BT INSURANCE FUNDS TRUST
EAFE(R) EQUITY INDEX FUND
ANNUAL REPORT
- --------------------------------------------------------------------------------
DECEMBER 1998
<PAGE>
- ----------------------------------------------------------------------------
BT INSURANCE FUNDS TRUST EAFE(R) EQUITY INDEX FUND
Table of Contents
- ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
LETTER TO SHAREHOLDERS ........................ 3
EAFE EQUITY INDEX FUND
Statement of Net Assets ..................... 6
Statement of Operations ..................... 13
Statements of Changes in Net Assets ......... 14
Financial Highlights ........................ 15
Notes to Financial Statements ............... 16
Report of Independent Auditors .............. 19
</TABLE>
------------------
The Fund is not insured by the FDIC or any other government agency
and is not a deposit, obligation of or guaranteed by Bankers Trust
Company. The Fund is subject to investment risks, including possible
loss of principal amount invested.
------------------
2
<PAGE>
- ----------------------------------------------------------------------------
BT INSURANCE FUNDS TRUST EAFE(R) EQUITY INDEX FUND
Letter to Shareholders
- ----------------------------------------------------------------------------
MARKET ACTIVITY
Overall, 15 of the 20 EAFE(R) markets posted gains for the annual period ended
December 31, 1998, and five had double-digit returns. Most of the advance of the
MSCI EAFE(R)1 Index2 took place in the fourth quarter, and, with the exception
of three months out of the year, equities added to performance; currencies
overall did not. Other than August and September, Europe rose each month. The
Pacific Basin rose in January and February and then declined through the middle
two quarters of the year, only to regain investors' confidence with
comparatively strong returns in the fourth quarter.
EUROPE
Regionally, Europe rose 28.5% in U.S. dollar terms during the annual period, as
new record highs were recorded in most European markets. Markets responded to:
o A FAVORABLE LOW INTEREST RATE/LOW INFLATION ENVIRONMENT -- Virtually
throughout the year, European governments cut interest rates, including
Denmark, France, Germany, Ireland, Italy, Portugal, Spain, Sweden, and the
United Kingdom. Such concerted effort on the part of the individual central
banks raised optimism that the conversion to the Euro would go off
seamlessly. Economic growth was solid, and inflation continued to edge lower.
o CONTINUED EUROPEAN MONETARY UNION ENTHUSIASM -- On May 2nd, the members of
the EMU were announced. The Euro euphoria, i.e. anticipation of the single
currency's introduction, which buttressed the region's markets through most
of the year also contributed to the overall buoyant end to 1998.
o BETTER THAN EXPECTED EARNINGS AND SIGNIFICANT MERGER AND ACQUISITION ACTIVITY
-- For example, Finland was the top-performing market in both April and July,
rising on better than expected earnings for Nokia, the global
telecommunications firm, which accounts for more than half of MSCI Finland.
Belgium was the top performer in June as electricity supplier, Electrabel,
formed a trading joint venture with local Scandinavian partners. Italy did
well in July on an improved outlook for telecommunications stocks and on
rumors of possible bank mergers. Switzerland gained that same month on
expectations of robust drug company earnings. Norway advanced in October, led
by Norsk Hydro, which rose partly in response to a rise in crude oil prices.
Sweden was the top performer in November, advancing on renewed merger rumors
in the drug sector. In Germany, DaimlerChrysler began trading as one share in
November, deleting Chrysler from U.S. indices, but gaining weighting in
international indices.
In August, all of the European countries declined, as a combination of political
turmoil in Russia and continued economic distress in Asia contributed to a
global stock market correction. This lasted through September, when the factors
described above, along with a cut in interest rates by the U.S. Federal Reserve
Board, prompted the European markets to advance once again.
PACIFIC BASIN
The Pacific Basin rose 2.4% in U.S. dollar terms during the annual period.
Australia reached a new, all-time record high in April, as investors anticipated
an interest rate cut there. New Zealand was one of the top performers in July,
as interest rates fell to seven month lows and bond yields dropped to more than
four year lows.
o HONG KONG, MALAYSIA, AND SINGAPORE RODE A PARTICULARLY BUMPY ROLLER COASTER.
-- Through the first half of the year, currency concerns, high local interest
rates, political turmoil in Indonesia, balance sheet deficits, and concerns
about a possible U.S. interest rate rise that could further hurt regional
economic growth all led to significant equity market declines. Although all
of the region's markets fell in August, Hong Kong actually fell the least,
placing it as the top performing market that month. Prospects for a rebound
in Asia's emerging economies grew gloomier, however, prompting Malaysia's
Prime Minister to tighten his grip on that nation's economy. It worked --
temporarily. Rising on domestic fund stock buying in response to interest
rate declines, Malaysia was the top performing market in September. Hong Kong
and Singapore also rallied in September, the former gaining after it
instituted policies to strengthen its defense of its dollar and the latter
after banks cut their prime lending rates, thereby relieving corporations'
debt burdens. Still, capital controls imposed on September 1st by the
Malaysian Central Bank resulted in the removal, as of September 30th, of
Malaysia from the MSCI EAFE Index.
Hong Kong and Singapore continued to rise through the fourth quarter of 1998,
as investors' confidence in the Southwest Pacific region returned after the
U.S. cut interest rates, the Japanese yen appreciated, and a major U.S.
brokerage firm increased its allocation to the region.
o THE JAPANESE EQUITY MARKET PUT IN A DISMAL YEAR, AS THE NATION SHOWED NO SIGN
OF BREAKING OUT OF ITS SLUMP IN A MEANINGFUL WAY. -- Japanese equities
initially rose during the first quarter, as the ruling political party
announced that its fiscal stimulus package was implemented in February, a
month earlier than expected. However, the market closed the quarter down,
with investors waiting for details of the government's proposed $124 billion
economic stimulus package. Once released, stocks fell even further, as the
package included no permanent tax cuts. The economy continued to weaken, as
unemployment hit postwar record highs, concerns about Japanese companies'
earnings continued, and the U.S. dollar weakened against the yen, falling to
its lowest levels in seven years. Bolstered by promises of tax reform and
expectations that the new government elected in July would take stronger
steps to stimulate the economy and resolve the banks' bad loan problems,
Japanese stocks rose in June and July.
However, the new government disappointed early. Japanese stocks fell in
August, and the market reached a twelve year low in September. With the yen
rallying in October and the government both proposing plans to recapitalize
the banks and also unveiling a package of tax cuts and public spending
projects, the market rose in November, only to be the worst performing market
once again in local terms in December. The Bank of Japan publicly stated that
they saw no change in the overall economy despite "bright signs" in some
areas.
INVESTMENT REVIEW(3)
<TABLE>
<CAPTION>
AVERAGE
ANNUAL
TOTAL
PERIODS ENDED DECEMBER 31, 1998 CUMULATIVE TOTAL RETURNS RETURNS
- --------------------------------- --------------------------- -------------
<S> <C> <C> <C>
One Since Since
year inception inception
- --------------------------------- ----- ----------- ---------
EAFE(R)(1) Equity Index
Fund(4) (inception 8/22/97) 21.60% 13.58% 9.82%
- --------------------------------- --------- ----------- ---------
MSCI EAFE Index(2) 20.00% 12.96% 9.57%
</TABLE>
MANAGER OUTLOOK
We remain positive about the European markets, with a few potential concerns.
We will, for instance, watch developments in Germany
3
<PAGE>
- ----------------------------------------------------------------------------
BT INSURANCE FUNDS TRUST EAFE(R) EQUITY INDEX FUND
Letter to Shareholders
- ----------------------------------------------------------------------------
and Italy in 1999 to see whether weakness in the industrial sectors in these
nations spreads. Also, while we expect growth in the Euro-zone to decelerate
only a little, to about 2.25% in 1999, the new European Central Bank is likely
to conclude that the downside risks have increased. Still, against a backdrop of
an economy operating well below capacity, favorable inflation prospects, and a
recently somewhat stronger currency, there is hope for further interest rate
cuts in Europe. In this context, and given the generally upbeat assessments of
Europe's longer-term prospects under the single currency, we believe equity
markets there are likely to perform strongly. In Asia, investors are gradually
edging back into the equity markets, but the ongoing malaise in Japan will
likely continue to hinder those markets.
Of course, as an index fund, designed to replicate as closely as possible,
before expenses, the broad diversification and total return of the MSCI EAFE(R)
Index with net dividends, we neither evaluate short-term fluctuations in the
Fund's performance nor manage according to a given outlook for the equity
markets or the economies in general. Still, we will continue monitoring economic
conditions and how they affect the financial markets.
/s/ Richard J. Vella
Richard J. Vella
PORTFOLIO MANAGER OF THE EAFE(R) EQUITY INDEX PORTFOLIO
December 31, 1998
- ----------
(1) The MSCI EAFE(R) Index is the exclusive property of Morgan Stanley. Morgan
Stanley Capital International (MSCI) is a service mark of Morgan Stanley
and has been licensed for use by Bankers Trust Company.
(2) The MSCI EAFE(R) Index is an unmanaged capitalization-weighted index
containing approximately 1,100 equity securities of companies located
outside of the United States. Investments cannot be made in an index.
