GT GLOBAL VARIABLE INVESTMENT SERIES
497, 1999-05-06
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<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
- --------------------------------------------------------------------------------
 
      GT GLOBAL VARIABLE NEW PACIFIC FUND
       GT GLOBAL VARIABLE EUROPE FUND
       GT GLOBAL VARIABLE INTERNATIONAL FUND
       GT GLOBAL VARIABLE AMERICA FUND
       GT GLOBAL VARIABLE INFRASTRUCTURE FUND
       GT GLOBAL VARIABLE NATURAL RESOURCES FUND
       GT GLOBAL VARIABLE TELECOMMUNICATIONS FUND
       GT GLOBAL VARIABLE LATIN AMERICA FUND
       GT GLOBAL VARIABLE EMERGING MARKETS 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 MONEY MARKET FUND
 
PROSPECTUS
MAY 3, 1999
- --------------------------------------------------------------------------------
 
                                          Fund shares are available as a pooled
                                          funding vehicle for variable annuity
                                          contracts offered by participating
                                          insurance companies. This prospectus
                                          should be accompanied by the
                                          prospectus for such contracts. These
                                          prospectuses contain important
                                          information. Please read them before
                                          investing and keep them for future
                                          reference.
 
                                          As with all other mutual fund
                                          securities, the Securities and
                                          Exchange Commission has not approved
                                          or disapproved these securities or
                                          determined whether the information in
                                          this prospectus is adequate or
                                          accurate. Anyone who tells you
                                          otherwise is committing a crime.
 
                                          An investment in GT Global Money
                                          Market Fund is not insured or
                                          guaranteed by the Federal Deposit
                                          Insurance Corporation or any other
                                          government agency. Although GT Global
                                          Money Market Fund seeks to preserve
                                          the value of your investment at $1.00
                                          per share, it is possible to lose
                                          money by investing in GT Global Money
                                          Market Fund.
 
                               Prospectus Page 1
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
                                     [LOGO]
 
                                                                     Invest with
                                                Discipline-Registered Trademark-
 
                               TABLE OF CONTENTS
- ------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                         Page
                                                                                      -----------
<S>                                                                                   <C>
INVESTMENT OBJECTIVES AND STRATEGIES, PRINCIPAL RISKS OF INVESTING IN THE FUNDS,
AND PERFORMANCE INFORMATION.........................................................            3
    New Pacific Fund................................................................            3
    Europe Fund.....................................................................            5
    International Fund..............................................................            7
    America Fund....................................................................            9
    Infrastructure Fund.............................................................           11
    Natural Resources Fund..........................................................           13
    Telecommunications Fund.........................................................           15
    Latin America Fund..............................................................           17
    Emerging Markets Fund...........................................................           20
    Growth & Income Fund............................................................           22
    Strategic Income Fund...........................................................           24
    Global Government Income Fund...................................................           27
    U.S. Government Income Fund.....................................................           30
    Money Market Fund...............................................................           32
FUND MANAGEMENT.....................................................................           34
    The Advisor and Sub-Advisors....................................................           34
    Advisor Compensation............................................................           34
    Sub-Advisor Compensation........................................................           34
    Portfolio Managers..............................................................           35
FINANCIAL HIGHLIGHTS................................................................           40
HOW TO INVEST.......................................................................           54
PRICING OF SHARES...................................................................           54
TAXES...............................................................................           55
OBTAINING ADDITIONAL INFORMATION....................................................           56
</TABLE>
 
The AIM Family of Funds, The AIM Family of Funds and Design (i.e., the AIM
logo), AIM and Design, AIM, AIM LINK, AIM Institutional Funds, aimfunds.com, La
Familia AIM de Fondos, La Familia AIM de Fondos and Design and Invest with
Discipline are registered service marks and AIM Bank Connection is a service
mark of A I M Management Group Inc.
 
                               Prospectus Page 2
<PAGE>
                           INVESTMENT OBJECTIVES AND
                         STRATEGIES, PRINCIPAL RISKS OF
                          INVESTING IN THE FUNDS, AND
                            PERFORMANCE INFORMATION
 
- --------------------------------------------------------------------------------
 
NEW PACIFIC FUND
 
INVESTMENT OBJECTIVE AND STRATEGIES
The fund's investment objective is long-term growth of capital.
 
The fund seeks to achieve its objective by investing, normally, at least 65% of
its total assets in the securities of companies domiciled in twelve countries,
other than Japan, located in the Pacific region, including developing countries,
ie., those that are in the initial stages of their industrial cycles. These
countries are designated as the fund's primary investment area, and the list of
countries may be revised with the approval of the fund's Board of Trustees. The
fund considers a company to be domiciled in a particular country if it (1) is
organized under the laws of a particular country and has a principal office in a
particular country; or (2) derives 50% or more of its total revenues from
business in that country, provided that, in the view of the portfolio managers,
the value of the issuers' securities tend to reflect such country's development
to a greater extent than developments elsewhere. The fund will normally invest
in the securities of companies located in at least three different countries.
 
The fund may invest up to 35% of its total assets in equity securities of
issuers domiciled outside of its primary investment area, including developing
countries. The fund may also invest up to 35% of its total assets in U.S. and
foreign investment-grade debt securities, or securities deemed by the portfolio
managers to be of comparable quality. The fund may invest in securities of
issuers located in developing countries, i.e., those that are in the initial
stages of their industrial cycle.
 
In selecting investments, the fund's portfolio managers seek to identify those
countries and industries where political and economic factors, including
currency movements, are likely to produce above-average growth rates. The fund's
portfolio managers then balance the potential benefits with the risks of
investing in those countries and industries. The portfolio managers further
allocate investments among fixed-income securities of particular issuers on the
basis of their views as to the best values then available in the marketplace.
The portfolio managers consider whether to sell a particular security when any
of those factors materially changes.
 
In anticipation of or in response to adverse market conditions or for cash
management purposes, the fund may hold all or a portion of its assets in cash
(U.S. dollars, foreign currencies or multinational currency units), money market
instruments, or high-quality debt securities. As a result, the fund may not
achieve its investment objective.
 
PRINCIPAL RISKS OF INVESTING IN THE FUND
There is a risk that you could lose all or a portion of your investment in the
fund. The value of your investment in the fund will go up and down with the
prices of the securities in which the fund invests. The prices of equity
securities change in response to many factors, including the historical and
prospective earnings of the issuer, the value of its assets, general economic
conditions, interest rates, investor perceptions, and market liquidity.
 
The value of the fund's shares is particularly vulnerable to factors affecting
Pacific region countries, such as substantial economic or regulatory changes.
Because the fund focuses its investments in Pacific region countries, the value
of your shares may rise and fall more than the value of shares of a fund that
invests more broadly.
 
The prices of foreign securities may be further affected by other factors
including:
 
CURRENCY EXCHANGE RATES -- The dollar value of the fund's foreign investments
will be affected by changes in the exchange rates between the dollar and the
currencies in which those investments are traded.
 
POLITICAL AND ECONOMIC CONDITIONS -- The value of the fund's foreign investments
may be adversely affected by political and social instability in their home
countries and by changes in economic or taxation policies in those countries.
 
REGULATIONS -- Foreign companies generally are subject to less stringent
regulations, including financial and accounting controls, than are U.S.
companies. As a result, there generally is less
 
                               Prospectus Page 3
<PAGE>
publicly available information about foreign companies than about U.S.
companies.
 
MARKETS -- The securities markets of other countries are smaller than U.S.
securities markets. As a result, many foreign securities may be less liquid and
more volatile than U.S. securities.
 
These factors may affect the prices of securities issued by foreign companies
located in developing countries more than those in countries with mature
economies. For example, many developing countries have, in the past, experienced
high rates of inflation or sharply devaluated their currencies against the U.S.
dollar, thereby causing the value of investments located in those countries to
decline. Transaction costs are often higher in developing countries and there
may be delays in settlement procedures.
 
The value of your shares could be adversely affected if the computer systems
used by the fund's investment advisor and other service providers are unable to
distinguish the year 2000 from the year 1900.
 
The fund's investment advisor and independent technology consultants are working
to avoid year 2000-related problems in its systems and to obtain assurances that
other service providers are taking similar steps. Year 2000 problems may also
affect issuers in whose securities the fund invests.
 
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
 
PERFORMANCE INFORMATION
The bar chart and table shown below provide an indication of the risks of
investing in the fund. The fund is offered exclusively for investment in
separate accounts that fund certain variable annuity contracts offered by
certain life insurance companies. The information below does not reflect charges
and fees associated with those separate accounts. Those charges and fees will
reduce returns. The fund's past performance is not necessarily an indication of
its future performance.
 
                              ANNUAL TOTAL RETURNS
 
The following bar chart shows changes in the performance of the fund's shares
from year to year. The bar chart does not reflect charges or fees associated
with investment in the fund through separate accounts. If it did, the total
annual returns would be lower.
 
During the 5-year period shown in the bar chart, the highest quarterly return
was 18.00% (quarter ended 12/31, 1998) and the lowest quarterly return was
- -30.58% (quarter ended 12/31, 1997).
 
PERFORMANCE TABLE
The following performance table compares the fund's performance to that of a
broad-based securities market index.
 
                         AVERAGE ANNUAL TOTAL RETURN(1)
                   (FOR THE PERIODS ENDED DECEMBER 31, 1998)
 
<TABLE>
<CAPTION>
                                                       LIFE
                              1 YEAR      5 YEARS    OF FUND*
                              ---------  ---------  ----------
<S>                           <C>        <C>        <C>
New Pacific Fund............     (14.54)%    (10.46)%     (4.32)%
MSCI [Combined] Pacific Free
  ex Japan Index**..........      (8.40)%     (7.73)%      2.78%
</TABLE>
 
- --------------
(1)   Assumes reinvestment of dividends and distributions.
 
*   This column shows the returns of the fund and of MSCI [Combined] Pacific
    Free ex Japan Index since February 10, 1993, the fund's date of inception,
    and February 1, 1993, respectively.
 
**  The Morgan Stanley Capital International [Combined] Pacific ex Japan Index
    measures the performance of 5 developed and emerging markets in the Pacific
    rim, excluding Japan. The index excludes shares that are not readily
    purchased by non-local investors.
 
                               Prospectus Page 4
<PAGE>
EUROPE FUND
 
INVESTMENT OBJECTIVE AND STRATEGIES
The fund's investment objective is long-term growth of capital.
 
The fund seeks to achieve its objective by investing, normally, at least 65% of
its total assets in equity securities of companies domiciled in eighteen
countries located in Europe. These countries are designated as the fund's
primary investment area and the list of countries may be revised with the
approval of the fund's Board of Trustees. The fund normally considers a company
to be domiciled in a particular country if it (1) is organized under the laws of
a particular country and has a principal office in a particular country; or (2)
derives 50% or more of its total revenues from business in that country,
provided that, in the view of the portfolio manager, the value of the issuer's
securities tend to reflect such country's development to a greater extent than
developments elsewhere.
 
The fund may invest up to 35% of its total assets in equity securities of
issuers domiciled outside of its primary investment area or in U.S. and foreign
investment-grade debt securities, or securities deemed by the fund's portfolio
managers to be of comparable quality. The fund may invest in securities of
issuers located in developing countries, i.e., those that are in the initial
stages of their industrial cycle.
 
In selecting investments, the portfolio manager seeks to identify those
countries and industries where political and economic factors, including
currency movements, are likely to produce above-average growth rates. The
portfolio managers then balance the potential benefits with the risks of
investing in those countries and industries. The portfolio managers further
allocate investments among fixed-income securities of particular issuers on the
basis of their views as to the best values then available in the marketplace.
The portfolio managers consider whether to sell a particular security when any
of those factors materially changes.
 
In anticipation of or in response to adverse market conditions or for cash
management purposes, the fund may hold all or a portion of its assets in cash
(U.S. dollars, foreign currencies or multinational currency units), money market
instruments, or high-quality debt securities. In anticipation of or in response
to adverse market conditions, the fund may also invest up to 100% of its total
assets in the securities of U.S. issuers and denominated in U.S. dollars. As a
result, the fund may not achieve its investment objective.
 
PRINCIPAL RISKS OF INVESTING IN THE FUND
There is a risk that you could lose all or a portion of your investment in the
fund. The value of your investment in the fund will go up and down with the
prices of the securities in which the fund invests. The prices of equity
securities change in response to many factors, including the historical and
prospective earnings of the issuer, the value of its assets, general economic
conditions, interest rates, investor perceptions, and market liquidity.
 
Because fund focuses its investments in European countries, the value of your
shares may rise and fall more than the value of shares of a fund that invests in
a broader geographic region.
 
The prices of securities of foreign issuers may be further affected by other
factors, including:
 
CURRENCY EXCHANGE RATES -- The dollar value of the fund's foreign investments
will be affected by changes in the exchange rates between the dollar and the
currencies in which those investments are traded.
 
POLITICAL AND ECONOMIC CONDITIONS -- The value of the fund's investments may be
adversely affected by political and social instability in their home countries
and by changes in economic or taxation policies in those countries.
 
REGULATIONS -- Foreign companies generally are subject to less stringent
regulations, including financial and accounting controls, than are U.S.
companies. As a result, there generally is less publicly available information
about foreign companies than about U.S. companies.
 
MARKETS -- The securities markets of other foreign countries are smaller than
U.S. securities markets. As a result, many foreign securities may be less liquid
and more volatile than U.S. securities.
 
These factors may affect the prices of securities issued by foreign countries
located in developing countries more than those in countries with mature
economies. For example, many developing countries have, in the past, experienced
high rates of inflation or sharply devaluated their currencies against the U.S.
dollar, thereby causing the value of investments located in those countries to
decline. Transaction costs are often higher in developing countries and there
may be delays in settlement procedures.
 
The value of your shares could be adversely affected if the computer systems
used by the fund's investment advisor and other service providers are unable to
distinguish the year 2000 from the year 1900.
 
The fund's investment advisor and independent technology consultants are working
to avoid year 2000-related problems in its systems and to obtain assurances that
other service providers are taking similar steps. Year 2000 problems may also
affect issuers in whose securities the fund invests.
 
                               Prospectus Page 5
<PAGE>
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
 
PERFORMANCE INFORMATION
The bar chart and table shown below provide an indication of the risks of
investing in the fund. The fund is offered exclusively for investment in
separate accounts that fund certain variable annuity contracts offered by
certain life insurance companies. The information below does not reflect charges
and fees associated with those separate accounts. Those charges and fees will
reduce returns. The fund's past performance is not necessarily an indication of
its future performance.
 
                              ANNUAL TOTAL RETURNS
 
The following bar chart shows changes in the performance of the fund's shares
from year to year. The bar chart does not reflect charges or fees associated
with investment in the fund through separate accounts. If it did, the total
annual returns would be lower.
 
During the 5-year period shown in the bar chart, the highest quarterly return
was 22.51% (quarter ended 3/31, 1998) and the lowest quarterly return was
- -21.24% (quarter ended 9/30, 1998).
 
PERFORMANCE TABLE
The following performance table compares the fund's performance to that of a
broad-based securities market index.
 
                         AVERAGE ANNUAL TOTAL RETURN(1)
                   (FOR THE PERIODS ENDED DECEMBER 31, 1998)
 
<TABLE>
<CAPTION>
                                                   LIFE OF
                           1 YEAR      5 YEARS      FUND*
                           ---------  ---------  ------------
<S>                        <C>        <C>        <C>
Europe Fund..............      15.48%     13.65%      16.21%
MSCI Europe Index**......      28.53%     19.10%      21.03%
</TABLE>
 
- --------------
(1)   Assumes reinvestment of dividends and distributions
 
*   This column shows the returns of the fund and of MSCI Europe Index since
    February 10, 1993, the fund's date of inception, and February 1, 1993,
    respectively.
 
**  The Morgan Stanley Capital International Europe Index is an unmanaged index
    that is designed to represent the performance of developed stock markets in
    Europe.
 
                               Prospectus Page 6
<PAGE>
INTERNATIONAL FUND
 
INVESTMENT OBJECTIVE AND STRATEGIES
The fund's investment objective is long-term growth of capital.
 
The fund seeks to achieve its objective by investing, normally, at least 65% of
its total assets in the securities of companies domiciled in the following
countries: Argentina, Australia, Austria, Belgium, Brazil, Canada, Chile,
Colombia, Denmark, Finland, France, Germany, Greece, Hong Kong, India,
Indonesia, Ireland, Israel, Italy, Japan, Luxembourg, Malaysia, Mexico, the
Netherlands, New Zealand, Norway, Pakistan, Peru, the Philippines, Portugal,
Singapore, South Korea, Spain, Sweden, Switzerland, Taiwan, Thailand, Turkey,
the United Kingdom, and Venezuela. These countries are designated as the fund's
primary investment area and the list of countries may be revised with the
approval of the fund's Board of Trustees. The fund considers a company to be
domiciled in a particular country if it (1) is organized under the laws of a
particular country and has a principal office in a particular country; or (2)
derives 50% or more of its total revenues from business in that country,
provided that, in the view of the fund's portfolio managers, the value of the
issuers' securities tend to reflect such country's development to a greater
extent than developments elsewhere.
 
The fund may invest up to 35% of its total assets in equity securities of
companies domiciled outside its primary investment area, including developing
countries. The fund may also invest up to 35% of its total assets in U.S. and
foreign investment grade debt securities, or securities deemed by the portfolio
managers to be of comparable quality. The fund may invest in securities of
issuers located in developing countries, i.e., those that are in the initial
stages of their industrial cycle.
 
In selecting investments, the portfolio managers seek to identify those
countries and industries where political and economic factors, including
currency movements, are likely to produce above-average growth rates. The
portfolio managers balance the potential benefits with the risks of investing in
those countries and industries. The portfolio managers further allocate
investments among fixed-income securities of particular issuers on the basis of
their views as to the best values then available in the marketplace. The
portfolio managers consider whether to sell a particular security when any of
those factors materially changes.
 
In anticipation of or in response to adverse market conditions or for cash
management purposes, the fund may hold cash or invest all or a portion of its
assets in cash (U.S. dollars, foreign currencies or multinational currency
units), money market instruments, or high-quality debt securities. As a result,
the fund may not achieve its investment objective.
 
The fund may engage in active and frequent trading of portfolio securities to
achieve its investment objective. If it does trade in this way, it may incur
increased transaction costs and brokerage commissions, both of which can lower
the actual return on your investment. Active trading may also increase
short-term capital gains and losses, which may affect the taxes you have to pay.
 
PRINCIPAL RISKS OF INVESTING IN THE FUND
There is a risk that you could lose all or a portion of your investment in the
fund. The value of your investment in the fund will go up and down with the
prices of the securities in which the fund invests. The prices of equity
securities change in response to many factors, including the historical and
prospective earnings of the issuer, the value of its assets, general economic
conditions, interest rates, investor perceptions, and market liquidity.
 
In addition, the prices of securities of foreign issuers may be further affected
by other factors including:
 
CURRENCY EXCHANGE RATES -- The dollar value of the fund's foreign investments
will be affected by changes in the exchange rates between the dollar and the
currencies in which those investments are traded.
 
POLITICAL AND ECONOMIC CONDITIONS -- The value of the fund's foreign investments
may be adversely affected by political and social instability in their home
countries and by changes in economic or taxation policies in those countries.
 
REGULATIONS -- Foreign companies generally are subject to less stringent
regulations, including financial and accounting controls, than are U.S.
companies. As a result, there generally is less publicly available information
about foreign companies than about U.S. companies.
 
MARKETS -- The securities markets of some foreign countries are smaller and less
developed than U.S. securities markets. As a result, many foreign securities may
be less liquid and more volatile than U.S. securities.
 
These factors may affect the prices of securities issued by foreign companies
located in developing countries more than those in countries with mature
economies. For example, many developing countries have, in the past, experienced
high rates of inflation or sharply devaluated their currencies against the U.S.
dollar, thereby causing the value of investments located in those countries to
decline. Transaction costs are often higher in developing
 
                               Prospectus Page 7
<PAGE>
countries and there may be delays in settlement procedures.
 
The value of your shares could be adversely affected if the computer systems
used by the fund's investment advisor and other service providers are unable to
distinguish the year 2000 from the year 1900.
 
The fund's investment advisor and independent technology consultants are working
to avoid year 2000-related problems in its systems and to obtain assurances that
other service providers are taking similar steps. Year 2000 problems may also
affect issuers in whose securities the fund invests.
 
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
 
PERFORMANCE INFORMATION
The bar chart and table shown below provide an indication of the risks of
investing in the fund. The fund is offered exclusively for investment in
separate accounts that fund certain variable annuity contracts offered by
certain life insurance companies. The information below does not reflect charges
and fees associated with those separate accounts. Those charges and fees will
reduce returns. The fund's past performance is not necessarily an indication of
its future performance.
 
                              ANNUAL TOTAL RETURNS
 
The following bar chart shows changes in the performance of the fund's shares
from year to year. The bar chart does not reflect charges or fees associated
with investment in the fund through separate accounts. If it did, the total
annual returns would be lower.
 
During the 4-year period shown in the bar chart, the highest quarterly return
was 15.13% (quarter ended 12/31, 1998) and the lowest quarterly return was
- -21.95% (quarter ended 9/30, 1998).
 
PERFORMANCE TABLE
The following performance table compares the fund's performance to that of a
broad-based securities market index.
 
                         AVERAGE ANNUAL TOTAL RETURN(1)
                   (FOR THE PERIODS ENDED DECEMBER 31, 1998)
 
<TABLE>
<CAPTION>
                                                  LIFE OF
                                     1 YEAR        FUND*
                                     ---------  ------------
<S>                                  <C>        <C>
International Fund.................       (.69)%       1.60%
MSCI EAFE Index**..................      20.00%       8.22%
</TABLE>
 
- --------------
(1)   Assumes reinvestment of dividends and distributions
 
*   This column shows the returns of the fund and of the MSCI EAFE Index since
    July 5, 1994, the fund's date of inception, and July 1, 1994, respectively.
 
**  The Morgan Stanley Capital International Europe, Australasia, and the Far
    East (EAFE)-Registered Trademark- Index is an unmanaged index that is
    designed to represent the performance of 20 major world stock exchanges.
 
                               Prospectus Page 8
<PAGE>
AMERICA FUND
 
INVESTMENT OBJECTIVE AND STRATEGIES
The fund's investment objective is long-term growth of capital.
 
The fund seeks to meet this objective by investing, normally, at least 65% of
its total assets in the equity securities of U.S. issuers that have market
capitalizations within the range of market capitalizations of companies included
in the Russell Midcap-TM- Index.
 
The fund may invest up to 35% of its total assets in equity securities of other
U.S. issuers or in investment-grade debt securities of U.S. issuers. The Fund
may also invest up to 25% of its total assets in foreign securities.
 
In selecting investments, the portfolio managers seek to identify those
companies that are, in the portfolio managers' view, undervalued relative to
current or projected earnings, or the current market value of assets owned by
the company. The primary emphasis of the portfolio managers' search for
undervalued equity securities is in four categories: (1) out-of-favor cyclical
growth companies; (2) established growth companies that are undervalued compared
to historical relative valuation parameters; (3) companies where there is early
but tangible evidence of improving prospects which are not yet reflected in the
value of the companies' equity securities; and (4) companies whose equity
securities are selling at prices that do not yet reflect the current market
value of their assets. The portfolio managers consider whether to sell a
particular security when any of these factors materially change.
 
In anticipation of or in response to adverse market conditions or for cash
management purposes, the fund may hold all or a portion of its assets in cash
(U.S. dollars, foreign currencies or multinational currency units), money market
instruments, or high-quality debt securities. As a result, the fund may not
achieve its investment objective.
 
The fund may engage in active and frequent trading of portfolio securities to
achieve its investment objective. If the fund does trade in this way, it may
incur increased transaction costs and brokerage commissions, both of which can
lower the actual return on your investment. Active trading may also increase
short-term capital gains and losses, which may affect the taxes you have to pay.
 
PRINCIPAL RISKS OF INVESTING IN THE FUND
There is a risk that you could lose all or a portion of your investment in the
fund. The value of your investment in the fund will go up and down with the
prices of the securities in which the fund invests. The prices of equity
securities change in response to many factors, including the historical and
prospective earnings of the issuer, the value of its assets, general economic
conditions, interest rates, investor perceptions, and market liquidity.
 
Foreign securities have additional risks, including exchange rate changes,
political and economic upheaval, the potential lack of information about these
companies, relatively low market liquidity, and the potential lack of strict
financial and accounting controls and standards.
 
The value of your shares could be adversely affected if the computer systems
used by the fund's investment advisor and other service providers are unable to
distinguish the year 2000 from the year 1900.
 
The fund's investment advisor and independent technology consultants are working
to avoid year 2000-related problems in its systems and to obtain assurances that
other service providers are taking similar steps. Year 2000 problems may also
affect issuers in whose securities the fund invests.
 
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
 
PERFORMANCE INFORMATION
The bar chart and table shown below provide an indication of the risks of
investing in the fund. The fund is offered exclusively for investment in
separate accounts that fund certain variable annuity contracts offered by
certain life insurance companies. The information below does not reflect charges
and fees associated with those separate accounts. Those charges and fees will
reduce returns. The fund's past performance is not necessarily an indication of
its future performance.
 
                              ANNUAL TOTAL RETURNS
 
The following bar chart shows changes in the performance of the fund's shares
from year to year. The bar chart does not reflect charges or fees associated
with investment in the fund through separate accounts. If it did, the total
annual returns would be lower.
 
During the 5-year period shown in the bar chart, the highest quarterly return
was 28.84% (quarter ended 12/31, 1998) and the lowest quarterly return was
- -25.59% (quarter ended 9/30, 1998).
 
                               Prospectus Page 9
<PAGE>
PERFORMANCE TABLE
The following performance table compares the fund's performance to that of a
broad-based securities market index.
 
                         AVERAGE ANNUAL TOTAL RETURN(1)
                   (FOR THE PERIODS ENDED DECEMBER 31, 1998)
 
<TABLE>
<CAPTION>
                                                   LIFE OF
                           1 YEAR      5 YEARS      FUND*
                           ---------  ---------  ------------
<S>                        <C>        <C>        <C>
America Fund.............       8.09%     17.02%      16.96%
Russell Midcap-TM-
  Index**................      10.09%     17.35%      16.70%
</TABLE>
 
- --------------
(1)   Assumes reinvestment of dividends and distributions
 
*   This column shows the returns of the fund and of Russell Midcap-TM- Index
    since February 10, 1993, the fund's date of inception, and February 1, 1993,
    respectively.
 
**  The Russell Midcap-TM- Index measures the performance of the smallest 800
    companies in the Russell 1000-Registered Trademark- Index. These companies
    are considered representative of medium-sized companies.
 
                               Prospectus Page 10
<PAGE>
INFRASTRUCTURE FUND
 
INVESTMENT OBJECTIVE AND STRATEGIES
The fund's investment objective is long-term capital growth.
 
The fund seeks to meet this objective by normally investing at least 65% of its
total assets in equity securities of domestic and foreign infrastructure
companies. The fund considers an "infrastructure company" to be one that: (1)
derives at least 50% of its revenues or earnings from infrastructure activities;
or (2) devotes at least 50% of its assets to such activities, based on its most
recent fiscal year. Such companies include those that design, develop, or
provide products and services significant to a country's infrastructure (such as
transportation systems, communications equipment and services, nuclear power and
other energy sources, water supply, and oil, gas and coal exploration). The fund
may invest up to 35% of its assets in debt securities issued by infrastructure
companies, or in equity and debt securities of other companies the portfolio
manager believes will benefit from developments in the infrastructure industry.
 
The fund will normally invest in the securities of companies located in at least
three different countries, including the United States, and may invest a
significant portion of its assets in the securities of U.S. issuers. However,
the fund will invest no more than 50% of its total assets in the securities of
issuers in any one country, other than the U.S. The fund may invest
substantially in securities denominated in one or more currencies. The portfolio
may invest in companies located in developing countries, i.e., those that are in
the initial stages of their industrial cycles. The fund may also invest up to
20% of its total assets in lower-quality debt securities, i.e., "junk bonds."
 
The portfolio manager allocates the fund's assets among securities of countries
and in currency denominations that are expected to provide the best
opportunities for meeting the fund's investment objective. In analyzing specific
companies for possible investment, the portfolio manager ordinarily looks for
several of the following characteristics: above-average per share earnings
growth; high return on invested capital; a healthy balance sheet; sound
financial and accounting policies and overall financial strength; strong
competitive advantages; effective research and product development and
marketing; development of new technologies; efficient service; pricing
flexibility; strong management; and general operating characteristics that will
enable the companies to compete successfully in their respective markets. The
portfolio manager considers whether to sell a particular security when any of
those factors materially changes.
 
In anticipation of or in response to adverse market conditions or for cash
management purposes, the fund may hold all or a portion of its assets in cash
(U.S. dollars, foreign currencies or multinational currency units), money market
instruments, or high-quality debt securities. As a result, the fund may not
achieve its investment objective.
 
PRINCIPAL RISKS OF INVESTING IN THE FUND
There is a risk that you could lose all or a portion of your investment in the
fund. The value of your investment in the fund will go up and down with the
prices of the securities in which the fund invests. The prices of equity
securities change in response to many factors, including the historical and
prospective earnings of the issuer, the value of its assets, general economic
conditions, interest rates, investor perceptions, and market liquidity.
 
The value of the fund's shares is particularly vulnerable to factors affecting
infrastructure industry, such as substantial political, environmental, and other
governmental regulation. Such regulation may, among other things, increase
compliance costs and proscribe the development of new technologies. In addition,
increases in fuel, energy, and other prices have historically limited the growth
potential of infrastructure companies.
 
Because the fund focuses its investments in the infrastructure industries, the
value of your shares may rise and fall more than the value of shares of a fund
that invests more broadly.
 
The prices of foreign securities may be further affected by other factors,
including:
 
CURRENCY EXCHANGE RATES -- The dollar value of the fund's foreign investments
will be affected by changes in the exchange rates between the dollar and the
currencies in which those investments are traded.
 
POLITICAL AND ECONOMIC CONDITIONS -- The value of the fund's foreign investments
may be adversely affected by political and social instability in their home
countries and by changes in economic or taxation policies in those countries.
 
REGULATIONS -- Foreign companies generally are subject to less stringent
regulations, including financial and accounting controls, than are U.S.
companies. As a result, there generally is less publicly available information
about foreign companies than about U.S. companies.
 
MARKETS -- The securities markets of other countries are smaller than U.S.
securities markets. As a result, many foreign securities may be less liquid and
their prices may be more volatile than U.S. securities.
 
These factors may affect the prices of securities issued by foreign companies
located in developing countries more than those in countries with mature
economies. For example, many developing countries have, in the past, experienced
high rates of inflation or sharply devalued their currencies
 
                               Prospectus Page 11
<PAGE>
against the U.S. dollar, thereby causing the value of investments in companies
located in those countries to decline. Transaction costs are often higher in
developing countries and there may be delays in settlement procedures.
 
The value of your shares could be adversely affected if the computer systems
used by the fund's investment advisor and other service providers are unable to
distinguish the year 2000 from the year 1900.
 
The fund's investment advisor and independent technology consultants are working
to avoid year 2000-related problems in its systems and to obtain assurances that
other service providers are taking similar steps. Year 2000 problems may also
affect issuers in whose securities the fund invests.
 
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
 
PERFORMANCE INFORMATION
The bar chart and table shown below provide an indication of the risks of
investing in the fund. The fund is offered exclusively for investment in
separate accounts that fund certain variable annuity contracts offered by
certain life insurance companies. The information below does not reflect charges
and fees associated with those separate accounts. Those charges and fees will
reduce returns. The fund's past performance is not necessarily an indication of
its future performance.
 
                              ANNUAL TOTAL RETURNS
 
The following bar chart shows changes in the performance of the fund's shares
from year to year. The bar chart does not reflect charges or fees associated
with investment in the fund through separate accounts. If it did, the total
annual returns would be lower.
 
During the 4-year period shown in the bar chart, the highest quarterly return
was 14.34% (quarter ended 12/31, 1998) and the lowest quarterly return was
- -15.82% (quarter ended 9/30, 1998).
 
PERFORMANCE TABLE
The following performance table compares the fund's performance to that of a
broad-based securities market index.
 
                         AVERAGE ANNUAL TOTAL RETURN(1)
                   (FOR THE PERIODS ENDED DECEMBER 31, 1998)
 
<TABLE>
<CAPTION>
                                                  LIFE OF
                                     1 YEAR        FUND*
                                     ---------  ------------
<S>                                  <C>        <C>
Infrastructure Fund................       6.34%      11.69%
MSCI AC World Index**..............      21.72%      15.40%
</TABLE>
 
- --------------
(1)   Assumes reinvestment of dividends and distributions
 
*   This column shows the returns of the fund and of the MSCI AC World Index
    since July 5, 1994, the fund's date of inception, and July 1, 1994,
    respectively.
 
**  The Morgan Stanley Capital International All Country World Index measures
    the performance of securities listed on the major world stock exchanges of
    47 markets, including both developed and emerging markets.
 
                               Prospectus Page 12
<PAGE>
NATURAL RESOURCES FUND
 
INVESTMENT OBJECTIVE AND STRATEGIES
The fund's investment objective is long-term capital growth.
 
The fund seeks to meet this objective by normally investing at least 65% of its
total assets in equity securities of domestic and foreign natural resources
companies. The fund considers a "natural resources" company to be one that (1)
derives at least 50% of its revenues or earnings from natural resource
activities, or (2) devotes at least 50% of its assets to such activities, based
on its most recent fiscal year. Such companies include those that own, explore,
or develop natural resources (such as oil, metals, forest products, and
chemicals) and other basic commodities (such as foodstuffs) or supply goods and
services to such companies. The fund may invest up to 35% of its assets in debt
securities issued by natural resources companies, or in equity and debt
securities of other companies the portfolio manager believes will benefit from
developments in the natural resources industries.
 
The fund will normally invest in the securities of issuers located in at least
three different countries, including the United States. However, the fund will
invest no more than 50% of its total assets in the securities of issuers in any
one country, other than the U.S. The fund may invest in companies located in
developing countries, i.e., those that are in the initial stages of their
industrial cycles. The fund may invest substantially in securities denominated
in one or more currencies. The fund may invest up to 20% of its total assets in
lower-quality debt securities, i.e., "junk bonds."
 
The portfolio manager allocates the fund's assets among securities of companies
in these natural resource industries and commodity groups that are expected to
provide the best opportunities during periods of rising inflation. In analyzing
specific companies for possible investment, the portfolio manager ordinarily
looks for several of the following characteristics: above-average per share
earnings growth; high return on invested capital; a healthy balance sheet; sound
financial and accounting policies and overall financial strength; strong
competitive advantages; effective research and product development and
marketing; development of new technologies; efficient service; pricing
flexibility; strong management; and general operating characteristics that will
enable the companies to compete successfully in their respective markets. The
portfolio manager considers whether to sell a particular security when any of
those factors materially changes.
 
In anticipation of or in response to adverse market conditions or for cash
management purposes, the fund may hold all or a portion of its assets in cash
(U.S. dollars, foreign currencies or multinational currency units), money market
instruments, or high quality debt securities. As a result, the fund may not
achieve its investment objective.
 
The fund may engage in active and frequent trading of portfolio securities to
achieve its investment objective. If the fund does trade in this way, it may
incur increased transaction costs and brokerage commissions, both of which can
lower the actual return on your investment. Active trading may also increase
short-term capital gains and losses, which may affect the taxes you have to pay.
 
PRINCIPAL RISKS OF INVESTING IN THE FUND
There is a risk that you could lose all or a portion of your investment in the
fund. The value of your investment in the fund will go up and down with the
prices of the securities in which the fund invests. The prices of equity
securities change in response to many factors, including the historical and
prospective earnings of the issuer of the stock, the value of its assets,
general economic conditions, interest rates, investor perceptions, and market
liquidity.
 
The value of the fund's shares is particularly vulnerable to factors affecting
natural resources industry, such as increasing regulation of the environment by
both U.S and foreign governments. Increased environmental regulations may, among
other things, increase compliance costs and affect business opportunities for
the companies in which the fund invests. The value is also affected by changing
commodity prices, which can be highly volatile and are subject to the risks of
oversupply and reduced demand.
 
Because the fund focuses its investments in the natural resources industries,
the value of your shares may rise and fall more than the value of shares of a
fund that invests more broadly.
 
The prices of foreign securities may be further affected by other factors,
including:
 
CURRENCY EXCHANGE RATES -- The dollar value of the fund's foreign investments
will be affected by changes in the exchange rates between the dollar and the
currencies in which those investments are traded.
 
POLITICAL AND ECONOMIC CONDITIONS -- The value of the fund's foreign investments
may be adversely affected by political and social instability in their home
countries and by changes in economic or taxation policies in those countries.
 
REGULATIONS -- Foreign companies generally are subject to less stringent
regulations, including financial and accounting controls, than are U.S.
companies. As a result, there generally is less publicly available information
about foreign companies than about U.S. companies.
 
MARKETS -- The securities markets of other countries are smaller than U.S.
securities markets. As a result, many foreign securities may be less liquid and
 
                               Prospectus Page 13
<PAGE>
their prices may be more volatile than U.S. securities.
 
The value of your shares could be adversely affected if the computer systems
used by the fund's investment advisor and other service providers are unable to
distinguish the year 2000 from the year 1900.
 
The fund's investment advisor and independent technology consultants are working
to avoid year 2000-related problems in its systems and to obtain assurances that
other service providers are taking similar steps. Year 2000 problems may also
affect issuers in whose securities the fund invests.
 
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
 
PERFORMANCE INFORMATION
The bar chart and table shown below provide an indication of the risks of
investing in the fund. The fund is offered exclusively for investment in
separate accounts that fund certain variable annuity contracts offered by
certain life insurance companies. The information below does not reflect charges
and fees associated with those separate accounts. Those charges and fees will
reduce returns. The fund's past performance is not necessarily an indication of
its future performance.
 
                              ANNUAL TOTAL RETURNS
 
The following bar chart shows changes in the performance of the fund's shares
from year to year. The bar chart does not reflect charges or fees associated
with investment in the fund through separate accounts. If it did, the total
annual returns would be lower.
 
During the 4-year period shown in the bar chart, the highest quarterly return
was 30.72% (quarter ended 9/30, 1997) and the lowest quarterly return was
- -20.75% (quarter ended 9/30, 1998).
 
PERFORMANCE TABLE
The following performance table compares the fund's performance to that of a
broad-based securities market index.
 
                         AVERAGE ANNUAL TOTAL RETURN(1)
                   (FOR THE PERIODS ENDED DECEMBER 31, 1998)
 
<TABLE>
<CAPTION>
                                       LIFE OF
                           1 YEAR       FUND*
                           ---------  ---------
<S>                        <C>        <C>        <C>
Natural Resources Fund...     (33.01)%      5.94%
MSCI AC World Index**....      21.72%     15.40%
</TABLE>
 
- --------------
(1)   Assumes reinvestment of dividends and distributions
 
*   This column shows the returns of the fund and of the MSCI AC World Index
    since July 5, 1994, the fund's date of inception, and July 1, 1994,
    respectively.
 
**  The Morgan Stanley Capital International All Country World Index measures
    the performance of securities listed on the major world stock exchanges of
    47 markets, including both developed and emerging markets.
 
                               Prospectus Page 14
<PAGE>
TELECOMMUNICATIONS FUND
 
INVESTMENT OBJECTIVE AND STRATEGIES
The fund's investment objective is long-term growth of capital.
 
The fund seeks to meet this objective by investing at least 65% of its total
assets in equity securities of domestic and foreign telecommunications
companies. The fund considers a "telecommunications company" to be one that (1)
derives at least 50% of its revenues or earnings from telecommunications
activities, or (2) devotes at least 50% of its assets to such activities, based
on its most recent fiscal year. Such companies include those that develop or
provide communications services and equipment, computer and electronic
components and equipment, mobile communications, and broadcasting. The fund may
invest up to 35% of its assets in debt securities issued by telecommunications
companies, or in equity and debt securities of other companies the portfolio
managers believe will benefit from developments in the telecommunications
industries.
 
The fund will normally invest in the securities of companies located in at least
three different countries, including the United States. However, the fund will
invest no more than 40% of its total assets in the securities of issuers in any
one country, other than the U.S. The fund may invest substantially in securities
denominated in one or more currencies.
 
The fund may invest in companies located in developing countries, i.e., those
that are in their initial stages of their industrial cycles. The fund may also
invest up to 5% of its total assets in lower-quality debt securities, i.e.,
"junk bonds."
 
The portfolio managers allocate the fund's assets among securities of countries
and in currency denominations that are expected to provide the best
opportunities for meeting the fund's investment objective. In analyzing specific
companies for possible investment, the portfolio managers ordinarily look for
several of the following characteristics: above-average per share earnings
growth; high return on invested capital; a healthy balance sheet; sound
financial and accounting policies and overall financial strength; strong
competitive advantages; effective research and product development and
marketing; development of new technologies; efficient service; pricing
flexibility; strong management; and general operating characteristics that will
enable the companies to compete successfully in their respective markets. The
portfolio managers consider whether to sell a particular security when any of
those factors materially changes.
 
In anticipation of or in response to adverse market conditions or for cash
management purposes, the fund may hold all or a portion of its assets in cash
(U.S. dollars, foreign currencies or multinational currency units), money market
instruments, or high quality debt securities. As a result, the fund may not
achieve its investment objective.
 
PRINCIPAL RISKS OF INVESTING IN THE FUND
There is a risk that you could lose all or a portion of your investment in the
fund. The value of your investment in the fund will go up and down with the
prices of the securities in which the fund invests. The prices of equity
securities change in response to many factors, including the historical and
prospective earnings of the issuer of the stock, the value of its assets,
general economic conditions, interest rates, investor perceptions, and market
liquidity.
 
The value of the fund's shares is particularly vulnerable to factors affecting
the telecommunications industry, such as substantial governmental regulation.
Because the fund focuses its investments in the telecommunications industries,
the value of your shares may rise and fall more than the value of shares of a
fund that invests more broadly.
 
The prices of foreign securities may be further affected by other factors,
including:
 
CURRENCY EXCHANGE RATES -- The dollar value of the fund's foreign investments
will be affected by changes in the exchange rates between the dollar and the
currencies in which those investments are traded.
 
POLITICAL AND ECONOMIC CONDITIONS -- The value of the fund's foreign investments
may be adversely affected by political and social instability in their home
countries and by changes in economic or taxation policies in those countries.
 
REGULATIONS -- Foreign companies generally are subject to less stringent
regulations, including financial and accounting controls, than are U.S.
companies. As a result, there generally is less publicly available information
about foreign companies than about U.S. companies.
 
MARKETS -- The securities markets of other countries are smaller than U.S.
securities markets. As a result, many foreign securities may be less liquid and
their prices may be more volatile than U.S. securities.
 
These factors may affect the prices of securities issued by foreign companies
located in developing countries more than those in countries with mature
economies. For example, many developing countries have, in the past, experienced
high rates of inflation or sharply devalued their currencies against the U.S.
dollar, thereby causing the value of
 
                               Prospectus Page 15
<PAGE>
investments in companies located in those countries to decline. Transaction
costs are often higher in developing countries and there may be delays in
settlement procedures.
 
The value of your shares could be adversely affected if the computer systems
used by the fund's investment advisor and other service providers are unable to
distinguish the year 2000 from the year 1900.
 
The fund's investment advisor and independent technology consultants are working
to avoid year 2000-related problems in its systems and to obtain assurances that
other service providers are taking similar steps. Year 2000 problems may also
affect issuers in whose securities the fund invests.
 
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
 
PERFORMANCE INFORMATION
The bar chart and table shown below provide an indication of the risks of
investing in the fund. The fund is offered exclusively for investment in
separate accounts that fund certain variable annuity contracts offered by
certain life insurance companies. The information below does not reflect charges
and fees associated with those separate accounts. Those charges and fees will
reduce returns. The fund's past performance is not necessarily an indication of
its future performance.
 
                              ANNUAL TOTAL RETURNS
 
The following bar chart shows changes in the performance of the fund's shares
from year to year. The bar chart does not reflect charges or fees associated
with investment in the fund through separate accounts. If it did, the total
annual returns would be lower.
 
During the 5-year period shown in the bar chart, the highest quarterly return
was 30.84% (quarter ended 12/31, 1998) and the lowest quarterly return was
- -23.31% (quarter ended 9/30, 1998).
 
PERFORMANCE TABLE
The following performance table compares the fund's performance to that of a
broad-based securities market index.
 
                         AVERAGE ANNUAL TOTAL RETURN(1)
                   (FOR THE PERIODS ENDED DECEMBER 31, 1998)
 
<TABLE>
<CAPTION>
                                                   LIFE OF
                           1 YEAR      5 YEARS      FUND*
                           ---------  ---------  ------------
<S>                        <C>        <C>        <C>
Telecommunications
  Fund...................      22.11%     17.21%      18.41%
MSCI AC World Index**....      21.72%     14.48%      14.11%
</TABLE>
 
- --------------
(1)   Assumes reinvestment of dividends and distributions
 
*   This column shows the returns of the fund and of the MSCI AC World Index
    since October 18, 1993, the fund's date of inception, and October 31, 1993,
    respectively.
 
**  The Morgan Stanley Capital International All Country World Index measures
    the performance of securities listed on the major world stock exchanges of
    47 markets, including both developed and emerging markets.
 
                               Prospectus Page 16
<PAGE>
LATIN AMERICA FUND
 
INVESTMENT OBJECTIVES AND STRATEGIES
The fund's investment objective is capital appreciation.
 
The fund seeks to meet this objective by investing at least 65% of its total
assets in equity and debt securities of Latin American issuers. The fund
considers securities of "Latin American issuers" to include: (1) securities of
companies organized under the laws of, or having a principal office located in,
a Latin American country; (2) securities of companies that derive 50% or more of
their total revenues from business in Latin America, provided that, in the view
of the portfolio manager, the value of such issuers' securities reflect Latin
American developments to a greater extent than developments elsewhere; (3)
securities issued or guaranteed by the government of a country in Latin America,
its agencies or instrumentalities, or municipalities, or the central bank of
such country; (4) U.S. dollar denominated securities or securities denominated
in a Latin American currency issued by companies to finance operations in Latin
America; and (5) securities of Latin American issuers in the form of depositary
shares. The fund considers Latin America to include Mexico and the countries
within Central and South America and the Caribbean many of which are considered
developing countries, i.e., those that are in the initial stages of their
industrial cycles.
 
The fund will normally invest a majority of its assets in equity securities. The
fund may invest up to 35% of its total assets in a combination of equity and
debt securities of U.S. issuers. The fund may also invest up to 50% of its total
assets in debt securities, which may consist of lower-quality debt securities,
e.g., "junk bonds" and "Brady Bonds." Brady Bonds are debt restructurings that
provide for the exchange of cash and loans for newly-issued bonds. The fund
currently expects to invest primarily in securities issued by companies and
governments in Mexico, Chile, Brazil and Argentina. The fund may invest more
than 25% of its total assets in any of these four countries but expects to
invest no more than 60% of its total assets in any one country. The fund may
invest up to 35% of its total assets in a combination of equity and debt
securities of U.S. issuers.
 
In allocating investments among the various Latin American countries, the
portfolio manager looks principally at the stage of industrialization, potential
for productivity gains through economic deregulation, the impact of financial
liberalization, and monetary conditions and the political outlook in each
country. Further, the portfolio manager selects between debt and equity
investments based on additional economic criteria such as fundamental economic
strength, expected corporate profits, the condition of balance of payments,
changes in the terms of trade, and currency and interest rate trends. The
portfolio manager considers whether to sell a particular security when any of
those factors materially changes.
 
The fund is non-diversified. With respect to 50% of its assets, it is permitted
to invest more than 5% of its assets in the securities of any one issuer.
 
In anticipation of or in response to adverse market conditions or for cash
management purposes, the fund may hold all or a portion of its assets in cash
(U.S. dollars, foreign currencies or multinational currency units), money market
instruments, or high quality debt securities. As a result, the fund may not
achieve its investment objective.
 
PRINCIPAL RISKS OF INVESTING IN THE FUND
There is a risk that you could lose all or a portion of your investment in the
fund. The value of your investment in the fund will go up and down with the
prices of the securities in which the fund invests. The prices of equity
securities change in response to many factors, including the historical and
prospective earnings of the issuer of the stock, the value of its assets,
general economic conditions, interest rates, investor perceptions, and market
liquidity. Debt securities are particularly vulnerable to credit risk and
interest rate fluctuations. When interest rates rise, bond prices fall; the
longer the bond's duration, the more sensitive it is to this risk.
 
Because fund focuses its investments in Latin America, the value of your shares
may rise and fall more than the value of shares of a fund that invests in a
broader geographic region.
 
The prices of foreign securities may be further affected by other factors,
including:
 
CURRENCY EXCHANGE RATES -- The dollar value of the fund's foreign investments
will be affected by changes in the exchange rates between the dollar and the
currencies in which those investments are traded.
 
POLITICAL AND ECONOMIC CONDITIONS -- The value of the fund's foreign investments
may be adversely affected by political and social instability in their home
countries and by changes in economic or taxation policies in those countries.
 
                               Prospectus Page 17
<PAGE>
REGULATIONS -- Foreign companies generally are subject to less stringent
regulations, including financial and accounting controls, than are U.S.
companies. As a result, there generally is less publicly available information
about foreign companies than about U.S. companies.
 
MARKETS -- The securities markets of other countries are smaller than U.S.
securities markets. As a result, many foreign securities may be less liquid and
their prices may be more volatile than U.S. securities.
 
These factors may affect the price of securities issued by foreign companies
located in developing countries more than those in countries with mature
economies. For example, many developing countries have, in the past, experienced
high rates of inflation or sharply devalued their currencies against the U.S.
dollar, thereby causing the value of investments in companies located in those
countries to decline. Transaction costs are often higher in developing countries
and there may be delays in settlement procedures.
 
Because it is non-diversified, the fund may invest in fewer issuers than if it
was a diversified fund. Thus, the value of the fund's shares may vary more
widely, and the fund to be subject to greater investment and credit risk, than
if it invested more broadly.
 
Compared to higher-quality debt securities, junk bonds involve greater risk of
default or prices due to changes in the credit quality of the issuer because
they are generally unsecured and may be subordinated to other creditor's claims.
The value of lower quality debt securities often fluctuates in response to
company, political, or economic developments and can decline significantly over
short periods of time or during periods of general or regional economic
difficulty. Under some political, diplomatic, social, or economic circumstances,
some Latin American countries that issue lower-quality debt securities may be
unable or unwilling to make principal or interest repayments as they come due.
 
The value of your shares could be adversely affected if the computer systems
used by the fund's investment advisor and other service providers are unable to
distinguish the year 2000 from the year 1900.
 
The fund's investment advisor and independent technology consultants are working
to avoid year 2000-related problems in its systems and to obtain assurances that
other service providers are taking similar steps. Year 2000 problems may also
affect issuers in whose securities the fund invests.
 
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
 
PERFORMANCE INFORMATION
The bar chart and table shown below provide an indication of the risks of
investing in the fund. The fund is offered exclusively for investment in
separate accounts that fund certain variable annuity contracts offered by
certain life insurance companies. The information below does not reflect charges
and fees associated with those separate accounts. Those charges and fees will
reduce returns. The fund's past performance is not necessarily an indication of
its future performance.
 
                               Prospectus Page 18
<PAGE>
                              ANNUAL TOTAL RETURNS
 
The following bar chart shows changes in the performance of the fund's shares
from year to year. The bar chart does not reflect charges or fees associated
with investment in the fund through separate accounts. If it did, the total
annual returns would be lower.
 
During the 6-year period shown in the bar chart, the highest quarterly return
was 36.10% (quarter ended 9/30, 1994) and the lowest quarterly return was
- -33.28% (quarter ended 9/30, 1998).
 
PERFORMANCE TABLE
The following performance table compares the fund's performance to that of a
broad-based securities market index.
 
                         AVERAGE ANNUAL TOTAL RETURN(1)
                   (FOR THE PERIODS ENDED DECEMBER 31, 1998)
 
<TABLE>
<CAPTION>
                                                     LIFE OF
                              1 YEAR      5 YEARS     FUND*
                              ---------  ---------  ---------
<S>                           <C>        <C>        <C>
Latin America Fund..........     (41.70)%     (7.51)%      (.04)%
MSCI Emerging Latin America
  Index**...................     (35.29)%     (2.85)%      5.15%
</TABLE>
 
- --------------
(1)   Assumes reinvestment of dividends and distributions.
 
*   This column shows the returns of the fund and of the MSCI Emerging Latin
    America Index since February 10, 1993, the fund's date of inception, and
    February 1, 1993, respectively.
 
**  The Morgan Stanley Capital International Emerging Latin America Index
    measures the performance of securities listed on the exchanges of Argentina,
    Brazil, Chile, Colombia, Mexico, Peru, and Venezuela.
 
                               Prospectus Page 19
<PAGE>
EMERGING MARKETS FUND
 
INVESTMENT OBJECTIVES AND STRATEGIES
The fund's investment objective is long-term growth of capital.
 
The fund seeks to meet this objective by investing at least 65% of its total
assets in equity securities of companies in emerging markets, which consist of
all countries determined by the portfolio managers to be developing or emerging
economies and markets, generally including every country in the world except the
United States, Canada, Japan, Australia, New Zealand, and most countries located
in Western Europe. Many of these countries are considered developing countries,
i.e., those that are in the initial stages of their industrial cycles. The fund
may also invest up to 35% of its assets in debt securities of government or
corporate issuers in emerging markets, in equity and debt securities of issuers
in developed countries, including the United States, and in cash and money
market instruments.
 
The fund normally invests a majority of its assets in equity securities. The
fund may invest up to 20% of its total assets in high-yield debt securities
rated below investment grade, i.e., "junk bonds." The fund ordinarily will be
invested in the securities of issuers in at least three different emerging
markets countries.
 
In selecting countries in which to invest, the portfolio managers look
principally for strongly developing economies and increasingly sophisticated
markets. Within these countries, the portfolio managers ordinarily look for
economic and political factors, including currency movements, that are likely to
produce above-average growth rates. In analyzing specific companies for possible
investment, the portfolio managers invest in those companies that are best
positioned and managed to take advantage of these economic and political
factors. In evaluating investments in companies in developed markets, the
portfolio managers consider, among other things, the business activities of the
company in emerging markets and the impact that developments in emerging markets
are likely to have on the company. The portfolio managers consider whether to
sell a particular security when any of those factors materially changes.
 
In anticipation of or in response to adverse market conditions or for cash
management purposes, the fund may hold all or a portion of its assets in cash
(U.S. dollars, foreign currencies or multinational currency units), money market
instruments, or high quality debt securities. As a result, the fund may not
achieve its investment objective.
 
The fund may engage in active and frequent trading to achieve its investment
objective. If the fund does trade in this way, it may incur increased
transaction costs and brokerage commissions, both of which can lower the actual
return on your investment.
 
PRINCIPAL RISKS OF INVESTING IN THE FUND
There is a risk that you could lose all or a portion of your investment in the
fund. The value of your investment in the fund will go up and down with the
prices of the securities in which the fund invests. The prices of equity
securities change in response to many factors, including the historical and
prospective earnings of the issuer, the value of its assets, general economic
conditions, interest rates, investor perceptions, and market liquidity. Debt
securities are particularly vulnerable to credit risk and interest rate
fluctuations. When interest rates rise, bond prices fall; the longer the bond's
duration, the more sensitive it is to this risk.
 
The prices of foreign securities may be further affected by other factors,
including:
 
CURRENCY EXCHANGE RATES -- The dollar value of the fund's foreign investments
will be affected by changes in the exchange rates between the dollar and the
currencies in which those investments are traded.
 
POLITICAL AND ECONOMIC CONDITIONS -- The value of the fund's foreign investments
may be adversely affected by political and social instability in their home
countries and by changes in economic or taxation policies in those countries.
 
REGULATIONS -- Foreign companies generally are subject to less stringent
regulations, including financial and accounting controls, than are U.S.
companies. As a result, there generally is less publicly available information
about foreign companies than about U.S. companies.
 
MARKETS -- The securities markets of other countries are smaller than U.S.
securities markets. As a result, many foreign securities may be less liquid and
their prices may be more volatile than U.S. securities.
 
These factors may affect the price of common stocks issued by foreign companies
located in developing countries more than those in countries with mature
economies. For example, many developing countries have, in the past, experienced
high rates
 
                               Prospectus Page 20
<PAGE>
of inflation or sharply devalued their currencies against the U.S. dollar,
thereby causing the value of investments in companies located in those countries
to decline. Transaction costs are often higher in developing countries and there
may be delays in settlement procedures.
 
Sovereign debt securities of developing country governments are generally
lower-quality debt securities. Sovereign debt securities are subject to the
additional risk that, under some political, diplomatic, social, or economic
circumstances, some developing countries that issue lower quality debt
securities may be unable or unwilling to make principal or interest payments as
they come due.
 
Compared to higher-quality debt securities, junk bonds involve greater risk of
default or prices due to changes in the credit quality of the issuer because
they are generally unsecured and may be subordinated to other creditor's claims.
The value of junk bonds often fluctuates in response to company, political, or
economic developments and can decline significantly over short periods of time
or during periods of general or regional economic difficulty. During those
times, the bonds may be difficult to value or sell at a fair price. Credit
ratings on junk bonds do not necessarily reflect their actual market risk.
 
The value of your shares could be adversely affected if the computer systems
used by the fund's investment advisor and other service providers are unable to
distinguish the year 2000 from the year 1900.
The fund's investment advisor and independent technology consultants are working
to avoid year 2000-related problems in its systems and to obtain assurances that
other service providers are taking similar steps. Year 2000 problems may also
affect issuers in whose securities the fund invests.
 
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
 
PERFORMANCE INFORMATION
The bar chart and table shown below provide an indication of the risks of
investing in the fund. The fund is offered exclusively for investment in
separate accounts that fund certain variable annuity contracts offered by
certain life insurance companies. The information below does not reflect charges
and fees associated with those separate accounts. Those charges and fees will
reduce returns. The fund's past performance is not necessarily an indication of
its future performance.
                              ANNUAL TOTAL RETURNS
 
The following bar chart shows changes in the performance of the fund's shares
from year to year. The bar chart does not reflect charges or fees associated
with investment in the fund through separate accounts. If it did, the total
annual returns would be lower.
 
During the 5-year period shown in the bar chart, the highest quarterly return
was 17.28% (quarter ended 3/31, 1996) and the lowest quarterly return was
- -27.32% (quarter ended 9/30, 1998).
 
PERFORMANCE TABLE
The following performance table compares the fund's performance to that of a
broad-based securities market index.
 
                         AVERAGE ANNUAL TOTAL RETURN(1)
                   (FOR THE PERIODS ENDED DECEMBER 31, 1998)
 
<TABLE>
<CAPTION>
                                              LIFE OF
                                 1 YEAR        FUND*
                                 ---------  ------------
<S>                              <C>        <C>
Emerging Markets Fund..........     (36.90%)       (8.83%)
MSCI Emerging Markets Free
  Index**......................     (25.34%)       (8.04%)
</TABLE>
 
- --------------
(1)   Assumes reinvestment of dividends and distributions.
 
*   This column shows the returns of the fund and of the MSCI Emerging Markets
    Free Index since July 5, 1994, the fund's date of inception, and July 1,
    1994, respectively.
 
**  The Morgan Stanley Capital International Emerging Markets Free Index
    measures the performance of securities listed on the exchanges of 26
    countries. The index excludes shares that are not readily purchased by non-
    local investors.
 
                               Prospectus Page 21
<PAGE>
GROWTH & INCOME FUND
 
INVESTMENT OBJECTIVES AND STRATEGIES
The fund's investment objectives are long-term capital appreciation together
with current income.
 
The fund seeks to meet these objectives by investing at least 65% of its total
assets in a combination of blue-chip equity securities and high-quality
government bonds of U.S. and foreign issuers. "Blue chip" equity securities are
those which: (1) offered, during the issuer's most recent fiscal year, an above
average dividend yield relative to the latest reported dividend yield on the
Morgan Stanley Capital International World Index; and (2) are issued by a
company with total equity market capitalization of at least $1 billion.
High-quality government bonds are rated within one of the two highest ratings
categories of Moody's Investors Service, Inc. or Standard & Poor's, or are
deemed by the portfolio managers to be of comparable quality. The fund may
invest up to 35% of its total assets in other equity securities and government
and corporate debt securities that are investment grade, i.e., rated within one
of the four highest ratings categories by Moody's or S&P, or are deemed by the
portfolio managers to be of comparable quality. The fund may purchase debt
obligations issued or guaranteed by the U.S. or foreign governments, including
foreign states, provinces or municipalities, or their agencies, authorities, or
instrumentalities and debt obligations of supranational organizations, such as
the World Bank.
 
The fund will normally invest in securities of issuers in at least three
countries, including the United States. However, the fund may invest no more
than 40% of its assets in securities of issuers in any one country, other than
the U.S. The fund may invest up to 100% of its total assets in either equity or
debt securities in response to general economic changes and market conditions
around the world.
 
The portfolio managers allocate assets among securities of countries and in
currency denominations where opportunities for meeting the fund's investment
objective are expected to be the most attractive. The portfolio managers
consider fundamental economic strength, credit quality, and currency and
interest rate trends in emphasizing various country, geographic, and industry
sectors within the fund. Further, the portfolio managers select debt securities
of particular issuers based on additional economic and countries criteria such
as yield, maturity, issue classification, and quality characteristics. The
relative proportions of equity and debt securities held by the fund depend upon
the portfolio managers' assessment of global political and economic conditions
and the relative strengths and weaknesses of the world equity and debt markets.
Currency investments are based on economic factors (such as relative inflation,
interest rate levels and trends, growth rate forecasts, balance of payment
status, and economic policies) and on political and technical data. The
portfolio managers consider whether to sell a particular security when any of
those factors materially changes.
 
The fund is non-diversified. With respect to 50% of its assets, it is permitted
to invest more than 5% of its assets in the securities of any one issuer.
 
In anticipation of or in response to adverse market conditions or for cash
management purposes, the fund may hold or invest all or a portion of its assets
in cash (U.S. dollars, foreign currencies or multinational currency units),
money market instruments, or high-quality debt securities. As a result, the fund
may not achieve its investment objectives.
 
PRINCIPAL RISKS OF INVESTING IN THE FUND
There is a risk that you could lose all or a portion of your investment in the
fund. The value of your investment in the fund will go up and down with the
prices of the securities in which the fund invests. The prices of equity
securities change in response to many factors, including the historical and
prospective earnings of the issuer, the value of its assets, general economic
conditions, interest rates, investor perceptions, and market liquidity. Debt
securities are particularly vulnerable to credit risk and interest rate
fluctuations. When interest rates rise, bond prices fall; the longer a bond's
duration, the more sensitive it is to this risk.
 
The prices of foreign securities may be further affected by other factors
including:
 
CURRENCY EXCHANGE RATES -- The dollar value of the fund's foreign investments
will be affected by changes in the exchange rates between the dollar and the
currencies in which those investments are traded.
 
POLITICAL AND ECONOMIC CONDITIONS -- The value of the fund's foreign investments
may be adversely affected by political and social instability in their home
countries and by changes in economic or taxation policies in those countries.
 
REGULATIONS -- Foreign companies generally are subject to less stringent
regulations, including financial and accounting controls, than are U.S.
companies. As a result, there generally is less publicly available information
about foreign companies than about U.S. companies.
 
MARKETS -- The securities markets of other countries are smaller than U.S.
securities markets. As a result, many foreign securities may be less liquid and
their prices may be more volatile than U.S. securities.
 
Because it is non-diversified, the fund may invest in fewer issuers than if it
was a diversified fund. Thus the value of the fund's shares may vary more
 
                               Prospectus Page 22
<PAGE>
widely, and the fund may be subject to greater investment and credit risk, than
if the fund invested more broadly.
 
The value of your shares could be adversely affected if the computer systems
used by the fund's investment advisor and other service providers are unable to
distinguish the year 2000 from the year 1900.
 
The fund's investment advisor and independent technology consultants are working
to avoid year 2000-related problems in its systems and to obtain assurances that
other service providers are taking similar steps. Year 2000 problems may also
affect issuers in whose securities the fund invests.
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
 
PERFORMANCE INFORMATION
The bar chart and table shown below provide an indication of the risks of
investing in the fund. The fund is offered exclusively for investment in
separate accounts that fund certain variable annuity contracts offered by
certain life insurance companies. The information below does not reflect charges
and fees associated with those separate accounts. Those charges and fees will
reduce returns. The fund's past performance is not necessarily an indication of
its future performance.
 
                              ANNUAL TOTAL RETURNS
 
The following bar chart shows changes in the performance of the fund's shares
from year to year. The bar chart does not reflect charges or fees associated
with investment in the fund through separate accounts. If it did, the total
annual returns would be lower.
 
During the 6-year period shown in the bar chart, the highest quarterly return
was 12.21% (quarter ended 12/31, 1998) and the lowest quarterly return was
- -7.64% (quarter ended 9/30, 1998).
 
PERFORMANCE TABLE
The following performance table compares the fund's performance to that of a
broad-based securities market index.
 
                         AVERAGE ANNUAL TOTAL RETURN(1)
                   (FOR THE PERIODS ENDED DECEMBER 31, 1998)
 
<TABLE>
<CAPTION>
                                                   LIFE OF
                            1 YEAR      5 YEARS     FUND*
                            ---------  ---------  ---------
<S>                         <C>        <C>        <C>
Growth & Income Fund......      19.62%     12.65%     13.76%
MSCI AC World Index**.....      21.72%     14.48%     16.42%
</TABLE>
 
- --------------
(1)   Assumes reinvestment of dividends and distributions.
 
*   This column shows the returns of the fund and of the MSCI AC World Index
    since February 10, 1993, the fund's date of inception, and February 1, 1993,
    respectively.
 
**  The Morgan Stanley Capital International All Country World Index measures
    the performance of securities listed on the major world stock exchanges of
    47 markets, including both developed and emerging markets.
 
                               Prospectus Page 23
<PAGE>
STRATEGIC INCOME FUND
 
INVESTMENT OBJECTIVES AND STRATEGIES
The fund's primary investment objective is high current income and its secondary
investment objective is capital appreciation.
 
The fund seeks to meet these objectives by investing primarily in debt
securities, including mortgage-backed and asset-backed securities, of issuers in
the United States and developed and developing countries, i.e., those that are
in the initial stages of their industrial cycles. The securities of issuers in
developing countries may consist substantially of "Brady Bonds" and other
sovereign debt securities issued by governments of such countries and traded in
the markets of developed countries or groups of developed countries without
regard to ratings. Brady Bonds are debt restructurings that provide for the
exchange of cash and loans for newly issued bonds.
 
The fund normally invests at least 35% of its total assets in U.S. and foreign
debt and other fixed-income securities that are either rated at least investment
grade by Moody's Investors Service, Inc. or Standard & Poor's (rated in the four
highest ratings categories by Moody's or S&P), or that the fund's portfolio
managers believe to be of comparable quality. The fund may invest up to 50% of
its assets in debt securities that are rated below investment grade by such
agencies or that the fund's portfolio managers believe to be of comparable
quality, i.e., "junk bonds." The fund may also invest up to 35% of its total
assets in equity securities. The fund may invest a significant portion of its
assets in the securities of U.S. issuers.
 
The portfolio managers allocate assets among securities of countries and in
currency denominations that are expected to provide the most attractive
opportunities for meeting the fund's investment objectives. The portfolio
managers consider fundamental economic strength, credit quality, and currency
and interest rate trends in emphasizing various country, geographic and industry
sectors within the fund. Further, the portfolio managers select particular
issuers based on additional economic criteria such as yield, maturity, issue
classification, and quality characteristics. Currency investments are based on
factors such as relative inflation, interest rate levels and trends, growth rate
forecasts, balance of payments status, and economic policies. The portfolio
managers consider whether to sell a particular security when any of those
factors materially changes.
 
The fund is non-diversified. With respect to 50% of its assets, it is permitted
to invest more than 5% of its assets in the securities of any one issuer.
 
In anticipation of or in response to adverse market conditions or for cash
management purposes, the fund may hold all or a portion of its assets in cash
(U.S. dollars, foreign currencies and multinational currency units), money
market instruments, or high-quality debt securities. As a result, the fund may
not achieve its investment objectives.
 
The fund may engage in active and frequent trading of portfolio securities to
achieve its investment objectives. If the fund does trade in this way, it may
incur increased transaction costs, which can lower the actual return on your
investment. Active trading may also increase short-term capital gains and
losses, which may affect the taxes you have to pay.
 
PRINCIPAL RISKS OF INVESTING IN THE FUND
There is a risk that you could lose all or a portion of your investment in the
fund. The value of your investment in the fund will go up and down with the
prices of the securities in which the fund invests. The prices of equity
securities change in response to many factors including the historical and
prospective earnings of the issuer of the stock, the value of its assets,
general economic conditions, interest rates, investor perceptions, and market
liquidity. Debt securities are particularly vulnerable to credit risk and
interest rate fluctuations. When interest rates rise, bond prices fall; the
longer a bond's duration, the more sensitive it is to this risk. The prices of
high-coupon U.S. Government agency mortgage-backed securities fall more slowly
when interest rates rise than do prices of traditional fund-rate securities.
 
The prices of foreign securities may be further affected by other factors,
including:
 
CURRENCY EXCHANGE RATES -- The dollar value of the fund's foreign investments
will be affected by changes in the exchange rates between the dollar and the
currencies in which those investments are traded.
 
POLITICAL AND ECONOMIC CONDITIONS -- The value of the fund's foreign investments
may be adversely affected by political and social instability in their home
countries and by changes in economic or taxation policies in those countries.
 
REGULATIONS -- Foreign companies generally are subject to less stringent
regulations, including financial and accounting controls, than are U.S.
companies. As a result, there generally is less
 
                               Prospectus Page 24
<PAGE>
publicly available information about foreign companies than about U.S.
companies.
 
MARKETS -- The securities markets of other countries are smaller than U.S.
securities markets. As a result, many foreign securities may be less liquid and
their prices may be more volatile than U.S. securities.
 
These factors may affect the price of common stocks issued by foreign companies
located in developing countries more than those in countries with mature
economies. For example, many developing countries have, in the past, experienced
high rates of inflation or sharply devalued their currencies against the U.S.
dollar, thereby causing the value of investments in companies located in those
countries to decline. Transaction costs are often higher in developing countries
and there may be delays in settlement procedures. In addition, developing
countries may have greater political or economic instability, less regulation
and smaller, less liquid and more volatile markets than countries with more
mature economies.
 
Sovereign debt securities of developing country governments are generally
lower-quality debt securities. Sovereign debt securities are subject to the
additional risk that, under some political, diplomatic, social, or economic
circumstances, some developing countries that issue lower quality debt
securities may be unable or unwilling to make principal or interest payments as
they come due.
 
Compared to higher-quality debt securities, junk bonds involve greater risk of
default or price changes due to changes in the credit quality of the issuer
because they are generally unsecured and may be subordinated to other creditors'
claims. The value of junk bonds often fluctuates in response to company,
political, or economic developments and can decline significantly over short
periods of time or during periods of general or regional economic difficulty.
During those times, the bonds may be difficult to value or sell at a fair price.
Credit ratings on junk bonds do not necessarily reflect their actual market
risk.
 
High-coupon U.S. Government agency mortgage-backed securities provide a higher
coupon at the time of purchase than current prevailing market interest rates.
The fund may purchase such securities at a premium. If these securities
experience a faster principal prepayment rate than expected, both the market
value of and income from such securities will decrease.
 
Because it is non-diversified, the fund may invest in fewer issuers than if it
were a diversified fund. Thus, the value of the fund's shares may vary more
widely, and the fund may be subject to greater investment and credit risk, than
if the fund invested more broadly.
 
The value of your shares could be adversely affected if the computer systems
used by the fund's investment advisor and other service providers are unable to
distinguish the year 2000 from the year 1900.
 
The fund's investment advisor and independent technology consultants are working
to avoid year 2000-related problems in its systems and to obtain assurances that
other service providers are taking similar steps. Year 2000 problems may also
affect issuers in whose securities the fund invests.
 
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
 
PERFORMANCE INFORMATION
The bar chart and table shown below provide an indication of the risks of
investing in the fund. The fund is offered exclusively for investment in
separate accounts that fund certain variable annuity contracts offered by
certain life insurance companies. The information below does not reflect charges
and fees associated with those separate accounts. Those charges and fees will
reduce returns. The fund's past performance is not necessarily an indication of
its future performance.
 
                               Prospectus Page 25
<PAGE>
                              ANNUAL TOTAL RETURNS
 
The following bar chart shows changes in the performance of the fund's shares
from year to year. The bar chart does not reflect charges or fees associated
with investment in the fund through separate accounts. If it did, the total
annual returns would be lower.
 
During the 6-year period shown in the bar chart, the highest quarterly return
was 10.89% (quarter ended 12/31, 1995) and the lowest quarterly return was
- -17.62% (quarter ended 3/31, 1997).
 
PERFORMANCE TABLE
The following performance table compares the fund's performance to that of a
broad-based securities market index.
 
                         AVERAGE ANNUAL TOTAL RETURN(1)
                   (FOR THE PERIODS ENDED DECEMBER 31, 1998)
 
<TABLE>
<CAPTION>
                                                     LIFE OF
                              1 YEAR      5 YEARS     FUND*
                              ---------  ---------  ---------
<S>                           <C>        <C>        <C>
Strategic Income Fund.......      (.61)%      5.11%      8.72%
J.P. Morgan Global
  Government Bond Index**...      15.31%      8.09%      8.72%
</TABLE>
 
- --------------
(1)   Assumes reinvestment of dividends and distributions.
 
*   This column shows the returns of the fund and of the J.P. Morgan Global
    Government Bond Index since February 10, 1993, the fund's date of inception.
 
**  The J.P. Morgan Global Government Bond Index is a market value-weighted
    average of government bonds from 13 major bond markets. It includes the
    effect of reinvested coupons and is measured in U.S. dollars.
 
                               Prospectus Page 26
<PAGE>
GLOBAL GOVERNMENT INCOME FUND
 
                      INVESTMENT OBJECTIVES AND STRATEGIES
 
The fund's primary investment objective is high current income and its secondary
investment objectives are capital appreciation and protection of capital.
 
The fund seeks to meet these objectives by investing at least 65% of its total
assets in debt securities (including mortgage-backed securities) issued or
guaranteed by U.S. and foreign governments or by their agencies, authorities,
and instrumentalities, as well as by supranational entities such as the World
Bank. The fund primarily invests in high quality government debt securities that
are rated in the top two ratings categories by Moody's Investors Service, Inc.
or Standard & Poor's, or deemed by the portfolio managers to be of comparable
quality. The fund may invest in lower-quality debt securities, i.e., "junk
bonds."
 
The fund may invest up to 35% of its total assets in: (1) foreign government
securities that are rated within the third and fourth highest ratings categories
by Moody's or S&P or deemed by the portfolio managers to be of comparable
quality; (2) corporate debt obligations of U.S. or foreign issuers rated at
least investment grade (rated within the four highest ratings categories by
Moody's or S&P; (3) privately issued mortgage-backed and asset-backed securities
that are rated at least investment grade, or deemed by the portfolio managers to
be of comparable quality; and (4) common stocks, preferred stocks and warrants,
provided that the fund will invest no more than 20% of its total assets in such
securities.
 
The fund will normally invest in securities issued by at least three different
countries, including the United States, and may invest a significant portion of
its assets in the securities of U.S. issuers. However, the fund will invest no
more than 40% of its total assets in securities of any one country, other than
the U.S. The fund will only invest in a foreign currency or in securities
denominated in a foreign currency if the portfolio managers consider the
currency to be fully exchangeable into U.S. dollars or a multinational currency
unit.
 
The portfolio managers allocate assets among securities of countries and in
currency denominations where the combination of fixed-income market returns,
price appreciation of fixed-income securities, and currency exchange rate
movements will present opportunities for meeting the fund's investment
objectives. The principal determinants of the emphasis given to various country,
geographic, and industry sectors within the fund are fundamental economic
strength, credit quality, and currency and interest rate trends. Further, the
portfolio managers select particular issuers based on additional economic
criteria such as yield, maturity, issue classification, and quality
characteristics. Currency investments are based upon economic factors (such as
relative inflation, interest rate levels and trends, growth rate forecasts,
balance of payments status, and economic policies) and on political and
technical data. The portfolio managers consider whether to sell a particular
security when any of those factors materially changes.
 
The fund is non-diversified. With respect to 50% of its assets, it is permitted
to invest more than 5% of its assets in the securities of any one issuer.
 
In anticipation of or in response to adverse market conditions or for cash
management purposes, the fund may hold all or a portion of its assets in cash
(U.S. dollars, foreign currencies and multinational currency units), money
market instruments, or high quality-debt securities. As a result, the fund may
not achieve its investment objectives.
 
The fund may engage in active and frequent trading of portfolio securities to
achieve its investment objective. If the fund does trade in this way, it may
incur increased transaction costs, which can lower the actual return on your
investment. Active trading may also increase short-term capital gains and
losses, which may affect the taxes you have to pay.
 
PRINCIPAL RISKS OF INVESTING IN THE FUND
There is a risk that you could lose all or a portion of your investment in the
fund. The value of your investment in the fund will go up and down with the
prices of the securities in which the fund invests. Debt securities are
particularly vulnerable to credit risk and interest rate fluctuations. When
interest rates rise, bond prices fall; the longer a bond's duration, the more
sensitive it is to this risk. The fund could also lose money if any debt
securities that it holds are downgraded or go into default.
 
Mortgage-backed and asset backed securities are subject to different risks from
bonds and, as a result, may respond to changes in interest rates differently. If
interest rates fall, people refinance or pay off their mortgages ahead of time,
which may cause mortgage-backed securities to lose value. If interest rates
rise, many people may refinance or prepay their mortgages at a
slower-than-expected rate. This may effectively lengthen the life of
 
                               Prospectus Page 27
<PAGE>
mortgage-backed securities, which may cause the securities to be more sensitive
to changes in interest rates.
 
The prices of foreign securities may be further affected by other factors,
including:
 
CURRENCY EXCHANGE RATES -- The dollar value of the fund's foreign investments
will be affected by changes in the exchange rates between the dollar and the
currencies in which those investments are traded.
 
POLITICAL AND ECONOMIC CONDITIONS -- The value of the fund's foreign investments
may be adversely affected by political and social instability in their home
countries and by changes in economic or taxation policies in those countries.
 
REGULATIONS -- Foreign companies generally are subject to less stringent
regulations, including financial and accounting controls, than are U.S.
companies. As a result, there generally is less publicly available information
about foreign companies than about U.S. companies.
 
MARKETS -- The securities markets of other countries are smaller than U.S.
securities markets. As a result, many foreign securities may be less liquid and
their prices may be more volatile than U.S. securities.
 
These factors may affect the price of securities issued by foreign companies
located in developing countries more than those in countries with mature
economies. For example, many developing countries have, in the past, experienced
high rates of inflation or sharply devalued their currencies against the U.S.
dollar, thereby causing the value of investments in companies located in those
countries to decline. Transaction costs are often higher in developing countries
and there may be delays in settlement procedures.
 
Sovereign debt securities of developing country governments are generally
lower-quality debt securities. Sovereign debt securities are subject to the
additional risk that, under some political, diplomatic, social, or economic
circumstances, some developing countries that issue lower quality debt
securities may be unable or unwilling to make principal or interest payments as
they come due.
 
Compared to higher-quality debt securities, junk bonds involve greater risk of
default or price changes due to changes in the credit quality of the issuer
because they are generally unsecured and may be subordinated to other creditors'
claims. The value of junk bonds often fluctuates in response to company,
political, or economic developments and can decline significantly over short
periods of time or during periods of general or regional economic difficulty.
During those times, the bonds could be difficult to value or to sell at a fair
price. Credit ratings on junk bonds do not reflect their actual market risk.
 
Because it is non-diversified, the fund may invest in fewer issuers than if it
were a diversified fund. Thus, the value of the fund's shares may vary more
widely, and the fund may be subject to greater investment and credit risk, than
if the fund invested more broadly.
 
The value of your shares could be adversely affected if the computer systems
used by the fund's investment advisor and other service providers are unable to
distinguish the year 2000 from the year 1900.
 
The fund's investment advisor and independent technology consultants are working
to avoid year 2000-related problems in its systems and to obtain assurances that
other service providers are taking similar steps. Year 2000 problems may also
affect issuers in whose securities the fund invests.
 
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
 
PERFORMANCE INFORMATION
The bar chart and table shown below provide an indication of the risks of
investing in the fund. The fund is offered exclusively for investment in
separate accounts that fund certain variable annuity contracts offered by
certain life insurance companies. The information below does not reflect charges
and fees associated with those separate accounts. Those charges and fees will
reduce returns. The fund's past performance is not necessarily an indication of
its future performance.
 
                               Prospectus Page 28
<PAGE>
                              ANNUAL TOTAL RETURNS
 
The following bar chart shows changes in the performance of the fund's shares
from year to year. The bar chart does not reflect charges or fees associated
with investment in the fund through separate accounts. If it did, the total
annual returns would be lower.
 
During the 5-year period shown in the bar chart, the highest quarterly return
was 6.53% (quarter ended 3/31, 1995) and the lowest quarterly return was -6.38%
(quarter ended 3/31, 1994).
 
PERFORMANCE TABLE
The following performance table compares the fund's performance to that of a
broad-based securities market index.
 
                         AVERAGE ANNUAL TOTAL RETURN(1)
                   (FOR THE PERIODS ENDED DECEMBER 31, 1998)
 
<TABLE>
<CAPTION>
                                                     LIFE OF
                              1 YEAR      5 YEARS     FUND*
                              ---------  ---------  ---------
<S>                           <C>        <C>        <C>
Global Government Income
  Fund......................      12.69%      5.72%      6.43%
J.P. Morgan Global
  Government Bond Index**         15.31%      8.09%      8.72%
</TABLE>
 
- --------------
(1)   Assumes reinvestment of dividends and distributions.
 
*   This column shows the returns of the fund and of the J.P. Morgan Global
    Government Bond Index since February 10, 1993, the fund's date of inception.
 
**  The J.P. Morgan Global Government Bond Index is a market value-weighted
    average of government bonds from 13 major bond markets. It includes the
    effect of reinvested coupons and is measured in U.S. dollars.
 
                               Prospectus Page 29
<PAGE>
U.S. GOVERNMENT INCOME FUND
 
INVESTMENT OBJECTIVE AND STRATEGIES
The fund's investment objective is a high level of current income, consistent
with preservation of capital.
 
The fund seeks to meet this objective by investing at least 65% of its total
assets in U.S. government securities including direct obligations of U.S.
Treasury and obligations issued or guaranteed by U.S. government agencies and
instrumentalities (including mortgage-backed securities). Within the latter
group are: (1) securities supported by the full faith and credit of the United
States; (2) securities supported by the right to borrow from the U.S. Treasury;
and (3) securities supported primarily or solely by the creditworthiness of the
issuer.
 
The fund may invest up to 35% of its total assets in: (1) foreign government
securities, including those of supranational entities such as the World Bank and
the Asian Development Bank, rated at least of investment grade (rated within the
four highest ratings categories by Moody's Investors Service, Inc. or Standard &
Poor's, or determined by the fund's sub-advisor to be of comparable quality);
(2) U.S. government securities that are rated within the third or fourth highest
ratings categories by Moody's or S&P; (3) privately issued mortgage-backed or
asset-backed securities that are rated at least investment grade, or determined
by the fund's sub-advisor to be of comparable quality; and (4) commercial paper
and other short-term obligations of U.S. and foreign corporations rated at least
A-1 by S&P or Prime-1 by Moody's, or determined by the fund's sub-advisor to be
of comparable quality.
 
The fund may invest in securities issued by one country but denominated in the
currency of another country (or a multinational currency unit) but will only
invest in such securities if the fund's sub-advisor considers the currency to be
fully exchangeable into U.S. dollars or a multinational currency unit.
 
In anticipation of or in response to adverse market conditions or for cash
management purposes, the fund may hold all or a portion of its assets in cash
(U.S. dollars, foreign currencies or multinational currency units), money market
instruments, or high quality debt securities. As a result, the fund may not
achieve its investment objective.
 
The fund may engage in active and frequent trading of portfolio securities to
achieve its investment objective. If the fund does trade in this way, it may
incur increased transaction costs and brokerage commissions, both of which can
lower the actual return on your investment. Active trading may also increase
short-term capital gains and losses, which may affect the taxes you have to pay.
 
PRINCIPAL RISKS OF INVESTING IN THE FUND
There is a risk that you could lose all or a portion of your investment in the
fund. The value of your investment in the fund will go up and down with the
prices of the securities in which the fund invests. Debt securities are
particularly vulnerable to credit risk and interest rate fluctuations. When
interest rates rise, bond prices fall; the longer a bond's duration, the more
sensitive it is to this risk. The fund could also lose money if any debt
securities that it holds are downgraded or go into default.
 
The value of your shares could be adversely affected if the computer systems
used by the fund's investment advisor and other service providers are unable to
distinguish the year 2000 from the year 1900.
 
The fund's investment advisor and independent technology consultants are working
to avoid year 2000-related problems in its systems and to obtain assurances that
other service providers are taking similar steps. Year 2000 problems may also
affect issuers in whose securities the fund invests.
 
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
 
PERFORMANCE INFORMATION
The bar chart and table shown below provide an indication of the risks of
investing in the fund. The fund is offered exclusively for investment in
separate accounts that fund certain variable annuity contracts offered by
certain life insurance companies. The information below does not reflect charges
and fees associated with those separate accounts. Those charges and fees will
reduce returns. The fund's past performance is not necessarily an indication of
its future performance.
 
                               Prospectus Page 30
<PAGE>
                              ANNUAL TOTAL RETURNS
 
The following bar chart shows changes in the performance of the fund's shares
from year to year. The bar chart does not reflect charges or fees associated
with investment in the fund through separate accounts. If it did, the total
annual returns would be lower.
 
During the 6-year period shown in the bar chart, the highest quarterly return
was 7.14% (quarter ended 9/30, 1993) and the lowest quarterly return was -4.97%
(quarter ended 3/31, 1994).
 
PERFORMANCE TABLE
The following performance table compares the fund's performance to that of a
broad-based securities market index.
 
                         AVERAGE ANNUAL TOTAL RETURN(1)
                   (FOR THE PERIODS ENDED DECEMBER 31, 1998)
 
<TABLE>
<CAPTION>
                                                     LIFE OF
                              1 YEAR      5 YEARS     FUND*
                              ---------  ---------  ---------
<S>                           <C>        <C>        <C>
U.S. Government Income
  Fund......................       9.06%      6.48%      5.36%
J.P. Morgan U.S. Government
  Bond Index**..............      10.25%      6.17%      7.55%
</TABLE>
 
- --------------
(1)   Assumes reinvestment of dividends and distributions.
 
*   This column shows the returns of the fund and of the J.P. Morgan U.S.
    Government Bond Index since February 10, 1993, the fund's date of inception.
 
**  The J.P. Morgan U.S. Government Bond Index is a market value-weighted index
    of U.S. Treasury issues with remaining maturities of at least one year. It
    includes the effect of reinvested coupons and is measured in U.S. dollars.
 
                               Prospectus Page 31
<PAGE>
MONEY MARKET FUND
 
INVESTMENT OBJECTIVE AND STRATEGIES
The investment objective of the Money Market Fund is maximum current income
consistent with liquidity and conservation of capital.
 
The fund seeks to meet this objective by investing in high-quality, U.S. dollar
denominated money market instruments. The fund seeks to maintain a net asset
value of $1.00 per share. To do so, the fund will maintain a dollar-weighted
average maturity of 90 days or less and will purchase only instruments having
remaining maturities of 13 months or less.
 
The fund may invest only in first-tier high-quality U.S. dollar-denominated
money market securities determined by the fund's investment advisor to present
minimal credit risks. First-tier high quality securities are those that have
received the highest rating for short-term securities from at least two
nationally ranked statistical ratings organizations, such as Moody's Investors
Service, Inc. or Standard & Poor's, or were determined by the fund's investment
advisor to be of comparable quality. These include: (1) obligations issued or
guaranteed by the U.S. and foreign governments and their agencies and
instrumentalities (including direct obligations of the U.S. Treasury,
obligations backed by the full faith and credit of U.S. government, obligations
supported primarily or solely by the creditworthiness of the issuer, and similar
U.S. dollar-denominated instruments of foreign governments and their agencies
and instrumentalities); (2) obligations such as certificates of deposit and
banker's acceptances of U.S. and non-U.S. banks with total assets of at least $1
billion; (3) interest-bearing deposits in principal amounts less than the FDIC
insurance limit in U.S. commercial and savings banks with total assets of at
least $1 billion, up to 5% of the fund's assets; (4) commercial paper and other
short-term debt obligations of U.S. and foreign companies rated at least Prime-1
by Moody's or A-1 by S&P, or determined by the fund's investment advisor to be
of comparable quality; and (5) repurchase agreements secured by any of the above
securities.
 
In managing the fund, the fund's investment advisor may employ several
professional money management techniques, including varying the composition of
the fund's investments and the average weighted maturity of the fund's
securities within the limitations described above. Decisions on whether to use
such techniques are based upon the fund's investment advisor's identification
and assessment of the relative values of various money market instruments and
the future of interest rate patterns, economic conditions, and shifts in fiscal
and monetary policy. The fund's investment advisor's also may seek to improve
the fund's income by purchasing and selling securities, taking advantage of
yield disparities occurring in the market.
 
PRINCIPAL RISKS OF INVESTING IN THE FUND
An investment in the fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the fund seeks to
preserve the value of your investment at $1.00 per share, it is possible to lose
money by investing in this fund.
 
The value of your shares could be adversely affected if the computer systems
used by the fund's investment advisor and other service providers are unable to
distinguish the year 2000 from the year 1900.
 
