LOGO
GE Funds
ANNUAL REPORT
September 30, 1996
- --------------------------------------------------------------------------------
UNDERSTANDING YOUR REPORT
- --------------------------------------------------------------------------------
President's Letter 1
Review of Performance and Schedules of Investments
Portfolio managers discuss your Funds and what we invested in and why
GE International Funds 3 - 10
GE U.S. Equity Fund 11 - 16
GE Strategic Investment Fund 17 - 23
GE Tax-Exempt Fund 24 - 27
GE Fixed Income Funds 28 - 38
Notes to Performance and
Schedules of Investments 39
Financial Statements 40 - 51
Financial Highlights and Statements of Assets and
Liabilities, Operations, and Changes in Net Assets
Notes 52 - 57
Notes to the Financial Statements
Report of Independent Accountants 58
The accountants' opinion
GE Funds Investment Team 60
Shareholder Inquiries Inside Back Cover
How you can obtain more information
On the Cover: GE Investments' portfolio management teams at work.
Top Rated GE Funds
By Morningstar
Through September 30, 1996
* * * *
3 year
GE U.S. Equity - C rated among 1708 Equity funds
GE Strategic Investment - C
rated among 3059 Hybrid funds
* * * *
1 year GE U.S. Equity - C rated among 3006
Equity funds GE Strategic Investment - C rated among 5251 Hybrid funds
* * *
3 year GE Fixed Income - C rated among 948 Fixed Income funds
GE Global Equity - C rated among 1708 Equity funds
* * *
1 year
GE Fixed Income - C rated among 1506 Fixed Income funds
GE Global Equity - C rated among 3006 Equity funds
Morningstar is an independent fund ranking company that seeks to provide a
non-bias rating system used in making investment decisions. A fund is rated in
its investment class on a scale of one to five stars through the evaluation of
the historical balance of risk and return.
Morningstar proprietary ratings reflect historical risk-adjusted performance
through September 30, 1996. The ratings are subject to change every month.
Morningstar ratings are calculated from a fund's three-, five- and ten-year
returns (with fee and sales charge adjustments) in excess of 10-day Treasury
T-bill returns. The one-year rating is calculated using the same methodology,
but is not a component of a fund's overall rating. Ten percent of the funds in a
rating category receive five stars, the next 22.5% receive four stars and the
next 35% receive three stars.
The GE Funds ratings above are based on Class C performance, the only class of
shares with at least three years of performance history. Class C shares are
offered without any front-end or back-end sales charge. The other Fund classes
share a common portfolio of securities with Class C. Star ratings for the other
classes may vary. No class of GE Funds has either a five or ten year performance
history. Investment return and principal value of an investment wll fluctuate
and you may have a gain or loss when you sell your shares. The advisor has
voluntarily agreed to waive and/or bear certain fees and expenses. Without these
provisions, which may be terminated in the future, the results may have been
lower. Returns assume changes in share price and reinvestment of dividend and
capital gain. Past performance is no guarantee of future results.
<PAGE>
A Letter from the President
Dear Shareholder:
We are pleased to provide you with the 1996 annual report. This past year
brought excitement in the financial markets as well as in the GE Funds. We saw
continued growth in the Funds' assets and an increased focus was placed on
customer service.
I want to take this opportunity to thank you for your response to our customer
satisfaction survey. The survey enabled us to identify your expectations and
helped point us to areas that require enhancements.
We learned that approximately 94% of respondents were satisfied with GE
Investments and areas presenting an opportunity for improvement included a more
user friendly automated response system and increased investment options.
As a result, we are in the process of revamping the automated response system
(please refer to the inside back cover for further details). We continue to
strengthen our customer service operations and coming in the next year, we plan
to expand our fund offerings. We will keep you informed about our new funds.
Performance Highlights
As the performance profiles which begin on page 4 demonstrate, the GE Funds'
Family generated attractive returns for our shareholders. Four of our Funds with
equity exposure, namely GE International Equity Fund, GE Global Equity Fund, GE
U.S. Equity Fund and GE Strategic Investment Fund, all had favorable years with
double digit returns. Once again, the majority of our Fund classes, excluding
loads, outperformed their peers for the year, based on averages calculated by
Lipper Analytical Services, an independent mutual fund rating service. The
Lipper Analytical Services average total returns for each category and complete
details on each Fund's performance, including reductions for the effect of
loads, can be found on the various Fund profiles contained in this annual
report.
We are also proud to inform you that many of our GE Funds are now rated by
Morningstar, an independent fund ranking company which analyzes risk-adjusted
performance in order to provide a non-basis rating system. You may have noticed
the inside front cover of this report which shows our top rated funds with a
three year track record. The other classes of shares will become eligible for
Morningstar's rating system in January as they reach the three year criteria.
Market Overview
The U.S. equity market continued to forge ahead during 1996, supported by
unprecedented cash flows into stock mutual funds. September's strong finish in
the equity market masked the short-term volatility which occurred during the
year. A surge in economic activity spilled over from the beginning of 1996 into
the summer months. This sparked inflation concerns that sent the S&P down over
4% in July and triggered trading-curbs for a record eight consecutive days. The
enormous inflows into equity mutual funds slowed to a halt during this sell-off,
only to rebound impressively in August and September. This brought year-to-date
inflows to a record $179 billion through September. The stock market ended the
fiscal year buoyed by the recovering supply-demand balance, high consumer
confidence, and good corporate earnings. The S&P 500 index returned 20.3% for
the twelve months ended September 30, 1996.
1
<PAGE>
A strong economy continues to concern the bond market, with returns adversely
impacted by higher employment and fears of rising wages. The Lehman Brothers
Bond Index returned 4.9% for the twelve months ending September 30, 1996.
Municipal bonds performed slightly better than taxable bonds on a total return
basis, with the Lehman Brothers Municipal Bond Index rising 6.0% for the twelve
months ended September 30, 1996.
International equity market performance, as measured by the Morgan Stanley EAFE
Index, lagged the U.S. market with a twelve month return of 8.6%. Positive
economic news from Hong Kong and mainland China has been offset by Japan's
continuing economic difficulties, with Japanese shares falling 5.6% in the third
quarter of 1996. European shares were bolstered by positive German economic
data, though this, too, has been offset by the difficult economic climate in
France. Nevertheless, we continue to hold a favorable view of overseas markets,
particularly those in Europe where rates have room to come down and profits are
expected to accelerate.
Market Outlook
Though the economy continues to show resiliency, we do not expect growth to
continue at the level experienced in the first half of 1996. The domestic equity
market is at or near record levels in both absolute terms and as measured by
dividend yield and other traditional valuation tools, suggesting greater
vulnerability to a near term correction. The bond market will continue to
fluctuate with changing perceptions of inflation, economic activity, and Federal
Reserve policy. Overseas equity markets continue to offer opportunities for
attractive growth potential and good value. We expect international markets to
perform well, as long as the U.S. market remains stable. We appreciate your
investment in the GE Funds and we will continue to dedicate ourselves to helping
you meet your financial needs.
Michael J. Cosgrove
Mike Cosgrove is responsible for the marketing, product development and sales of
the GE Funds.
In Mike's previous position as Chief Financial Officer of GE Investments and
Assistant Treasurer-GE Company, he had financial responsibility for all assets
under GE Investments' management. Within his Treasury scope, he had
responsibility for GE Shareholder Services, Commercial Paper and the Company
Cash Management System. Mike joined GE in 1970. After completing the Financial
Management Program he held a number of managerial positions in finance and sales
in the International Operation, including serving as its Vice President and
Treasurer and later as the Vice President - Countertrade and Barter for GE
Trading Company.
Mike is a Trustee of the GE Pension Trust and GE's employee savings program and
serves on GE Investments' Asset Allocation Committee.
He graduated from Fordham University in 1970 with a B.S. degree in Economics and
received his M.B.A. degree from St. John's University in 1973.
2
<PAGE>
GE International Funds
Q&A
Ralph Layman manages the international equity operation with total assets of
almost $8 billion. His responsibilities include managing the GE Global Equity
and International Equity Funds. Prior to joining GE Investments in 1991, Ralph
was Executive Vice President and Director of International Equity Operations at
Northern Capital Management. Previously, he was a Vice President and Portfolio
Manager at Templeton Investment Counsel, Inc. He was instrumental in forming
Templeton's Emerging Markets Fund, the first listed emerging markets equity fund
in the U.S. Ralph is a Trustee of the GE Pension Trust, GE's employee savings
program, and serves on the GE Investments' Asset Allocation Committee. He is a
Chartered Financial Analyst (CFA), a charter member of the International Society
of Security Analysts and a member of the New York Society of Security Analysts.
Ralph is a graduate of the University of Wisconsin with a B.S. in Economics and
a M.S. in Finance.
Q. How did the GE International Equity and GE Global Equity Funds' industry
benchmarks and Lipper peers perform for the fiscal year ended September 30,
1996?
A. The GE International Equity Fund's benchmark, the MSCI EAFE Index, returned
8.6% for the 12 months ended September 30, 1996. Our Lipper peer group of
582 International Stock Funds returned an average of 9.0% for the same
period. The GE Global Equity Fund's benchmark, the MSCI World Index,
returned 13.7% for the year ended September 30, 1996 and our Lipper peer
group of 174 Global Stock Funds returned 13.0% for the same period. Refer
to the following page, for GE International Equity Fund, and page 8 for GE
Global Equity Fund, to see how your class of shares performed compared to
the above benchmarks.
Q. What were the primary performance drivers?
A. Our company-specific philosophy has resulted in the Funds having an
overweight position, as compared to the index, in Europe and an underweight
position in Japan. France (+18% return), the Netherlands (+21% return), and
Hong Kong (+23% return) all contributed to the Fund's strong performance
for the year ending September 1996. The Funds benefited from an
underweighting in Japan, which improved only 0.4% vs. Europe's performance
of +14.8%. We continue to believe company valuations in Japan are stretched
compared to their long-term growth rates. For the year ending September
1996, the U.S. market increased 20.3% as measured by the S&P 500. The
Global Equity Fund's underweighting of the U.S. market has hurt
performance. Our underweighting of the U.S. market is a direct result of
our undervalued growth philosophy. We continue to find better relative
values in companies outside of the U.S. The strong U.S. dollar over the
past year has had a positive impact on our global companies in the
portfolio.
Q. Which stocks have you liked?
A. The weightings of the Funds are driven by our stock selection. In the past
quarter, we have found several investments in the U.K. that we believe are
attractive. Granada is a hotel group that has successfully diversified into
the media industry and computer rental/services. Siebe is a top engineering
firm specializing in process control systems. Management seems committed to
growing the business and to creating value for shareholders. Outside of
Europe, we have trimmed our exposure to Mexico, and have taken a small
position in Peru. Telefonica del Peru is the local fixed-line phone
monopoly, and the company should benefit from the nation's high growth
rate, and stable regulatory environment.
Q. What is the outlook for the Funds and how have you positioned them going
forward?
A. We remain optimistic regarding our European overweight. In recent months,
we have noticed that the `restructuring of Europe', a theme we have
discussed here before, has received greater attention from both the media
and our peers. We are well-positioned to benefit from this trend, and
believe that our emphasis on stock-picking will serve us well in this
environment.
Outside Europe, we continue to underweight Japan. On a company-by-company
basis, we are not convinced that Japanese firms are taking the steps needed
to boost their profitability. On the macro side, we are looking for signs
that the economy can expand without the aid of government spending. This
will become particularly important if Parliamentary elections delay the
passage of the next fiscal stimulus package.
We continue to search for attractive stocks in the U.S., for the GE Global
Equity Fund, but we remain underweighted in the market due to the expensive
valuations.
3
<PAGE>
GE International Equity Fund
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Top Ten Largest Holdings
at September 30, 1996
- --------------------------------------------------------------------------------
Total S.A. 2.68%
Veba AG 2.60%
Sandoz AG (Regd.) 2.35%
DDI Corp. 2.31%
Brambles Industries Ltd. 2.30%
Carrefour S.A. 2.23%
Siebe 2.14%
Siemens AG 2.06%
ABB AG 2.01%
Canon Inc. 1.88%
- --------------------------------------------------------------------------------
Investment Profile
A mutual fund designed for investors who seek long-term growth of capital by
investing primarily in foreign equity securities.
* Lipper Performance Comparison
International Stock Peer Group
Based on 10/1/95 -- 9/30/96 total returns
Number of Funds in peer group: 582
Peer group average total return: 9.0%
Lipper categories in peer group: International, European Region, Pacific Region,
Pacific Ex-Japan, Japanese, Latin America, Canadian, Emerging Markets,
International Small Company
*See notes to performance for explanation of peer categories
See page 39 for Notes to Performance. Past performance is no guarantee of future
results.
Comparison of Change in Value of a $10,000 Investment
- --------------------------------------------------------------------------------
Class A Shares
QUARTERLY w/o load with load EAFE
- --------- -------- --------- ----
3/2/94 10000 10000 10000
3/31/94 9753.33 9290.05 9569.11
6/30/94 9753.32 9290.04 10057.82
9/30/94 10119.99 9639.29 10067.63
12/30/94 9622.69 9165.62 9965.09
3/31/95 9682.87 9222.94 10150.54
6/30/95 10298.07 9808.92 10224.17
9/30/95 10612.37 10108.28 10650.7
12/30/95 11003.64 10480.96 11082.14
3/30/96 11338.5 10799.92 11402.31
6/30/96 11700.15 11144.39 11582.47
9/30/96 11820.71 11259.23 11568.12
Average Annual
Total Return
One Since
Year Inception
---- ---------
GE Int'l Equity 11.39% 6.70%
GE Int'l Equity w/load 6.10% 4.70%
MSCI EAFE 8.62% 5.81%
- --------------------------------------------------------------------------------
Class B Shares
QUARTERLY w/o load with load EAFE
- --------- -------- --------- ----
3/2/94 10000 10000 10000
3/31/94 9753.33 9753.33 9569.11
6/30/94 9740 9740 10057.82
9/30/94 10086.65 10086.65 10067.63
12/30/94 9582.65 9582.65 9965.09
3/31/95 9629.36 9629.36 10150.54
6/30/95 10223.29 10223.29 10224.17
9/30/95 10523.58 10523.58 10650.7
12/30/95 10897.29 10897.29 11082.14
3/30/96 11210.92 11210.92 11402.31
6/30/96 11557.93 11557.93 11582.47
9/30/96 11658.03 11458.03 11568.12
Average Annual
Total Return
One Since
Year Inception
---- ---------
GE Int'l Equity 10.78% 6.13%
GE Int'l Equity w/load 6.78% 5.40%
MSCI EAFE 8.62% 5.81%
- --------------------------------------------------------------------------------
Class C Shares
QUARTERLY w/o load EAFE
- --------- -------- ----
3/2/94 10000 10000
3/31/94 9760 9569.11
6/30/94 9760 10057.82
9/30/94 10126.66 10067.63
12/30/94 9636.58 9965.09
3/31/95 9703.64 10150.54
6/30/95 10320.59 10224.17
9/30/95 10649.18 10650.7
12/30/95 11036.55 11082.14
3/30/96 11379.76 11402.31
6/30/96 11756.63 11582.47
9/30/96 11877.76 11568.12
Average Annual
Total Return
One Since
Year Inception
---- ---------
GE Int'l Equity 11.54% 6.90%
MSCI EAFE 8.62% 5.81%
- --------------------------------------------------------------------------------
Class D Shares
QUARTERLY w/o load EAFE
- --------- -------- ----
3/2/94 10000 10000
3/31/94 9760 9569.11
6/30/94 9773.34 10057.82
9/30/94 10146.67 10067.63
12/30/94 9666.15 9965.09
3/31/95 9733.29 10150.54
6/30/95 10357.55 10224.17
9/30/95 10699.89 10650.7
12/30/95 11103.89 11082.14
3/30/96 11461.43 11402.31
6/30/96 11845.95 11582.47
9/30/96 11980.87 11568.12
Average Annual
Total Return
One Since
Year Inception
---- ---------
GE Int'l Equity 11.97% 7.26%
MSCI EAFE 8.62% 5.81%
4
<PAGE>
Schedule of Investments -- September 30, 1996
GE INTERNATIONAL EQUITY FUND
Europe 61.4%
Other Regions 3.7%
Japan 17.1%
Pacific Rim 14.0%
Cash & Other 3.8%
- --------------------------------------------------------------------------------
Number
of Shares Value
- --------------------------------------------------------------------------------
Common Stock -- 96.2%
Australia -- 3.7%
Brambles Industries Ltd. 106,377 $1,726,353
Burns Philip & Co. 585,153 833,815
F.H. Faulding & Co. Ltd. 34,333 236,732
2,796,900
Austria -- 3.5%
Bohler Uddeholm 2,410 192,513
Creditanstalt Bankverein 10,603 470,871
Flughafen Wien AG 5,018 264,425
OMV AG 3,553 357,218
VA Technologie AG 10,470 1,364,434
2,649,461
Denmark -- 1.7%
Den Danske Bank 13,459 980,933
ISS (Series B) 2,040 52,230
Tele Danmark AS (Series B) 5,370 254,811
1,287,974
Finland -- 0.7%
Metra AB 2,877 164,897
Valmet Corp. 22,076 363,651
528,548
France -- 10.0%
Alcatel Alsthom 6,743 568,498
Carrefour S.A 2,992 1,679,181
Coflexip ADR 19,198 417,556 (a)
Eaux (Cie Generale) 6,121 664,772
Lyonnaise Des Eaux S.A 154 13,774 (a)
Lyonnaise Des Eaux S.A 7,331 655,681
Technip 580 52,987
Thomson CSF 258 7,642
Total S.A. (Class B) 25,600 2,014,597
Usinor Sacilor 32,355 499,215
Valeo 17,070 941,485
7,515,388
Germany -- 9.7%
Deutsche Bank AG 3,726 175,453
Dresdner Bank AG 4,693 123,649
Gehe AG 15,746 1,051,865
Sap AG 7,205 1,210,349
SGL Carbon 10,430 1,215,888
Siemens AG 29,455 1,552,131
Veba AG 37,325 1,953,152
7,282,487
Hong Kong -- 3.7%
Consolidated Electric Power 119,100 251,815
Giordano International 633,000 556,627
Hopewell Holdings 826,000 467,315
HSBC Holdings 53,800 998,358
Television Broadcasts Ltd. ADR 145,000 539,086
2,813,201
Indonesia -- 1.3%
Astra International 311,500 610,127
Mulia Industrindo 140,000 140,120
PT Tambang Timah GDR 12,783 215,394 (b)
PT Tambang Timah GDR 330 5,560
971,201
Italy -- 2.7%
ARN Mondadori Edit 3,196 23,185
Edison SPA 60,295 375,644
ENI Spa 52,818 269,941
Gucci Group N.V. ADR 384 27,840
IMI 198 1,682
Istituto Mobiliare Italiano ADR 6,469 164,959 (a)
Sasib SPA 88,474 156,242
Telecom Italia Mobile 466,328 1,034,754
2,054,247
Japan -- 17.1%
Canon Inc. 72,000 1,412,903
Credit Saison Co. 46,600 1,114,892
DDI Corp. 215 1,735,798
Denso Corp. 39,000 870,161
Ito Yokado Co. 17,000 964,247
Izumi Co. 4,000 70,968
Murata Manufacturing Co. 32,000 1,141,219
Nintendo Co. 5,000 320,341
Nippon Express Co. 44,000 402,151
Omron Corp. 30,000 561,828
Rohm Co. 16,000 1,007,885
Secom Co. 22,000 1,389,785
Sega Enterprises 8,000 347,670
Suzuki Motor Corp. 107,000 1,303,943
Tokyo Steel Manufacturing 13,000 229,480
12,873,271
- ----------
See Notes to Schedule of Investments and Financial Statements
5
<PAGE>
GE International Equity Fund
- --------------------------------------------------------------------------------
Number
of Shares Value
- --------------------------------------------------------------------------------
Malaysia -- 0.7%
AMMB Holdings Berhad 23,000 $ 167,012
Telekom Malaysia 44,000 387,967
554,979
Mexico -- 1.4%
Grupo Carso S.A. de C.V. (Series A) 54,369 249,815
Grupo Carso S.A. de C.V. ADR 39,861 371,704
Grupo Financiero Bancomer S.A
ADR (Series B) 673 6,992 (a)
Grupo Financiero Bancomer S.A. ADR
(Series C) 26,063 250,856 (a,b)
Grupo Televisa S.A. De C.V. ADR 4,802 138,658 (a)
Invercorporacion S.A. de C.V 54,369 7,271 (a)
1,025,296
Netherlands -- 5.7%
IHC Caland N.V 20,163 1,060,715
ING Groep N.V 21,209 661,272
Nutricia Verenigde Bedrijven 3,528 465,539
Polygram N.V 15,766 881,872
Toolex Alpha N.V 719 16,178 (a)
Unilever N.V 1,540 242,864
Wolters Kluwer 7,355 924,582
4,253,022
New Zealand -- 0.4%
Carter Holt Harvey Ltd. 138,504 304,990
Panama -- 0.2%
Pan American Beverages Inc.
(Class A) 2,771 113,957
Peru -- 0.9%
Telefonica del Peru S.A. ADR
(Class B) 29,463 673,966
Philippines -- 1.6%
Metro Bank & Trust Co. 19,075 454,427
San Miguel Corp. 223,180 731,598
1,186,025
Portugal -- 1.2%
Banco Comercial Portugues ADR 31,825 385,878
BCO Comercial Portugues 42,678 515,435
901,313
Singapore -- 0.9%
Singapore Airlines Ltd. 64,000 645,363
South Africa -- 1.2%
Iscor Ltd. 1,040,905 686,059
Malbak 43,761 183,282
869,341
South Korea -- 1.1%
Korea Electric Power 26,033 860,413
Spain -- 1.7%
Argentaria S.A 3,721 154,076
Banco Popular (Regd.) 1,035 190,115
Empresa Nacional de Electric ADR 2,253 42,526
Repsol S.A 27,093 889,885
1,276,602
Sweden -- 4.9%
Astra AB (Series B) 15,960 656,299
Autoliv AB 31,695 1,367,916
Electrolux AB (Series B) 14,589 820,077
Kinnevik Investment (Series B) 12,783 333,719
Linjebuss (Series A) 12,382 137,335
LM Ericsson Telephone (Series B) 7,826 197,224
Netcom Systems AB (Series B) 12,783 143,712 (a)
3,656,282
Switzerland -- 9.3%
ABB AG 1,235 1,509,313
Danzas Holdings (Regd.) 327 341,276
Lindt & Spruengli AG 10 187,221
Nestle S.A. (Regd.) 1,075 1,197,299
Roche Holdings AG 133 978,534
Sandoz AG (Regd.) 1,471 1,764,919
Schw Ruckversicher (Regd.) 980 1,032,154
Valora Holding AG (Regd.) 94 16,326
7,027,042
Thailand -- 0.6%
Banpu Public Co. Ltd. 5,900 128,992
Siam Cement Co. Ltd. 4,200 171,098
Thai Farmers Bank 16,830 177,360
477,450
United Kingdom -- 10.3%
Airtours PLC 89,675 845,659
BPB Industries 56,154 328,715
Cordiant 311,314 548,174 (a)
EMI Group 14,322 299,262
Granada Group 69,929 937,458
Medeva 348,278 1,392,785
Railtrack Group 154,114 727,271
Reed International 44,401 821,443
Siebe 101,944 1,607,585
Thorn 38,097 216,752
Waste Management International
PLC ADR 1,155 5,206
7,730,310
Total Common Stock
(Cost $66,572,016) 72,329,029
- ----------
See Notes to Schedule of Investments and Financial Statements
6
<PAGE>
Schedule of Investments -- September 30, 1996
- --------------------------------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------------------------------
Convertible Bonds -- 0.0%
Sasib
9.25% 12/31/97
(Cost $43,124) ITL 65,000,000 $ 23,150
Total Investments in Securities
(Cost $66,615,140) 72,352,179
Short Term Investments -- 2.1%
Repurchase Agreement -- 2.1%
State Street Bank and Trust Co.
5.40% 10/01/96
(Cost $1,580,000) $ 1,580,000 1,580,000
(dated 09/30/96, proceeds $1,580,237,
collateralized by $1,613,528 United States
Treasury Note, 8.375%, 08/15/08)
Other Assets and Liabilities, net 1.7% 1,257,372
NET ASSETS -- 100% $75,189,551
- ----------
See Notes to Schedule of Investments and Financial Statements
7
<PAGE>
GE Global Equity Fund
- --------------------------------------------------------------------------------
Top Ten Largest Holdings
at September 30, 1996
Total S.A. 3.07%
Allied Signal Inc. 2.47%
First Data Corp. 2.32%
Colgate Palmolive Co. 2.32%
DDI Corp. 2.17%
Veba AG 2.14%
Telecom Italia Mobile 2.13%
Siebe 2.05%
Citicorp 2.03%
Sandoz AG (Regd.) 1.99%
- --------------------------------------------------------------------------------
Investment Profile
A mutual fund designed for investors who seek long-term growth of capital by
investing primarily in equity securities of global companies.
* Lipper Performance Comparison
Global Stock Peer Group
Based on 10/1/95 -- 9/30/96
total returns
Number of Funds
in peer group: 174
Peer group average
total return: 13.0%
Lipper categories
in peer group: Global, Global
Small Company
*See notes to performance for explanation of peer categories
See page 39 for Notes to Performance. Past performance is no guarantee of future
results.
