netherlands (3.1%)
Netherlands Government, 7.5% due 1/15/23 ................ NLG 500,000 326,970 3.1
Poland (1.2%)
Republic of Poland, Past Due Interest, 4.0% due 10/27/14
- Registered++ ......................................... USD 145,000 122,525 1.2
South Africa (2.8%)
Republic of South Africa, 9.625% due 12/15/99 ........... USD 270,000 288,225 2.8
Spain (4.3%)
Kingdom of Spain, 10.1% due 2/28/01 ..................... ESP 50,000,000 443,473 4.3
Sweden (2.5%)
Swedish Government, 13% due 6/15/01 ..................... SEK 1,400,000 264,899 2.5
United Kingdom (6.8%)
United Kingdom Treasury:
7.5% due 12/7/06 ...................................... GBP 285,000 487,556 4.7
7% due 11/6/01 ........................................ GBP 130,000 220,237 2.1
</TABLE>
The accompanying notes are an integral part of the financial statements.
F8
<PAGE>
GT GLOBAL VARIABLE GLOBAL GOVERNMENT INCOME FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL VALUE % OF NET
FIXED INCOME INVESTMENTS CURRENCY AMOUNT (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Government & Government Agency Obligations (Continued)
United States (13.7%)
United States Treasury:
6.25% due 10/31/01 .................................... USD 650,000 $ 650,686 6.3
7.875% due 11/15/04 ................................... USD 500,000 545,859 5.2
6.875% due 8/15/25 .................................... USD 220,000 224,198 2.2
------------
Total Government & Government Agency Obligations (cost
$8,361,550) ................................................ 8,553,041
------------ -----
TOTAL FIXED INCOME INVESTMENTS (cost $8,361,550) ............ 8,553,041 82.3
------------ -----
<CAPTION>
PRINCIPAL VALUE % OF NET
SHORT-TERM INVESTMENTS CURRENCY AMOUNT (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Treasury Bills (11.1%)
Mexico (4.0%)
Mexican Cetes: .......................................... MXN -- -- 4.0
Current yield 24.56% due 2/6/97 ....................... -- 118,000 146,398 --
Current yield 24.56% due 2/27/97 ...................... -- 90,452 110,150 --
Current yield 24.96% due 2/20/97 ...................... -- 80,000 98,284 --
Current yield 24.21% due 1/30/97 ...................... -- 49,000 61,094 --
Philippines (3.8%)
Philippine Treasury Bill, 17.21% due 2/19/97 ............ PHP 10,600,000 397,587 3.8
New Zealand (3.3%)
New Zealand Government: ................................. NZD -- -- 3.3
Current yield 8.44% due 1/17/97 ....................... -- 380,000 267,524 --
Current yield 8.51% due 1/15/97 ....................... -- 100,000 70,431 --
------------
Total Treasury Bills (cost $1,140,015) ...................... 1,151,468
------------
Commercial Paper - Discounted (0.9%)
Indonesia (0.9%)
PT Bank Dagang Negara, 16.02% due 9/12/97 (cost
$93,051) ............................................... IDR 250,000,000 96,331 0.9
------------ -----
TOTAL SHORT-TERM INVESTMENTS (cost $1,233,066) .............. 1,247,799 12.0
------------ -----
</TABLE>
The accompanying notes are an integral part of the financial statements.
F9
<PAGE>
GT GLOBAL VARIABLE GLOBAL GOVERNMENT INCOME FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
REPURCHASE AGREEMENT (NOTE 1) ASSETS
- ------------------------------------------------------------- ------------ -------------
<S> <C> <C> <C> <C>
Dated December 31, 1996, with State Street Bank & Trust
Co., due January 2, 1997, for an effective yield of 6.25%,
collateralized by $55,000 U.S. Treasury Bonds, 6.125% due
3/31/98 (market value of collateral is $56,162, including
accrued interest). (cost $52,009) ........................ $ 52,009 0.5
------------ -----
TOTAL INVESTMENTS (cost $9,646,625) * ...................... 9,852,849 94.8
Other Assets and Liabilities ................................ 544,520 5.2
------------ -----
NET ASSETS .................................................. $ 10,397,369 100.0
------------ -----
------------ -----
</TABLE>
- --------------
{z} Security is segregated as collateral for written futures. See Note
1 of Notes to Financial Statements.
{c} Security issued under Regulation S. Rule 144A and additional
restrictions may apply in the resale of such securities.
{.} 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.
+ 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.
* For Federal income tax purposes, cost is $9,669,379 and
appreciation (depreciation) is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $ 224,007
Unrealized depreciation: (40,537)
-------------
Net unrealized appreciation: $ 183,470
-------------
-------------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
DECEMBER 31, 1996
<TABLE>
<CAPTION>
UNREALIZED
MARKET VALUE CONTRACT DELIVERY APPRECIATION
CONTRACTS TO BUY: (U.S. DOLLARS) PRICE DATE (DEPRECIATION)
- ---------------------------------------- -------------- ----------- -------- --------------
<S> <C> <C> <C> <C>
Australian Dollars...................... 27,792 1.22474 02/12/97 $ (786)
British Pounds.......................... 205,022 0.61177 02/05/97 8,870
British Pounds.......................... 273,363 0.60942 02/05/97 10,819
Canadian Dollars........................ 439,874 1.34850 02/28/97 (5,065)
Danish Kroner........................... 196,281 5.78160 01/17/97 (3,570)
Danish Kroner........................... 101,924 5.81700 01/17/97 (1,222)
Danish Kroner........................... 5,096 5.95770 01/17/97 60
Italian Liras........................... 109,389 1545.30003 01/21/97 2,096
Italian Liras........................... 208,591 1531.30998 01/21/97 2,127
New Zealand Dollars..................... 497,708 1.41990 01/31/97 1,194
New Zealand Dollars..................... 163,603 1.42046 03/10/97 275
Swedish Kronor.......................... 95,448 6.62000 01/21/97 (2,739)
Swedish Kronor.......................... 91,042 6.62350 01/21/97 (2,564)
Swiss Francs............................ 97,160 1.26257 01/03/97 (5,805)
Swiss Francs............................ 284,006 1.35070 01/03/97 2,670
Swiss Francs............................ 45,530 1.26015 02/07/97 (2,619)
-------------- --------------
Total Contracts to Buy (Payable amount
$2,838,088).......................... 2,841,829 3,741
-------------- --------------
THE VALUE OF CONTRACTS TO BUY AS
PERCENTAGE OF NET ASSETS IS 27.33%.
</TABLE>
The accompanying notes are an integral part of the financial statements.
F10
<PAGE>
GT GLOBAL VARIABLE GLOBAL GOVERNMENT INCOME FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING (CONTINUED)
DECEMBER 31, 1996
<TABLE>
<CAPTION>
UNREALIZED
MARKET VALUE CONTRACT DELIVERY APPRECIATION
CONTRACTS TO SELL: (U.S. DOLLARS) PRICE DATE (DEPRECIATION)
- ---------------------------------------- -------------- ----------- -------- --------------
<S> <C> <C> <C> <C>
Australian Dollars...................... 317,618 1.28041 02/12/97 $ (5,218)
British Pounds.......................... 58,602 0.59666 02/05/97 (1,115)
British Pounds.......................... 57,235 0.59693 02/05/97 (1,114)
Canadian Dollars........................ 106,303 1.35975 02/28/97 334
Canadian Dollars........................ 98,239 1.35880 02/28/97 377
Canadian Dollars........................ 109,969 1.35015 02/28/97 1,130
Canadian Dollars........................ 645,149 1.33598 02/28/97 13,546
Danish Kroner........................... 122,309 5.87270 01/17/97 292
Danish Kroner........................... 378,045 5.81074 01/17/97 4,946
Deutsche Marks.......................... 261,268 1.54773 03/11/97 (2,825)
Deutsche Marks.......................... 130,634 1.54580 03/11/97 (1,251)
Italian Liras........................... 488,753 1546.70002 01/21/97 (9,798)
Italian Liras........................... 208,591 1528.00004 01/21/97 (1,680)
Italian Liras........................... 82,470 1524.92006 01/21/97 (498)
New Zealand Dollars..................... 497,708 1.42847 01/31/97 (4,173)
New Zealand Dollars..................... 502,092 1.43031 03/10/97 (4,297)
Swedish Kronor.......................... 146,842 6.59927 01/21/97 4,690
Swedish Kronor.......................... 308,369 6.61090 01/21/97 9,288
Swiss Francs............................ 97,160 1.24171 01/03/97 7,534
Swiss Francs............................ 142,003 1.24608 01/03/97 10,475
Swiss Francs............................ 142,003 1.24205 01/03/97 10,970
Swiss Francs............................ 105,055 1.34529 02/07/97 (988)
Swiss Francs............................ 105,055 1.34162 02/07/97 (704)
Swiss Francs............................ 105,055 1.34015 02/07/97 (589)
Swiss Francs............................ 93,799 1.33072 02/07/97 135
Swiss Francs............................ 102,978 1,32687 02/07/97 447
Swiss Francs............................ 444,609 1.26520 02/07/97 23,696
Swiss Francs............................ 294,316 1.33865 04/03/97 (2,978)
-------------- --------------
Total Contracts to Sell (Receivable
amount $6,202,861)................... 6,152,229 50,632
-------------- --------------
THE VALUE OF CONTRACTS TO SELL AS
PERCENTAGE OF NET ASSETS IS 59.17%.
Total Open Forward Foreign Currency
Contracts, Net....................... $ 54,373
--------------
--------------
</TABLE>
- ----------------
See Note 1 to the financial statements.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WRITTEN FUTURES CONTRACTS OUTSTANDING
DECEMBER 31, 1996
<TABLE>
<CAPTION>
EXPIRATION NO. OF MARKET
DESCRIPTION DATE CONTRACTS CURRENCY VALUE
- ---------------------------------------- ---------- --------- -------- -----------
<S> <C> <C> <C> <C>
Italian 10-Year Bond Future (face
$168,714).............................. 03/20/97 1 ITL $ 170,164
</TABLE>
- ----------------
See Note 1 to the financial statements.
The accompanying notes are an integral part of the financial statements.
F11
<PAGE>
GT GLOBAL VARIABLE U.S. GOVERNMENT INCOME FUND
PORTFOLIO OF INVESTMENTS
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL VALUE % OF NET
FIXED INCOME INVESTMENTS CURRENCY AMOUNT (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Government & Government Agency Obligations (87.7%)
Canada (2.8%)
Canadian Government, 8.75% due 12/1/05 .................. CAD 180,000 $ 152,866 2.8
Supranational (10.0%)
International Bank of Reconstruction & Development, 5.25%
due 9/16/03 ............................................ USD 350,000 335,189 6.1
Asian Development Bank, 8% due 4/30/01 .................. USD 200,000 211,813 3.9
United States (74.9%)
United States Treasury:
5.5% due 12/31/00{z} .................................. USD 1,400,000 1,368,117 25.0
7.625% due 2/15/25{z} ................................. USD 550,000 610,747 11.1
5.25% due 1/31/01 ..................................... USD 550,000 533,070 9.7
Tennessee Valley Authority Series A, 6.375% due
6/15/05 ................................................ USD 600,000 590,263 10.8
Sallie Mae, 7.5% due 3/8/00 ............................. USD 350,000 363,356 6.6
Federal Home Loan Mortgage Corp., 7.125% due 7/21/99 .... USD 350,000 358,586 6.5
Federal National Mortgage Association:
7.85% due 9/10/98 ..................................... USD 100,000 103,047 1.9
6.8% due 1/10/03 ...................................... USD 90,000 91,522 1.7
Financial Assistance Corp., 9.375% due 7/21/03 .......... USD 75,000 86,471 1.6
------------
Total Government & Government Agency Obligations (cost
$4,798,301) ................................................ 4,805,047
------------
Corporate Bonds (8.7%)
United States (8.7%)
General Motors Acceptance Corp., 6.625% due 10/15/05 .... USD 250,000 243,309 4.4
Chase Manhattan Corp., 6.25% due 1/15/06 ................ USD 250,000 237,010 4.3
------------
Total Corporate Bonds (cost $491,362) ....................... 480,319
------------ -----
TOTAL FIXED INCOME INVESTMENTS (cost $5,289,663) ............ 5,285,366 96.4
------------ -----
<CAPTION>
VALUE % OF NET
REPURCHASE AGREEMENT (NOTE 1) ASSETS
- ------------------------------------------------------------- ------------ -------------
<S> <C> <C> <C> <C>
Dated December 31, 1996, with State Street Bank & Trust
Company, due January 2, 1997, for an effective yield of
6.25%, collateralized by $30,000 U.S. Treasury Note,
6.125% due 3/31/98 (market value of collateral is $30,634,
including accrued interest). (cost $27,005) .............. 27,005 0.5
------------ -----
TOTAL INVESTMENTS (cost $5,316,668) * ...................... 5,312,371 96.9
Other Assets and Liabilities ................................ 170,555 3.1
------------ -----
NET ASSETS .................................................. $ 5,482,926 100.0
------------ -----
------------ -----
</TABLE>
- --------------
{z} Security is completely or partially segregated as collateral for
written futures. See Note 1 to the Financial Statements.
* For Federal income tax purposes, cost is $5,328,811 and
appreciation (depreciation) is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $ 65,059
Unrealized depreciation: (81,499)
-------------
Net unrealized depreciation: $ (16,440)
-------------
-------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F12
<PAGE>
GT GLOBAL VARIABLE U.S. GOVERNMENT INCOME FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
DECEMBER 31, 1996
<TABLE>
<CAPTION>
MARKET VALUE CONTRACT DELIVERY UNREALIZED
CONTRACTS TO SELL: (U.S. DOLLARS) PRICE DATE APPRECIATION
- ---------------------------------------- -------------- ----------- -------- --------------
<S> <C> <C> <C> <C>
Canadian Dollars........................ 129,030 1.33700 02/28/97 $ 2,608
--------------
THE VALUE OF CONTRACTS TO SELL AS
PERCENTAGE OF NET ASSETS IS 2.35%.
Total Open Forward Foreign Currency
Contracts, Net (Receivable amount
$131,638)............................ $ 2,608
--------------
--------------
</TABLE>
- ----------------
See Note 1 to the financial statements.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WRITTEN FUTURES CONTRACTS OUTSTANDING
DECEMBER 31, 1996
<TABLE>
<CAPTION>
EXPIRATION NO. OF MARKET
DESCRIPTION DATE CONTRACTS CURRENCY VALUE
- ---------------------------------------- ---------- --------- -------- -----------
<S> <C> <C> <C> <C>
U.S. 10-Year Treasury Note Futures (face
$875,500).............................. 03/03/97 8 USD $ 873,000
</TABLE>
- ----------------
See Note 1 to the financial statements.
The accompanying notes are an integral part of the financial statements.
F13
<PAGE>
GT GLOBAL VARIABLE LATIN AMERICA FUND
PORTFOLIO OF INVESTMENTS
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Materials/Basic Industry (25.2%)
Cemex, S.A. de C.V. "CPO" ................................. MEX 215,000 $ 770,688 3.4
CEMENT
Kimberly-Clark de Mexico, S.A. de C.V. "A" ................ MEX 38,000 751,112 3.3
PAPER/PACKAGING
La Cementos Nacional, C.A. 144A - GDR{.} {\/} ............. ECDR 3,040 687,040 3.0
CEMENT
Grupo Mexico S.A. "B"-/- .................................. MEX 218,000 678,912 3.0
METALS - NON-FERROUS
Siderurgica Venezolana Sivensa (Sivensa) - ADR{\/} ........ VENZ 136,200 490,320 2.1
METALS - STEEL
Cia de Minas Buenaventura: ................................ PERU -- -- 2.1
GOLD
"A" ..................................................... -- 53,464 389,500 --
"B" ..................................................... -- 10,200 84,283 --
Apasco S.A. ............................................... MEX 68,000 466,760 2.0
CEMENT
Industrias Penoles S.A. "CP" .............................. MEX 107,000 379,471 1.7
METALS - NON-FERROUS
Caemi Mineracao e Metalurgia S.A. Preferred-/- {z} ........ BRZL 6,790,000 333,193 1.5
METALS - STEEL
Angel Estrada y Cia S.A.-/- ............................... ARG 93,000 255,801 1.1
PAPER/PACKAGING
Companhia de Acos Especiais Itabira - Acesita-/- .......... BRZL 81,000,000 166,850 0.7
METALS - STEEL
Venezolana de Cementos, S.A.C.A. "A" ...................... VENZ 54,310 148,400 0.6
CEMENT
Companhia de Acos Especiais Itabira - Acesita Preferred-/-
{z} ...................................................... BRZL 34,300,000 80,888 0.4
METALS - STEEL
Siderurgica Venezolana Sivensa, Saica S.A.C.A. "B" - 144A
ADR{.} ................................................... VENZ 19,545 63,676 0.3
METALS - STEEL
------------
5,746,894
------------
Energy (22.9%)
Centrais Electricas Brasileiras S.A. (Electrobras)-/- ..... BRZL 2,660,000 952,469 4.2
ELECTRICAL & GAS UTILITIES
Enron Global Power & Pipelines L.L.C. ..................... US 26,800 723,600 3.2
ELECTRICAL & GAS UTILITIES
C.A. La Electricidad de Caracas ........................... VENZ 702,678 713,371 3.1
ELECTRICAL & GAS UTILITIES
Companhia Energetica de Sao Paulo (CESP) Preferred-/- ..... BRZL 16,200,000 631,689 2.8
ELECTRICAL & GAS UTILITIES
Companhia Energetica de Minas Gerais (Cemig) - ADR{\/} .... BRZL 17,000 561,000 2.4
ELECTRICAL & GAS UTILITIES
YPF S.A. - ADR{\/} ........................................ ARG 18,800 474,700 2.1
OIL
Transportadora de Gas del Sur S.A. (TGS) - ADR{\/} ........ ARG 38,200 467,950 2.0
GAS
Light - Participacoes S.A.-/- ............................. BRZL 1,910,000 463,298 2.0
ELECTRICAL & GAS UTILITIES
</TABLE>
The accompanying notes are an integral part of the financial statements.
F14
<PAGE>
GT GLOBAL VARIABLE LATIN AMERICA FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Energy (Continued)
Edelnor S.A. "A" .......................................... PERU 241,588 $ 240,847 1.1
ELECTRICAL & GAS UTILITIES
------------
5,228,924
------------
Finance (16.5%)
Grupo Financiero Banorte "B"-/- ........................... MEX 796,500 789,717 3.4
BANKS-REGIONAL
Uniao Bancos Brasileiras "A" Preferred{z} ................. BRZL 21,200,000 691,770 3.0
BANKS-MONEY CENTER
Grupo Financiero Banamex Accival, S.A. de C.V. "B"-/- ..... MEX 295,000 623,224 2.7
BANKS-MONEY CENTER
First Financial Caribbean Corp. ........................... US 17,600 488,400 2.1
SAVINGS&LOANS
Banco BHIF - ADR-/- {\/} .................................. CHLE 27,800 455,225 2.0
BANKS-MONEY CENTER
Suramericana de Seguros S.A. .............................. COL 24,200 442,580 1.9
INSURANCE - MULTI-LINE
Administradora de Fondos de Pensiones Provida S.A. -
ADR{\/} .................................................. CHLE 16,500 309,375 1.4
INVESTMENT MANAGEMENT
------------
3,800,291
------------
Services (15.9%)
Lojas Americanas S.A. Preferred-/- {z} .................... BRZL 59,100,000 779,353 3.4
RETAILERS-OTHER
Telecommunicacoes Brasileiras S.A. (Telebras)-/- .......... BRZL 9,600,000 688,420 3.0
TELEPHONE NETWORKS
Cifra, S.A. de C.V. "C"-/- ................................ MEX 420,000 512,521 2.2
RETAILERS-OTHER
Gran Cadena de Almacenes Colombianos S.A. ................. COL 545,123 456,752 2.0
RETAILERS-OTHER
Ceteco Holding N.V. ....................................... NETH 7,830 451,382 2.0
RETAILERS-OTHER
Telecomunicacoes de Sao Paulo S.A. (TELESP)
Preferred{z} ............................................. BRZL 2,050,000 443,978 1.9
TELECOM - OTHER
Compania Anonima Nacional Telefonos de Venezuela (CANTV) -
ADR-/- {\/} .............................................. VENZ 10,900 306,563 1.3
TELEPHONE NETWORKS
Grupo Situr, S.A. de C.V. "B"-/- .......................... MEX 416,000 22,738 0.1
LEISURE & TOURISM
------------
3,661,707
------------
Consumer Non-Durables (9.2%)
Bavaria ................................................... COL 193,527 788,650 3.4
BEVERAGES - ALCOHOLIC
Grupo Industrial Maseca, S.A. de C.V. "B" ................. MEX 541,000 686,307 3.0
FOOD
Grupo Industrial Bimbo, S.A. de C.V. "A" .................. MEX 93,000 531,969 2.3
FOOD
Industrias J B Duarte S.A. Preferred ...................... BRZL 215,600,000 51,882 0.2
FOOD
</TABLE>
The accompanying notes are an integral part of the financial statements.
F15
<PAGE>
GT GLOBAL VARIABLE LATIN AMERICA FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Consumer Non-Durables (Continued)
Inversiones Aledo ......................................... VENZ 472,885 $ 44,728 0.2
FOOD
Ekco S.A. "CP"-/- ......................................... MEX 446,000 31,181 0.1
HOUSEHOLD PRODUCTS
------------
2,134,717
------------
Multi-Industry/Miscellaneous (0.3%)
Grupo Sidek, S.A. de C.V. - ADR-/- {\/} ................... MEX 97,300 60,813 0.3
CONGLOMERATE
------------ -----
TOTAL EQUITY INVESTMENTS (cost $20,093,695) ................. 20,633,346 90.0
------------ -----
<CAPTION>
PRINCIPAL VALUE % OF NET
SHORT-TERM INVESTMENTS CURRENCY AMOUNT (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Government & Government Agency Obligations (4.7%)
Mexico (4.7%)
Mexican Cetes, current yield 25.60%, due 9/4/97 (cost
$1,103,839) ............................................ MXN 10,000,000 1,081,848 4.7
------------ -----
TOTAL INVESTMENTS (cost $21,197,534) * ..................... 21,715,194 94.7
Other Assets and Liabilities ................................ 1,212,459 5.3
------------ -----
NET ASSETS .................................................. $ 22,927,653 100.0
------------ -----
------------ -----
</TABLE>
- --------------
-/- Non-income producing security.
{\/} U.S. currency denominated.
{z} All or part of the Fund's holdings in this security is segregated
as collateral for written futures. See Note 1 to the Financial
Statements.
{.} 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 $21,198,596 and
appreciation (depreciation) is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $ 3,570,450
Unrealized depreciation: (3,053,852)
-------------
Net unrealized appreciation: $ 516,598
-------------
-------------
</TABLE>
Abbreviations:
ADR--American Depository Receipt
GDR--Global Depository Receipt
The accompanying notes are an integral part of the financial statements.
F16
<PAGE>
GT GLOBAL VARIABLE LATIN AMERICA FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at December 31, 1996, was concentrated in
the following countries:
<TABLE>
<CAPTION>
PERCENTAGE OF NET ASSETS
{D}
---------------------------
SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE) EQUITY & OTHER TOTAL
- -------------------------------------- ------ ---------- -----
<S> <C> <C> <C>
Argentina (ARG/ARS) .................. 5.2 5.2
Brazil (BRZL/BRL) .................... 25.5 25.5
Chile (CHLE/CLP) ..................... 3.4 3.4
Colombia (COL/COP) ................... 7.3 7.3
Ecuador (ECDR/ECS) ................... 3.0 3.0
Mexico (MEX/MXN) ..................... 27.5 4.7 32.2
Netherlands (NETH/NLG) ............... 2.0 2.0
Peru (PERU/PES) ...................... 3.2 3.2
United States & Other (US/USD) ....... 5.3 5.3 10.6
Venezuela (VENZ/VEB) ................. 7.6 7.6
------ ----- -----
Total ............................... 90.0 10.0 100.0
------ ----- -----
------ ----- -----
</TABLE>
- --------------
{d} Percentages indicated are based on net assets of $22,927,653.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SHORT FUTURES CONTRACTS OUTSTANDING
DECEMBER 31, 1996
<TABLE>
<CAPTION>
EXPIRATION NO. OF MARKET
DESCRIPTION DATE CONTRACTS CURRENCY VALUE
- ---------------------------------------- ---------- --------- -------- -----------
<S> <C> <C> <C> <C>
Brazilian Real Currency Futures, strike
rate 1.0510 (face $2,378,750).......... 01/31/97 25 USD $ 2,385,500
</TABLE>
- ----------------
See Note 1 to the financial statements.
The accompanying notes are an integral part of the financial statements.
F17
<PAGE>
GT GLOBAL VARIABLE GROWTH & INCOME FUND
PORTFOLIO OF INVESTMENTS
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Finance (23.0%)
Schweizerischer Bankverein (Swiss Bank Corp.) ............. SWTZ 3,910 $ 743,718 2.0
BANKS-MONEY CENTER
Royal & Sun Alliance Insurance Group PLC .................. UK 95,000 725,514 2.0
INSURANCE - MULTI-LINE
CS Holding AG - Registered ................................ SWTZ 6,095 626,355 1.7
BANKS-MONEY CENTER
Union Bank of Switzerland - Bearer ........................ SWTZ 642 562,830 1.5
BANKS-MONEY CENTER
Fortis Amev N.V. .......................................... NETH 14,800 518,772 1.4
OTHER FINANCIAL
AEGON N.V. ................................................ NETH 7,562 482,373 1.3
INSURANCE-LIFE
ING Groep N.V. ............................................ NETH 12,787 460,806 1.3
OTHER FINANCIAL
ABN AMRO Holding N.V. ..................................... NETH 6,948 452,465 1.2
BANKS-REGIONAL
First Tennessee National Corp. ............................ US 10,800 405,000 1.1
BANKS-REGIONAL
Commonwealth Bank of Australia ............................ AUSL 38,250 365,877 1.0
BANKS-SUPER REGIONAL
Deutsche Bank AG .......................................... GER 6,750 315,556 0.9
BANKS-MONEY CENTER
American General Corp. .................................... US 7,400 302,475 0.8
INSURANCE-LIFE
Generale de Banque S.A.: .................................. BEL -- -- 0.8
BANKS-MONEY CENTER
Common .................................................. -- 829 297,285 --
Strip VVPR .............................................. -- 75 43 --
National Westminster Bank PLC ............................. UK 22,700 266,647 0.7
BANKS-MONEY CENTER
IKB Deutsche Industriebank AG ............................. GER 1,382 251,150 0.7
BANKS-REGIONAL
General Accident PLC ...................................... UK 16,970 222,005 0.6
INSURANCE - PROPERTY-CASUALTY
Mercury Asset Management Group PLC ........................ UK 10,211 217,421 0.6
INVESTMENT MANAGEMENT
LLoyds TSB Group PLC ...................................... UK 26,571 195,873 0.5
BANKS-REGIONAL
Commercial Union PLC ...................................... UK 13,382 156,620 0.4
INSURANCE - MULTI-LINE
Banco Popular Espanol S.A. ................................ SPN 710 139,527 0.4
BANKS-MONEY CENTER
Commerzbank AG ............................................ GER 5,400 137,282 0.4
BANKS-MONEY CENTER
Dresdner Bank AG .......................................... GER 4,540 136,082 0.4
BANKS-MONEY CENTER
Banco de Santander S.A. ................................... SPN 1,915 122,639 0.3
BANKS-MONEY CENTER
Kredietbank N.V. .......................................... BEL 315 103,279 0.3
BANKS-REGIONAL
</TABLE>
The accompanying notes are an integral part of the financial statements.
F18
<PAGE>
GT GLOBAL VARIABLE GROWTH & INCOME FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Finance (Continued)
M & G Group PLC ........................................... UK 5,000 $ 94,606 0.3
INVESTMENT MANAGEMENT
Societe Generale Paris .................................... FR 475 51,443 0.1
BANKS-MONEY CENTER
Compagnie Financiere de Paribas S.A. ...................... FR 524 35,496 0.1
OTHER FINANCIAL
Axa Group ................................................. FR 526 33,510 0.1
INSURANCE - MULTI-LINE
Gerrard & National Holdings PLC ........................... UK 7,080 32,369 0.1
SECURITIES BROKER
------------
8,455,018
------------
Energy (11.5%)
Elektrowatt AG-/- ......................................... SWTZ 2,440 971,988 2.7
ELECTRICAL & GAS UTILITIES
Royal Dutch Petroleum Co. ................................. NETH 3,268 573,509 1.6
OIL
Electrabel S.A. ........................................... BEL 1,880 445,107 1.2
ELECTRICAL & GAS UTILITIES
Exxon Corp. ............................................... US 4,000 392,000 1.1
OIL
Reunies Electrobel & Tractebel S.A. ....................... BEL 763 355,401 1.0
ELECTRICAL & GAS UTILITIES
Mobil Corp. ............................................... US 2,900 354,525 1.0
OIL
RWE AG .................................................... GER 8,170 346,349 0.9
ELECTRICAL & GAS UTILITIES
Pacific Gas and Electric Co. .............................. US 9,550 200,550 0.5
ELECTRICAL & GAS UTILITIES
Elf Aquitaine ............................................. FR 1,920 175,061 0.5
OIL
Groupe Bruxelles Lambert S.A. ............................. BEL 1,050 135,222 0.4
OIL
Shell Transport & Trading Co., PLC ........................ UK 6,530 112,821 0.3
OIL
Union Electrica Fenosa S.A. ............................... SPN 5,000 53,753 0.1
ELECTRICAL & GAS UTILITIES
British Gas PLC ........................................... UK 11,000 42,380 0.1
GAS PRODUCTION & DISTRIBUTION
Iberdrola S.A. ............................................ SPN 2,000 28,360 0.1
ELECTRICAL & GAS UTILITIES
------------
4,187,026
------------
Services (8.3%)
Telecom Corporation of New Zealand Ltd. ................... NZ 133,160 679,349 1.9
TELEPHONE NETWORKS
Woolworths Ltd. ........................................... AUSL 280,000 674,029 1.8
RETAILERS-OTHER
Mannesmann AG ............................................. GER 770 333,934 0.9
WIRELESS COMMUNICATIONS
</TABLE>
The accompanying notes are an integral part of the financial statements.
