<PAGE>
[PHOTO]
[PHOTO]
[PHOTO]
DECEMBER 31 1998 ANNUAL REPORT
STATE FARM VARIABLE PRODUCT TRUST
[LOGO]
STATE FARM'S VARIABLE DEFERRED ANNUITY &
STATE FARM'S VARIABLE UNIVERSAL LIFE INSURANCE
<PAGE>
SERVICE IS ONLY A PHONE CALL AWAY
1-888-702-2307
Contact your local State Farm Agent or call our Variable Products
Administration Department TOLL FREE, at 1-888-702-2307.
Unit prices are available to you
24 HOURS A DAY, 7 DAYS A WEEK
Operations Specialist available 7 a.m. - 7 p.m.
Central Time Monday Through Friday.
By providing telephone authorization, and having your Personal Identification
Number (PIN), you can:
OBTAIN ACCOUNT VALUES (24 HRS A DAY)
OBTAIN ANSWERS SPECIFIC TO YOUR POLICY
TRANSFER ASSETS AMONG FUNDS
CHANGE YOUR PREMIUM ALLOCATION
CHANGE YOUR PIN
CHANGE YOUR EXISTING DOLLAR COST AVERAGING
CHANGE YOUR EXISTING PORTFOLIO REBALANCING
REQUEST A POLICY WITHDRAWAL
REQUEST A POLICY LOAN
(VARIABLE UNIVERSAL LIFE ONLY)
Visit our home page www.statefarm.com
NOT FDIC INSURED.
- - NO BANK GUARANTEE
- - MAY LOSE VALUE
<PAGE>
MESSAGE FROM ROGER TOMPKINS
I am proud to announce our first annual report and the first anniversary of our
Variable Universal Life and Variable Deferred Annuity products. In our 70th year
of business, the State Farm Life Insurance Companies retain the same strong
conviction that we started with back in 1929 -- a conviction to help our
customers protect themselves from an uncertain future.
[PHOTO]
Our financial strength and claims-paying ability remains strong and we continue
to receive the highest ratings from major agencies like Moody's, Standard &
Poor's and A.M. Best. These high ratings tell you that the company has the
financial strength to provide the benefits promised by each of our policies.
1998 was an excellent year for the State Farm Life Insurance Companies. We saw
an increase in sales, in part due to the launch of our Variable
Products. In addition, we've talked with many of you about what products and
services you would like to see from us in the future. You can expect to see some
innovations and new products from State Farm in the next few years, both to keep
us current with the latest technology as well as to bring you the products and
services you've voiced an interest in.
As you read this report, keep in mind the important features and benefits of
your policy. For example, our Variable Universal Life product combines the
security of life insurance with the opportunity to invest the policy account
value in the underlying investment options described in this report. It offers
the benefit of financial protection for your beneficiaries against your
premature death. On the other hand, our Variable Deferred Annuity allows you to
apply account value to payout options that can provide guaranteed income for as
long as you live and provides a death benefit if you die before annuitization.
We hope you continue to meet regularly with your agent to review your financial
situation and your personal goals, as well as stay in touch with the innovations
and new products we plan to offer. Regular meetings with your agent can help you
periodically check on your changing needs as you provide for the security and
protection of your family.
We appreciate the confidence you've shown in State Farm and in our life
insurance products. We hope our high quality products, great service and
prudently managed investment portfolios continue to meet your needs for many
years to come.
Sincerely,
/s/ Roger Tompkins
Executive Vice President and Chief Administrative Officer
State Farm Life Insurance Company
TABLE OF CONTENTS
<TABLE>
<S> <C>
The Economy and Markets 3
Portfolio of Investments
Large Cap Equity Index Fund 8
Small Cap Equity Index Fund 14
International Equity Index
Fund 33
Stock & Bond Balanced Fund 46
Bond Fund 47
Money Market Fund 50
Financial Statements
Statement of Assets and
Liabilities 52
Statement of Operations 53
Statement of Changes in Net
Assets 54
Notes to Financial Statements 55
Financial Highlights 59
Report of Independent Auditors 65
Notice of Withholding Election
</TABLE>
This report must be accompanied or preceded by a prospectus.
1 -------
<PAGE>
MESSAGE TO VARIABLE PRODUCT CUSTOMERS
[PHOTO]
Financial markets generally provided investors with very good returns in 1998,
but it was necessary to endure the volatility that occurred in late summer and
early fall to reap the rewards. Over the course of the year, investments in
diversified portfolios of U.S. and European large company common stocks and good
quality bonds generally did well. Investments in small company common stocks,
emerging market stocks and bonds, and low quality bonds generally experienced
lower or negative returns.
The backdrop of decent growth in corporate profits and the general economy; low
inflation; accommodating monetary policy; and interest rates moving to low
levels ultimately gave investors the confidence to bid up the values of good
quality investments in 1998. Prices of many financial assets now stand at the
high end of historical valuation levels. In order for these levels to be
maintained and move higher over the short-term, the favorable conditions
mentioned earlier probably need to persist. From a long-term perspective, we
have found that investments in portfolios of securities similar to those owned
by the Funds covered in this report tend to achieve returns that are competitive
with alternative investments which possess similar risks.
The following table presents total return information for the State Farm
Variable Deferred Annuity and the State Farm Variable Universal Life insurance
product. PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT YOUR SHARES, WHEN REDEEMED,
MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
<TABLE>
<CAPTION>
VARIABLE DEFERRED
ANNUITY(1)
--------------------------
TOTAL
TOTAL RETURN RETURN VARIABLE
WITH WITHOUT UNIVERSAL
SURRENDER SURRENDER LIFE TOTAL
FUND CHARGES CHARGES RETURN(2)
- ---------------------- ------------- ----------- ------------
<S> <C> <C> <C>
Large Cap Equity Index
Fund* 19.39% 27.89% 11.94%
Small Cap Equity Index
Fund** -9.51% -2.66% -14.24%
International Equity
Index Fund* 8.65% 16.86% 2.17%
Stock & Bond Balanced
Fund** 5.02% 12.96% 5.21%
Bond Fund* -2.52% 4.85% -2.12%
Money Market Fund** -4.09% 3.17% -4.09%
</TABLE>
* Inception Date: January 22, 1998
** Inception Date: January 29, 1998
As we present this first annual report covering the Funds to you, I cannot
resist imparting a bit of philosophy which is deeply seeded in our investment
activities at State Farm. Uncertainty always exists in all aspects of life,
including investments in financial markets. Investors can cope with the
uncertainties of financial markets by viewing their investments in the suitable
Funds as long-term investments and regularly making periodic investments in the
Funds' shares. Funds should be selected to match an investor's long-term
investment objectives and tolerances for risk. We encourage investors to be
patient and to be prepared to ride out market fluctuations, large and small,
which will inevitably occur. In our opinion, the primary challenge for any
investor is development of a long-term investment program which makes one
comfortable regardless of what short-term direction markets take. This long-term
approach is particularly appropriate since the variable products involve fees
and charges which are described in the prospectus.
I have included a discussion on the U.S. Economy, U.S. Equity Market, U.S. Bond
Market and International Economies and Markets on pages 3 and 4.
/s/ Kurt R. Moser
- ------------------------
(1)The State Farm Variable Deferred Annuity product total returns reflect all
contract-level and underlying fund fees and expenses, including the imposition
of the maximum surrender charge of 7% where indicated. The fees and expenses are
based on an assumed average account size of $5,600. The total return period
begins on the Fund inception date (as noted) and ends on December 31, 1998.
These total returns apply only to the State Farm Life Insurance Company product
and not to the State Farm Life and Accident Assurance Company product. The State
Farm Life and Accident Assurance Company does not yet have sufficient
performance history to calculate total returns.
(2)The State Farm Variable Universal Life product total returns reflect all
contract-level and underlying fund fees and expenses, except for surrender
charges and the cost of insurance. If the cost of insurance were reflected, the
performance quoted would be significantly lower than shown. Please refer to the
hypothetical illustrations in the State Farm Variable Universal Life prospectus
to see how the cost of insurance can impact performance. We encourage you to
obtain a personalized illustration of historical performance that reflects the
cost of insurance. The fees and expenses reflected in this calculation are based
on an assumed average account size of $2,500. The total return period begins on
the product effective registration date of February 11, 1998, and ends December
31, 1998. These total returns apply only to the State Farm Life Insurance
Company product and not to the State Farm Life and Accident Assurance Company
product. The State Farm Life and Accident Assurance Company does not yet have
sufficient performance history to calculate total returns.
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2
<PAGE>
THE U.S. ECONOMY
The U.S. economy remains remarkably robust thanks to strength in consumer
spending. The strong showing in the consumer sector has been able to offset
weakness on the manufacturing side where weak export demand and intense overseas
competition have been taking their toll. Our country is in its eighth
consecutive year of generally good economic times. Consumers continue to be
willing to spend money for goods and services as they are encouraged by high
levels of employment and growth in personal income. Low levels of inflation and
interest rates have combined with good investment returns to further bolster
consumer confidence.
Growth in U.S. real gross domestic product for 1998 was 3.9%. For the fourth
quarter of 1998, growth of the real gross domestic product was a surprisingly
strong 5.6%. The recent report on fourth quarter economic activity even showed
some improvement in two of the economy's weak spots-- manufacturing and exports.
However, one probably should not be too eager to proclaim these weak sectors as
being healthy again. It is fairly apparent that approximately 40% of the world
economy is either stagnant or in recession, concentrated primarily in Japan and
the emerging countries. A major worry for the domestic economy is the
possibility that this global weakness will spread to the United States in
significant ways.
ECONOMIC GROWTH AND INFLATION
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ECONOMIC GROWTH INFLATION
<S> <C> <C>
1988 3.8% 4.4%
1989 3.4% 4.6%
1990 1.3% 6.1%
1991 -1.0% 3.1%
1992 2.7% 2.9%
1993 2.3% 2.7%
1994 3.5% 2.7%
1995 2.0% 2.5%
1996 2.8% 3.3%
1997 3.8% 1.7%
1998 3.9% 1.6%
</TABLE>
Economic growth is represented by the percentage change in Real Gross Domestic
product. Percentage change in the Consumer Price Index-Urban is used for
inflation.
THE U.S. EQUITY MARKET
The U.S. stock market in 1998 overcame a decline of approximately 20% in late
summer and early fall and posted excellent returns for the fourth consecutive
year. The S&P 500 Index produced a 28.6% total return for the year. This
four-year streak of returns in excess of 20% for the S&P 500 Index is
unprecedented in U.S. stock market history. Realistically, returns of this
magnitude are not sustainable for long periods of time.
During 1998 and over the four-year period from 1995-98, returns of the S&P 500
have been generated by an increasingly narrow group of stocks. Throughout the
four-year period from 1995-98, more than 50% of the total return of the S&P 500
Index was produced by only 20 stocks. In 1998, about 50% of the total return of
the S&P 500 Index was provided by only ten stocks. Furthermore, the 150 largest
stocks in the S&P 500 increased an average of 28.5% in 1998 compared to a 4.9%
gain for the 350 smaller stocks which are contained in the Index.
The differences between returns of small and large company common stocks was
also obvious in the performance of the Russell 2000 Index, which is made up of
stocks of smaller companies. The Russell 2000 experienced a 2.6% decline in
1998.
3 -------
<PAGE>
THE U.S. BOND MARKET
Investors in good quality bonds also enjoyed a fine year in 1998. Prices of high
quality bonds rose while interest rates trended downward significantly.
Interestingly, the magnitude of interest rate declines was much less for bonds
with lower credit ratings. In fact, contrary to the general falling trend in
interest rates, yields have actually risen on bonds carrying ratings below
investment grade. These movements display investors' preferences for higher
quality assets during times when financial markets across the globe are volatile
and the future seems more uncertain.
The Lehman Brothers Government/Corporate Intermediate Term Index, which is
considered representative of the market for high-quality intermediate-term
bonds, produced a total return of 8.4% in 1998.
Central banks across the developed world eased monetary policy in the second
half of the year in response to evidence that their economies were slowing. The
United States Federal Reserve Board was very prominent in this activity. Its
Open Market Committee cut short-term interest rates by a total of 75 basis
points through three 25 basis point moves within a seven-week period beginning
in late September. Current low levels of inflation give the Federal Reserve
flexibility to do whatever it deems necessary in an attempt to keep our economy
growing. While long-term market interest rates have followed the direction of
short-term yields in 1998, that is not always the case. Market interest rates
are also influenced heavily by expectations for the economy, inflation and
international capital flows.
INTERNATIONAL ECONOMIES AND MARKETS
Virtually all international economies are currently exhibiting economic
conditions which are much weaker than we are experiencing in the United States.
Even Europe, which was more or less keeping pace with the United States earlier
in the year, now is starting to show signs of slower growth. The Asian turmoil
has subsided, but emerging economies in that region remain quite weak. China is
showing some economic strains, and Japan continues to muddle along with
unacceptable general economic results. Currency and economic problems are
surfacing in Brazil, and some evidence indicates that those difficulties may be
spreading to the rest of Latin America.
The EAFE-Registered Trademark- Free Index is a broad market index that
encompasses markets through the developed free world. The Index achieved an
18.3% return in U.S. dollar terms in 1998. Very strong returns in most European
markets, which account for 73% of the Index, overcame weakness in Asia and New
Zealand. The EAFE Index does not include stock markets of countries with
so-called emerging economies.
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4
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST UNDERLYING FUNDS
LARGE CAP EQUITY INDEX FUND
The Large Cap Equity Index Fund seeks to match the return of the S&P
500-Registered Trademark- Index(1), which tracks the common stock performance of
500 large companies in a broad range of industries. The Fund invests in each of
the stocks in the S&P 500-Registered Trademark- in the same
capitalization-weighted proportion that the stock has in the index. For the year
ended December 31, 1998, the Fund benefited from continued strength in the
equity market, with particularly strong performance from the large companies
that are included in the S&P 500 Index.
See the previous section on the U.S. Economy and U.S. Equity Market. Financial
Highlights on page 57.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
FOR THE PERIOD ENDED DECEMBER 31, 1998
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LARGE CAP EQUITY INDEX
FUND S&P 500 INDEX*
<S> <C> <C> <C>
01/22/98 $10,000.00 $10,000.00
12/31/98 $12,926.40 $12,948.99
Fund's total return since
inception 29.26%
</TABLE>
*The S&P 500 Index tracks the common stock performance of large U.S. companies
in the manufacturing, utilities, transportation, and financial industries. It
also tracks the performance of common stocks issued by foreign and smaller U.S.
companies in similar industries. In total, the S&P 500 is comprised of 500
common stocks. Unlike an investment in the Large Cap Equity Index Fund, a
theoretical investment in the Index does not reflect any expenses.
SMALL CAP EQUITY INDEX FUND
The Small Cap Equity Index Fund seeks to match the return of the Russell
2000-Registered Trademark- Index(2), which includes 2000 companies with average
market capitalization of $570 million. This index was created by the Frank
Russell Trust Company to give investors an idea of how the stocks of the smaller
companies are performing. The Small Cap Equity Index Fund invests in a
diversified portfolio of common stocks intended to reflect, as a group, the
total investment return of the Russell 2000-Registered Trademark- Index. Returns
will sometimes vary from the return of the Index because the Fund invests in a
representative sample of the 2000 stocks in the Index, but not in every stock
included in the Index.
See the previous section on the U.S. Economy and U.S. Equity Market. Financial
Highlights on page 58.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
FOR THE PERIOD ENDED DECEMBER 31, 1998
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
SMALL CAP EQUITY INDEX
FUND RUSSELL 2000 INDEX*
<S> <C> <C> <C>
1/29/98 $10,000.00 $10,000.00
12/31/98 $9,810.59 $9,857.48
Fund's total return since
inception -1.89%
</TABLE>
*The Russell 2000 Index tracks the common stock performance of the 2,000
smallest U.S. companies in the Russell 3000 Index, which represents
approximately 10% of the total capitalization of the Russell 3000 Index. Unlike
an investment in the Small Cap Equity Index Fund, a theoretical investment in
the Index does not reflect any expenses.
- ------------------------
Past performance is not predictive of future performance. Investment return and
principal value will fluctuate so that your shares, when redeemed, may be worth
more or less than their original cost.
(1) "Standard & Poor's-Registered Trademark-", "S&P-Registered Trademark-", "S&P
500-Registered Trademark-", "Standard & Poor's 500" and "500" are trademarks
of The McGraw-Hill Companies, Inc. and have been licensed for use by the
Trust. Neither the Large Cap Equity Index Fund nor the Stock and Bond
Balanced Fund (the "Funds") is sponsored, endorsed, sold or promoted by
Standard & Poor's, and Standard & Poor's makes no representation regarding
the advisability of investing in the Funds. (For more information regarding
the S&P 500 Index, see the SAI.)
(2) The Russell 2000-Registered Trademark- Index is a trademark/service mark of
the Frank Russell Company. Russell-TM- is a trademark of the Frank Russell
Company. The Small Cap Equity Index Fund (the "Fund") is not sponsored,
endorsed, sold or promoted by the Frank Russell Company, and the Frank
Russell Company makes no representation regarding the advisability of
investing in the Fund. (For more information regarding the Russell 2000
Index, see the SAI.)
