GE Funds
GE FUNDS ANNUAL REPORT
September 30, 1997
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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
International Funds 3
o GE International Equity Fund
o GE Global Equity Fund
GE Premier Growth Equity Fund 12
GE U.S. Equity Fund 15
GE Mid-Cap Growth Fund 20
GE Value Equity Fund 24
GE Strategic Investment Fund 29
GE Tax-Exempt Fund 37
Fixed Income Funds 43
o GE Fixed Income Fund
o GE Government Securities Fund
o GE Short-Term Government Fund
o GE Money Market Fund
Notes to Performance 58
Notes to Schedules of Investments 59
Financial Statements 60
Financial Highlights, Statements of Assets and
Liabilities, Operations, and Changes in Net Assets
Notes 80
Notes to the Financial Statements
Report of Independent Accountants 88
Tax Information 89
GE Funds Investment Team 90
Shareholder Inquiries Inside Back Cover
How you can obtain more information
Highly Rated GE Funds
BY MORNINGSTAR
Through September 30, 1997
[GRAPHIC]
4 STARS
Overall and 3 year Ratings
Funds Number of Funds
Fund/Class Peer Group in Peer Group
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GE GLOBAL EQUITY - C & D International Equity 601
GE US EQUITY - A, B C & D
GE VALUE EQUITY - A & B Domestic Equity 2,143
GE SHORT-TERM GOV'T. - D Taxable Bond 1,309
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Morningstar is an independent fund ranking company that seeks to provide a
non-biased 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, 1997. 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 90-day T-bill
returns. 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 three years of performance history. No
class of GE Funds has either a five or ten year performance history with the
exception of class B of GE Government Securities Fund which has five and ten
year performance history. Star ratings for the classes of shares not shown above
were lower than those shown. Investment return and principal value of an
investment will fluctuate and you may have a gain or loss when you sell your
shares. The adviser 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 dividends and capital gains. Past performance is no guarantee of
future results.
<PAGE>
A LETTER FROM THE PRESIDENT
DEAR SHAREHOLDER:
We are pleased to provide you with the GE Funds 1997 annual report. Before
discussing performance and a review of the market, we would like to share a
recent development within the GE Funds.
On September 26, 1997, GE Funds acquired the assets of the Investors Trust
Funds. As a result of this acquisition, three new funds were added to our fund
family: GE Mid-Cap Growth, GE Value Equity and GE Government Securities. This
acquisition has increased the amount of assets in GE Funds from $1 billion to
more than $1.5 billion. More important, it gives you, our valued shareholder, an
even greater level of investment flexibility in seeking your financial goals.
[PHOTO]
Michael J. Cosgrove
Additionally, in our ongoing effort to provide the highest level of superior
service, we strengthened our shareholder services operations by enhancing
certain features (please refer to the inside back cover for details). As always,
we will continue to search for new ways to ensure the investment experience
through GE Funds is the most convenient in the industry.
Performance Highlights
The GE Family of Funds generated solid performance for investors in 1997.
Despite some periodic market volatility, all of our equity funds achieved
double-digit average annual returns for both the applicable one year and three
year periods ended September 30, 1997 while the GE Premier Growth Equity Fund
achieved a double digit return since its inception. The majority of our fund
classes, excluding loads, outperformed the average returns of their peers on a
one year and three year basis as measured at September 30, 1997 by Lipper
Analytical Services, an independent mutual fund rating service. The Lipper
Analytical Services average returns for all fund categories and complete details
on each fund's performance, including reductions for the effect of loads, can be
found on the various fund performance profiles contained in this annual report.
You will also notice in this report that many of our funds have received
favorable star ratings from Morningstar, an independent fund ranking company
which analyzes risk-adjusted performance. Refer to the inside front cover to see
our highly rated Morningstar funds.
Market Review
The financial markets recorded solid performance over the twelve months ended
September 30, 1997. The main reason was a generally good economic environment.
For much of the period, corporate earnings were strong, inflation was subdued
and interest rates remained low. Mutual fund inflows, a major engine behind the
stock market advances in the U.S. and abroad, also contributed to the general
uptrend in equity prices. The market was not without some
1
<PAGE>
A LETTER FROM THE PRESIDENT (CONTINUED)
problems. Federal Reserve chairman Alan Greenspan's now famous "irrational
exuberance" speech last December temporarily pushed down stock prices.
Additionally, fears of higher wage inflation following the settlement of the UPS
strike in August caused market jitters. But stocks rebounded from both setbacks
and ended the twelve-month period with the major market indices hovering near
record levels.
The bond market, both taxable and non-taxable, performed well in late 1996 when
interest rates fell on a series of lower-than-expected economic reports, but in
early 1997, the market drifted lower as rates rose due to signs the economy was
picking up steam. Then, on March 25, 1997 the Federal Reserve did something it
hadn't done in more than two years. It raised short-term interest rates in a
preemptive strike against inflation. From there, however, except for a brief
upturn in rates in August, the bond market fared well, bolstered by economic
reports confirming robust growth and modest inflation.
Most European markets enjoyed solid performance, as companies benefitted from
the corporate restructuring taking place on the Continent. Japan's economy
continued to be mired in a slump, though signs of a rebound appeared early in
1997. We continue to believe European stocks offer good upside potential.
Economic conditions remain relatively sound and valuations are still attractive.
Our outlook for Japan is not as optimistic. However, if the Japanese economy
begins to show a sustained turnaround, that opinion could change.
Market Outlook
Near-term, we are concerned over the currency turmoil in southeast Asia and
its potential impact on both U.S. and international markets. Longer-term,
we remain positive on both domestic and non-U.S. securities due to
generally favorable economic and market conditions.
We appreciate your investment in the GEFunds. As always, we remain committed to
providing the highest level of quality research and money management expertise
in helping you seek your investment goals.
/s/ Michael J. Cosgrove
Michael J. Cosgrove
Mike Cosgrove is responsible for the marketing, product development and sales of
the GEFunds.
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. 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 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 $10 billion. He is responsible for managing the GE International Equity
Fund and shares portfolio management responsibility for the GE Global Equity
Fund with Michael J. Solecki. 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, and 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.
Michael J. Solecki is Co-Portfolio Manager of the GE Global Equity Fund and has
served the Fund in that capacity since September 1997.
[PHOTO]
Ralph Layman & Michael J. Solecki
Mike has more than eight years of investment experience and has held positions
with GE Investments since 1990. He is currently a Vice President of GE
Investments. Mike is a Chartered Financial Analyst (CFA) and a member of the New
York Society of Security Analysts. He holds a B.S. in Finance from Western New
England College.
Q. How did the GE International Equity and Global Equity Funds' benchmarks and
Lipper peers perform for the one-year period ended September 30, 1997?
A. The GE International Equity Fund's benchmark, the MSCI EAFE, was up 12.17%.
Our Lipper peer group of 422 International Stock funds posted an average
return of 18.4% for the same period. The GE Global Equity Fund's benchmark,
MSCI World Index, returned 24.11%. Our Lipper peer group of 198 funds
returned an average of 23.3% for the same period. To see how your class of
shares in the above funds performed compared to their benchmarks, please
refer to page 4 for the GE International Equity Fund and page 8 for the GE
Global Equity Fund.
Q. What drove each fund's performance?
A. The GE International Equity Fund had good exposure to stocks in Europe that
benefitted from the restructuring taking place on the Continent. We were
underweighted in Japan, which underperformed the global market. Additionally,
most of the stocks that the fund owned in Japan performed relatively well
during this period. These include Honda, Sony, and Rohm, among others. Late
in the period, currency devaluations in southeast Asia put pressure on the
prices of some of our holdings in that region. For the GE Global Equity Fund,
we were underweighted in the U.S. and overweighted in Europe, where
valuations were more attractive. This strategy detracted from our
perform-ance as U.S. stocks outperformed most European markets as well as
Japan.
Q. Which investments stand out?
A. The GE International Equity Fund enjoyed strong performance from Coflexip, a
France-based oil services company, Telebras, Brazil's largest telecom
company, NTT Data, a Japanese computer equipment and consulting company, and
Merita, a Finnish bank. Additionally the Global Equity Fund enjoyed good
performance from Citicorp and Travelers. Citicorp is one of the few banking
franchises in the world that has done a good job of executing a global
expansion strategy. Travelers benefitted from a couple of acquisitions that
increased the company's market share in the financial services industry.
Q. What is your outlook for the funds and how have you positioned them going
forward?
A. Generally, the outlook for established international markets is positive,
which should bode well for both GE International Equity and GE Global Equity
funds. We continue to have a favorable outlook for Europe. Growth prospects
and interest rate conditions are generally good. The Continent appears to be
on target to achieve economic union by January 1, 1999. Select areas in Asia
also look good, particularly well-capitalized banks. Devaluations of
currencies in south-east Asia may pose a short-term problem for stocks in the
region but should eventually lead to increased investment there. Low
inflation, good corporate profits and a healthy economy have served as a
strong foundation for the U.S. market, but we remain concerned over the level
of valuations relative to growth rates. For this reason, in the GE Global
Equity Fund, we expect to maintain an underweighting in the U.S. until
valuations become more attractive.
3
<PAGE>
GE INTERNATIONAL EQUITY FUND
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TOP TEN LARGEST HOLDINGS
AT SEPTEMBER 30, 1997
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Total S.A. (Class B) 2.81%
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Novartis AG (Regd.) 2.71%
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Canon Inc. 2.33%
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Siebe PLC 2.32%
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Sony Corp. 2.21%
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Telecom Italia Mobile SPA 2.10%
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Railtrack Group PLC 2.09%
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ABB AG 1.95%
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HSBC Holdings PLC (Regd.) 1.92%
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Mannesmann AG 1.78%
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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 average annual total returns for the periods ended 9/30/97
One Three
Year Year
Number of funds
in peer group: 422 239
Peer group
average
total return: 18.4% 10.1%
Lipper categories in peer group:
International, Canadian, International Small Cap
*See Notes to Performance for explanation of peer categories
See page 58 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
[GRAPHIC]
LINE CHART
AVERAGE ANNUAL
TOTAL RETURN
ONE THREE SINCE
YEAR YEAR INCEPTION
GE Int'l Equity 18.41% 11.42% 9.85%
GE Int'l Equity w/load 11.61% 9.24% 8.05%
(maximum load-5.75%)
MSCI EAFE 12.17% 8.83% 7.53%
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CLASS B SHARES
[GRAPHIC]
LINE CHART
AVERAGE ANNUAL
TOTAL RETURN
ONE THREE SINCE
YEAR YEAR INCEPTION
GE Int'l Equity 17.86% 10.85% 9.28%
GE Int'l Equity w/load 13.86% 10.31% 9.05%
maximum load 4.0% 2.0% 1.0%
MSCI EAFE 12.17% 8.83% 7.53%
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CLASS C SHARES
[GRAPHIC]
LINE CHART
AVERAGE ANNUAL
TOTAL RETURN
ONE THREE SINCE
YEAR YEAR INCEPTION
GE Int'l Equity 18.79% 11.69% 10.09%
MSCI EAFE 12.17% 8.83% 7.53%
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CLASS D SHARES
[GRAPHIC]
LINE CHART
AVERAGE ANNUAL
TOTAL RETURN
ONE THREE SINCE
YEAR YEAR INCEPTION
GE Int'l Equity 19.16% 12.06% 10.46%
MSCI EAFE 12.17% 8.83% 7.53%
4
<PAGE>
SCHEDULE OF INVESTMENTS -- SEPTEMBER 30, 1997
GE INTERNATIONAL EQUITY FUND
[GRAPHIC]
PIE CHART
GE INTERNATIONAL EQUITY FUND
Europe 64.2%
Other Regions 7.9%
Japan 14.0%
Pacific Rim 9.8%
Cash & Other 4.1%
Number
of Shares Value
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Common Stock -- 95.9%
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Australia -- 2.7%
Brambles Industries Ltd. 78,348 $ 1,635,206
Burns, Philp & Co. Ltd. 612,217 453,328
Coca Cola Amatil Ltd. 53,607 574,751
2,663,285
Austria -- 2.2%
OMV AG 3,850 574,304
VA Technologie AG 7,278 1,560,303
2,134,607
Brazil -- 2.7%
Telecomunicacoes Brasileiras S.A. -
Telehras ADR 3,115 401,056
Telecomunicacoes de Sao Paulo S.A.
(Pfd. receipts) 157,370 47,979(a)
Telecomunicacoes de Sao Paulo S.A.
(Pfd. shares) 4,133,946 1,260,353
Uniao de Banco Brasileiro S.A. GDR 25,083 918,665(a)
2,628,053
Canada -- 0.8%
Bombardier Inc. (Class B) 39,509 800,443
Denmark -- 1.2%
Den Danske Bank 11,002 1,198,482
Finland -- 1.5%
Merita Ltd. (Series A) 209,286 992,842
Pohjola Insurance Group (Series B) 4,688 167,462
Sampo Insurance Co. Ltd. 2,656 286,134
Valmet Corp. 1,088 17,787
1,464,225
<PAGE>
Number
of Shares Value
- --------------------------------------------------------------------------------
[GRAPHIC] France -- 13.4%
Alcatel Alsthom 7,339 $ 976,034
AXA-UAP 18,387 1,233,517
Cap Gemini S.A 14,875 965,315
Carrefour S.A 2,005 1,249,439
Coflexip S.A. ADR 20,471 1,151,494
Lyonnaise Des Eaux S.A 9,421 1,051,251
Michelin CGDE (Regd.) (Class B) 10,419 591,844
Renault S.A 30,995 918,986
Schneider S.A 20,644 1,303,157
Total S.A. (Class B) 24,320 2,783,458
Usinor Sacilor 30,761 621,686
Valeo S.A 5,681 373,074
13,219,255
[GRAPHIC] Germany -- 8.4%
BASF AG 17,990 649,573
Daimler-Benz AG 10,908 900,074
Fresenius Medical Care AG 3,420 234,297
Fresenius Medical Care AG
(Pfd. shares) 5,957 332,078
Gehe AG 11,410 616,041
Mannesmann AG 3,692 1,759,339
SGL Carbon AG 10,222 1,501,236
Siemens AG 22,074 1,491,005
Veba AG 13,855 809,603
8,293,246
Greece -- 0.5%
Alpha Credit Bank (Regd.) 6,381 468,669
Hong Kong -- 4.9%
Cheung Kong (Holdings) Ltd. 93,000 1,045,619
China Resources Development 84,000 351,719
Giordano International Ltd. 665,000 429,698
HSBC Holdings PLC (Regd.) 56,726 1,898,686
Johnson Electric Holdings 131,900 359,665
Lai Sun Development Co. Ltd. 217,000 197,706
Lai Sun Hotels International Ltd. 21,876 1,103(a)
New World Development Co. Ltd. 72,586 439,005
Television Broadcasts Ltd. 40,000 141,639
4,864,840
India -- 0.2%
BSES Ltd. GDR 6,760 136,890
Tata Engineering & Locomotive Co.
Ltd 4,078 37,721
174,611
Indonesia -- 0.7%
PT Astra International Inc. 680,000 614,893
PT Mulia Industrindo 532,500 101,159
716,052
Israel -- 2.1%
ECI Telecommunications Ltd. 47,115 1,525,348
Teva Pharmaceutical Industries Ltd.
ADR 10,091 562,573
2,087,921
- ----------
See Notes to Schedule of Investments and Financial Statements
5
<PAGE>
GE INTERNATIONAL EQUITY FUND
Number
of Shares Value
- --------------------------------------------------------------------------------
Italy -- 4.6%
Credito Italiano 346,458 $ 935,516
Edison SPA 83,235 447,964
ENI SPA (Regd.) 58,033 365,448
Gucci Group N.V. ADR 3,850 180,469
Industrie Natuzzi SPA ADR 8,164 193,385
Istituto Bancario San Paolo di Torino 48,032 380,661
Telecom Italia Mobile SPA 523,835 2,078,770
4,582,213
[GRAPHIC] Japan -- 14.0%
Canon Inc. 79,000 2,311,014
Credit Saison Co. Ltd. 64,085 1,741,931
DDI Corp. 217 1,089,765
Honda Motor Co. 46,000 1,604,873
Murata Manufacturing Co. Ltd. 9,000 389,326
NEC Corp. 41,000 499,461
NTT Data Corp. 32 1,450,568
Rohm Co. 11,000 1,294,439
Sony Corp. 23,200 2,191,763
Sumitomo Realty & Development 51,000 403,621
Sumitomo Sitix Corp. 14,000 270,324
Suzuki Motor Corp. 62,000 596,006
13,843,091
Mexico -- 1.3%
Gruma S.A. de C.V. (Series B) 61,458 291,074
Grupo Carso S.A. de C.V. ADR 44,158 691,073
Grupo Financiero Bancomer S.A
ADR (Series C) 25,129 339,241(a,b)
1,321,388
Netherlands -- 3.1%
IHC Caland N.V 19,799 1,248,442
ING Groep N.V 35,391 1,625,251
PolyGram N.V 2,606 150,968
3,024,661
Norway -- 0.0%
Saga Petroleum (Series A) 1,377 29,064
Panama -- 0.8%
Panamerican Beverages Inc. (Class A) 21,416 836,562
Peru -- 1.0%
Telefonica del Peru S.A. ADR
(Class B) 43,027 1,016,513
Philippines -- 0.7%
Metro Bank & Trust Co. 22,700 202,326
San Miguel Corp. 315,198 507,058
709,384
Number
of Shares Value
- --------------------------------------------------------------------------------
Portugal -- 1.5%
Banco Comercial Portugues
(Pfd. shares) 1,541 $ 115,575
Banco Comercial Portugues (Regd.) 44,201 933,443
Banco Comercial Portugues ADR 17,278 364,998
EDP - Electricidade de Portugal S.A 3,155 54,179
1,468,195
Singapore -- 0.2%
DBS Land Ltd. 72,960 177,451
South Africa -- 1.3%
Barlow Ltd. 29,791 340,386
Dimension Data Holdings Ltd. 174,717 731,034
Iscor Ltd. 311,102 198,256
1,269,676
South Korea -- 0.4%
Kookmin Bank 9,418 113,386
Kookmin Bank GDR 1,601 20,413(b)
Korea Electric Power Corp. 11,130 246,928
380,727
Spain -- 2.0%
Banco Santander S.A. (Regd.) 23,468 768,798
Repsol S.A 28,109 1,214,598
1,983,396
Sweden -- 3.0%
Autoliv Inc. SDR 34,244 1,453,263
Electrolux AB (Series B) 7,388 577,408
Investor AB (Series B) 3,569 190,974
Kinnevik AB (Series B) 5,980 133,590
Modern Times MTG Group AB
(Series B) 5,980 46,894(a)
NetCom Systems AB (Series B) 17,754 269,089(a)
Telefonaktiebolaget LM Ericson
(Series B) 5,769 277,140
2,948,358
[GRAPHIC] Switzerland -- 9.0%
ABB AG 1,308 1,926,386
Holderbank Financiere Glarus AG 477 452,599
Nestle S.A. (Regd.) 657 915,210
Novartis AG (Regd.) 1,748 2,680,171
Roche Holdings AG 95 842,616
Schw Rueckversicher (Regd.) 516 773,787
Zurich Versicherungsgesellschaft
(Regd.) 3,100 1,349,216
8,939,985
- ----------
See Notes to Schedule of Investments and Financial Statements
6
<PAGE>
SCHEDULE OF INVESTMENTS -- SEPTEMBER 30, 1997
Number
of Shares Value
- --------------------------------------------------------------------------------
Thailand -- 0.0%
Banpu Public Company Ltd. 1,900 $ 19,471
[GRAPHIC] United Kingdom -- 11.7%
Airtours PLC 100,882 1,714,565
Bass PLC 13,716 184,898
Billiton PLC 241,369 934,098(a)
Cordiant PLC 169,544 328,068
Granada Group PLC 104,965 1,479,298
LucasVarity PLC 189,037 711,760
Medeva PLC 253,410 858,110
Railtrack Group PLC 142,665 2,065,365
Reed International PLC 123,252 1,047,380
Siebe PLC 114,362 2,299,579
11,623,121
Total Investments in Securities
(Cost $76,690,813) 94,886,945
- --------------------------------------------------------------------------------
Short-Term Investments -- 2.7%
- --------------------------------------------------------------------------------
GEI Short Term Investment Fund
(Cost $2,720,445) 2,720,445 2,720,445
Other Assets and Liabilities,
net 1.4% 1,367,916
- --------------------------------------------------------------------------------
NET ASSETS -- 100% $98,975,306
================================================================================
[GRAPHIC] ICONS REPRESENT THE TOP FIVE COUNTRY WEIGHTINGS IN THE GE
INTERNATIONAL EQUITY FUND AT SEPTEMBER 30, 1997.
- ----------
See Notes to Schedule of Investments and Financial Statements
7
<PAGE>
GE GLOBAL EQUITY FUND
================================================================================
TOP TEN LARGEST HOLDINGS
AT SEPTEMBER 30, 1997
================================================================================
AirTouch Comm. Inc. 2.32%
- --------------------------------------------------------------------------------
Novartis AG (Regd.) 2.08%
- --------------------------------------------------------------------------------
Siebe PLC 2.02%
- --------------------------------------------------------------------------------
Total S.A. (Class B) 2.00%
- --------------------------------------------------------------------------------
First Data Corp. 1.89%
- --------------------------------------------------------------------------------
Telecom Italia Mobile SPA 1.86%
- --------------------------------------------------------------------------------
Harman Int. Ind. Inc. 1.81%
- --------------------------------------------------------------------------------
Canon Inc. 1.80%
- --------------------------------------------------------------------------------
ING Groep N.V. 1.76%
- --------------------------------------------------------------------------------
Sampo Insurance Co. Ltd. 1.70%
- --------------------------------------------------------------------------------
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 average annual total returns for the periods ended 9/30/97
One Three
Year Year
Number of funds
in peer group: 198 125
Peer group
average
total return: 23.3% 15.6%
Lipper categories
in peer group: Global, Global Small Cap
*See Notes to Performance for explanation of peer categories
See page 58 for Notes to Performance.
Past performance is no guarantee
of future results.
<PAGE>
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT
CLASS A SHARES
[GRAPHIC]
LINE CHART
AVERAGE ANNUAL
TOTAL RETURN
ONE THREE SINCE
YEAR YEAR INCEPTION
GE Global Equity 18.51% 12.19% 10.53%
GE Global Equity w/load 11.70% 9.99% 8.80%
(maximum load-5.75%)
MSCI World 24.11% 17.30% 15.35%
- --------------------------------------------------------------------------------
CLASS B SHARES
[GRAPHIC]
LINE CHART
AVERAGE ANNUAL
TOTAL RETURN
ONE THREE SINCE
YEAR YEAR INCEPTION
GE Global Equity 17.92% 11.62% 10.73%
GE Global Equity w/load 13.92% 11.08% 10.55%
maximum load 4.0% 2.0% 1.0%
MSCI World 24.11% 17.30% 15.35%
- --------------------------------------------------------------------------------
CLASS C SHARES
[GRAPHIC]
LINE CHART
AVERAGE ANNUAL
TOTAL RETURN
ONE THREE SINCE
YEAR YEAR INCEPTION
GE Global Equity 18.82% 12.48% 14.35%
MSCI World 24.11% 17.30% 16.79%
- --------------------------------------------------------------------------------
CLASS D SHARES
[GRAPHIC]
LINE CHART
AVERAGE ANNUAL
TOTAL RETURN
ONE THREE SINCE
YEAR YEAR INCEPTION
GE Global Equity 19.14% 12.77% 13.25%
MSCI World 24.11% 17.30% 16.42%
8
<PAGE>
SCHEDULE OF INVESTMENTS -- SEPTEMBER 30, 1997
GE GLOBAL EQUITY FUND
[GRAPHIC]
PIE CHART
GE GLOBAL EQUITY FUND
Cash & Other 2.5%
Europe 50.0%
United States 23.9%
Other Regions 8.6%
Japan 8.7%
Pacific Rim 6.3%
Number
of Shares Value
- --------------------------------------------------------------------------------
Common Stock -- 97.5%
- --------------------------------------------------------------------------------
Australia -- 0.8%
Burns, Philp & Co. Ltd. 287,386 $ 212,801
Coca Cola Amatil Ltd. 27,826 298,338
511,139
Austria -- 1.3%
OMV AG 2,115 315,494
VA Technologie AG 2,192 469,935
785,429
Brazil -- 2.6%
Telecomunicacoes Brasileiras S.A. -
Telehras ADR 2,037 262,264
Telecomunicacoes de Sao Paulo S.A
(Pfd. receipts) 102,145 31,142(a)
Telecomunicacoes de Sao Paulo S.A
(Pfd. shares) 2,470,221 753,118
Uniao de Banco Brasileiro S.A. GDR 13,992 512,457(a)
1,558,981
Canada -- 1.1%
Bombardier Inc. (Class B) 17,299 350,474
Renaissance Energy Ltd. 12,228 305,246(a)
655,720
Croatia -- 0.1%
Pliva D D GDR (Regd.) 4,044 82,295
Finland -- 2.9%
Merita Ltd. (Series A) 140,275 665,457
Sampo Insurance Co. Ltd. 9,500 1,023,446
Valmet Corp. 3,751 61,324
1,750,227
<PAGE>
Number
of Shares Value
- --------------------------------------------------------------------------------
[GRAPHIC] France -- 9.2%
AXA-UAP 8,787 $ 589,488
Cap Gemini S.A 4,454 289,043
Carrefour S.A 907 565,208
Coflexip S.A. ADR 16,932 952,425
Lyonnaise Des Eaux S.A 2,920 325,831
Michelin CGDE (Regd.) (Class B) 7,099 403,254
Renault S.A 18,055 535,321
Schneider S.A 10,147 640,532
Total S.A. (Class B) 10,529 1,205,058
5,506,160
Germany -- 5.7%
Daimler-Benz AG 11,731 967,984
Fresenius Medical Care AG 2,760 189,082
Fresenius Medical Care AG
(Pfd. shares) 3,842 214,175
Gehe AG 1,819 98,210
Mannesmann AG 1,955 931,611
Siemens AG 8,724 589,269
Veba AG 7,858 459,175
3,449,506
Greece -- 0.6%
Alpha Credit Bank (Regd.) 4,515 331,628
Hong Kong -- 3.7%
Cheung Kong (Holdings) Ltd. 66,000 742,052
Giordano International Ltd. 382,000 246,834
HSBC Holdings PLC (Regd.) 26,329 881,263
Johnson Electric Holdings 63,600 173,425
New World Development Co. Ltd. 28,000 169,346
2,212,920
Indonesia -- 1.0%
PT Astra International Inc. 428,000 387,021
PT Mulia Industrindo 306,000 58,131
PT Steady Safe 330,943 128,253
573,405
Israel -- 1.9%
ECI Telecommunications Ltd. 19,933 645,331
Tecnomatix Technologies Ltd. 4,718 180,463(a)
Teva Pharmaceutical Industries Ltd.
ADR 5,716 318,667
1,144,461
Italy -- 4.8%
Credito Italiano 193,678 522,975
Edison SPA 37,893 203,937
ENI SPA (Regd.) 35,190 221,600
Industrie Natuzzi SPA ADR 24,632 583,471
Istituto Bancario San Paolo di Torino 29,672 235,155
Telecom Italia Mobile SPA 282,067 1,119,346
2,886,484
- ----------
See Notes to Schedule of Investments and Financial Statements
9
<PAGE>
GE GLOBAL EQUITY FUND
Number
of Shares Value
- --------------------------------------------------------------------------------
[GRAPHIC] Japan -- 8.7%
Canon Inc. 37,000 $1,082,373
Credit Saison Co. Ltd. 24,825 674,783
DDI Corp. 118 592,591
Honda Motor Co. 19,000 662,882
NEC Corp. 16,000 194,912
NTT Data Corp. 16 725,284
Sony Corp. 10,300 973,067
Sumitomo Sitix Corp. 10,000 193,089
Suzuki Motor Corp. 17,000 163,421
5,262,402
Mexico -- 1.5%
Gruma S.A. de C.V. (Series B) 36,215 171,520
Grupo Carso S.A. de C.V. ADR 5,721 89,534
Grupo Carso S.A. de C.V
(Series A) 31,216 249,889
Grupo Financiero Bancomer S.A
ADR (Series C) 29,978 404,703(a,b)
915,646
Netherlands -- 3.3%
IHC Caland N.V 3,598 226,875
ING Groep N.V 23,089 1,060,310
Ispat International N.V. (Regd.)
(Class A) 22,000 629,750(a)
PolyGram N.V 777 45,012
1,961,947
Norway -- 0.6%
Petroleum Geo Services 3,803 256,591
Saga Petroleum (Series A) 5,006 105,659
362,250
Panama -- 1.9%
Banco Latinoamericano de
Exportaciones S.A. (Class E) 8,824 394,874
Panamerican Beverages Inc. (Class A) 19,040 743,750
1,138,624
Peru -- 1.0%
Telefonica del Peru S.A. ADR
(Class B) 25,944 612,927
Philippines -- 0.6%
Pilipino Telephone Corp. 282,900 73,800(a)
San Miguel Corp. 194,580 313,020
386,820
Portugal -- 1.2%
Banco Comercial Portugues (Regd.) 14,990 316,561
Sonae Investimentos 6,480 256,189
Telecel-Comunicacoes
Pessoais S.A 1,509 122,438(a)
695,188
<PAGE>
Number
of Shares Value
- --------------------------------------------------------------------------------
South Africa -- 0.5%
Dimension Data Holdings Ltd. 73,201 $ 306,280
Iscor Ltd. 24,364 15,527
321,807
South Korea -- 0.2%
Kookmin Bank 7,144 86,009
Kookmin Bank GDR 1,368 17,442(b)
103,451
Spain -- 1.6%
Banco Santander S.A. (Regd.) 11,484 376,209
Repsol S.A 14,229 614,839
991,048
Sweden -- 1.4%
Autoliv Inc. SDR 20,162 855,639
[GRAPHIC] Switzerland -- 6.2%
ABB AG 677 997,067
Novartis AG (Regd.) 818 1,254,222
Roche Holdings AG 26 230,611
Schw Rueckversicher (Regd.) 166 248,931
Tag Heuer International S.A 3,312 444,059
Zurich Versicherungsgesellschaft
(Regd.) 1,250 544,039
3,718,929
[GRAPHIC] United Kingdom -- 9.2%
Airtours PLC 31,585 536,811
Billiton PLC 143,500 555,345(a)
Bodycote International PLC 14,141 221,183
Granada Group PLC 57,027 803,696
Johnson Matthey PLC 26,042 284,081
LucasVarity PLC 162,880 613,274
Medeva PLC 132,637 449,142
Railtrack Group PLC 21,077 305,132
Reed International PLC 29,582 251,384
Siebe PLC 60,375 1,214,013
Stagecoach Holdings PLC 24,664 272,429
5,506,490
[GRAPHIC] United States -- 23.9%
Airgas Inc. Rts 30,592 518,152(a)
AirTouch Communications Inc. 39,386 1,395,741(a)
AlliedSignal Inc. 21,088 896,240
Avery Dennison Corp. 8,198 327,920
Citicorp 6,319 846,351
Ecolab Inc. 13,298 645,784
Electronic Data Systems Corp. 17,561 623,415
First Data Corp. 30,263 1,136,754
Harman International
Industries Inc. 21,731 1,087,908
Home Depot Inc. 11,178 582,653
Intel Corp. 7,008 646,926
Morgan Stanley, Dean Witter,
Discover & Co. 5,659 305,940
- ----------
See Notes to Schedule of Investments and Financial Statements
10
<PAGE>
SCHEDULE OF INVESTMENTS -- SEPTEMBER 30, 1997
Number
of Shares Value
- --------------------------------------------------------------------------------
Motorola Inc. 10,574 $ 760,006
Scherer (R.P.) Corp. 14,095 873,009(a)
Sears Roebuck & Co. 15,526 884,012
Sensormatic Electronics Corp. 56,481 797,794
Thermo Electron Corp. 14,072 562,880(a)
Travelers Group Inc. 8,846 603,740
UCAR International Inc. 11,372 543,013(a)
Zebra Technologies Corp. (Class A) 9,509 339,947(a)
14,378,185
Total Investments in Securities
(Cost $49,865,094) 58,659,708
- --------------------------------------------------------------------------------
Short-Term Investments -- 1.9%
- --------------------------------------------------------------------------------
GEI Short Term Investment Fund
(Cost $1,134,417) 1,134,417 1,134,417
Other Assets and Liabilities,
net 0.6% 369,029
- --------------------------------------------------------------------------------
NET ASSETS -- 100% $60,163,154
================================================================================
[GRAPHIC] ICONS REPRESENT THE TOP FIVE COUNTRY WEIGHTINGS IN THE GE GLOBAL
EQUITY FUND AT SEPTEMBER 30, 1997.
- ----------
See Notes to Schedule of Investments and Financial Statements
11
<PAGE>
GE PREMIER GROWTH EQUITY FUND
Q&A
David Carlson manages pension and mutual fund portfolios with total assets of
over $5 billion. Dave joined GE in 1980 on the GE 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.
Q. How did the GE Premier Growth Equity Fund's industry benchmark and Lipper
peers perform since its inception (12/31/96) through September 30, 1997?
A. During this period, the Standard & Poor's 500 Composite Index advanced
29.60%, while our Lipper peer group of 852 Growth funds posted an average
return of 26.6%. To see how your class of shares in the GE Premier Growth
Equity Fund performed compared to the aforementioned benchmarks, please
refer to the following page.
Q. Despite the fund's favorable investment results, why did its performance
trail that of the Standard & Poor's 500 Composite Index?
A. Certain stocks fell short of our expectations. Considering that the fund
currently owns only 35 stocks, the underperformance of one stock can have a
meaningful impact on the performance of the fund, just as the
overperformance of one stock can add significantly to the investment
results. Certainly, a concentrated list of names implies greater volatility
in the short term. However, we believe that by focusing on the "premier"
companies in their respective industries, the above-average growth of these
companies will drive superior performance over the long term.
Q. How do you select stocks for the fund?
A. We focus primarily on companies that meet specific criteria: they are
leaders in their respective industries in terms of market share; they have
an average annual growth rate of 15% or better; and they consistently
generate free cash flow (the amount of money available to a company after
all expenses have been paid). Additionally, the companies represented in
the fund are financially strong and have a shareholder-oriented management.
Given this focus on industry leaders, most of the holdings are
high-quality, large capitalization companies.
Since quality investments in this market environment do not come cheaply,
valuation measures of most of the stocks in the fund (e.g. price-earnings
ratio, price-to-book ratio, etc.) are slightly higher than that of the S&P
500 Composite Index. However, we are less concerned with relative
valuations than long-term growth potential because we intend to own
investments for several years.
Q. What is your outlook for the fund?
A. Investor concerns over higher inflation and a possible interest-rate
increase by the Federal Reserve may cause periodic market volatility in the
coming months. However, the three main components of the bull market remain
in place: a sound economy, good corporate earnings and low inflation. In
this environment, we believe high-quality, large-cap companies whose
earnings growth rates are higher than the market, as represented by the S&P
500 Composite Index, will continue to produce superior investment results.
[PHOTO]
David Carlson
12
<PAGE>
GE PREMIER GROWTH EQUITY FUND
================================================================================
TOP TEN LARGEST HOLDINGS
AT SEPTEMBER 30, 1997
================================================================================
Schlumberger Ltd. 3.28%
- --------------------------------------------------------------------------------
Automatic Data Processing Inc. 3.12%
- --------------------------------------------------------------------------------
CUC International Inc. 3.12%
- --------------------------------------------------------------------------------
Reuters Holdings PLC ADR
(Class B) 3.11%
- --------------------------------------------------------------------------------
Cardinal Health Inc. 3.10%
- --------------------------------------------------------------------------------
AirTouch Communications Inc. 3.07%
- --------------------------------------------------------------------------------
Lincare Holdings Inc. 3.05%
- --------------------------------------------------------------------------------
Scherer (R.P.) Corp. 3.03%
- --------------------------------------------------------------------------------
First Data Corp. 3.03%
- --------------------------------------------------------------------------------
Tele-Communications Inc. Liberty
Media Group (Series A) 2.93%
- --------------------------------------------------------------------------------
INVESTMENT PROFILE
A mutual fund designed for investors who seek long-term growth of capital and
future income by primarily investing in growth-oriented equity securities.