Comparison of Change in Value of a $10,000 Investment
- --------------------------------------------------------------------------------
Class A Shares
w/o load w/load MSCI
-------- ------ ----
1/1/94 $ 10,000 $ 10,000 $ 10,000
3/94 9,989.33 9,514.83 10,060.53
Jun 30, 94 9,872.06 9,403.14 10,362.27
9/94 10,309.17 9,819.49 10,584.52
Dec 31, 94 9,771.67 9,307.51 10,507.72
3/95 9,979.69 9,505.66 10,999.19
Jun 30, 95 10,795.37 10,282.59 11,468.06
9/95 11,047.19 10,522.45 12,108.59
Dec 31, 95 11,099.2 10,571.99 12,694.07
Mar 30, 96 11,651.65 11,098.2 13,200.83
Jun 30, 96 12,081.33 11,507.47 13,583.25
9/96 12,282.23 11,698.82 13,763.66
Average Annual
Total Return
One Since
Year Inception
---- ---------
GE Global Equity 11.18% 7.76%
GE Global Equity w/load 5.90% 5.86%
MSCI World 13.66% 12.32%
- --------------------------------------------------------------------------------
Class B Shares
w/o load w/load MSCI
-------- ------ ----
12/22/93 $ 10,000 $ 10,000 $ 10,000
12/93 10,263.26 10,263.26 10,000
3/94 10,257.78 10,257.78 10,060.53
Jun 30, 94 10,137.42 10,137.42 10,362.27
9/94 10,569.61 10,569.61 10,584.52
Dec 31, 94 10,004.78 10,004.78 10,507.72
3/95 10,206.22 10,206.22 10,999.19
Jun 30, 95 11,023.16 11,023.16 11,468.06
9/95 11,269.36 11,269.36 12,108.59
Dec 31, 95 11,307.77 11,307.77 12,694.07
Mar 30, 96 11,860.62 11,860.62 13,200.83
Jun 30, 96 12,276.68 12,276.68 13,583.25
9/96 12,464.76 12,264.76 13,63.66
Average Annual
Total Return
One Since
Year Inception
---- ---------
GE Global Equity 10.61% 8.25%
GE Global Equity w/load 6.61% 7.63%
MSCI World 13.66% 12.32%
- --------------------------------------------------------------------------------
Class C Shares
w/o load MSCI
-------- ----
2/22/93 $10,000 $10,000
10,000 10,000
10,405.58 10,578.82
10,585.11 11,218.33
9/93 11,409.58 11,744.47
12,608.53 11,934.23
12,615.25 12,006.47
12,480.83 12,366.58
9/94 13,038.67 12,631.81
12,370.65 12,540.16
12,646.61 13,126.68
13,681.53 13,686.25
9/95 14,012.7 14,450.67
14,087.43 15,137.47
14,798.5 15,754.18
15,347.65 16,210.57
9/96 15,615.16 16,425.88
Average Annual
Total Return
One Since
Year Inception
---- ---------
GE Global Equity 11.44% 13.14%
MSCI World 13.66% 14.83%
- --------------------------------------------------------------------------------
Class D Shares
w/o load MSCI
-------- ----
11/29/93 $10,000 $10,000
12/93 10,855.63 10,486.97
3/94 10,861.41 10,550.45
6/94 10,757.37 10,866.89
9/94 11,242.92 11,099.95
12/94 10,670.15 11,019.42
3/95 10,919.95 11,534.82
6/95 11,824 12,026.53
9/95 12,115.44 12,698.25
12/95 12,184.04 13,301.75
3/96 12,810.58 13,843.68
6/96 13,297.2 14,244.72
9/96 13,534.42 14,433.92
Average Annual
Total Return
One Since
Year Inception
---- ---------
GE Global Equity 11.71% 11.25%
MSCI World 13.66% 13.79%
8
<PAGE>
Schedule of Investments -- September 30, 1996
GE GLOBAL EQUITY FUND
GE Global Equity Fund
Europe 43.2%
United States 23.9%
Other Regions 6.6%
Japan 11.0%
Pacific Rim 9.8%
Cash & Other 5.5%
- --------------------------------------------------------------------------------
Number
of Shares Value
- --------------------------------------------------------------------------------
Common Stock -- 94.5%
Australia -- 0.8%
Burns Philip & Co. 250,506 $ 356,959
Austria -- 3.5%
Creditanstalt Bankverein 5,474 243,096
Flughafen Wien AG 3,074 161,985
OMV AG 3,514 353,298
VA Technologie AG 5,946 774,873
1,533,252
Brazil -- 1.4%
Brasmotor S.A 1,221,161 443,701
Ceval Alimentos S.A 16,590,712 152,730
596,431
Finland -- 0.9%
Valmet Corp. 22,801 375,594
France -- 8.7%
Carrefour S.A 1,404 787,958
Coflexip ADR 29,272 636,666 (a)
Technip 4,371 399,318
Total S.A. (Class B) 16,931 1,332,388
Valeo 11,648 642,438
3,798,768
Germany -- 4.6%
Gehe AG 9,199 614,512
Sap AG 2,817 473,220
Veba AG 17,769 929,821
2,017,553
Hong Kong -- 4.6%
Consolidated Electric Power 231,500 489,464
Giordano International 602,000 529,368
HSBC Holdings 24,400 452,787
Television Broadcasts Ltd. ADR 143,000 531,650
2,003,269
Indonesia -- 1.1%
Astra International 220,000 430,909
Steady Safe 81,200 52,432
483,341
Italy -- 3.3%
IMI 27,028 229,603
Industrie Natuzzi Spa ADR 4,348 202,182
Istituto Mobiliare Italiano ADR 2,391 60,970
Telecom Italia Mobile 416,834 924,930
1,417,685
Japan -- 11.0%
Canon Inc. 31,000 608,333
Credit Saison Co. 21,700 519,167
DDI Corp. 117 944,597
Ito Yokado Co. 7,000 397,043
Murata Manufacturing Co. 10,000 356,631
Omron Corp. 16,000 299,641
Rohm Co. 6,000 377,957
Secom Co. 9,000 568,548
Sega Enterprises 4,000 173,835
Suzuki Motor Corp. 44,000 536,201
4,781,953
Malaysia -- 0.9%
AMMB Holdings Berhad 51,200 371,784
Mexico -- 2.2%
Grupo Carso S.A. de C.V. (Series A) 62,659 287,906
Grupo Carso S.A. de C.V. ADR 16,253 151,559
Grupo Financiero Bancomer S.A
ADR (Series C) 25,404 244,514 (a,b)
Grupo Televisa S.A. De C.V. ADR 9,356 270,154 (a)
Invercorporacion S.A. de C.V 62,659 8,380 (a)
962,513
Netherlands -- 2.7%
ING Groep N.V 21,268 663,112
Nutricia Verenigde Bedrijven 2,296 302,970
Polygram N.V 3,476 194,430
1,160,512
Norway -- 1.2%
Petroleum Geo Services 20,362 544,656 (a)
Panama -- 0.9%
Banco Latinoamericano de
Exportaciones S.A. (Class E) 3,528 198,009
Pan American Beverages Inc.
(Class A) 4,943 203,281
401,290
- ----------
See Notes to Schedule of Investments and Financial Statements
9
<PAGE>
GE Global Equity Fund
- --------------------------------------------------------------------------------
Number
of Shares Value
- --------------------------------------------------------------------------------
Peru -- 0.9%
Telefonica del Peru S.A
ADR (Class B) 17,742 $ 405,848
Philippines -- 1.7%
Pilipino Telephone 142,400 195,403 (a)
San Miguel Corp. 163,070 534,554
729,957
South Africa -- 1.1%
Iscor Ltd. 700,854 461,932
Spain -- 0.9%
Repsol S.A 12,122 398,154
Sweden -- 1.7%
Autoliv AB 16,988 733,181
Switzerland -- 7.1%
ABB AG 529 646,499
Nestle S.A. (Regd.) 578 643,757
Roche Holdings AG 56 412,014
Sandoz AG (Regd.) 721 865,062
Schw Ruckversicher (Regd.) 366 385,478
Tag Heuer 671 131,506 (a)
3,084,316
Thailand -- 0.8%
Thai Farmers Bank 31,220 329,006
United Kingdom -- 8.6%
BPB Industries 79,847 467,409
EMI 14,935 312,071
Granada Group 32,326 433,358
Medeva 133,938 535,626
Reed International 44,840 829,565
Siebe 56,387 889,183
Thorn 50,108 285,088
3,752,300
United States -- 23.9%
Airgas Inc. 33,686 854,782 (a)
Allied Signal Inc. 16,294 1,073,367
Avery Dennison Corp. 3,858 214,119
Chrysler Corp. 9,942 284,590
Citicorp 9,721 880,966
Colgate Palmolive Co. 11,582 1,006,186
Ecolab Inc. 22,279 751,916
First Data Corp. 12,334 1,006,763
General Nutrition Cos. Inc. 6,998 122,902 (a)
Intel Corp. 4,500 429,469
Medaphis Corp. 8,872 133,080 (a)
Motorola Inc. 11,600 598,850
Sears Roebuck & Co. 5,792 259,192
Sensormatic Electronics Corp. 22,801 407,568
Sunrise Medical Inc. 11,478 182,213 (a)
Toys `R Us 18,077 526,493 (a)
Travelers Group Inc. 11,909 585,030
Tyco International Ltd. 5,537 238,783
Ucar International Inc. 16,929 685,624 (a)
Zebra Technologies Corp. (Class A) 6,027 154,442 (a)
10,396,335
Total Investments in Securities
(Cost $35,615,016) 41,096,589
Principal
Amount Value
- --------------------------------------------------------------------------------
Short Term Investments -- 4.8%
- --------------------------------------------------------------------------------
U.S. Government Agency -- 1.2%
Federal Home Loan Mortgage Corp.
5.23% 10/15/96 $500,000 $498,983(d)
Repurchase Agreement -- 3.6%
State Street Bank and Trust Co.
5.40% 10/01/96
(Cost $1,580,000) 1,580,000 1,580,000
(dated 09/30/96, proceeds $1,580,237,
collateralized by $1,613,528 United States
Treasury Note, 8.375%, 08/15/08)
Total Short Term Investments
(Cost $2,078,983) 2,078,983
Other Assets and Liabilities, net 0.7% 283,783
NET ASSETS --- 100% $43,459,355
- ----------
See Notes to Schedule of Investments and Financial Statements
10
<PAGE>
GE U.S. Equity Fund
Q&A
Gene Bolton is responsible for the overall management of the U.S. equity
operation at GE Investments with total assets of over $23 billion. His
responsibilities include overseeing the portfolio management team of the GE U.S.
Equity Fund listed on page 60. Gene joined GE in 1964. After completing GE's
Financial Management Program he held a number of financial and strategic
planning positions in the U.S. and Europe. Joining GE Investments in 1984 as
Chief Financial Officer, he moved to equities as a Portfolio Manager in 1986 and
was named to his present position in 1991. Gene is a Trustee of the GE Pension
Trust and GE's employee savings program, as well as Chairman of the Asset
Allocation Committee of GE Investments. He also serves as a Trustee of the
Investment Management Workshop, sponsored by the Association for Investment
Management and Research. Gene is a graduate of Mundelein College with a B.A. in
Business Management.
Q. How did the GE U.S. Equity Fund's industry benchmark and Lipper peers
perform for the fiscal year ended September 30, 1996?
A. The S&P 500 returned 20.3% for the twelve months ended September 30, 1996.
Our Lipper peer group of 546 Growth & Income Funds had an average return of
17.4% for the same period. Refer to the following page to see how your
class of shares performed compared to these benchmarks.
Q. What drove the Fund's performance?
A. The GE U.S. Equity Fund rose strongly in the twelve months ended September
30, 1996, outperforming the average of our Lipper peer group of Growth and
Income Funds and trailing the S&P 500 modestly. Our performance was helped
by our overweighting in Capital Goods and our underweighting in Utilities.
Capital Goods was the best performing sector in the past year while
Utilities were weak performers due to concerns of rising competition from
deregulation. Our performance versus the S&P 500 was hurt by an
underweighting in the Consumer- Stable sector, particularly in beverages,
as well as the Technology sector. In both cases we believe valuations of
some of the leadership stocks are excessive.
Q. What has your investment strategy been?
A. We employ what is known as a "bottom up" strategy. This means we build our
portfolio company by company, buying stocks with attractive growth
prospects and reasonable valuations. We do not spend a lot of time trying
to forecast the economy, or selecting sectors or industries that might do
well in a given economic scenario, as might be done in a "top down"
strategy. Rather we place heavy emphasis on research, taking a very
fundamental approach to investing. We make a concerted effort to understand
each company that we invest in, including growth potential, earnings
drivers, and the strength of the management team. Industry and Sector
weightings are a fallout from this fundamental research process and reflect
attractive stocks rather than a view as to how the sector will do. Thus our
portfolio is made up of a collection of investments we find attractive that
can stand on their own, not depending on an economic forecast to make them
attractive over the long term.
Q. Which investments stand out?
A. We continue to be overweighted in financial stocks such as insurance
companies and banks. The reason is that there are many financial stocks
that offer both strong growth characteristics and attractive valuations.
Because financial stocks are often complicated businesses that are not
easily understood, they frequently sell at valuation levels lower than
might be expected considering their past and projected growth rates. We use
our fundamental research approach to understand the complexities of the
financial industry and believe we are able to sort out the attractive,
growing stocks from the ones that just offer a low valuation.
Q. What is the outlook for the Fund?
A. We expect volatility to increase in the stock market over the next six to
twelve months as a result of slower earnings growth and high valuations. We
believe the GE U.S. Equity Fund is well positioned for good relative
performance in this environment.
11
<PAGE>
GE U.S. Equity Fund
Top Ten Largest Holdings
at September 30, 1996
- --------------------------------------------------------------------------------
AT&T 1.68%
Exxon Corp. 1.65%
IBM 1.55%
Federal National Mtg. Assn. 1.51%
Allied Signal Inc. 1.51%
Bristol-Myers Squibb Co. 1.49%
Intel Corp. 1.43%
Pepsico Inc. 1.41%
Merck & Co. Inc. 1.36%
Travelers Group Inc. 1.35%
Investment Profile
A mutual fund designed for investors who seek long-term growth of capital by
primarily investing in a diversified portfolio of growth and value stocks and
other equity securities of U.S. companies.
* Lipper Performance Comparison
Growth and Income Peer Group
Based on 10/1/95 -- 9/30/96
total returns
Number of Funds in peer group: 546
Peer group average total return: 17.4%
Lipper categories in peer group: Growth & Income,
S&P 500 Index
*See notes to performance for explanation of peer categories
See page 39 for Notes to Performance. Past performance is no guarantee of future
results.
Comparison of Change in Value of a $10,000 Investment
- --------------------------------------------------------------------------------
Class A Shares
w/o load w/load S&P
-------- ------ ---
1/1/94 10,000 10,000 10,000
3/94 9,526.45 9,073.94 9,618.15
Jun 30, 94 9,544.89 9,091.51 9,657.88
9/94 9,913.9 9,442.99 10,132.9
Dec 31, 94 9,765.97 9,302.09 10,129.82
3/95 10,668.97 10,162.19 11,116.13
Jun 30, 95 11,677.1 11,122.44 12,175.41
9/95 12,542.98 11,947.19 13,145.54
Dec 31, 95 13,192.46 12,565.81 13,927.96
Mar 30, 96 14,032.09 13,365.57 14,685.15
Jun 30, 96 14,528.24 13,838.15 15,348.14
9/96 14,846.29 14,141.09 15,818.4
Average Annual
Total Return
One Since
Year Inception
---- ---------
GE U.S. Equity 18.36% 15.45%
GE U.S. Equity w/load 12.74% 13.43%
S&P 500 20.33% 18.15%
- --------------------------------------------------------------------------------
Class B Shares
w/o load w/load S&P
-------- ------ ---
12/22/93 $ 10,000 $ 10,000 $ 10,000
12/93 10,133.91 10,133.91 10,000
3/94 9,647.78 96,47.78 9,618.15
Jun 30, 94 9,641.56 9,641.56 9,657.88
9/94 9,990.57 9,990.57 10,132.9
Dec 31, 94 9,835.35 9,835.35 10,129.82
3/95 10,728.9 10,728.9 11,116.13
Jun 30, 95 11,724.56 11,724.56 12,175.41
9/95 12,579.81 12,579.81 13,145.54
Dec 31, 95 13,215.1 13,215.1 13,927.96
Mar 30, 96 14,022.58 14,022.58 14,685.15
Jun 30, 96 14,514.96 14,514.96 15,348.14
9/96 14,816.95 14,616.95 15,818.4
Average Annual
Total Return
One Since
Year Inception
---- ---------
GE U.S. Equity 17.78% 15.19%
GE U.S. Equity w/load 13.78% 14.64%
S&P 500 20.33% 18.15%
- --------------------------------------------------------------------------------
Class C Shares
w/o load S&P
-------- ---
2/22/93 $10,000 $10,000
10,519.58 10,216.1
10,681.52 10,268.05
9/93 11,032.38 10,530.86
11,218.84 10,775.93
10,701.37 10,364.46
10,715.17 10,407.27
9/94 11,129.16 10,919.15
10,973.84 10,915.83
11,991.38 11,978.67
13,136.11 13,120.14
9/95 14,118.31 14,165.55
14,865.82 15,008.68
15,797.66 15,824.63
16,387.34 16,539.05
9/96 16,758.61 17,045.81
Average Annual
Total Return
One Since
Year Inception
---- ---------
GE U.S. Equity 18.70% 15.38%
S&P 500 20.33% 15.92%
- --------------------------------------------------------------------------------
Class D Shares
w/o load S&P
-------- ---
11/29/93 $10,000 $10,000
12/93 10,158.53 10,123.4
3/94 9,696.21 9,736.84
6/94 9,714.95 9,777.06
9/94 10,096.06 10,257.94
12/94 9,964.02 10,254.82
3/95 10,889.12 11,253.31
6/95 11,936.28 12,325.65
9/95 12,835.67 13,307.76
12/95 13,520.19 14,099.83
3/96 14,388.82 14,866.37
6/96 14,925.9 15,537.53
9/96 15,270.71 16,013.6
Average Annual
Total Return
One Since
Year Inception
---- ---------
GE U.S. Equity 18.97% 16.08%
S&P 500 20.33% 18.03%
12
<PAGE>
Schedule of Investments -- September 30, 1996
GE U.S. EQUITY FUND
U.S. Equity Fund
Energy & Basic Material 14.0%
Consumer 16.9%
Capital Goods 12.1%
Healthcare 11.0%
Financial Services 15.5%
Retail Trade 4.6%
Technology 9.2%
Transportation 1.8%
Utilities 8.5%
Cash and Other 6.4%
- --------------------------------------------------------------------------------
Number
of Shares Value
- --------------------------------------------------------------------------------
Common Stock -- 93.6%
Basic Materials -- 4.5%
Air Products & Chemicals Inc. 15,482 $ 901,826
Airgas Inc. 6,376 161,791 (a)
Avery Dennison Corp. 3,054 169,497
Barrick Gold Corp. 11,454 287,782
Du Pont de Nemours (E.I.) 34,648 3,057,686
Eastman Chemical Co. 4,582 267,474
FMC Corp. 4,582 311,003 (a)
Freeport McMoran Copper & Gold
(Class A) 14,127 416,746
Grace (W.R.) & Co. 2,642 140,026
Hoechst AG 2,291 83,544
IMC Global Inc. 8,113 317,421
International Paper Co. 3,971 168,767
Lubrizol Corp. 3,052 87,745
Mead Corp. 15,558 912,088
Millenium Chemical Inc. 1,050 26,906
Morton International Inc. 22,213 882,967
Newmont Mining Corp. 13,936 658,476
Olin Corp. 1,336 112,224
Placer Dome Inc. 2,291 54,125
PPG Industries Inc. 1,527 83,031
Rayonier Inc. 4,855 192,986
Santa Fe Pacific Gold Corp. 8,401 105,013
Weyerhaeuser Co. 25,773 1,188,780
10,587,904
Capital Goods -- 12.1%
ABB AG 611 746,713
Allied Signal Inc. 54,097 3,563,640
AMP Inc. 23,744 920,080
Boeing Co. 6,372 602,154
Browning-Ferris Industries Inc. 12,966 324,150
Caterpillar Inc. 1,527 115,098
Cooper Industries Inc. 6,094 263,565
Corning Inc. 4,103 160,017
Deere & Co. 40,008 1,680,336
Dover Corp. 35,313 1,686,196
EG & G Inc. 12,199 218,057
Emerson Electric Co. 34,366 3,097,236
General Dynamics Corp. 3,055 210,413
General Motors Corp. (Class H) 1,717 99,157
General Signal Corp. 11,071 487,124
Grainger (W.W.) Inc. 764 53,671
Hanson PLC ADR 32,644 403,969
Hubbell Inc. (Class B) 59,667 2,207,679
Ingersoll Rand Co. 9,604 456,190
Lockheed Martin Corp. 15,749 1,419,379
Martin Marietta Materials Inc. 2,482 53,053
Masco Corp. 10,692 320,760
McDonnell Douglas Corp. 17,181 902,002
Minnesota Mining & Manufacturing 12,103 845,697
Molex Inc. (Class A) 6,109 206,179
Parker Hannifin Corp. 1,527 64,134
Philips Electronics N.V 5,344 191,716
Raytheon Co. 5,535 307,884
Rockwell International Corp. 4,963 279,789
Sherwin Williams Co. 4,246 196,908
Stewart & Stevenson Services Inc. 6,037 130,550
Tecumseh Products Co. (Class A) 3,167 171,810
Tenneco Inc. 10,117 507,115
Textron Inc. 25,696 2,184,160
Timken Co. 7,636 299,713
Tyco International Ltd. 2,902 125,149
Ucar International Inc. 4,093 165,767 (a)
United Technologies Corp. 13,714 1,647,394
Waste Management International PLC ADR 4,349 39,141 (a)
Wheelabrator Technologies Inc. 7,636 116,449
WMX Technologies Inc. 33,789 1,110,813
28,581,007
Consumer - Cyclical -- 7.9%
ADT Ltd. 7,644 146,192 (a)
American Greetings Corp. (Class A) 7,895 225,994
American Medical Response 3,436 123,696 (a)
Armstrong World Industries Inc. 8,017 500,060
Carmike Cinemas Inc. 645 14,916 (a)
Carnival Corp. (Class A) 5,918 183,458
Catalina Marketing Corp. 2,290 121,943 (a)
Circus Circus Enterprises Inc. 15,041 532,075 (a)
Comcast Corp. (Class A) 38,574 593,075
CUC International Inc. 725 28,909 (a)
Disney (Walt) Co. 20,838 1,320,608
Donnelley (R.R.) & Sons Co. 15,842 510,905
Dun & Bradstreet Corp. 9,354 557,732
Eastman Kodak Co. 29,429 2,310,176
Eaton Corp. 4,391 265,107
Ecolab Inc. 4,055 136,856
Flightsafety International Inc. 3,627 161,855
Ford Motor Co. 48,372 1,511,625
Gannett Inc. 18,758 1,320,094
General Motors Corp. 23,926 1,148,448
Goodyear Tire & Rubber Co. 19,091 880,572
- ----------
See Notes to Schedule of Investments and Financial Statements
13
<PAGE>
GE U.S. Equity Fund
- --------------------------------------------------------------------------------
Number
of Shares Value
- --------------------------------------------------------------------------------
Harman International Industries Inc. 2,863 $ 139,571
International Cabletel Inc. 32,242 826,201 (a)
Interpublic Group Cos. Inc. 11,889 561,755
ITT Corp. (new) 1,336 58,283 (a)
ITT Industries Inc. 13,708 330,706
Knight Ridder Inc. 3,154 116,698
McDonalds Corp. 26,703 1,265,055
Merrill Lynch & Co. Inc. 5,755 115,100
Metromedia International Group Inc. 3,627 38,537 (a)
National Service Industries Inc. 10,762 376,670
Readers Digest Association Inc. (Class A) 1,336 54,609
Rollins Inc. 764 15,376
Rubbermaid Inc. 3,028 74,186
Scholastic Corp. 2,291 166,098 (a)
Stanhome Inc. 6,464 186,648
Tele-Communications Inc. (Series A) 26,917 402,073 (a)
Tele-Communications Inc. Liberty
Media Group (Series A) 22,623 647,583 (a)
Time Warner Inc. 15,242 588,722
Viacom Inc. (Class B) 5,345 189,748 (a)
18,747,915
Consumer - Stable -- 9.0%
Anheuser Busch Cos. Inc. 73,994 2,784,024
Archer-Daniels Midland Co. 19,042 366,559
Avon Products Inc. 10,309 511,584
Cardinal Health Inc. 2,673 220,857
Coca Cola Co. 1,336 67,969
Colgate Palmolive Co. 14,338 1,245,614
ConAgra Inc. 10,450 514,662
CPC International Inc. 11,454 857,618
Crown Cork & Seal Inc. 2,290 105,626
Dole Food Inc. 3,638 152,796
Duracell International Inc. 2,100 134,663
General Mills Inc. 11,452 691,414
Gillette Co. 2,073 149,515
International Flavours 5,154 224,843
Kellogg Co. 5,249 361,525
Kimberly Clark Corp. 22,481 1,981,138
Nestle S.A. (Regd.) 408 454,417
Owens Illinois Inc. 11,447 200,323 (a)
Pepsico Inc. 117,604 3,322,313
Philip Morris Cos. Inc. 33,556 3,011,651
Procter & Gamble Co. 30,136 2,938,260
Quilmes Industrial S.A. ADR 2,864 29,714
Ralston Purina Co. 3,818 261,533
Sara Lee Corp. 7,571 270,663
Sysco Corp. 8,576 288,368
Tambrands Inc. 2,768 116,602
21,264,251
Energy -- 9.5%
Amerada Hess Corp. 3,055 161,533
Amoco Corp. 30,239 2,131,849
Anadarko Petroleum Co. 8,556 478,066
Atlantic Richfield Co. 2,214 282,285
Baker Hughes Inc. 19,285 585,782
British Petroleum PLC ADR 2,098 262,250
Burlington Resources Inc. 27,104 1,202,740
Diamond Offshore Drilling Inc. 2,482 136,510 (a)
Dresser Industries Inc. 7,430 221,043
Exxon Corp. 46,710 3,888,607
Halliburton Co. 6,058 312,744
Horsham Corp. 4,773 77,561
Louisiana Land & Exploration Co. 3,628 190,924
Mobil Corp. 13,401 1,551,166
Nabors Industries Inc. 16,387 223,273 (a)
Occidental Petroleum Corp. 13,302 310,934
Petroleum Geo Services ADR 382 10,410 (a)
Phillips Petroleum Co. 8,442 360,896
Royal Dutch Petroleum Co. ADR 19,995 3,121,719
Santa Fe Energy Resources Inc. 5,558 79,202 (a)
Schlumberger Ltd. 32,055 2,708,647
Texaco Inc. 24,531 2,256,852
Tosco Corp. 4,773 261,918
Total S.A. ADR 10,182 398,371
Unocal Corp. 27,085 975,060
USX Marathon Group 14,203 307,140
22,497,482
Financial -- 10.1%
American Express Co. 34,240 1,583,600
Bank of Boston Corp. 14,915 863,206
Bank of New York Inc. 18,326 538,326
BankAmerica Corp. 7,628 626,449
Beneficial Corp. 15,009 863,017
Boatmen's Bancshares Inc. 11,454 639,992
Camden Property Trust 1,908 48,893
Chase Manhattan Corp. 9,258 741,797
Citicorp 30,391 2,754,184
CMAC Investment Corp. 3,864 245,364
Countrywide Credit Industries 8,590 220,119
Dean Witter Discover & Co. 23,290 1,280,950
Dime Bancorp Inc. (new) 8,209 109,795 (a)
Edwards A G Inc. 5,842 170,148
Federal National Mortgage Assoc 102,475 3,573,816
First Chicago Corp. 3,818 172,765
Manufactured Home Communities Inc. 1,633 31,435
Mellon Bank Corp. 10,774 638,359
Merrill Lynch & Co. Inc. 3,436 225,488
Morgan (J.P.) & Co. Inc. 14,355 1,275,801
Morgan Stanley Group Inc. 4,000 199,000
NationsBank Corp. 4,437 385,464
Oasis Residential Inc. 2,577 56,372
Simon DeBartolo Group Inc. 2,838 72,369
Standard Federal Bancorporation 4,963 227,057
State Street Boston Corp. 7,636 438,116
T. Rowe Price & Associates 4,581 148,883
Transamerica Corp. 4,333 302,768
Travelers Group Inc. 64,785 3,182,563
United States Bancorp 11,072 437,344
Wells Fargo & Co. 6,758 1,757,080
23,810,520
- ----------
See Notes to Schedule of Investments and Financial Statements
14
<PAGE>
GE U.S. Equity Fund
- --------------------------------------------------------------------------------
Number
of Shares Value
- --------------------------------------------------------------------------------
Healthcare -- 11.0%
Abbott Laboratories 48,847 $2,405,715
Allergan Inc. 34,198 1,303,799
American Home Products Corp. 45,346 2,890,807
Arrow International Inc. 8,323 287,144
Baxter International Inc. 18,040 843,370
Bristol-Myers Squibb Co. 36,400 3,508,050
Columbia HCA Healthcare Corp. 954 54,259
Dentsply International Inc. 2,172 96,654
Eli Lilly & Co. 23,519 1,516,975
FHP International Corp. 8,206 306,699 (a)
Fresenius Medical Care Inc. AG ADR 96 2,225
Johnson & Johnson 55,132 2,825,515
Lincare Holdings Inc. 2,291 91,640 (a)
Living Centers of America Inc. 3,816 95,400 (a)
Merck & Co. Inc. 45,793 3,222,682
Pfizer Inc. 25,487 2,016,659
Pharmacia & Upjohn Inc. 10,695 441,169
Scherer (R.P.) Corp. Delaware 6,729 328,039 (a)
Schering Plough Corp. 24,169 1,486,393
Smithkline Beecham PLC ADR 33,071 2,013,197
St. Jude Medical Inc. 2,775 112,041 (a)
Watson Pharmaceuticals Inc. 1,146 42,975
25,891,407
Insurance -- 5.4%
American International Group Inc. 28,982 2,919,936
Chubb Corp. 4,772 219,512
General Reinsurance Corp. 7,834 1,110,470
ITT Hartford Group Inc. 10,538 621,742
Lincoln National Corp. 21,782 955,685
Loews Corp. 21,571 1,669,056
Marsh & McLennan Cos 9,927 964,160
Provident Cos. Inc. 20,620 773,250
Providian Corp. 18,399 791,157
Reliastar Financial Corp. 5,903 280,393
St. Paul Cos. Inc. 9,372 520,146
TIG Holdings Inc. 49,299 1,478,970
UNUM Corp. 5,441 348,904
12,653,381
Retail Trade -- 4.6%
Albertsons Inc. 2,749 115,802
American Stores Co. 19,033 761,320
Arbor Drugs Inc. 11,454 249,125
Charming Shoppes Inc. 20,902 125,412
Circuit City Stores Inc. 7,635 275,814
Dayton Hudson Corp. 9,162 302,346
Eckerd Jack Corp. 4,963 138,964 (a)
Federated Department Stores Inc. 27,199 911,166 (a)
General Nutrition Cos. Inc. 3,628 63,717 (a)
Home Depot Inc. 18,903 1,075,108
Lowes Cos. Inc. 3,818 156,061
May Department Stores Co. 4,200 204,225
Melville Corp. 5,154 227,420
Office Max Inc. 3,245 45,430 (a)
Penney J C Inc. 3,436 185,974
Price Costco Inc. 19,296 395,568 (a)
Sears Roebuck & Co. 46,389 2,075,908
Toys `R Us 23,099 672,758 (a)
Wal Mart Stores Inc. 106,985 2,821,729
10,803,847
Software & Services -- 3.0%
Automatic Data Processing Inc. 26,700 1,164,787
Computer Associates International Inc. 22,233 1,328,422
Equifax Inc. 55,933 1,475,233
First Data Corp. 18,899 1,542,631
Intuit Inc. 573 18,050
Microsoft Corp. 1,814 239,221 (a)
Reuters Holdings PLC ADR (Class B) 18,516 1,282,233
7,050,577
Technology -- 6.2%
3Com Corp. 7,446 447,225 (a)
Amdahl Corp. 7,411 69,941 (a)
Applied Materials Inc. 9,488 262,106 (a)
Cisco Systems Inc. 10,500 651,656
DSC Communications Corp. 3,913 98,314
Hewlett Packard Co. 63,248 3,083,340
Intel Corp. 35,319 3,370,757
International Business Machines 29,478 3,670,011
Motorola Inc. 15,554 802,975
Northern Telecom Ltd. 8,210 474,128
Perkin Elmer Corp. 4,646 268,887
Pitney Bowes Inc. 4,314 227,024
Sensormatic Electronics Corp. 764 13,657
Varian Associates Inc. 20,713 994,224
Wallace Computer Series Inc. 2,748 77,631
Xerox Corp. 4,964 266,195
14,778,071
Transportation -- 1.8%
America West Airlines Inc. (Class B) 3,436 40,373 (a)
AMR Corp. 2,115 168,407 (a)
Burlington Northern Santa Fe 13,459 1,135,603
Canadian Pacific Ltd. 33,637 777,856
Continental Airlines Inc. (Class B) 3,436 76,881 (a)
CSX Corp. 11,309 571,104
Delta Air Lines Inc. 3,817 274,824
Pittston Brinks Group 4,200 131,775
Union Pacific Corp. 15,424 1,129,808
4,306,631
Utilities -- 8.5%
Airtouch Communications Inc. 49,911 1,378,791 (a)
Allegheny Power Systems Inc. 5,728 166,112
American Electric Power Inc. 7,636 310,213
American Telephone & Telegraph 76,010 3,971,522
Bellsouth Corp. 29,605 1,095,385
CMS Energy Corp. 7,300 219,913
Dominion Resources Inc. 14,127 533,294
Duke Power Co. 13,317 620,905
Eastern Enterprises 8,018 302,680
Enron Corp. 1,145 46,659
- ----------
See Notes to Schedule of Investments and Financial Statements
15
<PAGE>
GE U.S. Equity Fund
- --------------------------------------------------------------------------------
Number
of Shares Value
- --------------------------------------------------------------------------------
Enserch Corp. 15,173 $ 316,736
Florida Progress Corp. 7,704 261,936
FPL Group Inc. 16,593 717,647
Frontier Corp. 6,491 172,823
GTE Corp. 73,331 2,823,243
MCI Communications Corp. 43,990 1,127,244
Niagara Mohawk Power Corp. 15,252 122,016
NIPSCO Industries Inc. 4,582 163,807
NYNEX Corp. 14,730 640,755
Pacificorp 38,559 795,279
Pinnacle West Capital Corp. 15,325 454,003
Portland General Corp. 3,053 117,159
Public Service Co. Colorado 8,400 298,200
SBC Communications Inc. 28,254 1,359,724
Scana Corp. 4,066 106,733
Sonat Inc. 12,599 557,506
Southern Co. 41,234 932,919
Texas Utilities Co. 5,727 226,932
U.S. West Inc. 11,847 352,448
20,192,584
Total Common Stock
(Cost $182,584,064) 221,165,577
Principal
Amount Value
- --------------------------------------------------------------------------------
Convertible Bonds -- 0.3%
- --------------------------------------------------------------------------------
ADT Operations Inc.