5 -------
<PAGE>
INTERNATIONAL EQUITY INDEX FUND
The benchmark index used by the International Equity Index Fund is the Morgan
Stanley EAFE-Registered Trademark- Free Index(3), which measures the performance
of stock markets in 15 European nations, Australia, New Zealand, and the three
largest markets in Asia. The Index includes equity securities of approximately
1,100 companies in these countries. As of December 31, 1998, the countries with
the highest weights were the United Kingdom, which accounted for 21.3% of the
Index, Japan at 21.0%, and Germany, which represented 10.7%.
See the previous section on International Economies and Markets. Financial
Highlights on page 59.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
FOR THE PERIOD ENDED DECEMBER 31, 1998
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY INDEX
FUND EAFE FREE INDEX*
<S> <C> <C> <C>
1/22/98 $10,000.00 $10,000.00
12/31/98 $11,789.82 $11,760.00
Fund's total return since
inception 17.90%
</TABLE>
*The Morgan Stanley Capital International Europe, Australia and Far East Free
(EAFE Free) Index currently measures the performance of stock markets of Europe,
Australia, New Zealand, and the Far East and takes into account local market
restrictions on share ownership by foreigners. EAFE Free is meant to reflect
actual opportunities for foreign investors in a local market. Unlike an
investment in the International Equity Index Fund, a theoretical investment in
the Index does not reflect any expenses.
BOND FUND
The Bond Fund seeks to realize over a period of years the highest yield
consistent with prudent investment management through current income and capital
gains. For different time periods, total return may vary considerably depending
on interest rate trends, since bond prices and interest rates move in opposite
directions. However, investors should bear in mind that the income from the Bond
Fund is quite stable.
See the previous section on the U.S. Bond Market. Financial Highlights on page
61.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
FOR THE PERIOD ENDED DECEMBER 31, 1998
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LEHMAN BROTHERS GOVT/CORP INTERMEDIATE
BOND FUND INDEX*
<S> <C> <C> <C>
01/22/98 $10,000.00 $10,000.00
12/31/98 $10,648.97 $10,714.00
Fund's total return since
inception 6.49%
</TABLE>
*The Lehman Brothers Government/Corporate Intermediate Index contains
approximately 4,700 U.S. Government and corporate bonds with maturities ranging
from one to ten years and an outstanding par value of at least $100 million.
The Lehman Brothers Government/Corporate Intermediate Index represents an
unmanaged group of bonds that differ from the composition of the Bond Fund.
Unlike an investment in the Bond Fund, a theoretical investment in the Index
does not reflect any expenses.
- ------------------------
Past performance is not predictive of future performance. Investment return and
principal value will fluctuate so that your shares, when redeemed, may be worth
more or less than their original cost.
(3) The Morgan Stanley Capital International Europe, Australia and Far East Free
(EAFE-Registered Trademark- Free) Index is the exclusive property of Morgan
Stanley & Co. Incorporated ("Morgan Stanley"). Morgan Stanley Capital
International is a service mark of Morgan Stanley and has been licensed for
use by the Trust. The International Equity Index Fund (the "Fund") is not
sponsored, endorsed, sold or promoted by Morgan Stanley and Morgan Stanley
makes no representation regarding the advisability of investing in the Fund.
(For more information regarding the Morgan Stanley Capital International
EAFE Free Index, see the SAI.)
- ---------
6
<PAGE>
STOCK AND BOND BALANCED FUND
The Stock and Bond Balanced Fund seeks long-term growth of capital, balanced
with current income by investing primarily in shares of the Large Cap Equity
Index Fund and the Bond Fund. The Balanced Fund usually invests approximately
60% of its net assets in the Large Cap Equity Index Fund and 40% in the Bond
Fund.
At December 31, 1998, 62% of the Stock and Bond Balanced Fund's assets were
invested in the Large Cap Equity Index Fund and 38% in the Bond Fund, in line
with the Fund's stated objectives.
See the previous section on the U.S. Economy, U.S. Equity Market, and the U.S.
Bond Market. Financial Highlights on page 60.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
FOR THE PERIOD ENDED DECEMBER 31, 1998
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
STOCK AND S&P 500 LEHMAN BROTHERS GOVT/
BOND BALANCED FUND INDEX* CORP INTERMEDIATE INDEX*
<S> <C> <C> <C> <C>
01/29/98 $10,000.00 $10,000.00 $10,000.00
12/31/98 $11,465.60 $13,050.59 $10,717.70
Fund's total return since inception 14.66%
</TABLE>
*See footnotes to the Large Cap Fund and the Bond Fund graphs on pages 5 and 6
for a description of the indices.
MONEY MARKET FUND
The Money Market Fund seeks to maximize current income to the extent consistent
with the preservation of capital and maintenance of liquidity. The Fund pursues
this objective by investing in high quality commercial paper and other
short-term debt securities. An investment in the Money Market Fund is not
insured or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although the Fund seeks to preserve the value of your
investment at $1.00 per share, it is possible to lose money by investing in the
Fund.
Financial Highlights on page 62.
- ------------------------
Past performance is not predictive of future performance. Investment return and
principal value will fluctuate so that your shares, when redeemed, may be worth
more or less than their original cost.
7 -------
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST LARGE CAP EQUITY INDEX FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- -----------
<C> <S> <C>
COMMON STOCKS (77.4%)
AEROSPACE/DEFENSE (.5%)
4,151 Boeing Co. $ 135,427
527 General Dynamics Corp. 30,895
803 Lockheed Martin Corp. 68,054
263 Northrop Grumman Corp. 19,232
-----------
253,608
-----------
AGRICULTURE, FOODS, & BEVERAGE (4.4%)
149 Adolph Coors Co. Class B 8,409
2,004 Anheuser Busch Cos. Inc. 131,514
2,508 Archer-Daniels-Midland Company 43,106
1,204 Bestfoods 64,113
258 Brown Forman Corp. Class B 19,527
1,864 Campbell Soup Company 102,520
1,607 Coca-Cola Enterprises Inc. 57,450
2,028 ConAgra Inc. 63,882
651 Fred Meyer (a) 39,223
656 General Mills Inc. 51,004
625 Hershey Foods Corp. 38,867
1,468 HJ Heinz Co. 83,126
1,646 Kellogg Company 56,170
6,109 Pepsico Inc. 250,087
963 Pioneer Hi-Bred International 26,001
567 Quaker Oats Co. 33,736
1,314 Ralston Purina Co. 42,541
1,330 RJR Nabisco Holdings 39,484
3,848 Sara Lee Corp. 108,466
1,637 Seagram Ltd. 62,206
540 Supervalu Inc. 15,120
1,374 Sysco Corp. 37,699
10,215 The Coca-Cola Company 683,128
2,664 Unilever NV 220,946
1 Vlasic Foods International Inc. (a) 24
507 William Wrigley Jr. Co. 45,408
-----------
2,323,757
-----------
AIRLINES (.3%)
739 AMR Corp. (a) 43,878
596 Delta Air Lines Inc. 30,992
1,356 Laidlaw, Inc. 13,645
1,408 Southwest Airlines Co. 31,592
407 US Airways Group Inc. (a) 21,164
-----------
141,271
-----------
AUTOMOTIVE (1.2%)
106 Aeroquip-Vickers Inc. 3,173
382 Cooper Tire & Rubber Co. 7,807
151 Cummins Engine Inc. 5,360
1 Daimler Chrysler (a) 96
675 Dana Corp. 27,591
5,062 Ford Motor Co. 297,076
<CAPTION>
SHARES VALUE
- ----------- -----------
<C> <S> <C>
2,723 General Motors Corp. $ 194,865
722 Genuine Parts Co. 24,142
652 Goodyear Tire & Rubber Co. 32,885
385 ITT Industries Inc. 15,304
225 Navistar International Corp. (a) 6,412
285 Paccar Inc. 11,721
197 Snap On Inc. 6,858
511 TRW Inc. 28,712
-----------
662,002
-----------
BANKS (5.2%)
1,260 Bank of Boston Corp. 49,061
3,154 Bank of New York Inc. 126,948
4,837 Bank One Corporation 246,989
7,123 BankAmerica Corp. 428,270
421 Bankers Trust NY Corp. 35,969
1,186 BB&T Corp. 47,811
3,534 Chase Manhattan Corp. 240,533
665 Comerica Inc. 45,345
1,137 Fifth Third Bancorp 81,082
4,138 First UN Corp. 251,642
2,406 Fleet Financial Group Inc. 107,518
218 Golden West Financial 19,988
846 Hunting Bancshares Inc. 25,433
720 JP Morgan & Co. Inc. 75,645
1,928 Keycorp 61,696
1,116 Mellon Bank Corp. 76,725
487 Northern Trust Co. 42,521
1,284 PNC Bank Corp. 69,497
468 Republic NY Corp. 21,323
661 State Street Corp. 45,981
716 Summit Bancorp 31,280
836 Suntrust Banks Inc. 63,954
1,110 Synovus Financial Corp. 27,056
843 Wachovia Corporation 73,710
2,480 Washington Mutual Inc. 94,705
6,679 Wells Fargo 266,743
2,970 US Bancorp 105,435
-----------
2,762,860
-----------
BUILDING MATERIALS & CONSTRUCTION (.2%)
156 Armstrong World Industries 9,409
395 Black & Decker Corp. 22,145
193 Centex Corp. 8,697
147 Fleetwood Enterprises Inc. 5,108
128 Kaufman & Broad Home Corp. 3,680
1,390 Masco Corp. 39,962
182 Owens Corning 6,450
134 Pulte Corp. 3,727
328 Stanley Works 9,102
-----------
108,280
-----------
</TABLE>
- ---------
8
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST LARGE CAP EQUITY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- -----------
<C> <S> <C>
CHEMICALS (1.4%)
913 Air Products & Chemicals Inc. $ 36,520
263 BF Goodrich Co. 9,435
913 Dow Chemical 83,026
357 Eastman Chemical Co. 15,976
533 Ecolab Inc. 19,288
4,700 EI du Pont de Nemours & Co. 249,394
589 Engelhard Corp. 11,485
108 FMC Corp. (a) 6,048
195 Great Lakes Chemical Corp. 7,800
443 Hercules Inc. 12,127
468 Int'l Flavors & Fragrances 20,680
2,619 Monsanto Co. 124,402
466 Morton International Inc. 11,417
258 Nalco Chemical Co. 7,998
721 PPG Industries Inc. 41,998
655 Praxair Inc. 23,089
716 Rohm & Haas Co. 21,570
450 Sigma-Aldrich Corporation 13,219
561 Union Carbide Corp. 23,842
348 WR Grace (a) 5,459
-----------
744,773
-----------
COMMERCIAL SERVICE/SUPPLY (1.3%)
3,535 Cendant Corp. (a) 67,386
362 Deluxe Corp. 13,236
705 Dun & Bradstreet 22,252
1,349 Eastman Kodak Co. 97,128
632 FDX Corp. (a) 56,248
373 H&R Block Inc. 16,785
602 Interpublic Group Cos. Inc. 48,009
427 Moore Ltd. 4,697
1,164 Pitney Bowes Inc. 76,897
165 Polaroid Corp. 3,083
616 RR Donnelley & Sons Inc. 26,988
1,113 Service Corp. International 42,364
1,300 Staples Inc. (a) 56,794
1,351 Xerox Corporation 159,418
-----------
691,285
-----------
COMPUTER SOFTWARE AND SERVICES (4.2%)
241 Adobe Systems Inc. 11,267
172 Autodesk Inc. 7,342
1,244 Automatic Data Processing Inc. 99,753
278 Ceridian Corp. (a) 19,408
2,187 Computer Associates Intl. Inc. 93,221
675 Computer Sciences Corp. (a) 43,495
2,031 Electronic Data Systems Corp. 102,058
1,880 First Data Corp. 59,573
656 Gateway 2000 Inc. (a) 33,579
1,924 HBO & Co. 55,195
10,324 Microsoft Corporation (a) 1,431,810
1,423 Novell Inc. (a) 25,792
4,048 Oracle Corp. (a) 174,570
<CAPTION>
SHARES VALUE
- ----------- -----------
<C> <S> <C>
1,143 Parametric Technology Corp. (a) $ 18,717
900 PeopleSoft Inc. 17,044
75 Shared Medical Systems Corp. 3,741
1,099 Unisys Corp. (a) 37,847
-----------
2,234,412
-----------
COMPUTERS (4.2%)
1,486 3Com Corp. (a) 66,591
74 America Online (a) 10,711
599 Apple Computer Inc. (a) 24,522
862 Ascend Communications (a) 56,676
691 Cabletron Systems Inc. (a) 5,787
7,063 Compaq Computer Corp. 296,205
196 Data General Corp. (a) 3,222
5,268 Dell Computer Corp. (a) 385,552
2,066 EMC Corp. (a) 175,610
4,288 Hewlett-Packard Company 292,924
575 Ikon Office Solutions 4,923
3,883 Int'l Business Machines Corp. 717,384
1,063 Seagate Technology (a) 32,156
749 Silicon Graphics Inc. (a) 9,643
1,553 Sun Microsystems Inc. (a) 132,976
-----------
2,214,882
-----------
CONSUMER & MARKETING (2.9%)
187 Alberto-Culver Company 4,991
272 American Greetings Corp. Class A 11,169
1,108 Avon Products Inc. 49,029
449 Brunswick Corp. 11,113
448 Clorox Co. 52,332
1,226 Colgate Palmolive Co. 113,865
581 Darden Restaurants Inc. 10,458
867 Fort James Corp. 34,680
553 Hasbro Inc. 19,977
128 Jostens Inc. 3,352
2,233 Kimberly Clark Corp. 121,698
1,216 Mattel Inc. 27,740
410 Maytag Corp. 25,522
2,839 McDonald's Corporation 217,538
683 Newell Co. 28,174
5,533 Procter & Gamble Co. 505,232
649 Rubbermaid Incorporated 20,403
4,638 The Gillette Company 224,073
653 Tricon Global Restaurants (a) 32,732
197 Tupperware Corp. 3,238
539 Wendys International Inc. 11,757
280 Whirlpool Corp. 15,505
-----------
1,544,578
-----------
CONSUMER DISCRETIONARY (.0%)
521 Danaher Corp. 28,297
-----------
CONTAINERS & PACKAGING (.1%)
110 Ball Corp. 5,032
</TABLE>
9 -------
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST LARGE CAP EQUITY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- -----------
<C> <S> <C>
181 Bemis Inc. $ 6,867
521 Crown Cork & Seal Inc. 16,053
646 Owens-Illinois Inc. (a) 19,784
169 Sealed Air Corporation (a) 8,630
224 Sealed Air Corporation Conv. Pref. (a) 11,438
188 Temple Inland Inc. 11,151
-----------
78,955
-----------
DURABLE PRODUCTS (.0%)
130 Milacron Inc. 2,502
-----------
ELECTRONIC/ELECTRICAL MFG. (5.4%)
633 Advanced Micro Devices Inc. (a) 18,317