* LIPPER PERFORMANCE COMPARISON
Growth Peer Group
Based on total returns for the nine month period 12/31/96 - 9/30/97
Nine
Months
Number of Funds
in peer group: 852
Peer group
average
total return: 26.6%
Lipper categories
in peer group: Growth
*See Notes to Performance for explanation of peer categories
See page 58 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
[GRAPHIC]
LINE CHART
AGGREGATE
TOTAL RETURN
SINCE
INCEPTION
GE Premier Growth Equity 22.07%
GE Premier Growth Equity w/load 15.05%
(maximum load-5.75%)
S&P 500 29.60%
- --------------------------------------------------------------------------------
CLASS B SHARES
[GRAPHIC]
LINE CHART
AGGREGATE
TOTAL RETURN
SINCE
INCEPTION
GE Premier Growth Equity 21.67%
GE Premier Growth Equity w/load 17.67%
(maximum load-4.0%)
S&P 500 29.60%
- --------------------------------------------------------------------------------
CLASS C SHARES
[GRAPHIC]
LINE CHART
AGGREGATE
TOTAL RETURN
SINCE
INCEPTION
GE Premier Growth Equity 22.33%
S&P 500 29.60%
- --------------------------------------------------------------------------------
CLASS D SHARES
[GRAPHIC]
LINE CHART
AGGREGATE
TOTAL RETURN
SINCE
INCEPTION
GE Premier Growth Equity 22.53%
S&P 500 29.60%
- --------------------------------------------------------------------------------
13
<PAGE>
SCHEDULE OF INVESTMENTS -- SEPTEMBER 30, 1997
GE PREMIER GROWTH EQUITY FUND
[GRAPHIC]
PIE CHART
GE PREMIER GROWTH EQUITY FUND
Energy & Basic Material 8.7%
Consumer 23.7%
Capital Goods 5.5%
Healthcare 17.1%
Financial Services 7.7%
Retail 4.8%
Technology 18.7%
Utilities 5.5%
Cash and Other 6.4%
Miscellaneous 1.9%
Number
of Shares Value
- --------------------------------------------------------------------------------
Common Stock -- 93.6%
- --------------------------------------------------------------------------------
Basic Materials -- 2.6%
Airgas Inc. (Rts.) 23,000 $ 389,563(a)
Capital Goods -- 5.5%
Dover Corp. 6,000 407,250
Molex Inc. (Class A) 10,300 419,725
826,975
[GRAPHIC] Consumer - Cyclical -- 23.7%
Automatic Data Processing Inc. 9,300 465,000
Carnival Corp. (Class A) 9,000 416,250
Catalina Marketing Corp. 8,226 426,724(a)
Circus Circus Enterprises Inc. 10,100 254,394(a)
Comcast UK Cable Partners
Ltd. (Class A) 20,000 205,000(a)
CUC International Inc. 15,000 465,000(a)
Harman International
Industries Inc. 8,500 425,531
Interpublic Group Cos. Inc. 8,500 436,156
Tele-Communications Inc. Liberty
Media Group (Series A) 14,600 437,087(a)
3,531,142
Energy -- 6.1%
Baker Hughes Inc. 9,500 415,625
Schlumberger Ltd. 5,800 488,287
903,912
[GRAPHIC] Financial -- 7.7%
Citicorp 2,900 388,419
Travelers Group Inc. 6,000 409,500
Wells Fargo & Co. 1,300 357,500
1,155,419
Number
of Shares Value
- --------------------------------------------------------------------------------
[GRAPHIC] Healthcare -- 17.1%
Cardinal Health Inc. 6,500 $ 461,500
Dentsply International Inc. 7,000 392,000
Johnson & Johnson 7,500 432,188
Lincare Holdings Inc. 9,000 453,937(a)
Scherer (R.P.) Corp. 7,300 452,144(a)
Tenet Healthcare Corp. 12,000 349,500(a)
2,541,269
Miscellaneous -- 1.9%
SPDR Trust 3,000 283,500
Retail Trade -- 4.8%
Arbor Drugs Inc. 13,500 313,875
Home Depot Inc. 7,650 398,756
712,631
[GRAPHIC] Technology -
Electronics & Equipment -- 7.6%
Applied Materials Inc. 4,000 381,000(a)
Cisco Systems Inc. 5,200 379,925(a)
Intel Corp. 4,000 369,250
1,130,175
[GRAPHIC] Technology -
Software & Services -- 11.1%
Equifax Inc. 13,000 408,688
First Data Corp. 12,000 450,750
Microsoft Corp. 2,500 330,781(a)
Reuters Holdings PLC ADR
(Class B) 6,500 463,125
1,653,344
Utilities -- 5.5%
AirTouch Communications Inc. 12,900 457,144(a)
NTL Inc. 13,500 356,062(a)
813,206
Total Investments in Securities
(Cost $11,799,088) 13,941,136
- --------------------------------------------------------------------------------
Short-Term Investments -- 7.1%
- --------------------------------------------------------------------------------
GEI Short Term Investment Fund
(Cost $1,058,177) 1,058,177 1,058,177
Other Assets and Liabilities,
net (0.7%) (99,875)
- --------------------------------------------------------------------------------
NET ASSETS -- 100% $14,899,438
================================================================================
[GRAPHIC] ICONS REPRESENT THE TOP FIVE INDUSTRY WEIGHTINGS IN THE GE PREMIER
GROWTH EQUITY FUND AT SEPTEMBER 30, 1997.
- ----------
See Notes to Schedule of Investments and Financial Statements
14
<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 $30 billion. His
responsibilities include overseeing the portfolio management team of the GE U.S.
Equity Fund listed on page 90. 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 one-year period ended September 30, 1997?
A. For the one-year period ended September 30, 1997, the Standard & Poor's 500
Composite Index returned 40.49%. Our Lipper peer group of 640 Growth and
Income funds posted an average return of 36.2% for the same period. To see
how your class of shares in the U.S. Equity Fund performed compared to the
aforementioned benchmarks, please refer to the following page.
Q. Despite your fund's favorable investment results, why did its performance
trail that of the Standard & Poor's 500 Composite Index?
A. The biggest reason was the fund's underweighting in the technology sector.
We were uncomfortable with valuations of a number of large technology
stocks, such as Microsoft, and chose, instead, stocks with better
risk/reward characteristics. The technology stocks that we did own, such as
Intel, outperformed the market but not by enough to offset the fund's
underweighting in the sector.
Q. Which investments recorded good investment results?
A. Our investments in energy services, such as Schlumberger and Nabors
Industries, helped our investment results. Energy demand has been rising,
but the supply of available drilling equipment has not, which has enabled
energy companies to command higher prices. We believe this trend will
continue well into 1998. The fund enjoyed good performance from
infrastructure-related companies, such as AlliedSignal and Dover Corp.
Companies in this sector have benefitted from global economic expansion,
and still look relatively attractive on a valuation basis. Investments in
financial services also fared well, thanks in large part to the general
decline in interest rates. Some of our better performing holdings in this
sector included Fannie Mae; Morgan Stanley, Dean Witter, Discover & Co.;
and Travelers.
Q. What has been your investment strategy?
A. We focused primarily on large, well-managed companies with sound balance
sheets and good earnings growth. These companies are shareholder-oriented
and leaders in their respective industries and have a penchant for keeping
costs under control. Our intent is to invest in these companies for several
years. Thus, our turnover rate is relatively low.
Q. What is your outlook for the fund?
A. Considering that current valuations are quite high by most historical
standards, we are somewhat cautious on the stock market. We do not expect
inflation to become a serious problem or interest rates to move sharply
higher any time within the next few months. However, we are concerned with
the level of corporate earnings growth going into 1998 and would not be
surprised to see a correction triggered by some earnings disappointments.
Given this backdrop, we will maintain a relatively conservative investment
approach as we continue to search for new companies that meet our strict
investment criteria.
[PHOTO]
Gene Bolton
15
<PAGE>
GE U.S. EQUITY FUND
================================================================================
TOP TEN LARGEST HOLDINGS
AT SEPTEMBER 30, 1997
================================================================================
Intel Corp. 2.21%
- --------------------------------------------------------------------------------
Travelers Group Inc. 1.99%
- --------------------------------------------------------------------------------
Federal National Mortgage Assoc. 1.86%
- --------------------------------------------------------------------------------
Bristol-Myers Squibb Co. 1.84%
- --------------------------------------------------------------------------------
Schlumberger Ltd. 1.83%
- --------------------------------------------------------------------------------
Exxon Corp. 1.77%
- --------------------------------------------------------------------------------
International Business Machines 1.73%
- --------------------------------------------------------------------------------
Citicorp 1.63%
- --------------------------------------------------------------------------------
AlliedSignal Inc. 1.60%
- --------------------------------------------------------------------------------
Du pont de Nemours (E.I.) & Co. 1.48%
- --------------------------------------------------------------------------------
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 average
annual total returns for the periods ended 9/30/97
One Three
Year Year
Number of funds in peer group: 640 413
Peer group average total return: 36.2% 25.9%
Lipper categories in peer group: Growth & Income, S&P 500 Index
*See Notes to Performance for explanation of peer categories
See page 58 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
[GRAPHIC]
LINE CHART
AVERAGE ANNUAL
TOTAL RETURN
ONE THREE SINCE
YEAR YEAR INCEPTION
GE U.S. Equity 39.44% 27.82% 21.41%
GE U.S. Equity w/load 31.42% 25.32% 19.51%
(maximum load-5.75%)
S&P 500 40.49% 29.92% 23.73%
- --------------------------------------------------------------------------------
CLASS B SHARES
[GRAPHIC]
LINE CHART
AVERAGE ANNUAL
TOTAL RETURN
ONE THREE SINCE
YEAR YEAR INCEPTION
GE U.S. Equity 38.75% 27.19% 21.00%
GE U.S. Equity w/load 34.75% 26.78% 20.88%
maximum load 4.0% 2.0% 1.0%
S&P 500 40.49% 29.92% 23.73%
- --------------------------------------------------------------------------------
CLASS C SHARES
[GRAPHIC]
LINE CHART
AVERAGE ANNUAL
TOTAL RETURN
ONE THREE SINCE
YEAR YEAR INCEPTION
GE U.S. Equity 39.76% 28.15% 20.28%
S&P 500 40.49% 29.92% 20.96%
- --------------------------------------------------------------------------------
CLASS D SHARES
[GRAPHIC]
LINE CHART
AVERAGE ANNUAL
TOTAL RETURN
ONE THREE SINCE
YEAR YEAR INCEPTION
GE U.S. Equity 40.16% 28.46% 21.92%
S&P 500 40.49% 29.92% 23.54%
16
<PAGE>
SCHEDULE OF INVESTMENTS -- SEPTEMBER 30, 1997
GE U.S. EQUITY FUND
[GRAPHIC]
PIE CHART
GE U.S. EQUITY FUND
Energy & Basic Material 15.6%
Consumer 16.2%
Capital Goods 11.1%
Healthcare 11.2%
Financial Services 18.2%
Retail Trade 4.7%
Technology 11.6%
Transportation 1.8%
Utilities 6.1%
Cash and Other 3.5%
Number
of Shares Value
- --------------------------------------------------------------------------------
Common Stock -- 96.1%
- --------------------------------------------------------------------------------
Basic Materials -- 4.3%
Air Products & Chemicals Inc. 14,919 $ 1,237,345
Airgas Inc. (Rts.) 31,275 529,720(a)
Barrick Gold Corp. 19,037 471,166
Du Pont de Nemours (E.I.) & Co. 94,095 5,792,723
FMC Corp. 4,901 434,964(a)
IMC Global Inc. 19,037 671,054
Mead Corp. 15,197 1,097,983
Morton International Inc. 48,918 1,736,589
Newmont Mining Corp. 42,131 1,893,262
PPG Industries Inc. 2,991 187,498
Rayonier Inc. 17,355 839,548
Union Camp Corp. 2,040 125,843
W.R. Grace & Co. 2,720 200,260
Weyerhaeuser Co. 26,238 1,557,881
16,775,836
[GRAPHIC] Capital Goods -- 11.1%
AlliedSignal Inc. 147,482 6,267,985
AMP Inc. 13,326 713,774
Armstrong World Industries Inc. 5,967 400,162
Avery Dennison Corp. 8,295 331,800
Boeing Co. 11,966 651,399
Bombardier Inc. (Class B) 3,263 66,108
Browning-Ferris Industries Inc. 24,921 948,555
Cooper Industries Inc. 14,413 779,203
Corning Inc. 8,159 385,513
Deere & Co. 40,749 2,190,259
Dover Corp. 78,330 5,316,649(h)
Emerson Electric Co. 94,152 5,425,509
Harnischfeger Industries Inc. 3,263 139,493
Hubbell Inc. (Class B) 95,592 4,421,130
Jacobs Engineering Group Inc. 2,176 66,640(a)
Lockheed Martin Corp. 9,775 1,042,259
Mannesmann AG 462 220,156
Martin Marietta Materials Inc. 31,697 1,141,092
Masco Corp. 4,351 199,330
Minnesota Mining &
Manufacturing Co. 5,983 553,427
Molex Inc. (Class A) 18,493 753,590
Number
of Shares Value
- --------------------------------------------------------------------------------
National Service Industries Inc. 7,614 $ 334,540
Parker Hannifin Corp. 8,290 373,050
Sherwin Williams Co. 44,106 1,298,370
Textron Inc. 73,566 4,781,790
Timken Co. 12,238 490,285
Tyco International Ltd. 5,869 481,625
U.S. Filter Corp. 314 13,522(a)
U.S.A. Waste Services Inc. 7,0162 79,763(a)
United Technologies Corp. 30,396 2,462,076
Waste Management Inc. 24,476 855,130
43,384,184
Consumer - Cyclical -- 7.4%
ACNielsen Corp. 35,625 855,000(a)
Automatic Data Processing Inc. 52,486 2,624,300
Carnival Corp. (Class A) 12,782 591,168
Catalina Marketing Corp. 7,366 382,111(a)
Circus Circus Enterprises Inc. 34,538 869,926(a)
Comcast Corp. (Class A) 47,020 1,210,765
Comcast UK Cable Partners
Ltd. (Class A) 14,685 150,521
CUC International Inc. 22,572 699,732(a)
Disney (Walt) Co. 50,321 4,057,131(h)
Echlin Inc. 3,807 133,483
Federal-Mogul Corp. (Rts.) 5,439 201,923
Ford Motor Co. 37,154 1,681,218
Gannett Inc. 27,418 2,959,430
General Motors Corp. 5,983 400,487
Goodyear Tire & Rubber Co. 7,887 542,231
Harman International
Industries Inc. 11,422 571,814
Interpublic Group Cos. Inc. 46,775 2,400,142
ITT Industries Inc. 12,510 415,176
McDonalds Corp. 33,809 1,610,154
Metromedia International
Group Inc. 7,332 88,901(a)
Nine West Group Inc. 5,439 213,821(a)
Scholastic Corp. 610 24,095(a)
Stanley Works 19,444 836,092
Tele-Communications Inc. 18,367 378,819(a)
Tele-Communications Inc.
(Series A) 44,319 908,539(a)
Tele-Communications Inc. Liberty
Media Group (Series A) 24,045 719,847(a)
Time Warner Inc. 14,593 790,758
Viad Corp. 12,238 233,287
Xerox Corp. 26,834 2,259,087
28,809,958
[GRAPHIC] Consumer - Stable -- 8.8%
Anheuser Busch Cos. Inc. 73,172 3,301,886(h)
Archer-Daniels Midland Co. 28,012 670,525
Avon Products Inc. 19,096 1,183,952
Coca Cola Co. 2,698 164,409
Colgate Palmolive Co. 23,540 1,640,444
Conagra Inc. 16,317 1,076,922
CPC International Inc. 19,308 1,788,404
General Mills Inc. 15,229 1,049,849
Gillette Co. 5,167 445,977
Hershey Foods Corp. 1,632 92,208
International Flavours 5,510 269,990
International Multifoods Corp. 3,807 113,020
Kellogg Co. 6,799 286,408
Kimberly Clark Corp. 74,514 3,646,529
Nestle S.A. (Regd.) 488 679,791
- ----------
See Notes to Schedule of Investments and Financial Statements
17
<PAGE>
GE U.S. EQUITY FUND
Number
of Shares Value
- --------------------------------------------------------------------------------
Pepsico Inc. 138,493 $ 5,617,622
Philip Morris Cos. Inc. 101,709 4,227,280(a)
Procter & Gamble Co. 58,622 4,048,582
Ralston Purina Co. 12,374 1,095,099
Sara Lee Corp. 42,067 2,166,451
Sysco Corp. 10,334 381,712
Unilever N.V 2,801 595,563
34,542,623
[GRAPHIC] Energy -- 11.3%
Amoco Corp. 32,411 3,123,610(h)
Anadarko Petroleum Co. 10,650 764,803
Atlantic Richfield Co. 33,564 2,867,624
Baker Hughes Inc. 46,450 2,032,188
British Petroleum PLC ADR 17,814 1,617,731
Burlington Resources Inc. 33,396 1,713,632
Diamond Offshore Drilling Inc. 3,807 210,099
Elf Aquitaine S.A. ADR 4,623 308,296
Exxon Corp. 107,801 6,906,002(h)
Halliburton Co. 15,773 820,196
Louisiana Land & Exploration Co. 7,615 596,350
Mobil Corp. 47,999 3,551,926
Nabors Industries Inc. 19,037 741,253(a)
Royal Dutch Petroleum Co. ADR 86,904 4,823,172
Schlumberger Ltd. 84,718 7,132,197
Texaco Inc. 41,760 2,565,630
Tosco Corp. 10,334 359,752
Total S.A. ADR 12,510 716,980
Union Pacific Resources Group Inc. 17,730 464,304
Unocal Corp. 46,444 2,008,703
Valero Energy Corp. 9,518 312,309
Western Atlas Inc. 3,535 311,080(a)
43,947,837
[GRAPHIC] Financial -- 12.1%
American Express Co. 47,999 3,929,918(h)
AmSouth Bancorp 3,808 184,450
Bank of New York Inc. 26,787 1,285,776
BankAmerica Corp. 24,639 1,806,347
BankBoston Corp. 18,493 1,635,475
Bankers Trust New York Corp. 3,807 466,357
Barnett Banks Inc. 5,167 365,565
Beneficial Corp. (Rts.) 5,167 393,661
Chase Manhattan Corp. 16,045 1,893,310
Citicorp 47,591 6,374,220
CMAC Investment Corp. 4,766 255,577
Countrywide Credit Industries 17,356 632,409
Crestar Financial Corp. (Rts.) 4,351 203,953
Edwards A.G. Inc. 8,262 424,460
Federal National Mortgage Assoc 154,457 7,259,479
First Chicago NBD Corp. 4,351 327,413
ING Groep N.V. ADR 12,429 570,957
Mellon Bank Corp. 25,664 1,405,104
Merrill Lynch & Co. Inc. 7,615 564,938
Morgan Stanley, Dean Witter,
Discover & Co. 86,342 4,667,864
Norwest Corp. 5,439 333,139
State Street Corp. 20,124 1,226,306
Summit Bancorp 8,160 362,610
T. Rowe Price & Associates 5,167 347,481
Travelers Group Inc. 113,704 7,760,323
Trizec Hahn Corp. 7,343 189,541
United States Bancorp 7,615 734,847
Wells Fargo & Co. 6,510 1,790,250
47,391,730
Number
of Shares Value
- --------------------------------------------------------------------------------
[GRAPHIC] Healthcare -- 11.2%
Abbott Laboratories 76,057 $4,862,895
Allergan Inc. 33,178 1,200,629
American Home Products Corp. 19,852 1,449,196(h)
Baxter International Inc. 15,284 798,589
Bristol-Myers Squibb Co. 86,893 7,190,396
Cardinal Health Inc. 31,002 2,201,142
Dentsply International Inc. 8,974 502,544
Eli Lilly & Co. 9,409 1,133,196
Forest Labs Inc. 1,360 57,290(a)
Johnson & Johnson 98,961 5,702,628
Lincare Holdings Inc. 12,782 644,692(a)
Merck & Co. Inc. 49,712 4,968,093
Pfizer Inc. 67,030 4,025,989
Scherer (R.P.) Corp. 23,306 1,443,515(a)
Schering Plough Corp. 45,688 2,352,932
Smithkline Beecham PLC ADR 53,030 2,591,841
Sun Healthcare Group Inc. 10,062 206,900(a)
Tenet Healthcare Corp. 8,159 237,631(a)
Warner-Lambert Co. 1,360 183,515
Watson Pharmaceuticals Inc. 35,897 2,144,846(a)
43,898,459
Insurance -- 6.1%
Aegon N.V 3,145 250,617
American International Group
Inc 45,749 4,720,725
Chubb Corp. 29,915 2,125,835
CIGNA Corp. 2,992 557,260
Equitable Cos. Inc. (Series B) 5,983 245,677
General Reinsurance Corp. 16,279 3,231,381
Hartford Financial Services
Group Inc. 6,527 561,730
Lincoln National Corp. 20,940 1,457,947
Loews Corp. 35,843 4,048,019
Marsh & McLennan Cos. Inc. 32,634 2,500,580
Provident Cos. Inc. 30,458 2,130,156
Reliastar Financial Corp. 19,852 790,358
TIG Holdings Inc. 20,124 700,567
UNUM Corp. 11,814 539,014
23,859,866
Retail Trade -- 4.7%
American Stores Co. 27,543 671,361
Arbor Drugs Inc. 31,993 743,837
Costco Cos. Inc. 22,572 849,272(a)
Dayton Hudson Corp. 26,379 1,581,091
Federated Department Stores Inc. 29,099 1,254,894(a)
Home Depot Inc. 48,315 2,518,419
Lowes Cos. Inc. 20,940 814,043
Sears Roebuck & Co. 64,856 3,692,738
Toys 'R Us Inc. 39,639 1,407,185(a)
Wal-Mart Stores Inc. 129,107 4,728,544
18,261,384
Technology - Electronics &
Equipment -- 7.3%
3Com Corp. 17,362 889,802(a)
Analog Devices Inc. 2,312 77,452(a)
Applied Materials Inc. 7,479 712,375(a)
Cisco Systems Inc. 30,645 2,239,000(a)
Compaq Computer Corp. 8,159 609,885(a)
DSC Communications Corp. 372 10,021(a)
- ----------
See Notes to Schedule of Investments and Financial Statements
18
<PAGE>
SCHEDULE OF INVESTMENTS -- SEPTEMBER 30, 1997
Number
of Shares Value
- --------------------------------------------------------------------------------
EMC Corp. 1,577 $ 92,057(a)
Hewlett Packard Co. 50,181 3,490,716
Intel Corp. 93,551 8,635,927
International Business Machines 63,908 6,770,254
Northern Telecom Ltd. 5,167 537,045
Perkin Elmer Corp. 7,071 516,625
Pitney Bowes Inc. 25,780 2,144,574
Storage Technology Corp. 3,943 188,525(a)
Sun Microsystems Inc. 9,649 451,694(a)
Varian Associates Inc. (Rts.) 15,012 932,620
28,298,572
Technology - Software & Services -- 3.9%
ChoicePoint Inc. 3,624 135,447(a)
Computer Associates
International Inc. 25,835 1,855,276
Equifax Inc. 131,352 4,129,378
First Data Corp. 145,352 5,459,784
Microsoft Corp. 6,799 899,593(a)
Reuters Holdings PLC ADR
(Class B) 40,450 2,882,063
15,361,541
Transportation -- 1.8%
Burlington Northern Santa Fe 26,243 2,535,730
Canadian Pacific Ltd. 58,469 1,728,490
Continental Airlines Inc.(Class B) 33,457 1,317,369(a,b)
Delta Air Lines Inc. 4,351 409,810
Laidlaw Inc. 13,598 203,120
Pittston Brinks Group 9,246 370,418
Union Pacific Corp. N.V 10,062 630,133
7,195,070
Utilities -- 6.1%
360 Communications Co. 3,535 73,793(a)
AirTouch Communications Inc. 126,457 4,481,327(a)
American Electric Power Inc. 31,327 1,425,379
American Telephone &
Telegraph Corp. 31,475 1,394,736
Bell Atlantic Corp. - Pennsylvania 19,790 1,591,858
Bellsouth Corp. 34,739 1,606,679
CMS Energy Corp. 9,790 362,230
Duke Power Co. 25,563 1,263,771
El Paso Natural Gas Co. 6,527 395,291
Florida Progress Corp. (Rts.) 10,878 358,974
FPL Group Inc. 14,620 749,275
GTE Corp. 44,328 2,011,383
MCN Corp. 7,615 243,680
New Century Energies Inc. 10,100 419,781
NTL Inc. 67,683 1,785,139(a)
Pinnacle West Capital Corp. 6,957 233,929
SBC Communications Inc. 45,144 2,770,713
Number
of Shares Value
- --------------------------------------------------------------------------------
Sonat Inc. 16,317 $ 830,127
Sprint Corp. 5,575 278,750
WorldCom Inc. 41,336 1,462,261(a)
23,739,076
Total Common Stock
(Cost $270,334,918) 375,466,136
- --------------------------------------------------------------------------------
Preferred Stock -- 0.5%
- --------------------------------------------------------------------------------
Airtouch Communications Inc.
(Class B), 6.00% 5,020 163,464
Microsoft Corp. (Series A), $2.20 18,166 1,592,931
Total Preferred Stock
(Cost $1,627,442) 1,756,395
Total Investments in Securities
(Cost $271,962,360) 377,222,531
- --------------------------------------------------------------------------------
Short-Term Investments -- 3.4%
- --------------------------------------------------------------------------------
GEI Short Term Investment Fund 12,921,880 12,921,880
Principal
Amount Value
Time Deposit -- 0.1%
State Street Cayman Islands
6.125% 10/01/97 $ 485,000 485,000
Total Short-Term Investments
(Cost $13,406,880) 13,406,880
Other Assets and Liabilities,
net 0.0% 129,048
------------
NET ASSETS -- 100% $390,758,459
============
Other Information
- --------------------------------------------------------------------------------
The GE U.S. Equity Fund had the following long Futures Contracts open at
September 30, 1997:
Number
Expiration of Underlying Unrealized
Description Date Contracts Face Value Gain
- --------------------------------------------------------------------------------
S&P 500 Dec. 1997 10 $ 4,772,500 $ 13,976
[GRAPHIC] ICONS REPRESENT THE TOP FIVE INDUSTRY WEIGHTINGS IN THE GE U.S. EQUITY
FUND AT SEPTEMBER 30, 1997.
- ----------
See Notes to Schedule of Investments and Financial Statements
19
<PAGE>
GE MID-CAP GROWTH FUND
Q&A
Elaine G. Harris is the Portfolio Manager of the GE Mid-Cap Growth Fund. Elaine
is currently a Senior Vice President of GE Investments and manages equity assets
of approximately $1 billion. She has more than 13 years of investment experience
and has held positions with GE Investments since 1993. From 1991 to 1993, Elaine
served as Senior Vice President and Portfolio Manager at SunAmerica Asset
Management and, prior thereto, as Portfolio Manager at Alliance Capital
Management Company and in various positions at Fidelity Management and Research
Corporation. Elaine is a member of the New York Society of Security Analysts.
She holds an MBA in Finance from the Wharton School and a BA in Math and
Computer Science from Tufts University.
[PHOTO]
Elaine G. Harris
Prior to the merger between the GE Funds and the Investors Trust Funds (IT), the
GE Mid-Cap Growth Fund (IT Growth Fund) was sub-advised by Mr. Alan N. Hoffman
of Value Line, Inc. In the following Q&A, Mr. Hoffman provides a summary of the
fund's performance during the past eleven months and Ms. Harris comments on the
future strategy and outlook of the fund.
Q. How did the GE Mid-Cap Growth Fund's industry benchmark and Lipper peers
perform for the eleven-month period ended September 30, 1997?
A. For the eleven-month period ended September 30, 1997, the Standard & Poor's
400 Composite Index returned 36.86%. Our Lipper peer group of 214 Mid-Cap
funds posted an average return of 28.8% for the same period. To see how
your class of shares in the Mid-Cap Growth Fund performed compared to the
aforementioned benchmarks, please refer to the following page.
Q. Mr. Hoffman, please elaborate on the fund's performance.
A. Our emphasis on technology stocks, which recorded solid relative
performance, bolstered the investment results. The fund's performance was
hindered by exposure to interest-rate sensitive stocks during the rise in
interest rates in late March, and again in August, when markets declined on
the release of stronger-than-expected economic reports.
Q Mr. Hoffman, what corporate and economic events affected the financial
markets and the fund in the past year?
A. The fact that corporate earnings remained relatively strong throughout much
of the period helped performance. Aside from late March and August,
investors really were not too concerned about inflation, which increased
their confidence in the stock market. The Federal Reserve's decision to
maintain a neutral monetary policy over the last six months also
contributed to a favorable environment for equities.
Q. Ms. Harris, what is your investment strategy?
A. Our strategy is to find companies with superior earnings growth rates
compared to the market, selling at attractive valuations. Generally, we buy
companies whose price/earnings ratio is less than its earnings growth rate.
We look for companies that meet our investment standards and are prominent
players in their businesses. They must have solid finances and strong
management.
Q. Ms. Harris, what is your outlook for the fund?
A. We have a generally favorable outlook. There continues to be quite a few
mid-cap stocks with higher growth rates and better valuations compared to
the market. While technology stocks overall have enjoyed a strong run,
there are sectors in technology which we believe possess superior growth
potential that have underperformed in recent months. Healthcare stocks
offer good prospects, due to an aging population. Finally, the strong
economy has put more money in the pockets of Americans, which should
translate to higher profits for the consumer goods sector. Going forward,
we will continue to focus on high-quality companies that offer superior
growth potential.
20
<PAGE>
GE MID-CAP GROWTH FUND
================================================================================
TOP TEN LARGEST HOLDINGS
AT SEPTEMBER 30, 1997
================================================================================
Barnes & Noble Inc. 1.06%
- --------------------------------------------------------------------------------
National Data Corp. 1.06%
- --------------------------------------------------------------------------------
Sterling Commerce Inc. 1.05%
- --------------------------------------------------------------------------------
GATXCorp. 1.05%
- --------------------------------------------------------------------------------
Crompton & Knowles Corp. 1.04%
- --------------------------------------------------------------------------------
Nokia Corp. ADR 1.04%
- --------------------------------------------------------------------------------
HealthCare Financial Partners Inc. 1.04%
- --------------------------------------------------------------------------------
Imperial Credit Industries Inc. 1.04%
- --------------------------------------------------------------------------------
Interpublic Group Cos. Inc. 1.04%
- --------------------------------------------------------------------------------
CNF Transportation Inc. 1.04%
- --------------------------------------------------------------------------------
INVESTMENT PROFILE
GE Mid-Cap Growth Fund's investment objective is long-term growth of capital
which the fund seeks to achieve by investing primarily in equity securities of
companies with medium-sized market capitalization that have the potential for
above-average growth.
* LIPPER PERFORMANCE COMPARISON
Mid-Cap Peer Group
Based on average annual total returns for the periods ended 9/30/97
11 One Three
Months + Year Year
Number of funds
in peer group: 214 211 123
Peer group
average
total return: 28.8% 26.9% 23.2%
Lipper categories
in peer group: Mid-Cap
*See Notes to Performance for explanation of peer categories
See page 58 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
[GRAPHIC]
LINE CHART
AVERAGE ANNUAL
TOTAL RETURN
11 ONE THREE SINCE
MONTHS + YEAR YEAR INCEPTION
GE Mid-Cap Growth 33.81% 33.11% 26.84% 19.88%
GE Mid-Cap Growth
w/load 26.12% 25.45% 24.36% 18.15%
(maximum load-5.75%)
S&P 400 Mid-Cap 36.86% 37.09% 23.79% 17.11%
CLASS B SHARES
[GRAPHIC]
LINE CHART
AVERAGE ANNUAL
TOTAL RETURN
11 ONE THREE SINCE
MONTHS + YEAR YEAR INCEPTION
GE Mid-Cap Growth 33.02% 32.20% 25.94% 19.05%
GE Mid-Cap Growth
w/load 29.02% 28.20% 25.52% 19.05%
maximum load 4.0% 4.0% 2.0% 0.0%
S&P 400 Mid-Cap 36.86% 37.09% 23.79% 17.11%
- ----------
+ As a result of the merger between the Investors Trust Funds and the GE
Funds, the fiscal year end of the Mid-Cap Growth Fund was changed from
October 31st to September 30th. The 11 month period indicated represents
November 1, 1996 through September 30, 1997.
21
<PAGE>
SCHEDULE OF INVESTMENTS -- SEPTEMBER 30, 1997
GE MID-CAP GROWTH FUND
[GRAPHIC]
PIE CHART
GE MID-CAP GROWTH FUND
Energy & Basic Material 11.1%
Consumer 9.0%
Capital Goods 18.9%
Healthcare 10.9%
Financial Services 16.1%
Retail Trade 7.9%
Technology 13.0%
Transportation 6.0%
Utilities 1.9%
Cash and Other 5.2%
Number
of Shares Value
- --------------------------------------------------------------------------------
Common Stock -- 94.8%
- --------------------------------------------------------------------------------
Basic Materials -- 3.0%
Crompton & Knowles Corp. 16,949 $ 450,208
Minerals Technologies Inc. 9,587 427,221
Morton International Inc. 12,326 437,573
1,315,002
[GRAPHIC] Capital Goods -- 18.9%
AlliedSignal Inc. 10,272 436,560
Avnet Inc. 6,848 435,276
AVX Corp. 12,669 410,159
Berg Electronics Corp. 8,046 432,472(a)
Case Corp. 6,334 422,003
Cummins Engine Co. Inc. 5,478 427,626
Deere & Co. 7,875 423,281
Dover Corp. 6,506 441,595
Hexcel Corp. 14,552 417,461(a)
Hubbell Inc. (Class B) 9,074 419,673
Kennametal Inc. 8,900 431,071
Martin Marietta Materials Inc. 12,155 437,580
Masco Corp. 9,245 405,047
Molex Inc. (Class A) 10,786 439,529
Textron Inc. 6,677 434,005
Thermo Electron Corp. 10,957 438,280(a)
Thomas & Betts Corp. 7,704 420,831
Tyco International Ltd. 5,307 435,506
U.S. Filter Corp. 10,272 442,338(a)
8,150,293
[GRAPHIC] Consumer - Cyclical -- 8.0%
CKS Group Inc. 10,957 410,888(a)
Harman International
Industries Inc. 8,902 445,656
HFS Inc. 5,821 433,301(a)
Interpublic Group Cos. Inc. 8,731 448,009
Jacor Communications Inc. 9,587 423,626(a)
Jones Apparel Group Inc. 8,218 443,772(a)
Sunbeam Corp. 9,758 433,011
Wolverine World Wide Inc. 16,093 406,348
3,444,611
Number
of Shares Value
- --------------------------------------------------------------------------------
Consumer - Stable -- 1.0%
Sealed Air Corp. 7,875 $ 432,633(a)
[GRAPHIC] Energy -- 8.1%
Anadarko Petroleum Co. 5,992 430,301
Apache Corp. 10,272 440,412
BJ Services Co. 5,821 432,209(a)
Louisiana Land & Exploration Co. 5,478 428,996
Nabors Industries Inc. 10,957 426,638(a)
Schlumberger Ltd. 5,307 446,783
Tosco Corp. 12,840 446,992
USX-Marathon Group 11,642 432,937
3,485,268
[GRAPHIC] Financial -- 12.1%
American Express Co. 5,307 434,511
Comdisco Inc. (Rts.) 13,696 445,976
Crestar Financial Corp. (Rts.) 9,074 425,344
FINOVA Group Inc. 4,622 437,357
First American Corp. 9,074 443,492
First Commerce Corp. 7,875 441,984
Firstar Corp. (Rts.) 11,642 422,022
HealthCare Financial Partners Inc. 14,552 449,293(a)
Imperial Credit Industries Inc. 16,949 449,148(a)
New Century Financial Corp. 24,310 414,789(a)
Summit Bancorp 9,758 433,621
Travelers Group Inc. 6,163 420,625
5,218,162
[GRAPHIC] Healthcare -- 10.9%
Baxter International Inc. 8,218 429,390
Cardinal Health Inc. 6,163 437,573
Covance Inc. 20,373 440,566(a)
HBO & Co. 10,614 400,679
Henry Schein Inc. 12,155 434,541(a)
McKesson Corp. 4,280 436,292
Mylan Laboratories Inc. 18,832 422,543
Sybron International Corp. 10,101 433,712(a)
Tenet Healthcare Corp. 15,237 443,778(a)
Teva Pharmaceutical
Industries Ltd. ADR 7,704 429,498
United Healthcare Corp. 8,389 419,450
4,728,022
Insurance -- 4.0%
American International Group Inc. 4,280 441,643
Equitable Cos. Inc. (Series B) 10,272 421,794
Hartford Financial Services
Group Inc. 4,965 427,300
Provident Cos. Inc. 6,334 442,984
1,733,721
Retail Trade -- 7.9%
Barnes & Noble Inc. 16,264 459,484(a)
Consolidated Stores Corp. 10,101 422,979(a)
Federated Department Stores Inc. 9,758 420,814(a)
General Nutrition Cos. Inc. 14,381 418,847(a)
Samsonite Corp. 9,930 435,679(a)
St. John Knits Inc. 9,416 423,131
Tiffany & Co. 9,587 407,447
- ----------
See Notes to Schedule of Investments and Financial Statements
22
<PAGE>
SCHEDULE OF INVESTMENTS -- SEPTEMBER 30, 1997
Number
of Shares Value
- --------------------------------------------------------------------------------
Zale Corp. 15,579 $ 404,080(a)
3,392,461
Technology - Electronics &
Equipment -- 8.0%
Analog Devices Inc. 12,669 424,412(a)
Gilat Satellite Networks Ltd. 11,813 435,789(a)
Kemet Corp. 14,038 426,404(a)
Kent Electronics Corp. 10,957 432,801(a)
Newbridge Networks Corp. 7,019 420,263(a)
Nokia Corp. ADR 4,794 450,037
Northern Telecom Ltd. 4,109 427,079
Perkin Elmer Corp. 5,821 425,297
3,442,082
Technology - Software & Services -- 5.0%
BMC Software Inc. 6,506 421,264(a)
Cadence Design Systems Inc. 8,046 430,461(a)
National Data Corp. 11,128 456,248
Sterling Commerce Inc. 12,669 455,292(a)
SunGard Data Systems Inc. 16,949 411,013(a)
2,174,278
Transportation -- 6.0%
Caliber System Inc. 8,218 445,826
Canadian Pacific Ltd. 14,552 430,194
CNF Transportation Inc. 10,272 447,474
GATX Corp. 6,677 451,115
Laidlaw Inc. 27,221 406,614
Wisconsin Central
Transportation Corp. 13,011 413,912(a)
2,595,135
Number
of Shares Value
- --------------------------------------------------------------------------------
Utilities -- 1.9%
AirTouch Communications Inc. 11,813 $ 418,623(a)
WorldCom Inc. 11,813 417,885(a)
836,508
Total Investments in Securities
(Cost $39,682,462) 40,948,176
- --------------------------------------------------------------------------------
Short-Term Investments -- 1.6%
- --------------------------------------------------------------------------------
SSgA Money Market Fund Class A 680,765 680,765
SSgA U.S. Government Money
Market Fund 2,398 2,398
Total Short-Term Investments
(Cost $683,163) 683,163
Other Assets and Liabilities,
net 3.6% 1,534,038
- --------------------------------------------------------------------------------
NET ASSETS -- 100% $43,165,377
================================================================================
[GRAPHIC] ICONS REPRESENT THE TOP FIVE INDUSTRY WEIGHTINGS IN THE GE MID-CAP
GROWTH FUND AT SEPTEMBER 30, 1997.
- --------------------------------------------------------------------------------
See Notes to Schedule of Investments and Financial Statements
23
<PAGE>
GE VALUE EQUITY FUND
Q&A
Peter J. Hathaway is the Portfolio Manager for the GE Value Equity Fund. He is
currently a Senior Vice President of GE Investments and manages equity assets of
over $6 billion. Pete has more than 36 years of investment experience and has
held positions with GE Investments since 1985. Pete was Senior Vice President
and portfolio manager at Ameritrust from 1975 to 1985, and prior therto he held
investment positions at Merrill Lynch, Equitable Life and US Trust. He holds a
MBA from the Wharton School at the University of Pennsylvania and a BS in
Finance from Arizona State University.
Prior to the merger between the GE Funds and the Investors Trust Funds the GE
Value Equity Fund (formerly the IT Value Fund) was sub-advised by Mr. Jeffrey E.
Simmons of Duff & Phelps Management, Co. In the following Q&A, Mr. Simmons
provides a look back on the performance of the fund and Mr. Hathaway provides
the future strategy and outlook of the fund.
Q. How did the GE Value Equity Fund's industry benchmark and Lipper peers
perform for the eleven-month period ended September 30, 1997?
A. For the eleven-month period ended September 30, 1997, the S & P 500/ Barra
Value Index returned 34.64%. Our Lipper peer group of 655 Growth and Income
funds posted an average return of 33.2% for the same period. To see how
your class of shares in the GE Value Equity Fund performed compared to the
aforementioned benchmarks, please refer to the following page.