The fund's investment advisor and independent technology consultants are working
to avoid year 2000-related problems in its systems and to obtain assurances that
other service providers are taking similar steps. Year 2000 problems may also
affect issuers in whose securities the fund invests.
 
PERFORMANCE INFORMATION
The bar chart and table shown below provide an indication of the risks of
investing in the fund. The fund is offered exclusively for investment in
separate accounts that fund certain variable annuity contracts offered by
certain life insurance companies. The information below does not reflect charges
and fees associated with those separate accounts. Those charges and fees will
reduce returns. The fund's past performance is not necessarily an indication of
its future performance.
 
                               Prospectus Page 32
<PAGE>
ANNUAL TOTAL RETURNS
The following bar chart shows changes in the performance of the fund's shares
from year to year. The bar chart does not reflect charges or fees associated
with investment in the fund through separate accounts. If it did, the total
annual returns would be lower.
 
During the 5-year period shown in the bar chart, the highest quarterly return
was 1.66% (quarter ended 12/31, 1997) and the lowest quarterly return was .62%
(quarter ended 3/31, 1994).
 
PERFORMANCE TABLE
The following performance table shows the fund's average annual total return for
the periods indicated.
 
                         AVERAGE ANNUAL TOTAL RETURN(1)
                   (FOR THE PERIODS ENDED DECEMBER 31, 1998)
 
<TABLE>
<CAPTION>
                                                       LIFE OF
                                1 YEAR      5 YEARS     FUND*
                                ---------  ---------  ---------
<S>                             <C>        <C>        <C>
Money Market Fund.............       5.22%      4.82%      4.52%
</TABLE>
 
- --------------
(1)   Assumes reinvestment of dividends and distributions.
 
*   This column shows the returns of the fund since February 10, 1993, the
    fund's date of inception.
 
SEVEN-DAY YIELD
 
                               Prospectus Page 33
<PAGE>
                                FUND MANAGEMENT
 
- --------------------------------------------------------------------------------
 
THE ADVISOR AND SUB-ADVISORS
A I M Advisors, Inc. (the advisor) serves as each fund's investment advisor.
 
INVESCO Asset Management Limited (IAML), an affiliate of the advisor, is the
sub-advisor to each of the following funds:
 
  -  Europe Fund
 
  -  International Fund
 
  -  Latin America Fund
 
  -  Emerging Markets Fund
 
  -  Growth & Income Fund and
 
  -  Global Government Income Fund
 
INVESCO (NY), Inc. (INVESCO (NY)), an affiliate of the advisor, is the
sub-advisor to each of the following funds:
 
  -  U.S. Government Income Fund
 
  -  Money Market Fund and
 
  -  Strategic Income Fund
 
INVESCO Asia Limited (IAL), an affiliate of the advisor, is the sub-advisor to
New Pacific Fund.
 
Each fund's sub-advisor is responsible for that fund's day-to-day management,
subject to the supervision of the advisor. The advisor is located at 11 Greenway
Plaza, Suite 100, Houston, TX 77046-1173. IAML is located at 11 Devonshire
Square, London, EC2M 4YR, England. INVESCO (NY) is located at 1166 Avenue of the
Americas, New York, NY 10036 and 50 California Street, San Francisco, CA 94111.
IAL is located at Two Pacific Place, Suite 2106, 88 Queensway, Hong Kong.
 
The advisor and the sub-advisor together supervise all aspects of a fund's
operations and provide investment advisory services to the funds, including
obtaining and evaluating economic, statistical and financial information to
formulate and implement investment programs for the fund.
 
The advisor has acted as an investment advisor since its organization in 1976.
IAML, INVESCO (NY), and IAL have each acted as investment advisors since their
respective organizations in 1967, 1969, and 1972. Today, the advisor, together
with its subsidiaries, advises or manages over 110 investment portfolios,
including those of the funds, encompassing a broad range of investment
objectives.
 
ADVISOR COMPENSATION
During their last fiscal year ended December 31, 1998, the following funds each
paid the advisor advisory fees of 1.00% of their respective net assets:
 
  -  New Pacific Fund
 
  -  Europe Fund
 
  -  International Fund
 
  -  Infrastructure Fund
 
  -  Natural Resources Fund
 
  -  Telecommunications Fund
 
  -  Latin America Fund
 
  -  Emerging Markets Fund and
 
  -  Growth & Income Fund
 
During their last fiscal year ended December 31, 1998, the following funds each
paid the advisor advisory fees of 0.75% of their respective net assets:
 
  -  America Fund
 
  -  Strategic Income Fund
 
  -  Global Government Income Fund and
 
  -  U.S. Government Income Fund
 
During its last fiscal year ended December 31, 1998, the Money Market Fund paid
the advisor advisory fees of 0.50% of its net assets.
 
SUB-ADVISOR COMPENSATION
During the funds' last fiscal year ended December 31, 1998, the advisor paid to
a sub-advisor sub-advisory fees equal to 40% of the fees paid to it by each fund
sub-advised by such sub-advisor.
 
                               Prospectus Page 34
<PAGE>
                                NEW PACIFIC FUND
 
<TABLE>
<CAPTION>
                             RESPONSIBILITIES FOR
NAME/OFFICE                        THE FUND                      BUSINESS EXPERIENCE DURING THE PAST 5 YEARS
- -------------------------  ------------------------  -------------------------------------------------------------------
<S>                        <C>                       <C>
Anna Tong                  Portfolio Manager since   Portfolio Manager, INVESCO (NY), Inc. since June 1998 and Managing
                            1998                      Director and Chief Investment Officer, INVESCO Asia Limited (Hong
                                                      Kong) since April 1997. Managing Director, INVESCO International
                                                      (FE) Ltd. (Hong King) and Director, INVESCO Investment Management
                                                      (HK) Ltd. (Hong Kong) since March 1985.
Sammy Lau                  Portfolio Manager since   Portfolio Manager, INVESCO (NY), Inc. since June 1998. Director
                            1998                      (since January 1996) and Associate Director (December 1994 to
                                                      January 1996), INVESCO Asia Limited (Hong Kong). Associate, J.P.
                                                      Morgan (Hong Kong) from November 1993 to November 1994. Investment
                                                      Manager, Baring International Asset Admin. Ltd. (Hong Kong) from
                                                      June 1990 to October 1993.
</TABLE>
 
                                  EUROPE FUND
 
<TABLE>
<CAPTION>
                             RESPONSIBILITIES FOR                            BUSINESS EXPERIENCE
NAME/OFFICE                        THE FUND                              DURING THE PAST FIVE YEARS
- -------------------------  ------------------------  -------------------------------------------------------------------
<S>                        <C>                       <C>
Steven Chamberlain         Portfolio Manager since   Senior Portfolio Manager for INVESCO Asset Management Ltd. since
                            1999                      1989
</TABLE>
 
                               INTERNATIONAL FUND
 
<TABLE>
<CAPTION>
                             RESPONSIBILITIES FOR                            BUSINESS EXPERIENCE
NAME/OFFICE                        THE FUND                              DURING THE PAST FIVE YEARS
- -------------------------  ------------------------  -------------------------------------------------------------------
<S>                        <C>                       <C>
Roger Yates                Portfolio Manager since   Global Chief Investment Officer (since October 1997) and
                            1996                      International Chief Investment Office (from September 1996 to
                                                      October 1997), INVESCO (NY), Inc. and INVESCO GT Asset Management.
                                                      Chief Investment Officer and Portfolio Manager for Europe and the
                                                      United Kingdom, INVESCO (NY), Inc. (from 1994 to 1996). Investment
                                                      Manager, Morgan Greenfell Asset Management, from 1988 to 1994.
Michael Lindsell           Portfolio Manager since   Head of Investment Strategy for Global Equities, INVESCO (NY), Inc.
                            1997                      and INVESCO GT Asset Management PLC (London) since 1996. Chief
                                                      Investment Officer, INVESCO GT Asset Management Asia Ltd. (Hong
                                                      Kong) from 1992 to 1996. Portfolio Manager, INVESCO (NY), Inc.
                                                      from 1992 to 1996.
</TABLE>
 
                                  AMERICA FUND
 
<TABLE>
<CAPTION>
                             RESPONSIBILITIES FOR                            BUSINESS EXPERIENCE
NAME/OFFICE                        THE FUND                              DURING THE PAST FIVE YEARS
- -------------------------  ------------------------  -------------------------------------------------------------------
<S>                        <C>                       <C>
Charles D. Scavone         Portfolio Manager since   Vice President of A I M Capital Management, Inc. ("AIM Capital"), a
                            1999                      wholly owned subsidiary of AIM and Portfolio Management for the
                                                      Fund since 1999. He has been associated with AIM and/or its
                                                      subsidiaries since 1998 and has been an investment professional
                                                      since 1997. Prior to 1996, he was Associate Portfolio Manager for
                                                      Van Kampen American Capital Asset Management, Inc. from 1994 to
                                                      1996.
</TABLE>
 
                               Prospectus Page 35
<PAGE>
<TABLE>
<CAPTION>
                             RESPONSIBILITIES FOR                            BUSINESS EXPERIENCE
NAME/OFFICE                        THE FUND                              DURING THE PAST FIVE YEARS
- -------------------------  ------------------------  -------------------------------------------------------------------
<S>                        <C>                       <C>
Kenneth A. Zschappel       Portfolio Manager since   Assistant Vice President of AIM Capital and Portfolio Manager for
                            1999                      the Fund since1999. He has been associated with AIM and/or its
                                                      subsidiaries since he began working as an investment professional
                                                      in 1999.
</TABLE>
 
                              INFRASTRUCTURE FUND
 
<TABLE>
<CAPTION>
                             RESPONSIBILITIES FOR                            BUSINESS EXPERIENCE
NAME/OFFICE                        THE FUND                              DURING THE PAST FIVE YEARS
- -------------------------  ------------------------  -------------------------------------------------------------------
<S>                        <C>                       <C>
Brian T. Nelson            Portfolio Manager since   Portfolio Manager (1997) and Senior Equity Research Analyst (from
                            1997                      October 1996 to September 1997), INVESCO (NY), Inc. Employed by
                                                      Chancellor Capital from 1995 to October 1996. Equity Research
                                                      Analyst and Co-Portfolio Manager, Franklin Resources, Inc. from
                                                      1988 to 1995.
</TABLE>
 
                             NATURAL RESOURCES FUND
 
<TABLE>
<CAPTION>
                             RESPONSIBILITIES FOR                            BUSINESS EXPERIENCE
NAME/OFFICE                        THE FUND                              DURING THE PAST FIVE YEARS
- -------------------------  ------------------------  -------------------------------------------------------------------
<S>                        <C>                       <C>
Derek H. Webb              Portfolio Manager since   Portfolio Manager (since 1994) and Analyst (from 1992 to 1994),
                            Fund inception in 1995    INVESCO (NY), Inc.
</TABLE>
 
                            TELECOMMUNICATIONS FUND
 
<TABLE>
<CAPTION>
                             RESPONSIBILITIES FOR                            BUSINESS EXPERIENCE
NAME/OFFICE                        THE FUND                              DURING THE PAST FIVE YEARS
- -------------------------  ------------------------  -------------------------------------------------------------------
<S>                        <C>                       <C>
David P. Barnard           Portfolio Manager since   Vice President of A I M Capital Management, Inc. and Portfolio
                            1999                      Manager for the Fund since 1999. He has been associated with AIM
                                                      and/or its subsidiaries since 1982 and has been an investment
                                                      professional since 1974.
Claude C. Cody IV          Portfolio Manager since   Vice President of A I M Capital Management, Inc. and Portfolio
                            1999                      Manager for the Fund since 1999. He has been associated with AIM
                                                      and/or its subsidiaries since 1992 and has been an investment
                                                      professional since 1976.
Robert M. Kippes           Portfolio Manager since   Vice President of A I M Capital Management, Inc. and Portfolio
                            1999                      Manager for the Fund since 1999. He has been associated with AIM
                                                      and/or its subsidiaries since he began working as an investment
                                                      professional in 1969.
Jonathan C. Schoolar       Portfolio Manager since   Senior Vice President of A I M Capital Management, Inc. and
                            1999                      Portfolio Manager for the Fund since 1999. He has been associated
                                                      with AIM and/or its subsidiaries since 1986 and has been an
                                                      investment professional since 1983.
Kenneth A. Zschappel       Portfolio Manager since   Assistant Vice President of A I M Capital Management, Inc. and
                            1999                      Portfolio Manager for the Fund since 1999. He has been associated
                                                      with AIM and/or its subsidiaries since 1992 and began working as
                                                      an investment professional in 1990.
T. Bradley Conger          Portfolio Manager since   Portfolio Manager for the Fund since 1999. He has been associated
                            1999                      with AIM and/or its subsidiaries since 1997. From 1989 to 1997 he
                                                      was a member of the Goldman Sachs & Co. international equity sales
                                                      team.
</TABLE>
 
                               Prospectus Page 36
<PAGE>
                               LATIN AMERICA FUND
 
<TABLE>
<CAPTION>
                             RESPONSIBILITIES FOR                            BUSINESS EXPERIENCE
NAME/OFFICE                        THE FUND                              DURING THE PAST FIVE YEARS
- -------------------------  ------------------------  -------------------------------------------------------------------
<S>                        <C>                       <C>
David Manuel               Portfolio Manager since   Portfolio Manager for INVESCO Asset Management Ltd. since November
                            1997                      1997. Investment Analyst and Portfolio Manager for Abbey Life
                                                      Investment Services Ltd. (Bournemouth) from 1987 to 1997, and Head
                                                      of Latin American Equities from 1994 to 1997.
</TABLE>
 
                             EMERGING MARKETS FUND
 
<TABLE>
<CAPTION>
                             RESPONSIBILITIES FOR                            BUSINESS EXPERIENCE
NAME/OFFICE                        THE FUND                              DURING THE PAST FIVE YEARS
- -------------------------  ------------------------  -------------------------------------------------------------------
<S>                        <C>                       <C>
Francesco Bertoni          Portfolio Manager since   Portfolio Manager, INVESCO (NY), Inc. since 1998 and Investment
                            1998                      Director, INVESCO Asset Management Ltd. since 1994. Joined INVESCO
                                                      London as Portfolio Manager in European Equity Team in 1990, moved
                                                      to International Equity Team in 1993, and became responsible for
                                                      Global Emerging Markets products in 1995
Christine Rowley           Portfolio Manager since   Portfolio Manager, INVESCO (NY), Inc., INVESCO GT Asset Management,
                            1997                      and INVESCO GT Asset Asia Ltd. (Hong Kong), since 1992.
</TABLE>
 
                              GROWTH & INCOME FUND
 
<TABLE>
<CAPTION>
                             RESPONSIBILITIES FOR                            BUSINESS EXPERIENCE
NAME/OFFICE                        THE FUND                              DURING THE PAST FIVE YEARS
- -------------------------  ------------------------  -------------------------------------------------------------------
<S>                        <C>                       <C>
Michael Lindsell           Portfolio Manager since   Head of Investment Strategy for Global Equities, INVESCO (NY), Inc.
                            1998                      and INVESCO GT Asset Management PLC (London) since 1996. Chief
                                                      Investment Officer, INVESCO GT Asset Management Asia Ltd. (Hong
                                                      Kong) from 1992 to 1996. Portfolio Manager, INVESCO (NY), Inc.
                                                      from 1992 to 1996.
John Nadell                Portfolio Manager since   Portfolio Manager, INVESCO (NY), Inc. since July 1998. Portfolio
                            1998                      Manager (since 1996) and Investment Analyst (1994 to 1996),
                                                      INVESCO GT Asset Management Japan Ltd. (Tokyo). Investment
                                                      Analyst, Pacific Equity Management, from 1990 to 1994.
Paul Griffiths             Portfolio Manager since   Head of Global Fixed Income (since June 1997) and Portfolio Manager
                            1995                      (from 1994 to 1997), INVESCO (NY), Inc. and INVESCO GT Asset
                                                      Management. Global Bond Fund Manager, Lazard Investors, from 1993
                                                      to 1994.
Michael McDonagh           Portfolio Manager since   Portfolio Manager for GT London since 1992 and for INVESCO Asset
                            1998                      Management Ltd. since October 1988. From 1977 to 1992, was a
                                                      Portfolio Manager for GT Asia.
</TABLE>
 
                               Prospectus Page 37
<PAGE>
                             STRATEGIC INCOME FUND
 
<TABLE>
<CAPTION>
                             RESPONSIBILITIES FOR                            BUSINESS EXPERIENCE
NAME/OFFICE                        THE FUND                              DURING THE PAST FIVE YEARS
- -------------------------  ------------------------  -------------------------------------------------------------------
<S>                        <C>                       <C>
David B. Hughes            Portfolio Manager since   Head of Global Fixed Income, North America (since January 1998) and
                            1998                      Senior Portfolio Manager for Global/ International Fixed Income
                                                      (October 1996 to December 1997), INVESCO (NY), Inc. Employed by
                                                      Chancellor Capital from July 1995 to October 1996. Assistant Vice
                                                      President, Fiduciary Trust Company International, from 1994 to
                                                      1995. Assistant Treasurer, Bankers Trust Company, from 1991 to
                                                      1994.
Craig Munro                Portfolio Manager since   Portfolio Manager, INVESCO (NY), Inc., since August 1997. Vice
                            1998                      President and Senior Analyst in Emerging Markets Group of the
                                                      Global Fixed Income Division of Merrill Lynch Asset Management,
                                                      from 1993 to August 1997.
Kevin Rogers               Portfolio Manager since   Portfolio Manager for INVESCO (NY), Inc. since July 1997. Prior
                            1998                      thereto, was a high yield bond analyst at Fidelity Management &
                                                      Research Company (Boston) from 1988 to 1997.
Cheng-Hock Lau             Portfolio Manager since   Chief Investment Officer for Global Fixed Income (since October
                            1998                      1996) and Senior Portfolio Manager for Global/ International Fixed
                                                      Income (July 1995 to October 1996), INVESCO (NY), Inc. Employed by
                                                      Chancellor Capital from 1995 to October 1996. Senior Vice
                                                      President and Senior Portfolio Manager, Fiduciary Trust Company
                                                      International, from 1993 to 1995.
</TABLE>
 
                         GLOBAL GOVERNMENT INCOME FUND
 
<TABLE>
<CAPTION>
                             RESPONSIBILITIES FOR                            BUSINESS EXPERIENCE
NAME/OFFICE                        THE FUND                              DURING THE PAST FIVE YEARS
- -------------------------  ------------------------  -------------------------------------------------------------------
<S>                        <C>                       <C>
Thomas J. Berger           Portfolio Manager since   Director and Head of the Global Fixed Income Group for INVESCO
                            1999                      Asset Management Ltd. since 1997. Director of Mercury Asset
                                                      Management PLC from 1993 to 1997.
Paul Griffiths             Portfolio Manager since   Director and Head of the Global Fixed Income Team for INVESCO Asset
                            1999                      Management Group Ltd. since June 1997. Portfolio Manager from 1994
                                                      to 1997. Global Bond Fund Manager for Lazard Investors from 1993
                                                      to 1994.
David B. Hughes            Portfolio Manager since   Director, Global Fixed Income Group and Portfolio Manager of
                            1999                      INVESCO Asset Management Ltd. since December 1998. Head of Global
                                                      Fixed Income, North America, and Portfolio Manager for INVESCO
                                                      (NY), Inc. from January 1998 to December 1998. Senior Portfolio
                                                      Manager for Global/International Fixed Income for INVESCO (NY),
                                                      Inc. from July 1995 to December 1997. Employed by Chancellor
                                                      Capital from July 1995 to October 1996. Assistant Vice President
                                                      of Fiduciary Trust Company International from 1994 to 1995.
                                                      Assistant Treasurer at Bankers Trust Company from 1991 to 1994.
</TABLE>
 
                               Prospectus Page 38
<PAGE>
                          U.S. GOVERNMENT INCOME FUND
 
<TABLE>
<CAPTION>
                             RESPONSIBILITIES FOR                            BUSINESS EXPERIENCE
NAME/OFFICE                        THE FUND                              DURING THE PAST FIVE YEARS
- -------------------------  ------------------------  -------------------------------------------------------------------
<S>                        <C>                       <C>
Cheng-Hock Lau             Portfolio Manager since   Chief Investment Officer for Global Fixed Income (since October
                            1998                      1996) and Senior Portfolio Manager for Global/ International Fixed
                                                      Income (July 1995 to October 1996), INVESCO (NY), Inc. Employed by
                                                      Chancellor Capital from 1995 to October 1996. Senior Vice
                                                      President and Senior Portfolio Manager, Fiduciary Trust Company
                                                      International, from 1993 to 1995.
Edward J. O'Hara           Portfolio Manager since   Senior Portfolio Manager, High Grade Fixed Income Group, INVESCO
                            1998                      (NY), Inc., since August 1995. Senior Manager, Ark Asset
                                                      Management, Inc. (formerly Lehman Asset Management Company, Inc.),
                                                      from 1989 to August 1995.
</TABLE>
 
                               MONEY MARKET FUND
 
<TABLE>
<CAPTION>
                             RESPONSIBILITIES FOR                            BUSINESS EXPERIENCE
NAME/OFFICE                        THE FUND                              DURING THE PAST FIVE YEARS
- -------------------------  ------------------------  -------------------------------------------------------------------
<S>                        <C>                       <C>
Cheng-Hock Lau             Portfolio Manager since   Chief Investment Officer for Global Fixed Income (since October
                            1998                      1996) and Senior Portfolio Manager for Global/ International Fixed
                                                      Income (July 1995 to October 1996), INVESCO (NY), Inc. Employed by
                                                      Chancellor Capital from 1995 to October 1996. Senior Vice
                                                      President and Senior Portfolio Manager, Fiduciary Trust Company
                                                      International, from 1993 to 1995.
Heidi Koch                 Portfolio Manager since   Portfolio Manager, INVESCO (NY), Inc., since October 1996. Employed
                            1997                      by Chancellor Capital from 1991 to October 1996.
</TABLE>
 
                               Prospectus Page 39
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
                              FINANCIAL HIGHLIGHTS
 
- --------------------------------------------------------------------------------
 
The financial highlights table is intended to help you understand the financial
performance of each fund for the past 5 years. Certain information reflects
financial results for a single fund share.
 
The total returns in the table represent the rate that an investor would have
earned (or lost) on an investment in a fund (assuming reinvestment of all
dividends and distributions).
 
This information has been audited by PricewaterhouseCoopers LLP, whose report,
along with each fund's financial statements, is included in that fund's annual
report, which is available upon request.
 
                      GT GLOBAL VARIABLE INVESTMENT SERIES
 
<TABLE>
<CAPTION>
                                                                                    GT GLOBAL
                                                    -------------------------------------------------------------------------
                                                                            VARIABLE NEW PACIFIC FUND
                                                    -------------------------------------------------------------------------
                                                                             YEAR ENDED DECEMBER 31,
                                                    -------------------------------------------------------------------------
                                                        1998           1997           1996           1995           1994
                                                    ------------   ------------   ------------   ------------   -------------
<S>                                                 <C>            <C>            <C>            <C>            <C>
Per Share Operating Performance:
Net asset value, beginning of period..............    $ 10.50        $ 18.02        $ 13.92        $ 14.01         $ 16.07
                                                    ------------   ------------   ------------   ------------   -------------
  Net investment income (loss)....................       0.27(a)        0.26(b)        0.13(c)        0.20(d)         0.08(e)
  Net realized and unrealized gain (loss) on
   investments....................................      (1.80)         (7.61)          4.16          (0.23)          (2.08)
                                                    ------------   ------------   ------------   ------------   -------------
    Net increase (decrease) resulting from
     operations                                         (1.53)         (7.35)          4.29          (0.03)          (2.00)
                                                    ------------   ------------   ------------   ------------   -------------
Distributions to shareholders:
  From net investment income......................      (0.25)         (0.10)         (0.19)         (0.06)          (0.06)
  From net realized gain on investments...........         --          (0.07)            --             --              --
  In excess of net investment income..............         --             --             --             --              --
  In excess of net investment income..............         --             --             --             --              --
  Return of capital...............................         --             --             --             --              --
                                                    ------------   ------------   ------------   ------------   -------------
    Total distributions...........................      (0.25)         (0.17)         (0.19)         (0.06)          (0.06)
                                                    ------------   ------------   ------------   ------------   -------------
Net asset value, end of period....................    $  8.72        $ 10.50        $ 18.02        $ 13.92         $ 14.01
                                                    ------------   ------------   ------------   ------------   -------------
                                                    ------------   ------------   ------------   ------------   -------------
Total investment return (f).......................     (14.54)%       (41.11)%        30.97%         (0.21)%        (12.47)%
                                                    ------------   ------------   ------------   ------------   -------------
                                                    ------------   ------------   ------------   ------------   -------------
Ratios and supplemental data:
Net assets, end of period (in 000's)..............    $11,010        $16,490        $32,670        $23,025         $19,391
Ratio of net investment income (loss) to average
 net assets:
  With reimbursement and/or expense reductions....       2.38%          1.50%          0.88%          1.27%           0.83%
  Without reimbursement and/or expense
   reductions.....................................       1.85%          1.16%          0.60%          1.74%           0.48%
Ratio of expenses to average net assets excluding
 interest expense:
  With reimbursement and/or expense reductions....       1.23%          1.09%          1.12%          1.14%           1.25%
  Without reimbursement and/or expense
   reductions.....................................       1.76%          1.43%          1.40%          1.61%           1.60%
Ratio of interest expense to average net assets...       0.02%            --%            --%            --%             --%
Portfolio turnover................................        102%            93%            70%            67%             30%
</TABLE>
 
- ------------------
(a) Includes reimbursement of Fund operating expenses of $0.05.
 
(b) Includes reimbursement of Fund operating expenses of $0.02.
 
(c) Includes reimbursement of Fund operating expenses of $0.04.
 
(d) Includes reimbursement of Fund operating expenses of $0.04.
 
(e) Includes reimbursement of Fund operating expenses of $0.03.
 
(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.
 
                               Prospectus Page 40
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
                GT GLOBAL VARIABLE INVESTMENT SERIES (CONTINUED)
 
<TABLE>
<CAPTION>
                                                                                    GT GLOBAL
                                                    -------------------------------------------------------------------------
                                                                              VARIABLE EUROPE FUND
                                                    -------------------------------------------------------------------------
                                                                             YEAR ENDED DECEMBER 31,
                                                    -------------------------------------------------------------------------
                                                        1998           1997           1996           1995           1994
                                                    ------------   ------------   ------------   ------------   -------------
<S>                                                 <C>            <C>            <C>            <C>            <C>
Per Share Operating Performance:
Net asset value, beginning of period..............    $ 22.52        $ 21.34        $ 16.52        $ 15.22         $ 15.33
                                                    ------------   ------------   ------------   ------------   -------------
  Net investment income (loss)....................       0.08(a)        0.05(b)        0.05(c)        0.18(d)         0.16(e)
  Net realized and unrealized gain (loss) on
   investments....................................       3.74           3.10           4.93           1.28           (0.25)
                                                    ------------   ------------   ------------   ------------   -------------
    Net increase (decrease) resulting from
     operations                                          3.82           3.15           4.98           1.46           (0.09)
                                                    ------------   ------------   ------------   ------------   -------------
Distributions to shareholders:
  From net investment income......................      (0.05)         (0.06)         (0.16)         (0.16)             --
  From net realized gain on investments...........      (2.97)         (1.91)            --             --           (0.02)
  In excess of net investment income..............         --             --             --             --              --
  In excess of net investment income..............         --             --             --             --              --
  Return of capital...............................         --             --             --             --              --
                                                    ------------   ------------   ------------   ------------   -------------
    Total distributions...........................      (3.02)         (1.97)         (0.16)         (0.16)          (0.02)
                                                    ------------   ------------   ------------   ------------   -------------
Net asset value, end of period....................    $ 23.32        $ 22.52        $ 21.34        $ 16.52         $ 15.22
                                                    ------------   ------------   ------------   ------------   -------------
                                                    ------------   ------------   ------------   ------------   -------------
Total investment return (f).......................      15.98%         15.15%         30.25%          9.66%          (0.59)%
                                                    ------------   ------------   ------------   ------------   -------------
                                                    ------------   ------------   ------------   ------------   -------------
Ratios and supplemental data:
Net assets, end of period (in 000's)..............    $32,617        $27,410        $24,537        $15,641         $15,020
Ratio of net investment income (loss) to average
 net assets:
  With reimbursement and/or expense reductions....       0.34%          0.22%          0.36%          1.12%           1.48%
  Without reimbursement and/or expense
   reductions.....................................       0.30%          0.01%          0.09%          0.60%           1.07%
Ratio of expenses to average net assets excluding
 interest expense:
  With reimbursement and/or expense reductions....       1.23%          1.20%          1.20%          1.20%           1.25%
  Without reimbursement and/or expense
   reductions.....................................       1.27%          1.41%          1.47%          1.72%           1.66%
Ratio of interest expense to average net assets...       0.32%            --%            --%            --%             --%
Portfolio turnover................................        107%           117%            56%           123%             61%
</TABLE>
 
- ------------------
(a) Includes reimbursement of Fund operating expenses of $0.01.
 
(b) Includes reimbursement of Fund operating expenses of $0.02.
 
(c) Includes reimbursement of Fund operating expenses of $0.04.
 
(d) Includes reimbursement of Fund operating expenses of $0.08.
 
(e) Includes reimbursement of Fund operating expenses of $0.04.
 
(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.
 
                               Prospectus Page 41
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
                GT GLOBAL VARIABLE INVESTMENT SERIES (CONTINUED)
 
<TABLE>
<CAPTION>
                                                                                    GT GLOBAL
                                                    -------------------------------------------------------------------------
                                                                           VARIABLE INTERNATIONAL FUND
                                                    -------------------------------------------------------------------------
                                                                                                                JULY 5, 1994
                                                                                                                (COMMENCEMENT
                                                                                                                     OF
                                                                                                                 OPERATIONS)
                                                                     YEAR ENDED DECEMBER 31,                         TO
                                                    ---------------------------------------------------------   DECEMBER 31,
                                                        1998           1997           1996           1995           1994
                                                    ------------   ------------   ------------   ------------   -------------
<S>                                                 <C>            <C>            <C>            <C>            <C>
Per Share Operating Performance:
Net asset value, beginning of period..............    $ 12.72        $ 11.91        $ 11.01        $ 11.25         $ 12.00
                                                    ------------   ------------   ------------   ------------   -------------
  Net investment income (loss)....................       0.10*(a)       0.15(b)        0.05(c)        0.09(d)         0.06(e)
  Net realized and unrealized gain (loss) on
   investments....................................      (0.11)          0.68           0.89          (0.22)          (0.76)
                                                    ------------   ------------   ------------   ------------   -------------
    Net increase (decrease) resulting from
     operations                                         (0.01)          0.83           0.94          (0.13)          (0.70)
                                                    ------------   ------------   ------------   ------------   -------------
Distributions to shareholders:
  From net investment income......................      (0.09)         (0.02)            --          (0.09)          (0.05)
  From net realized gain on investments...........      (0.75)            --          (0.04)         (0.02)             --
                                                    ------------   ------------   ------------   ------------   -------------
    Total distributions...........................      (0.84)         (0.02)         (0.04)         (0.11)          (0.05)
                                                    ------------   ------------   ------------   ------------   -------------
Net asset value, end of period....................    $ 11.87        $ 12.72        $ 11.91        $ 11.01         $ 11.25
                                                    ------------   ------------   ------------   ------------   -------------
                                                    ------------   ------------   ------------   ------------   -------------
Total investment return (f)+......................      (0.64)%         6.93%          8.52%         (1.14)%         (5.81)%
                                                    ------------   ------------   ------------   ------------   -------------
                                                    ------------   ------------   ------------   ------------   -------------
Ratios and supplemental data:
Net assets, end of period (in 000's)..............    $ 7,327        $ 5,929        $ 4,782        $ 3,663         $ 2,229
Ratio of net investment income (loss) to average
 net assets:
  With reimbursement and/or expense
   reductions++...................................       1.64%          1.22%          0.48%          0.93%           3.33%
  Without reimbursement and/or expense
   reductions++...................................       0.56%          0.05%         (0.86)%        (1.35)%         (2.56)%
Ratio of expenses to average net assets excluding
 interest expense:
  With reimbursement and/or expense
   reductions++...................................       1.25%          1.14%          1.15%          1.25%           0.69%
  Without reimbursement and/or expense
   reductions++...................................       2.33%          2.31%          2.49%          3.53%           6.58%
Ratio of interest expense to average net assets...       0.09%            --%            --%            --%             --%
Portfolio turnover++..............................        105%           112%            92%           107%             17%
</TABLE>
 
- ------------------
*   Calculated based upon average shares outstanding during the period.
 
(a) Includes reimbursement of Fund operating expenses of $0.09.
 
(b) Includes reimbursement of Fund operating expenses of $0.06.
 
(c) Includes reimbursement of Fund operating expenses of $0.14.
 
(d) Includes reimbursement of Fund operating expenses of $0.22.
 
(e) Includes reimbursement of Fund operating expenses of $0.11.
 
(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.
 
                               Prospectus Page 42
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
                GT GLOBAL VARIABLE INVESTMENT SERIES (CONTINUED)
 
<TABLE>
<CAPTION>
                                                                                    GT GLOBAL
                                                    -------------------------------------------------------------------------
                                                                              VARIABLE AMERICA FUND
                                                    -------------------------------------------------------------------------
                                                                             YEAR ENDED DECEMBER 31,
                                                    -------------------------------------------------------------------------
                                                        1998           1997           1996           1995           1994
                                                    ------------   ------------   ------------   ------------   -------------
<S>                                                 <C>            <C>            <C>            <C>            <C>
Per Share Operating Performance:
Net asset value, beginning of period..............    $ 21.68        $ 19.71        $ 19.46        $ 15.81         $ 13.75
                                                    ------------   ------------   ------------   ------------   -------------
  Net investment income (loss)....................      (0.13)         (0.07)          0.12           0.21(a)         0.48(b)
  Net realized and unrealized gain (loss) on
   investments....................................       1.80           2.88           3.18           3.80            2.08
                                                    ------------   ------------   ------------   ------------   -------------
    Net increase (decrease) resulting from
     operations                                          1.67           2.81           3.30           4.01            2.56
                                                    ------------   ------------   ------------   ------------   -------------
Distributions to shareholders:
  From net investment income......................         --          (0.09)         (0.30)         (0.07)          (0.50)
  From net realized gain on investments...........      (3.20)         (0.75)         (2.75)         (0.29)             --
  In excess of net investment income..............         --             --             --             --              --
  In excess of net investment income..............         --             --             --             --              --
  Return of capital...............................         --             --             --             --              --
                                                    ------------   ------------   ------------   ------------   -------------
    Total distributions...........................      (3.20)         (0.84)         (3.05)         (0.36)          (0.50)
                                                    ------------   ------------   ------------   ------------   -------------
Net asset value, end of period....................    $ 20.15        $ 21.68        $ 19.71        $ 19.46         $ 15.81
                                                    ------------   ------------   ------------   ------------   -------------
                                                    ------------   ------------   ------------   ------------   -------------
Total investment return (c).......................       8.09%         14.88%         18.55%         25.37%          18.88%
                                                    ------------   ------------   ------------   ------------   -------------
                                                    ------------   ------------   ------------   ------------   -------------
Ratios and supplemental data:
Net assets, end of period (in 000's)..............    $40,833        $43,977        $41,647        $37,643         $15,257
Ratio of net investment income (loss) to average
 net assets:
  With reimbursement and/or expense reductions....      (0.59)%        (0.35)%         0.52%          1.66%           1.83%
  Without reimbursement and/or expense
   reductions.....................................      (0.59)%        (0.42)%         0.46%          1.60%           0.76%
Ratio of expenses to average net assets excluding
 interest expense:
  With reimbursement and/or expense reductions....       0.95%          0.91%          0.95%          1.00%           0.98%
  Without reimbursement and/or expense
   reductions.....................................       0.95%          0.98%          1.01%          1.06%           2.05%
Ratio of interest expense to average net assets...       0.08%            --%            --%            --%             --%
Portfolio turnover................................        181%           210%           248%            79%            139%
</TABLE>
 
- ------------------
(a) Includes reimbursement of Fund operating expenses of $0.01.
 
(b) Includes reimbursement of Fund operating expenses of $0.28.
 
(c) 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.
 
                               Prospectus Page 43
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
                      GT GLOBAL VARIABLE INVESTMENT TRUST
 
<TABLE>
<CAPTION>
                                                                            GT GLOBAL
                                                    ----------------------------------------------------------
                                                                   VARIABLE INFRASTRUCTURE FUND
                                                    ----------------------------------------------------------
                                                                                                  JANUARY 31,
                                                                                                     1995
                                                                                                 (COMMENCEMENT
                                                                                                      OF
                                                                                                  OPERATIONS)
                                                             YEAR ENDED DECEMBER 31,                  TO
                                                    ------------------------------------------   DECEMBER 31,
                                                        1998           1997           1996           1995
                                                    ------------   ------------   ------------   -------------
<S>                                                 <C>            <C>            <C>            <C>
Per Share Operating Performance:
Net asset value, beginning of period..............    $ 16.35        $ 16.47        $ 13.27         $ 12.00
                                                    ------------   ------------   ------------   -------------
  Net investment income (loss)....................       0.31(a)        0.12(b)        0.11(c)         0.07(d)
  Net realized and unrealized gain (loss) on
   investments....................................       0.77           0.74           3.19            1.20
                                                    ------------   ------------   ------------   -------------
    Net increase (decrease) resulting from
     operations                                          1.08           0.86           3.30            1.27
                                                    ------------   ------------   ------------   -------------
Distributions to shareholders:
  From net investment income......................      (0.17)         (0.10)         (0.03)             --
  From net realized gain on investments...........         --          (0.88)         (0.07)             --
  In excess of net investment income..............         --             --             --              --
  In excess of net investment income..............         --             --             --              --
  Return of capital...............................         --             --             --              --
                                                    ------------   ------------   ------------   -------------
    Total distributions...........................      (0.17)         (0.98)         (0.10)             --
                                                    ------------   ------------   ------------   -------------
Net asset value, end of period....................    $ 17.26        $ 16.35        $ 16.47         $ 13.27
                                                    ------------   ------------   ------------   -------------
                                                    ------------   ------------   ------------   -------------
Total investment return (f)+......................       6.34%          5.00%         24.88%          10.58%
                                                    ------------   ------------   ------------   -------------
                                                    ------------   ------------   ------------   -------------
Ratios and supplemental data:
Net assets, end of period (in 000's)..............    $ 6,341        $ 8,745        $ 6,054         $ 1,594
Ratio of net investment income (loss) to average
 net assets:
  With reimbursement and/or expense
   reductions++...................................       1.37%          0.99%          1.35%           1.24%
  Without reimbursement and/or expense
   reductions++...................................       0.94%          0.68%          0.03%          (6.11)%
Ratio of expenses to average net assets excluding
 interest expense:
  With reimbursement and/or expense
   reductions++...................................       1.25%          1.18%          1.21%           1.22%
  Without reimbursement and/or expense
   reductions++...................................       1.68%          1.49%          2.53%           8.57%
Ratio of interest expense to average net assets...         --%            --%            --%             --%
Portfolio turnover++..............................        110%            46%            76%             38%
</TABLE>
 
- ------------------
(a) Includes reimbursement of Fund operating expenses of $0.09.
 
(b) Includes reimbursement of Fund operating expenses of $0.04.
 
(c) Includes reimbursement of Fund operating expenses of $0.19.
 
(d) Includes reimbursement of Fund operating expenses of $0.42.
 
(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.
 
                               Prospectus Page 44
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
                GT GLOBAL VARIABLE INVESTMENT TRUST (CONTINUED)
 
<TABLE>
<CAPTION>
                                                                            GT GLOBAL
                                                    ----------------------------------------------------------
                                                                 VARIABLE NATURAL RESOURCES FUND
                                                    ----------------------------------------------------------
                                                                                                  JANUARY 31,
                                                                                                     1995
                                                                                                 (COMMENCEMENT
                                                                                                      OF
                                                                                                  OPERATIONS)
                                                             YEAR ENDED DECEMBER 31,                  TO
                                                    ------------------------------------------   DECEMBER 31,
                                                        1998           1997           1996           1995
                                                    ------------   ------------   ------------   -------------
<S>                                                 <C>            <C>            <C>            <C>
Per Share Operating Performance:
Net asset value, beginning of period..............    $ 20.20        $ 20.98        $ 13.88         $ 12.00
                                                    ------------   ------------   ------------   -------------
  Net investment income (loss)....................       0.23(a)       (0.03)(b)      (0.06)(c)        0.73(d)
  Net realized and unrealized gain (loss) on
   investments....................................      (6.38)          0.18           7.16            1.91
                                                    ------------   ------------   ------------   -------------
    Net increase (decrease) resulting from
     operations                                         (6.15)          0.15           7.10            2.64
                                                    ------------   ------------   ------------   -------------
Distributions to shareholders:
  From net investment income......................         --             --             --           (0.71)
  From net realized gain on investments...........      (3.15)         (0.93)            --              --
  In excess of net investment income..............         --             --             --              --
  In excess of net investment income..............         --             --             --           (0.05)
  Return of capital...............................         --             --             --              --
                                                    ------------   ------------   ------------   -------------
    Total distributions...........................      (3.15)         (0.93)            --           (0.76)
                                                    ------------   ------------   ------------   -------------
Net asset value, end of period....................    $ 10.90        $ 20.20        $ 20.98         $ 13.88
                                                    ------------   ------------   ------------   -------------
                                                    ------------   ------------   ------------   -------------
Total investment return (f)+......................     (33.01)%         1.29%         51.15%          22.20%
                                                    ------------   ------------   ------------   -------------
                                                    ------------   ------------   ------------   -------------
Ratios and supplemental data:
Net assets, end of period (in 000's)..............    $ 6,396        $16,709        $16,308         $ 1,365
Ratio of net investment income (loss) to average
 net assets:
  With reimbursement and/or expense
   reductions++...................................       1.22%         (0.16)%        (0.60)%         10.87%
  Without reimbursement and/or expense
   reductions++...................................       0.97%         (0.38)%        (1.30)%          2.94%
Ratio of expenses to average net assets excluding
 interest expense:
  With reimbursement and/or expense
   reductions++...................................       1.24%          1.20%          1.19%           1.14%
  Without reimbursement and/or expense
   reductions++...................................       1.49%          1.42%          1.89%           9.07%
Ratio of interest expense to average net assets...       0.04%            --%            --%             --%
Portfolio turnover++..............................        305%           315%           199%            875%
</TABLE>
 
- ------------------
(a) Includes reimbursement of Fund operating expenses of $0.04.
 
(b) Includes reimbursement of Fund operating expenses of $0.03.
 
(c) Includes reimbursement of Fund operating expenses of $0.11.
 
(d) Includes reimbursement of Fund operating expenses of $0.47.
 
(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.
 
                               Prospectus Page 45
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
                GT GLOBAL VARIABLE INVESTMENT TRUST (CONTINUED)
 
<TABLE>
<CAPTION>
                                                                                    GT GLOBAL
                                                    -------------------------------------------------------------------------
                                                                        VARIABLE TELECOMMUNICATIONS FUND
                                                    -------------------------------------------------------------------------
                                                                             YEAR ENDED DECEMBER 31,
                                                    -------------------------------------------------------------------------
                                                        1998           1997           1996           1995           1994
                                                    ------------   ------------   ------------   ------------   -------------
<S>                                                 <C>            <C>            <C>            <C>            <C>
Per Share Operating Performance:
Net asset value, beginning of period..............    $ 18.40        $ 18.14        $ 16.87        $ 13.98         $ 13.07
                                                    ------------   ------------   ------------   ------------   -------------
  Net investment income (loss)....................      (0.01)(a)      (0.02)         (0.05)          0.02            0.01(b)
  Net realized and unrealized gain (loss) on
   investments....................................       3.99           2.59           3.31           3.26            0.92
                                                    ------------   ------------   ------------   ------------   -------------
    Net increase (decrease) resulting from
     operations                                          3.98           2.57           3.26           3.28            0.93
                                                    ------------   ------------   ------------   ------------   -------------
Distributions to shareholders:
  From net investment income......................         --             --          (0.02)         (0.03)          (0.02)
  From net realized gain on investments...........      (1.72)         (2.31)         (1.97)         (0.36)             --
  In excess of net realized gain on investments...         --             --             --             --              --
                                                    ------------   ------------   ------------   ------------   -------------
    Total distributions...........................      (1.72)         (2.31)         (1.99)         (0.39)          (0.02)
                                                    ------------   ------------   ------------   ------------   -------------
Net asset value, end of period....................    $ 20.66        $ 18.40        $ 18.14        $ 16.87         $ 13.98
                                                    ------------   ------------   ------------   ------------   -------------
                                                    ------------   ------------   ------------   ------------   -------------
Total investment return (c).......................      22.11%         14.56%         19.34%         23.66%           7.15%
                                                    ------------   ------------   ------------   ------------   -------------
                                                    ------------   ------------   ------------   ------------   -------------
Ratios and supplemental data:
Net assets, end of period (in 000's)..............    $69,459        $68,186        $63,258        $50,778         $36,029
Ratio of net investment income (loss) to average
 net assets:
  With reimbursement and/or expense reductions....      (0.04)%        (0.10)%        (0.26)%         0.16%           0.31%
  Without reimbursement and/or expense
   reductions.....................................      (0.05)%        (0.15)%        (0.31)%         0.10%           0.07%
Ratio of expenses to average net assets excluding
 interest expense:
  With reimbursement and/or expense reductions....       1.16%          1.11%          1.12%          1.20%           1.25%
  Without reimbursement and/or expense
   reductions.....................................       1.17%          1.16%          1.17%          1.26%           1.49%
Ratio of interest expense to average net assets...       0.01%            --%            --%            --%             --%
Portfolio turnover................................         73%            91%            77%            70%             81%
</TABLE>
 
- ------------------
(a) Includes reimbursement of Fund operating expenses of $0.01.
 
(b) Includes reimbursement of Fund operating expenses of $0.01.
 
(c) 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.
 
                               Prospectus Page 46
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
                GT GLOBAL VARIABLE INVESTMENT TRUST (CONTINUED)
 
<TABLE>
<CAPTION>
                                                                                    GT GLOBAL
                                                    -------------------------------------------------------------------------
                                                                           VARIABLE LATIN AMERICA FUND
                                                    -------------------------------------------------------------------------
                                                                             YEAR ENDED DECEMBER 31,
                                                    -------------------------------------------------------------------------
                                                        1998           1997           1996           1995           1994
                                                    ------------   ------------   ------------   ------------   -------------
<S>                                                 <C>            <C>            <C>            <C>            <C>
Per Share Operating Performance:
Net asset value, beginning of period..............    $ 16.95        $ 14.80        $ 12.42        $ 19.17         $ 17.68
                                                    ------------   ------------   ------------   ------------   -------------
  Net investment income (loss)....................       0.39(a)        0.24(b)        0.27(c)        0.51(d)         0.11(e)
  Net realized and unrealized gain (loss) on
   investments....................................      (7.36)          1.91           2.49          (5.10)           1.49
                                                    ------------   ------------   ------------   ------------   -------------
    Net increase (decrease) resulting from
     operations                                         (6.97)          2.15           2.76          (4.59)           1.60
                                                    ------------   ------------   ------------   ------------   -------------
Distributions to shareholders:
  From net investment income......................      (0.25)            --          (0.37)         (0.16)          (0.04)
  From net realized gain on investments...........      (0.12)            --             --          (2.00)          (0.07)
  In excess of net realized gain on investments...         --             --          (0.01)            --              --
                                                    ------------   ------------   ------------   ------------   -------------
    Total distributions...........................      (0.37)            --          (0.38)         (2.16)          (0.11)
                                                    ------------   ------------   ------------   ------------   -------------
Net asset value, end of period....................    $  9.61        $ 16.95        $ 14.80        $ 12.42         $ 19.17
                                                    ------------   ------------   ------------   ------------   -------------
                                                    ------------   ------------   ------------   ------------   -------------
Total investment return (f).......................     (41.71)%        14.53%         22.48%        (24.14)%          9.14%
                                                    ------------   ------------   ------------   ------------   -------------
                                                    ------------   ------------   ------------   ------------   -------------
Ratios and supplemental data:
Net assets, end of period (in 000's)..............    $ 9,935        $28,786        $22,928        $19,771         $26,631
Ratio of net investment income (loss) to average
 net assets:
  With reimbursement and/or expense reductions....       1.97%          1.36%          1.94%          4.43%           0.82%
  Without reimbursement and/or expense
   reductions.....................................       1.70%          1.21%          1.69%          3.92%           0.49%
Ratio of expenses to average net assets excluding
 interest expense:
  With reimbursement and/or expense reductions....       1.25%          1.25%          1.17%          1.18%           1.25%
  Without reimbursement and/or expense
   reductions.....................................       1.52%          1.40%          1.42%          1.69%           1.58%
Ratio of interest expense to average net assets...       0.14%            --%            --%            --%             --%
Portfolio turnover................................         43%           141%           102%           140%            185%
</TABLE>
 
- ------------------
(a) Includes reimbursement of Fund operating expenses of $0.04.
 
(b) Includes reimbursement of Fund operating expenses of $0.02.
 
(c) Includes reimbursement of Fund operating expenses of $0.02.
 
(d) Includes reimbursement of Fund operating expenses of $0.06.
 
(e) Includes reimbursement of Fund operating expenses of $0.04.
 
(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.
 
                               Prospectus Page 47
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
                GT GLOBAL VARIABLE INVESTMENT TRUST (CONTINUED)
 
<TABLE>
<CAPTION>
                                                                                    GT GLOBAL
                                                    -------------------------------------------------------------------------
                                                                         VARIABLE EMERGING MARKETS FUND
                                                    -------------------------------------------------------------------------
                                                                                                                JULY 5, 1994
                                                                                                                (COMMENCEMENT
                                                                                                                     OF
                                                                                                                 OPERATIONS)
                                                                     YEAR ENDED DECEMBER 31,                         TO
                                                    ---------------------------------------------------------   DECEMBER 31,
                                                        1998           1997           1996           1995           1994
                                                    ------------   ------------   ------------   ------------   -------------
<S>                                                 <C>            <C>            <C>            <C>            <C>
Per Share Operating Performance:
Net asset value, beginning of period..............    $ 11.57        $ 14.26        $ 10.88        $ 11.89         $ 12.00
                                                    ------------   ------------   ------------   ------------   -------------
  Net investment income (loss)....................       0.27(a)        0.15(b)        0.11(c)        0.14(d)         0.07(e)
  Net realized and unrealized gain (loss) on
   investments....................................      (4.34)         (1.89)          3.27          (1.04)          (0.05)
                                                    ------------   ------------   ------------   ------------   -------------
    Net increase (decrease) resulting from
     operations                                         (4.07)         (1.74)          3.38          (0.90)           0.02
                                                    ------------   ------------   ------------   ------------   -------------
Distributions to shareholders:
  From net investment income......................         --          (0.06)            --          (0.09)          (0.07)
  From net realized gain on investments...........      (0.81)         (0.89)            --             --              --
  In excess of net investment income..............         --             --             --             --              --
  In excess of net investment income..............         --             --             --             --           (0.06)
  Return of capital...............................         --             --             --          (0.02)             --
                                                    ------------   ------------   ------------   ------------   -------------
    Total distributions...........................      (0.81)         (0.95)            --          (0.11)          (0.13)
                                                    ------------   ------------   ------------   ------------   -------------
Net asset value, end of period....................    $  6.69        $ 11.57        $ 14.26        $ 10.88         $ 11.89
                                                    ------------   ------------   ------------   ------------   -------------
                                                    ------------   ------------   ------------   ------------   -------------
Total investment return (f)+......................     (36.90)%       (13.76)%        31.07%         (7.54)%          0.12%
                                                    ------------   ------------   ------------   ------------   -------------
                                                    ------------   ------------   ------------   ------------   -------------
Ratios and supplemental data:
Net assets, end of period (in 000's)..............    $ 5,651        $16,509        $17,604        $ 8,983         $ 7,267
Ratio of net investment income (loss) to average
 net assets:
  With reimbursement and/or expense
   reductions++...................................       1.61%          1.05%          0.89%          1.55%           4.10%
  Without reimbursement and/or expense
   reductions++...................................       0.72%          0.78%          0.39%          0.51%          (0.20)%
Ratio of expenses to average net assets excluding
 interest expense:
  With reimbursement and/or expense
   reductions++...................................       1.23%          1.22%          1.18%          1.18%           0.00%
  Without reimbursement and/or expense
   reductions++...................................       2.12%          1.49%          1.68%          2.22%           4.30%
Ratio of interest expense to average net assets...       0.17%            --%            --%            --%             --%
Portfolio turnover++..............................        110%           212%           216%           210%            117%
</TABLE>
 
- ------------------
(a) Includes reimbursement of Fund operating expenses of $0.08.
 
(b) Includes reimbursement of Fund operating expenses of $0.03.
 
(c) Includes reimbursement of Fund operating expenses of $0.05.
 
(d) Includes reimbursement of Fund operating expenses of $0.09.
 
(e) Includes reimbursement of Fund operating expenses of $0.07.
 
(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.
 
                               Prospectus Page 48
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
                GT GLOBAL VARIABLE INVESTMENT TRUST (CONTINUED)
 
<TABLE>
<CAPTION>
                                                                                   GT GLOBAL
                                                    ------------------------------------------------------------------------
                                                                         VARIABLE GROWTH & INCOME FUND
                                                    ------------------------------------------------------------------------
                                                                            YEAR ENDED DECEMBER 31,
                                                    ------------------------------------------------------------------------
                                                        1998           1997           1996           1995           1994
                                                    ------------   ------------   ------------   ------------   ------------
<S>                                                 <C>            <C>            <C>            <C>            <C>
Per Share Operating Performance:
Net asset value, beginning of period..............    $ 18.60        $ 16.51        $ 14.57        $ 12.99        $ 13.77
                                                    ------------   ------------   ------------   ------------   ------------
  Net investment income (loss)....................       0.53           0.41           0.53(a)        0.52(b)        0.46(c)
  Net realized and unrealized gain (loss) on
   investments....................................       3.08           2.23           1.81           1.46          (0.85)
                                                    ------------   ------------   ------------   ------------   ------------
    Net increase (decrease) resulting from
     operations                                          3.61           2.64           2.34           1.98          (0.39)
                                                    ------------   ------------   ------------   ------------   ------------
Distributions to shareholders:
  From net investment income......................      (0.44)         (0.51)         (0.35)         (0.40)         (0.39)
  From net realized gain on investments...........      (0.26)         (0.04)         (0.05)            --             --
  In excess of net realized gain on investments...         --             --             --             --             --
                                                    ------------   ------------   ------------   ------------   ------------
    Total distributions...........................      (0.70)         (0.55)         (0.40)         (0.40)         (0.39)
                                                    ------------   ------------   ------------   ------------   ------------
Net asset value, end of period....................    $ 21.51        $ 18.60        $ 16.51        $ 14.57        $ 12.99
                                                    ------------   ------------   ------------   ------------   ------------
                                                    ------------   ------------   ------------   ------------   ------------
Total investment return (d).......................      19.60%         16.22%         16.33%         15.49%         (2.85)%
                                                    ------------   ------------   ------------   ------------   ------------
                                                    ------------   ------------   ------------   ------------   ------------
Ratios and supplemental data:
Net assets, end of period (in 000's)..............    $55,580        $50,356        $36,433        $30,565        $25,580
Ratio of net investment income (loss) to average
 net assets:
  With reimbursement and/or expense reductions....       2.53%          2.86%          3.58%          3.87%          3.69%
  Without reimbursement and/or expense
   reductions.....................................       2.53%          2.72%          3.48%          3.66%          3.45%
Ratio of expenses to average net assets excluding
 interest expense:
  With reimbursement and/or expense reductions....       1.22%          1.13%          1.20%          1.23%          1.25%
  Without reimbursement and/or expense
   reductions.....................................       1.22%          1.27%          1.30%          1.44%          1.49%
Ratio of interest expense to average net assets...       0.04%            --%            --%            --%            --%
Portfolio turnover................................         72%            60%            57%            73%            53%
</TABLE>
 
- ------------------
(a) Includes reimbursement of Fund operating expenses of $0.01.
 
(b) Includes reimbursement of Fund operating expenses of $0.03.
 
(c) Includes reimbursement of Fund operating expenses of $0.03.
 
(d) 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.
 
                               Prospectus Page 49
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
                GT GLOBAL VARIABLE INVESTMENT TRUST (CONTINUED)
 
<TABLE>
<CAPTION>
                                                                                   GT GLOBAL
                                                    ------------------------------------------------------------------------
                                                                         VARIABLE STRATEGIC INCOME FUND
                                                    ------------------------------------------------------------------------
                                                                            YEAR ENDED DECEMBER 31,
                                                    ------------------------------------------------------------------------
                                                        1998           1997           1996           1995           1994
                                                    ------------   ------------   ------------   ------------   ------------
<S>                                                 <C>            <C>            <C>            <C>            <C>
Per Share Operating Performance:
Net asset value, beginning of period..............    $ 13.39        $ 13.38        $ 11.86        $ 10.82        $ 14.57
                                                    ------------   ------------   ------------   ------------   ------------
  Net investment income (loss)....................       0.97(a)        1.00(b)        0.95(c)        1.07(d)        1.71(e)
  Net realized and unrealized gain (loss) on
   investments....................................      (1.05)         (0.07)          1.50           0.93          (4.17)
                                                    ------------   ------------   ------------   ------------   ------------
    Net increase (decrease) resulting from
     operations                                         (0.08)          0.93           2.45           2.00          (2.46)
                                                    ------------   ------------   ------------   ------------   ------------
Distributions to shareholders:
  From net investment income......................      (0.92)         (0.92)         (0.85)         (0.96)         (0.79)
  From net realized gain on investments...........         --             --          (0.08)            --          (0.45)
  In excess of net investment income..............         --             --             --             --             --
  In excess of net investment income..............         --             --             --             --             --
  Return of capital...............................         --             --             --             --          (0.05)
                                                    ------------   ------------   ------------   ------------   ------------
    Total distributions...........................      (0.92)         (0.92)         (0.93)         (0.96)         (1.29)
                                                    ------------   ------------   ------------   ------------   ------------
Net asset value, end of period....................    $ 12.39        $ 13.39        $ 13.38        $ 11.86        $ 10.82
                                                    ------------   ------------   ------------   ------------   ------------
                                                    ------------   ------------   ------------   ------------   ------------
Total investment return (f).......................      (0.61)%         7.14%         21.58%         19.50%        (17.09)%
                                                    ------------   ------------   ------------   ------------   ------------
                                                    ------------   ------------   ------------   ------------   ------------
Ratios and supplemental data:
Net assets, end of period (in 000's)..............    $22,022        $28,497        $31,718        $25,345        $23,367
Ratio of net investment income (loss) to average
 net assets:
  With reimbursement and/or expense reductions....       7.16%          7.20%          7.74%          9.59%          7.58%
  Without reimbursement and/or expense
   reductions.....................................       6.97%          7.03%          7.59%          9.35%          7.43%
Ratio of expenses to average net assets excluding
 interest expense:
  With reimbursement and/or expense reductions....       1.00%          0.90%          0.99%          1.00%          1.00%
  Without reimbursement and/or expense
   reductions.....................................       1.19%          1.07%          1.14%          1.24%          1.15%
Ratio of interest expense to average net assets...       0.16%            --%            --%            --%            --%
Portfolio turnover................................        282%           185%           210%           193%           313%
</TABLE>
 
- ------------------
(a) Includes reimbursement of Fund operating expenses of $0.02.
 
(b) Includes reimbursement of Fund operating expenses of $0.01.
 
(c) Includes reimbursement of Fund operating expenses of $0.02.
 
(d) Includes reimbursement of Fund operating expenses of $0.03.
 
(e) Includes reimbursement of Fund operating expenses of $0.04.
 
(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.
 
                               Prospectus Page 50
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
                GT GLOBAL VARIABLE INVESTMENT TRUST (CONTINUED)
 
<TABLE>
<CAPTION>
                                                                                   GT GLOBAL
                                                    ------------------------------------------------------------------------
                                                                     VARIABLE GLOBAL GOVERNMENT INCOME FUND
                                                    ------------------------------------------------------------------------
                                                                            YEAR ENDED DECEMBER 31,
                                                    ------------------------------------------------------------------------
                                                        1998           1997           1996           1995           1994
                                                    ------------   ------------   ------------   ------------   ------------
<S>                                                 <C>            <C>            <C>            <C>            <C>
Per Share Operating Performance:
Net asset value, beginning of period..............    $ 11.17        $ 11.43        $ 11.51        $ 10.63        $ 12.53
                                                    ------------   ------------   ------------   ------------   ------------
  Net investment income (loss)....................       0.67(a)        0.82(b)        0.72(c)        0.79(d)        0.77(e)
  Net realized and unrealized gain (loss) on
   investments....................................       0.71          (0.34)         (0.06)          0.84          (1.85)
                                                    ------------   ------------   ------------   ------------   ------------
    Net increase (decrease) resulting from
     operations                                          1.38           0.48           0.66           1.63          (1.08)
                                                    ------------   ------------   ------------   ------------   ------------
Distributions to shareholders:
  From net investment income......................      (0.62)         (0.74)         (0.74)         (0.75)         (0.73)
  From net realized gain on investments...........         --             --             --             --             --
  In excess of net investment income..............      (0.02)            --             --             --             --
  In excess of net investment income..............         --             --             --             --             --
  Return of capital...............................         --             --             --             --          (0.09)
                                                    ------------   ------------   ------------   ------------   ------------
    Total distributions...........................      (0.64)         (0.74)         (0.74)         (0.75)         (0.82)
                                                    ------------   ------------   ------------   ------------   ------------
Net asset value, end of period....................    $ 11.91        $ 11.17        $ 11.43        $ 11.51        $ 10.63
                                                    ------------   ------------   ------------   ------------   ------------
                                                    ------------   ------------   ------------   ------------   ------------
Total investment return (f).......................      12.69%          4.37%          6.17%         15.85%         (8.70)%
                                                    ------------   ------------   ------------   ------------   ------------
                                                    ------------   ------------   ------------   ------------   ------------
Ratios and supplemental data:
Net assets, end of period (in 000's)..............    $ 8,801        $ 8,251        $10,397        $11,944        $ 9,654
Ratio of net investment income (loss) to average
 net assets:
  With reimbursement and/or expense reductions....       5.71%          6.33%          6.32%          7.03%          6.89%
  Without reimbursement and/or expense
   reductions.....................................       5.28%          5.74%          5.80%          6.37%          6.21%
Ratio of expenses to average net assets excluding
 interest expense:
  With reimbursement and/or expense reductions....       1.00%          0.95%          0.95%          1.00%          1.00%
  Without reimbursement and/or expense
   reductions.....................................       1.43%          1.54%          1.47%          1.66%          1.68%
Ratio of interest expense to average net assets...       0.07%            --%            --%            --%            --%
Portfolio turnover................................        224%           235%           235%           394%           350%
</TABLE>
 
- ------------------
(a) Includes reimbursement of Fund operating expenses of $0.05.
 
(b) Includes reimbursement of Fund operating expenses of $0.06.
 
(c) Includes reimbursement of Fund operating expenses of $0.06.
 
(d) Includes reimbursement of Fund operating expenses of $0.07.
 
(e) Includes reimbursement of Fund operating expenses of $0.08.
 
(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.
 
                               Prospectus Page 51
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
                GT GLOBAL VARIABLE INVESTMENT TRUST (CONTINUED)
 
<TABLE>
<CAPTION>
                                                                                   GT GLOBAL
                                                    ------------------------------------------------------------------------
                                                                      VARIABLE U.S. GOVERNMENT INCOME FUND
                                                    ------------------------------------------------------------------------
                                                                            YEAR ENDED DECEMBER 31,
                                                    ------------------------------------------------------------------------
                                                        1998           1997           1996           1995           1994
                                                    ------------   ------------   ------------   ------------   ------------
<S>                                                 <C>            <C>            <C>            <C>            <C>
Per Share Operating Performance:
Net asset value, beginning of period..............    $ 11.70        $ 11.41        $ 11.74        $ 10.79        $ 12.23
                                                    ------------   ------------   ------------   ------------   ------------
  Net investment income (loss)....................       0.63(a)        0.63(b)        0.60(c)        0.62(d)        0.63(e)
  Net realized and unrealized gain (loss) on
   investments....................................       0.40           0.29          (0.35)          0.93          (1.39)
                                                    ------------   ------------   ------------   ------------   ------------
    Net increase (decrease) resulting from
     operations                                          1.03           0.92           0.25           1.55          (0.76)
                                                    ------------   ------------   ------------   ------------   ------------
Distributions to shareholders:
  From net investment income......................      (0.62)         (0.54)         (0.58)         (0.60)         (0.62)
  From net realized gain on investments...........         --          (0.09)            --             --          (0.06)
  In excess of net investment income..............         --             --             --             --             --
  In excess of net investment income..............         --             --             --             --             --
  Return of capital...............................         --             --             --             --             --
                                                    ------------   ------------   ------------   ------------   ------------
    Total distributions...........................      (0.62)         (0.63)         (0.58)         (0.60)         (0.68)
                                                    ------------   ------------   ------------   ------------   ------------
Net asset value, end of period....................    $ 12.11        $ 11.70        $ 11.41        $ 11.74        $ 10.79
                                                    ------------   ------------   ------------   ------------   ------------
                                                    ------------   ------------   ------------   ------------   ------------
Total investment return (f).......................       9.06%          8.30%          2.23%         14.73%         (6.27)%
                                                    ------------   ------------   ------------   ------------   ------------
                                                    ------------   ------------   ------------   ------------   ------------
Ratios and supplemental data:
Net assets, end of period (in 000's)..............    $ 7,381        $ 7,373        $ 5,483        $ 5,992        $ 2,415
Ratio of net investment income (loss) to average
 net assets:
  With reimbursement and/or expense reductions....       5.17%          5.54%          5.24%          5.43%          5.53%
  Without reimbursement and/or expense
   reductions.....................................       4.85%          4.92%          4.49%          3.87%          1.29%
Ratio of expenses to average net assets excluding
 interest expense:
  With reimbursement and/or expense reductions....       1.00%          1.00%          1.00%          1.00%          0.38%
  Without reimbursement and/or expense
   reductions.....................................       1.32%          1.62%          1.75%          2.56%          4.63%
Ratio of interest expense to average net assets...       0.07%            --%            --%            --%            --%
Portfolio turnover................................        231%           143%            49%           186%            34%
</TABLE>
 
- ------------------
(a) Includes reimbursement of Fund operating expenses of $0.04.
 
(b) Includes reimbursement of Fund operating expenses of $0.06.
 
(c) Includes reimbursement of Fund operating expenses of $0.08.
 
(d) Includes reimbursement of Fund operating expenses of $0.14.
 
(e) Includes reimbursement of Fund operating expenses of $0.48.
 
(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.
 
                               Prospectus Page 52
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
                      GT GLOBAL VARIABLE INVESTMENT SERIES
 
<TABLE>
<CAPTION>
                                                                                   GT GLOBAL
                                                    ------------------------------------------------------------------------
                                                                               MONEY MARKET FUND
                                                    ------------------------------------------------------------------------
                                                                            YEAR ENDED DECEMBER 31,
                                                    ------------------------------------------------------------------------
                                                        1998           1997           1996           1995           1994
                                                    ------------   ------------   ------------   ------------   ------------
<S>                                                 <C>            <C>            <C>            <C>            <C>
Per Share Operating Performance:
Net asset value, beginning of period..............    $  1.00        $  1.00        $  1.00        $  1.00        $  1.00
                                                    ------------   ------------   ------------   ------------   ------------
  Net investment income (loss)....................       0.05           0.05           0.05           0.05           0.03
  Net realized and unrealized gain (loss) on
   investments....................................         --             --             --             --             --
                                                    ------------   ------------   ------------   ------------   ------------
    Net increase (decrease) resulting from
     operations                                          0.05           0.05           0.05           0.05           0.03
                                                    ------------   ------------   ------------   ------------   ------------
Distributions to shareholders:
  From net investment income......................      (0.05)         (0.05)         (0.05)         (0.05)         (0.03)
  From net realized gain on investments...........         --             --             --             --             --
                                                    ------------   ------------   ------------   ------------   ------------
    Total distributions...........................      (0.05)         (0.05)         (0.05)         (0.05)         (0.03)
                                                    ------------   ------------   ------------   ------------   ------------
Net asset value, end of period....................    $  1.00        $  1.00        $  1.00        $  1.00        $  1.00
                                                    ------------   ------------   ------------   ------------   ------------
                                                    ------------   ------------   ------------   ------------   ------------
Total investment return (a).......................       5.22%          5.37%          4.75%          5.24%          3.48%
                                                    ------------   ------------   ------------   ------------   ------------
                                                    ------------   ------------   ------------   ------------   ------------
Ratios and supplemental data:
Net assets, end of period (in 000's)..............    $31,588        $26,964        $19,794        $14,891        $19,474
Ratio of net investment income (loss) to average
 net assets:
  With reimbursement and/or expense reductions....       4.70%          4.77%          4.67%          5.15%          3.70%
  Without reimbursement and/or expense
   reductions.....................................       4.70%          4.73%          4.57%          4.85%          3.64%
Ratio of expenses to average net assets excluding
 interest expense:
  With reimbursement and/or expense reductions....       0.73%          0.75%          0.75%          0.75%          0.75%
  Without reimbursement and/or expense
   reductions.....................................       0.73%          0.79%          0.85%          1.05%          0.81%
Ratio of interest expense to average net assets...        N/A            N/A            N/A            N/A            N/A
Portfolio turnover................................        N/A            N/A            N/A            N/A            N/A
</TABLE>
 
- ------------------
 
(a) 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.
 
N/A Not applicable.
 
                               Prospectus Page 53
<PAGE>
                                 HOW TO INVEST
 
- --------------------------------------------------------------------------------
 
The funds serve as funding vehicles for the variable annuity contracts offered
by participating insurance companies through separate accounts. Shares of the
funds may be offered to separate accounts of participating insurance companies
and serve as the underlying investments for variable annuity contracts.
 
The owners of variable annuity contracts may allocate premium payments among the
general accounts of the participating insurance companies and the divisions of
the separate accounts that correspond to the funds. Individuals may not pay
variable annuity premiums directly to the funds.
 
The variable annuity contracts are described in a separate prospectus issued by
each participating insurance company for which the companies assume no
responsibility. Individual variable annuity contract holders are not the
"shareholders" of either company or any fund. Rather, each participating
insurance company and its separate accounts are the shareholders (the
"shareholders"). In accordance with current law, shareholder voting rights will
be passed on to variable annuity contract holders. As described below, for
certain matters company shareholders vote together as a group; as to other
matters, they vote separately by fund.
 
Shares of the funds are offered and redeemed at their respective net asset
values without the addition of any sales load or redemption charge next
determined following receipt by a separate account of premium payments,
surrender requests under policies, loan payments, transfer requests, and similar
or related transactions. The funds do not issue share certificates. See "Pricing
of Shares."
 
- --------------------------------------------------------------------------------
 
                               PRICING OF SHARES
 
- --------------------------------------------------------------------------------
 
Each fund prices its shares based upon its net asset value. The net asset value
of a fund is equal to its total assets (consisting mainly of portfolio
securities and cash) minus its total liabilities. Each of the funds, other than
the Money Market Fund, values its portfolio securities for which market
quotations are readily available at market price. The funds value short-term
investments (maturing within 60 days) at amortized cost, which approximates
market value. The Money Market Fund values its assets at amortized cost. When
market quotations for futures and options positions held by the funds are
readily available, those positions are valued based upon such quotations.
Securities and other assets quoted in foreign currencies are valued in U.S.
dollars based upon the prevailing exchange rates on that day. Securities and
other assets for which market quotations are not readily available are valued at
fair value determined in good faith by, or under the supervision of, the
respective fund's Board of Trustees.
 
In addition, if, between the time trading ends for a particular security and the
close of the New York Stock Exchange (NYSE), events occur that materially affect
the value of the security, the funds may value the security at its fair value as
determined in good faith by, or under the supervision of, the Board of Trustees
of the fund. Because some of the funds may invest in securities that are
primarily listed on foreign exchanges, the value of those funds' shares may
change on days when you will not be able to purchase or redeem shares.
 
Each fund determines the net asset value of its shares as of the close of
regular trading on the NYSE on each day the NYSE is open for business. The funds
price purchase, exchange, and redemption orders at the net asset value
calculated after the transfer agent receives an order in good form.
 
                               Prospectus Page 54
<PAGE>
                                     TAXES
 
- --------------------------------------------------------------------------------
 
DIVIDENDS AND OTHER DISTRIBUTIONS.
In general, dividends and distributions you receive from each fund are taxable
as ordinary income or capital gains for federal income tax purposes, whether you
reinvest them in additional shares or take them in cash. Distributions are
taxable to you at different rates depending upon the length of time the fund
holds its assets (i.e., short-term and long-term capital gains distributions).
Every year, an account statement showing the amount of dividends and
distributions you received from each fund during the prior year will be send to
you.
 
The Money Market Fund declares dividends from net investment income on each day
that it determines its net asset value. These dividends are usually paid on the
last calendar day of each month. The Money Market Fund generally makes
distributions of any net short-term capital gain annually after the end of its
fiscal year on December 31. The Money Market Fund does not expect to realize any
long-term capital gains. The Strategic Income Fund, the Global Government Income
Fund, and the U.S. Government Income Fund each declare and pay dividends from
net investment income, if any, and make distributions of net short-term capital
gains, if any, on a quarterly basis. The Growth & Income Fund declares and pays
dividends from net investment income, if any, and makes distributions of net
short-term capital gains, if any, on a quarterly basis. The New Pacific Fund,
the Europe Fund, the International Fund, the America Fund, the Infrastructure
Fund, the Natural Resources Fund, the Telecommunications Fund, the Latin America
Fund, and the Emerging Markets Fund each declare and pay dividends from net
investment income, if any, on an annual basis.
 
All funds, except the Money Market Fund, distribute to shareholders on an annual
basis substantially all of their net capital gains (excess of net long-term
capital gain over net short-term capital loss) and net gains from foreign
currency transactions, if any. Dividends and other distributions from a fund are
paid in additional shares of that fund at net asset value per share, unless
A I M Fund Services, Inc., the funds' transfer agent, is instructed otherwise.
 
Fund shares are offered only to separate accounts established to fund variable
annuity contracts. Under the Code, no tax is imposed on an insurance company
with respect to income of a qualifying separate account properly allocable to
the value of eligible variable annuity or variable life insurance contracts.
 
Each fund intends to continue to comply with the diversification requirements
imposed by section 817(h) of the Code and the regulations thereunder. These
requirements, which are in addition to the diversification requirements imposed
on the funds by the 1940 Act and Subchapter M of the Code, place certain
limitations on the amount of assets of each separate account -- and, because
section 817(h) and those regulations treat each fund's assets as assets of the
related separate accounts, of each fund -- that can be invested in securities of
a single issuer.
 
The foregoing is only a summary of some of the important federal income tax
considerations generally affecting the funds and the separate accounts. For
further information, see the statement of additional information and the
applicable variable annuity contract prospectus.
 
                               Prospectus Page 55
<PAGE>
                        OBTAINING ADDITIONAL INFORMATION
 
- --------------------------------------------------------------------------------
 
More information may be obtained free of charge upon request. The statement of
additional information (SAI), a current version of which is on file with the
United States Securities and Exchange Commission (SEC) contains more details
about each of the funds and is incorporated by reference into each prospectus
(is legally a part of each prospectus). Annual and semi-annual report to
shareholders contain additional information about each fund's investments. Each
fund's annual report also discusses the market conditions and investment
strategies that significantly affected that fund's performance during its last
fiscal year.
 
If you have questions about this fund, another fund in The AIM Family of Funds
or your account, or wish to obtain free copies of the fund's current SAI or
annual or semi-annual reports, please contact us:
 
<TABLE>
<S>             <C>
BY MAIL:        GT Global Variable Investment
                Fund
                11 Greenway Plaza, Suite 100
                Houston, TX 77046-1173
BY TELEPHONE:   (800) 347-4246
BY E-MAIL:      [email protected]
</TABLE>
 
You can also obtain copies of the funds' SAI and other information at the SEC's
Public Reference Room in Washington, D.C., on the SEC's website
(http://www.sec.gov) or by sending a letter, including a duplicating fee, to the
SEC's Public Reference Section, Washington, D.C. 20549-6009. Please call the SEC
 
at 1-800-SEC-0330 for information about the Public Reference Room.
 
GT Global Variable Investment Series
SEC 1940 Act file number: 811-6632
GT Global Variable Investment Trust
SEC 1940 Act file number: 811-7164
 
                               Prospectus Page 56
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
                      GT GLOBAL VARIABLE NEW PACIFIC FUND
                         GT GLOBAL VARIABLE EUROPE FUND
                     GT GLOBAL VARIABLE LATIN AMERICA FUND
                        GT GLOBAL VARIABLE AMERICA FUND
                     GT GLOBAL VARIABLE INTERNATIONAL FUND
                     GT GLOBAL VARIABLE INFRASTRUCTURE FUND
                   GT GLOBAL VARIABLE NATURAL RESOURCES FUND
                   GT GLOBAL VARIABLE TELECOMMUNICATIONS FUND
                    GT GLOBAL VARIABLE EMERGING MARKETS FUND
                    GT GLOBAL VARIABLE GROWTH & INCOME FUND
                GT GLOBAL VARIABLE GLOBAL GOVERNMENT INCOME FUND
                    GT GLOBAL VARIABLE STRATEGIC INCOME FUND
                 GT GLOBAL VARIABLE U.S. GOVERNMENT INCOME FUND
                          GT GLOBAL MONEY MARKET FUND
                        50 California Street, 27th Floor
                        San Francisco, California 94111
                                 (415) 392-6181
                           Toll Free: (800) 824-1580
                      Statement of Additional Information
                                  May 3, 1999
- --------------------------------------------------------------------------------
This  Statement  of Additional  Information relates  to  the GT  Global Variable
Investment Funds (individually  a "Fund," and  collectively, the "Funds").  Each
Fund  is organized as a separate series  of either GT Global Variable Investment
Series ("Investment Series") or GT Global Variable Investment Trust ("Investment
Trust")  (individually,  a  "Trust,"  and  collectively,  the  "Trusts").   This
Statement  of Additional Information which is  not a prospectus, supplements and
should be read in  conjunction with the Funds'  current Prospectus dated May  3,
1999,  a  copy of  which is  available without  charge by  writing to  the above
address or by  calling the Funds  at the toll-free  phone number printed  above.
Shares  of each Fund are offered only to separate accounts ("Separate Accounts")
that fund certain variable annuity contracts ("VA Contracts") offered by certain
life insurance companies ("Participating Insurance Companies").
A  I  M  Advisors,  Inc.  ("AIM")  serves  as  the  investment  manager  of  and
administrator  for  and/or INVESCO  Asset  Management Limited  ("IAML"), INVESCO
(NY), Inc.  ("INVESCO (NY)"),  or INVESCO  Asia Limited  ("IAL") serves  as  the
investment  sub-advisor  and/or sub-administrator  for  each of  the  Funds. The
Funds' Transfer Agent is A I M Fund Services, Inc. ("Transfer Agent").
- --------------------------------------------------------------------------------
                               TABLE OF CONTENTS
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                                                           Page No.
                                                                                                                           --------
<S>                                                                                                                        <C>
Investment Objectives and Policies.......................................................................................      2
Options, Futures and Currency Strategies.................................................................................     19
Risk Factors.............................................................................................................     29
Investment Limitations...................................................................................................     40
Execution of Portfolio Transactions......................................................................................     51
Trustees and Executive Officers..........................................................................................     55
Management...............................................................................................................     57
Valuation of Fund Shares.................................................................................................     61
Information Relating to Sales and Redemptions............................................................................     62
Taxes....................................................................................................................     64
Additional Information...................................................................................................     66
Investment Results.......................................................................................................     67
Description of Debt Ratings..............................................................................................     75
Appendix.................................................................................................................     77
Financial Statements.....................................................................................................     78
</TABLE>
 
                                     [LOGO]
 
                   Statement of Additional Information Page 1
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
                             INVESTMENT OBJECTIVES
                                  AND POLICIES
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVES
The  investment objective  of each  of the  following Funds,  as defined  in the
Prospectus, is long-term growth of capital: GT GLOBAL VARIABLE NEW PACIFIC  FUND
("New  Pacific  Fund"), GT  GLOBAL  VARIABLE INTERNATIONAL  FUND ("International
Fund"), GT GLOBAL VARIABLE  EUROPE FUND ("Europe Fund")  and GT GLOBAL  VARIABLE
AMERICA  FUND ("America  Fund"). GT GLOBAL  VARIABLE LATIN  AMERICA FUND ("Latin
America Fund") seeks capital appreciation.  The investment objective of each  of
GT GLOBAL VARIABLE EMERGING MARKETS FUND ("Emerging Markets Fund") and GT GLOBAL
VARIABLE TELECOMMUNICATIONS FUND ("Telecommunications Fund") is long-term growth
of   capital.  The   investment  objective  of   each  of   GT  GLOBAL  VARIABLE
INFRASTRUCTURE FUND  ("Infrastructure  Fund")  and GT  GLOBAL  VARIABLE  NATURAL
RESOURCES  FUND  ("Natural Resources  Fund")  is long-term  capital  growth. The
investment objectives of  GT GLOBAL  VARIABLE GROWTH  & INCOME  FUND ("Growth  &
Income  Fund") are long-term capital  appreciation together with current income.
GT GLOBAL VARIABLE STRATEGIC  INCOME FUND ("Strategic  Income Fund") seeks  high
current  income as its primary investment objective. The Strategic Income Fund's
secondary investment  objective  is  capital appreciation.  GT  GLOBAL  VARIABLE
GLOBAL  GOVERNMENT  INCOME FUND  ("Global  Government Income  Fund")  seeks high
current income as its primary investment objective. The Global Government Income
Fund's secondary investment objectives  are capital appreciation and  protection
of  principal through active  management of the  maturity structure and currency
exposure. The investment objective of GT GLOBAL VARIABLE U.S. GOVERNMENT  INCOME
FUND  ("U.S.  Government  Income  Fund")  is a  high  level  of  current income,
consistent with  the preservation  of capital.  The investment  objective of  GT
GLOBAL  MONEY  MARKET  FUND  ("Money Market  Fund")  is  maximum  current income
consistent with liquidity and conservation of capital.
SELECTION OF INVESTMENTS
    GENERAL. Each Fund seeks  to achieve its  investment objective(s) through  a
distinct set of investment policies. In determining the appropriate distribution
of investments among various countries and geographic regions for the Funds, AIM
and/or the sub-advisors ordinarily consider the following factors: prospects for
relative  economic growth between the different countries in which each Fund may
invest; expected levels of  inflation; government policies influencing  business
conditions;  the  outlook  for  currency relationships;  and  the  range  of the
individual investment opportunities available to international investors.
In analyzing companies  for possible  investment by  each Fund,  AIM and/or  the
sub-advisors  ordinarily look for one or  more of the following characteristics:
above-average earnings  growth  per  share; high  return  on  invested  capital;
healthy  balance  sheet; sound  financial  and accounting  policies  and overall
financial  strength;  strong  competitive  advantages;  effective  research  and
product  development  and  marketing;  efficient  service;  pricing flexibility;
strength of management; and general operating characteristics which will  enable
the  companies  to compete  successfully  in their  respective  marketplaces. In
certain countries, governmental restrictions and other limitations on investment
may affect the maximum percentage  of equity ownership in  any one company by  a
Fund  or the Funds in the aggregate. In addition, in some instances only special
classes of securities  may be  purchased by  foreigners and  the market  prices,
liquidity and rights with respect to those securities may vary from shares owned
by nationals.
In  certain  countries, governmental  and other  restrictions on  investment may
affect a  Fund's ability  to invest  in  such countries.  In addition,  in  some
instances  only special classes of securities may be purchased by foreigners and
the market price, liquidity and rights with respect to those securities may vary
from shares owned by nationals. At this  time, AIM and/ or the sub-advisors  are
not  aware of  the existence of  any investment or  exchange control regulations
which might substantially impair the operations of the Funds as described in the
Prospectus and this Statement of Additional Information. Restrictions may in the
future, however, make it undesirable to invest in certain countries. None of the
Funds has  a present  intention  of making  any  significant investment  in  any
country  or  stock market  in  which AIM  and/or  the sub-advisors  consider the
political or economic  situation to threaten  a Fund with  substantial or  total
loss of its investment in such country or market.
    NEW  PACIFIC FUND, EUROPE FUND, AND INTERNATIONAL FUND. For purposes of this
Statement of  Additional  Information,  an issuer  typically  is  considered  as
domiciled  in a particular country if it is: (a) organized under the laws of, or
has its principal office in, a  particular country; or (b) normally derives  50%
or   more   of   its   total   revenues   from   business   in   that   country,
 
                   Statement of Additional Information Page 2
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
provided that, in the view  of AIM and/or the  Fund's sub-advisor, the value  of
such  issuer's  securities  tends to  reflect  such country's  development  to a
greater extent  than developments  elsewhere. However,  these are  not  absolute
requirements,  and certain  companies incorporated  in a  particular country and
considered by AIM and/or  the Funds' sub-advisor to  be located in that  country
may  have  substantial foreign  operations or  subsidiaries and/or  export sales
exceeding in size the assets  or sales in that country.  From time to time,  the
Board of Trustees of a Fund may add or delete countries from that Fund's primary
investment area.
Each Fund may invest up to 35% of its assets in the equity securities of issuers
domiciled  outside of its primary investment  area, including: (i) securities of
issuers not domiciled  in the primary  investment area but  which are linked  by
tradition,  economic markets, cultural similarities or geography to such primary
investment area; and (ii) securities of issuers domiciled elsewhere in the world
that have operations  in the primary  investment area or  that stand to  benefit
from political and economic events in the primary investment area.
Among  the factors considered by AIM  and/or the Funds' sub-advisor in selecting
markets in which  to invest  are that several  markets included  in the  primary
investment  areas of New  Pacific Fund, Europe Fund,  and International Fund are
so-called  developing  countries  and  their  economies  and  markets  are  less
developed  and more  prone to uncertainty,  instability and risk  than the other
markets in which such Funds invest.
Under normal circumstances, the assets of International Fund are invested in the
equity securities of issuers domiciled in at least three different countries.
    AMERICA FUND.  The  Fund's  process  for  selecting  mid-cap  growth  stocks
consists  of four components: asset  allocation, industry diversification, stock
selection and quality control. The  quality control process ensures  consistency
with  the  industry  and  asset  allocation  guidelines  as  well  as  the stock
guideline. There is no assurance that  this process will produce better or  more
consistent results than other investment processes.
    EMERGING MARKETS FUND. Emerging Markets Fund does not consider the following
countries  to be emerging markets: Australia, Austria, Belgium, Canada, Denmark,
England, Finland, France, Germany, Ireland,  Italy, Japan, the Netherlands,  New
Zealand,   Norway,  Spain,  Sweden,  Switzerland,  and  the  United  States.  In
determining what  countries constitute  emerging  markets the  Sub-advisor  will
consider,  among other  things, data  analysis, and  classification of countries
published or  disseminated  by the  International  Bank for  Reconstruction  and
Development  (commonly known  as the World  Bank) and  the International Finance
Corporation.
    EMERGING MARKETS FUND AND STRATEGIC  INCOME FUND. Emerging Markets Fund  and
Strategic Income Fund will consider investment in following emerging markets:
 
<TABLE>
<S>                                 <C>                                 <C>
Algeria                             Hungary                             Peru
Argentina                           India                               Philippines
Bolivia                             Indonesia                           Poland
Botswana                            Israel                              Portugal
Brazil                              Ivory Coast                         Republic of Slovakia
Bulgaria                            Jamaica                             Russia
Chile                               Jordan                              Singapore
China                               Kazakhstan                          Slovenia
Colombia                            Kenya                               South Africa
Costa Rica                          Lebanon                             South Korea
Cyprus                              Malaysia                            Sri Lanka
Czech Republic                      Mauritius                           Swaziland
Dominican Republic                  Mexico                              Taiwan
Ecuador                             Morocco                             Thailand
Egypt                               Nicaragua                           Turkey
El Salvador                         Nigeria                             Ukraine
Finland                             Oman                                Uruguay
Ghana                               Pakistan                            Venezuela
Greece                              Panama                              Zambia
Hong Kong                           Paraguay                            Zimbabwe
</TABLE>
 
                   Statement of Additional Information Page 3
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
Although  Emerging Markets Fund and Strategic  Income Fund each considers all of
the above-listed countries eligible for investment, they will not be invested in
all such markets  at all  times. Moreover, investing  in some  of those  markets
currently  may not be desirable or feasible, due to the lack of adequate custody
arrangements for the Funds' assets,  overly burdensome repatriation and  similar
restrictions,  the lack of organized and liquid securities markets, unacceptable
political risks, or for other reasons.
Emerging Markets Fund may  invest in common  stock, preferred stock,  securities
convertible  into common stock, rights and  warrants to acquire such securities,
and substantially similar forms of equity with comparable risk  characteristics.
A  company in  an "emerging market"  is an  entity: (i) for  which the principal
trading market is an emerging market, as defined above; (ii) that (alone or on a
consolidated basis) derives 50% or more  of its total revenue from either  goods
produced,  sales  made,  or services  performed  in emerging  markets;  or (iii)
organized under the laws of, or with a principal office in, an emerging  market.
The  Fund may invest up to 35% of  its total assets in securities of issuers not
included in the  list of emerging  markets above, if  investing therein  becomes
feasible  and desirable subsequent to date of this prospectus. Growth of capital
in debt securities in which the Fund invests may arise as a result of  favorable
changes  in relative foreign exchange rates,  in relative interest levels and/or
in the creditworthiness of issuers. The  receipt of income from debt  securities
owned by the Fund is incidental to its objective of long-term growth of capital.
Strategic  Income Fund selects debt securities from those issued by governments,
their agencies and instrumentalities; central banks; commercial banks; and other
corporate entities. Debt securities in which the Fund may invest include  bonds,
notes,  debentures, and other similar instruments (including mortgage-backed and
asset-backed securities of  foreign issuers  as well as  domestic issuers).  The
Fund  considers "emerging markets" to consist of all countries determined by AIM
and/or the  Fund's  sub-advisor to  have  developing or  emerging  economies  or
markets. These countries generally include every country in the world except the
United  States,  Canada, Japan,  Australia, New  Zealand  and most  countries in
Western Europe.
    INFRASTRUCTURE FUND. The Fund  may invest, in addition  to common stock,  in
the preferred stock and warrants to acquire common and preferred stock issued by
infrastructure companies.
In  addition to the types of  infrastructure companies listed in the Prospectus,
the Fund may also  invest in companies engaged  in the designing, developing  or
providing of: (i) electricity production; (ii) steel, concrete, or similar types
of  products; (iii)  mobile communications  and cellular  radio/paging; emerging
technologies combining telephone, television  and/or computer systems; and  (iv)
other products and services which, in the judgment of AIM and/or the Fund's sub-
advisor,  constitute  services significant  to  the development  of  a country's
infrastructure.
AIM and the Fund's  sub-advisor believe that a  country's infrastructure is  one
key  to the  long-term success  of that  country's economy.  AIM and  the Fund's
sub-advisor  also  believe  that  adequate  energy,  transportation,  water  and
communications  systems are essential for long-term economic growth. AIM and the
Fund's sub-advisor believe that many developing nations, especially in Asia  and
Latin America, plan to make significant expenditures to the development of their
infrastructure  in the coming  years, which is  expected to facilitate increased
levels of and services and manufactured goods.
In the developed countries of North America, Europe, Japan and the Pacific  Rim,
AIM  and/or the  Fund's sub-advisor expect  that the replacement  and upgrade of
transportation  and  communications  systems  should  stimulate  growth  in  the
infrastructure  industries of those  countries. In addition, in  the view of AIM
and the Fund's sub-advisor, deregulation of telecommunications and electric  and
gas  utilities  in  many countries  is  promoting significant  changes  in these
industries.
AIM and the Fund's sub-advisor believe that strong economic growth in developing
countries and  infrastructure replacement,  upgrade,  and deregulation  in  more
developed   countries   provide   an   environment   for   favorable  investment
opportunities in infrastructure companies worldwide. In addition, the  long-term
growth rates of certain foreign countries' economies may be substantially higher
than  the  long-term growth  rate of  the  U.S. economy.  An integral  aspect of
certain foreign countries' economic growth may be the development or improvement
of their infrastructure.
    NATURAL RESOURCES  FUND. With  respect to  Natural Resources  Fund, AIM  has
identified  four areas that it expects will create investment opportunities: (i)
improving supply/demand  fundamentals,  which  may result  in  higher  commodity
prices;  (ii) privatization  of state-owned  natural resource  businesses; (iii)
management which  can improve  production efficiencies  without  correspondingly
increasing   commodity  prices;   and  (iv)  service   companies  with  emerging
technologies that  can  enhance  productivity or  reduce  production  costs.  Of
course,  there is no  certainty that these factors  will produce the anticipated
results.
The Fund may invest,  in addition to  common stock, in  the preferred stock  and
warrants  to  acquire  common and  preferred  stock issued  by  natural resource
companies.
 