874 AMP Inc. 45,503
1,503 Applied Materials Inc. (a) 64,159
165 EG&G Inc. 4,589
178 Elmer Perkin Corp. 17,366
1,861 Emerson Electric Co. 116,429
13,560 General Electric Company 1,383,968
552 Honeywell Inc. 41,573
6,842 Intel Corporation 811,205
319 KLA-Tencor Corp. (a) 13,837
583 LSI Logic Corp. (a) 9,401
857 Micron Technology Inc. (a) 43,332
701 National Semiconductor Corp. (a) 9,463
297 Raychem Corporation 9,597
1,377 Raytheon Co. 73,325
792 Rockwell International Corp. 38,461
176 Tektronix Inc. 5,291
1,599 Texas Instruments Inc. 136,814
195 Thomas & Betts Corp. 8,446
448 WW Grainger Inc. 18,648
-----------
2,869,724
-----------
ENGINEERING & CONSTRUCTION (.0%)
367 Fluor Corp. 15,620
131 Foster Wheeler Corp. 1,728
187 McDermott International Inc. 4,617
-----------
21,965
-----------
ENVIRONMENTAL CONTROLS (.2%)
695 Browning Ferris Industrials 19,764
2,403 Waste Management Inc. 112,040
-----------
131,804
-----------
FINANCIAL SERVICES (4.4%)
1,903 American Express Company 194,582
1,077 American General Corporation 84,006
2,898 Associates First Capital 122,803
496 Bear Stearns Companies Inc. 18,538
261 Capital One Financial Corp. 30,015
1,710 Charles Schwab Corp. 96,081
9,467 Citigroup 468,616
<CAPTION>
SHARES VALUE
- ----------- -----------
<C> <S> <C>
481 Countrywide Credit Inds. Inc. $ 24,140
625 Equifax Inc. 21,367
2,783 Federal Home Loan Mortgage 179,330
4,286 Federal National Mtg. Assn. 317,164
1,092 Franklin Resources Inc. 34,944
2,043 Household International Inc. 80,954
504 Lehman Brothers Holding Inc. 22,207
449 MBIA Inc. 29,438
3,151 MBNA Corporation 78,578
640 Mercantile Bancorporation 29,520
1,425 Merrill Lynch & Company Inc. 95,119
503 MGIC Investment Corp. 20,026
2,427 Morgan Stanley Dean Witter 172,317
1,351 National City Corp. 97,947
678 Paychex Inc. 34,875
946 Regions Financial Corp. 38,136
680 SLM Holding Corp. 32,640
531 Union Planters 24,061
-----------
2,347,404
-----------
FOREST PRODUCTS (.4%)
187 Boise Cascade Corp. 5,797
417 Champion International Corp. 16,888
403 Georgia Pacific Corp. 23,601
1,304 International Paper Co. 58,436
494 Louisiana Pacific Corp. 9,046
459 Mead Corporation 13,454
108 Potlatch Corp. 3,982
264 Union Camp Corp. 17,820
454 Westvaco Corp. 12,173
814 Weyerhaeuser Co. 41,361
497 Willamette Industries Inc. 16,649
-----------
219,207
-----------
HEALTH CARE (9.2%)
6,248 Abbott Laboratories 306,152
240 Allergan Inc. 15,540
400 Alza Corporation (a) 20,900
5,441 American Home Products Corp. 306,396
195 Baush & Lomb Inc. 11,700
1,194 Baxter International Inc. 76,789
1,068 Becton Dickinson & Co. 45,590
498 Biomet Inc. 20,044
1,608 Boston Scientific Corp. (a) 43,115
4,121 Bristol-Myers Squibb 551,441
836 Cardinal Health Inc. 63,432
2,683 Columbia/HCA Healthcare Corp. 66,404
189 CR Bard Inc. 9,355
4,591 Eli Lilly & Co. 408,025
645 Guidant Corp. 71,111
483 Health Care & Retirement (a) 14,188
1,795 Healthsouth Corp. (a) 27,710
677 Humana Inc. (a) 12,059
5,566 Johnson & Johnson 466,848
</TABLE>
- ---------
10
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST LARGE CAP EQUITY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- -----------
<C> <S> <C>
271 Mallinckrodt Inc. $ 8,350
1,980 Medtronic Inc. 147,015
4,938 Merck & Co. Inc. 729,281
5,406 Pfizer Inc. 678,115
2,078 Pharmacia & Upjohn Inc. 117,667
6,054 Schering Plough Corp. 334,483
383 St. Jude Medical, Inc. (a) 10,604
1,285 Tenet Healthcare Corp. (a) 33,731
766 United Healthcare Corp. 32,986
3,402 Warner Lambert Co. 255,788
-----------
4,884,819
-----------
INSURANCE (2.6%)
587 Aetna Inc. 46,153
3,412 Allstate Corp. 131,789
4,382 American Int'l Group Inc. 423,411
700 Aon Corp. 38,763
680 Chubb Corp. 44,115
869 Cigna Corp. 67,185
1,311 Conseco Inc. 40,067
932 Hartford Financial Svcs. Group 51,144
470 Jefferson Pilot Corp. 35,250
454 Lincoln National Corp. 37,143
493 Loews Corp. 48,437
1,106 Marsh & McLennan Cos. Inc. 64,632
284 Progressive Corp. 48,103
595 Provident Companies Inc. 24,693
620 Providian Financial Corp. 46,500
522 Safeco Corp. 22,413
933 St. Paul Companies Inc. 32,422
940 Sunamerica Inc. 76,258
620 Torchmark Corp. 21,894
246 Transamerica Corp. 28,413
567 UNUM Corp. 33,099
-----------
1,361,884
-----------
LODGING & GAMING (.1%)
477 Harrahs Entertainment Inc. (a) 7,483
1,135 Hilton Hotels Corp. 21,707
1,000 Marriott International Class A 29,000
758 Mirage Resorts Inc. (a) 11,323
-----------
69,513
-----------
MACHINERY & MANUFACTURING (2.0%)
2,287 AlliedSignal Inc. 101,343
505 Avery Dennison Corp. 22,757
100 Briggs & Stratton Corp. 4,988
275 Case Corp. 5,998
1,494 Caterpillar Inc. 68,724
680 Cincinnati Financial Corp. 24,905
471 Cooper Industries Inc. 22,461
912 Corning Incorporated 41,040
225 Crane Co. 6,792
1,044 Deere & Co. 34,583
<CAPTION>
SHARES VALUE
- ----------- -----------
<C> <S> <C>
879 Dover Corp. $ 32,193
269 Eaton Corp. 19,015
299 Harnischfeger Inc. 3,046
1,058 Illinois Tool Works 61,364
671 Ingersoll Rand Co. 31,495
389 Johnson Controls Inc. 22,951
137 Millipore Corp. 3,896
1,696 Minnesota Mining & Mfg. 120,628
16 Nacco Industries Inc. 1,472
161 National Service Industries Inc. 6,118
529 Pall Corporation 13,390
498 Parker Hannifin Corp. 16,310
705 Tenneco Inc. 24,014
668 Textron Inc. 50,726
667 Thermo Electron Corp. (a) 11,297
201 Timken Co. 3,794
2,672 Tyco International Ltd. 201,569
925 United Technologies Corp. 100,594
-----------
1,057,463
-----------
MEDIA & BROADCASTING (2.6%)
2,906 CBS Corp. (a) 95,172
1,054 Clear Channel Communications (a) 57,443
1,522 Comcast Corp. Class A 89,322
442 Dow Jones & Co., Inc. 21,271
1,202 Gannett Inc. 79,557
271 King World Productions Inc. (a) 7,978
368 Knight Ridder Inc. 18,814
430 McGraw-Hill Companies Inc. 43,806
181 Meredith Corp. 6,855
784 New York Times Co. 27,195
1,187 Nextel Communications (a) 28,043
682 Omnicom Group 39,556
2,263 Tele Communications Class A (a) 125,172
8,504 The Walt Disney Company 255,120
5,118 Time Warner Inc. 317,636
369 Times Mirror Co. 20,664
521 Tribune Co. 34,386
1,480 Viacom Inc. (a) 109,520
-----------
1,377,510
-----------
MINING & METALS (.5%)
889 Alcan Aluminium Ltd. 24,059
797 Allegheny Teledyne 16,289
779 ALCOA Inc. 58,084
131 Asarco Inc. 1,973
1,519 Barrick Gold Corp. 29,621
1,009 Battle Mountain Gold Co. 4,162
550 Bethlehem Steel Corp. (a) 4,606
437 Cyprus Amax Minerals Co. 4,370
761 Freeport-McMoRan Copper & Gold Inc. (a) 7,943
843 Homestake Mining Co. 7,745
709 Inco Limited 7,489
713 Newmont Mining Corp. 12,879
</TABLE>
11-------
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST LARGE CAP EQUITY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- -----------
<C> <S> <C>
326 Nucor Corporation $ 14,100
212 Phelps Dodge Corp. 10,786
1,103 Placer Dome Inc. 12,685
268 Reynolds Metals Co. 14,120
422 USX US Steel 9,706
418 Worthington Industries Inc. 5,225
-----------
245,842
-----------
OIL, GAS, & OTHER ENERGY (5.2%)
413 Amerada Hess Corporation 20,547
3,358 Amoco Corp. 202,739
515 Anadarko Petroleum Corp. 15,901
456 Apache Corp. 11,542
280 Ashland Inc. 13,545
1,341 Atlantic Richfield Inc. 87,500
1,308 Baker Hughes Inc. 23,135
718 Burlington Resources Inc. 25,713
2,722 Chevron Corporation 225,756
849 Coastal Corp. 29,662
379 Columbia Energy Group 21,887
416 Consolidated Natural Gas 22,464
91 Eastern Enterprises 3,981
1,360 Enron Corp. 77,605
10,084 Exxon Corporation 737,393
1,833 Halliburton Co. 54,303
200 Helmerich & Payne Inc. 3,875
170 Kerr McGee Corp. 6,503
3,257 Mobil Corp. 283,766
172 Nicor Inc. 7,267
1,462 Occidental Pete Corp. 24,671
87 Oneok Inc. 3,143
461 Oryx Energy Company (a) 6,195
6 Pennzenergy 98
6 Pennzoil-Quaker State Co. (a) 89
120 Peoples Energy Corp. 4,785
1,108 Pete Phillips Co. 47,229
398 Rowan Companies Inc. (a) 3,980
8,873 Royal Dutch Petroleum Company 424,795
2,218 Schlumberger Ltd. 102,305
972 Sempra Energy 24,665
468 Sonat Inc. 12,665
442 Sunoco Inc. 15,940
2,195 Texaco Inc. 116,061
1,082 Union Pacific Resources Group Inc. 9,806
1,027 Unocal Corp. 29,976
1,311 USX Marathon Group 39,494
1,789 Williams Companies Inc. 55,794
-----------
2,796,775
-----------
PHARMACEUTICALS (.3%)
1,081 Amgen Inc. (a) 113,032
689 IMS Health Inc. 51,976
-----------
165,008
-----------
<CAPTION>
SHARES VALUE
- ----------- -----------
<C> <S> <C>
RETAILERS (5.2%)
1,050 Albertsons Inc. $ 66,872
1,180 American Stores Co. 43,586
637 Autozone Inc. (a) 20,981
2,275 Carnival Corp. 109,200
372 Circuit City Stores-Carmax 18,577
464 Consolidated Stores (a) 9,367
869 Costco Companies Inc. (a) 62,731
1,582 CVS Corp. 87,010
1,847 Dayton Hudson Corp. 100,200
471 Dillards Inc. 13,365
762 Dollar General Corp. 18,002
844 Federated Department Stores (a) 36,767
2,412 GAP Inc. 135,675
126 Great Atlantic & Pacific 3,733
261 Harcourt General Inc. 13,882
6,517 Home Depot Inc. 398,759
1,090 JC Penney Inc. 51,094
2,024 K-Mart Corp. (a) 30,993
653 Kohls Corporation (a) 40,119
1,100 Kroger Co. (a) 66,550
903 Limited Inc. 26,300
127 Longs Drug Stores Inc. 4,763
1,428 Lowes Companies Inc. 73,096
932 May Department Stores Co. 56,270
633 Nordstrom Inc. 21,957
227 Pep Boys Manny Moe & Jack 3,561
1,033 Rite Aid Corp. 51,198
2,009 Safeway Inc. (a) 122,423
1,583 Sears Roebuck & Co. 67,278
710 Sherwin Williams Co. 20,856
456 Tandy Corp. 18,782
1,302 TJX Companies Inc. 37,758
1,160 Toys R Us Inc. (a) 19,575
570 Venator Group Inc. (a) 3,669
9,303 Wal-Mart Stores Inc. 757,613
2,043 Walgreen Co. 119,643
637 Winn Dixie Stores Inc. 28,585
-----------
2,760,790
-----------
TECHNOLOGY (.2%)
837 BMC Software (a) 37,299
483 Solectron Corp. (a) 44,889
-----------
82,188
-----------
TELECOM & TELECOM EQUIPMENT (9.7%)
2,410 Airtouch Communications Inc. (a) 173,821
1,157 Alltel Corporation 69,203
4,576 Ameritech Corp. 290,004
405 Andrew Corp. (a) 6,683
7,482 AT&T Corp. 563,021
6,457 Bell Atlantic Corp. 366,838
8,172 Bellsouth Corp. 407,579
6,507 Cisco Systems Inc. (a) 603,931
</TABLE>
- ---------
12
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST LARGE CAP EQUITY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- -----------
<C> <S> <C>
703 Frontier Corp. $ 23,902
645 General Instrument Corp. (a) 21,890
4,017 GTE Corp. 270,896
359 Harris Corp. 13,148
5,444 Lucent Technologies Inc. 598,840
7,551 MCI Worldcom Inc. (a) 541,784
2,537 MediaOne Group (a) 119,239
2,527 Motorola Inc. 154,305
2,697 Northern Telecom Ltd. 135,187
8,095 SBC Communications 434,094
283 Scientific Atlanta Inc. 6,456
1,815 Sprint Corp. 152,687
1,779 Sprint Corp. PCS (a) 41,139
770 Tellabs Inc. (a) 52,793
2,053 US West Inc. 132,675
-----------
5,180,115
-----------
TEXTILES & CLOTHING (.2%)
271 Fruit of the Loom Inc. (a) 3,743
258 Liz Claiborne Inc. 8,143
1,190 Nike Inc. 48,269
187 Reebok International Ltd. (a) 2,782
148 Russell Corp. 3,006
90 Springs Industries Inc. Class A 3,729
509 VF Corp. 23,859
-----------
93,531
-----------
TOBACCO (1.1%)
733 Fortune Brands Inc. 23,181
10,052 Philip Morris Companies Inc. 537,782
743 UST Inc. 25,912
-----------
586,875
-----------
TRANSPORTATION (.4%)
1,981 Burlington North Santa Fe 66,859
876 CSX Corp. 36,354
491 New Century 23,936
1,553 Norfolk Southern Corp. 49,211
278 Ryder Systems Inc. 7,228
1,071 Union Pacific Corp. 48,262
-----------
231,850
-----------
UTILITIES & ENERGY (1.8%)
564 Ameren Corporation 24,076
794 American Electric Power Co. 37,368
645 Baltimore Gas & Elec. Co. 19,914
640 Carolina Power & Light Co. 30,120
834 Central & Southwest Corp. 22,883
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE
- ----------- -----------
<C> <S> <C>
665 Cinergy Corp. $ 22,859
934 Consolidated Edison Inc. 49,385
818 Dominion Resources Inc. 38,242
615 DTE Energy Co. 26,368
1,494 Duke Energy Corp. 95,709
1,462 Edison International 40,753
1,047 Entergy Corp. 32,588
1,030 Firstenergy Corp. 33,539
728 FPL Group Inc. 44,863
541 GPU Inc. 23,905
1,220 Houston Industries Inc. 39,193
738 Niagara Mohawk Power Corp. (a) 11,900
648 Northern States Power Co. 17,982
1,252 Pacificorp 26,370
879 Peco Energy Co. 36,588
1,560 PG&E Corp. 49,140
631 PP&L Resources Inc. 17,589
918 Public Service Enterprise Group 36,720
2,868 Southern Co. 83,351
1,172 Texas Utilities Co. Holding Co. 54,718
708 The AES Corp. (a) 33,542
867 Unicom Corp. 33,434
-----------
983,099
-----------
TOTAL COMMON STOCKS
(cost $34,455,064) 41,258,828
SHORT-TERM INVESTMENTS (22.6%)
$12,070,000 U.S. Treasury Bills, 4.340% and 4.400%,
January, 1999 to February, 1999
(cost $12,021,166) 12,026,423
-----------
TOTAL INVESTMENTS (100.0%)
(cost $46,476,230) 53,285,251
CASH AND OTHER ASSETS,
LESS LIABILITIES (0.0%) 19,471
-----------
NET ASSETS (100.0%) $53,304,722
-----------
-----------
</TABLE>
Notes:
(a) Non-income producing security.
At December 31, 1998, net unrealized appreciation of $6,809,021 consisted of
gross unrealized appreciation of $7,618,309 and gross unrealized depreciation of
$809,288 based on cost of $46,476,230 for federal income tax purposes.
See accompanying notes to financial statements.
