Exeter Insurance Fund, Inc.
Small Cap Portfolio
Equity Portfolio
Bond Portfolio
Final Report
March 22, 2000
<PAGE>
Small Cap Portfolio Performance Update as of March 22, 2000
Small Cap Portfolio
Total Return
Through Growth of $10,000 Average
03/22/00 Investment Cumulative Annual
One Year $11,690 16.90% 16.90%
Inception 1 $12,340 23.40% 6.40%
Standard & Poor's (S&P) 500 Total Return Index 2
Total Return
Through Growth of $10,000 Average
03/22/00 Investment Cumulative Annual
One Year $11,715 17.15% 17.15%
Inception 1 $22,714 127.14% 27.46%
[graphic]
[line chart]
Data for line chart to follow:
<TABLE>
<CAPTION>
Date Small Cap Portfolio S&P 500 Total Return Index
<S> <C> <C>
11/01/96 10,000 10,000
12/31/96 10,720 10,542
12/31/97 12,138 14,057
12/31/98 10,781 18,076
12/31/99 11,708 21,879
03/22/00 12,340 22,714
</TABLE>
1 Performance numbers for the Portfolio and Indices are calculated from
November 1, 1996, the Portfolios' inception date. The Portfolios' performance
is historical and may not be indicative of future results.
2 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 Portfolio returns,
do not reflect any fees or expenses.
2
<PAGE>
Equity Portfolio Performance Update as of March 22, 2000
Equity Portfolio
Total Return
Through Growth of $10,000 Average
03/22/00 Investment Cumulative Annual
One Year $13,151 31.51% 31.51%
Inception 1 $18,537 85.37% 19.96%
Standard & Poor's (S&P) 500 Total Return Index 2
Total Return
Through Growth of $10,000 Average
03/22/00 Investment Cumulative Annual
One Year $11,715 17.15% 17.15%
Inception 1 $22,714 127.14% 27.46%
[graphic]
[line chart]
Data for line chart to follow:
<TABLE>
<CAPTION>
Date Equity Portfolio S&P 500 Total Return Index
<S> <C> <C>
11/01/96 10,000 10,000
12/31/96 10,560 10,542
12/31/97 12,826 14,057
12/31/98 13,299 18,076
12/31/99 19,052 21,879
03/22/00 18,537 22,714
</TABLE>
1 Performance numbers for the Portfolio and Indices are calculated from
November 1, 1996, the Portfolios' inception date. The Portfolios' performance
is historical and may not be indicative of future results.
2 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 Portfolio returns,
do not reflect any fees or expenses.
3
<PAGE>
Bond Portfolio Performance Update as of March 22, 2000
Bond Portfolio
Total Return
Through Growth of $10,000 Average
03/22/00 Investment Cumulative Annual
One Year $10,024 0.24% 0.24%
Inception 1 $11,775 17.75% 4.94%
Merrill Lynch Corporate/Government Bond Index 2
Total Return
Through Growth of $10,000 Average
03/22/00 Investment Cumulative Annual
One Year $10,147 1.47% 1.47%
Inception 1 $12,149 21.49% 5.72%
[graphic]
[line chart]
Data for line chart to follow:
<TABLE>
<CAPTION>
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
12/31/97 10,915 11,061
12/31/98 11,969 12,115
12/31/99 11,570 11,866
03/22/00 11,775 12,149
</TABLE>
1 Performance numbers for the Portfolio and Indices are calculated from
November 1, 1996, the Portfolios' inception date. The Portfolios' 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 6,731 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 Portfolio returns,
do not reflect any fees or expenses.
4
<PAGE>
Investment Portfolio - March 22, 2000
Small Cap, Equity and Bond Portfolios
Note: Shares of the Small Cap Portfolio, Equity Portfolio, and Bond Portfolio
were completely redeemed on March 22, 2000, therefore, there were no investments
held in the portfolio.
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF ASSETS & LIABILITIES
Small Cap Equity Bond
Portfolio Portfolio Portfolio
---------- ---------- ----------
MARCH 22, 2000 (DATE OF LIQUIDATION)
ASSETS:
<S> <C> <C> <C>
Cash . . . . . . . . . . . . . . . . $ 1,358 $ 2,556 $ 3,561
Dividends receivable . . . . . . . . 11 262 --
Receivable from investment advisor
(Note 3) . . . . . . . . . . . . . 10,313 8,386 5,500
---------- ---------- ----------
TOTAL ASSETS . . . . . . . . . . . . 11,682 11,204 9,061
---------- ---------- ----------
LIABILITIES:
Accrued Directors' fees (Note 3) . . 3,843 3,843 3,773
Audit fee payable. . . . . . . . . . 7,088 5,260 3,304
Custodian fee payable. . . . . . . . 520 589 125
Other payables and accrued expenses. 231 1,512 1,859
---------- ---------- ----------
TOTAL LIABILITIES. . . . . . . . . . 11,682 11,204 9,061
---------- ---------- ----------
NET ASSETS . . . . . . . . . . . . . $ 0 $ 0 $ 0
========== ========== ==========
NET ASSET VALUE PER SHARE. . . . . . $ 0 $ 0 $ 0
========== ========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
Small Cap Equity Bond
Portfolio Portfolio Portfolio
----------- ----------- -----------
FOR THE PERIOD JANUARY 1, 2000 TO
MARCH 22, 2000 (DATE OF LIQUIDATION)
INVESTMENT INCOME:
<S> <C> <C> <C>
Interest . . . . . . . . . . . . . . . . $ 433 $ 150 $ 1,689
Dividends. . . . . . . . . . . . . . . . 215 467 --
----------- ----------- -----------
Total Investment Income. . . . . . . . . 648 617 1,689
----------- ----------- -----------
EXPENSES:
Management fees (Note 3) . . . . . . . . 336 524 161
Directors' fees (Note 3) . . . . . . . . 2,241 2,241 2,171
Audit fee. . . . . . . . . . . . . . . . 7,175 5,350 3,391
Custodian fee. . . . . . . . . . . . . . 1,023 806 --
Miscellaneous. . . . . . . . . . . . . . 282 282 213
----------- ----------- -----------
Total Expenses . . . . . . . . . . . . . 11,057 9,203 5,936
Less Reduction of Expenses (Note 3). . . (10,649) (8,568) (5,661)
----------- ----------- -----------
Net Expenses . . . . . . . . . . . . . . 408 635 275
----------- ----------- -----------
NET INVESTMENT INCOME (LOSS) . . . . . . 240 (18) 1,414
----------- ----------- -----------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments. (2,890) 27,103 (1,566)
Net change in unrealized appreciation
(depreciation) on investments . . . . 10,742 (33,534) 2,690
----------- ----------- -----------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS. . . . . . 7,852 (6,431) 1,124
----------- ----------- -----------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS . . . . . . . . . . . . . . . $ 8,092 $ (6,449) $ 2,538
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
SMALL CAP PORTFOLIO EQUITY PORTFOLIO BOND PORTFOLIO
--------------------- ------------------ ----------------
FOR THE FOR THE FOR THE FOR THE FOR THE
PERIOD YEAR PERIOD YEAR PERIOD
1/1/00 TO ENDED 1/1/00 TO ENDED 1/1/00 TO
3/22/00* 12/31/99 3/22/00* 12/31/99 3/22/00*
--------------------- ------------------ ---------------- ----------- ----------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
<S> <C> <C> <C> <C> <C>
Net investment income (loss) . . . . . . $ 240 $ 1,501 ($18) $ 1,183 $ 1,414
Net realized gain (loss) on investments. (2,890) 28 27,103 30,489 (1,566)
Net change in unrealized appreciation
(depreciation) on investments . . . . 10,742 10,468 (33,534) 42,489 2,690
--------------------- ------------------ ---------------- ----------- ----------
Net increase (decrease)
From operations . . . . . . . . . . . 8,092 11,997 (6,449) 74,161 2,538
--------------------- ------------------ ---------------- ----------- ----------
DISTRIBUTIONS TO
SHAREHOLDERS (NOTE 2) :
From net investment income . . . . . . . (1,690) (537) (12,633) (3,732) (9,070)
From net realized gains on
investments. . . . . . . . . . . . . (30) (1,570) (39,331) (43,084) --
--------------------- ------------------ ---------------- ----------- ----------
Total distributions to shareholders. . . (1,720) (2,107) (51,964) (46,816) (9,070)
--------------------- ------------------ ---------------- ----------- ----------
CAPITAL STOCK ISSUED AND
REPURCHASED:
Net increase from capital share
transactions (Note 6) . . . . . . . . (157,566) 2,107 (187,442) 46,816 (140,080)
--------------------- ------------------ ---------------- ----------- ----------
Net increase (decrease) in net assets. . (151,194) 11,997 (245,855) 74,161 (146,612)
--------------------- ------------------ ---------------- ----------- ----------
NET ASSETS:
Beginning of period. . . . . . . . . . . 151,194 139,197 245,855 171,694 146,612
--------------------- ------------------ ---------------- ----------- ----------
END OF PERIOD. . . . . . . . . . . . . . $ 0 $ 151,194 $ 0 $ 245,855 $ 0
===================== ================== ================ =========== ==========
Including undistributed net investment
income of . . . . . . . . . . . . . . $ 0 $ 1,499 $ 0 $ (934) $ 0
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE
YEAR
ENDED
12/31/99
----------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
<S> <C>
Net investment income (loss) . . . . . . $ 7,607
Net realized gain (loss) on investments. --
Net change in unrealized appreciation
(depreciation) on investments . . . . (12,578)
----------
Net increase (decrease)
From operations . . . . . . . . . . . (4,971)
----------
DISTRIBUTIONS TO
SHAREHOLDERS (NOTE 2) :
From net investment income . . . . . . . (7,373)
From net realized gains on
investments. . . . . . . . . . . . . (15)
----------
Total distributions to shareholders. . . (7,388)
----------
CAPITAL STOCK ISSUED AND
REPURCHASED:
Net increase from capital share
transactions (Note 6) . . . . . . . . 7,388
----------
Net increase (decrease) in net assets. . (4,971)
----------
NET ASSETS:
Beginning of period. . . . . . . . . . . 151,583
----------
END OF PERIOD. . . . . . . . . . . . . . $ 146,612
==========
Including undistributed net investment
income of . . . . . . . . . . . . . . $ 7,605
</TABLE>
* Date of liquidation.
