Manning & Napier Insurance Fund, Inc.
Manning & Napier Bond Portfolio
Manning & Napier Equity Portfolio
Manning & Napier Small Cap Portfolio
Manning & Napier Moderate Growth Portfolio
Manning & Napier Growth Portfolio
Manning & Napier Maximum Horizon Portfolio
Semi-Annual Report
June 30, 1997
<PAGE>
Management Discussion and Analysis
Dear Contract Owners:
The Manning & Napier Insurance Fund is comprised of six portfolios. Each of
these portfolios is managed according to Manning & Napiers overview and its
particular objective. In this section of the Semi-Annual Report, we will
discuss our overview and how it is reflected in our portfolio management. On
following pages, we will provide additional detail about the performance and
holdings of each specific portfolio.
Our investment approach is based on three tenets:
The U.S. stock market, taken as a whole, remains overvalued.
The economic picture continues to feature steady growth and moderate
inflation, certainly an attractive investment climate.
Globalization of industries and economies is not a fad or a phase, but a
long-term trend that continues to grow in importance.
does all of this add up to? Since valuations, not the economy at large, are
the problem, we can buy whenever we find individual stocks or sectors whose
valuations are reasonable. This is where taking advantage of volatility comes
in, as fluctuations in stock prices can create opportunities. Indeed, when
the market as a whole hits a choppy phase, as it did in March and April of
this year, opportunities to catch good stocks on a dip in valuations increase.
As you would expect then, we were net buyers of stocks during that period.
we are well prepared to be active globally. Weve spent over a decade
investing in non-U.S. stocks, and over that time we have built staff,
operations, and global contacts to compete effectively in this environment.
The benefit is a wider field of opportunities. This comes in especially handy
when the U.S. stock market is overvalued. Rather than passively waiting for a
correction, we can actively seek alternatives. As a result, non-U.S. stocks
make up a meaningful portion of portfolios. We expect this to be the rule,
rather than the exception, going forward.
the whole, we are more optimistic about opportunities in the bond market than
in the domestic stock market. As we have said before, we expect trends such
as increased global trade to hold down inflation and result in gradually lower
interest rates. Because lower interest rates mean higher bond prices, this
will benefit bonds, particularly bonds with longer maturities, and we have
positioned our bond holdings accordingly.
the mid-point of 1997, there are reasons for optimism in the markets, but we
feel it is important to be selective. Our investment approach is well-suited
for just such an environment.
We would like to thank you for the opportunity of helping you meet your
investment goals. It is a service in which we take great pride.
Sincerely,
Manning & Napier Advisors, Inc.
1
<PAGE>
Performance Update as of June 30, 1997 (unaudited)
BOND PORTFOLIO
We believe that the current economic environment is quite favorable for bonds,
primarily because inflation has remained low. There have been indications
from time-to-time that growth may be too strong and that inflation may
increase, which has caused short-term volatility in the bond market, but the
fact is that we are now several years into an environment of steady, moderate
inflation levels. We continue to expect that inflation will be stable and
that interest rates will be stable to lower.
During the first half of the year, bonds were bolstered by the activity of the
federal government. The government has trimmed the budget deficit and
recently retired a significant amount of U.S. Treasury securities. These
actions toward fiscal responsibility contributed to a decline in interest
rates. This decline in interest rates contributed to increased bond prices,
which benefited the Bond Portfolio.
<graphic>
<line chart>
Data for chart to follow:
<TABLE>
<CAPTION>
Manning & Napier Merrill Lynch Corporate/
Date Bond Portfolio Government Bond Index
<S> <C> <C>
11/01/96 10,000 10,000
12/31/96 9,940 10,076
03/31/97 9,770 9,997
06/30/97 10,140 10,357
</TABLE>
<TABLE>
<CAPTION>
Performance From Inception 1
Total Return
Through Growth of $10,000 Average
06/30/97 Investment Cumulative Annual
<S> <C> <C> <C>
Manning & Napier
Bond Portfolio $ 10,140 1.40% N/A
Merrill Lynch Corporate/
Government Bond Index 2 $ 10,357 3.57% N/A
</TABLE>
<graphic>
<pie chart>
Data for chart to follow:
<TABLE>
<CAPTION>
Portfolio Composition - Bond Portfolio - As of 6/30/97
<S> <C>
U.S. Treasury Securities 51%
U.S. Government Agencies 47%
Cash, short-term investments and other assets
less liabilities 2%
</TABLE>
<TABLE>
<CAPTION>
Effective Maturity - Bond Portfolio - As of 6/30/97*
<S> <C>
1 - 3 Years 32%
3 - 5 Years 16%
5 - 10 Years 24%
Over 10 Years 28%
</TABLE>
*As a percentage of total investment
Please see Page 8 for Footnotes
2
<PAGE>
Performance Update as of June 30, 1997 (unaudited)
EQUITY PORTFOLIO
The objective of the Equity Portfolio is to provide long-term capital growth
through equity investments. As mentioned earlier in this Semi-Annual Report,
it is now especially important to be particularly selective given that the
valuation levels that have been reached by much of the U.S. stock market have
fully discounted the good times in general. While earnings indeed have been
growing, companies must continue to post strong, consistent earnings growth to
justify current stock prices. However, through our selectivity and investment
disciplines, we have been able to add good opportunities to the portfolio.
We have been able to take advantage of the volatility in the stock market to
take gains in several holdings and purchase equities at more attractive
valuations. Another important investment focus we have been emphasizing is
the stocks of companies either based abroad or that have a significant global
presence. While many domestic stocks remain too expensive to meet our pricing
disciplines, good opportunities have been identified overseas which take
advantage of increasing competition, declining trade barriers and
privatization. Globalization will be an important long-term trend that will
continue to be a factor in the portfolios investments.
<graphic>
<line chart>
Data for chart to follow:
<TABLE>
<CAPTION>
Manning & Napier S&P 500 Total
Date Equity Portfolio Return Index
<S> <C> <C>
11/01/96 10,000 10,000
12/31/96 10,560 10,542
03/31/97 10,720 10,827
06/30/97 12,410 12,713
</TABLE>
<TABLE>
<CAPTION>
Performance From Inception 1
Total Return
Through Growth of $10,000 Average
06/30/97 Investment Cumulative Annual
<S> <C> <C> <C>
Manning & Napier
Equity Portfolio $ 12,410 24.10% N/A
Standard & Poor's (S&P)
500 Total Return Index 3 $ 12,713 27.13% N/A
</TABLE>
<graphic>
<pie chart>
Data for chart to follow:
<TABLE>
<CAPTION>
Portfolio Composition - Equity Portfolio - As of 6/30/97
<S> <C>
Electronics & Electrical Equipment 6.7%
Food & Beverages 3.6%
Paper & Allied Products 4.7%
Hospital & Medical Service Plans 3.4%
Retail 24.8%
Telecommunications 8.8%
Chemicals & Allied Products 8.4%
Air Transportation 3.6%
Petroleum Refining 3.4%
Restaurants 3.0%
Technical Instruments & Supplies 10.4%
U.S. Treasury Securities 6.5%
Miscellaneous * 12.7%
* Miscellaneous includes:
Diamonds
Distribution-Office Equipment
Engineering Services
Utilities - Electric
Cash, short-term investments,
and liabilities less other assets
</TABLE>
Please see Page 8 for Footnotes
3
<PAGE>
Performance Update as of June 30, 1997 (unaudited)
SMALL CAP PORTFOLIO
The Small Cap Portfolio has outperformed small company stocks in general, as
measured by the Russell 2000 Index, for the 8-month period from inception.
In addition, the Small Cap Portfolio outperformed the S&P 500 Index this
period, although small cap stocks in general lagged larger company stocks.
Manning & Napiers strategies occasionally lead to investments in several
companies within a given sector of the market. Although stocks are chosen
individually, industry-wide factors sometimes provide an opportunity to
purchase stocks with a strong outlook at attractive valuations. During the
first half of 1997, three such industries -- fabric retailing, consumer
software, and health care information companies -- made strong contributions
to the Series return. A portion of these holdings have been sold and the
gains locked in.
