As filed with the Securities and Exchange File No. 333-05173
Commission on July 30, 1998 File No. 811-7651
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 5
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 6
AETNA VARIABLE PORTFOLIOS, INC.
-------------------------------
151 Farmington Avenue RE4A, Hartford, Connecticut 06156
-------------------------------------------------------
(860) 275-2032
Amy R. Doberman, Counsel
Aeltus Investment Management, Inc.
242 Trumbull Street, Hartford, Connecticut 06103
-------------------------------------------------------
(Name and Address of Agent for Service)
- --------------------------------------------------------------------------------
It is proposed that this filing will become effective:
X on October 1, 1998 pursuant to paragraph (a)(1)
--------
<PAGE>
Aetna Variable Portfolios, Inc.
Cross-Reference Sheet
<TABLE>
<CAPTION>
Form N-1A
Item No. Part A Caption in Prospectus
-------- ------ ---------------------
<S> <C> <C>
1 Cover Page........................................... Cover Page
2 Synopsis............................................. Not applicable
3 Condensed Financial Information...................... Financial Highlights
4 General Description of Registrant.................... Cover Page
The Fund
Description of the Variable
Portfolios
Investment Techniques
Risk Factors and Other
Considerations
Concentration
5 Management of the Fund............................... Management of the Variable
Portfolios
5A Management's Discussion of Fund Performance.......... Not applicable
6 Capital Stock and Other Securities................... Purchase and Redemption of
Shares
Net Asset Value
General Information
Tax Matters
7 Purchase of Securities Being Offered................. The Fund
Purchase and Redemption of
Shares
Net Asset Value
8 Redemption or Repurchase............................. Purchase and Redemption of
Shares
Net Asset Value
9 Pending Legal Proceedings............................ Not applicable
</TABLE>
<PAGE>
Aetna Variable Portfolios, Inc.
Cross-Reference Sheet
<TABLE>
<CAPTION>
Form N-1A Caption in Statement of Additional
Item No. Part B Information
-------- ------ -----------
<S> <C> <C>
10 Cover Page........................................... Cover Page
11 Table of Contents.................................... Table of Contents
12 General Information and History...................... General Information and History
13 Investment Objectives and Policies................... Additional Investment Restrictions
and Policies of the Variable
Portfolios
Description of Various Securities and
Investment Techniques
14 Management of the Fund............................... Directors and Officers
15 Control Persons and Principal Holders of Securities.. Control Persons and Principal
Shareholders
16 Investment Advisory and Other Services............... The Investment Advisory Agreement
The Administrative Services
Agreement
Custodian
Independent Auditors
17 Brokerage Allocation and Other Practices............. Brokerage Allocation and Trading
Polices
18 Capital Stock and Other Securities................... Description of Shares
Purchase and Redemption of Shares
Voting Rights
19 Purchase, Redemption and Pricing of Securities Being
Offered.............................................. Purchase and Redemption of Shares
Net Asset Value
20 Tax Status........................................... Tax Status
21 Underwriters......................................... Principal Underwriter
22 Calculation of Performance Data...................... Performance Information
23 Financial Statements................................. Financial Statements
</TABLE>
<PAGE>
Part C
Information required to be included in Part C is set forth under the appropriate
Item, so numbered, in Part C to this Registration Statement.
<PAGE>
Part A and B
The Prospectus is incorporated into Part A of this Post-Effective Amendment No.
5 by reference to the Fund's filing under Rule 497(j) under the Securities Act
of 1933 (1933 Act), as filed electronically on May 4, 1998 (Accession No.
0000950146-98-0000761). The Statement of Additional Information is incorporated
into Part B of this Post-Effective Amendment No. 5 by reference to the Fund's
filing under Rule 497(j) under the 1933 Act as filed electronically on May 4,
1998 (Accession No. 0000950146-98-0000761).
<PAGE>
AETNA VARIABLE PORTFOLIOS, INC.
Supplement dated October 1, 1998
The information in this Supplement for Aetna Variable Portfolios, Inc. (Fund)
updates and amends the information contained in the Prospectus dated May 1,
1998. This Supplement should be read with the Prospectus. Capitalized terms not
defined herein are used as defined in the Prospectus.
The following replaces the last sentence of the third paragraph of the section
entitled "Investment Techniques - Options, Futures and Other Derivative
Instruments" on page 13:
Each Portfolio may invest up to 30% of its assets in lower risk derivatives for
hedging or to gain additional exposure to certain markets for investment
purposes while maintaining liquidity to meet shareholder redemptions and
minimizing trading costs. Forward exchange contracts are excluded from this 30%
limitation.
The following replaces the sections entitled "Performance - Performance of
Similarly Managed Funds" and "Performance - Private Account Performance" on
pages 17 through 19:
Performance of Similarly Managed Funds
Small Company, International, Index Plus Large Cap and Growth are recently
organized and do not yet have long-term performance records. However, these
Portfolios have the same investment objective and follow substantially the same
investment strategies as certain series of an investment company registered
under the Investment Company Act of 1940 (1940 Act) whose shares are currently
sold to the public (public fund) and are managed by Aeltus.
Set forth below is the historical performance of each comparable series of the
public fund. Investors should not consider the performance data of the series of
the public fund as an indication of the future performance of the Portfolios.
The performance figures shown below reflect the deduction of the historical fees
and expenses paid by the series of the public fund, and not those paid by the
Portfolios. The results shown reflect the reinvestment of dividends and
distributions, and were calculated in the same manner that will be used by the
Portfolios to calculate their own performance.
The figures also do not reflect the deduction of any insurance fees or charges
that are imposed by the insurance company in connection with its sale of the VA
Contracts and VLI Policies. Investors should refer to the separate account
prospectus describing the VA Contracts and VLI Policies for information
pertaining to these insurance fees and charges. The insurance separate account
fees decrease the performance of the Portfolios.
The following table shows average annual total returns for the period ended June
30, 1998 for the Portfolios, the comparable series and their respective
benchmark indices.
<TABLE>
<CAPTION>
SMALL COMPANY 1 YEAR 3 YEARS
<S> <C> <C>
Aetna Variable Portfolios, Inc., Small Company(1)
Aetna Series Fund, Inc., Aetna Small Company
Fund (Class I)(1)
Russell 2000 Index
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
12/31/97 1 YEAR 3 YEARS 5 YEARS
INTERNATIONAL Through 6/30/98
<S> <C> <C> <C> <C>
Aetna Variable Portfolios, Inc., International(2)
Aetna Series Fund, Inc., Aetna International
Fund (Class I)(2)
MSCI-EAFE Index
<CAPTION>
INDEX PLUS LARGE CAP 1 YEAR
<S> <C>
Aetna Variable Portfolios, Inc., Index Plus
Large Cap(3)
Aetna Series Fund, Inc., Aetna Index Plus
Large Cap Fund (Class I)(3)
S&P 500 Stock Index
<CAPTION>
GROWTH 1 YEAR 3 YEARS
<S> <C> <C>
Aetna Variable Portfolios, Inc., Growth(4)
Aetna Series Fund, Inc., Aetna Growth Fund
(Class I)(4)
S&P 500 Stock Index
</TABLE>
1 Through June 30, 1998, the since inception average annual returns of Small
Company, a Portfolio of Aetna Variable Portfolios, Inc., and Aetna Small
Company Fund (Class I), a series of Aetna Series Fund, Inc., were ____%
(inception December 27, 1996) and ____% (inception December 23, 1993),
respectively.
