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[ATLAS ANNUITIES
LOGO HERE]
FROM THE OFFICE OF MARION O. SANDLER
President and Chief Executive Officer
Dear Valued Policyholder,
We are pleased to report that the BALANCED GROWTH PORTFOLIO in your
ATLAS PORTFOLIO BUILDER variable annuity produced a total return of
7.02% for the first half of 1999(1). The Balanced Growth Portfolio
seeks long-term growth and moderate current income and provides
investors with a convenient way to diversify assets invested in Atlas
Portfolio Builder.
The portfolio invests in up to eight Atlas stock, bond, and money
market funds. Under normal market conditions, a fairly conservative
allocation of 60% stocks, 30% bonds, and 10% cash is maintained. As of
June 30, the portfolio was invested 65% in stocks, 27% in bonds, and
8% in cash, and assets were spread among the underlying Atlas Funds as
follows:
Atlas Funds % of Investments
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Balanced 15.2%
Emerging Growth 5.1
Global Growth 16.4
Growth and Income 37.0
Strategic Growth 5.4
Strategic Income 9.9
U.S. Government and Mortgage
Securities 9.8
U.S. Treasury Money 1.2
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Total 100.0%
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(1) Annual total return for the year ended 6/30/99 was 9.68% and since
inception on 9/30/97 was 10.50%. Total return does not include surrender
charges or insurance charges for the variable annuity.
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The Markets Year To Date
The stock market continued its record climb during the first half of 1999,
as a brisk U.S. economy, low inflation, and growth in corporate earnings drove
stock prices higher. On June 30, the Standard & Poor's 500 Index closed at an
all time high, with a gain of 11.7% for the first six months. The Dow Jones
Industrial Average experienced even greater gains, rising 19.5%, but closing
below its record May high.
For the past several years, the stocks of large, growth-oriented companies
have experienced the greatest gains, while most other equities lagged behind.
The second quarter saw a change in market leadership as stocks of small and
medium-sized companies showed renewed strength. "Value" stocks, such as
chemicals and oils, that are low priced compared to their earnings potential
also outperformed the large growth companies. Outside the U.S., stock markets in
many emerging countries that had experienced financial turmoil during 1998
showed impressive gains.
Despite strong growth in the U.S. during the first half, inflation was held
in check by falling commodity prices and gains in productivity. However, many
analysts, including those at the Federal Reserve, feared these trends could not
continue and that vigorous consumer spending, tight labor markets, and
accelerating wages might lead to a surge in inflation.
Increasing fears of inflation and improving economic conditions around the
world put pressure on long-term interest rates, which rose sharply during the
first two quarters. The benchmark 30-year Treasury bond began the year at 5.10%
and rose to 5.60% by the end of the first quarter. Rates peaked at 6.16% on June
14, as markets anticipated that the Open Market Committee of the Federal Reserve
would raise the overnight federal funds rate. On June 30, this group raised
rates by one quarter of one percent, while the Fed changed its stance regarding
possible future rate increases from "probable" to "neutral." Bond prices
recovered somewhat, and the rate on 30-year Treasuries closed out the second
quarter at 5.96%.
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 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
have about your annuity, provide you with information about Atlas Funds, or
prepare a complimentary review of your investment portfolio. For an appointment,
just call 1-800-ATLAS (1-800-933-2852).
We appreciate the trust you've placed in Atlas, and we look forward to
serving your financial needs for many years to come.
Sincerely,
/S/ Marion O. Sandler
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Marion O. Sandler
President and Chief Executive Officer
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<TABLE>
ATLAS BALANCED GROWTH PORTFOLIO
STATEMENT OF NET ASSETS JUNE 30, 1999 (UNAUDITED)
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<CAPTION>
<S> <C> <C> <C>
INVESTMENTS: (99.65%)
Investment in Atlas Funds, at identified cost................... $ 11,394,581
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Percent of
Shares Net Assets
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Investment in Atlas Funds, at value:
U.S. Government and Mortgage Securities Fund................. 128,275 9.76% $ 1,264,795
Strategic Income Fund........................................ 268,524 9.90 1,283,543
Balanced Fund................................................ 133,239 15.12 1,959,941
Growth and Income Fund....................................... 190,921 36.93 4,786,400
Strategic Growth Fund........................................ 37,095 5.40 699,617
Global Growth Fund........................................... 130,141 16.34 2,117,397
Emerging Growth Fund......................................... 51,765 5.04 653,793
U.S. Treasury Money Fund..................................... 150,729 1.16 150,729
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12,916,215
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OTHER ASSETS AND LIABILITIES: (0.35%)
Other assets.................................................... 57,478
Liabilities..................................................... (12,466)
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Total Other Assets and Liabilities.............................. 45,012
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NET ASSETS (100.00%) ............................................. $ 12,961,227
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NET ASSETS CONSIST OF:
Unrealized appreciation......................................... $ 1,521,634
Accumulated net realized loss................................... (709,030)
Undistributed net investment income............................. 399,847
Paid in capital................................................. 11,748,776
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NET ASSETS........................................................ $ 12,961,227
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NET ASSET VALUE PER SHARE:
Net assets...................................................... $ 12,961,227
Beneficial interest shares outstanding ......................... 1,180,163
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Net asset value per share....................................... $ 10.98
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THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
</TABLE>
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<TABLE>
ATLAS BALANCED GROWTH PORTFOLIO
STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1999 (UNAUDITED)
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<S> <C>
INVESTMENT INCOME:
Income:
Distribution income from Atlas Funds..................................................... $ 120,993
Interest................................................................................. 192
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Total income............................................................................... 121,185
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Expenses:
Printing and postage..................................................................... 20,171
Transfer agency fees and expenses........................................................ 18,079
Management fees (Note 5)................................................................. 15,229
Custodian fees and expenses.............................................................. 14,798