(3) Foreign investing involves special risks, including currency risk,
increased volatility of foreign securities, and differences in auditing and
other financial standards.
(4) Past performance is not indicative of future results. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed,
may be worth more or less than their original cost. The Fund is not insured
by the FDIC and is not a deposit, obligation of, or guaranteed by Bankers
Trust Company. The Fund is subject to investment risks, including possible
loss of principal amount invested.
4
<PAGE>
- ----------------------------------------------------------------------------
BT INSURANCE FUNDS TRUST EAFE(R) EQUITY INDEX FUND
Letter to Shareholders (concluded)
- ----------------------------------------------------------------------------
[PIE CHART APPEARS BELOW WITH THE FOLLOWING INFORMATION:]
DIVERSIFICATION OF PORTFOLIO INVESTMENTS
United Kingdom 20%
Japan 18%
United States 11%
Other+ 11%
Germany 9%
France 9%
Switzerland 8%
Netherlands 6%
Italy 5%
Spain 3%
Australia 3%
+ Consists of countries less than 3%.
- ----------------------------------------------------------------------------
PERFORMANCE COMPARISON
Comparison of Change in
Value of a $10,000 Investment
in the EAFE Equity Index
Fund, with the MSCI EAFE(R)
Index from August 22, 1997
through December 31, 1998.
Average Annual Total Returns
for the Periods
Ended December 31, 1998
One year Since 8/22/97*
21.60% 9.62%
*The Fund's inception date.
Investment return and principal value
may fluctuate so that shares, when
redeemed, may be worth more or less
than their original cost.
[LINE GRAPH APPEARS BELOW WITH THE FOLLOWING PLOT POINTS:]
8/97 9/97 12/97 6/98 12/98
EAFE(R) Equity Index Fund PLEASE SUPPLY PLOT POINTS
MSCI EAFE(R) Index
Past performance is not indicative of future performance. The MSCI EAFE(R) Index
is unmanaged. Investments may not be made in an index. The Fund is not issued by
the FDIC and is not a deposit, obligation of or guaranteed by Bankers Trust
Company. The Fund is subject to investment risks, including possible loss of
principal amount invested.
5
<PAGE>
- ----------------------------------------------------------------------------
BT INSURANCE FUNDS TRUST EAFE(R) EQUITY INDEX FUND
Statement of Net Assets DECEMBER 31, 1998
- ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Description Value
- ------------- ------------------------------------------------- ----------------
<S> <C> <C>
COMMON STOCK - 89.61%
AUSTRALIA - 2.39%
6,529 Amcor Ltd. ...................................... $ 27,899
6,086 AMP Ltd. (a) .................................... 77,108
1,786 Australian Gas and Light Co., Ltd. .............. 12,864
4,501 Boral Ltd. ...................................... 6,399
1,017 Brambles Industries Ltd. ........................ 24,773
11,338 Broken Hill Proprietary Co., Ltd. ............... 83,507
6,735 Coca Cola Amatil Ltd. ........................... 25,093
5,180 Coles Myer Ltd. ................................. 27,140
3,600 CSR Ltd. ........................................ 8,802
12,474 Foster's Brewing Group Ltd. ..................... 33,787
7,410 General Property Trust .......................... 13,850
2,443 Gio Australia Holdings Ltd. ..................... 8,024
2,993 Lend Lease Corp., Ltd. .......................... 40,350
7,457 National Australia Bank Ltd. .................... 112,413
9,764 News Corporation, Ltd. .......................... 64,501
6,406 Normandy Mining Ltd. ............................ 5,928
1,158 Orica Ltd. ...................................... 6,025
4,100 Pacific Dunlop Ltd. ............................. 6,633
3,110 Pioneer International Ltd. ...................... 6,575
2,410 Rio Tinto Ltd. .................................. 28,584
1,925 Southcorp Holdings Ltd. ......................... 6,141
28,262 Telstra Corp., Ltd. ............................. 132,144
8,709 Westfield Trust ................................. 19,213
9,827 Westpac Banking Corp., Ltd. ..................... 65,760
5,497 WMC Ltd. ........................................ 16,573
---------
860,086
---------
AUSTRIA - 0.22%
200 Austrian Airlines Osterreichische
Luftverkehrs AG ................................. 7,165
260 Bank Austria AG ................................. 13,222
15 Bank Austria AG ................................. 763
40 Generali Holding Vienna AG ...................... 9,826
110 OMV AG .......................................... 10,368
140 Oesterreichische Elektrizitaetswirtschafts
AG-A ............................................ 21,400
70 VA Technologie AG ............................... 6,066
50 Wienerberger Baustoffindustrie AG ............... 9,946
---------
78,756
---------
BELGIUM - 1.72%
76 Barco N.V. ...................................... 21,325
14 Colruyt SA ...................................... 11,663
171 Delhaize Le Lion SA ............................. 15,037
242 Electrabel SA ................................... 105,704
241 Fortis (B) ...................................... 86,794
48 Generale de Banque SA ........................... 22,424
120 Groupe Bruxelles Lambert SA ..................... 24,299
1,387 KBC Bancassurance Holding ....................... 109,131
105 PetroFina SA .................................... 47,838
25 D'Ieteren SA .................................... 13,704
500 Solvay SA ....................................... 37,460
408 Tractebel ....................................... 78,720
7 UCB SA .......................................... 42,927
---------
617,026
---------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
- ------------- ------------------------------------------------- ----------------
<S> <C> <C>
DENMARK - 0.83%
200 Carlsberg AS-A .................................. $ 11,627
200 Carlsberg AS-B .................................. 11,565
4 A/S Dampskibsselskabet Svendborg ................ 40,539
301 Danisco AS ...................................... 16,317
300 Den Danske Bank ................................. 40,303
5 D/S 1912-B ...................................... 34,961
147 ISS International Service Systems AS-B .......... 9,562
344 Novo Nordisk AS-B ............................... 45,404
526 Tele Danmark AS-B ............................... 70,996
200 Unidanmark AS-A ................................. 18,070
---------
299,344
---------
FINLAND - 1.34%
700 Kemira Oyj ...................................... 5,011
500 Kesko Oyj ....................................... 7,452
4,500 Merita Ltd. ..................................... 28,418
200 Metra Oyj-B ..................................... 3,452
2,100 Nokia Oyj-A ..................................... 255,347
600 Nokia Oyj-K ..................................... 72,956
600 Outokumpu Oyj-A ................................. 5,507
200 Pohjola Group Insurance Corp. ................... 10,904
300 Sampo Insurance Company Ltd.-A .................. 11,385
2,500 Sonera Group Oyj (a) ............................ 44,127
1,400 UPM-Kymmene Oyj ................................. 38,988
---------
483,547
---------
FRANCE - 8.65%
162 Accor SA ........................................ 35,060
964 Alcatel Alsthom ................................. 117,935
1,682 AXA-UAP ......................................... 243,681
1,021 Banque Nationale de Paris ....................... 84,039
155 Eridania Beghin-Say SA .......................... 26,808
244 BIC ............................................. 13,529
145 Bouygues ........................................ 29,877
147 Canal Plus ...................................... 40,096
355 Cap Gemini Sogeti ............................... 56,955
174 Carrefour Supermarche SA ........................ 131,301
409 Compagnie de Saint Gobain ....................... 57,718
818 Compagnie Financiere de Paribas-A ............... 71,061
334 Danone .......................................... 95,582
1,281 Elf Aquitaine SA ................................ 148,010
50 Essilor International ........................... 19,675
320 Etablissements Economiques du Casino
Guichard-Perrachon SA ........................... 33,311
3,757 France Telecom SA ............................... 298,356
457 Lafarge SA ...................................... 43,403
259 Lagardere SCA ................................... 11,002
401 L'Air Liquide ................................... 73,515
151 Legrand SA ...................................... 39,998
315 L'OREAL ......................................... 227,616
418 LVMH (Moet-Hennessy Louis Vuitton) .............. 82,688
651 Michelin-B ...................................... 26,024
127 Pechiney SA ..................................... 4,146
329 Pernod Ricard ................................... 21,361
539 Pinault-Printemps-Redoute SA .................... 102,960
92 Promodes ........................................ 66,873
267 PSA Peugeot Citroen ............................. 41,308
</TABLE>
See Notes to Financial Statements
6
<PAGE>
- ----------------------------------------------------------------------------
BT INSURANCE FUNDS TRUST EAFE(R) EQUITY INDEX FUND
Statement of Net Assets DECEMBER 31, 1998
- ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Description Value
- ------------- -------------------------------------------------- ----------------
<S> <C> <C>
1,648 Rhone-Poulenc-A .................................. $ 84,773
463 Sanofi SA ........................................ 76,187
775 Schneider SA ..................................... 46,991
115 Simco SA ......................................... 10,428
465 Societe Generale ................................. 75,268
186 Sodexho Alliance SA .............................. 41,585
680 Suez Lyonnaise des Eaux .......................... 139,624
73 Technip .......................................... 6,868
918 Thomson CSF ...................................... 39,406
1,082 Total SA-B ....................................... 109,535
600 Usinor Sacilor ................................... 6,659
445 Valeo SA ......................................... 35,017
743 Vivendi .......................................... 192,694
---------
3,108,923
---------
GERMANY - 8.98%
200 Adidas AG ........................................ 21,724
1,116 Allianz AG ....................................... 409,203
200 AMB Aachener & Muenchener Beteiligungs
AG ............................................... 29,406
50 Axa Colonia Konzrn AG ............................ 5,671
2,900 BASF AG .......................................... 110,685
3,400 Bayer AG ......................................... 141,909
1,890 Bayerische Hypotheken-und Wechsel-Bank
