See notes to financial statements
TRANSAMERICA VARIABLE INSURANCE FUND, INC.
GROWTH PORTFOLIO
Schedule of Investments -- June 30, 1998 (Unaudited)
<PAGE>
<TABLE>
<CAPTION>
Shares or
Market Principal Market
Shares Value Amount Value
<PAGE>
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
COMMON STOCKS -- 94.1%
- -------------------------------------------------------------------------------------------------------------------------------
AGRICULTURAL BIOTECHNOLOGY -- 2.3%
Pioneer Hi-Bred International, Inc. 37,500 $1,551,563
- -------------------------------------------------------------------------------------------------------------------------------
BUSINESS SERVICES -- 10.2%
Cognizant Corporation 40,000 2,520,000
Envoy Corporation (a) 40,000 1,895,000
First Data Corporation 70,000 2,331,875
- -------------------------------------------------------------------------------------------------------------------------------
6,746,875
- -------------------------------------------------------------------------------------------------------------------------------
CHEMICALS -- 5.2%
Minerals Technologies, Inc. 35,000 1,780,625
Monsanto Company 30,000 1,676,250
- -------------------------------------------------------------------------------------------------------------------------------
3,456,875
- -------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL SERVICES -- 4.6%
Sodexho Marriott Services, Inc. 105,000 3,045,000
- -------------------------------------------------------------------------------------------------------------------------------
COMPUTERS & BUSINESS EQUIPMENT -- 12.6%
Dell Computer Corporation (a) 90,000 8,353,125
- -------------------------------------------------------------------------------------------------------------------------------
CONGLOMERATES -- 3.4%
Gillette Company 40,000 2,267,500
- -------------------------------------------------------------------------------------------------------------------------------
CONTAINERS & PACKAGING -- 1.9%
Sealed Air Corporation (a) 35,000 1,286,250
- -------------------------------------------------------------------------------------------------------------------------------
ELECTRONICS -- 8.2%
Applied Materials, Inc. (a) 70,000 2,065,000
Intel Corporation 46,000 3,409,750
- -------------------------------------------------------------------------------------------------------------------------------
5,474,750
- -------------------------------------------------------------------------------------------------------------------------------
FINANCIAL SERVICES -- 9.1%
Charles Schwab Corporation 76,000 2,470,000
Franklin Resources, Inc. 66,000 3,564,000
- -------------------------------------------------------------------------------------------------------------------------------
6,034,000
- -------------------------------------------------------------------------------------------------------------------------------
HOTELS & RESTAURANTS -- 6.4%
McDonald's Corporation 35,000 2,415,000
Mirage Resorts, Inc.(a) 85,000 1,811,562
- -------------------------------------------------------------------------------------------------------------------------------
4,226,562
- -------------------------------------------------------------------------------------------------------------------------------
LEISURE & ENTERTAINMENT -- 7.7%
Pixar, Inc. (a) 50,000 3,018,750
The Walt Disney Company 20,000 2,101,250
- -------------------------------------------------------------------------------------------------------------------------------
5,120,000
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
REAL ESTATE OPERATIONS -- 1.8%
CCA Prison Realty Trust 40,000 $1,225,000
- -------------------------------------------------------------------------------------------------------------------------------
RETAIL -- 6.4%
Fred Meyer, Inc. (a) 100,000 4,250,000
- -------------------------------------------------------------------------------------------------------------------------------
SOFTWARE -- 10.6%
IMS Health, Inc. 10,000 595,000
Microsoft Corporation (a) 45,000 4,876,875
Transaction Systems Architects, Inc. (a) 40,000 1,540,000
- -------------------------------------------------------------------------------------------------------------------------------
7,011,875
- -------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION -- 3.7%
Kansas City Southern Industries, Inc. 50,000 2,481,250
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(cost $29,122,405) 62,530,625
- -------------------------------------------------------------------------------------------------------------------------------
PREFERRED STOCK -- 1.0%
- -------------------------------------------------------------------------------------------------------------------------------
Sealed Air Corporation
(cost $926,676) 16,375 687,750
- -------------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY SECURITY -- 7.2%
- -------------------------------------------------------------------------------------------------------------------------------
Federal Farm Credit Bank
(cost $4,804,000)
5.00% 07/01/98 $4,804,000 4,804,000
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 102.3%
(cost $34,853,081)* 68,022,375
LIABILITIES IN EXCESS OF
OTHER ASSETS-- (2.3)% (1,532,164)
- -------------------------------------------------------------------------------------------------------------------------------
NET ASSETS-- 100.0% $66,490,211
===============================================================================================================================
</TABLE>
(a) non-income producing security
* Aggregate cost for Federal tax purposes. Aggregate gross unrealized
appreciation for all securities in which there is an excess of value over tax
cost and aggregate gross unrealized depreciation for all securities in which
there is an excess of tax cost over value were $34,040,571 and $871,277,
respectively. Net unrealized appreciation for tax purposes is $33,169,294.