<graphic>
<line chart>
Data for chart to follow:
<TABLE>
<CAPTION>
Manning & Napier S&P 500 Total
Date Small Cap Portfolio Return Index
<S> <C> <C>
11/01/96 10,000 10,000
12/31/96 10,720 10,542
03/31/97 10,400 10,827
06/30/97 12,730 12,713
</TABLE>
<TABLE>
<CAPTION>
Performance From Inception 1
Total Return
Through Growth of $10,000 Average
06/30/97 Investment Cumulative Annual
<S> <C> <C> <C>
Manning & Napier
Small Cap Portfolio $ 12,730 27.30% N/A
Standard & Poor's (S&P)
500 Total Return Index 3 $ 12,713 27.13% N/A
</TABLE>
<graphic>
<pie chart>
Data for chart to follow:
<TABLE>
<CAPTION>
Portfolio Composition - Small Cap Portfolio - As of 6/30/97
<S> <C>
Computer Equipment 6.7%
Glass Products 4.2%
Primary Metal Industries 10.3%
Printing & Publishing 7.9%
Restaurants 4.2%
Retail 10.2%
Software 14.7%
Technical Instruments & Supplies 5.4%
Transportation Equipment 3.4%
Electronics & Electrical Equipment 7.0%
U.S. Treasury Securities 9.1%
Miscellaneous * 16.9%
* Miscellaneous includes:
Amusement & Recreation Services
Broadcast Services
Direct Mail Advertising Services
Food & Beverages
Health Services
Industrial & Commercial Machinery
Management Services
Miscellaneous Plastic Products
Telecommunications
Cash, short-term investments and liabilities, less other assets
</TABLE>
Please see Page 8 for Footnotes
4
<PAGE>
Performance Update as of June 30, 1997 (unaudited)
OBJECTIVES-BASED PORTFOLIOS
(MODERATE GROWTH PORTFOLIO, GROWTH PORTFOLIO, & MAXIMUM HORIZON PORTFOLIO)
The portion of each of these Series which is allocated to stocks has increased
substantially since the end of 1996. As discussed in the letter at the
beginning of this Semi-Annual Report, we feel that, despite overall high stock
market valuations, good opportunities exist in the market. When we identify
stocks which meet our investment criteria and have appropriate valuations,
they are added to the portfolio. Market volatility, such as we experienced in
late March and early April, sometimes can provide the opportunity to purchase
stocks which were previously priced too high to meet our strategy.
An important part of our overview has been the increased globalization of the
world economy. Capitalism has spread, trade restrictions and tariffs have
been reduced, and technology has also helped make worldwide trade an important
trend. From an investment perspective, this means that many opportunities are
located outside of the United States. Accordingly, a portion of the stocks in
each of these portfolios is invested in international stocks.
<graphic>
<line chart>
Data for chart to follow:
<TABLE>
<CAPTION>
Manning & Napier Lehman Brothers 30-70
Date Moderate Growth Portfolio Intermediate Bond Index Balanced Index
<S> <C> <C> <C>
11/01/96 10,000 10,000 10,000
12/31/96 10,110 10,067 10,211
03/31/97 10,060 10,056 10,286
06/30/97 10,710 10,352 11,036
</TABLE>
<TABLE>
<CAPTION>
Performance From Inception 1
Total Return
Through Growth of $10,000 Average
06/30/97 Investment Cumulative Annual
<S> <C> <C> <C>
Manning & Napier
Moderate Growth Portfolio $ 10,710 7.10% N/A
Lehman Brothers Intermediate
Bond Index 4 $ 10,352 3.52% N/A
30-70 Balanced Index 5 $ 11,036 10.36% N/A
</TABLE>
<graphic>
<pie chart>
Data for chart to follow:
Portfolio Composition - Moderate Growth - As of 6/30/97
Stocks 39.6%
Bonds 58.8%
Cash, short-term investments, and liabilities less other assets 1.6%
Please see Page 8 for Footnotes
5
<PAGE>
Performance Update as of June 30, 1997 (unaudited)
Objective-Based Portfolios
(Moderate Growth Portfolio, Growth Portfolio & Maximum Horizon Portfolio)
<graphic>
<line chart>
Data for chart to follow:
<TABLE>
<CAPTION>
Manning & Napier Lehman Brothers 50-50
Date Growth Portfolio Intermediate Bond Index Balanced Index
<S> <C> <C> <C>
11/01/96 10,000 10,000 10,000
12/31/96 10,250 10,067 10,311
03/31/97 10,290 10,056 10,421
06/30/97 11,440 10,352 11,520
</TABLE>
<TABLE>
<CAPTION>
Performance From Inception 1
Total Return
Through Growth of $10,000 Average
06/30/97 Investment Cumulative Annual
<S> <C> <C> <C>
Manning & Napier
Growth Portfolio $ 11,440 14.40% N/A
Lehman Brothers Intermediate
Bond Index 4 $ 10,352 3.52% N/A
50-50 Balanced Index 6 $ 11,520 15.20% N/A
</TABLE>
<graphic>
<pie chart>
Data for chart to follow:
Portfolio Composition - Growth Portfolio - As of 6/30/97
Stocks 63.6%
Bonds, Cash, short-term investments and liabilities less other assets - 36.4%
Please see Page 8 for Footnotes
6
<PAGE>
Performance Update as of June 30, 1997 (unaudited)
Objective-Based Portfolios
(Moderate Growth Portfolio, Growth Portfolio & Maximum Horizon Portfolio)
<graphic>
<line chart>
Data for chart to follow:
<TABLE>
<CAPTION>
Manning & Napier S&P
Date Maximum Horizon Portfolio 500 Total Return Index
<S> <C> <C>
11/01/96 10,000 10,000
12/31/96 10,440 10,542
03/31/97 10,540 10,827
06/30/97 12,190 12,713
</TABLE>
<TABLE>
<CAPTION>
Performance From Inception 1
Total Return
Through Growth of $10,000 Average
06/30/97 Investment Cumulative Annual
<S> <C> <C> <C>
Manning & Napier
Maximum Horizon Portfolio $ 12,190 21.90% N/A
Standard & Poor's (S&P)
500 Total Return Index 3 $ 12,713 27.13% N/A
</TABLE>
<graphic>
<pie chart>
Data for chart to follow:
Portfolio Composition - Maximum Horizon Portfolio - As of 6/30/97
Stocks 94.4%
Bonds 3.3%
Cash, short-term investments, and liabilities, less other assets 2.3%
Please see Page 8 for Footnotes
7
<PAGE>
Footnotes to Performance Update (unaudited)
1 Performance numbers for the Funds and Indices are calculated from
November 1, 1996, the Funds' inception date. The Funds' performance
is historical and may not be indicative of future results.
2 The Merrill Lynch Corporate/Government Bond Index is a market value
weighted measure of approximately 3,592 corporate and government bonds.
The Index is comprised of investment grade securities with maturities
greater than one year. The Index returns assume reinvestment of coupons
and, unlike Fund returns, do not reflect any fees or expenses.
3 The Standard & Poor's (S&P) 500 Total Return Index is an unmanaged
capitalization-weighted measure of 500 widely held common stocks listed
on the New York Stock Exchange, American Stock Exchange, and Over-
the-Counter market. The Index returns assume reinvestment of income and,
unlike Fund returns, do not reflect any fees or expenses.
4 The Lehman Brothers Intermediate Bond Index is a market value
weighted measure of approximately 3,717 corporate and government
securities. The Index is comprised of investment grade securities with
maturities greater than one year but less than ten years. The Index
returns assume reinvestment of income and, unlike Fund returns, do
not reflect any fees or expenses.
5 The Balanced Index is 30 % S&P 500 Total Return Index (see note 3) and
70% Lehman Brothers Intermediate Bond Index (see note 4). The Index returns
assume reinvestment of income and, unlike Fund returns, do not reflect
any fees or expenses.
6 The Balanced Index is 50 % S&P 500 Total Return Index (see note 3) and
50% Lehman Brothers Aggregate Bond Index. The Lehman Brothers
Aggregate Bond Index is a market value weighted measure of approximately
6,001 corporate, government, and mortgage backed securities. The Index
is comprised of investment grade securities with maturities greater than
one year. The Index returns assume reinvestment of income and, unlike
Fund returns, do not reflect any fees or expenses.