3.81% 07/06/10 $217,000 129,115 (d)
Charming Shoppes Inc.
7.50% 07/15/06 106,000 112,360
Continental Airlines Inc.
6.75% 04/15/06 172,000 164,260 (b)
Federated Department Stores Inc.
5.00% 10/01/03 80,000 89,400
Republic of Italy
5.00% 06/28/01 170,000 170,425
Valhi Inc.
7.67% 10/20/07 126,000 54,810 (d)
Total Convertible Bonds
(Cost $697,902) 720,370
- --------------------------------------------------------------------------------
Number
of Shares Value
- --------------------------------------------------------------------------------
Preferred Stock -- 0.6%
- --------------------------------------------------------------------------------
Airtouch Communications
(Class B), 6.00% 3,454 99,734
Airtouch Communications
(Class C), 4.25% 2,218 105,632
BCP International Ltd.
(Class A), 8.00% 3,808 188,972
Continental Airlines
Finance Trust, 8.50% 3,436 188,980 (b)
Fresenius National Medical
Care Inc. AG 2,642 502
International Paper
Capital Trust, 5.25% 3,577 169,907
Jefferson Pilot Corp., 7.25% 565 47,601
Occidental Petroleum Corp., 7.75% 7,323 411,919 (b)
Santa Fe Energy Resources
Inc. (Series A), 8.25% 3,752 86,296
St. Paul Capital LLC, 6.00% 508 27,305
Unocal Capital Trust, 6.25% 1,580 82,753 (a)
Total Preferred Stock
(Cost $1,363,882) 1,409,601
Total Investments in Securities
(Cost $184,645,848) 223,295,548
Principal
Amount Value
- --------------------------------------------------------------------------------
Short Term Investments -- 4.8%
- --------------------------------------------------------------------------------
Time Deposit -- 0.2%
State Street Cayman Islands
5.50% 10/01/96 $485,000 485,000
Repurchase Agreement -- 4.6%
State Street Bank and Trust Co.
5.40% 10/01/96
(Cost $10,880,000) 10,880,000 10,880,000
(dated 09/30/96, proceeds $10,881,632,
collateralized by $11,101,292 United
States Treasury Note, 8.375%, 08/15/08)
Total Short Term Investments
(Cost $11,365,000) 11,365,000
Other Assets and Liabilities, net 0.7% 1,561,472
NET ASSETS -- 100% $236,222,020
Other Information
- --------------------------------------------------------------------------------
The GE U.S. Equity Fund had the following long Futures Contracts open at
September 30, 1996:
Number
Expiration of Underlying Unrealized
Description Date Contracts Face Value Gain
- --------------------------------------------------------------------------------
S&P 500 Dec. 1996 20 $6,914,000 $119,100
- ----------
See Notes to Schedule of Investments and Financial Statements
16
<PAGE>
GE Strategic Investment Fund
Q&A
David Carlson manages pension and mutual fund portfolios with total assets of
over $2 billion. His responsibilities include managing Elfun Trusts and the U.S.
equity portions of the Elfun Diversified and the GE Strategic Investment Funds.
Dave also manages a portfolio for the GE Pension Trust. Dave joined GE in 1980
on the Financial Management Program. In 1982, he joined GE Investments as a
Security Analyst responsible for several consumer industries. In 1988, Dave
assumed responsibility for managing Elfun Trusts. He is a Trustee for the GE
Canada Pension Trust, a Chartered Financial Analyst (CFA) and a member of the
New York Society of Security Analysts. Dave is a graduate of Indiana University
with a B.S. in Business.
Dave shares portfolio management responsibility for the GE Strategic Investment
Fund with Bob MacDougall, who manages the fixed income portion of the Fund's
portfolio. Please refer to page 28 for Bob's biographical details.
Q. How did the GE Strategic Investment Fund's industry benchmarks and Lipper
peers perform for the fiscal year ended September 30, 1996?
A. For this type of fund, you need to look at how both the stock and bond
markets performed. For the year ending September 30, 1996, U.S. stocks were
up 20.3% (S&P 500), international stocks up 8.6% (MSCI EAFE), and bonds up
4.9% (LB Aggregate). Please refer to specific discussions of the industry
benchmarks which are included in the respective Q & A sections for the GE
International Funds, GE U.S. Equity Fund and the GE Fixed Income Funds.
Peer Balanced Funds as tracked by Lipper Analytical Services now number 265
funds and the average Balanced Fund returned 12.5%. All classes of the GE
Strategic Investment Fund outperformed this average return. Refer to the
following page to see how your class of shares performed.
Q. How was the outperformance achieved?
A. Clearly, U.S. stocks were the place to be last year, but we believe our
U.S. stock exposure was below that of the average fund in our peer group.
Fortunately, security selection within each asset class was positive and
accounted for our outperformance relative to peer funds.
Q. What was the asset mix at fiscal year end and how did it change during the
year?
A. The following table shows the asset mix at year end and a comparison with
last year.
Asset Class 9/30/96 9/30/95
----------- ------- -------
U.S. Stocks 45% 43%
International Stocks 14 14
Fixed Income 30 29
Cash 11 14
The asset allocation remained fairly constant throughout the year. U.S.
equities at 45% remain below the more normal 50-60% range that we have
targeted for the long term. This is due to our concern over the valuation
of the U.S. stock market.
Q. How do you decide how much should be in each asset class?
A. We have an asset allocation committee that meets monthly to set the asset
allocation for the GE Pension Fund, Elfun Diversified Fund and GE Strategic
Investment Fund. We employ various quantitative models to assess the
relative attractiveness of the markets and set targets for the funds. We
have a team approach to portfolio management with the security selection
done by the managers who specialize in each asset class. We will react to
opportunities that the market volatility presents us over time.
Q. What is the outlook for the Fund?
A. We would characterize the current posture of the Fund as slightly more
defensive than the average fund in our peer group. This is due to our
cautious stance on the U.S. stock market at present levels. Our focus
remains on achieving long term outperformance through superior security
selection within each asset class, and correctly positioning the Fund
through our asset allocation process.
17
<PAGE>
GE Strategic Investment Fund
- --------------------------------------------------------------------------------
Top Ten Largest Holdings
at September 30, 1996
- --------------------------------------------------------------------------------
GNMA Pool 8 1/2% 10/15/2017 2.85%
U.S. Treasury Note 7.00% 7/15/2006 2.27%
SPDR Trust 1.87%
Federal National Mtg. Assn 1.52%
Travelers Group Inc. 1.39%
First Data Corp. 1.29%
Dover Corp. 1.20%
Reuters Hldgs PLC ADR (ClassB) 1.17%
Allied Signal Inc. 1.15%
Johnson & Johnson 1.06%
- --------------------------------------------------------------------------------
Investment Profile
A mutual fund designed for investors who seek to maximize total return through
asset allocation designed to achieve capital appreciation primarily from common
stocks and other equity securities and current income from bonds and other fixed
income securities.
* Lipper Performance Comparison
Balanced Peer Group
Based on 10/1/95 -- 9/30/96
total returns
Number of Funds in category: 265
Peer group average total return: 12.5%
Lipper categories in peer group: Balanced
*See notes to performance for explanation of peer categories
See page 39 for Notes to Performance. Past performance is no guarantee of future
results.
Comparison of Change in Value of a $10,000 Investment
- --------------------------------------------------------------------------------
Class A Shares
w/o load w/load LB Agg. S&P 500
-------- ------ ------- -------
1/1/94 $ 10,000 $ 10,000 $ 10,000 $ 10,000
9,579.14 9,124.13 9,712.67 9,618.15
9,579.14 9,124.13 9,612.81 9,657.88
9/94 9,868.08 9,399.35 9,671.58 10,132.9
9,820.91 9,354.42 9,708.14 10,129.82
10,509.08 10,009.9 10,197.82 11,116.13
11,274.43 10,738.89 10,819.18 12,175.41
9/94 11,853.26 11,290.23 11,031.99 13,145.54
12,476.93 11,884.27 11,501.83 13,927.96
12,800.75 12,192.71 11,296.66 14,685.15
13,144.39 12,520.04 11,361.16 15,348.14
9/96 13,435.17 12,796.99 11,570.35 15,818.4
Average Annual
Total Return
One Since
Year Inception
---- ---------
GE Strategic 13.35% 11.34%
GE Strategic w/load 7.96% 9.39%
S&P 500 20.33% 18.15%
LB Aggregate 4.90% 5.45%
- --------------------------------------------------------------------------------
Class B Shares
w/o load w/load LB Agg. S&P 500
-------- ------ ------- -------
$10,000 $10,000 $10,000 $10,000
12/31/93 10,070.87 10,070.87 10,000 10,000
9,640.98 9,640.98 9,712.67 9,618.15
9,640.98 9,640.98 9,612.81 9,657.88
9/94 9,874.9 9,874.9 9,671.58 10,132.9
9,819.38 9,819.38 9,708.14 101,29.82
10,491.68 10,491.68 10,197.82 11,116.13
11,241.55 11,241.55 10,819.18 12,175.41
9/95 11,803.95 11,803.95 11,031.99 13,145.54
12,409.85 12,409.85 11,501.83 13,927.96
12,715.28 12,715.28 11,296.66 14,685.15
13,033.99 13,033.99 11,361.16 15,348.14
9/96 13,306.23 13,106.23 11,570.35 15,818.4
Average Annual
Total Return
One Since
Year Inception
---- ---------
GE Strategic 12.73% 10.82%
GE Strategic w/load 8.73% 10.23%
S&P 500 20.33% 18.15%
LB Aggregate 4.90% 5.45%
- --------------------------------------------------------------------------------
Class C Shares
w/o load LB Agg S&P 500
-------- ------ -------
2/22/93 $10,000 $10,000 $10,000
10,309.14 10,042 10,216.1
10,436.83 10,308.71 10,268.05
9/93 10,806.46 10,577.38 10,530.86
10,928.42 10,583.12 10,775.93
10,482.79 10,279.04 10,364.46
10,462.21 10,173.36 10,407.27
9/94 10,777.59 10,235.55 10,919.15
10,729.24 10,274.25 10,915.83
11,488.09 10,792.48 11,978.67
12,331.24 11,450.07 13,120.14
9/95 12,970.65 11,675.28 14,165.55
13,654.56 12,172.53 15,008.68
14,023.21 11,955.39 15,824.63
14,399.09 12,023.65 16,539.05
9/96 14,731.61 12,245.04 17,045.81
Average Annual
Total Return
One Since
Year Inception
---- ---------
GE Strategic 13.58% 11.33%
S&P 500 20.33% 15.92%
LB Aggregate 4.90% 5.81%
- --------------------------------------------------------------------------------
Class D Shares
w/o load LB Agg S&P 500
-------- ------ -------
11/29/93 $10,000 $10,000 $10,000
10,152.68 10,054 10,123.4
9,745.04 9,765.12 9,736.84
9,732.3 9,664.72 9,777.06
9/94 10,025.3 9,723.81 10,257.94
9,993.6 9,760.57 10,254.94
10,700.41 10,252.89 11,253.31
11,498.86 10,877.6 12,325.65
9/95 12,100.96 11,091.56 13,307.76
12,750.55 11,563.94 14,099.83
13,101.36 11,357.66 14,866.37
13,472.41 11,422.51 15,537.53
9/96 13,789.47 11,632.83 16,013.6
Average Annual
Total Return
One Since
Year Inception
---- ---------
GE Strategic 13.95% 11.98%
S&P 500 20.33% 18.03%
LB Aggregate 4.90% 5.48%
18
<PAGE>
Schedule of Investments -- September 30, 1996
GE STRATEGIC INVESTMENT FUND
GE Strategic Fund
Domestic Equity 44.4%
Foreign Equity 13.8%
Bonds and Notes 30.4%
Cash and Other 11.4%
- --------------------------------------------------------------------------------
Number
of Shares Value
- --------------------------------------------------------------------------------
Common Stock -- 57.6%
Basic Materials -- 1.5%
Air Products & Chemicals Inc. 5,000 $ 291,250
Airgas Inc. 5,800 147,175 (a)
Carter Holt Harvey Ltd. 35,778 78,784
Morton International Inc. 15,000 596,250
SGL Carbon 1,582 184,423
Tokyo Steel Manufacturing 6,000 105,914
1,403,796
Capital Goods -- 7.2%
ABB AG 210 256,644
Alcatel Alsthom 72 6,070
Alleghany Corp. 1,020 209,100
Allied Signal Inc. 16,000 1,054,000
AMP Inc. 8,900 344,875
Browning-Ferris Industries Inc. 7,600 190,000
Denso Corp. 6,000 133,871
Dover Corp. 23,000 1,098,250
Eaux (Cie Generale) 1,055 114,579
Emerson Electric Co. 2,500 225,313
Grupo Carso S.A. de C.V. ADR 1,178 10,985
Hanson PLC ADR 17,100 211,613
Hubbell Inc. (Class B) 18,000 666,000
Lyonnaise Des Eaux S.A 1,195 106,880
Molex Inc. (Class A) 9,000 303,750
Sasib 8,779 15,503 (a)
Siam Cement Co. Ltd. 200 8,148
Siebe 8,838 139,369
Siemens AG 4,338 228,591
Technip 1,405 128,355
Tyco International Ltd. 3,800 163,875
VA Technologie AG 1,596 207,988
Valeo 3,468 191,275
Valmet Corp. 5,088 83,813
Waste Management International PLC ADR 3,265 29,385 (a)
WMX Technologies Inc. 13,500 443,813
6,572,045
Consumer -- Cyclical -- 6.0%
American Medical Response 5,000 180,000 (a)
Canon Inc. 11,000 215,860
Carmike Cinemas Inc. 500 11,563 (a)
Carnival Corp. (Class A) 7,000 217,000
Catalina Marketing Corp. 3,000 159,750 (a)
Circus Circus Enterprises Inc. 6,000 212,250 (a)
Comcast Corp. (Class A) 18,000 276,750
CUC International Inc. 700 27,912 (a)
Disney (Walt) Co. 10,000 633,750
Donnelley (R.R.) & Sons Co. 5,000 161,250
Electrolux AB (Series B) 24 1,349
Flightsafety International Inc. 5,000 223,125
Gannett Inc. 3,800 267,425
Granada Group 9,143 122,570
Harman International Industries Inc. 4,000 195,000
International Cabletel Inc. 20,000 512,500 (a)
Interpublic Group Cos. Inc. 4,400 207,900
McDonalds Corp. 6,500 307,937
Polygram N.V 2,267 126,805
Readers Digest Association Inc. (Class A) 1,800 73,575
Reed International 11,649 215,513
Scholastic Corp. 2,300 166,750 (a)
Sega Enterprises 3,000 130,376
Suzuki Motor Corp. 15,000 182,796
Tele-Communications Inc. (Class A) 6,000 171,750 (a)
Tele-Communications Inc. Liberty
Media Group (Series A) 20,000 298,750 (a)
Television Broadcasts Ltd. ADR 24,000 89,228
Time Warner Inc. 3,800 146,775
5,536,209
Consumer -- Stable -- 5.0%
Anheuser Busch Cos. Inc. 7,600 285,950
Avon Products Inc. 6,400 317,600
Cardinal Health Inc. 2,400 198,300
Coca Cola Co. 1,500 76,313
Colgate Palmolive Co. 1,200 104,250
Duracell International Inc. 3,000 192,375
Gillette Co. 2,500 180,312
International Flavours 2,200 95,975
Kimberly Clark Corp. 9,000 793,125
Nestle S.A. (Regd.) 109 121,401
Nutricia Verenigde Bedrijven 2,016 266,022
Pan American Beverages Inc.
(Class A) 1,420 58,398
Pepsico Inc. 25,400 717,550
Philip Morris Cos. Inc. 9,500 852,625
Procter & Gamble Co. 1,200 117,000
San Miguel Corp. 53,000 173,737
4,550,933
- ----------
See Notes to Schedule of Investments and Financial Statements
19
<PAGE>
GE Strategic Investment Fund
- --------------------------------------------------------------------------------
Number
of Shares Value
- --------------------------------------------------------------------------------
Energy -- 5.3%
Amoco Corp. 1,700 $ 119,850
Anadarko Petroleum Co. 4,300 240,263
Atlantic Richfield Co. 2,300 293,250
Coflexip ADR 5,666 123,236 (a)
ENI Spa (Regd.) 22,631 115,662
Exxon Corp. 5,500 457,875
OMV AG 1,175 118,134
Repsol S.A 6,742 221,445
Royal Dutch Petroleum Co. ADR 5,000 780,625
Schlumberger Ltd. 10,000 845,000
Texaco Inc. 4,600 423,200
Total S.A. (Class B) 3,317 261,032
Unocal Corp. 13,000 468,000
Veba AG 6,447 337,360
4,804,932
Financial -- 6.9%
American Express Co. 6,500 300,625
Banco Comercial Portugues ADR 9,317 112,969
Citicorp 8,000 725,000
Countrywide Credit Industries 10,000 256,250
Den Danske Bank 2,015 146,859
Deutsche Bank AG 1,629 76,708
Federal National Mortgage Assoc 40,000 1,395,000
Grupo Financiero Bancomer
ADR (Series C) 6,028 58,019 (a,b)
HSBC Holdings 7,600 141,032
IMI 17,327 147,193
ING Groep N.V 4,821 150,313
Morgan (J.P.) & Co. Inc. 3,000 266,625
State Street Boston Corp. 8,000 459,000
Thai Farmers Bank 10,600 111,706
Travelers Group Inc. 26,000 1,277,250
Wells Fargo & Co. 2,800 728,000
6,352,549
Healthcare -- 7.8%
Abbott Laboratories 18,000 886,500
Allergan Inc. 2,200 83,875
American Home Products 10,000 637,500
Arrow International Inc. 2,500 86,250
Astra AB (Series B) 2,698 110,946
Bristol-Myers Squibb Co. 6,000 578,250
Columbia HCA Healthcare Corp. 2,000 113,750
Dentsply International Inc. 2,000 89,000
Eli Lilly & Co. 5,600 361,200
Gehe AG 1,860 124,252
Johnson & Johnson 19,000 973,750
Lincare Holdings Inc. 2,500 100,000 (a)
Living Centers of America Inc. 5,000 125,000 (a)
Medeva 59,589 238,300
Merck & Co. Inc. 10,000 703,750
Pfizer Inc. 11,500 909,937
Roche Holdings AG 15 110,361
Sandoz AG (Regd.) 215 257,959
Smithkline Beecham PLC ADR 6,600 401,775
St. Jude Medical Inc. 5,000 201,875 (a)
7,094,230
Insurance -- 3.1%
American International Group Inc. 4,500 453,375
Chubb Corp. 5,000 230,000
General Reinsurance Corp. 3,500 496,125
Loews Corp. 10,000 773,750
Marsh & McLennan Cos 3,800 369,075
Schw Ruckversicher (Regd.) 76 80,045
TIG Holdings Inc. 8,000 240,000
UNUM Corp. 3,700 237,262
2,879,632
Miscellaneous -- 1.9%
SPDR Trust 25,000 1,715,625
Retail Trade -- 2.3%
Arbor Drugs Inc. 8,500 184,875
Carrefour S.A 557 312,601
Credit Saison Co. 4,800 114,839
EMI Group 6,632 138,578
General Nutrition Cos. Inc. 5,000 87,812 (a)
Giordano International 86,000 75,624
Home Depot Inc. 3,800 216,125
Ito Yokado Co. 4,000 226,882
Izumi Co. 8,000 141,935
Thorn 6,632 37,733
Toys `R Us 18,000 524,250 (a)
2,061,254
Software & Services -- 4.7%
Automatic Data Processing Inc. 14,000 610,750
Equifax Inc. 35,000 923,125
First Data Corp. 14,500 1,183,562
Microsoft Corp. 1,900 250,563 (a)
Reuters Holdings PLC ADR (Class B) 15,500 1,073,375
Sap AG 1,343 225,607
4,266,982
Technology -- 2.0%
Brambles Industries Ltd. 12,722 206,461
Cisco Systems Inc. 4,000 248,250 (a)
Hewlett Packard Co. 3,400 165,750
Intel Corp. 6,500 620,344
Murata Manufacturing Co. 4,000 142,652
Rohm Co. 3,000 188,978
Secom Co. 3,000 189,516
Wolters Kluwer 802 100,818
1,862,769
Transportation -- 1.0%
Burns Philip & Co. 81,402 115,994
IHC Caland N.V 2,517 132,412
Pittston Brinks Group 5,500 172,562
Union Pacific Corp. 7,000 512,750
933,718
- ----------
See Notes to Schedule of Investments and Financial Statements
20
<PAGE>
Schedule of Investments -- September 30, 1996
- --------------------------------------------------------------------------------
Number
of Shares Value
- --------------------------------------------------------------------------------
Utilities -- 2.9%
Airtouch Communications Inc. 22,000 $ 607,750 (a)
American Telephone & Telegraph 6,100 318,725
DDI Corp. 42 339,086
Edison Spa 18,963 118,141
GTE Corp. 8,900 342,650
MCI Communications Corp. 12,800 328,000
NYNEX Corp. 2,000 87,000
Stet 34,365 119,231
Telecom Italia Mobile 78,445 174,065
Telefonica del Peru S.A. ADR (Class B) 4,713 107,810
Telekom Malaysia 16,000 141,079
2,683,537
Total Common Stock
(Cost $41,735,321) 52,718,211
Principal
Amount Value
- --------------------------------------------------------------------------------
Bonds and Notes -- 30.4%
- --------------------------------------------------------------------------------
U.S. Treasuries -- 7.2%
U.S. Treasury Bonds
6.00% 02/15/26 $ 967,000 849,751
8.125% 08/15/19 738,000 825,291
12.00% 05/15/05 - 08/15/13 360,000 498,563
2,173,605
U.S. Treasury Notes
5.125% 02/28/98 300,000 296,484
6.00% 08/15/99 360,000 357,469
6.125% 08/31/98 122,000 122,038
6.625% 06/30/01 564,000 567,435
6.75% 04/30/00 954,000 965,028
7.00% 07/15/06 2,040,000 2,082,391
4,390,845
Total U.S. Treasuries
(Cost $6,578,107) 6,564,450
Asset Backed -- 0.5%
Advanta Mortgage Loan Trust Corp.
6.30% 07/25/25 27,306 25,667
AT & T Universal Card Master Trust
5.95% 10/17/02 20,000 19,475
CIT RV Trust
5.40% 12/15/11 34,593 33,610
Discover Card Master Trust
6.20% 05/16/06 70,000 66,675
First Plus Home Improvement Loan Trust
7.80% 03/20/16 44,000 44,261
Fleetwood Credit Grantor Trust
6.90% 03/15/12 67,000 67,262
Lehman FHA Title I Loan Trust
7.83% 09/25/17 40,000 40,524
Premier Auto Trust
6.50% 03/06/00 50,000 50,172
Standard Credit Card Master Trust
6.75% 06/07/00 50,000 50,328
The Money Store Home Equity Trust
7.50% 01/15/26 49,000 48,640
7.90% 10/15/22 29,000 29,435
Total Asset Backed
(Cost $475,214) 476,049
Corporate Notes -- 5.8%
American Home Products
7.70% 02/15/00 200,000 205,986
Argentaria Capital Fund
6.375% 02/14/06 50,000 46,125
Arkla Inc.
8.875% 07/15/99 75,000 79,028
BCH Cayman Islands
8.25% 06/15/04 25,000 26,008
Bell Telephone Co - Canada
9.50% 10/15/10 150,000 177,100
BHP Finance USA
6.42% 03/01/26 40,000 38,798
Blockbuster Entertainment
6.625% 02/15/98 175,000 174,368
Capital One Bank
6.43% 06/29/98 150,000 149,416
Carter Holt Harvey Ltd.