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
SMALL CAP PORTFOLIO
FOR THE FOR THE FOR THE FOR THE FOR THE
PERIOD YEAR YEAR YEAR PERIOD
1/1/00 TO ENDED ENDED ENDED 11/1/96 1 TO
3/22/00+ 12/31/99 12/31/98 12/31/97 12/31/96
--------------------- ---------- ---------- -------------- ----------
PER SHARE DATA (FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD):
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE - BEGINNING OF PERIOD . $ 8.96 $ 8.37 $ 12.13 $ 10.72 $ 10.00
--------------------- ---------- ---------- -------------- ----------
Income from investment operations:
Net investment income (loss)*. . . . . . 0.01 0.09 0.03 (0.03) 0.01
Net realized and unrealized gain (loss)
on investments. . . . . . . . . . . . 0.47 0.63 (1.67) 1.45 0.71
--------------------- ---------- ---------- -------------- ----------
Total from investment operations . . . . 0.48 0.72 (1.64) 1.42 0.72
--------------------- ---------- ---------- -------------- ----------
Less distributions to shareholders:
From net investment income . . . . . . . (0.10) (0.03) -- (0.01) --
From net realized gain on investments. . -- (0.10) (2.12) -- --
Redemption of capital. . . . . . . . . . (9.34) -- -- -- --
--------------------- ---------- ---------- -------------- ----------
Total distributions to shareholders. . . (9.44) (0.13) (2.12) (0.01) --
--------------------- ---------- ---------- -------------- ----------
NET ASSET VALUE - END OF PERIOD. . . . . $ 0 $ 8.96 $ 8.37 $ 12.13 $ 10.72
===================== ========== ========== ============== ==========
Total return 2 . . . . . . . . . . . . . 5.40% 8.60% (11.18)% 13.23% 7.20%
Ratios of expenses (to average net
assets) / Supplemental Data:
Expenses * . . . . . . . . . . . . . 1.20%3 1.20% 1.20% 1.20% 1.20%3
Net investment income (loss)*. . . . 0.70%3 1.06% 0.33% (0.23%) 0.55%3
Portfolio turnover . . . . . . . . . . . 27% 75% 155% 72% 9%
NET ASSETS - END OF PERIOD . . . . . . . $ 0 $ 151,195 $ 139,197 $ 156,798 $ 138,374
===================== ========== ========== ============== ==========
</TABLE>
* The investment advisor did not impose its management fee and paid a portion of
the Portfolio's expenses. If these expenses had been incurred by the Portfolio,
and had 1996 expenses been limited by state securities law, the net investment
income per share and the ratios would have been as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Net investment income (loss) . . $ (0.43) $ (0.83) $ (0.71) $ (1.36) $ (0.01)
Ratios (to average net assets):
Expenses. . . . . . . . . . . 32.10%3 12.12% 9.04% 12.53% 2.50%3
Net investment income (loss). (30.20%)3 (9.86)% (7.51)% (11.56%) (0.75%)3
</TABLE>
1 Commencement of operations.
2 Represents aggregate total return for the period indicated.
3 Annualized.
4 The amount shown for a share outstanding does not correspond with the
aggregate net gain on investments for the period due to the timing of sales and
repurchase of fund shares in relation to fluctuating market values of the
investments of the fund.
+ Date of liquidation.
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS - continued
EQUITY PORTFOLIO
FOR THE FOR THE FOR THE FOR THE FOR THE
PERIOD YEAR YEAR YEAR PERIOD
1/1/00 TO ENDED ENDED ENDED 11/1/96 1 TO
3/22/00+ 12/31/99 12/31/98 12/31/97 12/31/96
------------------ ------------------ ---------- -------------- ----------
PER SHARE DATA (FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD):
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE - BEGINNING OF PERIOD . $ 13.84 $ 12.19 $ 12.78 $ 10.56 $ 10.00
------------------ ------------------ ---------- -------------- ----------
Income from investment operations:
Net investment income* . . . . . . . . . -- 0.10 0.12 0.05 0.05
Net realized and unrealized gain (loss)
on investments. . . . . . . . . . . . (0.38) 4.88 0.13 2.22 0.51
------------------ ------------------ ---------- -------------- ----------
Total from investment operations . . . . (0.38) 4.98 0.25 2.27 0.56
------------------ ------------------ ---------- -------------- ----------
Less distributions to shareholders:
From net investment income . . . . . . . (0.72) (0.27) (0.05) (0.05) --
From net realized gain on investments. . (2.25) (3.06) (0.79) -- --
Redemption of capital. . . . . . . . . . (10.49) -- -- -- --
------------------ ------------------ ---------- -------------- ----------
Total distribution to shareholders . . . (13.46) (3.33) (0.84) (0.05) --
------------------ ------------------ ---------- -------------- ----------
NET ASSET VALUE - END OF PERIOD. . . . . $ 0 $ 13.84 $ 12.19 $ 12.78 $ 10.56
================== ================== ========== ============== ==========
Total return2. . . . . . . . . . . . . . (2.70)% 43.26% 3.69% 21.46% 5.60%
Ratios of expenses (to average net
assets) / Supplemental Data:
Expenses * . . . . . . . . . . . . . 1.20%3 1.20% 1.20% 1.20% 1.20%3
Net investment income *. . . . . . . (0.03)%3 0.57% 0.98% 0.41% 2.84%3
Portfolio turnover . . . . . . . . . . . 30% 96% 68% 50% 29%
NET ASSETS - END OF PERIOD . . . . . . . $ 0 $ 245,855 $ 171,694 $ 165,489 $ 136,267
================== ================== ========== ============== ==========
</TABLE>
* The investment advisor did not impose its management fee and paid a portion of
the Portfolio's expenses. If these expenses had been incurred by the Portfolio,
and had 1996 expenses been limited by state securities law, the net investment
income per share and the ratios would have been as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Net investment income (loss) . . $ (1.92) $ (1.11) $ (0.74) $ (1.27) $ 0.03
Ratios (to average net assets):
Expenses. . . . . . . . . . . 17.15% 8.21% 8.46 % 12.44% 2.50%3
Net investment income (loss). (15.98)% (6.44)% (6.28 )% (10.83)% 1.54%3
</TABLE>
1 Commencement of operations.
2 Represents aggregate total return for the period indicated.
3 Annualized.
+ Date of liquidation.
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS - continued
BOND PORTFOLIO
FOR THE FOR THE FOR THE FOR THE FOR THE
PERIOD YEAR YEAR YEAR PERIOD
1/1/00 TO ENDED ENDED ENDED 11/1/96 1 TO
3/22/00+ 12/31/99 12/31/98 12/31/97 12/31/96
---------------- ---------- ---------- -------------- ----------
PER SHARE DATA (FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD):
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE - BEGINNING OF PERIOD . $ 10.42 $ 11.35 $ 10.85 $ 9.94 $ 10.00
---------------- ---------- ---------- -------------- ----------
Income from investment operations:
Net investment income* . . . . . . . . . 0.10 0.54 0.55 0.54 0.06
Net realized and unrealized gain (loss)
on investments. . . . . . . . . . . . 0.09 (0.92) 0.49 0.43 (0.12)
---------------- ---------- ---------- -------------- ----------
Total from investment operations . . . . 0.19 (0.38) 1.04 0.97 (0.06)
---------------- ---------- ---------- -------------- ----------
Less distributions to shareholders:
From net investment income . . . . . . . (0.65) (0.55) (0.54) (0.06) --
From net realized gain on investments. . -- (0.00) -- -- --
Redemption of capital. . . . . . . . . . (9.96) -- -- -- --
---------------- ---------- ---------- -------------- ----------
Total distribution to shareholders . . . (10.61) (0.55) (0.54) (0.06) --
---------------- ---------- ---------- -------------- ----------
NET ASSET VALUE - END OF PERIOD. . . . . $ 0 $ 10.42 $ 11.35 $ 10.85 $ 9.94
================ ========== ========== ============== ==========
Total return2. . . . . . . . . . . . . . 1.78% (3.34)% 9.65% 9.81% (0.60)%
Ratios of expenses (to average net
assets) / Supplemental Data:
Expenses * . . . . . . . . . . . . . 0.85%3 0.85% 0.85% 0.85% 0.85%3
Net investment income *. . . . . . . 4.28%3 5.13% 5.09% 5.29% 3.92%3
Portfolio turnover . . . . . . . . . . . 0% 10% 11% 0% 0%
NET ASSETS - END OF PERIOD . . . . . . . $ 0 $ 146,612 $ 151,583 $ 138,242 $ 125,875
================ ========== ========== ============== ==========
</TABLE>
* The investment advisor did not impose its management fee and paid a portion of
the Portfolio's expenses. If these expenses had been incurred by the Portfolio,
and had 1996 expenses been limited by state securities law, the net investment
income per share and the ratios would have been as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Net investment income (loss) . . $ (0.30) $ (0.42) $ (0.33) $ (0.83) $ 0.04
Ratios (to average net assets):
Expenses. . . . . . . . . . . 17.96%3 9.99% 9.01% 14.27% 2.50%3
Net investment income (loss). (12.83)%3 (4.01)% (3.07)% (8.13)% 2.27%3
</TABLE>
1 Commencement of operations.
2 Represents aggregate total return for the period indicated.
3 Annualized.
+ Date of liquidation.
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
Notes to Financial Statements
1. ORGANIZATION
Small Cap Portfolio ("Small Cap Portfolio"), Equity Portfolio ("Equity
Portfolio"), and Bond Portfolio ("Bond Portfolio") are no-load diversified
portfolios (collectively the "Portfolios") of Exeter Insurance Fund, Inc. (the
"Fund"). The Fund 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.