Q. Mr. Simmons, please elaborate on the fund's performance.
A. Large, blue chip stocks continued to record strong investment results. A
favorable economic climate, punctuated by low inflation and declining
interest rates buoyed the fund's performance in April, June, July and
September. However, minor short-term earnings weakness on a handful of
holdings detracted from performance.
Q. Mr. Hathaway, what is your investment strategy?
A. Our strategy is to focus on investing primarily in companies with large
market capitalization that we feel are out of favor as a result of a
variety of internal and external factors and that we believe to be
undervalued relative to their true business prospects. Internal factors may
include operational mismanagement or strategic mistakes. External factors
may include a change in the environment or a shift in the competitive
dynamics of an industry. We seek companies that are among the leaders in
their respective industries with fundamentally strong balance sheets and
good managements.
Q. Mr. Hathaway, how have you positioned the fund going forward?
A. As of the end of September, the GE Value Equity Fund was restructured to
reflect our current views for 1997 and 1998. Sector weightings in Consumer
Non-Durables and Capital Goods were reduced and Utilities, Energy and
Financials were increased while broadening the diversification of the
portfolio. It is our view that, given extended valuations of the market in
general, better values are to be found in sectors such as Utilities that
have underperformed and are at relatively low valuations. As the outlook
for S&P earnings growth moderates for 1998, the large, international oil
companies should experience relatively robust earnings growth while
providing downside protection with their above-average dividend yields.
Financial stocks should continue to benefit from lower interest rates, the
growth in investment management and industry consolidations.
Q. Mr. Hathaway, what is your outlook for the fund?
A. Recent market volatility driven by excess capacity and slower economic
growth in Asia should ease domestic inflation concerns; however, this will
also contribute to lower growth expectations for export-oriented domestic
firms while providing cost benefits to those firms sourcing goods from that
region. Core CPI has grown at the slowest pace in 32 years and we expect
inflation to remain stable in 1998 with the possibility of further
disinflation. We will continue to focus on bottom-up stock selection
emphasizing undervalued, out-of-favor investment opportunities offering
upside potential and what we believe will possess limited downside risk.
[PHOTO]
Peter J. Hathaway
24
<PAGE>
GE VALUE EQUITY FUND
================================================================================
TOP TEN LARGEST HOLDINGS
AT SEPTEMBER 30, 1997
================================================================================
International Business Machines 2.73%
- --------------------------------------------------------------------------------
Intel Corp. 2.60%
- --------------------------------------------------------------------------------
Du Pont de Nemours (E.I.) & Co. 2.25%
- --------------------------------------------------------------------------------
Morgan Stanley, Dean Witter,
Discover & Co. 2.21%
- --------------------------------------------------------------------------------
Bristol-Myers Squibb Co. 2.08%
- --------------------------------------------------------------------------------
Exxon Corp. 1.98%
- --------------------------------------------------------------------------------
Wal-Mart Stores Inc. 1.95%
- --------------------------------------------------------------------------------
Citicorp 1.83%
- --------------------------------------------------------------------------------
Merck & Co. Inc. 1.59%
- --------------------------------------------------------------------------------
Textron Inc. 1.51%
- --------------------------------------------------------------------------------
INVESTMENT PROFILE
GE Value Equity Fund's investment objective is long-term growth of capital and
future income which the Fund seeks to achieve by investing primarily in equity
securities of companies with large-sized market capitalization that the Fund's
management considers to be undervalued by the market.
* LIPPER PERFORMANCE COMPARISON
Growth and Income Peer Group Based on average
annual total returns for the periods ended 9/30/97
11 + One Three
Months Year Year
Number of funds
in peer group: 655 640 413
Peer group
average
total return: 33.2% 36.2% 25.9%
Lipper categories
in peer group: Growth & Income, S&P 500 Index
*See Notes to Performance for explanation of peer categories
See page 58 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
[GRAPHIC]
LINE CHART
AVERAGE ANNUAL
TOTAL RETURN
11 ONE THREE SINCE
MONTHS + YEAR YEAR INCEPTION
GE Value Equity 36.18% 39.80% 27.66% 19.50%
GE Value Equity
w/load 28.35% 31.76% 25.16% 17.77%
(maximum load-5.75%)
S&P 500/Barra Value 34.64% 39.22% 28.24% 20.21%
- --------------------------------------------------------------------------------
CLASS B SHARES
[GRAPHIC]
LINE CHART
AVERAGE ANNUAL
TOTAL RETURN
11 ONE THREE SINCE
MONTHS + YEAR YEAR INCEPTION
GE Value Equity 35.23% 38.84% 26.69% 18.68%
GE Value Equity
w/load 31.23% 34.84% 26.28% 18.68%
maximum load 4.0% 4.0% 2.0% 0.0%
S&P 500/Barra Value 34.64% 39.22% 28.24% 20.21%
- --------------------------------------------------------------------------------
+ As a result of the merger between the Investors Trust Funds and the GE
Funds, the fiscal year end of the Value Equity Fund was changed from
October 31st to September 30th. The 11 month period indicated represents
November 1, 1996 through September 30, 1997.
25
<PAGE>
SCHEDULE OF INVESTMENTS -- SEPTEMBER 30, 1997
GE VALUE EQUITY FUND
[GRAPHIC]
PIE CHART
GE VALUE EQUITY FUND
Energy & Basic Material 16.9%
Consumer 13.9%
Capital Goods 10.4%
Healthcare 9.7%
Financial Services 18.8%
Retail Trade 6.2%
Technology 12.3%
Transportation 2.4%
Utilities 7.7%
Cash and Other 1.7%
Number
of Shares Value
- --------------------------------------------------------------------------------
Common Stock -- 97.6%
- --------------------------------------------------------------------------------
Basic Materials -- 5.0%
Barrick Gold Corp. 5,695 $ 140,951
Du Pont de Nemours (E.I.) & Co. 19,849 1,221,954
FMC Corp. 814 72,243(a)
IMC Global Inc. 1,627 57,352
Mead Corp. 2,795 201,939
Newmont Mining Corp. 11,064 497,188
Rayonier Inc. 3,887 188,034
Weyerhaeuser Co. 6,132 364,087
2,743,748
[GRAPHIC] Capital Goods -- 10.4%
AlliedSignal Inc. 13,519 574,557(h)
Armstrong World Industries Inc. 1,785 119,707
Boeing Co. 3,579 194,832
Cooper Industries Inc. 4,312 233,117
Deere & Co. 9,586 515,247
Dover Corp. 5,579 378,675
Emerson Electric Co. 11,608 668,911
Harnischfeger Industries Inc. 976 41,724
Hubbell Inc. (Class B) 10,107 467,449
Jacobs Engineering Group Inc. 651 19,937(a)
Lockheed Martin Corp. 2,924 311,771
Martin Marietta Materials Inc. 5,902 212,472
Minnesota Mining &
Manufacturing Co. 1,302 120,435
Parker Hannifin Corp. 2,480 111,600
Sherwin Williams Co. 5,872 172,857
Textron Inc. 12,617 820,105
Timken Co. 3,661 146,669
U.S.A. Waste Services Inc. 2,099 83,698(a)
United Technologies Corp. 5,459 442,179
5,635,942
Number
of Shares Value
- --------------------------------------------------------------------------------
Consumer - Cyclical -- 4.8%
ACNielsen Corp. 2,929 $ 70,296(a)
Automatic Data Processing Inc. 2,441 122,050
Disney (Walt) Co. 5,719 461,094
Ford Motor Co. 8,298 375,484
Gannett Inc. 2,442 263,583
Goodyear Tire & Rubber Co. 2,359 162,181
Interpublic Group Cos. Inc. 1,139 58,445
ITT Industries Inc. 1,464 48,587
McDonalds Corp. 5,532 263,462
Stanley Works 2,961 127,323
Tele-Communications Inc. Liberty
Media Group (Series A) 1,990 59,576(a)
Xerox Corp. 6,996 588,976
2,601,057
Consumer - Stable -- 9.1%
Anheuser Busch Cos. Inc. 13,341 602,013(h)
Archer-Daniels Midland Co. 8,379 200,572
Colgate Palmolive Co. 3,091 215,404
Conagra Inc. 4,881 322,146
CPC International Inc. 4,393 406,902
General Mills Inc. 2,766 190,681
Kimberly Clark Corp. 6,183 302,581
Pepsico Inc. 17,897 725,947
Philip Morris Cos. Inc. 8,948 371,901
Procter & Gamble Co. 10,738 741,593
Ralston Purina Co. 2,278 201,603
Sara Lee Corp. 10,413 536,269
Sysco Corp. 3,091 114,174
4,931,786
[GRAPHIC] Energy -- 11.9%
Amoco Corp. 6,508 627,209
Atlantic Richfield Co. 4,474 382,247
Baker Hughes Inc. 2,831 123,856
British Petroleum PLC ADR 4,393 398,939
Burlington Resources Inc. 4,068 208,739
Diamond Offshore Drilling Inc. 1,139 62,859
Exxon Corp. 16,758 1,073,559
Halliburton Co. 4,718 245,336
Louisiana Land & Exploration Co. 2,278 178,396
Mobil Corp. 9,762 722,388
Nabors Industries Inc. 5,695 221,749(a)
Royal Dutch Petroleum Co. ADR 13,830 767,565
Schlumberger Ltd. 6,508 547,892
Texaco Inc. 7,158 439,770
Total S.A. (Class B) ADR 3,742 214,463
Unocal Corp. 3,254 140,736
Western Atlas Inc. 1,058 93,104(a)
6,448,807
[GRAPHIC] Financial -- 13.1%
American Express Co. 6,996 572,797
AmSouth Bancorp 1,139 55,170
Bank of New York Inc. 4,881 234,288
BankAmerica Corp. 1,952 141,154
BankBoston Corp. 2,603 230,203
Bankers Trust New York Corp. 1,139 139,527
Barnett Banks Inc. 1,546 109,380
Beneficial Corp. (Rts.) 1,546 117,786
- ----------
See Notes to Schedule of Investments and Financial Statements
26
<PAGE>
SCHEDULE OF INVESTMENTS -- SEPTEMBER 30, 1997
Number
of Shares Value
- --------------------------------------------------------------------------------
Chase Manhattan Corp. 3,254 $ 383,972
Citicorp 7,414 993,013
Crestar Financial Corp. (Rts.) 1,302 61,031
Edwards A.G. Inc. 2,471 126,948
Federal National Mortgage Assoc 16,994 798,718
First Chicago NBD Corp. 1,302 97,976
ING Groep N.V. ADR 2,620 120,356
Mellon Bank Corp. 4,293 235,042
Merrill Lynch & Co. Inc. 2,278 168,999
Morgan Stanley, Dean Witter,
Discover & Co. 22,167 1,198,403
Norwest Corp. 1,627 99,654
Summit Bancorp 2,441 108,472
T. Rowe Price & Associates 1,546 103,969
Travelers Group Inc. 11,586 790,744
United States Bancorp 2,278 219,827
7,107,429
[GRAPHIC] Healthcare -- 9.7%
Abbott Laboratories 7,279 465,401
Allergan Inc. 7,322 264,965
American Home Products Corp. 1,302 95,046
Baxter International Inc. 2,408 125,818
Bristol-Myers Squibb Co. 13,667 1,130,944
Cardinal Health Inc. 1,627 115,517
Johnson & Johnson 12,284 707,865
Merck & Co. Inc. 8,623 861,761
Pfizer Inc. 6,183 371,366
Scherer (R.P.) Corp. 651 40,321(a)
Schering Plough Corp. 11,877 611,666
Smithkline Beecham PLC ADR 4,556 222,675
Watson Pharmaceuticals Inc. 3,905 233,324(a)
5,246,669
Insurance -- 5.7%
American International Group Inc. 6,818 703,532
Chubb Corp. 3,417 242,821
CIGNA Corp. 814 151,607
Equitable Cos. Inc. (Series B) 1,790 73,502
General Reinsurance Corp. 2,522 500,617
Hartford Financial Services
Group Inc. 1,952 167,994
Lincoln National Corp. 3,579 249,188
Loews Corp. 3,823 431,760
Provident Cos. Inc. 4,230 295,836
Reliastar Financial Corp. 5,125 204,039
TIG Holdings Inc. 1,627 56,640
3,077,536
Retail Trade -- 6.2%
American Stores Co. 8,239 200,826
Costco Cos. Inc. 6,752 254,044(a)
Dayton Hudson Corp. 5,857 351,054
Federated Department Stores Inc. 5,369 231,538(a)
Home Depot Inc. 6,833 356,170
Lowes Cos. Inc. 4,881 188,529
Sears Roebuck & Co. 12,855 731,931
Wal-Mart Stores Inc. 28,961 1,060,697
3,374,789
Number
of Shares Value
- --------------------------------------------------------------------------------
[GRAPHIC] Technology -
Electronics & Equipment -- 9.8%
3Com Corp. 3,742 $ 191,778(a)
Applied Materials Inc. 814 77,534(a)
Cisco Systems Inc. 7,077 517,063(a)
Compaq Computer Corp. 2,441 182,465(a)
Hewlett Packard Co. 11,226 780,909
Intel Corp. 15,294 1,411,827
International Business Machines 13,992 1,482,277
Northern Telecom Ltd. 1,546 160,687
Perkin Elmer Corp. 1,302 95,127
Pitney Bowes Inc. 1,952 162,382
Sun Microsystems Inc. 2,034 95,217(a)
Varian Associates Inc. (Rts.) 2,619 162,705
5,319,971
Technology - Software & Services -- 1.8%
Computer Associates
International Inc. 6,508 467,356
Equifax Inc. 6,183 194,378
First Data Corp. 8,135 305,571
967,305
Transportation -- 2.4%
Burlington Northern Santa Fe 5,206 503,030
Canadian Pacific Ltd. 12,365 365,540
Continental Airlines Inc. (Class B) 7,670 302,006(a)
Delta Air Lines Inc. 1,302 122,632
1,293,208
Utilities -- 7.7%
Airtouch Communications Inc. 8,135 296,419 (a)
American Electric Power Inc. 9,371 426,380
American Telephone &
Telegraph Corp. 5,857 259,538
Bell Atlantic Corp. - Pennsylvania 4,230 340,251
Bellsouth Corp. 8,298 383,783
CMS Energy Corp. 2,929 108,373
Duke Power Co. 6,833 337,806
El Paso Natural Gas Co. 1,952 118,218
Florida Progress Corp. (Rts.) 3,254 107,382
FPL Group Inc. 3,153 161,591
GTE Corp. 9,762 442,951
MCN Corp. 2,278 72,896
New Century Energies Inc. 3,021 125,560
Pinnacle West Capital Corp. 2,081 69,453
SBC Communications Inc. 7,647 469,335
Sonat Inc. 4,881 248,321
WorldCom Inc. 6,508 230,221(a)
4,198,478
Total Common Stock
(Cost $49,547,823) 52,946,725
- --------------------------------------------------------------------------------
Preferred Stock -- 0.7%
- --------------------------------------------------------------------------------
Microsoft Corp. (Series A), $2.20
(Cost $369,778) 4,214 369,778
Total Investments in Securities
(Cost $49,917,601) 53,316,503
- ----------
See Notes to Schedule of Investments and Financial Statements
27
<PAGE>
GE VALUE EQUITY FUND
Number
of Shares Value
- --------------------------------------------------------------------------------
Short-Term Investments -- 0.1%
- --------------------------------------------------------------------------------
GEI Short Term Investment Fund 74,000 $ 74,000
SSgA Money Market Fund Class A 1,841 1,841
SSgA U.S. Government Money
Market Fund 118 118
Total Short-Term Investments
(Cost $75,959) 75,959
Other Assets and Liabilities,
net 1.6% 878,823
-----------
NET ASSETS -- 100% $54,271,285
===========
Other Information
- --------------------------------------------------------------------------------
The GE Value Equity Fund had the following long Futures Contracts open at
September 30, 1997:
Number
Expiration of Underlying Unrealized
Description Date Contracts Face Value Loss
- --------------------------------------------------------------------------------
S&P 500 Dec. 1997 1 $ 477,250 $ 3,625
[GRAPHIC] ICONS REPRESENT THE TOP FIVE INDUSTRY WEIGHTINGS IN THE GE VALUE
EQUITY FUND AT SEPTEMBER 30, 1997.
- ----------
See Notes to Schedule of Investments and Financial Statements
28
<PAGE>
GESTRATEGIC INVESTMENT FUND
Q&A
The GE Strategic Investment Fund is managed jointly by David Carlson, Ralph
Layman and Bob MacDougall. The fund follows an asset allocation strategy and
each portfolio manager is responsible for investments within his area of
expertise: Mr. Carlson manages the domestic equity investments in the portfolio
(please refer to page 12 for Dave's biographic-al details), Mr. Layman manages
the international equity holdings within the portfolio (please refer to page 3
for Ralph's biographical details) and Mr. MacDougall manages the fixed income
related investments in the portfolio (please refer to page 43 for Bob's
biographical details).
Q. How did the GE Strategic Investment Fund's industry benchmarks and Lipper
peers perform for the one-year period ended September 30, 1997?
A. The 333 Balanced funds that comprise our peer group as tracked by Lipper
Analytical Services had an average return of 24.0% for the one-year period
ended September 30, 1997. As for the various asset classes, U.S. stocks, as
measured by the Standard & Poor's 500 Composite Index, returned 40.49%, and
bonds, according to the Lehman Brothers Aggregate Bond Index, posted a
9.74% return for the same period. To see how your class of shares in the GE
Strategic Investment Fund performed compared to the aforementioned
benchmarks, please refer to the following page.
Q. Please elaborate on the fund's performance.
A. The fund's relative underweighting in the United States detracted from our
performance, as U.S. equities continued to post superior investment results
compared to most markets around the globe. While the fund's exposure to
bonds contributed favorably to our investments, it fell short of producing
returns that equalled those recorded by equities. Finally, the fund's
relatively high cash position also took away from the investment results.
We maintained this position due to our concern over current valuations in
the U.S. market and a lingering threat that the Federal Reserve would raise
interest rates to keep inflation under control.
Q. What is the current allocation of assets among U.S. stocks, international
stocks, bonds and cash and explain the reasons behind your asset allocation
strategy?
A. At the end of the period, U.S. stocks comprised 41% of the total fund,
international stocks 19%, bonds 30%, and cash 10%. Early in the period, we
reduced our allocation to U.S. stocks due to our concerns over valuations.
We increased our position in international stocks because of the
attractively priced investment opportunities beyond our borders.
Q. What is your outlook for the fund?
A. Looking ahead, we remain somewhat cautious on the stock market. The pickup
in economic activity may lead to higher interest rates, but we are likely
to view any significant upturn in interest rates as a long-term buying
opportunity. Should the stock market correct in any meaningful way in the
months ahead, we intend to employ some of our cash reserves to purchase
select, high-quality investments that meet our strict criteria for
investment. As always, we will continue to manage the fund to minimize the
impact of market volatility while seeking the fund's long-term growth
objective.
29
<PAGE>
GESTRATEGIC INVESTMENT FUND
================================================================================
TOP TEN LARGEST HOLDINGS
AT SEPTEMBER 30, 1997
================================================================================
GNMA Pool 8.50% 10/15/17 1.52%
- --------------------------------------------------------------------------------
U.S. Treasury Bonds 10.63% 8/15/15 1.51%
- --------------------------------------------------------------------------------
Schlumberger Ltd. 1.50%
- --------------------------------------------------------------------------------
First Data Corp. 1.43%
- --------------------------------------------------------------------------------
U.S. Treasury Bonds 6.63% 2/15/27 1.42%
- --------------------------------------------------------------------------------
Travelers Group Inc. 1.35%
- --------------------------------------------------------------------------------
U.S. Treasury Notes 5.88% 7/31/99 1.30%
- --------------------------------------------------------------------------------
U.S. Treasury Bonds 13.75% 8/15/04 1.29%
- --------------------------------------------------------------------------------
Dover Corp. 1.26%
- --------------------------------------------------------------------------------
U.S. Treasury Bonds 12.50% 8/15/14 1.25%
- --------------------------------------------------------------------------------
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 average annual total returns for the periods ended 9/30/97
One Three
Year Year
Number of funds
in category: 333 209
Peer group average
total return: 24.0% 18.5%
Lipper categories
in peer group: Balanced
*See Notes to Performance for explanation of peer categories
See page 58 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
[GRAPHIC]
LINE CHART
AVERAGE ANNUAL
TOTAL RETURN
ONE THREE SINCE
YEAR YEAR INCEPTION
GE Strategic Investment 22.16% 18.48% 14.13%
GE Strategic Investment
w/load 15.14% 16.17% 12.34%
(maximum load-5.75%)
S&P 500 40.49% 29.92% 23.73%
LB Aggregate 9.74% 9.50% 6.57%
- --------------------------------------------------------------------------------
CLASS B SHARES
[GRAPHIC]
LINE CHART
AVERAGE ANNUAL
TOTAL RETURN
ONE THREE SINCE
YEAR YEAR INCEPTION
GE Strategic Investment 21.57% 17.88% 13.57%
GE Strategic Investment w/load 17.57% 17.40% 13.40%
maximum load 4.0% 2.0% 1.0%
S&P 500 40.49% 29.92% 23.73%
LB Aggregate 9.74% 9.50% 6.57%
- --------------------------------------------------------------------------------
CLASS C SHARES
[GRAPHIC]
LINE CHART
AVERAGE ANNUAL
TOTAL RETURN
ONE THREE SINCE
YEAR YEAR INCEPTION
GE Strategic Investment 22.45% 18.73% 13.65%
S&P 500 40.49% 29.92% 20.96%
LB Aggregate 9.74% 9.50% 6.65%
- --------------------------------------------------------------------------------
CLASS D SHARES
[GRAPHIC]
LINE CHART
AVERAGE ANNUAL
TOTAL RETURN
ONE THREE SINCE
YEAR YEAR INCEPTION
GE Strategic Investment 22.76% 19.08% 14.69%
S&P 500 40.49% 29.92% 23.54%
LB Aggregate 9.74% 9.50% 6.57%
30
<PAGE>
SCHEDULE OF INVESTMENTS -- SEPTEMBER 30, 1997
GE STRATEGIC INVESTMENT FUND
[GRAPHIC]
PIE CHART
GE STRATEGIC INVESTMENT FUND
Domestic Equity 40.8%
Foreign Equity 19.1%
Bonds and Notes 29.6%
Cash and Other 10.5%
Number
of Shares Value
- --------------------------------------------------------------------------------
Domestic Equity -- 40.6%
- --------------------------------------------------------------------------------
Basic Materials -- 1.0%
Air Products & Chemicals Inc. 5,000 $ 414,687
Airgas Inc. (Rts.) 18,500 313,344(a)
Morton International Inc. 16,000 568,000
1,296,031
[GRAPHIC] Capital Goods -- 5.1%
Alleghany Corp. Delaware 1,040 263,640
AlliedSignal Inc. 34,000 1,445,000
AMP Inc. 8,000 428,500
Browning-Ferris Industries Inc. 4,000 152,250
Dover Corp. 23,000 1,561,125
Emerson Electric Co. 5,000 288,125
Hubbell Inc. (Class B) 19,500 901,875
Molex Inc. (Class A) 12,000 489,000
Sherwin Williams Co. 5,600 164,850
Tyco International Ltd. 3,800 311,837
Waste Management Inc. 10,000 349,375
6,355,577
[GRAPHIC] Consumer - Cyclical -- 4.8%
Automatic Data Processing Inc. 17,500 875,000
Carnival Corp. (Class A) 8,000 370,000
Catalina Marketing Corp. 4,543 235,668(a)
Circus Circus Enterprises Inc. 8,000 201,500(a)
Comcast Corp. (Class A) 18,000 463,500
CUC International Inc. 9,500 294,500(a)
Disney (Walt) Co. 10,000 806,250
Gannett Inc. 3,800 410,162
Harman International
Industries Inc. 6,500 325,406
Interpublic Group Cos. Inc. 10,500 538,781
McDonalds Corp. 6,500 309,563
Stanley Works 5,500 236,500
Tele-Communications Inc. 7,276 150,068(a)
Tele-Communications Inc. (Series A) 12,724 260,842(a)
Tele-Communications Inc. Liberty
Media Group (Series A) 11,000 329,312(a)
Number
of Shares Value
- --------------------------------------------------------------------------------
Time Warner Inc. 3,800 $ 205,913
6,012,965
Consumer - Stable -- 3.3%
Anheuser Busch Cos. Inc. 7,600 342,950
Avon Products Inc. 6,400 396,800
Coca Cola Co. 1,500 91,406
Colgate Palmolive Co. 2,400 167,250
Gillette Co. 3,200 276,200
Kimberly Clark Corp. 20,500 1,003,219
Pepsico Inc. 19,000 770,688
Philip Morris Cos. Inc. 20,000 831,250
Procter & Gamble Co. 2,400 165,750
4,045,513
[GRAPHIC] Energy -- 2.6%
Amoco Corp. 1,700 163,838
Anadarko Petroleum Co. 4,300 308,794
Atlantic Richfield Co. 4,600 393,012
Baker Hughes Inc. 8,500 371,875
Exxon Corp. 11,000 704,687
Texaco Inc. 9,200 565,225
Union Pacific Resources Group Inc. 7,000 183,313
Unocal Corp. 13,000 562,250
3,252,994
[GRAPHIC] Financial -- 5.5%
American Express Co. 6,000 491,250
Citicorp 9,000 1,205,437
Countrywide Credit Industries 10,000 364,375
Federal National Mortgage Assoc 30,500 1,433,500
Morgan Stanley, Dean Witter,
Discover & Co. 3,200 173,000
State Street Corp. 12,500 761,719
Travelers Group Inc. 24,500 1,672,125
Wells Fargo & Co. 2,700 742,500
6,843,906
[GRAPHIC] Healthcare -- 7.3%
Abbott Laboratories 19,500 1,246,781
American Home Products Corp. 5,500 401,500
Bristol-Myers Squibb Co. 13,000 1,075,750
Cardinal Health Inc. 12,000 852,000
Dentsply International Inc. 6,000 336,000
Eli Lilly & Co. 4,500 541,969
Johnson & Johnson 22,000 1,267,750
Lincare Holdings Inc. 7,000 353,063(a)
Merck & Co. Inc. 7,900 789,506
Pfizer Inc. 17,500 1,051,094
Scherer (R.P.) Corp. 6,000 371,625(a)
Sun Healthcare Group Inc. 6,500 133,656(a)
Tenet Healthcare Corp. 6,400 186,400
Watson Pharmaceuticals Inc. 6,500 388,375(a)
8,995,469
Insurance -- 2.7%
American International Group Inc. 6,750 696,516
Chubb Corp. 6,000 426,375
General Reinsurance Corp. 2,500 496,250
Loews Corp. 8,000 903,500
- ----------
See Notes to Schedule of Investments and Financial Statements
31
<PAGE>
GE STRATEGIC INVESTMENT FUND
Number
of Shares Value
- --------------------------------------------------------------------------------
Marsh & McLennan Cos. Inc. 9,000 $ 689,625
UNUM Corp. 2,000 91,250
3,303,516
Miscellaneous -- 0.3%
SPDR Trust 4,000 378,000
Retail Trade -- 1.0%
Arbor Drugs Inc. 12,750 296,438
Home Depot Inc. 7,500 390,937
Toys 'R Us Inc. 15,000 532,500
1,219,875
Technology - Electronics & Equipment -- 1.7%
Applied Materials Inc. 2,500 238,125(a)
Cisco Systems Inc. 4,000 292,250(a)
Hewlett Packard Co. 3,900 271,294
Intel Corp. 14,000 1,292,375
2,094,044
Technology - Software & Services -- 2.8%
Equifax Inc. 38,000 1,194,625
First Data Corp. 47,000 1,765,437
Microsoft Corp. 3,800 502,788(a)
3,462,850
Transportation -- 0.5%
Pittston Brinks Group 5,500 220,344
Union Pacific Corp. N.V 5,700 356,962
577,306
Utilities -- 2.0%
Airtouch Communications Inc. 40,000 1,417,500(a)
Bell Atlantic Corp. - Pennsylvania 1,536 123,552
GTE Corp. 4,000 181,500
NTL Inc. 24,000 633,000(a)
WorldCom Inc. 3,000 106,125(a)
2,461,677
Total Domestic Equity
(Cost $30,096,099) 50,299,723
- --------------------------------------------------------------------------------
Foreign Equity -- 18.8%
- --------------------------------------------------------------------------------
Basic Materials -- 0.7%
Banpu Public Company Ltd. 300 3,074
BASF AG 3,346 120,816
Billiton PLC 48,300 186,921(a)
Fresenius Medical Care AG 747 51,175
Iscor Ltd. 53,464 34,071
SGL Carbon AG 2,044 300,198
Usinor Sacilor 6,152 124,333
820,588
[GRAPHIC] Capital Goods -- 2.5%
ABB AG 262 385,866
Alcatel Alsthom 1,468 195,233
Barlow Ltd. 5,958 68,075
Bombardier Inc. (Class B) 7,450 150,935
Number
of Shares Value
- --------------------------------------------------------------------------------
Grupo Carso S.A. de C.V. ADR 8,314 $ 130,114
Holderbank Financiere Glarus AG 908 5,396
Lyonnaise Des Eaux S.A 1,778 198,400
Mannesmann AG 738 351,677
NEC Corp. 8,000 97,456
PT Mulia Industrindo 105,000 19,947
Schneider S.A 4,038 254,900
Siebe PLC 22,868 459,827
Siemens AG 4,415 298,215
VA Technologie AG 1,465 314,076
Valeo S.A 1,135 74,536
Valmet Corp. 164 2,681
3,087,334
[GRAPHIC] Consumer - Cyclical -- 2.9%
Airtours PLC 20,177 342,923
Autoliv Inc. SDR 7,053 299,317
Canon Inc. 16,000 468,053
Comcast UK Cable Partners
Ltd. (Class A) 10,000 102,500
Cordiant PLC 29,890 57,837
Daimler-Benz AG 2,183 180,130
Electrolux AB (Series B) 1,346 105,196
Granada Group PLC 20,990 295,817
Gucci Group N.V. ADR 748 35,063
Honda Motor Co. 10,000 348,885
Industrie Natuzzi SPA ADR 1,617 38,303
Johnson Electric Holdings 22,800 62,171
Kinnevik AB (Series B) 1,074 23,993
Lai Sun Hotels International Ltd. 4,415 223(a)
LucasVarity PLC 37,809 142,358
Michelin CGDE (Regd.) (Class B) 1,935 109,916
Modern Times MTG Group AB
(Series B) 1,074 8,422(a)
PolyGram N.V 488 28,270
Reed International PLC 24,652 209,490
Renault S.A 6,198 183,768
Sony Corp. 4,900 462,915
Suzuki Motor Corp. 12,000 115,356
Tata Engineering & Locomotive
Co. Ltd. 791 7,317
Television Broadcasts Ltd. 8,000 28,328
3,656,551
Consumer - Stable -- 0.5%
Bass PLC 2,743 36,977
Coca Cola Amatil Ltd. 10,095 108,234
Gruma S.A. de C.V. (Series B) 11,569 54,794
Nestle S.A. (Regd.) 131 182,485
Panamerican Beverages Inc. (Class A) 4,262 166,484
San Miguel Corp. 60,710 97,664
646,638
[GRAPHIC] Energy -- 3.4%
Coflexip S.A. ADR 3,971 223,369
ENI SPA (Regd.) 10,925 68,797
OMV AG 725 108,148
Repsol S.A 5,622 242,928
Royal Dutch Petroleum Co. ADR 18,000 999,000
Saga Petroleum (Series A) 259 5,467
Schlumberger Ltd. 22,000 1,852,125
Total S.A. (Class B) 4,864 556,692
Veba AG 2,609 152,454
4,208,980
- ----------
See Notes to Schedule of Investments and Financial Statements
32
<PAGE>
SCHEDULE OF INVESTMENTS -- SEPTEMBER 30, 1997
Number
of Shares Value
- --------------------------------------------------------------------------------
[GRAPHIC] Financial -- 2.3%
Alpha Credit Bank (Regd.) 1,208 $ 88,691
Banco Comercial Portugues (Regd.) 8,787 185,565
Banco Comercial Portugues ADR 3,339 70,536
Banco Santander S.A. (Regd.) 4,694 153,773
Cheung Kong (Holdings) Ltd. 19,000 213,621
China Resources Development 16,000 66,994
Credito Italiano 69,558 187,823
DBS Land Ltd. 14,000 34,050
Den Danske Bank 2,114 230,285
Grupo Financiero Bancomer
S.A. ADR (Series C) 5,582 75,357(a,b)
HSBC Holdings PLC (Regd.) 12,221 409,051
ING Groep N.V 7,172 329,358
Investor AB (Series B) 672 35,958
Istituto Bancario San
Paolo di Torino 9,606 76,129
Kookmin Bank 1,771 21,322
Kookmin Bank GDR 320 4,080(b)
Lai Sun Development Co. Ltd. 41,000 37,355
Merita Ltd. (Series A) 40,674 192,955
Metro Bank & Trust Co. 4,400 39,217
New World Development Co. Ltd. 12,853 77,736
Sumitomo Realty & Development 10,000 79,142
Sumitomo Sitix Corp. 3,000 57,927
Uniao de Banco Brasileiro S.A. GDR 5,015 183,674
2,850,599
[GRAPHIC] Healthcare -- 1.3%
Gehe AG 2,282 123,208
Medeva PLC 50,684 171,629
Novartis AG (Regd.) 349 535,114
PT Astra International Inc. 139,000 125,691
Roche Holdings AG 17 150,784
Smithkline Beecham PLC ADR 9,000 439,875
Teva Pharmaceutical
Industries Ltd. ADR 2,017 112,448
1,658,749
Insurance -- 0.6%
AXA-UAP 3,559 238,760
Pohjola Insurance Group (Series B) 882 31,506
Sampo Insurance Co. Ltd. 502 54,081
Schw Rueckversicher (Regd.) 981 46,960
Zurich Versicherungsgesellschaft
(Regd.) 594 258,527
729,834
Retail Trade -- 0.6%
Carrefour S.A 399 248,642
Credit Saison Co. Ltd. 12,750 346,565
Giordano International Ltd. 94,000 60,739
Tag Heuer International S.A 608 81,518
737,464
Technology - Electronics & Equipment -- 1.0%
Brambles Industries Ltd. 15,670 327,050
ECI Telecommunications Ltd. 9,423 305,070
Ericson LM Telephone (Series B) 1,082 51,979
Murata Manufacturing Co. Ltd. 3,000 129,775
NetCom Systems AB (Series B) 3,312 50,198(a)
Rohm Co. 3,000 353,029
1,217,101
Number
of Shares Value
- --------------------------------------------------------------------------------
Technology - Software & Services -- 1.5%
Cap Gemini S.A 2,869 $ 186,184
Dimension Data Holdings Ltd. 33,621 140,673
NTT Data Corp. 7 317,312
Reuters Holdings PLC ADR
(Class B) 17,000 1,211,250
1,855,419
Transportation -- 0.6%
Burns, Philp & Co. Ltd. 115,250 85,339
IHC Caland N.V 3,960 249,701
Railtrack Group PLC 28,492 412,480
747,520
Utilities -- 0.9%
BSES Ltd. GDR 1,272 25,758
DDI Corp. 44 220,966
Edison SPA 15,670 84,335
EDP - Electricidade de
Portugal S.A 574 9,857
Korea Electric Power Corp. 1,951 43,285
Telecom Italia Mobile SPA 104,771 415,770
Telecomunicacoes Brasileiras
S.A. ADR 623 80,211
Telefonica del Peru S.A. ADR
(Class B) 8,605 203,293
1,083,475
Total Foreign Equity
(Cost $18,300,329) 23,300,252
Principal
Amount Value
- --------------------------------------------------------------------------------
Bonds and Notes -- 29.6%
- --------------------------------------------------------------------------------
Federal Agencies -- 0.5%
Federal National Mortgage Assoc.
5.82% 08/25/99 $ 225,000 224,543
6.41% 07/08/02 200,000 201,844
6.99% 07/09/07 210,000 211,804
Total Federal Agencies
(Cost $633,161) 638,191
U.S. Treasuries -- 11.8%
U.S. Treasury Bonds
13.75% 08/15/04 1,123,000 1,596,412(h)
12.00% 05/15/05 274,000 370,114(h)
12.50% 08/15/14 1,028,000 1,547,623(h)
10.625% 08/15/15 1,298,000 1,871,145(h)
6.625% 02/15/27 1,720,000 1,761,125(h)
6.375% 08/15/27 464,000 461,967(h)
7,608,386
U.S. Treasury Notes
5.875% 01/31/99 1,369,000 1,371,136(h)
6.00% 06/30/99 1,212,000 1,215,975(h)
5.875% 07/31/99 1,608,000 1,609,254(h)
5.875% 08/31/99 381,000 381,297(h)
7.75% 12/31/99 181,000 188,126(h)
6.00% 08/15/00 345,000 346,132(h)
6.625% 07/31/01 895,000 914,574(h)
6.25% 08/31/02 733,000 739,641(h)
6.625% 05/15/07 185,000 191,070
6.125% 08/15/07 45,000 45,021
7,002,226
Total U.S. Treasuries
(Cost $14,403,471) 14,610,612
- ----------
See Notes to Schedule of Investments and Financial Statements
33
<PAGE>
GE STRATEGIC INVESTMENT FUND
Principal
Amount Value
- --------------------------------------------------------------------------------
Asset Backed -- 0.8%
Advanta Mortgage Loan Trust Corp.
6.30% 07/25/25 $ 21,713 $ 21,340
Carco Auto Loan Master Trust
6.689% 08/15/04 148,000 148,370
First Plus Home Improvement Loan Trust
7.80% 03/20/16 44,000 45,891
First USA Credit Card Trust
5.766% 02/17/05 42,000 42,007
Green Tree Recreational, Equipment &
Consumer Trust
6.49% 02/25/18 70,000 70,284
IMC Home Equity Loan Trust
7.23% 05/20/27 73,000 74,916
Iroquois Trust
6.68% 11/10/03 118,000 118,221
6.75% 06/25/07 141,000 141,265(b)
Provident Bank Home Equity Loan Trust
6.72% 01/25/13 211,493 211,505
Tiers Trust
6.688% 11/17/03 94,000 94,000
Total Asset Backed
(Cost $962,739) 967,799
Corporate Notes -- 7.3%
Abbey National PLC
7.35% 10/29/49 42,000 42,961
AFC Capital Trust
8.207% 02/03/27 100,000 106,966
Aon Capital Trust
8.205% 01/01/27 100,000 107,375
Bancomer S.A.
9.00% 06/01/00 60,000 61,650(b)
Bangkok Bank PLC
7.25% 09/15/05 25,000 22,995(b)
Bank Austria AG
7.25% 02/15/17 250,000 253,182
Bell Telephone Co. - Canada
9.50% 10/15/10 55,000 67,912
BT Preferred Capital Trust
7.875% 02/25/27 120,000 119,435
Carter Holt Harvey Ltd.