AG ............................................... 148,015
250 Beiersdorf AG .................................... 17,253
350 Continental AG ................................... 9,662
4,388 DaimlerChrystler AG (a) .......................... 433,166
250 Degussa AG ....................................... 13,735
2,200 Deutsche Bank AG ................................. 129,451
1,850 Deutsche Lufthansa AG ............................ 40,856
9,900 Deutsche Telekom AG .............................. 325,574
2,000 Dresdner Bank AG ................................. 84,016
250 Heidelberger Zement AG ........................... 19,503
250 Hochtief AG ...................................... 9,752
50 MAN AG ........................................... 14,703
1,750 Mannesmann AG .................................... 200,588
750 Merck KGaA ....................................... 33,756
1,050 Metro AG ......................................... 83,806
362 Muenchener Rueckversicherungs-
Gesellschaft AG .................................. 175,314
100 Preussag AG ...................................... 45,189
2,000 RWE AG ........................................... 109,521
250 SAP AG ........................................... 108,020
300 Schering AG ...................................... 37,672
50 SGL Carbon AG .................................... 3,001
2,650 Siemens AG ....................................... 170,957
200 Thyssen AG ....................................... 37,099
2,200 VEBA AG .......................................... 131,629
100 Viag AG .......................................... 58,631
882 Volkswagen AG .................................... 70,397
---------
3,229,864
---------
HONG KONG - 1.87%
4,331 Bank of East Asia Ltd. ........................... 7,547
21,000 Cathay Pacific Airways ........................... 20,871
11,000 Cheung Kong Holdings Ltd. ........................ 79,154
12,000 CLP Holdings Ltd. ................................ 59,786
8,800 Hang Seng Bank Ltd. .............................. 78,657
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
- ------------- -------------------------------------------------- ----------------
<S> <C> <C>
17,900 Hong Kong and China Gas Co., Ltd. ................ $ 22,757
54,000 Hong Kong Telecommunications Ltd. ................ 94,442
18,000 Hutchison Whampoa Ltd. ........................... 127,201
4,000 Johnson Electric Holdings Ltd. ................... 10,274
11,113 New World Development Co., Ltd. .................. 27,970
10,000 Shangri-La Asia Ltd. ............................. 8,519
11,072 Sun Hung Kai Properties Ltd. ..................... 80,743
7,000 Swire Pacific Ltd.-A ............................. 31,352
2,000 Television Broadcasts Ltd. ....................... 5,163
12,000 Wharf Holdings Ltd. .............................. 17,502
---------
671,938
---------
IRELAND - 0.46%
4,421 Allied Irish Banks Plc. .......................... 79,069
2,156 CRH Plc. ......................................... 36,875
1,305 Independent Newpapers Plc. ....................... 5,338
1,869 Irish Life Plc. .................................. 17,512
3,447 Jefferson Smurfit Group Plc. ..................... 6,203
1,068 Kerry Group Plc.-A ............................... 14,455
933 Ryanair Holdings Plc. (a) ........................ 6,661
---------
166,113
---------
ITALY - 4.83%
9,313 Alitalia SPA (a) ................................. 34,358
4,633 Assicurazioni Generali ........................... 193,339
9,324 Banca Commerciale Italiana ....................... 64,286
9,709 Banca Intesa SPA (a) ............................. 58,221
8,618 Benetton Group SPA ............................... 17,356
22,595 Credito Italiano SPA ............................. 133,852
4,476 Edison SPA ....................................... 52,693
35,683 ENI SPA .......................................... 233,074
19,227 Fiat SPA ......................................... 66,747
7,991 Instituto Bancario San Paolo di Torino ........... 141,124
17,860 Istituto Nazionale delle Assicurazioni (INA)...... 47,149
2,884 Italgas SPA ...................................... 15,602
7,286 Mediaset SPA ..................................... 59,048
1,887 Mediobanca SPA ................................... 26,192
25,031 Montedison SPA ................................... 33,229
12,589 Olivetti Group SPA (a) ........................... 43,779
6,909 Parmalat Finanziaria SPA ......................... 13,204
13,305 Pirelli SPA ...................................... 42,608
795 Rinascente SPA ................................... 8,172
1,847 Riunione Adriatica di Sicurta SPA ................ 26,754
11,016 Telecom Italia Mobile RCN ........................ 51,834
29,550 Telecom Italia Mobile SPA ........................ 218,035
1,179 Telecom Italia RCN ............................... 7,416
16,545 Telecom Italia SPA ............................... 141,090
17860 Unione Immobiliare SPA ........................... 9,311
---------
1,738,473
---------
JAPAN - 18.05%
1,000 Advantest Corp. .................................. 63,360
3,000 Ajinomoto Co., Inc. .............................. 31,857
1,000 Alps Electric Co. ................................ 18,362
10,000 Asahi Bank Ltd. .................................. 36,636
3,000 Asahi Breweries Ltd. ............................. 44,202
7,000 Asahi Chemical Industry Co., Ltd. ................ 33,388
5,000 Asahi Glass Co., Ltd. ............................ 31,016
21,000 Bank of Tokyo-Mitsubishi Ltd. .................... 217,424
</TABLE>
See Notes to Financial Statements
7
<PAGE>
- ----------------------------------------------------------------------------
BT INSURANCE FUNDS TRUST EAFE(R) EQUITY INDEX FUND
Statement of Net Assets DECEMBER 31, 1998
- ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Description Value
- ------------- --------------------------------------------------- ----------------
<S> <C> <C>
3,000 Bank of Yokohama Ltd. ............................. $ 7,194
4,000 Bridgestone Corp. ................................. 90,792
4,000 Canon, Inc. ....................................... 85,483
2,000 Casio Computer Co., Ltd. .......................... 14,760
2,000 Chiba Bank Ltd. ................................... 7,947
4,000 Chichibu Onoda Cement Corp. ....................... 10,017
1,000 Citizen Watch Co., Ltd. ........................... 6,017
500 Credit Saison Co., Ltd. ........................... 12,322
4,000 Dai Nippon Printing Co., Ltd. ..................... 63,785
2,000 Daiei, Inc. ....................................... 5,433
1,000 Daiichi Pharmaceutical ............................ 16,893
6,000 Dainippon Ink & Chemicals, Inc. ................... 16,406
3,000 Daiwa House Industry Co., Ltd. .................... 31,937
6,000 Daiwa Securities Co., Ltd. ........................ 20,495
4,000 Denso Corp. ....................................... 73,979
18 East Japan Railway Co. ............................ 100,509
2,000 Ebara Corp. ....................................... 17,220
2,000 Eisai Co., Ltd. ................................... 38,936
1,400 Fanuc ............................................. 47,945
15,000 Fuji Bank Ltd. .................................... 55,219
2,000 Fuji Photo Film Co. ............................... 74,333
8,000 Fujitsu Ltd. ...................................... 106,544
2,000 Furukawa Electric Co., Ltd. ....................... 6,814
4,000 Gunma Bank ........................................ 31,751
6,000 Hankyu Corp. ...................................... 26,335
16,000 Hitachi Ltd. ...................................... 99,111
3,000 Hitachi Zosen Corp. ............................... 4,141
4,000 Honda Motor Co., Ltd. ............................. 131,322
1,000 House Foods Corp. ................................. 16,902
13,000 Industrial Bank of Japan .......................... 59,935
4,000 Itochu Corp. ...................................... 7,716
2,000 Ito-Yokado Co., Ltd. .............................. 139,817
8,000 Japan Airlines .................................... 21,096
5,000 Japan Energy Corp. ................................ 4,734
3,000 Joyo Bank ......................................... 11,734
2,000 JUSCO Co. ......................................... 40,441
5,000 Kajima Corp. ...................................... 13,053
1,000 Kaneka Corporation ................................ 7,495
4,600 Kansai Electric Power Co., Inc. ................... 100,748
3,000 Kao Corp. ......................................... 67,696
8,000 Kawasaki Heavy Industries Ltd. .................... 18,760
14,000 Kawasaki Steel Corp. .............................. 20,937
2,000 Kinden Corp. ...................................... 30,406
7,000 Kinki Nippon Railway .............................. 37,476
5,000 Kirin Brewery Co., Ltd. ........................... 63,714
1,000 Kokuyo ............................................ 13,460
5,000 Komatsu Ltd. ...................................... 26,238
7,000 Kubota Corp. ...................................... 20,875
2,000 Kuraray Co., Ltd. ................................. 22,070
1,000 Kurita Water Industries ........................... 14,672
1,000 Kyocera Corp. ..................................... 52,830
2,000 Kyowa Hakko Kogyo ................................. 9,876
2,000 Marui Co., Ltd. ................................... 38,494
10,000 Matsushita Electric Industrial Co., Ltd. .......... 176,895
2,000 Minabea Co., Ltd. ................................. 22,902
10,000 Mitsubishi Chemical Corp. ......................... 21,061
7,000 Mitsubishi Corp. D305 ............................. 40,264
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
- ------------- --------------------------------------------------- ----------------
<S> <C> <C>
9,000 Mitsubishi Electric Corp. ......................... $ 28,273
7,000 Mitsubishi Estate Co., Ltd. ....................... 62,749
16,000 Mitsubishi Heavy Industries Ltd. .................. 62,298
4,000 Mitsubishi Materials Corp. ........................ 6,725
7,000 Mitsubishi Trust & Banking Corp. .................. 45,033
7,000 Mitsui & Co. ...................................... 39,087
5,000 Mitsui Fudosan Co., Ltd. .......................... 37,830
4,000 Mitsui Marine & Fire Insurance Co., Ltd. .......... 21,061
3,000 Mitsui Trust & Banking Co., Ltd. .................. 3,425
2,000 Mitsukoshi Ltd. ................................... 5,310
1,000 Murata Manufacturing Co., Ltd. .................... 41,503
1,000 Mycal Corp. ....................................... 5,964
8,000 NEC Corp. ......................................... 73,625