The total authorized capital stock of the Fund consists of 300 million shares of
common stock each having a par value of $0.01. As of March 22, 2000, 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 provided by the Fund's pricing
service.
Debt securities, including government bonds and mortgage backed securities, will
normally be valued on the basis of evaluated bid prices provided by the Fund's
pricing service.
Securities for which representative valuations or 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 days or less are valued at amortized
cost, which approximated market value.
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 Fund can be attributed to a specific portfolio. Expenses
which cannot be directly attributed are apportioned among the portfolios in the
Fund.
FEDERAL INCOME TAXES
The Portfolios' policy is to comply with the provisions of the Internal Revenue
Code applicable to regulated investment companies. The Portfolios are not
subject to federal income tax to the extent that the Portfolios 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 Portfolios use the identified cost method for determining realized gains or
losses on investments for both financial statement and federal income tax
reporting purposes.
DISTRIBUTIONS OF INCOME AND GAINS
Distributions to shareholders of net investment income are made annually.
Distributions of net realized gains, if any, are distributed annually. An
additional distribution may be necessary to avoid taxation of the Portfolios.
Distributions are recorded on the ex-dividend date.
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
12
<PAGE>
Notes to Financial Statements
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
DISTRIBUTIONS OF INCOME AND GAINS (continued)
result, the Portfolios may periodically make reclassifications among their
capital accounts without impacting the Portfolios' net asset value. Any such
reclassifications are note reflected in the financial highlights.
FOREIGN CURRENCY TRANSLATION
The accounting records of the Portfolios 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) purchases 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 on foreign currency and other assets and liabilties
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 investments that result from
fluctuations in foreign currency exchange rates is not separately stated from
gain/loss on investments.
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 Fund has an investment advisory agreement with Manning & Napier Advisors,
Inc. (the "Advisor"), for which each Portfolio pays the Advisor a fee, computed
daily and payable monthly, at an annual rate based upon the following
percentages of average daily net assets: 1.00% for the Small Cap Portfolio and
the Equity Portfolio and 0.50% for the Bond Portfolio.
Under the Fund's Investment Advisory Agreement (the "Agreement"), personnel of
the Advisor provide the Portfolios with advice and assistance in the choice of
investments and the execution of securities transactions, and otherwise maintain
the Portfolios' 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 Portfolios in order to maintain total expenses for the Small Cap
Portfolio, and the Equity 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 $10,313 for the Small Cap Portfolio, $8,044 for the Equity
Portfolio, and $5,500 for the Bond Portfolio for the period ended March 22,
2000.
The Advisor also acts as the transfer, dividend paying and shareholder servicing
agent for the Fund. These services are provided at no additional cost to the
Portfolios.
Manning & Napier Investor Services, Inc., a registered broker-dealer affiliate
of the Advisor, acts as distributor for the Fund's shares. The services of
Manning & Napier Investor Services, Inc. are provided at no additional cost to
the Portfolios.
13
<PAGE>
Notes to Financial Statements
4. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities, other than short-term securities, for the
period ended March 22, 2000 were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
-------------- ----------
PORTFOLIOS OTHER ISSUERS GOVERNMENT OTHER ISSUERS GOVERNMENT
------------------- -------------- ---------- -------------- -----------
<S> <C> <C> <C> <C>
Small Cap Portfolio $ 23,923 -- $ 145,818 --
Equity Portfolio. . 51,333 -- 285,736 --
Bond Portfolio. . . -- -- -- $ 147,091
</TABLE>
5. CAPITAL STOCK TRANSACTIONS
Transactions in capital shares of Portfolios were as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD FOR THE YEAR
1/1/00 TO 3/22/00 ENDED 12/31/99
PORTFOLIOS SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
Small Cap Portfolio
Reinvested 184 $ 1,720 241 $ 2,107
Repurchased (17,057) (159,286) -- --
-------- ---------- ----- -------
Net Change (16,873) $(157,566) 241 $ 2,107
======== ========== ===== =======
Equity Portfolio
Reinvested 4,954 $ 51,965 3,686 $46,816
Repurchased (22,722) (239,407) -- --
-------- ---------- ----- -------
Net Change (17,768) $(187,442) 3,686 $46,816
======== ========== ===== =======
Bond Portfolio
Reinvested 911 $ 9,070 707 $ 7,388
Repurchased (14,975) (149,150) -- --
-------- ---------- ----- -------
Net Change (14,064) $(140,080) 707 $ 7,388
======== ========== ===== =======
</TABLE>
6. 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. These risks
include revaluation of currencies and future adverse political and economic
developments. Moreover, securities of foreign companies and foreign governments
and their markets may be less liquid and their prices more volatile than
securities of comparable domestic companies and the United States Government.
7. FINANCIAL INSTRUMENTS
The Portfolios 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 Portfolios on March 22, 2000.
8. FUND LIQUIDATION
Effective February 2, 2000, the Board of Directors approved the liquidation of
the Series. On March 22, 2000, the Series repurchased all shares held based
upon the Series' net asset value on that date. Cash was left in the Series to
satisfy liabilities outstanding as of the date of complete liquidation. The
ratios presented in the financial highlights table may not be representative of
an actively traded fund.
14
<PAGE>
Report of Independent Accountants
To the Board of Directors of Exeter Insurance Fund, Inc.:
In our opinion, the accompanying statements of assets and liabilities, including
the portfolios of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the three portfolios (identified in
Note 1) of the Exeter Insurance Fund, Inc., at March 22, 2000 and the results of
each of their operations, the changes in each of their net assets, and the
financial highlights for the periods indicated, in conformity with accounting
principles generally accepted in the United States. These financial statements
and financial highlights (hereafter referred to as "financial statements") are
the responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion expressed
above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
June 9, 2000
<PAGE>
<PAGE>
Exeter Insurance Fund, Inc.
Moderate Growth Portfolio
Growth Portfolio
Maximum Horizon Portfolio
Semi-Annual Report
June 30, 2000
<PAGE>
Management Discussion and Analysis - June 30, 2000 (unaudited)
DEAR CONTRACT OWNERS:
We have had a good first half of 2000, but we want to put those short-term
investment results in the proper perspective. What is important is not this
six-month period in isolation, or even the fact that it builds upon a strong
year last year. What matters most is that we are showing the form that has
distinguished us historically: the tougher the investment environment, the
better we look. With that said, let's review this year's performance in more
detail.
During the first quarter, long bond prices moved higher as investors fled from
volatile tech stocks. A flight to quality, along with the announcement of a
government buy-back program for long bonds, moved long yields lower even as the
Federal Reserve raised short rates. The trend of declining long-term interest
rates continued during the second quarter, as a string of economic releases
indicated that growth may be moderating and possibly even slowing. When these
releases were viewed together with releases for May showing that inflation was
subdued, it appeared that growth has slowed, and the risk of inflation was low.
This outlook has favored bonds, which have turned in solid returns so far this
year.
Stocks in general have moved mostly sideways for the year so far. The NASDAQ,
which includes many technology companies, was especially volatile. Technology
stock performance is still the key story in the media. The recent acute
volatility in the tech industry argues in favor of our position of steering
clear of overvalued tech stocks. We select the equities in these portfolios to
specifically avoid excess valuations. Every investor may have to endure some
market volatility, but investing in a clearly overvalued sector is foolish.
Looking forward, we see a stock market that could be in for an extended rough
phase, given the level of valuations and the length of the preceding run-up.
Similarly, given that value and growth investment styles tend to take turns
cycling in and out of favor, history suggests that value is due for a sustained
run. Although we are not true value managers, our approach places a great deal
of emphasis on stock valuations.
So what does all this mean for investors in our variable annuity? For investors
in the Moderate Growth and Growth Portfolios, we have been able to avoid the
recent intense periods of market ups and downs and have still fared well. These
portfolios have also benefited from the biggest moneymaker in the markets this
year to date - the rally in bonds. The Maximum Horizon Portfolio is more
volatile than the others and contains a much smaller bond position due to its
more aggressive investment objective, but it still had solid returns for the
first half of the year. And, in an environment in which the dangers of
momentum investing are becoming increasingly clear, we have given all three
portfolios a sound basis in value.
Finally, we want to inform you of a couple changes in the variable annuity.
First, we changed the name of the variable annuity and its underlying fund
earlier this year, so they are now under the Exeter name, matching our mutual
fund. Second, we have reduced the menu of investment options by removing the
portfolios dedicated to specific asset classes. We have found over the years
that most investors have chosen an objectives-based strategy using a mix of
stocks and bonds, and therefore we are now focusing our resources on the three
objectives-based portfolios.
Sincerely,
EXETER ASSET MANAGEMENT
2
<PAGE>
Performance Update as of June 30, 2000 (unaudited)
Moderate Growth Portfolio
Total Return
Through Growth of $10,000 Average
06/30/00 Investment Cumulative Annual
One Year $10,362 3.62% 3.62%
Inception 1 $13,269 32.69% 8.02%
Lehman Brothers Intermediate Bond Index 2
Total Return
Through Growth of $10,000 Average
06/30/00 Investment Cumulative Annual
One Year $10,423 4.23% 4.23%
Inception 1 $12,202 22.02% 5.58%
30-70 Blended Index 3
Total Return
Through Growth of $10,000 Average
06/30/00 Investment Cumulative Annual
One Year $10,536 5.36% 5.36%
Inception 1 $14,681 46.81% 11.04%
[graphic]
[line chart]
Data for line chart to follow:
<TABLE>
<CAPTION>
Lehman Brothers
Date Moderate Growth Portfolio Intermediate Bond index 30-70 Blended Index
<S> <C> <C> <C>
11/01/96 10,000 10,000 10,000
12/31/96 10,110 10,067 10,211
12/31/97 11,397 10,859 11,764
12/31/98 12,109 11,775 13,501
12/31/99 12,601 11,821 14,360
06/30/00 13,269 12,202 14,681
</TABLE>
[graphic]
[pie chart]
Portfolio Composition - Moderate Growth Portfolio - As of 6/30/00
Stocks - 33.33%
Bonds - 61.60%
Cash, short-term investments, and other assets, less liabilities - 5.07%
1 Performance numbers for the Portfolio and Indices are calculated from
November 1, 1996, the Portfolios' inception date. The Portfolios' performance
is historical and may not be indicative of future results.