8
<PAGE>
Investment Portfolio - June 30, 1997 (unaudited)
<TABLE>
<CAPTION>
Manning & Napier Bond Portfolio
PRINCIPAL VALUE
AMOUNT/SHARES (NOTE 2)
<S> <C> <C>
U.S. TREASURY SECURITIES - 50.58%
U.S. Treasury Note, 6.50%, 10/15/2006 $ 30,000 $ 29,869
U.S. Treasury Bond, 6.875%, 8/15/2025 35,000 35,109
--------
TOTAL U.S. TREASURY SECURITIES
(Identified Cost $66,697) 64,978
--------
U.S. GOVERNMENT AGENCIES - 47.50%
Federal Home Loan Bank Bond, 5.905%, 10/23/1998 10,000 9,983
Federal Home Loan Mortgage Bond, 6.13%,
8/19/1999 15,000 14,970
Federal National Mortgage Association, 7.55%,
4/22/2002 15,000 15,613
Student Loan Marketing Association, 7.50%,
3/8/2000 15,000 15,432
Tennessee Valley Authority, 6.875%, 1/15/2002 5,000 5,032
--------
TOTAL U.S. GOVERNMENT AGENCIES
(Identified Cost $61,623) 61,030
--------
SHORT-TERM INVESTMENTS - 1.56%
Dreyfus U.S. Treasury Money Market Reserves
(Identified Cost $2,004) 2,004 2,004
--------
TOTAL INVESTMENTS - 99.64%
(Identified Cost $130,324) 128,012
OTHER ASSETS, LESS LIABILITIES - 0.36% 461
--------
NET ASSETS - 100% 128,473
========
</TABLE>
<TABLE>
<CAPTION>
FEDERAL TAX INFORMATION:
<S> <C>
At June 30 1997, the net unrealized depreciation based on
identified cost for federal income tax purposes
of $130,324 was as follows:
Aggregate gross unrealized appreciation for all investments
in which there was an excess of value over tax cost $ 0
Aggregate gross unrealized depreciation for all investments
in which there was an excess of tax cost over value (2,312)
--------
UNREALIZED DEPRECIATION - NET ($2,312)
========
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
<TABLE>
<CAPTION>
Manning & Napier Equity Portfolio VALUE
SHARES (NOTE 2)
COMMON STOCK - 91.79%
<S> <C> <C>
AIR TRANSPORTATION - 3.60%
Federal Express Corp.* 100 $ 5,775
--------
CHEMICALS & ALLIED PRODUCTS - 8.41%
Colgate Palmolive, Co. 100 6,525
Pharmacia & Upjohn, Inc. 200 6,950
--------
13,475
--------
DIAMONDS - 2.88%
De Beers Centenary AG - ADR (Note 7) 125 4,617
--------
DISTRIBUTION - OFFICE EQUIPMENT - 3.00%
Unisource Worldwide, Inc. 300 4,800
--------
ELECTRONICS & ELECTRICAL EQUIPMENT - 6.68%
Coleman Company, Inc.* 400 6,900
Motorola, Inc. 50 3,800
--------
10,700
--------
ENGINEERING SERVICES - 2.94%
Jacobs Engineering Group, Inc.* 175 4,703
--------
FOOD & BEVERAGE - 3.63%
Unilever Plc - ADR (Note 7) 50 5,810
--------
HOSPITAL & MEDICAL SERVICE PLANS - 3.37%
MedPartners, Inc.* 250 5,406
--------
PAPER & ALLIED PRODUCTS - 4.74%
Fort Howard Corp.* 150 7,594
--------
PETROLEUM REFINING - 3.36%
YPF Sociedad Anonima - ADR (Note 7) 175 5,381
--------
RESTAURANTS - 3.02%
McDonald's Corp. 100 4,831
--------
RETAIL - 24.81%
RETAIL - CATALOG & MAIL ORDER - 7.69%
Comcast Corp. - Class A 250 5,344
Fingerhut Companies, Inc. 400 6,975
--------
12,319
--------
RETAIL - SPECIALTY STORES - 17.12%
Fabri-Centers of America - Class B* 200 4,675
Hancock Fabrics, Inc. 450 6,216
Home Depot, Inc. 75 5,170
Ikon Office Solutions, Inc. 175 4,364
Tandy Corp. 125 7,000
--------
27,425
--------
39,744
</TABLE> --------
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
Investment Portfolio - June 30, 1997 (unaudited)
<TABLE>
<CAPTION>
Shares/ Value
Manning & Napier Equity Portfolio (continued) Principal Amount (Note 2)
<S> <C> <C>
TECHNICAL INSTRUMENTS & SUPPLIES - 10.36%
Eastman Kodak, Co. 100 $ 7,675
Millipore Corp. 100 4,400
Nellcor Puritan Bennett, Inc.* 250 4,531
--------
16,606
--------
TELECOMMUNICATIONS - 8.77%
Compania Anonima Nacional Telefonos
de Venezuela (CANTV) - ADR* (Note 7) 150 6,469
Telecomunicacoes Brasileiras - Telebras - ADR
(Note 7) 50 7,588
--------
14,057
--------
UTILITIES - ELECTRIC - 2.22%
Enersis S.A. - ADR (Note 7) 100 3,556
--------
TOTAL COMMON STOCK
(Identified Cost $121,669) 147,055
--------
U.S. TREASURY SECURITIES - 6.51%
U.S. Treasury Bond, 7.25%, 8/15/2022
(Identified Cost $10,606) $ 10,000 10,434
--------
SHORT-TERM INVESTMENTS - 2.66%
Dreyfus U.S. Treasury Money Market Reserves
(Identified Cost $4,254) 4,254 4,254
--------
TOTAL INVESTMENTS - 100.96%
(Identified Cost $136,529) 161,743
LIABILITIES, LESS OTHER ASSETS - (0.96)% (1,532)
--------
NET ASSETS - 100% $160,211
========
</TABLE>
* Non-Income producing security.
FEDERAL TAX INFORMATION:
At June 30, 1997, the net unrealized appreciation based on
identified cost for federal income tax purposes of $136,529
was as follows:
Aggregate gross unrealized appreciation for all investments
in which there was an excess of value over tax cost $29,289
Aggregate gross unrealized depreciation for all investments
in which there was an excess of tax cost over value (4,075)
--------
UNREALIZED APPRECIATION - NET $25,214
========
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
Investment Portfolio - June 30, 1997 (unaudited)
<TABLE>
<CAPTION>
Value
Manning & Napier Small Cap Portfolio Shares (Note 2)
<S> <C> <C>
COMMON STOCK - 90.45%
AMUSEMENT & RECREATION SERVICES - 1.79%
Grand Casinos, Inc.* 200 $ 2,950
--------
BROADCAST SERVICES - 2.20%
Groupe AB - ADR (Note 7) 425 3,613
--------
COMPUTER EQUIPMENT- 6.66%
Bell & Howell Company, Inc.* 300 9,244
Varitronix International Ltd. (Note 7) 1,000 1,698
--------
10,942
--------
DIRECT MAIL ADVERTISING SERVICES - 1.34%
Harte-Hanks Communications 75 2,212
--------
ELECTRONICS & ELECTRICAL EQUIPMENT - 7.02%
Coleman Company, Inc.* 425 7,331
Harman International Industries, Inc. 100 4,213
--------
11,544
--------
FOOD & BEVERAGES - 2.07%
Canandaigua Wine Co.* 100 3,400
--------
GLASS PRODUCTS - 4.26%
Libbey, Inc.* 200 7,000
--------
HEALTH SERVICES - 0.59%
U. S. Physical Therapy, Inc.* 100 962
--------
INDUSTRIAL & COMMERCIAL MACHINERY - 2.16%
Outboard Marine Corp.* 200 3,550
--------
MANAGEMENT SERVICES - 2.05%
Physician Support Systems, Inc.* 275 3,369
--------
MISCELLANEOUS PLASTIC PRODUCTS - 1.84%
Pt Tri Polyta Indonesia - Sp ADR (Note 7) 525 3,019
--------
PRIMARY METAL INDUSTRIES - 10.33%
American Superconductor Corp.* 250 3,062
Gibraltar Steel Corp.* 275 6,325
Special Metals Corp.* 175 3,413
Wolverine Tube, Inc.* 150 4,181
--------
16,981
--------
PRINTING & PUBLISHING - 7.91%
Houghton Mifflin Co. 25 1,669
Playboy Enterprises, Inc. - Class A* 125 1,437
Playboy Enterprises, Inc. - Class B* 250 2,891
Scholastic Corp.* 200 7,000
--------
12,997
--------
RESTAURANTS - 4.23%
Morton Restaurant Group, Inc. 350 6,956
</TABLE> --------
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
Investment Portfolio - June 30, 1997 (unaudited)
<TABLE>
<CAPTION>
Shares/ Value
Manning & Napier Small Cap Portfolio (continued) Principal Amount (Note 2)
<S> <C> <C>