2 Through June 30, 1998, the since inception performance (not annualized) of
International, a Portfolio of Aetna Variable Portfolios, Inc., and the
average annual return of Aetna International Fund (Class I), a series of
Aetna Series Fund, Inc., were ____% (inception December 22, 1997) and ____%
(inception December 27, 1991), respectively.
3 Through June 30, 1998, the since inception average annual returns of Index
Plus Large Cap, a Portfolio of Aetna Variable Portfolios, Inc., and Aetna
Index Plus Large Cap Fund (Class I), a series of Aetna Series Fund, Inc.,
were ____% (inception September 16, 1996) and ____% (inception December 10,
1996), respectively.
4 Through June 30, 1998, the since inception average annual returns of Growth,
a Portfolio of Aetna Variable Portfolios, Inc., and Aetna Growth Fund (Class
I), a series of Aetna Series Fund, Inc., were ____% (inception December 13,
1996) and ____% (inception December 23, 1993), respectively.
Private Account Performance
Index Plus Large Cap, Value Opportunity, Growth, Index Plus Bond and High Yield
are recently organized and do not yet have long-term performance records.
However, each of those Portfolios has an investment objective, policies and
strategies which are substantially similar to those employed by Aeltus with
respect to certain Private Accounts. The performance of Index Plus Large Cap,
Value Opportunity, Growth, Index Plus Bond and High Yield may vary from the
Private Account performance because the Private Accounts are not subject to
certain investment limitations, diversification requirements and other
restrictions imposed by the 1940 Act and the Internal Revenue Code of 1986, as
amended, which if applicable, may have adversely affected the performance
results of the Private Accounts.
The Private Account Performance data, shown below, was calculated in accordance
with recommended standards of the Association for Investment Management and
Research (AIMR). AIMR is a non-profit membership and education organization
that, among other things, has formulated a set of performance presentation
standards for investment advisers.
The chart below shows the Index Plus Large Cap, Value Opportunity, Growth, Index
Plus Bond and High Yield Private Account performance data. The Private Account
performance figures are time-weighted rates of return which include all income
and accrued income and realized and unrealized gains or losses and reflect the
deduction of investment advisory fees and other expenses actually charged to the
Private Accounts. The fees and expenses charged to the Private Accounts are
significantly lower than those charged to any Portfolio. Had Portfolio-level
expenses been charged to the Private Accounts, performance would have been
lower.
<PAGE>
Investors should not consider the performance data of these Private Accounts as
an indication of the future performance of a Portfolio.
The following table shows average annual total returns for the period ended June
30, 1998 for the Portfolios, the comparable private accounts and their
respective benchmark indices.
PRIVATE ACCOUNT PERFORMANCE
<TABLE>
<CAPTION>
INDEX PLUS LARGE CAP COMPOSITE 1 YEAR 5 YEARS
<S> <C> <C>
Aetna Variable Portfolios, Inc., Index Plus Large Cap(1)
Index Plus Large Cap Composite
S&P 500 Stock Index
<CAPTION>
VALUE OPPORTUNITY COMPOSITE 1 YEAR 5 YEARS
<S> <C> <C>
Aetna Variable Portfolios, Inc., Value Opportunity(2)
Value Opportunity Composite
S&P 500 Stock Index
<CAPTION>
GROWTH COMPOSITE 1 YEAR 5 YEARS 10 YEARS
<S> <C> <C> <C>
Aetna Variable Portfolios, Inc., Growth(3)
Growth Composite
S&P 500 Stock Index
<CAPTION>
12/31/97
THROUGH
HIGH YIELD PRIVATE ACCOUNT 6/30/98 1 YEAR
<S> <C> <C>
Aetna Variable Portfolios, Inc., High Yield(4)
High Yield Account
Merrill Lynch High Yield Index
<CAPTION>
12/31/97
THROUGH
INDEX PLUS BOND COMPOSITE 6/30/98 1 YEAR 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Aetna Variable Portfolios, Inc., Index Plus Bond(5)
Index Plus Bond Composite
LBAB Index
</TABLE>
1. Through June 30, 1998, the since inception average annual return of Index
Plus Large Cap, a Portfolio of Aetna Variable Portfolios, Inc., was ____%
(inception September 16, 1996).
2. Through June 30, 1998, the since inception average annual return of Value
Opportunity, a Portfolio of Aetna Variable Portfolios, Inc., was ____%
(inception December 13, 1996).
3. Through June 30, 1998, the since inception average annual return of Growth,
a Portfolio of Aetna Variable Portfolios, Inc., was ____% (inception
December 13, 1996).
4. Through June 30, 1998, the since inception performance (not annualized) of
High Yield, a Portfolio of Aetna Variable Portfolios, Inc., was ____%
(inception December 10, 1997).
5. Through June 30, 1998, the since inception performance (not annualized) of
Index Plus Bond, a Portfolio of Aetna Variable Portfolios, Inc., was ____%
(inception December 18, 1997).
<PAGE>
The following new information is added prior to the section entitled "Management
of the Variable Portfolios - Portfolio Management" on page 20:
Subadviser Effective October 1, 1998, Bradley, Foster & Sargent, Inc.
("Bradley") has been appointed subadviser to Value Opportunity pursuant to an
agreement entered into by Aeltus, the Fund on behalf of Value Opportunity, and
Bradley. Bradley is a Connecticut corporation organized in 1993, with its
primary office located at City Place II--185 Asylum Street, Hartford,
Connecticut 06103, and is registered with the SEC as an investment adviser.
While Bradley has not previously served as an investment adviser or subadviser
to a mutual fund, it does manage private client assets as well as 401(k), profit
sharing and other retirement plan assets. As of June 1, 1998, Bradley managed in
excess of $350 million.
The Subadvisory Agreement gives Bradley broad latitude to select securities for
Value Opportunity consistent with the investment objective and policy of that
Portfolio, and subject to Aeltus' oversight. The Agreement contemplates that
Bradley will be responsible only for making and communicating investment
decisions. Aeltus will remain responsible for all other aspects of managing and
administering Value Opportunity, including trade execution.
The Subadvisory Agreement for Value Opportunity provides that, for the duration
of the Agreement, Aeltus will pay Bradley a subadvisory fee, to be paid monthly
at an annual rate of 0.15% of the Portfolio's average daily net assets on the
first $250 million of assets, and 0.10% of the Portfolio's average daily net
assets on assets above $250 million.
The following replaces the section entitled "Management of the Variable
Portfolios - Value Opportunity" on page 20:
Value Opportunity Peter Canoni, Principal, Bradley, Foster & Sargent, Inc., is
responsible for the daily management of Value Opportunity. Before joining
Bradley, Mr. Canoni was a Managing Director of Aeltus and the portfolio manager
of Value Opportunity from its inception on December 13, 1996 through August 3,
1998.
The following replaces the reference to "Transfer, Dividend Disbursing and
Redemption Agent" on the back cover of the Prospectus:
TRANSFER, DIVIDEND DISBURSING
AND REDEMPTION AGENT
First Data Investors Services Group, Inc.