13-------
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST SMALL CAP EQUITY INDEX FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
COMMON STOCKS (95.8%)
COMMERCIAL SERVICE/SUPPLY (3.0%)
269 AHL Services Inc. (a) $ 8,406
189 Answerthink Consulting Group (a) 5,079
492 Boron Lepore & Associates Inc. (a) 16,974
1,787 Building One Services (a) 37,304
1,218 Centertrust Retail Properties Inc. 14,920
702 Choicepoint Inc. (a) 45,279
866 CMG Information Services Inc. (a) 92,229
674 Concentric Network Corp. (a) 22,410
299 Crescent Operating Inc. (a) 1,420
295 Diamond Tech Partners Inc. (a) 5,642
1,191 Dollar Thrifty Automotive (a) 15,334
666 Doubleclick Inc. (a) 30,345
243 Duff & Phelps Credit Rating Co. 13,319
479 DVI Inc. (a) 8,682
2,205 E Spire Communications Inc. (a) 14,057
1,317 Eastern Environmental Services (a) 39,016
160 Edutrek International Inc. (a) 920
354 Electric Lightwave Inc. (a) 2,898
646 Entertainment Properties Trust 10,982
1,700 Equity Inns Inc. 16,362
546 First Consulting Group Inc. (a) 11,193
513 FYI Inc. (a) 16,416
992 Gaylord Entertainment Class A 29,884
1,040 Getty Images Inc. (a) 17,875
346 Golf Trust of America Inc. 9,601
494 Hagler Bailly Inc. (a) 9,880
373 ITI Technologies Inc. (a) 11,563
1,083 Labor Ready Inc. (a) 21,322
554 Lasalle Hotel Properties 5,748
755 Lasalle Partners Inc. (a) 22,225
923 Laser Mortgage Management Inc. 5,019
524 Lason Holdings Inc. (a) 30,490
270 Leasing Solutions Inc. (a) 1,097
826 Lexington Corporate Properties 10,377
340 Maximus Inc. (a) 12,580
1,208 Metal Management Inc. (a) 4,228
1,328 Metrocall Inc. (a) 5,810
1,200 Metromedia Fiber Network (a) 40,200
248 MGC Communications Inc. (a) 1,736
761 Midas Group Inc. 23,686
1,579 National Data Corp. 76,878
515 National RV Holdings Inc. (a) 13,261
1,270 Novacare Employee Services (a) 6,826
3,121 Olsten Corp. 23,017
290 Omni America Inc. (a) 9,280
517 Pan Pacific Retail Properties 10,308
464 Parkway Properties Inc. 14,500
355 Pegasus Communication Corp. (a) 8,897
787 Petersen Companies Inc. Class A (a) 26,660
328 Pierce Leahy Corp. (a) 8,364
912 PLD Telekom Inc. (a) 1,653
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
494 Probusiness Services Inc. (a) $ 22,477
927 Protection One Inc. (a) 7,937
1,124 PS Business Packages Inc. 26,835
355 Remedytemp Inc. (a) 5,369
1,394 Safety-Kleen Corp. (a) 19,690
522 Schawk Inc. 7,243
1,918 Security Capital Group (a) 26,013
3,106 Sensormatic Electronics Corp. (a) 21,548
1,093 SL Green Realty Corp. 23,636
399 SOS Staffing Services Inc. (a) 2,893
762 Tower Realty Trust Inc. 15,335
2,135 Unicapital Corp. (a) 15,746
659 United Payors & United Providers Inc. (a) 18,781
588 URS Corp. (a) 13,744
571 US Restaurants Properties 13,882
1,697 Valassis Communications Inc. (a) 87,608
193 Waste Industries Inc. (a) 3,329
4,610 Wastemasters Inc. (a) 1,441
219 Western Staff Services Inc. (a) 1,369
-----------
1,227,028
-----------
CONSUMER & MARKETING (.4%)
1,100 Arvin Industries Inc. 45,856
1,700 Jostens Inc. 44,519
300 Kenneth Cole Production Association (a) 5,625
2,162 Meristar Hospitality 40,132
164 Mine Safety Appliances Company 11,644
300 Syms Corp. (a) 2,700
500 Talbots Inc. 15,687
-----------
166,163
-----------
CONSUMER DISCRETIONARY (16.9%)
196 800-JR Cigar Inc. (a) 4,557
400 Abacus Direct Corp. (a) 18,200
800 ABM Industries Inc. 27,700
2,000 Acclaim Entertainment Inc. (a) 24,500
794 Ackerley Group Inc. 14,490
700 Action Performance Co. Inc. (a) 24,762
852 Adelphia Communications Corp. (a) 38,979
300 Administaff Inc. (a) 7,500
1,600 Adolph Coors Co. Class B 90,300
1,000 Advo Inc. (a) 26,375
450 Agribrands International (a) 13,500
700 Alternative Resources Corp. (a) 7,437
242 Ambassadors International Inc. (a) 3,569
300 AMC Entertainment Inc. (a) 6,319
400 Amerco Inc. (a) 11,175
264 American Classic Voyages Co. (a) 4,653
634 American Eagle Outfitters (a) 42,240
1,911 American Media Inc. (a) 10,630
2,000 American Mgmt. Systems Inc. (a) 80,000
761 American Retirement Corp. (a) 11,938
672 American Skiing Corp. (a) 5,166
</TABLE>
- ---------
14
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST SMALL CAP EQUITY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
4,433 American Tower Corp. (a) $ 131,051
1,100 Ames Department Stores Inc. (a) 29,700
360 Anchor Gaming (a) 20,295
1,007 Ann Taylor Stores Corp. (a) 39,714
1,200 Apac Teleservices Inc. (a) 4,538
1,221 Applebees International Inc. 25,183
520 Applied Graphics Technologies (a) 8,580
8,646 Aqua Alliance (a) 17,832
700 Arron Rents Inc. 10,587
1,300 Ascent Entertainment Group (a) 9,587
356 At Entertainment Inc. (a) 2,403
900 Authentic Fitness Corp. 16,425
1,200 Avado Brands Inc. 9,975
400 Aviation Sales Co. (a) 16,250
2,100 Aztar Corp. (a) 10,631
200 Bacou USA Inc. (a) 4,300
1,400 Ball Corp. 64,050
1,114 Bally Total Fitness Holding Corp. (a) 27,711
657 Bandag Inc. 26,239
600 Bassett Furniture Industries 14,475
100 Berlitz International Inc. (a) 2,900
800 Big Flower Holdings Inc. (a) 17,650
345 Blair Corp. 7,655
1,900 Bob Evans Farms Inc. 49,519
590 Boise Cascade Office Prods. (a) 7,965
1,057 Borg Warner Automotive Inc. 58,994
600 Borg Warner Security Corp. (a) 11,250
1,700 Bowne & Co. Inc. 30,387
1,500 Boyd Gaming Corp. (a) 4,969
50 BRC Holdings Inc. (a) 937
2,400 Brightpoint Inc. (a) 33,000
800 Brown Group Inc. 14,050
300 Brylane Inc. (a) 6,975
300 Buckle Inc. (a) 7,200
1,234 Budget Group Inc. (a) 19,590
2,100 Buffets Inc. (a) 25,069
1,000 Burlington Coat Factory 16,312
500 Bush Industries Inc. 6,219
988 Caribiner International Inc. (a) 9,015
300 Carmike Cinemas Inc. (a) 6,094
415 Carriage Services Inc. (a) 11,802
258 Casella Waste Systems Inc. (a) 9,578
2,400 Caseys General Stores Inc. 31,275
1,200 Cash America Intl. Inc. 18,225
900 Catalina Marketing Corp. (a) 61,537
740 Cato Corp. 7,284
500 CDI Corp. (a) 10,094
544 CDNow Inc. (a) 9,792
825 CEC Entertainment (a) 22,894
1,400 Central Garden & Pet Co. (a) 20,125
493 Central Parking Corp. 15,992
514 Championship Auto Racing (a) 15,227
4,600 Charming Shoppes Inc. (a) 19,837
1,900 Checkfree Holdings Corp. (a) 44,412
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
800 Cheesecake Factory Inc. (a) $ 23,725
605 Childrens Place (a) 15,201
1,749 Chiquita Brands Intl. Inc. 16,725
1,716 Choice Hotels Intl. Inc. (a) 23,488
345 Churchill Downs Inc. 11,342
1,900 Claire's Stores Inc. 38,950
1,100 Clarcor Inc. 22,000
400 Cnet Inc. (a) 21,925
700 Coinmach Laundry Corp. (a) 9,100
426 Coldwater Creek Inc. (a) 5,857
600 Cole National Corp. (a) 10,275
400 Coleman Inc. (a) 3,650
300 Columbia Sportswear Co. (a) 5,062
700 Commercial Intertech Corp. 9,056
778 Computer Learning Centers Inc. (a) 5,203
600 Consolidated Cigar Holdings Inc. (a) 10,612
570 Consolidated Graphics Inc. (a) 38,511
1,000 Consolidated Products Inc. (a) 20,625
400 Copart Inc. (a) 12,950
4,753 Corporate Express Inc. (a) 24,656
400 Cost Plus Inc. (a) 12,550
400 Cox Radio Inc. (a) 16,900
433 CPI Corp. 11,474
907 CSK Auto Corp. (a) 24,206
274 CSS Industries Inc. (a) 8,306
800 Cylink Corp. (a) 2,900
500 Daisytek International Corp. (a) 9,500
700 Dames & Moore Group 9,012
868 Dan River Inc. (a) 10,199
200 Data Processing Resource Corp. (a) 5,850
629 Dave & Buster's Inc. (a) 14,506
338 Day Runner Inc. (a) 4,901
993 Delco Remy International Inc. (a) 9,744
100 Delia's Inc. (a) 1,250
800 Department 56 Inc. (a) 30,050
2,800 DeVry Inc. (a) 85,750
400 Discount Auto Parts Inc. (a) 8,775
600 Donna Karan Intl. Inc. (a) 4,575
442 Dover Downs Entertainment Co. 5,332
900 Dress Barn Inc. (a) 13,669
775 Duane Reade Inc. (a) 29,837
1,200 Eagle Hardware & Garden Inc. (a) 39,000
800 Education Management Corp. (a) 18,900
611 Elder Beerman Stores Corp. (a) 7,065
500 Emmis Broadcasting Corp. (a) 21,687
700 Enesco Group Inc. 16,275
880 Equity Corp. International (a) 23,375
3,355 Extended Stay America Inc. (a) 35,227
633 Fairchild Corp. (a) 9,970
2,000 Fairfield Communities Inc. (a) 22,125
950 Family Golf Centers Inc. (a) 18,762
1,500 Fedders USA Inc. 8,719
2,086 Federal Signal Corp. 57,104
2,300 Fingerhut Companies Inc. 35,506
</TABLE>
15-------
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST SMALL CAP EQUITY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
800 Finish Line Inc. Class A (a) $ 6,400
314 Finlay Enterprises Inc. (a) 3,179
1,800 First Brands Corp. 70,987
1,185 Florida Panthers Holdings (a) 11,035
1,600 Foodmaker Inc. (a) 35,300
1,116 Footstar Inc. (a) 27,900
400 Fossil Inc. (a) 11,500
1,000 Franklin Covey Co. (a) 16,750
372 Fred's Inc. Class A 5,580
452 French Fragrances Inc. (a) 3,277
500 Friedmans Inc. (a) 5,125
900 G&K Services Inc. 47,925
300 Gadzooks Inc. (a) 2,325
600 Garden Ridge Corp. (a) 5,437
300 GC Companies Inc. (a) 12,487
1,600 Gencorp Inc. 39,900
1,200 Genesco Inc. (a) 6,825
536 Genesis Direct Inc. (a) 4,187
700 Gibson Greetings Inc. (a) 8,312
800 Global Directmail Corp. (a) 18,700
1,000 Global Industries Tech. Inc. (a) 10,687
820 Goody's Family Clothing Inc. (a) 8,226
1,767 Grand Casinos Inc. (a) 14,246
193 Gray Communications Systems 3,534
800 Great Atlantic & Pacific 23,700
29 Grey Advertising Inc. 10,556
1,500 Griffon Corporation (a) 15,937
581 Group 1 Automotive Inc. (a) 15,106
1,600 GT Interactive Software Corp. (a) 8,000
440 Guess Inc. (a) 2,117
800 Guitar Center Inc. (a) 19,700
900 Gulford Mills Inc. 15,019
1,100 Gymboree Corp. (a) 7,012
1,100 Ha-Lo Industries Inc. (a) 41,387
1,000 Hancock Fabrics Inc. 8,375
1,500 Handleman Co. (a) 21,094
5,319 Hanover Direct Inc. (a) 18,284
800 Harman Intl. Industries Inc. 30,500
1,088 Hartmarx Corp. (a) 6,120
277 Harveys Casino Resorts 7,669
385 Haverty Furniture Companies Inc. 8,085
2,800 Heilig Meyers Co. 18,725
600 Herballife International 8,550
1,854 Hollinger International 25,840
1,400 Hollywood Entertainment Corp. (a) 38,150
900 Hollywood Park Inc. (a) 7,481
800 Homestead Village Inc. (a) 3,600
812 Horizon Offshore Inc. (a) 4,466
1,300 Host Marriott Services Corp. (a) 13,487
1,159 Houghton Mifflin Co. 54,763
2,161 ICG Communications Inc. (a) 46,461
778 IDT Corp. (a) 11,962
400 IHOP Corp. (a) 15,975
700 Inacom Corp. (a) 10,412
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
1,300 Infousa Inc. (a) $ 6,825
1,500 Innkeepers USA Trust 17,719
660 Insight Enterprises Inc. (a) 33,577
2,200 Interim Services Inc. (a) 51,425
861 International Speedway Corp. 34,870
800 Iron Mountain Inc. (a) 28,850
800 ITT Educational Services Inc. (a) 27,200
800 Jo Ann Stores Inc. (a) 12,900
1,400 John H. Harland Co. 22,137
1,200 John Wiley & Sons Inc. Class A 57,975
574 Journal Register Co. (a) 8,610
1,100 Just For Feet Inc. (a) 19,112
800 Justin Industries Inc. 10,500
179 K&G Mens Center Inc. (a) 1,589
500 K2 Inc. 5,156
1,100 Kaman Corp. 17,669
1,000 Kellwood Co. 25,000
2,500 La Z Boy Inc. 44,531
1,100 Landry's Seafood Restaurants (a) 8,250
700 Lands End Inc. (a) 18,856
400 Learning Tree International (a) 3,625
2,062 Lee Enterprises 64,953
800 Libbey Inc. 23,150
1,833 Linens 'N Things Inc. (a) 72,633
800 Lo-Jack Corp. (a) 9,500
891 Lodgian Inc. (a) 4,344
1,700 Lone Star Steakhouse & Saloon (a) 15,619
1,400 Longs Drug Stores Inc. 52,500
1,100 Luby's Cafeterias Inc. 16,981
2,000 Lycos Inc. (a) 111,125
1,720 Mail-Well Inc. (a) 19,672
1,000 Marcus Corp. 16,250
400 Marvel Entertainment Group Inc. (a) 2,475
936 Maxim Group Inc. (a) 22,464
1,020 McClatchy Newspapers Inc. 36,082
200 Media Arts Group Inc. (a) 2,812
1,112 Media General Inc. 58,936
600 Memberworks Inc. (a) 17,700
950 Mens Wearhouse Inc. (a) 30,162
600 Merrill Corp. 11,587
1,300 Metamor Worldwide Inc. (a) 32,500
300 Metro Networks Inc. (a) 12,787
2,543 Metromedia Intl. Group Inc. (a) 13,828
800 Metzler Group Inc. (a) 38,950
1,200 Michaels Stores Inc. (a) 21,713
1,600 Micro Warehouse Inc. (a) 54,100
1,273 Midway Games Inc. (a) 14,003
400 Mikasa Inc. 5,100
1,665 Musicland Stores Corp. (a) 24,871
869 N2K Inc. (a) 11,351
300 National Presto Industries 12,787
1,500 Nautica Enterprises Inc. (a) 22,500
410 NCO Group Inc. (a) 18,450
600 New England Business Service 23,475
</TABLE>
- ---------
16
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST SMALL CAP EQUITY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
4,100 New Plan Excel Realty Trust Inc. $ 90,969
800 NFO Worldwide Inc. (a) 9,200
700 Norrell Corp. 10,325
600 North Face Inc. (a) 7,800
400 NPC International Inc. (a) 4,825
700 O'Sullivan Industries Holdings (a) 7,350
1,437 Oakley Inc. (a) 13,651
500 On Assignment Inc. (a) 17,250
400 On Command Corp. (a) 3,625
600 Oneida Ltd. 8,887
145 Onsale Inc. (a) 5,809
600 Oshkosh B'Gosh Inc. 12,112
300 Oxford Industries Inc. 8,475
950 Pacific Sunwear CA Inc. (a) 15,556
156 Panavision Inc. (a) 1,931
1,000 Papa Johns International Inc. (a) 44,125
363 Party City Corp. (a) 5,241
900 Paxson Communications Corp. (a) 8,269
300 Penske Motorsports Inc. (a) 7,987
1,500 Personnel Group America (a) 26,250
900 Petco Animal Supplies Inc. (a) 9,056
5,416 Petsmart Inc. (a) 59,576
1,100 Phillips Van Heusen Corp. 7,906
300 Pillowtex Corp. 8,025
300 Pinkertons Inc. (a) 6,394
357 Pinnacle Systems Inc. (a) 12,763
366 PJ America Inc. (a) 6,634
800 Plantronics Inc. (a) 68,800
