<PAGE> 1
[Atlas Funds logo]
FROM THE OFFICE OF MARION O. SANDLER
Chairman of the Board 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 solid
6.51% total return for the first half of 2000.(1) By comparison,
the Dow Jones Industrial Average fell 9.1% during the same time
period. Additionally, BALANCED GROWTH placed in the top 3% of its
peers in Morningstar's Domestic Hybrid category for the 12 months
ended June 30.(2)
The BALANCED GROWTH PORTFOLIO is a "fund of funds" that seeks
long-term growth of capital and moderate current income. Assets
are allocated in as many as eight Atlas stock, bond, and money
market funds. The portfolio's manager seeks to maintain a stock,
bond, and cash ratio of approximately 60%, 30%, and 10%,
respectively (adjusting proportions in response to various market
conditions). At the end of June, the portfolio held 62% stocks,
22% bonds, and 16% cash, with assets invested in the underlying
Atlas Funds as follows:
<TABLE>
<CAPTION>
Atlas Funds % of Investments
----------- ----------------
<S> <C>
Global Growth 25.1%
Strategic Growth 16.1
Growth and Income 15.7
Balanced 10.9
Strategic Income 9.0
Emerging Growth 9.0
U.S. Government and Mortgage
Securities 9.0
U.S. Treasury Money 5.2
------
Total 100.0%
</TABLE>
(1) Annual total return for the year ended 6/30/00 was 28.79% and
since inception on 9/30/97 was 16.82%. Total returns do not
include surrender charges or insurance charges for the
variable annuity, but do include fund operating expenses.
(2) Morningstar is an independent agency that rates mutual funds
and variable annuity portfolios. As of 6/30/00, there were
673 portfolios in the Domestic Hybrid category.
<PAGE> 2
The Economy And The Markets
The U.S. economy maintained strong growth during the first
half of 2000, although at a more moderate rate than during the
fourth quarter 1999. Unemployment remained low, closing out the
second quarter at 4.0%.
In its quest to slow the economy, the Federal Reserve's Open
Market Committee continued to increase interest rates. Following
three hikes in 1999, the Federal Reserve raised the overnight
federal funds rate by one-quarter percent in February and again
in March and by one-half percent in May, resulting in a 9-year
high of 6.5% by the end of the second quarter.
During the spring, rising interest rates, combined with stock
market corrections, began to have an impact. For the first time
in two years, retail sales posted back-to-back declines in April
and May. Sales of existing homes and autos also eased. By the end
of the second quarter, it appeared that the red-hot economy was
finally slowing.
It was a volatile period for the stock markets, particularly
the technology-heavy Nasdaq. The Nasdaq began the year at 4,069,
surged above 5,000 in March, then fell over 37% to a low of 3,164
in May, before recovering to 3,966 by the end of June. Although
the index had a net loss of 2.5% for the first half, it
maintained a gain of nearly 48% for the 12-month period. The Dow
also had its ups and downs, posting negative returns for both
quarters. Many stocks, particularly in the technology sector, had
reached prices that were considered excessive by historical
standards. Profit taking set in as investors became fearful about
the impact of rising interest rates on corporate profits and lost
patience with the high-flying "dot-coms," many of which had no
earnings. A comforting aspect of the sell-off was that money
didn't leave the market, but rather moved into more attractively
priced sectors that had been overlooked for some time.
In the bond market, short-term rates responded to Federal
Reserve tightening, and yields on 6-month Treasury bills rose
from 5.73% at the beginning of the year to 6.22% on June 30. In
contrast, prices on longer-term Treasuries rallied and yields
fell as the government bought back bonds to reduce the national
debt, and inflationary expectations began to ease. Yields on
30-year Treasury bonds fell from 6.48% at yearend 1999 to 5.90%
at the end of second quarter.
On June 30, the outlook for the rest of the year remained
uncertain. The labor market continued to be tight and retail
inflation, as measured by the Consumer Price Index, was running
at an annualized rate of 3.5%, compared to 1.7% in 1998 and 2.8%
in 1999. The Federal Reserve was keeping its options open, citing
concerns about future inflationary pressures.