F19
<PAGE>
GT GLOBAL VARIABLE GROWTH & INCOME FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Services (Continued)
McGraw-Hill, Inc. ......................................... US 6,980 $ 321,953 0.9
BROADCASTING & PUBLISHING
United News & Media PLC ................................... UK 21,918 261,590 0.7
BROADCASTING & PUBLISHING
Royal PTT Nederland N.V. .................................. NETH 5,915 225,839 0.6
TELEPHONE NETWORKS
Cognizant Corp. ........................................... US 4,800 158,400 0.4
CONSUMER SERVICES
EMI Group PLC ............................................. UK 6,300 149,409 0.4
LEISURE & TOURISM
Granada Group PLC, Convertible Preferred, 7.5% till
4/30/03 .................................................. UK 23,482 114,193 0.3
LEISURE & TOURISM
Dun & Bradstreet Corp. .................................... US 4,800 114,000 0.3
BROADCASTING & PUBLISHING
AC Nielsen Corp.-/- ....................................... US 1,600 24,200 0.1
CONSUMER SERVICES
------------
3,056,896
------------
Materials/Basic Industry (7.4%)
BASF AG ................................................... GER 15,500 597,425 1.6
CHEMICALS
Solvay S.A. "A" ........................................... BEL 751 459,905 1.3
CHEMICALS
Western Mining Corporation Holdings Ltd. .................. AUSL 72,600 457,391 1.3
METALS - NON-FERROUS
CSR Ltd. .................................................. AUSL 121,450 424,549 1.2
BUILDING MATERIALS & COMPONENTS
Akzo Nobel N.V. ........................................... NETH 3,069 419,632 1.2
CHEMICALS
Monsanto Co. .............................................. US 7,500 291,563 0.8
CHEMICALS
------------
2,650,465
------------
Consumer Non-Durables (6.3%)
EMAIL Ltd. ................................................ AUSL 164,800 532,880 1.5
HOUSEHOLD PRODUCTS
Avon Products, Inc. ....................................... US 8,000 457,000 1.3
PERSONAL CARE/COSMETICS
Philip Morris Cos., Inc. .................................. US 3,700 416,713 1.1
FOOD
Universal Corp. ........................................... US 12,200 391,925 1.1
TOBACCO
Brown-Forman Corp. "B" .................................... US 6,200 283,650 0.8
BEVERAGES - ALCOHOLIC
Bass PLC .................................................. UK 6,600 92,784 0.3
BEVERAGES - ALCOHOLIC
Associated British Foods Group PLC ........................ UK 8,400 69,688 0.2
FOOD
------------
2,244,640
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F20
<PAGE>
GT GLOBAL VARIABLE GROWTH & INCOME FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Health Care (3.8%)
Bristol Myers Squibb Co. .................................. US 6,000 $ 652,500 1.8
PHARMACEUTICALS
Bayer AG .................................................. GER 12,500 510,403 1.4
PHARMACEUTICALS
Siemens AG - New-/- ....................................... GER 4,270 201,284 0.6
MEDICAL TECHNOLOGY & SUPPLIES
------------
1,364,187
------------
Capital Goods (2.7%)
General Electric PLC-/- ................................... UK 51,900 340,372 0.9
AEROSPACE/DEFENSE
Lockheed Martin Corp. ..................................... US 2,726 249,429 0.7
AEROSPACE/DEFENSE
Rolls-Royce PLC ........................................... UK 42,548 187,605 0.5
AEROSPACE/DEFENSE
Thomson CSF S.A. .......................................... FR 3,275 106,406 0.3
AEROSPACE/DEFENSE
BICC PLC .................................................. UK 20,327 97,110 0.3
INDUSTRIAL COMPONENTS
------------
980,922
------------
Consumer Durables (1.3%)
GKN PLC ................................................... UK 28,600 490,216 1.3
------------
AUTO PARTS
Multi-Industry/Miscellaneous (0.9%)
VEBA AG ................................................... GER 5,400 312,484 0.9
------------
CONGLOMERATE
Technology (0.3%)
Alcatel Alsthom Compagnie Generale d'Electricite .......... FR 1,290 103,798 0.3
TELECOM TECHNOLOGY
------------ -----
TOTAL EQUITY INVESTMENTS (cost $17,804,251) ................. 23,845,652 65.5
------------ -----
<CAPTION>
PRINCIPAL VALUE % OF NET
FIXED INCOME INVESTMENTS CURRENCY AMOUNT (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Government & Government Agency Obligations (25.6%)
Australia (2.6%)
Australian Government:
8.75% due 8/15/08 ..................................... AUD 774,000 672,999 1.9
7% due 4/15/00 ........................................ AUD 324,000 259,764 0.7
Canada (0.6%)
Canadian Government, 8.75% due 12/1/05 .................. CAD 250,000 212,314 0.6
Denmark (0.9%)
Kingdom of Denmark, 7% due 11/15/07 ..................... DKK 1,921,000 331,982 0.9
Germany (3.9%)
Deutschland Republic, 6.75% due 4/22/03 ................. DEM 1,500,000 1,050,098 2.9
Treuhandanstalt, 6.375% due 7/1/99 ...................... DEM 500,000 344,896 1.0
</TABLE>
The accompanying notes are an integral part of the financial statements.
F21
<PAGE>
GT GLOBAL VARIABLE GROWTH & INCOME FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL VALUE % OF NET
FIXED INCOME INVESTMENTS CURRENCY AMOUNT (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Government & Government Agency Obligations (Continued)
Italy (3.1%)
Italian Buoni Poliennali del Tesoro (BTPS):
10.5% due 4/15/98 ..................................... ITL 865,000,000 $ 597,792 1.6
10.5% due 9/1/05 ...................................... ITL 710,000,000 560,502 1.5
Spain (1.2%)
Kingdom of Spain, 10.3% due 6/15/02 ..................... ESP 47,430,000 433,946 1.2
Sweden (1.4%)
Swedish Government, 6% due 2/9/05 ....................... SEK 3,700,000 526,379 1.4
United Kingdom (5.4%)
United Kingdom Treasury:
7% due 6/7/02 ......................................... GBP 821,000 1,388,329 3.8
7.75% due 9/8/06 ...................................... GBP 325,000 565,029 1.6
United States (6.5%)
United States Treasury:
7.25% due 5/15/04 ..................................... USD 1,060,000 1,115,754 3.1
6.25% due 8/15/23 ..................................... USD 400,000 374,969 1.0
6.5% due 8/15/05 ...................................... USD 360,000 362,496 1.0
7.5% due 2/15/05 ...................................... USD 250,000 267,417 0.7
6% due 2/15/26 ........................................ USD 270,000 245,589 0.7
------------
Total Government & Government Agency Obligations (cost
$8,704,356) ................................................ 9,310,255
------------
Corporate Bonds (4.5%)
Germany (1.6%)
Siemens Capital Corp., 8% due 6/24/02+/+ ................ USD 180,000 230,130 0.6
Commerzbank AG, Convertible Bond, 9.45% due 12/31/00+ ... DEM 187,000 210,101 0.6
Deutsche Bank AG, 9.00% due 12/31/02 .................... DEM 175,000 136,313 0.4
IKB Deutsche Industriebank, 6.45% due 3/31/06 ........... DEM 1,500 975 --
United Kingdom (2.9%)
Daily Mail & General Trust, Convertible Bond, 5.75% due
9/26/03 ................................................ GBP 167,000 448,955 1.2
MBNA Chester Asset Receivable #3, effective yield 6.517%
due 11/17/03+ .......................................... GBP 200,000 342,466 0.9
Land Securities PLC, Convertible Bond, 9.375% due
7/31/04 ................................................ GBP 140,000 285,279 0.8
------------
Total Corporate Bonds (cost $1,447,319) ..................... 1,654,219
------------ -----
TOTAL FIXED INCOME INVESTMENTS (cost $10,151,675) ........... 10,964,474 30.1
------------ -----
<CAPTION>
VALUE % OF NET
WARRANTS CURRENCY (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ------------ -------------
<S> <C> <C> <C> <C>
Societe Generale Banque put, strike 14,500, due 11/15/99
Tractebel (cost $0)-/- ................................... BEF 11,065 --
------------ -----
BANKS-MONEY CENTER
</TABLE>
The accompanying notes are an integral part of the financial statements.
F22
<PAGE>
GT GLOBAL VARIABLE GROWTH & INCOME FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
REPURCHASE AGREEMENT (NOTE 1) ASSETS
- ------------------------------------------------------------- ------------ -------------
<S> <C> <C> <C> <C>
Dated December 31, 1996, with State Street Bank & Trust
Co., due January 2, 1997, for an effective yield of 6.25%,
collateralized by $1,155,000 U.S. Treasury Notes, 6.125%
due 3/31/98 (market value of collateral is $1,179,391,
including accrued interest).
(cost $1,156,201) ....................................... $ 1,156,201 3.2
------------ -----
TOTAL INVESTMENTS (cost $29,112,127) * ..................... 35,977,392 98.8
Other Assets and Liabilities ................................ 455,371 1.2
------------ -----
NET ASSETS .................................................. $ 36,432,763 100.0
------------ -----
------------ -----
</TABLE>
- --------------
-/- Non-income producing security.
+ The coupon rate shown on floating rate note represents the rate at
period end.
+/+ Issued with detachable warrants or value recovery rights. The
current market value of each warrant or right is zero.
* For Federal income tax purposes, cost is $29,117,202 and
appreciation (depreciation) is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $ 7,268,819
Unrealized depreciation: (408,629)
-------------
Net unrealized appreciation: $ 6,860,190
-------------
-------------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at December 31, 1996, was concentrated in
the following countries:
<TABLE>
<CAPTION>
PERCENTAGE OF NET ASSETS {D}
-------------------------------------------
FIXED INCOME,
RIGHTS & SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE) EQUITY WARRANTS & OTHER TOTAL
- -------------------------------------- ------ ------------- ---------- -----
<S> <C> <C> <C> <C>
Australia (AUSL/AUD) ................. 6.8 2.6 9.4
Belgium (BEL/BEF) .................... 5.0 5.0
Canada (CAN/CAD) ..................... 0.6 0.6
Denmark (DEN/DKK) .................... 0.9 0.9
France (FR/FRF) ...................... 1.4 1.4
Germany (GER/DEM) .................... 8.7 5.5 14.2
Italy (ITLY/ITL) ..................... 3.1 3.1
Netherlands (NETH/NLG) ............... 8.6 8.6
New Zealand (NZ/NZD) ................. 1.9 1.9
Spain (SPN/ESP) ...................... 0.9 1.2 2.1
Sweden (SWDN/SEK) .................... 1.4 1.4
Switzerland (SWTZ/CHF) ............... 7.9 7.9
United Kingdom (UK/GBP) .............. 10.5 8.3 18.8
United States & Other (US/USD) ....... 13.8 6.5 4.4 24.7
------ ----- --- -----
Total ............................... 65.5 30.1 4.4 100.0
------ ----- --- -----
------ ----- --- -----
</TABLE>
- --------------
{d} Percentages indicated are based on net assets of $36,432,763.
The accompanying notes are an integral part of the financial statements.
F23
<PAGE>
GT GLOBAL VARIABLE GROWTH & INCOME FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
DECEMBER 31, 1996
<TABLE>
<CAPTION>
MARKET VALUE CONTRACT DELIVERY UNREALIZED
CONTRACTS TO SELL: (U.S. DOLLARS) PRICE DATE APPRECIATION
- ---------------------------------------- -------------- ----------- -------- --------------
<S> <C> <C> <C> <C>
Deutsche Marks.......................... 1,403,284 1.51860 02/28/97 $ 12,494
French Francs........................... 38,697 5.09700 02/06/97 542
French Francs........................... 174,260 5.07000 02/19/97 3,255
Netherland Guilders..................... 598,703 1.67760 02/18/97 15,269
Swiss Francs............................ 399,312 1.31000 03/19/97 5,268
-------------- --------------
Total Contracts to Sell (Receivable
amount $2,651,084)................... 2,614,256 36,828
-------------- --------------
THE VALUE OF CONTRACTS TO SELL AS A
PERCENTAGE OF NET ASSETS IS 7.18%.
Total Open Forward Foreign Currency
Contracts, Net....................... $ 36,828
--------------
--------------
</TABLE>
- ----------------
See Note 1 to the financial statements.
The accompanying notes are an integral part of the financial statements.
F24
<PAGE>
GT GLOBAL VARIABLE TELECOMMUNICATIONS FUND
PORTFOLIO OF INVESTMENTS
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Wireless Communications (19.3%)
WinStar Communications, Inc.-/- ........................... US 80,000 $ 1,680,000 2.7
Paging Network, Inc.-/- ................................... US 100,000 1,525,000 2.4
Rural Cellular Corp. "A"-/- ............................... US 150,000 1,443,750 2.3
DDI Corp. ................................................. JPN 187 1,237,405 2.0
Korea Mobile Telecommunications: .......................... KOR -- -- 1.8
ADR{\/} ................................................. -- 63,860 822,198 --
Common .................................................. -- 320 323,882 --
Cellularvision USA, Inc.-/- ............................... US 140,000 980,000 1.5
Metro One Telecommunications-/- ........................... US 117,000 921,375 1.5
Centennial Cellular Corp. "A"-/- .......................... US 71,500 866,938 1.4
Telephone and Data Systems, Inc. .......................... US 19,200 696,000 1.1
Clearnet Communications, Inc. "A"-/- {\/} ................. CAN 63,000 693,000 1.1
Advanced Radio Telecom Corp.-/- ........................... US 47,500 534,375 0.8
Netcom ASA-/- ............................................. NOR 35,000 331,414 0.5
Telecel - Comunicacaoes Pessoais, S.A.-/- ................. PORT 1,650 105,387 0.2
------------
12,160,724
------------
Telecom Equipment (15.1%)
Nokia AB Preferred - ADR{\/} .............................. FIN 37,000 2,127,500 3.4
U.S. Robotics Corp. ....................................... US 28,500 2,052,000 3.2
Tadiran Telecommunications Ltd.{\/} ....................... ISRL 65,000 1,454,375 2.3
Superior Telecom, Inc. .................................... US 70,000 1,426,250 2.3
Gilat Satellite Networks Ltd.-/- {\/} ..................... ISRL 50,000 1,231,250 1.9
EIS International, Inc.-/- ................................ US 80,000 690,000 1.1
Allen Group, Inc.-/- ...................................... US 25,000 556,250 0.9
------------
9,537,625
------------
Telephone Networks (13.5%)
Telefonica de Espana - ADR{\/} ............................ SPN 27,000 1,869,750 3.0
Telecomunicacoes Brasileiras S.A. (Telebras) - ADR{\/} .... BRZL 20,876 1,597,014 2.5
SPT Telecom-/- ............................................ CZCH 11,000 1,370,245 2.2
Hellenic Telecommunications - 144A{.} ..................... GREC 60,600 1,036,391 1.6
Telefonica De Peru - ADR{\/} .............................. PERU 47,200 890,900 1.4
Portugal Telecom S.A. - ADR{\/} ........................... PORT 22,000 621,500 1.0
Compania Anonima Nacional Telefonos de Venezuela
(CANTV) - ADR-/- {\/} .................................... VENZ 10,400 292,500 0.5
Hellenic Telecommunications Organization S.A. ............. GREC 14,400 246,271 0.4
Matav (Hungarian Telecommunications Co., Ltd.)-/- ......... HGRY 1,000 216,584 0.3
Pakistan Telecommunications Co., Ltd. - GDR-/- {\/} ....... PAK 3,300 198,000 0.3
Advanced Fibre Communications ............................. US 3,000 166,875 0.3
------------
8,506,030
------------
Telephone - Long Distance (10.6%)
Call-Net Enterprises, Inc. "B"-/- ......................... CAN 179,000 2,189,782 3.5
Tel-Save Holdings, Inc.-/- ................................ US 70,000 2,030,000 3.2
PT Indonesia Satellite (Indosat) - ADR{\/} ................ INDO 45,000 1,231,875 1.9
Philippine Long Distance Telephone Co. - ADR{\/} .......... PHIL 20,000 1,020,000 1.6
</TABLE>
The accompanying notes are an integral part of the financial statements.
F25
<PAGE>
GT GLOBAL VARIABLE TELECOMMUNICATIONS FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Telephone - Long Distance (Continued)
TeleBermuda International Ltd. ............................ BDA 33,200 $ 265,600 0.4
------------
6,737,257
------------
Telecom Technology (6.1%)
DSP Communications, Inc.-/- ............................... US 89,800 1,739,875 2.7
Vitesse Semiconductor Corp.-/- ............................ US 33,000 1,501,500 2.4
Spectrian Corp.-/- ........................................ US 80,000 620,000 1.0
------------
3,861,375
------------
Semiconductors (5.4%)
Analog Devices, Inc.-/- ................................... US 55,000 1,863,125 2.9
LSI Logic Corp. ........................................... US 60,000 1,605,000 2.5
------------
3,468,125
------------
Cable Television (5.4%)
General Cable PLC - ADR-/- ................................ UK 80,000 1,320,000 2.1
Comcast UK Cable Partners Ltd. "A"{\/} .................... UK 85,000 1,158,125 1.8
United International Holdings, Inc. "A"-/- ................ US 55,000 673,750 1.1
International CableTel, Inc.-/- ........................... UK 10,000 252,500 0.4
------------
3,404,375
------------
Telephone - Regional/Local (4.9%)
ICG Communications, Inc.-/- ............................... US 120,000 2,115,000 3.3
McLeod, Inc.-/- ........................................... US 40,000 1,020,000 1.6
------------
3,135,000
------------
Networking (4.8%)
Cisco Systems, Inc.-/- .................................... US 20,000 1,272,500 2.0
Performance Technologies, Inc.-/- ......................... US 100,000 965,625 1.5
Cabletron Systems, Inc.-/- ................................ US 22,000 731,500 1.2
Dimension Data Holdings Ltd.-/- ........................... SAFR 17,500 51,460 0.1
------------
3,021,085
------------
Wholesale & International Trade (4.3%)
CellStar Corp.-/- ......................................... US 150,000 2,700,000 4.3
------------
Multi-Industry (3.1%)
Mannesmann AG ............................................. GER 4,500 1,951,560 3.1
------------
Telecom Technology (2.9%)
Mitec Telecom, Inc.-/- .................................... CAN 315,000 1,817,485 2.9
------------
Consumer Electronics (1.3%)
Three-Five Systems, Inc.-/- ............................... US 61,800 795,675 1.3
Unitech Industries, Inc.(.) -/- ........................... US 100,000 18,750 --
------------
814,425
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F26
<PAGE>
GT GLOBAL VARIABLE TELECOMMUNICATIONS FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Building Materials & Components (1.0%)
PT Bakrie and Brothers .................................... INDO 1,600,000 $ 660,737 1.0
------------
Beverages - Alcoholic (0.0%)
Bavaria ................................................... COL 3,000 12,225 --
------------ -----
TOTAL EQUITY INVESTMENTS (cost $55,839,502) ................. 61,788,028 97.7
------------ -----
<CAPTION>
VALUE % OF NET
REPURCHASE AGREEMENT (NOTE 1) ASSETS
- ------------------------------------------------------------- ------------ -------------
<S> <C> <C> <C> <C>
Dated December 31, 1996, with State Street Bank and Trust
Co., due January 2, 1997, for an effective yield of 6.25%,
collateralized by $985,000 U.S. Treasury Notes, 6.125% due
3/31/98 (market value of collateral is $1,021,049,
including accrued interest). (cost $982,170) ............. 982,170 1.5
------------ -----
TOTAL INVESTMENTS (cost $56,821,672) * ..................... 62,770,198 99.2
Other Assets and Liabilities ................................ 487,631 0.8
------------ -----
NET ASSETS .................................................. $ 63,257,829 100.0
------------ -----
------------ -----
</TABLE>
- --------------
{\/} U.S. currency denominated.
-/- Non-income producing security.
(.) Restricted securities: At December 31, 1996, the Fund owned the
following restricted security constituting 0.03% of net assets
which may not be publicly sold without registration under the
Securities Act of 1933.
<TABLE>
<CAPTION>
VALUE
PER
SHARE
ACQUISITION (NOTE
DESCRIPTION ACQUISITION DATE SHARES COST 1)
----------------------------------------------- ----------------- ------ ----------- ------
<S> <C> <C> <C> <C>
Unitech Industries, Inc........................ 08/24/95 100,000 $ 1,200,000 $0.19
</TABLE>
{.} 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 $56,821,672 and
appreciation (depreciation) is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $ 14,015,000
Unrealized depreciation: (8,066,474)
-------------
Net unrealized appreciation: $ 5,948,526
-------------
-------------
</TABLE>
Abbreviations:
ADR--American Depository Receipt
GDR--Global Depository Receipt
The accompanying notes are an integral part of the financial statements.
F27
<PAGE>
GT GLOBAL VARIABLE TELECOMMUNICATIONS FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at December 31, 1996, was concentrated in
the following countries:
<TABLE>
<CAPTION>
PERCENTAGE OF NET ASSETS {D}
------------------------------
SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE) EQUITY & OTHER TOTAL
- -------------------------------------- ------ ------------- -----
<S> <C> <C> <C>
Bermuda (BDA/BMD) .................... 0.4 0.4
Brazil (BRZL/BRL) .................... 2.5 2.5
Canada (CAN/CAD) ..................... 7.5 7.5
Czech Republic (CZCH/CSK) ............ 2.2 2.2
Finland (FIN/FIM) .................... 3.4 3.4
Germany (GER/DEM) .................... 3.1 3.1
Greece (GREC/GRD) .................... 2.0 2.0
Hungary (HGRY/HUF) ................... 0.3 0.3
Indonesia (INDO/IDR) ................. 2.9 2.9
Israel (ISRL/ILS) .................... 4.2 4.2
Japan (JPN/JPY) ...................... 2.0 2.0
Korea (KOR/KRW) ...................... 1.8 1.8
Norway (NOR/NOK) ..................... 0.5 0.5
Pakistan (PAK/PKR) ................... 0.3 0.3
Peru (PERU/PES) ...................... 1.4 1.4
Philippines (PHIL/PHP) ............... 1.6 1.6
Portgual (PORT/PTE) .................. 1.2 1.2
South Africa (SAFR/ZAR) .............. 0.1 0.1
Spain (SPN/ESP) ...................... 3.0 3.0
United Kingdom (UK/GBP) .............. 4.3 4.3
United States & Other (US/USD) ....... 52.5 2.3 54.8
Venezuela (VENZ/VEB) ................. 0.5 0.5
------ --- -----
Total ............................... 97.7 2.3 100.0
------ --- -----
------ --- -----
</TABLE>
- --------------
{d} Percentages indicated are based on net assets of $63,257,829.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
DECEMBER 31, 1996
<TABLE>
<CAPTION>
MARKET VALUE CONTRACT DELIVERY UNREALIZED
CONTRACTS TO SELL: (U.S. DOLLARS) PRICE DATE APPRECIATION
- ---------------------------------------- -------------- ----------- -------- --------------
<S> <C> <C> <C> <C>
Deutsche Marks.......................... 522,152 1.51860 02/28/97 $ 4,649
Japanese Yen............................ 168,366 110.00000 01/07/97 8,816
Japanese Yen............................ 113,776 111.74500 02/06/97 3,455
Japanese Yen............................ 94,745 110.48000 02/12/97 3,915
Japanese Yen............................ 130,654 111.20000 02/28/97 4,238
-------------- --------------
Total Contracts to Sell (Receivable
amount $1,054,766)................... 1,029,693 25,073
-------------- --------------
THE VALUE OF CONTRACTS TO SELL AS A
PERCENTAGE OF NET ASSETS IS 1.63%.
Total Open Forward Foreign Currency
Contracts............................ $ 25,073
--------------
--------------
</TABLE>
- ----------------
See Note 1 to the financial statements.
The accompanying notes are an integral part of the financial statements.
F28
<PAGE>
GT GLOBAL VARIABLE EMERGING MARKETS FUND
PORTFOLIO OF INVESTMENTS
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Finance (20.9%)
Banco Totta & Acores "B" - Registered ..................... PORT 32,293 $ 609,192 3.5
BANKS-MONEY CENTER
First Financial Caribbean Corp. ........................... US 20,500 568,875 3.2
SAVINGS&LOANS
Banco Commercial S.A. - 144A ADR{.} -/- {\/} .............. URGY 34,700 563,875 3.2
BANKS-REGIONAL
Peregrine Investment Holdings Ltd. ........................ HK 305,000 522,530 3.0
INVESTMENT MANAGEMENT
Banco LatinoAmericano de Exportaciones S.A. (Bladex)
"E"{\/} .................................................. PAN 10,200 517,652 2.9
OTHER FINANCIAL
Global Menkul Degerler AS ................................. TRKY 29,723,700 322,486 1.8
SECURITIES BROKER
Winsor Properties Holdings Ltd.-/- ........................ HK 200,000 321,955 1.8
REAL ESTATE INVESTMENT TRUST
State Bank of India Ltd. - GDR-/- {\/} .................... IND 13,500 234,495 1.3
BANKS-MONEY CENTER
Shinhan Bank-/- ........................................... KOR 2,740 43,946 0.2
BANKS-REGIONAL
------------
3,705,006
------------
Materials/Basic Industry (19.4%)
Gujarat Ambuja Cements - GDR{\/} .......................... IND 142,000 1,171,500 6.7
CEMENT
Caemi Mineracao e Metalurgia S.A. Preferred-/- ............ BRZL 14,950,000 733,613 4.2
METALS - STEEL
General Mining Union Corp. (Gencor) ....................... SAFR 142,900 519,525 3.0
METALS - NON-FERROUS
Grupo Mexico S.A. "B"-/- .................................. MEX 140,000 435,998 2.5
METALS - NON-FERROUS
Industrias Penoles S.A. "CP" .............................. MEX 110,000 390,111 2.2
METALS - NON-FERROUS
Oryx Gold Holdings Ltd.-/- ................................ SAFR 84,700 122,449 0.7
GOLD
Corporacion Financiera del Valle S.A. - ADR{\/} ........... COL 2,652 9,282 0.1
MISC. MATERIALS & COMMODITIES
------------
3,382,478
------------
Multi-Industry/Miscellaneous (17.4%)
John Keells Holdings Ltd. - 144A GDR{.} {\/} .............. SLNKA 132,214 826,338 4.7
CONGLOMERATE
Orogen Minerals Ltd. - 144A ADR{.} -/- {\/} ............... AUSL 35,000 800,800 4.5
MISCELLANEOUS
Banco Comercial Portgues "A", Convertible Preferred, 8%
until 6/30/03{\/} ........................................ PORT 10,800 557,550 3.2
MISCELLANEOUS
Anglo American Corporation of South African Ltd. -
ADR{\/} .................................................. SAFR 7,000 381,500 2.2
CONGLOMERATE
Koor Industries Ltd. - ADR{\/} ............................ ISRL 20,100 341,700 1.9
CONGLOMERATE
</TABLE>
The accompanying notes are an integral part of the financial statements.