2,000 NGK Insulators .................................... 25,786
1,000 Nikon Corp. ....................................... 9,734
1,000 Nippon Comsys Corp. ............................... 13,619
5,000 Nippon Express Co., Ltd. D322 ..................... 28,140
2,000 Nippon Meat Packers, Inc. ......................... 32,211
6,000 Nippon Oil Co., Ltd. .............................. 20,919
5,000 Nippon Paper Industries Co. ....................... 22,742
34,000 Nippon Steel Corp. ................................ 61,679
58 Nippon Telegraph & Telephone Corp. ................ 447,555
6,000 Nippon Yusen Kabushiki Kaisha ..................... 18,955
10,000 Nissan Motor Co., Ltd. ............................ 30,618
1,000 Nissin Food Products Co., Ltd. .................... 25,176
1,000 Nitto Denko Corp. ................................. 16,636
10,000 NKK Corp. ......................................... 6,814
9,000 Nomura Securities Co., Ltd. ....................... 78,448
3,000 NSK, Ltd. ......................................... 11,203
4,000 Obayashi Corp. .................................... 19,185
2,000 Odakyu Electric Railway ........................... 6,991
7,000 Oji Paper Co., Ltd. ............................... 36,361
2,000 Omron Corp. ....................................... 27,397
1,000 Onward Kashiyama Co., Ltd. ........................ 13,433
7,000 Osaka Gas Co., Ltd. ............................... 24,096
1,000 Pioneer Electronic Corp. .......................... 16,769
20,000 Sakura Bank Ltd. .................................. 45,839
2,000 Sankyo Co., Ltd. .................................. 43,715
7,000 Sanyo Electric Co., Ltd. .......................... 21,680
2,000 Sekisui Chemical Co., Ltd. ........................ 13,451
3,000 Sekisui House Ltd. ................................ 31,724
5,000 Sharp Corp. ....................................... 45,087
1,000 Shimano, Inc. ..................................... 25,795
5,000 Shimizu Corp. ..................................... 16,769
2,000 Shin-Etsu Chemical Co., Ltd. ...................... 48,139
2,000 Shiseido Co., Ltd. ................................ 25,698
4,000 Shizuoka Bank ..................................... 49,378
1,800 Sony Corp. ........................................ 131,092
14,000 Sumitomo Bank Ltd. ................................ 143,710
8,000 Sumitomo Chemical Co. ............................. 31,149
5,000 Sumitomo Corp. .................................... 24,335
4,000 Sumitomo Electric Industries ...................... 44,989
3,000 Sumitomo Marine & Fire Insurance Co. .............. 19,008
14,000 Sumitomo Metal Industries ......................... 15,982
2,000 Sumitomo Metal Mining Co. ......................... 6,495
3,000 Taisei Corp. ...................................... 5,761
2,000 Taisho Pharmaceutical Co. ......................... 55,042
</TABLE>
See Notes to Financial Statements
8
<PAGE>
- ----------------------------------------------------------------------------
BT INSURANCE FUNDS TRUST EAFE(R) EQUITY INDEX FUND
Statement of Net Assets DECEMBER 31, 1998
- ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Description Value
- ------------- -------------------------------------------------- ----------------
<S> <C> <C>
1,000 Takashimaya Co., Ltd. ............................ $ 8,416
4,000 Takeda Chemical Industries ....................... 153,976
5,000 Teijin Ltd. ...................................... 18,406
3,000 Tobu Railway Co., Ltd. ........................... 8,761
100 Toho Co. ......................................... 13,699
2,600 Tohoku Electric Power ............................ 46,016
11,000 Tokai Bank ....................................... 51,980
7,000 Tokio Marine & Fire Insurance Co. ................ 83,625
1,000 Tokyo Dome Corp. ................................. 5,327
6,100 Tokyo Electric Power Co. ......................... 150,604
1,000 Tokyo Electron Ltd. .............................. 37,963
17,000 Tokyo Gas Co., Ltd. .............................. 44,679
5,000 Tokyu Corp. ...................................... 13,141
4,000 Toppan Printing Co., Ltd. ........................ 48,847
6,000 Toray Industries, Inc. ........................... 31,326
1,000 Tostem Corp. ..................................... 19,822
2,000 Toto Ltd. ........................................ 16,052
1,000 Toyo Seikan Kaisha ............................... 16,973
2,000 Toyoda Automatic Loom Works ...................... 35,379
17,000 Toyota Motor Corp. ............................... 461,838
1,000 Uny Co., Ltd. .................................... 18,274
1,000 Wacoal Corp. ..................................... 12,858
1,000 Yamaha Corp. ..................................... 10,354
2,000 Yamanouchi Pharmaceutical Co., Ltd. .............. 64,422
2,000 Yamato Transport Co., Ltd. ....................... 27,963
1,000 Yamazaki Baking Co., Ltd. ........................ 13,035
3,000 Yasuda Trust & Banking ........................... 2,310
---------
6,490,416
---------
NETHERLANDS - 5.90%
6,711 ABN Amro Holdings NV ............................. 141,100
2,647 AEGON NV ......................................... 324,905
1,341 Akzo Nobel ....................................... 61,029
72 ASR Verzekeringsgroep NV ......................... 6,515
3,416 Elsevier NV ...................................... 47,821
172 Getronics NV ..................................... 8,514
1,535 Heineken NV ...................................... 92,327
4,183 ING Groep NV ..................................... 254,939
2,544 Koninklijke Ahold NV ............................. 93,976
2,101 Koninklijke KPN NV ............................... 105,102
156 Oce NV ........................................... 5,605
1,749 Philips Electronics NV ........................... 117,301
9,641 Royal Dutch Petroleum Company .................... 479,818
2,247 TNT Post Group NV ................................ 72,346
2,941 Unilever NV-CVA .................................. 251,254
280 Wolters Kluwer NV-CVA ............................ 59,884
---------
2,122,436
---------
NEW ZEALAND - 0.15%
12,304 Brierley Investments Ltd. ........................ 2,784
6,498 Carter Holt Harvey Ltd. .......................... 5,813
2,801 Lion Nathan Ltd. ................................. 7,119
8,619 Telecom Corp. of New Zealand Ltd. ................ 37,416
---------
53,132
---------
NORWAY - 0.35%
300 Bergesen d.y. ASA-A .............................. 3,593
1,950 Christiania Bank Og Kreditkasse .................. 6,775
3,600 Den Norske Bank ASA .............................. 12,460
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
- ------------- -------------------------------------------------- ----------------
<S> <C> <C>
150 Kvaerner ASA-A ................................... $ 2,961
400 Merkantildata ASA ................................ 3,948
1,150 Norsk Hydro ASA .................................. 38,669
200 Norske Skogsindustrier ASA 'A' Free .............. 5,817
1,150 Orkla ASA-A ...................................... 17,178
600 Petroleum-Geo Services ASA (a) ................... 7,660
350 Schibsted ASA .................................... 4,468
2,000 Storebrand ASA-A (a) ............................. 15,135
200 Tomra Systems ASA ................................ 6,580
---------
125,244
---------
PORTUGAL - 0.60%
1,200 Banco Comercial Portugues, SA .................... 36,909
662 Banco Espirito Santo e Comercial de
Lisboa, SA ....................................... 20,556
300 BPI-SGPS, SA ..................................... 10,185
300 Brisa Auto-Estradas de Portugal, SA .............. 17,667
500 Cimpor-Cimentos de Portugal, SA .................. 15,968
2,700 Electricidade de Portugal, SA .................... 59,473
300 Jeronimo Martins, SGPS, SA ....................... 16,419
700 Portugal Telecom, SA ............................. 32,109
100 Sonae Investimentos, SGPS, SA .................... 4,864
---------
214,150
---------
SINGAPORE - 0.61%
3,000 City Developments Ltd. ........................... 12,992
5,000 DBS Land Ltd. .................................... 7,359
2,600 Development Bank of Singapore Ltd. ............... 23,465
5,000 Oversea-Chinese Banking Corp., Ltd. .............. 33,919
5,000 Singapore Airlines Ltd. .......................... 36,644
2,000 Singapore Press Holdings Ltd. .................... 21,805
48 Singapore Press Holdings Ltd. - 100 .............. 513
19,000 Singapore Technologies Enginnering Ltd. .......... 17,723
30,000 Singapore Telecommunications Ltd. ................ 45,790
3,000 United Overseas Bank Ltd. ........................ 19,261
---------
219,471
---------
SPAIN - 3.05%
2,596 Argentaria, Caja Postal y Banco
Hipotechario de Espana SA ........................ 67,128
1,503 Autopistas Concesionaria Espanola SA ............. 24,958
9,665 Banco Bilbao Vizcaya SA .......................... 151,313
3,813 Banco Central Hispanoamericano (BCH) ............. 45,208
5,285 Banco Santander SA ............................... 104,867
135 Corporacion Financiera Alba SA ................... 22,513
311 Dragados & Construcciones SA ..................... 11,445
4,551 Endesa SA ........................................ 120,404
366 Fomento de Construcciones y
Contratas SA ..................................... 27,169
723 Gas Natural SDG, SA .............................. 78,598
4,338 Iberdrola SA...................................... 81,040
1,429 Repsol SA ........................................ 76,115
313 Sociedad General de Aguas de Barcelona
SA ............................................... 20,922
998 Tabacalera SA-A .................................. 25,140
4,775 Telefonica SA .................................... 212,006
592 Union Electrica Fenosa SA ........................ 10,226
555 Vallehermoso SA .................................. 7,927
314 Zaradoya Otis SA ................................. 9,788
---------
1,096,767
---------
</TABLE>
See Notes to Financial Statements
9
<PAGE>
- ----------------------------------------------------------------------------
BT INSURANCE FUNDS TRUST EAFE(R) EQUITY INDEX FUND
Statement of Net Assets DECEMBER 31, 1998
- ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Description Value
- ------------- ------------------------------------------------ ----------------
<S> <C> <C>
SWEDEN - 2.43%
4,400 ABB AB-A ....................................... $ 46,844
400 AGA AB-A ....................................... 5,292
6,500 Astra AB-A ..................................... 132,404
1,700 Astra AB-B ..................................... 34,524