<PAGE> 3
Portfolio Review
The BALANCED GROWTH PORTFOLIO withstood the market volatility
of the first half of the year reasonably well, as evidenced by
its 6.51% return for the period. During this time, there was only
one major change in the asset allocation of the portfolio, which
was the shift of some of the assets invested in the Growth and
Income Fund to the Balanced Fund. The level of investment in the
Emerging Growth Fund also changed, decreasing slightly.
The Annuities You Want From the People You Trust
As a sister company of World Savings and a member of the $50
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 have about your annuity, provide you with
information about Atlas Funds, or conduct 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 look
forward to serving your financial needs for many years to come.
Sincerely,
/s/ Marion O. Sandler
Marion O. Sandler
Chairman of the Board and Chief Executive Officer
<PAGE> 4
Atlas Balanced Growth Portfolio
Statement of Net Assets June 30, 2000 (unaudited)
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENTS: (99.78%)
Investment in Atlas Funds, at identified cost............. $16,592,344
---------
---------
</TABLE>
<TABLE>
<CAPTION>
Percent of
Shares Net Assets
--------- ----------
<S> <C> <C> <C>
Investment in Atlas Funds, at value:
U.S. Government and Mortgage Securities Fund............ 182,429 8.95% $ 1,753,145
Strategic Income Fund................................... 389,264 9.03 1,767,258
Balanced Fund........................................... 170,945 10.88 2,129,970
Growth and Income Fund.................................. 109,974 15.68 3,069,361
Strategic Growth Fund................................... 133,141 16.04 3,139,468
Global Growth Fund...................................... 232,826 25.04 4,903,326
Emerging Growth Fund.................................... 99,991 8.97 1,755,846
U.S. Treasury Money Fund................................ 1,016,407 5.19 1,016,407
---------
19,534,781
---------
OTHER ASSETS AND LIABILITIES: (0.22%)
Other assets.............................................. 93,191
Liabilities............................................... (50,717)
---------
Total other assets and liabilities........................ 42,474
---------
NET ASSETS (100.00%)........................................ $19,577,255
---------
---------
NET ASSETS CONSIST OF:
Unrealized appreciation................................... $ 2,942,437
Accumulated net realized loss............................. (302,590)
Undistributed net investment income....................... 438,918
Paid in capital........................................... 16,498,490
---------
NET ASSETS.................................................. $19,577,255
---------
---------
NET ASSET VALUE PER SHARE:
Net assets................................................ $19,577,255
Beneficial interest shares outstanding.................... 1,573,526
---------
---------
Net asset value per share................................. $ 12.44
---------
---------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 5
Atlas Balanced Growth Portfolio
Statement of Operations for the six months ended June 30, 2000 (unaudited)
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Distribution income from Atlas Funds.................... $ 173,508
Interest................................................ 697
--------
Total income.............................................. 174,205
--------
Expenses:
Transfer agency fees and expenses....................... 24,854
Management fees (Note 5)................................ 21,815
Custodian fees and expenses............................. 15,326
Accounting and legal fees............................... 5,868
Printing and postage.................................... 4,099
Amortization of organization costs (Note 2)............. 2,516
Trustees' fees.......................................... 287
Other................................................... 29
--------
Gross expenses............................................ 74,794
Waiver of management fees............................... (21,815)
Expense reimbursement................................... (9,349)
--------
Net expenses.............................................. 43,630
--------
Net investment income..................................... 130,575
--------
REALIZED GAIN AND UNREALIZED APPRECIATION ON INVESTMENTS:
Realized gain:
Proceeds from sales..................................... 4,610,250
Cost of securities sold................................. 4,145,839
--------
Net realized gain......................................... 464,411
--------
Unrealized appreciation:
Beginning of period..................................... 2,504,261
End of period........................................... 2,942,437
--------
Unrealized appreciation................................... 438,176
--------
Net realized gain and unrealized appreciation of
investments............................................. 902,587
--------
Net increase in net assets resulting from operations...... $1,033,162
--------
--------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 6
Atlas Balanced Growth Portfolio