2 The Lehman Brothers Intermediate Bond Index is a market value weighted
measure of approximately 3,340 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 Portfolio returns, do not reflect any fees or expenses.
3 The 30-70 Blended Index is 30% S&P 500 Total Return Index and 70% Lehman
Brothers Intermediate Bond Index (see note 2 above). 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 Portfolio returns, do not reflect any fees or
expenses.
3
<PAGE>
Performance Update as of June 30, 2000 (unaudited)
Growth Portfolio
Total Return
Through Growth of $10,000 Average
06/30/00 Investment Cumulative Annual
One Year $10,809 8.09% 8.09%
Inception 1 $15,035 50.35% 11.77%
Lehman Brothers Intermediate Bond Index 2
Total Return
Through Growth of $10,000 Average
06/30/00 Investment Cumulative Annual
One Year $10,423 4.23% 4.23%
Inception 1 $12,202 22.02% 5.58%
50-50 Blended Index 3
Total Return
Through Growth of $10,000 Average
06/30/00 Investment Cumulative Annual
One Year $10,618 6.18% 6.18%
Inception 1 $16,642 66.42% 14.91%
[graphic]
[line chart]
Data for line chart to follow:
<TABLE>
<CAPTION>
Lehman Brothers
Date Growth Portfolio Intermediate Bond Index 50-50 Blended Index
<S> <C> <C> <C>
11/01/96 10,000 10,000 10,000
12/31/96 10,250 10,067 10,311
12/31/97 12,221 10,859 12,495
12/31/98 12,474 10,844 14,874
12/31/99 14,062 11,821 16,332
06/30/00 15,035 12,202 16,642
</TABLE>
[graphic]
[pie chart]
Portfolio Composition - Growth Portfolio - As of 6/30/00
Stocks - 41.93%
Bonds - 50.66%
Cash, short-term investments, and other assets, less liabilities - 7.41%
1 Performance numbers for the Portfolio and Indices are calculated from
November 1, 1996, the Portfolios' inception date. The Portfolios' performance
is historical and may not be indicative of future results.
2 The Lehman Brothers Intermediate Bond Index is a market value weighted
measure of approximately 3,340 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 Portfolio returns, do not reflect any fees or expenses.
3 The 50-50 Blended Index is 50% S&P 500 Total Return Index and 50% Lehman
Brothers Aggregate Bond Index. 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 Lehman Brothers Aggregate Bond Index is a market
value weighted measure of approximately 5,630 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 Series returns, do not reflect any fees or
expenses.
4
<PAGE>
Performance Update as of June 30, 2000 (unaudited)
Maximum Horizon Portfolio
Total Return
Through Growth of $10,000 Average
06/30/00 Investment Cumulative Annual
One Year $11,412 14.12% 14.12%
Inception 1 $19,091 90.91% 19.29%
Standard & Poor's (S&P) 500 Total Return Index 2
Total Return
Through Growth of $10,000 Average
06/30/00 Investment Cumulative Annual
One Year $10,724 7.24% 7.24%
Inception 1 $21,785 117.85% 23.74%
[graphic]
[line chart]
Data for line chart to follow:
<TABLE>
<CAPTION>
Maximum Horizon Standard & Poor's
Date Portfolio 500 Total Return Index
<S> <C> <C>
11/01/96 10,000 10,000
12/31/96 10,440 10,542
12/31/97 12,913 14,057
12/31/98 13,418 18,076
12/31/99 18,017 21,879
06/30/00 19,091 21,785
</TABLE>
[graphic]
[pie chart]
Portfolio Composition- Maximum Horizon Portfolio - As of 6/30/00
Stocks - 78.36%
Bonds - 18.42%
Cash, short-term investments, and other assets, less liabilities - 3.22%
1 Performance numbers for the Portfolio and Indices are calculated from
November 1, 1996, the Portfolios' inception date. The Portfolios' performance
is historical and may not be indicative of future results.
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 Portfolio returns,
do not reflect any fees or expenses.
5
<PAGE>
Investment Portfolio - June 30, 2000 (unaudited)
<TABLE>
<CAPTION>
VALUE
MODERATE GROWTH PORTFOLIO SHARES (NOTE 2)
--------------------------------------------------- ------ ---------
COMMON STOCK - 33.33%
<S> <C> <C>
APPAREL - 1.41%
Adidas-Salomon AG (Germany) (Note 7). . . . . . . . 75 $ 4,155
---------
BUSINESS SERVICES - 0.78%
National Data Corp. . . . . . . . . . . . . . . . . 100 2,300
---------
CHEMICAL & ALLIED PRODUCTS - 3.67%
Eastman Chemical Co . . . . . . . . . . . . . . . . 150 7,163
Sigma-Aldrich Corp. . . . . . . . . . . . . . . . . 125 3,656
---------
10,819
---------
COMPUTER INTEGRATED SYSTEMS DESIGN - 1.12%
Parametric Technology . . . . . . . . . . . . . . . 300 3,300
---------
CRUDE PETROLEUM & NATURAL GAS - 5.45%
Gulf Canada Resources Ltd. - ADR * (Note7). . . . . 1,500 7,219
Halliburton Co. . . . . . . . . . . . . . . . . . . 75 3,539
Petroleo Brasileiro S.A. (Petrobras) - ADR (Note 7) 175 5,287
---------
16,045
---------
ELECTRIC, GAS AND SANITARY SERVICES - 2.75%
Cinergy Corp. . . . . . . . . . . . . . . . . . . . 50 1,272
Conectiv, Inc.. . . . . . . . . . . . . . . . . . . 100 1,556
FirstEnergy Corp. . . . . . . . . . . . . . . . . . 75 1,753
PPL Corp. . . . . . . . . . . . . . . . . . . . . . 75 1,645
Potomac Electric Power Co.. . . . . . . . . . . . . 75 1,875
---------
8,101
---------
ELECTRONICS & ELECTRICAL EQUIPMENT - 0.50%
Raytheon Co.- Class A . . . . . . . . . . . . . . . 75 1,458
---------
FABRICATED METAL PRODUCTS - 0.84%
Lockheed Martin Corp. . . . . . . . . . . . . . . . 100 2,481
---------
FOOD & KINDRED PRODUCTS - 5.50%
Diageo plc - ADR (Note 7) . . . . . . . . . . . . . 100 3,557
H.J. Heinz Co.. . . . . . . . . . . . . . . . . . . 175 7,656
Unilever plc - ADR (Note 7) . . . . . . . . . . . . 199 5,000
---------
16,213
---------
INDUSTRIAL & COMMERCIAL MACHINERY - 3.37%
Baker Hughes, Inc.. . . . . . . . . . . . . . . . . 150 4,800
Compaq Computer Corp. . . . . . . . . . . . . . . . 200 5,113
---------
9,913
---------
INVESTORS - 0.89%
Reed International plc - ADR (Note 7) . . . . . . . 75 2,625
---------
PRIMARY METAL INDUSTRY - 0.63%
Phelps Dodge Corp.. . . . . . . . . . . . . . . . . 50 1,859
---------
TECHNICAL INSTRUMENTS & SUPPLIES - 2.02%
Eastman Kodak Co. . . . . . . . . . . . . . . . . . 100 5,950
---------
TELECOMMUNICATION SERVICES - 0.83%
Telecomunicacoes Brasileiras S.A. (Telebras) -
ADR PFD (Note 7). . . . . . . . . . . . . . . . . 25 2,450
---------
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
Investment Portfolio - June 30, 2000 (unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT/ VALUE
MODERATE GROWTH PORTFOLIO (continued) SHARES (NOTE 2)
--------------------------------------------------- ---------- ---------
<S> <C> <C>
TRANSPORTATION - 3.57%
EQUIPMENT - 0.56%
Northrup Grumman Corp. . . . . . . . . . . . . . 25 $ 1,656
---------
RAILROAD - 3.01%
Burlington Northern Santa Fe Corp. . . . . . . . 100 2,294
Canadian National Railway Co. - ADR (Note 7) . . 225 6,567
---------
8,861
---------
10,517
---------
TOTAL COMMON STOCK
(Identified Cost $94,393) . . . . . . . . . . . . . 98,186
---------
U.S. TREASURY SECURITIES - 34.00%
U.S. TREASURY BONDS - 5.91%
U.S. Treasury Bond, 6.875%, 8/15/2025
(Identified Cost $16,716) . . . . . . . . . . . . $ 16,000 17,395
---------
U.S. TREASURY NOTES - 28.09%
U.S. Treasury Note, 5.875%, 9/30/2002 . . . . . . . 5,000 4,942
U.S. Treasury Note, 5.500%, 3/31/2003 . . . . . . . 44,000 43,010
U.S. Treasury Note, 6.000%, 8/15/2004 . . . . . . . 30,000 29,719
U.S. Treasury Note, 6.500%, 10/15/2006. . . . . . . 5,000 5,056
---------
TOTAL U.S. TREASURY NOTES
(Identified Cost $83,652) . . . . . . . . . . . 82,727
---------
TOTAL U.S. TREASURY SECURITIES
(Identified Cost $100,368). . . . . . . . . . . . . 100,122
---------
U.S. GOVERNMENT AGENCIES - 27.60%
Federal Home Loan Bank Note, 6.75%,
5/01/2002 . . . . . . . . . . . . . . . . . . . . 20,000 19,945
Federal Home Loan Mortgage Corporation Note, 5.50%
5/15/2002 . . . . . . . . . . . . . . . . . . . . 30,000 29,270
Federal National Mortgage Association Note, 5.75%,
4/15/2003 . . . . . . . . . . . . . . . . . . . . 10,000 9,690
Federal National Mortgage Association Bond, 6.25%,
5/15/2029 25,000 22,382
---------
TOTAL U.S. GOVERNMENT AGENCIES
(Identified Cost $82,403) . . . . . . . . . . . . . 81,287
---------
SHORT-TERM INVESTMENTS - 2.36%
Dreyfus Treasury Cash Management Fund