F29
<PAGE>
GT GLOBAL VARIABLE EMERGING MARKETS FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Multi-Industry/Miscellaneous (Continued)
Mahindra & Mahindra Ltd. - GDR{\/} ........................ IND 13,333 $ 156,663 0.9
MISCELLANEOUS
------------
3,064,551
------------
Services (10.8%)
Zag Industries Ltd.-/- .................................... ISRL 51,300 846,450 4.8
MISC. MATERIALS & COMMODITIES
Matav-Cable Systems Media Ltd.-/- ......................... ISRL 25,000 390,625 2.2
CABLE TELEVISION
SPT Telecom-/- ............................................ CZCH 2,980 371,212 2.1
TELEPHONE NETWORKS
Grand Hotel Holdings Ltd. "A" ............................. HK 710,000 298,358 1.7
LEISURE & TOURISM
------------
1,906,645
------------
Energy (9.5%)
Samchully Co.: ............................................ KOR -- -- 3.0
ENERGY SOURCES
Common .................................................. -- 6,700 469,199 --
Bonus-/- ................................................ -- 620 43,418 --
New 2-/- ................................................ -- 248 17,515 --
Basic Petroleum International Ltd.-/- ..................... US 13,800 455,400 2.6
OIL
Gazprom - 144A ADR{.} -/- {\/} ............................ RUS 21,600 383,400 2.2
GAS PRODUCTION & DISTRIBUTION
Czeske Energeticke Zavody (CEZ AS)-/- ..................... CZCH 6,920 249,234 1.4
ELECTRICAL & GAS UTILITIES
LUKoil Holding - ADR-/- {\/} .............................. RUS 1,300 59,800 0.3
GAS PRODUCTION & DISTRIBUTION
------------
1,677,966
------------
Consumer Non-Durables (4.9%)
Vitasoy International Holdings Ltd. ....................... HK 600,000 261,831 1.5
BEVERAGES - NON-ALCOHOLIC
NU Skin Asia Pacific, Inc.-/- ............................. US 7,200 222,300 1.3
PERSONAL CARE/COSMETICS
Gruma S.A. "B"-/- ......................................... MEX 35,000 213,550 1.2
FOOD
Noble China-/- {/\} ....................................... CHNA 80,000 159,509 0.9
BEVERAGES - ALCOHOLIC
------------
857,190
------------
Health Care (2.8%)
Eczacibasi Ilac Sanayi ve Ticaret AS-/- ................... TRKY 9,988,600 498,047 2.8
------------
HEALTH CARE SERVICES
Capital Goods (0.7%)
Hindalco Industries Ltd. - 144A GDR{.} {\/} ............... IND 5,250 128,625 0.7
------------
INDUSTRIAL COMPONENTS
</TABLE>
The accompanying notes are an integral part of the financial statements.
F30
<PAGE>
GT GLOBAL VARIABLE EMERGING MARKETS FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Consumer Durables (0.5%)
Tata Engineering and Locomotive Co., Ltd. - GDR{\/} ....... IND 8,000 $ 85,000 0.5
AUTOMOBILES
------------ -----
TOTAL EQUITY INVESTMENTS (cost $14,294,997) ................. 15,305,508 86.9
------------ -----
<CAPTION>
NO. OF VALUE % OF NET
WARRANTS COUNTRY WARRANTS (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Peregrine Investment Holdings Ltd. Warrants, expires
5/15/98 (cost $0)-/- ..................................... HK 30,500 9,760 0.1
------------ -----
INVESTMENT MANAGEMENT
<CAPTION>
VALUE % OF NET
REPURCHASE AGREEMENT (NOTE 1) ASSETS
- ------------------------------------------------------------- ------------ -------------
<S> <C> <C> <C> <C>
Dated December 31, 1996, with State Street Bank & Trust
Co., due January 2, 1997, for an effective yield of 6.25%,
collateralized by $2,540,000 U.S. Treasury Bonds, 8.125%
due 8/15/19 (market value of collateral is $3,046,973,
including accrued interest). (cost $2,981,518) ........... 2,981,518 16.9
------------ -----
TOTAL INVESTMENTS (cost $17,276,515) * ..................... 18,296,786 103.9
Other Assets and Liabilities ................................ (692,862) (3.9)
------------ -----
NET ASSETS .................................................. $ 17,603,924 100.0
------------ -----
------------ -----
</TABLE>
- --------------
{\/} 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.
{/\} Security is denominated in CAD.
-/- Non-income producing security.
* For Federal income tax purposes, cost is $17,280,886 and
appreciation (depreciation) is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $ 1,558,518
Unrealized depreciation: (542,618)
-------------
Net unrealized appreciation: $ 1,015,900
-------------
-------------
</TABLE>
Abbreviations:
ADR--American Depository Receipt
GDR--Global Depository Receipt
The accompanying notes are an integral part of the financial statements.
F31
<PAGE>
GT GLOBAL VARIABLE EMERGING MARKETS FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at December 31, 1996, was concentrated in
the following countries:
<TABLE>
<CAPTION>
PERCENTAGE OF NET ASSETS {D}
-------------------------------------------
SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE) EQUITY WARRANTS & OTHER TOTAL
- -------------------------------------- ------ ------------- ---------- -----
<S> <C> <C> <C> <C>
Australia (AUSL/AUD) ................. 4.5 4.5
Brazil (BRZL/BRL) .................... 4.2 4.2
China (CHNA/RMB) ..................... 0.9 0.9
Colombia (COL/COP) ................... 0.1 0.1
Czech Republic (CZCH/CSK) ............ 3.5 3.5
Hong Kong (HK/HKD) ................... 8.0 0.1 8.1
India (IND/INR) ...................... 10.1 10.1
Israel (ISRL/ILS) .................... 8.9 8.9
Korea (KOR/KRW) ...................... 3.2 3.2
Mexico (MEX/MXN) ..................... 5.9 5.9
Panama (PAN/PND) ..................... 2.9 2.9
Portugal (PORT/PTE) .................. 6.7 6.7
Russia (RUS/SUR) ..................... 2.5 2.5
South Africa (SAFR/ZAR) .............. 5.9 5.9
Sri Lanka (S LNKA/LKR) ............... 4.7 4.7
Turkey (TRKY/TRL) .................... 4.6 4.6
United States & Other (US/USD) ....... 7.1 13.0 20.1
Uruguay (URGY/UYP) ................... 3.2 3.2
------ --- ----- -----
Total ............................... 86.9 0.1 13.0 100.0
------ --- ----- -----
------ --- ----- -----
</TABLE>
- --------------
{d} Percentages indicated are based on net assets of $17,603,924.
The accompanying notes are an integral part of the financial statements.
F32
<PAGE>
GT GLOBAL VARIABLE INFRASTRUCTURE FUND
PORTFOLIO OF INVESTMENTS
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
% OF NET
EQUITY INVESTMENTS COUNTRY SHARES VALUE ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Electrical & Gas Utilities (28.0%)
Empresa Nacional de Electridad S.A. - ADR{\/} ............. SPN 2,500 $ 175,000 2.9
EVN Energie-Versorgung Niederoesterreich AG ............... ASTRI 1,100 165,650 2.7
Companhia Energetica de Minas Gerais (Cemig) - ADR{\/} .... BRZL 4,989 164,637 2.7
Light - Participacoes S.A.-/- ............................. BRZL 650,000 157,667 2.6
Edison S.p.A. ............................................. ITLY 24,000 151,493 2.5
IES Industries, Inc. ...................................... US 5,000 149,375 2.5
AES China Generating Co., Ltd. "A"-/- ..................... CHNA 10,000 127,500 2.1
Enron Global Power & Pipelines L.L.C. ..................... US 4,400 118,800 2.0
Hub Power Co.-/- .......................................... PAK 151,000 117,922 2.0
BSES Ltd. - GDR-/- {\/} ................................... IND 5,000 102,500 1.7
Korea Electric Power Corp. - ADR{\/} ...................... KOR 4,300 88,150 1.5
Capex S.A. ................................................ ARG 10,500 87,167 1.4
Hafslund ASA "A" .......................................... NOR 5,000 36,479 0.6
MetroGas S.A. - ADR{\/} ................................... ARG 3,600 33,300 0.6
Chilgener S.A. - ADR{\/} .................................. CHLE 700 14,613 0.2
------------
1,690,253
------------
Telephone Networks (9.5%)
SPT Telecom-/- ............................................ CZCH 1,200 149,481 2.5
Telefonica de Espana - ADR{\/} ............................ SPN 2,100 145,425 2.4
Hellenic Telecommunications - 144A{.} ..................... GREC 6,800 116,295 1.9
Philippine Long Distance Telephone Co. - ADR{\/} .......... PHIL 1,700 86,700 1.4
CDT Telefonica De Peru - ADR{\/} .......................... PERU 2,600 49,075 0.8
Compania Anonima Nacional Telefonos de Venezuela (CANTV) -
ADR-/- {\/} .............................................. VENZ 900 25,313 0.4
Pakistan Telecommunications Co., Ltd. - GDR-/- {\/} ....... PAK 100 6,000 0.1
------------
578,289
------------
Cement (8.4%)
La Cementos Nacional, C.A. 144A - GDR{.} {\/} ............. ECDR 923 208,598 3.4
Giant Cement Holding, Inc.-/- ............................. US 10,200 164,472 2.7
Suez Cement Co. - GDR-/- {\/} ............................. EGYPT 4,900 76,440 1.3
Siam Cement Co., Ltd. - Foreign ........................... THAI 1,800 56,722 0.9
HI Cement Corp. ........................................... PHIL 15,000 4,970 0.1
------------
511,202
------------
Metals - Steel (8.0%)
Shaw Group, Inc.-/- ....................................... US 7,700 179,988 3.0
Mannesmann AG ............................................. GER 400 173,472 2.9
Northwest Pipe Co.-/- ..................................... US 8,000 130,000 2.1
Grupo Simec, S.A. de C.V. - ADR-/- {\/} ................... MEX 500 1,563 --
------------
485,023
------------
Transportation - Road & Rail (7.6%)
Canadian National Railway Co. ............................. CAN 4,300 163,400 2.7
Tranz Rail Holdings Ltd. - ADR-/- {\/} .................... NZ 9,000 159,188 2.6
</TABLE>
The accompanying notes are an integral part of the financial statements.
F33
<PAGE>
GT GLOBAL VARIABLE INFRASTRUCTURE FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
% OF NET
EQUITY INVESTMENTS COUNTRY SHARES VALUE ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Transportation - Road & Rail (Continued)
ABC Rail Products Corp.-/- ................................ US 7,000 $ 139,124 2.3
------------
461,712
------------
Machinery & Engineering (3.5%)
Caterpillar, Inc. ......................................... US 1,700 127,925 2.1
KCI Konecranes International-/- ........................... FIN 2,700 85,155 1.4
------------
213,080
------------
Telecom Equipment (3.3%)
Tadiran Telecommunications Ltd.{\/} ....................... ISRL 8,900 199,138 3.3
------------
Construction (3.1%)
United Engineers Ltd. ..................................... MAL 17,000 153,505 2.5
Cheung Kong Infrastructure Holdings-/- .................... HK 12,000 31,808 0.5
C & P Homes, Inc. ......................................... PHIL 7,950 4,087 0.1
------------
189,400
------------
Metals - Non-Ferrous (3.0%)
RMI Titanium Co.-/- ....................................... US 6,500 182,813 3.0
------------
Wireless Communications (3.0%)
DDI Corp. ................................................. JPN 13 86,023 1.4
Paging Network, Inc.-/- ................................... US 5,400 82,350 1.4
Telecel - Comunicacaoes Pessoais, S.A.-/- ................. PORT 150 9,581 0.2
------------
177,954
------------
Multi-Industry (2.9%)
Hylsamex, S.A. de C.V. 144A - ADR{.} {\/} ................. MEX 4,200 97,650 1.6
E.R.G. Ltd. ............................................... AUSL 60,117 76,418 1.3
------------
174,068
------------
Telecom Technology (2.5%)
DSP Communications, Inc.-/- ............................... US 7,800 151,125 2.5
------------
Electrical Plant/Equipment (2.4%)
ABB AB "B" ................................................ SWDN 1,300 147,315 2.4
------------
Consumer Electronics (0.9%)
Three-Five Systems, Inc.-/- ............................... US 4,000 51,500 0.9
------------
Telephone - Long Distance (0.9%)
PT Indonesia Satellite (Indosat) - ADR{\/} ................ INDO 2,000 54,750 0.9
------------
Energy Equipment & Services (0.6%)
Metzler Group, Inc.-/- .................................... US 1,100 34,925 0.6
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F34
<PAGE>
GT GLOBAL VARIABLE INFRASTRUCTURE FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
% OF NET
EQUITY INVESTMENTS COUNTRY SHARES VALUE ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Building Materials & Components (0.3%)
PT Bakrie and Brothers .................................... INDO 40,000 $ 16,518 0.3
------------
Transportation - Shipping (0.1%)
International Container Terminal Services (ICTS)-/- ....... PHIL 13,538 7,088 0.1
------------ -----
TOTAL EQUITY INVESTMENTS (cost $5,102,840) .................. 5,326,153 88.0
------------ -----
<CAPTION>
% OF NET
REPURCHASE AGREEMENT VALUE ASSETS
- ------------------------------------------------------------- ------------ -------------
<S> <C> <C> <C> <C>
Dated December 31, 1996, with State Street Bank & Turst
Co., due January 2, 1997, for an effective yield of 6.25%,
collateralized by $630,000 U.S. Treasury Bonds, 8.125% due
8/15/19 (market value of collateral is $755,884, including
accrued interest). (cost $740,128) ....................... 740,128 12.2
------------ -----
TOTAL INVESTMENTS (cost $5,842,968) * ...................... 6,066,281 100.2
Other Assets and Liabilities ................................ (12,311) (0.2)
------------ -----
NET ASSETS .................................................. $ 6,053,970 100.0
------------ -----
------------ -----
</TABLE>
- --------------
-/- 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 $5,843,560 and
appreciation (depreciation) is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $ 508,024
Unrealized depreciation: (285,303)
-------------
Net unrealized appreciation: $ 222,721
-------------
-------------
</TABLE>
Abbreviations:
ADR--American Depository Receipt
GDR--Global Depository Receipt
The accompanying notes are an integral part of the financial statements.
F35
<PAGE>
GT GLOBAL VARIABLE INFRASTRUCTURE FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at December 31, 1996, was concentrated in
the following countries:
<TABLE>
<CAPTION>
PERCENTAGE OF NET ASSETS
{D}
---------------------------
SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE) EQUITY & OTHER TOTAL
- -------------------------------------- ------ ---------- -----
<S> <C> <C> <C>
Argentina (ARG/ARS) .................. 2.0 2.0
Australia (AUSL/AUD) ................. 1.3 1.3
Austria (ASTRI/ATS) .................. 2.7 2.7
Brazil (BRZL/BRL) .................... 5.3 5.3
Canada (CAN/CAD) ..................... 2.7 2.7
Chile (CHLE/CLP) ..................... 0.2 0.2
China (CHNA/RMB) ..................... 2.1 2.1
Czech Republic (CZCH/CSK) ............ 2.5 2.5
Ecuador (ECDR/ECS) ................... 3.4 3.4
Egypt (EGYPT) ........................ 1.3 1.3
Finland (FIN/FIM) .................... 1.4 1.4
Germany (GER/DEM) .................... 2.9 2.9
Greece (GREC/GRD) .................... 1.9 1.9
Hong Kong (HK/HKD) ................... 0.5 0.5
India (IND/INR) ...................... 1.7 1.7
Indonesia (INDO/IDR) ................. 1.2 1.2
Israel (ISRL/ILS) .................... 3.3 3.3
Italy (ITLY/ITL) ..................... 2.5 2.5
Japan (JPN/JPY) ...................... 1.4 1.4
Korea (KOR/KRW) ...................... 1.5 1.5
Malaysia (MAL/MYR) ................... 2.5 2.5
Mexico (MEX/MXN) ..................... 1.6 1.6
New Zealand (NZ/NZD) ................. 2.6 2.6
Norway (NOR/NOK) ..................... 0.6 0.6
Pakistan (PAK/PKR) ................... 2.1 2.1
Peru (PERU/PES) ...................... 0.8 0.8
Philippines (PHIL/PHP) ............... 1.7 1.7
Portugal (PORT/PTE) .................. 0.2 0.2
Spain (SPN/ESP) ...................... 5.3 5.3
Sweden (SWDN/SEK) .................... 2.4 2.4
Thailand (THAI/THB) .................. 0.9 0.9
United States & Other (US/USD) ....... 25.1 12.0 37.1
Venezuela (VENZ/VEB) ................. 0.4 0.4
------ ----- -----
Total ............................... 88.0 12.0 100.0
------ ----- -----
------ ----- -----
</TABLE>
- --------------
{d} Percentages indicated are based on net assets of $6,053,970.
The accompanying notes are an integral part of the financial statements.
F36
<PAGE>
GT GLOBAL VARIABLE NATURAL RESOURCES FUND
PORTFOLIO OF INVESTMENTS
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Energy Equipment & Services (33.4%)
Trico Marine Services, Inc.-/- ............................ US 14,100 $ 676,800 4.2
Cooper Cameron Corp.-/- ................................... US 7,300 558,450 3.4
Global Marine, Inc.-/- .................................... US 24,500 505,313 3.1
Global Industries Ltd.-/- ................................. US 26,600 495,425 3.0
Energy Ventures, Inc.-/- .................................. US 9,600 488,400 3.0
Seacor Holdings, Inc.-/- .................................. US 7,600 478,800 2.9
Rowan Cos., Inc.-/- ....................................... US 17,300 391,413 2.4
BJ Services Co.-/- ........................................ US 7,500 382,500 2.4
Atwood Oceanics, Inc.-/- .................................. US 4,900 311,150 1.9
Reading & Bates Corp.-/- .................................. US 10,700 283,550 1.7
Marine Drilling Co., Inc.-/- .............................. US 13,800 271,688 1.7
Veritas DGC, Inc.-/- {/\} ................................. US 14,080 249,372 1.5
Tuboscope Vetco International Corp.-/- .................... US 12,300 190,650 1.2
Falcon Drilling Co., Inc.-/- .............................. US 4,000 157,000 1.0
------------
5,440,511
------------
Oil (19.0%)
Ente Nazionale Idrocarburi (ENI) S.p.A. - ADR{\/} ......... ITLY 15,000 774,375 4.8
Abacan Resource Corp.-/- .................................. CAN 61,800 532,603 3.3
Benton Oil & Gas Co.-/- ................................... US 19,600 443,450 2.7
Triton Energy Ltd.-/- ..................................... US 8,000 388,000 2.4
Petroleo Brasileiro S.A. (Petrobras) Preferred ............ BRZL 2,100,000 334,537 2.1
Nuevo Energy Co.-/- ....................................... US 5,400 280,800 1.7
Petroleum Securities Australia Ltd. ....................... AUSL -- -- 0.6
Common-/- ............................................... -- 21,750 94,347 --
ADR-/- {\/} ............................................. AUSL 3,000 68,250 0.4
Monterey Resources, Inc.-/- ............................... US 4,000 64,500 0.4
HarCor Energy, Inc.-/- .................................... US 13,000 63,375 0.4
Jerez Energy International, Inc.-/- ....................... CAN 19,200 23,839 0.2
------------
3,068,076
------------
Gold (17.4%)
Bre-X Minerals Ltd.-/- .................................... CAN 92,700 1,469,172 9.0
Barrick Gold Corp.: ....................................... CAN -- -- 4.4
Common{\/} .............................................. -- 15,900 457,125 --
Common .................................................. -- 9,300 266,597 --
Getchell Gold Corp.-/- .................................... US 7,000 268,625 1.7
Lihir Gold Ltd.-/- ........................................ AUSL 71,900 137,094 0.8
Oryx Gold Holdings Ltd.-/- ................................ SAFR 60,000 86,741 0.5
Dayton Mining Corp.-/- .................................... CAN 10,900 72,444 0.4
Asquith Resources, Inc.-/- ................................ CAN 35,900 47,195 0.3
Yamana Resources, Inc.-/- ................................. CAN 13,700 42,525 0.3
Dayton Mining Corp.-/- .................................... US 800 5,350 --
------------
2,852,868
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F37
<PAGE>
GT GLOBAL VARIABLE NATURAL RESOURCES FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Gas Production & Distribution (11.6%)
Comstock Resources, Inc.-/- ............................... US 42,400 $ 551,200 3.4
Enterprise Oil PLC ........................................ UK 39,800 439,572 2.7
Chesapeake Energy Corp.-/- ................................ US 6,800 378,250 2.3
Rutherford-Moran Oil Corp.-/- ............................. US 13,000 364,000 2.2
Canadian 88 Energy Corp.-/- ............................... CAN 37,300 163,453 1.0
------------
1,896,475
------------
Miscellaneous (3.6%)
Orogen Minerals Ltd.: ..................................... AUSL -- -- 3.6
144A ADR{.} -/- {\/} .................................... -- 15,600 356,928 --
Common-/- ............................................... -- 100,000 232,780 --
------------
589,708
------------
Metals - Non-Ferrous (0.6%)
International Curator Resources Ltd.-/- ................... CAN 12,000 105,171 0.6
------------ -----
TOTAL EQUITY INVESTMENTS (cost $12,132,208) ................. 13,952,809 85.6
------------ -----
<CAPTION>
NO. OF VALUE % OF NET
WARRANTS COUNTRY WARRANTS (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Yamana Resources, Inc. Warrants, expire 12/31/98 (cost
$5,491)-/- ............................................... CAN 6,850 6,751 --
------------ -----
GOLD
<CAPTION>
VALUE % OF NET
REPURCHASE AGREEMENT (NOTE 1) ASSETS
- ------------------------------------------------------------- ------------ -------------
<S> <C> <C> <C> <C>
Dated December 31, 1996, with State Street Bank & Trust
Co., due January 2, 1997, for an effective yield of 6.25%,
collateralized by $2,080,000 U.S. Treasury Bonds, 8.125%
due 8/15/19 (market value of collateral is $2,495,158,
including accrued interest). (cost $2,441,424) ........... 2,441,424 15.0
------------ -----
TOTAL INVESTMENTS (cost $14,579,123) * ..................... 16,400,984 100.6
Other Assets and Liabilities ................................ (93,031) (0.6)
------------ -----
NET ASSETS .................................................. $ 16,307,953 100.0
------------ -----
------------ -----
</TABLE>
- --------------
-/- Non-income producing security.
{/\} Security is denominated in CAD.
{\/} 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 $14,625,429 and
appreciation (depreciation) is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $ 1,863,587
Unrealized depreciation: (88,032)
-------------
Net unrealized appreciation: $ 1,775,555
-------------
-------------
</TABLE>
Abbreviation:
ADR--American Depository Receipt
The accompanying notes are an integral part of the financial statements.
F38
<PAGE>
GT GLOBAL VARIABLE NATURAL RESOURCES FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at December 31, 1996, was concentrated in
the following countries:
<TABLE>
<CAPTION>
PERCENTAGE OF NET ASSETS
{D}
---------------------------
SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE) EQUITY & OTHER TOTAL
- -------------------------------------- ------ ---------- -----
<S> <C> <C> <C>
Australia (AUSL/AUD) ................. 5.4 5.4
Brazil (BRZL/BRL) .................... 2.1 2.1
Canada (CAN/CAD) ..................... 19.5 19.5
Italy (ITLY/ITL) ..................... 4.8 4.8
South Africa (SAFR/ZAR) .............. 0.5 0.5
United Kingdom (UK/GBP) .............. 2.7 2.7
United States & Other (US/USD) ....... 50.6 14.4 65.0
------ ----- -----
Total ............................... 85.6 14.4 100.0
------ ----- -----
------ ----- -----
</TABLE>
- --------------
{d} Percentages indicated are based on net assets of $16,307,953.
The accompanying notes are an integral part of the financial statements.
F39
<PAGE>
GT GLOBAL VARIABLE AMERICA FUND
PORTFOLIO OF INVESTMENTS
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Energy (24.1%)
Rowan Cos., Inc.-/- ....................................... US 48,800 $ 1,104,100 2.7
ENERGY EQUIPMENT & SERVICES
Cooper Cameron Corp.-/- ................................... US 14,300 1,093,950 2.6
ENERGY EQUIPMENT & SERVICES
ENSCO International, Inc.-/- .............................. US 19,700 955,450 2.3
ENERGY EQUIPMENT & SERVICES
Seacor Holdings, Inc.-/- .................................. US 14,900 938,700 2.3
ENERGY EQUIPMENT & SERVICES
Global Marine, Inc.-/- .................................... US 43,800 903,375 2.2
ENERGY EQUIPMENT & SERVICES
Western Atlas, Inc.-/- .................................... US 12,600 893,025 2.1
ENERGY EQUIPMENT & SERVICES
Marine Drilling Co., Inc.-/- .............................. US 43,100 848,531 2.0
ENERGY EQUIPMENT & SERVICES
Ente Nazionale Idrocarburi (ENI) S.p.A. - ADR{\/} ......... ITLY 16,300 841,488 2.0
OIL
Benton Oil & Gas Co.-/- ................................... US 31,300 708,163 1.7
OIL
Triton Energy Ltd.-/- ..................................... US 12,800 620,800 1.5
OIL
Reading & Bates Corp.-/- .................................. US 17,400 461,100 1.1
ENERGY EQUIPMENT & SERVICES
Chesapeake Energy Corp.-/- ................................ US 6,000 333,750 0.8
GAS PRODUCTION & DISTRIBUTION
Atwood Oceanics, Inc.-/- .................................. US 5,100 323,850 0.8
ENERGY EQUIPMENT & SERVICES
------------
10,026,282
------------
Technology (19.5%)
Microsoft Corp.-/- ........................................ US 18,200 1,503,775 3.6
SOFTWARE
Intel Corporation ......................................... US 10,600 1,387,938 3.3
SEMICONDUCTORS
3Com Corp.-/- ............................................. US 14,200 1,041,925 2.5
NETWORKING
American Power Conversion Corp.-/- ........................ US 29,700 809,320 1.9
NETWORKING
Dynatech Corp.-/- ......................................... US 15,100 668,175 1.6
INSTRUMENTATION & TEST
DSP Communications, Inc.-/- ............................... US 34,000 658,750 1.6
TELECOM TECHNOLOGY
Cisco Systems, Inc.-/- .................................... US 9,700 617,163 1.5
NETWORKING
Comverse Technology, Inc.-/- .............................. US 16,300 616,344 1.5
COMPUTERS & PERIPHERALS
Computer Products, Inc.-/- ................................ US 22,000 429,000 1.0
COMPUTERS & PERIPHERALS
Cognos, Inc.-/- {\/} ...................................... CAN 14,700 413,438 1.0
SOFTWARE
------------
8,145,828
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F40
<PAGE>
GT GLOBAL VARIABLE AMERICA FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Services (18.2%)
TJX Cos., Inc. ............................................ US 24,700 $ 1,170,163 2.8
RETAILERS-APPAREL
Loewen Group, Inc.{\/} .................................... CAN 27,000 1,056,375 2.5
CONSUMER SERVICES
Ross Stores, Inc. ......................................... US 20,600 1,030,000 2.5
RETAILERS-APPAREL
Safeway, Inc.-/- .......................................... US 21,500 919,125 2.2
RETAILERS-FOOD
Paychex, Inc. ............................................. US 14,500 745,844 1.8
CONSUMER SERVICES
Tiffany & Co. ............................................. US 20,100 736,163 1.8
RETAILERS-OTHER
Outdoor Systems, Inc.-/- .................................. US 17,850 502,031 1.2
BUSINESS & PUBLIC SERVICES
USAir Group, Inc.-/- ...................................... US 20,100 469,838 1.1
TRANSPORTATION - AIRLINES
HFS, Inc.-/- .............................................. US 6,700 400,325 1.0
LEISURE & TOURISM
Universal Outdoor Holdings, Inc.-/- ....................... US 14,000 329,000 0.8
BUSINESS & PUBLIC SERVICES
Footstar, Inc.-/- ......................................... US 5,800 144,275 0.3
RETAILERS-APPAREL
Claire's Stores, Inc. ..................................... US 5,300 68,900 0.2
RETAILERS-APPAREL
------------
7,572,039
------------
Consumer Non-Durables (13.3%)
Philip Morris Cos., Inc. .................................. US 14,200 1,599,275 3.8
FOOD
Nike, Inc. "B" ............................................ US 22,200 1,326,450 3.2
TEXTILES & APPAREL
Liz Claiborne, Inc. ....................................... US 16,000 618,000 1.5
TEXTILES & APPAREL
Foodmaker, Inc.-/- ........................................ US 61,000 541,375 1.3
FOOD
Nautica Enterprises, Inc.-/- .............................. US 18,700 472,175 1.1
TEXTILES & APPAREL
Richfood Holdings, Inc. ................................... US 15,900 385,575 0.9
FOOD
Rexall Sundown, Inc.-/- ................................... US 14,000 380,625 0.9
PERSONAL CARE/COSMETICS
Tommy Hilfiger Corp.-/- ................................... US 5,100 244,800 0.6
TEXTILES & APPAREL
------------
5,568,275
------------
Finance (9.0%)
BankAmerica Corp. ......................................... US 16,100 1,605,975 3.8
BANKS-SUPER REGIONAL
Union Planters Corp. ...................................... US 23,180 904,020 2.2
BANKS-REGIONAL
</TABLE>
The accompanying notes are an integral part of the financial statements.