4400 Computer Drive
Westborough, Massachusetts 01581
The following financial information replaces the section entitled "Financial
Highlights" on pages 3 through 7:
[to be filed]
Form Number October 1998
<PAGE>
AETNA VARIABLE PORTFOLIOS, INC.
Supplement dated October 1, 1998 to the Statement of
Additional Information dated May 1, 1998
The information in this Supplement for Aetna Variable Portfolios, Inc. (Fund)
updates and amends the information contained in the Statement of Additional
Information (Statement) dated May 1, 1998 and should be read with that Statement
and the Fund's Prospectus.
The following replaces the section entitled "Control Persons and Principal
Shareholders" on page 17:
CONTROL PERSONS AND PRINCIPAL SHAREHOLDERS
As of June 30, 1998, Aetna Life Insurance Company (ALIC) owned 72.75% of Aetna
International VP's outstanding voting securities and Aetna Life Insurance and
Annuity Company (Aetna) had a controlling interest in the following Portfolios:
<TABLE>
<CAPTION>
% Aetna
<S> <C>
Aetna Value Opportunity VP 92.47%
Aetna Growth VP 92.47%
Aetna Index Plus Large Cap VP 96.50%
Aetna Small Company VP 94.85%
Aetna Index Plus Bond VP 100.00%
Aetna Index Plus Mid Cap VP 100.00%
Aetna Mid Cap VP 100.00%
Aetna Index Plus Small Cap VP 100.00%
Aetna High Yield VP 100.00%
Aetna Real Estate Securities VP 99.43%
Aetna International VP 27.07%
</TABLE>
Shares of the Variable Portfolios may be owned directly by insurance companies
or by insurance companies as depositors of separate accounts which are used to
fund variable annuity contracts (VA Contracts) and variable life insurance
policies (VLI Policies). See "Voting Rights".
As of June 30, 1998, officers and Directors owned less than 1% of the
outstanding shares of any of the Series.
Aetna is an indirect wholly-owned subsidiary of Aetna Retirement Services, Inc.,
which is in turn an indirect wholly-owned subsidiary of Aetna Inc. ALIC is a
wholly-owned subsidiary of Aetna Services, Inc. which is in turn a wholly-owned
subsidiary of Aetna Inc. Aetna's and ALIC's principal office is located at 151
Farmington Avenue, Hartford, Connecticut 06156. Aetna is registered with the
Commission as an investment adviser.
<PAGE>
The following replaces the first table in the section entitled "Directors and
Officers" on pages 19 through 21:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Principal Occupation During Past Five Years (and
Position(s) Held with the Positions held with Affiliated Persons or Principal
Name Address and Age Fund Underwriters of the Fund)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
J. Scott Fox* Director and President Director, Managing Director, Chief Operating Officer, Chief
242 Trumbull Street Financial Officer, Aeltus Investment Management, Inc., October
Hartford, Connecticut 1997 to present; Vice President, Aetna Retirement Services, Inc.,
Age 43 April 1997 to present; Director and Senior Vice President, Aetna
Life Insurance and Annuity Company, March 1997 to February 1998;
Director, Managing Director, Chief Operating Officer, Chief
Financial Officer and Treasurer, Aeltus, April 1994 to March 1997;
Managing Director and Treasurer, Equitable Capital Management
Corp., March 1987 to September 1993.
- --------------------------------------------------------------------------------------------------------------------------------
Wayne F. Baltzer Vice President Vice President, Aetna Investment Services, Inc., July 1993 to
242 Trumbull Street present.
Hartford, Connecticut
Age 55
- --------------------------------------------------------------------------------------------------------------------------------
Albert E. DePrince, Jr. Director Professor, Middle Tennessee State University, 1991 to present.
3029 St. Johns Drive
Murfreesboro, Tennessee
Age 57
- --------------------------------------------------------------------------------------------------------------------------------
Amy R. Doberman Secretary Vice President, Law, Aeltus Investment Management, Inc., April
242 Trumbull Street 1998 to present; Counsel, Aetna Life Insurance and Annuity
Hartford, Connecticut Company, December 1996 to present; Attorney, Securities and
Age 36 Exchange Commission, March 1990 to November 1996.
- --------------------------------------------------------------------------------------------------------------------------------
Maria T. Fighetti Director Manager/Attorney, Health Services, New York City Department of
325 Piermont Road Mental Health, Mental Retardation and Alcohol Services, 1973 to
Closter, New Jersey present.
Age 55
- --------------------------------------------------------------------------------------------------------------------------------
David L. Grove Director, Chairperson Private Investor; Economic/Financial Consultant, December 1985 to
5 The Knoll Contract Committee present.
Armonk, New York
Age 80
- --------------------------------------------------------------------------------------------------------------------------------
<PAGE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Principal Occupation During Past Five Years (and
Position(s) Held with the Positions held with Affiliated Persons or Principal
Name Address and Age Fund Underwriters of the Fund)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
John Y. Kim* Director Director, President, Chief Executive Officer, Chief Investment
242 Trumbull Street Officer, Aeltus Investment Management, Inc., December 1995 to
Hartford, Connecticut present; Director, Aetna Life Insurance and Annuity Company,
Age 38 February 1995 to March 1998; Senior Vice President, Aetna Life
Insurance and Annuity Company, September 1994 to present.
- --------------------------------------------------------------------------------------------------------------------------------
Sidney Koch Director Financial Adviser, self-employed, January 1993 to present.
455 East 86th Street
New York, New York
Age 63
- --------------------------------------------------------------------------------------------------------------------------------
Frank Litwin Vice President Managing Director, Aeltus Investment Management, Inc., August 1997
242 Trumbull Street to present; Vice President, Fidelity Investments Institutional
Hartford, Connecticut Services Company, April 1992 to August 1997.
Age 49
- --------------------------------------------------------------------------------------------------------------------------------
Shaun P. Mathews* Director Vice President/Senior Vice President, Aetna Life Insurance and
151 Farmington Avenue Annuity Company, March 1991 to present; Vice President, Aetna Life
Hartford, Connecticut Insurance Company, 1991 to present; Director and Senior Vice
Age 43 President, Aetna Investment Services, Inc., July 1993 to present;
Director and Senior Vice President, Aetna Insurance Company of
America, September 1992 to present.
- --------------------------------------------------------------------------------------------------------------------------------
Corine T. Norgaard Director Dean of the Barney School of Business, University of Hartford
556 Wormwood Hill (West Hartford, CT), August 1996 to present; Professor, Accounting
Mansfield Center, Connecticut and Dean of the School of Management, Binghamton University
Age 61 (Binghamton, NY), August 1993 to August 1996; Professor,
Accounting, University of Connecticut (Storrs, CT), September 1969
to June 1993; Director, The Advest Group (holding company for
brokerage firm) through September 1996.
- --------------------------------------------------------------------------------------------------------------------------------
Richard G. Scheide Director, Chairperson Trust and Private Banking Consultant, David Ross Palmer
11 Lily Street Audit Committee Consultants, July 1991 to present.
Nantucket, Massachusetts
Age 69
- --------------------------------------------------------------------------------------------------------------------------------
<PAGE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Principal Occupation During Past Five Years (and
Position(s) Held with the Positions held with Affiliated Persons or Principal
Name Address and Age Fund Underwriters of the Fund)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Stephanie A. DeSisto Vice President, Treasurer Vice President Mutual Fund Accounting, Aeltus Investment Management,
242 Trumbull Street and Chief Financial Officer Inc., November 1995 to present; Director Mutual Fund Accounting,
Hartford, Connecticut Aetna Life Insurance and Annuity Company, August 1994 to November
Age 45 1995; Assistant Vice President, Investors Bank & Trust, January
1993 to August 1994.