900 Atlas Copco AB-A ............................... 19,718
600 Drott AB (a) ................................... 5,502
1,800 Electrolux AB-Ser. B ........................... 30,906
8,700 Ericsson Telecommunications-B .................. 206,665
2,000 ForeningsSparbanken AB ......................... 51,694
1,100 Hennes & Mauritz AB-B .......................... 89,627
200 Netcom Systems AB (a) .......................... 8,123
1,000 Sandvik AB-A ................................... 17,354
1,600 Securitas AB-B ................................. 24,813
3,000 Skandia Forsakrings AB ......................... 45,786
3,400 Skandinaviska Enskilda Banken (S E B) .......... 35,780
600 Skanska AB-B ................................... 16,616
1,000 Svenska Cellulosa AB-B ......................... 21,785
1,000 Svenska Handelsbanken-A ........................ 42,094
300 Volvo AB-A ..................................... 6,702
1,400 Volvo AB-B ..................................... 32,050
---------
874,279
---------
SWITZERLAND - 7.66%
40 ABB AG-Bearer .................................. 46,888
80 Adecco SA ...................................... 36,520
30 Alusuisse-Lonza Holdings AG .................... 34,947
1,260 Credit Suisse Group ............................ 197,233
30 Holderbank Financiere Glarus AG-B .............. 35,515
30 Holderbank Financiere Glarus AG-Reg ............ 7,514
180 Nestle SA ...................................... 391,846
270 Novartis AG-Registered ......................... 530,761
25 Novartis AG-Bearer ............................. 49,144
8 Roche Holdings AG-Bearer ....................... 144,885
32 Roche Holdings AG-Genusschine .................. 390,477
50 SAirGroup ...................................... 12,414
65 Schweizerische Rueckversicherungs-
Gesellschaft ................................... 169,468
20 Sulzer AG ...................................... 12,173
300 Swisscom AG (a) ................................ 125,592
100 The Swatch Group AG ............................ 14,980
711 UBS AG ......................................... 218,380
284 Zurich Allied AG ............................... 210,457
165 Zurich Versicherungs-Gesellschaft .............. 123,735
---------
2,752,929
---------
UNITED KINGDOM - 19.52%
6,549 Abbey National Plc. ............................ 140,138
7,043 Allied Zurich AG (a) ........................... 104,973
525 Anglian Water Plc. ............................. 7,280
1,422 Arjo Wiggins Appleton Plc. ..................... 2,613
4,477 Associated British Foods Plc. .................. 42,317
5,501 BAA Plc. ....................................... 64,161
6,835 Barclays Plc. .................................. 147,280
4,098 Bass Plc. ...................................... 59,619
1,382 BBA Group Plc. ................................. 8,605
871 Berkley Group Plc. ............................. 6,357
18,284 BG Plc. ........................................ 115,292
3,624 Blue Circle Industries Plc. .................... 18,679
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
- ------------- ------------------------------------------------ ----------------
<S> <C> <C>
3,129 BOC Group Plc. ................................. $ 44,715
4,524 Boots Co. Plc. ................................. 76,986
2,675 BPB Plc. ....................................... 9,562
9,251 British Aerospace Plc. ......................... 78,367
6,454 British Airways Plc. ........................... 43,486
7,043 British American Tobacco Plc. .................. 61,883
2,369 British Land Co. Plc. .......................... 17,607
26,711 British Petroleum Co. Plc. ..................... 398,595
8,714 British Sky Broadcasting Group Plc. ............ 66,139
6,485 British Steel Plc. ............................. 9,596
29,643 British Telecommunications Plc. ................ 446,285
21,149 BTR Plc. ....................................... 43,603
2,725 Bunzl Plc. ..................................... 10,670
847 Burmah Castrol Plc. ............................ 12,160
9,266 Cable & Wireless Plc. .......................... 113,851
5,043 Cadbury Schweppes Plc. ......................... 85,944
2,125 Carlton Communications Plc. .................... 19,538
14,759 Centrica Plc. (a) .............................. 29,692
6,186 CGU Plc. ....................................... 96,783
4,210 Compass Group Plc. ............................. 48,193
16,244 Diageo Plc. .................................... 184,735
865 Electrocomponents Plc. ......................... 5,767
2,164 EMI Group Plc. ................................. 14,464
12,958 General Electric Co. Plc. ...................... 116,880
2,968 GKN Plc. ....................................... 39,355
16,263 Glaxo Wellcome Plc. ............................ 559,181
4,769 Granada Group Plc. ............................. 84,248
3,004 Great Universal Stores Plc. .................... 31,641
2,193 Guardian Royal Exchange Plc. ................... 12,269
11,288 Halifax Plc. ................................... 160,091
3,762 Hanson Plc. .................................... 29,852
8,055 HSBC Holdings Plc. ............................. 203,568
4,518 HSBC Holdings Plc. (75P) ....................... 122,443
2,904 Imperial Chemical Industries Plc. .............. 25,156
855 Jarvis Plc. .................................... 9,475
7,140 Kingfisher Plc. ................................ 77,223
4,290 Ladbroke Group Plc. ............................ 17,226
2,668 Land Securities Plc. ........................... 34,334
2,064 Lasmo Plc. (a) ................................. 3,432
6,253 Legal & General Group Plc. ..................... 81,145
23,989 Lloyds TSB Group Plc. .......................... 341,020
5,330 LucasVarity Plc. ............................... 17,768
13,335 Marks & Spencer Plc. ........................... 91,402
2,337 MEPC Plc. ...................................... 15,737
1,561 Misys Plc. ..................................... 11,362
6,043 National Grid Group Plc. ....................... 48,202
4,907 National Power Plc. ............................ 42,262
698 Next Plc. ...................................... 5,733
3,344 Pearson Plc. ................................... 66,330
3,611 Peninsular and Oriental Steam Navigation
Company ........................................ 42,657
587 Provident Financial Plc. (a) ................... 8,471
8,931 Prudential Corp. Plc. .......................... 134,756
2,674 Railtrack Group Plc. ........................... 69,846
1,754 Rank Group Plc. ................................ 6,751
3,400 Reed International Plc. ........................ 26,569
13,807 Rentokil Initial Plc. .......................... 103,992
7,402 Reuters Holdings Plc. .......................... 77,657
</TABLE>
See Notes to Financial Statements
10
<PAGE>
- ----------------------------------------------------------------------------
BT INSURANCE FUNDS TRUST EAFE(R) EQUITY INDEX FUND
Statement of Net Assets DECEMBER 31, 1998
- ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Description Value
- ----------- -------------------------------------------- -------------
<S> <C> <C>
1,140 Rexam Plc. ................................. $ 3,213
5,800 Rio Tinto Plc. ............................. 67,407
1,460 RMC Group Plc. ............................. 19,978
6,648 Rolls-Royce Plc. ........................... 27,523
3,383 Royal Bank of Scotland Group Plc. .......... 53,998
7,902 Royal & Sun Alliance Insurance
Group Plc. ................................. 64,476
4,795 Safeway Plc. ............................... 24,077
9,258 Sainsbury (J.) Plc. ........................ 74,155
1,500 Schroders Plc. ............................. 27,359
6,241 Scottish Power Plc. ........................ 64,076
3,504 Scottish & Newcastle Plc. .................. 40,665
1,063 Scottish & Southern Energy Plc. ............ 11,965
10,603 Siebe Plc. ................................. 41,781
25,658 SmithKline Beechman Plc. ................... 358,347
851 Smiths Industries Plc. ..................... 12,133
3,659 Stagecoach Holdings Plc. ................... 14,558
914 Tate & Lyle Plc. ........................... 5,091
30,031 Tesco Plc. ................................. 85,507
1,246 Thames Water Plc. .......................... 23,824
948 TI Group Plc. .............................. 5,103
14,860 Unilever Plc. .............................. 166,525
2,352 United Utilities Plc. ...................... 32,575
14,730 Vodafone Group Plc. ........................ 239,036
3,356 Williams Holding Plc. ...................... 19,041
2,166 Wolseley Plc. .............................. 13,685
3,854 Zeneca Group Plc. .......................... 167,694
----------
7,017,761
----------
TOTAL COMMON STOCK (Cost $28,972,369) 32,220,655
----------
PREFERRED STOCK - 0.55%
AUSTRALIA - 0.15%
8,979 News Corp. Ltd. ............................ 54,638
----------
AUSTRIA - 0.02%
160 Bank Austria AG ............................ 8,137
----------
GERMANY - 0.34%
550 RWE AG ..................................... 20,068
200 SAP AG-Vorzug .............................. 95,442
132 Volkswagen AG .............................. 6,575
----------
122,085
----------
ITALY - 0.03%
5,404 Fiat SPA ................................... 10,410
----------
UNITED KINGDOM - 0.01%
1,490 MEPC Plc., Class B ......................... 2,242
----------
TOTAL PREFERRED STOCK (Cost $183,874) 197,512
----------
RIGHTS & WARRANTS - 0.01%
FRANCE - 0.00%
3 AXA-UAP .................................... 77
----------
SPAIN - 0.01%
4,775 Telefonica SA (a) .......................... 4,233
----------
TOTAL RIGHTS AND WARRANTS (Cost $0) 4,310
----------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Description Value
- ----------- ------------------------------------------------ ---------------
<S> <C> <C>
SHORT TERM INSTRUMENTS (B) - 11.31%
U.S.A. - 11.31%
$ 534,000 U.S. Treasury Bill, 4.34%, 01/07/1999 .......... $ 533,657
1,255,000 U.S. Treasury Bill, 4.35%, 01/21/1999 .......... 1,252,017
250,000 U.S. Treasury Bill, 4.39%, 02/04/1999 (c). 248,963
450,000 U.S. Treasury Bill, 4.35%, 02/11/1999 .......... 447,785
90,000 U.S. Treasury Bill, 4.30%, 02/18/1999 .......... 89,484
25,000 U.S. Treasury Bill, 4.30%, 02/25/1999 .......... 24,836
713,000 U.S. Treasury Bill, 4.37%, 03/11/1999 .......... 707,325
770,000 U.S. Treasury Bill, 4.39%, 04/01/1999 .......... 761,884
-----------
TOTAL SHORT TERM INSTRUMENTS (Cost $4,065,308) 4,065,951
-----------
TOTAL INVESTMENTS (Cost $33,221,551).............. 101.48% 36,488,428
LIABILITIES IN EXCESS OF OTHER ASSETS...............(1.48)% (532,828)
-----------
NET ASSETS 100.00% $35,955,600
