<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
RYDEX ADVISOR VARIABLE
[LOGO] ANNUITY ACCOUNT
SEMI-ANNUAL REPORT
June 30, 1998
6116 Executive Boulevard, Suite 400
Rockville, MD 20852
(301) 468-8520 888/667-4936
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dear Contract Owners:
The U.S. Stock Market continued its bullish run in the first half of 1998.
The economy, entering its eighth year of growth, continued to show strength, but
unlike past expansions, inflation was falling instead of rising. Although the
Standard and Poor's 500 Composite Stock Price Index-TM- (S&P 500 Index), a broad
measure of stock market performance, rose 16.84% during the first six months of
1998, equity markets continued to be volatile as further deterioration of Asian
economies and concerns over corporate profits caused trepidation among
investors.
The first quarter of 1998 was characterized by strong economic growth fueled
primarily by consumer spending. The U.S. Commerce Department reported that Gross
Domestic Product (GDP) grew at a healthy 5.4% rate during the quarter. Although
wages continued to rise, the risk of wage inflation was diminished by an
offsetting increase in productivity, thus keeping interest rates low. On March
31, 1998 the Dow Jones Industrial Average (Dow) and the S&P 500 Index closed at
near all-time highs and the NASDAQ 100 Index-TM- closed at a record high.
In contrast to the first quarter, second quarter GDP decelerated to its
slowest pace in three years to a 1.6% annual increase. The trade deficit rose to
$15.8 billion in May, as exports to Asia and Europe contracted. Industrial
production fell 0.6% in June, as the General Motors strike took its toll.
Concerns over corporate profits began to reappear. Although the Dow closed above
9200 for the first time ever in May, the big stock indexes, including the Dow
and the S&P 500 Index, trended sideways during much of the quarter. The NASDAQ
100 Index-TM- fared well during the second quarter posting a total return of
9.6%. On June 10, Federal Reserve Chairman Alan Greenspan delivered a lengthy
but balanced testimony in which he described the U.S. economy as being in a
"virtuous cycle" of low inflation and strong growth. He went on to characterize
the current economic expansion as impressive as any economy he has ever
witnessed.
During the first half of 1998 the yield on the 30-year Treasury Bond fell
from 5.923% to 5.627%. The fact that the U.S. Government is expected to post a
surplus for the first time since 1969 during this current fiscal year added more
good news for interest rates. Also,
<PAGE>
the Consumer Price Index, which is the broadest gauge of costs for goods and
services, has remained low.
IN SUMMARY
Stock market volatility, a healthy U.S. economy, and a generally positive
performance of the stock and bond markets characterized the first half of the
year. However, continued weakness in foreign economies has blurred the U.S.
corporate profit outlook. Despite this, the domestic economy remains strong as
interest rates are low, inflation is benign, employment is high and U.S.
productivity has continued to improve.
[/S/ ALBERT P. VIRAGH, JR.]
Albert P. (Skip) Viragh, Jr.
Chairman
2
<PAGE>
RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT
NOVA SUBACCOUNT
SCHEDULE OF INVESTMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------------ -----------
<S> <C> <C>
COMMON STOCKS 4.58%
Standard & Poor's Depository Receipts (Cost
$795,090) 9,120 $ 1,033,410
-----------
<CAPTION>
CONTRACTS
------------
<S> <C> <C>
OPTIONS PURCHASED 38.58%
Call Options on:
S&P 500 Index Expiring September 1998 at 2700
(Cost $8,286,222) 199 8,706,250
-----------
<CAPTION>
FACE AMOUNT
------------
<S> <C> <C>
REPURCHASE AGREEMENTS 56.84%
Repurchase Agreements Collateralized by U.S.
Treasury Obligations--
5.73% 7/01/1998 $ 3,471,677 3,471,677
5.75% 7/01/1998 3,471,677 3,471,677
5.85% 7/01/1998 5,881,512 5,881,512
-----------
Total Repurchase Agreements (Cost $12,824,866) 12,824,866
-----------
Total Investments 100% (Cost $21,906,178) $22,564,526
-----------
-----------
- --------------------------------------------------------------------------------
<CAPTION>
UNREALIZED
CONTRACTS GAIN
------------ -----------
<S> <C> <C>
FUTURES CONTRACTS PURCHASED
S&P 500 Futures Contracts Expiring September 1998
(Underlying Face Amount at Market Value
$12,001,500) 42 $ 159,060
-----------
-----------
</TABLE>
See Notes to Financial Statements.
3
<PAGE>
RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT
URSA SUBACCOUNT
SCHEDULE OF INVESTMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
FACE AMOUNT VALUE
------------ -----------
<S> <C> <C>
REPURCHASE AGREEMENTS 100%
Repurchase Agreements Collateralized by
U.S. Treasury Obligations--
5.73% 7/01/1998 $ 754,919 $ 754,919
5.75% 7/01/1998 754,918 754,918
5.85% 7/01/1998 1,278,939 1,278,939
-----------
Total Repurchase Agreements (Cost
$2,788,776) 2,788,776
-----------
Total Investments 100% (Cost
$2,788,776) $ 2,788,776
-----------
-----------
- -------------------------------------------------------------------
<CAPTION>
UNREALIZED
SHARES LOSS
------------ -----------
<S> <C> <C>
COMMON STOCK SOLD SHORT
Standard & Poor's Depository Receipts
(Underlying Face Amount at Market
Value $1,495,725) 13,200 $ (51,743)
-----------
-----------
<CAPTION>
CONTRACTS
------------
<S> <C> <C>
FUTURES CONTRACTS SOLD
S&P 500 Futures Contracts Expiring
September 1998
(Underlying Face Amount at Market
Value $1,714,500) 6 $ (28,650)
-----------
-----------
</TABLE>
See Notes to Financial Statements.
4
<PAGE>
RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT
MONEY MARKET SUBACCOUNT
SCHEDULE OF INVESTMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
FACE AMOUNT VALUE
------------ ------------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS 6.85%
U.S. Treasury Bill 4.55% 7/02/98 (Cost
$999,874) $ 1,000,000 $ 999,874
------------
FEDERAL AGENCY DISCOUNT NOTES 6.85%
Fannie Mae 5.43% 7/02/98 (Cost
$999,849) 1,000,000 999,849
------------
REPURCHASE AGREEMENTS 86.30%
Repurchase Agreements Collateralized by
U.S. Treasury Obligations--
5.73% 7/01/1998 3,409,804 3,409,804
5.75% 7/01/1998 3,409,803 3,409,803
5.85% 7/01/1998 5,776,690 5,776,690
------------
Total Repurchase Agreements (Cost
$12,596,297) 12,596,297
------------
Total Investments 100% (Cost
$14,596,020) $ 14,596,020
------------
------------
</TABLE>
See Notes to Financial Statements.
5
<PAGE>
RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT
OTC SUBACCOUNT
SCHEDULE OF INVESTMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
----------- ----------
<S> <C> <C>
COMMON STOCKS 97.21%
Microsoft Corp.* 65,012 $7,045,675
Intel Corp. 44,943 3,331,400
Cisco Systems, Inc.* 27,498 2,531,535
Worldcom, Inc.* 29,399 1,424,014
Dell Computer Corp.* 16,991 1,576,977
MCI Communications Corp. 16,281 946,333
Oracle Corp.* 27,173 667,424
Sun Microsystems, Inc.* 10,554 458,439
Amgen, Inc.* 7,085 463,182
Tele-Communications, Inc.* 13,144 505,222
3Com Corp.* 9,891 303,530
Applied Materials, Inc.* 10,214 301,313
Comcast Corp. Special Class A 9,133 370,743
Tellabs, Inc.* 5,060 362,422
HBO & Company 11,799 415,915
Costco Companies, Inc.* 5,977 376,924
Peoplesoft, Inc.* 6,320 297,040
BMC Software, Inc.* 5,928 307,885
PanAmSat Corp.* 4,136 235,235
Nextel Communications, Inc.* 7,166 178,254
Parametric Technology Corp.* 7,433 201,620
Compuware Corp.* 4,964 253,784
Paychex, Inc. 4,512 183,582
ADC Telecommunications, Inc.* 3,738 136,554
Ascend Communications, Inc.* 5,322 263,772
Nordstrom, Inc. 2,068 159,753
Northwest Airlines Corp.* 2,738 105,584
Staples, Inc.* 7,788 225,365
Maxim Integrated Products, Inc.* 3,622 114,772
Linear Technology Corp. 2,133 128,646
<CAPTION>
MARKET
SHARES VALUE
----------- ----------
<S> <C> <C>
Adaptec, Inc.* 3,209 $ 45,929
PACCAR, Inc. 2,128 111,188
Sigma Aldrich Corp. 2,742 96,313
Cintas Corp. 2,724 138,924
Network Associates, Inc.* 2,986 142,955
Qualcomm, Inc.* 1,892 106,307
KLA-Tencor Corp.* 2,366 65,509
Starbucks Corp.* 2,429 129,800
Chiron Corp.* 5,028 78,877
Adobe Systems, Inc. 1,805 76,600
Altera Corp.* 2,483 73,404
Biomet, Inc. 3,113 102,924
DSC Communications Corp.* 3,297 98,910
Quantum Corp.* 4,392 91,134
Novell, Inc.* 9,838 125,435
Biogen, Inc.* 2,044 100,156
Xilinx, Inc.* 2,068 70,312
Netscape Communications Corp.* 2,743 74,232
Atmel Corp.* 2,735 37,264
Oxford Health Plans, Inc.* 2,216 33,933
Electronics for Imaging, Inc.* 1,501 31,709
American Power Conversion Corp.* 2,625 78,750
Bed Bath and Beyond Inc.* 1,918 99,376
Chancellor Media Corp.* 3,942 195,745
Ericsson Tel-Sp ADR 15,568 445,634
Fiserv Inc.* 2,280 96,808
Gartner Group Inc.-CL A * 2,783 97,405
General Nutrition Companies* 2,277 70,872
Quintiles Transnational Corp.* 2,091 102,851
Reuters Hldgs-Spons ADR 1,282 87,817
----------
Total Common Stocks (Cost $24,703,632) $26,979,967
----------
</TABLE>
* NON-INCOME PRODUCING SECURITIES
See Notes to Financial Statements.