8.875% 12/01/04 200,000 218,374
Central Maine Power Co.
7.40% 06/02/98 200,000 199,518
China International Trust &
Investment Corp.
9.00% 10/15/06 65,000 69,400
Citicorp
8.625% 12/01/02 100,000 107,549
Developers Diversified
7.00% 03/05/01 115,000 112,055
Dresser Industries Inc.
7.60% 08/15/96 50,000 49,109
Finova Capital Corp.
6.375% 10/15/00 150,000 147,381
Ford Motor Co.
7.25% 10/01/08 80,000 79,646
9.95% 02/15/32 205,000 257,154
Freeport McMoran Resource Partner
7.00% 02/15/08 35,000 32,279
Freeport Term Malta Ltd.
7.50% 03/29/09 55,000 55,405 (b)
General Motors Corp.
8.89% 08/18/03 30,000 32,719
Great Atlantic & Pacific Tea Inc.
9.125% 01/15/98 100,000 102,736
HSBC Finance Nederland B.V.
7.40% 04/15/03 100,000 100,451 (b)
Hydro Quebec
8.05% 07/07/24 75,000 79,741
Ikon Capital Resource Inc.
6.90% 05/03/00 100,000 99,673
ING Bank
7.25% 06/12/06 40,000 39,700
- ----------
See Notes to Schedule of Investments and Financial Statements
21
<PAGE>
GE Strategic Investment Fund
- --------------------------------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------------------------------
ITT Corp. (new)
6.25% 11/15/00 $ 35,000 $ 33,999
Joy Technologies Inc.
10.25% 09/01/03 100,000 109,000
Kingdom of Sweden
10.25% 11/01/15 50,000 61,292
Korea Electric Power Corp.
7.75% 04/01/13 28,000 27,752
Landeskreditbank Baden
7.875% 04/15/04 40,000 42,004
Lehman Brothers Inc.
7.00% 05/24/00 150,000 149,320
Loewen Group Interest
7.50% 04/15/01 55,000 54,725 (b)
Mayne Nickless Ltd.
8.65% 04/15/02 50,000 53,417 (b)
New York Taxable General Obligation
6.10% 02/01/98 100,000 99,225
News America Holdings Inc.
9.125% 10/15/99 150,000 159,333
North Atlantic Energy Corp.
9.05% 06/01/02 141,000 139,105
Nova Scotia Province of Canada
9.125% 05/01/21 45,000 52,144
Ontario Province of Canada
6.125% 06/28/00 250,000 246,110
Oslo Seismic
8.28% 06/01/11 100,000 101,010 (b)
Paramount Communications Inc.
5.875% 07/15/00 150,000 143,169
Pennzoil Co.
10.625% 06/01/01 50,000 54,190
Peoples Republic of China
7.75% 07/05/06 50,000 50,192
Philip Morris Cos. Inc.
6.95% 06/01/06 75,000 75,387
Reliance Industries Ltd.
10.375% 06/24/16 30,000 30,620 (b)
Republic of Columbia
7.25% 02/15/03 35,000 33,110
Republic of Poland
3.75% 10/27/14 50,000 39,781
RHG Finance Corp.
8.875% 10/01/05 85,000 88,408
RJR Nabisco Inc.
8.00% 07/15/01 125,000 124,099
Taubman Realty Group L.P.
8.00% 06/15/99 80,000 80,938
TCI Communications Inc.
6.275% 09/15/03 40,000 40,000
6.69% 03/31/06 100,000 98,117
Tele-Communications Inc.
8.25% 01/15/03 85,000 85,637
Tenaga Nasional Berhad
7.50% 01/15/96 25,000 22,514 (b)
Thai Farmers Bank Public Ltd.
8.25% 08/21/16 100,000 97,344 (b)
United Co. Financial Corp.
7.00% 07/15/98 150,000 150,133
Yale University Notes
7.375% 04/15/96 65,000 63,408
Total Corporate Notes
(Cost $5,296,745) 5,285,202
Mortgage-Backed -- 16.9%
Federal Home Loan Mortgage Corp.
6.50% 03/01/04 - 04/01/11 200,164 195,036
7.00% 11/01/09 - 05/01/10 55,704 55,408
7.50% 06/01/23 - 02/01/26 442,496 439,431
8.00% 10/01/25 - 02/01/26 696,245 703,639
9.00% 04/01/16 - 06/01/21 500,937 526,042
1,919,556
Federal National Mortgage Assoc.
6.00% 03/01/09 - 04/01/09 165,782 158,737
6.50% 01/01/04 16,436 16,151
7.00% TBA 98,000 94,570 (c)
8.00% 12/01/24 580,609 586,775
8.00% TBA 360,000 363,206 (c)
8.50% 04/01/17 29,750 30,746
9.00% 08/01/24 - 07/01/26 417,491 435,502
9.50% 04/01/25 266,511 284,333
9.50% TBA 404,000 431,270 (c)
2,401,290
Government National Mortgage Assoc.
6.00% 09/20/26 404,000 401,600
6.00% TBA 55,000 54,502 (c,e)
6.50% TBA 55,000 55,172 (c,e)
7.00% 05/15/23 - 12/15/23 1,470,632 1,423,979
7.50% 04/15/22 - 12/15/23 2,236,576 2,220,809
8.50% 10/15/17 2,490,028 2,606,487
9.00% TBA 121,000 128,260 (c)
9.50% 12/15/09 149,559 161,337
7,052,146
Collateralized Mortgage Obligations
Aetna Commercial Mortgage Trust
6.422% 12/26/30 173,325 171,592
American Southwest Financial Securities Corp.
7.30% 10/17/01 28,576 28,656
Asset Securitization Corp.
7.10% 08/13/29 49,415 48,983
Collateralized Mortgage Obligation Trust
5.93% 09/01/15 43,295 36,086 (d,f)
7.36% 11/01/18 42,470 26,332 (d,f)
8.00% 01/01/17 133,312 135,058
Community Program Loan Trust
4.50% 10/01/18 170,000 141,791
CS First Boston Mortgage Securities Corp.
6.425% 08/20/30 93,365 92,781
DLJ Mortgage Acceptance Corp.
6.65% 12/17/27 33,509 33,100 (b)
6.85% 12/17/27 123,000 118,195 (b)
7.50% 02/18/03 92,846 93,890
7.58% 03/13/28 50,000 50,110 (b)
8.75% 06/28/26 112,744 113,378 (b)
- ----------
See Notes to Schedule of Investments and Financial Statements
22
<PAGE>
Schedule of Investments -- September 30, 1996
- --------------------------------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------------------------------
FDIC REMIC Trust
7.85% 09/25/25 $ 55,734 $ 56,265
Federal Home Loan Mortgage Corp.
7.00% 07/01/26 773,492 285,709 (g)
8.00% 04/15/20 30,000 30,487
1009.00% 09/15/21 928 37,438 (g)
Federal National Mortgage Assoc.
6.19% 08/25/23 127,131 87,561 (d,f)
7.41% 03/25/21 95,000 95,623
8.00% 07/01/24 145,761 48,237 (g)
8.50% 03/01/17 - 07/25/22 211,465 67,170 (g)
8.58% 09/25/23 147,948 85,348 (d,f)
9.60% 09/25/23 195,000 109,200 (d,f)
Federal National Mortgage Assoc. REMIC
6.965% 07/25/10 40,000 39,100
6.97% 07/25/20 101,000 79,790 (d,f)
7.43% 09/25/22 100,704 76,976 (d,f)
8.58% 09/25/23 41,105 23,712 (d,f)
LB Commercial Conduit Mortgage Trust
7.144% 08/25/04 260,727 261,216
Merrill Lynch Mortgage Investor's Inc.
7.098% 05/25/15 45,712 45,383
7.252% 06/15/21 132,611 133,564
Mid-State Trust
8.33% 04/01/30 630,720 656,245
Morgan Stanley Capital Inc.
6.476% 10/15/10 98,907 96,342 (b)
7.51% 11/15/05 137,057 138,428 (b)
Provident Bank Home Equity Loan Trust
7.60% 09/01/06 75,000 75,188
Rural Housing Trust
6.33% 04/01/26 176,243 171,044
Sawgrass Finance REMIC Trust
6.45% 01/20/06 60,000 58,819
Structured Asset Securities Corp.
8.495% 04/25/27 150,948 153,590 (d)
Vornado Finance Corp.
6.36% 12/01/00 105,000 102,637 (b)
4,105,024
Total Mortgage-Backed
(Cost $15,463,843) 15,478,016
Total Bonds and Notes
(Cost $27,813,909) 27,803,717
Convertible Bonds -- 0.0%
- --------------------------------------------------------------------------------
Sasib
9.25% 12/31/97
(Cost $8,270) ITL 15,000,000 5,342
- --------------------------------------------------------------------------------
Number
of Shares Value
- --------------------------------------------------------------------------------
Preferred Stock -- 0.6%
- --------------------------------------------------------------------------------
Airtouch Communications Inc.
(Class B), 6.00% 3,676 $ 106,144
Airtouch Communications Inc.
(Class C), 4.25% 2,361 112,443
Appalachian Power Co.
(Series A), 8.25% 500 12,375 (a)
Central Hispano Capital, 9.43% 2,000 52,000
Entergy Gulf States Inc., $1.75 2,875 70,852
Equity Residential Properties
Trust, 9.125% 1,900 47,975 (a)
Grand Metropolitan Delaware, 9.42% 1,500 41,625
Hibernia Corp., 6.90% 1,900 95,000
Post Properties Inc., 8.50% 780 39,000
Total Preferred Stock
(Cost $560,084) 577,414
Total Investments in Securities
(Cost $70,117,584) 81,104,684
- --------------------------------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------------------------------
Short Term Investments -- 12.5%
- --------------------------------------------------------------------------------
U.S. Government Agencies -- 8.7%
Federal Home Loan Mortgage Corp.
5.23% 10/15/96 $2,000,000 1,995,932 (d)
5.28% 10/10/96 2,300,000 2,296,964 (d)
5.38% 10/18/96 - 11/08/96 3,670,000 3,657,695 (d)
7,950,591
Repurchase Agreement -- 3.8%
State Street Bank and Trust Co.
5.40% 10/01/96
(Cost $3,540,000) 3,540,000 3,540,000
(dated 09/30/96, proceeds $3,540,531,
collateralized by $3,613,860 United States
Treasury Note, 8.375%, 08/15/08)
Total Short Term Investments
(Cost $11,490,591) 11,490,591
Other Assets and Liabilities, net (1.1%) (1,033,521)
NET ASSETS -- 100% $91,561,754
- ----------
See Notes to Schedule of Investments and Financial Statements
23
<PAGE>
GE Tax-Exempt Fund
Q&A
Effective in February, 1996 Stella Lou assumed management responsibility for the
GE Tax-Exempt Fund. Stella has 11 years of investment experience and has been
with GE Investments since 1994. Prior to joining GE Investments, she was a Vice
President and Portfolio Manager for Alliance Capital Management in New York.
Stella graduated from Cornell University with a B.S. degree in Applied Economics
and received her M.B.A. degree in Finance from New York University.
Q. How did the GE Tax-Exempt Fund's industry benchmark and Lipper peer group
perform for the fiscal year ended September 30, 1996?
A. The Lehman Municipal Index returned 6.0% for the 12 months ended September
30, 1996. Our Lipper peer group of 230 General Municipal funds had an
average return of 5.6% for the same period. Refer to the following page to
see how your class of shares performed.
Q. Why did the Fund underperform its benchmark and peers?
A. The GE Tax-Exempt Fund underperformed its benchmarks because the Fund had a
longer average duration than the benchmarks during the first quarter. The
longer duration is caused by owning securities with longer maturities that
are purchased to maximize the tax exempt income to the Fund. As interest
rates rise, a longer duration causes the portfolio market value to decline
by a greater amount than those of its peers with shorter durations. This
was the case for GE Tax-Exempt Fund for the first quarter of 1996. Quality
is also a contributing factor to the performance. The GE Tax-Exempt Fund
has a high average quality rating of Aa1/AA while the benchmark has an
average quality rating of A1/AA2. This lower average rating reflects the
greater risk and volatility of the benchmark performance.
Q. What has your investment strategy been?
A. The strategy for this Fund has been to purchase discounted securities in
the 15 to 20 year maturity range and premium, noncallable bonds in the 10
year range. This strategy has allowed the Fund to maximize its income
earning power and still have a measure of protection during periods of
rising interest rates. The cash position averaged 10% for the second half
of fiscal 1996 as a cushion against the potential of rising interest rates.
During fiscal 1995-96 interest rates fluctuated dramatically as economic
data vacillated between signs of rapid growth and a moderate slowdown.
Q. How did this past year's economic events impact the Fund?
A. A lack of firm economic direction had the biggest impact on the portfolio
during the last fiscal year. In the first quarter of 1996, the portfolio
was positioned for a decline in interest rates. When the February
unemployment figures showed stronger than expected growth in the economy,
the portfolio market value declined in response. Subsequently, April
unemployment indicated a significantly slower economy causing interest
rates to fall and positively impact the portfolio. Many of the monthly
economic indicators this year have vacillated between showing an
inflationary or a slowing economic environment. This type of seesawing
between inflationary and slowing economic activity made positioning the
portfolio difficult at best. The portfolio holdings were adapted to take a
more conservative stance until more definitive signs of market direction
appear.
Q. What is the outlook for the Fund? How have you positioned the Fund going
forward?
A. The municipal market will continue to be volatile during the next fiscal
year. New issue municipal supply is expected to remain light as
municipalities have no imperative need to issue debt and are attempting to
reign in spending. As such, the Fund is positioned slightly longer than the
index and peer group with respect to duration. The cash position is
currently intended to be maintained at around 5%. This will enable the Fund
to take advantage of declining interest rates as demand for municipals
increases. The major issue facing the municipal market in the coming year
will be tax reform. We don't expect any major action by President Clinton
until he establishes his Cabinet and his agenda for the second term. With
Republicans retaining control of Congress, we can expect some form of tax
reform to materialize but not until they address the Presidential agenda.
24
<PAGE>
GE Tax-Exempt Fund
Quality Ratings
at September 30, 1996
Percent of
Moody's Ratings+ Market Value
---------------- ------------
Aaa 53.6%
Aa 44.2%
A 2.2%
100.0%
+ Moody's Investors Service, Inc. is a nationally recognized statistical
rating organization.
Investment Profile
A mutual fund designed for investors who seek a high level of current income
exempt from federal income taxes while preserving capital by investing primarily
in municipal obligations.
* Lipper Performance Comparison
General Municipal Peer Group
Based on 10/1/95 -- 9/30/96
total returns
Number of Funds in category: 230
Peer group average total return: 5.6%
Lipper categories in peer group: General Municipal
*See notes to performance for explanation of peer categories
See page 39 for Notes to Performance. Past performance is no guarantee of future
results.
Comparison of Change in Value of a $10,000 Investment
- --------------------------------------------------------------------------------
Class A Shares
w/o load w/load LBMI
-------- ------ ----
1/1/94 $10,000 $10,000 $10,000
9,381.7 8,982.98 9,451.07
9,430.35 9,029.56 9,555.68
9/94 9,460.21 9,058.15 9,621.07
9,242.16 8,849.37 9,482.9
9,927.02 9,505.13 10,153.39
10,103.43 9,674.04 10,398.6
9/95 10,307.9 9,869.82 10,697.67
10,746.85 10,290.11 11,138.86
10,425.48 9,982.39 11,004.51
10,455.1 10,010.76 11,088.88
9/96 10,670.74 10,217.23 11,344.17
Average Annual
Total Return
One Since
Year Inception
---- ---------
GE Tax-Exempt 3.52% 2.39%
GE Tax-Exempt w/load -0.88% 0.78%
LBMI 6.04% 4.70%
- --------------------------------------------------------------------------------
Class B Shares
w/o load w/load LBMI
-------- ------ ----
12/22/93 $10,000 $10,000 $10,000
10,051.4 10,051.4 10,000
9,417.1 9,417.1 9,451.07
9,454.03 9,454.03 9,555.68
9/94 9,472.13 9,472.13 9,621.07
9,242.25 9,242.25 9,482.9
9,914.81 9,914.81 10,153.39
10,078.67 10,078.67 10,398.6
9/95 10,278.33 10,278.33 10,697.67
10,693.72 10,693.72 11,138.86
10,369.91 10,369.91 11,004.51
10,395.73 10,395.73 11,088.88
9/96 10,587.69 10,387.69 11,344.17
Average Annual
Total Return
One Since
Year Inception
---- ---------
GE Tax-Exempt 3.01% 2.08%
GE Tax-Exempt w/load 0.04% 1.42%
LBMI 6.04% 4.70%
- --------------------------------------------------------------------------------
Class C Shares
w/o load LBMI
-------- ----
2/26/93 $10,000 $10,000
9,875.35 9,894
10,206.4 10,217.73
9/93 10,547.64 10,562.88
10,651.9 10,711.15
9,998.34 10,123.18
10,056.31 10,235.23
9/94 10,094.5 10,305.27
9,867.99 10,157.28
10,605.66 10,875.45
10,800.67 11,138.1
9/95 11,025.98 11458.44
11,502.77 11,931.01
11,165.7 11,787.1
11,213.29 11,877.46
9/96 11,441.42 12,150.92
Average Annual
Total Return
One Since
Year Inception
---- ---------
GE Tax-Exempt 3.77% 3.82%
LBMI 6.04% 5.58%
- --------------------------------------------------------------------------------
Class D Shares
11/29/93 10000 10000
10237.01 10211
9614.93 9650.49
9676.76 9757.3
9/94 9719.61 9824.07
9507.55 9682.99
10224.66 10367.63
10419.08 10618.01
9/95 10652.21 10923.4
11110.3 11373.89
10791.47 11236.71
10844.99 11322.54
9/96 11073.04 11583.54
Average Annual
Total Return
One Since
Year Inception
---- ---------
GE Tax-Exempt 3.95% 3.65%
LBMI 6.04% 5.31%
25
<PAGE>
Schedule of Investments -- September 30, 1996
GE TAX-EXEMPT FUND
Water and Sewer 4.7%
Health 7.7%
General Obligations 34.2%
Transportation 2.2%
Industrial Development 3.2%
Education 15.9%
Cash and Other 2.8%
Electric Utility 5.5%
Sales Tax 12.3%
Lease Revenue 11.5%
- --------------------------------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------------------------------
Municipal Bonds -- 97.2%
Arizona -- 8.5%
Arizona Transportation Board Excise Tax
Rev. - Sales Tax, AMBAC Insured
5.60% 07/01/02 $500,000 $ 523,150
Maricopa County Elementary School
G.O., AMBAC Insured
6.30% 07/01/07 500,000 546,515
1,069,665
Connecticut -- 7.7%
Connecticut State Health & Educational Facility
Rev. - Educ., MBIA Insured
5.125% 11/01/13 500,000 475,660
Connecticut State Health & Educational
Facility Rev. - Health, MBIA Insured
5.50% 07/01/12 500,000 494,765
970,425
Georgia -- 3.9%
Georgia State G.O.
5.00% 08/01/10 500,000 483,960
Hawaii-- 4.0%
Hawaii State G.O.
4.50% 06/01/01 500,000 497,065
Indiana -- 6.1%
Indiana Health Facility Hospital Rev. - Health
5.25% 11/01/15 500,000 464,675
Indiana University Rev. - Educ.
6.00% 11/15/14 290,000 300,257
764,932
Kentucky -- 2.6%
Louisville & Jefferson County Kentucky
Rev. - Sewer, MBIA Insured
5.30% 05/15/19 345,000 331,366
Maryland -- 4.2%
Baltimore County G.O.
5.50% 08/01/04 500,000 519,930
Massachusetts -- 2.1%
Massachusetts State Water & Sewer
Rev. - Water & Sewer
6.00% 11/01/06 250,000 262,705
Michigan -- 6.1%
Michigan State Underground Storage Tank
Rev. - Sales Tax, AMBAC Insured
6.00% 05/01/04 500,000 529,255
Okemos Public School District
Rev. - Educ., MBIA Insured
5.88% 05/01/16 750,000 241,162 (d)
770,417
Mississipi -- 3.9%
Mississippi State G.O.
5.10% 11/15/10 500,000 483,365
Missouri -- 3.9%
Missouri State Environmental
Improvement & Energy Rev. - Electric
5.25% 12/01/09 500,000 492,960
Montana -- 3.8%
Montana State University
Rev. - Educ., MBIA Insured
5.25% 11/15/13 500,000 481,925
New Jersey -- 6.0%
New Jersey Building Auth. Rev. - Muni. Bldg.
5.00% 06/15/12 500,000 468,395
New Jersey Tpke. Auth.
Rev. - Trans., AMBAC Insured
6.50% 01/01/16 250,000 279,425
747,820
Ohio -- 6.0%
Ohio State Building Authority
Rev. - Muni. Bldg., AMBAC Insured
5.50% 04/01/16 500,000 491,780
Ohio State Public Facilities
Rev. - Educ., AMBAC Insured
5.40% 11/01/07 250,000 254,113
745,893
Oregon -- 3.9%
Portland G.O.
5.375% 06/01/13 500,000 494,270
- ----------
See Notes to Schedule of Investments and Financial Statements
26
<PAGE>
Schedule of Investments -- September 30, 1996
- --------------------------------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------------------------------
Pennsylvania -- 3.9%
Pennsylvania Intergovernmental Co-op.
Rev. - Sales Tax, MBIA Insured
5.60% 06/15/15 $500,000 $489,185
South Dakota -- 3.8%
South Dakota State Building Authority
Rev. - Muni. Bldg., AMBAC Insured
5.20% 12/01/09 500,000 480,160
Tennessee -- 3.2%
Sullivan County Tennessee Industrial Development
Rev. - Industrial Development, VRDN
3.90% 10/01/16 400,000 400,000
Texas -- 8.1%
Houston G.O.
6.00% 04/01/04 500,000 530,930
University of Texas Rev.- Educ.
5.10% 08/15/08 500,000 487,375
1,018,305
Virginia -- 1.6%
Peninsula Ports Authority Virginia Coal Term
Rev. - Electrical Utility, VRDN
3.85% 07/01/16 200,000 200,000
Wisconsin -- 3.9%
Wisconsin State G.O.
5.30% 11/01/11 500,000 493,340
Total Investments in Securities
(Cost $12,044,928) 12,197,688
Other Assets and Liabilities,
net 2.8% 345,286
NET ASSETS -- 100% $12,542,974
- ----------
See Notes to Schedule of Investments and Financial Statements
27
<PAGE>
GE Fixed Income Funds
Q&A
Bob MacDougall leads the taxable fixed income team at GE Investments. Assets
under management exceed $13 billion. His responsibilities include managing the
GE Fixed Income, GE Short-Term Government and GE Money Market Funds. Bob joined
GE Investments in 1986 as Mutual Fund Portfolio Manager and was named to his
present position in 1992. Previously he was with GE's Corporate Treasury
Operation managing the Company's $2 billion portfolio of marketable securities
and supporting the Treasurer in the areas of debt management and capital
structure planning. Prior to that, Bob held various financial management
positions since joining GE in 1973. He holds Bachelor's and Master's degrees in
Business Administration from the University of Massachusetts.
Q. Describe this year's bond market.
A. The past 12 months comprised three distinct periods in the bond market.
First, 1995's market rally continued throughout the fourth quarter. It then
reversed course in the first quarter of 1996 as rates rose 1 percentage
point on renewed inflation concerns raised by stronger than expected
economic activity. Finally, the past six months have witnessed the market
trading in a narrow range around 7% on the long bond. Sentiment seems to
change almost daily over whether the economy is too strong, too weak or
just right - prompting references to Goldilocks. In this environment our
focus is to seek to add yield to the portfolio by overweighting
mortgage-backed securities and by prudently selecting lower rated corporate
bonds.
GE Fixed Income Fund
Q. How did the GE Fixed Income Fund's peers and industry benchmark perform for
the fiscal year?
A. For the year ending September 30, 1996 the Lehman Aggregate Bond Index
returned 4.9% while our peer group of 132 Intermediate Maturity U.S.
Government Bond funds averaged a 3.8% return for the same period. Refer to
the following page to see how your class of shares performed compared to
these benchmarks.
Q. What drove the Fund's performance?
A. The Fund's duration (interest rate exposure) hurt performance as interest
rates rose earlier in the year but this was more than offset by favorable
sector allocation (mortgage-backed securities and corporate bonds) and good
security selection.
GE Short-Term Government Fund
Q. How did the GE Short-Term Government Fund's peers and industry benchmark
perform for the fiscal year?
A. The Lehman Brothers 1-3 year Government Index returned 5.7% for the year
ended September 30, 1996 while the average return of the 161 Short-Term
U.S. Government Bond funds in our peer group was 4.6%. Refer to page 34 to
see how your class of shares performed compared to these benchmarks.
Q. Discuss the Fund's performance.
A. The Fund takes less interest rate risk than GE Fixed Income because of its
shorter average maturity. That is why, in a rising rate environment, it
does better even though its yield is lower. Our allocation to
mortgage-backed securities was also a plus.
GE Money Market Fund
Q. How did the GE Money Market Fund's peers and industry benchmark perform for
the fiscal year?
A. The average return of 287 peer Money Market funds for the past 12 months
was 4.9% versus 5.2% for 90 day Treasury Bills. Our return of 5.2% put us
in the top 20% of the peer group.
Q. What is your approach in this Fund?
A. The strategy for this Fund is to provide a competitive money market yield
while minimizing the interest rate risk inherent in the other two fixed
income funds. Our average maturity is generally between 30 and 60 days and
our portfolio contains only high quality liquid securities.
28
<PAGE>
GE Fixed Income Fund
Quality Ratings
at September 30, 1996
Percent of
Moody's Ratings+ Market Value
---------------- ------------
Aaa 79.6%
Aa 1.1%
A 7.1%
Baa 6.8%
Ba 5.4%
100.0%
+ Moody's Investors Service, Inc. is a nationally recognized statistical
rating organization.
Investment Profile
A mutual fund designed for investors who seek high current income and
preservation of capital by investing primarily in a variety of fixed income
securities.
* Lipper Performance Comparison
Intermediate Government Peer Group
Based on 10/1/95 -- 9/30/96
total returns
Number of Funds in peer group: 132
Peer group average total return: 3.8%
Lipper categories in peer group: Intermediate U.S. Government,
Intermediate
U.S. Treasury
*See notes to performance for explanation of peer categories
See page 39 for Notes to Performance. Past performance is no guarantee of future
results.
Comparison of Change in Value of a $10,000 Investment
- --------------------------------------------------------------------------------
Class A Shares
w/o load w/load LB Aggr.
-------- ------ --------
1/1/94 $10,000 $10,000 $10,000
9,746.86 9,332.62 9,712.67
9,654.97 9,244.63 9,612.81
9/94 9,698.17 9,286 9,671.58
9,719.6 9,306.52 9,708.14
10,150.16 9,718.78 10,197.82
10,735.92 10,279.64 10,819.18
9/95 10,908.39 10,444.78 11,031.99
11,357.95 10,875.24 11,501.83
11,105.43 10,633.45 11,296.66
11,128.73 10,655.76 11,361.16
9/96 11,335.09 10,853.35 11,570.35
Average Annual
Total Return
One Since
Year Inception
---- ---------
GE Fixed Income 3.91% 4.66%
GE Fixed Income w/load -0.50% 3.01%
LB Aggregate 4.90% 5.45%
- --------------------------------------------------------------------------------
Class B Shares
w/o load w/load LB Aggr.
