As filed with the Securities and Exchange Commission on April 30, 1997.
1940 Act Registration No. 811-07363
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 2
GROWTH PORTFOLIO
(Exact Name of Registrant as Specified in Charter)
50 California Street, 27th Floor
San Francisco, California 94111
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: 415-392-6181
David J. Thelander, Esq.
Vice President and Assistant General Counsel
Chancellor LGT Asset Management, Inc.
50 California Street, 27th Floor
San Francisco, California 94111
(Name and Address of Agent for Service)
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<PAGE>
EXPLANATORY NOTE
This Amendment to the Registration Statement of Growth Portfolio has
been filed by the Registrant pursuant to Section 8(b) of the Investment
Company Act of 1940, as amended (the "1940 Act"). However, beneficial
interests in the Registrant have not been registered under the Securities
Act of 1933, as amended (the "1933 Act") since such interests are offered
solely in private placement transactions that do not involve any "public
offering" within the meaning of Section 4(2) of the 1933 Act. Investments
in the Registrant may only be made by investment companies, insurance
company separate accounts, common or commingled trust funds or similar
organizations or entities which are "accredited investors" as defined in
Regulation D under the 1933 Act. This Amendment to the Registration
Statement does not constitute an offer to sell, or the solicitation of an
offer to buy, any beneficial interests in the Registrant.
<PAGE>
GROWTH PORTFOLIO
CONTENTS OF REGISTRATION STATEMENT
This registration statement of Growth Portfolio contains the following
documents:
Facing Sheet
Contents of Registration Statement
Part A
Part B
Part C
Signature Page
Exhibits
<PAGE>
PART A
Responses to Items 1 through 3 and 5A have been omitted pursuant to
paragraph 4 of Instruction F of the General Instructions to Form N-1A.
Responses to certain Items required to be included in Part A of this
Registration Statement are incorporated herein by reference from
Post-Effective Amendment No. 40 to the Registration Statement of G.T.
Global Growth Series ("Growth Series") (1940 Act File No. 811-2699), as
filed with the Securities and Exchange Commission ("SEC") on April 29, 1997
("Feeder Registration Statement"). Part A of the Feeder Registration
Statement includes the joint prospectus of the GT Global Equity Funds
("Feeder's Part A").
Item 4. GENERAL DESCRIPTION OF REGISTRANT.
------------------------------------------
Growth Portfolio is a diversified, open-end management investment
company which was organized as a New York common law trust pursuant to a
Declaration of Trust dated as of May 4, 1995, and amended and restated as
of September 25, 1995.
Beneficial interests in the Growth Portfolio are divided currently into
two separate subtrusts or "series" -- Small Cap Portfolio and Value
Portfolio (individually, a "Portfolio" and collectively, the "Portfolios")
-- each having a distinct investment objective and distinct investment
policies. Each Portfolio is described herein. Additional subtrusts of
Growth Portfolio may be organized at a later date. The assets of each
Portfolio belong only to that Portfolio, and the liabilities of each
Portfolio are borne solely by that Portfolio, and no other.
Beneficial interests in the Portfolios are offered solely in private
placement transactions which do not involve any "public offering" within
the meaning of Section 4(2) of the 1933 Act. Investments in the Portfolios
may only be made by investment companies, insurance company separate
accounts, common or commingled trust funds or similar organizations or
entities which are "accredited investors" as defined in Regulation D under
the 1933 Act. The Registration Statement does not constitute an offer to
sell, or the solicitation of an offer to buy, any "security" within the
meaning of the 1933 Act.
Each Portfolio's investment manager and administrator is Chancellor LGT
Asset Management, Inc. ("Chancellor LGT Asset Management"). Chancellor LGT
Asset Management and its worldwide affiliates are part of Liechtenstein
Global Trust, formerly BIL GT Group Limited, a provider of global asset
management and private banking products and services to individual and
institutional investors.
Information on the Portfolios' investment objectives, the kinds of
securities in which the Portfolios principally invest, other investment
practices of the Portfolios and the risk factors associated with
investments in the Portfolios are incorporated herein by reference from the
sections entitled "Investment Objectives and Policies" and "Risk Factors"
in the Feeder's Part A. Additional investment techniques, features and
limitations concerning the Portfolios' investment program are described in
Part B of this Registration Statement.
Item 5. MANAGEMENT OF THE PORTFOLIOS.
-------------------------------------
A description of how the business of the Portfolios is managed is
incorporated herein by reference from the section entitled "Management" in
the Feeder's Part A. The following list identifies the specific sections of
the Feeder's Part A under which the information required by Item 5 of Form
N-1A may be found; each listed section is incorporated herein by reference.
Item 5 (a) Management
Item 5 (b) Management--Investment Management and
Administration
Item 5 (c) Management
Item 5 (d) Management
Item 5 (e) Other Information--Transfer Agent
Item 5 (f) Management; Prospectus Summary
Item 5 (g) Management
Item 5A. MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE.
-----------------------------------------------------
Not Applicable.
<PAGE>
Item 6. CAPITAL STOCK AND OTHER SECURITIES.
-------------------------------------------
Growth Portfolio is organized as a New York common law trust. Under the
Declaration of Trust, the Trustees are authorized to issue beneficial
interests in separate subtrusts or "series" of Growth Portfolio. Growth
Portfolio currently has two series -- the Small Cap Portfolio and Value
Portfolio. Growth Portfolio reserves the right to create and issue
additional series. Each investor in a Portfolio is entitled to participate
equally in the Portfolio's earnings and assets and to a vote in proportion
to the amount of its interest in the Portfolio. Investments in a Portfolio
may not be transferred, but an investor may withdraw all or any portion of
its investment at any time at net asset value ("NAV"). Each investor in a
Portfolio will be liable for all obligations of that Portfolio but not of
the other Portfolios. However, because a Portfolio will indemnify each
investor therein with respect to any liability to which the investor may
become subject by reason of being such an investor, the risk of an investor
in a Portfolio incurring financial loss on account of such liability would
be limited to circumstances in which that Portfolio had inadequate
insurance and was unable to meet its obligations (including indemnification
obligations) out of its assets.
As of the date of this Registration Statement, Growth Series owns a
majority interest in the Growth Portfolio and each Portfolio. However,
Growth Series has undertaken that, with respect to most matters on which
the Growth Portfolio seeks a vote of its interestholders, Growth Series
will seek a vote of its shareholders and will vote its interest in the
Growth Portfolio in accordance with their instructions.
Investments in a Portfolio have no pre-emptive or conversion rights.
Growth Portfolio is not required to hold annual meetings of investors, but
it will hold special meetings of investors when in the judgment of the
Trustees it is necessary or desirable to submit matters for an investor
vote. Investors have the right to communicate with other investors to the
extent provided in Section 16(c) of the 1940 Act in connection with
requesting a meeting of investors for the purpose of removing one or more
Trustees, which removal requires a two-thirds vote of Growth Portfolio's
beneficial interests. Investors also have under certain circumstances the
right to remove one or more Trustees without a meeting. Upon liquidation of
a Portfolio, investors would be entitled to share pro rata in that
Portfolio's net assets available for distribution to investors.
Each Portfolio annually declares as a dividend all of its net
investment income, if any, which includes dividends, accrued interest and
earned discount (including both original issue and market discounts) less
applicable expenses. Each Portfolio also annually distributes substantially
all of its realized net short-term capital gain (the excess of short-term
capital gains over short-term capital losses), net capital gain (the excess
of net long-term capital gain over net short-term capital loss) and net
gains from foreign currency transactions, if any. Each Portfolio may make
an additional dividend or other distribution if necessary to avoid a 4%
excise tax on certain undistributed income and gain.