(Identified Cost $6,961). . . . . . . . . . . . 6,961 6,961
---------
TOTAL INVESTMENTS - 97.29%
(Identified Cost $284,125). . . . . . . . . . . . . 286,556
LIABILITIES, LESS OTHER ASSETS - 2.71%. . . . . . . 7,978
---------
NET ASSETS - 100% . . . . . . . . . . . . . . . . . $ 294,534
==========
</TABLE>
*Non-income producing security
FEDERAL TAX INFORMATION:
At June 30, 2000, the net unrealized appreciation based on identified cost for
Federal income tax purposes of $284,125 was as follows:
Unrealized appreciation $12,869
Unrealized depreciation (10,438)
--------
UNREALIZED APPRECIATION - NET $ 2,431
=======
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
Investment Portfolio - June 30, 2000 (unaudited)
<TABLE>
<CAPTION>
VALUE
GROWTH PORTFOLIO SHARES (NOTE 2)
----------------------------------------------- ------ ---------
COMMON STOCK - 41.93%
<S> <C> <C>
APPAREL - 1.78%
Adidas-Salomon AG (Germany) (Note 7). . . . . . 300 $ 16,622
---------
CHEMICAL & ALLIED PRODUCTS - 5.33%
Eastman Chemical Co.. . . . . . . . . . . . . . 675 32,231
Sigma-Aldrich Corp. . . . . . . . . . . . . . . 600 17,550
---------
49,781
---------
COMPUTER INTEGRATED SYSTEMS DESIGN - 2.71%
Parametric Technology Corp. . . . . . . . . . . 2,300 25,300
---------
CRUDE PETROLEUM & NATURAL GAS - 6.89%
Gulf Canada Resources Ltd. - ADR* (Note 7). . . 4,775 22,980
Halliburton Co. . . . . . . . . . . . . . . . . 350 16,516
Petroleo Brasileiro S.A. (Petrobras) -
ADR (Note 7) . . . . . . . . . . . . . . . . 825 24,924
---------
64,420
---------
ELECTRIC, GAS, AND SANITARY SERVICES - 2.44%
Cinergy Corp. . . . . . . . . . . . . . . . . . 175 4,451
Conectiv, Inc.. . . . . . . . . . . . . . . . . 275 4,280
FirstEnergy Corp. . . . . . . . . . . . . . . . 200 4,675
PPL Corp. . . . . . . . . . . . . . . . . . . . 200 4,387
Potomac Electric Power Co.. . . . . . . . . . . 200 5,000
---------
22,793
---------
ELECTRONICS & ELECTRICAL EQUIPMENT - 0.62%
Raytheon Co. - Class A. . . . . . . . . . . . . 300 5,831
---------
FABRICATED METAL INDUSTRIES - 1.00%
Lockheed Martin Corp. . . . . . . . . . . . . . 375 9,305
---------
FOOD & KINDRED PRODUCTS - 6.65%
Diageo plc - ADR (Note 7) . . . . . . . . . . . 400 14,225
H.J. Heinz Co.. . . . . . . . . . . . . . . . . 500 21,875
Unilever plc - ADR (Note 7) . . . . . . . . . . 1,037 26,055
---------
62,155
---------
INDUSTRIAL & COMMERCIAL MACHINERY - 3.54%
Baker Hughes, Inc.. . . . . . . . . . . . . . . 675 21,600
Compaq Computer Corp. . . . . . . . . . . . . . 450 11,503
---------
33,103
---------
INVESTORS - 0.75%
Reed International plc - ADR (note 7) . . . . . 200 7,000
---------
PAPER & ALLIED PRODUCTS - 0.62%
Aracruz Celulose SA - ADR (Note 7). . . . . . . 300 5,794
---------
PRIMARY METAL INDUSTRY - 0.70%
Phelps Dodge Corp . . . . . . . . . . . . . . . 175 6,508
---------
TECHNICAL INSTRUMENTS & SUPPLIES - 3.18%
Eastman Kodak Co. . . . . . . . . . . . . . . . 500 29,750
---------
TELECOMMUNICATION SERVICES - 1.20%
Telecomunicacoes Brasileiras S.A. (Telebras) -
ADR PFD (Note 7) . . . . . . . . . . . . . 115 11,184
---------
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
Investment Portfolio - June 30, 2000 (unaudited)
<TABLE>
<CAPTION>
VALUE
GROWTH PORTFOLIO (continued) SHARES (NOTE 2)
----------------------------------------------------- ------------------ ---------
<S> <C> <C>
TRANSPORTATION - 4.52%
EQUIPMENT - 1.06%
Northrup Grumman Corp. . . . . . . . . . . . . . . 150 $ 9,937
---------
RAILROAD - 3.46%
Burlington Northern Santa Fe Corp. . . . . . . . . 550 12,616
Canadian National Railway Co. - ADR (Note 7) . . . 675 19,701
---------
32,317
---------
42,254
---------
TOTAL COMMON STOCK
(Identified Cost $352,794). . . . . . . . . . . . . . 391,800
---------
U.S. TREASURY SECURITIES - 33.04%
U.S. TREASURY BONDS - 18.82%
U.S. Treasury Bond, 6.50%, 11/15/2026. . . . . . . $ 35,000 36,509
U.S. Treasury Bond, 5.50%, 8/15/2028 . . . . . . . 152,000 139,413
---------
TOTAL U.S. TREASURY BONDS
(Identified Cost $170,599) . . . . . . . . . . . . 175,922
---------
U.S. TREASURY NOTES - 14.22%
U.S. Treasury Note, 4.25%, 11/15/2003. . . . . . . 45,000 42,216
U.S. Treasury Note, 6.00%, 8/15/2004 . . . . . . . 15,000 14,859
U.S. Treasury Note, 5.875%, 11/15/2004 . . . . . . 25,000 24,625
U.S. Treasury Note, 6.75%, 5/15/2005 . . . . . . . 50,000 51,172
---------
TOTAL U.S. TREASURY NOTES
(Identified Cost $133,717) . . . . . . . . . . . . 132,872
---------
TOTAL U.S. TREASURY SECURITIES
(Identified Cost $304,316) . . . . . . . . . . . . 308,794
---------
U.S GOVERNMENT AGENCIES - 17.62%
Federal National Mortgage Association Note,
5.375%, 3/15/2002 . . . . . . . . . . . . . . . . . 30,000 29,272
Federal Home Loan Bank Note, 5.28%, 1/6/2004. . . . . 70,000 66,216
Federal Home Loan Mortgage Corp. Note,
6.625%, 9/15/2009 . . . . . . . . . . . . . . . . . 30,000 28,932
Federal National Mortgage Association Bond,
6.25%, 5/15/2029 . . . . . . . . . . . . . . . . . . 45,000 40,289
---------
TOTAL U.S. GOVERNMENT AGENCIES
(Identified Cost $164,671). . . . . . . . . . . 164,709
---------
SHORT-TERM INVESTMENTS - 4.98%
Federal National Mortgage Association Discount Note,
7/11/2000 . . . . . . . . . . . . . . . . . . . 25,000 24,964
Dreyfus Treasury Cash Management Fund . . . . . . . . 21,591 21,591
---------
TOTAL SHORT-TERM INVESTMENTS
(Identified Cost $46,547). . . . . . . . . . . . . . 46,555
---------
TOTAL INVESTMENTS - 97.57%
(Identified Cost $868,328) . . . . . . . . . . . . 911,858
OTHER ASSETS, LESS LIABILITIES - 2.43%. . . . . . . . 22,696
---------
NET ASSETS - 100% . . . . . . . . . . . . . . . . . . $ 934,554
=============
</TABLE>
*Non-income producing security
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
Investment Portfolio - June 30, 2000 (unaudited)
Growth Portfolio (continued)
Federal Tax Information:
At June 30, 2000, the net unrealized appreciation based on identified cost for
federal income tax purposes of $868,328 was as follows:
Unrealized appreciation $62,460
Unrealized depreciation (18,930)
--------
UNREALIZED APPRECIATION - NET $43,530
=======
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
Investment Portfolio - June 30, 2000 (unaudited)
<TABLE>
<CAPTION>
VALUE
MAXIMUM HORIZON PORTFOLIO SHARES (NOTE 2)
--------------------------------------------------- ------ ---------
COMMON STOCK - 78.36%
<S> <C> <C>
APPAREL - 2.64%
Adidas Solomon AG (Germany) (Note 7). . . . . . . . 125 $ 6,926
---------
CHEMICAL & ALLIED PRODUCTS - 12.96%
BIOLOGICAL PRODUCTS - 4.99%
FMC Corp.. . . . . . . . . . . . . . . . . . . . 100 5,800
Sigma-Aldrich Corp.. . . . . . . . . . . . . . . 250 7,312
---------
13,112
---------
MISCELLANEOUS - 7.97%
Eastman Chemical Co. . . . . . . . . . . . . . . 150 7,163
Gillette Co. . . . . . . . . . . . . . . . . . . 150 5,241
Proctor & Gamble Co. . . . . . . . . . . . . . . 75 4,294
Sherwin-Williams Co. . . . . . . . . . . . . . . 200 4,237
---------
20,935
---------
34,047
---------
COMPUTER INTEGRATED SYSTEMS DESIGN - 3.77%
Parametric Technology Corp. . . . . . . . . . . . . 900 9,900
---------
CRUDE PETROLEUM & NATURAL GAS - 6.51%
Gulf Canada Resources Ltd. - ADR* (Note 7). . . . . 1,000 4,812
Halliburton Co. . . . . . . . . . . . . . . . . . . 100 4,719
Petroleo Brasileiro S.A. (Petrobras) - ADR (Note 7) 250 7,553
---------
17,084
---------
ELECTRIC, GAS, AND SANITARY SERVICES- 4.24%
Cinergy Corp. . . . . . . . . . . . . . . . . . . . 100 2,544
Conectiv, Inc . . . . . . . . . . . . . . . . . . . 100 1,556
FirstEnergy Corp. . . . . . . . . . . . . . . . . . 100 2,337
PPL Corp. . . . . . . . . . . . . . . . . . . . . . 100 2,194
POTOMAC ELECTRIC POWER CO.. . . . . . . . . . . . . 100 2,500
---------
11,131
---------
ELECTRONICS & ELECTRICAL EQUIPMENT - 0.74%
Raytheon Co. - Class A. . . . . . . . . . . . . . . 100 1,944
---------
FABRICATED METAL INDUSTRIES - 1.42%
Lockheed Martin Corp. . . . . . . . . . . . . . . . 150 3,722
---------
FOOD & KINDRED PRODUCTS - 7.59%
Diageo plc - ADR (Note 7) . . . . . . . . . . . . . 150 5,334
