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Atlas Balanced Growth Portfolio
Semi-Annual Report
June 30, 1998
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[ATLAS ANNUITIES LOGO]
ATLAS ANNUITIES(SM)
The annuities you want from the people you trust.
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[ATLAS ANNUITIES LOGO]
ATLAS ANNUITIES(SM)
From the office of Marion O. Sandler
President and Chief Executive Officer
Dear Valued Policyholder,
We are pleased to announce that the Balanced Growth Portfolio
in your Atlas Portfolio Builder generated a total return of
9.97%(1) during the first half of 1998. This "fund of funds,"
which allocates assets among eight Atlas stock, bond, and money
market funds, seeks long-term growth of capital and moderate
current income.
Under normal market conditions, the investment strategy is to
maintain a stock, bond, and cash ratio of approximately 60%,
30% and 10%, respectively. As of June 30th, the portfolio held
approximately 63% stocks, 28% bonds and 9% cash, an allocation
that closely approximates the general guidelines. On that date,
the assets were distributed among the underlying Atlas Funds as
follows:
We Want You To Know . . .
Annuities are not FDIC-insured and are not deposits or obligations of, or
guaranteed by World Savings. They are subject to investment risks including
possible loss of principal.
Atlas Funds % of Assets
- ----------- ------------
Emerging Growth 9.6%
Global Growth 25.1
Strategic Growth 19.8
Growth and Income 10.3
Balanced 9.8
Strategic Income 14.2
U.S. Government and Mortgage
Securities 9.5
Other Assets 1.7
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Total Assets 100.0%
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The Economy and the Markets, Year to Date
The Balanced Growth Portfolio achieved its 9.97% total return
for the first half within the framework of a healthy U.S.
economy. The unemployment rate stayed low, closing the second
quarter at 4.5%. Consumer confidence rose, and retail sales and
personal consumption continued to be strong. Sales of new and
existing homes also increased, due largely to a 30-year fixed
mortgage rate that approached a low 7%.
The inflationary pressures created by a strong economy eased
during the second quarter, as the rate of economic growth
decreased and corporate earnings slowed. This slowdown
translated into good news for the stock market, because it
allowed the Federal Reserve to remain on the sidelines, with no
increases in interest rates. For the first six months of the
year, the Consumer Price Index, one measure of inflation, rose
at an annualized rate of only 1.4%.
The overall economic environment contributed to the stock
market's continuing climb. On May 13th, the Dow Jones
Industrial Average (DJIA) closed above 9200 for the first time
ever and, although it fell back somewhat by June 30th, ended
the first half of the year with a gain of 13.2%. Throughout the
first half of the year, blue chip and other large
capitalization stocks outperformed medium sized and small
companies, as investors directed more money into the relative
safety and predictability of larger businesses.
In the bond market, money poured into U.S. Treasuries as
American investors anticipated falling interest rates and
foreign investors sought a safe harbor from the turmoil in
international markets. With increased demand driving prices up,
the yield on the benchmark 30-year Treasury bond reached a
record low of 5.58% on June 15th.
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The Investments You Want From the People You Trust
As a sister company of World Savings and a member of the $40
billion-strong Golden West Financial Corporation, Atlas is
dedicated to providing you the quality products, personal
service and caring professional advice you've come to expect
from World. Your Atlas Representative will be happy to answer
any questions you may have about your annuity, provide you with
more information about Atlas Mutual Funds, or prepare a
complimentary review of your investment portfolio. For an
appointment, simply call 1-800-933-ATLAS (1-800-933-2852).
We appreciate the trust you've placed in Atlas, and we look
forward to serving you for many years to come.
Sincerely,
/s/ Marion O. Sandler
(Mrs.) Marion O. Sandler
President and Chief Executive Officer
(1) Total return includes price change, plus income and capital
gains distributions. It has not been annualized and does not
include annual insurance fees or surrender charges.