-------- ------ --------
12/22/93 $10,000 $10,000 $10,000
10,020.6 10,020.6 10,000
9,742.02 9,742.02 9,712.67
9,638.19 9,638.19 9,612.81
9/94 9,669.13 9,669.13 9,671.58
9,678.39 9,678.39 9,708.14
10,094.77 10,094.77 10,197.82
10,673.82 10,673.82 10,819.18
9/95 10,827.5 10,827.5 11,031.99
11,255.17 11,255.17 11,501.83
10,997.08 10,997.08 11,296.66
11,006.6 11,006.6 11,361.16
9/96 11,196.65 10,996.65 11,570.35
Average Annual
Total Return
One Since
Year Inception
---- ---------
GE Fixed Income 3.41% 4.15%
GE Fixed Income w/load 0.46% 3.51%
LB Aggregate 4.90% 5.45%
- --------------------------------------------------------------------------------
Class C Shares
w/o load LB Aggr
-------- -------
2/22/93 $10,000 $10,000
10,081.05 10,042
10,293.97 10,308.71
9/93 10,524 10,577.38
10,521.85 10,583.12
10,249.59 10,279.04
10,159.39 10,173.36
9/94 10,211.26 10,235.55
10,240.36 10,274.25
10,700.74 10,792.48
11,334.65 11,450.07
9/95 11,519.5 11,675.28
11,996.49 12,172.53
11,743.72 11,955.39
11,765.79 12,023.65
9/96 11,991.43 12,245.04
Average Annual
Total Return
One Since
Year Inception
---- ---------
GE Fixed Income 4.10% 5.16%
LB Aggregate 4.90% 5.81%
- --------------------------------------------------------------------------------
Class D Shares
w/o load LB Aggr
-------- -------
11/29/93 $10,000 $10,000
10,043.77 10,054
9,790 9,765.12
9,709.77 9,664.72
9/94 9,765.5 9,723.81
9,799.5 9,760.57
10,246.42 10,252.89
10,859.91 10,877.6
9/95 11,044.37 11,091.56
11,510.21 11,563.94
11,269.08 11,357.94
11,297.78 11,422.51
9/96 11,521.71 11,632.83
Average Annual
Total Return
One Since
Year Inception
---- ---------
GE Fixed Income 4.32% 5.11%
LB Aggregate 4.90% 5.48%
29
<PAGE>
Schedule of Investments -- September 30, 1996
- --------------------------------------------------------------------------------
GE FIXED INCOME FUND
U.S. Treasuries 19.6%
Corporate Notes 19.3%
Mortgage Backed 55.4%
Cash and Other 5.7%
- --------------------------------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------------------------------
Bonds and Notes -- 95.9%
- --------------------------------------------------------------------------------
U.S. Treasuries -- 19.6%
U.S. Treasury Bonds
6.00% 02/15/26 $1,753,000 $1,540,449
8.125% 08/15/19 1,170,000 1,308,387
12.00% 05/15/05 - 08/15/13 465,000 645,899
3,494,735
U.S. Treasury Notes
5.125% 02/28/98 2,000,000 1,976,560
6.00% 08/15/99 1,450,000 1,439,807
6.125% 05/15/98 - 08/31/98 805,000 805,339
6.625% 06/30/01 2,314,000 2,328,092
7.00% 07/15/06 2,582,000 2,635,654
9,185,452
Total U.S. Treasuries
(Cost $12,703,004) 12,680,187
Asset Backed-- 0.2%
Advanta Mortgage Loan Trust Corp.
6.30% 07/25/25 54,610 51,334
Lehman FHA Title I Loan Trust
7.83% 09/25/17 80,000 81,048
Total Asset Backed
(Cost $132,266) 132,382
Corporate Notes -- 19.3%
American Home Products
7.70% 02/15/00 100,000 102,993
Argentaria Capital Fund
6.375% 02/14/06 120,000 110,700
Arkla Inc.
8.875% 07/15/99 150,000 158,056
BCH Cayman Islands
8.25% 06/15/04 125,000 130,038
Bell Telephone Co - Canada
9.50% 10/15/10 375,000 442,751
Bell Telephone Co. - Pennsylvania
8.35% 12/15/30 75,000 85,286
BHP Finance USA
6.42% 03/01/26 45,000 43,648
Blockbuster Entertainment
6.625% 02/15/98 500,000 498,195
Capital One Bank
6.43% 06/29/98 400,000 398,444
8.125% 03/01/00 400,000 413,308
Central Maine Power Co.
7.40% 06/02/98 125,000 124,699
China International Trust & Investment Corp.
9.00% 10/15/06 325,000 346,999
China Light & Power Ltd.
7.50% 04/15/06 150,000 147,944
Conseco Inc.
10.50% 12/15/04 100,000 115,484
Continental Cablevision Inc.
8.30% 05/15/06 130,000 134,436
Delta Air Lines Inc.
7.79% 12/01/98 125,000 127,173
Developers Diversified
7.00% 03/05/01 300,000 292,317
Dresser Industries Inc.
7.60% 08/15/96 113,000 110,985
Federated Department Stores Inc.
8.50% 06/15/03 110,000 112,721
Finova Capital Corp.
6.375% 10/15/00 100,000 98,254
Ford Motor Credit Co.
7.25% 10/01/08 200,000 199,114
9.95% 02/15/32 95,000 119,169
Freeport McMoran Resource Partner
7.00% 02/15/08 150,000 138,339
Freeport Term Malta Ltd.
7.50% 03/29/09 150,000 151,104 (b)
General Motors Corp.
8.89% 08/18/03 100,000 109,062
Great Atlantic & Pacific Tea Inc.
9.125% 01/15/98 100,000 102,736
HSBC Finance Nederland B.V.
7.40% 04/15/03 150,000 150,676 (b)
Hydro Quebec
8.25% 04/15/26 250,000 259,120
11.75% 02/01/12 165,000 228,832
Ikon Capital Resource Inc.
6.90% 05/03/00 200,000 199,346
ING Bank
7.25% 06/12/06 150,000 148,875
ITT Corp. (new)
6.25% 11/15/00 75,000 72,854
Joy Technologies Inc.
10.25% 09/01/03 200,000 218,000
Kingdom of Sweden
10.25% 11/01/15 395,000 484,207
Korea Electric Power Corp.
7.75% 04/01/13 114,000 112,990
Landeskreditbank Baden
7.875% 04/15/04 160,000 168,014
- ----------
See Notes to Schedule of Investments and Financial Statements
30
<PAGE>
Schedule of Investments -- September 30, 1996
- --------------------------------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------------------------------
Lehman Brothers Inc.
7.00% 05/24/00 $170,000 $169,230
Liberty Mutual Insurance Co.
8.20% 05/04/07 150,000 156,924 (b)
8.50% 05/15/25 100,000 104,536 (b)
Loewen Group Interest
7.50% 04/15/01 125,000 124,375 (b)
Lumbermans Mutual Casualty Co.
9.15% 07/01/26 150,000 156,639 (b)
Mayne Nickless Ltd.
8.65% 04/15/02 100,000 106,833 (b)
Merrill Lynch & Co. Inc.
6.64% 09/19/02 90,000 88,315
Metropolitan Life Insurance Co.
7.80% 11/01/25 250,000 243,555 (b)
Midland Bank PLC
6.95% 03/15/11 310,000 293,139
National Bank of Hungary
8.875% 11/01/13 140,000 142,516
New York Taxable General Obligation
6.10% 02/01/98 150,000 148,838
North Atlantic Energy Corp.
9.05% 06/01/02 178,000 175,608
Nova Scotia Province of Canada
9.125% 05/01/21 105,000 121,670
Oryx Energy Co.
10.00% 06/15/99 150,000 158,830
Oslo Seismic
8.28% 06/01/11 135,000 136,364 (b)
Pennzoil Co.
10.625% 06/01/01 150,000 162,570
Peoples Republic of China
7.75% 07/05/06 105,000 105,403
Philip Morris Cos. Inc.
6.95% 06/01/06 250,000 251,290
Reliance Industries Ltd.
10.375% 06/24/16 100,000 102,068 (b)
Republic of Columbia
7.25% 02/15/03 100,000 94,599
Republic of Poland
3.75% 10/27/14 110,000 87,519
RHG Finance Corp.
8.875% 10/01/05 75,000 78,008
RJR Nabisco Inc.
8.00% 07/15/01 300,000 297,837
Taubman Realty Group L.P.
8.00% 06/15/99 160,000 161,875
TCI Communications Inc.
6.275% 09/15/03 30,000 30,000
6.69% 03/31/06 125,000 122,646
Tele-Communications Inc.
8.25% 01/15/03 70,000 70,525
8.75% 08/01/15 50,000 48,615
9.25% 04/15/02 100,000 106,032
Tenaga Nasional Berhad
7.50% 01/15/96 285,000 256,662 (b)
Thai Farmers Bank Public Ltd.
8.25% 08/21/16 170,000 165,485 (b)
Time Warner Entertainment Co. L.P.
10.15% 05/01/12 75,000 87,970
Time Warner Inc.
7.95% 02/01/00 150,000 153,451
Toledo Edison Co.
7.38% 03/31/00 250,000 235,787
United Co. Financial Corp.
7.00% 07/15/98 300,000 300,267
Viacom Inc.
7.75% 06/01/05 250,000 241,505
Yale University Notes
7.375% 04/15/96 100,000 97,550
Total Corporate Notes
(Cost $12,579,264) 12,441,905
Mortgage-Backed -- 55.4%
Federal Home Loan Mortgage Corp.
6.50% 03/01/04 - 04/01/11 544,784 529,303
7.00% 11/01/09 - 05/01/10 127,110 126,435
7.50% 06/01/23 - 02/01/26 532,791 527,365
8.00% 03/01/07 - 10/01/25 943,611 953,694
8.00% 08/01/08 25,669 26,259
8.75% 04/01/08 56,031 58,423
9.00% 12/01/16 552,893 580,449
9.50% 04/01/21 49,077 52,672
2,854,600
Federal National Mortgage Assoc.
6.00% 03/01/09 - 07/01/09 307,255 294,238
6.50% 01/01/04 48,401 47,561
7.00% TBA 1,835,000 1,770,775 (c)
7.50% 02/01/14 29,747 29,815
8.00% 12/01/24 1,054,773 1,065,975
8.00% TBA 738,000 744,573 (c)
8.50% 04/01/17 118,999 122,984
9.00% 12/01/24 - 02/01/25 980,078 1,022,604
9.50% 05/01/20 - 03/01/25 597,451 637,913
9.50% TBA 2,282,000 2,436,035 (c)
8,172,473
Government National Mortgage Assoc.
6.00% TBA 495,000 490,514 (c,e)
6.00% 07/20/26 - 08/20/26 823,693 821,951 (e)
6.50% TBA 495,000 496,547 (c,e)
7.00% 05/15/23 - 12/15/23 4,234,773 4,101,398
7.50% 03/15/22 - 12/15/23 6,197,426 6,154,932
8.00% 06/15/23 360,418 365,824
8.50% 10/15/17 1,150,927 1,204,756
9.00% 11/15/19 198,595 209,579
9.00% TBA 177,000 187,620 (c)
9.50% 12/15/09 454,163 489,928
14,523,049
- ----------
See Notes to Schedule of Investments and Financial Statements
31
<PAGE>
G.E. Fixed Income Fund
- --------------------------------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------------------------------
Collateralized Mortgage Obligations
Aetna Commercial Mortgage Trust
6.425% 12/26/30 $451,355 $446,842
American Southwest Financial
Securities Corp.
7.30% 10/17/01 47,626 47,760
Asset Securitization Corp.
7.10% 08/13/29 112,667 111,681
Collateralized Mortgage Obligation Trust
5.93% 09/01/15 119,647 99,726 (d,f)
7.36% 11/01/18 117,368 72,768 (d,f)
8.00% 01/01/17 755,434 765,331
Community Program Loan Trust
4.50% 10/01/18 300,000 250,219
CS First Boston Mortgage Securities Corp.
6.425% 08/20/30 140,047 139,172
DLJ Mortgage Acceptance Corp.
6.65% 12/17/27 73,719 72,820 (b)
6.85% 12/17/27 303,000 291,164 (b)
7.50% 02/18/03 208,170 210,512
7.58% 03/13/28 130,000 130,285 (b)
8.72% 06/28/26 284,448 286,048 (b)
FDIC REMIC Trust
7.85% 09/25/25 130,047 131,286
Federal Home Loan Mortgage Corp.
7.00% 07/01/26 955,140 352,805 (g)
8.00% 04/15/20 70,000 71,138
1009.00% 09/15/21 2,537 102,403 (g)
Federal National Mortgage Assoc.
6.19% 08/25/23 289,677 199,515 (d,f)
7.41% 03/25/21 245,000 246,608
8.00% 07/01/24 332,699 110,100 (g)
8.50% 03/01/17 - 07/25/22 554,543 175,912 (g)
8.58% 09/25/23 332,534 191,830 (d,f)
9.60% 09/25/23 87,000 48,720 (d,f)
Federal National Mortgage Assoc. REMIC
6.965% 07/25/10 80,000 78,200
6.97% 07/25/20 255,000 201,450 (d,f)
7.43% 09/25/22 277,315 211,973 (d,f)
8.58% 09/25/23 92,389 53,297 (d,f)
LB Commercial Conduit Mortgage Trust
7.144% 08/25/04 683,805 685,087
Merrill Lynch Mortgage Investor's Inc.
7.098% 05/25/15 251,796 249,987
7.252% 06/15/21 977,878 984,906
Mid-State Trust
8.33% 04/01/30 1,341,664 1,395,959
Morgan Stanley Capital Inc.
6.476% 10/15/10 158,252 154,147 (b)
7.51% 11/15/05 213,531 215,666 (b)
Provident Bank Home Equity Loan Trust
7.60% 10/25/12 170,000 170,425
Rural Housing Trust
6.33% 04/01/26 458,563 445,036
Sawgrass Finance REMIC Trust
6.45% 01/20/06 100,000 98,031
Structured Asset Securities Corp.
8.495% 04/25/27 474,270 482,570
Vornado Finance Corp.
6.36% 12/01/00 210,000 205,275 (b)
10,186,654
Total Mortgage-Backed
(Cost $35,681,201) 35,736,776
Foreign Denominated Notes-- 1.4%
Dutch Government
8.50% 06/01/06 NLG 336,000 231,690
Kingdom of Belgium
6.50% 03/31/05 BEL 10,261,000 335,832
Kingdom of Denmark
8.00% 03/15/06 DKK 1,904,000 348,061
Total Foreign Denominated Notes
(Cost $937,896) 915,583
Total Bonds and Notes
(Cost $62,033,631) 61,906,833
- --------------------------------------------------------------------------------
Number
of Shares
- --------------------------------------------------------------------------------
Preferred Stock -- 1.2%
Appalachian Power Co.
(Series A), 8.25% 1,450 35,888
Central Hispano Capital,
9.43% 4,800 124,800
Entergy Gulf States Inc.,
$1.75 6,435 158,584
Equity Residential Properties
Trust, 9.125% 4,250 107,312
Grand Metropolitan Delaware,
9.42% 3,500 97,125
Hibernia Corp., 6.9% 3,300 165,000
Post Properties Inc., 8.50% 1,720 86,000
Total Preferred Stock
(Cost $764,007) 774,709
Total Investments in Securities
(Cost $62,797,638) 62,681,542
- ----------
See Notes to Schedule of Investments and Financial Statements
32
<PAGE>
Schedule of Investments -- September 30, 1996
- --------------------------------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------------------------------
Short Term Investments -- 10.1%
- --------------------------------------------------------------------------------
U.S. Government Agencies and
Certificates of Deposits -- 7.4%
Deutsche Bank AG
5.75% 10/01/96 $ 590,000 $590,000
Federal Home Loan Mortgage Corp.
5.23% 10/15/96 500,000 498,983 (d)
5.38% 10/18/96 3,100,000 3,092,124 (d)
Federal National Mortgage Assoc.
5.20% 10/16/96 600,000 598,700 (d)
4,779,807
Repurchase Agreement -- 2.7%
State Street Bank and Trust Co.
5.40% 10/01/96
(Cost $1,700,000) 1,700,000 1,700,000
(dated 09/30/96, proceeds $1,700,255,
collateralized by $1,735,095 United States
Treasury Note, 8.375%, 08/15/08)
Total Short Term Investments
(Cost $6,479,807) 6,479,807
Other Assets and Liabilities,
net (7.2%) (4,622,122)
NET ASSETS -- 100% $64,539,227
FORWARD FOREIGN CURRENCY CONTRACTS
- --------------------------------------------------------------------------------
At September 30, 1996, the outstanding forward foreign currency contracts, which
contractually obligate the GE Fixed Income Fund to deliver currencies at a
specified date, were as follows:
U.S. $ Cost U.S. $
Foreign Currency Foreign on Origination Current Unrealized
Sales Contracts Currency Date Value Appreciation
- --------------------------------------------------------------------------------
BEL, expiring
10/28/96 10,825,950 $348,325 $345,006 $3,319
DKK, expiring
10/28/96 2,110,880 363,945 360,813 3,132
NLG, expiring
10/28/96 481,150 284,200 281,514 2,686
-------- -------- ------
$996,470 $987,333 $9,137
======== ======== ======
- ----------
See Notes to Schedule of Investments and Financial Statements
33
<PAGE>
GE Short-Term Government Fund
TWO YEAR TREASURY NOTE YIELD HISTORY
10/1/95 -- 9/30/96
30-Sep-95 5.851%
6-Oct-96 5.724%
13-Oct-96 5.655%
20-Oct-96 5.713%
27-Oct-96 5.617%
3-Nov-96 5.473%
10-Nov-96 5.522%
17-Nov-96 5.443%
24-Nov-96 5.484%
1-Dec-96 5.316%
8-Dec-96 5.391%
15-Dec-96 5.365%
22-Dec-96 5.3%
29-Dec-96 5.15%
6-Oct-96 5.724%
20-Oct-96 5.713%
3-Nov-96 5.473%
17-Nov-96 5.443%
1-Dec-96 5.316%
15-Dec-96 5.365%
29-Dec-96 5.15%
5-Jan-96 5.174%
12-Jan-96 5.164%
19-Jan-96 5.026%
26-Jan-96 5.05%
2-Feb-96 4.908%
9-Feb-96 4.873%
16-Feb-96 4.922%
23-Feb-96 5.127%
1-Mar-96 5.25%
8-Mar-96 5.736%
15-Mar-96 5.871%
22-Mar-96 5.746%
29-Mar-96 5.76%
5-Apr-96 6.06%
12-Apr-96 5.937%
19-Apr-96 5.908%
26-Apr-96 5.925%
3-May-96 6.179%
10-May-96 6.044%
17-May-96 6.019%
24-May-96 6.002%
31-May-96 6.236%
7-Jun-96 6.34%
14-Jun-96 6.264%
21-Jun-96 6.301%
28-Jun-96 6.106%
5-Jul-96 6.428%
12-Jul-96 6.282%
19-Jul-96 6.203%
26-Jul-96 6.275%
2-Aug-96 5.911%
9-Aug-96 5.898%
16-Aug-96 5.929%
23-Aug-96 6.116%
30-Aug-96 6.337%
6-Sep-96 6.32%
13-Sep-96 6.115%
20-Sep-96 6.244%
27-Sep-96 6.067%
Investment Profile
A mutual fund designed for investors who seek high current income and
preservation of capital by investing primarily in short-term U.S. Government
securities.
* Lipper Performance Comparison
Short-Term U.S. Government Peer Group
Based on 10/1/95 -- 9/30/96
total returns
Number of Funds in category: 161
Peer group average total return: 4.6%
Lipper categories in peer group: Short-Term U.S. Treasury,
Short U.S. Government,
Short-Intermediate U.S. Government
*See notes to performance for explanation of peer categories
See page 39 for Notes to Performance. Past performance is no guarantee of future
results.
Comparison of Change in Value of a $10,000 Investment
- --------------------------------------------------------------------------------
Class A Shares
QUARTERLY w/o load with load LB 1-3
- --------- -------- --------- ------
3/2/94 $10,000 $10,000 $10,000
Mar 31, 94 9,942.3 9,693.74 9,949
Jun 30, 94 9,939.96 9,691.46 9,949.88
9/94 10,039.62 9,788.63 10,049.39
Dec 30, 94 10,046.85 9,795.68 10,049.26
Mar 31, 95 10,323.98 10,065.88 10,382.28
Jun 30, 95 10,642.26 10,376.2 10,711.33
9/95 10,790.1 10,520.35 10,871.71
Dec 30, 95 11,023.38 10,747.79 11,138.03
Mar 30, 96 11,046.68 10,770.51 11,181.07
Jun 30, 96 11,135.85 10,857.45 11,298.75
9/96 11,289.72 11,007.48 11,488.39
Average Annual
Total Return
One Since
Year Inception
---- ---------
GE Short Term Gov't 4.63% 4.81%
GE Short Term Gov't w/load 2.01% 3.79%
LB 1-3 YR. 5.66% 5.53%
- --------------------------------------------------------------------------------
Class B Shares
QUARTERLY w/o load with load LB 1-3
- --------- -------- --------- ------
3/2/94 $10,000 $10,000 $10,000
Mar 31, 94 9,939.3 9,939.3 9,949
Jun 30, 94 9,936.92 9,936.92 9,949.88
9/94 10,019.58 10,019.58 10,049.39
Dec 30, 94 10,017.76 10,017.76 10,049.26
Mar 31, 95 10,285.38 10,285.38 10,382.28
Jun 30, 95 10,593.6 10,593.6 10,711.33
9/95 10,722.29 10,722.29 10,871.71
Dec 30, 95 10,944.67 10,944.67 11,138.03
Mar 30, 96 10,958.27 10,958.27 11,181.07
Jun 30, 96 11,037.1 11,037.1 11,298.75
9/96 11,189.26 10,989.26 11,488.39
Average Annual
Total Return
One Since
Year Inception
---- ---------
GE Short Term Gov't 4.35% 4.45%
GE Short Term Gov't w/load 1.38% 3.73%
LB 1-3 YR. 5.66% 5.53%
- --------------------------------------------------------------------------------
Class C Shares
QUARTERLY w/o load LB 1-3
- --------- -------- ------
3/2/94 $10,000 $10,000
Mar 31, 94 9,942.8 9,949
Jun 30, 94 9,955.14 9,949.88
9/94 10,052.77 10,049.39
Dec 30, 94 10,074.78 10,049.26
Mar 31, 95 10,359.1 10,382.28
Jun 30, 95 10,684.97 10,711.33
9/95 10,831.26 10,871.71
Dec 30, 95 11,081.52 11,138.03
Mar 30, 96 11,102.52 11,181.07
Jun 30, 96 11,208.51 11,298.75
9/96 11,370.47 11,488.39
Average Annual
Total Return
One Since
Year Inception
---- ---------
GE Short Term Gov't 4.98% 5.10%
LB 1-3 YR. 5.66% 5.53%
- --------------------------------------------------------------------------------
Class D Shares
QUARTERLY w/o load LB 1-3
- --------- -------- ------
3/2/94 $10,000 $10,000
Mar 31, 94 9,946.3 9,949
Jun 30, 94 9,964.81 9,949.88
9/94 10,068.86 10,049.39
Dec 30, 94 10,088.45 10,049.26
Mar 31, 95 10,379.78 10,382.28
Jun 30, 95 10,712.87 10,711.33
9/95 10,866.25 10,871.71
Dec 30, 95 11,124.38 11,138.03
Mar 30, 96 11,152.31 11,181.07
Jun 30, 96 11,265.73 11,298.75
9/96 11,435.67 11,488.39
Average Annual
Total Return
One Since
Year Inception
---- ---------
GE Short Term Gov't 5.24% 5.34%
LB 1-3 YR. 5.66% 5.53%
34
<PAGE>
Schedule of Investments -- September 30, 1996
GE SHORT-TERM GOVERNMENT FUND
U.S. Governments 70.8%
Corporate Notes 12.6%
Asset Backed 4.9%
Cash and Other 3.4%
Mortgage-Backed 8.3%
- --------------------------------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------------------------------
Bonds and Notes -- 96.6%
- --------------------------------------------------------------------------------
U.S. Governments -- 70.8%
Federal Home Loan Mortgage Corp.
6.00% 12/01/08 $136,409 $132,685
8.00% 08/01/03 386,214 394,542
527,227
Federal Home Loan Mortgage Corp. REMIC
543.497% 09/15/05 254 2,792 (g)
1002.00% 07/15/06 520 10,507 (g)
13,299
Federal National Mortgage Assoc.
7.151% 07/01/22 31,194 31,755 (e)
7.191% 05/01/21 172,467 179,905 (e)
8.159% 12/01/27 41,077 41,899 (e)
8.394% 12/01/17 50,551 52,242 (e)
8.885% 10/01/21 75,160 77,615 (e)
383,416
Federal National Mortgage Assoc. REMIC
7.26% 11/25/06 76,394 67,990 (d,f)
7.95% 11/25/19 73,095 73,980
141,970
Government National Mortgage Assoc.
6.50% 03/20/25 293,966 297,641 (e)
7.125% 05/20/22 - 06/20/24 548,163 556,728 (e)
7.25% 09/20/18 - 08/20/22 484,540 493,851 (e)
1,348,220
Tennessee Valley Authority
5.98% 04/01/36 300,000 301,257
U.S. Treasury Notes
5.00% 01/31/98 2,690,000 2,656,805
5.125% 02/28/98 350,000 345,898
5.50% 02/28/99 1,200,000 1,181,436
6.00% 08/15/99 505,000 501,450
6.125% 08/31/98 1,045,000 1,045,324
5,730,913
Total U.S. Governments
(Cost $8,481,651) 8,446,302
Asset Backed -- 4.9%
CIT RV Trust
5.40% 12/15/11 69,187 67,219
Fleetwood Credit Grantor Trust
6.00% 01/15/08 94,803 94,092
6.75% 10/17/11 88,399 88,510
6.90% 03/15/12 28,000 28,109
Ford Credit Auto Owner Trust
6.50% 11/15/99 110,000 110,377
Lehman FHA Title I Loan Trust
7.30% 05/25/17 89,296 89,464
Standard Credit Card Master Trust
4.65% 03/07/99 100,000 99,656
Total Asset Backed
(Cost $578,478) 577,427
Corporate Notes -- 12.6%
A T & T Capital Corp.
7.59% 01/31/97 100,000 100,590
Advanta Corp.
5.125% 11/15/96 100,000 99,901
Central Maine Power Co.
7.40% 06/02/98 100,000 99,759
First USA Bank
6.125% 10/30/97 100,000 100,032
General Motors Acceptance Corp.
8.375% 01/19/99 100,000 103,811
Great Atlantic & Pacific Tea Inc.
9.125% 01/15/98 168,000 172,596
Great Northern Nekoosa Corp.
9.125% 02/01/98 100,000 103,260
Lehman Brothers Holdings Inc.
6.875% 06/08/98 150,000 150,718
New York Taxable General Obligation
6.10% 02/01/98 100,000 99,225
News America Holdings Inc.
9.125% 10/15/99 110,000 116,844
Province of Manitoba
6.125% 05/28/98 125,000 124,710
Republic of Columbia
8.75% 10/06/99 50,000 51,438
Salomon Inc.
6.70% 12/01/98 75,000 74,906
United Co. Financial Corp.
7.00% 07/15/98 100,000 100,089
Total Corporate Notes
(Cost $1,501,272) 1,497,879
Mortgage-Backed -- 8.3%
Collateralized Mortgage Obligations
FDIC REMIC Trust
7.85% 09/25/25 139,336 140,664
Merrill Lynch Mortgage Investor's Inc.
7.252% 06/15/21 44,204 44,521
Rural Housing Trust
6.33% 04/01/26 121,547 117,961
- ----------
See Notes to Schedule of Investments and Financial Statements
35
<PAGE>
- --------------------------------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------------------------------
Salomon Brothers Mortgage
Securities Inc.
6.469% 01/20/28 $389,694 $385,188
Structured Asset Securities Corp.
6.87% 08/25/26 16,601 16,621
7.75% 02/25/28 283,590 286,603
Total Mortgage-Backed
(Cost $1,000,061) 991,558
Total Investments in Securities
(Cost $11,561,462) 11,513,166
- --------------------------------------------------------------------------------
Short Term Investments -- 2.6%
- --------------------------------------------------------------------------------
Repurchase Agreement -- 2.6%
State Street Bank and Trust Co.
5.40% 10/01/96
(Cost $310,000) 310,000 310,000
(dated 09/30/96, proceeds $310,047,
collateralized by $320,495 United
States Treasury Note, 8.375%, 08/15/08)
Other Assets and Liabilities,
net 0.8% 100,682
NET ASSETS -- 100% $11,923,848
- ----------
See Notes to Schedule of Investments and Financial Statements
36
<PAGE>
GE Money Market Fund
Investment Profile
A mutual fund designed for investors who seek current income and liquidity while
preserving their capital by investing in short-term, high grade money market
securities.