8.875% 12/01/04 200,000 223,838
China International Trust
& Investment Corp.
9.00% 10/15/06 35,000 38,773
Circus Circus Enterprises Inc.
6.70% 11/15/96 70,000 69,051
Cleveland Electric Co. - Toledo Edison
7.19% 07/01/00 30,000 30,353(b)
Conseco Inc.
8.70% 11/15/26 90,000 95,935
Continental Cablevision Inc.
8.50% 09/15/01 70,000 74,704
8.30% 05/15/06 40,000 43,342
CSX Corp.
7.05% 05/01/02 85,000 86,275
DDR Pass-Through Asset Trust
7.125% 03/15/02 330,000 333,894(b)
Deutsche Bank Financial Inc.
6.70% 12/13/06 85,000 84,913
Empresa Nacional De Electricidad
8.125% 02/01/97 65,000 69,724
Farmers Insurance Exchange
8.625% 05/01/24 90,000 95,999(b)
Principal
Amount Value
- --------------------------------------------------------------------------------
FBOP Capital Trust
10.20% 02/06/27 $ 85,000 $ 93,642(b)
Federated Department Stores Inc.
10.00% 02/15/01 145,000 160,480
First Security Capital
8.41% 12/15/26 41,000 43,362
Ford Motor Credit Corp.
7.32% 05/23/02 187,000 189,337
Freeport Term Malta Ltd.
7.50% 03/29/09 55,000 57,037(b)
Fujian International Trust &
Investment Corp.
7.375% 08/25/07 100,000 98,355(b)
Guangdong International Trust &
Investment Corp.
8.875% 05/22/07 100,000 102,659(b)
8.75% 10/24/16 100,000 106,485(b)
Hutchinson Whampoa Finance Ltd.
7.50% 08/01/27 100,000 98,475(b)
Hydro-Quebec
8.05% 07/07/24 95,000 106,421
8.25% 04/15/26 50,000 55,377
Ikon Capital Resource Inc.
6.27% 07/19/99 150,000 150,408
Ikon Office Solutions Inc.
6.75% 12/01/25 200,000 187,140
Industrial Finance Corp.
7.00% 08/04/07 141,000 139,972(b)
Integon Capital
10.75% 02/15/27 90,000 112,476
Israel Electric Corp. Ltd.
8.10% 12/15/96 25,000 26,158(b)
Korea Development Bank
7.125% 09/17/01 170,000 170,904
7.375% 09/17/04 100,000 100,636
Korea Electric Power Corp.
7.75% 04/01/13 48,000 48,019
Landeskreditbank Baden
7.875% 04/15/04 40,000 43,166
Lehman Brothers Holdings Inc.
6.90% 03/30/01 115,000 116,852
Loewen Group International Inc.
6.70% 10/01/99 500,000 498,995(b)
7.50% 04/15/01 180,000 183,843
Long Island Lighting
7.30% 07/15/99 80,000 81,050
Meditrust Exercisable Put
7.114% 08/15/04 100,000 100,600
MIC Financing Trust
8.375% 02/01/27 130,000 133,574(b)
Morgan Stanley Finance PLC
8.03% 02/28/17 40,000 41,400
National Westminster Bank PLC
7.75% 04/29/49 35,000 36,783
New York State Dormitory
Authority Revenue
6.32% 04/01/99 90,000 90,239
News America Holdings Inc.
8.15% 10/17/36 210,000 215,137
Norfolk Southern Corp.
7.90% 05/15/97 138,000 148,798
North Atlantic Energy Corp.
9.05% 06/01/02 82,000 82,932
NRG Energy Inc.
7.50% 06/15/07 160,000 164,306(b)
NWCG Holding Corp.
6.44% 06/15/99 120,000 107,795(d)
- ----------
See Notes to Schedule of Investments and Financial Statements
34
<PAGE>
SCHEDULE OF INVESTMENTS -- SEPTEMBER 30, 1997
Principal
Amount Value
- --------------------------------------------------------------------------------
Ontario Province of Canada
6.125% 06/28/00 $ 250,000 $ 250,635
Oryx Energy Co.
10.00% 06/15/99 100,000 104,971
9.50% 11/01/99 75,000 78,872
Paramount Communications Inc.
5.875% 07/15/00 150,000 146,870
Petroleos Mexicanos
7.75% 10/29/99 50,000 50,813(b)
Philip Morris Cos. Inc.
7.20% 02/01/07 30,000 30,253
Raytheon Co.
7.20% 08/15/27 230,000 229,568
Reliance Industries Ltd.
10.50% 08/06/46 30,000 34,994(b)
10.25% 01/15/97 33,000 36,609(b)
Republic New York Corp.
7.20% 07/15/97 75,000 74,166
Republic of Columbia
7.25% 02/15/03 35,000 34,897
Republic of Panama
7.875% 02/13/02 50,000 50,125(b)
Republic of Philippines
8.60% 06/15/27 20,000 19,003
Riggs Capital Trust
8.625% 12/31/26 40,000 41,070(b)
RJR Nabisco Inc.
8.00% 07/15/01 125,000 127,950
St. George Funding Co.
8.485% 12/31/49 100,000 105,234(b)
Sun Life Canada Capital Trust
8.526% 05/29/49 95,000 100,287(b)
Taubman Realty Group L.P.
8.00% 06/15/99 80,000 82,006
TCI Communications Inc.
8.65% 09/15/04 85,000 91,999
6.69% 03/31/06 100,000 99,699
Tele-Communications Inc.
6.469% 12/20/00 71,000 71,710
Tenet Healthcare Corp.
8.00% 01/15/05 70,000 71,400
Time Warner Inc.
4.90% 07/29/99 100,000 97,461(b)
6.10% 12/30/01 180,000 175,624(b)
Total Access Communication PLC
7.625% 11/04/01 185,000 179,912(b)
Triton Energy Ltd.
8.75% 04/15/02 67,000 69,527
Washington Mutual Capital
8.375% 06/01/27 65,000 67,925
Waterford Funding Corp.
8.09% 01/02/17 200,000 206,002
WorldCom Inc.
7.55% 04/01/04 65,000 67,408
Yale University Notes
7.375% 04/15/96 65,000 68,108
Total Corporate Notes
(Cost $8,796,251) 8,987,188
Principal
Amount Value
- --------------------------------------------------------------------------------
Mortgage-Backed -- 9.2%
Federal Home Loan Mortgage Corp.
9.00% 04/01/16 $ 46,806 $ 50,071
9.00% 07/01/16 95,054 101,678
9.00% 02/01/17 190,302 203,547
9.00% 06/01/21 80,491 86,804(h)
9.00% 12/01/24 382,203 408,001
9.00% 03/01/25 1,114,565 1,187,936
9.00% 04/01/25 853,777 909,981
9.00% 07/01/25 77,580 82,687
8.00% 10/01/25 284,160 293,926
9.00% 10/01/25 409,333 436,280
9.00% 12/01/25 86,592 92,292
8.00% 01/01/26 220,430 227,867
8.00% 02/01/26 84,445 87,294
4,168,364
Federal National Mortgage Assoc.
6.50% 01/01/04 13,165 13,146
8.50% 04/01/17 25,089 26,448(h)
9.00% 10/01/24 106,091 113,296
8.50% 12/01/24 228,039 239,334
7.50% TBA 10 10(c)
392,234
Government National Mortgage Assoc.
8.50% 10/15/17 1,767,284 1,878,269
8.00% 01/15/23 33,710 34,984
8.00% 09/15/23 277,593 288,089
8.00% 11/15/23 65,685 68,230
8.00% 12/15/23 128,674 133,539
6.50% 02/15/24 476,509 467,575(b)
6.50% 03/15/24 567,941 557,292
3,427,978
Collateralized Mortgage Obligations
Amresco Commercial Mortgage Funding Corp.
6.73% 06/17/29 90,030 90,734
Asset Securitization Corp.
7.41% 01/27/27 120,000 126,356
BHN Mortgage Trust
7.916% 02/15/12 37,903 38,614
Collateralized Mortgage Obligation Trust
5.42% 09/01/15 34,136 29,623(d,f)
5.76% 11/01/18 38,486 27,085(d,f)
Community Program Loan Trust
4.50% 10/01/18 163,113 143,973
CS First Boston Mortgage Securities Corp.
6.425% 08/20/30 45,794 45,866
DLJ Mortgage Acceptance Corp.
6.55% 11/15/06 124,000 124,078
6.65% 12/17/27 31,354 31,540
Federal Home Loan Mortgage Corp.
8.00% 04/15/20 29,824 30,826
5.36% 04/01/27 71,110 47,710(d,f)
Federal National Mortgage Assoc.
7.148% 10/17/09 81,000 83,202
6.965% 07/25/10 40,000 40,712
8.50% 03/01/17 22,379 6,182(g)
8.50% 04/01/17 44,430 12,274(g)
8.50% 01/01/18 7,601 2,100(g)
7.00% 06/18/20 182,122 183,687
7.41% 03/25/21 95,000 99,023
9.00% 05/25/22 81,954 23,767(g)
8.50% 07/25/22 106,248 29,213(g)
7.50% 05/01/23 388,445 117,019(g)
5.48% 07/01/26 14,076 10,183(d)
5.51% 04/01/27 70,037 50,580(d,f)
Federal National Mortgage Assoc. REMIC
7.623% 12/17/04 100,378 104,957
6.856% 06/17/11 61,000 62,030
- ----------
See Notes to Schedule of Investments and Financial Statements
35
<PAGE>
GE STRATEGIC INVESTMENT FUND
Principal
Amount Value
- --------------------------------------------------------------------------------
6.909% 06/25/16 $ 84,000 $ 85,050
6.79% 07/25/20 101,000 91,910(d,f)
5.97% 12/25/22 80,873 63,283(d,f)
8.86% 09/25/23 195,000 130,650(d,f)
GS Mortgage Securities Corp.
6.86% 07/13/30 117,000 118,828
Mid State Trust
7.54% 07/01/25 31,489 32,389
Morgan Stanley Capital Inc.
6.476% 10/15/10 137,938 139,188(b)
6.86% 07/15/29 135,771 137,256
Residential Assets Securitization Trust
7.75% 04/25/27 164,600 168,561
7.75% 06/25/27 86,770 89,698
7.50% 08/25/27 140,200 145,063
Sawgrass Finance REMIC Trust
6.45% 01/20/06 60,000 60,262
Structured Asset Securities Corp.
5.65% 09/25/99 72,000 72,000(b)
8.495% 04/25/27 128,261 132,911
3.97% 02/25/28 960,298 50,115(d,g)
Vornado Finance Corp.
6.36% 12/01/00 355,000 354,779(b)
3,433,277
Total Mortgage-Backed
(Cost $11,265,612) 11,421,853
Total Bonds and Notes
(Cost $36,061,234) 36,625,643
Number
of Shares Value
- --------------------------------------------------------------------------------
Preferred Stock -- 0.5%
- --------------------------------------------------------------------------------
Domestic Preferred -- 0.2%
AirTouch Communications Inc.
(Class B), 6.00% 3,000 97,687(a)
New Plan Realty Trust, 7.80% 2,115 109,257
Simon DeBartolo Group Inc.
(Series C), 7.89% 1,455 73,642
280,586
International Preferred -- 0.3%
Banco Comercial Portugues 298 22,350
Fresenius Medical Care AG 1,114 62,101
Telecomunicacoes de Sao Paulo S.A. 824,273 251,303
Telecomunicacoes de Sao Paulo S.A. 30,536 9,310(a)
345,064
Total Preferred Stock
(Cost $593,147) 625,650
Total Investments in Securities
(Cost $85,050,810) 110,851,268
Number
of Shares Value
- --------------------------------------------------------------------------------
Short-Term Investments -- 10.6%
- --------------------------------------------------------------------------------
GEI Short Term Investment Fund 25,000 $ 25,000
Principal
Amount Value
- --------------------------------------------------------------------------------
U.S. Government Agency -- 10.6%
Federal National Mortgage Assoc.
6.05% 10/01/97 $13,130,000 $ 13,130,000
Total Short-Term Investments
(Cost $13,155,000) 13,155,000
Number
Expiration Date/ of
Strike Price Contracts Value
- --------------------------------------------------------------------------------
Call Options Written -- 0.0%
- --------------------------------------------------------------------------------
U.S. Treasury Bonds Oct. 97/101.2 115,000 (54)
(Premium $(467))
- --------------------------------------------------------------------------------
Put Options Written -- 0.0%
- --------------------------------------------------------------------------------
U.S. Treasury Bonds Oct. 97/95.25 288,000 (22)
(Premium $(1,350))
Other Assets and Liabilities,
net (0.1%) (150,363)
- --------------------------------------------------------------------------------
NET ASSETS -- 100% $123,855,829
================================================================================
[GRAPHIC] ICONS REPRESENT THE TOP FIVE COMBINED INDUSTRY WEIGHTINGS FOR THE
DOMESTIC AND FOREIGN EQUITIES IN THE GE STRATEGIC INVESTMENT FUND
AS OF SEPTEMBER 30, 1997.
- ----------
See Notes to Schedule of Investments and Financial Statements
36
<PAGE>
GE TAX-EXEMPT FUND
Q&A
Barbara A. Brinkley, a Manager of Brown Brothers Harriman and Co. and a member
of its U.S. Bond Policy Group and its Fixed Income Credit Committee, is the
Portfolio Manager of the Tax-Exempt Fund. Ms. Brinkley has been employed by
Brown Brothers since 1976. Throughout her career with Brown Brothers, and during
her previous four years with American Re-Insurance Company, Ms. Brinkley has
specialized as a municipal bond credit analyst, trader and portfolio manager.
Ms. Brinkley is a member and former chairman of the Municipal Analysts Group of
New York, and is a member of the Fixed Income Analysts Society, Inc. Ms.
Brinkley holds a B.A. degree from Smith College.
Prior to the merger between the GE Funds and the Investors Trust Funds, the GE
Tax-Exempt Fund was managed by Ms. Stella V. Lou of GE
[PHOTO]
Barbara A. Brinkley
Investments. The performance discussed in this Q&A section and presented on the
following page is from the IT Tax Free Fund.
Q. How did the GE Tax-Exempt Fund's industry benchmark and Lipper peers
perform for the eleven month period ended September 30, 1997?
A. The Lehman 10-Year General Obligation Municipal Bond Index returned 8.31%
for the eleven month period ended September 30, 1997. Our Lipper peer group
of 321 Intermediate Municipal Debt funds posted an average return of 6.1%
for the same period. To see how your class of shares in the GE Tax-Exempt
Fund performed compared to its benchmarks, please refer to the following
page.
Q. What drove the fund's performance?
A. The fund's emphasis on intermediate-term bonds, which offered investors the
greatest value relative to taxable yields during this period, bolstered the
investment results. Additionally, the decision to maintain a slightly lower
duration during periods of market uncertainty contributed favorably to the
performance. The decline in bond prices during periods of rising interest
rates, most notably March and August, detracted from the investment
results.
Q. What is your investment strategy?
A. The fund seeks to produce as high a level of income exempt from federal
income tax consistent with preservation of capital. The fund aims to
generate greater tax-free income than tax-free money market funds with less
price fluctuation than longer term funds. The fund's average coupon exceeds
7%. Average credit quality of the fund's holdings is AA+. More than half of
the portfolio is fully backed by U.S. Government securities held in escrow
by the bond trustee. These securities are especially attractive because
they are immune from any credit problems in their ability or in the
willingness to pay off the original issuer. Additionally, we prefer
call-protected premium coupons for their higher tax-free yields to maturity
and for their more defensive characteristics. The fund holds no
derivatives, Rule 144A bonds or bonds subject to Alternative Minimum Tax.
Q. How did you position the fund in light of specific events that took place
during the period?
A. In December 1996, following Federal Reserve chairman Alan Greenspan's now
famous "irrational exuberance" speech concerning the height of the stock
market, the fund turned neutral on the market. In March, following the
Federal Reserve's decision to raise short-term interest rates, the first
such move in approximately two years, the fund's average duration was
shortened.
Q. What is your outlook for the fund and how have you positioned it going
forward?
A. While we expect inflation to remain under control, we would not be
surprised to see the Federal Reserve raise short-term interest rates by 25
or 50 basis points in a preemptive strike against inflation in the coming
months. The economy has been showing strength for some time, and, under
current conditions, that trend seems likely to continue somewhat further.
Given this forecast, we anticipate some increase in inflationary pressure
and somewhat higher interest rates. Accordingly, our present stance is
somewhat cautious. At the same time, however, longer term trends (such as
the declining budget deficit and high real interest rates) are supportive
for bonds over the longer term. We expect to take advantage of higher
interest rates to extend the fund's average duration and increase its
current yield to shareholders.
37
<PAGE>
GE TAX-EXEMPT FUND
================================================================================
QUALITY RATINGS
AT SEPTEMBER 30, 1997
================================================================================
Percent of
Moody's Ratings++ Market Value
- --------------------------------------------------------------------------------
Aaa 77.8%
Aa 18.5%
A 3.2%
Baa 0.5%
- --------------------------------------------------------------------------------
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 tax-exempt debt obligations.
* LIPPER PERFORMANCE COMPARISON
Intermediate Municipal Debt Peer Group Based on
average annual total returns for the periods ended 9/30/97
11 One Three
Months + Year Year
Number of funds
in peer group: 321 317 259
Peer group
average
total return: 6.1% 7.1% 6.8%
Lipper categories
in peer group: Intermediate Municipal Debt,
including single state funds
*See Notes to Performance for explanation of peer categories
See page 58 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
[GRAPHIC]
LINE CHART
AVERAGE ANNUAL
TOTAL RETURN
11 ONE THREE SINCE
MONTHS + YEAR YEAR INCEPTION
GE Tax-Exempt 6.77% 7.78% 7.86% 5.44%
GE Tax-Exempt w/load 2.23% 3.20% 6.31% 4.32%
(maximum load-4.25%)
LB 10 yr. GO Muni Bond 8.31% 9.69% 8.74% 5.92%
- --------------------------------------------------------------------------------
CLASS B SHARES
[GRAPHIC]
LINE CHART
AVERAGE ANNUAL
TOTAL RETURN
11 ONE THREE SINCE
MONTHS + YEAR YEAR INCEPTION
GE Tax-Exempt 6.46% 7.47% 7.79% 5.23%
GE Tax-Exempt w/load 3.46% 4.47% 7.21% 5.23%
maximum load 3.0% 3.0% 2.0% 0.0%
LB 10 yr. GO Muni Bond 8.31% 9.69% 8.74% 5.92%
- --------------------------------------------------------------------------------
CLASS C SHARES
[GRAPHIC]
LINE CHART
AGGREGATE
TOTAL RETURN
SINCE
INCEPTION
GE Tax-Exempt 0.11%
LB 10 yr. GO Muni Bond N/A**
- --------------------------------------------------------------------------------
CLASS D SHARES
[GRAPHIC]
LINE CHART
AGGREGATE
TOTAL RETURN
SINCE
INCEPTION
GE Tax-Exempt 0.11%
LB 10 yr. GO Muni Bond N/A**
+ As a result of the merger between the Investor's Trust Funds and the GE
Funds, the fiscal year end of the Tax-Exempt Fund was changed from October
31st to September 30th. The 11 month period indicated represents November
1, 1996 through September 30, 1997.
** Broad market index information for Since Inception time period is not
available for Classes C and D.
38
<PAGE>
SCHEDULE OF INVESTMENTS -- SEPTEMBER 30, 1997
GE TAX-EXEMPT FUND
[GRAPHIC]
PIE CHART
GE TAX EXEMPT FUND
General Obligation 23.2%
Cash and Other 2.9%
Utility 22.2%
Hospital 13.5%
Housing 14.1%
Water & Sewer 10.5%
Sales Tax 4.9%
Transportation 4.5%
Education 4.3%
Principal
Amount Value
- --------------------------------------------------------------------------------
Municipal Bonds -- 97.1%
- --------------------------------------------------------------------------------
Alabama -- 0.2%
North Birmingham Alabama Medical
Clinic Rev. - Health
6.625% 04/01/00 $ 75,000 $ 79,589(i)
Alaska -- 0.1%
North Slope Borough Alaska G.O.
10.00% 06/30/01 30,000 35,900(i,k)
Arizona -- 3.3%
Maricopa County Arizona Community
College District G.O.
5.00% 07/01/13 500,000 499,420(k)
Maricopa County Arizona Elementary
School G.O.
6.30% 07/01/07 500,000 568,680(k)
Maricopa County Arizona G.O.
6.25% 07/01/02 175,000 190,062(k)
1,258,162
Arkansas -- 2.2%
Arkansas Housing Development Agency
Rev. - Housing
8.375% 07/01/10 270,000 338,480(i)
8.375% 07/01/11 280,000 373,369(i)
Pulaski County Arkansas Hospital
Rev. - Health
9.25% 03/01/10 105,000 136,721(i)
848,570
California -- 3.5%
California State G.O.
8.75% 05/01/04 110,000 137,253
Sacramento California Utility Rev. -
Electric Utility
9.00% 04/01/13 620,000 841,166(i)
Principal
Amount Value
- --------------------------------------------------------------------------------
San Diego California Hospital
Rev. - Health
8.875% 02/01/11 $270,000 $ 348,659(i)
1,327,078
Colorado -- 2.4%
Colorado Springs Colorado Utility
Rev. - Electric Utility
8.50% 11/15/11 100,000 129,849(i)
Denver Colorado City & County,
Housing Finance Authority - Housing
7.00% 08/01/10 500,000 579,245(i)
Loveland Rev. - Water & Sewer
8.875% 11/01/05 165,000 205,047(i)
914,141
[GRAPHIC] Connecticut -- 4.7%
Connecticut State Health & Educational
Fac. Auth. Rev. - Health
5.50% 07/01/12 500,000 515,100(k)
7.00% 07/01/12 725,000 841,131(i)
Connecticut State Housing Finance Auth.
Rev. - Housing
6.05% 05/15/14 410,000 425,096
1,781,327
Delaware -- 1.9%
Delaware State G.O.
5.00% 05/01/13 500,000 498,905
Delaware Transportation Auth.
Rev. - Trans.
6.10% 07/01/02 110,000 118,421
Georgetown Delaware G.O.
6.80% 06/01/01 100,000 108,873(j, k)
726,199
[GRAPHIC] Florida -- 4.6%
Broward County Florida G.O.
6.20% 01/01/07 25,000 27,000
Dade County Florida Health Facility
Rev. - Health VRDN
6.40% 05/01/01 100,000 107,438(i, k)
Dade County Florida Health Facility
Rev. - Health
3.45% 09/01/20 200,000 200,000
Florida State Broward County
Expressway G.O.
6.50% 07/01/03 675,000 683,235
Florida State Broward County G.O.
10.00% 07/01/14 235,000 356,255
Gainesville Florida Utilities Systems
Rev. - Electric Utility
8.125% 10/01/14 175,000 224,546(i)
Jacksonville Florida Electric Auth.
Rev. - Electric Utility
6.50% 10/01/03 135,000 149,326
1,747,800
Georgia -- 1.6%
Clarke County Georgia Hospital Auth.
Rev. - Health
9.875% 01/01/06 80,000 104,807(i, k)
- ----------
See Notes to Schedule of Investments and Financial Statements
39
<PAGE>
GE TAX-EXEMPT FUND
Principal
Amount Value
- --------------------------------------------------------------------------------
Columbus Georgia Medical Center
Hospital Auth. Rev. - Health
7.75% 07/01/10 $305,000 $ 372,957(i)
Gwinnett County Georgia Water & Sewer
Auth. Rev. - Water & Sewer
9.60% 10/01/04 115,000 145,031(i)
622,795
Hawaii -- 0.6%
Honolulu Hawaii G.O.
7.25% 07/01/02 200,000 224,624
Idaho -- 2.1%
Idaho Falls Idaho Electric
Rev. - Electric Utility
10.375% 04/01/07 560,000 804,278(j)
Illinois -- 2.1%
Chicago Illinois G.O.
6.00% 01/01/08 500,000 551,075(k)
Chicago Illinois Motor Fuel Tax
Rev. - Sales Tax
6.50% 01/01/01 20,000 21,412(j, k)
Chicago Illinois Wastewater Treatment
Rev. - Water & Sewer
6.30% 07/01/03 20,000 22,166(j, k)
Des Plaines Illinois Hospital Facility
Rev. - Health
10.75% 07/01/02 115,000 146,308(j)
Waukegan Illinois Water & Sewer
Rev. - Water & Sewer
7.50% 05/01/06 50,000 59,892(i)
800,853
Indiana -- 0.9%
Indiana University Rev. - Education
10.125% 07/01/01 35,000 42,066(j)
6.00% 11/15/14 290,000 306,765
348,831
Iowa -- 3.1%
Muscatine Iowa Electric
Rev. - Electric Utility
9.70% 01/01/13 815,000 1,156,795(i)
Kansas -- 1.3%
Wichita Kansas G.O.
5.50% 12/01/98 500,000 509,485
Louisiana -- 1.8%
Jefferson Parish Louisiana Hospital
Rev. - Health
7.25% 01/01/09 600,000 693,066(i)
Maine -- 0.5%
Maine Municipal Bond Bank G.O.
7.10% 11/01/99 10,000 10,779(j)
7.20% 11/01/00 65,000 71,899(j)
Maine Municipal Bond Bank Sewer &
Water Rev. - Water & Sewer
7.20% 11/01/01 100,000 112,698(j)
195,376
Principal
Amount Value
- --------------------------------------------------------------------------------
Massachusetts -- 4.0%
Massachusetts Bay Transportation Auth.
Rev. - Trans.
7.25% 03/01/03 $100,000 $ 108,775(k)
Massachusetts State G.O.
6.75% 08/01/09 250,000 274,370(k)
Massachusetts State Port Auth.
Rev. - Trans
13.00% 07/01/13 500,000 852,830(i)
Massachusetts State Water & Sewer Rev. -
Water & Sewer
6.00% 11/01/06 250,000 267,783
1,503,758
[GRAPHIC] Michigan -- 4.9%
Michigan State Hospital Finance Auth.
Rev. - Health
9.00% 05/01/08 595,000 778,445(i)
7.125% 05/01/09 475,000 550,202(i)
Michigan State Underground Storage
Tank Rev. - Sales Tax
6.00% 05/01/04 500,000 544,395(k)
1,873,042
Minnesota -- 0.9%
Rochester Minnesota Health Care
Facilities Rev. - Health
6.25% 11/15/14 300,000 321,972
Mississipi -- 0.9%
Mississippi State G.O.
6.20% 02/01/08 300,000 335,859(i)
Missouri -- 1.4%
Lees Summit Missouri Water &
Sewer Rev. - Water & Sewer
10.00% 07/01/00 20,000 23,009(j, k)
St. Louis County Missouri G.O.
5.125% 02/01/11 505,000 511,509
534,518
Nebraska -- 0.4%
Lancaster County Nebraska
School District G.O.
5.00% 07/15/09 150,000 151,737
New Hampshire -- 1.4%
New Hampshire Municipal Bond Bank
Rev. - Sales Tax
6.80% 01/15/00 25,000 26,930(j)
New Hampshire State Housing Finance
Auth. Rev. - Housing
5.85% 07/01/17 500,000 511,040
537,970
New Jersey -- 4.4%
Atlantic County New Jersey Improvement
Auth. Rev. - Trans.
7.40% 03/01/12 225,000 273,690(i,k)
New Jersey Building Auth. Rev. -
Lease Rev.
5.00% 06/15/12 500,000 499,445
- ----------
See Notes to Schedule of Investments and Financial Statements
40
<PAGE>
SCHEDULE OF INVESTMENTS -- SEPTEMBER 30, 1997
Principal
Amount Value
- --------------------------------------------------------------------------------
New Jersey Economic Development Auth.
Rev. - Housing
7.00% 07/01/04 $ 100,000 $ 114,410(k)
New Jersey Tpke. Auth. Rev. - Trans.
6.50% 01/01/16 250,000 290,253(k)
Ocean County New Jersey Utility Auth.
Wastewater Rev. - Water & Sewer
5.00% 01/01/13 500,000 496,800
1,674,598
New Mexico -- 1.8%
Farmington New Mexico Power
Rev. - Electric Utility
9.875% 07/01/05 400,000 535,680(j)
Farmington New Mexico Utility Systems
Rev. - Electric Utility
9.875% 01/01/08 100,000 133,623(i,k)
669,303
[GRAPHIC] New York -- 8.0%
Erie County New York Water Auth.
Rev. - Water & Sewer
6.00% 12/01/08 400,000 435,244(i,k)
New York New York G.O.
7.10% 03/01/01 50,000 55,537(j)
6.25% 04/15/06 500,000 556,225(k)
6.00% 08/01/06 300,000 303,315(i, k)
New York State Dormitory Auth. Rev. -
Education
7.50% 05/15/11 165,000 199,715
7.375% 07/01/16 470,000 582,513(i)
New York State Environmental Facilities
Rev. - Water & Sewer
6.80% 11/15/10 200,000 228,826
New York State Housing Finance Agency
Rev. - Housing
6.40% 11/01/03 175,000 188,710(i)
New York State Local Government
Assistance G.O.
7.25% 04/01/01 350,000 391,342(j)
6.75% 04/01/02 45,000 49,056
6.00% 04/01/05 50,000 53,675
3,044,158
North Carolina -- 3.4%
North Carolina Municipal Power Rev. -
Electric Utility
10.50% 01/01/10 915,000 1,277,450(i)
North Dakota -- 1.5%
Bismarck North Dakota G.O.
5.20% 06/01/11 125,000 125,966
Fargo North Dakota G.O.
5.00% 05/01/12 445,000 443,158
569,124
Ohio -- 3.8%
Columbus Ohio G.O.
6.00% 07/01/08 50,000 53,916
Ohio State Building Authority
Rev. - Lease Rev.
5.50% 04/01/16 500,000 508,780(k)
Principal
Amount Value
- --------------------------------------------------------------------------------
Ohio State Higher Educational
Rev. - Education
6.00% 05/15/09 $ 550,000 $ 610,032(i,k)
Ohio State Water Development Auth.
Rev. - Water & Sewer
7.00% 12/01/09 240,000 280,325(i,k)
1,453,053
[GRAPHIC] Pennsylvania -- 9.1%
Allegheny County Pennsylvania Hospital
Development Rev. - Health
7.375% 07/01/12 150,000 180,994(i)
Lehigh County Pennsylvania G.O.
6.90% 08/01/00 500,000 546,070(j,k)
Pennsylvania Intergovernmental
Co-op. Rev. - Sales Tax
6.80% 06/15/12 50,000 55,351(k)
5.60% 06/15/15 500,000 508,540(k)
Pennsylvania State Turnpike
Commission Rev. - Trans.
7.15% 07/01/01 25,000 28,177(j, k)
Philadelphia Pennsylvania Hospital
Rev. - Health
6.50% 02/15/02 325,000 358,820(j)
9.875% 07/01/05 480,000 644,942(j)
Philadelphia Pennsylvania Regional Port
Auth. Rev. - Lease Rev.
7.15% 08/01/00 30,000 32,428(j, k)
Philadelphia Pennsylvania School
District Rev. - Education
5.00% 04/01/09 500,000 501,875(k)
Pittsburgh Pennsylvania Water & Sewer
Rev. - Water & Sewer
7.25% 09/01/14 485,000 590,075(i)
3,447,272
Puerto Rico -- 1.6%
Puerto Rico Commonwealth Aquaduct &
Sewer Rev. - Water & Sewer
10.25% 07/01/09 420,000 585,421(i)
Rhode Island -- 0.2%
Rhode Island Convention Center Auth.
Rev. - Muni. Bldg.
6.30% 05/15/01 45,000 48,942(j, k)
Rhode Island G.O.
7.10% 08/01/01 35,000 39,176(k)
88,118
South Carolina -- 3.5%
South Carolina State Public Service Auth.
Rev. - Electric Utility
6.50% 07/01/02 195,000 216,746(k)
Spartanburg South Carolina Waterworks
Rev. - Water & Sewer
6.00% 06/01/02 25,000 26,710(j)
6.00% 06/01/05 475,000 507,495
6.10% 06/01/06 500,000 555,540(j, k)
1,306,491
- ----------
See Notes to Schedule of Investments and Financial Statements
41
<PAGE>
GE TAX-EXEMPT FUND
Principal
Amount Value
- --------------------------------------------------------------------------------
Tennessee -- 1.5%
Knoxville Tennessee G.O.
5.125% 05/01/10 $ 465,000 $ 472,551
Metro Government Nashville Tennessee
Electric Rev. - Electric Utility
9.60% 07/01/05 65,000 86,371(i)
558,922
Texas -- 4.3%
Arlington Texas Independent School
District - Education
5.90% 02/15/03 350,000 371,668
Austin Texas Utility Systems Rev. -
Electric Utility
10.75% 05/15/00 30,000 34,870(j)
7.25% 11/15/03 50,000 52,755
Gulf Coast Waste Disposal Auth. Rev. -
Water & Sewer
8.375% 06/01/05 100,000 124,330(i)
Harris County Texas Health Facilities
Dev. Rev. - Health VRDN
3.25% 02/15/27 200,000 200,000(i)
Houston G.O.
6.00% 04/01/04 500,000 544,225
Houston Texas Water Systems
Rev. - Water & Sewer
7.30% 12/01/06 100,000 120,630(i)
Lamar University Texas
Rev. - Education
7.00% 04/01/06 35,000 41,058(i)
San Antonio Texas Water Rev. -
Water & Sewer
7.125% 05/01/99 25,000 26,574(j,k)
Texas A & M University
Rev.- Education
9.40% 06/01/04 40,000 51,327(i)
9.40% 06/01/06 55,000 73,848(i)
1,641,285
Utah -- 0.8%
Intermountain Power Agency Utah -
Electric Utility
7.20% 07/01/99 10,000 10,734(j)
Utah State Municipal Finance Co-op.
Rev. - Sales Tax
7.00% 06/01/01 250,000 275,837(j,k)
286,571
Virginia -- 0.3%
Richmond Virginia Metropolitan
Expressway Auth. Rev. - Trans.
7.00% 10/15/13 115,000 130,251(k)
Principal
Amount Value
- --------------------------------------------------------------------------------
Washington -- 0.5%
Seattle Washington G.O.
6.875% 01/01/00 $ 40,000 $ 43,133(j, k)
Snohomish County Washington Public
Utility Rev. - Electric Utility
6.375% 01/01/05 20,000 21,431(i)
Washington State Public Power Rev. -
Electric Utility
7.20% 07/01/02 100,000 107,489
172,053
West Virginia -- 1.6%
West Virginia Housing Development
Fund Rev. - Housing
5.60% 11/01/11 355,000 363,673
Wood County West Virginia Building
Commission Rev. - Muni. Bldg.
6.625% 01/01/06 215,000 235,868(i,k)
599,541
Total Investments in Securities
(Cost $35,483,088) 36,837,336
Number
of Shares Value
- --------------------------------------------------------------------------------
Short-Term Investments -- 1.1%
- --------------------------------------------------------------------------------
GEI Short Term Investment Fund 2 2
Principal
Amount Value
- --------------------------------------------------------------------------------
Municipal Bonds -- 1.1%
Massachusetts State G.O. VRDN
3.95% 12/01/97 $400,000 400,000
Total Short-Term Investments
(Cost $400,002) 400,002
Other Assets and Liabilities,
net 1.8% 686,140
- --------------------------------------------------------------------------------
NET ASSETS-- 100% $37,923,478
================================================================================
[GRAPHIC] ICONS REPRESENT THE TOP FIVE STATE WEIGHTINGS IN THE GE TAX-EXEMPT
FUND AS OF SEPTEMBER 30, 1997.
- ----------
See Notes to Schedule of Investments and Financial Statements
42
<PAGE>
GE FIXED INCOME FUNDS
Q&A
Bob MacDougall leads the fixed income team at GE Investments. Assets under
management exceed $23 billion. His responsibilities include managing the GE
Fixed Income, GE Short-Term Government, GE Government Securities and GE Money
Market Funds. Bob joined GE Investments in 1986 as a Mutual Fund Portfolio
Manager and was appointed to head the taxable Fixed Income team in 1992, and the
tax-exempt Fixed Income team in 1997. 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.
[PHOTO]
Bob MacDougall
Q. Describe what happened in the fixed income markets over the past twelve
months?
A. Interest rates trended lower and bond prices moved higher in the latter
part of 1996, due largely to weaker-than-expected economic reports. In
March, however, the economy showed enough strength to motivate the Federal
Reserve to raise short-term interest rates in its effort to keep inflation
under control. This marked the first time in more than two years that the
Fed raised interest rates. Bond prices declined in this environment as
interest rates edged higher. From there, the economy grew moderately,
though investors were still concerned that the Fed might raise rates again.
In fact, in July, before the Federal Reserve's Federal Open Market
Committee meeting, economists were generally divided on whether the Fed
would tighten monetary policy. When the Fed announced it would not, bonds
rallied strongly on the news sending interest rates lower. Rates rose again
in August, as investors grew concerned over an increase in wage inflation,
but those fears were short-lived. In September, the bond market rallied
with most economic reports suggesting continued moderate growth and benign
inflation.
GE FIXED INCOME FUND
Q. How did the GE Fixed Income Fund's market benchmark and Lipper peer group
perform for the one-year period ended September 30, 1997?
A. The Lehman Brothers Aggregate Bond Index returned 9.74%, while the average
return for the 136 Intermediate U.S. Government Bond mutual funds tracked
by Lipper was 8.1%. To see how your class of shares in the GE Fixed Income
Fund performed compared to the Lipper benchmarks, please refer to page 45.
Q. What drove the fund's performance?
A. The fund's overweighted positions in corporate bonds and mortgage-backed
securities contributed significantly to performance. For most of the
period, we maintained a duration neutral to the market.
43
<PAGE>
GE FIXED INCOME FUNDS (CONTINUED)
Q&A
GE GOVERNMENT SECURITIES FUND
Prior to the merger between the GE Funds and the Investors Trust Funds, the
GE Government Securities Fund (formerly the IT Government Fund) was
sub-advised by Messrs. Keith Anderson and Andrew Phillips of BlackRock
Financial Management, Inc. In the following Q&A, BlackRock gives a synopsis
of the fund's performance during the past eleven months.
Q. How did the GE Government Securities Fund's market benchmarks and Lipper
peer group perform for the eleven-month period ended September 30, 1997?
A. The Lehman Brothers Government Bond Fund Index returned 6.80%. Our Lipper
peer group of 137 U.S. Government mutual funds averaged a return of 6.1%.
To see how your class of shares in the GE Government Securities Fund
performed compared to the Lipper benchmarks, please refer to page 50.
Q. Messrs. Anderson and Phillips, what drove the fund's performance?
A. For much of last year and the first half of 1997, the fund held an
overweighted position in mortgage-backed securities, which outperformed
Treasuries. In the final three months of the period, the fund increased its
exposure to Treasuries, which outperformed mortgage-backed securities as
interest rates declined in July and September.
