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ALLIANCE CAPITAL
THE HUDSON RIVER TRUST
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Annual Report
December 31, 1997
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ALLIANCE CAPITAL/HUDSON RIVER TRUST
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NOTES ON PERFORMANCE
Performance for each Alliance Portfolio is shown together with comparative
benchmarks, including both unmanaged market indices and universes of managed
portfolios. The Portfolios' annualized net rates of return are based on the
percentage change in the net asset value of Class 1A shares with dividends and
capital gains reinvested. Returns are net of investment management fees and
expenses of the Trust. Total returns for Class 1B shares will differ due to
different expenses. These rates are not representative of the actual return you
would receive under a policy. No policyowner can invest directly in the Trust.
Changes in policy values depend not only on the investment performance of the
Trust, but also on the insurance and administrative charges, applicable sales
charges and the mortality and expense risk charge applicable under a policy.
These policy charges effectively reduce the dollar amount of any net gains and
increase the dollar amount of any net losses. All performance shown is
annualized, unless otherwise noted.
THE BENCHMARKS
Market indices are not subject to any charges for investment advisory fees
typically associated with a managed portfolio. Comparisons with these
benchmarks, therefore, are of limited use. We include them because they are
widely known and may help you to understand the universe of securities from
which each Portfolio is likely to select its holdings.
Portfolio Inception Dates and Comparative Benchmarks:
Alliance Money Market: July 13, 1981; Salomon Brothers Three-Month T-Bill Index
(3-Month T-Bill).
Alliance Intermediate Government Securities: April 1, 1991; Lehman Intermediate
Government Bond Index (Lehman Intermediate Gov't).
Alliance Quality Bond: October 1, 1993; Lehman Aggregate Bond Index (Lehman
Aggregate).
Alliance High Yield: January 2, 1987; Merrill Lynch High Yield Master Index
(Merrill Lynch High Yield).
Alliance Growth & Income: October 1, 1993; 25% Value Line Convertibles Index and
75% Standard & Poor's 500 Index (25% Value Line Conv./75% S&P 500).
Alliance Equity Index: March 1, 1994; S&P 500.
Alliance Common Stock: January 13, 1976; S&P 500.
Alliance Global: August 27, 1987; Morgan Stanley Capital International World
Index (MSCI World).
Alliance International: April 3, 1995; Morgan Stanley International Europe,
Australia, Far East Index (MSCI EAFE).
Alliance Aggressive Stock: January 27, 1986; 50% Russell 2000/50% S&P Mid Cap.
Alliance Small Cap Growth: May 1, 1997; Russell 2000 Growth.
Alliance Conservative Investors: October 2, 1989; 70% Lehman Treasury Bond
Composite Index and 30% S&P 500 (70% Lehman Treas./30% S&P 500).
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ALLIANCE CAPITAL/HUDSON RIVER TRUST
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BENCHMARKS, CONTINUED
Alliance Balanced: January 27, 1986; 50% Lehman Government/Corporate Bond Index
and 50% S&P 500 (50% Lehman Corp./50% S&P 500).
Alliance Growth Investors: October 2, 1989; 30% Lehman Government/Corporate Bond
Index and 70% S&P 500 (30% Lehman Corp./70% S&P 500).
The S&P 500 benchmark includes reinvested dividends. The Lipper Mutual Funds
Survey (Lipper) records the performance of over 7000 mutual funds. According to
Lipper Analytical Services, Inc., the data are presented net of investment
management fees, direct operating expenses, and, for funds with Rule 12b-1
plans, asset-based sales charges. Lipper data provides a more accurate picture
of Trust performance relative to other funds than the market indices.
GROWTH OF A $10,000 INVESTMENT
The charts shown on each portfolio page illustrates the total value of an
assumed investment Class 1A shares of each portfolio of the Hudson River Trust.
The periods illustrated are from the inception dates shown for each Portfolio
through December 31, 1997 unless noted otherwise. The results assume the
reinvestment of dividends and capital gains. Results should not be considered
representative of future gains or losses.
The total value shown reflects management fees and operating expenses of the
Portfolio only. They have not been adjusted for charges and expenses associated
with life insurance policies or annuity contracts. Rates of return on insurance
policies and annuity contracts will be lower because of the deduction of
contract-related charges.
Information on these pages constitutes part of the annual report of The Hudson
River Trust and is not intended for separate use.
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ALLIANCE MONEY MARKET PORTFOLIO
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As a result of technical factors in the fourth quarter of 1997, we laid out a
very distinct strategy in timing yield curve movements. Early in the fourth
quarter, while the yield curve was only modestly steep, we geared investments
toward late November and mid-December maturity placements. This plan enabled us
to take advantage of a steepening yield curve later in the quarter. As funds
matured in November and December, we capitalized on the general need of the
issuer's year-end financing requirements by extending our maturities while
leaving enough cash in the account for year-end liquidity purposes.
As we enter the first quarter of a new year, the yield curve has flattened out,
yet the Portfolio is in position to enjoy higher yields without a tremendous
need for investing until later on in the quarter.
The Fed's monetary policy will likely remain neutral through the first half of
1998. Circumstances such as our continued tight labor market indicate that our
economy is still in a strong enough position to absorb any damage that will be
done by the Asian crisis. The Fed should not have any reason to seriously
consider interest rate hikes or cuts.
In the meantime, with the Portfolio not having any major maturities for the next
several weeks, we are in a position to patiently look for any developments which
could influence the short-term markets.
Raymond Papera, Portfolio Manager
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INVESTMENT OBJECTIVE
High level of current income, while preserving its assets and maintaining
liquidity.
INVESTMENT POLICY
Primarily high-quality U.S. dollar denominated money market
instruments.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1997
Net Assets ........................... $573.6 million
Number of Issues ................................. 36
Average Maturity ............................ 39 days
ASSET MIX DISTRIBUTION (BY MATURITY)
1-30 days ...................................... 47.1%
31-60 days ..................................... 25.9%
61-90 days ..................................... 20.7%
91+ days ........................................ 6.3%
ASSET MIX DISTRIBUTION (BY ISSUER)
Banker's Acceptance ............................. 1.6%
Time Deposits ................................... 2.8%
U.S. Government Agency .......................... 1.0%
Corporate Notes ................................. 2.8%
Variable Rate Securities ....................... 14.5%
Certificates of Deposit ......................... 7.4%
Commercial Paper ............................... 69.9%
ANNUALIZED TOTAL RETURN, AS OF DECEMBER 31, 1997
SINCE
1 YEAR 3 YRS 5 YRS 10 YRS INCEPT.
ALLIANCE
MONEY MARKET 5.42% 5.50% 4.69% 5.78% 7.17%
Lipper Money Market 4.90 5.05 4.31 5.40 6.89
3-Month T-Bill 5.23 5.41 4.71 5.61 6.87
The Alliance Money Market Portfolio started operations on July 13, 1981.
GROWTH OF $10,000 INVESTMENT AS OF DECEMBER 31, 1997
(Invested Ten Years Ago on December 31, 1987)
Total
Date Value
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12/31/87 10,000
12/31/88 10,732
12/31/89 11,717
12/31/90 12,682
12/31/91 13,466
12/31/92 13,942
12/31/93 14,357
12/31/94 14,932
12/31/95 15,790
12/31/96 16,632
12/31/97 17,534
17,534
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ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES PORTFOLIO
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1997 was a year of strong growth for the U.S. economy. Fueled by a tight labor
market, which saw unemployment figures hover around 20-year lows for most of the
year, and record level consumer confidence, U.S. GDP grew at an estimated 3.8%
rate in 1997. In spite of this strong growth, inflation remained remarkably
absent for this late in an expansion. Through December, producer prices were
down 1.2% from year earlier levels while consumer prices posted a modest 1.7%
gain for the same period. In light of the positive inflation environment, the
Federal Reserve remained on the sidelines for most of the year after moving once
in March to increase rates 0.25%.
The U.S. bond market posted solid returns for the year. The relatively stable
interest rate environment throughout most of the year pushed investors to seek
higher yields, driving up returns in the yield oriented sectors, corporates and
mortgage backed securities (MBS). Late in the year, the effects of the financial
turmoil in Southeast Asia spilled over into the U.S. bond market. As the
financial crisis in that region of the world grew, investors in search of a safe
haven spurred a rally in U.S. government bonds as they rushed to buy U.S.
Treasury securities.
As of December 31, 1997, the Portfolio posted returns in-line with its
benchmark, the Lehman Intermediate Government Bond Index. While interest rates
were range-bound throughout most of the year, we increased the Portfolio's
allocation to the MBS sector to increase Portfolio yield. When interest rates
pushed decisively lower during the third quarter, we trimmed MBS exposure and
exchanged holdings for lower coupon pass-throughs to limit exposure to
prepayment risk.
Our outlook for the U.S. remains optimistic. We expect domestic growth to slow
from its 1997 pace to a more sustainable 2.5% rate in 1998. The economic slowing
in Southeast Asia will further temper U.S. growth in the upcoming year as
exports to that region curtail. The Federal Reserve is unlikely to raise
interest rates in the short term in light of the likelihood of slowing growth
and the desire to keep global liquidity at high levels. Until the repercussions
of events in Southeast Asia are fully understood, we expect interest rate
volatility to remain elevated. In this environment, the government sector should
continue to outperform mortgage pass-throughs.
Patricia J. Young and Jeffrey S. Phlegar, Portfolio Managers
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INVESTMENT OBJECTIVE
High current income consistent with relative stability of principal
INVESTMENT POLICY
Primarily debt securities issued or guaranteed by the U.S. Government, its
agencies and instrumentalities. Each investment will have a final maturity of
not more than 10 years or a duration not exceeding that of a 10-year Treasury
note.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1997
Net Assets ............................. $120.2 million
Number of Issues ................................... 20
Average Quality (excluding net cash) ............ Govt.
Average Duration (including net cash) ...... 2.92 years
ASSET MIX DISTRIBUTION (BY DURATION)
0-1 year ........................................ 20.0%
1-3 years ....................................... 33.0%
3-5 years ....................................... 29.9%
5-7 years ....................................... 17.1%
ASSET MIX DISTRIBUTION (BY ISSUER)
Treasury ........................................ 53.0%
Agencies ........................................ 21.7%
Mortgage-Backed Securities ...................... 7.8%
CMOs ............................................ 6.7%
Short-Term & Cash ............................... 10.8%
ANNUALIZED TOTAL RETURN, AS OF DECEMBER 31, 1997
SINCE
1 YEAR 3 YRS 5 YRS INCEPT.
ALLIANCE
INTERMEDIATE GOV'T. SEC. 7.29% 8.06% 5.94% 7.00%
Lipper Int. Gov't. Funds Average 8.08 8.68 6.00 7.19
Lehman Intermediate Government 7.72 8.65 6.39 7.47
The Alliance Intermediate Government Securities Portfolio started operations on
April 1, 1991.
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GROWTH OF $10,000 INVESTMENT AS OF DECEMBER 31, 1997
(Invested at Inception)
Total
Date Value
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12/31/91 11,207
12/31/92 11,835
12/31/93 13,087
12/31/94 12,514
12/31/95 14,182
12/31/96 14,718
12/31/97 15,791
15,791
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ALLIANCE QUALITY BOND PORTFOLIO
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The U.S. bond market posted solid returns in 1997. Throughout most of the year,
interest rates remained relatively stable and investor demand for yield-oriented
securities, corporate bonds as well as mortgage-backed securities, was high. In
spite of strong U.S. economic growth, inflation remained almost non-existent,
further increasing demand in the bond market. Toward year-end, financial turmoil
which began in Southeast Asia, spilled over into other global bond markets,
including the U.S. The resulting "flight to quality" spurred a year-end rally in
U.S. Treasury securities while negatively impacting returns in the corporate,
mortgage and non-U.S. bond sectors.
The Quality Bond Portfolio posted strong positive returns for the year ended
December 31, 1997, largely in-line with those of its unmanaged benchmark, the
Lehman Brothers Aggregate Bond Index. Throughout most of the year, the
Portfolio's holdings were focused on the non-government sectors. The strong U.S.
economy provided solid support for the corporate sector and drove returns for
this sector up. Within the corporate sector, an increase in new issuance by
Yankee issuers (foreign companies which issue bonds denominated in U.S. dollars)
provided significant opportunities. Non-U.S. bonds also posted solid returns
during the year. Economic convergence in Europe, as that continent prepares for
the launch of the Euro, created opportunities, particularly in the non-core
countries (those outside of Germany, France and Italy).
Late in the year, as the effects of the Southeast Asian financial crisis began
to be felt in the U.S. markets, we increased the Portfolio's allocation to U.S.
Treasury and Agency securities and trimmed exposure to the corporate and
mortgage-backed sectors.
Looking forward into 1998, we expect global growth to be slower and inflation
pressures to be reduced, as Asia exports cheaper goods to the world and imports
less from abroad. In the U.S., economic growth will be tempered by increased
global manufacturing capacity and reduced exports. Recent declines in interest
rates, lower commodity prices and lower import prices will restrain inflationary
pressures. Overall, we expect economic growth to slow to a more moderate pace of
2% - 2.5% during the upcoming year. In the near-term, we expect market
volatility to remain high and will maintain the Portfolio's focus on U.S.
Government and Agency securities.
Matthew Bloom, Portfolio Manager
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INVESTMENT OBJECTIVE
High current income consistent with preservation of capital.
INVESTMENT POLICY
Primarily investment grade fixed income securities.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1997
Net Assets ............................. $203.2 million
Number of Issues ................................... 17
Average Quality (excluding net cash) .............. AA+
Average Duration (including net cash) ....... 5.2 years
ASSET MIX DISTRIBUTION (BY DURATION)
0-1 year ........................................ 3.5%
1-2 years ....................................... 14.7%
2-4 years ....................................... 42.9%
4-7 years ....................................... 19.6%
7-10 years ...................................... 7.9%
Over 10 years ................................... 11.4%
ASSET MIX DISTRIBUTION (BY ISSUER)
Government Bonds ................................ 64.8%
Domestic Corporates ............................. 8.5%
Yankee .......................................... 5.4%
Mortgage-Backed Securities ...................... 14.0%
Non-Dollar Dominated ............................ 3.8%
Short-Term & Cash ............................... 3.5%
ANNUALIZED TOTAL RETURN, AS OF DECEMBER 31, 1997
SINCE
1 YEAR 3 YRS INCEPT.
ALLIANCE QUALITY BOND 9.14% 10.40% 5.80%
Lipper Corporate Debt A-Rated 9.17 10.01 5.82
Lehman Aggregate 9.65 10.42 6.51
The Alliance Quality Bond Portfolio started operations on October 1, 1993.
GROWTH OF $10,000 INVESTMENT AS OF DECEMBER 31, 1997
(Invested at Inception)
Total
Date Value
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12/31/93 9,949
12/31/94 9,442
12/31/95 11,050
12/31/96 11,642
12/31/97 12,706
12,706
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ALLIANCE HIGH YIELD PORTFOLIO
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The high yield market experienced its third consecutive banner year. Most high
yield indices outperformed other fixed income markets by 2 to 3%. Record levels
of new issuance and robust mutual fund inflows dominated the market in 1997 for
the second year in a row.
The Alliance High Yield Portfolio had an outstanding year, outperforming its
Lipper peer group by about 5%. This outperformance was primarily due to: an
overweighting in media and telecommunications stocks and a greater emphasis on
single B credits offering more relative value and yield potential.
We feel quite positive about the outlook for the overall economy as well as the
high yield market. Even with slightly lower growth levels in the U.S., inflation
remains low and interest rates remain relatively stable. In the high yield
market, we believe that credit selection will play a major role in high yield
investing going forward. In addition, steering clear of those credits that will
be most affected by the Asian crisis will also be an important tactic.
Wayne Tappe, Portfolio Manager
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INVESTMENT OBJECTIVE
High return by maximizing current income and, to the extent consistent with that
objective, capital appreciation.
INVESTMENT POLICY
Primarily a diversified mix of high yield, fixed income securities involving
greater volatility of price and risk of principal and income than high-quality
fixed income securities.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1997
Net Assets ............................. $421.8 million
Number of Issues ................................... 81
Average Quality (excluding net cash) ................ B
Average Duration (including net cash) ....... 4.8 years
ASSET MIX DISTRIBUTION (BY QUALITY)
AAA-BBB ......................................... 10.0%
BB-B ............................................ 85.7%
CCC and below ................................... 4.3%
ASSET MIX DISTRIBUTION (BY ISSUER)
Corporate Bonds ................................. 80.0%
Foreign Bonds ................................... 10.0%
Short-Term & Cash ............................... 10.0%
ANNUALIZED TOTAL RETURN, AS OF DECEMBER 31, 1997
SINCE
1 YEAR 3 YRS 5 YRS 10 YRS INCEPT.
ALLIANCE
HIGH YIELD 18.48% 20.42% 15.89% 12.80% 12.04%
Lipper High Yield 12.96 14.17 11.36 10.66 9.78
ML Master High Yield 12.83 14.54 11.72 12.09 11.39
The Alliance High Yield Portfolio started operations on January 2, 1987.
GROWTH OF $10,000 INVESTMENT AS OF DECEMBER 31, 1997
(Invested Ten Years Ago on December 31, 1987)
Total
Date Value
---- -----
12/31/87 10,000
12/31/88 10,975
12/31/89 11,538
12/31/90 11,410
12/31/91 14,203
12/31/92 15,952
12/31/93 19,645
12/31/94 19,100
12/31/95 22,904
12/31/96 28,145
12/31/97 33,348
33,348
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ALLIANCE GROWTH & INCOME PORTFOLIO
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The U.S. equity markets grew strongly in 1997 as the S&P 500 rose 33.4%. The S&P
500 has risen 125% in the past three years. Indices comprised of smaller stocks
than the S&P 500 exhibited less robust results, with the S&P 400 mid-cap index
up 32.3%, the S&P 600 small-cap index up 25.6% and the Russell 2000 Index up
22.4%. Growth stocks, driven by investor cash flow and earnings momentum,
significantly outperformed value stocks whose performance is based more on low
valuations to earnings.
The Portfolio's conservative focus on low valuation, high-dividend paying
companies prevented it from fully participating in the market rally. The
portfolio underperformed compared to its unmanaged benchmark, 75% S&P 500 and
25% Value Line Convertibles. The results of the Portfolio were essentially
identical to those of its peer group, the Lipper Growth and Income Funds
universe, however.
Looking forward, the S&P 500 Index is trading at a P/E multiple of 19-20x
reasonable 1998 operating earnings. During historical periods with analogous
inflation and interest rate dynamics, fiscal and monetary discipline, and
competitive position of domestic corporations, the market multiple has typically
ranged from 18-22x forward earnings. The market is therefore probably fairly
valued. The economy is growing above trend, and since the beginning of 1996, the
labor markets and goods markets have tightened more or less continuously. This
situation will probably not last much longer. The economy may slow without
intervention as Far Eastern economies drag down global growth. This scenario may
benefit bonds more than stocks. Alternatively, the Fed will be forced to tighten
if the economy remains strong. Such an action would affect both bonds and
stocks. In any event, we continue to target investments in undervalued, quality
companies with reasonable growth profiles.
W. Theodore Kuck and Paul Rissman, Portfolio Managers
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INVESTMENT OBJECTIVE
High return through a combination of current income and capital appreciation.
INVESTMENT POLICY
Primarily income-producing common stocks and securities convertible into common
stocks.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1997
Net Assets ............................. $587.8 million
Number of Issues .................................. 125
LARGEST EQUITY HOLDINGS
Chase Manhattan Corp. ........................... Banks
RJR Nabisco Holdings Corp. .................... Tobacco
Texaco, Inc. ...................... Oil - International
MCI Communications Corp............. Telecommunications
First Data Corp. ............ Office Equipment Services
Campbell Soup Company ........................... Foods
Citicorp ........................................ Banks
Schering Plough Corp................... Pharmaceuticals
USX-Marathon Group, Inc. .......... Oil - International
Morgan Stanley, Dean Witter, Discover.. Financial Svcs.
ASSET MIX DISTRIBUTION
Common Stock .................................... 84.2%
Preferred Stock ................................. 3.4%
Bonds (Convertible) ............................. 8.8%
Short-Term & Cash ............................... 3.6%
ANNUALIZED TOTAL RETURN, AS OF DECEMBER 31, 1997
SINCE
1 YEAR 3 YRS INCEPT.
ALLIANCE GROWTH & INCOME 26.90% 23.65% 15.94%
Lipper Growth & Income. 27.14 26.49 18.48
25% Value Line Conv./75% S&P 500 29.54 28.62 20.14
The Alliance Growth & Income Portfolio started operations on October 1, 1993.
GROWTH OF $10,000 INVESTMENT AS OF DECEMBER 31, 1997
(Invested at Inception)
Total
Date Value
---- -----
12/31/93 9,975
12/31/94 9,917
12/31/95 12,305
12/31/96 14,777
12/31/97 18,751
18,751
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ALLIANCE EQUITY INDEX PORTFOLIO
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Despite market volatility toward the end of 1997, the Equity Index Portfolio
enjoyed another outstanding year, returning 32.58%. The Alliance Equity Index
Portfolio is the only passively managed portfolio within The Hudson River Trust.
Using a stratified sampling technique, the Portfolio is constructed to track the
investment results of the S&P 500. It remains fully invested in stocks.
Judith Maglio, Portfolio Manager
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INVESTMENT OBJECTIVE
Total return before expenses that approximates the total return performance of
the Standard & Poor's 500 Index ("the Index"), including reinvestment of
dividends, at a risk level consistent with that of the Index.
INVESTMENT POLICY
Selected securities in the Index which the adviser believes will, in the
aggregate, approximate the performance results of the Index.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1997
Net Assets ........................... $943.7 million
Number of Issues ................................ 444
LARGEST EQUITY HOLDINGS
General Electric Co............. Electrical Equipment
Coca-Cola Co. ............................. Beverages
Microsoft Corp. ........... Office Equipment Services
Exxon Corp. ..................... Oil - International
Merck & Co., Inc..................... Pharmaceuticals
Royal Dutch Petroleum Co. (ADR) . Oil - International
Intel Corp. ............................. Electronics
Philip Morris Cos., Inc. .................... Tobacco
Procter & Gamble Corp. ............. Soaps/Toiletries
IBM Corp............................ Office Equipment
ANNUALIZED TOTAL RETURN, AS OF DECEMBER 31, 1997
SINCE
1 YEAR 3 YRS INCEPT.
ALLIANCE EQUITY INDEX 32.58% 30.35% 23.35%
Lipper S&P 500 Index Avg. 32.60 30.49 23.31
S&P 500 33.36 31.15 23.84
The Alliance Equity Index Portfolio started operations on March 1, 1994.
GROWTH OF $10,000 INVESTMENT AS OF DECEMBER 31, 1997
(Invested at Inception)
Total
Date Value
---- -----
12/31/94 10,108
12/31/95 13,796
12/31/96 16,884
12/31/97 22,385
22,385
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ALLIANCE COMMON STOCK PORTFOLIO
The first half of 1997 was marked by continued leadership by very large
capitalization growth stocks and, in March and April, a sharp correction which
was particularly severe in the technology sector and in the over-the-counter
market.
The Portfolio has always emphasized stocks of companies that are somewhat
smaller than those that dominate the S&P 500. This, coupled with our strong
emphasis on the technology sector, made for relative underperformance in the
first few months of 1997. In the last half of the year, these same sectors came
back strongly and the market rally broadened out, affording a better environment
for stocks below the top tier in size and quality.
Technology and financial services have been the major areas of emphasis in the
Portfolio for the last several years. Specifically, within the technology
sector, we have stressed networking and communications. We continue to see above
average potential in both the technology and financial services sectors.
The very favorable combination of solid growth and low inflation has led to
another year of strong equity returns. The recent collapse of both stock markets
and currencies in several Asian countries delivered a brief shock to the U.S.
market. However, the U.S. market has quickly regained its footing and rebounded
strongly. Current conditions appear favorable for continued stock market gains
in the U.S.
Nevertheless, we could caution that we have now experienced several years of
strong results and that common sense and experience suggest that future gains
will be more moderate. While there is no immediate evidence to suggest a
reversal of fortune, we note that the bull market has benefited greatly from a
secular decline in interest rates which is now 15 years old. That said, the
immediate outlook for both the U.S. economy and the stock market appears
favorable.
Tyler Smith, Portfolio Manager
================================================================================
INVESTMENT OBJECTIVE
Long-term growth of capital.
INVESTMENT POLICY
Primarily common stock and other equity-type instruments.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1997
Net Assets ............................. $9.6 billion
Number of Issues ................................ 110
LARGEST EQUITY HOLDINGS
Cendant Corp................................. Leisure
Cisco Systems, Inc....................... Electronics
WorldCom, Inc.+ .................. Telecommunications
Travelers Group, Inc....................... Insurance
American International Group, Inc.......... Insurance
MBNA Corp. ....................... Financial Services
Philip Morris Cos., Inc...................... Tobacco
American Express Co. ............. Financial Services
Merck & Co., Inc..................... Pharmaceuticals
Loews Corp................................... Tobacco
+Includes convertibles
ASSET MIX DISTRIBUTION
Common Stock ................................... 92.3%
Preferred Stock ................................ 0.6%
Short-Term & Cash .............................. 7.1%
ANNUALIZED TOTAL RETURN, AS OF DECEMBER 31, 1997
SINCE
ALLIANCE 1 YEAR 3 YRS 5 YRS 10 YRS 20 YRS INCEPT.
COMMON
STOCK 29.40% 28.66% 21.08% 18.00% 17.56% 15.83%
Lipper Growth 25.30 25.11 16.47 15.93 15.73 15.50
S&P 500 33.36 31.15 20.27 18.05 16.66 15.44
The Alliance Common Stock Portfolio started operations on January 13, 1976.
GROWTH OF $10,000 INVESTMENT AS OF DECEMBER 31, 1997
(Invested Ten Years Ago on December 31, 1987)
Total
Date Value
---- -----
12/31/87 10,000
12/31/88 12,244
12/31/89 15,378
12/31/90 14,130
12/31/91 19,484
12/31/92 20,110
12/31/93 25,105
12/31/94 24,567
12/31/95 32,539
12/31/96 40,439
12/31/97 52,328
52,328
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ALLIANCE GLOBAL PORTFOLIO
- --------------------------------------------------------------------------------
European markets rose approximately 38%, modestly outpacing the S&P 500, but
dollar-based performance was reduced to 24% by currency weakness. Japan's market
fell approximately 24%, including 11% in currency losses, versus the dollar. The
emerging markets of Southeast Asia lost approximately 48%. Large capitalization
shares significantly outperformed smaller issues.
In the global environment of low inflation, stable prices, and low interest
rates, growth stocks again performed strongly. The Portfolio maintained its
heavy concentration in growth stocks in 1997. Additionally, we added
significantly to our holdings in European restructuring candidates during the
year.
European and U.S. shares provided most of the Portfolio's gains, while our
Asia/Pacific exposure pulled down overall performance. However, our Japanese
emphasis on exporters and growth issues produced good relative returns.
At year end, European markets remain attractively valued relative to the U.S.
European companies with serious commitment to restructuring will be further
added to the core growth Portfolio. Japanese holdings will remain heavily
concentrated on exporters and growth shares. Our U.S. Portfolio continues to
emphasize technology and financial issues. Technology investments are
concentrated in networking, communication and software. In developing markets,
we are selectively buying companies which we believe can produce significant
positive earnings surprises for the foreseeable future.
Ronald Simcoe, Portfolio Manager
================================================================================
INVESTMENT OBJECTIVE
Long-term growth of capital.
INVESTMENT POLICY
Primarily equity securities of non-United States companies as well as United
States issuers.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1997
Net Assets ............................. $1.2 billion
Number of Issues ................................ 491
Number of Countries Represented ................. 38
LARGEST EQUITY HOLDINGS
Cendant Corp. ............................... Leisure
Cisco Systems, Inc. ..................... Electronics
WorldCom, Inc.+ .................. Telecommunications
Travelers Group, Inc. ..................... Insurance
Philip Morris Cos., Inc. .................... Tobacco
+ includes convertible securities
DISTRIBUTION OF INVESTMENTS BY COUNTRY
Canada ........................................ 1.2%
Japan ......................................... 9.9%
Southeast Asia ................................ 1.7%
Latin America ................................. 1.5%
United Kingdom ................................ 11.4%
Scandinavia ................................... 4.0%
New Zealand & Australia ....................... 1.7%
United States ................................. 45.5%
Other European Countries ...................... 15.1%
Short-Term & Cash ............................. 8.0%
ANNUALIZED TOTAL RETURN, AS OF DECEMBER 31, 1997
SINCE
1 YEAR 3 YRS 5 YRS 10 YRS INCEPT.
ALLIANCE
GLOBAL 11.66% 14.99% 16.15% 13.74% 11.70%
Lipper Global 13.04 15.20 13.76 11.50 9.10
MSCI World 15.76 16.62 15.34 10.57 8.22
The Alliance Global Portfolio started operations on August 27, 1987.
GROWTH OF $10,000 INVESTMENT AS OF DECEMBER 31, 1997
(Invested Ten Years Ago on December 31, 1987)
Total
Date Value
---- -----
12/31/87 10,000
12/31/88 11,088
12/31/89 14,054
12/31/90 13,200
12/31/91 17,225
12/31/92 17,142
12/31/93 22,644
12/31/94 23,828
12/31/95 28,311
12/31/96 32,450
12/31/97 36,234
36,234
<PAGE>
- --------------------------------------------------------------------------------
ALLIANCE INTERNATIONAL PORTFOLIO
- --------------------------------------------------------------------------------
The Alliance International Portfolio trailed its unmanaged benchmark, the MSCI
EAFE Index, for the year ended December 31, 1997 due to over exposure to smaller
capitalization issues which dramatically underperformed larger capitalization
stocks for the year. EAFE rose 1.8% as strong European markets were able to
overcome poor returns in the Asia/Pacific region. The MSCI Europe Index advanced
38% for the year, but dollar based performance was reduced to 24% by currency
weaknesses. Japan fell 24%, including an 11% yen depreciation versus the dollar.
Southeast Asian markets lost 48%, more than half of which was currency related.
Large capitalization shares significantly outperformed smaller issues. European
restructuring stocks overtook growth shares to become the year's star
performers. With the exception of energy related issues, most cyclicals
performed poorly.
Our European holdings remain concentrated in growth stocks. We made significant
additions to financials and globally competitive exporters during the year and
expect to continue buying restructuring candidates during 1998. Our Japanese
positions in exporters and domestic growth shares produced good relative
returns. However, we sold domestic cyclical issues throughout the year as the
Japanese government failed to respond to consumer concerns about the economy.
The small developing markets of Southeast Asia have been forced to pay the price
for aggressive corporate borrowing in dollars. Therefore, we reduced holdings in
the region during the second half of 1997 and increased holdings in Mexico and
Eastern Europe.
The weakness in Asian economies should produce a year of modest international
growth in 1998. Several Asian countries, including Korea, may experience
negative growth rates. As a result, the policy response of the American and
Japanese central banks bears watching. Continued reductions in global inflation
expectations are likely, and this should boost global bond markets. In this
environment, companies which can project visible earnings growth are likely to
perform well. While we are concerned by the historically high valuations being
accorded equity markets, we continue to believe we can identify attractive
international investment ideas.
Ronald Simcoe, Portfolio Manager
================================================================================
INVESTMENT OBJECTIVE
Long-term growth of capital.
INVESTMENT POLICY
Primarily equity securities selected principally to permit participation in
non-United States companies with prospects for growth.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1997
Net Assets ........................... $193.9 million
Number of Issues ................................ 500
Number of Countries Represented .................. 37
LARGEST EQUITY HOLDINGS
Compass Group PLC.................. Contract Catering
Cie Generale des Geophysique (ADR)....... Oil Service
Magyar Tavkoslesi (ADR).......... Utility - Telephone
Scandic Hotels AB ........................... Lodging
Canadian Fracmaster Ltd. ................ Oil Service
DISTRIBUTION OF INVESTMENTS BY COUNTRY
Canada ........................................ 2.0%
Japan ......................................... 20.6%
Southeast Asia ................................ 3.9%
Latin America ................................. 4.5%
United Kingdom ................................ 18.7%
Scandinavia ................................... 9.9%
New Zealand & Australia ....................... 4.3%
Other European Countries ...................... 29.3%
Short-Term & Cash ............................. 6.8%
ANNUALIZED TOTAL RETURN, AS OF DECEMBER 31, 1997
SINCE
1 YEAR INCEPT.
ALLIANCE INTERNATIONAL (2.98)% 6.39%
Lipper International 5.44 9.87
MSCI EAFE 1.78 6.15
The Alliance International Portfolio started operations on April 3, 1995.
GROWTH OF $10,000 INVESTMENT AS OF DECEMBER 31, 1997
(Invested at Inception)
Total
Date Value
---- -----
12/31/95 11,129
12/31/96 12,221
12/31/97 11,857
11,857
<PAGE>
- --------------------------------------------------------------------------------
ALLIANCE AGGRESSIVE STOCK PORTFOLIO
- --------------------------------------------------------------------------------
During recent months, we have made some changes in the Portfolio's investment
strategies that were implemented back in 1994 and 1995. First, within the energy
sector, we have eliminated our holdings in offshore drillers. However, we are
still bullish about onshore drillers. We continue to see a tightening in the
demand/supply for oil tankers similar to the demand crunch faced by drilling rig
operators over the last two years. As a result, we have purchased several
holdings which we believe will benefit from this trend.
On the cyclical side, we continue to look for industries where demand is growing
much greater than supply and capacity to meet demand is insufficient. As a
result, companies can raise prices to meet this greater demand and most of this
falls right to the bottom line as incremental profitability. We maintain our
overweight positions in the airline industry, hotel industry, and rental car
industry, believing that they exhibit superior pricing power.
We have added to the Portfolio's health care holdings, focusing specifically on
biotechnology companies with products either approved by the FDA or nearing the
end of the approval process. Therefore, many of the risk hurdles that these
companies typically face are already behind them.
Alden Stewart and Randall Haase, Portfolio Managers
================================================================================
INVESTMENT OBJECTIVE
Long-term growth of capital.
INVESTMENT POLICY
Primarily common stocks and other equity-type securities issued by medium- and
other smaller-sized companies with strong growth potential.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1997
Net Assets ............................. $4.7 billion
Number of Issues ................................. 70
LARGEST EQUITY HOLDINGS
Republic Industries, Inc. ...... Automotive Retailing
Continental Airlines, Inc. (Class B)........ Airlines
Diamond Offshore Drilling, Inc. ... Offshore Drilling
CNAFinancial Corp. ........................ Insurance
ITT Corp. .................................. Leisure
Delta Airlines, Inc. ....................... Airlines
Comcast Corp. (Class A) .......... Cable Broadcasting
Centocor, Inc. ........................ Biotechnology
Crompton & Knowles Corp. ........ Chemicals Specialty
Telephone & Data Systems, Inc. .. Utility - Telephone
ASSET MIX DISTRIBUTION
Common Stock ................................... 95.4%
Short-Term & Cash .............................. 4.6%
ANNUALIZED TOTAL RETURN, AS OF DECEMBER 31, 1997
SINCE
1 YEAR 3 YRS 5 YRS 10 YRS INCEPT.
ALLIANCE
AGGRESSIVE STOCK 10.94 21.29 14.92 19.00 19.41
Lipper Sm. Co. Growth 19.63 22.51 15.24 16.50 14.06
50% Russell 2000/ 27.31 24.88 17.11 17.74 15.12
50% S&P 400 Mid-Cap
The Alliance Aggressive Stock Portfolio started operations on January 27, 1986.
GROWTH OF $10,000 INVESTMENT AS OF DECEMBER 31, 1997
(Invested Ten Years Ago on December 31, 1987)
Total
Date Value
---- -----
12/31/87 10,000
12/31/88 10,114
12/31/89 14,512
12/31/90 15,697
12/31/91 29,333
12/31/92 28,403
12/31/93 33,165
12/31/94 31,899
12/31/95 41,991
12/31/96 51,314
12/31/97 56,927
56,927
<PAGE>
- --------------------------------------------------------------------------------
ALLIANCE SMALL CAP GROWTH PORTFOLIO
- --------------------------------------------------------------------------------
1997 showed continued strength in the equity markets, although the gains were
not evenly distributed among various capitalization ranges or styles. Small cap
issues underperformed large cap issues for the fourth consecutive year with the
S&P 500 rising 33.4% versus 22.4% for the Russell 2000. Even more striking and
relevant for investors in this Portfolio was the performance differential in
small cap growth stocks and value stocks. The Russell 2000 Value Index gained
31.8% versus 12.9% for the Growth Index, marking the most significant divergence
between growth and value strategies in quite some time. This created a more
difficult environment for small cap growth investors to prosper in.
Early investors in this Portfolio, however, benefited from a fortuitous launch
date as the small cap growth market bottomed a few weeks before the May 1 start
date. The Alliance Small Cap Growth Portfolio returned 26.7% versus 27.7% for
the Russell 2000 Growth Index. The slight underperformance was driven largely by
the negative impact of investing significant cash inflows in a rising equity
market.
The Portfolio ended the year with sector overweights in business services and
consumer cyclicals, and an underweighted position in financial
services.
Going forward, the Portfolio will continue to focus on companies with
accelerating operating fundamentals, reasonable valuations and strong management
teams. Small cap growth stock investing should remain a powerful option for long
term-oriented investors.
Michael Gaffney, Portfolio Manager
================================================================================
INVESTMENT OBJECTIVE
Long-term growth of capital.
INVESTMENT POLICY
Primarily U.S. common stocks and other equity-type securities of smaller
companies with favorable growth prospects.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1997
Net Assets ........................... $141.0 million
Number of Issues ................................ 103
LARGEST EQUITY HOLDINGS
Crompton & Knowles Corp. ...... Chemicals - Specialty
Budget Group, Inc. ..................... Auto Related
Ha-Lo Industries, Inc. ........ Professional Services
Comverse Technology, Inc. Telecom Equipment Services
Mohawk Industries, Inc. ............ Apparel, Textile
Sinclair Broadcast Group ..... TV, Radio Broadcasting
ACC Corp. ........................ Telecommunications
Atlantic Coast Airlines, Inc. .............. Airlines
Jones Medical Industries, Inc. ...... Pharmaceuticals
Carematrix Corp. .............. Professional Services
ASSET MIX DISTRIBUTION
Common Stock ...................................97.5%
Short-Term & Cash .............................. 2.5%
ANNUALIZED TOTAL RETURN, AS OF DECEMBER 31, 1997
SINCE INCEPTION
(Unannualized)
ALLIANCE SMALL CAP GROWTH 26.74%
Lipper Small Company Growth Funds Avg 29.36
Russell 2000 27.66
The Alliance Small Cap Growth Portfolio started operations on May 1, 1997.
GROWTH OF $10,000 INVESTMENT AS OF DECEMBER 31, 1997
(Invested at Inception)
Total
Date Value
---- -----
12/31/97 12,674
12,674
<PAGE>
- --------------------------------------------------------------------------------
ALLIANCE CONSERVATIVE INVESTORS PORTFOLIO
- --------------------------------------------------------------------------------
During 1997, the U.S. capital markets bested their longer term, average rates
of return. The bond market, as measured by the Lehman Brothers
Government/Corporate Bond Index, produced a 9.8% rate of return. Equity markets
generated returns in excess of 20% for the third year in a row, with the S&P 500
Stock Index producing a 33.4% return.
Investment returns for the year should be viewed in three phases -- the first
quarter, the second quarter and early into the fourth quarter. During the first
quarter, returns were adversely affected by the upward ratchet in the Fed funds
rate as the Federal Reserve reacted to a strong performance by the economy in
its sixth year of recovery. Investors, fearful of additional rate hikes, put
selling pressure on bond prices.
As the second quarter unfolded, economic growth continued at a strong pace, but
was also characterized by surprisingly strong advances in productivity, profits
and lower rates of inflation. This was celebrated with both rising bond and
stock prices.
Early in the fourth quarter, the growing turmoil in the Asian financial markets
began to affect the capital markets in the industrialized nations. Economists
started to lower their expectations for world growth and investors became
increasingly worried about overseas growth prospects for U.S. companies. The
upheaval in the Asian financial markets continued to ricochet around the region,
eventually threatening the stability of the Hong Kong dollar - a currency long
viewed by investors as a bedrock currency. World governments and multi-lateral
institutions such as the International Monetary Fund (IMF) and the World Bank
responded to the region's liquidity and asset crises. These efforts to stabilize
the regional markets should be successful given enough time. However, the
ongoing uncertainty and changing perceptions about growth prospects will
introduce more volatility into global capital markets. Indeed we are maintaining
a modest cash position of some 10% to take advantage of any price opportunities
as they develop.
For the year, fixed income securities - the dominant asset class of the
portfolio - returned 9.64%. The equity portion of the portfolio was negatively
affected by exposure to foreign stocks and the concentration of money flows into
a limited number of U.S. equities. For example, the 25 largest stocks in the S&P
500 rose 34%, while the remaining 475 companies underperformed the index.
Our portfolio selection continues to focus on company fundamentals, earnings
growth and relative valuation levels. Although we expect the rate of growth in
profits will moderate as economic growth slows, stock prices should be supported
by the continued low levels of inflation and interest rates that will accompany
that slower growth.
Robert G. Heisterberg, Portfolio Manager
================================================================================
INVESTMENT OBJECTIVE
High total return without, in the adviser's opinion, undue risk to principal.
INVESTMENT POLICY
A diversified mix of publicly traded fixed-income and equity securities; asset
mix and security selection are primarily based upon factors expected to reduce
risk.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1997
Net Assets ................................ $313.5 million
Number of U.S. Equity Issues .......................... 124
Average Quality (excluding net cash) .................. AA+
Average Duration (including net cash) .......... 9.2 years
LARGEST EQUITY HOLDINGS
Philip Morris Cos., Inc. ......................... Tobacco
Cisco Systems, Inc. .......................... Electronics
Morgan Stanley, Dean Witter, Discover .... Financial Svcs.
Travelers Group, Inc. .......................... Insurance
General Electric Co. ................ Electrical Equipment
Tyco International Ltd. .. Diversified Manufacturing Oper.
Pfizer, Inc. ............................. Pharmaceuticals
Gillete Corp. .......................... Soaps &Toiletries
Worldcom, Inc. ........................ Telecommunications
Sunbeam Corp. ....................... Household Appliances
ASSET MIX DISTRIBUTION
Domestic Stock ..................................... 24.9%
Foreign Stock ...................................... 5.8%
Bonds .............................................. 54.0%
Short-Term & Cash .................................. 15.3%
ANNUALIZED TOTAL RETURN, AS OF DECEMBER 31, 1997
SINCE
1 YEAR 3 YRS 5 YRS INCEPT.
ALLIANCE
CONSERVATIVE INVESTORS 13.25% 12.79% 8.79% 9.53%
Lipper Flexible Portfolio 18.69 19.44 13.14 12.15
70% Lehman Treas./30% S&P 500 16.71 17.18 11.87 11.39
The Alliance Conservative Investors Portfolio started operations on October 2,
1989.
GROWTH OF $10,000 INVESTMENT AS OF DECEMBER 31, 1997
(Invested at Inception)
Total
Date Value
---- -----
12/31/89 10,309
12/31/90 10,969
12/31/91 13,144
12/31/92 13,905
12/31/93 15,402
12/31/94 14,771
12/31/95 17,785
12/31/96 18,712
12/31/97 21,192
21,192
<PAGE>
- --------------------------------------------------------------------------------
ALLIANCE BALANCED PORTFOLIO
- --------------------------------------------------------------------------------
U.S. capital markets turned in another set of extraordinary returns in 1997.
More significant, 1997 was the third year in a row of returns well above the
long-term averages. The S&P 500 Index's 33.4% return for the year far outpaced
the broader stock indices that still delivered respectable double-digit returns.
In contrast to 1996, fixed income markets yielded returns well above the
historical average; the Lehman Brothers Government/Corporate Bond Index tacked
on 10%. International equities severely underperformed both U.S. stocks and
fixed income securities largely because of continuing problems in Japan and the
Asian region.
The volatility in capital markets increased as the year progressed, mirroring
more pronounced swings in investor sentiment. As the year began, investors'
concerns about strong economic growth and prospects for more monetary restraint
weighed upon the capital markets. The 25 basis point hike in the Federal funds
rate in the first quarter only produced fears of further rate increases. When
strong economic growth continued in the second quarter, accompanied by
unexpected advances in productivity, profits, low rates of inflation, and low
unemployment rates not experienced in 25 years, bond and stock prices moved
sharply higher.
Just as investors were becoming increasingly comfortable with the notion of a
higher, non-inflationary growth path for the economy and superior rates of
profitability, turmoil in the emerging Asian capital and currency markets began
to affect the capital markets in the developed world. Investors began to revise
downward their forecasts for global economic growth and profitability as
conditions in Asia deteriorated. Official multi-lateral institutions like the
International Monetary Fund (IMF) and world governments responded to the
region's liquidity and currency crises. We believe these efforts will be
successful in stabilizing conditions in the region. However, it will take time
and investor perceptions will remain volatile as these countries strive to
recover above-average economic growth.
The fixed income portion of the portfolio produced satisfactory returns. The
equity portion, however, was adversely affected by exposure to international
equities and the concentrated nature of money flows into a narrow spectrum of
U.S. stocks. For example, 475 companies in the S&P 500 stocks underperformed the
index with only 25 companies gaining 34% and beating the 33.4% return posted by
the index.
The phenomenon of highly concentrated performance did reverse itself during the
July - October period, only to return once again as investors responded to the
turmoil in Asia. Our investment selection process continues to focus on strong
growth fundamentals that are reasonably priced. We believe higher stock prices
will be supported by benign inflation and low interest rates even though we
expect a slowing in the rate of economic growth and profits.
Robert G. Heisterberg, Portfolio Manager
================================================================================
INVESTMENT OBJECTIVE
High return through a combination of current income and capital appreciation.
INVESTMENT POLICY
Primarily common stocks, publicly traded debt securities and high-quality money
market instruments.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1997
Net Assets ................................. $1.7 billion
Number of U.S. Equity Issues ........................ 169
Average Quality (excluding net cash) ................ AA+
Average Duration (including net cash) ......... 8.3 years
LARGEST EQUITY HOLDINGS
Philip Morris Cos., Inc. ........................ Tobacco
Cisco Systems, Inc. ......................... Electronics
Morgan Stanley, Dean Witter, Discover ... Financial Svcs.
Travelers Group, Inc. ......................... Insurance
General Electric Co. ............... Electrical Equipment
Tyco International Ltd. .. Diversified Manufacturing Oper.
WorldCom, Inc.+....................... Telecommunications
Pfizer, Inc. ............................ Pharmaceuticals
Nabors Industries, Inc.+.............. Oil & Gas Drilling
MBNA Corporation...................... Financial Services
+Includes convertibles
ASSET MIX DISTRIBUTION
Domestic Stocks ................................... 39.9%
Foreign Stocks .................................... 9.1%
Convertibles ...................................... 2.9%
Bonds ............................................. 42.0%
Short-Term & Cash ................................. 6.1%
ANNUALIZED TOTAL RETURN, AS OF DECEMBER 31, 1997
SINCE
1 YEAR 3 YRS 5 YRS 10 YRS INCEPT.
ALLIANCE BALANCED 15.06% 15.45% 9.71% 12.04% 12.30%
Lipper Balanced 19.00 19.44 13.20 12.92 12.33
50% Lehman Corp./ 21.56 21.68 14.63 21.19 13.97
50% S&P 500
The Alliance Balanced Portfolio started operations on January 27, 1986.
GROWTH OF $10,000 INVESTMENT AS OF DECEMBER 31, 1997
(Invested Ten Years Ago on December 31, 1987)
Total
Date Value
---- -----
12/31/87 10,000
12/31/88 11,327
12/31/89 14,253
12/31/90 14,288
12/31/91 20,183
12/31/92 19,615
12/31/93 22,025
12/31/94 20,257
12/31/95 24,258
12/31/96 27,091
12/31/97 31,171
31,171
<PAGE>
- --------------------------------------------------------------------------------
ALLIANCE GROWTH INVESTORS PORTFOLIO
- --------------------------------------------------------------------------------
For the third year in a row, U.S. equities produced returns well above their
longer term average. The S&P 500 Index gained 33.4% while the Russell 2000 Index
generated a 22% return. Once again the large capitalization issues dominated the
performance of the averages. The 25 largest stocks in the S&P 500 rose 34%, with
the remaining 475 equities underperforming the index. Portfolio diversification
in the U.S. equity market meant performance suffered. There was an even larger
gap in performance when international equities were compared with U.S. stocks.
The EAFE Index -- a broad composite of international stocks -- produced only a
1.8% gain for the year.
Commentary on the performance of the U.S. capital markets in 1997 should be
divided into three segments. During the first quarter, returns were adversely
affected by an uptick in the Federal funds rate. Fearful of further rate hikes,
investors drove bond prices lower. In the early spring, investors began to
reassess their outlook with a continued flow of good news about productivity
gains, profits and surprisingly benign inflation. Investors became encouraged by
unemployment rates not seen in decades. Stock prices rose to new highs and bonds
began to generate positive returns.
By early fall, the U.S. markets became unnerved by the collapse in the currency
and capital markets in Asia. Investors lowered their expectations for global
growth and reassessed the prospects for an economic recovery in Japan given the
importance of the Asian region to Japan's export growth and banking system.
World governments and multi-lateral institutions like the IMF and the World Bank
moved to stabilize conditions in the region. While we expect those efforts will
be successful given enough time and that growth will resume, the ongoing
uncertainty and changing perceptions about growth prospects will introduce more
volatility into global capital markets.
The Portfolio's performance was negatively affected by two principal factors:
the concentration of returns in the U.S. market in a few, large capitalization
stocks and the exposure of about 17% of the portfolio to international equities.
At year end, we had a modest cash position of some 0.5% and plan to take
advantage of any price opportunities that might develop in an environment of
increased volatility.
Looking forward, we expect a slowing in the rate of economic growth. That
slowdown reflects the combination of shrinking export markets, a surge in
imports and a strong dollar. Nonetheless, inflation and interest rates should
remain benign and provide support for equity valuations.
Robert G. Heisterberg, Portfolio Manager
================================================================================
INVESTMENT OBJECTIVE
High total return consistent with the adviser's determination of reasonable
risk.
INVESTMENT POLICY
A diversified mix of publicly traded fixed-income and equity securities; asset
mix and security selection based upon factors expected to increase possibility
of high long-term return.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1997
Net Assets ............................... $1.7 billion
Number of U.S. Equity Issues ...................... 177
Average Quality (excluding net cash) .............. AA+
Average Duration (including net cash) ....... 8.4 years
LARGEST EQUITY HOLDINGS
Philip Morris Cos., Inc. ...................... Tobacco
Morgan Stanley, Dean Witter, Discover .. Financial Svcs.
Cisco Systems, Inc. ....................... Electronics
WorldCom, Inc.+..................... Telecommunications
General Electric Co. ............. Electrical Equipment
Travelers Group, Inc. ....................... Insurance
Nabors Industries, Inc.+............ Oil & Gas Drilling
Life Re Corp. ............................... Insurance
ITT Corp. ..................................... Leisure
Noble Drilling Corp. ...... Oil Supplies & Construction
+Includes convertibles
ASSET MIX DISTRIBUTION
Domestic Stock ................................... 53.5%
Foreign Stock .................................... 13.9%
Convertibles ..................................... 2.3%
Bonds ............................................ 19.3%
Short-Term & Cash ................................ 11.0%
ANNUALIZED TOTAL RETURN, AS OF DECEMBER 31, 1997
SINCE
ALLIANCE 1 YEAR 3 YRS 5 YRS INCEPT.
GROWTH INVESTORS 16.87% 18.48% 13.17% 15.73%
Lipper Flexible Portfolio 18.69 19.44 13.14 12.15
30% Lehman Corp./70% S&P 500 26.28 25.64 17.02 14.48
The Alliance Growth Investors Portfolio started operations on October 2, 1989.
GROWTH OF $10,000 INVESTMENT AS OF DECEMBER 31, 1997
(Invested at Inception)
Total
Date Value
---- -----
12/31/89 10,399
12/31/90 11,503
12/31/91 17,129
12/31/92 17,974
12/31/93 20,717
12/31/94 20,066
12/31/95 25,357
12/31/96 28,555
12/31/97 33,371
33,371
<PAGE>
THE HUDSON RIVER TRUST
STATEMENTS OF ASSETS AND LIABILITIES
December 31, 1997
<TABLE>
<CAPTION>
ALLIANCE
INTERMEDIATE ALLIANCE
ALLIANCE GOVERNMENT ALLIANCE ALLIANCE GROWTH AND
MONEY MARKET SECURITIES QUALITY BOND HIGH YIELD INCOME
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments at value (Notes 1 and 4).............. $ 551,218,667 $114,937,264 $199,082,370 $409,444,270 $584,091,770
Cash ............................................. 250,597 150,271 1,850,749 3,867,754 136,662
Receivable for securities sold.................... -- 8,514,530 -- -- --
Collateral held for securities loaned
(Note 1) ........................................ -- 14,877,570 20,317,896 -- 83,697,400
Receivable from Separate Accounts for Trust
shares sold...................................... 20,699,118 216,925 202,284 3,871,282 4,484,564
Unrealized appreciation of forward currency
contracts (Notes 1 and 4)........................ -- -- 230,830 -- --
Dividends, interest and other receivables......... 2,952,078 1,470,759 2,012,816 9,027,978 1,310,011
------------- ------------ ------------ ------------ ------------
Total assets.................................... 575,120,460 140,167,319 223,696,945 426,211,284 673,720,407
------------- ------------ ------------ ------------ ------------
LIABILITIES:
Options written at value (Premiums received:
Alliance Common Stock Portfolio--$103,560,700)
(Notes 1 and 4) .................................. -- -- -- -- --
Payable to custodian.............................. -- -- -- -- --
Payable for securities purchased.................. -- 5,013,423 -- 4,100,000 1,517,259
Payable for collateral received on securities
loaned .......................................... -- 14,877,570 20,317,896 -- 83,697,400
Payable to Separate Accounts for Trust shares
redeemed ........................................ 1,207,497 27,928 17,806 16,591 397,040
Variation margin payable on futures contracts .... -- -- -- -- --
Distribution fees payable......................... 24,848 988 -- 12,299 6,670
Investment advisory fees payable.................. 175,017 52,732 95,141 220,448 280,754
Trustees' fees payable............................ 29,067 6,308 6,466 8,897 7,871
Accrued expenses.................................. 48,581 22,474 26,158 42,171 57,520
------------- ------------ ------------ ------------ ------------
Total liabilities............................... 1,485,010 20,001,423 20,463,467 4,400,406 85,964,514
------------- ------------ ------------ ------------ ------------
NET ASSETS........................................ $ 573,635,450 $120,165,896 $203,233,478 $421,810,878 $587,755,893
============= ============ ============ ============ ============
Investments at cost............................... $ 551,106,796 $113,600,359 $197,176,185 $401,820,273 $511,226,533
============= ============ ============ ============ ============
COMPONENTS OF NET ASSETS (NOTE 1):
Paid in capital.................................. $ 573,354,238 $127,643,383 $201,320,004 $412,006,119 $507,451,775
Accumulated undistributed (overdistributed)
net investment income........................... 149,936 17,556 321,561 29,459 (7,871)
Accumulated undistributed net realized
gain (loss) .................................... 19,405 (8,831,948) (541,234) 2,151,303 7,446,752
Unrealized appreciation/depreciation on
investments and foreign currency denominated
assets and liabilities.......................... 111,871 1,336,905 2,133,147 7,623,997 72,865,237
------------- ------------ ------------ ------------ ------------
NET ASSETS........................................ $ 573,635,450 $120,165,896 $203,233,478 $421,810,878 $587,755,893
============= ============ ============ ============ ============
CLASS IA SHARES:
Net Assets........................................ $ 449,959,833 $115,114,412 $203,233,478 $355,473,286 $555,058,953
============= ============ ============ ============ ============
Shares outstanding (Note 5)....................... 44,192,317 12,190,330 20,863,418 34,161,761 36,099,131
============= ============ ============ ============ ============
Net asset value, offering and redemption
price per share (Note 1)......................... $10.18 $9.44 $9.74 $10.41 $15.38
============= ============ ============ ============ ============
CLASS IB SHARES:
Net Assets........................................ $123,675,617 $5,051,484 $66,337,592 $32,696,940
============= ============ ============ ============
Shares outstanding (Note 5)....................... 12,163,496 535,399 6,386,424 2,128,126
============= ============ ============ ============
Net asset value, offering and redemption
price per share (Note 1)......................... $10.17 $9.43 $10.39 $15.36
============= ============ ============ ============
</TABLE>
See Notes to Financial Statements.
1
<PAGE>
<TABLE>
<CAPTION>
ALLIANCE ALLIANCE
ALLIANCE COMMON ALLIANCE ALLIANCE AGGRESSIVE
EQUITY INDEX STOCK GLOBAL INTERNATIONAL STOCK
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C>
$ 938,556,102 $ 9,725,410,132 $1,221,659,645 $182,951,529 $4,484,945,342
99,549 -- 16,893,430 8,347,523 181,729
-- 60,067,219 8,205,868 2,023,708 211,128,536
109,536,553 662,838,280 113,847,792 15,052,581 612,639,016
4,552,195 29,633,785 1,766,152 223,944 6,208,417
-- -- 6,004,608 2,059,365 --
1,147,581 14,458,000 1,735,003 355,921 595,158
-------------- --------------- -------------- ------------ --------------
1,053,891,980 10,492,407,416 1,370,112,498 211,014,571 5,315,698,198
-------------- --------------- -------------- ------------ --------------
-- 118,604,155 -- -- --
-- 580,406 -- -- --
-- 142,569,172 28,420,108 1,563,213 26,255,439
109,536,553 662,838,280 113,847,792 15,052,581 612,639,016
231,453 3,076,771 1,327,331 176,950 10,893,069
2,300 -- -- -- --
24 47,055 8,949 704 15,377
264,547 3,091,113 709,265 158,485 2,231,578
13,621 306,186 29,678 3,984 148,899
102,458 520,545 382,380 161,478 257,517
-------------- --------------- -------------- ------------ --------------
110,150,956 931,633,683 144,725,503 17,117,395 652,440,895
-------------- --------------- -------------- ------------ --------------
$ 943,741,024 $ 9,560,773,733 $1,225,386,995 $193,897,176 $4,663,257,303
============== =============== ============== ============ ==============
$ 717,317,746 $ 7,039,048,426 $1,077,021,016 $195,035,943 $4,067,187,001
============== =============== ============== ============ ==============
$ 722,427,560 $ 6,704,717,648 $1,067,798,356 $210,004,133 $4,116,687,538
(17,221) 8,941,474 451,087 (1,256,432) (113,631)
(46,439) 175,796,508 7,714,386 (4,700,245) 128,925,055
221,377,124 2,671,318,103 149,423,166 (10,150,280) 417,758,341
-------------- --------------- -------------- ------------ --------------
$ 943,741,024 $ 9,560,773,733 $1,225,386,995 $193,897,176 $4,663,257,303
============== =============== ============== ============ ==============
$ 943,630,904 $ 9,331,993,502 $1,203,866,924 $190,610,696 $4,589,771,586
============== =============== ============== ============ ==============
47,791,119 431,744,475 69,624,563 18,568,973 126,731,100
============== =============== ============== ============ ==============
$19.74 $21.61 $17.29 $10.27 $36.22
============== =============== ============== ============ ==============
$110,120 $228,780,231 $21,520,071 $3,286,480 $73,485,717
============== =============== ============== ============ ==============
5,580 10,601,628 1,246,147 320,403 2,034,175
============== =============== ============== ============ ==============
$19.73 $21.58 $17.27 $10.26 $36.13
============== =============== ============== ============ ==============
</TABLE>
<PAGE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
ALLIANCE ALLIANCE ALLIANCE
SMALL CAP CONSERVATIVE ALLIANCE GROWTH
GROWTH INVESTORS BALANCED INVESTORS
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- ---------
<S> <C> <C> <C>
$153,853,714 $311,255,843 $1,711,741,713 $1,657,357,208
380,306 39,071 1,336,861 2,638,254
1,370,099 105,731 1,446,489 1,856,156
-- 29,663,095 239,139,139 159,509,187
403,968 325,132 529,990 2,830,011
-- 139,774 1,492,018 2,702,688
23,205 2,089,310 10,724,098 5,770,157
- ------------ ------------ -------------- --------------
156,031,292 343,617,956 1,966,410,308 1,832,663,661
- ------------ ------------ -------------- --------------
-- -- -- --
-- -- -- --
7,702,919 113,315 2,125,059 5,464,664
-- 29,663,095 239,139,139 159,509,187
7,192,631 73,102 94,151 461,205
-- -- -- --
8,682 1,107 -- 7,599
105,191 133,055 641,386 768,784
461 12,365 82,699 44,658
21,956 81,003 239,345 288,849
- ------------ ------------ -------------- --------------
15,031,840 30,077,042 242,321,779 166,544,946
- ------------ ------------ -------------- --------------
$140,999,452 $313,540,914 $1,724,088,529 $1,666,118,715
============ ============ ============== ==============
$153,110,020 $291,515,613 $1,529,925,684 $1,482,735,753
============ ============ ============== ==============
$141,856,917 $289,318,998 $1,515,099,274 $1,462,182,116
(461) 35,314 84,008 (1,463,848)
(1,600,698) 4,312,256 25,622,052 28,847,706
743,694 19,874,346 183,283,195 176,552,741
- ------------ ------------ -------------- --------------
$140,999,452 $313,540,914 $1,724,088,529 $1,666,118,715
============ ============ ============== ==============
$ 94,675,696 $307,846,822 $1,724,088,529 $1,630,388,457
============ ============ ============== ==============
7,666,635 25,886,381 98,055,256 87,899,970
============ ============ ============== ==============
$12.35 $11.89 $17.58 $18.55
============ ============ ============== ==============
$46,323,756 $5,694,092 $35,730,258
============ ============ ==============
3,752,576 479,176 1,928,937
============ ============ ==============
$12.34 $11.88 $18.52
============ ============ ==============
</TABLE>
2
<PAGE>
THE HUDSON RIVER TRUST
STATEMENTS OF OPERATIONS
Year Ended December 31, 1997
<TABLE>
<CAPTION>
ALLIANCE
INTERMEDIATE ALLIANCE
ALLIANCE GOVERNMENT ALLIANCE ALLIANCE GROWTH AND
MONEY MARKET SECURITIES QUALITY BOND HIGH YIELD INCOME
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Income** (Note 1):
Dividends (including $2,161,224 and
$7,600,919 from affiliated companies for
the Alliance Common Stock and Alliance
Aggressive Stock Portfolios,
respectively)............................. $ -- $ -- $ -- $ -- $ 5,855,617
Interest................................... 26,575,962 6,319,864 12,027,150 31,369,008 528,528
----------- ---------- ----------- ----------- -----------
Total income.............................. 26,575,962 6,319,864 12,027,150 31,369,008 6,384,145
----------- ---------- ----------- ----------- -----------
Expenses (Notes 1, 2 and 3):
Investment advisory fee.................... 1,701,504 512,659 946,523 1,759,520 2,241,190
Custodian fees............................. 34,909 27,311 29,438 37,074 50,640
Distribution fees--Class IB................ 99,712 2,784 -- 50,330 21,822
Printing and mailing expenses.............. 53,828 10,017 20,484 30,911 40,407
Professional fees.......................... 13,247 2,878 4,137 6,541 8,851
Proxy...................................... 18,723 4,003 7,831 8,578 9,482
SEC registration fees...................... 2,598 472 472 945 2,126
Trustees' fees............................. 12,946 2,812 4,882 7,918 10,507
Miscellaneous.............................. 7,936 2,178 3,718 4,003 4,378
----------- ---------- ----------- ----------- -----------
Total expenses............................ 1,945,403 565,114 1,017,485 1,905,820 2,389,403
----------- ---------- ----------- ----------- -----------
NET INVESTMENT INCOME........................ 24,630,559 5,754,750 11,009,665 29,463,188 3,994,742
----------- ---------- ----------- ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS)
(NOTES 1 AND 4):
Realized Gain (Loss):
On securities (including $60,278,736 and
$73,433,264 from affiliated companies for
the Alliance Common Stock and Alliance
Aggressive Stock Portfolios,
respectively)............................. 57,662 1,026,388 4,637,643 19,038,590 40,626,845
On options written......................... -- -- -- -- --
On foreign currency transactions........... -- -- 479,412 -- --
On futures contracts....................... -- (31,130) -- -- --
----------- ---------- ----------- ----------- -----------
Realized gain (loss)--net................... 57,662 995,258 5,117,055 19,038,590 40,626,845
----------- ---------- ----------- ----------- -----------
Change in Unrealized
Appreciation/Depreciation:
On securities.............................. (45,650) 715,736 (370,670) 2,081,485 45,313,202
On options written......................... -- -- -- -- --
On foreign currency transactions........... -- -- 79,202 -- --
On futures contracts....................... -- -- -- -- --
----------- ---------- ----------- ----------- -----------
Unrealized appreciation/depreciation--net .. (45,650) 715,736 (291,468) 2,081,485 45,313,202
----------- ---------- ----------- ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS)--NET .... 12,012 1,710,994 4,825,587 21,120,075 85,940,047
----------- ---------- ----------- ----------- -----------
NET INCREASE IN NET ASSETS FROM OPERATIONS .. $24,642,571 $7,465,744 $15,835,252 $50,583,263 $89,934,789
=========== ========== =========== =========== ===========
</TABLE>
- ------------
* For the period from May 1, 1997 (commencement of operations) to December
31, 1997.
** Net of foreign taxes withheld on dividends of $10,061, $28,990,
$241,270, $1,461,466, $402,959, $60,774, $545,351 and $589,252 for the
Alliance Growth and Income, Alliance Equity Index, Alliance Common
Stock, Alliance Global, Alliance International, Alliance Conservative
Investors, Alliance Balanced and Alliance Growth Investors Portfolios,
respectively, and on interest of $2,017, $398, $337 and $352 for the
Alliance Global, Alliance International, Alliance Balanced and Alliance
Growth Investors Portfolios, respectively.
See Notes to Financial Statements.
3
<PAGE>
<TABLE>
<CAPTION>
ALLIANCE ALLIANCE ALLIANCE ALLIANCE
EQUITY INDEX COMMON STOCK GLOBAL INTERNATIONAL
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- ---------
<S> <C> <C> <C>
$ 11,411,812 $ 68,591,236 $ 12,928,478 $ 2,632,662
789,772 18,865,438 6,100,385 1,090,065
------------ -------------- ------------ ------------
12,201,584 87,456,674 19,028,863 3,722,727
------------ -------------- ------------ ------------
2,197,395 29,420,651 7,017,899 1,762,245
122,477 252,696 669,018 309,149
107 196,198 30,918 2,877
66,090 886,522 127,631 19,754
15,908 245,582 33,973 3,642
16,561 297,204 43,819 5,710
3,779 -- 5,432 1,181
17,440 218,844 31,329 5,409
6,832 123,238 18,082 2,796
------------ -------------- ------------ ------------
2,446,589 31,640,935 7,978,101 2,112,763
------------ -------------- ------------ ------------
9,754,995 55,815,739 11,050,762 1,609,964
------------ -------------- ------------ ------------
2,229,446 948,337,540 89,619,727 6,320,591
-- 35,412,804 -- --
(3,600) (35,211) 12,151,769 2,073,635
1,334,820 -- -- --
------------ -------------- ------------ ------------
3,560,666 983,715,133 101,771,496 8,394,226
------------ -------------- ------------ ------------
158,811,684 1,059,002,503 11,374,979 (17,028,354)
-- (12,783,605) -- --
10,468 (108) 2,687,736 1,688,166
297,300 -- -- --
------------ -------------- ------------ ------------
159,119,452 1,046,218,790 14,062,715 (15,340,188)
------------ -------------- ------------ ------------
162,680,118 2,029,933,923 115,834,211 (6,945,962)
------------ -------------- ------------ ------------
$172,435,113 $2,085,749,662 $126,884,973 $ (5,335,998)
============ ============== ============ ============
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
ALLIANCE ALLIANCE ALLIANCE ALLIANCE
AGGRESSIVE SMALL CAP CONSERVATIVE ALLIANCE GROWTH
STOCK GROWTH INVESTORS BALANCED INVESTORS
PORTFOLIO PORTFOLIO* PORTFOLIO PORTFOLIO PORTFOLIO
--------- ---------- --------- --------- ---------
<S> <C> <C> <C> <C>
$ 17,775,006 $ 138,366 $ 1,057,328 $ 9,530,794 $ 10,909,405
10,411,701 273,322 12,801,311 52,969,301 30,543,074
- ------------ ---------- ----------- ------------ ------------
28,186,707 411,688 13,858,639 62,500,095 41,452,479
- ------------ ---------- ----------- ------------ ------------
22,471,593 349,889 1,458,313 6,677,983 7,843,703
156,983 18,251 125,580 354,061 433,193
75,004 22,465 3,118 -- 43,043
488,080 2,554 34,433 199,288 165,800
136,125 615 8,111 54,912 44,950
174,004 -- 13,373 77,187 57,542
-- -- 472 -- 6,141
121,089 696 8,523 46,548 41,008
64,056 860 5,612 30,053 22,804
- ------------ ---------- ----------- ------------ ------------
23,686,934 395,330 1,657,535 7,440,032 8,658,184
- ------------ ---------- ----------- ------------ ------------
4,499,773 16,358 12,201,104 55,060,063 32,794,295
- ------------ ---------- ----------- ------------ ------------
523,431,192 1,627,719 14,280,979 113,673,484 118,407,140
-- -- -- -- --
-- -- (294,655) (652,446) 3,578,951
-- -- -- -- --
- ------------ ---------- ----------- ------------ ------------
523,431,192 1,627,719 13,986,324 113,021,038 121,986,091
- ------------ ---------- ----------- ------------ ------------
(75,825,667) 743,694 10,033,377 64,409,755 77,338,868
-- -- -- -- --
-- -- 133,673 1,464,013 1,411,017
-- -- -- -- --
- ------------ ---------- ----------- ------------ ------------
(75,825,667) 743,694 10,167,050 65,873,768 78,749,885
- ------------ ---------- ----------- ------------ ------------
447,605,525 2,371,413 24,153,374 178,894,806 200,735,976
- ------------ ---------- ----------- ------------ ------------
$452,105,298 $2,387,771 $36,354,478 $233,954,869 $233,530,271
============ ========== =========== ============ ============
</TABLE>
4
<PAGE>
THE HUDSON RIVER TRUST
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
ALLIANCE
ALLIANCE INTERMEDIATE GOVERNMENT
MONEY MARKET PORTFOLIO SECURITIES PORTFOLIO
-------------------------------- ------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1997 1996 1997 1996
--------------- --------------- -------------- --------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income............................... $ 24,630,559 $ 19,055,993 $ 5,754,750 $ 4,575,583
Realized gain (loss)--net........................... 57,662 -- 995,258 (453,637)
Change in unrealized appreciation/depreciation of
investments and foreign currency denominated
assets and liabilities--net........................ (45,650) (7,886) 715,736 (1,025,808)
------------- ------------- ------------ ------------
Net increase in net assets from operations ......... 24,642,571 19,048,107 7,465,744 3,096,138
------------- ------------- ------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS (NOTE 1):
Class IA:
Dividends from net investment income............... (21,721,933) (19,050,946) (5,646,086) (4,575,583)
Dividends in excess of net investment income ...... -- (25,232) -- (19,617)
Distributions from realized gains.................. (30,365) -- -- --
Tax return of capital distributions................ -- -- -- --
------------- ------------- ------------ ------------
Total Class IA dividends and distributions ......... (21,752,298) (19,076,178) (5,646,086) (4,595,200)
------------- ------------- ------------ ------------
Class IB:
Dividends from net investment income............... (2,801,881) (5,047) (90,108) --
Dividends in excess of net investment income ...... -- (29,384) -- --
Distributions from realized gains.................. (7,892) -- -- --
Distributions in excess of realized gains ......... -- -- -- --
------------- ------------- ------------ ------------
Total Class IB dividends and distributions ......... (2,809,773) (34,431) (90,108) --
------------- ------------- ------------ ------------
Decrease in net assets from dividends and
distributions...................................... (24,562,071) (19,110,609) (5,736,194) (4,595,200)
------------- ------------- ------------ ------------
SHARE TRANSACTIONS (NOTES 1 AND 5):
Class IA:
Shares sold........................................ 902,735,892 508,537,942 40,498,885 36,879,548
Shares issued in reinvestment of dividends and
distributions..................................... 21,752,298 19,076,178 5,646,086 4,595,200
Shares redeemed.................................... (938,706,582) (450,848,823) (21,146,992) (23,371,086)
------------- ------------- ------------ ------------
Total Class IA transactions......................... (14,218,392) 76,765,297 24,997,979 18,103,662
------------- ------------- ------------ ------------
Class IB:
Shares sold........................................ 158,089,618 3,624,653 5,061,316 --
Shares issued in reinvestment of dividends and
distributions..................................... 2,809,773 34,431 90,108 --
Shares redeemed.................................... (39,732,243) (446,631) (97,482) --
------------- ------------- ------------ ------------
Total Class IB transactions......................... 121,167,148 3,212,453 5,053,942 --
------------- ------------- ------------ ------------
Net increase (decrease) in net assets derived from
share transactions................................. 106,948,756 79,977,750 30,051,921 18,103,662
------------- ------------- ------------ ------------
INCREASE (DECREASE) IN NET ASSETS ................... 107,029,256 79,915,248 31,781,471 16,604,600
NET ASSETS, BEGINNING OF PERIOD ..................... 466,606,194 386,690,946 88,384,425 71,779,825
------------- ------------- ------------ ------------
NET ASSETS, END OF PERIOD* .......................... $ 573,635,450 $ 466,606,194 $120,165,896 $ 88,384,425
============= ============= ============ ============
</TABLE>
- ------------
* Including accumulated undistributed (overdistributed) net investment
income of $149,936 and $43,191 for the Alliance Money Market Portfolio;
$17,556 and $3,160 for the Alliance Intermediate Government Securities
Portfolio; $321,561 and $(220,079) for the Alliance Quality Bond
Portfolio; $29,459 and $23,927 for the Alliance High Yield Portfolio;
$(7,871) and $11,797 for the Alliance Growth and Income Portfolio;
$(17,221) and $(5,276) for the Alliance Equity Index Portfolio, as of
December 31, 1997 and December 31, 1996, respectively.
See Notes to Financial Statements.
5
<PAGE>
<TABLE>
<CAPTION>
ALLIANCE
ALLIANCE ALLIANCE GROWTH AND INCOME ALLIANCE
QUALITY BOND PORTFOLIO HIGH YIELD PORTFOLIO PORTFOLIO EQUITY INDEX PORTFOLIO
---------------------------- --------------------------- --------------------------- ----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1997 1996 1997 1996 1997 1996
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 11,009,665 $ 10,285,868 $ 29,463,188 $ 15,471,581 $ 3,994,742 $ 3,051,998 $ 9,754,995 $ 5,656,346
5,117,055 871,659 19,038,590 12,420,138 40,626,845 12,181,263 3,560,666 15,194,950
(291,468) (1,749,535) 2,081,485 3,447,403 45,313,202 16,443,384 159,119,452 41,228,418
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
15,835,252 9,407,992 50,583,263 31,339,122 89,934,789 31,676,645 172,435,113 62,079,714
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
(11,132,504) (10,285,868) (26,828,709) (15,469,541) (3,997,147) (3,050,479) (10,027,043) (5,656,346)
-- (326,079) -- (432,568) -- -- -- (4,427)
-- -- (13,814,454) (11,348,200) (31,316,552) (11,682,352) (3,323,415) (15,093,505)
-- -- -- -- -- -- -- (7,525)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
(11,132,504) (10,611,947) (40,643,163) (27,250,309) (35,313,699) (14,732,831) (13,350,458) (20,761,803)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
-- -- (2,657,724) (2,040) (65,287) -- (648) --
-- -- -- (15,935) -- -- -- --
-- -- (2,518,666) (908) (1,815,517) -- (392) --
-- -- -- (18,516) -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
-- -- (5,176,390) (37,399) (1,880,804) -- (1,040) --
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
(11,132,504) (10,611,947) (45,819,553) (27,287,708) (37,194,503) (14,732,831) (13,351,498) (20,761,803)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
49,175,799 27,205,153 161,350,185 71,897,677 251,418,234 111,512,120 450,997,869 230,679,439
11,132,504 10,611,947 40,643,163 27,250,309 35,313,699 14,732,831 13,350,458 20,761,803
(16,801,045) (39,032,520) (52,652,236) (21,997,075) (17,464,089) (9,161,198) (66,043,438) (72,295,253)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
43,507,258 (1,215,420) 149,341,112 77,150,911 269,267,844 117,083,753 398,304,889 179,145,989
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
-- -- 63,018,257 677,158 31,791,055 -- 137,857 --
-- -- 5,176,390 37,399 1,880,804 -- 1,040 --
-- -- (534,056) -- (4,484) -- (35,558) --
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
-- -- 67,660,591 714,557 33,667,375 -- 103,339 --
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
43,507,258 (1,215,420) 217,001,703 77,865,468 302,935,219 117,083,753 398,408,228 179,145,989
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
48,210,006 (2,419,375) 221,765,413 81,916,882 355,675,505 134,027,567 557,491,843 220,463,900
155,023,472 157,442,847 200,045,465 118,128,583 232,080,388 98,052,821 386,249,181 165,785,281
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$203,233,478 $155,023,472 $421,810,878 $200,045,465 $587,755,893 $232,080,388 $943,741,024 $386,249,181
============ ============ ============ ============ ============ ============ ============ ============
</TABLE>
6
<PAGE>
THE HUDSON RIVER TRUST
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
ALLIANCE ALLIANCE
COMMON STOCK PORTFOLIO GLOBAL PORTFOLIO
------------------------------ -----------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1997 1996 1997 1996
-------------- -------------- -------------- ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income............................... $ 55,815,739 $ 48,811,771 $ 11,050,762 $ 10,849,353
Realized gain--net.................................. 983,715,133 587,208,099 101,771,496 44,997,037
Change in unrealized appreciation/depreciation of
investments and foreign currency denominated
assets and liabilities--net........................ 1,046,218,790 636,307,007 14,062,715 60,383,165
-------------- -------------- -------------- ------------
Net increase (decrease) in net assets from
operations......................................... 2,085,749,662 1,272,326,877 126,884,973 116,229,555
-------------- -------------- -------------- ------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS (NOTE
1):
Class IA:
Dividends from net investment income............... (43,806,963) (44,580,327) (23,003,562) (10,849,259)
Dividends in excess of net investment income ...... -- -- -- (4,499,020)
Distributions from realized gains.................. (700,688,717) (587,198,121) (76,503,591) (42,474,239)
Distributions in excess of realized gains ......... -- (71,434,343) -- --
Tax return of capital distributions................ -- (988,016) -- (220,411)
-------------- -------------- -------------- ------------
Total Class IA dividends and distributions ......... (744,495,680) (704,200,807) (99,507,153) (58,042,929)
-------------- -------------- -------------- ------------
Class IB:
Dividends from net investment income............... (241,911) (326) (319,694) (94)
Dividends in excess of net investment income ...... -- (4,564) -- (2,076)
Distributions from realized gains.................. (16,923,582) (9,978) (1,359,092) (1,502)
Distributions in excess of realized gains ......... -- (62,273) -- (4,502)
Tax return of capital distributions................ -- (108) -- (31)
-------------- -------------- -------------- ------------
Total Class IB dividends and distributions ......... (17,165,493) (77,249) (1,678,786) (8,205)
-------------- -------------- -------------- ------------
Decrease in net assets from dividends and
distributions...................................... (761,661,173) (704,278,056) (101,185,939) (58,051,134)
-------------- -------------- -------------- ------------
SHARE TRANSACTIONS (NOTES 1 AND 5):
Class IA:
Shares sold........................................ 1,034,152,489 756,034,799 241,147,160 255,537,439
Shares issued in reinvestment of dividends and
distributions..................................... 744,495,680 704,200,807 99,507,153 58,042,929
Shares redeemed.................................... (394,260,503) (282,642,349) (159,826,842) (60,861,388)
-------------- -------------- -------------- ------------
Total Class IA transactions......................... 1,384,387,666 1,177,593,257 180,827,471 252,718,980
-------------- -------------- -------------- ------------
Class IB:
Shares sold........................................ 209,141,659 1,237,252 21,767,932 285,485
Shares issued in reinvestment of dividends and
distributions..................................... 17,165,493 77,249 1,678,786 8,205
Shares redeemed.................................... (643,153) -- (1,917,712) --
-------------- -------------- -------------- ------------
Total Class IB transactions......................... 225,663,999 1,314,501 21,529,006 293,690
-------------- -------------- -------------- ------------
Net increase in net assets derived from share
transactions....................................... 1,610,051,665 1,178,907,758 202,356,477 253,012,670
-------------- -------------- -------------- ------------
INCREASE IN NET ASSETS............................... 2,934,140,154 1,746,956,579 228,055,511 311,191,091
NET ASSETS, BEGINNING OF PERIOD...................... 6,626,633,579 4,879,677,000 997,331,484 686,140,393
-------------- -------------- -------------- ------------
NET ASSETS, END OF PERIOD*........................... $9,560,773,733 $6,626,633,579 $1,225,386,995 $997,331,484
============== ============== ============== ============
</TABLE>
- ------------
* Including accumulated undistributed (overdistributed) net investment
income of $8,941,474 and $(194,316) for the Alliance Common Stock
Portfolio; $451,087 and $(3,212,284) for the Alliance Global Portfolio;
$(1,256,432) and $(614,431) for the Alliance International Portfolio;
$(113,631) and $(58,479) for the Alliance Aggressive Stock Portfolio;
$35,314 and $9,815 for the Alliance Conservative Investors Portfolio,
as of December 31, 1997 and December 31, 1996, respectively, and $(461)
for the Alliance Small Cap Growth Portfolio as of December 31, 1997.
** Commencement of Operations.
See Notes to Financial Statements.
7
<PAGE>
<TABLE>
<CAPTION>
ALLIANCE ALLIANCE
ALLIANCE ALLIANCE SMALL CAP GROWTH CONSERVATIVE INVESTORS
INTERNATIONAL PORTFOLIO AGGRESSIVE STOCK PORTFOLIO PORTFOLIO PORTFOLIO
----------------------------- ------------------------------- ---------------- ----------------------------
YEAR ENDED YEAR ENDED MAY 1, 1997** TO YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1997 1996 1997 1997 1996
------------- ------------ --------------- -------------- ---------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
$ 1,609,964 $ 1,072,074 $ 4,499,773 $ 8,075,002 $ 16,358 $ 12,201,104 $ 12,360,795
8,394,226 3,051,749 523,431,192 651,846,275 1,627,719 13,986,324 6,689,821
(15,340,188) 4,245,403 (75,825,667) (19,577,800) 743,694 10,167,050 (4,721,182)
------------- ------------ --------------- -------------- ------------ ------------ ------------
(5,335,998) 8,369,226 452,105,298 640,343,477 2,387,771 36,354,478 14,329,434
------------- ------------ --------------- -------------- ------------ ------------ ------------
(5,505,067) (1,072,074) (6,323,032) (8,075,028) (16,325) (11,954,796) (12,360,795)
-- (972,982) -- (50,994) -- -- (44,557)
(9,560,102) (2,651,391) (381,316,889) (651,842,635) (2,163,100) (9,269,071) (6,689,821)
-- -- -- (1,362,771) -- -- (396,608)
-- -- -- -- -- -- --
------------- ------------ --------------- -------------- ------------ ------------ ------------
(15,065,169) (4,696,447) (387,639,921) (661,331,428) (2,179,425) (21,223,867) (19,491,781)
------------- ------------ --------------- -------------- ------------ ------------ ------------
(69,625) -- (8,975) -- (904) (74,433) --
-- -- -- (452) -- -- --
(161,535) -- (6,038,166) (3,630) (1,071,973) (163,419) --
-- -- -- (32,780) -- -- --
-- -- -- -- -- -- --
------------- ------------ --------------- -------------- ------------ ------------ ------------
(231,160) -- (6,047,141) (36,862) (1,072,877) (237,852) --
------------- ------------ --------------- -------------- ------------ ------------ ------------
(15,296,329) (4,696,447) (393,687,062) (661,368,290) (3,252,302) (21,461,719) (19,491,781)
------------- ------------ --------------- -------------- ------------ ------------ ------------
204,985,168 141,011,557 1,331,662,733 1,093,061,087 154,901,196 34,060,741 50,046,532
15,065,169 4,696,447 387,639,921 661,331,428 2,179,425 21,223,868 19,491,781
(161,266,462) (26,157,811) (1,058,223,800) (568,654,477) (62,293,798) (44,876,250) (34,074,560)
------------- ------------ --------------- -------------- ------------ ------------ ------------
58,783,875 119,550,193 661,078,854 1,185,738,038 94,786,823 10,408,359 35,463,753
------------- ------------ --------------- -------------- ------------ ------------ ------------
3,841,704 -- 72,451,903 604,481 46,064,536 5,707,042 --
231,160 -- 6,047,141 36,862 1,072,877 237,851 --
(234,071) -- (608,248) -- (60,253) (107,498) --
------------- ------------ --------------- -------------- ------------ ------------ ------------
3,838,793 -- 77,890,796 641,343 47,077,160 5,837,395 --
------------- ------------ --------------- -------------- ------------ ------------ ------------
62,622,668 119,550,193 738,969,650 1,186,379,381 141,863,983 16,245,754 35,463,753
------------- ------------ --------------- -------------- ------------ ------------ ------------
41,990,341 123,222,972 797,387,886 1,165,354,568 140,999,452 31,138,513 30,301,406
151,906,835 28,683,863 3,865,869,417 2,700,514,849 -- 282,402,401 252,100,995
------------- ------------ --------------- -------------- ------------ ------------ ------------
$ 193,897,176 $151,906,835 $ 4,663,257,303 $3,865,869,417 $140,999,452 $313,540,914 $282,402,401
============= ============ =============== ============== ============ ============ ============
</TABLE>
8
<PAGE>
THE HUDSON RIVER TRUST
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
ALLIANCE ALLIANCE
BALANCED PORTFOLIO GROWTH INVESTORS PORTFOLIO
------------------------------ ------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1997 1996 1997 1996
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income .............................. $ 55,060,063 $ 49,871,322 $ 32,794,295 $ 25,706,114
Realized gain--net ................................. 113,021,038 128,392,470 121,986,091 131,200,343
Change in unrealized appreciation/depreciation of
investments and foreign currency denominated
assets and liabilities--net ....................... 65,873,768 (3,420,061) 78,749,885 (20,549,143)
-------------- -------------- -------------- --------------
Net increase in net assets from operations ......... 233,954,869 174,843,731 233,530,271 136,357,314
-------------- -------------- -------------- --------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS (NOTE
1):
Class IA:
Dividends from net investment income .............. (54,844,131) (49,871,322) (37,426,355) (25,705,569)
Dividends in excess of net investment income ..... -- (241,952) -- (2,082,361)
Distributions from realized gains ................. (84,244,038) (128,392,470) (84,649,354) (131,199,726)
Distributions in excess of realized gains ........ -- (2,491,886) -- (570,518)
-------------- -------------- -------------- --------------
Total Class IA dividends and distributions ........ (139,088,169) (180,997,630) (122,075,709) (159,558,174)
-------------- -------------- -------------- --------------
Class IB:
Dividends from net investment income .............. -- -- (527,651) (545)
Dividends in excess of net investment income ..... -- -- -- (2,449)
Distributions from realized gains ................. -- -- (1,840,006) (617)
Distributions in excess of realized gains ........ -- -- -- (6,239)
-------------- -------------- -------------- --------------
Total Class IB dividends and distributions ........ -- -- (2,367,657) (9,850)
-------------- -------------- -------------- --------------
Decrease in net assets from dividends and
distributions ..................................... (139,088,169) (180,997,630) (124,443,366) (159,568,024)
-------------- -------------- -------------- --------------
SHARE TRANSACTIONS (NOTES 1 AND 5):
Class IA:
Shares sold ....................................... 64,626,322 64,030,181 177,931,189 297,495,728
Shares issued in reinvestment of dividends and
distributions .................................... 139,088,169 180,997,630 122,075,709 159,558,174
Shares redeemed ................................... (212,348,166) (124,160,136) (80,173,883) (28,339,916)
-------------- -------------- -------------- --------------
Total Class IA transactions ........................ (8,633,675) 120,867,675 219,833,015 428,713,986
-------------- -------------- -------------- --------------
Class IB:
Shares sold ....................................... -- -- 34,376,432 468,087
Shares issued in reinvestment of dividends and
distributions .................................... -- -- 2,367,657 9,850
Shares redeemed ................................... -- -- (1,660,277) (90)
-------------- -------------- -------------- --------------
Total Class IB transactions ........................ -- -- 35,083,812 477,847
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets derived from
share transactions ................................ (8,633,675) 120,867,675 254,916,827 429,191,833
-------------- -------------- -------------- --------------
INCREASE IN NET ASSETS .............................. 86,233,025 114,713,776 364,003,732 405,981,123
NET ASSETS, BEGINNING OF PERIOD ..................... 1,637,855,504 1,523,141,728 1,302,114,983 896,133,860
-------------- -------------- -------------- --------------
NET ASSETS, END OF PERIOD* .......................... $1,724,088,529 $1,637,855,504 $1,666,118,715 $1,302,114,983
============== ============== ============== ==============
</TABLE>
- ------------
* Including accumulated undistributed (overdistributed) net investment
income of $84,008 and $(190,700) for the Alliance Balanced Portfolio;
$(1,463,848) and $(1,135,946) for the Alliance Growth Investors
Portfolio, as of December 31, 1997 and December 31, 1996, respectively.
See Notes to Financial Statements.
9
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE MONEY MARKET PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
================================================================================================
EFFECTIVE
PRINCIPAL VALUE ANNUAL
AMOUNT (NOTE 1) YIELD*
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHORT-TERM DEBT SECURITIES:
BANKERS' ACCEPTANCES
Bank of California:
Due 01/21/98.......................................... $ 1,000,000 $ 996,905 5.67%
Due 01/26/98 ......................................... 8,000,000 7,969,055 5.67
-----------
TOTAL BANKERS' ACCEPTANCES (1.6%) ................... 8,965,960
-----------
CERTIFICATES OF DEPOSIT
Barclays Bank
Due 08/25/98.......................................... 10,000,000 10,002,625 5.83
Credit Suisse First Boston
Due 03/16/98 ......................................... 6,000,000 5,999,519 6.08
Morgan Guaranty Trust Co.
Due 03/19/98 ......................................... 10,000,000 10,000,695 5.95
Swiss Bank Corp.
Due 01/30/98.......................................... 10,000,000 9,998,945 6.14
Westdeutsche Landesbank
Due 07/31/98 ......................................... 5,000,000 4,999,725 5.78
-----------
TOTAL CERTIFICATES OF DEPOSIT (7.1%) ................ 41,001,509
-----------
COMMERCIAL PAPER
Abbey National North America Corp.
Due 03/02/98.......................................... 25,000,000 24,767,500 5.77
ASCC
Due 01/15/98.......................................... 11,000,000 10,975,831 5.90
Asset Backed Capital
Due 02/09/98.......................................... 12,500,000 12,424,709 5.57
Associates Corp. of North America
Due 01/02/98.......................................... 25,000,000 24,996,077 6.75
Clipper Receivables Corp.
Due 01/02/98.......................................... 25,000,000 24,996,043 6.85
CXC, Inc.
Due 02/09/98.......................................... 24,400,000 24,252,502 5.67
Dakota Funding, Inc.
Due 01/13/98.......................................... 2,000,000 1,996,233 6.06
Dresdner U.S. Finance, Inc.
Due 02/25/98.......................................... 20,000,000 19,829,500 5.79
Edison Asset Securitization
Due 02/11/98.......................................... 20,200,000 20,072,090 5.88
Falcon Asset Securitization
Due 02/25/98.......................................... 6,220,000 6,167,165 5.90
International Lease Finance Corp.
Due 01/02/98.......................................... 25,000,000 24,996,043 6.68
International Securitization
Due 03/05/98.......................................... 5,030,000 4,981,058 5.86
Koch Industries
Due 01/02/98.......................................... 25,000,000 24,996,078 6.75
Morgan Stanley Group, Inc.
Due 03/23/98.......................................... 24,200,000 23,896,169 5.82
National Citibank of Cleveland
Due 02/16/98.......................................... 25,000,000 24,833,375 5.29
National Rural Utilities Finance Corp.
Due 04/15/98.......................................... 20,000,000 19,676,834 5.83
Paccar Financial Corp.
Due 01/02/98.......................................... 12,000,000 11,998,117 6.75
Preferred Receivables Funding
Due 02/17/98.......................................... 5,050,000 5,013,211 5.89
SPARC EM Ltd.
Due 02/04/98.......................................... 25,000,000 24,868,723 5.78
10
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE MONEY MARKET PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1997
================================================================================================
EFFECTIVE
PRINCIPAL VALUE ANNUAL
AMOUNT (NOTE 1) YIELD*
- ------------------------------------------------------------------------------------------------
Suntrust Bank
Due 03/09/98.......................................... $20,000,000 $ 19,793,044 5.79%
Texaco, Inc.
Due 03/12/98.......................................... 25,000,000 24,728,750 5.81
Three River Funding
Due 01/20/98.......................................... 5,313,000 5,297,410 6.17
------------
TOTAL COMMERCIAL PAPER (67.2%) ...................... 385,556,462
------------
CORPORATE NOTE (2.6%)
Beta Finance, Inc.
Due 01/30/98.......................................... 15,000,000 15,012,369 4.60
------------
TIME DEPOSIT (2.7%)
Harris Trust & Savings Bank
Due 01/02/98.......................................... 15,300,000 15,300,425 6.50
------------
U.S. GOVERNMENT AGENCIES (0.9%)
Federal Home Loan Mortgage Corp.
Due 02/12/98.......................................... 5,400,000 5,367,492 5.64
------------
VARIABLE RATE SECURITIES
Bankers Trust
Due 02/17/98(a) ...................................... 20,000,000 20,002,558 5.94
CC (USA), Inc.
Due 10/27/98(a) ...................................... 20,000,000 20,002,392 6.04
Federal Farm Credit Bank
Due 10/01/98(a) ...................................... 20,000,000 20,000,252 5.63
Federal National Mortgage Association
Due 06/18/98(a) ...................................... 20,000,000 20,009,248 5.72
------------
TOTAL VARIABLE RATE SECURITIES (14.0%) .............. 80,014,450
------------
TOTAL INVESTMENTS IN SHORT-TERM DEBT SECURITIES
(96.1%)
(Amortized Cost $551,106,796) ........................ 551,218,667
OTHER ASSETS LESS LIABILITIES (3.9%) .................. 22,416,783
------------
NET ASSETS (100.0%) ................................... $573,635,450
============
</TABLE>
- ------------
* Based on market values at the close of business on December 31, 1997.
(a) Coupon will fluctuate based upon an interest rate index. Stated due
date reflects final maturity of security.
See Notes to Financial Statements.
11
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
==============================================================
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- --------------------------------------------------------------
<S> <C> <C>
LONG-TERM DEBT SECURITIES:
ASSET BACKED (4.6%)
The Money Store Home Equity
Trust:
Series 1997-C 6.355%, 10/15/03 . $ 3,506,503 $ 3,502,681
Series 1997-I 6.42%, 04/15/06 . 1,997,075 1,997,695
------------
5,500,376
------------
COLLATERALIZED MORTGAGE
OBLIGATIONS (6.7%)
Federal Home Loan Mortgage Corp.
Multi-Class Series 1434
7.0%, 08/15/21 ................. 3,150,000 3,203,140
Federal National Mortgage
Association Series 1997-M8
6.94%, 01/25/22 ................ 1,987,921 2,045,690
Residential Funding Mortgage
Securities, Inc. Series
1993-S11
7.25%, 03/25/23 ................ 2,780,248 2,787,198
------------
8,036,028
------------
MORTGAGE RELATED (3.2%)
Federal Home Loan Mortgage Corp.
GOLD
9.5%, 01/01/20 ................. 4,879 5,285
Federal National Mortgage
Association Series 1997-20
6.1485%, 03/25/27(a) ........... 3,815,421 3,802,296
------------
3,807,581
------------
U.S. GOVERNMENT & AGENCIES (74.7%)
Federal Farm Credit Corp.
6.29%, 08/24/04 ................ 4,700,000 4,764,089
Federal Home Loan Bank:
5.5%, 01/10/01 ................. 4,500,000 4,453,045
5.77%, 02/03/04 ................ 6,430,000 6,352,551
Federal Home Loan Mortgage Corp.
6.24%, 10/06/04 ................ $ 4,965,000 $ 5,027,936
Tennessee Valley Authority
6.5%, 08/20/01 ................. 5,400,000 5,511,348
U.S Treasury:
6.0% Note, 08/15/99 ............ 12,000,000 12,060,000
5.625% Note, 11/30/99 .......... 3,650,000 3,646,580
6.0% Note, 08/15/00 ............ 13,200,000 13,294,882
5.75% Note, 11/15/00 ........... 2,500,000 2,504,687
6.125% Note, 12/31/01 .......... 5,750,000 5,827,269
6.25% Note, 06/30/02 ........... 11,000,000 11,223,443
11.875% Bond, 11/15/03 ......... 6,300,000 8,193,937
6.625% Note, 05/15/07 .......... 6,550,000 6,934,812
------------
89,794,579
------------
TOTAL LONG-TERM DEBT SECURITIES (89.2%)
(Amortized Cost $105,801,659) .. 107,138,564
------------
SHORT-TERM DEBT SECURITIES:
U.S. GOVERNMENT AGENCIES (6.5%)
Federal Home Loan Mortgage Corp.
6.0%, 01/02/98 ................. 7,800,000 7,798,700
------------
TOTAL SHORT-TERM DEBT SECURITIES (6.5%)
(Amortized Cost $7,798,700) ... 7,798,700
------------
TOTAL INVESTMENTS (95.7%)
(Amortized Cost $113,600,359) .. 114,937,264
OTHER ASSETS LESS LIABILITIES (4.3%) 5,228,632
------------
NET ASSETS (100.0%) ............. $120,165,896
============
</TABLE>
- ------------
(a) Adjustable rate mortgage; stated interest rate in effect at
December 31, 1997.
See Notes to Financial Statements.
12
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE QUALITY BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
===============================================================
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- ---------------------------------------------------------------
<S> <C> <C>
LONG-TERM DEBT SECURITIES:
BASIC MATERIALS (2.8%)
CHEMICALS
Reliance Industries Ltd.
10.375%, 06/24/16+ ............. $ 5,500,000 $ 5,611,100
------------
CONSUMER NONCYCLICALS
MEDIA & CABLE
Tele-Communication, Inc.
9.80%, 02/01/12 ................ 6,530,000 8,118,161
Time Warner Entertainment Co.
8.375%, 03/15/23 ............... 5,700,000 6,504,726
Turner Broadcasting System, Inc.
8.375%, 07/01/13 ............... 2,000,000 2,244,040
------------
TOTAL CONSUMER NONCYCLICALS (8.3%) 16,866,927
------------
CREDIT SENSITIVE
BANKS (2.6%)
St. George Funding Co.
8.485%, 12/31/49+ (a) .......... 5,000,000 5,309,700
------------
FINANCIAL SERVICES (0.2%)
Goldman Sachs Group
7.2%, 11/01/06+ ................ 300,000 317,121
------------
FOREIGN GOVERNMENT (3.8%)
Government of Australia
10.0%, 10/15/07 ................ AU$ 9,250,000 7,756,812
------------
MORTGAGE RELATED (14.0%)
Federal Home Loan
Mortgage Corp.
7.0%, 09/01/11 ................. $ 6,917,372 7,023,298
Federal National Mortgage
Association:
6.5%, 05/01/11 ................. 11,686,519 11,693,823
6.5%, 08/01/11 ................. 1,921,889 1,923,090
7.0%, 05/01/26 ................. 7,722,172 7,775,262
------------
28,415,473
------------
U.S. GOVERNMENT AGENCIES (14.7%)
Federal Home Loan Bank
5.77%, 12/22/99 ................ $30,000,000 $ 29,970,960
------------
U.S. GOVERNMENT (50.1%)
U.S. Treasury:
6.0% Note, 08/15/00 ............ 10,400,000 10,474,755
6.5% Note, 05/31/02 ............ 46,825,000 48,200,485
6.5% Note, 08/15/05 ............ 20,000,000 20,868,760
6.875% Note, 05/15/06 .......... 10,125,000 10,836,919
6.125% Bond, 11/15/27 .......... 11,050,000 11,353,875
------------
101,734,794
------------
TOTAL CREDIT SENSITIVE (85.4%) . 173,504,860
------------
TOTAL LONG-TERM DEBT SECURITIES (96.5%)
(Amortized Cost $194,076,702).. 195,982,887
------------
SHORT-TERM DEBT SECURITIES:
U.S. GOVERNMENT AGENCIES (1.5%)
Federal Home Loan
Mortgage Corp.
6.0%, 01/02/98 ................. 3,100,000 3,099,483
------------
TOTAL SHORT-TERM DEBT SECURITIES (1.5%)
(Amortized Cost $3,099,483) ... 3,099,483
------------
TOTAL INVESTMENTS (98.0%)
(Amortized Cost $197,176,185) .. 199,082,370
OTHER ASSETS
LESS LIABILITIES (2.0%)......... 4,151,108
------------
NET ASSETS (100.0%) ............. $203,233,478
============
</TABLE>
<PAGE>
- ------------
+ Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may only be resold to qualified institutional
buyers. At December 31, 1997, these securities amounted to $11,237,921
or 5.5% of net assets.
(a) Coupon will increase periodically based upon a predetermined schedule.
Stated interest rate in effect at December 31, 1997.
See Notes to Financial Statements.
13
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE HIGH YIELD PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
=========================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------
<S> <C> <C>
COMMON STOCKS AND OTHER INVESTMENTS:
BUSINESS SERVICES (0.0%)
PRINTING, PUBLISHING & BROADCASTING
Pegasus Communications Corp.
(Class A) * ................... 3,384 $ 68,949
----------
CAPITAL GOODS (0.0%)
BUILDING & CONSTRUCTION
Capital Pacific Holdings,
Inc.--Warrants* ............... 11,850 17,775
----------
CONSUMER CYCLICALS
RETAIL--GENERAL (0.0%)
Eye Care Centers of America--
Warrants*+ .................... 5,000 20,000
Florists Transworld Corp.