800 Playboy Enterprises Class B (a) 16,750
972 Pre Paid Legal Services Inc. (a) 32,076
2,892 Premier Parks Inc. (a) 87,483
200 Primadonna Resorts Inc. (a) 1,762
2,500 Prime Hospitality Corp. (a) 26,406
300 QRS Corp. (a) 14,400
498 Quaker Fabric Corp. (a) 3,112
600 Quiksilver Inc. (a) 18,000
1,000 Rainforest Cafe Inc. (a) 6,062
1,300 Red Roof Inns Inc. (a) 21,937
800 Regis Corp. 32,000
724 Rent Way Inc. (a) 17,602
1,059 Rental Service Corp. (a) 16,613
700 Renters Choice Inc. (a) 22,225
800 Rio Hotel & Casino Inc. (a) 12,700
800 Rollins Inc. 14,000
1,667 Romac International Inc. (a) 37,091
1,300 Ruby Tuesday Inc. 27,625
600 Rural/Metro Corp. (a) 6,562
500 Russ Berrie & Company Inc. 11,750
1,461 Russell Corp. 29,677
1,800 Ryans Family Steak House Inc. (a) 22,275
491 Samsonite Corp. (a) 2,731
600 Sbarro Inc. (a) 15,712
600 Scholastic Corp. (a) 32,175
500 Scientific Games Holdings Corp. (a) 9,437
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
239 Sequa Corporation Class A (a) $ 14,310
1,057 SFX Entertainment Inc. (a) 58,003
1,295 Shopko Stores Inc. (a) 43,059
242 Silverleaf Resorts Inc. (a) 2,254
1,889 Sitel Corp. (a) 4,604
205 SM&A Corp. (a) 3,895
900 Sonic Corp. (a) 22,387
600 Speedway Motorsports Inc. (a) 17,100
1,000 Spelling Entertainment Group (a) 7,500
1,500 Spiegel Inc. (a) 8,625
1,500 Sports Authority Inc. (a) 7,875
513 Springs Industries Inc. Class A 21,257
800 St. Johns Knits Inc. 20,800
747 Staff Leasing Inc. (a) 8,684
800 Staffmark Inc. (a) 17,900
1,300 Stage Stores Inc. (a) 12,187
900 Station Casinos Inc. (a) 7,369
1,231 Stein Mart Inc. (a) 8,579
388 Steinway Musical Instruments (a) 10,088
550 Stoneridge Inc. (a) 12,512
383 Strayer Education Inc. 13,501
2,200 Stride Rite Corp. 19,250
900 Sturm Ruger & Co. Inc. 10,744
500 Suburban Lodges America Inc. (a) 4,094
2,053 Sunglass Hut Intl. Inc. (a) 14,371
1,210 Sunterra Corp. (a) 18,150
1,300 Superior Services Inc. (a) 26,081
1,808 Sylvan Learning Systems Inc. (a) 55,144
870 Tecumseh Products Co. 40,564
592 Thermolase Corp. (a) 2,701
200 Timberland Co. (a) 9,112
600 TMP Worldwide Inc. (a) 25,200
600 Toro Co. 17,100
754 Trans World Entertainment Corp. (a) 14,373
400 Travel Services Intl. Inc. (a) 12,200
264 Trendwest Resorts Inc. (a) 3,300
700 Triarc Company Inc. (a) 11,200
400 Unifirst Corp. 9,125
700 United Auto Group Inc. (a) 6,431
200 United Natural Foods Inc. (a) 4,825
1,286 United Rentals Inc. (a) 42,599
1,700 United Stationers Inc. (a) 44,200
163 United Television Inc. 18,745
1,530 Universal Corp. 53,741
400 Urban Outfitters Inc. (a) 6,750
502 USA Floral Products Inc. (a) 5,773
1,200 Vail Resorts Inc. (a) 26,400
500 Value City Department Stores (a) 6,969
1,000 Veterinary Centers America Inc. (a) 19,937
400 Vincam Group Inc. (a) 7,025
300 Vistana Inc. (a) 4,200
1,176 Vlasic Foods International Inc. (a) 28,003
400 Volt Information Sciences (a) 9,025
421 Wackenhut Corp. 10,709
</TABLE>
17-------
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST SMALL CAP EQUITY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
500 Wackenhut Corrections Corp. (a) $ 14,312
1,924 Walter Industries Inc. (a) 29,461
600 WD-40 Co. 17,175
500 West Marine Inc. (a) 4,937
800 West Teleservices Corp. (a) 7,800
1,000 Westwood One Inc. (a) 30,500
500 Wet Seal Inc. (a) 15,094
500 Wilmar Industries Inc. (a) 10,156
900 Windmere-Durable Holdings (a) 6,975
1,879 Wolverine World Wide Inc. 24,897
1,800 World Color Press Inc. (a) 54,787
400 Young Broadcasting Inc. (a) 16,750
1,700 Zale Corp. (a) 54,825
-----------
7,034,500
-----------
CONSUMER STAPLES (2.1%)
375 99 Cents Only Stores (a) 18,422
1,837 Advantica Restaurant Group Inc. (a) 11,366
820 Beringer Wine Estates (a) 36,644
679 Block Drug Inc. 29,442
600 Boston Beer Company Inc. (a) 5,100
300 Bush Boake Allen Inc. (a) 10,575
700 Canadaigua Brands Inc. (a) 40,469
800 Church & Dwight Inc. 28,750
100 Coca-Cola Bottling Co. 5,750
1,639 Corn Products Intl. Inc. 49,785
2,100 Dimon Inc. 15,619
1,000 Dreyer's Grand Ice Cream Inc. 15,125
2,000 Earthgrains Co. 61,875
28 Farmer Brothers Co. 5,992
1,800 Fleming Companies Inc. 18,675
319 General Cigar Holdings Inc. (a) 2,771
187 Genovese Drug Stores Inc. 5,329
608 Hain Food Group Inc. (a) 15,200
1,800 Homebase Inc. (a) 11,475
637 Imperial Holly Corp. 5,176
400 Ingles Markets Inc. 4,375
800 International Multifoods Corp. 20,650
1,200 JM Smucker Co. 29,700
983 Lance Inc. 19,599
600 Michael Food Inc. 18,000
700 Natures Sunshine Products Inc. 10,675
458 Omega Protein Corp. (a) 4,637
600 Performance Food Group (a) 16,875
200 Pilgrims Pride Corp. 3,987
1,680 Planet Hollywood Intl. Inc. (a) 3,885
1,500 Playtex Products Inc. (a) 24,094
1,500 Ralcorp Holdings Inc. (a) 27,375
2,200 Richfood Holdings Inc. 45,650
400 Riviana Foods Inc. 9,875
349 Robert Mondavi Corp. (a) 14,265
1,300 Ruddick Corp. 29,900
600 Schweitzer-Mauduit Intl. 9,262
14 Seaboard Corp. 5,908
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
400 Smart & Final Inc. $ 3,850
1,600 Smithfield Foods Inc. (a) 54,200
6,581 Southland Corp. (a) 12,545
784 TCBY Enterprises Inc. 5,488
1,000 Twinlab Corp. (a) 13,125
2,425 Universal Foods Corp. 66,536
500 Valhi Corp. 5,687
469 Weider Nutrition Intl. Inc. 2,990
553 Wild Oats Markets Inc. (a) 17,419
639 Zapata Corp. (a) 7,828
-----------
881,920
-----------
DURABLE PRODUCTS (5.6%)
431 Advanced Energy Industries (a) 10,775
300 AFC Cable Systems Inc. (a) 10,087
1,300 Allen Telecom Inc. (a) 8,694
400 Allied Products 2,525
800 Alpine Group Inc. (a) 12,000
600 American Homestar Corp. (a) 9,000
1,500 Ametek Inc. 33,469
1,100 Antec Corp. (a) 22,137
1,840 Applied Power Inc. Class A 69,460
1,500 Artesyn Technologies Inc. (a) 21,000
2,400 Aspect Telecommunication Corp. (a) 41,400
1,545 Baldor Electric Co. 31,286
719 Banner Aerospace Inc. (a) 6,786
1,151 Blount International Inc. Class A 28,703
600 C&D Technologies Inc. 16,500
600 California Microwave Inc. (a) 5,625
1,950 Champion Enterprises Inc. (a) 53,381
850 Chart Industries Inc. 6,481
1,600 Cognex Corp. (a) 32,000
500 Cohu Inc. 11,000
500 Columbus McKinnon Corp. 9,000
1,000 Credence Systems Corp. (a) 18,500
525 CTS Corp. 22,837
700 Cuno Inc. (a) 11,375
200 Curtiss Wright 7,625
1,400 Cymer Inc. (a) 20,475
600 Daniel Industries 7,275
400 Detroit Diesel Corp. (a) 8,275
1,000 Dionex Corp. (a) 36,625
1,800 Donaldson Inc. 37,350
1,642 DR Horton Inc. 37,766
400 DT Industries Inc. 6,300
400 Ducommun Inc. (a) 5,525
200 Dupont Photomasks Inc. (a) 8,487
1,233 Earthshell Corp. (a) 14,719
500 Electro Scientific Industries Inc. (a) 22,656
900 Electroglas Inc. (a) 10,575
214 Essex International Inc. (a) 7,410
1,800 Flowerserve Corporation 29,812
200 Franklin Electric Co. Inc. 13,500
1,000 FSI International Inc. (a) 10,375
</TABLE>
- ---------
18
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST SMALL CAP EQUITY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
600 Gardner Denver Inc. (a) $ 8,850
300 General Binding Corp. 11,175
1,670 General Cable Corp. 34,235
1,300 Genrad Inc. (a) 20,475
400 Gleason Corp. 7,250
672 Graco Inc. 19,824
275 Heico Corp. 8,680
900 Helix Technology Corp. 11,700
500 Holophane Corp. (a) 12,844
2,356 Hussman International Inc. 45,647
1,400 Idex Corp. 34,300
1,000 Inter Tel Inc. 23,375
2,100 Interdigital Communications (a) 9,581
600 Itron Inc. (a) 4,312
1,903 JLG Industries Inc. 29,734
1,900 Kaufman & Broad Home Corp. 54,625
1,300 Kent Electronics Corp. (a) 16,575
762 Keystone Automotive Industries Inc. (a) 15,954
1,700 Kimball Intl. Inc. Class B 32,300
700 Knoll Inc. (a) 20,737
468 Kroll O'Gara Company (a) 18,457
800 Kuhlman Corp. 30,300
1,100 Kulicke & Soffa Industries Inc. (a) 19,525
1,813 Lam Research Corp. (a) 32,294
550 Lindsay Manufacturing Co. 8,147
300 LS Starrett Co. Class A 10,294
310 Lufkin Industries Inc. 5,735
1,200 Magnetek Inc. (a) 13,875
800 Manitowoc Inc. 35,500
700 Matthews International Corp. 22,050
894 MDC Holdings Inc. 19,109
260 Meadowcraft Inc. (a) 2,909
1,820 Mettler Toledo Intl. Inc. (a) 51,074
800 Micros Systems Inc. (a) 26,300
1,800 Milacron Inc. 34,650
300 Moog Inc. (a) 11,737
388 Movado Group Inc. 10,330
900 MTS Systems Corp. 12,150
1,151 Nine West Group Inc. (a) 17,912
600 Nordson Corp. 30,825
400 NVR Inc. (a) 19,075
800 Oak Industries Inc. (a) 28,000
2,200 Oakwood Homes Corp. 33,412
800 OEA Inc. 9,450
500 Omniquip International Inc. 7,500
200 Optical Cable Corp. (a) 2,425
850 Palm Harbor Homes Inc. (a) 21,409
292 Parkervision Inc. (a) 6,862
1,700 Picturetel Corp. (a) 11,262
1,142 Precision Castparts Corp. 50,533
1,201 Presstek Inc. (a) 8,182
800 PRI Automation Inc. (a) 20,800
1,158 Pulte Corp. 32,207
1,000 Regal Beloit Corp. 23,000
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
400 Robbins & Myers Inc. $ 8,850
1,500 Roper Industries Inc. 30,562
700 Ryland Group Inc. 20,212
506 Sauer Inc. 3,827
500 Scotsman Industries Inc. 10,281
800 Scott Technologies Inc. (a) 13,225
1,456 Silicon Valley Group Inc. (a) 18,564
500 Specialty Equipment Companies Inc. (a) 13,531
1,200 Standard Pacific Corp. 16,950
1,200 Stewart & Stevenson Services Inc. 11,700
350 Superior Telecom Inc. 16,537
700 Technitrol Inc. 22,312
400 Tennant Co. 16,050
786 Terex Corp. (a) 22,450
700 Thermedics Inc. (a) 7,569
500 Thermo Fibertek Inc. (a) 3,562
1,100 Toll Brothers Inc. (a) 24,819
1,377 Trammell Crow Co. (a) 38,556
621 Tristar Aerospace Co. (a) 4,347
600 Triumph Group Inc. (a) 19,200
1,000 Ultratech Stepper Inc. (a) 16,000
3,178 Unisource Worldwide Inc. 23,040
600 US Home Corp. (a) 19,950
815 Varlen Corp. 18,796
400 Veeco Instruments Inc. (a) 21,250
797 Vicor Corp. (a) 7,173
273 Virco Manufacturing Corp. 5,016
700 Watts Industries Inc. 11,637
400 Woodward Governor Co. 8,850
700 X-Rite Inc. 5,425
-----------
2,348,475
-----------
FINANCIAL SERVICES (21.2%)
1,000 Aames Financial Corp. (a) 3,187
500 Acceptance Insurance Companies Inc. (a) 10,125
1,092 Advanta Corp. 14,469
330 Advest Group Inc. 6,105
805 Affiliated Managers Group Inc. (a) 24,049
394 Alabama National Bancorp 10,515
500 Alexandria Real Estate 15,469
1,103 Alfa Corp. 26,748
1,369 Amcore Financial Inc. 31,337
400 American Annuity Group Inc. 9,200
1,100 American Health Properties Inc. 22,687
800 American Heritage Life Investment 19,550
500 American Medical Security Group 7,156
2,900 Americredit Corp. (a) 40,056
1,100 Amerin Corp. (a) 25,987
500 Ameritrade Holding Corp. (a) 15,750
800 Amerus Life Holdings Inc. 17,900
600 AMLI Residential Properties 13,350
264 Amplicon Inc. 3,976
800 Anchor Bancorp WI Inc. 19,200
300 Andover Bancorp Inc. 10,387
</TABLE>
19-------
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST SMALL CAP EQUITY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
896 Anthracite Capital Inc. $ 7,000
2,000 Arcadia Financial Ltd. (a) 7,250
500 Area Bancshares Corp. 13,125
800 Argonaut Group Inc. 19,600
1,089 ARM Financial Group Inc. 24,162
800 Arthur J. Gallagher & Co. 35,300
761 Associated Estates Realty Corp. 8,989
338 Astec Industries Inc. (a) 18,801
812 BA Merchant Services Inc. (a) 16,341
600 Baldwin & Lyons Inc. Class B 14,850
200 Bancfirst Corp. 7,175
327 Bancfirst Ohio Corp. 9,933
2,092 Bancorpsouth Inc. 37,787
900 Banctec Inc. (a) 11,306
977 Bancwest Corp. 46,896
575 Bank of Granite Corp. 15,884
1,000 Bank Plus Corp. (a) 4,375
1,608 BankAtlantic Bancorp Inc. 11,457
700 Banknorth Group Inc. 26,337
561 Bankunited Financial Corp. Class A (a) 4,488
500 Barra Inc. (a) 11,812
900 Bay View Capital Corp. 19,519
1,000 Bedford Property Investors 16,875
1,800 Berkshire Realty Co. Inc. 17,100
1,600 Billing Concepts Corp. (a) 17,600
1,097 Bisys Group Inc. (a) 56,633
206 BOK Financial Corp. (a) 9,708
757 Boykin Lodging Co. 9,368
1,100 Bradley Real Estate Inc. 22,550
1,596 Brandywine Realty Trust 28,528
2,100 BRE Properties Inc. 51,975
540 Brenton Banks Inc. 9,045
629 Brookline Bancorp Inc. 7,233
300 BSB Bancorp Inc. 9,862
600 BT Financial Corp. 16,425
1,500 Burham Pacific Property Inc. 18,094
820 Cabot Industrial Trust 16,759
2,079 Camden Property Trust 54,054
878 Capital Automotive REIT 13,060
150 Capital City Bank Group Inc. 4,144
1,000 Capital Re Corp. 20,062
400 Capital Transamerica Corp. 7,475
2,700 Capstead Mortgage Corp. (a) 11,137
997 Carolina First Corp. 25,237
338 Cathay Bancorp Inc. 13,858
600 CB Richard Ellis Services Inc. (a) 10,875
1,100 CBL & Associates Properties 28,394
1,037 CCA Prison Realty Trust 21,258
1,100 CCC Information Services Group (a) 18,975
694 Centennial Bancorp (a) 13,012
800 Centerpoint Properties Trust 27,050
2,314 Century Business Systems (a) 33,264
388 Century South Banks Inc. 10,815
360 CFSB Bancorp Inc. 8,775
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
848 Charles E. Smith Residential $ 27,242
969 Charter Municipal Mortgage Accept. 11,749
400 Chartwell Re Corp. 9,500
944 Chateau Communities Inc. 27,671
700 Chelsea GCA Realty Inc. 24,937
625 Chemical Financial Corp. 21,250
676 Chicago Title Corp. 31,730
700 Chittenden Corp. 22,400
1,100 Citizens Banking Corp. 37,125
729 City Holding Co. 23,684
1,100 CMAC Investment Corp. 50,531
800 CNA Surety Corp. 12,600
1,455 CNB Bancshares Inc. 67,839
1,200 Colonial Properties Trust 31,950
510 Columbia Banking Systems Inc. (a) 9,435