6
<PAGE>
RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT
OTC SUBACCOUNT
SCHEDULE OF INVESTMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
CONTRACTS VALUE
----------- ----------
OPTIONS PURCHASED 0.15%
<S> <C> <C>
Call Options on:
NASDAQ 100 Call Option Contracts Expiring July
1998 at 1126 (Cost $16,515) 5 $ 42,938
----------
<CAPTION>
FACE AMOUNT
-----------
<S> <C> <C>
REPURCHASE AGREEMENTS 2.64%
Repurchase Agreements Collateralized by U.S.
Treasury Obligations--
5.73% 7/01/1998 $197,872 197,872
5.75% 7/01/1998 197,872 197,872
5.85% 7/01/1998 335,222 335,222
----------
Total Repurchase Agreements (Cost $730,966) 730,966
----------
Total Investments 100% (Cost $25,451,113) $27,753,871
----------
----------
- ----------------------------------------------------------------------------
<CAPTION>
MARKET
CONTRACTS VALUE
----------- ----------
<S> <C> <C>
WRITTEN OPTIONS CONTRACTS
Put Options On:
NASDAQ 100 Put Option Contracts Expiring July
1998 at 1126 (Proceeds $16,722) 5 $ 3,188
----------
----------
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT
PRECIOUS METALS SUBACCOUNT
SCHEDULE OF INVESTMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------- --------
<S> <C> <C>
COMMON STOCKS 93.74%
Mining and Precious Metals Stocks
Barrick Gold Corp., Class A 1,071 $ 20,550
Newmont Mining Corp. 449 10,608
Placer Dome, Inc. 710 8,342
Battle Mountain Gold Co., Class A 782 4,643
Homestake Mining Co. 719 7,460
Ashanti Goldfields 368 2,990
Freeport-McMoran Corp. 556 8,444
Hecla Mining Co.* 188 999
Getchell Gold Corp. 105 1,575
Coeur D'Alene Mines 75 506
--------
Total Common Stocks (Cost $62,678) $ 66,117
--------
<CAPTION>
FACE
AMOUNT
-------
<S> <C> <C>
REPURCHASE AGREEMENTS 6.26%
Repurchase Agreements Collateralized by U.S. Treasury
Obligations--
5.73% 7/01/1998 $1,196 1,196
5.75% 7/01/1998 1,196 1,196
5.85% 7/01/1998 2,026 2,026
--------
Total Repurchase Agreements (Cost $4,418) 4,418
--------
Total Investments 100% (Cost $67,096) $ 70,535
--------
--------
</TABLE>
* NON-INCOME PRODUCING SECURITIES
See Notes to Financial Statements.
8
<PAGE>
RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT
U.S. GOVERNMENT BOND SUBACCOUNT
SCHEDULE OF INVESTMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
FACE AMOUNT VALUE
----------- ----------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS 43.83%
U.S. Treasury Bond 6.125% due 11/15/2027 (Cost
$611,551) $595,000 $ 637,580
----------
<CAPTION>
CONTRACTS
-----------
<S> <C> <C>
OPTIONS PURCHASED 17.84%
Call Options On:
U.S. Treasury Bond Futures Contract Expiring
September 1998 at 1100 (Cost $244,323) 11 259,531
----------
<CAPTION>
FACE AMOUNT
-----------
<S> <C> <C>
REPURCHASE AGREEMENTS 38.33%
Repurchase Agreements Collateralized by U.S. Treasury
Obligations--
5.73% 7/01/1998 $150,931 150,931
5.75% 7/01/1998 150,931 150,931
5.85% 7/01/1998 255,699 255,699
----------
Total Repurchase Agreements (Cost $557,561) 557,561
----------
Total Investments 100.0% (Cost $1,413,435) $1,454,672
----------
----------
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT
JUNO SUBACCOUNT
SCHEDULE OF INVESTMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
CONTRACTS VALUE
----------- --------
<S> <C> <C>
OPTIONS PURCHASED 3.19%
Put Options On:
U.S. Treasury Bond Futures Contract Expiring September
1998 at 1124 (Cost $2,009) 10 $ 1,656
--------
<CAPTION>
FACE AMOUNT
-----------
<S> <C> <C>
REPURCHASE AGREEMENTS 96.81%
Repurchase Agreements Collateralized by U.S. Treasury
Obligations--
5.73% 7/01/1998 $13,602 13,602
5.75% 7/01/1998 13,602 13,602
5.85% 7/01/1998 23,045 23,045
--------
Total Repurchase Agreements (Cost $50,249) 50,249
--------
Total Investments 100% (Cost $52,258) $ 51,905
--------
--------
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
- --------------------------------------------------------------------------------
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY
NOVA URSA MARKET
SUBACCOUNT SUBACCOUNT SUBACCOUNT
----------- ---------- -----------
<S> <C> <C> <C>
ASSETS
Securities at Market Value--See
Accompanying Schedules $22,564,526 $2,788,776 $14,596,020
Receivable for Securities Sold 218,730 -- --
Receivable from Advisor, Net -- -- --
Investment Income Receivable 5,273 449 2,026
Segregated Cash with Broker 452,250 699,351 --
Receivable for Units Purchased 1,981,034 -- 4,742,484
Receivable--Short Sales Open -- 1,443,982 --
Unamortized Organization Costs 90,422 90,422 90,422
Other Assets 168 -- 5,801
----------- ---------- -----------
Total Assets 25,312,403 5,022,980 19,436,753
----------- ---------- -----------
LIABILITIES
Short Sale at Market Value -- 1,495,725 --
Payable for Units Redeemed 2,815,710 117,659 4,441,061
Organizational Expense Payable to
Advisor 94,091 93,070 94,592
Amounts due to GARCO 54,042 26,973 84,651
Other Liabilities 213,721 71,590 128,275
----------- ---------- -----------
Total Liabilities 3,177,564 1,805,017 4,748,579
----------- ---------- -----------
NET ASSETS $22,134,839 $3,217,963 $14,688,172
----------- ---------- -----------
----------- ---------- -----------
Units Outstanding 1,518,888 463,004 1,405,279
----------- ---------- -----------
----------- ---------- -----------
Unit Value $14.57 $6.95 $10.45
----------- ---------- -----------
----------- ---------- -----------
</TABLE>
See Notes to Financial Statements.
11
<PAGE>
RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
- --------------------------------------------------------------------------------
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRECIOUS U.S.
OTC METALS GOVERNMENT JUNO
SUBACCOUNT SUBACCOUNT BOND SUBACCOUNT SUBACCOUNT
----------- ----------- ----------------- -----------
<S> <C> <C> <C> <C>
ASSETS
Securities at Market Value--See
Accompanying Schedules $27,753,871 $ 70,535 $ 1,454,672 $ 51,905
Receivable for Securities Sold 5,625 -- 5,397 --
Receivable from Advisor, Net -- 15 891 4,111
Receivable for Units Purchased 2,448,256 -- -- --
Investment Income Receivable 563 626 4,744 8
Segregated Cash with Broker 35,201 -- -- --
Unamortized Organization Costs 90,872 90,495 90,536 90,744
Other Assets 7,557 -- -- --
----------- ----------- ----------------- -----------
Total Assets 30,341,945 161,671 1,556,240 146,768
----------- ----------- ----------------- -----------
LIABILITIES
Written Options at Market Value 3,188 -- -- --
Payable for Units Redeemed 1,760,856 -- -- --
Payable for Securities Purchased 657,347 -- -- --
Organization Expense Payable to
Advisor 93,530 90,614 90,827 90,757
Amounts due to GARCO 30,076 4,052 3,170 569
Other Liabilities 34,709 258 50 39
----------- ----------- ----------------- -----------
Total Liabilities 2,579,706 94,924 94,047 91,365
----------- ----------- ----------------- -----------
NET ASSETS $27,762,239 $ 66,747 $ 1,462,193 $ 55,403
----------- ----------- ----------------- -----------
----------- ----------- ----------------- -----------
Units Outstanding 1,933,702 10,094 116,899 6,440
----------- ----------- ----------------- -----------
----------- ----------- ----------------- -----------
Unit Value $14.36 $6.61 $12.51 $8.60
----------- ----------- ----------------- -----------
----------- ----------- ----------------- -----------
</TABLE>
See Notes to Financial Statements.