                   Statement of Additional Information Page 4
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
In  addition  to  the  types  of  natural  resources  companies  listed  in  the
Prospectus,  the  Fund  may also  invest  in  companies which  own,  explore, or
develop: (i) energy sources such as  gas and coal; (ii) ferrous and  non-ferrous
metals (such as iron, aluminum, copper, nickel, zinc and lead), strategic metals
(such  as uranium and  titanium) and precious  metals (such as  gold, silver and
platinum); (iii)  forest products  (such  as timber,  coated and  uncoated  tree
sheet,  pulp and newsprint); refined products (such as chemicals and steel); and
(iv) other products and services which, in the judgment of AIM and/or the Fund's
sub-advisor, are  significant  to  the  ownership  and  development  of  natural
resources and other basic commodities.
AIM  and/or the  Fund's sub-advisor will  allocate the  Fund's investments among
those  natural  resource  companies  depending  on  their  assessment  of  their
long-term  growth  potential.  In assessing  these  companies'  long-term growth
potential, AIM and/or the sub-advisor will evaluate, among other factors,  their
capabilities  for  expanded  exploration  and  production,  superior exploration
programs and production techniques and facilities, current inventories, expected
production and demand levels, and the potential to accumulate new resources.
AIM and  the Fund's  sub-advisor  believe that  the liberalization  of  formerly
socialist  economies will  bring about dramatic  changes in both  the supply and
demand for natural resources. In addition, rapid industrialization in developing
countries of Asia  and Latin America  is generating new  demands for  industrial
materials  that  are affecting  world commodities  markets.  AIM and  the Fund's
sub-advisor believe there changes are likely to create investment  opportunities
that  benefit  from new  sources of  supply and/or  from changes  in commodities
prices.
AIM and the Fund's sub-advisor also believe that investments in natural resource
industries offer an opportunity  to protect wealth  against the capital  eroding
effects  of  inflation. During  periods  of accelerating  inflation  or currency
uncertainty, worldwide  investment demand  for natural  resources,  particularly
precious  metals,  tends  to increase,  and  during periods  of  disinflation or
currency stability, it tends to decrease. AIM and the Fund's sub-advisor believe
that rising commodity prices and increasing worldwide industrial production  may
favorably  affect share prices of natural resource companies, and investments in
such companies  can  offer excellent  opportunities  to offset  the  effects  of
inflation.
    TELECOMMUNICATIONS  FUND. With  respect to Telecommunications  Fund, AIM has
identified four areas that it  expects will create investment opportunities  and
lead to growth in the sector: (i) the deregulation of companies in the industry,
which   will  allow  competition  to  promote  greater  efficiencies;  (ii)  the
privatization  of   state-owned   telecommunications   businesses;   (iii)   the
development  of  infrastructure  in underdeveloped  countries  and  upgrading of
services in other countries; and  (iv) emerging technologies, that will  enhance
productivity  and reduce  costs in  the telecommunications  industry. Of course,
there is no certainty that these factors will produce the anticipated results.
The Fund may invest,  in addition to  common stock, in  the preferred stock  and
warrants  to  acquire common  and preferred  stock issued  by telecommunications
companies.
Telecommunications companies cover a variety of sectors, ranging from  companies
concentrating on established technologies to those primarily engaged in emerging
or  developing technologies.  The characteristics  of companies  focusing on the
same technology will vary among countries depending upon the extent to which the
technology is  established in  the  particular country.  AIM and/or  the  Fund's
sub-advisor  will allocate the Fund's  investments among these sectors depending
upon their  assessment  of  the  relative long-term  growth  potentials  of  the
sectors.
In  addition  to  the  types  of  telecommunications  companies  listed  in  the
Prospectus, the  Fund may  also invest  in companies  designing, developing,  or
providing the following products and services: cellular radio paging; electronic
mail;  local and wide  area networking and  linkage of word  and data processing
systems;  publishing  and  information  systems;  videotext  and  teletext;  and
emerging technologies combining telephone, television and/or computer systems.
AIM  and/or the Fund's sub-advisor expect that, from time to time, a significant
portion of  the Fund's  assets may  be invested  in the  securities of  domestic
issuers.  Telecommunications, however,  is a  global industry  with significant,
growing markets  outside of  the  United States.  A  sizable proportion  of  the
companies  that  comprise  the  telecommunications  industry  are  headquartered
outside of  the  United  States.  For  these  reasons,  AIM  and/or  the  Fund's
sub-advisor  believe  that  a portfolio  comprised  only of  securities  of U.S.
issuers  does   not  provide   the  greatest   potential  for   return  from   a
telecommunications  investment.  AIM  and/or the  Fund's  sub-advisor  use their
financial expertise in  markets located  throughout the world  in attempting  to
identify  those countries  and telecommunications  companies then  providing the
greatest potential  for long-term  capital appreciation.  In this  fashion,  AIM
and/or  the  Fund's sub-advisor  and  the Fund  seek  to enable  shareholders to
capitalize on the  substantial investment  opportunities and  the potential  for
long-term growth of capital presented by the global telecommunications industry.
AIM  and/or  the  Fund's  sub-advisor  will  allocate  the  Fund's  assets among
securities of countries and in currency denominations and industry sectors where
opportunities for meeting the Fund's investment objective are expected to be the
most attractive.
 
                   Statement of Additional Information Page 5
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
AIM and/or  the Fund's  sub-advisor  believe that  there are  opportunities  for
continued  growth  in  demand for  components,  products, media  and  systems to
collect, store, retrieve, transmit,  process, distribute, record, reproduce  and
use information. The pervasive societal impact of communications and information
technologies  has been  accelerated by the  lower costs  and higher efficiencies
that result  from the  blending of  computers with  telecommunications  systems.
Accordingly, companies engaged in the production of methods for using electronic
and, potentially, video technology to communicate information are expected to be
important  in the Fund's portfolio. Older  technologies, such as photography and
print, also may be represented, however.
    GROWTH & INCOME  FUND. With respect  to Growth  & Income Fund,  AIM and  the
Fund's  sub-advisor  attempt to  identify those  countries and  industries where
economic and political factors are likely to produce above-average growth  rates
and to further identify companies in such countries and industries that are best
positioned  and managed  to benefit from  these factors.  In evaluating possible
equity investments,  AIM and  the  Fund's sub-advisor  attempt to  identify  and
acquire  only securities  they deem  to represent  high or  improving investment
quality. Securities representing high investment quality generally will  include
those  of well-known, established and successful issuers that AIM and the Fund's
sub-advisor believe will  continue to  be successful in  the future.  Securities
representing  improving investment quality may include those of an issuer which,
for instance, has improved  its sales or  earnings or of  an issuer the  balance
sheet  and  financial  condition of  which  are  improving. AIM  and  the Fund's
sub-advisor seek  to avoid  investing in  equity securities  that appear  overly
speculative  or  risky,  even  if they  have  otherwise  attractive  features or
investment potential.
In evaluating debt securities considered for investment by Growth & Income Fund,
AIM  and  the   Fund's  sub-advisor   analyze  their   yield,  maturity,   issue
classification  and quality characteristics, coupled with expectations regarding
the local  and world  economies, movements  in  the general  level and  term  of
interest  rates, currency values, political  developments, and variations of the
supply of funds available  for investment in the  world bond market relative  to
the  demands placed  upon it.  AIM and the  Fund's sub-advisor  may increase the
average maturity  of  the  portion  of the  Fund's  holdings  invested  in  debt
obligations  when they expect  interest rates to decline,  and may decrease such
maturity when they expect  interest rates to rise.  There are no limitations  on
the  maximum or minimum maturities of the debt securities considered by Growth &
Income Fund  for investment  or on  the average  weighted maturity  of the  debt
portion  of the Fund's holdings. Should the rating of a debt security be revised
while such security is owned  by Growth & Income Fund,  AIM and the Fund's  sub-
advisor  will evaluate what action, if any,  is appropriate with respect to such
security. See "Description of Debt Ratings."
The Fund may invest  in common stock, preferred  stock, and warrants to  acquire
such  securities, and other equity securities.  The debt obligations held by the
Fund may include debt obligations  convertible into equity securities or  having
attached  warrants or rights  to purchase equity  securities. The Fund currently
contemplates that it  will invest principally  in securities of  issuers in  the
United  States,  Canada,  Japan, the  Western  Europe nations,  New  Zealand and
Australia. The Fund may purchase securities of an issuer located in one  country
but  denominated in the currency of another country (or a multinational currency
unit).
    LATIN AMERICA  FUND.  Several Latin  American  countries have  adopted  debt
conversion  programs, pursuant  to which  investors may  use external  debt of a
country, directly or  indirectly, to  make investments in  local companies.  The
terms  of  the various  programs  vary from  country  to country,  although each
program includes significant  restrictions on  the application  of the  proceeds
received  in the conversion and  on the remittance of  profits on the investment
and of the  invested capital. Latin  America Fund intends  to acquire  Sovereign
Debt  to  hold and  trade in  appropriate circumstances,  as well  as to  use to
participate in Latin American  debt conversion programs.  See "Risk Factors"  in
the  Funds' Prospectus and "Risk Factors"  below. AIM and the Fund's sub-advisor
will evaluate opportunities to enter  into debt conversion transactions as  they
arise but do not currently intend to invest more than 5% of Latin America Fund's
assets in such programs.
The  Fund  may invest  in common  stock, preferred  stock, rights,  warrants and
securities convertible into common stock, and other substantially similar  forms
of  equity securities  with comparable risk  characteristics, as  well as bonds,
notes, debentures, or other forms of  indebtedness that may be developed in  the
future.
Unless  otherwise  indicated,  the Fund  defines  Latin America  to  include the
following countries: Argentina, the Bahamas, Barbados, Belize, Bolivia,  Brazil,
Chile,  Colombia, Costa Rica,  Dominican Republic, Ecuador,  El Salvador, French
Guiana, Guatemala,  Guyana, Haiti,  Honduras, Jamaica,  Mexico, the  Netherlands
Antilles,  Nicaragua,  Panama, Paraguay,  Peru,  Suriname, Trinidad  and Tobago,
Uruguay and Venezuela.
Capital appreciation in  debt securities may  arise as a  result of a  favorable
change  in relative  foreign exchange  rates, in  relative interest  rate levels
and/or in the creditworthiness of issuers. The receipt of income from such  debt
securities  owned by the Fund  is incidental to the  Fund's objective of capital
appreciation.
 
                   Statement of Additional Information Page 6
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
For purposes  of  defining  Latin  American issuers,  the  Fund's  purchases  of
securities  issued  outside of  Latin America  to  finance their  Latin American
operations will be limited to securities the performance of which is  materially
related  to such company's Latin  American activities. In evaluating investments
in securities of U.S. issuers, AIM and/or the Fund's sub-advisor will  consider,
among  other factors,  the issuer's Latin  American business  activities and the
impact that developments in  Latin America may have  on the issuer's  operations
and financial condition.
Certain  sectors of the economies of certain Latin American countries are closed
to equity investments by foreigners. Further,  due to the absence of  securities
markets  and  publicly  owned corporations  and  due to  restrictions  on direct
investment by foreign entities in certain Latin American countries, the Fund may
be able to invest in such  countries solely or primarily through  governmentally
approved  investment  vehicles or  companies. In  addition,  the portion  of the
Fund's assets directly invested in Chile  may be less than the portion  invested
in other Latin American countries because, at present, capital directly invested
in  Chile normally cannot be repatriated for at least one year. As a result, the
Fund currently intends  to limit  most of  its Chilean  investments to  indirect
investments  through  American  Depositary  Receipts  ("ADRs")  and  established
Chilean  investment  companies,  the  shares   of  which  are  not  subject   to
repatriation restrictions.
    GLOBAL  GOVERNMENT INCOME FUND. The Fund currently contemplates that it will
invest principally  in obligations  of  the United  States, Canada,  Japan,  the
Western European nations, New Zealand and Australia, as well as in multinational
currency units.
The  U.S.  government securities  in which  the Fund  may invest  include direct
obligations of the U.S. Treasury (such  as Treasury bills, notes and bonds)  and
obligations   issued   or   guaranteed   by   U.S.   Government   agencies   and
instrumentalities, including securities that are supported by the full faith and
credit of the United  States (such as  Government National Mortgage  Association
("GNMA") certificates), securities that are supported by the right of the issuer
to  borrow from the U.S.  Treasury (such as securities  of the Federal Home Loan
Banks ("FHLBs"), the Federal Home Loan Mortgage Corporation ("Freddie Mac"), the
Student Loan Marketing Association ("SLMA"), and the Tennessee Valley  Authority
("TVA")).
AIM and/or the Fund's sub-advisor select securities of particular issuers on the
basis  of their views  as to the  best values in  the marketplace. This judgment
involves expectations  regarding local  and world  economies, movements  in  the
general   level  and  term   of  interest  rates,   currency  values,  political
developments, and variations of supply and demand.
    U.S. GOVERNMENT  INCOME  FUND.  The  Fund  may  invest  in  U.S.  government
securities  including: direct obligations of the  U.S Treasury (such as Treasury
bills,  notes,  and  bonds);  and  obligations  issued  or  guaranteed  by  U.S.
government   agencies  and  instrumentalities,  including  securities  that  are
supported by  the full  faith and  credit of  the United  States (such  as  GNMA
certificates),  securities  that are  supported by  the right  of the  issuer to
borrow from the U.S. Treasury (such  as securities of the FHLBs) and  securities
supported  primarily or  solely by the  creditworthiness of the  issuer (such as
securities of Fannie Mae, Freddie Mac, SLMA and TVA).
U.S. government securities in which the Fund may invest include mortgage  backed
securities, which are issued or guaranteed as to principal and interest by GNMA,
Fannie   Mae,  Freddie  Mac  or  other  government-sponsored  enterprises.  Such
securities include  fixed-rate  mortgage  obligations,  collateralized  mortgage
obligations and adjustable rate mortgages.
Treasury  bills, notes and bonds and other  obligations backed by the full faith
and credit pledge of the U.S. government historically have involved little  risk
of loss of principal if held to maturity. While not backed by the full faith and
credit  pledge of the U.S. government, securities issued or guaranteed by Fannie
Mae or Freddie Mac are high quality investments having minimal credit risks. All
securities in which  the Fund  invests, however,  are subject  to variations  in
market value due to interest rate fluctuations.
A  number of U.S. government agencies or government-sponsored organizations also
sell their own debt securities. These agencies typically are created by Congress
to fulfill  a specific  function, such  as providing  credit to  home buyers  or
farmers;  for example, FHLBs, Federal Farm Credit Banks, and SLMA. Some of these
obligations are backed by the full faith  and credit of the U.S. government,  as
noted  above, and some are supported primarily or solely by the creditworthiness
of  the  issuing  agency,  such  as  those  issued  by  TVA.  These   securities
traditionally  offer somewhat higher yields than U.S. Treasury securities having
similar maturities but may have greater principal risk.
The Fund  may invest  in  bonds issued  by  the Resolution  Funding  Corporation
("Refcorp")  whose interest payments are guaranteed by U.S. Treasury zero coupon
bonds. The amount and  maturity date of  the Refcorp bonds are  the same as  the
amount  and maturity date  of the corresponding U.S.  Treasury zero coupon bonds
held in a separate custody account at
 
                   Statement of Additional Information Page 7
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
the Federal Reserve Bank of New York.  Upon maturity, the Refcorp bonds will  be
repaid  from the proceeds of  those U.S. Treasury zero  coupon bonds maturing on
the same date.
    MONEY MARKET FUND. Commercial  paper may include  corporate bonds and  notes
(corporate  obligations that  mature, or  that may be  redeemed, in  one year or
less). These corporate obligations include variable rate master notes, which are
redeemable upon notice and permit  investment in fluctuating amounts at  varying
rates  of  interest  pursuant to  direct  arrangements  with the  issuer  of the
instrument. In  addition  to the  foregoing  securities, the  Fund  may  acquire
participation  interests  in  securities in  which  it is  permitted  to invest.
Participation interests are pro rata interests in securities held by others.
MORTGAGE-BACKED AND ASSET-BACKED SECURITIES
Strategic Income Fund, Global Government Income Fund and U.S. Government  Income
Fund  may invest  in mortgage-backed  securities, including  fixed-rate mortgage
obligations, adjustable rate  mortgage obligations  ("ARMs") and  collateralized
mortgage  obligations.  Each  of these  Funds  may also  invest  in asset-backed
securities.
Mortgage-backed securities may  be composed of  one or more  classes and may  be
structured either as pass-through securities or collateralized debt obligations.
Multiple-class  pass  through  securities  and  mortgage-backed  securities  are
referred to in this Statement of Additional Information as "CMOs." Some CMOs are
directly supported by other CMOs, which in turn are supported by mortgage pools.
Investors typically receive payments  out of the interest  and principal on  the
underlying  mortgages. The portions of these payments that investors receive, as
well as the priority of their rights to receive payments, are determined by  the
specific terms of the CMO class.
When   interest  rates  go  down   and  homeowners  refinance  their  mortgages,
mortgage-backed bonds may be paid off more quickly than investors expect.
When interest rates rise, mortgage-backed bonds may be paid off more slowly than
originally expected. Changes  in the rate  or "speed" of  these prepayments  can
cause  the value of mortgage-backed securities  to fluctuate to a greater degree
and more rapidly than ordinary fixed income securities.
Other asset-backed securities are similar to mortgage-backed securities,  except
that  the underlying assets are different. These underlying assets may be nearly
any type of  financial asset or  receivable, such as  motor vehicle  installment
sales contracts, home equity loans, leases of various types of real and personal
property  and receivables  from credit  cards. Like  mortgage-backed securities,
asset-backed securities can change in value in response to interest rate changes
to a greater degree and more rapidly than ordinary fixed income securities.
Mortgage-backed securities represent  direct or indirect  participations in,  or
are  secured by and  payable from, mortgage  loans secured by  real property and
include single-  and  multi-class  pass-through  securities  and  collateralized
mortgage  obligations. The  U.S. government mortgage-backed  securities in which
the Funds may invest include mortgage-backed securities issued or guaranteed  as
to  the payment of principal and interest (but  not as to market value) by GNMA,
Fannie Mae,  or Freddie  Mac.  Other mortgage-backed  securities are  issued  by
private  issuers,  generally originators  of  and investors  in  mortgage loans,
including savings associations, mortgage  bankers, commercial banks,  investment
bankers  and special purpose entities (collectively "Private Mortgage Lenders").
Payments of principal and  interest (but not the  market value) of such  private
mortgage-backed  securities may be supported by pools of mortgage loans or other
mortgage-backed securities that are guaranteed,  directly or indirectly, by  the
U.S.  government or  one of  its agencies or  instrumentalities, or  they may be
issued without any government  guarantee of the  underlying mortgage assets  but
with   some   form  of   non-government   credit  enhancement.   New   types  of
mortgage-backed securities are  developed and  marketed from time  to time  and,
consistent  with its investment  limitations, a Fund expects  to invest in those
new types of mortgage-backed securities  that AIM and/or the Fund's  sub-advisor
believes  may assist that Fund in achieving its investment objective. Similarly,
a Fund  may invest  in  mortgage-backed securities  issued  by new  or  existing
governmental or private issuers other than those identified herein.
Asset-backed    securities   have   structural    characteristics   similar   to
mortgage-backed securities. However,  the underlying assets  are not first  lien
mortgage  loans or interests  therein, but include assets  such as motor vehicle
installment sale contracts, other installment sale contracts, home equity loans,
leases of  various types  of real  and personal  property and  receivables  from
revolving  credit (credit card) agreements.  Such assets are securitized through
the use of trusts or special purpose corporations. Payments or distributions  of
principal  and  interest may  be guaranteed  up to  a certain  amount and  for a
certain time period by a letter of  credit or pool insurance policy issued by  a
financial institution unaffiliated with the issuer, or other credit enhancements
may be present.
 
                   Statement of Additional Information Page 8
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
The  yield characteristics of mortgage-backed and asset-backed securities differ
from those of traditional debt securities. Among the major differences are  that
interest  and principal payments are made  more frequently, usually monthly, and
that principal may be prepaid at any time because the underlying mortgagee loans
or other obligations generally may be prepaid at any time. Prepayments on a pool
of mortgage loans are  influenced by a variety  of economic, geographic,  social
and   other  factors,  including  changes  in  mortgagors'  housing  needs,  job
transfers, unemployment, mortgagors' net equity in the mortgaged properties  and
servicing  decisions.  Generally,  however, prepayments  on  fixed-rate mortgage
loans will  increase during  a period  of falling  interest rates  and  decrease
during  a period of rising interest  rates. Similar factors apply to prepayments
on  asset-backed  securities,  but   the  receivables  underlying   asset-backed
securities  generally are  of a  shorter maturity  and thus  are less  likely to
experience substantial prepayments. Such securities, however, often provide that
for a specified  time period the  issuers will replace  receivables in the  pool
that  are repaid with comparable obligations. If  the issuer is unable to do so,
repayment of principal on the asset-backed securities may commence at an earlier
date. Mortgage-backed and  asset-backed securities  may decrease in  value as  a
result  of  increases  in  interest  rates  and  may  benefit  less  than  other
fixed-income securities from  declining interest  rates because of  the risk  of
prepayment.
The  rate of interest  on mortgage-backed securities is  lower than the interest
rates paid on the mortgages  included in the underlying  pool due to the  annual
fees  paid to  the servicer  of the  mortgage pool  for passing  through monthly
payments to  certificateholders and  to  any guarantor,  and  due to  any  yield
retained  by the  issuer. Actual yield  to the  holder may vary  from the coupon
rate, even if  adjustable, if  the mortgage-backed securities  are purchased  or
traded  in the secondary market at a  premium or discount. In addition, there is
normally some delay between the time the issuer receives mortgage payments  from
the  servicer and the time the issuer  makes the payments on the mortgage-backed
securities, and this  delay reduces the  effective yield to  the holder of  such
securities.
Yields on pass-through securities are typically quoted by investment dealers and
vendors  based on the maturity of  the underlying instruments and the associated
average life assumption. The average life of a pass-through pool varies with the
maturities of the underlying mortgage loans.  A pool's term may be shortened  by
unscheduled  or early payments of principal on the underlying mortgages. Because
prepayment rates of individual pools vary widely, it is not possible to  predict
accurately the average life of a particular pool. In the past, a common industry
practice was to assume that prepayments on pools of fixed rate 30-year mortgages
would result in a 12-year average life for the pool. At present, mortgage pools,
particularly   those   with   loans   with   other   maturities   or   different
characteristics, are priced on an assumption of average life determined for each
pool. In periods of  declining interest rates, the  rate of prepayment tends  to
increase,   thereby  shortening   the  actual   average  life   of  a   pool  of
mortgage-related securities. Conversely,  in periods of  rising interest  rates,
the rate of prepayment tends to decrease, thereby lengthening the actual average
life  of the pool. However,  these effects may not be  present, or may differ in
degree, if the  mortgage loans in  the pools have  adjustable interest rates  or
other  special payment  terms, such  as a  prepayment charge.  Actual prepayment
experience may cause the yield of mortgage-backed securities to differ from  the
assumed  average  life yield.  Reinvestment of  prepayments  may occur  at lower
interest rates than the original investment, thus adversely affecting the  yield
of a Fund.
    GNMA   CERTIFICATES.   GNMA   guarantees   certain   mortgage   pass-through
certificates ("GNMA  certificates"),  issued  by Private  Mortgage  Lenders  and
representing  ownership interests  in individual  pools of  residential mortgage
loans. These securities are designed to provide monthly payments of interest and
principal to the investor. Timely payment of interest and principal is backed by
the full  faith and  credit of  the U.S.  government. Each  mortgagor's  monthly
payments  to his  lending institution  on his  residential mortgage  are "passed
through" to  certificateholders such  as the  Funds. Mortgage  pools consist  of
whole  mortgage loans or participations in  loans. The terms and characteristics
of the mortgage  instruments are generally  uniform within a  pool but may  vary
among  pools. Lending  institutions that originate  mortgages for  the pools are
subject to certain standards, including  credit and other underwriting  criteria
for individual mortgages included in the pools.
    FANNIE  MAE CERTIFICATES. Fannie Mae facilitates a national secondary market
in residential mortgagee loans insured or guaranteed by U.S. government agencies
and in  privately insured  or uninsured  residential mortgage  loans  (sometimes
referred  to as "conventional  mortgage loans" or  "conventional loans") through
its mortgage purchase  and mortgage-backed securities  sales activities.  Fannie
Mae   issues   guaranteed  mortgage   pass-through  certificates   ("Fannie  Mae
certificates"), which represent pro  rata shares of  all interest and  principal
payments  made and  owed on the  underlying pools. Fannie  Mae guarantees timely
payment of interest  and principal on  Fannie Mae certificates.  The Fannie  Mae
guarantee is not backed by the full faith and credit of the U.S. government.
    FREDDIE  MAC CERTIFICATES. Freddie  Mac also facilitates  a secondary market
for conventional residential and U.S. government-insured mortgage loans  through
its  mortgage purchase and mortgage-backed  securities sales activities. Freddie
Mac
 
                   Statement of Additional Information Page 9
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
issues two  types of  mortgage pass-through  securities: mortgage  participation
certificates  ("PCs")  and guaranteed  mortgage  certificates ("GMCs").  Each PC
represents a pro rata share of all interest and principal payments made and owed
on the underlying pool. Freddie Mac generally guarantees timely monthly  payment
of  interest on PCs and the ultimate payment  of principal, but it also has a PC
program under which it guarantees timely payment of both principal and interest.
GMCs also  represent  a  pro  rata  interest  in  a  pool  of  mortgages.  These
instruments,  however, pay  interest semi-annually  and return  principal once a
year in guaranteed minimum payments. The Freddie Mac guarantee is not backed  by
the full faith and credit of the U.S. government.
    PRIVATE,   RTC  AND  SIMILAR   MORTGAGE-BACKED  SECURITIES.  Mortgage-backed
securities issued by Private  Mortgage Lenders are  structured similarly to  the
pass-through  certificates  and  collateralized  mortgage  obligations  ("CMOs")
issued or guaranteed by GNMA, Fannie  Mae and Freddie Mac. Such  mortgage-backed
securities  may be supported  by pools of  U.S. government or  agency insured or
guaranteed mortgage loans  or by  other mortgage-backed securities  issued by  a
government  agency or instrumentality; but they generally are supported by pools
of conventional  (i.e., non-government  guaranteed or  insured) mortgage  loans.
Since  such mortgage-backed securities normally are  not guaranteed by an entity
having the credit standing  of GNMA, Fannie Mae  and Freddie Mac, they  normally
are  structured with one or  more types of credit  enhancement. See "-- Types of
Credit Enhancement." These  credit enhancements  do not  protect investors  from
changes in market value.
The  Resolution  Trust  Corporation ("RTC"),  which  was organized  by  the U.S.
government in connection with the savings and loan crisis, held assets of failed
savings associations as either a conservator or receiver for such  associations,
or  it acquired  such assets in  its corporate capacity.  These assets included,
among other things,  single family and  multifamily mortgage loans,  as well  as
commercial  mortgage loans.  In order  to dispose of  such assets  in an orderly
manner, RTC established a vehicle registered with the SEC through which it  sold
mortgage-backed  securities. RTC  mortgage-backed securities  represent pro rata
interests in pools  of mortgage loans  that RTC held  or acquired, as  described
above,  and  are  supported  by one  or  more  of the  types  of  private credit
enhancements used by Private Mortgage Lenders.
    COLLATERALIZED MORTGAGE OBLIGATIONS AND MULTI-CLASS MORTGAGE
PASS-THROUGHS. CMOs are  debt obligations  that are  collateralized by  mortgage
loans  or mortgage  pass-through securities (such  collateral collectively being
called "Mortgage Assets"). CMOs may be issued by Private Mortgage Lenders or  by
government  entities such  as Fannie  Mae or  Freddie Mac.  Multi-class mortgage
pass-through securities are interests in  trusts that are comprised of  Mortgage
Assets  and that  have multiple  classes similar  to those  in CMOs.  Unless the
context indicates  otherwise,  references  herein to  CMOs  include  multi-class
mortgage pass-through securities. Payments of principal of, and interest on, the
Mortgage  Assets  (and in  the case  of CMOs,  any reinvestment  income thereon)
provide the  funds  to  pay debt  service  on  the CMOs  or  to  make  scheduled
distributions on the multi-class mortgage pass-through securities.
In  a CMO, a series of bonds or certificates is issued in multiple classes. Each
class of CMO, also referred to as a "tranche," is issued at a specific fixed  or
floating  coupon  rate and  has a  stated maturity  or final  distribution date.
Principal prepayments  on the  Mortgage  Assets may  cause  CMOs to  be  retired
substantially  earlier than their stated maturities or final distribution dates.
Interest is paid or accrues on all classes of a CMO (other than any PO class) on
a monthly, quarterly  or semi-annual basis.  The principal and  interest on  the
Mortgage  Assets may  be allocated among  the several  classes of a  CMO in many
ways.  In  one  structure,  payments  of  principal,  including  any   principal
prepayments,  on the Mortgage Assets are applied to  the classes of a CMO in the
order of their respective stated maturities or final distribution dates so  that
no  payment of principal  will be made on  any class of the  CMO until all other
classes having an earlier stated maturity  or final distribution date have  been
paid  in  full.  In  some CMO  structures,  all  or a  portion  of  the interest
attributable to one or  more of the  CMO classes may be  added to the  principal
amounts   attributable  to   such  classes,   rather  than   passed  through  to
certificateholders on a current basis, until  other classes of the CMO are  paid
in full.
Parallel  pay  CMOs are  structured  to provide  payments  of principal  on each
payment date to more than one class. These simultaneous payments are taken  into
account  in calculating the  stated maturity date or  final distribution date of
each class, which, as with other CMO  structures, must be retired by its  stated
maturity date or final distribution date but may be retired earlier.
Some  CMO classes are structured  to pay interest at  rates that are adjusted in
accordance with a formula,  such as a  multiple or fraction of  the change in  a
specified interest rate index, so as to pay at a rate that will be attractive in
certain  interest rate environments  but not in others.  For example, an inverse
floating rate CMO class pays  interest at a rate  that increases as a  specified
interest  rate index decreases but decreases  as that index increases. For other
CMO classes, the yield may move in  the same direction as market interest  rates
- -- i.e., the yield may increase as rates increase and decrease as rates decrease
- --  but may do so more rapidly or to  a greater degree. The market value of such
securities generally is more volatile than that of a fixed rate obligation. Such
interest rate  formulas may  be  combined with  other CMO  characteristics.  For
example, a
 
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                      GT GLOBAL VARIABLE INVESTMENT FUNDS
CMO  class may be an "inverse IO," on  which the holders are entitled to receive
no payments of principal  and are entitled  to receive interest  at a rate  that
will vary inversely with a specified index or a multiple thereof.
    ARM  AND  FLOATING  RATE  MORTGAGE-BACKED  SECURITIES.  ARM  mortgage-backed
securities are  mortgage-backed securities  that represent  a right  to  receive
interest payments at a rate that is adjusted to reflect the interest earned on a
pool  of mortgage loans  bearing variable or adjustable  rates of interest (such
mortgage loans  are  referred  to  as  "ARMs").  Floating  rate  mortgage-backed
securities  are classes of mortgage-backed  securities that have been structured
to represent the right to receive  interest payments at rates that fluctuate  in
accordance  with an index but that generally are supported by pools comprised of
fixed-rate mortgage loans. Because the interest  rates on ARM and floating  rate
mortgage-backed  securities  are reset  in response  to  changes in  a specified
market index,  the  values of  such  securities tend  to  be less  sensitive  to
interest rate fluctuations than the values of fixed-rate securities.
ARMs  generally specify  that the borrower's  mortgage interest rate  may not be
adjusted above a  specified lifetime  maximum rate or,  in some  cases, below  a
minimum  lifetime rate. In addition, certain ARMs specify for limitations on the
maximum amount by  which the mortgage  interest rate may  adjust for any  single
adjustment  period. ARMs also may  limit changes in the  maximum amount by which
the borrower's monthly payment may adjust  for any single adjustment period.  In
the  event that a monthly payment is not sufficient to pay the interest accruing
on the ARM, any such  excess interest is added  to the mortgage loan  ("negative
amortization"),  which is repaid through future payments. If the monthly payment
exceeds the sum of the interest accrued at the applicable mortgage interest rate
and the  principal  payment that  would  have  been necessary  to  amortize  the
outstanding  principal balance over  the remaining term of  the loan, the excess
reduces the  principal balance  of the  ARM. Borrowers  under ARMs  experiencing
negative amortization may take longer to build up their equity in the underlying
property and may be more likely to default interest. ARMs also may be subject to
a greater rate of prepayments in a declining interest rate environment.
The  rates of interest payable on certain ARMs are based on indices, such as the
one-year constant  maturity  Treasury  rate,  that  reflect  changes  in  market
interest  rates. Others are based on indices  that tend to lag behind changes in
market interest rates. The values of ARM mortgage-backed securities supported by
ARMs that adjust based on lagging indices tend to be somewhat more sensitive  to
interest  rate fluctuations than those  reflecting current interest rate levels,
although the value of such ARM mortgage-backed securities still tends to be less
sensitive to interest rate fluctuations than fixed-rate securities.
As with ARM  mortgage-backed securities, interest  rate adjustments on  floating
rate  mortgage-backed securities may be based  on indices that lag behind market
interest rates.  Interest  rates  on floating  rate  mortgage-backed  securities
generally  are adjusted  monthly. Floating  rate mortgage-backed  securities are
subject to lifetime interest  rate caps, but they  generally are not subject  to
limitations  on monthly or  other periodic changes in  interest rates or monthly
payments.
    TYPES OF CREDIT ENHANCEMENT. To lessen the effect of failures by obligors on
Mortgage  Assets  to  make  payments,  mortgage-backed  securities  may  contain
elements   of  credit  enhancement.  Such  credit  enhancement  falls  into  two
categories: (1) liquidity protection and (2) protection against losses resulting
after default  by an  obligor on  the underlying  assets and  collection of  all
amounts  recoverable directly  from the obligor  and through  liquidation of the
collateral. Liquidity protection refers to the provision of advances,  generally
by  the  entity administering  the  pool of  assets  (usually the  bank, savings
association or  mortgage banker  that transferred  the underlying  loans to  the
issuer  of  the  security),  to  ensure that  the  receipt  of  payments  on the
underlying pool occurs in a timely fashion. Protection against losses  resulting
after  default and liquidation ensures ultimate payment of the obligations on at
least a portion  of the  assets in  the pool.  Such protection  may be  provided
through  guarantees, insurance  policies or  letters of  credit obtained  by the
issuer or sponsor, from third parties, through various means of structuring  the
transaction  or through a combination of such approaches. The Funds will not pay
any additional  fees for  such  credit enhancement,  although the  existence  of
credit  enhancement may increase the price of a security. Credit enhancements do
not provide protection  against changes  in the  market value  of the  security.
Examples  of credit enhancement arising out  of the structure of the transaction
include "senior-subordinated securities" (multiple class securities with one  or
more classes subordinate to other classes as to the payment of principal thereof
and interest thereon, with the result that defaults on the underlying assets are
borne  first  by the  holders of  the subordinated  class), creation  of "spread
accounts" or "reserve funds" (where cash or investments, sometimes funded from a
portion of the payments  on the underlying assets,  are held in reserve  against
future losses) and "over-collateralization" (where the scheduled payments on, or
the  principal amount  of, the  underlying assets  exceed that  required to make
payment of the securities and  pay any servicing or  other fees). The degree  of
credit  enhancement provided  for each  issue generally  is based  on historical
information regarding the level  of credit risk  associated with the  underlying
assets. Delinquency or loss in excess of that anticipated could adversely affect
the return on an investment in such a security.
 
                  Statement of Additional Information Page 11
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                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
VARIABLE AND FLOATING RATE SECURITIES
Money  Market  Fund  may purchase  variable  and floating  rate  securities with
remaining maturities in excess  of 13 months. Such  securities must comply  with
conditions  established by  the Securities  and Exchange  Commission (the "SEC")
under which they may be considered to have remaining maturities of 13 months  or
less.  The yield of these  securities varies in relation  to changes in specific
money market  rates such  as the  prime  rate. These  changes are  reflected  in
adjustments  to the  yields of  the variable  and floating  rate securities, and
different securities may  have different  adjustment rates. To  the extent  that
Money  Market Fund invests in such variable  and floating rate securities, it is
the Sub-advisor's view that Money Market Fund  may be able to take advantage  of
the higher yield that is usually paid on longer-term securities. The Sub-advisor
further  believes that the  variable and floating rates  paid on such securities
may substantially  reduce  the  wide  fluctuations in  market  value  caused  by
interest  rate changes and  other factors which are  typical of longer-term debt
securities.
INDEXED SECURITIES.
Strategic Income Fund may invest without limitation in commercial paper which is
indexed to certain specific foreign currency  exchange rates. The terms of  such
commercial  paper  provide  that its  principal  amount is  adjusted  upwards or
downwards (but not below  zero) at maturity to  reflect changes in the  exchange
rate  between two currencies while the  obligation is outstanding. The Fund will
purchase such commercial paper with the currency in which it is denominated and,
at maturity,  will  receive interest  and  principal payments  thereon  in  that
currency,  but the amount  of principal payable  by the issuer  at maturity will
change in proportion to the change (if any) in the exchange rate between the two
specified currencies between the date the instrument is issued and the date  the
instrument  matures. While  such commercial  paper entails  the risk  of loss of
principal, the potential for realizing gains  as a result of changes in  foreign
currency  exchange rates enables Strategic Income Fund to hedge (or cross-hedge)
against a decline in the U.S. dollar value of investments denominated in foreign
currencies while seeking to provide an  attractive money market rate of  return.
Strategic Income Fund will not purchase such commercial paper for speculation.
Strategic  Income Fund and  Global Government Income Fund  may invest in certain
other indexed securities, which are securities  whose prices are indexed to  the
prices  of other securities, securities  indices, currencies, precious metals or
other commodities, or other financial indicators. Indexed securities  typically,
but  not always,  are debt  securities or  deposits whose  value at  maturity or
coupon rate is determined  by reference to a  specific instrument or  statistic.
The  performance  of  indexed  securities  depends  to  a  great  extent  on the
performance of the  security, currency  or other  instrument to  which they  are
indexed,  and may  also be  influenced by  interest rate  changes in  the United
States and  abroad. At  the same  time, indexed  securities are  subject to  the
credit  risks associated with the  issuer of the security,  and their values may
decline substantially  if the  issuer's creditworthiness  deteriorates.  Indexed
securities  may be more  volatile than the underlying  instruments. New forms of
indexed securities continue to  be developed. Strategic  Income Fund and  Global
Government  Income Fund may  invest in such securities  to the extent consistent
with its investment objectives.
DEPOSITARY RECEIPTS
Each Fund, except for Global Government Income Fund, U.S. Government Income Fund
and Money Market Fund,  may hold securities  of foreign issuers  in the form  of
American  Depositary  Receipts  ("ADRs"), American  Depositary  Shares ("ADSs"),
Global Depositary Receipts ("GDRs") and European Depositary Receipts ("EDRs") or
other  securities  convertible  into  securities  of  eligible  issuers.   These
securities  may  not necessarily  be  denominated in  the  same currency  as the
securities for which they may be  exchanged. ADRs and ADSs are typically  issued
by  an American  bank or  trust company  that evidences  ownership of underlying
securities issued by a foreign  corporation. EDRs, which are sometimes  referred
to  as Continental Depositary Receipts ("CDRs"),  are receipts issued in Europe,
typically by foreign banks and trust companies that evidence ownership of either
foreign or domestic securities. Generally, ADRs and ADSs in registered form  are
designed for use in U.S. securities markets and EDRs in bearer form are designed
for  use in European  securities markets. For purposes  of the Funds' respective
investment policies, the Funds' investments in ADRs, ADSs, GDRs and EDRs will be
deemed to be  investments in  the equity securities  representing securities  of
foreign issuers into which they may be converted.
ADR  facilities may be established as either "unsponsored" or "sponsored." While
ADRs issued under these  two types of facilities  are in some respects  similar,
there  are distinctions between  them relating to the  rights and obligations of
ADR holders and the practices of market participants. A depositary may establish
an unsponsored  facility  without  participation by  (or  even  necessarily  the
acquiescence  of) the issuer of the deposited securities, although typically the
depositary requests a  letter of  non-objection from  such issuer  prior to  the
establishment  of the facility.  Holders of unsponsored  ADRs generally bear all
the costs  of such  facilities. The  depositary usually  charges fees  upon  the
deposit  and withdrawal of the deposited securities, the conversion of dividends
into  U.S.  dollars,  the  disposition   of  non-cash  distributions,  and   the
performance  of  other  services.  The  depositary  of  an  unsponsored facility
frequently is under no obligation to distribute
 
                  Statement of Additional Information Page 12
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
shareholder communications received from the issuer of the deposited  securities
or  to pass through voting  rights to ADR holders  with respect to the deposited
securities. Sponsored ADR facilities are created in generally the same manner as
unsponsored facilities,  except  that the  issuer  of the  deposited  securities
enters  into a deposit agreement with the depository. The deposit agreement sets
out the rights and  responsibilities of the issuer,  the depositary and the  ADR
holders.  With  sponsored facilities,  the  issuer of  the  deposited securities
generally will bear some of the costs relating to the facility (such as dividend
payment fees of the depositary), although  ADR holders continue to bear  certain
other  costs (such  as deposit  and withdrawal  fees). Under  the terms  of most
sponsored arrangements, depositaries agree to distribute notices of  shareholder
meetings  and voting instructions, and to provide shareholder communications and
other information  to the  ADR  holders at  the request  of  the issuer  of  the
deposited securities. The Funds may invest in sponsored and unsponsored ADRs.
BRADY BONDS.
Latin America Fund, Global Government Income Fund, and Strategic Income Fund may
invest  in "Brady  Bonds," which  are debt  restructurings that  provide for the
exchange of cash and loans for newly issued bonds. Brady Bonds have been  issued
by  the countries of Albania, Argentina, Brazil, Bulgaria, Costa Rica, Dominican
Republic, Ecuador,  Ivory  Coast, Jordan,  Mexico,  Nigeria, Panama,  Peru,  the
Philippines, Poland, Russia, Uruguay, Venezuela and Vietnam, and are expected to
be  issued by other emerging market countries.  As of the date of this Statement
of Additional Information,  the Funds  are not aware  of the  occurrence of  any
payment defaults on Brady Bonds. Investors should recognize, however, that Brady
Bonds  do not have  a long payment  history. In addition,  Brady Bonds are often
rated below investment grade.
Latin America Fund, Global Government Income Fund, and Strategic Income Fund may
invest  in  either   collateralized  or  uncollateralized   Brady  Bonds.   U.S.
dollar-denominated,  collateralized  Brady Bonds,  which may  be fixed  rate par
bonds or  floating  rate  discount  bonds, are  collateralized  in  full  as  to
principal  by U.S. Treasury  zero coupon bonds  having the same  maturity as the
bonds. Interest payments on such bonds  generally are collateralized by cash  or
securities  in an amount that, in  the case of fixed rate  bonds, is equal to at
least one year  of rolling interest  payments based on  the applicable  interest
rate at the time of issuance and is adjusted at regular intervals thereafter.
SAMURAI AND YANKEE BONDS
New  Pacific  Fund,  International  Fund,  Strategic  Income  Fund,  and  Global
Government Income Fund  may invest  in yen-denominated  bonds sold  in Japan  by
non-Japanese  issuers ("Samurai bonds"), and America Fund, Strategic Income Fund
and Global Government Income  Fund may invest  in U.S. dollar-denominated  bonds
sold in the United States by non-U.S. issuers ("Yankee bonds"). It is the policy
of  each Fund to invest in Samurai or  Yankee bond issues only after taking into
account considerations of quality and liquidity, as well as yield.
WARRANTS OR RIGHTS
Warrants or rights may be acquired by  the Funds, except for Money Market  Fund,
in  connection with  other securities or  separately, and may  provide the Funds
with the right to purchase at a later date other securities of the issuer.
LENDING OF SECURITIES
For the purpose of realizing additional  income, each Fund, except Money  Market
Fund, may make secured loans of securities held by that Fund which amount to not
more than 30% of its total assets. Securities lending allows the Funds to retain
ownership  of the securities loaned and, at  the same time, enhances each Fund's
total return. While  a loan is  outstanding, the borrower  must maintain with  a
Fund's  custodian collateral consisting  of cash, U.S.  government securities or
certain irrevocable  letters  of credit  equal  to at  least  the value  of  the
borrowed  securities,  plus any  accrued interest  or  such other  collateral as
permitted by  the Fund's  investment  program and  regulatory agencies,  and  as
approved  by the Board. The risks in lending portfolio securities, as with other
extensions of secured credit, consist of possible delays in receiving additional
collateral or in recovery of the  loaned securities and possible loss of  rights
in  the collateral  should the borrower  fail financially.  Securities loans are
made  to  broker-dealers  or  institutional  investors  pursuant  to  agreements
requiring that the loans continuously be secured by collateral at least equal at
all times to the value of the securities lent plus any accrued interest, "marked
to  market" on a  daily basis. Each  Fund may pay  reasonable administrative and
custodial fees in connection with loans of its securities. While the  securities
loan  is outstanding, the  Fund will continue  to receive the  equivalent of the
interest or dividends paid by the issuer on the securities, as well as  interest
on  the investment of the collateral or a  fee from the borrower. The Fund has a
right to call each loan and  obtain the securities within the stated  settlement
period.  The Fund will not  have the right to  vote equity securities while they
are being lent, but it may call in a loan in anticipation of any important vote.
Loans will be made only to firms deemed by AIM and/or the sub-advisors to be  of
good  standing and will  not be made unless,  in the judgment  of AIM and/or the
sub-advisors, the consideration to be earned  from such loans would justify  the
risk.
 
                  Statement of Additional Information Page 13
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                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
COMMERCIAL BANK OBLIGATIONS
For  the purposes  of the Funds'  respective investment  policies regarding bank
obligations, obligations of foreign branches of U.S. banks and of foreign  banks
are obligations of the issuing bank and may be general obligations of the parent
bank.  Such obligations  may, however,  be limited  by the  terms of  a specific
obligation  and  by  government  regulation.  As  with  investment  in  non-U.S.
securities  in general,  investments in the  obligations of  foreign branches of
U.S. banks and of foreign banks may subject a Fund to investment risks that  are
different  in some respects from those of investments in obligations of domestic
issuers. Although a Fund typically will acquire obligations issued and supported
by the  credit of  U.S. or  foreign banks  having total  assets at  the time  of
purchase  in excess of $1  billion, this $1 billion  figure is not a fundamental
investment policy or restriction of such Fund. For purposes of calculation  with
respect to the $1 billion figure, the assets of a bank will be deemed to include
the assets of its U.S. and non-U.S. branches.
COMMERCIAL PAPER
U.S.  Government Income Fund  may invest in commercial  paper, which consists of
short-term promissory notes  issued by  large corporations with  a high  quality
rating to finance short-term credit needs.
REPURCHASE AGREEMENTS
A  repurchase agreement is  a transaction in  which a Fund  purchases a security
from a bank or recognized securities dealer and simultaneously commits to resell
that security to the  bank or dealer  at an agreed-upon  price, date and  market
rate  of interest  unrelated to  the coupon  rate or  maturity of  the purchased
security.
Although repurchase agreements  carry certain risks  not associated with  direct
investments in securities, including possible decline in the market value of the
underlying securities and delays and costs to the Fund if the other party to the
repurchase  agreement  becomes bankrupt,  the Funds  will enter  into repurchase
agreements only with banks and dealers  believed by AIM and/or the  sub-advisors
to  present minimal credit  risks in accordance with  guidelines approved by the
Companies' Boards  of Trustees.  AIM  and/or the  sub-advisors will  review  and
monitor  the  creditworthiness of  such institutions  under the  Boards' general
supervision.
Each Fund will invest only in repurchase agreements collateralized at all  times
in  an amount at least  equal to the repurchase  price plus accrued interest. To
the extent that the proceeds  from any sale of  such collateral upon default  in
the obligation to repurchase were less than the repurchase price, the Fund would
suffer  a loss. If  the financial institution  which is party  to the repurchase
agreement petitions for bankruptcy or otherwise becomes subject to bankruptcy or
other liquidation proceedings, there may  be restrictions on the Fund's  ability
to  sell the collateral and the Fund  could suffer a loss. However, with respect
to financial  institutions  whose  bankruptcy  or  liquidation  proceedings  are
subject  to the U.S. Bankruptcy Code, the Fund intends to comply with provisions
under the U.S.  Bankruptcy Code that  would allow it  immediately to resell  the
collateral.  There is  no limitation  on the  amount of  the Fund  assets may be
subject to repurchase agreements at  any given time. No  Fund will enter into  a
repurchase  agreement with a  maturity of more  than seven days  if, as a result
more than 15% (10% for Money Market Fund)  of the value of its net assets  would
be invested in such repurchase agreements and other illiquid investments.
BORROWING, REVERSE REPURCHASE AGREEMENTS AND "ROLL" TRANSACTIONS
BORROWING AND LENDING.
From time to time, it may be advantageous for a Fund to borrow money rather than
sell  existing securities to  meet redemption requests.  Accordingly, a Fund may
borrow from banks or (except for  Money Market Fund) may borrow through  reverse
repurchase  agreements  and  "roll"  transactions  in  connection  with  meeting
requests for  the  redemption of  shares  of the  Fund.  The Funds  (except  for
Infrastructure  Fund, Natural Resources  Fund, Telecommunications Fund, Emerging
Markets Fund  and  Latin  America  Fund)  will  not  purchase  securities  while
borrowings   are  outstanding.  Infrastructure  Fund,  Natural  Resources  Fund,
Telecommunications Fund, Emerging Markets Fund  and Latin America Fund may  each
purchase  additional securities  when outstanding  borrowings represent  no more
than 5% of its assets.
Each Fund's borrowings will not exceed 33 1/3% of the Fund's total assets, i.e.,
the Fund's total assets at all times will  equal at least 300% of the amount  of
outstanding  borrowing.  If  market  fluctuations  in  the  value  of  a  Fund's
securities holdings or other factors cause the ratio of the Fund's total  assets
to  outstanding  borrowings to  fall below  300%,  within three  days (excluding
Sundays and holidays) of such event the Fund may be required to sell  securities
to  restore the 300%  asset coverage, even though  from an investment standpoint
such sales might be disadvantageous. Each Fund  also may borrow up to 5% of  its
total  assets for temporary or emergency purposes  other than to provide cash to
meet redemptions  of Fund  shares. Any  borrowing by  a Fund  may cause  greater
fluctuation  in its net asset value  than would be the case  if the Fund did not
borrow.
 
                  Statement of Additional Information Page 14
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                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
Each Fund (except Strategic Income Fund) currently is prohibited from  borrowing
money in order to purchase securities. If a Fund is permitted to employ leverage
in  the future, it would be subject to certain additional risks. Use of leverage
creates an opportunity for  greater growth of capital  but would exaggerate  any
increases  or decreases in the Fund's net asset value. When the income and gains
on securities purchased with the proceeds of borrowings exceed the costs of such
borrowings, the Fund's  earnings or net  asset value will  increase faster  than
otherwise  would be the case; conversely if such income and gains fail to exceed
such costs, the  Fund's earnings or  net asset value  would decline faster  than
would otherwise be the case.
Excluding  Money  Market  Fund,  each Fund  may  enter  into  reverse repurchase
agreements. A reverse repurchase agreement is a borrowing transaction in which a
Fund transfers possession  of a security  to another  party, such as  a bank  or
broker/dealer  in return for cash, and agrees  to repurchase the security in the
future at an agreed  upon price, which includes  an interest component.  Reverse
repurchase  agreements involve the risk that  the market value of the securities
retained in lieu of sale by a Fund may decline below the price of the securities
the Fund had  sold but is  obligated to repurchase.  In the event  the buyer  of
securities  under a reverse repurchase agreement files for bankruptcy or becomes
insolvent, such buyer  or its trustee  or receiver may  receive an extension  of
time  to determine  whether to enforce  the Fund's obligation  to repurchase the
securities, and  the  Fund's use  of  the  proceeds of  the  reverse  repurchase
agreement may effectively be restricted pending such decision.
The  Funds (except for  Money Market Fund)  also may engage  in "roll" borrowing
transactions, which involve the  sale of GNMA  certificates or other  securities
together  with a  commitment (for which  a Fund  may receive a  fee) to purchase
similar, but not  identical, securities  at a future  date. Each  Fund will  set
aside cash or liquid securities in an amount sufficient to cover its obligations
under "roll" transactions and reverse repurchase agreements with broker/dealers.
No segregation is required for reverse repurchase agreements with banks.
Strategic  Income Fund may borrow money from banks in an amount up to 33 1/3% of
its total  assets (including  the  amount borrowed),  less all  liabilities  and
indebtedness  other  than  the  borrowing  and  may  use  the  proceeds  of such
borrowings for  investment  purposes.  Strategic Income  Fund  will  borrow  for
investment  purposes only  when AIM and/or  the Fund's  sub-advisor believe that
such borrowings will benefit  Strategic Income Fund,  after taking into  account
considerations  such as  the costs  of the  borrowing and  the likely investment
returns on the securities purchased with the borrowed monies.
Borrowing for investment purposes is known as leveraging, which is a speculative
practice. Such borrowing by Strategic Income Fund will create an opportunity for
increased  net   income  but,   at  the   same  time,   involves  special   risk
considerations.  For  example, leveraging  might exaggerate  changes in  the net
asset value of Strategic Income Fund's shares  and in the yield realized by  the
Fund's  portfolio.  Although the  principal of  such  borrowings will  be fixed,
Strategic Income Fund's assets may change in value during the time the borrowing
is outstanding. By leveraging the Fund,  changes in net asset values, higher  or
lower, may be greater in degree than if leverage was not employed. To the extent
the  income derived  from the  assets obtained  with borrowed  funds exceeds the
interest and other  expenses that Strategic  Income Fund will  have to pay,  the
Fund's  net income will be greater than  if borrowing were not used. Conversely,
if the income from the assets obtained with borrowed funds is not sufficient  to
cover  the cost of  borrowing, the net  income of Strategic  Income Fund will be
less than if  borrowing were not  used, and therefore  the amount available  for
distribution  to shareholders  as a dividend  will be  reduced. Strategic Income
Fund expects that some of its borrowings may be made on a secured basis.
Strategic Income Fund  also may  enter into "dollar  rolls," in  which the  Fund
sells   fixed  income  securities  for  delivery   in  the  current  month,  and
simultaneously contracts to repurchase substantially similar (same type,  coupon
and  maturity) securities  on a specified  future date. During  the roll period,
Strategic  Income  Fund  would  forego  principal  and  interest  paid  on  such
securities. Strategic Income Fund would be compensated by the difference between
the  current sales price and the forward  price for the future purchase, as well
as by the interest earned on the cash proceeds of the initial sale.
SHORT SALES
The Funds may  make short  sales of securities,  although they  have no  current
intention   of  doing  so.  However,  Growth   &  Income  Fund,  pursuant  to  a
non-fundamental limitation, may not sell securities short, except to the  extent
the  Fund contemporaneously owns  or has the  right to acquire  at no additional
cost securities identical to those sold short. A short sale is a transaction  in
which  a Fund  sells a security  in anticipation  that the market  price of that
security will decline. A Fund may make short  sales (i) as a form of hedging  to
offset   potential  declines  in  long  positions  in  securities  it  owns,  or
anticipates acquiring, or in similar securities,  and (ii) in order to  maintain
investment flexibility. When a Fund makes a short sale of a security it does not
own,  it must borrow the security sold short and deliver it to the broker/dealer
or other intermediary through which it made the short sale. The Fund may have to
pay a fee to  borrow particular securities  and will often  be obligated to  pay
over any payments received on such borrowed securities.
 
                  Statement of Additional Information Page 15
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                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
The  Fund's obligation  to replace the  borrowed security when  the borrowing is
called or expires will be secured by collateral deposited with the intermediary.
The Fund also will be required to  deposit collateral with its custodian to  the
extent  necessary so that the value of both collateral deposits in the aggregate
is at all  times equal  to at  least 100%  of the  current market  value of  the
security  sold short. Depending on arrangements  made with the intermediary from
which it borrowed the security, regarding payment of any amounts received by the
Fund on  such  security,  the  Fund may  not  receive  any  payments  (including
interest) on its collateral deposited with such intermediary.
If  the price of the security sold short increases between the time of the short
sale and the time the Fund replaces the borrowed security, the Fund will incur a
loss; conversely, if the price declines, the Fund will realize a gain. Any  gain
will  be decreased, and any loss  increased, by the transaction costs associated
with the transaction. Although the Fund's gain is limited by the price at  which
it sold the security short, its potential loss theoretically is unlimited.
Infrastructure  Fund, Natural Resources  Fund, Telecommunications Fund, Emerging
Markets Fund, and Latin America Fund will not make a short sale if, after giving
effect to such sale, the market value  of the securities sold short exceeds  25%
of  the value  of their respective  total assets, or  their respective aggregate
short sales of the securities of any one  issuer exceed the lesser of 2% of  net
assets  or  2%  of  the  securities  of  any  class  of  the  issuer.  Moreover,
Infrastructure Fund, Natural Resources  Fund, Telecommunications Fund and  Latin
America Fund may engage in short sales only with respect to securities listed on
a national securities exchange.
A  Fund might  make a  short sale "against  the box"  in order  to hedge against
market risks when AIM and/or the Fund's sub-advisor believe that the price of  a
security  may decline, causing a decline in the value of a security owned by the
Fund or a security convertible into  or exchangeable for such security. In  such
case,  any future losses in the Fund's long position should be reduced by a gain
in the  short position.  Conversely, any  gain in  the long  position should  be
reduced  by a  loss in  the short position.  The extent  to which  such gains or
losses in the  long position  are reduced  will depend  upon the  amount of  the
securities  sold short relative to  the amount of the  securities the Fund owns,
either directly or indirectly, and, in the case where the Fund owns  convertible
securities,  changes in  the investment  values or  conversion premiums  of such
securities. There will be certain  additional transaction costs associated  with
short sales "against the box," but the Funds will endeavor to offset these costs
with income from the investment of the cash proceeds of short sales.
TEMPORARY DEFENSIVE STRATEGIES
Emerging  Markets Fund and Latin America Growth Fund may invest in the following
types of money  market instruments  (I.E., debt  instruments with  less than  12
months remaining until maturity) denominated in U.S. dollars or other currencies
(in  the case  of Latin  America Growth  Fund, a  Latin American  currency): (a)
obligations issued or guaranteed by the U.S. or foreign governments (in the case
of Latin America Growth Fund, the government of a Latin American country), their
agencies, instrumentalities or municipalities; (b) obligations of  international
organizations designed or supported by multiple foreign governmental entities to
promote economic reconstruction or development; (c) finance company obligations,
corporate commercial paper and other short-term commercial obligations; (d) bank
obligations  (including certificates of deposit,  time deposits, demand deposits
and bankers'  acceptances);  (e)  repurchase  agreements  with  respect  to  the
foregoing;  and (f) other substantially  similar short-term debt securities with
comparable characteristics.
Emerging Markets Fund  and Latin America  Growth Fund may  invest in  commercial
paper  rated as low as A-3 by S&P or P-3 by Moody's or, if not rated, determined
by AIM and/or the  Fund's sub-advisor to be  of comparable quality.  Obligations
rated  A-3 and P-3 are  considered by S&P and  Moody's, respectively, to have an
acceptable capacity for timely repayment. However, these securities may be  more
vulnerable  to  adverse effects  of  changes in  circumstances  than obligations
carrying higher designations.
INVESTMENT IN OTHER INVESTMENT COMPANIES OR VEHICLES.
Each Fund may invest in the securities of other investment companies within  the
limits  of the 1940  Act. The Funds may  be able to  invest in certain countries
solely or  primarily through  governmentally authorized  investment vehicles  or
companies.  Each Fund may invest up to 10%  of its total assets in the aggregate
in shares of other investment companies and up to 5% of its total assets in  any
one  investment company, as long as each investment does not represent more than
3% of  the voting  stock  of the  acquired investment  company  at the  time  of
investment.  Some of the investment  companies in which the  Funds invest may be
investment  vehicles  or  companies   that  are  advised   by  AIM  and/or   the
sub-advisors.
Investment  in other investment companies may involve the payment of substantial
premiums above the value of such investment companies' portfolio securities  and
is  subject to limitations under the 1940 Act and market availability. The Funds
do not intend to invest in investment  companies unless, in the judgment of  AIM
and/or  the sub-advisors, the potential benefits  of such investment justify the
payment of  any applicable  premium or  sales  charge. As  a shareholder  in  an
investment  company,  a Fund  would bear  its ratable  share of  that investment
company's expenses, including its advisory
 
                  Statement of Additional Information Page 16
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                      GT GLOBAL VARIABLE INVESTMENT FUNDS
and administration fees. At the same time, a Fund would continue to pay its  own
management  fees and other expenses except  with respect to investments in other
investment companies that are advised by AIM and/or the sub-advisors. AIM and/or
the sub-advisors have agreed to waive its fees to the extent that such fees  are
based on the Funds' investments in such other investment companies.
LOAN PARTICIPATIONS AND ASSIGNMENTS.
Strategic  Income Fund  may invest  in fixed  and floating  rate loans ("Loans")
arranged through private negotiations between a  foreign entity and one or  more
financial  institutions  ("Lenders"). The  majority  of Strategic  Income Fund's
investments in  Loans in  emerging markets  is expected  to be  in the  form  of
participations  in Loans ("Participations") and assignments of portions of Loans
from third  parties ("Assignments").  Participations  typically will  result  in
Strategic  Income Fund's having a contractual relationship only with the Lender,
not with the borrower government. Strategic  Income Fund will have the right  to
receive  payments of principal,  interest and any  fees to which  it is entitled
only from the  Lender selling  the Participation and  only upon  receipt by  the
Lender  of  the  payments  from  the  borrower.  In  connection  with purchasing
Participations, Strategic Income Fund  generally will have  no right to  enforce
compliance  by the borrower with the terms of the loan agreement relating to the
loan ("Loan Agreement"), nor any rights of set-off against the borrower, and the
Fund may not directly benefit from  any collateral supporting the Loan in  which
it  has purchased  the Participation.  As a  result, Strategic  Income Fund will
assume the credit risk of both the  borrower and the Lender that is selling  the
Participation.
In  the event of the insolvency of the Lender selling a Participation, Strategic
Income Fund may  be treated  as a  general creditor of  the Lender  and may  not
benefit  from any set-off between the  Lender and the borrower. Strategic Income
Fund will acquire Participations only if the Lender interpositioned between  the
Fund  and  the borrower  is  determined by  AIM  and/or the  sub-advisors  to be
creditworthy. When Strategic Income Fund purchases Assignments from Lenders, the
Fund will acquire direct rights against the borrower on the Loan. However, since
Assignments  are  arranged  through   private  negotiations  between   potential
assignees  and  potential  assignors,  the rights  and  obligations  acquired by
Strategic Income Fund as the purchaser of an Assignment may differ from, and  be
more limited than, those held by the assigning Lender.
PRIVATIZATIONS.
The  governments  of some  foreign countries  have been  engaged in  programs of
selling  part  or  all  of  their  stakes  in  government  owned  or  controlled
enterprises   ("privatizations").  AIM  and/or  the  sub-advisors  believe  that
privatizations may offer opportunities for significant capital appreciation  and
intend  to  invest  assets  of  Infrastructure  Fund,  Natural  Resources  Fund,
Telecommunications  Fund,  Emerging  Markets  Fund,  and  Latin  America   Fund,
respectively, in privatizations in appropriate circumstances. In certain foreign
countries,  the ability of foreign entities such  as the Funds to participate in
privatizations may be limited by local law, or the terms on which the Funds  may
be  permitted  to participate  may  be less  advantageous  than those  for local
investors. There can be no assurance  that foreign governments will continue  to
sell  companies  currently owned  or controlled  by  them or  that privatization
programs will be successful.
WHEN-ISSUED OR FORWARD COMMITMENT SECURITIES.
The Funds may purchase debt securities on a "when-issued" basis and may purchase
or sell  such securities  on a  "forward  commitment" basis  in order  to  hedge
against  anticipated changes in  interest rates and prices.  The price, which is
generally expressed in yield terms, is fixed at the time the commitment is made,
but delivery  and  payment  for the  securities  take  place at  a  later  date.
When-issued  securities  and  forward  commitments  may  be  sold  prior  to the
settlement date, but  a Fund  will purchase  or sell  when-issued securities  or
enter  into forward commitments only with the intention of actually receiving or
delivering the securities, as the case  may be. No income accrues on  securities
that  have been purchased pursuant  to a forward commitment  or on a when-issued
basis prior to delivery to the Fund. If a Fund disposes of the right to  acquire
a  when-issued security  prior to  its acquisition or  disposes of  its right to
deliver or receive against a forward commitment, it may incur a gain or loss. At
the time a Fund enters into a transaction on a when-issued or forward commitment
basis, the Fund will segregate cash or  liquid securities equal to the value  of
the  when-issued or  forward commitment securities  with its  custodian and will
mark to market daily such assets. There is a risk that the securities may not be
delivered and that the Fund  may incur a loss. Growth  and Income Fund will  not
invest  more than 5% of its assets in a combination of securities purchased on a
when-issued basis  or  with  respect  to  which  it  has  entered  into  forward
commitment agreements.
Strategic  Income Fund may  also sell securities  on a "when,  as and if issued"
basis for hedging purposes. Under such  a transaction, Strategic Income Fund  is
required  to deliver at a future date a security it does not presently hold, but
which it has  a right  to receive  if the security  is issued.  Issuance of  the
security  may  not occur,  in which  case  Strategic Income  Fund would  have no
obligation to  the other  party and  would  not receive  payment for  the  sale.
Selling  securities on a "when, as and if  issued" basis may reduce risk of loss
to the extent  that such a  sale wholly or  partially offsets unfavorable  price
 
                  Statement of Additional Information Page 17
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                      GT GLOBAL VARIABLE INVESTMENT FUNDS
movements  on the investments  being hedged. However, such  sales also limit the
amount Strategic  Income  Fund can  receive  if the  "when,  as and  if  issued"
security is in fact issued.
ZERO COUPON SECURITIES.
Strategic Income Fund, Global Government Income Fund, and U.S. Government Income
Fund  may  invest in  certain zero  coupon securities  that are  "stripped" U.S.
Treasury notes and bonds. Strategic Income  Fund also may invest in zero  coupon
and  other deep discount  securities issued by  foreign governments and domestic
and foreign corporations, including certain  Brady Bonds and other foreign  debt
securities  and  in payment-in-kind  securities. Zero  coupon securities  pay no
interest to  holders  prior  to maturity,  and  payment-in-kind  securities  pay
interest  in  the  form of  additional  securities.  However, a  portion  of the
original issue  discount  on  zero  coupon  securities  and  the  "interest"  on
payment-in-kind   securities  are  included  in  the  investing  Fund's  income.
Accordingly, to continue to qualify for tax treatment as a regulated  investment
company and to avoid a certain excise tax (see "Taxes", below), Strategic Income
Fund or U.S. Government Income Fund may be required to distribute an amount that
is   greater  than  the  total  amount  of  cash  it  actually  receives.  These
distributions must  be  made from  the  Funds'  respective cash  assets  or,  if
necessary,  from the proceeds of sales of portfolio securities. Strategic Income
Fund and U.S.  Government Income Fund  will not be  able to purchase  additional
income-producing securities with cash used to make such distributions, and their
respective  current incomes ultimately  may be reduced as  a result. Zero coupon
and payment-in-kind securities usually trade at a deep discount from their  face
or par value and are subject to greater fluctuations of market value in response
to  changing interest rates  than are debt  obligations of comparable maturities
that make current distributions of interest in cash.
OTHER INFORMATION.
The investment objective(s) of each Fund may not be changed without the approval
of a majority of the outstanding voting securities of such Fund. A "majority  of
the  outstanding voting securities"  of a Fund  means the lesser  of: (i) 67% or
more of  the shares  represented at  a meeting  at which  more than  50% of  the
outstanding  shares are  represented, or (ii)  more than 50%  of the outstanding
shares. In addition, each Fund  has adopted certain investment limitations  that
may not be changed without shareholder approval. A complete description of these
limitations  is included below (see "Investment Limitations"). Each Fund's other
investment policies described herein may be changed by the Board of Trustees  of
the relevant Company, without shareholder approval.
If  a  percentage  restriction on  investment  or  utilization of  assets  in an
investment policy or  restriction is  adhered to at  the time  an investment  is
made, a later change in percentage ownership of a security or kind of securities
resulting  from changing market  values or a  similar type of  event will not be
considered a violation of a Fund's investment policies or restrictions.
Certain of the  Funds are  authorized to engage  in Short  Sales, although  they
currently have no intention of doing so, and certain Funds may purchase American
Depositary  Receipts, American Depositary Shares, Global Depositary Receipts and
European Depositary  Receipts.  See  "Short Sales"  and  "Depositary  Receipts",
above.
 
                  Statement of Additional Information Page 18
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                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
                         OPTIONS, FUTURES AND CURRENCY
                                   STRATEGIES
- --------------------------------------------------------------------------------
Each Fund (except Money Market Fund) may use forward currency contracts, futures
contracts,  options on securities, options on indices, options on currencies and
options on futures contracts  to attempt to hedge  against the overall level  of
investment   and  currency  risk  normally   associated  with  the  Fund.  These
instruments are often  referred to  as "derivatives,"  which may  be defined  as
financial  instruments whose performance is derived,  at least in part, from the
performance of  another asset  (such as  a security,  currency, or  an index  of
securities).  The Funds may enter into such  investments up to the full value of
their portfolio assets.
To attempt to  increase return,  Growth &  Income Fund,  Strategic Income  Fund,
Global  Government Income  Fund and U.S.  Government Income Fund  may write call
options on securities. This strategy will be employed only when, in the  opinion
of  AIM and/or the sub-advisors,  the size of the  premium the Fund receives for
writing the option  is adequate  to compensate the  Fund against  the risk  that
appreciation  in the underlying security may not be fully realized if the option
is exercised. Each of  these Funds is  also authorized to  write put options  to
attempt  to enhance return, although they don't have the current intention of so
doing.
To attempt  to  hedge  against  adverse  movements  in  exchange  rates  between
currencies, each Fund (except Money Market Fund) may enter into forward currency
contracts for the purchase or sale of a specified currency at a specified future
date.  Such contracts  may involve  the purchase or  sale of  a foreign currency
against the U.S. dollar  or may involve two  foreign currencies. Each such  Fund
may  enter  into  forward currency  contracts  either with  respect  to specific
transactions or with respect to that Fund's portfolio positions. Each Fund  also
may  purchase  and sell  put and  call  options on  currencies to  hedge against
movements in exchange rates.
In addition, each Fund (except Money Market Fund) may purchase and sell put  and
call  options  on  equity and  debt  securities  to hedge  against  the  risk of
fluctuations in the prices of securities held by the Fund or that AIM and/or the
Fund's sub-advisor intends to include in  the Fund's portfolio. Each such  Fund,
except  for  Strategic  Income  Fund, Global  Government  Income  Fund  and U.S.
Government Income Fund, also may purchase and sell put and call options on stock
indexes  to  hedge  against  overall  fluctuations  in  the  securities  markets
generally or in a specific market sector.
Further, each Fund (except Strategic Income Fund, Global Government Income Fund,
U.S.  Government Income Fund and Money Market Fund) may sell stock index futures
contracts and may  purchase put options  or write call  options on such  futures
contracts  to protect against a  general stock market decline  or a decline in a
specific market sector  that could  affect adversely the  Fund's holdings.  Such
Funds  also may purchase stock index futures contracts and purchase call options
or write put options on such contracts  to hedge against a general stock  market
or  market  sector advance  and thereby  attempt  to lessen  the cost  of future
securities acquisitions. Each Fund (except  Money Market Fund) may use  interest
rate  futures contracts  and options  thereon to hedge  the debt  portion of its
portfolio against changes in the general level of interest rates.
These practices may result in the loss of principal under certain conditions. In
addition, certain provisions of  the Internal Revenue Code  of 1986, as  amended
(the  "Code"), have  the effect of  limiting the  extent to which  the Funds may
enter  into  forward  contracts  or  futures  contracts  or  engage  in  options
transactions. See "Taxes", above.
SPECIAL RISKS OF OPTIONS, FUTURES AND CURRENCY STRATEGIES
The  use of options, futures contracts  and forward currency contracts ("Forward
Contracts") involves special considerations and risks, as described below. Risks
pertaining to particular instruments are described in the sections that follow.
        (1) Successful  use of  most  of these  instruments depends  upon  AIM's
    and/or  the  sub-advisors'  ability  to  predict  movements  of  the overall
    securities and  currency  markets,  which  requires  different  skills  than
    predicting  changes in the prices of individual securities. While AIM and/or
    the sub-advisors are experienced in the use of these instruments, there  can
    be no assurance that any particular strategy adopted will succeed.
        (2)  There  might  be  imperfect correlation,  or  even  no correlation,
    between price  movements  of  an  instrument  and  price  movements  of  the
    investments being hedged. For example, if the value of an instrument used in
    a  short hedge  increased by less  than the  decline in value  of the hedged
    investment, the hedge would not be fully successful.
 
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                      GT GLOBAL VARIABLE INVESTMENT FUNDS
    Such a lack of correlation might occur due to factors unrelated to the value
    of the investments being hedged, such  as speculative or other pressures  on
    the  markets in which the hedging instrument is traded. The effectiveness of
    hedges using hedging  instruments on indices  will depend on  the degree  of
    correlation  between price movements in the index and price movements in the
    investments being hedged.
        (3) Hedging strategies, if successful, can reduce risk of loss by wholly
    or partially offsetting the negative  effect of unfavorable price  movements
    in the investments being hedged. However, hedging strategies can also reduce
    opportunity  for gain by  offsetting the positive  effect of favorable price
    movements in the hedged investments. For  example, if a Fund entered into  a
    short  hedge because the Sub-advisor  projected a decline in  the price of a
    security in the Fund's portfolio, and  the price of that security  increased
    instead,  the gain from that increase might be wholly or partially offset by
    a decline in the price of the hedging instrument. Moreover, if the price  of
    the  hedging instrument declined by  more than the increase  in the price of
    the security, the Fund could  suffer a loss. In  either such case, the  Fund
    would have been in a better position had it not hedged at all.
        (4)  As described below, a Fund might  be required to maintain assets as
    "cover," maintain segregated accounts or make margin payments when it  takes
    positions  in  instruments  involving obligations  to  third  parties (i.e.,
    instruments other than purchased  options). If a Fund  were unable to  close
    out  its positions in such instruments, it  might be required to continue to
    maintain such assets or  accounts or make such  payments until the  position
    expired or matured. The requirements might impair the Fund's ability to sell
    a portfolio security or make an investment at a time when it would otherwise
    be favorable to do so, or require that the Fund sell a portfolio security at
    a  disadvantageous time. The  Fund's ability to  close out a  position in an
    instrument prior to  expiration or maturity  depends on the  existence of  a
    liquid secondary market or, in the absence of such a market, the ability and
    willingness  of the other party to the transaction ("contra party") to enter
    into a  transaction  closing  out  the  position.  Therefore,  there  is  no
    assurance  that any position can  be closed out at a  time and price that is
    favorable to the Fund.
WRITING CALL OPTIONS
All Funds,  other than  Money Market  Fund,  may write  (sell) call  options  on
securities,  currencies and (except for Strategic Income Fund, Global Government
Income Fund  and  U.S.  Government  Income Fund)  stock  indices.  Call  options
generally  will be written on securities and  currencies that, in the opinion of
AIM and/or the  Fund's sub-advisor,  are not expected  to make  any major  price
moves  in  the near  future  but that,  over  the long  term,  are deemed  to be
attractive investments for the Fund.
A call option  gives the  holder (buyer)  the right  to purchase  a security  or
currency  at a specified price (the exercise  price) at any time until (American
style) or on (European style) a certain  date (the expiration date). As long  as
the  obligation of the writer of a call  option continues, he may be assigned an
exercise notice, requiring him  to deliver the  underlying security or  currency
against  payment  of the  exercise price.  This  obligation terminates  upon the
expiration of the call option, or such earlier time at which the writer  effects
a  closing  purchase  transaction  by purchasing  an  option  identical  to that
previously sold.
Portfolio securities or currencies on which call options may be written will  be
purchased  solely on the basis of investment considerations consistent with each
Fund's investment objective(s). When  writing a call option,  a Fund, in  return
for  the premium, gives up  the opportunity for profit  from a price increase in
the underlying security or  currency above the exercise  price, and retains  the
risk  of loss should the  price of the security  or currency decline. Unlike one
who owns  securities or  currencies not  subject to  an option,  a Fund  has  no
control  over  when it  may be  required  to sell  the underlying  securities or
currencies, since  most  options may  be  exercised at  any  time prior  to  the
option's  expiration. If a call option that a Fund has written expires, the Fund
will realize a  gain in the  amount of the  premium; however, such  gain may  be
offset  by a decline in the market  value of the underlying security or currency
during the option period. If the call option is exercised, the Fund will realize
a gain or loss from the sale of the underlying security or currency, which  will
be  increased or  offset by  the premium  received. A  Fund does  not consider a
security or currency covered by  a call option to be  "pledged" as that term  is
used  in the Fund's investment limitations that limit the pledging or mortgaging
of its assets.
Writing call options can serve as a limited short hedge because declines in  the
value  of the  hedged investment would  be offset  to the extent  of the premium
received  for  writing  the  option.  However,  if  the  security  or   currency
appreciates to a price higher than the exercise price of the call option, it can
be  expected that the option  will be exercised and a  Fund will be obligated to
sell the security or currency at less than its market value.
The premium  that  a Fund  receives  for writing  a  call option  is  deemed  to
constitute  the market value of an option.  The premium a Fund will receive from
writing a call option will reflect, among other things, the current market price
of the underlying  investment, the relationship  of the exercise  price to  such
market price, the historical price volatility of the
 
                  Statement of Additional Information Page 20
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                      GT GLOBAL VARIABLE INVESTMENT FUNDS
underlying  investment,  and the  length of  the  option period.  In determining
whether a  particular  call  option  should be  written,  AIM  and/or  a  Fund's
sub-advisor  will consider the reasonableness of the anticipated premium and the
likelihood that a liquid secondary market will exist for those options.
Closing transactions  will  be effected  in  order to  realize  a profit  on  an
outstanding  call option,  to prevent  an underlying  security or  currency from
being called, or  to permit  the sale of  the underlying  security or  currency.
Furthermore, effecting a closing transaction will permit a Fund to write another
call  option  on the  underlying security  or currency  with either  a different
exercise price or expiration date or both.
A Fund will pay transaction costs in connection with the writing of options  and
in  entering  into closing  purchase  contracts. Transaction  costs  relating to
options activity  normally are  higher than  those applicable  to purchases  and
sales of portfolio securities.
The  exercise price of the  options may be below, equal  to or above the current
market values of the  underlying securities, indices or  currencies at the  time
the  options are written. From  time to time, a  Fund may purchase an underlying
security or currency for delivery in accordance with the exercise of an  option,
rather  than delivering the security  or currency currently held  by it. In such
cases, additional costs will be incurred.
A Fund will realize a profit or loss from a closing purchase transaction if  the
cost of the transaction is less or more, respectively, than the premium received
from  writing the option. Because increases in the market price of a call option
generally will reflect increases in the market price of the underlying  security
or  currency, any loss resulting from the  repurchase of a call option is likely
to be offset in whole or in  part by appreciation of the underlying security  or
currency owned by the Fund.
WRITING PUT OPTIONS
The  Funds, other than Money  Market Fund, may write  put options on securities,
currencies and (except for Strategic Income Fund, Global Government Income  Fund
and U.S. Government Income Fund) stock indices. A put option gives the purchaser
of  the option the right to sell, and the writer (seller) the obligation to buy,
the underlying security  or currency  at the exercise  price at  any time  until
(American  style) or on  (European style) the expiration  date. The operation of
put options in  other respects, including  their related risks  and rewards,  is
substantially identical to that of call options.
A  Fund generally would write put options  in circumstances where AIM and/or the
Fund's sub-advisor wishes to  purchase the underlying  security or currency  for
the  Fund at  a price  lower than the  current market  price of  the security or
currency. In such event, the Fund would write a put option at an exercise  price
that, reduced by the premium received on the option, reflects the lower price it
is willing to pay. Since the Fund also would receive interest on debt securities
or  currencies  maintained  to cover  the  exercise  price of  the  option, this
technique could  be used  to enhance  current return  during periods  of  market
uncertainty.  The risk in such  a transaction would be  that the market price of
the underlying security or currency would decline below the exercise price  less
the premiums received.
Writing  put options can serve as a  limited long hedge because increases in the
value of the  hedged investment would  be offset  to the extent  of the  premium
received   for  writing  the  option.  However,  if  the  security  or  currency
depreciates to a price lower than the  exercise price of the put option, it  can
be  expected that the put option will be  exercised and a Fund will be obligated
to purchase the security or currency at more than its market value.
PURCHASING PUT OPTIONS
Each Fund, other than Money Market Fund, may purchase put options on securities,
currencies and (except for Strategic Income Fund, Global Government Income  Fund
and U.S. Government Income Fund) stock indices. As the holder of a put option, a
Fund  would have the  right to sell  the underlying security  or currency at the
exercise price at  any time until  (American style) or  on (European style)  the
expiration date. A Fund may enter into closing sale transactions with respect to
such option, exercise such option or permit such option to expire.
A  Fund  may  purchase  a  put option  on  an  underlying  security  or currency
("protective put") owned by the Fund as a hedging technique in order to  protect
against  an anticipated decline in  the value of the  security or currency. Such
hedge protection is provided  only during the  life of the  put option when  the
Fund,  as the holder of the put option,  is able to sell the underlying security
or currency  at  the  put  exercise  price regardless  of  any  decline  in  the
underlying  security's market  price or  currency's exchange  value. The premium
paid for  the put  option and  any  transaction costs  would reduce  any  profit
otherwise available for distribution when the security or currency eventually is
sold.
A  Fund also may purchase put  options at a time when  the Fund does not own the
underlying security or  currency. By  purchasing put  options on  a security  or
currency  it does not own, a Fund seeks  to benefit from a decline in the market
price of the underlying security or currency. If the put option is not sold when
it has remaining value, and if the market price of
 
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                      GT GLOBAL VARIABLE INVESTMENT FUNDS
the underlying  security  or currency  remains  equal  to or  greater  than  the
exercise  price during the life of the put option, the Fund will lose its entire
investment in the put option.  In order for the purchase  of a put option to  be
profitable, the market price of the underlying security or currency must decline
sufficiently  below  the exercise  price to  cover  the premium  and transaction
costs, unless the put option is sold in a closing sale transaction.
PURCHASING CALL OPTIONS
Each  Fund,  other  than  Money  Market  Fund,  may  purchase  call  options  on
securities,  currencies and (except for Strategic Income Fund, Global Government
Income Fund and U.S. Government Income Fund)  stock indices. As the holder of  a
call  option, a Fund would have the right to purchase the underlying security or
currency at  the  exercise  price at  any  time  until (American  style)  or  on
(European  style)  the  expiration date.  A  Fund  may enter  into  closing sale
transactions with respect to  such option, exercise such  option or permit  such
option to expire.
Call  options  may be  purchased  by a  Fund for  the  purpose of  acquiring the
underlying security or currency for its portfolio. Utilized in this fashion, the
purchase of call options would enable a Fund to acquire the security or currency
at the exercise price of the call option plus the premium paid. At times the net
cost of acquiring the security or currency  in this manner may be less than  the
cost  of acquiring the security or currency directly. This technique also may be
useful to the Funds in purchasing a large block of securities that would be more
difficult to acquire by direct market purchases. So long as it holds such a call
option, rather  than the  underlying  security or  currency  itself, a  Fund  is
partially  protected  from any  unexpected decline  in the  market price  of the
underlying security or currency and, in such event, could allow the call  option
to  expire, incurring  a loss  only to the  extent of  the premium  paid for the
option.
Each Fund also may purchase call options on underlying securities or  currencies
it  owns in order to protect unrealized gains on call options previously written
by  it.  A  call  option  could   be  purchased  for  this  purpose  where   tax
considerations  make  it inadvisable  to realize  such  gains through  a closing
purchase transaction.  Call options  also may  be purchased  at times  to  avoid
realizing  losses that would result  in a reduction of  a Fund's current return.
For example, where a Fund has written a call option on an underlying security or
currency having a current market value below the price at which it purchased the
security or  currency, an  increase in  the  market price  could result  in  the
exercise of the call option written by the Fund and the realization of a loss on
the underlying security or currency. Accordingly, the Fund could purchase a call
option  on the same underlying security or currency, which could be exercised to
fulfill the  Fund's  delivery obligations  under  its  written call  (if  it  is
exercised).  This strategy could  allow the Fund to  avoid selling the portfolio
security or currency at a time when it has an unrealized loss; however, the Fund
would have to pay a premium to purchase the call option plus transaction costs.
Aggregate premiums paid  for put  and call  options will  not exceed  5% of  the
Fund's total assets at the time of purchase.
Each  Fund may  attempt to  accomplish objectives  similar to  those involved in
using Forward Contracts by purchasing put  or call options on currencies. A  put
option  gives a Fund as  purchaser the right (but not  the obligation) to sell a
specified amount of currency at the  exercise price at any time until  (American
style)  or on (European style) the expiration  date of the option. A call option
gives a Fund  as purchaser  the right  (but not  the obligation)  to purchase  a
specified  amount of currency at the exercise  price at any time until (American
style) or on (European style)  the expiration date of  the option. A Fund  might
purchase a currency put option, for example, to protect itself against a decline
in  the dollar  value of  a currency  in which  it holds  or anticipates holding
securities. If the currency's value should decline against the dollar, the  loss
in  currency value should be offset, in whole  or in part, by an increase in the
value of the put. If the value  of the currency instead should rise against  the
dollar, any gain to the Fund would be reduced by the premium it had paid for the
put  option.  A  currency  call  option  might  be  purchased,  for  example, in
anticipation of, or to protect against, a  rise in the value against the  dollar
of a currency in which the Fund anticipates purchasing securities.
Options  may be either listed on an exchange or traded over-the-counter ("OTC").
Listed options are third-party contracts  (i.e., performance of the  obligations
of  the  purchaser  and  seller  is  guaranteed  by  the  exchange  or  clearing
corporation), and  have standardized  strike prices  and expiration  dates.  OTC
options  are two-party  contracts with  negotiated strike  prices and expiration
dates. A Fund  will not purchase  an OTC  option unless it  believes that  daily
valuations  for such  options are  readily obtainable.  OTC options  differ from
exchange-traded options in that OTC options are transacted with dealers directly
and  not  through  a   clearing  corporation  (which  guarantees   performance).
Consequently,  there  is  a risk  of  non-performance  by the  dealer.  Since no
exchange is involved, OTC options are valued  on the basis of an average of  the
last  bid prices, obtained from dealers, unless a quotation from only one dealer
is available, in which case only that  dealer's price will be used. In the  case
of  OTC options, there can  be no assurance that  a liquid secondary market will
exist for any particular option at any specific time.
 