F41
<PAGE>
GT GLOBAL VARIABLE AMERICA FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Finance (Continued)
Citicorp .................................................. US 7,700 $ 793,100 1.9
BANKS-MONEY CENTER
Mark Twain Bancshares, Inc. ............................... US 9,100 443,625 1.1
BANKS-REGIONAL
------------
3,746,720
------------
Materials/Basic Industry (4.7%)
Cytec Industries, Inc.-/- ................................. US 23,300 946,563 2.3
CHEMICALS
Barrick Gold Corp. ........................................ CAN 21,600 619,194 1.5
GOLD
Oregon Metallurgical Corp.-/- ............................. US 11,400 367,650 0.9
METALS - NON-FERROUS
------------
1,933,407
------------
Capital Goods (3.0%)
Davox Corp.-/- ............................................ US 20,300 837,375 2.0
TELECOM EQUIPMENT
Pairgain Technologies, Inc.-/- ............................ US 13,800 420,038 1.0
TELECOM EQUIPMENT
------------
1,257,413
------------ -----
TOTAL EQUITY INVESTMENTS (cost $32,982,916) ................. 38,249,964 91.8
------------ -----
<CAPTION>
VALUE % OF NET
REPURCHASE AGREEMENT (NOTE 1) ASSETS
- ------------------------------------------------------------- ------------ -------------
<S> <C> <C> <C> <C>
Dated December 31, 1996, with State Street Bank & Trust
Co., due January 2, 1997, for an effective yield of 6.25%,
collateralized by $3,375,000 U.S. Treasury Notes, 6.125%
due 3/31/98 (market value of collateral is $3,446,273,
including accrued interest). (cost $3,375,586) ........... 3,375,586 8.1
------------ -----
TOTAL INVESTMENTS (cost $36,358,502) * ..................... 41,625,550 99.9
Other Assets and Liabilities ................................ 21,059 0.1
------------ -----
NET ASSETS .................................................. $ 41,646,609 100.0
------------ -----
------------ -----
</TABLE>
- --------------
-/- Non-income producing security.
{\/} U.S. currency denominated.
* For Federal income tax purposes, cost is $36,538,768 and
appreciation (depreciation) is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $ 5,627,767
Unrealized depreciation: (540,985)
-------------
Net unrealized appreciation: $ 5,086,782
-------------
-------------
</TABLE>
Abbreviation:
ADR--American Depository Receipt
The accompanying notes are an integral part of the financial statements.
F42
<PAGE>
GT GLOBAL VARIABLE NEW PACIFIC FUND
PORTFOLIO OF INVESTMENTS
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Finance (44.2%)
Henderson Land Development Co., Ltd. ...................... HK 175,000 $ 1,764,934 5.4
REAL ESTATE
HSBC Holdings PLC ......................................... HK 80,000 1,711,921 5.2
BANKS-MONEY CENTER
New World Development Co., Ltd. ........................... HK 246,000 1,661,947 5.1
REAL ESTATE
Cheung Kong (Holdings) Ltd. ............................... HK 160,000 1,422,291 4.4
REAL ESTATE
Metropolitan Bank & Trust Co. ............................. PHIL 50,000 1,237,624 3.8
BANKS-REGIONAL
Wheelock & Co., Ltd. ...................................... HK 300,000 855,314 2.6
REAL ESTATE
Malaysian Resources Corp., Bhd. ........................... MAL 192,000 756,594 2.3
REAL ESTATE
Straits Steamship Land Ltd. ............................... SING 220,000 704,604 2.2
REAL ESTATE
Rashid Hussain Bhd. ....................................... MAL 100,000 661,386 2.0
SECURITIES BROKER
PT Lippo Life Insurance - Foreign ......................... INDO 600,000 552,732 1.7
INSURANCE-LIFE
Ayala Land, Inc. "B" ...................................... PHIL 468,750 535,510 1.6
REAL ESTATE
United Overseas Bank Ltd. - Foreign ....................... SING 46,000 513,011 1.6
BANKS-MONEY CENTER
Wharf (Holdings) Ltd. ..................................... HK 100,000 499,095 1.5
REAL ESTATE
Megaworld Properties & Holdings, Inc.-/- .................. PHIL 866,000 346,268 1.1
REAL ESTATE
Singapore Land Ltd. ....................................... SING 50,000 277,023 0.8
REAL ESTATE
Gadek Capital Bhd.-/- ..................................... MAL 100,000 263,366 0.8
OTHER FINANCIAL
DCB Holdings Bhd. ......................................... MAL 75,000 256,931 0.8
BANKS-REGIONAL
Bank of East Asia Ltd. .................................... HK 45,793 203,682 0.6
BANKS-MONEY CENTER
Hang Seng Bank ............................................ HK 16,030 194,831 0.6
BANKS-MONEY CENTER
Empire East Land Holdings, Inc.-/- ........................ PHIL 100,000 45,697 0.1
REAL ESTATE
------------
14,464,761
------------
Consumer Durables (12.5%)
Gadek (Malaysia) Bhd. ..................................... MAL 300,000 2,281,189 7.0
AUTOMOBILES
Edaran Otomobil Nasional Bhd. ............................. MAL 178,000 1,780,000 5.4
AUTOMOBILES
</TABLE>
The accompanying notes are an integral part of the financial statements.
F43
<PAGE>
GT GLOBAL VARIABLE NEW PACIFIC FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Consumer Durables (Continued)
Samsung Electronics Co.: .................................. KOR -- -- 0.1
CONSUMER ELECTRONICS
GDR 1/2 Non-voting-/- {\/} .............................. -- 2,527 $ 30,324 --
144A GDR{.} -/- {\/} .................................... -- 258 10,385 --
Bonus - GDR 1/2 Voting-/- {\/} .......................... -- 77 1,964 --
------------
4,103,862
------------
Multi-Industry/Miscellaneous (9.6%)
Hutchison Whampoa ......................................... HK 225,000 1,767,358 5.4
MULTI-INDUSTRY
Citic Pacific Ltd. ........................................ HK 200,000 1,161,107 3.6
CONGLOMERATE
Korea Fund, Inc.{\/} ...................................... KOR 13,107 196,605 0.6
COUNTRY FUNDS
------------
3,125,070
------------
Services (9.4%)
Guangnan Holdings ......................................... HK 2,530,000 2,175,394 6.7
WHOLESALE & INTERNATIONAL TRADE
Waterfront Philippines, Inc.-/- ........................... PHIL 2,998,000 570,830 1.7
LEISURE & TOURISM
News Corp., Ltd. .......................................... AUSL 40,358 212,900 0.6
BROADCASTING & PUBLISHING
Philippine Long Distance Telephone Co. - ADR{\/} .......... PHIL 1,500 76,500 0.2
TELEPHONE - LONG DISTANCE
International Engineering PLC - Foreign ................... THAI 24,000 55,224 0.2
WIRELESS COMMUNICATIONS
------------
3,090,848
------------
Capital Goods (7.6%)
United Engineers Ltd.: .................................... MAL -- -- 4.3
CONSTRUCTION
Common .................................................. -- 150,300 1,357,164 --
Convertible Unsecured Loan Stock, 4% expires 5/22/99 .... -- 21,000 17,050 --
PWE Industries Bhd. ....................................... MAL 42,000 815,050 2.5
ELECTRICAL PLANT/EQUIPMENT
E.R.G. Ltd. ............................................... AUSL 200,264 254,566 0.8
ELECTRICAL PLANT/EQUIPMENT
------------
2,443,830
------------
Materials/Basic Industry (4.9%)
PT Semen Gresik - Foreign ................................. INDO 214,000 688,861 2.1
CEMENT
Western Mining Corporation Holdings Ltd. .................. AUSL 72,000 453,611 1.4
METALS - NON-FERROUS
Broken Hill Proprietary Co., Ltd. ......................... AUSL 21,164 301,310 0.9
MISC. MATERIALS & COMMODITIES
</TABLE>
The accompanying notes are an integral part of the financial statements.
F44
<PAGE>
GT GLOBAL VARIABLE NEW PACIFIC FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Materials/Basic Industry (Continued)
Siam Cement Co., Ltd. - Foreign ........................... THAI 5,000 $ 157,560 0.5
CEMENT
------------
1,601,342
------------
Energy (3.6%)
Oil Search Ltd. ........................................... AUSL 420,000 817,510 2.5
OIL
Belle Corp.-/- ............................................ PHIL 1,300,000 361,386 1.1
OIL
------------
1,178,896
------------
Consumer Non-Durables (3.2%)
First Sign International Holdings Ltd. .................... HK 1,900,000 608,029 1.9
TEXTILES & APPAREL
Chaifa Holdings Ltd. ...................................... HK 1,614,000 422,595 1.3
TEXTILES & APPAREL
------------
1,030,624
------------ -----
TOTAL EQUITY INVESTMENTS (cost $23,530,845) ................. 31,039,233 95.0
------------ -----
<CAPTION>
NO. OF VALUE % OF NET
WARRANTS COUNTRY WARRANTS (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Gadek (Malaysia) Bhd. Warrants, expire 12/19/00-/- ........ MAL 150,000 570,297 1.7
MISC. MATERIALS & COMMODITIES
Waterfront Philippines, Inc. Warrants, expire 5/3/99-/- ... PHIL 2,000,000 182,788 0.6
LEISURE & TOURISM
Petronas Gas Bhd. Warrants, expire 8/17/00-/- ............. MAL 35,000 71,386 0.2
GAS PRODUCTION & DISTRIBUTION
Straits Steamship Land Ltd. Warrants, expire
12/12/00-/- .............................................. SING 55,000 59,372 0.2
CONGLOMERATE
Development & Commercial Bank Warrants, expire
12/28/99-/- .............................................. MAL 37,500 56,436 0.2
BANKS-MONEY CENTER
------------ -----
TOTAL WARRANTS (cost $317,124) .............................. 940,279 2.9
------------ -----
</TABLE>
The accompanying notes are an integral part of the financial statements.
F45
<PAGE>
GT GLOBAL VARIABLE NEW PACIFIC FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
REPURCHASE AGREEMENT (NOTE 1) ASSETS
- ------------------------------------------------------------- ------------ -------------
<S> <C> <C> <C> <C>
Dated December 31, 1996, with State Street Bank & Trust
Co., due January 2, 1997, for an effective yield of 6.25%,
collateralized by $2,080,000 U.S. Treasury Notes, 6.125%
due 3/31/98 (market value of collateral is $2,123,925,
including accrued interest). (cost $2,081,361) ........... $ 2,081,361 6.4
------------ -----
TOTAL INVESTMENTS (cost $25,929,330) * ..................... 34,060,873 104.3
Other Assets and Liabilities ................................ (1,390,673) (4.3)
------------ -----
NET ASSETS .................................................. $ 32,670,200 100.0
------------ -----
------------ -----
</TABLE>
- --------------
{\/} 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 $26,082,315 and
appreciation (depreciation) is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $ 8,590,778
Unrealized depreciation: (612,220)
-------------
Net unrealized appreciation: $ 7,978,558
-------------
-------------
</TABLE>
Abbreviations:
ADR--American Depository Receipt
GDR--Global Depository Receipt
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at December 31, 1996, was concentrated in
the following countries:
<TABLE>
<CAPTION>
PERCENTAGE OF NET ASSETS {D}
-------------------------------------------
FIXED INCOME,
RIGHTS & SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE) EQUITY WARRANTS & OTHER TOTAL
- -------------------------------------- ------ ------------- ---------- -----
<S> <C> <C> <C> <C>
Australia (AUSL/AUD) ................. 6.2 6.2
Hong Kong (HK/HKD) ................... 44.3 44.3
Indonesia (INDO/IDR) ................. 3.8 3.8
Korea (KOR/KRW) ...................... 0.7 0.7
Malaysia (MAL/MYR) ................... 25.1 2.1 27.2
Philippines (PHIL/PHP) ............... 9.6 0.6 10.2
Singapore (SING/SGD) ................. 4.6 0.2 4.8
Thailand (THAI/THB) .................. 0.7 0.7
United States & Other (US/USD) ....... 2.1 2.1
------ --- --- -----
Total ............................... 95.0 2.9 2.1 100.0
------ --- --- -----
------ --- --- -----
</TABLE>
- --------------
{d} Percentages indicated are based on net assets of $32,670,200.
The accompanying notes are an integral part of the financial statements.
F46
<PAGE>
GT GLOBAL VARIABLE EUROPE FUND
PORTFOLIO OF INVESTMENTS
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Services (34.7%)
Reed International PLC .................................... UK 65,500 $ 1,239,340 5.1
BUSINESS & PUBLIC SERVICES
Koninklijke Ahold N.V.-/- ................................. NETH 13,130 821,576 3.4
RETAILERS-FOOD
Telecel - Comunicacaoes Pessoais, S.A.-/- ................. PORT 10,907 696,641 2.8
TELECOM - OTHER
M6 - Metropole Television ................................. FR 7,800 650,502 2.7
BROADCASTING & PUBLISHING
Stet Societa' Finanziaria Telefonica S.p.A.-/- ............ ITLY 123,900 563,725 2.3
TELEPHONE NETWORKS
Adecco S.A. ............................................... SWTZ 2,129 539,648 2.2
CONSUMER SERVICES
Sol Melia S.A.-/- ......................................... SPN 14,000 501,695 2.0
LEISURE & TOURISM
Galeries Lafayette-/- ..................................... FR 1,319 470,053 1.9
RETAILERS-OTHER
EMAP PLC .................................................. UK 36,200 456,529 1.9
BROADCASTING & PUBLISHING
Comptoirs Modernes ........................................ FR 838 452,973 1.8
RETAILERS-FOOD
Apcoa Parking AG .......................................... GER 4,160 446,294 1.8
CONSUMER SERVICES
Reuters Holdings PLC ...................................... UK 33,000 424,649 1.7
BROADCASTING & PUBLISHING
Assystem .................................................. FR 5,477 418,705 1.7
BUSINESS & PUBLIC SERVICES
Sodexho S.A. .............................................. FR 585 326,380 1.3
RESTAURANTS
Falck AS .................................................. DEN 900 269,045 1.1
CONSUMER SERVICES
Kuoni Reisen Holdings "B" - Registered .................... SWTZ 90 218,610 0.9
LEISURE & TOURISM
Kobenhavns Lufthavne AS ................................... DEN 165 16,815 0.1
TRANSPORTATION - AIRLINES
------------
8,513,180
------------
Health Care (11.0%)
Astra AB "A" Free ......................................... SWDN 19,800 979,450 4.0
PHARMACEUTICALS
Schering AG ............................................... GER 5,760 486,492 2.0
PHARMACEUTICALS
Nearmedic Ltd.-/- ......................................... ASTRI 2,952 422,727 1.7
PHARMACEUTICALS
Tamro OY AB ............................................... FIN 56,400 375,387 1.5
PHARMACEUTICALS
Biotest AG ................................................ GER 7,900 277,373 1.1
BIOTECHNOLOGY
M.L. Laboratories PLC-/- .................................. UK 52,200 182,342 0.7
PHARMACEUTICALS
------------
2,723,771
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F47
<PAGE>
GT GLOBAL VARIABLE EUROPE FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Materials/Basic Industry (10.4%)
SGL Carbon AG ............................................. GER 6,200 $ 782,055 3.2
METALS - NON-FERROUS
Bayer AG .................................................. GER 13,800 563,485 2.3
CHEMICALS
Castorama Dubois Investisse ............................... FR 3,100 534,421 2.2
BUILDING MATERIALS & COMPONENTS
Degussa AG ................................................ GER 780 353,231 1.4
MISC. MATERIALS & COMMODITIES
Saes Getters - di Risp .................................... ITLY 23,680 289,474 1.2
CHEMICALS
Nokian Renkaat Oy ......................................... FIN 800 17,227 0.1
MISC. MATERIALS & COMMODITIES
------------
2,539,893
------------
Finance (9.1%)
3I Group PLC .............................................. UK 63,000 525,360 2.1
OTHER FINANCIAL
Unidanmark AS "A" ......................................... DEN 9,100 471,423 1.9
BANKS-REGIONAL
Jyske Bank ................................................ DEN 6,060 455,980 1.9
BANKS-REGIONAL
M & G Group PLC ........................................... UK 17,000 321,661 1.3
INVESTMENT MANAGEMENT
Lloyds TSB Group PLC ...................................... UK 40,560 298,991 1.2
BANKS-REGIONAL
Invesco PLC ............................................... UK 32,700 145,022 0.6
INVESTMENT MANAGEMENT
Invesco Funding LLC - F/P-/- .............................. UK 6,540 29,004 0.1
OTHER FINANCIAL
------------
2,247,441
------------
Capital Goods (9.1%)
Cardo "AB" ................................................ SWDN 30,960 858,914 3.5
MACHINERY & ENGINEERING
Premier Farnell PLC ....................................... UK 58,126 747,476 3.1
INDUSTRIAL COMPONENTS
Altran Technologies S.A. .................................. FR 1,083 348,525 1.4
MACHINERY & ENGINEERING
Pricer AB-/- .............................................. SWDN 11,057 272,668 1.1
INDUSTRIAL COMPONENTS
------------
2,227,583
------------
Technology (7.8%)
TT Tieto Oy "B" ........................................... FIN 9,700 803,850 3.3
SOFTWARE
Dassault Systemes S.A.-/- ................................. FR 12,470 576,075 2.4
COMPUTERS & PERIPHERALS
</TABLE>
The accompanying notes are an integral part of the financial statements.
F48
<PAGE>
GT GLOBAL VARIABLE EUROPE FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Technology (Continued)
Group Axime-/- ............................................ FR 4,440 $ 514,286 2.1
COMPUTERS & PERIPHERALS
------------
1,894,211
------------
Consumer Non-Durables (7.7%)
Gucci Group - NY Registered Shares{\/} .................... ITLY 10,800 689,850 2.8
TEXTILES & APPAREL
Polygram .................................................. NETH 8,800 448,667 1.8
RECREATION
Vendex International N.V. ................................. NETH 8,569 366,888 1.5
OTHER CONSUMER GOODS
De Rigo S.p.A. - ADR-/- {\/} .............................. ITLY 18,000 164,250 0.7
TEXTILES & APPAREL
Eurobike AG-/- ............................................ GER 3,680 112,458 0.5
TEXTILES & APPAREL
Industrie Natuzzi S.p.A. - ADR{\/} ........................ ITLY 2,900 66,700 0.3
HOUSEHOLD PRODUCTS
Luxottica Group S.p.A. - ADR{\/} .......................... ITLY 400 20,800 0.1
OTHER CONSUMER GOODS
------------
1,869,613
------------
Multi-Industry/Miscellaneous (4.0%)
Oerlikon - Buehrle Holding AG-/- .......................... SWTZ 5,150 508,072 2.1
MULTI-INDUSTRY
Gehe AG ................................................... GER 7,300 467,523 1.9
MULTI-INDUSTRY
------------
975,595
------------
Consumer Durables (3.9%)
Valeo S.A. ................................................ FR 9,600 593,050 2.4
AUTO PARTS
Beers N.V. ................................................ NETH 10,500 374,131 1.5
AUTOMOBILES
------------
967,181
------------
Energy (3.1%)
Ente Nazionale Idrocarburi (ENI) S.p.A. ................... ITLY 149,200 768,454 3.1
OIL
------------ -----
TOTAL EQUITY INVESTMENTS (cost $20,558,111) ................. 24,726,922 100.8
------------ -----
</TABLE>
The accompanying notes are an integral part of the financial statements.
F49
<PAGE>
GT GLOBAL VARIABLE EUROPE FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NO. OF VALUE % OF NET
WARRANTS COUNTRY WARRANTS (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Sandoz AG Warrants, expire 9/26/97 (cost $209,964)-/- ..... SWTZ 6,850 $ 175,346 0.7
PHARMACEUTICALS
------------ -----
TOTAL INVESTMENTS (cost $20,768,075) * ..................... 24,902,268 101.5
Other Assets and Liabilities ................................ (365,219) (1.5)
------------ -----
NET ASSETS .................................................. $ 24,537,049 100.0
------------ -----
------------ -----
</TABLE>
- --------------
-/- Non-income producing security.
{\/} U.S. currency denominated.
* For Federal income tax purposes, cost is $20,860,702 and
appreciation (depreciation) is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $ 4,431,340
Unrealized depreciation: (389,774)
-------------
Net unrealized appreciation: $ 4,041,566
-------------
-------------
</TABLE>
Abbreviation:
ADR--American Depository Receipt
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at December 31, 1996, was concentrated in
the following countries:
<TABLE>
<CAPTION>
PERCENTAGE OF NET ASSETS {D}
-------------------------------------------
COUNTRY (COUNTRY CODE/CURRENCY CODE) EQUITY WARRANTS OTHER TOTAL
- -------------------------------------- ------ ------------- ---------- -----
<S> <C> <C> <C> <C>
Austria (ASTRI/ATS) .................. 1.7 1.7
Denmark (DEN/DKK) .................... 5.0 5.0
Finland (FIN/FIM) .................... 4.9 4.9
France (FR/FRF) ...................... 19.9 19.9
Germany (GER/DEM) .................... 14.2 14.2
Italy (ITLY/ITL) ..................... 10.5 10.5
Netherlands (NETH/NLG) ............... 8.2 8.2
Portugal (PORT/PTE) .................. 2.8 2.8
Spain (SPN/ESP) ...................... 2.0 2.0
Sweden (SWDN/SEK) .................... 8.6 8.6
Switzerland (SWTZ/CHF) ............... 5.2 0.7 5.9
United Kingdom (UK/GBP) .............. 17.8 17.8
United States & Other (US/USD) ....... (1.5) (1.5)
------ ----- ----- -----
Total ............................... 100.8 0.7 (1.5) 100.0
------ ----- ----- -----
------ ----- ----- -----
</TABLE>
- --------------
{d} Percentages indicated are based on net assets of $24,537,049.
The accompanying notes are an integral part of the financial statements.
F50
<PAGE>
GT GLOBAL MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MATURITY PRINCIPAL VALUE % OF NET
SHORT-TERM INVESTMENTS YIELD DATE AMOUNT (NOTE 1) ASSETS
- ----------------------------------------------------------------- --------- --------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Commercial Paper - Discounted (37.2%)
Merrill Lynch & Co., Inc ...................................... 6.60% 02-Jan-97 750,000 $ 749,864 3.8
Coca Cola Co. ................................................. 5.31% 10-Jan-97 700,000 699,076 3.6
Schering Corp. ................................................ 5.35% 08-Apr-97 700,000 690,079 3.5
Transamerica Finance Corp. .................................... 5.42% 27-Jun-97 700,000 681,897 3.5
General Electric Capital Corp. ................................ 5.37% 09-Jan-97 600,000 599,293 3.0
Toronto - Dominion Holdings USA, Inc. ......................... 5.31% 13-Jan-97 600,000 598,948 3.0
AIG Funding, Inc. ............................................. 5.30% 15-Jan-97 600,000 598,770 3.0
Motorola, Inc. ................................................ 5.31% 17-Jan-97 600,000 598,605 3.0
Metlife Funding, Inc. ......................................... 5.35% 17-Jan-97 600,000 598,587 3.0
Ford Motor Credit Corp. ....................................... 5.55% 17-Jan-97 600,000 598,547 3.0
E.I. DuPont de Nemours & Co. .................................. 5.33% 30-Jan-97 600,000 597,448 3.0
Bear Stearns Cos., Inc. ....................................... 5.46% 18-Feb-97 350,000 347,503 1.8
------------ -----
Total Commercial Paper - Discounted (amortized cost
$7,358,617) .................................................... 7,358,617 37.2
------------ -----
Treasury Bills (12.6%)
United States Treasury Bills .................................. 5.04% 16-Jan-97 2,500,000 2,494,812 12.6
------------ -----
Total Treasury Bills (amortized cost $2,494,812) ................ 2,494,812 12.6
------------ -----
Government & Government Agency Obligations (12.5%)
Federal Home Loan Mortgage Corp. .............................. 5.29% 10-Mar-97 700,000 693,098 3.5
Federal Home Loan Bank ........................................ 5.24% 24-Mar-97 700,000 691,773 3.5
International Bank of Reconstruction and Development (World
Bank) ........................................................ 5.62% 18-Feb-97 600,000 595,640 3.0
Federal National Mortgage Association ......................... 5.47% 13-Feb-97 500,000 499,955 2.5
------------ -----
Total Government & Government Agency Obligations (amortized cost
$2,480,466) .................................................... 2,480,466 12.5
------------ -----
Medium-Term Notes (4.3%)
Morgan Stanley Group, Inc.+ ................................... 5.62% 26-Aug-97 600,000 600,000 3.0
Bear Stearns Cos., Inc.+ ...................................... 5.89% 14-Nov-97 250,000 250,000 1.3
------------ -----
Total Medium-Term Notes (amortized cost $850,000) ............... 850,000 4.3
------------ -----
TOTAL SHORT-TERM INVESTMENTS (cost $13,183,895) ................. 13,183,895 66.6
------------ -----
<CAPTION>
VALUE % OF NET
REPURCHASE AGREEMENT (NOTE 1) ASSETS
- ----------------------------------------------------------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Dated December 31, 1996, with State Street Bank & Trust Co.,
due January 2, 1997, for an effective yield of 6.25%,
collateralized by $3,715,000 U.S. Treasury Notes, 6.125% due
3/31/98 (market value of collateral is $3,793,454, including
accrued interest).
(cost $3,717,645) ........................................... 3,717,645 18.8
------------ -----
TOTAL SHORT-TERM INVESTMENTS (cost $16,901,540) * .............. 16,901,540 85.4
Other Assets and Liabilities .................................... 2,892,520 14.6
------------ -----
NET ASSETS ...................................................... $ 19,794,060 100.0
------------ -----
------------ -----
</TABLE>
- --------------
+ The coupon rate shown on floating rate note represents the rate at
period end.
* For Federal income tax purposes, cost is $16,901,540
The accompanying notes are an integral part of the financial statements.
F51
<PAGE>
GT GLOBAL VARIABLE INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Services (26.3%)
DDI Corp. ................................................. JPN 14 $ 92,640 1.9
WIRELESS COMMUNICATIONS
Amway Japan Ltd. .......................................... JPN 2,600 83,552 1.7
RETAILERS-OTHER
Aoyama Trading Co., Ltd. .................................. JPN 3,000 79,820 1.7
RETAILERS-APPAREL
Koninklijke Ahold N.V.-/- ................................. NETH 1,200 75,087 1.6
RETAILERS-FOOD
Elsevier N.V. ............................................. NETH 4,100 69,363 1.5
BROADCASTING & PUBLISHING
Carrefour Supermarche ..................................... FR 105 68,432 1.4
RETAILERS-FOOD
Vodafone Group PLC ........................................ UK 15,127 63,979 1.3
WIRELESS COMMUNICATIONS
Addeco - Bearer-/- ........................................ SWTZ 230 57,758 1.2
CONSUMER SERVICES
Fielmann AG Preferred ..................................... GER 1,800 56,177 1.2
RETAILERS-OTHER
Portugal Telecom S.A. - Registered-/- ..................... PORT 1,930 55,036 1.2
TELEPHONE NETWORKS
Compass Group PLC ......................................... UK 5,000 53,082 1.1
RESTAURANTS
Sol Melia S.A.-/- ......................................... SPN 1,460 52,320 1.1
LEISURE & TOURISM
Stet Societa' Finanziaria Telefonica S.p.A.-/- ............ ITLY 11,000 50,048 1.0
TELEPHONE NETWORKS
Telecom Corporation of New Zealand Ltd. - ADR{\/} ......... NZ 600 48,600 1.0
TELEPHONE NETWORKS
Burton Group PLC .......................................... UK 17,350 46,346 1.0
RETAILERS-APPAREL
Rentokil Group PLC ........................................ UK 6,000 45,308 0.9
CONSUMER SERVICES
Cordiant PLC-/- ........................................... UK 25,000 44,735 0.9
BROADCASTING & PUBLISHING
Hotel Properties Ltd. ..................................... SING 26,000 42,007 0.9
LEISURE & TOURISM
International CableTel, Inc.-/-{\/} ....................... UK 1,500 37,875 0.8
CABLE TELEVISION
Telecom Italia Mobile S.p.A. - Di Risp .................... ITLY 20,000 29,056 0.6
TELEPHONE NETWORKS
PMP Communications Ltd. ................................... AUSL 10,000 27,012 0.6
BROADCASTING & PUBLISHING
Fast Retailing Co., Ltd. .................................. JPN 1,040 26,683 0.6
RETAILERS-APPAREL
Woolworths Ltd. ........................................... AUSL 10,500 25,276 0.5
RETAILERS-OTHER
Nissen Co. ................................................ JPN 2,800 19,592 0.4
RETAILERS-OTHER
Telecel - Comunicacaoes Pessoais, S.A.-/- ................. PORT 170 10,858 0.2
TELECOM - OTHER
</TABLE>
The accompanying notes are an integral part of the financial statements.