(Class B)*+ ................... 18,750 18,750
----------
TOTAL CONSUMER CYCLICALS (0.0%) 38,750
----------
CONSUMER NONCYCLICALS
HOSPITAL SUPPLIES & SERVICES (0.0%)
Wright Medical
Technology, Inc.--Warrants* .. 618 61,645
----------
SOAPS & TOILETRIES (0.0%)
Renaissance Cosmetics--
Warrants* ..................... 2,000 19,500
----------
TOTAL CONSUMER NONCYCLICALS (0.0%) 81,145
----------
TECHNOLOGY
ELECTRONICS (0.0%)
Interactive Systems Corp.--
Warrants* ..................... 1,500 3,750
----------
TELECOMMUNICATIONS (0.1%)
Nextel Communications, Inc.
(Class A) * ................... 10,845 281,970
Optel, Inc. * .................. 10,000 0
Primus Telecommunications--
Warrants* ..................... 6,500,000 0
----------
281,970
----------
TOTAL TECHNOLOGY (0.1%) ...... 285,720
----------
TOTAL COMMON STOCKS AND
OTHER INVESTMENTS (0.1%)
(Cost $336,685) ............... 492,339
----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
---------
<S> <C> <C>
LONG-TERM DEBT SECURITIES:
BASIC MATERIALS
CHEMICALS (1.4%)
Trans Resources, Inc.
11.875% Sr. Sub. Note
Series B, 07/01/02 ............ $5,500,000 5,775,000
---------
CHEMICALS--SPECIALTY (0.5%)
Koppers Industries, Inc.
9.875%, 12/01/07+.............. 2,000,000 2,060,000
---------
METALS & MINING (9.8%)
AE1 Holding Co.
10.0%, 11/15/07+ .............. 8,500,000 8,755,000
Acme Metals, Inc.
10.875%, 12/15/07+ ............ 5,000,000 4,900,000
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
=============================================================
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- -------------------------------------------------------------
<S> <C> <C>
Centaur Mining &
Exploration Ltd.
11.0%, 12/01/07+ ............... $4,000,000 $ 4,020,000
Glencore Nickel Proprietary Ltd.
9.0%, 12/01/14 + ............... 7,000,000 6,930,000
Great Lakes Carbon Corp.
10.0%, 01/01/06 ................ 2,500,000 2,675,000
Maxxam Group Holdings, Inc.
12.0%, 08/01/03 ................ 3,395,000 3,666,600
Park-Ohio Industries
9.25%, 12/01/07+................ 5,000,000 5,075,000
Westmin Resources Ltd.
11.0%, 03/15/07 ................ 5,000,000 5,475,000
-----------
41,496,600
-----------
PAPER (0.7%)
Bear Island Paper Co. LLC
10.0%, 12/01/07+ ............... 3,000,000 3,037,500
-----------
TOTAL BASIC MATERIALS (12.4%) . 52,369,100
-----------
BUSINESS SERVICES
PRINTING, PUBLISHING & BROADCASTING (10.0%)
American Banknote Corp.
11.25%, 12/01/07 ............... 3,000,000 3,007,500
American Lawyer Media
9.75%, 12/15/07+ ............... 2,000,000 2,030,000
Central European Media
Enterprises Ltd.
9.375%, 08/15/04 ............... 6,000,000 5,880,000
Dialog Corp. PLC
11.0%, 11/15/07+ ............... 5,000,000 5,212,500
Fox Kids Worldwide, Inc.
9.25%, 11/01/07+ ............... 7,000,000 6,790,000
Pen Tab Industries, Inc.
10.875%, 02/01/07 .............. 3,500,000 3,368,750
Radio One, Inc.
7.0%, 05/15/04(a) .............. 5,000,000 4,950,000
Supercanal Holdings SA
14.5%, 12/15/07 ................ 2,162,923 2,125,423
Telemundo Group, Inc.
7.0%, 02/15/06(a) .............. 8,235,000 8,646,750
-----------
42,010,923
-----------
PROFESSIONAL SERVICES (1.6%)
Scotsman Group, Inc.
8.625%, 12/15/07 ............... 4,000,000 4,000,000
T/SF Communications Corp.
10.375%, 11/01/07 .............. 3,000,000 2,985,000
-----------
6,985,000
-----------
TRUCKING, SHIPPING (1.2%)
Navigator Gas Transport
10.5%, 06/30/07+ ............... 4,850,000 5,116,750
-----------
TOTAL BUSINESS SERVICES (12.8%) 54,112,673
-----------
CAPITAL GOODS
AEROSPACE (1.0%)
Stellex Industries, Inc.
9.5%, 11/01/07+ ................ 4,000,000 4,040,000
-----------
BUILDING & CONSTRUCTION (5.3%)
Airxcel, Inc.
11.0%, 11/15/07+ ............... 4,000,000 4,090,000
GS Superhighway Holdings
10.25%, 08/15/07+............... 10,000,000 8,750,000
14
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE HIGH YIELD PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
=============================================================
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- -------------------------------------------------------------
MMI Products, Inc.
11.25%, 04/15/07 ............... $ 4,000,000 $ 4,360,000
Werner Holdings Co., Inc.
10.0%, 11/15/07+................ 5,000,000 5,137,500
-----------
22,337,500
-----------
MACHINERY (1.6%)
High Voltage Engineering
10.5%, 08/15/04+................ 6,500,000 6,776,250
-----------
TOTAL CAPITAL GOODS (7.9%) .... 33,153,750
-----------
CONSUMER CYCLICALS
AUTO RELATED (3.1%)
Advanced Accessory Systems
9.75%, 10/01/07+................ 2,700,000 2,662,875
Safety Components
International, Inc.
10.125%, 07/15/07 .............. 3,500,000 3,605,000
United Auto Group, Inc.
11.0%, 07/15/07+ ............... 7,000,000 6,895,000
-----------
13,162,875
-----------
HOUSEHOLD FURNITURE, APPLIANCES (1.0%)
Sealy Mattress Co.
9.875%, 12/15/07+ .............. 4,100,000 4,197,375
-----------
LEISURE RELATED (5.8%)
Discovery Zone--Units
13.5%, 08/01/02 (b)+ ........... 3,500,000 3,648,750
Hedstrom Corp.
10.0%, 06/01/07+ ............... 6,000,000 6,052,500
Penn National Gaming, Inc.
10.625%, 12/15/04+ ............. 3,000,000 3,105,000
Riviera Holdings Corp.
10.0%, 08/15/04+ ............... 3,000,000 2,977,500
Trump Atlantic City Associates
11.25%, 05/01/06 ............... 4,500,000 4,443,750
Waterford Gaming LLC
12.75%, 11/15/03................ 4,000,000 4,400,000
-----------
24,627,500
-----------
RETAIL--GENERAL (0.6%)
Pantry, Inc.
12.0%, 11/15/00 ................ 2,150,000 2,316,625
-----------
TOTAL CONSUMER CYCLICALS (10.5%) 44,304,375
-----------
CONSUMER NONCYCLICALS
CONTAINERS (2.7%)
Anchor Glass
11.25%, 04/01/05+ .............. 4,000,000 4,300,000
MVE, Inc.
12.5%, 02/15/02 ................ 2,000,000 1,970,000
Riverwood International Corp.
10.625%, 08/01/07+ ............. 5,000,000 5,062,500
-----------
11,332,500
-----------
DRUGS (1.1%)
Schein Pharmaceutical
8.906%, 12/15/04+(c) ........... 5,000,000 4,887,500
-----------
FOODS (4.8%)
Cuddy International Corp.
10.75%, 12/01/07+ .............. 4,000,000 4,025,000
Imperial Holly Corp.
9.75%, 12/15/07+................ 5,000,000 5,040,625
Richmont Marketing Special
10.125%, 12/15/07+ ............. $ 3,000,000 $ 3,045,000
Specialty Foods Corp.
11.125%, 10/01/02 .............. 8,000,000 8,080,000
-----------
20,190,625
-----------
RETAIL--FOODS (0.5%)
Digiorgio Corp.
10.0%, 06/15/07 ................ 2,000,000 1,970,000
-----------
TOTAL CONSUMER NONCYCLICALS (9.1%) 38,380,625
-----------
CREDIT SENSITIVE
FINANCIAL SERVICES (2.9%)
Metris Companies, Inc.
10.0%, 11/01/04+ ............... 10,000,000 10,225,000
Wilshire Financial
Services Group
13.0%, 08/15/04................. 2,000,000 2,035,000
-----------
TOTAL CREDIT SENSITIVE (2.9%) 12,260,000
-----------
ENERGY
OIL--DOMESTIC (4.7%)
Transamerican Energy
11.5%, 06/15/02+ ............... 13,000,000 13,065,000
TransTexas Gas Corp.
13.75%, 12/31/01 ............... 5,829,000 6,513,908
-----------
19,578,908
-----------
OIL--INTERNATIONAL (1.9%)
Hurricane Hydrocarbons
11.75%, 11/01/04+ .............. 8,000,000 8,040,000
-----------
OIL--SUPPLIES & CONSTRUCTION (1.5%)
Celestica International, Inc.
10.5%, 12/31/06 ................ 2,500,000 2,646,875
Deeptech International, Inc.
12.0%, 12/15/00 ................ 3,500,000 3,696,875
-----------
6,343,750
-----------
TOTAL ENERGY (8.1%) ............ 33,962,658
-----------
TECHNOLOGY
ELECTRONICS (4.8%)
Details, Inc.
10.0%, 11/15/05+................ 4,000,000 4,110,000
Interactive Systems, Inc.
Zero Coupon, 08/01/03(d) ....... 1,500,000 525,000
International Logistics Ltd.
9.75%, 10/15/07+ ............... 6,000,000 5,940,000
Sullivan Graphics, Inc.
12.75%, 08/01/05 ............... 5,000,000 5,050,000
Unisys Corp.
11.75%, 10/15/04 ............... 4,000,000 4,580,000
-----------
20,205,000
-----------
TELECOMMUNICATIONS (20.7%)
American Telecasting, Inc.
Zero Coupon, 08/15/05(d) ....... 5,000,000 1,500,000
EchoStar Communications Corp.
12.5%, 07/01/02+ ............... 7,000,000 7,577,500
GST Telecommunications, Inc.
12.75%, 11/15/07 ............... 5,000,000 5,225,000
Ionica Group PLC
Zero Coupon, 05/01/07(d) ....... 13,000,000 5,200,000
15
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE HIGH YIELD PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1997
=============================================================
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- -------------------------------------------------------------
Iridium LLC/Capital Corp.
14.0%, 07/15/05 ................ $12,000,000 $ 13,110,000
Knology Holdings, Inc.
Zero Coupon, 10/15/07(d) ....... 15,000,000 8,062,500
Microcell
Telecommunications, Inc.
Zero Coupon, 06/01/06(d) ....... 10,000,000 6,750,000
Netia Holdings B.V.:
Zero Coupon, 11/01/07+(d) ..... 3,000,000 1,710,000
10.25%, 11/01/07+ .............. 5,000,000 4,800,000
Optel, Inc.
13.0%, 02/15/05 ................ 10,000,000 10,600,000
Orion Network Systems, Inc.
11.25%, 01/15/07 ............... 4,000,000 4,500,000
Primus Telecommunications
11.75%, 08/01/04 ............... 6,500,000 6,922,500
Winstar Equipment Corp.
12.5%, 03/15/04 ................ 10,000,000 11,150,000
------------
87,107,500
------------
TOTAL TECHNOLOGY (25.5%) ...... 107,312,500
------------
DIVERSIFIED
MISCELLANEOUS (0.7%)
Elgin National Industries
11.0%, 11/01/07+ ............... $ 3,000,000 $ 3,101,250
------------
TOTAL LONG-TERM DEBT SECURITIES (89.9%)
(Amortized Cost $371,488,588) 378,956,931
------------
SHORT-TERM DEBT SECURITIES:
U.S. GOVERNMENT AGENCIES
Federal Home Loan
Mortgage Corp.
6.0%, 01/02/98 ................ 30,000,000 29,995,000
------------
TOTAL SHORT-TERM DEBT SECURITIES (7.1%)
(Amortized Cost $29,995,000) ... 29,995,000
------------
TOTAL INVESTMENTS (97.1%)
(Cost/Amortized Cost
$401,820,273)................... 409,444,270
OTHER ASSETS
LESS LIABILITIES (2.9%)......... 12,366,608
------------
NET ASSETS (100.0%) ............. $421,810,878
============
</TABLE>
- ------------
* Non-income producing.
+ Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may only be resold to qualified institutional
buyers. At December 31, 1997, these securities amounted to $197,227,625
or 46.8% of net assets.
(a) Coupon will increase periodically based upon a predetermined schedule.
Stated interest rate in effect at December 31, 1997.
(b) Consists of more than one class of securities traded together as a
unit; generally bonds with attached stocks or warrants.
(c) Coupon will fluctuate based upon an interest rate index. Stated
interest rate in effect at December 31, 1997.
(d) Debt security initially issued in zero coupon form which converts to
coupon form at a specific rate and date.
See Notes to Financial Statements.
16
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GROWTH & INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
===========================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- -----------------------------------------------------------
<S> <C> <C>
COMMON STOCKS AND OTHER
INVESTMENTS:
BASIC MATERIALS
CHEMICALS (1.6%)
Dupont (E.I.) de Nemours & Co. .. 158,000 $ 9,489,875
-----------
CHEMICALS--SPECIALTY (0.6%)
Praxair, Inc. ................... 77,000 3,465,000
-----------
TOTAL BASIC MATERIALS (2.2%) .. 12,954,875
-----------
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (2.6%)
USA Waste Services, Inc.* ...... 113,295 4,446,829
Waste Management, Inc. .......... 390,000 10,725,000
-----------
15,171,829
-----------
PRINTING, PUBLISHING &
BROADCASTING (3.3%)
Belo (A.H.) Corp. (Series A) ... 96,000 5,388,000
Gannett Co. ..................... 82,000 5,068,625
New York Times Co. (Class A) ... 41,000 2,711,125
Reuters Holdings PLC (ADR) ..... 93,000 6,161,250
-----------
19,329,000
-----------
TOTAL BUSINESS SERVICES (5.9%) 34,500,829
-----------
CAPITAL GOODS
AEROSPACE (0.6%)
General Dynamics Corp. .......... 42,000 3,630,375
-----------
ELECTRICAL EQUIPMENT (1.5%)
General Electric Co. ............ 121,000 8,878,375
-----------
MACHINERY (2.7%)
Allied Signal, Inc. ............. 72,000 2,803,500
Cooper Industries, Inc. ......... 85,000 4,165,000
Fluor Corp. ..................... 87,000 3,251,625
United Technologies Corp. ...... 77,100 5,613,844
-----------
15,833,969
-----------
TOTAL CAPITAL GOODS (4.8%) .... 28,342,719
-----------
CONSUMER CYCLICALS
AIRLINES (1.7%)
Delta Air Lines, Inc. ........... 39,200 4,664,800
Northwest Airlines Corp.
(Class A)* ..................... 111,000 5,314,125
-----------
9,978,925
-----------
APPAREL, TEXTILE (0.5%)
Reebok International, Inc.* .... 100,400 2,892,775
-----------
AUTOS & TRUCKS (1.3%)
Harley-Davidson, Inc. ........... 285,000 7,801,875
-----------
HOUSEHOLD FURNITURE,
APPLIANCES (0.7%)
Sunbeam Corp. ................... 91,500 3,854,438
-----------
RETAIL--GENERAL (3.8%)
Dayton Hudson Corp. ............. 92,000 6,210,000
Federated Department Stores,
Inc. * ......................... 94,600 4,073,712
Home Depot, Inc. ................ 124,800 7,347,600
Sears, Roebuck & Co. ............ 103,800 4,696,950
-----------
22,328,262
-----------
TOTAL CONSUMER CYCLICALS (8.0%) 46,856,275
-----------
CONSUMER NONCYCLICALS
CONTAINERS (0.5%)
Sealed Air Corp.* ............... 44,000 $ 2,717,000
-----------
DRUGS (6.3%)
American Home Products Corp. ... 67,000 5,125,507
Centocor, Inc.* ................. 253,900 8,442,175
Genzyme Corp. (General
Division)* ..................... 70,000 1,942,500
Merck & Co., Inc. ............... 92,000 9,775,000
Schering Plough Corp. ........... 189,000 11,741,625
-----------
37,026,807
-----------
FOODS (3.4%)
Campbell Soup Co. ............... 215,000 12,496,875
Heinz (H.J.) Co. ................ 93,000 4,725,562
Tyson Foods, Inc. ............... 135,200 2,771,600
-----------
19,994,037
-----------
HOSPITAL SUPPLIES & SERVICES (1.9%)
Baxter International, Inc. ..... 61,900 3,122,081
Becton, Dickinson & Co. ......... 46,000 2,300,000
PacifiCare Health Systems, Inc.
(Class B) * .................... 115,000 6,023,125
-----------
11,445,206
-----------
SOAPS & TOILETRIES (1.7%)
Gillette Co. .................... 100,000 10,043,750
-----------
TOBACCO (4.5%)
Philip Morris Cos., Inc. ........ 238,500 10,807,031
RJR Nabisco Holdings Corp. ..... 410,000 15,375,000
-----------
26,182,031
-----------
TOTAL CONSUMER NONCYCLICALS (18.3%) 107,408,831
-----------
CREDIT SENSITIVE
BANKS (6.8%)
Chase Manhattan Corp. ........... 151,000 16,534,500
Citicorp ........................ 97,800 12,365,587
First Chicago NBD Corp. ......... 12,825 1,070,887
First Union Corp. ............... 197,000 10,096,250
-----------
40,067,224
-----------
FINANCIAL SERVICES (4.5%)
Household International, Inc. .. 57,000 7,271,062
MBNA Corp. ...................... 124,500 3,400,406
Morgan Stanley, Dean Witter,
Discover & Co. ................. 185,000 10,938,125
PMI Group, Inc. ................. 66,600 4,816,013
-----------
26,425,606
-----------
INSURANCE (5.4%)
American International Group,
Inc. ........................... 85,000 9,243,750
General Re Corp. ................ 26,400 5,596,800
Hartford Financial Services
Group, Inc. .................... 56,500 5,286,281
Hartford Life, Inc. (Class A) .. 60,000 2,718,750
PennCorp Financial Group, Inc. . 93,000 3,318,938
Travelers Group, Inc. ........... 46,500 2,505,188
Travelers Property Casualty
Corp. (Class A)................. 63,000 2,772,000
-----------
31,441,707
-----------
17
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GROWTH & INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
===========================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- -----------------------------------------------------------
REAL ESTATE (0.0%)
Security Capital Group--
Warrants* ...................... 2,513 $ 13,193
------------
UTILITY--ELECTRIC (2.1%)
AES Corp.* ...................... 18,200 848,575
CMS Energy Corp. ................ 53,000 2,335,312
FPL Group, Inc. ................. 86,000 5,090,125
NIPSCO Industries, Inc. ......... 56,000 2,768,500
Pinnacle West Capital Corp. .... 36,000 1,525,500
------------
12,568,012
------------
UTILITY--TELEPHONE (1.8%)
AT&T Corp. ...................... 85,300 5,224,625
Teleport Communications Group,
Inc. (Class A)* ................ 99,700 5,471,038
------------
10,695,663
------------
TOTAL CREDIT SENSITIVE (20.6%) 121,211,405
------------
ENERGY
OIL--DOMESTIC (4.7%)
Apache Corp. .................... 210,000 7,363,125
Enron Oil & Gas Co. ............. 130,000 2,754,375
Murphy Oil Corp. ................ 91,000 4,931,063
USX-Marathon Group .............. 325,000 10,968,750
Union Pacific Resources Group,
Inc. ........................... 68,800 1,668,400
------------
27,685,713
------------
OIL--INTERNATIONAL (4.0%)
Gulf Canada Resources Ltd.* .... 345,000 2,415,000
Mobil Corp. ..................... 88,600 6,395,813
Texaco, Inc. .................... 270,400 14,703,000
------------
23,513,813
------------
OIL--SUPPLIES & CONSTRUCTION (1.2%)
Dresser Industries, Inc. ........ 125,000 5,242,187
Transocean Offshore, Inc. ...... 41,800 2,014,238
------------
7,256,425
------------
RAILROADS (0.2%)
Canadian Pacific Ltd. ........... 39,000 1,062,750
------------
TOTAL ENERGY (10.1%) ........... 59,518,701
------------
TECHNOLOGY
ELECTRONICS (3.8%)
Altera Corp.* ................... 34,800 1,152,750
Atmel Corp.* .................... 319,000 5,921,437
Cisco Systems, Inc.* ............ 144,750 8,069,812
Solectron Corp.* ................ 49,200 2,044,875
Xilinx, Inc.* ................... 145,000 5,084,063
------------
22,272,937
------------
OFFICE EQUIPMENT (1.1%)
Compaq Computer Corp. ........... 42,250 2,384,484
Hewlett-Packard Co. ............. 71,000 4,437,500
------------
6,821,984
------------
OFFICE EQUIPMENT SERVICES (3.4%)
Electronic Data Systems Corp. .. 139,200 6,116,100
First Data Corp. ................ 467,000 13,659,750
------------
19,775,850
------------
TELECOMMUNICATIONS (3.1%)
Intermedia Communications,
Inc.* .......................... 370 22,478
MCI Communications Corp. ........ 330,000 14,128,125
Scientific Atlanta, Inc. ........ 80,000 $ 1,340,000
WorldCom, Inc.* ................. 89,900 2,719,475
------------
18,210,078
------------
TOTAL TECHNOLOGY (11.4%)........ 67,080,849
------------
DIVERSIFIED
MISCELLANEOUS (2.9%)
Tyco International Ltd. ......... 195,200 8,796,200
U.S. Industries, Inc. ........... 87,000 2,620,875
Viad Corp. ...................... 130,000 2,510,625
Whitman Corp. ................... 109,000 2,840,813
------------
TOTAL DIVERSIFIED (2.9%)........ 16,768,513
------------
TOTAL COMMON STOCKS AND OTHER
INVESTMENTS (84.2%)
(Cost $428,916,307) ............ 494,642,997
------------
PREFERRED STOCKS:
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (0.2%)
Republic Industries, Inc.
6.5% Exch. Conv. ............... 51,500 1,210,250
------------
TRUCKING, SHIPPING (0.2%)
CNF Trust I
5.0% Conv. Series A ............ 20,500 1,168,500
------------
TOTAL BUSINESS SERVICES (0.4%) 2,378,750
------------
CAPITAL GOODS (0.4%)
AEROSPACE
Loral Space & Communications
6.0% Conv. ..................... 39,200 2,410,800
------------
CONSUMER CYCLICALS (0.3%)
AIRLINES
Continental Airlines Finance
Trust 8.5% Conv. ............... 19,600 2,016,350
------------
CREDIT SENSITIVE (0.3%)
UTILITY--ELECTRIC
AES Trust I
5.375% Conv. Series A .......... 25,200 1,808,100
------------
ENERGY (0.2%)
OIL--DOMESTIC
Devon Financing Trust
$3.25 Conv. .................... 12,500 915,625
------------
TECHNOLOGY
TELECOMMUNICATIONS (1.8%)
Intermedia Communications, Inc.:
7.0% Conv.+..................... 29,400 1,205,400
7.0% Conv. Series D ............ 26,400 1,082,400
Mobile Telecommunications
$2.25 Conv. .................... 30,850 1,033,475
Nextel Strypes Trust
7.25% Conv. .................... 55,700 1,322,875
QualComm Financial Trust:
5.75% Conv. .................... 18,300 856,669
5.75% Conv.+ ................... 28,800 1,348,200
WorldCom, Inc.
8.0% Conv. ..................... 33,200 3,481,850
-------------
TOTAL TECHNOLOGY (1.8%) ........ 10,330,869
-------------
TOTAL PREFERRED STOCKS (3.4%)
(Cost $18,227,795) ............. 19,860,494
-------------
</TABLE>
18
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GROWTH & INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
<TABLE>
<CAPTION>
===========================================================
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- -----------------------------------------------------------
<S> <C> <C>
LONG-TERM DEBT SECURITIES:
BUSINESS SERVICES
PROFESSIONAL SERVICES (0.4%)
Career Horizons, Inc.
7.0% Conv., 11/01/02........... $ 835,000 $1,736,800
Personnel Group of America:
5.75% Conv., 07/01/04 ......... 120,000 136,200
5.75% Conv., 07/01/04+ ........ 375,000 425,625
----------
TOTAL BUSINESS SERVICES (0.4%) 2,298,625
----------
CAPITAL GOODS
AEROSPACE (0.2%)
Orbital Sciences Corp.
5.0% Conv., 10/01/02+.......... 660,000 843,150
----------
BUILDING & CONSTRUCTION (0.1%)
Halter Marine Group, Inc.
4.5% Conv., 09/15/04+.......... 710,000 797,862
----------
MACHINERY (0.3%)
DII Group, Inc.
6.0% Conv., 10/15/02+.......... 1,100,000 1,681,625
----------
TOTAL CAPITAL GOODS (0.6%) ... 3,322,637
----------
CONSUMER CYCLICALS
FOOD SERVICES, LODGING (0.5%)
Cendant Corp.
4.75% Conv., 03/01/03.......... 2,265,000 3,046,425
----------
RETAIL--GENERAL (0.3%)
U.S. Office Products Co.
5.5% Conv., 02/01/01 .......... 1,530,000 1,818,787
----------
TOTAL CONSUMER CYCLICALS (0.8%) 4,865,212
----------
CONSUMER NONCYCLICALS
DRUGS (0.7%)
MedImmune, Inc.:
7.0% Conv. Sub. Note,
07/01/03+...................... 380,000 864,025
7.0% Conv., 07/01/03........... 920,000 2,091,850
Quintiles Transnational Corp.:
4.25% Conv., 05/31/00+ ........ 580,000 651,775
4.25% Conv., 05/31/00 ......... 475,000 533,781
----------
4,141,431
----------
HOSPITAL SUPPLIES & SERVICES (0.5%)
FPA Medical Management, Inc.:
6.5% Conv., 12/15/01 .......... 1,060,000 1,081,200
6.5% Conv., 12/15/01+ ......... 465,000 474,300
RES-Care, Inc.
6.0% Conv., 12/01/04+ ......... 1,150,000 1,311,000
----------
2,866,500
----------
TOTAL CONSUMER NONCYCLICALS (1.2%) 7,007,931
----------
CREDIT SENSITIVE
FINANCIAL SERVICES (0.3%)
RAC Financial Group, Inc.:
7.25% Conv. Sub. Note,
08/15/03+ ..................... 365,000 879,650
7.25% Conv., 08/15/03 ......... 480,000 1,156,800
----------
2,036,450
----------
INSURANCE (0.3%)
Penn Treaty American Corp.:
6.25% Conv., 12/01/03 ......... $ 535,000 $ 689,481
6.25% Conv., 12/01/03+ ........ 660,000 850,575
----------
1,540,056
----------
TOTAL CREDIT SENSITIVE (0.6%) 3,576,506
----------
ENERGY
COAL & GAS PIPELINES (0.3%)
Nabors Industries, Inc.
5.0% Conv., 05/15/06 .......... 1,110,000 2,009,100
----------
OIL--SUPPLIES & CONSTRUCTION (0.6%)
Diamond Offshore Drilling, Inc.
3.75% Conv. Sub. Note,
02/15/07....................... 1,120,000 1,482,600
Parker Drilling Co.
5.5% Conv. Sub. Note,
08/01/04 ...................... 1,035,000 1,076,400
Seacor Holdings, Inc.:
5.375% Conv., 11/15/06+ ....... 485,000 549,263
5.375% Conv., 11/15/06 ........ 345,000 390,713
----------
3,498,976
----------
TOTAL ENERGY (0.9%) ........... 5,508,076
----------
TECHNOLOGY
ELECTRONICS (4.0%)
Altera Corp.
5.75% Conv. Sub. Note,
06/15/02+...................... 1,680,000 2,305,800
Baan Co.:
4.5% Conv. Sub. Note,
12/15/01+...................... 845,000 1,294,962
4.5% Conv. Sub. Note,
12/15/01 ...................... 335,000 513,387
Cymer, Inc.
3.5% Conv., 08/06/04+(a) ..... 1,475,000 1,115,469
Integrated Process Equipment
6.25% Conv., 09/15/04+ ........ 2,195,000 1,819,106
Level One Communications
4.0% Conv., 09/01/04+ ......... 1,630,000 1,532,200
Photronics, Inc.
6.0% Conv., 06/01/04 .......... 2,055,000 2,355,544
Quantum Corp.
5.0% Conv., 03/01/03+ ......... 385,000 698,775
Sanmina Corp.
5.5% Conv., 08/15/02+ ......... 1,410,000 3,417,488
SCI Systems, Inc.
5.0% Conv., 05/01/06 .......... 1,795,000 3,343,188
Solectron Corp.
6.0% Conv., 03/01/06+ ......... 1,185,000 1,624,931
Wind River Systems, Inc.
5.0% Conv., 08/01/02+ ......... 1,420,000 1,519,400
Xilinx, Inc.
5.25% Conv., 11/01/02+ ........ 1,925,000 1,862,438
----------
23,402,688
----------
19
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GROWTH & INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1997
===========================================================
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- -----------------------------------------------------------
TELECOMMUNICATIONS (0.3%)
Comverse Technology, Inc.:
5.75% Conv., 10/01/06 ......... $ 665,000 $ 716,537
5.75% Conv. Sub. Note,
10/01/06+...................... 1,200,000 1,293,000
------------
2,009,537
------------
TOTAL TECHNOLOGY (4.3%) ...... 25,412,225
------------
TOTAL LONG-TERM DEBT SECURITIES (8.8%)
(Amortized Cost $46,485,364) .. 51,991,212
------------
SHORT-TERM DEBT SECURITIES:
U.S. GOVERNMENT AGENCIES (3.0%)
Federal Home Loan Mortgage
Corp.
6.0%, due 01/02/98............. 17,600,000 17,597,067
------------
TOTAL SHORT-TERM DEBT SECURITIES (3.0%)
(Amortized Cost $17,597,067) 17,597,067
------------
TOTAL INVESTMENTS (99.4%)
(Cost/Amortized Cost
$511,226,533) ................. 584,091,770
OTHER ASSETS
LESS LIABILITIES (0.6%) ...... 3,664,123
------------
NET ASSETS (100.0%) ............ $587,755,893
============
</TABLE>
- ------------
* Non-income producing.
+ Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may only be resold to qualified institutional
buyers. At December 31, 1997, these securities amounted to $30,366,019
or 5.2% of net assets.
(a) Coupon will increase periodically based upon a predetermined schedule.
Stated interest rate in effect at December 31, 1997.
Glossary:
ADR--American Depository Receipt
See Notes to Financial Statements.
20
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE EQUITY INDEX PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
=============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS:
BASIC MATERIALS
CHEMICALS (2.2%)
Air Products & Chemicals, Inc. ... 13,300 $ 1,093,925
Avery Dennison Corp. .............. 12,200 545,950
Dow Chemical Co. .................. 28,300 2,872,450
Dupont (E.I.) de Nemours & Co. .... 140,600 8,444,787
Eastman Chemical Co. .............. 8,800 524,150
Ecolab, Inc. ...................... 8,900 493,394
FMC Corp.* ........................ 7,100 477,919
Goodrich (B.F.) Co. ............... 10,500 435,094
Grace (W.R.) & Co. ................ 8,800 707,850
Hercules, Inc. .................... 12,000 600,750
Millipore Corp. ................... 11,900 403,856
Monsanto Co. ...................... 73,300 3,078,600
Rohm & Haas Co. ................... 7,700 737,275
Union Carbide Corp. ............... 15,000 644,063
-----------
21,060,063
-----------
CHEMICALS--SPECIALTY (0.5%)
Great Lakes Chemical Corp. ........ 10,100 453,237
Morton International, Inc. ........ 15,700 539,688
Praxair, Inc. ..................... 19,600 882,000
Raychem Corp. ..................... 10,200 439,238
Sigma-Aldrich Corp. ............... 11,900 473,025
Southern Co. ...................... 85,000 2,199,375
-----------
4,986,563
-----------
METALS & MINING (0.7%)
Alcan Aluminium Ltd. .............. 13,400 370,175
Alcan Aluminium Ltd. (Canada) ..... 14,800 407,933
Aluminum Co. of America ........... 21,600 1,520,100
Barrick Gold Corp. ................ 52,900 985,263
Engelhard Corp. ................... 25,650 445,669
Freeport-McMoRan Copper & Gold,
Inc. (Class B) ................... 30,000 472,500
Inco Ltd. ......................... 26,000 442,000
Newmont Mining Corp. .............. 19,407 570,081
Phelps Dodge Corp. ................ 7,500 466,875
Placer Dome, Inc. ................. 47,800 606,463
Reynolds Metals Co. ............... 8,500 510,000
-----------
6,797,059
-----------
PAPER (1.0%)
Champion International Corp. ..... 11,400 516,562
Fort James Corp. .................. 22,500 860,625
Georgia Pacific Group ............. 11,100 674,325
International Paper Co. ........... 36,025 1,553,578
Kimberly Clark Corp. .............. 67,244 3,315,970
Mead Corp. ........................ 16,200 453,600
Stone Container Corp.* ............ 30,200 315,213
Temple Inland, Inc. ............... 7,700 402,806
Union Camp Corp. .................. 8,400 450,975
Westvaco Corp. .................... 14,800 465,275
Willamette Industries, Inc. ...... 13,400 431,313
-----------
9,440,242
-----------
STEEL (0.2%)
Allegheny Teledyne, Inc. .......... 20,200 522,675
Nucor Corp. ....................... 9,800 473,463
Worthington Industries, Inc. ..... 21,500 354,750
-----------
1,350,888
-----------
TOTAL BASIC MATERIALS (4.6%) .... 43,634,815
-----------
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (0.4%)
Browning-Ferris Industries, Inc. . 24,300 $ 899,100
Johnson Controls, Inc. ............ 9,600 458,400
Thermo Electron Corp.* ............ 17,600 783,200
Waste Management, Inc. ............ 55,600 1,529,000
-----------
3,669,700
-----------
PRINTING, PUBLISHING &
BROADCASTING (2.2%)
CBS Corp. ......................... 2,100 61,819
Clear Channel Communications,
Inc.* ............................ 12,000 953,250
Comcast Corp. (Class A) SPL ...... 41,800 1,319,313
Deluxe Corp. ...................... 13,200 455,400
Donnelley (R.R.) & Sons Co. ...... 18,000 670,500
Dow Jones & Co., Inc. ............. 11,800 633,512
Dun & Bradstreet Corp. ............ 20,200 624,937
Gannett Co. ....................... 34,800 2,151,075
King World Productions, Inc. ..... 7,900 456,225
Knight-Ridder, Inc. ............... 10,700 556,400
McGraw-Hill Companies, Inc. ...... 12,100 895,400
New York Times Co. (Class A) ..... 11,300 747,213
Tele-Communications, Inc. (Series
A)* .............................. 62,128 1,735,701
Time Warner, Inc. ................. 68,700 4,259,400
Times Mirror Co. (Class A) ........ 11,300 694,950
Tribune Co. ....................... 14,700 915,075
U.S. West Media Group* ............ 74,500 2,151,188
Viacom, Inc. (Class A)* ........... 1,000 40,875
Viacom, Inc. (Class B)* ........... 42,300 1,752,806
-----------
21,075,039
-----------
PROFESSIONAL SERVICES (0.5%)
Block (H&R), Inc. ................. 12,800 573,600
Cognizant Corp. ................... 19,500 868,969
Interpublic Group Cos., Inc. ..... 14,800 737,225
Omnicom Group ..................... 19,600 830,550
Safety-Kleen Corp. ................ 15,600 428,025
Service Corp. International ...... 29,600 1,093,374
-----------
4,531,743
-----------
TRUCKING, SHIPPING (0.2%)
Federal Express Corp.* ............ 13,500 824,344
Laidlaw, Inc. ..................... 35,200 479,600
Ryder System, Inc. ................ 12,900 422,475
-----------
1,726,419
-----------
TOTAL BUSINESS SERVICES (3.3%) ... 31,002,901
-----------
CAPITAL GOODS
AEROSPACE (1.5%)
Boeing Co. ........................ 122,274 5,983,784
General Dynamics Corp. ............ 7,400 639,637
Lockheed Martin Corp. ............. 23,704 2,334,844
Northrop Grumman Corp. ............ 7,800 897,000
Raytheon Co. (Class A) ............ 32 1,578
Raytheon Co. (Class B) ............ 41,700 2,105,850
Rockwell International Corp. ..... 24,800 1,295,800
TRW, Inc. ......................... 14,400 768,600
-----------
14,027,093
-----------
21
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE EQUITY INDEX PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
=============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------------------------------------
BUILDING MATERIALS & FOREST
PRODUCTS (0.6%)
Armstrong World Industries, Inc. .. 6,100 $ 455,975
Crane Co. ......................... 10,600 459,775
Louisiana Pacific Corp. ........... 22,800 433,200
Masco Corp. ....................... 19,400 986,975
Owens Corning ..................... 11,300 385,613
PPG Industries, Inc. .............. 21,700 1,239,613
Sherwin Williams Co. .............. 18,600 516,150
Weyerhaeuser Co. .................. 23,700 1,162,781
-----------
5,640,082
-----------
ELECTRICAL EQUIPMENT (3.8%)
Emerson Electric Co. .............. 54,700 3,087,131
General Electric Co. .............. 401,200 29,438,050
Grainger (W.W.), Inc. ............. 6,100 592,844
Thomas & Betts Corp. .............. 9,600 453,600
Westinghouse Electric Corp. ...... 84,900 2,499,244
-----------
36,070,869
-----------
MACHINERY (1.7%)
Allied Signal, Inc. ............... 69,800 2,717,837
Case Corp. ........................ 9,200 556,025
Caterpillar, Inc. ................. 46,400 2,253,300
Cooper Industries, Inc. ........... 14,700 720,300
Cummins Engine Company, Inc. ..... 7,000 413,438
Deere & Co. ....................... 31,100 1,813,519
Dover Corp. ....................... 26,800 968,150
Fluor Corp. ....................... 10,900 407,387
Harnischfeger Industries, Inc. ... 13,000 459,062
Illinois Tool Works, Inc. ......... 30,700 1,845,837
Ingersoll Rand Co. ................ 19,950 807,975
Pall Corp. ........................ 20,500 424,094
Parker-Hannifin Corp. ............. 13,150 603,256
United Technologies Corp. ......... 28,700 2,089,719
-----------
16,079,899
-----------
TOTAL CAPITAL GOODS (7.6%) ...... 71,817,943
-----------
CONSUMER CYCLICALS
AIRLINES (0.4%)
AMR Corp.* ........................ 11,300 1,452,050
Delta Air Lines, Inc. ............. 8,600 1,023,400
Southwest Airlines Co. ............ 25,050 616,856
US Airways Group, Inc.* ........... 11,000 687,500
-----------
3,779,806
-----------
APPAREL, TEXTILE (0.4%)
Fruit of the Loom, Inc. (Class A)* 18,900 484,312
Liz Claiborne, Inc. ............... 10,000 418,125
National Service Industries, Inc. 9,000 446,063
Nike, Inc. (Class B) .............. 37,800 1,483,650
VF Corp. .......................... 16,500 757,969
-----------
3,590,119
-----------
AUTO RELATED (0.5%)
Cooper Tire & Rubber Co. .......... 16,600 404,625
Dana Corp. ........................ 12,400 589,000
Eaton Corp. ....................... 8,600 767,550
Echlin, Inc. ...................... 14,100 510,244
Genuine Parts Co. ................. 19,700 668,569
Goodyear Tire & Rubber Co. ........ 16,700 1,062,537
Snap-On, Inc. ..................... 10,150 442,794
-----------
4,445,319
-----------
AUTOS & TRUCKS (1.7%)
AutoZone, Inc.* ................... 17,800 $ 516,200
Chrysler Corp. .................... 82,500 2,902,969
Ford Motor Co. .................... 146,100 7,113,244
General Motors Corp. .............. 89,200 5,407,750
Paccar, Inc. ...................... 10,400 546,000
-----------
16,486,163
-----------
<PAGE>
FOOD SERVICES, LODGING (0.8%)
Harrah's Entertainment, Inc.* .... 25,200 475,650
ITT Corp.* ........................ 13,300 1,102,237
Marriott International, Inc. ..... 14,900 1,031,825
McDonald's Corp. .................. 85,100 4,063,525
Tricon Global Restaurants, Inc.* .. 17,020 494,644
Wendy's International, Inc. ...... 21,500 517,344
-----------
7,685,225
-----------
HOUSEHOLD FURNITURE,
APPLIANCES (0.3%)
Black & Decker Corp. .............. 12,400 484,375
Maytag Corp. ...................... 13,400 499,987
Newell Company .................... 20,500 871,250
Rubbermaid, Inc. .................. 16,600 415,000
Stanley Works ..................... 9,200 434,125
Whirlpool Corp. ................... 8,500 467,500
-----------
3,172,237
-----------
LEISURE RELATED (1.7%)
American Greetings Corp.
(Class A) ........................ 12,300 481,237
Brunswick Corp. ................... 17,100 518,344
Cendant Corp.* .................... 97,551 3,353,307
Disney (Walt) Co. ................. 82,400 8,162,750
Hasbro, Inc. ...................... 15,200 478,800
Hilton Hotels Corp. ............... 30,000 892,500
Mattel, Inc. ...................... 34,843 1,297,902
Mirage Resorts, Inc.* ............. 21,200 482,300
-----------
15,667,140
-----------
PHOTO & OPTICAL (0.3%)
Allergan, Inc. .................... 13,900 466,519
Eastman Kodak Company ............. 35,800 2,177,087
Polaroid Corp. .................... 9,900 482,006
-----------
3,125,612
-----------
RETAIL--GENERAL (4.1%)
Circuit City Stores-Circuit City
Group ............................ 14,000 497,875
Costco Cos., Inc.* ................ 26,300 1,173,637
CVS Corp. ......................... 21,300 1,364,531
Dayton Hudson Corp. ............... 27,000 1,822,500
Dillard's, Inc. (Class A) ......... 13,500 475,875
Federated Department Stores, Inc.* 25,900 1,115,319
Gap, Inc. ......................... 49,800 1,764,787
Harcourt General, Inc. ............ 7,800 427,050
Home Depot, Inc. .................. 90,400 5,322,300
K-Mart Corp.* ..................... 60,300 697,219
Limited, Inc. ..................... 32,800 836,400
Lowe's Cos., Inc. ................. 21,500 1,025,281
May Department Stores Co. ......... 28,800 1,517,400
Nordstrom, Inc. ................... 9,300 561,488
Penney (J.C.), Inc. ............... 30,800 1,857,625
Sears, Roebuck & Co. .............. 48,500 2,194,625
22
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE EQUITY INDEX PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
=============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------------------------------------
Tandy Corp. ....................... 13,000 $ 501,313
TJX Cos., Inc. .................... 19,700 677,188
Toys R Us, Inc.* .................. 35,300 1,109,744
Walgreen Co. ...................... 61,000 1,913,875
Wal-Mart Stores, Inc. ............. 280,500 11,062,219
Woolworth Corp.* .................. 22,100 450,288
-----------
38,368,539
-----------
TOTAL CONSUMER CYCLICALS (10.2%) 96,320,160
-----------
CONSUMER NONCYCLICALS
BEVERAGES (3.4%)
Anheuser Busch Companies, Inc. .... 61,100 2,688,400
Brown Forman Corp. (Class B) ..... 7,600 419,900
Coca-Cola Co. ..................... 303,900 20,247,337
Pepsico, Inc. ..................... 188,700 6,875,756
Seagram Ltd. ...................... 47,300 1,528,381
-----------
31,759,774
-----------
CONTAINERS (0.2%)
Bemis, Inc. ....................... 11,100 489,094
Crown Cork & Seal Co., Inc. ...... 12,900 646,612
Owens-Illinois, Inc.* ............. 14,600 553,888
-----------
1,689,594
-----------
DRUGS (7.3%)
ALZA Corp.* ....................... 16,900 537,631
American Home Products Corp. ..... 80,100 6,127,650
Amgen, Inc.* ...................... 32,800 1,775,300
Bristol-Meyers Squibb Co. ......... 123,200 11,657,800
Lilly (Eli) & Co. ................. 137,500 9,573,437
Merck & Co., Inc. ................. 148,500 15,778,125
Pfizer, Inc. ...................... 158,900 11,847,981
Pharmacia & Upjohn, Inc. .......... 62,690 2,296,021
Schering Plough Corp. ............. 90,100 5,597,463
Warner-Lambert Co. ................ 33,400 4,141,600
-----------
69,333,008
-----------
FOODS (2.6%)
Archer Daniels Midland Co. ........ 67,262 1,458,745
Campbell Soup Co. ................. 56,700 3,295,687
ConAgra, Inc. ..................... 58,300 1,912,969
CPC International, Inc. ........... 17,700 1,911,600
General Mills, Inc. ............... 19,700 1,411,012
Heinz (H.J.) Co. .................. 45,550 2,314,509
Hershey Foods Corp. ............... 17,200 1,065,325
Kellogg Co. ....................... 50,900 2,525,912
Pioneer Hi Bred International,
Inc. ............................. 8,100 868,725
Quaker Oats Co. ................... 16,900 891,475
Ralston-Ralston Purina Group ..... 12,800 1,189,600
Rite Aid Corp. .................... 15,200 892,050
Sara Lee Corp. .................... 59,200 3,333,700
Wrigley (Wm.), Jr. Co. ............ 14,300 1,137,744
-----------
24,209,053
-----------
HOSPITAL SUPPLIES & SERVICES (3.6%)
Abbott Laboratories ............... 95,100 6,234,994
Baxter International, Inc. ........ 34,500 1,740,094
Becton, Dickinson & Co. ........... 14,400 720,000
Biomet, Inc. ...................... 19,100 489,437
Boston Scientific Corp.* .......... 23,300 1,068,887
Cardinal Health, Inc. ............. 13,400 1,006,675
Columbia/HCA Healthcare Corp. ..... 80,800 2,393,700
Guidant Corp. ..................... 17,800 1,108,050
Healthsouth Corp.* ................ 47,900 $ 1,329,225
Humana, Inc.* ..................... 20,200 419,150
Johnson and Johnson ............... 164,400 10,829,850
Mallinckrodt, Inc. ................ 11,900 452,200
Medtronic, Inc. ................... 57,800 3,023,663
Saint Jude Medical, Inc.* ......... 17,150 523,075
Tenet Healthcare Corp.* ........... 36,400 1,205,750
United Healthcare Corp. ........... 23,200 1,152,750
-----------
33,697,500
-----------
RETAIL--FOOD (0.6%)
Albertsons, Inc. .................. 30,400 1,440,200
American Stores Co. ............... 33,700 692,956
Giant Food, Inc. (Class A) ........ 13,900 468,256
Kroger Co.* ....................... 31,500 1,163,531
Supervalu, Inc. ................... 11,000 460,625
Sysco Corp. ....................... 21,500 979,594
Winn Dixie Stores, Inc. ........... 18,400 803,850
-----------
6,009,012
-----------
SOAPS & TOILETRIES (3.2%)
Avon Products, Inc. ............... 15,700 963,587
Clorox Co. ........................ 12,500 988,281
Colgate Palmolive Co. ............. 36,800 2,704,800
Gillette Co. ...................... 69,600 6,990,450
International Flavors &
Fragrances, Inc. ................. 13,000 669,500
Procter & Gamble Co. .............. 167,900 13,400,519
Unilever N.V. ..................... 79,600 4,970,025
-----------
30,687,162
-----------
TOBACCO (1.8%)
Fortune Brands, Inc. .............. 19,600 726,425
Loews Corp. ....................... 13,500 1,432,687
Philip Morris Cos., Inc. .......... 299,100 13,552,969
UST, Inc. ......................... 22,700 838,481
-----------
16,550,562
-----------
TOTAL CONSUMER NONCYCLICALS (22.7%) 213,935,665
-----------
CREDIT SENSITIVE
BANKS (8.3%)
Ahmanson (H.F.) & Co. ............. 12,000 803,250
Banc One Corp. .................... 71,900 3,905,069
Bank of New York Co., Inc. ........ 46,800 2,705,625
BankAmerica Corp. ................. 86,100 6,285,300
BankBoston Corp. .................. 18,000 1,690,875
Bankers Trust New York Corp. ..... 12,300 1,382,981
Barnett Banks, Inc. ............... 24,500 1,760,937
Chase Manhattan Corp. ............. 52,240 5,720,280
Citicorp .......................... 56,500 7,143,719
Comerica, Inc. .................... 13,000 1,173,250
CoreStates Financial Corp. ........ 25,000 2,001,562
Fifth Third Bancorp ............... 19,000 1,553,250
First Chicago NBD Corp. ........... 36,449 3,043,491
First Union Corp. ................. 77,000 3,946,250
Golden West Financial Corp. ...... 6,800 665,125
Huntington Bancshares, Inc. ...... 22,900 824,400
KeyCorp. .......................... 26,800 1,897,775
Mellon Bank Corp. ................. 31,000 1,879,375
Morgan (J.P.) & Co., Inc. ......... 22,100 2,494,538
National City Corp. ............... 26,400 1,735,800
NationsBank Corp. ................. 87,399 5,314,952
Norwest Corp. ..................... 92,000 3,553,500
23
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE EQUITY INDEX PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
=============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------------------------------------
PNC Bank Corp. .................... 37,700 $ 2,151,256
Republic New York Corp. ........... 6,400 730,800
State Street Corp. ................ 19,200 1,117,200
Suntrust Banks, Inc. .............. 26,200 1,870,025
U.S. Bancorp. ..................... 30,026 3,361,035
Wachovia Corp. .................... 25,000 2,028,125
Washington Mutual, Inc. ........... 30,800 1,965,425
Wells Fargo & Co. ................. 10,800 3,665,925
-----------
78,371,095
-----------
FINANCIAL SERVICES (2.5%)
American Express Co. .............. 57,700 5,149,725
Beneficial Corp. .................. 6,300 523,687
Country Wide Credit Industries,
Inc. ............................. 12,200 523,075
Equifax, Inc. ..................... 17,900 634,331
Fleet Financial Group, Inc. ...... 30,879 2,313,995
Green Tree Financial Corp. ........ 22,500 589,219
Household International, Inc. .... 13,100 1,671,069
MBIA, Inc. ........................ 11,000 734,937
MBNA Corp. ........................ 61,687 1,684,826
Merrill Lynch & Co., Inc. ......... 40,800 2,975,850
Morgan Stanley, Dean Witter,
Discover & Co. ................... 72,205 4,269,121
Schwab (Charles) Corp. ............ 31,850 1,335,709
Synovus Financial Corp. ........... 21,000 687,750
Transamerica Corp. ................ 7,600 809,400
-----------
23,902,694
-----------
INSURANCE (4.8%)
Aetna, Inc. ....................... 18,443 1,301,384
Allstate Corp. .................... 53,438 4,856,178
American General Corp. ............ 30,500 1,648,906
American International Group, Inc. 86,225 9,376,969
Aon Corp. ......................... 20,550 1,204,744
Chubb Corp. ....................... 21,200 1,603,250
CIGNA Corp. ....................... 9,100 1,574,869
Cincinnati Financial Corp. ........ 6,800 957,100
Conseco, Inc. ..................... 22,500 1,022,344
General Re Corp. .................. 9,800 2,077,600
Hartford Financial Services Group,
Inc. ............................. 14,500 1,356,656
Jefferson-Pilot Corp. ............. 8,700 677,512
Lincoln National Corp. Industries . 12,200 953,125
Marsh & McLennan Cos., Inc. ...... 20,700 1,543,444
MGIC Investment Corp. ............. 14,000 931,000
Progressive Corp. ................. 8,900 1,066,888
Providian Financial Corp. ......... 11,200 506,100
Safeco Corp. ...................... 17,100 833,625
Saint Paul Cos., Inc. ............. 10,300 845,244
SunAmerica, Inc. .................. 24,000 1,026,000
Torchmark Corp. ................... 17,000 715,063
Travelers Group, Inc. ............. 140,857 7,588,671
UNUM Corp. ........................ 16,700 908,063
USF&G Corp. ....................... 21,800 480,963
-----------
45,055,698
-----------
MORTGAGE RELATED (1.2%)
Federal National Mortgage
Association ...................... 130,600 7,452,362
Federal Home Loan Mortgage Corp. . 85,500 3,585,656
-----------
11,038,018
-----------
UTILITY--ELECTRIC (2.4%)
American Electric Power, Inc. .... 23,500 $ 1,213,187
Baltimore Gas & Electric Co. ..... 18,300 623,344
Carolina Power & Light Co. ........ 18,300 776,606
Central & South West Corp. ........ 25,600 692,800
CINergy Corp. ..................... 19,613 751,423
Consolidated Edison, Inc. ......... 29,200 1,197,200
Dominion Resources, Inc. .......... 23,100 983,194
DTE Energy Co. .................... 17,500 607,031
Duke Energy Co. ................... 44,630 2,471,386
Edison International .............. 49,300 1,340,344
Entergy Corp. ..................... 30,000 898,125
FirstEnergy Corp.* ................ 28,600 829,400
FPL Group, Inc. ................... 22,600 1,337,637
GPU, Inc. ......................... 15,000 631,875
Houston Industries, Inc. .......... 35,400 944,737
Northern States Power Co. ......... 8,300 483,475
Pacificorp. ....................... 36,800 1,005,100
Peco Energy Co. ................... 26,900 652,325
PG&E Corp. ........................ 54,400 1,655,800
PP&L Resources, Inc. .............. 20,000 478,750
Public Service Enterprise Group .. 28,800 912,600
Texas Utilities Co. ............... 29,900 1,242,719
Unicom Corporation ................ 26,900 827,175
Union Electric Co. ................ 12,700 549,275
-----------
23,105,508
-----------
UTILITY--GAS (0.4%)
Columbia Gas System, Inc. ......... 6,900 542,081
Consolidated Natural Gas Co. ..... 11,500 695,750
ENRON Corp. ....................... 38,000 1,579,375
Nicor, Inc. ....................... 11,800 497,813
-----------
3,315,019
-----------
UTILITY--TELEPHONE (5.8%)
Alltel Corp. ...................... 22,500 923,906
Ameritech Corp. ................... 67,900 5,465,950
AT&T Corp. ........................ 200,500 12,280,625
Bell Atlantic Corp. ............... 95,696 8,708,336
BellSouth Corp. ................... 122,300 6,887,019
Frontier Corp. .................... 18,500 445,156
GTE Corp. ......................... 117,900 6,160,275
SBC Communications, Inc. .......... 112,773 8,260,622
Sprint Corp. ...................... 53,100 3,112,988
U.S. West Communications Group* .. 57,500 2,594,688
-----------
54,839,565
-----------
TOTAL CREDIT SENSITIVE (25.4%) 239,627,597
-----------
ENERGY
COAL & GAS PIPELINES (0.5%)
Burlington Resources, Inc. ........ 21,830 978,257
Coastal Corp. ..................... 12,800 792,800
Pacific Enterprises ............... 13,000 489,125
Sonat, Inc. ....................... 10,600 484,950
Tenneco, Inc. ..................... 20,300 801,850
Williams Cos., Inc. ............... 39,500 1,120,813
-----------
4,667,795
-----------
OIL--DOMESTIC (1.9%)
Amerada Hess Corp. ................ 10,900 598,137
Amoco Corp. ....................... 60,400 5,141,550
24
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE EQUITY INDEX PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
=============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------------------------------------
Anadarko Petroleum Corp. .......... 7,600 $ 461,225
Apache Corp. ...................... 12,200 427,762
Ashland, Inc. ..................... 8,300 445,606
Atlantic Richfield Co. ............ 39,400 3,156,925
Kerr McGee Corp. .................. 7,200 455,850
Occidental Petroleum Corp. ........ 39,000 1,143,188
Oryx Energy Co.* .................. 16,900 430,950
Pennzoil Co. ...................... 6,500 434,281
Phillips Petroleum Co. ............ 31,800 1,546,275
Sun Co., Inc. ..................... 11,500 483,719
Union Pacific Resources Group,
Inc. ............................. 30,608 742,244
Unocal Corp. ...................... 29,800 1,156,613
USX-Marathon Group ................ 34,700 1,171,125
USX-U.S. Steel Group .............. 13,500 421,875
-----------
18,217,325
-----------
OIL--INTERNATIONAL (5.3%)
Chevron Corp. ..................... 81,100 6,244,700
Exxon Corp. ....................... 304,700 18,643,831
Mobil Corp. ....................... 97,400 7,031,063
Royal Dutch Petroleum Co. (ADR) .. 265,600 14,392,200
Texaco, Inc. ...................... 63,700 3,463,688
-----------
49,775,482
-----------
OIL--SUPPLIES & CONSTRUCTION (1.0%)
Baker Hughes, Inc. ................ 20,500 894,312
Dresser Industries, Inc. .......... 20,900 876,494
Halliburton Co. ................... 29,800 1,547,737
Helmerich & Payne, Inc. ........... 7,000 475,125
Schlumberger Ltd. ................. 61,300 4,934,650
Western Atlas, Inc.* .............. 6,400 473,600
-----------
9,201,918
-----------
RAILROADS (0.7%)
Burlington Northern Santa Fe ..... 18,651 1,733,377
CSX Corp. ......................... 26,900 1,452,600
Norfolk Southern Corp. ............ 46,500 1,432,781
Union Pacific Corp. ............... 29,700 1,854,394
-----------
6,473,152
-----------
TOTAL ENERGY (9.4%)............... 88,335,672
-----------
TECHNOLOGY
ELECTRONICS (4.2%)
Advanced Micro Devices, Inc.* .... 25,100 450,231
AMP, Inc. ......................... 27,100 1,138,200
Applied Materials, Inc.* .......... 44,900 1,352,613
BB&T Corp. ........................ 17,100 1,095,469
Cisco Systems, Inc.* .............. 123,150 6,865,612
EMC Corp.* ........................ 60,800 1,668,200
Harris Corp. ...................... 10,300 472,512
Intel Corp. ....................... 201,300 14,141,325
ITT Industries, Inc. .............. 14,500 454,938
KLA-Tencor Corp.* ................. 13,400 517,575
LSI Logic Corp.* .................. 23,500 464,125
Micron Technology, Inc.* .......... 24,700 642,200
Motorola, Inc. .................... 73,400 4,188,388
National Semiconductor Corp.* .... 19,300 500,594
Parametric Technology Corp.* ..... 15,000 710,625
Perkin-Elmer Corp. ................ 7,200 511,650
Seagate Technology, Inc.* ......... 28,700 552,475
Siebel Systems, Inc.* ............. 27 1,129
Texas Instruments, Inc. ........... 47,300 $ 2,128,500
3Com Corp.* ....................... 42,500 1,484,844
-----------
39,341,205
-----------
OFFICE EQUIPMENT (4.1%)
Bay Networks, Inc.* ............... 24,700 631,394
Ceridian Corp.* ................... 10,800 494,775
Compaq Computer Corp. ............. 93,235 5,261,950
Dell Computer Corp.* .............. 40,800 3,427,200
Digital Equipment Corp.* .......... 18,300 677,100
Hewlett-Packard Co. ............... 128,200 8,012,500
Honeywell, Inc. ................... 15,000 1,027,500
International Business Machines
Corp. ............................ 121,100 12,662,519
Pitney Bowes, Inc. ................ 17,800 1,600,888
Sun Microsystems, Inc.* ........... 45,500 1,814,313
Unisys Corp.* ..................... 36,100 500,888
Xerox Corp. ....................... 40,100 2,959,881
-----------
39,070,908
-----------
OFFICE EQUIPMENT SERVICES (3.4%)
Adobe Systems, Inc. ............... 12,700 523,875
Automatic Data Processing, Inc. .. 35,900 2,203,362
Computer Associates International,
Inc. ............................. 66,925 3,538,659
Computer Sciences Corp.* .......... 9,200 768,200
First Data Corp. .................. 54,400 1,591,200
HBO & Co. ......................... 23,500 1,128,000
Microsoft Corp.* .................. 146,800 18,973,900
Novell, Inc.* ..................... 59,600 447,000
Oracle Corp.* ..................... 120,787 2,695,060
Silicon Graphics, Inc.* ........... 34,500 429,094
-----------
32,298,350
-----------
TELECOMMUNICATIONS (2.3%)
AirTouch Communications, Inc.* .... 61,800 2,568,562
Andrew Corp.* ..................... 19,212 461,088
Cabletron Systems, Inc.* .......... 33,000 495,000
DSC Communications Corp.* ......... 19,800 475,200
Lucent Technologies, Inc. ......... 79,094 6,317,633
MCI Communications Corp. .......... 85,300 3,651,906
Northern Telecommunications Ltd. . 32,300 2,874,700
Tellabs, Inc.* .................... 22,300 1,179,113
WorldCom, Inc.* ................... 110,700 3,348,675
-----------
21,371,877
-----------
TOTAL TECHNOLOGY (14.0%).......... 132,082,340
-----------
DIVERSIFIED
MISCELLANEOUS (1.1%)
Corning, Inc. ..................... 29,800 1,106,325
Ikon Office Solutions, Inc. ...... 16,500 464,062
Minnesota Mining & Manufacturing
Co. .............................. 51,600 4,234,425
Textron, Inc. ..................... 19,600 1,225,000
Tyco International Ltd. ........... 65,686 2,959,975
Whitman Corp. ..................... 16,300 424,819
-----------
TOTAL DIVERSIFIED (1.1%) ......... 10,414,606
-----------
TOTAL COMMON STOCKS (98.3%)
(Cost $705,933,343) .............. 927,171,699
-----------
</TABLE>
25
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE EQUITY INDEX PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1997
<TABLE>
<CAPTION>
=========================================================
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- ---------------------------------------------------------
<S> <C> <C>
SHORT-TERM DEBT SECURITIES:
U.S. GOVERNMENT & AGENCIES
Federal Home Loan Mortgage
Corp.
6.0%, due 01/02/98 ......... $10,500,000 $ 10,498,250
U.S. Treasury
6.0%, due 01/08/98** ....... 900,000 886,153
------------
TOTAL U.S. GOVERNMENT & AGENCIES (1.2%) 11,384,403
------------
TOTAL SHORT-TERM DEBT SECURITIES (1.2%)
(Amortized Cost
$11,384,403)............... 11,384,403
------------
TOTAL INVESTMENTS (99.5%)
(Cost/Amortized Cost
$717,317,746) .............. 938,556,102
OTHER ASSETS
LESS LIABILITIES (0.5%) ... 5,184,922
------------
NET ASSETS (100.0%) ......... $943,741,024
============
</TABLE>
Financial Futures Contracts outstanding at December 31, 1997:
<TABLE>
<CAPTION>
EXPIRATION NUMBER ORIGINAL VALUE AT UNREALIZED
DESCRIPTION DATE OF CONTRACTS VALUE 12/31/97 APPRECIATION
- -------------------- ------------ -------------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
LONG S&P 500 INDEX* 3/98 46 $11,131,350 $11,259,650 $128,300
</TABLE>
- ------------
* Non-income producing.
** Security segregated as collateral on financial futures contracts.
Glossary:
ADR--American Depository Receipt
See Notes to Financial Statements.
26
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE COMMON STOCK PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
================================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- ----------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS:
BASIC MATERIALS (0.3%)
CHEMICALS
Monsanto Co. ..................... 725,000 $ 30,450,000
--------------
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (0.3%)
Waste Management, Inc. ........... 900,000 24,750,000
--------------
PRINTING, PUBLISHING &
BROADCASTING (5.1%)
CBS Corp. ........................ 595,000 17,515,313
Chris Craft Industries, Inc.
(Class B)*++ .................... 1,226,156 64,143,286
Comcast Corp. (Class A) SPL ..... 1,011,800 31,934,937
Liberty Media Group (Class A)* ... 2,600,963 94,284,909
TCI Group (Class A)* (a) ......... 5,309,026 150,311,799
Time Warner, Inc. ................ 178,900 11,091,800
U.S. West Media Group* ........... 265,000 7,651,875
Viacom, Inc. (Class B)* .......... 2,801,300 116,078,869
--------------
493,012,788
--------------
TOTAL BUSINESS SERVICES (5.4%) .. 517,762,788
--------------
CAPITAL GOODS
AEROSPACE (0.3%)
Loral Space &
Communications* (a) ............. 1,440,000 30,870,000
--------------
MACHINERY (0.1%)
UNOVA, Inc.* ..................... 288,800 4,747,150
--------------
TOTAL CAPITAL GOODS (0.4%) ...... 35,617,150
--------------
CONSUMER CYCLICALS
AIRLINES (1.9%)
AMR Corp.* ....................... 185,000 23,772,500
Delta Air Lines, Inc. ............ 769,300 91,546,700
Northwest Airlines Corp.
(Class A)* ...................... 498,300 23,856,112
UAL Corp.* ....................... 328,500 30,386,250
US Airways Group, Inc.* .......... 200,000 12,500,000
--------------
182,061,562
--------------
AUTO RELATED (1.5%)
Republic Industries, Inc.* (a) .. 5,949,500 138,697,719
--------------
AUTOS & TRUCKS (1.2%)
AutoZone, Inc.* .................. 2,590,300 75,118,700
Chrysler Corp. ................... 1,223,800 43,062,462
--------------
118,181,162
--------------
FOOD SERVICES, LODGING (1.1%)
ITT Corp.* ....................... 1,294,500 107,281,688
--------------
LEISURE RELATED (6.2%)
Carnival Corp. (Class A) ......... 37,600 2,082,100
Cendant Corp.* (a) ............... 17,123,600 588,623,750
--------------
590,705,850
--------------
RETAIL--GENERAL (3.0%)
Home Depot, Inc. ................. 2,222,000 130,820,250
Limited, Inc. .................... 2,100,500 53,562,750
Lowe's Cos., Inc. ................ 511,400 24,387,387
Sears, Roebuck & Co. ............. 600,500 27,172,625
Wal-Mart Stores, Inc. ............ 1,278,000 50,401,125
--------------
286,344,137
--------------
TOTAL CONSUMER CYCLICALS (14.9%) 1,423,272,118
--------------
CONSUMER NONCYCLICALS
DRUGS (3.6%)
Astra AB (A Shares) .............. 3,206,664 $ 55,531,720
Centocor, Inc.* .................. 44,700 1,486,275
Merck & Co., Inc. ................ 2,163,200 229,840,000
Schering Plough Corp. ............ 862,000 53,551,750
--------------
340,409,745
--------------
HOSPITAL SUPPLIES & SERVICES (2.9%)
Abbott Laboratories .............. 926,800 60,763,325
Boston Scientific Corp.* ......... 1,547,200 70,977,800
Medtronic, Inc. (a) .............. 2,425,300 126,873,506
United Healthcare Corp. (a) ..... 448,500 22,284,844
--------------
280,899,475
--------------
TOBACCO (5.1%)
Loews Corp. ...................... 2,068,500 219,519,562
Philip Morris Cos., Inc. (a) .... 5,967,100 270,384,219
--------------
489,903,781
--------------
TOTAL CONSUMER NONCYCLICALS (11.6%) 1,111,213,001
--------------
CREDIT SENSITIVE
BANKS (3.7%)
Chase Manhattan Corp. ............ 1,762,868 193,034,046
First Union Corp. ................ 2,010,000 103,012,500
NationsBank Corp. ................ 965,000 58,684,062
--------------
354,730,608
--------------
FINANCIAL SERVICES (7.2%)
American Express Co. (a) ......... 2,850,400 254,398,200
Fleet Financial Group, Inc. ..... 192,100 14,395,494
Household International, Inc. ... 180,800 23,063,300
MBNA Corp. (a) ................... 9,762,525 266,638,964
Morgan Stanley, Dean Witter,
Discover & Co. .................. 1,113,166 65,815,940
PMI Group, Inc. .................. 823,700 59,563,806
--------------
683,875,704
--------------
INSURANCE (11.2%)
Allstate Corp. ................... 1,346,647 122,376,546
American International Group,
Inc. ............................ 3,510,075 381,720,656
Hartford Financial Services
Group, Inc. ..................... 808,600 75,654,638
Progressive Corp. ................ 599,900 71,913,012
Travelers Group, Inc. (a) ........ 7,853,498 423,107,178
---------------
1,074,772,030
---------------
MORTGAGE RELATED (0.3%)
Federal National Mortgage
Association ..................... 543,000 30,984,938
---------------
REAL ESTATE (1.7%)
CBL & Associates
Properties, Inc. ................ 1,007,200 24,865,250
Macerich Co. ..................... 717,500 20,448,750
Manufactured Home Communities,
Inc. ............................ 33,000 891,000
Regency Realty Corp. ............. 128,700 3,563,381
Simon Debartolo Group, Inc. ..... 1,443,000 47,168,063
Spieker Properties, Inc. ......... 1,373,400 58,884,525
Summit Properties, Inc. .......... 464,100 9,804,112
---------------
165,625,081
---------------
UTILITY--TELEPHONE (3.2%)
AT&T Corp. ....................... 500,000 30,625,000
BellSouth Corp. .................. 10,824 609,527
27
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE COMMON STOCK PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
================================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- ----------------------------------------------------------------
Telecomunicacoes Brasileiras
S.A.--Telebras (ADR) ............ 422,300 $ 49,171,556
Teleport Communications Group,
Inc. (Class A)*++ (a) ........... 4,011,000 220,103,625
--------------
300,509,708
--------------
TOTAL CREDIT SENSITIVE (27.3%) 2,610,498,069
--------------
ENERGY
OIL--DOMESTIC (0.3%)
Union Pacific Resources
Group, Inc. ..................... 1,211,677 29,383,167
--------------
OIL--SUPPLIES & CONSTRUCTION (4.7%)
BJ Services Co.* (a) ............. 1,171,800 84,296,363
Baker Hughes, Inc. ............... 830,000 36,208,750
Dresser Industries, Inc. ......... 1,507,300 63,212,394
Halliburton Co. .................. 2,428,700 126,140,606
Nabors Industries, Inc.* ......... 729,500 22,933,656
Rowan Cos., Inc.* ................ 200,000 6,100,000
Santa Fe International Corp. (a) 286,900 11,673,244
Schlumberger Ltd. ................ 109,100 8,782,550
Transocean Offshore, Inc. ........ 1,400,000 67,462,500
Western Atlas, Inc.* ............. 338,800 25,071,200
--------------
451,881,263
--------------
RAILROADS (1.3%)
Canadian Pacific Ltd. ............ 2,673,300 72,847,425
Union Pacific Corp. .............. 728,371 45,477,664
--------------
118,325,089
--------------
TOTAL ENERGY (6.3%) ............. 599,589,519
--------------
TECHNOLOGY
ELECTRONICS (12.8%)
Altera Corp.* (a) ................ 300,000 9,937,500
Applied Magnetics Corp.* ......... 225,000 2,503,125
Cisco Systems, Inc.* (a) ......... 8,986,500 500,997,375
EMC Corp.* (a) ................... 1,300,000 35,668,750
Intel Corp. (a) .................. 1,750,000 122,937,500
National Semiconductor Corp.* ... 1,450,000 37,609,375
Network Associates, Inc.* (a) ... 1,550,000 81,956,250
Solectron Corp.* (a) ............. 600,000 24,937,500
Sterling Commerce, Inc.* (a) .... 2,033,582 78,165,808
Teradyne, Inc.* (a) .............. 450,000 14,400,000
Texas Instruments, Inc. (a) ..... 2,640,000 118,800,000
3Com Corp.* (a) .................. 5,610,900 196,030,819
--------------
1,223,944,002
--------------
OFFICE EQUIPMENT (2.6%)
Ceridian Corp.*++ ................ 3,815,000 174,774,688
Sterling Software, Inc.* ......... 586,200 24,034,200
Xerox Corp. (a) .................. 659,500 48,679,344
--------------
247,488,232
--------------
OFFICE EQUIPMENT SERVICES (0.6%)
First Data Corp. (a) ............. 1,400,000 40,950,000
Fore Systems, Inc.* .............. 101,400 1,546,350
Oracle Corp.* (a) ................ 650,150 14,506,472
--------------
57,002,822
--------------
TELECOMMUNICATIONS (10.3%)
ADC Telecommunications,
Inc.* (a) ....................... 750,000 31,312,500
AirTouch Communications, Inc.* ... 894,600 37,181,812
Ascend Communications,
Inc.* (a) ....................... 250,000 6,125,000
Cabletron Systems, Inc.* ......... 550,000 $ 8,250,000
DSC Communications Corp.* (a) .... 5,866,100 140,786,400
Lucent Technologies, Inc. (a) ... 300,000 23,962,500
MCI Communications Corp. (a) .... 3,567,300 152,725,031
Mannesmann AG (ADR) .............. 143,700 72,505,272
Nokia Corp. (ADR) ................ 200,000 14,000,000
TCI Ventures Group* (a) .......... 2,998,710 83,776,461
Tellabs, Inc.* ................... 585,000 30,931,875
WorldCom, Inc.* (a) .............. 12,706,004 384,356,621
--------------
985,913,472
--------------
TOTAL TECHNOLOGY (26.3%) ........ 2,514,348,528
--------------
DIVERSIFIED
MISCELLANEOUS (1.0%)
Anixter International, Inc.* .... 633,734 10,456,611
Tyco International Ltd. .......... 1,873,336 84,417,203
--------------
TOTAL DIVERSIFIED (1.0%) ........ 94,873,814
--------------
TOTAL COMMON STOCKS (93.5%)
(Cost $6,267,252,116)............ 8,937,624,987
--------------
PREFERRED STOCKS:
BUSINESS SERVICES (0.1%)
ENVIRONMENTAL CONTROL
Republic Industries, Inc.
6.5% Exch. Conv. ................ 470,400 11,054,400
--------------
TECHNOLOGY (0.5%)
TELECOMMUNICATIONS
WorldCom, Inc.
8.0% Conv. ...................... 487,000 51,074,125
--------------
TOTAL PREFERRED STOCKS (0.6%)
(Cost $46,139,690) .............. 62,128,525
--------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount
------
<S> <C> <C>
SHORT-TERM DEBT SECURITIES:
CERTIFICATES OF DEPOSIT (0.3%)
Deutsche Bank
5.75%, due 01/20/98 ............. $25,000,000 24,997,471
-------------
COMMERCIAL PAPER
Associates Corp. of
North America
6.75%, due 01/02/98 ............. 40,000,000 39,992,500
Bank One Columbus
6.5%, due 01/02/98 .............. 12,000,000 11,997,833
Bank of New York
5.8%, due 01/30/98 .............. 25,000,000 24,883,195
Coca Cola Co.
6.5%, due 01/02/98 .............. 20,000,000 19,996,388
CXC, Inc.
6.75%, due 01/02/98 ............. 50,000,000 49,990,625
Edison Asset Securitization
5.84%, due 02/12/98 ............. 4,000,000 3,972,929
Florida Power Corp.
6.4%, due 01/02/98 .............. 20,000,000 19,996,444
International Lease
Finance Corp.
6.68%, due 01/02/98 ............. 700,000 699,870
Koch Industries
6.75%, due 01/02/98 ............. 70,000,000 69,986,908
Province of Quebec
5.68%, due 01/12/98 ............. 20,000,000 19,965,290
-------------
TOTAL COMMERCIAL PAPER (2.7%) 261,481,982
-------------
</TABLE>
28
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE COMMON STOCK PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
<TABLE>
<CAPTION>
==============================================================
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- --------------------------------------------------------------
<S> <C> <C>
TIME DEPOSITS
Bank of Montreal
4.875%, due 01/02/98.......... $287,200,000 $ 287,200,000
Harris Trust & Savings Bank
6.5%, due 01/02/98............ 15,000,000 15,000,000
--------------
TOTAL TIME DEPOSITS (3.2%) .. 302,200,000
--------------
U.S. GOVERNMENT AGENCIES (1.4%)
Federal Home Loan
Mortgage Corp.
6.0%, due 01/02/98............ 137,000,000 136,977,167
--------------
TOTAL SHORT-TERM DEBT SECURITIES (7.6%)
(Amortized Cost
$725,656,620)................. 725,656,620
--------------
TOTAL INVESTMENTS (101.7%)
(Cost/Amortized Cost $7,039,048,426) 9,725,410,132
--------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
CONTRACTS(b)
------------
<S> <C> <C>
CALL OPTIONS WRITTEN*(c):
ADC Telecommunications, Inc.
January @ $37.0625 ......... 2,500 (1,295,000)
Altera Corp.
February @ $34.00........... 3,000 (681,000)
American Express Co.:
January @ $78.25 ........... 3,000 (3,426,000)
January @ $78.375 .......... 2,000 (2,272,000)
January @ $79.00 ........... 2,500 (2,600,000)
January @ $80.25 ........... 2,000 (1,956,000)
February @ $85.875 ......... 2,000 (1,084,000)
February @ $86.75 .......... 3,000 (1,668,000)
February @ $87.00 .......... 1,500 (810,000)
February @ $88.50 .......... 2,000 (780,000)
February @ $88.875 ......... 2,500 (880,000)
February @ $90.50 .......... 2,500 (830,000)
February @ $90.75 .......... 2,000 (606,000)
Ascend Communications, Inc.
January @ $33.75............ 2,500 (15,000)
BJ Services Co.:
January @ $73.50 ........... 2,000 (466,000)
February @ $69.00 .......... 2,000 (1,444,000)
March @ $66.22 ............. 500 (451,500)
March @ $67.61 ............. 1,100 (517,000)
Cendant Corp.:
January @ $30.50 ........... 1,500 (611,085)
January @ $31.50 ........... 5,000 (1,625,000)
February @ $32.375 ......... 5,000 (1,515,000)
February @ $32.42 .......... 3,000 (931,800)
February @ $33.125 ......... 3,000 (763,320)
March @ $32.625 ............ 7,500 (2,348,000)
Cisco Systems, Inc.:
February @ $53.125 ......... 3,000 (1,617,000)
February @ $53.75 .......... 7,500 (4,072,500)
February @ $89.25........... 4,500 (765,000)
DSC Communications Corp.:
January @ $20.00 ........... 3,000 (1,212,000)
January @ $24.00 ........... 2,500 (37,500)
January @ $26.625........... 2,500 (15,000)
EMC Corp.
January @ $29.125........... 2,000 (174,000)
</TABLE>
<TABLE>
<CAPTION>
==============================================================
NUMBER OF VALUE
CONTRACTS(b) (NOTE 1)
- --------------------------------------------------------------
<S> <C> <C>
First Data Corp.:
January @ $29.375 .......... 3,000 $ (327,000)
January @ $29.5625 ......... 2,500 (300,000)
February @ $25.50 .......... 3,000 (1,329,000)
February @ $28.5625 ........ 3,000 (510,000)
March @ $26.75 ............. 2,500 (935,000)
Intel Corp.:
January @ $70.25 ........... 3,000 (1,008,000)
January @ $74.375 .......... 1,500 (156,000)
January @ $76.625 .......... 3,000 (135,000)
January @ $77.00............ 2,000 (62,000)
January @ $78.00 ........... 2,000 (76,000)
March @ $70.50 ............. 1,000 (477,000)
Loral Space & Communications:
January @ $20.625 .......... 2,000 (268,000)
January @ $20.75 ........... 3,500 (406,000)
January @ $21.50 ........... 1,900 (112,100)
January @ $22.125 .......... 3,000 (30,000)
March @ $20.875 ............ 2,000 (322,000)
Lucent Technologies, Inc.
February @ $77.25 .......... 3,000 (2,028,300)
MBNA Corp.:
January @ $26.75 ........... 3,000 (324,000)
January @ $26.875 .......... 4,500 (495,000)
January @ $27.125 .......... 3,750 (210,000)
January @ $29.25 ........... 4,500 (189,000)
February @ $28.6875 ........ 2,500 (170,000)
February @ $29.00........... 3,000 (321,000)
MCI Communications Corp.:
January @ $36.4375 ......... 2,500 (1,670,000)
January @ $40.75 ........... 2,500 (642,500)
January @ $41.50............ 2,500 (577,500)
Medtronic, Inc.:
January @ $46.50 ........... 4,000 (2,376,000)
February @ $49.00 .......... 4,000 (1,936,000)
February @ $49.25 .......... 5,000 (2,377,200)
February @ $51.125 ......... 3,000 (910,230)
March @ $50.375 ............ 2,500 (1,037,500)
Network Associates, Inc.:
January @ $49.875 .......... 2,500 (1,287,500)
February @ $46.00 .......... 2,500 (2,042,500)
February @ $49.625 ......... 2,000 (1,162,000)
February @ $50.250 ......... 3,500 (2,194,500)
March @ $50.375 ............ 3,000 (1,911,000)
March @ $51.375 ............ 2,000 (1,174,000)
Oracle Corp.:
January @ $35.75 ........... 2,000 (30,000)
February @ $23.125 ......... 4,500 (624,000)
Philip Morris Cos., Inc.:
January @ $40.9375 ......... 2,500 (1,207,500)
January @ $41.125 .......... 2,000 (843,980)
January @ $41.25 ........... 2,000 (862,000)
January @ $41.50 ........... 3,000 (1,371,000)
January @ $41.625 .......... 2,500 (970,000)
January @ $41.78 ........... 2,000 (926,000)
February @ $43.875 ......... 3,500 (945,000)
February @ $44.50 .......... 2,500 (615,000)
February @ $45.00 .......... 3,000 (603,000)
February @ $45.25 .......... 3,500 (771,500)
February @ $45.4275 ........ 2,000 (528,000)
February @ $45.6875......... 2,500 (352,500)
29
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE COMMON STOCK PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1997
===========================================================
NUMBER OF VALUE
CONTRACTS(b) (NOTE 1)
- -----------------------------------------------------------
Republic Industries, Inc.:
January @ $26.9375 ........... 3,000 $ (6,660)
January @ $27.50 ............. 2,500 (137,500)
January @ $27.5625 ........... 3,000 (159,000)
January @ $30.875 ............ 2,500 (37,500)
February @ $24.875 ........... 1,500 (186,000)
February @ $25.00 ............ 2,000 (239,940)
February @ $25.125 ........... 2,000 (249,960)
February @ $26.5625 .......... 3,500 (273,805)
Santa Fe International Corp.
February @ $38.00 ............ 2,000 (910,000)
Solectron Corp.:
January @ $33.875 ............ 2,500 (1,950,000)
February @ $29.875 ........... 1,000 (1,201,000)
February @ $38.00 ............ 2,500 (1,347,500)
Sterling Commerce, Inc.:
January @ $37.375 ............ 2,000 (310,000)
March @ $37.125 .............. 1,300 (436,800)
March @ $37.875 .............. 700 (206,500)
March @ $38.1875 ............. 3,000 (822,000)
TCI Group (Class A):
January @ $23.75 ............. 2,500 (1,102,500)
February @ $26.375 ........... 2,000 (424,000)
February @ $28.625............ 2,500 (297,500)
TCI Ventures Group:
February @ $27.375 ........... 4,500 (1,125,000)
March @ $28.875 .............. 2,625 (417,375)
March @ $29.375 .............. 875 (120,750)
Teradyne, Inc.
February @ $32.875 ........... 2,500 (702,500)
Teleport Communications Group,
Inc.:
January @ $46.625 ............ 2,000 (1,764,000)
January @ $48.75 ............. 900 (649,800)
January @ $48.875 ............ 2,000 (1,366,000)
January @ $49.00 ............. 2,500 (1,562,500)
January @ $49.50 ............. 2,500 (1,375,000)
January @ $49.625 ............ 1,100 (719,400)
January @ $49.905 ............ 1,300 (731,900)
January @ $50.3125 ........... 2,500 $ (1,230,000)
January @ $50.6875 ........... 700 (434,000)
February @ $48.875 ........... 1,500 (1,072,500)
February @ $53.00 ............ 2,000 (952,000)
February @ $55.00 ............ 6,000 (2,052,000)
February @ $57.75 ............ 1,500 (214,500)
March @ $55.75 ............... 2,000 (630,000)
Texas Instruments, Inc.:
January @ $45.50 ............. 3,000 (708,000)
January @ $49.375 ............ 2,000 (94,000)
January @ $100.50 ............ 5,000 (65,000)
January @ $103.25 ............ 3,000 (39,000)
February @ $45.50............. 3,000 (987,000)
Travelers Group, Inc.:
January @ $53.50 ............. 2,500 (760,000)
January @ $74.25 ............. 3,000 (1,416,000)
February @ $56.50 ............ 2,500 (395,000)
February @ $57.00 ............ 2,500 (305,000)
United Healthcare Corp.:
January @ $52.9375 ........... 1,500 (57,000)
February @ $46.50 ............ 1,500 (799,500)
WorldCom, Inc.:
January @ $32.875 ............ 2,500 (37,500)
January @ $34.00 ............. 4,000 (144,000)
January @ $34.4375 ........... 3,000 (56,250)
January @ $36.75.............. 2,500 (30,000)
Xerox Corp.:
February @ $69.625 ........... 3,500 (2,310,000)
February @ $69.875 ........... 3,000 (1,644,000)
3Com Corp.:
January @ $32.0625 ........... 2,500 (982,500)
January @ $34.00 ............. 3,000 (750,000)
--------------
TOTAL CALL OPTIONS WRITTEN (-1.2%)
(Premiums Received $103,560,700) (118,604,155)
--------------
OTHER ASSETS
LESS LIABILITIES (-0.5%) .... (46,032,244)
--------------
NET ASSETS (100.0%) ........... $9,560,773,733
==============
</TABLE>
<PAGE>
- ------------
* Non-income producing.
++ Affiliated company as defined under the Investment Company Act of 1940
(See Note 6).
(a) Partially pledged as collateral on outstanding written call options.
(b) One contract relates to 100 shares.
(c) Covered call option contracts written in connection with securities held.
Glossary:
ADR -- American Depository Receipt
See Notes to Financial Statements.
30
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GLOBAL PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
===============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
<S> <C> <C>
COMMON STOCK AND OTHER
INVESTMENTS:
BASIC MATERIALS
CHEMICALS (0.9%)
Akzo Nobel N.V. .................. 10,000 $ 1,724,163
Bayer AG ......................... 40,000 1,484,199
GP Batteries International Ltd. . 820,000 2,135,950
GP Batteries International
Ltd.--Warrants* ................. 12,500 17,250
Holliday Chemical Holdings PLC ... 30,000 113,388
Indo Gulf Fertilisers & Chemicals
Corp. Ltd. (GDR)+................ 150,000 140,580
Ishihara Sangyo Kaisha Ltd.* .... 326,000 362,292
Johnson Matthey PLC .............. 225,000 2,015,102
Royal Group Technologies Ltd.* ... 50,000 1,159,375
Sanyo Chemicals Industries Ltd. . 18,000 104,848
SKW Trostberg AG ................. 37,000 1,174,407
-----------
10,431,554
-----------
CHEMICALS--SPECIALTY (0.9%)
SGL Carbon AG+ ................... 78,560 10,044,081
UCAR International, Inc.* ........ 40,000 1,597,500
-----------
11,641,581
-----------
METALS & MINING (0.3%)
Great Central Mines Ltd. ......... 391,580 420,906
Randgold Resources Ltd. (GDR)*+ . 181,800 954,450
Toho Titanium* ................... 129,000 1,087,565
Westralian Sands Ltd. ............ 280,000 656,660
WMC Ltd. ......................... 200,000 697,050
-----------
3,816,631
-----------
PAPER (0.4%)
Asia Pacific Resources
International Ltd. (Class A)* .. 70,000 131,250
Enso Oy (Series R) ............... 124,000 959,979
Fletcher Challenge Forest ........ 17,026 14,137
Grupo Industrial Durango (ADR)* . 66,000 940,500
Jefferson Smurfit Corp.* ......... 300,000 833,155
Mayr-Melnhof Karton AG+ .......... 20,000 1,076,832
Nippon Paper Industries Co. ..... 77,000 302,157
Oji Paper Co. Ltd. ............... 83,000 330,155
-----------
4,588,165
-----------
STEEL (0.2%)
Acerinox SA ...................... 2,002 296,588
Broken Hill Proprietary Co. Ltd. . 150,000 1,392,472
Sumitomo Metal Industries ........ 730,000 934,355
-----------
2,623,415
-----------
TOTAL BASIC MATERIALS (2.7%) ... 33,101,346
-----------
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (1.4%)
B.U.S. Berzelius Umwelt-
Service AG ...................... 87,700 1,170,016
Daiseki Co. Ltd. ................. 19,300 199,693
Matsuda Sangyo Co. Ltd. .......... 23,000 138,908
Powerscreen International PLC ... 640,000 6,425,494
Rentokil Initial PLC ............. 542,991 2,364,594
Tomra Systems ASA ................ 310,000 6,925,452
-----------
17,224,157
-----------
PRINTING, PUBLISHING &
BROADCASTING (2.5%)
Carlton Communications PLC ...... 536,300 $ 4,142,129
De La Rue PLC .................... 180,000 1,171,347
Elsevier N.V. .................... 174,000 2,814,687
Flextech PLC* .................... 69,000 597,555
Liberty Media Group (Class A)* ... 154,875 5,614,219
Mirror Group PLC ................. 200,000 640,889
Nippon Television Network Corp. . 5,790 1,699,613
Reader's Digest Association, Inc.
(Class A) ....................... 45,000 1,063,125
Reed International PLC ........... 200,000 2,004,831
Takara Printing Co. .............. 4,000 11,956
Tele-Communications, Inc.
(Class A)* ...................... 116,425 3,252,623
Television Broadcasts Ltd. ...... 265,000 755,775
Tokyo Broadcasting System, Inc. .. 121,000 1,530,178
TVI Televisao Independente* ..... 1,175 11,747
Ver Ned Uitgeversbedr Ver
Bezit N.V. ...................... 20,000 564,200
Viacom, Inc. (Class B)* .......... 109,300 4,529,119
-----------
30,403,993
PROFESSIONAL SERVICES (1.3%)
Alvern Norway ASA* ............... 258,529 612,562
Apcoa Parking AG+ ................ 19,580 1,436,705
Asatsu, Inc. ..................... 56,500 814,102
Brisa-Auto Estradas de
Portugal SA* .................... 19,500 698,525
Content Beheer N.V.+ ............. 150,000 3,698,863
Meitec ........................... 163,000 4,584,863
Shandwick International PLC ..... 30,000 20,336
Unique International NV* ......... 82,500 1,757,700
WPP Group PLC .................... 600,000 2,672,013
-----------
16,295,669
-----------
TRUCKING, SHIPPING (0.9%)
Brambles Industries Ltd. ......... 250,000 4,959,154
Cosco Pacific Ltd. ............... 300,000 243,902
Frontline Ltd.* .................. 950,000 3,833,031
Irish Continental Group Ltd. .... 140,000 1,713,050
Koninklijke Nedlloyd Groep N.V. .. 11,250 255,222
Yamato Transport Co. Ltd. ........ 8,000 107,300
-----------
11,111,659
-----------
TOTAL BUSINESS SERVICES (6.1%) .. 75,035,478
-----------
CAPITAL GOODS
AEROSPACE (0.1%)
Loral Space & Communications* .... 62,000 1,329,125
-----------
BUILDING & CONSTRUCTION (0.7%)
ABB AG ........................... 800 1,005,135
Bufete Industrial S.A. (ADR)* ... 19,000 185,250
Daito Trust Construction Co. Ltd. 49,900 304,812
Hitachi Plant Engineering &
Construction Co. ................ 83,000 185,116
Japan Industrial Land Development 50,000 120,713
Kaneshita Construction ........... 120,000 542,633
MacMahon Holdings Ltd. ........... 1,895,200 592,620
Metacorp BHD ..................... 335,000 142,113
31
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GLOBAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
===============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
Mitsui Home Co. Ltd. ............. 92,000 $ 500,632
Nanno Construction Co. Ltd. ..... 53,000 42,652
Nippon Denwa Shisetsu ............ 58,000 222,265
Ohmoto Gumi Co. Ltd. ............. 61,000 261,813
Oriental Construction Co. ........ 41,500 181,299
Pacific Rim Infra Management
Enterprises Ltd.* ............... 716,500 23,578
Penta-Ocean Construction ......... 20,000 28,051
PS Corp. ......................... 109,700 416,183
Raito Kogyo Co. Ltd. ............. 90,800 393,194
Sacos Corp. ...................... 8,600 39,548
Sanyo Engineering & Construction
Co. ............................. 21,000 75,647
Sho Bond Corp. ................... 140,500 2,541,330
Suido Kiko Kaisha ................ 38,000 76,306
Toda Corp. ....................... 89,000 242,154
Wesco, Inc. ...................... 28,720 70,438
-----------
8,193,482
-----------
BUILDING MATERIALS & FOREST
PRODUCTS (0.8%)
BPB PLC .......................... 540,000 3,017,107
Fujikura Ltd. .................... 335,000 2,218,356
Lafarge SA ....................... 25,750 1,689,570
Nichiha Corp. .................... 186,700 1,141,879
Portland Valderrivas SA .......... 11,400 1,025,139
Sumitomo Forestry Co. ............ 24,000 116,804
-----------
9,208,855
-----------
ELECTRICAL EQUIPMENT (0.3%)
Alcatel Alsthom .................. 16,000 2,033,729
Mabuchi Motor Co. ................ 25,800 1,311,010
Vae Eisenbahnsysteme AG .......... 3,000 263,627
Yaskawa Electric Corp. ........... 27,000 67,254
Zucchini Spa ..................... 30,400 218,248
-----------
3,893,868
-----------
MACHINERY (1.8%)
Asahi Diamond Industry
Co. Ltd. ........................ 91,000 396,850
Cie Generale de Geophysique SA
(ADR)* .......................... 260,000 6,662,500
Construcciones y Auxiliar de
Ferrocarrites SA ................ 9,425 347,676
Danieli & Co. .................... 32,200 221,159
Enshu* ........................... 74,000 92,447
Gildemeister Italiana Spa* ...... 45,725 155,346
IHC Caland N.V. .................. 52,000 2,697,902
Ishikawajima Harima Heavy
Industries Co. Ltd. ............. 239,000 357,195
Kalmar Industries AB+ ............ 60,000 967,267
Kawasaki Heavy Industries Ltd. .. 277,000 428,848
Keyence Corp. .................... 800 118,337
Mitsubishi Heavy Industries Ltd. . 450,000 1,876,221
Namura Shipbuilding .............. 56,000 126,614
Nireco ........................... 24,000 88,293
Nitta Corp. ...................... 100,700 1,018,770
Nitto Kohki Co. Ltd. ............. 83,500 908,756
Rauma Oy ......................... 41,600 648,694
Siebe PLC ........................ 80,000 1,570,999
SMC Corp. ........................ 29,500 2,600,115
Sodick Co.* ...................... 369,000 1,057,720
Thai Engine Manufacturing Public
Co. Ltd. ........................ 87,000 $ 144,548
-----------
22,486,257
-----------
TOTAL CAPITAL GOODS (3.7%) ..... 45,111,587
-----------
CONSUMER CYCLICALS
AIRLINES (2.7%)
Air Canada* ...................... 90,000 928,679
British Airways PLC .............. 150,000 1,380,376
Continental Airlines, Inc.
(Class B)* ...................... 169,000 8,133,125
Delta Air Lines, Inc. ............ 46,500 5,533,500
KLM .............................. 80,000 2,959,091
Lufthansa AG ..................... 207,500 3,898,663
Northwest Airlines Corp.
(Class A)* ...................... 42,300 2,025,112
Singapore Airlines Ltd. .......... 206,000 1,347,606
UAL Corp.* ....................... 28,200 2,608,500
US Airways Group, Inc.* .......... 28,000 1,750,000
Virgin Express Holdings PLC
(ADR)* .......................... 110,000 2,282,500
-----------
32,847,152
-----------
APPAREL, TEXTILE (0.2%)
Carli Gry International A/S ..... 30,000 1,685,664
Giordano International Ltd.* .... 36,000 12,427
King Co. ......................... 55,000 52,692
Morishita Co. Ltd. ............... 5,000 13,413
PT Great River International .... 3,150,000 257,727
-----------
2,021,923
-----------
AUTO RELATED (1.5%)
Asahi Glass Co. Ltd. ............. 48,000 228,090
Autoliv, Inc. .................... 35,000 1,146,250
Bridgestone Metalpha Corp. ...... 6,000 22,303
FCC Co. Ltd. ..................... 13,000 137,498
Gerresheimer Glas AG ............. 12,000 168,098
LucasVarity PLC .................. 700,000 2,473,173
Michelin (CGDE), (Class B) ...... 45,000 2,265,515
Minebea Co. Ltd. ................. 214,000 2,296,225
NGK Spark Plug Co. ............... 132,000 748,649
Republic Industries, Inc.* ...... 367,000 8,555,687
Toyoda Gosei ..................... 11,000 39,793
-----------
18,081,281
-----------
AUTOS & TRUCKS (0.4%)
AutoZone, Inc.* .................. 161,700 4,689,300
Honda Motor Co. Ltd. ............. 6,000 220,272
Isuzu Motors Ltd. ................ 74,000 115,133
Seat Spa* ........................ 40,000 15,602
-----------
5,040,307
-----------
FOOD SERVICES, LODGING (1.9%)
AAPC Ltd. ........................ 1,500,000 615,619
Accor SA ......................... 25,000 4,648,168
Compass Group PLC ................ 540,000 6,646,509
International Fast Food Corp.* .. 8,000 3,360
ITT Corp.* ....................... 80,400 6,663,150
Jurys Hotel Group PLC ............ 300,000 1,557,965
QPQ Corp.--Warrants* ............. 32,700 128
32
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GLOBAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
===============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
Restaurant Brands NZ Ltd.*+ ..... 220,100 $ 217,262
Sanyo Pax Co. Ltd. ............... 50,000 433,033
Scandic Hotels AB*+ .............. 1,100 26,877
Selecta Group* ................... 11,200 1,503,047
Thistle Hotels PLC ............... 249,200 649,403
------------
22,964,521
------------
HOUSEHOLD FURNITURE, APPLIANCES (0.4%)
Hunter Douglas N.V. .............. 60,000 2,100,954
Industrie Natuzzi Spa (ADR) ..... 120,000 2,475,000
Moulinex* ........................ 20,527 507,164
Sanyo Electric Co. Ltd. .......... 162,000 422,150
------------
5,505,268
------------
LEISURE RELATED (5.1%)
Canal Plus ....................... 15,000 2,788,901
Capcom Co. Ltd. .................. 9,200 94,486
Carnival Corp. (Class A) ......... 5,500 304,562
Cendant Corp.* ................... 1,058,100 36,372,187
Cinar Films, Inc. (Class B)* .... 45,000 1,749,375
EMI Group PLC .................... 200,000 1,669,597
H.I.S. Company Ltd. .............. 7,700 133,964
Hoyts Cinemas Group+ ............. 1,370,000 2,409,709
Imagineer Co. Ltd. ............... 40,400 315,831
KTM Motorradholding AG* .......... 17,780 898,044
Ladbroke Group PLC ............... 550,000 2,386,078
Mars Engineering Corp. ........... 30,600 168,860
NAMCO Ltd. ....................... 19,200 557,716
Nelvana Limited*+ ................ 130,000 2,500,962
Nintendo Co. Ltd. ................ 13,800 1,353,823
Nippon Broadcasting System ...... 60,000 2,372,868
Rank Group PLC ................... 100,000 557,080
Tag Heuer International SA (ADR)* 143,200 1,181,400
Toei Co. Ltd. .................... 80,000 291,244
Tourism Holdings Ltd. ............ 600,000 411,100
@Entertainment, Inc.* ............ 404,700 4,502,287
------------
63,020,074
------------
PHOTO & OPTICAL (0.3%)
Luxottica Group (ADR) ............ 20,000 1,250,000
Noritsu Koki Co. Ltd. ............ 114,600 2,828,220
------------
4,078,220
------------
RETAIL--GENERAL (3.4%)
Aldeasa, SA* ..................... 76,568 1,623,332
BAA PLC .......................... 100,000 818,366
Carpetright PLC .................. 20,000 151,184
Centros Comerciales Pryca SA .... 30,000 446,997
Dixons Group PLC ................. 450,000 4,518,265
Doshisha Co. ..................... 37,000 181,491
Eiden Sakakiya Co. Ltd. .......... 75,000 278,789
Gucci Group N.V. ................. 5,000 209,375
Homac Corp. ...................... 33,300 168,191
Home Centers Ltd.* ............... 142,800 1,570,800
Home Depot, Inc. ................. 155,600 9,160,950
Home Wide Corp. .................. 18,000 60,011
House of Fraser PLC .............. 550,000 1,816,673
Isetan Co. ....................... 214,000 893,888
Japan Airport Terminal Co. Ltd. .. 183,800 1,155,133
Kokuyo Co. Ltd. .................. 29,000 500,096
Limited, Inc. .................... 321,300 8,193,150
MFI Furniture Group PLC .......... 100,000 198,018
Paris Miki, Inc. ................. 101,900 $ 1,093,390
Sato Corp. ....................... 120,200 2,045,173
Smith (W.H.) Group PLC ........... 300,000 1,917,736
Sriwani Holdings BHD ............. 680,000 180,075
S.T. Dupont* ..................... 70,614 924,547
Swank International Manufacturing
Co.* ............................ 1,000,000 108,401
Thorn PLC ........................ 428,570 1,112,748
Vendex International N.V. ........ 14,400 794,693
Warehouse Group Ltd. ............. 390,000 1,041,685
Xebio Co. ........................ 15,200 121,157
------------
41,284,314
------------
TOTAL CONSUMER CYCLICALS (15.9%) 194,843,060
------------
CONSUMER NONCYCLICALS
BEVERAGES (1.1%)
Bass PLC ......................... 72,800 1,129,929
Diageo PLC ....................... 700,000 6,436,002
Hartwall Oy AB ................... 9,000 742,990
Lion Nathan Ltd. ................. 31,500 70,601
Louis Dreyfus Citrus ............. 71,500 2,185,927
Panamerican Beverages, Inc. ..... 60,000 1,957,500
Quilmes Industrial Quins (ADR) ... 80,000 1,095,000
------------
13,617,949
------------
DRUGS (5.3%)
Astra AB (A Shares) .............. 90,000 1,558,584
Hafslund ASA (B Shares) .......... 80,000 381,272
Merck & Co., Inc. ................ 122,100 12,973,125
Novartis AG ...................... 1,358 2,203,670
Novartis AG (ADR) ................ 20,000 1,624,900
Novo-Nordisk A/S (B Shares) ..... 35,000 5,005,911
Orion-Yhtymae Oy (B Shares) ..... 182,000 4,807,969
Pfizer, Inc. ..................... 75,000 5,592,187
Roche Holdings AG Genusscheine .. 450 4,469,189
Rohto Pharmaceutical Co. Ltd. ... 4,000 25,752
Sankyo Co. Ltd. .................. 123,000 2,780,993
Santen Pharmaceutical Co. Ltd. .. 312,000 3,586,894
Schering Plough Corp. ............ 51,000 3,168,375
Smith & Nephew PLC ............... 275,000 813,436
Smithkline Beecham PLC ........... 400,000 4,095,114
Taisho Pharmaceutical Co. ........ 44,000 1,122,974
Yamanouchi Pharmaceutical Co.