<PAGE>
See notes to financial statements
TRANSAMERICA VARIABLE INSURANCE FUND, INC.
MONEY MARKET PORTFOLIO
Schedule of Investments -- June 30, 1998 (Unaudited)
<PAGE>
Principal Amortized
Amount Cost
<PAGE>
- --------------------------------------------------------------------
COMMERCIAL PAPER -- DOMESTIC -- 76.2%
- --------------------------------------------------------------------
BROKERAGE -- 3.7% Merrill Lynch & Co., Inc.
5.530% 10/01/98 $116,000 $114,361
- --------------------------------------------------------------------
CHEMICALS -- 4.1%
E. I. du Pont de Nemours and Company
5.510% 08/21/98 125,000 124,024
- --------------------------------------------------------------------
COMMERCIAL FINANCIAL SERVICES -- 7.2%
Associates Corporation of North America
5.450% 10/22/98 110,000 108,118
General Electric Capital Corporation
5.490% 11/23/98 113,000 110,501
- --------------------------------------------------------------------
218,619
- --------------------------------------------------------------------
CONSUMER FINANCIAL SERVICES -- 11.4%
Ford Motor Credit Company
5.450% 12/03/98 117,000 114,255
Toyota Motor Credit Company
5.510% 07/23/98 120,000 119,596
USAA Capital Corporation
5.510% 08/04/98 115,000 114,402
- --------------------------------------------------------------------
348,253
- --------------------------------------------------------------------
CONSUMER PRODUCTS -- 3.3%
The Procter & Gamble Company
5.480% 07/23/98 100,000 99,665
- --------------------------------------------------------------------
DRUGS & HEALTH CARE -- 3.3%
Abbott Laboratories
5.470% 07/08/98 100,000 99,894
- --------------------------------------------------------------------
ELECTRIC UTILITIES -- 3.6%
Duke Energy Corporation
5.480% 07/10/98 110,000 109,849
- --------------------------------------------------------------------
ELECTRICAL EQUIPMENT -- 3.7%
Emerson Electric Company
5.450% 10/30/98 115,000 112,893
- --------------------------------------------------------------------
ELECTRONICS -- 4.1% Motorola, Inc.
5.540% 07/21/98 125,000 124,615
- --------------------------------------------------------------------
FINANCE & BANKING -- 6.9% Chevron USA, Inc.
5.490% 08/06/98 100,000 99,451
John Deere Finance Ltd.
5.450% 11/19/98 113,000 110,588
- --------------------------------------------------------------------
210,039
- --------------------------------------------------------------------
- --------------------------------------------------------------------
FINANCIAL SERVICES -- 3.3%
Caterpillar Financial Services
5.360% 07/27/98 $100,000 $99,613
- --------------------------------------------------------------------
FOOD & BEVERAGES -- 3.6%
Coca-Cola Company
5.450% 08/03/98 110,000 109,450
- --------------------------------------------------------------------
INSURANCE -- 3.7%
General Re Corporation
5.520% 08/07/98 115,000 114,348
- --------------------------------------------------------------------
LEISURE TIME -- 4.1%
The Walt Disney Company
5.440% 08/25/98 125,000 123,961
- --------------------------------------------------------------------
TECHNOLOGY -- 3.3%
IBM Credit Corporation
5.440% 07/31/98 100,000 99,547
- --------------------------------------------------------------------
TELECOMMUNICATIONS -- 3.6% BellSouth Telecommunications, Inc.
5.470% 07/24/98 110,000 109,615
- --------------------------------------------------------------------
TRANSPORTATION SERVICES -- 3.3% United Parcel Service of America, Inc.