RETAIL - SPECIALTY STORES - 10.22%
Fabri-Centers of America - Class A* 375 $ 10,219
Hancock Fabrics, Inc. 300 4,144
Loehmans Holdings, Inc. 375 2,437
--------
16,800
--------
SOFTWARE -14.65%
Activision, Inc.* 100 1,437
Apache Medical Systems, Inc. 200 1,525
Broderbund Software, Inc.* 175 4,320
Electronic Arts, Inc.* 100 3,362
Imnet Systems, Inc. 125 3,883
Medic Computer Systems, Inc.* 150 3,338
Spectrum Holobyte, Inc.* 275 1,341
Symantec Corp.* 250 4,875
--------
24,081
--------
TECHNICAL INSTRUMENTS & SUPPLIES - 5.38%
Lunar Corp.* 175 3,806
Sola International, Inc.* 150 5,025
--------
8,831
--------
TELECOMMUNICATIONS - 2.31%
Vimpel Communications - ADR (Note 7)* 100 3,800
--------
TRANSPORTATION EQUIPMENT - 3.44%
Federal Signal Corp. 225 5,653
--------
TOTAL COMMON STOCK
(Identified Cost $126,419) 148,660
--------
U.S. TREASURY NOTES - 9.14%
U.S. Treasury Note, 6.50%, 8/15/1997 (Identified
Cost $15,031) $ 15,000 15,019
--------
SHORT-TERM INVESTMENTS - 1.37%
Dreyfus U.S. Treasury Money Market Reserves 2,132 2,132
Dreyfus Government Cash Management Class A 125 125
--------
TOTAL SHORT-TERM INVESTMENTS
(Identified Cost $2,257) 2,257
--------
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
Investment Portfolio - June 30, 1997 (unaudited)
<TABLE>
<CAPTION>
Value
Manning & Napier Small Cap Portfolio (continued) (Note 2)
<S> <C>
TOTAL INVESTMENTS - 100.96%
(Identified Cost $143,707) $165,936
LIABILITIES, LESS OTHER ASSETS - (0.96)% (1,574)
--------
NET ASSETS - 100% $164,362
</TABLE> ========
* Non-income producing security
<TABLE>
<CAPTION>
FEDERAL TAX INFORMATION:
At June 30, 1997, the net unrealized appreciation based on identified cost
for federal income tax purposes of $143,707 was as follows:
<S> <C>
Aggregate gross unrealized appreciation for all investments
in which there was an excess of value over tax cost $27,952
Aggregate gross unrealized depreciation for all investments
in which there was an excess of tax cost over value (5,723)
--------
UNREALIZED APPRECIATION - NET $22,229
========
</TABLE>
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
Investment Portfolio - June 30, 1997 (unaudited)
<TABLE>
<CAPTION>
Value
Manning & Napier Moderate Growth Portfolio SHARES (Note 2)
<S> <C> <C>
COMMON STOCK - 39.57%
AIR TRANSPORTATION- 1.06%
Federal Express Corp.* 25 $ 1,444
--------
AMUSEMENT & RECREATIONAL SERVICES- 1.11%
Resorts World Berhad - ADR (Note 7) 100 1,505
--------
CHEMICALS & ALLIED PRODUCTS - 2.56%
Pharmacia & Upjohn, Inc. 100 3,475
--------
COMMUNICATIONS- 1.08%
Stet Societa' Finanziaria Telefonica S.p.A. -
ADR (Note 7) 25 1,459
--------
DIAMONDS- 1.36%
De Beers Centenary AG - ADR (Note 7) 50 1,847
--------
DISTRIBUTION - OFFICE EQUIPMENT - 1.77%
Unisource Worldwide, Inc. 150 2,400
--------
ENGINEERING SERVICES - 0.50%
Jacobs Engineering Group, Inc.* 25 672
--------
FOOD & BEVERAGE - 2.14%
Unilever Plc - ADR (Note 7) 25 2,905
--------
HOSPITAL & MEDICAL SERVICE PLANS- 1.99%
MedPartners, Inc.* 125 2,703
--------
INDUSTRIAL & COMMERCIAL MACHINERY - 0.85%
York International Corp. 25 1,150
--------
MOTION PICTURES - 2.21%
Viacom, Inc. - Class B* 100 3,000
--------
RESTAURANTS - 4.45%
McDonald's Corp. 125 6,039
--------
RETAIL - 6.87%
RETAIL - CATALOG & MAIL ORDER - 3.18%
Comcast Corp. - Class A 100 2,138
Fingerhut Companies, Inc. 125 1,180
--------
4,318
--------
RETAIL - SPECIALTY STORES - 3.69%
Fabri-Centers of America - Class B* 50 1,169
Hancock Fabrics, Inc. 75 1,036
Tandy Corp. 50 2,800
--------
5,005
--------
9,323
---------
TECHNICAL INSTRUMENTS & SUPPLIES - 7.24%
Eastman Kodak Co. 75 5,756
Nellcor Puritan Bennett, Inc.* 225 4,078
--------
9,834
</TABLE> --------
The accompanying notes are an integral part of the financial statements.
<PAGE>
Investment Portfolio - June 30, 1997 (unaudited)
<TABLE>
<CAPTION>
Principal Amount/ Value
Manning & Napier Moderate Growth Portfolio (continued) Shares (Note 2)
<S> <C> <C>
TELECOMMUNICATIONS - 4.38%
Compania Anonima Nacional Telefonos
de Venezuela (CANTV) - ADR* (Note 7) 50 $ 2,156
Telecomunicacoes Brasileiras Telebras- ADR
(Note 7) 25 3,794
--------
5,950
--------
TOTAL COMMON STOCK
(Identified Cost $48,080) 53,706
--------
U.S. TREASURY SECURITIES- 25.82%
U.S. TREASURY BONDS - 18.48%
U.S. Treasury Bond, 6.875%, 8/15/2025
(Identified Cost $25,612) $ 25,000 25,078
--------
U.S. TREASURY NOTES - 7.34%
U.S. Treasury Note, 6.50%, 10/15/2006 5,000 4,978
U.S. Treasury Note, 6.25%, 10/31/2001 5,000 4,978
--------
TOTAL U.S. TREASURY NOTES
(Identified Cost $10,103) 9,956
--------
TOTAL U.S. TREASURY SECURITIES
(Identified Cost $35,715) 35,034
--------
U.S. GOVERNMENT AGENCY - 33.02%
Federal Home Loan Bank Bond, 5.95%,
11/5/1999 15,000 14,898
Federal National Mortgage Association, 5.375%,
6/10/1998 15,000 14,924
Tennessee Valley Authority, 5.95%, 9/15/1998 15,000 14,983
--------
TOTAL U.S. GOVERNMENT AGENCIES
(Identified Cost $44,976) 44,805
---------
SHORT-TERM INVESTMENTS - 3.52%
Dreyfus U.S. Treasury Money Market Reserves
(Identified Cost $4,774) 4,774 4,774
--------
TOTAL INVESTMENTS - 101.93%
(Identified Cost $133,545) 138,319
LIABILITIES, LESS OTHER ASSETS - (1.93)% (2,619)
--------
NET ASSETS - 100% $135,700
========
</TABLE>
*Non-income producing security
<TABLE>
<CAPTION>
FEDERAL TAX INFORMATION:
<S> <C>
At June 30, 1997, the net unrealized appreciation based on
identified cost for federal income tax purposes of $135,545 was as follows:
Aggregate gross unrealized appreciation for all investments
in which there was an excess of value over tax cost $ 6,561
Aggregate gross unrealized depreciation for all investments
in which there was an excess of tax cost over value (1,787)
--------
UNREALIZED APPRECIATION - NET $ 4,774
========
</TABLE>
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
Investment Portfolio - June 30, 1997 (unaudited)
<TABLE>
<CAPTION>
Value
Manning & Napier Growth Portfolio SHARES (Note 2)
<S> <C> <C>
COMMON STOCK - 63.57%
AIR TRANSPORTATION- 1.00%
Federal Express Corp.* 25 $ 1,444
--------
AMUSEMENT & RECREATIONAL SERVICES - 1.04%
Resorts World Berhad - Spa ADR (Note 7) 100 1,505
--------
CHEMICALS & ALLIED PRODUCTS - 3.59%
Pharmacia & Upjohn, Inc. 150 5,213
--------
COMMUNICATIONS- 4.77%
Frontier Corp. 200 3,987
Stet Societa' Finanziaria Telefonica S.p.A. -
ADR (Note 7) 50 2,919
--------
6,906
--------
DIAMONDS- 1.91%
De Beers Centenary AG - ADR (Note 7) 75 2,770
--------
DISTRIBUTION - OFFICE EQUIPMENT - 1.10%
Unisource Worldwide, Inc. 100 1,600
--------
ELECTRONICS & ELECTRICAL EQUIPMENT - 2.62%
Motorola, Inc. 50 3,800
--------
ENGINEERING SERVICES - 0.46%