GE SHORT-TERM GOVERNMENT FUND
Prior to the merger between the GE Short-Term Government Fund and the
Investors Trust Adjustable Rate Fund, the Adjustable Rate Fund was
sub-advised by Ms. Dolores Driscoll of Standish, Ayer & Wood, Inc. The
performance discussions and presentations are for the GE Short-Term
Government Fund.
Q. How did the GE Short-Term Government Fund's market benchmarks perform for
the one-year period ended September 30, 1997?
A. The Lehman Brothers 1-3 year Government Bond Index returned 6.89%. Our
Lipper peer group of 184 Short-Term U.S. Government mutual funds averaged a
return of 6.6%. To see how your class of shares in the GE Short-Term
Government Fund performed compared to the Lipper benchmarks, please refer
to page 53.
Q. Mr. MacDougall, what drove the fund's performance?
A. The fund was overweighted in Government Securities represented by seasoned
mortgages, which offer a higher yield than U.S. Treasury securities. Later
in the period, the fund owned adjustable-rate mortgages, which also added
to performance. Commercial mortgage-related and asset-backed securities
contributed to the fund's investment results, as well.
GE MONEY MARKET FUND
Q. How did the GE Money Market Fund perform relative to its benchmarks for the
one-year period ended September 30, 1997?
A. The GE Money Market Fund had a total return of 5.14% for the 12-month
period ended September 30, 1997. For the same period, 90-day Treasury Bills
returned 5.17% and the average return of the 298 Money Market funds
reported by Lipper was 4.9%.
Q. To what do you attribute the GE Money Market Fund's performance?
A. Early in the year, we maintained a slightly lower duration than our
benchmark due to our belief that interest rates would trend higher because
of a strengthening economy. In achieving these investment results, we
continued to maintain a high-quality portfolio to ensure our investors
safety and liquidity.
Overall
Q. Mr. MacDougall, what is your outlook for the fixed income markets?
A. More than six years into the current expansion, economic growth continues
to be healthy. Tight labor markets may prompt the Federal Reserve to raise
short-term interest rates to slow down the economy. Longer-term, however,
the outlook for bonds is quite favorable. The Federal budget deficit is
declining, inflation remains under control, and real interest rates remain
attractive.
44
<PAGE>
GE FIXED INCOME FUND
================================================================================
QUALITY RATINGS
AT SEPTEMBER 30, 1997
================================================================================
Percent of
Moody's Ratings+ Market Value
- --------------------------------------------------------------------------------
Aaa 74.5%
Aa 3.4%
A 7.5%
Baa 7.2%
Ba 6.8%
B 0.6
- --------------------------------------------------------------------------------
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 including government and corporate bonds and asset and mortgage
backed securities including CMO's and ARM's.
* LIPPER PERFORMANCE COMPARISON
Intermediate U.S. Government Peer Group
Based on average annual total returns for the periods ended 9/30/97
One Three
Year Year
Number of funds
in category: 136 97
Peer group average
total return: 8.1% 7.7%
Lipper categories in peer group: Intermediate U.S. Government,
Intermediate U.S. Treasury
*See Notes to Performance for explanation of peer categories
See page 58 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
[GRAPHIC]
LINE CHART
AVERAGE ANNUAL
TOTAL RETURN
ONE THREE SINCE
YEAR YEAR INCEPTION
GE Fixed Income 9.19% 8.47% 5.85%
GE Fixed Income w/load 4.55% 6.91% 4.62%
(maximum load-4.25%)
LB Aggregate 9.74% 9.50% 6.57%
- --------------------------------------------------------------------------------
CLASS B SHARES
[GRAPHIC]
LINE CHART
AVERAGE ANNUAL
TOTAL RETURN
ONE THREE SINCE
YEAR YEAR INCEPTION
GE Fixed Income 8.64% 7.95% 5.32%
GE Fixed Income w/load 5.64% 7.38% 5.10%
maximum load 3.0% 2.0% 2.0%
LB Aggregate 9.74% 9.50% 6.57%
- --------------------------------------------------------------------------------
CLASS C SHARES
[GRAPHIC]
LINE CHART
AVERAGE ANNUAL
TOTAL RETURN
ONE THREE SINCE
YEAR YEAR INCEPTION
GE Fixed Income 9.45% 8.73% 6.07%
LB Aggregate 9.74% 9.50% 6.65%
- --------------------------------------------------------------------------------
CLASS D SHARES
[GRAPHIC]
LINE CHART
AVERAGE ANNUAL
TOTAL RETURN
ONE THREE SINCE
YEAR YEAR INCEPTION
GE Fixed Income 9.74% 8.99% 6.30%
LB Aggregate 9.74% 9.50% 6.57%
45
<PAGE>
SCHEDULE OF INVESTMENTS -- SEPTEMBER 30, 1997
GE FIXED INCOME FUND
[GRAPHIC]
PIE CHART
GE FIXED INCOME FUND
U.S. Treasuries 39.7%
Corporate Notes 22.7%
Mortgage-Backed 25.1%
Cash and Other 12.5%
Principal
Amount Value
- --------------------------------------------------------------------------------
Bonds and Notes -- 93.1%
- --------------------------------------------------------------------------------
Federal Agencies -- 1.7%
Federal National Mortgage Assoc.
5.82% 08/25/99 $ 490,000 $ 489,005
6.41% 07/08/02 370,000 373,412
6.99% 07/09/07 365,000 368,135
Total Federal Agencies
(Cost $1,221,368) 1,230,552
U.S. Treasuries -- 39.7%
U.S. Treasury Bonds
13.75% 08/15/04 1,286,000 1,828,126(h)
12.00% 05/15/05 238,000 321,486(h)
12.50% 08/15/14 765,000 1,151,684(h)
10.625% 08/15/15 2,304,000 3,321,354(h)
6.625% 02/15/27 3,481,000 3,564,231(h)
6.375% 08/15/27 888,000 884,111(h)
11,070,992
U.S. Treasury Notes
5.875% 01/31/99 1,977,000 1,980,084(h)
6.00% 06/30/99 534,000 535,752(h)
5.875% 07/31/99 3,210,000 3,212,504(h)
5.875% 08/31/99 2,498,000 2,499,948(h)
7.75% 12/31/99 2,105,000 2,187,874(h)
6.25% 04/30/01 1,007,000 1,015,972
6.625% 07/31/01 1,957,000 1,999,800(h)
6.25% 01/31/02 348,000 351,209(h)
6.25% 08/31/02 2,441,000 2,463,115(h)
6.625% 05/15/07 730,000 753,951
6.125% 08/15/07 230,000 230,108
17,230,317
Total U.S. Treasuries
(Cost $27,961,693) 28,301,309
Asset Backed -- 1.8%
Advanta Mortgage Loan Trust Corp.
6.30% 07/25/25 43,425 42,679
Carco Auto Loan Master Trust
6.689% 08/15/04 260,000 260,650
Fleetwood Credit Grantor Trust
6.40% 05/15/13 135,000 135,464
Principal
Amount Value
- --------------------------------------------------------------------------------
Green Tree Recreational, Equipment
& Consumer Trust
6.49% 02/25/18 $ 130,000 $ 130,528
IMC Home Equity Loan Trust
7.23% 05/20/27 132,000 135,465
Iroquois Trust
6.68% 11/10/03 209,000 209,392
6.75% 06/25/07 248,000 248,465(b)
Tiers Trust
6.688% 11/17/03 167,000 167,000
Total Asset Backed
(Cost $1,323,508) 1,329,643
Corporate Notes -- 22.7%
Abbey National PLC
7.35% 10/29/49 145,000 148,319
AFC Capital Trust
8.207% 02/03/27 165,000 176,494
Aon Capital Trust
8.205% 01/01/27 105,000 112,744
Banco Hipotecario Nacional
8.00% 06/04/99 250,000 250,937
Bancomer S.A.
9.00% 06/01/00 125,000 128,438(b)
Bangkok Bank PLC
7.25% 09/15/05 60,000 55,189(b)
Bank Austria AG
7.25% 02/15/17 250,000 253,182
Bell Telephone Co. - Canada
9.50% 10/15/10 100,000 123,477
Bell Telephone Co. - Pennsylvania
8.35% 12/15/30 75,000 89,624
BT Preferred Capital Trust
7.875% 02/25/27 240,000 238,870
China International Trust & Investment
Corp.
9.00% 10/15/06 100,000 110,781
Circus Circus Enterprises Inc.
6.70% 11/15/96 150,000 147,966
Cleveland Electric Co. - Toledo Edison
7.19% 07/01/00 60,000 60,705(b)
Conseco Inc.
8.70% 11/15/26 160,000 170,550
Continental Cablevision Inc.
8.50% 09/15/01 125,000 133,400
8.30% 05/15/06 210,000 227,543
CSX Corp.
7.05% 05/01/02 55,000 55,825
DDR Pass-Through Asset Trust
7.125% 03/15/02 415,000 419,897(b)
Delta Air Lines Inc.
7.79% 12/01/98 125,000 127,356
Deutsche Bank Financial Inc.
6.70% 12/13/06 655,000 654,332
Empresa Nacional De Electricid
8.125% 02/01/97 100,000 107,267
Farmers Insurance Exchange
8.625% 05/01/24 245,000 261,329(b)
FBOP Capital Trust
10.20% 02/06/27 65,000 71,609(b)
Federated Department Stores Inc.
10.00% 02/15/01 130,000 143,879
Felcor Suites Ltd.
7.375% 10/01/04 100,000 99,750(b)
First Security Capital
8.41% 12/15/26 90,000 95,184
Ford Motor Credit Corp.
7.32% 05/23/02 328,000 332,100
Freeport Term Malta Ltd.
7.50% 03/29/09 150,000 155,554(b)
- ----------
See Notes to Schedule of Investments and Financial Statements
46
<PAGE>
SCHEDULE OF INVESTMENTS -- SEPTEMBER 30, 1997
Principal
Amount Value
- --------------------------------------------------------------------------------
Fujian International Trust &
Investment Corp.
7.375% 08/25/07 $ 100,000 $ 98,355(b)
Guangdong International Trust &
Investment Corp.
8.875% 05/22/07 105,000 107,792(b)
8.75% 10/24/16 125,000 133,106(b)
Hutchinson Whampoa Finance Ltd.
7.50% 08/01/27 365,000 359,434(b)
Hydro-Quebec
8.05% 07/07/24 60,000 67,213
8.25% 04/15/26 360,000 398,718
Ikon Capital Resource Inc.
6.27% 07/19/99 300,000 300,816
Ikon Office Solutions Inc.
6.75% 12/01/25 100,000 93,570
Industrial Finance Corp.
7.00% 08/04/07 248,000 246,192(b)
Integon Capital
10.75% 02/15/27 170,000 212,454
Israel Electric Corp. Ltd.
8.10% 12/15/96 240,000 251,112(b)
Korea Development Bank
7.125% 09/17/01 200,000 201,064
7.375% 09/17/04 180,000 181,145
Korea Electric Power Corp.
7.75% 04/01/13 164,000 164,066
Landeskreditbank Baden
7.875% 04/15/04 160,000 172,666
Lehman Brothers Holdings Inc.
6.90% 03/30/01 155,000 157,495
Liberty Mutual Insurance Co.
8.20% 05/04/07 125,000 136,330(b)
Loewen Group International Inc.
6.70% 10/01/99 960,000 957,967(b)
7.50% 04/15/01 285,000 291,085
Long Island Lighting
7.30% 07/15/99 130,000 131,707
Meditrust Exercisable Put
7.114% 08/15/04 130,000 130,780
Merita Bank Ltd.
7.15% 12/29/49 145,000 146,414(b)
MIC Financing Trust
8.375% 02/01/27 160,000 164,398(b)
Morgan Stanley Finance PLC
8.03% 02/28/17 90,000 93,150
National Westminster Bank PLC
7.75% 04/29/49 265,000 278,502
New York State Dormitory Authority
Revenue
6.32% 04/01/99 200,000 200,532
News America Holdings Inc.
8.15% 10/17/36 100,000 102,446
Norfolk Southern Corp.
7.90% 05/15/97 252,000 271,719
North Atlantic Energy Corp.
9.05% 06/01/02 155,000 156,762
NRG Energy Inc.
7.50% 06/15/07 140,000 143,767(b)
NWCG Holding Corp.
6.44% 06/15/99 215,000 193,132(d)
Oryx Energy Co.
10.00% 06/15/99 150,000 157,457
9.50% 11/01/99 150,000 157,744
Petroleos Mexicanos
7.75% 10/29/99 100,000 101,625(b)
Philip Morris Cos. Inc.
7.20% 02/01/07 100,000 100,842
PSI Energy Inc.
Principal
Amount Value
- --------------------------------------------------------------------------------
6.25% 12/15/98 $ 100,000 $ 100,055
Reliance Industries Ltd.
10.50% 08/06/46 85,000 99,150(b)
10.25% 01/15/97 87,000 96,515(b)
Republic New York Corp.
7.20% 07/15/97 125,000 123,610
Republic of Columbia
7.25% 02/15/03 100,000 99,706
Republic of Panama
7.875% 02/13/02 100,000 100,250(b)
Republic of Philippines
8.60% 06/15/27 35,000 33,255
Riggs Capital Trust
8.625% 12/31/26 90,000 92,407(b)
RJR Nabisco Inc.
8.00% 07/15/01 300,000 307,080
St. George Funding Co.
8.485% 12/31/49 125,000 131,543(b)
Sun Life Canada Capital Trust
8.526% 05/29/49 175,000 184,739(b)
Taubman Realty Group L.P.
8.00% 06/15/99 160,000 164,013
TCI Communications Inc.
8.65% 09/15/04 70,000 75,764
6.69% 03/31/06 125,000 124,624
Tele-Communications Inc.
6.469% 12/20/00 130,000 131,300
9.25% 04/15/02 100,000 109,028
Tenet Healthcare Corp.
8.00% 01/15/05 120,000 122,400
Time Warner Entertainment Co. L.P.
10.15% 05/01/12 75,000 94,169
Time Warner Inc.
4.90% 07/29/99 315,000 307,002(b)
6.10% 12/30/01 100,000 97,569(b)
Toledo Edison Co.
7.38% 03/31/00 250,000 251,930
Total Access Communication PLC
7.625% 11/04/01 155,000 150,737(b)
Triton Energy Ltd.
8.75% 04/15/02 140,000 145,281
Viacom Inc.
7.75% 06/01/05 250,000 251,315
Washington Mutual Capital
8.375% 06/01/27 131,000 136,895
Waterford Funding Corp.
8.09% 01/02/17 400,000 412,004
WorldCom Inc.
7.55% 04/01/04 120,000 124,446
Yale University Notes
7.375% 04/15/96 100,000 104,782
Total Corporate Notes
(Cost $15,848,050) 16,185,427
Mortgage-Backed -- 25.1%
Federal Home Loan Mortgage Corp.
9.00% 12/01/16 454,937 486,600
9.50% 04/01/21 39,024 42,474(h)
9.00% 12/01/24 477,753 510,002
9.00% 03/01/25 1,200,300 1,279,316
9.00% 04/01/25 2,198,217 2,342,925
9.00% 07/01/25 192,310 204,970
8.00% 08/01/25 446,273 461,612
8.00% 10/01/25 354,506 366,467
9.00% 10/01/25 766,080 816,511
9.00% 12/01/25 162,067 172,735
6,683,612
- ----------
See Notes to Schedule of Investments and Financial Statements
47
<PAGE>
GE FIXED INCOME FUND
Principal
Amount Value
- --------------------------------------------------------------------------------
Federal National Mortgage Assoc.
6.50% 01/01/04 $ 38,769 $ 38,713
8.50% 04/01/17 100,355 105,790
9.00% 10/01/24 194,740 207,965
8.50% 12/01/24 502,712 527,611
7.50% TBA 1,398,230 1,421,825(c)
2,301,904
Government National Mortgage Assoc.
8.00% 05/15/22 237,235 246,428
8.00% 01/15/23 72,760 75,511
8.00% 06/15/23 738,101 766,009
8.00% 09/15/23 332,334 344,899
8.00% 11/15/23 141,776 147,270
8.00% 12/15/23 277,737 288,238
6.50% 02/15/24 460,069 451,442
6.50% 02/15/24 529,932 519,996
6.50% 04/15/24 247,500 242,860
3,082,653
Collateralized Mortgage Obligations
Amresco Commercial Mortgage Funding Corp.
6.73% 06/17/29 163,828 165,108
BHN Mortgage Trust
7.916% 02/15/12 75,806 77,227
Collateralized Mortgage Obligation Trust
5.42% 09/01/15 94,335 81,865(d,f)
5.76% 11/01/18 106,359 74,850(d,f)
Community Program Loan Trust
4.50% 10/01/18 287,847 254,070
CS First Boston Mortgage Securities Corp.
6.425% 08/20/30 68,691 68,799
DLJ Mortgage Acceptance Corp.
6.65% 12/17/27 68,979 69,388
Federal Home Loan Mortgage Corp.
8.00% 04/15/20 69,589 71,927(f)
5.36% 04/01/27 128,394 86,144(d,f)
Federal National Mortgage Assoc.
7.148% 10/17/09 176,000 180,785
6.965% 07/25/10 80,000 81,425
8.50% 03/01/17 61,845 17,085(g)
8.50% 04/01/17 122,558 33,857(g,h)
8.50% 01/01/18 21,005 5,803(g)
7.00% 06/18/20 337,405 340,304
7.41% 03/25/21 245,000 255,374
9.00% 05/25/22 151,109 43,822(g)
8.50% 07/25/22 268,284 73,765(g)
7.50% 05/01/23 169,545 51,075(g)
5.48% 07/01/26 26,275 19,008(d)
5.51% 04/01/27 127,428 92,027(d,f)
Federal National Mortgage Assoc. REMIC
7.623% 12/17/04 183,213 191,572
6.856% 06/17/11 132,000 134,228
6.909% 06/25/16 157,000 158,963
6.79% 07/25/20 255,000 232,050(d,f)
5.97% 12/25/22 149,132 116,695(d,f)
8.86% 09/25/23 87,000 58,290(d,f)
GS Mortgage Securities Corp.
6.86% 07/13/30 207,000 210,234
Mid State Trust
7.54% 07/01/35 62,978 64,779
Morgan Stanley Capital Inc.
6.476% 10/15/10 231,192 233,288(b)
6.86% 07/15/29 245,762 248,450(b)
Residential Assets Securitization Trust
7.75% 04/25/27 289,800 296,773
7.75% 06/25/27 153,690 158,877
7.50% 08/25/27 247,000 255,568
Principal
Amount Value
- --------------------------------------------------------------------------------
Sawgrass Finance REMIC Trust
6.45% 01/20/06 $ 100,000 $ 100,438
Structured Asset Securities Corp.
8.495% 04/25/27 402,989 417,597
3.97% 02/25/28 1,967,251 102,666(d,g)
5.65% 09/25/99 130,000 130,000(b)
Vornado Finance Corp.
6.36% 12/01/00 572,000 571,643(b)
5,825,819
Total Mortgage-Backed
(Cost $17,685,388) 17,893,988
Foreign Denominated Notes -- 2.1%
Dutch Government
5.75% 02/15/07 NLG 541,000 276,765
Federal Republic of Germany
6.00% 07/04/07 DEM 457,000 267,561
Government of Canada
7.00% 12/01/06 CAD 473,000 372,626
Kingdom of Belgium
6.25% 03/28/07 BEL 9,748,000 279,637
Kingdom of Denmark
7.00% 11/15/07 DKK 1,756,000 280,353
Total Foreign Denominated Notes
(Cost $1,416,981) 1,476,942
Total Bonds and Notes
(Cost $65,456,988) 66,417,861
Number
of Shares Value
- --------------------------------------------------------------------------------
Preferred Stock -- 0.9%
- --------------------------------------------------------------------------------
New Plan Realty Trust, 7.80% 4,151 214,433
Pinto Totta International
Finance Ltd., 7.77% 270 276,787(b)
Simon DeBartolo Group Inc.
(Series C), 7.89% 2,860 144,753
Total Preferred Stock
(Cost $622,666) 635,973
Total Investments in Securities
(Cost $66,079,654) 67,053,834
- --------------------------------------------------------------------------------
Short-Term Investments -- 9.5%
- --------------------------------------------------------------------------------
GEI Short Term Investment Fund 2,122 2,122
Principal
Amount Value
- --------------------------------------------------------------------------------
U.S. Government Agency
Federal National Mortgage Assoc.
6.05% 10/01/97 $6,820,000 6,820,000
Total Short-Term Investments
(Cost $6,822,122) 6,822,122
- ----------
See Notes to Schedule of Investments and Financial Statements
48
<PAGE>
SCHEDULE OF INVESTMENTS -- SEPTEMBER 30, 1997
Number
of Shares Value
- --------------------------------------------------------------------------------
Call Options Written -- 0.0%
- --------------------------------------------------------------------------------
U.S. Treasury Bonds Oct. 97/101.2 693,000 $ (325)
(Premium $(2,815))
Principal
Amount Value
- --------------------------------------------------------------------------------
Put Options Written -- 0.0%
- --------------------------------------------------------------------------------
U.S. Treasury Bonds Oct. 97/95.25 523,000 (41)
(Premium $(2,452))
Other Assets and Liabilities,
net (3.5%) (2,531,740)
-----------
NET ASSETS -- 100% $71,343,850
===========
FORWARD FOREIGN CURRENCY CONTRACTS
- --------------------------------------------------------------------------------
At September 30, 1997, 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. $ Unrealized
Foreign Currency Foreign on Origination Current Appreciation
Sales Contracts Currency Date Value (Depreciation)
- ------------------------------------------------------------------------------
BEL, expiring
10/06/97 10,396,000 $ 275,413 $ 285,157 $ (9,744)
CAD, expiring
10/06/97 519,000 376,455 375,669 786
DEM, expiring
10/06/97 480,000 262,431 271,769 (9,338)
DKK, expiring
10/06/97 1,960,000 281,516 291,384 (9,868)
NLG, expiring
10/06/97 566,000 274,779 284,495 (9,716)
---------- ---------- --------
$1,470,594 $1,508,474 $(37,880)
========== ========== ========
49
<PAGE>
GE GOVERNMENT SECURITIES FUND
FIVE YEAR TREASURY NOTE YIELD HISTORY
10/1/96 -- 9/30/97
[GRAPHIC]
LINE CHART
HIGH 6.86%
LOW 5.83%
AVG. 6.28%
INVESTMENT PROFILE
GE Government Securities Fund's investment objective is a high level of current
income consistent with safety of principal which the fund attempts to achieve by
investing primarily in obligations issued or guaranteed by the U.S. Government
or by its agencies or instrumentalities.
* LIPPER PERFORMANCE COMPARISON
Intermediate U.S. Government Peer Group
Based on average annual total returns for the periods ended 9/30/97
11 + One Three
Months Year Year
Number of funds
in peer group: 137 136 97
Peer group
average
total return: 6.1% 8.1% 7.7%
Lipper categories in peer group: Intermediate U.S. Treasury,
Intermediate U.S. Government
* See Notes to Performance for explanation of peer categories
See page 58 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
[GRAPHIC]
LINE CHART
AVERAGE ANNUAL
TOTAL RETURN
11 ONE FIVE TEN
MONTHS + YEAR YEAR YEAR
GE Gov't Securities 7.13% 9.44% 7.64% 3.12%
GE Gov't Securities
w/load 2.57% 4.78% 6.09% 2.02%
(maximum load-4.25%)
LB Gov't 6.80% 9.15% 8.98% 5.48%
- --------------------------------------------------------------------------------
CLASS B SHARES
[GRAPHIC]
LINE CHART
AVERAGE ANNUAL
TOTAL RETURN
11 ONE FIVE TEN
MONTHS + YEAR YEAR YEAR
GE Gov't Securities 6.36% 8.71% 3.68% 7.61%
GE Gov't Securities
w/load 3.36% 5.71% 3.68% 7.61%
maximum load 3.0% 3.0% 0.0% 0.0%
LB Gov't 6.80% 9.15% 6.65% 9.13%
+ As a result of the merger between the Investors Trust Funds and the GE
Funds, the fiscal year end for the Government Securities Fund was changed
from October 31st to September 30th. The 11 month period indicated
represents November 1, 1996 through September 30, 1997.
50
<PAGE>
SCHEDULE OF INVESTMENTS -- SEPTEMBER 30, 1997
GE GOVERNMENT SECURITIES FUND
[GRAPHIC]
PIE CHART
GE GOVERNMENT SECURITIES FUND
U.S. Government Agencies 81.6%
Corporate Notes 13.5%
CMO's 3.9%
Cash 1.0%
Principal
Amount Value
- --------------------------------------------------------------------------------
Bonds and Notes -- 99.0%
- --------------------------------------------------------------------------------
U.S. Governments -- 81.6%
Federal Home Loan Mortgage Corp.
7.50% 02/01/07 $ 126,788 $ 130,171
5.50% 12/01/08 3,897,244 3,757,177
7.50% 02/01/09 17,398 17,856
7.50% 05/01/09 23,908 24,532
7.50% 09/01/09 181,708 186,454
7.50% 06/01/10 7,040,120 7,222,768
7.50% 08/01/10 2,152,117 2,208,182
7.50% 09/01/10 2,334,356 2,395,019
6.50% 10/01/10 4,586,990 4,575,523
6.50% 11/01/10 13,361,99 513,328,590
7.50% 11/01/10 9,668,651 9,919,460
7.50% 12/01/10 398,135 408,459
6.50% 02/01/11 16,424,28 616,382,635
7.50% 02/01/11 248,287 254,726
6.50% 03/01/11 6,690,908 6,653,238
7.50% 04/01/11 344,811 353,752
6.50% 05/01/11 237,440 236,103
7.50% 05/01/11 1,072,845 1,099,803
7.50% 06/01/11 567,061 581,386
7.50% 07/01/11 1,658,826 1,700,031
7.50% 08/01/11 536,413 549,738
7.50% 09/01/11 1,655,453 1,697,006
7.50% 10/01/11 537,916 551,278
7.50% 11/01/11 613,915 629,165
7.50% 01/01/12 2,423,834 2,484,042
6.50% 02/01/12 16,665 16,571
7.50% 02/01/12 700,179 717,571
7.50% 03/01/12 483,200 495,203
7.50% 04/01/12 772,686 791,038
7.50% 05/01/12 1,020,976 1,045,224
7.50% 06/01/12 268,652 275,033
7.50% 07/01/12 824,179 843,754
9.00% 12/01/14 3,251,669 3,445,728
6.50% 08/01/25 241,021 235,748
6.50% 09/01/25 7,949,262 7,775,332
6.50% 12/01/25 376,750 367,564
6.50% 01/01/26 2,594,374 2,531,123
7.50% 04/01/26 2,840,973 2,894,241
7.50% 05/01/26 1,838,719 1,873,195
7.50% 06/01/26 1,741,778 1,774,437
7.50% 07/01/26 1,249,942 1,273,378
7.50% 08/01/26 758,009 772,222
7.00% 12/01/26 23,750 23,691
7.00% 01/01/27 1,399,827 1,396,328
Principal
Amount Value
- --------------------------------------------------------------------------------
6.50% 02/01/27 $ 897,727 $ 874,996
7.50% 05/01/27 5,528,816 5,627,284
7.50% 06/01/27 4,831,207 4,921,204
7.50% 07/01/27 12,821,086 13,178,877
130,496,836
Federal National Mortgage Assoc.
11.875% 05/19/00 40,000,000 45,637,600
12.00% 11/13/00 50,000,000 58,328,000
10.45% 10/13/15 10,000,000 13,957,800
9.00% 05/01/21 42,444 45,601
9.00% 06/01/21 2,008,490 2,157,841
9.00% 07/01/21 541,773 582,060
6.50% 11/01/23 561,404 549,586
6.50% 04/01/24 139,729 136,788
6.50% 02/01/26 973,712 948,756
7.00% 04/01/26 1,753,424 1,747,935
7.00% 05/01/26 5,114,358 5,098,351
7.00% 06/01/26 4,389,976 4,376,235
7.00% 07/01/26 1,001,569 998,435
7.00% 08/01/26 1,638,219 1,633,092
7.00% 09/01/26 288,234 287,331
7.00% 10/01/26 1,032,561 1,028,359
7.00% 11/01/26 833,463 830,854
7.00% 12/01/26 118,828 118,344
7.00% 01/01/27 273,562 272,448
7.00% 02/01/27 6,886,720 6,858,691
7.00% 03/01/27 776,051 772,892
146,366,999
Government National Mortgage Assoc.
9.00% 05/15/13 240,953 260,639
9.50% 05/15/16 81,444 88,774
9.50% 06/15/16 91,483 99,716
8.00% 10/15/16 288,991 303,079
8.00% 11/15/16 519,318 544,635
9.50% 12/15/16 98,798 107,690
8.00% 03/15/17 555,266 581,357
8.00% 04/15/17 1,873,378 1,961,408
8.00% 05/15/17 4,937,192 5,169,190
8.00% 06/15/17 600,986 629,227
9.50% 06/15/17 107,282 116,870
9.50% 07/15/17 126,615 137,931
8.00% 08/15/17 731,984 766,380
9.50% 08/15/17 294,870 321,223
9.50% 12/15/17 1,695,321 1,847,900
8.50% 05/15/21 123,272 130,475
8.50% 10/15/22 21,844 22,984
8.50% 03/15/23 591,735 621,872
6.50% 05/15/23 896,262 880,299
6.50% 08/15/23 1,623,244 1,594,334
6.50% 09/15/23 890,232 874,377
6.50% 11/15/23 248,941 244,507
6.50% 12/15/23 1,492,735 1,466,150
6.50% 01/15/24 2,562,321 2,514,278
6.50% 02/15/24 421,177 413,280
6.50% 03/15/24 767,458 753,068
6.50% 04/15/24 436,626 428,439
8.00% 04/15/24 429,420 444,445
8.00% 06/15/24 520,778 539,000
8.00% 07/15/24 369,070 381,984
8.00% 08/15/24 766,295 793,108
8.00% 09/15/24 820,522 849,232
8.00% 10/15/24 1,665,055 1,723,316
8.00% 11/15/24 2,724,928 2,820,273
8.00% 12/15/24 1,643,582 1,701,090
8.00% 02/15/25 1,688,604 1,747,665
8.00% 03/15/25 64,964 67,421
8.00% 06/15/25 1,616,305 1,671,857
8.00% 07/15/25 8,266,065 8,550,170
7.00% 08/15/25 444,069 444,344
7.00% 09/15/25 2,261,119 2,262,521
- ----------
See Notes to Schedule of Investments and Financial Statements
51
<PAGE>
GE GOVERNMENT SECURITIES FUND
Principal
Amount Value
- --------------------------------------------------------------------------------
8.00% 09/15/25 $ 309,332 $ 319,963
7.00% 10/15/25 11,276,833 11,283,824
8.00% 10/15/25 689,748 713,454
8.00% 11/15/25 489,646 506,476
8.00% 12/15/25 420,169 434,610
7.00% 04/15/26 2,548,194 2,548,194
7.50% 04/15/27 512,319 521,121
7.50% 05/15/27 5,524,085 5,618,989
8.00% 07/15/27 535,274 553,339
69,376,478
Small Business Administration
8.15% 02/01/15 1,884,887 2,009,466
8.10% 03/01/15 9,115,455 9,700,838
7.60% 05/01/16 3,845,422 4,005,248
7.55% 06/01/16 8,067,199 8,382,324
7.70% 07/01/16 5,808,635 6,084,545
6.95% 11/01/16 6,836,304 6,905,735
7.15% 03/01/17 4,931,458 5,030,858
42,119,014
U.S. Treasury Bonds
11.875% 11/15/03 12,500,000 16,130,875
6.375% 08/15/27 12,500,000 12,445,250
28,576,125
U.S. Treasury Notes
6.25% 08/31/02 29,000,000 29,262,740
Total U.S. Governments
(Cost $444,598,314) 446,198,192
Mortgage Backed -- 3.9%
Collateralized Mortgage Obligations
DLJ Mortgage Acceptance Corp.
6.99% 10/15/30 1,000,000 1,003,282
Federal National Mortgage Assoc. REMIC
3.50% 10/25/21 14,200,000 11,790,402
5.00% 01/25/23 3,227,890 2,996,612
NYC Mortgage Loan Trust
6.75% 06/25/06 5,879,611 5,897,985(b)
Total Mortgage-Backed
(Cost $21,125,805) 21,688,281
Principal
Amount Value
- --------------------------------------------------------------------------------
Corporate Notes -- 13.5%
Abbey National PLC
7.35% 10/29/49 $ 2,500,000 $ 2,557,225
Bank Austria AG
7.25% 02/15/17 2,500,000 2,531,825
Continental Cablevision Inc.
8.30% 05/15/06 2,500,000 2,708,850
Financing Corp.
10.70% 10/06/17 28,165,000 40,394,806
9.65% 11/02/18 2,020,000 2,673,026
Hydro-Quebec
8.25% 04/15/26 2,500,000 2,768,875
Korea Development Bank
7.125% 09/17/01 2,500,000 2,513,300
Merita Bank Ltd.
7.15% 12/29/49 2,500,000 2,524,375(b)
National Westminster Bank PLC
7.75% 04/29/49 2,500,000 2,627,375
Philip Morris Cos. Inc.
7.20% 02/01/07 2,500,000 2,521,050
Sun Life Canada Capital Trust
8.526% 05/29/49 2,500,000 2,639,125(b)
Tele-Communications Inc.
9.25% 04/15/02 2,500,000 2,725,700
Time Warner Inc.
4.90% 07/29/99 2,500,000 2,436,525(b)
Washington Mutual Capital
8.375% 06/01/27 2,500,000 2,612,500
Total Corporate Notes
(Cost $68,573,281) 74,234,557
Total Investments in Securities
(Cost $534,297,400) 542,121,030
Number
of Shares Value
- --------------------------------------------------------------------------------
Short-Term Investments -- 4.4%
- --------------------------------------------------------------------------------
GEI Short Term Investment Fund
(Cost $24,000,000) 24,000,000 24,000,000
Other Assets and Liabilities,
net (3.4%) (18,790,664)
------------
NET ASSETS -- 100% $547,330,366
============
- ----------
See Notes to Schedule of Investments and Financial Statements
52
<PAGE>
GE SHORT-TERM GOVERNMENT FUND
TWO YEAR TREASURY NOTE YIELD HISTORY
10/1/96 -- 9/30/97
[GRAPHIC]
LINE CHART
HIGH 6.54%
LOW 5.58%
AVG. 5.99%
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 average annual total returns for the periods ended 9/30/97
One Three
Year Year
Number of funds
in category: 184 140
Peer group average
total return: 6.6% 6.6%
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 58 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
[GRAPHIC]
LINE CHART
AVERAGE ANNUAL
TOTAL RETURN
ONE THREE SINCE
YEAR YEAR INCEPTION
GE Short Term Gov't 6.30% 6.13% 5.23%
GE Short Term Gov't w/load 3.65% 5.24% 4.48%
(maximum load-2.5%)
LB 1-3 YR. 6.89% 6.91% 5.89%
- --------------------------------------------------------------------------------
CLASS B SHARES
[GRAPHIC]
LINE CHART
AVERAGE ANNUAL
TOTAL RETURN
ONE THREE SINCE
YEAR YEAR INCEPTION
GE Short Term Gov't 5.84% 5.73% 4.84%
GE Short Term Gov't w/load 2.84% 5.13% 4.59%
maximum load 3.0% 2.0% 1.0%
LB 1-3 YR. 6.89% 6.91% 5.89%
- --------------------------------------------------------------------------------
CLASS C SHARES
[GRAPHIC]
LINE CHART
AVERAGE ANNUAL
TOTAL RETURN
ONE THREE SINCE
YEAR YEAR INCEPTION
GE Short Term Gov't 6.57% 6.42% 5.51%
LB 1-3 YR. 6.89% 6.91% 5.89%
- --------------------------------------------------------------------------------
CLASS D SHARES
[GRAPHIC]
LINE CHART
AVERAGE ANNUAL
TOTAL RETURN
ONE THREE SINCE
YEAR YEAR INCEPTION
GE Short Term Gov't 6.83% 6.66% 5.75%
LB 1-3 YR. 6.89% 6.91% 5.89%
53
<PAGE>
SCHEDULE OF INVESTMENTS -- SEPTEMBER 30, 1997
GE SHORT-TERM GOVERNMENT FUND
[GRAPHIC]
PIE CHART
GE SHORT-TREM GOVERNMENT FUND
U.S. Governments 78.5%
Corporate Notes 9.7%
Asset Backed 2.4%
Cash and Other 3.9%
Mortgage-Backed 5.5%
Principal
Amount Value
- --------------------------------------------------------------------------------
Bonds and Notes -- 96.1%
- --------------------------------------------------------------------------------
U.S. Governments -- 78.5%
Federal Home Loan Mortgage Corp.
6.50% 08/19/99 $150,000 $ 150,351
8.00% 08/01/03 284,471 291,548
6.00% 12/01/08 97,122 96,134(h)
6.25% 09/15/18 150,000 149,718
7.766% 10/01/22 3,272 3,384(e)
7.816% 01/01/23 1,867 1,939(e)
7.851% 01/01/23 662 678(e)
8.13% 08/01/23 6,613 6,855(e)
8.166% 08/01/23 6,105 6,352(e)
7.882% 01/01/24 97 101(e)
7.838% 06/01/24 130 135(e)
6.918% 04/01/26 4,702 4,778(e)
5.776% 11/01/26 3,831 3,970(e)
715,943
Federal Home Loan Mortgage Corp. REMIC
543.497% 09/15/05 196 2,064(g)
1002.00% 07/15/06 386 7,243(g)
9,307
Federal National Mortgage Assoc.
6.59% 03/25/02 550,000 553,437
6.881% 11/17/02 144,655 146,870
7.373% 08/17/03 245,057 251,337
6.521% 09/17/04 237,774 240,226
9.00% 08/01/10 316,093 334,661
7.00% 06/18/20 71,890 72,508
1,599,039
Federal National Mortgage Assoc. REMIC
6.72% 11/25/06 49,642 45,856(d,f)
7.95% 11/25/19 36,515 36,755
82,611
Government National Mortgage Assoc.