Under the current method of the Portfolios' operation, they are not
subject to any income tax. However, each investor in a Portfolio is taxable
on its share (as determined in accordance with the governing instruments of
the Growth Portfolio and the Internal Revenue Code of 1986, as amended
("Code") and the regulations promulgated thereunder) of that Portfolio's
income, gains, losses, deductions, and credits in determining its income
tax liability. The determination of such share will be made in accordance
with the Code and the regulations promulgated thereunder. It is intended
that each Portfolio's assets, income and distributions will be managed in
such a way that an investor in a Portfolio will be able to satisfy the
requirements of Subchapter M of the Code, assuming that the investor
invested all of its assets in the Portfolio. See Part B for a discussion of
the foregoing tax matters and certain other matters.
Investor inquiries may be directed to Chancellor LGT Asset
Management at the following address: 50 California Street, 27th Floor,
San Francisco, CA 94111.
Item 7. PURCHASE OF SECURITIES.
-------------------------------
Beneficial interests in each Portfolio are issued solely in private
placement transactions that do not involve any "public offering" within the
meaning of Section 4(2) of the 1933 Act. See "General Description of
Registrant" above.
A-2
<PAGE>
An investment in a Portfolio may be made without a sales load at the
NAV next determined after an order is received in "good order" by a
Portfolio. There is no minimum initial or subsequent investment in a
Portfolio. However, investments must be made in federal funds (i.e., monies
credited to the account of a Portfolio's custodian bank by a Federal
Reserve Bank). Each investor in a Portfolio may add to or reduce its
investment in the Portfolio on each day the New York Stock Exchange
("NYSE") is open for trading.
Information on the time and method of valuation of the Portfolios'
assets is incorporated by reference from the section entitled "Calculation
of Net Asset Value" in the Feeder's Part A.
Each Portfolio reserves the right to cease accepting investments at any
time or to reject any investment order.
Item 8. REDEMPTION OR REPURCHASE.
---------------------------------
An investor in a Portfolio may redeem any portion or all of its
investment at any time at the NAV next determined after a request in "good
order" is furnished by the investor to that Portfolio. The proceeds of a
redemption will be paid by a Portfolio in federal funds normally on the
next business day after the redemption is effected, but in any event within
seven days. Investments in a Portfolio may not be transferred.
The right of any investor to receive payment with respect to any
redemption may be suspended or the payment of the proceeds therefrom
postponed during any period (1) when the NYSE is closed (other than
customary weekend or holiday closings) or trading on the NYSE is restricted
as determined by the SEC, (2) when an emergency exists, as defined by the
SEC, which would prohibit a Portfolio in disposing of its portfolio
securities or in fairly determining the value of its assets, or (3) as the
SEC may otherwise permit.
Item 9. PENDING LEGAL PROCEEDINGS.
----------------------------------
Not applicable.
A-3
<PAGE>
PART B
GLOBAL INVESTMENT PORTFOLIO
PART B
Part B of this Registration Statement should be read only in
conjunction with Part A. Capitalized terms used in Part B and not otherwise
defined have the meanings given them in Part A of this Registration
Statement.
Responses to certain Items required to be included in Part B of this
Registration Statement are incorporated herein by reference from the Feeder
Registration Statement. Part B of the Feeder Registration Statement
includes the joint statement of additional information of the GT Global
America Small Cap Growth Fund and GT Global America Value Fund
(collectively, "Feeder's Part B").
Item 10. COVER PAGE.
--------------------
Not applicable.
Item 11. TABLE OF CONTENTS.
---------------------------
Page
----
General Information and History...................................B-1
Investment Objectives and Policies................................B-1
Management of the Growth Portfolio................................B-1
Control Persons and Principal Holders of Interests................B-2
Investment Advisory and Other Services............................B-2
Brokerage Allocation and Other Practices..........................B-3
Capital Stock and Other Securities................................B-3
Purchase, Redemption and Pricing of Interests.....................B-4
Tax Status........................................................B-4
Underwriters......................................................B-4
Calculation of Performance Data...................................B-5
Financial Statements..............................................B-5
Item 12. GENERAL INFORMATION AND HISTORY.
-----------------------------------------
Not applicable.
Item 13. INVESTMENT OBJECTIVES AND POLICIES.
--------------------------------------------
Part A contains basic information about the investment objectives,
policies and limitations of the Portfolios. This Part B supplements the
discussion in Part A of the investment objectives, policies and limitations
of the Portfolios.
Information on the fundamental investment limitations and the
non-fundamental investment policies and limitations of the Portfolios, the
types of securities bought and investment techniques used by the
Portfolios, and certain risks attendant thereto, as well as other
information on the Portfolios' investment programs, is incorporated by
reference from the sections entitled "Investment Objectives and Policies,"
"Options and Futures," "Risk Factors," "Investment Limitations" and
"Execution of Portfolio Transactions" in the Feeder's Part B.
Item 14. MANAGEMENT OF THE GROWTH PORTFOLIO.
--------------------------------------------
Information about the Trustees and Officers of the Growth Portfolio,
and their roles in management of the Portfolios and other G.T. Global
Mutual Funds, is incorporated herein by reference from the section entitled
"Trustees and Executive Officers" in the Feeder's Part B.
The Board of Trustees has a Nominating and Audit Committee, comprised
of Ms. Quigley and Messrs. Anderson, Bayley and Patterson, which is
responsible for nominating persons to serve as Trustees, reviewing audits
of Growth Portfolio and its Portfolios recommending firms to serve as
independent auditors for Growth Portfolio. Each of the Trustees and
officers of the Growth Portfolio is also a Director and officer of G.T.
Investment Portfolios, Inc., G.T. Investment Funds, Inc., G.T. Global
Developing Markets Fund, Inc. and G.T. Global Floating Rate Fund, and a
Trustee and officer of G.T. Global Growth Series, G.T. Global Eastern
<PAGE>
Europe Fund, G.T. Global Variable Investment Trust, G.T. Global Variable
Investment Series, Global Investment Portfolio, Global High Income
Portfolio and Floating Rate Portfolio, which also are registered investment
companies managed and administered by Chancellor LGT Asset Management. Each
Trustee and Officer serves in total as a Director, Trustee and/or Officer,
respectively, of 12 registered investment companies with 41 series managed
or administered by Chancellor LGT Asset Management.
The Company pays each of its Trustees who is not an employee, officer
or director of the Manager, GT Global or GT Services $5,000 per year plus
$300 for each meeting of the board or any committee thereof attended by the
Trustee. Each Portfolio pays each of its Trustees who is not an employee,
officer or director of the Manager, GT Global or GT Services $500 per year
plus $150 for each meeting of the board or any committee thereof attended
by the Trustees. For the fiscal year ended December 31, 1996, the Small Cap
Portfolio and Value Portfolio paid Mr. Anderson, Mr. Bayley, Mr. Patterson
and Ms. Quigley Trustees' fees and expense reimbursements of $3,025,
$3,025, $2,725 and $3,025 each. For the fiscal year ended December 31,
1996, Mr. Anderson, Mr. Bayley, Mr. Patterson and Ms. Quigley, who are not
directors, officers or employees of Chancellor LGT Asset Management or any
affiliated company, each received total compensation of $87,600, $87,600,
$80,100 and $87,600, respectively, from the investment companies managed or
administered by Chancellor LGT Asset Management for which he or she served
as a Director or Trustee. Fees and expenses disbursed to the Trustees
contained no accrued or payable pension, or retirement benefits.
As of the date of this filing, the officers and Trustees and their
families as a group owned in the aggregate beneficially or of record less
than 1% of the outstanding interests of each Portfolio.
Item 15. CONTROL PERSONS AND PRINCIPAL HOLDERS OF BENEFICIAL INTERESTS.