5.250% 07/30/98 100,000 99,577
- ---------------------------------------------------------------------
TOTAL COMMERCIAL PAPER -- DOMESTIC
(amortized cost $2,318,323) 2,318,323
- ---------------------------------------------------------------------
COMMERCIAL PAPER -- FOREIGN -- 7.1%
- ---------------------------------------------------------------------
BANKING -- 3.6%
Toronto Dominion Holdings
5.500% 08/10/98 110,000 109,328
- ---------------------------------------------------------------------
FINANCIAL SERVICES -- 3.5% Canadian Imperial Holdings, Inc.
5.540% 07/27/98 105,000 105,000
- -------------------------------------------------------------------------------
TOTAL COMMERCIAL PAPER -- FOREIGN
(amortized cost $214,328) 214,328
- -------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 15.6%
- -------------------------------------------------------------------------------
State Street Bank and Trust Company 4.75%, due 07/01/98,(collateralized by
$415,000 par value U.S. Treasury Bond, 7.25%, due 05/15/16, with a value of
$487,560, cost $476,000) 476,000 476,000
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 98.9%
(amortized cost $3,008,651) 3,008,651
OTHER ASSETS LESS LIABILITIES-- 1.1% 34,297
- -------------------------------------------------------------------------------
NET ASSETS-- 100.0% $ 3,042,948
===============================================================================
<PAGE>
<TABLE>
<CAPTION>
See notes to financial statements
TRANSAMERICA VARIABLE INSURANCE FUND, INC.
Statements of Assets and Liabilities
June 30, 1998 (Unaudited)
Growth Money Market
Portfolio Portfolio
ASSETS
<S> <C> <C>
Investments, at cost $ 34,853,081 $ 3,008,651
============= =============
Investments at value $ 68,022,375 $ 3,008,651
Cash 1,342 685
Receivables:
Fund shares sold 195,231 50,064
Dividends and interest 33,638 1,178
Due from Administrator 8,793 4,680
------------- -------------
68,261,379 3,065,258
------------- -------------
LIABILITIES
Payables:
Securities purchased 1,686,451 -
Advisory fee payable 38,092 683
Audit fee payable 12,172 7,507
Custody fee payable 9,702 5,920
Other accrued expenses 24,751 8,200
------------- -------------
1,771,168 22,310
------------- -------------
TOTAL NET ASSETS $ 66,490,211 $ 3,042,948
============= =============
NET ASSETS CONSIST OF:
Paid in capital $ 27,036,656 $ 3,042,948
Undistributed net investment income (loss) (77,892) -
Accumulated net realized gain on investments 6,362,153 -
Net unrealized appreciation of investments 33,169,294 -
------------- -------------
TOTAL NET ASSETS $ 66,490,211 $ 3,042,948
============= =============
Shares outstanding 3,634,469
3,042,948
Net asset value per share $ 18.29 $
====================== =
1.00
<PAGE>
TRANSAMERICA VARIABLE INSURANCE FUND, INC.
Statements of Operations
For the period ended June 30, 1998 (Unaudited)
Growth Money Market
Portfolio Portfolio*
INVESTMENT INCOME
Interest income $ 55,903 $ 57,257
Dividend income 100,663 -
------------- -------------
156,566 57,257
------------- -------------
EXPENSES
Investment Adviser fee 206,876 3,680
Custodian fees 20,284 11,641
Administration fees 21,358 1,232
Audit fees 12,149 7,507
Transfer Agent fees 8,420 8,420
Printing expenses 1,001 1,000
Other 987 233
------------- -------------
Operating expenses before fee waiver 271,075 33,713
Fees waived and expenses reimbursed (36,617) (27,406)
-------------- --------------
234,458 6,307
------------- -------------
NET INVESTMENT INCOME (LOSS) (77,892) 50,950
-------------- -------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments 4,907,740 -
Net change in unrealized appreciation of investments 6,593,725 -
------------- -------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 11,501,465 -
------------- -------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 11,423,573 $ 50,950
============= =============
* Commenced operations on January 2, 1998.
<PAGE>
TRANSAMERICA VARIABLE INSURANCE FUND, INC.