                  Statement of Additional Information Page 22
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                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
The staff of the SEC considers purchased OTC options to be illiquid  securities.
A  Fund may also sell OTC options and, in connection therewith, segregate assets
or cover its obligations with  respect to OTC options  written by the Fund.  The
assets  used  as cover  for OTC  options written  by a  Fund will  be considered
illiquid unless the OTC options are sold to qualified dealers who agree that the
Fund may repurchase any OTC option it writes at a maximum price to be calculated
by a formula  set forth in  the option agreement.  The cover for  an OTC  option
written  subject  to this  procedure would  be considered  illiquid only  to the
extent that the maximum repurchase price under the formula exceeds the intrinsic
value of the option.
A Fund's ability to establish and close out positions in exchange-listed options
depends on the existence of  a liquid market. Each  Fund intends to purchase  or
write  only those exchange-traded options for which there appears to be a liquid
secondary market. However,  there can be  no assurance that  such a market  will
exist  at any particular time. Closing transactions  can be made for OTC options
only by negotiating directly with the contra  party, or by a transaction in  the
secondary  market if any such market exists.  Although each Fund will enter into
OTC options only with contra parties that are expected to be capable of entering
into closing transactions  with the Fund,  there is no  assurance that the  Fund
will  in fact be able to  close out an OTC option  position at a favorable price
prior to expiration. In the  event of insolvency of  the contra party, the  Fund
might  be unable to  close out an OTC  option position at any  time prior to its
expiration.
INDEX OPTIONS
Puts and calls on indices are similar to puts and calls on securities or futures
contracts except that all settlements  are in cash and  gain or loss depends  on
changes  in the index in question (and thus on price movements in the securities
market or a particular market sector  generally) rather than on price  movements
in  individual securities or futures contracts. When  a Fund writes a call on an
index, it receives a premium and agrees that, prior to the expiration date,  the
purchaser  of the call, upon exercise of the call, will receive from the Fund an
amount of cash if the closing level of the index upon which the call is based is
greater than the exercise price of the call. The amount of cash is equal to  the
difference  between the closing price of the index and the exercise price of the
call times a specified multiple  (the "multiplier"), which determines the  total
dollar  value for each point of  such difference. When a Fund  buys a call on an
index, it  pays a  premium  and has  the same  rights  as to  such call  as  are
indicated  above. When a Fund buys a put on  an index, it pays a premium and has
the right, prior to the expiration date, to require the seller of the put,  upon
the  Fund's exercise of the put, to deliver to the Fund an amount of cash if the
closing level of the index upon which the put is based is less than the exercise
price of the  put, which  amount of  cash is  determined by  the multiplier,  as
described  above for calls. When a Fund writes  a put on an index, it receives a
premium and  the purchaser  has the  right,  prior to  the expiration  date,  to
require  the Fund  to deliver to  it an amount  of cash equal  to the difference
between the  closing  level  of the  index  and  the exercise  price  times  the
multiplier, if the closing level is less than the exercise price.
The  risks  of  investment in  index  options  may be  greater  than  options on
securities. Because index options are settled in cash, when a Fund writes a call
on  an  index  it  cannot  provide  in  advance  for  its  potential  settlement
obligations  by  acquiring and  holding the  underlying  securities. A  Fund can
offset some of the  risk of writing  a call index option  position by holding  a
diversified  portfolio of  securities similar to  those on  which the underlying
index is based. However, a Fund cannot, as a practical matter, acquire and  hold
a portfolio containing exactly the same securities as underlie the index and, as
a  result, bears a risk that the value of the securities held will vary from the
value of the index.
Even if a Fund could assemble a securities portfolio that exactly reproduced the
composition of the underlying index, it still would not be fully covered from  a
risk  standpoint because of the "timing risk" inherent in writing index options.
When an  index option  is  exercised, the  amount of  cash  that the  holder  is
entitled  to receive is determined by  the difference between the exercise price
and the closing index level  on the date when the  option is exercised. As  with
other  kinds of options, the Fund  as the call writer will  not know that it has
been assigned until the next business day at the earliest. The time lag  between
exercise and notice of assignment poses no risk for the writer of a covered call
on  a  specific underlying  security, such  as common  stock, because  there the
writer's obligation is to deliver the underlying security, not to pay its  value
as  of  a fixed  time  in the  past.  So long  as  the writer  already  owns the
underlying security,  it  can  satisfy  its  settlement  obligations  by  simply
delivering  it, and the risk that its value may have declined since the exercise
date is borne by the  exercising holder. In contrast, even  if the writer of  an
index call holds securities that exactly match the composition of the underlying
index,  it will not be able to  satisfy its assignment obligations by delivering
those securities against  payment of  the exercise  price. Instead,  it will  be
required  to pay  cash in  an amount  based on  the closing  index value  on the
exercise date; and by the  time it learns that it  has been assigned, the  index
may  have declined, with a corresponding decline  in the value of its securities
portfolio. This "timing risk" is an inherent limitation on the ability of  index
call writers to cover their risk exposure by holding securities positions.
 
                  Statement of Additional Information Page 23
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                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
If  a Fund purchases an  index option and exercises  it before the closing index
value for  that day  is  available, it  runs  the risk  that  the level  of  the
underlying  index may subsequently change. If such a change causes the exercised
option to fall out-of-the-money, the Fund will be required to pay the difference
between the closing index value and the exercise price of the option (times  the
applicable multiplier) to the assigned writer.
INTEREST RATE, CURRENCY AND STOCK INDEX FUTURES CONTRACTS
The  Funds,  except for  Money  Market Fund,  may  enter into  interest  rate or
currency futures contracts,  and the  Funds, except for  Strategic Income  Fund,
Global  Government Income  Fund, U.S.  Government Income  Fund and  Money Market
Fund, may  enter  into stock  index  futures contracts  ("Futures"  or  "Futures
Contracts"),  as a hedge against changes in prevailing levels of interest rates,
currency exchange  rates  or stock  price  levels  in order  to  establish  more
definitely  the effective return on securities or currencies held or intended to
be acquired by the Funds. The Funds' hedging may include sales of Futures as  an
offset  against the effect of expected  increases in interest rates, or declines
in currency exchange rates or stock prices and purchases of futures as an offset
against the  effect of  expected  declines in  interest  rates or  increases  in
currency exchange rates or stock prices.
The  Funds only  will enter  into Futures Contracts  that are  traded on futures
exchanges and  are standardized  as to  maturity date  and underlying  financial
instrument.  Futures  exchanges and  trading thereon  in  the United  States are
regulated under  the Commodity  Exchange Act  by the  Commodity Futures  Trading
Commission ("CFTC"). Futures are exchanged in London at the London International
Financial Futures Exchange.
Although techniques other than sales and purchases of Futures Contracts could be
used  to reduce the Funds' exposure to  interest rate and currency exchange rate
fluctuations, a Fund may be able to hedge its exposure more effectively and at a
lower cost through using Futures Contracts.
A Futures Contract provides  for the future  sale by one  party and purchase  by
another party of a specified amount of a specific financial instrument (security
or currency) for a specified price at a designated date, time and place. A index
Futures  Contract  provides for  the delivery,  at a  designated date,  time and
place, of  an amount  of  cash equal  to a  specified  dollar amount  times  the
difference  between the index value at the  close of trading on the contract and
the price  at which  the  Futures Contract  is  originally struck;  no  physical
delivery  of the  securities comprising  the index  is made.  Brokerage fees are
incurred when a Futures Contract is bought or sold, and margin deposits must  be
maintained at all times during which the Futures Contract is outstanding.
Although  Futures Contracts typically require future delivery of and payment for
financial instruments or  currencies, Futures Contracts  usually are closed  out
before  the delivery date. Closing out an open Futures Contract sale or purchase
is effected by entering  into an offsetting Futures  Contract purchase or  sale,
respectively,   for  the  same  aggregate  amount  of  the  identical  financial
instrument or currency and  the same delivery date.  If the offsetting  purchase
price  is less than the original sale price,  the Fund realizes a gain; if it is
more, the Fund realizes a loss. Conversely, if the offsetting sale price is more
than the original purchase price, the Fund  realizes a gain; if it is less,  the
Fund  realizes a  loss. The  transaction costs  also must  be included  in these
calculations. There can be no assurance, however, that the Funds will be able to
enter into  an  offsetting transaction  with  respect to  a  particular  Futures
Contract at a particular time. If a Fund is not able to enter into an offsetting
transaction,  the  Fund will  continue  to be  required  to maintain  the margin
deposits on the Futures Contract.
As an example of an offsetting transaction, the contractual obligations  arising
from  the sale of one Futures Contract  of September deutschmarks on an exchange
may be  fulfilled at  any time  before delivery  under the  Futures Contract  is
required  (i.e., on a specified date in  September, the "delivery month") by the
purchase of  another Futures  Contract  of September  deutschmarks on  the  same
exchange.  In  such instance,  the  difference between  the  price at  which the
Futures Contract was sold and the price paid for the offsetting purchase,  after
allowance for transaction costs, represents the profit or loss to the Fund.
The  Funds'  Futures transactions  generally will  be  entered into  for hedging
purposes, except  as  discussed below  under  "Synthetic Securities";  that  is,
Futures  Contracts will  be sold to  protect against  a decline in  the price of
securities or  currencies  that  a  Fund owns,  or  Futures  Contracts  will  be
purchased to protect the Funds against an increase in the price of securities or
currencies it has committed to purchase or expects to purchase.
"Margin"  with respect to Futures Contracts is  the amount of funds that must be
deposited by a Fund  in order to  initiate Futures trading  and to maintain  the
Fund's  open  positions in  Futures Contracts.  A margin  deposit made  when the
Futures Contract is entered  into ("initial margin") is  intended to ensure  the
Fund's  performance  under  the  Futures Contract.  The  margin  required  for a
particular Futures Contract is set by the exchange on which the Futures Contract
is traded and may be  significantly modified from time  to time by the  exchange
during the term of the Futures Contract.
 
                  Statement of Additional Information Page 24
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                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
Subsequent  payments,  called  "variation  margin,"  to  and  from  the  futures
commission merchant through  which the  Fund entered into  the Futures  Contract
will  be made on a daily basis as the price of the underlying security, currency
or index fluctuates making the Futures Contract more or less valuable, a process
known as marking-to-market.
    RISKS OF  USING  FUTURES CONTRACTS.  The  prices of  Futures  Contracts  are
volatile  and  are influenced  by, among  other  things, actual  and anticipated
changes in interest and currency rates, which in turn are affected by fiscal and
monetary policies and national and international political and economic events.
There is a risk  of imperfect correlation between  changes in prices of  Futures
Contracts  and prices of  the Fund's securities or  currencies being hedged. The
degree of  imperfection  of  correlation depends  upon  circumstances  such  as:
variations  in  speculative  market demand  for  Futures and  for  securities or
currencies, including technical influences  in Futures trading; and  differences
between  the financial instruments  being hedged and  the instruments underlying
the standard Futures  Contracts available  for trading. A  decision of  whether,
when  and how to  hedge involves skill  and judgment, and  even a well-conceived
hedge may be unsuccessful to some  degree because of unexpected market  behavior
or interest or currency rate trends.
Because  of  the  low  margin deposits  required,  Futures  trading  involves an
extremely high  degree  of leverage.  As  a  result, a  relatively  small  price
movement  in a Futures Contract may result in immediate and substantial loss, as
well as gain, to the investor. For example,  if at the time of purchase, 10%  of
the  value of  the Futures  Contract is  deposited as  margin, a  subsequent 10%
decrease in the value of  the Futures Contract would result  in a total loss  of
the  margin  deposit, before  any deduction  for the  transaction costs,  if the
account were then closed  out. A 15%  decrease would result in  a loss equal  to
150%  of the original margin  deposit, if the Futures  Contract were closed out.
Thus, a purchase or sale of a Futures Contract may result in losses in excess of
the amount invested in the Futures Contract.
Most U.S. futures exchanges limit the amount of fluctuation permitted in Futures
Contract and option on Futures Contract prices during a single trading day.  The
daily  limit establishes the maximum amount that the price of a Futures Contract
or option may vary either up or down from the previous day's settlement price at
the end  of a  trading session.  Once  the daily  limit has  been reached  in  a
particular type of Futures Contract or option, no trades may be made on that day
at a price beyond that limit. The daily limit governs only price movement during
a  particular trading day and therefore does not limit potential losses, because
the limit may prevent the liquidation of unfavorable positions. Futures Contract
and option  prices  occasionally have  moved  to  the daily  limit  for  several
consecutive  trading days with  little or no  trading, thereby preventing prompt
liquidation of positions and subjecting some traders to substantial losses.
If a Fund were unable to liquidate  a Futures or option on Futures position  due
to  the absence of a liquid secondary  market or the imposition of price limits,
it could incur  substantial losses.  The Fund would  continue to  be subject  to
market  risk with respect  to the position.  In addition, except  in the case of
purchased options,  the  Fund  would  continue to  be  required  to  make  daily
variation  margin payments and might be  required to maintain the position being
hedged by the Future or option or to maintain cash or securities in a segregated
account.
Certain characteristics  of the  Futures  market might  increase the  risk  that
movements  in the prices  of Futures Contracts  or options on  Futures might not
correlate perfectly  with  movements in  the  prices of  the  investments  being
hedged.  For example,  all participants  in the  Futures and  options on Futures
markets are subject to  daily variation margin calls  and might be compelled  to
liquidate  Futures  or  options on  Futures  positions whose  prices  are moving
unfavorably to avoid being  subject to further  calls. These liquidations  could
increase  price  volatility  of the  instruments  and distort  the  normal price
relationship between the Futures  or options and  the investments being  hedged.
Also,  because of initial margin deposit  requirements in the Futures market are
less onerous than margin requirements in the securities markets, there might  be
increased   participation   by  speculators   in   the  Futures   markets.  This
participation  also  might  cause  temporary  price  distortions.  In  addition,
activities of large traders in both the Futures and securities markets involving
arbitrage,  "program trading"  and other  investment strategies  might result in
temporary price distortions.
OPTIONS ON FUTURES CONTRACTS
Options on Futures Contracts are similar to options on securities or  currencies
except that options on Futures Contracts give the purchaser the right, in return
for  the  premium paid,  to  assume a  position in  a  Futures Contract  (a long
position if the option is a call and short position if the option is a put) at a
specified exercise  price at  any time  during the  period of  the option.  Upon
exercise  of the option, the  delivery of the Futures  position by the writer of
the option to the holder  of the option will be  accompanied by delivery of  the
accumulated balance in the writer's Futures margin account, which represents the
amount  by which the market price of  the Futures Contract, at exercise, exceeds
(in the case of  a call) or  is less than (in  the case of  a put) the  exercise
price  of the option on  the Futures Contract. If an  option is exercised on the
last trading day prior to the expiration date of the option, the settlement will
be made entirely in cash equal to the difference
 
                  Statement of Additional Information Page 25
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                      GT GLOBAL VARIABLE INVESTMENT FUNDS
between the  exercise  price  of  the  option  and  the  closing  level  of  the
securities,  currencies or index upon which the Futures Contract is based on the
expiration date. Purchasers of options who fail to exercise their options  prior
to the exercise date suffer a loss of the premium paid.
The  purchase of  call options  on Futures can  serve as  a long  hedge, and the
purchase of put  options on Futures  can serve  as a short  hedge. Writing  call
options  on Futures can serve as a  limited short hedge, and writing put options
on Futures can serve as a limited  long hedge, using a strategy similar to  that
used for writing options on securities, foreign currencies or indices.
If a Fund writes an option on a Futures Contract, it will be required to deposit
initial   and  variation  margin  pursuant  to  requirements  similar  to  those
applicable to Futures Contracts. Premiums received from the writing of an option
on a Futures Contract are included in the initial margin deposit.
A Fund may seek to  close out an option position  by selling an option  covering
the  same Futures  Contract and  having the  same exercise  price and expiration
date. The  ability to  establish and  close  out positions  on such  options  is
subject to the maintenance of a liquid secondary market.
LIMITATION  ON  USE  OF  FUTURES,  OPTIONS ON  FUTURES  AND  CERTAIN  OPTIONS ON
CURRENCIES
To the extent  that a  Fund enters into  Futures Contracts,  options on  Futures
Contracts,  and  options  on  foreign  currencies  traded  on  a  CFTC-regulated
exchange, in each case other than for bona fide hedging purposes (as defined  by
the CFTC), the aggregate initial margin and premiums required to establish those
positions  (excluding the amount  by which options  are "in-the-money") will not
exceed 5% of  the liquidation  value of a  Fund's portfolio,  after taking  into
account  unrealized profits and unrealized losses  on any contracts the Fund has
entered into. In general, a call option on a Futures Contract is  "in-the-money"
if  the  value of  the  underlying Futures  Contract  exceeds the  strike, i.e.,
exercise,  price  of  the  call;  a   put  option  on  a  Futures  Contract   is
"in-the-money"  if the value  of the underlying Futures  Contract is exceeded by
the strike price of the  put. This guideline may  be modified by each  Company's
Board of Trustees without a shareholder vote. This limitation does not limit the
percentage of a Fund's assets at risk to 5%.
FORWARD CONTRACTS
A  Forward Contract is an obligation, usually arranged with a commercial bank or
other currency dealer, to purchase or  sell a currency against another  currency
at  a future date  and price as  agreed upon by  the parties. A  Fund may either
accept or make delivery of the currency at the maturity of the Forward Contract.
A Fund may also,  if its contra  party agrees, prior to  maturity, enter into  a
closing transaction involving the purchase or sale of an offsetting contract.
A  Fund  engages in  forward  currency transactions  in  anticipation of,  or to
protect itself against,  fluctuations in  exchange rates.  A Fund  might sell  a
particular   foreign  currency  forward,  for   example,  when  it  holds  bonds
denominated in a  foreign currency but  anticipates, and seeks  to be  protected
against,  a decline in the  currency against the U.S.  dollar. Similarly, a Fund
might sell  the U.S.  dollar forward  when it  holds bonds  denominated in  U.S.
dollars  but anticipates, and  seeks to be  protected against, a  decline in the
U.S. dollar  relative to  other currencies.  Further, a  Fund might  purchase  a
currency  forward  to "lock  in"  the price  of  securities denominated  in that
currency that it anticipates purchasing.
Forward Contracts are traded in the interbank market conducted directly  between
currency traders (usually large commercial banks) and their customers. A Forward
Contract generally has no deposit requirement, and no commissions are charged at
any  stage for trades. A Fund will  enter into such Forward Contracts with major
U.S. or foreign  banks and  securities or  currency dealers  in accordance  with
guidelines approved by that Company's Board of Trustees.
A  Fund  may  enter  into  Forward Contracts  either  with  respect  to specific
transactions or with respect to the overall investments of the Fund. The precise
matching of the Forward  Contract amounts and the  value of specific  securities
generally  will not be possible  because the future value  of such securities in
foreign currencies will change as a consequence of market movements in the value
of those securities between  the date the Forward  Contract is entered into  and
the  date it matures.  Accordingly, it may  be necessary for  a Fund to purchase
additional foreign  currency on  the  spot (i.e.,  cash)  market (and  bear  the
expense  of such purchase) if the market value  of the security is less than the
amount of foreign currency the Fund is obligated to deliver and if a decision is
made to sell the security and make delivery of the foreign currency. Conversely,
it may be necessary to sell on the spot market some of the foreign currency  the
Fund  is  obligated to  deliver. The  projection  of short-term  currency market
movements is extremely difficult, and  the successful execution of a  short-term
hedging  strategy is highly  uncertain. Forward Contracts  involve the risk that
anticipated currency movements will not be predicted accurately, causing a  Fund
to sustain losses on such contracts and transaction costs.
At  or before  the maturity  of a Forward  Contract requiring  a Fund  to sell a
currency, the Fund may either sell a security and use the sale proceeds to  make
delivery  of  the currency  or retain  the security  and offset  its contractual
obligation to deliver
 
                  Statement of Additional Information Page 26
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                      GT GLOBAL VARIABLE INVESTMENT FUNDS
the currency by  purchasing a second  contract pursuant to  which the Fund  will
obtain,  on the same maturity  date, the same amount of  the currency that it is
obligated to  deliver.  Similarly, a  Fund  may  close out  a  Forward  Contract
requiring  it  to  purchase  a  specified currency  by  entering  into  a second
contract, if its contra party  agrees, entitling it to  sell the same amount  of
the  same currency on  the maturity date  of the first  contract. The Fund would
realize a gain or loss as a  result of entering into such an offsetting  Forward
Contract  under either  circumstance to  the extent  the exchange  rate or rates
between the currencies involved moved between  the execution dates of the  first
Forward Contract and the offsetting Forward Contract.
The  cost to a Fund of engaging in Forward Contracts varies with factors such as
the currencies  involved, the  length  of the  contract  period and  the  market
conditions  then prevailing. Because Forward  Contracts usually are entered into
on a principal basis, no  fees or commissions are  involved. The use of  Forward
Contracts  does  not  eliminate fluctuations  in  the prices  of  the underlying
securities a Fund owns or  intends to acquire, but it  does establish a rate  of
exchange in advance. In addition, while Forward Contracts limit the risk of loss
due  to a  decline in the  value of the  hedged currencies, they  also limit any
potential gain that might result should the value of the currencies increase.
FOREIGN CURRENCY STRATEGIES -- SPECIAL CONSIDERATIONS
A Fund may  use options on  foreign currencies, Futures  on foreign  currencies,
options on Futures on foreign currencies and Forward Contracts, to hedge against
movements in the values of the foreign currencies in which the Fund's securities
are  denominated. Such currency hedges can  protect against price movements in a
security that  the Fund  owns or  intends to  acquire that  are attributable  to
changes  in the value of the currency in which it is denominated. Such hedges do
not, however,  protect  against  price  movements in  the  securities  that  are
attributable to other causes.
A Fund might seek to hedge against changes in the value of a particular currency
when  no Futures Contract, Forward Contract or option involving that currency is
available or  one  of  such  contracts is  more  expensive  than  certain  other
contracts.  In such cases,  the Fund may  hedge against price  movements in that
currency  by  entering  into  a  contract  on  another  currency  or  basket  of
currencies,  the values of  which the Sub-advisor believes  will have a positive
correlation to the value of the  currency being hedged. The risk that  movements
in  the price of the contract will not correlate perfectly with movements in the
price of the currency being hedged is magnified when this strategy is used.
The value of Futures Contracts, options on Futures Contracts, Forward  Contracts
and  options  on  foreign currencies  depends  on  the value  of  the underlying
currency relative  to the  U.S. dollar.  Because foreign  currency  transactions
occurring  in the  interbank market  might involve  substantially larger amounts
than those  involved in  the  use of  Futures  Contracts, Forward  Contracts  or
options,  a  Fund  could be  disadvantaged  by  dealing in  the  odd  lot market
(generally  consisting  of  transactions  of  less  than  $1  million)  for  the
underlying  foreign currencies at prices that  are less favorable than for round
lots.
There is no systematic reporting of last sale information for foreign currencies
or any  regulatory requirements  that quotations  available through  dealers  or
other market sources be firm or revised on a timely basis. Quotation information
generally  is representative of very large  transactions in the interbank market
and thus  might not  reflect  odd-lot transactions  where  rates might  be  less
favorable.   The   interbank  market   in  foreign   currencies  is   a  global,
round-the-clock market. To the  extent the U.S. options  or Futures markets  are
closed  while the markets for the underlying currencies remain open, significant
price and rate movements might take place in the underlying markets that  cannot
be  reflected in  the markets  for the Futures  contracts or  options until they
reopen.
Settlement of Futures Contracts, Forward Contracts and options involving foreign
currencies might  be required  to  take place  within  the country  issuing  the
underlying  currency. Thus, a Fund might be  required to accept or make delivery
of the  underlying foreign  currency  in accordance  with  any U.S.  or  foreign
regulations  regarding the maintenance  of foreign banking  arrangements by U.S.
residents and might be  required to pay any  fees, taxes and charges  associated
with such delivery assessed in the issuing country.
COVER
Transactions  using Forward Contracts, Futures Contracts and options (other than
options purchased by a Fund) expose the Fund to an obligation to another  party.
A  Fund will not enter  into any such transactions unless  it owns either (1) an
offsetting ("covered")  position in  securities, currencies,  or other  options,
Forward  Contracts or Futures Contracts, or (2) cash, receivables and short-term
debt securities with  a value  sufficient at all  times to  cover its  potential
obligations not covered as provided in (1) above. Each Fund will comply with SEC
guidelines  regarding  cover for  these instruments  and,  if the  guidelines so
require, set aside cash or liquid securities.
Assets used as cover or  held in a segregated account  cannot be sold while  the
position  in the corresponding  Forward Contract, Futures  Contract or option is
open, unless they are replaced with other appropriate assets. If a large portion
of a
 
                  Statement of Additional Information Page 27
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
Fund's assets  is  used  for cover  or  otherwise  set aside,  it  could  affect
portfolio  management or the Fund's ability to meet redemption requests or other
current obligations.
SYNTHETIC SECURITY POSITIONS
Global Government Income Fund and Strategic Income Fund, each may utilize, up to
5% of its total  assets, combinations of futures  on bonds and forward  currency
contracts  to  create  investment  positions that  have  substantially  the same
characteristics as  bonds  of  the same  type  as  those on  which  the  futures
contracts  are written. Investment positions of this type are generally referred
to as "synthetic securities."
For example, in order to establish a synthetic security position for a Fund that
is comparable  to  owning a  Japanese  government bond,  the  Sub-advisor  might
purchase futures contracts on Japanese government bonds in the desired principal
amount  and purchase  forward currency contracts  for Japanese Yen  in an amount
equal to the then  current purchase price  for such bonds  in the Japanese  cash
market, with each contract having approximately the same delivery date.
AIM  and/or the  sub-advisors might roll  over the futures  and forward currency
contract positions  before  taking delivery  in  order to  continue  the  Fund's
investment  position,  or  AIM and/or  the  sub-advisors might  close  out those
positions, thus effectively selling the synthetic security. Further, the  amount
of  each contract  might be  adjusted in response  to market  conditions and the
forward currency contract might be changed  in amount or eliminated in order  to
hedge against currency fluctuations.
Further,  while these futures and currency contracts remain open, the Funds will
comply with  applicable  SEC  guidelines  to set  aside  cash,  U.S.  government
securities  or other liquid  high grade debt securities  in a segregated account
with its custodian in  an amount sufficient to  cover its potential  obligations
under such contracts.
AIM and/or the sub-advisors would create synthetic security positions for a Fund
when  it believes that it  can obtain a better yield  or achieve cost savings in
comparison to purchasing actual bonds or  when comparable bonds are not  readily
available  in the market.  Synthetic security positions are  subject to the risk
that changes in the value of purchased futures contracts may differ from changes
in the value of the bonds that  might otherwise have been purchased in the  cash
market.
Also,  while  AIM and/or  the sub-advisors  believes that  the cost  of creating
synthetic security positions generally will be materially lower than the cost of
acquiring comparable bonds  in the cash  market, a Fund  will incur  transaction
costs  in  connection  with  each  purchase of  a  futures  or  forward currency
contract. The use of futures contracts and forward currency contracts to  create
synthetic  security positions also is subject to substantially the same risks as
those that exist  when these  instruments are  used in  connection with  hedging
strategies.
INTEREST RATE AND CURRENCY SWAPS
Strategic  Income Fund may  enter into interest rate,  currency and index swaps,
and purchase  or sell  related caps,  floors and  collars and  other  derivative
instruments.  Strategic  Income Fund  expects to  enter into  these transactions
primarily to preserve a return or  spread on a particular investment or  portion
of  its portfolio, to protect against  currency fluctuations, as a technique for
managing the portfolio's  duration (i.e.,  the price sensitivity  to changes  in
interest rates) or to protect against any increase in the price of securities it
anticipates  purchasing at  a later date.  Strategic Income Fund  intends to use
these transactions as hedges, and will not sell interest rate caps or floors  if
it  does  not own  securities or  other instruments  providing an  income stream
roughly equivalent to what it may become obligated to pay.
Interest rate swaps involve the exchange  by Strategic Income Fund with  another
party  of their respective commitments to  pay or receive interest (for example,
an exchange of floating rate payments for fixed rate payments) with respect to a
notional amount of principal. A currency  swap is an agreement to exchange  cash
flows  on a  notional amount  based on  changes in  the values  of the reference
indices.
The purchase of a cap entitles the  purchaser to receive payments on a  notional
principal  amount from the party selling the  cap to the extent that a specified
index exceeds a predetermined  interest rate. The purchase  of an interest  rate
floor  entitles  the purchaser  to receive  payments of  interest on  a notional
principal amount from the  party selling the interest  rate floor to the  extent
that  a specified index falls  below a predetermined interest  rate or amount. A
collar is a combination  of a cap  and a floor that  preserves a certain  return
with a predetermined range of interest rates or values.
Strategic Income Fund usually will enter into swaps on a net basis, that is, the
two  payment streams are netted out in a  cash settlement on the payment date or
dates specified in the instrument, with  the Fund's receiving or paying, as  the
case  may be, only  the net amount  of the two  payments. The net  amount of the
excess, if any,  of Strategic  Income Fund's obligations  over its  entitlements
with  respect to each swap, will  be accrued on a daily  basis, and an amount of
cash or liquid securities having an aggregate net asset value at least equal  to
the   accrued  excess,  will  be  maintained   in  an  account  by  a  custodian
 
                  Statement of Additional Information Page 28
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                      GT GLOBAL VARIABLE INVESTMENT FUNDS
that satisfies the requirement of the 1940 Act. Strategic Income Fund will  also
establish  and  maintain  such segregated  accounts  with respect  to  its total
obligations under any swaps that  are not entered into on  a net basis and  with
respect  to any  caps or  floors that are  written by  the Fund.  AIM and/or the
Fund's sub-advisor and Strategic Income Fund believe that swaps, caps and floors
do not constitute senior  securities under the 1940  Act and, accordingly,  will
not treat them as being subject to the Fund's borrowing restrictions.
Strategic  Income Fund will not enter into any swap, cap, floor, collar or other
derivative transaction unless, at the time of entering into the transaction, the
unsecured long-term debt  rating of  the counterparty combined  with any  credit
enhancements  is rated at least A by Moody's Investors Service, Inc. ("Moody's")
or Standard & Poor's, a division of The McGraw-Hill Companies ("S&P"), or has an
equivalent rating from a  nationally recognized statistical rating  organization
or  is determined to  be of equivalent  credit quality by  AIM and/or the Fund's
sub-advisor.  If  a  counterparty  defaults,  Strategic  Income  Fund  may  have
contractual remedies pursuant to the agreements related to the transactions. The
swap  market has  grown substantially  in recent years,  with a  large number of
banks and  investment banking  firms acting  both as  principals and  as  agents
utilizing  standardized swap  documentation. As  a result,  the swap  market has
become relatively liquid. Caps, floors  and collars are more recent  innovations
for  which standardized documentation has not yet been fully developed, and, for
that reason, they are less liquid than swaps.
 
- --------------------------------------------------------------------------------
                                  RISK FACTORS
- --------------------------------------------------------------------------------
Equity securities,  particularly common  stocks,  generally represent  the  most
junior  position  in an  issuer's capital  structure and  entitle holders  to an
interest in the assets  of an issuer,  if any, remaining  after all more  senior
claims are satisfied.
RISK FACTORS OF SPECIFIC FUNDS
    NEW  PACIFIC FUND. Certain  countries, such as  India, face serious exchange
constraints. Jurisdictional disputes  also exist between  South Korea and  North
Korea.  In addition,  Hong Kong  reverted to  Chinese administration  on July 1,
1997. The  long-term effects  of this  reversion  are not  known at  this  time.
However,  the Fund's investments in Hong Kong may  now be subject to the same or
similar risks as any  investment in China. Investments  in Hong Kong may  become
subject  to expropriation, nationalization,  or confiscation, in  which case the
Fund could lose its entire investment  in Hong Kong. In addition, the  reversion
of Hong Kong also presents a risk that the Hong Kong dollar will be devalued and
a  risk of possible loss  of investor confidence in  Hong Kong's currency, stock
market, and economy.
    INFRASTRUCTURE FUND. Prices of securities of smaller companies in which  the
Fund  invests may fluctuate to a greater degree than the prices of securities of
other issuers.
The nature  of political,  environmental and  other government  regulation  over
infrastructure  companies continues to  evolve in both the  United States and in
foreign  countries,  and  changes  in  governmental  policy  and  the  need  for
regulatory  approvals may  have a material  effect on the  products and services
offered by companies in the infrastructure industries. Electric, gas, water  and
most  telecommunications companies in the U.S., for example, are subject to both
federal and state regulation affecting permitted  rates of return and the  kinds
of services that may be offered.
Many  infrastructure  companies have  been subject  to  risks attendant  to high
interest on  borrowed funds  and  changes in  the regulatory  climate.  Further,
competition  is intense for  many of the infrastructure  companies. As a result,
many of  these  companies may  be  adversely affected  in  the future  and  such
companies  may be subject to increased share price volatility. In addition, many
companies have  diversified into  oil and  gas exploration  and development  and
therefore  returns may be more sensitive  to energy prices. Other infrastructure
companies, such as water supply  companies, are in highly fragmented  industries
due   to  local  ownership.  Generally,  these  companies  are  mature  and  are
experiencing little or no growth.
    NATURAL RESOURCES FUND.  The nature  of political,  environmental and  other
government  regulation over natural  resources companies continues  to evolve in
both the United  States and in  foreign countries, and  changes in  governmental
policy  and the need for regulatory approvals  may have a material effect on the
products and services offered by companies in the natural resources  industries.
For  example, the exploration, development and distribution of coal, oil and gas
in the United States  are subject to significant  federal and state  regulation,
which  may affect rates of return on  such investments and the kinds of services
that may be offered.
 
                  Statement of Additional Information Page 29
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
Competition is intense for many natural  resources companies. As a result,  many
of  these companies may be adversely affected in the future and the value of the
securities by such companies may be subject to increased share price volatility.
Such companies may also be subject to irregular fluctuations in earnings due  to
changes  in the availability  of money, the  level of interest  rates, and other
factors.
The value  of  securities  of  natural resources  companies  will  fluctuate  in
response  to market conditions  for the particular  natural resources with which
the issuers are involved. The price  of natural resources will fluctuate due  to
changes  in worldwide levels of inventory,  and changes, perceived or actual, in
production  and  consumption.  With  respect  to  precious  metals,  such  price
fluctuations  may be  substantial over short  periods of time.  In addition, the
value of natural resources may fluctuate directly with respect to various stages
of the inflationary cycle and perceived  inflationary trends and are subject  to
numerous factors, including national and international politics.
    TELECOMMUNICATIONS  FUND. An  example of  the regulatory  environment of the
companies in which the Funds invests is that of telephone operating companies in
the United  States, which  are  subject to  both  federal and  state  regulation
affecting  permitted  rates of  return and  the  kinds of  services that  may be
offered. Certain  types  of companies  in  the telecommunications  industry  are
engaged  in fierce competition  for market share that  could result in increased
share price volatility.
    MONEY MARKET FUND. In periods of declining interest rates, the Fund's  yield
will  tend to  be somewhat higher  than prevailing market  rates; conversely, in
periods of rising  interest rates,  the Fund's yield  will tend  to be  somewhat
lower  than those rates.  Also, when interest  rates are falling,  the new money
flowing into the Fund from the net sale of its shares likely will be invested by
the Fund  in  instruments  producing  lower  yields  than  the  balance  of  the
securities  held  by  the  Fund's portfolio,  thereby  reducing  its  yield. The
opposite generally will be true in periods of rising interest rates. The Fund is
designed to provide  maximum current  income consistent with  the liquidity  and
safety  afforded  by investment  in  a portfolio  of  high quality  money market
instruments; the Fund's yield may be lower than that produced by funds investing
in lower quality and/or longer-term securities.
ILLIQUID SECURITIES
Each Fund may invest up to 15% of its net assets (except for Money Market  Fund,
which may invest up to 10% of its net assets) in illiquid securities. Securities
may  be considered illiquid if a Fund cannot reasonably expect within seven days
to sell the  securities for approximately  the amount at  which the Fund  values
such  securities. See "Investment Limitations."  The sale of illiquid securities
if they can  be sold  at all,  generally will require  more time  and result  in
higher brokerage charges or dealer discounts and other selling expenses than the
sale  of liquid securities such as securities eligible for trading on securities
exchanges or  in OTC  markets.  Moreover, restricted  securities, which  may  be
illiquid  for purposes  of this limitation,  often sell,  if at all,  at a price
lower than similar securities that are not subject to restrictions on resale.
Illiquid securities include those that are subject to restrictions contained  in
the  securities laws  of other  countries. However,  securities that  are freely
marketable in the country  where they are principally  traded, but would not  be
freely  marketable in the United States,  will not be considered illiquid. Where
registration is required, the Fund  may be obligated to pay  all or part of  the
registration  expenses and a considerable period  may elapse between the time of
the decision to sell and the time the  Fund may be permitted to sell a  security
under  an effective  registration statement. If,  during such  a period, adverse
market conditions were to develop, the Fund might obtain a less favorable  price
than prevailed when it decided to sell.
Not   all  restricted  securities   are  illiquid.  In   recent  years  a  large
institutional  market  has  developed  for  certain  securities  that  are   not
registered  under the Securities Act of 1933, as amended ("1933 Act"), including
private placements, repurchase agreements, commercial paper, foreign  securities
and corporate bonds and notes. These instruments are often restricted securities
because  the  securities are  sold in  transactions not  requiring registration.
Institutional investors generally will not seek to sell these instruments to the
general  public,  but  instead  will   often  depend  either  on  an   efficient
institutional market in which such unregistered securities can be readily resold
or  on an issuer's ability to honor  a demand for repayment. Therefore, the fact
that there are contractual or legal restrictions on resale to the general public
or certain institutions is not dispositive of the liquidity of such investments.
Rule 144A under the 1933 Act  establishes a "safe harbor" from the  registration
requirements  of the  1933 Act  for resales  of certain  securities to qualified
institutional buyers.  Institutional  markets  for  restricted  securities  have
developed  as a result of Rule 144A, providing both readily ascertainable values
for restricted securities and the ability to liquidate an investment to  satisfy
share  redemption orders. Such  markets might include  automated systems for the
trading, clearance and  settlement of  unregistered securities  of domestic  and
foreign issuers, such as the PORTAL System sponsored by the National Association
of  Securities Dealers, Inc.  An insufficient number  of qualified institutional
buyers interested in
 
                  Statement of Additional Information Page 30
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
purchasing Rule 144A-eligible restricted securities held by the Funds,  however,
could  affect adversely the  marketability of such  portfolio securities and the
Funds might be  unable to dispose  of such securities  promptly or at  favorable
prices.
With  respect to liquidity determinations generally, a Trust's Board of Trustees
has the  ultimate responsibility  for determining  whether specific  securities,
including  restricted securities pursuant  to Rule 144A under  the 1933 Act, are
liquid or illiquid. Each Board has  delegated the function of making  day-to-day
determinations  of liquidity to AIM and/or  the sub-advisors, in accordance with
procedures approved by that Board. AIM and/or the sub-advisors take into account
a number of factors in reaching liquidity decisions, including, but not  limited
to:  (i) the frequency  of trading in  the security; (ii)  the number of dealers
that make  quotes  for  the security;  (iii)  the  number of  dealers  who  have
undertaken  to make a market in the security; (iv) the number of other potential
purchasers; and  (v) the  nature of  the security  and how  trading is  effected
(e.g.,  the time needed to sell the  security, how offers are solicited, and the
mechanics of transfer).  AIM and/or  the sub-advisors monitor  the liquidity  of
securities  held by each Fund and periodically report such determinations to the
Trusts' Boards of Trustees. If the liquidity percentage restriction of a Fund is
satisfied at  the time  of investment,  a later  increase in  the percentage  of
illiquid  securities held by the Fund resulting from a change in market value or
assets will not constitute a violation of that restriction. If as a result of  a
change  in market value or assets, the percentage of illiquid securities held by
the Fund increases above the applicable limit, AIM and/or the sub-advisors  will
take  appropriate steps  to bring the  aggregate amount of  illiquid assets back
within the prescribed limitations as soon as reasonably practicable, taking into
account the effect of any disposition on the Fund.
Infrastructure Fund, Natural Resources  Fund, Telecommunications Fund and  Latin
America  Fund may invest in joint ventures, cooperatives, partnerships and state
enterprises which are illiquid (collectively, "Special Situations"). AIM and/ or
the sub-advisors believe that investments  by these Funds in Special  Situations
could  enable them to  achieve capital appreciation  substantially exceeding the
appreciation each  Fund would  realize  if it  did  not make  such  investments.
However,  in order to limit investment risk,  each of these Funds will invest no
more than 5% of its total assets in Special Situations.
FOREIGN SECURITIES
    POLITICAL, SOCIAL AND  ECONOMIC RISKS. Investing  in securities of  non-U.S.
companies may entail additional risks due to the potential political, social and
economic  instability  of  certain  countries and  the  risks  of expropriation,
nationalization, confiscation  or  the  imposition of  restrictions  on  foreign
investment;  convertibility of currencies into  U.S. dollars and on repatriation
of capital  invested. In  the event  of such  expropriation, nationalization  or
other  confiscation by any country,  a Fund could lose  its entire investment in
any  such  country.  Individual  foreign  economies  may  differ  favorably   or
unfavorably  from the U.S. economy in such  respects as growth of gross national
product, rates of inflation, rates of savings and capital reinvestment, resource
self sufficiency and balance of payments positions.
    RELIGIOUS, POLITICAL, OR  ETHNIC INSTABILITY. Certain  countries in which  a
Fund may invest may have groups that advocate radical religious or revolutionary
philosophies or support ethnic independence. Any disturbance on the part of such
individuals could carry the potential for widespread destruction or confiscation
of  property owned by individuals and entities foreign to such country and could
cause the loss of a Fund's  investment in those countries. Instability may  also
result  from,  among other  things:  (i) authoritarian  governments  or military
involvement in  political and  economic  decision-making, including  changes  in
government  through extra-constitutional  means; (ii)  popular unrest associated
with demands for improved political,  economic and social conditions; and  (iii)
hostile  relations with neighboring  or other countries.  Such political, social
and economic instability could disrupt the principal financial markets in  which
the Fund invests and adversely affect the value of a Fund's assets.
    FOREIGN  INVESTMENT  RESTRICTIONS.  Certain  countries  prohibit  or  impose
substantial restrictions on investments  in their capital markets,  particularly
their  equity markets, by foreign entities such as a Fund. These restrictions or
controls may at times limit or preclude investment in certain securities and may
increase the cost and expenses of a Fund. For example, certain countries require
prior governmental approval before to investments by foreign persons maybe made,
or may limit the amount of investment by foreign persons in a particular company
or limit  the  investment  by  foreign  persons to  only  a  specific  class  of
securities of a company that may have less advantageous terms than securities of
the company available for purchase by nationals. Moreover, the national policies
of  certain  countries  may  restrict  investment  opportunities  in  issuers or
industries deemed sensitive to national  interests. In addition, some  countries
require governmental approval for the repatriation of investment income, capital
or  the proceeds of securities sales by foreign investors. In addition, if there
is a deterioration in a  country's balance of payments  or for other reasons,  a
country  may impose restrictions  on foreign capital  remittances abroad. A Fund
could be adversely affected by  delays in, or a  refusal to grant, any  required
governmental  approval for repatriation, as well as  by the application to it of
other restrictions on investments.
 
                  Statement of Additional Information Page 31
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                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
    NON-UNIFORM CORPORATE DISCLOSURE STANDARDS AND GOVERNMENTAL
REGULATION. Foreign companies are subject to accounting, auditing and  financial
standards  and requirements that differ, in some cases significantly, from those
applicable to U.S. companies. In particular, the assets, liabilities and profits
appearing on the  financial statements  of such a  company may  not reflect  its
financial  position or results of operations in  the way they would be reflected
had such financial statements  been prepared in  accordance with U.S.  generally
accepted  accounting principles. Most  of the foreign securities  held by a Fund
will not be registered with  the SEC or regulators  of any foreign country,  nor
will  the issuers thereof be subject  to the SEC's reporting requirements. Thus,
there  will  be  less  available  information  concerning  foreign  issuers   of
securities  held  by the  Fund  than is  available  concerning U.S.  issuers. In
instances where the financial statements of an issuer are not deemed to  reflect
accurately  the financial situation  of the issuer,  AIM and/or the sub-advisors
will take  appropriate steps  to  evaluate the  proposed investment,  which  may
include  on-site inspection  of the issuer,  interviews with  its management and
consultations  with  accountants,  bankers  and  other  specialists.  There   is
substantially  less publicly available information  about foreign companies than
there are  reports and  ratings  published about  U.S.  companies and  the  U.S.
government.  In addition, where public information  is available, it may be less
reliable than such information regarding U.S. issuers. Issuers of securities  in
foreign jurisdictions are generally not subject to the same degree of regulation
as  are U.S.  issuers with  respect to  such matters  as restrictions  on market
manipulation, insider trading rules,  shareholder proxy requirements and  timely
disclosure of information.
    CURRENCY  FLUCTUATIONS. Because each Fund under normal circumstances (except
Money Market  Fund and  to a  lesser extent,  the America  Fund) will  invest  a
substantial  portion of  its total assets  in the securities  of foreign issuers
which are denominated  in foreign currencies,  the strength or  weakness of  the
U.S.  dollar against such foreign  currencies will account for  part of a Fund's
investment performance.  A  decline in  the  value of  any  particular  currency
against  the U.S.  dollar will  cause a decline  in the  U.S. dollar  value of a
Fund's holdings  of  securities  and  cash denominated  in  such  currency  and,
therefore,  will cause an overall decline in  the Fund's net asset value and any
net investment  income and  capital gains  derived from  such securities  to  be
distributed  in U.S. dollars to shareholders in the Fund. Moreover, if the value
of the foreign currencies in which a Fund receives its income falls relative  to
the  U.S.  dollar  between  receipt  of  the  income  and  the  making  of  Fund
distributions, the Fund may be required to liquidate securities in order to make
distributions if  the  Fund  has  insufficient cash  in  U.S.  dollars  to  meet
distribution requirements.
The  rate of exchange between the U.S. dollar and other currencies is determined
by several factors including  the supply and  demand for particular  currencies,
central  bank efforts to support particular currencies, the relative movement of
interest rates, the pace  of business activity in  the other countries, and  the
United  States, and other economic and  financial conditions affecting the world
economy.
Austria, Belgium,  Finland, France,  Germany,  Ireland, Italy,  Luxembourg,  the
Netherlands,  Portugal,  and  Spain are  members  of the  European  Economic and
Monetary Union (the "EMU"). The EMU  has established a common European  currency
for  participating countries  which is known  as the  "euro." Each participating
country supplemented its existing currency with the euro on January 1, 1999, and
it is  anticipated that  each participating  country will  replace its  existing
currency  with the euro  on July 1, 2002.  Any other European  country that is a
member of the European Union and satisfies the criteria for participation in the
EMU, may  elect  to participate  in  the EMU  and  may supplement  its  existing
currency with the euro after January 1, 1999.
The  introduction of the euro presents unique risks and uncertainties, including
how outstanding financial contracts will be  treated after January 1, 1999;  the
establishment  of exchange rates  for existing currencies and  the euro; and the
creation of suitable  clearing and settlement  systems for the  euro. These  and
other factors could cause market disruptions before or after the introduction of
the euro and could adversely affect the value of securities held by the Fund.
Although  each Fund values its assets daily  in terms of U.S. dollars, the Funds
do not intend to convert their holdings of foreign currencies into U.S.  dollars
on  a daily basis. Each Fund will do so, from time to time, and investors should
be aware of the costs of currency conversion. Although foreign exchange  dealers
do  not charge  a fee  for conversion,  they do  realize a  profit based  on the
difference ("spread") between  the prices  at which  they buy  and sell  various
currencies. Thus, a dealer may offer to sell a foreign currency to a Fund at one
rate, while offering a lesser rate of exchange should a Fund desire to sell that
currency to the dealer.
    ADVERSE  MARKET CHARACTERISTICS. Securities  of many foreign  issuers may be
less liquid and their  prices more volatile than  securities of comparable  U.S.
issuers.  In  addition, foreign  securities  markets and  brokers  generally are
subject to  less governmental  supervision  and regulation  than in  the  United
States,  and  foreign  securities  transactions  usually  are  subject  to fixed
commissions, which  generally are  higher than  negotiated commissions  on  U.S.
transactions.  In addition,  foreign securities  transactions may  be subject to
difficulties associated  with the  settlement of  such transactions.  Delays  in
settlement  could  result  in  temporary  periods  when  assets  of  a  Fund are
uninvested and no return is earned thereon. The
 
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                      GT GLOBAL VARIABLE INVESTMENT FUNDS
inability of  a Fund  to  make intended  security  purchases due  to  settlement
problems  could  cause the  Fund  to miss  attractive  investment opportunities.
Inability to  dispose of  a security  due to  settlement problems  either  could
result  in losses to a Fund due to subsequent declines in value of that security
or, if a Fund has entered into a contract to sell the security, could result  in
possible  liability to the purchaser. AIM  and/or the sub-advisors will consider
such difficulties  when  determining  the  allocation  of  each  Fund's  assets,
although  AIM and/or the sub-advisors do not believe that such difficulties will
have a material adverse effect on a Fund's trading activities.
The risk  also exists  that an  emergency situation  may arise  in one  or  more
emerging  markets as a result of which trading of securities may cease or may be
substantially curtailed and  prices for  a Fund's portfolio  securities in  such
markets  may not be readily  available. Section 22(e) of  the 1940 Act permits a
registered investment  company  to suspend  redemption  of its  shares  for  any
period, during which an emergency exists, as determined by the SEC. Accordingly,
if  a Fund  believes that  appropriate circumstances  warrant, it  will promptly
apply to the SEC for a determination that an emergency exists within the meaning
of Section 22(e) of  the 1940 Act.  During the period  commencing from a  Fund's
identification  of  such conditions  until the  date of  SEC action,  the Fund's
portfolio securities in  the affected markets  will be valued  at fair value  as
determined in good faith by or under the direction of the relevant Trust's Board
of Trustees.
In  certain markets there have  been times when settlements  have been unable to
keep pace with  the volume of  securities transactions, making  it difficult  to
conduct  such transactions. The inability of  a Fund to make intended securities
purchases due to settlement problems could  cause the Fund to forego  attractive
investment  opportunities. Inability to  dispose of a  portfolio security caused
settlement problems could result either in losses to the Fund due to  subsequent
declines  in value of the portfolio security or,  if the Fund has entered into a
contract to  sell  the security,  could  result  in possible  liability  to  the
purchaser.
Each  Fund may use  foreign custodians, which  may involve risks  in addition to
those related to the  use of U.S. custodians.  Such risks include  uncertainties
relating  to  determining  and  monitoring  the  foreign  custodian's  financial
strength, reputation and standing; maintaining appropriate safeguards concerning
the Fund's investments;  and possible  difficulties in  obtaining and  enforcing
judgments against such custodians.
    WITHHOLDING  TAXES. A Fund's net investment  income from foreign issuers may
be subject  to  withholding  taxes  by the  foreign  issuer's  country,  thereby
reducing the Fund's net investment income or delaying the receipt of income when
those taxes may be recaptured. See "Taxes."
    CONCENTRATION.  To the  extent a Fund  invests a significant  portion of its
assets in securities of issuers located in a particular country or region of the
world, such Fund  may be  subject to greater  risks and  may experience  greater
volatility than a fund that is more broadly diversified geographically.
    SPECIAL  CONSIDERATIONS AFFECTING WESTERN  EUROPEAN COUNTRIES. The countries
that are members of the European Economic Community ("Common Market")  (Austria,
Belgium,  Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,
the Netherlands,  Portugal, Spain,  Sweden and  the United  Kingdom)  eliminated
certain  import tariffs and quotas and other  trade barriers with respect to one
another over the past  several years. AIM and/or  the sub-advisors believe  that
this  deregulation  should improve  the prospects  for  economic growth  in many
Western European countries.  Among other things,  the deregulation could  enable
companies  domiciled in  one country  to avail  themselves of  lower labor costs
existing in  other  countries.  In addition,  this  deregulation  could  benefit
companies domiciled in one country by opening additional markets for their goods
and  services in other countries. Since, however, it is not clear what the exact
form or effect of  these Common Market  reforms will be  on business in  Western
Europe,  it is impossible to predict  the long-term impact of the implementation
of these programs on the securities owned by a Fund.
    SPECIAL CONSIDERATIONS  AFFECTING  RUSSIA AND  EASTERN  EUROPEAN  COUNTRIES.
Investing  in Russia  and Eastern European  countries involves a  high degree of
risk and special considerations not  typically associated with investing in  the
United  States securities markets, and  should be considered highly speculative.
Such risks include: (1)  delays in settling portfolio  transactions and risk  of
loss  arising out of the system of  share registration and custody; (2) the risk
that it may be impossible  or more difficult than  in other countries to  obtain
and/or  enforce a  judgement; (3) pervasiveness  of corruption and  crime in the
economic system; (4) currency exchange rate volatility and the lack of available
currency hedging instruments; (5) higher rates of inflation (including the  risk
of   social  unrest  associated  with   periods  of  hyper-inflation)  and  high
unemployment; (6) controls on foreign investment and local practices disfavoring
foreign investors and limitations on  repatriation of invested capital,  profits
and  dividends, and on  a fund's ability  to exchange local  currencies for U.S.
dollars; (7) political instability and social unrest and violence; (8) the  risk
that  the governments of Russia and Eastern European countries may decide not to
continue to support the economic reform programs implemented recently and  could
follow  radically different political and/or  economic policies to the detriment
of investors, including non-market-
 
                  Statement of Additional Information Page 33
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                      GT GLOBAL VARIABLE INVESTMENT FUNDS
oriented policies such as  the support of certain  industries at the expense  of
other  sectors or investors, or  a return to the  centrally planned economy that
existed when  such  countries  had  a communist  form  of  government;  (9)  the
financial  condition of companies in these countries, including large amounts of
inter-company debt which may create a payments crisis on a national scale;  (10)
dependency  on exports and the  corresponding importance of international trade;
(11) the risk that  the tax system  in these countries will  not be reformed  to
prevent  inconsistent,  retroactive  and/or exorbitant  taxation;  and  (12) the
underdeveloped nature of the securities markets.
    SPECIAL CONSIDERATIONS AFFECTING JAPAN. Japan's economic growth has declined
significantly since 1990. The general government position has deteriorated as  a
result  of weakening economic  growth and stimulative  measures taken to support
economic activity and to  restore financial stability.  Although the decline  in
interest   rates  and  fiscal  stimulation   packages  have  helped  to  contain
recessionary forces, uncertainties remain. Japan is also heavily dependent  upon
international  trade, so its  economy is especially  sensitive to trade barriers
and disputes.  Japan has  had  difficult relations  with its  trading  partners,
particularly the United States, where the trade imbalance is the greatest. It is
possible  that  trade sanctions  and other  protectionist measures  could impact
Japan adversely in both the short and the long term.
The common  stocks  of many  Japanese  companies trade  at  high  price-earnings
ratios.  Differences  in accounting  methods make  it  difficult to  compare the
earnings of  Japanese companies  with  those of  companies in  other  countries,
especially  in the  U.S. In  general, however, reported  net income  in Japan is
understated relative to  U.S. accounting standards  and this is  one reason  why
price-earnings   ratios  of  the  stocks   of  Japanese  companies  have  tended
historically to be  higher than  those for  U.S. stocks.  In addition,  Japanese
companies  have  tended to  have  higher growth  rates  than U.S.  companies and
Japanese interest rates  have generally  been lower than  in the  U.S., both  of
which  factors tend to result in  lower discount rates and higher price-earnings
ratios in Japan than in the U.S.
The Japanese securities  markets are  less regulated  than those  in the  United
States. Evidence has emerged from time to time of distortion of market prices to
serve  political or other purposes. Shareholders'  rights are not always equally
enforced. In addition, Japan's banking  industry is undergoing problems  related
to bad loans and declining values in real estate.
    SPECIAL  CONSIDERATIONS AFFECTING  PACIFIC REGION COUNTRIES.  Certain of the
risks associated with international  investments are heightened for  investments
in  Pacific region  countries. For  example, some  of the  currencies at Pacific
region countries  have  experienced steady  devaluations  relative to  the  U.S.
dollar,  and major  adjustments have been  made periodically in  certain of such
currencies. Certain countries, such as India, face serious exchange constraints.
Many of the Asia Pacific region countries may be subject to a greater degree  of
social,  political  and economic  instability  than is  the  case in  the United
States. Such instability may result from, among other things, the following: (i)
authoritarian governments  or military  involvement  in political  and  economic
decision  making, and changes in  government through extra-constitutional means;
(ii) popular unrest associated with demands for improved political, economic and
social conditions;  (iii) internal  insurgencies;  (iv) hostile  relations  with
neighboring  countries; and (v) ethnic,  religious and racial disaffection. Such
social, political  and  economic  instability could  significantly  disrupt  the
principal  financial markets  in which a  Fund invests and  adversely affect the
value of a Fund's  assets. In addition,  there may be  the possibility of  asset
expropriations or future confiscatory levels of taxation affecting the Funds.
In  China, India, Indonesia,  Malaysia, the Philippines,  Singapore, South Korea
and Thailand, government regulation or a company's charter may limit the maximum
foreign aggregate ownership of equity in any one company. South Korea  generally
prohibits  foreign investment in  Won-denominated debt securities  and Sri Lanka
prohibits  foreign  investment  in  government  debt  securities.  South   Korea
prohibits  foreign investment in specified  telecommunications companies and the
Philippines prohibits foreign investment in  mass media companies and  companies
providing  certain  professional  services.  In  the  Philippines,  a  Fund  may
generally  invest  in  "B"  shares  of  Philippine  issuers  engaged  in  partly
nationalized  business activities,  the market  prices, liquidity  and rights of
which may vary from shares owned by  nationals. Similarly, in China, a Fund  may
only  invest  in "B"  shares  of securities  traded  on The  Shanghai Securities
Exchange  and  The  Shenzhen  Stock  Exchange,  currently  the  two   officially
recognized  securities exchanges  in China.  "B" shares  traded on  The Shanghai
Securities Exchange  are  settled in  U.S.  dollars,  and those  traded  on  The
Shenzhen Stock Exchange are generally settled in Hong Kong dollars.
If, because of restrictions on repatriation or conversion, a Fund were unable to
distribute  substantially all of its net investment income and net capital gains
within applicable time periods, the Fund could be subject to federal income  tax
that  would  not  otherwise be  incurred  and  could cease  to  qualify  for the
favorable tax  treatment afforded  to  regulated investment  companies  ("RICs")
under  the Code. In such case, it would  become subject to federal income tax on
all of its income and net capital gains.
 
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Several of  the Asia  Pacific region  countries have  or in  the past  have  had
hostile  relationships  with neighboring  nations  or have  experienced internal
insurgency. Thailand has  experienced border conflicts  with Laos and  Cambodia,
and India is engaged in border disputes with several of its neighbors, including
China  and Pakistan. An uneasy truce exists between North Korea and South Korea,
and the recurrence of hostilities remains possible. Reunification of North Korea
and South Korea could have a detrimental  effect on the economy of South  Korea.
Also,  China continues to  claim sovereignty over  Taiwan and has,  in the past,
conducted military maneuvers near Taiwan.
The economies of most of the Asia Pacific region countries are heavily dependent
upon international  trade  and  are accordingly  affected  by  protective  trade
barriers  and the economic conditions of their trading partners, principally the
United States, Japan,  China and the  European Community. The  enactment by  the
United  States  or  other  principal  trading  partners  of  protectionist trade
legislation, reduction of foreign investment in the local economies and  general
declines  in  the  international  securities markets  could  have  a significant
adverse effect upon the securities markets of the Asia Pacific region countries.
In addition,  the  economies of  some  of  the Asia  Pacific  region  countries,
Australia and Indonesia, for example, are vulnerable to weakness in world prices
for their commodity exports, including crude oil.
Few  of the Asia Pacific region countries have Western-style or fully democratic
governments. Some  governments in  the region  are authoritarian  in nature  and
influenced  by security forces.  For example, during  the course of  the last 25
years, governments in the region have been  installed or removed as a result  of
military  coups, while  others have periodically  demonstrated repressive police
state characteristics. In several Asia Pacific Region countries, the  leadership
ability  of  the  government  has  suffered as  a  result  of  recent corruption
scandals. Disparities of wealth,  among other factors, have  also led to  social
unrest  in some  of the Asia  Pacific region countries,  accompanied, in certain
cases, by violence and labor unrest. Ethnic, religious and racial  disaffection,
as  evidenced  in India,  Pakistan,  and Sri  Lanka,  for example,  have created
social, economic and  political problems.  Such problems also  have occurred  in
other regions.
Starting in mid-1997, some Pacific region countries began to experience currency
devaluations  that resulted in high interest rate levels and sharp reductions in
economic activity. While the currency crisis diminished prospects for short-term
corporate earnings growth, AIM and  the sub-advisors believe that high  interest
rate  levels may force governments and corporations to restructure the financial
sector in a  manner that may  facilitate a  return to high  levels of  long-term
economic activity.
China  assumed  sovereignty over  Hong  Kong in  July  1997. Although  China has
committed by treaty to preserve the economic and social freedoms enjoyed in Hong
Kong for fifty years after regaining  control of Hong Kong, the continuation  of
the  current form of the  economic system in Hong  Kong after the reversion will
depend on the actions  of the government of  China. In addition, such  reversion
has  increased sensitivity in Hong Kong to political developments and statements
by public figures in China. Business confidence in Hong Kong, therefore, can  be
significantly  affected by such  developments and statements,  which in turn can
affect markets and business performance.
In addition, the Chinese  sovereignty over Hong Kong  also presents a risk  that
the  Hong Kong dollar will be devaluated and a risk of possible loss of investor
confidence in the Hong Kong markets and dollar. However, factors exist that  are
likely to mitigate this risk. First, China has stated its intention to implement
a  "one country, two systems" policy,  which would preserve monetary sovereignty
and leave control in the hands of the Hong Kong Monetary Authority ("HKMA").
Second, fixed  rate  parity  with  the  U.S.  dollar  is  seen  as  critical  to
maintaining  investors'  confidence  in  the  transition  to  Chinese  rule and,
therefore, it is  anticipated that,  in the event  international investors  lose
confidence  in Hong Kong dollar assets, the  HKMA would intervene to support the
currency, though such  intervention cannot  be assured. Third,  Hong Kong's  and
China's  sizable combined  foreign exchange reserve  may be used  to support the
value of the  Hong Kong dollar,  provided that China  does not appropriate  such
reserves  for  other uses,  which  is not  anticipated,  but cannot  be assured.
Finally, China would be likely  to experience significant adverse political  and
economic  consequences if confidence  in the Hong Kong  dollar and the territory
assets were to be endangered.
    SPECIAL  CONSIDERATIONS  AFFECTING  LATIN  AMERICAN  COUNTRIES.  Most  Latin
American  countries have experienced substantial,  and in some periods extremely
high, rates of  inflation for many  years. Inflation and  rapid fluctuations  in
inflation  rates have had and may continue  to have very negative effects on the
economies and securities  markets of certain  Latin American countries.  Certain
Latin  American countries are also among the largest debtors to commercial banks
and foreign governments. At times certain Latin American countries have declared
moratoria on  the payment  of principal  and/or interest  on external  debt.  In
addition,  certain  Latin  American  securities  markets  have  experienced high
volatility in recent years.
Latin American countries may  also close certain sectors  of their economies  to
equity  investments  by foreigners.  Further due  to  the absence  of securities
markets and  publicly  owned corporations  and  due to  restrictions  on  direct
investment by
 
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foreign  entities,  investments  may  only be  made  in  certain  Latin American
countries  solely  or  primarily  through  governmentally  approved   investment
vehicles or companies.
Certain Latin American countries may have managed currencies that are maintained
at  artificial levels to the U.S. dollar rather than at levels determined by the
market. This type  of system can  lead to  sudden and large  adjustments in  the
currency  which, in turn, can  have a disruptive and  negative effect on foreign
investors. For example, in late  1994, the value of  the Mexican peso lost  more
than one-third of its value relative to the U.S. dollar.
    SPECIAL   CONSIDERATIONS  AFFECTING  EMERGING   MARKETS.  Investing  in  the
securities of companies in emerging markets may entail special risks relating to
potential political and  economic instability  and the  risks of  expropriation,
nationalization,  confiscation  or  the imposition  of  restrictions  on foreign
investment, convertibility  into U.S.  dollars and  on repatriation  of  capital
invested.   In  the  event  of  such  expropriation,  nationalization  or  other
confiscation by any country, a Fund could lose its entire investment in any such
country.
Emerging securities  markets are  substantially  smaller, less  developed,  less
liquid  and more volatile than the major securities markets. The limited size of
emerging securities markets and limited trading value in issuers compared to the
volume of  trading in  U.S. securities  could  cause prices  to be  erratic  for
reasons  apart  from factors  that  affect the  quality  of the  securities. For
example, limited market size may cause prices to be unduly influenced by traders
who control  large  positions.  Adverse publicity  and  investors'  perceptions,
whether  or  not  based on  fundamental  analysis,  may decrease  the  value and
liquidity of portfolio  securities, especially  in these  markets. In  addition,
securities traded in certain emerging markets may be subject to risks due to the
inexperience  of financial intermediaries, a lack of modern technology, the lack
of a sufficient capital base to expand business operations, and the  possibility
of permanent or temporary termination of trading.
Economies in emerging markets generally are heavily dependent upon international
trade  and, accordingly, have been and may  continue to be adversely affected by
trade barriers,  exchange controls,  managed  adjustments in  relative  currency
values  and other protectionist measures imposed  or negotiated by the countries
with which they trade.  These economies also  have been and  may continue to  be
affected by economic conditions in the countries in which they trade.
Settlement  mechanisms in emerging securities markets  may be less efficient and
reliable than in more developed markets.  In such emerging securities there  may
be share registration and delivery delays or failures.
Many emerging market countries have experienced substantial, and in some periods
extremely  high,  rates  of  inflation  for  many  years.  Inflation  and  rapid
fluctuations in inflation rates and corresponding currency devaluations have had
and may  continue to  have  negative effects  on  the economies  and  securities
markets of certain emerging market countries.
    LOWER  QUALITY  DEBT SECURITIES.  There  are no  credit  quality limitations
placed on  the  debt securities  in  which Latin  America  Fund may  invest.  In
addition,  Infrastructure Fund, Natural Resources Fund and Emerging Markets Fund
may each  invest up  to 20%  of its  total assets,  Telecommunications Fund  may
invest up to 5% of its assets, and Strategic Income Fund may invest up to 50% of
its  assets, in below  investment grade debt  securities. Finally, Global Growth
Fund may invest up to 35% of its  assets in debt securities rated no lower  than
investment grade. Investment grade debt securities are debt securities rated BBB
or  higher by S&P or  Baa or higher by  Moody's or, if unrated,  deemed to be of
equivalent quality in the judgment of AIM and/or the sub-advisors.
Debt rated  Baa  by  Moody's  is  considered  by  Moody's  to  have  speculative
characteristics. Debt rated BB, B, CCC, CC and C by S&P or debt securities rated
Ba,  B,  Caa, Ca  or  C by  Moody's is  regarded,  on balance,  as predominantly
speculative with respect  to the  issuer's capacity  to pay  interest and  repay
principal  in  accordance with  the terms  of the  obligation. While  such lower
quality debt will likely have some quality and protective characteristics, these
are outweighed  by  large  uncertainties  or major  risk  exposures  to  adverse
conditions.  Debt rated C by Moody's or S&P is the lowest rated debt that is not
in default as to principal or interest, and such issues so rated can be regarded
as having  extremely  poor  prospects  of ever  attaining  any  real  investment
standing.  Lower quality  debt securities  are also  generally considered  to be
subject to greater  risk than securities  with higher ratings  with regard to  a
deterioration   of  general  economic  conditions.   These  lower  quality  debt
securities are the equivalent of high yield, high risk bonds, commonly known  as
"junk  bonds." Infrastructure Fund and Natural Resources Fund will not invest in
securities in default as to principal and interest.
Ratings of debt securities represent the rating agency's opinion regarding their
quality and are not a guarantee of quality. Rating agencies attempt to  evaluate
the  safety of principal and interest payments  and do not evaluate the risks of
fluctuations in market  value. Also,  rating agencies  may fail  to make  timely
changes  in credit ratings in response to subsequent events, so that an issuer's
current financial condition may be better or worse than a rating indicates.  See
"Description of Debt Ratings", below, for a full discussion of Moody's and S&P's
ratings.
 
                  Statement of Additional Information Page 36
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                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
Issuers  of lower quality securities are often highly leveraged and may not have
available to them more traditional methods of financing. For example, during  an
economic  downturn  or  a  sustained period  of  rising  interest  rates, highly
leveraged issuers of lower quality  securities may experience financial  stress.
During such periods, such issuers may not have sufficient revenues to meet their
interest   payment  obligations.  The  issuer's  ability  to  service  its  debt
obligations may also  be adversely affected  by specific developments  affecting
the  issuer, such as the issuer's  inability to meet specific projected business
forecasts or the unavailability of additional financing. The risk of loss due to
default by the issuer is significantly greater for the holders of lower  quality
securities   because  such  securities  are   generally  unsecured  and  may  be
subordinated to the claims of other creditors of the issuer.
Lower quality  debt securities  of  corporate issuers  frequently have  call  or
buy-back  features  which  would permit  an  issuer  to call  or  repurchase the
security from a  Fund. If an  issuer exercises these  provisions in a  declining
interest  rate market,  a Fund  may have  to replace  the security  with a lower
yielding security, resulting in a decreased return for investors. In addition, a
Fund may have difficulty disposing of lower quality securities because they  may
have  a thin trading market. There may be no established retail secondary market
for many  of these  securities, and  each  of the  Funds anticipates  that  such
securities  could be sold only  to a limited number  of dealers or institutional
investors. The lack of a liquid secondary market also may have an adverse impact
on market prices of such instruments and  may make it more difficult for a  Fund
to  obtain  accurate  market  quotations  for  purposes  of  valuing  the Fund's
portfolio   investments.   Infrastructure   Fund,   Natural   Resources    Fund,
Telecommunications Fund and Strategic Income Fund may also acquire lower quality
debt  securities  during  an  initial underwriting  or  which  are  sold without
registration under applicable securities  laws. Such securities involve  special
considerations and risks.
In  addition to the foregoing, factors that  could have an adverse effect on the
market value  of lower  rated debt  securities  in which  the Funds  may  invest
include: (i) potential adverse publicity; (ii) heightened sensitivity to general
economic or political conditions; and (iii) the likely adverse impact of a major
economic  recession. The Funds may also  incur additional expenses to the extent
they are required to seek recovery upon a default in the payment of principal or
interest on portfolio holdings, and the Funds may have limited legal recourse in
the event of a default.
    SOVEREIGN DEBT. Periods of economic uncertainty may result in the volatility
of market prices of sovereign debt obligations and, in turn, a Fund's net  asset
value, to a greater extent than the volatility inherent in domestic fixed income
securities.
A  sovereign debtor's willingness or ability to repay principal and pay interest
in a  timely manner  may be  affected by,  among other  factors, its  cash  flow
situation,  the extent of  its foreign reserves,  the availability of sufficient
foreign exchange on the  date a payment  is due, the relative  size of the  debt
service  burden to the economy as a  whole, the sovereign debtor's policy toward
principal international  lenders  and the  political  constraints to  which  the
sovereign  debtor may be  subject. Emerging market  governments could default on
their Sovereign Debt. Such sovereign debtors  also may be dependent on  expected
disbursements from foreign governments, multilateral agencies and other entities
abroad to reduce principal and interest arrearages on their debt. The commitment
on the part of these governments, agencies and others to make such disbursements
may  be conditioned on  a sovereign debtor's  implementation of economic reforms
and/or economic performance and the timely service of such debtor's obligations.
Failure to implement such reforms,  achieve such levels of economic  performance
or  repay principal or interest when due, may result in the cancellation of such
third parties' commitments  to lend  funds to  the sovereign  debtor, which  may
further impair such debtor's ability or willingness to timely service its debts.
The  occurrence of political, social or diplomatic changes in one or more of the
countries issuing sovereign  debt could adversely  affect a Fund's  investments.
Emerging  markets are faced with  social and political issues,  and some of them
have experienced high  rates of  inflation in  recent years  and have  extensive
internal  debt. Among  other effects, high  inflation and  internal debt service
requirements may adversely affect the  cost and availability of future  domestic
sovereign borrowing to finance governmental programs, and may have other adverse
social,   political   and  economic   consequences.   Political  changes   or  a
deterioration of a country's domestic economy or balance of trade may affect the
willingness of countries to  service their sovereign  debt. Although AIM  and/or
the  sub-advisors intend to  manage the respective  Funds in a  manner that will
minimize the exposure  to such  risks, there can  be no  assurance that  adverse
political  changes  will  not cause  a  Fund to  suffer  a loss  of  interest or
principal on any of its holdings.
In recent years, some of the emerging market countries in which the Funds expect
to invest  have  encountered  difficulties in  servicing  their  sovereign  debt
obligations.  Some  of these  countries have  withheld  payments of  interest on
and/or principal  of  sovereign  debt.  These  difficulties  have  also  led  to
agreements to restructure external debt obligations -- in particular, commercial
bank  loans,  typically by  rescheduling  principal payments,  reducing interest
rates and extending new credits to  finance interest payments on existing  debt.
In the future, holders of emerging market sovereign debt
 
                  Statement of Additional Information Page 37
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                      GT GLOBAL VARIABLE INVESTMENT FUNDS
securities may be requested to participate in similar rescheduling of such debt.
Certain  emerging market countries  are among the  largest debtors to commercial
banks and foreign governments. Currently,  Brazil, Mexico and Argentina are  the
largest  debtors among  developing countries.  At times  certain emerging market
countries have declared moratoria  on the payment of  principal and interest  on
external  debt; such  a moratorium  is currently  in effect  in certain emerging
market countries. There  is no  bankruptcy proceeding  by which  a creditor  may
collect  in  whole  or  in  part sovereign  debt  on  which  an  emerging market
government has defaulted.
The ability of  emerging market  governments to  make timely  payments on  their
sovereign  debt is likely  to be influenced  strongly by a  country's balance of
trade and its access to trade  and other international credits. A country  whose
exports  are concentrated in a few commodities  could be vulnerable to a decline
in the  international prices  of  one or  more  of such  commodities.  Increased
protectionism  on the part of a  country's trading partners could also adversely
affect its  exports.  Such  events  could diminish  a  country's  trade  account
surplus,  if any. To the extent that  a country receives payment for its exports
in currencies other  than hard  currencies, its  ability to  make hard  currency
payments could be affected.
Investors  should also be aware that certain sovereign debt instruments in which
the Funds may invest involve great risk. Some of such securities with respect to
which the issuer  currently may  not be  paying interest  or may  be in  payment
default,  may be comparable to securities rated D by S&P or C by Moody's. A Fund
may have difficulty disposing of and valuing certain sovereign debt  obligations
because there may be a limited trading market for such securities. Because there
is no liquid secondary market for many of these securities, the Funds anticipate
that  such  securities could  be sold  only to  a limited  number of  dealers or
institutional investors.
    RISKS  OF   MORTGAGE-BACKED   AND   ASSET-BACKED   SECURITIES.   The   yield
characteristics of mortgage-backed and asset-backed securities differ from those
of  traditional  bonds.  Among  the  major  differences  are  that  interest and
principal payments are made more frequently (usually monthly) and that principal
may be prepaid at any time because the underlying mortgage loans or other assets
generally may  be prepaid  at  any time.  Generally, prepayments  on  fixed-rate
mortgage  loans  will increase  during a  period of  falling interest  rates and
decrease  during  a  period  of  rising  interest  rates.  Mortgage-backed   and
asset-backed  securities may also decrease in value  as a result of increases in
interest rates and, because  of prepayments, may benefit  less than other  bonds
from  declining interest rates. Reinvestments of  prepayments may occur at lower
interest rates than the original  investment, thus adversely affecting a  Fund's
yield.  Actual prepayment  experience may cause  the yield  of a mortgage-backed
security to differ from what was  assumed when the Fund purchased the  security.
The  market for privately issued  mortgage-backed and asset-backed securities is
smaller and  less liquid  than the  market for  U.S. government  mortgage-backed
securities.
CMO  classes may be specially structured in a manner that provides any of a wide
variety of investment  characteristics, such  as yield,  effective maturity  and
interest  rate sensitivity. As market conditions change, however, and especially
during periods of rapid or unanticipated  changes in market interest rates,  the
attractiveness  of some CMO classes and the  ability of the structure to provide
the anticipated investment characteristics  may be significantly reduced.  These
changes  can result  in volatility  in the market  value, and  in some instances
reduced liquidity, of the CMO class.
Certain classes of  CMOs are structured  in a manner  that makes them  extremely
sensitive   to   changes   in  prepayment   rates.   Interest-only   ("IO")  and
principal-only ("PO") classes are examples of this. IOs are entitled to  receive
all  or a portion  of the interest, but  none (or only a  nominal amount) of the
principal payments, from the underlying mortgage assets. If the mortgage  assets
underlying an IO experience greater than anticipated principal prepayments, then
the  total amount of interest payments allocable  to the IO class, and therefore
the yield  to  investors, generally  will  be  reduced. In  some  instances,  an
investor  in an IO may fail to recoup all of his or her initial investment, even
if the security is government guaranteed or  is considered to be of the  highest
credit  quality. Conversely, PO classes are entitled to receive all or a portion
of the  principal  payments, but  none  of  the interest,  from  the  underlying
mortgage assets. PO classes are purchased at substantial discounts from par, and
the  yield to investors  will be reduced  if principal payments  are slower than
expected. Some IOs and POs, as well as other CMO classes, are structured to have
special  protections  against  the  effects  of  prepayments.  These  structural
protections,  however,  normally are  effective  only within  certain  ranges of
prepayment rates and thus will not protect investors in all circumstances.
Inverse floating rate CMO classes also may be extremely volatile. These  classes
pay  interest at a  rate that decreases  when a specified  index of market rates
increases.
During 1994, the value and liquidity of many mortgage-backed securities declined
sharply due primarily to increases in interest rates. There can be no  assurance
that  such declines will not recur.  The market value of certain mortgage-backed
securities, including IO and  PO classes of  mortgage-backed securities, can  be
extremely volatile and these securities may become illiquid.
 
                  Statement of Additional Information Page 38
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                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
Foreign  mortgage-backed securities markets are  substantially smaller than U.S.
markets, but  have been  established in  several countries,  including  Germany,
Denmark,  Sweden, Canada, and Australia, and may be developed elsewhere. Foreign
mortgage-backed  securities  generally  are   structured  similar  to   domestic
mortgage-backed  securities,  and  they normally  present  substantially similar
investment risks as  well as the  other risks normally  associated with  foreign
securities.
 
                  Statement of Additional Information Page 39
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
                             INVESTMENT LIMITATIONS
- --------------------------------------------------------------------------------
Each  Fund is subject to certain fundamental investment limitations that may not
be changed without approval by affirmative vote of the lesser of (i) 67% or more
of the Fund's shares represented at  a shareholders' meeting at which more  than
50%  of the  outstanding shares of  the Fund  are represented at  the meeting in
person or by proxy, or (ii) more than 50% of the outstanding shares of the Fund.
Each Fund is also subject to  nonfundamental limitations that may be changed  by
vote of the applicable Trust's Board of Trustees without shareholder approval.
NEW PACIFIC FUND, INTERNATIONAL FUND, EUROPE FUND AND AMERICA FUND
FUNDAMENTAL INVESTMENT LIMITATIONS.
No Fund may:
        (1)  Purchase or sell real estate, except that investments in securities
    of issuers that  invest in  real estate and  investments in  mortgage-backed
    securities,  mortgage  participations  or  other  instruments  supported  by
    interests in real estate are not subject to this limitation, and except that
    the Fund may exercise rights  under agreements relating to such  securities,
    including  the right to  enforce security interests and  to hold real estate
    acquired by  reason  of such  enforcement  until  that real  estate  can  be
    liquidated in an orderly manner;
        (2)  Purchase or sell  physical commodities, but  the Fund may purchase,
    sell or enter into financial options and futures, forward and spot  currency
    contracts,  swap transactions  and other  financial contracts  or derivative
    instruments;
        (3) Issue senior securities or  borrow money, except as permitted  under
    the  1940 Act and then not  in excess of 33 1/3%  of the Fund's total assets
    (including  the  amount  borrowed  but   reduced  by  any  liabilities   not
    constituting  borrowings) at the time of the borrowing, except that the Fund
    may borrow up to  an additional 5%  of its total  assets (not including  the
    amount borrowed) for temporary or emergency purposes;
        (4)  Make loans, except through loans of portfolio securities or through
    repurchase agreements, provided  that for purposes  of this limitation,  the
    acquisition  of bonds, debentures, other  debt securities or instruments, or
    participations or  other interests  therein  and investments  in  government
    obligations, commercial paper, certificates of deposit, bankers' acceptances
    or similar instruments will not be considered the making of a loan;
        (5)  Engage in the business of underwriting securities of other issuers,
    except to the extent that the Fund might be considered an underwriter  under
    the  federal securities laws in connection with its disposition of portfolio
    securities;
        (6) Purchase any security if, as a result of that purchase, 25% or  more
    of the Fund's total assets would be invested in securities of issuers having
    their  principal business activities in the  same industry, except that this
    limitation does not  apply to securities  issued or guaranteed  by the  U.S.
    government, its agencies or instrumentalities; or
        (7) Purchase securities of any only issuer if, as a result, more than 5%
    of the Fund's total assets would be invested in securities of that issuer or
    the  Fund  would  own  or  hold more  than  10%  of  the  outstanding voting
    securities of that issuer, except that up to 25% of the Fund's total  assets
    may  be invested  without regard  to this  limitation, and  except that this
    limitation does not  apply to securities  issued or guaranteed  by the  U.S.
    government,  its agencies  or instrumentalities  or to  securities issued by
    other investment companies.
Notwithstanding any other investment policy of the Fund, the Fund may invest all
of  its  investable  assets  (cash,   securities  and  receivables  related   to
securities)  in an  open-end management investment  company having substantially
the same investment objective, policies and limitations as the Fund.
 
                  Statement of Additional Information Page 40
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
NONFUNDAMENTAL INVESTMENT LIMITATIONS.
No Fund may:
        (1) Invest more  than 15% of  its net assets  in illiquid securities,  a
    term  which means securities that cannot be disposed of within seven days in
    the normal course of business at approximately the amount at which the  Fund
    has  valued  the securities  and  includes, among  other  things, repurchase
    agreements maturing in more than seven days;
        (2) Borrow money  except for  temporary or emergency  purposes (not  for
    leveraging)  not  in excess  of 33  1/3% of  the value  of the  Fund's total
    assets;
        (3) Enter into a futures contract,  an option on a futures contract,  or
    an  option on foreign currency traded  on a CFTC-regulated exchange, in each
    case other than for bona fide hedging purposes (as defined by the CFTC),  if
    the aggregate initial margin and premiums required to establish all of these
    positions (excluding the amount by which options are "in-the-money") exceeds
    5% of the liquidation value of a Fund's portfolio, after taking into account
    unrealized  profits  and unrealized  losses on  any  contracts the  Fund has
    entered into;
        (4) Purchase securities  on margin,  provided that the  Fund may  obtain
    short-term  credits as may  be necessary for the  clearance of purchases and
    sales of  securities, except  that  the Fund  may  make margin  deposits  in
    connection  with its use of financial  options and futures, forward and spot
    currency contracts,  swap  transactions  and other  financial  contracts  or
    derivative instruments; or
        (5)  Mortgage, pledge, or  hypothecate any of  its assets, provided that
    this shall not apply  to the transfer of  securities in connection with  any
    permissible  borrowing  or  to collateral  arrangements  in  connection with
    permissible activities.
A Fund will not knowingly exercise  rights or otherwise acquire securities  when
to  do so would jeopardize the Fund's status under the 1940 Act as a diversified
investment company.  A  Fund may  exchange  securities, exercise  conversion  or
subscription  rights, warranties,  or other rights  to purchase  common stock or
other equity securities and may hold, except  to the extent limited by the  1940
Act,  any such  securities so acquired  without regard to  the Fund's investment
policies and restrictions. The original cost of the securities so acquired  will
be  included in  any subsequent  determination of  a Fund's  compliance with the
investment  percentage  limitations  referred  to   above  and  in  the   Funds'
Prospectus.
INFRASTRUCTURE FUND AND NATURAL RESOURCES FUND
FUNDAMENTAL INVESTMENT LIMITATIONS.
Neither Fund may:
        (1)  Purchase or sell real estate, except that investments in securities
    of issuers that  invest in  real estate and  investments in  mortgage-backed
    securities,  mortgage  participations  or  other  instruments  supported  by
    interests in real estate are not subject to this limitation, and except that
    the Fund may exercise rights  under agreements relating to such  securities,
    including  the right to  enforce security interests and  to hold real estate
    acquired by  reason  of such  enforcement  until  that real  estate  can  be
    liquidated in an orderly manner;
        (2)  Purchase or sell  physical commodities, but  the Fund may purchase,
    sell or enter into financial options and futures, forward and spot  currency
    contracts,  swap transactions  and other  financial contracts  or derivative
    instruments;
        (3) Engage in the business of underwriting securities of other  issuers,
    except  to the extent that the Fund might be considered an underwriter under
    the federal securities laws in connection with its disposition of  portfolio
    securities;
        (4)  Make loans, except through loans of portfolio securities or through
    repurchase agreements, provided  that for purposes  of this limitation,  the
    acquisition  of bonds, debentures, other  debt securities or instruments, or
    participations or  other interests  therein  and investments  in  government
    obligations, commercial paper, certificates of deposit, bankers' acceptances
    or similar instruments will not be considered the making of a loan;
        (5)  Issue senior securities or borrow  money, except as permitted under
    the 1940 Act and then  not in excess of 33  1/3% of the Fund's total  assets
    (including   the  amount  borrowed  but   reduced  by  any  liabilities  not
    constituting borrowings) at the time of the borrowing, except that the  Fund
    may  borrow up to  an additional 5%  of its total  assets (not including the
    amount borrowed) for temporary or emergency purposes; or
 
                  Statement of Additional Information Page 41
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
        (6) Purchase securities of any only issuer if, as a result, more than 5%
    of the Fund's total assets would be invested in securities of that issuer or
    the Fund  would  own  or  hold  more than  10%  of  the  outstanding  voting
    securities  of that issuer, except that up to 25% of the Fund's total assets
    may be invested  without regard  to this  limitation, and  except that  this
    limitation  does not  apply to securities  issued or guaranteed  by the U.S.
    government, its agencies  or instrumentalities  or to  securities issued  by
    other investment companies.
Notwithstanding any other investment policy of the Fund, the Fund may invest all
of   its  investable  assets  (cash,   securities  and  receivables  related  to
securities) in an  open-end management investment  company having  substantially
the same investment objective, policies and limitations as the Fund.
NONFUNDAMENTAL INVESTMENT LIMITATIONS.
Neither Fund may:
        (1)  Invest in securities of an issuer if the investment would cause the
    Fund to own more than 10% of any class of securities of any one issuer;
        (2) Invest  in  companies  for  the purpose  of  exercising  control  or
    management;
        (3)  Invest  more than  15% of  its net  assets in  illiquid securities,
    including securities that are illiquid by virtue of the absence of a readily
    available market;
        (4) Enter into a futures contract,  an option on a futures contract,  or
    an  option on foreign currency traded  on a CFTC-regulated exchange, in each
    case other than for bona fide hedging purposes (as defined by the CFTC),  if
    the aggregate initial margin and premiums required to establish all of those
    positions (excluding the amount by which options are "in-the-money") exceeds
    5% of the liquidation value of a Fund's portfolio, after taking into account
    unrealized  profits  and unrealized  losses on  any  contracts the  Fund has
    entered into;
        (5) Borrow money  except for  temporary or emergency  purposes (not  for
    leveraging)  in excess of 33  1/3% of the value  of the Fund's total assets.
    While borrowings exceed 5% of the Infrastructure Fund's or Natural Resources
    Fund's total assets, such Fund will not make any additional investments;
        (6) Invest  more  than  10% of  its  total  assets in  shares  of  other
    investment  companies and may not invest more than 5% of its total assets in
    any one investment company or acquire more than 3% of the outstanding voting
    securities of any one investment company;
        (7) Purchase securities  on margin,  provided that the  Fund may  obtain
    short-term  credits as may  be necessary for the  clearance of purchases and
    sales of  securities, except  that  the Fund  may  make margin  deposits  in
    connection  with its use of financial  options and futures, forward and spot
    currency contracts,  swap  transactions  and other  financial  contracts  or
    derivative instruments; or
        (8)  Mortgage, pledge, or  hypothecate any of  its assets, provided that
    this shall not apply  to the transfer of  securities in connection with  any
    permissible  borrowing  or  to collateral  arrangements  in  connection with
    permissible activities.
TELECOMMUNICATIONS FUND
FUNDAMENTAL INVESTMENT LIMITATIONS.
The Fund may not:
        (1) Invest  25%  or  more of  the  value  of its  total  assets  in  the
    securities  of issuers conducting their principal business activities in the
    same industry, other than the telecommunications industry, except that  this
    limitation  shall  not  apply  to  securities  issued  or  guaranteed  as to
    principal and interest  by the  U.S. government or  any of  its agencies  or
    instrumentalities;
        (2)  Purchase or sell real estate, except that investments in securities
    of issuers that  invest in  real estate and  investments in  mortgage-backed
    securities,  mortgage  participations  or  other  instruments  supported  by
    interests in real estate are not subject to this limitation, and except that
    the Fund may exercise rights  under agreements relating to such  securities,
    including  the right to  enforce security interests and  to hold real estate
    acquired by  reason  of such  enforcement  until  that real  estate  can  be
    liquidated in an orderly manner;
 
                  Statement of Additional Information Page 42
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                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
        (3)  Purchase or sell  physical commodities, but  the Fund may purchase,
    sell or enter into financial options and futures, forward and spot  currency
    contracts,  swap transactions  and other  financial contracts  or derivative
    instruments;
        (4) Engage in the business of underwriting securities of other  issuers,
    except  to the extent that the Fund might be considered an underwriter under
    the federal securities laws in connection with its disposition of  portfolio
    securities;
        (5)  Make loans, except through loans of portfolio securities or through
    repurchase agreements, provided  that for purposes  of this limitation,  the
    acquisition  of bonds, debentures, other  debt securities or instruments, or
    participations or  other interests  therein  and investments  in  government
    obligations, commercial paper, certificates of deposit, bankers' acceptances
    or similar instruments will not be considered the making of a loan;
        (6)  Issue senior securities or borrow  money, except as permitted under
    the 1940 Act and then  not in excess of 33  1/3% of the Fund's total  assets
    (including   the  amount  borrowed  but   reduced  by  any  liabilities  not
    constituting borrowings) at the time of the borrowing, except that the  Fund
    may  borrow up to  an additional 5%  of its total  assets (not including the
    amount borrowed) for temporary or emergency purposes; or
        (7) Purchase securities of any only issuer if, as a result, more than 5%
    of the Fund's total assets would be invested in securities of that issuer or
    the Fund  would  own  or  hold  more than  10%  of  the  outstanding  voting
    securities  of that issuer, except that up to 25% of the Fund's total assets
    may be invested  without regard  to this  limitation, and  except that  this
    limitation  does not  apply to securities  issued or guaranteed  by the U.S.
    government, its agencies  or instrumentalities  or to  securities issued  by
    other investment companies.
Notwithstanding any other investment policy of the Fund, the Fund may invest all
of   its  investable  assets  (cash,   securities  and  receivables  related  to
securities) in an  open-end management investment  company having  substantially
the same investment objective, policies and limitations as the Fund.
NONFUNDAMENTAL INVESTMENT LIMITATIONS.
The Fund may not:
        (1)  Invest in securities of an issuer if the investment would cause the
    Fund to own more than 10% of any class of securities of any one issuer;
        (2) Invest  in  companies  for  the purpose  of  exercising  control  or
    management;
        (3)  Invest  more than  15% of  its net  assets in  illiquid securities,
    including securities that are illiquid by virtue of the absence of a readily
    available market;
        (4) Enter into a futures contract,  an option on a futures contract,  or
    an  option on foreign currency traded  on a CFTC-regulated exchange, in each
    case other than for bona fide hedging purposes (as defined by the CFTC),  if
    the aggregate initial margin and premiums required to establish all of those
    positions (excluding the amount by which options are "in-the-money") exceeds
    5%  of  the liquidation  value of  the Fund's  portfolio, after  taking into
    account unrealized profits and unrealized  losses on any contracts the  Fund
    has entered into;
        (5)  Borrow money  except for temporary  or emergency  purposes (not for
    leveraging) not  in excess  of 33  1/3% of  the value  of the  Fund's  total
    assets. While borrowings exceed 5% of the Fund's total assets, the Fund will
    not make any additional investments;
        (6)  Purchase securities  on margin, provided  that the  Fund may obtain
    short-term credits as may  be necessary for the  clearance of purchases  and
    sales  of  securities, except  that  the Fund  may  make margin  deposits in
    connection with its use of financial  options and futures, forward and  spot
    currency  contracts,  swap  transactions and  other  financial  contracts or
    derivative instruments; or
        (7) Mortgage, pledge, or  hypothecate any of  its assets, provided  that
    this  shall not apply to  the transfer of securities  in connection with any
    permissible borrowing  or  to  collateral arrangements  in  connection  with
    permissible activities.
 