12
<PAGE>
RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT
STATEMENT OF OPERATIONS (UNAUDITED)
- --------------------------------------------------------------------------------
Six Months Ended June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY
NOVA URSA MARKET
SUBACCOUNT SUBACCOUNT SUBACCOUNT
------------- ----------- -----------
<S> <C> <C> <C>
INVESTMENT INCOME
Interest $ 237,460 $ 134,305 $594,973
Dividends 6,069 -- --
------------- ----------- -----------
Total Income 243,529 134,305 594,973
------------- ----------- -----------
EXPENSES
Advisory Fees 48,765 26,554 53,577
Tactical Allocation Fees 16,255 7,376 21,431
Mortality and Expense Risk Fee 81,275 36,880 133,943
Organizational Expenses 21,748 9,457 35,876
Administration Fees 9,753 4,426 16,073
Custodian Fees 4,781 3,186 3,860
Portfolio Accounting Expenses 18,578 8,398 30,410
Legal Expenses 33,174 14,997 54,304
Miscellaneous 33,810 14,693 63,031
------------- ----------- -----------
Total Expenses 268,139 125,967 412,505
Less Expenses Waived and
Reimbursed by Investment
Advisor 34,068 16,801 91,041
------------- ----------- -----------
Net Expenses 234,071 109,166 321,464
------------- ----------- -----------
Net Investment Income (Loss) 9,458 25,139 273,509
------------- ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net Realized Gain (Loss) on:
Investment Securities 838,779 -- --
Futures Contracts 1,464,650 (196,781) --
Securities Sold Short -- (304,609) --
------------- ----------- -----------
Total Net Realized Gain (Loss) 2,303,429 (501,390) --
Net Change in Unrealized Appreciation
(Depreciation)
on Investments, Options and Futures
Contracts 618,489 (3,112) --
------------- ----------- -----------
Net Gain (Loss) on Investments 2,921,918 (504,502) --
------------- ----------- -----------
Net Increase (Decrease) in Net Assets
from Operations $ 2,931,376 $ (479,363) $273,509
------------- ----------- -----------
------------- ----------- -----------
</TABLE>
See Notes to Financial Statements.
13
<PAGE>
RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT
STATEMENT OF OPERATIONS (UNAUDITED)
- --------------------------------------------------------------------------------
Six Months Ended June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRECIOUS U.S.
OTC METALS GOVERNMENT JUNO
SUBACCOUNT SUBACCOUNT BOND SUBACCOUNT SUBACCOUNT
---------- -------- ---------------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Interest $ 15,855 $ 167 $ 21,667 $ 5,774
Dividends 2,762 5,335 -- --
---------- -------- -------- -----------
Total Income 18,617 5,502 21,667 5,774
---------- -------- -------- -----------
EXPENSES
Advisory Fees 24,947 4,174 2,068 969
Tactical Allocation Fees 6,653 1,113 827 269
Mortality and Expense Risk Fee 41,579 6,956 5,170 1,346
Organizational Expenses 10,724 1,881 1,418 379
Administration Fees 4,990 835 620 161
Custodian Fees 20,090 5,410 3,424 1,156
Portfolio Accounting Expenses 6,525 1,191 694 305
Legal Expenses 17,009 1,840 1,133 545
Miscellaneous 503 174 440 --
---------- -------- -------- -----------
Total Expenses 133,020 23,574 15,794 5,130
Less Expenses Waived and Reimbursed
by Investment Advisor 13,348 2,981 2,558 1,133
---------- -------- -------- -----------
Net Expenses 119,672 20,593 13,236 3,997
---------- -------- -------- -----------
Net Investment Income (Loss) (101,055) (15,091 ) 8,431 1,777
---------- -------- -------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net Realized Gain (Loss) on:
Investment Securities 585,756 17,553 25,954 (144)
Written Options 54,272 -- -- --
Futures Contracts -- -- -- (7,993)
---------- -------- -------- -----------
Total Net Realized Gain (Loss) 640,028 17,553 25,954 (8,137)
Net Change in Unrealized Appreciation/
(Depreciation) on Investments,
Options and Futures Contracts 2,422,093 (36,465 ) 24,604 (353)
---------- -------- -------- -----------
Net Gain (Loss) on Investments 3,062,121 (18,912 ) 50,558 (8,491)
---------- -------- -------- -----------
Net Increase (Decrease) in Net Assets
from Operations $2,961,066 $(34,003) $ 58,989 $ (6,713)
---------- -------- -------- -----------
---------- -------- -------- -----------
</TABLE>
See Notes to Financial Statements.
14
<PAGE>
RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NOVA URSA
SUBACCOUNT NOVA SUBACCOUNT URSA
SIX SUBACCOUNT SIX SUBACCOUNT
MONTHS PERIOD MONTHS PERIOD
ENDED ENDED ENDED ENDED
JUNE DECEMBER JUNE DECEMBER
30, 31, 30, 31,
1998 1997* 1998 1997*
-- -- -- --
<S> <C> <C>
(unaudited) (unaudited)
CHANGES FROM OPERATIONS
Net Investment Income (Loss) $9,458 $25,410 $25,139 $(3,330)
Net Realized Gain (Loss) on
Investments 2,303,429 112,377 (501,390) (254,521)
Net Change in Unrealized Appreciation
(Depreciation) of Investments 618,489 198,918 (3,112) (77,323)
-- -- -- --
Net Increase (Decrease) in Net Assets
from Operations 2,931,376 336,705 (479,363) (335,174)
-- -- -- --
CHANGES FROM PRINCIPAL TRANSACTIONS
Contract Purchase Payments less Sales
and Administrative Expenses and
Applicable Premium Taxes 144,754,360 76,198,580 86,304,539 45,239,040
Contract Terminations (135,998,933) (66,087,249) (85,486,057) (42,025,022)
-- -- -- --
Net Increase (Decrease) in Net Assets
Derived from Principal Transactions 8,755,427 10,111,331 818,482 3,214,018
-- -- -- --
Net Increase (Decrease) in Net Assets 11,686,803 10,448,036 339,119 2,878,844
-- -- -- --
NET ASSETS--Beginning of Period 10,448,036 -- 2,878,844 --
-- -- -- --
NET ASSETS--End of Period $22,134,839 $10,448,036 $3,217,963 $2,878,844
-- -- -- --
-- -- -- --
</TABLE>
* COMMENCEMENT OF OPERATIONS: MAY 7, 1997--NOVA SUBACCOUNT AND URSA SUBACCOUNT
See Notes to Financial Statements.
15
<PAGE>
RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY
MARKET MONEY OTC
SUBACCOUNT MARKET SUBACCOUNT OTC
SIX SUBACCOUNT SIX SUBACCOUNT
MONTHS PERIOD MONTHS PERIOD
ENDED ENDED ENDED ENDED
JUNE DECEMBER JUNE DECEMBER
30, 31, 30, 31,
1998 1997* 1998 1997*
-- -- -- --
<S> <C> <C>
(unaudited) (unaudited)
CHANGES FROM OPERATIONS
Net Investment Income (Loss) $273,509 $221,638 $(101,055) $(15,375)
Net Realized Gain (Loss) on
Investments -- -- 640,028 (81,503)
Net Change in Unrealized Appreciation
(Depreciation) of Investments -- -- 2,422,093 (105,801)
-- -- -- --
Net Increase (Decrease) in Net Assets
from Operations 273,509 221,638 2,961,066 (202,679)
-- -- -- --
CHANGES FROM PRINCIPAL TRANSACTIONS
Contract Purchase Payments less Sales
and Administrative Expenses and
Applicable Premium Taxes 178,682,182 122,126,822 62,511,206 18,825,274
Contract Terminations (182,170,891) (104,445,088) (40,077,438) (16,255,190)
-- -- -- --
Net Increase (Decrease) in Net Assets
Derived from Principal Transactions (3,488,709) 17,681,734 22,433,768 2,570,084
-- -- -- --
Net Increase (Decrease) in Net Assets (3,215,200) 17,903,372 25,394,834 2,367,405
-- -- -- --
NET ASSETS--Beginning of Period 17,903,372 -- 2,367,405 --
-- -- -- --
NET ASSETS--End of Period $14,688,172 $17,903,372 $27,762,239 $2,367,405
-- -- -- --
-- -- -- --
</TABLE>
* COMMENCEMENT OF OPERATIONS: MAY 7, 1997--MONEY MARKET SUBACCOUNT AND OTC
SUBACCOUNT
See Notes to Financial Statements.