===========
</TABLE>
- ---------------------
(a) Non-income producing security.
(b) Average yield at time of purchase.
(c) Pledged as collateral for open futures contracts.
<TABLE>
<CAPTION>
INDUSTRY DIVERSIFICATION (AS A PERCENTAGE OF NET ASSETS):
(UNAUDITED)
% OF NET ASSETS
----------------
<S> <C>
Banks ......................................... 12.5%
Capital Equipment ............................. 2.9
Chemicals ..................................... 2.1
Consumer Goods & Services ..................... 4.8
Construction .................................. 4.2
Electronics ................................... 3.4
Financial Services ............................ 2.8
Food & Beverage ............................... 4.9
Insurance ..................................... 6.8
Oil & Gas ..................................... 4.2
Other ......................................... 14.9
Pharmaceuticals ............................... 9.5
Real Estate ................................... 1.7
Retail ........................................ 5.5
Telecommunications ............................ 10.6
Transportation ................................ 6.7
Utilities ..................................... 4.0
------
Total Investments ............................. 101.5%
Liabilities in Excess of Other Assets ......... ( 1.5)
------
100.00%
======
</TABLE>
- ---------------------
* No one industry represents more than 2% of Portfolio holdings.
See Notes to Financial Statements
11
<PAGE>
- ----------------------------------------------------------------------------
BT INSURANCE FUNDS TRUST EAFE(R) EQUITY INDEX FUND
Statement of Net Assets DECEMBER 31, 1998
- ----------------------------------------------------------------------------
At December 31, 1998, the Fund's open futures contracts were as follows:
<TABLE>
<CAPTION>
NUMBER OF UNREALIZED
CONTRACTS CONTRACT EXPIRATION OPENING CURRENT APPRECIATION
PURCHASED TYPE DATE POSITION MARKET VALUE (DEPRECIATION)
- ----------- ------------ ------------ ------------ -------------- ---------------
<S> <C> <C> <C> <C> <C>
2 Australian 03/01/99 $ 87,719 $ 87,692 $ (27)
4 DAX 03/01/99 1,083,051 1,215,591 132,540
12 CAC 40 03/01/99 393,203 423,198 29,995
1 MIB 30 03/01/99 209,845 214,152 4,307
5 TOPIX 03/17/99 445,765 476,085 30,320
11 Nikkei 300 03/01/99 190,892 208,893 18,001
10 FTSE 100 03/01/99 970,859 975,644 4,785
1 Hang Seng 01/01/99 66,798 65,311 (1,487)
3 IBEX PLUS 01/01/99 193,138 209,271 16,133
2 Nikkei 300 03/17/99 149,550 137,000 (12,550)
---------- ---------- ---------
$3,790,820 $4,012,837 $ 222,017
========== ========== =========
</TABLE>
At December 31, 1998, the Fund's open forward currency exchange contracts were
as follows:
<TABLE>
<CAPTION>
UNREALIZED
IN EXCHANGE SETTLEMENT CONTRACTS AT APPRECIATION
CONTRACTS TO DELIVER FOR U.S. $ DATES VALUE (DEPRECIATION)
- ----------------------------------- ------------- ------------ -------------- ---------------
<S> <C> <C> <C> <C> <C>
2,916,104 Deutsche Mark $1,743,351 01/29/99 $1,752,515 $ 9,164
78,068,057 Japanese Yen 677,439 01/29/99 693,590 16,151
418,483 British Pound 700,834 01/29/99 695,115 (5,719)
---------- ---------- --------
$3,121,624 $3,141,220 $ 19,596
========== ========== ========
</TABLE>
See Notes to Financial Statements
12
<PAGE>
- ----------------------------------------------------------------------------
BT INSURANCE FUNDS TRUST EAFE(R) EQUITY INDEX FUND
BT INSURANCE FUNDS TRUST EAFE(R) EQUITY INDEX FUND Statement of
OperationsFOR THE YEAR ENDED DECEMBER 31, 1998
- ----------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest .............................................................................. $ 70,290
Dividends ............................................................................. 411,353
Less foreign taxes withheld .......................................................... (49,927)
----------
Total Investment Income .............................................................. 431,716
----------
EXPENSES:
Advisory fees ......................................................................... 105,141
Administration fees ................................................................... 74,667
Fund accounting fees .................................................................. 38,776
Custodian fees ........................................................................ 85,796
Professional fees ..................................................................... 35,793
Trustees fees ......................................................................... 17,918
Amortization of organizational costs .................................................. 4,168
Transfer agent fees ................................................................... 7,185
Printing fees ......................................................................... 8,004
Other ................................................................................. 9,704
----------
Total expenses before waiver/reimbursement ........................................... 387,152
Less waiver/reimbursement by Advisor ................................................. (216,275)
Less waiver by Administrator/Transfer Agent .......................................... (19,402)
----------
Total expenses net of waiver/reimbursement ........................................... 151,475
----------
NET INVESTMENT INCOME .................................................................. 280,241
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FUTURES CONTRACTS AND FOREIGN
CURRENCY
TRANSACTIONS
Net realized loss on investments ...................................................... (174,039)
Net realized gain on futures contracts ................................................ 42,069
Net realized gain on foreign currency transactions .................................... 232,166
Net change in unrealized appreciation/depreciation on investments ..................... 4,277,180
Net change in unrealized appreciation/depreciation on futures contracts ............... 79,394
Net change in unrealized appreciation/depreciation on foreign currency transactions ... 31,448
----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS, FUTURES CONTRACTS AND FOREIGN CURRENCY 4,488,218
----------
TRANSACTIONS
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................................... $4,768,459
==========
</TABLE>
See Notes to Financial Statements
13
<PAGE>
- ----------------------------------------------------------------------------
BT INSURANCE FUNDS TRUST EAFE(R) EQUITY INDEX FUND
Statements of Changes in Net Assets
- ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1998
-------------------
<S> <C>
INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS:
Net investment income .................................................................. $ 280,241
Net realized gain (loss) on investments, futures contracts and foreign currency
transactions .......................................................................... 100,196
Net change in unrealized appreciation/depreciation of investments, futures contracts and
foreign currency transactions ......................................................... 4,388,022
------------
Net increase (decrease) in net assets resulting from operations ....................... 4,768,459
------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income .................................................................. (492,028)
Net realized gain on investments and futures contracts ................................. (30,752)
------------
Total distributions .................................................................... (522,780)
------------
SHARE TRANSACTIONS:
Net proceeds from sale of shares ....................................................... 18,290,262
Issued to shareholders in reinvestment of distributions ................................ 522,780
Costs of shares redeemed ............................................................... (1,512,182)
------------
Net increase in net assets from share transactions .................................... 17,300,860
------------
Net increase in net assets ............................................................ 21,546,539
------------
NET ASSETS:
Beginning of period .................................................................... 14,409,061
------------
End of Period .......................................................................... $ 35,955,600
============
Undistributed net investment income ..................................................... $ 114,484
============
<CAPTION>
FOR THE PERIOD
AUGUST 22, 1997(1)
THROUGH
DECEMBER 31, 1997
-------------------
<S> <C>
INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS:
Net investment income .................................................................. $ 36,655
Net realized gain (loss) on investments, futures contracts and foreign currency
transactions .......................................................................... (898)
Net change in unrealized appreciation/depreciation of investments, futures contracts and
foreign currency transactions ......................................................... (1,018,510)
------------
Net increase (decrease) in net assets resulting from operations ....................... (982,753)
------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income .................................................................. --
Net realized gain on investments and futures contracts ................................. --
------------
Total distributions .................................................................... --
------------
SHARE TRANSACTIONS:
Net proceeds from sale of shares ....................................................... 15,424,726
Issued to shareholders in reinvestment of distributions ................................ --
Costs of shares redeemed ............................................................... (32,912)
------------
Net increase in net assets from share transactions .................................... 15,391,814
------------
Net increase in net assets ............................................................ 14,409,061
------------
NET ASSETS:
Beginning of period .................................................................... --
------------
End of Period .......................................................................... $ 14,409,061
============
Undistributed net investment income ..................................................... $ 55,357
============
</TABLE>
- ----------
(1) Commencement of operations.