                  Statement of Additional Information Page 43
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
EMERGING MARKETS FUND
FUNDAMENTAL INVESTMENT LIMITATIONS.
    The Fund may not:
        (1)  Purchase any security if, as a result of that purchase, 25% or more
    of the Fund's total assets would be invested in securities of issuers having
    their principal business activities in  the same industry, except that  this
    limitation  does not  apply to securities  issued or guaranteed  by the U.S.
    government, its agencies or instrumentalities;
        (2) Purchase or sell real estate, except that investments in  securities
    of  issuers that  invest in real  estate and  investments in mortgage-backed
    securities,  mortgage  participations  or  other  instruments  supported  by
    interests in real estate are not subject to this limitation, and except that
    the  Fund may exercise rights under  agreements relating to such securities,
    including the right to  enforce security interests and  to hold real  estate
    acquired  by  reason  of such  enforcement  until  that real  estate  can be
    liquidated in an orderly manner;
        (3) Purchase or sell  physical commodities, but  the Fund may  purchase,
    sell  or enter into financial options and futures, forward and spot currency
    contracts, swap  transactions and  other financial  contracts or  derivative
    instruments;
        (4)  Engage in the business of underwriting securities of other issuers,
    except to the extent that the Fund might be considered an underwriter  under
    the  federal securities laws in connection with its disposition of portfolio
    securities;
        (5) Make loans, except through loans of portfolio securities or  through
    repurchase  agreements, provided that  for purposes of  this limitation, the
    acquisition of bonds, debentures, other  debt securities or instruments,  or
    participations  or  other interests  therein  and investments  in government
    obligations, commercial paper, certificates of deposit, bankers' acceptances
    or similar instruments will not be considered the making of a loan;
        (6) Issue senior securities or  borrow money, except as permitted  under
    the  1940 Act and then not  in excess of 33 1/3%  of the Fund's total assets
    (including  the  amount  borrowed  but   reduced  by  any  liabilities   not
    constituting  borrowings) at the time of the borrowing, except that the Fund
    may borrow up to  an additional 5%  of its total  assets (not including  the
    amount borrowed) for temporary or emergency purposes; or
        (7) Purchase securities of any only issuer if, as a result, more than 5%
    of the Fund's total assets would be invested in securities of that issuer or
    the  Fund  would  own  or  hold more  than  10%  of  the  outstanding voting
    securities of that issuer, except that up to 25% of the Fund's total  assets
    may  be invested  without regard  to this  limitation, and  except that this
    limitation does not  apply to securities  issued or guaranteed  by the  U.S.
    government,  its agencies  or instrumentalities  or to  securities issued by
    other investment companies.
Notwithstanding any other investment policy of the Fund, the Fund may invest all
of  its  investable  assets  (cash,   securities  and  receivables  related   to
securities)  in an  open-end management investment  company having substantially
the same investment objective, policies and limitations as the Fund.
NONFUNDAMENTAL INVESTMENT LIMITATIONS.
The Fund may not:
        (1) Invest in securities of an issuer if the investment would cause  the
    Fund to own more than 10% of any class of securities of any one issuer;
        (2)  Invest  in  companies  for the  purpose  of  exercising  control or
    management;
        (3) Enter into a futures contract,  an option on a futures contract,  or
    an  option on  foreign currency traded  on CFTC-regulated  exchange, in each
    case other than for bona fide hedging purposes (as defined by the CFTC),  if
    the aggregate initial margin and premiums required to establish all of those
    positions (excluding the amount by which options are "in-the-money") exceeds
    5%  of  the liquidation  value of  the Fund's  portfolio, after  taking into
    account unrealized profits and unrealized  losses on any contracts the  Fund
    has entered into;
        (4)  Borrow money, except  for temporary or  emergency purposes (not for
    leveraging) not in excess of 33 1/3% of the value of the Fund's total assets
    and except that the Fund may purchase securities when outstanding borrowings
    represent no more than 5% of the Fund's assets;
 
                  Statement of Additional Information Page 44
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
        (5) Purchase securities  on margin,  provided that the  Fund may  obtain
    short-term  credits as may  be necessary for the  clearance of purchases and
    sales of  securities, except  that  the Fund  may  make margin  deposits  in
    connection  with its use of financial  options and futures, forward and spot
    currency contracts,  swap  transactions  and other  financial  contracts  or
    derivative instruments; or
        (6)  Mortgage, pledge, or  hypothecate any of  its assets, provided that
    this shall not apply  to the transfer of  securities in connection with  any
    permissible  borrowing  or  to collateral  arrangements  in  connection with
    permissible activities.
LATIN AMERICA FUND
FUNDAMENTAL INVESTMENT LIMITATIONS.
The Fund may not:
        (1) Purchase any security if, as a result of that purchase, 25% or  more
    of the Fund's total assets would be invested in securities of issuers having
    their  principal business activities in the  same industry, except that this
    limitation does not  apply to securities  issued or guaranteed  by the  U.S.
    government, its agencies or instrumentalities;
        (2)  Purchase or sell real estate, except that investments in securities
    of issuers that  invest in  real estate and  investments in  mortgage-backed
    securities,  mortgage  participations  or  other  instruments  supported  by
    interests in real estate are not subject to this limitation, and except that
    the Fund may exercise rights  under agreements relating to such  securities,
    including  the right to  enforce security interests and  to hold real estate
    acquired by  reason  of such  enforcement  until  that real  estate  can  be
    liquidated in an orderly manner;
        (3)  Engage in the business of underwriting securities of other issuers,
    except to the extent that the Fund might be considered an underwriter  under
    the  federal securities laws in connection with its disposition of portfolio
    securities;
        (4) Make loans, except through loans of portfolio securities or  through
    repurchase  agreements, provided that  for purposes of  this limitation, the
    acquisition of bonds, debentures, other  debt securities or instruments,  or
    participations  or  other interests  therein  and investments  in government
    obligations, commercial paper, certificates of deposit, bankers' acceptances
    or similar instruments will not be considered the making of a loan;
        (5) Issue senior securities or  borrow money, except as permitted  under
    the  1940 Act and then not  in excess of 33 1/3%  of the Fund's total assets
    (including  the  amount  borrowed  but   reduced  by  any  liabilities   not
    constituting  borrowings) at the time of the borrowing, except that the Fund
    may borrow up to  an additional 5%  of its total  assets (not including  the
    amount borrowed) for temporary or emergency purposes; or
        (6)  Purchase or sell  physical commodities, but  the Fund may purchase,
    sell or enter into financial options and futures, forward and spot  currency
    contracts,  swap transactions  and other  financial contracts  or derivative
    instruments.
Notwithstanding any other investment policy of the Fund, the Fund may invest all
of  its  investable  assets  (cash,   securities  and  receivables  related   to
securities)  in an  open-end management investment  company having substantially
the same investment objective, policies and limitations as the Fund.
NONFUNDAMENTAL INVESTMENT LIMITATIONS.
The Fund may not:
        (1) Invest in securities of an issuer if the investment would cause  the
    Fund to own more than 10% of any class of securities of any one issuer;
        (2)  Invest  in  companies  for the  purpose  of  exercising  control or
    management;
        (3) Invest  more than  15% of  its net  assets in  illiquid  securities,
    including securities that are illiquid by virtue of the absence of a readily
    available market;
        (4)  Enter into a futures contract, an  option on a futures contract, or
    an option on foreign currency traded  on a CFTC-regulated exchange, in  each
    case  other than for bona fide hedging purposes (as defined by the CFTC), if
    the aggregate initial margin and premiums required to establish all of those
    positions (excluding the amount by which options are "in-the-money") exceeds
    5% of  the liquidation  value of  the Fund's  portfolio, after  taking  into
    account  unrealized profits and unrealized losses  on any contracts the Fund
    has entered into;
 
                  Statement of Additional Information Page 45
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
        (5) Purchase securities  on margin,  provided that the  Fund may  obtain
    short-term  credits as may  be necessary for the  clearance of purchases and
    sales of  securities, except  that  the Fund  may  make margin  deposits  in
    connection  with its use of financial  options and futures, forward and spot
    currency contracts,  swap  transactions  and other  financial  contracts  or
    derivative instruments;
        (6)  Mortgage, pledge, or  hypothecate any of  its assets, provided that
    this shall not apply  to the transfer of  securities in connection with  any
    permissible  borrowing  or  to collateral  arrangements  in  connection with
    permissible activities; or
        (7) Borrow  money  except for  temporary  or emergency  purposes.  While
    borrowings  exceed 5% of the Fund's total assets, the Fund will not make any
    additional investments.
GROWTH & INCOME FUND
FUNDAMENTAL INVESTMENT LIMITATIONS.
The Fund may not:
        (1) Purchase any security if, as a result of that purchase, 25% or  more
    of the Fund's total assets would be invested in securities of issuers having
    their  principal business activities in the  same industry, except that this
    limitation does not  apply to securities  issued or guaranteed  by the  U.S.
    government, its agencies or instrumentalities;
        (2)  Purchase or sell real estate, except that investments in securities
    of issuers that  invest in  real estate and  investments in  mortgage-backed
    securities,  mortgage  participations  or  other  instruments  supported  by
    interests in real estate are not subject to this limitation, and except that
    the Fund may exercise rights  under agreements relating to such  securities,
    including  the right to  enforce security interests and  to hold real estate
    acquired by  reason  of such  enforcement  until  that real  estate  can  be
    liquidated in an orderly manner;
        (3)  Engage in the business of underwriting securities of other issuers,
    except to the extent that the Fund might be considered an underwriter  under
    the  federal securities laws in connection with its disposition of portfolio
    securities;
        (4) Make loans, except through loans of portfolio securities or  through
    repurchase  agreements, provided that  for purposes of  this limitation, the
    acquisition of bonds, debentures, other  debt securities or instruments,  or
    participations  or  other interests  therein  and investments  in government
    obligations, commercial paper, certificates of deposit, bankers' acceptances
    or similar instruments will not be considered the making of a loan;
        (5) Issue senior securities or  borrow money, except as permitted  under
    the  1940 Act and then not  in excess of 33 1/3%  of the Fund's total assets
    (including  the  amount  borrowed  but   reduced  by  any  liabilities   not
    constituting  borrowings) at the time of the borrowing, except that the Fund
    may borrow up to  an additional 5%  of its total  assets (not including  the
    amount borrowed) for temporary or emergency purposes; or
        (6)  Purchase or sell  physical commodities, but  the Fund may purchase,
    sell or enter into financial options and futures, forward and spot  currency
    contracts,  swap transactions  and other  financial contracts  or derivative
    instruments.
Notwithstanding any other investment policy of the Fund, the Fund may invest all
of  its  investable  assets  (cash,   securities  and  receivables  related   to
securities)  in an  open-end management investment  company having substantially
the same investment objective, policies and limitations as the Fund.
NONFUNDAMENTAL INVESTMENT LIMITATIONS.
The Fund may not:
        (1) Invest in securities of an issuer if the investment would cause  the
    Fund to own more than 10% of any class of securities of any one issuer;
        (2)   Sell  securities  short,  except  to  the  extent  that  the  Fund
    contemporaneously owns or  has the right  to acquire at  no additional  cost
    securities identical to those sold short;
        (3)  Enter into a futures contract, an  option on a futures contract, or
    an option on foreign currency traded  on a CFTC-regulated exchange, in  each
    case  other than for bona fide hedging purposes (as defined by the CFTC), if
    the aggregate initial margin and premiums required to establish all of those
    positions (excluding the amount by which
 
                  Statement of Additional Information Page 46
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
    options are "in-the-money") exceeds 5% of the liquidation value of a  Fund's
    portfolio,  after  taking  into account  unrealized  profits  and unrealized
    losses on any contracts the Fund has entered into;
        (4) Purchase securities  on margin,  provided that the  Fund may  obtain
    short-term  credits as may  be necessary for the  clearance of purchases and
    sales of  securities, except  that  the Fund  may  make margin  deposits  in
    connection  with its use of financial  options and futures, forward and spot
    currency contracts,  swap  transactions  and other  financial  contracts  or
    derivative instruments;
        (5)  Purchase securities for which there is no readily available market,
    or enter into repurchase  agreements or purchase  time deposits maturing  in
    more  than seven days, or  purchase OTC options or  hold assets set aside to
    cover OTC options written by the Fund, if immediately after and as a result,
    the value of  such securities  would exceed, in  the aggregate,  15% of  the
    Fund's net assets;
        (6)  Mortgage, pledge, or  hypothecate any of  its assets, provided that
    this shall not apply  to the transfer of  securities in connection with  any
    permissible  borrowing  or  to collateral  arrangements  in  connection with
    permissible activities; or
        (7) Borrow  money  except for  temporary  or emergency  purposes.  While
    borrowings  exceed 5% of the Fund's total assets, the Fund will not make any
    additional investments.
STRATEGIC INCOME FUND
FUNDAMENTAL INVESTMENT LIMITATIONS.
The Fund may not:
        (1) Purchase any security if, as a result of that purchase, 25% or  more
    of the Fund's total assets would be invested in securities of issuers having
    their  principal business activities in the  same industry, except that this
    limitation does not  apply to securities  issued or guaranteed  by the  U.S.
    government, its agencies or instrumentalities;
        (2)  Purchase or sell real estate, except that investments in securities
    of issuers that  invest in  real estate and  investments in  mortgage-backed
    securities,  mortgage  participations  or  other  instruments  supported  by
    interests in real estate are not subject to this limitation, and except that
    the Fund may exercise rights  under agreements relating to such  securities,
    including  the right to  enforce security interests and  to hold real estate
    acquired by  reason  of such  enforcement  until  that real  estate  can  be
    liquidated in an orderly manner;
        (3)  Engage in the business of underwriting securities of other issuers,
    except to the extent that the Fund might be considered an underwriter  under
    the  federal securities laws in connection with its disposition of portfolio
    securities;
        (4) Make loans, except through loans of portfolio securities or  through
    repurchase  agreements, provided that  for purposes of  this limitation, the
    acquisition of bonds, debentures, other  debt securities or instruments,  or
    participations  or  other interests  therein  and investments  in government
    obligations, commercial paper, certificates of deposit, bankers' acceptances
    or similar instruments will not be considered the making of a loan;
        (5) Issue senior securities or  borrow money, except as permitted  under
    the  1940 Act and then not  in excess of 33 1/3%  of the Fund's total assets
    (including  the  amount  borrowed  but   reduced  by  any  liabilities   not
    constituting  borrowings) at the time of the borrowing, except that the Fund
    may borrow up to  an additional 5%  of its total  assets (not including  the
    amount borrowed) for temporary or emergency purposes; or
        (6)  Purchase or sell  physical commodities, but  the Fund may purchase,
    sell or enter into financial options and futures, forward and spot  currency
    contracts,  swap transactions  and other  financial contracts  or derivative
    instruments.
Notwithstanding any other investment policy of the Fund, the Fund may invest all
of  its  investable  assets  (cash,   securities  and  receivables  related   to
securities)  in an  open-end management investment  company having substantially
the same investment objective, policies and limitations as the Fund.
NONFUNDAMENTAL INVESTMENT LIMITATIONS.
The Fund may not:
        (1) Invest more than 15% of its net assets in illiquid securities;
 
                  Statement of Additional Information Page 47
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
        (2) Invest in securities of an issuer if the investment would cause  the
    Fund to own more than 10% of any class of securities of any one issuer;
        (3)  Purchase securities  on margin, provided  that the  Fund may obtain
    short-term credits as may  be necessary for the  clearance of purchases  and
    sales  of  securities, except  that  the Fund  may  make margin  deposits in
    connection with its use of financial  options and futures, forward and  spot
    currency  contracts,  swap  transactions and  other  financial  contracts or
    derivative instruments;
        (4) Enter into a futures contract, if, as a result thereof, more than 5%
    of the Fund's total assets  (taken at market value  at the time of  entering
    into  the contract) would be committed  to margin on such futures contracts;
    or
        (5) Mortgage, pledge, or  hypothecate any of  its assets, provided  that
    this  shall not apply to  the transfer of securities  in connection with any
    permissible borrowing  or  to  collateral arrangements  in  connection  with
    permissible activities.
GLOBAL GOVERNMENT INCOME FUND
FUNDAMENTAL INVESTMENT LIMITATIONS.
The Fund may not:
        (1)  Purchase any security if, as a result of that purchase, 25% or more
    of the Fund's total assets would be invested in securities of issuers having
    their principal business activities in  the same industry, except that  this
    limitation  does not  apply to securities  issued or guaranteed  by the U.S.
    government, its agencies or instrumentalities;
        (2) Purchase or sell real estate, except that investments in  securities
    of  issuers that  invest in real  estate and  investments in mortgage-backed
    securities,  mortgage  participations  or  other  instruments  supported  by
    interests in real estate are not subject to this limitation, and except that
    the  Fund may exercise rights under  agreements relating to such securities,
    including the right to  enforce security interests and  to hold real  estate
    acquired  by  reason  of such  enforcement  until  that real  estate  can be
    liquidated in an orderly manner;
        (3) Engage in the business of underwriting securities of other  issuers,
    except  to the extent that the Fund might be considered an underwriter under
    the federal securities laws in connection with its disposition of  portfolio
    securities;
        (4)  Make loans, except through loans of portfolio securities or through
    repurchase agreements, provided  that for purposes  of this limitation,  the
    acquisition  of bonds, debentures, other  debt securities or instruments, or
    participations or  other interests  therein  and investments  in  government
    obligations, commercial paper, certificates of deposit, bankers' acceptances
    or similar instruments will not be considered the making of a loan;
        (5)  Purchase or sell  physical commodities, but  the Fund may purchase,
    sell or enter into financial options and futures, forward and spot  currency
    contracts,  swap transactions  and other  financial contracts  or derivative
    instruments; or
        (6) Issue senior securities or  borrow money, except as permitted  under
    the  1940 Act and then not  in excess of 33 1/3%  of the Fund's total assets
    (including  the  amount  borrowed  but   reduced  by  any  liabilities   not
    constituting  borrowings) at the time of the borrowing, except that the Fund
    may borrow up to  an additional 5%  of its total  assets (not including  the
    amount borrowed) for temporary or emergency purposes.
Notwithstanding any other investment policy of the Fund, the Fund may invest all
of   its  investable  assets  (cash,   securities  and  receivables  related  to
securities) in an  open-end management investment  company having  substantially
the same investment objective, policies and limitations as the Fund.
NONFUNDAMENTAL INVESTMENT LIMITATIONS.
The Fund will not:
        (1)  Invest in securities of an issuer if the investment would cause the
    Fund to own more than 10% of any class of securities of any one issuer;
        (2) Purchase securities  on margin,  provided that the  Fund may  obtain
    short-term  credits as may  be necessary for the  clearance of purchases and
    sales of  securities, except  that  the Fund  may  make margin  deposits  in
    connection  with its use of financial  options and futures, forward and spot
    currency contracts,  swap  transactions  and other  financial  contracts  or
    derivative instruments;
 
                  Statement of Additional Information Page 48
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
        (3) Enter into a futures contract, if, as a result thereof, more than 5%
    of  the Fund's total assets  (taken at market value  at the time of entering
    into the contract) would be committed to margin on such futures contracts;
        (4) Purchase securities for which there is no readily available  market,
    or  enter into repurchase  agreements or purchase  time deposits maturing in
    more than seven days, or  purchase OTC options or  hold assets set aside  to
    cover OTC options written by the Fund, if immediately after and as a result,
    the  value of  such securities  would exceed, in  the aggregate,  15% of the
    Fund's net assets;
        (5) Mortgage, pledge, or  hypothecate any of  its assets, provided  that
    this  shall not apply to  the transfer of securities  in connection with any
    permissible borrowing  or  to  collateral arrangements  in  connection  with
    permissible activities; or
        (6)  Borrow  money except  for  temporary or  emergency  purposes. While
    borrowings exceed 5% of the Fund's total assets, the Fund will not make  any
    additional investments.
U.S. GOVERNMENT INCOME FUND
FUNDAMENTAL INVESTMENT LIMITATIONS.
The Fund may not:
        (1)  Purchase any security if, as a result of that purchase, 25% or more
    of the Fund's total assets would be invested in securities of issuers having
    their principal business activities in  the same industry, except that  this
    limitation  does not  apply to securities  issued or guaranteed  by the U.S.
    government, its agencies or instrumentalities;
        (2) Purchase or sell real estate, except that investments in  securities
    of  issuers that  invest in real  estate and  investments in mortgage-backed
    securities,  mortgage  participations  or  other  instruments  supported  by
    interests in real estate are not subject to this limitation, and except that
    the  Fund may exercise rights under  agreements relating to such securities,
    including the right to  enforce security interests and  to hold real  estate
    acquired  by  reason  of such  enforcement  until  that real  estate  can be
    liquidated in an orderly manner;
        (3) Engage in the business of underwriting securities of other  issuers,
    except  to the extent that the Fund might be considered an underwriter under
    the federal securities laws in connection with its disposition of  portfolio
    securities;
        (4)  Make loans, except through loans of portfolio securities or through
    repurchase agreements, provided  that for purposes  of this limitation,  the
    acquisition  of bonds, debentures, other  debt securities or instruments, or
    participations or  other interests  therein  and investments  in  government
    obligations, commercial paper, certificates of deposit, bankers' acceptances
    or similar instruments will not be considered the making of a loan;
        (5)  Issue senior securities or borrow  money, except as permitted under
    the 1940 Act and then  not in excess of 33  1/3% of the Fund's total  assets
    (including   the  amount  borrowed  but   reduced  by  any  liabilities  not
    constituting borrowings) at the time of the borrowing, except that the  Fund
    may  borrow up to  an additional 5%  of its total  assets (not including the
    amount borrowed) for temporary or emergency purposes;
        (6) Purchase or sell  physical commodities, but  the Fund may  purchase,
    sell  or enter into financial options and futures, forward and spot currency
    contracts, swap  transactions and  other financial  contracts or  derivative
    instruments; or
        (7) Purchase securities of any only issuer if, as a result, more than 5%
    of the Fund's total assets would be invested in securities of that issuer or
    the  Fund  would  own  or  hold more  than  10%  of  the  outstanding voting
    securities of that issuer, except that up to 25% of the Fund's total  assets
    may  be invested  without regard  to this  limitation, and  except that this
    limitation does not  apply to securities  issued or guaranteed  by the  U.S.
    government,  its agencies  or instrumentalities  or to  securities issued by
    other investment companies.
Notwithstanding any other investment policy of the Fund, the Fund may invest all
of  its  investable  assets  (cash,   securities  and  receivables  related   to
securities)  in an  open-end management investment  company having substantially
the same investment objective, policies and limitations as the Fund.
NONFUNDAMENTAL INVESTMENT LIMITATIONS.
The Fund may not:
        (1) Invest  in  companies  for  the purpose  of  exercising  control  or
    management;
 
                  Statement of Additional Information Page 49
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
        (2) Invest more than 15% of its net assets in illiquid securities;
        (3)  Invest in securities of an issuer if the investment would cause the
    Fund to own more than 10% of any class of securities of any one issuer;
        (4) Enter into a futures contract,  an option on a futures contract,  or
    an  option on foreign currency traded  on a CFTC-regulated exchange, in each
    case other than for bona fide hedging purposes (as defined by the CFTC),  if
    the aggregate initial margin and premiums required to establish all of those
    positions (excluding the amount by which options are "in-the-money") exceeds
    5%  of  the liquidation  value of  the Fund's  portfolio, after  taking into
    account unrealized profits and unrealized  losses on any contracts the  Fund
    has entered into;
        (5)  Purchase securities  on margin, provided  that the  Fund may obtain
    short-term credits as may  be necessary for the  clearance of purchases  and
    sales  of  securities, except  that  the Fund  may  make margin  deposits in
    connection with its use of financial  options and futures, forward and  spot
    currency  contracts,  swap  transactions and  other  financial  contracts or
    derivative instruments; or
        (6) Mortgage, pledge, or  hypothecate any of  its assets, provided  that
    this  shall not apply to  the transfer of securities  in connection with any
    permissible borrowing  or  to  collateral arrangements  in  connection  with
    permissible activities.
MONEY MARKET FUND
FUNDAMENTAL INVESTMENT LIMITATIONS.
The Fund may not:
        (1)  Issue senior securities or borrow  money, except as permitted under
    the 1940 Act and then  not in excess of 33  1/3% of the Fund's total  assets
    (including   the  amount  borrowed  but   reduced  by  any  liabilities  not
    constituting borrowings) at the time of the borrowing, except that the  Fund
    may  borrow up to  an additional 5%  of its total  assets (not including the
    amount borrowed) for temporary or emergency purposes;
        (2) Engage in the business of underwriting securities of other  issuers,
    except  to the extent that the Fund might be considered an underwriter under
    the federal securities laws in connection with its disposition of  portfolio
    securities;
        (3)  Purchase or sell real estate, except that investments in securities
    of issuers that  invest in  real estate and  investments in  mortgage-backed
    securities,  mortgage  participations  or  other  instruments  supported  by
    interests in real estate are not subject to this limitation, and except that
    the Fund may exercise rights  under agreements relating to such  securities,
    including  the right to  enforce security interests and  to hold real estate
    acquired by  reason  of such  enforcement  until  that real  estate  can  be
    liquidated in an orderly manner;
        (4)  Make loans, except through loans of portfolio securities or through
    repurchase agreements, provided  that for purposes  of this limitation,  the
    acquisition  of bonds, debentures, other  debt securities or instruments, or
    participations or  other interests  therein  and investments  in  government
    obligations, commercial paper, certificates of deposit, bankers' acceptances
    or similar instruments will not be considered the making of a loan;
        (5)  Purchase any security if, as a result of that purchase, 25% or more
    of the Fund's total assets would be invested in securities of issuers having
    their principal business activities in  the same industry, except that  this
    limitation  does not  apply to securities  issued or guaranteed  by the U.S.
    government, its agencies or instrumentalities;
        (6) Purchase or sell  physical commodities, but  the Fund may  purchase,
    sell  or enter into financial options and futures, forward and spot currency
    contracts, swap  transactions and  other financial  contracts or  derivative
    instruments; or
        (7) Purchase securities of any only issuer if, as a result, more than 5%
    of the Fund's total assets would be invested in securities of that issuer or
    the  Fund  would  own  or  hold more  than  10%  of  the  outstanding voting
    securities of that issuer, except that up to 25% of the Fund's total  assets
    may  be invested  without regard  to this  limitation, and  except that this
    limitation does not  apply to securities  issued or guaranteed  by the  U.S.
    government,  its agencies  or instrumentalities  or to  securities issued by
    other investment companies.
Notwithstanding any other investment policy of the Fund, the Fund may invest all
of  its  investable  assets  (cash,   securities  and  receivables  related   to
securities)  in an  open-end management investment  company having substantially
the same investment objective, policies and limitations as the Fund.
 
                  Statement of Additional Information Page 50
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
NONFUNDAMENTAL INVESTMENT LIMITATIONS
The Fund may not:
        (1) Invest more than 10% of its net assets in illiquid securities;
        (2) Purchase securities  on margin,  provided that the  Fund may  obtain
    short-term  credits as may  be necessary for the  clearance of purchases and
    sales of  securities, except  that  the Fund  may  make margin  deposits  in
    connection  with its use of financial  options and futures, forward and spot
    currency contracts,  swap  transactions  and other  financial  contracts  or
    derivative instruments; or
        (3)  Mortgage, pledge, or  hypothecate any of  its assets, provided that
    this shall not apply  to the transfer of  securities in connection with  any
    permissible  borrowing  or  to collateral  arrangements  in  connection with
    permissible activities.
ALL FUNDS
For purposes of each Fund's concentration policy (except with respect to  Growth
&  Income Fund),  the Fund intends  to comply  with the SEC  staff position that
securities issued  or guaranteed  as to  principal and  interest by  any  single
foreign  government  or any  supranational  organizations in  the  aggregate are
considered to be securities of issuers in the same industry.
If a percentage restriction  is adhered to  at the time  of investment, a  later
increase  or decrease in percentage resulting from  a change in values or assets
will not constitute a violation of that restriction.
All of the Funds have the following investment policies, which may be changed by
the Company's Board of Trustees without shareholder or investor approval:
No Fund may:
        (1) Hold assets of any issuers, at  the end of any calendar quarter  (or
    within 30 days thereafter), to the extent such holdings would cause the Fund
    to fail to comply with the diversification requirements for segregated asset
    accounts  used to fund variable annuity  contracts imposed by Section 817(h)
    of the Code and the Treasury regulations issued thereunder; or
        (2) Except under  unusual circumstances, purchase  securities issued  by
    investment  companies  unless they  are issued  by  companies that  follow a
    policy of investment primarily  in the capital markets  of a single  foreign
    entity.
Policies  that are  designated as  operating policies  may be  changed only upon
approval  by  the  Board  of  Trustees  and  following  appropriate  notice   to
shareholders.
 
- --------------------------------------------------------------------------------
                             EXECUTION OF PORTFOLIO
                                  TRANSACTIONS
- --------------------------------------------------------------------------------
Subject  to policies established  by each Trust's Board  of Trustees, AIM and/or
the sub-advisors  are responsible  for the  execution of  the Funds'  securities
transactions  and the selection of  broker/dealers who execute such transactions
on behalf of the Funds. In  executing transactions, AIM and/or the  sub-advisors
seek the best net results for each Fund, taking into account such factors as the
price  (including the applicable brokerage commission or dealer spread), size of
the order,  difficulty  of execution  and  operational facilities  of  the  firm
involved.   While  AIM   and/or  the  sub-advisors   generally  seek  reasonably
competitive commission rates and  spreads, payment of  the lowest commission  or
spread  is not necessarily consistent with the best net results. While the Funds
may engage  in soft  dollar  arrangements for  research services,  as  described
below,  the Funds have no obligation to deal  with any broker or dealer or group
of brokers or dealers in the execution of securities transactions.
Consistent with the  interests of  the Funds,  AIM and/or  the sub-advisors  may
select  brokers on the basis of the research and brokerage services they provide
to AIM and/or the  sub-advisors for their  use in managing  the Funds and  their
other  advisory accounts. Such services may include furnishing analyses, reports
and information concerning issuers, industries,
 
                  Statement of Additional Information Page 51
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
securities, geographic regions, economic factors and trends, portfolio strategy,
and  performance  of  accounts;   and  effecting  securities  transactions   and
performing  functions  incidental thereto  (such  as clearance  and settlement).
Research and brokerage services received from  such brokers are in addition  to,
and  not in  lieu of, the  services required to  be performed by  AIM and/or the
sub-advisors  under  investment  management  and  administration  contracts.   A
commission  paid to such brokers may be higher than that which another qualified
broker would have charged for effecting the same transaction, provided that  AIM
and/or  the  sub-advisors  determine  in  good  faith  that  such  commission is
reasonable in  terms  either  of  that particular  transaction  or  the  overall
responsibility of AIM and/or the sub-advisors to the Funds and its other clients
and  that the total commissions paid by each Fund will be reasonable in relation
to the benefits received by the Funds over the long term. Research services  may
also be received from dealers who execute Fund transactions in OTC markets.
AIM   and/or   the   sub-advisors  may   allocate   brokerage   transactions  to
broker/dealers who have entered into arrangements under which the  broker/dealer
allocates  a portion of the commissions paid  by the Funds toward payment of the
Funds' expenses, such as custodian fees.
Investment decisions for each Fund and for other investment accounts managed  by
AIM  and/or the sub-advisors  are made independently  of each other  in light of
differing conditions. However, the same investment decision occasionally may  be
made  for two  or more of  such accounts, including  one or more  Funds. In such
cases simultaneous transactions may occur. Purchases or sales are then allocated
as to price  or amount in  a manner deemed  fair and equitable  to all  accounts
involved. While in some cases this practice could have a detrimental effect upon
the price or value of the security as far as a Fund is concerned, in other cases
AIM  and/or  the  sub-advisors  believe that  coordination  and  the  ability to
participate in volume transactions will be beneficial to the Funds.
Under a policy adopted  by each Trust's  Board of Trustees,  and subject to  the
policy  of  obtaining the  best  net results,  AIM  and/or the  sub-advisors may
consider a broker/dealer's sale of the shares of the Funds, and the other  funds
for  which AIM and the sub-advisors serve as investment manager or administrator
in selecting brokers and dealers  for the execution of securities  transactions.
This  policy  does not  imply a  commitment  to execute  securities transactions
through all broker/ dealers that sell shares of such funds.
Each Fund contemplates purchasing most foreign equity securities in OTC  markets
or  stock exchanges located  in the countries in  which the respective principal
offices of the issuers of the various securities are located if that is the best
available market.  The  fixed commissions  paid  in connection  with  most  such
foreign  stock transactions generally are  higher than negotiated commissions on
U.S. transactions. There generally is less government supervision and regulation
of foreign  stock exchanges  and  brokers than  in  the United  States.  Foreign
security  settlements may  in some  instances be  subject to  delays and related
administrative uncertainties.
Foreign equity securities may be held by a Fund in the form of ADRs, ADSs, EDRs,
GDRs, CDRs or securities convertible into foreign equity securities. ADRs, ADSs,
EDRs, GDRs and  CDRs may  be listed  on stock exchanges,  or traded  in the  OTC
markets  in the United  States or Europe, as  the case may  be. ADRs, like other
securities traded in the United States, will be subject to negotiated commission
rates. The foreign and domestic debt securities and money market instruments  in
which the Funds may invest are generally traded in the OTC markets.
The Funds contemplate that, consistent with the policy of obtaining the best net
results,  brokerage transactions may be conducted  through affiliates of AIM and
the sub-advisors.  Each Trust's  Board  of Trustees  has adopted  procedures  in
conformity  with Rule  17e-1 under  the 1940  Act to  ensure that  all brokerage
commissions paid to such  affiliates are reasonable and  fair in the context  of
the  market in which they are operating.  Any such transactions will be effected
and  related  compensation   paid  only  in   accordance  with  applicable   SEC
regulations.
 
                  Statement of Additional Information Page 52
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
The  aggregate brokerage  commissions paid by  the Funds for  the fiscal periods
ended December 31, 1996, 1997 and 1998, are as follows:
                          YEAR ENDED DECEMBER 31, 1996
 
<TABLE>
<S>                                                                                              <C>
America Fund...................................................................................  $ 149,008
Europe Fund....................................................................................     97,808
New Pacific Fund...............................................................................    196,708
International Fund.............................................................................     29,787
Money Market Fund..............................................................................          0
Growth & Income Fund...........................................................................     15,766
Strategic Income Fund..........................................................................      3,923
Global Government Income Fund..................................................................        496
U.S. Government Income Fund....................................................................        237
Latin America Fund.............................................................................    134,264
Telecommunications Fund........................................................................     69,333
Emerging Markets Fund..........................................................................    174,892
Infrastructure Fund............................................................................     11,718
Natural Resources Fund.........................................................................     68,778
</TABLE>
 
                          YEAR ENDED DECEMBER 31, 1997
 
<TABLE>
<S>                                                                                              <C>
America Fund...................................................................................  $ 154,355
Europe Fund....................................................................................    110,624
New Pacific Fund...............................................................................    198,849
International Fund.............................................................................     23,556
Money Market Fund..............................................................................          0
Growth & Income Fund...........................................................................     42,783
Strategic Income Fund..........................................................................        423
Global Government Income Fund..................................................................        155
U.S. Government Income Fund....................................................................         80
Latin America Fund.............................................................................    223,878
Telecommunications Fund........................................................................    123,863
Emerging Markets Fund..........................................................................    220,448
Infrastructure Fund............................................................................     14,298
Natural Resources Fund.........................................................................    156,581
</TABLE>
 
                          YEAR ENDED DECEMBER 31, 1998
 
<TABLE>
<S>                                                                                              <C>
America Fund...................................................................................  $ 188,426
Europe Fund....................................................................................    131,209
New Pacific Fund...............................................................................     95,895
International Fund.............................................................................     21,973
Money Market Fund..............................................................................          0
Growth & Income Fund...........................................................................     19,966
Strategic Income Fund..........................................................................         38
Global Government Income Fund..................................................................          0
U.S. Government Income Fund....................................................................        891
Latin America Fund.............................................................................     57,799
Telecommunications Fund........................................................................    120,189
Emerging Markets Fund..........................................................................     71,526
Infrastructure Fund............................................................................     28,285
Natural Resources Fund.........................................................................    128,935
</TABLE>
 
                  Statement of Additional Information Page 53
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
TRADING AND TURNOVER
Although each Fund does  not intend generally to  trade for short-term  profits,
the securities held by that Fund will be sold whenever management believes it is
appropriate to do so, without regard to the length of time a particular security
may have been held. Portfolio turnover rate is calculated by dividing the lesser
of  sales or purchases of portfolio  securities by each Fund's average month-end
portfolio value, excluding short-term  investments. The portfolio turnover  rate
will note a limiting factor when management deems portfolio changes appropriate.
Higher portfolio turnover involves correspondingly greater brokerage commissions
and  other transaction costs that the Fund will bear directly, and may result in
the realization of net capital gains  that are taxable when distributed to  each
Fund's  shareholders. The portfolio turnover rates  for the Funds for the fiscal
year ended December 31, 1998 and 1997, were as follows:
 
<TABLE>
<CAPTION>
                                                            YEAR ENDED
                                                           DECEMBER 31,
                                                    ---------------------------
                                                        1998           1997
                                                    ------------   ------------
<S>                                                 <C>            <C>
America Fund......................................      181%           210%
Europe Fund.......................................      107%           117%
New Pacific Fund..................................      102%            93%
International Fund................................      105%           112%
Money Market Fund.................................      N/A            N/A
Growth & Income Fund..............................       72%            60%
Strategic Income Fund.............................      282%           185%
Global Government Income Fund.....................      224%           235%
U.S. Government Income Fund.......................      231%           143%
Latin America Fund................................       43%           141%
Telecommunications Fund...........................       73%            91%
Emerging Markets Fund.............................      110%           212%
Infrastructure Fund...............................      110%            46%
Natural Resources Fund............................      305%           315%
</TABLE>
 
                  Statement of Additional Information Page 54
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
                        TRUSTEES AND EXECUTIVE OFFICERS
- --------------------------------------------------------------------------------
The Trustees  and Executive  Officers of  each Trust  are listed  below.  Unless
otherwise indicated, the address of each Executive Officer is 11 Greenway Plaza,
Suite 100, Houston, Texas 77046.
 
<TABLE>
<CAPTION>
                                     POSITIONS HELD WITH               PRINCIPAL OCCUPATION DURING AT LEAST
      NAME, ADDRESS AND AGE               REGISTRANT                             THE PAST 5 YEARS
<S>                                 <C>                     <C>
*ROBERT H. GRAHAM, (52)             Trustee, Chairman of    Director,  President and  Chief Executive  Officer, A  I M
                                    the Board and           Management Group  Inc.;  Director  and President,  A  I  M
                                    President               Advisors,  Inc.; Director and Senior Vice President, A I M
                                                            Capital Management, Inc., A I M Distributors, Inc., A I  M
                                                            Fund  Services,  Inc.  and  Fund  Management  Company; and
                                                            Director, AMVESCAP PLC.
C. DEREK ANDERSON, (57)             Trustee                 President,  Plantagenet   Capital  Management,   LLC   (an
220 Sansome Street                                          investment    partnership);   Chief   Executive   Officer,
Suite 400                                                   Plantagenet Holdings, Ltd.  (an investment banking  firm);
San Francisco, CA 94104                                     Director,  Anderson Capital  Management, Inc.  since 1988;
                                                            Director, PremiumWear, Inc.  (formerly Munsingwear,  Inc.)
                                                            (a  casual apparel company); and Director, "R" Homes, Inc.
                                                            and various other companies.
FRANK S. BAYLEY, (59)               Trustee                 Partner, law firm  of Baker &  McKenzie; and Director  and
Two Embarcadero Center                                      Chairman,  C.D.  Stimson  Company  (a  private  investment
Suite 2400                                                  company).
San Francisco, CA 94111
ARTHUR C. PATTERSON, (55)           Trustee                 Managing Partner, Accel Partners (a venture capital firm);
428 University Avenue                                       and Director,  Viasoft  and PageMart,  Inc.  (both  public
Palo Alto, CA 94301                                         software  companies)  and  several  other  privately  held
                                                            software and communications companies.
RUTH H. QUIGLEY, (64)               Trustee                 Private investor;  and  President, Quigley  Friedlander  &
1055 California Street                                      Co.,  Inc. (a financial advisory  services firm) from 1984
San Francisco, CA 94108                                     to 1986.
MELVILLE B. COX, (54)               Vice President          Vice  President  and  Chief  Compliance  Officer,  A  I  M
                                                            Advisors,  Inc., A  I M  Capital Management,  Inc., A  I M
                                                            Distributors, Inc., A  I M  Fund Services,  Inc. and  Fund
                                                            Management Company.
GARY T. CRUM, (50)                  Vice President          Director  and President,  A I M  Capital Management, Inc.;
                                                            Director and Senior Vice President, A I M Management Group
                                                            Inc. and  A  I M  Advisors,  Inc.;  and Director,  A  I  M
                                                            Distributors, Inc. and AMVESCAP PLC.
SAMUEL D. SIRKO, (39)               Vice President and      Vice  President, Assistant  General Counsel  and Assistant
                                    Secretary               Secretary, A  I M  Advisors, Inc.;  and Assistant  General
                                                            Counsel  and Assistant  Secretary, A I  M Management Group
                                                            Inc., A I M Capital Management, Inc., A I M  Distributors,
                                                            Inc.,  A  I M  Fund  Services, Inc.,  and  Fund Management
                                                            Company.
+CAROL P. RELIHAN, (43)             Vice President          Director,  Senior  Vice  President,  General  Counsel  and
                                                            Secretary,  A I  M Advisors, Inc.;  Senior Vice President,
                                                            General Counsel  and Secretary,  A  I M  Management  Group
                                                            Inc.;  Director, Vice President  and General Counsel, Fund
                                                            Management Company;  Vice President  and General  Counsel,
                                                            A  I  M Fund  Services, Inc.;  and Vice  President, A  I M
                                                            Capital Management, Inc. and A I M Distributors, Inc.
DANA R. SUTTON, (39)                Vice President and      Vice President and Fund Controller, A I M Advisors,  Inc.;
                                    Treasurer               and Assistant Vice President and Assistant Treasurer, Fund
                                                            Management Company.
</TABLE>
 
- ------------------
*    A trustee  who is an "interested  person" of the Trust  and A I M Advisors,
    Inc. as defined in the 1940 Act.
The Board of Trustees  has a Nominating and  Audit Committee, comprised of  Miss
Quigley  and Messrs.  Anderson, Bayley and  Patterson, which  is responsible for
nominating persons to serve as Trustees,  reviewing audits of the Trust and  its
funds  and recommending firms to serve as independent auditors of the Trust. All
of the Trust's Trustees also  serve as directors or trustees  of some or all  of
the  other investment companies managed, administered  or advised by AIM. All of
the Trust's
 
                  Statement of Additional Information Page 55
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
executive officers hold similar offices with some or all of the other investment
companies managed, administered  or advised by  AIM. Each Trustee  who is not  a
director,  officer  or employee  of  AIM and/or  the  sub-advisors or  any other
affiliated company is paid an annual  retainer component plus a per-meeting  fee
component,  and reimbursed travel and other expenses incurred in connection with
attendance at such meetings. Other Trustees and officers receive no compensation
or expense reimbursement from the Trust. As  of April 1, 1999, the Trustees  and
officers  of the Trust, as a group, owned less than 1% of the outstanding shares
of any class of the Trust.
 
                  Statement of Additional Information Page 56
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
                                   MANAGEMENT
- --------------------------------------------------------------------------------
INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES
AIM  serves  as  each  Fund's  investment  manager  and  administrator  under an
investment management and administration  contract (individually, a  "Management
Contract," collectively, the "Management Contracts") between that Fund and AIM.
INVESCO  Asset Management Limited ("IAML") serves  as sub-advisor to each of the
following funds:
    / / Europe Fund
    / / International Fund
    / / Latin America Fund
    / / Emerging Markets Fund
    / / Growth & Income Fund; and
    / / Global Government Income Fund
INVESCO (NY),  Inc.  ("INVESCO (NY)")  serves  as  sub-advisor to  each  of  the
following funds:
    / / U.S. Government Income Fund
    / / Money Market Fund; and
    / / Strategic Income Fund
INVESCO Asia Limited ("IAL") serves as sub-advisor to New Pacific Fund.
IAML,  INVESCO (NY), and IAL each serves as sub-advisor and sub-administrator to
its respective Funds under sub-advisory and sub-administration contracts between
AIM  and  that   sub-advisor  (each  a   "Portfolio  Management   Sub-contract,"
collectively, the "Portfolio Management Sub-contracts," and, with the Management
Contracts,  the "Portfolio  Management Contracts"). As  investment managers, AIM
and IAML, INVESCO (NY), or IAL make  all investment decisions for each of  their
Funds  and administer  the affairs  of those  Funds. As  administrators, AIM and
IAML, INVESCO (NY), or IAL, among other things, furnish the services and pay the
compensation  and  travel  expenses  of  persons  who  perform  the   executive,
administrative,  clerical and  bookkeeping functions  of the  Trust, and provide
suitable office space, and necessary small office equipment and utilities.
Each Portfolio Management Contract may  be renewed for one-year terms,  provided
that  any such renewal has been specifically  approved at least annually by: (i)
that Fund's Board  of Trustees,  or by  the vote of  a majority  of that  Fund's
outstanding  voting securities (as defined in the 1940 Act), and (ii) a majority
of Trustees  who  are not  parties  to  that Portfolio  Management  Contract  or
"interested  persons" of any  such party (as  defined in the  1940 Act), cast in
person at a meeting called  for the purpose of  voting on such approval.  Either
the Fund or each of AIM or the sub-advisors may terminate a Portfolio Management
Contract  without  penalty upon  sixty (60)  days' written  notice to  the other
party. Each Portfolio Management Contract terminates automatically in the  event
of its assignment (as defined in the 1940 Act).
The  amounts of investment management and  administration fees paid by each Fund
for the fiscal periods ended December 31, 1996, 1997, and 1998 were as follows:
 
                  Statement of Additional Information Page 57
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
<TABLE>
<CAPTION>
                                                                                                          YEAR ENDED
                                                                                                      DECEMBER 31, 1996
                                                                                           ----------------------------------------
                                                                                            INVESTMENT MANAGEMENT    REIMBURSEMENT
                                                                                           AND ADMINISTRATION FEES      AMOUNT
                                                                                           -----------------------  ---------------
<S>                                                                                        <C>                      <C>
America Fund.............................................................................        $   290,233          $     3,077
Europe Fund..............................................................................            200,116               43,852
New Pacific Fund.........................................................................            291,308               43,012
International Fund.......................................................................             45,476               45,476
Money Market Fund........................................................................             76,778               15,508
Strategic Income Fund....................................................................            201,749               36,678
Global Government Income Fund............................................................             81,007               51,249
U.S. Government Income Fund..............................................................             39,093               39,093
Latin America Fund.......................................................................            224,901               38,459
Emerging Markets Fund....................................................................            149,042               63,577
Growth & Income Fund.....................................................................            317,655               15,992
Telecommunications Fund..................................................................            599,839                   --
Infrastructure Fund......................................................................             35,043               35,043
Resources Fund...........................................................................             75,133               47,923
 
<CAPTION>
                                                                                                          YEAR ENDED
                                                                                                      DECEMBER 31, 1997
                                                                                           ----------------------------------------
                                                                                            INVESTMENT MANAGEMENT    REIMBURSEMENT
                                                                                           AND ADMINISTRATION FEES      AMOUNT
                                                                                           -----------------------  ---------------
<S>                                                                                        <C>                      <C>
America Fund.............................................................................        $   305,132          $        --
Europe Fund..............................................................................            279,058               27,622
New Pacific Fund.........................................................................            276,947               39,729
International Fund.......................................................................             56,606               60,092
Money Market Fund........................................................................            108,454                8,673
Strategic Income Fund....................................................................            224,634               16,129
Global Government Income Fund............................................................             70,010               43,130
U.S. Government Income Fund..............................................................             42,280               34,816
Latin America Fund.......................................................................            298,692               33,765
Emerging Markets Fund....................................................................            207,464               38,322
Growth & Income Fund.....................................................................            421,575                5,189
Telecommunications Fund..................................................................            691,109                   --
Infrastructure Fund......................................................................             84,074               19,594
Natural Resources Fund...................................................................            182,720               26,931
</TABLE>
 
<TABLE>
<CAPTION>
                                                                                                          YEAR ENDED
                                                                                                      DECEMBER 31, 1998
                                                                                           ----------------------------------------
                                                                                            INVESTMENT MANAGEMENT    REIMBURSEMENT
                                                                                           AND ADMINISTRATION FEES      AMOUNT
                                                                                           -----------------------  ---------------
<S>                                                                                        <C>                      <C>
America Fund.............................................................................        $   301,555          $   --
Europe Fund..............................................................................            362,501               11,804
New Pacific Fund.........................................................................            130,473               64,785
International Fund.......................................................................             67,875               32,657
Money Market Fund........................................................................            160,063              --
Strategic Income Fund....................................................................            186,706               46,045
Global Government Income Fund............................................................             65,332               37,445
U.S. Government Income Fund..............................................................             55,012               23,670
Latin America Fund.......................................................................            167,381               45,215
Emerging Markets Fund....................................................................             95,192               84,518
Growth & Income Fund.....................................................................            538,287              --
Telecommunications Fund..................................................................            682,113              --
Infrastructure Fund......................................................................             75,448               31,784
Natural Resources Fund...................................................................            109,635               26,493
</TABLE>
 
                  Statement of Additional Information Page 58
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
In addition to payment of the investment management and administration fees, the
Funds paid  other  operating expenses  and  received reimbursement  pursuant  to
undertakings  in effect. The amount of  such expenses and reimbursements for the
Funds for the  fiscal periods ended  December 31,  1998, 1997 and  1996 were  as
follows:
<TABLE>
<CAPTION>
                                                                                                       YEAR ENDED
                                                                                                    DECEMBER 31, 1998
                                                                                      ---------------------------------------------
                                                                                      OTHER EXPENSES PAID    REIMBURSEMENT AMOUNT
                                                                                      --------------------  -----------------------
<S>                                                                                   <C>                   <C>
America Fund........................................................................      $    111,959            $         0
Europe Fund.........................................................................           220,512                      0
New Pacific Fund....................................................................           101,646                      0
International Fund..................................................................            56,353                      0
Money Market Fund...................................................................            73,338                      0
Strategic Income Fund...............................................................           148,382                      0
Global Government Income Fund.......................................................            65,180                      0
U.S. Government Income Fund.........................................................            46,878                      0
Latin America Fund..................................................................           110,216                      0
Emerging Markets Fund...............................................................           128,260                      0
Growth & Income Fund................................................................           148,032                      0
Telecommunications Fund.............................................................           122,006                      0
Infrastructure Fund.................................................................            50,641                      0
Natural Resources Fund..............................................................            58,471                      0
 
<CAPTION>
                                                                                                       YEAR ENDED
                                                                                                    DECEMBER 31, 1997
                                                                                      ---------------------------------------------
GT GLOBAL                                                                             OTHER EXPENSES PAID    REIMBURSEMENT AMOUNT
- ------------------------------------------------------------------------------------  --------------------  -----------------------
<S>                                                                                   <C>                   <C>
America Fund........................................................................      $     91,538            $         0
Europe Fund.........................................................................           114,912                      0
New Pacific Fund....................................................................           119,626                      0
International Fund..................................................................            74,346                  3,486
Money Market Fund...................................................................            62,885                      0
Strategic Income Fund...............................................................            96,221                      0
Global Government Income Fund.......................................................            73,484                      0
U.S. Government Income Fund.........................................................            48,943                      0
Latin America Fund..................................................................           118,583                      0
Emerging Markets Fund...............................................................           106,583                      0
Growth & Income Fund................................................................           112,816                      0
Telecommunications Fund.............................................................           113,907                      0
Infrastructure Fund.................................................................            40,755                      0
Natural Resources Fund..............................................................            77,556                      0
<CAPTION>
                                                                                                       YEAR ENDED
                                                                                                    DECEMBER 31, 1996
                                                                                      ---------------------------------------------
                                                                                      OTHER EXPENSES PAID    REIMBURSEMENT AMOUNT
                                                                                      --------------------  -----------------------
<S>                                                                                   <C>                   <C>
America Fund........................................................................      $     99,786            $         0
Europe Fund.........................................................................            93,881                      0
New Pacific Fund....................................................................           115,841                      0
International Fund..................................................................            67,753                 10,908
Money Market Fund...................................................................            53,896                      0
Strategic Income Fund...............................................................           103,927                      0
Global Government Income Fund.......................................................            78,263                      0
U.S. Government Income Fund.........................................................            52,137                     11
Latin America Fund..................................................................            94,685                      0
Emerging Markets Fund...............................................................           100,828                      0
Telecommunications Fund.............................................................           100,108                      0
Growth & Income Fund................................................................            95,407                      0
Infrastructure Fund.................................................................            53,612                  9,807
Natural Resources Fund..............................................................            66,706                      0
</TABLE>
 
                  Statement of Additional Information Page 59
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
TRANSFER AGENCY AND ACCOUNTING AGENCY SERVICES
A  I M  Fund Services  Inc. ("Transfer  Agent") performs  shareholder servicing,
reporting and  general  transfer  agent  functions  for  the  Funds.  For  these
services,  the Transfer Agent receives  a fee of $125  per month from each Fund.
The Transfer  Agent  also is  reimbursed  by  the Funds  for  its  out-of-pocket
expenses  for such  items as postage,  forms, telephone  charges, stationery and
office supplies.
AIM and/or the  sub-advisors also serve  as each Fund's  pricing and  accounting
agent.  For the  fiscal years  ended December  31, 1998,  December 31,  1997 and
December 31, 1996, the pricing and accounting services fees for the Funds were:
 
<TABLE>
<CAPTION>
                                                     YEAR ENDED DECEMBER
                                                             31,
                                                    ----------------------
                                                     1998    1997    1996
                                                    ------  ------  ------
<S>                                                 <C>     <C>     <C>
Strategic Income Fund.............................  $6,780  $7,516  $6,725
Global Government Income Fund.....................   2,376   2,342   2,707
U.S. Government Income Fund.......................   1,917   1,448   1,305
Latin America Fund................................   4,156   7,491   5,629
Growth & Income Fund..............................  13,856  10,587   7,952
Telecommunications Fund...........................  19,128  17,340  14,996
Emerging Markets Fund.............................   2,661   5,281   3,728
Infrastructure Fund...............................   1,801   2,161     877
Natural Resources Fund............................   2,994   4,696   1,878
America Fund......................................   9,574  10,211   9,687
New Pacific Fund..................................   2,857   6,939   7,289
Europe Fund.......................................   9,969   7,002   4,997
Money Market Fund.................................   8,812   5,575   3,883
International Fund................................   1,897   1,421   1,137
</TABLE>
 
EXPENSES OF THE FUNDS
As described in  the Funds'  Prospectus, each Fund  pays all  of its  respective
expenses  not  assumed  by  other parties.  The  allocation  of  general Company
expenses and expenses shared by the Funds  with one another, are allocated on  a
basis  deemed fair and equitable, which may  be based on the relative net assets
of the Funds or the nature of the services performed and relative  applicability
to  each Fund.  Expenditures, including  costs incurred  in connection  with the
purchase or  sale  of  securities,  which are  capitalized  in  accordance  with
generally accepted accounting principles applicable to investment companies, are
accounted  for as capital  items and not  as expenses. The  ratio of each Fund's
expenses to  its relative  net assets  can be  expected to  be higher  than  the
expense  ratios of funds investing solely in domestic securities, since the cost
of maintaining the  custody of  foreign securities  and the  rate of  investment
management  fees  paid by  each Fund  generally are  higher than  the comparable
expenses of such other funds.
 
                  Statement of Additional Information Page 60
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
                            VALUATION OF FUND SHARES
- --------------------------------------------------------------------------------
As described in the Funds' Prospectus, each Fund's net asset value per share  is
determined  each day on which  the New York Stock  Exchange ("NYSE") is open for
business ("Business  Day")  as of  the  close of  regular  trading on  the  NYSE
(currently  4:00 p.m. Eastern  Time, unless weather,  equipment failure or other
factors contribute to an earlier closing time). Currently, the NYSE is closed on
weekends and on certain days relating to the following holidays: New Year's Day,
Martin Luther King Day, President's Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day.
The portfolio securities  and other  assets of the  Funds, other  than those  of
Money Market Fund, are valued as follows:
Equity securities including ADRs, ADSs, GDRs and EDRs, which are traded on stock
exchanges,  are valued  at the  last sale  price on  the exchange  on which such
securities are traded, as of the close of business on the day the securities are
being valued or, lacking any  sales, at the last  available bid price. In  cases
where securities are traded on more than one exchange, the securities are valued
on  the exchange  determined by  AIM and/or the  sub-advisors to  be the primary
market. Securities traded  in the OTC  market are valued  at the last  available
sale price prior to the time of valuation.
Long-term  debt obligations are valued at  the mean of representative quoted bid
and asked prices for such  securities or, if such  prices are not available,  at
prices  for securities of  comparable maturity, quality  and type; however, when
AIM and/or the sub-advisors deems it appropriate, prices obtained for the day of
valuation from a bond pricing service will be used. Short-term debt  investments
are  amortized to  maturity based on  their cost, adjusted  for foreign exchange
translation.
Options on indices, securities and currencies  purchased by the Fund are  valued
at the mean of the last bid and asked prices in the case of listed options or in
the  case of OTC options, at  the average of the mean  of the last bid and asked
prices obtained  from  dealers, unless  a  quotation  from only  one  dealer  is
available, in which case only that dealer's price will be used.
Securities  and  other  assets  for  which  market  quotations  are  not readily
available (including restricted securities which  are subject to limitations  as
to  their sale) are valued at fair value as determined in good faith by or under
the  direction  of  the  relevant  Trust's  Board  of  Trustees.  The  valuation
procedures  applied in  any specific  instance are likely  to vary  from case to
case. However, consideration generally is given to the financial position of the
issuer and other fundamental analytical data  relating to the investment and  to
the  nature of the restrictions on  disposition of the securities (including any
registration expenses that  might be  borne by a  Fund in  connection with  such
disposition).  In addition, specific  factors generally are  considered, such as
the cost of the investment, the  market value of any unrestricted securities  of
the  same class (both at the time of purchase and at the time of valuation), the
size of  the holding,  the prices  of  any recent  transactions or  offers  with
respect  to such  securities and any  available analysts'  reports regarding the
issuer.
The fair value  of any  other assets  is added to  the value  of all  securities
positions to arrive at the value of a Fund's total assets. A Fund's liabilities,
including  accruals for expenses,  are deducted from its  total assets. Once the
total value of a Fund's net assets is so determined, that value is then  divided
by  the total number of shares  outstanding (excluding treasury shares), and the
result, rounded to the nearer cent, is the net asset value per share.
Any assets or liabilities initially expressed in terms of foreign currencies are
translated into U.S. dollars at  the official exchange rate  or, at the mean  of
the current bid and asked prices of such currencies against the U.S. dollar last
quoted  by a major  bank that is  a regular participant  in the foreign exchange
market or on the basis of a  pricing service that takes into account the  quotes
provided  by a  number of such  major banks.  If none of  these alternatives are
available or none are deemed to provide a suitable methodology for converting  a
foreign  currency into U.S. dollars, the  relevant Trust's Board of Trustees, in
good faith, will establish a conversion rate for such currency.
Trading in foreign securities may not take  place on all days on which the  NYSE
is  open. Further, trading takes place in  various foreign markets on other days
on which the NYSE is not open. Trading in securities on European and Far Eastern
securities exchanges and OTC markets normally is completed well before the close
of regular trading  on the  NYSE. Consequently,  the calculation  of the  Funds'
respective  net  asset  values may  not  take place  contemporaneously  with the
determination of the prices of securities  held by the respective Funds.  Events
affecting the values of such securities that
 
                  Statement of Additional Information Page 61
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
occur  between the  time their  prices are determined  and the  close of regular
trading on the NYSE  will not be  reflected in the  respective Funds' net  asset
values unless AIM and/or the sub-advisors, under the supervision of the relevant
Trust's Board of Trustees, determines that the particular event would materially
affect  net  asset  value.  As  a  result,  a  Fund's  net  asset  value  may be
significantly affected  by  such  trading  on days  when  a  shareholder  cannot
purchase or redeem shares of the Fund.
A  Fund may declare a suspension of  the determination of net asset value during
the periods when it may suspend redemption privileges.
The Board of Trustees of GT Global Variable Investment Series has determined  in
good  faith that  the net asset  value of each  share of Money  Market Fund will
remain constant at $1.00 and, although no assurance can be given that it will be
able to do so on a continuing basis, Money Market Fund will, as described below,
employ specific investment  policies and procedures  to accomplish this  result.
Money  Market  Fund values  its portfolio  securities  using the  amortized cost
method. The amortized cost  method involves valuing a  security at its cost  and
thereafter  accruing any  discount or  premium at  a constant  rate to maturity.
Although this method provides certainty in  valuation, it may result in  periods
during  which  the value  of Money  Market Fund's  securities, as  determined by
amortized cost,  is higher  or lower  than  the price  Money Market  Fund  would
receive  if it sold the securities.  During periods of declining interest rates,
the daily yield on Money Market Fund computed as described above may tend to  be
higher than a like computation made by a similar fund with identical investments
utilizing a method of valuation based upon market prices and estimates of market
prices  for all of its securities. Thus, if Money Market Fund's use of amortized
cost resulted in  a lower  aggregate value on  a particular  day, a  prospective
investor  in Money Market Fund  would be able to  obtain a somewhat higher yield
than would result  from investment  in a  similar fund  utilizing solely  market
values,   and  existing  Money  Market  Fund  shareholders  would  receive  less
investment income.  The converse  would apply  in a  period of  rising  interest
rates.
In  connection with Money  Market Fund's policy of  valuing its securities using
the amortized cost  method, the  Fund adheres to  certain conditions,  including
maintaining a dollar-weighted average maturity of 90 days or less and purchasing
only  securities having remaining maturities of 13  months or less. The Board of
Trustees of GT Global Variable Investment Series also has established procedures
designed to stabilize, to  the extent reasonably  possible, Money Market  Fund's
net asset value per share at $1.00. Such procedures include review of securities
holdings by the Board of Trustees, at such intervals as it may deem appropriate,
to  determine whether  Money Market Fund's  net asset value  calculated by using
available market  quotations deviates  from the  net asset  value calculated  by
using the amortized cost method and, if so, whether such deviation may result in
material dilution or may be otherwise unfair to existing investors. In the event
the  Board of Trustees  of GT Global Variable  Investment Series determines that
such a deviation exists, the Board has agreed to take such corrective action  as
it   deems  necessary  and  appropriate,  which  action  might  include  selling
securities prior to maturity  to realize capital gains  or losses or to  shorten
average maturity, withholding income, or establishing a net asset value by using
available market quotations or market equivalents.
 
- --------------------------------------------------------------------------------
                         INFORMATION RELATING TO SALES
                                AND REDEMPTIONS
- --------------------------------------------------------------------------------
Each  Trust  is a  funding  vehicle for  VA  Contracts offered  by  the separate
accounts of  the  Participating  Insurance  Companies.  Individual  VA  Contract
holders are not the shareholders of a Fund. Rather, each Participating Insurance
Company and its separate accounts are the shareholders (the "shareholders"). The
offering  is without a sales  charge and is made at  each Fund's net asset value
per share, which is determined in the manner set forth above under "Valuation of
Shares."
Due to differences in  tax treatment or other  considerations, the interests  of
various  VA  Contract holders  might at  some  time be  in conflict.  The Trusts
currently do  not foresee  any such  conflict. However,  the Trusts'  Boards  of
Trustees  intend  to  monitor  events to  identify  any  material irreconcilable
conflict that may arise and to determine what action, if any, should be taken in
response to  such conflict.  If  such a  conflict were  to  occur, one  or  more
Participating  Insurance  Companies'  Separate  Accounts  might  be  required to
withdraw all or a substantial portion of  its investments in one or more  Funds.
This  might  disrupt  a Fund's  orderly  portfolio management  to  the potential
detriment of VA Contract holders.
 
                  Statement of Additional Information Page 62
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
AIM Distributors  pays  any distribution  expenses  and costs  (that  is,  those
arising  from any activity which is primarily  intended to result in the sale of
shares issued by the Trusts), including  expenses and costs attributable to  the
Trusts,  which are related  to the printing and  distributing of prospectuses to
prospective owners of the VA Contracts.
Each Trust redeems all full and fractional shares of its Funds at the net  asset
value  per share  applicable to  each of  its Funds.  See "Valuation  of Shares"
above.
Payment upon redemption is made in  cash and ordinarily will occur within  seven
days  of receipt of a proper notice of redemption. The right to redeem shares or
to receive payment with respect to any redemption of shares of any Fund may only
be suspended: (1) for any period during which trading on the NYSE is  restricted
or  such Exchange is  closed, other than customary  weekend and holiday closing;
(2) for  any period  during  which an  emergency exists  as  a result  of  which
disposal  of securities or determination of the  net asset value of that Fund is
not reasonably practicable;  or (3) for  such other  periods as the  SEC may  by
order permit for the protection of shareholders of that Fund.
 
                  Statement of Additional Information Page 63
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
                                     TAXES
- --------------------------------------------------------------------------------
GENERAL
Shares  of the Funds are offered only  to Separate Accounts that fund certain VA
Contracts. See the  applicable VA Contract  prospectus for a  discussion of  the
special taxation of insurance companies with respect to such accounts and of the
VA Contract holders.
Each  Fund is treated as a separate corporation for federal income tax purposes.
To continue to qualify  for treatment as  a RIC under the  Code, each Fund  must
distribute  to  its shareholders  for  each taxable  year  at least  90%  of its
investment company  taxable  income  (consisting  generally  of  net  investment
income, net short-term capital gain, and net gains from certain foreign currency
transactions)("Distribution  Requirement")  and  must  meet  several  additional
requirements.  With  respect  to  each  Fund,  these  requirements  include  the
following:  (1)  the Fund  must derive  at least  90% of  its gross  income each
taxable year  from  dividends, interest,  payments  with respect  to  securities
loans,  and gains from  the sale or  other disposition of  securities or foreign
currencies, or other income (including  gains from options, Futures, or  Forward
Contracts)  derived with respect  to its business of  investing in securities or
those currencies ("Income Requirement"); (2) at the close of each quarter of the
Fund's taxable year,  at least  50% of  the value of  its total  assets must  be
represented  by cash and  cash items, U.S.  government securities, securities of
other RICs,  and  other securities,  with  these other  securities  limited,  in
respect  of any one issuer, to an amount that does not exceed 5% of the value of
the Fund's  total assets  and  that does  not represent  more  than 10%  of  the
issuer's  outstanding voting securities; and (3) at the close of each quarter of
the Fund's taxable year, not more than 25% of the value of its total assets  may
be  invested  in  securities  (other  than  U.S.  government  securities  or the
securities of other RICs) of any one  issuer. If any Fund failed to qualify  for
treatment  as a  RIC for any  taxable year, (1)  it would be  taxed at corporate
rates on the full amount of its taxable income for that year without being  able
to  deduct the distributions it makes  to its shareholders, (2) the shareholders
would treat all those distributions, including distributions of net capital gain
(I.E., the excess  of net  long-term capital  gain over  net short-term  capital
loss),  as dividends  (that is,  ordinary income)  to the  extent of  the Fund's
earnings and profits, and (3)  most importantly, each Separate Account  invested
therein would fail to satisfy the diversification requirements of section 817(h)
of  the Code  (see below), with  the result  that the VA  Contracts supported by
those accounts would no  longer be eligible for  tax deferral. In addition,  the
Fund  could be required to recognize unrealized gains, pay substantial taxes and
interest  and  make  substantial  distributions  before  requalifying  for   RIC
treatment.
As  noted in the Funds' Prospectus, each Fund intends to continue to comply with
the diversification requirements imposed by section  817(h) of the Code and  the
regulations  thereunder.  These  requirements,  which  are  in  addition  to the
diversification requirements mentioned above,  place certain limitations on  the
proportion  of  each  Fund's  assets  that  may  be  represented  by  any single
investment (which includes all securities of the same issuer). Specifically, the
regulations provide  in part  that, except  as permitted  by the  "safe  harbor"
described  below,  as of  the end  of each  calendar quarter  or within  30 days
thereafter, no more than 55%  of the total assets of  a Fund may be invested  in
the  securities of any one issuer. For  this purpose, all securities of the same
issuer  are   consolidated,  and   while  each   U.S.  government   agency   and
instrumentality is considered a separate issuer, a particular foreign government
and   its  agencies,  instrumentalities  and   political  subdivisions  are  all
considered to be  the same issuer.  Section 817(h) provides,  as a safe  harbor,
that  adequate  diversification  will  exist  for  a  separate  account  if  the
diversification requirements under Subchapter M  are satisfied and no more  than
55% of the value of the separate account's total assets are cash and cash items,
government  securities and securities of  other registered investment companies.
Failure of a  Fund to satisfy  the section 817(h)  requirements would result  in
treatment  of the VA Contract holders other  than as described in the applicable
VA Contracts prospectus.
Dividends and  other  distributions  declared  by a  Fund  in,  and  payable  to
shareholders  of record as of  a date in, October,  November, or December of any
year will  be  deemed  to have  been  paid  by  the Fund  and  received  by  the
shareholders  on December 31 of  that year if the  distributions are paid by the
Fund during the following January.
Dividends and interest received  by a Fund, and  gains realized thereby, may  be
subject to income, withholding, or other taxes imposed by foreign countries that
would  reduce the yield  and/or total return on  its securities. Tax conventions
between certain countries and  the United States may  reduce or eliminate  these
foreign  taxes,  however, and  many  foreign countries  do  not impose  taxes on
capital gains with respect to investments by foreign investors.
 
                  Statement of Additional Information Page 64
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
Each Fund (other  than the Money  Market Fund,  the America Fund,  and the  U.S.
Government  Income Fund) may invest in  the stock of "passive foreign investment
companies"  ("PFICs").  A  PFIC  is  a  foreign  corporation  --  other  than  a
"controlled  foreign corporation" (I.E., a foreign  corporation in which, on any
day during its  taxable year, more  than 50% of  the total voting  power of  all
voting stock therein or the total value of all stock therein is owned, directly,
indirectly  or constructively, by  "U.S. shareholders," defined  as U.S. persons
that individually own, directly, indirectly  or constructively, at least 10%  of
that voting power) as to which a Fund is a U.S. shareholder -- that, in general,
meets  either of the  following tests: (1) at  least 75% of  its gross income is
passive or (2) an average of at least 50% of its assets produce, or are held for
the production of, passive income. Under  certain circumstances, a Fund will  be
subject to federal income tax on a portion of any "excess distribution" received
on  the  stock  of  a  PFIC  or  of  any  gain  from  disposition  of  the stock
(collectively  "PFIC  income"),  plus  interest   thereon,  even  if  the   Fund
distributes  the  PFIC income  as a  taxable dividend  to its  shareholders. The
balance of the  PFIC income will  be included in  the Fund's investment  company
taxable  income and,  accordingly, will not  be taxable  to it to  the extent it
distributes that income to its shareholders.
If a  Fund invests  in a  PFIC and  elects to  treat the  PFIC as  a  "qualified
electing  fund"  ("QEF"),  then  in  lieu  of  the  foregoing  tax  and interest
obligation, the Fund would be  required to include in  income each year its  pro
rata share of the QEF's ordinary earnings and net capital gain which most likely
would   have  to  be  distributed  by  the  Fund  to  satisfy  the  distribution
requirements described above -- even if the Fund did not receive those  earnings
and  gain from  the QEF. In  most instances, it  will be very  difficult, if not
impossible, to make this election because of certain requirements thereof.
Each  Fund   may  elect   to  "mark   to  market"   its  stock   in  any   PFIC.
"Marking-to-market,"  in this context,  means including in  ordinary income each
taxable year the excess, if  any, of the fair market  value of the stock over  a
Fund's  adjusted  basis therein  as of  the end  of that  year. Pursuant  to the
election, a Fund  also would  be allowed to  deduct (as  ordinary, not  capital,
loss)  the excess,  if any, of  its adjusted basis  in PFIC stock  over the fair
market value thereof as of the taxable  year-end, but only to the extent of  any
net  mark-to-market gains with respect  to that stock included  in income by the
Fund for  prior taxable  years. A  Fund's adjusted  basis in  each PFIC's  stock
subject  to the  election would  be adjusted  to reflect  the amounts  of income
included and deductions taken thereunder (and under regulations proposed in 1992
that provided a similar election with respect to the stock of certain PFICs).
OPTIONS, FUTURES, AND FOREIGN CURRENCY TRANSACTIONS
A Fund's use of hedging transactions,  such as selling (writing) and  purchasing
options  and Futures and entering into Forward Contracts, involves complex rules
that will determine for federal income tax purposes, the amount, character,  and
timing  of recognition  of the  gains and losses  a Fund  realizes in connection
therewith. Gains  from the  disposition of  foreign currencies  (except  certain
gains  that  may be  excluded by  future regulations),  and gains  from options,
Futures, and Forward Contracts derived by a Fund with respect to its business of
investing in  securities  or foreign  currencies,  will qualify  as  permissible
income under the Income Requirement.
Futures  and Forward  Contracts that  are subject  to section  1256 of  the Code
(other than Forward  Contracts that are  part of a  "mixed straddle")  ("Section
1256  Contracts") and that  are held by  a Fund at  the end of  its taxable year
generally will be deemed to  have been sold at  market value for federal  income
tax  purposes. Sixty percent of any net  gain or loss recognized on these deemed
sales, and 60% of any net realized gain or loss from any actual sales of Section
1256 Contracts,  will be  treated as  long-term capital  gain or  loss, and  the
balance  will be  treated as  short-term capital gain  or loss.  These rules may
operate to  increase the  amount that  a  Fund must  distribute to  satisfy  the
Distribution  Requirement and to  increase the net capital  gain recognized by a
Fund, without in either case increasing the  cash available to the Fund. A  Fund
may  elect to exclude  certain transactions from the  operation of section 1256,
although doing so may have the  effect of increasing the relative proportion  of
net  short-term capital gain and/or increasing the amount of dividends that must
be distributed to meet the Distribution Requirement.
Section 988 of the Code also may apply to gains and losses from transactions  in
foreign  currencies, foreign currency-denominated  debt securities, and options,
Futures, and Forward  Contracts on  foreign currencies ("section  988 gains  and
losses").  Each section  988 gain or  loss generally is  computed separately and
treated as ordinary income or loss. In the case of overlap between sections 1256
and 988, special provisions  determine the character and  timing of any  income,
gain,  or  loss.  Each Fund  attempts  to  monitor section  988  transactions to
minimize any adverse tax impact.
If a Fund  has an  "appreciated financial  position" --  generally, an  interest
(including  an interest through an option, Futures or Forward Contract, or short
sale) with respect to any stock,  debt instrument (other than "straight  debt"),
or  partnership interest  the fair  market value  of which  exceeds its adjusted
basis -- and  enters into  a "constructive sale"  of the  same or  substantially
similar  property,  that Fund  will be  treated  as having  made an  actual sale
thereof, with  the  result  that  gain  will  be  recognized  at  that  time.  A
constructive  sale generally  consists of a  short sale,  an offsetting notional
principal contract, or Futures or Forward Contract  entered into by a Fund or  a
related   person   with   respect   to  the   same   or   substantially  similar
 
                  Statement of Additional Information Page 65
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
property. In addition, if the appreciated  financial position is itself a  short
sale or such a contract, acquisition of the underlying property or substantially
similar  property will  be deemed  a constructive  sale. The  foregoing will not
apply, however,  to any  transaction of  a  Fund during  any taxable  year  that
otherwise  would be treated as a constructive  sale if the transaction is closed
within 30 days after  the end of  that year and the  Fund holds the  appreciated
financial  position unhedged for  60 days after  that closing (I.E.,  at no time
during that 60-day  period is the  Fund's risk of  loss regarding that  position
reduced   by  reason   of  certain   specified  transactions   with  respect  to
substantially similar or  related property, such  as having an  option to  sell,
being  contractually  obligated to  sell, making  a short  sale, or  granting an
option to buy substantially identical stock or securities).
The foregoing is a general and abbreviated summary of certain federal income tax
considerations affecting each  Fund. No attempt  is made to  present a  complete
explanation  of the  federal tax  treatment of  the Funds'  activities, and this
discussion  is  not  intended  as   a  substitute  for  careful  tax   planning.
Accordingly, potential investors are urged to consult their own tax advisors for
more  detailed information  and for information  regarding any  state, local, or
foreign taxes applicable to the Funds  and to dividends and other  distributions
therefrom.
 
- --------------------------------------------------------------------------------
                             ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
AIM  was organized in 1976, and along  with its subsidiaries, manages or advises
approximately 90 investment  company portfolios  encompassing a  broad range  of
investment  objectives.  AIM is  a  direct, wholly  owned  subsidiary of  A  I M
Management Group  Inc.  ("AIM Management"),  a  holding company  that  has  been
engaged  in the  financial services  business since  1976. AIM  Management is an
indirect wholly owned subsidiary of AMVESCAP PLC, 11 Devonshire Square,  London,
EC2M  4YR,  England.  AMVESCAP  PLC  and  its  subsidiaries  are  an independent
investment management group that has a significant presence in the institutional
and retail segment of  the investment management industry  in North America  and
Europe, and a growing presence in Asia.
CUSTODIAN
State  Street  Bank and  Trust Company  ("State  Street"), 225  Franklin Street,
Boston, MA  02110, acts  as custodian  of  the Funds'  assets. State  Street  is
authorized  to  establish and  has  established individual  accounts  in foreign
currencies and to  cause securities of  the Funds  to be held  in such  accounts
outside the United States in the custody of non-U.S. banks.
INDEPENDENT ACCOUNTANTS
The  Trusts' and  the Funds' independent  accountants are PricewaterhouseCoopers
LLP. PricewaterhouseCoopers LLP conducts an annual audit of the Fund's Financial
Statements, assists in the  preparation of the Funds'  federal and state  income
tax  returns  and  consults with  the  Trusts and  the  Funds as  to  matters of
accounting, regulatory filings, and federal and state income taxation.
The audited financial statements  of each Trust and  each Fund included in  this
Statement of Additional Information have been examined by PricewaterhouseCoopers
LLP as stated in its opinion appearing herein, and are included in reliance upon
such  opinion given upon the authority of that firm as experts in accounting and
auditing.
SHAREHOLDER LIABILITY
Under Delaware law, the shareholders of each Trust enjoy the same limitations of
liability extended to shareholders of private, for-profit corporations. There is
a remote possibility, however, that under certain circumstances shareholders  of
each  Trust may be held personally liable for each Trust's obligations. However,
each Trust's Agreement and Declaration of Trust disclaims shareholder  liability
for acts or obligations of the Trust and requires that notice of such disclaimer
be given in each agreement, obligation or instrument entered into or executed by
the Trust or a trustee. Each Trust's Agreement and Declaration of Trust provides
for  indemnification from the Trust property for  all losses and expenses of any
shareholder held personally liable for  the Trust's obligations. Thus, the  risk
of  a  shareholder incurring  financial  loss on  account  of such  liability is
limited to circumstances in which each Trust itself would be unable to meet  its
obligations  and  where  the  other  party  was held  not  to  be  bound  by the
disclaimer.
 
                  Statement of Additional Information Page 66
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
                               INVESTMENT RESULTS
- --------------------------------------------------------------------------------
Each Fund's "Standardized Returns", as referred to in the Prospectus (see "Other
Information  -- Performance  Information" in  the Prospectus),  is calculated as
follows: Standardized Return  Standardized Return (average  annual total  return
("T")) is computed by using the ending redeeming value ("ERV") of a hypothetical
initial investment of $1,000 ("P") over a period of years ("n") according to the
following  formula as required by the SEC: P(1+T)  to the (n)th power = ERV. The
following assumptions will be reflected in computations made in accordance  with
this formula: (1) reinvestment of dividends and other distributions at net asset
value  on the reinvestment date determined by the Trusts' Board of Trustees; and
(2) a complete redemption at the end of any period illustrated. The Standardized
Return quotation does not  reflect the charges  deducted from the  Participating
Insurance Companies' separate accounts. See the VA Contract prospectus. If these
charges  were deducted  to reflect the  effective Standardized Return  to the VA
Contract owner, that Standardized  Return would be  lower than the  Standardized
Returns quoted.
Each Fund's Standardized Returns, stated as average annualized total returns for
the periods shown, were:
 
<TABLE>
<CAPTION>
                                                                                   AVERAGE
                                                                                  ANNUALIZED
                                                                                  STANDARDIZED
                                                                                  RETURN
                                                                                  ----------
<S>                                                                               <C>
America Fund
- -- Year ended December 31, 1998.................................................      8.09%
- -- 5 Years ended December 31, 1998..............................................     17.02%
- -- From inception on February 10, 1993 to December 31, 1998.....................     16.96%
Europe Fund
- -- Year ended December 31, 1998.................................................     15.98%
- -- 5 Years ended December 31, 1998..............................................     13.65%
- -- From inception on February 10, 1993 to December 31, 1998.....................     16.21%
New Pacific Fund
- -- Year ended December 31, 1998.................................................    (14.54)%
- -- 5 Years ended December 31, 1998..............................................    (10.46)%
- -- From inception on February 10, 1993 to December 31, 1998.....................     (4.32)%
Growth & Income Fund
- -- Year ended December 31, 1998.................................................     19.60%
- -- 5 Years ended December 31, 1998..............................................     12.65%
- -- From inception on February 10, 1993 to December 31, 1998.....................     13.76%
Strategic Income Fund
- -- Year ended December 31, 1998.................................................      (.61)%
- -- 5 Years ended December 31, 1998..............................................      5.11%
- -- From inception on February 10, 1993 to December 31, 1998.....................      8.72%
Global Government Income Fund
- -- Year ended December 31, 1998.................................................     12.69%
- -- 5 Years ended December 31, 1998..............................................      5.72%
- -- From inception on February 10, 1993 to December 31, 1998.....................      6.43%
U.S. Government Income Fund
- -- Year ended December 31, 1998.................................................      9.06%
- -- 5 Years ended December 31, 1998..............................................      5.36%
- -- From inception on February 10, 1993 to December 31, 1998.....................      5.67%
Latin America Fund
- -- Year ended December 31, 1998.................................................    (41.71)%
- -- 5 Years ended December 31, 1998..............................................     (7.51)%
- -- From inception on February 10, 1993 to December 31, 1998.....................      (.04)%
</TABLE>
 
                  Statement of Additional Information Page 67
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
<TABLE>
<S>                                                                               <C>
Money Market Fund
- -- Year ended December 31, 1998.................................................      5.22%
- -- 5 Years ended December 31, 1998..............................................      4.82%
- -- From inception on February 10, 1993 to December 31, 1998.....................      4.52%
Telecommunications Fund
- -- Year ended December 31, 1998.................................................     22.11%
- -- From inception on October 18, 1993 to December 31, 1998......................     17.21%
- -- 5 Years ended December 31, 1998..............................................     18.41%
Emerging Markets Fund
- -- Year ended December 31, 1998.................................................    (36.90)%
- -- From inception on July 5, 1994 to December 31, 1998..........................     (8.83)%
International Fund
- -- Year ended December 31, 1998.................................................      (.64)%
- -- From inception on July 5, 1994 to December 31, 1998..........................      1.60%
Infrastructure Fund
- -- Year ended December 31, 1998.................................................      6.58%
- -- From inception on January 31, 1995 to December 31, 1998......................     11.69%
Natural Resources Fund
- -- Year ended December 31, 1998.................................................   (33.01)%
- -- From inception on January 31, 1995 to December 31, 1998......................      5.94%
</TABLE>
 
In   addition  to   Standardized  Returns,  each   Fund  also   may  include  in
advertisements, sales  literature and  shareholder  reports other  total  return
performance   data  ("Non-Standardized  Return").   Non-Standardized  Return  is
calculated for a specified period of  time by assuming the investment of  $1,000
in  Fund shares and further assuming the reinvestment of all dividends and other
distributions made to Fund shareholders in  additional Fund shares at their  net
asset  value. Percentage rates  of return are then  calculated by comparing this
assumed initial investment to the value  of the hypothetical account at the  end
of   the  period   for  which  the   Non-Standardized  Return   is  quoted.  The
Non-Standardized Return quotation does not reflect the charges deducted from the
Participating Insurance  Companies'  separate  accounts.  See  the  VA  Contract
prospectus.   If  these  charges  were  deducted,  the  Non-Standardized  Return
quotation would  be lower  than those  stated. Non-Standardized  Returns may  be
quoted for the same or different time periods for which Standardized Returns are
quoted.
Aggregate Non-Standardized Return ("T") is computed by using the ending value of
the  account  ("VOA")  of  a hypothetical  initial  investment  of  $1,000 ("P")
according to  the  following formula:  T=(VOA/P)-1.  Aggregate  Non-Standardized
Return assumes reinvestment of dividends and other distributions.
Each  Fund's  aggregate  Non-Standardized  Returns,  stated  as  aggregate total
returns for the periods shown, were:
 
<TABLE>
<CAPTION>
                                                                                  AGGREGATE
                                                                                  NON-STANDARDIZED
                                                                                    RETURN
                                                                                  ----------
<S>                                                                               <C>
America Fund
- -- From inception on February 10, 1993 to December 31, 1998.....................    151.59%
Europe Fund
- -- From inception on February 10, 1993 to December 31, 1998.....................    142.23%
New Pacific Fund
- -- From inception on February 10, 1993 to December 31, 1998.....................   (22.90)%
Growth & Income Fund
- -- From inception on February 10, 1993 to December 31, 1998.....................    113.61%
Strategic Income Fund
- -- From inception on February 10, 1993 to December 31, 1998.....................     63.62%
Global Government Income Fund
- -- From inception on February 10, 1993 to December 31, 1998.....................     44.30%
U.S. Government Income Fund
- -- From inception on February 10, 1993 to December 31, 1998.....................     38.13%
</TABLE>
 
                  Statement of Additional Information Page 68
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
<TABLE>
<S>                                                                               <C>
Latin America Fund
- -- From inception on February 10, 1993 to December 31, 1998.....................     (.25)%
Money Market Fund
- -- From inception on February 10, 1993 to December 31, 1998.....................     29.74%
Telecommunications Fund
- -- From inception on October 18, 1993 to December 31, 1998......................    140.93%
Emerging Markets Fund
- -- From inception on July 5, 1994 to December 31, 1998..........................   (33.97)%
International Fund
- -- From inception on July 5, 1994 to December 31, 1998..........................      7.37%
Infrastructure Fund
- -- From inception on January 31, 1995 to December 31, 1998......................     54.18%
Natural Resources Fund
- -- From inception on January 31, 1995 to December 31, 1998......................     25.34%
</TABLE>
 
Money Market  Fund  may,  from  time  to  time,  provide  yield  information  or
comparisons  of  its  yield  to  various  averages  including  data  from Lipper
Analytical Services,  Inc., Bank  Rate  Monitor-TM-, IBC/Donaghue's  Money  Fund
Report,  MONEY Magazine,  and other  industry publications  (to the  extent they
apply to  investment companies  whose shares  are offered  to insurance  company
separate  accounts,  in advertisements  or in  reports  furnished to  current or
prospective shareholders).
Money Market Fund  calculates its  yield for its  shares daily,  based upon  the
seven  days ending on the day of  the calculation, called the "base period." The
yield is computed by determining the net  change in the value of a  hypothetical
account  with a balance of  one share at the beginning  of the base period, with
the net  change, excluding  capital  changes, but  including  the value  of  any
additional  shares purchased with  dividends earned from  the original one share
and all dividends declared  on the original and  any purchased shares;  dividing
the  net  change in  the account's  value by  the  value of  the account  at the
beginning  of  the  base  period  to  determine  the  base  period  return;  and
multiplying  the base  period return by  (365/7). Money  Market Fund's effective
yield is computed by compounding the unannualized base period return by adding 1
to the base period return; raising the sum to the 365/7th power; and subtracting
1 from the result.
For the seven-day period ended December 31, 1998, the Fund's yield was 4.28% and
effective yield was 4.37%. See "Management" in the Prospectus. The seven-day and
effective yields are calculated as follows:
 
<TABLE>
<S>                                                                                  <C>
Assumptions:
Value of hypothetical pre-existing account with exactly one share at the beginning
 of the period:....................................................................  $ 1.000000000
Value of same account* (excluding capital changes) at the end of the seven-day
 period ending December 31, 1998:..................................................  $   1.0008215
</TABLE>
 
- ------------------
*     Value includes  additional  shares acquired  with  dividends paid  on  the
    original shares.
 