GROWTH PORTFOLIO
Statements of Changes in Net Assets
Period ended
June 30, Year ended
1998 December 31,
(Unaudited) 1997
INCREASE IN NET ASSETS
From operations:
Net investment loss $ (77,892) $ (161,554)
Net realized gain on investments 4,907,740 5,194,303
Net change in unrealized appreciation of investments 6,593,725 9,864,234
------------- -------------
Net increase in net assets resulting from operations 11,423,573 14,896,983
Dividends and distributions to shareholders from:
Net realized gains - (3,656,425)
Net fund share transactions (Note 3) 8,688,231 2,899,412
------------- -------------
Increase in net assets 20,111,804 14,139,970
NET ASSETS
Beginning of period 46,378,407 32,238,437
------------- -------------
End of period (1) $ 66,490,211 $ 46,378,407
============= =============
(1) Includes accumulated net investment loss of $ (77,892) $ (195,061)
================ ===============
<PAGE>
See notes to financial statement
TRANSAMERICA VARIABLE INSURANCE FUND, INC.
MONEY MARKET PORTFOLIO
Statements of Changes in Net Assets
Period ended
June 30,
1998*
(Unaudited)
INCREASE IN NET ASSETS
From operations:
Net investment Income $ 50,950
Net realized gain on investments -
Net change in unrealized appreciation of investments -
Net increase in net assets resulting from operations 50,950
Dividends and distributions to shareholders from:
Net investment income (50,950)
Net fund share transactions (Note 3) 3,041,948
-------------
Increase in net assets 3,041,948
NET ASSETS
Beginning of period 1,000
-------------
End of period $ 3,042,948
=============
</TABLE>
* The Portfolio commenced operations January 2, 1998.
<PAGE>
<TABLE>
<CAPTION>
TRANSAMERICA VARIABLE INSURANCE FUND, INC.
GROWTH PORTFOLIO
Financial Highlights
Selected data for a share outstanding throughout each period are as follows*
Period ended
June 30, 1998
(Unaudited) Year ended December 31,
--------------------------------------------------------------
---------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net Asset Value, beginning of period $ 14.750 $ 10.930 $ 8.582 $ 5.615 $ 5.239
-----------------------------------------------------------------------------
Investment Operations
Net investment income (loss) (0.021) (0.050) (0.065) (0.069) (0.042)
Net realized and unrealized gain 3.565 5.130 2.413 3.036 0.418
--------------------------------------------------------------
---------------
Total from investment operations ........3.544 5.080 2.348 2.967 0.376
Distributions to Shareholders from:
Net realized gains - (1.260) - - -
-----------------------------------------------------------------------------
Total distributions - (1.260) - - -
-----------------------------------------------------------------------------
Net Asset Value, end of period $ 18.294 $ 14.750 $ 10.930 $ 8.582 $ 5.615
==============================================================
===============
Total Return (a) 24.00% 46.50% 27.36% 52.84% 7.19%
=============================================================================
Ratios and Supplemental Data:
Expenses to average net assets (1)(3) 0.85% 0.85% 1.27% 1.41% 1.43%
Net investment income (loss)
to average net assets (2)(3) (0.28%) (0.39%) (0.68%) (0.94%) (0.80%)
Portfolio turnover rate 20.80% 20.54% 34.58% 18.11% 30.84%
Net Assets, end of period (in
thousands) $66,490 $46,378 $32,238 $25,738 $17,267
</TABLE>
*Prior to November 1, 1996, activity represents accumulated unit values of the
Separate Account which have been converted to share values for presentation
purposes.
(a) Total return is not annualized for periods less than one year.
(1) If the Investment Adviser had not waived expenses, the ratio of operating
expenses to average net assets would have been 0.98% for the period ended
June 30, 1998 and 0.98% and 1.34% for the years ended December 31, 1997 and
1996, respectively.
(2) If the Investment Adviser had not waived expenses, the ratio of net
investment loss to average net assets would have been (0.42%) for the
period ended June 30, 1998 and (0.52%) and (0.75%) for the years ended
December 31, 1997 and 1996, respectively.
(3) Annualized.
<PAGE>
TRANSAMERICA VARIABLE INSURANCE FUND, INC.
MONEY MARKET PORTFOLIO
Financial Highlights
Selected data for a share outstanding throughout each period are as follows*
Period ended
June 30, 1998*
(Unaudited)
-----------------
Net Asset Value, beginning of period $ 1.000
-----------------
Investment Operations
Net investment income 0.024
-----------------
Total from investment operations .......0.024
-----------------
Distributions to Shareholders from:
Net investment income (0.024)
-----------------
Total distributions (0.024)
-----------------
Net Asset Value, end of period $ 1.000
=================
Total Return (a) 2.41%
=================
Ratios and Supplemental Data:
Expenses to average net assets (1)(3) 0.60%
Net investment income (loss)
to average net assets (2)(3) 4.84%
Net Assets, end of period (in
thousands) $3,043
* The Portfolio commenced operations January 2, 1998.