Ltd. ............................ 215,000 4,613,911
Zeneca Group PLC ................. 180,000 6,321,135
------------
65,145,391
------------
FOODS (0.8%)
Avonmore Waterford Group PLC .... 130,500 479,042
Fyffes PLC ....................... 3,400,000 5,079,392
Karlshamns AB*+ .................. 20,000 312,346
Nestle SA ........................ 1,000 1,498,802
Nutricia Verenigde Bedrijven
N.V.+ ........................... 25,000 758,267
Oie Sangyo Co. Ltd. .............. 4,000 16,555
Shriram Industrial Enterprises
Ltd. (GDR)*+ .................... 165,000 330,000
Viscofan Envoltura ............... 60,000 1,506,400
------------
9,980,804
------------
33
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GLOBAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
===============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
HOSPITAL SUPPLIES & SERVICES (1.5%)
Australian Hospital Care Ltd. ... 636,000 $ 849,359
Boston Scientific Corp.* ......... 92,300 4,234,262
Cochlear Ltd. .................... 20,000 65,145
Coloplast A/S B .................. 1,200 92,821
EDAP TMS SA (ADR)* ............... 365,000 2,555,000
Medtronic, Inc. .................. 176,500 9,233,156
NIC Corp. ........................ 9,000 48,975
Nichii Gakkan Co.* ............... 15,000 517,340
Quest Medical, Inc.* ............. 164,543 1,146,659
Scandinavian Mobility
International A/S ............... 10,000 91,945
------------
18,834,662
------------
RETAIL--FOOD (0.8%)
Daimon Co. Ltd. .................. 27,800 55,398
Etablissements Economiques du
Casino Guichard-Perrachon SA .... 13,590 756,443
Familymart Co. ................... 62,100 2,227,461
Kesko ............................ 60,000 948,825
Loblaw Companies Ltd. ............ 40,000 724,754
McBride PLC ...................... 350,000 1,018,027
Santa Isabel S.A. (ADR) .......... 32,000 560,000
Seven-Eleven Japan Co. Ltd. ..... 49,000 3,470,090
------------
9,760,998
------------
TOBACCO (3.7%)
Imperial Tobacco Group PLC ...... 341,000 2,146,205
Japan Tobacco, Inc. .............. 150 1,064,572
Loews Corp. ...................... 120,800 12,819,900
Philip Morris Cos., Inc. ......... 429,200 19,448,125
RJ Reynolds BHD .................. 210,000 342,846
Seita ............................ 66,000 2,368,697
Swedish Match AB ................. 1,100,000 3,671,331
Tabacalera SA--A ................. 40,000 3,242,534
------------
45,104,210
------------
TOTAL CONSUMER NONCYCLICALS (13.2%) 162,444,014
------------
CREDIT SENSITIVE
BANKS (4.2%)
Akita Bank ....................... 82,000 320,521
AMMB Holdings BHD ................ 30,000 19,668
Asahi Bank Ltd. .................. 140,000 568,691
Banco Latinoamericano de
Exportaciones S.A. (E Shares) ... 60,000 2,482,500
Bank of Tokyo-Mitsubishi Ltd. ... 250,000 3,448,937
Barclays Bank .................... 80,000 2,127,093
BHW Holding AG* .................. 25,000 409,961
BPI-SGPS SA* ..................... 24,000 583,537
Chase Manhattan Corp. ............ 126,488 13,850,436
Dai-Ichi Kangyo Bank ............. 326,000 1,923,893
Erste Bank Der Oesterreichischen
Sparkassen AG* .................. 37,400 1,863,856
First Union Corp. ................ 116,000 5,945,000
Forenings Sparbanken AB
(A Shares) ...................... 32,000 727,465
Grupo Financiero Banamex Accival
(B Shares)* ..................... 150,000 448,511
Grupo Financiero Banorte (Class
B)* ............................. 178,750 311,815
Grupo Financiero Banorte--Rights
(Class B)* ...................... 178,750 $ 0
HSBC Holdings PLC (H.K.$) ........ 60,000 1,478,900
Mitsubishi Trust & Banking Corp. 100,000 1,004,024
NationsBank Corp. ................ 57,000 3,466,312
Nordbanken Holding AB*+ .......... 309,000 1,747,390
Overseas-Chinese Bank ............ 44,000 256,438
Shizuoka Bank Ltd. ............... 70,000 751,102
Skandinaviska Enskilda Banken
(Series A) ...................... 126,830 1,605,362
Standard Chartered PLC ........... 150,000 1,602,222
Sumitomo Bank Ltd. ............... 291,000 3,323,165
Suncorp-Metway Ltd.* ............. 30,444 76,356
Toho Bank ........................ 119,000 474,267
Union Bank of Norway ............. 8,600 306,236
United Overseas Bank Ltd. ........ 160,000 889,682
------------
52,013,340
------------
<PAGE>
FINANCIAL SERVICES (4.9%)
American Express Co. ............. 103,600 9,246,300
Americredit Corp.* ............... 206,700 5,723,006
Amvescap PLC ..................... 270,000 2,320,510
CIT Group, Inc.* ................. 110,700 3,570,075
CMIC Finance & Securities Public
Co. Ltd. ........................ 724,700 0
Credit Saison Co. ................ 215,550 5,319,571
Dexia France ..................... 10,000 1,158,096
Fleet Financial Group, Inc. ..... 53,700 4,024,144
Hong Leong Finance Ltd. .......... 160,000 172,227
JCG Holdings ..................... 142,000 60,930
MBNA Corp. ....................... 578,100 15,789,356
Morgan Stanley, Dean Witter,
Discover & Co. .................. 71,800 4,245,175
Newcourt Credit Group, Inc.* .... 84,000 2,803,500
Nichiei Co. Ltd. ................. 9,700 1,033,378
Promise Co. Ltd. ................. 10 555
PT Bunas Finance Indonesia ...... 800,000 47,273
Sanyo Shinpan Finance Co. Ltd. .. 21,700 959,640
Takefuji Corp. ................... 81,800 3,755,371
------------
60,229,107
------------
INSURANCE (6.0%)
Acceptance Insurance Cos., Inc.* . 80,100 1,937,419
Aegon N.V. ....................... 40,000 3,560,772
American International
Group, Inc. ..................... 144,375 15,700,781
ASR Verzekeringsgroep N.V. ...... 90,000 4,895,815
Corporacion Mapfre Cia Inter SA . 140,000 3,712,504
Fairfax Financial Holdings Ltd.* 4,000 895,449
Fortis Amev N.V. ................. 82,381 3,591,587
ING Groep N.V. ................... 90,000 3,790,595
Irish Life PLC ................... 175,000 999,406
Koa Fire & Marine ................ 37,000 138,954
Mediolanum Spa+ .................. 15,000 282,363
Norwich Union PLC* ............... 250,000 1,602,222
Pacific & Orient BHD ............. 220,000 100,681
Progressive Corp. ................ 19,500 2,337,562
QBE Insurance Group Ltd. ......... 15,651 70,424
Skandia Forsakrings AB ........... 30,000 1,415,005
34
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GLOBAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
===============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
Sumitomo Marine & Fire Insurance
Co. ............................. 25,000 $ 132,209
Travelers Group, Inc. ............ 424,699 22,880,659
20th Century Industries .......... 211,000 5,486,000
------------
73,530,407
------------
REAL ESTATE (2.8%)
Arden Realty, Inc. ............... 193,100 5,937,825
Castellum AB* .................... 340,000 3,382,914
Cheung Kong Holdings ............. 126,000 825,203
Chubu Sekiwa Real Estate Ltd. ... 16,000 83,878
City Developments Ltd. ........... 115,000 533,452
Daibiru Corp. .................... 46,000 336,693
Entertainment Properties Trust .. 136,000 2,635,000
JP Realty, Inc. .................. 87,300 2,264,344
Macerich Co. ..................... 151,700 4,323,450
MEPC PLC ......................... 210,000 1,753,077
Mitsubishi Estate Co. ............ 61,000 663,882
Pernas International Hotels
Holdings BHD .................... 640,000 177,709
Prentiss Properties Trust ........ 85,000 2,374,687
Sap Holdings BHD ................. 66,000 24,605
Singapore Land Ltd. .............. 300,000 660,125
Sino Land Co. .................... 1,850,000 1,116,112
Spieker Properties, Inc. ......... 82,700 3,545,762
Sumitomo Realty & Development Co.
Ltd. ............................ 364,000 2,092,355
Sun Communities, Inc. ............ 41,000 1,473,437
------------
34,204,510
------------
UTILITY--ELECTRIC (3.2%)
British Energy PLC ............... 1,350,000 9,384,090
Cia Paranaense de Energia-Copel
(ADR) ........................... 356,000 4,872,750
Electricidade de Portugal SA* ... 127,005 2,404,849
Energy Group PLC ................. 50,000 552,150
Enersis S.A. (ADR) ............... 45,000 1,305,000
EVN AG ........................... 8,394 1,103,118
Gas Y Electridad SA (Series 2) .. 5,000 361,011
Hidroelectrica del Cantabrico ... 45,000 1,973,088
Iberdrola SA ..................... 270,000 3,553,331
Korea Electric Power (ADR) ...... 90,000 905,625
National Grid Group PLC .......... 1,000,000 4,749,150
National Power PLC ............... 420,000 4,141,127
Veba AG .......................... 50,000 3,404,764
------------
38,710,053
------------
UTILITY--GAS (0.3%)
General de Aguas d'Barcelona .... 89,900 3,705,756
------------
UTILITY--TELEPHONE (2.5%)
AT&T Corp. ....................... 32,000 1,960,000
Electric Lightwave, Inc.* ........ 205,000 3,049,375
Empresas Telex-Chile S.A. (ADR) . 70,000 275,625
Hellenic Telecommunication
Organization SA ................. 52,546 1,076,596
Koninklijke PTT Nederland NV+ .... 30,000 1,251,695
Magyar Tavkozlesi Rt (ADR)* ..... 218,000 5,668,000
Portugal Telecom SA .............. 31,680 1,469,966
PT Indonesian Satellite (ADR) ... 40,000 772,500
Telecom Italia Spa ............... 40,000 255,512
Telefonica de Espana ............. 100,000 2,855,267
Telephone & Data Systems, Inc. .. 56,700 $ 2,640,094
Teleport Communications Group,
Inc. (Class A)* ................. 126,000 6,914,250
Videsh Sanchar Nigam Ltd. (GDR)* 148,000 1,912,900
------------
30,101,780
------------
TOTAL CREDIT SENSITIVE (23.9%) 292,494,953
------------
ENERGY
COAL & GAS PIPELINES (0.4%)
OMV AG ........................... 37,200 5,153,782
------------
OIL--DOMESTIC (0.3%)
Union Pacific Resources Group,
Inc. ............................ 149,300 3,620,525
------------
<PAGE>
OIL--INTERNATIONAL (0.8%)
Canadian Occidental .............. 8,000 181,000
Elf Aquitaine .................... 25,000 2,907,701
Orogen Minerals Ltd. ............. 310,000 605,847
Renaissance Energy Ltd.* ......... 80,000 1,650,985
Repsol SA ........................ 65,000 2,773,220
Southern Pacific Petroleum* ..... 850,000 1,522,762
------------
9,641,515
------------
OIL--SUPPLIES & CONSTRUCTION (5.6%)
Baker Hughes, Inc. ............... 50,000 2,181,250
BJ Services Co.* ................. 64,000 4,604,000
Bouygues Offshore SA (ADR) ...... 117,000 2,544,750
Canadian Fracmaster Ltd.
Installment Receipt*+ ........... 571,500 4,797,649
Coflexip (ADR) ................... 65,000 3,607,500
Dresser Industries, Inc. ......... 220,100 9,230,444
Fugro N.V.* ...................... 80,000 2,438,291
Halliburton Co. .................. 167,400 8,694,337
Nabors Industries, Inc.* ......... 320,600 10,078,862
Noble Drilling Corp.* ............ 179,000 5,481,875
Rowan Cos., Inc.* ................ 94,000 2,867,000
Santa Fe International Corp. .... 84,500 3,438,094
Schlumberger Ltd. ................ 36,400 2,930,200
Transocean Offshore, Inc. ........ 112,000 5,397,000
Tubos de Acero de Mexico SA
(ADR)* .......................... 10,000 216,250
------------
68,507,502
------------
TOTAL ENERGY (7.1%) ............. 86,923,324
------------
TECHNOLOGY
ELECTRONICS (6.4%)
Austria Mikro System
International ................... 4,000 202,668
Cisco Systems, Inc.* ............. 559,950 31,217,213
EMC Corp.* ....................... 60,000 1,646,250
Enplas Corp. ..................... 56,000 755,394
Fujimi, Inc. ..................... 26,300 1,118,720
Hoya Corp. ....................... 76,000 2,388,197
Micronics Japan Co. Ltd. ......... 68,000 1,172,638
Navia ASA* ....................... 80,000 281,621
Network Associates, Inc.* ........ 116,000 6,133,500
Nikon Corp. ...................... 138,000 1,364,399
Rohm Co. Ltd. .................... 25,000 2,548,381
Sankyo Engineering Co. ........... 1,000 3,066
Sanmina Corp.* ................... 44,000 2,981,000
SCI Systems, Inc.* ............... 3,400 148,113
35
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GLOBAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
===============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
Solectron Corp.* ................. 57,200 $ 2,377,375
Sterling Commerce, Inc.* ......... 252,660 9,711,619
TDK Corp. ........................ 59,000 4,449,588
Teradyne, Inc.* .................. 44,000 1,408,000
Tokyo Cathode Laboratory Co.* .... 28,600 282,767
Tokyo Electron ................... 10,000 320,368
TOWA Corp. ....................... 18,600 386,327
Yamaichi Electronics Co. Ltd. ... 27,000 434,566
Yokogawa Electric Corp. .......... 353,000 2,180,632
3Com Corp.* ...................... 127,700 4,461,519
--------------
77,973,921
--------------
OFFICE EQUIPMENT (2.7%)
Canon, Inc. ...................... 38,000 885,380
Ceridian Corp.* .................. 342,700 15,699,944
Ricoh Elemex Corp. ............... 30,000 218,433
Sterling Software, Inc.* ......... 383,600 15,727,600
--------------
32,531,357
--------------
OFFICE EQUIPMENT SERVICES (0.7%)
Data Communication System Co. .... 63,000 830,504
Fuji Soft ABC, Inc. .............. 50,910 1,744,148
INES Corp. ....................... 59,000 456,716
Misys (Jersey) Ltd.* ............. 34,285 1,036,669
Misys PLC ........................ 120,000 3,628,416
Nippon System Development ........ 44,000 903,775
Turbon International AG .......... 27,500 594,652
--------------
9,194,880
--------------
TELECOMMUNICATIONS (7.2%)
Brooks Fiber Properties, Inc.* .. 139,500 7,672,500
Corecomm, Inc.* .................. 7,600 76,950
DDI Corp. ........................ 384 1,015,367
DSC Communications Corp.* ........ 64,000 1,528,000
Energis PLC* ..................... 964,000 4,039,571
E.R.G. Limited ................... 2,167,360 1,821,382
Filtronic Comtek PLC ............. 1,199,000 8,718,675
MCI Communications Corp. ......... 366,000 15,669,375
NetCom Systems AB
(B Shares)*+ .................... 85,000 1,825,275
Nextel Communications, Inc.
(Class A)* ...................... 207,700 5,400,200
SK Telecom Co. Ltd. (ADR)* ...... 373,437 2,427,339
Tadiran Telecommunications Ltd. .. 130,000 1,803,750
Tele-Communications TCI Ventures
Group (Class A)* ................ 345,175 9,772,767
United States Cellular Corp.* ... 38,600 1,196,600
Videsh Sanchar Nigam Ltd. (GDR)*+ 12,000 167,160
Vodafone Group PLC ............... 700,000 5,049,874
WorldCom, Inc.* .................. 681,404 20,612,471
--------------
88,797,256
--------------
TOTAL TECHNOLOGY (17.0%) ........ 208,497,414
--------------
DIVERSIFIED
MISCELLANEOUS (1.4%)
BTR PLC .......................... 170,000 514,026
Cie Generale de Eaux ............. 30,000 4,187,090
Corp Financiera Reunida SA* ..... 60,000 320,971
Crean (James) PLC--Units ......... 495,000 1,007,128
Hanson PLC ....................... 62,500 278,977
Indonesia Fund, Inc.* ............ 20,000 92,500
International UNP Holdings* ..... 450,000 $ 37,777
International UNP
Holdings--Warrants* ............. 225,000 0
Lippo China Resources Ltd. ...... 2,000,000 294,232
Mitsubishi Corp. ................. 42,000 331,558
Sime Darby BHD ................... 800,000 769,251
Swire Pacific Ltd. (Class A) .... 140,000 767,841
Taiwan Fund, Inc. ................ 15,000 247,500
Tomkins PLC ...................... 300,000 1,434,605
Tyco International Ltd. .......... 154,984 6,983,966
--------------
TOTAL DIVERSIFIED (1.4%) ........ 17,267,422
--------------
TOTAL COMMON STOCKS AND OTHER
INVESTMENTS (91.0%)
(Cost $973,440,400) ............. 1,115,718,598
--------------
PREFERRED STOCKS:
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (0.1%)
Republic Industries, Inc.
6.5% Exch. Conv. ................ 50,000 1,175,000
--------------
PRINTING, PUBLISHING &
BROADCASTING (0.1%)
ProSieben Media AG* .............. 25,000 1,146,502
--------------
TOTAL BUSINESS SERVICES (0.2%) .. 2,321,502
--------------
CONSUMER CYCLICALS
LEISURE RELATED (0.1%)
Village Roadshow Ltd. ............ 440,000 904,628
--------------
RETAIL--GENERAL (0.0%)
Fielmann AG ...................... 6,000 130,076
--------------
TOTAL CONSUMER CYCLICALS (0.1%) 1,034,704
--------------
CONSUMER NONCYCLICALS
CONTAINERS (0.0%)
Dixie Toga SA* ................... 228,000 116,447
--------------
HOSPITAL SUPPLIES & SERVICES (0.1%)
Fresenius AG ..................... 3,100 563,495
--------------
TOTAL CONSUMER NONCYCLICALS (0.1%) 679,942
--------------
TECHNOLOGY
TELECOMMUNICATIONS (0.4%)
Nokia Oyj (A Shares) ............. 44,000 3,123,859
WorldCom, Inc.
8.0% Conv. ...................... 22,000 2,310,000
--------------
TOTAL TECHNOLOGY (0.4%) ......... 5,433,859
--------------
TOTAL PREFERRED STOCKS (0.8%)
(Cost $6,622,322) .............. 9,470,007
--------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
------
<S> <C> <C>
LONG-TERM DEBT SECURITIES:
CONSUMER NONCYCLICALS (0.1%)
FOODS
Burns, Philp & Co. Ltd.
5.5% Conv., 04/30/04 ............ $2,000,000 1,100,000
--------------
CREDIT SENSITIVE (0.0%)
BANKS
Grupo Financiero Banorte
Zero Coupon, 12/05/02 ........... 1,657 20,558
--------------
</TABLE>
36
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GLOBAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1997
<TABLE>
<CAPTION>
============================================================
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- ------------------------------------------------------------
<S> <C> <C>
TECHNOLOGY (0.1%)
ELECTRONICS
Altera Corp.
5.75% Conv. Sub. Note,
06/15/02+ .................... $ 1,055,000 $ 1,447,988
--------------
DIVERSIFIED (0.0%)
MISCELLANEOUS
Brierley Investments Ltd.
9.0% Conv. Sub. Note,
06/30/98...................... 27,900 18,144
--------------
TOTAL LONG-TERM DEBT SECURITIES (0.2%)
(Amortized Cost $3,073,944) . 2,586,690
--------------
SHORT-TERM DEBT SECURITIES:
U.S. GOVERNMENT AGENCIES (7.7%)
Federal Home Loan Mortgage
Corp.
6.0%, due 01/02/98 ........... 93,900,000 93,884,350
--------------
TOTAL SHORT-TERM DEBT SECURITIES (7.7%)
(Amortized Cost $93,884,350) 93,884,350
--------------
TOTAL INVESTMENTS (99.7%)
(Cost/Amortized Cost $1,077,021,016) 1,221,659,645
OTHER ASSETS
LESS LIABILITIES (0.3%) ..... 3,727,350
--------------
NET ASSETS (100.0%) ........... $1,225,386,995
==============
</TABLE>
- ------------
* Non-income producing.
+ Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may only be resold to qualified institutional
buyers. At December 31, 1997, these securities amounted to $36,393,721
or 3.0% of net assets.
Glossary:
ADR--American Depository Receipt
GDR--Global Depository Receipt
See Notes to Financial Statements.
37
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE INTERNATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
==============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS AND OTHER
INVESTMENTS:
ARGENTINA (0.1%)
Quilmes Industrial Quins (ADR) ... 15,000 $ 205,314
----------
AUSTRALIA
AAPC Ltd. ........................ 180,000 73,874
Aristocrat Leisure Ltd. .......... 10,000 19,870
Brambles Industries Ltd. ......... 60,000 1,190,197
Broken Hill Proprietary Co. Ltd. . 30,000 278,494
Cochlear Ltd. .................... 8,000 26,058
E.R.G. Limited ................... 825,000 693,304
GIO Australia Holdings Ltd. ..... 200,000 511,127
Great Central Mines Ltd. ......... 60,000 64,493
Hoyts Cinemas Group + ............ 450,000 791,510
National Australia Bank Ltd. .... 4,900 68,407
News Corp. Ltd. .................. 5,900 32,555
Oil Search Ltd. .................. 360,000 650,563
Orogen Minerals Ltd. (GDR) + .... 50,000 977,600
QBE Insurance Group Ltd. ......... 82,064 369,251
QCT Resources Ltd. ............... 200,000 161,559
Southern Pacific Petroleum* ..... 250,000 447,871
Spectrum Network Systems Ltd.*+ .. 595,338 127,985
Suncorp-Metway Ltd.* ............. 297,321 745,704
Westralian Sands Ltd. ............ 11,472 26,904
WMC Ltd. ......................... 22,000 76,676
----------
TOTAL AUSTRALIA (3.8%) .......... 7,334,002
----------
AUSTRIA
Erste Bank Der Oesterreichischen
Sparkassen AG* .................. 5,610 279,579
EVN AG............................ 800 105,134
KTM Motorradholding AG* .......... 10,000 505,086
OMV AG ........................... 3,000 415,628
VA Technologie AG ................ 1,000 151,843
----------
TOTAL AUSTRIA (0.8%) ............ 1,457,270
----------
BELGIUM
Electrabel SA..................... 250 57,826
Petrofina SA ..................... 110 40,600
Tractebel Investment
International Capital ........... 350 30,513
Tractebel Investment
International Capital-Warrants* . 70 0
Virgin Express Holdings PLC
(ADR)* .......................... 50,000 1,037,500
----------
TOTAL BELGIUM (0.6%) ............ 1,166,439
----------
BRAZIL (0.8%)
Cia Paranaense de Energia-Copel
(ADR) ........................... 115,000 1,574,064
----------
CANADA
Canadian Fracmaster Ltd.*+ ...... 214,300 1,799,014
Cinar Films, Inc. (Class B)* .... 8,000 307,000
Fairfax Financial Holdings Ltd.* 1,000 223,862
Leitch Technology Corp.* ......... 20,000 601,630
Renaissance Energy Ltd.* ......... 25,000 515,933
Rofin-Sinar Technologies, Inc.* . 40,000 485,000
----------
TOTAL CANADA (2.0%) ............. 3,932,439
----------
CHILE
Enersis S.A. (ADR) ............... 1,000 $ 29,000
Santa Isabel S.A. (ADR) .......... 8,000 140,000
----------
TOTAL CHILE (0.1%) .............. 169,000
----------
DENMARK
Carli Gry International A/S ..... 15,600 876,545
Coloplast A/S B .................. 6,000 464,105
Novo-Nordisk A/S (B Shares) ..... 5,000 715,130
Scandinavian Mobility
International A/S ............... 5,000 45,973
----------
TOTAL DENMARK (1.1%) ............ 2,101,753
----------
FINLAND
Hartwall Oy AB ................... 12,200 1,007,164
KCI Konecranes International .... 18,000 594,392
Kesko ............................ 20,000 316,275
Nokia Oyj (A Shares) ............. 3,000 210,000
Orion-Yhtyma Oy (B Shares) ...... 56,000 1,479,375
Rauma Oy ......................... 13,900 216,751
----------
TOTAL FINLAND (2.0%) ............ 3,823,957
----------
FRANCE
Accor SA ......................... 8,000 1,487,414
Alcatel Alsthom .................. 3,500 444,878
Banque Nationale de Paris ........ 700 37,207
Bouygues Offshore SA (ADR) ...... 36,000 783,000
Canal Plus ....................... 3,000 557,780
Carrefour ........................ 225 117,388
Cie Financiere de Paribas A ..... 750 65,174
Cie Generale de Eaux ............. 7,000 976,988
Cie Generale de Geophysique SA
(ADR)* .......................... 80,000 2,050,000
Cie de St. Gobain ................ 250 35,515
Coflexip (ADR) ................... 3,000 166,500
EDAP TMS SA (ADR)* ............... 123,000 861,000
Elf Aquitaine .................... 7,000 814,156
Groupe Danone .................... 500 89,308
Havas ............................ 350 25,181
Lafarge SA ....................... 6,130 402,216
L'Air Liquide .................... 550 86,085
L'Oreal .......................... 495 193,690
Louis Dreyfus Citrus ............. 20,300 620,620
Michelin (CGDE), (Class B) ...... 7,000 352,413
Moulinex* ........................ 38,000 938,872
Peugeot SA ....................... 250 31,528
Pinault Printemps ................ 150 80,028
Schneider SA ..................... 800 43,439
Seita ............................ 18,000 646,008
Societe Generale ................. 550 74,936
S.T. Dupont*+ .................... 34,900 456,944
Suez Lyonnaise des Eaux .......... 400 44,264
----------
TOTAL FRANCE (6.4%) ............. 12,482,532
----------
GERMANY
Allianz AG ....................... 1,500 386,892
Apcoa Parking AG+ ................ 800 58,701
Bayer AG ......................... 4,500 166,972
B.U.S. Berzelius Umwelt-Service
AG .............................. 28,000 373,551
Daimler-Benz AG .................. 2,000 141,193
38
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE INTERNATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
==============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------------------------------------
Deutsche Bank AG ................. 3,250 $ 227,271
Dresdner Bank AG ................. 2,850 129,592
Gerresheimer Glas AG ............. 30,000 420,245
Linde AG ......................... 50 30,323
Lufthansa AG ..................... 54,500 1,023,986
Pfeiffer Vacuum Technology (ADR)* 10,000 280,000
RWE AG ........................... 1,850 99,238
SAP AG ........................... 500 151,616
Schering AG ...................... 400 38,578
SGL Carbon AG+ ................... 8,000 1,022,819
Siemens AG ....................... 2,500 150,782
SKW Trostberg AG ................. 3,000 95,222
Thyssen AG ....................... 150 32,019
Turbon International AG .......... 3,000 64,871
Veba AG .......................... 5,150 350,691
Viag AG .......................... 150 82,131
----------
TOTAL GERMANY (2.8%) ............ 5,326,693
----------
GREECE
A.G. Petzetakis SA* .............. 200,000 1,077,237
Hellenic Telecommunication
Organization SA ................. 15,120 309,788
----------
TOTAL GREECE (0.7%) ............. 1,387,025
----------
HONG KONG
Aeon Credit Service (Asia) Co.
Ltd. ............................ 924,000 202,710
Cheung Kong Holdings ............. 50,000 327,462
Cosco Pacific Ltd. ............... 80,000 65,041
Giordano International Ltd.* .... 200,000 69,041
Hang Seng Bank ................... 5,000 48,232
HSBC Holdings PLC (H.K. $) ...... 14,000 345,077
Hutchison Whampoa ................ 12,000 75,261
JCG Holdings ..................... 250,000 107,272
Swire Pacific Ltd. (Class A) ..... 40,000 219,383
Television Broadcasts Ltd. ...... 86,000 245,270
----------
TOTAL HONG KONG (0.9%) .......... 1,704,749
----------
HUNGARY (0.9%)
Magyar Tavkozlesi Rt (ADR)* ..... 70,000 1,820,000
----------
INDIA
Videsh Sanchar Nigam Ltd. (GDR)* 45,000 581,625
Videsh Sanchar Nigam Ltd. (GDR)*+ 2,000 27,860
----------
TOTAL INDIA (0.3%) .............. 609,485
----------
INDONESIA
Gulf Indonesia Resources Ltd.* .. 51,200 1,126,400
PT Bunas Finance Indonesia ...... 200,000 11,818
PT Citatah ....................... 377,500 49,761
PT Great River International .... 1,367,000 111,845
PT Indosat (ADR) ................. 12,000 231,750
----------
TOTAL INDONESIA (0.8%) .......... 1,531,574
----------
IRELAND
Avonmore Waterford Group PLC .... 464,000 1,703,261
Crean (James) PLC--Units ......... 60,000 122,076
Fyffes PLC ....................... 900,000 1,344,545
Irish Life PLC ................... 200,000 1,136,049
Irish Continental Group PLC ...... 20,000 244,721
----------
TOTAL IRELAND (2.3%) ............ 4,550,652
----------
ISRAEL (0.1%)
Home Centers Ltd.* ............... 15,400 $ 169,400
----------
ITALY
Assicurazioni Generali ........... 5,500 135,090
Banca Commerciale Italiana ...... 10,000 34,765
Danieli & Co. .................... 24,800 170,334
Esaote Biomedica Spa ............. 64,000 169,497
Fiat Spa ......................... 22,000 63,985
Gildemeister Italiana Spa* ...... 42,875 145,664
Industrie Natuzzi Spa (ADR) ..... 20,000 412,500
Istituto Mobiliare Italiano ..... 2,500 29,678
Istituto Naz Delle Assicurazioni 22,500 45,598
Mediaset Spa ..................... 140,000 687,733
Mediolanum Spa + ................. 4,000 75,297
Parmalat Finanziaria Spa ......... 300,000 429,056
Telecom Italia Spa ............... 2,775 17,726
Zucchini Spa ..................... 70,000 502,544
----------
TOTAL ITALY (1.5%) .............. 2,919,467
----------
JAPAN
Aiful Corp.* ..................... 13,800 936,041
Akita Bank ....................... 23,000 89,902
Asahi Bank Ltd. .................. 32,000 129,987
Asahi Diamond Industry Co. Ltd. . 24,000 104,664
Asahi Glass Co. Ltd. ............. 10,000 47,519
Asatsu, Inc. ..................... 17,200 247,833
Bank of Tokyo-Mitsubishi Ltd. ... 70,000 965,702
Bridgestone Corp. ................ 4,000 86,760
Bridgestone Metalpha Corp. ...... 9,000 33,455
Canon, Inc. ...................... 13,000 302,893
Capcom Co. Ltd. .................. 2,600 26,702
Credit Saison Co. ................ 63,000 1,554,781
Daibiru Corp. .................... 14,000 102,472
Dai-Ichi Kangyo Bank ............. 86,000 507,530
Dai Nippon Printing Co. Ltd. .... 3,000 56,333
Daiseki Co. Ltd. ................. 6,400 66,220
Daito Trust Construction Co.
Ltd.............................. 22,000 134,386
Daiwa House Industry Co. Ltd. .... 2,000 10,577
Data Communication System Co. .... 21,000 276,835
DDI Corp. ........................ 115 304,081
Denso Corp. ...................... 4,000 72,044
Doshisha Co. ..................... 1,000 4,905
Eiden Sakakiya Co. Ltd. .......... 18,000 66,909
Enplas Corp. ..................... 19,000 256,294
Enshu* ........................... 34,000 42,476
Familymart Co. ................... 19,000 681,510
Fanuc Ltd......................... 900 34,075
Fuji Bank Ltd. ................... 11,000 44,514
Fuji Soft ABC, Inc. .............. 16,400 561,855
Fujikura Ltd. .................... 104,000 688,684
Fujimi, Inc. ..................... 8,600 365,817
H.I.S. Company Ltd. .............. 1,100 19,138
Hitachi Ltd. ..................... 16,000 114,045
Hitachi Plant Engineering &
Construction Co. ................ 18,000 40,146
Homac Corp. ...................... 7,000 35,355
Home Wide Corp. .................. 15,000 50,010
Honda Motor Co. Ltd............... 5,000 183,560
Hoya Corp. ....................... 24,000 754,167
Imagineer Co. Ltd. ............... 13,000 101,629
39
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE INTERNATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
==============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------------------------------------
Industrial Bank of Japan ......... 9,000 $ 64,150
INES Corp. ....................... 20,000 154,819
Isetan Co. ....................... 63,000 263,154
Ishihara Sangyo Kaisha Ltd.* .... 62,000 68,902
Ishikawajima Harima Heavy
Industries Co. Ltd. ............. 62,000 92,661
Ito Yokado Co. Ltd. .............. 2,000 101,935
Japan Airport Terminal Co. Ltd. .. 53,000 333,091
Japan Industrial Land Development 13,000 31,385
Japan Tobacco, Inc. .............. 45 319,372
Kaneshita Construction ........... 12,000 54,263
Kawasaki Heavy Industries Ltd. .. 96,000 148,626
Kawasaki Steel Corp............... 10,000 13,642
Keyence Corp. .................... 200 29,584
Kikuchi Co. Ltd.* ................ 10,000 30,274
King Co. ......................... 38,000 36,405
Kirin Brewery Co. ................ 4,000 29,124
Koa Fire & Marine ................ 10,000 37,555
Kokuyo Co. Ltd. .................. 13,000 224,181
Komatsu Ltd. ..................... 4,000 20,080
Kubota Corp. ..................... 6,000 15,819
Mabuchi Motor Co. ................ 8,600 437,003
Matsuda Sangyo Co. Ltd. .......... 8,000 48,316
Meitec ........................... 51,000 1,434,528
Micronics Japan Co. Ltd. ......... 18,000 310,404
Minebea Co. ...................... 70,000 751,102
Misawa Ceramic Corp. ............. 16,000 39,241
Mitsubishi Corp. ................. 14,000 110,519
Mitsubishi Estate Co. ............ 10,000 108,833
Mitsubishi Heavy Industries Ltd. . 110,000 458,632
Mitsubishi Materials Corp. ...... 6,000 9,657
Mitsubishi Trust & Banking Corp. 31,000 311,247
Mitsui & Co. ..................... 6,000 35,501
Mitsui Home Co. Ltd. ............. 24,000 130,600
NAMCO Ltd. ....................... 5,200 151,048
Namura Shipbuilding .............. 14,000 31,654
Nanno Construction Co. Ltd. ..... 15,000 12,071
NGK Spark Plug Co. ............... 40,000 226,863
NIC Corp. ........................ 42,000 228,550
Nichiei Co. Ltd. ................. 3,900 415,482
Nichiha Corp. .................... 54,400 332,717
Nichii Gakkan Co.* ............... 14,000 482,851
Nikon Corp. ...................... 45,000 444,913
Nintendo Co. Ltd.................. 4,000 392,412
Nippon Broadcasting System ...... 18,000 711,861
Nippon Denwa Shisetsu ............ 22,000 84,307
Nippon Paper Industries Co. ..... 20,000 78,482
Nippon Steel Corp. ............... 27,000 39,939
Nippon System Development ........ 12,000 246,484
Nippon Television Network Corp. . 1,800 528,377
Nireco ........................... 13,000 47,825
Nitta Corp. ...................... 31,000 313,623
Nitto Kohki Co. Ltd. ............. 25,200 274,259
Nomura Securities Co. ............ 8,000 106,687
Noritsu Koki Co. Ltd. ............ 34,600 853,895
Ohmoto Gumi Co. Ltd. ............. 10,000 42,920
Oie Sangyo Co. Ltd. .............. 13,000 53,803
Oji Paper Co. Ltd. ............... 14,000 55,689
Oriental Construction Co. ........ 9,000 39,318
Paris Miki, Inc. ................. 31,000 $ 332,631
PS Corp. ......................... 18,900 71,703
Raito Kogyo Co. Ltd. ............. 40,000 173,213
Ricoh Elemex Corp. ............... 9,000 65,530
Rohm Co. Ltd. .................... 8,000 815,482
Sankyo Co. Ltd. .................. 38,000 859,168
Santen Pharmaceutical Co. Ltd. .. 88,000 1,011,688
Sanyo Chemicals Industries Ltd. .. 9,000 52,424
Sanyo Electric Co. Ltd. .......... 44,000 114,658
Sanyo Engineering & Construction
Co. ............................. 22,000 79,249
Sanyo Pax Co. Ltd. ............... 24,000 207,856
Sanyo Shinpan Finance Co. Ltd. .. 6,200 274,183
Sato Corp. ....................... 38,500 655,068
Sekisui House Ltd. ............... 3,000 19,291
Seven-Eleven Japan Co. Ltd. ..... 14,200 1,005,618
Shimizu Corp. .................... 3,000 6,944
Shizuoka Bank Ltd. ............... 23,000 246,791
Sho Bond Corp. ................... 42,500 768,730
Sodick Co.* ...................... 100,000 286,645
Sony Corp. ....................... 1,000 88,906
SMC Corp. ........................ 9,100 802,069
Suido Kiko Kaisha ................ 8,000 16,064
Sumitomo Bank Ltd. ............... 90,000 1,027,783
Sumitomo Forestry Co. ............ 10,000 48,668
Sumitomo Metal Industries ........ 212,000 271,347
Sumitomo Realty & Development Co.
Ltd. ............................ 109,000 626,557
Taisei Corp. ..................... 4,000 6,561
Taisho Pharmaceutical Co. ........ 20,000 510,443
Takara Printing Co. .............. 12,000 35,869
Takefuji Corp. ................... 26,060 1,196,393
Takihyo Co. Ltd. ................. 14,000 61,161
TDK Corp. ........................ 18,000 1,357,501
Toda Corp. ....................... 14,000 38,092
Toei Co. Ltd. .................... 26,000 94,654
Toho Bank ........................ 40,000 159,418
Toho Titanium* ................... 38,000 320,368
Tokio Marine & Fire Insurance Co. 6,000 68,059
Tokyo Broadcasting System, Inc. .. 35,000 442,614
Tokyo Cathode Laboratory Co.* .... 19,700 194,773
Tokyo Electric Power Co. ......... 7,000 127,687
Tokyo Electron ................... 1,000 32,037
Toso Co. Ltd. .................... 18,000 82,085
TOWA Corp. ....................... 5,300 110,082
Toyoda Gosei ..................... 20,000 72,351
Wesco, Inc. ...................... 6,200 15,206
Xebio Co. Ltd. ................... 3,200 25,507
Yamaichi Electronics Co. Ltd. .... 22,000 354,091
Yamanouchi Pharmaceutical Co.
Ltd. ............................ 68,000 1,459,283
Yamato Transport Co. Ltd.......... 6,000 80,475
Yaskawa Electric Corp. ........... 10,000 24,909
Yokogawa Electric Corp. .......... 96,000 593,033
-----------
TOTAL JAPAN (20.6%) ............. 39,943,359
-----------
MALAYSIA
AMMB Holdings BHD ................ 50,000 32,781
Arab Malaysian Finance BHD ...... 140,000 28,076
Guinness Anchor BHD .............. 30,000 37,023
Hong Leong Bank BHD .............. 140,000 92,146
40
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE INTERNATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
==============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------------------------------------
IOI Corp. BHD .................... 100,000 $ 32,395
Kim Hin Industry BHD ............. 12,000 2,113
Kumpulan Guthrie BHD ............. 33,000 21,211
Lingkaran Trans Kota Holdings
BHD* ............................ 130,000 82,890
Magnum Corp. BHD ................. 74,000 44,520
Malayan Banking BHD .............. 24,000 69,726
Mancon BHD ....................... 76,666 27,793
Metacorp BHD ..................... 120,000 50,906
Pacific & Orient BHD ............. 80,000 36,611
Pernas International Hotels
Holdings BHD .................... 462,000 128,284
Resorts World BHD ................ 20,000 33,680
RJ Reynolds BHD .................. 70,000 114,282
Sap Holdings BHD.................. 36,000 13,421
Sime Darby BHD ................... 150,000 144,234
Sriwani Holdings BHD ............. 180,000 47,667
Star Publications BHD ............ 25,000 28,538
Talam Corp. BHD .................. 315,000 74,508
Tanjong PLC ...................... 100,000 165,831
UMW Holdings BHD ................. 150,000 113,768
-----------
TOTAL MALAYSIA (0.7%) ........... 1,422,404
-----------
MEXICO
Bufete Industrial S.A.* .......... 10,000 97,500
Elamex S.A. de C.V.* ............. 32,600 244,500
Grupo Electra S.A. de C.V. ...... 500,000 882,134
Grupo Financiero Banamex Accival
(B Shares)* ..................... 50,000 149,504
Grupo Industrial Saltillo SA
(B Shares)....................... 236,000 898,908
Industrias CH S.A. (B Shares)* .. 120,000 714,640
Kimberly-Clark de Mexico S.A. de
C.V. ............................ 30,000 710,757
Panamerican Beverages, Inc. ..... 10,000 326,250
Sanluis Corporacion S.A. de
C.V.*............................ 28,000 227,543
-----------
TOTAL MEXICO (2.2%) ............. 4,251,736
-----------
NETHERLANDS
ABN Amro Holding N.V. ............ 5,824 113,455
Aegon N.V. ....................... 8,000 712,154
Akzo Nobel N.V. .................. 3,000 517,249
ASR Verzekeringsgroep N.V. ...... 21,400 1,164,116
Content Beheer N.V. + ............ 30,000 739,773
Elsevier N.V. .................... 16,955 274,270
Fortis Amev N.V. ................. 10,000 435,973
Fugro N.V.* ...................... 30,000 914,359
Gucci Group N.V. ................. 2,000 83,750
Heineken N.V. .................... 233 40,564
Hunter Douglas N.V. .............. 6,000 210,095
IHC Caland N.V. .................. 4,000 207,531
ING Groep N.V. ................... 28,000 1,179,296
KLM .............................. 1,700 62,881
Koninklijke Nedlloyd Groep N.V.+ . 2,250 51,044
Kon. PTT Nederland + ............. 8,000 333,785
Nutricia Verenigde Bedrijven
N.V.+ ........................... 19,000 576,283
Royal Dutch Petroleum ............ 9,948 546,057
Unilever N.V. CVA ................ 2,968 182,970
Unique International N.V. ........ 30,000 639,164
Vedior N.V. CVA................... 70,000 1,260,079
Vendex International N.V. ........ 3,600 198,673
-----------
TOTAL NETHERLANDS (5.4%) ........ 10,443,521
-----------
NEW ZEALAND
Air New Zealand Ltd. (B Shares) .. 109,000 $ 218,353
Restaurant Brands NZ Ltd.*+ ..... 312,500 308,470
Sky City Ltd. .................... 35,300 119,907
Tourism Holdings Ltd. ............ 15,000 10,277
Warehouse Group Ltd. ............. 110,000 293,809
-----------
TOTAL NEW ZEALAND (0.5%) ........ 950,816
-----------
NORWAY
Alvern Norway ASA* ............... 120,000 284,329
Choice Hotels Scandinavia ASA*+ . 472,500 1,599,353
Frontline Ltd.* .................. 300,000 1,210,431
Hafslund ASA ..................... 5,000 23,830
Navia ASA* ....................... 94,000 330,905
Norsk Hydro ASA .................. 1,100 53,542
Tomra Systems ASA ................ 58,000 1,295,730
Union Bank of Norway ............. 12,000 427,306
-----------
TOTAL NORWAY (2.7%) ............. 5,225,426
-----------
PANAMA (0.4%)
Banco Latinoamericano de
Exportaciones S.A.
(E Shares) ...................... 20,000 827,500
-----------
PERU (0.7%)
Telefonica del Peru S.A. (ADR) .. 54,000 1,258,875
-----------
POLAND (0.7%)
@Entertainment, Inc.* ............ 117,000 1,301,625
-----------
PORTUGAL
BPI-SGPS SA* ..................... 20,000 486,281
Brisa-Auto Estradas de Portugal
SA* ............................. 5,600 200,602
Electricidade de Portugal SA* .... 38,105 721,521
Portugal Telecom SA .............. 8,710 404,148
Telecel Comunicacoes Pessoais SA* 13,290 1,416,011
-----------
TOTAL PORTUGAL (1.7%) ........... 3,228,563
-----------
SINGAPORE
City Developments Ltd. ........... 50,000 231,936
GP Batteries International Ltd. . 140,000 364,674
Great Eastern Life Assurance Co. . 7,000 42,046
Keppel Fels Ltd. ................. 88,000 245,971
Singapore Airlines Ltd. .......... 50,000 327,089
Singapore Land Ltd. .............. 93,000 204,639
United Overseas Bank Ltd. ........ 40,000 222,420
-----------
TOTAL SINGAPORE (0.8%) .......... 1,638,775
-----------
SOUTH KOREA (0.2%)
SK Telecom Co. Ltd. (ADR)*........ 65,776 427,544
-----------
SPAIN
Aldeasa SA* ...................... 24,745 524,623
Aguas de Barcelona ............... 6,060 249,798
Banco Bilbao Vizcaya SA .......... 4,881 157,948
Banco de Valencia ................ 30,000 648,835
Banco Santander SA ............... 3,468 115,867
Catalana Occidente SA + .......... 15,600 794,591
Catalana Occidente SA ............ 5,400 275,051
Construcciones y Auxiliar de
Ferrocarriles SA ................ 500 18,444
Corp Financiera Reunida SA* ..... 100,000 534,952
Corporacion Mapfre Cia Inter SA .. 36,000 954,644
41
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE INTERNATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
==============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------------------------------------
Endesa SA......................... 4,488 $ 79,685
Gas Y Electridad SA (Series 2) .. 14,000 1,010,830
Hidroelectrica del Cantabrico ... 10,000 438,464
Iberdrola SA ..................... 35,668 469,408
Portland Valderrivas SA .......... 3,800 341,713
Repsol SA ........................ 4,392 187,384
Tabacalera SA-A .................. 12,200 988,973
Telefonica de Espana ............. 26,528 757,445
----------
TOTAL SPAIN (4.4%) .............. 8,548,655
----------
SWEDEN
Astra AB (A Shares) .............. 20,000 346,352
Castellum AB* .................... 79,000 786,030
Dahl International AB + .......... 32,000 471,542
Ericsson LM (B Shares) ........... 6,400 240,608
Forenings Sparbanken AB
(A Shares) ...................... 10,000 227,333
Kalmar Industries AB + ........... 10,000 161,211
Karlshamns AB*+ .................. 38,000 593,458
NetCom Systems AB (B Shares)* ... 25,650 550,804
Scandic Hotels AB*+ .............. 73,600 1,798,310
Skandia Forsakrings AB ........... 11,000 518,835
Skandinaviska Enskilda Banken
(Series A) ...................... 95,120 1,203,990
Swedish Match AB ................. 254,700 850,080
----------
TOTAL SWEDEN (4.0%) ............. 7,748,553
----------
SWITZERLAND
ABB AG ........................... 200 251,284
Ciba Specialty Chemicals AG* .... 8,600 1,024,581
Credit Suisse Group .............. 1,250 193,427
Nestle SA ........................ 300 449,641
Novartis AG ...................... 542 879,521
Roche Holding AG Genusscheine .... 80 794,522
Schweizerische
Rueckversicherungs-Gesellschaft . 120 224,471
Selecta Group* ................... 10,400 1,395,687
Tag Heuer International SA (ADR)* 35,000 288,750
Union Bank of Switzerland ........ 120 173,530
----------
TOTAL SWITZERLAND (2.9%) ........ 5,675,414
----------
THAILAND
CMIC Finance & Securities Public
Co. Ltd. ........................ 51,000 0
Nation Multimedia Group
Public Co. Ltd................... 130,000 34,424
Thai Engine Manufacturing
Public Co. Ltd. ................. 70,000 117,757
----------
TOTAL THAILAND (0.1%) ........... 152,181
----------
UNITED KINGDOM
Amvescap PLC ..................... 80,000 687,559
Barclays PLC ..................... 24,000 638,128
Bass PLC ......................... 14,200 220,398
BG PLC ........................... 22,077 99,406
BG PLC 'B'* ...................... 25,021 11,924
BOC Group PLC .................... 2,591 42,621
Boots Co. PLC .................... 5,806 83,627
BPB PLC .......................... 70,000 391,106
British Aerospace ................ 2,120 60,444
British Airport Authority PLC ... 30,000 245,510
British Airways PLC............... 38,000 349,695
British Energy PLC ............... 240,000 $1,668,283
British Petroleum Co. PLC ........ 29,367 386,071
British Sky Broadcasting Group
PLC ............................. 8,097 60,675
British Telecommunications PLC ... 35,150 276,392
BTR PLC .......................... 21,470 64,918
Cable & Wireless PLC.............. 12,409 109,096
Cadbury Schweppes PLC ............ 5,961 60,097
Carlton Communications PLC ...... 167,300 1,292,147
Carpetright PLC .................. 50,000 377,960
Commercial Union PLC ............. 2,801 39,079
Compass Group PLC ................ 170,000 2,092,419
De La Rue PLC .................... 10,000 65,075
Diageo PLC ....................... 105,307 968,223
Dixons Group PLC ................. 120,000 1,204,871
EMI Group PLC .................... 50,000 417,399
Energis PLC* ..................... 275,000 1,152,367
Energy Group PLC ................. 4,456 49,208
Filtronic Comtek PLC ............. 180,000 1,308,892
Flextech PLC* .................... 46,000 398,370
General Accident PLC.............. 2,904 50,346
General Electric Co. PLC ......... 13,890 90,047
GKN PLC .......................... 2,089 42,808
Glaxo Wellcome PLC ............... 23,220 549,468
Granada Group PLC ................ 3,225 49,287
Great Universal Stores PLC ...... 3,970 50,038
HSBC Holdings PLC ................ 10,000 246,824
Hanson PLC ....................... 5,571 24,867
Harvey Nichols PLC ............... 70,000 218,559
Holliday Chemical Holdings PLC ... 400,000 1,511,840
House of Fraser PLC .............. 140,000 462,426
Imperial Chemical Industries PLC . 3,109 48,587
Imperial Tobacco Group PLC ...... 125,000 786,732
Jefferson Smurfit Group PLC ..... 200,000 555,437
Johnson Matthey PLC .............. 55,000 492,580
Kingfisher PLC ................... 4,084 56,911
Ladbroke Group PLC ............... 150,000 650,749
Land Securities PLC .............. 3,207 51,120
Legal & General Group PLC......... 7,475 65,349
Lloyds TSB Group PLC ............. 34,379 444,617
LucasVarity PLC .................. 160,000 565,297
Marks & Spencer PLC............... 17,109 168,411
McBride PLC ...................... 20,000 58,173
MEPC PLC ......................... 70,000 584,359
Mirror Group PLC ................. 40,000 128,178
Misys (Jersey) Ltd.*.............. 3,428 103,652
Misys PLC ........................ 12,000 362,842
National Grid Group PLC .......... 260,000 1,234,779
National Power PLC ............... 100,000 985,983
Norwich Union PLC* ............... 80,000 512,711
Peninsular & Oriental Steam
Navigation Co. .................. 3,314 37,713
Powerscreen International PLC .... 40,000 401,593
Prudential Corp. PLC.............. 8,019 96,724
Randgold Resources Ltd. (GDR)*+ . 30,300 159,075
Rank Group PLC ................... 12,574 70,047
Reed International PLC............ 60,000 601,449
Rentokil Initial PLC ............. 162,900 709,390
Rio Tinto PLC .................... 5,510 67,819
Shandwick International PLC ..... 80,000 54,229
42
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE INTERNATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1997
==============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------------------------------------
Smith & Nephew PLC ............... 55,000 $ 162,687
Smith (W.H.) Group PLC ........... 60,000 383,547
Smithkline Beecham PLC ........... 90,000 921,401
Tesco PLC ........................ 12,625 102,696
Thistle Hotels PLC ............... 94,000 244,959
Thorn PLC ........................ 102,857 267,060
Tomkins PLC ...................... 25,000 119,550
Unilever PLC...................... 19,628 168,047
Vodafone Group PLC................ 100,000 721,411
WPP Group PLC .................... 55,000 244,935
Zeneca Group PLC ................. 10,336 362,974
------------
TOTAL UNITED KINGDOM (16.4%) .... 31,872,243
------------
TOTAL COMMON STOCKS
AND OTHER INVESTMENTS (92.4%)
(Cost $191,125,818).............. 179,183,005
------------
PREFERRED STOCKS:
AUSTRALIA (0.2%)
Village Roadshow Ltd. ............ 160,000 328,956
------------
BRAZIL (0.0%)
Dixie Toga SA .................... 59,000 30,133
------------
FINLAND (0.2%)
Nokia Oyj (A Shares).............. 4,000 283,987
------------
GERMANY
Fielmann AG ...................... 4,000 86,717
Fresenius AG ..................... 1,200 218,127
ProSieben Media AG* .............. 7,000 321,021
------------
TOTAL GERMANY (0.3%) ............ 625,865
------------
TOTAL PREFERRED STOCKS (0.7%)
(Cost $1,410,542) ............... 1,268,941
------------
</TABLE>
<TABLE>
<CAPTION>
========================================================
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- --------------------------------------------------------
<S> <C> <C>
SHORT-TERM DEBT SECURITIES:
U.S. GOVERNMENT AGENCIES (1.3%)
Federal Home Loan Mortgage
Corp.
6.0%, due 01/02/98 ......... $2,500,000 $ 2,499,583
------------
TOTAL SHORT-TERM DEBT SECURITIES (1.3%)
(Amortized Cost
$2,499,583)................. 2,499,583
------------
TOTAL INVESTMENTS (94.4%)
(Cost/Amortized Cost $195,035,943) 182,951,529
OTHER ASSETS
LESS LIABILITIES (5.6%) ... 10,945,647
------------
NET ASSETS (100.0%) ......... $193,897,176
============
</TABLE>
- -----------------------------------------------------------------------------
MARKET SECTOR DIVERSIFICATION
As a Percentage of Total Equity Investments
<TABLE>
<CAPTION>
<S> <C>
Basic Materials ....... 5.1%
Business Services .... 8.9
Capital Goods ......... 8.1
Consumer Cyclicals .... 19.3
Consumer
Non-Cyclicals.......... 15.3
Credit Sensitive ...... 26.8
Diversified ........... 1.8
Energy ................ 5.6
Technology ............ 9.1
-----
100.0%
=====
</TABLE>
<PAGE>
- ------------
* Non-income producing.
+ Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may only be resold to qualified institutional
buyers. At December 31, 1997, these securities amounted to $12,924,625
or 6.7% of net assets.
Glossary:
ADR--American Depository Receipt
GDR--Global Depository Receipt
See Notes to Financial Statements.
43
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE AGGRESSIVE STOCK PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
====================================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS AND OTHER
INVESTMENTS:
BASIC MATERIALS
CHEMICALS--SPECIALTY (4.2%)
Crompton & Knowles Corp.+ ............ 5,200,000 $ 137,800,000
Cytec Industries, Inc.* .............. 1,275,000 59,845,312
--------------
197,645,312
--------------
METALS & MINING (1.5%)
Newmont Mining Corp. ................. 2,300,000 67,562,500
--------------
STEEL (0.9%)
AK Steel Holding Corp. ............... 419,600 7,421,675
Ispat International NV
(New York Registered Shares)* ...... 1,500,000 32,437,500
--------------
39,859,175
--------------
TOTAL BASIC MATERIALS (6.6%) ....... 305,066,987
--------------
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (2.4%)
USA Waste Services, Inc.* ............ 223,800 8,784,150
U.S. Filter Corp.* ................... 3,491,900 104,538,756
--------------
113,322,906
--------------
PRINTING, PUBLISHING &
BROADCASTING (3.7%)
Comcast Corp. (Class A) SPL .......... 5,500,000 173,593,750
--------------
PROFESSIONAL SERVICES (1.6%)
Cambridge Technology Partners, Inc.* 428,900 17,852,962
Corrections Corp. of America* ....... 1,100,000 40,768,750
TeleTech Holdings, Inc.* ............. 1,197,600 13,622,721
--------------
72,244,433
--------------
TOTAL BUSINESS SERVICES (7.7%) ..... 359,161,089
--------------
CONSUMER CYCLICALS
AIRLINES (10.1%)
Continental Airlines, Inc.
(Class B)*+ ......................... 4,438,200 213,588,375
Delta Air Lines, Inc. ................ 1,500,000 178,500,000
Northwest Airlines Corp.
(Class A)* .......................... 1,634,500 78,251,687
--------------
470,340,062
--------------
APPAREL, TEXTILE (6.1%)
Jones Apparel Group, Inc.* ........... 2,339,200 100,585,600
Mohawk Industries, Inc.* ............. 3,150,000 69,103,125
Tommy Hilfiger Corp.*+ ............... 1,939,500 68,124,937
UNIFI, Inc. .......................... 1,200,000 48,825,000
--------------
286,638,662
--------------
AUTO RELATED (7.6%)
Circuit City Stores, Inc.-CarMax
Group*+ ............................. 6,260,700 56,346,300
Republic Industries, Inc.* ........... 12,700,000 296,068,750
--------------
352,415,050
--------------
AUTOS & TRUCKS (0.7%)
Harley-Davidson, Inc. ................ 1,200,000 32,850,000
--------------
FOOD SERVICES, LODGING (6.4%)
Extended Stay America, Inc.* ......... 1,886,100 23,458,369
Florida Panthers Holdings, Inc.* .... 1,685,300 $ 29,071,425
Host Marriott Corp.* ................. 2,053,600 40,301,900
ITT Corp.* ........................... 2,300,000 190,612,500
Starbucks Corp.* ..................... 95,000 3,645,625
Suburban Lodges of America, Inc.*+ ... 904,000 12,034,500
--------------
299,124,319
--------------
<PAGE>
HOUSEHOLD FURNITURE,
APPLIANCES (1.0%)
Industrie Natuzzi Spa (ADR) .......... 2,240,700 46,214,438
--------------
LEISURE RELATED (1.8%)
Callaway Golf Company ................ 1,254,800 35,840,225
Promus Hotel Corp.* .................. 1,120,000 47,040,000
--------------
82,880,225
--------------
RETAIL--GENERAL (2.9%)
Pep Boys-Manny, Moe & Jack ........... 1,096,600 26,181,325
PETsMART, Inc.* ...................... 1,435,200 10,405,200
Proffitt's, Inc.* .................... 400,000 11,375,000
Tiffany & Co. ........................ 1,563,300 56,376,506
U.S. Office Products Co.* ............ 1,507,000 29,574,875
--------------
133,912,906
--------------
TOTAL CONSUMER CYCLICALS (36.6%) 1,704,375,662
--------------
CONSUMER NONCYCLICALS
DRUGS (6.2%)
Centocor, Inc.*+ ..................... 5,036,500 167,463,625
Genzyme Corp. (General Division)* .... 2,375,000 65,906,250
MedImmune, Inc.*+ .................... 1,339,800 57,443,925
--------------
290,813,800
--------------
HOSPITAL SUPPLIES &
SERVICES (0.7%)
Sun Healthcare Group, Inc.* .......... 1,649,900 31,966,813
--------------
SOAPS & TOILETRIES (0.9%)
Estee Lauder Companies
(Class A) ........................... 828,900 42,636,544
--------------
TOTAL CONSUMER NONCYCLICALS (7.8%) 365,417,157
--------------
CREDIT SENSITIVE
BANKS (0.8%)
GreenPoint Financial Corp. ........... 527,100 38,247,694
--------------
FINANCIAL SERVICES (4.0%)
Edwards (A.G.), Inc. ................. 1,050,000 41,737,500
Green Tree Financial Corp. ........... 1,822,400 47,724,100
Newcourt Credit Group, Inc. .......... 1,000,000 33,375,000
Paine Webber Group, Inc. ............. 1,200,000 41,475,000
PMI Group, Inc. ...................... 290,000 20,970,625
--------------
185,282,225
--------------
INSURANCE (4.6%)
AFLAC, Inc. .......................... 500,000 25,562,500
CNA Financial Corp.* ................. 1,493,700 190,820,175
--------------
216,382,675
--------------
REAL ESTATE (2.1%)
Security Capital Group, Inc.
(Class B)*+ ......................... 1,184,900 38,509,250
Vornado Realty Trust ................. 1,310,346 61,504,383
--------------
100,013,633
--------------
44
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE AGGRESSIVE STOCK PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
====================================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------------------------------------------
UTILITY--TELEPHONE (2.9%)
Telephone & Data Systems, Inc.+ ..... 2,863,300 $ 133,322,406
--------------
TOTAL CREDIT SENSITIVE (14.4%) . .. 673,248,633
--------------
ENERGY
OIL--DOMESTIC (1.7%)
Ultramar Diamond Shamrock Corp. ...... 1,090,200 34,750,125
Valero Energy Corp. .................. 1,450,000 45,584,375
--------------
80,334,500
--------------
OIL--SUPPLIES &
CONSTRUCTION (6.6%)
Diamond Offshore Drilling, Inc. ..... 4,000,000 192,500,000
Rowan Cos., Inc.* .................... 3,700,000 112,850,000
--------------
305,350,000
--------------
RAILROADS (1.7%)
Kansas City Southern Industries,
Inc.................................. 1,600,000 50,800,000
Wisconsin Central Transport Corp.* .. 1,300,000 30,387,500
--------------
81,187,500
--------------
TOTAL ENERGY (10.0%) ................ 466,872,000
--------------
TECHNOLOGY
ELECTRONICS (7.7%)
Altera Corp.* ........................ 1,197,500 39,667,188
Atmel Corp.* ......................... 1,347,000 25,003,688
KLA-Tencor Corp.* .................... 660,900 25,527,263
Network Associates, Inc.* ............ 1,548,100 81,855,787
Parametric Technology Corp.* ......... 785,100 37,194,113
Sterling Commerce, Inc.* ............. 1,674,800 64,375,125
Teradyne, Inc.* ...................... 1,016,100 32,515,200
Xilinx, Inc.* ........................ 1,477,200 51,794,325
--------------
357,932,689
--------------
OFFICE EQUIPMENT SERVICES (1.5%)
Comverse Technology, Inc.*+ .......... 1,859,500 $ 72,520,500
--------------
TELECOMMUNICATIONS (3.1%)
ADC Telecommunications, Inc.* ....... 796,700 33,262,225
American Satellite Network--Warrants* 49,450 0
Millicom International Cellular SA* .. 2,378,400 89,487,300
U.S. Cellular Corp.* ................. 658,300 20,407,300
--------------
143,156,825
--------------
TOTAL TECHNOLOGY (12.3%) ............ 573,610,014
--------------
TOTAL COMMON STOCKS AND OTHER
INVESTMENTS (95.4%)
(Cost $4,029,993,201) ............... 4,447,751,542
--------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
-------------
<S> <C> <C>
SHORT-TERM DEBT SECURITIES:
U.S. GOVERNMENT AGENCIES (0.8%)
Federal Home Loan Mortgage Corp.
6.0%, due 01/02/98 .................. $37,200,000 37,193,800
--------------
TOTAL SHORT-TERM DEBT SECURITIES (0.8%)
(Amortized Cost $37,193,800)......... 37,193,800
--------------
TOTAL INVESTMENTS (96.2%)
(Cost/Amortized Cost $4,067,187,001) 4,484,945,342
OTHER ASSETS
LESS LIABILITIES (3.8%).............. 178,311,961
--------------
NET ASSETS (100.0%) .................. $4,663,257,303
==============
</TABLE>
<PAGE>
- ------------
* Non-income producing.
+ Affiliated company as defined under the Investment Company Act of 1940
(See Note 6).
Glossary:
ADR--American Depository Receipt
See Notes to Financial Statements.
45
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE SMALL CAP GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
===========================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- -----------------------------------------------------------
<S> <C> <C>
COMMON STOCKS:
BASIC MATERIALS
CHEMICALS--SPECIALTY (3.7%)
Crompton & Knowles Corp. ......... 140,200 $ 3,715,300
Cytec Industries, Inc.* .......... 32,000 1,502,000
-----------
5,217,300
-----------
METALS & MINING (1.6%)
Century Aluminum Co. ............. 18,500 249,750
Gibraltar Steel Corp.* ........... 45,600 900,600
Kaiser Aluminum Corp.* ........... 119,700 1,054,856
-----------
2,205,206
-----------
STEEL (0.7%)
WHX Corp.* ....................... 87,300 1,036,687
-----------
TOTAL BASIC MATERIALS (6.0%) ... 8,459,193
-----------
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (3.5%)
American Disposal Services,
Inc.*............................ 35,400 1,292,100
Philip Services Corp.* ........... 70,200 1,009,125
Superior Services, Inc.* ......... 52,900 1,527,487
U.S. Filter Corp.* ............... 34,800 1,041,825
-----------
4,870,537
-----------
PRINTING, PUBLISHING &
BROADCASTING (5.7%)
Applied Graphics Technologies,
Inc.* ........................... 24,800 1,320,600
Mail-Well, Inc.* ................. 19,600 793,800
Sinclair Broadcast Group, Inc.* . 66,600 3,105,225
Westwood One, Inc.* .............. 17,900 664,537
Young Broadcasting Corp.
(Class A)* ...................... 56,600 2,193,250
-----------
8,077,412
-----------
PROFESSIONAL SERVICES (11.0%)
Carematrix Corp.* ................ 77,700 2,233,875
Consolidation Capital Corp.* .... 52,800 1,072,500
CORESTAFF, Inc.* ................. 72,500 1,921,250
Cornell Corrections, Inc.* ...... 56,000 1,162,000
Data Processing Resources Corp.* 73,600 1,876,800
Equity Corp. International* ..... 56,400 1,304,250
Ha-Lo Industries, Inc.* .......... 138,800 3,608,800
Snyder Communications, Inc.* .... 43,700 1,595,050
TeleTech Holdings, Inc.* ......... 61,100 695,013
-----------
15,469,538
-----------
TRUCKING, SHIPPING (3.0%)
C.H. Robinson Worldwide, Inc. ... 61,700 1,380,537
Knightsbridge Tankers Ltd. ...... 53,400 1,511,887
OMI Corp.* ....................... 150,000 1,378,125
-----------
4,270,549
-----------
TOTAL BUSINESS SERVICES (23.2%) 32,688,036
-----------
CAPITAL GOODS
AEROSPACE (0.9%)
DONCASTERS PLC (ADR)* ............ 56,300 1,189,337
-----------
BUILDING MATERIALS & FOREST
PRODUCTS (2.0%)
Buckeye Technologies, Inc.* ..... 31,500 $ 1,456,875
Hughes Supply, Inc. .............. 40,750 1,423,703
-----------
2,880,578
-----------
TOTAL CAPITAL GOODS (2.9%) ..... 4,069,915
-----------
CONSUMER CYCLICALS
AIRLINES (2.9%)
Alaska Air Group, Inc.* .......... 45,200 1,751,500
Atlantic Coast Airlines, Inc.* .. 75,500 2,397,125
-----------
4,148,625
-----------
APPAREL, TEXTILE (5.1%)
Mohawk Industries, Inc.* ......... 143,300 3,143,644
Nautica Enterprises, Inc.* ...... 80,700 1,876,275
Tommy Hilfiger Corp.* ............ 21,200 744,650
Wolverine World Wide, Inc. ...... 61,000 1,380,125
-----------
7,144,694
-----------
AUTO RELATED (5.8%)
Avis Rent A Car, Inc.* ........... 47,300 1,510,644
Budget Group, Inc. (Class A)* ... 106,300 3,673,994
Dollar Thrifty Automotive Group,
Inc.* ........................... 67,500 1,383,750
Federal-Mogul Corp. .............. 38,800 1,571,400
-----------
8,139,788
-----------
AUTOS & TRUCKS (1.4%)
Cross-Continent Auto Retailers,
Inc.* ........................... 107,700 901,987
Miller Industries, Inc.* ......... 105,700 1,136,275
-----------
2,038,262
-----------
FOOD SERVICES, LODGING (4.3%)
American General Hospitality
Corp. ........................... 51,000 1,364,250
Innkeepers USA Trust ............. 89,700 1,390,350
Interstate Hotels Co.* ........... 31,500 1,104,469
Prime Hospitality Corp.* ......... 62,000 1,263,250
The Cheesecake Factory* .......... 30,100 918,050
-----------
6,040,369
-----------
HOUSEHOLD FURNITURE,
APPLIANCES (1.9%)
Furniture Brands
International, Inc.* ............ 82,200 1,685,100
Industrie Natuzzi Spa (ADR) ..... 49,700 1,025,063
-----------
2,710,163
-----------
LEISURE RELATED (0.4%)
Bally Total Fitness Holding
Corp.* .......................... 22,500 492,187
-----------
RETAIL--GENERAL (4.0%)
Abercrombie & Fitch Co.
(Class A)* ...................... 44,800 1,400,000
Brylane, Inc.* ................... 29,300 1,443,025
Central Garden & Pet Co.* ........ 45,200 1,186,500
Pacific Sunwear of California* .. 56,350 1,665,847
-----------
5,695,372
-----------
TOTAL CONSUMER CYCLICALS (25.8%) 36,409,460
-----------
46
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE SMALL CAP GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
===========================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- -----------------------------------------------------------
CONSUMER NONCYCLICALS
CONTAINERS (1.8%)
Ivex Packaging Corp.* ............ 66,500 $ 1,596,000
Silgan Holdings, Inc.* ........... 29,500 958,750
-----------
2,554,750
-----------
DRUGS (4.9%)
Creative BioMolecules, Inc.* .... 124,800 920,400
Geltex Pharmaceuticals, Inc.* ... 58,200 1,542,300
Inhale Therapeutic Systems* ..... 2,200 57,200
Jones Medical Industries, Inc. .. 61,000 2,333,250
Medicis Pharmaceutical Corp.
(Class A)* ...................... 19,800 1,012,275
MedImmune, Inc.* ................. 24,400 1,046,150
-----------
6,911,575
-----------
HOSPITAL SUPPLIES & SERVICES (3.1%)
Mid Atlantic Medical Services,
Inc.* ........................... 74,100 944,775
National Surgery Centers, Inc.* . 71,850 1,886,063
NovaCare, Inc.* .................. 102,600 1,340,213
Novoste Corp.* ................... 9,500 213,750
-----------
4,384,801
-----------
RETAIL--FOOD (1.0%)
United Natural Foods, Inc.* ..... 55,500 1,443,000
-----------
TOTAL CONSUMER NONCYCLICALS (10.8%) 15,294,126
-----------
CREDIT SENSITIVE
BANKS (0.7%)
Friedman, Billings, Ramsey Group,
Inc.* ........................... 54,400 975,800
-----------
FINANCIAL SERVICES (2.8%)
Affiliated Managers Group, Inc.* . 46,300 1,342,700
FIRSTPLUS Financial Group, Inc.* 41,900 1,607,913
Healthcare Financial Partners,
Inc.* ........................... 29,200 1,036,600
-----------
3,987,213
-----------
REAL ESTATE (2.2%)
Glenborough Realty Trust, Inc. .. 64,400 1,907,850
Macerich Co. ..................... 38,900 1,108,650
-----------
3,016,500
-----------
UTILITY--ELECTRIC (0.2%)
Calpine Corp.* ................... 22,300 331,712
-----------
TOTAL CREDIT SENSITIVE (5.9%) .. 8,311,225
-----------
ENERGY
OIL--DOMESTIC (1.2%)
Basin Exploration, Inc.* ......... 61,000 1,082,750
Costilla Energy, Inc.* ........... 62,400 678,600
-----------
1,761,350
-----------
OIL--SUPPLIES & CONSTRUCTION (2.0%)
Oceaneering International, Inc.* 46,900 $ 926,275
Parker Drilling Co.* ............. 150,800 1,837,875
-----------
2,764,150
-----------
RAILROADS (0.7%)
Genesee & Wyoming, Inc.
(Class A)* ...................... 45,300 1,058,888
-----------
TOTAL ENERGY (3.9%) ............. 5,584,388
-----------
<PAGE>
TECHNOLOGY
ELECTRONICS (5.6%)
Check Point Software Technologies
Ltd.* ........................... 8,700 354,525
Excite, Inc.* .................... 12,000 360,000
Hadco Corp.* ..................... 27,500 1,244,375
Harbinger Corp.* ................. 16,600 466,875
Information Management Resources,
Inc.* ........................... 21,000 787,500
Insight Enterprises, Inc.* ...... 7,200 264,600
Lycos, Inc.* ..................... 30,800 1,274,350
MetaCreations Corp.* ............. 64,700 719,788
PMC-Sierra, Inc.* ................ 47,600 1,475,600
3D Labs, Inc. Ltd.* .............. 38,900 904,425
-----------
7,852,038
-----------
OFFICE EQUIPMENT (2.7%)
Discreet Logic, Inc.* ............ 70,400 1,544,400
Platinum Technology, Inc.* ...... 38,400 1,084,800
Sterling Software, Inc.* ......... 29,800 1,221,800
-----------
3,851,000
-----------
OFFICE EQUIPMENT SERVICES (3.8%)
Comverse Technology, Inc.* ...... 88,600 3,455,400
ENCAD, Inc.* ..................... 25,300 695,750
Oak Technology, Inc.* ............ 125,800 817,700
Saville Systems Ireland PLC
(ADR)* .......................... 8,200 340,300
-----------
5,309,150
-----------
TELECOMMUNICATIONS (6.9%)
ACC Corp.* ....................... 59,300 2,994,650
Comnet Cellular, Inc.* ........... 3,200 113,800
ICG Communications, Inc.* ........ 81,200 2,212,700
Level One Communications, Inc.* . 32,700 923,775
MetroNet Communications Corp.
(Class B)* ...................... 51,500 894,812
Millicom International Cellular
SA* ............................. 38,500 1,448,563
Mobile Telecommunication
Technologies Corp.* ............. 51,800 1,139,600
-----------
9,727,900
-----------
TOTAL TECHNOLOGY (19.0%) ........ 26,740,088
-----------
TOTAL COMMON STOCKS (97.5%)
(Cost $136,812,737).............. 137,556,431
-----------
</TABLE>
47
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE SMALL CAP GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1997
<TABLE>
<CAPTION>
===========================================================
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- -----------------------------------------------------------
<S> <C> <C>
SHORT-TERM DEBT SECURITIES:
U.S. GOVERNMENT AGENCIES (11.6%)
Federal Home Loan Mortgage
Corp.
6.0%, due 01/02/98 .......... $16,300,000 $ 16,297,283
------------
TOTAL SHORT-TERM DEBT SECURITIES (11.6%)
(Amortized Cost
$16,297,283)................. 16,297,283
------------
TOTAL INVESTMENTS (109.1%)
(Cost/Amortized Cost $153,110,020) 153,853,714
OTHER ASSETS
LESS LIABILITIES (-9.1%) ... (12,854,262)
------------
NET ASSETS (100.0%) .......... $140,999,452
============
</TABLE>
- ------------
* Non-income producing.
Glossary:
ADR--American Depository Receipt
See Notes to Financial Statements.
48
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE CONSERVATIVE INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- ------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS AND OTHER
INVESTMENTS:
BASIC MATERIALS
CHEMICALS (0.2%)
Akzo Nobel N.V. .................. 600 $ 103,450
Bayer AG ......................... 4,535 168,271
Ciba Specialty Chemicals AG* .... 900 107,224
Hitachi Chemical Co. Ltd. ........ 15,000 89,097
Holliday Chemical Holdings PLC ... 23,700 89,577
Kuraray Co. Ltd. ................. 10,000 82,774
Nippon Chemi-Con Corp. ........... 6,000 13,934
Toagosei Co. Ltd. ................ 15,000 21,153
----------
675,480
----------
CHEMICALS--SPECIALTY (0.1%)
Cytec Industries, Inc.* .......... 4,800 225,300
NGK Insulators ................... 10,000 88,905
----------
314,205
----------
METALS & MINING (0.0%)
Bethlehem Steel Corp.* ........... 15,000 129,375
Toho Titanium* ................... 1,000 8,431
----------
137,806
----------
PAPER (0.1%)
Jefferson Smurfit Corp.* ......... 8,000 113,000
KNP BT (Kon) N.V. ................ 6,000 138,190
Nippon Paper Industries Co. ..... 2,000 7,847
Stone Container Corp.* ........... 5,800 60,538
UMP-Kymmene Oy ................... 2,810 56,190
----------
375,765
----------
STEEL (0.1%)
Koninklijke Hoogovens N.V. ...... 2,000 81,967
NatSteel Ltd. .................... 25,000 33,898
Pohang Iron & Steel Co. Ltd.
(ADR) ........................... 2,000 34,875
Rautaruukki Oy ................... 8,095 65,343
Usinor Sacilor ................... 5,280 76,237
----------
292,320
----------
TOTAL BASIC MATERIALS (0.5%) ... 1,795,576
----------
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (0.5%)
USA Waste Services, Inc.* ........ 21,500 843,875
Waste Management, Inc. ........... 23,400 643,500
----------
1,487,375
----------
PRINTING, PUBLISHING &
BROADCASTING (1.0%)
Carlton Communications PLC ...... 15,500 119,715
CBS Corp. ........................ 17,000 500,438
Liberty Media Group (Class A)* ... 29,020 1,051,975
New Straits Times Press BHD ..... 8,000 9,914
New York Times Co. (Class A) .... 12,160 804,080
Nippon Television Network Corp.
100 29,354
Reader's Digest Association, Inc.
(Class A) ....................... 5,000 118,125
Television Broadcasts Ltd. ...... 1,000 2,852
Time Warner, Inc. ................ 6,200 384,400
Tokyo Broadcasting System, Inc. .. 1,000 12,645
United News & Media PLC .......... 10,812 123,128
----------
3,156,626
----------
PROFESSIONAL SERVICES (0.0%)
Asatsu, Inc. ..................... 600 $ 8,645
Brisa-Auto Estradas de Portugal
SA* ............................. 300 10,747
Meitec............................ 1,800 50,630
----------
70,022
----------
<PAGE>
TRUCKING, SHIPPING (0.3%)
Bergesen Dy AS (A Shares) ........ 5,380 126,745
Frontline Ltd.* .................. 20,000 80,695
Knightsbridge Tankers Ltd. ...... 6,800 192,525
OMI Corp.* ....................... 49,500 454,780
----------
854,745
----------
TOTAL BUSINESS SERVICES (1.8%) . 5,568,768
----------
CAPITAL GOODS
AEROSPACE (0.1%)
British Aerospace ................ 5,357 152,735
----------
BUILDING & CONSTRUCTION (0.2%)
Beazer Group PLC ................. 21,000 55,560
Bouygues ......................... 1,203 136,321
Daito Trust Construction Co. Ltd. 6,000 36,651
GTM Entrepose .................... 1,116 75,098
Makita Corp. ..................... 8,000 76,643
National House Industrial Co. ... 7,000 48,017
Sho Bond Corp. ................... 1,200 21,705
Societe Technip .................. 1,075 113,421
Toda Corp. ....................... 15,000 40,812
----------
604,228
----------
BUILDING MATERIALS & FOREST
PRODUCTS (0.3%)
BPB PLC .......................... 11,300 63,135
Fujikura Ltd. .................... 3,000 19,865
Holderbank Financiere Glaris AG . 155 126,505
Martin Marietta Materials, Inc. . 10,200 372,937
Matsushita Electric Works Ltd. .. 11,000 95,267
Nichiha Corp. .................... 1,600 9,785
Rugby Group PLC .................. 58,160 129,981
----------
817,475
----------
ELECTRICAL EQUIPMENT (0.8%)
Daikin Industries Ltd. ........... 14,000 52,792
General Electric Co. ............. 28,400 2,083,850
Johnson Electric Holdings Ltd. .. 28,800 82,880
Legrand SA ....................... 425 84,667
Mabuchi Motor Co. ................ 200 10,163
Sumitomo Electric Industries .... 7,000 95,497
----------
2,409,849
----------
MACHINERY (1.0%)
Allied Signal, Inc. .............. 18,800 732,025
Coltec Industries, Inc.* ......... 11,000 255,063
Cie Generale de Geophysique SA
(ADR)* .......................... 6,565 168,228
Fujitec Co. Ltd. ................. 9,000 49,665
Ishikawajima Harima Heavy
Industries Co. Ltd. ............. 10,000 14,945
KSB AG ........................... 300 65,872
Legris Industries SA.............. 1,990 69,105
49
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE CONSERVATIVE INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- ------------------------------------------------------------
Mitsubishi Heavy Industries Ltd. . 8,000 $ 33,355
Nitta Corp. ...................... 1,000 10,117
Nitto Kohki Co. Ltd. ............. 1,000 10,883
Rauma Oy ......................... 139 2,167
Schindler Holding AG
Participating Certificate ....... 102 106,295
Schindler Holding AG Registered .. 50 53,714
Siebe PLC ........................ 6,000 117,825
SMC Corp. ........................ 300 26,442
Stork N.V. ....................... 2,000 69,045
TI Group PLC ..................... 14,014 106,856
United Technologies Corp. ........ 17,200 1,252,375
Valmet Oy* ....................... 3,600 49,665
----------
3,193,642
----------
TOTAL CAPITAL GOODS (2.4%) ..... 7,177,929
----------
CONSUMER CYCLICALS
AIRLINES (0.1%)
Lufthansa AG ..................... 2,000 37,577
Singapore Airlines Ltd. .......... 1,000 6,542
Virgin Express Holdings PLC
(ADR)* .......................... 11,500 238,625
----------
282,744
----------
APPAREL, TEXTILES (0.1%)
Cone Mills Corp.* ................ 12,000 93,000
Onward Kashiyama Co. Ltd. ........ 8,000 92,585
----------
185,585
----------
AUTO RELATED (0.3%)
Continential AG .................. 5,500 123,822
Minebea Co. Ltd. ................. 2,000 21,460
NGK Spark Plug Co. ............... 6,000 34,030
Republic Industries, Inc.* ...... 25,600 596,800
Sumitomo Rubber Industries, Inc. 13,000 54,899
Toyoda Automatic Loom Works Ltd. 7,000 128,760
----------
959,771
----------
AUTOS & TRUCKS (0.3%)
Bajaj Auto Ltd. (GDR) ............ 750 14,813
Harley-Davidson, Inc. ............ 28,200 771,975
UMW Holdings BHD ................. 5,000 3,792
Volkswagen AG .................... 100 55,866
----------
846,446
----------
FOOD SERVICES, LODGING (0.4%)
Accor SA ......................... 200 37,185
Choice Hotels Scandinavia ASA*+ .. 13,500 45,696
Compass Group PLC ................ 16,100 198,164
Host Marriott Corp.* ............. 16,200 317,925
ITT Corp.* ....................... 6,500 538,688
John Q Hammons Hotels, Inc.
(Class A)* ...................... 14,800 133,200
----------
1,270,858
----------
HOUSEHOLD FURNITURE, APPLIANCES (0.6%)
Hunter Douglas N.V. .............. 2,500 87,540
Industrie Natuzzi Spa (ADR) ..... 500 10,313
Moulinex* ........................ 2,000 49,414
Pioneer Electric Corp. ........... 6,000 92,432
Sony Corp. ....................... 1,500 133,359
Sunbeam Corp. .................... 38,200 1,609,175
----------
1,982,233
----------
LEISURE RELATED (0.8%)
Berjaya Sports Toto BHD .......... 16,000 $ 40,931
Carnival Corp. (Class A) ......... 13,900 769,713
Cendant Corp.* ................... 12,100 415,938
Cyrk, Inc.* ...................... 6,000 58,125
Disney (Walt) Co. ................ 7,646 757,432
EMI Group PLC .................... 1,000 8,348
Granada Group PLC ................ 9,900 151,299
Ladbroke Group PLC ............... 31,084 134,852
NAMCO Ltd. ....................... 200 5,810
Nintendo Co. Ltd. ................ 400 39,241
Nippon Broadcasting System ...... 1,000 39,548
Toei Co. Ltd. .................... 1,000 3,641
----------
2,424,878
----------
<PAGE>
PHOTO & OPTICAL (0.0%)
Fuji Photo Film Co. .............. 3,000 114,965
Noritsu Koki Co. Ltd. ............ 1,200 29,615
----------
144,580
----------
RETAIL--GENERAL (1.4%)
Aldeasa SA* ...................... 2,000 42,402
Boots Co. PLC .................... 8,400 120,990
British Airport Authority PLC ... 17,300 141,577
Dayton Hudson Corp. .............. 19,500 1,316,250
Dickson Concepts International
Ltd. ............................ 18,000 26,249
Fingerhut Companies, Inc. ........ 8,000 171,000
Home Depot, Inc. ................. 20,800 1,224,600
Kingfisher PLC ................... 8,641 120,414
Kohls Corp.* ..................... 13,000 885,625
Kokuyo Co. Ltd. .................. 2,000 34,489
Limited, Inc. .................... 7,000 178,500
Paris Miki, Inc. ................. 1,000 10,730
Sato Corp. ....................... 1,200 20,418
Smith (W.H.) Group PLC ........... 2,000 12,785
Vendex International N.V. ........ 1,200 66,224
----------
4,372,253
----------
TOTAL CONSUMER CYCLICALS (4.0%) 12,469,348
----------
CONSUMER NONCYCLICALS
BEVERAGES (0.6%)
Bass PLC ......................... 2,600 40,355
Coca-Cola Co. .................... 22,580 1,504,393
Diageo PLC ....................... 6,000 55,166
Scottish & Newcastle PLC ......... 11,000 134,759
Whitbread PLC .................... 11,000 161,060
----------
1,895,733
----------
CONTAINERS (0.5%)
Owens-Illinois, Inc.* ............ 5,000 189,688
Schmalbach Lubeca AG ............. 880 146,752
Sealed Air Corp.* ................ 20,600 1,272,050
----------
1,608,490
----------
DRUGS (1.7%)
Astra AB (A Shares) .............. 3,500 60,612
Centocor, Inc.* .................. 28,795 957,434
Daiichi Pharmaceutical Co. ...... 8,000 90,132
Geltex Pharmaceuticals, Inc.* ... 3,072 81,408
Merck KGAA ....................... 2,100 70,625
Merck & Co., Inc. ................ 11,434 1,214,863
50
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE CONSERVATIVE INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- ------------------------------------------------------------
Novartis AG ...................... 180 $ 292,092
Orion-Yhtyma Oy (B Shares) ...... 4,500 118,878
Pfizer, Inc. ..................... 22,291 1,662,073
Rohto Pharmaceutical Co. Ltd. ... 2,000 12,876
Sankyo Co. Ltd. .................. 1,000 22,610
Santen Pharmaceutical Co. Ltd. .. 3,000 34,489
Schering Plough Corp. ............ 9,700 602,613
Taisho Pharmaceutical Co. ........ 1,000 25,522
Yamanouchi Pharmaceutical Co.
Ltd. ............................ 2,000 42,920
-----------
5,289,147
-----------
FOODS (0.7%)
Campbell Soup Co. ................ 17,700 1,028,813
Huhtamaki Oy Series I ............ 1,300 53,660
Nestle SA ........................ 131 196,343
Orkla ASA ........................ 930 79,957
Parmalat Finanziaria Spa ......... 59,650 85,311
Rite Aid Corp. ................... 6,000 352,125
Tyson Foods, Inc. ................ 27,000 553,500
-----------
2,349,709
-----------
HOSPITAL SUPPLIES & SERVICES (0.7%)
Columbia/HCA Healthcare Corp. .... 7,500 222,188
Medtronic, Inc. .................. 24,812 1,297,978
PT Tempo Scan Pacific ............ 23,000 1,777
United Healthcare Corp. .......... 11,000 546,563
-----------
2,068,506
-----------
RETAIL--FOOD (0.2%)
Delhaize-Le Lion SA............... 980 49,726
Familymart Co. ................... 4,100 147,063
Promodes ......................... 250 103,722
Santa Isabel S.A. (ADR) .......... 1,000 17,500
Seven-Eleven Japan Co. Ltd. ..... 1,000 70,818
Woolworths Ltd. .................. 61,026 203,945
-----------
592,774
-----------
SOAPS & TOILETRIES (0.8%)
Avon Products, Inc. .............. 15,880 974,635
Gillette Co. ..................... 16,305 1,637,633
-----------
2,612,268
-----------
TOBACCO (1.0%)
Imperial Tobacco Group PLC ...... 1,700 10,700
Japan Tobacco, Inc. .............. 21 149,040
Philip Morris Cos., Inc. ......... 58,000 2,628,125
Seita ............................ 2,600 93,312
Swedish Match AB ................. 4,500 15,019
Tabacalera SA--A ................. 1,400 113,489
-----------
3,009,685
-----------
TOTAL CONSUMER NONCYCLICALS (6.2%) 19,426,312
-----------
CREDIT SENSITIVE
BANKS (1.4%)
Allied Irish Bank ................ 26,000 248,113
AMMB Holdings BHD ................ 9,000 5,901
BPI-SGPS SA* ..................... 1,000 24,314
Banco Bilbao Vizcaya SA .......... 6,000 194,158
Banco Santander SA ............... 2,970 99,227
Bangkok Bank Public Co. Ltd. .... 2,000 4,984
Bank of Tokyo-Mitsubishi Ltd. ... 2,000 27,591
Banque Nationale de Paris ........ 1,500 79,729
Chase Manhattan Corp. ............ 12,800 $ 1,401,600
Cie Bancaire SA .................. 7 1,134
Citicorp ......................... 9,200 1,163,225
Credito Italiano Spa ............. 48,000 148,016
Dao Heng Bank Group Ltd. ......... 3,000 7,491
Den Norske Bank ASA .............. 24,000 113,082
Erste Bank Der Oesterreichischen
Sparkassen AG* .................. 750 37,377
Forenings Sparbanken AB
(A Shares) ...................... 4,000 90,933
Istituto Mobiliare Italiano ..... 9,400 111,588
Long-Term Credit Bank of Japan ... 22,000 35,240
Philippine Commercial
International Bank .............. 1,000 2,840
PT Bank Dagang Nasional Indonesia
Tbk ............................. 136,000 8,655
Seventy-Seven Bank Co. Ltd. ..... 11,000 78,406
Shizuoka Bank Ltd. ............... 1,000 10,730
<PAGE>
Skandinaviska Enskilda Banken
(Series A) ...................... 4,440 56,200
Societe Generale ................. 1,058 144,149
State Bank of India (GDR)+ ...... 2,700 49,140
Suncorp-Metway Ltd.* ............. 11,149 27,963
Thai Farmers Bank Public
Co.--Warrants* .................. 375 40
Toho Bank ........................ 1,000 3,985
Wing Hang Bank Ltd. .............. 18,000 50,871
Yamaguchi Bank ................... 7,000 85,840
-----------
4,312,522
-----------
FINANCIAL SERVICES (2.2%)
Aiful Corp.* ..................... 400 27,132
Associates First Capital Corp. .. 5,000 355,625
Beneficial Corp. ................. 6,250 519,531
Credit Saison Co. ................ 2,000 49,358
Fleet Financial Group, Inc. ..... 4,700 352,206
Green Tree Financial Corp. ...... 23,800 623,263
MBNA Corp. ....................... 57,825 1,579,345
Merrill Lynch & Co., Inc. ........ 8,900 649,144
Morgan Stanley, Dean Witter,
Discover & Co. .................. 38,100 2,252,663
Newcourt Credit Group, Inc.* .... 2,500 83,438
Nichiei Co. Ltd. ................. 100 10,653
Peregrine Investment Holdings
Ltd. ............................ 52,000 36,908
PMI Group, Inc. .................. 1,700 122,931
Sanyo Shinpan Finance Co. Ltd. .. 200 8,845
Takefuji Corp. ................... 600 27,546
Worms Et Compagnie ............... 200 14,788
-----------
6,713,376
-----------
INSURANCE (1.6%)
ASR Verzekeringsgroep N.V. ...... 1,100 59,838
Assurances Generale de France ... 4,618 244,692
Catalana Occidente SA ............ 1,000 50,935
Corpacion Mapfre Cia Inter SA ... 1,200 31,821
Fortis Amev N.V. ................. 4,438 193,485
General Accident PLC.............. 4,700 81,483
ING Groep N.V. ................... 5,500 231,647
Irish Life PLC ................... 20,000 113,605
MGIC Investment Corp. ............ 6,000 399,000
51
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE CONSERVATIVE INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- ------------------------------------------------------------
PennCorp Financial Group, Inc. .. 16,700 $ 595,981
Providian Financial Corp. ........ 8,000 361,500
QBE Insurance Group Ltd. ......... 21,500 96,740
Royal & Sun Alliance Insurance
Group PLC ....................... 9,651 97,219
Travelers Group, Inc. ............ 39,249 2,114,540
Trygg-Hansa AB (B Shares) ........ 3,800 116,777
United Assurance Group PLC ...... 8,100 69,882
Willis Corroon Group PLC (ADR) .. 6,000 73,875
Zurich Versicherungs ............. 246 117,231
-----------
5,050,251
-----------
REAL ESTATE (0.4%)
Boston Properties, Inc. .......... 9,000 297,563
City Developments Ltd. ........... 1,000 4,639
Daibiru Corp. .................... 1,000 7,319
Glenborough Realty Trust, Inc. .. 10,000 296,250
Spieker Properties, Inc. ......... 10,000 428,750
Sumitomo Realty & Development Co.
Ltd. ............................ 1,000 5,748
Unibail SA ....................... 950 94,866
Vornado Realty Trust ............. 2,500 117,344
-----------
1,252,479
-----------
UTILITY--ELECTRIC (0.4%)
AES Corp.* ....................... 13,700 638,763
Cia Paranaense de Energia-Copel
(ADR) ........................... 7,000 95,813
Energy Group PLC ................. 6,550 72,332
Hong Kong Electric Holdings Ltd. 20,000 76,010
Malakoff BHD ..................... 10,000 20,825
Manila Electric Co. .............. 1,860 6,154
National Grid Group PLC .......... 1,000 4,749
Powergen PLC ..................... 11,400 148,371
Veba AG .......................... 3,500 238,333
-----------
1,301,350
-----------
UTILITY--GAS (0.1%)
Anglian Water PLC ................ 14,080 192,043
Scottish Power PLC ............... 25,500 225,445
-----------
417,488
-----------
UTILITY--TELEPHONE (0.8%)
British Telecommunications PLC ... 20,100 158,051
Cable & Wireless PLC.............. 12,300 108,138
Philippine Long Distance
Telephone Co. ................... 1,000 21,728
Telecom Italia Spa ............... 35,500 226,767
Telefonica de Espana ............. 6,600 188,448
Telekom Malaysia BHD ............. 16,500 48,785
Telephone & Data Systems, Inc. .. 7,500 349,219
Teleport Communications Group,
Inc. (Class A)* ................. 23,700 1,300,538
-----------
2,401,674
-----------
TOTAL CREDIT SENSITIVE (6.9%) .. 21,449,140
-----------
ENERGY
COAL & GAS PIPELINES (0.0%)
BG PLC ........................... 18,529 83,431
BG PLC 'B'* ...................... 21,000 10,008
OMV AG ........................... 300 41,563
-----------
135,002
-----------
OIL--DOMESTIC (0.8%)
Apache Corp. ..................... 15,100 $ 529,444
Murphy Oil Corp. ................. 5,000 270,938
Tom Brown, Inc.* ................. 7,500 144,375
Union Pacific Resources Group,
Inc. ............................ 20,100 487,425
USX-Marathon Group ............... 33,800 1,140,750
-----------
2,572,932
-----------
OIL--INTERNATIONAL (0.6%)
British Petroleum Co. PLC ........ 11,100 145,925
Elf Aquitaine .................... 2,110 245,410
Gulf Canada Resources Ltd.* ..... 112,700 788,900
Gulf Indonesia Resources Ltd.* .. 3,500 77,000
Orogen Minerals Ltd. ............. 5,160 10,084
Repsol SA ........................ 1,410 60,158
Shell Transport & Trading Co. PLC 20,100 145,334
Total SA--B....................... 2,881 313,542
-----------
1,786,353
-----------
OIL--SUPPLIES & CONSTRUCTION (1.9%)
Baker Hughes, Inc. ............... 10,250 447,156
BJ Services Co.* ................. 9,000 647,438
Canadian Fracmaster Ltd. ......... 5,900 86,677
Canadian Fracmaster Ltd.
Installment Receipt*+ ........... 13,500 113,330
Dresser Industries, Inc. ......... 12,000 503,250
Fugro N.V.*....................... 2,000 60,957
Halliburton Co. .................. 24,900 1,293,244
Nabors Industries, Inc.* ......... 43,000 1,351,813
Noble Drilling Corp.* ............ 43,400 1,329,125
Parker Drilling Co.* ............. 9,000 109,688
-----------
5,942,678
-----------
TOTAL ENERGY (3.3%) ............. 10,436,965
-----------
TECHNOLOGY
ELECTRONICS (1.4%)
Altera Corp.* .................... 11,100 367,688
Applied Materials, Inc.* ......... 17,600 530,200
Cisco Systems, Inc.* ............. 42,600 2,374,950
Fujimi, Inc. ..................... 300 12,761
Hoya Corp. ....................... 1,000 31,424
Leitch Technology Corp.* ......... 1,000 30,081
Micronics Japan Co. Ltd. ......... 1,000 17,245
National Semiconductor Corp.* ... 20,900 542,094
Nikon Corp. ...................... 1,000 9,887
Rohm Co. Ltd. .................... 1,000 101,935
Sankyo Engineering Co. ........... 1,000 3,066
SMH AG ........................... 540 72,838
Sterling Commerce, Inc.* ......... 5,000 192,188
TDK Corp. ........................ 1,000 75,417
Tokyo Cathode Laboratory Co.* .... 1,000 9,887
TOWA Corp. ....................... 100 2,077
Varitronix International Ltd. ... 55,000 94,399
Yamaichi Electronics Co. Ltd. .... 1,000 16,095
Yokogawa Electric Corp. .......... 2,000 12,355
-----------
4,496,587
-----------
OFFICE EQUIPMENT (1.1%)
Barco N.V. ....................... 469 86,076
Ceridian Corp.* .................. 11,000 503,938
Compaq Computer Corp. ............ 22,300 1,258,556
52
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE CONSERVATIVE INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- ------------------------------------------------------------
Dell Computer Corp.* ............. 14,100 $ 1,184,400
Policy Management Systems Corp.* 6,300 438,244
-----------
3,471,214
-----------
OFFICE EQUIPMENT SERVICES (0.2%)
Data Communication System Co. .... 1,000 13,183
First Data Corp. ................. 14,600 427,050
Fuji Soft ABC, Inc. .............. 600 20,556
INES Corp. ....................... 1,000 7,741
Nippon System Development ........ 600 12,324
Oracle Corp.* .................... 13,450 300,103
-----------
780,957
-----------
TELECOMMUNICATIONS (1.8%)
ADC Telecommunications, Inc.* .... 25,000 1,043,750
Asia Satellite Telecommunications
Holdings Ltd. ................... 18,000 30,778
DDI Corp. ........................ 25 66,105
DSC Communications Corp.* ........ 4,000 96,000
Energis PLC* ..................... 22,000 92,189
Lucent Technologies, Inc. ........ 9,500 758,813
MCI Communications Corp. ......... 8,500 363,906
Nextel Communications, Inc.
(Class A)* ...................... 10,900 283,400
PT Indosat ....................... 45,000 83,455
PT Telekomunikasi Indonesia ..... 33,000 17,550
SK Telecom Co. Ltd. (ADR)* ...... 9,754 63,402
Tele-Communications TCI Ventures
Group (Class A)* ................ 12,000 339,750
Tellabs, Inc.* ................... 9,100 481,163
Videsh Sanchar Nigam Ltd. (GDR) . 1,700 21,973
Videsh Sanchar Nigam Ltd. (GDR)+* 2,000 27,860
Vodafone Group PLC................ 15,000 108,212
WorldCom, Inc.* .................. 53,525 1,619,131
-----------
5,497,437
-----------
TOTAL TECHNOLOGY (4.5%) ......... 14,246,195
-----------
DIVERSIFIED
MISCELLANEOUS (1.0%)
BTR PLC .......................... 20,000 60,474
Cie Generale de Eaux ............. 943 131,614
Citic Pacific Ltd. ............... 7,000 27,823
First Pacific Co. ................ 42,734 20,680
Montedison Spa ................... 126,000 113,179
Smith (Howard) Ltd. .............. 4,000 33,198
Swire Pacific Ltd. (Class A) .... 7,000 38,392
Tomkins PLC ...................... 9,000 43,038
Tyco International Ltd. .......... 41,222 1,857,566
U.S. Industries, Inc. ............ 30,750 926,344
-----------
TOTAL DIVERSIFIED (1.0%) ........ 3,252,308
-----------
TOTAL COMMON STOCKS AND OTHER
INVESTMENTS (30.6%)
(Cost $78,384,870)............... 95,822,541
-----------
PREFERRED STOCKS:
BASIC MATERIALS (0.0%)
CHEMICALS
Henkel KGAA ...................... 1,694 $ 105,937
-----------
BUSINESS SERVICES (0.0%)
PRINTING, PUBLISHING &
BROADCASTING
ProSieben Media AG* .............. 500 22,930
-----------
CONSUMER CYCLICALS (0.0%)
RETAIL--GENERAL
Hornbach Holding AG .............. 920 63,415
-----------
TECHNOLOGY (0.1%)
TELECOMMUNICATIONS
Nokia Oyj (A Shares) ............. 1,500 106,495
-----------
TOTAL PREFERRED STOCKS (0.1%)
(Cost $217,889).................. 298,777
-----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
------------
<S> <C> <C>
LONG-TERM DEBT SECURITIES:
CONSUMER NONCYCLICALS (2.0%)
MEDIA & CABLE
Time Warner Entertainment Co.
8.375%, 03/15/23................. $5,625,000 6,419,137
-----------
CREDIT SENSITIVE
BANKS (2.6%)
Chase Manhattan Corp.