<TABLE>
<S>                                                                                  <C>
Calculation:
Ending account value:..............................................................  $   1.0008215
Less beginning account value:......................................................  $   1.0000000
Net change in account value:.......................................................  $    .0008215
  Seven-day yield = $.0008215 X 365/7 = 4.28%
  Effective yield** = (1 + .0008215) (365/7) - 1 = 4.37%
</TABLE>
 
- ------------------
**  The effective yield assumes a year's compounding of the seven-day yield.
Money Market Fund's investment results may also be calculated for longer periods
in  accordance with the following method: by subtracting (a) the net asset value
of one share at the beginning of the period, from (b) the net asset value of all
shares an investor would own at the end of the period for the share held at  the
beginning   of  the   period  (assuming   reinvestment  of   all  dividends  and
distributions) and  dividing  by  (c) the  net  asset  value per  share  at  the
beginning  of the  period. The  resulting percentage  indicates the  positive or
negative rate of return that an  investor would have earned from the  reinvested
dividends  and distributions and  any changes in share  price during the period.
These performance  quotations  do not  reflect  the charges  deducted  from  the
Participating    Insurance   Companies'   separate    accounts.   See   the   VA
 
                  Statement of Additional Information Page 69
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
Contract prospectus. If these  charges were deducted,  such quotations would  be
lower than those calculated for Money Market Fund.
The  performance  figures  for a  Fund  will  only be  advertised  if comparable
performance figures for the corresponding  division of the separate account  are
included  in the  advertisement. Each Fund's  investment results  will vary from
time to time  depending upon market  conditions, the composition  of the  Fund's
portfolio  and operating  expenses of the  Fund, so that  any performance figure
should not be considered  representative of what an  investment in the Fund  may
earn in any future period. These factors and possible differences in calculation
methods  should be considered when comparing  the Fund's investment results with
those published for  other investment  companies and  other investment  vehicles
whose  shares  are offered  to insurance  company separate  accounts. Investment
results also should  be considered  relative to  the risks  associated with  the
investment objective and policies.
IMPORTANT POINTS TO NOTE ABOUT THE FOLLOWING WORLD FINANCIAL AND ECONOMIC DATA
Information   relating  to   foreign  market   performance,  capitalization  and
diversification is based on  sources believed to be  reliable, but which may  be
subject  to  revision  and which  has  not  been independently  verified  by the
Company. The authors and publishers of such material are not to be considered as
"experts" under the Securities Act of 1933, on account of the inclusion of  such
information herein.
This  information may  be useful  to investors  considering whether  and to what
extent to  diversify their  investments  through the  purchase of  mutual  funds
investing  in  securities on  a  global basis.  However,  these data  are  not a
representation of  the past  performance of  any of  these Funds,  nor is  it  a
prediction  of such performance.  The performance of the  Funds will differ from
the historical performance of the  relevant indices. The performance of  indices
does  not take  expenses into  account, while each  Fund incurs  expenses in its
operations, which will reduce performance. Each Fund is actively managed,  i.e.,
AIM   and/or  the  sub-advisors,  as   each  Fund's  investment  advisor  and/or
sub-advisor, actively  purchase  and  sell securities  in  seeking  each  Fund's
investment  objective. Moreover, each Fund may invest a portion of its assets in
corporate bonds, while the above data relates only to government bonds. Each  of
these factors will cause the performance of each Fund to differ from the indices
shown above.
Each Fund may from time to time, in advertisements, sales literature and reports
furnished  to present  or prospective shareholders,  compare the  Funds with the
following, among others, to the extent they apply to investment companies  whose
shares are offered to insurance company separate accounts:
        (1)  The Consumer Price Index ("CPI"), which is a measure of the average
    change in prices over time  in a fixed market  basket of goods and  services
    (E.G.,  food, clothing,  shelter, fuels,  transportation fares,  charges for
    doctors' and dentists' services, prescription medicines, and other goods and
    services that people  buy for  day-to-day living). There  is inflation  risk
    which does not affect a security's value but its purchasing power, I.E., the
    risk of changing price levels in the economy that affects security prices or
    the price of goods and services.
        (2)  Data,  mutual fund  rankings and  comparisons and  variable account
    rankings and comparisons  published or  prepared by  Lipper Analytical  Data
    Services,  Inc.  ("Lipper"),  CDA/Wiesenberger  Investment  Company Services
    ("CDA/Wiesenberger"), Morningstar,  Inc.  ("Morningstar"),  Micropal,  Inc.,
    Financial  Planning  Resources  Inc.,  publisher of  a  compilation  of data
    regarding variable  accounts  ("VARDS")  and/or other  companies  that  rank
    and/or compare mutual funds or variable annuity account divisions by overall
    performance,  investment  objectives,  assets,  expense  levels,  periods of
    existence and/or other factors. In this regard, each Fund may be compared to
    its "peer group" as defined by Lipper, CDA/Wiesenberger, Morningstar,  VARDS
    and/or  other firms, as applicable  or to specific funds  or groups of funds
    within or outside of  such peer group. Lipper  generally ranks funds on  the
    basis  of total return, assuming reinvestment of distributions, but does not
    take sales charges or  redemption fees into  consideration, and is  prepared
    without regard to tax consequences. In addition to the mutual fund rankings,
    the  Fund's performance may  be compared to  mutual fund performance indices
    prepared by Lipper. Morningstar  is a mutual fund  rating service that  also
    rates  mutual funds on  the basis of  risk-adjusted performance. Morningstar
    ratings are calculated from a fund's three, five and ten year average annual
    returns with appropriate  fee adjustments  and a risk  factor that  reflects
    fund  performance  relative to  the three-month  U.S. Treasury  bill monthly
    returns. Ten percent  of the funds  in an investment  category receive  five
    stars  and 22.5% receive four stars. The  ratings are subject to change each
    month.
        (3) Bear  Stearns  Foreign Bond  Index,  which provides  simple  average
    returns for individual countries and gross national product ("GNP") weighted
    index,  beginning in 1975. The  returns are broken down  by local market and
    currency.
        (4) Ibbotson  Associates  International  Bond Index,  which  provides  a
    detailed breakdown of local market and currency returns since 1960.
 
                  Statement of Additional Information Page 70
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
        (5) Standard & Poor's 500 Composite Stock Price Index, which is a widely
    recognized  index  composed of  the  capitalization-weighted average  of the
    price of 500 of the largest publicly traded stocks in the U.S.
        (6) Dow Jones Industrial Average.
        (7) CNBC/Financial News Composite Index.
        (8) Morgan Stanley Capital International World Indices, including, among
    others, the Morgan Stanley Capital International Europe, Australia, Far East
    Index ("EAFE Index").  The EAFE  Index is an  unmanaged index  of more  than
    1,000 companies in Europe, Australia and the Far East.
        (9)  Morgan Stanley Capital  International All Country  (AC) World Index
    ("MSCI"). The  MSCI is  a broad,  unmanaged index  of global  stock  prices,
    currently  comprising 2,500 different issuers,  located in 47 countries, and
    grouped in 38 separate industries.
       (10) Salomon Brothers  World Government Bond  Index and Salomon  Brothers
    World  Government Bond Index-Non-U.S., each of  which is a widely used index
    composed of world government bonds.
       (11) The  World  Bank  Publication  of  Trends  in  Developing  Countries
    ("TIDE")  provides  brief  reports on  most  of the  World  Bank's borrowing
    members. The World  Development Report  is published annually  and looks  at
    global   and  regional  economic  trends  and  their  implications  for  the
    developing economies.
       (12) Salomon Brothers Global Telecommunications Index, which is  composed
    of telecommunications companies in the developing and emerging countries.
       (13)  Datastream and  Worldscope, each  of which  is an  on-line database
    retrieval  service   for  information,   including   but  not   limited   to
    international financial and economic data.
       (14)  International  Financial  Statistics,  which  is  produced  by  the
    International Monetary Fund.
       (15) Various publications and reports produced by the World Bank and  its
    affiliates.
       (16)  Various publications from the International Bank for Reconstruction
    and Development.
       (17) Various publications produced by  ratings agencies such as  Moody's,
    S&P and Fitch.
       (18)  Wilshire Associates, which is an on-line database for international
    financial and economic data including performance measures for a wide  range
    of securities.
       (19)  Bank Rate National Monitor Index, which is an average of the quoted
    rates for 100 leading banks and thrifts in ten U.S. cities.
       (20) International  Finance  Corporation ("IFC")  Emerging  Markets  Data
    Base,  which  provides  detailed statistics  on  bond and  stock  markets in
    developing countries.
       (21) Various publications from the Organization for Economic  Cooperation
    and Development ("OECD").
       (22)  Average of  savings accounts,  which is a  measure of  all kinds of
    savings deposits, including longer-term certificates. Savings accounts offer
    a guaranteed rate  of return on  principal, but no  opportunity for  capital
    growth.  The maximum rates paid on some savings deposits are currently fixed
    by law.
To the extent that they apply  to investment companies whose shares are  offered
to  insurance company  separate accounts,  indices, economic  and financial data
prepared by the research departments of various financial organizations, such as
Salomon Brothers, Inc., Lehman Brothers, Merrill Lynch, Pierce, Fenner &  Smith,
Inc.,  Financial Research Corporation, J.P. Morgan, Morgan Stanley, Smith Barney
Shearson,  S.G.   Warburg,  Jardine   Flemming,  The   Bank  for   International
Settlements,  Asian Development  Bank, Bloomberg, L.P.,  and Ibbotson Associates
may be used  as well  as information  reported by  the Federal  Reserve and  the
respective  Central Banks of various nations.  In addition, AIM Distributors may
use performance  rankings,  ratings  and  commentary  reported  periodically  in
national financial publications, including MONEY MAGAZINE, MUTUAL FUND MAGAZINE,
SMART  MONEY,  GLOBAL  FINANCE,  EUROMONEY,  FINANCIAL  WORLD,  FORBES, FORTUNE,
BUSINESS WEEK, LATIN FINANCE, THE WALL STREET JOURNAL, EMERGING MARKETS  WEEKLY,
KIPLINGER'S GUIDE TO PERSONAL FINANCE, BARRON'S, THE FINANCIAL TIMES, USA TODAY,
THE  NEW YORK  TIMES and  INVESTORS BUSINESS DIGEST.  Each Fund  may compare its
performance to that of  other compilations or indices  of comparable quality  to
those listed above and other indices that may be developed and made available in
the future.
 
                  Statement of Additional Information Page 71
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
A  portion of the performance  figures for each market  includes the positive or
negative effects of the currency exchange rates effective at December 31 of each
year between the U.S. dollar and currency of the foreign market (E.G.,  Japanese
Yen,  German  Deutschmark and  Hong Kong  Dollar). A  foreign currency  that has
strengthened or weakened against the  U.S. dollar will positively or  negatively
affect the reported returns, as the case may be.
This  information may  be useful  to investors  considering whether  and to what
extent to  diversify their  investments  through the  purchase of  mutual  funds
investing  in  securities on  a  global basis.  However,  these data  are  not a
representation of the past performance of the  Funds, nor is it a prediction  of
such  performance. The performance  of the Fund will  differ from the historical
performance of  relevant  indices. The  performance  of indices  does  not  take
expenses  into account, while the Fund  incurs expenses in its operations, which
will reduce performance. Each of these factors will cause the performance of the
Fund to differ from relevant indices.
From time to time, each Fund may refer to the number of shareholders in the Fund
or the aggregate  number shareholders  in all Funds  or the  dollar amount  Fund
assets under management in advertising materials.
The  GT Global  Variable Investment Funds  can be an  appropriate investment for
long-term investment goals, including  funding retirement, paying for  education
or  purchasing a house. The GT Global Variable Investment Funds do not, however,
represent a complete investment  program and the  investors should consider  the
Funds  as appropriate for  a portion of their  overall investment portfolio with
regard to their long-term investment goals. There is no assurance that any  such
information will lead to achieving these goals or guarantee future results.
From  time to time,  each Fund may refer  to or advertise the  names of U.S. and
non-U.S. companies and their products, although  there can be no assurance  that
any  GT  Global  Variable  Investment  Fund  may  own  the  securities  of these
companies.
Advertising and  sales literature  for the  Contract may  discuss the  financial
ratings  of  any  of  the  Participating  Insurance  Companies  as  compiled  by
independent agencies.  These  independent  agencies  rate  insurance  companies'
overall  financial strength, ability to meet contractual obligations, ability to
discharge senior  policyholder  obligations and  claims,  overall  claims-paying
ability   and  other  financial  measures  related  to  long-term  solvency  and
liquidity. The independent  agencies which may  be quoted include,  but are  not
limited to:
    / / A.M. Best Company
    / / Moody's Investors Service
    / / Standard & Poor's Insurance Rating Services
    / / Duff & Phelps, Incorporated
Ratings descriptions are relevant only to the insurance company and do not apply
to  variable annuities  or the underlying  accounts which are  subject to market
risk and whose value will fluctuate with market conditions.
In addition, advertising and sales literature for the Contracts may discuss  the
assets of any of the Participating Insurance Companies, including a breakdown of
annuity  assets under management, as well as the number of years the company has
been involved in the annuity marketplace.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical  returns
of  the capital  markets in  the United  States, including  common stocks, small
capitalization stocks, long-term  corporate bonds, intermediate-term  government
bonds,  long-term government bonds,  Treasury bills, the  U.S. rate of inflation
(based on the CPI), and combinations of various capital markets. The performance
of these capital markets is based on the returns of different indices.
GT Global Variable  Investment Funds may  use the performance  of these  capital
markets in order to demonstrate general risk-versus-reward investment scenarios.
Performance  comparisons may also include the value of a hypothetical investment
in any of these capital markets. The risks associated with the security types in
any capital market may  or may not  correspond directly to  those of the  Funds.
Ibbotson calculates total returns in the same method as the Funds.
Each  Fund may quote  various measures of  volatility and benchmark correlation,
such as beta,  standard deviation and  R(2), in advertising.  In addition,  each
Fund  may compare these measures to those of other funds. Measures of volatility
seek to compare the Funds' historical  share price fluctuations or total  return
compared to those of a benchmark. All measures of volatility and correlation are
calculated using averages of historical data.
Each  Fund may  advertise examples of  the effect of  periodic investment plans,
including the principle of dollar cost averaging programs. In such a program, an
investor invests a fixed dollar amount in a Fund at periodic intervals,  thereby
purchasing  fewer shares when  prices are high  and more shares  when prices are
low. While such a strategy does not assure a
 
                  Statement of Additional Information Page 72
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
profit or guard against loss in a declining market, the investor's average  cost
per share can be lower than if fixed numbers of shares are purchased at the same
intervals. In evaluating such a plan, investors should consider their ability to
continue purchasing shares through periods of low price levels.
Each  Fund may describe in its sales material and advertisements how an investor
may invest in the Fund through  various retirement plans or other programs  that
offer  deferral of income taxes on investment  earnings and pursuant to which an
investor may make deductible contributions.  Because of their advantages,  these
retirement  plans  and  programs  may  produce  returns  superior  to comparable
non-retirement investments. For example, a $10,000 investment earning a  taxable
return of 10% annually would have an after-tax value of $17,976 after ten years,
assuming  tax  was  deducted from  the  return each  year  at a  39.6%  rate. An
equivalent tax-deferred  investment would  have an  after-tax value  of  $19,626
after  ten years, assuming  tax was deducted  at a 39.6%  rate from the deferred
earnings  at  the   end  of  the   ten-year  period.  In   sales  material   and
advertisements, the Fund may also discuss these plans and programs.
AIM  Distributors may  from time  to time in  its sales  methods and advertising
discuss the risks inherent in investing. The major types of investment risk  are
market  risk, industry risk, credit risk, interest rate risk, liquidity risk and
inflation risk. Risk represents the possibility that you may lose some or all of
your investment over a period of time. A basic tenet of investing is the greater
the potential reward, the greater the risk.
From  time  to  time,  the  GT  Global  Variable  Investment  Funds  will  quote
information  regarding  industries, individual  countries, regions,  world stock
exchanges, and economic and demographic statistics from sources AIM Distributors
deems  reliable,  including  the  economic  and  financial  data  of   financial
organizations, such as:
 1) Stock  market  capitalization:  Morgan Stanley  Capital  International World
    Indices, IFC and Datastream.
 2) Stock market  trading volume:  Morgan  Stanley Capital  International  World
    Indices and IFC.
 3) The  number  of listed  companies: IFC,  GT Guide  to World  Equity Markets,
    Salomon Brothers, Inc. and S.G. Warburg.
 4) Wage rates: U.S. Department of  Labor Statistics and Morgan Stanley  Capital
    International World Indices.
 5) International  industry  performance: Morgan  Stanley  Capital International
    World Indices, Wilshire Associates and Salomon Brothers, Inc.
 6) Stock  market  performance:  Morgan  Stanley  Capital  International   World
    Indices, IFC and Datastream.
 7) The  Consumer Price Index and inflation rate: The World Bank, Datastream and
    IFC.
 8) Gross Domestic Product ("GDP"): Datastream and The World Bank.
 9) GDP growth rate: IFC, The World Bank and Datastream.
10) Population: The World Bank, Datastream and United Nations.
11) Average annual growth rate (%) of population: The World Bank, Datastream and
    United Nations.
12) Age distribution within populations: OECD and United Nations.
13) Total exports and imports by year: IFC, The World Bank and Datastream.
14) Top three companies by country, industry, or market: IFC, GT Guide to  World
    Equity Markets, Salomon Brothers, Inc. and S.G. Warburg.
15) Foreign  direct  investments to  developing  countries: The  World  Bank and
    Datastream.
16) Supply, consumption,  demand  and  growth in  demand  of  certain  products,
    services  and industries, including, but  not limited to electricity, water,
    transportation, construction materials, natural resources, technology, other
    basic infrastructure, financial services, health care services and supplies,
    consumer products and services and telecommunications equipment and services
    (sources of such information may include,  but would not be limited to,  The
    World Bank, OECD, IMF, Bloomberg and Datastream).
17) Standard  deviation and performance returns for U.S. and non-U.S. equity and
    bond markets: Morgan Stanley Capital International.
18) Countries restructuring their  debt, including those  under the Brady  Plan:
    AIM and/or the sub-advisors.
19) Political and economic structure of countries: Economist Intelligence Unit.
 
                  Statement of Additional Information Page 73
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
20) Government  and corporate  bonds --  credit ratings,  yield to  maturity and
    performance returns: Salomon Brothers, Inc.
21) Dividend yields for U.S. and non-U.S. companies: Bloomberg.
From time to  time, each Fund  may quote in  advertising materials economic  and
financial  data,  including  statistics  and  commentary  from  published  works
including, but not limited to,  Megatrends 2000, Global Paradox, and  Megatrends
Asia.
From  time  to  time, each  Fund  may  include in  its  advertisement  and sales
material, information about privatization which is an economic process involving
the sale of state-owned companies to the private sector.
In addition, Strategic  Income Fund,  from time to  time, may  quote yields  and
total  returns of representative debt instruments from emerging market countries
in its advertising and sales literature.
AIM believes that  before emerging market  countries with high  debt levels  can
attract  substantial amounts of  foreign capital, they  must put their financial
houses in  order.  Some  emerging  markets  governments  have  implemented  debt
restructuring  programs.  From  time  to  time, each  Fund  may  include  in its
advertising and sales  material information on  emerging market countries'  debt
restructuring activities.
In  advertising and sales materials, each Fund  may make reference to or discuss
its products, services and accomplishments. Among these accomplishments are that
in 1983  INVESCO (NY)  provided assistance  to the  government of  Hong Kong  in
linking  its currency to the  U.S. dollar, and that  in 1987 Japan's Ministry of
Finance  licensed  GT  Asset  Management  Ltd.  as  one  of  the  first  foreign
discretionary  investment managers for Japanese investors. Such accomplishments,
however, should  not  be  viewed  as  an endorsement  of  INVESCO  (NY)  by  the
government  of Hong Kong, Japan's Ministry of Finance or any other government or
government agency. Nor do any such  accomplishments of INVESCO (NY) provide  any
assurance  that the GT  Global Variable Investment  Funds' investment objectives
will be achieved.
ECONOMIC DEVELOPMENT IN EMERGING MARKETS
AIM and/or the sub-advisors have identified six phases to track the progress  of
developing economies.
In  addition, AIM and/or the sub-advisors  focus on the transitions between each
phase:
    BETWEEN PHASES 1 & 2,  STABILIZATION: Developing nations recognize the  need
for economic reform and launch initiatives to stabilize their economies. Typical
measures  might  include  initiating  monetary  reforms  to  contain  inflation,
controlling government spending, and addressing external trade imbalances.
    BETWEEN PHASES 2 & 3,  RENOVATION: Economic development gathers momentum  as
the   governments  of  developing   nations  take  further   steps  to  increase
productivity and external competitiveness. Typical reforms include easing market
regulations, privatizing  state-owned industries,  lowering trade  barriers  and
reforming the national tax structure.
    BETWEEN  PHASES  3 &  4, NEW  CONSTRUCTION: As  economic reforms  take hold,
infrastructure improvements  are  needed  to facilitate  and  support  long-term
growth.  The construction and upgrading of highways and airports, communications
and utility systems  generally require  financing in  the form  of public  debt.
Similarly,  as  the private  sector develops,  bolstered by  new privatizations,
corporate debt securities typically are issued to finance business expansion.
EMERGING MARKET TRADING VOLUME
The annual trading volume of debt securities from developing economies according
to Salomon Brothers, Inc. has grown from $90 billion in 1990 to $150 billion  in
1991  to $400 billion in 1992 and was  estimated to be $1,200 billion at the end
of 1993 and $1.5 trillion at the end of 1994, respectively.
 
                  Statement of Additional Information Page 74
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
                          DESCRIPTION OF DEBT RATINGS
- --------------------------------------------------------------------------------
DESCRIPTION OF BOND RATINGS
    MOODY'S INVESTORS SERVICE, INC. ("Moody's") rates the debt securities issued
by various entities from  "Aaa" to "C." Investment  grade ratings are the  first
four categories:
        Aaa  -- Bonds which are rated Aaa are  judged to be of the best quality.
    They carry the smallest degree of investment risk and are generally referred
    to as "gilt  edged." Interest payments  are protected  by a large  or by  an
    exceptionally  stable  margin and  principal  is secure.  While  the various
    protective elements are likely to change, such changes as can be  visualized
    are  most  unlikely  to impair  the  fundamentally strong  position  of such
    issues.
        Aa -- Bonds which are rated Aa are  judged to be of high quality by  all
    standards.  Together with  the Aaa  group they  comprise what  are generally
    known as high grade bonds. They are rated lower than the best bonds  because
    margins  of  protection  may  not  be  as  large  as  in  Aaa  securities or
    fluctuation of protective elements may be of greater amplitude or there  may
    be  other elements  present which  make the  long-term risk  appear somewhat
    larger than the Aaa securities.
        A  --  Bonds  which  are  rated  A  possess  many  favorable  investment
    attributes  and  are  to be  considered  as  upper-medium-grade obligations.
    Factors giving security to principal  and interest are considered  adequate,
    but  elements may  be present which  suggest a  susceptibility to impairment
    some time in the future.
        Baa --  Bonds  which  are  rated  Baa  are  considered  as  medium-grade
    obligations,  (i.e., they are neither  highly protected nor poorly secured).
    Interest payments and principal security appear adequate for the present but
    certain protective  elements may  be lacking  or may  be  characteristically
    unreliable  over  any  great length  of  time. Such  bonds  lack outstanding
    investment characteristics and in  fact have speculative characteristics  as
    well.
        Ba  -- Bonds which are rated Ba are judged to have speculative elements;
    their future cannot be considered  as well-assured. Often the protection  of
    interest  and principal payments may be  very moderate, and thereby not well
    safeguarded during both good and bad  times over the future. Uncertainty  of
    position characterizes bonds in this class.
        B  --  Bonds which  are rated  B generally  lack characteristics  of the
    desirable investment. Assurance  of interest  and principal  payments or  of
    maintenance  of other terms of the contract over any long period of time may
    be small.
        Caa -- Bonds which are rated Caa  are of poor standing. Such issues  may
    be  in default or  there may be  present elements of  danger with respect to
    principal or interest.
        Ca  --  Bonds  which  are  rated  Ca  represent  obligations  which  are
    speculative in a high degree. Such issues are often in default or have other
    marked shortcomings.
        C  -- Bonds which are  rated C are the lowest  rated class of bonds, and
    issues so rated can be regarded  as having extremely poor prospects of  ever
    attaining any real investment standing.
ABSENCE  OF RATING: Where no rating has been assigned or where a rating has been
suspended or withdrawn, it may  be for reasons unrelated  to the quality of  the
issue.
Should no rating be assigned, the reason may be one of the following:
         1. An application for rating was not received or accepted.
         2.  The issue or issuer  belongs to a group  of securities or companies
    that are not rated as a matter of policy.
         3. There is a lack of essential data pertaining to the issue or issuer.
         4. The issue  was privately  placed, in which  case the  rating is  not
    published in Moody's publications.
Suspension  or withdrawal may occur if new and material circumstances arise, the
effects of which preclude satisfactory analysis; if there is no longer available
reasonable up-to-date data  to permit a  judgement to  be formed; if  a bond  is
called for redemption; or for other reasons.
Note:  Moody's applies numerical  modifiers, 1, 2  and 3 in  each generic rating
classification from Aa to Caa. The  modifier 1 indicates that the Company  ranks
in  the higher end  of its generic  rating category; the  modifier 2 indicates a
mid-range ranking; and the  modifier 3 indicates that  the Company ranks in  the
lower end of its generic rating category.
 
                  Statement of Additional Information Page 75
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
    STANDARD  & POOR'S, a  division of The  McGraw-Hill Companies, Inc. ("S&P"),
rates the securities debt of various  entities in categories ranging from  "AAA"
to  "D"  according  to quality.  Investment  grade  ratings are  the  first four
categories:
        AAA -- An obligation rated "AAA" has the highest rating assigned by S&P.
    The obligor's capacity to meet its financial commitment on the obligation is
    extremely strong.
        AA  --  An  obligation  rated  "AA"  differs  from  the  highest   rated
    obligations  only  in a  small degree.  The obligor's  capacity to  meet its
    financial commitment on the obligation is very strong.
        A -- An obligation rated "A" is somewhat more susceptible to the adverse
    effects of changes in circumstances and economic conditions than obligations
    in higher rated categories.
        BBB  --  An   obligation  rated  "BBB"   exhibits  adequate   protection
    parameters.  However, adverse economic  conditions or changing circumstances
    are more likely to lead  to a weakened capacity of  the obligor to meet  its
    financial commitment on the obligation.
        BB,  B, CCC, CC, C -- Obligations  rated "BB," "B," "CCC," "CC," and "C"
    are  regarded  as  having  significant  speculative  characteristics.   "BB"
    indicates  the least degree  of speculation and "C"  the highest. While such
    obligations will likely  have some quality  and protective  characteristics,
    these may be outweighed by large uncertainties or major exposures to adverse
    conditions.
        BB  -- An  obligation rated "BB"  is less vulnerable  to nonpayment than
    other speculative issues. However, it  faces major ongoing uncertainties  or
    exposure  to adverse business, financial, or economic conditions which could
    lead to the obligor's inadequate  capacity to meet its financial  commitment
    on the obligation.
        B  --  An obligation  rated "B"  is more  vulnerable to  nonpayment than
    obligations rated "BB," but the obligor  currently has the capacity to  meet
    its  financial commitment on the obligation. Adverse business, financial, or
    economic conditions will likely impair the obligor's capacity or willingness
    to meet its financial commitment on the obligation.
        CCC -- An obligation rated "CCC" is currently vulnerable to  nonpayment,
    and is dependent upon favorable business, financial, and economic conditions
    for  the obligor to meet its financial  commitment on the obligation. In the
    event of adverse business, financial, or economic conditions, the obligor is
    not likely to  have the  capacity to meet  its financial  commitment on  the
    obligation.
        CC  --  An  obligation  rated "CC"  is  currently  highly  vulnerable to
    nonpayment.
        C -- The "C" rating may be used to cover a situation where a  bankruptcy
    petition  has been filed or  similar action has been  taken, but payments on
    this obligation are being continued.
        D --  An obligation  rated "D"  is in  payment default.  The "D"  rating
    category is used when payments on an obligation are not made on the date due
    even  if the  applicable grace period  has not expired,  unless S&P believes
    that such payments  will be made  during such grace  period. The "D"  rating
    also  will be used upon the filing of a bankruptcy petition or the taking of
    a similar action if payments on an obligation are jeopardized.
PLUS (+) OR MINUS  (-): The ratings from  "AA" to "CCC" may  be modified by  the
addition  of a  plus or minus  sign to  show relative standing  within the major
rating categories.
NR: Indicates that  no rating  has been  requested, that  there is  insufficient
information  on which to base  a rating, or that S&P  does not rate a particular
type of obligation as a matter of policy.
DESCRIPTION OF COMMERCIAL PAPER RATINGS
    MOODY'S employs  the  designation  "Prime-1" to  indicate  commercial  paper
having  a superior ability for repayment  of senior short-term debt obligations.
Prime-1 repayment  ability will  often be  evidenced by  many of  the  following
characteristics:  leading market positions  in well-established industries; high
rates of return  on funds employed;  conservative capitalization structure  with
moderate  reliance on debt and ample asset protection; broad margins in earnings
coverage of  fixed financial  charges  and high  internal cash  generation;  and
well-established  access to a range of  financial markets and assured sources of
alternate liquidity. Issues rated Prime-2 have a strong ability for repayment of
senior short-term debt obligations. This normally  will be evidenced by many  of
the  characteristics cited  above but  to a  lesser degree.  Earnings trends and
coverage ratios, while sound, may  be more subject to variation.  Capitalization
characteristics,  while  still appropriate,  may  be more  affected  by external
conditions. Ample alternate liquidity is maintained.
    S&P ratings of commercial paper  are graded into several categories  ranging
from  "A1" for the highest quality obligations  to "D" for the lowest. Issues in
the "A"  category are  delineated  with numbers  1, 2,  and  3 to  indicate  the
relative  degree  of safety.  A-1 --  This highest  category indicates  that the
degree of safety regarding timely payment is strong. Those issues determined  to
possess extremely strong safety characteristics will be denoted with a plus sign
(+)  designation.  A-2  -- Capacity  for  timely  payments on  issues  with this
designation is satisfactory; however,  the relative degree of  safety is not  as
high as for issues designated "A-1."
 
                  Statement of Additional Information Page 76
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
                                    APPENDIX
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS FUND
From time to time the Fund will quote information including, but not limited to,
data regarding:
    / / Increased  usage  of  new  technologies such  as,  but  not  limited to,
        cellular  and  wireless  communications  in  emerging  and   established
        countries around the world
    / / Supply and demand of telephone equipment and services
    / / Regulatory environment of telecommunications industries
    / / Revenue, price and usage of telecommunications products and services
    / / Privatization of telecommunications companies
The  information quoted has not been independently verified by the Fund and will
be based on data provided that is believed to be reliable and accurate from, but
not limited to, the following sources:
    / / Salomon Brothers World Equity  Telecommunications Index, which  includes
        stock  market data about the  telecommunications industry in established
        and developing markets
    / / OECD  and  other  publications  from   its  subsidiaries  such  as   the
        International Telecommunications Union
    / / Morgan  Stanley Capital International stock market industry indices such
        as Telecommunications, Broadcasting &  Publishing and Data Processing  &
        Reproduction
    / / International Technology Consultants, a Washington D.C. based firm which
        publishes  reports such as EASTERN EUROPEAN  & SOVIET TELECOM REPORT and
        LATIN AMERICAN TELECOM REPORT
INFRASTRUCTURE FUND
From time to time the Fund may quote information including, but not limited to:
    / / Supply and  demand of  telephone  equipment and  services,  electricity,
        water,  transportation, construction materials  and other infrastructure
        related products and services
    / / Regulatory environment of infrastructure industries
    / / Quantity and costs of current and projected infrastructure projects
    / / Privatization of industries and companies
    / / New  technologies,  products   and  services   used  in   infrastructure
        industries
NATURAL RESOURCES FUND
From time to time the Fund may quote information including, but not limited to:
    / / Supply, demand and prices of natural resources
    / / Regulatory environment of natural resources
    / / Supply,   demand  and  prices  of  products  manufactured  from  natural
        resources
    / / New technologies, products  and services used  in the natural  resources
        industries
 
                  Statement of Additional Information Page 77
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
                              FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The  audited financial statements of  the Funds as of  December 31, 1998 and the
fiscal year then ended appear on the following pages.
 
                  Statement of Additional Information Page 78
<PAGE>
                    GT GLOBAL VARIABLE STRATEGIC INCOME FUND
 
                            PORTFOLIO OF INVESTMENTS
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                            PRINCIPAL       VALUE        % OF NET
FIXED INCOME INVESTMENTS                                        CURRENCY     AMOUNT       (NOTE 1)        ASSETS
- --------------------------------------------------------------  --------   -----------   -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
Government & Government Agency Obligations (59.7%)
  Algeria (1.0%)
    Algeria Tranche 1 Loan Assignment, 6.625% due 9/4/06+ ....   USD           500,000   $   225,000         1.0
  Argentina (2.9%)
    Republic of Argentina:
      11% due 12/4/05 - 144A{.} ..............................   USD           180,000       179,550         0.8
      11% due 10/9/06 ........................................   USD           134,000       132,828         0.6
      Discount Bond, 6.0625% due 3/31/23+ ....................   USD           150,000       111,188         0.5
      Global Bond, 11.375% due 1/30/17 .......................   USD           110,000       110,275         0.5
      I.O. Strip, 12.11% due 4/10/05 .........................   USD           115,000       104,938         0.5
  Brazil (0.9%)
    Brazil Floating Rate Discount Note, 6.125% due
     4/15/24+ ................................................   USD           325,000       194,188         0.9
  Bulgaria (1.9%)
    Republic of Bulgaria:
      Discounted Bond Series A, 6.6875% due 7/28/24 -
       Euro+ .................................................   USD           397,000       278,893         1.3
      Front Loaded Interest Reduction Bond Series A, 2.5%
       (2.75% at 7/99) due 7/28/12++ .........................   USD           218,000       124,941         0.6
  Canada (1.0%)
    Canadian Government, 6% due 6/1/08 .......................   CAD           300,000       212,294         1.0
  Colombia (0.9%)
    Republic of Colombia:
      8.625% due 4/1/08 ......................................   USD           179,000       153,045         0.7
      7.27% due 6/15/03 - 144A{.} ............................   USD            55,000        47,025         0.2
  Denmark (2.4%)
    Kingdom of Denmark, 7% due 11/10/24 ......................   DKK         2,600,000       523,432         2.4
  Germany (14.2%)
    Deutschland Republic:
      6% due 1/5/06 ..........................................   DEM         2,180,000     1,491,100         6.8
      6.5% due 7/4/27 ........................................   DEM           920,000       690,147         3.1
      6.5% due 10/14/05 ......................................   DEM           700,000       489,672         2.2
      6% due 7/4/07 ..........................................   DEM           670,000       463,844         2.1
  Greece (1.7%)
    Hellenic Republic:
      8.8% due 6/19/07 .......................................   GRD        50,000,000       198,849         0.9
      9.2% due 3/21/02 .......................................   GRD        50,000,000       184,616         0.8
  Italy (4.3%)
    Italian Government, 7.25% due 11/1/26 ....................   ITL       780,000,000       634,596         2.9
    Italian Buoni Poliennali Del Tesoro (BTPS), 8.5% due
     1/1/04 ..................................................   ITL       420,000,000       313,022         1.4
  Ivory Coast (1.2%)
    Ivory Coast:
      1.9% due 3/29/18 .......................................   FRF         3,851,250       186,034         0.8
      2% due 3/29/18 .........................................   USD           296,250        87,564         0.4
  Korea (1.1%)
    Korea Republic Restructured Debt, 8.281% due 4/8/00 ......   USD           250,000       239,375         1.1
  Mexico (0.6%)
    United Mexican States, 9.875% due 1/15/07 ................   USD           131,000       129,526         0.6
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       F1
<PAGE>
                    GT GLOBAL VARIABLE STRATEGIC INCOME FUND
 
                       PORTFOLIO OF INVESTMENTS (cont'd)
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                            PRINCIPAL       VALUE        % OF NET
FIXED INCOME INVESTMENTS                                        CURRENCY     AMOUNT       (NOTE 1)        ASSETS
- --------------------------------------------------------------  --------   -----------   -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
Government & Government Agency Obligations (Continued)
  Netherlands (1.1%)
    Netherlands Government Bond, 5.5% due 1/15/28 ............   NLG           400,000   $   236,184         1.1
  Peru (1.7%)
    Republic of Peru, Past Due Interest Bond, 4.00% (4.50% at
     7/99) due 3/7/17++ ......................................   USD           584,000       369,380         1.7
  Russia (0.2%)
    Bank for Foreign Economic Affairs (Venesheconombank)
     Principal Loans, 6.625% due 12/15/20+ ...................   USD           667,458        43,385         0.2
    Russian Ministry of Finance #6, due 5/14/06 GDR -
     144A{.} .................................................   USD             9,000           653          --
  Turkey (0.4%)
    Republic of Turkey, 12% due 12/15/08 .....................   USD            96,000        95,520         0.4
  United Kingdom (10.0%)
    United Kingdom Treasury, 9% due 10/13/08 .................   GBP           970,000     2,200,798        10.0
  United States (12.2%)
    United States Treasury:
      6.375% due 8/15/27{./} .................................   USD         1,660,000     1,909,225         8.7
      4.25% due 11/15/03 .....................................   USD           300,000       296,227         1.3
      4.75% due 11/15/08 .....................................   USD           170,000       171,381         0.8
    Federal National Mortgage Association, 7.25% due
     6/20/02 .................................................   NZD           550,000       298,589         1.4
                                                                                         -----------
Total Government & Government Agency Obligations (cost
 $13,455,718) ................................................                            13,127,284
                                                                                         -----------
Corporate Bonds (26.7%)
  Argentina (1.9%)
    Telefonica de Argentina, 9.125% due 5/7/08 - Reg S{c} ....   USD           245,000       226,652         1.0
    YPF S.A., 10% due 11/2/28 ................................   USD            95,000        97,969         0.4
    Supercanal Holdings S.A., 11.5% due 5/15/05 - Reg S{c} ...   USD           100,000        57,500         0.3
    Mastellone Hermanos S.A., 11.75% due 4/1/08 - 144A{.} ....   USD            53,000        42,798         0.2
  Brazil (0.2%)
    Banco Hipotecario Espana, 10% due 4/17/03 - 144A{.} ......   USD            53,000        48,760         0.2
  Cayman Islands (0.5%)
    Nacional Financiera SNC, 8.649% due 12/1/00 - Euro 144A+
     {.} .....................................................   USD           105,000       106,050         0.5
  Colombia (0.1%)
    Financiera Energia Nacional, 9.375% due 6/15/06 - Reg
     S{c} ....................................................   USD            30,000        25,200         0.1
  Germany (0.6%)
    Bayerische Landesbank NY, 5.875% due 12/1/08 .............   USD           140,000       143,163         0.6
  Jamaica (0.1%)
    Mechala Group Jamaica, 12.75% due 12/30/99 - Reg S{c} ....   USD            44,000        30,800         0.1
  Mexico (4.1%)
    Petroleos Mexicanos:
      8.85% due 9/15/07 - 144A{.} ............................   USD           180,000       162,000         0.7
      9.375% due 12/2/08 - 144A{.} ...........................   USD           130,000       129,675         0.6
      9.25% due 3/30/18 - 144A{.} ............................   USD           160,000       128,800         0.6
    Banco Nacional Comercio Exte., 8% due 7/18/02 - Reg
     S{c} ....................................................   USD           153,000       149,940         0.7
</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, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                            PRINCIPAL       VALUE        % OF NET
FIXED INCOME INVESTMENTS                                        CURRENCY     AMOUNT       (NOTE 1)        ASSETS
- --------------------------------------------------------------  --------   -----------   -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
Corporate Bonds (Continued)
    Monterrey Power, S.A. de C.V., 9.625% due 11/15/09 -
     144A{.} .................................................   USD           193,000   $   148,610         0.7
    Dine, S.A. de C.V., 8.75% due 10/15/07 - 144A{.} .........   USD            90,000        72,450         0.3
    Grupo Industrial Durango, S.A., 12.625% due 8/1/03 .......   USD            50,000        44,125         0.2
    Cemex Valenciana, 9.66% due 12/29/49 .....................   USD            40,000        36,200         0.2
    Grupo Azucarero Mexico, 11.5% due 1/15/05 - Reg S{c} .....   USD            50,000        19,000         0.1
  Netherlands (0.6%)
    TPSA Finance BV, 7.75% due 12/10/08 - 144A{.} ............   USD           126,000       124,268         0.6
  Russia (0.2%)
    Lukinter Finance BV Convertible, 3.5% due 5/6/02 -
     144A{.} .................................................   USD            94,000        34,310         0.2
    Mosenergo Finance BV, 8.375% due 10/9/02 - 144A{.} .......   USD            67,000        11,725          --
  United Kingdom (0.4%)
    Colt Telecom Group PLC, 7.625% due 7/31/08 ...............   DEM           150,000        89,058         0.4
  United States (18.0%)
    Comcast Cable Communications, 6.2% due 11/15/08 ..........   USD           300,000       305,994         1.4
    Xerox Corp., 5.5% due 11/15/03 ...........................   USD           300,000       300,834         1.4
    Ford Motor Credit Corp., 5.25% due 6/16/08 ...............   DEM           320,000       200,895         0.9
    Unisys Corp., 7.875% due 4/1/08 ..........................   USD           150,000       159,938         0.7
    Chase Manhattan Corp., 6.25% due 1/15/06 .................   USD           152,000       157,318         0.7
    Lenfest Communications, 8.25% due 2/15/08 - 144A{.} ......   USD           150,000       157,125         0.7
    Lin Television Corp., 8.375% due 3/1/08 - 144A{.} ........   USD           150,000       151,313         0.7
    General Motors Acceptance Corp., 6.625% due 10/15/05 .....   USD           143,000       150,998         0.7
    Engle Homes, Inc., 9.25% due 2/1/08 ......................   USD           150,000       150,750         0.7
    Hollywood Casino Corp., 12.75% due 11/1/03 ...............   USD           125,000       133,750         0.6
    Riddell Sports, Inc., 10.5% due 7/15/07 ..................   USD           135,000       128,242         0.6
    Smithfield Foods, Inc., 7.625% due 2/15/08 ...............   USD           125,000       126,250         0.6
    Graham Packaging/GPC Capital, 8.75% due 1/15/08 -
     144A{.} .................................................   USD           125,000       125,625         0.6
    Trump Atlantic Association Funding, Inc., 11.25% due
     5/1/06 ..................................................   USD           135,000       118,800         0.5
    Cendant Corp., 7.75% due 12/1/03 .........................   USD           100,000       101,216         0.5
    United Stationers Supply, 8.375% due 4/15/08 - 144A{.} ...   USD           100,000       100,250         0.5
    Drypers Corp. Series B, 10.25% due 6/15/07 ...............   USD            90,000        87,750         0.4
    Loews Cineplex Entertainment, 8.875% due 8/1/08 -
     144A{.} .................................................   USD            75,000        77,813         0.4
    Circus Circus Enterprise, 9.25% due 12/1/05 ..............   USD            75,000        77,794         0.3
    Fisher Scientific International, 9% due 2/1/08 ...........   USD            75,000        75,000         0.3
    Chancellor Media Corp., 8.125% due 12/15/07 - 144A{.} ....   USD            75,000        74,813         0.3
    PSINET, Inc., 10% due 2/15/05 ............................   USD            75,000        74,625         0.3
    Viasystems, Inc., 9.75% due 6/1/07 .......................   USD            75,000        70,125         0.3
    U.S. Filter Corp., 4.5% due 12/15/01 .....................   USD            73,000        69,168         0.3
    Niagara Mohawk Power, 7.375% due 7/1/03 ..................   USD            65,000        66,632         0.3
    Penn National Gaming, Inc., 10.625% due 12/15/04 -
     144A{.} .................................................   USD            55,000        58,025         0.3
    Duane Reade, Inc., 9.25% due 2/15/08 .....................   USD            55,000        56,925         0.3
    Eagle Family Foods, 8.75% due 1/15/08 - 144A{.} ..........   USD            60,000        56,850         0.3
    Norampac, Inc., 9.5% due 2/1/08 - 144A{.} ................   USD            55,000        56,100         0.3
    Allbritton Communication, 8.875% due 2/1/08 - 144A{.} ....   USD            55,000        55,000         0.2
    International Home Foods, 10.375% due 11/1/06 ............   USD            50,000        54,375         0.2
    Revlon Consumer Products, 8.625% due 2/2/08 - 144A{.} ....   USD            55,000        50,875         0.2
</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, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                            PRINCIPAL       VALUE        % OF NET
FIXED INCOME INVESTMENTS                                        CURRENCY     AMOUNT       (NOTE 1)        ASSETS
- --------------------------------------------------------------  --------   -----------   -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
Corporate Bonds (Continued)
    Syratech Corp., 11% due 4/15/07{.} .......................   USD            60,000   $    48,900         0.2
    Salton/Maxim Housewares, 10.75% due 12/15/05 - 144A{.} ...   USD            45,000        45,506         0.2
    Park Place Entertainment, 7.875% due 12/15/05 -
     144A{.} .................................................   USD            45,000        45,281         0.2
    Healthsouth Corp., 3.25% due 4/1/03 ......................   USD            50,000        42,750         0.2
    Delco Remy International, Inc., 8.625% due 12/15/07 ......   USD            40,000        41,200         0.2
    BTI Telecommunications Corp., 10.5% due 9/15/07 -
     144A{.} .................................................   USD            55,000        40,975         0.2
    Hayes Lemmerz International, Inc., 8.25% due 12/15/05 -
     144A{.} .................................................   USD            40,000        40,000         0.2
    Pillowtex Corp., 9% due 12/15/07 - 144A{.} ...............   USD            25,000        25,875         0.1
    ACME Metal, Inc., 10.875% due 12/15/07 - 144A(::) {.} ....   USD            45,000         6,075          --
                                                                                         -----------
Total Corporate Bonds (cost $6,120,826) ......................                             5,896,783
                                                                                         -----------
Mortgage Backed (7.2%)
  Denmark (1.4%)
    Realkredit Danmark, 6% due 10/1/26 .......................   DKK         1,904,000       298,991         1.4
  United States (5.8%)
    Government National Mortgage Association TBA Pass Thru
     Pool, due 1/15/29{*} ....................................   USD         1,300,000     1,288,625         5.8
                                                                                         -----------
Total Mortgage Backed (cost $1,540,127) ......................                             1,587,616
                                                                                         -----------
Structured Notes (0.5%)
  Korea (0.5%)
    Fixed Rate Trust Certificate 13.55% due 2/15/02 (Issued by
     a newly created Delaware Business Trust, collateralized
     by triple A paper. This trust certificate has a credit
     risk component linked to the value of a referenced
     security: Korean Development[::] (Cost $130,000) ........   USD           130,000       102,700         0.5
                                                                                         -----------       -----
 
TOTAL FIXED INCOME INVESTMENTS (cost $21,246,671) ............                            20,714,383        94.1
                                                                                         -----------       -----
<CAPTION>
 
                                                                             NO. OF         VALUE        % OF NET
WARRANTS                                                        COUNTRY     WARRANTS      (NOTE 1)        ASSETS
- --------------------------------------------------------------  --------   -----------   -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
  Republic of Argentina Global Bond Warrants, 11% due 12/3/99
   (cost $0) .................................................   ARG               180         8,640          --
                                                                                         -----------       -----
    GOVERNMENT & GOVERNMENT AGENCY OBLIGATIONS
<CAPTION>
 
                                                                            PRINCIPAL       VALUE        % OF NET
SHORT-TERM INVESTMENTS                                          CURRENCY     AMOUNT       (NOTE 1)        ASSETS
- --------------------------------------------------------------  --------   -----------   -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
Commercial Paper - Discounted (5.9%)
  United States (5.9%)
    GE Capital, effective yield 5.25%, due 1/21/99 ...........   USD         1,300,000     1,296,136         5.9
                                                                                         -----------
Total Commercial Paper - Discounted (cost $1,296,136) ........                             1,296,136
                                                                                         -----------       -----
 
TOTAL SHORT-TERM INVESTMENTS (cost $1,296,136) ...............                             1,296,136         5.9
                                                                                         -----------       -----
</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, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
REPURCHASE AGREEMENT                                                                      (NOTE 1)        ASSETS
- --------------------------------------------------------------                           -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
  Dated December 31, 1998 with State Street Bank & Trust Co.,
   due January 4, 1999, for an effective yield of 4.50%,
   collateralized by $695,000 U.S. Treasury Notes, 7.75% due
   12/31/99 (market value of collateral is $715,633, including
   accrued interest)(cost $698,000)  .........................                           $   698,000         3.2
                                                                                         -----------       -----
 
TOTAL INVESTMENTS (cost $23,240,807)  * ......................                            22,717,159       103.2
Other Assets and Liabilities .................................                              (695,314)       (3.2)
                                                                                         -----------       -----
 
NET ASSETS ...................................................                           $22,021,845       100.0
                                                                                         -----------       -----
                                                                                         -----------       -----
</TABLE>
 
- --------------
 
       [::]  Certain events may cause the contract to terminate prior to date
             shown.
        {.}  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.
        {c}  Security issued under Regulation S. Rule 144A and additional
             restrictions may apply in the resale of such securities.
          +  The coupon rate shown on floating rate note represents the rate at
             period end.
       (::)  Valued in good faith at fair value using procedures approved by the
             Board of Directors (See Note 1 of Notes to Financial Statements).
         ++  The coupon rate shown on step-up coupon bond represents the rate at
             period end.
        {*}  Purchased on a forward commitment basis.
       {./}  All or part of the Fund's holdings in this security is segregated
             as collateral for when issued or derivative instruments.
          *  For Federal income tax purposes, cost is $23,399,273 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $     629,172
                 Unrealized depreciation:            (1,311,286)
                                                  -------------
                 Net unrealized depreciation:     $    (682,114)
                                                  -------------
                                                  -------------
</TABLE>
 
    Abbreviation:
    GDR--Global Depositary Receipt
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
                 FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
 
<TABLE>
<CAPTION>
                                          MARKET VALUE                            UNREALIZED
                                             (U.S.         CONTRACT    DELIVERY  APPRECIATION
CONTRACTS TO SELL:                          DOLLARS)        PRICE        DATE    (DEPRECIATION)
- ----------------------------------------  ------------   ------------  --------  ------------
<S>                                       <C>            <C>           <C>       <C>
Canadian Dollars........................      209,194         1.54785   3/18/99   $   (2,455)
French Francs...........................      161,647         5.45470   3/18/99        3,348
                                          ------------                           ------------
    Total Contracts to Sell (Receivable
     amount $371,734)...................      370,841                                    893
                                          ------------                           ------------
THE VALUE OF CONTRACTS TO SELL AS PERCENTAGE OF NET ASSETS IS 1.68%.
    Total Open Forward Foreign Currency
     Contracts..........................                                          $      893
                                                                                 ------------
                                                                                 ------------
</TABLE>
 
- ----------------
See Note 1 to the financial statements.
 
    The accompanying notes are an integral part of the financial statements.
 
                                       F5
<PAGE>
                GT GLOBAL VARIABLE GLOBAL GOVERNMENT INCOME FUND
 
                            PORTFOLIO OF INVESTMENTS
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                             PRINCIPAL      VALUE        % OF NET
FIXED INCOME INVESTMENTS                                         CURRENCY     AMOUNT       (NOTE 1)       ASSETS
- ---------------------------------------------------------------  --------   -----------   ----------   -------------
<S>                                                              <C>        <C>           <C>          <C>
Government & Government Agency Obligations (81.1%)
  Canada (1.8%)
    Canadian Government, 6% due 6/1/08 ........................   CAD           230,000   $  162,759         1.8
  Denmark (10.6%)
    Kingdom of Denmark Bullet, 6% due 11/15/09 ................   DKK         5,200,000      933,025        10.6
  Germany (10.8%)
    Deutschland Republic:
      6% due 7/4/07 ...........................................   DEM         1,020,000      706,150         8.0
      6.5% due 10/14/05 .......................................   DEM           250,000      174,883         2.0
      6% due 1/5/06 ...........................................   DEM           105,000       71,819         0.8
  Greece (3.6%)
    Hellenic Republic:
      8.8% due 6/19/07 ........................................   GRD        50,000,000      198,849         2.3
      9.2% due 3/21/02 ........................................   GRD        30,000,000      110,769         1.3
  Italy (9.3%)
    Italian Buoni Poliennali del Tesoro (BTPS):
      7.25% due 1/1/26 ........................................   ITL       610,000,000      496,287         5.6
      8.5% due 1/1/04 .........................................   ITL       440,000,000      327,928         3.7
  Netherlands (1.8%)
    Netherlands Government Bond, 5.5% due 1/15/28 .............   NLG           275,000      162,376         1.8
  United Kingdom (9.3%)
    United Kingdom Treasury, 9% due 10/13/08 ..................   GBP           360,000      816,791         9.3
  United States (32.8%)
    United States Treasury:
      5.625% due 5/15/08 ......................................   USD         1,515,000    1,617,055        18.4
      6.375% due 8/15/27{./} ..................................   USD           740,000      851,405         9.7
      4.75% due 11/15/08 ......................................   USD           280,000      282,275         3.2
    Federal National Mortgage Association, 6.375% due
     8/15/07 ..................................................   AUD           200,000      129,119         1.5
  Uruguay (1.1%)
    Republic of Uruguay, 7.875% due 7/15/27 - 144A{.} .........   USD           100,000       98,000         1.1
                                                                                          ----------
Total Government & Government Agency Obligations (cost
 $7,015,142) ..................................................                            7,139,490
                                                                                          ----------
Corporate Bonds (10.0%)
  Germany (2.0%)
    Bayerische Landesbank NY, 5.875% due 12/1/08 ..............   USD           100,000      102,259         1.2
    Kredit Fuer Wiederaufbau International Finance, 7.25% due
     7/16/07 ..................................................   AUD           100,000       67,831         0.8
  Tunisia (2.3%)
    Banque Centrais de Tunisie, 8.25% due 9/19/27 .............   USD           250,000      207,049         2.3
  United Kingdom (4.3%)
    SBC Jersey, 8.75% due 6/20/05 .............................   GBP           200,000      380,552         4.3
  United States (1.4%)
    Ford Motor Credit Corp., 5.25% due 6/16/08 ................   DEM           190,000      119,282         1.4
                                                                                          ----------
Total Corporate Bonds (cost $882,222) .........................                              876,973
                                                                                          ----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       F6
<PAGE>
                GT GLOBAL VARIABLE GLOBAL GOVERNMENT INCOME FUND
 
                       PORTFOLIO OF INVESTMENTS (cont'd)
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                             PRINCIPAL      VALUE        % OF NET
FIXED INCOME INVESTMENTS                                         CURRENCY     AMOUNT       (NOTE 1)       ASSETS
- ---------------------------------------------------------------  --------   -----------   ----------   -------------
<S>                                                              <C>        <C>           <C>          <C>
Mortgage Backed (6.5%)
  Denmark (2.8%)
    Realkredit Danmark, 6% due 10/1/26 ........................   DKK         1,596,000   $  250,624         2.8
  United States (3.7%)
    Government National Mortgage Association TBA Pass Thru
     Pool, due 1/15/29{*} .....................................   USD           275,000      272,594         3.1
    Federal Home Loan Mortgage Association Pool #E62449, 8.5%
     due 3/1/10 ...............................................   USD            48,446       50,217         0.6
                                                                                          ----------
Total Mortgage Backed (cost $553,986) .........................                              573,435
                                                                                          ----------       -----
 
TOTAL FIXED INCOME INVESTMENTS (cost $8,451,350) ..............                            8,589,898        97.6
                                                                                          ----------       -----
<CAPTION>
                                                                             PRINCIPAL      VALUE        % OF NET
SHORT-TERM INVESTMENTS                                           CURRENCY     AMOUNT       (NOTE 1)       ASSETS
- ---------------------------------------------------------------  --------   -----------   ----------   -------------
<S>                                                              <C>        <C>           <C>          <C>
Commercial Paper - Discounted (3.1%)
  United States (3.1%)
    General Electric Capital Corp., effective yield 5.25%, due
     1/21/99
     (cost $274,133) ..........................................   USD           275,000      274,133         3.1
                                                                                          ----------       -----
<CAPTION>
                                                                                            VALUE        % OF NET
REPURCHASE AGREEMENT                                                                       (NOTE 1)       ASSETS
- ---------------------------------------------------------------                           ----------   -------------
<S>                                                              <C>        <C>           <C>          <C>
  Dated December 31, 1998, with State Street Bank & Trust Co.,
   due January 4, 1999, for an effective yield of 4.50%,
   collateralized by $130,000 U.S. Treasury Bonds, 6.75% due
   8/15/26 (market value of collateral is $158,681, including
   accrued interest).(cost $151,000)  .........................                              151,000         1.7
                                                                                          ----------       -----
 
TOTAL INVESTMENTS (cost $8,876,483)  * ........................                            9,015,031       102.4
Other Assets and Liabilities ..................................                             (214,340)       (2.4)
                                                                                          ----------       -----
 
NET ASSETS ....................................................                           $8,800,691       100.0
                                                                                          ----------       -----
                                                                                          ----------       -----
</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.
       {./}  All or part of the Fund's holdings in this security is segregated
             as collateral for when-issued securities. See Note 1 to the
             financial statements.
        {*}  Purchased on a forward commitment basis.
          *  For Federal income tax purposes, cost is $8,876,483 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $     287,545
                 Unrealized depreciation:              (148,997)
                                                  -------------
                 Net unrealized appreciation:     $     138,548
                                                  -------------
                                                  -------------
</TABLE>
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
                 FORWARD FOREIGN CURRENCY CONTRACT OUTSTANDING
                               DECEMBER 31, 1998
 
<TABLE>
<CAPTION>
                                           MARKET VALUE     CONTRACT    DELIVERY    UNREALIZED
CONTRACT TO SELL:                         (U.S. DOLLARS)      PRICE       DATE     DEPRECIATION
- ----------------------------------------  --------------   -----------  --------  --------------
<S>                                       <C>              <C>          <C>       <C>
Canadian Dollars........................       156,896         1.54785   3/18/99   $    (1,842)
                                          --------------                          --------------
  Total Contract to Sell (Receivable
   amount $155,054).....................       156,896                                  (1,842)
                                          --------------                          --------------
THE VALUE OF CONTRACT TO SELL AS
 PERCENTAGE OF NET ASSETS IS 1.78%.
  Total Open Forward Foreign Currency
   Contract.............................                                           $    (1,842)
                                                                                  --------------
                                                                                  --------------
</TABLE>
 
- ----------------
See Note 1 to the financial statements.
 
    The accompanying notes are an integral part of the financial statements.
 
                                       F7
<PAGE>
                 GT GLOBAL VARIABLE U.S. GOVERNMENT INCOME FUND
 
                            PORTFOLIO OF INVESTMENTS
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                             PRINCIPAL      VALUE        % OF NET
FIXED INCOME INVESTMENTS                                         CURRENCY     AMOUNT       (NOTE 1)       ASSETS
- ---------------------------------------------------------------  --------   -----------   ----------   -------------
<S>                                                              <C>        <C>           <C>          <C>
Government & Government Agency Obligations (65.9%)
  United States Treasury:
    7.625% due 2/15/25 ........................................   USD         1,050,000   $1,381,511        18.7
    9.25% due 2/15/16 .........................................   USD           600,000      861,680        11.7
    5.625% due 5/15/08 ........................................   USD           300,000      320,209         4.3
  Federal Home Loan Mortgage Corp., 5.75% due 7/15/03 .........   USD         1,300,000    1,335,607        18.1
  Tennessee Valley Authority Series A, 6.375% due 6/15/05 .....   USD           400,000      423,250         5.7
  Student Loan Marketing Assoc., 7.5% due 3/8/00 ..............   USD           350,000      360,406         4.9
  Federal National Mortgage Association, 6.8% due 1/10/03 .....   USD            90,000       95,446         1.3
  Financial Assistance Corp., 9.375% due 7/21/03 ..............   USD            75,000       87,843         1.2
                                                                                          ----------
Total Government & Government Agency Obligations (cost
 $4,719,931) ..................................................                            4,865,952
                                                                                          ----------
Mortgage Backed (26.1%)
  Federal National Mortgage Association:
    Pool #398668, 6.5% due 9/1/27 .............................   USD           308,167      310,383         4.2
    Pool #363939, 7% due 3/1/04 ...............................   USD           124,630      127,317         1.7
    Pool #356801, 6% due 12/1/08 ..............................   USD           106,578      107,045         1.5
  Mortgage Index Amortizing Trust, 6.682% due 8/25/04 .........   USD           500,000      501,206         6.8
  FHLM Corporation Gold Pool #E72223, 6% due 9/1/13 ...........   USD           494,634      496,335         6.7
  Government National Mortgage Association:
    Pool # 780523, 7.5% due 3/15/08 ...........................   USD           219,072      227,013         3.1
  Federal Home Loan Mortgage Corp. Series 1462 PL due
   7/15/21 ....................................................   USD           155,000      158,426         2.1
                                                                                          ----------
Total Mortgage Backed (cost $1,911,230) .......................                            1,927,725
                                                                                          ----------
Supranational Bonds (7.7%)
  International Bank of Reconstruction & Development, 5.25% due
   9/16/03 ....................................................   USD           350,000      352,625         4.8
  Asian Development Bank, 8% due 4/30/01 ......................   USD           200,000      210,806         2.9
                                                                                          ----------
Total Supranational Bonds (cost $529,321) .....................                              563,431
                                                                                          ----------       -----
 
TOTAL FIXED INCOME INVESTMENTS (cost $7,160,482) ..............                            7,357,108        99.7
                                                                                          ----------       -----
 
<CAPTION>
                                                                                            VALUE        % OF NET
REPURCHASE AGREEMENT                                                                       (NOTE 1)       ASSETS
- ---------------------------------------------------------------                           ----------   -------------
<S>                                                              <C>        <C>           <C>          <C>
  Dated December 31, 1998, with State Street Bank & Trust Co.,
   due January 4, 1999, for an effective yield of 4.50%,
   collateralized by $30,000 U.S. Treasury Bonds, 8.88% due
   8/15/17 (market value of collateral is $43,177, including
   accrued interest) (cost $40,000)  ..........................                               40,000         0.5
                                                                                          ----------       -----
 
TOTAL INVESTMENTS (cost $7,200,482)  * ........................                            7,397,108       100.2
Other Assets and Liabilities ..................................                              (15,937)       (0.2)
                                                                                          ----------       -----
 
NET ASSETS ....................................................                           $7,381,171       100.0
                                                                                          ----------       -----
                                                                                          ----------       -----
</TABLE>
 
- --------------
 
          *  For Federal income tax purposes, cost is $7,200,482 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $     212,935
                 Unrealized depreciation:               (16,309)
                                                  -------------
                 Net unrealized appreciation:     $     196,626
                                                  -------------
                                                  -------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       F8
<PAGE>
                     GT GLOBAL VARIABLE LATIN AMERICA FUND
 
                            PORTFOLIO OF INVESTMENTS
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                               COUNTRY      SHARES       (NOTE 1)       ASSETS
- ---------------------------------------------------------------  --------   -----------   ----------   -------------
<S>                                                              <C>        <C>           <C>          <C>
Telephone (20.7%)
  Telecomunicacoes Brasileiras S.A. - Telebras: ...............   BRZL               --           --         8.2
    Preferred - ADR{\/} .......................................   --              5,740   $  417,226          --
    Common ....................................................   --              8,793      393,043          --
  Carso Global Telecom "A1"-/- ................................   MEX            96,300      324,891         3.3
  Nortel Inversora S.A. - ADR{\/} .............................   ARG            19,400      310,400         3.1
  Telecomunicacoes de Sao Paulo S.A. - TELESP: ................   BRZL               --           --         2.2
    Common-/- .................................................   --              1,428      122,940          --
    Preferred .................................................   --                736      100,375          --
  Telefonica de Argentina S.A. - ADR{\/} ......................   ARG             4,300      120,131         1.2
  Tele Centro Sul Participacoes S.A. - ADR{\/}-/- .............   BRZL            2,500      104,531         1.1
  Telesp Participacoes S.A.-/- ................................   BRZL            7,365       94,495         1.0
  Tele Norte Leste Participacoes S.A. - Preferred-/- ..........   BRZL            5,165       64,563         0.6
                                                                                          ----------
                                                                                           2,052,595
                                                                                          ----------
Electric Companies (15.3%)
  Enersis S.A. - ADR{\/} ......................................   CHLE           11,800      304,588         3.1
  Companhia Energetica de Minas Gerais (CEMIG) - ADR{\/} ......   BRZL           12,583      239,538         2.4
  Companhia de Eletricidade do Estado da Bahia - COELBA .......   BRZL            4,960      168,303         1.7
  Companhia Paranaense de Energia (Copel): ....................   BRZL               --           --         1.7
    ADR{\/} ...................................................   --             13,673       97,420          --
    Common ....................................................   --             11,938       68,189          --
  C.A. La Electricidad de Caracas - ADR{\/} ...................   VENZ            7,153      152,001         1.5
  Eletricidade de Sao Paulo S.A. ..............................   BRZL            2,900      134,454         1.4
  Gener S.A. - ADR{\/} ........................................   CHLE            7,764      124,224         1.3
  Empresa Nacional de Electricidad S.A. - ADR{\/} .............   CHLE            9,100      103,513         1.0
  Light - Servicos de Eletricidade S.A. .......................   BRZL              572       69,582         0.7
  Companhia Paulista de Forca e Luz-/- ........................   BRZL              430       30,969         0.3
  Empresa Bandeirante de Energia S.A.-/- ......................   BRZL            1,336       14,381         0.1
  C.A. La Electridad de Caracas ...............................   VENZ           14,348        6,199         0.1
                                                                                          ----------
                                                                                           1,513,361
                                                                                          ----------
Beverages-Alcoholic (8.1%)
  Fomento Economico Mexicano, S.A. de C.V. - ADR{\/} ..........   MEX            18,100      481,913         4.9
  Compania Cervecerias Unidas S.A. - ADR{\/} ..................   CHLE           10,300      198,275         2.0
  Quilmes Industrial S.A. (Quinsa) - ADR{\/} ..................   LUX            13,300      123,856         1.2
  Cerveceria Backus & Johnston S.A. ...........................   PERU            6,244        2,058          --
                                                                                          ----------
                                                                                             806,102
                                                                                          ----------
Manufacturing-Diversified (6.8%)
  Grupo Carso S.A. de C.V. "A1"-/- ............................   MEX            83,800      284,412         2.9
  Desc S.A. de C.V. - ADR{\/} .................................   MEX             8,070      154,843         1.6
  Alpha, S.A. de C.V. "A" .....................................   MEX            42,200      112,533         1.1
  Grupo Industrial Saltillo, S.A. de C.V. "B" .................   MEX            34,200       85,327         0.9
  Usinas Siderurgicas de Minas Gerais S.A. - USIMINAS .........   BRZL           15,300       33,817         0.3
                                                                                          ----------
                                                                                             670,932
                                                                                          ----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                       F9
<PAGE>
                     GT GLOBAL VARIABLE LATIN AMERICA FUND
 
                       PORTFOLIO OF INVESTMENTS (cont'd)
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                               COUNTRY      SHARES       (NOTE 1)       ASSETS
- ---------------------------------------------------------------  --------   -----------   ----------   -------------
<S>                                                              <C>        <C>           <C>          <C>
Banks-Regional (6.3%)
  Uniao de Bancos Brasileiros S.A. (Unibanco) Units{\/}{=} ....   BRZL        7,525,500   $  217,299         2.2
  Banco de Galicia y Buenos Aires S.A. de C.V. - ADR{\/} ......   ARG            11,543      203,447         2.0
  Bansud S.A. "B"-/- ..........................................   ARG            22,700       97,476         1.0
  Banco de A. Edwards - ADR{\/} ...............................   CHLE            5,777       63,547         0.6
  Banco Latinoamericano de Exportaciones, S.A. "E"{\/} ........   PAN             2,713       45,104         0.5
                                                                                          ----------
                                                                                             626,873
                                                                                          ----------
Financial-Diversified (6.1%)
  Administradora de Fondos de Peniones Provida S.A. -
   ADR{\/} ....................................................   CHLE           13,181      177,120         1.8
  Quinenco S.A. - ADR{\/} .....................................   CHLE           14,800      118,400         1.2
  Grupo Financiero Banorte, S.A. de C.V. "B"-/- ...............   MEX           132,000      113,333         1.1
  Grupo Financiero Banamex Accival, S.A. de C.V. (Banacci)
   "B"-/- .....................................................   MEX            83,980      110,107         1.1
  Credicorp Ltd. - ADR{\/}-/- .................................   PERU            9,640       86,760         0.9
                                                                                          ----------
                                                                                             605,720
                                                                                          ----------
Oil & Gas-Exploration & Production (4.3%)
  Petroleo Brasileiro S.A. (Petrobras) Preferred ..............   BRZL            3,347      379,541         3.8
  Harken Energy Corp.-/- ......................................   US             27,890       54,037         0.5
                                                                                          ----------
                                                                                             433,578
                                                                                          ----------
Construction-Cement & Aggregates (3.8%)
  Apasco, S.A. de C.V. ........................................   MEX            54,100      190,716         1.9
  Corporacion GEO, S.A. de C.V. "B"-/- ........................   MEX            26,000       72,222         0.7
  Grupo Cementos de Chihuahua, S.A. de C.V. "B" ...............   MEX           128,500       61,654         0.6
  Corporacion Venezolana de Cementos S.A.C.A.: ................   VENZ               --           --         0.5
    "A" .......................................................   --             45,516       29,860          --
    "B" .......................................................   --             30,088       20,005          --
  Companhia Cimento Portland Itau-/- ..........................   BRZL               68        7,740         0.1
                                                                                          ----------
                                                                                             382,197
                                                                                          ----------
Entertainment (2.8%)
  Grupo Televisa S.A. - GDR{\/}-/- ............................   MEX            11,400      281,438         2.8
                                                                                          ----------
Paper & Forest Products (2.7%)
  Kimberly-Clark de Mexico, S.A. de C.V. "A" ..................   MEX            64,700      205,864         2.1
  Votorantim Celulose e Papel S.A.-/- .........................   BRZL            5,700       61,341         0.6
                                                                                          ----------
                                                                                             267,205
                                                                                          ----------
Iron & Steel (2.5%)
  Companhia Vale de Rio Doce "A" - Preferred ..................   BRZL           17,000      218,129         2.2
  Caemi Mineracao E Metalurgia S.A. - Preferred ...............   BRZL            1,356       27,502         0.3
                                                                                          ----------
                                                                                             245,631
                                                                                          ----------
Chemicals (2.3%)
  Sociedad Quimica y Minera de Chile S.A. - ADR{\/} ...........   CHLE            6,800      229,075         2.3
                                                                                          ----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F10
<PAGE>
                     GT GLOBAL VARIABLE LATIN AMERICA FUND
 
                       PORTFOLIO OF INVESTMENTS (cont'd)
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                               COUNTRY      SHARES       (NOTE 1)       ASSETS
- ---------------------------------------------------------------  --------   -----------   ----------   -------------
<S>                                                              <C>        <C>           <C>          <C>
Metal Mining (2.3%)
  Industrias Penoles S.A. (CP) ................................   MEX            58,600   $  177,576         1.8
  Grupo Mexico S.A. "B" .......................................   MEX            23,100       51,333         0.5
                                                                                          ----------
                                                                                             228,909
                                                                                          ----------
Banks-Major Regional (2.0%)
  Banco Rio de La Plata S.A. - ADR{\/} ........................   ARG            15,100      196,300         2.0
                                                                                          ----------
Investment Management (1.8%)
  Itausa - Investimentos Itau S.A. - Preferred ................   BRZL          317,325      176,000         1.8
                                                                                          ----------
Telecommunications-Long Distance (1.6%)
  Embratel Participacoes S.A. - Preferred-/- ..................   BRZL           11,800      161,176         1.6
                                                                                          ----------
Water Utilities (1.4%)
  Companhia de Saneamento Basico do Estado de Sao Paulo -
   SABESP .....................................................   BRZL            1,832      138,772         1.4
                                                                                          ----------
Retail-Department Stores (1.4%)
  Controladora Comercial Mexicana, S.A. de C.V. - UBC[.]-/- ...   MEX           176,500      124,798         1.3
  El Puerto de Liverpool, S.A. de C.V. ........................   MEX             4,661        6,356         0.1
                                                                                          ----------
                                                                                             131,154
                                                                                          ----------
Telecommunications-Cellular / Wireless (1.2%)
  Telesp Celular S.A.: ........................................   BRZL               --           --         0.6
    "B" - Preferred ...........................................   --                663       29,129          --
    Common-/- .................................................   --              1,183       26,693          --
  Telepar Celular S.A. "B" - Preferred ........................   BRZL              530       33,340         0.3
  Telerj Celular S.A. "B" - Preferred-/- ......................   BRZL            1,370       32,327         0.3
                                                                                          ----------
                                                                                             121,489
                                                                                          ----------
Land Development (1.1%)
  IRSA Inversiones y Representaciones S.A. - GDR{\/} ..........   ARG             4,089      113,713         1.1
                                                                                          ----------
Textiles-Specialty (1.1%)
  Companhia de Tecidos Norte de Minas - Preferred .............   BRZL            1,056      113,642         1.1
                                                                                          ----------
Foods (1.0%)
  Grupo Industrial Maseca, S.A. de C.V. "B" ...................   MEX           128,600      103,919         1.0
                                                                                          ----------
Beverages-Non-Alcoholic (0.9%)
  Pepsi-Gemex S.A. - GDR{\/} ..................................   MEX            11,200       87,500         0.9
                                                                                          ----------
Oil & Gas-Refining & Marketing (0.8%)
  Companhia Brasileira de Petroleo Ipiranga - Preferred .......   BRZL           14,594       80,944         0.8
                                                                                          ----------
Retail-Food Chains (0.8%)
  Supermercados Unimarc S.A. - ADR{\/} ........................   CHLE           18,900       79,144         0.8
                                                                                          ----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F11
<PAGE>
                     GT GLOBAL VARIABLE LATIN AMERICA FUND
 
                       PORTFOLIO OF INVESTMENTS (cont'd)
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                               COUNTRY      SHARES       (NOTE 1)       ASSETS
- ---------------------------------------------------------------  --------   -----------   ----------   -------------
<S>                                                              <C>        <C>           <C>          <C>
Metal Fabricators (0.6%)
  Sanluis Corp., S. A. de C.V.-/- .............................   MEX            39,700   $   57,344         0.6
                                                                                          ----------
Lodging Hotels (0.5%)
  Grupo Posadas S.A.: .........................................   MEX                --           --         0.5
    "A"-/- ....................................................   --             48,400       20,533          --
    "L"-/- ....................................................   --             68,100       28,891          --
                                                                                          ----------
                                                                                              49,424
                                                                                          ----------
Power Producers-Independent (0.2%)
  Centrais Geradoras do Sul do Brasil S.A.: ...................   BRZL               --           --         0.2
    Preferred-/- ..............................................   --             10,158       12,613          --
    Common-/- .................................................   --              8,442       11,042          --
                                                                                          ----------
                                                                                              23,655
                                                                                          ----------
Airlines (0.2%)
  Cintra S.A.-/- ..............................................   MEX            35,600       20,353         0.2
                                                                                          ----------       -----
 
TOTAL EQUITY INVESTMENTS (cost $15,614,394) ...................                            9,998,145       100.6
                                                                                          ----------       -----
<CAPTION>
 
                                                                             PRINCIPAL      VALUE        % OF NET
FIXED INCOME INVESTMENTS                                         CURRENCY     AMOUNT       (NOTE 1)       ASSETS
- ---------------------------------------------------------------  --------   -----------   ----------   -------------
<S>                                                              <C>        <C>           <C>          <C>
Corporate Bonds (0.0%)
  Brazil (0.0%)
    Companhia Vale do Rio Doce - Non Convertible (Cost $0) ....   BRL            20,000           --          --
                                                                                          ----------       -----
 
TOTAL INVESTMENTS (cost $15,614,394)* .........................                            9,998,145       100.6
Other Assets and Liabilities ..................................                              (62,888)       (0.6)
                                                                                          ----------       -----
 
NET ASSETS ....................................................                           $9,935,257       100.0
                                                                                          ----------       -----
                                                                                          ----------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security.
       {\/}  U.S. currency denominated.
        {=}  Each unit represents one preferred share of Unibanco and one
             preferred "B" share of Unibanco Holdings.
        [.]  Each unit represents three "B" shares and one "C" share.
          *  For Federal income tax purposes, cost is $15,773,062 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $     231,661
                 Unrealized depreciation:            (6,006,578)
                                                  -------------
                 Net unrealized depreciation:     $  (5,774,917)
                                                  -------------
                                                  -------------
</TABLE>
 
    Abbreviations:
    ADR--American Depositary Receipt
    GDR--Global Depositary Receipt
    Ltd--Limited
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F12
<PAGE>
                     GT GLOBAL VARIABLE LATIN AMERICA FUND
 
                       PORTFOLIO OF INVESTMENTS (cont'd)
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at December 31, 1998, 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) ..................   10.4                     10.4
Brazil (BRZL/BRL) ....................   39.0                     39.0
Chile (CHLE/CLP) .....................   14.1                     14.1
Luxembourg (LUX/LUF) .................    1.2                      1.2
Mexico (MEX/MXN) .....................   31.9                     31.9
Panama (PAN/PND) .....................    0.5                      0.5
Peru (PERU/PES) ......................    0.9                      0.9
United States (US/USD) ...............    0.5        (0.6)        (0.1)
Venezuela (VENZ/VEB) .................    2.1                      2.1
                                        ------      -----        -----
Total  ...............................  100.6        (0.6)       100.0
                                        ------      -----        -----
                                        ------      -----        -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $9,935,257.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F13
<PAGE>
                    GT GLOBAL VARIABLE GROWTH & INCOME FUND
 
                            PORTFOLIO OF INVESTMENTS
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                              COUNTRY      SHARES       (NOTE 1)        ASSETS
- --------------------------------------------------------------  --------   ----------   ------------   -------------
<S>                                                             <C>        <C>          <C>            <C>
Finance (18.7%)
  UBS A.G. ...................................................   SWTZ           5,386   $  1,655,179         3.0
    BANKS-MONEY CENTER
  First Tennessee National Corp. .............................   US            33,400      1,271,288         2.3
    BANKS-REGIONAL
  American General Corp. .....................................   US            11,950        932,100         1.7
    INSURANCE - LIFE
  ING Groep N.V. .............................................   NETH          14,138        861,890         1.6
    OTHER FINANCIAL
  First Union Corp. ..........................................   US            14,000        851,375         1.5
    BANKS-REGIONAL
  Royal & Sun Alliance Insurance Group PLC ...................   UK            98,531        803,596         1.5
    INSURANCE - MULTI-LINE
  Commonwealth Bank of Australia .............................   AUSL          50,000        709,135         1.3
    BANKS-MONEY CENTER
  National Australia Bank Ltd. ...............................   AUSL          45,000        677,816         1.2
    BANKS-MONEY CENTER
  CGU PLC ....................................................   UK            37,916        592,948         1.1
    INSURANCE - MULTI-LINE
  Lloyds TSB Group PLC .......................................   UK            41,571        590,692         1.1
    BANKS-MONEY CENTER
  National Westminister Bank PLC .............................   UK            27,000        520,058         0.9
    BANKS-MONEY CENTER
  Credit Suisse Group ........................................   SWTZ           3,320        519,808         0.9
    BANKS-MONEY CENTER
  IKB Deutsche Industriebank AG ..............................   GER           19,890        410,595         0.6
    BANKS-REGIONAL
  Fortis AG: .................................................   BELG              --             --          --
    OTHER FINANCIAL
    CVG-/- ...................................................   --             1,932          8,667          --
    Strip VVPR-/- ............................................   --             1,932            112          --
                                                                                        ------------
                                                                                          10,405,259
                                                                                        ------------
Consumer Non-Durables (17.1%)
  Cadbury Schweppes PLC ......................................   UK            92,255      1,571,515         2.8
    FOODS
  Bestfoods ..................................................   US            18,800      1,001,100         1.8
    FOOD
  Avon Products, Inc. ........................................   US            22,200        982,350         1.8
    PERSONAL CARE/COSMETICS
  Brown-Forman Corp. "B" .....................................   US            12,855        972,963         1.7
    BEVERAGES - ALCOHOLIC
  Philip Morris Cos., Inc. ...................................   US            16,450        880,075         1.6
    TOBACCO AND FOOD
  Anheuser-Busch Cos., Inc. ..................................   US            12,582        825,694         1.5
    BEVERAGES - ALCOHOLIC
  Pernod Ricard ..............................................   FR            12,570        816,336         1.5
    BEVERAGES - ALCOHOLIC
  Diageo PLC .................................................   UK            69,151        786,067         1.4
    BEVERAGES - ALCOHOLIC
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F14
<PAGE>
                    GT GLOBAL VARIABLE GROWTH & INCOME FUND
 
                       PORTFOLIO OF INVESTMENTS (cont'd)
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                              COUNTRY      SHARES       (NOTE 1)        ASSETS
- --------------------------------------------------------------  --------   ----------   ------------   -------------
<S>                                                             <C>        <C>          <C>            <C>
Consumer Non-Durables (Continued)
  Reckitt & Colman PLC .......................................   UK            53,816   $    711,917         1.3
    HOUSEHOLD PRODUCTS
  Foster's Brewing Group Ltd. ................................   AUSL         230,000        622,464         1.1
    BEVERAGES - ALCOHOLIC
  Kellogg Co. ................................................   US             9,634        328,760         0.6
    FOOD
                                                                                        ------------
                                                                                           9,499,241
                                                                                        ------------
Energy (15.0%)
  Texas Utilities Co. ........................................   US            37,000      1,727,438         3.1
    ELECTRIC & GAS UTILITIES
  Mobil Corp. ................................................   US            19,800      1,725,075         3.1
    ENERGY SOURCES
  Royal Dutch Petroleum Co. ..................................   NETH          24,160      1,202,726         2.2
    OIL
  Southern Co. ...............................................   US            40,000      1,162,500         2.1
    ELECTRIC & GAS UTILITIES
  Electrabel S.A. ............................................   BELG           2,280        996,469         1.8
    ELECTRIC & GAS UTILITIES
  Reunies Electrobel & Tractebel S.A. ........................   BELG           3,815        736,499         1.3
    ELECTRIC COMPANIES
  RWE AG .....................................................   GER            8,170        447,379         0.8
    ENERGY EQUIPMENT & SERVICES
  Elf Aquitaine ..............................................   FR             2,980        344,410         0.6
    OIL
                                                                                        ------------
                                                                                           8,342,496
                                                                                        ------------
Services (12.4%)
  Bell Atlantic Corp. ........................................   US            16,000        909,000         1.6
    TELEPHONE - REGIONAL/LOCAL
  McGraw-Hill, Inc. ..........................................   US             8,880        904,650         1.6
    BROADCASTING & PUBLISHING
  Deutsche Telekom A.G. ......................................   GER           25,000        822,132         1.5
    TELEPHONE NETWORKS
  Telecom Corporation of New Zealand Ltd. ....................   NZ           173,200        751,315         1.4
    TELEPHONE NETWORKS
  Koninklijke KPN N.V. .......................................   NETH          15,005        750,969         1.3
    TELEPHONE NETWORKS
  Dun & Bradstreet Corp. .....................................   US            18,800        593,375         1.1
    BROADCASTING & PUBLISHING
  Swisscom AG-/- .............................................   SWTZ           1,414        592,084         1.1
    TELEPHONE NETWORKS
  EMI Group PLC ..............................................   UK            87,790        586,511         1.1
    LEISURE & TOURISM
  Telecom Italia S.p.A. ......................................   ITL           60,000        511,890         0.9
    TELEPHONE NETWORKS
  TABCORP Holdings Ltd. ......................................   AUSL          46,600        285,332         0.5
    LEISURE & TOURISM
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F15
<PAGE>
                    GT GLOBAL VARIABLE GROWTH & INCOME FUND
 
                       PORTFOLIO OF INVESTMENTS (cont'd)
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                              COUNTRY      SHARES       (NOTE 1)        ASSETS
- --------------------------------------------------------------  --------   ----------   ------------   -------------
<S>                                                             <C>        <C>          <C>            <C>
Services (Continued)
  TNT Post Group N.V.-/- .....................................   NETH           5,915   $    190,532         0.3
    TRNASPORTATION - SHIPPING
                                                                                        ------------
                                                                                           6,897,790
                                                                                        ------------
Health Care (5.6%)
  Bristol-Myers Squibb Co. ...................................   US            18,450      2,468,841         4.5
    PHARMACEUTICALS
  American Home Products Corp. ...............................   US            11,000        619,438         1.1
    PHARMACEUTICALS
                                                                                        ------------
                                                                                           3,088,279
                                                                                        ------------       -----
 
TOTAL EQUITY INVESTMENTS (cost $27,292,544) ..................                            38,233,065        68.8
                                                                                        ------------       -----
<CAPTION>
 
                                                                           PRINCIPAL       VALUE         % OF NET
FIXED INCOME INVESTMENTS                                        CURRENCY     AMOUNT       (NOTE 1)        ASSETS
- --------------------------------------------------------------  --------   ----------   ------------   -------------
<S>                                                             <C>        <C>          <C>            <C>
Government & Government Agency Obligations (26.6%)
  Germany (9.0%)
    Deutschland Republic:
      6.25% due 04/26/06 .....................................   DEM        3,120,000      2,174,532         3.9
      6.25% due 01/04/24 .....................................   DEM        2,450,000      1,770,966         3.2
      8.25% due 09/20/01 .....................................   DEM        1,600,000      1,081,173         1.9
  United Kingdom (3.4%)
    United Kingdom Treasury, 8.75% due 8/25/17 ...............   GBP          730,000      1,872,987         3.4
  United States (14.2%)
    United States Treasury:
      5.5% due 02/15/08 ......................................   USD        3,245,000      3,437,396         6.2
      6% due 02/15/26 ........................................   USD        2,169,000      2,366,509         4.3
      5.625% due 02/28/01 ....................................   USD        2,040,000      2,084,085         3.7
                                                                                        ------------
Total Government & Government Agency Obligations (cost
 $13,997,283) ................................................                            14,787,648
                                                                                        ------------
Corporate Bonds (0.0%)
  Germany (0.0%)
    IKB Deutshe Industriebank AG (Banks-Major Regional) ......   DEM            1,500          1,026          --
                                                                                        ------------
Total Corporate Bonds (cost $869) ............................                                 1,026
                                                                                        ------------       -----
 