9.00% 08/15/09 482,920 508,726(e)
9.00% 12/15/09 410,349 441,767(e)
9.50% 12/15/09 871,336 946,713(e)
7.25% 09/20/18 251,097 260,906(e)
7.375% 05/20/21 19,372 20,035(e)
6.875% 11/20/21 23,569 24,246(e)
7.125% 05/20/22 92,605 95,643(e)
7.125% 07/20/22 245,349 253,016(e)
7.25% 08/20/22 199,084 205,181(e)
Principal
Amount Value
- --------------------------------------------------------------------------------
7.125% 08/20/23 $ 133,101 $ 136,907(e)
5.50% 09/20/23 295,572 303,932(e)
7.00% 01/20/24 106,132 108,470(e)
5.50% 02/01/24 26,642 27,374(e)
7.00% 03/20/24 187,576 191,351(e)
7.00% 04/20/24 242,302 246,580(e)
7.375% 04/20/24 171,797 176,629(e)
7.375% 06/20/24 70,764 72,765(e)
7.00% 09/20/24 248,924 255,030(e)
6.875% 10/20/24 30,756 31,534(e)
6.50% 11/20/24 195,297 198,745(e)
6.00% 10/20/25 523,434 530,631(e)
5.00% 08/20/27 811,801 801,273(e)
5.00% TBA 300,000 295,125(c)
6,132,579
U.S. Treasury Bills
5.31% 04/02/98 250,000 243,533(d,h)
U.S. Treasury Notes
5.875% 10/31/98 185,000 185,288(h)
6.375% 04/30/99 704,000 710,273
6.00% 06/30/99 2,474,000 2,482,115(h)
5.875% 07/31/99 2,659,000 2,661,074(h)
5.875% 08/31/99 446,000 446,348(h)
6.00% 08/15/00 1,500,000 1,506,094
7,991,192
Total U.S. Governments
(Cost $16,612,730) 16,774,204
Asset Backed -- 2.4%
Carco Auto Loan Master Trust
6.689% 08/15/04 54,000 54,135
Fleetwood Credit Grantor Trust
6.40% 05/15/13 160,000 160,550
Green Tree Recreational, Equipment &
Consumer Trust
6.49% 10/15/27 100,000 100,406
Lehman FHA Title I Loan Trust
7.30% 05/25/17 62,983 63,554
Premier Auto Trust
6.34% 01/06/02 33,000 33,144
Provident Bank Home Equity Loan Trust
6.72% 01/25/13 84,597 84,602
Total Asset Backed
(Cost $494,271) 496,391
Corporate Notes -- 9.7%
First USA Bank
6.125% 10/30/97 100,000 100,030
Ford Motor Credit Corp.
7.32% 05/23/02 150,000 151,875
General Motors Acceptance Corp.
8.375% 01/19/99 100,000 103,080
Great Atlantic & Pacific Tea Inc.
9.125% 01/15/98 168,000 169,598
Great Northern Nekoosa Corp.
9.125% 02/01/98 100,000 101,045
Ikon Capital Resource Inc.
6.27% 07/19/99 100,000 100,272
Lehman Brothers Holdings Inc.
6.875% 06/08/98 150,000 150,737
National City Capital Trust
6.75% 06/01/99 150,000 151,219(b)
New York New York
6.10% 02/01/98 100,000 100,092
- ----------
See Notes to Schedule of Investments and Financial Statements
54
<PAGE>
SCHEDULE OF INVESTMENTS -- SEPTEMBER 30, 1997
Principal
Amount Value
- --------------------------------------------------------------------------------
New York State Dormitory
Authority Revenue
6.32% 04/01/99 $ 40,000 $ 40,106
News America Holdings Inc.
9.125% 10/15/99 110,000 115,871
NWCG Holding Corp.
6.44% 06/15/99 135,000 121,269(d)
Province of Manitoba
6.125% 05/28/98 125,000 125,128
Republic of Columbia
8.75% 10/06/99 50,000 52,000
Salomon Inc.
6.70% 12/01/98 75,000 75,428
Tele-Communications Inc.
6.469% 12/20/00 170,000 171,700
Videotron Holdings PLC
11.125% 07/01/04 100,000 93,250
Woolworth Corp.
7.00% 06/01/00 150,000 152,103
Total Corporate Notes
(Cost $2,066,848) 2,074,803
Mortgage-Backed -- 5.5%
Collateralized Mortgage Obligations
GS Mortgage Securities Corp.
6.94% 07/13/30 159,245 161,932
Morgan Stanley Capital Inc.
6.85% 02/15/20 108,497 109,718
Salomon Brothers Mortgage Securities Inc.
8.125% 11/01/12 34,318 35,111
6.469% 01/20/28 370,703 370,703
Structured Asset Securities Corp.
5.65% 09/25/99 170,000 170,000(b)
6.75% 06/25/30 330,367 331,658(b)
Total Mortgage-Backed
(Cost $1,179,130) 1,179,122
Total Investments in Securities
(Cost $20,352,979) 20,524,520
Number
of Shares Value
- --------------------------------------------------------------------------------
Short-Term Investments -- 3.8%
- --------------------------------------------------------------------------------
GEI Short Term Investment Fund 2 $ 2
SSgA Money Market Fund Class A 194,097 194,097
SSgA U.S. Government Money
Market Fund 240,576 240,576
Principal
Amount Value
- --------------------------------------------------------------------------------
U.S. Government Agency -- 1.8%
Federal National Mortgage Assoc.
6.05% 10/01/97 $390,000 390,000
Total Short-Term Investments
(Cost $824,675) 824,675
Other Assets and Liabilities,
net 0.1% 15,631
-----------
NET ASSETS -- 100% $21,364,826
===========
- ----------
See Notes to Schedule of Investments and Financial Statements
55
<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 average annual total returns for the periods ended 9/30/97
One Three
Year Year
Number of funds
in category: 298 40
Peer group average
total return: 4.9% 5.3%
Lipper categories
in peer group: Money Market
*See Notes to Performance for explanation of peer categories
See page 58 for Notes to Performance.
Past performance is no guarantee
of future results.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT
[GRAPHIC]
LINE CHART
AVERAGE ANNUAL
TOTAL RETURN
ONE THREE SINCE
YEAR YEAR INCEPTION
GE Money Market 5.14% 5.28% 4.51%
90 Day T-Bill 5.17% 5.35% 4.71%
FUND YIELD
Fund IBC Money Fund
7 day current 5.11% 5.04%
7 day effective 5.24% 5.17%
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.
56
<PAGE>
SCHEDULE OF INVESTMENTS -- SEPTEMBER 30, 1997
GE MONEY MARKET FUND
[GRAPHIC]
PIE CHART
GE MONEY MARKET FUND
U.S. Governments 35.6%
Certificates of Deposit and Other 35.7%
Commercial Paper 28.7%
Principal Amortized
Amount Cost
- --------------------------------------------------------------------------------
U.S. Governments(d) -- 35.6%
Federal Home Loan
Mortgage Corp.
5.44% 10/02/97 $4,400,000 $ 4,399,337
5.57% 12/23/97 5,310,000 5,243,646
9,642,983
Federal National Mortgage Assoc.
5.45% 10/07/97 4,400,000 4,396,022
5.42% 10/17/97 2,600,000 2,593,760
5.51% 10/23/97 2,000,000 1,993,449
5.50% 10/24/97 2,400,000 2,391,597
5.48% 10/30/97 4,400,000 4,380,754
5.875% 11/06/97 2,300,000 2,287,154
5.50% 11/12/97 2,100,000 2,086,709
5.52% 12/15/97 3,200,000 3,164,100
5.55% 12/16/97 2,580,000 2,550,534
5.48% 12/18/97 5,110,000 5,050,588
30,894,667
Total U.S. Governments
(Cost $40,537,650) 40,537,650
Commercial Paper(d) -- 28.7%
Associates Corp. of North America
6.36% 10/01/97 3,810,000 3,810,000
Bank of Nova Scotia
5.60% 12/29/97 4,410,000 4,349,818
Chase Manhattan Corp.
5.57% 10/24/97 4,100,000 4,085,632
First Union Corp.
5.57% 10/31/97 4,800,000 4,778,040
Halifax Building Society
5.57% 12/12/97 4,440,000 4,391,249
Merrill Lynch & Co. Inc.
5.60% 12/01/97 4,400,000 4,358,771
Morgan (J.P.) & Co. Inc.
5.59% 11/14/97 2,530,000 2,512,962
Toronto Dominion Bank
5.55% 11/17/97 4,500,000 4,467,688
Total Commercial Paper
(Cost $32,754,160) 32,754,160
Principal Amortized
Amount Cost
- --------------------------------------------------------------------------------
Certificates of Deposit -- 34.5%
ABN Amro
5.57% 12/19/97 $4,400,000 $ 4,400,000
Bank of Montreal
5.54% 10/02/97 4,200,000 4,200,000
Bayerische Hypotheken Bank
5.56% 11/26/97 4,410,000 4,410,000
Bayerische Vereinsbank AG
5.54% 10/15/97 4,500,000 4,500,000
Credit Suisse
5.525% 10/07/97 4,400,000 4,400,007
Deutsche Bank AG
5.60% 01/02/98 4,000,000 4,000,000
Dresdner Bank AG
5.56% 10/06/97 4,200,000 4,200,000
Societe Generale
5.58% 12/03/97 4,400,000 4,400,000
Swiss Bank Corp.
5.61% 10/08/97 4,800,000 4,800,000
Total Certificates of Deposit
(Cost $39,310,007) 39,310,007
Time Deposits -- 1.1%
State Street Cayman Islands
6.125% 10/01/97
(Cost $1,310,000) 1,310,000 1,310,000
Total Short Term Investments
(Cost $113,911,817) 113,911,817
Other Assets and Liabilities,
net 0.1% 117,727
-----------
NET ASSETS -- 100% $114,029,544
============
- ----------
See Notes to Schedule of Investments and Financial Statements
57
<PAGE>
NOTES TO PERFORMANCE (UNAUDITED)
Total returns take into account changes in share price and assume reinvestment
of dividends and capital gains, if any. 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 are shown both without the sales charge and also
assuming the reduction of the returns by the current maximum applicable sales
charges as described in Note 1 of the Notes to Financial Statements.
The performance data relating to Class A and B shares of GE Mid-Cap Growth Fund,
GE Value Equity Fund, GE Tax-Exempt Fund and GE Government Securities Fund,
reflect the prior performance and expense ratios (adjusted to reflect GE Funds
current sales charges) of Investors Trust Growth Fund, Investors Trust Value
Fund, Investors Trust Tax Free Fund and Investors Trust Government Fund
respectively, each a series of Investors Trust (collectively, the "Investors
Trust Funds"), the assets of which were acquired by the corresponding GE Fund on
September 26, 1997 (the "Merger Date"). Because the Investors Trust Funds did
not offer Class C or D shares, performance data relating to the Class C and D
shares of GE Tax-Exempt Fund is limited to the period from the Merger Date to
September 30, 1997. GE Mid-Cap Growth Fund, GE Value Equity Fund and GE
Government Securities Fund did not offer Class C or D shares during the fiscal
year ended September 30, 1997, therefore no performance data is shown for Class
C or D shares of these funds.
Shares of the GE Government Securities Fund and 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.
The Adviser has voluntarily agreed to waive and/or bear certain fees and Fund
expenses. Without these provisions, the performance returns (and/or yields)
would have been lower. These provisions may be terminated in the future.
The Standard & Poor's ("S&P") Composite Index of 500 stocks (S&P 500 Index), the
S&P Composite Index of 400 mid-cap stocks (S&P Mid-Cap 400 Index), the S&P/Barra
Composite Index of 500 value stocks (S&P/Barra 500 Value Index), Morgan Stanley
Capital International World Index (MSCI World), Morgan Stanley Capital
International EAFE Index (MSCI EAFE), Lehman Brothers Aggregate Bond Index (LB
Aggregate), the Lehman Brothers Municipal Bond Index (LBMI), Lehman Brothers 1-3
Year Government Bond Index (LB 1-3), the Lehman Brothers 10-Year General
Obligation Municipal Bond Index (LB 10yr. GO Muni Bond)and the Lehman Brothers
Government Bond Index 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 stocks
recognized by investors to be representative of the stock market in general. The
S&P Mid-Cap 400 Index is a capitalization-weighted index of 400 U.S. stocks with
a median market capitalization of approximately $700 million. The S&P/Barra 500
Value Index is a capitalization-weighted index of all the stocks in the S&P 500
Index that have low price-to-book ratios. MSCI World Index is a composite of
1,551 stocks in companies from 22 countries representing the European, Pacific
Basin and American regions. MSCI EAFE Index is a composite of 1,077 stocks of
companies from 20 countries representing stock markets of Europe, Australasia,
New Zealand and the Far East. LB Aggregate 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. LBMI is a composite of investment grade, fixed
rate municipal bonds and is considered to be representative of the municipal
bond market. The LB 1-3 is a composite of government and U.S. Treasury
obligations with maturities of 1-3 years. The LB 10yr. GO Muni Bond Index is
comprised of all municipal general obligation investment-grade debt issues with
maturities between 8 and 11 years and each issue must be at least $50 million.
The Lehman Brothers Government Bond Index is comprised of all U.S. dollar
fixed-rate U.S. agency and Treasury bond issues (excluding stripped issues) with
remaining maturities greater than one year and with at least $100 million in
outstanding issuance. The majority of the broad market returns are not available
from the Funds' commencement of investment operations through September 30,
1997. The IBC Money Fund Report yields represent the average yields of 873
taxable money market funds. The results shown for the foregoing indices assume
the reinvestment of net dividends or interest.
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 number of shareholder publica-tion thresholds. Lipper is an
independent mutual fund rating service.
The views expressed in this document reflect our judgment 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.
58
<PAGE>
NOTES TO SCHEDULES OF INVESTMENTS
(a) Non-income producing security.
(b) Pursuant to Rule 144A of Securities Act of 1933, these securities may be
resold in transactions exempt from registration, normally to qualified
institutional buyers. At September 30, 1997, these securities amounted to
$359,654, $422,145, $1,317,369, $4,190,922, $7,067,508, $13,498,010 and
$652,877 or 0.4%, 0.7%, 0.3%, 3.4%, 9.9%, 2.5% and 3.1% of net assets for
the GE International Equity, GE Global Equity, GE U.S. Equity, GE Strategic
Investment, GE Fixed Income, GE Government Securities and GE Short-Term
Government Funds, respectively.
(c) Settlement is on a delayed delivery or when-issued basis with final
maturity to be announced (TBA) in the future.
(d) Rate represents effective yield.
(e) Adjustable rate mortgage coupon. The stated rate represents the rate at
September 30, 1997.
(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.
(h) At September 30, 1997, all or a portion of this security was pledged to
cover collateral requirements for futures, options or TBA's.
(i) Escrowed to maturity. Bonds which are collateralized by U.S. Treasury
securities which are held in escrow by a trustee and used to pay principal
and interest on such bonds.
(j) Prerefunded. Bonds which are collateralized by U.S. Treasury securities
which are held in escrow and are used to pay principal and interest on the
tax-exempt issue and to retire the bonds at the earliest refunding date.
(k) The security is insured by either FGIC, MBIA, or AMBAC. The GE Tax-Exempt
Fund had insurance concentrations of 5% or greater as of September 30, 1997
(as a percentage of net assets) as follows:
AMBAC 12.1%
FGIC 7.0%
MBIA 8.2%
ABBREVIATIONS:
ADR -- American Depositary Receipt
AMBAC -- AMBAC Indemnity Corporation
FGIC -- Financial Guarantee Insurance Corporation (wholly-owned subsidiary
of GE Capital Services, Inc.)
GDR -- Global Depository Receipt
G.O. -- General Obligation
MBIA -- Municipal Bond Investors Assurance Corporation
Pfd. -- Preferred
Regd. -- Registered
REMIC -- Real Estate Mortgage Investment Conduit
Rts. -- Rights
SDR -- Special Drawing Rights
VRDN -- Variable Rate Demand Note
CURRENCY TERMS:
BEL -- Belgian Franc
CAD -- Canadian Dollar
DEM -- Deutsche Mark
DKK -- Danish Krone
NLG -- Netherlands Guilder
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 financial
intermediaries and certain qualified institutions, including employee retirement
plans that do not seek the additional services available to Class A investors.
59
<PAGE>
FINANCIAL HIGHLIGHTS
SELECTED DATA BASED ON A SHARE OUTSTANDING THROUGHOUT THE PERIOD(S) INDICATED
<TABLE>
<CAPTION>
GE INTERNATIONAL EQUITY FUND
- ------------------------------------------------------------------------------------------------------------------------------------
CLASS A CLASS B
- ------------------------------------------------------------------------------------------------------------------------------------
9/30/97 9/30/96(c) 9/30/95 9/30/94 9/30/97 9/30/96(c) 9/30/95 9/30/94
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INCEPTION DATE -- -- -- 3/2/94 -- -- -- 3/2/94
Net asset value, beginning of period $17.65 $ 15.87 $15.18 $15.00 $17.47 $15.77 $15.13 $15.00
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.01 0.07 0.09 0.06 (0.06) 0.05 0.01 0.00
Net realized and unrealized
gains (losses) on investments 3.16 1.74 0.64 0.12 3.11 1.65 0.64 0.13
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
INVESTMENT OPERATIONS 3.17 1.81 0.73 0.18 3.05 1.70 0.65 0.13
- ------------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income 0.06 0.03 0.04 0.00 0.00 0.00 0.01 0.00
Net realized gains 0.50 0.00 0.00 0.00 0.50 0.00 0.00 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 0.56 0.03 0.04 0.00 0.50 0.00 0.01 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $20.26 $17.65 $15.87 $15.18 $20.02 $17.47 $15.77 $15.13
====================================================================================================================================
TOTAL RETURN (a) 18.41% 11.39% 4.87% 1.20% 17.86% 10.78% 4.33% 0.87%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $17,270 $8,462 $3,948 $25 $455 $272 $57 $34
Ratios to average net assets:
Net investment income* 0.20% 0.43% 1.28% 1.01% (0.30%) 0.28% 0.10% 0.47%
Expenses* 1.60% 1.59% 1.60% 1.60% 2.10% 2.10% 2.10% 2.10%
Gross Expenses* 1.60% 1.66% 1.95% 1.93% 4.12% 3.50% 3.50% 2.43%
Portfolio turnover rate 51% 36% 27% 6% 51% 36% 27% 6%
Average brokerage commissions (b) $.021 $.031 N/A N/A $.021 $.031 N/A N/A
- ------------------------------------------------------------------------------------------------------------------------------------
CLASS C CLASS D
- ------------------------------------------------------------------------------------------------------------------------------------
9/30/97 9/30/96(c) 9/30/95 9/30/94 9/30/97 9/30/96(c) 9/30/95 9/30/94
- ------------------------------------------------------------------------------------------------------------------------------------
INCEPTION DATE -- -- -- 3/2/94 -- -- -- 3/2/94
Net asset value, beginning of period $17.65 $15.88 $15.19 $15.00 $17.76 $15.94 $15.22 $15.00
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.05 0.11 0.12 0.00 0.13 0.17 0.12 0.10
Net realized and unrealized
gains (losses) on investments 3.19 1.72 0.65 0.19 3.18 1.73 0.70 0.12
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
INVESTMENT OPERATIONS 3.24 1.83 0.77 0.19 3.31 1.90 0.82 0.22
- ------------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income 0.03 0.06 0.08 0.00 0.14 0.08 0.10 0.00
Net realized gains 0.50 0.00 0.00 0.00 0.50 0.00 0.00 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 0.53 0.06 0.08 0.00 0.64 0.08 0.10 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $20.36 $17.65 $15.88 $15.19 $20.43 $17.76 $15.94 $15.22
====================================================================================================================================
TOTAL RETURN (a) 18.79% 11.54% 5.16% 1.27% 19.16% 11.97% 5.45% 1.47%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $6,152 $3,230 $1,262 $481 $75,098 $63,225 $32,907 $26,460
Ratios to average net assets:
Net investment income* 0.45% 0.68% 0.83% 0.66% 0.76% 0.99% 0.97% 1.52%
Expenses* 1.35% 1.35% 1.35% 1.35% 1.01% 1.03% 1.07% 1.10%
Gross Expenses* 1.58% 1.96% 2.75% 1.68% 1.01% 1.03% 1.18% 1.43%
Portfolio turnover rate 51% 36% 27% 6% 51% 36% 27% 6%
Average brokerage commissions (b) $.021 $.031 N/A N/A $.021 $.031 N/A N/A
</TABLE>
- ----------
See Notes to Financial Highlights on page 71 and Notes to Financial Statements
60
<PAGE>
FINANCIAL HIGHLIGHTS
SELECTED DATA BASED ON A SHARE OUTSTANDING THROUGHOUT THE PERIOD(S) INDICATED
<TABLE>
<CAPTION>
GE GLOBAL EQUITY FUND
- ------------------------------------------------------------------------------------------------------------------------------------
CLASS A CLASS B
- ------------------------------------------------------------------------------------------------------------------------------------
9/30/97 9/30/96 9/30/95 9/30/94(d) 9/30/97 9/30/96 9/30/95 9/30/94
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INCEPTION DATE -- -- -- 12/22/93 -- -- -- 12/22/93
Net asset value, beginning of period $22.01 $20.18 $19.34 $18.61 $21.87 $20.14 $19.32 $18.48
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.00 0.02 0.10 0.03 (0.08) (0.04) 0.00 (0.01)
Net realized and unrealized
gains (losses) on investments 3.89 2.20 1.22 0.91 3.82 2.14 1.23 1.06
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
INVESTMENT OPERATIONS 3.89 2.22 1.32 0.94 3.74 2.10 1.23 1.05
- ------------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income 0.00 0.02 0.09 0.01 0.00 0.00 0.02 0.01
Net realized gains 1.29 0.37 0.39 0.20 1.29 0.37 0.39 0.20
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 1.29 0.39 0.48 0.21 1.29 0.37 0.41 0.21
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $24.61 $22.01 $20.18 $19.34 $24.32 $21.87 $20.14 $19.32
====================================================================================================================================
TOTAL RETURN (a) 18.51% 11.18% 7.16% 3.09% 17.92% 10.61% 6.62% 5.70%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $1,524 $4,054 $2,811 $694 $877 $600 $356 $128
Ratios to average net assets:
Net investment income* (0.09%) 0.12% 0.47% 0.44% (0.52%) (0.34%) (0.11%) (0.08%)
Expenses* 1.60% 1.60% 1.60% 1.60% 2.10% 2.10% 2.10% 2.10%
Gross Expenses* 3.10% 1.90% 2.17% 2.02% 3.33% 3.50% 3.50% 2.52%
Portfolio turnover rate 70% 46% 46% 26% 70% 46% 46% 26%
Average brokerage commissions (b) $.006 $.006 N/A N/A $.006 $.006 N/A N/A
- ------------------------------------------------------------------------------------------------------------------------------------
CLASS C CLASS D
9/30/97 9/30/96 9/30/95 9/30/94 9/30/93(e) 9/30/97 9/30/96 9/30/95 9/30/94
- ------------------------------------------------------------------------------------------------------------------------------------
INCEPTION DATE -- -- -- -- 1/5/93 -- -- -- 11/29/93
Net asset value, beginning of period $22.18 $20.31 $19.40 $17.16 $15.00 $22.25 $20.37 $19.45 $17.49
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.04 0.06 0.09 0.07 0.08 0.10 0.13 0.13 0.11
Net realized and unrealized
gains (losses) on investments 3.94 2.22 1.30 2.37 2.08 3.94 2.21 1.31 2.06
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
INVESTMENT OPERATIONS 3.98 2.28 1.39 2.44 2.16 4.04 2.34 1.44 2.17
- ------------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income 0.06 0.04 0.09 0.00 0.00 0.17 0.09 0.13 0.01
Net realized gains 1.29 0.37 0.39 0.20 0.00 1.29 0.37 0.39 0.20
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 1.35 0.41 0.48 0.20 0.00 1.46 0.46 0.52 0.21
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $24.81 $22.18 $20.31 $19.40 $17.16 $24.83 $22.25 $20.37 $19.45
====================================================================================================================================
TOTAL RETURN (a) 18.82% 11.44% 7.47% 14.28% 14.10% 19.14% 11.71% 7.76% 12.43%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $35,120 $28,682 $23,683 $20,432 $11,999 $22,642 $10,123 $9,785 $10,504
Ratios to average net assets:
Net investment income* 0.24% 0.33% 0.59% 0.52% 1.00% 0.48% 0.56% 0.84% 0.82%
Expenses* 1.35% 1.35% 1.35% 1.31% 1.10% 1.10% 1.10% 1.10% 1.10%
Gross Expenses* 1.45% 1.60% 1.42% 1.77% 2.19% 1.10% 1.12% 1.75% 1.52%
Portfolio turnover rate 70% 46% 46% 26% 28% 70% 46% 46% 26%
Average brokerage commissions (b) $.006 $.006 N/A N/A N/A $.006 $.006 N/A N/A
</TABLE>
- ----------
See Notes to Financial Highlights on page 71 and Notes to Financial Statements
61
<PAGE>
FINANCIAL HIGHLIGHTS
SELECTED DATA BASED ON A SHARE OUTSTANDING THROUGHOUT THE PERIOD(S) INDICATED
<TABLE>
<CAPTION>
GE PREMIER GROWTH EQUITY FUND
- ------------------------------------------------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C CLASS D
9/30/97(c, h) 9/30/97(c, h) 9/30/97(c, h) 9/30/97(c, h)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCEPTION DATE 12/31/96 12/31/96 12/31/96 12/31/96
Net asset value, beginning of period $15.00 $15.00 $15.00 $15.00
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (0.04) (0.09) 0.00 0.04
Net realized and unrealized
gains (losses) on investments 3.35 3.34 3.35 3.34
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM INVESTMENT OPERATIONS 3.31 3.25 3.35
- ------------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income 0.00 0.00 0.00 0.00
Net realized gains 0.00 0.00 0.00 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 0.00 0.00 0.00 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $18.31 $18.25 $18.35 $18.38
====================================================================================================================================
TOTAL RETURN (a) 22.07% 21.67% 22.33% 22.53%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $1,395 $447 $7,287 $5,770
Ratios to average net assets:
Net investment income* (0.34%) (0.76%) (0.03%) 0.31%
Expenses* 1.40% 1.90% 1.15% 0.90%
Gross Expenses* 4.09% 9.30% 1.62% 1.17%
Portfolio turnover rate 17% 17% 17% 17%
Average brokerage commissions (b) $.053 $.053 $.053 $.053
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
See Notes to Financial Highlights on page 71 and Notes to Financial Statements
62
<PAGE>
FINANCIAL HIGHLIGHTS
SELECTED DATA BASED ON A SHARE OUTSTANDING THROUGHOUT THE PERIOD(S) INDICATED
<TABLE>
<CAPTION>
GE U.S. EQUITY FUND
- ------------------------------------------------------------------------------------------------------------------------------------
CLASS A CLASS B
9/30/97(c) 9/30/96(c) 9/30/95(c) 9/30/94(d) 9/30/97(c) 9/30/96(c) 9/30/95(c) 9/30/94
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INCEPTION DATE -- -- -- 12/22/93 -- -- -- 12/22/93
Net asset value, beginning of period $23.34 $20.28 $16.12 $16.48 $22.57 $19.71 $16.03 $16.41
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.23 0.31 0.34 3.23 0.11 0.19 0.21 0.24
Net realized and unrealized
gains (losses) on investments 8.33 3.34 3.91 (3.22) 8.03 3.25 3.84 (0.25)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
INVESTMENT OPERATIONS 8.56 3.65 4.25 0.01 8.14 3.44 4.05 (0.01)
- -----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income 0.28 0.32 0.00 0.20 0.17 0.31 0.28 0.20
Net realized gains 2.19 0.27 0.09 0.17 2.19 0.27 0.09 0.17
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 2.47 0.59 0.09 0.37 2.36 0.58 0.37 0.37
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $29.43 $23.34 $20.28 $16.12 $28.35 $22.57 $19.71 $16.03
====================================================================================================================================
TOTAL RETURN (a) 39.44% 18.36% 26.52% (0.86%) 38.75% 17.78% 25.92% (0.09%)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $65,535 $34,523 $15,148 $1,214 $14,380 $7,194 $1,563 $91
Ratios to average net assets:
Net investment income* 0.93% 1.40% 1.85% 1.87% 0.44% 0.90% 1.29% 1.28%
Expenses* 1.00% 1.00% 1.00% 1.00% 1.50% 1.50% 1.50% 1.50%
Gross Expenses* 1.11% 1.15% 1.25% 1.46% 1.88% 2.08% 3.50% 1.96%
Portfolio turnover rate 38% 49% 43% 51% 38% 49% 43% 51%
Average brokerage commissions (b) $.069 $.045 N/A N/A $.069 $.045 N/A N/A
- ------------------------------------------------------------------------------------------------------------------------------------
CLASS C CLASS D
9/30/97(c) 9/30/96(c) 9/30/95(c) 9/30/94 9/30/93(e) 9/30/97(c) 9/30/96(c) 9/30/95 9/30/94
- ------------------------------------------------------------------------------------------------------------------------------------
INCEPTION DATE -- -- -- -- 1/5/93 -- -- -- 11/29/93
Net asset value,
beginning of period $23.02 $19.98 $16.13 $16.35 $15.00 $23.03 $19.98 $16.16 $16.37
INCOME (LOSS) FROM
INVESTMENT OPERATIONS:
Net investment income 0.30 0.36 0.37 1.00 0.12 0.37 0.40 0.38 0.32
Net realized and unrealized
gains (losses) on investments 8.19 3.30 3.86 (0.85) 1.23 8.19 3.31 3.88 (0.16)
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
INVESTMENT OPERATIONS 8.49 3.66 4.23 0.15 1.35 8.56 3.71 4.26 0.16
- ------------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income 0.32 0.35 0.29 0.20 0.00 0.41 0.39 0.35 0.20
Net realized gains 2.19 0.27 0.09 0.17 0.00 2.19 0.27 0.09 0.17
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 2.51 0.62 0.38 0.37 0.00 2.60 0.66 0.44 0.37
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $29.00 $23.02 $19.98 $16.13 $16.35 $28.99 $23.03 $19.98 $16.16
====================================================================================================================================
TOTAL RETURN (a) 39.76% 18.70% 26.86% 0.88% 10.32% 40.16% 18.97% 27.14% 0.96%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $97,886 $50,035 $26,007 $16,382 $74,415 $212,957 $144,470 $128,247 $114,885
Ratios to average net assets:
Net investment income* 1.18% 1.66% 2.12% 2.11% 1.86% 1.45% 1.90% 2.36% 2.27%
Expenses* 0.75% 0.75% 0.75% 0.62% 0.50% 0.50% 0.50% 0.50% 0.50%
Gross Expenses* 0.93% 1.06% 1.19% 1.21% 1.34% 0.52% 0.59% 0.71% 0.96%
Portfolio turnover rate 38% 49% 43% 51% 15% 38% 49% 43% 51%
Average brokerage commissions (b) $.069 $.045 N/A N/A N/A $.069 $.045 N/A N/A
</TABLE>
- ----------
See Notes to Financial Highlights on page 71 and Notes to Financial Statements
63
<PAGE>
FINANCIAL HIGHLIGHTS
SELECTED DATA BASED ON A SHARE OUTSTANDING THROUGHOUT THE PERIOD(S) INDICATED
<TABLE>
<CAPTION>
GE MID-CAP GROWTH FUND
- ------------------------------------------------------------------------------------------------------------------------------------
CLASS A
9/30/97(F) 10/31/96 10/31/95 10/31/94 10/31/93
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INCEPTION DATE -- -- -- -- 9/8/93
Net asset value, beginning of period $13.16 $11.38 $8.81 $8.69 $8.50
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (0.07) 0.00 0.01 (0.01) 0.00
Net realized and unrealized
gains (losses) on investments 4.52 1.78 2.56 0.21 0.19
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM INVESTMENT OPERATIONS 4.45 1.78 2.57 0.20 0.19
- ------------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income 0.00 0.00 0.00 0.00 0.00
Net realized gains 0.00 0.00 0.00 0.08 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 0.00 0.00 0.00 0.08 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $17.61 $13.16 $11.38 $8.81 $8.69
====================================================================================================================================
TOTAL RETURN (a) 33.81% 15.64% 29.17% 2.48% 2.24%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $10,885 $8,222 $5,986 $4,182 $3,261
Ratios to average net assets:
Net investment income* (0.51%) 0.03% 0.10% (0.11%) (0.30%)
Expenses* 1.31% 1.35% 1.35% 1.34% 1.39%
Gross Expenses* 1.46% 1.70% 2.44% 3.53% 4.83%
Portfolio turnover rate 139% 41% 74% 100% 46%
Average brokerage commissions(b) $.067 $.050 N/A N/A N/A
- ------------------------------------------------------------------------------------------------------------------------------------
CLASS B
9/30/97(f) 10/31/96 10/31/95 10/31/94 10/31/93
- ------------------------------------------------------------------------------------------------------------------------------------
INCEPTION DATE -- -- -- -- 9/8/93
Net asset value, beginning of period $12.87 $11.21 $8.74 $8.70 $8.50
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (0.18) (0.09) (0.05) (0.04) 0.00
Net realized and unrealized
gains (losses) on investments 4.42 1.75 2.52 0.16 0.20
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM INVESTMENT OPERATIONS 4.24 1.66 2.47 0.12 0.20
- ------------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income 0.00 0.00 0.00 0.00 0.00
Net realized gains 0.00 0.00 0.00 0.08 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 0.00 0.00 0.00 0.08 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $17.11 $12.87 $11.21 $8.74 $8.70
====================================================================================================================================
TOTAL RETURN (a) 33.02% 14.81% 28.26% 1.67% 2.35%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $32,280 $27,616 $14,311 $5,857 $592
Ratios to average net assets:
Net investment income* (1.26%) (0.73%) (0.66%) (0.82%) (1.38%)
Expenses* 2.06% 2.10% 2.10% 2.09% 1.86%
Gross Expenses* 2.21% 2.41% 3.19% 4.06% 5.04%
Portfolio turnover rate 139% 41% 74% 100% 46%
Average brokerage commissions (b) $.067 $.050 N/A N/A N/A
</TABLE>
- ----------
See Notes to Financial Highlights on page 71 and Notes to Financial Statements
64
<PAGE>
FINANCIAL HIGHLIGHTS
SELECTED DATA BASED ON A SHARE OUTSTANDING THROUGHOUT THE PERIOD(S) INDICATED
<TABLE>
<CAPTION>
GE VALUE EQUITY FUND
- ------------------------------------------------------------------------------------------------------------------------------------
CLASS A
9/30/97(f) 10/31/96 10/31/95 10/31/94 10/31/93
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INCEPTION DATE -- -- -- -- 9/8/93
Net asset value, beginning of period $10.83 $8.95 $7.51 $7.63 $7.50
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.07 0.05 0.14 0.13 0.01
Net realized and unrealized
gains (losses) on investments 3.59 1.99 1.45 (0.16) 0.12
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM INVESTMENT OPERATIONS 3.66 2.04 1.59 (0.03) 0.13
- ------------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income 0.04 0.09 0.15 0.09 0.00
Net realized gains 0.87 0.07 0.00 0.00 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 0.91 0.16 0.15 0.09 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $13.58 $10.83 $8.95 $7.51 $7.63
====================================================================================================================================
TOTAL RETURN (a) 36.18% 23.10% 21.45% (0.32%) 1.73%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $8,236 $5,833 $4,083 $3,267 $2,249
Ratios to average net assets:
Net investment income* 0.63% 1.03% 1.71% 1.92% 0.73%
Expenses* 1.30% 1.35% 1.35% 1.35% 1.42%
Gross Expenses* 1.33% 1.73% 2.43% 3.55% 6.37%
Portfolio turnover rate 131% 100% 27% 15% 6%
Average brokerage commissions (b) $.046 $.050 N/A N/A N/A
- ------------------------------------------------------------------------------------------------------------------------------------
CLASS B
9/30/97(f) 10/31/96 10/31/95 10/31/94 10/31/93
- ------------------------------------------------------------------------------------------------------------------------------------
INCEPTION DATE -- -- -- -- 9/8/93
Net asset value, beginning of period $10.79 $8.93 $7.50 $7.64 $7.50
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (0.01) 0.04 0.07 0.08 (0.01)
Net realized and unrealized
gains (losses) on investments 3.57 1.93 1.45 (0.17) 0.15
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM INVESTMENT OPERATIONS 3.56 1.97 1.52 (0.09) 0.14
- ------------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income 0.00 0.04 0.09 0.05 0.00
Net realized gains 0.87 0.07 0.00 0.00 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 0.87 0.11 0.09 0.05 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $13.48 $10.79 $8.93 $7.50 $7.64
====================================================================================================================================