8.625%, 05/01/02 ................ 5,500,000 5,979,160
St. George Bank Ltd.
7.15%, 10/15/05+ ................ 2,000,000 2,060,440
Sumitomo Bank International
0.75% Conv., 05/31/01 ......... Yen 11,000,000 88,312
-----------
8,127,912
-----------
FINANCIAL SERVICES (1.9%)
Ford Motor Credit Co.
6.125%, 01/09/06 ................ $6,000,000 5,859,180
-----------
FOREIGN GOVERNMENT (0.8%)
Province of Quebec
7.5%, 07/15/23 .................. 2,500,000 2,686,375
-----------
MORTGAGE RELATED (11.4%)
Federal National Mortgage
Association:
6.0%, 11/01/10 .................. 14,295,932 14,063,622
6.5%, 01/01/11 .................. 3,346,139 3,348,230
7.0%, 05/01/26 .................. 8,403,540 8,461,315
7.0%, 09/01/27 .................. 8,995,060 9,056,901
Premier Auto Trust
7.15%, 02/04/99 ................. 875,160 875,974
-----------
35,806,042
-----------
U.S. GOVERNMENT (33.1%)
U.S. Treasury:
6.125% Note, 08/31/98 ........... 2,400,000 2,408,250
6.375% Note, 05/15/99 ........... 19,100,000 19,273,103
6.0% Note, 08/15/00 ............. 17,000,000 17,122,195
</TABLE>
53
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE CONSERVATIVE INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1997
<TABLE>
<CAPTION>
===========================================================
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- -----------------------------------------------------------
<S> <C> <C>
6.25% Note, 04/30/01 ........ $15,600,000 $ 15,843,750
6.5% Note, 08/31/01 ......... 7,100,000 7,275,285
6.5% Note, 05/31/02 ......... 14,560,000 14,987,700
6.875% Note, 05/15/06 ....... 7,430,000 7,952,425
6.125% Bond, 11/15/27 ....... 18,310,000 18,813,525
------------
103,676,233
------------
UTILITY--ELECTRIC (2.2%)
Consolidated Edison
6.45%, 12/01/07 ............. 6,750,000 6,767,280
------------
TOTAL CREDIT SENSITIVE (52.0%) 162,923,022
------------
TOTAL LONG-TERM DEBT SECURITIES (54.0%)
(Amortized Cost $167,120,488) 169,342,159
------------
SHORT-TERM DEBT SECURITIES:
U.S. GOVERNMENT AGENCIES (14.6%)
Federal Home Loan Mortgage
Corp.
6.0%, due 01/02/98 .......... 45,800,000 45,792,366
------------
TOTAL SHORT-TERM DEBT SECURITIES (14.6%)
(Amortized Cost $45,792,366) 45,792,366
------------
TOTAL INVESTMENTS (99.3%)
(Cost/Amortized Cost $291,515,613) 311,255,843
OTHER ASSETS
LESS LIABILITIES (0.7%) .... 2,285,071
------------
NET ASSETS (100.0%) .......... $313,540,914
============
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
DISTRIBUTION OF INVESTMENTS BY GLOBAL
REGION
As a Percentage of Total Investments
Australia .................................. 0.1%
Canada ..................................... 0.1
France ..................................... 0.6
Germany .................................... 0.3
Japan ...................................... 1.1
Netherlands ................................ 0.4
Scandinavia ................................ 0.7
Southeast Asia ............................. 0.2
Switzerland ................................ 0.3
United Kingdom ............................. 1.4
United States** ............................ 94.3
Other European Countries ................... 0.5
-----
100.0%
=====
</TABLE>
- ------------
* Non-income producing.
** Includes Short-Term Debt Securities of 14.7%.
+ Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may only be resold to qualified institutional
buyers. At December 31, 1997, these securities amounted to $2,296,466
or 0.7% of net assets.
Glossary:
ADR--American Depository Receipt
GDR--Global Depository Receipt
See Notes to Financial Statements.
54
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- ------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS AND OTHER
INVESTMENTS:
BASIC MATERIALS
CHEMICALS (0.4%)
Akzo Nobel N.V. .................. 5,000 $ 862,082
Bayer AG ......................... 40,500 1,502,752
Ciba Specialty Chemicals AG* .... 9,100 1,084,149
Hitachi Chemical Co. Ltd. ........ 159,000 944,434
Holliday Chemical Holdings PLC ... 214,000 808,834
Kuraray Co. Ltd. ................. 96,000 794,635
Nippon Chemi-Con Corp. ........... 62,000 143,982
Toagosei Co. Ltd. ................ 158,000 222,817
-----------
6,363,685
-----------
CHEMICALS--SPECIALTY (0.0%)
NGK Insulators ................... 92,000 817,934
-----------
METALS & MINING (0.1%)
Bethlehem Steel Corp.* ........... 135,000 1,164,375
Nord Resources Corp.* ............ 27,939 50,639
Randgold Resources Ltd. (GDR)+* . 30,300 159,075
Toho Titanium* ................... 11,000 92,738
-----------
1,466,827
-----------
PAPER (0.2%)
Jefferson Smurfit Corp.* ......... 39,600 559,350
KNP BT (Kon) N.V. ................ 53,000 1,220,674
Nippon Paper Industries Co. ..... 10,000 39,241
Stone Container Corp.* ........... 57,900 604,331
UPM-Kymmene Oy ................... 25,320 506,312
-----------
2,929,908
-----------
STEEL (0.1%)
Koninklijke Hoogovens N.V. ...... 20,000 819,668
NatSteel Ltd. .................... 220,000 298,305
Pohang Iron & Steel Co. Ltd.
(ADR) ........................... 15,000 261,562
Rautaruukki Oy ................... 72,872 588,222
Usinor Sacilor ................... 47,000 678,624
-----------
2,646,381
-----------
TOTAL BASIC MATERIALS (0.8%) ... 14,224,735
-----------
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (0.8%)
USA Waste Services, Inc.* ........ 162,900 6,393,825
U.S. Filter Corp.* ............... 45,000 1,347,187
Waste Management, Inc. ........... 217,200 5,973,000
-----------
13,714,012
-----------
PRINTING, PUBLISHING &
BROADCASTING (1.7%)
Cablevision Systems Corp.
(Class A)* ...................... 43,500 4,165,125
Carlton Communications PLC ...... 134,500 1,038,815
CBS Corp. ........................ 167,500 4,930,781
Liberty Media Group (Class A)* ... 218,700 7,927,875
New Straits Times Press BHD ..... 65,000 80,550
New York Times Co. (Class A) ..... 87,840 5,808,420
Nippon Television Network Corp. . 600 176,126
Reader's Digest Association, Inc.
(Class A) ....................... 40,000 945,000
Reed International PLC ........... 5,000 $ 50,121
Television Broadcasts Ltd. ...... 10,000 28,520
Time Warner, Inc. ................ 58,100 3,602,200
Tokyo Broadcasting System, Inc. .. 7,000 88,523
United News & Media PLC .......... 95,571 1,088,372
-----------
29,930,428
-----------
PROFESSIONAL SERVICES (0.0%)
Asatsu, Inc. ..................... 3,000 43,227
Brisa-Auto Estradas de Portugal
SA* ............................. 2,800 100,301
Meitec ........................... 11,000 309,408
-----------
452,936
-----------
TRUCKING, SHIPPING (0.4%)
Bergesen Dy AS (A Shares) ........ 47,300 1,114,327
Frontline Ltd.* .................. 140,000 564,868
Knightsbridge Tankers Ltd. ...... 64,500 1,826,156
OMI Corp.* ....................... 313,200 2,877,525
-----------
6,382,876
-----------
TOTAL BUSINESS SERVICES (2.9%) .. 50,480,252
-----------
CAPITAL GOODS
AEROSPACE (0.1%)
British Aerospace ................ 50,710 1,445,810
-----------
BUILDING & CONSTRUCTION (0.3%)
Beazer Group PLC ................. 187,000 494,750
Bouygues ......................... 10,708 1,213,401
Daito Trust Construction Co. Ltd. 65,000 397,049
GTM Entrepose .................... 9,953 669,762
Makita Corp. ..................... 89,000 852,654
National House Industrial Co. ... 53,000 363,556
Sho Bond Corp. ................... 10,000 180,878
Suido Kiko Kaisha................. 1,000 2,008
Societe Technip .................. 10,350 1,092,008
Toda Corp. ....................... 143,000 389,078
-----------
5,655,144
-----------
BUILDING MATERIALS &
FOREST PRODUCTS (0.5%)
BPB PLC .......................... 103,100 576,044
Fujikura Ltd. .................... 34,000 225,147
Holderbank Financiere Glaris AG . 1,385 1,130,380
Martin Marietta Materials, Inc. . 110,000 4,021,875
Matsushita Electric Works Ltd. .. 104,000 900,709
Nichiha Corp. .................... 14,600 89,295
Rugby Group PLC .................. 447,460 1,000,026
-----------
7,943,476
-----------
ELECTRICAL EQUIPMENT (1.3%)
Daikin Industries Ltd. ........... 140,000 527,917
General Electric Co. ............. 231,000 16,949,625
Johnson Electric Holdings Ltd. .. 258,000 742,470
Legrand SA ....................... 3,800 757,032
Mabuchi Motor Co. ................ 1,700 86,384
Pioneer Electric Corp. ........... 66,000 1,016,746
Sony Corp. ....................... 16,500 1,466,948
Sumitomo Electric Industries .... 56,000 763,978
-----------
22,311,100
-----------
55
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- ------------------------------------------------------------
MACHINERY (1.6%)
Allied Signal, Inc. .............. 152,400 $ 5,934,075
Cie Generale de Geophysique SA
(ADR)* .......................... 56,108 1,437,768
Coltec Industries, Inc.* ......... 115,000 2,666,562
Fujitec Co. Ltd. ................. 96,000 529,757
Ishikawajima Harima Heavy
Industries Co. Ltd............... 130,000 194,290
KSB AG ........................... 2,600 570,889
Legris Industries SA ............. 17,300 600,764
Mitsubishi Heavy Industries Ltd. . 80,000 333,550
Nitta Corp. ...................... 8,000 80,935
Nitto Kohki Co. Ltd. ............. 4,000 43,533
Rauma Oy ......................... 1,234 19,243
Schindler Holding AG
Participating Certificate ....... 915 953,530
Schindler Holding AG Registered . 450 483,430
Siebe PLC ........................ 50,000 981,874
SMC Corp. ........................ 2,000 176,279
Stork N.V. ....................... 18,000 621,409
TI Group PLC ..................... 123,795 943,928
United Technologies Corp. ........ 158,100 11,511,656
Valmet Oy* ....................... 31,000 427,669
-----------
28,511,141
-----------
TOTAL CAPITAL GOODS (3.8%) ..... 65,866,671
-----------
CONSUMER CYCLICALS
AIRLINES (0.0%)
Lufthansa AG ..................... 21,000 394,563
Singapore Airlines Ltd. .......... 12,000 78,501
Virgin Express Holdings PLC
(ADR)* .......................... 10,400 215,800
-----------
688,864
-----------
APPAREL, TEXTILE (0.1%)
Liz Claiborne, Inc. .............. 30,000 1,254,375
Onward Kashiyama Co. Ltd. ........ 79,000 914,275
-----------
2,168,650
-----------
AUTO RELATED (0.5%)
Continental AG ................... 55,000 1,238,222
Minebea Co. Ltd. ................. 14,000 150,220
NGK Spark Plug Co. ............... 69,000 391,339
Republic Industries, Inc.* ...... 219,700 5,121,756
Sumitomo Rubber Industries, Inc. 129,000 544,771
Toyoda Automatic Loom Works Ltd. 70,000 1,287,603
-----------
8,733,911
-----------
AUTOS & TRUCKS (0.4%)
Bajaj Auto Ltd. (GDR) ............ 7,500 148,125
Harley-Davidson, Inc. ............ 234,000 6,405,750
Honda Motor Co. Ltd. ............. 1,000 36,712
UMW Holdings BHD ................. 188,000 142,589
Volkswagen AG .................... 1,000 558,659
-----------
7,291,835
-----------
FOOD SERVICES, LODGING (0.9%)
Accor SA ......................... 1,400 260,297
Choice Hotels Scandinavia ASA*+ .. 108,000 365,566
Compass Group PLC ................ 144,200 1,774,864
Host Marriott Corp.* ............. 138,200 $ 2,712,175
ITT Corp.* ....................... 101,000 8,370,375
John Q Hammons Hotels, Inc.
(Class A)* ...................... 191,800 1,726,200
-----------
15,209,477
-----------
HOUSEHOLD FURNITURE,
APPLIANCES (0.8%)
Hunter Douglas N.V. .............. 22,000 770,350
Moulinex* ........................ 17,000 420,022
Sunbeam Corp. .................... 295,500 12,447,937
-----------
13,638,309
-----------
LEISURE RELATED (1.4%)
Berjaya Sports Toto BHD .......... 140,000 358,144
Carnival Corp. (Class A) ......... 116,500 6,451,187
Cendant Corp.* ................... 125,300 4,307,187
Cyrk, Inc.* ...................... 220,600 2,137,063
Disney (Walt) Co. ................ 63,100 6,250,844
EMI Group PLC .................... 12,000 100,176
Granada Group PLC ................ 88,900 1,358,635
Hoyts Cinemas Group+ ............. 45,000 79,151
Ladbroke Group PLC ............... 279,118 1,210,904
NAMCO Ltd. ....................... 1,000 29,048
Nintendo Co. Ltd. ................ 1,000 98,103
Nippon Broadcasting System ...... 5,000 197,739
Toei Co. Ltd. .................... 8,000 29,124
@Entertainment, Inc.* ............ 57,500 639,687
-----------
23,246,992
-----------
PHOTO & OPTICAL (0.1%)
Fuji Photo Film Co. .............. 26,000 996,359
Noritsu Koki Co. Ltd. ............ 11,200 276,405
-----------
1,272,764
-----------
RETAIL--GENERAL (2.1%)
Aldeasa SA* ...................... 16,494 349,692
Boots Co. PLC .................... 74,700 1,075,946
BAA PLC .......................... 154,200 1,261,920
Dayton Hudson Corp. .............. 157,000 10,597,500
Dickson Concepts International
Ltd. ............................ 161,000 234,779
Fingerhut Companies, Inc. ........ 105,500 2,255,062
Home Depot, Inc. ................. 163,300 9,614,287
Kingfisher PLC ................... 76,163 1,061,348
Kohl's Corp.* .................... 93,000 6,335,625
Kokuyo Co. Ltd. .................. 25,000 431,117
Limited, Inc. .................... 100,000 2,550,000
Paris Miki, Inc. ................. 3,800 40,774
Sato Corp. ....................... 8,800 149,730
Smith (W.H.) Group PLC ........... 25,000 159,811
Vendex International N.V. ........ 11,000 607,057
-----------
36,724,648
-----------
TOTAL CONSUMER CYCLICALS (6.3%) 108,975,450
-----------
CONSUMER NONCYCLICALS
BEVERAGES (0.9%)
Bass PLC ......................... 26,400 409,755
Coca-Cola Co. .................... 183,120 12,200,370
Diageo PLC ....................... 58,000 533,269
Scottish & Newcastle PLC ......... 100,000 1,225,083
Whitbread PLC .................... 92,500 1,354,370
-----------
15,722,847
-----------
56
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- ------------------------------------------------------------
CONTAINERS (0.8%)
Owens-Illinois, Inc.* ............ 50,000 $ 1,896,875
Schmalbach Lubeca AG ............. 8,300 1,384,141
Sealed Air Corp.* ................ 164,500 10,157,875
------------
13,438,891
------------
DRUGS (2.5%)
Astra AB (A Shares) .............. 30,000 519,528
Centocor, Inc.* .................. 237,503 7,896,975
Daiichi Pharmaceutical Co. ...... 79,000 890,056
Merck KGAA ....................... 18,700 628,895
Merck & Co., Inc. ................ 92,160 9,792,000
Novartis AG ...................... 1,800 2,920,917
Orion-Yhtyma Oy (B Shares) ...... 37,800 998,578
Pfizer, Inc. ..................... 182,112 13,578,726
Rohto Pharmaceutical Co. Ltd. ... 9,000 57,942
Sankyo Co. Ltd. .................. 6,000 135,658
Santen Pharmaceutical Co. Ltd. .. 22,000 252,922
Schering Plough Corp. ............ 80,000 4,970,000
SmithKline Beecham PLC ........... 10,000 102,378
Taisho Pharmaceutical Co. ........ 4,000 102,089
Yamanouchi Pharmaceutical Co.
Ltd. ............................ 21,000 450,661
------------
43,297,325
------------
FOODS (1.1%)
Campbell Soup Co. ................ 136,335 7,924,472
Huhtamaki Oy Series I ............ 11,550 476,752
Nestle SA ........................ 1,150 1,723,622
Orkla ASA 'A'..................... 8,300 713,599
Parmalat Finanziaria Spa ......... 503,700 720,385
Rite Aid Corp. ................... 40,000 2,347,500
Tyson Foods, Inc. ................ 225,000 4,612,500
------------
18,518,830
------------
HOSPITAL SUPPLIES & SERVICES (1.0%)
Columbia/HCA Healthcare Corp. .... 90,000 2,666,250
Medtronic, Inc. .................. 202,906 10,614,520
PT Tempo Scan Pacific ............ 206,000 15,918
United Healthcare Corp. .......... 90,000 4,471,875
------------
17,768,563
------------
RETAIL--FOOD (0.4%)
Delhaize-Le Lion SA .............. 8,800 446,520
Familymart Co. ................... 88,500 3,174,401
Promodes ......................... 2,200 912,752
Santa Isabel S.A. (ADR) .......... 3,000 52,500
Seven-Eleven Japan Co. Ltd. ..... 4,000 283,273
Woolworths Ltd. .................. 569,991 1,904,871
------------
6,774,317
------------
SOAPS & TOILETRIES (1.2%)
Avon Products, Inc. .............. 125,720 7,716,065
Gillette Corp. ................... 130,310 13,088,011
------------
20,804,076
------------
TOBACCO (1.5%)
Imperial Tobacco Group PLC ...... 11,600 73,009
Japan Tobacco, Inc. .............. 197 1,398,138
Philip Morris Cos., Inc. ......... 467,900 21,201,719
Seita ............................ 29,200 1,047,969
Swedish Match AB ................. 54,700 182,565
Tabacalera SA--A ................. 11,000 $ 891,697
------------
24,795,097
------------
TOTAL CONSUMER NONCYCLICALS (9.4%) 161,119,946
------------
CREDIT SENSITIVE
BANKS (2.1%)
Allied Irish Bank ................ 225,000 2,147,134
AMMB Holdings BHD ................ 78,000 51,138
Banco Bilbao Vizcaya SA .......... 54,900 1,776,547
BPI-SGPS SA* ..................... 12,000 291,769
Banco Santander SA ............... 29,100 972,228
Bangkok Bank Public Ltd. ......... 20,000 49,844
Bank of Tokyo-Mitsubishi Ltd. ... 15,000 206,936
Banque Nationale de Paris ........ 13,700 728,193
Chase Manhattan Corp. ............ 101,300 11,092,350
Citicorp ......................... 75,700 9,571,319
Credito Italiano Spa ............. 500,000 1,541,832
Dao Heng Bank Group Ltd........... 30,000 74,913
Den Norske Bank ASA .............. 201,000 947,061
Erste Bank Der Oesterreichischen
Sparkassen AG* .................. 3,740 186,386
Forenings Sparbanken AB
(A Shares) ...................... 40,000 909,331
Istituto Mobiliare Italiano ..... 84,700 1,005,483
Long-Term Credit Bank of Japan ... 230,000 368,423
Philippine Commercial
International Bank .............. 5,000 14,198
PT Bank Dagang Nasional Indonesia
Tbk ............................. 1,230,000 78,273
Seventy-Seven Bank Ltd. .......... 123,000 876,720
Shizuoka Bank Ltd. ............... 4,000 42,920
Skandinaviska Enskilda Banken
(Series A) ...................... 25,370 321,123
Societe Generale ................. 9,028 1,230,034
State Bank of India (GDR)+ ...... 27,000 491,400
Sumitomo Bank Ltd. ............... 8,000 91,358
Suncorp-Metway Ltd.* ............. 74,330 186,425
Thai Farmers Bank Public
Co.--Warrants* .................. 2,875 173
Toho Bank ........................ 10,000 39,854
United Overseas Bank Ltd. ........ 4,000 22,242
Wing Hang Bank Ltd. .............. 161,000 455,014
Yamaguchi Bank ................... 70,000 858,402
------------
36,629,023
------------
FINANCIAL SERVICES (3.2%)
Aiful Corp.* ..................... 2,400 162,790
Associates First Capital Corp. .. 43,000 3,058,375
Beneficial Corp. ................. 50,800 4,222,750
Credit Saison Co. ................ 14,400 355,378
Fleet Financial Group, Inc. ..... 46,300 3,469,606
Green Tree Financial Corp. ...... 153,400 4,017,162
MBNA Corp. ....................... 481,125 13,140,727
Merrill Lynch & Co., Inc. ........ 72,400 5,280,675
Morgan Stanley, Dean Witter,
Discover & Co. .................. 305,700 18,074,513
Newcourt Credit Group Inc.* ..... 25,000 834,375
Nichiei Co. Ltd. ................. 500 53,267
Peregrine Investment Holdings
Ltd. ............................ 472,000 335,011
PMI Group, Inc. .................. 14,600 1,055,763
57
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- ------------------------------------------------------------
Sanyo Shinpan Finance Co. Ltd. .. 1,200 $ 53,068
Takefuji Corp. ................... 5,000 229,546
Worms Et Compagnie ............... 2,500 184,847
------------
54,527,853
------------
INSURANCE (3.0%)
ASR Verzekeringsgroep N.V. ...... 10,000 543,979
Assurances Generales de France ... 37,995 2,013,227
Catalana Occidente SA ............ 1,030 52,463
Corporacion Mapfre Cia Inter SA .. 14,000 371,250
Fortis Amev N.V. ................. 37,281 1,625,350
General Accident PLC.............. 42,200 731,616
ING Groep N.V. ................... 50,000 2,105,886
Irish Life PLC ................... 100,000 568,025
Life Re Corp. .................... 140,500 9,158,844
MGIC Investment Corp. ............ 67,000 4,455,500
PennCorp Financial Group, Inc. .. 135,700 4,842,794
Providian Financial Corp. ........ 65,000 2,937,188
QBE Insurance Group Ltd. ......... 201,250 905,536
Royal & Sun Alliance Insurance
Group PLC ....................... 100,936 1,016,774
Travelers Group, Inc. ............ 320,199 17,250,721
Trygg-Hansa AB (B Shares) ........ 3,600 110,631
United Assurance Group PLC ...... 71,600 617,718
Willis Corroon Group PLC (ADR) .. 87,800 1,081,037
Zurich Versicherungs ............. 2,130 1,015,050
------------
51,403,589
------------
REAL ESTATE (0.5%)
Boston Properties, Inc. .......... 84,200 2,783,863
City Developments Ltd. ........... 8,000 37,110
Daibiru Corp. .................... 4,000 29,278
Glenborough Realty Trust, Inc. .. 70,000 2,073,750
Spieker Properties, Inc. ......... 40,000 1,715,000
Sumitomo Realty & Development Co.
Ltd. ............................ 16,000 91,972
Unibail SA ....................... 7,880 786,887
Vornado Realty Trust ............. 20,000 938,750
------------
8,456,610
------------
UTILITY--ELECTRIC (0.7%)
AES Corp.* ....................... 113,800 5,305,925
Cia Paranaense de Energia-Copel
(ADR) ........................... 54,000 739,125
Energy Group PLC ................. 58,840 649,770
Hong Kong Electric Holdings Ltd. 179,000 680,288
Malakoff BHD ..................... 90,000 187,428
Manila Electric Co. .............. 16,620 54,990
National Grid Group PLC .......... 20,000 94,983
Powergen PLC ..................... 108,000 1,405,617
Veba AG .......................... 35,000 2,383,335
------------
11,501,461
------------
UTILITY--GAS (0.2%)
Anglian Water PLC ................ 128,600 1,754,030
Scottish Power PLC ............... 220,000 1,945,015
------------
3,699,045
------------
UTILITY--TELEPHONE (1.1%)
British Telecommunications PLC ... 186,600 $ 1,467,275
Cable & Wireless PLC ............. 109,200 960,051
Philippine Long Distance
Telephone Co. ................... 10,000 217,284
Telecom Italia Spa ............... 311,550 1,990,116
Telefonica de Espana ............. 57,000 1,627,502
Telekom Malaysia BHD ............. 150,000 443,502
Telephone & Data Systems, Inc. .. 39,700 1,848,531
Teleport Communications Group,
Inc. (Class A)* ................. 193,400 10,612,825
------------
19,167,086
------------
TOTAL CREDIT SENSITIVE (10.8%) 185,384,667
------------
ENERGY
COAL & GAS PIPELINES (0.1%)
BG PLC ........................... 164,117 738,963
BG PLC-'B'* ...................... 186,000 88,640
OMV AG ........................... 1,400 193,960
------------
1,021,563
------------
OIL--DOMESTIC (1.5%)
Apache Corp. ..................... 130,400 4,572,150
Louis Dreyfus Natural Gas Corp.* 245,400 4,585,913
Murphy Oil Corp. ................. 40,000 2,167,500
Tom Brown, Inc.* ................. 121,000 2,329,250
Union Pacific Resources Group,
Inc. ............................ 176,800 4,287,400
USX-Marathon Group ............... 259,700 8,764,875
------------
26,707,088
------------
OIL--INTERNATIONAL (1.1%)
AO Tatneft (ADR) ................. 29,000 4,132,500
British Petroleum Co. PLC ........ 98,700 1,297,553
Elf Aquitaine .................... 18,800 2,186,591
Gulf Canada Resources Ltd.* ..... 916,000 6,412,000
Gulf Indonesia Resources Ltd.* .. 30,700 675,400
Petroleo Brasileiro S.A. (ADR) .. 15,000 350,799
Repsol SA ........................ 13,950 595,176
Shell Transport & Trading Co. PLC 178,950 1,293,905
Total SA--B ...................... 26,234 2,855,075
------------
19,798,999
------------
OIL--SUPPLIES & CONSTRUCTION (2.8%)
Baker Hughes, Inc. ............... 90,000 3,926,250
BJ Services Co.* ................. 30,000 2,158,125
Canadian Fracmaster Ltd. ......... 47,100 691,944
Canadian Fracmaster Ltd.
Installment Receipt*+ ........... 133,800 1,123,229
Dresser Industries, Inc. ......... 133,900 5,615,431
Fugro N.V.* ...................... 10,000 304,786
Halliburton Co. .................. 186,400 9,681,150
Nabors Industries, Inc.* ......... 362,900 11,408,669
Noble Drilling Corp.* ............ 383,700 11,750,813
Parker Drilling Co.* ............. 92,300 1,124,906
------------
47,785,303
------------
TOTAL ENERGY (5.5%) ............. 95,312,953
------------
58
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- ------------------------------------------------------------
TECHNOLOGY
ELECTRONICS (2.1%)
Altera Corp.* .................... 91,000 $ 3,014,375
Applied Materials, Inc.* ......... 153,600 4,627,200
Cisco Systems, Inc.* ............. 339,000 18,899,250
Fujimi, Inc. ..................... 2,000 85,074
Hoya Corp. ....................... 8,000 251,389
Leitch Technology Corp.* ......... 10,000 300,815
Micronics Japan Co. Ltd. ......... 7,000 120,713
National Semiconductor Corp.* ... 182,000 4,720,625
Nikon Corp. ...................... 10,000 98,870
Rohm Co. Ltd. .................... 2,000 203,870
Sankyo Engineering Co. ........... 6,000 18,394
SMH AG ........................... 4,850 654,194
Sterling Commerce, Inc.* ......... 40,000 1,537,500
TDK Corp. ........................ 5,000 377,084
Tokyo Cathode Laboratory Co.* .... 5,400 53,390
TOWA Corp. ....................... 800 16,616
Varitronix International Ltd. ... 469,000 804,968
Yokogawa Electric Corp. .......... 12,000 74,129
------------
35,858,456
------------
OFFICE EQUIPMENT (1.6%)
Barco N.V. ....................... 4,314 791,752
Canon, Inc. ...................... 2,000 46,599
Ceridian Corp.* .................. 101,300 4,640,806
Compaq Computer Corp. ............ 180,125 10,165,805
Dell Computer Corp.* ............. 105,800 8,887,200
Policy Management Systems Corp.* 44,900 3,123,356
------------
27,655,518
------------
OFFICE EQUIPMENT SERVICES (0.4%)
Data Communication System Co. .... 6,000 79,096
First Data Corp. ................. 127,600 3,732,300
Fuji Soft ABC, Inc. .............. 4,200 143,890
INES Corp. ....................... 6,000 46,446
Nippon System Development ........ 3,200 65,729
Oracle Corp.* .................... 105,500 2,353,969
------------
6,421,430
------------
TELECOMMUNICATIONS (2.8%)
ADC Telecommunications, Inc.* .... 205,700 8,587,975
Asia Satellite Telecommunications
Holdings Ltd. ................... 120,000 205,188
DDI Corp. ........................ 240 634,604
DSC Communications Corp.* ........ 40,000 960,000
Energis PLC* ..................... 165,000 691,420
Intermedia Communications, Inc.* 363 22,052
Lucent Technologies, Inc. ........ 107,000 8,546,625
MCI Communications Corp. ......... 80,000 3,425,000
Nextel Communications, Inc.
(Class A)* ...................... 69,500 1,807,000
PT Indosat ....................... 419,000 777,055
PT Telekomunikasi Indonesia ..... 309,000 164,332
SK Telecom Co. Ltd. (ADR)* ...... 85,655 556,756
Tele-Communications TCI Ventures
Group (Class A)* ................ 100,000 2,831,250
Tellabs, Inc.* ................... 113,500 6,001,313
Videsh Sanchar Nigam Ltd. (GDR)+* 28,400 395,612
Vodafone Group PLC ............... 160,000 $ 1,154,257
WorldCom, Inc.* .................. 383,850 11,611,463
------------
48,371,902
------------
TOTAL TECHNOLOGY (6.9%) ......... 118,307,306
------------
DIVERSIFIED
MISCELLANEOUS (1.4%)
BTR PLC .......................... 180,000 544,262
Cie Generale des Eaux ............ 8,259 1,152,706
Citic Pacific Ltd. ............... 60,000 238,482
First Pacific Co. ................ 397,685 192,453
Montedison Spa ................... 1,113,000 999,750
Smith (Howard) Ltd. .............. 35,000 290,481
Swire Pacific Ltd. (Class A) .... 57,000 312,621
Tomkins PLC ...................... 160,000 765,123
Tyco International Ltd. .......... 343,518 15,479,780
U.S. Industries, Inc. ............ 161,400 4,862,175
------------
TOTAL DIVERSIFIED (1.4%) ........ 24,837,833
------------
TOTAL COMMON STOCKS AND OTHER
INVESTMENTS (47.8%)
(Cost $666,960,804) ............. 824,509,813
------------
<PAGE>
PREFERRED STOCKS:
BASIC MATERIALS (0.1%)
CHEMICALS
Henkel KGAA ...................... 15,180 949,304
------------
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (0.1%)
Republic Industries, Inc.
6.5% Exch. Conv. ................ 46,100 1,083,350
------------
PRINTING, PUBLISHING &
BROADCASTING (0.0%)
ProSieben Media AG* .............. 5,000 229,300
------------
TRUCKING, SHIPPING (0.0%)
CNF Trust I
5.0% Conv. Series A ............. 19,000 1,083,000
------------
TOTAL BUSINESS SERVICES (0.1%) 2,395,650
------------
CAPITAL GOODS (0.1%)
AEROSPACE
Loral Space & Communications
6.0% Conv. ...................... 37,700 2,318,550
------------
CONSUMER CYCLICALS
AIRLINES (0.1%)
Continental Airlines Finance
Trust
8.5% Conv. ...................... 18,100 1,862,037
------------
RETAIL--GENERAL (0.0%)
Hornbach Holding AG .............. 8,010 552,122
------------
TOTAL CONSUMER CYCLICALS (0.1%) 2,414,159
------------
CREDIT SENSITIVE (0.1%)
UTILITY--ELECTRIC
AES Trust I
5.375% Conv. Series A ........... 23,000 1,650,250
------------
ENERGY (0.1%)
OIL--DOMESTIC
Devon Financing Trust
$3.25 Conv. ..................... 11,600 849,700
------------
59
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- ------------------------------------------------------------
TECHNOLOGY
TELECOMMUNICATIONS (0.6%)
Intermedia Communications, Inc.:
7.0% Conv. Series D ............. 20,500 $ 840,500
7.0% Conv.+ ..................... 28,900 1,184,900
Mobile Telecommunications
$2.25 Conv. ..................... 28,000 938,000
Nextel Strypes Trust
7.25% Conv. ..................... 54,400 1,292,000
Nokia Oyj (A Shares) ............. 14,100 1,001,055
QualComm Financial Trust:
5.75% Conv. ..................... 6,400 299,600
5.75% Conv.+ .................... 36,800 1,722,700
WorldCom, Inc.
8.0% Conv. ...................... 30,700 3,219,663
-------------
TOTAL TECHNOLOGY (0.6%) ......... 10,498,418
-------------
TOTAL PREFERRED STOCKS (1.2%)
(Cost $17,920,454)............... 21,076,031
-------------
PRINCIPAL
AMOUNT
-----------
LONG-TERM DEBT SECURITIES:
BUSINESS SERVICES
PROFESSIONAL SERVICES (0.1%)
Career Horizons, Inc.
7.0% Conv., 11/01/02 ............ $ 710,000 1,476,800
Personnel Group of America:
5.75% Conv., 07/01/04 ........... 110,000 124,850
5.75% Conv., 07/01/04+ .......... 370,000 419,950
-------------
TOTAL BUSINESS SERVICES (0.1%) 2,021,600
-------------
CAPITAL GOODS
AEROSPACE (0.1%)
Orbital Sciences Corp.
5.0% Conv., 10/01/02+ ........... 590,000 753,725
-------------
BUILDING & CONSTRUCTION (0.0%)
Halter Marine Group, Inc.
4.5% Conv., 09/15/04+ ........... 670,000 752,912
-------------
MACHINERY (0.1%)
DII Group, Inc.
6.0% Conv., 10/15/02+ ........... 1,005,000 1,536,444
-------------
TOTAL CAPITAL GOODS (0.2%) ..... 3,043,081
-------------
CONSUMER CYCLICALS
FOOD SERVICES, LODGING (0.2%)
Cendant Corp.
4.75% Conv., 03/01/03 ........... 2,050,000 2,757,250
-------------
RETAIL--GENERAL (0.1%)
U.S. Office Products Co.
5.5% Conv., 02/01/01 ............ 1,455,000 1,729,631
-------------
TOTAL CONSUMER CYCLICALS (0.3%) 4,486,881
-------------
CONSUMER NONCYCLICALS
DRUGS (0.2%)
MedImmune, Inc.:
7.0% Conv., 07/01/03 ............ 615,000 1,398,356
7.0% Conv. Sub., 07/01/03+ ...... 500,000 1,136,875
</TABLE>
<TABLE>
<CAPTION>
=================================================================
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- -----------------------------------------------------------------
<S> <C> <C>
Quintiles Transnational Corp.:
4.25% Conv., 05/31/00 ..........$ 370,000 $ 415,787
4.25% Conv., 05/31/00+ ......... 580,000 651,775
-----------
3,602,793
-----------
HOSPITAL SUPPLIES &
SERVICES (0.2%)
FPA Medical Management, Inc.:
6.5% Conv., 12/15/01 ........... 810,000 826,200
6.5% Conv., 12/15/01+ .......... 540,000 550,800
RES-Care, Inc.
6.0% Conv., 12/01/04+ .......... 1,095,000 1,248,300
-----------
2,625,300
-----------
MEDIA & CABLE (1.9%)
Time Warner Entertainment Co.
8.375%, 03/15/23 ............... 23,580,000 26,909,024
Turner Broadcasting System, Inc.
8.375%, 07/01/13 ............... 5,530,000 6,204,771
-----------
33,113,795
-----------
TOTAL CONSUMER NONCYCLICALS (2.3%) 39,341,888
-----------
CREDIT SENSITIVE
BANKS (1.6%)
ABN Amro Bank NV
7.125%, 06/18/07 ............... 25,375,000 26,528,801
Sumitomo Bank International
0.75% Conv., 05/31/01 .......... Yen
101,000,000 810,864
-----------
27,339,665
-----------
FINANCIAL SERVICES (0.7%)
Commercial Credit Co.
6.125%, 12/01/05 ...............$10,000,000 9,810,400
RAC Financial Group, Inc.:
7.25% Conv., 08/15/03 .......... 195,000 469,950
7.25% Conv. Sub., 08/15/03+ ... 625,000 1,506,250
-----------
11,786,600
-----------
INSURANCE (1.5%)
John Hancock Mutual Life
Insurance Co.
7.375%, 02/15/24+ .............. 23,750,000 24,918,262
Penn Treaty American Corp.:
6.25% Conv., 12/01/03 .......... 330,000 425,287
6.25% Conv., 12/01/03+ ......... 905,000 1,166,319
-----------
26,509,868
-----------
MORTGAGE RELATED (7.2%)
Federal Home Loan Mortgage
Corp.:
7.0%, 09/01/11 ................. 25,507,811 25,898,412
7.0%, 01/01/12.................. 5,527,207 5,611,845
Federal National Mortgage
Association:
6.5%, 09/01/11 ................. 16,671,267 16,718,113
6.5%, 06/01/11 ................. 40,495,952 40,749,052
7.0%, 05/01/26 ................. 26,800,480 27,051,601
7.0%, 09/01/27 ................. 8,695,225 8,757,657
-----------
124,786,680
-----------
60
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
=================================================================
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- -----------------------------------------------------------------
U.S. GOVERNMENT (28.9%)
U.S. Treasury:
6.125% Note, 08/31/98 .......... $15,000,000 $ 15,051,570
6.375% Note, 05/15/99 .......... 52,000,000 52,471,276
6.75% Note, 04/30/00 ........... 21,600,000 22,092,761
6.0% Note, 08/15/00 ............ 68,850,000 69,344,894
6.25% Note, 04/30/01 ........... 43,000,000 43,671,875
6.5% Note, 08/31/01 ............ 81,600,000 83,614,541
6.5% Note, 05/31/02 ............ 86,335,000 88,871,091
5.75% Note, 08/15/03 ........... 21,700,000 21,720,355
6.875% Note, 05/15/06 .......... 41,085,000 43,973,810
6.125% Bond, 11/15/27 .......... 55,405,000 56,928,637
--------------
497,740,810
--------------
TOTAL CREDIT SENSITIVE (39.9%) 688,163,623
--------------
ENERGY
COAL & GAS PIPELINES (0.1%)
Nabors Industries, Inc.
5.0% Conv., 05/15/06 ........... 1,125,000 2,036,250
--------------
GAS (0.4%)
RAS Laffan Liquid Natural Gas
8.294%, 03/15/14+ .............. 7,730,000 7,273,976
--------------
OIL--SUPPLIES &
CONSTRUCTION (0.2%)
Diamond Offshore Drilling, Inc.
3.75% Conv. Sub. Note, 02/15/07 1,090,000 1,442,887
Parker Drilling Corp.
5.5% Conv. Sub., 08/01/04 ..... 960,000 1,029,000
Seacor Holdings, Inc.:
5.375% Conv., 11/15/06 ......... 90,000 101,925
5.375% Conv., 11/15/06+ ........ 755,000 855,037
--------------
3,428,849
--------------
TOTAL ENERGY (0.7%) ............ 12,739,075
--------------
TECHNOLOGY
ELECTRONICS (1.3%)
Altera Corp.
5.75% Conv. Sub. Note,
06/15/02+ ...................... 1,465,000 2,010,712
Baan Co.:
4.5% Conv. Sub. Note, 12/15/01+ 805,000 1,233,662
4.5% Conv. Sub. Note,
12/15/01 ....................... 230,000 352,475
Cymer, Inc.
3.5% Conv., 08/06/04+(a) ....... 1,420,000 1,073,875
Integrated Process Equipment
6.25% Conv., 09/15/04+ ......... 2,110,000 1,748,663
Level One Communications:
4.0% Conv., 09/01/04 ........... 360,000 338,400
4.0% Conv., 09/01/04+ .......... 1,140,000 1,071,600
Photronics, Inc.
6.0% Conv., 06/01/04 ........... 1,870,000 2,143,488
Quantum Corp.
5.0% Conv., 03/01/03+ .......... 355,000 644,325
Sanmina Corp.
5.5% Conv., 08/15/02+ .......... 1,345,000 3,259,944
SCI Systems, Inc.
5.0% Conv., 05/01/06+ .......... 1,670,000 3,110,375
Solectron Corp.
6.0% Conv., 03/01/06+ .......... $ 1,070,000 $ 1,467,238
Wind River Systems, Inc.
5.0% Conv., 08/01/02+ .......... 1,390,000 1,487,300
Xilinx, Inc.
5.25% Conv., 11/01/02+ ......... 1,865,000 1,804,388
--------------
21,746,445
--------------
TELECOMMUNICATIONS (0.1%)
Comverse Technology, Inc.:
5.75% Conv., 10/01/06 .......... 185,000 199,338
5.75% Conv. Sub., 10/01/06+ ... 1,605,000 1,729,388
--------------
1,928,726
--------------
TOTAL TECHNOLOGY (1.4%) ........ 23,675,171
--------------
TOTAL LONG-TERM DEBT SECURITIES (44.9%)
(Cost $752,359,876)............. 773,471,319
--------------
<PAGE>
SHORT-TERM DEBT SECURITIES:
U.S. GOVERNMENT AGENCIES (5.4%)
Federal Home Loan Mortgage Corp.
6.0%, due 01/02/98 ............. 92,700,000 92,684,550
--------------
TOTAL SHORT-TERM DEBT SECURITIES (5.4%)
(Cost $92,684,550).............. 92,684,550
--------------
TOTAL INVESTMENTS (99.3%)
(Cost/Amortized Cost $1,529,925,684) 1,711,741,713
OTHER ASSETS
LESS LIABILITIES (0.7%)......... 12,346,816
--------------
NET ASSETS (100.0%) ............. $1,724,088,529
==============
</TABLE>
61
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1997
<TABLE>
<CAPTION>
<S> <C>
DISTRIBUTION OF INVESTMENTS BY
GLOBAL REGION
As a Percentage of Total
Investments
Australia ................ 0.2%
Canada ................... 0.1
France ................... 1.1
Germany .................. 0.6
Japan .................... 1.8
Netherlands .............. 0.6
Scandinavia .............. 0.6
Southeast Asia ........... 0.4
Spain .................... 0.4
Switzerland .............. 0.6
United Kingdom ........... 2.3
United States** .......... 90.8
Other European Countries 0.5
-----
100.0%
=====
</TABLE>
- ------------
* Non-income producing.
** Includes Short-Term Debt Securities of 5.4%.
+ Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may only be resold to qualified institutional
buyers. At December 31, 1997, these securities amounted to $68,953,728
or 4.0% of net assets.
(a) Coupon will increase periodically based upon a predetermined schedule.
Stated interest rate in effect at December 31, 1997.
Glossary:
ADR--American Depository Receipt
GDR--Global Depository Receipt
See Notes to Financial Statements.
62
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GROWTH INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
==============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS AND OTHER
INVESTMENTS:
BASIC MATERIALS
CHEMICALS (0.2%)
AGA AB (A Shares) ................ 3,400 $ 46,890
Akzo Nobel N.V. .................. 4,000 689,665
Asahi Chemical Industry Co. ..... 27,000 91,466
Bayer AG ......................... 25,400 942,466
BOC Group PLC .................... 6,825 112,268
GP Batteries International Ltd. . 180,000 468,867
GP Batteries International
Ltd.--Warrants*.................. 5,750 4,719
Imperial Chemical Industries PLC 18,212 284,614
Indo Gulf Fertilisers & Chemicals
Corp. Ltd. (GDR)+................ 50,000 40,000
Ishihara Sangyo Kaisha Ltd.* .... 90,000 100,019
Johnson Matthey PLC .............. 25,000 223,900
Kuraray Co. Ltd. ................. 6,000 49,665
L'Air Liquide .................... 2,035 318,513
Linde AG ......................... 150 90,970
Mitsui Chemicals, Inc.* .......... 9,000 17,521
Royal Group Technologies Ltd.* ... 10,000 231,875
Sanyo Chemicals Industries Ltd. . 9,000 52,424
Solvay Et Cie Societe Anonyme ... 1,200 75,463
Sumitomo Chemical Co. Ltd. ...... 28,000 64,380
Toray Industries, Inc. ........... 29,000 130,025
UBE Industries Ltd. .............. 14,000 17,812
-----------
4,053,522
-----------
CHEMICALS--SPECIALTY (0.5%)
Cytec Industries, Inc.* .......... 57,900 2,717,681
Kyowa Hakko Kogyo Co. ............ 8,000 34,643
NGK Insulators ................... 6,000 53,344
SGL Carbon AG+ ................... 15,000 1,917,785
Solutia, Inc. .................... 113,000 3,015,687
UCAR International, Inc.* ........ 5,000 199,688
-----------
7,938,828
-----------
METALS & MINING (0.2%)
Alusuisse Lonza Holding AG ...... 90 86,457
Bethlehem Steel Corp.* ........... 330,000 2,846,250
Degussa AG ....................... 2,500 123,683
Granges AB* ...................... 550 8,624
Great Central Mines Ltd. ......... 75,000 80,617
Gwalia Consolidated Ltd.* ........ 88,300 46,594
Japan Energy Corp. ............... 19,000 17,911
Mitsubishi Materials Corp. ...... 24,000 38,628
Randgold Resources Ltd. (GDR)*+ . 7,600 39,900
Rio Tinto Ltd. ................... 5,800 67,645
Rio Tinto PLC .................... 27,615 339,895
Sumitomo Metal Mining Co. ........ 10,000 32,956
Toho Titanium* ................... 48,000 404,675
WMC Ltd. ......................... 40,700 141,850
-----------
4,275,685
-----------
PAPER (0.2%)
Amcor Ltd. ....................... 8,900 39,136
Asia Pacific Resources
International Ltd. (Class A)* .. 5,000 9,375
Asia Pacific Resources
International Ltd.
(Class A)--Warrants* ............ 5,000 $ 625
Enso Oy (Series R) ............... 30,000 232,253
Fletcher Challenge Forest ........ 4,256 3,534
Grupo Industrial Durango (ADR)* . 12,000 171,000
Jefferson Smurfit Corp.* ......... 79,300 1,120,113
Nippon Paper Industries Co. ..... 2,000 7,848
Oji Paper Co. Ltd. ............... 22,000 87,511
Stone Container Corp.* ........... 123,000 1,283,812
Svenska Cellulosa (Series B) .... 3,200 71,940
UPM-Kymmene Oy ................... 3,292 65,829
-----------
3,092,976
-----------
STEEL (0.1%)
Broken Hill Proprietary Co. Ltd. . 50,000 464,157
Kawasaki Steel Corp. ............. 54,000 73,669
Nippon Steel Corp. ............... 217,000 320,989
NKK Corp. ........................ 85,000 67,752
Sumitomo Metal Industries ........ 268,000 343,024
Thyssen AG ....................... 450 96,056
Usinor Sacilor ................... 3,500 50,536
-----------
1,416,183
-----------
TOTAL BASIC MATERIALS (1.2%) ... 20,777,194
-----------
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (1.4%)
B.U.S. Berzelius Umwelt-Service
AG .............................. 22,000 293,505
Daiseki Co. Ltd. ................. 7,600 78,636
Matsuda Sangyo Co. Ltd. .......... 12,000 72,474
Powerscreen International PLC ... 75,000 752,988
Rentokil Initial PLC ............. 177,200 771,663
Tomra Systems ASA ................ 102,660 2,293,441
United States Filter Corp.* ..... 75,000 2,245,312
USA Waste Services, Inc.* ........ 177,000 6,947,250
Waste Management, Inc. ........... 390,500 10,738,750
-----------
24,194,019
-----------
PRINTING, PUBLISHING &
BROADCASTING (2.8%)
British Sky Broadcasting Group
PLC ............................. 50,476 378,240
Cablevision Systems Corp.
(Class A)* ...................... 53,500 5,122,625
Carlton Communications PLC ...... 200,900 1,551,657
CBS Corp. ........................ 291,250 8,573,672
Dai Nippon Printing Co. Ltd. .... 19,000 356,773
Elsevier N.V. .................... 66,445 1,074,838
Havas ............................ 200 14,389
Liberty Media Group (Class A)* ... 301,150 10,916,688
Mediaset Spa ..................... 140,000 687,733
Mirror Group PLC ................. 70,000 224,311
New York Times Co. (Class A) .... 100,300 6,632,337
News Corp. Ltd. .................. 59,900 330,515
Nippon Television Network Corp. . 2,000 587,086
Pegasus Communications Corp.
(Class A)* ...................... 1,128 22,983
Reader's Digest Association, Inc.
(Class A) ....................... 100,000 2,362,500
63
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GROWTH INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
==============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------------------------------------
Reed International PLC ........... 80,000 $ 801,932
Star Publications BHD ............ 20,000 22,831
Takara Printing Co. .............. 11,000 32,880
Time Warner, Inc. ................ 103,000 6,386,000
Tokyo Broadcasting System, Inc. .. 45,000 569,075
Toppan Printing Co. .............. 7,000 91,205
Ver Ned Uitgeversbedr Ver Bezit
N.V. ............................ 6,000 169,260
-----------
46,909,530
-----------
PROFESSIONAL SERVICES (0.3%)
Adecco SA ........................ 275 79,742
Alvern Norway ASA* ............... 76,550 181,378
Apcoa Parking AG+ ................ 3,000 220,128
Asatsu, Inc. ..................... 22,400 322,759
Brisa-Auto Estradas de Portugal
SA* ............................. 7,000 250,753
Content Beheer N.V.+ ............. 53,000 1,306,932
Meitec ........................... 61,800 1,738,310
Secom Co. ........................ 2,000 127,841
WPP Group PLC .................... 100,000 445,335
-----------
4,673,178
-----------
TRUCKING, SHIPPING (0.8%)
Brambles Industries Ltd. ......... 90,000 1,785,295
Frontline Ltd.* .................. 400,000 1,613,908
Irish Continental Group PLC ..... 30,000 367,082
Knightsbridge Tankers Ltd. ...... 110,700 3,134,194
Mitsui O.S.K. Lines Ltd.* ........ 19,000 26,357
Nippon Express Co. Ltd. .......... 20,000 99,636
Nippon Yusen K.K. ................ 13,000 35,670
OMI Corp.* ....................... 652,900 5,998,519
Penninsular & Oriental Steam
Navigation Co. .................. 10,466 119,102
Yamato Transport Co. Ltd. ........ 8,000 107,300
-----------
13,287,063
-----------
TOTAL BUSINESS SERVICES (5.3%) .. 89,063,790
-----------
CAPITAL GOODS
AEROSPACE (0.0%)
British Aerospace ................ 11,284 321,722
Rolls-Royce PLC .................. 22,528 86,998
-----------
408,720
-----------
BUILDING & CONSTRUCTION (0.2%)
ABB AG ........................... 300 376,926
CSR Ltd. ......................... 16,900 57,249
Daito Trust Construction Co. .... 17,200 105,065
Daiwa House Industry Co. Ltd. ... 9,000 47,595
Hitachi Plant Engineering &
Construction Co. ................ 25,000 55,758
Hochtief AG ...................... 1,500 61,703
Japan Industrial Land Development 19,000 45,871
Kaneshita Construction ........... 26,000 117,570
Kumagai Gumi Co. ................. 6,000 3,265
MacMahon Holdings Ltd. ........... 600,000 187,617
Mancon BHD ....................... 47,999 17,400
Metacorp BHD ..................... 10,000 4,242
Mitsui Home Co. Ltd. ............. 32,000 174,133
Nanno Construction Co. Ltd. ..... 26,000 20,924
Nawarat Patanakarn Public Co. ... 80,000 3,323
Nippon Denwa Shisetsu ............ 30,000 114,965
Nishimatsu Construction Co. ..... 4,000 $ 12,569
Obayashi Corp. ................... 12,000 40,835
Ohmoto Gumi Co. Ltd. ............. 15,000 64,380
Oriental Construction Co. ........ 12,800 55,919
Pacific Rim Infra Management
Enterprises Ltd.* ............... 493,200 16,230
Penta-Ocean Construction ......... 5,000 7,013
PS Corp. ......................... 31,200 118,368
Sanyo Engineering & Construction
Co. ............................. 18,000 64,840
Sekisui House Ltd. ............... 13,000 83,595
Shimizu Corp. .................... 15,000 34,719
Sho Bond Corp. ................... 54,000 976,739
Skanska AB (Series B) ............ 1,620 66,413
Suido Kiko Kaisha ................ 9,000 18,072
Taisei Corp. ..................... 20,000 32,803
Toda Corp. ....................... 30,000 81,625
United Engineers Malaysia BHD .... 11,000 9,163
Wesco, Inc. ...................... 10,800 26,488
YTL Corp. BHD .................... 16,500 22,272
YTL Corp. BHD--Rights* ........... 1,650 0
-----------
3,125,649
-----------
BUILDING MATERIALS & FOREST
PRODUCTS (0.5%)
BPB PLC .......................... 90,000 502,851
Blue Circle Industries PLC ...... 13,338 74,851
Chichibu Onoda Cement Co. ........ 11,000 20,234
Cie de St. Gobain ................ 3,150 447,495
Dahl International AB+ ........... 45,000 663,107
Fujikura Ltd. .................... 132,000 874,098
Furukawa Electric Co. ............ 13,000 55,696
Heidelberg Zement AG ............. 1,100 77,106
Holderbank Financiere Glaris AG . 80 65,293
Lafarge SA ....................... 6,850 449,458
Martin Marietta Materials, Inc. . 124,200 4,541,063
Nichiha Corp. .................... 70,700 432,409
Portland Valderrivas SA .......... 4,900 440,630
Rexam PLC ........................ 13,121 64,470
RMC Group PLC .................... 4,518 63,108
Sumitomo Forestry Co. ............ 7,000 34,068
Wolseley PLC ..................... 10,088 80,070
-----------
8,886,007
-----------
ELECTRICAL EQUIPMENT (1.3%)
Alcatel Alsthom .................. 6,000 762,649
Daikin Industries Ltd. ........... 5,000 18,854
General Electric Co. ............. 255,000 18,710,625
General Electric Co. PLC ......... 61,328 397,579
Kinden Corp. ..................... 5,000 53,267
Mabuchi Motor Co. ................ 10,000 508,143
Schneider SA ..................... 2,250 122,173
Siemens AG ....................... 14,750 889,616
Sumitomo Electric Industries .... 31,000 422,916
Yaskawa Electric Corp. ........... 14,000 34,873
-----------
21,920,695
-----------
MACHINERY (1.9%)
Allied Signal, Inc. .............. 163,200 6,354,600
Amada Co. Ltd. ................... 5,000 18,586
Asahi Diamond Industry Co. Ltd. . 33,000 143,913
64
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GROWTH INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
==============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------------------------------------
Cie Generale de Geophysique SA
(ADR)* .......................... 169,223 $ 4,336,339
Coltec Industries, Inc.* ......... 128,000 2,968,000
Construcciones y Auxiliar de
Ferrecarriles SA ................ 3,000 110,666
Ebara Corp. ...................... 5,000 52,884
Enshu* ........................... 51,000 63,713
Fanuc Co. ........................ 5,900 223,384
IHC Caland N.V. .................. 10,000 518,827
Ishikawajima Harima Heavy
Industries Co. Ltd. ............. 82,000 122,552
Kalmar Industries AB+ ............ 16,050 258,744
Kawasaki Heavy Industries Ltd. .. 112,000 173,397
Keyence Corp. .................... 400 59,168
Komatsu Ltd. ..................... 29,000 145,583
Kubota Corp. ..................... 33,000 87,005
Mitsubishi Heavy Industries Ltd. . 170,000 708,795
Namura Shipbuilding .............. 20,000 45,219
Nireco ........................... 11,000 40,468
Nitta Corp. ...................... 38,600 390,512
Nitto Kohki Co. Ltd. ............. 32,000 348,266
Rauma Oy ......................... 92 1,435
Rofin-Sinar Technologies, Inc.* . 20,000 242,500
SMC Corp. ........................ 11,200 987,162
Sodick Co.* ...................... 126,000 361,173
Thai Engine Manufacturing Public
Co. Ltd. ........................ 100,000 166,148
United Technologies Corp. ........ 166,000 12,086,875
-----------
31,015,914
-----------
TOTAL CAPITAL GOODS (3.9%) ..... 65,356,985
-----------
CONSUMER CYCLICALS
AIRLINES (0.2%)
British Airways PLC .............. 45,000 414,113
Cathay Pacific Airways ........... 41,000 33,333
Japan Air Lines Co.* ............. 24,000 65,300
KLM .............................. 13,700 506,744
Lufthansa AG ..................... 58,000 1,089,747
Quantas Airways Ltd. ............. 40,000 70,773
Singapore Airlines Ltd. .......... 70,000 457,925
Virgin Express Holdings PLC
(ADR)* .......................... 24,000 498,000
-----------
3,135,935
-----------
APPAREL, TEXTILES (0.3%)
Carli Gry International A/S ..... 20,000 1,123,776
King Co. ......................... 62,000 59,398
Liz Claiborne, Inc. .............. 70,000 2,926,875
PT Great River International .... 1,709,000 139,827
Teijin Ltd. ...................... 18,000 37,663
-----------
4,287,539
-----------
AUTO RELATED (0.6%)
Asahi Glass Co. Ltd. ............. 29,000 137,804
Bridgestone Corp. ................ 22,000 477,179
Bridgestone Metalpha Corp. ...... 11,000 40,889
Denso Corp. ...................... 30,000 540,333
LucasVarity PLC .................. 15,000 52,997
Michelin (CGDE), (Class B) ...... 8,000 402,758
Minebea Co. Ltd. ................. 78,000 836,942
NGK Spark Plug Co. ............... 48,000 272,236
Republic Industries, Inc.* ...... 261,900 6,105,544
Toyoda Gosei ..................... 32,000 $ 115,762
-----------
8,982,444
-----------
AUTOS & TRUCKS (0.5%)
Daimler-Benz AG .................. 23,950 1,690,792
Fiat Spa ......................... 74,250 215,950
Harley-Davidson, Inc. ............ 249,000 6,816,375
Honda Motor Co. Ltd. ............. 3,000 110,136
Isuzu Motors Ltd. ................ 15,000 23,338
Perusahaan Otomobil Nasional .... 9,000 8,793
Peugeot SA ....................... 700 88,278
-----------
8,953,662
-----------
FOOD SERVICES, LODGING (1.5%)
AAPC Ltd. ........................ 400,000 164,165
Accor SA ......................... 9,000 1,673,341
Compass Group PLC ................ 220,000 2,707,837
Fujita Kanko, Inc. ............... 3,000 32,190
Host Marriott Corp.* ............. 250,300 4,912,137
ITT Corp.* ....................... 185,100 15,340,162
QPQ Corp.--Warrants* ............. 16,400 64
Restaurant Brands NZ Ltd.*+ ..... 300,000 296,131
Sanyo Pax Co. Ltd. ............... 33,000 285,802
Takihyo Co. Ltd. ................. 24,000 104,848
-----------
25,516,677
-----------
HOUSEHOLD FURNITURE,
APPLIANCES (1.0%)
Elamex S.A. de C.V.* ............. 73,400 550,500
Electrolux B ..................... 1,100 76,336
Industrie Natuzzi Spa (ADR) ..... 30,000 618,750
Philips Electronics .............. 2,680 160,722
Sanyo Electric Co. Ltd. .......... 56,000 145,928
Sony Corp. ....................... 12,000 1,066,871
Sunbeam Corp. .................... 320,600 13,505,275
Tostem Corp. ..................... 2,000 21,460
Toto Ltd. ........................ 5,000 31,960
-----------
16,177,802
-----------
LEISURE RELATED (1.9%)
Aristocrat Leisure Ltd. .......... 37,500 74,509
Capcom Co. Ltd. .................. 3,900 40,054
Carnival Corp. (Class A) ......... 122,200 6,766,825
Cendant Corp.* ................... 251,000 8,628,125
Cinar Films, Inc. (Class B)* .... 14,000 544,250
Cyrk, Inc.* ...................... 296,100 2,868,469
Disney (Walt) Co. ................ 66,507 6,588,350
EMI Group PLC .................... 30,001 250,445
Granada Group PLC ................ 25,587 391,039
Hoyts Cinemas Group+ ............. 500,000 879,456
Imagineer Co. Ltd. ............... 14,000 109,446
KTM Motorradholding AG* .......... 10,000 505,086
Mars Engineering Corp. ........... 4,100 22,625
NAMCO Ltd. ....................... 6,400 185,905
Nelvana Limited*+ ................ 18,000 346,287
Nintendo Co. Ltd. ................ 5,000 490,515
Nippon Broadcasting System ...... 24,000 949,147
Rank Group PLC ................... 32,498 181,040
Resorts World BHD ................ 24,000 40,417
S.M.H. Porteur AG ................ 100 55,187
Sega Enterprises Ltd. ............ 2,000 36,176
65
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GROWTH INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
==============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------------------------------------
Tag Heuer International SA (ADR)* 50,200 $ 414,150
Toei Co. Ltd. .................... 32,000 116,497
Toho Co. ......................... 400 42,614
Tokyo Dome Corp. ................. 3,000 19,958
Tourism Holdings Ltd. ............ 70,000 47,962
@Entertainment, Inc.* ............ 138,300 1,538,587
------------
32,133,121
------------
PHOTO & OPTICAL (0.1%)
Fuji Photo Film Co. .............. 16,000 613,144
Noritsu Koki Co. Ltd. ............ 43,400 1,071,071
------------
1,684,215
------------
RETAIL--GENERAL (2.9%)
Aldeasa SA* ...................... 30,823 653,484
Boots Co. PLC .................... 35,540 511,903
British Airport Authority PLC ... 40,000 327,346
Carrefour ........................ 1,225 639,113
Centros Comerciales Pryca SA .... 4,000 59,600
Daiei, Inc. ...................... 14,000 57,942
Dayton Hudson Corp. .............. 169,700 11,454,750
Dixons Group PLC ................. 160,000 1,606,494
Doshisha Co. ..................... 7,000 34,336
Eiden Sakakiya Co. Ltd. .......... 25,000 92,930
Fingerhut Companies, Inc. ........ 145,000 3,099,375
Great Universal Stores PLC........ 39,213 494,246
Harvey Nicholos PLC .............. 30,600 95,542
Hennes & Mauritz AB
(B Shares) ...................... 2,500 110,203
Homac Corp. ...................... 11,000 55,559
Home Depot, Inc. ................. 185,900 10,944,862
Home Wide Corp.................... 16,000 53,344
Isetan Co. ....................... 79,000 329,987
Japan Airport Terminal Co. Ltd. . 67,000 421,077
Karstadt AG ...................... 150 51,864
Kohls Corp.* ..................... 102,700 6,996,437
Kokuyo Co. Ltd. .................. 12,000 206,936
Koninklijke Ahold N.V. ........... 5,367 140,021
Limited, Inc. .................... 212,500 5,418,750
Marks & Spencer PLC............... 90,055 886,447
Marui Co. Ltd. ................... 7,000 108,910
Metro AG ......................... 2,280 80,860
Paris Miki, Inc. ................. 37,200 399,157
Pinault Printemps ................ 600 320,113
S.T. Dupont*+ .................... 29,100 381,005
Sainsbury (J) PLC ................ 26,514 221,774
Sato Corp. ....................... 47,440 807,180
Smith (W.H.) Group PLC ........... 70,000 447,472
Sriwani Holdings BHD ............. 278,000 73,619
Swank International Manufacturing
Co.* ............................ 300,000 32,520
Thistle Hotels PLC+ .............. 131,600 342,943
Warehouse Group Ltd. ............. 140,000 373,938
Xebio Co. Ltd. ................... 5,800 46,231
------------
48,378,270
------------
TOTAL CONSUMER CYCLICALS (9.0%) 149,249,665
------------
CONSUMER NONCYCLICALS
BEVERAGES (1.1%)
Asahi Breweries Ltd. ............. 8,000 116,497
Bass PLC ......................... 22,100 343,014
Cadbury Schweppes PLC ............ 18,792 $ 189,455
Carlsberg 'A' .................... 900 48,648
Coca-Cola Co. .................... 189,500 12,625,438
Coca-Cola Amatil Ltd. ............ 2,000 14,939
Diageo PLC ....................... 190,000 1,746,915
Heineken N.V. .................... 801 139,449
Kirin Brewery Co. ................ 16,000 116,497
Louis Dreyfus Citrus ............. 42,440 1,297,493
Panamerican Beverages, Inc. ..... 18,000 587,250
Quilmes Industrial Quins (ADR) ... 22,000 301,125
------------
17,526,720
------------
CONTAINERS (0.9%)
Owens-Illinois, Inc.* ............ 70,000 2,655,625
Sealed Air Corp.* ................ 206,300 12,739,025
Toyo Seikan Kaisha ............... 3,000 42,767
------------
15,437,417
------------
DRUGS (3.5%)
Astra AB (A Shares) .............. 25,000 432,940
Centocor, Inc.* .................. 260,602 8,665,017
Daiichi Pharmaceutical Co. ...... 5,000 56,333
Eisai Co. Ltd. ................... 5,000 76,260
Geltex Pharmaceuticals, Inc.* ... 22,700 601,550
Glaxo Wellcome PLC ............... 66,706 1,578,503
Hafslund ASA (B Shares) .......... 11,700 55,761
Merck & Co., Inc. ................ 94,700 10,061,875
Novartis AG ...................... 2,151 3,490,496
Novo-Nordisk A/S (B Shares) ..... 6,000 858,156
Orion-Yhtyma Oy (B Shares) ...... 71,000 1,875,636
Pfizer, Inc. ..................... 175,100 13,055,894
Roche Holding AG Genusscheine ... 150 1,489,730
Rohto Pharmaceutical Co. Ltd. ... 2,000 12,876
Sankyo Co. Ltd. .................. 48,000 1,085,265
Santen Pharmaceutical Co. Ltd. .. 110,000 1,264,610
Schering AG ...................... 1,250 120,556
Schering Plough Corp. ............ 110,000 6,833,750
Smithkline Beecham PLC ........... 317,338 3,248,839
Taisho Pharmaceutical Co. ........ 22,000 561,487
Yamanouchi Pharmaceutical Co.
Ltd. ............................ 86,000 1,845,564
Zeneca Group PLC ................. 30,000 1,053,522
------------
58,324,620
------------
FOODS (1.4%)
Ajinomoto Co., Inc. .............. 9,000 87,603
Campbell Soup Co. ................ 154,755 8,995,134
Fyffes PLC ....................... 1,100,000 1,643,333
Groupe Danone .................... 2,100 375,093
Karlshamns AB*+ .................. 66,000 1,030,743
Nestle SA ........................ 930 1,393,886
Nippon Meat Packers, Inc. ........ 4,000 54,570
Nissin Food Products Co. ......... 3,000 54,493
Nutricia Verenigde Bedrijven
N.V.+ ........................... 19,000 576,283
Oie Sangyo Co. Ltd. .............. 6,000 24,832
PT Sekar Bumi .................... 238,000 7,573
Rite Aid Corp. ................... 72,500 4,254,844
Shiram Industrial Enterprises
Ltd. (ADR)*+ .................... 24,000 48,000
Tingyi Holdings Corp. ............ 480,000 62,563
Tyson Foods, Inc. ................ 237,000 4,858,500
66
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GROWTH INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
==============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------------------------------------
Yamakazi Baking Co. .............. 4,000 $ 38,935
------------
23,506,385
------------
HOSPITAL SUPPLIES & SERVICES (1.3%)
Cochlear Ltd. .................... 8,000 26,058
Columbia/HCA Healthcare Corp. .... 160,000 4,740,000
Medtronic, Inc. .................. 214,068 11,198,432
NIC Corp. ........................ 4,000 21,767
Scandinavian Mobility
International A/S ............... 8,000 73,556
United Healthcare Corp. .......... 100,000 4,968,750
------------
21,028,563
------------
RETAIL--FOOD (0.2%)
Daimon Co. Ltd. .................. 10,000 19,927
Familymart Co. ................... 23,200 832,159
Ito Yokado Co. Ltd. .............. 14,000 713,547
Jusco Co. ........................ 9,000 126,921
McBride PLC ...................... 60,000 174,519
Santa Isabel S.A. (ADR) .......... 12,000 210,000
Seven-Eleven Japan Co. Ltd. ..... 18,600 1,317,218
Tesco PLC ........................ 71,199 579,158
------------
3,973,449
------------
SOAPS & TOILETRIES (1.6%)
Avon Products, Inc. .............. 141,600 8,690,700
BIC .............................. 1,200 87,590
Gillette Corp. ................... 151,970 15,263,487
L'Oreal .......................... 2,455 960,625
Unilever PLC...................... 102,420 876,881
Unilever N.V. CVA ................ 15,160 934,579
------------
26,813,862
------------
TOBACCO (1.5%)
Imperial Tobacco Group PLC ...... 127,000 799,320
Japan Tobacco, Inc. .............. 46 326,469
Philip Morris Cos., Inc. ......... 509,200 23,073,125
RJ Reynolds BHD .................. 80,000 130,608
Rothmans of Pall Mall BHD ........ 6,000 46,664
Swedish Match AB ................. 360,000 1,201,526
------------
25,577,712
------------
TOTAL CONSUMER NONCYCLICALS (11.5%) 192,188,728
------------
CREDIT SENSITIVE
BANKS (2.6%)
ABN Amro Holding N.V. ............ 26,124 508,913
Akita Bank ....................... 29,000 113,355
Asahi Bank Ltd. .................. 49,000 199,042
Banca Commerciale Italiana ...... 35,000 121,679
Banco Bilbao Vizcaya SA .......... 19,392 627,519
Banco Latinoamericano de
Exportaciones S.A. (E Shares) ... 15,000 620,625
Banco Santander SA ............... 13,221 441,712
Bank Austria AG .................. 920 46,614
Bank of Tokyo-Mitsubishi Bank
Ltd. ............................ 88,000 1,214,026
Banque Nationale de Paris ........ 4,450 236,530
Barclays PLC ..................... 30,000 797,660
Chase Manhattan Corp. ............ 109,600 12,001,200
Cie Financiere de Paribas A ..... 2,750 238,972
Citicorp ......................... 82,700 10,456,381
Credit Suisse Group .............. 6,700 1,036,768
Dai-Ichi Kangyo Bank ............. 110,000 $ 649,167
Deutsche Bank AG ................. 13,300 930,065
Dresdner Bank AG ................. 2,900 131,866
Forenings Sparbanken AB
(A Shares) ...................... 12,000 272,799
Fuji Bank Ltd. ................... 63,000 254,945
Grupo Financiero Banorte
(Class B)* ...................... 22,500 39,082
Hang Seng Bank ................... 58,000 559,492
HSBC Holdings PLC ................ 20,000 492,967
HSBC Holdings PLC (H.K.$) ........ 37,374 922,481
Instituto Mobiliare Italiano .... 10,000 118,711
Lloyds TSB Group PLC ............. 167,866 2,170,978
Malayan Banking BHD .............. 29,000 84,252
Mediobanca Spa ................... 10,000 78,519
Mitsubishi Trust & Banking Corp. 42,000 421,690
National Australia Bank Ltd. .... 55,400 773,414
Sakura Bank Ltd. ................. 82,000 234,420
Shizuoka Bank Ltd. ............... 31,000 332,631
Skandinaviska Enskilda Banken
(Series A) ...................... 103,120 1,305,251
Societe Generale ................. 2,400 326,992
Sumitomo Bank Ltd. ............... 114,000 1,301,859
Suncorp-Metway Ltd.* ............. 371,652 932,132
Svenska Handelbanken
(Series A) ...................... 3,100 107,174
Toho Bank ........................ 50,000 199,272
Union Bank of Switzerland ........ 850 1,229,168
United Overseas Bank Ltd. ........ 10,000 55,605
------------
42,585,928
------------
FINANCIAL SERVICES (5.1%)
Abbey National PLC ............... 14,314 256,628
Aiful Corp.* ..................... 8,900 603,679
Amvescap PLC ..................... 90,000 773,503
Associates First Capital Corp. .. 61,600 4,381,300
Beneficial Corp. ................. 90,200 7,497,875
CMAC Investment Corp. ............ 100,000 6,037,500
CMIC Finance & Securities Public
Co. Ltd. ........................ 200,000 0
Credit Saison Co. ................ 81,700 2,016,279
Daiwa Securities Co. Ltd. ........ 19,000 65,530
Fleet Financial Group, Inc. ..... 87,500 6,557,031
Green Tree Financial Corp. ...... 191,800 5,022,762
Groupe Bruxelles Lambert SA ..... 450 65,099
Hong Leong Finance Ltd. .......... 40,000 43,057
JCG Holdings Ltd. ................ 60,000 25,745
MBNA Corp. ....................... 524,175 14,316,530
Merrill Lynch & Co., Inc. ........ 108,900 7,942,894
Morgan Stanley, Dean Witter,
Discover & Co. .................. 389,100 23,005,538
Newcourt Credit Group, Inc.* .... 57,200 1,909,050
Nichiei Co. Ltd. ................. 4,600 490,056
Nomura Securities Co. ............ 61,000 813,489
PMI Group, Inc. .................. 15,900 1,149,769
Sanyo Shinpan Finance Co. Ltd. .. 8,000 353,784
Schroders PLC .................... 3,875 121,816
Takefuji Corp. ................... 32,160 1,476,439
------------
84,925,353
------------
67
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GROWTH INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
==============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------------------------------------
INSURANCE (4.0%)
Aegon N.V. ....................... 12,000 $ 1,068,232
Allianz AG ....................... 9,000 2,321,354
Assicurazioni Generali ........... 21,800 535,449
ASR Verzekeringsgroep N.V. ...... 22,900 1,245,713
Commercial Union PLC ............. 10,726 149,645
Corporacion Mapfre Cia Inter SA .. 44,000 1,166,787
Fortis AG ........................ 740 154,387
Fortis Amev N.V. ................. 17,000 741,154
General Accident PLC ............. 8,971 155,529
GIO Australia Holdings Ltd. ..... 200,000 511,127
ING Groep N.V. ................... 30,000 1,263,532
Istituto Naz Delle Assicurazioni 60,000 121,594
Koa Fire & Marine ................ 12,000 45,066
Legal & General Group PLC ........ 23,090 201,862
Life Re Corp. .................... 240,000 15,645,000
MGIC Investment Corp. ............ 97,300 6,470,450
Mitsui Marine & Fire Insurance
Co. ............................. 13,000 66,358
Norwich Union PLC* ............... 90,000 576,800
Pacific & Orient BHD ............. 150,000 68,646
PennCorp Financial Group, Inc. .. 144,600 5,160,412
Providian Financial Corp. ........ 128,500 5,806,594
Prudential Corp. PLC.............. 62,486 753,697
Royal & Sun Alliance Insurance
Group PLC ....................... 49,613 499,774
Schweizerische
Ruckversicherungs-Gesellschaft .. 640 1,197,179
Skandia Forsakrings AB ........... 2,500 117,917
Tokio Marine & Fire Insurance Co. 34,000 385,668
Travelers Group, Inc. ............ 346,401 18,662,354
Willis Corroon Group PLC (ADR) .. 131,800 1,622,787
-----------
66,715,067
-----------
REAL ESTATE (1.3%)
Boston Properties, Inc. .......... 171,200 5,660,300
British Land Co. PLC.............. 8,416 94,183
Castellum AB* .................... 119,000 1,184,020
Cheung Kong Holdings ............. 59,000 386,405
City Developments Ltd. ........... 50,000 231,936
Daibiru Corp. .................... 17,000 124,430
DBS Land ......................... 17,000 26,084
Diligentia AB* ................... 800 10,680
Glenborough Realty Trust, Inc. .. 165,000 4,888,125
Land Securities PLC .............. 9,978 159,050
Lend Lease Corp. Ltd. ............ 4,100 80,128
MEPC PLC ......................... 8,200 68,453
Mitsubishi Estate Co. ............ 14,000 152,366
Mitsui Fudosan ................... 20,000 193,140
Nackebro Fastighets AB ........... 310 4,509
New World Development Co. ........ 48,000 166,009
Sap Holdings BHD ................. 40,000 14,912
Singapore Land Ltd. .............. 80,000 176,033
Sino Land Co. .................... 740,000 446,445
Spieker Properties, Inc. ......... 81,800 3,507,175
Sumitomo Realty & Development Co.
Ltd. ............................ 137,000 787,507
Sun Hung Kai Properties .......... 48,000 334,495
Vornado Realty Trust ............. 54,900 2,576,869
Wharf Holdings ................... 17,000 $ 37,295
-----------
21,310,549
-----------
UTILITY--ELECTRIC (1.3%)
AES Corp.* ....................... 123,200 5,744,200
British Energy PLC ............... 400,000 2,780,471
China Light & Power Co. Ltd. .... 36,000 199,768
Cia Paranaense de Energia-Copel
(ADR) ........................... 124,000 1,697,250
Edison Spa ....................... 15,000 90,729
Electrabel SA..................... 1,290 298,380
Electricidade de Portugal SA* ... 50,800 961,902
Endesa SA ........................ 34,256 608,221
Energis PLC* ..................... 415,000 1,739,027
Energy Group PLC ................. 13,333 147,236
Enersis S.A. (ADR) ............... 6,000 174,000
Gas Y Electridad SA (Series 2) .. 5,000 361,011
Hibroelectrica del Cantabrico ... 12,000 526,157
Iberdrola SA ..................... 90,000 1,184,444
Kansai Electric Power Co., Inc. . 22,400 379,414
National Grid Group PLC .......... 180,000 854,846
National Power PLC ............... 120,560 1,188,701
Powergen PLC (ADR) ............... 1,250 66,406
RWE AG ........................... 8,600 461,325
Tenaga Nasional BHD .............. 85,000 181,386
Tohoku Electric Power Co., Inc. . 11,500 174,516
Tokyo Electric Power Co. ......... 28,000 510,749
<PAGE>
Tractebel Investment
International Capital ........... 1,100 95,895
Tractebel Investment
International Capital--Warrants* 220 0
Veba AG .......................... 15,000 1,021,429
Viag AG .......................... 500 273,771
-----------
21,721,234
-----------
UTILITY--GAS (0.0%)
Centrica PLC* .................... 100,557 147,895
Thames Water ..................... 7,439 110,816
-----------
258,711
-----------
UTILITY--TELEPHONE (1.2%)
British Telecommunications PLC ... 181,984 1,430,979
Cable & Wireless PLC ............. 53,873 473,634
Empresas Telex-Chile S.A. (ADR) . 14,100 55,519
Hellenic Telecommunication
Organization SA ................. 18,272 374,368
Hellenic Telecommunication
Organization SA--Rights* ........ 17,000 0
Koninklijke Nedlloyd Groep N.V.+ 10,000 417,232
Portugal Telecom SA .............. 5,670 263,090
Pt Indosat (ADR) ................. 9,100 175,744
Singapore Telecommunications Ltd. 66,000 123,247
Telecom Italia Spa ............... 54,165 345,994
Telefonica de Espana ............. 32,829 937,356
Telefonica del Peru S.A. (ADR) .. 32,000 746,000
Telekom Malaysia BHD ............. 67,500 199,576
Telephone & Data Systems, Inc. .. 62,100 2,891,531
Teleport Communications Group,
Inc. (Class A)* ................. 202,400 11,106,700
68
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GROWTH INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
==============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------------------------------------
Videsh Sanchar Nigam Ltd. (GDR)* 50,000 $ 646,250
------------
20,187,220
------------
TOTAL CREDIT SENSITIVE (15.5%) .. 257,704,062
------------
ENERGY
COAL & GAS PIPELINES (0.1%)
BG PLC ........................... 125,808 566,471
BG PLC 'B'* ...................... 142,583 67,949
OMV AG ........................... 6,000 831,255
------------
1,465,675
------------
OIL--DOMESTIC (2.3%)
Apache Corp. ..................... 199,100 6,980,944
Louis Dreyfus Natural Gas Corp.* 164,700 3,077,831
Murphy Oil Corp. ................. 90,000 4,876,875
Tom Brown, Inc.* ................. 50,000 962,500
Union Pacific Resources Group,
Inc. ............................ 346,700 8,407,475
USX-Marathon Group ............... 391,200 13,203,000
------------
37,508,625
------------
OIL--INTERNATIONAL (1.5%)
AO Tatneft (ADR) ................. 37,000 5,272,500
British Petroleum Co. PLC ........ 149,481 1,965,142
Cosmo Oil Co. Ltd. ............... 11,000 16,693
Elf Aquitaine .................... 15,200 1,767,882
Gulf Canada Resources Ltd.* ..... 1,352,400 9,466,800
Gulf Indonesia Resources Ltd.* .. 52,500 1,155,000
Mitsubishi Oil Co. ............... 8,000 11,834
Nippon Oil Co. Ltd. .............. 22,000 56,823
Norsk Hydro ASA .................. 2,100 102,216
Oil Search Ltd. .................. 300,000 542,136
Petrofina SA ..................... 290 107,035
Petroleo Brasileiro S.A. (ADR) .. 45,000 1,052,397
Repsol SA ........................ 12,748 543,892
Royal Dutch Petroleum Co. ........ 50,788 2,787,811
Total SA-B ....................... 900 97,948
------------
24,946,109
------------
OIL--SUPPLIES & CONSTRUCTION (4.8%)
Baker Hughes, Inc. ............... 204,250 8,910,406
BJ Services Co.* ................. 59,000 4,244,312
Bouygues Offshore SA (ADR) ...... 45,900 998,325
Canadian Fracmaster Ltd. ......... 117,800 1,730,596
Canadian Fracmaster Ltd.
Installment Receipts*+ .......... 347,500 2,917,206
Coflexip (ADR) ................... 11,000 610,500
Diamond Offshore Drilling, Inc. . 60,000 2,887,500
Dresser Industries, Inc. ......... 294,000 12,329,625
Halliburton Co. .................. 250,800 13,025,925
Nabors Industries, Inc.* ......... 475,000 14,932,813
Noble Drilling Corp.* ............ 499,200 15,288,000
Parker Drilling Corp.* ........... 185,500 2,260,781
------------
80,135,989
------------
RAILROADS (0.0%)
East Japan Railway Co. ........... 55 248,285
Odakyu Electric Railway Co. ..... 4,000 17,291
Tobu Railway Co. Ltd. ............ 14,000 $ 43,778
Tokyu Corp. ...................... 17,000 65,668
------------
375,022
------------
TOTAL ENERGY (8.7%) ............. 144,431,420
------------
TECHNOLOGY
ELECTRONICS (2.7%)
Altera Corp.* .................... 108,100 3,580,812
Applied Materials, Inc.*+ ........ 164,800 4,964,600
Austria Mikro Systeme
International+ .................. 1,430 72,454
Cisco Systems, Inc.* ............. 362,550 20,212,163
Electrocomponents PLC ............ 8,375 62,345
Enplas Corp. ..................... 21,000 283,273
Fujimi, Inc. ..................... 10,200 433,876
Hitachi Ltd. ..................... 94,000 670,013
Hoya Corp. ....................... 30,000 942,709
Kyocera Corp. .................... 1,000 45,373
Micronics Japan Co. Ltd. ......... 10,000 172,447
National Semiconductor Corp.* ... 195,300 5,065,594
Nikon Corp. ...................... 52,000 514,121
Rohm Co. Ltd. .................... 10,000 1,019,352
Sankyo Engineering Co. ........... 4,000 12,263
Sterling Commerce, Inc.* ......... 75,000 2,882,812
TDK Corp. ........................ 22,000 1,659,168
Teradyne, Inc.* .................. 55,000 1,760,000
Tokyo Electron ................... 2,300 73,685
TOWA Corp. ....................... 5,700 118,391
Yokogawa Electric Corp. .......... 121,000 747,469
------------
45,292,920
------------
OFFICE EQUIPMENT (2.3%)
Canon, Inc. ...................... 16,000 372,792
Ceridian Corp.* .................. 250,400 11,471,450
Compaq Computer Corp. ............ 189,475 10,693,495
Dell Computer Corp.* ............. 116,000 9,744,000
Fujitsu General Co. .............. 28,000 300,440
Oce-Van De Grinten N.V. .......... 460 50,137
Policy Management Systems Corp.* 86,300 6,003,244
Ricoh Elemex Corp. ............... 11,000 80,092
------------
38,715,650
------------
OFFICE EQUIPMENT SERVICES (0.6%)
Accugraph Corp. (Class A)* ...... 15,000 8,920
Data Communication System Co. .... 25,000 329,565
First Data Corp. ................. 136,030 3,978,877
Fuji Soft ABC, Inc. .............. 21,400 733,152
INES Corp. ....................... 22,000 170,301
Misys (Jersey) Ltd.*.............. 7,142 215,951
Misys PLC ........................ 25,000 755,920
Nippon System Development ........ 14,000 287,565
Oracle Corp.* .................... 113,562 2,533,863
SAP AG ........................... 2,000 606,465
------------
9,620,579
------------
TELECOMMUNICATIONS (4.3%)
ADC Telecommunications, Inc.* .... 210,200 8,775,850
Corecomm, Inc.* .................. 3,600 36,450
DDI Corp. ........................ 145 383,407
DSC Communications Corp.* ........ 127,500 3,060,000
E.R.G. Limited ................... 792,578 666,058
69
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GROWTH INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
==============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------------------------------------
Ericsson LM (B Shares) ........... 24,700 $ 928,595
Filtronic Comtek PLC ............. 300,000 2,181,487
Hong Kong Telecommunications ..... 88,800 182,780
ICG Communications, Inc.* ........ 1,691 46,080
Intermedia Communications, Inc.* 289 17,587
Lucent Technologies, Inc. ........ 116,000 9,265,500
Mannesmann AG .................... 350 175,686
MCI Communications Corp. ......... 182,500 7,813,281
NetCom Systems AB (B Shares)*+ .. 31,650 679,646
Nextel Communications, Inc.
(Class A)* ...................... 148,600 3,863,600
SK Telecom Co. Ltd. (ADR)* ...... 131,552 855,085
Spectrum Network Systems Ltd.*+ . 440,000 94,590
Tadiran Telecommunications Ltd. .. 30,000 416,250
Tellabs, Inc.* ................... 127,000 6,715,125
Tele-Communications TCI Ventures
Group (Class A)*................. 210,000 5,945,625
Videsh Sanchar Nigam Ltd. (GDR)*+ 1,000 13,930
Vodafone Group PLC ............... 200,000 1,442,821
WorldCom, Inc.* .................. 564,430 17,074,008
---------------
70,633,441
---------------
TOTAL TECHNOLOGY (9.9%) ......... 164,262,590
---------------
DIVERSIFIED
MISCELLANEOUS (1.5%)
BTR PLC .......................... 90,000 272,131
Cie Generale de Eaux ............. 10,850 1,514,331
Crean (James) PLC--Units ......... 40,000 81,384
Damskibs AS (Class B) ............ 5 230,593
GKN PLC .......................... 5,325 109,120
Hanson PLC ....................... 16,666 74,391
Hutchison Whampoa ................ 123,000 771,428
Indonesia Fund, Inc.* ............ 2,200 10,175
Industrias CH S.A.
(B Shares)* ..................... 80,000 476,427
International UNP Holdings* ..... 143,000 12,005
International UNP
Holdings--Warrants* ............. 125,000 0
Lagardere S.C.A. ................. 2,100 69,436
Mitsubishi Corp. ................. 16,000 126,308
Mitsui & Co. ..................... 39,000 230,757
Montedison Spa ................... 74,000 66,470
Pilkington PLC ................... 17,397 36,450
Sime Darby BHD ................... 180,000 173,081
Smiths Industries ................ 5,559 77,466
Sophus Berendsen A/S 'B' ......... 385 63,493
Suez Lyonnaise des Eaux .......... 1,000 110,659
Sumitomo Corp. ................... 22,000 123,089
Swire Pacific Ltd. (Class A) .... 50,000 274,229
Tomkins PLC ...................... 70,000 334,741
Tyco International Ltd. .......... 337,962 15,229,413
Williams Holdings PLC ............ 10,569 58,705
U.S. Industries, Inc. ............ 134,550 $ 4,053,319
---------------
TOTAL DIVERSIFIED (1.5%) ........ 24,579,601
---------------
TOTAL COMMON STOCKS AND OTHER
INVESTMENTS (66.5%)
(Cost $947,340,600) ............. 1,107,614,035
---------------
PREFERRED STOCKS:
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (0.1%)
Republic Industries, Inc.
6.5% Exch. Conv.................. 36,700 862,450
---------------
PRINTING, PUBLISHING &
BROADCASTING (0.0%)
ProSieben Media AG* .............. 9,000 412,741
---------------
TRUCKING, SHIPPING (0.0%)
CNF Trust I
5.0% Conv. Series A ............. 15,000 855,000
---------------
TOTAL BUSINESS SERVICES (0.1%) .. 2,130,191
---------------
CAPITAL GOODS (0.1%)
AEROSPACE
Loral Space & Communications:
6.0% Conv. ...................... 15,700 959,663
6.0% Conv. ...................... 12,600 774,900
---------------
1,734,563
---------------
<PAGE>
CONSUMER CYCLICALS
AIRLINES (0.1%)
Continental Airlines Finance
Trust 8.5% Conv. ................ 14,300 1,471,112
---------------
LEISURE RELATED (0.0%)
Village Roadshow Ltd. ............ 10,000 20,560
---------------
RETAIL--GENERAL (0.0%)
Fielmann AG ...................... 3,000 65,038
---------------
TOTAL CONSUMER CYCLICALS (0.1%) 1,556,710
---------------
CREDIT SENSITIVE (0.1%)
UTILITY--ELECTRIC
AES Trust I
5.375% Conv. Series A ........... 18,100 1,298,675
---------------
ENERGY (0.1%)
OIL--DOMESTIC
Devon Financing Trust
$3.25 Conv. ..................... 9,200 673,900
---------------
TECHNOLOGY
TELECOMMUNICATIONS (0.5%)
Intermedia Communications, Inc.:
7.0% Conv. Series D ............. 17,700 725,700
7.0% Conv.+ ..................... 23,000 943,000
Mobile Telecommunications
$2.25 Conv. ..................... 22,100 740,350
Nextel Strypes Trust
7.25% Conv. ..................... 40,700 966,625
Nokia Oyj (A Shares) ............. 19,092 1,355,471
QualComm Financial Trust:
5.75% Conv.+ .................... 29,400 1,376,288
5.75% Conv. ..................... 4,900 229,381
70
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GROWTH INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
==============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------------------------------------
WorldCom, Inc.
8.0% Conv. ...................... 23,000 $ 2,415,000
-----------
TOTAL TECHNOLOGY (0.5%) ......... 8,751,815
-----------
TOTAL PREFERRED STOCKS (1.0%)
(Cost $13,527,581) .............. 16,145,854
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
-----------
<S> <C> <C>
LONG-TERM DEBT SECURITIES:
BUSINESS SERVICES
PROFESSIONAL SERVICES (0.1%)
Career Horizons, Inc.
7.0% Conv., 11/01/02 ............ $ 605,000 1,258,400
Personnel Group of America:
5.75% Conv., 07/01/04 ........... 65,000 73,775
5.75% Conv., 07/01/04+ .......... 295,000 334,825
-----------
TOTAL BUSINESS SERVICES (0.1%) .. 1,667,000
-----------
CAPITAL GOODS
AEROSPACE (0.0%)
Orbital Sciences Corp.
5.0% Conv., 10/01/02+ ........... 470,000 600,425
-----------
BUILDING & CONSTRUCTION (0.0%)
Halter Marine Group, Inc.
4.5% Conv., 09/15/04+ ........... 540,000 606,825
-----------
MACHINERY (0.1%)
DII Group, Inc.
6.0% Conv., 10/15/02+ ........... 800,000 1,223,000
-----------
TOTAL CAPITAL GOODS (0.1%) ..... 2,430,250
-----------
CONSUMER CYCLICALS
FOOD SERVICES, LODGING (0.1%)
Cendant Corp.
4.75% Conv., 03/01/03 ........... 1,620,000 2,178,900
-----------
RETAIL--GENERAL (0.1%)
U.S. Office Products Co.
5.5% Conv., 02/01/01 ............ 1,160,000 1,378,950
-----------
TOTAL CONSUMER CYCLICALS (0.2%) 3,557,850
-----------
CONSUMER NONCYCLICALS
DRUGS (0.2%)
MedImmune, Inc.:
7.0% Conv. Sub., 07/01/03+ ..... 400,000 909,500
7.0% Conv., 07/01/03 ............ 535,000 1,216,456
Quintiles Transnational Corp.:
4.25% Conv., 05/31/00+ .......... 460,000 516,925
4.25% Conv., 05/31/00 ........... 300,000 337,125
-----------
2,980,006
-----------
HOSPITAL SUPPLIES & SERVICES (0.1%)
FPA Medical Management, Inc.:
6.5% Conv., 12/15/01+............ 630,000 642,600
6.5% Conv., 12/15/01 ............ 435,000 443,700
RES-Care, Inc.
6.0% Conv., 12/01/04 ............ 820,000 934,800
-----------
2,021,100
-----------
MEDIA & CABLE (0.6%)
Time Warner, Inc.
9.125%, 01/15/13 ................ 9,100,000 10,836,007
-----------
TOTAL CONSUMER NONCYCLICALS (0.9%) 15,837,113
-----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
=============================================================
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- -------------------------------------------------------------
<S> <C> <C>
CREDIT SENSITIVE
BANKS (1.6%)
Deutsche Bank
6.7%, 12/13/06 ................ $ 8,000,000 $ 8,110,160
Dime Capital Trust I
9.33%, 05/06/27 ............... 7,600,000 8,596,816
Grupo Financiero Banorte
Zero Coupon, 12/05/02.......... 208 2,581
St. George Bank Ltd.
7.15%, 10/15/05+ .............. 9,525,000 9,812,845
-----------
26,522,402
-----------
FINANCIAL SERVICES (1.1%)
Corp Andina de Fomento
7.25%, 03/01/07 ............... 10,700,000 10,845,734
RAC Financial Group, Inc.:
7.25% Conv. Sub., 08/15/03+ .. 505,000 1,217,050
7.25% Conv., 08/15/03 ......... 110,000 265,100
World Financial Property
6.95%, 09/01/13+ .............. 5,250,000 5,386,028
-----------
17,713,912
-----------
INSURANCE (0.1%)
Penn Treaty American Corp.:
6.25% Conv., 12/01/03+ ........ 735,000 947,231
6.25% Conv., 12/01/03 ......... 170,000 219,088
-----------
1,166,319
-----------
MORTGAGE RELATED (2.9%)
Federal Home Loan Mortgage
Corp.:
7.0%, 09/01/11 ................ 9,079,051 9,218,079
7.0%, 01/01/12 ................ 4,375,706 4,442,711
Federal National Mortgage
Association:
6.5%, 01/01/11 ................ 833,640 834,161
6.0%, 04/01/11 ................ 11,048,388 10,868,852
6.5%, 08/01/11 ................ 8,045,115 8,050,143
7.0%, 05/01/26 ................ 9,539,154 9,604,736
7.0%, 09/01/27 ................ 3,498,078 3,522,127
7.0%, 08/01/26 ................ 2,369,822 2,386,114
-----------
48,926,923
-----------
U.S. GOVERNMENT (12.9%)
U.S. Treasury:
6.125% Note, 08/31/98 ......... 4,375,000 4,390,041
6.375% Note, 05/15/99 ......... 25,925,000 26,159,958
6.0% Note, 08/15/00 ........... 31,150,000 31,373,906
6.25% Note, 04/30/01 .......... 26,500,000 26,914,063
6.5% Note, 08/31/01 ........... 37,400,000 38,323,331
6.5% Note, 05/31/02 ........... 37,600,000 38,704,500
6.875% Note, 05/15/06 ......... 13,605,000 14,561,608
6.125% Bond, 11/15/27 ......... 33,855,000 34,786,013
-----------
215,213,420
-----------
TOTAL CREDIT SENSITIVE (18.6%) 309,542,976
-----------
ENERGY
COAL & GAS PIPELINES (0.1%)
Nabors Industries, Inc.
5.0% Conv., 05/15/06 .......... 845,000 1,529,450
-----------
GAS (0.2%)
Ras Laffan Liquid Natural Gas
8.294%, 03/15/14+ ............. 3,500,000 3,293,521
-----------
71
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GROWTH INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1997
==============================================================
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- --------------------------------------------------------------
OIL--SUPPLIES & CONSTRUCTION (0.2%)
Diamond Offshore Drilling, Inc.
3.75% Conv. Sub. Note,
02/15/07 ...................... $ 860,000 $ 1,138,425
Parker Drilling Corp.
5.5% Conv. Sub. Note,
08/01/04....................... 760,000 814,625
Seacor Holdings, Inc.:
5.375% Conv., 11/15/06 ........ 605,000 685,162
5.375% Conv., 11/15/06+ ...... 70,000 79,275
--------------
2,717,487
--------------
TOTAL ENERGY (0.5%) ........... 7,540,458
--------------
TECHNOLOGY
ELECTRONICS (1.0%)
Altera Corp.
5.75% Conv. Sub. Note,
06/15/02+ ..................... 1,165,000 1,598,962
Baan Co.:
4.5% Conv. Sub. Note,
12/15/01+ ..................... 645,000 988,463
4.5% Conv. Sub. Note,
12/15/01...................... 180,000 275,850
Cymer, Inc.
3.5%, 08/06/04+ (a) ........... 1,065,000 805,406
Integrated Process Equipment
6.25% Conv., 09/15/04+ ........ 1,585,000 1,313,569
Level One Communications:
4.0% Conv., 09/01/04+ ......... 910,000 855,400
4.0% Conv., 09/01/04 .......... 280,000 263,200
Photronics, Inc.
6.0% Conv., 06/01/04 .......... 1,485,000 1,702,181
Quantum Corp.
5.0% Conv., 03/01/03+ ......... 280,000 508,200
Sanmina Corp.
5.5% Conv., 08/15/02+ ......... 1,010,000 2,447,988
SCI Systems, Inc.
5.0% Conv., 05/01/06+.......... 1,310,000 2,439,875
Solectron Corp.
6.0% Conv., 03/01/06+ ......... 855,000 1,172,419
Wind River Systems, Inc.
5.0% Conv., 08/01/02+ ......... 1,000,000 1,070,000
Xilinx, Inc.
5.25% Conv., 11/01/02+ ........ 1,400,000 1,354,500
--------------
16,796,013
--------------
TELECOMMUNICATIONS (0.1%)
Comverse Technology, Inc.:
5.75% Conv. Sub., 10/01/06+ .. 1,295,000 1,395,362
5.75% Conv., 10/01/06 ......... 45,000 48,488
--------------
1,443,850
--------------
TOTAL TECHNOLOGY (1.1%) ...... 18,239,863
--------------
DIVERSIFIED (0.0%)
MISCELLANEOUS
Brierley Investment Ltd.
9.0% Conv. Sub. Note,
06/30/98 ...................... $ 14,000 $ 9,105
--------------
TOTAL LONG-TERM DEBT SECURITIES (21.5%)
(Amortized Cost $347,094,868) . 358,824,615
--------------
SHORT-TERM DEBT SECURITIES:
BANKERS' ACCEPTANCE (1.2%)
Suntrust Bank
5.73%, due 01/26/98 ........... 20,000,000 19,920,416
--------------
CERTIFICATES OF DEPOSIT (1.5%)
Deutsche Bank
5.75%, due 01/20/98 ........... 25,000,000 24,997,471
--------------
COMMERCIAL PAPER (0.9%)
Province of Quebec
5.68%, due 01/12/98 ........... 15,000,000 14,973,967
--------------
U.S. GOVERNMENT AGENCIES (6.9%)
Federal Home Loan Mortgage
Corp.
6.0%, due 01/02/98 ............ 114,900,000 114,880,850
--------------
TOTAL SHORT-TERM DEBT SECURITIES (10.5%)
(Amortized Cost $174,772,704) 174,772,704
--------------
<PAGE>
TOTAL INVESTMENTS (99.5%)
(Cost/Amortized Cost $1,482,735,753) 1,657,357,208
OTHER ASSETS
LESS LIABILITIES (0.5%) ...... 8,761,507
--------------
NET ASSETS (100.0%) ............ $1,666,118,715
==============
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
DISTRIBUTION OF INVESTMENTS BY
GLOBAL REGION
As a Percentage of Total
Investments
Canada ................... 0.3%
France ................... 0.8
Germany .................. 0.9
Japan .................... 3.5
Netherlands .............. 0.9
New Zealand & Australia . 0.5
Scandinavia .............. 1.0
Southeast Asia............ 0.4
Spain .................... 0.5
Switzerland .............. 0.6
United Kingdom............ 3.1
United States ** ......... 86.8
Other European Countries 0.7
-----
100.0%
=====
</TABLE>
- ------------
* Non-income producing.
** Includes Short-Term Debt Securities of 10.5%.
+ Security exempt from registration under 144A of the securities Act of
1933. These securities may only be resold to qualified institutional
buyers. At December 31, 1997, these securities amounted to $61,346,584
or 3.7% of net assets.
(a) Coupon will increase periodically based upon a predetermined schedule.
Stated interest rate in effect at December 31, 1997.
Glossary:
ADR--American Depository Receipt
GDR--Global Depository Receipt
See Notes to Financial Statements.
72
<PAGE>
THE HUDSON RIVER TRUST
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
1. Organization and Significant Accounting Policies
The Hudson River Trust (the "Trust") (successor to The Hudson River Fund,
Inc., a Maryland corporation organized in 1984) was formed as a Massachusetts
business trust on July 10, 1987 and is registered under the Investment
Company Act of 1940 (the "1940 Act"), as amended, as an open-end management
investment company. The Trust issues shares of beneficial interest currently
divided among fourteen Portfolios (the "Portfolios"): Alliance Money Market,
Alliance Intermediate Government Securities, Alliance Quality Bond, Alliance
High Yield, Alliance Growth and Income, Alliance Equity Index, Alliance
Common Stock, Alliance Global, Alliance International, Alliance Aggressive
Stock, Alliance Small Cap Growth, Alliance Conservative Investors, Alliance
Balanced and Alliance Growth Investors. Effective October 2, 1996, the Trust
made available a second class of shares, Class IB, for each of the Trust's
Portfolios. In connection with the Class IB shares offering, the existing
class of shares was redesignated Class IA. The Class IB shares are subject to
distribution fees imposed under a distribution plan (the "Distribution Plan")
adopted pursuant to Rule 12b-1 under the 1940 Act. Under the Trust's multiple
class distribution system, both classes of shares have identical voting,
dividend, liquidation, and other rights, other than the payment of
distribution fees under the Distribution Plan.