-----------------------------------------------------------------------
As of the date of this filing, GT Global America Small Cap Growth Fund
and GT Global America Value Fund (each a "Fund," and collectively, the
"Funds") owned 99.9%% and 99.9% of the value of the outstanding beneficial
interests in Small Cap Portfolio and Value Portfolio, respectively (a
"corresponding Portfolio"). Because each Fund currently controls its
corresponding Portfolio, each Fund may take actions affecting its
corresponding Portfolio without the approval of any other investor.
Each Fund has informed its corresponding Portfolio that whenever a Fund
is requested to vote on any proposal of its corresponding Portfolio, it
will hold a meeting of shareholders and will cast its vote as instructed by
its shareholders. It is anticipated that other investors in each Portfolio
will follow the same or a similar practice.
Item 16. INVESTMENT ADVISORY AND OTHER SERVICES.
---------------------------------------------------
Information on the investment management and other services provided
for or on behalf of the Portfolios is incorporated herein by reference from
the sections entitled "Management," "Trustees and Executive Officers" and "
Additional Information" in the Feeder's Part B. The following list
identifies the specific sections in the Feeder's Part B under which the
information required by Items 16 of Form N-1A may be found; each section is
incorporated herein by reference.
Item 16 (a) Management; Additional Information
Item 16 (b) Management
Item 16 (c) Not applicable
Item 16 (d) Management
Item 16 (e) Not applicable
Item 16 (f) Not applicable
Item 16 (g) Not applicable
Item 16 (h) Additional Information
Item 16 (i) Not applicable
For the fiscal period October 18, 1995 (commencement of operations) to
December 31, 1995, the Small Cap Portfolio and Value Portfolio paid
investment management and administration fees to Chancellor LGT Asset
Management in the amount of $1,293 and $622, respectively. For the period
October 18, 1995 (commencement of operations) to December 31, 1995,
Chancellor LGT Asset Management reimbursed the Small Cap Portfolio and
Value Portfolio for these respective investment management and
administration fees in the amounts of $1,293 and $622, respectively. For
the fiscal year ended December 31, 1996, the Small Cap Portfolio and Value
Portfolio paid investment management and administration fees to Chancellor
LGT Asset Management in the amounts of $73,312 and $27,487, respectively.
B-2
<PAGE>
For the fiscal year ended December 31, 1996, Chancellor LGT Asset
Management reimbursed the Small Cap Portfolio and Value Portfolio for their
respective investment management and administration fees in the amounts of
$170,585 and $206,892, respectively.
Item 17. BROKERAGE ALLOCATION AND OTHER PRACTICES.
--------------------------------------------------
A description of the Portfolios' brokerage allocation and other
practices is incorporated herein by reference from the section entitled
"Execution of Portfolio Transactions" in the Feeder's Part B.
Item 18. CAPITAL STOCK AND OTHER SECURITIES.
--------------------------------------------
Under the Declaration of Trust, the Trustees are authorized to issue
beneficial interests in each Portfolio. An investor in a Portfolio is
entitled to participate pro rata in distributions of the Portfolio's income
and gains and to be allocated a pro rata share of the Portfolio's income,
gains, losses, deductions, and credits. Upon liquidation or dissolution of
a Portfolio, investors are entitled to share pro rata in that Portfolio's
net assets available for distribution to its investors. Investments in a
Portfolio have no preference, preemptive, conversion or similar rights.
Investments in each Portfolio may not be transferred.
Each investor in a Portfolio is entitled to a vote in proportion to the
amount of its investment in that Portfolio. Investors in the Portfolios
will all vote together in certain circumstances (e.g., election of the
Trustees and auditors, and as required by the 1940 Act and the rules
thereunder). Investors in a Portfolio do not have cumulative voting rights,
and investors holding more than 50% of the aggregate beneficial interest in
Growth Portfolio or in a Portfolio, as the case may be, may control the
outcome of these votes. Growth Portfolio is not required to hold annual
meetings of investors but Growth Portfolio will hold special meetings of
investors when (1) a majority of the Trustees determines to do so; or (2)
investors holding at least 10% of the interests in Growth Portfolio (or a
Portfolio) request in writing a meeting of investors in Growth Portfolio
(or a Portfolio). No amendment required to be approved by investors by law
may be made to Growth Portfolio's Declaration of Trust without the
affirmative majority vote of investors (with the vote of each being in
proportion to the amount of its investment).
Growth Portfolio may enter into a merger or consolidation, or sell all
or substantially all of its (or a Portfolio's) assets, upon such terms and
conditions and for such consideration when and as authorized by the
Trustees. Any such merger shall be deemed for all such purposes to have
been accomplished under and pursuant to the law of the State of New York. A
Portfolio may also be dissolved (i) upon liquidation and distribution of
its assets, if approved by the vote of two-thirds of the beneficial
interests in such Portfolio (with the vote of each being in proportion to
the amount of their investment), (ii) by the Trustees by written notice to
its investors, or (iii) 120 days after a holder of beneficial interests in
a Portfolio either (a) makes an assignment for the benefit of creditors, or
(b) files a voluntary petition in bankruptcy, or (c) is adjudged a bankrupt
or insolvent or has entered against it an order for relief in any
bankruptcy or insolvency proceeding, or (d) files a petition or answer
seeking for itself any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any
bankruptcy statute or regulation, or (e) files an answer or other pleading
admitting or failing to contest the material allegations of a petition
filed against it in any proceeding referred to in clauses (c) or (d) above,
or (f) seeks, consents to or acquiesces in the appointment of a trustee,
receiver or liquidator of such holder of beneficial interest or of all or
any substantial part of its properties, or (g) is expelled from the
Portfolio, whichever occurs first. However, within such 120 days, holders
of beneficial interests of the Portfolio (excluding the holder with respect
to which an event described in (a) - (vg) has occurred) owning a majority
of the beneficial interests in a Portfolio may vote to continue its
business, even if such a dissolution has occurred.
Growth Portfolio is organized as a New York common law trust. Investors
in each Portfolio will be held personally liable for its obligations and
liabilities, subject, however, to indemnification by that Portfolio in the
event that there is imposed upon an investor a greater portion of the
liabilities and obligations of that Portfolio than its proportionate
beneficial interest in such Portfolio. The Declaration of Trust also
provides that each Portfolio may maintain appropriate insurance (for
example, fidelity bonding and errors and omissions insurance) covering
certain kinds of potential liabilities. Thus, the risk of an investor
incurring financial loss on account of investor liability is limited to
circumstances in which both inadequate insurance existed and the investor's
Portfolio itself was unable to meet its obligations.
B-3
<PAGE>
The Declaration of Trust further provides that obligations of each
Portfolio are not binding upon the Trustees individually but only upon the
property of that Portfolio and that the Trustees will not be liable for any
action or failure to act, but nothing in the Declaration of Trust protects
a Trustee against any liability to which he would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his or her office. The
Declaration of Trust provides that the Trustees and officers will be
indemnified by Growth Portfolio against liabilities and expenses incurred
in connection with litigation in which they may be involved because of
their offices with Growth Portfolio, unless, as to liability to Growth
Portfolio or its investors, it is finally adjudicated that they engaged in
willful misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in their offices, or unless with respect to any other
matter it is finally adjudicated that they did not act in good faith in the
reasonable belief that their actions were in the best interests of the
Growth Portfolio. In the case of settlement, such indemnification will not
be provided unless it has been determined by a court or other body
approving the settlement or other disposition, or by a reasonable
determination, based upon a review of readily available facts, by vote of a
majority of disinterested Trustees or in a written opinion of independent
counsel, that such officers or Trustees have not engaged in willful
misfeasance, bad faith, gross negligence or reckless disregard of their
duties.
Item 19. PURCHASE, REDEMPTION AND PRICING OF SECURITIES.