* Lipper Performance Comparison
Money Market Peer Group
Based on 10/1/95 -- 9/30/96
total returns
Number of Funds in peer group: 287
Peer group average total return: 4.9%
Lipper categories in peer group: Money Market
*See notes to performance for explanation of peer categories
See page 39 for Notes to Performance. Past performance is no guarantee of future
results.
Comparison of Change in Value of a $10,000 Investment
GE MONEY 90 DAY
MARKET T-BILL
------ ------
2/22/93 $10,000 $10,000
10,000 10,000
10,028.72 10,031
10,094.88 10,105.41
9/93 10,164.21 10,190.53
10,236.25 10,276.37
10,307.06 10,359.83
10,392.39 10,466.9
9/94 10,500.2 10,595.12
10627.61 10,737.72
10778.38 10,901.76
10928.54 11,069.41
9/95 11079.32 11,226.22
11227.98 11,388.65
11369.71 11,539.64
11509.01 11,691.47
9/96 11653.48 11,840.58
Average Annual
Total Return
One Since
Year Inception
---- ---------
GE Money Market 5.18% 4.33%
90 Day T-Bill 5.21% 4.82%
Fund Yield
Fund Donoghue
---- --------
7 day current 5.0% 4.9%
7 day effective 5.1% 5.0%
Current yield represents income earned on an investment in the Money Market Fund
for a seven day period and then annualized.
Effective yield is calculated similarly but is slightly higher because it
reflects the compounding effect of earnings on reinvested dividends.
An investment in the GE Money Market Fund is neither insured nor guaranteed by
the U.S. Government, and no assurance can be given that the GE Money Market Fund
will be able to maintain a stable net asset value of $1.00 per share.
Class Structure
The following describes each of the class definitions for the GE Funds' multiple
class structure, which is described in greater detail in the Funds' Prospectus.
Be sure to reference your appropriate performance chart.
Class A Shares are offered with a front-end load (as described in Note 1 of the
Notes to Financial Statements) through authorized dealers and are available to
anyone not eligible to invest in Class C or Class D. These shares are also
available to certain employee retirement plans seeking the additional services
available to Class A investors. The load is waived in certain instances as
described in the prospectus.
Class B Shares are offered with a back-end load through authorized dealers and
are available to anyone not eligible to invest in Class C or Class D. The
maximum contingent deferred sales load imposed on redemptions of this class of
shares (as a percentage of redemption proceeds) is 4.00% for equity funds and
3.00% for fixed income funds.
Class C Shares are no load shares available only to a limited group of investors
including employees and retirees of GE, and their family members.
Class D Shares are no load shares available only to certain qualified
institutions, including employee retirement plans that do not seek the
additional services available to Class A investors.
37
<PAGE>
Schedule of Investments -- September 30, 1996
GE MONEY MARKET FUND
U.S. Governments 32.2%
Certificates of Deposit and Other 35.6%
Commercial Paper 32.2%
- --------------------------------------------------------------------------------
Principal Amortized
Amount Cost
- --------------------------------------------------------------------------------
Short Term Investments -- 99.3%
- --------------------------------------------------------------------------------
U.S. Governments (d) -- 32.2%
Federal Farm Credit Bank
5.23% 10/15/96 $2,190,000 $2,185,546
Federal Home Loan Bank
5.34% 11/18/96 3,520,000 3,494,937
5.49% 03/06/97 3,300,000 3,221,493
6,716,430
Federal Home Loan Mortgage Corp.
5.26% 10/15/96 4,200,000 4,191,409
5.28% 10/10/96 2,200,000 2,197,096
5.38% 11/08/96 3,050,000 3,032,679
5.65% 10/01/96 530,000 530,000
9,951,184
Federal National Mortgage Assoc.
5.19% 11/27/96 2,220,000 2,201,757
5.25% 10/01/96 3,280,000 3,280,000
5.29% 12/17/96 3,360,000 3,322,019
8,803,776
Total U.S. Governments
(Cost $27,656,936) 27,656,936
Commercial Paper -- 32.2%
First Union Corp.
5.32% 10/17/96 3,360,000 3,352,056
Halifax Building Society
5.286% 11/15/96 3,300,000 3,278,195
Koch Industries
5.85% 10/01/96 3,000,000 3,000,000
Merrill Lynch & Co. Inc.
5.32% 10/01/96 2,300,000 2,300,000
Morgan (J.P.) & Co. Inc.
5.29% 10/04/96 2,910,000 2,908,717
Nationsbank Corp.
5.47% 10/18/96 3,350,000 3,341,347
Norwest Corp.
5.42% 10/22/96 3,090,000 3,080,230
Toronto Dominion Bank
5.45% 10/15/96 3,100,000 3,093,430
Union Bank of Switzerland
5.85% 10/01/96 3,310,000 3,310,000
Total Commercial Paper
(Cost $27,663,975) 27,663,975
Certificates of Deposit -- 34.7%
Algemene Bank Nederland N.V.
5.34% 10/03/96 3,300,000 3,300,000
Bank of Montreal
5.39% 11/26/96 3,200,000 3,200,000
Bank of Nova Scotia
5.43% 10/01/96 3,400,000 3,400,000
Bayerische Hypotheken Bank
5.40% 11/12/96 3,300,000 3,300,000
Bayerische Vereinsbank AG
5.37% 11/15/96 2,940,000 2,940,000
Deutsche Bank AG
5.34% 12/04/96 3,200,000 3,200,000
Dresdner Bank AG
5.40% 11/14/96 3,300,000 3,300,000
Royal Bank of Canada
5.35% 11/27/96 2,820,000 2,820,000
Societe Generale
5.50% 01/02/97 1,000,000 1,000,000
Swiss Bank
5.52% 12/20/96 3,300,000 3,300,000
Total Certificates of Deposit
(Cost $29,760,000) 29,760,000
Time Deposits -- 0.2%
State Street Cayman Islands
5.50% 10/01/96
(Cost $140,000) 140,000 140,000
Total Short Term Investments
(Cost $85,220,911) 85,220,911
Other Assets and Liabilities,
net 0.7% 620,774
NET ASSETS -- 100% $85,841,685
- ----------
See Notes to Schedule of Investments and Financial Statements
38
<PAGE>
Notes to Performance (unaudited)
Total returns assume changes in share price and reinvestment of dividends and
capital gains. Investment returns and net asset value on an investment will
fluctuate and you may have a loss or gain when you sell your shares. Classes A
and B assume the reduction of the maximum applicable sales charges as described
in Note 1 of the Notes to Financial Statements.
Shares of the GE Short-Term Government Fund are neither insured nor guaranteed
by the U.S. Government and their prices will fluctuate with market conditions.
A portion of the GE Tax-Exempt Fund's income may be subject to state, federal
and/or alternative minimum tax. Capital gains, if any, are subject to capital
gains tax.
GEIM has voluntarily agreed to waive and/or bear certain fees and Fund expenses.
Without these provisions, the returns (and/or yields) would have been lower.
These provisions may be terminated in the future.
The Standard & Poor's Composite Index of 500 Stocks (S&P 500), MSCI World Index,
MSCI Europe Australia Far East Index (MSCI EAFE), Lehman Brothers Aggregate Bond
Index (LB Aggregate), Lehman Brothers Municipal Bond Index (LBMI), Lehman
Brothers 1-3 Year Government Bond Index (LB 1-3 YR.) and the 90 Day U.S.
Treasury Index (90 Day T-Bill) are unmanaged indices and do not reflect the
actual cost of investing in the instruments that comprise each index. The S&P
500 Index is a composite of the prices of 500 widely held U.S. stocks recognized
by investors to be representative of the stock market in general. The MSCI World
Index is a composite of 1,561 stocks of companies in 22 countries representing
the European, Pacific Basin and American regions. The MSCI World Index is widely
used by global investors. The MSCI EAFE is a composite of 1,103 stocks of
companies in 20 countries located in Europe, Australia, New Zealand and the Far
East. The Lehman Brothers Aggregate Bond Index is a composite index of short,
medium, and long-term bond performance and is widely recognized as a barometer
of the bond market in general. The Lehman Brothers Municipal Bond Index is a
composite of investment-grade (Baa or greater), fixed-rate municipal bonds with
maturities greater than two years and is considered to be representative of the
municipal bond market. The LB 1-3 Year Government Bond Index is a composite of
government and U.S. Treasury obligations with maturities of 1-3 years. The 90
Day U.S. Treasury Index is the average return on three month U.S. Treasury
Bills. The results shown for the foregoing indices assume reinvestment of net
dividends or interest. Broad market index returns are calculated from the
nearest month end to the Funds' inception date. The majority of the broad market
returns are not available from the Funds' commencement of investment operations
through September 30, 1996. The Donahue yields represent the average yields of
814 taxable money market funds.
The peer universe of funds used in our peer ranking calculation is based on the
blend of Lipper peer categories, as shown. This blend is the same as the
category blend used by the Wall Street Journal (except for the GE Strategic
Investment Fund for which we use the specific Lipper peer group and the GE Money
Market Fund which is not in the Wall Street Journal). The actual number of funds
and numerical rankings in the Lipper and Wall Street Journal universes could
differ since the Wall Street Journal excludes certain funds which do not meet
their net asset or shareholder publication thresholds. Lipper is an independent
mutual fund rating service located in Summit, New Jersey.
The views expressed in this document reflect our judgement as of the publication
date and are subject to change at any time without notice. The securities cited
may not represent future holdings and should not be considered as a
recommendation to purchase or sell a particular security. See the prospectus for
complete descriptions of investment objectives, policies, risks and permissible
investments.
Notes to Schedules of Investments
(a) Non-income producing security.
(b) Pursuant to Rule 144A of the Securities Act of 1933, these securities may
be resold in transactions exempt from registration, normally to qualified
institutional buyers. At September 30, 1996, these securities amounted to
$466,250, $244,514, $765,159, $1,225,695 and $3,210,626 or 0.6%, 0.6%,
0.3%, 1.3%, and 5.0% of net assets for the GE International Equity, GE
Global Equity, GE U.S. Equity, GE Strategic Investment and GE Fixed Income
Funds, respectively.
(c) Settlement is on a delayed delivery or when issued basis with final
maturity to be announced (TBA) in the future.
(d) Coupon amount represents effective yield.
(e) Adjustable rate mortgage coupon. The stated rate represents the rate at
September 30, 1996.
(f) Principal only securities represent the right to receive the monthly
principal payments on an underlying pool of mortgages. No payments of
interest on the pool are passed through to the principal only holder.
(g) Interest only securities represent the right to receive the monthly
interest payments on an underlying pool of mortgages. Payments of principal
on the pool reduce the value of the interest only holding.
Abbreviations:
Currency Terms
BEL -- Belgian Franc
DKK -- Danish Krone
ITL -- Italian Lira
NLG -- Netherlands Guilder
ADR -- American Depository Receipt
AMBAC -- AMBAC Indemnity Corporation
GDR -- Global Depository Receipt
MBIA -- Municipal Bond Insurance Association
REMIC -- Real Estate Mortgage Investment Conduit
VRDN -- Variable Rate Demand Note
WT -- Warrant
Tax Information (unaudited)
Of the dividends paid from net investment income by the GE Tax-Exempt Fund for
the fiscal year ended September 30, 1996, 95.69% represented exempt interest
dividends for Federal income tax purposes.
39
<PAGE>
Financial Highlights
Selected data based on a share outstanding throughout the period(s) indicated
<TABLE>
<CAPTION>
Class A Class B
------- -------
GE International Equity Fund 9/30/96(e) 9/30/95 9/30/94 9/30/96(e) 9/30/95 9/30/94
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Inception date -- -- 3/2/94 -- -- 3/2/94
Net asset value, beginning of period $15.87 $15.18 $15.00 $15.77 $15.13 $15.00
Income (loss) from investment operations:
Net investment income 0.07 0.09 0.06 0.05 0.01 0.00
Net realized and unrealized
gains (losses) on investments 1.74 0.64 0.12 1.65 0.64 0.13
- ------------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from
investment operations 1.81 0.73 0.18 1.70 0.65 0.13
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions from:
Net investment income 0.03 0.04 0.00 0.00 0.01 0.00
Net realized gains 0.00 0.00 0.00 0.00 0.00 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions 0.03 0.04 0.00 0.00 0.01 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $17.65 $15.87 $15.18 $17.47 $15.77 $15.13
====================================================================================================================================
TOTAL RETURN (a) 11.39% 4.87% 1.20% 10.78% 4.33% 0.87%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $8,462 $3,948 $25 $272 $57 $34
Ratio of net investment income
to average net assets* 0.43% 1.28% 1.01% 0.28% 0.10% 0.47%
Ratio of expenses to average net assets* 1.59% 1.60% 1.60% 2.10% 2.10% 2.10%
Ratio of expenses to average net assets
before voluntary expense limitation* 1.66% 1.95% 1.93% 3.50% 3.50% 2.43%
Portfolio turnover rate 36% 27% 6% 36% 27% 6%
Average brokerage commissions (d) $.031 N/A N/A $.031 N/A N/A
- ------------------------------------------------------------------------------------------------------------------------------------
Class C Class D
------- -------
GE International Equity Fund 9/30/96(e) 9/30/95 9/30/94 9/30/96(e) 9/30/95 9/30/94
- ------------------------------------------------------------------------------------------------------------------------------------
Inception date -- -- 3/2/94 -- -- 3/2/94
Net asset value, beginning of period $15.88 $15.19 $15.00 $15.94 $15.22 $15.00
Income (loss) from investment operations:
Net investment income 0.11 0.12 0.00 0.17 0.12 0.10
Net realized and unrealized
gains (losses) on investments 1.72 0.65 0.19 1.73 0.70 0.12
- ------------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from
investment operations 1.83 0.77 0.19 1.90 0.82 0.22
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions from:
Net investment income 0.06 0.08 0.00 0.08 0.10 0.00
Net realized gains 0.00 0.00 0.00 0.00 0.00 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions 0.06 0.08 0.00 0.08 0.10 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $17.65 $15.88 $15.19 $17.76 $15.94 $15.22
====================================================================================================================================
TOTAL RETURN (a) 11.54% 5.16% 1.27% 11.97% 5.45% 1.47%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $3,230 $1,262 $481 $63,225 $32,907 $26,460
Ratio of net investment income
to average net assets* 0.68% 0.83% 0.66% 0.99% 0.97% 1.52%
Ratio of expenses to average net assets* 1.35% 1.35% 1.35% 1.03% 1.07% 1.10%
Ratio of expenses to average net assets
before voluntary expense limitation* 1.96% 2.75% 1.68% 1.03% 1.18% 1.43%
Portfolio turnover rate 36% 27% 6% 36% 27% 6%
Average brokerage commissions (d) $.031 N/A N/A $.031 N/A N/A
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Class A Class B
------- -------
GE Global Equity Fund 9/30/96 9/30/95 9/30/94(b) 9/30/96 9/30/95 9/30/94
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Inception date -- -- 12/22/93 -- -- 12/22/93
Net asset value, beginning of period $20.18 $19.34 $18.61 $20.14 $19.32 $18.48
Income (loss) from investment operations:
Net investment income 0.02 0.10 0.03 (0.04) 0.00 (0.01)
Net realized and unrealized
gains (losses) on investments 2.20 1.22 0.91 2.14 1.23 1.06
- -------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from
investment operations 2.22 1.32 0.94 2.10 1.23 1.05
- -------------------------------------------------------------------------------------------------------------------------------
Less distributions from:
Net investment income 0.02 0.09 0.01 0.00 0.02 0.01
Net realized gains 0.37 0.39 0.20 0.37 0.39 0.20
- -------------------------------------------------------------------------------------------------------------------------------
Total distributions 0.39 0.48 0.21 0.37 0.41 0.21
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $22.01 $20.18 $19.34 $21.87 $20.14 $19.32
===============================================================================================================================
TOTAL RETURN (a) 11.18% 7.16% 3.09% 10.61% 6.62% 5.70%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $4,054 $2,811 $694 $600 $356 $128
Ratio of net investment income/(loss)
to average net assets* 0.12% 0.47% 0.44% (0.34%) (0.11%) (0.08%)
Ratio of expenses to average net assets* 1.60% 1.60% 1.60% 2.10% 2.10% 2.10%
Ratio of expenses to average net assets
before voluntary expense limitation* 1.90% 2.17% 2.02% 3.50% 3.50% 2.52%
Portfolio turnover rate 46% 46% 26% 46% 46% 26%
Average brokerage commissions (d) $.006 N/A N/A $.006 N/A N/A
Class C Class D
------- -------
GE Global Equity Fund 9/30/96 9/30/95 9/30/94 9/30/93(c) 9/30/96 9/30/95 9/30/94
- ----------------------------------------------------------------------------------------------------------------------------------
Inception date -- -- -- 1/5/93 -- -- 11/29/93
Net asset value, beginning of period $20.31 $19.40 $17.16 $15.00 $20.37 $19.45 $17.49
Income (loss) from investment operations:
Net investment income 0.06 0.09 0.07 0.08 0.13 0.13 0.11
Net realized and unrealized
gains (losses) on investments 2.22 1.30 2.37 2.08 2.21 1.31 2.06
- ----------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from
investment operations 2.28 1.39 2.44 2.16 2.34 1.44 2.17
- ----------------------------------------------------------------------------------------------------------------------------------
Less distributions from:
Net investment income 0.04 0.09 0.00 0.00 0.09 0.13 0.01
Net realized gains 0.37 0.39 0.20 0.00 0.37 0.39 0.20
- ----------------------------------------------------------------------------------------------------------------------------------
Total distributions 0.41 0.48 0.20 0.00 0.46 0.52 0.21
Net asset value, end of period $22.18 $20.31 $19.40 $17.16 $22.25 $20.37 $19.45
==================================================================================================================================
TOTAL RETURN (a) 11.44% 7.47% 14.28% 14.10% 11.71% 7.76% 12.43%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $28,682 $23,683 $20,432 $11,999 $10,123 $9,785 $10,504
Ratio of net investment income/(loss)
to average net assets* 0.33% 0.59% 0.52% 1.00% 0.56% 0.84% 0.82%
Ratio of expenses to average net assets* 1.35% 1.35% 1.31% 1.10% 1.10% 1.10% 1.10%
Ratio of expenses to average net assets
before voluntary expense limitation* 1.60% 1.42% 1.77% 2.19% 1.12% 1.75% 1.52%
Portfolio turnover rate 46% 46% 26% 28% 46% 46% 26%
Average brokerage commissions (d) $.006 N/A N/A N/A $.006 N/A N/A
</TABLE>
- ----------
See Notes to Financial Highlights and Financial Statements
40
<PAGE>
Financial Highlights
Selected data based on a share outstanding throughout the period(s) indicated
<TABLE>
<CAPTION>
Class A Class B
------- -------
GE U.S. Equity Fund 9/30/96(e) 9/30/95(e) 9/30/94(b) 9/30/96(e) 9/30/95(e) 9/30/94
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Inception date -- -- 12/22/93 -- -- 12/22/93
Net asset value, beginning of period $20.28 $16.12 $16.48 $19.71 $16.03 $16.41
Income (loss) from investment operations:
Net investment income 0.31 .34 3.23 0.19 0.21 0.24
Net realized and unrealized
gains (losses) on investments 3.34 3.91 (3.22) 3.25 3.84 (0.25)
- ------------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from
investment operations 3.65 4.25 0.01 3.44 4.05 (0.01)
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions from:
Net investment income 0.32 0.00 0.20 0.31 0.28 0.20
Net realized gains 0.27 0.09 0.17 0.27 0.09 0.17
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions 0.59 0.09 0.37 0.58 0.37 0.37
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $23.34 $20.28 $16.12 $22.57 $19.71 $16.03
====================================================================================================================================
TOTAL RETURN (a) 18.36% 26.52% (0.86%) 17.78% 25.92% (0.09%)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $34,523 $15,148 $1,214 $7,194 $1,563 $91
Ratio of net investment income
to average net assets* 1.40% 1.85% 1.87% 0.90% 1.29% 1.28%
Ratio of expenses to average net assets* 1.00% 1.00% 1.00% 1.50% 1.50% 1.50%
Ratio of expenses to average net assets
before voluntary expense limitation* 1.15% 1.25% 1.46% 2.08% 3.50% 1.96%
Portfolio turnover rate 49% 43% 51% 49% 43% 51%
Average brokerage commissions (d) $.045 N/A N/A $.045 N/A N/A
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Class C Class D
------- -------
GE U.S. Equity Fund 9/30/96(e) 9/30/95(e) 9/30/94 9/30/93(c) 9/30/96(e) 9/30/95 9/30/94
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Inception date -- -- -- 1/5/93 -- -- 11/29/93
Net asset value, beginning of period $19.98 $16.13 $16.35 $15.00 $19.98 $16.16 $16.37
Income (loss) from investment operations:
Net investment income 0.36 0.37 1.00 0.12 0.40 0.38 0.32
Net realized and unrealized
gains (losses) on investments 3.30 3.86 (0.85) 1.23 3.31 3.88 (0.16)
- ------------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from
investment operations 3.66 4.23 0.15 1.35 3.71 4.26 0.16
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions from:
Net investment income 0.35 0.29 0.20 0.00 0.39 0.35 0.20
Net realized gains 0.27 0.09 0.17 0.00 0.27 0.09 0.17
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions 0.62 0.38 0.37 0.00 0.66 0.44 0.37
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $23.02 $19.98 $16.13 $16.35 $23.03 $19.98 $16.16
====================================================================================================================================
TOTAL RETURN (a) 18.70% 26.86% 0.88% 10.32% 18.97% 27.14% 0.96%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $50,035 $26,007 $16,382 $74,415 $144,470 $128,247 $114,885
Ratio of net investment income
to average net assets* 1.66% 2.12% 2.11% 1.86% 1.90% 2.36% 2.27
Ratio of expenses to average net assets* 0.75% 0.75% 0.62% 0.50% 0.50% 0.50% 0.50%
Ratio of expenses to average net assets
before voluntary expense limitation* 1.06% 1.19% 1.21% 1.34% 0.59% 0.71% 0.96%
Portfolio turnover rate 49% 43% 51% 15% 49% 43% 51%
Average brokerage commissions (d) $.045 N/A N/A N/A $.045 N/A N/A
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Class A Class B
------- -------
GE Strategic Investment Fund 9/30/96(e) 9/30/95(e) 9/30/94(b) 9/30/96(e) 9/30/95(e) 9/30/94
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Inception date -- -- 12/22/93 -- -- 12/22/93
Net asset value, beginning of period $18.43 $15.71 $16.21 $18.26 $15.62 $16.14
Income (loss) from investment operations:
Net investment income 0.51 0.52 0.48 0.41 0.40 0.27
Net realized and unrealized
gains (losses) on investments 1.90 2.57 (0.65) 1.87 2.58 (0.46)
- ------------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from
investment operations 2.41 3.09 (0.17) 2.28 2.98 (0.19)
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions from:
Net investment income 0.43 0.37 0.27 0.42 0.34 0.27
Net realized gains 0.08 0.00 0.06 0.08 0.00 0.06
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions 0.51 0.37 0.33 0.50 0.34 0.33
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $20.33 $18.43 $15.71 $20.04 $18.26 $15.62
====================================================================================================================================
TOTAL RETURN (a) 13.35% 20.12% (1.32%) 12.73% 19.53% (1.25%)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $25,232 $8,778 $1,104 $3,701 $882 $150
Ratio of net investment income
to average net assets* 2.60% 2.95% 2.59% 2.11% 2.46% 1.92%
Ratio of expenses to average net assets* 1.12% 1.15% 1.15% 1.65% 1.65% 1.65%
Ratio of expenses to average net assets
before voluntary expense limitation* 1.15% 1.19% 1.58% 2.10% 3.50% 2.08%
Portfolio turnover rate 93% 98% 68% 93% 98% 68%
Average brokerage commissions (d) $.046 N/A N/A $.046 N/A N/A
</TABLE>
<TABLE>
<CAPTION>
Class C Class D
------- -------
GE Strategic Investment Fund 9/30/96(e) 9/30/95(e) 9/30/94 9/30/93(c) 9/30/96(e) 9/30/95 9/30/94
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Inception date -- -- -- 1/5/93 -- -- 11/29/93
Net asset value, beginning of period $18.46 $15.72 $16.08 $15.00 $18.49 $15.74 $16.02
Income (loss) from investment operations:
Net investment income 0.54 0.53 0.44 0.23 0.63 0.55 0.45
Net realized and unrealized
gains (losses) on investments 1.92 2.59 (0.48) 0.85 1.90 2.62 (0.40)
- ------------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from
investment operations 2.46 3.12 (0.04) 1.08 2.53 3.17 0.05
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions from:
Net investment income 0.46 0.38 0.26 0.00 0.50 0.42 0.27
Net realized gains 0.08 0.00 0.06 0.00 0.08 0.00 0.06
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions 0.54 0.38 0.32 0.00 0.58 0.42 0.33
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $20.38 $18.46 $15.72 $16.08 $20.44 $18.49 $15.74
====================================================================================================================================
TOTAL RETURN (a) 13.58% 20.35% (0.27%) 8.06% 13.95% 20.70% 0.25%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $26,467 $17,821 $13,018 $12,780 $36,162 $18,665 $17,159
Ratio of net investment income
to average net assets* 2.81% 3.21% 2.62% 2.68% 3.16% 3.46% 2.93%
Ratio of expenses to average net assets* 0.90% 0.90% 0.85% 0.65% 0.58% 0.65% 0.65%
Ratio of expenses to average net assets
before voluntary expense limitation* 1.05% 1.03% 1.33% 1.65% 0.59% 0.97% 1.08%
Portfolio turnover rate 93% 98% 68% 20% 93% 98% 68%
Average brokerage commissions (d) $.046 N/A N/A N/A $.046 N/A N/A
</TABLE>
- ----------
See Notes to Financial Highlights and Financial Statements
41
<PAGE>
Financial Highlights (continued)
Selected data based on a share outstanding throughout the period(s) indicated
<TABLE>
<CAPTION>
Class A Class B
------- -------
GE Tax-Exempt Fund 9/30/96 9/30/95 9/30/94(b) 9/30/96 9/30/95 9/30/94
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Inception date -- -- 12/22/93 -- -- 12/22/93
Net asset value, beginning of period $11.77 $11.32 $12.31 $11.78 $11.32 $12.30
Income (loss) from investment operations:
Net investment income 0.51 0.53 0.39 0.45 0.47 0.34
Net realized and unrealized
gains (losses) on investments (0.10) 0.46 (1.00) (0.10) 0.47 (0.98)
- ---------------------------------------------------------------------------------------------------------------------------
Total income (loss) from
investment operations 0.41 0.99 (0.61) 0.35 0.94 (0.64)
- ---------------------------------------------------------------------------------------------------------------------------
Less distributions from:
Net investment income 0.51 0.54 0.38 0.45 0.48 0.34
Net realized gains 0.00 0.00 0.00 0.00 0.00 0.00
- ---------------------------------------------------------------------------------------------------------------------------
Total distributions 0.51 0.54 0.38 0.45 0.48 0.34
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.67 $11.77 $11.32 $11.68 $11.78 $11.32
===========================================================================================================================
TOTAL RETURN (a) 3.52% 8.96% (5.40%) 3.01% 8.51% (5.28%)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $537 $389 $53 $1,318 $689 $61
Ratio of net investment income
to average net assets* 4.33% 4.54% 4.34% 3.83% 3.81% 3.68%
Ratio of expenses to average net assets* 1.02% 1.10% 1.10% 1.52% 1.60% 1.60%
Ratio of expenses to average net assets
before voluntary expense limitation* 2.85% 3.00% 1.58% 2.41% 3.50% 2.08%
Portfolio turnover rate 145% 86% 23% 145% 86% 23%
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Class C Class D
------- -------
GE Tax-Exempt Fund 9/30/96 9/30/95 9/30/94 9/30/93(c) 9/30/96 9/30/95 9/30/94
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Inception date -- -- -- 1/5/93 -- -- 11/29/93
Net asset value, beginning of period $11.77 $11.32 $12.36 $12.00 $11.78 $11.32 $12.11
Income (loss) from investment operations:
Net investment income 0.53 0.57 0.54 0.33 0.58 0.60 0.47
Net realized and unrealized
gains (losses) on investments (0.09) 0.45 (1.06) 0.36 (0.12) 0.46 (0.80)
- ----------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from
investment operations 0.44 1.02 (0.52) 0.69 0.46 1.06 (0.33)
- ----------------------------------------------------------------------------------------------------------------------------------
Less distributions from:
Net investment income 0.54 0.57 0.52 0.33 0.57 0.60 0.46
Net realized gains 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total distributions 0.54 0.57 0.52 0.33 0.57 0.60 0.46
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.67 $11.77 $11.32 $12.36 $11.67 $11.78 $11.32
==================================================================================================================================
TOTAL RETURN (a) 3.77% 9.23% (4.30%) 5.48% 3.95% 9.59% (2.80%)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $7,728 $6,816 $6,917 $10,136 $2,960 $3,905 $4,995
Ratio of net investment income
to average net assets* 4.57% 4.94% 4.41% 3.56% 4.83% 5.20% 4.65%
Ratio of expenses to average net assets* 0.78% 0.85% 0.79% 0.60% 0.53% 0.60% 0.60%
Ratio of expenses to average net assets