16
<PAGE>
RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S.
PRECIOUS GOVERNMENT U.S.
METALS PRECIOUS BOND GOVERNMENT
SUBACCOUNT METALS SUBACCOUNT BOND
SIX SUBACCOUNT SIX SUBACCOUNT
MONTHS PERIOD MONTHS PERIOD
ENDED ENDED ENDED ENDED
JUNE DECEMBER JUNE DECEMBER
30, 31, 30, 31,
1998 1997* 1998 1997*
-- -- -- --
<S> <C> <C>
(unaudited) (unaudited)
CHANGES FROM OPERATIONS
Net Investment Income (Loss) $(15,091) $(5,585) $8,431 $5,858
Net Realized Gain (Loss) on
Investments 17,553 (365,727) 25,954 14,916
Net Change in Unrealized Appreciation
(Depreciation) of Investments (36,465) 39,904 24,604 16,633
-- -- -- --
Net Increase (Decrease) in Net Assets
from Operations (34,003) (331,408) 58,989 37,407
-- -- -- --
CHANGES FROM PRINCIPAL TRANSACTIONS
Contract Purchase Payments less Sales
and Administrative Expenses and
Applicable Premium Taxes 8,943,281 4,476,176 6,980,197 3,840,174
Contract Terminations (9,360,441) (3,626,858) (6,469,012) (2,985,562)
-- -- -- --
Net Increase (Decrease) in Net Assets
Derived from Principal Transactions (417,160) 849,318 511,185 854,612
-- -- -- --
Net Increase (Decrease) in Net Assets (451,163) 517,910 570,174 892,019
-- -- -- --
NET ASSETS--Beginning of Period 517,910 -- 892,019 --
-- -- -- --
NET ASSETS--End of Period $66,747 $517,910 $1,462,193 $892,019
-- -- -- --
-- -- -- --
</TABLE>
* COMMENCEMENT OF OPERATIONS: MAY 29, 1997--PRECIOUS METALS SUBACCOUNT AND U.S.
GOVERNMENT BOND SUBACCOUNT
See Notes to Financial Statements.
17
<PAGE>
RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
JUNO
SUBACCOUNT JUNO
SIX SUBACCOUNT
MONTHS PERIOD
ENDED ENDED
JUNE DECEMBER
30, 31,
1998 1997*
-- --
<S> <C>
(unaudited)
CHANGES FROM OPERATIONS
Net Investment Income (Loss) $1,777 $6,316
Net Realized Gain (Loss) on
Investments (8,137) (26,480)
Net Change in Unrealized Appreciation
(Depreciation) of Investments (353) --
-- --
Net Increase (Decrease) in Net Assets
from Operations (6,713) (20,164)
-- --
CHANGES FROM PRINCIPAL TRANSACTIONS
Contract Purchase Payments less Sales
and Administrative Expenses and
Applicable Premium Taxes 3,034,467 6,578,572
Contract Terminations (2,972,351) (6,558,408)
-- --
Net Increase (Decrease) in Net Assets
Derived from Principal Transactions 62,116 20,164
-- --
Net Increase (Decrease) in Net Assets 55,403 --
-- --
NET ASSETS--Beginning of Period -- --
-- --
NET ASSETS--End of Period $55,403 $--
-- --
-- --
</TABLE>
* COMMENCEMENT OF OPERATIONS: MAY 7, 1997--JUNO SUBACCOUNT
See Notes to Financial Statements.
18
<PAGE>
RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT
SUPPLEMENTARY INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NOVA NOVA URSA URSA
SUBACCOUNT SUBACCOUNT* SUBACCOUNT SUBACCOUNT*
SIX MONTHS ENDED PERIOD ENDED SIX MONTHS ENDED JUNE 10, 1997 TO
JUNE 30, 1998 DECEMBER 31, 1997 JUNE 30, 1998 DECEMBER 31, 1997
---------------- ----------------- ---------------- -----------------
<S> <C> <C> <C> <C>
(unaudited) (unaudited)
PER ACCUMULATION UNIT INCOME
PERFORMANCE:
ACCUMULATION UNIT VALUE-- BEGINNING OF
PERIOD $ 12.21 $ 10.00 $ 8.07 $ 9.36
---------------- ----------------- ---------------- -----------------
Investment Income .25 .29 .17 .12
Expenses .24 .22 .14 .13
---------------- ----------------- ---------------- -----------------
Net Investment Income (Loss) .01 .07 .03 (.01)
Net Realized and Unrealized Gains
(Losses) on Securities 2.35 2.14 (1.15) (1.28)
---------------- ----------------- ---------------- -----------------
Net Increase (Decrease) in
Accumulation Unit Value 2.36 2.21 (1.12) (1.29)
---------------- ----------------- ---------------- -----------------
ACCUMULATION UNIT VALUE-- END OF PERIOD $ 14.57 $ 12.21 $ 6.95 $ 8.07
---------------- ----------------- ---------------- -----------------
---------------- ----------------- ---------------- -----------------
RATIOS TO AVERAGE NET ASSETS**
Gross Expenses 4.11% 9.09% 4.27% 8.95%
Net Expenses 3.59% 2.80% 3.70% 2.90%
Net Investment Income (Loss) 0.14% 0.91% 0.85% (0.27)%
SUPPLEMENTARY DATA:
Portfolio Turnover Rate*** 0% 164.30% 0% 0%
Net Assets, End of Period (000's
omitted) $ 22,135 $ 10,448 $ 3,218 $ 2,879
Number of Accumulation Units
Outstanding at End of Period 1,518,888 855,862 463,004 356,784
<CAPTION>
URSA URSA
SUBACCOUNT* SUBACCOUNT*
MAY 24, 1997 TO MAY 7, 1997 TO
JUNE 3, 1997 MAY 21, 1997
--------------- --------------
<S> <C> <C>
PER ACCUMULATION UNIT INCOME
PERFORMANCE:
ACCUMULATION UNIT VALUE-- BEGINNING OF
PERIOD $ 9.57 $ 10.00
--------------- --------------
Investment Income .01 .01
Expenses .01 .05
--------------- --------------
Net Investment Income (Loss) .00 (.04)
Net Realized and Unrealized Gains
(Losses) on Securities .01 (.33)
--------------- --------------
Net Increase (Decrease) in
Accumulation Unit Value .01 (.37)
--------------- --------------
ACCUMULATION UNIT VALUE-- END OF PERIOD $ 9.58 $ 9.63
--------------- --------------
--------------- --------------
RATIOS TO AVERAGE NET ASSETS**
Gross Expenses 85.10% 13.62%
Net Expenses 2.90% 2.90%
Net Investment Income (Loss) 2.76% (10.05)%
SUPPLEMENTARY DATA:
Portfolio Turnover Rate*** 0% 0%
Net Assets, End of Period (000's
omitted) $ -- $ --
Number of Accumulation Units
Outstanding at End of Period -- --
</TABLE>
* COMMENCEMENT OF OPERATIONS: NOVA SUBACCOUNT AND URSA SUBACCOUNT--MAY 7,
1997
DUE TO THE NATURE OF THE INVESTMENT ACTIVITY, CERTAIN SUBACCOUNTS MAY
EXPERIENCE PERIODS WITH ZERO NET ASSETS. FINANCIAL HIGHLIGHTS ARE
PRESENTED FOR PERIODS WITH NET ASSETS GREATER THAN ZERO ONLY. PER
ACCUMULATION UNIT AMOUNTS ARE CALCULATED USING AVERAGE OUTSTANDING
UNITS.
** ANNUALIZED
*** PORTFOLIO TURNOVER RATE IS CALCULATED WITHOUT REGARD TO SHORT-TERM
SECURITIES HAVING A MATURITY OF LESS THAN ONE YEAR.