--------------------------------------------------------
Beneficial interests in each Portfolio are issued solely in private
placement transactions which do not involve any "public offering"
within the meaning of Section 4(2) of the 1933 Act, as amended. See
Items 4 and 7 in Part A.
Information on the method followed by the Portfolios in determining
their net asset value and the timing of such determination is incorporated
by reference from the section entitled "Valuation of Fund Shares" in the
Feeder's Part B. See also Items 7 & 8 in Part A.
Each Portfolio reserves the right, if conditions exist which make cash
payments undesirable, to honor any request for redemption or repurchase
order by making payment in whole or in part in readily marketable
securities chosen by that Portfolio and valued as they are for purposes of
computing the Portfolio's NAV (a redemption in kind). If payment is made in
securities, an investor may incur transaction expenses in selling any such
securities so received and would be subject to any increase or decrease in
the value of the securities until they were sold.
Each investor in a Portfolio may add to or reduce its investment in
that Portfolio on each day that the NYSE is open for trading. At the close
of trading, on each such day, the value of each investor's interest in a
Portfolio will be determined by multiplying the NAV of such Portfolio by
the percentage representing that investor's share of the aggregate
beneficial interests in that Portfolio. Any additions or reductions which
are to be effected on that day will then be effected. The investor's
percentage of the aggregate beneficial interests in a Portfolio will then
be recomputed as the percentage equal to the fraction (i) the numerator of
which is the value of such investor's investment in the Portfolio as of the
close of trading on such day plus or minus, as the case may be, the amount
of net additions to or reductions in the investor's investment in that
Portfolio effected on such day, and (ii) the denominator of which is the
aggregate NAV of the Portfolio as of the close of trading on such day plus
or minus, as the case may be, the amount of the net additions to or
reductions in the aggregate investments in that Portfolio by all investors
in that Portfolio. The percentage so determined will then be applied to
determine the value of the investor's interest in that Portfolio as of the
close of trading on the following day the NYSE is open for trading.
Item 20. TAX STATUS.
--------------------
Information on the taxation of the Portfolios is incorporated by
reference from the section entitled "Taxes" in the Feeder's Part B.
Item 21. UNDERWRITERS.
----------------------
Not applicable.
B-4
<PAGE>
Item 22. CALCULATION OF PERFORMANCE DATA.
-----------------------------------------
Not applicable.
Item 23. FINANCIAL STATEMENTS.
------------------------------
The financial statements of each Portfolio for the fiscal year ended
December 31, 1996, are included herein, in reliance on the report of
Coopers & Lybrand L.L.P., independent auditors, given on the authority of
said firm as experts in auditing and accounting.
B-5
<PAGE>
PART C
Item 24. FINANCIAL STATEMENTS AND EXHIBITS.
-------------------------------------------
(a) Financial Statements
The following financial statements as of December 31, 1996,
and for the fiscal year then ended for Small Cap Portfolio and Value
Portfolio are included herewith.
--Report of Independent Accountants
--Portfolios of Investments
--Statements of Assets and Liabilities
--Statements of Operations
--Statements of Changes in Net Assets
--Supplementary Data
--Notes to Financial Statements
(b) Exhibits
1. Amended and Restated Declaration of Trust of the
Registrant. (1)
2. Form of By-Laws of the Registrant. (1)
5. Investment Management and Administration Contract
between the Registrant and Chancellor LGT Asset
Management. (1)
8. Custodian Agreement between the Registrant and
State Street Bank and Trust Company. (1)
9. Transfer Agency Agreement between the Registrant
and GT Services. (1)
11. Consent of Coopers & Lybrand L.L.P., Independent
Accountants - Filed herewith.
13. Investment representation letters of initial
investors. (2)
27. Financial Data Schedules - Filed herewith.
-------------------------------
(1) Incorporated by reference to the identically enumerated Exhibit or the
Registration Statement on Form N-1A, filed on October 17, 1995.
(2) Incorporated by reference to the identically enumerated Exhibit Of
Post-Effective Amendment No. 1 to the Registration Statement on
Form N-1A, filed on April 29, 1996.
Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
-----------------------------------------------------------------------
Not applicable.
Item 26. NUMBER OF HOLDERS OF SECURITIES.
-----------------------------------------
(1) (2)
Title of Class Number of Record Holders
Series of Beneficial (as of April 15, 1997)
Interests
Small Cap Portfolio 2
Value Portfolio 2
Item 27. INDEMNIFICATION.
-------------------------
Reference is hereby made to Article V of the Registrant's Declaration
of Trust, filed as Exhibit 1 to the Registration Statement on Form N-1A,
filed on October 17, 1995.
C-1
<PAGE>
The Registrant's Trustees and officers are insured under a directors
and officers/errors and omissions liability insurance policy and the
Registrant is insured under a fidelity bond required by Rule 17g-1 under
the 1940 Act.
Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
--------------------------------------------------------------
Information as to any other business, profession, vocation or
employment of a substantial nature in which each director or officer of
Chancellor LGT Asset Management is, or at any time during the past two
years has been, engaged for his or her own account or in the capacity of
director, officer, employee, partner or trustee is incorporated herein by
reference from the section entitled "Management" in the Feeder's Part A and
the sections entitled "Trustees and Executive Officers" and "Management" in
the Feeder's Part B.
Information as to the directors and officers of Chancellor LGT Asset
Management, the Registrant's investment manager, is included in such
manager's Form ADV (File No. 801-10254), filed with the SEC, which is
incorporated herein by reference thereto.
Item 29. PRINCIPAL UNDERWRITERS.
--------------------------------
Not applicable.
Item 30. LOCATION OF ACCOUNTS AND RECORDS.
------------------------------------------
Accounts, books and other records required by Rules 31a-1 and 31a-2
under the 1940 Act, are maintained and held in the offices of the
Registrant and its investment manager, Chancellor LGT Asset Management, 50
California Street, 27th Floor, San Francisco, California 94111.
Records covering shareholder accounts and portfolio transactions are
also maintained and kept by the Registrant's Custodian, State Street Bank
and Trust Company, 225 Franklin Street, Boston, Massachusetts 02110.
Item 31. MANAGEMENT SERVICES.
-----------------------------
Other than as set forth in Parts A and B of this Registration
Statement, the Registrant is not a party to any management-related service
contract.
Item 32. UNDERTAKINGS.
----------------------
None.
C-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Investment Company Act of 1940,
Registrant has duly caused this Registration Statement on Form N-1A to be
signed on its behalf by the undersigned, thereunto duly authorized, in the
City of San Francisco and State of California on the 30th day of April,
1997.
GROWTH PORTFOLIO
By /s/ David J. Thelander
----------------------
David J. Thelander
Assistant Secretary
<PAGE>
SMALL CAP PORTFOLIO
VALUE PORTFOLIO
REPORT OF
INDEPENDENT ACCOUNTANTS
- -------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of Growth Portfolio:
We have audited the accompanying statements of assets and liabilities of Small
Cap Portfolio and Value Portfolio, including the portfolios of investments, as
of December 31, 1996, and the related statements of operations for the year then
ended, the statements of changes in net assets and the supplementary data for
each of the periods indicated herein. These financial statements and the
supplementary data are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and the
supplementary data based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and supplementary
data are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1996, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and the supplementary data referred to
above present fairly, in all material respects, the financial position of the
Small Cap Portfolio and Value Portfolio, as of December 31, 1996, the results of
their operations for the year then ended, the changes in their net assets and
the supplementary data for each of the periods indicated herein, in conformity
with generally accepted accounting principles.
COOPERS & LYBRAND
L.L.P.