H.J. Heinz Co.. . . . . . . . . . . . . . . . . . . 200 8,750
Unilever plc - ADR (Note 7) . . . . . . . . . . . . 233 5,854
---------
19,938
---------
INDUSTRIAL & COMMERCIAL MACHINERY - 8.63%
Baker Hughes, Inc.. . . . . . . . . . . . . . . . . 200 6,400
Compaq Computer Corp. . . . . . . . . . . . . . . . 200 5,112
Diebold, Inc. . . . . . . . . . . . . . . . . . . . 400 11,150
---------
22,662
---------
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
Investment Portfolio - June 30, 2000 (unaudited)
<TABLE>
<CAPTION>
SHARES/PRINCIPAL VALUE
MAXIMUM HORIZON PORTFOLIO (continued) AMOUNT (NOTE 2)
------------------------------------------------- ----------------- ---------
<S> <C> <C>
INVESTORS - 2.00%
Reed International plc - ADR (Note 7) . . . . . . 150 $ 5,250
---------
NATIONAL COMMERCIAL BANKS - 0.89%
Bank of New York Company, Inc.. . . . . . . . . . 50 2,325
---------
NON-DEPOSITORY CREDIT INSTITUTIONS - 1.03%
MBNA Corp . . . . . . . . . . . . . . . . . . . . 100 2,712
---------
PAPER & ALLIED PRODUCTS - 8.00%
Aracruz Celulose S.A. - ADR (Note 7). . . . . . . 300 5,794
Fort James Corp.. . . . . . . . . . . . . . . . . 150 3,469
International Paper Co. . . . . . . . . . . . . . 250 7,453
Kimberly-Clark Corp.. . . . . . . . . . . . . . . 75 4,303
---------
21,019
---------
PRIMARY METAL INDUSTRIES - 3.61%
Phelps Dodge Corp.. . . . . . . . . . . . . . . . 100 3,719
Texas Industries, Inc.. . . . . . . . . . . . . . 200 5,775
---------
9,494
---------
RUBBER & PLASTIC FOOTWEAR - 1.52%
NIKE, Inc., Class B . . . . . . . . . . . . . . . 100 3,981
---------
SOFTWARE - 1.46%
Computer Associates International, Inc. . . . . . 75 3,839
---------
TECHNICAL INSTRUMENTS & SUPPLIES - 3.40%
Eastman Kodak Co. . . . . . . . . . . . . . . . . 150 8,925
---------
TELECOMMUNICATION SERVICES - 0.93%
Telecomunicacoes Brasileiras S.A. (Telebras) -
ADR PFD (Note 7). . . . . . . . . . . . . . . . 25 2,450
---------
TRANSPORTATION - 7.02%
EQUIPMENT - 3.20%
B.F. Goodrich Co.. . . . . . . . . . . . . . 150 5,109
Northrup Grumman Corp. . . . . . . . . . . . 50 3,313
---------
8,422
---------
RAILROAD - 3.82%
Burlington Northern Santa Fe Corp. . . . . . 150 3,441
Canadian National Railway Co. - ADR (Note 7) 150 4,378
Kansas City Southern Industries, Inc.. . . . 25 2,217
---------
10,036
---------
18,458
---------
TOTAL COMMON STOCK
(Identified Cost $209,142). . . . . . . . . . . . 205,807
---------
U.S. TREASURY SECURITIES- 18.42%
U.S. Treasury Bond, 6.50%, 11/15/2026 . . . . . . $ 20,000 20,863
U.S. Treasury Bond, 5.50% 08/15/2028. . . . . . . 30,000 27,516
---------
TOTAL U.S. TREASURY SECURITIES
(Identified Cost $47,828). . . . . . . . . . . 48,379
---------
</TABLE>
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
Investment Portfolio - June 30, 2000 (unaudited)
<TABLE>
<CAPTION>
VALUE
MAXIMUM HORIZON PORTFOLIO (continued) SHARES (NOTE 2)
-------------------------------------- -------- ---------
<S> <C> <C>
SHORT-TERM INVESTMENTS - 0.58%
Dreyfus Treasury Cash Management Fund
(Identified Cost $1,511). . . . . . 1,511 $ 1,511
---------
TOTAL INVESTMENTS - 97.36%
(Identified Cost $258,481) . . . . . . 255,697
OTHER ASSETS, LESS LIABILTIES - 2.64%. 6,940
--------
NET ASSETS - 100%. . . . . . . . . . . $262,637
=========
</TABLE>
*Non-income producing security
FEDERAL TAX INFORMATION:
At June 30, 2000 the net unrealized depreciation based on identified cost
for federal income tax purposes of $258,481 was as follows:
Unrealized appreciation $18,394
Unrealized depreciation (21,178)
--------
UNREALIZED DEPRECIATION - NET ($2,784)
========
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
<TABLE>
<CAPTION>
JUNE 30, 2000
EXETER INSURANCE FUND, INC.
----------------------------
Moderate Maximum
Growth Growth Horizon
Portfolio Portfolio Portfolio
---------------------------- ---------- -----------
ASSETS:
<S> <C> <C> <C>
Investments in securities (Note 2):
At identified cost . . . . . . . $ 284,125 $ 868,328 $ 258,481
============================ ========== ===========
At value . . . . . . . . . . . . $ 286,556 $ 911,858 $ 255,697
Cash. . . . . . . . . . . . . . . . . -- -- 118
Foreign currency at value . . . . . . 49 195 --
Dividends receivable. . . . . . . . . 333 1,079 468
Interest receivable . . . . . . . . . 2,618 7,956 860
Receivable for securities sold. . . . -- 12,095 --
Receivable from investment advisor
(Note 3). . . . . . . . . . . . . . 17,731 15,056 18,090
---------------------------- ---------- -----------
TOTAL ASSETS. . . . . . . . . . . . . 307,287 948,239 275,233
---------------------------- ---------- -----------
LIABILITIES:
Accrued directors' fees (Note 3). . . 5,431 5,431 5,431
Accrued fund accounting fees (Note 3) 3,556 3,549 3,638
Audit fee payable . . . . . . . . . . 2,814 2,792 2,815
Custodian fee payable . . . . . . . . 373 1,634 602
Payable for fund shares repurchased . -- 215 --
Other payables and accrued expenses . 579 64 110
---------------------------- ---------- -----------
TOTAL LIABILITIES . . . . . . . . . . 12,753 13,685 12,596
---------------------------- ---------- -----------
NET ASSETS. . . . . . . . . . . . . . $ 294,534 $ 934,554 $ 262,637
============================ ========== ===========
NET ASSETS CONSIST OF:
Capital stock . . . . . . . . . . . . $ 269 $ 695 $ 200
Additional paid-in-capital. . . . . . 269,553 840,753 204,441
Undistributed net investment income . 11,662 26,628 3,973
Accumulated net realized gain
on investments . . . . . . . . . 10,617 22,940 56,803
Net unrealized appreciation
(depreciation) on investments . . 2,433 43,538 (2,780)
---------------------------- ---------- -----------
TOTAL NET ASSETS. . . . . . . . . . . $ 294,534 $ 934,554 $ 262,637
============================ ========== ===========
SHARES OUTSTANDING. . . . . . . . . . 26,944 69,546 19,960
============================ ========== ===========
NET ASSET VALUE PER SHARE . . . . . . $ 10.93 $ 13.44 $ 13.16
============================ ========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
STATEMENT OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
EXETER INSURANCE FUND, INC.
-----------------------------
Moderate Maximum
Growth Growth Horizon
Portfolio Portfolio Portfolio
----------------------------- ----------- -----------
FOR THE SIX MONTHS ENDED JUNE 30, 2000
INVESTMENT INCOME:
<S> <C> <C> <C>
Interest . . . . . . . . . . . . . . . . $ 5,627 $ 13,975 $ 1,549
Dividends. . . . . . . . . . . . . . . . 1,291 4,832 2,212
----------------------------- ----------- -----------
Total Investment Income. . . . . . . . . 6,918 18,807 3,761
----------------------------- ----------- -----------
EXPENSES:
Management fees (Note 3) . . . . . . . . 1,424 3,967 1,207
Directors' fees (Note 3) . . . . . . . . 3,829 3,829 3,829
Fund accounting fees (Note 3). . . . . . 11,673 11,673 11,673
Audit fee. . . . . . . . . . . . . . . . 3,159 3,159 3,159
Custodian fee. . . . . . . . . . . . . . 399 746 497
Miscellaneous. . . . . . . . . . . . . . 380 408 377
----------------------------- ----------- -----------
Total Expenses . . . . . . . . . . . . . 20,864 23,782 20,742
Less Reduction of Expenses (Note 3). . . (19,157) (19,025) (19,296)
----------------------------- ----------- -----------
Net Expenses . . . . . . . . . . . . . . 1,707 4,757 1,446
----------------------------- ----------- -----------
NET INVESTMENT INCOME. . . . . . . . . . 5,211 14,050 2,315
----------------------------- ----------- -----------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments. 8,835 13,958 25,242
Net change in unrealized appreciation
(depreciation) on investments . . . . 854 36,176 (13,888)
----------------------------- ----------- -----------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS. . . . . . 9,689 50,134 11,354
----------------------------- ----------- -----------
NET INCREASE IN NET
ASSETS RESULTING FROM
OPERATIONS . . . . . . . . . . . . . . . $ 14,900 $ 64,184 $ 13,669
============================= =========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
EXETER INSURANCE FUND, INC.