Jacobs Engineering Group, Inc.* 25 672
--------
FOOD & BEVERAGE - 4.48%
Allied Domecq PLC - ADR (Note 7) 500 3,591
Unilever Plc - ADR (Note 7) 25 2,905
--------
6,496
--------
HOSPITAL & MEDICAL SERVICE PLANS - 3.36%
MedPartners, Inc.* 225 4,866
--------
MOTION PICTURES - 3.11%
Viacom, Inc. - Class B* 150 4,500
--------
SOFTWARE - 3.48%
Oracle Corp.* 100 5,038
--------
PETROLEUM REFINING - 1.59%
YPF Sociedad Anonima - ADR (Note 7) 75 2,306
--------
RESTAURANTS - 3.33%
McDonald's Corp. 100 4,831
--------
RETAIL - 10.52%
RETAIL - CATALOG & MAIL ORDER - 3.72%
Comcast Corp. - Class A 150 3,206
Fingerhut Companies, Inc. 125 2,180
--------
5,386
--------
RETAIL - SPECIALTY STORES - 6.80%
Fabri-Centers of America - Class B* 50 1,169
Hancock Fabrics, Inc. 75 1,036
Home Depot, Inc. 50 3,447
Tandy Corp. 75 4,200
--------
9,852
--------
15,238
</TABLE> --------
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
Investment Portfolio - June 30, 1997 (unaudited)
<TABLE>
<CAPTION>
Shares/ Value
Manning & Napier Growth Portfolio (continued) Principal Amount (Note 2)
<S> <C> <C>
TECHNICAL INSTRUMENTS & SUPPLIES - 10.39%
Eastman Kodak Co. 100 $ 7,675
Millipore Corp. 75 3,300
Nellcor Puritan Bennett, Inc.* 225 4,078
--------
15,053
--------
TELECOMMUNICATIONS - 5.59%
Compania Anonima Nacional Telefonos de
Venezuela (CANTV) - ADR* (Note 7) 100 4,312
Telecomunicacoes Brasileiras - Telebras -
ADR (Note 7) 25 3,794
--------
8,106
--------
UTILITIES-ELECTRIC- 1.23%
Enersis S.A.- ADR (Note 7) 50 1,778
--------
TOTAL COMMON STOCK
(Identified Cost $80,312) 92,122
--------
U.S. TREASURY SECURITIES- 27.67%
U.S. Treasury Bond, 6.875%, 8/15/2025 $ 35,000 35,109
U.S. Treasury Note, 6.25%, 10/31/2001 5,000 4,978
--------
TOTAL U.S. TREASURY SECURITIES
(Identified Cost $40,813) 40,087
---------
U.S. GOVERNMENT AGENCY - 10.28%
Federal Home Loan Mortgage Corporation, 5.95%,
11/5/1999 (Identified Cost $15,023) 15,000 14,898
--------
SHORT-TERM INVESTMENTS - 2.81%
Dreyfus U.S. Treasury Money Market Reserves
(Identified Cost $4,071) 4,071 4,071
--------
TOTAL INVESTMENTS - 104.33%
(Identified Cost $140,219) 151,178
LIABILITIES, LESS OTHER ASSETS - (4.33)% (6,264)
--------
NET ASSETS - 100% $144,914
========
</TABLE>
*Non-income producing security
<TABLE>
<CAPTION>
FEDERAL TAX INFORMATION:
<S> <C>
At June 30, 1997, the net unrealized appreciation based on
identified cost for federal income tax purposes of $140,219 was as follows:
Aggregate gross unrealized appreciation for all investments
in which there was an excess of value over tax cost $12,917
Aggregate gross unrealized depreciation for all investments
in which there was an excess of tax cost over value (1,958)
--------
UNREALIZED APPRECIATION - NET $10,959
========
</TABLE>
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
Investment Portfolio - June 30, 1997 (unaudited)
<TABLE>
<CAPTION>
VALUE
Manning & Napier Maximum Horizon Portfolio SHARES (NOTE 2)
<S> <C> <C>
COMMON STOCK - 94.44%
AMUSEMENT & RECREATIONAL SERVICES - 0.98%
Resorts World Berhad - Spa ADR (Note 7) 100 $ 1,506
--------
CHEMICAL & ALLIED PRODUCTS - 10.24%
Pharmacia & Upjohn, Inc. 150 5,212
Procter & Gamble Co. 75 10,594
--------
15,806
--------
COMMUNICATIONS - 6.71%
Frontier Corp. 300 5,981
Stet Societa' Finanziaria Telefonica S.p.A. - ADR
(Note 7) 75 4,378
--------
10,359
--------
COMPUTER INTEGRATED SYSTEMS DESIGN - 4.46%
HBO & Co. 100 6,887
--------
DIAMONDS - 2.39%
De Beers Centenary AG - ADR (Note 7) 100 3,694
--------
DISTRIBUTION - OFFICE EQUIPMENT - 1.94%
Unisource Worldwide, Inc. 187 2,992
--------
ELECTRONICS & ELECTRICAL PRODUCTS - 6.65%
Coleman Company, Inc.* 375 6,469
Motorola, Inc. 50 3,800
--------
10,269
--------
ENGINEERING SERVICES - 0.44%
Jacobs Engineering Group, Inc.* 25 672
--------
FOOD & BEVERAGE - 1.88%
Unilever Plc - ADR (Note 7) 25 2,905
--------
HOSPITAL & MEDICAL SERVICE PLANS - 3.15%
MedPartners, Inc.* 225 4,866
--------
INDUSTRIAL & COMMERCIAL MACHINERY - 2.23%
York International Corp. 75 3,450
--------
MOTION PICTURES - 3.89%
Viacom, Inc. - Class B* 200 6,000
--------
PAPER MILLS - 6.51%
Fort Howard Corp.* 100 5,063
Kimberly-Clark Corp. 100 4,975
--------
10,038
--------
PETROLEUM REFINING - 2.99%
YPF Sociedad Anonima - ADR (Note 7) 150 4,612
--------
RESTAURANTS - 3.91%
McDonald's Corp. 125 6,039
--------
RETAIL - 12.96%
RETAIL - CATALOG & MAIL ORDER - 4.18%
Comcast Corp. - Class A 200 4,275
Fingerhut Companies, Inc. 125 2,180
--------
6,455
</TABLE> --------
The accompanying notes are an integral part of the financial statements.
19
<PAGE>
Investment Portfolio - June 30, 1997 (unaudited)
<TABLE>
<CAPTION>
Value
Manning & Napier Maximum Horizon Portfolio (continued) Shares (Note 2)
<S> <C> <C>
RETAIL (continued)
RETAIL - SPECIALTY STORES - 8.78%
Hancock Fabrics, Inc. 100 $ 1,381
Home Depot, Inc. 75 5,170
Tandy Corp. 125 7,000
---------
13,551
---------
20,006
---------
SOFTWARE - 5.71%
Oracle Corp.* 175 8,816
---------
TECHNICAL INSTRUMENTS & SUPPLIES - 9.85%
Eastman Kodak Co. 75 5,756
Millipore Corp. 50 2,200
Nellcor Puritan Bennett, Inc.* 400 7,250
---------
15,206
---------
TELECOMMUNICATIONS - 5.25%
Compania Anonima Nacional Telefonos
de Venezuela (CANTV) - ADR* (Note 7) 100 4,312
Telecomunicacoes Brasileiras - Telebras -
ADR (Note 7) 25 3,794
---------
8,106
---------
UTILITIES-ELECTRIC - 2.30%
Enersis S.A.- ADR (Note 7) 100 3,556
---------
TOTAL COMMON STOCK
(Identified Cost $123,781) 145,785
---------
U.S. TREASURY SECURITIES - 3.25%
U.S. Treasury Bond, 6.875%, 8/15/2025
(Identified Cost $4,881) $ 5,000 5,015
---------
SHORT-TERM INVESTMENTS - 3.30%
Dreyfus U.S. Treasury Money Market Reserves
(Identified Cost $5,099) 5,099 5,099
---------
TOTAL INVESTMENTS - 100.99%
(Identified Cost $133,761) 155,899
LIABILITIES, LESS OTHER ASSETS - (0.99)% (1,528)
---------
NET ASSETS - 100% $154,371
=========
</TABLE>
*Non-income producing security
<TABLE>
<CAPTION>
FEDERAL TAX INFORMATION:
<S> <C>
At June 30, 1997, the net unrealized appreciation based on
identified cost for federal income tax purposes of $133,761
was as follows:
Aggregate gross unrealized appreciation for all investments in
which there was an excess of value over tax cost $23,801
Aggregate gross unrealized depreciation for all investments in
which there was an excess of tax cost over value (1,663)
---------
UNREALIZED APPRECIATION - NET $22,138
=========
</TABLE>
The accompanying notes are an integral part of the financial statements.
20
<PAGE>
Statement of Assets and Liabilities (unaudited)
June 30, 1997
<TABLE>
<CAPTION>
MANNING & NAPIER INSURANCE FUND, INC.