Boston, Massachusetts
February 14, 1997
<PAGE>
SMALL CAP PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1996
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Value % of Net
Equity Investments Country Shares (Note 1) Assets
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SERVICES (31.2%)
Caribiner International, Inc. + US 17,700 889,425 4.5
CONSUMER SERVICES
Extended Stay America, Inc. + US 33,200 668,150 3.4
LEISURE & TOURISM
The Sports Authority, Inc. + US 29,250 636,188 3.3
RETAILERS-OTHER
Proffitt's, Inc. + US 14,456 533,065 2.7
RETAILERS-OTHER
Quality Dining, Inc. + US 28,400 507,650 2.6
RESTAURANTS
WinStar Communications, Inc. + US 20,900 438,900 2.3
WIRELESS COMMUNICATIONS
Hughes Supply, Inc. US 9,800 422,625 2.2
CONSUMER SERVICES
Measurex Corp. US 16,900 405,600 2.1
CONSUMER SERVICES
Harveys Casino Resorts US 23,000 388,125 2.0
LEISURE & TOURISM
Intercel, Inc. + US 25,000 306,250 1.6
WIRELESS COMMUNICATIONS
Stein Mart, Inc. + US 14,700 297,675 1.5
RETAILERS-OTHER
Rio Hotel and Casino, Inc. + US 11,700 171,113 0.9
LEISURE & TOURISM
Players International, Inc. + US 30,300 162,863 0.8
LEISURE & TOURISM
Lamar Advertising Co. + US 5,000 121,250 0.6
BUSINESS & PUBLIC SERVICES
Grey Advertising, Inc. US 300 75,000 0.4
BUSINESS & PUBLIC SERVICES
Marker International + US 10,000 53,750 0.3
WHOLESALE & INTERNATIONAL TRADE
-----------------
6,077,629
-----------------
CONSUMER DURABLES (15.4%)
-------------------------
Ethan Allen Interiors, Inc. US 25,100 966,345 4.9
HOUSING
Syratech Corp. + US 27,600 869,400 4.5
APPLIANCES & HOUSEHOLD
Champion Enterprises, Inc. + US 38,068 742,326 3.8
HOUSING
Southern Energy Homes, Inc. + US 20,100 231,150 1.2
HOUSING
REX Stores Corp. + US 24,700 200,688 1.0
CONSUMER ELECTRONICS
-----------------
3,009,909
-----------------
<PAGE>
FINANCE (14.1%)
---------------
Sovereign Bancorp, Inc. US 47,500 623,438 3.2
BANKS-REGIONAL
Storage USA, Inc. US 15,500 583,188 3.0
REAL ESTATE
Bradley Real Estate, Inc. US 22,800 410,400 2.1
REAL ESTATE INVESTMENT TRUST
Mid-America Apartment Communities, Inc. US 9,800 282,975 1.5
REAL ESTATE
Toronto-Dominion Bank T; CAN 9,219 235,085 1.2
BANKS-REGIONAL
AmVestors Financial Corp. US 15,900 234,525 1.2
INSURANCE-LIFE
Game Financial Corp. + US 26,900 201,750 1.0
CONSUMER FINANCE
Union Planters Corp. US 4,575 178,425 0.9
BANKS-REGIONAL
-----------------
2,749,786
-----------------
CAPITAL GOODS (13.4%)
---------------------
Belden, Inc. US 22,000 814,000 4.2
ELECTRICAL PLANT/EQUIPMENT
Tekelec + US 40,000 630,000 3.2
TELECOM EQUIPMENT
Plasma & Materials Technologies, Inc. + US 37,500 440,625 2.3
ELECTRICAL PLANT/EQUIPMENT
Belmont Homes, Inc. + US 42,600 410,025 2.1
CONSTRUCTION
American Buildings Co. + US 9,500 226,813 1.2
CONSTRUCTION
Cuno, Inc. + US 5,500 81,813 0.4
ENVIRONMENTAL
-----------------
2,603,276
-----------------
TECHNOLOGY (5.6%)
-----------------
Dallas Semiconductor Corp. US 24,300 558,900 2.9
SEMICONDUCTORS
Logicon, Inc. US 14,300 521,950 2.7
SOFTWARE
-----------------
1,080,850
-----------------
MATERIALS/BASIC INDUSTRY (4.9%)
-------------------------------
Falcon Building Products, Inc. + US 32,700 482,325 2.5
BUILDING MATERIALS & COMPONENTS
Fibreboard Corp. + US 11,500 388,125 2.0
PAPER/PACKAGING
Commercial Intertech Corp. US 5,500 74,938 0.4
METALS - NON-FERROUS
-----------------
945,388
-----------------
<PAGE>
CONSUMER NON-DURABLES (4.0%)
----------------------------
Coachmen Industries, Inc. US 27,300 774,638 4.0
RECREATION
HEALTH CARE (1.8%)
Cohr, Inc. + US 12,800 345,600 1.8
MEDICAL TECHNOLOGY & SUPPLIES
TOTAL EQUITY INVESTMENTS
----------------------------------
(cost $18,365,112) 17,587,076 90.4
----------------------------------
Value % of Net
Repurchase Agreement (Note 1) Assets
-----------------------------------------------------------------------------------------------------------------------
Dated December 31, 1996, with State Street Bank & Trust Co., due January 2, 9.5
1997.
for an effective yield of 6.25%, collateralized by 1,841,320 1,841,320
$1,570,000 U.S. Treasury Bond, 8.125% due 8/15/19 (market value of
collateral is $1,883,365, including accrued interest).
(cost $1,841,320)
TOTAL INVESTMENTS
(cost $20,206,432) * 19,428,396 99.9
Other Assets and Liabilities 18,852 0.1
======================================================================================================================
NET ASSETS $19,447,248 100.0
======================================================================================================================
</TABLE>
+ Non-income producing security.
T U.S. currency denominated.
; Country of origin for this security is Canada. All other securities on
this portfolio originate from the U.S.
* For Federal income tax purposes, cost is $20,242,867 and appreciation
(depreciation) is as follows:
Unrealized appreciation: $1,368,000
Unrealized depreciation: (2,182,471)
-------------------
Net unrealized appreciation: $(814,471)
===================
The accompanying notes are an integral part of the financial statements.