-----------------------------
MODERATE GROWTH
PORTFOLIO GROWTH PORTFOLIO
----------------------------- ------------------
FOR THE FOR THE FOR THE
SIX MONTHS FOR THE SIX MONTHS FOR THE
ENDED YEAR ENDED YEAR
6/30/00 ENDED 6/30/00 ENDED
(UNAUDITED) 12/31/99 (UNAUDITED) 12/31/99
----------------------------- ------------------ ----------- ------------
INCREASE (DECREASE) IN NET ASSETS
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income . . . . . . . . . $ 5,211 $ 6,452 $ 14,050 $ 12,578
Net realized gain on investments. . . . 8,835 2,747 13,958 17,950
Net change in unrealized appreciation
(depreciation) on investments . . . . 854 1,975 36,176 29,127
----------------------------- ------------------ ----------- ------------
Net increase (decrease)
From operations. . . . . . . . . . . . 14,900 11,174 64,184 59,655
----------------------------- ------------------ ----------- ------------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income. . . . . . . -- (4,809) -- (14,451)
From net realized gain on investments . -- (9,435) -- (17,687)
----------------------------- ------------------ ----------- ------------
Total distributions to shareholders . . -- (14,244) -- (32,138)
----------------------------- ------------------ ----------- ------------
CAPITAL STOCK ISSUED AND
REPURCHASED:
Net increase (decrease) from capital
share transactions (Note 6). . . . . . (5,874) 135,254 345,322 (117,226)
----------------------------- ------------------ ----------- ------------
Net increase (decrease) in net assets . 9,026 132,184 409,506 (89,709)
NET ASSETS:
Beginning of period . . . . . . . . . . 285,508 153,324 525,048 614,757
----------------------------- ------------------ ----------- ------------
END OF PERIOD . . . . . . . . . . . . . $ 294,534 $ 285,508 $ 934,554 $ 525,048
============================= ================== =========== ============
Including undistributed net investment
income of. . . . . . . . . . . . . . $ 11,662 $ 6,451 $ 26,628 $ 12,578
MAXIMUM HORIZON
PORTFOLIO
-----------------------
SIX MONTHS FOR THE
ENDED SIX MONTHS
6/30/00 ENDED
(UNAUDITED) 12/31/99
------------ ------------
INCREASE (DECREASE) IN NET ASSETS
<S> <C> <C>
OPERATIONS:
Net investment income . . . . . . . . . $ 2,315 $ 3,115
Net realized gain on investments. . . . 25,242 32,683
Net change in unrealized appreciation
(depreciation) on investments . . . . (13,888) 22,426
------------ ------------
Net increase (decrease)
From operations. . . . . . . . . . . . 13,669 58,224
------------ ------------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income. . . . . . . -- (3,525)
From net realized gain on investments . -- (24,534)
------------ ------------
Total distributions to shareholders . . -- (28,059)
------------ ------------
CAPITAL STOCK ISSUED AND
REPURCHASED:
Net increase (decrease) from capital
share transactions (Note 6). . . . . . 20,725 28,059
------------ ------------
Net increase (decrease) in net assets . 34,394 58,224
NET ASSETS:
Beginning of period . . . . . . . . . . 228,243 170,019
------------ ------------
END OF PERIOD . . . . . . . . . . . . . $ 262,637 $ 228,243
============ ============
Including undistributed net investment
income of. . . . . . . . . . . . . . $ 3,973 $ 1,658
</TABLE>
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
EXETER INSURANCE FUND, INC.
-----------------------------
Moderate Growth Portfolio
-----------------------------
FOR THE
SIX MONTHS FOR THE FOR THE FOR THE FOR THE
ENDED YEAR YEAR YEAR PERIOD
6/30/00 ENDED ENDED ENDED 11/1/96 1 TO
(UNAUDITED) 12/31/99 12/31/98 12/31/97 12/31/96
----------------------------- ---------- ---------- ---------- -----------------
PER SHARE DATA (FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD):
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE - BEGINNING OF PERIOD . $ 10.38 $ 10.95 $ 11.33 $ 10.11 $ 10.00
----------------------------- ---------- ---------- ---------- --------------
Income from investment operations:
Net investment income* . . . . . . . . . 0.20 0.24 0.35 0.36 0.07
Net realized and unrealized gain (loss)
on investments. . . . . . . . . . . . 0.35 0.21 0.29 0.93 0.04
----------------------------- ---------- ---------- ---------- --------------
Total from investment operations . . . . 0.55 0.45 0.64 1.29 0.11
----------------------------- ---------- ---------- ---------- --------------
Less distributions to shareholders:
From net investment income . . . . . . . -- (0.34) (0.36) (0.07) --
From net realized gain on investments. . -- (0.68) (0.66) -- --
----------------------------- ---------- ---------- ---------- --------------
Total distributions to shareholders. . . -- (1.02) (1.02) (0.07) --
----------------------------- ---------- ---------- ---------- --------------
NET ASSET VALUE - END OF PERIOD. . . . . $ 10.93 $ 10.38 $ 10.95 $ 11.33 $ 10.11
============================= ========== ========== ========== ==============
Total return 2 . . . . . . . . . . . . . 5.30% 4.06% 6.25% 12.73% 1.10%
Ratios to average net
assets / Supplemental Data:
Expenses * . . . . . . . . . . . . . 1.20%3 1.20% 1.20% 1.20% 1.20%3
Net investment income *. . . . . . . 3.66%3 3.62% 3.25% 3.35% 4.08%3
Portfolio turnover . . . . . . . . . . . 26% 109% 69% 53% 0%
NET ASSETS - END OF PERIOD . . . . . . . $ 294,534 $ 285,508 $ 153,324 $ 144,386 $ 128,104
============================= ========== ========== ========== ==============
</TABLE>
* The investment advisor did not impose its management fee and paid a portion of
the Portfolio's expenses. If these expenses had been incurred by the Portfolio,
and had 1996 expenses been limited by state securities law, the net investment
income per share and the ratios would have been as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Net investment income (loss) . . $ (0.53) $ (0.28) $ (0.52) $ (1.02) $ 0.04
Ratios (to average net assets):
Expenses. . . . . . . . . . . 14.64%3 9.20% 9.34% 14.16% 2.50%3
Net investment income (loss). (9.78)%3 (4.38)% (4.89)% (9.61)% 2.78%3
</TABLE>
1 Commencement of operations.
2 Represents aggregate total return for the period indicated.
3 Annualized.
4 The amount shown for a share outstanding does not correspond with the
aggregate net loss on investments for the period due to the timing of sales and
repurchase of fund shares in relation to fluctuating market values of the
investments of the fund
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
FINANCIAL HIGHLIGHTS - CONTINUED
<TABLE>
<CAPTION>
EXETER INSURANCE FUND, INC.
-----------------------------
Growth Portfolio
-----------------------------
FOR THE
SIX MONTHS FOR THE FOR THE FOR THE FOR THE
ENDED YEAR YEAR YEAR PERIOD
6/30/00 ENDED ENDED ENDED 11/1/96 1 TO
(UNAUDITED) 12/31/99 12/31/98 12/31/97 12/31/96
----------------------------- ---------- ---------- ---------- ----------------
PER SHARE DATA (FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD):
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE - BEGINNING OF PERIOD . $ 12.57 $ 11.90 $ 12.17 $ 10.25 $ 10.00
----------------------------- ---------- ---------- ---------- --------------
Income from investment operations:
Net investment income* . . . . . . . . . 0.08 0.39 0.20 0.17 0.05
Net realized and unrealized gain (loss)
on investments. . . . . . . . . . . . 0.79 1.10 0.014 1.80 0.20
----------------------------- ---------- ---------- ---------- --------------
Total from investment operations . . . . 0.87 1.49 0.21 1.97 0.25
----------------------------- ---------- ---------- ---------- --------------
Less distributions to shareholders:
From net investment income . . . . . . . -- (0.37) (0.09) (0.05) --
From net realized gain on investments. . -- (0.45) (0.39) -- --
----------------------------- ---------- ---------- ---------- --------------
Total distributions to shareholders. . . -- (0.82) (0.48) (0.05) --
----------------------------- ---------- ---------- ---------- --------------
NET ASSET VALUE - END OF PERIOD. . . . . $ 13.44 $ 12.57 $ 11.90 $ 12.17 $ 10.25
============================= ========== ========== ========== ==============
Total return 2 . . . . . . . . . . . . . 6.92% 12.74% 2.07% 19.23% 2.50%
Ratios to average net
assets / Supplemental Data:
Expenses * . . . . . . . . . . . . . 1.20%3 1.20% 1.20% 1.20% 1.20%3
Net investment income *. . . . . . . 3.54%3 2.45% 2.47% 2.42% 3.11%3
Portfolio turnover . . . . . . . . . . . 37% 82% 138% 90% 3%
NET ASSETS - END OF PERIOD . . . . . . . $ 934,554 $ 525,048 $ 614,757 $ 318,228 $ 129,874
============================= ========== ========== ========== ==============
</TABLE>
* The investment advisor did not impose its management fee and paid a portion of
the Portfolio's expenses. If these expenses had been incurred by the Portfolio,
and had 1996 expenses been limited by state securities law, the net investment
income per share and the ratios would have been as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Net investment income (loss) . . $ (0.03) $ (0.07) $0.03 $ (0.51) $ 0.03
Ratios (to average net assets):
Expenses. . . . . . . . . . . 5.99%3 4.11% 3.30% 10.98% 2.50%3
Net investment income (loss). (1.25)%3 (0.46)% 0.37% (7.36)% 1.81%3
</TABLE>
1 Commencement of operations.
2 Represents aggregate total return for the period indicated.
3 Annualized.
4 The amount shown for a share outstanding does not correspond with the
aggregate net loss on investments for the period due to the timing of sales and
repurchase of fund shares in relation to fluctuating market values of the
investments of the fund
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
FINANCIAL HIGHLIGHTS - CONTINUED
<TABLE>
<CAPTION>
EXETER INSURANCE FUND, INC.