TOTAL RETURN (a) 35.23% 22.30% 20.50% (1.10%) 1.87%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $46,035 $33,318 $14,450 $7,970 $529
Ratios to average net assets:
Net investment income* (0.12%) 0.23% 0.94% 1.09% (1.07%)
Expenses* 2.05% 2.10% 2.10% 2.10% 2.04%
Gross Expenses* 2.07% 2.40% 3.18% 4.02% 6.38%
Portfolio turnover rate 131% 100% 27% 15% 6%
Average brokerage commissions (b) $.046 $.050 N/A N/A N/A
</TABLE>
- ----------
See Notes to Financial Highlights on page 71 and Notes to Financial Statements
65
<PAGE>
FINANCIAL HIGHLIGHTS
SELECTED DATA BASED ON A SHARE OUTSTANDING THROUGHOUT THE PERIOD(S) INDICATED
<TABLE>
<CAPTION>
GE STRATEGIC INVESTMENT FUND
- --------------------------------------------------------------------------------
CLASS A CLASS B
9/30/97(c) 9/31/96(c) 9/30/95(c) 9/30/94(d) 9/30/97(c) 9/30/96(c) 9/30/95(c) 9/30/94
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INCEPTION DATE -- -- -- 12/22/93 -- -- -- 12/22/93
Net asset value, beginning of period $20.33 $18.43 $15.71 $16.21 $20.04 $18.26 $15.62 $16.14
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.53 0.51 0.52 0.48 0.42 0.41 0.40 0.27
Net realized and unrealized
gains (losses) on investments 3.87 1.90 2.57 (0.65) 3.82 1.87 2.58 (0.46)
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
INVESTMENT OPERATIONS 4.40 2.41 3.09 (0.17) 4.24 2.28 2.98 (0.19)
- ------------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income 0.47 0.43 0.37 0.27 0.33 0.42 0.34 0.27
Net realized gains 0.25 0.08 0.00 0.06 0.25 0.08 0.00 0.06
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 0.72 0.51 0.37 0.33 0.58 0.50 0.34 0.33
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $24.01 $20.33 $18.43 $15.71 $23.70 $20.04 $18.26 $15.62
====================================================================================================================================
TOTAL RETURN (a) 22.16% 13.35% 20.12% (1.32%) 21.57% 12.73% 19.53% (1.25%)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $39,731 $25,232 $8,778 $1,104 $5,685 $3,701 $882 $150
Ratios to average net assets:
Net investment income* 2.42% 2.60% 2.95% 2.59% 1.92% 2.11% 2.46% 1.92%
Expenses* 1.15% 1.12% 1.15% 1.15% 1.65% 1.65% 1.65% 1.65%
Gross Expenses* 1.15% 1.15% 1.19% 1.58% 1.93% 2.10% 3.50% 2.08%
Portfolio turnover rate 106% 93% 98% 68% 106% 93% 98% 68%
Average brokerage commissions (b) $.027 $.046 N/A N/A $.027 $.046 N/A N/A
- ------------------------------------------------------------------------------------------------------------------------------------
CLASS C CLASS D
9/30/97(c) 9/30/96(c) 9/30/95(c) 9/30/94 9/30/93(e) 9/30/97(c) 9/30/96(c) 9/30/95 9/30/94
- ------------------------------------------------------------------------------------------------------------------------------------
INCEPTION DATE -- -- -- -- 1/5/93 -- -- -- 11/29/93
Net asset value,
beginning of period $20.38 $18.46 $15.72 $16.08 $15.00 $20.44 $18.49 $15.74 $16.02
INCOME (LOSS) FROM
INVESTMENT OPERATIONS:
Net investment income 0.59 0.54 0.53 0.44 0.23 0.64 0.63 0.55 0.45
Net realized and unrealized
gains (losses) on investments 3.88 1.92 2.59 (0.48) 0.85 3.89 1.90 2.62 (0.40)
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
INVESTMENT OPERATIONS 4.47 2.46 3.12 (0.04) 1.08 4.53 2.53 3.17 0.05
- ------------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income 0.49 0.46 0.38 0.26 0.00 0.56 0.50 0.42 0.27
Net realized gains 0.25 0.08 0.00 0.06 0.00 0.25 0.08 0.00 0.06
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 0.74 0.54 0.38 0.32 0.00 0.81 0.58 0.42 0.33
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $24.11 $20.38 $18.46 $15.72 $16.08 $24.16 $20.44 $18.49 $15.74
====================================================================================================================================
TOTAL RETURN (a) 22.45% 13.58% 20.35% (0.27%) 8.06% 22.76% 13.95% 20.70% 0.25%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $40,516 $26,467 $17,821 $13,018 $12,780 $37,924 $36,162 $18,665 $17,159
Ratios to average net assets:
Net investment income* 2.66% 2.81% 3.21% 2.62% 2.68% 2.90% 3.16% 3.46% 2.93%
Expenses* 0.90% 0.90% 0.90% 0.85% 0.65% 0.65% 0.58% 0.65% 0.65%
Gross Expenses* 0.94% 1.05% 1.03% 1.33% 1.65% 0.65% 0.59% 0.97% 1.08%
Portfolio turnover rate 106% 93% 98% 68% 20% 106% 93% 98% 68%
Average brokerage
commissions (b) $.027 $.046 N/A N/A N/A $.027 $.046 N/A N/A
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
See Notes to Financial Highlights on page 71 and Notes to Financial Statements
66
<PAGE>
FINANCIAL HIGHLIGHTS
SELECTED DATA BASED ON A SHARE OUTSTANDING THROUGHOUT THE PERIOD(S) INDICATED
<TABLE>
<CAPTION>
GE TAX-EXEMPT FUND
- ------------------------------------------------------------------------------------------------------------------------------------
CLASS A CLASS B
9/30/97(f) 10/31/96 10/31/95 10/31/94 10/31/93 9/30/97(f) 10/31/96 10/31/95 10/31/94 10/31/93
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INCEPTION DATE -- -- -- -- 9/8/93 -- -- -- -- 9/8/93
Net asset value,
beginning of period $11.42 $11.31 $10.59 $11.48 $11.50 $11.44 $11.32 $10.60 $11.48 $11.50
INCOME (LOSS) FROM
INVESTMENT OPERATIONS:
Net investment income 0.53 0.62 0.55 0.45 0.05 0.51 0.62 0.55 0.43 0.06
Net realized and unrealized
gains (losses) on investments 0.22 0.05 0.73 (0.78) 0.01 0.21 0.06 0.73 (0.82) (0.01)
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
INVESTMENT OPERATIONS 0.75 0.67 1.28 (0.33) 0.06 0.72 0.68 1.28 (0.39) 0.05
- ------------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income 0.54 0.56 0.56 0.56 0.07 0.53 0.56 0.56 0.49 0.06
Net realized gains 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Return of Capital 0.00 0.00 0.00 0.00 0.01 0.00 0.00 0.00 0.00 0.01
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 0.54 0.56 0.56 0.56 0.08 0.53 0.56 0.56 0.49 0.07
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $11.63 $11.42 $11.31 $10.59 $11.48 $11.63 $11.44 $11.32 $10.60 $11.48
===================================================================================================================================
TOTAL RETURN (a) 6.77% 6.13% 12.24% (2.99%) 0.54% 6.46% 6.12% 12.33% (3.45%) 0.43%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $16,542 $16,169 $16,025 $14,283 $15,136 $10,133 $9,184 $7,668 $4,990 $1,202
Ratios to average net assets:
Net investment income* 5.01% 5.42% 5.01% 4.08% 2.73% 4.79% 5.43% 5.01% 3.75% 2.27%
Expenses* 0.35% 0.00% 0.00% 0.77% 1.15% 0.57% 0.00% 0.00% 1.14% 1.84%
Gross Expenses* 1.57% 1.52% 1.81% 1.62% 2.09% 2.32% 2.26% 2.56% 2.30% 2.48%
Portfolio turnover rate 13% 6% 25% 0% 0% 13% 6% 25% 0% 0%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CLASS C CLASS D
9/30/97(g) 9/30/97(g)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCEPTION DATE 9/26/97* 9/26/97*
Net asset value, beginning of period 12.08 12.09
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.02 0.02
Net realized and unrealized gains (losses) on investments 0.00 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM INVESTMENT OPERATIONS 0.02 0.02
- ------------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income 0.01 0.01
Net realized gains 0.00 0.00
Return of Capital 0.00 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 0.01 0.01
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD 12.09 12.10
====================================================================================================================================
TOTAL RETURN (a) 0.11% 0.11%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $8,032 $3,216
Ratios to average net assets:
Net investment income* 4.04% 4.31%
Expenses* 0.74% 0.54%
Gross Expenses* 0.76% 0.56%
Portfolio turnover rate 13% 13%
</TABLE>
- ----------
See Notes to Financial Highlights on page 71 and Notes to Financial Statements
67
<PAGE>
FINANCIAL HIGHLIGHTS
SELECTED DATA BASED ON A SHARE OUTSTANDING THROUGHOUT THE PERIOD(S) INDICATED
<TABLE>
<CAPTION>
GE FIXED INCOME FUND
- ------------------------------------------------------------------------------------------------------------------------------------
CLASS A CLASS B
9/30/97 9/30/96 9/30/95 9/30/94(d) 9/30/97 9/30/96 9/30/95 9/30/94
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INCEPTION DATE -- -- -- 12/22/93 -- -- -- 12/22/93
Net asset value, beginning of period $11.69 $11.91 $11.27 $12.19 $11.70 $11.91 $11.26 $12.15
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.69 0.65 0.73 0.47 0.63 0.60 0.65 0.42
Net realized and unrealized
gains (losses) on investments 0.35 (0.19) 0.63 (0.84) 0.36 (0.20) 0.66 (0.81)
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
INVESTMENT OPERATIONS 1.04 0.46 1.36 (0.37) 0.99 0.40 1.31 (0.39)
- ------------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income 0.68 0.68 0.72 0.47 0.63 0.61 0.66 0.42
Net realized gains 0.00 0.00 0.00 0.08 0.00 0.00 0.00 0.08
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 0.68 0.68 0.72 0.55 0.63 0.61 0.66 0.50
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $12.05 $11.69 $11.91 $11.27 $12.06 $11.70 $11.91 $11.26
====================================================================================================================================
TOTAL RETURN (a) 9.19% 3.91% 12.48% (3.02%) 8.64% 3.41% 11.98% (3.31%)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $18,617 $15,653 $5,400 $26,023 $1,401 $1,673 $234 $65
Ratios to average net assets:
Net investment income* 5.81% 5.66% 6.22% 5.37% 5.17% 5.19% 5.57% 4.83%
Expenses* 1.09% 1.05% 1.08% 1.10% 1.56% 1.60% 1.60% 1.58%
Gross Expenses* 1.14% 1.12% 1.18% 1.51% 2.19% 2.44% 3.50% 2.01%
Portfolio turnover rate 258% 275% 315% 298% 258% 275% 315% 298%
- ------------------------------------------------------------------------------------------------------------------------------------
CLASS C CLASS D
9/30/97 9/30/96 9/30/95 9/30/94 9/30/93(e) 9/30/97 9/30/96 9/30/95 9/30/94
- ------------------------------------------------------------------------------------------------------------------------------------
INCEPTION DATE -- -- -- -- 1/5/93 -- -- -- 11/29/93
Net asset value,
beginning of period $11.70 $11.92 $11.27 $12.31 $12.00 $11.69 $11.92 $11.27 $12.17
INCOME (LOSS) FROM
INVESTMENT OPERATIONS:
Net investment income 0.72 0.69 0.73 0.61 0.36 0.75 0.72 0.77 0.55
Net realized and unrealized
gains (losses) on investments 0.35 (0.21) 0.67 (0.96) 0.31 0.35 (0.22) 0.65 (0.83)
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
INVESTMENT OPERATIONS 1.07 0.48 1.40 (0.35) 0.67 1.10 0.50 1.42 (0.28)
- ------------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income 0.71 0.70 0.75 0.61 0.36 0.74 0.73 0.77 0.54
Net realized gains 0.00 0.00 0.00 0.08 0.00 0.00 0.00 0.00 0.08
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 0.71 0.70 0.75 0.69 0.36 0.74 0.73 0.77 0.62
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $12.06 $11.70 $11.92 $11.27 $12.31 $12.05 $11.69 $11.92 $11.27
====================================================================================================================================
TOTAL RETURN (a) 9.45% 4.10% 12.81% (2.97%) 5.24% 9.74% 4.32% 13.10% (2.34%)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $35,097 $28,115 $21,401 $13,600 $11,485 $16,229 $19,098 $6,642 $2,732
Ratios to
average net assets:
Net investment income* 6.17% 5.84% 6.37% 5.22% 3.87% 5.97% 6.14% 6.57% 5.40%
Expense* 0.85% 0.85% 0.85% 0.79% 0.60% 0.56% 0.55% 0.59% 0.58%
Gross Expenses* 0.96% 0.99% 0.95% 1.26% 1.63% 0.59% 0.57% 2.50% 1.01%
Portfolio turnover rate 258% 275% 315% 298% 68% 258% 275% 315% 298%
</TABLE>
- ----------
See Notes to Financial Highlights on page 71 and Notes to Financial Statements
68
<PAGE>
FINANCIAL HIGHLIGHTS
SELECTED DATA BASED ON A SHARE OUTSTANDING THROUGHOUT THE PERIOD(S) INDICATED
<TABLE>
<CAPTION>
GE GOVERNMENT SECURITIES FUND
- ------------------------------------------------------------------------------------------------------------------------------------
CLASS A
9/30/97(f) 10/31/96 10/31/95 10/31/94 10/31/93
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INCEPTION DATE -- -- -- -- 9/8/93
Net asset value, beginning of period $8.48 $8.70 $8.43 $10.14 $10.32
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.53 0.62 0.58 0.70 0.12
Net realized and unrealized
gains (losses) on investments 0.05 (0.22) 0.38 (1.60) (0.18)
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM INVESTMENT OPERATIONS 0.58 0.40 0.96 (0.90) (0.06)
- ------------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income 0.53 0.54 0.58 0.70 0.12
Net realized gains 0.00 0.00 0.00 0.03 0.00
Return of Capital 0.00 0.08 0.11 0.08 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 0.53 0.62 0.69 0.81 0.12
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $8.53 $8.48 $8.70 $8.43 $10.14
====================================================================================================================================
TOTAL RETURN (a) 7.13% 4.80% 11.77% (9.17%) (0.60%)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $24,027 $29,090 $26,889 $21,498 $1,470
Ratios to average net assets:
Net investment income* 6.91% 6.59% 6.78% 7.09% 6.81%
Expenses* 0.88% 0.90% 1.01% 0.99% 0.95%
Gross Expenses* 0.88% 0.90% 1.01% 0.99% 0.95%
Portfolio turnover rate 110% 334% 316% 129% 76%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CLASS B
9/30/97(f) 10/31/96 10/31/95 10/31/94 10/31/93
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INCEPTION DATE -- -- -- -- 4/22/87
Net asset value, beginning of period $8.49 $8.71 $8.42 $10.14 $9.95
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.47 0.55 0.51 0.60 0.71
Net realized and unrealized
gains (losses) on investments 0.05 (0.22) 0.41 (1.58) 0.20
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
INVESTMENT OPERATIONS 0.52 0.33 0.92 (0.98) 0.91
- ------------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income 0.47 0.48 0.52 0.60 0.72
Net realized gains 0.00 0.00 0.00 0.03 0.00
Return of Capital 0.00 0.07 0.11 0.11 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 0.47 0.55 0.63 0.74 0.72
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $8.54 $8.49 $8.71 $8.42 $10.14
====================================================================================================================================
TOTAL RETURN (a) 6.36% 4.00% 11.19% (9.98%) 9.48%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $523,303 $767,216 $1,112,254 $1,252,348 $1,342,597
Ratios to average net assets:
Net investment income* 6.15% 5.77% 6.08% 6.45% 6.96%
Expenses* 1.63% 1.69% 1.76% 1.76% 1.73%
Gross Expenses* 1.63% 1.69% 1.76% 1.76% 1.73%
Portfolio turnover rate 110% 334% 316% 129% 76%
</TABLE>
- ----------
See Notes to Financial Highlights on page 71 and Notes to Financial Statements
69
<PAGE>
FINANCIAL HIGHLIGHTS
SELECTED DATA BASED ON A SHARE OUTSTANDING THROUGHOUT THE PERIOD(S) INDICATED
<TABLE>
<CAPTION>
GE SHORT-TERM GOVERNMENT FUND
- ------------------------------------------------------------------------------------------------------------------------------------
CLASS A CLASS B
9/30/97 9/30/96 9/30/95 9/30/94 9/30/97 9/30/96 9/30/95 9/30/94
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INCEPTION DATE -- -- -- 3/2/94 -- -- -- 3/2/94
Net asset value, beginning of period $11.78 $11.91 $11.72 $12.00 $11.78 $11.90 $11.72 $12.00
INCOME (LOSS) FROM
INVESTMENT OPERATIONS:
Net investment income 0.65 0.60 0.64 0.35 0.61 0.56 0.59 0.33
Net realized and unrealized
gains (losses) on investments 0.07 (0.06) 0.21 (0.30) 0.06 (0.05) 0.21 (0.31)
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME FROM
INVESTMENT OPERATIONS 0.72 0.54 0.85 0.05 0.67 0.51 0.80 0.02
- ------------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income 0.64 0.61 0.66 0.33 0.60 0.57 0.62 0.30
Net realized gains 0.01 0.06 0.00 0.00 0.01 0.06 0.00 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 0.65 0.67 0.66 0.33 0.61 0.63 0.62 0.30
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $11.85 $11.78 $11.91 $11.72 $11.84 $11.78 $11.90 $11.72
====================================================================================================================================
TOTAL RETURN (a) 6.30% 4.63% 7.48% 0.40% 5.84% 4.35% 7.01% 0.20%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $7,298 $340 $285 $35 $1,031 $145 $83 $25
Ratios to average net assets:
Net investment income* 5.24% 5.04% 5.27% 4.75% 4.84% 4.67% 5.07% 4.38%
Expenses* 0.95% 0.95% 0.95% 0.95% 1.30% 1.30% 1.30% 1.30%
Gross Expenses* 2.19% 3.00% 3.00% 1.71% 7.77% 3.35% 3.35% 2.06%
Portfolio turnover rate 265% 201% 415% 146% 265% 201% 415% 146%
- ------------------------------------------------------------------------------------------------------------------------------------
CLASS C CLASS D
9/30/97 9/30/96 9/30/95 9/30/94 9/30/97 9/30/96 9/30/95 9/30/94
- ------------------------------------------------------------------------------------------------------------------------------------
INCEPTION DATE -- -- -- 3/2/94 -- -- -- 3/2/94
Net asset value, beginning of period $11.79 $11.91 $11.72 $12.00 $11.78 $11.90 $11.72 $12.00
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.67 0.63 0.66 0.36 0.70 0.66 0.69 0.39
Net realized and unrealized
gains (losses) on investments 0.08 (0.05) 0.22 (0.30) 0.08 (0.05) 0.21 (0.31)
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME FROM INVESTMENT OPERATIONS 0.75 0.58 0.88 0.06 0.78 0.61 0.90 0.08
- ------------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income 0.67 0.64 0.69 0.34 0.70 0.67 0.72 0.36
Net realized gains 0.01 0.06 0.00 0.00 0.01 0.06 0.00 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 0.68 0.70 0.69 0.34 0.71 0.73 0.72 0.36
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $11.86 $11.79 $11.91 $11.72 $11.85 $11.78 $11.90 $11.72
====================================================================================================================================
TOTAL RETURN (a) 6.57% 4.98% 7.74% 0.53% 6.83% 5.24% 7.92% 0.69%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $5,319 $3,653 $2,437 $287 $7,717 $7,786 $8,048 $7,822
Ratios to average net assets:
Net investment income* 5.57% 5.28% 5.62% 5.18% 5.80% 5.54% 5.89% 5.32%
Expenses* 0.70% 0.70% 0.70% 0.70% 0.45% 0.45% 0.45% 0.45%
Gross Expenses* 1.07% 1.34% 1.84% 1.46% 0.68% 0.83% 0.98% 1.21%
Portfolio turnover rate 265% 201% 415% 146% 265% 201% 415% 146%
</TABLE>
- ----------
See Notes to Financial Highlights on page 71 and Notes to Financial Statements
70
<PAGE>
FINANCIAL HIGHLIGHTS
SELECTED DATA BASED ON A SHARE OUTSTANDING THROUGHOUT THE PERIOD(S) INDICATED
<TABLE>
<CAPTION>
GE MONEY MARKET FUND
9/30/97 9/30/96 9/30/95 9/30/94 9/30/93(e)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INCEPTION DATE -- -- -- -- 1/5/93
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.05 0.05 0.05 0.03 0.02
Net realized and unrealized
gains (losses) on investments 0.00 0.00 0.00 0.00 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME FROM INVESTMENT OPERATIONS 0.05 0.05 0.05 0.03 0.02
- ------------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income 0.05 0.05 0.05 0.03 0.02
Net realized gains 0.00 0.00 0.00 0.00 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 0.05 0.05 0.05 0.03 0.02
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00
====================================================================================================================================
TOTAL RETURN (a) 5.14% 5.18% 5.52% 3.31% 1.64%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $114,030 $85,842 $71,664 $53,607 $17,197
Ratios to average net assets:
Net investment income* 5.04% 5.06% 5.32% 3.41% 2.27%
Expenses* 0.47% 0.45% 0.45% 0.45% 0.45%
Gross Expenses* 0.56% 0.66% 0.70% 1.04% 1.48%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTES TO FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
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 Adviser not absorbed a portion of expenses, total return would have
been lower. Periods less than one year are not annualized.
(b) 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. Mark-ups, mark-downs and spreads on shares
traded on a principal basis are not included unless they are disclosed on
confirmations prepared in accordance with rule 10b-10 under the 1934 Act.
(c) Per share data is based on average shares outstanding during the period.
(d) 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.
(e) 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.
(f) For the period November 1, 1996 thru September 30, 1997. See Note 9 in the
Notes to Financial Statements for further information.
(g) For the period September 27, 1997 thru September 30, 1997. See Note 9 in
the Notes to Financial Statements for further information.
(h) For the period December 31, 1997, (commencement of operations) thru
September 30, 1997.
* Annualized for periods less than one year.
- ----------
See Notes to Financial Statements
71
<PAGE>
<TABLE>
<CAPTION>
GE GE GE GE
STATEMENTS OF ASSETS INTERNATIONAL GLOBAL PREMIER GROWTH U.S.
AND LIABILITIES SEPTEMBER 30, 1997 EQUITY EQUITY EQUITY EQUITY
FUND FUND FUND FUND
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Investments in securities, at market (cost
$76,690,813; $49,865,094; $11,799,088;
$271,962,360; $39,682,462; $49,917,601;
$85,050,810; $35,483,088; $66,079,654;
$534,297,400; $20,352,979; and $0,
respectively) $94,886,945 $58,659,708 $13,941,136 $377,222,531
Short term investments (at amortized cost) 2,720,445 1,134,417 1,058,177 13,406,880
Cash 26,981 10,767 3,725 8,197
Foreign currency (cost $842,083; $478,869;
$0; $12,924; $0; $0; $308,046; $0; $678;
$0; $0 and $0, respectively) 837,449 463,503 -- 13,050
Receivable for investments sold 1,148,371 730,826 -- 975,715
Income receivables 236,638 120,418 10,242 529,704
Receivable for fund shares sold 170,989 102,025 98,200 681,552
Receivable on forward foreign currency contracts -- -- -- --
Receivable from advisor -- -- -- --
Deferred organizational costs 29,951 7,394 12,001 11,608
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 100,057,769 61,229,058 15,123,481 392,849,237
- ------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Options written, at market
(Premium received $0; $0; $0; $0;
$0; $0; $1,817; $0; $5,267; $0; $0;
and $0, respectively) -- -- -- --
Distributions payable to shareholders -- -- -- --
Payable for investments purchased 969,044 997,542 188,160 1,865,404
Payable for fund shares repurchased 3,565 7,373 13,222 17,717
Payable to GEIM 109,854 60,989 22,661 171,832
Variation margin payable -- -- -- 35,825
Payable to custodian -- -- -- --
Payable on forward foreign currency contracts -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 1,082,463 1,065,904 224,043 2,090,778
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $98,975,306 $60,163,154 $14,899,438 $390,758,459
====================================================================================================================================
NET ASSETS CONSIST OF:
Capital paid in $78,323,151 $45,973,753 $12,605,290 $252,921,025
Undistributed (overdistributed)
net investment income (15,699) (20,833) 11,168 3,003,982
Accumulated net realized gain (loss) 2,483,455 5,426,563 140,932 29,559,315
Net unrealized appreciation / (depreciation) on:
Investments 18,196,132 8,794,614 2,142,048 105,260,171
Futures -- -- -- 13,976
Written options -- -- -- --
Foreign currency transactions (11,733) (10,943) -- (10)
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $98,975,306 $60,163,154 $14,899,438 $390,758,459
====================================================================================================================================
CLASS A:
Net assets $ 17,270,200 $ 1,524,066 $ 1,394,657 $ 65,535,303
Shares outstanding ($.001 par value) 852,369 61,936 76,151 2,226,520
Net asset value per share $20.26 $24.61 $18.31 $29.43
Maximum offering price per share $21.50 $26.11 $19.43 $31.23
CLASS B:
Net assets $ 455,253 $ 876,764 $ 447,630 $ 14,380,310
Shares outstanding ($.001 par value) 22,739 36,044 24,530 507,322
Net asset value per share* $20.02 $24.32 $18.25 $28.35
CLASS C:
Net assets $ 6,152,320 $ 35,120,436 $ 7,286,809 $ 97,886,104
Shares outstanding ($.001 par value) 302,231 1,415,576 397,065 3,375,373
Net asset value per share $20.36 $24.81 $18.35 $29.00
CLASS D:
Net assets $ 75,097,533 $ 22,641,888 $ 5,770,342 $212,956,742
Shares outstanding ($.001 par value) 3,676,464 912,046 313,891 7,346,677
Net asset value per share $20.43 $24.83 $18.38 $28.99
</TABLE>
72
<PAGE>
<TABLE>
<CAPTION>
GE GE GE GE GE GE GE GE
MID-CAP VALUE STRATEGIC TAX- FIXED GOVERNMENT SHORT-TERM MONEY
GROWTH EQUITY INVESTMENT EXEMPT INCOME SECURITIES GOVERNMENT MARKET
FUND FUND FUND FUND FUND FUND FUND FUND**
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$40,948,176 $53,316,503 $110,851,268 $36,837,336 $67,053,834 $542,121,030 $20,524,520 $ --
683,163 75,959 13,155,000 400,002 6,822,122 24,000,000 824,675 113,911,817
-- 5,144 12,171 60,761 5,125 533,292 -- 19,251
-- -- 307,835 -- 695 -- -- --
37,792,272 41,844,187 2,002,676 -- 3,854,971 6,163,757 2,486,602 --
21,216 39,158 596,445 686,471 859,554 9,712,951 220,415 218,349
26,693 12,711 352,851 2,068 96,816 31,669 1,019,491 217,066
-- -- -- -- 786 -- -- --
9,864 2,377 -- 13,459 -- -- 118,002 --
5,228 5,269 7,394 5,215 8,798 -- 29,951 5,987
- ------------------------------------------------------------------------------------------------------------------------------------
79,486,612 95,301,308 127,285,640 38,005,312 78,702,701 582,562,699 25,223,656 114,372,470
- ------------------------------------------------------------------------------------------------------------------------------------
-- -- 76 -- 366 -- -- --
-- -- -- 21,294 59,246 417,465 11,894 79,984
36,016,528 40,375,106 3,178,153 -- 7,211,580 33,026,780 2,739,851 --
224,875 562,343 179,307 8,788 8,306 854,574 972,996 211,394
78,858 88,949 72,275 51,752 40,687 933,514 120,153 51,548
-- 3,625 -- -- -- -- -- --
974 -- -- -- -- -- 13,936 --
-- -- -- -- 38,666 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
36,321,235 41,030,023 3,429,811 81,834 7,358,851 35,232,333 3,858,830 342,926
- ------------------------------------------------------------------------------------------------------------------------------------
$43,165,377 $54,271,285 $123,855,829 $37,923,478 $71,343,850 $547,330,366 $21,364,826 $114,029,544
====================================================================================================================================
$23,539,076 $34,685,341 $92,350,054 $37,238,036 $73,303,541 $737,002,729 $21,321,103 $113,983,606
-- -- 2,080,037 73,800 149,640 (417,464) 13,243 55,271
18,360,587 16,190,667 3,625,585 (742,606) (3,051,714) (197,078,529) (141,061) (9,333)
1,265,714 3,398,902 25,800,458 1,354,248 974,180 7,823,630 171,541 --
-- (3,625) -- -- -- -- -- --
-- -- 1,741 -- 4,901 -- -- --
-- -- (2,046) -- (36,698) -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
$43,165,377 $54,271,285 $123,855,829 $37,923,478 $71,343,850 $547,330,366 $21,364,826 $114,029,544
====================================================================================================================================
$10,885,129 $8,235,654 $39,731,391 $16,542,094 $18,617,354 $24,026,926 $7,297,620 $ --
617,990 606,475 1,654,873 1,422,736 1,545,228 2,816,228 615,946 --
$17.61 $13.58 $24.01 $11.63 $12.05 $8.53 $11.85 $ --
$18.68 $14.41 $25.47 $12.15 $12.58 $8.91 $12.15 $ --
$32,280,248 $46,035,631 $5,685,327 $10,133,156 $1,400,804 $523,303,440 $1,030,684 $ --
1,886,746 3,415,776 239,866 871,100 116,109 61,257,501 87,041 --
$17.11 $13.48 $23.70 $11.63 $12.06 $8.54 $11.84 $ --
$ -- $ -- $40,515,719 $ 8,031,699 $35,096,661 $ -- $5,318,948 $114,029,544
-- -- 1,680,320 664,062 2,910,185 -- 448,619 114,040,782
$ -- $ -- $24.11 $12.09 $12.06 $ -- $11.86 $1.00
$ -- $ -- $37,923,392 $ 3,216,529 $16,229,031 $ -- $7,717,574 $ --
-- -- 1,569,790 265,902 1,346,296 -- 651,526 --
$ -- $ -- $24.16 $12.10 $12.05 $ -- $11.85 $ --
</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
73
<PAGE>
<TABLE>
<CAPTION>
GE GE GE GE
STATEMENTS OF OPERATIONS INTERNATIONAL GLOBAL PREMIER GROWTH U.S.
FOR THE YEAR ENDED SEPTEMBER 30, 1997 EQUITY EQUITY EQUITY EQUITY
FUND FUND FUND* FUND
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
INCOME:
Dividends $ 1,551,008 $ 800,251 $ 40,783 $ 5,093,587
Interest 149,157 79,056 45,286 847,548
Less: Foreign taxes withheld (179,845) (72,074) (993) (41,370)
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INCOME 1,520,320 807,233 85,076 5,899,765
- ------------------------------------------------------------------------------------------------------------------------------------
EXPENSES:
Advisory and administration fees 682,857 382,192 43,759 1,218,687
Distribution fees
Class A 60,617 4,981 2,126 202,704
Class B 3,508 7,247 1,553 102,986
Class C 11,964 79,385 7,416 181,208
Blue Sky fees
Class A 8,259 8,269 7,500 13,164
Class B 5,106 6,061 7,500 8,650
Class C 5,841 12,977 7,500 14,384
Class D 19,081 8,703 7,500 30,891
Transfer agent fees
Class A 14,902 8,957 4,270 32,871
Class B 2,642 4,492 4,050 30,390
Class C 14,198 88,445 7,791 123,176
Class D 48,720 30,419 3,944 16,548
Trustees' fees 4,500 2,600 898 14,063
Custody and accounting expenses 9,472 5,472 1,888 29,608
Professional fees 43,453 25,103 8,660 135,826
Registration expenses 6,402 3,698 1,276 20,015
Amortization of deferred organization
expense 18,345 19,403 2,999 30,017
Other expenses 15,694 9,070 3,126 49,065
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES BEFORE WAIVER 975,561 707,474 123,756 2,254,253
Less: Expenses waived or borne by
the Adviser (18,715) (54,856) (46,849) (246,852)
-----------------------------------------------------------------------------------------------------------------------------------
Net expenses 956,846 652,618 76,907 2,007,401
- ------------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME/LOSS 563,474 154,615 8,169 3,892,364
====================================================================================================================================
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS Realized gain (loss) on:
Investments 2,555,689 5,517,335 140,932 28,260,315
Futures -- -- -- 3,752,573
Written options -- -- -- 1,401
Foreign currency transactions (205,476) (101,255) -- (6,369)
Increase (decrease) in unrealized
appreciation/depreciation on:
Investments 12,459,093 3,313,041 2,142,048 66,610,471
Futures -- -- -- (105,124)
Written options -- -- -- --
Foreign currency transactions (4,434) (10,261) -- (115)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain
(loss) on investments 14,804,872 8,718,860 2,282,980 98,513,152
- ------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 15,368,346 $ 8,873,475 $ 2,291,149 $ 102,405,516
====================================================================================================================================
</TABLE>
74
<PAGE>
<TABLE>
<CAPTION>
GE GE GE GE GE GE GE GE
MID-CAP VALUE STRATEGIC TAX- FIXED GOVERNMENT SHORT-TERM MONEY
GROWTH EQUITY INVESTMENT EXEMPT INCOME SECURITIES GOVERNMENT MARKET
FUND** FUND** FUND FUND** FUND FUND** FUND FUND***
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C>
$ 202,693 $ 843,605 $ 975,837 $ -- $ 61,206 $ -- $ -- $ --
82,070 16,230 2,813,829 1,251,199 4,355,043 46,740,540 825,242 5,560,222
(151) -- (40,907) -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
284,612 859,835 3,748,759 1,251,199 4,416,249 46,740,540 825,242 5,560,222
- ------------------------------------------------------------------------------------------------------------------------------------
284,613 355,773 368,324 134,141 227,295 3,816,594 33,016 252,319
3,691 2,738 158,823 21,314 76,930 2,871 3,616 --
216,103 300,013 45,882 74,608 15,272 4,382,646 928 --
-- -- 83,574 376 78,411 -- 11,737 --
-- -- 12,620 130 10,687 -- 6,633 --
-- -- 7,199 80 6,824 -- 5,229 --
-- -- 10,761 61 11,393 -- 7,247 31,932
-- -- 13,779 24 10,226 -- 9,627 --
17,511 11,228 48,163 33,286 10,227 31,189 1,746 --
56,669 66,044 14,406 18,716 4,330 696,810 1,728 --
-- -- 64,861 40 48,667 -- 6,113 178,737
-- -- 53,057 78 9,819 -- 982 --
926 1,230 5,481 674 3,861 16,415 713 5,138
73,744 62,206 11,537 88,354 8,128 250,000 1,505 10,815
6,686 7,816 52,922 4,679 37,289 129,973 6,899 49,618
23,007 24,176 7,797 26,403 5,494 24,116 1,027 7,310
17,701 17,660 19,404 17,714 22,941 -- 18,344 15,866
24,517 25,274 19,113 7,926 13,469 244,798 9,095 17,924
- ------------------------------------------------------------------------------------------------------------------------------------
725,168 874,158 997,703 428,604 601,263 9,595,412 126,185 569,659
(53,838) (10,220) (25,481) (328,943) (55,467) -- (50,448) (91,356)
- ------------------------------------------------------------------------------------------------------------------------------------
671,330 863,938 972,222 99,661 545,796 9,595,412 75,737 478,303
- ------------------------------------------------------------------------------------------------------------------------------------
(386,718) (4,103) 2,776,537 1,151,538 3,870,453 37,145,128 749,505 5,081,919
====================================================================================================================================
19,179,275 16,217,779 3,724,004 (55,544) 728,840 4,140,176 44,179 (474)
-- -- 994 -- 1,988 (863,489) -- --
-- -- 3,566 -- 6,987 -- -- --
-- -- (31,889) -- 256,449 -- -- --
(7,395,902) (1,646,215) 14,813,358 550,991 1,090,276 (2,164,636) 49,129 --
-- (3,625) -- -- -- 882,598 -- --
-- -- 1,741 -- 4,901 (94,744) -- --
-- -- (1,340) -- (45,926) -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
11,783,373 14,567,939 18,510,434 495,447 2,043,515 1,899,905 93,308 (474)
- ------------------------------------------------------------------------------------------------------------------------------------
$ 11,396,655 $ 14,563,836 $ 21,286,971 $ 1,646,985 $ 5,913,968 $ 39,045,033 $ 842,813 $ 5,081,445
====================================================================================================================================
</TABLE>
- ----------
* For the period December 31, 1996 (inception) thru September 30, 1997.
** For the period November 1, 1996 thru September 30, 1997. See Note 9 of the
Notes to Financial Statements for further information.
*** GE Money Market Fund is a no load fund offering only one class of shares to
all investors.