<PAGE>
VALUE PORTFOLIO
Portfolio of Investments
December 31, 1996
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Value % of Net
Equity Investments Country Shares (Note 1) Assets
---------------------------------------------------------------------------------------------------------------------------
Finance (28.4%)
---------------
<S> <S> <C> <C> <C>
Travelers Group, Inc. US 5,600 254,100 3.1
Insurance - Multi-Line
Alllstate Corp. US 3,575 206,903 2.5
Insurance - Multi-Line
Chase Manhattan Corp. US 2,275 203,044 2.4
Banks-Money Center
BankAmerica Corp. US 1,675 167,081 2.0
Banks-Super Regional
First Union Corp. (N.C.) US 2,250 166,500 2.0
Banks-Super Regional
Student Loan Marketing Association US 1,775 165,297 2.0
Other Financial
Norwest Corp. US 3,725 162,038 1.9
Other Financial
NationsBank Corp. US 1,650 161,288 1.9
Banks-Super Regional
Aetna, Inc. US 1,800 144,000 1.7
Insurance-Life
Exel Ltd. US 3,400 128,775 1.5
Insurance - Property-Casualty
Simon DeBartolo Group, Inc. US 3,150 97,650 1.2
Real Estate Investment Trust
Bankers Trust New York Corp. US 975 84,094 1.0
Banks-Money Center
Household International, Inc. US 900 83,025 1.0
Other Financial
Corestates Financial Corp. US 1,550 80,406 1.0
Banks-Super Regional
Starwood Lodging Trust US 1,350 74,419 0.9
Real Estate Investment Trust
Beacon Properties Corp. US 1,350 49,444 0.6
Real Estate Investment Trust
Highwoods Properties, Inc. US 1,425 48,094 0.6
Real Estate Investment Trust
Equity Residential Property Trust US 1,075 44,344 0.5
Real Estate Investment Trust
Felcor Suite Hotels, Inc. US 1,225 43,334 0.5
Real Estate
---------------------
2,363,836
---------------------
<PAGE>
Services (22.5%)
----------------
Tuesday Morning Corp. + US 13,200 282,145 3.4
Retailers-Other
AT&T Corp. US 5,650 245,775 3.0
Telephone - Long Distance
Dayton Hudson Corp. US 5,450 213,913 2.6
Retailers-Other
Burlington Northern, Inc. US 2,400 207,300 2.5
Transportation - Road & Rail
Sears, Roebuck and Co. US 4,350 200,644 2.4
Retailers-Other
GTE Corp. US 3,825 174,038 2.1
Telephone Networks
Time Warner, Inc. US 4,225 158,438 1.9
Broadcasting & Publishing
Federated Department Stores, Inc. + US 3,700 126,263 1.5
Retailers-Apparel
Comcast Corp. "A" US 5,075 90,398 1.1
Cable Television
The Limited, Inc. US 4,725 86,822 1.0
Retailers-Apparel
Telefonica De Peru - ADR T; PERU 4,400 83,050 1.0
Telephone Networks
---------------------
1,868,786
---------------------
Energy (18.3%)
--------------
Tosco Corp. US 2,400 189,900 2.3
Gas Production & Distribution
Amerada Hess Corp. US 2,925 169,284 2.0
Oil
Texaco, Inc. US 1,725 169,266 2.0
Oil
CMS Energy Corp. US 3,950 132,819 1.6
Energy Equipment & Services
Illinova Corp. US 4,775 131,313 1.6
Energy Equipment & Services
Occidental Petroleum Corp. US 5,350 125,056 1.5
Oil
Amoco Corp. US 1,100 88,550 1.1
Oil
Edison International US 4,400 87,450 1.1
Electrical & Gas Utilities
Pinnacle West Capital Corp. US 2,725 86,519 1.0
Electrical & Gas Utilities
Ultramar Diamond Shamrock Corp. US 2,725 86,178 1.0
Oil
Southern Co. US 3,800 85,975 1.0
Electrical & Gas Utilities
Mobil Corp. US 700 85,575 1.0
Oil
GPU, Inc. US 2,525 84,903 1.0
Electrical & Gas Utilities
---------------------
1,522,788
---------------------
<PAGE>
Materials/Basic Industry (11.2%)
--------------------------------
Hercules, Inc. US 5,275 228,144 2.7
Chemicals
Aluminum Company of America (ALCOA) US 2,700 172,125 2.1
Metals - Non-Ferrous
W.R. Grace & Co. US 3,225 166,894 2.0
Chemicals
Union Carbide Corporate Holdings Co. US 3,725 152,259 1.8
Chemicals
Monsanto Co. US 3,250 126,344 1.5
Chemicals
Champion International Corp. US 2,000 86,500 1.0
Paper/Packaging
---------------------
932,266
---------------------
Capital Goods (7.6%)
--------------------
WMX Technologies, Inc. US 7,100 231,638 2.8
Environmental
Textron, Inc. US 1,800 169,650 2.0
Aerospace/Defense
PPG Industries, Inc. US 2,800 157,150 1.9
Machinery & Engineering
AlliedSignal, Inc. + US 1,150 77,050 0.9
Aerospace/Defense
---------------------
635,488
---------------------
Consumer Non-Durables (5.0%)
----------------------------
Philip Morris Cos., Inc. US 2,450 275,931 3.3
Food
RJR Nabisco Holdings Corp. US 2,675 90,950 1.1
Tobacco
Fruit of the Loom, Inc. + US 1,200 45,450 0.6
Textiles & Apparel
---------------------
412,331
---------------------
Consumer Durables (4.9%)
------------------------
Ford Motor Co. US 6,550 208,781 2.5
Automobiles
Chrysler Corp. US 6,125 202,125 2.4
Automobiles
---------------------
410,906
---------------------
Technology (2.7%)
-----------------
3Com Corp. + US 3,000 220,125 2.7
Networking
<PAGE>
Health Care (2.5%)
------------------
Schering-Plough Corp. US 1,800 116,550 1.4
Pharmaceuticals
Meditrust Corp. US 2,300 92,000 1.1
Health Care Services
---------------------
208,550
---------------------
TOTAL EQUITY INVESTMENTS
------------------------------------
(cost $8,590,364) 8,575,076 103.1
------------------------------------
Value % of Net
Repurchase Agreement (Note 1) Assets
--------------------------------------------------------------------------------------------------------------------------
Dated December 31, 1996, with State Street Bank and 335,058 4.0
Trust Company, due January 2, 1997, for an effective
yield of 6.25%, collateralized by $285,000 U.S.
Treasury Bonds, 8.125% due 8/15/19 (market value of
collateral is $341,948, including accrued interest
(cost $335,058)
TOTAL INVESTMENTS
(cost $8,925,422) * 8,910,134 107.1
Other Assets and Liabilities (593,868) (7.1)
=======================================================================================================================
NET ASSETS $8,316,266 100.0
=======================================================================================================================
</TABLE>
+ Non-income producing security.
T U.S. currency denominated.
; Country of origin for this security is Peru. All other securities on
this portfolio originate from the U.S.
* For Federal income tax purposes, cost is $8,932,288 and appreciation
(depreciation) is as follows:
Unrealized appreciation: $247,944
Unrealized depreciation: (270,098)
-----------------
Net unrealized depreciation: ($22,154)
=================
The accompanying notes are an integral part of the financial
statements.
<PAGE>
<TABLE>
<CAPTION>
SMALL CAP PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1996
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets:
Investments in securities, at value (cost $20,206,432)(Note 1) $19,428,396
U.S. currency 719
Unamortized organizational costs (Note 1) 18,972
Dividends receivable 5,419
Cash held as collateral for securities loaned (Note 1) 383,400
-----------
Total assets 19,836,906
-----------
Liabilities:
Payable for Trustees' fees and expenses (Note 2) 3,653
Payable for custodian fees 1,246
Payable for professional fees 484
Other accrued expenses 875
Collateral for securities loaned (Note 1) 383,400
-----------
Total liabilities 389,658
-----------
===========
Net assets $19,447,248
===========
Net assets consist of:
Paid in capital $18,810,482
Accumulated net investment income 150,113
Accumulated net realized gain on investments and foreign currency transactions 1,264,689
Net unrealized depreciation of investments (778,036)
============
Total - representing net assets applicable to shares of beneficial interest outstanding $19,447,248
============
The accompanying notes are an integral part of the financial statements.
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -------------------------------------------------------------------------------
VALUE PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1996
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Assets:
Investments in securities, at value (cost $8,925,422) (Note 1) $ 8,910,134
U.S. currency 458
Receivable for securities sold 375,200
Dividends receivable 19,245
Unamortized organizational costs (Note 1) 18,972
-----------
Total assets 9,324,009
-----------
Liabilities:
Borrowings (Note 1) 1,000,000
Payable for Trustees' fees and expenses (Note 2) 3,653
Payable for custodian fees 847
Payable for professional fees 484
Other accrued expenses 2,759
-----------
Total liabilities 1,007,743
-----------
Net assets $ 8,316,266
===========
Net assets consist of:
Paid in capital $ 7,548,356
Accumulated net investment income 49,294
Accumulated net realized gain on investments and foreign currency transactions 733,904
Net unrealized depreciation of investments (15,288)
-----------
Total - representing net assets applicable to shares of beneficial interest outstanding $ 8,316,266
===========
</TABLE>
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
- -------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
SMALL CAP PORTFOLIO
STATEMENT OF OPERATIONS
Year ended December 31, 1996
<S> <C> <C>
Investment income:
Interest income (Note 1) $ 139,343
Dividend income (net of foreign withholding tax of $284) 100,331
Other income 13,476
-----------
Total investment income 253,150
-----------
Expenses:
Investment management and administration fees (Note 2) 73,312
Legal fees 13,176
Custodian fees 9,620
Amortization of organization costs (Note 1) 5,014
Trustees' fees and expenses (Note 2) 3,660
Audit fees 2,000
Other expenses 1,000
-----------
Total expenses 107,782
-----------
Net investment income 145,368
-----------
Net realized and unrealized gain (loss) on investments: (Note 1)
Net realized gain on investments 1,264,693
Net realized loss on foreign currency transactions (4)
-------------
Net realized gain during the year 1,264,689
Net change in unrealized depreciation of investments (782,829)
-------------
Net unrealized depreciation during the year (782,829)
-----------
Net realized and unrealized gain on investments 481,860
-----------
Net increase in net assets resulting from operations $ 627,228
===========
The accompanying notes are an integral part of the financial statements.