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Indicates those Directors who are interested persons as defined in the
Investment Company Act of 1940 (1940 Act).
The following new information is added prior to the section entitled "The
Administrative Services Agreement" on page 23:
THE SUBADVISORY AGREEMENT
Aeltus and the Fund, on behalf of Aetna Value Opportunity VP (Value
Opportunity), have entered into an agreement (Subadvisory Agreement) with
Bradley, Foster & Sargent, Inc. (Bradley) effective October 1, 1998 appointing
Bradley subadviser of Value Opportunity. Bradley is managed by its six
principals, Robert H. Bradley, Peter B. Canoni, Timothy H. Foster, Jeffrey G.
Marsted, J. Edward Roney, Jr., and Joseph D. Sargent. The Subadvisory Agreement
was approved by the Fund's Directors on June 24, 1998 and approved by the
shareholders of Value Opportunity on September 4, 1998. The Subadvisory
Agreement will be effective through December 31, 1999. The Subadvisory Agreement
will remain in effect thereafter if approved at least annually by a majority of
the Directors, including a majority of the Independent Directors of the Fund, at
a meeting called for that purpose and held in person. The Subadvisory Agreement
may be terminated without penalty at any time by the Directors or by a majority
of the outstanding voting securities of Value Opportunity or on sixty (60) days'
written notice by Aeltus, the Fund or the Subadviser. The Subadvisory Agreement
terminates automatically in the event of its assignment.
The Subadvisory Agreement gives Bradley broad latitude to select securities for
Value Opportunity consistent with the investment objective and policy of that
Portfolio, and subject to Aeltus' oversight. The Agreement contemplates that
Bradley will be responsible only for making and communicating investment
decisions. Aeltus will remain responsible for all other aspects of managing and
administering Value Opportunity, including trade execution.
For the services under the Subadvisory Agreement, Bradley will receive an annual
fee payable monthly as described in the Prospectus.
The following replaces the section entitled "Performance Information" on Pages
26 through 28:
PERFORMANCE INFORMATION
Performance information for each Portfolio including the yield of High Yield VP
and Index Plus Bond VP and the total return of all Portfolios, may appear in
reports or promotional literature to current or prospective shareholders.
Average Annual Total Return
Total return of a Portfolio for periods longer than one year is determined by
calculating the actual dollar amount of investment return on a $1,000 investment
in the Portfolio made at the beginning of each period, then calculating the
average
<PAGE>
annual compounded rate of return which would produce the same investment return
on the $1,000 investment in the Portfolio during that period. Total return
calculations assume that all Portfolio distributions are reinvested at net asset
value on their respective reinvestment dates.
From time to time, Aeltus may reduce its compensation or assume expenses in
respect of the operations of a Portfolio in order to reduce the Portfolio's
expenses. Any such waiver or assumption would increase a Portfolio's yield and
total return during the period of the waiver or assumption.
The performance of the Portfolios may, from time to time, be compared to that of
other mutual funds tracked by mutual fund rating services, to broad groups of
comparable mutual funds, or to unmanaged indices which may assume investment of
dividends but generally do not reflect deductions for administrative and
management costs.
The performance of the Portfolios are commonly measured as total return. An
average annual compounded rate of return (T) may be computed by using the
redeemable value at the end of a specified period (ERV) of a hypothetical
initial investment of $1,000 (P) over a period of time (n) according to a
formula:
P(1 + T)(n) = ERV
Total Return Quotations as of August 31, 1998:
<TABLE>
<CAPTION>
1 Year Since Inception Inception Date
<S> <C> <C> <C>
High Yield 12/10/97
Real Estate 12/15/97
Value Opportunity 12/13/96
Growth 12/13/96
Mid Cap 12/17/97
Small Company 12/27/96
International 12/22/97
Index Plus Large Cap 09/16/96
Index Plus Mid Cap 12/16/97
Index Plus Small Cap 12/19/97
Index Plus Bond 12/18/97
</TABLE>
Investors should not consider this performance data as an indication of the
future performance of any of the Portfolios of the Fund.
A Portfolio's investment results will vary from time to time depending upon
market conditions, the composition of its investment portfolio and its operating
expenses. Performance information of any Portfolio will not be compared in
advertisements with such information for funds that offer their shares directly
to the public, because Portfolio performance data does not reflect charges
imposed by the insurance company on the VA Contracts and VLI Policies. The total
return for a Portfolio should be distinguished from the rate of return of a
corresponding division of the insurance company's separate account, which rate
will reflect the deduction of additional insurance charges, including mortality
and expense risk charges, and will therefore be lower. Accordingly, performance
figures for a Portfolio will only be advertised publicly if comparable
performance figures for the corresponding division of the separate account are
included in the advertisements. VA Contract owners and VLI Policy owners should
consult their contract and policy prospectuses, respectively, for further
information. Each Portfolio's results also should be considered relative to the
risks associated with its investment objectives and policies.
<PAGE>
30-Day Yield
Quotations of yield for High Yield and Index Plus Bond will be based on all
investment income per share earned during a particular 30-day period, less
expenses accrued during the period (net investment income), and will be computed
by dividing net investment income by the value of a share on the last day of the
period, according to the following formula:
a-b
YIELD = 2[(---)+1)(6)-1]
cd
Where:
a = dividends and interest earned during the period
b = the expenses accrued for the period (net of reimbursements)
c = the average daily number of shares outstanding during the period
d = the maximum offering price per share on the last day of the period
The yield for High Yield and Index Plus Bond for the 30-day period ended August
31, 1998 was ____% and ____%, respectively.
The following replaces the section entitled "Financial Statements" on Page 34:
[To be filed]
Form Number October 1998
<PAGE>
PART C
OTHER INFORMATION
-----------------
Item 24. Financial Statements and Exhibits
(a) Financial Statements:*
(1) To be included in Part A:
Financial Highlights
(2) (i) To be incorporated by reference in Part B to the Fund's
Annual Report dated December 31, 1997 on Form N-30D (File No.
811-7651), as filed electronically with the Securities and
Exchange Commission on ________, 1998 (Accession No.
____________):
Audited Financial Statements for Aetna Variable Index Plus
Portfolio(1), Aetna Variable Small Company Portfolio(2),
Aetna Variable Capital Appreciation Portfolio(3) and Aetna
Variable Growth Portfolio(4) as of December 31, 1997, which
include the following:
Portfolios of Investments
Statements of Assets and Liabilities as of December
31, 1997
Statements of Operations for the year ended December
31, 1997
Statements of Changes in Net Assets for the year ended
December 31, 1997 and the periods ended December
31, 1996
Notes to Financial Statements
Independent Auditors' Reports
1. Renamed Aetna Index Plus Large Cap VP effective
May 1, 1998.
2. Renamed Aetna Small Company VP effective
May 1, 1998.
3. Renamed Aetna Value Opportunity VP effective
May 1, 1998.