---------------------------------------
Moderate
Bond Equity Small Cap Growth Growth
Portfolio Portfolio Portfolio Portfolio Portfolio
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments in securities (Note 2):
At identified cost $ 130,324 $ 136,529 $ 143,707 $ 135,545 $ 140,219
======= ======= ======= ======= =======
At value $ 128,012 $ 161,743 $ 165,936 $ 138,319 $ 151,178
Cash -- -- 82 -- 19
Dividends receivable -- 241 24 120 150
Interest receivable 2,487 272 366 1,214 1,096
Receivable for securities sold -- -- -- -- --
Receivable from investment advisor
advisor (Note 3) 10,281 9,792 9,962 10,035 10,007
------- ------- ------- ------- -------
TOTAL ASSETS 140,780 172,048 176,370 149,688 162,450
------- ------- ------- ------- -------
LIABILITIES:
Accrued Directors' fees (Note 3) 3,405 3,405 3,405 3,405 3,405
Audit fee payable 4,391 4,391 4,391 4,391 4,391
Payable for securities purchased -- -- -- 1,838 5,489
Other payables and accrued expenses 4,511 4,041 4,212 4,354 4,251
------- ------- ------- ------- -------
TOTAL LIABILITIES 12,307 11,837 12,008 13,988 17,536
------- ------- ------- ------- -------
NET ASSETS $ 128,473 $ 160,211 $ 164,362 $ 135,700 $ 144,914
======= ======= ======= ======= =======
NET ASSETS CONSIST OF:
Capital stock $ 127 $ 129 $ 129 $ 127 $ 127
Additional paid-in-capital 126,540 129,064 130,598 126,540 126,540
Undistributed net investment income 4,118 1,021 243 3,189 2,542
Accumulated net realized gain
on investments -- 4,783 11,163 1,070 4,746
Net unrealized appreciation
(depreciation) on investments (2,312) 25,214 22,229 4,774 10,959
------- ------- ------- ------- -------
TOTAL NET ASSETS $ 128,473 $ 160,211 $ 164,362 $ 135,700 $ 144,914
======= ======= ======= ======= =======
SHARES OUTSTANDING 12,667 12,907 12,913 12,667 12,667
======= ======= ======= ======= =======
NET ASSET VALUE PER SHARE $ 10.14 $ 12.41 $ 12.73 $ 10.71 $ 11.44
======= ======= ======= ======= =======
Maximum
Horizon
Portfolio
<S> <C>
ASSETS:
Investments in securities (Note 2):
At identified cost $ 133,761
=======
At value $ 155,899
Cash --
Dividends receivable 206
Interest receivable 129
Receivable for securities sold 2,926
Receivable from investment advisor
advisor (Note 3) 9,974
-------
TOTAL ASSETS 169,134
-------
LIABILITIES:
Accrued Directors' fees (Note 3) 3,405
Audit fee payable 4,391
Payable for securities purchased 2,758
Other payables and accrued expenses 4,209
-------
TOTAL LIABILITIES 14,763
-------
NET ASSETS $ 154,371
=======
NET ASSETS CONSIST OF:
Capital stock $ 127
Additional paid-in-capital 126,540
Undistributed net investment income 1,054
Accumulated net realized gain
on investments 4,512
Net unrealized appreciation
(depreciation) on investments 22,138
-------
TOTAL NET ASSETS $ 154,371
=======
SHARES OUTSTANDING 12,667
=======
NET ASSET VALUE PER SHARE $ 12.19
=======
</TABLE>
The accompanying notes are an integral part of the financial statements.
21
<PAGE>
Statement of Operations (unaudited)
For the Six Months Ended June 30, 1997
<TABLE>
<CAPTION>
MANNING & NAPIER INSURANCE FUND, INC.
---------------------------------------
Moderate
Bond Equity Small Cap Growth
Portfolio Portfolio Portfolio Portfolio
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 3,867 $ 466 $ 581 $ 2,856
Dividends -- 822 398 288
Other Income -- -- 1,546 --
------ ------ ------ ------
Total Investment Income 3,867 1,288 2,525 3,144
------ ------ ------ ------
EXPENSES:
Management fees (Note 3) 312 723 708 647
Directors' fees (Note 3) 3,405 3,405 3,405 3,405
Custodian fee 60 259 740 390
Audit fee 3,471 3,471 3,471 3,471
Miscellaneous 3,875 3,526 3,195 3,545
------ ------ ------ ------
Total Expenses 11,123 11,384 11,519 11,458
Less Waiver of Expenses (Note 3) (10,593) (10,515) (10,670) (10,682)
------ ------ ------ ------
Net Expenses 530 869 849 776
------ ------ ------ ------
NET INVESTMENT INCOME 3,337 419 1,676 2,368
------ ------ ------ ------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments -- 6,370 11,847 1,070
Net change in unrealized appreciation
(depreciation) on investments (739) 17,155 12,465 4,158
------ ------- ------- -------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS (739) 23,525 24,312 5,228
------ ------- ------- -------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 2,598 $ 23,944 $ 25,988 $ 7,596
====== ======= ======= =======
Maximum
Growth Horizon
Portfolio Portfolio
<S> <C> <C>
INVESTMENT INCOME:
Interest $ 2,236 $ 810
Dividends 476 785
Other Income -- --
------ ------
Total Investment Income 2,712 1,595
------ ------
EXPENSES:
Management fees (Note 3) 670 698
Directors' fees (Note 3) 3,405 3,405
Custodian fee 340 510
Audit fee 3,471 3,471
Miscellaneous 3,595 3,425
------ ------
Total Expenses 11,481 11,509
Less Waiver of Expenses (Note 3) (10,677) (10,672)
------ ------
Net Expenses 804 837
------ ------
NET INVESTMENT INCOME 1,908 758
------ ------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments 4,769 4,602
Net change in unrealized appreciation
(depreciation) on investments 8,363 16,795
------ ------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS 13,132 21,397
------ ------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 15,040 $ 22,155
====== ======
</TABLE>
The accompanying notes are an integral part of the financial statements.
22
<PAGE>
Statement of Changes in Net Assets (unaudited)
<TABLE>
<CAPTION>
MANNING & NAPIER INSURANCE FUND INC
Bond Portfolio Equity Portfolio
------------------------------------- -----------------
For the six For the For the six For the
months period months period
ended 11/1/961 to ended 11/1/961 to
6/30/97 12/31/96 6/30/97 12/31/96
INCREASE (DECREASE) IN NET
ASSETS
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 3,337 $ 781 $ 419 $ 602
Net realized gain (loss) on investments -- -- 6,370 (1,587)
Net change in unrealized appreciation
(depreciation) on investments (739) (1,573) 17,155 8,059
------ ------ ------ ------
Net increase (decrease) in net assets
from operations 2,598 (792) 23,944 7,074
------ ------ ------ ------
CAPITAL STOCK ISSUED AND
REDEEMED:
Net increase in net assets from
capital share transactions (Note 5) -- 126,667 -- 129,193
------ ------- ------ -------
Net increase in net assets 2,598 125,875 23,944 136,267
NET ASSETS:
Beginning of period 125,875 -- 136,267 --
------- ------- ------- -------
END OF PERIOD $ 128,473 $ 125,875 $ 160,211 $ 136,267
======= ======= ======= =======
Small Cap Portfolio
--------------------
For the six For the
months period
ended 11/1/961 to
6/30/97 12/31/96
INCREASE (DECREASE) IN NET
ASSETS
<S> <C> <C>
OPERATIONS:
Net investment income $ 1,676 $ 113
Net realized gain (loss) on investments 11,847 (684)
Net change in unrealized appreciation
(depreciation) on investments 12,465 9,764
------ ------
Net increase (decrease) in net assets
from operations 25,988 9,193
------ ------
CAPITAL STOCK ISSUED AND
REDEEMED:
Net increase in net assets from
capital share transactions (Note 5) -- 129,181
------ ------
Net increase in net assets 25,988 138,374
NET ASSETS:
Beginning of period 138,374 --
------- -------
END OF PERIOD 164,362 $ 138,374
</TABLE> ======= =======
1 Commencement of operations.
The accompanying notes are an integral part of the financial statements.
23
<PAGE>
Statement of Changes in Net Assets (unaudited)
<TABLE>
<CAPTION>
MANNING & NAPIER INSURANCE FUND INC
Moderate Growth Portfolio
------------------------------------
Growth Portfolio
For the six For the For the six For the
months period months period
ended 11/1/961 to ended 11/1/961 to
6/30/97 12/31/96 6/30/97 12/31/96
INCREASE (DECREASE) IN NET
ASSETS
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 2,368 $ 821 $ 1,908 $ 634
Net realized gain (loss) on investments 1,070 -- 4,769 (23)
Net change in unrealized appreciation
(depreciation) on investments 4,158 616 8,363 2,596
------ ------ ------ ------
Net increase (decrease) in net assets
from operations 7,596 1,437 15,040 3,207
------ ------ ------ ------
CAPITAL STOCK ISSUED AND
REDEEMED:
Net increase in net assets from
capital share transactions (Note 5) -- 126,667 -- 126,667
------ ------- ------ -------
Net increase in net assets 7,596 128,104 15,040 129,874
NET ASSETS:
Beginning of period 128,104 -- 129,874 --
------- ------- ------- -------
END OF PERIOD $ 135,700 $ 128,104 $ 144,914 $ 129,874
======= ======= ======= =======
Maximum Horizon
Portfolio
----------------
For the six For the
months period
ended 11/1/961 to
6/30/97 12/31/96
INCREASE (DECREASE) IN NET
ASSETS
<S> <C> <C>
OPERATIONS:
Net investment income $ 758 $ 296
Net realized gain (loss) on investments 4,602 (90)
Net change in unrealized appreciation
(depreciation) on investments 16,795 5,343
------ ------
Net increase (decrease) in net assets
from operations 22,155 5,549
------ ------
CAPITAL STOCK ISSUED AND
REDEEMED:
Net increase in net assets from
capital share transactions (Note 5) -- 126,667
------ -------
Net increase in net assets 22,155 132,216
NET ASSETS:
Beginning of period 132,216 --
------- -------
END OF PERIOD $ 154,371 $ 132,216
</TABLE> ======= =======
1Commencement of Operations.