before voluntary expense limitation* 1.34% 1.18% 1.33% 1.53% 1.03% 1.47% 1.08%
Portfolio turnover rate 145% 86% 23% 29% 145% 86% 23%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Class A Class B
------- -------
GE Fixed Income Fund 9/30/96 9/30/95 9/30/94(b) 9/30/96 9/30/95 9/30/94
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Inception date -- -- 12/22/93 -- -- 12/22/93
Net asset value, beginning of period $11.91 $11.27 $12.19 $11.91 $11.26 $12.15
Income (loss) from investment operations:
Net investment income 0.65 0.73 0.47 0.60 0.65 0.42
Net realized and unrealized
gains (losses) on investments (0.19) 0.63 (0.84) (0.20) 0.66 (0.81)
- ----------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from
investment operations 0.46 1.36 (0.37) 0.40 1.31 (0.39)
- ----------------------------------------------------------------------------------------------------------------------------------
Less distributions from:
Net investment income 0.68 0.72 0.47 0.61 0.66 0.42
Net realized gains 0.00 0.00 0.08 0.00 0.00 0.08
- ----------------------------------------------------------------------------------------------------------------------------------
Total distributions 0.68 0.72 0.55 0.61 0.66 0.50
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.69 $11.91 $11.27 $11.70 $11.91 $11.26
==================================================================================================================================
TOTAL RETURN (a) 3.91% 12.48% (3.02%) 3.41% 11.98% (3.31%)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $15,653 $5,400 $26,023 $1,673 $234 $65
Ratio of net investment income
to average net assets* 5.66% 6.22% 5.37% 5.19% 5.57% 4.83%
Ratio of expenses to average net assets* 1.05% 1.08% 1.10% 1.60% 1.60% 1.58%
Ratio of expenses to average net assets
before voluntary expense limitation* 1.12% 1.18% 1.51% 2.44% 3.50% 2.01%
Portfolio turnover rate 275% 315% 298% 275% 315% 298%
</TABLE>
<TABLE>
<CAPTION>
Class C Class D
------- -------
GE Fixed Income Fund 9/30/96 9/30/95 9/30/94 9/30/93(c) 9/30/96 9/30/95 9/30/94
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Inception date -- -- -- 1/5/93 -- -- 11/29/93
Net asset value, beginning of period $11.92 $11.27 $12.31 $12.00 $11.92 $11.27 $12.17
Income (loss) from investment operations:
Net investment income 0.69 0.73 0.61 0.36 0.72 0.77 0.55
Net realized and unrealized
gains (losses) on investments (0.21) 0.67 (0.96) 0.31 (0.22) 0.65 (0.83)
- ----------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from
investment operations 0.48 1.40 (0.35) 0.67 0.50 1.42 (0.28)
- ----------------------------------------------------------------------------------------------------------------------------------
Less distributions from:
Net investment income 0.70 0.75 0.61 0.36 0.73 0.77 0.54
Net realized gains 0.00 0.00 0.08 0.00 0.00 0.00 0.08
- ----------------------------------------------------------------------------------------------------------------------------------
Total distributions 0.70 0.75 0.69 0.36 0.73 0.77 0.62
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.70 $11.92 $11.27 $12.31 $11.69 $11.92 $11.27
==================================================================================================================================
TOTAL RETURN (a) 4.10% 12.81% (2.97%) 5.24% 4.32% 13.10% (2.34%)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $28,115 $21,401 $13,600 $11,485 $19,098 $6,642 $2,732
Ratio of net investment income
to average net assets* 5.84% 6.37% 5.22% 3.87% 6.14% 6.57% 5.40%
Ratio of expenses to average net assets* 0.85% 0.85% 0.79% 0.60% 0.55% 0.59% 0.58%
Ratio of expenses to average net assets
before voluntary expense limitation* 0.99% 0.95% 1.26% 1.63% 0.57% 2.50% 1.01%
Portfolio turnover rate 275% 315% 298% 68% 275% 315% 298%
</TABLE>
- ----------
See Notes to Financial Highlights and Financial Statements
42
<PAGE>
Financial Highlights (continued)
Selected data based on a share outstanding throughout the period(s) indicated
<TABLE>
<CAPTION>
Class A Class B
------- -------
GE Short-Term Government Fund 9/30/96 9/30/95 9/30/94 9/30/96 9/30/95 9/30/94
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Inception date -- -- 3/2/94 -- -- 3/2/94
Net asset value, beginning of period $11.91 $11.72 $12.00 $11.90 $11.72 $12.00
Income (loss) from investment operations:
Net investment income 0.60 0.64 0.35 0.56 0.59 0.33
Net realized and unrealized
gains (losses) on investments (0.06) 0.21 (0.30) (0.05) 0.21 (0.31)
- -----------------------------------------------------------------------------------------------------------------------
Total income from
investment operations 0.54 0.85 0.05 0.51 0.80 0.02
- -----------------------------------------------------------------------------------------------------------------------
Less distributions from:
Net investment income 0.61 0.66 0.33 0.57 0.62 0.30
Net realized gains 0.06 0.00 0.00 0.06 0.00 0.00
- -----------------------------------------------------------------------------------------------------------------------
Total distributions 0.67 0.66 0.33 0.63 0.62 0.30
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.78 $11.91 $11.72 $11.78 $11.90 $11.72
=======================================================================================================================
TOTAL RETURN (a) 4.63% 7.48% 0.40% 4.35% 7.01% 0.20%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $340 $285 $35 $145 $83 $25
Ratio of net investment income
to average net assets* 5.04% 5.27% 4.75% 4.67% 5.07% 4.38%
Ratio of expenses to average net assets* 0.95% 0.95% 0.95% 1.30% 1.30% 1.30%
Ratio of expenses to average net assets
before voluntary expense limitation* 3.00% 3.00% 1.71% 3.35% 3.35% 2.06%
Portfolio turnover rate 201% 415% 146% 201% 415% 146%
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Class C Class D
------- -------
GE Short-Term Government Fund 9/30/96 9/30/95 9/30/94 9/30/96 9/30/95 9/30/94
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Inception date -- -- 3/2/94 -- -- 3/2/94
Net asset value, beginning of period $11.91 $11.72 $12.00 $11.90 $11.72 $12.00
Income (loss) from investment operations:
Net investment income 0.63 0.66 0.36 0.66 0.69 0.39
Net realized and unrealized
gains (losses) on investments (0.05) 0.22 (0.30) (0.05) 0.21 (0.31)
- -----------------------------------------------------------------------------------------------------------------------
Total income from
investment operations 0.58 0.88 0.06 0.61 0.90 0.08
- -----------------------------------------------------------------------------------------------------------------------
Less distributions from:
Net investment income 0.64 0.69 0.34 0.67 0.72 0.36
Net realized gains 0.06 0.00 0.00 0.06 0.00 0.00
- -----------------------------------------------------------------------------------------------------------------------
Total distributions 0.70 0.69 0.34 0.73 0.72 0.36
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.79 $11.91 $11.72 $11.78 $11.90 $11.72
=======================================================================================================================
TOTAL RETURN (a) 4.98% 7.74% 0.53% 5.24% 7.92% 0.69%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $3,653 $2,437 $287 $7,786 $8,048 $7,822
Ratio of net investment income
to average net assets* 5.28% 5.62% 5.18% 5.54% 5.89% 5.32%
Ratio of expenses to average net assets* 0.70% 0.70% 0.70% 0.45% 0.45% 0.45%
Ratio of expenses to average net assets
before voluntary expense limitation* 1.34% 1.84% 1.46% 0.83% 0.98% 1.21%
Portfolio turnover rate 201% 415% 146% 201% 415% 146%
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GE Money Market Fund 9/30/96 9/30/95 9/30/94 9/30/93(c)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Inception date -- -- -- 1/5/93
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00
Income (loss) from investment operations:
Net investment income 0.05 0.05 0.03 0.02
Net realized and unrealized
gains (losses) on investments 0.00 0.00 0.00 0.00
- --------------------------------------------------------------------------------------------------------------------
Total income from investment operations 0.05 0.05 0.03 0.02
- --------------------------------------------------------------------------------------------------------------------
Less distributions from:
Net investment income 0.05 0.05 0.03 0.02
Net realized gains 0.00 0.00 0.00 0.00
- --------------------------------------------------------------------------------------------------------------------
Total distributions 0.05 0.05 0.03 0.02
- --------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $1.00 $1.00 $1.00 $1.00
====================================================================================================================
TOTAL RETURN (a) 5.18% 5.52% 3.31% 1.64%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $85,842 $71,664 $53,607 $17,197
Ratio of net investment income
to average net assets* 5.06% 5.32% 3.41% 2.27%
Ratio of expenses to average net assets* 0.45% 0.45% 0.45% 0.45%
Ratio of expenses to average net assets
before voluntary expense limitation* 0.66% 0.70% 1.04% 1.48%
</TABLE>
- ----------
Notes to Financial Highlights
(a) Total returns are historical and assume changes in share price,
reinvestment of dividends and capital gains, and assume no sales charge.
Had the advisor not absorbed a portion of expenses, total return would have
been lower. Periods less than one year are not annualized.
(b) Per share information is for the period since inception through September
30, 1994, and the total return information is for the period January 1,
1994, commencement of investment operations, through September 30, 1994.
(c) Per share information is for the period since inception through September
30, 1993, and the total return information is for the period February 22,
1993, commencement of investment operations, through September 30, 1993,
except for GE Tax-Exempt Fund, which is from February 26, 1993 through
September 30, 1993.
(d) For the fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for trades on
which commissions are charged. This rate does not reflect mark-ups,
mark-downs or spreads on shares traded on a principal basis.
(e) Per share data is based on average shares outstanding during the period.
Certain reclassifications have been made to prior year balances to conform
to the classifications used in 1996.
* Annualized for periods less than one year.
See Notes to Financial Statements
<PAGE>
Statements Of Assets
And Liabilities September 30, 1996
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
GE GE GE
INTERNATIONAL GLOBAL U.S.
EQUITY EQUITY EQUITY
FUND FUND FUND
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investments in securities, at market (cost $66,615,140,
$35,615,016, $184,645,848, $70,117,584, $12,044,928,
$62,797,638, $11,561,462, and $0, respectively) $ 72,352,179 $ 41,096,589 $223,295,548
Short term investments (at amortized cost) 1,580,000 2,078,983 11,365,000
Cash 0 0 16,064
Foreign currency (cost $960,413, $272,388,
$406, $143,781, $0, $0, $0,
and $0, respectively) 952,823 271,534 405
Receivable for investments sold 142,168 51,287 287,809
Income receivables 258,586 132,308 426,042
Receivable for fund shares sold 87,625 20,535 1,349,131
Receivable on forward foreign currency contracts 0 0 0
Deferred organizational costs 48,296 26,797 41,625
- -------------------------------------------------------------------------------------------------------------------
Total assets 75,421,677 43,678,033 236,781,624
- -------------------------------------------------------------------------------------------------------------------
LIABILITIES
Distributions payable to shareholders 0 0 0
Payable for investments purchased 112,668 133,303 353,459
Payable for fund shares repurchased 3,636 18,606 78,671
Payable to GEIM 115,057 64,915 127,474
Payable to custodian 765 1,854 0
- -------------------------------------------------------------------------------------------------------------------
Total liabilities 232,126 218,678 559,604
- -------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 75,189,551 $ 43,459,355 $236,222,020
===================================================================================================================
NET ASSETS CONSIST OF:
Capital paid in $ 67,224,609 $ 35,372,173 $174,390,310
Undistributed net investment income 484,828 107,597 2,857,691
Accumulated net realized gain (loss) 1,750,374 2,498,694 20,205,114
Net unrealized appreciation / (depreciation) on:
Investments 5,737,039 5,481,573 38,649,700
Futures 0 0 119,100
Written options 0 0 0
Foreign currency transactions (7,299) (682) 105
- -------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 75,189,551 $ 43,459,355 $236,222,020
===================================================================================================================
Class A:
Net assets $ 8,461,947 $ 4,054,663 $ 34,523,068
Shares outstanding ($.001 par value) 479,531 184,261 1,478,987
Net asset value per share $ 17.65 $ 22.01 $ 23.34
Maximum offering price per share $ 18.53 $ 23.11 $ 24.50
Class B:
Net assets $ 272,194 $ 599,838 $ 7,193,625
Shares outstanding ($.001 par value) 15,579 27,425 318,747
Net asset value per share* $ 17.47 $ 21.87 $ 22.57
Class C:
Net assets $ 3,230,410 $ 28,681,675 $ 50,034,782
Shares outstanding ($.001 par value) 182,985 1,293,185 2,173,778
Net asset value per share $ 17.65 $ 22.18 $ 23.02
Class D:
Net assets $ 63,225,000 $ 10,123,179 $144,470,545
Shares outstanding ($.001 par value) 3,560,095 454,974 6,272,480
Net asset value per share $ 17.76 $ 22.25 $ 23.03
</TABLE>
* Redemption price per share is equal to net asset value per share less any
applicable contingent deferred sales charge.
** GE Money Market Fund is a no load fund offering only one class of shares to
all investors.
- ----------
See Notes to Financial Statements.
44
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
GE GE GE GE GE
STRATEGIC TAX- FIXED SHORT-TERM MONEY
INVESTMENT EXEMPT INCOME GOVERNMENT MARKET
FUND FUND FUND FUND FUND**
- -------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
$ 81,104,684 $ 12,197,688 $ 62,681,542 $ 11,513,166 $ 0
11,490,591 0 6,479,807 310,000 85,220,911
1,325 84,127 1,024,764 8,677 4,920
142,807 0 0 0 0
389,012 565,844 2,469,560 17,019 0
444,638 200,324 720,204 103,399 177,994
19,511 11,555 35,043 2,466 749,738
0 0 9,137 0 0
26,798 21,853 31,739 48,295 21,853
- -------------------------------------------------------------------------------------------------
93,619,366 13,081,391 73,451,796 12,003,022 86,175,416
- -------------------------------------------------------------------------------------------------
0 8,028 52,321 9,380 57,774
1,954,592 500,390 8,785,082 17,000 0
28,603 5,607 12,336 147 223,212
74,417 24,392 62,830 52,647 52,745
0 0 0 0 0
- -------------------------------------------------------------------------------------------------
2,057,612 538,417 8,912,569 79,174 333,731
- -------------------------------------------------------------------------------------------------
$ 91,561,754 $ 12,542,974 $ 64,539,227 $ 11,923,848 $ 85,841,685
=================================================================================================
$ 77,937,249 $ 12,955,373 $ 68,528,850 $ 11,959,198 $ 85,805,725
1,623,000 44,788 95,901 22,580 44,818
1,015,111 (609,947) (3,978,654) (9,634) (8,858)
10,987,100 152,760 (116,096) (48,296) 0
0 0 0 0 0
0 0 0 0 0
(706) 0 9,226 0 0
- -------------------------------------------------------------------------------------------------
$ 91,561,754 $ 12,542,974 $ 64,539,227 $ 11,923,848 $ 85,841,685
=================================================================================================
$ 25,231,655 $ 536,849 $ 15,652,888 $ 339,526 $ 0
1,241,211 46,010 1,339,392 28,810 0
$ 20.33 $ 11.67 $ 11.69 $ 11.78 $ 0
$ 21.34 $ 12.19 $ 12.21 $ 12.08 $ 0
$ 3,700,795 $ 1,318,566 $ 1,673,148 $ 145,164 $ 0
184,645 112,872 142,959 12,324 0
$ 20.04 $ 11.68 $ 11.70 $ 11.78 $ 0
$ 26,466,866 $ 7,727,634 $ 28,114,641 $ 3,653,363 $ 85,841,685
1,298,772 662,201 2,403,229 309,790 85,850,615
$ 20.38 $ 11.67 $ 11.70 $ 11.79 $ 1.00
$ 36,162,438 $ 2,959,925 $ 19,098,550 $ 7,785,795 $ 0
1,769,483 253,604 1,633,266 660,802 0
$ 20.44 $ 11.67 $ 11.69 $ 11.78 $ 0
</TABLE>
45
<PAGE>
Statements Of Operations
For the year ended September 30, 1996
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
GE GE GE
INTERNATIONAL GLOBAL U.S.
EQUITY EQUITY EQUITY
FUND FUND FUND
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
Income:
Dividends $ 1,179,977 $ 599,600 $ 4,435,493
Interest 140,684 98,183 632,975
Less: Foreign taxes withheld (142,115) (53,874) (41,456)
- --------------------------------------------------------------------------------------------------------
Total income 1,178,546 643,909 5,027,012
- --------------------------------------------------------------------------------------------------------
Expenses:
Advisory and administration fees 464,327 287,004 836,061
Distribution fees
Class A 28,518 16,518 123,210
Class B 1,879 4,691 43,357
Class C 5,389 64,606 95,381
Blue Sky
Class A 7,393 7,228 8,411
Class B 6,515 6,621 6,573
Class C 9,369 21,392 15,808
Class D 22,191 11,800 48,597
Transfer agent
Class A 3,793 7,706 15,867
Class B 1,924 4,374 16,401
Class C 6,836 82,174 81,766
Class D 16,833 2,313 9,989
Trustees' fees 3,935 3,008 15,306
Custody and accounting 6,839 5,220 26,565
Professional fees 40,783 31,180 158,683
Registration 7,082 5,414 27,553
Amortization of deferred organization
expense 18,347 19,402 30,016
Other 14,870 11,372 57,861
- --------------------------------------------------------------------------------------------------------
Total expenses before waiver 666,823 592,023 1,617,405
Less: Expenses waived or borne by
the advisor (24,972) (85,533) (309,241)
- --------------------------------------------------------------------------------------------------------
Net expenses 641,851 506,490 1,308,164
- --------------------------------------------------------------------------------------------------------
Net investment income 536,695 137,419 3,718,848
========================================================================================================
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Realized gain (loss) on:
Investments 2,140,832 2,608,823 20,483,986
Futures 0 0 888,676
Written options 0 0 31,735
Foreign currency transactions (69,965) (43,438) (4,017)
Increase (decrease) in unrealized
appreciation/depreciation on:
Investments 3,648,065 1,436,241 10,336,087
Futures 0 0 120,150
Written options 0 0 4,320
Foreign currency transactions (10,228) 1,375 (198)
- --------------------------------------------------------------------------------------------------------
Net realized and unrealized gain
(loss) on investments 5,708,704 4,003,001 31,860,739
- --------------------------------------------------------------------------------------------------------
Net increase in net assets
resulting from operations $ 6,245,399 $ 4,140,420 $ 35,579,587
========================================================================================================
</TABLE>
- ----------
See Notes to Financial Statements.
46
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
GE GE GE GE GE
STRATEGIC TAX- FIXED SHORT-TERM MONEY
INVESTMENT EXEMPT INCOME GOVERNMENT MARKET
FUND FUND FUND FUND FUND
- -------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
$ 763,219 $ 0 $ 14,209 $ 0 $ 0
1,862,384 641,858 3,684,621 688,149 4,521,005
(30,172) 0 (375) (262) 0
- -------------------------------------------------------------------------------------------
2,595,431 641,858 3,698,455 687,887 4,521,005
- -------------------------------------------------------------------------------------------
243,374 42,029 192,880 34,453 205,219
70,248 2,322 62,401 1,743 0
24,715 11,328 10,963 1,163 0
56,162 18,259 63,128 7,883 0
8,385 6,581 9,886 6,540 0
6,647 6,551 6,555 6,529 0
17,070 15,734 20,045 10,420 38,976
15,442 11,394 7,273 16,166 0
14,371 1,295 5,274 1,449 0
8,769 2,063 3,575 824 0
49,616 16,391 43,827 4,535 159,234
17,000 319 3,828 947 0
4,231 1,069 3,081 966 6,405
7,353 1,858 5,359 1,678 11,120
43,846 11,097 31,955 10,021 66,426
7,614 1,927 5,549 1,741 11,534
19,401 15,866 22,941 18,348 15,866
15,987 4,034 11,650 3,656 24,250
- -------------------------------------------------------------------------------------------
630,231 170,117 510,170 129,062 539,030
(53,026) (74,915) (56,349) (66,598) (169,636)
- -------------------------------------------------------------------------------------------
577,205 95,202 453,821 62,464 369,394
- -------------------------------------------------------------------------------------------
2,018,226 546,656 3,244,634 625,423 4,151,611
===========================================================================================
1,142,947 57,428 (1,228,965) (1,342) (5,488)
0 0 6,476 0 0
(132,368) 0 0 0 0
(8,335) 0 54,512 0 0
5,541,959 (157,166) (607,341) (58,761) 0
0 0 0 0 0
38,144 0 0 0 0
3,601 0 6,950 0 0
- -------------------------------------------------------------------------------------------
6,585,948 (99,738) (1,768,368) (60,103) (5,488)
- -------------------------------------------------------------------------------------------
$ 8,604,174 $ 446,918 $ 1,476,266 $ 565,320 $ 4,146,123
===========================================================================================
</TABLE>
47
<PAGE>
Statement Of Changes
In Net Assets
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
GE GE GE
INTERNATIONAL GLOBAL U.S.
EQUITY EQUITY EQUITY
FUND FUND FUND
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended
September September September September September September
30, 1996 30, 1995 30, 1996 30, 1995 30, 1996 30, 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income $ 536,695 $ 292,459 $ 137,419 $ 216,432 $ 3,718,848 $ 3,231,756
Net realized gain (loss) on investments,
futures, written options, and
foreign currency transactions 2,070,867 (337,917) 2,565,385 415,492 21,400,380 1,669,029
Net increase (decrease) in unrealized
appreciation/depreciation 3,637,837 1,716,419 1,437,616 1,771,654 10,460,359 29,031,181
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase from operations 6,245,399 1,670,961 4,140,420 2,403,578 35,579,587 33,931,966
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (6,640) (85) (2,429) (4,762) (262,767) 0
Class B 0 (45) 0 (213) (33,028) (2,872)
Class C (5,998) (4,356) (47,344) (101,076) (515,508) (300,089)
Class D (206,019) (171,765) (29,722) (77,394) (2,441,173) (2,525,130)
Net realized gains
Class A 0 0 (54,657) (19,779) (220,116) (12,003)
Class B 0 0 (7,141) (4,264) (29,002) (914)
Class C 0 0 (439,601) (446,448) (397,494) (94,068)
Class D 0 0 (126,339) (229,385) (1,698,965) (647,519)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (218,657) (176,251) (707,233) (883,321) (5,598,053) (3,582,595)
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
operations and distributions 6,026,742 1,494,710 3,433,187 1,520,257 29,981,534 30,349,371
- ------------------------------------------------------------------------------------------------------------------------------------
Share transactions:
Proceeds from sale of shares
Class A 4,999,853 4,108,324 1,784,436 2,331,228 20,169,488 12,433,013
Class B 264,006 65,940 248,489 260,340 5,416,144 1,432,986
Class C 2,057,845 1,027,313 6,612,036 6,650,382 22,892,916 8,583,711
Class D 46,890,336 17,424,643 4,132,262 3,165,696 64,219,284 66,777,376
Value of distributions reinvested
Class A 6,640 85 56,966 24,540 483,588 12,000
Class B 0 45 7,140 4,476 62,916 3,784
Class C 5,587 4,212 477,266 533,926 897,146 386,529
Class D 206,019 171,765 156,060 306,780 4,140,136 3,144,247
Cost of shares redeemed
Class A (1,078,451) (576,926) (903,662) (374,151) (4,687,102) (680,682)
Class B (65,189) (46,018) (53,819) (58,967) (409,610) (80,582)
Class C (327,094) (295,940) (4,463,175) (5,042,589) (5,137,572) (3,885,378)
Class D (21,970,397) (12,205,061) (4,662,441) (4,445,663) (72,772,334) (80,082,954)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) from
share transactions 30,989,155 9,678,382 3,391,558 3,355,998 35,275,000 8,044,050
- ------------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets 37,015,897 11,173,092 6,824,745 4,876,255 65,256,534 38,393,421
NET ASSETS
Beginning of period 38,173,654 27,000,562 36,634,610 31,758,355 170,965,486 132,572,065
- ------------------------------------------------------------------------------------------------------------------------------------
End of period $ 75,189,551 $ 38,173,654 $ 43,459,355 $ 36,634,610 $236,222,020 $170,965,486
====================================================================================================================================
Undistributed net investment
income, end of period $ 484,828 $ 218,407 $ 107,597 $ 78,059 $ 2,857,691 $ 2,397,013
</TABLE>
* GE Money Market Fund is a no load Fund offering only one class of shares to
all investors
- ----------
See Notes to Financial Statements.
48
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
GE GE GE GE GE
STRATEGIC TAX- FIXED SHORT-TERM MONEY
INVESTMENT EXEMPT INCOME GOVERNMENT MARKET
FUND FUND FUND FUND FUND*
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended
September September September September September September September September September September
30, 1996 30, 1995 30, 1996 30, 1995 30, 1996 30, 1995 30, 1996 30, 1995 30, 1996 30, 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 2,018,226 $ 1,196,476 $ 546,656 $ 549,458 $ 3,244,634 $ 1,542,054 $ 625,423 $ 553,483 $ 4,151,611 $ 3,466,116
1,002,244 296,527 57,428 (518,751) (1,167,977) (911,507) (1,342) 92,476 (5,488) 0
5,583,704 5,579,652 (157,166) 926,079 (600,391) 1,964,369 (58,761) 87,066 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
8,604,174 7,072,655 446,918 956,786 1,476,266 2,594,916 565,320 733,025 4,146,123 3,466,116
- ------------------------------------------------------------------------------------------------------------------------------------
(224,561) (29,230) (20,080) (5,971) (709,900) (306,883) (17,871) (4,851) 0 0
(36,223) (5,064) (43,346) (4,896) (57,106) (7,292) (6,475) (2,070) 0 0
(480,651) (340,668) (333,411) (313,359) (1,490,082) (1,099,467) (169,713) (86,748) (4,151,611) (3,466,116)
(515,952) (460,723) (149,794) (225,257) (1,011,836) (142,189) (442,799) (480,304) 0 0
(44,020) 0 0 0 0 0 (1,457) 0 0 0
(7,310) 0 0 0 0 0 (405) 0 0 0
(89,301) 0 0 0 0 0 (13,646) 0 0 0
(88,357) 0 0 0 0 0 (33,443) 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
(1,486,375) (835,685) (546,631) (549,483) (3,268,924) (1,555,831) (685,809) (573,973) (4,151,611) (3,466,116)
- ------------------------------------------------------------------------------------------------------------------------------------
7,117,799 6,236,970 (99,713) 407,303 (1,792,658) 1,039,085 (120,489) 159,052 (5,488) 0
- ------------------------------------------------------------------------------------------------------------------------------------
17,883,706 7,182,929 184,398 332,712 14,465,090 5,700,365 729,588 247,621 0 0
2,827,055 786,579 910,235 629,874 1,637,270 255,439 89,871 70,000 0 0
8,576,408 4,463,118 2,158,514 1,118,157 10,046,924 8,923,222 1,743,456 2,185,367 177,814,977 185,442,103
25,183,286 7,201,248 0 0 20,655,949 6,272,781 1,694,811 167,065 0 0
268,659 29,239 10,092 3,506 690,901 300,894 14,905 4,195 0 0
42,201 5,063 28,592 4,370 47,491 6,850 4,689 2,041 0 0
553,077 327,979 272,411 257,523 1,206,983 912,679 174,763 84,867 3,800,372 3,344,476
472,353 460,719 147,775 225,255 991,882 141,112 469,809 480,184 0 0
(3,072,661) (535,113) (42,587) (2,873) (4,397,297) (26,636,640) (684,827) (3,158) 0 0
(281,702) (131,483) (289,191) (10,148) (211,360) (100,613) (30,407) (15,199) 0 0
(2,710,357) (2,565,433) (1,436,700) (1,692,201) (4,014,201) (3,031,354) (666,107) (152,811) (167,432,164)(170,729,355)
(11,444,286) (8,746,818) (1,100,006) (1,500,060) (8,464,459) (2,526,883) (2,349,374) (544,992) 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
38,297,739 8,478,027 843,533 (633,885) 32,655,173 (9,782,148) 1,191,177 2,525,180 14,183,185 18,057,224
- ------------------------------------------------------------------------------------------------------------------------------------
45,415,538 14,714,997 743,820 (226,582) 30,862,515 (8,743,063) 1,070,688 2,684,232 14,177,697 18,057,224
46,146,216 31,431,219 11,799,154 12,025,736 33,676,712 42,419,775 10,853,160 8,168,928 71,663,988 53,606,764
- ------------------------------------------------------------------------------------------------------------------------------------
$ 91,561,754 $ 46,146,216 $12,542,974 $11,799,154 $64,539,227 $33,676,712 $11,923,848 $10,853,160 $85,841,685 $71,663,988
====================================================================================================================================
$ 1,623,000 $ 955,672 $ 44,788 $ 32,478 $ 95,901 $ 47,858 $ 22,580 $ 15,666 $ 44,818 $ 32,532
</TABLE>
49
<PAGE>
Statement of Changes
In Net Assets (continued)
Changes In Fund Shares
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
GE GE GE
INTERNATIONAL GLOBAL U.S.