4. Renamed Aetna Growth VP effective May 1, 1998.
ii) To be included in Part B:
Audited Financial Statements as of December 31, 1997,
which include the following:
Aetna High Yield Portfolio(1)
Portfolio of Investments
Statement of Assets and Liabilities as of December
31, 1997
Statements of Operations and Changes in Net Assets for
the period from December 10, 1997 to December 31,
1997
Notes to Financial Statements
Independent Auditors' Report
Aetna Index Plus Bond Portfolio(2)
Portfolio of Investments
Statement of Assets and Liabilities as of December
31, 1997
Statements of Operations and Changes in Net Assets for
the period from December 18, 1997 to December 31,
1997
<PAGE>
Notes to Financial Statements
Independent Auditors' Report
Aetna Index Plus Mid Cap Portfolio(3)
Portfolio of Investments
Statement of Assets and Liabilities as of December
31, 1997
Statements of Operations and Changes in Net Assets for
the period from December 15, 1997 to December 31,
1997
Notes to Financial Statements
Independent Auditors' Report
Aetna Index Plus Small Cap Portfolio(4)
Portfolio of Investments
Statement of Assets and Liabilities as of December
31, 1997
Statements of Operations and Changes in Net Assets for
the period from December 19, 1997 to December 31,
1997
Notes to Financial Statements
Independent Auditors' Report
Aetna International Portfolio(5)
Portfolio of Investments
Statement of Assets and Liabilities as of December
31, 1997
Statements of Operations and Changes in Net Assets for
the period from December 22, 1997 to December 31,
1997
Notes to Financial Statements
Independent Auditors' Report
Aetna Mid Cap Portfolio(6)
Portfolio of Investments
Statement of Assets and Liabilities as of December
31, 1997
Statements of Operations and Changes in Net Assets for
the period from December 17, 1997 to December 31,
1997
Notes to Financial Statements
Independent Auditors' Report
Aetna Real Estate Securities Portfolio(7)
Portfolio of Investments
Statement of Assets and Liabilities as of December
31, 1997
Statements of Operations and Changes in Net Assets for
the period from December 15, 1997 to December 31,
1997
Notes to Financial Statements
<PAGE>
Independent Auditors' Report
1. Renamed Aetna High Yield VP effective May 1, 1998.
2. Renamed Aetna Index Plus Bond VP effective May
1, 1998.
3. Renamed Aetna Index Plus Mid Cap VP effective
May 1, 1998.
4. Renamed Aetna Index Plus Small Cap VP effective
May 1, 1998.
5. Renamed Aetna International VP effective May
1, 1998.
6. Renamed Aetna Mid Cap VP effective May 1, 1998.
7. Renamed Aetna Real Estate Securities VP effective
May 1, 1998.
(iii) To be incorporated by reference in Part B to the Fund's Semi-
annual Report dated ______, 1998, as filed electronically
with the Securities and Exchange Commission on _____, 1998
(File No. 811-6352) (Accession No. _________):
Unaudited Financial Statements for Aetna Index Plus Large
Cap VP, Aetna Small Company VP, Aetna Value Opportunity VP,
Aetna Growth VP, Aetna High Yield VP, Aetna Index Plus Bond
VP, Aetna Index Plus Mid Cap VP, Aetna Index Plus Small Cap
VP, Aetna International VP, Aetna Mid Cap VP and Aetna Real
Estate Securities VP for the period ended June 30, 1998
which include the following:
Portfolios of Investments
Statements of Assets and Liabilities as of June 30, 1998
Statements of Operations for the six month period ended
June 30, 1998
Statements of Changes in Net Assets for the six month
period ended June 30, 1998
Notes to Financial Statements
(b) Exhibits
(1)(a) Articles of Incorporation(1)
(1)(b) Articles of Amendment(2)
(1)(c) Articles Supplementary(3)
(1)(d) Articles of Amendment(4)
(2) Amended Bylaws(2)
(3) Not applicable
(4) Instruments Defining Rights of Holders (set forth in the
Articles of Incorporation which are incorporated by
reference)(1)
(5)(a) Investment Advisory Agreement between Aeltus Investment
Management, Inc. ("Aeltus") and Aetna Variable Portfolios, Inc.,
on behalf of Aetna Value Opportunity VP, Aetna Growth VP, Aetna
Small Company VP, Aetna Index Plus Large Cap VP, Aetna High
Yield VP, Aetna Index Plus Bond VP, Aetna Index Plus Mid Cap VP,
Aetna Index Plus Small Cap VP, Aetna International VP, Aetna Mid
Cap VP and Aetna Real Estate Securities VP(3)
(5)(b) Subadvisory Agreement between Bradley, Foster & Sargent, Inc.
and Aetna Variable Portfolios, Inc., on behalf of Aetna Value
Opportunity VP*
(6) Underwriting Agreement between Aetna Variable Portfolios, Inc.
and Aetna Life Insurance and Annuity Company(2)
(7) Directors' Deferred Compensation Plan(3)
<PAGE>
(8)(a) Custodian Agreement between Aetna Variable Portfolios, Inc. and
Mellon Bank, N.A. for Aetna Value Opportunity VP, Aetna Growth
VP, Aetna Index Plus Large Cap VP and Aetna Small Company VP(2)
(8)(b) Amendment to Custodian Agreement between Aetna Variable
Portfolios, Inc. and Mellon Bank, N.A. for Aetna Index Plus Bond
VP, Aetna Index Plus Mid Cap VP, Aetna Mid Cap VP, Aetna Index
Plus Small Cap VP, Aetna High Yield VP and Aetna Real Estate
Securities VP(3)
(8)(c) Custodian Agreement between Aetna Variable Portfolios, Inc. and
Brown Brothers Harriman & Co. for Aetna International VP(4)
(9)(a) Administrative Services Agreement between Aeltus and Aetna
Variable Portfolios, Inc., on behalf of Aetna Value Opportunity
VP, Aetna Growth VP, Aetna Small Company VP, Aetna Index Plus
Large Cap VP, Aetna High Yield VP, Aetna Index Plus Bond VP,
Aetna Index Plus Mid Cap VP, Aetna Index Plus Small Cap VP,
Aetna International VP, Aetna Mid Cap VP and Aetna Real Estate
Securities VP(3)
(9)(b) License Agreement(2)
(10) Opinion and Consent of Counsel
(11) Consent of Independent Auditors
(12) Not applicable
(13)(a)Agreement re: Initial Contribution to Working Capital for Aetna
Value Opportunity VP, Aetna Growth VP, Aetna Index Plus Large
Cap VP and Aetna Small Company VP(2)
(13)(b)Agreement re: Initial Contribution to Working Capital for Aetna
Index Plus Bond VP, Index Plus Mid Cap VP, Aetna Mid Cap VP,
Index Plus Small Cap VP, Aetna High Yield VP, Aetna Real Estate
Securities VP and Aetna International VP(5)
(14) Not applicable
(15) Not applicable
(16) Schedule for Computation of Performance Data(2)
(17) See exhibit 27 below
(18) Not applicable
(19)(a)Power of Attorney(6)
(19)(b)Power of Attorney(7)
(19)(c)Authorization for Signatures(5)
(27) Financial Data Schedule*
*To be filed
1. Incorporated by reference to the Registration Statement on Form N-1A (File
No. 333-05173), as filed electronically with the Securities and Exchange
Commission on June 4, 1996 (Accession No. 0000928389-96-000122).