19
<PAGE>
RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT
SUPPLEMENTARY INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY MONEY
MARKET MARKET OTC OTC
SUBACCOUNT SUBACCOUNT* SUBACCOUNT SUBACCOUNT*
SIX MONTHS ENDED PERIOD ENDED SIX MONTHS ENDED PERIOD ENDED
JUNE 30, 1998 DECEMBER 31, 1997 JUNE 30, 1998 DECEMBER 31, 1997
---------------- ----------------- ---------------- -----------------
<S> <C> <C> <C> <C>
(unaudited) (unaudited)
PER ACCUMULATION UNIT INCOME
PERFORMANCE:
ACCUMULATION UNIT VALUE--BEGINNING OF
PERIOD $ 10.32 $ 10.00 $ 10.65 $ 10.00
---------------- ----------------- ---------------- -----------------
Investment Income .29 .52 .03 .12
Expenses .16 .21 .22 .21
---------------- ----------------- ---------------- -----------------
Net Investment Income (Loss) .13 .31 (.19) (.09)
Net Realized and Unrealized Gains
(Losses) on Securities (.00) .01 3.90 .74
---------------- ----------------- ---------------- -----------------
Net Increase (Decrease) in
Accumulation Unit Value .13 .32 3.71 .65
---------------- ----------------- ---------------- -----------------
ACCUMULATION UNIT VALUE--END OF PERIOD $ 10.45 $ 10.32 $ 14.36 $ 10.65
---------------- ----------------- ---------------- -----------------
---------------- ----------------- ---------------- -----------------
RATIOS TO AVERAGE NET ASSETS**
Gross Expenses 3.86% 6.82% 3.97% 9.07%
Net Expenses 3.00% 2.20% 3.60% 2.80%
Net Investment Income (Loss) 2.56% 3.34% (3.02)% (1.22)%
SUPPLEMENTARY DATA:
Portfolio Turnover Rate*** 0% 0% 351.34% 399.92%
Net Assets, End of Period (000's
omitted) $ 14,688 $ 17,903 $ 27,762 $ 2,367
Number of Accumulation Units
Outstanding at End of Period 1,405,279 1,734,974 1,933,702 222,217
<CAPTION>
PRECIOUS PRECIOUS
METALS METALS
SUBACCOUNT SUBACCOUNT*
SIX MONTHS ENDED PERIOD ENDED
JUNE 30, 1998 DECEMBER 31, 1997
---------------- -----------------
<S> <C> <C>
(unaudited)
PER ACCUMULATION UNIT INCOME
PERFORMANCE:
ACCUMULATION UNIT VALUE--BEGINNING OF
PERIOD $ 7.02 $ 10.00
---------------- -----------------
Investment Income .04 .03
Expenses .14 .14
---------------- -----------------
Net Investment Income (Loss) (.10) (.11)
Net Realized and Unrealized Gains
(Losses) on Securities (.31) (2.87)
---------------- -----------------
Net Increase (Decrease) in
Accumulation Unit Value (.41) (2.98)
---------------- -----------------
ACCUMULATION UNIT VALUE--END OF PERIOD $ 6.61 $ 7.02
---------------- -----------------
---------------- -----------------
RATIOS TO AVERAGE NET ASSETS**
Gross Expenses 4.22% 9.76%
Net Expenses 3.60% 2.80%
Net Investment Income (Loss) (2.70)% (2.19)%
SUPPLEMENTARY DATA:
Portfolio Turnover Rate*** 729.13% 828.23%
Net Assets, End of Period (000's
omitted) $ 67 $ 518
Number of Accumulation Units
Outstanding at End of Period 10,094 73,827
</TABLE>
* COMMENCEMENT OF OPERATIONS: MONEY MARKET SUBACCOUNT AND OTC
SUBACCOUNT--MAY 7, 1997; PRECIOUS METALS SUBACCOUNT--MAY 29, 1997;
DUE TO THE NATURE OF THE INVESTMENT ACTIVITY, CERTAIN SUBACCOUNTS MAY
EXPERIENCE PERIODS WITH ZERO NET ASSETS. FINANCIAL HIGHLIGHTS ARE
PRESENTED FOR PERIODS WITH NET ASSETS GREATER THAN ZERO ONLY. PER
ACCUMULATION UNIT AMOUNTS ARE CALCULATED USING AVERAGE OUTSTANDING
UNITS.
** ANNUALIZED
*** PORTFOLIO TURNOVER RATE IS CALCULATED WITHOUT REGARD TO SHORT-TERM
SECURITIES HAVING A MATURITY OF LESS THAN ONE YEAR.
20
<PAGE>
RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT
SUPPLEMENTARY INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. U.S. U.S.
GOVERNMENT GOVERNMENT GOVERNMENT U.S. U.S.
BOND BOND BOND GOVERNMENT GOVERNMENT
SUBACCOUNT SUBACCOUNT* SUBACCOUNT* BOND BOND
SIX MONTHS AUGUST 18, 1997 JULY 29, 1997 SUBACCOUNT* SUBACCOUNT*
ENDED TO TO JUNE 24, 1997 TO MAY 29, 1997 TO
JUNE 30, 1998 DECEMBER 31, 1997 AUGUST 12, 1997 JULY 14, 1997 JUNE 5, 1997
------------- ----------------- --------------- ---------------- ---------------
<S> <C> <C> <C> <C> <C>
(unaudited)
PER ACCUMULATION UNIT INCOME
PERFORMANCE:
ACCUMULATION UNIT VALUE--BEGINNING OF
PERIOD $ 11.82 $ 10.70 $ 10.92 $ 10.44 $ 10.00
------------- ----------------- --------------- ---------------- ---------------
Investment Income .31 .24 .03 .13 .01
Expenses .19 .09 .01 .03 .01
------------- ----------------- --------------- ---------------- ---------------
Net Investment Income (Loss) .12 .15 .02 .10 .00
Net Realized and Unrealized Gains
(Losses) on Securities .57 .97 (.38) .13 .15
------------- ----------------- --------------- ---------------- ---------------
Net Increase (Decrease) in
Accumulation Unit Value .69 1.12 (.36) .23 .15
------------- ----------------- --------------- ---------------- ---------------
ACCUMULATION UNIT VALUE--END OF PERIOD $ 12.51 $ 11.82 $ 10.56 $ 10.67 $ 10.15
------------- ----------------- --------------- ---------------- ---------------
------------- ----------------- --------------- ---------------- ---------------
RATIOS TO AVERAGE NET ASSETS**
Gross Expenses 3.76% 7.20% 49.63% 12.68% 5.43%
Net Expenses 3.20% 2.40% 2.40% 2.40% 2.40%
Net Investment Income (Loss) 2.01% 3.49% 3.80% 7.94% 1.86%
SUPPLEMENTARY DATA:
Portfolio Turnover Rate*** 1077.28% 846.49% 0% 0% 0%
Net Assets, End of Period (000's
omitted) $ 1,462 $ 892 $ -- $ -- $ --
Number of Accumulation Units
Outstanding at End of Period 116,899 75,493 -- -- --
</TABLE>
* COMMENCEMENT OF OPERATIONS: U. S. GOVERNMENT BOND SUBACCOUNT--MAY 29,
1997
DUE TO THE NATURE OF THE INVESTMENT ACTIVITY, CERTAIN SUBACCOUNTS MAY
EXPERIENCE PERIODS WITH ZERO NET ASSETS. FINANCIAL HIGHLIGHTS ARE
PRESENTED FOR PERIODS WITH NET ASSETS GREATER THAN ZERO ONLY. PER
ACCUMULATION UNIT AMOUNTS ARE CALCULATED USING AVERAGE OUTSTANDING
UNITS.
** ANNUALIZED
*** PORTFOLIO TURNOVER RATE IS CALCULATED WITHOUT REGARD TO SHORT-TERM
SECURITIES HAVING A MATURITY OF LESS THAN ONE YEAR.
21
<PAGE>
RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT
SUPPLEMENTARY INFORMATION (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
JUNO JUNO
SUBACCOUNT JUNO SUBACCOUNT JUNO
MARCH 4, 1998 TO SUBACCOUNT FEBRUARY 23, 1998 SUBACCOUNT
JUNE 30, 1998 MARCH 2, 1998 TO FEBRUARY 25, 1998 FEBRUARY 2, 1998
---------------- ------------- -------------------- ----------------
<S> <C> <C> <C> <C>
PER ACCUMULATION UNIT INCOME
PERFORMANCE:
ACCUMULATION UNIT VALUE--BEGINNING OF
PERIOD $ 9.20 $ 9.09 $ 9.03 $ 8.98
------ ------ ------ ------
Investment Income .16 .00 .00 .00
Expenses .11 .00 .00 .00
------ ------ ------ ------
Net Investment Income (Loss) .05 .00 .00 .00
Net Realized and Unrealized Gains
(Losses) on Securities (.65) .00 .04 .00
------ ------ ------ ------
Net Increase (Decrease) in Accumulation
Unit Value (.60) .00 .04 .00
------ ------ ------ ------
ACCUMULATION UNIT VALUE--END OF PERIOD $ 8.60 $ 9.09 $ 9.07 $ 8.98
------ ------ ------ ------
------ ------ ------ ------
RATIOS TO AVERAGE NET ASSETS*
Gross Expenses 3.94% 5.79% 4.22% 3.93%
Net Expenses 3.70% 3.70% 3.70% 3.70%
Net Investment Income (Loss) 1.67% 1.93% 1.79% 2.45%
SUPPLEMENTARY DATA:
Portfolio Turnover Rate** 0% 0% 0% 0%
Net Assets, End of Period (000's
omitted) $ 55 $ -- $ -- $ --
Number of Accumulation Units
Outstanding at End of Period 6,440 -- -- --
<CAPTION>
JUNO
SUBACCOUNT
JANUARY 20, 1998 TO
JANUARY 25, 1998
-------------------
<S> <C>
PER ACCUMULATION UNIT INCOME
PERFORMANCE:
ACCUMULATION UNIT VALUE--BEGINNING OF
PERIOD $ 8.88
------
Investment Income .01
Expenses .01
------
Net Investment Income (Loss) .00
Net Realized and Unrealized Gains
(Losses) on Securities .11
------
Net Increase (Decrease) in Accumulation
Unit Value .11
------
ACCUMULATION UNIT VALUE--END OF PERIOD $ 8.99
------
------
RATIOS TO AVERAGE NET ASSETS*
Gross Expenses 4.39%
Net Expenses 3.70%
Net Investment Income (Loss) 1.75%
SUPPLEMENTARY DATA:
Portfolio Turnover Rate** 0%
Net Assets, End of Period (000's
omitted) $ --
Number of Accumulation Units
Outstanding at End of Period --
</TABLE>
DUE TO THE NATURE OF THE INVESTMENT ACTIVITY, CERTAIN SUBACCOUNTS MAY
EXPERIENCE PERIODS WITH ZERO NET ASSETS. FINANCIAL HIGHLIGHTS ARE
PRESENTED FOR PERIODS WITH NET ASSETS GREATER THAN ZERO ONLY. PER
ACCUMULATION UNIT AMOUNTS ARE CALCULATED USING AVERAGE OUTSTANDING
UNITS.
