<PAGE> 1
[Atlas Annuities(R) 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
29.41% annual total return in 1999(1). This performance was more
than 8 percentage points higher than the return of the Standard
and Poor's 500 Index (S&P 500) for the same time period, and more
than 30 percentage points higher than that of the Lehman Brothers
Aggregate Bond Index(2). In addition, the BALANCED GROWTH
PORTFOLIO placed in the top 3% of all portfolios among its peers
in Morningstar's Domestic Hybrid category(3). Plus, as of
December 31, 1999, the average annual total return since
inception on September 30, 1997 was 17.57%(1), more than 50%
higher than the average annual total return of the Domestic
Hybrid category for that same period.
The BALANCED GROWTH PORTFOLIO is a "fund of funds" that seeks
long-term growth of capital and moderate current income, and
provides diversification by allocating assets 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 to take advantage of various market conditions. As of
December 31, 1999, the portfolio held 66% stocks, 20% bonds, and
14% cash, with assets invested in the underlying Atlas Funds as
follows:
<TABLE>
<CAPTION>
Atlas Funds % of Investments
----------- ----------------
<S> <C>
Global Growth 25.7%
Growth and Income 25.2
Strategic Growth 14.8
Emerging Growth 11.6
Strategic Income 9.8
U.S. Government and Mortgage
Securities 9.4
U.S. Treasury Money 3.5
------
Total 100.0%
</TABLE>
(1) Annual total returns do not include surrender charges or
insurance charges for the variable annuity, but do include
fund operating expenses.
(2) The Standard and Poor's 500 Index and the Lehman Brothers
Aggregate Bond Index are two representative total return
indices for the markets in which the Balanced Growth
Portfolio invests.
(3) Morningstar is an independent agency that rates mutual funds
and variable annuity portfolios. As of 12/31/99, there were
618 portfolios in the Domestic Hybrid category.
<PAGE> 2
The Economy and the Markets
The U.S. economy experienced both robust growth and low
inflation throughout 1999. For the fourth straight year, the
growth rate was more than 4%. By yearend, unemployment had fallen
to a 30-year low of 4.1%, and inflation was still below 3%.
The healthy economy created strong earnings for U.S.
companies, and the major stock market indices climbed
considerably. For an unprecedented fifth straight year, both the
Dow Jones Industrial Average (the Dow) and the S&P 500 posted
double digit growth. The Dow was up 25.2% for the year, and the
S&P 500 21.0%. Most of the increases occurred in the fourth
quarter, fueled by remarkable gains in the technology sector. The
Nasdaq Composite Index, which is dominated by large technology
companies, finished the year up 85.6%. Led by Internet
businesses, even small companies staged a rebound, and the
Russell 2000 Index, a measure of small-capitalization stocks,
rose 21.3%.
Stock markets abroad also experienced a revival, as
conditions in foreign markets changed substantially from 1998,
when a global collapse was feared. Japan, a laggard for a decade,
turned in a strong performance. Even emerging countries in Asia
and Latin America enjoyed rebounding economies and posted
double-digit gains. Most markets in Europe were lethargic until
late in the year when technology and telecommunications stocks
fueled rallies in several countries.
However, the vigorous U.S. economy and stock market surfaced
concerns about inflation. Reacting to these fears, the bond
market suffered its second worst year in more than a quarter of a
century, despite the Federal Reserve's attempts to cool the
economy by raising the overnight federal funds rate three times
during the year. The yield on the benchmark 30-year Treasury
bond, which moves in the opposite direction from its price, began
1999 at 5.10% - the lowest level in decades - and increased
steadily to end December at 6.48%. Municipal bonds, corporate
bonds, and mortgage-backed securities also saw their yields rise
as their prices declined.
Portfolio Review
In light of the activity in the markets over the past year,
the manager gradually shifted assets within the BALANCED GROWTH
PORTFOLIO, contributing to its 29.41% annual total return. To
take advantage of the opportunities that surfaced in the
overseas, small- and mid-capitalization markets, more assets were
allocated to the ATLAS GLOBAL GROWTH, ATLAS EMERGING GROWTH, and
ATLAS STRATEGIC GROWTH FUNDS, respectively. The primary source of
this redistribution was the ATLAS BALANCED FUND. Investments in
the ATLAS STRATEGIC INCOME and ATLAS U.S. GOVERNMENT AND MORTGAGE
SECURITIES FUNDS didn't change significantly. The ATLAS U.S.
TREASURY MONEY FUND was added to the portfolio for more
liquidity.