2. Incorporated by reference to Post-Effective Amendment No. 1 to Registration
Statement on Form N-1A (File No. 333-05173), as filed electronically on March
7, 1997 (Accession No. 0000950146-97-000336).
3. Incorporated by reference to Post-Effective Amendment No. 3 to Registration
Statement on Form N-1A (File No. 333-05173), as filed electronically on
February 26, 1998 (Accession No. 0000950146-98-000289).
4. Incorporated by reference to Post-Effective Amendment No. 4 to Registration
Statement on Form N-1A (File No. 333-05173), as filed electronically on April
27, 1998 (Accession No. 0000950146-98-000686).
<PAGE>
5. Incorporated by reference to Post-Effective Amendment No. 2 to Registration
Statement on Form N-1A (File No. 333-05173), as filed electronically on
September 26, 1997 (Accession No. 0000950146-97-001480).
6. Incorporated by reference to Post-Effective Amendment No. 24 to Registration
Statement on Form N-1A (File No. 33-41694), as filed electronically on
January 16, 1998 (Accession No. 0000950146-98-000093).
7. Incorporated by reference to Post-Effective Amendment No. 26 to Registration
Statement on Form N-1A (File No. 33-41694), as filed electronically on June
29, 1998 (Accession No. 0000950146-98-001122).
<PAGE>
Item 25. Persons Controlled by or Under Common Control
Registrant is a Maryland corporation for which separate financial
statements are filed. As of June 30, 1998, Aetna Life Insurance Company
owned 72.75% of Aetna International VP's outstanding voting securities and
Aetna Life Insurance and Annuity Company ("Aetna") had a controlling
interest in the following portfolios of the Registrant:
<TABLE>
<CAPTION>
% Aetna
<S> <C>
Aetna Value Opportunity VP 92.47%
Aetna Growth VP 92.47%
Aetna Index Plus Large Cap VP 96.50%
Aetna Small Company VP 94.85%
Aetna Index Plus Bond VP 100.00%
Aetna Index Plus Mid Cap VP 100.00%
Aetna Mid Cap VP 100.00%
Aetna Index Plus Small Cap VP 100.00%
Aetna High Yield VP 100.00%
Aetna Real Estate Securities VP 99.43%
Aetna International VP 27.07%
</TABLE>
Aetna and Aetna Life Insurance Company are indirect wholly-owned
subsidiaries of Aetna Inc.
A list of all persons directly or indirectly under common control with the
Registrant and a list which indicates the principal business of each such
company referenced in the diagram are incorporated herein by reference to
Item 26 of the Registration Statement on Form N-4 (File No. 333-56297), as
filed electronically with the Securities and Exchange Commission on June 8,
1998 (Accession No. 0000950146-98-000983).
Item 26. Number of Holders of Securities
<TABLE>
<CAPTION>
(1) Title of Class (2) Number of Record Holders
as of June 30, 1998
<S> <C>
Aetna Value Opportunity VP 2
Aetna Growth VP 2
Aetna Index Plus Large Cap VP 2
Aetna Small Company VP 2
Aetna Index Plus Bond VP 3
Aetna Index Plus Mid Cap VP 3
Aetna Mid Cap VP 2
Aetna Index Plus Small Cap VP 3
Aetna High Yield VP 3
Aetna Real Estate Securities VP 4
<PAGE>
Aetna International VP 5
</TABLE>
Item 27. Indemnification
Article 10, Section (iv) of the Registrant's Articles of Incorporation,
which are incorporated by reference to Registrant's Registration Statement
on Form N-1A (File No. 333-05173), as filed electronically on June 4, 1996
(Accession No. 0000950146-96-000122), provides for indemnification of
directors and officers. In addition, the Registrant's officers and
directors are covered under a directors and officers errors and omissions
liability insurance policy issued by Gulf Insurance Company which expires
October 1, 1999.
Section XI.B of the Administrative Services Agreement filed herewith as
Exhibit 9(a) provides for indemnification of the Administrator.
Reference is also made to Section 2-418 of the Corporations and
Associations Article of the Annotated Code of Maryland which provides
generally that (1) a corporation may (but is not required to) indemnify its
directors for judgments, fines and expenses in proceedings in which the
director is named a party solely by reason of being a director, provided
the director has not acted in bad faith, dishonestly or unlawfully, and
provided further that the director has not received any "improper personal
benefit"; and (2) that a corporation must (unless otherwise provided in the
corporation's charter or articles of incorporation) indemnify a director
who is successful on the merits in defending a suit against him by reason
of being a director for "reasonable expenses." The statutory provisions are
not exclusive; i.e., a corporation may provide greater indemnification
rights than those provided by statute.
Item 28. Business and Other Connections of Investment Adviser
The investment adviser, Aeltus Investment Management, Inc. ("Aeltus"), is
registered as an investment adviser with the Securities and Exchange
Commission. In addition to serving as investment adviser and administrator
for the Registrant, Aeltus acts as investment adviser and administrator for
Aetna Variable Fund, Aetna Income Shares, Aetna Variable Encore Fund, Aetna
Balanced VP, Inc. (formerly Aetna Investment Adviser Fund, Inc.), Aetna GET
Fund, Aetna Generation Portfolios, Inc., and Aetna Series Fund, Inc. (all
management investment companies registered under the Investment Company Act
of 1940 (the "1940 Act")). It also acts as investment adviser to certain
private accounts.
The following table summarizes the business connections of the directors
and principal officers of the investment adviser.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Name Positions and Offices Other Principal Position(s) Held
- ---- with Investment Adviser Since Oct. 31, 1995/Addresses*/**
----------------------- ---------------------------------
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
John Y. Kim Director, President, Chief Director (since February 1995) -- Aetna Life Insurance
Executive Officer, Chief and Annuity Company; Senior Vice President (since
Investment Officer September 1994) -- Aetna Life Insurance and Annuity
Company.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Name Positions and Offices Other Principal Position(s) Held
- ---- with Investment Adviser Since Oct. 31, 1995/Addresses*/**
----------------------- ---------------------------------
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
J. Scott Fox Director, Managing Director, Vice President (since April 1997) -- Aetna Retirement
Chief Operating Officer, Chief Services, Inc.; Director and Senior Vice President
Financial Officer (March 1997 - February 1998) -- Aetna Life Insurance
and Annuity Company; Managing Director, Chief Operating
Officer, Chief Financial Officer, Treasurer (April
1994 - March 1997) -- Aeltus Investment Management, Inc.
Thomas J. McInerney Director President (since August 1997) -- Aetna Retirement
Services, Inc.; Director and President (since September
1997) -- Aetna Life Insurance and Annuity Company;
Executive Vice President (since August 1997) -- Aetna
Inc.; Vice President, Strategy (March 1997 - August
1997) -- Aetna Inc.; Vice President, Marketing and Sales
(December 1996 - March 1997) -- Aetna U.S. Healthcare;
Vice President, National Accounts (April 1996 - December
1996) -- Aetna U.S. Healthcare; Vice President, Strategy,
Finance, & Administration (July 1995 - April 1996) --
Aetna Inc.