See Notes to Financial Statements
14
<PAGE>
- ----------------------------------------------------------------------------
BT INSURANCE FUNDS TRUST EAFE(R) EQUITY INDEX FUND
Financial Highlights
- ----------------------------------------------------------------------------
For a share outstanding throughout each period
<TABLE>
<CAPTION>
FOR THE PERIOD
AUGUST 22, 1997(1)
YEAR ENDED THROUGH
DECEMBER 31, 1998 DECEMBER 31, 1997
------------------- -------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ................................................. $ 9.34 $ 10.00
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income(2) ............................................................ 0.12 0.02
Net realized and unrealized gain (loss) on investments, futures contracts and foreign
currency transactions .............................................................. 1.89 ( 0.68)
------- --------
Net increase (decrease) in net asset value from operations .......................... 2.01 ( 0.66)
------- --------
LESS DISTRIBUTIONS:
Distributions from net investment income ............................................ ( 0.16) --
Distributions from net realized gain on investments and futures contracts ........... ( 0.01) --
------- --------
Total distributions ................................................................ ( 0.17) --
------- --------
NET ASSET VALUE, END OF PERIOD ....................................................... $ 11.18 $ 9.34
======= ========
TOTAL RETURN(3) ...................................................................... 21.60% ( 6.60)%
RATIOS / SUPPLEMENTAL DATA
Net assets, end of period (in 000s) .................................................. $35,956 $ 14,409
Ratios to average net assets:
Net investment income including reimbursement/waiver ................................ 1.20% 0.72%(4)
Operating expenses including reimbursement/waiver ................................... 0.65% 0.65%(4)
Operating expenses excluding reimbursement/waiver ................................... 1.66% 2.75%(4)
Portfolio turnover rate .............................................................. 7% 0%(5)
</TABLE>
- ----------
(1) Commencement of operations.
(2) Based on average shares method.
(3) Total investment return is calculated assuming an initial investment made at
the net asset asset value at the beginning of the period, reinvestment of
all dividends and distributions at net asset value during the period and
redemption on the last day of the period. Total return calculated for a
period of less than one year is not annualized.
(4) Annualized (5) Less than 1%
See Notes to Financial Statements
15
<PAGE>
- ----------------------------------------------------------------------------
BT INSURANCE FUNDS TRUST EAFE(R) EQUITY INDEX FUND
Notes to Financial Statements DECEMBER 31, 1998
- ----------------------------------------------------------------------------
NOTE 1 -- ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
A. ORGANIZATION
The BT Insurance Funds Trust (the "Trust") is currently comprised of seven
series: Equity 500 Index Fund, Small Cap Index Fund, EAFE(R) Equity Index Fund,
International Equity Fund, Small Cap Fund, U.S. Bond Index Fund, and the Managed
Assets Fund (each, a "Fund", collectively, the "Funds"). The Trust is an
open-end management investment company which is registered under the Investment
Company Act of 1940 as amended. The Trust was organized as a Massachusetts
business trust on January 19, 1996. As of December 31, 1998, only Equity 500
Index Fund, Small Cap Index Fund and EAFE(R) Equity Index Fund had commenced
operations.
The accompanying financial statements and financial highlights are those of the
EAFE(R) Equity Index Fund (the "Fund") which commenced operations on August 22,
1997.
B. SECURITY VALUATION
The portfolio's investments which are traded on a recognized stock exchange or
for which price quotations are available are valued each business day on the
basis of market valuations furnished by an independent pricing service approved
by the Board of Trustees. Securities traded on national stock exchanges or other
domestic or foreign exchanges are valued based on the closing price of the
security traded on that exchange prior to the time when the Fund's assets are
valued. Short-term obligations with remaining maturities of 60 days or less are
valued at amortized cost. Other short-term debt securities are valued on a
mark-to-market basis until such time as they reach a remaining maturity of 60
days, whereupon they will be valued at amortized cost using their value on the
61st day. All other securities and other assets are valued at their fair value
as determined in good faith under procedures established by and under the
general supervision of the Board of Trustees.
C. SECURITY TRANSACTIONS AND INVESTMENT INCOME
Security transactions are accounted for on a trade date basis. Dividend income,
less foreign taxes withheld, if any, is recorded on the ex-dividend date or upon
receipt of ex-dividend notification in the case of certain foreign securities.
Interest income is recorded on the accrual basis and includes amortization of
premium and discount on investments. Realized gains and losses from securities
transactions are recorded on the identified cost basis.
D. FUTURES CONTRACTS
The Fund may enter into financial futures contracts which are contracts to buy a
standard quantity of securities at a specified price on a future date. The Fund
is required to deposit either in cash or securities an amount equal to a certain
percentage of the contract amount. Variation margin payments are made or
received by the Fund each day, dependent on the daily fluctuations in the value
of the underlying security, and are recorded for financial statement purposes as
unrealized gains or losses by the Fund. The Fund's investments in financial
futures contracts are designed to enable the Fund to closely replicate the
benchmark index used by the Fund. Risks arise from possible illiquidity of the
futures market and from movements in security values.
Futures contracts are valued at the settlement price established each day by the
board of trade or exchange on which they are traded.
E. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
The Fund may enter into forward foreign currency exchange contracts. A forward
foreign currency exchange contract is an obligation to purchase or sell a
specific currency at a specified price at a future date. These contracts are
used in an attempt to protect against fluctuations in foreign currency exchange
rates that would adversely affect the portfolio position or an anticipated
investment position. Forward foreign currency exchange contracts are valued at
the daily forward exchange rate of the underlying currency. Gains or losses on
the purchase or sale of forward foreign currency exchange contracts having the
same settlement date and broker are recognized on the date of offset, otherwise
gains or losses are recognized on the settlement date. The use of forward
foreign currency exchange contracts does not eliminate fluctuations in the
underlying prices of the Fund's securities. but it does establish a rate of
exchange that can be achieved in the future. Although forward foreign currency
exchange contracts limit the risk of loss due to a decline in the value of the
hedged currency, they also limit any potential gain that might result should the
value of the currency increase. In addition, the Fund could be exposed to risks
if the counterparties to the contracts are unable to meet the terms of their
contracts.
F. FOREIGN CURRENCY TRANSLATION
Assets and liabilities denominated in foreign currencies and commitments under
forward foreign currency exchange contracts are translated into U.S. dollars at
the mean of the quoted bid and asked prices of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated into U.S.
dollars at the rates of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated into U.S. dollars at rates of
exchange prevailing when earned or accrued.
Net foreign exchange gains of $232,166 represent foreign exchange gains and
losses from holding foreign currencies, exchange gains or losses realized
between the trade and settlement dates on security transactions, and the
difference between the amounts of interest and dividends recorded on the Fund's
books and the U.S. dollar equivalent of the amounts actually received or paid.
