Managed Money Reporter Newsletter — Issue 114, July 1996


Editors: Carl Spiess & Allan McGlade



G.T. Global Conquers the World of Telecommunications

  • Fact: Over half the world's population - almost 3 billion people - have never made a phone call, with a similar number living more than two hours from the nearest telephone.
  • Fact: With nearly 6 billion people in the world, there are currently only 600 million phone numbers including business lines.
  • Fact: An estimated 30,000 Canadians place 911 calls from their cell phones every month.
  • Fact: The exponential increase in computer sales is also fueling the global use of telecommunications as increasingly, the human voice is giving way to computers exchanging data. Today more than 100,000 computers are sold worldwide every 24 hours.

It is ironic that we live in the midst of an information explosion unparalleled in human history, yet as evidenced above, there are vast populations in this world who have never experienced making a simple phone call. Therefore, GT. Global created the Global Telecommunications Fund to take advantage of investment opportunities being created from the strong accelerating growth represented in the telecommunications industry today. After all, when cellular phones were first introduced on a large scale to the public over ten years ago, there were bold predictions of a million subscribers worldwide by the year 2000. Today, there are upwards of 30 million with projections of a 100 million subscribers by the end of the decade.

Since inception (October 1994) the GT Telecommunications Fund has posted some phenomenal returns. The managers at the fund believe they have identified four key emerging trends that will spearhead the growth in global telecommunications for the rest of this decade and beyond:

  • Infrastructure Development - The ongoing modernization of the developed world's telecommunication infrastructure could fuel steady growth in basic telecommunications equipment and services well into the 21st century.
  • Privatization - From Argentina to New Zealand a worldwide trend of privatizing state-owned telecommunications enterprises through public equity offerings is gathering momentum.
  • Deregulation - The break-up of national telephone monopolies and the emergence of competition in local and long distance service is unleashing the growth potential of telecommunications markets all over the world.
  • Emerging technologies - Rapid advances in telecommunications technology are creating whole new industries, companies and services dedicated to satisfying the world's insatiable appetite for information and related technology in all of its forms.

The top 10 holdings in the fund as of June 30, 1996 are:

DSP CommunicationsNewbridge Networks
Ericsson LM Tel. Co.3COM Corp.
ECI Telecom Ltd.Geotek Communications Inc.
Perusahaan Perseroan PerseGlenayre Technologies Inc.
Nextel CommunicationsCellularvision USA Inc.

The GT Global Telecommunications Fund has had astonishing returns. The one year rate of return to June 30, 1996 is 41.5%, and since inception, (October 4, 1994) the fund has averaged 60.1%. At the Mutual Fund Reporter we share the strong belief in the future of global telecommunications. We also believe that now is the perfect time to purchase the fund, since both the TSE and the Dow Jones has pulled back quite dramatically in the last few weeks.

 



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