Catherine H. Smith Director Director, Senior Vice President and Chief Financial
Officer (since February 1998) -- Aetna Life Insurance
and Annuity Company; Chief Financial Officer (since
February 1998) -- Aetna Retirement Services, Inc.; Vice
President, Strategy, Finance and Administration,
Financial Relations (September 1996 - February 1998)
-- Aetna Inc.; Chief of Staff, Health/Group Life,
Strategy and Communication (April 1993 - September
1996) -- Aetna U.S. Healthcare.
Lennart A. Carlson Managing Director, Fixed Managing Director (since January 1996) -- Aeltus Trust
Income Investments Company.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Name Positions and Offices Other Principal Position(s) Held
- ---- with Investment Adviser Since Oct. 31, 1995/Addresses*/**
----------------------- ---------------------------------
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Steven C. Huber Managing Director, Fixed Portfolio Manager (August 1991 - August 1996) -- Aetna
Income Investments Life Insurance and Annuity Company; Managing Director
(since August 1996) -- Aeltus Trust Company.
Brian K. Kawakami Vice President, Chief Chief Compliance Officer & Director (since January
Compliance Officer 1996) -- Aeltus Trust Company; Chief Compliance Officer
(since August 1993) -- Aeltus Capital, Inc.
Neil Kochen Managing Director, Product Managing Director (since April 1996) -- Aeltus Trust
Development Company; Managing Director (since August 1996)
-- Aeltus Capital, Inc.; Managing Director (July 1994
- August 1996) -- Aetna Life Insurance and Annuity
Company.
Frank Litwin Managing Director, Retail Vice President, Strategic Marketing (April, 1992 -
Marketing and Sales August, 1997) -- Fidelity Investments Institutional
Services Company.
Kevin M. Means Managing Director, Equity Managing Director (July 1994 - August 1996) -- Aetna
Investments Life Insurance and Annuity Company; Managing Director
(since August 1996) -- Aeltus Trust Company.
L. Charles Meythaler Managing Director, Director (since July 1997) -- Aeltus Trust Company;
Institutional Marketing Managing Director (since June 1997) -- Aeltus Trust
and Sales Company; President (June 1993 - April 1997) -- New
England Investment Association.
Jeanne Wong-Boehm Managing Director, Fixed Portfolio Manager (March 1982 - August 1996) -- Aetna
Income Investments Life Insurance and Annuity Company; Portfolio Manager
(March 1982 - August 1996) -- Aetna Inc.; Managing
Director (since August 1996) -- Aeltus Trust Company.
</TABLE>
* Except with respect to Mr. McInerney and Ms. Smith, the principal business
address of each person named is 242 Trumbull Street, Hartford, Connecticut
06103-1205. The address of Mr. McInerney and Ms. Smith is 151 Farmington
Avenue, Hartford, Connecticut 06156.
<PAGE>
** Certain officers and directors of the investment adviser currently hold (or
have held during the past two years) other positions with affiliates of the
Registrant that are not deemed to be principal positions.
For information regarding Bradley, Foster & Sargent, Inc. (Bradley), the
subadviser for the Fund, reference is hereby made to the section entitled
"Subadviser" in the supplements dated October 1, 1998 (filed herewith) to the
Prospectus dated May 1, 1998 and the Statement of Additional Information dated
May 1, 1998. For information as to the business, profession, vocation or
employment of a substantial nature of each of the officers of Bradley, reference
is hereby made to the current Form ADV (File No. 801-46616) of Bradley filed
under the Investment Advisers Act of 1940, incorporated herein by reference.
Item 29. Principal Underwriters
(a) In addition to serving as the principal underwriter for the Registrant,
Aetna also acts as the principal underwriter for Aetna Variable Fund,
Aetna Income Shares, Aetna Variable Encore Fund, Aetna Balanced VP,
Inc., Aetna GET Fund and Aetna Generation Portfolios, Inc. and as
investment adviser, principal underwriter and administrator for
Portfolio Partners, Inc. (all management investment companies
registered under the 1940 Act). Additionally, Aetna acts as the
principal underwriter and depositor for Variable Annuity Account B of
Aetna, Variable Annuity Account C of Aetna, Variable Annuity Account G
of Aetna, and Variable Life Account B of Aetna (separate accounts of
Aetna registered as unit investment trusts under the 1940 Act). Aetna
is also the principal underwriter for Variable Annuity Account I of
Aetna Insurance Company of America ("AICA") (a separate account of AICA
registered as a unit investment trust under the 1940 Act).
(b) The following are the directors and principal officers of the
Underwriter:
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with Principal Positions and Offices
Business Address* Underwriter with Registrant
----------------- ------------------------------------ ---------------------
<S> <C> <C>
Thomas J. McInerney Director and President None
Robert D. Friedhoff Director and Senior Vice President None
John Y. Kim Director and Senior Vice President Director
Shaun P. Mathews Director and Senior Vice President Director
Catherine H. Smith Director, Senior Vice President and Chief None
Financial Officer
Thomas P. Waldron Director and Vice President None
Kirk P. Wickman Vice President, General Counsel and None
Corporate Secretary
Deborah Koltenuk Vice President and Treasurer, Corporate None
Controller
Frederick D. Kelsven Vice President and Chief Compliance Officer None
</TABLE>
<PAGE>
* Except with respect to Mr. Kim, the principal business address of all
directors and officers listed is 151 Farmington Avenue, Hartford, Connecticut
06156. Mr. Kim's address is 242 Trumbull Street, Hartford, Connecticut
06103-1205.
(c) Not applicable
Item 30. Location of Accounts and Records
As required by Section 31(a) of the 1940 Act and the rules thereunder, the
Registrant and its investment adviser, Aeltus, maintain physical possession
of each account, book or other document, at 151 Farmington Avenue,
Hartford, Connecticut 06156 or 242 Trumbull Street, Hartford, Connecticut
06103-1205.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
The Registrant undertakes that if requested by the holders of at least 10%
of the Registrant's outstanding shares, the Registrant will hold a
shareholder meeting for the purpose of voting on the removal of one or more
Directors and will assist with communication concerning that shareholder
meeting as if Section 16(c) of the 1940 Act applied.
The Registrant undertakes to furnish to each person to whom a prospectus is
delivered a copy of its latest annual report to shareholders, upon request
and without charge.
Insofar as indemnification for liability arising under the Securities Act
of 1933 (the "1933 Act") may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions,
or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the 1933 Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such indemnification by it
is against public policy as expressed in the 1933 Act and will be governed
by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the Securities Act of 1933 and the Investment Company Act of 1940,
Aetna Variable Portfolios, Inc. has duly caused this Post-Effective Amendment to
be signed on its behalf by the undersigned thereto duly authorized, in the City
of Hartford and State of Connecticut, on the 30th day of July, 1998.
AETNA VARIABLE PORTFOLIOS, INC.