F52
<PAGE>
GT GLOBAL VARIABLE INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Services (Continued)
Dixons Group PLC .......................................... UK 146 $ 1,358 --
RETAILERS-OTHER
------------
1,262,000
------------
Capital Goods (17.0%)
General Electric PLC-/- ................................... UK 37,670 247,048 5.2
AEROSPACE/DEFENSE
Siebe PLC ................................................. UK 7,063 131,101 2.7
INDUSTRIAL COMPONENTS
Telefonaktiebolaget LM Ericsson "B" ....................... SWDN 2,640 81,766 1.7
TELECOM EQUIPMENT
Murata Manufacturing Co., Ltd. ............................ JPN 2,000 66,517 1.4
ELECTRICAL PLANT/EQUIPMENT
Canon, Inc. ............................................... JPN 3,000 66,344 1.4
OFFICE EQUIPMENT
Premier Farnell PLC ....................................... UK 4,500 57,868 1.2
INDUSTRIAL COMPONENTS
Smiths Industries PLC ..................................... UK 4,100 56,305 1.2
AEROSPACE/DEFENSE
NBM-Amstelland N.V. ....................................... NETH 2,376 48,456 1.0
CONSTRUCTION
British Aerospace PLC ..................................... UK 1,700 37,260 0.8
AEROSPACE/DEFENSE
Cheung Kong Infrastructure Holdings-/- .................... HK 6,000 15,904 0.3
CONSTRUCTION
Kurita Water Industries ................................... JPN 200 4,043 0.1
ELECTRICAL PLANT/EQUIPMENT
------------
812,612
------------
Finance (13.9%)
Nichiei Co., Ltd. ......................................... JPN 1,000 73,860 1.5
INVESTMENT MANAGEMENT
Axa Group ................................................. FR 1,142 72,753 1.5
INSURANCE - MULTI-LINE
Peregrine Investment Holdings Ltd. ........................ HK 40,000 68,529 1.4
INVESTMENT MANAGEMENT
Invesco PLC ............................................... UK 10,500 46,567 1.0
INVESTMENT MANAGEMENT
LLoyds TSB Group PLC ...................................... UK 6,300 46,441 1.0
BANKS-REGIONAL
Norbanken AB-/- ........................................... SWDN 1,500 45,467 1.0
BANKS-REGIONAL
Amoy Properties Ltd. ...................................... HK 31,000 44,692 0.9
REAL ESTATE
Sparbanken Sverige AB "A" ................................. SWDN 2,500 42,935 0.9
INVESTMENT MANAGEMENT
Bank of Montreal .......................................... CAN 1,300 41,396 0.9
BANKS-REGIONAL
PT Bank Internasional Indonesia - Foreign ................. INDO 41,386 40,755 0.9
BANKS-MONEY CENTER
</TABLE>
The accompanying notes are an integral part of the financial statements.
F53
<PAGE>
GT GLOBAL VARIABLE INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Finance (Continued)
Henderson Land Development Co., Ltd. ...................... HK 4,000 $ 40,341 0.8
REAL ESTATE
Bangkok Bank Co., Ltd. - Foreign .......................... THAI 4,000 38,688 0.8
BANKS-MONEY CENTER
Diamond Lease Co., Ltd. ................................... JPN 3,000 38,096 0.8
OTHER FINANCIAL
Siam City Bank Ltd. - Foreign ............................. THAI 16,500 15,444 0.3
BANKS-REGIONAL
Invesco Funding LLC-/- .................................... UK 2,100 9,313 0.2
OTHER FINANCIAL
------------
665,277
------------
Health Care (12.6%)
Novartis AG-/- ............................................ SWTZ 95 108,845 2.3
PHARMACEUTICALS
Takeda Chemical Industries ................................ JPN 5,000 104,959 2.2
PHARMACEUTICALS
Astra AB "B" Free ......................................... SWDN 1,730 83,547 1.7
PHARMACEUTICALS
Schering AG ............................................... GER 880 74,325 1.6
PHARMACEUTICALS
Bayer AG .................................................. GER 1,450 59,207 1.2
PHARMACEUTICALS
Sanofi S.A. ............................................... FR 540 53,792 1.1
PHARMACEUTICALS
Zeneca Group PLC .......................................... UK 1,900 53,600 1.1
PHARMACEUTICALS
Siemens AG - New-/- ....................................... GER 900 42,425 0.9
MEDICAL TECHNOLOGY & SUPPLIES
M.L. Laboratories PLC-/- .................................. UK 7,430 25,954 0.5
PHARMACEUTICALS
------------
606,654
------------
Consumer Non-Durables (8.4%)
Hoya Corp. ................................................ JPN 3,000 117,916 2.5
OTHER CONSUMER GOODS
Gucci Group - NY Registered Shares{\/} .................... ITLY 1,800 114,975 2.4
TEXTILES & APPAREL
Parmalat Finanziaria S.p.A. ............................... ITLY 36,000 55,129 1.2
FOOD
Giordano International Ltd. ............................... HK 54,000 46,082 1.0
TEXTILES & APPAREL
PT Hanjaya Mandala Sampoerna .............................. INDO 7,000 37,357 0.8
TOBACCO
EMAIL Ltd. ................................................ AUSL 8,000 25,868 0.5
HOUSEHOLD PRODUCTS
------------
397,327
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F54
<PAGE>
GT GLOBAL VARIABLE INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Materials/Basic Industry (7.6%)
Kimberly-Clark de Mexico, S.A. de C.V. "A" ................ MEX 5,000 $ 98,831 2.1
PAPER/PACKAGING
Zag Industries Ltd.-/-{\/} ................................ ISRL 4,000 66,000 1.4
MISC. MATERIALS & COMMODITIES
SGL Carbon AG ............................................. GER 400 50,455 1.1
METALS - NON-FERROUS
Broken Hill Proprietary Co., Ltd. ......................... AUSL 2,000 28,474 0.6
MISC. MATERIALS & COMMODITIES
QNI Ltd. .................................................. AUSL 14,000 28,140 0.6
METALS - NON-FERROUS
Fletcher Challenge Paper .................................. NZ 13,000 26,543 0.6
PAPER/PACKAGING
Pohang Iron & Steel Co., Ltd.-/- .......................... KOR 450 26,124 0.5
METALS - STEEL
Leighton Holdings Ltd. .................................... AUSL 6,000 25,741 0.5
BUILDING MATERIALS & COMPONENTS
TPI Polene Co., Ltd. - Foreign ............................ THAI 5,250 9,664 0.2
CHEMICALS
------------
359,972
------------
Multi-Industry/Miscellaneous (3.4%)
Pricer AB-/- .............................................. SWDN 2,594 63,969 1.3
MISCELLANEOUS
Parkway Holdings Ltd. ..................................... SING 13,000 51,115 1.1
MULTI-INDUSTRY
Keppel Corp., Ltd. ........................................ SING 3,000 23,377 0.5
CONGLOMERATE
Wrightson Ltd. ............................................ NZ 25,000 21,728 0.5
MULTI-INDUSTRY
------------
160,189
------------
Energy (2.8%)
Petroleo Brasileiro S.A. (Petrobras) - ADR-/- {\/} ........ BRZL 3,000 46,500 1.0
GAS PRODUCTION & DISTRIBUTION
Astec (BSR) PLC ........................................... UK 17,300 46,485 1.0
ENERGY EQUIPMENT & SERVICES
China Light & Power Co., Ltd. ............................. HK 8,500 37,807 0.8
ELECTRICAL & GAS UTILITIES
------------
130,792
------------
Consumer Durables (2.6%)
Volkswagen AG ............................................. GER 170 70,741 1.5
AUTOMOBILES
Sharp Corp. ............................................... JPN 3,000 42,761 0.9
CONSUMER ELECTRONICS
</TABLE>
The accompanying notes are an integral part of the financial statements.
F55
<PAGE>
GT GLOBAL VARIABLE INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Consumer Durables (Continued)
Samsung Electronics Co.: .................................. KOR -- -- 0.2
CONSUMER ELECTRONICS
GDR-/- {\/} ............................................. -- 598 $ 10,764 --
1/2 Non-voting GDR-/- {\/} .............................. -- 180 2,160 --
144A GDR{.} -/- {\/} .................................... -- 34 1,369 --
1/2 Voting GDR-/- {\/} .................................. -- 10 255 --
------------
128,050
------------
Technology (2.0%)
Koei Co., Ltd. ............................................ JPN 2,500 47,944 1.0
SOFTWARE
Group Axime-/- ............................................ FR 400 46,332 1.0
COMPUTERS & PERIPHERALS
------------
94,276
------------ -----
TOTAL EQUITY INVESTMENTS (cost $4,312,269) .................. 4,617,149 96.6
------------ -----
<CAPTION>
NO. OF VALUE % OF NET
WARRANTS COUNTRY WARRANTS (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Peregrine Investment Holdings Ltd. Warrants, expire 5/15/98
(cost $0)-/- ............................................. HK 4,000 1,280 --
INVESTMENT MANAGEMENT
------------ -----
TOTAL INVESTMENTS (cost $4,312,269) * ...................... 4,618,429 96.6
Other Assets and Liabilities ................................ 163,419 3.4
------------ -----
NET ASSETS .................................................. $ 4,781,848 100.0
------------ -----
------------ -----
</TABLE>
- --------------
-/- 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 $4,324,828 and
appreciation (depreciation) is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $ 593,220
Unrealized depreciation: (299,619)
-------------
Net unrealized appreciation: $ 293,601
-------------
-------------
</TABLE>
Abbreviations:
ADR--American Depository Receipt
GDR--Global Depository Receipt
The accompanying notes are an integral part of the financial statements.
F56
<PAGE>
GT GLOBAL VARIABLE INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at December 31, 1996, was concentrated in
the following countries:
<TABLE>
<CAPTION>
PERCENTAGE OF NET ASSETS {D}
------------------------------
COUNTRY (COUNTRY CODE/CURRENCY CODE) EQUITY OTHER TOTAL
- -------------------------------------- ------ ------------- -----
<S> <C> <C> <C>
Australia (AUSL/AUD) ................. 3.3 3.3
Brazil (BRZL/BRL) .................... 1.0 1.0
Canada (CAN/CAD) ..................... 0.9 0.9
France (FR/FRF) ...................... 5.0 5.0
Germany (GER/DEM) .................... 7.5 7.5
Hong Kong (HK/HKD) ................... 5.2 5.2
Indonesia (INDO/IDR) ................. 1.7 1.7
Israel (ISRL/ILS) .................... 1.4 1.4
Italy (ITLY/ITL) ..................... 5.2 5.2
Japan (JPN/JPY) ...................... 18.1 18.1
Korea (KOR/KRW) ...................... 0.7 0.7
Mexico (MEX/MXN) ..................... 2.1 2.1
Netherlands (NETH/NLG) ............... 4.1 4.1
New Zealand (NZ/NZD) ................. 2.1 2.1
Portugal (PORT/PTE) .................. 1.4 1.4
Singapore (SING/SGD) ................. 2.5 2.5
Spain (SPN/ESP) ...................... 1.1 1.1
Sweden (SWDN/SEK) .................... 6.6 6.6
Switzerland (SWTZ/CHF) ............... 3.5 3.5
Thailand (THAI/THB) .................. 1.3 1.3
United Kingdom (UK/GBP) .............. 21.9 21.9
Other................ ................ 3.4 3.4
------ --- -----
Total ............................... 96.6 3.4 100.0
------ --- -----
------ --- -----
</TABLE>
- --------------
{d} Percentages indicated are based on net assets of $4,781,848.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
DECEMBER 31, 1996
<TABLE>
<CAPTION>
MARKET VALUE CONTRACT DELIVERY UNREALIZED
CONTRACTS TO SELL: (U.S. DOLLARS) PRICE DATE APPRECIATION
- ---------------------------------------- -------------- ----------- -------- --------------
<S> <C> <C> <C> <C>
French Francs........................... 58,045 5.09700 02/06/97 $ 813
French Francs........................... 67,768 5.07000 02/19/97 1,266
Japanese Yen............................ 62,198 109.99999 01/07/97 3,257
Japanese Yen............................ 88,589 111.74500 02/06/97 2,690
Japanese Yen............................ 28,684 110.40002 02/12/97 1,207
Japanese Yen............................ 181,668 110.48000 02/12/97 7,507
Swiss Francs............................ 33,904 1.31200 03/19/97 395
-------------- --------------
Total Contracts to Sell (Receivable
amount $537,991)..................... 520,856 17,135
-------------- --------------
THE VALUE OF CONTRACTS TO SELL AS
PERCENTAGE OF NET ASSETS IS 10.89%.
Total Open Forward Foreign Currency
Contracts............................ $ 17,135
--------------
--------------
</TABLE>
- ----------------
See Note 1 to the financial statements.
The accompanying notes are an integral part of the financial statements.
F57
<PAGE>
GT GLOBAL VARIABLE INVESTMENT FUNDS
STATEMENTS OF ASSETS
AND LIABILITIES
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GT GLOBAL
-------------------------------------------------
VARIABLE VARIABLE
VARIABLE GLOBAL U.S. VARIABLE
STRATEGIC GOVERNMENT GOVERNMENT LATIN
INCOME INCOME INCOME AMERICA
FUND FUND FUND FUND
---------- ---------- ------------- ----------
<S> <C> <C> <C> <C>
Assets:
Investments in securities: (Note 1)
At identified cost.................. $27,042,841 $9,594,616 $5,289,663 $21,197,534
---------- ---------- ------------- ----------
---------- ---------- ------------- ----------
At value............................ $29,094,442 $9,800,840 $5,285,366 $21,715,194
Repurchase agreement, at value and
cost (Note 1)........................ 2,951,512 52,009 27,005 --
U.S. currency......................... 9,975 254 752 153,753
Foreign currencies (cost $9,902;
$6,763; $0; $254,956; $9,189; $114;
$0; $62,133; $50,152; $0; $11,455;
$929,692; $0; $331,686,
respectively)........................ 10,015 6,764 -- 253,450
Dividends and dividend withholding tax
reclaims receivable.................. -- -- -- 7,434
Interest and interest withholding tax
reclaims receivable.................. 643,653 301,107 116,284 --
Receivable for Fund shares sold....... 29,228 381 55,298 290,344
Receivable for initial & variation
margin (Note 1)...................... -- 3,600 16,650 25,000
Receivable for open forward foreign
currency contracts, net (Note 1)..... 46,177 54,373 2,608 --
Receivable for securities sold........ 485,963 220,051 -- 826,793
Unamortized organizational costs (Note
1)................................... 6,984 6,984 6,984 6,984
Miscellaneous receivable.............. -- -- -- 2,398
Cash held as collateral for securities
loaned (Note 1)...................... 2,082,839 2,625,278 -- 512,900
---------- ---------- ------------- ----------
Total assets........................ 35,360,788 13,071,641 5,510,947 23,794,250
---------- ---------- ------------- ----------
Liabilities:
Payable for loan outstanding (Note
1)................................... -- -- -- --
Distribution payable (Note 1)......... -- -- -- --
Payable for custodian fees (Note 1)... 3,614 150 1,018 644
Payable for forward foreign currency
contracts -- closed (Note 1)......... -- 13,962 -- --
Payable for fund accounting fees (Note
2)................................... 607 204 107 439
Payable for Fund shares repurchased... 1,237,459 359 350 4,641
Payable for investment management and
administration fees (Note 2)......... 39,729 2,995 -- 40,855
Payable for printing and postage
expenses............................. 10,953 13,109 15,061 11,170
Payable for professional fees......... 15,496 11,753 7,108 13,736
Payable for registration and filing
fees................................. 64 964 965 965
Payable for securities purchased...... 249,763 -- -- 275,907
Payable for Trustees' fees and
expenses (Note 2).................... 1,701 2,404 1,815 1,713
Payable for variation margin (Note
1)................................... -- 1,122 -- --
Other accrued expenses................ 642 1,972 1,597 3,627
Collateral for securities loaned (Note
1)................................... 2,082,839 2,625,278 -- 512,900
---------- ---------- ------------- ----------
Total liabilities................... 3,642,867 2,674,272 28,021 866,597
---------- ---------- ------------- ----------
Net assets.............................. $31,717,921 $10,397,369 $5,482,926 $22,927,653
---------- ---------- ------------- ----------
---------- ---------- ------------- ----------
Shares outstanding...................... 2,370,983 909,292 480,489 1,549,190
Net asset value per share............... $ 13.38 $ 11.43 $ 11.41 $ 14.80
---------- ---------- ------------- ----------
---------- ---------- ------------- ----------
Net assets consist of:
Paid in capital (Note 4).............. $31,469,300 $10,919,335 $5,435,790 $25,957,235
Undistributed/Accumulated net
investment income (loss)............. 461,426 427,910 21,121 --
Accumulated net realized gain (loss)
on investments and foreign currency
transactions......................... (2,308,126) (1,209,346) 25,209 (3,538,441)
Net unrealized appreciation
(depreciation) on translation of
assets and liabilities in foreign
currencies........................... 43,720 54,383 2,603 (2,051)
Net unrealized appreciation
(depreciation) of investments........ 2,051,601 205,087 (1,797) 510,910
---------- ---------- ------------- ----------
Total -- representing net assets
applicable to capital shares
outstanding............................ $31,717,921 $10,397,369 $5,482,926 $22,927,653
---------- ---------- ------------- ----------
---------- ---------- ------------- ----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F58
<PAGE>
GT GLOBAL VARIABLE INVESTMENT FUNDS
STATEMENTS OF ASSETS
AND LIABILITIES (cont'd)
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GT GLOBAL
-----------------------------------------------------------------------------------
VARIABLE VARIABLE VARIABLE VARIABLE VARIABLE
GROWTH & TELECOM- EMERGING VARIABLE NATURAL VARIABLE NEW
INCOME MUNICATIONS MARKETS INFRASTRUCTURE RESOURCES AMERICA PACIFIC
FUND FUND FUND FUND FUND FUND FUND
---------- ---------- ---------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments in securities: (Note 1)
At identified cost.................. $27,955,926 $55,839,502 $14,294,997 $5,102,840 $12,137,699 $32,982,916 $23,847,969
---------- ---------- ---------- ----------- ---------- ---------- ----------
---------- ---------- ---------- ----------- ---------- ---------- ----------
At value............................ $34,821,191 $61,788,028 $15,315,268 $5,326,153 $13,959,560 $38,249,964 $31,979,512
Repurchase agreement, at value and
cost (Note 1)........................ 1,156,201 982,170 2,981,518 740,128 2,441,424 3,375,586 2,081,361
U.S. currency......................... 46 142 80 337 930 497 661
Foreign currencies (cost $9,902;
$6,763; $0; $254,956; $9,189; $114;
$0; $62,133; $50,152; $0; $11,455;
$929,692; $0; $331,686,
respectively)........................ 9,205 114 -- 62,394 48,489 -- 10,690
Dividends and dividend withholding tax
reclaims receivable.................. 81,774 43,179 5,968 7,445 -- 29,580 35,242
Interest and interest withholding tax
reclaims receivable.................. 248,848 -- -- -- -- -- --
Receivable for Fund shares sold....... 11,452 586,347 767 19,350 38,162 78,876 298,514
Receivable for initial & variation
margin (Note 1)...................... -- -- -- -- -- -- --
Receivable for open forward foreign
currency contracts, net (Note 1)..... 36,828 25,073 -- -- -- -- --
Receivable for securities sold........ 132,705 -- -- -- 7,106 106,451 183,491
Unamortized organizational costs (Note
1)................................... 6,984 11,273 -- -- -- 6,984 6,984
Miscellaneous receivable.............. 28 -- 1,256 217 -- -- 1,820
Cash held as collateral for securities
loaned (Note 1)...................... 3,009,362 3,293,000 14,400 151,200 330,600 1,695,100 3,588,044
---------- ---------- ---------- ----------- ---------- ---------- ----------
Total assets........................ 39,514,624 66,729,326 18,319,257 6,307,224 16,826,271 43,543,038 38,186,319
---------- ---------- ---------- ----------- ---------- ---------- ----------
Liabilities:
Payable for loan outstanding (Note
1)................................... -- -- -- -- -- -- --
Distribution payable (Note 1)......... -- -- -- -- -- -- --
Payable for custodian fees (Note 1)... 1,832 3,240 17,598 2,152 2,233 4,490 2,166
Payable for forward foreign currency
contracts -- closed (Note 1)......... -- -- -- -- -- -- --
Payable for fund accounting fees (Note
2)................................... 700 2,295 334 118 309 838 665
Payable for Fund shares repurchased... 30 19,698 522,616 10,850 21,301 144,476 1,841,743
Payable for investment management and
administration fees (Note 2)......... 41,954 52,933 22,609 85 27,211 23,729 58,019
Payable for printing and postage
expenses............................. 10,323 12,603 11,154 14,050 14,071 11,277 10,007
Payable for professional fees......... 15,956 13,625 10,607 10,891 9,773 13,765 13,661
Payable for registration and filing
fees................................. 129 334 142 697 698 959 75
Payable for securities purchased...... -- 50,566 110,000 59,049 109,500 -- --
Payable for Trustees' fees and
expenses (Note 2).................... 1,566 1,537 3,092 2,457 2,594 1,511 1,516
Payable for variation margin (Note
1)................................... -- -- -- -- -- -- --
Other accrued expenses................ 9 21,666 2,781 1,705 28 284 223
Collateral for securities loaned (Note
1)................................... 3,009,362 3,293,000 14,400 151,200 330,600 1,695,100 3,588,044
---------- ---------- ---------- ----------- ---------- ---------- ----------
Total liabilities................... 3,081,861 3,471,497 715,333 253,254 518,318 1,896,429 5,516,119
---------- ---------- ---------- ----------- ---------- ---------- ----------
Net assets.............................. $36,432,763 $63,257,829 $17,603,924 $6,053,970 $16,307,953 $41,646,609 $32,670,200
---------- ---------- ---------- ----------- ---------- ---------- ----------
---------- ---------- ---------- ----------- ---------- ---------- ----------
Shares outstanding...................... 2,206,150 3,488,076 1,234,282 367,560 777,307 2,112,869 1,812,998
Net asset value per share............... $ 16.51 $ 18.14 $ 14.26 $ 16.47 $ 20.98 $ 19.71 $ 18.02
---------- ---------- ---------- ----------- ---------- ---------- ----------
---------- ---------- ---------- ----------- ---------- ---------- ----------
Net assets consist of:
Paid in capital (Note 4).............. $29,649,056 $49,539,563 $15,220,114 $5,354,662 $13,806,302 $34,829,411 $24,962,501
Undistributed/Accumulated net
investment income (loss)............. 745,652 -- 83,731 45,357 -- 196,399 163,089
Accumulated net realized gain (loss)
on investments and foreign currency
transactions......................... (868,301) 7,745,096 1,277,173 430,634 681,472 1,353,751 (586,837)
Net unrealized appreciation
(depreciation) on translation of
assets and liabilities in foreign
currencies........................... 41,091 24,644 2,635 4 (1,682) -- (96)
Net unrealized appreciation
(depreciation) of investments........ 6,865,265 5,948,526 1,020,271 223,313 1,821,861 5,267,048 8,131,543
---------- ---------- ---------- ----------- ---------- ---------- ----------
Total -- representing net assets
applicable to capital shares
outstanding............................ $36,432,763 $63,257,829 $17,603,924 $6,053,970 $16,307,953 $41,646,609 $32,670,200
---------- ---------- ---------- ----------- ---------- ---------- ----------
---------- ---------- ---------- ----------- ---------- ---------- ----------
<CAPTION>
VARIABLE MONEY VARIABLE
EUROPE MARKET INTERNATIONAL
FUND FUND FUND
---------- ---------- -----------
<S> <C> <C> <C>
Assets:
Investments in securities: (Note 1)
At identified cost.................. $20,768,075 $13,183,895 $4,312,269
---------- ---------- -----------
---------- ---------- -----------
At value............................ $24,902,268 $13,183,895 $4,618,429
Repurchase agreement, at value and
cost (Note 1)........................ -- 3,717,645 --
U.S. currency......................... 985 160 47,661
Foreign currencies (cost $9,902;
$6,763; $0; $254,956; $9,189; $114;
$0; $62,133; $50,152; $0; $11,455;
$929,692; $0; $331,686,
respectively)........................ 942,215 -- 336,085
Dividends and dividend withholding tax
reclaims receivable.................. 32,516 -- 2,619
Interest and interest withholding tax
reclaims receivable.................. -- 12,813 --
Receivable for Fund shares sold....... 141,981 3,616,093 3,103
Receivable for initial & variation
margin (Note 1)...................... -- -- --
Receivable for open forward foreign
currency contracts, net (Note 1)..... -- -- 17,135
Receivable for securities sold........ 235,058 -- 119,198
Unamortized organizational costs (Note
1)................................... 6,984 6,984 --
Miscellaneous receivable.............. 2,725 -- --
Cash held as collateral for securities
loaned (Note 1)...................... 1,859,691 -- 37,400
---------- ---------- -----------
Total assets........................ 28,124,423 20,537,590 5,181,630
---------- ---------- -----------
Liabilities:
Payable for loan outstanding (Note
1)................................... 239,000 -- --
Distribution payable (Note 1)......... -- 77,247 --
Payable for custodian fees (Note 1)... 4,518 1,616 2,966
Payable for forward foreign currency
contracts -- closed (Note 1)......... -- -- --
Payable for fund accounting fees (Note
2)................................... 479 390 94
Payable for Fund shares repurchased... 558,699 619,060 106,327
Payable for investment management and
administration fees (Note 2)......... 49,361 23,866 57
Payable for printing and postage
expenses............................. 12,039 9,288 11,817
Payable for professional fees......... 13,240 10,699 11,977
Payable for registration and filing
fees................................. 959 591 75
Payable for securities purchased...... 848,135 -- 225,661
Payable for Trustees' fees and
expenses (Note 2).................... 559 254 2,621
Payable for variation margin (Note
1)................................... -- -- --
Other accrued expenses................ 694 519 787
Collateral for securities loaned (Note
1)................................... 1,859,691 -- 37,400
---------- ---------- -----------
Total liabilities................... 3,587,374 743,530 399,782
---------- ---------- -----------
Net assets.............................. $24,537,049 $19,794,060 $4,781,848
---------- ---------- -----------
---------- ---------- -----------
Shares outstanding...................... 1,149,548 19,794,060 401,631
Net asset value per share............... $ 21.34 $ 1.00 $ 11.91
---------- ---------- -----------
---------- ---------- -----------
Net assets consist of:
Paid in capital (Note 4).............. $18,097,291 $19,794,060 $4,559,117
Undistributed/Accumulated net
investment income (loss)............. 67,215 -- 6,759
Accumulated net realized gain (loss)
on investments and foreign currency
transactions......................... 2,235,969 -- (106,863)
Net unrealized appreciation
(depreciation) on translation of
assets and liabilities in foreign
currencies........................... 2,381 -- 16,675
Net unrealized appreciation
(depreciation) of investments........ 4,134,193 -- 306,160
---------- ---------- -----------
Total -- representing net assets
applicable to capital shares
outstanding............................ $24,537,049 $19,794,060 $4,781,848
---------- ---------- -----------
---------- ---------- -----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F59
<PAGE>
GT GLOBAL VARIABLE INVESTMENT FUNDS
STATEMENTS OF OPERATIONS
Year ended December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GT GLOBAL
-------------------------------------------------
VARIABLE VARIABLE
VARIABLE GLOBAL U.S. VARIABLE
STRATEGIC GOVERNMENT GOVERNMENT LATIN
INCOME INCOME INCOME AMERICA
FUND FUND FUND FUND
---------- ---------- ------------- ----------
<S> <C> <C> <C> <C>
Investment income:* (Note 1)
Dividend income....................... -- -- -- $ 464,786
Interest income....................... $2,347,212 $ 786,214 $ 325,028 208,454
Other income.......................... -- -- -- 25,934
---------- ---------- ------------- ----------
Total investment income............. 2,347,212 786,214 325,028 699,174
---------- ---------- ------------- ----------
Expenses:
Amortization of organization costs
(Note 1)............................. 6,280 6,280 6,280 6,280
Audit fees............................ 33,620 27,594 16,470 27,424
Custodian fees (Note 1)............... 30,501 14,598 1,156 26,301
Fund accounting fees (Note 2)......... 6,725 2,707 1,305 5,629
Investment management and
administration fees (Note 2)......... 201,749 81,007 39,093 224,901
Legal fees............................ 2,844 2,856 2,720 2,720
Printing and postage expenses......... 19,040 19,040 19,040 19,040
Registration and filing fees.......... 366 366 366 366
Trustees' fees and expenses (Note
2)................................... 1,830 1,830 1,830 1,830
Other expenses........................ 2,721 2,992 2,970 5,095
---------- ---------- ------------- ----------
Total expenses before reimbursement
and reductions..................... 305,676 159,270 91,230 319,586
---------- ---------- ------------- ----------
Expenses reimbursed by Chancellor
LGT Asset Management, Inc. (Note
2)............................... (36,678) (51,249) (39,104) (38,459)
Expense reductions (Notes 1 &
5)............................... (3,554) (5,008) -- (17,907)
---------- ---------- ------------- ----------
Total net expenses.................. 265,444 103,013 52,126 263,220
---------- ---------- ------------- ----------
Net investment income (loss)............ 2,081,768 683,201 272,902 435,954
---------- ---------- ------------- ----------
Net realized and unrealized gain (loss)
on investments and foreign currencies:
(Note 1)
Net realized gain on investments...... 2,173,468 46,107 26,712 2,246,738
Net realized gain (loss) on foreign
currency transactions................ (248,534) (187,249) (479) (257,557)
---------- ---------- ------------- ----------
Net realized gain (loss) during the
year............................... 1,924,934 (141,142) 26,233 1,989,181
---------- ---------- ------------- ----------
Net change in unrealized appreciation
(depreciation) on translation of
assets and liabilities in foreign
currencies........................... 137,267 120,434 2,603 5,649
Net change in unrealized appreciation
(depreciation) of investments........ 1,136,746 (38,711) (183,973) 2,060,350
---------- ---------- ------------- ----------
Net unrealized appreciation
(depreciation) during the year..... 1,274,013 81,723 (181,370) 2,065,999
---------- ---------- ------------- ----------
Net realized and unrealized gain
(loss) on investments and foreign
currencies........................... 3,198,947 (59,419) (155,137) 4,055,180
---------- ---------- ------------- ----------
Net increase in net assets resulting
from operations........................ $5,280,715 $ 623,782 $ 117,765 $4,491,134
---------- ---------- ------------- ----------
---------- ---------- ------------- ----------
*Net of foreign withholding tax of...... $ 0 $ 3,270 $ 0 $ 14,005
---------- ---------- ------------- ----------
---------- ---------- ------------- ----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F60
<PAGE>
GT GLOBAL VARIABLE INVESTMENT FUNDS
STATEMENTS OF OPERATIONS (cont'd)
Year ended December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GT GLOBAL
-----------------------------------------------------------------------------------
VARIABLE VARIABLE VARIABLE VARIABLE VARIABLE
GROWTH & TELECOM- EMERGING VARIABLE NATURAL VARIABLE NEW
INCOME MUNICATIONS MARKETS INFRASTRUCTURE RESOURCES AMERICA PACIFIC
FUND FUND FUND FUND FUND FUND FUND
---------- ---------- ---------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income:* (Note 1)