Net currency gains and losses from valuing foreign currency denominated assets
and liabilities at year end exchange rates are reflected as a component of net
unrealized appreciation (depreciation) of investments, assets and liabilities in
foreign currency and futures contracts.
G. FOREIGN SECURITIES
The Fund invests in foreign securities. Investing in securities of foreign
companies involves special risks and considerations not typically associated
with investing in the securities of U.S. companies. These risks include
re-evaluation of currencies and future adverse political and economic
developments. Moreover, securities of many foreign companies and their markets
may be less liquid and their prices more volatile than those of securities of
comparable U.S. companies.
H. FEDERAL INCOME TAXES
The Fund intends to continue to elect to be treated as a "regulated investment
company" under Sup-chapter M of the Internal Revenue Code and to distribute all
of its taxable income to shareholders. Accordingly, no provision for federal
income taxes has been made in the accompanying financial statements. The Fund
intends to utilize provisions of the federal income tax laws which allows it to
carry a realized capital loss forward for eight years following the year of the
loss and offset such losses against any future realized capital
16
<PAGE>
- ----------------------------------------------------------------------------
BT INSURANCE FUNDS TRUST EAFE(R) EQUITY INDEX FUND
Notes to Financial Statements DECEMBER 31, 1998
- ----------------------------------------------------------------------------
gains. At December 31, 1998, the capital loss carryforward amounted to $164,354
and will expire December 31, 2006.
I. EXPENSES
The Trust accounts separately for the assets, liabilities and operations of each
of the Funds. Expenses directly attributable to a Fund are charged to that Fund,
while the expenses which are attributable to more than one Fund of the Trust are
allocated based upon the relative net assets of each Fund.
J. ORGANIZATION COSTS
Costs incurred in connection with the Fund's organization are being amortized on
a straight-line basis over five years commencing on August 22, 1997. In the
event that any of the initial shares are redeemed during such amortization
period, the redemption proceeds will be reduced for any unamortized organization
costs in the same proportion as the number of shares redeemed bears to the
number of initial shares outstanding at the time of the redemption.
K. DIVIDENDS FROM NET INVESTMENT INCOME AND DISTRIBUTIONS OF CAPITAL GAINS
Dividends from net investment income and net realized gains on investment
transactions, if any, are distributed to shareholders annually.
Dividends and distributions to shareholders are recorded on the ex-dividend
date. Income and capital gains distributions are determined in accordance with
federal tax regulations and may differ from those determined in accordance with
generally accepted accounting principles. To the extent these differences are
permanent, such amounts are reclassified within the capital accounts based on
their federal tax basis treatment; temporary differences do not require such
reclassification.
L. SHARES OF BENEFICIAL INTEREST
The Fund is authorized to issue an unlimited number of shares of beneficial
interest with a par value of $0.001 per share. Transactions in shares of
beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD
AUGUST 22, 1997(A)
YEAR ENDED THROUGH
DECEMBER 31, 1998 DECEMBER 31, 1997
---------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
------------- -------------- ------------- --------------
<S> <C> <C> <C> <C>
Shares sold 1,768,419 $18,290,262 1,545,473 $15,424,726
Reinvestment of
Dividends 48,903 522,780 0 0
Shares redeemed (143,685) (1,512,182) (3,560) (32,912)
--------- ----------- --------- -----------
Net increase 1,673,637 $17,300,860 1,541,913 $15,391,814
========= =========== ========= ===========
</TABLE>
- ---------------------
(a) commencement of operations.
M. 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 in the financial statements. Actual results could
differ from those estimates.
NOTE 2 -- FEES AND TRANSACTIONS
Under the Advisory Agreement with Bankers Trust Company (the "Advisor"), the
Fund will pay an advisory fee at an annual percentage rate of 0.45% of the
average daily net assets of the Fund. These fees are accrued daily and paid
monthly. The Advisor has voluntarily undertaken to waive its fee and to
reimburse the Fund for certain expenses so that the Fund's total operating
expenses will not exceed 0.65% of average daily net assets. For the year ended
December 31, 1998, the gross Advisory fee, waiver and reimbursed expenses were
as follows:
<TABLE>
<CAPTION>
GROSS ADVISORY ADVISORY FEE EXPENSES
FEE WAIVED REIMBURSED
- --------------- -------------- -----------
<S> <C> <C>
$ 105,141 $105,141 $111,134
</TABLE>
The amount outstanding payable to the Fund by the Advisor as of December 31,
1998 was $24,129.
First Data Investor Services Group, Inc. ("Investor Services Group") serves as
Administrator and Transfer Agent of the Funds. For services rendered as the
Funds' Administrator, Investor Services Group receives the following fees,
accrued daily, and paid monthly.
<TABLE>
<CAPTION>
ADMINISTRATION FEES
- --------------------------------------------------------------
FEE % OF THE FUNDS'
AGGREGATE DAILY
NET ASSETS AVERAGE DAILY NET ASSETS
- ---------------------- -------------------------------------
<S> <C>
0.02 % up to $2 billion
0.01 % over $2 billion and up to $5 billion
0.0075% over $5 billion
</TABLE>
Investor Services Group also receives a $70,000 flat fee per year, per Fund,
paid monthly.
Investor Services Group waived $19,402 of its fees for the year ended December
31, 1998.
Bankers Trust Company is the custodian for the Fund.
The Fund does not compensate its officers or affiliated trustees. Each
independent trustee is paid $1,250 per Board of Trustees meeting attended and a
quarterly retainer of $2,500. At December 31, 1998 the amount payable to
trustees was $2,097.
NOTE 3 -- PURCHASES AND SALES OF INVESTMENT SECURITIES The aggregate cost of
purchases and proceeds from the sale of investments, other than short-term
obligations, for the year ended December 31, 1998, were $15,923,908 and
$1,681,657, respectively.
The aggregate gross unrealized appreciation and depreciation for all securities
as computed on a federal income tax basis, at December 31, 1998 is as follows:
<TABLE>
<CAPTION>
APPRECIATION DEPRECIATION NET COST
- -------------- ---------------- ------------- --------------
<S> <C> <C> <C>
$5,187,215 $(1,952,492) $3,234,723 $33,255,705
</TABLE>
At December 31, 1998, the amount payable for investment securities purchased was
$679,157.
17
<PAGE>
- ----------------------------------------------------------------------------
BT INSURANCE FUNDS TRUST EAFE(R) EQUITY INDEX FUND
Notes to Financial Statements DECEMBER 31, 1998
- ----------------------------------------------------------------------------
NOTE 4 -- NET ASSETS
<TABLE>
<S> <C>
NET ASSETS:
Paid-in capital (3,215,550 outstanding shares of
beneficial interest) $32,668,112
Undistributed net investment income 114,484
Distributions in excess accumulated net realized
gain on investments, foreign currency
transactions and futures contracts (196,508)
Net unrealized appreciation on investments,
assets and liabilities in foreign currency and
futures contracts 3,369,512
-----------
TOTAL NET ASSETS -- 100% $35,955,600
===========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE (Net Assets/Shares
Outstanding) $ 11.18
===========
</TABLE>
18
<PAGE>
- ----------------------------------------------------------------------------
BT INSURANCE FUNDS TRUST EAFE(R) EQUITY INDEX FUND
Report of Independent Auditors
- ----------------------------------------------------------------------------
To the Trustees of BT Insurance Funds Trust and Shareholders of
EAFE(R) Equity Index Fund
We have audited the accompanying statement of net assets of the EAFE(R) Equity
Index Fund (the "Fund") as of December 31, 1998, and the related statement of
operations for the year then ended and the statements of changes in net assets
and financial highlights for the year then ended and for the period August 22,
1997 (commencement of operations) to December 31, 1997. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of December 31, 1998, by correspondence with the Fund's
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
EAFE(R) Equity Index Fund at December 31, 1998, the results of its operations
for the year then ended and the changes in its net assets and its financial
highlights for the year then ended and for the period August 22, 1997
(commencement of operations) to December 31, 1997, in conformity with generally
accepted accounting principles.
Ernst & Young LLP
Philadelphia, Pennsylvania
January 29, 1999
19
<PAGE>
BT INSURANCE FUNDS TRUST
EAFE(R) EQUITY INDEX FUND
INVESTMENT ADVISOR
BANKERS TRUST COMPANY
130 Liberty Street
New York, NY 10006
ADMINISTRATOR AND TRANSFER AGENT
FIRST DATA INVESTOR SERVICES GROUP, INC.
3200 Horizon Drive
King of Prussia, PA 19406
DISTRIBUTOR
FIRST DATA DISTRIBUTORS, INC.
4400 Computer Drive
Westborough, MA 01581
CUSTODIAN
BANKERS TRUST COMPANY
130 Liberty Street
New York, NY 10006
INDEPENDENT AUDITORS
ERNST & YOUNG LLP
2001 Market Street
Philadelphia, PA 19103
COUNSEL
WILLKIE FARR & GALLAGHER
787 Seventh Avenue
New York, NY 10019
-------------------
For information on how to invest, shareholder account information
and current price and yield information, please contact your
insurance company representative. This report must be preceded or
accompanied by a current prospectus for the Fund.
-------------------
EAFE(R) Equity Index Fund Cusip #00576E508
INSEAFE200 (12/98)