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<TABLE>
Statement of Net Assets
June 30, 1998 (unaudited)
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<CAPTION>
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Balanced
Growth
Portfolio
--------------
<S> <C> <C> <C>
Investments: (98.14%)
Investment in Atlas Funds, at identified cost ...... $ 10,034,003
============
Per Cent of
Shares Net Assets
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Investment in Atlas Funds, at value:
U.S. Government and Mortgage Securities Fund ...... 98,049 9.48% $ 998,139
Strategic Income Fund .............................. 291,020 14.20 1,495,844
Balanced Fund .................................... 68,397 9.75 1,027,324
Growth and Income Fund ........................... 49,921 10.28 1,083,294
Strategic Growth Fund .............................. 111,825 19.78 2,083,295
Global Growth Fund ................................. 181,258 25.05 2,639,110
Emerging Growth Fund .............................. 71,675 9.60 1,011,329
U.S. Treasury Money Fund ........................... 0 0.00 0
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10,338,335
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Other Assets and Liabilities: (1.86%)
Other assets ....................................... 211,840
Liabilities ....................................... (16,031)
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Total Other Assets and Liabilities .................. 195,809
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Net Assets (100.00%) ................................. $ 10,534,144
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Net Assets Consist Of:
Unrealized appreciation ........................... $ 304,332
Accumulated net realized loss ..................... (14,599)
Undistributed net investment income ............... 48,712
Paid in capital .................................... 10,195,699
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Net Assets .......................................... $ 10,534,144
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Net Asset Value Per Share:
Net assets .......................................... $ 10,534,144
Beneficial interest shares outstanding ............ 1,026,347
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Net asset value per share ........................... $ 10.26
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<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>
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<TABLE>
Statement of Operations for the six months ended
June 30, 1998 (unaudited)
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<CAPTION>
Balanced
Growth
Portfolio
-----------
<S> <C>
Investment Income:
Income:
Interest ......................................................... $ 1,350
Distribution income from Atlas Funds .............................. 64,742
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Total income ...................................................... 66,092
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Expenses:
Management fees (Note 5) .......................................... 8,751
Custodian fees and expenses ....................................... 14,471
Tranfer agency fees and expenses ................................. 12,002
Printing and postage ............................................. 7,500
Accounting fees ................................................... 6,250
Organization costs (Note 2) ....................................... 2,516
Registration fees ................................................ 1,709
Directors' fees ................................................... 1,265
Other ............................................................ 600
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Gross expenses ................................................... 55,064
Waiver of management fees ....................................... (8,751)
Expense reimbursement ............................................. (29,028)
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Net expenses ...................................................... 17,285
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Net investment income ............................................. 48,807
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Realized Loss and Unrealized Appreciation on Investments:
Realized loss:
Proceeds from sales ............................................. 618,104
Cost of securities sold .......................................... 631,346
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Net realized loss ................................................ (13,242)
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Unrealized appreciation(depreciation):
Beginning of period ............................................. (178,383)
End of period ................................................... 304,332
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Unrealized appreciation .......................................... 482,715
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Net realized loss and unrealized appreciation of investments ...... 469,473
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Net increase in net assets resulting from operations ............... $ 518,280
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<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>
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<TABLE>
Statement of Changes in Net Assets for the six months ended
June 30, 1998 (unaudited)
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<CAPTION>
Balanced Growth Portfolio
----------------------------------
1998(2) 1997(3)
<S> <C> <C>
Operations:
Net investment income ......................................................... $ 48,807 $ 193,025
Net realized loss on investments ................................................ (13,242) (1,357)
Net unrealized appreciation (depreciation) on investments ..................... 482,715 (178,383)
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Net increase in net assets resulting from operations ........................... 518,280 13,285
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Distributions Paid to Shareholders:
Distibutions from net investment income ....................................... -- (193,120)
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Beneficial Interest Share Transactions:(1)
Proceeds from shares sold ...................................................... 7,117,097 3,407,177
Proceeds from shares issued in reinvestment of distributions .................. -- 193,120
Cost of shares repurchased ...................................................... (613,430) (8,265)
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Net increase in net assets resulting from beneficial interest share transactions 6,503,667 3,592,032
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Net increase in net assets ...................................................... 7,021,947 3,412,197
Net Assets:
Beginning of period ............................................................ 3,512,197 100,000
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End of period .................................................................. $ 10,534,144 $ 3,512,197
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<FN>
(1) Share Transactions:
Sold ........................................................................... 709,870 346,590
Issued in reinvestment of dividends .......................................... -- 20,699
Redeemed ..................................................................... (59,953) (859)
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Net increase in shares outstanding ............................................. 649,917 366,430
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(2) For the six months ended June 30, 1998 (unaudited).
(3) For the period September 30, 1997 (inception of operations) to December 31,
1997.
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>
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<TABLE>
Financial Highlights selected data for a share outstanding
throughout each period
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<CAPTION>
-----------------------------
Balanced Growth Portfolio
-----------------------------
1998(1) 1997(2)
<S> <C> <C>
Net asset value, beginning of period ................................. $ 9.33 $ 10.00
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Income From Investment Operations:
Net investment income ................................................ 0.07 0.55
Net realized and unrealized gain (loss) on investments ............... 0.86 (0.68)
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Total from investment operations .................................... 0.93 (0.13)
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Less Distributions:
Distributions from net investment income ........................... -- (0.54)
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Net asset value, end of period ....................................... $ 10.26 $ 9.33
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Total return, aggregate (not annualized)(3) ........................... 9.97% -1.28%
Ratios/Supplemental Data:
Net assets, end of period (000's) .................................... $ 10,534 $ 3,512
Ratio of expenses to average net assets (annualized)(4) ............... 0.50% 0.50%
Ratio of net investment income to average net assets (annualized) ... 1.41% 38.25%
Portfolio turnover rate (Note 4) .................................... 8.94% 1.49%
<FN>
(1) For the six months ended June 30, 1998 (unaudited).
(2) For the period September 30, 1997 (inception of operations) to December 31,
1997.
(3) Total return assumes purchase at net asset value at the beginning of the
period.
(4) The Adviser for Balanced Growth Portfolio has agreed to temporarily cap (or
waive) its management fee and to absorb other operating expenses. Had such
action not been taken, the ratio of expenses to average net assets
(annualized) would have been 1.59% and 2.82%, respectively, for the six
months ended June 30, 1998 and the period from September 30, 1997 (inception
of operations) to December 31, 1997.