Dividend income....................... $ 711,290 $ 287,416 $ 256,601 $ 54,052 $ 17,205 $ 228,357 $ 469,393
Interest income....................... 805,722 220,472 51,010 35,764 27,103 340,363 112,331
Other income.......................... -- 3,795 -- -- -- -- --
---------- ---------- ---------- ----------- ---------- ---------- ----------
Total investment income............. 1,517,012 511,683 307,611 89,816 44,308 568,720 581,724
---------- ---------- ---------- ----------- ---------- ---------- ----------
Expenses:
Amortization of organization costs
(Note 1)............................. 6,280 6,368 -- -- -- 6,280 6,280
Audit fees............................ 34,175 27,424 29,576 17,568 23,424 24,572 26,594
Custodian fees (Note 1)............... 20,947 21,455 39,444 8,085 17,808 32,750 48,714
Fund accounting fees (Note 2)......... 7,952 14,996 3,728 877 1,878 9,687 7,289
Investment management and
administration fees (Note 2)......... 317,655 599,839 149,042 35,043 75,133 290,233 291,308
Legal fees............................ 2,569 2,720 2,854 2,856 2,569 2,567 2,870
Printing and postage expenses......... 19,040 19,040 19,040 19,040 19,040 18,950 19,040
Registration and filing fees.......... 366 571 384 366 366 384 366
Trustees' fees and expenses (Note
2)................................... 1,921 1,830 1,830 1,830 1,466 1,931 1,830
Other expenses........................ 2,157 5,704 3,972 2,990 155 2,665 2,858
---------- ---------- ---------- ----------- ---------- ---------- ----------
Total expenses before reimbursement
and reductions..................... 413,062 699,947 249,870 88,655 141,839 390,019 407,149
---------- ---------- ---------- ----------- ---------- ---------- ----------
Expenses reimbursed by Chancellor
LGT Asset Management, Inc. (Note
2)............................... (15,992) -- (63,577) (44,850) (47,923) (3,077) (43,012)
Expense reductions (Notes 1 &
5)............................... (17,191) (29,085) (11,622) (1,263) (4,405) (19,314) (38,639)
---------- ---------- ---------- ----------- ---------- ---------- ----------
Total net expenses.................. 379,879 670,862 174,671 42,542 89,511 367,628 325,498
---------- ---------- ---------- ----------- ---------- ---------- ----------
Net investment income (loss)............ 1,137,133 (159,179) 132,940 47,274 (45,203) 201,092 256,226
---------- ---------- ---------- ----------- ---------- ---------- ----------
Net realized and unrealized gain (loss)
on investments and foreign currencies:
(Note 1)
Net realized gain on investments...... 331,192 7,950,400 2,631,325 433,070 734,600 1,558,862 1,271,333
Net realized gain (loss) on foreign
currency transactions................ 253,048 131,767 (47,388) (210) (1,978) (330) (23,252)
---------- ---------- ---------- ----------- ---------- ---------- ----------
Net realized gain (loss) during the
year............................... 584,240 8,082,167 2,583,937 432,860 732,622 1,558,532 1,248,081
---------- ---------- ---------- ----------- ---------- ---------- ----------
Net change in unrealized appreciation
(depreciation) on translation of
assets and liabilities in foreign
currencies........................... 20,456 3,633 2,710 145 (2,282) -- (2,246)
Net change in unrealized appreciation
(depreciation) of investments........ 3,228,349 1,763,783 826,703 211,063 1,760,818 4,688,367 7,190,989
---------- ---------- ---------- ----------- ---------- ---------- ----------
Net unrealized appreciation
(depreciation) during the year..... 3,248,805 1,767,416 829,413 211,208 1,758,536 4,688,367 7,188,743
---------- ---------- ---------- ----------- ---------- ---------- ----------
Net realized and unrealized gain
(loss) on investments and foreign
currencies........................... 3,833,045 9,849,583 3,413,350 644,068 2,491,158 6,246,899 8,436,824
---------- ---------- ---------- ----------- ---------- ---------- ----------
Net increase in net assets resulting
from operations........................ $4,970,178 $9,690,404 $3,546,290 $ 691,342 $2,445,955 $6,447,991 $8,693,050
---------- ---------- ---------- ----------- ---------- ---------- ----------
---------- ---------- ---------- ----------- ---------- ---------- ----------
*Net of foreign withholding tax of...... $ 74,410 $ 19,315 $ 11,959 $ 3,008 $ 920 $ 1,044 $ 30,313
---------- ---------- ---------- ----------- ---------- ---------- ----------
---------- ---------- ---------- ----------- ---------- ---------- ----------
<CAPTION>
VARIABLE MONEY VARIABLE
EUROPE MARKET INTERNATIONAL
FUND FUND FUND
---------- ---------- -----------
<S> <C> <C> <C>
Investment income:* (Note 1)
Dividend income....................... $ 264,104 -- $ 69,571
Interest income....................... 47,426 $ 832,921 4,764
Other income.......................... -- -- --
---------- ---------- -----------
Total investment income............. 311,530 832,921 74,335
---------- ---------- -----------
Expenses:
Amortization of organization costs
(Note 1)............................. 6,280 6,280 --
Audit fees............................ 27,396 15,807 28,568
Custodian fees (Note 1)............... 27,411 4,968 11,829
Fund accounting fees (Note 2)......... 4,997 3,883 1,137
Investment management and
administration fees (Note 2)......... 200,116 76,778 45,476
Legal fees............................ 2,567 2,569 2,844
Printing and postage expenses......... 19,040 16,040 19,040
Registration and filing fees.......... 384 166 366
Trustees' fees and expenses (Note
2)................................... 1,840 2,030 1,830
Other expenses........................ 3,966 2,153 2,139
---------- ---------- -----------
Total expenses before reimbursement
and reductions..................... 293,997 130,674 113,229
---------- ---------- -----------
Expenses reimbursed by Chancellor
LGT Asset Management, Inc. (Note
2)............................... (43,852) (15,508) (56,384)
Expense reductions (Notes 1 &
5)............................... (9,946) -- (4,131)
---------- ---------- -----------
Total net expenses.................. 240,199 115,166 52,714
---------- ---------- -----------
Net investment income (loss)............ 71,331 717,755 21,621
---------- ---------- -----------
Net realized and unrealized gain (loss)
on investments and foreign currencies:
(Note 1)
Net realized gain on investments...... 3,023,234 -- 144,521
Net realized gain (loss) on foreign
currency transactions................ 51,785 -- 73,839
---------- ---------- -----------
Net realized gain (loss) during the
year............................... 3,075,019 -- 218,360
---------- ---------- -----------
Net change in unrealized appreciation
(depreciation) on translation of
assets and liabilities in foreign
currencies........................... (10,428) -- 3,152
Net change in unrealized appreciation
(depreciation) of investments........ 2,087,986 -- 130,577
---------- ---------- -----------
Net unrealized appreciation
(depreciation) during the year..... 2,077,558 -- 133,729
---------- ---------- -----------
Net realized and unrealized gain
(loss) on investments and foreign
currencies........................... 5,152,577 -- 352,089
---------- ---------- -----------
Net increase in net assets resulting
from operations........................ $5,223,908 $ 717,755 $ 373,710
---------- ---------- -----------
---------- ---------- -----------
*Net of foreign withholding tax of...... $ 48,261 $ 0 $ 9,034
---------- ---------- -----------
---------- ---------- -----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F61
<PAGE>
GT GLOBAL VARIABLE INVESTMENT FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
For the year ended December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GT GLOBAL
-------------------------------------------------
VARIABLE VARIABLE
VARIABLE GLOBAL U.S. VARIABLE
STRATEGIC GOVERNMENT GOVERNMENT LATIN
INCOME INCOME INCOME AMERICA
FUND FUND FUND FUND
---------- ---------- ------------- ----------
<S> <C> <C> <C> <C>
Increase (Decrease) in net assets
Operations:
Net investment income (loss).......... $2,081,768 $ 683,201 $ 272,902 $ 435,954
Net realized gain (loss) on
investments and foreign currency
transactions......................... 1,924,934 (141,142) 26,233 1,989,181
Net change in unrealized appreciation
(depreciation) on translation of
assets and liabilities in foreign
currencies........................... 137,267 120,434 2,603 5,649
Net change in unrealized appreciation
(depreciation) of investments........ 1,136,746 (38,711) (183,973) 2,060,350
---------- ---------- ------------- ----------
Net increase (decrease) in net
assets resulting from operations... 5,280,715 623,782 117,765 4,491,134
---------- ---------- ------------- ----------
Distributions to shareholders: (Note 1)
From net investment income............ (1,851,306) (706,141) (262,014) (613,467)
From net realized gain on
investments.......................... (153,457) -- -- --
In excess of net investment income.... -- -- -- (11,459)
---------- ---------- ------------- ----------
Total distributions............... (2,004,763) (706,141) (262,014) (624,926)
---------- ---------- ------------- ----------
Capital share transactions: (Note 4)
Increase from capital shares sold and
reinvested........................... 45,166,146 7,375,614 4,065,030 29,173,781
Decrease from capital shares
repurchased.......................... (42,069,061) (8,839,632) (4,430,300) (29,883,182)
---------- ---------- ------------- ----------
Net increase (decrease) from capital
share transactions................. 3,097,085 (1,464,018) (365,270) (709,401)
---------- ---------- ------------- ----------
Total increase (decrease) in net
assets................................. 6,373,037 (1,546,377) (509,519) 3,156,807
Net assets:
Beginning of period................... 25,344,884 11,943,746 5,992,445 19,770,846
---------- ---------- ------------- ----------
End of period*........................ $31,717,921 $10,397,369 $ 5,482,926 $22,927,653
---------- ---------- ------------- ----------
---------- ---------- ------------- ----------
*Includes undistributed/accumulated
net investment income (loss) of:..... $ 461,426 $ 427,910 $ 21,121 $ 0
---------- ---------- ------------- ----------
---------- ---------- ------------- ----------
</TABLE>
<TABLE>
<CAPTION>
For the year ended December 31, 1995
GT GLOBAL
-------------------------------------------------
VARIABLE VARIABLE
VARIABLE GLOBAL U.S. VARIABLE
STRATEGIC GOVERNMENT GOVERNMENT LATIN
INCOME INCOME INCOME AMERICA
FUND FUND FUND FUND
---------- ---------- ------------- ----------
<S> <C> <C> <C> <C>
Increase (Decrease) in net assets
Operations:
Net investment income (loss).......... $2,222,005 $ 759,147 $ 244,379 $ 805,458
Net realized gain (loss) on
investments and foreign currency
transactions......................... (462,051) 515,637 71,394 (6,500,262)
Net change in unrealized appreciation
(depreciation) on translation of
assets and liabilities in foreign
currencies........................... (75,200) (69,644) -- (8,565)
Net change in unrealized appreciation
(depreciation) of investments........ 2,375,053 357,858 290,078 (500,292)
---------- ---------- ------------- ----------
Net increase (decrease) in net
assets resulting from operations... 4,059,807 1,562,998 605,851 (6,203,661)
---------- ---------- ------------- ----------
Distributions to shareholders: (Note 1)
From net investment income............ (1,991,043) (722,396) (234,899) (221,575)
From net realized gain on
investments.......................... -- -- -- (2,769,692)
In excess of net realized gain on
investments.......................... -- -- -- --
Return of capital..................... -- -- -- --
---------- ---------- ------------- ----------
Total distributions............... (1,991,043) (722,396) (234,899) (2,991,267)
---------- ---------- ------------- ----------
Capital share transactions: (Note 4)
Increase from capital shares sold and
reinvested........................... 24,191,843 12,649,938 20,665,939 38,533,313
Decrease from capital shares
repurchased.......................... (24,283,139) (11,200,397) (17,459,191) (36,198,875)
---------- ---------- ------------- ----------
Net increase (decrease) from capital
share transactions................. (91,296) 1,449,541 3,206,748 2,334,438
---------- ---------- ------------- ----------
Total increase (decrease) in net
assets................................. 1,977,468 2,290,143 3,577,700 (6,860,490)
Net assets:
Beginning of period................... 23,367,416 9,653,603 2,414,745 26,631,336
---------- ---------- ------------- ----------
End of period**....................... $25,344,884 $11,943,746 $ 5,992,445 $19,770,846
---------- ---------- ------------- ----------
---------- ---------- ------------- ----------
**Includes undistributed net
investment income of:................ $ 230,962 $ 36,751 $ 10,272 $ 619,523
---------- ---------- ------------- ----------
---------- ---------- ------------- ----------
</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.
F62
<PAGE>
GT GLOBAL VARIABLE INVESTMENT FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (cont'd)
For the year ended December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GT GLOBAL
------------------------------------------------------------------------------------
VARIABLE VARIABLE VARIABLE VARIABLE VARIABLE
GROWTH & TELECOM- EMERGING VARIABLE NATURAL VARIABLE NEW
INCOME MUNICATIONS MARKETS INFRASTRUCTURE RESOURCES AMERICA PACIFIC
FUND FUND FUND FUND FUND FUND FUND
---------- ---------- ---------- ----------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (Decrease) in net assets
Operations:
Net investment income (loss).......... $1,137,133 $ (159,179) $ 132,940 $ 47,274 $ (45,203) $ 201,092 $ 256,226
Net realized gain (loss) on
investments and foreign currency
transactions......................... 584,240 8,082,167 2,583,937 432,860 732,622 1,558,532 1,248,081
Net change in unrealized appreciation
(depreciation) on translation of
assets and liabilities in foreign
currencies........................... 20,456 3,633 2,710 145 (2,282) -- (2,246)
Net change in unrealized appreciation
(depreciation) of investments........ 3,228,349 1,763,783 826,703 211,063 1,760,818 4,688,367 7,190,989
---------- ---------- ---------- ----------- ---------- ---------- -----------
Net increase (decrease) in net
assets resulting from operations... 4,970,178 9,690,404 3,546,290 691,342 2,445,955 6,447,991 8,693,050
---------- ---------- ---------- ----------- ---------- ---------- -----------
Distributions to shareholders: (Note 1)
From net investment income............ (736,222) (70,025) -- (9,314) -- (526,781) (329,817)
From net realized gain on
investments.......................... (103,267) (6,373,965) -- (17,455) -- (4,953,885) --
In excess of net investment income.... -- -- -- -- -- -- --
---------- ---------- ---------- ----------- ---------- ---------- -----------
Total distributions............... (839,489) (6,443,990) -- (26,769) -- (5,480,666) (329,817)
---------- ---------- ---------- ----------- ---------- ---------- -----------
Capital share transactions: (Note 4)
Increase from capital shares sold and
reinvested........................... 29,950,604 43,828,906 32,771,217 7,252,525 33,416,057 60,951,545 177,020,035
Decrease from capital shares
repurchased.......................... (28,213,931) (34,595,566) (27,696,344) (3,457,346) (20,919,006) (57,915,239) (175,737,852)
---------- ---------- ---------- ----------- ---------- ---------- -----------
Net increase (decrease) from capital
share transactions................. 1,736,673 9,233,340 5,074,873 3,795,179 12,497,051 3,036,306 1,282,183
---------- ---------- ---------- ----------- ---------- ---------- -----------
Total increase (decrease) in net
assets................................. 5,867,362 12,479,754 8,621,163 4,459,752 14,943,006 4,003,631 9,645,416
Net assets:
Beginning of period................... 30,565,401 50,778,075 8,982,761 1,594,218 1,364,947 37,642,978 23,024,784
---------- ---------- ---------- ----------- ---------- ---------- -----------
End of period**....................... $36,432,763 $63,257,829 $17,603,924 $6,053,970 $16,307,953 $41,646,609 $32,670,200
---------- ---------- ---------- ----------- ---------- ---------- -----------
---------- ---------- ---------- ----------- ---------- ---------- -----------
**Includes undistributed net
investment income of:................ $ 745,652 $ 0 $ 83,731 $ 45,357 $ 0 $ 196,399 $ 163,089
---------- ---------- ---------- ----------- ---------- ---------- -----------
---------- ---------- ---------- ----------- ---------- ---------- -----------
<CAPTION>
VARIABLE MONEY VARIABLE
EUROPE MARKET INTERNATIONAL
FUND FUND FUND
---------- ----------- ----------
<S> <C> <C> <C>
Increase (Decrease) in net assets
Operations:
Net investment income (loss).......... $ 71,331 $ 717,755 $ 21,621
Net realized gain (loss) on
investments and foreign currency
transactions......................... 3,075,019 -- 218,360
Net change in unrealized appreciation
(depreciation) on translation of
assets and liabilities in foreign
currencies........................... (10,428) -- 3,152
Net change in unrealized appreciation
(depreciation) of investments........ 2,087,986 -- 130,577
---------- ----------- ----------
Net increase (decrease) in net
assets resulting from operations... 5,223,908 717,755 373,710
---------- ----------- ----------
Distributions to shareholders: (Note 1)
From net investment income............ (155,793) (717,755) (526)
From net realized gain on
investments.......................... -- -- (14,157)
In excess of net investment income.... -- -- --
---------- ----------- ----------
Total distributions............... (155,793) (717,755) (14,683)
---------- ----------- ----------
Capital share transactions: (Note 4)
Increase from capital shares sold and
reinvested........................... 77,988,956 316,808,464 9,136,580
Decrease from capital shares
repurchased.......................... (74,160,899) (311,904,996) (8,376,359)
---------- ----------- ----------
Net increase (decrease) from capital
share transactions................. 3,828,057 4,903,468 760,221
---------- ----------- ----------
Total increase (decrease) in net
assets................................. 8,896,172 4,903,468 1,119,248
Net assets:
Beginning of period................... 15,640,877 14,890,592 3,662,600
---------- ----------- ----------
End of period**....................... $24,537,049 $19,794,060 $4,781,848
---------- ----------- ----------
---------- ----------- ----------
**Includes undistributed net
investment income of:................ $ 67,215 $ 0 $ 6,759
---------- ----------- ----------
---------- ----------- ----------
</TABLE>
- ----------------
+ The Variable Infrastructure and Variable Natural Resources Funds did
not commence operations until January 31, 1995.
<TABLE>
<CAPTION>
For the year ended December 31, 1995
GT GLOBAL
------------------------------------------------------------------------------------
VARIABLE VARIABLE VARIABLE VARIABLE VARIABLE
GROWTH & TELECOM- EMERGING VARIABLE NATURAL VARIABLE NEW
INCOME MUNICATIONS MARKETS INFRASTRUCTURE RESOURCES AMERICA PACIFIC
FUND FUND FUND FUND+ FUND+ FUND FUND
---------- ---------- ---------- ----------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (Decrease) in net assets
Operations:
Net investment income (loss).......... $1,076,015 $ 70,025 $ 118,171 $ 8,483 $ 64,339 $ 522,418 $ 356,169
Net realized gain (loss) on
investments and foreign currency
transactions......................... (1,073,037) 6,258,812 (1,320,410) 14,143 (7,572) 4,769,966 (1,511,248)
Net change in unrealized appreciation
(depreciation) on translation of
assets and liabilities in foreign
currencies........................... (6,017) (8,781) 119 (141) 600 -- 2,804
Net change in unrealized appreciation
(depreciation) of investments........ 4,101,938 2,438,359 714,821 12,250 61,043 96,985 1,718,248
---------- ---------- ---------- ----------- ---------- ---------- -----------
Net increase (decrease) in net
assets resulting from operations... 4,098,899 8,758,415 (487,299) 34,735 118,410 5,389,369 565,973
---------- ---------- ---------- ----------- ---------- ---------- -----------
Distributions to shareholders: (Note 1)
From net investment income............ (818,464) (80,457) (73,785) -- (62,702) (117,889) (90,012)
From net realized gain on
investments.......................... -- (965,478) -- -- -- (488,398) --
In excess of net realized gain on
investments.......................... -- -- -- -- (4,775) -- --
Return of capital..................... -- -- (16,304) -- -- -- --
---------- ---------- ---------- ----------- ---------- ---------- -----------
Total distributions............... (818,464) (1,045,935) (90,089) -- (67,477) (606,287) (90,012)
---------- ---------- ---------- ----------- ---------- ---------- -----------
Capital share transactions: (Note 4)
Increase from capital shares sold and
reinvested........................... 11,374,376 24,234,343 12,813,354 2,285,935 3,154,100 73,573,562 95,990,038
Decrease from capital shares
repurchased.......................... (9,669,648) (17,197,275) (10,519,830) (826,452) (1,940,086) (55,970,932) (92,832,446)
---------- ---------- ---------- ----------- ---------- ---------- -----------
Net increase (decrease) from capital
share transactions................. 1,704,728 7,037,068 2,293,524 1,459,483 1,214,014 17,602,630 3,157,592
---------- ---------- ---------- ----------- ---------- ---------- -----------
Total increase (decrease) in net
assets................................. 4,985,163 14,749,548 1,716,136 1,494,218 1,264,947 22,385,712 3,633,553
Net assets:
Beginning of period................... 25,580,238 36,028,527 7,266,625 100,000 100,000 15,257,266 19,391,231
---------- ---------- ---------- ----------- ---------- ---------- -----------
End of period......................... $30,565,401 $50,778,075 $8,982,761 $1,594,218 $1,364,947 $37,642,978 $23,024,784
---------- ---------- ---------- ----------- ---------- ---------- -----------
---------- ---------- ---------- ----------- ---------- ---------- -----------
Includes undistributed net investment
income of:........................... $ 344,740 $ 70,025 $ 0 $ 7,607 $ 0 $ 522,417 $ 314,449
---------- ---------- ---------- ----------- ---------- ---------- -----------
---------- ---------- ---------- ----------- ---------- ---------- -----------
<CAPTION>
VARIABLE MONEY VARIABLE
EUROPE MARKET INTERNATIONAL
FUND FUND FUND
---------- ----------- ----------
<S> <C> <C> <C>
Increase (Decrease) in net assets
Operations:
Net investment income (loss).......... $ 171,620 $ 818,843 $ 30,463
Net realized gain (loss) on
investments and foreign currency
transactions......................... (670,205) -- (314,341)
Net change in unrealized appreciation
(depreciation) on translation of
assets and liabilities in foreign
currencies........................... (104,599) -- 7,389
Net change in unrealized appreciation
(depreciation) of investments........ 2,040,475 -- 312,493
---------- ----------- ----------
Net increase (decrease) in net
assets resulting from operations... 1,437,291 818,843 36,004
---------- ----------- ----------
Distributions to shareholders: (Note 1)
From net investment income............ (154,451) (818,843) (30,792)
From net realized gain on
investments.......................... -- -- (5,018)
In excess of net realized gain on
investments.......................... -- -- --
Return of capital..................... -- -- --
---------- ----------- ----------
Total distributions............... (154,451) (818,843) (35,810)
---------- ----------- ----------
Capital share transactions: (Note 4)
Increase from capital shares sold and
reinvested........................... 39,895,470 179,670,442 15,020,503
Decrease from capital shares
repurchased.......................... (40,557,920) (184,253,572) (13,587,017)
---------- ----------- ----------
Net increase (decrease) from capital
share transactions................. (662,450) (4,583,130) 1,433,486
---------- ----------- ----------
Total increase (decrease) in net
assets................................. 620,390 (4,583,130) 1,433,680
Net assets:
Beginning of period................... 15,020,487 19,473,722 2,228,920
---------- ----------- ----------
End of period......................... $15,640,877 $14,890,592 $3,662,600
---------- ----------- ----------
---------- ----------- ----------
Includes undistributed net investment
income of:........................... $ 151,677 $ 0 $ 0
---------- ----------- ----------
---------- ----------- ----------
</TABLE>
- ----------------
The accompanying notes are an integral part of the financial statements.
F63
<PAGE>
GT GLOBAL VARIABLE INVESTMENT FUNDS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout the period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
GT GLOBAL
-----------------------------------------------------------------------------
VARIABLE STRATEGIC INCOME FUND
-----------------------------------------------------------------------------
FEBRUARY 10, 1993
YEAR ENDED DECEMBER 31, (COMMENCEMENT OF
--------------------------------------------------------- OPERATIONS) TO
1996 1995 1994 DECEMBER 31, 1993
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of
period............................ $ 11.86 $ 10.82 $ 14.57 $ 12.00
----------------- ----------------- ----------------- -----------------
Net investment income (loss)..... 0.95(a) 1.07(b) 1.71(c) 0.61(d)
Net realized and unrealized gain
(loss) on investments........... 1.50 0.93 (4.17) 2.57
----------------- ----------------- ----------------- -----------------
Net increase (decrease)
resulting from operations..... 2.45 2.00 (2.46) 3.18
----------------- ----------------- ----------------- -----------------
Distributions to shareholders:
From net investment income....... (0.85) (0.96) (0.79) (0.61)
From net realized gain on
investments..................... (0.08) -- (0.45) --
In excess of net realized gain on
investments..................... -- -- -- --
Return of capital................ -- -- (0.05) --
----------------- ----------------- ----------------- -----------------
Total distributions............ (0.93) (0.96) (1.29) (0.61)
----------------- ----------------- ----------------- -----------------
Net asset value, end of period..... $ 13.38 $ 11.86 $ 10.82 $ 14.57
----------------- ----------------- ----------------- -----------------
----------------- ----------------- ----------------- -----------------
Total investment return (f) +..... 21.58% 19.50% (17.09)% 27.5%
----------------- ----------------- ----------------- -----------------
----------------- ----------------- ----------------- -----------------
Ratios and supplemental data:
Net assets, end of period (in
000's)............................ $ 31,718 $ 25,345 $ 23,367 $ 18,089
Ratio of net investment income
(loss) to average net assets:
With reimbursement by Chancellor
LGT and expense reductions
(Notes 1, 2, & 5) ++............ 7.74% 9.59% 7.58% 6.6%
Without reimbursement by
Chancellor LGT and expense
reductions ++................... 7.59% 9.35% 7.43% 6.3%
Without expenses assumed by
Chancellor LGT (e) ++.......... --% --% --% 5.2%
Ratio of expenses to average net
assets:
With reimbursement by Chancellor
LGT and expense reductions
(Notes 1, 2, & 5) ++............ 0.99% 1.00% 1.00% 0.5%
Without reimbursement by
Chancellor LGT and expense
reductions ++................... 1.14% 1.24% 1.15% 0.9%
Without expenses assumed by
Chancellor LGT (e) ++.......... --% --% --% 1.9%
Portfolio turnover ++.............. 210% 193% 313% 245%
Average commission rate per share
paid on portfolio transactions.... N/A N/A N/A N/A
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GT GLOBAL
-----------------------------------------------------------------------------
VARIABLE LATIN AMERICA FUND
-----------------------------------------------------------------------------
FEBRUARY 10, 1993
YEAR ENDED DECEMBER 31, (COMMENCEMENT OF
--------------------------------------------------------- OPERATIONS) TO
1996 1995 1994 DECEMBER 31, 1993
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of
period............................ $ 12.42 $ 19.17 $ 17.68 $ 12.00
----------------- ----------------- ----------------- --------
Net investment income (loss)..... 0.27(a) 0.51(b) 0.11(c) 0.04(d)
Net realized and unrealized gain
(loss) on investments........... 2.49 (5.10) 1.49 5.64
----------------- ----------------- ----------------- --------
Net increase (decrease)
resulting from operations..... 2.76 (4.59) 1.60 5.68
----------------- ----------------- ----------------- --------
Distributions to shareholders:
From net investment income....... (0.37) (0.16) (0.04) --
From net realized gain on
investments..................... -- (2.00) (0.07) --
In excess of net investment
income.......................... (0.01) -- -- --
Return of capital................ -- -- -- --
----------------- ----------------- ----------------- --------
Total distributions............ (0.38) (2.16) (0.11) --
----------------- ----------------- ----------------- --------
Net asset value, end of period..... $ 14.80 $ 12.42 $ 19.17 $ 17.68
----------------- ----------------- ----------------- --------
----------------- ----------------- ----------------- --------
Total investment return (f) +..... 22.48% (24.14)% 9.14% 47.3%
----------------- ----------------- ----------------- --------
----------------- ----------------- ----------------- --------
Ratios and supplemental data:
Net assets, end of period (in
000's)............................ $ 22,928 $ 19,771 $ 26,631 $ 8,240
Ratio of net investment income
(loss) to average net assets:
With reimbursement by Chancellor
LGT and expense reductions
(Notes 1, 2, & 5) ++............ 1.94% 4.43% 0.82% 1.0%
Without reimbursement by
Chancellor LGT and expense
reductions ++................... 1.69% 3.92% 0.49% 0.4%
Without expenses assumed by
Chancellor LGT (e) ++.......... --% --% --% (2.5)%
Ratio of expenses to average net
assets:
With reimbursement by Chancellor
LGT and expense reductions
(Notes 1, 2, & 5) ++............ 1.17% 1.18% 1.25% 0.7%
Without reimbursement by
Chancellor LGT and expense
reductions ++................... 1.42% 1.69% 1.58% 1.3%
Without expenses assumed by
Chancellor LGT (e) ++.......... --% --% --% 4.2%
Portfolio turnover ++.............. 102% 140% 185% 78%
Average commission rate per share
paid on portfolio transactions.... $ 0.0002 N/A N/A N/A
</TABLE>
- ------------------------
(a) Includes reimbursement by Chancellor LGT Asset Management, Inc. of
Fund operating expenses of $0.02 for the Variable Strategic Income
Fund, $0.06 for the Variable Global Government Income Fund, $0.08 for
the Variable U.S. Government Income Fund, $0.02 for the Variable Latin
America Fund, and $0.01 for the Variable Growth & Income Fund (Note
2).