(a) Total return is not annualized for periods less than one year
(1) If the Investment Adviser had not waived expenses, the ratio of operating
expenses to average net assets would have been 3.20% for the period ended
June 30, 1998.
(2) If the Investment Adviser had not waived expenses, the ratio of net
investment income to average net assets would have been 2.23% for the
period ended June 30, 1998.
(3) Annualized.
<PAGE>
TRANSAMERICA VARIABLE INSURANCE FUND, INC.
Notes to Financial Statements
June 30, 1998 (Unaudited)
1. Organization and Summary of Significant Accounting Policies
Transamerica Variable Insurance Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940 as an open-end diversified management investment
company. The Fund currently consists of two investment portfolios, the Growth
Portfolio and the Money Market Portfolio (the "Portfolios"). The Growth
Portfolio's investment objective is long-term capital growth and the Money
Market Portfolio's investment objective is to maximize current income. The Money
Market Portfolio commenced operations on January 2, 1998.
The Fund was established as a Maryland Corporation on June 23, 1995, as the
successor to Transamerica Occidental's Separate Account Fund C (the "Separate
Account") which was organized as an open-end diversified management investment
company. On November 1, 1996, all investments held by the Separate Account with
a fair value of $29,567,077 and a cost basis of $15,661,836 were transferred to
the Growth Portfolio of the Fund. In exchange for these investments, the
Separate Account received all of the outstanding shares (2,956,116) of the Fund.
This transaction was accounted for in a manner similar to a pooling of
interests. Thereafter, the Separate Account's only investment is an investment
in the Fund.
As the Fund is treated as the successor to the Separate Account, all activity
prior to November 1, 1996 incorporates activity of the Separate Account.
Effective October 31, 1996, the net asset value of the Fund was re-priced at $10
per unit. All previous accumulation unit values of the Separate Account have
been restated for presentation purposes to account for this change.
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements:
(A) Valuation of Securities - Equity securities traded on a national exchange,
NASDAQ and over-the-counter securities are valued at the last sale price.
Securities for which market quotations are not readily available are valued
at fair value as determined in good faith pursuant to procedures
established by the Fund's Board of Directors. Debt securities with a
maturity of 60 days or less, and all investments in the Money Market
Portfolio are valued at amortized cost, which approximates market value.
(B) Repurchase Agreements - The Portfolios may enter into repurchase agreements
with Federal Reserve System member banks or U.S. securities dealers. A
repurchase agreement occurs when the Portfolios purchase an
interest-bearing debt obligation and the seller agrees to repurchase the
debt obligation on a specified date in the future at an agreed-upon price.
If the seller is unable to make a timely repurchase, the Portfolio's
expected proceeds could be delayed, or the Portfolio could suffer a loss in
principal or current interest, or incur costs in liquidating the
collateral.
(C) Securities Transactions and Investment Income - Securities transactions are
recorded on the trade date. Dividend income is recorded on the ex-dividend
date and interest income is recorded daily on an accrual basis. Realized
gains and losses on investments are determined using the identified cost
method for both financial statement and Federal income tax purposes. The
aggregate cost of securities purchased (excluding short-term investments)
and proceeds from sales for the Growth Portfolio were $19,429,894 and
$12,335,853 respectively, for the six months ended June 30, 1998.
(D) Dividends and Distributions - The Growth Portfolio distributes substantially
all of its net investment income and capital gains, if any, in the form of
dividends to its shareholders. The Growth Portfolio declares its dividends and
capital gain distributions at least annually. The Money Market Portfolio
declares dividends and capital gains distributions on a monthly basis. Although
the Fund pays dividends monthly dividends are determined daily.
(E) Federal Income Taxes - The Fund's policy is to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income to its
shareholders. Therefore, no federal income tax provision is required.
TRANSAMERICA VARIABLE INSURANCE FUND, INC.
Notes to Financial Statements
June 30, 1998 (Unaudited)
(F) Use of Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amount of assets and
liabilities at the date of financial statements and the reported amounts
of revenue and expenses during the period. Actual results could differ
from those estimates.