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -------------------------------------------------------------------------------
VALUE PORTFOLIO
STATEMENT OF OPERATIONS
Year ended December 31, 1996
<TABLE>
<CAPTION>
<S> <C> <C>
Investment income: (Note 1)
Dividend income $ 73,377
Interest income 38,541
---------
Total investment income 111,918
---------
Expenses:
Investment management and administration fees (Note 2) 27,487
Custodian fees 11,920
Legal fees 10,176
Amortization of organization costs (Note 1) 5,014
Trustees' fees and expenses (Note 2) 3,660
Audit fees 2,000
Other expenses 1,000
---------
Total expenses 61,257
---------
Net investment income 50,661
---------
Net realized and unrealized gain (loss) on investments: (Note 1)
Net realized gain on investments 733,904
---------
Net realized gain during the year 733,904
Net change in unrealized depreciation of investments (69,965)
---------
Net unrealized depreciation during the year (69,965)
---------
Net realized and unrealized gain on investments 663,939
---------
Net increase in net assets resulting from operations $ 714,600
=========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
<TABLE>
<CAPTION>
SMALL CAP PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------------------------------------------------
Year ended Year ended
December 31, 1996 December 31, 1995
----------------------------------------------------
<S> <C> <C>
Increase in net assets
Operations:
Net investment income $145,368 $4,745
Net realized gain on investments and foreign 1,264,689 0
currency transactions
Net change in unrealized appreciation (782,829) 4,793
------------ ----------
Net increase in net assets resulting from operations 627,228 9,538
------------ ----------
Beneficial interest transactions:
Contributions 31,029,243 4,573,559
Withdrawals (15,955,572) (936,848)
------------ ----------
Net increase from beneficial interest transactions 15,073,671 3,636,711
Total increase in net assets 15,700,899 3,646,249
Net assets:
Beginning of year 3,746,349 100,100
============ ==========
End of year $19,447,248 $3,746,349
============ ==========
The accompanying notes are an integral part of the financial statements.
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
VALUE PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year ended Year ended
December 31, 1996 December 31, 1995
--------------------- ------------------
<S> <C> <C>
Increase in net assets
Operations:
Net investment income (loss) $ 50,661 $ (1,367)
Net realized gain on investments and foreign currency transactions 733,904 0
Net change in unrealized appreciation (depreciation) of investments (69,965) 54,677
------------ ------------
Net increase in net assets resulting from operations 714,600 53,310
------------ ------------
Beneficial interest transactions:
Contributions 10,565,026 1,861,769
Withdrawals (4,841,948) (136,591)
------------ ------------
Net increase from beneficial interest transactions 5,723,078 1,725,178
------------ ------------
Total increase in net assets 6,437,678 1,778,488
Net assets:
Beginning of year 1,878,588 100,100
------------ ------------
End of year $ 8,316,266 $ 1,878,588
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
- -------------------------------------------------------------------------------
<PAGE>
------------------------------------------------------------------------------
SMALL CAP PORTFOLIO
SUPPLEMENTARY DATA
------------------------------------------------------------------------------
Contained below are ratios and supplemental data that have been derived from
information provided in the financial statements.
<TABLE>
<CAPTION>
October 18, 1995
Year Ended (commencement of operations)
December 31, 1996 to December 31, 1995
--------------- --------------------------
<S> <C> <C>
Ratios and supplemental data:
Net assets, end of period (in 000's) $19,447 $3,746
Ratio of net investment income to average net assets 0.94% 1.74% a
Ratio of expenses to average net assets 0.70% 2.33% a
Portfolio turnover rate + 150% N/A
Average commission rate per share paid on portfolio + N/A
transactions $0.0489
</TABLE>
- ----------------------------------------
a Annualized
+ Portfolio turnover rate and average commission rate pain on portfolio
transactions are calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
<PAGE>
-------------------------------------------------------------------------------
VALUE PORTFOLIO
SUPPLEMENTARY DATA
-------------------------------------------------------------------------------
Contained below are ratios and supplemental data that have been derived from
information provided in the financial statements.
<TABLE>
<CAPTION>
October 18, 1995
Year (commencement of
ended operations)
December 31, 1996 to December 31, 1995
----------------- -----------------------
<S> <C> <C> <C>
Ratios and supplemental data:
Net assets, end of period (in 000's) $ 8,316 $1,879
Ratio of net investment income to average net assets 0.88% (1.04)% a
Ratio of expenses to average net assets 1.06% 4.33% a
Portfolio turnover rate + 256% N/A
Average commission rate per share paid on portfolio + N/A
transactions $0.0551
</TABLE>
- ----------------------------------------
a Annualized
+ Portfolio turnover rate and average commission rate pain on portfolio
transactions are calculated on the basis of the Portfolio as a whole without
distinguishing between the classes of shares issued.
<PAGE>
SMALL CAP PORTFOLIO
VALUE PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
- -------------------------------------------------------------------------------
1. Significant Accounting Policies
Small Cap Portfolio and Value Portfolio ("Portfolios"), are orgainized as New
York Trusts and are registered under the Investment Company Act of 1940, as
amended ("1940 Act"), as a diversified open-end management investment companies.
The following is a summary of significant accounting policies consistently
followed by the Portfolios in the preparation of the financial statements. The
policies are in conformity with generally accepted accounting principles, and,
therefore, the financial statements may include certain estimates made by
management.
(A) Portfolio Valuation
The Portfolios calculate the net asset value of and complete orders to purchase,
exchange or repurchase Portfolio shares of beneficial interest on each business
day, with the exception of those days on which the New York Stock Exchange is
closed.
Equity securities are valued at the last sale price on the exchange on which
such securities are traded or on the principal over-the-counter market on which
such securities are traded, as of the close of business on the day the
securities are being valued or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined by Chancellor LGT Asset
Management, Inc. (the "Manager") to be the primary market.
Fixed income investments are valued at the mean of representative quoted bid and
ask prices for such investments or, if such prices are not available, at prices
for investments of comparative maturity, quality and type; however, when the
Manager deems it appropriate, prices obtained for the day of valuation from a
bond pricing service will be used. Short-term investments with a maturity of 60
days or less are valued at amortized cost, adjusted for market fluctuation, if
any.
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Company's Board of Trustees.
(B) Repurchase Agreements
With respect to repurchase agreements entered into by a Portfolio (the phrase
"Portfolio" hereinafter includes each of the two Portfolios), it is the
Portfolio's policy to always receive, as collateral, United States government
securities or other high quality debt securities of which the value, including
accrued interest, is at least equal to the amount to be repaid to the Portfolio
under each agreement at its maturity.
(C) Option Accounting Principles
When a Portfolio writes a call or put option, an amount equal to the premium
received is included in the Portfolio's "Statement of Assets and Liabilities" as
an asset and an equivalent liability. The amount of the liability is
subsequently marked-to-market to reflect the current market value of the option.