1,083 Commerce Bancorp Inc. 56,857
1,204 Commerce Group Inc. 42,667
2,790 Commercial Federal Corp. 64,693
1,300 Commercial Net Lease Realty 17,225
700 Commonwealth Bancorp Inc. 10,894
300 Community Bank System Inc. 8,794
2,192 Community First Bankshare Inc. 46,169
500 Community Trust Bancorp Inc. 11,750
631 Conning Corp. 13,093
581 Contifinancial Corp. (a) 4,140
1,894 Cornerstone Realty Income Trust 19,887
600 Cort Business Services Corp. (a) 14,550
400 Corus Bankshares Inc. 12,900
1,200 Cousins Properties Inc. 38,700
1,700 Crawford & Co. Class B 26,244
1,100 Credit Acceptance Corp. (a) 8,044
2,300 CRIIMI MAE Inc. 8,050
979 Crown American Realty 7,587
1,251 Cullen Frost Bankers Inc. 68,649
550 CVB Financial Corp. 12,375
376 D&N Savings Bank 8,883
700 Dain Rauscher Corp. 20,650
722 Delphi Financial Group Inc. (a) 37,860
300 Delta Financial Corp. (a) 1,781
2,714 Developers Diversified Realty 48,173
500 Dime Community Bancshares 10,312
1,400 Doral Financial Corp. 30,975
935 Downey Financial 23,784
2,000 Dynex Capital Inc. (a) 9,250
1,700 E Trade Group Inc. (a) 79,528
800 Eastgroup Properties 14,750
1,300 Eaton Vance Corp. 27,137
700 Electro Rent Corp. (a) 11,287
1,178 Enhance Financial Services Group Inc. 35,340
1,000 Envoy Corporation (a) 58,250
700 Essex Property Trust Inc. 20,825
600 Everen Capital Corp. 13,650
382 Evergreen Bancorp Inc. 12,272
600 EW Blanch Holdings Inc. 28,462
</TABLE>
- ---------
20
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST SMALL CAP EQUITY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
500 Executive Risk Inc. $ 27,469
304 F&M Bancorp MD 9,956
540 F&M Bancorporation Inc. 16,335
1,000 F&M National Corp. 29,937
300 Factset Research Systems Inc. (a) 18,525
500 Fair Isaac & Co. Inc. 23,094
314 Farmers Capital Bank Corp. 11,775
1,500 FBL Financial Group Inc. 36,375
294 Federal Agriculture Mortgage Corp. (a) 10,915
1,900 Federal Realty Investment Trust 44,887
2,996 Felcor Lodging Trust Inc. 69,095
1,100 Fidelity National Financial 33,550
400 Financial Federal Corp. (a) 9,900
2,442 First American Financial Corp. 78,449
1,200 First Bancorp 36,225
761 First Charter Corp. 13,127
282 First Citizens Bancshare Inc. 25,380
600 First Commerce Bancshares Inc. 16,800
1,000 First Commonwealth Financial Corp. 24,500
700 First Federal Capital Corp. 11,462
1,365 First Financial Bancorp 39,500
440 First Financial Bankshare Inc. 15,400
300 First Financial Corp. IN 14,812
600 First Financial Holdings Inc. 11,400
460 First Indiana Corp. 9,200
1,800 First Industrial Realty Trust Inc. 48,262
509 First Liberty Financial Corp. 10,689
475 First Merchants Corp. 12,409
1,207 First Midwest Bancorp Inc. 45,941
400 First Republic Bank (a) 10,025
1,373 First Sentinel Bancorp Inc. 11,156
524 First Sierra Financial Inc. (a) 6,419
618 First Source Corporation 20,703
1,400 First Union Real Estate 8,225
1,000 First United Bancshares Inc. 17,750
540 First Washington Bancorp Inc. 12,960
500 First Western Bancorp 16,000
248 Firstcity Financial Corp. (a) 3,208
900 Firstfed Financial Corp. (a) 16,087
300 Flagstar Bancorp Inc. 7,837
825 FNB Corp. 23,306
835 Foremost Corp. of America 17,535
403 FPIC Insurance Group Inc. (a) 19,268
2,300 Franchise Finance Corp. 55,200
431 Franchise Mortgage Acceptance (a) 3,340
590 Freedom Securities Corp. 8,924
1,094 Friedman Billings Ramsey Group (a) 7,111
308 Frontier Financial Corp. (a) 14,091
1,500 Frontier Insurance Group Inc. 19,312
200 Fund American Enterprises 28,012
1,235 Gables Residential Trust 28,637
700 GBC Bancorp CA 18,025
1,700 General Growth Properties Inc. 64,387
400 Getty Realty Corp. 5,850
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
1,500 Glenborough Realty Trust Inc. $ 30,562
1,100 Glimcher Realty Trust 17,256
359 Gold Banc Corp. Inc. 5,520
750 Grand Premier Financial Inc. 9,187
800 Great Lakes REIT Inc. 12,550
410 Greater Bay Bancorp 13,837
400 Guarantee Life Companies Inc. 7,400
800 Hambrecht & Quist Group Inc. (a) 18,150
400 Hamilton Bancorp Inc. (a) 10,675
400 Hancock Holding Co. 18,200
780 Harbor Florida Bancshares Inc. 8,726
500 Harleysville Group Inc. 12,906
300 Harleysville National Corp. 11,700
500 Harris Financial Inc. 6,812
380 Haven Bancorp Inc. 5,700
1,800 HCC Insurance Holdings Inc. 31,725
954 Headlands Mortgage Co. (a) 19,974
1,343 Health Care REIT Inc. 34,750
603 Healthcare Financial Partners (a) 24,045
1,500 Healthcare Property Investors 46,125
1,866 Healthcare Realty Trust Inc. 41,635
600 Highlands Insurance Group (a) 7,837
600 Hilb Rogal & Hamilton Co. 11,925
800 Home Properties of NY Inc. 20,600
1,670 Hospitality Properties Trust 40,289
1,350 HSB Group Inc. 55,434
1,930 Hubco Inc. 58,141
1,200 IMC Mortgage Co. (a) 338
1,200 IMPAC Mortgage Holdings Inc. 5,475
1,500 Imperial Bancorp (a) 24,937
1,559 Imperial Credit Commercial Mortgage 14,616
1,512 Imperial Credit Industries Inc. (a) 12,663
3,543 Independence Community Bank 56,467
600 Independent Bank Corp. 10,425
733 Insignia Financial Group Inc. (a) 8,888
545 International Bancshares Corp. 27,591
600 Interpool Inc. 10,050
1,047 Interwest Bancorp Inc. 23,165
200 Investment Technology Group (a) 12,412
300 Investors Financial Services Corp. 17,887
1,400 IRT Property Co. 14,000
900 Irvine Apartment Communities 28,687
500 Irwin Financial Corp. 13,594
1,450 JDN Realty Corp. 31,266
467 Jeffbanks Inc. 9,223
657 Jefferies Group Inc. 32,604
389 Jefferson Savings Bancorp Inc. 5,106
300 John Nuveen Co. Class A 11,137
600 JP Realty Inc. 11,775
400 JSB Financial Inc. 21,750
154 Kansas City Life Insurance Co. 12,589
1,264 Kilroy Realty Corp. 29,072
1,200 Koger Equity Inc. 20,625
719 Landamerica Financial Group 40,129
</TABLE>
21-------
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST SMALL CAP EQUITY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
500 Liberty Corp. $ 24,625
900 Life USA Holding Inc. 11,587
1,200 LNR Property Corp. 23,925
864 Local Financial Corp. (a) 7,776
1,000 Long Beach Financial Corp. (a) 7,500
1,300 LTC Properties Inc. 21,612
1,400 Macerich Co. 35,875
1,100 MAF Bancorp Inc. 29,150
302 Mahoning National Bancorp Inc. 9,362
700 Mainstreet Bankgroup Inc. 32,506
1,000 Manufactured Home Communities Inc. 25,062
163 Markel Corp. (a) 29,503
400 McGrath Rentcorp 8,800
300 Meadowbrook Insurance Group 4,931
534 Medallion Financial Corp. 7,643
1,100 Medical Assurance Inc. (a) 36,369
400 Merchants New York Bancorp 14,475
1,500 Meridian Industrial Trust Inc. 35,250
356 Meta Group Inc. (a) 10,591
873 Metris Companies Inc. 43,923
600 MGI Properties 16,762
99 Michigan Financial Corp. 3,366
900 Mid America Apartment Communities Inc. 20,419
409 Mid America Bancorp 11,094
159 Midland Co. 3,836
733 Mills Corp. 14,568
300 Mississippi Valley Bancshares 10,125
700 MMI Companies Inc. 11,725
1,300 Morgan Keegan Inc. 24,456
700 NAC Re Corp. 32,856
754 National Bancorp Alaska 25,447
276 National City Bancorporation (a) 7,245
525 National City Bancshares Inc. 19,589
600 National Golf Properties Inc. 17,362
1,100 National Health Investors Inc. 27,156
600 National Penn Bancshares Inc. 16,350
300 National Processing Inc. (a) 1,650
63 National Western Life Insurance Co. (a) 7,402
2,000 Nationwide Health Properties 43,125
625 NBT Bancorp Inc. 14,609
652 Northwest Bancorp Inc. 6,357
3,250 Nova Corp. GA (a) 112,734
200 Nymagic Inc. 4,150
600 Ocean Financial Corp. 9,975
900 Ocwen Asset Investment (a) 4,331
1,300 Old National Bancorp Indiana 72,475
400 Omega Financial Corp. 12,100
900 Omega Healthcare Investor Inc. 27,169
1,600 One Valley Bancorp Inc. 52,600
520 Oriental Financial Group Inc. 16,282
3,694 Oxford Health Plans Inc. (a) 54,948
800 Pacific Gulf Properties Inc. 16,050
400 Park National Corp. 41,200
715 Paymentech Inc. (a) 13,227
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
588 PBOC Holdings Inc. (a) $ 6,027
200 Pec Israel Economic Corp. (a) 5,750
300 Penn Treaty American Corp. (a) 8,081
1,000 Penncorp Financial Group Inc. (a) 1,000
500 Pennsylvania Real Estate 9,719
1,700 Peoples Bancorp Inc. 18,487
288 Peoples Holdings Co. 9,306
700 PFF Bancorp Inc. (a) 11,200
300 Philadelphia Consolidated Holding Corp. (a) 6,787
2,000 Phoenix Investment Partners 16,875
226 Pinnacle Banc Group Inc. 6,441
1,000 Pioneer Group Inc. (a) 19,750
701 PMA Capital Corp. 13,713
500 Poe & Brown Inc. 17,469
1,210 Premier Bancshares Inc. 31,687
1,800 Prentiss Properties Trust 40,162
1,000 Presidential Life Corp. 19,875
582 Preview Travel Inc. (a) 10,731
397 Prime Bancorp Inc. 6,253
273 Prime Bancshares Inc. 4,709
227 Prime Group Realty Trust 3,433
1,920 Prime Retail Inc. 18,840
500 Profit Recovery Group Intl. (a) 18,719
1,104 Provident Bankshares Corp. 27,462
500 PXRE Corp. 12,531
850 Queens County Bancorp Inc. 25,287
1,300 Realty Income Corp. 32,337
1,898 Reckson Associates Realty Corp. 42,112
500 Redwood Trust Inc. (a) 7,000
699 Regency Realty Corp. 15,553
1,200 Reinsurance Group America Inc. 84,000
400 Reliance Bancorp Inc. 11,125
950 Republic Bancorp Inc. 12,944
252 Republic Bancshares Inc. (a) 3,307
355 Republic Banking Corp. of FL 3,772
2,229 Republic Security Financial Corp. 27,027
862 Resource America Inc. 7,812
700 Resource Bancshares Mortgage Group 11,594
1,000 RFS Hotel Investors Inc. 12,250
1,192 Richmond County Financial Corp. 19,146
900 Riggs National Corp. 18,337
638 Risk Capital Holdings Inc. (a) 13,876
374 RLI Corp. 12,435
2,300 Rollins Truck Leasing Corp. 33,925
1,900 Roslyn Bancorp Inc. 40,850
96 RSI (a) 396
1,316 S&T Bancorp Inc. 36,272
417 Sandy Spring Bancorp Inc. 12,562
700 Santa Barbara Bancorp 18,025
700 Scipe Holdings Inc. 21,219
624 SEI Investments Corp. 62,010
1,300 Selective Insurance Group 26,162
306 Shoreline Financial Corp. 8,071
</TABLE>
- ---------
22
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST SMALL CAP EQUITY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
1,300 Shurgard Storage Centers Inc. $ 33,556
427 Signal Corp. 14,625
887 Silicon Valley Bancshares (a) 15,107
286 Simmons First Nation 10,618
326 SIS Bancorp Inc. 14,751
1,787 Sky Financial Group Inc. 47,244
1,900 Sotherbys Holdings Inc. Class A 60,800
300 Southern Pacific Funding Corp. (a) 24
900 Southwest Bancorp Texas Inc. (a) 16,087
540 Southwest Securities Group Inc. 10,867
551 Sovran Self Storage Inc. 13,844
1,924 St. Paul Bancorp Inc. 52,369
600 State Auto Financial Corp. 7,425
2,061 Staten Island Bancorp Inc. 41,091
360 Sterling Bancorp 8,212
1,050 Sterling Bancshares Inc. 15,619
286 Sterling Financial Corp. 11,869
279 Stewart Information Services Corp. 16,182
700 Storage Trust Realty 16,362
1,300 Storage USA Inc. 42,006
200 Student Loan Corp. 8,975
1,000 Summit Properties Inc. 17,250
800 Sun Communities Inc. 27,850
1,682 Sunstone Hotel Investors Inc. 15,874
1,600 Susquehanna Bancshare Inc. 32,750
269 Tanger Factory Outlet Centers 5,699
1,800 Taubamn Centers Inc. 24,750
700 Texas Regional Bancshares 17,544
1,000 Thornburg Mortgage Asset Corp. 7,625
2,008 TIG Holdings Inc. 31,249
700 Town & Country Trust 11,244
700 TR Financial Corp. 27,562
500 Trenwick Group Inc. 16,312
600 Triad Guaranty Inc. (a) 13,237
1,150 Triangle Bancorp Inc. 18,184
1,100 Trinet Corp. Realty Trust Inc. 29,425
800 Trust Company of NJ 19,600
1,250 Trustco Bank Corp. NY 37,500
1,807 UICI (a) 44,271
718 UMB Financial Corp. 32,938
2,000 United Bankshares Inc. 53,000
1,200 United Companies Financial (a) 4,050
4,797 United Dominion Realty Trust 49,469
300 United Fire & Casualty Co. 10,087
445 United National Bancorp 10,346
451 Urban Shopping Centers Inc. 14,770
600 US Bancorp Inc. 11,925
443 USB Holding Co. Inc. 7,476
1,998 UST Corp. 47,078
100 Value Line Inc. 3,937
600 Vermont Financial Services 19,950
500 Vesta Insurance Group Inc. 3,000
800 Walden Residential Properties 16,350
1,700 Washington Real Estate 31,662
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
419 Washington Trust Bancorp Inc. $ 9,008
1,727 Webster Financial Corp. 47,385
900 Weeks Corp. 25,369
1,225 Weingarten Realty Investors 54,666
754 Wellsford Real Properties Inc. (a) 7,776
1,000 Wesbanco Inc. 29,500
650 West Coast Bancorp OR 13,650
1,900 Westamerica Bancorporation 69,825
400 Westcorp Inc. 2,775
836 Western Bancorp 24,453
800 Western Investment Real Estate 9,450
2,000 Westernbank Puerto Rico 31,750
1,421 Westfield America Inc. 24,512
1,100 Whitney Holding Corp. 41,250
171 Wilshire Financial Services Group Inc. (a) 107
1,000 WR Berkley Corp. 34,062
500 WSFS Financial Corp. 8,437
733 Xtra Corp. 30,328
500 Zenith National Insurance Corp. 11,562
-----------
8,836,819
-----------
HEALTH CARE (9.6%)
1,281 ABR Information Services Inc. (a) 25,140
1,000 Acuson Corp. (a) 14,875
2,420 Acxiom Corp. (a) 75,020
950 ADAC Laboratories (a) 18,970
438 Advance Paradigm Inc. (a) 15,330
1,900 Advanced Tissue Inc. (a) 4,928
737 Affymetrix Inc. (a) 17,964
1,500 Agouron Pharmaceutical Inc. (a) 88,125
1,966 Alaris Medical Inc. (a) 11,550
500 Algos Pharmaceuticals Corp. (a) 13,000
900 Alkermes Inc. (a) 19,969
800 Alpharma Inc. 28,250
700 Alternative Living Services (a) 23,975
400 American Homepatient Inc. (a) 725
1,300 American Oncology Research Inc. (a) 18,931
641 Ameripath Inc. (a) 5,729