Class IA shares are offered to separate accounts of The Equitable Life
Assurance Society of the United States ("Equitable"), a wholly-owned
subsidiary of The Equitable Companies Incorporated, Equitable Variable Life
Insurance Company ("Equitable Variable"), a wholly-owned subsidiary of the
Equitable, and to separate accounts of other insurance companies unaffiliated
with Equitable and Equitable Variable. Effective January 1, 1997, Equitable
Variable was merged into Equitable. Class IB shares are offered to an
insurance company separate account of Equitable. Effective March 12, 1997,
the Trust's Board of Trustees approved the establishment of the Alliance
Small Cap Growth Portfolio at an initial share value of $10. The Portfolio
commenced operations on May 1, 1997.
The investment objectives of each Portfolio are as follows:
Alliance Money Market Portfolio -- High level of current income, preserve
its assets and maintain liquidity. The Portfolio pursues this objective by
investing in primarily high quality U.S. dollar denominated money market
instruments.
Alliance Intermediate Government Securities Portfolio -- High current
income consistent with relative stability of principal through investment
primarily in debt securities issued or guaranteed as to principal and
interest by the U.S. Government or any of its agencies or instrumentalities.
Alliance Quality Bond Portfolio -- High current income consistent with
preservation of capital by investing primarily in investment grade fixed
income securities. The Portfolio reserves the right to invest in convertible
debt securities, preferred stocks and dividend-paying common stocks.
Alliance High Yield Portfolio -- High return by maximizing current income
and, to the extent consistent with that objective, capital appreciation. The
Portfolio pursues this objective by investing primarily in a diversified mix
of high yield, fixed income securities involving greater volatility of price
and risk of principal and income than high quality fixed income securities.
The medium and lower quality debt securities in which the Portfolio may
invest are known as "junk bonds."
Alliance Growth and Income Portfolio -- High total return through a
combination of current income and capital appreciation by investing primarily
in income-producing common stocks and securities convertible into common
stocks.
Alliance Equity Index Portfolio -- Total return before expenses that
approximates the total return performance of the Standard & Poor's
Corporation 500 Index, including reinvestment of dividends, at a risk level
consistent with that of the Index.
Alliance Common Stock Portfolio -- Long-term growth of its capital and
increase income. The Portfolio pursues this objective by investing primarily
in common stock and other equity-type instruments.
73
<PAGE>
THE HUDSON RIVER TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997
Alliance Global Portfolio -- Long-term growth of capital. The Portfolio
pursues this objective by investing primarily in equity securities of
non-United States companies as well as United States issuers.
Alliance International Portfolio -- Long-term growth of capital by
investing primarily in a diversified portfolio of equity securities selected
principally to permit participation in non-United States companies with
prospects for growth.
Alliance Aggressive Stock Portfolio -- Long-term growth of capital. The
Portfolio pursues this objective by investing primarily in common stocks and
other equity-type securities issued by quality small and intermediate sized
companies with strong growth prospects.
Alliance Small Cap Growth Portfolio -- Long-term growth of capital. The
Portfolio pursues this objective by investing primarily in common stocks and
other equity-type securities issued by smaller-sized companies with strong
growth potential.
Alliance Conservative Investors Portfolio -- High total return without, in
the investment adviser's opinion, undue risk to principal. The Portfolio
pursues this objective by investing in a diversified mix of publicly traded
equity and debt securities.
Alliance Balanced Portfolio -- High return through both appreciation of
capital and current income. The Portfolio pursues this objective by investing
in a diversified portfolio of publicly traded equity and debt securities and
short-term money market instruments.
Alliance Growth Investors Portfolio -- Highest total return consistent
with the investment adviser's determination of reasonable risk. The Portfolio
pursues this objective by investing in a diversified mix of publicly traded
equity and fixed income securities, including at times common stocks issued
by intermediate and small-sized companies and at times fixed income
securities that are medium and lower quality debt securities known as "junk
bonds."
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures. Actual results
could differ from those estimates.
The following is a summary of the significant accounting policies of the
Trust:
Stocks listed on national securities exchanges and certain
over-the-counter issues traded on the NASDAQ national market system are
valued at the last sale price or, if there is no sale, at the latest
available bid price. Other unlisted stocks are valued at their last sale
price or, if no reported sale during the day, at a bid price estimated by a
broker.
Convertible preferred stocks listed on national securities exchanges are
valued as of their last sale price or, if there is no sale, at the latest
available bid price.
Convertible bonds and unlisted convertible preferred stocks are valued at
bid prices obtained from one or more of the major dealers in such securities.
Where there is a discrepancy between dealers, values may be adjusted based on
recent premium spreads to the underlying common stocks.
Mortgage backed and asset backed securities are valued at prices obtained
from a bond pricing service where available, or at a bid price obtained from
one or more of the major dealers in such securities. If a quoted price is
unavailable, an equivalent yield or yield spread quotes will be obtained from
a broker and converted to a price.
Purchased options, including options on futures, are valued at their last
bid price. Written options are valued at their last asked price.
Long-term corporate bonds are valued at prices obtained from a bond
pricing service of a major dealer in bonds when such prices are available;
however, when such prices are not available, such bonds are valued at a bid
price estimated by a broker.
74
<PAGE>
THE HUDSON RIVER TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997
U.S. Treasury securities and other obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities are valued at
representative quoted prices.
Foreign securities not traded directly, or in American Depository Receipt
(ADR) or similar form in the United States, are valued at representative
quoted prices in the currency of the country of origin.
Except for the Alliance Money Market Portfolio, short-term debt securities
which mature in 60 days or less are valued at amortized cost, which
approximates market value. Short-term debt securities which mature in more
than 60 days are valued at representative quoted prices. Short-term debt
securities held in the Alliance Money Market Portfolio are valued at
representative quoted prices regardless of the length of maturity.
Futures and forward contracts are valued at their last sale price or, if
there is no sale, at the latest available bid price.
Other securities, including restricted securities, and assets for which
market quotations are not readily available or for which valuation cannot be
provided, are valued at "fair value" as determined in good faith by the
Valuation Committee of the Board of Trustees.
Securities transactions are recorded on the trade date net of brokerage
fees, commissions, and transfer fees.
Interest income (including amortization of premium and discount on
securities using the effective yield method) is accrued daily. Dividend
income is recorded on the ex-dividend date.
Realized gains and losses on the sale of investments are computed on the
basis of the identified cost of the related investments sold.
Expenses attributable to a single Portfolio are charged to that Portfolio.
Expenses of the Trust are charged to each Portfolio in proportion to net
assets.
The Board of Trustees has approved the lending of portfolio securities,
through its custodian bank, Chase Manhattan Bank, N.A. ("Chase"), acting as
lending agent, to certain broker-dealers in exchange for negotiated lenders'
fees. Any such loan of portfolio securities will be continuously secured by
collateral at least equal to the value of the securities loaned. All loans
will be collateralized in the form of cash or U.S. Government securities.
Chase invests the cash collateral in short-term investments and retains a
portion of the interest earned. Chase will indemnify the Portfolios for any
loss resulting from a borrower's failure to return a loaned security when
due. The following table shows the value of securities loaned and collateral
received at December 31, 1997, and the security loan fees received, net of
rebates paid, for the year ended December 31, 1997. Such net fees are
included in interest income in the accompanying Statements of Operations.
<TABLE>
<CAPTION>
VALUE OF VALUE OF SECURITY LOAN
PORTFOLIO SECURITIES LOANED COLLATERAL RECEIVED* FEES RECEIVED
- --------- ----------------- -------------------- -------------
<S> <C> <C> <C>
Alliance Intermediate Government Securities $ 32,201,367 $ 33,220,564 $ 39,876
Alliance Quality Bond ....................... 50,573,670 51,975,110 48,428
Alliance Growth and Income .................. 82,082,344 83,758,200 44,878
Alliance Equity Index ....................... 111,251,919 113,256,053 53,477
Alliance Common Stock ....................... 662,769,145 672,888,280 585,669
Alliance Global ............................. 112,593,733 116,411,892 396,835
Alliance International ...................... 14,904,809 15,770,821 90,583
Alliance Aggressive Stock ................... 630,594,623 636,513,616 1,807,252
Alliance Conservative Investors ............. 65,514,619 67,529,380 68,901
Alliance Balanced ........................... 292,916,191 301,012,558 437,345
Alliance Growth Investors ................... 185,900,995 191,232,973 398,085
</TABLE>
- ------------
* Including U.S. Government securities valued at $18,342,994, $31,657,214,
$60,800, $3,719,500, $10,050,000, $2,564,100, $718,240, $23,874,600,
$37,866,285, $61,873,419 and $31,723,786 for the Alliance Intermediate
Government Securities, Alliance Quality Bond, Alliance Growth and Income,
Alliance Equity Index, Alliance Common Stock, Alliance Global, Alliance
International, Alliance Aggressive Stock, Alliance Conservative Investors,
Alliance Balanced and Alliance Growth Investors Portfolios, respectively.
75
<PAGE>
THE HUDSON RIVER TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997
The books and records of the Trust are kept in U.S. dollars. Foreign
currency amounts are translated into U.S. dollars at the bid price last
quoted by a composite list of major U.S. banks at the following dates:
(i) market value of investment securities, other assets and
liabilities--at the valuation date.
(ii) purchase and sales of investment securities, income and expenses--at
the date of such transactions.
The Portfolios do not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss
from investments.
Net currency gains or losses realized and unrealized as a result of
differences between interest or dividends and withholding taxes recorded on
the Portfolio's books and the U.S. dollar equivalent amount actually received
or paid are presented under foreign currency transactions in the realized and
unrealized gains and losses section of the Statements of Operations.
The Trust intends to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute
substantially all of its net investment income and net realized capital gains
to shareholders of each Portfolio. Therefore, no federal income tax provision
is required. Dividends from net investment income are declared and
distributed quarterly; dividends from net realized short-term and long-term
capital gains are declared and distributed at least annually to the
shareholders of the Portfolios to which such gains are attributable. All
dividends are reinvested in additional full and fractional shares of the
related Portfolios. All dividends are distributed on a tax basis and as such,
the amounts may differ from financial statement investment income and
realized capital gains.
Options Written:
All Portfolios (except for the Alliance Money Market and Alliance Equity
Index Portfolios) may write (sell) covered options as a hedge to provide
protection against adverse movements in the price of securities in the
portfolio or to enhance investment performance. When a Portfolio writes an
option, an amount equal to the premium received by the Portfolio is recorded
as a liability and is subsequently adjusted on a daily basis to the current
market price of the option written. Premiums received from writing options
which expire unexercised are realized as gains on the expiration date. In
writing options, a Portfolio must assume that the option may be exercised at
any time prior to the expiration of its obligation as a writer, and that in
such circumstances the net proceeds of the sale or cost of purchase of the
underlying securities pursuant to the call or put option may be substantially
below or above the prevailing market price. A Portfolio also has the
additional risk of not being able to enter into a closing purchase
transaction if a liquid secondary market does not exist and bears the risk of
unfavorable changes in the price of the financial instruments underlying the
options.
Futures and Forward Contracts:
Futures and forward contracts are agreements to buy or sell a security for
a set price in the future. A Portfolio may buy or sell futures and forward
contracts for the purpose of protecting its portfolio securities against
future changes in interest rates which might adversely affect the value of
the Portfolio's securities or the price of securities that it intends to
purchase at a later date. Initial margin deposits are made upon entering into
futures contracts and can be either in cash or U.S. Treasury securities.
During the period the futures and forward contracts are open, changes in the
market price of the contract are recognized as unrealized gains or losses by
"marking-to-market" at the end of each trading day. Variation margin payments
on futures contracts are received or made, depending upon whether unrealized
gains or losses are incurred. When the contract is closed, the Portfolio
records a realized gain or loss equal to the difference between the proceeds
from (or cost of) the closing transactions and the Portfolio's basis in the
contract. Should interest rates move unexpectedly, the Portfolio may not
achieve the anticipated benefits of the futures and forward contracts and may
incur a loss. The use of futures and forward contracts transactions involves
the risk of imperfect correlation in movements in the price of futures and
forward contracts, interest rates and the underlying hedged assets.
76
<PAGE>
THE HUDSON RIVER TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997
Limitations on Market and Credit Risk:
Written options, futures and forward contracts involve elements of both
market and credit risk in excess of the amounts reflected in the Statements
of Assets and Liabilities. The risk involved in writing an option on a
security is that, if the option is exercised, the underlying security is then
purchased or sold by the Portfolio at the contract price, which could be
disadvantageous related to the market price. The contract amounts of these
futures and forward contracts reflect the extent of the Portfolio's exposure
to off-balance sheet risk. The Portfolio bears the market risk which arises
from any changes in security values. The credit risk for futures contracts is
limited to failure of the exchange or board of trade which acts as the
counterparty to the Portfolio's futures transactions. Forward contracts are
done directly with the counterparty and not through an exchange and can be
terminated only by agreement of both parties to the contract. There is no
daily margin settlement and the Portfolio is exposed to the risk of default
by the counterparty.
Statement of Position 93-2:
For the year ended December 31, 1997, in conformity with Statement of
Position 93-2 Determination, Disclosure and Financial Statement Presentation
of Income, Capital Gain, and Return of Capital Distributions by Investment
Companies, the reclassification arising from current book/tax differences
resulted in increases (decreases) to the components of net assets as follows:
<TABLE>
<CAPTION>
ALLIANCE ALLIANCE
INTERMEDIATE ALLIANCE GROWTH ALLIANCE
GOVERNMENT QUALITY ALLIANCE AND EQUITY ALLIANCE ALLIANCE
SECURITIES BOND HIGH YIELD INCOME INDEX COMMON STOCK GLOBAL
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Undistributed (overdistributed) net
investment income ................... $(4,160) $ 664,479 $ 28,777 $ 48,024 $ 260,751 $(2,631,075) $ 15,935,865
Accumulated net realized gain (loss) 4,160 (664,479) (28,777) (48,024) (260,751) 2,631,075 (15,935,865)
</TABLE>
<TABLE>
<CAPTION>
ALLIANCE ALLIANCE ALLIANCE ALLIANCE
ALLIANCE AGGRESSIVE SMALL CAP CONSERVATIVE ALLIANCE GROWTH
INTERNATIONAL STOCK GROWTH INVESTORS BALANCED INVESTORS
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Paid-in capital ...................... $ -- $ -- $(7,066) $ -- $ -- $ --
Undistributed (overdistributed) net
investment income ................... 3,322,727 1,777,082 410 (146,376) 58,776 4,831,809
Accumulated net realized gain (loss) (3,322,727) (1,777,082) 6,656 146,376 (58,776) (4,831,809)
</TABLE>
Net capital and net currency losses incurred after October 31 and within
the taxable year are deemed to arise on the first day of the Portfolio's next
taxable year. For the period from November 1, 1997 to December 31, 1997
certain Portfolios incurred and elected to defer until January 1, 1998 for
U.S. Federal income tax purposes net capital and net currency losses of
approximately:
<TABLE>
<CAPTION>
CAPITAL CURRENCY
PORTFOLIO LOSSES LOSSES
- --------- ------ ------
<S> <C> <C>
Alliance Equity Index........... $ -- $ 3,600
Alliance Common Stock........... -- 33,030
Alliance Global................. -- 433,526
Alliance International.......... 4,160,819 670,264
Alliance Small Cap Growth ...... 1,448,447 --
Alliance Conservative
Investors...................... -- 37,085
Alliance Balanced............... -- 61,818
Alliance Growth Investors ...... -- 81,786
</TABLE>
77
<PAGE>
THE HUDSON RIVER TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997
2. Management of the Trust
Alliance Capital Management L.P. (Alliance), a publicly traded limited
partnership, indirectly majority-owned by Equitable, is the investment
adviser. Prior to May 1, 1997, the investment advisory fees were as follows:
<TABLE>
<CAPTION>
AVERAGE DAILY NET ASSETS
----------------------------------------------
FIRST NEXT OVER
$350 MILLION $400 MILLION $750 MILLION
------------ ------------ ------------
<S> <C> <C> <C>
Alliance Common Stock, Alliance Money Market and Alliance Balanced
Portfolios ............................................................. .40% .375% .35%
Alliance Aggressive Stock and Alliance Intermediate Government
Securities Portfolios .................................................. .50% .475% .45%
Alliance High Yield, Alliance Global, Alliance Conservative Investors
and Alliance Growth Investors Portfolios ............................... .55% .525% .50%
</TABLE>
<TABLE>
<CAPTION>
FIRST NEXT OVER
$500 MILLION $500 MILLION $1 BILLION
------------ ------------ ----------
<S> <C> <C> <C>
Alliance Quality Bond and Alliance Growth and Income Portfolios .55% .525% .50%
</TABLE>
<TABLE>
<CAPTION>
FIRST NEXT OVER
$750 MILLION $750 MILLION $1.5 BILLION
------------ ------------ ------------
<S> <C> <C> <C>
Alliance Equity Index Portfolio .35% .30% .25%
</TABLE>
<TABLE>
<CAPTION>
FIRST NEXT OVER
$500 MILLION $1 BILLION $1.5 BILLION
------------ ---------- ------------
<S> <C> <C> <C>
Alliance International Portfolio .90% .85% .80%
</TABLE>
On December 13, 1996, the Trust's Board of Trustees approved a new
Investment Advisory Agreement with Alliance and subsequently extended the
agreement to the Alliance Small Cap Growth Portfolio on March 12, 1997. On
April 9, 1997, shareholders of each respective Portfolio, except for the
Alliance Small Cap Growth Portfolio which commenced operations on May 1,
1997, approved a new Investment Advisory Agreement. Effective May 1, 1997,
the advisory fees payable under this agreement are as follows:
<TABLE>
<CAPTION>
AVERAGE DAILY NET ASSETS
----------------------------------------------------------------------
FIRST NEXT NEXT NEXT
PORTFOLIO $750 MILLION $750 MILLION $1 BILLION $2.5 BILLION THEREAFTER
- --------- ------------ ------------ ---------- ------------ ----------
<S> <C> <C> <C> <C> <C>
Alliance Money Market ....................... .350% .325% .300% .280% .270%
Alliance Intermediate Government Securities .500% .475% .450% .430% .420%
Alliance Quality Bond ....................... .525% .500% .475% .455% .445%
Alliance High Yield ......................... .600% .575% .550% .530% .520%
Alliance Growth and Income .................. .550% .525% .500% .480% .470%
Alliance Equity Index ....................... .325% .300% .275% .255% .245%
Alliance Common Stock ....................... .475% .425% .375% .355% .345%*
Alliance Global ............................. .675% .600% .550% .530% .520%
Alliance International ...................... .900% .825% .800% .780% .770%
Alliance Aggressive Stock ................... .625% .575% .525% .500% .475%
Alliance Small Cap Growth ................... .900% .850% .825% .800% .775%
Alliance Conservative Investors ............. .475% .425% .375% .350% .325%
Alliance Balanced ........................... .450% .400% .350% .325% .300%
Alliance Growth Investors ................... .550% .500% .450% .425% .400%
</TABLE>
- ------------
* On assets in excess of $10 billion, the management fee for the Alliance
Common Stock Portfolio is reduced to 0.335% of average daily net assets.
78
<PAGE>
THE HUDSON RIVER TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997
3. Distribution Plan
Each Portfolio's Distribution Plan permits the Portfolio to pay a
distribution fee of up to 0.50% of the average daily net assets attributable
to its Class IB shares. The Trust, on behalf of each Portfolio, has entered
into a Distribution Agreement (the "Agreements") pursuant to the Distribution
Plans with Equitable Distributors, Inc. ("EDI"), an indirect, wholly-owned
subsidiary of the Equitable, under which EDI receives payments at a rate
equal to 0.25% of the average daily net assets attributable to the Class IB
shares of each Portfolio except the Small Cap Growth Portfolio. The Small Cap
Growth Portfolio Agreement provides that EDI will receive an annual fee not
to exceed the lesser of (a) 0.25% of the average daily net assets of the
Portfolio attributable to Class IB shares and (b) an amount that, when added
to certain other expenses of the Class IB shares, would result in the ratio
of expenses to average daily net assets attributable to Class IB shares
equaling 1.20%.
The Distribution Plans provide that EDI will use the payments received
under the Agreements for services rendered (and expenses borne) in connection
with activities primarily intended to result in the sale of the Trust's Class
IB shares. Since EDI's compensation is not directly tied to its expenses, the
amount of compensation received by it under the Agreements during any year
may be more or less than its actual expenses. For this reason, the
Distribution Plans are characterized by the staff of the Securities and
Exchange Commission as being of the "compensation" variety.
4. Investment Transactions
Investment security transactions, excluding short-term debt securities,
for the year ended December 31, 1997 were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
-------------------------------- --------------------------------
STOCKS AND U.S. GOVERNMENT STOCKS AND U.S. GOVERNMENT
PORTFOLIO DEBT SECURITIES AND AGENCIES DEBT SECURITIES AND AGENCIES
- --------- --------------- ------------ --------------- ------------
<S> <C> <C> <C> <C>
Alliance Intermediate Government Securities $ -- $ 289,263,347 $ -- $ 268,248,135
Alliance Quality Bond ....................... 163,237,234 495,861,466 171,665,271 442,101,550
Alliance High Yield ......................... 1,235,945,918 -- 1,073,614,879 --
Alliance Growth and Income .................. 568,400,225 -- 306,859,124 --
Alliance Equity Index ....................... 414,309,473 -- 22,554,753 --
Alliance Common Stock ....................... 4,620,850,933 -- 4,082,534,069 --
Alliance Global ............................. 706,451,901 -- 588,394,296 --
Alliance International ...................... 160,707,760 -- 101,610,156 --
Alliance Aggressive Stock ................... 5,505,273,307 -- 5,142,936,366 --
Alliance Small Cap Growth * ................. 192,773,234 -- 57,648,193 --
Alliance Conservative Investors ............. 149,330,575 334,113,271 176,462,757 312,290,578
Alliance Balanced ........................... 1,025,160,528 1,195,953,420 1,208,802,299 1,029,716,011
Alliance Growth Investors ................... 1,135,831,343 607,149,017 1,206,132,190 378,552,050
</TABLE>
- ------------
* For the period from May 1, 1997 (commencement of operations) to
December 31, 1997.
No activity is shown for the Alliance Money Market Portfolio since it
trades exclusively in short-term debt securities.
79
<PAGE>
THE HUDSON RIVER TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997
Transactions in options written for the year ended December 31, 1997 are
summarized as follows:
<TABLE>
<CAPTION>
ALLIANCE
COMMON STOCK
PORTFOLIO
---------------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
----------- ---------------
<S> <C> <C>
Options outstanding--January 1, 1997 ................ 161,200 $ 68,607,800
Options written ..................................... 1,794,950 623,448,846
Options terminated in closing purchase transactions (910,000) (344,806,113)
Options expired ..................................... (306,750) (103,999,855)
Options exercised ................................... (374,150) (139,689,978)
--------- -------------
Options outstanding--December 31, 1997 .............. 365,250 $ 103,560,700
========= =============
</TABLE>
The Portfolios (except for the Alliance Money Market, Alliance
Intermediate Government Securities and Alliance Equity Index Portfolios) may
enter into forward currency contracts in order to hedge their exposure to
changes in foreign currency exchange rates on their foreign securities
holdings. A forward contract is a commitment to purchase or sell a foreign
currency at a future date at a negotiated forward rate. The gain or loss
arising from the difference between the original contracts and the closing of
such contracts is included in realized gains or losses from foreign currency
transactions. At December 31, 1997, the Alliance Quality Bond, Alliance
Global, Alliance International, Alliance Conservative Investors, Alliance
Balanced and Alliance Growth Investors Portfolios had outstanding forward
currency contracts to buy/sell foreign currencies as follows:
<TABLE>
<CAPTION>
CONTRACT COST ON U.S. $ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION
ALLIANCE QUALITY BOND PORTFOLIO: (000'S) DATE VALUE (DEPRECIATION)
- -------------------------------- ------- ---- ----- --------------
<S> <C> <C> <C> <C>
FOREIGN CURRENCY BUY CONTRACTS
Canadian Dollars, settling 02/17/98 . 661 $ 467,219 $ 463,327 $ (3,892)
FOREIGN CURRENCY SALE CONTRACTS
Australian Dollar, settling 01/12/98 11,949 8,017,325 7,785,968 231,357
Canadian Dollar, settling 02/17/98 .. 661 466,691 463,326 3,365
--------
$230,830
========
</TABLE>
<TABLE>
<CAPTION>
CONTRACT COST ON U.S. $ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION
ALLIANCE GLOBAL PORTFOLIO: (000'S) DATE VALUE (DEPRECIATION)
- -------------------------- ------- ---- ----- --------------
<S> <C> <C> <C> <C>
FOREIGN CURRENCY BUY CONTRACTS
Deutsche Marks, settling 01/23/98 ................ 44,000 $ 25,292,444 $ 24,492,886 $ (799,558)
Irish Punts, settling 01/05/98 ................... 147 210,357 209,151 (1,206)
Japanese Yen, settling 02/27/98-04/14/98 ........ 2,170,000 16,783,366 16,778,541 (4,825)
Netherlands Guilders, settling 01/23/98 ......... 58,900 30,079,412 29,091,879 (987,533)
Swedish Krona, settling 01/02/98 ................. 7,950 1,025,125 1,001,272 (23,853)
FOREIGN CURRENCY SALE CONTRACTS
British Pounds, settling 01/02/98 ................ 700 1,167,348 1,150,313 17,035
Deutsche Marks, settling 01/02/98-01/23/98 ...... 44,160 25,102,287 24,581,827 520,460
Finnish Markka, settling 01/02/98 ................ 2,200 409,112 403,599 5,513
French Franc, settling 01/02/98 .................. 7,000 1,178,928 1,163,081 15,847
Japanese Yen, settling 02/27/98-04/14/98 ........ 13,270,000 109,655,596 103,021,611 6,633,985
Netherlands Guilders, settling 01/02/98-01/23/98 60,300 30,410,102 29,782,333 627,769
Norwegian Krone, settling 01/02/98 ............... 480 65,964 64,990 974
----------
$6,004,608
==========
</TABLE>
80
<PAGE>
THE HUDSON RIVER TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997
<TABLE>
<CAPTION>
CONTRACT COST ON U.S. $ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION
ALLIANCE INTERNATIONAL PORTFOLIO: (000'S) DATE VALUE (DEPRECIATION)
- --------------------------------- ------- ---- ----- --------------
<S> <C> <C> <C> <C>
FOREIGN CURRENCY BUY CONTRACTS
Deutsche Marks, settling 01/02/98-01/23/98 ...... 10,240 $ 5,885,470 $ 5,699,277 $ (186,193)
Japanese Yen, settling 02/27/98-04/14/98 ........ 872,000 6,789,467 6,751,775 (37,692)
Netherlands Guilders, settling 01/23/98 ......... 8,100 4,136,558 4,000,751 (135,807)
FOREIGN CURRENCY SALE CONTRACTS
Belgian Franc, settling 01/02/98 ................. 1,600 43,688 43,184 504
Deutsche Marks, settling 01/02/98-01/23/98 ...... 10,410 5,907,722 5,793,777 113,945
Finnish Markka, settling 01/02/98 ................ 1,300 241,748 238,490 3,258
Japanese Yen, settling 01/05/98-04/14/98 ........ 4,652,000 38,312,357 36,098,497 2,213,860
Netherlands Guilders, settling 01/02/98-01/23/98 8,460 4,265,786 4,178,296 87,490
----------
$2,059,365
==========
</TABLE>
<TABLE>
<CAPTION>
CONTRACT COST ON U.S. $ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION
ALLIANCE CONSERVATIVE INVESTORS PORTFOLIO: (000'S) DATE VALUE (DEPRECIATION)
- ------------------------------------------ ------- ---- ----- --------------
<S> <C> <C> <C> <C>
FOREIGN CURRENCY BUY CONTRACTS
French Franc, settling 01/23/98-01/30/98 . 11,106 $1,870,275 $1,847,854 $(22,421)
Deutsche Marks, settling 01/02/98 ........ 1,870 1,073,663 1,039,495 (34,168)
Japanese Yen, settling 02/27/98 ........... 56,000 432,305 432,825 520
Netherlands Guilders, settling 01/02/98 .. 1,940 989,579 956,773 (32,806)
Norwegian Krone, settling 01/23/98 ....... 2,500 347,301 338,969 (8,332)
Spanish Peseta, settling 01/23/98 ........ 90,000 600,200 591,072 (9,128)
Swedish Krona, settling 01/02/98-01/23/98 2,756 359,907 347,254 (12,653)
FOREIGN CURRENCY SALE CONTRACTS
British Pounds, settling 01/07/98 ........ 28 45,244 45,461 (217)
Deutsche Marks, settling 01/02/98 ........ 1,870 1,048,059 1,039,495 8,564
French Franc, settling 01/23/98 ........... 11,000 1,859,663 1,830,216 29,447
Japanese Yen, settling 01/06/98-04/14/98 . 358,673 2,962,975 2,784,133 178,842
Netherlands Guilders, settling 01/02/98 .. 1,940 964,910 956,772 8,138
Norwegian Krone, settling 01/23/98 ....... 2,500 348,058 338,969 9,089
Spanish Peseta, settling 01/23/98 ........ 90,000 602,208 591,072 11,136
Swedish Krona, settling 01/02/98-01/23/98 2,328 307,119 293,356 13,763
--------
$139,774
========
</TABLE>
81
<PAGE>
THE HUDSON RIVER TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997
<TABLE>
<CAPTION>
CONTRACT COST ON U.S. $ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION
ALLIANCE BALANCED PORTFOLIO: (000'S) DATE VALUE (DEPRECIATION)
- ---------------------------- ------- ---- ----- --------------
<S> <C> <C> <C> <C>
FOREIGN CURRENCY BUY CONTRACTS
French Franc, settling 01/23/98 ........... 99,000 $16,671,017 $16,471,943 $ (199,074)
Deutsche Marks, settling 01/02/98 ........ 17,300 9,932,824 9,616,721 (316,103)
Japanese Yen, settling 02/27/98-04/14/98 . 1,000,000 7,838,089 7,753,716 (84,373)
Netherlands Guilders, settling 01/02/98 .. 17,600 8,977,622 8,679,999 (297,623)
Norwegian Krone, settling 01/23/98 ....... 22,000 3,056,252 2,982,930 (73,322)
Spanish Peseta, settling 01/23/98 ........ 800,000 5,335,112 5,253,975 (81,137)
Swedish Krona, settling 01/23/98 .......... 13,000 1,700,062 1,638,400 (61,662)
FOREIGN CURRENCY SALE CONTRACTS
British Pounds, settling 01/07/98 ........ 229 375,646 375,403 243
Deutsche Marks, settling 01/02/98 ........ 17,300 9,695,951 9,616,721 79,230
French Franc, settling 01/23/98-01/30/98 . 99,457 16,812,017 16,547,968 264,049
Japanese Yen, settling 01/05/98-04/14/98 . 3,988,798 32,900,946 30,969,984 1,930,962
Netherlands Guilders, settling 01/02/98 .. 17,600 8,753,823 8,679,999 73,824
Norwegian Krone, settling 01/23/98 ....... 22,000 3,062,915 2,982,930 79,985
Spanish Peseta, settling 01/23/98 ........ 800,000 5,352,961 5,253,975 98,986
Swedish Krona, settling 01/05/98-01/23/98 13,795 1,816,583 1,738,550 78,033
----------
$1,492,018
==========
</TABLE>
<TABLE>
<CAPTION>
CONTRACT COST ON U.S. $ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION
ALLIANCE GROWTH INVESTORS PORTFOLIO: (000'S) DATE VALUE (DEPRECIATION)
- ------------------------------------ ------- ---- ----- --------------
<S> <C> <C> <C> <C>
FOREIGN CURRENCY BUY CONTRACTS
British Pounds, settling 01/08/98 ................ 65 $ 108,622 $ 107,420 $ (1,202)
French Franc, settling 01/30/98 .................. 3,653 608,562 608,068 (494)
Deutsche Marks, settling 01/02/98-01/23/98 ...... 22,980 13,206,726 12,788,720 (418,006)
Japanese Yen, settling 01/05/98-04/14/98 ........ 1,168,671 9,067,606 9,040,016 (27,590)
Netherlands Guilders, settling 01/23/98 ......... 18,900 9,651,967 9,335,085 (316,882)
Swedish Krona, settling 01/02/98 ................. 9,168 1,182,065 1,154,672 (27,393)
FOREIGN CURRENCY SALE CONTRACTS
Australian Dollars, settling 01/02/98 ............ 132 85,276 86,274 (998)
British Pounds, settling 01/06/98 ................ 137 227,385 225,848 1,537
Canadian Dollars, settling 01/02/98 .............. 54 36,927 37,579 (652)
Deutsche Marks, settling 01/02/98-01/23/98 ...... 22,980 13,029,701 12,788,720 240,981
French Franc, settling 01/30/98 .................. 1,135 189,471 188,841 630
Indonesian Rupiah, settling 01/02/98-01/07/98 ... 9,315 1,595 1,693 (98)
Japanese Yen, settling 01/05/98-04/14/98 ........ 6,217,997 51,324,595 48,270,138 3,054,457
Netherlands Guilders, settling 01/05/98-01/23/98 19,317 9,738,946 9,540,548 198,398
----------
$2,702,688
==========
</TABLE>
82
<PAGE>
THE HUDSON RIVER TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997
As of December 31, 1997, the gross unrealized appreciation (depreciation)
of investments based on the aggregate cost of investments for federal income
tax purposes was as follows:
<TABLE>
<CAPTION>
GROSS UNREALIZED
-------------------------------- NET UNREALIZED
COST OF APPRECIATION
PORTFOLIO INVESTMENTS APPRECIATION DEPRECIATION (DEPRECIATION)
- --------- ----------- ------------ ------------ --------------
<S> <C> <C> <C> <C>
Alliance Money Market ....................... $ 551,106,796 $ 113,321 $ (1,450) $ 111,871
Alliance Intermediate Government Securities 113,600,359 1,418,742 (81,837) 1,336,905
Alliance Quality Bond ....................... 198,044,047 1,526,456 (488,133) 1,038,323
Alliance High Yield ......................... 402,787,235 10,488,392 (3,831,357) 6,657,035
Alliance Growth and Income .................. 511,230,453 85,982,551 (13,121,234) 72,861,317
Alliance Equity Index ....................... 717,468,668 230,719,482 (9,632,048) 221,087,434
Alliance Common Stock ....................... 7,105,768,791 2,818,811,560 (199,170,219) 2,619,641,341
Alliance Global ............................. 1,080,321,370 279,910,104 (138,571,829) 141,338,275
Alliance International ...................... 196,445,985 26,360,668 (39,855,124) (13,494,456)
Alliance Aggressive Stock ................... 4,074,878,825 759,226,094 (349,159,577) 410,066,517
Alliance Small Cap Growth ................... 153,262,271 8,273,490 (7,682,047) 591,443
Alliance Conservative Investors ............. 291,571,008 22,817,939 (3,133,104) 19,684,835
Alliance Balanced ........................... 1,533,148,635 209,288,194 (30,695,116) 178,593,078
Alliance Growth Investors ................... 1,486,000,218 234,997,062 (63,640,072) 171,356,990
</TABLE>
During the year ended December 31, 1997, the Alliance Intermediate
Government Securities and Alliance Quality Bond Portfolios utilized available
capital loss carryforwards of $999,418 and $4,993,810, respectively.
The Alliance Intermediate Government Securities Portfolio had net capital
loss carryforwards of $8,831,948 (of which $8,349,809 expires in the year
2002 and $482,139 expires in the year 2004). To the extent the above losses
are used to offset future capital gains, it is probable that the gains so
offset will not be distributed to shareholders.
5. Capital Share Transactions
At December 31, 1997, there was an unlimited number of shares of
beneficial interest (Shares), without par value, available for issuance by
the Board of Trustees. Shares are divided into two classes, designated Class
IA and Class IB for each Portfolio.
Transactions in Shares were as follows:
<TABLE>
<CAPTION>
ALLIANCE
ALLIANCE INTERMEDIATE ALLIANCE ALLIANCE
MONEY MARKET GOVERNMENT SECURITIES QUALITY BOND HIGH YIELD
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------------------ ---------------------- ---------------------- ----------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1997 1996 1997 1996 1997 1996
----------- ----------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class IA
- --------
Shares sold ......... 88,164,162 49,765,857 4,317,481 3,938,806 5,108,456 2,872,392 15,273,062 7,067,122
Shares issued in
reinvestment of
dividends and
distributions ...... 2,138,588 1,878,824 605,567 496,768 1,161,537 1,135,383 3,903,981 2,737,878
----------- ----------- ---------- ---------- ---------- ---------- ---------- ----------
Total shares issued 90,302,750 51,644,681 4,923,048 4,435,574 6,269,993 4,007,775 19,177,043 9,805,000
Shares redeemed .... (91,686,416) (44,125,860) (2,249,794) (2,495,957) (1,749,691) (4,048,559) (4,915,625) (2,158,843)
----------- ----------- ---------- ---------- ---------- ---------- ---------- ----------
Net increase
(decrease) ......... (1,383,666) 7,518,821 2,673,254 1,939,617 4,520,302 (40,784) 14,261,418 7,646,157
=========== =========== ========== ========== ========== ========== ========== ==========
</TABLE>
83
<PAGE>
THE HUDSON RIVER TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997
<TABLE>
<CAPTION>
ALLIANCE ALLIANCE ALLIANCE ALLIANCE
GROWTH AND INCOME EQUITY INDEX COMMON STOCK GLOBAL
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------------------- ----------------------- ----------------------- -----------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1997 1996 1997 1996 1997 1996
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class IA
- --------
Shares sold .......... 17,042,406 9,026,248 25,418,356 16,152,780 50,744,225 43,446,898 13,465,598 15,536,853
Shares issued in
reinvestment of
dividends and
distributions ....... 2,393,845 1,157,520 723,055 1,372,168 35,866,900 39,581,929 5,883,409 3,493,773
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total shares issued... 19,436,251 10,183,768 26,141,411 17,524,948 86,611,125 83,028,827 19,349,007 19,030,626
Shares redeemed ...... (1,171,007) (730,115) (3,834,705) (4,670,841) (18,396,632) (15,634,826) (8,663,149) (3,682,913)
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Net increase ......... 18,265,244 9,453,653 22,306,706 12,854,107 68,214,493 67,394,001 10,685,858 15,347,713
========== ========== ========== ========== ========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
ALLIANCE ALLIANCE ALLIANCE ALLIANCE
INTERNATIONAL AGGRESSIVE STOCK SMALL CAP GROWTH CONSERVATIVE INVESTORS
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------------------ ------------------------- ----------------- -----------------------
YEAR ENDED YEAR ENDED MAY 1, 1997* YEAR ENDED
DECEMBER 31, DECEMBER 31, TO DECEMBER 31,
1997 1996 1997 1996 DECEMBER 31, 1997 1997 1996
---------- ---------- ---------- ---------- ----------------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Class IA
- --------------------
Shares sold ......... 17,702,398 12,450,977 34,847,127 28,813,436 12,473,113 2,875,061 4,420,391
Shares issued in
reinvestment of
dividends and
distributions ...... 1,469,420 409,789 11,233,155 18,391,950 185,690 1,809,193 1,758,154
---------- ---------- ---------- ---------- ---------- --------- ---------
Total shares issued 19,171,818 12,860,766 46,080,282 47,205,386 12,658,803 4,684,254 6,178,545
Shares redeemed .... (13,816,916) (2,284,561) (27,155,091) (15,090,379) (4,992,168) (3,816,982) (3,042,720)
---------- ---------- ---------- ---------- ---------- --------- ---------
Net increase ........ 5,354,902 10,576,205 18,925,191 32,115,007 7,666,635 867,272 3,135,825
========== ========== ========== ========== ========== ========= =========
</TABLE>
<TABLE>
<CAPTION>
ALLIANCE ALLIANCE
BALANCED GROWTH INVESTORS
PORTFOLIO PORTFOLIO
----------------------------- ----------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
CLASS IA 1997 1996 1997 1996
- ------------------------ -------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Shares sold ............. 3,662,533 3,826,284 9,706,135 17,024,570
Shares issued in
reinvestment of
dividends and
distributions .......... 8,034,691 11,161,085 6,731,864 9,635,249
---------- ---------- ---------- ----------
Total shares issued .... 11,697,224 14,987,369 16,437,999 26,659,819
Shares redeemed ......... (12,097,554) (7,431,615) (4,231,449) (1,643,924)
---------- ---------- ---------- ----------
Net increase (decrease) (400,330) 7,555,754 12,206,550 25,015,895
========== ========== ========== ==========
</TABLE>
- ------------
* Commencement of operations.
84
<PAGE>
THE HUDSON RIVER TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997
<TABLE>
<CAPTION>
ALLIANCE
INTERMEDIATE ALLIANCE
ALLIANCE GOVERNMENT ALLIANCE GROWTH AND
MONEY MARKET SECURITIES HIGH YIELD INCOME
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------------------------------- ----------------- --------------------------------- -----------------
YEAR ENDED OCTOBER 2, 1996* MAY 1, 1997* YEAR ENDED OCTOBER 2, 1996* MAY 1, 1997*
DECEMBER 31, TO TO DECEMBER 31, TO TO
CLASS IB 1997 DECEMBER 31, 1996 DECEMBER 31, 1997 1997 DECEMBER 31, 1996 DECEMBER 31, 1997
- -------- -------------- ----------------- ----------------- -------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold ......... 15,458,380 353,450 536,124 5,872,392 64,659 2,001,059
Shares issued in
reinvestment of
dividends and
distributions ...... 276,519 3,389 9,576 496,765 3,757 127,333
---------- ------- ------- --------- ------ ---------
Total shares issued 15,734,899 356,839 545,700 6,369,157 68,416 2,128,392
Shares redeemed .... (3,884,676) (43,566) (10,301) (51,149) -- (266)
---------- ------- ------- --------- ------ ---------
Net increase ........ 11,850,223 313,273 535,399 6,318,008 68,416 2,128,126
========== ======= ======= ========= ====== =========
</TABLE>
<TABLE>
<CAPTION>
ALLIANCE ALLIANCE ALLIANCE ALLIANCE
EQUITY INDEX COMMON STOCK GLOBAL INTERNATIONAL
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------------- --------------------------------- --------------------------------- -----------------
MAY 1, 1997* YEAR ENDED OCTOBER 2, 1996* YEAR ENDED OCTOBER 2, 1996* MAY 1, 1997*
TO DECEMBER 31, TO DECEMBER 31, TO TO
CLASS IB DECEMBER 31, 1997 1997 DECEMBER 31, 1996 1997 DECEMBER 31, 1996 DECEMBER 31, 1997
- -------- ----------------- -------------- ----------------- -------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold ......... 7,451 9,736,070 64,063 1,232,644 16,657 317,031
Shares issued in
reinvestment of
dividends and
distributions ...... 55 826,867 4,203 99,584 486 22,868
----- ---------- ------ --------- ------ -------
Total shares issued 7,506 10,562,937 68,266 1,332,228 17,143 339,899
Shares redeemed .... (1,926) (29,575) -- (103,224) --- (19,496)
----- ---------- ------ --------- ------ -------
Net increase ........ 5,580 10,533,362 68,266 1,229,004 17,143 320,403
===== ========== ====== ========= ====== =======
</TABLE>
<TABLE>
<CAPTION>
ALLIANCE
ALLIANCE ALLIANCE CONSERVATIVE ALLIANCE
AGGRESSIVE STOCK SMALL CAP GROWTH INVESTORS GROWTH INVESTORS
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------------------------------- ----------------- ----------------- ---------------------------------
YEAR ENDED OCTOBER 2, 1996* MAY 1, 1997* MAY 1, 1997* YEAR ENDED OCTOBER 2, 1996*
DECEMBER 31, TO TO TO DECEMBER 31, TO
CLASS IB 1997 DECEMBER 31, 1996 DECEMBER 31, 1997 DECEMBER 31, 1997 1997 DECEMBER 31, 1996
- -------- -------------- ----------------- ----------------- ----------------- -------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold ......... 1,856,882 16,059 3,666,066 467,751 1,855,983 26,902
Shares issued in
reinvestment of
dividends and
distributions ...... 175,796 1,035 91,565 20,199 130,747 571
--------- ------ --------- ------- --------- ------
Total shares issued 2,032,678 17,094 3,757,631 487,950 1,986,730 27,473
Shares redeemed .... (15,597) --- (5,055) (8,774) (85,261) (5)
--------- ------ --------- ------- --------- ------
Net increase ........ 2,017,081 17,094 3,752,576 479,176 1,901,469 27,468
========= ====== ========= ======= ========= ======
</TABLE>
- ------------
* Commencement of operations.
85
<PAGE>
THE HUDSON RIVER TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997
6. Transactions with Affiliated Companies
An affiliated company is a company in which a Portfolio has ownership of
at least 5% of the voting securities. Investments in companies which were
affiliates during the year ended December 31, 1997 are summarized as follows:
<TABLE>
<CAPTION>
MARKET VALUE MARKET VALUE REALIZED
DECEMBER 31, PURCHASES SALES DECEMBER 31, DIVIDEND GAIN
1996 AT COST AT COST 1997 INCOME (LOSS)
-------------- ------------- ------------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
ALLIANCE COMMON STOCK PORTFOLIO:
- --------------------------------
CBL & Associates Properties, Inc. (a) ... $ 27,872,550 $ -- $ 1,365,000 $ 24,865,250 $1,399,008 $ 345,043
Ceridian Corp ............................ 148,432,500 5,701,500 -- 174,774,688 -- --
Chris Craft Industries, Inc. (Class B) .. 49,849,843 -- -- 64,143,286 -- --
CompUSA, Inc. (a)......................... 65,331,750 60,013,001 131,193,635 -- -- 25,854,610
Regency Realty Corp. (a).................. 16,372,125 -- 9,420,426 3,563,381 762,216 3,605,448
Teleport Communications Group, Inc.
(Class A) ............................... 610,000 216,341,430 50,817,405 220,103,625 -- 30,473,635
-------------- -------------- ------------ ------------
$ 308,468,768 $ 487,450,230 $2,161,224 $ 60,278,736
============== ============== ============ ============
ALLIANCE AGGRESSIVE STOCK PORTFOLIO:
- ------------------------------------
Aames Financial Corp. (a) ................ $ 39,907,350 $ -- $ 42,877,524 $ -- $ 48,335 $ (9,329,592)
AK Steel Holding Corp. (a) ............... 52,554,637 73,027,066 115,247,008 7,421,675 1,719,840 1,150,485
Centocor, Inc. ........................... 66,044,550 153,361,306 1,564,875 167,463,625 -- 538,805
Circuit City Stores, Inc.-Carmax Group ... -- 114,969,960 6,657,086 56,346,300 -- (1,898,235)
Comverse Technology, Inc. ................ -- 82,646,377 -- 72,520,500 -- 431,918
Continental Airlines, Inc. (Class B) .... 47,587,125 95,672,700 -- 213,588,375 -- --
Crompton & Knowles Corp. ................. 65,534,700 34,325,930 614,460 137,800,000 261,900 292,418
DT Industries, Inc. (a)................... 20,366,500 22,230,101 42,269,251 -- 29,924 (3,199,546)
Chancellor Media Corp. (Class A)(a) ...... 62,782,500 26,261,011 97,120,056 -- -- 108,624,669
Harman International Industries, Inc. (a). 83,281,750 19,373,632 76,334,998 -- 220,450 (15,768,300)
Medimmune, Inc. .......................... 17,205,700 389,200 84,900 57,443,925 -- 818,670
Mohawk Industries, Inc. (a) .............. 27,068,800 19,900,747 -- 69,103,125 -- --
National Steel Corp. (a).................. -- 28,264,493 28,264,495 -- -- 3,035,056
Nine West Group, Inc. (a)................. 144,356,100 17,605,733 133,671,638 -- -- 12,984,585
Polymer Group, Inc. (a)................... 36,167,575 -- 46,201,328 -- -- (22,064,281)
Security Capital Group, Inc. (Class B) .. -- 40,510,428 -- 38,509,250 -- --
Suburban Lodges of America ............... 15,078,400 6,099,725 6,680,579 12,034,500 -- 2,551,018
Telephone & Data Systems, Inc. ........... 104,508,750 56,919,636 70,807,836 133,322,406 629,885 (3,646,115)
Tommy Hilfiger Corp....................... 54,110,400 38,382,299 7,604,889 68,124,937 -- (1,608,315)
Ultramar Diamond Shamrock Corp. (a) ...... 132,338,671 12,303,736 104,934,966 34,750,125 4,075,705 6,800,077
Xtra Corp. (a) ........................... 59,701,350 13,514,957 78,406,603 -- 614,880 (6,280,053)
-------------- -------------- ------------ ------------
$1,028,594,858 $1,068,428,743 $7,600,919 $ 73,433,264
============== ============== ============ ============
</TABLE>
- ------------
(a) Holdings represented less than 5% of outstanding shares at December 31,
1997, although ownership was above 5% for a period of time during the
year.
86
<PAGE>
THE HUDSON RIVER TRUST
FINANCIAL HIGHLIGHTS
December 31, 1997
SELECTED DATA FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH PERIOD(c)
ALLIANCE MONEY MARKET PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IA CLASS IB
-------------------------------------------------------- -----------------------------
OCTOBER 2,
YEAR ENDED DECEMBER 31, YEAR ENDED 1996 TO
-------------------------------------------------------- DECEMBER 31, DECEMBER 31,
1997 1996 1995 1994 1993* 1997 1996
---------- ---------- ---------- ---------- ---------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period (a) .. $10.17 $10.16 $10.14 $10.12 $10.11 $10.16 $10.16
---------- ---------- ---------- ---------- ---------- -------------- ------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income..................... 0.54 0.54 0.57 0.41 0.30 0.52 0.11
Net realized and unrealized gain (loss)
on investments........................... -- (0.01) -- -- -- -- 0.01
---------- ---------- ---------- ---------- ---------- -------------- ------------
Total from investment operations.......... 0.54 0.53 0.57 0.41 0.30 0.52 0.12
---------- ---------- ---------- ---------- ---------- -------------- ------------
LESS DISTRIBUTIONS:
Dividends from net investment income ..... (0.53) (0.52) (0.55) (0.39) (0.29) (0.51) (0.02)
Dividends in excess of net investment
income................................... -- -- -- -- -- -- (0.10)
Distributions from realized gains ....... (0.00) -- -- -- -- (0.00) --
---------- ---------- ---------- ---------- ---------- -------------- ------------
Total dividends and distributions ....... (0.53) (0.52) (0.55) (0.39) (0.29) (0.51) (0.12)
---------- ---------- ---------- ---------- ---------- -------------- ------------
Net asset value, end of period............. $10.18 $10.17 $10.16 $10.14 $10.12 $10.17 $10.16
========== ========== ========== ========== ========== ============== ============
Total return (d)........................... 5.42% 5.33% 5.74% 4.02% 3.00% 5.16% 1.29%
========== ========== ========== ========== ========== ============== ============
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's).......... $449,960 $463,422 $386,691 $325,391 $248,460 $123,675 $3,184
Ratio of expenses to average net assets ... 0.39% 0.43% 0.44% 0.42% 0.42% 0.63% 0.67% (b)
Ratio of net investment income to average
net assets................................ 5.28% 5.17% 5.53% 4.01% 2.91% 5.02% 4.94% (b)
</TABLE>
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES PORTFOLIO(e):
<TABLE>
<CAPTION>
CLASS IA CLASS IB
----------------------------------------------------- --------------
MAY 1, 1997
YEAR ENDED DECEMBER 31, TO
----------------------------------------------------- DECEMBER 31,
1997 1996 1995 1994 1993* 1997
---------- --------- --------- --------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period (a) .. $ 9.29 $ 9.47 $ 8.87 $10.08 $10.53 $ 9.27
---------- --------- --------- --------- ---------- --------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income..................... 0.53 0.54 0.58 0.65 0.59 0.32
Net realized and unrealized gain (loss)
on investments........................... 0.13 (0.19) 0.57 (1.08) 0.51 0.22
---------- --------- --------- --------- ---------- --------------
Total from investment operations.......... 0.66 0.35 1.15 (0.43) 1.10 0.54
---------- --------- --------- --------- ---------- --------------
LESS DISTRIBUTIONS:
Dividends from net investment income ..... (0.51) (0.53) (0.55) (0.78) (0.68) (0.38)
Distributions from realized gains ........ -- -- -- -- (0.87) --
---------- --------- --------- --------- ---------- --------------
Total dividends and distributions ........ (0.51) (0.53) (0.55) (0.78) (1.55) (0.38)
---------- --------- --------- --------- ---------- --------------
Net asset value, end of period............. $ 9.44 $ 9.29 $ 9.47 $ 8.87 $10.08 $ 9.43
========== ========= ========= ========= ========== ==============
Total return (d)........................... 7.29% 3.78% 13.33% (4.37)% 10.58% 5.83%
========== ========= ========= ========= ========== ==============
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's).......... $115,114 $88,384 $71,780 $48,518 $158,511 $5,052
Ratio of expenses to average net assets ... 0.55% 0.56% 0.57% 0.56% 0.53% 0.81%(b)
Ratio of net investment income to average
net assets................................ 5.61% 5.73% 6.15% 6.75% 5.43% 5.15%(b)
Portfolio turnover rate.................... 285% 318% 255% 133% 254% 285%
</TABLE>
87
<PAGE>
THE HUDSON RIVER TRUST
FINANCIAL HIGHLIGHTS--(Continued)
December 31, 1997
ALLIANCE QUALITY BOND PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IA
---------------------------------------------
YEAR ENDED DECEMBER 31, OCTOBER 1, 1993
--------------------------------------------- TO
1997 1996 1995 1994 DECEMBER 31, 1993
---------- ---------- ---------- ---------- -----------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period (a).......................... $ 9.49 $ 9.61 $ 8.72 $ 9.82 $ 10.00
---------- ---------- ---------- ---------- -----------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income............................................ 0.60 0.57 0.57 0.66 0.11
Net realized and unrealized gain (loss) on investments and
foreign currency transactions................................... 0.24 (0.07) 0.88 (1.16) (0.16)
---------- ---------- ---------- ---------- -----------------
Total from investment operations................................. 0.84 0.50 1.45 (0.50) (0.05)
---------- ---------- ---------- ---------- -----------------
LESS DISTRIBUTIONS:
Dividends from net investment income............................. (0.59) (0.60) (0.56) (0.55) (0.12)
Dividends in excess of net investment income..................... -- (0.02) -- -- --
Distributions in excess of realized gains........................ -- -- -- -- (0.01)
Tax return of capital distributions.............................. -- -- -- (0.05) --
---------- ---------- ---------- ---------- -----------------
Total dividends and distributions................................ (0.59) (0.62) (0.56) (0.60) (0.13)
---------- ---------- ---------- ---------- -----------------
Net asset value, end of period.................................... $ 9.74 $ 9.49 $ 9.61 $ 8.72 $ 9.82
========== ========== ========== ========== =================
Total return (d).................................................. 9.14% 5.36% 17.02% (5.10)% (0.51)%
========== ========== ========== ========== =================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's)................................. $203,233 $155,023 $157,443 $127,575 $104,832
Ratio of expenses to average net assets........................... 0.57% 0.59% 0.59% 0.59% 0.69%(b)
Ratio of net investment income to average net assets ............. 6.19% 6.06% 6.13% 7.17% 4.62%(b)
Portfolio turnover rate........................................... 374% 431% 411% 222% 77%
</TABLE>
ALLIANCE HIGH YIELD PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IA CLASS IB
------------------------------------------------------ -----------------------------
OCTOBER 2,
YEAR ENDED DECEMBER 31, YEAR ENDED 1996 TO
------------------------------------------------------ DECEMBER 31, DECEMBER 31,
1997 1996 1995 1994 1993* 1997 1996
---------- ---------- ---------- --------- --------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period (a) . $10.02 $ 9.64 $ 8.91 $10.08 $ 9.15 $10.01 $10.25
---------- ---------- ---------- --------- --------- -------------- --------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income..................... 1.04 1.02 0.98 0.89 0.94 1.05 0.19
Net realized and unrealized gain (loss)
on investments .......................... 0.75 1.07 0.73 (1.17) 1.10 0.71 0.15
---------- ---------- ---------- --------- --------- -------------- --------------
Total from investment operations.......... 1.79 2.09 1.71 (0.28) 2.04 1.76 0.34
---------- ---------- ---------- --------- --------- -------------- --------------
LESS DISTRIBUTIONS:
Dividends from net investment income ..... (0.97) (0.98) (0.94) (0.88) (0.92) (0.95) (0.03)
Dividends in excess of net investment
income................................... -- (0.03) (0.04) (0.01) -- -- (0.25)
Distributions from realized gains ........ (0.43) (0.70) -- -- (0.19) (0.43) (0.01)
Distributions in excess of realized
gains.................................... -- -- -- -- -- -- (0.29)
---------- ---------- ---------- --------- --------- -------------- --------------
Total dividends and distributions ........ (1.40) (1.71) (0.98) (0.89) (1.11) (1.38) (0.58)
---------- ---------- ---------- --------- --------- -------------- --------------
Net asset value, end of period............. $10.41 $10.02 $ 9.64 $ 8.91 $10.08 $10.39 $10.01
========== ========== ========== ========= ========= ============== ==============
Total return (d)........................... 18.48% 22.89% 19.92% (2.79)% 23.15% 18.19% 3.32%
========== ========== ========== ========= ========= ============== ==============
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's).......... $355,473 $199,360 $118,129 $73,895 $67,169 $66,338 $ 685
Ratio of expenses to average net assets .. 0.62% 0.59% 0.60% 0.61% 0.63% 0.88% 0.82%(b)
Ratio of net investment income to average
net assets................................ 9.82% 9.93% 10.34% 9.23% 9.52% 9.76% 8.71%(b)
Portfolio turnover rate ...................[PAGE 88] 390% 485% 350% 248% 280% 390% 485%
</TABLE>
88
<PAGE>
THE HUDSON RIVER TRUST
FINANCIAL HIGHLIGHTS--(Continued)
December 31, 1997
ALLIANCE GROWTH AND INCOME PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IA CLASS IB
------------------------------------------------------------- -----------------
YEAR ENDED DECEMBER 31, OCTOBER 1, 1993 MAY 1, 1997
------------------------------------------ TO TO
1997 1996 1995 1994 DECEMBER 31, 1993 DECEMBER 31, 1997
---------- ---------- --------- --------- ----------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period (a)....... $ 13.01 $ 11.70 $ 9.70 $ 9.95 $10.00 $ 13.42
---------- ---------- --------- --------- ----------------- ---------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income......................... 0.15 0.24 0.33 0.31 0.03 0.05
Net realized and unrealized gain (loss) on
investments.................................. 3.30 2.05 1.97 (0.36) (0.06) 2.91
---------- ---------- --------- --------- ----------------- ---------------
Total from investment operations.............. 3.45 2.29 2.30 (0.05) (0.03) 2.96
---------- ---------- --------- --------- ----------------- ---------------
LESS DISTRIBUTIONS:
Dividends from net investment income.......... (0.15) (0.23) (0.30) (0.20) (0.02) (0.09)
Dividends in excess of net investment income . -- -- -- -- (0.00) --
Distributions from realized gains............. (0.93) (0.75) -- -- -- (0.93)
Tax return of capital distributions........... -- -- -- -- (0.00) --
---------- ---------- --------- --------- ----------------- ---------------
Total dividends and distributions............. (1.08) (0.98) (0.30) (0.20) (0.02) (1.02)
---------- ---------- --------- --------- ----------------- ---------------
Net asset value, end of period................. $ 15.38 $ 13.01 $ 11.70 $ 9.70 $ 9.95 $ 15.36
========== ========== ========= ========= ================= ===============
Total return (d)............................... 26.90% 20.09% 24.07% (0.58)% (0.25)% 22.41%
========== ========== ========= ========= ================= ===============
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's).............. $555,059 $232,080 $98,053 $31,522 $1,456 $32,697
Ratio of expenses to average net assets ....... 0.58% 0.58% 0.60% 0.78% 2.70%(b) 0.83%(b)
Ratio of net investment income to average
net assets ................................... 0.99% 1.94% 3.11% 3.13% 1.12%(b) 0.43%(b)
Portfolio turnover rate ....................... 79% 88% 65% 52% 48% 79%
Average commission rate paid (f)............... $ 0.0586 $ 0.0604 -- -- -- $0.0586
</TABLE>
ALLIANCE EQUITY INDEX PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IA CLASS IB
---------------------------------------------------- -----------------
YEAR ENDED DECEMBER 31, MARCH 1, 1994 MAY 1, 1997
---------------------------------- TO TO
1997 1996 1995 DECEMBER 31, 1994 DECEMBER 31, 1997
---------- ---------- ---------- ----------------- -----------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period (a) ................. $ 15.16 $ 13.13 $ 9.87 $ 10.00 $ 16.35
---------- ---------- ---------- ----------------- -----------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income.................................... 0.26 0.27 0.26 0.20 0.14
Net realized and unrealized gain (loss) on investments
and foreign currency transactions ...................... 4.64 2.65 3.32 (0.09) 3.48
---------- ---------- ---------- ----------------- -----------------
Total from investment operations......................... 4.90 2.92 3.58 0.11 3.62
---------- ---------- ---------- ----------------- -----------------
LESS DISTRIBUTIONS:
Dividends from net investment income..................... (0.25) (0.25) (0.22) (0.20) (0.17)
Distributions from realized gains........................ (0.07) (0.64) (0.09) (0.03) (0.07)
Distributions in excess of realized gains................ -- -- (0.01) (0.01) --
---------- ---------- ---------- ----------------- -----------------
Total dividends and distributions........................ (0.32) (0.89) (0.32) (0.24) (0.24)
---------- ---------- ---------- ----------------- -----------------
Net asset value, end of period............................ $ 19.74 $ 15.16 $ 13.13 $ 9.87 $ 19.73
========== ========== ========== ================= =================
Total return (d).......................................... 32.58% 22.39% 36.48% 1.08% 22.28%
========== ========== ========== ================= =================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's)......................... $943,631 $386,249 $165,785 $36,748 $ 110
Ratio of expenses to average net assets................... 0.37% 0.39% 0.48% 0.49%(b) 0.62%(b)
Ratio of net investment income to average net assets ..... 1.46% 1.91% 2.16% 2.42%(b) 1.10%(b)
Portfolio turnover rate................................... 3% 15% 9% 7% 3%
Average commission rate paid (f).......................... $ 0.0309 $ 0.0306 -- -- $0.0309
</TABLE>
89
<PAGE>
THE HUDSON RIVER TRUST
FINANCIAL HIGHLIGHTS--(Continued)
December 31, 1997
ALLIANCE COMMON STOCK PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IA
------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------
1997 1996 1995 1994 1993*
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period (a) . $ 18.23 $ 16.48 $ 13.36 $ 14.65 $ 13.49
------------ ------------ ------------ ------------ ------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income.................... 0.14 0.15 0.20 0.20 0.23
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions............................ 5.12 3.73 4.12 (0.51) 3.10
------------ ------------ ------------ ------------ ------------
Total from investment operations ........ 5.26 3.88 4.32 (0.31) 3.33
------------ ------------ ------------ ------------ ------------
LESS DISTRIBUTIONS:
Dividends from net investment income .... (0.11) (0.15) (0.20) (0.19) (0.23)
Dividends in excess of net investment
income.................................. -- -- (0.02) (0.01) (0.00)
Distributions from realized gains ....... (1.77) (1.76) (0.95) (0.77) (1.94)
Distributions in excess of realized
gains................................... -- (0.22) (0.03) -- --
Tax return of capital distributions ..... -- -- -- (0.01) --
------------ ------------ ------------ ------------ ------------
Total dividends and distributions ....... (1.88) (2.13) (1.20) (0.98) (2.17)
------------ ------------ ------------ ------------ ------------
Net asset value, end of period............ $ 21.61 $ 18.23 $ 16.48 $ 13.36 $ 14.65
============ ============ ============ ============ ============
Total return (d).......................... 29.40% 24.28% 32.45% (2.14)% 24.84%
============ ============ ============ ============ ============
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........ $9,331,994 $6,625,390 $4,879,677 $3,466,245 $3,125,128
Ratio of expenses to average net assets .. 0.39% 0.38% 0.38% 0.38% 0.38%
Ratio of net investment income to average
net assets............................... 0.69% 0.85% 1.27% 1.40 % 1.55%
Portfolio turnover rate................... 52% 55% 61% 52% 82%
Average commission rate paid (f).......... $ 0.0579 $ 0.0565 -- -- --
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
CLASS IB
----------------------------
OCTOBER 2,
YEAR ENDED 1996 TO
DECEMBER 31, DECEMBER 31,
1997 1996
-------------- ------------
<S> <C> <C>
Net asset value, beginning of period (a) . $ 18.22 $ 17.90
-------------- ------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income.................... 0.10 0.02
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions............................ 5.11 1.52
-------------- ------------
Total from investment operations ........ 5.21 1.54
-------------- ------------
LESS DISTRIBUTIONS:
Dividends from net investment income .... (0.08) (0.00)
Dividends in excess of net investment
income.................................. -- (0.03)
Distributions from realized gains ....... (1.77) (0.16)
Distributions in excess of realized
gains................................... -- (1.03)
Tax return of capital distributions ..... -- --
-------------- ------------
Total dividends and distributions ....... (1.85) (1.22)
-------------- ------------
Net asset value, end of period............ $ 21.58 $ 18.22
============== ============
Total return (d).......................... 29.07% 8.49%
============== ============
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........ $228,780 $ 1,244
Ratio of expenses to average net assets .. 0.64% 0.63%(b)
Ratio of net investment income to average
net assets............................... 0.46% 0.61%(b)
Portfolio turnover rate................... 52% 55%
Average commission rate paid (f).......... $ 0.0579 $0.0565
</TABLE>
ALLIANCE GLOBAL PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IA CLASS IB
---------------------------------------------------------- ----------------------------
OCTOBER 2,
YEAR ENDED DECEMBER 31, YEAR ENDED 1996 TO
---------------------------------------------------------- DECEMBER 31, DECEMBER 31,
1997 1996 1995 1994 1993* 1997 1996
------------ ---------- ---------- ---------- ---------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period (a) . 16.92 $15.74 $13.87 $13.62 $11.41 $16.91 $ 16.57
------------ ---------- ---------- ---------- ---------- -------------- -------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income.................... 0.17 0.21 0.26 0.20 0.08 0.12 0.02
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions............................ 1.75 2.05 2.32 0.52 3.58 1.76 0.81
------------ ---------- ---------- ---------- ---------- -------------- -------------
Total from investment operations ........ 1.92 2.26 2.58 0.72 3.66 1.88 0.83
------------ ---------- ---------- ---------- ---------- -------------- -------------
LESS DISTRIBUTIONS:
Dividends from net investment income .... (0.36) (0.21) (0.25) (0.17) (0.15) (0.33) --
Dividends in excess of net investment
income.................................. -- (0.08) -- -- -- -- (0.11)
Distributions from realized gains ....... (1.19) (0.79) (0.42) (0.28) (1.30) (1.19) (0.10)
Distributions in excess of realized
gains................................... -- -- (0.03) (0.00) (0.00) -- (0.28)
Tax return of capital distributions ..... -- (0.00) (0.01) (0.02) -- -- (0.00)
------------ ---------- ---------- ---------- ---------- -------------- -------------
Total dividends and distributions ....... (1.55) (1.08) (0.71) (0.47) (1.45) (1.52) (0.49)
------------ ---------- ---------- ---------- ---------- -------------- -------------
Net asset value, end of period............ $ 17.29 $ 16.92 $ 15.74 $ 13.87 $ 13.62 $ 17.27 $ 16.91
============ ========== ========== ========== ========== ============== =============
Total return (d).......................... 11.66% 14.60% 18.81% 5.23 % 32.09% 11.38% 4.98%
============ ========== ========== ========== ========== ============== =============
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........ $1,203,867 $997,041 $686,140 $421,698 $141,257 $21,520 $ 290
Ratio of expenses to average net assets .. 0.69% 0.60% 0.61% 0.69% 0.84% 0.97% 0.86%(b)
Ratio of net investment income to average
net assets............................... 0.97% 1.28% 1.76% 1.41 % 0.62% 0.67% 0.48%(b)
Portfolio turnover rate................... 57% 59% 67% 71% 150% 57% 59%
Average commission rate paid (f).......... $ 0.0412 $ 0.0418 -- -- -- $0.0412 $0.0418
</TABLE>
90
<PAGE>
THE HUDSON RIVER TRUST
FINANCIAL HIGHLIGHTS--(Continued)
December 31, 1997
ALLIANCE INTERNATIONAL PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IA CLASS IB
----------------------------------------- -----------------
YEAR ENDED DECEMBER 31, APRIL 3, 1995 MAY 1, 1997
----------------------- TO TO
1997 1996 DECEMBER 31, 1995 DECEMBER 31, 1997
---------- ---------- ----------------- -----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period (a) ......................... $11.50 $10.87 $10.00 $11.39
---------- ---------- ----------------- -----------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income............................................ 0.10 0.13 0.14 0.02
Net realized and unrealized gain (loss) on investments and
foreign currency transactions .................................. (0.45) 0.94 0.98 (0.31)
---------- ---------- ----------------- -----------------
Total from investment operations................................. (0.35) 1.07 1.12 (0.29)
---------- ---------- ----------------- -----------------
LESS DISTRIBUTIONS:
Dividends from net investment income............................. (0.32) (0.10) (0.07) (0.28)
Dividends in excess of net investment income..................... -- (0.09) (0.13) --
Distributions from realized gains................................ (0.56) (0.25) (0.05) (0.56)
---------- ---------- ----------------- -----------------
Total dividends and distributions................................ (0.88) (0.44) (0.25) (0.84)
---------- ---------- ----------------- -----------------
Net asset value, end of period.................................... $10.27 $11.50 $10.87 $10.26
========== ========== ================= =================
Total return (d).................................................. (2.98)% 9.82% 11.29% (2.54)%
========== ========== ================= =================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's)................................. $190,611 $151,907 $28,684 $3,286
Ratio of expenses to average net assets........................... 1.08% 1.06% 1.03%(b) 1.38%(b)
Ratio of net investment income to average net assets ............. 0.83% 1.10% 1.71%(b) 0.20%(b)
Portfolio turnover rate........................................... 59% 48% 56% 59%
Average commission rate paid (f).................................. $0.0294 $0.0251 -- $0.0294
</TABLE>
ALLIANCE AGGRESSIVE STOCK PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IA
------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------
1997 1996 1995 1994 1993*
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period
(a)..................................... $35.85 $35.68 $30.63 $31.89 $29.81
------------ ------------ ------------ ------------ ------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income................... 0.04 0.09 0.10 0.04 0.09
Net realized and unrealized gain (loss)
on investments......................... 3.71 7.52 9.54 (1.26) 4.91
------------ ------------ ------------ ------------ ------------
Total from investment operations ....... 3.75 7.61 9.64 (1.22) 5.00
------------ ------------ ------------ ------------ ------------
LESS DISTRIBUTIONS:
Dividends from net investment income ... (0.05) (0.09) (0.10) (0.04) (0.09)
Dividends in excess of net investment
income................................. -- (0.00) -- -- --
Distributions from realized gains ...... (3.33) (7.33) (4.49) -- (2.75)
Distributions in excess of realized
gains.................................. -- (0.02) -- -- (0.07)
Tax return of capital distributions .... -- -- -- (0.00) (0.01)
------------ ------------ ------------ ------------ ------------
Total dividends and distributions ...... (3.38) (7.44) (4.59) (0.04) (2.92)
------------ ------------ ------------ ------------ ------------
Net asset value, end of period........... $36.22 $35.85 $35.68 $30.63 $31.89
============ ============ ============ ============ ============
Total return (d)......................... 10.94% 22.20% 31.63% (3.81)% 16.77%
============ ============ ============ ============ ============
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ....... $4,589,771 $3,865,256 $2,700,515 $1,832,164 $1,557,332
Ratio of expenses to average net assets . 0.54% 0.48% 0.49% 0.49% 0.49%
Ratio of net investment income (loss) to
average net assets...................... 0.11% 0.24% 0.28% 0.12 % 0.28%
Portfolio turnover rate.................. 123% 108% 127% 92% 89%
Average commission rate paid (f) ........ $0.0571 $0.0263 -- -- --
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<PAGE>
<TABLE>
<CAPTION>
CLASS IB
----------------------------
OCTOBER 2,
YEAR ENDED 1996 TO
DECEMBER 31, DECEMBER 31,
1997 1996
-------------- -------------
<S> <C> <C>
Net asset value, beginning of period
(a)..................................... $35.83 $37.28
-------------- -------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income................... (0.11) (0.01)
Net realized and unrealized gain (loss)
on investments......................... 3.77 0.85
-------------- -------------
Total from investment operations ....... 3.66 0.84
-------------- -------------
LESS DISTRIBUTIONS:
Dividends from net investment income ... (0.03) --
Dividends in excess of net investment
income................................. -- (0.02)
Distributions from realized gains ...... (3.33) (0.23)
Distributions in excess of realized
gains.................................. -- (2.04)
Tax return of capital distributions .... -- --
-------------- -------------
Total dividends and distributions ...... (3.36) (2.29)
-------------- -------------
Net asset value, end of period........... $36.13 $35.83
============== =============
Total return (d)......................... 10.66% 2.32%
============== =============
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ....... $73,486 $ 613
Ratio of expenses to average net assets . 0.81% 0.73% (b)
Ratio of net investment income (loss) to
average net assets...................... (0.28)% (0.10)%(b)
Portfolio turnover rate.................. 123% 108%
Average commission rate paid (f) ........ $0.0571 $0.0263
</TABLE>
91
<PAGE>
THE HUDSON RIVER TRUST
FINANCIAL HIGHLIGHTS--(Continued)
December 31, 1997
ALLIANCE SMALL CAP GROWTH PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IA CLASS IB
----------------- -----------------
MAY 1, 1997 MAY 1, 1997
TO TO
DECEMBER 31, 1997 DECEMBER 31, 1997
----------------- -----------------
<S> <C> <C>
Net asset value, beginning of period (a) .................. $10.00 $10.00
----------------- -----------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income..................................... 0.01 (0.01)
Net realized and unrealized gain on investments ......... 2.65 2.65
----------------- -----------------
Total from investment operations.......................... 2.66 2.64
----------------- -----------------
LESS DISTRIBUTIONS:
Dividends from net investment income...................... (0.01) (0.00)
Distributions from realized gains......................... (0.30) (0.30)
----------------- -----------------
Total dividends and distributions......................... (0.31) (0.30)
----------------- -----------------
Net asset value, end of period............................. $12.35 $12.34
================= =================
Total return (d)........................................... 26.74% 26.57%
================= =================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's).......................... $94,676 $46,324
Ratio of expenses to average net assets.................... 0.95%(b) 1.15% (b)
Ratio of net investment income (loss) to average net
assets.................................................... 0.10%(b) (0.12)%(b)
Portfolio turnover rate.................................... 96% 96%
Average commission rate paid............................... $0.0488 $0.0488
</TABLE>
ALLIANCE CONSERVATIVE INVESTORS PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IA CLASS IB
-------------------------------------------------------- -----------------
YEAR ENDED DECEMBER 31, MAY 1, 1997
-------------------------------------------------------- TO
1997 1996 1995 1994 1993* DECEMBER 31, 1997
---------- ---------- ---------- ---------- ---------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period (a)............. $11.29 $11.52 $10.15 $11.12 $10.94 $11.29
---------- ---------- ---------- ---------- ---------- -----------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income............................... 0.49 0.50 0.60 0.55 0.52 0.31
Net realized and unrealized gain (loss) on
investments and foreign currency transactions .... 0.97 0.07 1.43 (1.00) 0.65 1.01
---------- ---------- ---------- ---------- ---------- -----------------
Total from investment operations.................... 1.46 0.57 2.03 (0.45) 1.17 1.32
---------- ---------- ---------- ---------- ---------- -----------------
LESS DISTRIBUTIONS:
Dividends from net investment income................ (0.49) (0.51) (0.59) (0.52) (0.50) (0.36)
Dividends in excess of net investment income ....... -- -- -- -- (0.00) --
Distributions from realized gains................... (0.37) (0.27) (0.07) -- (0.49) (0.37)
Distributions in excess of realized gains .......... -- (0.02) -- -- -- --
---------- ---------- ---------- ---------- ---------- -----------------
Total dividends and distributions................... (0.86) (0.80) (0.66) (0.52) (0.99) (0.73)
---------- ---------- ---------- ---------- ---------- -----------------
Net asset value, end of period....................... $11.89 $11.29 $11.52 $10.15 $11.12 $11.88
========== ========== ========== ========== ========== =================
Total return (d)..................................... 13.25% 5.21% 20.40% (4.10)% 10.76% 11.84%
========== ========== ========== ========== ========== =================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's).................... $307,847 $282,402 $252,101 $173,691 $114,418 $5,694
Ratio of expenses to average net assets.............. 0.57% 0.61% 0.59% 0.59% 0.60% 0.80%(b)
Ratio of net investment income to average net
assets.............................................. 4.17% 4.48% 5.48% 5.22% 4.49% 3.82%(b)
Portfolio turnover rate.............................. 206% 181% 287% 228% 178% 206%
Average commission rate paid (f)..................... $0.0413 $0.0488 -- -- -- $0.0413
</TABLE>
92
<PAGE>
THE HUDSON RIVER TRUST
FINANCIAL HIGHLIGHTS--(Continued)
December 31, 1997
ALLIANCE BALANCED PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IA
------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------
1997 1996 1995 1994 1993*
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period (a) . $16.64 $16.76 $14.87 $16.67 $ 16.19
------------ ------------ ------------ ------------ ------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income.................... 0.58 0.53 0.54 0.45 0.50
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions............................ 1.86 1.31 2.36 (1.78) 1.46
------------ ------------ ------------ ------------ ------------
Total from investment operations ........ 2.44 1.84 2.90 (1.33) 1.96
------------ ------------ ------------ ------------ ------------
LESS DISTRIBUTIONS:
Dividends from net investment income .... (0.59) (0.53) (0.54) (0.44) (0.50)
Dividends in excess of net investment
income.................................. -- -- -- (0.03) --
Distributions from realized gains ....... (0.91) (1.40) (0.47) -- (0.95)
Distributions in excess of realized
gains................................... -- (0.03) -- -- (0.03)
Tax return of capital distributions ..... -- -- -- (0.00) --
------------ ------------ ------------ ------------ ------------
Total dividends and distributions ....... (1.50) (1.96) (1.01) (0.47) (1.48)
------------ ------------ ------------ ------------ ------------
Net asset value, end of period............ $17.58 $16.64 $16.76 $14.87 $ 16.67
============ ============ ============ ============ ============
Total return (d).......................... 15.06% 11.68% 19.75% (8.02)% 12.28%
============ ============ ============ ============ ============
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........ $1,724,089 $1,637,856 $1,523,142 $1,329,820 $1,364,640
Ratio of expenses to average net assets .. 0.45% 0.41% 0.40% 0.39% 0.39%
Ratio of net investment income to average
net assets............................... 3.30% 3.15% 3.33% 2.87% 2.99%
Portfolio turnover rate................... 146% 177% 186% 115% 99%
Average commission rate paid (f).......... $0.0409 $0.0516 -- -- --
</TABLE>
ALLIANCE GROWTH INVESTORS PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IA
------------------------------------------------------------
YEAR ENDED DECEMBER 31,
------------------------------------------------------------
1997 1996 1995 1994 1993*
------------ ------------ ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period (a) . $17.20 $17.68 $14.66 $15.61 $ 14.69
------------ ------------ ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income.................... 0.41 0.40 0.57 0.50 0.43
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions............................ 2.43 1.66 3.24 (0.98) 1.79
------------ ------------ ---------- ---------- ----------
Total from investment operations ........ 2.84 2.06 3.81 (0.48) 2.22
------------ ------------ ---------- ---------- ----------
LESS DISTRIBUTIONS:
Dividends from net investment income .... (0.46) (0.40) (0.54) (0.46) (0.42)
Dividends in excess of net investment
income.................................. -- (0.03) (0.01) (0.01) --
Distributions from realized gains ....... (1.03) (2.10) (0.24) -- (0.88)
Distributions in excess of realized
gains................................... -- (0.01) -- -- --
------------ ------------ ---------- ---------- ----------
Total dividends and distributions ....... (1.49) (2.54) (0.79) (0.47) (1.30)
------------ ------------ ---------- ---------- ----------
Net asset value, end of period............ $18.55 $17.20 $17.68 $14.66 $ 15.61
============ ============ ========== ========== ==========
Total return (d).......................... 16.87% 12.61% 26.37% (3.15)% 15.26%
============ ============ ========== ========== ==========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........ $1,630,389 $1,301,643 $896,134 $492,478 $278,467
Ratio of expenses to average net assets .. 0.57% 0.57% 0.56% 0.59% 0.62%
Ratio of net investment income to average
net assets............................... 2.18% 2.31% 3.43% 3.32% 2.71%
Portfolio turnover rate................... 121% 190% 107% 131% 118%
Average commission rate paid (f).......... $0.0460 $0.0495 -- -- --
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<PAGE>
<TABLE>
<CAPTION>
CLASS IB
------------------------------
OCTOBER 2,
YEAR ENDED 1996 TO
DECEMBER 31, DECEMBER 31,
1997 1996
-------------- --------------
<S> <C> <C>
Net asset value, beginning of period (a) . $ 17.19 $ 16.78
-------------- --------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income.................... 0.36 0.07
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions............................ 2.43 0.71
-------------- --------------
Total from investment operations ........ 2.79 0.78
-------------- --------------
LESS DISTRIBUTIONS:
Dividends from net investment income .... (0.43) (0.02)
Dividends in excess of net investment
income.................................. -- (0.09)
Distributions from realized gains ....... (1.03) (0.02)
Distributions in excess of realized
gains................................... -- (0.24)
-------------- --------------
Total dividends and distributions ....... (1.46) (0.37)
-------------- --------------
Net asset value, end of period............ $ 18.52 $ 17.19
============== ==============
Total return (d).......................... 16.58% 4.64%
============== ==============
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........ $35,730 $ 472
Ratio of expenses to average net assets .. 0.82% 0.84%(b)
Ratio of net investment income to average
net assets............................... 1.88% 1.69%(b)
Portfolio turnover rate................... 121% 190%
Average commission rate paid (f).......... $0.0460 $0.0495
</TABLE>
93
<PAGE>
THE HUDSON RIVER TRUST
FINANCIAL HIGHLIGHTS--(Concluded)
December 31, 1997
* Prior to July 22, 1993, Equitable Capital Management Corporation
("Equitable Capital") served as the investment adviser to the Trust. On
July 22, 1993, Alliance Capital Management L.P. acquired the business
and substantially all of the assets of Equitable Capital and became the
investment adviser to the Trust.
(a) Date as of which funds were first allocated to the Portfolios are as
follows:
Class IA:
Alliance Common Stock Portfolio--June 16, 1975
Alliance Money Market Portfolio--July 13, 1981
Alliance Balanced Portfolio--January 27, 1986
Alliance Aggressive Stock Portfolio--January 27, 1986
Alliance High Yield Portfolio--January 2, 1987
Alliance Global Portfolio--August 27, 1987
Alliance Conservative Investors Portfolio--October 2, 1989
Alliance Growth Investors Portfolio--October 2, 1989
Alliance Intermediate Government Securities Portfolio--April 1, 1991
Alliance Quality Bond Portfolio--October 1, 1993
Alliance Growth and Income Portfolio--October 1, 1993
Alliance Equity Index Portfolio--March 1, 1994
Alliance International Portfolio--April 3, 1995
Alliance Small Cap Growth--May 1, 1997
Class IB:
Alliance Money Market, Alliance High Yield, Alliance Common Stock,
Alliance Global, Alliance Aggressive Stock and Alliance Growth
Investors Portfolios--October 2, 1996.
Alliance Intermediate Government Securities, Alliance Growth and
Income, Alliance Equity Index, Alliance International, Alliance Small
Cap Growth and Alliance Conservative Investors Portfolios--May 1, 1997.
(b) Annualized.
(c) Net investment income and capital changes per share are based upon
monthly average shares outstanding.
(d) Total return is calculated assuming an initial investment made at the
net 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.
(e) On February 22, 1994, shares of the Alliance Intermediate Government
Securities Portfolio of the Trust were substituted for shares of the
Trust's Alliance Short-Term World Income Portfolio.
(f) For fiscal years beginning on or after September 1, 1995, a portfolio
is required to disclose its average commission rate paid per share for
equity security trades on which commissions are charged.
94
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Shareholders of
The Hudson River Trust
In our opinion, the accompanying statements of assets and liabilities,
including the portfolios of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of the Alliance
Money Market Portfolio, Alliance Intermediate Government Securities
Portfolio, Alliance Quality Bond Portfolio, Alliance High Yield Portfolio,
Alliance Growth and Income Portfolio, Alliance Equity Index Portfolio,
Alliance Common Stock Portfolio, Alliance Global Portfolio, Alliance
International Portfolio, Alliance Aggressive Stock Portfolio, Alliance Small
Cap Growth Portfolio, Alliance Conservative Investors Portfolio, Alliance
Balanced Portfolio and Alliance Growth Investors Portfolio (constituting the
fourteen portfolios of The Hudson River Trust, hereafter referred to as the
"Trust") at December 31, 1997, the results of each of their operations for
the year then ended, and the changes in each of their net assets and the
financial highlights for each of the periods presented, in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are
the responsibility of the Trust's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with
generally accepted auditing standards which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at December 31, 1997 by correspondence with the
custodian and brokers and the application of alternative auditing procedures
where confirmations from brokers were not received, provide a reasonable
basis for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
February 9, 1998
95
<PAGE>
- --------------------------------------------------------------------------------
THE EQ ADVISORS TRUST
- --------------------------------------------------------------------------------
Annual Report
December 31, 1997
<PAGE>
- --------------------------------------------------------------------------------
EQ ADVISORS TRUST
- --------------------------------------------------------------------------------
NOTES ON PERFORMANCE
Performance of the EQ Advisors Trust portfolios as shown on the following pages
also contain comparative benchmarks, including both unmanaged and managed
indices and universes of managed portfolios. Each of the portfolios'
unannualized net rates of return are net of investment management fees, and
expenses of each of the portfolios of the EQ Advisors Trust. These rates are not
representative of the actual return you would receive under an Equitable
variable life insurance policy or annuity contract. No policyowner or
contractholder can invest directly in the EQ Advisors Trust portfolios. Changes
in policy values depend not only on the investment performance of the EQAdvisors
Trust portfolios, but also on the insurance and administrative charges,
applicable sales charges and the mortality and expense risk charge applicable
under a policy. These policy charges effectively reduce the dollar amount of any
net gains and increase the dollar amount of any net losses. The performance
shown is for the period since inception through December 31, 1997 and is
unannualized.
Each of the EQ Advisors Trust portfolios has a separate investment objective it
seeks to achieve by following a separate investment policy. There is no
guarantee that these objectives will be attained. The objectives and policies of
each portfolio will affect its return and its risk. Keep in mind that past
performance is no indication of future results.
THE BENCHMARKS
Market indices, which are unmanaged, are not subject to fees and expenses
typically associated with managed investment company portfolios, and investments
cannot be made in an index. Comparisons with these benchmarks, therefore, are of
limited use. They are included because they are widely known and may help you to
understand the universe of securities from which each Portfolio is likely to
select its holdings.
(1) The Standard & Poor's 500 Composite Stock Price Index ("S&P 500") is an
unmanaged index containing common stock of 500 industrial, transportation,
utility and financial companies, regarded as generally representative of the
United States stock market. The Index reflects the reinvestment of dividends, if
any, but does not reflect fees, brokerage commissions or other expenses of
investing.
(2) The Russell 2000 Index ("Russell 2000") is an unmanaged index (with no
defined investment objective) of 2000 small-cap stocks and it includes
reinvestment of dividends. It is compiled by the Frank Russell Company.
(3) The Morgan Stanley Capital International EAFE Index ("MSCI EAFE") is a
market capitalization weighted equity index composed of a sample of companies
representative of the market structure of Europe, Australia and the Far East.
MSCI EAFE Index returns assume dividends reinvested net of withholding tax and
do not reflect any fees or expenses.
(4) The Morgan Stanley Capital International Emerging Markets Free Price Return
Index ("MSCI Emerging Markets Free") is a market capitalization weighted equity
index composed of companies that are representative of the market structure of
the following countries: Argentina, Brazil, Chile, China Free, Columbia, Czech
Republic, Greece, Hungary, India, Indonesia, Israel, Jordan, Korea (@50%),
Malaysia, Mexico Free, Pakistan, Peru, Philippines Free, Poland, Russia, South
Africa, SriLanka, Taiwan (@50%), Thailand, Turkey, Venezuela Free. The base date
for the index is December 31, 1987. "Free" MSCI indices exclude those shares not
purchasable by foreign investors. The average size of the emerging market
companies within this index is US$800 million.
(5) Lehman Government/Corporate Bond Index ("Lehman Gov't/Corp") represents an
unmanaged group of securities widely regarded by investors as representative of
the bond market. The "blended" performance numbers (e.g. 60% S&P 500/40% Lehman
Gov't/Corp) assume a static mix of the two indices.
<PAGE>
- --------------------------------------------------------------------------------
EQ ADVISORS TRUST
- --------------------------------------------------------------------------------
(6) The Lipper Averages are contained in Lipper's survey of the performance of a
large number of mutual funds. This survey is published by Lipper Analytical
Services, Inc., a firm recognized for its reporting of performance of actively
managed funds. According to Lipper Analytical Services, Inc., the data are
presented net of investment management fees, direct operating expenses, and, for
funds with Rule 12b-1 plans, asset-based charges or 12b-1 distribution fees.
Performance data for funds which assess sales charges in other ways do not
reflect deductions for sales charges. Performance data shown for the Portfolios
does not reflect deduction for sales charges (which are assessed at the policy
level). This means that to the extent that asset-based sales charges deducted by
some funds have lowered the Lipper averages, the performance data shown for the
Portfolios appears relatively more favorable than the performance data for the
Lipper averages.
GROWTH OF A $10,000 INVESTMENT
The charts shown on the following pages illustrate the total value of an assumed
investment in Class 1B shares of each Portfolio of the EQ Advisors Trust. The
periods illustrated are from the inception dates shown through December 31,
1997. These results assume reinvestment of dividends and capital gains. The
total value shown for each Portfolio reflects management fees and operating
expenses of the portfolios. They have not been adjusted for insurance-related
charges and expenses associated with life insurance policies or annuity
contracts, which would lower the total values shown. Results should not be
considered representative of future gains or losses.
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH BASIC VALUE EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
During 1997, the S&P 500 rose 31.01%. The stellar performance is attributable to
the continuation of robust economic growth coupled with low inflation. Most of
the market's gain was achieved in the first several months of the year. In early
October, the uninterrupted climb in the major indices came to an abrupt halt as
investors took notice of the economic dislocations taking place in the Asian
Tiger economies. In one day, the S&P 500 suffered more than a 7% correction as
investors concluded that the problems in Asia would have a decidedly depressing
impact on the U.S. economy and U.S. corporate profits. Although the market
eventually recouped these losses, volatility characterized daily trading as
investors attempted to reconcile continued reports of potentially inflationary
U.S. economic data with the dampening effect on the U.S. economy of the "Asian
Contagion".
Recent activity in the stock market has led to an even wider desparity in
"value" versus "growth" stock valuations. We believe that the underperformance
in groups such as paper and forest products and capital goods- technology is
over. In fact, the currency devaluations in Asia could have a positive impact on
these industries longer- term as it becomes less likely that new capacity will
be added in the foreseeable future. While end demand for paper and technology
products is expected to remain healthy, it is the supply side of the equation
that typically leads to market imbalances. As such, we continued to add to our
positions in International Paper, Louisiana Pacific and other cyclical stocks.
Moreover, it is this thought process that dictated new positions in Stone
Container Corp., Texas Instruments, and Seagate Technology, Inc.
Looking forward, we understand that investors may continue to favor large-cap
growth stocks. However, we remain confident that through our bottom-up approach
to stock selection, investors will be rewarded by our commitment to undervalued
out-of-favor equities. We continue to invest in equities where company specific
events are likely to unleash value and do not invest with a specific forecast of
the direction of interest rates or the economy. This strategy has been
successful in the past and we are confident that it will continue to lead to
healthy performance in the future.
Kevin Rendino, Portfolio Manager
================================================================================
INVESTMENT OBJECTIVE
Capital appreciation and, secondarily, income.
INVESTMENT POLICY
Investment in securities, primarily equities, that the Adviser believes are
undervalued and therefore represent basic investment value.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1997
Net Assets ............................... $49.5 million
Number of Issues .................................... 53
LARGEST EQUITY HOLDINGS, AS OF DEC. 31, 1997
Eastman Kodak Co. ...................... Photo & Optical
Aetna, Inc. .................................. Insurance
Seagram Co. Ltd. ............................. Beverages
Great Lakes Chemical Corp. ................... Chemicals
Wells Fargo & Co. ................................ Banks
Viacom Inc. (Class B) Printing, Publishing, Broadcasting
Lockheed Martin Corp. ........................ Aerospace
Humana, Inc. ................................. Insurance
U.S. West Media Group ............... Telecommunications
Pharmacia & Upjohn, Inc. ......................... Drugs
ASSET MIX DISTRIBUTION, AS OF DEC. 31, 1997
Domestic Common Stock ............................ 75.7%
Foreign Common Stock ............................. 2.6%
Short-Term & Other ............................... 21.7%
TOTAL RETURN OF PORTFOLIO AGAINST BENCHMARKS
As of December 31, 1997
Since Inception
May 1, 1997
Merrill Lynch Basic Value Equity Portfolio ...... 16.99%
(1)S&P 500 ...................................... 22.55%
(6)Lipper Growth & Income Funds Average.......... 21.37%
See the Notes on Performance preceding this section for a more detailed
description of benchmarks.
GROWTH OF $10,000 INVESTMENT AS OF DECEMBER 31, 1997
- -------------------------------------------------------------------------------
MERRILL LYNCH BASIC S&P 500
VALUE EQUITY
- -------------------------------------------------------------------------------
May 1, 1997 $10,000 $10,000
December 31, 1997 $11,699 $12,255
- -------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
MERRILL LYNCH WORLD STRATEGY PORTFOLIO
- --------------------------------------------------------------------------------
During 1997, the overall return of the Portfolio was again held down by the
laggard performance of foreign equities and bonds relative to their U.S.
counterparts. The negative impact of foreign equities was limited by the
reduction of investment in that sector during the second half of 1997. The
decision to limit representation in Asian markets and to remain underweighted in
Japanese equities also reduced the impact of laggard performance of foreign
equities. As for foreign bonds, the maintenance of hedges against the European
fixed income portions of the portfolio during much of the year improved
Portfolio return by limiting the negative impact of a strong U.S. dollar versus
the European currencies. U.S. equities continued to be a positive net
contributor to overall portfolio returns during 1997. The strong overall returns
in the financial services sector, which was the largest single group represented
among U.S. equities, offset less favorable performance among select technology,
healthcare, and economically sensitive equities.
During the second half of 1997, there was a reduction of foreign equity exposure
in favor of increased commitments in cash reserves and U.S. equities and bonds.
This shift reflected our concerns over the widening economic problems in Asia,
including Japan, South Korea, and Southeast Asia. We significantly reduced the
allocation to Japan while maintaining a relatively large commitment to Europe.
In the U.S., expectations of further interest rate declines led us to retain the
largest concentration of funds in the financial services sector. The average
duration of the U.S. bond sector was maintained at the 5.9 year level as of
December 31, 1997, while European obligations accounted for the bulk of the
weighting in the foreign fixed income sector.
Tom Robinson, Portfolio Manager
================================================================================
INVESTMENT OBJECTIVE
High total investment return.
INVESTMENT POLICY
Primarily in a portfolio of equity and fixed income securities, including
convertible securities, of U.S. and foreign issuers.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1997
Net Assets .............................. $18.2 million
Number of Issues .................................. 132
LARGEST EQUITY HOLDINGS, AS OF DEC. 31, 1997
Travelers Group, Inc. ....................... Insurance
Carnival Corp. ........................ Leisure Related
Bank of New York Co., Inc. ...................... Banks
El Paso Natural Gas Co. ................. Utility - Gas
Owens Illinois Inc. ........................ Containers
Arnoldo Mondadori Editore S.p.A.
............ Printing, Publishing, Broadcasting
Gucci Group N.V. ................... Apparel & Textiles
Provident Companies Inc. .................... Insurance
Brunswick Corp. ............................. Machinery
Edison International ............... Utility - Electric
ASSET MIX DISTRIBUTION, AS OF DEC. 31, 1997
Domestic Common Stock ........................... 30.4%
Foreign Stock ................................... 27.7%
Bonds ........................................... 25.3%
Short-Term & Other .............................. 16.6%
TOTAL RETURN OF PORTFOLIO AGAINST BENCHMARKS
As of December 31, 1997
Since Inception
May 1, 1997
Merrill Lynch World Strategy Portfolio .......... 4.70%
Composite Market Benchmark* .................... 10.81%
(6)Lipper Global Flexible Portfolio Average ..... 9.56%
*The Composite Market Benchmark is made up of 36% S&P 500, 24% MSCI EAFE, 21%
Salomon Brothers U.S. Treasury Bond 1 Year+, 14% Salomon Brothers World
Government ex U.S. and 5% U.S. Treasury Bill
See the Notes on Performance preceding this section for a more detailed
description of benchmarks.
GROWTH OF $10,000 INVESTMENT AS OF DECEMBER 31, 1997
- -------------------------------------------------------------------------------
MERRILL LYNCH WORLD COMPOSITE MARKET INDEX
STRATEGY
- -------------------------------------------------------------------------------
May 1, 1997 $10,000 $10,000
December 31, 1997 $10,470 $11,081
- -------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
MFS EMERGING GROWTH COMPANIES PORTFOLIO
- --------------------------------------------------------------------------------
The Portfolio's performance benefited from the strong performance of its largest
sector, technology. Holdings are primarily in software, where the Portfolio owns
stock in leading database, design automation, and mainframe software companies
such as Cadence Design, BMC Software, Compuware, SAP, and Microsoft. Holdings in
leisure stocks, primarily lodging and media companies, also helped performance.
The stocks of radio and television broadcasting companies such as Clear Channel
and Cox Radio were buoyed by positive advertising trends and continued
consolidation within their markets. Drug store and food retailers such as CVS,
Rite Aid, and Fred Meyer also contributed to performance because of strong
underlying growth and cost cutting opportunities generated by mergers and
acquisitions. The market finally recognized the many synergies of the
Portfolio's largest position, Cendant, the new company formed by the merger of
HFS and CUC International, two leading consumer service companies. The
Portfolio's second largest position, Tyco International (a diversified company)
contributed favorably as well due to additive acquisitions and strong internal
growth.
One area that did not perform as well as expected was healthcare, in particular
the stocks of HMO's. Higher than expected expenses more than offset price
increases, creating earnings disappointments. Now that these companies have a
more realistic view of the cost of doing business and should price their product
more realistically, earnings should begin to meet investors' expectations.
Looking ahead, the fundamental outlook for emerging growth stocks remains
positive. In 1998, we expect a slowing of economic growth and a continuation of
the benign interest rate environment that marked this past year. Emerging growth
stocks should generate stronger relative earnings growth than their large cap,
multinational counterparts who are typically more exposed to the turmoil in
Asia. Robust earnings combined with attractive valuations should help
performance. We believe that our strategy of searching out rapidly growing
companies, early in their development, and growth stocks at reasonable prices
should reward investors in 1998.
John Ballen and Toni Shimura, Portfolio Managers
================================================================================
INVESTMENT OBJECTIVE
Long-term growth of capital.
INVESTMENT POLICY
Primarily (i.e., at least 80% of its assets under normal circumstances) in
common stocks of emerging growth companies that the Adviser believes are early
in their life cycle but which have the potential to become major enterprises.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1997
Net Assets ........................... $101.8 million
Number of Issues ................................ 210
LARGEST EQUITY HOLDINGS, AS OF DEC. 31, 1997
Cendant Corp. ................. Professional Services
Tyco International Ltd. ... Diversified-Miscellaneous
Computer Associates Int'l Inc. .......... Electronics
Cisco Systems Inc. ................. Office Equipment
Oracle Corp. ....................... Office Equipment
United Healthcare Corp. ................... Insurance
BMC Software Inc. ....................... Electronics
Compuware Corp. ............... Professional Services
Microsoft, Inc. ......................... Electronics
Cadence Design Systems, Inc. ............ Electronics
ASSET MIX DISTRIBUTION, AS OF DEC. 31, 1997
Domestic Common Stock ......................... 92.3%
Foreign Common Stock ........................... 0.3%
Foreign Preferred Stock ........................ 2.0%
Short-Term & Other ............................. 5.4%
TOTAL RETURN OF PORTFOLIO AGAINST BENCHMARKS
As of December 31, 1997
Since Inception
May 1, 1997
MFS Emerging Growth Companies Portfolio ............ 22.42%
(2)Russell 2000 .................................... 28.68%
(6)Lipper Mid Cap Funds Average..................... 26.03%
See the Notes on Performance preceding this section for a more detailed
description of benchmarks.
GROWTH OF $10,000 INVESTMENT AS OF DECEMBER 31, 1997
- -------------------------------------------------------------------------------
MFS EMERGING GROWTH RUSSELL 2000
COMPANIES
- -------------------------------------------------------------------------------
May 1, 1997 $10,000 $10,000
December 31, 1997 $12,242 $12,868
- -------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
MFS RESEARCH PORTFOLIO
- --------------------------------------------------------------------------------
Over the past year sector weightings in the Portfolio have shifted. Most
notably, the financial services sector has been increased by 6.8%. Within this
sector, several stocks contributed positively to the Portfolio's performance
during the second half of 1997, most notably PNC Bank, Corestates Financial, and
Comerica, Inc. These companies have developed solid competitive positions within
their industry, which continues to benefit from an environment of slow to
moderate growth, low inflation, and a trend toward consolidation.