(b) Includes reimbursement by Chancellor LGT Asset Management, Inc. of
Fund operating expenses of $0.03 for the Variable Strategic Income
Fund, $0.07 for the Variable Global Government Income Fund, $0.14 for
the Variable U.S. Government Income Fund, $0.06 for the Variable Latin
America Fund, $0.03 for the Variable Growth & Income Fund, and $0.00
for the Variable Telecommunications Fund (Note 2).
(c) Includes reimbursement by Chancellor LGT Asset 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, and $0.01
for the Variable Telecommunications Fund (Note 2).
The accompanying notes are an integral part of the financial statements.
F64
<PAGE>
GT GLOBAL VARIABLE INVESTMENT FUNDS
FINANCIAL HIGHLIGHTS (cont'd)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GT GLOBAL
-----------------------------------------------------------------------------
VARIABLE GLOBAL GOVERNMENT INCOME FUND
-----------------------------------------------------------------------------
FEBRUARY 10, 1993
YEAR ENDED DECEMBER 31, (COMMENCEMENT OF
--------------------------------------------------------- OPERATIONS) TO
1996 1995 1994 DECEMBER 31, 1993
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of
period............................ $ 11.51 $ 10.63 $ 12.53 $ 12.00
----------------- ----------------- -------- --------
Net investment income (loss)..... 0.72(a) 0.79(b) 0.77(c) 0.57(d)
Net realized and unrealized gain
(loss) on investments........... (0.06) 0.84 (1.85) 0.52
----------------- ----------------- -------- --------
Net increase (decrease)
resulting from operations..... 0.66 1.63 (1.08) 1.09
----------------- ----------------- -------- --------
Distributions to shareholders:
From net investment income....... (0.74) (0.75) (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............ (0.74) (0.75) (0.82) (0.56)
----------------- ----------------- -------- --------
Net asset value, end of period..... $ 11.43 $ 11.51 $ 10.63 $ 12.53
----------------- ----------------- -------- --------
----------------- ----------------- -------- --------
Total investment return (f) +..... 6.17% 15.85% (8.70)% 9.5%
----------------- ----------------- -------- --------
----------------- ----------------- -------- --------
Ratios and supplemental data:
Net assets, end of period (in
000's)............................ $ 10,397 $ 11,944 $ 9,654 $ 6,136
Ratio of net investment income
(loss) to average net assets:
With reimbursement by Chancellor
LGT and expense reductions
(Notes 1, 2, & 5) ++............ 6.32% 7.03% 6.89% 6.1%
Without reimbursement by
Chancellor LGT and expense
reductions ++................... 5.80% 6.37% 6.21% 5.5%
Without expenses assumed by
Chancellor LGT (e) ++.......... --% --% --% 2.4%
Ratio of expenses to average net
assets:
With reimbursement by Chancellor
LGT and expense reductions
(Notes 1, 2, & 5) ++............ 0.95% 1.00% 1.00% 0.5%
Without reimbursement by
Chancellor LGT and expense
reductions ++................... 1.47% 1.66% 1.68% 1.1%
Without expenses assumed by
Chancellor LGT (e) ++.......... --% --% --% 4.2%
Portfolio turnover ++.............. 235% 394% 350% 298%
Average commission rate per share
paid on portfolio transactions.... N/A N/A N/A N/A
<CAPTION>
GT GLOBAL
-----------------------------------------------------------------------------
VARIABLE U.S. GOVERNMENT INCOME FUND
-----------------------------------------------------------------------------
FEBRUARY 10, 1993
YEAR ENDED DECEMBER 31, (COMMENCEMENT OF
--------------------------------------------------------- OPERATIONS) TO
1996 1995 1994 DECEMBER 31, 1993
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of
period............................ $ 11.74 $ 10.79 $ 12.23 $ 12.00
-------- -------- -------- --------
Net investment income (loss)..... 0.60(a) 0.62(b) 0.63(c) 0.53(d)
Net realized and unrealized gain
(loss) on investments........... (0.35) 0.93 (1.39) 0.23
-------- -------- -------- --------
Net increase (decrease)
resulting from operations..... 0.25 1.55 (0.76) 0.76
-------- -------- -------- --------
Distributions to shareholders:
From net investment income....... (0.58) (0.60) (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............ (0.58) (0.60) (0.68) (0.53)
-------- -------- -------- --------
Net asset value, end of period..... $ 11.41 $ 11.74 $ 10.79 $ 12.23
-------- -------- -------- --------
-------- -------- -------- --------
Total investment return (f) +..... 2.23% 14.73% (6.27)% 6.4%
-------- -------- -------- --------
-------- -------- -------- --------
Ratios and supplemental data:
Net assets, end of period (in
000's)............................ $ 5,483 $ 5,992 $ 2,415 $ 974
Ratio of net investment income
(loss) to average net assets:
With reimbursement by Chancellor
LGT and expense reductions
(Notes 1, 2, & 5) ++............ 5.24% 5.43% 5.53% 5.3%
Without reimbursement by
Chancellor LGT and expense
reductions ++................... 4.49% 3.87% 1.29% 3.4%
Without expenses assumed by
Chancellor LGT (e) ++.......... --% --% --% (6.9)%
Ratio of expenses to average net
assets:
With reimbursement by Chancellor
LGT and expense reductions
(Notes 1, 2, & 5) ++............ 1.00% 1.00% 0.38% 0.0%
Without reimbursement by
Chancellor LGT and expense
reductions ++................... 1.75% 2.56% 4.63% 1.9%
Without expenses assumed by
Chancellor LGT (e) ++.......... --% --% --% 12.3%
Portfolio turnover ++.............. 49% 186% 34% 81%
Average commission rate per share
paid on portfolio transactions.... N/A N/A N/A N/A
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GT GLOBAL
-----------------------------------------------------------------------------
VARIABLE GROWTH & INCOME FUND
-----------------------------------------------------------------------------
FEBRUARY 10, 1993
YEAR ENDED DECEMBER 31, (COMMENCEMENT OF
--------------------------------------------------------- OPERATIONS) TO
1996 1995 1994 DECEMBER 31, 1993
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of
period............................ $ 14.57 $ 12.99 $ 13.77 $ 12.00
----------------- ----------------- ----------------- -----------------
Net investment income (loss)..... 0.53(a) 0.52(b) 0.46(c) 0.31(d)
Net realized and unrealized gain
(loss) on investments........... 1.81 1.46 (0.85) 1.79
----------------- ----------------- ----------------- -----------------
Net increase (decrease)
resulting from operations..... 2.34 1.98 (0.39) 2.10
----------------- ----------------- ----------------- -----------------
Distributions to shareholders:
From net investment income....... (0.35) (0.40) (0.39) (0.28)
From net realized gain on
investments..................... (0.05) -- -- (0.05)
In excess of net investment
income.......................... -- -- -- --
Return of capital................ -- -- -- --
----------------- ----------------- ----------------- -----------------
Total distributions............ (0.40) (0.40) (0.39) (0.33)
----------------- ----------------- ----------------- -----------------
Net asset value, end of period..... $ 16.51 $ 14.57 $ 12.99 $ 13.77
----------------- ----------------- ----------------- -----------------
----------------- ----------------- ----------------- -----------------
Total investment return (f) +..... 16.33% 15.49% (2.85)% 17.8%
----------------- ----------------- ----------------- -----------------
----------------- ----------------- ----------------- -----------------
Ratios and supplemental data:
Net assets, end of period (in
000's)............................ $ 36,433 $ 30,565 $ 25,580 $ 11,677
Ratio of net investment income
(loss) to average net assets:
With reimbursement by Chancellor
LGT and expense reductions
(Notes 1, 2, & 5) ++............ 3.58% 3.87% 3.69% 3.2%
Without reimbursement by
Chancellor LGT and expense
reductions ++................... 3.48% 3.66% 3.45% 2.7%
Without expenses assumed by
Chancellor LGT (e) ++.......... --% --% --% 1.1%
Ratio of expenses to average net
assets:
With reimbursement by Chancellor
LGT and expense reductions
(Notes 1, 2, & 5) ++............ 1.20% 1.23% 1.25% 0.6%
Without reimbursement by
Chancellor LGT and expense
reductions ++................... 1.30% 1.44% 1.49% 1.2%
Without expenses assumed by
Chancellor LGT (e) ++.......... --% --% --% 2.8%
Portfolio turnover ++.............. 57% 73% 53% 17%
Average commission rate per share
paid on portfolio transactions.... $ 0.0147 N/A N/A N/A
<CAPTION>
GT GLOBAL
-----------------------------------------------------------------------------
VARIABLE TELECOMMUNICATIONS FUND
-----------------------------------------------------------------------------
YEAR ENDED OCTOBER 18, 1993
DECEMBER 31, (COMMENCEMENT OF
--------------------------------------------------------- OPERATIONS) TO
1996 1995 1994 DECEMBER 31, 1993
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of
period............................ $ 16.87 $ 13.98 $ 13.07 $ 12.00
----------------- ----------------- ----------------- --------
Net investment income (loss)..... (0.05) 0.02(b) 0.01(c) 0.04(d)
Net realized and unrealized gain
(loss) on investments........... 3.31 3.26 0.92 1.03
----------------- ----------------- ----------------- --------
Net increase (decrease)
resulting from operations..... 3.26 3.28 0.93 1.07
----------------- ----------------- ----------------- --------
Distributions to shareholders:
From net investment income....... (0.02) (0.03) (0.02) --
From net realized gain on
investments..................... (1.97) (0.36) -- --
In excess of net investment
income.......................... -- -- -- --
Return of capital................ -- -- -- --
----------------- ----------------- ----------------- --------
Total distributions............ (1.99) (0.39) (0.02) --
----------------- ----------------- ----------------- --------
Net asset value, end of period..... $ 18.14 $ 16.87 $ 13.98 $ 13.07
----------------- ----------------- ----------------- --------
----------------- ----------------- ----------------- --------
Total investment return (f) +..... 19.34% 23.66% 7.15% 8.9%
----------------- ----------------- ----------------- --------
----------------- ----------------- ----------------- --------
Ratios and supplemental data:
Net assets, end of period (in
000's)............................ $ 63,258 $ 50,778 $ 36,029 $ 7,903
Ratio of net investment income
(loss) to average net assets:
With reimbursement by Chancellor
LGT and expense reductions
(Notes 1, 2, & 5) ++............ (0.26)% 0.16% 0.31% 2.5%
Without reimbursement by
Chancellor LGT and expense
reductions ++................... (0.31)% 0.10% 0.07% 2.3%
Without expenses assumed by
Chancellor LGT (e) ++.......... --% --% --% 1.6%
Ratio of expenses to average net
assets:
With reimbursement by Chancellor
LGT and expense reductions
(Notes 1, 2, & 5) ++............ 1.12% 1.20% 1.25% 0.9%
Without reimbursement by
Chancellor LGT and expense
reductions ++................... 1.17% 1.26% 1.49% 1.1%
Without expenses assumed by
Chancellor LGT (e) ++.......... --% --% --% 1.8%
Portfolio turnover ++.............. 77% 70% 81% 20%
Average commission rate per share
paid on portfolio transactions.... $ 0.0068 N/A N/A N/A
</TABLE>
- ------------------------
(d) Includes reimbursement by Chancellor LGT Asset 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).
(e) During the period ended December 31, 1993, Chancellor LGT Asset
Management, Inc. voluntarily assumed certain expenses for the Funds
(Note 2).
(f) Total return information does not reflect expenses that apply to the
Separate Accounts or the related insurance contracts, and inclusion of
these charges would reduce the total return figures for all periods
shown.
+ Not annualized for periods of less than one year.
++ Annualized for periods of less than one year.
N/A Not applicable.
The accompanying notes are an integral part of the financial statements.
F65
<PAGE>
GT GLOBAL VARIABLE INVESTMENT FUNDS
FINANCIAL HIGHLIGHTS (cont'd)
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout the period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
GT GLOBAL
---------------------------------------------------------
VARIABLE EMERGING MARKETS FUND
---------------------------------------------------------
YEAR ENDED JULY 5, 1994
DECEMBER 31, (COMMENCEMENT OF
------------------------------------- OPERATIONS) TO
1996 1995 DECEMBER 31, 1994
----------------- ----------------- -----------------
<S> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of
period............................ $ 10.88 $ 11.89 $ 12.00
----------------- -------- --------
Net investment income (loss)..... 0.11(a) 0.14(b) 0.07(c)
Net realized and unrealized gain
(loss) on investments........... 3.27 (1.04) (0.05)
----------------- -------- --------
Net increase (decrease)
resulting from operations..... 3.38 (0.90) 0.02
----------------- -------- --------
Distributions to shareholders:
From net investment income....... -- (0.09) (0.07)
From net realized gain on
investments..................... -- -- --
In excess of net realized gain on
investments..................... -- -- (0.06)
Return of capital................ -- (0.02) --
----------------- -------- --------
Total distributions............ -- (0.11) (0.13)
----------------- -------- --------
Net asset value, end of period..... $ 14.26 $ 10.88 $ 11.89
----------------- -------- --------
----------------- -------- --------
Total investment return (f) +..... 31.07% (7.54)% 0.12%
----------------- -------- --------
----------------- -------- --------
Ratios and supplemental data:
Net assets, end of period (in
000's)............................ $ 17,604 $ 8,983 $ 7,267
Ratio of net investment income
(loss) to average net assets:
With reimbursement by Chancellor
LGT and expense reductions
(Notes 1, 2, & 5) ++............ 0.89% 1.55% 4.10%
Without reimbursement by
Chancellor LGT and expense
reductions ++................... 0.39% 0.51% (0.20)%
Without expenses assumed by
Chancellor LGT (e) ++.......... --% --% --%
Ratio of expenses to average net
assets:
With reimbursement by Chancellor
LGT and expense reductions
(Notes 1, 2, & 5) ++............ 1.18% 1.18% 0.00%
Without reimbursement by
Chancellor LGT and expense
reductions ++................... 1.68% 2.22% 4.30%
Without expenses assumed by
Chancellor LGT (e) ++.......... --% --% --%
Portfolio turnover ++.............. 216% 210% 117%
Average commission rate per share
paid on portfolio transactions.... $ 0.0021 N/A N/A
<CAPTION>
GT GLOBAL
-------------------------------------
VARIABLE INFRASTRUCTURE FUND
-------------------------------------
JANUARY 31, 1995
(COMMENCEMENT OF
YEAR ENDED OPERATIONS) TO
DECEMBER 31, 1996 DECEMBER 31, 1995
----------------- -----------------
<S> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of
period............................ $ 13.27 $ 12.00
----------------- -----------------
Net investment income (loss)..... 0.11(a) 0.07(b)
Net realized and unrealized gain
(loss) on investments........... 3.19 1.20
----------------- -----------------
Net increase (decrease)
resulting from operations..... 3.30 1.27
----------------- -----------------
Distributions to shareholders:
From net investment income....... (0.03) --
From net realized gain on
investments..................... (0.07) --
In excess of net realized gain on
investments..................... -- --
Return of capital................ -- --
----------------- -----------------
Total distributions............ (0.10) --
----------------- -----------------
Net asset value, end of period..... $ 16.47 $ 13.27
----------------- -----------------
----------------- -----------------
Total investment return (f) +..... 24.88% 10.58%
----------------- -----------------
----------------- -----------------
Ratios and supplemental data:
Net assets, end of period (in
000's)............................ $ 6,054 $ 1,594
Ratio of net investment income
(loss) to average net assets:
With reimbursement by Chancellor
LGT and expense reductions
(Notes 1, 2, & 5) ++............ 1.35% 1.24%
Without reimbursement by
Chancellor LGT and expense
reductions ++................... 0.03% (6.11)%
Without expenses assumed by
Chancellor LGT (e) ++.......... --% --%
Ratio of expenses to average net
assets:
With reimbursement by Chancellor
LGT and expense reductions
(Notes 1, 2, & 5) ++............ 1.21% 1.22%
Without reimbursement by
Chancellor LGT and expense
reductions ++................... 2.53% 8.57%
Without expenses assumed by
Chancellor LGT (e) ++.......... --% --%
Portfolio turnover ++.............. 76% 38%
Average commission rate per share
paid on portfolio transactions.... $ 0.0101 N/A
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GT GLOBAL
-----------------------------------------------------------------------------
VARIABLE EUROPE FUND
-----------------------------------------------------------------------------
FEBRUARY 10, 1993
YEAR ENDED DECEMBER 31, (COMMENCEMENT OF
--------------------------------------------------------- OPERATIONS) TO
1996 1995 1994 DECEMBER 31, 1993
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of
period............................ $ 16.52 $ 15.22 $ 15.33 $ 12.00
----------------- ----------------- ----------------- --------
Net investment income (loss)..... 0.05(a) 0.18(b) 0.16(c) 0.05(d)
Net realized and unrealized gain
(loss) on investments........... 4.93 1.28 (0.25) 3.28
----------------- ----------------- ----------------- --------
Net increase (decrease)
resulting from operations..... 4.98 1.46 (0.09) 3.33
----------------- ----------------- ----------------- --------
Distributions to shareholders:
From net investment income....... (0.16) (0.16) -- --
From net realized gain on
investments..................... -- -- (0.02) --
In excess of net realized gain on
investments..................... -- -- -- --
Return of capital................ -- -- -- --
----------------- ----------------- ----------------- --------
Total distributions............ (0.16) (0.16) (0.02) --
----------------- ----------------- ----------------- --------
Net asset value, end of period..... $ 21.34 $ 16.52 $ 15.22 $ 15.33
----------------- ----------------- ----------------- --------
----------------- ----------------- ----------------- --------
Total investment return (f) +..... 30.25% 9.66% (0.59)% 27.8%
----------------- ----------------- ----------------- --------
----------------- ----------------- ----------------- --------
Ratios and supplemental data:
Net assets, end of period (in
000's)............................ $ 24,537 $ 15,641 $ 15,020 $ 5,410
Ratio of net investment income
(loss) to average net assets:
With reimbursement by Chancellor
LGT and expense reductions
(Notes 1, 2, & 5) ++............ 0.36% 1.12% 1.48% 1.1%
Without reimbursement by
Chancellor LGT and expense
reductions ++................... 0.09% 0.60% 1.07% 0.4%
Without expenses assumed by
Chancellor LGT (e) ++.......... --% --% --% (2.8)%
Ratio of expenses to average net
assets:
With reimbursement by Chancellor
LGT and expense reductions
(Notes 1, 2, & 5) ++............ 1.20% 1.20% 1.25% 0.7%
Without reimbursement by
Chancellor LGT and expense
reductions ++................... 1.47% 1.72% 1.66% 1.4%
Without expenses assumed by
Chancellor LGT (e) ++.......... --% --% --% 4.6%
Portfolio turnover ++.............. 56% 123% 61% 27%
Average commission rate per share
paid on portfolio transactions.... $ 0.0313 N/A N/A N/A
</TABLE>
- ------------------------
(a) Includes reimbursement by Chancellor LGT Asset Management, Inc. of
Fund operating expenses of $0.05 for the Variable Emerging Markets
Fund, $0.19 for the Variable Infrastructure Fund, $0.11 for the
Variable Natural Resources Fund, $0.04 for the Variable New Pacific
Fund, $0.04 for the Variable Europe Fund, $0.00 for the Money Market
Fund, and $0.14 for the Variable International Fund.
(b) Includes reimbursement by Chancellor LGT Asset Management, Inc. of
Fund operating expenses of $0.09 for the Variable Emerging Markets
Fund, $0.42 for the Variable Infrastructure Fund, $0.47 for the
Variable Natural Resources Fund, $0.01 for the Variable America Fund,
$0.04 for the Variable New Pacific Fund, $0.08 for the Variable Europe
Fund, $0.00 for the Money Market Fund, and $0.22 for the Variable
International Fund (Note 2).
(c) Includes reimbursement by Chancellor LGT Asset Management, Inc. of
Fund operating expenses of $0.07 for the Variable Emerging Markets
Fund, $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).
(d) Includes reimbursement by Chancellor LGT Asset 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).
(e) During the period ended December 31, 1993, Chancellor LGT Asset
Management, Inc. voluntarily assumed certain expenses for the Funds
(Note 2).
(f) Total return information does not reflect expenses that apply to the
Separate Accounts or the related insurance contracts, and inclusion of
these charges would reduce the total return figures for all periods
shown.
The accompanying notes are an integral part of the financial statements.
F66
<PAGE>
GT GLOBAL VARIABLE INVESTMENT FUNDS
FINANCIAL HIGHLIGHTS (cont'd)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GT GLOBAL
-------------------------------------
VARIABLE NATURAL RESOURCES FUND
-------------------------------------
JANUARY 31, 1995
YEAR ENDED (COMMENCEMENT OF
DECEMBER 31, OPERATIONS) TO
1996 DECEMBER 31, 1995
----------------- -----------------
<S> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of
period............................ $ 13.88 $ 12.00
----------------- --------
Net investment income (loss)..... (0.06) (a) 0.73(b)
Net realized and unrealized gain
(loss) on investments........... 7.16 1.91
----------------- --------
Net increase (decrease)
resulting from operations..... 7.10 2.64
----------------- --------
Distributions to shareholders:
From net investment income....... -- (0.71)
From net realized gain on
investments..................... -- --
In excess of net realized gain on
investments..................... -- (0.05)
Return of capital................ -- --
----------------- --------
Total distributions............ -- (0.76)
----------------- --------
Net asset value, end of period..... $ 20.98 $ 13.88
----------------- --------
----------------- --------
Total investment return (f) +..... 51.15% 22.20%
----------------- --------
----------------- --------
Ratios and supplemental data:
Net assets, end of period (in
000's)............................ $ 16,308 $ 1,365
Ratio of net investment income
(loss) to average net assets:
With reimbursement by Chancellor
LGT and expense reductions
(Notes 1, 2, & 5) ++............ (0.60)% 10.87%
Without reimbursement by
Chancellor LGT and expense
reductions ++................... (1.30)% 2.94%
Without expenses assumed by
Chancellor LGT (e) ++.......... --% --%
Ratio of expenses to average net
assets:
With reimbursement by Chancellor
LGT and expense reductions
(Notes 1, 2, & 5) ++............ 1.19% 1.14%
Without reimbursement by
Chancellor LGT and expense
reductions ++................... 1.89% 9.07%
Without expenses assumed by
Chancellor LGT (e) ++.......... --% --%
Portfolio turnover ++.............. 199% 875%
Average commission rate per share
paid on portfolio transactions.... $ 0.0164 N/A
<CAPTION>
GT GLOBAL
-----------------------------------------------------------------------------
VARIABLE AMERICA FUND
-----------------------------------------------------------------------------
FEBRUARY 10, 1993
YEAR ENDED DECEMBER 31, (COMMENCEMENT OF
--------------------------------------------------------- OPERATIONS) TO
1996 1995 1994 DECEMBER 31, 1993
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of
period............................ $ 19.46 $ 15.81 $ 13.75 $ 12.00
----------------- ----------------- ----------------- --------
Net investment income (loss)..... 0.12(a) 0.21(b) 0.48(c) 1.11(d)
Net realized and unrealized gain
(loss) on investments........... 3.18 3.80 2.08 0.64
----------------- ----------------- ----------------- --------
Net increase (decrease)
resulting from operations..... 3.30 4.01 2.56 1.75
----------------- ----------------- ----------------- --------
Distributions to shareholders:
From net investment income....... (0.30) (0.07) (0.50) --
From net realized gain on
investments..................... (2.75) (0.29) -- --
In excess of net realized gain on
investments..................... -- -- -- --
Return of capital................ -- -- -- --
----------------- ----------------- ----------------- --------
Total distributions............ (3.05) (0.36) (0.50) --
----------------- ----------------- ----------------- --------
Net asset value, end of period..... $ 19.71 $ 19.46 $ 15.81 $ 13.75
----------------- ----------------- ----------------- --------
----------------- ----------------- ----------------- --------
Total investment return (f) +..... 18.55% 25.37% 18.88% 14.7%
----------------- ----------------- ----------------- --------
----------------- ----------------- ----------------- --------
Ratios and supplemental data:
Net assets, end of period (in
000's)............................ $ 41,647 $ 37,643 $ 15,257 $ 1,700
Ratio of net investment income
(loss) to average net assets:
With reimbursement by Chancellor
LGT and expense reductions
(Notes 1, 2, & 5) ++............ 0.52% 1.66% 1.83% 14.1%
Without reimbursement by
Chancellor LGT and expense
reductions ++................... 0.46% 1.60% 0.76% 12.8%
Without expenses assumed by
Chancellor LGT (e) ++.......... --% --% --% 7.6%
Ratio of expenses to average net
assets:
With reimbursement by Chancellor
LGT and expense reductions
(Notes 1, 2, & 5) ++............ 0.95% 1.00% 0.98% 0.0%
Without reimbursement by
Chancellor LGT and expense
reductions ++................... 1.01% 1.06% 2.05% 1.3%
Without expenses assumed by
Chancellor LGT (e) ++.......... --% --% --% 6.5%
Portfolio turnover ++.............. 248% 79% 139% 831%
Average commission rate per share
paid on portfolio transactions.... $ 0.0531 N/A N/A N/A
<CAPTION>
GT GLOBAL
-----------------------------------------------------------------------------
VARIABLE NEW PACIFIC FUND
-----------------------------------------------------------------------------
FEBRUARY 10, 1993
YEAR ENDED DECEMBER 31, (COMMENCEMENT OF
--------------------------------------------------------- OPERATIONS) TO
1996 1995 1994 DECEMBER 31, 1993
----------------- ----------------- ----------------- -----------------
Per Share Operating Performance:
Net asset value, beginning of
period............................ $ 13.92 $ 14.01 $ 16.07 $ 12.00
----------------- ----------------- ----------------- --------
Net investment income (loss)..... 0.13(a) 0.20(b) 0.08(c) 0.04(d)
Net realized and unrealized gain
(loss) on investments........... 4.16 (0.23) (2.08) 4.03
----------------- ----------------- ----------------- --------
Net increase (decrease)
resulting from operations..... 4.29 (0.03) (2.00) 4.07
----------------- ----------------- ----------------- --------
Distributions to shareholders:
From net investment income....... (0.19) (0.06) (0.06) --
From net realized gain on
investments..................... -- -- -- --
In excess of net realized gain on
investments..................... -- -- -- --
Return of capital................ -- -- -- --
----------------- ----------------- ----------------- --------
Total distributions............ (0.19) (0.06) (0.06) --
----------------- ----------------- ----------------- --------
Net asset value, end of period..... $ 18.02 $ 13.92 $ 14.01 $ 16.07
----------------- ----------------- ----------------- --------
----------------- ----------------- ----------------- --------
Total investment return (f) +..... 30.97% (0.21)% (12.47)% 33.9%
----------------- ----------------- ----------------- --------
----------------- ----------------- ----------------- --------
Ratios and supplemental data:
Net assets, end of period (in
000's)............................ $ 32,670 $ 23,025 $ 19,391 $ 7,945
Ratio of net investment income
(loss) to average net assets:
With reimbursement by Chancellor
LGT and expense reductions
(Notes 1, 2, & 5) ++............ 0.88% 1.27% 0.83% 0.9%
Without reimbursement by
Chancellor LGT and expense
reductions ++................... 0.60% 1.74% 0.48% 0.3%
Without expenses assumed by
Chancellor LGT (e) ++.......... --% --% --% (2.0)%
Ratio of expenses to average net
assets:
With reimbursement by Chancellor
LGT and expense reductions
(Notes 1, 2, & 5) ++............ 1.12% 1.14% 1.25% 0.6%
Without reimbursement by
Chancellor LGT and expense
reductions ++................... 1.40% 1.61% 1.60% 1.3%
Without expenses assumed by
Chancellor LGT (e) ++.......... --% --% --% 3.6%
Portfolio turnover ++.............. 70% 67% 30% 15%
Average commission rate per share
paid on portfolio transactions.... $ 0.0071 N/A N/A N/A
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GT GLOBAL
-----------------------------------------------------------------------------
MONEY MARKET FUND
-----------------------------------------------------------------------------
FEBRUARY 10, 1993
YEAR ENDED DECEMBER 31, (COMMENCEMENT OF
--------------------------------------------------------- OPERATIONS) TO
1996 1995 1994 DECEMBER 31, 1993
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of
period............................ $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------------- ----------------- ----------------- --------
Net investment income (loss)..... 0.05(a) 0.05(b) 0.03(c) 0.03(d)
Net realized and unrealized gain
(loss) on investments........... -- -- -- --
----------------- ----------------- ----------------- --------
Net increase (decrease)
resulting from operations..... 0.05 0.05 0.03 0.03
----------------- ----------------- ----------------- --------
Distributions to shareholders:
From net investment income....... (0.05) (0.05) (0.03) (0.03)
From net realized gain on
investments..................... -- -- -- --
In excess of net realized gain on
investments..................... -- -- -- --
Return of capital................ -- -- -- --
----------------- ----------------- ----------------- --------
Total distributions............ (0.05) (0.05) (0.03) (0.03)
----------------- ----------------- ----------------- --------
Net asset value, end of period..... $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------------- ----------------- ----------------- --------
----------------- ----------------- ----------------- --------
Total investment return (f) +..... 4.75% 5.26% 3.48% 2.6%
----------------- ----------------- ----------------- --------
----------------- ----------------- ----------------- --------
Ratios and supplemental data:
Net assets, end of period (in
000's)............................ $ 19,794 $ 14,891 $ 19,474 $ 3,775
Ratio of net investment income
(loss) to average net assets:
With reimbursement by Chancellor
LGT and expense reductions
(Notes 1, 2, & 5) ++............ 4.67% 5.15% 3.70% 2.9%
Without reimbursement by
Chancellor LGT and expense
reductions ++................... 4.57% 4.85% 3.64% 2.1%
Without expenses assumed by
Chancellor LGT (e) ++.......... --% --% --% (2.6)%
Ratio of expenses to average net
assets:
With reimbursement by Chancellor
LGT and expense reductions
(Notes 1, 2, & 5) ++............ 0.75% 0.75% 0.75% 0.2%
Without reimbursement by
Chancellor LGT and expense
reductions ++................... 0.85% 1.05% 0.81% 1.0%
Without expenses assumed by
Chancellor LGT (e) ++.......... --% --% --% 5.7%
Portfolio turnover ++.............. N/A N/A N/A N/A
Average commission rate per share
paid on portfolio transactions.... N/A N/A N/A N/A
<CAPTION>
GT GLOBAL
---------------------------------------------------------
VARIABLE INTERNATIONAL FUND
---------------------------------------------------------
YEAR ENDED JULY 5, 1994
DECEMBER 31, (COMMENCEMENT OF
------------------------------------- OPERATIONS) TO
1996 1995 DECEMBER 31, 1994
----------------- ----------------- -----------------
<S> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of
period............................ $ 11.01 $ 11.25 $ 12.00
----------------- -------- --------
Net investment income (loss)..... 0.05(a) 0.09(b) 0.06(c)
Net realized and unrealized gain
(loss) on investments........... 0.89 (0.22) (0.76)
----------------- -------- --------
Net increase (decrease)
resulting from operations..... 0.94 (0.13) (0.70)
----------------- -------- --------
Distributions to shareholders:
From net investment income....... -- (0.09) (0.05)
From net realized gain on
investments..................... (0.04) (0.02) --
In excess of net realized gain on
investments..................... -- -- --
Return of capital................ -- -- --
----------------- -------- --------
Total distributions............ (0.04) (0.11) (0.05)
----------------- -------- --------
Net asset value, end of period..... $ 11.91 $ 11.01 $ 11.25
----------------- -------- --------
----------------- -------- --------
Total investment return (f) +..... 8.52% (1.14)% (5.81)%
----------------- -------- --------
----------------- -------- --------
Ratios and supplemental data:
Net assets, end of period (in
000's)............................ $ 4,782 $ 3,663 $ 2,229
Ratio of net investment income
(loss) to average net assets:
With reimbursement by Chancellor
LGT and expense reductions
(Notes 1, 2, & 5) ++............ 0.48% 0.93% 3.33%
Without reimbursement by
Chancellor LGT and expense
reductions ++................... (0.86)% (1.35)% (2.56)%
Without expenses assumed by
Chancellor LGT (e) ++.......... --% --% --%
Ratio of expenses to average net
assets:
With reimbursement by Chancellor
LGT and expense reductions
(Notes 1, 2, & 5) ++............ 1.15% 1.25% 0.69%
Without reimbursement by
Chancellor LGT and expense
reductions ++................... 2.49% 3.53% 6.58%
Without expenses assumed by
Chancellor LGT (e) ++.......... --% --% --%
Portfolio turnover ++.............. 92% 107% 17%
Average commission rate per share
paid on portfolio transactions.... $ 0.0156 N/A N/A
</TABLE>
- ------------------------
+ Not annualized for periods of less than one year.