<PAGE> 3
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 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
Performance Compared to the Market
- --------------------------------------------------------------------------------
The following chart compares the growth of a hypothetical $10,000 investment
in the Atlas Balanced Growth Portfolio to two representative indices for the
markets in which the portfolio invests. Index performance does not include
management expenses and the mix, quality and maturity of securities in an index
may vary widely from those in the underlying funds in the Balanced Growth
Portfolio. All returns reflect the reinvestment of dividends and capital gains.
It does not reflect either insurance company or surrender charges imposed in
connection with the variable annuity. As always, past performance is no
guarantee of future results.
[WORLD SAVINGS/ATLAS FUND GRAPHIC]
<TABLE>
<CAPTION>
STANDARD & POOR'S
ATLAS BALANCED GROWTH COMPOSITE INDEX OF 500 LEHMAN BROTHERS AGGREGATE
PORTFOLIO* STOCKS BOND INDEX
--------------------- ---------------------- -------------------------
<S> <C> <C> <C>
9/97 10000 10000 10000
12/97 9872 10287 10295
3/98 10772 11721 10453
6/98 10856 12109 10698
9/98 9840 10907 11150
12/98 11126 13229 11188
3/99 11386 13888 11131
6/99 11907 14867 11033
9/99 11625 13939 11107
12/99 14398 16013 11094
</TABLE>
* Inception of operations of the Atlas Balanced Growth Portfolio.
<PAGE> 5
Atlas Balanced Growth Portfolio
Statement of Net Assets December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENTS: (91.22%)
Investment in Atlas Funds, at identified cost............. $11,887,786
---------
---------
</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............ 142,013 8.65% $ 1,364,740
Strategic Income Fund................................... 300,760 8.90 1,404,550
Growth and Income Fund.................................. 136,123 22.96 3,622,229
Strategic Growth Fund................................... 103,651 13.49 2,127,954
Global Growth Fund...................................... 191,871 23.45 3,699,272
Emerging Growth Fund.................................... 88,466 10.54 1,662,269
U.S. Treasury Money Fund................................ 511,033 3.23 511,033
---------
14,392,047
---------
OTHER ASSETS AND LIABILITIES: (8.78%)
Distributions receivable.................................. 1,406,652
Other assets.............................................. 61,609
Liabilities............................................... (82,245)
---------
Total other assets and liabilities........................ 1,386,016
---------
NET ASSETS (100.00%)........................................ $15,778,063
---------
---------
NET ASSETS CONSIST OF:
Unrealized appreciation................................... $ 2,504,261
Accumulated net realized loss............................. (767,001)
Undistributed net investment income....................... 308,343
Paid in capital........................................... 13,732,460
---------
NET ASSETS.................................................. $15,778,063
---------
---------
NET ASSET VALUE PER SHARE:
Net assets................................................ $15,778,063
Beneficial interest shares outstanding.................... 1,350,540
---------
---------
Net asset value per share................................. $ 11.68
---------
---------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 6
Atlas Balanced Growth Portfolio
Statement of Operations for the year ended December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Distribution income from Atlas Funds.................... $1,657,454
Interest................................................ 407
--------
Total income.............................................. 1,657,861
--------
Expenses:
Transfer agency fees and expenses....................... 38,120
Management fees (Note 5)................................ 32,164
Custodian fees and expenses............................. 28,647
Accounting and legal fees............................... 11,469
Printing and postage.................................... 5,595
Amortization of organization costs (Note 2)............. 5,052
Trustees' fees.......................................... 556
Other................................................... 58
--------
Gross expenses............................................ 121,661
Waiver of management fees............................... (32,164)
Expense reimbursement................................... (25,278)
--------
Net expenses.............................................. 64,219
--------
Net investment income..................................... 1,593,642
--------
REALIZED GAIN AND UNREALIZED APPRECIATION ON INVESTMENTS:
Realized gain:
Proceeds from sales..................................... 8,575,856
Cost of securities sold................................. 8,247,753
--------
Net realized gain......................................... 328,103
--------
Unrealized appreciation:
Beginning of year....................................... 846,140
End of year............................................. 2,504,261
--------
Unrealized appreciation................................... 1,658,121
--------
Net realized gain and unrealized appreciation of
investments............................................. 1,986,224
--------
Net increase in net assets resulting from operations...... $3,579,866
--------
--------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 7
Atlas Balanced Growth Portfolio
Statements of Changes in Net Assets for the years ended December 31
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income..................................... $ 1,593,642 $ 613,713