2. Investment Advisory Fees and Other Transactions With Affiliates
The Fund has entered into an Investment Advisory Agreement with Transamerica
Occidental Life Insurance Company ("the "Adviser"), a wholly owned subsidiary of
Transamerica Insurance Corporation of California, which in turn is a wholly
owned subsidiary of Transamerica Corporation. For its services to the Growth
Portfolio and the Money Market Portfolio, the Adviser receives an annual
advisory fee of 0.75% and 0.35%, respectively, of the average daily net assets
of the Portfolio. The Adviser, at its discretion, has agreed to waive its fee
and assume any other operating expenses (other than certain extraordinary or
non-recurring expenses) of the Growth and Money Market Portfolios which exceed
0.85% and 0.60%, respectively, of the average daily net assets of the
Portfolios.
The Adviser has contracted with Transamerica Investment Services, Inc., a
wholly-owned subsidiary of Transamerica Corporation to provide investment advice
to the Portfolios. Transamerica Investment Services receives its fee directly
from the Adviser, and receives no compensation from the Portfolios.
Certain directors and officers of the Fund are also directors and officers of
the Adviser, the Separate Account, Transamerica Investment Services, and other
affiliated Transamerica entities, however they receive no compensation from the
Fund.
3. Capital Stock Transactions
The Fund has one billion shares of $0.001 par value stock authorized. As of June
30, 1998, the Growth Portfolio was authorized to issue two hundred million
shares.
<TABLE>
<CAPTION>
Period ended June 30,
1998 Year ended December 31,
(Unaudited) 1997
Growth Portfolio Shares Amount Shares Amount
---------------------------------------- ---------------- ----------------- ---------------- ------------------
<S> <C> <C> <C>
Capital stock sold 655,584 $ 11,556,897 $ -
-
Capital stock issued upon
reinvestment of dividends and
distributions 3,656,425
- - 247,983
Capital stock redeemed (165,328)
(2,868,666) (53,456) (757,013)
---------------------------------------- ---------------- ----------------- ---------------- ------------------
Net increase (decrease) 490,256 $ 8,688,231 $ 2,899,412
194,437
---------------------------------------- ---------------- ----------------- ---------------- ------------------
As of June 30, 1998, the Money Market Portfolio was authorized to issue two
hundred million shares.
Period ended June 30,
1998*
(Unaudited)
Money Market Portfolio Shares Amount
---------------------------------------- ---------------- -----------------
Capital stock sold 3,068,725 $ 3,068,725
Capital stock issued upon
reinvestment of dividends and
distributions 50,948 50,948
Capital stock redeemed
(77,725) (77,725)
---------------------------------------- ---------------- -----------------
Net increase (decrease) 3,041,948 $ 3,041,948
---------------------------------------- ---------------- -----------------
* Portfolio commenced operations January 2, 1998.
</TABLE>
<PAGE>
Transamerica Variable Insurance Fund, Inc.
Semi-Annual Report
June 30, 1998
Growth Portfolio
Portfolio Manager: Jeffrey S. Van Harte
The Growth Portfolio of the Transamerica Variable Insurance Fund, Inc. continued
its excellent performance in the first half of 1998. The Portfolio generated a
total return of 24.00% for the six months ended June 30, 1998 versus the S&P
500's return of 17.71%. Leading technology names like Dell Computer and
Microsoft contributed to the Portfolio's performance. New additions to the
Portfolio such as IMS Health and Sodexho Marriott Services also helped bolster
the Portfolio's returns.
At the beginning of the year, we expected more temperate results from the stock
market based on weakening Asian economies and unsustainability of 20% plus stock
market returns. Asia continues to be a problem because of overcapacity and
weakening currencies. The stock market's recent correction reflects not only the
Asian dilemma but also some pullback from the strong first half performance. The
market is most likely discounting slower economic and profit growth. In our
view, this correction is short-term and not out of the ordinary.
Our long-term outlook is still positive given the tremendous demand for savings
and investment products and the increasing importance of technology investment
to the economy. The Portfolio continues with its positions in leading financial
services firms as well as the leading technology companies that control industry
standards. Additional stock selection has focused on companies that have a
unique position in their respective industries such as IMS Health, the leading
provider of health care information to large pharmaceutical companies and
Sodexho Marriott Services, the leading contract food service and facilities
management company in North America.