<PAGE>
The accompanying notes are an integral part of the financial statements.
24
<PAGE>
Financial Highlights (unaudited)
<TABLE>
<CAPTION>
MANNING & NAPIER INSURANCE FUND, INC.
---------------------------------------
Bond Portfolio Equity Portfolio
For the six For the For the six For the
months period months period
ended 11/1/961 to ended 11/1/961 to
6/30/97 12/31/96 6/30/97 12/31/96
<S> <C> <C> <C> <C>
Per share data (for a share outstanding
throughout each period):
NET ASSET VALUE - BEGINNING OF PERIOD $ 9.94 $ 10.00 $ 10.56 $ 10.00
------ ------ ------- -------
Income from investment operations:
Net investment income 0.263 0.062 0.032 0.047
Net realized and unrealized gain
(loss) on investments (0.063) (0.122) 1.818 0.513
------ ------ ------- -------
Total from investment operations 0.200 (0.060) 1.850 0.560
------ ------ ------- -------
NET ASSET VALUE - END OF PERIOD $ 10.14 $ 9.94 $ 12.41 $ 10.56
====== ====== ======= =======
Total return: 2 2.01% (0.60%) 17.52% 5.60%
Ratios of expenses (to average net
assets) / Supplemental Data:
Expenses 3 0.85% 0.85% 1.20% 1.20%
Net investment income 3 5.35% 3.92% 0.58% 2.84%
Portfolio turnover 0% 0% 28% 29%
Average commission rate paid -- -- $ 0.0600 $ .0.0661
NET ASSETS - END OF PERIOD $ 128,473 $ 125,875 $ 160,211 $ 136,267
======= ======= ======= =======
Small Cap Portfolio
For the six For the
months period
ended 11/1/961 to
6/30/97 12/31/96
<S> <C> <C>
Per share data (for a share outstanding
throughout each period):
NET ASSET VALUE - BEGINNING OF PERIOD $ 10.72 $ 10.00
------ ------
Income from investment operations:
Net investment income 0.010 0.009
Net realized and unrealized gain
(loss) on investments 2.000 0.711
------ ------
Total from investment operations 2.010 0.720
------ ------
NET ASSET VALUE - END OF PERIOD $ 12.73 $ 10.72
====== ======
Total return: 2 18.75% 7.20%
Ratios of expenses (to average net
assets) / Supplemental Data:
Expenses 3 1.20% 1.20%
Net investment income 3 0.18% 0.55%
Portfolio turnover 103% 9%
Average commission rate paid $ 0.0306 $ 0.0356
NET ASSETS - END OF PERIOD $ 164,362 $ 138,374
</TABLE> ======= =======
* The investment advisor did not impose its management fee and paid a portion
of the Fund's expenses.
If these expenses had been incurred by the Fund, expenses would have been
limited by state securities law and the net investment income per share and
the ratios would have been as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net Investment Income $ (0.547) $0.036 $ (0.826) $0.025 $ (0.769) $(0.012)
Ratios (to average net assets):
Expenses 3 17.32% 2.50% 16.75% 2.50% 15.23% 2.50%
Net investment income 3 (11.12)% 2.27% (14.97)% 1.54% (13.85)% (0.75%)
</TABLE>
1 Commencement of operations.
2 Represents aggregate total return for the period indicated.
3 Annualized.
The accompanying notes are an integral part of the financial statements.
25
<PAGE>
Financial Highlights - continued (unaudited)
<TABLE>
<CAPTION>
MANNING & NAPIER INSURANCE FUND, INC.
---------------------------------------
Moderate Growth
Portfolio Growth Portfolio
For the six For the For the six For the
months period months period
ended 11/1/961 to ended 11/1/961 to
6/30/97 12/31/96 6/30/97 12/31/96
<S> <C> <C> <C> <C>
Per share data (for a share outstanding
throughout each period):
NET ASSET VALUE - BEGINNING OF PERIOD $ 10.11 $ 10.00 $ 10.25 $ 10.00
------ ------ ------ ------
Income from investment operations:
Net investment income 0.187 0.065 0.151 0.050
Net realized and unrealized gain
(loss) on investments 0.413 0.045 1.039 0.200
------ ------ ------ ------
Total from investment operations 0.600 0.110 1.190 0.250
------ ------ ------ ------
NET ASSET VALUE - END OF PERIOD $ 10.71 $ 10.11 $ 11.44 $ 10.25
====== ====== ====== ======
Total return 2: 5.93% 1.10% 11.61% 2.50%
Ratios of expenses (to average net
assets) / Supplemental Data:
Expenses 3 1.20% 1.20% 1.20% 1.20%
Net investment income 3 3.66% 4.08% 2.85% 3.11%
Portfolio turnover 27% 0% 38% 3%
Average commission rate paid $ 0.0437 $ 0.0700 $ 0.0422 $ 0.0696
NET ASSETS - END OF PERIOD $ 135,700 $ 128,104 $ 144,914 $ 129,874
======= ======= ======= =======
Maximum Horizon
Portfolio
For the six For the
months period
ended 11/1/961 to
6/30/97 12/31/96
<S> <C> <C>
Per share data (for a share outstanding
throughout each period):
NET ASSET VALUE - BEGINNING OF PERIOD $ 10.44 $ 10.00
------ ------
Income from investment operations:
Net investment income 0.060 0.023
Net realized and unrealized gain
(loss) on investments 1.690 0.417
------ ------
Total from investment operations 1.750 0.440
------ ------
NET ASSET VALUE - END OF PERIOD $ 12.19 $ 10.44
====== ======
Total return 2: 16.76% 4.40%
Ratios of expenses (to average net
assets) / Supplemental Data:
Expenses 3 1.20% 1.20%
Net investment income 3 1.09% 1.43%
Portfolio turnover 51% 4%
Average commission rate paid $ 0.0419 $ 0.0691
NET ASSETS - END OF PERIOD $ 154,371 $ 132,216
</TABLE> ======= =======
* The investment advisor did not impose its management fee and paid a portion
of the Fund's expenses.
If these expenses had been incurred by the Fund, expenses would have been
limited by state securities law and the net investment income per share and
the ratios would have been as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net investment income $ (0.605) $0.044 $ (0.641) $0.029 $ (0.727) $0.002
Ratios (to average net assets):
Expenses 3 16.71% 2.50% 16.15% 2.50% 15.49% 2.50%
Net investment income 3 (11.85)% 2.78% (12.10)% 1.81% (13.20)% 0.13%
</TABLE>
1 Commencement of operations.
2 Represents aggregate total return for the period indicated.
3 Annualized.
The accompanying notes are an integral part of the financial statements.
26
<PAGE>
Notes to Financial Statements (unaudited)
1. ORGANIZATION
Manning & Napier Bond Portfolio (Bond Portfolio), Manning & Napier Equity
Portfolio (Equity Portfolio), Manning & Napier Small Cap Portfolio (Small Cap
Portfolio), Manning & Napier Moderate Growth Portfolio (Moderate Growth
Portfolio), Manning & Napier Growth Portfolio (Growth Portfolio), and Manning
& Napier Maximum Horizon Portfolio (Maximum Horizon Portfolio) are no-load
diversified series (collectively the Funds) of Manning & Napier Insurance
Fund, Inc. (the "Corporation"). The Corporation is organized in Maryland and
is registered under the Investment Company Act of 1940, as amended, as an
open-end management investment company. It was established for the purpose
of providing a vehicle for the investment of assets of various separate
accounts established exclusively for the purpose of providing an investment
vehicle for variable annuity contracts. Currently, shares of the Corporation
are offered only to separate accounts funding variable annuity contracts
issued by Keyport Life Insurance Company.
The total authorized capital stock of the Corporation consists of 550
million shares of common stock each having a par value of $0.01. As of June
30, 1997, the shares are currently classified into six classes of shares
including: Class A - Moderate Growth Portfolio, Class B - Growth Portfolio,
Class C - Maximum Horizon Portfolio, Class D - Equity Portfolio, Class E -
Small Cap Portfolio, and Class F - Bond Portfolio.
2. SIGNIFICANT ACCOUNTING POLICIES
SECURITY VALUATION
Portfolio securities, including domestic equities, foreign equities,
options and corporate bonds, listed on an exchange are valued at the latest
quoted sales price of the exchange on which the security is traded most
extensively. Securities not traded on valuation date or securities not
listed on an exchange are valued at the latest quoted bid price.