Statements of Changes in Net Assets
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
2000(2)
(unaudited) 1999(3)
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income..................................... $ 130,575 $ 1,593,642
Net realized gain on investments.......................... 464,411 328,103
Net change in unrealized appreciation on investments...... 438,176 1,658,121
---------- ---------
Net increase in net assets resulting from operations...... 1,033,162 3,579,866
---------- ---------
DISTRIBUTIONS PAID TO SHAREHOLDERS:
Distributions from net investment income.................. -- (1,594,110)
Distributions from net realized gain on investments....... -- (308,565)
---------- ---------
Total distributions paid to shareholders.................. -- (1,902,675)
---------- ---------
BENEFICIAL INTEREST SHARE TRANSACTIONS:(1)
Proceeds from shares sold................................. 3,434,236 2,094,550
Proceeds from shares issued in reinvestment of
distributions........................................... -- 1,902,675
Cost of shares repurchased................................ (668,206) (2,456,007)
---------- ---------
Net increase in net assets resulting from beneficial
interest share transactions............................. 2,766,030 1,541,218
---------- ---------
Net increase in net assets................................ 3,799,192 3,218,409
NET ASSETS:
Beginning of period....................................... 15,778,063 12,559,654
---------- ---------
End of period............................................. $19,577,255 $15,778,063
---------- ---------
---------- ---------
(1) Share Transactions:
Sold.................................................... 278,141 192,950
Issued in reinvestment of dividends..................... -- 162,900
Redeemed................................................ (55,156) (229,917)
---------- ---------
Net increase in shares outstanding........................ 222,985 125,933
---------- ---------
---------- ---------
</TABLE>
(2) For the six months ended June 30, 2000.
(3) For the year ended December 31, 1999.
The accompanying notes are an integral part of these financial statements.
<PAGE> 7
Atlas Balanced Growth Portfolio
Financial Highlights selected data for a share outstanding throughout each
period
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
2000(1) 1999(2) 1998(2) 1997(3)
(unaudited)
<S> <C> <C> <C> <C>
Net asset value, beginning of period........................ $ 11.68 $ 10.26 $ 9.33 $10.00
-------- ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income..................................... 0.09 1.34 0.58 0.55
Net realized and unrealized gain (loss) on investments.... 0.67 1.68 0.61 (0.68)
-------- ------ ------ ------
Total from investment operations.......................... 0.76 3.02 1.19 (0.13)
-------- ------ ------ ------
LESS DISTRIBUTIONS:
Distributions from net investment income.................. -- (1.34) (0.26) (0.54)
Distributions from net realized gain on investments....... -- (0.26) -- --
-------- ------ ------ ------
Total distributions....................................... -- (1.60) (0.26) (0.54)
-------- ------ ------ ------
Net asset value, end of period.............................. $ 12.44 $ 11.68 $ 10.26 $ 9.33
-------- ------ ------ ------
-------- ------ ------ ------
Total return, aggregate(4).................................. 6.51% 29.41% 12.70% -1.28%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's)......................... $19,577 $15,778 $12,560 $3,512
Ratio of expenses to average net assets:(5)
Before expense waivers and reimbursement................ 0.86% 0.95% 1.34% 2.82%
After expense waivers and reimbursement................. 0.50% 0.50% 0.50% 0.50%
Ratio of net investment income to average net assets(5)... 1.49% 12.40% 6.73% 38.25%
Portfolio turnover rate................................... 26.60% 65.84% 114.79% 1.49%
</TABLE>
(1) For the six months ended June 30, 2000.
(2) For the year ended December 31.
(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.
The accompanying notes are an integral part of these financial statements.
<PAGE> 8
Atlas Balanced Growth Portfolio
Notes to Financial Statements June 30, 2000 (unaudited)
--------------------------------------------------------------------------------
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.
<PAGE> 9
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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, 2000, unrealized appreciation of investment securities for
federal income tax purposes was $2,458,812 consisting of unrealized gains of
$3,208,384 and unrealized losses of $749,572. Cost of securities for federal
income tax purposes was $17,075,969.
4. PURCHASES AND SALES OF SECURITIES
During the six months ended June 30, 2000, the Portfolio purchased $7,504,773
of investment securities and sold $4,610,250 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, 2000,
the management fees due the Adviser were reduced by $21,815. The Adviser also
absorbed $9,349 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, 2000, Golden West Financial owned 116,324 Class A shares of
Emerging Growth Fund.