The Portfolio has also increased its weighting in the technology sector by
approximately 4.6%. While a number of companies within the technology sector
dampened the returns of the Portfolio in the latter half of 1997, we view this
as a derivative of the Southeast Asian crisis, where uncertain demand and
negative currency impact have significantly affected certain stocks. The
Portfolio remains cautious on the impact of Southeast Asian developments and as
a result there have been a number of changes, with an emphasis toward companies
that possess strong secular growth opportunities. Oracle, for example, is one
company that has been affected by the "Asian Flu," coupled with a disappointing
earnings report in November. We will be monitoring their situation closely.
The Portfolio will continue to seek fundamentally strong companies to add in the
year ahead. The Portfolio continues to be based upon our best research within
specific industries. The stocks are selected after careful, in-depth fundamental
analysis of the earnings outlook of the companies. These companies typically
demonstrate: dominant and/or growing market share, quality new/existing
products, superior management teams, and strong financial statements. Portfolio
sector/industry weightings are a fallout of the "best ideas" stock selection
process. However, we revisit weightings regularly to assure agreement within the
changing economic landscape.
Portfolio Management Team
================================================================================
INVESTMENT OBJECTIVE
Long-term growth of capital and future income.
INVESTMENT POLICY
A substantial portion of assets invested in common stock or securities
convertible into common stock of companies believed by the Adviser to possess
better than average prospects for long-term growth.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1997
Net Assets ........................... $116.8 million
Number of Issues ................................ 111
LARGEST EQUITY HOLDINGS, AS OF DEC. 31, 1997
Tyco International Ltd. ............... Miscellaneous
Bristol-Myers Squibb Co........................ Drugs
Microsoft, Inc. ......................... Electronics
Colgate Palmolive Co. ............ Soaps & Toiletries
Cendant Corp. ................. Professional Services
Philip Morris Companies, Inc. ............... Tobacco
United Healthcare Corp. ................... Insurance
United Technologies Corp. ................. Aerospace
Gillette Co. ..................... Soaps & Toiletries
Coca Cola Co. ............................. Beverages
ASSET MIX DISTRIBUTION, AS OF DEC. 31, 1997
Domestic Common Stock ......................... 93.8%
Foreign Common Stock ........................... 2.5%
Short-Term & Other ............................. 3.7%
TOTAL RETURN OF PORTFOLIO AGAINST BENCHMARKS
As of December 31, 1997
Since Inception
May 1, 1997
MFS Research Portfolio .................................. 16.07%
(1)S&P 500 .............................................. 22.55%
(6)Lipper Growth Funds Average........................... 21.82%
See the Notes on Performance preceding this section for a more detailed
description of benchmarks.
GROWTH OF $10,000 INVESTMENT AS OF DECEMBER 31, 1997
- -------------------------------------------------------------------------------
MFS RESEARCH S&P 500
- -------------------------------------------------------------------------------
May 1, 1997 $10,000 $10,000
December 31, 1997 $11,607 $12,255
- -------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
EQ/PUTNAM BALANCED PORTFOLIO
- --------------------------------------------------------------------------------
Through mid-year the Portfolio benefited from its equity holdings in paper and
forest products, publishing, airlines, and banks, and from companies that stood
to gain from global growth or consolidation.
By the fourth quarter, less-cyclical stocks led the market. Our overweight
position in the especially strong utility sector boosted performance as did our
holdings in the robust telecommunications sector. Basic materials, capital
goods, technology, energy, and railroads declined during the quarter on fears of
an Asia-induced economic slowdown.
The U.S. bond market, benefiting from investors' perceptions that the Asian
crisis would have a deflationary impact and would lead to lower yields, recorded
robust gains during the second quarter. The Portfolio's bond component benefited
from overweighting leading corporate and asset-backed sectors. By the third
quarter, a conservative duration posture and a bias toward mortgage-backed
securities dampened returns during September's bond market rally. Finally, this
component underperformed in the fourth quarter due to a slightly defensive
duration stance. Overweighting corporate bonds, particularly Yankee bonds, also
constrained performance, while overweighting mortgage-backed securities boosted
returns somewhat.
Looking ahead, we believe that the U.S. equity market should show modest
appreciation in 1998. International equity markets, particularly
emerging-markets equity, have sold off sharply in the wake of the Asian crisis.
This created value in certain markets, including the U.K. and Mexico, but caused
fundamentals to weaken in others, such as in the markets of Hong Kong, Japan,
and Brazil. With inflationary pressures easing in our opinion and with U.S.
yields continuing to look more attractive on a global basis, our outlook for the
U.S. bond market remains optimistic; however, at current yield levels,
appreciation opportunities for bonds are not as compelling as for stocks.
Edward Bousa, Kenneth Taubes and Robert Paine, Portfolio Managers
================================================================================
INVESTMENT OBJECTIVE
Balanced investment.
INVESTMENT POLICY
Primarily in a well-diversified portfolio of stocks and bonds that will produce
both capital growth and current income.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1997
Net Assets .............................. $25.9 million
Number of Issues .................................. 211
Average Years to Maturity (fixed income only) ... 11.77
LARGEST EQUITY HOLDINGS, AS OF DEC. 31, 1997
Philip Morris Companies, Inc. ................. Tobacco
Exxon Corp. ............................ Oil - Domestic
American Home Products Corp...................... Drugs
Mobil Corp. ............................ Oil - Domestic
Weyerhaeuser Company ............................ Paper
E.I. Dupont DeNemours &Co. .................. Chemicals
Banc One Corp.. ................................. Banks
SBC Communications ................ Utility - Telephone
British Petroleum Co. (ADR) ....... Oil - International
Baxter International, Inc. Hospital Supplies & Services
ASSET MIX DISTRIBUTION, AS OF DEC. 31, 1997
Domestic Common Stock ........................... 57.6%
Domestic Preferred Stock ......................... 0.4%
Foreign Common Stock ............................. 3.5%
Bonds ........................................... 32.6%
Short-Term & Other ............................... 5.9%
TOTAL RETURN OF PORTFOLIO AGAINST BENCHMARKS
As of December 31, 1997
Since Inception
May 1, 1997
EQ/Putnam Balanced Portfolio ............................ 14.38%
(5)60% S&P 500/40% Lehman Gov't/Corp .................... 17.17%
(6)Lipper Balanced Funds Average......................... 15.83%
See the Notes on Performance preceding this section for a more detailed
description of benchmarks.
GROWTH OF $10,000 INVESTMENT AS OF DECEMBER 31, 1997
- -------------------------------------------------------------------------------
EQ/PUTNAM BALANCED 60% S&P 500/40%
LEHMAN GOV'T/CORP
- -------------------------------------------------------------------------------
May 1, 1997 $10,000 $10,000
December 31, 1997 $11,438 $11,717
- -------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
EQ/PUTNAM GROWTH & INCOME VALUE PORTFOLIO
- --------------------------------------------------------------------------------
In the first quarter of 1997, growth stocks, particularly in the technology
sector, sold off and the market focus narrowed to large-cap, value-oriented
stocks. In the second quarter, U.S. equities soared to record levels with
technology and growth-oriented pharmaceutical stocks racing ahead of the market.
Value stocks could not keep pace with the select large-cap growth stocks that
pushed the S&P 500 up a breathtaking 17.44% for the quarter.
In the third quarter, the Portfolio's position in financial services and energy
sectors, plus an underweighting in the lagging consumer growth and health-care
sectors, all contributed to outperformance. By year-end, the Portfolio benefited
from strong issue selection in the financial, utility, and health-care sectors
but was hindered by overweighting the basic industrial, energy, and capital
goods sectors. Weak stock selection in the poor-performing technology sector
also had a negative impact on performance.
The outlook for large-cap value-oriented portfolios remains favorable. Inflation
has remained modest, interest rates are declining, and corporate profit growth
is positive. Valuations are still attractive relative to the general market. In
addition, the backlash from the ongoing currency and economic upheavals in Asia
is creating opportunities for value investors, particularly in the technology
area, but also in the predominantly domestic sectors such as utilities,
telecommunications, and transportation.
Anthony Kreisel, Portfolio Manager
================================================================================
INVESTMENT OBJECTIVE
Capital growth and, secondarily, current income.
INVESTMENT POLICY
Primarily common stocks that offer potential for capital growth and may,
consistent with the Portfolio's investment objective, invest in common stocks
that offer potential for current income.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1997
Net Assets ........................... $150.4 million
Number of Issues ................................ 107
LARGEST EQUITY HOLDINGS, AS OF DEC. 31, 1997
PNC Bank Corp.................................. Banks
Xerox Corp.......................... Office Equipment
Pharmacia & Upjohn, Inc. ...................... Drugs
Merck & Co., Inc............................... Drugs
IBM Corp............................ Office Equipment
Hewlett Packard Co. ................ Office Equipment
Kimberly Clark Corp............................ Paper
Bristol-Myers Squibb, Co. ..................... Drugs
Intel Corp............................... Electronics
Computer Associates Int., Inc. .......... Electronics
ASSET MIX DISTRIBUTION, AS OF DEC. 31, 1997
Domestic Common Stock ......................... 87.7%
Foreign Common Stock ........................... 3.7%
Short-Term & Other ............................. 8.6%
TOTAL RETURN OF PORTFOLIO AGAINST BENCHMARKS
As of December 31, 1997
Since Inception
on May 1, 1997
EQ/Putnam Growth & Income Value Portfolio ............... 16.23%
(1)S&P 500 .............................................. 22.55%
(6)Lipper Growth & Income Funds Average ................. 21.37%
See the Notes on Performance preceding this section for a more detailed
description of benchmarks.
GROWTH OF $10,000 INVESTMENT AS OF DECEMBER 31, 1997
- -------------------------------------------------------------------------------
EQ/PUTNAM GROWTH & S&P 500
INCOME VALUE
- -------------------------------------------------------------------------------
May 1, 1997 $10,000 $10,000
December 31, 1997 $11,623 $12,255
- -------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
EQ/PUTNAM INTERNATIONAL EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
The trend in international stocks told two vastly different tales. Continental
Europe, as measured by the MSCI Europe Index (+23.8% in U.S. dollar terms),
experienced strong gains during much of the year amid steady growth, low
interest rates, modest inflationary pressures, and corporate restructurings and
consolidations. Best performers in 1997 among individual countries were
Switzerland (+44.3%), Italy (+35.5%), and Denmark (+34.5%).
It was quite a different story in Asia, of course, where economic turmoil
reached crisis proportions as the year progressed. Erupting late summer in
Thailand before spreading to Malaysia, Indonesia, and the Philippines, the
"Asian flu" worsened during the fourth quarter in Hong Kong, South Korea, and
Japan. The troubles pushed markets sharply lower throughout Asia while
restraining virtually all other world markets.
For the year as a whole, country allocation, relative to the MSCI EAFE Index,
contributed most significantly to the Portfolio's outperformance, although both
stock selection and currency hedging were strongly positive. The underweighting
of the Portfolio in Japan and Malaysia and the overweighting in the Netherlands,
Ireland, Sweden, France, and Switzerland were the largest market positives. In
hindsight, our avoidance of Spain and our underweight in Italy were costly
country allocation decisions. Excellent stock picking in Japan was the most
important element of the Portfolio's stock return in 1997.
Justin Scott, Portfolio Manager
================================================================================
INVESTMENT OBJECTIVE
Capital Appreciation
INVESTMENT POLICY
Primarily a diversified portfolio of equity securities of companies organized
under laws of countries other than the United States.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1997
Net Assets ............................ $57.7 million
Number of Issues ................................ 104
LARGEST EQUITY HOLDINGS, AS OF DEC. 31, 1997
Vodafone Group plc ............... Telecommunications
United Bank of Switzerland..................... Banks
Nestle S.A. ................................... Foods
Cie Generale des Eaux ........ Food Services, Lodging
Sony Corp. .......... Household Furniture, Appliances
Elf Acquitaine S.A. ............. Oil - International
Scor ...................................... Insurance
Bayerische Motoren Verek AG .......... Autos & Trucks
B.A.T. Industries plc ....................... Tobacco
Philips Electronics N.V. ....... Electrical Equipment
ASSET MIX DISTRIBUTION, AS OF DEC. 31, 1997
Foreign Common Stock ........................... 87.0%
Short-Term & Other ............................. 13.0%
TOTAL RETURN OF PORTFOLIO AGAINST BENCHMARKS
As of December 31, 1997
Since Inception
May 1, 1997
EQ/Putnam International Equity Portfolio ................ 9.58%
(3)MSCI EAFE ............................................ 2.85%
(6)Lipper International Funds Average ................... 3.76%
See the Notes on Performance preceding this section for a more detailed
description of benchmarks.
GROWTH OF $10,000 INVESTMENT AS OF DECEMBER 31, 1997
- -------------------------------------------------------------------------------
EQ/PUTNAM MSCI EAFE
INTERNATIONAL EQUITY
- -------------------------------------------------------------------------------
May 1, 1997 $10,000 $10,000
December 31, 1997 $10,958 $10,285
- -------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
EQ/PUTNAM INVESTORS GROWTH PORTFOLIO
- --------------------------------------------------------------------------------
Large-cap stocks led the market for most of the year, though mid- and small-cap
stocks rallied dramatically in the third quarter. During that period, large-cap
multinationals began to reflect some weakening in overseas earnings. By
year-end, small-cap indices suffered from a significant pullback in technology
stocks.
In early 1997 value-oriented stocks outperformed growth stocks in a continuing
trend that began in 1996; growth stocks then rallied as the stable growth
earnings environment became evident. As uncertainty surrounding the economic and
financial outlook of Southeast Asia increased, investors focused on earnings. In
the fourth quarter, both growth and value stocks produced mixed results, though
value stocks made up many top-performing sectors.
Overweighting the robust finance and consumer product sectors aided performance
as did underweight exposure -- but solid stock selection -- in the lagging
energy and basic industry sectors. Stock selection was particularly strong among
banks and computer software stocks.
Overweight exposure to the technology sector, which retreated in the fourth
quarter, and underweight exposure to utilities, which staged a late-year rally,
hindered relative performance. Additionally, stock selection lagged in some
cyclical industries.
Looking ahead, our goal is to identify corporations whose earnings growth can
sustain the uncertainties of the global economy while benefiting from U.S.
economic growth. We continue to overweight technology (though less heavily than
previously) with an emphasis on software and PC stocks. We remain overweighted
in finance. In consumer products, we are overweighted in retail, lodging, and
publishing. We are positioned to take advantage of the more defensive consumer
staples sector and we are maintaining a significant exposure to major
pharmaceutical companies while reducing our exposure to health services.
Finally, we remain underweighted in energy, capital goods, and basic industry
due to the less-than-robust global economic outlook for commodity cyclicals.
C. Beth Cotner, Richard England, Manual Weiss Herrero, and David Santos,
Portfolio Managers
================================================================================
INVESTMENT OBJECTIVE
Long-term growth of capital and any increased income that results from this
growth.
INVESTMENT POLICY
Primarily common stocks that the Adviser believes afford the best opportunity
for long-term capital growth.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1997
Net Assets ............................ $39.7 million
Number of Issues ................................. 81
LARGEST EQUITY HOLDINGS, AS OF DEC. 31, 1997
General Electric Co. .............. Electrical Equipment
Gannett Co. ......... Printing, Publishing, Broadcasting
CVS Corp. ............................. Retail - General
BankAmerica Corp. ................................ Banks
Pfizer, Inc. ..................................... Drugs
Microsoft, Inc. ............................ Electronics
Proctor & Gamble, Co. ............... Soaps & Toiletries
American Express Co. ................ Financial Services
Bristol-Myers Squibb Co. ......................... Drugs
Tyco International, Ltd. ... Diversified - Miscellaneous
ASSET MIX DISTRIBUTION, AS OF DEC. 31, 1997
Domestic Common Stock ............................ 95.7%
Foreign Common Stock .............................. 0.4%
Short-Term & Other ................................ 3.9%
TOTAL RETURN OF PORTFOLIO AGAINST BENCHMARKS
As of December 31, 1997
Since Inception
May 1, 1997
EQ/Putnam Investors Growth Portfolio .................... 24.70%
(1)S&P 500 .............................................. 22.55%
(6)Lipper Growth Funds Average........................... 21.82%
See the Notes on Performance preceding this section for a more detailed
description of benchmarks.
GROWTH OF $10,000 INVESTMENT AS OF DECEMBER 31, 1997
- -------------------------------------------------------------------------------
EQ/PUTNAM INVESTORS S&P 500
GROWTH
- -------------------------------------------------------------------------------
May 1, 1997 $10,000 $10,000
December 31, 1997 $12,470 $12,255
- -------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
T. ROWE PRICE EQUITY INCOME PORTFOLIO
- --------------------------------------------------------------------------------
The past year was characterized by tremendous stock market volatility. Equities
struggled in the first quarter, particularly in the small-capitalization sector.
Then prices rebounded sharply in the second and third quarters. The fourth
quarter returned to a pattern of mixed results as weakness in October,
culminating with the decline of 554 points for the Dow Jones Industrial Average
on October 27, was more than offset by steady gains in November and December.
In this volatile environment, we tried to tune out as much short-term noise as
possible by identifing reasonably valued investment opportunities with
attractive yields and price-to-earnings ratios, good upside potential, and
limited downside risk.
Electric utility and telephone company sectors have performed well recently
after a long period of underperformance, as investors have sought the relative
safety of equities with higher dividend yields. Strong price appreciation in
stocks such as Bell Atlantic, BellSouth, BGE, and Unicom helped the Portfolio's
return in the recent months.
The equity market has provided investors with three unprecedented years of
prosperity, and the investment environment has been exceptionally conducive to
good returns. As prices have advanced, the market's valuation appeal and likely
near-term upside potential have diminished.
We are mindful of how virtually impossible it is to make accurate market
predictions, and we never try to manage the Portfolio based on someone else's
market forecasts. However, we do question how long the "delinkage" between the
underlying rate of corporate earnings and dividend growth and the more rapid
advance of security prices can continue.
Brian Rogers, Portofolio Manager
================================================================================
INVESTMENT OBJECTIVE
Substantial dividend income and also capital appreciation.
INVESTMENT POLICY
Primarily dividend paying common stocks of established companies.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1997
Net Assets ............................. $99.9 million
Number of Issues ................................. 158
LARGEST EQUITY HOLDINGS, AS OF DEC. 31, 1997
Mellon Bank Corp. .............................. Banks
AT&T Corp......................... Utility - Telephone
Dow Chemical Co. .............. Chemicals - Speciality
Atlantic Ritchfield Co. ............... Oil - Domestic
American Home Products Corp. ................... Drugs
Union Pacific Corp. ........................ Railroads
Alltel Corp. ..................... Utility - Telephone
SBC Communications, Inc. ......... Utility - Telephone
Exxon Corp. ........................... Oil - Domestic
Anheuser-Busch Companies, Inc. ............. Beverages
ASSET MIX DISTRIBUTION, AS OF DEC. 31, 1997
Domestic Common Stock .......................... 89.2%
Foreign Common Stock ............................ 1.9%
Short-Term & Other .............................. 8.9%
TOTAL RETURN OF PORTFOLIO AGAINST BENCHMARKS
As of December 31, 1997
Since Inception
May 1, 1997
T. Rowe Price Equity Income Portfolio ................... 22.11%
(1)S&P 500 .............................................. 22.55%
(6)Lipper Equity Income Funds Average.................... 21.84%
See the Notes on Performance preceding this section for a more detailed
description of benchmarks.
GROWTH OF $10,000 INVESTMENT AS OF DECEMBER 31, 1997
- -------------------------------------------------------------------------------
T. ROWE PRICE EQUITY S&P 500
INCOME
- -------------------------------------------------------------------------------
May 1, 1997 $10,000 $10,000
December 31, 1997 $12,211 $12,255
- -------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
T. ROWE PRICE INTERNATIONAL STOCK PORTFOLIO
- --------------------------------------------------------------------------------
1997 ended on a disappointing note for international equities. The currency
crisis which had started in Thailand quickly spread to other Asian stock
markets. Japan, a country whose economic health is closely tied to the health of
the Pacific region, both in terms of export demand and bank lending, was also
affected. Korea, with an over-leveraged corporate sector, was one of the markets
most dramatically impacted, requiring intervention by the International Monetary
Fund to stabilize the financial markets. After initial sell-offs that developed
in sympathy with Asia's troubled markets, the U.S. and Europe recovered nicely.
The outlook remains reasonable for European markets with corporate profits
growth likely to be strong supported by good economic growth and further
restructuring.We believe that Latin American markets remain attractive given
continued commitment to political and economic reform in the region. The
relative resilience of these markets in recent months despite the problems in
the Pacific has been encouraging.
Prospects for Asia are more uncertain and we remain cautious about the prospects
for the region's smaller markets as we believe that their problems are more
deep-seated than is generally realised. Similarly, we remain cautious on the
Japanese market -- the economic outlook there is poor and the problems of the
banking sector remain severe.
While there may be some bounces in markets which have fallen a long way already,
we believe it is a time to be particularly selective when looking at stocks
traded in Asia. Our strategy is to remain in an underweight and defensive
posture in Asia until we have some conviction that the crisis of confidence is
past.
Thus, we expect that 1998 performance is likely to be driven by the European and
Latin American equity markets, with Asia remaining fragile.
Martin G. Wade, Portfolio Manager
================================================================================
INVESTMENT OBJECTIVE
Long-term growth of capital.
INVESTMENT POLICY
Primarily common stocks of established non-United States companies.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1997
Net Assets ................................. $74.6 million
Number of Issues ..................................... 316
LARGEST EQUITY HOLDINGS, AS OF DEC. 31, 1997
National Westminster Bank .......................... Banks
Royal Dutch Petroleum Co. ............ Oil - International
Smithkline Beecham, plc ............................ Drugs
Novartis AG ........................................ Drugs
Diageo, plc .................................... Beverages
Reed International, plc Printing, Publishing, Broadcasting
Shell Transport & Trading Co., plc ... Oil - International
Wolters Kluwer N.V. ........ Oil - Supplies & Construction
Glaxo Welcome, plc ................................. Drugs
Roche Holdings AG .................................. Drugs
ASSET MIX DISTRIBUTION, AS OF DEC. 31, 1997
Foreign Common Stock ............................... 86.9%
Foreign Preferred Stock ............................. 1.9%
Short-Term & Other ................................. 11.2%
TOTAL RETURN OF PORTFOLIO AGAINST BENCHMARKS
As of December 31, 1997
Since Inception
May 1, 1997
T. Rowe Price International Stock Portfolio .............. (1.49)%
(3)MSCI EAFE .............................................. 2.85%
(6)Lipper International Funds Average ..................... 3.76%
See the Notes on Performance preceding this section for a more detailed
description of benchmarks.
GROWTH OF $10,000 INVESTMENT AS OF DECEMBER 31, 1997
- -------------------------------------------------------------------------------
T. ROWE PRICE MSCI EAFE
INTERNATIONAL STOCK
- -------------------------------------------------------------------------------
May 1, 1997 $10,000 $10,000
December 31, 1997 $9,851 $10,285
- -------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS SMALL COMPANY VALUE PORTFOLIO
- --------------------------------------------------------------------------------
During the first quarter of 1997, small caps generally lagged their larger-cap
counterparts by a sizable margin, with investors clearly preferring the latter
group's greater liquidity and perceived earnings stability. This trend began to
reverse in May, however, as the market took note of small-caps' compelling
valuations and more favorable earnings prospects vs. those of larger caps.
Additionally, several blue-chip companies that had previously paced the market's
advance issued profit warnings in the latter part of the reporting period. This
combination prompted many investors to shift assets toward the small-cap area,
including small-cap value stocks.
The Portfolio's financial stocks, which constitute one of the Portfolio's
largest sector weightings, were particularly good performers, buoyed in part by
a favorable interest-rate environment and ongoing industry-wide consolidation.
(It should be stressed that the Portfolio's sector weightings are by-products of
a company-by-company stock selection process, and not bets on specific
industries.) We found a number of very attractively valued stocks in the
insurance area, as well as in the brokerage and banking areas.
At year-end we remain positive on the prospects for small-cap stocks generally,
as well as for the Portfolio's holdings in particular. The low-multiple, lesser
known stocks targeted by the Portfolio may offer unrecognized value that the
market will come to acknowledge - though the timing of such recognition is
difficult to predict. Typically, several quarters of improving fundamentals are
necessary to fully revive an underfollowed stock.
We believe that the heavy domestic bias of small-cap stocks as well as strong
earnings projections for the group may contribute to a positive market
reassessment of small companies. Given this backdrop, we remain focused on
identifying companies undergoing changes (such as restructurings or new
management) that stand to significantly improve longer-term profitability and
stock performance.
George Wyper and Kyle F. Frey, Portfolio Managers
================================================================================
INVESTMENT OBJECTIVE
Long-term capital appreciation.
INVESTMENT POLICY
Primarily in a portfolio of equity securities of small capitalization companies
(i.e., companies having market capitalizations of $1 billion or less at the time
of initial purchase) that the Adviser considers to be relatively undervalued.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1997
Net Assets ............................. $120.9 million
Number of Issues ................................... 53
LARGEST EQUITY HOLDINGS, AS OF DEC. 31, 1997
Allied Products Corp. ....................... Machinery
Commerce Group, Inc. ........................ Insurance
Avondale Industries, Inc. ..... Building & Construction
Fingerhut Cos. Inc. .................... Retail General
Terra Nova Bermuda Holdings Ltd. (Class A) .. Insurance
Delphi Financial Group (Class A) ............ Insurance
American Safety Razor Co. ........... Soap & Toiletries
Standex International Corp. ..... Professional Services
NAC Re Corp. ................................ Insurance
Texas Regional Bancshares, Inc. ................. Banks
ASSET MIX DISTRIBUTION, AS OF DEC. 31, 1997
Domestic Common Stock ........................... 86.3%
Foreign Common Stock ............................. 4.1%
Short-Term & Other ............................... 9.6%
TOTAL RETURN OF PORTFOLIO AGAINST BENCHMARKS
As of December 31, 1997
Since Inception
May 1, 1997
Warburg Pincus Small Company Value Portfolio .............. 19.15%
(2)Russell 2000 ........................................... 28.68%
(6)Lipper Small Cap Funds Average ......................... 30.28%
See the Notes on Performance preceding this section for a more detailed
description of benchmarks.
GROWTH OF $10,000 INVESTMENT AS OF DECEMBER 31, 1997
- -------------------------------------------------------------------------------
WARBURG PINCUS SMALL RUSSELL 2000
COMPANY VALUE
- -------------------------------------------------------------------------------
May 1, 1997 $10,000 $10,000
December 31, 1997 $11,915 $12,868
- -------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY EMERGING MARKETS EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
The Portfolio's country allocation was marked by an overweighting in Russia,
India, Pakistan and Turkey, combined with an underweighting in Asia during 1997.
We began easing into Asia in the third and fourth quarters as we felt that both
the currency and stock markets had dramatically overshot fair-value benchmarks.
Asian markets are down 70% - 85% from their highs and have discounted economic
devastation and corporate bankruptcies. While we believe that the near-term
economic and earnings outlook for the Asian countries is grim, we feel that the
worst has been discounted in the prices of stocks and the currencies. These
markets have been tremendously oversold, and in the face of such negative
sentiment, any marginally positive news could ignite a huge rally in the region.
We are slightly underweight in Latin America and expect to decrease our exposure
even further. The Brazilian Real is perhaps one of the more overvalued
currencies in the emerging market universe, and the high real interest rates
required to support it in the aftermath of the Asian crisis will prove
burdensome both for the corporate sector and for equity market performance.
Mexico has performed spectacularly in the past 12 months. As a result, though,
many of the Mexican stocks we own no longer offer compelling value, and will
likely be trimmed to gain exposure to other investments in Asia.
We continue to view India and South Africa as a source of funds for our
increased exposure in Asia. India is well underpinned by both valuations and
corporate fundamentals; however, we believe that political uncertainty and
slightly higher interest rates will cap some of the upside in the market.
In Europe, Russia has had a big correction after a stellar run. We continue to
remain sanguine about its long term prospects but have trimmed our position a
bit. Likewise, Turkey experienced tremendous returns over the last year, and
remains one of the last markets that have yet to conquer inflation. Positive
news on this front could trigger another move up. As valuations remain at
attractive levels, we are overweighted in in the Turkish market.
Madhav Dhar and Robert Meyer, Portfolio Managers
================================================================================
INVESTMENT OBJECTIVE
Long-term capital appreciation.
INVESTMENT POLICY
Primarily equity securities of emerging market country issuers with a focus on
those in which the Adviser believes the economies are developing strongly and in
which the markets are becoming more sophisticated.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1997
Net Assets ............................... $21.4 million
Number of Issues ................................... 171
LARGEST EQUITY HOLDINGS, AS OF DEC. 31, 1997
Telebras S.A. ...................... Utility - Telephone
LUKoil Holding (ADR)................ Oil - International
CRT ................................ Utility - Telephone
Femsa S.A., Class B........................... Beverages
ITC Ltd. (GDS).............................. Diversified
Telmex, Class L (ADR)............... Utility - Telephone
Surgutneftgaz (ADR)................. Oil - International
Yapi Ve Kredi Bankasi A.S. ....................... Banks
Pakistan Telecommunications Corp. .. Utility - Telephone
Korea Fund, Inc. .................... Investment Company
ASSET MIX DISTRIBUTION, AS OF DEC. 31, 1997
Foreign Common Stock ............................. 70.8%
Foreign Preferred Stock ........................... 7.2%
Investment Companies .............................. 4.3%
Other ............................................ 17.7%
TOTAL RETURN OF PORTFOLIO AGAINST BENCHMARKS
As of December 31, 1997
Since Inception
August 20, 1997
Morgan Stanley Emerging Markets Equity Portfolio .......... (20.16)%
(4)MSCI Emerging Markets Free ............................. (21.43)%
(6)Lipper Emerging Markets Funds Average................... (19.10)%
See the Notes on Performance preceding this section for a more detailed
description of benchmarks.
GROWTH OF $10,000 INVESTMENT AS OF DECEMBER 31, 1997
- -------------------------------------------------------------------------------
MORGAN STANLEY MSCI EMERGING MARKETS
EMERGING MARKETS FREE
EQUITY
- -------------------------------------------------------------------------------
May 1, 1997 $10,000 $10,000
August 20, 1997 $ 7,984 $ 7,857
- -------------------------------------------------------------------------------
<PAGE>
EQ ADVISORS TRUST
STATEMENTS OF ASSETS AND LIABILITIES
December 31, 1997
<TABLE>
<CAPTION>
MERRILL LYNCH MERRILL LYNCH MFS
BASIC VALUE WORLD EMERGING GROWTH MFS
EQUITY STRATEGY COMPANIES RESEARCH
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------------- --------------- --------------- --------------
<S> <C> <C> <C> <C>
ASSETS:
Investments at value (Note 1)............................. $49,833,139 $18,127,805 $104,264,513 $118,995,193
Cash...................................................... 986 -- 84,138 66,023
Foreign cash ............................................. -- 716 -- --
Receivable for securities sold ........................... 40,625 -- 367,806 1,321,584
Unrealized appreciation of forward currency contracts
(Note 1) ................................................ -- 7,245 -- 852
Short-term investments held as collateral for loaned
securities............................................... 7,480,149 1,280,808 24,156,300 21,263,500
Receivable from Separate Accounts for Trust shares sold . 638,707 213,584 1,069,452 1,031,161
Dividends, interest and other receivables ................ 45,033 114,731 16,017 115,540
Deferred organizational costs (Note 1) ................... 27,134 27,134 27,134 27,134
Other assets ............................................. 615 359 1,471 1,593
--------------- --------------- --------------- --------------
Total assets ............................................ 58,066,388 19,772,382 129,986,831 142,822,580
--------------- --------------- --------------- --------------
LIABILITIES:
Payable to custodian ..................................... 6,210 10,263 17,050 18,440
Payable for securities purchased ......................... 969,312 11,867 3,634,170 4,476,506
Unrealized depreciation of forward currency contracts
(Note 1) ................................................ -- 22,520 625 --
Payable for deposits received for loaned securities ..... 7,480,149 1,280,808 24,156,300 21,263,500
Market value of swap agreement ........................... -- -- -- --
Interest payable on swap agreement........................ -- -- -- --
Distribution fees payable ................................ 9,185 3,572 19,270 22,017
Investment management fees payable ....................... 10,229 16,057 24,271 26,478
Trustees' fees payable ................................... 4,159 2,443 9,919 10,743
Payable to Separate Accounts for Trust shares redeemed .. 23,585 170,151 152,573 82,969
Overdraft payable ........................................ -- 294 -- --
Accrued expenses (Note 1)................................. 68,515 43,957 155,410 167,463
--------------- --------------- --------------- --------------
Total liabilities ....................................... 8,571,344 1,561,932 28,169,588 26,068,116
--------------- --------------- --------------- --------------
NET ASSETS ............................................... $49,495,044 $18,210,450 $101,817,243 $116,754,464
=============== =============== =============== ==============
Investments at cost ...................................... $49,880,569 $18,197,653 $104,024,470 $117,419,440
=============== =============== =============== ==============
Foreign cash at cost ..................................... -- $ 715 -- --
=============== =============== =============== ==============
Investments at value include repurchase agreements of ... -- -- -- --
=============== =============== =============== ==============
COMPONENTS OF NET ASSETS (NOTE 1):
Paid in capital ......................................... $49,553,200 $18,718,868 $102,442,882 $116,061,846
Accumulated undistributed (overdistributed) net
investment income ...................................... 12,476 (6,214) (513) (19,539)
Accumulated undistributed (distributions in excess of)
net realized gain (loss) ............................... (23,202) (415,663) (865,006) (863,224)
Unrealized appreciation (depreciation) on investments
and foreign currency denominated assets and liabilities (47,430) (86,541) 239,880 1,575,381
--------------- --------------- --------------- --------------
NET ASSETS ............................................... $49,495,044 $18,210,450 $101,817,243 $116,754,464
=============== =============== =============== ==============
CLASS IB SHARES:
Net Assets. .............................................. $49,495,044 $18,210,450 $101,817,243 $116,754,464
=============== =============== =============== ==============
Shares outstanding (Unlimited amount authorized: no par
value) .................................................. 4,273,605 1,765,917 8,540,761 10,170,931
=============== =============== =============== ==============
Net asset value, offering and redemption price per share
(Note 1) ................................................ $ 11.58 $ 10.31 $ 11.92 $ 11.48
=============== =============== =============== ==============
</TABLE>
<PAGE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
EQ/PUTNAM
BALANCED
PORTFOLIO
-------------
<S> <C>
ASSETS:
Investments at value (Note 1)............................. $26,969,538
Cash...................................................... --
Foreign cash ............................................. --
Receivable for securities sold ........................... 723,655
Unrealized appreciation of forward currency contracts
(Note 1) ................................................ 27,214
Short-term investments held as collateral for loaned
securities............................................... 3,471,977
Receivable from Separate Accounts for Trust shares sold . 422,832
Dividends, interest and other receivables ................ 151,861
Deferred organizational costs (Note 1) ................... 27,134
Other assets ............................................. 463
-------------
Total assets ............................................ 31,794,674
-------------
LIABILITIES:
Payable to custodian ..................................... 13,425
Payable for securities purchased ......................... 1,994,056
Unrealized depreciation of forward currency contracts
(Note 1) ................................................ 28,810
Payable for deposits received for loaned securities ..... 3,471,977
Market value of swap agreement ........................... --
Interest payable on swap agreement........................ --
Distribution fees payable ................................ 4,965
Investment management fees payable ....................... 11,701
Trustees' fees payable ................................... 3,146
Payable to Separate Accounts for Trust shares redeemed .. 339,326
Overdraft payable ........................................ 19,634
Accrued expenses (Note 1)................................. 54,046
-------------
Total liabilities ....................................... 5,941,086
-------------
NET ASSETS ............................................... $25,853,588
=============
Investments at cost ...................................... $26,126,525
=============
Foreign cash at cost ..................................... --
=============
Investments at value include repurchase agreements of ... $ 1,625,000
=============
COMPONENTS OF NET ASSETS (NOTE 1):
Paid in capital ......................................... $24,919,195
Accumulated undistributed (overdistributed) net
investment income ...................................... (13,681)
Accumulated undistributed (distributions in excess of)
net realized gain (loss) ............................... 106,892
Unrealized appreciation (depreciation) on investments
and foreign currency denominated assets and liabilities 841,182
-------------
NET ASSETS ............................................... $25,853,588
=============
CLASS IB SHARES:
Net Assets. .............................................. $25,853,588
=============
Shares outstanding (Unlimited amount authorized: no par
value) .................................................. 2,305,399
=============
Net asset value, offering and redemption price per share
(Note 1) ................................................ $ 11.21
=============
</TABLE>
See Notes to Financial Statements.
1
<PAGE>
<TABLE>
<CAPTION>
EQ/PUTNAM EQ/PUTNAM EQ/PUTNAM T. ROWE PRICE WARBURG PINCUS MORGAN STANLEY
GROWTH & INCOME INTERNATIONAL INVESTORS T. ROWE PRICE INTERNATIONAL SMALL COMPANY EMERGING
VALUE EQUITY GROWTH EQUITY INCOME STOCK VALUE MARKETS EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- --------------- --------------- ------------- --------------- --------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
$153,247,139 $57,559,806 $41,651,182 $101,517,669 $66,240,263 $124,405,135 $17,630,504
20,508 10,934 630 957 9,406,601 549 3,604,325
-- 8 -- -- -- -- 112,658
3,367,461 372,162 61,590 21,479 2,046,979 3,509,281 40,893
-- 33,227 -- -- 4,811 -- --
27,564,407 1,827,012 6,427,550 25,234,710 81,200 12,318,628 84,000
1,279,540 195,842 243,351 1,351,241 570,250 1,367,782 806,471
272,974 83,148 33,521 210,145 130,115 51,920 180,657
27,134 27,134 27,134 27,134 27,134 27,134 29,040
1,911 897 593 1,445 1,436 1,875 268
- --------------- --------------- ------------- --------------- --------------- -------------- --------------
185,781,074 60,110,170 48,445,551 128,364,780 78,508,789 141,682,304 22,488,816
- --------------- --------------- ------------- --------------- --------------- -------------- --------------
32,678 37,039 5,957 14,042 47,002 10,187 13,325
7,647,905 331,125 2,223,737 2,539,086 528,893 8,000,611 514,629
-- 77,844 -- 1,277 8,471 -- --
27,564,407 1,827,012 6,427,550 25,234,710 81,200 12,318,628 84,000
-- -- -- -- -- -- 72,597
-- -- -- -- -- -- 759
28,277 11,216 7,422 18,801 14,846 23,145 3,927
32,351 43,088 16,157 24,857 63,074 32,335 24,061
12,875 6,061 4,017 9,739 9,695 12,677 1,796
3,137 -- -- 422,653 3,026,305 210,732 304,423
-- -- -- -- -- -- --
199,722 98,639 66,105 152,305 157,334 194,315 36,668
- --------------- --------------- ------------- --------------- --------------- -------------- --------------
35,521,352 2,432,024 8,750,945 28,417,470 3,936,820 20,802,630 1,056,185
- --------------- --------------- ------------- --------------- --------------- -------------- --------------
$150,259,722 $57,678,146 $39,694,606 $ 99,947,310 $74,571,969 $120,879,674 $21,432,631
=============== =============== ============= =============== =============== ============== ==============
$150,432,226 $57,736,353 $39,112,790 $ 96,071,224 $69,853,575 $123,965,652 $20,540,628
=============== =============== ============= =============== =============== ============== ==============
-- $ 8 -- -- -- -- $ 112,395
=============== =============== ============= =============== =============== ============== ==============
$ 10,945,000 $ 4,416,000 $ 2,489,000 -- -- $ 15,180,000 --
=============== =============== ============= =============== =============== ============== ==============
$147,858,014 $58,016,512 $37,386,446 $ 94,408,169 $78,434,505 $121,906,177 $24,763,837
(42) 62,965 412 2,001 (20,377) (28) 33,290
(413,163) (179,261) (230,644) 91,125 (225,339) (1,465,958) (380,622)
2,814,913 (222,070) 2,538,392 5,446,015 (3,616,820) 439,483 (2,983,874)
- --------------- --------------- ------------- --------------- --------------- -------------- --------------
$150,259,722 $57,678,146 $39,694,606 $ 99,947,310 $74,571,969 $120,879,674 $21,432,631
=============== =============== ============= =============== =============== ============== ==============
$150,259,722 $57,678,146 $39,694,606 $ 99,947,310 $74,571,969 $120,879,674 $21,432,631
=============== =============== ============= =============== =============== ============== ==============
13,045,713 5,296,019 3,220,078 8,272,803 7,571,312 10,204,787 2,693,810
=============== =============== ============= =============== =============== ============== ==============
$ 11.52 $ 10.89 $ 12.33 $ 12.08 $ 9.85 $ 11.85 $ 7.96
=============== =============== ============= =============== =============== ============== ==============
</TABLE>
2
<PAGE>
EQ ADVISORS TRUST
STATEMENTS OF ASSETS AND LIABILITIES
December 31, 1997
<TABLE>
<CAPTION>
BT
BT BT SMALL
EQUITY 500 INTERNATIONAL COMPANY JPM
INDEX EQUITY INDEX INDEX CORE BOND
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------------- ----------------- ------------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments at value (Note 1)................................. -- -- -- --
Cash.......................................................... $ 1,000 $ 1,000 $ 1,000 $ 1,000
Foreign cash ................................................. -- -- -- --
Receivable for securities sold ............................... -- -- -- --
Unrealized appreciation of forward currency contracts
(Note 1) .................................................... -- -- -- --
Short-term investments held as collateral for loaned
securities .................................................. -- -- -- --
Receivable from Separate Accounts for Trust shares sold ..... -- -- -- --
Dividends, interest and other receivables .................... -- -- -- --
Deferred organizational costs (Note 1) ....................... 31,340 31,340 31,340 31,340
Other assets ................................................. -- -- -- --
-------------- ----------------- ------------- -------------
Total assets ................................................ 32,340 32,340 32,340 32,340
-------------- ----------------- ------------- -------------
LIABILITIES:
Payable to custodian ......................................... -- -- -- --
Payable for securities purchased ............................. -- -- -- --
Unrealized depreciation of forward currency contracts
(Note 1) .................................................... -- -- -- --
Payable for deposits received for loaned securities ......... -- -- -- --
Market value of swap agreement ............................... -- -- -- --
Interest payable on swap agreement ........................... -- -- -- --
Distribution fees payable .................................... -- -- -- --
Investment management fees payable ........................... -- -- -- --
Trustees' fees payable ....................................... -- -- -- --
Payable to Separate Accounts for Trust shares redeemed ...... -- -- -- --
Overdraft payable ............................................ -- -- -- --
Accrued expenses (Note 1) .................................... 31,340 31,340 31,340 31,340
-------------- ----------------- ------------- -------------
Total liabilities ........................................... 31,340 31,340 31,340 31,340
-------------- ----------------- ------------- -------------
NET ASSETS ................................................... $ 1,000 $ 1,000 $ 1,000 $ 1,000
============== ================= ============= =============
Investments at cost .......................................... -- -- -- --
============== ================= ============= =============
Foreign cash at cost ......................................... -- -- -- --
============== ================= ============= =============
Investments at value include repurchase agreements of ....... -- -- -- --
============== ================= ============= =============
COMPONENTS OF NET ASSETS (NOTE 1):
Paid in capital ............................................. $ 1,000 $ 1,000 $ 1,000 $ 1,000
Accumulated undistributed (overdistributed) net investment
income ..................................................... -- -- -- --
Accumulated undistributed (distributions in excess of) net
realized gain (loss) ....................................... -- -- -- --
Unrealized appreciation (depreciation) on investments and
foreign currency denominated assets and liabilities ....... -- -- -- --
-------------- ----------------- ------------- -------------
NET ASSETS ................................................... $ 1,000 $ 1,000 $ 1,000 $ 1,000
============== ================= ============= =============
CLASS IB SHARES:
Net Assets. .................................................. $ 1,000 $ 1,000 $ 1,000 $ 1,000
============== ================= ============= =============
Shares outstanding (Unlimited amount authorized: no par
value) ...................................................... 100 100 100 100
============== ================= ============= =============
Net asset value, offering and redemption price per share
(Note 1) .................................................... $ 10.00 $ 10.00 $ 10.00 $ 10.00
============== ================= ============= =============
</TABLE>
<PAGE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
LAZARD LAZARD
LARGE CAP SMALL CAP
VALUE VALUE
PORTFOLIO PORTFOLIO
------------- -------------
<S> <C> <C>
ASSETS:
Investments at value (Note 1)................................. -- --
Cash.......................................................... $ 1,000 $ 1,000
Foreign cash ................................................. -- --
Receivable for securities sold ............................... -- --
Unrealized appreciation of forward currency contracts
(Note 1) .................................................... -- --
Short-term investments held as collateral for loaned
securities .................................................. -- --
Receivable from Separate Accounts for Trust shares sold ..... -- --
Dividends, interest and other receivables .................... -- --
Deferred organizational costs (Note 1) ....................... 31,340 31,340
Other assets ................................................. -- --
------------- -------------
Total assets ................................................ 32,340 32,340
------------- -------------
LIABILITIES:
Payable to custodian ......................................... -- --
Payable for securities purchased ............................. -- --
Unrealized depreciation of forward currency contracts
(Note 1) .................................................... -- --
Payable for deposits received for loaned securities ......... -- --
Market value of swap agreement ............................... -- --
Interest payable on swap agreement ........................... -- --
Distribution fees payable .................................... -- --
Investment management fees payable ........................... -- --
Trustees' fees payable ....................................... -- --
Payable to Separate Accounts for Trust shares redeemed ...... -- --
Overdraft payable ............................................ -- --
Accrued expenses (Note 1) .................................... 31,340 31,340
------------- -------------
Total liabilities ........................................... 31,340 31,340
------------- -------------
NET ASSETS ................................................... $ 1,000 $ 1,000
============= =============
Investments at cost .......................................... -- --
============= =============
Foreign cash at cost ......................................... -- --
============= =============
Investments at value include repurchase agreements of ....... -- --
============= =============
COMPONENTS OF NET ASSETS (NOTE 1):
Paid in capital ............................................. $ 1,000 $ 1,000
Accumulated undistributed (overdistributed) net investment
income ..................................................... -- --
Accumulated undistributed (distributions in excess of) net
realized gain (loss) ....................................... -- --
Unrealized appreciation (depreciation) on investments and
foreign currency denominated assets and liabilities ....... -- --
------------- -------------
NET ASSETS ................................................... $ 1,000 $ 1,000
============= =============
CLASS IB SHARES:
Net Assets. .................................................. $ 1,000 $ 1,000
============= =============
Shares outstanding (Unlimited amount authorized: no par
value) ...................................................... 100 100
============= =============
Net asset value, offering and redemption price per share
(Note 1) .................................................... $ 10.00 $ 10.00
============= =============
</TABLE>
See Notes to Financial Statements.
3
<PAGE>
This page intentionally left blank
4
<PAGE>
EQ ADVISORS TRUST
STATEMENTS OF OPERATIONS
For the period from May 1, 1997** to December 31, 1997
(Unless otherwise noted)
<TABLE>
<CAPTION>
MERRILL LYNCH MERRILL LYNCH MFS
BASIC VALUE WORLD EMERGING GROWTH MFS EQ/PUTNAM
EQUITY STRATEGY COMPANIES RESEARCH BALANCED
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------------- --------------- --------------- ------------ -----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Income* (Note 1):
Dividends................................ $ 158,359 $ 64,380 $ 298,852 $ 313,353 $ 130,923
Interest ................................ 209,813 153,151 150,316 191,421 246,934
Securities lending--Net ................. 861 635 2,903 3,161 1,593
--------------- --------------- --------------- ------------ -----------
Total income ........................... 369,033 218,166 452,071 507,935 379,450
--------------- --------------- --------------- ------------ -----------
Expenses (Notes 1, 2, 3, 4 and 5):
Investment management fee ............... 73,477 49,425 169,781 186,533 50,946
Administrative fees ..................... 27,203 28,431 38,940 39,701 27,837
Custody fees ............................ 16,537 27,330 45,119 47,392 32,420
Distribution fees--Class IB ............. 33,399 17,652 77,173 84,788 23,157
Printing and mailing expenses ........... 58,689 58,464 136,123 142,446 62,732
Professional fees ....................... 30,419 22,141 73,036 77,075 26,572
Interest expense on swap agreement ...... -- -- -- -- --
Trustees' fees .......................... 7,354 6,188 14,818 15,393 6,914
Amortization of deferred organizational
expense ................................ 4,207 4,207 4,207 4,207 4,207
Miscellaneous ........................... 1,706 1,452 4,340 4,977 1,707
--------------- --------------- --------------- ------------ -----------
Gross expenses ......................... 252,991 215,290 563,537 602,512 236,492
--------------- --------------- --------------- ------------ -----------
Waivers and reimbursements: (Note 6)
Waiver of administrative fees ........... (15,990) (14,798) (21,038) (21,668) (15,386)
Waiver of investment management fee .... (73,477) (49,425) (169,781) (186,533) (50,946)
Reimbursement from investment manager .. (49,983) (66,338) (110,330) (105,652) (86,793)
--------------- --------------- --------------- ------------ -----------
Total waivers and reimbursements ...... (139,450) (130,561) (301,149) (313,853) (153,125)
--------------- --------------- --------------- ------------ -----------
Net expenses ............................ 113,541 84,729 262,388 288,659 83,367
--------------- --------------- --------------- ------------ -----------
NET INVESTMENT INCOME ..................... 255,492 133,437 189,683 219,276 296,083
--------------- --------------- --------------- ------------ -----------
REALIZED AND UNREALIZED GAIN
(LOSS)(NOTE 1):
Realized Gain (Loss):
On securities ........................... 214,675 (228,480) 1,475,542 107,634 300,448
On options written ...................... (4,965) -- -- -- 360
On foreign currency transactions ....... -- (66,116) (2,900) (2,639) (19,108)
--------------- --------------- --------------- ------------ -----------
Realized gain (loss)--net ................ 209,710 (294,596) 1,472,642 104,995 281,700
--------------- --------------- --------------- ------------ -----------
Change in Unrealized Appreciation
(Depreciation):
On securities ........................... (47,430) (69,848) 240,043 1,575,753 843,013
On swap agreement ....................... -- -- -- -- --
On foreign currency transactions ....... -- (16,693) (163) (372) (1,831)
--------------- --------------- --------------- ------------ -----------
Unrealized appreciation
(depreciation)--net ..................... (47,430) (86,541) 239,880 1,575,381 841,182
--------------- --------------- --------------- ------------ -----------
REALIZED AND UNREALIZED GAIN (LOSS)--NET .. 162,280 (381,137) 1,712,522 1,680,376 1,122,882
--------------- --------------- --------------- ------------ -----------
NET INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS................................ $ 417,772 $(247,700) $1,902,205 $1,899,652 $1,418,965
=============== =============== =============== ============ ===========
</TABLE>
- ------------
* Net of foreign taxes withheld on dividends of $5,247, $77, $1,474, $86,
$29,283, $2,919, $42,243 and $6,501 for the Merrill Lynch World
Strategy, MFS Emerging Growth Companies, MFS Research, EQ/Putnam
Balanced, EQ/Putnam International Equity, T. Rowe Price Equity Income,
T. Rowe Price International Stock and Morgan Stanley Emerging Markets
Equity Portfolios, respectively and on interest of $88 and $492 for the
Merrill Lynch World Strategy, and EQ/Putnam Balanced Portfolios,
respectively.
** Commencement of Operations
See Notes to Financial Statements.
5
<PAGE>
<TABLE>
<CAPTION>
(FOR THE PERIOD
FROM
AUGUST 20** TO
DECEMBER 31, 1997)
EQ/PUTNAM EQ/PUTNAM EQ/PUTNAM T. ROWE PRICE WARBURG PINCUS MORGAN STANLEY
GROWTH & INTERNATIONAL INVESTORS T. ROWE PRICE INTERNATIONAL SMALL COMPANY EMERGING
INCOME VALUE EQUITY GROWTH EQUITY INCOME STOCK VALUE MARKETS EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- -------------- --------------- ------------ --------------- --------------- -------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
$ 806,120 $ 192,295 $ 117,657 $ 810,390 $ 288,519 $ 260,345 $ 169,731
235,099 167,495 57,743 200,609 181,629 222,466 45,191
2,377 307 824 2,160 27 4,460 --
- -------------- --------------- ------------ --------------- --------------- -------------- -------------------
1,043,596 360,097 176,224 1,013,159 470,175 487,271 214,922
- -------------- --------------- ------------ --------------- --------------- -------------- -------------------
227,936 130,202 67,578 166,401 213,839 252,178 66,404
43,159 34,562 27,342 38,372 52,060 40,618 16,082
87,022 98,635 15,863 37,394 125,169 24,577 22,470
103,607 46,501 30,717 75,637 71,279 96,992 14,436
149,313 95,243 73,440 120,126 164,108 134,255 15,063
88,760 46,772 32,906 68,035 76,948 83,740 11,094
-- -- -- -- -- -- 759
17,178 10,363 8,017 13,703 15,855 16,081 1,796
4,207 4,207 4,207 4,207 4,207 4,207 2,301
5,122 3,036 2,042 4,384 5,174 5,208 960
- -------------- --------------- ------------ --------------- --------------- -------------- -------------------
726,304 469,521 262,112 528,259 728,639 657,856 151,365
- -------------- --------------- ------------ --------------- --------------- -------------- -------------------
(23,255) (17,841) (16,095) (20,996) (21,461) (23,405) (6,430)
(227,936) (130,202) (67,578) (166,401) (213,839) (246,485) (42,908)
(122,925) (98,225) (74,000) (83,697) (151,257) -- --
- -------------- --------------- ------------ --------------- --------------- -------------- -------------------
(374,116) (246,268) (157,673) (271,094) (386,557) (269,890) (49,338)
- -------------- --------------- ------------ --------------- --------------- -------------- -------------------
352,188 223,253 104,439 257,165 342,082 387,966 102,027
- -------------- --------------- ------------ --------------- --------------- -------------- -------------------
691,408 136,844 71,785 755,994 128,093 99,305 112,895
- -------------- --------------- ------------ --------------- --------------- -------------- -------------------
157,080 70,340 115,368 365,817 (221,255) (937,026) (409,056)
-- -- -- -- -- -- --
(8) 21,402 -- (15,287) (146,976) -- 5,754
- -------------- --------------- ------------ --------------- --------------- -------------- -------------------
157,072 91,742 115,368 350,530 (368,231) (937,026) (403,302)
- -------------- --------------- ------------ --------------- --------------- -------------- -------------------
2,814,913 (176,547) 2,538,392 5,446,445 (3,613,312) 439,483 (2,910,124)
-- -- -- -- -- -- (72,597)
-- (45,523) -- (430) (3,508) -- (1,153)
- -------------- --------------- ------------ --------------- --------------- -------------- -------------------
2,814,913 (222,070) 2,538,392 5,446,015 (3,616,820) 439,483 (2,983,874)
- -------------- --------------- ------------ --------------- --------------- -------------- -------------------
2,971,985 (130,328) 2,653,760 5,796,545 (3,985,051) (497,543) (3,387,176)
- -------------- --------------- ------------ --------------- --------------- -------------- -------------------
$3,663,393 $ 6,516 $2,725,545 $6,552,539 $(3,856,958) $(398,238) $(3,274,281)
============== =============== ============ =============== =============== ============== ===================
</TABLE>
6
<PAGE>
EQ ADVISORS TRUST
STATEMENTS OF CHANGES IN NET ASSETS
For the period from May 1, 1997** to December 31, 1997
(Unless otherwise noted)
<TABLE>
<CAPTION>
MERRILL LYNCH MERRILL LYNCH MFS
BASIC VALUE WORLD EMERGING GROWTH MFS
EQUITY STRATEGY COMPANIES RESEARCH
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------------- --------------- --------------- --------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income ............................... $ 255,492 $ 133,437 $ 189,683 $ 219,276
Realized gain (loss)--net ........................... 209,710 (294,596) 1,472,642 104,995
Change in unrealized appreciation (depreciation) of
investments and foreign currency denominated assets
and liabilities .................................... (47,430) (86,541) 239,880 1,575,381
--------------- --------------- --------------- --------------
Net increase (decrease) in net assets from
operations ......................................... 417,772 (247,700) 1,902,205 1,899,652
--------------- --------------- --------------- --------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Class IB:
Dividends from net investment income ............... (247,223) (75,981) (191,439) (225,007)
Dividends in excess of net investment income ....... -- (6,214) (513) (19,539)
Distributions from realized gains................... (209,710) -- (1,475,542) (107,634)
Distributions in excess of realized gains .......... (23,202) (187,184) (865,006) (863,224)
--------------- --------------- --------------- --------------
Total Class IB dividends and distributions .......... (480,135) (269,379) (2,532,500) (1,215,404)
--------------- --------------- --------------- --------------
Decrease in net assets from dividends and
distributions ...................................... (480,135) (269,379) (2,532,500) (1,215,404)
--------------- --------------- --------------- --------------
CAPITAL SHARE TRANSACTIONS (NOTE 1):
Class IB:
Shares sold ........................................ 53,828,437 24,010,398 146,747,168 120,065,201
Shares issued in reinvestment of dividends and
distributions ..................................... 480,135 269,379 2,532,500 1,215,404
Shares redeemed .................................... (4,751,165) (5,552,248) (46,832,130) (5,210,389)
--------------- --------------- --------------- --------------
Net increase in net assets derived from share
transactions........................................ 49,557,407 18,727,529 102,447,538 116,070,216
--------------- --------------- --------------- --------------
INCREASE IN NET ASSETS ............................... 49,495,044 18,210,450 101,817,243 116,754,464
NET ASSETS, BEGINNING OF PERIOD ...................... -- -- -- --
--------------- --------------- --------------- --------------
NET ASSETS, END OF PERIOD* ........................... $49,495,044 $18,210,450 $101,817,243 $116,754,464
=============== =============== =============== ==============
SHARE TRANSACTIONS:
Class IB:
Shares sold ........................................ 4,633,508 2,241,153 12,281,631 10,512,264
Shares issued in reinvestment of dividends and
distributions ..................................... 42,265 26,332 219,454 108,421
Shares redeemed .................................... (402,168) (501,568) (3,960,324) (449,754)
--------------- --------------- --------------- --------------
Net increase ........................................ 4,273,605 1,765,917 8,540,761 10,170,931
--------------- --------------- --------------- --------------
</TABLE>
- ------------
* Including accumulated undistributed (overdistributed) net investment
income of $12,476, $(6,214), $(513), $(19,539), $(13,681), $(42),
$62,965, $412, $2,001, $(20,377), $(28) and $33,290 for the Merrill
Lynch Basic Value Equity, Merrill Lynch World Strategy, MFS Emerging
Growth Companies, MFS Research, EQ/Putnam Balanced, EQ/Putnam Growth &
Income Value, EQ/Putnam International Equity, EQ/Putnam Investors
Growth, T. Rowe Price Equity Income, T. Rowe Price International Stock,
Warburg Pincus Small Company Value and Morgan Stanley Emerging Markets
Equity Portfolios, respectively as of December 31, 1997.
** Commencement of Operations
<PAGE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
EQ/PUTNAM
BALANCED
PORTFOLIO
-------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income ............................... $ 296,083
Realized gain (loss)--net ........................... 281,700
Change in unrealized appreciation (depreciation) of
investments and foreign currency denominated assets
and liabilities .................................... 841,182
-------------
Net increase (decrease) in net assets from
operations ......................................... 1,418,965
-------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Class IB:
Dividends from net investment income ............... (279,057)
Dividends in excess of net investment income ....... (13,681)
Distributions from realized gains................... (196,041)
Distributions in excess of realized gains .......... --
-------------
Total Class IB dividends and distributions .......... (488,779)
-------------
Decrease in net assets from dividends and
distributions ...................................... (488,779)
-------------
CAPITAL SHARE TRANSACTIONS (NOTE 1):
Class IB:
Shares sold ........................................ 32,089,702
Shares issued in reinvestment of dividends and
distributions ..................................... 488,779
Shares redeemed .................................... (7,655,079)
-------------
Net increase in net assets derived from share
transactions........................................ 24,923,402
-------------
INCREASE IN NET ASSETS ............................... 25,853,588
NET ASSETS, BEGINNING OF PERIOD ...................... --
-------------
NET ASSETS, END OF PERIOD* ........................... $25,853,588
=============
SHARE TRANSACTIONS:
Class IB:
Shares sold ........................................ 2,939,085
Shares issued in reinvestment of dividends and
distributions ..................................... 43,995
Shares redeemed .................................... (677,681)
-------------
Net increase ........................................ 2,305,399
-------------
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
<TABLE>
<CAPTION>
(FOR THE PERIOD
FROM
AUGUST 20** TO
DECEMBER 31, 1997)
EQ/PUTNAM EQ/PUTNAM EQ/PUTNAM T. ROWE PRICE WARBURG PINCUS MORGAN STANLEY
GROWTH & INCOME INTERNATIONAL INVESTORS T. ROWE PRICE INTERNATIONAL SMALL COMPANY EMERGING
VALUE EQUITY GROWTH EQUITY INCOME STOCK VALUE MARKETS EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- --------------- --------------- ------------- --------------- --------------- -------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
$ 691,408 $ 136,844 $ 71,785 $ 755,994 $ 128,093 $ 99,305 $ 112,895
157,072 91,742 115,368 350,530 (368,231) (937,026) (403,302)
2,814,913 (222,070) 2,538,392 5,446,015 (3,616,820) 439,483 (2,983,874)
- --------------- --------------- ------------- --------------- --------------- -------------- -------------------
3,663,393 6,516 2,725,545 6,552,539 (3,856,958) (398,238) (3,274,281)
- --------------- --------------- ------------- --------------- --------------- -------------- -------------------
(695,650) (99,488) (75,580) (742,913) -- (103,540) (59,226)
(1,258) -- -- -- (9,785) (204) --
(157,079) (70,340) (115,368) (274,692) -- -- --
(413,163) (179,261) (230,644) -- -- (528,932) --
- --------------- --------------- ------------- --------------- --------------- -------------- -------------------
(1,267,150) (349,089) (421,592) (1,017,605) (9,785) (632,676) (59,226)
- --------------- --------------- ------------- --------------- --------------- -------------- -------------------
(1,267,150) (349,089) (421,592) (1,017,605) (9,785) (632,676) (59,226)
- --------------- --------------- ------------- --------------- --------------- -------------- -------------------
150,166,887 58,043,736 37,267,750 104,824,753 100,986,940 170,997,522 35,354,533
1,267,150 349,089 421,592 1,017,605 9,785 632,676 59,226
(3,570,558) (372,106) (298,689) (11,529,982) (22,558,013) (49,719,610) (10,647,621)
- --------------- --------------- ------------- --------------- --------------- -------------- -------------------
147,863,479 58,020,719 37,390,653 94,312,376 78,438,712 121,910,588 24,766,138
- --------------- --------------- ------------- --------------- --------------- -------------- -------------------
150,259,722 57,678,146 39,694,606 99,847,310 74,571,969 120,879,674 21,432,631
-- -- -- 100,000 -- -- --
- --------------- --------------- ------------- --------------- --------------- -------------- -------------------
$150,259,722 $57,678,146 $39,694,606 $ 99,947,310 $ 74,571,969 $120,879,674 $ 21,432,631
=============== =============== ============= =============== =============== ============== ===================
13,247,726 5,297,238 3,210,087 9,163,385 9,802,776 14,177,457 3,928,086
111,940 32,263 35,192 85,226 997 54,682 7,554
(313,953) (33,482) (25,201) (985,808) (2,232,461) (4,027,352) (1,241,830)
- --------------- --------------- ------------- --------------- --------------- -------------- -------------------
13,045,713 5,296,019 3,220,078 8,262,803 7,571,312 10,204,787 2,693,810
- --------------- --------------- ------------- --------------- --------------- -------------- -------------------
</TABLE>
8
<PAGE>
EQ ADVISORS TRUST
STATEMENTS OF CHANGES IN NET ASSETS
For December 31, 1997**
<TABLE>
<CAPTION>
BT
BT BT SMALL
EQUITY 500 INTERNATIONAL COMPANY JPM
INDEX EQUITY INDEX INDEX CORE BOND
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------------- ----------------- ------------- -------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income ................................... -- -- -- --
Realized gain (loss)--net ............................... -- -- -- --
Change in unrealized appreciation (depreciation) of
investments and foreign currency denominated assets and
liabilities ............................................ -- -- -- --
-------------- ----------------- ------------- -------------
Net increase (decrease) in net assets from operations .. -- -- -- --
-------------- ----------------- ------------- -------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Class IB:
Dividends from net investment income ................... -- -- -- --
Dividends in excess of net investment income ........... -- -- -- --
Distributions from realized gains....................... -- -- -- --
Distributions in excess of realized gains............... -- -- -- --
-------------- ----------------- ------------- -------------
Total Class IB dividends and distributions............... -- -- -- --
-------------- ----------------- ------------- -------------
Decrease in net assets from dividends and distributions -- -- -- --
-------------- ----------------- ------------- -------------
CAPITAL SHARE TRANSACTIONS (NOTE 1):
Class IB:
Shares sold ............................................ $1,000 $1,000 $1,000 $1,000
Shares issued in reinvestment of dividends and
distributions ......................................... -- -- -- --
Shares redeemed ........................................ -- -- -- --
-------------- ----------------- ------------- -------------
Net increase in net assets derived from share
transactions............................................ 1,000 1,000 1,000 1,000
-------------- ----------------- ------------- -------------
INCREASE IN NET ASSETS ................................... 1,000 1,000 1,000 1,000
NET ASSETS, BEGINNING OF PERIOD .......................... -- -- -- --
-------------- ----------------- ------------- -------------
NET ASSETS, END OF PERIOD ................................ $1,000 $1,000 $1,000 $1,000
============== ================= ============= =============
SHARE TRANSACTIONS:
Class IB:
Shares sold ............................................ 100 100 100 100
Shares issued in reinvestment of dividends and
distributions ......................................... -- -- -- --
Shares redeemed ........................................ -- -- -- --
-------------- ----------------- ------------- -------------
Net increase ............................................ 100 100 100 100
-------------- ----------------- ------------- -------------
</TABLE>
** The Portfolios that received initial capital on December 31, 1997 had
no operations except for the issuance of shares of Class IB Common
Stock.
<PAGE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
LAZARD LAZARD
LARGE CAP SMALL CAP
VALUE VALUE
PORTFOLIO PORTFOLIO
------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income ................................... -- --
Realized gain (loss)--net ............................... -- --
Change in unrealized appreciation (depreciation) of
investments and foreign currency denominated assets and
liabilities ............................................ -- --
------------- -------------
Net increase (decrease) in net assets from operations .. -- --
------------- -------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Class IB:
Dividends from net investment income ................... -- --
Dividends in excess of net investment income ........... -- --
Distributions from realized gains....................... -- --
Distributions in excess of realized gains............... -- --
------------- -------------
Total class IB dividends and distributions............... -- --
------------- -------------
Decrease in net assets from dividends and distributions -- --
------------- -------------
CAPITAL SHARE TRANSACTIONS (NOTE 1):
Class IB:
Shares sold ............................................ $1,000 $1,000
Shares issued in reinvestment of dividends and
distributions ......................................... -- --
Shares redeemed ........................................ -- --
------------- -------------
Net increase in net assets derived from share
transactions............................................ 1,000 1,000
------------- -------------
INCREASE IN NET ASSETS ................................... 1,000 1,000
NET ASSETS, BEGINNING OF PERIOD .......................... -- --
------------- -------------
NET ASSETS, END OF PERIOD ................................ $1,000 $1,000
============= =============
SHARE TRANSACTIONS:
Class IB:
Shares sold ............................................ 100 100
Shares issued in reinvestment of dividends and
distributions ......................................... -- --
Shares redeemed ........................................ -- --
------------- -------------
Net increase ............................................ 100 100
------------- -------------
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
EQ ADVISORS TRUST
MERRILL LYNCH BASIC VALUE EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------- ----------- -----------
<S> <C> <C>
COMMON STOCKS:
BASIC MATERIALS (12.9%)
CHEMICALS (5.1%)
E.I. Du Pont de Nemours & Co. ... 8,000 $ 480,500
Great Lakes Chemical Corp. ..... 25,000 1,121,875
Hercules, Inc. .................. 18,000 901,125
-----------
2,503,500
-----------
METALS & MINING (1.1%)
Asarco, Inc. .................... 25,000 560,937
-----------
PAPER (3.2%)
International Paper Co. ......... 20,000 862,500
Stone Container Corp.* .......... 70,000 730,625
-----------
1,593,125
-----------
STEEL (3.5%)
USX--U.S. Steel Group, Inc. .... 28,000 875,000
WHX Corp.* ...................... 70,000 831,250
-----------
1,706,250
-----------
TOTAL BASIC MATERIALS .......... 6,363,812
-----------
BUSINESS SERVICES (3.9%)
PRINTING, PUBLISHING,
BROADCASTING (3.9%)
Dow Jones & Co., Inc. ........... 17,000 912,688
Viacom, Inc., Class B* .......... 25,000 1,035,937
-----------
TOTAL BUSINESS SERVICES......... 1,948,625
-----------
CAPITAL GOODS (3.4%)
AEROSPACE (2.1%)
Lockheed Martin Corp. ........... 10,500 1,034,250
-----------
BUILDING MATERIALS & FOREST
PRODUCTS (1.3%)
Louisiana-Pacific Corp. ......... 35,000 665,000
-----------
TOTAL CAPITAL GOODS............. 1,699,250
-----------
CONSUMER CYCLICALS (11.5%)
AUTOS & TRUCKS (3.2%)
Ford Motor Co. .................. 13,500 657,281
General Motors Corp. ............ 15,000 909,375
-----------
1,566,656
-----------
LEISURE RELATED (1.1%)
Harrah's Entertainment, Inc.* .. 29,400 554,925
-----------
PHOTO & OPTICAL (2.9%)
Eastman Kodak Co. ............... 23,700 1,441,257
-----------
RETAIL--GENERAL (4.3%)
Charming Shoppes, Inc.* ......... 90,000 421,875
K-Mart Corp.* ................... 60,000 693,750
Sears Roebuck & Co. ............. 12,000 543,000
Woolworth Corp.* ................ 23,000 468,625
-----------
2,127,250
-----------
TOTAL CONSUMER CYCLICALS ...... 5,690,088
-----------
CONSUMER NON-CYCLICALS (9.5%)
BEVERAGES (2.4%)
Seagram Co., Ltd. ............... 36,000 1,163,250
-----------
CONTAINERS (1.1%)
Tupperware Corp. ................ 20,000 557,500
-----------
DRUGS (4.2%)
Bristol-Myers Squibb Co. ........ 5,000 473,125
Pharmaceutical Product
Development, Inc.* ............. 40,000 615,000
Pharmacia & Upjohn, Inc. ........ 27,500 1,007,187
-----------
2,095,312
-----------
<PAGE>
<CAPTION>
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------- ----------- -----------
<S> <C> <C>
TOBACCO (1.8%)
Philip Morris Cos., Inc. ........ 19,500 $ 883,594
-----------
TOTAL CONSUMER NON-CYCLICALS 4,699,656
-----------
CREDIT SENSITIVE (15.1%)
BANKS (5.3%)
Bankers Trust New York Corp. ... 6,000 674,625
Hibernia Corp., Class A ......... 45,000 846,562
Wells Fargo & Co. ............... 3,250 1,103,172
-----------
2,624,359
-----------
INSURANCE (7.9%)
Aetna, Inc. ..................... 18,500 1,305,406
Humana, Inc.* ................... 48,900 1,014,675
TIG Holdings, Inc. .............. 28,000 929,250
Travelers Property & Casualty,
Inc., Class A .................. 15,000 660,000
-----------
3,909,331
-----------
UTILITY--TELEPHONE (1.9%)
AT&T Corp. ...................... 15,000 918,750
-----------
TOTAL CREDIT SENSITIVE ......... 7,452,440
-----------
DIVERSIFIED (1.8%)
MISCELLANEOUS (1.8%)
ITT Industries, Inc. ............ 28,000 878,500
-----------
ENERGY (6.7%)
OIL--DOMESTIC (4.5%)
Occidental Petroleum Corp. ..... 20,000 586,250
Union Texas Petroleum Holdings,
Inc. ........................... 40,000 832,500
Unocal Corp. .................... 20,000 776,250
-----------
2,195,000
-----------
OIL--INTERNATIONAL (1.4%)
YPF S.A., Class D (ADR) ......... 20,000 683,750
-----------
OIL--SUPPLIES & CONSTRUCTION (0.8%)
Dresser Industries, Inc. ........ 10,000 419,375
-----------
TOTAL ENERGY.................... 3,298,125
-----------
TECHNOLOGY (13.5%)
ELECTRONICS (6.0%)
Exabyte Corp.* .................. 50,800 327,025
Integrated Device Technology,
Inc.*........................... 50,000 471,875
Mentor Graphics Corp.* .......... 65,000 629,688
Novell, Inc.* ................... 70,000 525,000
Seagate Technology, Inc.* ...... 20,000 385,000
Texas Instruments, Inc. ......... 13,500 607,500
-----------
2,946,088
-----------
OFFICE EQUIPMENT (4.4%)
Apple Computer, Inc.* ........... 25,000 328,125
Digital Equipment Corp.* ........ 20,000 740,000
International Business Machines
Corp. .......................... 5,000 522,813
Scitex Corp., Ltd.* ............. 50,000 603,125
-----------
2,194,063
-----------
OFFICE EQUIPMENT SERVICES (1.1%)
CompuServe Corp.* ............... 45,000 545,625
-----------
TELECOMMUNICATIONS (2.0%)
U.S. West Media Group* .......... 35,000 1,010,625
-----------
TOTAL TECHNOLOGY ............... 6,696,401
-----------
TOTAL COMMON STOCKS (78.3%)
(Cost $38,774,327) ............. 38,726,897
-----------
</TABLE>
10
<PAGE>
EQ ADVISORS TRUST
MERRILL LYNCH BASIC VALUE EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- ----------------------------- ------------- -------------
<S> <C> <C>
SHORT-TERM DEBT SECURITIES:
U.S. GOVERNMENT AGENCIES (22.4%)
Federal Farm Credit Bank
(Discount Note), 1/2/98
(Amortized Cost $11,106,242) $11,108,000 $11,106,242
-------------
TOTAL INVESTMENTS (100.7%)
(Cost/Amortized Cost
$49,880,569) ................ 49,833,139
OTHER ASSETS
LESS LIABILITIES (-0.7%) (338,095)
-------------
NET ASSETS (100%) ............ $49,495,044
=============
</TABLE>
- ------------
* Non-income producing
Glossary:
ADR--American Depositary Receipt
11
<PAGE>
EQ ADVISORS TRUST
MERRILL LYNCH BASIC VALUE EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
- -----------------------------------------------------------------------------
Transactions in options written for the period from May 1, 1997, to December
31, 1997 are summarized as follows: (Note 1)
<TABLE>
<CAPTION>
NUMBER OF PREMIUMS
CONTRACTS (A) RECEIVED
------------- ----------
<S> <C> <C>
Options outstanding--May 1, 1997 ..... -- --
Options written ....................... 15 $ 8,392
Options closed ........................ (15) (8,392)
------------- ----------
Options outstanding--December 31, 1997 -- --
============= ==========
</TABLE>
Investment security transactions for the period from May 1, 1997 to December
31, 1997 were as follows:
<TABLE>
<CAPTION>
<S> <C>
COST OF PURCHASES:
Stocks and long-term corporate debt securities $42,382,714
NET PROCEEDS OF SALES AND REDEMPTIONS:
Stocks and long-term corporate debt securities 3,823,065
</TABLE>
As of December 31, 1997, the gross unrealized appreciation (depreciation) of
investments based on the aggregate cost of investments for Federal income tax
purposes was as follows:
<TABLE>
<CAPTION>
<S> <C>
Aggregate gross unrealized appreciation .. $ 2,084,262
Aggregate gross unrealized (depreciation) (2,132,841)
-------------
Net unrealized (depreciation) ............. $ (48,579)
=============
Federal income tax cost of investments ... $49,881,718
=============
</TABLE>
At December 31, 1997 the Portfolio had loaned securities with a total value
of $7,341,116, which was secured by collateral valued at $7,480,149.
For the period from May 1, 1997 to December 31, 1997 the Portfolio incurred
approximately $1,444 as brokerage commissions with Donaldson, Lufkin &
Jenrette Securities Corp. and $7,984 with Merrill Lynch & Co., Inc., both
affiliated broker/dealers.
- ------------
(a) One contract relates to 100 shares.
See Notes to Financial Statements.
12
<PAGE>
EQ ADVISORS TRUST
MERRILL LYNCH WORLD STRATEGY PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------- ------------- --------------
<S> <C> <C>
COMMON STOCKS:
AUSTRALIA & NEW ZEALAND (0.6%)
AUSTRALIA (0.6%)
Broken Hill Proprietary Ltd. ... 12,700 $ 117,896
--------------
CANADA (1.7%)
Gulf Canada Resources Ltd.* .... 17,000 119,000
Imax Corp.* ..................... 3,400 74,800
Magna International, Inc.,
Class A ........................ 1,900 119,344
--------------
TOTAL CANADA ................... 313,144
--------------
JAPAN (4.1%)
Amway Japan Ltd. ................ 5,000 95,804
Bridgestone Corp. ............... 4,000 86,760
Maeda Corp. ..................... 34,000 75,570
Matsushita Electric Industries
Co. ............................ 4,000 58,555
Matsushita Electric Works Ltd. . 12,000 103,928
Okumura Corp. ................... 25,000 59,399
Rohm Co. ........................ 1,000 101,935
Sony Corp. ...................... 1,000 88,906
Tokio Marine & Fire Insurance
Co. ............................ 6,000 68,059
--------------
TOTAL JAPAN .................... 738,916
--------------
LATIN AMERICA (3.1%)
ARGENTINA (0.4%)
YPF S.A., Class D (ADR) ......... 2,300 78,631
--------------
BRAZIL (0.9%)
Telebras S.A. (ADR) ............. 700 81,506
Unibanco (ADR)* ................. 2,500 80,469
--------------
161,975
--------------
MEXICO (1.8%)
Grupo Carso (ADR) ............... 6,400 85,261
Grupo Financiero Bancomer (ADR)* 7,300 94,896
Panamerican Beverages, Inc.,
Class A ........................ 2,200 71,775
Telmex, Class L (ADR) ........... 1,200 67,275
--------------
319,207
--------------
TOTAL LATIN AMERICA ............ 559,813
--------------
OTHER EUROPEAN COUNTRIES (7.3%)
FRANCE (1.5%)
Scor ............................ 2,600 124,330
SGS-Thomson Microelectronics
N.V.* .......................... 1,400 85,488
Thomson CSF ..................... 1,600 50,431
--------------
260,249
--------------
GERMANY (1.2%)
Bayerische Vereinsbank AG ...... 1,800 116,068
Mannesmann AG ................... 200 100,392
--------------
216,460
--------------
ITALY (2.3%)
Arnoldo Mondadori Editore ...... 19,100 150,079
Danieli & Co. ................... 35,100 126,193
Gucci Group N.V. ................ 3,300 138,188
--------------
414,460
--------------
<PAGE>
<CAPTION>
NUMBERS VALUE
OF SHARES (NOTE 1)
- --------------------------------- ------------ --------------
<S> <C> <C>
NETHERLANDS (0.4%)
Royal Dutch Petroleum Co. (NY
Shares) ........................ 1,400 $ 75,863
--------------
SPAIN (0.6%)
Repsol S.A. (ADR) ............... 2,800 119,175
--------------
SWITZERLAND (1.3%)
Novartis AG (Registered) ........ 78 126,573
Roche Holdings AG ............... 12 119,178
--------------
245,751
--------------
TOTAL OTHER EUROPEAN COUNTRIES 1,331,958
--------------
SCANDINAVIA (4.8%)
FINLAND (2.2%)
Amer-Yhtymae OYJ, Class A* ..... 4,500 86,269
Finnlines OYJ ................... 2,000 79,619
Orion-Yhtymae OYJ, Class B ..... 4,620 122,048
Upm-Kymmene OYJ ................. 5,600 111,981
--------------
399,917
--------------
NORWAY (0.6%)
Color Line ASA .................. 27,300 105,344
--------------
SWEDEN (2.0%)
Castellum AB* ................... 9,200 91,538
Nordbanken Holding AB* .......... 8,400 47,502
Perstorp AB, Class B ............ 5,200 92,999
Forenings Sparbanken Kredit AS,
Class A. ....................... 3,000 68,200
Spectra-Physics AB, Class A .... 3,600 68,237
--------------
368,476
--------------
TOTAL SCANDINAVIA .............. 873,737
--------------
SOUTHEAST ASIA (0.8%)
INDONESIA (0.6%)
Indostat (ADR) .................. 5,300 102,356
--------------
PHILIPPINES (0.2%)
San Miguel Corp., Class B ...... 32,100 39,233
--------------
TOTAL SOUTHEAST ASIA ........... 141,589
--------------
SUB-SAHARAN AFRICA (1.2%)
SOUTH AFRICA (1.2%)
De Beers Consolidated Mines
(ADR) .......................... 5,500 112,406
Sasol Ltd. ...................... 10,700 111,914
--------------
TOTAL SUB-SAHARAN AFRICA ...... 224,320
--------------
UNITED KINGDOM (3.4%)
Danka Business Systems plc (ADR) 1,030 16,416
Dixons Group plc ................ 12,600 126,512
Guinness plc .................... 10,500 96,540
Imperial Chemical Industries
plc............................. 7,800 121,897
LucasVarity plc ................. 37,500 132,491
Rio Tinto plc (Registered) ..... 10,200 125,545
--------------
TOTAL UNITED KINGDOM ........... 619,401
--------------
UNITED STATES (30.4%)
Allied Signal, Inc. ............. 3,195 124,405
American Express Co. ............ 660 58,905
Avis Rent A Car, Inc.* .......... 2,050 65,472
Bank of New York Co., Inc. ..... 2,650 153,203
BankAmerica Corp. ............... 1,500 109,500
13
<PAGE>
EQ ADVISORS TRUST
MERRILL LYNCH WORLD STRATEGY PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------- ------------- --------------
Black & Decker Corp. ............ 2,820 $ 110,156
BMC Software, Inc.* ............. 1,230 80,719
Bristol-Myers Squibb Co. ........ 1,100 104,088
Brunswick Corp. ................. 4,400 133,375
Burlington Northern Santa Fe
Corp. .......................... 590 54,833
Carnival Corp., Class A ......... 3,000 166,125
Chancellor Media Corp.* ......... 780 58,208
Cisco Systems, Inc.* ............ 900 50,175
Compaq Computer Corp. ........... 550 31,041
Computer Associates
International, Inc. ............ 1,730 91,474
DENTSPLY International, Inc. ... 1,300 39,650
Dial Corp. ...................... 3,800 79,088
Edison International ............ 4,900 133,219
El Paso Natural Gas Co. ......... 2,300 152,950
Eli Lilly & Co. ................. 1,560 108,615
Enron Corp. ..................... 1,450 60,266
Federal-Mogul Corp. ............. 2,600 105,300
First Union Corp. ............... 2,250 115,313
Gartner Group, Inc., Class A* .. 1,500 55,875
GenCorp, Inc. ................... 2,400 60,000
General Electric Co. ............ 1,400 102,725
Glenborough Realty Trust, Inc. . 1,900 56,288
Harnischfeger Industries, Inc. . 1,650 58,266
Hartford Life, Inc., Class A ... 1,500 67,969
Healthsouth Corp.* .............. 4,700 130,425
Hertz Corp., Class A ............ 2,800 112,700
Ingersol Rand Co. ............... 2,600 105,300
International Business Machines
Corp. .......................... 600 62,738
MGIC Investment Corp. ........... 1,210 80,465
Microsoft Corp.* ................ 375 48,469
National Semiconductor Corp.* .. 3,000 77,812
OMI Corp.* ...................... 3,700 33,994
Orbital Sciences Corp.* ......... 550 16,362
Owens Illinois, Inc.* ........... 4,000 151,750
Pfizer, Inc. .................... 1,400 104,387
Prentiss Properties Trust ...... 2,655 74,174
Provident Cos., Inc. ............ 3,500 135,187
Quantum Corp.* .................. 2,450 49,153
Rite Aid Corp. .................. 1,175 68,958
Royal Caribbean Cruises Ltd. ... 1,700 90,631
Safeway, Inc.* .................. 1,400 88,550
Schlumberger Ltd. ............... 650 52,325
Sears Roebuck & Co. ............. 1,900 85,975
Smith International, Inc.* ..... 900 55,237
SPX Corp. ....................... 400 27,600
Starwood Lodging Trust .......... 770 44,564
Sun International Hotels Ltd.* . 1,100 41,387
Sunbeam Corp. ................... 2,300 96,887
Tele-Communications TCI Ventures
Group, Class A* ................ 3,305 93,573
Telecommunications, Inc.,
Class A* ....................... 4,570 127,674
Texas Utilities Co. ............. 2,100 87,281
Travelers Group, Inc. ........... 2,500 134,687
Travelers Property & Casualty,
Inc., Class A .................. 800 35,200
<PAGE>
<CAPTION>
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------- ---------- --------------
<S> <C> <C>
Tricon Global Restaurants,
Inc.*........................... 2,000 $ 58,125
U.S. Air Group, Inc.* ........... 2,100 131,250
Unocal Corp. .................... 2,500 97,031
Unum Corp. ...................... 825 44,859
Wal-Mart Stores, Inc............. 2,000 78,875
Warner Lambert Co. .............. 800 99,200
Worldcom, Inc.* ................. 4,000 121,000
--------------
TOTAL UNITED STATES ............ 5,530,988
--------------
TOTAL COMMON STOCKS (57.4%)
(Cost $10,627,077) ............. 10,451,762
--------------
PREFERRED STOCKS:
OTHER EUROPEAN COUNTRIES (0.7%)
GERMANY (0.7%)
Henkel KGaA
(Cost $110,227) ................ 2,100 131,327
--------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount
----------
LONG-TERM DEBT SECURITIES:
OTHER EUROPEAN COUNTRIES (7.8%)
<S> <C> <C> <C>
FRANCE (0.8%)
Government of France
5.50%, 10/25/07 ............ FRF 900,000 151,514
--------------
GERMANY (4.1%)
Republic of Germany
Series 86
6.00%, 6/20/16 .............. DEM 375,000 212,882
Series 95
6.50%, 10/14/05 ................ 175,000 105,236
Series 97
6.00%, 7/4/07 .................. 735,000 429,164
--------------
747,282
--------------
ITALY (2.5%)
Italian Treasury Bond (BTPS)
8.50%, 8/1/04 ............... ITL 675,000,000 446,349
--------------
SPAIN (0.4%)
Kingdom of Spain
7.90%, 2/28/02 .............. ESP 10,000,000 72,662
--------------
TOTAL OTHER EUROPEAN COUNTRIES 1,417,807
--------------
SCANDINAVIA (2.7%)
DENMARK (0.4%)
Kingdom of Denmark
7.00%, 11/15/07 ............. DKK 525,000 84,358
-------------
SWEDEN (2.3%)
Kingdom of Sweden,
Series 1037
8.00%, 8/15/07 .............. SEK 2,900,000 418,367
--------------
TOTAL SCANDINAVIA .............. 502,725
--------------
UNITED KINGDOM (2.3%)
United Kingdom Treasury Note
7.25%, 12/7/07 .............. GBP 235,000 413,738
--------------
</TABLE>
14
<PAGE>
EQ ADVISORS TRUST
MERRILL LYNCH WORLD STRATEGY PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- --------------------------- ------------ ------------
<S> <C> <C>
UNITED STATES (12.5%)
U.S. Treasury Bond
6.625%, 2/15/27 .......... $1,235,000 $ 1,340,748
U.S. Treasury Note
6.00%, 8/15/99 ........... 475,000 477,524
6.50%, 5/31/02 ........... 80,000 82,375
6.625%, 5/15/07 .......... 360,000 381,263
------------
TOTAL UNITED STATES........ 2,281,910
------------
TOTAL LONG-TERM DEBT SECURITIES (25.3%)
(Cost $4,531,813) ......... 4,616,180
------------
SHORT-TERM DEBT SECURITIES:
U.S. GOVERNMENT AGENCIES (16.1%)
Federal Farm Credit Bank
(Discount Note), 1/2/98
(Amortized Cost
$2,928,536)................ 2,929,000 2,928,536
------------
TOTAL INVESTMENTS (99.5%)
(Cost/Amortized Cost
$18,197,653)............... 18,127,805
OTHER ASSETS
LESS LIABILITIES (0.5%) .. 82,645
------------
NET ASSETS (100%) .......... $18,210,450
============
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
MARKET SECTOR DIVERSIFICATION
(Unaudited)
As a Percentage of Total Equity Investments
Basic Materials ......................... 7.4%
Business Services ....................... 3.6
Capital Goods ........................... 11.9
Consumer Cyclicals ...................... 20.9
Consumer Non-Cyclicals .................. 13.1
Credit Sensitive ........................ 22.1
Diversified ............................. 3.2
Energy .................................. 5.6
Technology .............................. 12.2
--------
100.0%
========
</TABLE>
- ------------
* Non-income producing
Glossary:
ADR--American Depositary Receipt
GDR--Global Depositary Receipt
GBP--British Pound
DKK--Danish Krone
FRF--French Franc
DEM--German Mark
ITL--Italian Lira
ESP--Spanish Peseta
SEK--Swedish Krona
15
<PAGE>
EQ ADVISORS TRUST
MERRILL LYNCH WORLD STRATEGY PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1997
- -----------------------------------------------------------------------------
At December 31, 1997 the Portfolio had outstanding forward currency contracts
to buy/sell foreign currencies as follows: (Note 1)
<TABLE>
<CAPTION>
LOCAL
CONTRACT COST ON U.S.$ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION/
(000'S) DATE VALUE (DEPRECIATION)
---------- ------------- ---------- ---------------
<S> <C> <C> <C> <C>
FOREIGN CURRENCY BUY CONTRACTS
British Pound, expiring 1/14/98 .... 275 $460,969 $451,590 $ (9,379)
FOREIGN CURRENCY SALE CONTRACTS
Australian Dollar, expiring 1/22/98 175 115,486 114,061 1,425
British Pound, expiring 1/14/98 .... 475 767,429 780,570 (13,141)
Canadian Dollar, expiring 3/17/98 .. 475 334,666 333,053 1,613
Japanese Yen, expiring 1/16/98 ..... 92,000 711,013 706,806 4,207
---------------
$(15,275)
===============
</TABLE>
Investment security transactions for the period from May 1, 1997 to December
31, 1997 were as follows:
<TABLE>
<CAPTION>
<S> <C>
COST OF PURCHASES:
Stocks and long-term corporate debt securities $17,761,434
U.S. Government securities ..................... 2,593,618
NET PROCEEDS OF SALES AND REDEMPTIONS:
Stocks and long-term corporate debt securities 4,455,658
U.S. Government securities ..................... 380,376
</TABLE>
As of December 31, 1997, the gross unrealized appreciation (depreciation) of
investments based on the aggregate cost of investments for Federal income tax
purposes was as follows:
<TABLE>
<CAPTION>
<S> <C>
Aggregate gross unrealized appreciation $ 721,066
Aggregate gross unrealized depreciation (848,461)
------------
Net unrealized (depreciation) ........... $ (127,395)
============
Federal income tax cost of investments . $18,255,200
============
</TABLE>
At December 31, 1997 the Portfolio had loaned securities with a total value
of $1,763,457, which was secured by collateral valued at $1,787,695 of which
$506,887 was in the form of U.S. Government securities.
For the period from May 1, 1997 to December 31, 1997 the Portfolio incurred
approximately $166 as brokerage commissions with Donaldson, Lufkin & Jenrette
Securities Corp., $181 with Fleming Martin and $2,622 with Merrill Lynch &
Co., Inc., all affiliated broker/dealers.
See Notes to Financial Statements
16
<PAGE>
EQ ADVISORS TRUST
MFS EMERGING GROWTH COMPANIES PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------- ------------ --------------
<S> <C> <C>
COMMON STOCKS:
BASIC MATERIALS (0.1%)
CHEMICALS--SPECIALTY (0.1%)
VWR Scientific Products Corp.* .. 1,700 $ 48,025
--------------
METALS & MINING (0.0%)
Rock of Ages Corp., Class A* .... 100 1,550
--------------
PAPER (0.0%)
Ikon Office Solutions, Inc. ..... 700 19,688
--------------
TOTAL BASIC MATERIALS ........... 69,263
--------------
BUSINESS SERVICES (25.5%)
ENVIRONMENTAL CONTROL (0.3%)
Allied Waste Industries, Inc.* .. 10,900 254,106
--------------
PRINTING, PUBLISHING, BROADCASTING (11.5%)
American Radio Systems Corp.,
Class A* ........................ 19,000 1,012,937
CBS Corp. ........................ 20,800 612,300
Chancellor Media Corp.* .......... 4,900 365,662
Clear Channel Communications,
Inc.* ........................... 18,050 1,433,847
CMP Media, Inc., Class A* ........ 100 1,725
Cox Radio Inc., Class A* ......... 10,700 430,675
Emmis Broadcasting Corp.,
Class A* ........................ 4,300 196,187
Hearst-Argyle Television, Inc.* . 4,000 119,000
Heftel Broadcasting Corp.,
Class A* ........................ 2,300 107,525
Intermedia Communications of
Florida, Inc.* .................. 20,500 1,245,375
Jacor Communications, Inc.* ..... 22,000 1,168,750
Lear Corp.* ...................... 600 28,500
Learning Tree International,
Inc.* ........................... 31,500 909,562
Lin Television Corp.* ............ 18,900 1,030,050
Mail-Well, Inc.* ................. 2,600 105,300
Outdoor Systems, Inc.* ........... 22,100 848,088
SFX Broadcasting, Inc., Class A* . 6,200 497,550
Sinclair Broadcast Group, Inc.,
Class A* ........................ 4,500 209,813
TCA Cable TV, Inc. ............... 1,200 55,200
TV Azteca S.A. (ADS)* ............ 300 6,769
Univision Communications, Inc.,
Class A* ........................ 8,700 607,369
Viacom, Inc., Class B* ........... 18,100 750,019
--------------
11,742,203
--------------
PROFESSIONAL SERVICES (13.5%)
Accustaff, Inc.* ................. 30,300 696,900
Applied Graphics Technologies,
Inc. ............................ 1,200 63,900
BISYS Group, Inc.* ............... 7,500 249,375
Castle Dental Centers, Inc.* .... 100 775
Cendant Corp.* ................... 234,953 8,076,498
Compuware Corp.* ................. 95,400 3,052,800
Corestaff, Inc.* ................. 11,800 312,700
EduTrek International, Inc.,
Class A* ........................ 200 5,200
Galileo International, Inc. ..... 500 13,812
Lamar Advertising Co., Class A* .. 7,800 310,050
National Research Corp.* ......... 100 662
Orthodontic Centers of America,
Inc.* ........................... 18,100 300,913
Outsource International, Inc.* .. 700 8,487
Oxford Health Plans, Inc.* ...... 7,900 122,944
Pacificare Health Systems, Inc.,
Class B* ........................ 8,900 466,138
<PAGE>
<CAPTION>
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------- ----------- --------------
<S> <C> <C>
PRT Group, Inc.* ................. 1,000 $ 11,375
Service Corp. International ..... 1,400 51,713
SPR, Inc.* ....................... 100 1,700
--------------
13,745,942
--------------
TRUCKING, SHIPPING (0.2%)
C.H. Robinson Worldwide, Inc. ... 400 8,950
Jevic Transportation, Inc.* ..... 200 3,225
Newport News Shipbuilding, Inc. .. 8,800 223,850
--------------
236,025
--------------
TOTAL BUSINESS SERVICES ......... 25,978,276
--------------
CAPITAL GOODS (0.3%)
AEROSPACE (0.1%)
Thiokol Corp. .................... 900 73,125
--------------
BUILDING & CONSTRUCTION (0.2%)
Global Industries Ltd.* .......... 13,600 231,200
--------------
BUILDING MATERIALS & FOREST
PRODUCTS (0.0%)
Industrial Distribution Group,
Inc.* ........................... 100 1,569
Lowe's Cos., Inc. ................ 900 42,919
--------------
44,488
--------------
ELECTRICAL EQUIPMENT (0.0%)
Power-One, Inc.* ................. 200 2,750
--------------
MACHINERY (0.0%)
SI Handling Systems, Inc. ........ 900 12,375
--------------
TOTAL CAPITAL GOODS ............. 363,938
--------------
CONSUMER CYCLICALS (12.9%)
APPAREL & TEXTILES (0.1%)
Linens 'N Things, Inc.* .......... 1,600 69,800
Tefron Ltd.* ..................... 200 4,600
Unifi, Inc. ...................... 400 16,275
--------------
90,675
--------------
AUTO RELATED (1.9%)
Avis Rent A Car, Inc.* ........... 4,400 140,525
Dollar Thrifty Automotive Group,
Inc.* ........................... 6,100 125,050
Republic Industries, Inc.* ...... 72,100 1,680,831
Stoneridge, Inc.* ................ 400 6,400
--------------
1,952,806
--------------
FOOD SERVICES, LODGING (1.7%)
Applebee's International, Inc. .. 6,900 124,631
BridgeStreet Accommodations,
Inc.* ........................... 200 2,031
Fine Host Corp.*# ................ 1,400 10,500
ITT Corp. (New)* ................. 6,500 538,688
Promus Hotel Corp.* .............. 21,400 898,800
Suburban Lodges of America, Inc.* 8,800 117,150
--------------
1,691,800
--------------
HOUSEHOLD FURNITURE, APPLIANCES (0.0%)
Gemstar International Group Ltd.* 600 14,625
Mac-Gray Corp.* .................. 300 4,687
--------------
19,312
--------------
LEISURE RELATED (0.3%)
Harrah's Entertainment, Inc.* ... 6,800 128,350
N2K, Inc.* ....................... 200 2,925
Royal Caribbean Cruises Ltd. .... 3,100 165,269
--------------
296,544
--------------
17
<PAGE>
EQ ADVISORS TRUST
MFS EMERGING GROWTH COMPANIES PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------- ------------ --------------
RETAIL--GENERAL (8.9%)
A.C. Moore Arts & Crafts, Inc.* .. 200 $ 2,275
Consolidated Stores Corp.* ...... 14,000 615,125
CVS Corp. ........................ 19,000 1,217,187
Dollar General Corp. ............. 1,300 47,125
Fred Meyer, Inc.* ................ 48,400 1,760,550
Home Depot, Inc. ................. 16,200 953,775
Office Depot, Inc.* .............. 81,600 1,953,300
Pier 1 Imports, Inc. ............. 1,500 33,938
Rite Aid Corp. ................... 34,800 2,042,325
Staples, Inc.* ................... 15,900 441,225
U.S.A. Floral Products, Inc.* ... 300 4,725
Viking Office Products, Inc. .... 1,100 23,994
--------------
9,095,544
--------------
TOTAL CONSUMER CYCLICALS ........ 13,146,681
--------------
CONSUMER NON-CYCLICALS (6.2%)
CONTAINERS (0.0%)
Ivex Packaging Corp.* ............ 500 12,000
Silgan Holdings, Inc.* ........... 100 3,250
--------------
15,250
--------------
DRUGS (0.4%)
McKesson Corp. ................... 2,200 238,012
PathoGenesis Corp.* .............. 1,700 63,113
Zonagen, Inc. .................... 3,600 65,475
--------------
366,600
--------------
FOODS (0.2%)
American Italian Pasta Co.,
Class A* ........................ 400 10,000
Corn Products International,
Inc.* ........................... 900 26,831
McCormick & Co., Inc. (Non
Voting) ......................... 3,400 95,200
Tootsie Roll Industries, Inc. ... 800 50,000
--------------
182,031
--------------
HOSPITAL SUPPLIES & SERVICES (4.3%)
Arterial Vascular Engineering,
Inc.* ........................... 8,200 533,000
Boron, LePore & Associates, Inc.* 200 5,500
Columbia HCA Healthcare Corp. .... 6,700 198,487
Cyberonics, Inc.* ................ 19,600 298,900
Foundation Health Systems, Class
A* .............................. 50 1,119
Guidant Corp. .................... 25,500 1,587,375
Health Management Associates,
Inc., Class A* .................. 600 15,150
Healthsouth Corp.* ............... 31,400 871,350
Integrated Health Services, Inc. 9,700 302,519
Mariner Health Group, Inc.* ..... 1,300 21,125
Medtronic, Inc. .................. 2,700 141,244
Mentor Corp. ..................... 1,600 58,400
Priority Healthcare Corp.,
Class B* ........................ 200 3,025
Renal Treatment Centers, Inc.* .. 7,800 281,775
Safeskin Corp.* .................. 1,100 62,425
St. Jude Medical, Inc.* .......... 300 9,150
--------------
4,390,544
--------------
RETAIL--FOOD (1.0%)
Albertson's, Inc. ................ 1,000 47,375
General Nutrition Cos., Inc.* ... 14,100 479,400
Kroger Co.* ...................... 3,600 132,975
Safeway, Inc.* ................... 1,300 82,225
Suiza Foods Corp.* ............... 4,100 244,206
Whole Foods Market, Inc.* ........ 1,200 61,350
--------------
1,047,531
--------------
<PAGE>
<CAPTION>
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------- ----------- --------------
<S> <C> <C>
SOAPS & TOILETRIES (0.3%)
Benckiser N.V., Class B* ......... 6,500 $ 268,957
Carson, Inc., Class A* ........... 1,000 6,687
-------------
275,644
-------------
TOTAL CONSUMER NON-CYCLICALS .... 6,277,600
-------------
CREDIT SENSITIVE (10.7%)
BANKS (1.1%)
Charter One Financial, Inc. ..... 5,210 328,881
Compass BancShares, Inc. ......... 4,400 192,500
First Security Corp. ............. 1,300 54,438
First Virginia Banks, Inc. ...... 700 36,181
Firstar Corp. .................... 1,100 46,681
Peoples Heritage Financial Group,
Inc. ............................ 4,300 197,800
Provident Financial Group, Inc. . 800 38,800
Summit Bancorp ................... 900 47,925
U.S. Trust Corp. ................. 1,700 106,463
Union Planters Corp. ............. 700 47,556
-------------
1,097,225
-------------
FINANCIAL SERVICES (3.9%)
A.G. Edwards, Inc. ............... 4,650 184,837
Associates First Capital Corp.,
Class A ......................... 5,100 362,738
CIT Group, Inc., Class A* ........ 2,200 70,950
Conseco, Inc. .................... 4,400 199,925
Consolidation Capital Corp.* .... 20,000 406,250
First Data Corp. ................. 23,200 678,600
Franklin Resources, Inc. ......... 13,500 1,173,656
Interra Financial, Inc. .......... 500 34,500
Lehman Brothers Holdings, Inc. .. 3,300 168,300
LINC Capital, Inc.* .............. 300 5,888
Morgan Stanley Dean Witter
Discover & Co. .................. 5,200 307,450
T. Rowe Price Associates, Inc. .. 5,700 358,387
-------------
3,951,481
-------------
INSURANCE (3.3%)
Ace Ltd. ......................... 800 77,200
Hartford Life, Inc., Class A .... 200 9,062
PAULA Financial* ................. 100 2,300
United Healthcare Corp. .......... 65,400 3,249,563
-------------
3,338,125
-------------
REAL ESTATE (0.0%)
Franchise Mortgage Acceptance
Co.* ............................ 1,100 20,213
Starwood Lodging Trust ........... 900 52,087
-------------
72,300
-------------
UTILITY--TELEPHONE (2.4%)
Cincinnati Bell, Inc. ............ 11,000 341,000
MCI Communications Corp. ......... 49,600 2,123,500
-------------
2,464,500
-------------
TOTAL CREDIT SENSITIVE .......... 10,923,631
-------------
DIVERSIFIED (5.2%)
MISCELLANEOUS (5.2%)
Tyco International Ltd. .......... 116,637 5,255,947
-------------
ENERGY (1.4%)
OIL--INTERNATIONAL (0.2%)
Diamond Offshore Drilling, Inc. . 4,500 216,562
-------------
OIL--SUPPLIES & CONSTRUCTION (0.6%)
Cooper Cameron Corp. ............. 4,200 256,200
Dril-Quip, Inc. .................. 400 14,050
Input/Output, Inc.* .............. 1,500 44,531
18
<PAGE>
EQ ADVISORS TRUST
MFS EMERGING GROWTH COMPANIES PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------- ------------ --------------
Noble Drilling Corp. ............. 6,300 $ 192,938
Veritas DGC, Inc. ................ 700 27,650
Weatherford Enterra, Inc. ........ 2,300 100,625
--------------
635,994
--------------
RAILROADS (0.6%)
Kansas City Southern Industries,
Inc.............................. 17,600 558,800
--------------
TOTAL ENERGY .................... 1,411,356
--------------
TECHNOLOGY (30.3%)
ELECTRONICS (16.3%)
Adobe Systems, Inc. .............. 100 4,125
Affiliated Computer Services,
Inc., Class A* .................. 11,800 310,488
Altera Corp.* .................... 10,600 351,125
Aspen Technologies, Inc. ......... 600 20,550
Autodesk, Inc. ................... 3,850 142,450
BMC Software, Inc.* .............. 48,800 3,202,500
Cadence Design Systems, Inc.* ... 114,490 2,805,005
Computer Associates
International, Inc. ............. 91,900 4,859,212
Dassault Systems S.A. (ADR) ..... 700 21,612
International Manufacturing
Services, Inc., Class A* ........ 300 2,175
J.D. Edwards & Co.* .............. 300 8,850
Micro Warehouse, Inc.*............ 23,500 327,531
Microsoft Corp.*.................. 22,400 2,895,200
SAP Aktiengesellschaft+ .......... 300 31,800
Scopus Technology, Inc.*.......... 7,800 93,600
Security Dynamics Technologies,
Inc.* ........................... 400 14,300
Sun Microsystems, Inc.*........... 12,600 502,425
Synopsys, Inc.*................... 7,900 282,425
Technology Solutions Co.*......... 21,400 564,425
Transaction Systems Architechs,
Inc., Class A* .................. 300 11,400
Xilinx, Inc.*..................... 3,500 122,719
--------------
16,573,917
--------------
OFFICE EQUIPMENT (9.5%)
Cisco Systems, Inc.* ............. 83,550 4,657,912
Compaq Computer Corp. ............ 4,600 259,613
Corporate Express, Inc.* ......... 43,400 558,775
DST Systems, Inc.* ............... 3,500 149,406
Danka Business Systems plc (ADR) 37,100 591,281
Oracle Corp.*..................... 156,812 3,498,868
--------------
9,715,855
--------------
OFFICE EQUIPMENT SERVICES (1.0%)
Cognicase, Inc.* ................. 100 1,213
U.S. Office Products Co.* ........ 49,950 980,269
--------------
981,482
--------------
<PAGE>
<CAPTION>
NUMBER VALUE
OF SHARES (NOTE 1)
- ----------------------------------- ----------- --------------
<S> <C> <C>
TELECOMMUNICATIONS (3.5%)
American Communications Services,
Inc.* ........................... 3,300 $ 42,281
Aspect Telecommunications Corp.* 1,000 20,875
Brooks Fiber Properties, Inc.* ... 1,800 99,000
Century Telephone Enterprises,
Inc. ............................ 9,200 458,275
China Telecom (Hong Kong) Ltd.