Net realized gain (loss) on investments................... 328,103 (785,182)
Net change in unrealized appreciation on investments...... 1,658,121 1,024,523
--------- ---------
Net increase in net assets resulting from operations...... 3,579,866 853,054
--------- ---------
DISTRIBUTIONS PAID TO SHAREHOLDERS:
Distributions from net investment income.................. (1,594,110) (304,807)
Distributions from net realized gain on investments....... (308,565) --
--------- ---------
Total distributions paid to shareholders.................. (1,902,675) (304,807)
--------- ---------
BENEFICIAL INTEREST SHARE TRANSACTIONS:(1)
Proceeds from shares sold................................. 2,094,550 9,315,457
Proceeds from shares issued in reinvestment of
distributions........................................... 1,902,675 304,807
Cost of shares repurchased................................ (2,456,007) (1,121,054)
--------- ---------
Net increase in net assets resulting from beneficial
interest share transactions............................. 1,541,218 8,499,210
--------- ---------
Net increase in net assets................................ 3,218,409 9,047,457
NET ASSETS:
Beginning of year......................................... 12,559,654 3,512,197
--------- ---------
End of year............................................... $15,778,063 $12,559,654
--------- ---------
--------- ---------
(1) Share Transactions:
Sold.................................................... 192,950 931,984
Issued in reinvestment of dividends..................... 162,900 29,708
Redeemed................................................ (229,917) (113,515)
--------- ---------
Net increase in shares outstanding........................ 125,933 848,177
--------- ---------
--------- ---------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 8
Atlas Balanced Growth Portfolio
Financial Highlights selected data for a share outstanding throughout each
period
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1999(1) 1998(1) 1997(2)
<S> <C> <C> <C>
Net asset value, beginning of period........................ $ 10.26 $ 9.33 $10.00
------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income..................................... 1.34 0.58 0.55
Net realized and unrealized gain (loss) on investments.... 1.68 0.61 (0.68)
------ ------ ------
Total from investment operations.......................... 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.............................. $ 11.68 $ 10.26 $ 9.33
------ ------ ------
------ ------ ------
Total return, aggregate(3).................................. 29.41% 12.70% -1.28%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's)......................... $15,778 $12,560 $3,512
Ratio of expenses to average net assets:(4)
Before expense waivers and reimbursement................ 0.95% 1.34% 2.82%
After expense waivers and reimbursement................. 0.50% 0.50% 0.50%
Ratio of net investment income to average net assets(4)... 12.40% 6.73% 38.25%
Portfolio turnover rate................................... 64.47% 114.79% 1.49%
</TABLE>
(1) For the year ended December 31.
(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) Annualized when the period presented is less than one year.
The accompanying notes are an integral part of these financial statements.
<PAGE> 9
Atlas Balanced Growth Portfolio
Notes to Financial Statements December 31, 1999
- --------------------------------------------------------------------------------
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> 10
Atlas Balanced Growth Portfolio
Notes to Financial Statements (continued) December 31, 1999
- --------------------------------------------------------------------------------
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 December 31, 1999, net unrealized appreciation of investment securities
for federal income tax purposes was $2,020,636 consisting of unrealized gains of
$2,680,822 and unrealized losses of $660,186. Cost of securities for federal
income tax purposes was $12,371,411.
4. PURCHASES AND SALES OF SECURITIES
During the year ended December 31, 1999, the Portfolio purchased $8,918,173 of
investment securities and sold $8,575,856 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 year ended December 31, 1999, the
management fees due the Adviser were reduced by $32,164. The Adviser also
absorbed $25,278 of other Fund expenses during the year.
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 December 31, 1999 Golden West Financial owned 116,324 Class A shares of
Emerging Growth Fund.
<PAGE> 11
Atlas Balanced Growth Portfolio
Independent Auditors' Report
- --------------------------------------------------------------------------------
The Board of Trustees and Shareholders
Atlas Insurance Trust:
We have audited the accompanying statement of net assets of the Atlas
Insurance Trust (Balanced Growth Portfolio) (the "Fund") as of December 31,
1999, the related statement of operations for the year ended December 31, 1999,
the statements of changes in net assets for the years ended December 31, 1999
and 1998, and the financial highlights for the years ended December 31, 1999 and
1998, and for the period from September 30, 1997 (inception of operations) to
December 31, 1997. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned at December 31, 1999 by corresponding with the custodian. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Fund at December 31, 1999 and the results of its operations, the changes in its
net assets, and the financial highlights for the respective stated periods in
conformity with generally accepted accounting principles.
LOGO
Oakland, California
February 11, 2000