1,023 Amerisource Health Corp. (a) 66,495
300 Andrx Corp. (a) 15,375
1,871 Apria Healthcare Group Inc. (a) 16,722
700 Arrow International Inc. 21,962
747 Assisted Living Concept Inc. (a) 9,804
629 Aviron (a) 16,275
1,800 AXYS Pharmaceuticals Inc. (a) 10,575
1,400 Ballard Medical Products 34,037
400 Barr Laboratories Inc. (a) 19,200
733 Bindley Western Industries Inc. 36,100
500 Bio Rad Labs Inc. (a) 10,500
2,300 Bio Technology General Corp. (a) 15,956
296 Biomatrix Inc. (a) 17,242
404 Brookdale Living Communities (a) 7,878
531 Capital Senior Living Corp. (a) 7,401
500 Carematrix Corp. (a) 15,313
</TABLE>
23-------
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST SMALL CAP EQUITY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
1,000 Carter Wallace Inc. $ 19,625
1,233 Cell Genesys Inc. (a) 7,398
577 Centennial Healthcare Corp. (a) 8,944
1,500 Cephalon Inc. (a) 13,500
1,200 Cerner Corp. (a) 32,100
490 Chattem Inc. (a) 23,459
529 Chirex Inc. (a) 11,307
300 Closure Medical Corp. (a) 8,944
1,000 Columbia Laboratories Inc. (a) 3,063
2,153 Concentra Managed Care Inc. (a) 23,010
700 Conmed Corp. (a) 23,100
700 Cooper Companies Inc. (a) 14,481
1,100 Cor Therapeutics Inc. (a) 14,575
594 Coulter Pharmaceutical Inc. (a) 17,820
2,700 Covance Inc. (a) 78,638
2,723 Coventry Health Care Inc. (a) 23,996
600 Curative Health Services (a) 20,100
700 Cytyc Corp. (a) 18,025
600 Datascope Inc. (a) 13,800
500 Diagnostic Products Corp. 15,563
2,304 Dura Pharmaceuticals Inc. (a) 34,992
514 Entremed Inc. (a) 10,794
1,000 Enzo Biochem Inc. (a) 10,313
1,576 Express Scripts Inc. (a) 105,789
1,844 Fisher Scientific Intl. (a) 36,765
800 Fuisz Technologies Ltd. (a) 10,300
600 Geltex Pharmaceuticals Inc. (a) 13,575
1,712 Genesis Health Ventures Inc. (a) 14,980
3,600 Gensia Sicor Inc. (a) 16,313
1,400 Gilead Sciences Inc. (a) 57,488
800 Guilford Pharmaceuticals Inc. (a) 11,400
1,100 Haemonetics Corp. (a) 25,025
808 Hanger Orthopedic Group (a) 18,180
400 Healthplan Services Corp. 4,600
1,160 Henry Schein Inc. (a) 51,910
669 Heska Corp. (a) 2,969
600 Hologic Inc. (a) 7,275
660 Hooper Holmes Inc. 19,140
1,000 Human Genome Sciences Inc. (a) 35,563
1,700 ICOS Corp. (a) 50,575
800 IDEC Pharmaceuticals Corp. (a) 37,600
1,700 IDEXX Laboratories Corp. (a) 45,741
414 IDX Systems Corp. (a) 18,216
1,091 Imclone Systems Inc. (a) 9,887
1,061 Immune Response Corp. (a) 11,538
346 Impath Inc. (a) 9,169
1,100 Incyte Pharmaceuticals Inc. (a) 41,113
700 Inhale Therapeutic Systems (a) 23,100
1,046 Invacare Corp. 25,104
1,200 ISIS Pharmaceuticals Inc. (a) 15,525
4,387 Ivax Corp. (a) 54,563
1,100 Jones Pharmaceutical Inc. 40,150
376 Kendle International Inc. (a) 8,789
650 KV Pharmaceutical Co. (a) 13,447
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
100 Labone Inc. $ 1,300
2,600 Laboratory Corp. American Holdings (a) 3,575
400 Landauer Inc. 12,950
511 Lifecore Biomedical Inc. (a) 5,238
1,800 Ligand Pharmaceuticals Inc. (a) 20,925
2,100 Liposome Co. Inc. (a) 32,419
1,047 Macrochem Corp. (a) 8,834
1,600 Magellan Health Services Inc. (a) 13,400
3,310 Mariner Post-Acute Network Inc. (a) 15,102
675 Maxxim Medical Inc. (a) 20,081
3,700 Medaphis Corporation (a) 12,141
500 Medical Manager Corp. (a) 15,688
900 Medicis Pharmaceutical Corp. (a) 53,663
1,135 Medimmune Inc. (a) 112,862
1,100 Medquist Inc. (a) 43,450
1,100 Mentor Corp. 25,781
2,100 Mid Atlantic Medical Services Inc. (a) 20,606
1,500 Millennium Pharmaceuticals Inc. (a) 38,813
300 Minimed Inc. (a) 31,425
400 Miravant Medical Technologies (a) 5,150
339 National Healthcare Corp. (a) 5,255
2,419 NBTY Inc. (a) 17,235
659 NCS Healthcare Inc. (a) 15,651
500 Neurogen Corp. (a) 8,750
1,300 Nexstar Pharmaceuticals Inc. (a) 12,025
2,800 Novacare Inc. (a) 7,000
343 Novoste Corp. (a) 9,733
398 Ocular Sciences Inc. (a) 10,647
600 OEC Medical Systems Inc. (a) 18,863
1,400 Organogenesis Inc. (a) 15,750
1,700 Orthodontic Centers America (a) 33,044
1,000 Owens & Minor Inc. 15,750
1,200 Parexel International Corp. (a) 30,000
800 Pathogenesis Corp. (a) 46,400
1,050 Patterson Dental Co. (a) 45,675
715 Pediatrix Medical Group Inc. (a) 42,855
300 Perclose Inc. (a) 9,938
3,000 Perrigo Co. (a) 26,438
800 Pharmaceutical Product Development Inc. (a) 24,050
601 Pharmacyclics Inc. (a) 15,326
3,000 Pharmerica Inc. (a) 18,000
3,570 Phycor Inc. (a) 24,321
1,200 Phymatrix Inc. (a) 2,625
1,300 Physician Reliance Network Inc. (a) 17,063
599 Priority Healthcare Corp. (a) 31,073
900 Protein Design Labs Inc. (a) 20,925
419 Province Healthcare Co. (a) 15,032
3,275 PSS World Medical Inc. (a) 75,325
1,400 Quest Diagnostics Inc. (a) 24,938
1,200 Regeneron Pharmaceutical Inc. (a) 8,850
1,900 Renal Care Group Inc. (a) 54,744
550 Res-Care Inc. (a) 13,578
678 Resmed Inc. (a) 30,764
</TABLE>
- ---------
24
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST SMALL CAP EQUITY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
1,268 Respironics Inc. (a) $ 25,400
1,200 Roberts Pharmaceutical Inc. (a) 26,100
500 Sabratek Corp. (a) 8,188
800 Sangstat Medical Corp. (a) 17,000
245 Schein Pharmaceutical Inc. (a) 3,568
1,900 Scios Inc. (a) 19,713
1,300 Sepracor Inc. (a) 113,831
1,500 Sequus Pharmaceuticals Inc. (a) 30,375
1,100 Serologicals Corp. (a) 33,000
1,100 Sierra Health Services Inc. (a) 23,169
1,100 Sola International Inc. (a) 18,975
485 Sugen Inc. (a) 7,154
2,443 Sun Healthcare Group Inc. (a) 16,032
700 Sunrise Assisted Living Inc. (a) 36,313
900 Sunrise Medical Inc. (a) 11,194
481 Supergen Inc. (a) 4,449
300 Superior Consultant Holdings (a) 13,050
900 Techne Corp. (a) 19,013
1,200 Theragenics Corp. (a) 20,175
800 Thermo Cardiosystems Inc. (a) 8,350
800 Transition Systems Inc. (a) 12,000
800 Transkaryotic Therapies Inc. (a) 20,300
400 Trex Medical Corp. (a) 3,400
900 Triangle Pharmaceuticals Inc. (a) 12,263
1,300 US Bioscience Inc. (a) 9,344
2,794 Vencor Inc. (a) 12,573
639 Ventana Medical Systems (a) 13,818
2,465 Ventas Inc. (a) 30,042
1,200 Vertex Pharmaceuticals Inc. (a) 35,700
700 Vical Inc. (a) 9,931
472 Viropharma Inc. (a) 4,396
643 VISX Inc. (a) 56,222
300 Vital Signs Inc. 5,250
1,300 Vivus Inc. (a) 3,372
459 Wesley Jessen Visioncare Inc. (a) 12,737
600 West Inc. 21,413
601 Xomed Surgical Products Inc. (a) 19,232
1,700 Zila Inc. (a) 16,788
560 Zonagen Inc. (a) 10,710
-----------
3,992,218
-----------
MACHINERY & MANUFACTURING (.6%)
1,000 Applied Industrial 13,875
1,132 Briggs & Stratton Corp. 56,459
296 BWAY Corp. (a) 4,459
1,500 Cadiz Land Inc. (a) 11,438
247 Cal Dive International Inc. (a) 5,125
2,230 Catalytica Inc. (a) 40,140
943 Cavalier Homes Inc. 10,727
417 Hardinge Inc. 7,688
543 Monaco Coach Corp. (a) 14,390
254 Nacco Industries Inc. 23,368
1,214 Rohn Industries Inc. (a) 4,173
1,229 Tyler Corp. (a) 7,528
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
1,751 Unova Inc. (a) $ 31,737
348 US Xpress Enterprises Inc. (a) 5,220
-----------
236,327
-----------
MATERIALS & PROCESSES (6.7%)
1,500 A. Schulman Inc. 34,031
600 Advanced Lighting Technologies (a) 5,850
1,835 Agribiotech Inc. (a) 23,740
2,821 Airgas Inc. (a) 25,213
2,170 Alaska Steel Holding Corp. 50,995
822 Albany International Corp. 15,569
900 Albemarle Corp. 21,375
150 Alexanders Inc. (a) 11,728
500 AM Castle & Co. 7,500
1,100 Amcol International Corp. 10,863
697 American Business Products Inc. 16,380
816 American Italian Pasta Co. (a) 21,522
228 Ameron International Corp. 8,436
913 Anicom Inc. (a) 8,388
1,300 Apogee Enterprises 14,625
1,408 Aptargroup Inc. 39,512
300 Avatar Holdings Inc. (a) 4,800
1,400 Banta Corp. 38,325
379 Barnett Inc. (a) 5,211
1,100 Belden Inc. 23,306
1,100 Birmingham Steel Corp. 4,606
1,400 BMC Industries Inc. 8,750
1,000 Brady Wholesale Co. Class A 26,938
800 Brush Wellman Inc. 13,950
1,100 Buckeye Technologies Inc. (a) 16,431
2,900 Burlington Industries Inc. (a) 31,900
300 Butler Manufacturing Co. 6,713
1,500 Calgon Carbon Corp. 11,250
900 Calmat Co. 27,788
1,100 Cambrex Corp. 26,400
1,200 Caraustar Industries Inc. 34,275
400 Carbide/Graphite Group Inc. (a) 5,900
919 Carpenter Technology Corp. 31,189
600 Castle & Cooke Inc. (a) 8,850
400 Centex Construction Products 16,250
525 Century Aluminum Co. 4,955
450 Chase Industries Inc. (a) 4,697
400 Chemed Corp. 13,400
900 Chemfirst Inc. 17,775
900 Chesapeake Corp. 33,188
612 Citation Corp. (a) 7,727
500 Cleveland Cliffs Inc. 20,156
2,797 Collins & Aikman Corp. (a) 14,335
1,738 Comfort Systems USA Inc. (a) 31,067
600 Commercial Metals Co. 16,650
600 Commonwealth Industries Inc. 5,625
1,100 Cone Mills Corp. (a) 6,188
322 Crossmann Communities Inc. (a) 8,895
500 Culp Inc. 3,938
</TABLE>
25-------
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST SMALL CAP EQUITY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
1,700 Dal-Tile International Inc. (a) $ 17,638
600 Deltic Timber Corp. 12,225
1,100 Dexter Corp. 34,581
547 Dycom Industries Inc. (a) 31,247
600 Elcor Corp. 19,388
550 Encore Wire Corp. (a) 5,088
1,700 Ferro Corp. 44,200
600 Florida Rock Industries Inc. 18,600
600 Foamex International Inc. 7,425
600 Forest City Enterprises 15,750
1,906 Foster Wheeler Corp. 25,135
800 Furon Co. 13,650
500 Galey & Lord Inc. (a) 4,313
2,500 Gaylord Container Corp. Class A (a) 15,313
400 General Chemical Group Inc. 5,550
1,100 Geon Co. 25,300
1,400 Georgia Gulf Corp. 22,488
1,500 Getchell Gold Corp. (a) 40,875
400 Giant Cement Holding Inc. (a) 9,900
287 Gibraltar Steel Corp. (a) 6,529
865 Granite Construction Inc. 29,032
700 Greif Bros. Corp. 20,431
1,308 Group Maintenance America Co. (a) 15,860
1,000 Grubb & Ellis Co. (a) 8,063
324 Gulf Island Fabrication Inc. (a) 2,511
600 HB Fuller 28,875
2,900 Hecla Mining Co. (a) 10,513
626 Hexcel Corp. (a) 5,243
1,011 Hughes Supply Inc. 29,572
400 Hunt Corp. 4,250
700 IMCO Recycling Inc. 10,806
988 Insituform Technology Inc. (a) 14,326
785 Integrated Electrical Services (a) 17,466
2,100 Interface Inc. 19,491
900 Intermet Corp. 11,756
800 Ionics Inc. (a) 23,950
1,059 ITEQ Inc. (a) 2,250
892 Ivex Packaging Corp. (a) 20,739
1,100 Jacobs Engineering Group Inc. (a) 44,825
180 JLK Direct Distribution (a) 1,834
800 Juno Lighting Inc. 18,700
1,400 Kaiser Aluminum Corp. (a) 6,825
1,500 Kaydon Corp. 60,094
567 Kellstrom Industries Inc. (a) 16,301
300 Lawson Products Inc. 6,900
1,300 Lawter International Inc. 15,113
400 Learonal Inc. 13,550
1,100 Lilly Industrials Inc. 21,931
800 Lone Star Industries Inc. 29,450
1,000 Lone Star Technologies Inc. (a) 10,125
2,400 Longview Fibre Co. 27,750
700 Lydall Inc. (a) 8,313
2,000 MA Hanna Co. 24,625
681 Macdermid Inc. 26,644
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
600 Maverick Tube Corp. (a) $ 3,338
227 Maxxam Inc. (a) 13,024
400 McWhorter Technologies Inc. (a) 9,150
921 Minerals Technologies Inc. 37,703
1,300 Mississippi Chemical Corp. 18,200
1,632 Morrison Knudsen Corp. (a) 15,912
1,690 Mueller Industries Inc. (a) 34,328
900 National Steel Corp. 6,413
100 NCH Corp. 5,950
800 NCI Building Systems Inc. (a) 22,500
1,000 NL Industries 14,188
471 Nortek Inc. (a) 13,011
1,100 OM Group Inc. 40,150
1,000 Oregon Steel Mills Inc. 11,875
1,700 Paxar Corp. (a) 15,194
1,200 PH Glatfelter Co. 14,850
1,200 Polymer Group Inc. (a) 11,925
1,309 Potlatch Corp. 48,269
467 Price Enterprises Inc. 2,481
200 Puerto Rican Cement Co. Inc. 6,988
700 Quanex Corp. 15,794
500 Reliance Steel & Aluminum Co. 13,813
400 Republic Group Inc. 8,025
646 Rock-Tenn Company 10,942
400 Rouge Industries Inc. 3,500
200 Ryerson Tull Inc. (a) 1,950
900 Scotts Co. (a) 34,594
700 Service Experts Inc. (a) 20,475
300 Shaw Group Inc. (a) 2,400
200 Shiloh Industries Inc. (a) 2,625
950 Shorewood Packaging Corp. (a) 19,475
530 Silgan Holdings Inc. (a) 14,732
200 Simpson Manufacturing Co. Inc. (a) 7,488
600 Spartech Corp. 13,200
100 Special Metals Corp. (a) 894
500 SPS Technologies Inc. (a) 28,313
600 Standard Register 18,563
500 Standex International Corp. 13,125
300 Stepan Co. 7,988
900 Stillwater Mining Co. (a) 36,900
300 Stone & Webster Inc. 9,975
825 Synetic Inc. (a) 36,300
400 Tejon Ranch Co. 7,950
1,650 Terra Industries Inc. 10,209
500 Tetra Technologies Inc. (a) 5,469
1,325 Tetra Tech. Inc. (a) 35,858
1,000 Texas Industries Inc. 26,938
700 Thomas Industries Inc. 13,738
1,090 Titanium Metals Corp. 9,265
600 TJ International Inc. 15,413
956 Tredegar Industries Inc. 21,510
200 Tremont Corporation 6,650
700 Universal Forest Products 14,044
1,000 Valmont Industries Inc. 13,875
</TABLE>
- ---------
26
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST SMALL CAP EQUITY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
1,027 Watsco Inc. $ 17,202
2,613 Wausau-Mosinee Paper Corp. 46,217
700 Webb Corp. 19,294
1,430 Wellman Inc. 14,568
700 Wolverine Tube Inc. (a) 14,700
900 Wyman Gordon Co. (a) 9,225
400 Zoltek Companies Inc. (a) 3,675
-----------
2,802,784
-----------
MINING & METALS (.8%)
4,271 Armco Inc. (a) 18,686
1,669 Asarco Inc. 25,139
10,503 Battle Mountain Gold Co. 43,325
5,941 Bethlehem Steel Corp. (a) 49,756
2,763 Ethyl Corp. 16,060
1,260 Inland Steel Industries Inc. 21,263
676 Ladish Company Inc. (a) 5,662
4,552 LTV Corp. 26,459
1,268 Metals USA Inc. (a) 12,363
859 NS Group Inc. (a) 3,812
332 Penford Corp. 5,312