* ANNUALIZED
** PORTFOLIO TURNOVER RATE IS CALCULATED WITHOUT REGARD TO SHORT-TERM
SECURITIES HAVING A MATURITY OF LESS THAN ONE YEAR.
22
<PAGE>
RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT
SUPPLEMENTARY INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
JUNO
JUNO JUNO SUBACCOUNT* JUNO JUNO
SUBACCOUNT* SUBACCOUNT* JULY 24, 1997 SUBACCOUNT* SUBACCOUNT*
OCTOBER 22, 1997 TO AUGUST 26, 1997 TO TO JULY 7, JUNE 16, 1997 TO
DECEMBER 11, 1997 OCTOBER 19, 1997 AUGUST 11, 1997 1997 JULY 2, 1997
------------------- ------------------ --------------- ----------- ----------------
<S> <C> <C> <C> <C> <C>
PER ACCUMULATION UNIT INCOME
PERFORMANCE:
ACCUMULATION UNIT VALUE--BEGINNING OF
PERIOD $ 9.50 $ 9.72 $ 9.41 $ 9.59 $ 9.71
------- ------ ------ ----------- ------
Investment Income .07 .07 .03 .00 .02
Expenses (.04) .06 .02 .00 .02
------- ------ ------ ----------- ------
Net Investment Income (Loss) .11 .01 .01 .00 .00
Net Realized and Unrealized Gains
(Losses) on Securities (.60) (.21) .26 (.05) (.03)
------- ------ ------ ----------- ------
Net Increase (Decrease) in
Accumulation Unit Value (.49) (.20) .27 (.05) (.03)
------- ------ ------ ----------- ------
ACCUMULATION UNIT VALUE--END OF PERIOD $ 9.01 $ 9.52 $ 9.68 $ 9.54 $ 9.68
------- ------ ------ ----------- ------
------- ------ ------ ----------- ------
RATIOS TO AVERAGE NET ASSETS**
Gross Expenses 15.13% 7.88% 3.23% 111.10% 5.71%
Net Expenses 2.90% 2.90% 2.90% 2.90% 2.90%
Net Investment Income (Loss) 8.68% 0.80% 1.50% 1.50% 1.29%
SUPPLEMENTARY DATA:
Portfolio Turnover Rate*** 0% 0% 0% 0% 0%
Net Assets, End of Period (000's
omitted) $ -- $ -- $ -- $ -- $ --
Number of Accumulation Units
Outstanding at End of Period -- -- -- -- --
<CAPTION>
JUNO
SUBACCOUNT*
MAY 7, 1997 TO
JUNE 3, 1997
--------------
<S> <C>
PER ACCUMULATION UNIT INCOME
PERFORMANCE:
ACCUMULATION UNIT VALUE--BEGINNING OF
PERIOD $ 10.00
-------
Investment Income .04
Expenses .04
-------
Net Investment Income (Loss) .00
Net Realized and Unrealized Gains
(Losses) on Securities (.14)
-------
Net Increase (Decrease) in
Accumulation Unit Value (.14)
-------
ACCUMULATION UNIT VALUE--END OF PERIOD $ 9.86
-------
-------
RATIOS TO AVERAGE NET ASSETS**
Gross Expenses 6.13%
Net Expenses 2.90%
Net Investment Income (Loss) (0.37)%
SUPPLEMENTARY DATA:
Portfolio Turnover Rate*** 0%
Net Assets, End of Period (000's
omitted) $ --
Number of Accumulation Units
Outstanding at End of Period --
</TABLE>
* COMMENCEMENT OF OPERATIONS: JUNO SUBACCOUNT--MAY 7, 1997
DUE TO THE NATURE OF THE INVESTMENT ACTIVITY, CERTAIN SUBACCOUNTS MAY
EXPERIENCE PERIODS WITH ZERO NET ASSETS. FINANCIAL HIGHLIGHTS ARE
PRESENTED FOR PERIODS WITH NET ASSETS GREATER THAN ZERO ONLY. PER
ACCUMULATION UNIT AMOUNTS ARE CALCULATED USING AVERAGE OUTSTANDING
UNITS.
** ANNUALIZED
*** PORTFOLIO TURNOVER RATE IS CALCULATED WITHOUT REGARD TO SHORT-TERM
SECURITIES HAVING A MATURITY OF LESS THAN ONE YEAR.
23
<PAGE>
RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
The Rydex Advisor Variable Annuity Account (the "Account") is registered with
the Securities and Exchange Commission under the Investment Company Act of 1940
as a non-diversified, open-ended investment company. The Account consists of
seven Subaccounts: the Nova Subaccount, the Ursa Subaccount, the Money Market
Subaccount, the OTC Subaccount, the Precious Metals Subaccount, the U.S.
Government Bond Subaccount, and the Juno Subaccount, and is managed by Padco
Advisors II, Inc. ("PADCO"). Padco Financial Services, Inc. ("PFSI") acts as
principal underwriter for the Account. The following significant accounting
policies are in conformity with generally accepted accounting principles and are
consistently followed by the Account in the preparation of its financial
statements.
The Account was established as a segregated investment account for individual
variable annuity contracts issued by Great American Reserve Insurance Company
("GARCO"). GARCO is an indirect wholly owned subsidiary of Conseco, Inc., a
publicly-held specialized financial services company listed on the New York
Stock Exchange.
SECURITY VALUATION
Securities listed on an exchange are valued at the latest quoted sales prices as
of 4:00 P.M. on the valuation date. Securities not traded on an exchange are
valued at their last sales price. Listed options held by the Account are valued
at their last bid price. Over-the-counter options held by the Account are valued
using the average bid price obtained from one or more securities dealers. The
value of futures contracts purchased and sold by the Account are accounted for
using the unrealized gain or loss on the contracts that is determined by marking
the contracts to their current realized settlement prices. Short-term securities
with less than sixty days to maturity are valued at amortized cost, which
approximates market. Securities and assets for which market quotations are not
readily available are valued at fair value as determined in good faith by or
under the direction of the Board of Managers.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME
Securities transactions are recorded on a trade date basis. Realized gains and
losses from securities transactions are recorded on the identified cost basis.
Dividend income is recorded on the ex-dividend date. Interest income and
expenses are accrued on a daily basis.
24
<PAGE>
RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ORGANIZATION COSTS
Deferred organization costs represent expenses incurred and paid on behalf of
the Account by GARCO and PADCO. These expenses, which total approximately
$821,573, will be reimbursed to GARCO and PADCO by the Account. These initial
costs were allocated to the Subaccounts within the Account. The Account is
amortizing the total organization costs on a straight line basis over a five
year period beginning with the commencement of operations. These amortized costs
are then allocated to the Subaccounts daily and reconciled and settled monthly
between the Subaccounts on the basis of the relative net assets of each
Subaccount to the total assets of the Account. The monthly amortized amount is
paid to PADCO and GARCO. At June 30, 1998, accrued organization costs payable by
the Account to GARCO and PADCO were $150,808 and $483,106, respectively.
VALUE OF AN ACCUMULATION UNIT
The value of an accumulation unit is determined by dividing the current market
value of total Subaccount assets, less liabilities called net assets, by the
total number of units of that Subaccount outstanding. When the asset level of a
Subaccount is at zero, the Account's policy is to calculate the accumulation
unit value for that Subaccount each day based on the same day change in the net
asset value of the public Rydex Mutual fund comparable to that Subaccount,
commencing with the last reported value of the Subaccount.