TOTAL FIXED INCOME INVESTMENTS (cost $13,998,152) ............                            14,788,674        26.6
                                                                                        ------------       -----
<CAPTION>
 
                                                                             NO. OF        VALUE         % OF NET
WARRANTS                                                        COUNTRY     WARRANTS      (NOTE 1)        ASSETS
- --------------------------------------------------------------  --------   ----------   ------------   -------------
<S>                                                             <C>        <C>          <C>            <C>
  Societe Generale Banque Put Warrants due 11/30/99 Tractebel
   (cost $0) .................................................   BEL              763            110          --
                                                                                        ------------       -----
    BANKS-MONEY CENTER
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F16
<PAGE>
                    GT GLOBAL VARIABLE GROWTH & INCOME FUND
 
                       PORTFOLIO OF INVESTMENTS (cont'd)
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
REPURCHASE AGREEMENT                                                                      (NOTE 1)        ASSETS
- --------------------------------------------------------------                          ------------   -------------
<S>                                                             <C>        <C>          <C>            <C>
  Dated December 31,1998, with State Street Bank & Trust Co.,
   due January 4, 1999, for an effective yield of 4.50%,
   collateralized by $1,700,000 U.S. Treasury Bonds, 6.25% due
   8/15/23 (market value of collateral is $1,938,530,
   including accrued interest). (cost $1,896,000)  ...........                          $  1,896,000         3.4
                                                                                        ------------       -----
 
TOTAL INVESTMENTS (cost $43,186,696)  * ......................                            54,917,849        98.8
Other Assets and Liabilities .................................                               662,412         1.2
                                                                                        ------------       -----
 
NET ASSETS ...................................................                          $ 55,580,261       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security
          *  For Federal income tax purposes, cost is $43,209,387 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $  12,087,442
                 Unrealized depreciation:              (378,980)
                                                  -------------
                 Net unrealized appreciation:     $  11,708,462
                                                  -------------
                                                  -------------
</TABLE>
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
The Fund's Portfolio of Investments at December 31, 1998, was concentrated in
the following countries:
 
<TABLE>
<CAPTION>
                                               PERCENTAGE OF NET ASSETS {D}
                                        -------------------------------------------
                                                 FIXED INCOME    SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE)    EQUITY    & WARRANTS      & OTHER     TOTAL
- --------------------------------------  ------   -------------   ----------   -----
<S>                                     <C>      <C>             <C>          <C>
Australia (AUSL/AUD) .................    4.1                                   4.1
Belgium (BELG/BEL) ...................    3.1                                   3.1
France (FR/FRF) ......................    2.1                                   2.1
Germany (GER/DEM) ....................    2.9         9.0                      11.9
Italy (ITLY/ITL) .....................    0.9                                   0.9
Netherlands (NETH/NLG) ...............    5.4                                   5.4
New Zealand (NZ/NZD) .................    1.4                                   1.4
Switzerland (SWTZ/CHF) ...............    5.0                                   5.0
United Kingdom (UK/GBP) ..............   11.2         3.4                      14.6
United States (US/USD) ...............   32.7        14.2            4.6       51.5
                                        ------      -----          -----      -----
Total  ...............................   68.8        26.6            4.6      100.0
                                        ------      -----          -----      -----
                                        ------      -----          -----      -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $55,580,261.
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
                 FORWARD FOREIGN CURRENCY CONTRACT OUTSTANDING
                               DECEMBER 31, 1998
 
<TABLE>
<CAPTION>
                                           MARKET VALUE     CONTRACT    DELIVERY    UNREALIZED
CONTRACT TO SELL:                         (U.S. DOLLARS)      PRICE       DATE     APPRECIATION
- ----------------------------------------  --------------   -----------  --------  --------------
<S>                                       <C>              <C>          <C>       <C>
British Pounds..........................     3,646,456          1.6588   1/29/99   $     2,904
                                          --------------                          --------------
  Total Contract to Sell (Receivable
   amount $3,649,360)...................     3,646,456                                   2,904
                                          --------------                          --------------
THE VALUE OF CONTRACT TO SELL AS
 PERCENTAGE OF NET ASSETS IS 6.56%.
  Total Open Forward Foreign Currency
   Contract.............................                                           $     2,904
                                                                                  --------------
                                                                                  --------------
</TABLE>
 
- ----------------
See Note 1 to the financial statements.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F17
<PAGE>
                   GT GLOBAL VARIABLE TELECOMMUNICATIONS FUND
 
                            PORTFOLIO OF INVESTMENTS
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Telephone (31.9%)
  SBC Communications ........................................   US             41,700   $  2,236,162         3.2
  Cable & Wireless PLC -ADR{\/} .............................   UK             60,000      2,205,000         3.2
  Telecom Italia S.p.A. .....................................   ITLY          350,200      2,203,715         3.2
  NTL Inc.{\/}-/- ...........................................   UK             33,132      1,869,888         2.7
  GTE Corp. .................................................   US             27,300      1,841,044         2.7
  Vodafone Group PLC ........................................   UK             80,900      1,312,210         1.9
  Orange PLC-/- .............................................   UK             96,200      1,116,725         1.6
  Swisscom AG-/- ............................................   SWTZ            2,593      1,085,767         1.5
  Bell Atlantic Corp. .......................................   US             15,200        863,550         1.2
  Telefonica de Espana ......................................   SPN            17,750        788,362         1.1
  BCE Inc. ..................................................   CAN            19,034        719,685         1.0
  Carso Global Telecom 'A1'-/- ..............................   MEX           185,900        627,177         0.9
  SPT Telecom-/- ............................................   CZCH           40,704        622,604         0.9
  BellSouth Corp. ...........................................   US             12,000        598,500         0.9
  Magyar Tavkozlesi Rt. -ADR{\/} ............................   HGRY          100,000        571,999         0.8
  France Telecom S.A.-/- ....................................   FR              7,175        569,943         0.8
  ICG Communications, Inc.-/- ...............................   US             24,900        535,350         0.8
  Deutsche Telekom AG .......................................   GER            16,000        526,164         0.8
  SmarTone Telecommunications Holdings Ltd. .................   HK            149,500        414,897         0.6
  Orckit Communications Ltd.{\/}-/- .........................   ISRL           19,200        310,800         0.4
  Telecom Corporation of New Zealand Ltd. ...................   NZ            133,500        291,306         0.4
  Nippon Telegraph & Telephone Corp. ........................   JPN               350        270,136         0.4
  NetCom ASA-/- .............................................   NOR             7,250        188,951         0.3
  MetroNet Communications Corp. "B"{\/}-/- ..................   CAN             5,500        184,250         0.3
  Energis PLC-/- ............................................   UK              5,350        119,141         0.2
  Telebras Receipts-/- ......................................   BRZL            1,240         55,431         0.1
                                                                                        ------------
                                                                                          22,128,757
                                                                                        ------------
Communications Equipment (12.9%)
  Nokia Oyj A.B. "A"{\/} ....................................   FIN            23,700      2,854,369         4.1
  ECI Telecommunications Ltd.{\/} ...........................   ISRL           47,700      1,699,313         2.4
  Lucent Technologies, Inc. .................................   US              9,800      1,078,000         1.6
  Tellabs, Inc.-/- ..........................................   US             14,000        959,875         1.4
  Tekelec-/- ................................................   US             45,800        758,563         1.1
  British Telecom PLC .......................................   UK             42,700        642,571         0.9
  General Instrument Corp.-/- ...............................   US             17,900        607,481         0.9
  Teleglobe, Inc. ...........................................   CAN             9,800        352,288         0.5
                                                                                        ------------
                                                                                           8,952,460
                                                                                        ------------
Telecommunications (Cellular/Wireless) (11.0%)
  Millicom International Cellular S.A.{\/}-/- ...............   LUX            45,000      1,569,375         2.3
  AirTouch Communications, Inc.-/- ..........................   US             19,100      1,377,588         2.0
  NTT Mobile Communications-/- ..............................   JPN               180        740,839         1.1
  Sprint Corp.-/- ...........................................   US             26,100        603,563         0.9
  Helsingin Puhelin Oyj (Helsinki Telphone Corp.) ...........   FIN             8,750        520,209         0.7
  Nextel Communications, Inc. "A"-/- ........................   US             21,800        515,025         0.7
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F18
<PAGE>
                   GT GLOBAL VARIABLE TELECOMMUNICATIONS FUND
 
                       PORTFOLIO OF INVESTMENTS (cont'd)
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Telecommunications (Continued)
  Western Wireless Corp. "A"-/- .............................   US             22,500   $    495,000         0.7
  Grupo Iusacell S.A. "L" -ADR{\/}-/- .......................   MEX            64,700        460,988         0.7
  Hellenic Telecommunication Organization S.A. ..............   GREC           14,761        393,127         0.6
  ICO Global Communications (Holdings) Ltd.-/- ..............   US             29,800        324,075         0.5
  Mitec Telecom, Inc.-/- ....................................   CAN            43,900        172,157         0.2
  STET Hellas Telecommunications S.A. -ADR{\/}-/- ...........   GREC            4,740        153,458         0.2
  Microcell Telecommunications, Inc. "B"{\/}-/- .............   CAN            24,000        142,500         0.2
  Sonera Group Oyj-/- .......................................   FIN             5,000         88,295         0.1
  Panafon S.A.-/- ...........................................   GREC            2,700         72,391         0.1
  Clearnet Communications, Inc. "A"{\/}-/- ..................   CAN             3,800         30,875          --
                                                                                        ------------
                                                                                           7,659,465
                                                                                        ------------
Telecommunications (Long Distance) (9.0%)
  MCI WorldCom, Inc.-/- .....................................   US             30,936      2,219,658         3.2
  Tel-Save Holdings, Inc.-/- ................................   US             85,000      1,423,750         2.0
  WinStar Communications, Inc.-/- ...........................   US             24,600        959,400         1.4
  Koninklijke KPN N.V. ......................................   NETH           15,000        750,718         1.1
  Esat Telecom Group PLC-ADR{\/}-/- .........................   IRE            14,700        565,950         0.8
  Global Crossing Ltd.-/- ...................................   BDA             7,500        338,438         0.5
                                                                                        ------------
                                                                                           6,257,914
                                                                                        ------------
Broadcasting (8.4%)
  Tele-Communications, Inc. "A"-/- ..........................   US             58,700      3,246,844         4.7
  Comcast Corp. "A" .........................................   US             22,000      1,291,125         1.9
  Univision Communications Inc.-/- ..........................   US             18,000        651,375         0.9
  Infinity Broadcasting Corp. "A"-/- ........................   US             16,000        438,000         0.6
  United International Holdings, Inc.-/- ....................   US             11,800        227,150         0.3
                                                                                        ------------
                                                                                           5,854,494
                                                                                        ------------
Computer Software & Services (3.7%)
  America Online, Inc.-/- ...................................   US             15,900      2,544,000         3.7
                                                                                        ------------
Machinery (Diversified) (3.1%)
  Mannesmann AG .............................................   GER            19,000      2,177,749         3.1
                                                                                        ------------
Manufacturing (Diversified) (2.3%)
  Vivendi ...................................................   FR              6,100      1,582,431         2.3
                                                                                        ------------
Entertainment (1.9%)
  Viacom, Inc. "B"-/- .......................................   US              9,600        710,400         1.0
  Time Warner Inc. ..........................................   US             10,000        620,625         0.9
                                                                                        ------------
                                                                                           1,331,025
                                                                                        ------------
Computers (Networking) (1.7%)
  3Com Corp.-/- .............................................   US             15,000        672,187         1.0
  Cisco Systems, Inc.-/- ....................................   US              3,800        352,687         0.5
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F19
<PAGE>
                   GT GLOBAL VARIABLE TELECOMMUNICATIONS FUND
 
                       PORTFOLIO OF INVESTMENTS (cont'd)
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                           VALUE         % OF NET
EQUITY INVESTMENTS                                             COUNTRY      SHARES        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
Computers (Continued)
  Equant N.V.{\/}-/- ........................................   NETH            2,300   $    155,969         0.2
                                                                                        ------------
                                                                                           1,180,843
                                                                                        ------------
Electrical Equipment (1.6%)
  Uniphase Corp.-/- .........................................   US             15,700      1,089,188         1.6
                                                                                        ------------
Services (Commercial & Consumer) (0.8%)
  Securicor PLC .............................................   UK             69,057        578,420         0.8
                                                                                        ------------
Computer Hardware (0.6%)
  NEC Corp. .................................................   JPN            45,000        414,232         0.6
                                                                                        ------------
Computers (Peripherals) (0.3%)
  Performance Technologies, Inc.-/- .........................   US             15,000        196,875         0.3
                                                                                        ------------
Personal Care (0.1%)
  Globenet Communications Group Ltd. -ADR{\/}-/- ............   BDA            33,200         99,600         0.1
                                                                                        ------------
Telecommunications (0.1%)
  ING Barings Russian Regional Telecommunications Basket
   Bridge Certificates{/\}-/- ...............................   RUS                66         45,139         0.1
                                                                                        ------------       -----
 
TOTAL EQUITY INVESTMENTS (cost $46,048,018) .................                             62,092,592        89.4
                                                                                        ------------       -----
<CAPTION>
 
                                                                            NO. OF         VALUE         % OF NET
RIGHTS                                                         COUNTRY      RIGHTS        (NOTE 1)        ASSETS
- -------------------------------------------------------------  --------   -----------   ------------   -------------
<S>                                                            <C>        <C>           <C>            <C>
  Telefonica de Espana Rights, expire 1/30/99 ...............   SPN            17,750         15,742          --
                                                                                        ------------       -----
 
TOTAL RIGHTS (cost $0) ......................................                                 15,742          --
                                                                                        ------------       -----
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F20
<PAGE>
                   GT GLOBAL VARIABLE TELECOMMUNICATIONS FUND
 
                       PORTFOLIO OF INVESTMENTS (cont'd)
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
 
<TABLE>
<S>                                                            <C>        <C>           <C>            <C>
REPURCHASE AGREEMENT
  Dated December 31, 1998, with State Street Bank & Trust
   Co., due January 4, 1999, for an effective yield of 4.50%,
   collateralized by $6,665,000 of U.S. Treasury Bonds, 6.25%
   due 8/15/23 (market value of collateral is $7,600,179,
   including accrued interest). (cost $7,450,000) ...........                           $  7,450,000        10.7
                                                                                        ------------       -----
 
TOTAL INVESTMENTS (cost $53,498,018) * ......................                             69,558,334       100.1
Other Assets and Liabilites .................................                                (98,999)       (0.1)
                                                                                        ------------       -----
 
NET ASSETS ..................................................                           $ 69,459,335       100.0
                                                                                        ------------       -----
                                                                                        ------------       -----
</TABLE>
 
- --------------
 
        -/-  Non income producing security
       {\/}  U.S. currency denominated
       {/\}  Issued by ING Barings, the value of which is linked to the
             underlying value of a basket of shares issued by Russian regional
             telephone companies.
          *  For Federal income tax purposes, cost is $53,498,031 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $  19,757,367
                 Unrealized depreciation:            (3,697,064)
                                                  -------------
                 Net unrealized appreciation:     $  16,060,303
                                                  -------------
                                                  -------------
</TABLE>
 
    Abbreviation:
    ADR--American Depositary Receipt
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F21
<PAGE>
                   GT GLOBAL VARIABLE TELECOMMUNICATIONS FUND
 
                       PORTFOLIO OF INVESTMENTS (cont'd)
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at December 31, 1998, 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/BEM) ....................    0.6                           0.6
Brazil (BRZL/BRL) ....................    0.1                           0.1
Canada (CAN/CAD) .....................    2.2                           2.2
Czech Republic (CZCH/CSK) ............    0.9                           0.9
Spain (ESP/ESP) ......................    1.1                           1.1
Finland (FIM/FIM) ....................    4.9                           4.9
France (FR/FRF) ......................    3.1                           3.1
Germany (GER/DEM) ....................    3.9                           3.9
Greece (GREC/GRD) ....................    0.9                           0.9
Hong Kong (HK/HKD) ...................    0.6                           0.6
Hungary (HGRY/HUF) ...................    0.8                           0.8
Ireland (IRE/IEP) ....................    0.8                           0.8
Israel (ISRL/ILS) ....................    2.8                           2.8
Italy (ITLY/ITL) .....................    3.2                           3.2
Japan (JPN/JPY) ......................    2.1                           2.1
Luxembourg (LUX/LUF) .................    2.3                           2.3
Mexico (MEX/MXN) .....................    1.6                           1.6
Netherlands (NETH/NLG) ...............    1.3                           1.3
New Zealand (NZ/NZD) .................    0.4                           0.4
Norway (NOR/NOK) .....................    0.3                           0.3
Russia (RUS/SUR) .....................    0.1                           0.1
Switzerland (SWTZ/CHF) ...............    1.5                           1.5
United Kingdom (UK/GBP) ..............   11.3                          11.3
United States (US/USD) ...............   42.6        10.6              53.2
                                        ------      -----        ----------
Total  ...............................   89.4        10.6             100.0
                                        ------      -----        ----------
                                        ------      -----        ----------
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $69,459,335.
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
                 FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
                               DECEMBER 31, 1998
 
<TABLE>
<CAPTION>
                                                                                         UNREALIZED
                                            MARKET VALUE                     DELIVERY   APPRECIATION
CONTRACTS TO SELL:                         (U.S. DOLLARS)    CONTRACT PRICE    DATE    (DEPRECIATION)
- ----------------------------------------  ----------------   --------------  --------  ---------------
<S>                                       <C>                <C>             <C>       <C>
British Pounds..........................         661,529             1.6557   2/26/99   $        750
British Pounds..........................       1,984,591             1.6546   2/26/99            929
Italian Liras...........................       1,090,295           1648.072   1/21/99          1,890
Japanese Yen............................         712,023             120.11   2/10/99        (45,966)
                                          ----------------                             ---------------
  Total Contracts to Sell (Receivable
   amount $4,406,041)...................       4,448,438                                     (42,397)
                                          ----------------                             ---------------
THE VALUE OF CONTRACTS TO SELL AS
 PERCENTAGE OF NET ASSETS IS 6.40%.
 
  Total Open Forward Foreign Currency
   Contracts............................                                                $    (42,397)
                                                                                       ---------------
                                                                                       ---------------
</TABLE>
 
- ----------------
See Note 1 to the financial statements.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F22
<PAGE>
                    GT GLOBAL VARIABLE EMERGING MARKETS FUND
 
                            PORTFOLIO OF INVESTMENTS
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                               COUNTRY      SHARES       (NOTE 1)       ASSETS
- ---------------------------------------------------------------  --------   -----------   ----------   -------------
<S>                                                              <C>        <C>           <C>          <C>
Services (21.4%)
  Telecomunicacoes Brasileiras S.A. (Telebras) Preferred -
   ADR-/- {\/} ................................................   BRZL            2,712   $  197,129         3.5
    TELEPHONE NETWORKS
  Hellenic Telecommunication Organization S.A. (OTE) ..........   GREC            4,977      132,552         2.3
    TELEPHONE NETWORKS
  Magyar Tavkozlesi Rt. - ADR{\/} .............................   HGRY            4,440      132,368         2.3
    TELEPHONE NETWORKS
  Telefonos de Mexico, S.A. de C.V. "L" - ADR{\/} .............   MEX             1,818       88,514         1.6
    TELEPHONE NETWORKS
  STET Hellas Telecommunications S.A. - ADR-/- {\/} ...........   GREC            2,695       87,251         1.5
    WIRELESS COMMUNICATIONS
  Telekomunik Indonesia - ADR .................................   INDO           12,000       78,000         1.4
    TELEPHONE NETWORKS
  Cifra, S.A. de C.V. " V"-/- .................................   MEX            55,795       67,630         1.2
    RETAILERS-OTHER
  Telefonica del Peru S.A. - ADR{\/} ..........................   PERU            5,200       65,975         1.2
    TELEPHONE NETWORKS
  Bezeq Israeli Telecommunication Corporation Ltd.-/- .........   ISRL           19,800       61,945         1.1
    TELEPHONE NETWORKS
  Telecomunicacoes de Sao Paulo S.A. (TELESP): ................   BRZL               --           --         1.1
    TELEPHONE - REGIONAL/LOCAL
    Common-/- .................................................   --            688,200       59,249          --
    Preferred .................................................   --             12,040        1,642          --
  Companhia Brasileira de Distribuicao Grupo Pao de Acucar -
   ADR{\/} ....................................................   BRZL            3,600       55,800         1.0
    RETAILERS-FOOD
  Companhia de Saneamento Basico do Estado de Sao Paulo -
   SABESP .....................................................   BRZL          467,245       35,391         0.6
    BUSINESS & PUBLIC SERVICES
  Telefonica de Argentina S.A. - ADR{\/} ......................   ARG             1,263       35,285         0.6
    TELEPHONE NETWORKS
  Blue Square Chain Investments & Properties Ltd.-/- ..........   ISRL            2,773       33,326         0.6
    RETAILERS-FOOD
  Blue Square-Israel Ltd. - ADR ...............................   US              3,000       31,125         0.6
    RETAILERS-FOOD
  Nortel Inversora S.A. - ADR{\/} .............................   ARG             1,900       30,400         0.5
    TELEPHONE NETWORKS
  Panafon Hellenic Telecom S.A.-/- ............................   GREC              646       17,320         0.3
    WIRELESS COMMUNICATIONS
                                                                                          ----------
                                                                                           1,210,902
                                                                                          ----------
Finance (14.8%)
  Alpha Credit Bank ...........................................   GREC            1,200      125,349         2.2
    BANKS-REGIONAL
  National Bank of Greece S.A. ................................   GREC              411       92,564         1.6
    BANKS-MONEY CENTER
  Liberty Life Association of Africa Ltd. .....................   SAFR            5,960       82,025         1.5
    INSURANCE-LIFE
  Sanlam Ltd. .................................................   SAFR           62,420       62,043         1.1
    INSURANCE - MULTI-LINE
  MISR International Bank - Reg S GDR{c} {\/} .................   EGPT            6,200       58,590         1.0
    BANKS-MONEY CENTER
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F23
<PAGE>
                    GT GLOBAL VARIABLE EMERGING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS (cont'd)
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                               COUNTRY      SHARES       (NOTE 1)       ASSETS
- ---------------------------------------------------------------  --------   -----------   ----------   -------------
<S>                                                              <C>        <C>           <C>          <C>
Finance (Continued)
  Credicorp Ltd. - ADR{\/} ....................................   PERU            6,180   $   55,620         1.0
    BANKS-MONEY CENTER
  Uniao de Bancos Brasileiros S.A. (Unibanco): ................   BRZL               --           --         1.0
    BANKS-MONEY CENTER
    GDR{\/} ...................................................   --              3,840       55,440          --
    Units{=} ..................................................   --                264            9          --
  Turkiye Is Bankasi (Isbank) "C" .............................   TRKY        2,109,100       54,876         1.0
    BANKS-MONEY CENTER
  Grupo Financiero Banamex Accival, S.A. de C.V. "B"-/- .......   MEX            41,000       53,838         1.0
    BANKS-MONEY CENTER
  Yapi ve Kredi Bankasi AS ....................................   TRKY        4,113,906       47,645         0.8
    BANKS-REGIONAL
  BIG Bank Gdanski S.A. - Reg S GDR{c} {\/} ...................   POL             3,000       40,650         0.7
    BANKS-REGIONAL
  Bank Leumi Le - Israel ......................................   ISRL           26,626       37,706         0.7
    BANKS-MONEY CENTER
  Banco de Galicia y Buenos Aires, S.A. de C.V. - ADR{\/} .....   ARG             2,138       37,682         0.7
    BANKS-MONEY CENTER
  KREDYT BANK S.A. - Reg S GDR-/- {c} {\/} ....................   POL             1,634       26,512         0.5
    BANKS-MONEY CENTER
                                                                                          ----------
                                                                                             830,549
                                                                                          ----------
Energy (14.2%)
  MOL Magyar Olaj-es Gazipari RT - Reg S GDR{c} {\/} ..........   HGRY            4,880      134,810         2.4
    GAS PRODUCTION & DISTRIBUTION
  Petroleo Brasileiro S.A. (Petrobras) Preferred ..............   BRZL        1,111,780      126,088         2.2
    OIL
  Companhia Energetica de Minas Gerais (CEMIG) - ADR{\/} ......   BRZL            5,861      110,626         2.0
    ELECTRICAL & GAS UTILITIES
  Enersis S.A. - ADR{\/} ......................................   CHLE            2,963       76,482         1.4
    ELECTRICAL & GAS UTILITIES
  Companhia Paranaense de Energia-Copel - ADR{\/} .............   BRZL            9,900       70,538         1.3
    ELECTRICAL & GAS UTILITIES
  YPF S.A. - ADR{\/} ..........................................   ARG             2,500       69,844         1.2
    ENERGY SOURCES
  Huaneng Power International, Inc. - ADR-/- {\/} .............   CHNA            3,476       50,402         0.9
    ELECTRICAL & GAS UTILITIES
  Eletropaulo Metropolitana Preferred .........................   BRZL        1,064,101       49,329         0.9
    ELECTRICAL & GAS UTILITIES
  Surgutneftegaz - ADR{\/} ....................................   RUS            13,910       46,946         0.8
    OIL
  Companhia de Eletricidade do Estado da Bahia - COELBA .......   BRZL        1,000,000       33,932         0.6
    ELECTRICAL & GAS UTILITIES
  Centrais Electricas de Santa Catarina S.A. ..................   BRZL           60,000       26,821         0.5
    ELECTRICAL & GAS UTILITIES
  Pakistan State Oil Co., Ltd. ................................   PAK               880        1,387          --
    OIL
                                                                                          ----------
                                                                                             797,205
                                                                                          ----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F24
<PAGE>
                    GT GLOBAL VARIABLE EMERGING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS (cont'd)
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                               COUNTRY      SHARES       (NOTE 1)       ASSETS
- ---------------------------------------------------------------  --------   -----------   ----------   -------------
<S>                                                              <C>        <C>           <C>          <C>
Consumer Non-Durables (11.3%)
  Hindustan Lever Ltd. ........................................   IND             3,800   $  149,017         2.6
    PERSONAL CARE/COSMETICS
  ITC Ltd. ....................................................   IND             6,500      114,922         2.0
    TOBACCO
  South African Breweries Ltd. ................................   SAFR            6,111      103,001         1.8
    BEVERAGES - ALCOHOLIC
  Fomento Economico Mexicano, S.A. de C.V. - ADR{\/} ..........   MEX             3,567       94,971         1.7
    BEVERAGES - NON-ALCOHOLIC
  Panamerican Beverages, Inc. "A"{\/} .........................   MEX             3,000       65,438         1.2
    BEVERAGES - NON-ALCOHOLIC
  A-Ahram Beverages Co. S.A.E. - 144A GDR{.}{\/} ..............   EGPT            1,400       40,425         0.7
    BEVERAGES - ALCOHOLIC
  Companhia de Tecidos Norte de Minas Preferred ...............   BRZL          301,000       32,392         0.6
    TEXTILES & APPAREL
  Oriental Weavers "C" ........................................   EGPT            1,350       30,136         0.5
    TEXTILES & APPAREL
  Zaklady Piwowarskie w Zywcu S.A. (Zywiec) ...................   POL               103       12,342         0.2
    BEVERAGES - ALCOHOLIC
  Truworths International Ltd. ................................   SAFR            3,872        2,171          --
    TEXTILES & APPAREL
                                                                                          ----------
                                                                                             644,815
                                                                                          ----------
Materials/Basic Industry (9.1%)
  Suez Cement Co. - Reg S GDR{c} {\/} .........................   EGPT            5,363       76,691         1.4
    CEMENT
  Pohang Iron & Steel Co., Ltd. - ADR{\/} .....................   KOR             4,178       70,504         1.3
    METALS - STEEL
  Tubos de Acero de Mexico S.A. - ADR-/- {\/} .................   MEX            10,000       64,375         1.1
    METALS - STEEL
  Sociedad Quimica y Minera de Chile S.A. - ADR{\/} ...........   CHLE            1,860       62,659         1.1
    CHEMICALS
  Anglo American Platinum Corporation Ltd. ....................   SAFR            4,500       61,702         1.1
    METALS - NON-FERROUS
  Makhteshim-Agan Industries Ltd.-/- ..........................   ISRL           24,927       54,031         1.0
    CHEMICALS
  Cemex "CPO", S.A. de C.V. ...................................   MEX            23,247       50,134         0.9
    CEMENT
  Apasco, S.A. de C.V. ........................................   MEX             9,831       34,657         0.6
    CEMENT
  Hindalco Industries Ltd.: ...................................   IND                --           --         0.6
    METALS - NON-FERROUS
    GDR{\/} ...................................................   --              2,400       28,140          --
    Common ....................................................   --                400        4,833          --
  Engro Chemicals Pakistan Ltd. ...............................   PAK             1,470        2,660          --
    CHEMICALS
                                                                                          ----------
                                                                                             510,386
                                                                                          ----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F25
<PAGE>
                    GT GLOBAL VARIABLE EMERGING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS (cont'd)
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                               COUNTRY      SHARES       (NOTE 1)       ASSETS
- ---------------------------------------------------------------  --------   -----------   ----------   -------------
<S>                                                              <C>        <C>           <C>          <C>
Multi-Industry/Miscellaneous (8.3%)
  GT Taiwan Fund-/- +X+ {\/} ..................................   TWN            27,191   $  277,083         4.9
    COUNTRY FUNDS
  Grupo Carso, S.A. de C.V. "A1" ..............................   MEX            25,500       86,545         1.5
    MULTI-INDUSTRY
  Rembrandt Group Ltd. ........................................   SAFR           10,917       66,776         1.2
    CONGLOMERATE
  Haci Omer Sabanci Holding AS ................................   TRKY        2,713,497       41,758         0.7
    CONGLOMERATE
                                                                                          ----------
                                                                                             472,162
                                                                                          ----------
Capital Goods (4.4%)
  Heliopolis Housing ..........................................   EGPT            1,271      100,067         1.8
    CONSTRUCTION
  NASR (El) City Company For Housing & Construction ...........   EGPT            1,950       58,952         1.0
    CONSTRUCTION
  Corporacion GEO, S.A. de C.V. "B"-/- ........................   MEX            14,200       39,444         0.7
    CONSTRUCTION
  ARA, S.A. de C.V.-/- ........................................   MEX            15,200       38,384         0.7
    CONSTRUCTION
  Arabian International Construction-/- .......................   EGPT            1,571       10,612         0.2
    CONSTRUCTION
                                                                                          ----------
                                                                                             247,459
                                                                                          ----------
Health Care (1.6%)
  Teva Pharmaceutical Industries Ltd. .........................   ISRL            1,800       73,698         1.3
    PHARMACEUTICALS
  Ranbaxy Laboratories Ltd. ...................................   IND             3,000       18,953         0.3
    MEDICAL TECHNOLOGY & SUPPLIES
                                                                                          ----------
                                                                                              92,651
                                                                                          ----------
Technology (1.0%)
  Telekomunikacja Polska S.A. - GDR ...........................   POL            11,540       58,854         1.0
                                                                                          ----------
    SOFTWARE
Consumer Durables (0.3%)
  Qingling Motors Co., Ltd.{*} ................................   CHNA          110,000       19,310         0.3
    AUTOMOBILES
                                                                                          ----------       -----
 
TOTAL EQUITY INVESTMENTS (cost $6,111,420) ....................                            4,884,293        86.4
                                                                                          ----------       -----
<CAPTION>
 
                                                                              NO. OF        VALUE        % OF NET
WARRANTS                                                         COUNTRY     WARRANTS      (NOTE 1)       ASSETS
- ---------------------------------------------------------------  --------   -----------   ----------   -------------
<S>                                                              <C>        <C>           <C>          <C>
  Merrill Lynch - Kospi 200 Call Warrants, due 9/9/99.
   Performance linked to equity securities. Redemption amount
   100% of the final closing price of the Korean Kospi 200
   Index converted to the prevailing foreign exchange rate.
   (cost $163,000) ............................................   US             49,997      264,124         4.7
                                                                                          ----------       -----
    INVESTMENT MANAGEMENT
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F26
<PAGE>
                    GT GLOBAL VARIABLE EMERGING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS (cont'd)
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                              NO. OF        VALUE        % OF NET
RIGHTS                                                           COUNTRY      RIGHTS       (NOTE 1)       ASSETS
- ---------------------------------------------------------------  --------   -----------   ----------   -------------
<S>                                                              <C>        <C>           <C>          <C>
  Companhia de Saneamento Basico do Estado de Sao Paulo -
   SABESP Rights, expire 1/4/99 (cost $0) .....................   BRZL            3,019           --          --
                                                                                          ----------       -----
    BUSINESS & PUBLIC SERVICES
<CAPTION>
 
                                                                                            VALUE        % OF NET
REPURCHASE AGREEMENT                                                                       (NOTE 1)       ASSETS
- ---------------------------------------------------------------                           ----------   -------------
<S>                                                              <C>        <C>           <C>          <C>
  Dated December 31, 1998, with State Street Bank & Trust Co.,
   due January 4, 1999, for an effective yield of 4.50%,
   collateralized by $490,000 U.S. Treasury Notes, 5.625% due
   11/30/99 (market value of collateral is $496,635 including
   accrued interest). (cost $482,000) .........................                           $  482,000         8.5
                                                                                          ----------       -----
 
TOTAL INVESTMENTS (cost $6,756,420)  * ........................                            5,630,417        99.6
Other Assets and Liabilities ..................................                               20,993         0.4
                                                                                          ----------       -----
 
NET ASSETS ....................................................                           $5,651,410       100.0
                                                                                          ----------       -----
                                                                                          ----------       -----
</TABLE>
 
- --------------
 
        {*}  Denominated in Hong Kong Dollars.
        -/-  Non-income producing security.
        {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.
       {\/}  U.S. currency denominated.
        {=}  Each unit represents one preferred share of Unibanco and one
             preferred 'B' share of Unibanco Holdings.
        +X+  The GT Global Variable Emerging Markets Fund (the 'Fund') has
             invested in the GT Global Taiwan Fund, a fund managed by INVESCO
             Asset Management Ltd. which is an affiliate of the Fund's manager,
             A I M Advisors, Inc.
          *  For Federal income tax purposes, cost is $6,936,812 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $     381,966
                 Unrealized depreciation:            (1,688,361)
                                                  -------------
                 Net unrealized depreciation:     $  (1,306,395)
                                                  -------------
                                                  -------------
</TABLE>
 
    Abbreviations:
    ADR--American Depositary Receipt
    GDR--Global Depositary Receipt
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F27
<PAGE>
                    GT GLOBAL VARIABLE EMERGING MARKETS FUND
 
                       PORTFOLIO OF INVESTMENTS (cont'd)
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at December 31, 1998, 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>
Argentina (ARG/ARS) ..................    3.0                                   3.0
Brazil (BRZL/BRL) ....................   15.3                                  15.3
Chile (CHLE/CLP) .....................    2.5                                   2.5
China (CHNA/RMB) .....................    1.2                                   1.2
Egypt (EGPT) .........................    6.6                                   6.6
Greece (GREC/GRD) ....................    7.9                                   7.9
Hungary (HGRY/HUF) ...................    4.7                                   4.7
India (IND/INR) ......................    5.5                                   5.5
Indonesia (INDO/IDR) .................    1.4                                   1.4
Israel (ISRL/ILS) ....................    4.7                                   4.7
Korea (KOR/KRW) ......................    1.3                                   1.3
Mexico (MEX/MXN) .....................   12.2                                  12.2
Peru (PERU/PES) ......................    2.2                                   2.2
Poland (POL/PLZ) .....................    2.4                                   2.4
Russia (RUS/SUR) .....................    0.8                                   0.8
South Africa (SAFR/ZAR) ..............    6.7                                   6.7
Taiwan (TWN/TWD) .....................    4.9                                   4.9
Turkey (TRKY/TRL) ....................    2.5                                   2.5
United States (US/USD) ...............    0.6         4.7            8.9       14.2
                                        ------      -----          -----      -----
Total  ...............................   86.4         4.7            8.9      100.0
                                        ------      -----          -----      -----
                                        ------      -----          -----      -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $5,651,410.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F28
<PAGE>
                     GT GLOBAL VARIABLE INFRASTRUCTURE FUND
 
                            PORTFOLIO OF INVESTMENTS
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                               COUNTRY      SHARES       (NOTE 1)       ASSETS
- ---------------------------------------------------------------  --------   -----------   ----------   -------------
<S>                                                              <C>        <C>           <C>          <C>
Electrical & Gas Utilities (18.5%)
  Endesa S. A. - ADR{\/} ......................................   SPN             6,700   $  180,900         2.9
  National Grid Group PLC .....................................   UK             20,000      159,460         2.5
  Houston Industries, Inc. ....................................   US              4,600      147,776         2.3
  Dominion Resources, Inc. ....................................   US              3,100      144,926         2.3
  AES Corp.-/- ................................................   US              2,785      131,939         2.1
  BG PLC ......................................................   UK             20,000      126,056         2.0
  Edison S.p.A.-/- ............................................   ITLY            7,100       83,622         1.3
  Interstate Energy Corp. .....................................   US              2,246       72,434         1.1
  Pinnacle West Capital Corp. .................................   US              1,646       69,750         1.1
  EVN Energie-Versorgung Niederoesterreich AG .................   ASTRI             400       56,640         0.9
                                                                                          ----------
                                                                                           1,173,503
                                                                                          ----------
Electric Companies (10.1%)
  Montana Power Co. ...........................................   US              1,600       90,500         1.4
  Texas Utilities Co. .........................................   US              1,800       84,038         1.3
  Iberdrola S.A. ..............................................   SPN             4,000       74,752         1.2
  FPL Group, Inc. .............................................   US              1,200       73,950         1.2
  CMS Energy Corp. ............................................   US              1,300       62,969         1.0
  Public Service Enterprise Group Inc. ........................   US              1,500       60,000         1.0
  GPU, Inc. ...................................................   US              1,300       57,444         0.9
  Union Electrica Fenosa, S.A. ................................   SPN             3,000       51,840         0.8
  Scottish Power PLC ..........................................   UK              4,450       45,667         0.7
  Korea Electric Power Corp. - ADR{\/} ........................   KOR             2,000       31,376         0.5
  Fortum Corp.-/- .............................................   FIN             1,450        8,820         0.1
                                                                                          ----------
                                                                                             641,356
                                                                                          ----------
Aerospace/Defense (6.7%)
  United Technologies Corp. ...................................   US              1,400      152,250         2.4
  General Electric Co. PLC ....................................   UK             12,740      114,861         1.8
  Gulfstream Aerospace Corp.-/- ...............................   US              1,342       71,462         1.1
  British Aerospace PLC .......................................   UK              6,500       55,038         0.9
  General Dynamics Corp. ......................................   US                500       29,312         0.5
                                                                                          ----------
                                                                                             422,923
                                                                                          ----------
Telephone - Regional/Local (4.3%)
  SBC Communications, Inc. ....................................   US              3,000      160,875         2.5
  Bell Atlantic Corp. .........................................   US              2,000      113,625         1.8
                                                                                          ----------
                                                                                             274,500
                                                                                          ----------
Manufacturing (Diversified) (3.9%)
  Suez Lyonnaise des Eaux .....................................   FR                350       71,885         1.2
  MAN A.G. ....................................................   GER               200       58,810         0.9
  Viag A.G. ...................................................   GER               100       58,630         0.9
  Hanson PLC - ADR{\/} ........................................   UK              1,500       58,500         0.9
                                                                                          ----------
                                                                                             247,825
                                                                                          ----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F29
<PAGE>
                     GT GLOBAL VARIABLE INFRASTRUCTURE FUND
 
                       PORTFOLIO OF INVESTMENTS (cont'd)
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                               COUNTRY      SHARES       (NOTE 1)       ASSETS
- ---------------------------------------------------------------  --------   -----------   ----------   -------------
<S>                                                              <C>        <C>           <C>          <C>
Wireless Communications (3.7%)
  Mannesmann A.G. .............................................   GER             1,300   $  149,003         2.3
  Vodafone Group PLC ..........................................   UK              4,700       76,234         1.2
  China Telecom Ltd.-/- .......................................   HK              8,000       13,837         0.2
                                                                                          ----------
                                                                                             239,074
                                                                                          ----------
Telcom Equipment (3.3%)
  Nokia Oyj A.B. "A" - ADR{\/} ................................   FIN             1,000      120,437         1.9
  Tekelec-/- ..................................................   US              3,000       49,687         0.8
  Tellabs, Inc.-/- ............................................   US                552       37,846         0.6
                                                                                          ----------
                                                                                             207,970
                                                                                          ----------
Broadcasting (Television Radio & Television) (3.1%)
  Tele-Communications, Inc. "A"-/- ............................   US              3,500      193,593         3.1
                                                                                          ----------
Consumer Services (3.0%)
  Vivendi .....................................................   FR                740      191,968         3.0
                                                                                          ----------
Airlines (3.0%)
  COMAIR Holdings Inc. ........................................   US              3,200      108,000         1.7
  Deutsche Lufthansa A.G. .....................................   GER             2,300       50,792         0.8
  AMR Corp.-/- ................................................   US                500       29,687         0.5
                                                                                          ----------
                                                                                             188,479
                                                                                          ----------
Cement (2.7%)
  Lafarge S.A. ................................................   FR                750       71,249         1.1
  La Cementos Nacional, C.A. - 144A GDR{\/}-/-{c} .............   ECDR              543       61,359         1.0
  Suez Cement Co - Reg S GDR{\/}{.} ...........................   EGPT            2,600       37,050         0.6
                                                                                          ----------
                                                                                             169,658
                                                                                          ----------
Telephone - Long Distance (2.3%)
  MCI WorldCom, Inc.-/- .......................................   US              2,000      143,500         2.3
                                                                                          ----------
Gas Production & Distribution (2.1%)
  Enron Corp. .................................................   US              2,332      133,069         2.1
                                                                                          ----------
Telephone (2.1%)
  Swisscom A. G.-/- ...........................................   SWTZ              236       98,820         1.6
  Tele Danmark A.S. - ADR{\/} .................................   DEN               500       33,937         0.5
                                                                                          ----------
                                                                                             132,757
                                                                                          ----------
Networking (2.0%)
  Cisco Systems, Inc.-/- ......................................   US              1,394      129,380         2.0
                                                                                          ----------
Computers Networking (2.0%)
  Equant N.V.-/- ..............................................   NETH            1,880      127,489         2.0
                                                                                          ----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F30
<PAGE>
                     GT GLOBAL VARIABLE INFRASTRUCTURE FUND
 
                       PORTFOLIO OF INVESTMENTS (cont'd)
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                               COUNTRY      SHARES       (NOTE 1)       ASSETS
- ---------------------------------------------------------------  --------   -----------   ----------   -------------
<S>                                                              <C>        <C>           <C>          <C>
Housing (1.8%)
  Kaufman and Broad Home Corp. ................................   US              4,000   $  115,000         1.8
                                                                                          ----------
Shipping (1.8%)
  Railtrack Group PLC .........................................   UK              2,200       57,438         0.9
  Stagecoach Holdings PLC .....................................   UK             13,800       54,870         0.9
                                                                                          ----------
                                                                                             112,308
                                                                                          ----------
Construction (Cement & Aggregate) (1.7%)
  CRH PLC .....................................................   UK              4,000       67,805         1.0
  Southdown, Inc. .............................................   US                700       41,431         0.7
                                                                                          ----------
                                                                                             109,236
                                                                                          ----------
Telecommunications (Cellular/Wireless) (1.6%)
  AirTouch Communications, Inc.-/- ............................   US                700       50,487         0.8
  NTT Mobile Communications Network, Inc.-/- ..................   JPN                10       41,157         0.6
  Sonera Group OYJ-/- .........................................   FIN               550        9,712         0.2
                                                                                          ----------
                                                                                             101,356
                                                                                          ----------
Building Materials & Components (1.6%)
  Martin Marietta Materials, Inc. .............................   US              1,619      100,682         1.6
                                                                                          ----------
Transportation - Road & Rail (1.5%)
  Brisa Auto-Estradas de Portugal, S.A. .......................   PORT            1,600       94,137         1.5
                                                                                          ----------
Telephone Networks (1.2%)
  Telecom Italia S.p.A. - Di Risp .............................   ITLY           12,500       78,660         1.2
  Hellenic Telecommunication Organization S.A. (OTE) ..........   GREC               11          293          --
                                                                                          ----------
                                                                                              78,953
                                                                                          ----------
Machinery & Engineering (1.2%)
  Ingersoll-Rand Co. ..........................................   US              1,600       75,100         1.2
                                                                                          ----------
Homebuilding (1.1%)
  Centex Corp. ................................................   US              1,600       72,100         1.1
                                                                                          ----------
Railroads (1.0%)
  Canadian National Railway Co. ...............................   CAN             1,300       67,761         1.0
                                                                                          ----------
Natural Gas (0.9%)
  El Paso Energy Corp. ........................................   US              1,700       59,182         0.9
                                                                                          ----------
Manufacturing (Specialized) (0.9%)
  USEC Inc. ...................................................   US              4,000       55,500         0.9
                                                                                          ----------
Water Utilities (0.8%)
  Electricidade de Portugal, S.A. .............................   PORT            2,300       50,684         0.8
                                                                                          ----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F31
<PAGE>
                     GT GLOBAL VARIABLE INFRASTRUCTURE FUND
 
                       PORTFOLIO OF INVESTMENTS (cont'd)
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                               COUNTRY      SHARES       (NOTE 1)       ASSETS
- ---------------------------------------------------------------  --------   -----------   ----------   -------------
<S>                                                              <C>        <C>           <C>          <C>
Iron & Steel (0.8%)
  Pohang Iron & Steel Co. Ltd. - ADR{\/} ......................   KOR             3,000   $   50,625         0.8
                                                                                          ----------
Transportation - Airlines (0.7%)
  Aeroporti di Roma S.p.A.-/- .................................   ITLY            5,100       44,436         0.7
                                                                                          ----------
Telecom Technology (0.6%)
  Esat Telecom Group PLC - ADR{\/}-/- .........................   IRE               800       30,800         0.5
  L-3 Communications Holdings, Inc.-/- ........................   US                100        4,658         0.1
                                                                                          ----------
                                                                                              35,458
                                                                                          ----------
Auto Parts & Equipment (0.4%)
  Bridgestone Corp. ...........................................   JPN             1,000       22,703         0.4
                                                                                          ----------       -----
 
TOTAL EQUITY INVESTMENTS (cost $4,736,767) ....................                            5,862,265        92.4
                                                                                          ----------       -----
<CAPTION>
 
                                                                                            VALUE        % OF NET
REPURCHASE AGREEMENT                                                                       (NOTE 1)       ASSETS
- ---------------------------------------------------------------                           ----------   -------------
<S>                                                              <C>        <C>           <C>          <C>
  Dated December 31, 1998, with State Street Bank & Trust Co.,
   due January 4, 1999, for an effective yield of 4.50% ,
   collaterized by $410,000 U.S. Treasury Notes, 6.25% due
   4/30/01 (market value of collateral is $428,450, including
   accrued interest). (cost $416,000) .........................                              416,000         6.6
                                                                                          ----------       -----
 
TOTAL INVESTMENTS (cost $5,152,767)  * ........................                            6,278,265        99.0
Other Assets and Liabilities ..................................                               63,116         1.0
                                                                                          ----------       -----
 
NET ASSETS ....................................................                           $6,341,381       100.0
                                                                                          ----------       -----
                                                                                          ----------       -----
</TABLE>
 
- --------------
 
       {\/}  U.S. currency denominated.
        -/-  Non-income producing security
        {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 securites may be resold in transactions exempt
             from registration, normally to qualified institutional buyers.
          *  For Federal income tax purposes, cost is $5,152,767 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $   1,226,305
                 Unrealized depreciation:              (100,807)
                                                  -------------
                 Net unrealized appreciation:     $   1,125,498
                                                  -------------
                                                  -------------
</TABLE>
 
    Abbreviations:
    ADR--American Depositary Receipt
    GDR--Global Depositary Receipt
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F32
<PAGE>
                     GT GLOBAL VARIABLE INFRASTRUCTURE FUND
 
                       PORTFOLIO OF INVESTMENTS (cont'd)
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at December 31, 1998, 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>
Austria (ASTRI/ATS) ..................    0.9                      0.9
Canada (CAN/CAD) .....................    1.0                      1.0
Denmark (DEN/DKK) ....................    0.5                      0.5
Ecuador (ECDR/ECS) ...................    1.0                      1.0
Egypt (EGPT/EGP) .....................    0.6                      0.6
Finland (FIN/FIM) ....................    2.2                      2.2
France (FR/FRF) ......................    5.3                      5.3
Germany (GER/DEM) ....................    4.9                      4.9
Hong Kong (HK/HKD) ...................    0.2                      0.2
Ireland (IRE/IEP) ....................    0.5                      0.5
Italy (ITLY/ITL) .....................    3.2                      3.2
Japan (JPN/JPY) ......................    1.0                      1.0
Korea (KOR/KRW) ......................    1.3                      1.3
Netherlands (NETH/NLG) ...............    2.0                      2.0
Portugal (PORT/PTE) ..................    2.3                      2.3
Spain (SPN/ESP) ......................    4.9                      4.9
Switzerland (SWTZ/CHF) ...............    1.6                      1.6
United Kingdom (UK/GBP) ..............   12.8                     12.8
United States (US/USD) ...............   46.2         7.6         53.8
                                        ------        ---        -----
Total  ...............................   92.4         7.6        100.0
                                        ------        ---        -----
                                        ------        ---        -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $6,341,381.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F33
<PAGE>
                   GT GLOBAL VARIABLE NATURAL RESOURCES FUND
 
                            PORTFOLIO OF INVESTMENTS
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                               COUNTRY      SHARES       (NOTE 1)       ASSETS
- ---------------------------------------------------------------  --------   -----------   ----------   -------------
<S>                                                              <C>        <C>           <C>          <C>
Oil (International Integrated) (17.2%)
  Mobil Corp. .................................................   US              5,600   $  487,900         7.6
  ENI S.p.A - ADR{\/} .........................................   ITLY            2,800      189,700         3.0
  Amoco Corp. .................................................   US              2,600      156,975         2.5
  Total Compagnie Francaise des Petroles S.A.-ADR{\/} .........   FR              3,000      149,250         2.3
  Chevron Corp. ...............................................   US              1,400      116,112         1.8
                                                                                          ----------
                                                                                           1,099,937
                                                                                          ----------
Construction (Cement & Aggregates) (12.9%)
  Martin Marietta Materials, Inc. .............................   US              4,400      273,625         4.3
  Southdown, Inc. .............................................   US              3,103      183,659         2.9
  CRH PLC .....................................................   UK              8,550      144,934         2.2
  Centex Construction Products, Inc. ..........................   US              3,100      125,937         2.0
  Lafarge Corp. ...............................................   US              1,800       72,900         1.1
  Doman Industries Ltd. "B"-/- ................................   CAN            23,475       27,618         0.4
                                                                                          ----------
                                                                                             828,673
                                                                                          ----------
Natural Gas (11.2%)
  Coastal Corp. ...............................................   US              5,400      188,662         2.9
  Williams Companies, Inc. ....................................   US              4,400      137,225         2.1
  Questar Corp. ...............................................   US              6,800      131,750         2.1
  Enron Corp. .................................................   US              2,300      131,244         2.1
  El Paso Energy Corp. ........................................   US              3,700      128,806         2.0
                                                                                          ----------
                                                                                             717,687
                                                                                          ----------
Manufacturing (Specialized) (5.7%)
  USEC Inc.-/- ................................................   US              9,150      126,956         2.0
  US Filter Corp.-/- ..........................................   US              5,300      121,238         1.9
  Enerflex Systems Ltd. .......................................   CAN             4,200       80,980         1.2
  Coflexip -ADR{\/} ...........................................   FR              1,200       38,550         0.6
                                                                                          ----------
                                                                                             367,724
                                                                                          ----------
Metals Mining (4.5%)
  Freeport-McMoRan Copper & Gold, Inc. "B" ....................   US              7,600       79,325         1.2
  Rio Tinto PLC ...............................................   UK              6,400       74,347         1.2
  Cominco Ltd. ................................................   CAN             6,200       70,307         1.1
  Inco Ltd.-/- ................................................   CAN             6,000       63,529         1.0
                                                                                          ----------
                                                                                             287,508
                                                                                          ----------
Chemicals (Specialty) (4.4%)
  Crompton & Knowles Corp. ....................................   US              6,200      128,262         2.0
  Air Liquide .................................................   FR                500       91,690         1.4
  W.R. Grace & Co.-/- .........................................   US              4,000       62,750         1.0
                                                                                          ----------
                                                                                             282,702
                                                                                          ----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F34
<PAGE>
                   GT GLOBAL VARIABLE NATURAL RESOURCES FUND
 
                       PORTFOLIO OF INVESTMENTS (cont'd)
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                               COUNTRY      SHARES       (NOTE 1)       ASSETS
- ---------------------------------------------------------------  --------   -----------   ----------   -------------
<S>                                                              <C>        <C>           <C>          <C>
Chemicals (4.2%)
  Solutia, Inc. ...............................................   US              6,100   $  136,488         2.1
  Potash Corp. of Saskatchewan Inc.{\/} .......................   CAN             1,100       70,262         1.1
  E.I. Du Pont de Nemours & Company ...........................   US              1,200       63,675         1.0
                                                                                          ----------
                                                                                             270,425
                                                                                          ----------
Electric Companies (4.1%)
  Montana Power Co. ...........................................   US              3,200      181,000         2.8
  PacifiCorp ..................................................   US              3,400       71,613         1.1
  Fortum Corp.-/- .............................................   FIN             1,550        9,428         0.2
                                                                                          ----------
                                                                                             262,041
                                                                                          ----------
Gold & Precious Metals Mining (3.9%)
  Stillwater Mining Co.-/- ....................................   US              4,400      180,400         2.8
  Placer Dome Inc.{\/} ........................................   CAN             6,100       70,150         1.1
                                                                                          ----------
                                                                                             250,550
                                                                                          ----------
Oil & Gas (Exploration & Production) (3.7%)
  Berkley Petroleum Corp.-/- ..................................   CAN            20,300      153,908         2.4
  Triton Energy Ltd.-/- .......................................   US              5,700       45,244         0.7
  Stolt Comex Seaway, S.A. ....................................   UK                 --           --         0.6
    Common{\/}-/- .............................................   --              4,000       27,000          --
    ADR{\/}-/- ................................................   --              1,750        9,844          --
                                                                                          ----------
                                                                                             235,996
                                                                                          ----------
Chemicals (Diversified) (3.2%)
  BASF A.G. ...................................................   GER             3,300      125,948         2.0
  Solvay SA ...................................................   BEL             1,000       74,964         1.2
                                                                                          ----------
                                                                                             200,912
                                                                                          ----------
Homebuilding (3.0%)
  Centex Corp. ................................................   US              2,800      126,175         2.0
  Pulte Corp. .................................................   US              2,200       61,188         1.0
                                                                                          ----------
                                                                                             187,363
                                                                                          ----------
Building Materials (2.9%)
  USG Corp. ...................................................   US              3,650      185,922         2.9
                                                                                          ----------
Iron & Steel (2.9%)
  Pohang Iron & Steel Co. Ltd. ADR{\/} ........................   KOR             7,800      131,625         2.1
  British Steel PLC- ADR{\/} ..................................   UK              3,400       49,725         0.8
                                                                                          ----------
                                                                                             181,350
                                                                                          ----------
Engineering & Construction (2.7%)
  Lafarge S.A. ................................................   FR              1,800      170,999         2.7
                                                                                          ----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F35
<PAGE>
                   GT GLOBAL VARIABLE NATURAL RESOURCES FUND
 
                       PORTFOLIO OF INVESTMENTS (cont'd)
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                               COUNTRY      SHARES       (NOTE 1)       ASSETS
- ---------------------------------------------------------------  --------   -----------   ----------   -------------
<S>                                                              <C>        <C>           <C>          <C>
Oil & Gas (Refining & Marketing) (1.6%)
  Tesoro Petroleum Corp. ......................................   US              2,100   $   25,463         0.4
  Repsol S.A. .................................................   SPN             1,500       79,925         1.2
                                                                                          ----------
                                                                                             105,388
                                                                                          ----------
Oil & Gas (Drilling & Equipment) (1.5%)
  Core Laboratories N.V.{\/}-/- ...............................   NETH            2,600       49,725         0.8
  J. Ray McDermott S.A.-/- ....................................   US              2,000       48,875         0.7
                                                                                          ----------
                                                                                              98,600
                                                                                          ----------
Aluminum (1.3%)
  Aluminum Company of America .................................   US              1,100       82,019         1.3
                                                                                          ----------
Containers & Packaging (Paper) (1.2%)
  Union Camp Corp. ............................................   US              1,100       74,250         1.2
                                                                                          ----------
Foods (0.8%)
  Dole Food Co., Inc. .........................................   US              1,200       36,000         0.6
  Chiquita Brands International ...............................   US              1,600       15,300         0.2
                                                                                          ----------
                                                                                              51,300
                                                                                          ----------
Beverages (Alcoholic) (0.8%)
  Scheid Vineyards Inc.- "A" ..................................   US             10,300       50,213         0.8
                                                                                          ----------       -----
 
TOTAL EQUITY INVESTMENTS (cost $6,474,678) ....................                            5,991,559        93.7
                                                                                          ----------       -----
<CAPTION>
 
                                                                                            VALUE        % OF NET
REPURCHASE AGREEMENT                                                                       (NOTE 1)       ASSETS
- ---------------------------------------------------------------                           ----------   -------------
<S>                                                              <C>        <C>           <C>          <C>
  Dated December 31,1998 , with State Street Bank & Trust Co.,
   due January 4, 1999, for an effective yield of 4.50%,
   collateralized by $525,000 U.S. Treasury Bills, 8.75% due
   5/15/17 (market value of collateral is $734,767, including
   accrued interest). (cost $716,000)  ........................                              716,000        11.2
                                                                                          ----------       -----
 
TOTAL INVESTMENTS (cost $7,190,678) * .........................                            6,707,559       104.9
Other Assets and Liabilities ..................................                             (311,959)       (4.9)
                                                                                          ----------       -----
 
NET ASSETS ....................................................                           $6,395,600       100.0
                                                                                          ----------       -----
                                                                                          ----------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security.
       {\/}  U.S. currency denominated.
          *  For Federal income tax purposes, cost is $7,274,880 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $     224,049
                 Unrealized depreciation:              (791,370)
                                                  -------------
                 Net unrealized depreciation:     $    (567,321)
                                                  -------------
                                                  -------------
</TABLE>
 
    Abbreviation:
    ADR--American Depositary Receipt
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F36
<PAGE>
                   GT GLOBAL VARIABLE NATURAL RESOURCES FUND
 
                       PORTFOLIO OF INVESTMENTS (cont'd)
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at December 31, 1998, 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>
Belgium (BEL/BEF) ....................    1.2                      1.2
Canada (CAN/CAD) .....................    8.3                      8.3
Finland (FIN/FIM) ....................    0.2                      0.2
France (FR/FRF) ......................    7.0                      7.0
German (GER/DEM) .....................    2.0                      2.0
Italy (ITLY/ITL) .....................    3.0                      3.0
Korea (KOR/KRW) ......................    2.1                      2.1
Netherlands (NETH/NLG) ...............    0.8                      0.8
Spain (SPN/ESP) ......................    1.2                      1.2
United Kingdom (UK/GBP) ..............    4.8                      4.8
United States (US/USD) ...............   63.1         6.3         69.4
                                        ------        ---        -----
Total  ...............................   93.7         6.3        100.0
                                        ------        ---        -----
                                        ------        ---        -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $6,395,600.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F37
<PAGE>
                        GT GLOBAL VARIABLE AMERICA FUND
 
                            PORTFOLIO OF INVESTMENTS
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                              COUNTRY      SHARES       (NOTE 1)        ASSETS
- --------------------------------------------------------------  --------   -----------   -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
Services (43.7%)
  Outdoor Systems, Inc.-/- ...................................   US             62,450   $ 1,873,500         4.6
    BUSINESS & PUBLIC SERVICES
  Clear Channel Communications, Inc.-/- ......................   US             31,038     1,691,571         4.1
    BROADCASTING & PUBLISHING
  Family Dollar Stores, Inc. .................................   US             68,700     1,511,400         3.7
    RETAILERS - DISCOUNTERS
  Chancellor Media Corp.-/- ..................................   US             31,000     1,484,125         3.6
    BROADCASTING & PUBLISHING
  Jacor Communications, Inc.-/- ..............................   US             21,200     1,364,750         3.3
    BROADCASTING & PUBLISHING
  Cablevision Systems Corp. "A"-/- ...........................   US             19,000       953,563         2.3
    BROADCASTING & PUBLISHING
  Lamar Advertising Co.-/- ...................................   US             20,300       756,175         1.9
    BUSINESS & PUBLIC SERVICES
  AnnTaylor Stores Corp.-/- ..................................   US             16,500       650,719         1.6
    RETAIL - SPECIALTY APPAREL
  Amazon.com, Inc.-/- ........................................   US              2,000       642,500         1.6
    RETAIL - SPECIALTY
  Abercrombie & Fitch Co. "A"-/- .............................   US              9,000       636,750         1.6
    RETAIL - SPECIALTY APPAREL
  Best Buy Co., Inc.-/- ......................................   US             10,000       613,750         1.5
    RETAIL - COMPUTERS & ELECTRONICS
  Tricon Global Restaurants, Inc.-/- .........................   US             12,000       601,500         1.5
    RESTAURANTS
  DST Systems, Inc.-/- .......................................   US             10,500       599,156         1.5
    DATA PROCESSING
  Circuit City Stores-Circuit City Group .....................   US             11,000       549,312         1.3
    RETAIL - COMPUTERS & ELECTRONICS
  Office Depot, Inc.-/- ......................................   US             14,000       517,125         1.3
    RETAIL - SPECIALTY
  Allied Waste Industries, Inc.-/- ...........................   US             21,000       496,125         1.2
    WASTE MANAGEMENT
  American Tower Corp.-/- ....................................   US             16,500       487,781         1.2
    TELECOMMUNICATIONS - CELLULAR/WIRELESS
  CDW Computer Centers, Inc.-/- ..............................   US              5,000       479,688         1.2
    RETAIL - COMPUTERS & ELECTRONICS
  Century Communications Corp.-/- ............................   US             14,600       463,094         1.1
    BROADCASTING & PUBLISHING
  Galileo International, Inc. ................................   US             10,000       435,000         1.1
    COMMERCIAL & CONSUMER
  Paychex, Inc. ..............................................   US              7,400       380,638         0.9
    DATA PROCESSING
  USA Networks, Inc.-/- ......................................   US             10,000       331,250         0.8
    BROADCASTING & PUBLISHING
  Sun International Hotels Ltd.-/- ...........................   US              7,000       318,062         0.8
    LEISURE & TOURISM
                                                                                         -----------
                                                                                          17,837,534
                                                                                         -----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F38
<PAGE>
                        GT GLOBAL VARIABLE AMERICA FUND
 
                       PORTFOLIO OF INVESTMENTS (cont'd)
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                              COUNTRY      SHARES       (NOTE 1)        ASSETS
- --------------------------------------------------------------  --------   -----------   -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
Technology (29.7%)
  Software AG Systems, Inc.-/- ...............................   US             48,800   $   884,500         2.2
    SOFTWARE
  SunGard Data Systems, Inc.-/- ..............................   US             22,000       873,125         2.0
    SOFTWARE
  Compuware Corp.-/- .........................................   US              9,500       742,187         1.8
    SOFTWARE
  Vitesse Semiconductor Corp.-/- .............................   US             16,000       730,000         1.8
    ELECTRONICS - SEMICONDUCTORS
  Altera Corp.-/- ............................................   US             11,500       700,063         1.7
    ELECTRONICS - SEMICONDUCTORS
  Xilinx, Inc.-/- ............................................   US             10,500       683,813         1.7
    ELECTRONICS - SEMICONDUCTORS
  Ticketmaster Online-CitySearch, Inc. "B"-/- ................   US             11,800       672,600         1.6
    SOFTWARE
  Netscape Communications Corp.-/- ...........................   US             10,000       607,500         1.5
    SOFTWARE
  Lexmark International Group, Inc.-/- .......................   US              6,000       603,000         1.5
    COMPUTERS - PERIPHERALS
  Micron Technology, Inc.-/- .................................   US             11,200       566,300         1.4
    ELECTRONICS - SEMICONDUCTORS
  Jabil Circuit, Inc.-/- .....................................   US              7,000       522,375         1.3
    COMPUTERS - PERIPHERALS
  Concord Communications, Inc.-/- ............................   US              9,200       522,100         1.3
    SOFTWARE
  Policy Management Systems Corp.-/- .........................   US              9,800       494,900         1.2
    SOFTWARE
  Citrix Systems, Inc.-/- ....................................   US              5,000       485,313         1.2
    SOFTWARE
  Flextronics International Ltd.-/- ..........................   US              5,500       470,937         1.2
    ELECTRONICS - SEMICONDUCTORS
  Yahoo! Inc.-/- .............................................   US              2,000       470,125         1.1
    SOFTWARE
  3Com Corp.-/- ..............................................   US             10,000       448,125         1.1
    COMPUTERS - NETWORKING
  New Era of Networks, Inc.-/- ...............................   US             10,000       440,000         1.1
    SOFTWARE
  FORE Systems, Inc.-/- ......................................   US             23,700       434,006         1.1
    COMPUTERS - NETWORKING
  Learning Company, Inc. (The)-/- ............................   US             15,300       396,844         1.0
    SOFTWARE
  Visio Corp.-/- .............................................   US             10,500       383,906         0.9
    SOFTWARE
                                                                                         -----------
                                                                                          12,131,719
                                                                                         -----------
Energy (3.6%)
  Montana Power Co. ..........................................   US             10,000       565,625         1.4
    ELECTRIC COMPANIES
  Anadarko Petroleum Corp. ...................................   US             12,000       370,500         0.9
    ENERGY SOURCES
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F39
<PAGE>
                        GT GLOBAL VARIABLE AMERICA FUND
 
                       PORTFOLIO OF INVESTMENTS (cont'd)
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                              COUNTRY      SHARES       (NOTE 1)        ASSETS
- --------------------------------------------------------------  --------   -----------   -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
Energy (Continued)
  BJ Services Co.-/- .........................................   US             18,500   $   289,062         0.7
    ENERGY SOURCES
  Cooper Cameron Corp.-/- ....................................   US             10,000       245,000         0.6
    ENERGY SOURCES
                                                                                         -----------
                                                                                           1,470,187
                                                                                         -----------
Health Care (6.7%)
  Forest Laboratories, Inc.-/- ...............................   US             17,100       909,506         2.2
    DRUGS - GENERIC & OTHER
  Becton, Dickinson & Co. ....................................   US             11,200       478,100         1.2
    MEDICAL PRODUCTS & SUPPLIES
  Total Renal Care Holdings, Inc.-/- .........................   US             15,000       443,437         1.1
    SPECIALIZED SERVICES
  Quintiles Transnational Corp.-/- ...........................   US              7,500       400,312         1.0
    SPECIALIZED SERVICES
  BioChem Pharma, Inc.-/- ....................................   CAN            10,000       286,250         0.7
    BIOTECHNOLOGY
  Allegiance Corp. ...........................................   US              5,000       233,125         0.5
    MEDICAL PRODUCTS & SUPPLIES
                                                                                         -----------
                                                                                           2,750,730
                                                                                         -----------
Finance (4.6%)
  American Bankers Insurance Group, Inc. .....................   US             12,500       604,688         1.5
    INSURANCE - MULTI-LINE
  Providian Financial Corp. ..................................   US              7,950       596,250         1.5
    CONSUMER FINANCE
  UNUM Corp. .................................................   US             10,000       583,750         1.4
    INSURANCE - LIFE/HEALTH
  Firstar Corp. ..............................................   US              1,000        93,250         0.2
    BANKS - REGIONAL
                                                                                         -----------
                                                                                           1,877,938
                                                                                         -----------
Consumer Non-Durables (3.8%)
  JP Foodservice, Inc.-/- ....................................   US             21,100     1,033,900         2.6
    DISTRIBUTORS - FOOD & HEALTH
  Maytag Corp. ...............................................   US              8,000       498,000         1.2
    HOUSEHOLD FURNITURE & APPLIANCES
                                                                                         -----------
                                                                                           1,531,900
                                                                                         -----------
</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, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                              COUNTRY      SHARES       (NOTE 1)        ASSETS
- --------------------------------------------------------------  --------   -----------   -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
Capital Goods (3.2%)
  Tellabs, Inc.-/- ...........................................   US             10,000   $   685,625         1.7
    COMMUNICATIONS EQUIPMENT
  ADC Telecommunications, Inc.-/- ............................   US             18,000       625,500         1.5
    COMMUNICATIONS EQUIPMENT
                                                                                         -----------
                                                                                           1,311,125
                                                                                         -----------       -----
 
TOTAL INVESTMENTS * (cost $29,386,117) .......................                            38,911,133        95.3
Other Assets and Liabilities .................................                             1,921,899         4.7
                                                                                         -----------       -----
 
NET ASSETS ...................................................                           $40,833,032       100.0
                                                                                         -----------       -----
                                                                                         -----------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security.
          *  For Federal income tax purposes, cost is $29,403,605 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $   9,893,798
                 Unrealized depreciation:              (386,270)
                                                  -------------
                 Net unrealized appreciation:     $   9,507,528
                                                  -------------
                                                  -------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F41
<PAGE>
                      GT GLOBAL VARIABLE NEW PACIFIC FUND
 
                            PORTFOLIO OF INVESTMENTS
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                              COUNTRY      SHARES       (NOTE 1)        ASSETS
- --------------------------------------------------------------  --------   -----------   -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
Banks-Major Regional (10.9%)
  Australia & New Zealand Banking Group Ltd. .................   AUSL           57,000   $   372,745         3.4
  HSBC Holdings PLC ..........................................   HK             11,468       285,697         2.6
  Oversea-Chinese Banking Corp. Ltd. - Foreign ...............   SING           40,000       271,597         2.5
  Development Bank of Singapore Ltd. - Foreign ...............   SING           29,800       269,185         2.4
                                                                                         -----------
                                                                                           1,199,224
                                                                                         -----------
Land Development (9.2%)
  Cheung Kong (Holdings) Ltd. ................................   HK             90,000       647,662         5.9
  DBS Land Ltd. ..............................................   SING          200,000       294,635         2.6
  Sun Hung Kai Properties Ltd. ...............................   HK             10,000        72,931         0.7
                                                                                         -----------
                                                                                           1,015,228
                                                                                         -----------
Telephone (7.7%)
  Hong Kong Telecommunications Ltd. ..........................   HK            200,000       349,808         3.2
  Philippine Long Distance Telephone Co. .....................   PHIL           10,590       273,290         2.5
  PT Telekomunikasi Indonesia ................................   INDO          250,000        86,539         0.8
  Telecom Corporation of New Zealand Ltd. ....................   NZ             32,400        70,699         0.6
  Cable & Wireless Optus Ltd.-/- .............................   AUSL           32,800        68,886         0.6
                                                                                         -----------
                                                                                             849,222
                                                                                         -----------
Electric Companies (7.1%)
  CLP Holdings Ltd. ..........................................   HK             70,000       348,775         3.2
  Electricity Generating Public Co. Ltd. - Foreign-/- ........   THAI           51,000       138,771         1.3
  Korea Electric Power Corp. .................................   KOR             5,000       124,167         1.1
  Hong Kong Electric Holdings Ltd. ...........................   HK             40,000       121,336         1.1
  YTL Power International Berhad{F} ..........................   MAL            72,000        47,211         0.4
                                                                                         -----------
                                                                                             780,260
                                                                                         -----------
Retail-Food Chains (6.4%)
  Hutchison Whampoa ..........................................   HK            100,000       706,716         6.4
                                                                                         -----------
Banks-Foreign (5.0%)
  National Australia Bank Ltd. ...............................   AUSL           36,900       555,809         5.0
                                                                                         -----------
Telephone Networks (4.9%)
  Telstra Corp. Ltd. .........................................   AUSL          105,900       494,749         4.5
  Telekom Malaysia Bhd. ......................................   AUSL           17,750        38,925         0.4
                                                                                         -----------
                                                                                             533,674
                                                                                         -----------
Electronics-Component Distributors (4.7%)
  Samsung Electronics ........................................   KOR             4,000       269,000         2.4
  Samsung Display Devices Co. ................................   KOR             5,000       247,083         2.3
                                                                                         -----------
                                                                                             516,083
                                                                                         -----------
Insurance-Multi-line Property (4.5%)
  Samsung Fire & Marine Insurance ............................   KOR             1,332       499,500         4.5
                                                                                         -----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F42
<PAGE>
                      GT GLOBAL VARIABLE NEW PACIFIC FUND
 
                       PORTFOLIO OF INVESTMENTS (cont'd)
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                              COUNTRY      SHARES       (NOTE 1)        ASSETS
- --------------------------------------------------------------  --------   -----------   -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
Engineering & Construction (4.5%)
  Lend Lease Corp., Ltd. .....................................   AUSL           20,800   $   280,189         2.5
  Singapore Technologies Engineering Ltd. ....................   SING          230,000       214,732         2.0
                                                                                         -----------
                                                                                             494,921
                                                                                         -----------
Air Freight (3.5%)
  Brambles Industries Ltd. ...................................   AUSL           15,800       384,555         3.5
                                                                                         -----------
Insurance-Life/Health (3.3%)
  AMP Ltd.-/- ................................................   AUSL           28,300       358,258         3.3
                                                                                         -----------
Entertainment (2.9%)
  News Corp., Ltd. -Preferred ................................   AUSL           53,100       322,855         2.9
                                                                                         -----------
Beverages-Alcoholic (2.9%)
  Foster's Brewing Group Ltd. ................................   AUSL          117,200       317,186         2.9
                                                                                         -----------
Manufacturing-Diversified (2.6%)
  Shanghai Industrial Holdings Ltd. ..........................   HK             80,000       161,609         1.5
  New World Development Co., Ltd. ............................   HK             50,000       125,854         1.1
                                                                                         -----------
                                                                                             287,463
                                                                                         -----------
Banking (2.4%)
  Hang Seng Bank .............................................   HK             29,000       259,226         2.4
                                                                                         -----------
Electric Power (2.3%)
  Manila Electric Co. "B" ....................................   PHIL           78,670       253,774         2.3
                                                                                         -----------
Metals Mining (2.2%)
  Rio Tinto Ltd. .............................................   AUSL           11,500       136,287         1.2
  North Ltd. .................................................   AUSL           65,500       106,681         1.0
                                                                                         -----------
                                                                                             242,968
                                                                                         -----------
Publishing- Newspapers (2.0%)
  Singapore Press Holdings Ltd. ..............................   SING           20,562       224,381         2.0
                                                                                         -----------
Leisure Time Products (2.0%)
  TABCORP Holdings Ltd. ......................................   AUSL           35,600       217,979         2.0
                                                                                         -----------
Communications Equipment (1.7%)
  LG Information & Communication .............................   KOR             7,130       191,916         1.7
                                                                                         -----------
Oil & Gas (Exploration & Production) (1.6%)
  PTT Exploration and Production Public Co., Ltd. -
   Foreign-/- ................................................   THAI           13,200        93,348         0.8
  Santos Ltd. ................................................   AUSL           32,400        86,893         0.8
                                                                                         -----------
                                                                                             180,241
                                                                                         -----------
</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, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                              COUNTRY      SHARES       (NOTE 1)        ASSETS
- --------------------------------------------------------------  --------   -----------   -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
Conglomerates (1.6%)
  Broken Hill Proprietary Co., Ltd. ..........................   AUSL           22,800   $   167,791         1.6
                                                                                         -----------
Metals-Misc (1.0%)
  Western Mining Corporation Holdings Ltd. ...................   AUSL           36,300       109,354         1.0
                                                                                         -----------
Retail- Specialty (0.7%)
  Woolworths Ltd. ............................................   AUSL           23,300        79,265         0.7
                                                                                         -----------
Shipping (0.4%)
  Malaysia International Shipping Bhd. - Foreign{F} ..........   MAL            37,000        40,570         0.4
                                                                                         -----------
Investments (0.2%)
  Berjaya Sports Toto Bhd.{F} ................................   MAL            23,000        23,908         0.2
                                                                                         -----------       -----
 
TOTAL EQUITY INVESTMENTS (cost $10,613,832) ..................                            10,812,327        98.2
                                                                                         -----------       -----
<CAPTION>
 
WARRANTS
- --------------------------------------------------------------
<S>                                                             <C>        <C>           <C>           <C>
  Merrill Lynch - Kospi 300 Call Warrants, due 3/11/99
   Performance linked to equity securities. Redemption amount
   100% of the final closing price of the Korean Kospi 300
   Index converted to the prevailing foreign exchange rate.
   (cost $97,498){\/} ........................................   KOR            39,153       206,837         1.9
                                                                                         -----------       -----
<CAPTION>
 
RIGHTS
- --------------------------------------------------------------
<S>                                                             <C>        <C>           <C>           <C>
  Samsung Fire & Marine Insurance Rights, expire 1/13/99 (cost
   $0) .......................................................   KOR               305        58,763         0.5
                                                                                         -----------       -----
 
TOTAL INVESTMENTS (cost $10,711,330)  * ......................                            11,077,927       100.6
Other Assets and Liabilities .................................                               (67,902)       (0.6)
                                                                                         -----------       -----
 
NET ASSETS ...................................................                           $11,010,025       100.0
                                                                                         -----------       -----
                                                                                         -----------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security.
       {\/}  U.S. currency denominated.
        {F}  Security considered illiquid due to currency and capitalcontrols
             mandated by the Malaysian government.
          *  For Federal income tax purposes, cost is $10,845,065 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $   1,019,395
                 Unrealized depreciation:              (786,533)
                                                  -------------
                 Net unrealized appreciation:     $     232,862
                                                  -------------
                                                  -------------
</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, 1998
 
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at December 31, 1998, was concentrated in
the following countries:
 
<TABLE>
<CAPTION>
                                           PERCENTAGE OF NET ASSETS {D}
                                        -----------------------------------
                                                   RIGHTS &
COUNTRY (COUNTRY CODE/CURRENCY CODE)    EQUITY     WARRANTS        OTHER      TOTAL
- --------------------------------------  ------   -------------   ----------   -----
<S>                                     <C>      <C>             <C>          <C>
Australia (AUSL/AUD) .................   37.3                                  37.3
Hong Kong (HK/HKD) ...................   28.1                                  28.1
Indonesia (INDO/IDR) .................    0.8                                   0.8
Korea (KOR/KRW) ......................   12.0         2.4                      14.4
Malaysia (MAL/MYR) ...................    1.0                                   1.0
New Zealand (NZ/NZD) .................    0.6                                   0.6
Philippines (PHIL/PHP) ...............    4.8                                   4.8
Singapore (SING/SGD) .................   11.5                                  11.5
Thailand (THAI/THB) ..................    2.1                                   2.1
United States (US/USD) ...............                              (0.6)      (0.6)
                                        ------      -----          -----      -----
Total  ...............................   98.2         2.4           (0.6)     100.0
                                        ------      -----          -----      -----
                                        ------      -----          -----      -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $11,010,025.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F45
<PAGE>
                         GT GLOBAL VARIABLE EUROPE FUND
 
                            PORTFOLIO OF INVESTMENTS
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                              COUNTRY      SHARES       (NOTE 1)        ASSETS
- --------------------------------------------------------------  --------   -----------   -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
Services (26.5%)
  Orange PLC-/- ..............................................   UK             83,068   $   958,070         2.9
    WIRELESS COMMUNICATIONS
  TNT Post Group N.V. ........................................   NETH           27,330       880,346         2.7
    TRANSPORTATION - SHIPPING
  Vodafone Group PLC .........................................   UK             47,060       761,756         2.3
    WIRELESS COMMUNICATIONS
  MobilCom AG ................................................   GER             2,271       722,294         2.2
    TELECOM - OTHER
  Mannesmann AG ..............................................   GER             5,698       653,095         2.0
    WIRELESS COMMUNICATIONS
  Telecom Italia Mobile SpA ..................................   ITLY           80,799       596,594         1.8
    TELEPHONE NETWORKS
  Swisscom AG-/- .............................................   SWTZ            1,416       592,922         1.8
    TELEPHONE NETWORKS
  Telecel - Comunicacaoes Pessoais S.A. ......................   PORT            2,871       587,395         1.8
    WIRELESS COMMUNICATIONS
  Helsingin Puhelin Oyj (Helsinki Telephone Corp.) ...........   FIN             9,643       573,301         1.8
    TELEPHONE NETWORKS
  Telecom Italia SpA .........................................   ITLY           64,079       545,488         1.7
    TELEPHONE NETWORKS
  Corporate Services Group PLC ...............................   UK            200,978       506,018         1.6
    BUSINESS & PUBLIC SERVICES
  STET Hellas Telecommunications S.A. - ADR-/- {\/} ..........   GREC           12,130       392,709         1.2
    WIRELESS COMMUNICATIONS
  EM.TV & Merchandising AG ...................................   GER               639       364,288         1.1
    BROADCASTING & PUBLISHING
  ASSA Abloy AB "B" ..........................................   SWDN            6,920       264,187         0.8
    BUSINESS & PUBLIC SERVICES
  Esat Telecom Group PLC - ADR-/- {\/} .......................   IRE             5,200       200,200         0.6
    TELEPHONE NETWORKS
  Panafon Hellenic Telecom S.A.-/- ...........................   GREC            2,129        57,082         0.2
    WIRELESS COMMUNICATIONS
                                                                                         -----------
                                                                                           8,655,745
                                                                                         -----------
Finance (20.4%)
  Axa-UAP ....................................................   FR              5,057       732,833         2.2
    INSURANCE - MULTI-LINE
  Zurich Allied AG ...........................................   SWTZ              806       596,928         1.8
    INSURANCE - MULTI-LINE
  UBS AG - Registered ........................................   SWTZ            1,803       554,082         1.7
    BANKS-MONEY CENTER
  Unicredito Italiano SpA ....................................   ITLY           93,674       553,247         1.7
    OTHER FINANCIAL
  Safra Republic Holdings S.A.{\/} ...........................   LUX            10,052       547,834         1.7
    OTHER FINANCIAL
  Abbey National PLC .........................................   UK             25,271       540,513         1.7
    BANKS-SUPER REGIONAL
  ING Groep N.V. .............................................   NETH            8,714       531,228         1.6
    OTHER FINANCIAL
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F46
<PAGE>
                         GT GLOBAL VARIABLE EUROPE FUND
 
                       PORTFOLIO OF INVESTMENTS (cont'd)
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                              COUNTRY      SHARES       (NOTE 1)        ASSETS
- --------------------------------------------------------------  --------   -----------   -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
Finance (Continued)
  Lloyds TSB Group PLC .......................................   UK             33,043   $   468,418         1.4
    BANKS-MONEY CENTER
  Mediolanum SpA .............................................   ITLY           56,135       416,453         1.3
    INSURANCE-LIFE
  ForeningsSparbanken AB .....................................   SWDN           15,124       391,138         1.2
    BANKS-REGIONAL
  Nordbanken Holding AB ......................................   SWDN           60,841       389,622         1.2
    BANKS-REGIONAL
  Skandia Forsakrings AB Free ................................   SWDN           24,719       377,482         1.2
    INSURANCE - MULTI-LINE
  CGU PLC ....................................................   UK             19,143       298,890         0.9
    INSURANCE - MULTI-LINE
  BPI-SGPS S.A. ..............................................   PORT            7,742       262,968         0.8
    BANKS-MONEY CENTER
                                                                                         -----------
                                                                                           6,661,636
                                                                                         -----------
Technology (15.2%)
  Equant N.V.-/- {V} .........................................   NETH           10,543       733,549         2.3
    NETWORKING
  Dassault Systemes S.A. .....................................   FR             14,346       674,245         2.1
    COMPUTERS & PERIPHERALS
  TT Tieto Oy "B" ............................................   FIN            13,820       615,548         1.9
    COMPUTERS & PERIPHERALS
  Saville Systems PLC - ADR{\/} ..............................   IRE            29,300       556,700         1.7
    TELECOM TECHNOLOGY
  SAP AG Non-Voting ..........................................   GER             1,098       523,962         1.6
    COMPUTERS & PERIPHERALS
  Misys PLC ..................................................   UK             63,701       464,746         1.4
    SOFTWARE
  Mobistar S.A.-/- ...........................................   BEL             8,388       421,221         1.3
    TELECOM TECHNOLOGY
  Computacenter PLC-/- .......................................   UK             54,374       397,602         1.2
    COMPUTERS & PERIPHERALS
  Sonera Group Oyj-/- ........................................   FIN            13,000       229,569         0.7
    TELECOM TECHNOLOGY
  Energis PLC-/- .............................................   UK              9,600       214,585         0.7
    TELECOM TECHNOLOGY
  JBA Holdings PLC ...........................................   UK             31,840        97,893         0.3
    SOFTWARE
                                                                                         -----------
                                                                                           4,929,620
                                                                                         -----------
Health Care (10.7%)
  Novartis AG ................................................   SWTZ              434       853,335         2.6
    PHARMACEUTICALS
  SmithKline Beecham PLC .....................................   UK             44,397       622,363         1.9
    PHARMACEUTICALS
  Roche Holding AG ...........................................   SWTZ               50       610,253         1.9
    PHARMACEUTICALS
  Glaxo Wellcome PLC .........................................   UK             17,131       588,475         1.8
    PHARMACEUTICALS
</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, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                              COUNTRY      SHARES       (NOTE 1)        ASSETS
- --------------------------------------------------------------  --------   -----------   -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
Health Care (Continued)
  Nycomed Amersham PLC .......................................   UK             69,723   $   480,871         1.5
    PHARMACEUTICALS
  Genset - ADR-/- {\/} .......................................   FR              9,348       258,239         0.8
    BIOTECHNOLOGY
  Primamedic Ltd.-/- .........................................   ASTRI          71,100        78,845         0.2
    PHARMACEUTICALS
                                                                                         -----------
                                                                                           3,492,381
                                                                                         -----------
Capital Goods (6.8%)
  Nokia Oyj "A" ..............................................   FIN            11,321     1,377,224         4.2
    TELECOM EQUIPMENT
  Telefonaktiebolaget LM Ericsson "B" ........................   SWDN           31,060       738,249         2.3
    TELECOM EQUIPMENT
  Altran Technologies S.A. ...................................   FR                344        82,961         0.3
    MACHINERY & ENGINEERING
                                                                                         -----------
                                                                                           2,198,434
                                                                                         -----------
Consumer Non-Durables (6.6%)
  Cadbury Schweppes PLC ......................................   UK             33,430       568,907         1.7
    FOOD
  Nestle S.A. - Registered ...................................   SWTZ              259       563,946         1.7
    FOOD
  Tabacalera S.A. "A" ........................................   SPN            16,900       425,860         1.3
    TOBACCO
  Raisio Group PLC-/- ........................................   FIN            30,980       340,406         1.0
    FOOD
  Diageo PLC .................................................   UK             25,461       285,829         0.9
    BEVERAGES - ALCOHOLIC
                                                                                         -----------
                                                                                           2,184,948
                                                                                         -----------
Energy (3.1%)
  BP Amoco PLC ...............................................   UK             27,504       410,009         1.3
    OIL
  Petroleum Geo-Services ASA-/- ..............................   NOR            24,585       313,898         1.0
    ENERGY EQUIPMENT & SERVICES
  Coflexip - ADR{\/} .........................................   FR              8,587       275,857         0.8
    ENERGY EQUIPMENT & SERVICES
                                                                                         -----------
                                                                                             999,764
                                                                                         -----------
Consumer Durables (1.5%)
  Porsche AG Preferred-/- ....................................   GER               216       492,559         1.5
    AUTOMOBILES
                                                                                         -----------       -----
 
TOTAL EQUITY INVESTMENTS (cost $25,928,330) ..................                            29,615,087        90.8
                                                                                         -----------       -----
</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, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
REPURCHASE AGREEMENT                                                                      (NOTE 1)        ASSETS
- --------------------------------------------------------------                           -----------   -------------
<S>                                                             <C>        <C>           <C>           <C>
  Dated December 31, 1998, with State Street Bank & Trust Co.,
   due January 4, 1999, for an effective yield of 4.50%,
   collateralized by $1,915,000 U.S. Treasury Bonds, 6.25% due
   8/15/23 (market value of collateral is $2,183,697,
   including accrued interest). (cost $2,136,000) ............                           $ 2,136,000         6.5
                                                                                         -----------       -----
 
TOTAL INVESTMENTS (cost $28,064,330)  * ......................                            31,751,087        97.3
Other Assets and Liabilities .................................                               865,804         2.7
                                                                                         -----------       -----
 
NET ASSETS ...................................................                           $32,616,891       100.0
                                                                                         -----------       -----
                                                                                         -----------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security.
       {\/}  U.S. currency denominated.
        {V}  Security is denominated in FRF.
          *  For Federal income tax purposes, cost is $28,322,738 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $   5,245,694
                 Unrealized depreciation:            (1,817,345)
                                                  -------------
                 Net unrealized appreciation:     $   3,428,349
                                                  -------------
                                                  -------------
</TABLE>
 