Debt securities, including government bonds and mortgage backed
securities, will normally be valued on the basis of evaluated bid prices.
Securities for which representative prices are not available from the
Fund's pricing service are valued at fair value as determined in good faith
by the Advisor under procedures established by and under the general
supervision and responsibility of the Fund's Board of Directors.
Short-term investments that mature in sixty (60) days or less are valued
at amortized cost.
SECURITY TRANSACTIONS, INVESTMENT INCOME AND EXPENSES
Security transactions are accounted for on the date the securities are
purchased or sold. Dividend income is recorded on the ex-dividend date.
Interest income and expenses are recorded on an accrual basis.
Most expenses of the Corporation can be attributed to a specific fund.
Expenses which cannot be directly attributed are apportioned among the funds
in the Corporation.
FEDERAL INCOME TAXES
The Funds policy is to comply with the provisions of the Internal Revenue
Code applicable to regulated investment companies. The Funds are not subject
to federal income tax to the extent the Funds qualify as Regulated Investment
Companies as defined in Subchapter M in the Internal Revenue Code and
distribute to shareholders each year their taxable income, including any net
realized gains on investments in accordance with requirements of the Internal
Revenue Code. Accordingly, no provision for federal income tax have been
made in the financial statements.
The Funds uses the identified cost method for determining realized gains
or losses on investments for both financial statement and federal income tax
reporting purposes.
DISTRIBUTION OF INCOME AND GAINS
Distributions to shareholders of net investment income are made annually.
Distributions are recorded on the ex-dividend date. Distributions of net
realized gains are distributed annually. An additional distribution may be
necessary to avoid taxation of the Funds.
27
<PAGE>
Notes to Financial Statements (unaudited)
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
DISTRIBUTION OF INCOME AND GAINS (continued)
The timing and characterization of certain income and capital gains are
determined in accordance with federal income tax regulations which may differ
from generally accepted accounting principles. The differences may be a
result of deferral of certain losses, foreign denominated investments or
character reclassification between net income and net gains. As a result,
net investment income (loss) and net investment gain (loss) on investment
transactions for a reporting period may differ significantly from
distributions to shareholders during such period. As a result, the Funds may
periodically make reclassification among its capital accounts without
impacting the Funds net asset value.
FOREIGN CURRENCY TRANSLATION
The accounting records of the Funds are maintained in U.S. dollars.
Foreign currency amounts are translated into U.S. dollars on the following
basis: a) investment securities,
other assets and liabilities are converted to U.S. dollars based upon
current exchange rates; and b) purchase and sales of securities and income
and expenses are converted into U.S. dollars based upon the currency exchange
rates prevailing on the respective dates of such transactions.
Gains and losses attributable to foreign currency exchange rates are
recorded for financial statement purposes as net realized gains and losses on
investments. The portion of both realized and unrealized gains and losses on
investment that result from fluctuations in foreign currency exchange rates
is not separately stated.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
The Funds may purchase or sell forward foreign currency contracts in
order to hedge a portfolio position or specific transaction. Risks may arise
if the counter parties to a contract are unable to meet the terms of the
contract or if the value of the foreign currency moves unfavorably.
At June 30, 1997, the Funds had no open foreign currency exchange
contracts.
OTHER
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
the disclosure of contingent asset and liabilities at the date of the
financial statements and the reported amounts of the revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
3. TRANSACTIONS WITH AFFILIATES
The Funds have an investment advisory agreement with Manning & Napier
Advisors, Inc. (the "Advisor"), for which the Fund pays the Advisor a fee,
computed daily and payable monthly, at an annual rate based upon the
following percentages of average daily net assets: 0.50% for Bond Portfolio
and 1.00% for the Equity Portfolio, Small Cap Portfolio, Moderate Growth
Portfolio, Growth Portfolio, and the Maximum Horizon Portfolio. For the six
months ended June 30, 1997, the fees amounted to:$312 for the Bond Portfolio;
$723 for the Equity Portfolio; $708 for the Small Cap Portfolio; $647 for the
Moderate Growth Portfolio; $670 for the Growth Portfolio; and $698 for the
Maximum Horizon Portfolio.
Under the Funds Investment Advisory Agreement (the "Agreement"),
personnel of the Advisor provide the Funds with advice and assistance in the
choice of investments and the execution of securities transactions, and
otherwise maintain the Funds organization. The Advisor also provides the
Funds with necessary office space and portfolio accounting and bookkeeping
services. The salaries of all officers of the Funds and of all Directors who
are "affiliated persons" of the Funds or of the Advisor, and all personnel of
the Funds or of the Advisor performing services relating to research,
statistical and investment activities are paid by the Advisor.
The Advisor has voluntarily agreed to waive its fee and, if necessary pay
other expenses of the Funds in order to maintain total expenses for the
Equity Portfolio, Small Cap Portfolio, Moderate Growth Portfolio, Growth
Portfolio, and Maximum Horizon Portfolio at no more than 1.20%, and for the
Bond Portfolio at no more than 0.85% of average daily net assets each year.
Accordingly, the Advisor did not impose any of its fee and paid expenses
amounting to $10,281 for the Bond Portfolio, $9,792 for the Equity Portfolio,
$9,962 for the Small Cap Portfolio, $10,035 for the Moderate Growth
Portfolio, $10,007 for the Growth Portfolio, and $9,974 for the Maximum
Horizon Portfolio, for the six months ended June 30, 1997.
28
<PAGE>
Notes to Financial Statements (unaudited)
3. TRANSACTIONS WITH AFFILIATES (continued)
The Advisor also acts as the transfer, dividend paying and shareholder
servicing agent for the Funds. These services are provided at no additional
cost to the Fund.
Manning & Napier Investor Services, Inc., a registered broker-dealer
affiliate of the Advisor, acts as distributor for the Funds shares. The
services of Manning & Napier Investor Services, Inc. are provided at no
additional cost to the Funds.
The compensation of the non-affiliated Directors totaled $3,405 for each
Fund for the six months ended June 30, 1997.
4. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities, other than short-term securities, for
the six months ended June 30, 1997 were as follows:
<TABLE>
<CAPTION>
Purchases Sales
Fund Other Issuers Government Other Issuers Government
<S> <C> <C> <C> <C>
Bond Portfolio -- $ 9,957 -- --
Equity Portfolio $ 48,828 -- $ 39,109 --
Small Cap Portfolio $ 87,720 $ 70,119 $ 70,733 $ 54,970
Moderate Growth Portfolio $ 35,970 -- $ 6,266 $ 24,670
Growth Portfolio $ 46,895 $ 9,934 $ 20,253 $ 29,646
Maximum Horizon Portfolio $ 60,939 $ 9,847 $ 36,762 $ 34,360
</TABLE>
5. CAPITAL STOCK TRANSACTIONS
There were no shares sold or repurchased for the six months ended June
30, 1997.
Transactions in capital shares of Funds were as follows for the period
November 1, 1996 to December 31, 1996:
<TABLE>
<CAPTION>
Fund Shares Sold
Fund Shares Sold Amount
<S> <C> <C>
Bond Portfolio 12,667 $126,667
Equity Portfolio 12,907 $129,193
Small Cap Portfolio 12,913 $129,181
Moderate Growth Portfolio 12,667 $126,667
Growth Portfolio 12,667 $126,667
Maximum Horizon Portfolio 12,667 $126,667
</TABLE>
There were no shares repurchased during the period November 1, 1996 to
December 31, 1996.
6. FINANCIAL INSTRUMENTS
The Funds may trade in financial instruments with off-balance sheet risk
in the normal course of their investing activities to assist in managing
exposure to various market risks. These financial instruments include
written options, forward foreign currency exchange contracts, and futures
contracts and may involve, to a varying degree, elements of risk in excess of
the amounts recognized for financial statement purposes. No such investments
were held by the Funds on June 30, 1997.
7. FOREIGN SECURITIES
Investing in securities of foreign companies and foreign governments
involves special risks and considerations not typically associated with
investing in securities of domestic companies and the United States
government. There risks include revaluation of currencies and future adverse
political and economic developments. Moreover, securities of foreign
companies and foreign governments be less liquid and their prices more
volatile than those of securities of comparable domestic companies and the
United States government.
29
<PAGE>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
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<NAME> MANNING & NAPIER INSURANCE FUND, INC.
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<NAME> MANNING & NAPIER BOND PORTFOLIO
<NUMBER> 1
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<EXPENSES-NET> 530
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<AVERAGE-NET-ASSETS> 125990
<PER-SHARE-NAV-BEGIN> 9.94
<PER-SHARE-NII> 0.263
<PER-SHARE-GAIN-APPREC> (0.063)
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<AVERAGE-NET-ASSETS> 145502
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