OPTIONS AND FUTURES
Upon the purchase of a put option or a call option by a Subaccount, the premium
paid is recorded as an investment, the value of which is marked-to-market daily.
When a purchased option expires the Subaccount will realize a loss in the amount
of the cost of the option. When a Subaccount enters into a closing sale
transaction, the Subaccount will realize a gain or loss depending on whether the
proceeds from the closing sale transaction are greater or less than the cost of
the option. When a Subaccount exercises a put option, it will realize a gain or
loss from the sale of the underlying security and the proceeds from such sale
will be decreased by the premium originally paid. When a Subaccount exercises a
call option, the cost of the security which the Subaccount purchases upon
exercise will be increased by the premium originally paid.
When a Subaccount writes a call option or a put option, an amount equal to the
premium received by the Subaccount is recorded as a liability, the value of
which is marked-to-market daily. When a written option expires, the Subaccount
realizes a gain equal to the amount of the premium received. When a Subaccount
enters into a closing purchase transaction, the Subaccount realizes a gain (or
loss if the cost of the closing purchase transaction exceeds the premium
received when the option
25
<PAGE>
RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
was sold) without regard to any unrealized gain or loss on the underlying
security, and the liability related to the option is eliminated. When a written
call option is exercised, the Subaccount realizes a gain or loss from the sale
of the underlying security and the proceeds from such sale are increased by the
premium originally received. When a written put option is exercised, the amount
of the premium originally received will reduce the cost of the security that the
Subaccount purchased upon exercise.
Futures contracts provide for the future sale by one party and the future
purchase by another party of a specified amount of a specified financial
instrument at an agreed upon price, date, time, and place. Upon entering into a
futures contract, the Subaccount is required to deposit with the broker an
amount of cash or cash equivalents equal to a certain percentage of the contract
amount. This is known as "initial margin." Subsequent payments ("variation
margin") are made or received by the Subaccount each day, depending on the daily
fluctuation of the value of the contract. The daily changes in contract value
are recorded as unrealized gains or losses and the Subaccount recognizes a
realized gain or loss when the contract is closed. Futures contracts are valued
daily at the settlement price established by the board of trade or exchange on
which they are traded.
SHORT SALES
The Subaccounts may make short sales of securities. A short sale is a
transaction in which the Subaccount sells a security it does not own (but has
borrowed) in anticipation of a decline in the market price of the security. A
Subaccount may make short sales to offset a potential decline in a long position
or a group of long positions, or if the Subaccount believes that a decline in
the price of a particular security or group of securities is likely.
When a Subaccount makes a short sale, the proceeds it receives are retained by
the broker until the Subaccount replaces the borrowed security. In order to
deliver the security to the buyer, the Subaccount must arrange through a broker
to borrow the security, and in so doing, the Subaccount becomes obligated to
replace the security borrowed at its market price at the time of replacement,
whatever that price may be. The Subaccount may have to pay a premium to borrow
the security. The Subaccount must also pay any dividends or interest payable on
the security until the Subaccount replaces the security.
The Subaccount's obligation to replace the security borrowed in connection with
the short sale will be secured by collateral deposited with the broker,
consisting of cash or U. S. Government securities or other securities acceptable
to the broker. In addition, with respect to any short sale, other than short
sales against the box, the Subaccount will be required to maintain a segregated
account of securities as collateral in an amount such that the value of the sum
of collateral amounts is at all
26
<PAGE>
RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
times equal to at least 100% of the current market value of the securities sold
short. The collateral does not necessarily limit the Subaccount's potential loss
on a short sale, which may exceed the entire amount of the collateral.
If the price of the security sold short increases between the time of the short
sale and the time the Subaccount replaces the borrowed security, the Subaccount
will incur a loss, and if the price declines during this period, the Subaccount
will realize a capital gain. Any realized gain will be decreased, and any
incurred loss increased, by the amount of transactional costs and any premium,
dividend, or interest which the Subaccount may have to pay in connection with
such short sale.
2. FINANCIAL INSTRUMENTS
As part of its investment program, the Subaccounts may utilize options and
futures. The risk associated with purchasing options is limited to the premium
originally paid. Options written by a Subaccount involve to varying degrees,
risk of loss in excess of the option value reflected in the Statement of Assets
and Liabilities. The risk in writing a covered call option is that a Subaccount
may forego the opportunity for profit if the market price of the underlying
security increases and the option is exercised. The risk in writing a covered
put option is that a Subaccount may incur a loss if the market price of the
underlying security decreases and the option is exercised. In addition, there is
the risk a Subaccount may not be able to enter into a closing transaction
because of an illiquid secondary market or, for over-the-counter options,
because of the counterparty's inability to perform.
There are several risks in connection with the use of futures contracts. Futures
contracts involve, to varying degrees, risk of loss in excess of amounts
reflected in the financial statements. The change in the value of futures
contracts primarily corresponds with the value of their underlying instruments,
which may not correlate with the change in the value of the hedged instruments.
In addition, there is the risk that a Subaccount may not be able to enter into a
closing transaction because of an illiquid secondary market.
In conjunction with the use of options and futures, as well as short sales of
securities, the Subaccounts are required to maintain collateral in various
forms. The Subaccounts use, where appropriate depending upon the financial
instrument utilized and the broker involved, margin deposits at the broker or
repurchase agreements allocated to each Subaccount as collateral for options,
futures, and securities sold short.
3. FEDERAL INCOME TAXES
No provision for Federal income taxes has been made in the accompanying
financial statements because the operations of the Account are included in the
operations of GARCO, which is treated as
27
<PAGE>
RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
a life insurance company for federal income tax purposes under the Internal
Revenue Code. Net investment income and net realized gains (losses) are retained
in the Account and are not taxable until received by the contract owner or
beneficiary in the form of annuity payments or other distributions.
4. USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amount of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
5. DEDUCTIONS AND EXPENSES
Although periodic retirement payments to contract owners vary according to the
investment performance of the portfolios, such expenses are not affected by
expense or mortality experience because GARCO assumes the mortality risk and the
expense risk under the contracts.
The mortality risk assumed by GARCO results from the life annuity payment option
in the contracts in which GARCO agrees to make annuity payments regardless of
how long a particular annuitant or other payee lives. The annuity payments are
determined in accordance with annuity purchase rate provisions established at
the time the contracts are issued. Based on the actual determination of expected
mortality, GARCO is required to fund any deficiency in the annuity payment
reserves from its general account assets.
A fee, which is equal on an annual basis to 1.25% of the daily value of the
Account, is deducted on a daily basis from each Subaccount for assuming the
mortality and expense risks. These fees were $307,149 for the six months ended
June 30, 1998.
An administrative charge, which is equal on an annual basis to .15% of the daily
value of the Account, is deducted on a daily basis from each Subaccount for
contract administrative charges. These fees were $36,859 for the six months
ended June 30, 1998.
6. REPURCHASE AGREEMENTS
The Account transfers uninvested cash balances into a single joint account, the
daily aggregate balance of which is invested in repurchase agreements
collateralized by Federal agency obligations. Collateral is in the possession of
the Account's custodian and it is evaluated daily to ensure that its market
value exceeds the delivery value of the repurchase agreements at maturity. As of
June 30,
28
<PAGE>
RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1998, the repurchase agreements with Fuji Securities, Inc., Paine Webber, Inc.,
Salomon Brothers Smith Barney, Inc., and Prudential Securities, Inc., in the
joint account and the collateral therefore was as follows:
<TABLE>
<CAPTION>
SECURITY TYPE RANGE OF RATES PAR VALUE MARKET VALUE
- --------------------------------------- -------------- ----------- -------------
<S> <C> <C> <C>
United States Treasury Notes 5.375%-7.125% $21,224,000 $ 21,553,133
United States Treasury Bonds 8.125% $ 6,215,000 $ 8,000,000
</TABLE>
Risks arise from the possible delay in recovery of potential loss of rights in
the collateral should the issuer of the repurchase agreement fail financially.
PADCO, acting under the supervision of the Board of Managers, reviews the value
of the collateral and the creditworthiness of those banks and dealers with which
the Account enters into repurchase agreements to evaluate potential risks.
7. INVESTMENT ADVISORY AND TACTICAL ALLOCATION SERVICES
Under the terms of an investment advisory contract, the Account pays PADCO
investment advisory fees calculated at an annual percentage rate of one half of
one percent (0.50%) of the average net assets of the Money Market Subaccount and
the U.S. Government Bond Subaccount, three-quarters of one percent (0.75%) of
the average net assets of the Nova Subaccount, the Precious Metals Subaccount,
and the OTC Subaccount, and nine-tenths of one percent (0.90%) of the average
net assets of the Ursa Subaccount and the Juno Subaccount.