- ----------
See Notes to Financial Statements
75
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
GE GE GE GE GE
STATEMENTS OF CHANGES INTERNATIONAL GLOBAL PREMIER GROWTH U.S. MID-CAP
IN NET ASSETS EQUITY EQUITY EQUITY EQUITY GROWTH
FUND FUND FUND* FUND FUND**
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended Period Ended Year Ended Year Ended Period Ended Year Ended
September September September September September September September September October
30, 1997 30, 1996 30, 1997 30, 1996 30, 1997 30, 1997 30, 1996 30, 1997 31, 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INCREASE IN
NET ASSETS
OPERATIONS:
Net investment
income/loss $ 563,474 $ 536,695 $ 154,615 $ 137,419 $ 8,169 $ 3,892,364 $ 3,718,848 $ (386,718) $ (153,238)
Net realized gain
(loss) on
investments,
futures, written
options, and
foreign currency
transactions 2,350,213 2,070,867 5,416,080 2,565,385 140,932 32,007,920 21,400,380 19,179,275 (243,412)
Net increase
(decrease)
in unrealized
appreciation/
depreciation 12,454,659 3,637,837 3,302,780 1,437,616 2,142,048 66,505,232 10,460,359 (7,395,902) 4,436,873
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase
(decrease)
from
operations 15,368,346 6,245,399 8,873,475 4,140,420 2,291,149 102,405,516 35,579,587 11,396,655 4,040,223
- ------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment
income
Class A (31,255) (6,640) -- (2,429) -- (332,785) (262,767) -- --
Class B -- -- -- -- -- (58,927) (33,028) -- --
Class C (6,212) (5,998) (75,298) (47,344) -- (758,606) (515,508) -- --
Class D (492,285) (206,019) (111,661) (29,722) -- (2,607,415) (2,441,173) -- --
Paid in excess
Class A -- -- -- -- -- -- -- -- --
Class B -- -- -- -- -- -- -- -- --
Tax return of
capital
Class A -- -- -- -- -- -- -- -- --
Class B -- -- -- -- -- -- -- -- --
Net realized
gains
Class A (262,419) -- (41,620) (54,657) -- (2,630,802) (220,116) -- --
Class B (8,157) -- (36,858) (7,141) -- (765,822) (29,002) -- --
Class C (106,194) -- (1,688,506) (439,601) -- (5,196,483) (397,494) -- --
Class D (1,792,954) -- (832,366) (126,339) -- (14,080,728) (1,698,965) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL
DISTRIBUTIONS (2,699,476) (218,657) (2,786,309) (707,233) -- (26,431,568) (5,598,053) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Increase
(decrease) in
net assets
from operations
and
distributions 12,668,870 6,026,742 6,087,166 3,433,187 2,291,149 75,973,948 29,981,534 11,396,655 4,040,223
- ------------------------------------------------------------------------------------------------------------------------------------
SHARE
TRANSACTIONS:
Proceeds from
sale of shares
Class A 9,346,593 4,999,853 907,794 1,784,436 1,613,168 32,487,800 20,169,488 651,141 1,707,031
Class B 145,617 264,006 274,406 248,489 394,141 4,876,961 5,416,144 4,138,692 14,887,732
Class C 2,763,355 2,057,845 6,488,610 6,612,036 6,940,203 33,202,755 22,892,916 -- --
Class D 61,528,741 46,890,336 12,920,814 4,132,262 4,709,150 54,548,257 64,219,284 -- --
Value of
distributions
reinvested
Class A 292,984 6,640 41,520 56,966 -- 2,963,444 483,588 -- --
Class B 6,989 -- 36,754 7,140 -- 808,909 62,916 434 --
Class C 107,698 5,587 1,735,843 477,266 -- 5,854,736 897,146 -- --
Class D 2,285,228 206,019 944,022 156,060 -- 16,688,138 4,140,136 -- --
Cost of
shares
redeemed
Class A (2,710,964) (1,078,451) (3,599,332) (903,662) (352,602) (14,806,398) (4,687,102) (763,248) (528,656)
Class B (21,353) (65,189) (117,375) (53,819) -- (1,027,087) (409,610) (8,096,306) (4,565,508)
Class C (669,241) (327,094) (5,528,374) (4,463,175) (695,771) (9,333,878) (5,137,572) -- --
Class D (61,958,762) (21,970,397) (3,488,049) (4,662,441) -- (47,701,146) (72,772,334) -- --
Proceeds from
acquisition
of fund -- -- -- -- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase
(decrease)
from share
transactions 11,116,885 30,989,155 10,616,633 3,391,558 12,608,289 78,562,491 35,275,000 (4,069,287) 11,500,599
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE
(DECREASE)
IN NET ASSETS 23,785,755 37,015,897 16,703,799 6,824,745 14,899,438 154,536,439 65,256,534 7,327,368 15,540,822
NET ASSETS
Beginning
of period 75,189,551 38,173,654 43,459,355 36,634,610 -- 236,222,020 170,965,486 35,838,009 20,297,187
- ------------------------------------------------------------------------------------------------------------------------------------
End of period $98,975,306 $75,189,551 $60,163,154 $43,459,355 $14,899,438 $390,758,459 $236,222,020 $43,165,377 $35,838,009
====================================================================================================================================
UNDISTRIBUTED
(OVERDISTRIBUTED)
NET INVESTMENT
INCOME, END OF
PERIOD $ (15,699) $ 484,828 $ (20,833) $ 107,597 $ 11,168 $ 3,003,982 $ 2,857,691 $ 0 $ 0
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
GE GE GE GE
VALUE STRATEGIC TAX- FIXED
EQUITY INVESTMENT EXEMPT INCOME
FUND** FUND FUND** FUND
- ------------------------------------------------------------------------------------------------------------------------------------
Period Ended Year Ended Year Ended Year Ended Period Ended Year Ended Year Ended Year Ended
September October September September September October September September
30, 1997 31, 1996 30, 1997 30, 1996 30, 1997 31, 1996 30, 1997 30, 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C>
$ (4,103) $ 102,618 $ 2,776,537 $ 2,018,226 $ 1,151,538 $ 1,347,773 $ 3,870,453 $ 3,244,634
16,217,779 3,192,415 3,696,675 1,002,244 (55,544) 192 994,264 (1,167,977)
(1,649,840) 2,432,088 14,813,759 5,583,704 550,991 115,799 1,049,251 (600,391)
- ------------------------------------------------------------------------------------------------------------------------------------
14,563,836 5,727,121 21,286,971 8,604,174 1,646,985 1,463,764 5,913,968 1,476,266
- ------------------------------------------------------------------------------------------------------------------------------------
(21,440) (42,207) (461,097) (224,561) (767,703) (789,946) (888,166) (709,900)
(2,231) (80,140) (63,980) (36,223) (421,200) (428,491) (80,626) (57,106)
-- -- (691,773) (480,651) (4,518) -- (1,886,051) (1,490,082)
-- -- (1,079,566) (515,952) (1,880) -- (1,047,014) (1,011,836)
-- (2,142) -- -- -- -- -- --
-- (4,066) -- -- -- -- -- --
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
(475,283) (35,364) (243,915) (44,020) -- -- -- --
(2,729,341) (131,342) (48,212) (7,310) -- -- -- --
-- -- (353,335) (89,301) -- -- -- --
-- -- (478,496) (88,357) -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
(3,228,295) (295,261) (3,420,374) (1,486,375) (1,195,301) (1,218,437) (3,901,857) (3,268,924)
- ------------------------------------------------------------------------------------------------------------------------------------
11,335,541 5,431,860 17,866,597 7,117,799 451,684 245,327 2,012,111 (1,792,658)
- ------------------------------------------------------------------------------------------------------------------------------------
823,722 1,029,337 21,737,339 17,883,706 93,600 309,165 7,378,651 14,465,090
10,675,955 18,661,475 1,584,741 2,827,055 1,106,385 2,631,898 178,891 1,637,270
-- -- 11,916,896 8,576,408 1,653 -- 10,863,901 10,046,924
-- -- 14,484,361 25,183,286 -- -- 9,329,217 20,655,949
496,574 79,393 703,204 268,659 27,172 23,330 877,956 690,901
2,619,315 204,072 111,422 42,201 298,059 317,971 73,560 47,491
-- -- 1,017,319 553,077 -- -- 1,552,771 1,206,983
-- -- 1,558,062 472,353 -- -- 1,049,141 991,882
(589,327) (319,837) (13,641,813) (3,072,661) (594,559) (351,480) (5,791,665) (4,397,297)
(10,241,538) (4,468,090) (507,717) (281,702) (1,863,309) (1,516,101) (569,926) (211,360)
-- -- (4,581,193) (2,710,357) (2,050) -- (6,396,220) (4,014,201)
-- -- (19,955,143) (11,444,286) -- -- (13,753,765) (8,464,459)
-- -- -- -- 13,051,759 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
3,784,701 15,186,350 14,427,478 38,297,739 12,118,710 1,414,783 4,792,512 32,655,173
- ------------------------------------------------------------------------------------------------------------------------------------
15,120,242 20,618,210 32,294,075 45,415,538 12,570,394 1,660,110 6,804,623 30,862,515
39,151,043 18,532,833 91,561,754 46,146,216 25,353,084 23,692,974 64,539,227 33,676,712
- ------------------------------------------------------------------------------------------------------------------------------------
$ 54,271,285 $ 39,151,043 $ 123,855,829 $ 91,561,754 $ 37,923,478 $ 25,353,084 $ 71,343,850 $ 64,539,227
====================================================================================================================================
$ 0 $ 0 $ 2,080,037 $ 1,623,000 $ 73,800 $ 98,471 $ 149,640 $ 95,901
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
GE GE GE
GOVERNMENT SHORT-TERM MONEY
SECURITIES GOVERNMENT MARKET
FUND** FUND FUND***
- ------------------------------------------------------------------------------------------------------------------------------------
Period Ended Year Ended Year Ended Year Ended Year Ended Year Ended
September October September September September September
30, 1997 31, 1996 30, 1997 30, 1996 30, 1997 30, 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C>
$ 37,145,128 $ 55,213,311 $ 749,505 $ 625,423 $ 5,081,919 $ 4,151,611
3,276,687 (3,985,180) 44,179 (1,342) (474) (5,488)
(1,376,782) (17,779,987) 49,129 (58,761) -- --
39,045,033 33,448,144 842,813 565,320 5,081,445 4,146,123
(1,774,779) (1,692,150) (38,125) (17,871) -- --
(34,870,480) (52,573,700) (5,375) (6,475) -- --
-- -- (265,636) (169,713) (5,083,754) (4,151,611)
-- -- (453,643) (442,799) -- --
-- -- -- -- -- --
-- -- -- -- -- --
(14,200) (258,257) -- -- -- --
(278,995) (8,023,827) -- -- -- --
-- -- (469) (1,457) -- --
-- -- (143) (405) -- --
-- -- (5,468) (13,646) -- --
-- -- (9,662) (33,443) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
(36,938,454) (62,547,934) (778,521) (685,809) (5,083,754) (4,151,611)
- ------------------------------------------------------------------------------------------------------------------------------------
2,106,579 (29,099,790) 64,292 (120,489) (2,309) (5,488)
- ------------------------------------------------------------------------------------------------------------------------------------
6,420,060 11,137,901 1,007,456 729,588 -- --
1,910,220 9,242,327 1,016,179 89,871 -- --
-- -- 2,442,574 1,743,456 234,308,541 177,814,977
-- -- 4,875,679 1,694,811 -- --
953,206 902,225 32,067 14,905 -- --
18,663,303 31,218,929 2,461 4,689 -- --
-- -- 249,182 174,763 4,838,099 3,800,372
-- -- 456,946 469,809 -- --
(12,540,641) (9,198,287) (164,903) (684,827) -- --
(246,487,916) (377,040,027) (1,118,841) (30,407) -- --
-- -- (1,048,136) (666,107) (210,956,472) (167,432,164)
-- -- (5,443,242) (2,349,374) -- --
-- -- 7,069,264 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
(231,081,768) (333,736,932) 9,376,686 1,191,177 28,190,168 14,183,185
- ------------------------------------------------------------------------------------------------------------------------------------
(228,975,189) (362,836,722) 9,440,978 1,070,688 28,187,859 14,177,697
776,305,555 1,139,142,277 11,923,848 10,853,160 85,841,685 71,663,988
- ------------------------------------------------------------------------------------------------------------------------------------
$ 547,330,366 $ 776,305,555 $ 21,364,826 $ 11,923,848 $ 114,029,544 $ 85,841,685
====================================================================================================================================
$ (417,464) $ (1,280,667) $ 13,243 $ 22,580 $ 55,271 $ 44,818
</TABLE>
* For the period December 31, 1996 (inception) thru September 30, 1997.
** For the period November 1, 1996 thru September 30, 1997. Data is
representative of the applicable Investors Trust Fund. See Note 9 of the
Notes to Financial Statements for further information.
*** GE Money Market Fund is a no load fund offering only one class of shares to
all investors.
- ----------
See Notes to Financial Statements
77
<PAGE>
STATEMENTS OF CHANGES
IN NET ASSETS (CONTINUED)
CHANGES IN FUND SHARES
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
GE GE GE GE GE
INTERNATIONAL GLOBAL PREMIER GROWTH U.S. MID-CAP
EQUITY EQUITY EQUITY EQUITY GROWTH
FUND FUND FUND* FUND FUND**
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended Period Ended Year Ended Year Ended Period Ended Year Ended
September September September September September September September September October
30, 1997 30, 1996 30, 1997 30, 1996 30, 1997 30, 1997 30, 1996 30, 1997 31, 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A:
Shares sold by
subscription 501,638 294,637 38,598 85,979 96,889 1,229,311 920,456 45,252 142,429
Issued for
distributions
reinvested 16,618 405 1,932 2,868 -- 127,023 23,382 -- --
Shares redeemed (145,418) (64,247) (162,855) (43,891) (20,738) (608,801) (211,845) (52,136) (43,333)
Shares from
acquisitions
of fund -- -- -- -- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase
(decrease)
in fund shares 372,838 230,795 (122,325) 44,956 76,151 747,533 731,993 (6,884) 99,096
====================================================================================================================================
CLASS B:
Shares sold by
subscription 7,935 15,817 12,065 11,994 24,530 194,796 255,210 293,713 1,254,875
Issued for
distributions
reinvested 400 -- 1,724 360 -- 35,856 3,135 32 --
Shares redeemed (1,175) (3,843) (5,170) (2,589) -- (42,077) (18,909) (553,350) (385,371)
Shares from
acquisitions
of fund -- -- -- -- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase
(decrease)
in fund shares 7,160 11,974 8,619 9,765 24,530 188,575 239,436 (259,605) 869,504
====================================================================================================================================
CLASS C:
Shares sold by
subscription 149,455 122,659 284,215 319,353 440,229 1,319,280 1,066,216 -- --
Issued for
distributions
reinvested 6,092 341 80,285 23,887 -- 255,106 44,064 -- --
Shares redeemed (36,301) (19,472) (242,109) (216,093) (43,164) (372,791) (238,075) -- --
Shares from
acquisitions
of fund -- -- -- -- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase
(decrease)
in fund shares 119,246 103,528 122,391 127,147 397,065 1,201,595 872,205 -- --
====================================================================================================================================
CLASS D:
Shares sold by
subscription 3,325,700 2,756,412 564,945 197,330 313,891 2,185,018 3,068,016 -- --
Issued for
distributions
reinvested 129,182 12,531 43,705 7,803 -- 729,058 203,647 -- --
Shares redeemed (3,338,513) (1,273,543) (151,578) (230,524) -- (1,839,879) (3,416,836) -- --
Shares from
acquisitions
of fund -- -- -- -- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase
(decrease)
in fund shares 116,369 1,495,400 457,072 (25,391) 313,891 1,074,197 (145,173) -- --
====================================================================================================================================
</TABLE>
78
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
GE GE GE GE
VALUE STRATEGIC TAX- FIXED
EQUITY INVESTMENT EXEMPT INCOME
FUND** FUND FUND** FUND
- ------------------------------------------------------------------------------------------------------------------------------------
Period Ended Year Ended Year Ended Year Ended Period Ended Year Ended Year Ended Year Ended
September October September September September October September September
30, 1997 31, 1996 30, 1997 30, 1996 30, 1997 31, 1996 30, 1997 30, 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
69,116 106,358 1,013,955 906,804 7,816 27,357 622,149 1,202,556
46,979 8,436 33,678 14,267 2,371 2,058 74,052 58,607
(48,223) (32,438) (633,971) (156,140) (51,517) (30,937) (490,365) (375,267)
-- -- -- -- 48,461 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
67,872 82,356 413,662 764,931 7,131 (1,522) 205,836 885,896
====================================================================================================================================
910,258 1,904,118 73,254 148,617 96,638 231,317 15,044 137,322
248,003 21,842 5,385 2,264 25,858 28,018 6,199 4,042
(830,850) (455,044) (23,418) (14,530) (162,031) (133,485) (48,093) (18,027)
-- -- -- -- 107,527 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
327,411 1,470,916 55,221 136,351 67,992 125,850 (26,850) 123,337
====================================================================================================================================
-- -- 542,727 443,753 137 -- 915,906 843,984
-- -- 48,606 29,341 -- -- 130,841 101,965
-- -- (209,785) (139,805) (170) -- (539,791) (338,433)
-- -- -- -- 664,095 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
-- -- 381,548 333,289 664,062 -- 506,956 607,516
====================================================================================================================================
-- -- 660,856 1,328,680 -- -- 787,978 1,711,763
-- -- 74,407 25,058 -- -- 88,445 84,091
-- -- (934,956) (593,811) -- -- (1,163,393) (719,913)
-- -- -- -- 265,902 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
-- -- (199,693) 759,927 265,902 -- (286,970) 1,075,941
====================================================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
GE GE GE
GOVERNMENT SHORT-TERM MONEY
SECURITIES GOVERNMENT MARKET
FUND** FUND FUND***
- ------------------------------------------------------------------------------------------------------------------------------------
Period Ended Year Ended Year Ended Year Ended Year Ended Year Ended
September October September September September September
30, 1997 31, 1996 30, 1997 30, 1996 30, 1997 30, 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C>
759,978 1,317,620 83,835 61,992 -- --
112,984 106,174 2,714 1,258 -- --
(1,487,386) (1,082,308) (13,950) (58,394) -- --
-- -- 514,537 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
(614,424) 341,486 587,136 4,856 -- --
====================================================================================================================================
226,547 1,073,669 87,200 7,523 -- --
2,209,474 3,657,994 208 396 -- --
(29,214,346) (44,378,475) (94,431) (2,586) -- --
-- -- 81,740 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
(26,778,325) (39,646,812) 74,717 5,333 -- --
====================================================================================================================================
-- -- 206,389 146,513 234,308,541 177,814,977
-- -- 21,072 14,742 4,838,098 3,800,372
-- -- (88,632) (56,042) (210,956,472) (167,432,164)
- ------------------------------------------------------------------------------------------------------------------------------------
-- -- 138,829 105,213 28,190,167 14,183,185
====================================================================================================================================
-- -- 412,203 142,334 -- --
-- -- 38,673 39,635 -- --
-- -- (460,152) (197,251) -- --
-- -- -- -- -- --
-- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
-- -- (9,276) (15,282) -- --
====================================================================================================================================
</TABLE>
* For the period December 31, 1996 (inception) through September 30, 1997.
** For the period November 1, 1996 thru September 30, 1997. Data is
representative of the applicable Investors Trust Fund. See Note 9 of the
Notes to Financial Statements for further information.
*** GE Money Market Fund is a no load Fund offering only one class of shares to
all investors.
- ----------
See Notes to Financial Statements
78 & 79
<PAGE>
NOTES TO FINANCIAL STATEMENTS -- SEPTEMBER 30, 1997
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 thirteen
investment portfolios (the "Funds") only twelve of which are currently being
offered, as follows: GE International Equity Fund, GE Global Equity Fund, GE
Premier Growth Equity Fund, GE U.S. Equity Fund, GE Mid-Cap Growth Fund, GE
Value Equity Fund, GE Strategic Investment Fund, GE Tax-Exempt Fund, GE Fixed
Income Fund, GE Government Securities 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. However, as of September 30, 1997,
only two classes were being offered for GE Mid-Cap Growth Fund, GE Value Equity
Fund and GE Government Securities Fund.
The commencement dates of the Funds were as follows: Classes A and B of GE
Mid-Cap Growth Fund, GE Value Equity Fund and GE Tax-Exempt Fund - September 8,
1993; Class A and B of GE Tax-Exempt Fund - September 8, 1993 and Class C and D
- - September 26, 1997; Class A of GE Government Securities Fund - September 8,
1993; Class B of GE Government Securities Fund - April 22, 1987; Classes A, B,
C, and D of GE Premier Growth Equity Fund - December 31, 1996; Classes A, B, C,
and D of GE International Equity Fund and GE Short-Term Government Fund - 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, 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):
5.75% 4.25% 2.50%
- -------------------------------------------------------------------------------
GE International GE Tax- GE Short-Term
Equity Fund Exempt Fund Government
Fund
GE Global Equity Fund GE Fixed
Income Fund
GE Premier Growth GE Government
Equity Fund Securities Fund
GE U.S. Equity Fund
GE Mid-Cap Growth Fund
GE Value 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 GE International
Fund Equity Fund
GE Fixed GE Global
Income Fund Equity Fund
GE Government GE Premier Growth
Securities Fund Equity Fund
GE Short-Term GE U.S. Equity Fund
Government Fund GE Mid-Cap
Growth Fund
GE Value Equity Fund
GE Strategic
Investment Fund
Except as described in the next paragraph, 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.
The maximum contingent deferred sales load for Class B redemptions from shares
acquired, either by purchase or exchange, as a result of the combination of the
Investors Trust Funds with the Trust is as follows: 5.00% within the first year,
4.00% within the second year, 3.00% within the third year, 2.00% within the
fourth year, 1.00% within the fifth year, and 0.00% thereafter.
No sales charges, redemption fees or exchange 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 that were
subject to no front-end sales load upon purchase by virtue of being part of
a purchase of $1 million or more.
80
<PAGE>
NOTES TO FINANCIAL STATEMENTS -- SEPTEMBER 30, 1997
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 bid and ask 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 are valued at the last
sale price, or if no sales occurred on that day, at the last quoted bid price.
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. Fund positions
which cannot be valued as set forth above are valued at fair value determined
under procedures approved by the Board of Trustees of the Funds.
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
fair 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 their market prices. Such fluctuations are included in 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 Fund's 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 as a result of changes in
exchange rates.
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.
As of September 30, 1997, the following Funds have capital loss carryovers as
indicated below. The capital loss carryovers of the GE Tax-Exempt Fund and GE
Short-Term Government Fund include capital loss carryovers of $218,824 and
$173,893, respectively, acquired as a result of the reorganization with the
Investors Trust Tax Free Fund and Investors Trust Adjustable Rate Fund,
respectively (see Note 9). The capital loss carryovers are available to offset
future realized capital gains to the extent provided in the Internal Revenue
Code and regulations thereunder. To the extent that these carryover losses are
used to offset future
81
<PAGE>
NOTES TO FINANCIAL STATEMENTS -- SEPTEMBER 30, 1997
capital gains, it is probable that the gains so offset will not be distributed
to shareholders because they would be taxable as ordinary income.
FUND AMOUNT EXPIRES
- --------------------------------------------------------------------------------
GE Tax-Exempt Fund $ 176,173 2002
68,177 2003
498,256 2004
GE Fixed Income Fund 2,559,595 2003
38,636 2004
445,270 2005
GE Government
Securities Fund 87,336,523 2002
107,525,597 2003
1,748,819 2004
GE Short-Term
Government Fund 44,539 2001
114,498 2002
14,856 2003
GE Money Market Fund 3,370 2003
5,688 2005
Any net capital and currency losses incurred after October 31, within each
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 losses as follows:
GE U.S. Equity Fund $ 6,183
GE Global Equity Fund 100,869
GE International Equity Fund 198,835
GE Strategic Investment Fund 30,711
GE Money Market Fund 275
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 after ex-dividend date 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. On 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.
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 GEIM, investment adviser to the
Funds, and reimbursed by the Funds up to the voluntary expense limitations.
DISTRIBUTIONS TO SHAREHOLDERS
GE Tax-Exempt Fund, GE Fixed Income Fund, GE Government Securities Fund, GE
Short-Term Government Fund and GE Money Market Fund declare investment income
dividends daily and pay them monthly. All other Funds 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 contracts, 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.
GE Government Securities Fund will declare a distribution each day in an amount
based on periodic projections of its future net investment income. Consequently,
the amount of each daily distribution may differ from actual net investment
income.
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
82
<PAGE>
NOTES TO FINANCIAL STATEMENTS -- SEPTEMBER 30, 1997
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.
FUTURES AND OPTIONS
The Funds, other than 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 may
invest in futures contracts for the following reasons: (1) for the purpose of
hedging against the effects of changes in the value of portfolio securities or
other investments due to anticipated changes in interest rates, stock market
conditions and currency market conditions, (2) to gain stock, bond, or currency
market exposure for accumulating and residual cash positions, (3) for duration
management, (4) when such transactions are an economically appropriate way to
reduce risks inherent in the management of a fund, and (5) for non-hedging
purposes such as seeking additional income or otherwise seeking to increase
total return.
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 change 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.
SECURITY LENDING
The Funds may loan securities to well known and recognized U.S. and foreign
brokers and banks and receive a lenders fee. These fees are included in interest
income. The loans of securities will be collateralized by cash, letters of
credit or U.S. Government securities. The collateral will be segregated and
maintained at all times with the custodian and must be equal to the current
value of the securities loaned. In the event the counterparty (borrower) does
not meet its contracted obligation to return the securities, the fund may be
exposed to the risk of loss of reacquiring the loaned securities at prevailing
market prices.
83
<PAGE>
NOTES TO FINANCIAL STATEMENTS -- SEPTEMBER 30, 1997
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 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 Premier Growth Equity Fund .60% .30%
GE U.S Equity Fund .40% .20%*
GE Mid-Cap Growth Fund .60%* .30%*
GE Value Equity Fund .55%* .30%*
GE Strategic Investment Fund .35% .30%
GE Tax-Exempt Fund .35%* .25%*
GE Fixed Income Fund .35% .20%
GE Government Securities Fund .40%* .20%*
GE Short-Term Government Fund .30% .15%
GE Money Market Fund .25% .25%
* The Advisory and Administration Fees and/or Limitation of Other Operating
Expenses set forth above became effective for the funds indicated by an
asterisk on September 26, 1997. The rates for Advisory and Administration
Fees in effect during the fiscal year end September 30, 1997 were, for most
of these Funds, higher than the rate indicated in the above table. The
rates for Limitation of Other Operating Expenses in effect during the
fiscal year end September 30, 1997, were for most of these funds, lower
than the rates indicated in the above table.
DISTRIBUTION AND SHAREHOLDER SERVICING FEES
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 distribution and/or shareholder
services provided, at an annual rate of the average daily net assets
attributable to each applicable class of shares. The annual rates applicable are
.50% for Class A shares; 1.00% for Class B shares (except GE Short-Term
Government Fund which is .85%); and .25% for Class C shares. Currently Class D
is not subject to a 12b-1 fee plan.
GEIS has agreed that the 1.00% fee on average daily net assets of Class B shares
will only be assessed on any shareholder's shares for a limited period of time
until converted to Class A shares. Once Class B shares automatically convert to
Class A shares, six years after the date of purchase (eight years in the case of
shares acquired or exchanged from shares of Investors Trust Funds), such
shareholders will be subject only to the .50% distribution and/or shareholder
services fees attributable to Class A shares.
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 period ended September 30, 1997, GEIS acting as underwriter received net
commissions of $12,316 from the sale of Class A shares and $67,494 in contingent
deferred sales charges from redemptions of Class A and Class B shares.
GNA Corporation, a wholly-owned subsidiary of General Electric Company, acted as
Blue Sky administrator for the GE Funds. Fees paid to GNA of approximately
$35,500 are included in Blue Sky fees in the Statements of Operations.
4. Sub-advisory Fees
Effective September 26, 1997, Brown Brothers Harriman & Co. ("Brown Brothers")
is the investment sub-adviser to the GE Tax-Exempt Fund pursuant to an
investment sub-advisory agreement with GEIM. Brown Brothers is responsible for
the day-to-day portfolio management of the Tax-Exempt Fund's assets, including
the responsibility for mak-
84
<PAGE>
NOTES TO FINANCIAL STATEMENTS -- SEPTEMBER 30, 1997
ing decisions and placing orders to buy, sell or hold a particular security,
under the general supervision of GEIM and the Board. For its services GEIM pays
Brown Brothers monthly compensation in the form of an investment sub-advisory
fee. The fee is paid by GEIM monthly and is a percentage of the average daily
net assets of the Fund at the following annual rate:
.20% of the first $25 million; .175% of the next $25 million; .15% of the next
$50 million; and .125% of amounts in excess of $100 million.
5. Aggregate Unrealized Appreciation and Depreciation
Aggregate gross unrealized appreciation/(depreciation) of investments for each
fund at September 30, 1997, were as follows:
NET
GROSS GROSS UNREALIZED
UNREALIZED UNREALIZED APPRECIATION
APPRECIATION DEPRECIATION (DEPRECIATION)
- --------------------------------------------------------------------------------
GE International
Equity Fund $ 21,851,326 $ 3,655,194 $ 18,196,132
GE Global Equity Fund 11,228,203 2,433,589 8,794,614
GE Premier Growth
Equity Fund 2,327,395 185,347 2,142,048
GE U.S. Equity Fund 105,660,627 400,456 105,260,171
GE Mid-Cap Growth Fund 1,551,398 285,684 1,265,714
GE Value Equity Fund 3,588,247 189,345 3,398,902
GE Strategic
Investment Fund 26,801,785 1,001,327 25,800,458
GE Tax-Exempt Fund 1,367,439 13,191 1,354,248
GE Fixed Income Fund 1,031,639 57,459 974,180
GE Government
Securities Fund 13,273,539 5,449,909 7,823,630
GE Short-Term
Government Fund 190,273 18,732 171,541
The aggregate cost of each fund's investments was substantially the same for
book and federal income tax purposes at September 30, 1997.
6. Options
During the period ended September 30, 1997, 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, 1996 0 $ 0 0 $ 0
Written 16 2,383 1,318 5,452
Closed and Expired (8) (1,401) (915) (3,635)
Exercised (8) (982) (0) (0)
- --------------------------------------------------------------------------------
Balance as of
September
30, 1997 0 $ 0 403 $ 1,817
================================================================================
GE FIXED INCOME FUND GE GOVT SECURITIES FUND
- --------------------------------------------------------------------------------
NUMBER NUMBER
OF CONTRACTS PREMIUM OF CONTRACTS PREMIUM
- --------------------------------------------------------------------------------
Balance as of
September
30, 1996 0 $ 0 186 $ 210,994
Written 5,446 12,385 0 0
Closed and
Expired (4,230) (7,118) (186) (210,994)
Exercised (0) (0) (0) (0)
- --------------------------------------------------------------------------------
Balance as of
September
30, 1997 1,216 $ 5,267 0 $ 0
================================================================================
85
<PAGE>
NOTES TO FINANCIAL STATEMENTS -- SEPTEMBER 30, 1997
7. Investment Transactions
The cost of purchases and the proceeds from sales of investments, other than
U.S. Government securities, short term securities and options, for the period
ended September 30, 1997, were as follows:
PURCHASES SALES
- --------------------------------------------------------------------------------
GE International
Equity Fund $ 48,852,545 $ 41,689,954
GE Global Equity Fund 42,857,680 34,171,530
GE Premier Growth
Equity Fund 13,282,137 1,623,981
GE U.S. Equity Fund 166,200,583 109,286,381
GE Mid-Cap Growth Fund 51,493,223 56,348,191
GE Value Equity Fund 62,798,907 62,744,888
GE Strategic Investment Fund 38,011,642 31,491,724
GE Tax-Exempt Fund 3,108,737 4,277,602
GE Fixed Income Fund 30,635,414 31,580,833
GE Government
Securities Fund 35,100,524 52,259,378
GE Short-Term
Government Fund 5,448,269 4,625,405
The cost of purchases and the proceeds from sales of long term U.S. Government
securities for the period ended September 30, 1997, were as follows:
PURCHASES SALES
- --------------------------------------------------------------------------------
GE U.S. Equity Fund $ 2,559,725 $ 418,686
GE Value Equity Fund 797,341 0
GE Strategic
Investment Fund 75,157,908 69,095,146
GE Fixed Income Fund 136,084,296 129,889,455
GE Government
Securities Fund 688,917,914 957,102,817
GE Short-Term
Government Fund 31,186,494 28,942,277
8. 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 77%
GE Global Equity Fund 3 35%
GE Premier Growth Equity Fund 2 47%
GE U.S. Equity Fund 4 26%
GE Mid-Cap Growth Fund 1 14%
GE Value Equity Fund 1 8%
GE Strategic Investment Fund 5 38%
GE Tax-Exempt Fund 2 48%
GE Fixed Income Fund 3 21%
GE Short-Term Government Fund 3 63%
GE Money Market Fund 1 7%
At September 30, 1997, General Electric Company and Employers Reinsurance
Corporation, an indirect wholly-owned subsidiary of General Electric Company,
owned 8% and 40%, respectively, of the shares outstanding of the GE Tax-Exempt
Fund; GE Capital Assurance Company, an indirect wholly-owned subsidiary of
General Electric Company, owned 39% and 23%, respectively, of the shares
outstanding of the GE Premier Growth Equity and GE Short-Term Government Funds;
GNA Corporation, a direct subsidiary of General Electric Capital Corporation,
owned 14%, 8% and 28%, respectively, of the shares outstanding of the GE Mid-Cap
Growth, GE Value Equity and GE Short-Term Government Funds.
86
<PAGE>
NOTES TO FINANCIAL STATEMENTS -- SEPTEMBER 30, 1997
9. Transfer of Net Assets
At a meeting held on September 15, 1997 the shareholders of the five Investors
Trust Funds approved an Agreement and Plan of Reorganization (the "Agreement")
relating to the proposed combination of each series of Investors Trust with a
corresponding series of GE Funds. On September 26, 1997, the date of the
consumation of the reorganization, certain GE Funds acquired all or
substantially all of the assets of the Investors Trust Funds as is described
below. The transaction was structured for tax purposes to qualify as a tax-free
reorganization under the Internal Revenue Code.
The Investors Trust Adjustable Rate Fund and Tax Free Fund combined with the
GEShort-Term Government Fund and GE Tax-Exempt Fund, respectively, each of which
were previously existing series of GE Funds. The remaining three Investors Trust
Funds combined with newly created series of GE Funds.
Information related to the contribution of assets by the Investors Trust Funds
to newly-established GE Funds is as follows:
TOTAL NET
INVESTORS GE FUND ASSETS
TRUST FUND RECEIVING SHARES ISSUED AT TRANSFER
TRANSFERRING ASSETS ASSETS CLASS A CLASS B DATEE
- --------------------------------------------------------------------------------
Government Fund Government
Securities Fund 2,818,868 61,593,157 $55,214,191
Value Fund Value Equity Fund 607,138 3,456,729 54,734,861
Growth Fund Mid-Cap
Growth Fund 617,862 1,898,516 43,368,082
The financial statements of IT Government Fund, IT Tax Free Fund, IT Value Fund
and IT Growth Fund survived the reorganization; therefore, the financial
statements of GE Government Securities Fund, GE Tax-Exempt Fund, GE Value Equity
Fund and GE Mid-Cap Growth Fund reflect the financial statements of IT
Government Fund, IT Tax Free Fund, IT Value Fund and IT Growth Fund,
respectively. Additionally, the fiscal year-end of the Investors Trust Funds was
changed to coincide with that of GE Funds.
Investors Trust Adjustable Rate Fund shareholders contributed net assets having
an aggregate value of $7,069,264 (including $170,708 of unrealized appreciation)
in ex-change for 514,537 Class A shares and 81,740 Class B shares of the GE
Short-Term Government Fund. The combined fund has adopted the fiscal year-end of
the GE Short-Term Government Fund. Upon completion of the merger the combined
net assets in the GE Short-Term Government Fund were $21,344,143.
Immediately preceding the merger of the Investors Trust Tax Free Fund into the
GE Tax-Exempt Fund, GETax Exempt Fund completed a reverse split of its shares in
the ratio of one new Class A share for each 1.04011 existing Class A share and
one new Class B share for each 1.04078 existing Class B share. As a result, the
GE Tax-Exempt Fund's net asset value per share was $11.62 per share for both
Class A and Class B shares on September 26, 1997, which coincided with the net
asset value per share of each Class A and Class B share of the Investors Trust
Tax Free Fund. Investors Trust Tax Free Fund shareholders contributed net assets
having an aggregate value of $24,848,756 (including $810,254 of unrealized
appreciation) in exchange for 1,374,277 Class A shares and 764,327 Class B
shares (post-split) of the GE Tax-Exempt Fund. Immediately prior to the merger,
GE Tax-Exempt Fund, had net assets of $13,051,759 (including unrealized
appreciation of $511,156). Upon completion of the merger, the combined net
assets of the GE Tax-Exempt Fund were $37,900,515.
87
<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 financial highlights present fairly, in all material
respects, the financial position of GE International Equity Fund, GE Global
Equity Fund, GE Premier Growth Equity Fund, GE U.S. Equity Fund, GE Mid-Cap
Growth Fund, GE Value Equity Fund, GE Strategic Investment Fund, GE Tax-Exempt
Fund, GE Fixed Income Fund, GE Government Securities Fund, GE Short-Term
Government Fund and GE Money Market Fund, each a series of GE Funds (the
"Trust"), at September 30, 1997, and the results of their operations for the
period ended September 30, 1997, the changes in their net assets for the periods
ended September 30, 1997 and 1996 for the GE International Equity Fund, GE
Global Equity Fund, GE U.S. Equity Fund, GE Strategic Investment Fund, GE Fixed
Income Fund, GE Short-Term Government Fund and GE Money Market Fund and the for
the period ended September 30, 1997 for the GE Premier Growth Equity Fund, GE
Mid-Cap Growth Fund, GE Value Equity Fund, GE Tax-Exempt Fund and GE Government
Securities Fund and the financial highlights for the period from January 5, 1993
(inception date) to September 30, 1997 for the GE Global Equity Fund, GE U.S.
Equity Fund, GE Strategic Investment Fund, GE Fixed Income Fund and GE Money
Market Fund; for the period from March 2, 1994 (inception date) to September 30,
1997 for the GE International Equity Fund and GE Short-Term Government Fund; for
the period from November 1, 1996 to September 30, 1997 for the GE Mid-Cap Growth
Fund, GE Value Equity Fund, GE Tax-Exempt Fund and GE Government Securities
Fund; and for the period from December 31, 1996 (inception date) to September
30, 1997 for the GE Premier Equity Growth Fund, 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, 1997 by
correspondence with the custodian and the application of alternative auditing
procedures where investments purchased were not yet received by the custodian,
provide a reasonable basis for the opinion expressed above. The financial
statements of the GE Mid-Cap Growth (formerly Investors Trust Growth Fund), GE
Value Equity Fund (formerly Investors Trust Value Fund), GE Tax-Exempt Fund
(formerly Investors Trust Tax Free Fund) and GE Government Securities Fund
(formerly Investors Trust Government Fund) for the periods ended October 31,
1996, October 31, 1995, October 31, 1994 and October 31, 1993 were audited by
other independent accountants whose reports expressed an unqualified opinion on
those statements.
PRICE WATERHOUSE LLP
Boston, Massachusetts
November 14, 1997
88
<PAGE>
TAX INFORMATION, UNAUDITED
Of the dividends paid from net investment income by the GE Tax-Exempt Fund and
Investors Trust Tax Free Fund for their respective tax periods ended September
30, 1997 and September 26, 1997, the following percentages represent exempt
interest dividends for Federal income tax purposes:
GE Tax-Exempt Fund 95.54%
Investors Trust Tax Free Fund 99.06%
For the fiscal year ended September 30, 1997, 94.6% of the applicable dividends
distributed by the GE Value Equity Fund, qualify for the dividends-received
deduction for corporate shareholders.
Please consult a tax adviser if you have any questions about federal or state
income tax laws, or on how to prepare your tax returns. If you have specific
questions about your Fund account, please consult your investment representative
or call 1-800-242-0134.
89
<PAGE>
GE FUNDS INVESTMENT TEAM
Portfolio Managers
GE INTERNATIONAL EQUITY FUND
Team led by
Ralph R. Layman
GE GLOBAL EQUITY FUND
Ralph R. Layman
Michael J. Solecki
GE PREMIER GROWTH EQUITY FUND
David B. Carlson
GE MID-CAP GROWTH FUND
Elaine G. Harris
GE VALUE EQUITY FUND
Peter J. Hathaway
GE U.S. EQUITY FUND
Team led by
Eugene K. Bolton
GE STRATEGIC INVESTMENT FUND
David B. Carlson
Ralph R. Layman
Robert A. MacDougall
GE TAX-EXEMPT FUND
Barbara A. Brinkley-
Brown Brothers Harriman & Co.
GE FIXED INCOME FUND
GE SHORT-TERM GOVERNMENT FUND
GE MONEY MARKET FUND
Team led by
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
Assistant Treasurer
Robert J. Zalucki
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
John H. Myers, 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
Robert A. MacDougall, EVP, Fixed Income
Geoffrey R. Norman, EVP, Institutional Marketing
Thomas J. Szkutak, EVP, Chief Financial Officer
Don W. Torey, EVP, Alternative Investments and Real Estate
90
<PAGE>
SHAREHOLDER INQUIRIES
The quality assurance initiative at GE Investments is now evident in two
important changes in Shareholder Services. The transition to our new servicing
agent, National Financial Data Services (NFDS), took effect on September 1st.
And the new voice response system, GE Select, activated on September 1 is
already showing increased investor usage in its first month.
NFDS has experienced professionals dedicated to GE Funds business and its
account administration. The change to NFDS went quite smoothly with no
disruption of service to our investors. NFDS has been thoroughly trained in GE's
quality assurance procedures with an emphasis on timeliness and accuracy.
Customer Representatives in Stamford who are similarly trained, will, on
occasion, work very closely with NFDS to resolve those account issues which
cannot be remedied with a simple telephone call.
GE Select represents state-of-the-art technology in voice response systems.
Investors now have access to account information, Market Outlooks, Fund total
returns, prices, and more, 24 hours a day, 7 days a week. During the Inquiry
Center's business hours in Stamford, investors may now press "O" at any time
during the menu to speak with a Customer Representative, if assistance is
desired.
CLASS A, B AND C INVESTORS: For questions regarding the Funds or your account,
call your Investment Representative or the GE Funds Inquiry Center at
1-800-242-0134.
Address inquiries regarding the Funds to: GE Investments
3003 Summer Street
P.O. Box 7900
Stamford, CT 06904-7900
Address requests regarding your account(s) to: GE Funds
P.O. Box 419631
Kansas City, MO 64141-6631
Overnight express mail Address: GE Investments
c/o NFDS
1004 Baltimore Avenue
Kansas City, MO 64105
CLASS D INVESTORS: Contact your designated GE Investments account representative
401(K) PLAN INVESTORCall 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 Bulk Rate
Stamford, CT 06904-7900 U.S. Postage
PAID
Canton, MA
Permit No. 313
--------------------
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- --------------------------------------------------------------------------------
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