The current market value of an option listed on a traded exchange is valued at
its last bid price, or, in the case of an over-the-counter option, is valued at
the average of the last bid prices obtained from brokers, unless a quotation
from only one broker is available, in which case only that broker's price will
be used. If an option expires on its stipulated expiration date or if the
Portfolio enters into a closing purchase transaction, a gain or loss is realized
without regard to any unrealized gain or loss on the underlying security, and
the liability related to such option is extinguished. If a written call option
is exercised, a gain or loss is realized from the sale of the underlying
security and the proceeds of the sale are increased by the premium originally
received. If a written put option is exercised, the cost of the underlying
security purchased would be decreased by the premium originally received. The
Portfolio can write options only on a covered basis, which, for a call, requires
<PAGE>
that the Portfolio hold the underlying security, and, for a put, requires the
Portfolio to set aside cash, U.S. government securities or other liquid, high
grade debt securities in an amount not less than the exercise price or otherwise
provide adequate cover at all times while the put option is outstanding. The
Portfolio may use options to manage its exposure to the stock market and to
fluctuations in interest rates.
The premium paid by the Portfolio for the purchase of a call or put option is
included in the Portfolio's "Statement of Assets and Liabilities" as an
investment and subsequently "marked-to-market" to reflect the current market
value of the option. If an option which the Portfolio has purchased expires on
the stipulated expiration date, the Portfolio realizes a loss in the amount of
the cost of the option. If the Portfolio enters into a closing sale transaction,
the Portfolio realizes a gain or loss, depending on whether proceeds from the
closing sale transaction are greater or less than the cost of the option. If the
Portfolio exercises a call option, the cost of the securities acquired by
exercising the call is increased by the premium paid to buy the call. If the
Portfolio exercises a put option, it realizes a gain or loss from the sale of
the underlying security, and the proceeds from such sale are decreased by the
premium originally paid.
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Portfolio may forego the
opportunity of profit if the market value of the underlying security or index
increases and the option is exercised. The risk in writing a put option is that
the Portfolio may incur a loss if the market value of the underlying security or
index decreases and the option is exercised. In addition, there is the risk the
Portfolio may not be able to enter into a closing transaction because of an
illiquid secondary market.
(D) Futures Contracts
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract the
Portfolio is required to pledge to the broker an amount of cash or securities
equal to the minimum "initial margin" requirements of the exchange on which the
contract is traded. Pursuant to the contract, the Portfolio agrees to receive
from or pay to the broker an amount of cash equal to the daily fluctuation in
value of the contract. Such receipts or payments are known as "variation margin"
and are recorded by the Portfolio as unrealized gains or losses. When the
contract is closed, the Portfolio records a realized gain or loss equal to the
difference between the value of the contract at the time it was opened and the
value at the time it was closed. The potential risk to the Portfolio is that the
change in value of the underlying securities may not correlate to the change in
value of the contracts. The Portfolio may use futures contracts to manage its
exposure to the stock market and to fluctuations in interest rates.
(E) Security Transactions and Related Investment Income
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out basis, unless otherwise specified. Dividends are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Where a high
level of uncertainty exists as to its collection, income is recorded net of all
withholding tax with any rebate recorded when received. The Portfolio may trade
securities on other than normal settlement terms. This may increase the risk if
the other party to the transaction fails to deliver and causes the Portfolio to
subsequently invest at less advantageous prices.
(F) Portfolio Securities Loaned
At December 31, 1996, the Small Cap Portfolio had stocks with an aggregate value
of $380,738 which were on loan to brokers. The loans were secured by cash
collateral of $383,400 received by the Portfolio. Cash collateral is received by
the Portfolio against loaned securities in the amount at least equal to 102% of
the market value of the loaned securities at the inception of each loan. This
collateral must be maintained at not less than 100% of the market value of the
loaned securities during the period of the loan. The Portfolio received
securities lending fees of $61.
(G) Deferred Organizational Expenses
Expenses incurred by the Portfolios in connection with their organization, their
initial registration with the Securities and Exchange Commission and with
<PAGE>
various states and the initial public offering of their shares aggregated
$25,000 for each Portfolio. These expenses are being amortized on a
straight-line basis over a five-year period.
(H) Taxes
It is the policy of the Portfolios to meet the requirements of the Internal
Revenue Code of 1986, as amended ("Code"). Therefore, no provision has been made
for Federal taxes on income, capital gains, or unrealized appreciation of
securities held, and excise tax on income and capital gains.
(I) Restricted Securities
A Portfolio is permitted to invest in privately placed restricted securities.
These securities may be resold in transactions exempt from registration or to
the public if the securities are registered. Disposal of these securities may
involve time-consuming negotiations and expense, and prompt sale at an
acceptable price may be difficult.
(J) Indexed Securities
A Portfolio may invest in indexed securities whose value is linked either
directly or indirectly to changes in foreign currencies, interest rates,
equities, indices, or other reference instruments. Indexed securities may be
more volatile than the reference instrument itself, but any loss is limited to
the amount of the original investment.
(K) Line of Credit
Each of the GT Global America Small Cap Growth Fund and the GT Global America
Value Fund (and their respective Portfolios), along with certain other funds
advised by the Manager, has a line of credit with the Bank of Boston. The
arrangement with the bank allows all specific funds to borrow an aggregate
maximum amount of $100,000,000. Each of these two funds is limited to borrowing
up to 33 1/3% of the value of each Fund's total assets. On December 31, 1996,
the Value Portfolio borrowed $1,000,000 at a money market rate.
For the year ended December 31, 1996, the weighted average outstanding daily
balance of bank loans (based on the number of days the loans were outstanding)
for the Value Portfolio was $1,000,000 with a weighted average interest rate of
6.43%. Interest incurred on this loan for the year ended December 31, 1996, was
$2,681.
2. Related Parties
Chancellor LGT Asset Management, Inc. is the Portfolios' investment manager and
administrator. On October 31, 1996, Chancellor Capital Management, Inc. merged
with LGT Asset Management, Inc., and the surviving entity was renamed Chancellor
LGT Asset Management, Inc. Each Portfolio pays investment management and
administration fees to the Manager at the annualized rate of 0.475% on the first
$500 million of average daily net assets of the Portfolio; 0.45% on the next
$500 million; 0.425% on the next $500 million; and 0.40% on amounts thereafter.
These fees are computed daily and paid monthly.
The Portfolio pays each of its Trustees who is not an employee, officer or
director of the Manager, GT Global or GT Services $500 per year plus $150 for
each meeting of the board or any committee thereof attended by the Trustees.
At December 31, 1996, all of the shares of beneficial interest of each Portfolio
were owned either by GT Global America Small Cap Growth Fund and GT Global
America Value Fund or the Manager.
3. Purchases and Sales of Securities
For the year ended December 31, 1996, purchases of investment securities by the
Small Cap Portfolio and Value Portfolio, other than U.S. government obligations
and short-term investments, aggregated $33,591,427 and $19,537,714,
respectively. Sales of investment securities by the Small Cap Portfolio and
Value Portfolio, other than U.S. government obligations and short-term
investments, aggregated $19,321,092 and $13,037,066 , respectively. There were
no purchases or sales of U.S. government obligations by a Portfolio during the
year.
COOPERS & LYBRAND L.L.P.
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of Growth Portfolio:
Small Cap Portfolio
Value Portfolio
We consent to the inclusion in Post Effective Amendment No. 2 to the
Registration Statement of Growth Portfolio on Form N-1A (File No. 811-07363) of
our reports dated February 14, 1997 on our audit of the financial statements of
the above referenced funds.
/s/ Coopers & Lybrand L.L.P.
-----------------------------------------
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
April 29, 1997
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<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
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REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
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<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FUND'S
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TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
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