    Abbreviation:
    ADR--American Depositary Receipt
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
The Fund's Portfolio of Investments at December 31, 1998, 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>
Austria (ASTRI/ATS) ..................    0.2                   0.2
Belgium (BEL/BEF) ....................    1.3                   1.3
Finland (FIN/FIM) ....................    9.6                   9.6
France (FR/FRF) ......................    6.2                   6.2
Germany (GER/DEM) ....................    8.4                   8.4
Greece (GREC/GRD) ....................    1.4                   1.4
Ireland (IRE/IEP) ....................    2.3                   2.3
Italy (ITLY/ITL) .....................    6.5                   6.5
Luxembourg (LUX/LUF) .................    1.7                   1.7
Netherlands (NETH/NLG) ...............    6.6                   6.6
Norway (NOR/NOK) .....................    1.0                   1.0
Portugal (PORT/PTE) ..................    2.6                   2.6
Spain (SPN/ESP) ......................    1.3                   1.3
Sweden (SWDN/SEK) ....................    6.7                   6.7
Switzerland (SWTZ/CHF) ...............   11.5                  11.5
United Kingdom (UK/GBP) ..............   23.5                  23.5
United States (US/USD) ...............               9.2        9.2
                                        ------     -----      -----
Total  ...............................   90.8        9.2      100.0
                                        ------     -----      -----
                                        ------     -----      -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $32,616,891.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F49
<PAGE>
                          GT GLOBAL MONEY MARKET FUND
 
                            PORTFOLIO OF INVESTMENTS
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
<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 (45.7%)
  Bellsouth Capital Funding .....................................    5.50%     22-Jan-99    1,500,000  $ 1,495,291        4.7
  Harris Trust & Savings Bank ...................................    5.64%     01-Feb-99    1,000,000    1,000,000        3.2
  Wachovia Bank NA ..............................................    5.50%     29-Jan-99    1,000,000    1,000,000        3.2
  H.J. Heinz Co. ................................................    5.26%     11-Jan-99    1,000,000      998,547        3.2
  Campbell Soup Co. .............................................    5.61%     14-Jan-99    1,000,000      998,032        3.2
  Hitachi America Ltd. ..........................................    5.21%     22-Jan-99    1,000,000      996,996        3.2
  PepsiCo, Inc. .................................................    5.33%     27-Jan-99    1,000,000      996,172        3.2
  Monte Rosa Capital Corp. ......................................    5.55%     28-Jan-99    1,000,000      995,875        3.2
  ABB Treasury Center USA .......................................    5.25%     18-Feb-99    1,000,000      993,067        3.1
  The McGraw-Hill Cos., Inc. ....................................    5.24%     22-Feb-99    1,000,000      992,547        3.1
  Caterpillar Financial Services ................................    5.07%     23-Mar-99    1,000,000      988,863        3.1
  E.I. Dupont de Nemours & Co. ..................................    5.06%     26-Mar-99    1,000,000      988,403        3.1
  John Deere Capital Corp. ......................................    5.03%     02-Apr-99    1,000,000      987,488        3.1
  Ford Motor Credit Corp. .......................................    5.07%     30-Apr-99    1,000,000      983,605        3.1
                                                                                                       -----------      -----
Total Commercial Paper - Discounted (amortized cost
 $14,414,886) ...................................................                                       14,414,886       45.7
                                                                                                       -----------      -----
Government & Government Agency Obligations (25.8%)
  Federal Home Loan Bank Discount Note ..........................    4.50%     04-Jan-99    4,091,000    4,089,466       12.9
  Federal Home Loan Mortgage Corporation Discount Note ..........    4.50%     04-Jan-99    4,091,000    4,089,466       12.9
                                                                                                       -----------      -----
Total Government & Government Agency Obligations (amortized cost
 $8,178,932) ....................................................                                        8,178,932       25.8
                                                                                                       -----------      -----
TOTAL SHORT-TERM INVESTMENTS (cost $22,593,818) .................                                       22,593,818       71.5
                                                                                                       -----------      -----
 
<CAPTION>
 
                                                                                                          VALUE       % OF NET
REPURCHASE AGREEMENTS                                                                                   (NOTE 1)       ASSETS
- -----------------------------------------------------------------                                      -----------  -------------
<S>                                                                <C>         <C>        <C>          <C>          <C>
  Dated December 31, 1998, with NationsBanc Montgomery
   Securities, due January 4, 1999, for an effective yield of
   4.25%, collateralized by $3,600,000 U.S. Treasury Bonds,
   11.25% due 2/15/15 (market value of collateral is $6,118,777,
   including accrued interest).  ................................                                        6,000,000       19.0
  Dated December 31, 1998, with State Street Bank & Trust Co.,
   due January 4, 1999, for an effective yield of 4.50%,
   collateralized by $5,370,000 U.S. Treasury Bonds, 6.25% due
   8/15/23 (market value of collateral is $6,123,475, including
   accrued interest).  ..........................................                                        6,000,000       19.0
                                                                                                       -----------      -----
TOTAL REPURCHASE AGREEMENTS (cost $12,000,000) ..................                                       12,000,000       38.0
                                                                                                       -----------      -----
TOTAL INVESTMENTS (cost $34,593,818)  * .........................                                       34,593,818      109.5
Other Assets and Liabilities ....................................                                       (3,006,087)      (9.5)
                                                                                                       -----------      -----
NET ASSETS ......................................................                                      $31,587,731      100.0
                                                                                                       -----------      -----
                                                                                                       -----------      -----
</TABLE>
 
- --------------
 
          *  For Federal income tax purposes, cost is $34,593,818.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F50
<PAGE>
                     GT GLOBAL VARIABLE INTERNATIONAL FUND
 
                            PORTFOLIO OF INVESTMENTS
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                               COUNTRY      SHARES       (NOTE 1)       ASSETS
- ---------------------------------------------------------------  --------   -----------   ----------   -------------
<S>                                                              <C>        <C>           <C>          <C>
Services (25.1%)
  Telecom Italia S.p.A. .......................................   ITLY           19,462   $  166,040         2.2
    TELEPHONE
  Vodafone Group PLC ..........................................   UK              7,904      128,204         1.7
    TELECOMMUNICATIONS-CELLULAR/WIRELESS
  Nokia Oyj A.B. - Class A ....................................   FIN               831      101,093         1.4
    COMMUNICATIONS EQUIPMENT
  Telecel-Comunicacaoes Pessoais, S.A. ........................   PORT              482       98,615         1.3
    TELECOMMUNICATIONS-CELLULAR/WIRELESS
  Wolters Kluwer N.V.-/- ......................................   NETH              450       96,268         1.3
    SPECIALTY PRINTING
  EMAP PLC ....................................................   UK              4,800       91,737         1.3
    PUBLISHING
  Swisscom A.G.-/- ............................................   SWTZ              209       87,515         1.2
    TELEPHONE
  TNT Post Group N.V. .........................................   NETH            2,708       87,229         1.2
    AIR FREIGHT
  Orange PLC-/- ...............................................   UK              7,200       83,580         1.1
    WIRELESS TELECOMMUNICATIONS
  Adecco S.A.-/- ..............................................   SWTZ              180       82,188         1.1
    SERVICES-COMMERCIAL & CONSUMER
  Woolworths Ltd. .............................................   AUSL           23,100       78,585         1.1
    RETAIL-SPECIALTY
  Koninklijke Ahold N.V. ......................................   NETH            2,123       78,445         1.1
    RETAIL-FOOD CHAINS
  EMI Group PLC ...............................................   UK             11,600       77,498         1.1
    LEISURE TIME-PRODUCTS
  Great Universal Stores PLC ..................................   UK              6,800       71,591         1.0
    RETAIL-GENERAL MERCHANDISE
  Telecom Corp. of New Zealand Ltd. ...........................   NZ             16,100       69,839         1.0
    TELEPHONE
  Vivendi .....................................................   FR                266       69,004         0.9
    MANUFACTURING-DIVERSIFIED
  Koninklijke KPN N.V. ........................................   NETH            1,290       64,562         0.9
    TELECOMMUNICATIONS-LONG DISTANCE
  Pinault-Printemps-Redoute S.A. ..............................   FR                337       64,391         0.9
    RETAIL-GENERAL MERCHANDISE
  Reuters Group PLC ...........................................   UK              6,000       62,920         0.9
    SERVICES-COMMERCIAL & CONSUMER
  Telecommunicacoes Brasileiras S.A.{\/} ......................   BRZL              760       55,243         0.8
    TELEPHONE
  Telefonica S.A. .............................................   SPN             1,144       50,810         0.7
    TELEPHONE
  EM.TV & Merchandising A.G.-/- ...............................   GER                80       45,895         0.6
    BROADCASTING-TELEVISION, RADIO, & CABLE
  Hellenic Telecom Panafon S.A.-/- ............................   GREC              447       11,985         0.2
    TELECOMMUNICATIONS-CELLULAR/WIRELESS
  Telecom Corporation of New Zealand Ltd. .....................   NZ              2,280        4,975         0.1
    TELEPHONE
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F51
<PAGE>
                     GT GLOBAL VARIABLE INTERNATIONAL FUND
 
                       PORTFOLIO OF INVESTMENTS (cont'd)
 
                               December 31, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                               COUNTRY      SHARES       (NOTE 1)       ASSETS
- ---------------------------------------------------------------  --------   -----------   ----------   -------------
<S>                                                              <C>        <C>           <C>          <C>
Services (Continued)
  Fast Retailing Co. Ltd. .....................................   JPN                44   $      778          --
    RETAIL-SPECIALTY APPAREL
                                                                                          ----------
                                                                                           1,828,990
                                                                                          ----------
Finance (21.4%)
  Lloyds TSB Group PLC ........................................   UK              8,800      125,041         1.7
    BANKS-MAJOR REGIONAL
  Abbey National PLC ..........................................   UK              5,400      115,499         1.6
    SAVINGS & LOAN COMPANIES
  Zurich Allied A.G.-/- .......................................   SWTZ              146      108,128         1.5
    INSURANCE-MULTI-LINE
  AXA S.A. ....................................................   FR                710      102,889         1.4
    INSURANCE-MULTI-LINE
  UBS A.G. ....................................................   SWTZ              321       98,647         1.3
    BANKS-MAJOR REGIONAL
  ING Groep N.V. ..............................................   NETH            1,499       91,383         1.3
    INSURANCE BROKERS
  Royal & Sun Alliance Insurance Group PLC ....................   UK             10,800       88,082         1.2
    INSURANCE-MULTI-LINE
  Australia & New Zealand Banking Group Ltd. ..................   AUSL           11,700       76,511         1.1
    BANKS-MAJOR REGIONAL
  Schroders PLC ...............................................   UK              4,100       74,747         1.0
    BANKS-MAJOR REGIONAL
  Nordbanken Holding A.B. .....................................   SWDN           10,840       69,419         1.0
    BANKS-MAJOR REGIONAL
  BPI-SGPS, S.A. ..............................................   PORT            2,040       69,292         0.9
    BANKS-REGIONAL
  CGU PLC .....................................................   UK              4,400       68,809         0.9
    INSURANCE BROKERS
  M & G Group PLC .............................................   UK              2,660       66,089         0.9
    INVESTMENT MANAGEMENT
  Istituto Bancario San Paolo di Torino .......................   ITLY            3,735       65,990         0.9
    BANKS-MAJOR REGIONAL
  Bank of Ireland .............................................   IRE             2,705       59,205         0.8
    BANKS-MAJOR REGIONAL
  Safra Republic Holdings, S.A.{\/} ...........................   UK              1,097       57,044         0.8
    BANKS-MAJOR REGIONAL
  Skandia Forsakrings A.B.-/- .................................   SWDN            3,679       56,182         0.8
    INSURANCE BROKERS
  Nichiei Co., Ltd. ...........................................   JPN               600       47,796         0.7
    BANKS-MONEY CENTERS
  Royal Bank of Canada ........................................   CAN               950       47,531         0.6
    BANKS-MAJOR REGIONAL
  State Bank of India{\/} .....................................   IND             5,350       44,806         0.6
    BANKS-MAJOR REGIONAL
  United Overseas Bank Ltd. ...................................   SING            5,100       32,774         0.4
    BANKS-MAJOR REGIONAL
                                                                                          ----------
                                                                                           1,565,864
                                                                                          ----------
</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, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                               COUNTRY      SHARES       (NOTE 1)       ASSETS
- ---------------------------------------------------------------  --------   -----------   ----------   -------------
<S>                                                              <C>        <C>           <C>          <C>
Health Care (7.8%)
  Roche Holding A.G. ..........................................   SWTZ               11   $  134,256         1.8
    HEALTHCARE-DRUGS-GENERIC & OTHER
  SmithKline Beecham PLC ......................................   UK              8,600      120,056         1.6
    HEALTHCARE-DIVERSIFIED
  Nycomed Amersham PLC ........................................   UK             17,200      118,341         1.6
    HEALTHCARE-DRUGS-GENERIC & OTHER
  Novartis A.G. ...............................................   SWTZ               46       90,446         1.2
    HEALTHCARE-DIVERSIFIED
  Takeda Chemical Industries ..................................   JPN             2,000       77,005         1.1
    HEALTHCARE-DRUGS-GENERIC & OTHER
  Richter Gedeon Rt.-GDR{\/} ..................................   HGRY              770       32,918         0.5
    MEDICAL-DRUGS
                                                                                          ----------
                                                                                             573,022
                                                                                          ----------
Consumer Non-Durables (7.0%)
  Nestle S.A. .................................................   SWTZ               48      104,515         1.4
    FOODS
  Diageo PLC ..................................................   UK              8,000       90,939         1.3
    BEVERAGES-ALCOHOLIC
  Benckiser N.V. ..............................................   NETH            1,261       82,581         1.1
    HOUSEHOLD PRODUCTS/NON-DURABLES
  Asahi Breweries Ltd. ........................................   JPN             4,000       58,948         0.8
    BEVERAGES-ALCOHOLIC
  Foster's Brewing Group Ltd. .................................   AUSL           22,000       59,540         0.8
    BEVERAGES-ALCOHOLIC
  United Biscuits Holdings PLC ................................   UK             13,700       53,846         0.8
    FOODS
  Tabacalera S.A.-/- ..........................................   SPN             2,071       52,187         0.7
    TOBACCO
  Adidas Salomon A.G. .........................................   GER                86        9,341         0.1
    FOOTWEAR
                                                                                          ----------
                                                                                             511,897
                                                                                          ----------
Capital Goods (2.7%)
  Mannesmann A.G. .............................................   GER               794       91,007         1.2
    MACHINERY-DIVERSIFIED
  Canon, Inc. .................................................   JPN             3,000       64,126         0.9
    OFFICE EQUIPMENT & SUPPLIES
  Fresenius A.G. ..............................................   GER               224       47,182         0.6
    MACHINERY-DIVERSIFIED
                                                                                          ----------
                                                                                             202,315
                                                                                          ----------
Technology (2.1%)
  SAP A.G. ....................................................   GER               138       65,853         0.9
    COMPUTERS-SOFTWARE & SERVICES
  Equant N.V.-/- ..............................................   FR                673       46,825         0.6
    COMPUTERS-PERIPHERALS
</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, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                            VALUE        % OF NET
EQUITY INVESTMENTS                                               COUNTRY      SHARES       (NOTE 1)       ASSETS
- ---------------------------------------------------------------  --------   -----------   ----------   -------------
<S>                                                              <C>        <C>           <C>          <C>
Technology (Continued)
  Matsushita-Kotobuki Electronics Industries Ltd. .............   JPN             2,000   $   43,193         0.6
    ELECTRONICS-COMPONENT DISTRIBUTORS
                                                                                          ----------
                                                                                             155,871
                                                                                          ----------
Consumer Durables (1.1%)
  Futuris Corp. Ltd. ..........................................   AUSL           71,500       80,992         1.1
                                                                                          ----------
    AUTOMOBILE/TRUCK PARTS & TIRES
Energy (0.9%)
  Mabuchi Motor Co., Ltd. .....................................   JPN               900       68,906         0.9
    ELECTRICAL EQUIPMENT
                                                                                          ----------       -----
 
TOTAL EQUITY INVESTMENTS (cost $4,598,244) ....................                            4,987,857        68.1
                                                                                          ----------       -----
<CAPTION>
 
                                                                                            VALUE        % OF NET
FIXED INCOME INVESTMENTS                                         CURRENCY     SHARES       (NOTE 1)       ASSETS
- ---------------------------------------------------------------  --------   -----------   ----------   -------------
<S>                                                              <C>        <C>           <C>          <C>
Government & Government Agency Obligations (12.9%)
  Federal Home Loan Mortgage Corp., 4.50%, due 1/4/99 .........   USD           948,000      947,645        12.9
                                                                                          ----------       -----
 
TOTAL FIXED INCOME INVESTMENTS (cost $947,645) ................                              947,645
                                                                                          ----------       -----
<CAPTION>
 
                                                                                            VALUE        % OF NET
RIGHTS                                                           COUNTRY      SHARES       (NOTE 1)       ASSETS
- ---------------------------------------------------------------  --------   -----------   ----------   -------------
<S>                                                              <C>        <C>           <C>          <C>
  Telefonica de Espana Rights, expire 1/30/99 (cost $0) .......   SPN             1,144        1,014          --
                                                                                          ----------       -----
    TELEPHONE
<CAPTION>
 
                                                                                            VALUE        % OF NET
REPURCHASE AGREEMENT                                                                       (NOTE 1)       ASSETS
- ---------------------------------------------------------------                           ----------   -------------
<S>                                                              <C>        <C>           <C>          <C>
  Dated December 31, 1998, with State Street Bank & Trust Co.,
   due January 4, 1999, for an effective yield of 4.50%
   collateralized by $1,480,000 Treasury Notes, 7.125% due
   9/30/99 (market value of collateral is 2,533,650 including
   accrued interest). (cost $1,500,000)  ......................                            1,500,000        20.5
                                                                                          ----------       -----
 
TOTAL INVESTMENTS (cost $7,045,889) * .........................                            7,436,516       101.5
Other Assets and Liabilities ..................................                             (109,165)       (1.5)
                                                                                          ----------       -----
 
NET ASSETS ....................................................                           $7,327,351       100.0
                                                                                          ----------       -----
                                                                                          ----------       -----
</TABLE>
 
- --------------
 
        -/-  Non-income producing security
       {\/}  U.S. currency denominated.
          *  For Federal income tax purposes, cost is $7,135,883 and
             appreciation (depreciation) is as follows:
 
<TABLE>
                 <S>                              <C>
                 Unrealized appreciation:         $     567,410
                 Unrealized depreciation:              (266,777)
                                                  -------------
                 Net unrealized appreciation:     $     300,633
                                                  -------------
                                                  -------------
</TABLE>
 
             Abbreviations:
             ADR--American Depositary Receipt
             GDR--Global Depositary Receipt
 
    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, 1998
 
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at December 31, 1998, was concentrated in
the following countries:
 
<TABLE>
<CAPTION>
                                                PERCENTAGE OF NET ASSETS{D}
                                        -------------------------------------------
                                                 FIXED INCOME    SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE)    EQUITY     & RIGHTS       & OTHER     TOTAL
- --------------------------------------  ------   -------------   ----------   -----
<S>                                     <C>      <C>             <C>          <C>
Australia (AUSL/AUD) .................    4.1                                   4.1
Brazil (BRZL/BRL) ....................    0.8                                   0.8
Canada (CAN/CAD) .....................    0.6                                   0.6
Finland (FIM/FIM) ....................    1.4                                   1.4
France (FR/FRF) ......................    3.8                                   3.8
Germany (GER/DEM) ....................    3.4                                   3.4
Greece (GREC/GRD) ....................    0.2                                   0.2
Hungary (HGRY/HUF) ...................    0.5                                   0.5
India (IND/INR) ......................    0.6                                   0.6
Ireland (IRE/IEP) ....................    0.8                                   0.8
Italy (ITLY/ITL) .....................    3.1                                   3.1
Japan (JPN/JPY) ......................    5.0                                   5.0
Netherlands (NETH/NLG) ...............    6.9                                   6.9
New Zealand (NZ/NZD) .................    1.1                                   1.1
Portugal (PORT/PTE) ..................    2.2                                   2.2
Singapore (SING/SGD) .................    0.4                                   0.4
Spain (SPN/ESP) ......................    1.4                                   1.4
Sweden (SWDN/SEK) ....................    1.8                                   1.8
Switzerland (SWTZ/CHF) ...............    9.5                                   9.5
United Kingdom (UK/GBP) ..............   20.5                                  20.5
United States (US/USD) ...............               12.9           19.0       31.9
                                        ------      -----          -----      -----
Total  ...............................   68.1        12.9           19.0      100.0
                                        ------      -----          -----      -----
                                        ------      -----          -----      -----
</TABLE>
 
- --------------
 
{d}  Percentages indicated are based on net assets of $7,327,351.
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F55
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
                              STATEMENTS OF ASSETS
                                 AND LIABILITIES
                               December 31, 1998
 
- --------------------------------------------------------------------------------
 
<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..................  $22,542,807  $8,725,483   $7,160,482  $15,614,394
                                          ----------  -----------  -----------  ----------
                                          ----------  -----------  -----------  ----------
    At value............................  $22,019,159  $8,864,031   $7,357,108  $9,998,145
  Repurchase Agreement, at value and
   cost (Note 1)........................     698,000     151,000       40,000           --
  U.S. currency.........................         385         401          554        1,008
  Foreign currencies (cost $149,503;
   $67,307; $0; $54,678; $2,510;
   $287,103; $38,246; $86,970; $7,456;
   $0; $939; $0; $0; $3,030,
   respectively)........................     149,625      67,106           --       54,617
  Dividends and dividend withholding tax
   reclaims receivable..................          --          --           --       13,740
  Interest and interest withholding tax
   reclaims receivable..................     493,346     149,640      123,102           --
  Receivable for Fund shares sold.......       5,365          --        2,500        4,011
  Receivable for open forward foreign
   currency contracts, net (Note 1).....         893          --           --           --
  Receivable for securities sold........       1,729       1,572           --           --
  Receivable from A I M Advisors, Inc.
   (Note 2).............................      46,045      37,445       23,670       42,687
  Miscellaneous receivable..............          --          --           --           --
                                          ----------  -----------  -----------  ----------
    Total assets........................  23,414,547   9,271,195    7,546,934   10,114,208
                                          ----------  -----------  -----------  ----------
Liabilities:
  Distribution payable (Note 1).........          --          --           --           --
  Payable for custodian fees............       3,454       1,690        1,768          850
  Payable for forward foreign currency
   contracts -- closed (Note 1).........          --          --           --           --
  Payable for fund accounting fees (Note
   2)...................................         298         151           75          350
  Payable for Fund shares repurchased
   (Note 2).............................      24,085     125,193      108,713       79,375
  Payable for investment management and
   administration fees (Note 2).........      57,310      48,083       33,958       49,024
  Payable for loan outstanding (Note
   1)...................................          --          --           --       48,000
  Payable for open forward foreign
   currency contracts, net (Note 1).....          --       1,842           --           --
  Payable for printing and postage
   expenses.............................          --       5,803        9,583           --
  Payable for professional fees.........      17,081       9,670        6,912          752
  Payable for registration and filing
   fees.................................         782         977          965           --
  Payable for securities purchased......   1,284,969     271,820           --           --
  Payable for Trustees' fees and
   expenses (Note 2)....................       2,278       3,018        1,932          600
  Other accrued expenses................       2,445       2,257        1,857           --
                                          ----------  -----------  -----------  ----------
    Total liabilities...................   1,392,702     470,504      165,763      178,951
                                          ----------  -----------  -----------  ----------
Net assets..............................  $22,021,845  $8,800,691   $7,381,171  $9,935,257
                                          ----------  -----------  -----------  ----------
                                          ----------  -----------  -----------  ----------
Shares outstanding......................   1,777,818     738,856      609,681    1,034,282
Net asset value per share...............  $    12.39   $   11.91    $   12.11   $     9.61
                                          ----------  -----------  -----------  ----------
                                          ----------  -----------  -----------  ----------
Net assets consist of:
  Paid in capital (Note 4)..............  $23,656,559  $9,014,285   $6,889,727  $18,494,051
  Undistributed net investment income...     203,422       1,842       73,184      287,615
  Accumulated net realized gain (loss)
   on investments and foreign currency
   transactions.........................  (1,321,242)   (353,306)     221,634   (3,230,073)
  Net unrealized appreciation
   (depreciation) on translation of
   assets and liabilities in foreign
   currencies...........................       6,754        (678)          --          (87)
  Net unrealized appreciation
   (depreciation) of investments........    (523,648)    138,548      196,626   (5,616,249)
                                          ----------  -----------  -----------  ----------
Total -- representing net assets
 applicable to capital shares
 outstanding............................  $22,021,845  $8,800,691   $7,381,171  $9,935,257
                                          ----------  -----------  -----------  ----------
                                          ----------  -----------  -----------  ----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F56
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
                              STATEMENTS OF ASSETS
                            AND LIABILITIES (cont'd)
                               December 31, 1998
 
- --------------------------------------------------------------------------------
<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..................  $41,290,696 $46,048,018 $6,274,420   $4,736,767  $6,474,678  $29,386,117 $10,711,330
                                          ----------  ----------  ----------  -----------  ----------  ----------  ----------
                                          ----------  ----------  ----------  -----------  ----------  ----------  ----------
    At value............................  $53,021,849 $62,108,334 $5,148,417   $5,862,265  $5,991,559  $38,911,133 $11,077,927
  Repurchase Agreement, at value and
   cost (Note 1)........................   1,896,000   7,450,000     482,000     416,000      716,000          --          --
  U.S. currency.........................       1,344       2,432         142         983          221          15       1,994
  Foreign currencies (cost $149,503;
   $67,307; $0; $54,678; $2,510;
   $287,103; $38,246; $86,970; $7,456;
   $0; $939; $0; $0; $3,030,
   respectively)........................       2,529     284,666      37,492      86,088        7,566          --         939
  Dividends and dividend withholding tax
   reclaims receivable..................      78,715      37,867      16,732       9,080       73,510       6,905      16,075
  Interest and interest withholding tax
   reclaims receivable..................     386,293         931          60          52           90          --          --
  Receivable for Fund shares sold.......     261,179     103,482          --         330          330   2,295,522         468
  Receivable for open forward foreign
   currency contracts, net (Note 1).....       2,904          --          --          --           --          --          --
  Receivable for securities sold........       9,416      21,629          --          --       23,740          --       9,597
  Receivable from A I M Advisors, Inc.
   (Note 2).............................          --          --      84,518          --           --          --          --
  Miscellaneous receivable..............          --         582          --          --           --          --          --
                                          ----------  ----------  ----------  -----------  ----------  ----------  ----------
    Total assets........................  55,660,229  70,009,923   5,769,361   6,374,798    6,813,016  41,213,575  11,107,000
                                          ----------  ----------  ----------  -----------  ----------  ----------  ----------
Liabilities:
  Distribution payable (Note 1).........          --          --          --          --           --          --          --
  Payable for custodian fees............       1,700       5,288       9,214       1,300        1,400       2,462       5,384
  Payable for forward foreign currency
   contracts -- closed (Note 1).........          --          --          --          --           --          --          --
  Payable for fund accounting fees (Note
   2)...................................       1,335       2,600          --         175          157         804          48
  Payable for Fund shares repurchased
   (Note 2).............................       9,989     426,979       5,240      15,295       10,714     103,982      18,382
  Payable for investment management and
   administration fees (Note 2).........      46,569      53,155      70,117       3,163        2,192      22,455       2,563
  Payable for loan outstanding (Note
   1)...................................          --          --          --          --           --     227,000      42,000
  Payable for open forward foreign
   currency contracts, net (Note 1).....          --      42,397          --          --           --          --          --
  Payable for printing and postage
   expenses.............................       9,516       1,810       6,764       5,070        6,000       4,000      11,244
  Payable for professional fees.........      10,857       4,952      18,994       8,197        9,800      11,356      11,730
  Payable for registration and filing
   fees.................................           2          --         796          --           --       1,380       1,257
  Payable for securities purchased......          --          --          --          --      371,131          --          --
  Payable for Trustees' fees and
   expenses (Note 2)....................          --         482       2,157          --          200       2,542       1,202
  Other accrued expenses................          --      12,925       4,669         217       15,822       4,562       3,165
                                          ----------  ----------  ----------  -----------  ----------  ----------  ----------
    Total liabilities...................      79,968     550,588     117,951      33,417      417,416     380,543      96,975
                                          ----------  ----------  ----------  -----------  ----------  ----------  ----------
Net assets..............................  $55,580,261 $69,459,335 $5,651,410   $6,341,381  $6,395,600  $40,833,032 $11,010,025
                                          ----------  ----------  ----------  -----------  ----------  ----------  ----------
                                          ----------  ----------  ----------  -----------  ----------  ----------  ----------
Shares outstanding......................   2,584,126   3,362,824     844,749     367,346      586,487   2,026,413   1,262,519
Net asset value per share...............  $    21.51  $    20.66  $     6.69   $   17.26   $    10.90  $    20.15  $     8.72
                                          ----------  ----------  ----------  -----------  ----------  ----------  ----------
                                          ----------  ----------  ----------  -----------  ----------  ----------  ----------
Net assets consist of:
  Paid in capital (Note 4)..............  $35,751,068 $46,957,472 $11,489,069  $5,388,985  $11,156,709 $32,971,320 $14,709,395
  Undistributed net investment income...     721,621          --      76,434     104,883      111,308          --     239,972
  Accumulated net realized gain (loss)
   on investments and foreign currency
   transactions.........................   7,367,141   6,486,142  (4,787,285)   (277,149)  (4,389,741) (1,663,304) (4,305,840)
  Net unrealized appreciation
   (depreciation) on translation of
   assets and liabilities in foreign
   currencies...........................       9,278     (44,595)       (805)       (836)         443          --         (99)
  Net unrealized appreciation
   (depreciation) of investments........  11,731,153  16,060,316  (1,126,003)  1,125,498     (483,119)  9,525,016     366,597
                                          ----------  ----------  ----------  -----------  ----------  ----------  ----------
Total -- representing net assets
 applicable to capital shares
 outstanding............................  $55,580,261 $69,459,335 $5,651,410   $6,341,381  $6,395,600  $40,833,032 $11,010,025
                                          ----------  ----------  ----------  -----------  ----------  ----------  ----------
                                          ----------  ----------  ----------  -----------  ----------  ----------  ----------
 
<CAPTION>
 
                                           VARIABLE     MONEY      VARIABLE
                                            EUROPE      MARKET    INTERNATIONAL
                                             FUND        FUND        FUND
                                          ----------  ----------  -----------
<S>                                       <C>         <C>         <C>
Assets:
  Investments in securities: (Note 1)
    At identified cost..................  $25,928,330 $22,593,818  $5,545,889
                                          ----------  ----------  -----------
                                          ----------  ----------  -----------
    At value............................  $29,615,087 $22,593,818  $5,936,516
  Repurchase Agreement, at value and
   cost (Note 1)........................   2,136,000  12,000,000   1,500,000
  U.S. currency.........................          96         488         826
  Foreign currencies (cost $149,503;
   $67,307; $0; $54,678; $2,510;
   $287,103; $38,246; $86,970; $7,456;
   $0; $939; $0; $0; $3,030,
   respectively)........................          --          --       3,089
  Dividends and dividend withholding tax
   reclaims receivable..................      37,738          --       7,467
  Interest and interest withholding tax
   reclaims receivable..................         267      43,601         188
  Receivable for Fund shares sold.......     912,029     285,901          --
  Receivable for open forward foreign
   currency contracts, net (Note 1).....          --          --          --
  Receivable for securities sold........          --          --          --
  Receivable from A I M Advisors, Inc.
   (Note 2).............................      11,804          --          --
  Miscellaneous receivable..............         173          --          --
                                          ----------  ----------  -----------
    Total assets........................  32,713,194  34,923,808   7,448,086
                                          ----------  ----------  -----------
Liabilities:
  Distribution payable (Note 1).........          --       5,739          --
  Payable for custodian fees............         429       1,499      11,120
  Payable for forward foreign currency
   contracts -- closed (Note 1).........          --          --      11,872
  Payable for fund accounting fees (Note
   2)...................................         653         839         155
  Payable for Fund shares repurchased
   (Note 2).............................      56,493   3,299,963      64,334
  Payable for investment management and
   administration fees (Note 2).........      28,023      20,734          --
  Payable for loan outstanding (Note
   1)...................................          --          --          --
  Payable for open forward foreign
   currency contracts, net (Note 1).....          --          --          --
  Payable for printing and postage
   expenses.............................         162         515      10,454
  Payable for professional fees.........       4,316       4,268      22,174
  Payable for registration and filing
   fees.................................       2,385         588          --
  Payable for securities purchased......          --          --          --
  Payable for Trustees' fees and
   expenses (Note 2)....................         818         290          --
  Other accrued expenses................       3,024       1,642         626
                                          ----------  ----------  -----------
    Total liabilities...................      96,303   3,336,077     120,735
                                          ----------  ----------  -----------
Net assets..............................  $32,616,891 $31,587,731  $7,327,351
                                          ----------  ----------  -----------
                                          ----------  ----------  -----------
Shares outstanding......................   1,398,753  31,587,731     617,476
Net asset value per share...............  $    23.32  $     1.00   $   11.87
                                          ----------  ----------  -----------
                                          ----------  ----------  -----------
Net assets consist of:
  Paid in capital (Note 4)..............  $20,088,530 $31,587,731  $6,552,375
  Undistributed net investment income...     121,518          --      80,404
  Accumulated net realized gain (loss)
   on investments and foreign currency
   transactions.........................   8,719,226          --     315,666
  Net unrealized appreciation
   (depreciation) on translation of
   assets and liabilities in foreign
   currencies...........................         860          --     (11,721)
  Net unrealized appreciation
   (depreciation) of investments........   3,686,757          --     390,627
                                          ----------  ----------  -----------
Total -- representing net assets
 applicable to capital shares
 outstanding............................  $32,616,891 $31,587,731  $7,327,351
                                          ----------  ----------  -----------
                                          ----------  ----------  -----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F57
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
                            STATEMENTS OF OPERATIONS
 
                          Year ended December 31, 1998
 
- --------------------------------------------------------------------------------
 
<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.......................  $        --  $      --    $     --    $   542,574
  Interest income.......................    2,039,809    584,579     457,283          7,808
  Securities lending income.............       32,575      5,624          --         11,570
                                          -----------  ----------  ----------   -----------
    Total investment income.............    2,072,384    590,203     457,283        561,952
                                          -----------  ----------  ----------   -----------
Expenses:
  Amortization of organization costs
   (Note 1).............................          720        720         720            720
  Custodian fees (Note 1)...............       25,915     12,330       4,122         20,218
  Fund accounting fees (Note 2).........        6,780      2,376       1,917          4,156
  Interest expense (Note 1).............       39,886      5,958       4,871         22,294
  Investment management and
   administration fees (Note 2).........      186,706     65,332      55,012        167,381
  Printing and postage expenses.........       14,906     12,205      13,140         38,378
  Professional fees.....................       57,616     29,036      19,740         20,142
  Registration and filing fees..........           --         --          --            658
  Trustees' fees and expenses (Note
   2)...................................        1,460      1,460       1,460            931
  Other expenses........................        1,099      1,095         908          2,719
                                          -----------  ----------  ----------   -----------
    Total expenses before reimbursements
     and reductions.....................      335,088    130,512     101,890        277,597
                                          -----------  ----------  ----------   -----------
      Expenses reimbursed (Note 2)......      (46,045)   (37,445 )   (23,670)       (45,215)
      Expense reductions (Note 5).......           --         --          --             --
                                          -----------  ----------  ----------   -----------
    Total net expenses..................      289,043     93,067      78,220        232,382
                                          -----------  ----------  ----------   -----------
Net investment income (loss)............    1,783,341    497,136     379,063        329,570
                                          -----------  ----------  ----------   -----------
Net realized and unrealized gain (loss)
on investments and foreign currencies:
(Note 1)
  Net realized gain (loss) on
   investments..........................   (1,359,171)   303,460     239,229     (3,213,894)
  Net realized gain (loss) on foreign
   currency transactions................      330,119    855,982          --        (41,935)
                                          -----------  ----------  ----------   -----------
    Net realized gain (loss) during the
     year...............................   (1,029,052) 1,159,442     239,229     (3,255,829)
                                          -----------  ----------  ----------   -----------
  Net change in unrealized appreciation
   (depreciation) on translation of
   assets and liabilities in foreign
   currencies...........................     (308,728)  (858,412 )        --           (192)
  Net change in unrealized appreciation
   (depreciation) of investments........     (606,626)   226,091      45,216     (5,882,978)
                                          -----------  ----------  ----------   -----------
    Net unrealized appreciation
     (depreciation) during the period...     (915,354)  (632,321 )    45,216     (5,883,170)
                                          -----------  ----------  ----------   -----------
  Net realized and unrealized gain
   (loss) on investments and foreign
   currencies...........................   (1,944,406)   527,121     284,445     (9,138,999)
                                          -----------  ----------  ----------   -----------
Net increase (decrease) in net assets
 resulting from operations..............  $  (161,065) $1,024,257   $663,508    $(8,809,429)
                                          -----------  ----------  ----------   -----------
                                          -----------  ----------  ----------   -----------
 *Net of foreign withholding tax of:....  $        --  $      --    $     --    $    65,276
                                          -----------  ----------  ----------   -----------
                                          -----------  ----------  ----------   -----------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F58
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
                       STATEMENTS OF OPERATIONS (cont'd)
 
                          Year ended December 31, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
 
                                                                              GT GLOBAL
                                          ----------------------------------------------------------------------------------
                                            VARIABLE      VARIABLE     VARIABLE                      VARIABLE
                                            GROWTH &      TELECOM-     EMERGING       VARIABLE        NATURAL     VARIABLE
                                             INCOME      MUNICATIONS    MARKETS    INFRASTRUCTURE    RESOURCES     AMERICA
                                              FUND          FUND         FUND           FUND           FUND         FUND
                                          ------------   -----------  -----------  --------------   -----------  -----------
<S>                                       <C>            <C>          <C>          <C>              <C>          <C>
Investment income:  * (Note 1)
  Dividend income.......................   $ 1,159,850   $  494,124   $   262,709     $162,451      $   231,004  $   102,506
  Interest income.......................       863,930      216,084        25,479       32,901           36,141       18,859
  Securities lending income.............        33,804       52,374         5,764        2,191            1,057       23,815
                                          ------------   -----------  -----------  --------------   -----------  -----------
    Total investment income.............     2,057,584      762,582       293,952      197,543          268,202      145,180
                                          ------------   -----------  -----------  --------------   -----------  -----------
Expenses:
  Amortization of organization costs
   (Note 1).............................            --        3,330            --           --               --          720
  Custodian fees (Note 1)...............        30,683       37,233        62,640       11,171           13,346        9,939
  Fund accounting fees (Note 2).........        13,856       19,128         2,661        1,801            2,994        9,574
  Interest expense (Note 1).............        23,069        7,062        16,966           --            4,560       32,363
  Investment management and
   administration fees (Note 2).........       538,287      682,113        95,192       75,448          109,635      301,555
  Printing and postage expenses.........        29,737       17,085        14,235       10,293           13,323       21,901
  Professional fees.....................        40,472       37,251        28,470       27,376           23,960       24,900
  Registration and filing fees..........            --           --            --           --               --          424
  Trustees' fees and expenses (Note
   2)...................................            --          348         1,460           --               --        2,089
  Other expenses........................        10,215          569         1,828           --              288       10,049
                                          ------------   -----------  -----------  --------------   -----------  -----------
    Total expenses before reimbursements
     and reductions.....................       686,319      804,119       223,452      126,089          168,106      413,514
                                          ------------   -----------  -----------  --------------   -----------  -----------
      Expenses reimbursed (Note 2)......            --           --       (84,518)     (31,784)         (26,493)          --
      Expense reductions (Note 5).......        (1,847)      (4,242 )        (828)        (526)          (5,815)      (4,222)
                                          ------------   -----------  -----------  --------------   -----------  -----------
    Total net expenses..................       684,472      799,877       138,106       93,779          135,798      409,292
                                          ------------   -----------  -----------  --------------   -----------  -----------
Net investment income (loss)............     1,373,112      (37,295 )     155,846      103,764          132,404     (264,112)
                                          ------------   -----------  -----------  --------------   -----------  -----------
Net realized and unrealized gain (loss)
on investments and foreign currencies:
(Note 1)
  Net realized gain (loss) on
   investments..........................     7,390,036    6,711,384    (4,658,345)     (15,219)      (4,340,007)  (1,560,556)
  Net realized gain (loss) on foreign
   currency transactions................      (143,260)    (167,467 )     (77,850)     (58,200)           8,585           --
                                          ------------   -----------  -----------  --------------   -----------  -----------
    Net realized gain (loss) during the
     year...............................     7,246,776    6,543,917    (4,736,195)     (73,419)      (4,331,422)  (1,560,556)
                                          ------------   -----------  -----------  --------------   -----------  -----------
  Net change in unrealized appreciation
   (depreciation) on translation of
   assets and liabilities in foreign
   currencies...........................        23,022     (236,656 )       5,583          960             (125)          --
  Net change in unrealized appreciation
   (depreciation) of investments........       988,999    7,115,506       553,200      459,712         (369,811)   4,630,498
                                          ------------   -----------  -----------  --------------   -----------  -----------
    Net unrealized appreciation
     (depreciation) during the period...     1,012,021    6,878,850       558,783      460,672         (369,936)   4,630,498
                                          ------------   -----------  -----------  --------------   -----------  -----------
  Net realized and unrealized gain
   (loss) on investments and foreign
   currencies...........................     8,258,797   13,422,767    (4,177,412)     387,253       (4,701,358)   3,069,942
                                          ------------   -----------  -----------  --------------   -----------  -----------
Net increase (decrease) in net assets
 resulting from operations..............   $ 9,631,909   $13,385,472  $(4,021,566)    $491,017      $(4,568,954) $ 2,805,830
                                          ------------   -----------  -----------  --------------   -----------  -----------
                                          ------------   -----------  -----------  --------------   -----------  -----------
 *Net of foreign withholding tax of:....   $    99,105   $   47,128   $    14,668     $ 14,982      $    17,802  $       518
                                          ------------   -----------  -----------  --------------   -----------  -----------
                                          ------------   -----------  -----------  --------------   -----------  -----------
 
<CAPTION>
 
                                           VARIABLE
                                              NEW       VARIABLE     MONEY       VARIABLE
                                            PACIFIC      EUROPE      MARKET    INTERNATIONAL
                                             FUND         FUND        FUND         FUND
                                          -----------  ----------  ----------  -------------
<S>                                       <C>          <C>         <C>         <C>
Investment income:  * (Note 1)
  Dividend income.......................  $   346,496  $  578,504  $       --    $126,338
  Interest income.......................      100,665      74,905   1,739,586      63,670
  Securities lending income.............       23,633      38,173          --       5,867
                                          -----------  ----------  ----------  -------------
    Total investment income.............      470,794     691,582   1,739,586     195,875
                                          -----------  ----------  ----------  -------------
Expenses:
  Amortization of organization costs
   (Note 1).............................          720         720         720          --
  Custodian fees (Note 1)...............       26,067      42,370      10,585      19,100
  Fund accounting fees (Note 2).........        2,857       9,969       8,812       1,897
  Interest expense (Note 1).............        2,315     118,069          --       6,583
  Investment management and
   administration fees (Note 2).........      130,473     362,517     160,063      67,875
  Printing and postage expenses.........       39,857      15,390      16,965       9,273
  Professional fees.....................       26,745      30,345      32,970      18,682
  Registration and filing fees..........          486         730          --          --
  Trustees' fees and expenses (Note
   2)...................................        2,015       1,825       1,460         167
  Other expenses........................          584       1,094       1,826         631
                                          -----------  ----------  ----------  -------------
    Total expenses before reimbursements
     and reductions.....................      232,119     583,029     233,401     124,208
                                          -----------  ----------  ----------  -------------
      Expenses reimbursed (Note 2)......      (64,785)    (11,804)         --     (32,657)
      Expense reductions (Note 5).......       (4,911)     (1,171)         --        (272)
                                          -----------  ----------  ----------  -------------
    Total net expenses..................      162,423     570,054     233,401      91,279
                                          -----------  ----------  ----------  -------------
Net investment income (loss)............      308,371     121,528   1,506,185     104,596
                                          -----------  ----------  ----------  -------------
Net realized and unrealized gain (loss)
on investments and foreign currencies:
(Note 1)
  Net realized gain (loss) on
   investments..........................   (3,788,318)  8,701,423          --     337,397
  Net realized gain (loss) on foreign
   currency transactions................      181,208      20,217          --      19,282
                                          -----------  ----------  ----------  -------------
    Net realized gain (loss) during the
     year...............................   (3,607,110)  8,721,640          --     356,679
                                          -----------  ----------  ----------  -------------
  Net change in unrealized appreciation
   (depreciation) on translation of
   assets and liabilities in foreign
   currencies...........................     (105,425)      3,427          --     (47,735)
  Net change in unrealized appreciation
   (depreciation) of investments........    2,848,653    (865,332)         --     137,293
                                          -----------  ----------  ----------  -------------
    Net unrealized appreciation
     (depreciation) during the period...    2,743,228    (861,905)         --      89,558
                                          -----------  ----------  ----------  -------------
  Net realized and unrealized gain
   (loss) on investments and foreign
   currencies...........................     (863,882)  7,859,735          --     446,237
                                          -----------  ----------  ----------  -------------
Net increase (decrease) in net assets
 resulting from operations..............  $  (555,511) $7,981,263  $1,506,185    $550,833
                                          -----------  ----------  ----------  -------------
                                          -----------  ----------  ----------  -------------
 *Net of foreign withholding tax of:....  $     9,235  $   72,293  $       --    $ 11,991
                                          -----------  ----------  ----------  -------------
                                          -----------  ----------  ----------  -------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F59
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
                      STATEMENTS OF CHANGES IN NET ASSETS
 
                      For the year ended December 31, 1998
 
- --------------------------------------------------------------------------------
 
<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)..........  $   1,783,341  $     497,136  $     379,063  $   329,570
  Net realized gain (loss) on
   investments and foreign currency
   transactions.........................     (1,029,052)     1,159,442        239,229   (3,255,829)
  Net change in unrealized appreciation
   (depreciation) on translation of
   assets and liabilities in foreign
   currencies...........................       (308,728)      (858,412)            --         (192)
  Net change in unrealized appreciation
   (depreciation) of investments........       (606,626)       226,091         45,216   (5,882,978)
                                          -------------  -------------  -------------  -----------
    Net increase (decrease) in net
     assets resulting from operations...       (161,065)     1,024,257        663,508   (8,809,429)
                                          -------------  -------------  -------------  -----------
Distributions to shareholders: (Note 1)
  From net investment income............     (1,758,665)      (463,518)      (375,646)    (304,832)
  From net realized gain on
   investments..........................             --             --           (107)    (147,131)
  In excess of net investment income....             --        (12,065)            --           --
                                          -------------  -------------  -------------  -----------
    Total distributions.................     (1,758,665)      (475,583)      (375,753)    (451,963)
                                          -------------  -------------  -------------  -----------
Capital share transactions: (Note 4)
  Increase from capital shares sold and
   reinvested...........................     25,526,105     20,698,834     14,866,467   18,570,157
  Decrease from capital shares
   repurchased..........................    (30,081,222)   (20,697,844)   (15,145,687) (28,159,725)
                                          -------------  -------------  -------------  -----------
    Net increase (decrease) from capital
     share transactions.................     (4,555,117)           990       (279,220)  (9,589,568)
                                          -------------  -------------  -------------  -----------
Total increase (decrease) in net
 assets.................................     (6,474,847)       549,664          8,535  (18,850,960)
Net assets:
  Beginning of year.....................     28,496,692      8,251,027      7,372,636   28,786,217
                                          -------------  -------------  -------------  -----------
  End of year *.........................  $  22,021,845  $   8,800,691  $   7,381,171  $ 9,935,257
                                          -------------  -------------  -------------  -----------
                                          -------------  -------------  -------------  -----------
   *Includes undistributed net
   investment income of:................  $     203,422  $       1,842  $      73,184  $   287,615
                                          -------------  -------------  -------------  -----------
                                          -------------  -------------  -------------  -----------
</TABLE>
 
<TABLE>
<CAPTION>
                                                    For the year ended December 31, 1997
                                                                 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)..........  $   2,156,400  $    591,394  $   312,388   $     404,383
  Net realized gain (loss) on
   investments and foreign currency
   transactions.........................      1,618,244      (738,174)      (1,476 )     3,569,822
  Net change in unrealized appreciation
   (depreciation) on translation of
   assets and liabilities in foreign
   currencies...........................        271,762       803,351       (2,603 )         2,156
  Net change in unrealized appreciation
   (depreciation) of investments........     (1,968,623)     (292,630)     153,207        (244,181)
                                          -------------  ------------  ------------  -------------
    Net increase (decrease) in net
     assets resulting from operations...      2,077,783       363,941      461,516       3,732,180
                                          -------------  ------------  ------------  -------------
Distributions to shareholders: (Note 1)
  From net investment income............     (2,041,389)     (616,309)    (262,504 )            --
  From net realized gain on
   investments..........................             --            --      (42,460 )            --
                                          -------------  ------------  ------------  -------------
    Total distributions.................     (2,041,389)     (616,309)    (304,964 )            --
                                          -------------  ------------  ------------  -------------
Capital share transactions: (Note 4)
  Increase from capital shares sold and
   reinvested...........................     37,352,357     4,845,991    6,057,200      50,446,691
  Decrease from capital shares
   repurchased..........................    (40,609,980)   (6,739,965)  (4,324,042 )   (48,320,307)
                                          -------------  ------------  ------------  -------------
    Net increase (decrease) from capital
     share transactions.................     (3,257,623)   (1,893,974)   1,733,158       2,126,384
                                          -------------  ------------  ------------  -------------
Total increase (decrease) in net
 assets.................................     (3,221,229)   (2,146,342)   1,889,710       5,858,564
Net assets:
  Beginning of year.....................     31,717,921    10,397,369    5,482,926      22,927,653
                                          -------------  ------------  ------------  -------------
  End of year * *.......................  $  28,496,692  $  8,251,027  $ 7,372,636   $  28,786,217
                                          -------------  ------------  ------------  -------------
                                          -------------  ------------  ------------  -------------
   * *Includes undistributed net
   investment income of:................  $     397,677  $     98,996  $    70,621   $     304,812
                                          -------------  ------------  ------------  -------------
                                          -------------  ------------  ------------  -------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F60
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
                  STATEMENTS OF CHANGES IN NET ASSETS (cont'd)
                      For the year ended December 31, 1998
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
 
                                                                                GT GLOBAL
                                          -------------------------------------------------------------------------------------
                                            VARIABLE       VARIABLE      VARIABLE                    VARIABLE
                                            GROWTH &       TELECOM-      EMERGING      VARIABLE       NATURAL       VARIABLE
                                             INCOME      MUNICATIONS     MARKETS     INFRASTRUCTURE   RESOURCES      AMERICA
                                              FUND           FUND          FUND          FUND          FUND           FUND
                                          -------------  ------------  ------------  ------------  -------------  -------------
<S>                                       <C>            <C>           <C>           <C>           <C>            <C>
Increase (decrease) in net assets
Operations:
  Net investment income (loss)..........  $   1,373,112  $    (37,295) $    155,846  $   103,764   $     132,404  $    (264,112)
  Net realized gain (loss) on
   investments and foreign currency
   transactions.........................      7,246,776     6,543,917    (4,736,195)     (73,419 )    (4,331,422)    (1,560,556)
  Net change in unrealized appreciation
   (depreciation) on translation of
   assets and liabilities in foreign
   currencies...........................         23,022      (236,656)        5,583          960            (125)            --
  Net change in unrealized appreciation
   (depreciation) of investments........        988,999     7,115,506       553,200      459,712        (369,811)     4,630,498
                                          -------------  ------------  ------------  ------------  -------------  -------------
    Net increase (decrease) in net
     assets resulting from operations...      9,631,909    13,385,472    (4,021,566)     491,017      (4,568,954)     2,805,830
                                          -------------  ------------  ------------  ------------  -------------  -------------
Distributions to shareholders: (Note 1)
  From net investment income............     (1,163,351)           --        (4,648)     (76,384 )            --             --
  From net realized gain on
   investments..........................       (689,824)   (5,760,403)     (832,035)          --      (1,999,188)    (6,036,407)
  In excess of net investment income....             --            --            --           --              --             --
                                          -------------  ------------  ------------  ------------  -------------  -------------
    Total distributions.................     (1,853,175)   (5,760,403)     (836,683)     (76,384 )    (1,999,188)    (6,036,407)
                                          -------------  ------------  ------------  ------------  -------------  -------------
Capital share transactions: (Note 4)
  Increase from capital shares sold and
   reinvested...........................     82,103,169    55,176,617    35,674,006    1,873,104      18,226,922     70,317,597
  Decrease from capital shares
   repurchased..........................    (84,657,906)  (61,528,494)  (41,673,104)  (4,691,541 )   (21,972,187)   (70,230,812)
                                          -------------  ------------  ------------  ------------  -------------  -------------
    Net increase (decrease) from capital
     share transactions.................     (2,554,737)   (6,351,877)   (5,999,098)  (2,818,437 )    (3,745,265)        86,785
                                          -------------  ------------  ------------  ------------  -------------  -------------
Total increase (decrease) in net
 assets.................................      5,223,997     1,273,192   (10,857,347)  (2,403,804 )   (10,313,407)    (3,143,792)
Net assets:
  Beginning of year.....................     50,356,264    68,186,143    16,508,757    8,745,185      16,709,007     43,976,824
                                          -------------  ------------  ------------  ------------  -------------  -------------
  End of year...........................  $  55,580,261  $ 69,459,335  $  5,651,410  $ 6,341,381   $   6,395,600  $  40,833,032
                                          -------------  ------------  ------------  ------------  -------------  -------------
                                          -------------  ------------  ------------  ------------  -------------  -------------
   *Includes undistributed net
   investment income of:................  $     721,627  $         --  $     76,434  $   104,883   $     111,308  $          --
                                          -------------  ------------  ------------  ------------  -------------  -------------
                                          -------------  ------------  ------------  ------------  -------------  -------------
 
<CAPTION>
 
                                             VARIABLE
                                               NEW           VARIABLE         MONEY        VARIABLE
                                             PACIFIC          EUROPE          MARKET      INTERNATIONAL
                                               FUND            FUND            FUND          FUND
                                          --------------  --------------  --------------  -----------
<S>                                       <C>             <C>             <C>             <C>
Increase (decrease) in net assets
Operations:
  Net investment income (loss)..........  $      308,371  $      121,528  $    1,506,185  $  104,596
  Net realized gain (loss) on
   investments and foreign currency
   transactions.........................      (3,607,110)      8,721,640              --     356,679
  Net change in unrealized appreciation
   (depreciation) on translation of
   assets and liabilities in foreign
   currencies...........................        (105,425)          3,427              --     (47,735 )
  Net change in unrealized appreciation
   (depreciation) of investments........       2,848,653        (865,332)             --     137,293
                                          --------------  --------------  --------------  -----------
    Net increase (decrease) in net
     assets resulting from operations...        (555,511)      7,981,263       1,506,185     550,833
                                          --------------  --------------  --------------  -----------
Distributions to shareholders: (Note 1)
  From net investment income............        (351,881)        (60,959)     (1,506,185)    (56,951 )
  From net realized gain on
   investments..........................              --      (3,918,823)             --    (471,250 )
  In excess of net investment income....              --              --              --          --
                                          --------------  --------------  --------------  -----------
    Total distributions.................        (351,881)     (3,979,782)     (1,506,185)   (528,201 )
                                          --------------  --------------  --------------  -----------
Capital share transactions: (Note 4)
  Increase from capital shares sold and
   reinvested...........................     174,054,677     354,305,731     727,175,801  79,400,263
  Decrease from capital shares
   repurchased..........................    (178,627,344)   (353,100,071)   (722,552,277) (78,024,723)
                                          --------------  --------------  --------------  -----------
    Net increase (decrease) from capital
     share transactions.................      (4,572,667)      1,205,660       4,623,524   1,375,540
                                          --------------  --------------  --------------  -----------
Total increase (decrease) in net
 assets.................................      (5,480,059)      5,207,141       4,623,524   1,398,172
Net assets:
  Beginning of year.....................      16,490,084      27,409,750      26,964,207   5,929,179
                                          --------------  --------------  --------------  -----------
  End of year...........................  $   11,010,025  $   32,616,891  $   31,587,731  $7,327,351
                                          --------------  --------------  --------------  -----------
                                          --------------  --------------  --------------  -----------
   *Includes undistributed net
   investment income of:................  $      239,972  $      121,518  $           --      80,404
                                          --------------  --------------  --------------  -----------
                                          --------------  --------------  --------------  -----------
</TABLE>
<TABLE>
<CAPTION>
 
                                                         For the year ended December 31, 1997
                                                                       GT GLOBAL
                                ---------------------------------------------------------------------------------------
                                  VARIABLE       VARIABLE       VARIABLE                     VARIABLE
                                  GROWTH &       TELECOM-       EMERGING       VARIABLE       NATURAL       VARIABLE
                                   INCOME       MUNICATIONS      MARKETS     INFRASTRUCTURE   RESOURCES      AMERICA
                                    FUND           FUND           FUND           FUND          FUND           FUND
                                -------------  -------------  -------------  ------------  -------------  -------------
<S>                             <C>            <C>            <C>            <C>           <C>            <C>
Increase (decrease) in net
assets
Operations:
  Net investment income
   (loss).....................  $   1,205,645  $     (68,334) $     221,606  $    83,258   $     (29,831) $    (142,918)
  Net realized gain (loss) on
   investments and foreign
   currency transactions......      1,630,452      5,806,561        492,304     (206,416 )     2,034,294      6,277,204
  Net change in unrealized
   appreciation (depreciation)
   on translation of assets
   and liabilities in foreign
   currencies.................        (54,835)       167,417         (9,023)      (1,800 )         2,250             --
  Net change in unrealized
   appreciation (depreciation)
   of investments.............      3,876,889      2,996,284     (2,699,474)     442,473      (1,935,169)      (372,530)
                                -------------  -------------  -------------  ------------  -------------  -------------
    Net increase (decrease) in
     net assets resulting from
     operations...............      6,658,151      8,901,928     (1,994,587)     317,515          71,544      5,761,756
                                -------------  -------------  -------------  ------------  -------------  -------------
Distributions to shareholders:
 (Note 1)
  From net investment
   income.....................     (1,300,804)            --        (84,900)     (47,833 )            --       (196,399)
  From net realized gain on
   investments................        (90,528)    (7,777,355)    (1,283,734)    (431,226 )      (762,160)    (1,554,377)
                                -------------  -------------  -------------  ------------  -------------  -------------
    Total distributions.......     (1,391,332)    (7,777,355)    (1,368,634)    (479,059 )      (762,160)    (1,750,776)
                                -------------  -------------  -------------  ------------  -------------  -------------
Capital share transactions:
(Note 4)
  Increase from capital shares
   sold and reinvested........     80,082,075     53,743,901     65,386,565    6,628,609      42,957,139     51,554,136
  Decrease from capital shares
   repurchased................    (71,425,393)   (49,940,160)   (63,118,511)  (3,775,850 )   (41,865,469)   (53,234,901)
                                -------------  -------------  -------------  ------------  -------------  -------------
    Net increase (decrease)
     from capital share
     transactions.............      8,656,682      3,803,741      2,268,054    2,852,759       1,091,670     (1,680,765)
                                -------------  -------------  -------------  ------------  -------------  -------------
Total increase (decrease) in
 net assets...................     13,923,501      4,928,314     (1,095,167)   2,691,215         401,054      2,330,215
Net assets:
  Beginning of year...........     36,432,763     63,257,829     17,603,924    6,053,970      16,307,953     41,646,609
                                -------------  -------------  -------------  ------------  -------------  -------------
  End of year * *.............  $  50,356,264  $  68,186,143  $  16,508,757  $ 8,745,185   $  16,709,007  $  43,976,824
                                -------------  -------------  -------------  ------------  -------------  -------------
                                -------------  -------------  -------------  ------------  -------------  -------------
   * *Includes undistributed
   net investment income
   of:........................  $     643,714  $          --  $     168,757  $    77,503   $          --  $          --
                                -------------  -------------  -------------  ------------  -------------  -------------
                                -------------  -------------  -------------  ------------  -------------  -------------
 
<CAPTION>
 
                                   VARIABLE
                                     NEW           VARIABLE         MONEY         VARIABLE
                                   PACIFIC          EUROPE          MARKET      INTERNATIONAL
                                     FUND            FUND            FUND           FUND
                                --------------  --------------  --------------  -------------
<S>                             <C>             <C>             <C>             <C>
Increase (decrease) in net
assets
Operations:
  Net investment income
   (loss).....................  $      415,628  $       62,782  $    1,033,856  $      69,499
  Net realized gain (loss) on
   investments and foreign
   currency transactions......        (100,720)      4,084,568              --        501,515
  Net change in unrealized
   appreciation (depreciation)
   on translation of assets
   and liabilities in foreign
   currencies.................         105,422          (4,948)             --         19,339
  Net change in unrealized
   appreciation (depreciation)
   of investments.............     (10,613,599)        417,896              --        (52,826)
                                --------------  --------------  --------------  -------------
    Net increase (decrease) in
     net assets resulting from
     operations...............     (10,193,269)      4,560,298       1,033,856        537,527
                                --------------  --------------  --------------  -------------
Distributions to shareholders:
 (Note 1)
  From net investment
   income.....................        (178,145)        (69,048)     (1,033,856)        (7,912)
  From net realized gain on
   investments................        (128,263)     (2,404,127)             --             --
                                --------------  --------------  --------------  -------------
    Total distributions.......        (306,408)     (2,473,175)     (1,033,856)        (7,912)
                                --------------  --------------  --------------  -------------
Capital share transactions:
(Note 4)
  Increase from capital shares
   sold and reinvested........     181,437,283     147,172,457     524,518,140     35,266,039
  Decrease from capital shares
   repurchased................    (187,117,722)   (146,386,879)   (517,347,993)   (34,648,323)
                                --------------  --------------  --------------  -------------
    Net increase (decrease)
     from capital share
     transactions.............      (5,680,439)        785,578       7,170,147        617,716
                                --------------  --------------  --------------  -------------
Total increase (decrease) in
 net assets...................     (16,180,116)      2,872,701       7,170,147      1,147,331
Net assets:
  Beginning of year...........      32,670,200      24,537,049      19,794,060      4,781,848
                                --------------  --------------  --------------  -------------
  End of year * *.............  $   16,490,084  $   27,409,750  $   26,964,207  $   5,929,179
                                --------------  --------------  --------------  -------------
                                --------------  --------------  --------------  -------------
   * *Includes undistributed
   net investment income
   of:........................  $      351,912  $       60,949  $           --  $      56,757
                                --------------  --------------  --------------  -------------
                                --------------  --------------  --------------  -------------
</TABLE>
 
    The accompanying notes are an integral part of the financial statements.
 
                                      F61
<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
                                          ------------------------------------------------------------
                                                            YEAR ENDED DECEMBER 31,
                                          ------------------------------------------------------------
                                            1998         1997         1996         1995         1994
                                          --------     --------     --------     --------     --------
<S>                                       <C>          <C>          <C>          <C>          <C>
Per Share Operating Performance:
Net asset value, beginning of period....  $ 13.39      $ 13.38      $ 11.86      $ 10.82      $ 14.57
                                          --------     --------     --------     --------     --------
  Net investment income (loss)..........     0.97(a)      1.00(b)      0.95(c)      1.07(d)      1.71(e)
  Net realized and unrealized gain
   (loss) on investments................    (1.05)       (0.07)        1.50         0.93        (4.17)
                                          --------     --------     --------     --------     --------
    Net increase (decrease) resulting
     from operations....................    (0.08)        0.93         2.45         2.00        (2.46)
                                          --------     --------     --------     --------     --------
Distributions to shareholders:
  From net investment income............    (0.92)       (0.92)       (0.85)       (0.96)       (0.79)
  From net realized gain on
   investments..........................       --           --        (0.08)          --        (0.45)
  In excess of net investment income....       --           --           --           --           --
  In excess of net realized gain on
   investments..........................       --           --           --           --           --
  Return of capital.....................       --           --           --           --        (0.05)
                                          --------     --------     --------     --------     --------
    Total distributions.................    (0.92)       (0.92)       (0.93)       (0.96)       (1.29)
                                          --------     --------     --------     --------     --------
Net asset value, end of period..........  $ 12.39      $ 13.39      $ 13.38      $ 11.86      $ 10.82
                                          --------     --------     --------     --------     --------
                                          --------     --------     --------     --------     --------
Total investment return  (f)............    (0.61)%       7.14%       21.58%       19.50%      (17.09)%
                                          --------     --------     --------     --------     --------
                                          --------     --------     --------     --------     --------
Ratios and supplemental data:
Net assets, end of period (in 000's)....  $22,022      $28,497      $31,718      $25,345      $23,367
Ratio of net investment income (loss) to
 average net assets:
  With reimbursement and/or expense
   reductions (Notes 2 & 5).............     7.16%        7.20%        7.74%        9.59%        7.58%
  Without reimbursement and/or expense
   reductions...........................     6.97%        7.03%        7.59%        9.35%        7.43%
Ratio of expenses to average net assets
 excluding interest expense:
  With reimbursement and/or expense
   reductions (Notes 2 & 5).............     1.00%        0.90%        0.99%        1.00%        1.00%
  Without reimbursement and/or expense
   reductions...........................     1.19%        1.07%        1.14%        1.24%        1.15%
Ratio of interest expense to average net
 assets.................................     0.16%          --%          --%          --%          --%
Portfolio turnover......................      282%         185%         210%         193%         313%
</TABLE>
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
 
                                                                                                GT GLOBAL
                                                                      --------------------------------------------------------------
                                                                                       VARIABLE LATIN AMERICA FUND
                                                                      --------------------------------------------------------------
                                                                                         YEAR ENDED DECEMBER 31,
                                                                      --------------------------------------------------------------
                                                                        1998         1997         1996         1995          1994
                                                                      --------     --------     --------     --------     ----------
<S>                                                                   <C>          <C>          <C>          <C>          <C>
Per Share Operating Performance:
Net asset value, beginning of period................................  $ 16.95      $ 14.80      $ 12.42      $ 19.17      $ 17.68
                                                                      --------     --------     --------     --------     ----------
  Net investment income (loss)......................................     0.39(a)      0.24(b)      0.27(c)      0.51(d)      0.11(e)
  Net realized and unrealized gain (loss) on investments............    (7.36)        1.91         2.49        (5.10)        1.49
                                                                      --------     --------     --------     --------     ----------
    Net increase (decrease) resulting from operations...............    (6.97)        2.15         2.76        (4.59)        1.60
                                                                      --------     --------     --------     --------     ----------
Distributions to shareholders:
  From net investment income........................................    (0.25)          --        (0.37)       (0.16)       (0.04)
  From net realized gain on investments.............................    (0.12)          --           --        (2.00)       (0.07)
  In excess of net investment income................................       --           --        (0.01)          --           --
                                                                      --------     --------     --------     --------     ----------
    Total distributions.............................................    (0.37)          --        (0.38)       (2.16)       (0.11)
                                                                      --------     --------     --------     --------     ----------
Net asset value, end of period......................................  $  9.61      $ 16.95      $ 14.80      $ 12.42      $ 19.17
                                                                      --------     --------     --------     --------     ----------
                                                                      --------     --------     --------     --------     ----------
Total investment return  (f)........................................   (41.71)%      14.53%       22.48%      (24.14)%       9.14%
                                                                      --------     --------     --------     --------     ----------
                                                                      --------     --------     --------     --------     ----------
Ratios and supplemental data:
Net assets, end of period (in 000's)................................  $ 9,935      $28,786      $22,928      $19,771      $26,631
Ratio of net investment income (loss) to average net assets:
  With reimbursement and/or expense reductions (Notes 2 & 5)........     1.97%        1.36%        1.94%        4.43%        0.82%
  Without reimbursement and/or expense reductions...................     1.70%        1.21%        1.69%        3.92%        0.49%
Ratio of expenses to average net assets excluding interest expense:
  With reimbursement and/or expense reductions (Notes 2 & 5)........     1.25%        1.25%        1.17%        1.18%        1.25%
  Without reimbursement and/or expense reductions...................     1.52%        1.40%        1.42%        1.69%        1.58%
Ratio of interest expense to average net assets.....................     0.14%          --%          --%          --%          --%
Portfolio turnover..................................................       43%         141%         102%         140%         185%
</TABLE>
 
- ------------------------
 
 (a) Includes reimbursement of Fund operating expenses of $0.02 for the
     Variable Strategic Income Fund, $0.05 for the Variable Global
     Government Income Fund, $0.04 for the Variable U.S. Government Income
     Fund, $0.04 for the Variable Latin America Fund and $0.01 for the
     Variable Telecommunications Fund (Note 2).
 (b) Includes reimbursement of Fund operating expenses of $0.01 for the
     Variable Strategic Income Fund, $0.06 for the Variable Global
     Government Income Fund, $0.06 for Variable U.S. Government Income
     Fund, $0.02 for the Variable Latin America Fund, and $0.00 for the
     Variable Growth & Income Fund (Note 2).
 (c) Includes reimbursement 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).
 (d) Includes reimbursement 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).
 (e) Includes reimbursement 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.
 
                                      F62
<PAGE>
                      GT GLOBAL VARIABLE INVESTMENT FUNDS
 
                         FINANCIAL HIGHLIGHTS (cont'd)
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
 
                                                                  GT GLOBAL
                                           --------------------------------------------------------
                                                    VARIABLE GLOBAL GOVERNMENT INCOME FUND
                                           --------------------------------------------------------
                                                           YEAR ENDED DECEMBER 31,
                                           --------------------------------------------------------
                                             1998        1997        1996        1995        1994
                                           --------    --------    --------    --------    --------
<S>                                        <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....   $ 11.17     $ 11.43     $ 11.51     $ 10.63     $ 12.53
                                           --------    --------    --------    --------    --------
  Net investment income (loss)..........      0.67(a)     0.82(b)     0.72(c)     0.79(d)     0.77(e)
  Net realized and unrealized gain
   (loss) on investments................      0.71       (0.34)      (0.06)       0.84       (1.85)
                                           --------    --------    --------    --------    --------
    Net increase (decrease) resulting
     from operations....................      1.38        0.48        0.66        1.63       (1.08)
                                           --------    --------    --------    --------    --------
Distributions to shareholders:
  From net investment income............     (0.62)      (0.74)      (0.74)      (0.75)      (0.73)
  From net realized gain on
   investments..........................        --          --          --          --          --
  In excess of net investment income....     (0.02)         --          --          --          --
  In excess of net realized gain on
   investments..........................        --          --          --          --          --
  Return of capital.....................        --          --          --          --       (0.09)
                                           --------    --------    --------    --------    --------
    Total distributions.................     (0.64)      (0.74)      (0.74)      (0.75)      (0.82)
                                           --------    --------    --------    --------    --------
Net asset value, end of period..........   $ 11.91     $ 11.17     $ 11.43     $ 11.51     $ 10.63
                                           --------    --------    --------    --------    --------
                                           --------    --------    --------    --------    --------
Total investment return  (f)............     12.69%       4.37%       6.17%      15.85%      (8.70)%
                                           --------    --------    --------    --------    --------
                                           --------    --------    --------    --------    --------
Ratios and supplemental data:
Net assets, end of period (in 000's)....   $ 8,801     $ 8,251     $10,397     $11,944     $ 9,654
Ratio of net investment income (loss) to
 average net assets:
  With reimbursement and/or expense
   reductions (Notes 2 & 5).............      5.71%       6.33%       6.32%       7.03%       6.89%
  Without reimbursement and/or expense
   reductions...........................      5.28%       5.74%       5.80%       6.37%       6.21%
Ratio of expenses to average net assets
 excluding interest expense:
  With reimbursement and/or expense
   reductions (Notes 2 & 5).............      1.00%       0.95%       0.95%       1.00%       1.00%
  Without reimbursement and/or expense
   reductions...........................      1.43%       1.54%       1.47%       1.66%       1.68%
Ratio of interest expense to average net
 assets.................................      0.07%         --%         --%         --%         --%
Portfolio turnover......................       224%        235%        235%        394%        350%
 
<CAPTION>
                                                                  GT GLOBAL
                                           --------------------------------------------------------
 
                                                     VARIABLE U.S. GOVERNMENT INCOME FUND
                                           --------------------------------------------------------
 
                                                           YEAR ENDED DECEMBER 31,
                                           --------------------------------------------------------
                                             1998        1997        1996        1995        1994
                                           --------    --------    --------    --------    --------
<S>                                        <C>         <C>         <C>         <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period....   $ 11.70     $ 11.41     $ 11.74     $ 10.79     $ 12.23
                                           --------    --------    --------    --------    --------
  Net investment income (loss)..........      0.63(a)     0.63(b)     0.60(c)     0.62(d)     0.63(e)
  Net realized and unrealized gain
   (loss) on investments................      0.40        0.29       (0.35)       0.93       (1.39)
                                           --------    --------    --------    --------    --------
    Net increase (decrease) resulting
     from operations....................      1.03        0.92        0.25        1.55       (0.76)
                                           --------    --------    --------    --------    --------
Distributions to shareholders:
  From net investment income............     (0.62)      (0.54)      (0.58)      (0.60)      (0.62)
  From net realized gain on
   investments..........................        --       (0.09)         --          --       (0.06)
  In excess of net investment income....        --          --          --          --          --
  In excess of net realized gain on
   investments..........................        --          --          --          --          --
  Return of capital.....................        --          --          --          --          --
                                           --------    --------    --------    --------    --------
    Total distributions.................     (0.62)      (0.63)      (0.58)      (0.60)      (0.68)
                                           --------    --------    --------    --------    --------
Net asset value, end of period..........   $ 12.11     $ 11.70     $ 11.41     $ 11.74     $ 10.79
                                           --------    --------    --------    --------    --------
                                           --------    --------    --------    --------    --------
Total investment return  (f)............      9.06%       8.30%       2.23%      14.73%      (6.27)%
                                           --------    --------    --------    --------    --------
                                           --------    --------    --------    --------    --------
Ratios and supplemental data:
Net assets, end of period (in 000's)....   $ 7,381     $ 7,373     $ 5,483     $ 5,992     $ 2,415
Ratio of net investment income (loss) to
 average net assets:
  With reimbursement and/or expense
   reductions (Notes 2 & 5).............      5.17%       5.54%       5.24%       5.43%       5.53%
  Without reimbursement and/or expense
   reductions...........................      4.85%       4.92%       4.49%       3.87%       1.29%
Ratio of expenses to average net assets
 excluding interest expense:
  With reimbursement and/or expense
   reductions (Notes 2 & 5).............      1.00%       1.00%       1.00%       1.00%       0.38%
  Without reimbursement and/or expense
   reductions...........................      1.32%       1.62%       1.75%       2.56%       4.63%
Ratio of interest expense to average net
 assets.................................      0.07%         --%         --%         --%         --%
Portfolio turnover......................       231%        143%         49%        186%         34%
</TABLE>
 
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
 
                                                                     GT GLOBAL
                                            ------------------------------------------------------------
                                                           VARIABLE GROWTH & INCOME FUND
                                            ------------------------------------------------------------
                                                              YEAR ENDED DECEMBER 31,
                                            ------------------------------------------------------------
                                              1998         1997         1996         1995         1994
                                            --------     --------     --------     --------     --------
<S>                                         <C>          <C>          <C>          <C>          <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $ 18.60      $ 16.51      $ 14.57      $ 12.99      $ 13.77
                                            --------     --------     --------     --------     --------
  Net investment income (loss)..........       0.53(a)      0.41(b)      0.53(c)      0.52(d)      0.46(e)
  Net realized and unrealized gain
   (loss) on investments................       3.08         2.23         1.81         1.46        (0.85)
                                            --------     --------     --------     --------     --------
    Net increase (decrease) resulting
     from operations....................       3.61         2.64         2.34         1.98        (0.39)
                                            --------     --------     --------     --------     --------
Distributions to shareholders:
  From net investment income............      (0.44)       (0.51)       (0.35)       (0.40)       (0.39)
  From net realized gain on
   investments..........................      (0.26)       (0.04)       (0.05)          --           --
  In excess of net investment income....         --           --           --           --           --
                                            --------     --------     --------     --------     --------
    Total distributions.................      (0.70)       (0.55)       (0.40)       (0.40)       (0.39)
                                            --------     --------     --------     --------     --------
Net asset value, end of period..........    $ 21.51      $ 18.60      $ 16.51      $ 14.57      $ 12.99
                                            --------     --------     --------     --------     --------
                                            --------     --------     --------     --------     --------
Total investment return  (f)............      19.60%       16.22%       16.33%       15.49%       (2.85)%
                                            --------     --------     --------     --------     --------
                                            --------     --------     --------     --------     --------
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $55,580      $50,356      $36,433      $30,565      $25,580
Ratio of net investment income (loss) to
 average net assets:
  With reimbursement and/or expense
   reductions (Notes 2 & 5).............       2.53%        2.86%        3.58%        3.87%        3.69%
  Without reimbursement and/or expense
   reductions...........................       2.53%        2.72%        3.48%        3.66%        3.45%
Ratio of expenses to average net assets
 excluding interest expense:
  With reimbursement and/or expense
   reductions (Notes 2 & 5).............       1.22%        1.13%        1.20%        1.23%        1.25%
  Without reimbursement and/or expense
   reductions...........................       1.22%        1.27%        1.30%        1.44%        1.49%
Ratio of interest expense to average net
 assets.................................       0.04%          --%          --%          --%          --%
Portfolio turnover......................         72%          60%          57%          73%          53%
 
<CAPTION>
                                                                     GT GLOBAL
                                            ------------------------------------------------------------
 
                                                          VARIABLE TELECOMMUNICATIONS FUND
                                            ------------------------------------------------------------
 
                                                              YEAR ENDED DECEMBER 31,
                                            ------------------------------------------------------------
                                              1998         1997         1996         1995         1994
                                            --------     --------     --------     --------     --------
<S>                                         <C>          <C>          <C>          <C>          <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $ 18.40      $ 18.14      $ 16.87      $ 13.98      $ 13.07
                                            --------     --------     --------     --------     --------
  Net investment income (loss)..........      (0.01) (a)   (0.02)       (0.05)        0.02(d)      0.01(e)
  Net realized and unrealized gain
   (loss) on investments................       3.99         2.59         3.31         3.26         0.92
                                            --------     --------     --------     --------     --------
    Net increase (decrease) resulting
     from operations....................       3.98         2.57         3.26         3.28         0.93
                                            --------     --------     --------     --------     --------
Distributions to shareholders:
  From net investment income............         --           --        (0.02)       (0.03)       (0.02)
  From net realized gain on
   investments..........................      (1.72)       (2.31)       (1.97)       (0.36)          --
  In excess of net investment income....         --           --           --           --           --
                                            --------     --------     --------     --------     --------
    Total distributions.................      (1.72)       (2.31)       (1.99)       (0.39)       (0.02)
                                            --------     --------     --------     --------     --------
Net asset value, end of period..........    $ 20.66      $ 18.40      $ 18.14      $ 16.87      $ 13.98
                                            --------     --------     --------     --------     --------
                                            --------     --------     --------     --------     --------
Total investment return  (f)............      22.11%       14.56%       19.34%       23.66%        7.15%
                                            --------     --------     --------     --------     --------
                                            --------     --------     --------     --------     --------
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $69,459      $68,186      $63,258      $50,778      $36,029
Ratio of net investment income (loss) to
 average net assets:
  With reimbursement and/or expense
   reductions (Notes 2 & 5).............      (0.04)%      (0.10)%      (0.26)%       0.16%        0.31%
  Without reimbursement and/or expense
   reductions...........................      (0.05)%      (0.15)%      (0.31)%       0.10%        0.07%
Ratio of expenses to average net assets
 excluding interest expense:
  With reimbursement and/or expense
   reductions (Notes 2 & 5).............       1.16%        1.11%        1.12%        1.20%        1.25%
  Without reimbursement and/or expense
   reductions...........................       1.17%        1.16%        1.17%        1.26%        1.49%
Ratio of interest expense to average net
 assets.................................       0.01%          --%          --%          --%          --%
Portfolio turnover......................         73%          91%          77%          70%          81%
</TABLE>
 
- ------------------------
 
 (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.
 
                                      F63
<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
                                                                  ------------------------------------------------------------------
                                                                                                                      JULY 5, 1994
                                                                                                                    (COMMENCEMENT OF
                                                                             YEAR ENDED DECEMBER 31,                 OPERATIONS) TO
                                                                  ---------------------------------------------       DECEMBER 31,
                                                                   1998         1997         1996        1995             1994
                                                                  -------     --------     --------     -------     ----------------
<S>                                                               <C>         <C>          <C>          <C>         <C>
Per Share Operating Performance:
Net asset value, beginning of period............................  $11.57      $ 14.26      $ 10.88      $11.89          $12.00
                                                                  -------     --------     --------     -------       --------
  Net investment income (loss)..................................    0.27(a)      0.15(b)      0.11(c)     0.14(d)         0.07(e)
  Net realized and unrealized gain (loss) on investments........   (4.34)       (1.89)        3.27       (1.04)          (0.05)
                                                                  -------     --------     --------     -------       --------
    Net increase (decrease) resulting from operations...........   (4.07)       (1.74)        3.38       (0.90)           0.02
                                                                  -------     --------     --------     -------       --------
Distributions to shareholders:
  From net investment income....................................      --        (0.06)          --       (0.09)          (0.07)
  From net realized gain on investments.........................   (0.81)       (0.89)          --          --              --
  In excess of net investment income............................      --           --           --          --              --
  In excess of net realized gain on investments.................      --           --           --          --           (0.06)
  Return of capital.............................................      --           --           --       (0.02)             --
                                                                  -------     --------     --------     -------       --------
    Total distributions.........................................   (0.81)       (0.95)          --       (0.11)          (0.13)
                                                                  -------     --------     --------     -------       --------
Net asset value, end of period..................................  $ 6.69      $ 11.57      $ 14.26      $10.88          $11.89
                                                                  -------     --------     --------     -------       --------
                                                                  -------     --------     --------     -------       --------
Total investment return  (f) +..................................  (36.90)%     (13.76)%      31.07%      (7.54)%          0.12%
                                                                  -------     --------     --------     -------       --------
                                                                  -------     --------     --------     -------       --------
Ratios and supplemental data:
Net assets, end of period (in 000's)............................  $5,651      $16,509      $17,604      $8,983          $7,267
Ratio of net investment income (loss) to average net assets:
  With reimbursement and/or expense reductions (Notes 2 &
   5)++.........................................................    1.61%        1.05%        0.89%       1.55%           4.10%
  Without reimbursement and/or expense reductions++.............    0.72%        0.78%        0.39%       0.51%          (0.20)%
Ratio of expenses to average net assets excluding interest
 expense:
  With reimbursement and/or expense reductions (Notes 2 &
   5)++.........................................................    1.23%        1.22%        1.18%       1.18%           0.00%
  Without reimbursement and/or expense reductions++.............    2.12%        1.49%        1.68%       2.22%           4.30%
Ratio of interest expense to average net assets.................    0.17%          --%          --%         --%             --%
Portfolio turnover++............................................     110%         212%         216%        210%            117%
</TABLE>
 
- --------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
 
                                                                                                GT GLOBAL
                                                                      --------------------------------------------------------------
                                                                                          VARIABLE AMERICA FUND
                                                                      --------------------------------------------------------------
                                                                                         YEAR ENDED DECEMBER 31,
                                                                      --------------------------------------------------------------
                                                                        1998         1997         1996         1995          1994
                                                                      --------     --------     --------     --------     ----------
<S>                                                                   <C>          <C>          <C>          <C>          <C>
Per Share Operating Performance:
Net asset value, beginning of period................................  $ 21.68      $ 19.71      $ 19.46      $ 15.81      $ 13.75
                                                                      --------     --------     --------     --------     ----------
  Net investment income (loss)......................................    (0.13)       (0.07)        0.12(c)      0.21(d)      0.48(e)
  Net realized and unrealized gain (loss) on investments............     1.80         2.88         3.18         3.80         2.08
                                                                      --------     --------     --------     --------     ----------
    Net increase (decrease) resulting from operations...............     1.67         2.81         3.30         4.01         2.56
                                                                      --------     --------     --------     --------     ----------
Distributions to shareholders:
  From net investment income........................................       --        (0.09)       (0.30)       (0.07)       (0.50)
  From net realized gain on investments.............................    (3.20)       (0.75)       (2.75)       (0.29)          --
  In excess of net investment income................................       --           --           --           --           --
  In excess of net realized gain on investments.....................       --           --           --           --           --
  Return of capital.................................................       --           --           --           --           --
                                                                      --------     --------     --------     --------     ----------
    Total distributions.............................................    (3.20)       (0.84)       (3.05)       (0.36)       (0.50)
                                                                      --------     --------     --------     --------     ----------
Net asset value, end of period......................................  $ 20.15      $ 21.68      $ 19.71      $ 19.46      $ 15.81
                                                                      --------     --------     --------     --------     ----------
                                                                      --------     --------     --------     --------     ----------
Total investment return  (f)........................................     8.09%       14.88%       18.55%       25.37%       18.88%
                                                                      --------     --------     --------     --------     ----------
                                                                      --------     --------     --------     --------     ----------
Ratios and supplemental data:
Net assets, end of period (in 000's)................................  $40,833      $43,977      $41,647      $37,643      $15,257
Ratio of net investment income (loss) to average net assets:
  With reimbursement and/or expense reductions (Notes 2 & 5)........    (0.59)%      (0.35)%       0.52%        1.66%        1.83%
  Without reimbursement and/or expense reductions...................    (0.59)%      (0.42)%       0.46%        1.60%        0.76%
Ratio of expenses to average net assets excluding interest expense:
  With reimbursement and/or expense reductions (Notes 2 & 5)........     0.95%        0.91%        0.95%        1.00%        0.98%
  Without reimbursement and/or expense reductions...................     0.95%        0.98%        1.01%        1.06%        2.05%
Ratio of interest expense to average net assets.....................     0.08%          --%          --%          --%          --%
Portfolio turnover..................................................      181%         210%         248%          79%         139%
</TABLE>
 
- ------------------------
 
 (a) Includes reimbursement of Fund operating expenses of $0.08 for the
     Variable Emerging Markets Fund, $0.09 for the Variable Infrastructure
     Fund, $0.04 for the Variable Natural Resources Fund, $0.05 for the
     Variable New Pacific Fund and $0.01 for the Variable Europe Fund (Note
     2).
 (b) Includes reimbursement of Fund operating expenses of $0.03 for the
     Variable Emerging Markets Fund, $0.04 for the Variable Infrastructure
     Fund, $0.03 for the Variable Natural Resources Fund, $0.02 for the
     Variable New Pacific Fund, and $0.02 for the Variable Europe Fund
     (Note 2).
 (c) Includes reimbursement 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, $0.00 for the
     Variable America Fund, $0.04 for the Variable New Pacific Fund, and
     $0.04 for the Variable Europe Fund (Note 2).
 (d) Includes reimbursement 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, and
     $0.08 for the Variable Europe Fund (Note 2).
 (e) Includes reimbursement 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, and $0.04 for the Variable
     Europe 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 INFRASTRUCTURE FUND
                                            -------------------------------------------------------
                                                                                   JANUARY 31, 1995
                                                        YEAR ENDED                 (COMMENCEMENT OF
                                                       DECEMBER 31,                 OPERATIONS) TO
                                            ----------------------------------       DECEMBER 31,
                                              1998         1997         1996             1995
                                            --------     --------     --------     ----------------
<S>                                         <C>          <C>          <C>          <C>
Per Share Operating Performance:
Net asset value, beginning of period....    $ 16.35      $ 16.47      $ 13.27          $12.00
                                            --------     --------     --------       --------
  Net investment income (loss)..........       0.31(a)      0.12(b)      0.11(c)         0.07(d)
  Net realized and unrealized gain
   (loss) on investments................       0.77         0.74         3.19            1.20
                                            --------     --------     --------       --------
    Net increase (decrease) resulting
     from operations....................       1.08         0.86         3.30            1.27
                                            --------     --------     --------       --------
Distributions to shareholders:
  From net investment income............      (0.17)       (0.10)       (0.03)             --
  From net realized gain on
   investments..........................         --        (0.88)       (0.07)             --
  In excess of net investment income....         --           --           --              --
  In excess of net realized gain on
   investments..........................         --           --           --              --
  Return of capital.....................         --           --           --              --
                                            --------     --------     --------       --------
    Total distributions.................      (0.17)       (0.98)       (0.10)             --
                                            --------     --------     --------       --------
Net asset value, end of period..........    $ 17.26      $ 16.35      $ 16.47          $13.27
                                            --------     --------     --------       --------
                                            --------     --------     --------       --------
Total investment return  (f)............       6.58%        5.00%       24.88%          10.58%
                                            --------     --------     --------       --------
                                            --------     --------     --------       --------
Ratios and supplemental data:
Net assets, end of period (in 000's)....    $ 6,341      $ 8,745      $ 6,054          $1,594
Ratio of net investment income (loss) to
 average net assets:
  With reimbursement and/or expense
   reductions (Notes 2 & 5).............       1.37%        0.99%        1.35%           1.24%
  Without reimbursement and/or expense
   reductions...........................       0.94%        0.68%        0.03%          (6.11)%
Ratio of expenses to average net assets
 excluding interest expense:
  With reimbursement and/or expense
   reductions (Notes 2 & 5).............       1.25%        1.18%        1.21%           1.22%
  Without reimbursement and/or expense
   reductions...........................       1.68%        1.49%        2.53%           8.57%
Ratio of interest expense to average net
 assets.................................         --%