++ Annualized for periods of less than one year.
N/A Not applicable.
The accompanying notes are an integral part of the financial statements.
F67
<PAGE>
GT GLOBAL VARIABLE INVESTMENT FUNDS
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
GT Global Variable Investment Series and GT 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 GT Global Variable Investment Series operates as a
series company currently issuing five classes of shares of beneficial interest:
GT Global Variable New Pacific Fund, GT Global Variable Europe Fund, GT Global
Variable America Fund, GT Global Variable International Fund and GT Global Money
Market Fund. GT Global Variable Investment Trust operates as a series company
currently issuing nine classes of shares of beneficial interest: GT Global
Variable Latin America Fund, GT Global Variable Growth & Income Fund, GT Global
Variable Strategic Income Fund, GT Global Variable Global Government Income
Fund, GT Global Variable U.S. Government Income Fund, GT Global Variable
Emerging Markets Fund, GT Global Variable Telecommunications Fund, GT Global
Variable Infrastructure Fund, and GT 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 GT Global Variable Latin
America Fund, GT Global Variable Growth & Income Fund, GT Global Variable
Strategic Income Fund and GT Global Variable Global Government Income Fund,
which are each registered as a non-diversified management investment company
under the 1940 Act.
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, and,
therefore, the financial statements may include certain estimates made by
management.
(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 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 Chancellor LGT Asset
Management, Inc. (the "Manager") to be the primary market.
Fixed income investments are valued at the mean of representative quoted bid and
ask prices for such investments or, if such prices are not available, at prices
for investments of comparative maturity, quality and type; however, when the
Manager deems it appropriate, prices obtained for the day of valuation from a
bond pricing service will be used. Short-term investments with a maturity of 60
days or less are valued at amortized cost adjusted for foreign exchange
translation and market fluctuation, if any.
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by, or under the direction of, 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.
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.
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 differences 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 year
end, resulting from changes in exchange rates.
(C) REPURCHASE AGREEMENTS
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.
F68
<PAGE>
GT GLOBAL VARIABLE INVESTMENT FUNDS
(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 "Statements 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, unless a quotation from only one
broker is available, in which case only that broker's price will be used. 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 received. A Fund can write options only on a covered
bases, 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 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.
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 the Fund exercises a call
option, the cost of the securities acquired by exercising the call is increased
by the premium paid to buy the call. If the Fund exercises a put option, it
realizes a gain or loss from the sale of the underlying security, and the
proceeds from such sale are decreased by the premium originally paid.
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Fund may forego the
opportunity of profit if the market value of the underlying security or index
increases and the option is exercised. The risk in writing a put option is that
the Fund may incur a loss if the market value of the underlying security or
index decreases and the option is exercised. In addition, there is the risk the
Fund may not be able to enter into a closing transaction because of an illiquid
secondary market.
(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract 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.
A Fund may use futures contracts to manage its exposure to the stock or bond
markets and to fluctuations in currency values or interest rates.
(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out basis, unless otherwise specified. Dividends are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Where a high
level of uncertainty exists as to the collection of withholding tax rebate,
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 each 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
F69
<PAGE>
GT GLOBAL VARIABLE INVESTMENT FUNDS
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.
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, or 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
GT GLOBAL FUNDS CARRYFORWARD YEAR
- ------------------------------------------------------------ ------------ ----------
<S> <C> <C>
Variable Strategic Income................................... $1,392,386 2002
.......................................... 820,482 2003
Variable Global Government Income........................... 1,139,600 2002
Variable Latin America...................................... 3,544,129 2003
Variable Growth and Income.................................. 924,355 2003
Variable New Pacific........................................ 562,115 2003
Variable International...................................... 77,169 2003
</TABLE>
(J) DEFERRED ORGANIZATIONAL EXPENSES
Costs incurred by GT 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 the
Manager has advanced certain of the Companies' organizational costs incurred to
date, the Companies may reimburse the Manager for the amount of these advances.
In the event that the Manager 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 Money Market Fund; or the initial
1,666.667 shares of each of the Variable Strategic Income Fund, Variable Global
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 the Manager'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 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
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
Certain of the Funds are permitted to invest in a limited amount of 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 year, restricted securities (excluding 144A issues) are shown at the end of
the Portfolio of Investments for each Fund, if any.
(N) SECURITIES PURCHASED ON A WHEN-ISSUED OR FORWARD COMMITMENT BASIS
A Fund may trade securities on a when-issued or forward commitment basis, with
payment and delivery scheduled for a future date. These transactions are subject
to market fluctuations and are subject to the risk that the value at delivery
may be less than the trade date purchase price. Although the Fund will generally
purchase these securities with the intention of acquiring such securities, they
may sell such securities before the settlement date. These securities, if any,
are identified on the accompanying Portfolio of Investments. The Variable
Strategic Income Fund has purchased and sold when-issue securities during the
year ended December 31, 1996, and has set aside sufficient cash and liquid
securities as collateral for these commitments.
F70
<PAGE>
GT GLOBAL VARIABLE INVESTMENT FUNDS
(O) PORTFOLIO SECURITIES LOANED
At December 31, 1996, 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>
YEAR ENDED
DECEMBER 31,
DECEMBER 31, 1996 1996
---------------------------- ------------
AGGREGATE VALUE CASH FEES
GT GLOBAL ON LOAN COLLATERAL RECEIVED
- ------------------------------------------------------------ --------------- ---------- ------------
<S> <C> <C> <C>
Variable Strategic Income Fund.............................. $1,940,190 $2,082,839 $ 3,554
Variable Global Government Income Fund...................... 2,463,399 2,625,278 5,008
Variable U.S. Government Income Fund........................ -- -- --
Variable Latin America Fund................................. 454,063 512,900 6,978
Variable Growth & Income Fund............................... 2,881,784 3,009,362 13,948
Variable Telecommunications Fund............................ 3,122,488 3,293,000 21,082
Variable Emerging Markets Fund.............................. 13,200 14,400 259
Variable Infrastructure Fund................................ 144,800 151,200 611
Variable Natural Resources Fund............................. 322,625 330,600 1,541
Variable America Fund....................................... 1,633,776 1,695,100 5,336
Variable New Pacific Fund................................... 3,361,947 3,588,044 15,419
Variable Europe Fund........................................ 1,780,815 1,859,691 4,867
Money Market Fund........................................... -- -- --
Variable International Fund................................. 34,100 37,400 598
</TABLE>
For international securities, cash collateral is received by the Funds 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 Funds 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.
(P) BORROWINGS
On December 31, 1996, the GT Global Variable Europe Fund borrowed $239,000 at a
money market rate from the Bank of Boston. For the year ended December 31, 1996,
the weighted average outstanding daily balance of bank loans (based on the
number of days the loans were outstanding) for the GT Global Variable Europe
Fund was $239,000 with a weighted average interest rate of 8.00%. Interest
incurred on this loan for the year ended December 31, 1996, was $53, included in
"Other Expenses" on the Statement of Operations.
2. RELATED PARTIES
Chancellor LGT Asset Management, Inc. is the Fund's investment manager and
administrator. On October 31, 1996, Chancellor Capital Management, Inc. merged
with LGT Asset Management, Inc., and the surviving entity was renamed Chancellor
LGT Asset Management, Inc. The Money Market Fund pays the Manager 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 the Manager 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 the Manager 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.
The Manager 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, Variable Europe Fund, Variable Latin America Fund,
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, the Manager 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 average daily net assets.
Likewise, the Manager has undertaken to limit the total operating expenses
(exclusive of brokerage commissions, interest, taxes and extraordinary items) of
the Money Market Fund to 0.75% of its average daily net assets. From time to
time, the Manager 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.
F71
<PAGE>
GT GLOBAL VARIABLE INVESTMENT FUNDS
GT Global, Inc. ("GT Global"), an affiliate of the Manager, is the Funds'
distributor. GT Global Investor Services, Inc. ("GT Services"), an affiliate of
the Manager and GT Global, is the Funds' transfer agent.
GT Global is the principal underwriter of the Variable Annuity Contracts.
Underwriting commissions retained by GT Global are as follows:
<TABLE>
<CAPTION>
YEAR ENDED
GT GLOBAL DECEMBER 31, 1996
- ------------------------------------------------------------ -----------------
<S> <C>
Variable Strategic Income Fund.............................. $21,150
Variable Global Government Income Fund...................... 5,111
Variable U.S. Government Income Fund........................ 5,338
Variable Latin America Fund................................. 13,187
Variable Growth & Income Fund............................... 15,592
Variable Telecommunications Fund............................ 44,208
Variable Emerging Markets Fund.............................. 19,804
Variable Infrastructure Fund................................ 11,132
Variable Natural Resources Fund............................. 79,433
Variable America Fund....................................... 24,619
Variable New Pacific Fund................................... 22,983
Variable Europe Fund........................................ 11,429
Money Market Fund........................................... 36,723
Variable International Fund................................. 2,917
</TABLE>
The Manager is the pricing and accounting agent for the Funds. The monthly fee
for these services to the Manager is a percentage, not to exceed 0.03% annually,
of each of the Funds' average daily net assets. The annual fee rate is derived
by applying 0.03% to the first $5 billion of assets of all registered mutual
funds advised by the Manager and 0.02% to the assets in excess of $5 billion and
allocating the result according to each Fund's average daily net assets.
The Companies pay each of their Trustees who is not an employee, officer or
director of the Manager, GT Global or GT 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 year ended December 31, 1996:
PURCHASES AND SALES OF SECURITIES
<TABLE>
<CAPTION>
PURCHASES
------------------------------
GT GLOBAL U.S. GOVERNMENT OTHER ISSUES
- ------------------------------------------------------------ --------------- ------------
<S> <C> <C>
Variable Strategic Income Fund.............................. $7,294,996 $ 45,486,859
Variable Global Government Income Fund...................... 5,027,119 17,688,277
Variable U.S. Government Income Fund........................ 2,885,648 1,044,686
Variable Latin America Fund................................. -- 21,190,544
Variable Growth & Income Fund............................... 1,566,614 17,308,032
Variable Telecommunications Fund............................ -- 49,088,166
Variable Emerging Markets Fund.............................. -- 32,878,236
Variable Infrastructure Fund................................ -- 5,673,858
Variable Natural Resources Fund............................. -- 24,630,748
Variable America Fund....................................... -- 84,120,105
Variable New Pacific Fund................................... -- 19,734,764
Variable Europe Fund........................................ -- 12,759,407
Money Market Fund........................................... -- --
Variable International Fund................................. -- 4,892,948
</TABLE>
F72
<PAGE>
GT GLOBAL VARIABLE INVESTMENT FUNDS
<TABLE>
<CAPTION>
SALES
------------------------------
GT GLOBAL U.S. GOVERNMENT OTHER ISSUES
- ------------------------------------------------------------ --------------- ------------
Variable Strategic Income Fund.............................. $8,177,845 $ 43,849,660
<S> <C> <C>
Variable Global Government Income Fund...................... 5,545,981 19,533,176
Variable U.S. Government Income Fund........................ 2,165,773 --
Variable Latin America Fund................................. -- 20,191,543
Variable Growth & Income Fund............................... 1,632,971 16,050,929
Variable Telecommunications Fund............................ -- 42,645,663
Variable Emerging Markets Fund.............................. -- 29,017,419
Variable Infrastructure Fund................................ -- 2,252,320
Variable Natural Resources Fund............................. -- 14,279,346
Variable America Fund....................................... -- 80,600,556
Variable New Pacific Fund................................... -- 18,366,106
Variable Europe Fund........................................ -- 10,595,663
Money Market Fund........................................... -- --
Variable International Fund................................. -- 4,018,774
</TABLE>
The Funds' written options activity for the year ended December 31, 1996, was as
follows:
GT GLOBAL VARIABLE STRATEGIC INCOME FUND
COVERED CALL OPTIONS WRITTEN
<TABLE>
<CAPTION>
UNDERLYING
PRINCIPAL AMOUNT PREMIUMS
---------------- --------
<S> <C> <C>
Options outstanding at December 31, 1995.................... $ -- $ --
Options written during the year ended December 31, 1996..... $ 708,000 $16,100
Options cancelled in closing purchase transactions.......... (508,000) (11,900 )
Options expired prior to exercise........................... (200,000) (4,200 )
Options exercised........................................... -- --
---------------- --------
Options outstanding at December 31, 1996.................... $ -- $ --
---------------- --------
---------------- --------
</TABLE>
4. CAPITAL SHARES
At December 31, 1996, 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>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1996 DECEMBER 31, 1995
--------------------------- ---------------------------
GT GLOBAL VARIABLE STRATEGIC INCOME FUND SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------- ------------ ------------- ------------ -------------
<S> <C> <C> <C> <C>
Shares sold....................................... 3,455,994 $ 43,161,383 1,985,281 $ 22,200,799
Shares issued in connection with reinvestment of
distributions.................................... 161,635 2,004,763 179,542 1,991,044
------------ ------------- ------------ -------------
3,617,629 45,166,146 2,164,823 24,191,843
Shares repurchased................................ (3,384,466) (42,069,061) (2,185,897) (24,283,139)
------------ ------------- ------------ -------------
Net increase (decrease)........................... 233,163 $ 3,097,085 (21,074) $ (91,296)
------------ ------------- ------------ -------------
------------ ------------- ------------ -------------
GT GLOBAL VARIABLE GLOBAL GOVERNMENT INCOME FUND
- --------------------------------------------------
Shares sold....................................... 595,260 $ 6,669,492 1,119,737 $ 11,927,543
Shares issued in connection with reinvestment of
distributions.................................... 63,372 706,122 64,913 722,395
------------ ------------- ------------ -------------
658,632 7,375,614 1,184,650 12,649,938
Shares repurchased................................ (787,028) (8,839,632) (1,054,689) (11,200,397)
------------ ------------- ------------ -------------
Net increase (decrease)........................... (128,396) $ (1,464,018) 129,961 $ 1,449,541
------------ ------------- ------------ -------------
------------ ------------- ------------ -------------
GT GLOBAL VARIABLE US GOVERNMENT INCOME FUND
- --------------------------------------------------
Shares sold....................................... 333,844 $ 3,803,016 1,824,240 $ 20,431,040
Shares issued in connection with reinvestment of
distributions.................................... 23,060 262,014 18,588 234,899
------------ ------------- ------------ -------------
356,904 4,065,030 1,842,828 20,665,939
Shares repurchased................................ (386,658) (4,430,300) (1,556,416) (17,459,191)
------------ ------------- ------------ -------------
Net increase (decrease)........................... (29,754) $ (365,270) 286,412 $ 3,206,748
------------ ------------- ------------ -------------
------------ ------------- ------------ -------------
</TABLE>
F73
<PAGE>
GT GLOBAL VARIABLE INVESTMENT FUNDS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1996 DECEMBER 31, 1995
--------------------------- ---------------------------
GT GLOBAL VARIABLE LATIN AMERICA FUND SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------- ------------ ------------- ------------ -------------
<S> <C> <C> <C> <C>
Shares sold....................................... 2,062,574 $ 28,548,855 2,569,344 $ 35,542,045
Shares issued in connection with reinvestment of
distributions.................................... 45,515 624,926 236,651 2,991,268
------------ ------------- ------------ -------------
2,108,089 29,173,781 2,805,995 38,533,313
Shares repurchased................................ (2,151,334) (29,883,182) (2,602,904) (36,198,875)
------------ ------------- ------------ -------------
Net increase (decrease)........................... (43,245) $ (709,401) 203,091 $ 2,334,438
------------ ------------- ------------ -------------
------------ ------------- ------------ -------------
GT GLOBAL VARIABLE GROWTH & INCOME FUND
- --------------------------------------------------
Shares sold....................................... 1,910,536 $ 29,111,115 776,808 $ 10,555,910
Shares issued in connection with reinvestment of
distributions.................................... 55,274 839,489 59,956 818,466
------------ ------------- ------------ -------------
1,965,810 29,950,604 836,764 11,374,376
Shares repurchased................................ (1,857,484) (28,213,931) (708,880) (9,669,648)
------------ ------------- ------------ -------------
Net increase...................................... 108,326 $ 1,736,673 127,884 $ 1,704,728
------------ ------------- ------------ -------------
------------ ------------- ------------ -------------
<CAPTION>
GT GLOBAL VARIABLE TELECOMMUNICATIONS FUND
- --------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold....................................... 2,031,581 $ 37,384,916 1,453,558 $ 23,188,408
Shares issued in connection with reinvestment of
distributions.................................... 354,065 6,443,990 68,050 1,045,935
------------ ------------- ------------ -------------
2,385,646 43,828,906 1,521,608 24,234,343
Shares repurchased................................ (1,908,080) (34,595,566) (1,087,480) (17,197,275)
------------ ------------- ------------ -------------
Net increase...................................... 477,566 $ 9,233,340 434,128 $ 7,037,068
------------ ------------- ------------ -------------
------------ ------------- ------------ -------------
GT GLOBAL VARIABLE EMERGING MARKETS FUND
- --------------------------------------------------
Shares sold....................................... 2,518,560 $ 32,771,217 1,173,549 $ 12,723,265
Shares issued in connection with reinvestment of
distributions.................................... -- -- 8,331 90,089
------------ ------------- ------------ -------------
2,518,560 32,771,217 1,181,880 12,813,354
Shares repurchased................................ (2,109,935) (27,696,344) (967,577) (10,519,830)
------------ ------------- ------------ -------------
Net increase...................................... 408,625 $ 5,074,873 214,303 $ 2,293,524
------------ ------------- ------------ -------------
------------ ------------- ------------ -------------
<CAPTION>
JANUARY 31, 1995
(COMMENCEMENT OF
OPERATIONS) TO DECEMBER 31,
1995
---------------------------
GT GLOBAL VARIABLE INFRASTRUCTURE FUND SHARES AMOUNT
- -------------------------------------------------- ------------ -------------
<S> <C> <C> <C> <C>
Shares sold....................................... 469,810 $ 7,225,756 174,610 $ 2,285,935
Shares issued in connection with reinvestment of
distributions.................................... 1,715 26,769 -- --
------------ ------------- ------------ -------------
471,525 7,252,525 174,610 2,285,935
Shares repurchased................................ (224,095) (3,457,346) (62,813) (826,452)
------------ ------------- ------------ -------------
Net increase...................................... 247,430 $ 3,795,179 111,797 $ 1,459,483
------------ ------------- ------------ -------------
------------ ------------- ------------ -------------
<CAPTION>
GT GLOBAL VARIABLE NATURAL RESOURCES FUND
- --------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold....................................... 1,819,670 $ 33,416,057 228,814 $ 3,086,623
Shares issued in connection with reinvestment of
distributions.................................... -- -- 4,976 67,477
------------ ------------- ------------ -------------
1,819,670 33,416,057 233,790 3,154,100
Shares repurchased................................ (1,140,721) (20,919,006) (143,765) (1,940,086)
------------ ------------- ------------ -------------
Net increase...................................... 678,949 $ 12,497,051 90,025 $ 1,214,014
------------ ------------- ------------ -------------
------------ ------------- ------------ -------------
<CAPTION>
YEAR ENDED
DECEMBER 31, 1995
---------------------------
GT GLOBAL VARIABLE AMERICA FUND SHARES AMOUNT
- -------------------------------------------------- ------------ -------------
<S> <C> <C> <C> <C>
Shares sold....................................... 2,859,324 $ 55,470,879 3,800,437 $ 72,967,274
Shares issued in connection with reinvestment of
distributions.................................... 303,755 5,480,666 31,220 606,288
------------ ------------- ------------ -------------
3,163,079 60,951,545 3,831,657 73,573,562
Shares repurchased................................ (2,984,751) (57,915,239) (2,862,326) (55,970,932)
------------ ------------- ------------ -------------
Net increase...................................... 178,328 $ 3,036,306 969,331 $ 17,602,630
------------ ------------- ------------ -------------
------------ ------------- ------------ -------------
</TABLE>
F74
<PAGE>
GT GLOBAL VARIABLE INVESTMENT FUNDS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1996 DECEMBER 31, 1995
--------------------------- ---------------------------
GT GLOBAL VARIABLE NEW PACIFIC FUND SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------- ------------ ------------- ------------ -------------
<S> <C> <C> <C> <C>
Shares sold....................................... 10,835,385 $ 176,690,218 7,058,585 $ 95,900,026
Shares issued in connection with reinvestment of
distributions.................................... 20,259 329,817 6,484 90,012
------------ ------------- ------------ -------------
10,855,644 177,020,035 7,065,069 95,990,038
Shares repurchased................................ (10,696,698) (175,737,852) (6,795,204) (92,832,446)
------------ ------------- ------------ -------------
Net increase...................................... 158,946 $ 1,282,183 269,865 $ 3,157,592
------------ ------------- ------------ -------------
------------ ------------- ------------ -------------
GT GLOBAL VARIABLE EUROPE FUND
- --------------------------------------------------
Shares sold....................................... 4,041,258 $ 77,833,163 2,497,482 $ 39,741,019
Shares issued in connection with reinvestment of
distributions.................................... 7,876 155,793 9,965 154,451
------------ ------------- ------------ -------------
4,049,134 77,988,956 2,507,447 39,895,470
Shares repurchased................................ (3,846,425) (74,160,899) (2,547,574) (40,557,920)
------------ ------------- ------------ -------------
Net increase (decrease)........................... 202,709 $ 3,828,057 (40,127) $ (662,450)
------------ ------------- ------------ -------------
------------ ------------- ------------ -------------
<CAPTION>
GT GLOBAL MONEY MARKET FUND
- --------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold....................................... 316,100,021 $ 316,100,051 178,846,705 $ 178,851,599
Shares issued in connection with reinvestment of
distributions.................................... 708,413 708,413 823,767 818,843
------------ ------------- ------------ -------------
316,808,434 316,808,464 179,670,472 179,670,442
Shares repurchased................................ (311,904,996) (311,904,996) (184,253,572) (184,253,572)
------------ ------------- ------------ -------------
Net increase (decrease)........................... 4,903,438 $ 4,903,468 (4,583,100) $ (4,583,130)
------------ ------------- ------------ -------------
------------ ------------- ------------ -------------
GT GLOBAL VARIABLE INTERNATIONAL FUND
- --------------------------------------------------
Shares sold....................................... 804,796 $ 9,121,897 1,403,934 $ 14,984,693
Shares issued in connection with reinvestment of
distributions.................................... 1,276 14,683 3,283 35,810
------------ ------------- ------------ -------------
806,072 9,136,580 1,407,217 15,020,503
Shares repurchased................................ (737,004) (8,376,359) (1,272,826) (13,587,017)
------------ ------------- ------------ -------------
Net increase...................................... 69,068 $ 760,221 134,391 $ 1,433,486
------------ ------------- ------------ -------------
------------ ------------- ------------ -------------
</TABLE>
5. EXPENSE REDUCTIONS
The Manager has directed certain portfolio trades to brokers who paid a portion
of the Funds' expenses. The Funds' expenses were reduced as follows under these
arrangements:
<TABLE>
<CAPTION>
YEAR ENDED
GT GLOBAL DECEMBER 31, 1996
- ------------------------------------------------------------ -----------------
<S> <C>
Variable Strategic Income Fund.............................. $ --
Variable Global Government Income Fund...................... --
Variable U.S. Government Income Fund........................ --
Variable Latin America Fund................................. 10,929
Variable Growth & Income Fund............................... 3,243
Variable Telecommunications Fund............................ 8,003
Variable Emerging Markets Fund.............................. 11,363
Variable Infrastructure Fund................................ 652
Variable Natural Resources Fund............................. 2,864
Variable America Fund....................................... 13,978
Variable New Pacific Fund................................... 23,220
Variable Europe Fund........................................ 5,079
Money Market Fund........................................... --
Variable International Fund................................. 3,533
</TABLE>
FEDERAL TAX INFORMATION (UNAUDITED):
Pursuant to Section 852 of the Internal Revenue Code, the Funds designate the
following amounts as capital gain dividends for the fiscal year ended December
31, 1996:
<TABLE>
<CAPTION>
CAPITAL GAIN
GT GLOBAL DIVIDEND
- ------------------------------------------------------------ ------------
<S> <C>
Variable Telecommunications................................. $1,782,794
Variable America............................................ 551,518
</TABLE>
F75
<PAGE>
GT GLOBAL VARIABLE INVESTMENT FUNDS
NOTES
- --------------------------------------------------------------------------------
<PAGE>
[LOGO]
GT Global, Inc.
Fifty California Street
27th Floor
San Francisco, California
94111-4624
DATED MATERIAL
PLEASE EXPEDITE
GT GLOBAL ALLOCATOR
VARAR702M