-------------------------------
Registrant
By: J. Scott Fox*
-------------------------------
J. Scott Fox
President
Pursuant to the requirements of the Securities Act of 1933, this Post-Effective
Amendment to the Registration Statement has been signed by the following persons
on July 30, 1998 in the capacities indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
J. Scott Fox* President and Director
- ------------------------------
J. Scott Fox (Principal Executive Officer) )
)
)
Albert E. DePrince, Jr.** Director )
- ------------------------------ )
Albert E. DePrince, Jr. )
)
Maria T. Fighetti* Director ) July
- ------------------------------ )
Maria T. Fighetti ) 30, 1998
)
David L. Grove* Director )
- ------------------------------ )
David L. Grove )
)
John Y. Kim* Director )
- ------------------------------ )
John Y. Kim )
)
Sidney Koch* Director )
- ------------------------------ )
Sidney Koch )
)
Shaun P. Mathews* Director )
- ------------------------------ )
Shaun P. Mathews )
)
Corine T. Norgaard* Director )
- ------------------------------ )
Corine T. Norgaard )
<PAGE>
)
Richard G. Scheide* Director )
- ------------------------------ )
Richard G. Scheide )
)
Stephanie A. Taylor* Treasurer and Chief Financial Officer )
- ------------------------------ )
Stephanie A. Taylor (Principal Financial and Accounting Officer) )
</TABLE>
By: /s/ Amy R. Doberman
-------------------------------------------------------------
*Amy R. Doberman
Attorney-in-Fact
*Executed pursuant to Power of Attorney dated December 10, 1997 and filed
with the Securities and Exchange Commission on January 16, 1998 (Accession No.
0000950146-98-000093).
**Executed pursuant to Power of Attorney dated June 24, 1998 and filed with the
Securities and Exchange Commission on June 29, 1998 (Accession No.
0000950146-98-001122).
<PAGE>
Aetna Variable Portfolios, Inc.
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Exhibit Page
- ----------- ------- ----
<S> <C> <C>
99-B.1(a) Articles of Incorporation *
99-B.1(b) Articles of Amendment *
99-B.1(c) Articles Supplementary *
99-B.1(d) Articles of Amendment *
99-B.2 Amended Bylaws *
99-B.4 Instruments Defining Rights of Holders *
99-B.5(a) Investment Advisory Agreement between Aeltus Investment Management, Inc. *
("Aeltus") and Aetna Variable Portfolios, Inc., on behalf of Aetna Value
Opportunity VP, Aetna Growth VP, Aetna Small Company VP, Aetna Index Plus Large
Cap VP, Aetna High Yield VP, Aetna Index Plus Bond VP, Aetna Index Plus Mid Cap
VP, Aetna Index Plus Small Cap VP, Aetna International VP, Aetna Mid Cap VP and
Aetna Real Estate Securities VP
99-B.5(b) Subadvisory Agreement between Bradley, Foster & Sargent, Inc. and Aetna Variable **
Portfolios, Inc., on behalf of Aetna Value Opportunity VP
99-B.6 Underwriting Agreement between Aetna Variable Portfolios, Inc. and Aetna Life *
Insurance and Annuity Company
99-B.7 Directors' Deferred Compensation Plan *
99-B.8(a) Custodian Agreement between Aetna Variable Portfolios, Inc. and Mellon Bank, N.A. *
for Aetna Value Opportunity VP, Aetna Growth VP, Aetna Index Plus Large Cap VP
and Aetna Small Company VP
99-B.8(b) Amendment to Custodian Agreement between Aetna Variable Portfolios, Inc. and *
Mellon Bank, N.A. for Aetna Index Plus Bond VP, Aetna Index Plus Mid Cap VP,
Aetna Mid Cap VP, Aetna Index Plus Small Cap VP, Aetna High Yield VP and Aetna
Real Estate Securities VP
</TABLE>
*Incorporated by reference
**To be filed
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Exhibit Page
- ----------- ------- ----
<S> <C> <C>
99-B.8(c) Custodian Agreement between Aetna Variable Portfolios, Inc. and Brown Brothers *
Harriman & Co. for Aetna International VP
99-B.9(a) Administrative Services Agreement between Aeltus and Aetna Variable Portfolios, *
Inc., on behalf of Aetna Value Opportunity VP, Aetna Growth VP, Aetna Small
Company VP, Aetna Index Plus Large Cap VP, Aetna High Yield VP, Aetna Index Plus
Bond VP, Aetna Index Plus Mid Cap VP, Aetna Index Plus Small Cap VP, Aetna
International VP, Aetna Mid Cap VP and Aetna Real Estate Securities VP
99-B.9(b) License Agreement *
99-B.10 Opinion and Consent of Counsel
----------
99-B.11 Consent of Independent Auditors
----------
99-B.13(a) Agreement re: Initial Contribution to Working Capital for Aetna Value Opportunity *
VP, Aetna Growth VP, Aetna Index Plus Large Cap VP and Aetna Small Company VP
99-B.13(b) Agreement re: Initial Contribution to Working Capital for Aetna Index Plus Bond *
VP, Index Plus Mid Cap VP, Aetna Mid Cap VP, Index Plus Small Cap VP, Aetna High
Yield VP, Aetna Real Estate Securities VP and Aetna International VP
99-B.16 Schedule for Computation of Performance Data *
99-B.19(a) Power of Attorney *
99-B.19(b) Power of Attorney *
99-B.19(c) Authorization for Signatures *
27 Financial Data Schedule **
</TABLE>
*Incorporated by reference
**To be filed
[Aetna Letterhead] Aetna Inc.
[Aetna Logo] 242 Trumbull Street
Hartford, CT 06103-1205
Amy R. Doberman
Counsel
Law Division, ALT5
July 30, 1998 Investments & Financial Services
(860) 275-2032
Fax: (860) 275-2158
U.S. Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Attention: Filing Desk
Re: Aetna Variable Portfolios, Inc.
Post-Effective Amendment No. 5 to
Registration Statement on Form N-1A
(File No. 333-05173 and 811-7651)
Dear Sir or Madam:
The undersigned serves as counsel to Aeltus Investment Management, Inc., the
investment adviser to Aetna Variable Portfolios, Inc., a Maryland corporation
(the "Company"). It is my understanding that the Company has registered an
indefinite number of shares of beneficial interest under the Securities Act of
1933 (the "1933 Act") pursuant to Rule 24f-2 under the Investment Company Act of
1940 (the "1940 Act").
Insofar as it relates or pertains to the Company, I have reviewed the prospectus
and the Company's Registration Statement on Form N-1A, as amended to the date
hereof, filed with the Securities and Exchange Commission under the 1933 Act and
the 1940 Act, pursuant to which the Shares will be sold (the "Registration
Statement"). I have also examined originals or copies, certified or otherwise
identified to my satisfaction, of such documents and other instruments I have
deemed necessary or appropriate for the purpose of this opinion. For purposes of
such examination, I have assumed the genuineness of all signatures on original
documents and the conformity to the original of all copies.
I am admitted to practice law in Connecticut, Maryland and the District of
Columbia. My opinion herein as to Maryland law is based upon a limited inquiry
thereof that I have deemed appropriate under the circumstances.
<PAGE>
Page 2
July 30, 1998
Based upon the foregoing, and assuming the securities are issued and sold in
accordance with the provisions of the Company's Articles of Incorporation and
the Registration Statement, I am of the opinion that the securities will when
sold be legally issued, fully paid and nonassessable.
I consent to the filing of this opinion as an exhibit to the Registration
Statement.
Sincerely,
/s/ Amy R. Doberman
- -------------------
Amy R. Doberman
Counsel
Consent of Independent Auditors
The Board of Directors and Shareholders
Aetna Variable Portfolios, Inc.:
We consent to the incorporation by reference herein this Post-Effective
Amendment No. 5 to the Registration Statement (File No. 333-05173) on Form N-1A
our reports dated February 13, 1998.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Hartford, Connecticut
July 30, 1998