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>
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Notes to Financial Statements
June 30, 1998 (unaudited)
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1. Significant Accounting Policies
Atlas Insurance Trust (the "Trust") is registered under the Investment
Company Act of 1940 ("1940 Act"), as amended, as an open-end management
investment company. The Trust offers a choice of investment portfolios to
investors through the purchase of variable annuity and variable life policies
which fund insurance company separate accounts. The Trust is a series company
currently offering only the Atlas Balanced Growth Portfolio (the "Portfolio").
The Portfolio, which has as its investment objective long-term growth of
capital and moderate income, invests among eight diversified Atlas mutual funds
(Class A shares) including the U.S. Treasury Money Fund, the U.S. Government
and Mortgage Securities Fund, the Strategic Income Fund, the Balanced Fund, the
Growth and Income Fund, the Strategic Growth Fund, the Global Growth Fund, and
the Emerging Growth Fund (the "Atlas Funds"). Since the Portfolio invests in
shares of a limited number of mutual funds, it is a "nondiversified" investment
company under the 1940 Act. The Portfolio, however, intends to qualify as a
diversified investment company under provisions of the Internal Revenue Code.
Additional diversification requirements under Internal Revenue Code Section
817(h) are imposed on the Portfolio because the Trust is an investment medium
for variable annuity contracts.
The following is a summary of significant accounting policies consistently
used by the Portfolio in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles for
investment companies.
a. Investment Valuation: Investments are valued at the net asset value of each
underlying Atlas Fund determined as of the close of the New York Stock
Exchange (generally 4:00 p.m. eastern time) on each day the Exchange is
open for trading.
b. Federal Income Taxes: It is the Portfolio's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its net investment income,
including any net realized gain on investments, to its shareholders.
Accordingly, no provision for federal income or excise tax is required.
c. Security Transactions: As is common in the industry, security transactions
are accounted for on the date securities are purchased or sold (trade
date). Realized gains and losses on security transactions are determined on
the basis of specific identification for both financial statement and
federal income tax purposes.
d. Investment Income, Expenses and Distributions: Interest income and
estimated expenses are accrued daily. Dividends, representing distributions
from Atlas Funds, are recorded on the ex-dividend date. Distributions of
capital gains, if any, will normally be declared and paid once a year.
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e. Use of Estimates: The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and reported amounts of
revenues and expenses during the reporting period. Actual results could
differ from those estimates.
2. Unamortized Organization Costs
The Trust was organized by Golden West Financial Corporation ("Golden West
Financial"). On July 30, 1997, the Trust sold and issued to Golden West
Financial 10,000 shares of beneficial interest ("Initial Shares"). Organization
costs of $25,156 incurred by the Trust have been deferred and are being
amortized on a straight line basis over a period of five years from October
1997. If any of the Initial Shares are redeemed during the amortization period,
the redemption proceeds will be reduced by any unamortized organization expenses
in the same proportion as the number of Initial Shares being redeemed bears to
the number of Initial Shares outstanding at the time of the redemption.
3. Unrealized Appreciation/Depreciation -- Tax Basis
As of June 30, 1998, unrealized appreciation of investment securities for
federal income tax purposes was $304,332, consisting of unrealized gains of
$339,952 and unrealized losses of $35,620.
4. Purchases and Sales of Securities
During the six months ended June 30, 1998, the Portfolio purchased
$7,032,053 of investment securities and sold $618,104 of investment securities.
5. Transactions With Affiliates and Related Parties
Atlas Advisers, Inc. (the "Adviser") provides portfolio management
services to the Portfolio, the Atlas U.S. Treasury Money Fund and the Atlas
U.S. Government and Mortgage Securities Fund and, with respect to the other
underlying Atlas Funds, supervises the provision of similar services by
OppenheimerFunds, Inc. (the "Subadviser"). The Adviser is responsible for
providing or overseeing all aspects of the Portfolio's day-to-day operations
and implementing the Portfolio's investment programs. The Portfolio pays a fee
for management and administrative services to the Adviser. The management fee
is based on an annual rate of .25% of the Portfolio's average daily net assets.
The Adviser has agreed to reduce its fee and assume expenses of the Portfolio
to the extent necessary to limit the Portfolio's total direct operating
expenses to .50%. Due to the voluntary expense waiver in effect during the six
months ended June 30, 1998, the management fees due the Adviser were reduced by
$8,751. The Adviser also absorbed $29,028 of other Fund expenses during the
period.
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Notes to Financial Statements
June 30, 1998 (unaudited)
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Atlas Securities, Inc. (the "Distributor") acts as principal underwriter
of the Portfolio's shares. The Adviser and Distributor are wholly owned
subsidiaries of Golden West Financial. Certain officers and trustees of the
Trust are also officers and/or directors of the Adviser, the Distributor and
the Atlas Funds.
At June 30, 1998 Golden West Financial owned 116,324 Class A shares of
Emerging Growth Fund.
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