(ADR)*........................... 600 20,138
Concord Communications, Inc.* .... 100 2,075
Excel Switching Corp.* ........... 200 3,575
Inter-Tel, Inc. .................. 5,100 98,813
ITC DeltaCom, Inc.* .............. 300 4,950
LCI International, Inc.* ......... 17,000 522,750
Loral Space & Communications* .... 17,400 373,013
Lucent Technologies, Inc. ........ 2,700 215,663
Microcell Telecommunications,
Inc., Class B (Non Voting)* .... 900 6,075
Network Solutions, Inc., Class
A*............................... 100 1,312
NEXTLINK Communications, Inc.,
Class A* ........................ 2,600 55,413
NICE-Systems Ltd. (ADR) .......... 200 8,400
Qwest Communications
International, Inc.* ............ 100 5,950
Tel-Save Holdings, Inc.* ......... 1,000 19,875
Teleport Communications Group,
Inc., Class A* .................. 1,700 93,287
TeleSpectrum Worldwide, Inc.* .... 2,300 8,337
Teligent, Inc., Class A* ......... 300 7,387
Worldcom, Inc.* .................. 50,200 1,518,550
--------------
3,585,994
--------------
TOTAL TECHNOLOGY ................ 30,857,248
--------------
TOTAL COMMON STOCKS (92.6%)
(Cost $94,430,684) .............. 94,283,940
--------------
PREFERRED STOCKS:
TECHNOLOGY (2.0%)
ELECTRONICS (2.0%)
SAP AG (Non Voting)
(Cost $1,694,828) ............... 6,410 2,081,615
--------------
Principal
Amount
------------
SHORT-TERM DEBT SECURITIES:
U.S. GOVERNMENT AGENCIES (7.8%)
Federal Home Loan Bank (Discount
Note), 1/2/98 (Amortized Cost
$7,898,958) ..................... $7,900,000 7,898,958
TOTAL INVESTMENTS (102.4%)
(Cost/Amortized
Cost $104,024,470) .............. 104,264,513
OTHER ASSETS
LESS LIABILITIES (-2.4%) ........ (2,447,270)
--------------
NET ASSETS (100%) ................ $101,817,243
==============
</TABLE>
* Non-income producing
+ Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may only be resold to qualified institutional
buyers. At December 31, 1997 these securities amounted to $31,800 or
0.03% of net assets.
# Securities (totaling $10,500 or 0.01% of net assets) valued at fair
value.
Glossary:
ADR--American Depositary Receipt
ADS--American Depositary Share
19
<PAGE>
EQ ADVISORS TRUST
MFS EMERGING GROWTH COMPANIES PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1997
- -----------------------------------------------------------------------------
At December 31, 1997 the Portfolio had outstanding forward currency contracts
to buy/sell foreign currencies as follows: (Note 1)
<TABLE>
<CAPTION>
LOCAL
CONTRACT COST ON U.S.$
AMOUNT ORIGINATION CURRENT UNREALIZED
(000'S) DATE VALUE (DEPRECIATION)
---------- ------------- --------- --------------
<S> <C> <C> <C> <C>
FOREIGN CURRENCY BUY CONTRACTS
German Mark, expiring 1/6/98 ......... 177 $98,784 $98,232 $(552)
Netherlands Guilder, expiring 1/6/98 25 12,231 12,158 (73)
--------------
$(625)
==============
</TABLE>
Investment security transactions for the period from May 1, 1997 to December
31, 1997 were as follows:
<TABLE>
<CAPTION>
<S> <C>
COST OF PURCHASES:
Stocks and long-term corporate debt securities $144,741,805
NET PROCEEDS OF SALES AND REDEMPTIONS:
Stocks and long-term corporate debt securities 50,090,386
</TABLE>
As of December 31, 1997, the gross unrealized appreciation (depreciation) of
investments based on the aggregate cost of investments for Federal income tax
purposes was as follows:
<TABLE>
<CAPTION>
<S> <C>
Aggregate gross unrealized appreciation $ 6,292,508
Aggregate gross unrealized depreciation (6,261,782)
-------------
Net unrealized appreciation.............. $ 30,726
=============
Federal income tax cost of investments . $104,233,787
=============
</TABLE>
At December 31, 1997 the Portfolio had loaned securities with a total value
of $23,803,563, which was secured by collateral valued at $24,156,300.
See Notes to Financial Statements
20
<PAGE>
EQ ADVISORS TRUST
MFS RESEARCH PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------- ------------ --------------
<S> <C> <C>
COMMON STOCKS:
BASIC MATERIALS (4.9%)
CHEMICALS (1.8%)
Air Products & Chemicals, Inc. .. 10,400 $ 855,400
E.I. Du Pont de Nemours & Co. .... 11,100 666,694
Praxair, Inc. .................... 13,400 603,000
--------------
2,125,094
--------------
CHEMICALS--SPECIALTY (1.0%)
Cytec Industries, Inc.*........... 23,900 1,121,806
--------------
PAPER (2.1%) .....................
Kimberly Clark Corp. ............. 36,900 1,819,632
Stone Container Corp.* ........... 63,500 662,781
--------------
2,482,413
--------------
TOTAL BASIC MATERIALS ........... 5,729,313
--------------
BUSINESS SERVICES (6.6%)
ENVIRONMENTAL CONTROL (1.1%)
Browning-Ferris Industries, Inc. 34,500 1,276,500
--------------
PRINTING, PUBLISHING, BROADCASTING (1.1%)
Clear Channel Communications,
Inc.* ........................... 8,800 699,050
Intermedia Communications of
Florida, Inc.* .................. 9,000 546,750
--------------
1,245,800
--------------
PROFESSIONAL SERVICES (3.7%)
Accustaff, Inc.*.................. 13,900 319,700
Cendant Corp.* ................... 76,711 2,636,935
Compuware Corp.* ................. 41,900 1,340,800
--------------
4,297,435
--------------
TRUCKING, SHIPPING (0.7%)
Newport News Shipbuilding, Inc. .. 34,300 872,506
--------------
TOTAL BUSINESS SERVICES ......... 7,692,241
--------------
CAPITAL GOODS (4.6%)
AEROSPACE (2.9%)
Lockheed Martin Corp. ............ 10,100 994,850
United Technologies Corp. ........ 32,100 2,337,281
--------------
3,332,131
--------------
ELECTRICAL EQUIPMENT (1.2%)
Cooper Industries, Inc. .......... 19,100 935,900
Teradyne, Inc.* .................. 15,100 483,200
--------------
1,419,100
--------------
MACHINERY (0.5%)
American Standard Cos., Inc.* .... 16,800 643,650
--------------
TOTAL CAPITAL GOODS ............. 5,394,881
--------------
CONSUMER CYCLICALS (7.5%)
APPAREL & TEXTILES (0.4%)
Gymboree Corp.* .................. 9,700 265,538
Reebok International Ltd.* ...... 5,000 144,062
--------------
409,600
--------------
AUTO RELATED (0.2%)
Kwik-Fit Holdings plc............. 39,500 229,134
--------------
FOOD SERVICES, LODGING (1.0%)
Hilton Hotels Corp. .............. 13,900 413,525
Host Marriott Corp.* ............. 30,900 606,413
Jarvis Hotels plc ................ 80,500 198,429
--------------
1,218,367
--------------
<PAGE>
<CAPTION>
NUMBER VALUE
OF SHARES (NOTE 1)
- ------------------------------------ ---------- --------------
<S> <C> <C>
HOUSEHOLD FURNITURE, APPLIANCES (0.1%)
Sony Corp. ....................... 1,500 $ 133,359
--------------
PHOTO & OPTICAL (0.6%)
Canon, Inc. ...................... 32,000 745,583
--------------
RETAIL--GENERAL (5.2%)
CVS Corp. ........................ 20,600 1,319,687
Fred Meyer, Inc.* ................ 18,100 658,387
Home Depot, Inc. ................. 27,700 1,630,838
Office Depot, Inc.* .............. 33,000 789,938
Rite Aid Corp. ................... 27,700 1,625,644
--------------
6,024,494
--------------
TOTAL CONSUMER CYCLICALS ........ 8,760,537
--------------
CONSUMER NON-CYCLICALS (20.6%) ..
BEVERAGES (2.5%)
Brahma (ADR) ..................... 50,500 716,469
Coca Cola Co. .................... 33,300 2,218,612
--------------
2,935,081
--------------
DRUGS (4.2%)
Bristol-Myers Squibb Co. ......... 34,000 3,217,250
Cardinal Health, Inc. ............ 13,800 1,036,725
Novartis AG (Registered).......... 300 486,820
Sankyo Co. ....................... 9,000 203,487
--------------
4,944,282
--------------
FOODS (0.8%)
Earthgrains Co. .................. 3,500 164,500
McCormick & Co., Inc.
(Non Voting)..................... 27,400 767,200
--------------
931,700
--------------
HOSPITAL SUPPLIES & SERVICES (2.8%)
Boston Scientific Corp.* ......... 21,100 967,963
Healthsouth Corp.* ............... 46,459 1,289,243
Tenet Healthcare Corp.* .......... 30,000 993,750
Uromed Corp.* .................... 2,500 8,828
--------------
3,259,784
--------------
RETAIL--FOOD (0.6%)
Safeway, Inc.* ................... 10,800 683,100
--------------
SOAPS & TOILETRIES (7.5%)
Clorox Co. ....................... 11,200 885,500
Colgate Palmolive Co. ............ 37,700 2,770,950
Dial Corp. ....................... 10,700 222,694
Gillette Co. ..................... 22,700 2,279,931
Procter & Gamble Co. ............. 25,400 2,027,237
Revlon, Inc., Class A* ........... 16,800 593,250
--------------
8,779,562
--------------
TOBACCO (2.2%)
Philip Morris Cos., Inc. ......... 55,800 2,528,438
--------------
TOTAL CONSUMER NON-CYCLICALS .... 24,061,947
--------------
CREDIT SENSITIVE (25.0%)
BANKS (6.0%)
BankBoston Corp. ................. 8,900 836,044
Chase Manhattan Corp. ............ 11,300 1,237,350
Comerica, Inc. ................... 13,600 1,227,400
Fleet Financial Group, Inc. ..... 16,600 1,243,962
PNC Bank Corp. ................... 15,400 878,763
Union Planters Corp. ............. 8,500 577,469
Wells Fargo & Co. ................ 2,900 984,369
--------------
6,985,357
--------------
21
<PAGE>
EQ ADVISORS TRUST
MFS RESEARCH PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------- ------------ --------------
FINANCIAL SERVICES (7.1%)
Advanta Corp., Class B ........... 4,200 $ 106,575
American Express Co. ............. 6,200 553,350
Associates First Capital Corp.,
Class A ......................... 6,800 483,650
CIT Group, Inc., Class A* ........ 2,900 93,525
Conseco, Inc. .................... 40,100 1,822,044
CoreStates Financial Corp. ...... 12,400 992,775
Fannie Mae ....................... 22,800 1,301,025
First Data Corp. ................. 37,700 1,102,725
Franklin Resources, Inc. ......... 5,500 478,156
Merrill Lynch & Co. .............. 10,600 773,137
Morgan Stanley Dean Witter
Discover & Co. .................. 10,500 620,813
--------------
8,327,775
--------------
INSURANCE (9.6%)
Allstate Corp. ................... 12,250 1,113,219
Chubb Corp. ...................... 12,400 937,750
CIGNA Corp. ...................... 6,700 1,159,519
FPIC Insurance Group, Inc.* ..... 1,600 46,600
Hartford Financial Services
Group, Inc. ..................... 15,500 1,450,219
Lincoln National Corp. ........... 11,300 882,812
Penncorp Financial Group, Inc. .. 10,800 385,425
Reliastar Financial Corp. ........ 18,462 760,404
Skandia Forsakrings AB ........... 20,100 948,053
Travelers Group, Inc. ............ 20,200 1,088,275
United Healthcare Corp. .......... 49,600 2,464,500
--------------
11,236,776
--------------
REAL ESTATE (0.0%)
Wharf Holdings Ltd. .............. 6,000 13,162
--------------
UTILITY--ELECTRIC (0.5%)
CalEnergy Co., Inc.* ............. 18,400 529,000
--------------
UTILITY--TELEPHONE (1.8%)
MCI Communications Corp. ......... 17,800 762,063
Sprint Corp. ..................... 23,100 1,354,238
--------------
2,116,301
--------------
TOTAL CREDIT SENSITIVE .......... 29,208,371
--------------
DIVERSIFIED (3.1%)
MISCELLANEOUS (3.1%)
Tyco International Ltd. .......... 79,487 3,581,874
--------------
ENERGY (5.1%)
OIL--DOMESTIC (1.4%)
Chevron Corp. .................... 6,300 485,100
USX-Marathon Group, Inc. ......... 34,100 1,150,875
--------------
1,635,975
--------------
OIL--INTERNATIONAL (1.5%)
British Petroleum Co. plc (ADR) .. 21,451 1,709,376
--------------
OIL--SUPPLIES & CONSTRUCTION (0.8%)
Baker Hughes, Inc. ............... 21,600 942,300
--------------
<PAGE>
<CAPTION>
NUMBER VALUE
OF SHARES (NOTE 1)
- ----------------------------------- ----------- --------------
<S> <C> <C>
RAILROADS (1.4%)
Burlington Northern Santa Fe
Corp. ........................... 11,600 $ 1,078,075
Wisconsin Central Transport
Corp.* .......................... 23,800 556,325
--------------
1,634,400
--------------
TOTAL ENERGY .................... 5,922,051
--------------
TECHNOLOGY (18.9%)
ELECTRONICS (12.2%)
Adobe Systems, Inc. .............. 11,300 466,125
Analog Devices, Inc.* ............ 17,100 473,456
BMC Software, Inc.* .............. 20,700 1,358,437
Cadence Design Systems, Inc.* ... 48,800 1,195,600
Computer Associates
International, Inc. ............. 29,750 1,573,031
Electronic Arts, Inc.* ........... 29,900 1,130,594
HBO & Co. ........................ 33,000 1,584,000
Intel Corp. ...................... 29,300 2,058,325
Microsoft Corp.* ................. 23,300 3,011,525
Sun Microsystems, Inc.* .......... 17,300 689,838
Sybase, Inc.* .................... 20,100 267,581
Synopsys, Inc.* .................. 13,300 475,475
--------------
14,283,987
--------------
OFFICE EQUIPMENT (4.1%)
Cisco Systems, Inc.* ............. 21,900 1,220,925
Compaq Computer Corp. ............ 34,000 1,918,875
Oracle Corp.* .................... 73,900 1,648,894
--------------
4,788,694
--------------
TELECOMMUNICATIONS (2.6%)
Alcatel Alsthom (ADR) ............ 48,500 1,227,656
Aspect Telecommunications Corp.* 29,900 624,162
Brooks Fiber Properties, Inc.* .. 6,400 352,000
Worldcom, Inc.* .................. 25,400 768,350
--------------
2,972,168
--------------
TOTAL TECHNOLOGY ................ 22,044,849
--------------
TOTAL COMMON STOCKS (96.3%)
(Cost $110,820,311) ............ 112,396,064
--------------
Principal
Amount
------------
SHORT-TERM DEBT SECURITIES:
U.S. GOVERNMENT AGENCIES (5.6%)
Federal Home Loan Bank
(Discount Note), 1/2/98
(Amortized Cost $6,599,129) .... $6,600,000 6,599,129
--------------
TOTAL INVESTMENTS (101.9%)
(Cost/Amortized Cost
$117,419,440) ................... 118,995,193
OTHER ASSETS
LESS LIABILITIES (-1.9%) ........ (2,240,729)
--------------
NET ASSETS (100%) ................ $116,754,464
==============
</TABLE>
- ------------
* Non-income producing
Glossary:
ADR--American Depositary Receipt
22
<PAGE>
EQ ADVISORS TRUST
MFS RESEARCH PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1997
- -----------------------------------------------------------------------------
At December 31, 1997 the Portfolio had outstanding forward currency contracts
to buy/sell foreign currencies as follows: (Note 1)
<TABLE>
<CAPTION>
LOCAL
CONTRACT COST ON U.S.$
AMOUNT ORIGINATION CURRENT UNREALIZED
(000'S) DATE VALUE APPRECIATION
---------- ------------- ---------- --------------
<S> <C> <C> <C> <C>
FOREIGN CURRENCY SALE CONTRACTS
Japanese Yen, expiring 1/6/98-1/7/98 20,388 $157,114 $156,262 $852
==============
</TABLE>
Investment security transactions for the period from May 1, 1997 to December
31, 1997 were as follows:
<TABLE>
<CAPTION>
<S> <C>
COST OF PURCHASES:
Stocks and long-term corporate debt securities $135,333,845
NET PROCEEDS OF SALES AND REDEMPTIONS:
Stocks and long-term corporate debt securities 24,620,237
</TABLE>
As of December 31, 1997, the gross unrealized appreciation (depreciation) of
investments based on the aggregate cost of investments for Federal income tax
purposes was as follows:
<TABLE>
<CAPTION>
<S> <C>
Aggregate gross unrealized appreciation $ 5,954,527
Aggregate gross unrealized depreciation (4,666,244)
-------------
Net unrealized appreciation.............. $ 1,288,283
=============
Federal income tax cost of investments . $117,706,910
=============
</TABLE>
At December 31, 1997 the Portfolio had loaned securities with a total value
of $20,906,732, which was secured by collateral valued at $21,263,500.
See Notes to Financial Statements.
23
<PAGE>
EQ ADVISORS TRUST
EQ/PUTNAM BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------- ----------- --------------
<S> <C> <C>
COMMON STOCKS:
BASIC MATERIALS (5.3%)
CHEMICALS (2.4%)
Bayer AG (ADR) ................... 2,348 $ 87,754
Dow Chemical Co. ................. 1,400 142,100
E.I. Du Pont de Nemours & Co. .... 4,104 246,497
Eastman Chemical Co. ............. 2,253 134,194
--------------
610,545
--------------
METALS & MINING (0.5%)
Phelps Dodge Corp. ............... 2,200 136,950
--------------
PAPER (2.3%)
Chesapeake Corp................... 1,172 40,288
Kimberly Clark Corp. ............. 4,111 202,724
Temple-Inland, Inc. .............. 2,200 115,087
Weyerhaeuser Co. ................. 5,085 249,483
--------------
607,582
--------------
STEEL (0.1%)
Carpenter Technology Corp......... 293 14,082
--------------
TOTAL BASIC MATERIALS ........... 1,369,159
--------------
BUSINESS SERVICES (2.0%)
ENVIRONMENTAL CONTROL (0.5%)
Browning-Ferris Industries, Inc. 3,464 128,168
--------------
PRINTING, PUBLISHING,
BROADCASTING (0.9%)
Comcast Corp., Class A Special .. 4,220 133,194
McGraw Hill Cos., Inc. ........... 1,594 117,956
--------------
251,150
--------------
PROFESSIONAL SERVICES (0.6%)
Pitney Bowes, Inc................. 1,667 149,926
--------------
TOTAL BUSINESS SERVICES ......... 529,244
--------------
CAPITAL GOODS (5.5%)
AEROSPACE (1.3%)
Boeing Co. ....................... 3,813 186,599
Lockheed Martin Corp. ............ 1,076 105,986
Northrop Grumman Corp. ........... 491 56,465
--------------
349,050
--------------
BUILDING MATERIALS & FOREST
PRODUCTS (0.8%)
Lowe's Cos., Inc. ................ 3,227 153,888
PPG Industries, Inc. ............. 842 48,099
--------------
201,987
--------------
ELECTRICAL EQUIPMENT (2.1%)
Cooper Industries, Inc. .......... 2,648 129,752
Emerson Electric Co. ............. 3,552 200,466
General Electric Co. ............. 1,369 100,450
Siebe plc ........................ 5,500 108,006
--------------
538,674
--------------
MACHINERY (1.3%)
Caterpillar, Inc.................. 3,520 170,940
Deere & Co. ...................... 2,619 152,720
--------------
323,660
--------------
TOTAL CAPITAL GOODS ............. 1,413,371
--------------
<PAGE>
<CAPTION>
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------- ----------- --------------
<S> <C> <C>
CONSUMER CYCLICALS (4.4%)
AIRLINES (0.8%)
Delta Airlines, Inc. ............. 1,662 $ 197,778
--------------
AUTO RELATED (1.2%)
Michelin, Class B (Registered) ... 2,734 137,643
TRW Inc. ......................... 3,032 161,833
--------------
299,476
--------------
AUTOS & TRUCKS (1.1%)
Chrysler Corp. ................... 4,413 155,283
Ford Motor Co. ................... 2,901 141,242
--------------
296,525
--------------
PHOTO & OPTICAL (0.6%)
Eastman Kodak Co. ................ 2,367 143,943
--------------
RETAIL--GENERAL (0.7%)
May Department Stores Co.......... 500 26,344
Toys-R-Us, Inc.* ................. 5,687 178,785
--------------
205,129
--------------
TOTAL CONSUMER CYCLICALS ........ 1,142,851
--------------
CONSUMER NON-CYCLICALS (9.7%)
BEVERAGES (1.7%)
Anheuser-Busch Cos., Inc. ........ 3,427 150,788
PepsiCo, Inc. .................... 3,946 143,782
Whitman Corp. .................... 5,290 137,871
--------------
432,441
--------------
DRUGS (4.0%)
American Home Products Corp. ..... 3,427 262,166
Bristol-Myers Squibb Co. ......... 2,248 212,716
Johnson & Johnson ................ 2,217 146,045
Merck & Co., Inc. ................ 1,955 207,719
Pharmacia & Upjohn, Inc. ......... 5,868 214,916
--------------
1,043,562
--------------
FOODS (1.4%)
Dole Food Co...................... 730 33,397
General Mills, Inc. .............. 2,544 182,214
Quaker Oats Co. .................. 500 26,375
Sara Lee Corp. ................... 1,853 104,347
--------------
346,333
--------------
HOSPITAL SUPPLIES & SERVICES (0.9%)
Baxter International, Inc......... 4,694 236,754
--------------
SOAPS & TOILETRIES (0.6%)
Colgate Palmolive Co. ............ 2,200 161,700
--------------
TOBACCO (1.1%)
Philip Morris Cos., Inc. ......... 6,061 274,639
--------------
TOTAL CONSUMER NON-CYCLICALS .... 2,495,429
--------------
CREDIT SENSITIVE (22.0%)
BANKS (8.7%)
Banc One Corp. ................... 4,500 244,406
BankBoston Corp. ................. 1,174 110,283
Bankers Trust New York Corp. .... 1,076 120,983
Crestar Financial Corp. .......... 920 52,440
First Chicago NBD Corp. .......... 2,583 215,681
First of America Bank Corp. ..... 881 67,947
First Union Corp. ................ 3,325 170,406
24
<PAGE>
EQ ADVISORS TRUST
EQ/PUTNAM BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------- ----------- --------------
Firstar Corp. .................... 881 $ 37,387
Fleet Financial Group, Inc. ..... 2,885 216,195
J.P. Morgan & Co. ................ 1,350 152,381
KeyCorp .......................... 1,037 73,433
Mercantile Bancorp, Inc. ......... 1,200 73,800
Nationsbank Corp. ................ 3,227 196,242
Norwest Corp. .................... 3,227 124,643
PNC Bank Corp. ................... 3,891 222,030
Synovus Financial Corp. .......... 2,344 76,766
Washington Mutual, Inc. .......... 1,500 95,719
--------------
2,250,742
--------------
FINANCIAL SERVICES (0.6%)
Beneficial Corp................... 784 65,170
Fannie Mae ....................... 1,760 100,430
--------------
165,600
--------------
INSURANCE (3.0%)
American General Corp............. 3,625 195,977
Aon Corp. ........................ 2,592 151,956
CIGNA Corp. ...................... 800 138,450
Hartford Financial Services
Group, Inc. ..................... 1,757 164,389
United Healthcare Corp. .......... 2,744 136,342
--------------
787,114
--------------
REAL ESTATE (0.8%)
Duke Realty Investment, Inc. ..... 2,151 52,162
Equity Residential Property
Trust............................ 1,867 94,400
Starwood Lodging Trust ........... 900 52,087
--------------
198,649
--------------
UTILITY--ELECTRIC (2.5%)
Baltimore Gas & Electric Co. ..... 1,174 39,989
Cinergy Corp. .................... 1,174 44,979
Dominion Resources, Inc. ......... 2,144 91,254
Duke Energy Corp. ................ 3,268 180,966
OGE Energy Corp. ................. 1,667 91,164
Potomac Electric Power Co. ...... 2,858 73,772
Southern Co. ..................... 4,622 119,594
--------------
641,718
--------------
UTILITY--GAS (1.0%)
Enron Corp. ...................... 3,400 141,312
Pacific Enterprises .............. 3,188 119,949
--------------
261,261
--------------
UTILITY--TELEPHONE (5.4%)
Ameritech Corp.................... 2,248 180,964
AT&T Corp. ....................... 2,353 144,121
Bell Atlantic Corp. .............. 2,191 199,381
Bellsouth Corp. .................. 3,518 198,108
Cincinnati Bell, Inc. ............ 2,700 83,700
GTE Corp. ........................ 2,700 141,075
SBC Communications, Inc. ......... 3,304 242,018
Sprint Corp. ..................... 3,315 194,342
--------------
1,383,709
--------------
TOTAL CREDIT SENSITIVE .......... 5,688,793
--------------
DIVERSIFIED (1.1%)
MISCELLANEOUS (1.1%)
Fortune Brands, Inc. ............. 3,520 130,460
<PAGE>
<CAPTION>
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------- ----------- --------------
<S> <C> <C>
Minnesota Mining & Manufacturing
Co. ............................. 1,958 $ 160,678
--------------
TOTAL DIVERSIFIED ............... 291,138
--------------
ENERGY (7.4%)
OIL--DOMESTIC (3.3%)
Amoco Corp. ...................... 2,755 234,519
Exxon Corp. ...................... 4,313 263,902
Mobil Corp. ...................... 3,483 251,429
Sonat, Inc. ...................... 2,400 109,800
--------------
859,650
--------------
OIL--INTERNATIONAL (2.3%)
British Petroleum Co. plc (ADR) .. 3,033 241,692
Elf Aquitaine S.A. (ADR) ......... 3,049 178,747
Total S.A. (ADR) ................. 3,129 173,660
--------------
594,099
--------------
OIL--SUPPLIES & CONSTRUCTION (0.2%)
Dresser Industries, Inc. ......... 1,188 49,822
--------------
RAILROADS (1.6%)
Burlington Northern Santa Fe
Corp............................. 1,662 154,462
CSX Corp. ........................ 2,246 121,284
Union Pacific Corp. .............. 2,151 134,303
--------------
410,049
--------------
TOTAL ENERGY .................... 1,913,620
--------------
TECHNOLOGY (3.7%)
ELECTRONICS (1.6%)
Computer Associates
International, Inc. ............. 2,102 111,143
Intel Corp. ...................... 2,153 151,248
Texas Instruments, Inc. .......... 3,685 165,825
--------------
428,216
--------------
OFFICE EQUIPMENT (2.1%)
Hewlett Packard Co. .............. 2,944 184,000
International Business Machines
Corp. ........................... 1,858 194,277
Xerox Corp. ...................... 2,060 152,054
--------------
530,331
--------------
TOTAL TECHNOLOGY ................ 958,547
--------------
TOTAL COMMON STOCKS (61.1%) (Cost
$15,020,127) .................... 15,802,152
--------------
PREFERRED STOCKS:
CREDIT SENSITIVE (0.2%)
FINANCIAL SERVICES (0.2%)
K-Mart Financing.................. 439 22,663
Webster Capital Corp.,
Series A*........................ 40 39,951
--------------
TOTAL PREFERRED STOCKS (0.2%)
(Cost $64,044)................... 62,614
--------------
CONVERTIBLE PREFERRED STOCKS:
BASIC MATERIALS (0.2%)
METALS & MINING (0.2%)
Freeport-McMoran Copper
& Gold, Inc. (Cost $62,112) ..... 2,348 50,922
--------------
</TABLE>
25
<PAGE>
EQ ADVISORS TRUST
EQ/PUTNAM BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- ------------------------------ ----------- -------------
<S> <C> <C>
LONG-TERM DEBT SECURITIES:
BASIC MATERIALS (0.2%)
CHEMICALS (0.2%)
Solutia, Inc. 6.72%, 10/15/37 $ 55,000 $ 55,758
-------------
BUSINESS SERVICES (0.4%)
PRINTING, PUBLISHING,
BROADCASTING (0.4%)
News America Holdings, Inc. ..
7.70%, 10/30/25 .............. 35,000 36,149
7.75%, 12/1/45 ............... 60,000 62,670
-------------
TOTAL BUSINESS SERVICES ..... 98,819
-------------
CAPITAL GOODS (0.3%)
BUILDING MATERIALS & FOREST
PRODUCTS (0.2%)
Noranda, Inc. 8.00%, 6/1/03 .. 40,000 42,432
-------------
ELECTRICAL EQUIPMENT (0.1%)
Raytheon Co. 6.45%, 8/15/02 .. 35,000 35,206
-------------
TOTAL CAPITAL GOODS .......... 77,638
-------------
CONSUMER CYCLICALS (0.7%)
AIRLINES (0.2%)
Continental Airlines, Inc.,
Class 4C 6.80%, 7/2/07 ....... 50,000 50,336
-------------
LEISURE RELATED (0.5%)
Time Warner, Inc.
8.375%, 7/15/33 .............. 110,000 126,287
-------------
TOTAL CONSUMER CYCLICALS .... 176,623
-------------
CONSUMER NON-CYCLICALS (0.2%)
TOBACCO (0.2%)
Philip Morris Cos., Inc.
7.125%, 10/1/04 .............. 10,000 10,347
7.75%, 1/15/27 ............... 50,000 54,430
-------------
TOTAL CONSUMER NON-CYCLICALS 64,777
-------------
CREDIT SENSITIVE (29.4%)
BANKS (1.3%)
Bancomext Trust 8.00%, 8/5/03 . 75,000 72,261
Long Island Savings Bank
7.00%, 6/13/02................ 60,000 61,487
Merita Bank Ltd. 6.50%,
1/15/06 ...................... 65,000 64,559
Nationsbank Corp. 6.50%,
8/15/03 ...................... 65,000 65,655
Peoples Bank of Bridgeport
(Conn.) 7.20%, 12/1/06........ 50,000 51,047
Societe Generale Paris 7.85%,
4/29/49 +[section] (e)........ 15,000 16,287
-------------
331,296
-------------
COLLATERALIZED MORTGAGE
OBLIGATIONS (0.8%)
Commercial Mortgage Acceptance
Corp.
Series 97-ML1, Class A2,
6.53%, 12/15/30.............. 20,000 20,175
Series 97-ML1, Class A3,
6.57%, 12/15/30.............. 50,000 50,422
<PAGE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- ------------------------------- ------------ ------------
<S> <C> <C>
Series 97-MLI, Class D,
7.0576%, 12/15/10 ........... $ 15,000 $ 15,019
Federal Home Loan Mortgage
Corp., Series 25, Class B,
6.50%, 12/25/08 .............. 20,000 19,992
First Union-Lehman Brothers
Series 97-C2, Class D,
7.12%, 11/18/12
(Pass Through)............... 30,000 29,883
Series 97-C2, Class A3,
6.65%, 6/18/08
(Pass Through)............... 30,000 30,272
General Motors Acceptance
Corp., Series 97-C2, Class
A1, 6.45%, 4/15/29............ 30,000 30,042
-------------
195,805
-------------
FINANCIAL SERVICES (1.0%)
Commercial Credit Corp.
7.75%, 3/1/05................. 25,000 26,740
Lehman Brothers Holdings, Inc.
6.625%, 11/15/00.............. 70,000 70,577
6.50%, 10/1/02................ 85,000 85,203
Pindo Deli Fin Mauritius
10.75%, 10/1/07 +[section] ... 7,000 5,985
The Money Store, Inc.
8.05%, 4/15/02................ 65,000 67,342
-------------
255,847
-------------
FOREIGN GOVERNMENT (3.9%)
Central Bank of the
Philippines, Series B, FL,
6.50%, 12/1/17................ 50,000 40,182
Government of France
6.75%, 10/25/03............... FRF 276,000 50,183
5.50%, 10/25/07............... 1,400,000 235,689
Government of New Zealand
8.00%, 4/15/04................ NZD 78,000 47,181
Government of Russia PO,
0.00%, 12/15/20 TBA .......... $ 15,000 9,300
Province of Quebec
7.50%, 7/15/02 TBA ........... 50,000 52,447
Republic of Argentina FL,
5.6875%, 4/1/01 .............. 95,000 93,100
Republic of Germany,
Series 97
6.50%, 7/4/27................. DEM 315,000 188,851
Republic of Peru FL, PDI
4.00%, 3/7/17................. $182,000 118,935
Republic of Poland FL, PDI
4.00%, 10/27/14 (e)........... 57,000 49,333
Republic of South Africa
13.00%, 8/31/10............... ZAR 567,000 110,989
-------------
996,190
-------------
GENERAL OBLIGATIONS (0.3%)
New Jersey Economic
Development Authority,
Series A 7.425%, 2/15/29 .... $ 65,000 72,184
-------------
INSURANCE (0.6%)
American General Finance Corp.
5.70%, 2/7/01................. 50,000 49,431
</TABLE>
26
<PAGE>
EQ ADVISORS TRUST
EQ/PUTNAM BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- --------------------------------- ----------- -------------
<S> <C> <C>
American General Institutional
Capital Corp., Class B
8.125%, 3/15/46 +Section .... $ 15,000 $ 16,639
Southern Investments Capital
Trust 6.80%, 12/1/06.......... 50,000 50,494
Travelers Property & Casualty,
Inc. 6.75%, 4/15/01........... 50,000 50,875
-------------
167,439
-------------
REAL ESTATE (0.5%)
Avalon Properties, Inc.
6.875%, 12/15/07.............. 25,000 25,055
Chelsea GCA Realty Properties
7.25%, 10/21/07............... 50,000 50,537
Omega Healthcare Investors,
Inc. 6.95%, 8/1/07............ 50,000 49,832
-------------
125,424
-------------
U.S. GOVERNMENT (12.3%)
U.S. Treasury Bond 6.375%,
8/15/27....................... 585,000 616,992
U.S. Treasury Note
5.625%, 10/31/99.............. 260,000 259,756
5.625%, 11/30/99.............. 230,000 229,856
6.25%, 6/30/02................ 105,000 107,166
6.00%, 7/31/02................ 119,000 120,302
6.25%, 8/31/02 ............... 1,150,000 1,174,079
5.875%, 9/30/02............... 10,000 10,063
5.75%, 10/31/02............... 265,000 265,414
5.75%, 11/30/02............... 100,000 100,125
7.00%, 7/15/06................ 100,000 108,000
6.625%, 5/15/07............... 90,000 95,316
6.125%, 8/15/07............... 85,000 87,391
-------------
3,174,460
-------------
U.S. GOVERNMENT AGENCIES (7.0%)
Federal Home Loan Mortgage
Corp. 8.50%, 6/1/27 .......... 35,350 36,974
Federal National Mortgage
Corp.
7.00%, 10/1/12 ............... 44,551 45,303
7.00%, 11/1/12 ............... 64,350 65,437
9.00%, 8/1/26 ................ 355,877 378,564
Government National Mortgage
Association
7.125%, 4/20/23 ARM .......... 23,546 24,284
5.50%, 7/20/23 ARM ........... 24,603 25,262
7.125%, 8/20/23 ARM........... 46,941 48,198
7.375%, 5/20/24 ARM .......... 23,018 23,729
6.00%, 9/20/24 ARM ........... 45,902 47,103
7.00%, 9/15/25 ............... 74,251 74,970
7.00%, 12/15/25 .............. 68,300 68,961
7.50%, 12/15/26 .............. 144,326 148,113
7.00%, 7/15/27 ............... 54,852 55,367
8.50%, 7/15/27 ............... 53,752 56,524
5.50%, 10/10/27 ARM .......... 32,661 32,662
7.50%, 10/15/27 .............. 146,227 150,039
7.00%, 11/15/27 .............. 200,704 202,589
5.50%, 2/16/28 ARM, TBA ...... 295,000 295,460
5.50%, 3/15/28 ARM, TBA ...... 45,000 45,070
-------------
1,824,609
-------------
<PAGE>
<CAPTION>
PRINCIPAL VLAUE
AMOUNT (NOTE 1)
- -------------------------------- ------------- -------------
<S> <C> <C>
UTILITY--ELECTRIC (1.6%)
Arizona Public Service Co.
6.75%, 11/15/06 .............. $ 50,000 $ 50,139
Baltimore Gas & Electric Co.
6.90%, 2/1/05 ................ 50,000 51,500
CalEnergy Co., Inc. 7.63%,
10/15/07 ..................... 40,000 40,369
Illinova Corp. 7.125%, 2/1/04 70,000 71,554
Public Service Electric & Gas
Co. 8.875%, 6/1/03 ........... 50,000 55,551
Texas Utilities Co. 8.25%,
4/1/04 ....................... 50,000 54,588
Transamerica Energy 0.00%,
6/15/02 (d) +Section ......... 115,000 92,575
-------------
416,276
-------------
UTILITY--TELEPHONE (0.1%)
U.S. West Capital Funding,
Inc. 6.95%, 1/15/37 .......... 35,000 36,302
-------------
TOTAL CREDIT SENSITIVE ...... 7,595,832
-------------
ENERGY (0.7%)
COAL & GAS PIPELINES (0.2%)
Columbia Gas Systems, Inc.
6.61%, 11/28/02 .............. 65,000 65,889
-------------
OIL--DOMESTIC (0.1%)
Seagull Energy Corp. 7.50%,
9/15/27 ...................... 20,000 20,196
-------------
OIL--INTERNATIONAL (0.1%)
Saga Petroleum ASA 7.25%,
9/23/27 ...................... 15,000 15,301
-------------
RAILROADS (0.3%)
Norfolk Southern Corp. 7.80%,
5/15/27 ...................... 70,000 79,211
-------------
TOTAL ENERGY ................. 180,597
-------------
TECHNOLOGY (0.7%)
TELECOMMUNICATIONS (0.7%)
Cia Telecom Chile 7.625%,
7/15/06 ...................... 25,000 26,516
Colt Telecom Group plc 8.875%,
11/30/07 ..................... DEM 50,000 27,794
LCI International, Inc. 7.25%,
6/15/07 ...................... $ 60,000 62,200
Worldcom, Inc. 7.75%, 4/1/07 . 60,000 64,379
-------------
TOTAL TECHNOLOGY ............. 180,889
-------------
TOTAL LONG-TERM DEBT SECURITIES (32.6%)
(Cost $8,357,325) ............ 8,430,933
-------------
SHORT-TERM DEBT SECURITIES:
REPURCHASE AGREEMENT (6.3%)
J.P. Morgan Securities, Inc.
6.25%, dated 12/31/97, due
1/2/98, to be repurchased at
$1,625,564, collateralized by
$1,216,000 of U.S. Treasury
Notes, 8.875% due 2/15/19,
valued at $1,661,216 @........ 1,625,000 1,625,000
-------------
U.S. GOVERNMENT AGENCIES (3.9%)
Federal Home Loan Mortgage
Corp. (Discount Note),
1/14/98 ...................... 1,000,000 997,917
-------------
</TABLE>
27
<PAGE>
EQ ADVISORS TRUST
EQ/PUTNAM BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
<TABLE>
<CAPTION>
VALUE
(NOTE 1)
- ----------------------------- -------------
<S> <C>
TOTAL SHORT-TERM DEBT
SECURITIES (10.2%)
(Cost/Amortized Cost
$2,622,917) .............. $ 2,622,917
-------------
TOTAL INVESTMENTS (104.3%)
(Cost/Amortized Cost
$26,126,525) ............. 26,969,538
OTHER ASSETS
LESS LIABILITIES (-4.3%) (1,115,950)
-------------
NET ASSETS (100%) ......... $25,853,588
=============
</TABLE>
- ------------
* Non-income producing
+ Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may only be resold to qualified
institutional buyers. At December 31, 1997 these securities amounted
to $131,486 or 0.51% of net assets.
[section] Illiquid security: is not actively traded.
@ A portion of this security is pledged to cover delayed delivery
securities.
(d) Debt security initially issued in zero coupon form which converts to
coupon form at a specific rate and date.
(e) Coupon will increase periodically based upon a predetermined
schedule. Stated interest rate in effect at December 31, 1997.
Glossary:
ADR--American Depositary Receipt
ARM--Adjustable Rate Mortgage
FL--Floating Rate
PDI--Past Due Interest Bond
PO--Principal Only
TBA--Security is subject to delayed delivery
DEM--German Mark
FRF--French Franc
NZD--New Zealand Dollar
ZAR--South African Rand
28
<PAGE>
EQ ADVISORS TRUST
EQ/PUTNAM BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1997
- -----------------------------------------------------------------------------
At December 31, 1997 the Portfolio had outstanding forward currency contracts
to buy/sell foreign currencies as follows: (Note 1)
<TABLE>
<CAPTION>
LOCAL
CONTRACT COST ON U.S.$ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION/
(000'S) DATE VALUE (DEPRECIATION)
---------- ------------- --------- ---------------
<S> <C> <C> <C> <C>
FOREIGN CURRENCY BUY CONTRACTS
British Pound, expiring 1/8/98 .............. 6 $ 9,985 $ 9,929 $ (56)
German Mark, expiring 3/18/98 ............... 408 229,787 227,649 (2,138)
Indonesian Rupiah, expiring 2/23/98-6/23/98 172,217 48,647 30,231 (18,416)
Italian Lira, expiring 3/18/98 .............. 77,614 44,293 43,862 (431)
Japanese Yen, expiring 3/18/98 .............. 13,717 107,511 106,336 (1,175)
Mexican Peso, expiring 5/11/98-6/5/98 ...... 237 26,674 29,454 2,780
New Zealand Dollar, expiring 3/18/98 ....... 88 52,427 50,961 (1,466)
Philippine Peso, expiring 3/25/98 ........... 210 6,006 5,197 (809)
Polish Zlotey, expiring 6/5/98 .............. 58 15,854 15,261 (593)
Swiss Franc, expiring 3/18/98 ............... 36 25,151 24,524 (627)
Venezuelan Bolivar, expiring 1/7/98-6/19/98 6,473 12,054 12,835 781
FOREIGN CURRENCY SALE CONTRACTS
British Pound, expiring 6/5/98 .............. 1 1,571 1,631 (60)
French Franc, expiring 3/18/98 .............. 1,723 291,274 287,608 3,666
German Mark, expiring 3/18/98-6/5/98 ....... 777 440,238 433,648 6,590
Indonesian Rupiah, expiring 2/23/98 ........ 64,988 17,620 11,616 6,004
Italian Lira, expiring 3/18/98 .............. 79,000 45,080 44,646 434
Japanese Yen, expiring 3/18/98 .............. 16,839 132,100 130,541 1,559
Mexican Peso, expiring 6/5/98 ............... 174 19,734 21,563 (1,829)
New Zealand Dollar, expiring 3/18/98 ....... 174 105,289 100,480 4,809
Polish Zlotey, expiring 6/5/98 .............. 29 7,655 8,241 (586)
South African Rand, expiring 3/18/98 ....... 445 89,108 89,732 (624)
Swiss Franc, expiring 3/18/98 ............... 36 25,460 24,869 591
---------------
$ (1,596)
===============
</TABLE>
Transactions in options written for the period from May 1, 1997 to December
31, 1997 are summarized as follows: (Note 1)
<TABLE>
<CAPTION>
NUMBER OF PREMIUMS
CONTRACTS (A) RECEIVED
---------------- ------------
<S> <C> <C>
Options outstanding--May 1, 1997 .......... -- --
Options written ........................... JPY 36,000 $ 553
Options closed ............................ JPY (36,000) (553)
---------------- ------------
Options outstanding--December 31, 1997 ... -- --
================ ============
</TABLE>
Investment security transactions for the period from May 1, 1997 to December
31, 1997 were as follows:
<TABLE>
<CAPTION>
<S> <C>
COST OF PURCHASES:
Stocks and long-term corporate debt securities $25,854,863
U.S. Government securities ..................... 11,869,171
NET PROCEEDS OF SALES AND REDEMPTIONS:
Stocks and long-term corporate debt securities 7,224,059
U.S. Government securities ..................... 7,245,074
</TABLE>
As of December 31, 1997, the gross unrealized appreciation (depreciation) of
investments based on the aggregate cost of investments for Federal income tax
purposes was as follows:
<TABLE>
<CAPTION>
<S> <C>
Aggregate gross unrealized appreciation $ 1,093,483
Aggregate gross unrealized depreciation (261,488)
------------
Net unrealized appreciation.............. $ 831,995
============
Federal income tax cost of investments . $26,137,543
============
</TABLE>
<PAGE>
At December 31, 1997 the Portfolio had loaned securities with a total value
of $4,422,477, which was secured by collateral valued at $4,490,790, of which
$1,018,813 was in the form of U.S. Government securities.
For the period from May 1, 1997 to December 31, 1997 the Portfolio incurred
approximately $75 as brokerage commissions with EQ Financial Consultants,
Inc., an affiliated broker/dealer.
- ------------
(a) One contract relates to 100 units.
See Notes to Financial Statements.
29
<PAGE>
EQ ADVISORS TRUST
EQ/PUTNAM GROWTH & INCOME VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------- ----------- -------------
<S> <C> <C>
COMMON STOCKS:
BASIC MATERIALS (5.5%)
CHEMICALS (2.4%)
Eastman Chemical Co. ............. 21,021 $ 1,252,063
E.I. Du Pont de Nemours & Co. .... 21,651 1,300,413
Witco Corp. ...................... 27,625 1,127,446
-------------
3,679,922
-------------
PAPER (3.1%)
Boise Cascade Corp. .............. 36,595 1,106,998
Kimberly Clark Corp. ............. 44,701 2,204,318
Temple-Inland, Inc. .............. 8,524 445,912
Willamette Industries, Inc. ..... 28,310 911,228
-------------
4,668,456
-------------
TOTAL BASIC MATERIALS ........... 8,348,378
-------------
BUSINESS SERVICES (3.6%)
ENVIRONMENTAL CONTROL (0.9%)
Browning-Ferris Industries, Inc. 36,940 1,366,780
-------------
PRINTING, PUBLISHING,
BROADCASTING (1.1%)
McGraw Hill Cos., Inc. ........... 15,628 1,156,472
Times Mirror Co., Class A ........ 8,600 528,900
-------------
1,685,372
-------------
PROFESSIONAL SERVICES (1.6%)
NCR Corp.* ....................... 30,513 848,643
Pitney Bowes, Inc. ............... 16,500 1,483,969
-------------
2,332,612
-------------
TOTAL BUSINESS SERVICES ......... 5,384,764
-------------
CAPITAL GOODS (8.6%)
AEROSPACE (2.4%)
Boeing Co. ....................... 33,920 1,659,960
General Motors Corp., Class H ... 19,269 711,749
Northrop Grumman Corp. ........... 10,290 1,183,350
-------------
3,555,059
-------------
BUILDING MATERIALS & FOREST
PRODUCTS (1.5%)
Lowe's Cos., Inc. ................ 29,857 1,423,806
Masco Corp. ...................... 16,875 858,515
-------------
2,282,321
-------------
ELECTRICAL EQUIPMENT (2.1%)
Cooper Industries, Inc. .......... 25,676 1,258,124
Emerson Electric Co. ............. 25,105 1,416,863
Raytheon Co., Class A ............ 11,368 560,593
-------------
3,235,580
-------------
MACHINERY (2.6%)
Caterpillar, Inc. ................ 23,900 1,160,644
Deere & Co. ...................... 16,980 990,146
Tenneco, Inc. .................... 42,653 1,684,794
-------------
3,835,584
-------------
TOTAL CAPITAL GOODS ............. 12,908,544
-------------
CONSUMER CYCLICALS (10.2%)
AIRLINES (0.9%)
Delta Airlines, Inc. ............. 11,048 1,314,712
-------------
AUTO RELATED (3.9%)
Dana Corp. ....................... 35,232 1,673,520
Eaton Corp. ...................... 11,792 1,052,436
<PAGE>
<CAPTION>
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------- ----------- -------------
<S> <C> <C>
Goodyear Tire & Rubber Co. ...... 30,228 $ 1,923,257
TRW Inc. ......................... 23,420 1,250,042
-------------
5,899,255
-------------
AUTOS & TRUCKS (0.5%)
Chrysler Corp. ................... 20,330 715,362
-------------
FOOD SERVICES, LODGING (0.7%)
ITT Corp. (New)* ................. 13,700 1,135,387
-------------
PHOTO & OPTICAL (2.2%)
Eastman Kodak Co. ................ 28,653 1,742,461
Polaroid Corp. ................... 31,612 1,539,109
-------------
3,281,570
-------------
RETAIL--GENERAL (2.0%)
J.C. Penny Co. ................... 1,000 60,313
K-Mart Corp.* .................... 108,900 1,259,156
Toys-R-Us, Inc.* ................. 52,355 1,645,910
-------------
2,965,379
-------------
TOTAL CONSUMER CYCLICALS ........ 15,311,665
-------------
CONSUMER NON-CYCLICALS (20.1%)
BEVERAGES (1.7%)
PepsiCo, Inc. .................... 38,335 1,396,832
Whitman Corp. .................... 42,357 1,103,929
-------------
CONTAINERS (1.4%) 2,500,761
-------------
Owens Illinois, Inc.* ............ 55,845 2,118,620
-------------
DRUGS (8.1%)
American Home Products Corp. .... 26,414 2,020,671
Bristol-Myers Squibb Co. ......... 23,165 2,191,987
Glaxo Wellcome plc (ADR) ......... 15,685 750,919
Johnson & Johnson ................ 26,240 1,728,560
Merck & Co., Inc. ................ 24,050 2,555,313
Pharmacia & Upjohn, Inc. ......... 79,974 2,929,048
-------------
12,176,498
-------------
FOODS (4.9%)
General Mills, Inc. .............. 27,510 1,970,404
H.J. Heinz Co. ................... 28,780 1,462,384
Quaker Oats Co. .................. 30,280 1,597,270
Ralston Purina Group ............. 9,970 926,587
Sara Lee Corp. ................... 23,686 1,333,817
-------------
7,290,462
-------------
HOSPITAL SUPPLIES & SERVICES (1.3%)
Baxter International, Inc. ...... 39,204 1,977,352
-------------
SOAPS & TOILETRIES (0.7%)
Clorox Co. ....................... 11,210 886,291
Colgate Palmolive Co. ............ 2,400 176,400
-------------
1,062,691
-------------
TOBACCO (2.0%)
Philip Morris Cos., Inc. ......... 43,050 1,950,703
RJR Nabisco Holdings Corp. ...... 29,744 1,115,400
-------------
3,066,103
-------------
TOTAL CONSUMER NON-CYCLICALS .... 30,192,487
-------------
CREDIT SENSITIVE (21.3%)
BANKS (10.8%)
Banc One Corp. ................... 22,866 1,241,910
BankBoston Corp. ................. 8,300 779,681
Bankers Trust New York Corp. .... 12,954 1,456,515
Crestar Financial Corp. .......... 800 45,600
</TABLE>
30
<PAGE>
EQ ADVISORS TRUST
EQ/PUTNAM GROWTH & INCOME VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
<TABLE>
<CAPTION>
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------- ----------- -------------
<S> <C> <C>
First Chicago NBD Corp. .......... 14,865 $ 1,241,228
First Tennessee National Corp. .. 6,990 466,582
J.P. Morgan & Co. ................ 12,858 1,451,346
Mercantile Bancorp, Inc. ......... 12,333 758,480
National City Corp. .............. 10,935 718,976
PNC Bank Corp. ................... 56,742 3,237,840
Regions Financial Corp. .......... 15,002 632,897
Summit Bancorp ................... 14,010 746,033
SunTrust Banks, Inc. ............. 8,540 609,543
Union Planters Corp. ............. 13,324 905,199
Washington Mutual, Inc. .......... 10,540 672,584
Wells Fargo & Co. ................ 3,700 1,255,919
-------------
16,220,333
-------------
FINANCIAL SERVICES (0.6%)
Beneficial Corp. ................. 10,104 839,895
-------------
INSURANCE (2.9%)
American General Corp. ........... 29,619 1,601,277
Aon Corp. ........................ 26,081 1,528,999
CIGNA Corp. ...................... 7,526 1,302,468
-------------
4,432,744
-------------
UTILITY--GAS (0.3%)
Enron Corp. ...................... 12,300 511,219
-------------
UTILITY--TELEPHONE (6.7%)
AT&T Corp. ....................... 22,793 1,396,071
Bell Atlantic Corp. .............. 17,950 1,633,450
Bellsouth Corp. .................. 31,097 1,751,150
SBC Communications, Inc. ......... 23,900 1,750,675
Sprint Corp. ..................... 34,052 1,996,299
U.S. West Communications Group .. 33,143 1,495,578
-------------
10,023,223
-------------
TOTAL CREDIT SENSITIVE .......... 32,027,414
-------------
DIVERSIFIED (0.9%)
MISCELLANEOUS (0.9%)
Minnesota Mining & Manufacturing
Co. ............................. 15,755 1,292,895
-------------
ENERGY (11.3%)
OIL--DOMESTIC (7.0%)
Amoco Corp. ...................... 18,794 1,599,839
Atlantic Richfield Co. ........... 18,672 1,496,094
Coastal Corp...................... 18,706 1,158,603
Exxon Corp........................ 22,386 1,369,744
Kerr-McGee Corp. ................. 12,050 762,916
Mobil Corp........................ 19,564 1,412,276
Occidental Petroleum Corp......... 40,822 1,196,595
Tosco Corp. ...................... 39,460 1,492,081
-------------
10,488,148
-------------
OIL--INTERNATIONAL (2.7%)
British Petroleum Co. plc (ADR) .. 16,373 1,304,723
Elf Aquitaine S.A. (ADR).......... 35,661 2,090,626
YPF S.A., Class D (ADR)........... 19,000 649,563
-------------
4,044,912
-------------
<PAGE>
<CAPTION>
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------- ----------- --------------
<S> <C> <C>
RAILROADS (1.6%)
Canadian National Railway Co. ... 15,745 $ 743,951
Norfolk Southern Corp............. 303 9,336
Union Pacific Corp................ 27,890 1,741,382
-------------
2,494,669
-------------
TOTAL ENERGY..................... 17,027,729
-------------
TECHNOLOGY (9.9%)
ELECTRONICS (4.5%)
Computer Associates
International, Inc. ............. 40,120 2,121,345
Intel Corp........................ 30,908 2,171,286
Seagate Technology, Inc.*......... 32,280 621,390
Texas Instruments, Inc. .......... 40,060 1,802,700
-------------
6,716,721
-------------
OFFICE EQUIPMENT (5.4%)
Hewlett Packard Co. .............. 39,153 2,447,062
International Business Machines
Corp. ........................... 23,585 2,466,107
Xerox Corp........................ 43,242 3,191,800
-------------
8,104,969
-------------
TOTAL TECHNOLOGY................. 14,821,690
-------------
TOTAL COMMON STOCKS (91.4%) (Cost
$134,500,653).................... 137,315,566
-------------
PRINCIPAL
AMOUNT
--------------
SHORT-TERM DEBT SECURITIES:
REPURCHASE AGREEMENT (7.3%)
SBC Warburg, Inc. 6.25%, dated
12/31/97, due 1/2/98,
to be repurchased at
$10,948,800, collateralized
by $6,956,000 of U.S.
Treasury Notes, 11.25% due
2/15/15, valued at
$11,161,163 .................. $10,945,000 10,945,000
-------------
U.S. GOVERNMENT AGENCIES (3.3%)
Federal Home Loan Mortgage
Corp.
(Discount Note), 1/9/98 ...... 1,000,000 998,726
(Discount Note), 1/14/98 ..... 2,000,000 1,995,833
(Discount Note), 1/26/98 ..... 2,000,000 1,992,014
-------------
TOTAL U.S. GOVERNMENT
AGENCIES..................... 4,986,573
-------------
TOTAL SHORT-TERM DEBT SECURITIES (10.6%)
(Cost/Amortized Cost
$15,931,573).................. 15,931,573
-------------
TOTAL INVESTMENTS (102.0%)
(Cost/Amortized Cost
$150,432,226)................. 153,247,139
OTHER ASSETS
LESS LIABILITIES (-2.0%) .... (2,987,417)
-------------
NET ASSETS (100%).............. $150,259,722
=============
</TABLE>
- ------------
* Non-income producing
Glossary:
ADR--American Depositary Receipt
31
<PAGE>
EQ ADVISORS TRUST
EQ/PUTNAM GROWTH & INCOME VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1997
- -----------------------------------------------------------------------------
Investment security transactions for the period from May 1, 1997 to December
31, 1997 were as follows:
<TABLE>
<CAPTION>
<S> <C>
COST OF PURCHASES:
Stocks and long-term corporate debt securities . $169,567,918
NET PROCEEDS OF SALES AND REDEMPTIONS:
Stocks and long-term corporate debt securities 35,224,300
</TABLE>
As of December 31, 1997, the gross unrealized appreciation (depreciation) of
investments based on the aggregate cost of investments for Federal income tax
purposes was as follows:
<TABLE>
<CAPTION>
<S> <C>
Aggregate gross unrealized
appreciation........................... $ 6,344,288
Aggregate gross unrealized
depreciation........................... (3,693,680)
-------------
Net unrealized appreciation............. $ 2,650,608
=============
Federal income tax cost of investments . $150,596,531
=============
</TABLE>
At December 31, 1997 the Portfolio had loaned securities with a total value
of $30,000,578, which was secured by collateral valued at $30,424,707, of
which $2,860,300 was in the form of U.S. Government securities.
For the period from May 1, 1997 to December 31, 1997 the Portfolio incurred
approximately $363 as brokerage commissions with EQ Financial Consultants,
Inc., an affiliated broker/dealer.
See Notes to Financial Statements.
32
<PAGE>
EQ ADVISORS TRUST
EQ/PUTNAM INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------- ----------- ------------
<S> <C> <C>
COMMON STOCKS:
AUSTRALIA & NEW ZEALAND (1.7%)
AUSTRALIA (1.7%)
Australia & New Zealand Banking
Group Ltd. ..................... 71,772 $ 474,104
QBE Insurance Group Ltd. ........ 113,043 508,642
------------
TOTAL AUSTRALIA &
NEW ZEALAND ................... 982,746
------------
CANADA (7.6%)
Bank of Nova Scotia ............. 17,717 834,755
Bombardier, Inc., Class B ...... 29,400 604,680
Cae, Inc. ....................... 24,724 193,717
Magna International, Inc.,
Class A ........................ 8,246 517,952
National Bank of Canada ......... 40,078 661,682
Newbridge Networks Corp.* ...... 10,310 360,989
Northern Telecom Ltd. ........... 8,386 745,937
Royal Bank of Canada ............ 8,778 464,246
------------
TOTAL CANADA ................... 4,383,958
------------
JAPAN (9.1%)
Canon, Inc ...................... 24,000 559,189
Circle K Japan Co., Ltd. ........ 5,300 253,880
Hirose Electric ................. 1,600 81,793
Kao Corp. ....................... 33,000 475,494
Murata Manufacturing Co., Ltd. . 9,000 226,250
Nikko Securities Co., Ltd. ..... 103,000 273,140
Nomura Securities Co. ........... 35,000 466,756
Promise Co., Ltd. ............... 8,320 461,673
Ricoh Co., Ltd. ................. 18,000 223,491
Rohm Co. ........................ 5,000 509,676
Sankyo Co. ...................... 13,000 293,926
Sony Corp. ...................... 11,400 1,013,527
Tokyo Electron Ltd. ............. 13,000 416,478
------------
TOTAL JAPAN .................... 5,255,273
------------
LATIN AMERICA (1.3%)
BRAZIL (0.4%)
Petrobras S.A. (ADR) ............ 4,100 95,885
Petrobras S.A. (ADR)* +Section . 5,300 125,213
------------
221,098
------------
MEXICO (0.9%)
Cemex S.A. CPO* ................. 110,676 502,573
------------
TOTAL LATIN AMERICA ............ 723,671
------------
OTHER EUROPEAN COUNTRIES (40.6%)
FRANCE (14.1%)
Banque Nationale de Paris ...... 11,284 599,776
Cetelem ......................... 2,629 358,192
Cie Generale des Eaux ........... 7,416 1,035,049
Elf Aquitaine S.A. .............. 8,627 1,003,390
Lafarge S.A. .................... 10,612 696,300
Michelin, Class B (Registered) . 16,098 810,450
Scor ............................ 18,784 898,236
SGS-Thomson Microelectronics
N.V.* .......................... 11,726 716,019
Societe Generale Paris .......... 6,238 849,906
Television Francaise ............ 3,234 330,466
Total S.A., Class B ............. 7,821 851,168
------------
8,148,952
------------
<PAGE>
<CAPTION>
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------- ---------- -------------
<S> <C> <C>
GERMANY (6.3%)
Altana AG ....................... 2,108 $ 139,092
Bayer AG ........................ 15,109 560,619
Bayerische Motoren Werek (BMW)
AG ............................. 1,167 872,517
Deutsche Bank AG ................ 10,116 707,409
Deutsche Telekom AG ............. 22,872 423,379
Mannesmann AG ................... 1,350 677,645
Veba AG ......................... 3,339 227,370
------------
3,608,031
------------
IRELAND (3.6%)
Allied Irish Banks plc .......... 69,165 654,412
Bank of Ireland ................. 43,881 675,534
CRH plc ......................... 62,137 726,718
------------
2,056,664
------------
ITALY (1.2%)
ENI S.p.A. (Registered) ......... 125,660 712,476
------------
NETHERLANDS (5.2%)
ABN-Amro Holdings N.V. .......... 21,978 428,146
Akzo Nobel N.V. ................. 3,928 677,251
ING Groep N.V. .................. 19,506 821,548
Philips Electronics N.V. ........ 14,195 851,288
Vendex International N.V. ...... 3,886 214,457
------------
2,992,690
------------
POLAND (0.0%)
Bank Handlowy (GDS)* +Section .. 600 7,800
------------
PORTUGAL (2.0%)
Banco Totta & Acores S.A., Class
B .............................. 10,700 210,105
Electricidade de Portugal S.A.* 29,327 555,309
Portugal Telecom S.A. ........... 8,480 393,476
------------
1,158,890
------------
SWITZERLAND (8.2%)
ABB AG (Bearer) ................. 87 109,308
CIBA Spezialitaten Chemicals AG* 4,933 587,704
Fischer (Georg) AG (Bearer) .... 320 438,206
Julius Baer Holding AG (Bearer) . 201 372,961
Nestle S.A. (Registered) ........ 723 1,083,634
Novartis AG (Registered) ........ 419 679,925
Union Bank of Switzerland
(Bearer) ....................... 827 1,195,908
Zurich
Versicherungs-Gesellschaft
(Registered) ................... 595 283,547
------------
4,751,193
------------
TOTAL OTHER EUROPEAN COUNTRIES 23,436,696
------------
SCANDINAVIA (3.4%)
FINLAND (0.3%)
Nokia AB ........................ 2,724 193,395
------------
SWEDEN (3.1)
Astra AB, Class A ............... 14,759 255,590
Ericsson LM, Class B ............ 20,499 770,659
Pharmacia & Upjohn, Inc. ........ 9,390 345,329
Sandvik AB, Class B ............. 13,723 392,338
------------
1,763,916
------------
TOTAL SCANDINAVIA .............. 1,957,311
------------
33
<PAGE>
EQ ADVISORS TRUST
EQ/PUTNAM INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------- ----------- ------------
SOUTHEAST ASIA (4.8%)
HONG KONG (2.1%)
Dao Heng Bank Group Ltd. ........ 54,000 $ 134,843
Guoco Group Ltd. ................ 19,000 46,464
HSBC Holdings plc (Registered) .. 18,800 463,389
Hutchison Whampoa Ltd. .......... 93,000 583,276
------------
1,227,972
------------
PHILIPPINES (0.0%)
Philippines Long Distance
Telephone Co. .................. 400 8,691
------------
SINGAPORE (2.7%)
DBS Land Ltd. ................... 132,000 202,533
Development Bank of Singapore
(Foreign) ...................... 29,000 248,350
Keppel Land Ltd. ................ 79,000 108,998
Overseas Union Bank Ltd.
(Foreign) ...................... 98,000 375,914
Overseas-Chinese Banking Corp.
(Foreign) ...................... 53,000 308,891
United Overseas Bank Ltd.
(Foreign) ...................... 51,000 283,586
------------
1,528,272
------------
TOTAL SOUTHEAST ASIA ........... 2,764,935
------------
UNITED KINGDOM (18.5%)
Avis Europe plc ................. 181,839 519,942
Bass plc ........................ 41,983 651,619
B.A.T. Industries plc ........... 95,009 864,953
British Petroleum Co. plc........ 47,505 624,521
BTR plc ......................... 179,624 543,125
Burmah Castrol plc .............. 25,949 452,006
Cookson Group plc ............... 32,379 104,821
Dixons Group plc ................ 30,233 303,557
General Electric Co., plc ...... 75,792 491,347
Glaxo Wellcome plc .............. 34,726 821,742
Penninsular & Oriental Steam
Navigation Co. ................. 22,678 258,073
Rio Tinto plc (Registered) ...... 44,389 546,355
Rolls-Royce plc ................. 167,839 648,155
Securicor plc ................... 58,526 274,583
Shell Transport &
Trading Co., plc (Registered) . 111,825 808,555
Siebe plc ....................... 7,800 153,172
Smiths Industries plc ........... 39,442 549,633
Tomkins plc ..................... 63,170 302,080
Unilever plc .................... 55,759 477,387
Vodafone Group plc .............. 173,779 1,253,660
------------
TOTAL UNITED KINGDOM ........... 10,649,286
------------
TOTAL COMMON STOCKS (87.0%)
(Cost $50,330,423) ............. 50,153,876
------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- --------------------------------- ------------ ------------
<S> <C> <C>
SHORT-TERM DEBT SECURITIES:
REPURCHASE AGREEMENT (7.6%)
Chase Securities, Inc. 6.25%,
dated 12/31/97, due 1/2/98, to
be repurchased at $4,417,533,
collateralized by $3,303,000 of
U.S. Treasury Notes, 8.875% due
2/15/19, valued at $4,512,332 .. $4,416,000 $ 4,416,000
------------
U.S. GOVERNMENT AGENCIES (5.2%)
Federal Home Loan Mortgage Corp.
(Discount Note), 1/14/98 ........ 1,000,000 997,916
(Discount Note), 1/26/98 ........ 2,000,000 1,992,014
------------
TOTAL U.S. GOVERNMENT AGENCIES . 2,989,930
------------
TOTAL SHORT-TERM DEBT SECURITIES (12.8%)
(Cost/Amortized Cost $7,405,930)
7,405,930
------------
TOTAL INVESTMENTS (99.8%)
(Cost/Amortized Cost
$57,736,353) .................... 57,559,806
OTHER ASSETS
LESS LIABILITIES (0.2%) ......... 118,340
------------
NET ASSETS (100%) ................ $57,678,146
============
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
MARKET SECTOR DIVERSIFICATION
(Unaudited)
As a Percentage of Total Equity
Investments
Basic Materials ............. 3.6%
Business Services ........... 1.2
Capital Goods ............... 14.4
Consumer Cyclicals ......... 13.0
Consumer Non-Cyclicals Credit
Sensitive .................. 13.5
Banks....................... 19.9
Financial Services ........ 5.9
Insurance .................. 3.4
Real Estate ................ 0.4
Utility--Electric ......... 1.1
Utility--Telephone ........ 3.1
Total Credit Sensitive 33.8
Diversified ............ 1.9
Energy ................. 9.8
Technology ............. 8.8
--------
100.0%
========
</TABLE>
- ------------
* Non-income producing
+ Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may only be resold to qualified
institutional buyers. At December 31, 1997 these securities amounted
to $133,013 or 0.23% of net assets.
ss. Illiquid security: is not actively traded.
Glossary:
ADR--American Depositary Receipt
CPO--Certificate of Participation
GDS--Global Depositary Share
34
<PAGE>
EQ ADVISORS TRUST
EQ/PUTNAM INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1997
- -----------------------------------------------------------------------------
At December 31, 1997 the Portfolio had outstanding forward currency contracts
to buy/sell foreign currencies as follows: (Note 1)
<TABLE>
<CAPTION>
LOCAL
CONTRACT COST ON U.S.$ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION/
(000'S) DATE VALUE (DEPRECIATION)
---------- ------------- ----------- ---------------
<S> <C> <C> <C> <C>
FOREIGN CURRENCY BUY CONTRACTS
British Pound, expiring 1/2/98-1/6/98 .... 28 $ 46,921 $ 46,213 $ (708)
French Franc, expiring 1/30/98-2/11/98 ... 10,249 1,748,723 1,706,899 (41,824)
Japanese Yen, expiring 1/5/98-1/7/98 ..... 6,415 49,439 49,170 (269)
Portuguese Escudo, expiring 1/5/98-1/7/98 22,886 125,624 124,345 (1,279)
Singapore Dollar, expiring 1/5/98-1/7/98 . 48 28,660 28,635 (25)
FOREIGN CURRENCY SALE CONTRACTS
French Franc, expiring 2/11/98 ............ 9,706 1,582,943 1,616,613 (33,670)
Italian Lira, expiring 1/9/98 ............. 27,261 15,409 15,410 (1)
Japanese Yen, expiring 1/5/98-6/12/98 .... 421,982 3,345,381 3,313,940 31,441
Mexican Peso, expiring 1/2/98-1/5/98 ..... 174 21,577 21,645 (68)
Swiss Franc, expiring 1/5/98-1/7/98 ...... 489 336,892 335,106 1,786
---------------
$(44,617)
===============
</TABLE>
Investment security transactions for the period from May 1, 1997 to December
31, 1997 were as follows:
<TABLE>
<CAPTION>
<S> <C>
COST OF PURCHASES:
Stocks and long-term corporate debt securities $60,476,860
NET PROCEEDS OF SALES AND REDEMPTIONS:
Stocks and long-term corporate debt securities 10,214,026
</TABLE>
As of December 31, 1997, the gross unrealized appreciation (depreciation) of
investments based on the aggregate cost of investments for Federal income tax
purposes was as follows:
<TABLE>
<CAPTION>
<S> <C>
Aggregate gross unrealized appreciation $ 2,496,198
Aggregate gross unrealized depreciation (2,793,360)
-------------
Net unrealized (depreciation) ........... $ (297,162)
=============
Federal income tax cost of investments . $57,856,968
=============
</TABLE>
At December 31, 1997 the Portfolio had loaned securities with a total value
of $1,784,601, which was secured by collateral valued at $1,827,012.
See Notes to Financial Statements.
35
<PAGE>
EQ ADVISORS TRUST
EQ/PUTNAM INVESTORS GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------- ----------- --------------
<S> <C> <C>
COMMON STOCKS:
BUSINESS SERVICES (8.1%)
ENVIRONMENTAL CONTROL (0.8%)
U.S.A. Waste Services, Inc.* ... 8,600 $ 337,550
--------------
PRINTING, PUBLISHING,
BROADCASTING (3.7%)
CBS Corp. ....................... 17,600 518,100
Gannett Co. ..................... 15,300 945,731
--------------
1,463,831
--------------
PROFESSIONAL SERVICES (3.6%)
Cendant Corp.* .................. 11,200 385,000
Compuware Corp.* ................ 8,000 256,000
Interpublic Group, Inc. ......... 7,000 348,687
Pitney Bowes, Inc. .............. 3,000 269,813
Quintiles Transnational Corp.* . 4,200 160,650
--------------
1,420,150
--------------
TOTAL BUSINESS SERVICES ........ 3,221,531
--------------
CAPITAL GOODS (6.3%)
AEROSPACE (1.3%)
Textron, Inc. ................... 8,500 531,250
--------------
BUILDING MATERIALS & FOREST
PRODUCTS (0.9%)
Masco Corp. ..................... 6,800 345,950
--------------
ELECTRICAL EQUIPMENT (3.2%)
General Electric Co. ............ 17,200 1,262,050
--------------
MACHINERY (0.9%)
Ingersol Rand Co. ............... 9,300 376,650
--------------
TOTAL CAPITAL GOODS ............ 2,515,900
--------------
CONSUMER CYCLICALS (16.4%)
APPAREL & TEXTILES (1.2%)
Jones Apparel Group, Inc.* ..... 6,000 258,000
Liz Claiborne, Inc. ............. 5,300 221,606
--------------
479,606
--------------
FOOD SERVICES, LODGING (1.8%)
Marriott International, Inc. ... 10,300 713,275
--------------
LEISURE RELATED (1.0%)
Carnival Corp., Class A ......... 7,500 415,313
--------------
RETAIL--GENERAL (12.4%)
CompUSA, Inc.* .................. 7,100 220,100
Consolidated Stores Corp.* ..... 8,700 382,256
Costco Co., Inc.* ............... 12,600 562,275
CVS Corp. ....................... 14,600 935,312
Dayton Hudson Corp. ............. 6,500 438,750
Estee Lauder Cos., Class A ..... 3,400 174,888
Home Depot, Inc. ................ 4,400 259,050
Safeway, Inc.* .................. 4,700 297,275
TJX Cos., Inc. .................. 13,800 474,375
Wal-Mart Stores, Inc. ........... 18,900 745,369
Walgreen Co. .................... 13,600 426,700
--------------
4,916,350
--------------
TOTAL CONSUMER CYCLICALS ...... 6,524,544
--------------
<PAGE>
<CAPTION>
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------- ---------- --------------
<S> <C> <C>
CONSUMER NON-CYCLICALS (21.3%)
BEVERAGES (1.2%)
Coca Cola Enterprises, Inc. .... 13,900 $ 494,319
--------------
DRUGS (11.9%)
Bristol-Myers Squibb Co. ........ 9,100 861,088
Cardinal Health, Inc. ........... 6,200 465,775
Eli Lilly & Co. ................. 5,600 389,900
Merck & Co., Inc. ............... 6,500 690,625
Pfizer, Inc. .................... 12,400 924,575
Schering-Plough Corp. ........... 10,000 621,250
Warner Lambert Co. .............. 6,200 768,800
--------------
4,722,013
--------------
FOODS (2.2%)
Campbell Soup Co. ............... 4,900 284,813
Conagra, Inc. ................... 8,000 262,500
Sara Lee Corp. .................. 5,800 326,612
--------------
873,925
--------------
HOSPITAL SUPPLIES & SERVICES (1.2%)
Healthsouth Corp.* .............. 17,100 474,525
--------------
SOAPS & TOILETRIES (4.8%)
Clorox Co. ...................... 6,300 498,094
Colgate Palmolive Co. ........... 6,700 492,450
Procter & Gamble Co. ............ 11,400 909,862
--------------
1,900,406
--------------
TOTAL CONSUMER NON-CYCLICALS ... 8,465,188
--------------
CREDIT SENSITIVE (20.6%)
BANKS (8.6%)
BankAmerica Corp. ............... 12,800 934,400
Comerica, Inc. .................. 4,700 424,175
Fifth Third Bancorp ............. 1,500 122,625
First Chicago NBD Corp. ......... 6,400 534,400
MBNA Corp. ...................... 24,500 669,156
Southtrust Corp. ................ 100 6,344
SunTrust Banks, Inc. ............ 900 64,237
Washington Mutual, Inc. ......... 10,300 657,269
--------------
3,412,606
--------------
FINANCIAL SERVICES (5.5%)
American Express Co. ............ 10,000 892,500
Associates First Capital Corp.,
Class A ........................ 1,700 120,913
Conseco, Inc. ................... 9,300 422,569
Franklin Resources, Inc. ........ 3,900 339,056
Morgan Stanley Dean Witter
Discover & Co. ................. 6,500 384,312
--------------
2,159,350
--------------
INSURANCE (3.4%)
American International
Group, Inc. .................... 4,800 522,000
Travelers Group, Inc. ........... 15,300 824,287
--------------
1,346,287
--------------
36
<PAGE>
EQ ADVISORS TRUST
EQ/PUTNAM INVESTORS GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------- ----------- --------------
REAL ESTATE (0.4%)
Starwood Lodging Trust .......... 2,900 $ 167,838
--------------
UTILITY--TELEPHONE (2.7%)
SBC Communications, Inc. ........ 4,500 329,625
Sprint Corp. .................... 12,900 756,263
--------------
1,085,888
--------------
TOTAL CREDIT SENSITIVE ......... 8,171,969
--------------
DIVERSIFIED (2.2%)
MISCELLANEOUS (2.2%)
Tyco International Ltd. ......... 19,100 860,694
--------------
ENERGY (5.8%)
OIL--DOMESTIC (2.2%)
Exxon Corp. ..................... 9,000 550,687
Mobil Corp. ..................... 4,100 295,969
--------------
846,656
--------------
OIL--SUPPLIES & CONSTRUCTION (3.6%)
Halliburton Holdings Co. ........ 14,000 727,125
Schlumberger Ltd. ............... 8,800 708,400
--------------
1,435,525
--------------
TOTAL ENERGY ................... 2,282,181
--------------
TECHNOLOGY (15.4%)
ELECTRONICS (9.0%)
BMC Software, Inc.* ............. 7,700 505,312
Computer Associates
International, Inc. ............ 13,400 708,525
HBO & Co. ....................... 10,900 523,200
Microsoft Corp.* ................ 7,100 917,675
Peoplesoft, Inc.* ............... 14,500 565,500
Texas Instruments, Inc. ......... 8,000 360,000
--------------
3,580,212
--------------
OFFICE EQUIPMENT (2.6%)
Compaq Computer Corp. ........... 7,200 406,350
Dell Computer Corp.* ............ 2,800 235,200
EMC Corp.* ...................... 14,100 386,868
--------------
1,028,418
--------------
OFFICE EQUIPMENT SERVICES (0.6%)
Parametric Technology Corp.* ... 5,500 260,563
--------------
TELECOMMUNICATIONS (3.2%)
Ericsson Telecommunications,
Class B (ADR) .................. 4,900 182,831
Lucent Technologies, Inc. ...... 4,500 359,438
Tele-Communications TCI Ventures
Group, Class A* ................ 12,100 342,581
Tellabs, Inc.* .................. 7,000 370,125
--------------
1,254,975
--------------
TOTAL TECHNOLOGY ............... 6,124,168
--------------
TOTAL COMMON STOCKS (96.1%)
(Cost $35,627,783) ............ 38,166,175
--------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- ----------------------------- ------------ -------------
<S> <C> <C>
SHORT-TERM DEBT SECURITIES:
REPURCHASE AGREEMENT (6.3%)
J.P. Morgan Securities, Inc.
6.25%, dated 12/31/97, due
1/2/98, to be repurchased at
$2,489,864, collateralized
by $1,862,000 of U.S.
Treasury Notes, 8.875% due
2/15/19, valued at
$2,543,736 .................. $2,489,000 $ 2,489,000
-------------
U.S. GOVERNMENT AGENCIES (2.5%)
Federal Home Loan
Mortgage Corp.
(Discount Note), 1/26/98 ... 1,000,000 996,007
-------------
TOTAL SHORT-TERM DEBT SECURITIES (8.8%)
(Cost/Amortized Cost
$3,485,007) ................. 3,485,007
-------------
TOTAL INVESTMENTS (104.9%)
(Cost/Amortized Cost
$39,112,790) ................ 41,651,182
OTHER ASSETS
LESS LIABILITIES (-4.9%) ... (1,956,576)
-------------
NET ASSETS (100%) ............ $39,694,606
=============
</TABLE>
- ------------
* Non-income producing
Glossary:
ADR--American Depositary Receipt
37
<PAGE>
EQ ADVISORS TRUST
EQ/PUTNAM INVESTORS GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1997
- -----------------------------------------------------------------------------
Investment security transactions for the period from May 1, 1997 to December
31, 1997 were as follows:
<TABLE>
<CAPTION>
<S> <C>
COST OF PURCHASES:
Stocks and long-term corporate debt securities $43,488,056
NET PROCEEDS OF SALES AND REDEMPTIONS:
Stocks and long-term corporate debt securities 7,975,596
</TABLE>
As of December 31, 1997, the gross unrealized appreciation (depreciation) of
investments based on the aggregate cost of investments for Federal income tax
purposes was as follows:
<TABLE>
<CAPTION>
<S> <C>
Aggregate gross unrealized appreciation $ 2,852,253
Aggregate gross unrealized depreciation (323,418)
------------
Net unrealized appreciation ............. $ 2,528,835
============
Federal income tax cost of investments . $39,122,347
============
</TABLE>
At December 31, 1997 the Portfolio had loaned securities with a total value
of $6,352,351, which was secured by collateral valued at $6,427,550.
See Notes to Financial Statements.
38
<PAGE>
EQ ADVISORS TRUST
T. ROWE PRICE EQUITY INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------- ----------- ------------
<S> <C> <C>
COMMON STOCKS:
BASIC MATERIALS (10.6%)
CHEMICALS (5.5%)
Dow Chemical Co. ................. 15,200 $ 1,542,800
Eastman Chemical Co............... 6,000 357,375
E.I. Du Pont de Nemours & Co. .... 14,900 894,931
Great Lakes Chemical Corp. ...... 16,300 731,462
Imperial Chemical Industries plc
(ADR)............................ 8,200 532,488
Lonrho plc........................ 78,400 121,105
Nalco Chemical Co................. 11,900 470,794
Witco Corp........................ 20,700 844,819
------------
5,495,774
------------
CHEMICALS--SPECIALTY (1.3%)
International Flavors &
Fragrances, Inc. ................ 18,800 968,200
Lubrizol Corp. ................... 9,500 350,312
------------
1,318,512
------------
METALS & MINING (1.2%)
Inco Ltd. ........................ 9,500 161,500
Newmont Mining Corp............... 17,800 522,875
Reynolds Metals Co................ 8,100 486,000
------------
1,170,375
------------
PAPER (2.2%)
Consolidated Papers, Inc.......... 9,400 501,725
Georgia-Pacific Corp. (Timber
Group)*.......................... 4,900 111,169
International Paper Co............ 11,700 504,562
Kimberly Clark Corp. ............. 4,600 226,838
Union Camp Corp................... 16,100 864,369
------------
2,208,663
------------
STEEL (0.4%)
USX-U.S. Steel Group, Inc......... 11,300 353,125
------------
TOTAL BASIC MATERIALS ........... 10,546,449
------------
BUSINESS SERVICES (4.8%)
ENVIRONMENTAL CONTROL (0.5%)
Waste Management, Inc. ........... 18,300 503,250
------------
PRINTING, PUBLISHING,
BROADCASTING (3.6%)
Donnelley (R.R.) & Sons Co. ...... 18,100 674,225
Dow Jones & Co., Inc.............. 11,900 638,881
Dun & Bradstreet Corp. ........... 16,400 507,375
Knight Ridder, Inc................ 16,400 852,800
McGraw Hill Cos., Inc. ........... 7,100 525,400
Readers Digest Association, Inc.,
Class A (Non Voting) ............ 15,900 375,638
------------
3,574,319
------------
PROFESSIONAL SERVICES (0.2%)
Deluxe Corp. ..................... 5,700 196,650
------------
TRUCKING, SHIPPING (0.5%)
Alexander & Baldwin, Inc.......... 8,100 221,231
Gatx Corp......................... 4,400 319,275
------------
540,506
------------
TOTAL BUSINESS SERVICES ......... 4,814,725
------------
<PAGE>
<CAPTION>
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------- ---------- ------------
<S> <C> <C>
CAPITAL GOODS (5.1%)
AEROSPACE (0.2%)
Allied Signal, Inc. .............. 6,300 $ 245,306
------------
BUILDING MATERIALS & FOREST
PRODUCTS (1.2%)
Armstrong World Industries, Inc. . 5,300 396,175
Georgia-Pacific Corp.............. 4,900 297,675
PPG Industries, Inc............... 8,300 474,138
------------
1,167,988
------------
ELECTRICAL EQUIPMENT (2.6%)
AMP, Inc. ........................ 15,000 630,000
Cooper Industries, Inc. .......... 10,200 499,800
General Electric Co............... 12,400 909,850
Hubbell, Inc., Class B............ 9,700 478,331
Raytheon Co., Class A ............ 657 32,391
------------
2,550,372
------------
MACHINERY (1.1%)
Pall Corp......................... 25,900 535,806
Tomkins plc....................... 124,000 592,970
------------
1,128,776
------------
TOTAL CAPITAL GOODS ............. 5,092,442
------------
CONSUMER CYCLICALS (6.2%)
APPAREL & TEXTILES (0.1%)
Unifi, Inc. ...................... 1,600 65,100
------------
AUTO RELATED (1.1%)
Echlin, Inc....................... 11,500 416,156
Genuine Parts Co.................. 21,200 719,475
------------
1,135,631
------------
AUTOS & TRUCKS (0.7%)
General Motors Corp............... 11,600 703,250
------------
FOOD SERVICES, LODGING (0.7%)
Hilton Hotels Corp................ 10,900 324,275
ITT Corp. (New)*.................. 4,600 381,225
------------
705,500
------------
HOUSEHOLD FURNITURE,
APPLIANCES (0.8%)
Rubbermaid, Inc. ................. 2,300 57,500
Whirlpool Corp.................... 12,900 709,500
------------
767,000
------------
PHOTO & OPTICAL (1.3%)
Bausch & Lomb, Inc. .............. 12,800 507,200
Eastman Kodak Co. ................ 13,100 796,644
------------
1,303,844
------------
RETAIL--GENERAL (1.5%)
J.C. Penny Co. ................... 16,600 1,001,187
May Department Stores Co.......... 9,200 484,725
------------
1,485,912
------------
TOTAL CONSUMER CYCLICALS ........ 6,166,237
------------
CONSUMER NON-CYCLICALS (14.0%)
BEVERAGES (1.9%)
Anheuser-Busch Cos., Inc. ........ 24,600 1,082,400
Brown-Forman Corp., Class B ..... 10,200 563,550
Cadbury Schweppes plc............. 24,500 247,001
------------
1,892,951
------------
39
<PAGE>
EQ ADVISORS TRUST
T. ROWE PRICE EQUITY INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------- ----------- ------------
CONTAINERS (0.4%)
Tupperware Corp................... 14,700 $ 409,763
------------
DRUGS (3.2%)
Abbott Laboratories............... 8,000 524,500
American Home Products Corp. ..... 18,000 1,377,000
Amgen, Inc........................ 6,100 330,162
Pharmacia & Upjohn, Inc........... 27,800 1,018,175
------------
3,249,837
------------
FOODS (3.9%)
General Mills, Inc. .............. 11,100 795,037
H.J. Heinz Co. ................... 12,800 650,400
McCormick & Co., Inc.
(Non Voting) .................... 24,600 688,800
Quaker Oats Co.................... 16,000 844,000
Sara Lee Corp..................... 7,500 422,344
Unilever N.V. (NY Shares)......... 7,900 493,256
------------
3,893,837
------------
HOSPITAL SUPPLIES &
SERVICES (1.7%)
Bard (C.R.), Inc.................. 9,000 281,813
Baxter International, Inc......... 6,900 348,019
Smith & Nephew plc................ 128,900 381,279
U.S. Surgical Corp................ 24,800 726,950
------------
1,738,061
------------
SOAPS & TOILETRIES (0.2%)
Colgate Palmolive Co.............. 2,700 198,450
------------
TOBACCO (2.7%)
Philip Morris Cos., Inc. ......... 23,600 1,069,375
RJR Nabisco Holdings Corp......... 14,100 528,750
UST, Inc.......................... 28,800 1,063,800
------------
2,661,925
------------
TOTAL CONSUMER NON-CYCLICALS .... 14,044,824
------------
CREDIT SENSITIVE (34.9%)
BANKS (9.1%)
Banc One Corp. ................... 15,600 847,275
BankBoston Corp................... 6,300 591,806
Bankers Trust New York Corp. ..... 7,800 877,013
Chase Manhattan Corp. ............ 8,700 952,650
First Union Corp.................. 11,360 582,200
Fleet Financial Group, Inc. ..... 9,200 689,425
J.P. Morgan & Co. ................ 7,100 801,413
Mellon Bank Corp.................. 31,000 1,879,375
Mercantile Bankshares Corp. ...... 11,050 432,331
National City Corp................ 8,000 526,000
PNC Bank Corp. ................... 6,800 388,025
Wells Fargo & Co. ................ 1,600 543,100
------------
9,110,613
------------
FINANCIAL SERVICES (2.6%)
American Express Co............... 5,300 473,025
Fannie Mae........................ 16,400 935,825
H&R Block, Inc.................... 15,500 694,594
Transamerica Corp................. 4,900 521,850
------------
2,625,294
------------
INSURANCE (4.7%)
American General Corp............. 15,300 827,156
Exel Ltd.......................... 9,700 614,737
Hilb, Rogal & Hamilton Co. ...... 2,900 56,006
<PAGE>
<CAPTION>
NUMBER VALUE
OF SHARES (NOTE I)
- ---------------------------------- ----------- -------------
<S> <C> <C>
Lincoln National Corp. ........... 6,700 $ 523,438
Safeco Corp....................... 11,000 536,250
St. Paul Cos...................... 9,900 812,419
Travelers Group, Inc.............. 11,800 635,725
USF&G Corp. ...................... 18,800 414,775
Willis Corroon Group plc (ADR) ... 26,400 325,050
------------
4,745,556
------------
REAL ESTATE (1.4%)
Rouse Co. ........................ 4,200 137,550
Security Capital Pacific Trust ... 7,300 177,025
Simon Debartolo Group, Inc. ...... 26,000 849,875
Weingarten Realty Investors ...... 5,300 237,506
------------
1,401,956
------------
UTILITY--ELECTRIC (8.3%)
Baltimore Gas & Electric Co. ..... 11,200 381,500
Central & South West Corp. ...... 13,300 359,931
Dominion Resources, Inc. ......... 12,600 536,288
DQE, Inc. ........................ 14,800 519,850
Duke Energy Corp.................. 16,600 919,225
Entergy Corp...................... 12,800 383,200
FirstEnergy Corp.................. 24,370 706,730
GPU, Inc. ........................ 5,800 244,325
Houston Industries, Inc........... 19,500 520,406
Pacificorp........................ 18,000 491,625
Peco Energy Co.................... 17,400 421,950
PG&E Corp......................... 10,200 310,463
Public Service Enterprise Group,
Inc. ............................ 10,500 332,719
Southern Co. ..................... 28,500 737,437
TECO Energy, Inc.................. 12,400 348,750
Unicom Corp....................... 20,300 624,225
Western Resources, Inc............ 9,500 408,500
------------
8,247,124
------------
UTILITY--GAS (0.5%)
Enron Corp. ...................... 12,000 498,750
------------
UTILITY--TELEPHONE (8.3%)
Alltel Corp. ..................... 31,900 1,309,894
AT&T Corp. ....................... 29,700 1,819,125
Bell Atlantic Corp. .............. 10,000 910,000
Bellsouth Corp. .................. 12,500 703,906
GTE Corp.......................... 19,500 1,018,875
SBC Communications, Inc........... 15,100 1,106,075
Southern New England
Telecommunications Corp. ........ 8,800 442,750
Sprint Corp....................... 9,100 533,488
U.S. West Communications Group ... 9,200 415,150
------------
8,259,263
------------
TOTAL CREDIT SENSITIVE........... 34,888,556
------------
DIVERSIFIED (1.5%)
MISCELLANEOUS (1.5%)
Fortune Brands, Inc. ............. 14,100 522,581
Minnesota Mining & Manufacturing
Co............................... 3,400 279,013
Olin Corp. ....................... 15,100 707,812
------------
TOTAL DIVERSIFIED ............... 1,509,406
------------
40
<PAGE>
EQ ADVISORS TRUST
T. ROWE PRICE EQUITY INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------- ----------- ------------
ENERGY (13.0%)
OIL--DOMESTIC (7.2%)
Amoco Corp. ...................... 9,900 $ 842,737
Atlantic Richfield Co. ........... 17,600 1,410,200
Chevron Corp...................... 10,500 808,500
Exxon Corp........................ 17,900 1,095,256
Mobil Corp........................ 14,400 1,039,500
Occidental Petroleum Corp......... 21,400 627,288
Phillips Petroleum Co............. 11,900 578,637
Texaco, Inc. ..................... 15,400 837,375
------------
7,239,493
------------
OIL--INTERNATIONAL (2.4%)
Amerada Hess Corp................. 11,000 603,625
British Petroleum Co. plc (ADR) .. 7,900 629,531
Repsol S.A. (ADR)................. 9,400 400,088
Royal Dutch Petroleum Co.
(NY Shares)...................... 13,600 736,950
------------
2,370,194
------------
OIL--SUPPLIES &
CONSTRUCTION (0.6%)
USX-Marathon Group, Inc........... 16,700 563,625
------------
RAILROADS (2.8%)
Burlington Northern Santa Fe
Corp. ........................... 7,300 678,444
Norfolk Southern Corp............. 26,700 822,694
Union Pacific Corp................ 21,000 1,311,187
------------
2,812,325
------------
TOTAL ENERGY..................... 12,985,637
------------
TECHNOLOGY (1.0%)
TELECOMMUNICATIONS (1.0%)
BCE, Inc. ........................ 16,100 536,685
Frontier Corp. ................... 17,500 421,094
------------
TOTAL TECHNOLOGY................. 957,779
------------
TOTAL COMMON STOCKS (91.1%) (Cost
$85,559,610)..................... 91,006,055
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- ------------------------------- ----------- -------------
<S> <C> <C>
SHORT-TERM DEBT SECURITIES:
COMMERCIAL PAPER (8.6%)
Ciesco L.P. 5.62%, 1/26/98
Section + ...................... $ 800,000 $ 796,765
Coca Cola Co. 5.69%, 1/9/98 + ... 1,435,000 1,433,151
Golden Manager's Acceptance
Corp. 5.86%, 1/23/98 + ......... 699,000 696,497
Minnesota Mining &
Manufacturing Co. 5.60%,
1/9/98 + ....................... 4,364,000 4,358,375
Sara Lee Corp. 6.00%, 1/7/98 + .. 1,322,000 1,320,678
-------------
TOTAL COMMERCIAL PAPER ......... 8,605,466
-------------
U.S. GOVERNMENT (1.5%)
U.S. Treasury Bill 1/22/98 ..... 1,464,000 1,460,071
-------------
U.S. GOVERNMENT AGENCIES (0.4%)
Federal Home Loan Mortgage
Corp. (Discount Note),
1/14/98......................... 447,000 446,077
-------------
TOTAL SHORT-TERM DEBT SECURITIES (10.5%)
(Cost/Amortized Cost
$10,511,614).................... 10,511,614
-------------
TOTAL INVESTMENTS (101.6%)
(Cost/Amortized Cost
$96,071,224) ................... 101,517,669
OTHER ASSETS
LESS LIABILITIES (-1.6%) ...... (1,570,359)
-------------
NET ASSETS (100%) ............... $ 99,947,310
=============
</TABLE>
- ------------
* Non-income producing
ss Illiquid security: is not actively traded.
+ Interest rates disclosed for Commercial Paper represent effective
yields at December 31, 1997.
Glossary:
ADR--American Depositary Receipt
41
<PAGE>
EQ ADVISORS TRUST
T. ROWE PRICE EQUITY INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1997
- -----------------------------------------------------------------------------
At December 31, 1997 the Portfolio had outstanding forward currency contracts
to buy/sell foreign currencies as follows: (Note 1);
<TABLE>
<CAPTION>
LOCAL
CONTRACT COST ON U.S.$
AMOUNT ORIGNATION CURRENT UNREALIZED
(000'S) DATE VALUE (DEPRECIATION)
---------- ------------ --------- --------------
<S> <C> <C> <C> <C>
FOREIGN CURRENCY BUY CONTRACTS
British Pound, expiring 1/8/98 30 $51,613 $50,336 $(1,277)
==============
</TABLE>
Investment security transactions for the period from May 1, 1997 to December
31, 1997 were as follows:
<TABLE>
<CAPTION>
<S> <C>
COST OF PURCHASES:
Stocks and long-term corporate debt
securities.................................... $88,872,144
NET PROCEEDS OF SALES AND REDEMPTIONS:
Stocks and long-term corporate debt
securities.................................... 3,678,196
</TABLE>
As of December 31, 1997, the gross unrealized appreciation (depreciation) of
investments based on the aggregate cost of investments for Federal income tax
purposes was as follows:
<TABLE>
<CAPTION>
<S> <C>
Aggregate gross unrealized appreciation . $ 6,740,414
Aggregate gross unrealized depreciation . (1,303,778)
-------------
Net unrealized appreciation.............. $ 5,436,636
=============
Federal income tax cost of investments .. $96,081,033
=============
</TABLE>
At December 31, 1997 the Portfolio had loaned securities with a total value
of $25,415,218, which was secured by collateral valued at $25,901,210, of
which $666,500 was in the form of U.S. Government securities.
For the period from May 1, 1997 to December 31, 1997 the Portfolio incurred
approximately $694 as brokerage commissions with Donaldson, Lufkin & Jenrette
Securities Corp., an affiliated broker/dealer.
See Notes to Financial Statements.