Accounting and legal fees................................................................ 6,145
Amortization of organization costs (Note 2).............................................. 2,516
Trustees' fees........................................................................... 305
Other.................................................................................... 32
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Gross expenses............................................................................. 77,275
Waiver of management fees................................................................ (15,229)
Expense reimbursement.................................................................... (31,897)
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Net expenses............................................................................... 30,149
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Net investment income...................................................................... 91,036
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REALIZED GAIN AND UNREALIZED APPRECIATION ON INVESTMENTS:
Realized gain:
Proceeds from sales...................................................................... 3,657,802
Cost of securities sold.................................................................. 3,580,293
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Net realized gain.......................................................................... 77,509
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Unrealized appreciation:
Beginning of period...................................................................... 846,140
End of period............................................................................ 1,521,634
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Unrealized appreciation.................................................................... 675,494
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Net realized gain and unrealized appreciation of investments............................... 753,003
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Net increase in net assets resulting from operations....................................... $ 844,039
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THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
</TABLE>
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<TABLE>
ATLAS BALANCED GROWTH PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
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<CAPTION>
1999(2) 1998(3)
<S> <C> <C>
OPERATIONS:
Net investment income..................................................... $ 91,036 $ 613,713
Net realized gain (loss) on investments................................... 77,509 (785,182)
Net unrealized appreciation on investments................................ 675,494 1,024,523
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Net increase in net assets resulting from operations...................... 844,039 853,054
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DISTRIBUTIONS PAID TO SHAREHOLDERS:
Distributions from net investment income.................................. -- (304,807)
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BENEFICIAL INTEREST SHARE TRANSACTIONS:(1)
Proceeds from shares sold................................................. 1,158,465 9,315,457
Proceeds from shares issued in reinvestment of distributions.............. -- 304,807
Cost of shares repurchased................................................ (1,600,931) (1,121,054)
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Net increase in net assets resulting from beneficial interest share....... (442,466) 8,499,210
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Net increase in net assets................................................ 401,573 9,047,457
NET ASSETS:
Beginning of period....................................................... 12,559,654 3,512,197
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End of period............................................................. $ 12,961,227 $ 12,559,654
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(1) Share Transactions:
Sold...................................................................... 109,491 931,984
Issued in reinvestment of dividends....................................... -- 29,708
Redeemed.................................................................. (153,935) (113,515)
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Net increase (decrease) in shares outstanding............................. (44,444) 848,177
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(2) For the six months ended June 30, 1999 (unaudited).
(3) For the year ended December 31.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
</TABLE>
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<TABLE>
ATLAS BALANCED GROWTH PORTFOLIO
FINANCIAL HIGHLIGHTS SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
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<CAPTION>
1999(1) 1998(2) 1997(3)
<S> <C> <C> <C>
Net asset value, beginning of period................................ $ 10.26 $ 9.33 $ 10.00
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INCOME FROM INVESTMENT OPERATIONS:
Net investment income............................................ 0.08 0.58 0.55
Net realized and unrealized gain (loss) on investments........... 0.64 0.61 (0.68)
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Total from investment operations................................. 0.72 1.19 (0.13)
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LESS DISTRIBUTIONS:
Distributions from net investment income......................... -- (0.26) (0.54)
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Net asset value, end of period...................................... $ 10.98 $ 10.26 $ 9.33
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Total return, aggregate(4).......................................... 7.02% 12.70% -1.28%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's)................................ $12,961 $12,560 $ 3,512
Ratio of expenses to average net assets:(5)
Before expense reimbursement................................... 1.28% 1.34% 2.82%
After expense reimbursement.................................... 0.50% 0.50% 0.50%
Ratio of net investment income to average net assets(5).......... 1.51% 6.73% 38.25%
Portfolio turnover rate (Note 4)................................. 27.01% 114.79% 1.49%
(1) For the six months ended June 30, 1999 (unaudited).
(2) For the year ended December 31, 1998.
(3) For the period September 30, 1997 (inception of operations) to December 31, 1997.
(4) Total return assumes purchase at net asset value at the beginning of the period.
(5) Annualized when the period presented is less than one year.
</TABLE>
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ATLAS BALANCED GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS JUNE 30, 1999 (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.
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.
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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, 1999, unrealized appreciation of investment securities for
federal income tax purposes was $1,044,385, consisting of unrealized gains of
$1,641,397 and unrealized losses of $597,012. Cost of securities for federal
income tax purposes was $11,871,830.
4. PURCHASES AND SALES OF SECURITIES
During the six months ended June 30, 1999, the Portfolio purchased
$3,301,323 of investment securities and sold $3,657,802 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, 1999, the management fees due the Adviser were reduced by $15,229. The
Adviser also absorbed $31,897 of other Fund expenses during the period.
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, 1999 Golden West Financial owned 116,324 Class A shares of
Emerging Growth Fund.