-----------------------------
MAXIMUM HORIZON PORTFOLIO
-----------------------------
FOR THE
SIX MONTHS FOR THE FOR THE FOR THE FOR THE
ENDED YEAR YEAR YEAR PERIOD
06/30/00 ENDED ENDED ENDED 11/1/96 1 TO
(UNAUDITED) 12/31/99 12/31/98 12/31/97 12/31/96
----------------------------- ---------- ---------- ---------- -----------------
PER SHARE DATA (FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD):
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE - BEGINNING OF PERIOD . $ 12.42 $ 10.66 $ 12.89 $ 10.44 $ 10.00
----------------------------- ---------- ---------- ---------- --------------
Income from investment operations:
Net investment income (loss)*. . . . . . 0.11 0.18 0.13 0.09 0.02
Net realized and unrealized gain (loss)
on investments. . . . . . . . . . . . 0.63 3.34 (0.08)4 2.38 0.42
----------------------------- ---------- ---------- ---------- --------------
Total from investment operations . . . . 0.74 3.52 0.05 2.47 0.44
----------------------------- ---------- ---------- ---------- --------------
Less distributions to shareholders:
From net investment income --- (0.22) (0.16) (0.02) --
From net realized gain on investments --- (1.54) (2.12) -- --
----------------------------- ---------- ---------- ---------- --------------
Total distributions to shareholders --- (1.76) (2.28) (0.02) --
----------------------------- ---------- ---------- ---------- --------------
NET ASSET VALUE - END OF PERIOD. . . . . $ 13.16 $ 12.42 $ 10.66 $ 12.89 $ 10.44
============================= ========== ========== ========== ==============
Total return 2 . . . . . . . . . . . . . 5.96% 34.28% 3.91% 23.69% 4.40%
Ratios of expenses (to average net
assets) / Supplemental Data:
Expenses * . . . . . . . . . . . . . 1.20%3 1.20% 1.20% 1.20% 1.20%3
Net investment income (loss)*. . . . 1.92%3 1.58% 1.08% 0.78% 1.43%3
Portfolio turnover . . . . . . . . . . . 48% 89% 100% 120% 4%
NET ASSETS - END OF PERIOD . . . . . . . $ 262,637 $ 228,243 $ 170,019 $ 163,538 $ 132,216
============================= ========== ========== ========== ==============
</TABLE>
* The investment advisor did not impose its management fee and paid a portion of
the Portfolio's expenses. If these expenses had been incurred by the Portfolio,
and had 1996 expenses been limited by state securities law, the net investment
income per share and the ratios would have been as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Net investment income (loss) . . $ (0.81) $ (0.67) $ (0.72) $ (1.29) $ 0.00
Ratios (to average net assets):
Expenses. . . . . . . . . . . 17.19%3 8.56% 8.43% 12.76% 2.50%3
Net investment income (loss). (14.07)%3 (5.78)% (6.15)% (10.78)% 0.13%3
</TABLE>
1 Commencement of operations.
2 Represents aggregate total return for the period indicated.
3 Annualized.
4 The amount shown for a share outstanding does not correspond with the
aggregate net gain on investments for the period due to the timing of sales and
repurchase of fund shares in relation to fluctuating market values of the
investments of the fund.
The accompanying notes are an integral part of the financial statements.
19
<PAGE>
Notes to Financial Statements (unaudited)
1. ORGANIZATION
Moderate Growth Portfolio, Growth Portfolio, and Maximum Horizon Portfolio are
no-load diversified portfolios (collectively the "Portfolios") of Exeter
Insurance Fund, Inc. (the "Fund"). The Fund 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 Fund are offered only to separate
accounts funding variable annuity contracts issued by Keyport Life Insurance
Company and Keyport Benefit Life Insurance Company.
The total authorized capital stock of the Fund consists of 300 million shares of
common stock each having a par value of $0.01. As of June 30, 2000, 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 provided by the Fund's pricing
service.
Debt securities, including government bonds and mortgage backed securities, will
normally be valued on the basis of evaluated bid prices provided by the Fund's
pricing service.
Securities for which representative valuations or 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 days or less are valued at amortized
cost, which approximated market value.
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 Fund can be attributed to a specific portfolio. Expenses
which cannot be directly attributed are apportioned among the portfolios in the
Fund.
FEDERAL INCOME TAXES
The Portfolios' policy is to comply with the provisions of the Internal Revenue
Code applicable to regulated investment companies. The Portfolios are not
subject to federal income tax to the extent that the Portfolios 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 Portfolios use the identified cost method for determining realized gains or
losses on investments for both financial statement and federal income tax
reporting purposes.
DISTRIBUTIONS OF INCOME AND GAINS
Distributions to shareholders of net investment income are made annually.
Distributions of net realized gains, if any, are distributed annually. An
additional distribution may be necessary to avoid taxation of the Portfolios.
Distributions are recorded on the ex-dividend date.
20
<PAGE>
Notes to Financial Statements (unaudited)
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
DISTRIBUTIONS 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 Portfolios may periodically make
reclassifications among their capital accounts without impacting the Portfolios'
net asset value. Any such reclassifications are not reflected in the financial
highlights.
FOREIGN CURRENCY TRANSLATION
The accounting records of the Portfolios 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) purchases 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
investments that result from fluctuations in foreign currency exchange rates is
not separately stated.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
The Portfolios may purchase or sell forward foreign currency contracts in order
to hedge portfolio positions or specific transaction. Risks may arise if the
counterparties 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, 2000, the Portfolios 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 Fund has an investment advisory agreement with Manning & Napier Advisors,
Inc. (the "Advisor"), for which each Portfolio pays the Advisor a fee, computed
daily and payable monthly, at an annual rate of 1.0% of each Portfolio's average
daily net assets.
Under the Fund's Investment Advisory Agreement (the "Agreement"), personnel of
the Advisor provide the Portfolios with advice and assistance in the choice of
investments and the execution of securities transactions, and otherwise maintain
the Portfolios' organization. The Advisor also provides the Funds with
necessary office space and fund administration 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 Portfolios in order to maintain total expenses for each of the
Portfolios at no more than 1.20% of average daily net assets each year.
Accordingly, the Advisor did not impose any of its fee and paid expenses
amounting to $17,733 for the Moderate Growth Portfolio, $15,058 for the Growth
Portfolio, and $18,089 for the Maximum Horizon Portfolio for the six months
ended June 30, 2000.
The Advisor also acts as the transfer, dividend paying and shareholder servicing
agent for the Fund. These services are provided at no additional cost to the
Portfolios.
Manning & Napier Investor Services, Inc., a registered broker-dealer affiliate
of the Advisor, acts as distributor for the Fund's shares. The services of
Manning & Napier Investor Services, Inc. are provided at no additional cost to
the Portfolios.
21
<PAGE>
Notes to Financial Statements
3. TRANSACTIONS WITH AFFILIATES (continued)
Effective April 2000, the Advisor became the Fund's accounting services agent.
For these services, the Fund will pay the Advisor a fee of 0.04% of each
Portfolio's daily net assets, calculated daily and payable monthly, with a
minimum annual fee of $48,000 per Portfolio. The Advisor has entered into an
agreement with BISYS Fund Services Ohio, Inc. under which BISYS will serve as
sub-accounting services agent.
4. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities, other than short-term securities, for the six
months ended June 30, 2000 were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
-------------- -----------
PORTFOLIOS OTHER ISSUERS GOVERNMENT OTHER ISSUERS GOVERNMENT
------------------------- -------------- ----------- -------------- -----------
<S> <C> <C> <C> <C>
Moderate Growth Portfolio $ 16,524 $ 53,224 $ 41,391 $ 35,113
Growth Portfolio. . . . . 196,698 386,107 148,895 128,944
Maximum Horizon Portfolio 98,354 37,241 95,272 10,013
</TABLE>
5. CAPITAL STOCK TRANSACTIONS
Transactions in capital shares of Portfolios were as follows:
<TABLE>
<CAPTION>
FOR THE SIX MONTHS FOR THE YEAR
ENDED 6/30/00 ENDED 12/31/99
------------------- ----------------
PORTFOLIOS SHARES AMOUNT SHARES AMOUNT
------------------------- ------------------- ---------------- -------- ----------
<S> <C> <C> <C> <C>
MODERATE GROWTH PORTFOLIO
Sold. . . . . . . . . . . -- -- 12,125 $ 121,010
Reinvested. . . . . -- -- 1,370 14,244
Repurchased . . . . (558) $ (5,874) -- --
------------------- ---------------- -------- ----------
Net change. . . . . . . . (558) $ (5,874) 13,495 $ 135,254
=================== ================ ======== ==========
GROWTH PORTFOLIO
Sold. . . . . . . . . . . 28,082 $ 349,090 4,207 $ 51,164
Reinvested. . . . . -- -- 2,633 32,138
Repurchased . . . . . . . (300) (3,768) (16,753) (200,528)
------------------- ---------------- -------- ----------
Net change. . . . . . . . 27,782 $ 345,322 (9,913) $(117,226)
=================== ================ ======== ==========
MAXIMUM HORIZON PORTFOLIO
Sold. . . . . . . . . . . 1,587 $ 20,740 -- --
Reinvested. . . . . -- -- 2,431 $ 28,059
Repurchased . . . . . . . (1) (15) -- --
------------------- ---------------- -------- ----------
Net change. . . . . . . . 1,586 $ 20,725 2,431 $ 28,059
=================== ================ ======== ==========
</TABLE>
6. 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. These risks
include revaluation of currencies and future adverse political and economic
developments. Moreover, securities of foreign companies and foreign governments
and their markets may be less liquid and their prices more volatile than
securities of comparable domestic companies and the United States Government.
7. FINANCIAL INSTRUMENTS
The Portfolios 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 Portfolios on June 30, 2000.
22
<PAGE>
<PAGE>