PADCO Services, Inc., (the "Servicer") provides tactical allocation
administrative services to the Account calculated at an annual percentage rate
of two-tenths of one percent (0.20%) of the average net assets of the Money
Market Subaccount, U.S. Government Bond Subaccount, Precious Metals Subaccount,
and the OTC Subaccount; and at an annual rate of one-quarter of one percent
(0.25%) of the average net assets of the Nova Subaccount, the Ursa Subaccount,
and the Juno Subaccount.
The Servicer also provides other necessary services to the Account, such as
accounting and auditing services, legal services, custody, printing and mailing,
etc., on a pass-through basis. Such expenses vary from Subaccount to Subaccount.
PADCO and the Servicer have voluntarily agreed to waive their investment
advisory and tactical allocation administrative service fees and, if necessary,
to reimburse any Subaccount expenses which would cause the ratios of expenses to
average net assets to exceed 3.60%, 3.70%, 3.00%, 3.60%, 3.60%, 3.20%, and 3.70%
for the Nova, Ursa, Money Market, OTC, Precious Metals, U.S. Government Bond,
and Juno Subaccounts, respectively, effective January 1, 1998.
29
<PAGE>
RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
During the six months ended June 30, 1998, the following fees and expenses were
waived by PADCO and the Servicer, or reimbursed by PADCO, in the Subaccount
shown (unaudited):
<TABLE>
<CAPTION>
MISCELLANEOUS TOTAL FEES AND
ADVISORY TACTICAL ALLOCATION EXPENSES EXPENSES WAIVED/
FEES WAIVED FEES WAIVED REIMBURSED REIMBURSED
------------ -------------------- -------------- -----------------
<S> <C> <C> <C> <C>
Nova $ 34,068 $ -- $ -- $ 34,068
Ursa 16,801 -- -- 16,801
Money Market 51,279 20,511 19,251 91,041
OTC 13,348 -- -- 13,348
Precious Metals 2,981 -- -- 2,981
U.S. Government Bond 1,880 612 66 2,558
Juno 694 -- 439 1,133
------------ -------- -------------- -----------------
Total $121,051 $21,123 $19,756 $161,930
------------ -------- -------------- -----------------
------------ -------- -------------- -----------------
</TABLE>
Effective October 24, 1997 through October 24, 1999, the Subaccounts are
required to reimburse PADCO and the Servicer for these expenses, provided that
average net assets have grown or expenses have declined sufficiently to allow
reimbursement without causing the Subaccount's ratio of expenses to average net
assets to exceed the specified rates. In addition to the potential reimbursement
of the amounts shown above during the remainder of the year ended December 31,
1998, fees waived and reimbursed subject to reimbursement to PADCO and the
Servicer during the period ended December 31, 1997, totaling $427,757 as
previously disclosed, are also subject to reimbursement to PADCO and the
Servicer, if the ratio of expenses to average net assets of any Subaccount were
to drop below the ratio specified for that Subaccount at the time the fees were
waived or expenses reimbursed.
8. SECURITIES TRANSACTIONS
During the six months ended June 30, 1998 purchases and sales of investment
securities were (unaudited):
<TABLE>
<CAPTION>
U.S.
MONEY PRECIOUS GOVERNMENT
NOVA URSA MARKET OTC METALS BOND JUNO
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Purchases $-- $-- $-- $50,269,677 $9,196,873 $5,634,090 $--
Sales $-- $-- $-- $28,452,319 $9,619,374 $5,706,648 $--
</TABLE>
The transactions shown above exclude short-term and temporary cash investments.
30
<PAGE>
RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
9. NET ASSETS
Net assets consisted of the following at June 30, 1998 (unaudited):
<TABLE>
<CAPTION>
U.S.
MONEY PRECIOUS GOVERNMENT
NOVA URSA MARKET OTC METALS BOND JUNO
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
----------- ---------- ----------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Paid-In-Capital $18,866,758 $4,032,499 $14,193,025 $25,003,852 $ 432,158 $1,365,797 $ 82,281
Net Investment Income 34,868 21,810 495,147 -- -- 14,289 5,022
Net Investment Loss -- -- -- (116,429) (20,676) -- --
Accumulated Net Realized Gain (Loss) on
Investments 2,415,806 (755,911) -- 558,524 (348,174) 40,870 (31,547)
Net Unrealized Appreciation
(Depreciation) on Investments, Options
and Futures Contracts 817,407 (80,435) -- 2,316,292 3,439 41,237 (353)
----------- ---------- ----------- ----------- ---------- ---------- ----------
Net Assets $22,134,839 $3,217,963 $14,688,172 $27,762,239 $ 66,747 $1,462,193 $ 55,403
----------- ---------- ----------- ----------- ---------- ---------- ----------
----------- ---------- ----------- ----------- ---------- ---------- ----------
</TABLE>
10. INCREASE/DECREASE IN ACCUMULATION UNITS
Transactions in units for the six months ended June 30, 1998 were (unaudited):
<TABLE>
<CAPTION>
U.S.
MONEY PRECIOUS GOVERNMENT
NOVA URSA MARKET OTC METALS BOND JUNO
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
----------- ----------- ------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Units Purchased 10,513,930 11,935,100 17,179,722 4,801,961 1,170,623 583,936 335,084
Units Withdrawn (9,850,903) (11,828,880) (17,509,417) (3,090,476) (1,234,355) (542,530) (328,644)
----------- ----------- ------------- ----------- ----------- ----------- -----------
Net Units Purchased 663,027 106,220 (329,695) 1,711,485 (63,732) 41,406 6,440
----------- ----------- ------------- ----------- ----------- ----------- -----------
----------- ----------- ------------- ----------- ----------- ----------- -----------
</TABLE>
Transactions in units for the period ended December 31, 1997 were:
<TABLE>
<CAPTION>
U.S.
MONEY PRECIOUS GOVERNMENT
NOVA URSA MARKET OTC METALS BOND JUNO
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
----------- ----------- ------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Units Purchased 6,454,734 5,384,612 11,946,671 1,654,828 500,396 358,829 683,854
Units Withdrawn (5,598,872) (5,027,828) (10,211,697) (1,432,611) (426,569) (283,336) (683,854)
----------- ----------- ------------- ----------- ----------- ----------- -----------
Net Units Purchased 855,862 356,784 1,734,974 222,217 73,827 75,493 0
----------- ----------- ------------- ----------- ----------- ----------- -----------
----------- ----------- ------------- ----------- ----------- ----------- -----------
</TABLE>
31
<PAGE>
RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Transactions in dollars for the six months ended June 30, 1998 were (unaudited):
<TABLE>
<CAPTION>
U.S.
MONEY PRECIOUS GOVERNMENT
NOVA URSA MARKET OTC METALS BOND JUNO
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
----------- ----------- ------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Units Purchased $144,754,360 $ 86,304,539 $ 178,682,182 $ 62,511,206 $ 8,943,281 $ 6,980,197 $ 3,034,467
Units Withdrawn (135,998,933) (85,486,057) (182,170,891) (40,077,438) (9,360,441) (6,469,012) (2,972,351)
----------- ----------- ------------- ----------- ----------- ----------- -----------
Net Units Purchased $ 8,755,427 $ 818,482 $ (3,488,709) $ 22,433,768 $ (417,160) $ 511,185 $ 62,116
----------- ----------- ------------- ----------- ----------- ----------- -----------
----------- ----------- ------------- ----------- ----------- ----------- -----------
</TABLE>
Transactions in dollars for the period ended December 31, 1997 were:
<TABLE>
<CAPTION>
U.S.
MONEY PRECIOUS GOVERNMENT
NOVA URSA MARKET OTC METALS BOND JUNO
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
----------- ----------- ------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Units Purchased $ 76,198,580 $ 45,239,040 $ 122,126,822 $ 18,825,274 $ 4,476,176 $ 3,840,174 $ 6,578,572
Units Withdrawn (66,087,249) (42,025,022) (104,445,088) (16,255,190) (3,626,858) (2,985,562) (6,558,408)
----------- ----------- ------------- ----------- ----------- ----------- -----------
Net Units Purchased $ 10,111,331 $ 3,214,018 $ 17,681,734 $ 2,570,084 $ 849,318 $ 854,612 $ 20,164
----------- ----------- ------------- ----------- ----------- ----------- -----------
----------- ----------- ------------- ----------- ----------- ----------- -----------
</TABLE>
11. OPTION CONTRACTS WRITTEN
During the six months ended June 30, 1998 contracts written were (unaudited):
Put Options Written:
<TABLE>
<CAPTION>
OTC SUBACCOUNT
---------------------
NUMBER OF INITIAL
CONTRACTS PREMIUMS
--------- ---------
<S> <C> <C>
Outstanding at Beginning of Period 2 $ 7,994
Options Written 36 75,164
Options Terminated (33) (66,436)
--------- ---------
Outstanding at End of Period 5 $ 16,722
--------- ---------
--------- ---------
</TABLE>
32