42
<PAGE>
EQ ADVISORS TRUST
T. ROWE PRICE INTERNATIONAL STOCK PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------- ------------ ------------
<S> <C> <C>
COMMON STOCKS, RIGHTS AND WARRANTS:
AUSTRALIA & NEW ZEALAND (2.1%)
AUSTRALIA (1.8%)
Australia & New Zealand Banking
Group Ltd. ...................... 8,000 $ 52,846
Australian Gas & Light Co., Ltd. . 21,000 146,380
Brambles Industries Ltd. ......... 2,000 39,673
Broken Hill Proprietary Ltd. .... 13,192 122,463
Commonwealth Bank of Australia .. 10,000 114,655
Fosters Brewing Corp. ............ 27,000 51,360
John Fairfax Holdings Ltd. ...... 34,000 70,878
Lend Lease Corp. ................. 5,032 98,343
National Australia Bank Ltd. .... 5,126 71,562
News Corp., Ltd. ................. 21,034 116,061
Publishing & Broadcasting Ltd. .. 16,000 70,878
Sydney Harbour Casino Holdings* . 45,200 42,843
Tabcorp Holdings Ltd. ............ 15,000 70,356
Telstra Corp., Ltd.* ............. 43,000 90,760
Westpac Banking Corp. ............ 13,000 83,130
WMC Ltd. ......................... 8,000 27,882
Woodside Petroleum Ltd. .......... 12,000 84,584
------------
1,354,654
------------
NEW ZEALAND (0.3%)
Air New Zealand Ltd., Class B ... 21,000 42,068
Fletcher Challenge Building ..... 16,251 33,215
Fletcher Challenge Energy ........ 14,000 49,018
Telecom Corp. of New Zealand .... 20,000 96,969
------------
221,270
------------
TOTAL AUSTRALIA & NEW ZEALAND . 1,575,924
------------
CANADA (0.2%)
Alcan Aluminum Ltd. .............. 3,630 100,054
Royal Bank of Canada ............. 1,250 66,109
------------
TOTAL CANADA .................... 166,163
------------
CHINA & KOREA (0.3%)
CHINA (0.3%)
Huaneng Power International, Inc.
(ADR)* .......................... 8,000 185,500
------------
KOREA (0.0%)
Samsung Electronics Co. (Foreign) 280 6,343
------------
TOTAL CHINA & KOREA ............. 191,843
------------
JAPAN (17.6%)
Advantest Corp. .................. 1,000 56,716
Alps Electric Co., Ltd. .......... 8,000 75,417
Amada Co., Ltd. .................. 17,000 63,192
Canon, Inc. ...................... 36,000 838,781
Citizen Watch Co., Ltd. .......... 10,000 67,063
Daifuku Co., Ltd. ................ 2,000 9,734
Daiichi Pharma Co., Ltd. ......... 21,000 236,597
Dainippon Screen Manufacturing
Co., Ltd. ....................... 15,000 68,979
Daiwa House Industry Co., Ltd. .. 21,000 111,056
DDI Corp. ........................ 32 84,614
Denso Corp. ...................... 31,000 558,345
East Japan Railway Co. ........... 59 266,342
<PAGE>
<CAPTION>
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------- ------------ --------------
<S> <C> <C>
Fanuc ............................ 4,900 $ 185,522
Hitachi Ltd. ..................... 35,000 249,473
Hitachi Zosen Corp. .............. 25,000 40,046
Honda Motor Co., Ltd. ............ 2,000 73,424
Inax ............................. 5,000 14,524
Ishihara Sangyo Kaisha* .......... 5,000 5,557
Ito Yokado Co., Ltd. ............. 8,000 407,741
Kao Corp. ........................ 16,000 230,542
Kokuyo ........................... 8,000 137,957
Komatsu Ltd. ..................... 21,000 105,423
Komori Corp. ..................... 7,000 104,081
Kumagai Gumi Co., Ltd. ........... 9,000 4,897
Kuraray Co., Ltd. ................ 18,000 148,994
Kyocera Corp. .................... 11,000 499,099
Makita Corp. ..................... 12,000 114,965
Marui Co., Ltd. .................. 22,000 342,288
Matsushita Electric Industries
Co. ............................. 35,000 512,359
Mitsubishi Corp. ................. 21,000 165,779
Mitsubishi Heavy Industries Ltd. . 98,000 408,599
Mitsubishi Paper Mills ........... 11,000 15,428
Mitsui Chemicals Industries,
Inc.............................. 5,000 9,197
Mitsui Fudosan Co., Ltd. ......... 51,000 492,508
Murata Manufacturing Co., Ltd. .. 10,000 251,389
National House ................... 3,000 20,579
NEC Corp. ........................ 62,000 660,510
Nippon Hodo ...................... 2,000 6,438
Nippon Steel Corp. ............... 129,000 190,818
Nippon Telegraph & Telephone
Corp. ........................... 27 231,769
Nomura Securities Co. ............ 33,000 440,084
Pioneer Electric Corp. ........... 10,000 154,053
Sangetsu Co., Ltd. ............... 2,000 20,540
Sankyo Co. ....................... 21,000 474,804
Sega Enterprises ................. 2,500 45,219
Sekisui Chemical Co. ............. 25,000 127,036
Sekisui House Ltd. ............... 15,000 96,455
Seven-Eleven Japan Co., Ltd. .... 3,000 212,454
Sharp Corp. ...................... 31,000 213,359
Shin-Etsu Chemical Co. ........... 17,000 324,430
Shiseido Co., Ltd. ............... 7,000 95,497
Sony Corp. ....................... 7,900 702,357
Sumitomo Corp. ................... 36,000 201,418
Sumitomo Electric Industries .... 48,000 654,838
Sumitomo Forestry Co. ............ 8,000 38,935
TDK Corp. ........................ 8,000 603,334
Teijin Ltd. ...................... 40,000 83,694
Tokio Marine & Fire Insurance Co. 8,000 90,745
Tokyo Electron Ltd. .............. 4,000 128,147
Tokyo Steel Manufacturing ........ 7,800 26,364
Toppan Printing Co., Ltd. ........ 17,000 221,498
Uny Co., Ltd. .................... 8,000 109,753
Yurtec Corp. ..................... 3,000 18,417
------------
TOTAL JAPAN ..................... 13,150,173
------------
LATIN AMERICA (5.0%)
ARGENTINA (0.9%)
Banco Frances Rio Plata (ADR) .... 2,220 60,772
Banco Galicia Y Bueno (ADR) ..... 2,180 56,135
Perez Companc S.A. ............... 16,498 117,816
43
<PAGE>
EQ ADVISORS TRUST
T. ROWE PRICE INTERNATIONAL STOCK PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------- ------------ ------------
Telefonica de Argentina (ADR) ... 4,630 $ 172,468
YPF S.A., Class D (ADR) .......... 8,361 285,842
------------
693,033
------------
BRAZIL (1.7%)
Eletrobras ....................... 2,730,000 135,760
Pao de Acucar (ADR) .............. 2,000 38,750
Telebras S.A. (ADR) .............. 8,000 931,500
Uniao de Bancos Brasileiros ..... 1,675,000 69,038
USIMINAS S.A. (ADR) .............. 6,000 35,483
White Martins S.A. ............... 7,000 10,224
------------
1,220,755
------------
CHILE (0.3%)
Chilectra S.A. (ADR) +Section ... 2,211 56,475
Chilgener S.A. (ADS) ............. 1,094 26,803
CCU S.A. (ADS) ................... 649 19,064
Endesa Empresa S.A. (ADS) ........ 2,841 50,250
Enersis S.A. (ADR) ............... 1,645 47,705
Santa Isabel S.A. (ADR) .......... 602 10,535
------------
210,832
------------
MEXICO (1.9%)
Cemex S.A.* ...................... 10,000 53,102
Cemex S.A. (ADR)* ................ 16,000 145,078
Cifra S.A., Class B (ADR) ........ 21,149 49,066
Femsa S.A., Class B .............. 17,000 136,675
Gruma S.A. (ADS)* +Section ...... 3,411 51,165
Gruma S.A., Class B* ............. 15,000 59,553
Grupo Financeiro Banamex, Class
B* .............................. 22,000 65,918
Grupo Industrial Maseca S.A.,
Class B ......................... 26,000 26,064
Grupo Modelo S.A., Class C ...... 9,000 75,819
Grupo Televisa S.A. (GDR)* ...... 2,000 77,375
Kimberly Clark de Mexico,
Class A ......................... 23,000 109,293
Panamerican Beverages, Inc.,
Class A ......................... 5,000 163,125
Telmex, Class L (ADR) ............ 6,000 336,375
TV Azteca S.A. (ADR)* ............ 3,800 85,738
------------
1,434,346
------------
PANAMA (0.0%)
Banco Latinoamericano de
Exportaciones S.A. .............. 387 16,012
------------
PERU (0.1%)
Credicorp Ltd. ................... 920 16,560
Telefonica de Peru S.A. (ADS) ... 1,330 31,006
------------
47,566
------------
VENEZUELA (0.1%)
CANTV (ADR) ...................... 2,059 85,706
------------
TOTAL LATIN AMERICA ............. 3,708,250
------------
OTHER EUROPEAN COUNTRIES (34.6%)
BELGIUM (1.1%)
Credit Communal Holdings/Dexia .. 445 59,752
Generale de Banque S.A. .......... 530 230,662
Kredietbank N.V. ................. 1,220 512,024
UCB S.A. ......................... 6 19,805
------------
822,243
------------
<PAGE>
<CAPTION>
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------- ---------- -------------
<S> <C> <C>
CZECH REPUBLIC (0.0%)
SPT Telecom A/S* ................. 190 $ 20,315
------------
FRANCE (7.5%)
Accor S.A. ....................... 400 74,371
Alcatel Alsthom .................. 1,990 252,945
Assurances Ben de France ......... 1,520 80,540
Canal Plus ....................... 710 132,008
Carrefour S.A. ................... 251 130,953
Cie Generale des Eaux ............ 7,000 976,988
Compagnie de Saint Gobain ........ 2,560 363,679
Credit Commercial de France ..... 1,739 119,189
Dexia France ..................... 264 30,574
Elf Aquitaine S.A. ............... 2,410 280,302
Groupe Danone .................... 1,310 233,987
Groupe GTM ....................... 440 29,609
Guilbert S.A. .................... 660 94,090
Havas S.A. ....................... 550 39,570
Lapeyre S.A. ..................... 1,100 60,588
Legrand S.A. ..................... 500 99,609
L'Oreal .......................... 270 105,649
LVMH (Moet Hennessy Louis
Vuitton) ........................ 287 47,639
Pathe S.A. ....................... 390 75,687
Pinault-Printemps-Redoute S.A. .. 980 522,851
Primagaz Cie Gaz ................. 150 12,536
Sanofi S.A. ...................... 3,298 367,145
Schneider S.A. ................... 5,559 301,848
Societe Generale Paris ........... 1,325 180,527
Sodexho Alliance S.A. ............ 458 245,266
Television Francaise ............. 450 45,983
Total S.A., Class B .............. 6,500 707,402
------------
5,611,535
------------
GERMANY (5.0%)
Allianz AG (Registered) .......... 1,450 373,996
Bayer AG ......................... 6,852 254,243
Bayer Hypothecken Und Wechselbank
AG .............................. 5,430 263,358
Bayerische Vereinsbank AG ........ 3,733 240,712
Bilfinger & Berger BAU AG ........ 1,640 51,781
Buderus AG ....................... 110 49,346
Commerzbank AG ................... 2,240 87,162
Deutsche Bank AG ................. 5,702 398,739
Deutsche Telekom AG .............. 6,220 115,137
Dresdner Bank AG* ................ 1,900 86,395
Dresdner Bank AG*
(Warrants)(expiring 4/30/02) ... 4,238 75,386
Gehe AG .......................... 7,230 365,730
Hoechst AG ....................... 2,030 70,302
Hornbach Baumarkt AG ............. 260 7,443
Mannesmann AG .................... 220 110,431
Rhoen-Kilnikum AG ................ 1,070 104,683
SAP AG ........................... 1,050 318,394
Siemens AG ....................... 2,439 147,103
Veba AG .......................... 7,680 522,972
Volkswagen AG .................... 120 67,039
------------
3,710,352
------------
ITALY (3.6%)
Assicurazioni Generali S.p.A. ... 9,000 221,057
Banca Commerciale Italiana ...... 14,000 48,672
44
<PAGE>
EQ ADVISORS TRUST
T. ROWE PRICE INTERNATIONAL STOCK PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------- ------------ ------------
Banca di Roma* ................... 161,000 $ 162,456
Credito Italiano S.p.A. .......... 112,205 346,002
ENI S.p.A. (Registered) .......... 70,683 400,763
Gucci Group N.V. ................. 1,729 72,402
Industrie Natuzzi S.p.A. (ADR) .. 2,000 41,250
Instituto Mobiliare Italiano
S.p.A. .......................... 14,000 166,196
Italgas S.p.A. ................... 15,000 61,899
La Rinascente S.p.A. ............. 3,000 22,386
Mediolanum S.p.A. ................ 10,000 188,242
Telecom Italia S.p.A. ............ 62,665 400,291
Telecom Italia Mobile S.p.A. .... 116,000 535,410
Telecom Italia Mobile S.p.A.
(Savings Shares) ................ 12,000 34,121
------------
2,701,147
------------
NETHERLANDS (9.0%)
ABN-Amro Holdings N.V. ........... 21,360 416,107
Akzo Nobel N.V. .................. 580 100,002
Baan Co., N.V.* .................. 3,136 102,695
Baan Co., N.V. (ADR)* ............ 3,000 99,000
CSM .............................. 6,120 271,645
Elsevier N.V. .................... 46,997 760,240
Fortis Amev N.V. ................. 7,400 322,620
ING Groep N.V. ................... 20,340 856,674
ING Groep N.V.*
(Warrants)(expiring 3/15/01) ... 3,244 33,981
Koninklijke Ahold N.V. ........... 3,838 100,131
Koninklijke PTT Nederland N.V. ... 1,950 81,360
Nutricia Verenigde Bedrijven N.V. 4,210 127,692
Otra N.V. ........................ 730 10,441
Polygram N.V. .................... 3,850 184,179
Royal Dutch Petroleum Co. ........ 28,820 1,581,962
Unilever N.V. .................... 9,560 589,352
Wolters Kluwer N.V. .............. 8,040 1,038,481
------------
6,676,562
------------
PORTUGAL (0.1%)
Jeronimo Martins & Filho ......... 2,550 80,913
------------
RUSSIA (0.0%)
Gazprom (ADS)* ................... 591 13,859
LUKoil Holding (ADR) 110 10,099
------------
23,958
------------
SPAIN (2.1%)
Argentina Corp. Banc ............. 1,680 102,222
Banco Bilbao Vizcaya S.A. ........ 2,990 96,755
Banco de Santander S.A. .......... 9,138 305,300
Banco Popular Espanol S.A. ...... 3,030 211,812
Endesa S.A. ...................... 11,276 200,207
Gas Natural SDG S.A. ............. 1,890 98,005
Iberdrola S.A. ................... 14,550 191,485
Repsol S.A. ...................... 2,880 122,875
Telefonica de Espana S.A. ........ 9,014 257,374
------------
1,586,035
------------
SWITZERLAND (6.2%)
ABB AG (Bearer) .................. 240 301,541
Adecco S.A. (Bearer) ............. 1,050 304,468
CS Holdings ...................... 1,140 176,405
Nestle S.A. (Registered) ......... 620 929,257
Novartis AG (Registered) ......... 820 1,330,640
Roche Holdings AG ................ 100 993,153
<PAGE>
<CAPTION>
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------- ----------- ------------
<S> <C> <C>
Swiss Bank Corp. (Registered) ... 1,150 $ 357,480
Union Bank of Switzerland
(Bearer) ........................ 150 216,912
------------
4,609,856
------------
TOTAL OTHER EUROPEAN COUNTRIES 25,842,916
------------
SCANDINAVIA (5.0%)
DENMARK (0.3%)
Den Danske Bank AS ............... 1,070 142,575
Tele Danmark A/S, Class B ........ 240 14,886
Unidanmark A/S, Class A
(Registered) .................... 930 68,272
------------
225,733
------------
NORWAY (1.6%)
Bergesen ASA, Class A ............ 810 19,083
Norsk Hydro ASA .................. 11,850 576,793
Orkla ASA, Class A ............... 7,090 609,568
Saga Petroleum ASA, Class B ..... 1,250 18,955
------------
1,224,399
------------
SWEDEN (3.1%)
ABB AB, Class A .................. 14,590 172,730
Astra AB, Class B ................ 33,273 559,452
Atlas Copco AB, Class B .......... 7,930 236,205
Electrolux AB, Class B ........... 4,230 293,546
Esselte AB, Class B .............. 1,890 38,324
Granges AB* ...................... 1,115 17,484
Hennes & Mauritz AB, Class B .... 8,490 374,249
Nordbanken AB* ................... 52,989 299,652
Sandvik AB, Class A .............. 2,330 66,321
Sandvik AB, Class B .............. 7,060 201,844
Scribona AB, Class B ............. 940 10,477
------------
2,270,284
------------
TOTAL SCANDINAVIA ............... 3,720,416
------------
SOUTHEAST ASIA (3.0%)
HONG KONG (2.2%)
Cheung Kong Ltd. ................. 10,000 65,492
China Light & Power Co. .......... 14,000 77,687
Dao Heng Bank Group Ltd. ......... 30,000 74,913
Hong Kong Land Holdings .......... 96,000 184,320
Hutchison Whampoa Ltd. ........... 69,000 432,753
New World Development Co. ........ 92,000 318,183
HSBC Holdings plc ................ 2,800 69,015
Sun Hung Kai Properties Ltd. .... 10,000 69,686
Swire Pacific Ltd., Class A ..... 38,000 208,414
Wharf Holdings Ltd. .............. 85,000 186,476
------------
1,686,939
------------
MALAYSIA (0.2%)
Berjaya Sports Toto Bhd. ......... 36,000 92,094
Tanjong plc ...................... 28,000 46,433
Time Engineering Bhd. ............ 7,000 1,800
------------
140,327
------------
SINGAPORE (0.6%)
City Developments Ltd. ........... 6,000 27,833
Overseas Union Bank Ltd.
(Foreign) ....................... 15,000 57,538
Overseas-Chinese Banking Corp.
(Foreign) ....................... 3,200 18,650
Singapore Land Ltd. .............. 34,000 74,814
Singapore Press Ltd. (Foreign) .. 13,000 163,128
45
<PAGE>
EQ ADVISORS TRUST
T. ROWE PRICE INTERNATIONAL STOCK PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------- ------------ ------------
United Overseas Bank Ltd.
(Foreign) ....................... 14,000 $ 77,847
------------
419,810
------------
TOTAL SOUTHEAST ASIA ............ 2,247,076
------------
SOUTHERN CENTRAL ASIA (0.1%)
INDIA (0.1%)
Mahanagar Telephone Nigam Ltd.
(GDR)* .......................... 6,000 90,060
------------
UNITED KINGDOM (19.0%)
Abbey National plc ............... 29,000 519,925
Argos plc ........................ 28,000 252,839
ASDA Group plc ................... 88,000 256,684
BG plc ........................... 27,529 123,955
British Petroleum Co. plc......... 23,000 302,368
Cable & Wireless plc ............. 56,000 492,334
Cadbury Schweppes plc ............ 40,000 403,267
Caradon plc ...................... 63,100 183,536
Centrica plc* .................... 13,000 19,120
Compass Group plc ................ 10,000 123,082
Electrocomponents plc ............ 20,000 148,883
GKN plc .......................... 3,000 61,476
Glaxo Wellcome plc ............... 43,000 1,017,534
Diageo plc ....................... 129,000 1,186,063
Heywood Williams Group plc ...... 4,000 13,738
Hillsdown Holdings plc ........... 16,000 38,913
John Laing plc, Class A .......... 9,000 47,771
Kingfisher plc ................... 62,000 863,984
Ladbroke Group plc ............... 39,000 169,195
National Westminster Bank ........ 106,000 1,762,805
Rank Group plc ................... 42,000 233,974
Reed International plc ........... 110,000 1,102,657
Rio Tinto plc (Registered) ...... 28,000 344,634
Rolls-Royce plc .................. 17,000 65,650
Safeway plc ...................... 52,000 293,100
Shell Transport & Trading Co.,
plc (Registered) ................ 149,000 1,077,350
Smith (David S) Holdings plc .... 26,000 85,025
Smithkline Beecham plc ........... 138,800 1,421,005
Tesco plc ........................ 41,000 333,509
T&N plc .......................... 27,000 113,142
Tomkins plc ...................... 118,000 564,278
United News & Media plc .......... 46,000 523,853
------------
TOTAL UNITED KINGDOM ............ 14,145,649
------------
TOTAL COMMON STOCKS, RIGHTS
AND WARRANTS (86.9%)
(Cost $68,238,485) .............. 64,838,470
------------
PREFERRED STOCKS AND RIGHTS:
AUSTRALIA & NEW ZEALAND (0.1%)
AUSTRALIA (0.1%)
News Corp., Ltd. ................. 8,124 40,190
------------
<PAGE>
<CAPTION>
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------- ------------ --------------
<S> <C> <C>
LATIN AMERICA (1.3%)
BRAZIL (1.3%)
Banco Bradesco S.A. .............. 10,149,000 $ 100,030
Banco Bradesco S.A.*
(Rights)(expiring 2/3/98) ....... 433,920 --
Banco Itau S.A. .................. 103,000 55,374
Brahma ........................... 99,000 66,529
Brasmotor S.A. ................... 134,000 13,207
CEMIG ............................ 4,206,000 182,742
Cia Cimento Portland Itau ........ 70,000 13,485
Cia Tecidos Norte de Mina ........ 56,000 20,071
Lojas Americanas S.A.
(Registered) * .................. 795,000 3,704
Petrobras S.A. ................... 831,654 194,491
Telec do Rio Janeiro S.A. ........ 290,536 30,198
Telecom de Sao Paulo S.A. ........ 762,706 202,962
Telemig Class B* ................. 284,930 35,998
USIMINAS S.A. .................... 11,450,300 67,714
------------
TOTAL LATIN AMERICA ............. 986,505
------------
OTHER EUROPEAN COUNTRIES (0.3%)
GERMANY (0.3%)
Fielmann AG ...................... 420 9,105
Fresenius AG ..................... 290 52,714
Hornbach Holding AG .............. 770 53,076
SAP AG (Non Voting) .............. 270 87,681
------------
TOTAL OTHER EUROPEAN COUNTRIES 202,576
------------
SCANDINAVIA (0.2%)
FINLAND (0.2%)
Nokia AB, Series A ............... 2,430 172,522
------------
TOTAL PREFERRED STOCKS AND RIGHTS
(1.9%)
(Cost $1,615,090) ............... 1,401,793
------------
TOTAL INVESTMENTS (88.8%)
(Cost $69,853,575) .............. 66,240,263
OTHER ASSETS
LESS LIABILITIES (11.2%) ........ 8,331,706
------------
NET ASSETS (100%)................. $74,571,969
============
</TABLE>
- ------------
* Non-income producing
+ Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may only be resold to qualified institutional
buyers. At December 31, 1997 these securities amounted to $116,028 or
0.16% of net assets.
ss. Illiquid security: is not actively traded.
Glossary:
ADR--American Depositary Receipt
ADS--American Depositary Share
GDR--Global Depositary Receipt
46
<PAGE>
EQ ADVISORS TRUST
T. ROWE PRICE INTERNATIONAL STOCK PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
<TABLE>
<CAPTION>
<S> <C> <C>
MARKET SECTOR DIVERSIFICATION
(Unaudited)
As a Percentage of Total Equity Investments
Basic Materials ......................... 2.5 %
Business Services ....................... 6.3
Capital Goods ........................... 8.4
Consumer Cyclicals ...................... 15.2
Consumer Non-Cyclicals .................. 20.4
Credit Sensitive
Banks .................................. 13.3
Financial Services ..................... 3.2
Insurance .............................. 1.9
Real Estate ............................ 2.2
Utility--Electric ...................... 3.0
Utility--Gas ........................... 0.2
Utility--Telephone ..................... 6.7
------
Total Credit Sensitive .................. 30.5
Diversified ............................. 2.2
Energy .................................. 11.0
Technology .............................. 3.5
-------
100.0%
=======
</TABLE>
47
<PAGE>
EQ ADVISORS TRUST
T. ROWE PRICE INTERNATIONAL STOCK PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1997
- -----------------------------------------------------------------------------
At December 31, 1997 the Portfolio had outstanding forward currency contracts
to buy/sell foreign currencies as follows: (Note 1)
<TABLE>
<CAPTION>
LOCAL
CONTRACT COST ON U.S.$ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION/
(000'S) DATE VALUE (DEPRECIATION)
---------- ------------- ---------- ---------------
<S> <C> <C> <C> <C>
FOREIGN CURRENCY BUY CONTRACTS
British Pound, expiring 1/2/98 ..... 322 $537,163 $528,893 $(8,270)
FOREIGN CURRENCY SALE CONTRACTS
Belgian Franc, expiring 1/5/98 ...... 2,933 79,285 79,154 131
Canadian Dollar, expiring 1/5/98 .... 77 53,748 53,949 (201)
French Franc, expiring 1/30/98 ...... 1,555 259,480 258,359 1,121
German Mark, expiring 1/6/98......... 273 152,104 151,643 461
Italian Lira, expiring 1/8/98 ....... 427,349 242,481 241,576 905
Netherlands Guilder, expiring
1/6/98.............................. 784 387,699 386,884 815
Norwegian Krone, expiring 1/6/98 .... 622 84,376 84,159 217
Spanish Peseta, expiring 1/7/98 ..... 4,859 31,987 31,895 92
Swedish Krona 1/7/98................. 1,383 174,308 174,135 173
Swiss Franc, expiring 1/6/98......... 443 304,387 303,491 896
---------------
$(3,660)
===============
</TABLE>
Investment security transactions for the period from May 1, 1997 to December
31, 1997 were as follows:
<TABLE>
<CAPTION>
<S> <C>
COST OF PURCHASES:
Stocks and long-term corporate debt securities.... $76,063,422
NET PROCEEDS OF SALES AND REDEMPTIONS:
Stocks and long-term corporate debt securities.... 6,150,380
</TABLE>
As of December 31, 1997, the gross unrealized appreciation (depreciation) of
investments based on the aggregate cost of investments for Federal income tax
purposes was as follows:
<TABLE>
<CAPTION>
<S> <C>
Aggregate gross unrealized appreciation . $ 2,929,973
Aggregate gross unrealized depreciation . (6,618,503)
--------------
Net unrealized (depreciation) ........... $(3,688,530)
==============
Federal income tax cost of investments . $69,928,793
==============
</TABLE>
At December 31, 1997 the Portfolio had loaned securities with a total value
of $77,695, which was secured by collateral valued at $81,200.
For the period from May 1, 1997 to December 31, 1997 the Portfolio incurred
approximately $2,279 as brokerage commissions with Fleming Martin/Robert
Fleming Co. and $454 with Jardin Fleming, both affiliated broker/dealers.
See Notes to Financial Statements.
48
<PAGE>
EQ ADVISORS TRUST
WARBURG PINCUS SMALL COMPANY VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
NUMBER OF VALUE
SHARES (NOTE 1)
- --------------------------------- ----------- -------------
<S> <C> <C>
COMMON STOCKS:
BASIC MATERIALS (7.8%)
STEEL (7.8%)
Citation Corp.*................... 169,900 $ 2,760,875
Roanoke Electric Steel Corp. ..... 30,100 801,413
Schnitzer Steel Industries, Inc.,
Class A.......................... 99,800 2,800,637
Universal Stainless & Alloy
Products, Inc.*.................. 213,700 3,098,650
-------------
TOTAL BASIC MATERIALS............ 9,461,575
-------------
BUSINESS SERVICES (10.7%)
PRINTING, PUBLISHING,
BROADCASTING (0.5%)
Gibson Greetings, Inc............. 25,500 557,812
-------------
PROFESSIONAL SERVICES (3.8%)
Standex International Corp. ...... 103,300 3,641,325
Thomas Group, Inc.*............... 75,400 942,500
-------------
4,583,825
-------------
TRUCKING, SHIPPING (6.4%)
Allied Holdings, Inc.* ........... 125,600 2,402,100
M.S. Carriers*.................... 83,500 2,077,062
MTL, Inc.*........................ 91,500 2,338,969
OMI Corp.*........................ 102,400 940,800
-------------
7,758,931
-------------
TOTAL BUSINESS SERVICES.......... 12,900,568
-------------
CAPITAL GOODS (19.7%)
AEROSPACE (1.9%)
Tracor, Inc.*..................... 77,400 2,351,025
-------------
BUILDING & CONSTRUCTION (8.0%)
Avondale Industries, Inc.*........ 130,000 3,859,375
Cavalier Homes, Inc............... 149,100 1,453,725
HomeUSA, Inc.*.................... 170,800 1,409,100
Walter Industries, Inc.*.......... 142,000 2,928,750
-------------
9,650,950
-------------
BUILDING MATERIALS & FOREST
PRODUCTS (2.7%)
Triangle Pacific Corp.*........... 95,800 3,245,225
-------------
ELECTRICAL EQUIPMENT (2.2%)
General Cable Corp................ 75,200 2,721,300
-------------
MACHINERY (4.9%)
Allied Products Corp.............. 163,225 3,917,400
Gradall Industries, Inc.*......... 120,450 1,987,425
-------------
5,904,825
-------------
TOTAL CAPITAL GOODS.............. 23,873,325
-------------
CONSUMER CYCLICALS (12.7%)
AUTO RELATED (1.3%)
Copart, Inc.* .................... 85,200 1,522,950
-------------
FOOD SERVICES, LODGING (0.1%)
Fresh Choice, Inc.* .............. 33,700 109,525
-------------
HOUSEHOLD FURNITURE,
APPLIANCES (4.2%)
Home Products International,
Inc.* ........................... 184,900 2,172,575
<PAGE>
<CAPTION>
NUMBER OF VALUE
SHARES (NOTE 1)
- ---------------------------------- ----------- --------------
<S> <C> <C>
La-Z-Boy, Inc. ................... 40,900 $ 1,763,812
Zag Industries Ltd.*.............. 132,900 1,179,488
-------------
5,115,875
-------------
LEISURE RELATED (1.4%)
SCP Pool Corp.* .................. 89,200 1,717,100
-------------
RETAIL--GENERAL (5.7%)
Ann Taylor Stores Corp.*.......... 117,800 1,575,575
Filene's Basement Corp.*.......... 356,700 1,426,800
Fingerhut Cos., Inc............... 178,950 3,825,056
-------------
6,827,431
-------------
TOTAL CONSUMER CYCLICALS......... 15,292,881
-------------
CONSUMER NON-CYCLICALS (4.0%)
FOODS (0.7%)
J.M. Smucker Co., Class A......... 33,500 791,437
-------------
SOAPS & TOILETRIES (3.3%)
American Safety Razor Co.* ...... 185,000 3,700,000
USA Detergents, Inc............... 37,950 308,344
-------------
4,008,344
-------------
TOTAL CONSUMER
NON-CYCLICALS .................. 4,799,781
-------------
CREDIT SENSITIVE (28.0%)
BANKS (5.0%)
Cullen/Frost Bankers, Inc......... 50 3,034
Quaker City Bancorp, Inc.*........ 118,987 2,602,841
Texas Regional Bancshares, Inc.,
Class A.......................... 113,225 3,453,363
-------------
6,059,238
-------------
FINANCIAL SERVICES (1.0%)
Interstate/Johnson Lane, Inc. .... 5,200 137,800
Long Beach Financial Corp.* ..... 86,200 1,002,075
-------------
1,139,875
-------------
INSURANCE (15.2%)
Commerce Group, Inc............... 118,900 3,879,113
Delphi Financial Group, Inc.,
Class A*......................... 82,418 3,708,810
Nac Re Corp....................... 71,750 3,502,297
National Western Life Insurance
Co., Class A*.................... 15,700 1,593,550
Pico Holdings, Inc.*.............. 303,150 1,951,528
Terra Nova Bermuda Holdings Ltd.,
Class A.......................... 143,500 3,766,875
-------------
18,402,173
-------------
REAL ESTATE (6.8%)
Equity Inns, Inc.................. 169,500 2,500,125
U.S. Restaurant Properties Master
L.P.............................. 66,200 1,584,662
Weeks Corp........................ 72,300 2,313,600
Western Water Co.*................ 170,050 1,849,294
-------------
8,247,681
-------------
TOTAL CREDIT SENSITIVE........... 33,848,967
-------------
49
<PAGE>
EQ ADVISORS TRUST
WARBURG PINCUS SMALL COMPANY VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
NUMBER OF VALUE
SHARES (NOTE 1)
- --------------------------------- ----------- -------------
ENERGY (6.7%)
COAL & GAS PIPELINES (1.9%)
KCS Energy, Inc................... 108,900 $ 2,259,675
-------------
OIL--DOMESTIC (3.1%)
Forecenergy, Inc.................. 24,800 649,450
Forest Oil Corp.*................. 192,600 3,177,900
-------------
3,827,350
-------------
OIL--SUPPLIES &
CONSTRUCTION (1.7%)
Tokheim Corp.*.................... 99,200 2,052,200
-------------
TOTAL ENERGY..................... 8,139,225
-------------
TECHNOLOGY (0.8%)
OFFICE EQUIPMENT SERVICES (0.8%)
EA Industries, Inc.*.............. 131,000 908,813
-------------
TOTAL COMMON STOCKS (90.4%)
(Cost $108,785,652)............. 109,225,135
-------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- -------------------------------- ------------- -------------
<S> <C> <C>
SHORT-TERM DEBT SECURITIES:
REPURCHASE AGREEMENT (12.5%)
State Street Bank & Trust 5.75%,
dated 12/31/97, due 1/2/98, to
be repurchased at $15,184,849,
collateralized by $15,240,000
of U.S. Treasury Notes, 6.125%
due 3/31/98, valued at
$15,487,650 (Cost $15,180,000) . $15,180,000 $ 15,180,000
-------------
TOTAL INVESTMENTS (102.9%)
(Cost $123,965,652)............. 124,405,135
OTHER ASSETS
LESS LIABILITIES (-2.9%)........ (3,525,461)
-------------
NET ASSETS (100%)................ $120,879,674
=============
</TABLE>
- ------------
* Non-income producing
50
<PAGE>
EQ ADVISORS TRUST
WARBURG PINCUS SMALL COMPANY VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1997
- -----------------------------------------------------------------------------
Investment security transactions for the period from May 1, 1997 to December
31, 1997 were as follows:
<TABLE>
<CAPTION>
<S> <C>
COST OF PURCHASES:
Stocks and long-term corporate debt securities .. $133,392,374
NET PROCEEDS OF SALES AND REDEMPTIONS:
Stocks and long-term corporate debt securities .. 23,670,203
</TABLE>
As of December 31, 1997, the gross unrealized appreciation (depreciation) of
investments based on the aggregate cost of investments for Federal income tax
purposes was as follows:
<TABLE>
<CAPTION>
<S> <C>
Aggregate gross unrealized
appreciation........................... $ 5,047,911
Aggregate gross unrealized
depreciation........................... (4,761,380)
-------------
Net unrealized appreciation............. $ 286,531
=============
Federal income tax cost of investments . $124,118,604
=============
</TABLE>
At December 31, 1997 the Portfolio had loaned securities with a total value
of $12,071,964, which was secured by collateral valued at $12,318,628.
See Notes to Financial Statements.
51
<PAGE>
EQ ADVISORS TRUST
MORGAN STANLEY EMERGING MARKETS EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
NUMBER VALUE
OF SHARES (NOTE 1)
- ----------------------------------- ------------ ------------
<S> <C> <C>
COMMON STOCKS AND WARRANTS:
CHINA & KOREA (2.7%)
KOREA (2.7%)
Korea Electric Power Corp.
(Foreign)*......................... 10,400 $ 96,331
Korea Fund, Inc.* .................. 64,800 429,300
Samsung Electronics Co. (Foreign) . 2,557 57,928
------------
TOTAL CHINA & KOREA ............... 583,559
------------
LATIN AMERICA (21.5%)
ARGENTINA (2.4%)
Nortel Inversora (ADR).............. 1,500 38,250
Telecom Argentina (ADR) ............ 3,202 114,472
Telefonica de Argentina (ADR) ..... 7,590 282,727
YPF S.A., Class D (ADR) ............ 2,674 91,417
------------
526,866
------------
BRAZIL (6.8%)
Brahma (ADR) ....................... 20,150 285,878
Cia Vale do Rio Doce (ADR) ......... 420 8,449
Coteminas .......................... 136,400 48,887
Coteminas (ADR)* + ................. 1,155 19,150
Lightpar ........................... 50,000 15,008
Telebras S.A. ...................... 600,000 61,019
Telebras S.A. (ADR) ................ 7,505 873,863
Unibanco (ADR)* .................... 4,295 138,245
------------
1,450,499
------------
CHILE (0.6%)
CCU S.A. (ADR) ..................... 1,800 52,875
Enersis S.A. (ADR) ................. 1,300 37,700
Santa Isabel S.A. (ADR) ............ 2,200 38,500
------------
129,075
------------
MEXICO (10.8%)
Apasco S.A. ........................ 5,000 34,429
Cemex S.A. CPO* .................... 35,925 162,688
Cifra S.A., Class C ................ 17,239 38,713
Cifra S.A., Class V ................ 6,050 14,877
Femsa S.A., Class B ................ 70,290 565,111
Grupo Financeiro Banamex, Class B* 30,000 89,888
Grupo Financeiro Bancomer, Class B* 103,700 67,418
Grupo Televisa S.A. (GDR)* ......... 10,285 397,901
Kimberly Clark de Mexico,
Class A ........................... 61,940 294,330
Telmex, Class L (ADR) .............. 9,500 532,594
TV Azteca S.A. (ADS)* .............. 5,340 120,484
------------
2,318,433
------------
PERU (0.5%)
Telefonica de Peru S.A. (ADS) ..... 4,430 103,274
------------
VENEZUELA (0.4%)
CANTV (ADR) ........................ 1,897 78,963
------------
TOTAL LATIN AMERICA ............... 4,607,110
------------
<PAGE>
<CAPTION>
NUMBER VALUE
OF SHARES (NOTE 1)
- ------------------------------------- ---------- -------------
<S> <C> <C>
NORTH AFRICA AND THE MIDDLE EAST (9.1%)
EGYPT (1.4%)
Commercial International Bank ..... 7,680 $ 154,977
Helwan Portland Cement ............. 2,485 50,028
Madinet Nasar Housing &
Development* ...................... 1,470 95,048
------------
300,053
------------
ISRAEL (2.5%)
Bank Hapoalim Ltd................... 46,000 110,411
Elbit Ltd. ......................... 26,600 101,222
First International Bank of Israel,
Class 5 ........................... 91 66,787
Koor Industries Ltd. (ADR) ......... 7,700 168,919
Teva Pharmaceutical Industries
(ADR) ............................. 1,800 85,162
------------
532,501
------------
TURKEY (5.2%)
Arcelik A.S......................... 465,000 43,752
Ege Biracilik ...................... 1,229,000 111,187
Eregli Demir Celik ................. 1,308,000 201,959
Garanti Bankasi A.S. ............... 5,691,000 281,461
Vestel Elektronik Sanayi Ve Ticaret
A.S. .............................. 192,000 15,749
Yapi Ve Kredi Bankasi A.S. ......... 12,398,000 472,590
------------
1,126,698
------------
TOTAL NORTH AFRICA AND THE MIDDLE
EAST ............................. 1,959,252
------------
OTHER EUROPEAN COUNTRIES (11.1%)
HUNGARY (1.2%)
Gedeon Richter ..................... 59 6,710
Gedeon Richter (Registered)(GDS) ... 1,643 172,515
MOL Magyar Olaj-es Gazipari Rt.
(GDR)(Registered) ................. 3,393 82,789
------------
262,014
------------
POLAND (2.1%)
Agros Holdings S.A., Class C* ..... 6,090 126,119
Bank Inicjatyw Gospodar (GDS)* + .. 3,000 44,043
Bank of Handlowy W Warszawie S.A.* 4,450 56,809
Big Bank Gdanski S.A. (GDR)* ....... 8,350 129,425
Elektrim S.A. ...................... 9,190 88,902
------------
445,298
------------
RUSSIA (7.8%)
LUKoil Holding (ADR) ............... 8,500 784,125
Moscow Energy (Registered).......... 64,300 81,596
Norilsk Nickel* (Registered) ...... 7,300 46,355
Rostelecom* ........................ 22,700 80,585
Surgutneftgaz (ADR)................. 51,930 530,787
Unified Energy System (GDR)* ...... 5,250 147,378
------------
1,670,826
------------
TOTAL OTHER EUROPEAN COUNTRIES ... 2,378,138
------------
52
<PAGE>
EQ ADVISORS TRUST
MORGAN STANLEY EMERGING MARKETS EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
NUMBER VALUE
OF SHARES (NOTE 1)
- ----------------------------------- ------------ ------------
SOUTHEAST ASIA (11.6%)
HONG KONG (1.7%)
Cheung Kong Ltd. .................. 11,300 $ 74,006
China Light & Power ................ 14,000 77,688
China Resources Enterprises Ltd. ... 7,200 16,074
HSBC Holdings plc (Registered) ..... 2,600 64,086
NG Fung Hong Ltd. .................. 46,000 48,381
Shanghai Industrial Holdings Ltd. .. 7,000 26,016
Sun Hung Kai Properties Ltd. ...... 8,700 60,627
------------
366,878
------------
INDONESIA (2.1%)
Astra International ................ 157,900 40,910
Bank International Indonesia
(Foreign) ......................... 117,700 6,955
Bank Negara Indonesia .............. 130,000 12,409
Bank Negara Indonesia (Foreign) .... 315,700 30,135
Barito Pacific Timber .............. 5,400 1,546
Bimantara Citra .................... 8,587 1,639
Citra Marga Nusaphala Persada ..... 15,200 1,658
Daya Guna Samudera ................. 4,900 3,720
Gudang Garam ....................... 66,300 100,957
HM Sampoerna ....................... 17,500 13,205
Indah Kiat Paper & Pulp Co. ....... 30,300 5,371
Indofood Sukses Makmur ............. 15,200 4,975
London Sumatra Indonesia ........... 2,200 1,250
Matahari Putra Prima ............... 84,000 6,873
Mayora Indah ....................... 192,000 16,582
Tambang Timah ...................... 3,600 3,862
Telekomunikasi, Class B ............ 92,000 48,927
Telekomunikasi (ADR) ............... 13,800 152,662
------------
453,636
------------
MALAYSIA (2.1%)
AMMB Holdings Bhd. ................ 7,400 4,852
Commerce Asset Holding Bhd. ....... 15,000 7,173
Genting Bhd. ....................... 23,800 59,661
Golden Hope Plantations Bhd. ...... 35,000 40,494
IOI Corp., Bhd. .................... 11,000 3,563
Kuala Lumpur Kepong Bhd. ........... 6,000 12,881
Magnum Corp. ....................... 15,000 9,024
Malayan Banking Bhd. ............... 14,400 41,836
Malayan United Industries Bhd. .... 14,000 2,448
Malaysian International Shipping
Bhd. (Foreign) .................... 5,000 7,327
Malaysian Pacific Industries Bhd. .. 3,000 7,212
Malaysian Resources Corp. .......... 20,000 4,628
Nestle (Malaysia) Bhd. ............. 4,000 18,511
New Straits Times Press Bhd. ...... 3,000 3,718
Perusahaan Otomobil Nasional Bhd. . 6,000 5,862
Petronas Gas Bhd. .................. 14,000 31,855
Rashid Hussain Bhd. ................ 5,000 3,882
Resorts World Bhd. ................. 5,000 8,420
RHB Capital Bhd. ................... 23,000 11,117
Rothmans of Pall Mall Bhd. ......... 1,600 12,444
Sime Darby Bhd. .................... 28,000 26,924
Technology Resources Industries
Bhd. .............................. 9,000 5,322
Telekom Malaysia Bhd. .............. 17,000 50,263
Tenaga Nasional Bhd. ............... 20,000 42,679
<PAGE>
<CAPTION>
NUMBER VALUE
OF SHARES (NOTE 1)
- ------------------------------------ ----------- ------------
<S> <C> <C>
United Engineers Ltd. .............. 18,000 $ 14,994
------------
437,090
------------
PHILIPPINES (1.6%)
Ayala Corp. ....................... 150,000 58,333
Ayala Land, Inc., Class B .......... 19,510 7,708
C&P Homes, Inc. .................... 32,660 1,903
Filinvest Land, Inc.* .............. 26,600 1,051
Manila Electronics Co., Class B ... 14,790 48,935
Metro Pacific Corp. ................ 17,400 481
Metropolitan Bank & Trust Co. ..... 1,690 11,371
Petron Corp. ....................... 23,890 1,976
Philippines Long Distance Telephone
Co. ............................... 490 10,647
Philippines Long Distance Telephone
Co. (ADR) ......................... 5,000 112,500
Philippine National Bank* .......... 840 1,846
San Miguel Corp., Class B .......... 35,470 43,352
SM Prime Holdings, Inc. ............ 303,670 44,988
------------
345,091
------------
TAIWAN (2.8%)
Acer, Inc. (GDR)* .................. 8,000 57,000
Asustek Computer, Inc. (GDR)* ...... 5,681 90,754
ROC Taiwan Fund .................... 47,600 386,750
Siliconware Percision Industries
Co. (GDR)* ........................ 5,200 66,690
------------
601,194
------------
THAILAND (1.3%)
Advance Agro PCL (Foreign)*# ....... 700 585
Advanced Information Service PCL
(Foreign)#......................... 16,100 76,906
Bangkok Bank PCL (Foreign) ......... 18,500 46,106
Bangkok Expressway PCL (Foreign)*# . 1,400 778
Bank of Ayudhya Ltd.
(Foreign)(Registered).............. 300 121
Electricity Generating PCL
(Foreign) ......................... 2,600 4,860
Industrial Finance Corp. of
Thailand (Foreign)# ............... 2,600 400
53
Siam Cement Co., Ltd. (Foreign) .... 300 312
Siam Commercial Bank PCL (Foreign)# 42,000 47,975
Siam Commercial Bank PCL*
(Warrants)(expiring 12/31/02) .... 10,500 --
Telecomasia Corp. (Foreign)* ...... 1,400 267
Thai Farmers Bank PCL (Foreign)# .. 49,900 90,680
Thailand Petrochemical PCL
(Foreign)# ........................ 700 67
United Communications Industry PCL
(Foreign)# ........................ 33,200 13,445
------------
282,502
------------
TOTAL SOUTHEAST ASIA .............. 2,486,391
------------
SOUTHERN CENTRAL ASIA (12.9%)
INDIA (8.9%)
Associated Cement Cos., Ltd. ....... 1 35
Great Eastern Shipping Co. (GDR) .. 30,245 162,567
53
<PAGE>
EQ ADVISORS TRUST
MORGAN STANLEY EMERGING MARKETS EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
NUMBER VALUE
OF SHARES (NOTE 1)
- ----------------------------------- ------------ ------------
Indian Petrochemicals Corp., Ltd.
(GDS) ............................. 16,870 $ 80,133
ITC Ltd. (GDR) ..................... 27,235 544,700
Mahindra & Mahindra
(GDR)(Registered) ................. 34,320 356,070
Morgan Stanley India Investment
Fund, Inc.*++ ..................... 11,200 93,800
Reliance Industries (GDR) .......... 11,580 99,878
State Bank of India (GDR) .......... 17,260 312,837
Tata Engineering & Locomotive Co.
(GDS)(Registered)* ................ 30,000 251,250
------------
1,901,270
------------
PAKISTAN (4.0%)
Fauji Fertilizer Co., Ltd. ....... 25,000 47,862
Hub Power Co.* ..................... 281,000 365,889
Pakistan Telecommunications Corp.,
Class A ........................... 297,000 224,407
Pakistan Telecommunications Corp.
(GDS) ............................. 2,970 220,020
------------
858,178
------------
TOTAL SOUTHERN CENTRAL ASIA ...... 2,759,448
------------
SUB-SAHARAN AFRICA (6.2%)
SOUTH AFRICA (5.6%)
Amalgamated Banks of South Africa
Group Ltd.......................... 45,688 262,871
Barlow Rand Ltd. ................... 20,800 176,521
Ellerine Holdings Ltd. ............. 29,000 187,116
Morgan Stanley Africa Investment
Fund, Inc.++ ...................... 1,700 19,550
Persetel Holdings Ltd. ............. 13,400 73,519
Rembrandt Group Ltd. ............... 26,094 190,350
Sasol Ltd. ......................... 18,000 188,267
Sasol Ltd. (ADR) ................... 10,000 105,625
------------
1,203,819
------------
ZIMBABWE (0.6%)
Meikles Africa Ltd.................. 134,625 121,163
------------
TOTAL SUB-SAHARAN AFRICA .......... 1,324,982
------------
TOTAL COMMON STOCKS
AND WARRANTS (75.1%)
(Cost $19,020,308) ................ 16,098,880
------------
PREFERRED STOCKS AND RIGHTS:
LATIN AMERICA (7.2%)
BRAZIL (7.2%)
Banco Bradesco S.A.................. 16,700,000 164,599
Banco Bradesco S.A.* (Rights) ..... 714,008 --
Banco Itau S.A. .................... 153,000 82,255
Brahma ............................. 30,000 20,160
CEMIG .............................. 6,334,000 275,199
Cia Vale do Rio Doce ............... 5,000 100,578
CRT, Class A ....................... 488,600 601,967
Lojas Renner S.A. .................. 430,000 13,485
Petrobras S.A. ..................... 950,000 222,167
Telebras S.A. ...................... 449,000 51,214
------------
TOTAL PREFERRED STOCKS
AND RIGHTS (7.2%)
(Cost $1,520,320) ................ 1,531,624
------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
VALUE
(NOTE 1)
- ------------------------- -------------
<S> <C>
TOTAL INVESTMENTS (82.3%)
(Cost $20,540,628) ...... $17,630,504
OTHER ASSETS
LESS LIABILITIES (17.7%) 3,802,127
-------------
NET ASSETS (100%) ........ $21,432,631
=============
</TABLE>
<TABLE>
<CAPTION>
MARKET SECTOR DIVERSIFICATION
(UNAUDITED)
<S> <C> <C>
As a Percentage of Total
Equity Investments
Basic Materials........ 4.5%
Business Services...... 3.9
Capital Goods.......... 2.2
Consumer Cyclicals .... 6.0
Consumer
Non-Cyclicals......... 10.0
Credit Sensitive
Banks................. 14.9
Financial Services ... 6.4
Real Estate........... 1.1
Utility--Electric .... 6.4
Utility--Gas.......... 0.2
Utility--Telephone ... 19.1
------
Total Credit
Sensitive............. 48.1
Diversified............ 8.3
Energy................. 9.7
Technology............. 7.3
-------
100.0%
=======
</TABLE>
- ------------
* Non-income producing
+ Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may only be resold to qualified
institutional buyers. At December 31, 1997 these securities amounted
to $63,193 or 0.30% of net assets.
++ The security is advised by the same Adviser as the Portfolio.
# Securities (totaling $230,836 or 1.08% of net assets) valued at fair
value.
Glossary:
ADR--American Depositary Receipt
ADS--American Depositary Share
CPO--Certificate of Participation
GDR--Global Depositary Receipt
GDS--Global Depositary Share
54
<PAGE>
EQ ADVISORS TRUST
MORGAN STANLEY EMERGING MARKETS EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1997
- -----------------------------------------------------------------------------
Swap Agreements:
The Portfolio had the following Total Return Swap Agreement open at
December 31, 1997:
<TABLE>
<CAPTION>
NOTIONAL UNREALIZED
AMOUNT DESCRIPTION (DEPRECIATION)
- ---------- ---------------------------------------------------------------------------------------- --------------
<S> <C> <C>
$250,000 Agreement with Goldman Sachs International terminating November 30, 1998 the Portfolio $(72,597)
to pay 12 month USD-LIBOR minus 4.00% and to receive the THB SET Index converted into
USD at the mid-market rate on October 30, 1998 +.
</TABLE>
+ Illiquid security: is not actively traded.
Glossary:
LIBOR--London Interbank Offer Rate
THB--Thai Baht
USD--U.S. Dollar
Investment security transactions for the period from August 20, 1997 to
December 31, 1997 were as follows:
<TABLE>
<CAPTION>
<S> <C>
COST OF PURCHASES:
Stocks and long-term corporate debt
securities.................................... $23,775,213
NET PROCEEDS OF SALES AND REDEMPTIONS:
Stocks and long-term corporate debt
securities.................................... 2,825,533
</TABLE>
As of December 31, 1997, the gross unrealized appreciation (depreciation) of
investments based on the aggregate cost of investments for Federal income tax
purposes was as follows:
<TABLE>
<CAPTION>
<S> <C>
Aggregate gross unrealized
appreciation........................... $ 621,487
Aggregate gross unrealized
depreciation........................... (3,804,299)
--------------
Net unrealized (depreciation)........... $(3,182,812)
==============
Federal income tax cost of investments . $20,813,316
==============
</TABLE>
At December 31, 1997 the Portfolio had loaned securities with a total value
of $77,695, which was secured by collateral valued at $84,000.
The Portfolio has a net capital loss carryforward of $70,373 which expires in
the year 2005.
See Notes to Financial Statements.
55
<PAGE>
EQ ADVISORS TRUST
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
Note 1 Organization and Significant Accounting Policies
EQ Advisors Trust (the "Trust") was organized as a Delaware business trust
on October 31, 1996 and is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management investment
company with fifteen diversified series portfolios and three non-diversified
series portfolios (each a "Portfolio"). The diversified Portfolios include
the Merrill Lynch Basic Value Equity Portfolio which commenced operations on
May 1, 1997, MFS Emerging Growth Companies Portfolio which commenced
operations on May 1, 1997, MFS Research Portfolio which commenced operations
on May 1, 1997, EQ/Putnam Balanced Portfolio which commenced operations on
May 1, 1997, EQ/Putnam Growth & Income Value Portfolio which commenced
operations on May 1, 1997, EQ/Putnam International Equity Portfolio which
commenced operations on May 1, 1997, EQ/Putnam Investors Growth Portfolio
which commenced operations on May 1, 1997, T. Rowe Price Equity Income
Portfolio which commenced operations on May 1, 1997, T. Rowe Price
International Stock Portfolio which commenced operations on May 1, 1997,
Warburg Pincus Small Company Value Portfolio which commenced operations on
May 1, 1997, BT Equity 500 Index Portfolio which received initial capital on
December 31, 1997, BT International Equity Index Portfolio which received
initial capital on December 31, 1997, BT Small Company Index Portfolio which
received initial capital on December 31, 1997, JPM Core Bond Portfolio which
received initial capital on December 31, 1997 and the Lazard Large Cap Value
Portfolio which received initial capital on December 31, 1997. The
non-diversified Portfolios include the Merrill Lynch World Strategy Portfolio
which commenced operations on May 1, 1997, Morgan Stanley Emerging Markets
Equity Portfolio which commenced operations on August 20th, 1997 and the
Lazard Small Cap Value Portfolio which received initial capital on December
31, 1997. The Portfolios that received initial capital on December 31, 1997,
had no operations except for the issuance of shares of Class IB Common Stock.
The Trust has the right to issue two classes of shares, Class IA and Class
IB. As of and during the period ended December 31, 1997, the Trust only had
Class IB shares outstanding. The Class IB shares are subject to distribution
fees imposed under a distribution plan (the "Distribution Plan") adopted
pursuant to Rule 12b-1 under the 1940 Act. The Trust's shares are currently
sold only to insurance company separate accounts in connection with variable
life insurance contracts and variable annuity certificates and contracts
issued by The Equitable Life Assurance Society of the United States
("Equitable"), a wholly-owned subsidiary of The Equitable Companies
Incorporated.
The investment objectives and certain investment policies of each
Portfolio are as follows:
Merrill Lynch Basic Value Equity Portfolio (advised by Merrill Lynch Asset
Management, L.P.) -- Capital appreciation and, secondarily, income by
investing in securities, primarily equities, that the Adviser (as defined
below) of the Portfolio believes are undervalued and therefore represent
basic investment value.
Merrill Lynch World Strategy Portfolio (advised by Merrill Lynch Asset
Management, L.P.) -- High total investment return by investing primarily in a
portfolio of equity and fixed income securities, including convertible
securities, of U.S. and foreign issuers.
MFS Emerging Growth Companies Portfolio (advised by Massachusetts
Financial Services Co.) -- Long-term growth of capital. Dividend and interest
income from portfolio securities, if any, is incidental to the Portfolio's
investment objective. The Portfolio invests primarily in common stocks of
emerging growth companies that the Adviser believes are early in their life
cycle but which have the potential to become major enterprises.
MFS Research Portfolio (advised by Massachusetts Financial Services Co.)
- -- Long-term growth of capital and future income, by investing a substantial
portion of its assets in common stock or securities convertible into common
stock of companies believed by the Adviser to possess better than average
prospects for long-term growth.
56
<PAGE>
EQ ADVISORS TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997
EQ/Putnam Balanced Portfolio (advised by Putnam Investment Management,
Inc.) -- Balanced investment composed of a well-diversified portfolio of
stocks and bonds that will produce both capital growth and current income.
EQ/Putnam Growth & Income Value Portfolio (advised by Putnam Investment
Management, Inc.) -- Capital growth. Current income is a secondary objective.
The Portfolio invests primarily in common stocks that offer potential for
capital growth and may, consistent with the Portfolio's investment objective,
invest in common stocks that offer potential for current income.
EQ/Putnam International Equity Portfolio (advised by Putnam Investment
Management, Inc.) -- Capital appreciation. The Portfolio is designed for
investors seeking capital appreciation primarily through a diversified
portfolio of equity securities of companies organized under the laws of a
country other than the United States.
EQ/Putnam Investors Growth Portfolio (advised by Putnam Investment
Management, Inc.) -- Long-term growth of capital and any increased income
that results from this growth, by investing primarily in common stocks that
the Adviser believes afford the best opportunity for long-term capital
growth.
T. Rowe Price Equity Income Portfolio (advised by T. Rowe Price
Associates, Inc.) -- Substantial dividend income and also capital
appreciation by investing primarily in dividend-paying common stocks of
established companies.
T. Rowe Price International Stock Portfolio (advised by Rowe Price-Fleming
International, Inc.) -- Long-term growth of capital through investment
primarily in common stocks of established non-United States companies.
Warburg Pincus Small Company Value Portfolio (advised by Warburg Pincus
Asset Management, Inc.) -- Long-term capital appreciation. The Portfolio
invests primarily in equity securities of small capitalization companies
(i.e. companies having market capitalizations of $1 billion or less at the
time of initial purchase) that the Adviser considers to be relatively
under-valued.
Morgan Stanley Emerging Markets Equity Portfolio (advised by Morgan
Stanley Asset Management, Inc.) -- Long-term capital appreciation. In
pursuing its investment objective, the Adviser focuses on issuers in emerging
market countries in which it believes the economies are developing strongly
and in which the markets are becoming more sophisticated.
BT Equity 500 Index Portfolio (advised by Bankers Trust Co.) -- Replicate
as closely as possible (before the deduction of Portfolio expenses) the total
return of the Standard & Poor's 500 Composite Stock Price Index ("S&P 500")
by allocating the Portfolio's investment among common stocks included in the
S&P 500 in approximately the same proportions as they are represented in the
S&P 500, beginning with the heaviest weighted stocks that make up a larger
portion of the S&P 500's value.
BT International Equity Index Portfolio (advised by Bankers Trust Co.) --
Replicate as closely as possible (before the deduction of Portfolio expenses)
the total return of the Morgan Stanley Capital International Europe,
Australia, Far East Index ("EAFE Index") by investing in a statistically
selected sample of the securities of companies included in the EAFE Index,
although not all companies within a country will be represented in the
Portfolio at the same time.
BT Small Company Index Portfolio (advised by Bankers Trust Co.) --
Replicate as closely as possible (before the deduction of Portfolio expenses)
the total return of the Russell 2000 Small Stock Index ("Russell 2000 Index")
by investing in a statistically selected sample of the 2,000 stocks included
in the Russell 2000 Index.
57
<PAGE>
EQ ADVISORS TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997
JPM Core Bond Portfolio (advised by J.P. Morgan Investment Management
Inc.) -- High total return consistent with moderate risk of capital and
maintenance of liquidity. Under normal circumstances, all of the Portfolio's
assets will, at the time of purchase, consist of investment grade securities
rated BBB or better by Standard & Poor's Rating Service or Baa or better by
Moody's Investors Service, Inc. or unrated securities of comparable quality.
Lazard Large Cap Value Portfolio (advised by Lazard Asset Management) --
Capital appreciation by investing primarily in equity securities of companies
with relatively large market capitalizations (i.e., companies having market
capitalizations of at least $1 billion at the time of initial purchase) that
appear to the Adviser to be inexpensively priced relative to the return on
total capital or equity.
Lazard Small Cap Value Portfolio (advised by Lazard Asset Management) --
Capital appreciation by investing primarily in equity securities of United
States companies with small market capitalizations (i.e., companies in the
range of companies represented in the Russell 2000 Index) that the Adviser
considers inexpensively priced relating to the return on total capital or
equity.
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures. Actual results
could differ from those estimates.
The following is a summary of the significant accounting policies of the
Trust:
Stocks listed on national securities exchanges and certain
over-the-counter issues traded on the NASDAQ national market system are
valued at the last sale price on the primary exchange for such securities or,
if there is no sale, at the latest available bid price. Other unlisted stocks
are valued at their last sale price or, if no reported sale occurs during the
day, at a bid price estimated by a broker.
Convertible preferred stocks listed on national securities exchanges are
valued as of their last sale price or, if there is no sale, at the latest
available bid price.
Convertible bonds and unlisted convertible preferred stocks are valued at
bid prices obtained from one or more of the major dealers in such securities.
Where there is a discrepancy between dealers, values may be adjusted based on
recent premium spreads to the underlying common stocks.
Mortgage backed and asset backed securities are valued at prices obtained
from a bond pricing service where available, or at a bid price obtained from
one or more of the major dealers in such securities. If a quoted price is
unavailable, an equivalent yield or yield spread quote will be obtained from
a broker and converted to a price.
Options, including options on futures that are traded on exchanges, are
valued at their last sale price, and if the last sale price is not available
then the previous day's sale price is used. However, if the bid price is
higher or the asked price is lower than the previous last sale price, the
higher bid or lower asked price may be used. Options not traded on an
exchange or actively traded are valued at fair value as determined in good
faith by the Board of Trustees.
Long-term corporate bonds are valued at a price obtained from a bond
pricing service of a major dealer in bonds when such prices are available;
however, when such prices are not available, such bonds are valued at a bid
price estimated by a broker.
U.S. Treasury securities and other obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities, are valued at
representative quoted bid prices.
Foreign securities not traded directly, or in American Depositary Receipt
(ADR) or similar form in the United States, are valued at representative
quoted bid prices from the primary exchange in the currency of the country of
origin.
58
<PAGE>
EQ ADVISORS TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997
Short-term debt securities that mature in 60 days or less are valued at
amortized cost, which approximates market value. Short-term debt securities
that mature in more than 60 days are valued at representative quoted prices.
Futures contracts are valued at their last sale price or, if there is no
sale, at the latest available bid price.
Forward foreign exchange contracts are valued by interpolating between the
forward and spot currency rates as quoted by a pricing service as of a
designated hour on the valuation date.
Other securities and assets for which market quotations are not readily
available or for which valuation can not be provided, are valued at fair
value as determined in good faith by the Board of Trustees.
Securities transactions are recorded on the trade date net of brokerage
fees, commissions, and transfer fees.
Interest income (including amortization of premium and discount on
long-term securities using the effective yield method) is accrued daily.
Dividend income is recorded on the ex-dividend date.
Realized gains and losses on the sale of investments are computed on the
basis of the identified cost of the investments sold.
Expenses attributable to a single Portfolio are charged to that Portfolio.
Expenses of the Trust not attributable to a single Portfolio are charged to
each Portfolio in proportion to the average net assets of each Portfolio.
Equitable pays substantially all operating expenses on behalf of the Trust
for which Equitable is then reimbursed by the Trust.
The books and records of the Trust are kept in U.S. dollars. Foreign
currency amounts are translated into U.S. dollars at the bid price last
quoted by a composite list of major U.S. banks at the following dates:
(i) market value of investment securities, other assets and liabilities
- -at the valuation date.
(ii) purchase and sales of investment securities, income and expenses -at
the date of such transactions.
The Portfolios do not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss
on securities.
Net currency gains or losses realized and unrealized as a result of
differences between interest or dividends, withholding taxes, forward foreign
currency exchange contracts and foreign cash recorded on the Portfolio's
books and the U.S. dollar equivalent amount actually received or paid are
presented under foreign currency transactions in the realized and unrealized
gains and losses section of the Statements of Operations.
The Trust intends to comply with the requirements of the Internal Revenue
Code of 1986, as amended (the "Code") applicable to regulated investment
companies and to distribute substantially all of its net investment income
and net realized capital gains to shareholders of each Portfolio. Therefore,
no Federal income tax provision is required. Dividends from net investment
income are declared and distributed annually for all Portfolios. Dividends
from net realized short-term and long-term capital gains are declared and
distributed at least annually to the shareholders of the Portfolios to which
such gains are attributable. All dividends are reinvested in additional full
and fractional shares of the related Portfolios. All dividends are
distributed on a tax basis and, as such, the amounts may differ from
financial statement investment income and realized capital gains. Those
differences are primarily due to differing book and
59
<PAGE>
EQ ADVISORS TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997
tax treatments for deferred organization costs, foreign currency
transactions, post-October losses, losses due to wash sales transactions,
mark-to-market of forward contracts, mark-to-market of passive foreign
investment companies and straddled transactions. In addition, each Portfolio
will comply with the investment diversification requirements of Subchapter L
of the Code applicable to segregated asset accounts.
Net capital and net currency losses incurred after October 31 and within
the taxable year are deemed to arise on the first business day of the
Portfolio's next taxable year. For the period from November 1, 1997 to
December 31, 1997 the following Portfolios incurred and elected to defer
until January 1, 1998 for U.S. Federal income tax purposes net capital and
net currency losses as stated below:
<TABLE>
<CAPTION>
NET NET
CAPITAL CURRENCY
LOSSES LOSSES
----------- ----------
<S> <C> <C>
Merrill Lynch Basic Value Equity Portfolio ...... $ 22,052 $ --
Merrill Lynch World Strategy Portfolio ........... 358,116 --
MFS Emerging Growth Companies Portfolio ......... 655,690 1,027
MFS Research Portfolio ........................... 583,491 18,652
EQ/Putnam Balanced Portfolio ..................... 11,458 --
EQ/Putnam Growth & Income Value Portfolio ....... 248,858 --
EQ/Putnam International Equity Portfolio ........ 58,646 --
EQ/Putnam Investors Growth Portfolio ............. 221,088 --
T. Rowe Price Equity Income Portfolio ............ -- 1,734
T. Rowe Price International Stock Portfolio ..... 172,782 34,852
Warburg Pincus Small Company Value Portfolio .... 1,313,006 --
Morgan Stanley Emerging Markets Equity Portfolio 35,416 5,249
</TABLE>
Costs incurred by the Trust in connection with its organization have been
allocated equally to and capitalized by each of the initial twelve Portfolios
and are deferred and amortized on a straight line basis over a 60-month
period from the date the Portfolios commenced operations. On December 31,
1997 an additional $188,040 in organizational costs was capitalized and
allocated evenly among the BT Equity 500 Index Portfolio, BT International
Equity Index Portfolio, BT Small Company Index Portfolio, JPM Core Bond
Portfolio, Lazard Large Cap Value Portfolio and the Lazard Small Cap Value
Portfolio in connection with their organization. Each of these Portfolios
commenced operations on January 2, 1998.
For all Portfolios, the Board of Trustees has approved the lending of
portfolio securities, through its custodian bank Chase Manhattan Bank, N.A.
("Chase") acting as lending agent, to certain approved broker-dealers in
exchange for negotiated lenders' fees. By lending investment securities, a
Portfolio attempts to increase its net investment income through the receipt
of interest on the loan. Any gain or loss in the market price of the
securities loaned that might occur and any interest earned or dividends
declared during the term of the loan would be for the account of the
Portfolio. Risks of delay in recovery of the securities or even loss of
rights in the collateral may occur should the borrower of the securities fail
financially. Risks may also arise to the extent that the value of the
securities loaned increases above the value of the collateral received. Any
such loan of portfolio securities will be continuously secured by collateral
in cash or high grade debt securities at least equal at all times to the
market value of the security loaned. Chase will indemnify each Portfolio from
any loss resulting from a borrower's failure to return a loaned security when
due. Chase invests the cash collateral and retains a portion of the interest
earned. The net amount of interest earned, after the interest rebate, is
included in the Statements of Operations as securities lending income. At
December 31, 1997, the cash collateral received by each Portfolio for
securities loaned was invested by Chase in repurchase agreements in which
each Portfolio has a pro rata interest equal to the amount of cash collateral
contributed.
60
<PAGE>
EQ ADVISORS TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997
Repurchase Agreements:
Each Portfolio, except for the Merrill Lynch Basic Value Equity Portfolio
and the Merrill Lynch World Strategy Portfolio, may enter into repurchase
agreements with qualified and Board of Trustees approved banks,
broker-dealers or other financial institutions as a means of earning a fixed
rate of return on its cash reserves for periods as short as overnight. A
repurchase agreement is a contract pursuant to which a Portfolio, against
receipt of securities of at least equal value including accrued interest,
agrees to advance a specified sum to the financial institution which agrees
to reacquire the securities at a mutually agreed upon time (usually one day)
and price. Each repurchase agreement entered into by a Portfolio will provide
that the value of the collateral underlying the repurchase agreement will
always be at least equal to the repurchase price, including any accrued
interest. A Portfolio's right to liquidate such securities in the event of a
default by the seller could involve certain costs, losses or delays and, to
the extent that proceeds from any sale upon a default of the obligation to
repurchase are less than the repurchase price, the Portfolio could suffer a
loss.
Options Written:
All Portfolios (except for the MFS Research Portfolio and the Lazard Small
Cap Value Portfolio) may write (sell) covered options as a hedge to provide
protection against adverse movements in the price of securities in the
Portfolio or to enhance investment performance. Each of the Portfolios
(except for the MFS Research Portfolio, BT Equity 500 Index Portfolio, BT
Small Company Index Portfolio, Lazard Large Cap Value Portfolio and Lazard
Small Cap Value Portfolio) may purchase and sell exchange traded options on
foreign currencies. When a Portfolio writes an option, an amount equal to the
premium received by the Portfolio is recorded as a liability and is
subsequently adjusted on a daily basis to the current market price of the
option written. Premiums received from writing options which expire
unexercised are recognized as gains on the expiration date. Premiums received
from writing options which are exercised or are canceled in closing purchase
transactions are offset against the cost of any securities purchased or added
to the proceeds or netted against the amount paid on the transaction to
determine the realized gain or loss. In writing options, a Portfolio must
assume that the option may be exercised at any time prior to the expiration
of its obligation as a writer, and that in such circumstances the net
proceeds of the sale or cost of purchase of the underlying securities and
currencies pursuant to the call or put option may be substantially below or
above the prevailing market price. A Portfolio also has the additional risk
of not being able to enter into a closing purchase transaction if a liquid
secondary market does not exist and bears the risk of unfavorable changes in
the price of the financial instruments underlying the options.
Futures Contracts, Forward Commitments and Forward Foreign Currency Exchange
Contracts:
The futures contracts used by the Portfolios are agreements to buy or sell
a financial instrument for a set price in the future. Each Portfolio (with
the exception of the MFS Research Portfolio, the Lazard Large Cap Value
Portfolio and the Lazard Small Cap Value Portfolio) may buy or sell futures
contracts for the purpose of protecting its portfolio securities against
future changes in interest rates which might adversely affect the value of
the Portfolio's securities or the price of securities that it intends to
purchase at a later date. Initial margin deposits are made upon entering into
futures contracts and can be in cash, certain money market instruments,
treasury securities or other liquid, high grade debt. During the period the
futures contracts are open, changes in the market price of the contract are
recognized as unrealized gains or losses by "marking-to-market" at the end of
each trading day. Variation margin payments on futures contracts are received
or made, depending upon whether unrealized gains or losses are incurred. When
the contract is closed, the Portfolio records a realized gain or loss equal
to the difference between the proceeds from (or cost of) the closing
transactions and the Portfolio's basis in the contract. Should interest rates
move unexpectedly, the Portfolio may not achieve the anticipated benefits of
the futures contracts and may incur a loss. The use of futures contracts
transactions involves the risk of imperfect correlation in movements in the
price of futures contracts, interest rates and the underlying hedged assets.
61
<PAGE>
EQ ADVISORS TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997
Each Portfolio (except the Warburg Pincus Small Company Value Portfolio)
may make contracts to purchase securities for a fixed price at a future date
beyond customary settlement time ("forward commitments") if it holds, and
maintains until the settlement date in a segregated account, cash or liquid
securities in an amount sufficent to meet the purchase price, or if it enters
into offsetting contracts for the forward sale of other securities it owns.
Forward commitments may be considered securities in themselves and involve a
risk of loss if the value of the security to be purchased declines prior to
the settlement date, which risk is in addition to the risk of decline in
value of the Portfolio's other assets. Where such purchases are made through
dealers, a Portfolio relies on the dealer to consummate the sale. The
dealer's failure to do so may result in the loss to a Portfolio of an
advantageous yield or price.
Each of the Portfolios (except the BT Equity 500 Index Portfolio, BT Small
Company Index Portfolio and Lazard Small Cap Value Portfolio) may purchase
foreign currency on a spot (or cash) basis. In addition, each of the
Portfolios (except the MFS Research Portfolio, BT Equity 500 Index Portfolio,
BT Small Company Index Portfolio, Lazard Large Cap Value Portfolio and Lazard
Small Cap Value Portfolio) may enter into contracts to purchase or sell
foreign currencies at a future date ("forward contracts"). A forward foreign
currency exchange contract is a commitment to purchase or sell a foreign
currency at a future date at a negotiated forward rate. The gain or loss
arising from the difference between the original contracts and the closing of
such contracts is included in realized gains or losses from foreign currency
transactions. The Advisers, as defined below, may engage in these forward
contracts to protect against uncertainty in the level of future exchange
rates in connection with the purchase and sale of portfolio securities
("transaction hedging") and to protect the value of specific portfolio
positions ("position hedging").
Swaps:
The Morgan Stanley Emerging Markets Equity Portfolio, JPM Core Bond
Portfolio and BT International Equity Index Portfolio may each invest in swap
contracts, which are derivatives in the form of a contract or other similar
instrument which is an agreement to exchange the return generated by one
instrument for the return generated by another instrument. The payment
streams are calculated by reference to a specified index and agreed upon
notional amount. A Portfolio will usually enter into swaps on a net basis,
i.e., the two return streams are netted out in a cash settlement on the
payment date or dates specified in the instrument, with the Portfolio
receiving or paying, as the case may be, only the net amount of the two
returns. A Portfolio's obligations under a swap agreement will be accrued
daily (offset against any amounts owing to the Portfolio) and any accrued but
unpaid net amounts owed to a swap counterparty will be covered by the
maintenance of a segregated account consisting of cash, or other liquid
obligations. A Portfolio will not enter into any swap agreement unless the
counterparty meets the rating requirements set forth in guidelines
established by the Trust's Board of Trustees.
Limitations on Market and Credit Risk:
Written options, futures contracts, forward commitments, forward foreign
currency exchange contracts and swaps involve elements of both market and
credit risk in excess of the amounts reflected in the Statements of Assets
and Liabilities. The contract amounts of these covered written options,
futures contracts, forward commitments, forward foreign currency exchange
contracts and swaps reflect the extent of the Portfolio's exposure to
off-balance sheet risk. The Portfolio bears the market risk which arises from
any changes in security values. The credit risk for futures contracts is
limited to failure of the exchange or board of trade which acts as the
counterparty to the Portfolio's futures transactions. Forward commitments,
forward foreign currency exchange contracts and swaps are done directly with
the counterparty and not through an exchange and can be terminated only by
agreement of both parties to the forward commitments or forward foreign
currency exchange contracts. With respect to such transactions there is no
daily margin settlement and the Portfolio is exposed to the risk of default
by the counterparty.
62
<PAGE>
EQ ADVISORS TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997
Note 2 Management of the Trust
The Trust has entered into an investment management agreement (the
"Management Agreement") with EQ Financial Consultants, Inc. (the "Manager"),
an indirect wholly-owned subsidiary of Equitable. The Management Agreement
states that the Manager will (i) have overall supervisory responsibility for
the general management and investment of each Portfolio's assets; (ii) select
and contract with investment advisers ("Advisers") to manage the investment
operations and composition of each and every Portfolio; (iii) monitor the
Advisers' investment programs and results; (iv) oversee compliance by the
Trust with various federal and state statutes; and (v) carry out the
directives of the Board of Trustees. For its services under the Management
Agreement, the Manager will receive an annual fee as a percentage of average
daily net assets, for each of the Portfolios, calculated daily and payable
quarterly as follows: The fee is calculated based on an annual rate of 0.25%
of average daily net assets of the BT Equity 500 Index Portfolio and the BT
Small Company Index Portfolio; 0.35% of average daily net assets of the BT
International Equity Index Portfolio; 0.45% of average daily net assets of
the JPM Core Bond Portfolio; 0.55% of average daily net assets of the Merrill
Lynch Basic Value Equity Portfolio, the MFS Emerging Growth Companies
Portfolio, the MFS Research Portfolio, the EQ/Putnam Balanced Portfolio, the
EQ/Putnam Growth & Income Value Portfolio, the EQ/Putnam Investors Growth
Portfolio, the T. Rowe Price Equity Income Portfolio and the Lazard Large Cap
Value Portfolio; 0.65% of average daily net assets of the Warburg Pincus
Small Company Value Portfolio; 0.70% of average daily net assets of the
Merrill Lynch World Strategy Portfolio and the EQ/Putnam International Equity
Portfolio; 0.75% of average daily net assets of the T. Rowe Price
International Stock Portfolio; 0.80% of average daily net assets of the
Lazard Small Cap Value Portfolio; and 1.15% of average daily net assets of
the Morgan Stanley Emerging Markets Equity Portfolio.
On behalf of the Trust, the Manager has entered into investment advisory
agreements ("Advisory Agreements") with each of the Advisers. Each of the
Advisory Agreements obligates the Advisers for the respective Portfolios to:
(i) continuously furnish investment programs for the Portfolios; (ii) place
all orders for the purchase and sale of investments for the Portfolios with
brokers or dealers selected by the Manager or the respective Advisers; and
(iii) perform certain limited related administrative functions in connection
therewith. The Manager pays the expenses of providing investment advisory
services to the Portfolios, including the fees of the Advisers of each
Portfolio.
Note 3 Administrative Fees
The Trust has entered into an administrative agreement with Chase Global
Funds Services Company ("Chase Global"), a subsidiary of The Chase Manhattan
Bank, N.A., pursuant to which Chase Global provides certain fund accounting,
compliance and administrative services to the Trust. For such services, Chase
Global receives compensation at the annual rate of 0.0525 of 1% of the total
Trust assets, plus $25,000 for each Portfolio, until the total Trust assets
reach $2.0 billion, and when the total Trust assets exceed $2.0 billion Chase
Global receives: 0.0425 of 1% of the next $500 million of the total Trust
assets; 0.035 of 1% of the next $2.0 billion of the total Trust assets; 0.025
of 1% of the next $1.0 billion of the total Trust assets; 0.015 of 1% of the
next $2.5 billion of the total Trust assets; and 0.01 of 1% of the total
Trust assets in excess of $8.0 billion; except that the annual fee payable to
Chase Global with respect to any Portfolio which commences operation after
July 1, 1997 and whose assets do not exceed $200 million shall be computed at
the rate of 0.0525 of 1% of the Portfolio's total assets plus $25,000. Chase
Global agreed to waive all fees under this agreement, excluding out-of-pocket
expenses, for the period from May 1, 1997, to October 31, 1997. Certain
officers of the Trust are also officers of Chase Global.
Note 4 Custody Fees
The Trust has entered into a Custody Agreement with Chase. The Custody
Agreement provides for an annual fee based on the amount of assets under
custody plus transaction charges. Chase serves as custodian of the Trust's
portfolio securities and other assets. Under the terms of the custody
agreement between the Trust and Chase, Chase maintains and deposits in
separate accounts, cash, securities and
63
<PAGE>
EQ ADVISORS TRUST
NOTES TO FINANCIAL STATEMENTS--(Concluded)
December 31, 1997
other assets of the Portfolios. Chase is also required, upon the order of the
Trust, to deliver securities held by Chase, and to make payments for
securities purchased by the Trust. Chase has also entered into sub-custodian
agreements with a number of foreign banks and clearing agencies, pursuant to
which portfolio securities purchased outside the U.S. are maintained in the
custody of these entities.
Note 5 Distribution Plan
The Trust has entered into distribution agreements with the Manager and
Equitable Distributors, Inc. ("EDI"), an indirect wholly-owned subsidiary of
Equitable (collectively, the "Distributors"), pursuant to which the
Distributors will serve as the principal underwriters of the Class IA and
Class IB shares of the Trust. Class IB shares are subject to distribution
fees imposed pursuant to a distribution plan ("Distribution Plan") adopted
pursuant to Rule 12b-1 under the 1940 Act. The Distribution Plan provides
that each Distributor will be entiled to receive a maximum distribution fee
at the annual rate of 0.50% of the average net assets attributable to the
Trust's Class IB shares. The distribution agreements, however, limit payments
for services provided under the Distribution Plan to an annual rate of 0.25%
of the average net assets attributable to the Trust's Class IB shares. The
Trust's Class IA shares will not be subject to such fees.
Note 6 Expense Limitation
In the interest of limiting expenses of the Portfolios, the Manager has
entered into an expense limitation agreement with the Trust, with respect to
each Portfolio ("Expense Limitation Agreement"), pursuant to which the
Manager has agreed to waive or limit its fees and to assume other expenses so
that the total annual operating expenses of each Portfolio are limited to:
0.55% of the BT Equity 500 Index Portfolio's average daily net assets; 0.60%
of the BT Small Company Index Portfolio's average daily net assets; 0.80% of
the respective average daily net assets of the BT International Equity Index
and JPM Core Bond Portfolios; 0.85% of the respective average daily net
assets of the Merrill Lynch Basic Value Equity, MFS Emerging Growth
Companies, MFS Research, EQ/Putnam Growth & Income Value, EQ/Putnam Investors
Growth and T. Rowe Price Equity Income Portfolios; 0.90% of the respective
average daily net assets of the EQ/Putnam Balanced and Lazard Large Cap Value
Portfolios; 1.00% of the Warburg Pincus Small Company Value Portfolio's
average daily net assets; 1.20% of the respective average daily net assets of
the Merrill Lynch World Strategy, EQ/Putnam International Equity, T. Rowe
Price International Stock and Lazard Small Cap Value Portfolios; and 1.75% of
the Morgan Stanley Emerging Markets Equity Portfolio's average daily net
assets.
Each Portfolio may at a later date reimburse to the Manager the management
fees waived or other expenses assumed and paid for by the Manager pursuant to
the Expense Limitation Agreement within the prior two fiscal years provided
such Portfolio has reached a sufficient asset size to permit such
reimbursement to be made without causing the total annual expense ratio of
each Portfolio to exceed the percentage limits mentioned above. Consequently,
no reimbursement by a Portfolio will be made unless: (i) the Portfolio's
assets exceed $100 million; (ii) the Portfolio's total annual expense ratio
is less than the respective percentages stated above; and (iii) the payment
of such reimbursement has been approved by the Trust's Board of Trustees on a
quarterly basis. At December 31, 1997, under the Expense Limitation
Agreement, the total amount reimbursable to the Manager, which includes
waivers of investment management fees and reimbursements from the Manager,
was $2,574,711.
Note 7 Trustees Deferred Compensation Plan
A deferred compensation plan for the benefit of the unaffiliated Trustees
has been adopted by the Trust. Under the deferred compensation plan, each
Trustee may defer payment of all or part of the fees payable for such
Trustee's services. Each Trustee may defer payment of such fees until their
retirement as a Trustee or until the earlier attainment of a specified age.
Fees deferred under the deferred compensation plan, together with accrued
interest thereon, will be disbursed to a participating Trustee in monthly
installments over a five to twenty year period elected by such Trustee.
64
<PAGE>
EQ ADVISORS TRUST
FINANCIAL HIGHLIGHTS
For the period from May 1, 1997** to December 31, 1997
(Unless otherwise noted)
SELECTED DATA FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT THE PERIOD
MERRILL LYNCH BASIC VALUE EQUITY PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IB
----------
<S> <C>
Net asset value, beginning of period.................................................... $ 10.00
----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income.................................................................. 0.06
Net realized and unrealized gain (loss) on investments and foreign currency
transactions.......................................................................... 1.64
----------
Total from investment operations ...................................................... 1.70
----------
LESS DISTRIBUTIONS:
Dividends from net investment income................................................... (0.06)
Distributions from realized gains...................................................... (0.05)
Distributions in excess of realized gains ............................................. (0.01)
----------
Total dividends and distributions ..................................................... (0.12)
----------
Net asset value, end of period ......................................................... $ 11.58
==========
Total return (b)........................................................................ 16.99%
==========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's)....................................................... $49,495
Ratio of expenses to average net assets after waivers (a)............................... 0.85%
Ratio of expenses to average net assets before waivers (Note 6) (a)..................... 1.89%
Ratio of net investment income to average net assets after waivers (a) ................. 1.91%
Ratio of net investment income to average net assets before waivers (Note 6)(a) ........ 0.87%
Portfolio turnover rate................................................................. 25%
Average commission rate paid............................................................ $0.0566
Effect of voluntary expense limitation during the period: (Note 6)
Per share benefit to net investment income............................................ $ 0.03
</TABLE>
MERRILL LYNCH WORLD STRATEGY PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IB
----------
<S> <C>
Net asset value, beginning of period.................................................... $ 10.00
----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income.................................................................. 0.08
Net realized and unrealized gain (loss) on investments and foreign currency
transactions.......................................................................... 0.39
----------
Total from investment operations....................................................... 0.47
----------
LESS DISTRIBUTIONS:
Dividends from net investment income .................................................. (0.05)
Dividends in excess of net investment income........................................... --
Distributions in excess of realized gains ............................................. (0.11)
----------
Total dividends and distributions ..................................................... (0.16)
----------
Net asset value, end of period ......................................................... $ 10.31
==========
Total return (b)........................................................................ 4.70%
==========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's)....................................................... $18,210
Ratio of expenses to average net assets after waivers (a)............................... 1.20%
Ratio of expenses to average net assets before waivers (Note 6) (a)..................... 3.05%
Ratio of net investment income to average net assets after waivers (a) ................. 1.89%
Ratio of net investment income to average net assets before waivers (Note 6)(a) ........ 0.04%
Portfolio turnover rate................................................................. 58%
Average commission rate paid............................................................ $0.0299
Effect of voluntary expense limitation during the period: (Note 6)
Per share benefit to net investment income............................................ $ 0.08
</TABLE>
65
<PAGE>
EQ ADVISORS TRUST
FINANCIAL HIGHLIGHTS--(Continued)
For the period from May 1, 1997** to December 31, 1997
(Unless otherwise noted)
MFS EMERGING GROWTH COMPANIES PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IB
----------
<S> <C>
Net asset value, beginning of period.................................................... $ 10.00
----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income.................................................................. 0.02
Net realized and unrealized gain (loss) on investments and foreign currency
transactions.......................................................................... 2.21
----------
Total from investment operations....................................................... 2.23
----------
LESS DISTRIBUTIONS:
Dividends from net investment income................................................... (0.02)
Dividends in excess of net investment income........................................... --
Distributions from realized gains ..................................................... (0.18)
Distributions in excess of realized gains ............................................. (0.11)
----------
Total dividends and distributions ..................................................... (0.31)
----------
Net asset value, end of period ......................................................... $ 11.92
==========
Total return (b)........................................................................ 22.42%
==========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ...................................................... $99,317
Ratio of expenses to average net assets after waivers (a)............................... 0.85%
Ratio of expenses to average net assets before waivers (Note 6) (a)..................... 1.82%
Ratio of net investment income to average net assets after waivers (a) ................. 0.61%
Ratio of net investment income to average net assets before waivers (Note 6)(a) ........ (0.36)%
Portfolio turnover rate................................................................. 116%
Average commission rate paid............................................................ $0.0422
Effect of voluntary expense limitation during the period: (Note 6)
Per share benefit to net investment income............................................ $ 0.04
</TABLE>
MFS RESEARCH PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IB
----------
<S> <C>
Net asset value, beginning of period.................................................... $ 10.00
----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income.................................................................. 0.02
Net realized and unrealized gain (loss) on investments and foreign currency
transactions.......................................................................... 1.58
----------
Total from investment operations ...................................................... 1.60
----------
LESS DISTRIBUTIONS:
Dividends from net investment income................................................... (0.02)
Dividends in excess of net investment income........................................... --
Distributions from realized gains...................................................... (0.01)
Distributions in excess of realized gains ............................................. (0.09)
----------
Total dividends and distributions ..................................................... (0.12)
----------
Net asset value, end of period ......................................................... $ 11.48
==========
Total return (b)........................................................................ 16.07%
==========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ...................................................... $114,754
Ratio of expenses to average net assets after waivers (a)............................... 0.85%
Ratio of expenses to average net assets before waivers (Note 6) (a)..................... 1.78%
Ratio of net investment income to average net assets after waivers (a) ................. 0.65%
Ratio of net investment income to average net assets before waivers (Note 6)(a) ........ (0.28)%
Portfolio turnover rate................................................................. 51%
Average commission rate paid............................................................ $ 0.0471
Effect of voluntary expense limitation during the period: (Note 6)
Per share benefit to net investment income............................................ $ 0.03
</TABLE>
66
<PAGE>
EQ ADVISORS TRUST
FINANCIAL HIGHLIGHTS--(Continued)
For the period from May 1, 1997** to December 31, 1997
(Unless otherwise noted)
EQ/PUTNAM BALANCED PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IB
----------
<S> <C>
Net asset value, beginning of period.................................................... $ 10.00
----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income.................................................................. 0.14
Net realized and unrealized gain (loss) on investments and foreign currency
transactions.......................................................................... 1.30
----------
Total from investment operations ...................................................... 1.44
----------
LESS DISTRIBUTIONS:
Dividends from net investment income................................................... (0.13)
Dividends in excess of net investment income .......................................... (0.01)
Distributions from realized gains...................................................... (0.09)
----------
Total dividends and distributions ..................................................... (0.23)
----------
Net asset value, end of period ......................................................... $ 11.21
==========
Total return (b)........................................................................ 14.38%
==========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ...................................................... $25,854
Ratio of expenses to average net assets after waivers (a)............................... 0.90%
Ratio of expenses to average net assets before waivers (Note 6) (a)..................... 2.55%
Ratio of net investment income to average net assets after waivers (a) ................. 3.19%
Ratio of net investment income to average net assets before waivers (Note 6)(a) ........ 1.54%
Portfolio turnover rate................................................................. 117%
Average commission rate paid............................................................ $0.0346
Effect of voluntary expense limitation during the period: (Note 6)
Per share benefit to net investment income............................................ $ 0.07
</TABLE>
EQ/PUTNAM GROWTH & INCOME VALUE PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IB
----------
<S> <C>
Net asset value, beginning of period.................................................... $ 10.00
----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income.................................................................. 0.06
Net realized and unrealized gain (loss) on investments and foreign currency
transactions.......................................................................... 1.56
----------
Total from investment operations ...................................................... 1.62
----------
LESS DISTRIBUTIONS:
Dividends from net investment income................................................... (0.06)
Dividends in excess of net investment income........................................... --
Distributions from realized gains...................................................... (0.01)
Distributions in excess of realized gains ............................................. (0.03)
----------
Total dividends and distributions ..................................................... (0.10)
----------
Net asset value, end of period ......................................................... $ 11.52
==========
Total return (b)........................................................................ 16.23%
==========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ...................................................... $150,260
Ratio of expenses to average net assets after waivers (a)............................... 0.85%
Ratio of expenses to average net assets before waivers (Note 6) (a)..................... 1.75%
Ratio of net investment income to average net assets after waivers (a) ................. 1.67%
Ratio of net investment income to average net assets before waivers (Note 6)(a) ........ 0.77%
Portfolio turnover rate................................................................. 61%
Average commission rate paid............................................................ $ 0.0376
Effect of voluntary expense limitation during the period: (Note 6)
Per share benefit to net investment income............................................ $ 0.03
</TABLE>
67
<PAGE>
EQ ADVISORS TRUST
FINANCIAL HIGHLIGHTS--(Continued)
For the period from May 1, 1997** to December 31, 1997
(Unless otherwise noted)
EQ/PUTNAM INTERNATIONAL EQUITY PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IB
----------
<S> <C>
Net asset value, beginning of period.................................................... $ 10.00
----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income.................................................................. 0.03
Net realized and unrealized gain (loss) on investments and foreign currency
transactions.......................................................................... 0.93
----------
Total from investment operations ...................................................... 0.96
----------
LESS DISTRIBUTIONS:
Dividends from net investment income................................................... (0.02)
Distributions from realized gains...................................................... (0.01)
Distributions in excess of realized gains ............................................. (0.04)
----------
Total dividends and distributions ..................................................... (0.07)
----------
Net asset value, end of period ......................................................... $ 10.89
==========
Total return (b)........................................................................ 9.58%
==========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ...................................................... $55,178
Ratio of expenses to average net assets after waivers (a)............................... 1.20%
Ratio of expenses to average net assets before waivers (Note 6) (a)..................... 2.53%
Ratio of net investment income to average net assets after waivers (a) ................. 0.74%
Ratio of net investment income to average net assets before waivers (Note 6)(a) ........ (0.59)%
Portfolio turnover rate................................................................. 43%
Average commission rate paid............................................................ $0.0153
Effect of voluntary expense limitation during the period: (Note 6)
Per share benefit to net investment income............................................ $ 0.05
</TABLE>
EQ/PUTNAM INVESTORS GROWTH PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IB
----------
<S> <C>
Net asset value, beginning of period.................................................... $ 10.00
----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income.................................................................. 0.02
Net realized and unrealized gain (loss) on investments and foreign currency
transactions.......................................................................... 2.45
----------
Total from investment operations ...................................................... 2.47
----------
LESS DISTRIBUTIONS:
Dividends from net investment income................................................... (0.03)
Distributions from realized gains...................................................... (0.04)
Distributions in excess of realized gains ............................................. (0.07)
----------
Total dividends and distributions ..................................................... (0.14)
----------
Net asset value, end of period ......................................................... $ 12.33
==========
Total return (b)........................................................................ 24.70%
==========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ...................................................... $39,695
Ratio of expenses to average net assets after waivers (a)............................... 0.85%
Ratio of expenses to average net assets before waivers (Note 6) (a)..................... 2.13%
Ratio of net investment income to average net assets after waivers (a) ................. 0.58%
Ratio of net investment income to average net assets before waivers (Note 6)(a) ........ (0.70)%
Portfolio turnover rate................................................................. 47%
Average commission rate paid............................................................ $0.0338
Effect of voluntary expense limitation during the period: (Note 6)
Per share benefit to net investment income............................................ $ 0.05
</TABLE>
68
<PAGE>
EQ ADVISORS TRUST
FINANCIAL HIGHLIGHTS--(Continued)
For the period from May 1, 1997** to December 31, 1997
(Unless otherwise noted)
T. ROWE PRICE EQUITY INCOME PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IB
----------
<S> <C>
Net asset value, beginning of period.................................................... $ 10.00
----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income.................................................................. 0.10
Net realized and unrealized gain (loss) on investments and foreign currency
transactions.......................................................................... 2.11
----------
Total from investment operations ...................................................... 2.21
----------
LESS DISTRIBUTIONS:
Dividends from net investment income................................................... (0.09)
Distributions from realized gains...................................................... (0.04)
----------
Total dividends and distributions ..................................................... (0.13)
----------
Net asset value, end of period ......................................................... $ 12.08
==========
Total return (b)........................................................................ 22.11%
==========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ...................................................... $99,947
Ratio of expenses to average net assets after waivers (a)............................... 0.85%
Ratio of expenses to average net assets before waivers (Note 6) (a)..................... 1.74%
Ratio of net investment income to average net assets after waivers (a) ................. 2.49%
Ratio of net investment income to average net assets before waivers (Note 6)(a) ........ 1.60%
Portfolio turnover rate................................................................. 9%
Average commission rate paid............................................................ $0.0293
Effect of voluntary expense limitation during the period: (Note 6)
Per share benefit to net investment income............................................ $ 0.03
</TABLE>
T. ROWE PRICE INTERNATIONAL STOCK PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IB
----------
<S> <C>
Net asset value, beginning of period.................................................... $ 10.00
----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income.................................................................. 0.02
Net realized and unrealized gain (loss) on investments and foreign currency
transactions.......................................................................... (0.17)
----------
Total from investment operations ...................................................... (0.15)
----------
LESS DISTRIBUTIONS:
Dividends in excess of net investment income........................................... --
----------
Net asset value, end of period ......................................................... $ 9.85
==========
Total return (b)........................................................................ (1.49)%
==========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ...................................................... $69,572
Ratio of expenses to average net assets after waivers (a)............................... 1.20%
Ratio of expenses to average net assets before waivers (Note 6) (a)..................... 2.56%
Ratio of net investment income to average net assets after waivers (a) ................. 0.45%
Ratio of net investment income to average net assets before waivers (Note 6)(a) ........ (0.91)%
Portfolio turnover rate................................................................. 17%
Average commission rate paid............................................................ $0.0034
Effect of voluntary expense limitation during the period: (Note 6)
Per share benefit to net investment income............................................ $ 0.05
</TABLE>
69
<PAGE>
EQ ADVISORS TRUST
FINANCIAL HIGHLIGHTS--(Continued)
For the period from May 1, 1997** to December 31, 1997
(Unless otherwise noted)
WARBURG PINCUS SMALL COMPANY VALUE PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IB
----------
<S> <C>
Net asset value, beginning of period.................................................... $ 10.00
----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income.................................................................. 0.01
Net realized and unrealized gain (loss) on investments and foreign currency
transactions.......................................................................... 1.90
----------
Total from investment operations ...................................................... 1.91
----------
LESS DISTRIBUTIONS:
Dividends from net investment income................................................... (0.01)
Dividends in excess of net investment income........................................... --
Distributions in excess of realized gains ............................................. (0.05)
----------
Total dividends and distributions ..................................................... (0.06)
----------
Net asset value, end of period ......................................................... $ 11.85
==========
Total return (b)........................................................................ 19.15%
==========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ...................................................... $120,880
Ratio of expenses to average net assets after waivers (a)............................... 1.00%
Ratio of expenses to average net assets before waivers (Note 6) (a)..................... 1.70%
Ratio of net investment income to average net assets after waivers (a) ................. 0.26%
Ratio of net investment income to average net assets before waivers (Note 6)(a) ........ (0.44)%
Portfolio turnover rate................................................................. 44%
Average commission rate paid............................................................ $ 0.0545
Effect of voluntary expense limitation during the period: (Note 6)
Per share benefit to net investment income............................................ $ 0.03
For the period from August 20, 1997** to December 31, 1997
</TABLE>
MORGAN STANLEY EMERGING MARKETS EQUITY PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IB
----------
<S> <C>
Net asset value, beginning of period.................................................... $ 10.00
----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income.................................................................. 0.04
Net realized and unrealized gain (loss) on investments and foreign currency
transactions.......................................................................... (2.06)
----------
Total from investment operations ...................................................... (2.02)
----------
LESS DISTRIBUTIONS:
Dividends from net investment income................................................... (0.02)
----------
Net asset value, end of period ......................................................... $ 7.96
==========
Total return (b)........................................................................ (20.16)%
==========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ...................................................... $21,433
Ratio of expenses to average net assets after waivers (a)............................... 1.75%
Ratio of expenses to average net assets before waivers (Note 6) (a)..................... 2.61%
Ratio of net investment income to average net assets after waivers (a) ................. 1.96%
Ratio of net investment income to average net assets before waivers (Note 6)(a) ........ 1.10%
Portfolio turnover rate................................................................. 25%
Average commission rate paid............................................................ $0.0011
Effect of voluntary expense limitation during the period: (Note 6)
Per share benefit to net investment income............................................ $ 0.02
</TABLE>
- ------------
** Commencement of Operations
(a) Annualized
(b) Total return is not annualized.
70
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees
and Shareholders of
EQ Advisors Trust
In our opinion, the accompanying statements of assets and liabilities,
including the portfolios of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of each of the
portfolios constituting EQ Advisors Trust (the "Fund") at December 31, 1997,
and the results of each of their operations, the changes in each of their net
assets and the financial highlights for each of the periods indicated, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based
on our audit. We conducted our audit of these financial statements in
accordance with generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit, which included
confirmation of securities at December 31, 1997 by correspondence with the
custodian and brokers and the application of alternative auditing procedures
where confirmations from brokers were not received, provides a reasonable
basis for the opinion expressed above.
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
February 23, 1998
71
<PAGE>
FEDERAL INCOME TAX INFORMATION (UNAUDITED):
For the fiscal period ended December 31, 1997, the percentage of dividends
paid that qualify for the 70% dividend received deduction for corporate
shareholders for the Merrill Lynch Basic Value Equity Portfolio, the Merrill
Lynch World Strategy Portfolio, the MFS Emerging Growth Companies Portfolio,
the MFS Research Portfolio, the EQ/Putnam Balanced Portfolio, the EQ/Putnam
Growth & Income Value Portfolio, the EQ/Putnam Investors Growth Portfolio,
the T. Rowe Price Equity Income Portfolio, the Warburg Pincus Small Company
Value Portfolio and the Morgan Stanley Emerging Markets Equity Portfolio were
30.39%, 8.79%, 1.52%, 23.38%, 20.79%, 61.13%, 27.33%, 69.79%, 39.70%, and
100.00%, respectively.
Foreign taxes during the fiscal period ended December 31, 1997 for the
EQ/Putnam International Equity Portfolio, T. Rowe Price International Stock
Portfolio and the Morgan Stanley Emerging Markets Equity Portfolio amounting
to $29,283, $42,243, and $2,617, respectively, are expected to be passed
through to the shareholders as foreign tax credits for the year ending
December 31, 1997. These amounts are 100% allowable as a foreign tax credit.
In addition, for the fiscal year ended December 31, 1997, gross income
derived from sources within foreign countries amounted to $221,578, $330,762
and $64,634 for the EQ/Putnam International Equity Portfolio, T. Rowe Price
International Stock Portfolio and the Morgan Stanley Emerging Markets Equity
Portfolio.
72