EQUITY EQUITY EQUITY
FUND FUND FUND
- --------------------------------------------------------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended
September September September September September September
30, 1996 30, 1995 30, 1996 30, 1995 30, 1996 30, 1995
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CLASS A:
Shares sold by subscription 294,637 284,516 85,979 121,585 920,456 708,859
Issued for distributions reinvested 405 6 2,868 1,382 23,382 760
Shares redeemed (64,247) (37,459) (43,891) (19,572) (211,845) (37,975)
- --------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in Fund shares 230,795 247,063 44,956 103,395 731,993 671,644
================================================================================================================================
CLASS B:
Shares sold by subscription 15,817 4,284 11,994 13,889 255,210 77,863
Issued for distributions reinvested 0 3 360 252 3,135 246
Shares redeemed (3,843) (2,941) (2,589) (3,099) (18,909) (4,451)
- --------------------------------------------------------------------------------------------------------------------------------
Net increase in Fund shares 11,974 1,346 9,765 11,042 239,436 73,658
================================================================================================================================
CLASS C:
Shares sold by subscription 122,659 67,513 319,353 349,633 1,066,216 489,072
Issued for distributions reinvested 341 295 23,887 30,042 44,064 24,846
Shares redeemed (19,472) (20,008) (216,093) (266,651) (238,075) (227,802)
- --------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in Fund shares 103,528 47,800 127,147 113,024 872,205 286,116
================================================================================================================================
CLASS D:
Shares sold by subscription 2,756,412 1,129,189 197,330 167,151 3,068,016 3,838,354
Issued for distributions reinvested 12,531 11,978 7,803 17,187 203,647 202,724
Shares redeemed (1,273,543) (814,812) (230,524) (244,112) (3,416,836) (4,733,502)
- --------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in Fund shares 1,495,400 326,355 (25,391) (59,774) (145,173) (692,424)
================================================================================================================================
</TABLE>
* GE Money Market Fund is a no load Fund offering only one class of shares to
all investors.
- ----------
See Notes to Financial Statements.
50
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
GE GE GE GE GE
STRATEGIC TAX- FIXED SHORT-TERM MONEY
INVESTMENT EXEMPT INCOME GOVERNMENT MARKET
FUND FUND FUND FUND FUND*
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended
September September September September September September September September September September
30, 1996 30, 1995 30, 1996 30, 1995 30, 1996 30, 1995 30, 1996 30, 1995 30, 1996 30, 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
906,804 435,194 15,739 28,305 1,202,556 495,095 61,992 20,854 0 0
14,267 1,910 857 304 58,607 26,214 1,258 354 0 0
(156,140) (31,089) (3,612) (244) (375,267) (2,376,760) (58,394) (265) 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
764,931 406,015 12,984 28,365 885,896 (1,855,451) 4,856 20,943 0 0
====================================================================================================================================
148,617 45,807 76,606 53,644 137,322 22,118 7,523 5,935 0 0
2,264 332 2,434 377 4,042 589 396 174 0 0
(14,530) (7,429) (24,675) (860) (18,027) (8,853) (2,586) (1,280) 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
136,351 38,710 54,365 53,161 123,337 13,854 5,333 4,829 0 0
====================================================================================================================================
443,753 272,667 183,515 97,435 843,984 774,361 146,513 185,888 177,814,977 185,465,791
29,341 21,452 23,130 22,483 101,965 78,996 14,742 7,195 3,800,372 3,320,860
(139,805) (157,028) (123,355) (151,987) (338,433) (264,064) (56,042) (13,001) (167,432,164) (170,729,355)
- ------------------------------------------------------------------------------------------------------------------------------------
333,289 137,091 83,290 (32,069) 607,516 589,293 105,213 180,082 14,183,185 18,057,296
====================================================================================================================================
1,328,680 415,926 0 0 1,711,763 527,225 142,334 14,219 0 0
25,058 30,112 12,532 19,730 84,091 12,081 39,635 40,870 0 0
(593,811) (526,586) (90,536) (129,315) (719,913) (224,431) (197,251) (46,499) 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
759,927 (80,548) (78,004) (109,585) 1,075,941 314,875 (15,282) 8,590 0 0
====================================================================================================================================
</TABLE>
51
<PAGE>
Notes to Financial Statements -- September 30, 1996
- --------------------------------------------------------------------------------
1. Organization of the Funds
GE Funds (the "Trust") is registered under the Investment Company Act of 1940
(as amended) as an open-end management investment company. The Trust was
organized as a Massachusetts business trust on August 10, 1992, and is
authorized to issue an unlimited number of shares. It is comprised of eleven
investment portfolios (the "Funds") only eight of which are currently being
offered, as follows: GE International Equity Fund, GE Global Equity Fund, GE
U.S. Equity Fund, GE Strategic Investment Fund, GE Tax-Exempt Fund, GE Fixed
Income Fund, GE Short-Term Government Fund and GE Money Market Fund. The Funds
(except GE Money Market Fund) are presently authorized to issue four classes of
shares.
Between the Funds' effective date (January 5, 1993) and the commencement of
investment operations, the Funds' adviser absorbed all expenses. The
commencement dates were as follows: GE International Equity Fund - Classes A, B,
C, and D and GE Short-Term Government Fund - Classes A, B, C, and D - March 2,
1994; Class A, all other funds - January 1, 1994; Class B, all other funds -
December 22, 1993; Class D, all other funds - November 29, 1993; Class C, GE
Tax-Exempt Fund - February 26, 1993; Class C, all other funds, including the
single class of the GE Money Market Fund - February 22, 1993.
Maximum Sales Load Imposed on Purchases of Class A Shares
(as a percentage of offering price):
4.75% 4.25% 2.50%
- --------------------------------------------------------------------------------
GE International Equity Fund GE Tax-Exempt Fund GE Short-Term
GE Global Equity Fund GE Fixed Income Fund Government Fund
GE U.S. Equity Fund
GE Strategic Investment Fund
Maximum Contingent Deferred Sales Load
(as a percentage of redemption proceeds):
1.00% 3.00% 4.00%
- --------------------------------------------------------------------------------
Class A* All funds -- --
Class B -- GE Tax-Exempt Fund GE International Equity Fund
GE Fixed Income Fund GE Global Equity Fund
GE Short-Term GE U.S. Equity Fund
Government Fund GE Strategic Investment Fund
The maximum contingent deferred sales load for Class B redemptions for all
Funds, after the first year, is as follows: 3.00% within the second year, 2.00%
within the third year, 1.00% within the fourth year, and 0.00% thereafter.
No sales charges or redemption fees are assessed by the Trust with respect to
Class C and Class D shares and shares of GE Money Market Fund.
* Imposed only for shares redeemed within one year of purchase which were
subject to no front end sales charge by virtue of being part of a purchase
of $1 million or more.
2. Summary of Significant Accounting Policies
The following summarizes the significant accounting policies of the Trust:
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results may differ from those estimates.
Security Valuation and Transactions
Securities for which exchange quotations are readily available are valued at the
last sale price, or if no sales occurred on that day, at the last quoted bid
price. Certain fixed income securities are valued by a dealer or by a pricing
service based upon a computerized matrix system, which considers market
transactions and dealer supplied valuations. Valuations for municipal bonds are
based on prices obtained from a qualified municipal bond pricing service; prices
represent the mean of the secondary market.
Futures contracts are valued at the settlement price established each day by the
board of trade or exchange on which they are principally traded. Options that
are written or purchased are valued using the mean between the last asked and
bid prices. Forward foreign currency contracts are valued at the mean between
the bid and the offered forward rates as last quoted by a recognized dealer.
Short term investments maturing within 60 days are valued at amortized cost or
original cost plus accrued interest, each of which approximates fair value.
52
<PAGE>
Notes to Financial Statements -- September 30, 1996
- --------------------------------------------------------------------------------
Portfolio positions which cannot be valued as set forth above are valued at fair
value determined under procedures approved by the Trustees.
GE Money Market Fund values its securities using the amortized cost method,
which values securities initially at cost and thereafter assumes a constant
amortization to maturity of any discount or premium. Amortized cost approximates
market value.
Transactions are accounted for as of the trade date. Cost is determined and
gains and losses are based upon the specific identification method for both
financial statement and federal tax purposes.
The Funds will accrue distribution fees, blue sky fees and transfer agent fees
to the respective class. Each Fund's income, expenses (other than the fees
mentioned above) and realized and unrealized gains and losses are allocated
proportionally each day among the classes based upon the relative net assets of
each class.
Foreign Currency
Accounting records of the Funds are maintained in U.S. dollars. Investment
securities and other assets and liabilities and purchases and sales of
investment securities denominated in a foreign currency are translated to U.S.
dollars at the prevailing exchange rate on the respective dates of such
transactions.
The Funds do not isolate the portion of the results of operations resulting from
changes in foreign exchange rates on investments from the fluctuations arising
from changes in market prices of securities held. Such fluctuations are included
in the net realized and unrealized gain or loss from investments. Reported net
realized exchange gains or losses from foreign currency transactions represent
sale of foreign currencies, currency gains or losses between the trade date and
the settlement date on securities transactions, realized gains and losses on
forward foreign currency contracts, and the difference between the amounts of
dividends, interest, and foreign withholding taxes recorded on the Funds' books,
and the U.S. dollar equivalent of the amounts actually received or paid. Net
unrealized foreign exchange gains and losses arise from changes in the value of
assets and liabilities, other than investments in securities at fiscal year end,
as a result of changes in the exchange rate.
Income Taxes
It is each Fund's policy to comply with all sections of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income, tax-exempt income, and gains to its shareholders and, therefore,
no provision for federal income tax has been made. Each Fund is treated as a
separate taxpayer for federal income tax purposes.
Capital loss carryovers are available to offset future realized capital gains.
To the extent that these carryover losses are used to offset future capital
gains, it is probable that the gains so offset will not be distributed to
shareholders because they would be taxable as ordinary income. At September 30,
1996, the Funds had capital loss carryovers as follows:
Fund Amount Expires
- --------------------------------------------------------------------------------
GE Tax-Exempt Fund $ 56,890 2002
97,452 2003
455,605 2004
GE Fixed Income Fund 2,559,595 2003
38,636 2004
GE Short-Term Government Fund 161 2004
GE Money Market Fund 3,370 2003
Any net capital and currency losses incurred after October 31, within the Fund's
tax year, are deemed to arise on the first day of the Fund's next tax year if
the Fund so elects to defer such losses. The Funds incurred and elected to defer
net capital and currency losses as follows, during the period in fiscal 1996:
GE Fixed Income Fund $1,366,561
GE Short-Term Government Fund 443
GE Money Market Fund 5,488
Investment Income
Corporate actions (including cash dividends) are recorded net of nonreclaimable
tax withholdings on the ex-dividend date, except for certain foreign securities
for which corporate actions are recorded as soon as such information is
available. Interest income is recorded on the accrual basis. All discounts and
premiums on taxable bonds and premiums on tax exempt bonds are amortized to call
or maturity date, whichever is shorter using the effective yield method. For tax
exempt bonds purchased before May 1, 1993, only original issue discount is
amortized. For tax exempt bonds purchased after April 30, 1993, both market
discount and original issue discount are amortized.
53
<PAGE>
Notes to Financial Statements -- September 30, 1996
- --------------------------------------------------------------------------------
Expenses
Expenses of the Trust which are directly identifiable to a specific Fund are
allocated to that Fund. Expenses which are not readily identifiable to a
specific Fund are allocated in such a manner as deemed equitable, taking into
consideration the nature and type of expense and the relative sizes of the
Funds. All expenses of the Funds are paid by the Investment Adviser and
reimbursed by the Funds up to the voluntary expense limitations.
Distributions to Shareholders
GE Tax-Exempt Fund, GE Fixed Income Fund, GE Short-Term Government Fund and GE
Money Market Fund declare investment income dividends daily and pay monthly. GE
International Equity Fund, GE Global Equity Fund, GE U.S. Equity Fund and GE
Strategic Investment Fund declare and pay dividends of net investment income
annually. All Funds declare and pay net realized capital gain distributions
annually. The character of income and gains to be distributed are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles. These differences include treatment of realized and
unrealized gains and losses on forward foreign currency transactions, paydown
gains and losses on mortgage-backed securities, losses on wash sale
transactions, and deferred organization expenses. Reclassifications are made to
the Funds' capital accounts to reflect income and gains available for
distribution (or available capital loss carryovers) under income tax
regulations. The calculation of net investment income per share in the Financial
Highlights table excludes these adjustments.
Deferred Organizational Costs
Organizational expenses applicable to the Funds have been deferred and are being
amortized on a straight-line basis over a period of five years from commencement
of investment operations.
When Issued Securities
The Funds may purchase or sell securities on a when-issued or forward commitment
basis. Payment and delivery may take place a month or more after the date of the
transaction. The price of the underlying securities and the date when the
securities will be delivered and paid for are fixed at the time the transaction
is negotiated. This may increase the risk if the other party involved in the
transaction fails to deliver and causes the Fund to subsequently invest at less
advantageous yields. In connection with such purchases, the Fund is required to
hold liquid assets as collateral with the Funds' custodian sufficient to cover
the purchase price, unless they enter into an offsetting contract for the sale
of equal securities and value.
Forward Foreign Currency Contracts
A forward foreign currency contract ("Forward") is an agreement between two
parties to buy and sell a currency at a set price on a future date. The market
value of the Forward fluctuates with changes in currency exchange rates. The
Forward is marked-to-market daily and the change in the market value is recorded
by the Fund as an unrealized gain or loss. When the Forward is closed, the Fund
records a realized gain or loss equal to the difference between the value at the
time it was opened and the value at the time it was closed. The Fund could be
exposed to risk if a counterparty is unable to meet the terms of the contract or
if the value of the currency changes unfavorably. The Fund may enter into
Forwards in connection with planned purchases and sales of securities, to hedge
specific receivables or payables against changes in future exchange rates or to
hedge the U.S. dollar value of portfolio securities denominated in a foreign
currency.
Repurchase Agreements
The Funds' custodian takes possession of the collateral pledged for investments
in repurchase agreements on behalf of the Funds. It is the policy of the Funds
to value the underlying collateral daily on a mark-to-market basis to determine
that the value, including accrued interest, is at least equal to the repurchase
price. In the event of default of the obligation to repurchase, the Funds have
the right to liquidate the collateral and apply the proceeds in satisfaction of
the obligation.
54
<PAGE>
Notes to Financial Statements -- September 30, 1996
- --------------------------------------------------------------------------------
Futures and Options
The Funds, other than the GE Money Market Fund, may invest in futures contracts
and purchase and write options. These investments involve, to varying degrees,
elements of market risk and risks in excess of the amount recognized in the
Statements of Assets and Liabilities. The face or contract amounts reflect the
extent of the involvement the Funds have in the particular classes of these
instruments. Risks may be caused by an imperfect correlation between movements
in the price of the instruments and the price of the underlying securities and
interest rates. Risks also may arise if there is an illiquid secondary market
for the instruments, or an inability of counterparties to perform. The Funds
will invest in these instruments for the following reasons: to hedge against the
effects of changes in value of portfolio securities due to anticipated changes
in interest rates and/or market conditions, to equitize a cash position, for
duration management, or when the transactions are economically appropriate to
reduce the risk inherent in the management of the Fund involved.
Upon entering into a futures contract, the Fund is required to deposit either
cash or securities in an amount (initial margin) equal to a certain percentage
of the contract value. Subsequent payments (variation margin) are made or
received by the Fund each day. The variation margin payments are equal to the
daily changes in the contract value and are recorded as unrealized gains and
losses. The Fund recognizes a realized gain or loss when the futures contract is
closed. The Fund will realize a gain or loss upon the expiration or closing of
an option transaction. When an option is exercised, the proceeds on sales for a
written call option, the purchase cost for a written put option, or the proceeds
on the sale of the security for a purchased put or cost of the security for a
call option is adjusted by the amount of premium received or paid.
Other
There are certain additional risks involved when investing in foreign securities
that are not inherent in domestic securities. These risks may involve foreign
currency exchange rate fluctuations, adverse political and economic developments
and the imposition of unfavorable foreign governmental laws and restrictions.
3. Fees and Compensation Paid to Affiliates
Advisory and Administration Fees
Compensation of GE Investment Management Incorporated ("GEIM"), the Fund's
Investment Adviser and Administrator, a wholly owned subsidiary of General
Electric Company, for investment advisory and administrative services, is paid
monthly based on the average daily net assets of each Fund. Such advisory and
administration fees are based on the annual rates listed in the table below.
Until further notice, GEIM has agreed to reduce other operating expenses
(exclusive of advisory, administration and distribution fees) for each Fund as
indicated in the following table:
Annualized based on average daily net assets
Advisory and Limitation of Other
Administration Fees Operating Expenses
- --------------------------------------------------------------------------------
GE International Equity Fund .80% .30%
GE Global Equity Fund .75% .35%
GE U.S Equity Fund .40% .10%
GE Strategic Investment Fund .35% .30%
GE Tax-Exempt Fund .35%* .25%
GE Fixed Income Fund .35% .25%
GE Short-Term Government Fund .30% .15%
GE Money Market Fund .25% .20%
* Effective July 18, 1996, GEIM agreed to waive the advisory and
administration fees for the GE Tax-Exempt Fund until further notice.
Distribution Fee
The Funds have adopted a Shareholder Servicing and Distribution Plan ("the
Plan") pursuant to Rule 12b-1 under the Investment Company Act of 1940 with
respect to each Fund except the GE Money Market Fund. Each Fund pays GE
Investment Services Inc. ("GEIS"), a wholly owned subsidiary of GEIM and the
Funds' principal underwriter, a monthly fee for shareholder and distribution
services provided, at an annual rate of .50% of the average daily net assets of
Class A of all applicable Funds, 1.00% for Class B of all applicable Funds
(except GE Short-Term Government Fund which is .85%), and .25% for Class C of
all applicable Funds. Currently Class D is not subject to a 12b-1 fee plan.
55
<PAGE>
Notes to Financial Statements -- September 30, 1996
- --------------------------------------------------------------------------------
Other
The Funds pay no compensation to their Trustees who are employees of GEIM.
Trustees who are not GEIM employees receive an annual fee of $10,000 and an
additional fee of $500 for each Trustees' meeting attended.
For the year ended September 30, 1996, GEIS acting as underwriter received net
commissions of $6,764 from the sale of Class A shares and $24,142 in contingent
deferred sales charges from redemptions of Class A and Class B shares.
GNA Corporation, a wholly owned subsidiary of General Electric Company, acts as
Blue Sky administrator for the GE Funds. Fees paid to GNA of approximately
$40,000, are included in Blue Sky expenses in the Statement of Operations.
4. Aggregate Unrealized Appreciation and Depreciation
Aggregate gross unrealized appreciation/(depreciation) of investments for each
Fund at September 30, 1996, were as follows:
Net
Gross Gross Unrealized
Unrealized Unrealized Appreciation
Appreciation Depreciation (Depreciation)
- --------------------------------------------------------------------------------
GE International
Equity Fund $ 8,874,318 $3,137,279 $ 5,737,039
GE Global Equity
Fund 7,237,238 1,755,665 5,481,573
GE U.S. Equity
Fund 40,674,584 2,024,884 38,649,700
GE Strategic
Investment Fund 11,886,661 899,561 10,987,100
GE Tax-Exempt
Fund 199,353 46,593 152,760
GE Fixed
Income Fund 342,151 458,247 (116,096)
GE Short-Term
Government Fund 20,771 69,067 (48,296)
The aggregate cost of each Fund's investments was substantially the same for
book and federal income tax purposes at September 30, 1996.
5. Options
During the period ended September 30, 1996, the following option contracts were
written:
GE U.S. Equity Fund GE Strategic Investment Fund
----------------------- ----------------------------
Number Number
of Contracts Premium of Contracts Premium
- --------------------------------------------------------------------------------
Balance as of
September
30, 1995 19 $ 11,280 39 $ 73,981
Written 214 66,008 0 0
Closed and
Expired (154) (45,326) (39) (73,981)
Exercised (79) (31,962) (0) (0)
- --------------------------------------------------------------------------------
Balance as
of September
30, 1996 0 $ 0 0 $ 0
================================================================================
6. Investment Transactions
The cost of purchases and the proceeds from sales of investments, other than
U.S. Government obligations, short-term securities and options, for the period
ended September 30, 1996, were:
Purchases Sales
- --------------------------------------------------------------------------------
GE International
Equity Fund $ 50,434,243 $ 19,555,870
GE Global
Equity Fund 19,180,450 16,801,890
GE U.S. Equity Fund 130,107,932 97,361,589
GE Strategic
Investment Fund 35,998,709 13,260,079
GE Tax-Exempt Fund 18,971,661 16,545,279
GE Fixed Income Fund 35,249,406 19,219,177
GE Short-Term
Government Fund 3,098,583 2,089,053
56
<PAGE>
The cost of purchases and the proceeds from sales of long-term U.S. Government
obligations for the period ended September 30, 1996, were:
Purchases Sales
- --------------------------------------------------------------------------------
GE U.S. Equity Fund $ 1,034,822 $ 423,304
GE Strategic
Investment Fund 55,300,788 44,340,890
GE Fixed Income Fund 143,977,297 125,945,501
GE Short-Term
Government Fund 21,098,755 20,276,852
7. Beneficial Interest
The schedule below shows the number of shareholders each owning 5% or more of a
Fund and the total percentage of the Fund held by such shareholders.
5% or Greater Shareholders
--------------------------
Number % of Fund Held
- --------------------------------------------------------------------------------
GE International Equity Fund 4 85%
GE Global Equity Fund 3 28%
GE U.S. Equity Fund 6 43%
GE Strategic Investment Fund 5 56%
GE Tax-Exempt Fund 1 24%
GE Fixed Income Fund 4 36%
GE Short-Term Government Fund 2 63%
GE Money Market Fund 1 10%
At September 30, 1996, GE Company owned 24% and 39%, respectively, of the shares
outstanding of the GE Tax-Exempt and GE Short-Term Government Funds.
57
<PAGE>
Report of Independent Accountants
TO THE SHAREHOLDERS AND TRUSTEES OF GE FUNDS
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of GE International Equity Fund, GE
Global Equity Fund, GE U.S. Equity Fund, GE Strategic Investment Fund, GE
Tax-Exempt Fund, GE Fixed Income Fund, GE Short-Term Government Fund and GE
Money Market Fund, each a series of GE Funds (the "Trust"), at September 30,
1996, and the results of their operations, the changes in their net assets and
the financial highlights for the periods indicated, in conformity with generally
accepted accounting principles. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Trust's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at September 30, 1996 by
correspondence with the custodian and brokers, and the application of
alternative auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Boston, Massachusetts
November 12, 1996
58
<PAGE>
GE Funds Investment Team
Portfolio Managers
GE International Equity Fund
GE Global Equity Fund
Ralph R. Layman
GE U.S. Equity Fund
Eugene K. Bolton
Christopher D. Brown
David B. Carlson
Peter J. Hathaway
A. John Kohlhepp
Paul C. Reinhardt
GE Strategic Investment Fund
David B. Carlson
Robert A. MacDougall
GE Tax-Exempt Fund
Stella V. Lou
GE Fixed Income Fund
GE Short-Term Government Fund
GE Money Market Fund
Robert A. MacDougall
Investment Adviser
and Administrator
GE Investment Management Incorporated
Trustees
Michael J. Cosgrove
John R. Costantino
Alan M. Lewis
William J. Lucas
Robert P. Quinn
Secretary
Matthew J. Simpson
Treasurer
Jeffrey A. Groh
Distributor
GE Investment Services Inc.
Member NASD and SIPC
Counsel
Willkie Farr & Gallagher
Custodian
State Street Bank & Trust Company
Independent Accountants
Price Waterhouse LLP
Officers of the Investment Adviser
Dale F. Frey, Chairman of the Board and President
Eugene K. Bolton, EVP, Domestic Equities
Michael J. Cosgrove, EVP, Mutual Funds
Ralph R. Layman, EVP, International Equities
Alan M. Lewis, EVP, General Counsel and Secretary
John H. Myers, EVP, Fixed Income and Alternative Investments
Geoffrey R. Norman, EVP, Institutional Marketing
Don W. Torey, EVP, Finance and Administration
60
<PAGE>
Shareholder Inquiries
Shareholder Services has embarked on an ambitious program of service upgrades
which will be apparent to all our shareholders in the coming months. Among the
areas of improvement will be our telephone technology, account transactional
processing and universal availability of our daily fund prices in the media. Our
first order of business is to redesign and improve the Automated Voice Response
System, which is accessed nearly one million times a year (over 3,500 calls per
day). These numbers show us that our shareholders have readily utilized this
service in making investment decisions.
The new user-friendly Automated Voice Response System, which will be available
24 hours a day, 7 days a week, is in the planning stage. Here is a brief list of
the various functions expected to be included in the final version, which will
have more simplified and understandable menu selection:
* Obtain information on prices, yields and returns - current as well as
historic
* Create a personal portfolio to hear prices, yields and returns only of
those funds you own or funds you may wish to track
* Obtain account balance - individual investments and total portfolio
Shortly before the conversion occurs, shareholders will receive a brochure with
detailed instructions on how to use the new System.
We hope you will be as excited as we are by this service upgrade once you have
experienced it. We welcome your comments and suggestions.
Class A and B investor: Call your investment professional or 1-800-735-4547
Class C investor: Call the GE Funds Inquiry Center at 1-800-242-0134
Address inquiries regarding
the Funds to: Address inquiries regarding your account to:
GE Funds GE Funds
3003 Summer Street P.O. Box 8309
P.O. Box 120065 Boston, MA 02266-8309
Stamford, CT 06912-0065
Class D investor: Contact your designated GE Investment's
account representative
401(k) plan investor: Call your company's designated plan number
- --------------------------------------------------------------------------------
This report has been prepared for shareholders and may be distributed to others
only if preceded or accompanied by a current prospectus.
<PAGE>
GE Funds
3003 Summer Street
Stamford, CT 06904-7900
Bulk Rate
U.S. Postage
PAID
Canton, MA
Permit No. 313
Distributed by GE Investment Services Inc., member NASD and SIPC