1,285 Rayonier Inc. 59,030
552 Roanoke Electric Steel Corp. 8,108
700 RTI International Metals Inc. (a) 9,800
169 Schnitzer Steel Industries 2,429
1,128 Southern Peru Copper Corp. 10,646
1,600 Steel Dynamics Inc. (a) 18,800
724 WHX Corp. (a) 7,285
-----------
343,935
-----------
OIL, GAS, & OTHER ENERGY (2.7%)
600 ACX Technologies Inc. (a) 7,950
839 Arch Coal Inc. 14,368
500 Atwood Oceanics (a) 8,500
1,500 Barrett Resources Corp. (a) 36,000
400 Belco Oil & Gas Corp. (a) 2,225
1,100 Benton Oil & Gas Co. (a) 3,300
800 Berry Petroleum Co. Class A 11,350
1,000 Cabot Oil & Gas Corp. 15,000
900 Calpine Corp. (a) 22,725
200 Carbo Ceramics Inc. 3,500
2,898 Chesapeake Energy Corp. (a) 2,536
1,400 Comstock Resources Inc. (a) 4,288
1,900 Cross Timbers Oil Co. 14,250
1,000 Devon Energy Corp. 30,688
273 Dril-Quip (a) 4,846
1,100 Eastern Enterprises 48,125
2,006 EEX Corp. (a) 14,042
1,700 Equitable Resources Inc. 49,513
500 Forcenergy Inc. (a) 1,313
1,500 Forest Oil Corp. (a) 12,750
596 Friede Goldman Inc. (a) 6,780
1,200 Frontier Oil Corp. (a) 5,925
6,591 Grey Wolf Inc. (a) 5,355
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
276 Gulfmark Offshore Inc. (a) $ 4,347
1,382 Hanover Compressor Co. (a) 35,500
6,200 Harken Energy Corp. (a) 12,013
2,347 Helmerich & Payne Inc. 45,473
300 Holly Corp. 5,063
400 Houston Exploration Co. (a) 7,950
700 HS Resources Inc. (a) 5,294
707 IRI International Corp. (a) 2,828
1,200 KCS Group Inc. 3,675
6,300 Kelly Oil & Gas Corp. (a) 3,741
800 Key Energy Group Inc. (a) 3,750
900 Louis Dreyfus Natural Gas (a) 12,825
2,500 Marine Drilling Companies Inc. (a) 19,219
1,900 Meridian Resource Corp. (a) 6,056
876 Mitchell Energy & Development Corp. 10,019
1,700 Newfield Exploration Co. (a) 35,488
3,100 Newpark Resources (a) 21,119
600 North Carolina Natural Gas Corp. 19,913
900 Nuevo Energy Co. (a) 10,350
1,000 Oceaneering International Inc. (a) 15,000
678 Octel Corp. (a) 9,407
259 Omni Energy Services Corp. (a) 1,101
1,503 Oneok Inc. 54,296
2,700 Parker Drilling Co. (a) 8,606
1,500 Patterson Energy Inc. (a) 6,094
290 Penn Virginia Corp. 5,329
1,364 Pennzoil-Quaker State Co. (a) 20,205
1,630 Peoples Energy Corp. 64,996
800 Plains Resources Inc. (a) 11,250
1,798 Pogo Producing Co. 23,374
1,000 Pool Energy Services Co. (a) 10,813
2,400 Pride International Inc. (a) 16,950
1,600 Range Resources Corp. 5,500
600 RPC Inc. 4,425
200 Rutherford-Moran Oil Corp. (a) 563
4,670 Santa Fe Energy Resources Inc. (a) 34,441
600 Seacor Smit Inc. (a) 29,663
1,100 Seitel Inc. (a) 13,681
1,611 Snyder Oil Corp. 21,446
500 St. Mary Land & Exploration Co. 9,250
600 Stone Energy Corp. (a) 17,250
1,305 Superior Energy Services Inc. (a) 3,711
600 Swift Energy Co. (a) 4,425
1,035 Syntroleum Corp. (a) 6,404
1,500 Tesoro Petroleum Corp. (a) 18,188
356 Thermo Ecotek Corp. (a) 3,760
1,600 Titan Exploration Inc. (a) 10,500
1,200 Tom Brown Inc. (a) 12,038
1,200 Transmontaigne Oil Co. (a) 18,150
441 Transtexas Gas Corp. (a) 1,158
900 Trico Marine Services Inc. (a) 4,388
2,000 Tuboscope Inc. (a) 16,250
570 UTI Energy Corp. (a) 4,133
1,000 Veritas DGC Inc. (a) 13,000
</TABLE>
27-------
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST SMALL CAP EQUITY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
1,813 Vintage Pete Inc. $ 15,637
-----------
1,105,334
-----------
TECHNOLOGY (15.1%)
661 3DFX Interactive Inc. (a) 8,345
321 Aavid Thermal Technology Inc. (a) 5,417
900 Actel Corp. (a) 18,000
900 Adtran Inc. (a) 16,481
245 Advantage Learning System Inc. (a) 16,109
200 Advent Software Inc. (a) 9,425
363 Alliant Techsystems Inc. (a) 29,925
419 Alydaar Software Corp. (a) 3,457
1,753 Amkor Technology Inc. (a) 18,954
700 Amphenol Corp. (a) 21,131
560 Anacomp Inc. (a) 10,430
309 Analogic Corp. 11,626
1,000 Analysts International Corp. 19,250
1,181 Anixter International Inc. (a) 23,989
200 APEX PC Solutions Inc. (a) 5,775
1,110 Applied Micro Circuits Corp. (a) 37,705
268 Aris Corp. (a) 3,199
338 Artisan Components Inc. (a) 1,796
241 Aspec Technology Inc. (a) 316
800 Aspect Development Inc. (a) 35,450
1,100 Aspen Technology Inc. (a) 15,950
800 ATMI Inc. (a) 20,200
4,176 Aura Systems Inc. (a) 4,176
1,400 Avanti Corp. (a) 22,400
1,078 Avid Technology Inc. (a) 25,198
400 AVT Corp. (a) 11,600
1,126 Axent Technologies Inc. (a) 34,413
2,326 BEA Systems Inc. (a) 28,494
800 Bell & Howell Co. (a) 30,250
500 Benchmark Electronics Inc. (a) 18,313
800 Black Box Corp. (a) 30,300
1,300 Boole & Babbage Inc. (a) 38,269
2,500 Borland International Inc. (a) 13,750
774 Broadvision Inc. (a) 24,768
1,104 Burr Brown Corp. (a) 25,875
1,600 C-Cube Microsystems Inc. (a) 43,400
1,400 Cable Design Technologies Co. (a) 25,900
622 CD Radio Inc. (a) 21,304
300 CDW Computer Centers Inc. (a) 28,781
1,500 Cellnet Data Systems Inc. (a) 7,500
1,500 Cellstar Corporation (a) 10,219
1,400 Checkpoint Systems Inc. (a) 17,325
1,500 CHS Electronics Inc. (a) 25,406
3,100 Cirrus Logic Inc. (a) 30,419
1,000 Clarify Inc. (a) 24,438
1,100 Coherent Inc. (a) 13,681
182 Com21 Inc. (a) 3,822
1,810 Commscope Inc. (a) 30,431
600 Complete Business Solutions (a) 20,325
1,400 Compucom Systems Inc. (a) 4,900
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
1,435 Computer Horizons Corp. (a) $ 38,207
100 Computer Management Sciences (a) 1,738
900 Computer Task Group Inc. 24,413
606 Concord Communications Inc. (a) 34,391
526 Cotelligent Group Inc. (a) 11,210
1,200 CSG Systems Intl. Inc. (a) 94,800
200 Cubic Corp. 3,750
4,019 Cypress Semiconductor Corp. (a) 33,408
1,364 Dallas Semiconductor Corp. 55,583
2,300 Data General Corp. (a) 37,806
500 Data Transmission Network Corp. (a) 14,438
705 Datastream Systems Inc. (a) 8,108
569 Dataworks Corp. (a) 5,939
500 Davox Corp. (a) 3,813
300 DBT Online Inc. (a) 7,481
505 Decisionone Holdings Corp. (a) 2,399
300 Deltek Systems Inc. (a) 5,063
904 Dendrite International Inc. (a) 22,572
471 Dialogic Corp. (a) 9,258
1,800 Diamond Multimedia Systems Inc. (a) 11,475
583 Digi International Inc. (a) 6,486
2,900 Digital Microwave Corp. (a) 19,847
1,100 DII Group Inc. (a) 25,644
600 Documentum Inc. (a) 32,063
1,800 DSP Communications Inc. (a) 27,563
558 DST Sytems (a) 31,841
680 Earthlink Network Inc. (a) 38,760
2,526 Electronics For Imaging Inc. (a) 101,514
324 Engineering Animation Inc. (a) 17,496
800 Esterline Technologies Corp. (a) 17,400
1,000 ETEC Systems Inc. (a) 40,000
500 Evans & Sutherland Computer (a) 8,813
268 Excel Switching Corp. (a) 10,184
1,246 Excite Inc. (a) 52,410
588 Exodus Communications Inc. (a) 37,779
1,345 Filenet Corp. (a) 15,426
100 Forrester Research Inc. (a) 4,375
1,455 General Magic Inc. (a) 7,321
1,223 General Semiconductor Inc. (a) 10,013
387 Genesys Telecommunication Labs (a) 8,611
592 Genlyte Group Inc. (a) 11,100
900 Geotel Communications Corp. (a) 33,525
900 Gerber Scientific Inc. 21,431
2,800 Glenayre Technologies Inc. (a) 12,425
360 Great Plains Software Inc. (a) 17,370
1,949 GTECH Holdings Corp. (a) 49,943
600 HADCO Corp. (a) 21,000
1,381 Harbinger Corp. (a) 11,048
537 Harmon Industries Inc. 12,385
1,800 HMT Technology Corp. (a) 23,063
1,214 HNC Software Inc. (a) 49,091
400 HTE Inc. (a) 2,000
900 Hutchinson Technology Inc. (a) 32,063
466 Hypercom Software Corp. (a) 4,602
</TABLE>
- ---------
28
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST SMALL CAP EQUITY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
1,365 Hyperion Solutions Corp. (a) $ 24,570
320 ICON CMT Corp. (a) 5,120
452 IGEN Inc. (a) 13,843
1,900 Imation Corp. (a) 33,250
550 IMRglobal Corporation (a) 16,191
1,499 Indus International Inc. (a) 10,493
1,200 Industri-Matematik Intl. Corp. (a) 6,000
1,400 Information Resources Inc. (a) 14,263
7,217 Informix Corp. (a) 71,268
1,123 Infoseek Corp. (a) 55,448
700 Innovex Inc. 9,603
1,900 Input/Output Inc. (a) 13,894
522 INSpire Insurance Solutions (a) 9,592
3,800 Integrated Device Technology (a) 23,275
800 Integrated Process Equipment Corp. (a) 8,600
800 Integrated Systems Inc. (a) 11,950
242 Intelligroup Inc. (a) 4,326
1,979 Intergraph Corp. (a) 11,379
900 International Network Services (a) 59,850
2,400 International Rectifier Corp. (a) 23,400
520 International Telecommunication (a) 7,670
239 ISS Group Inc. (a) 13,145
2,352 ITC Deltacom Inc. (a) 35,868
1,013 Jabil Circuit Inc. (a) 75,595
600 Jack Henry & Associates Inc. 29,850
915 JDA Software Group Inc. (a) 8,864
1,700 Kemet Corp. (a) 19,125
2,523 Komag Inc. (a) 26,176
525 Kopin Corp. (a) 11,025
400 Kronos Inc. (a) 17,725
270 L-3 Communications Holdings Inc. (a) 12,572
1,059 Lattice Semiconductor Corp. (a) 48,615
802 LCC International Inc. (a) 3,008
1,700 Legato Systems Inc. (a) 112,094
1,650 Level One Communications Inc. (a) 58,575
900 Littelfuse Inc. (a) 17,325
1,600 Macromedia Inc. (a) 53,900
204 Manhattan Associates Inc. (a) 5,559
900 Manugistics Group Inc. (a) 11,250
688 Mapics Inc. (a) 11,352
2,508 Mark IV Industries Inc. 32,604
800 Marshall Industrials (a) 19,600
600 Mastec Inc. (a) 12,600
941 Mastech Corp. (a) 26,936
812 MEMC Electrical Materials Inc. (a) 6,902
2,900 Mentor Graphics Corp. (a) 24,650
700 Mercury Interactive Corp. (a) 44,275
3,655 Merisel Inc. (a) 8,681
1,600 Methode Electronics 25,000
300 Metro Information Services Inc. (a) 9,000
600 Micrel Inc. (a) 33,000
900 Microage Inc. (a) 13,838
2,349 Microchip Technology Inc. (a) 86,913
513 Micromuse Inc. (a) 10,004
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
1,664 Micron Electronics Inc. (a) $ 28,808
759 Mindspring Enterprises Inc. (a) 46,346
1,412 MMC Networks Inc. (a) 18,709
234 Mobius Management Systems Inc. (a) 3,481
1,000 MRV Communications Inc. (a) 6,188
1,174 MTI Technology Corp. (a) 5,283
1,300 National Computer Systems Inc. 48,100
700 National Instruments Corp. (a) 23,888
500 Natural Microsystems Corp. (a) 3,641
935 Neomagic Corp. (a) 20,687
2,800 Network Appliance Inc. (a) 126,000
1,000 Network Equipment Technologies (a) 10,313
216 Network Solutions Inc. (a) 28,269
606 New Era of Networks Inc. (a) 26,664
500 Nichols Research Corp. (a) 10,438
475 Norstan Inc. (a) 8,431
1,576 Novellus Systems Inc. (a) 78,012
2,300 Oak Technology Inc. (a) 8,050
700 Objective Systems Integrators (a) 3,238
1,100 Open Market Inc. (a) 12,856
1,900 P-Com Inc. (a) 7,570
3,326 Pairgain Technologies Inc. (a) 25,569
400 Park Electrochemical Corp. 11,450
540 Pegasus Systems Inc. (a) 19,440
248 Pegasystems Inc. (a) 1,031
383 Peregrine Systems Inc. (a) 17,762
1,000 Photronics Inc. (a) 23,969
1,200 Pioneer Standard Electronics 11,250
1,052 Platinum Software Corp. (a) 13,479
700 Plexus Corp. (a) 23,713
1,400 PMC Sierra Inc. (a) 88,375
672 Polycom Inc. (a) 14,952
387 Pomeroy Computer Resources (a) 8,708
700 Powertel Inc. (a) 9,494
200 Powerwave Technologies Inc. (a) 3,725
1,500 Premiere Technologies Inc. (a) 11,063
1,100 Premisys Communications Inc. (a) 10,106
958 Primark Corp. (a) 25,986
245 Primex Technologies Inc. 10,413
800 Progress Software Corp. (a) 27,000
300 Project Software & Development Inc. (a) 10,050
2,000 PSINet Inc. (a) 41,750
400 QAD Inc. (a) 1,425
382 QLogic Corporation (a) 49,994
824 QuadraMed Corp. (a) 16,892
400 Radiant Systems Inc. (a) 2,950
700 Rambus Inc. (a) 67,375
4,000 Rational Software Corp. (a) 106,000
1,235 Rayovac Corp. (a) 32,959
2,200 Read-Rite Corp. (a) 32,519
380 RealNetworks Inc. (a) 13,633
434 Recoton Corp. (a) 7,785
900 Remec Inc. (a) 16,200
1,000 Remedy Corp. (a) 13,938
</TABLE>
29-------
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST SMALL CAP EQUITY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
600 Renaissance Worldwide Inc. (a) $ 3,675
400 Rogers Corp. (a) 11,950
158 RWD Technologies Inc. (a) 3,417
2,700 S3 Inc. (a) 19,870
1,300 Safeguard Scientifics Inc. (a) 35,669
303 Sanchez Computer Associates (a) 8,863
900 Sandisk Corp. (a) 12,713
500 Sapient Corporation (a) 28,000
600 Sawtek Inc. (a) 10,500
577 SCB Computer Technology Inc. (a) 5,698
537 SCM Microsystems Inc. (a) 38,161
600 SDL Inc. (a) 23,775
1,802 Security Dynamics Technology Inc. (a) 41,446
600 Semtech Inc. (a) 21,525
2,000 Sequent Computer Systems Inc. (a) 24,125
1,200 Shiva Corp. (a) 6,788
500 Siliconix Inc. (a) 10,375
792 Sipex Corp. (a) 27,819
650 SLI Inc. (a) 18,038
1,200 Smart Modular Technology Inc. (a) 33,300
1,421 Software AG Systems Inc. (a) 25,756
722 Spectra-Physics Lasers Inc. (a) 6,859
730 Speedfam International Inc. (a) 12,501
600 Splash Technology Holdings Inc. (a) 4,463
627 Sportsline USA Inc. (a) 9,758
317 SPR Inc. (a) 5,468
388 SS&C Technologies Inc. (a) 4,802
1,078 Star Telecommunications Inc. (a) 13,138
1,700 Structural Dynamics Research (a) 33,788
3,843 Sybase Inc. (a) 28,462
751 Sykes Enterprises Inc. (a) 22,906
2,500 Symantec Corp. (a) 54,375
359 Syntel Inc. (a) 4,061
1,700 System Software Associates Inc. (a) 11,953
1,600 Systems & Computer Technology (a) 22,000
1,088 Tava Technologies Inc. (a) 8,296
1,900 Technology Solutions Co. (a) 20,366
1,554 Tekelec (a) 25,738
381 Telegroup Inc. (a) 500
1,033 Teletech Holdings Inc. (a) 10,588
700 Telxon Corp. (a) 9,713
225 Thermo Bioanalysis Corp. (a) 2,981
100 Thermo Optek Corp. (a) 869
200 Thermoquest Corp. (a) 2,588
400 Thermotrex Corp. (a) 3,425
400 Transaction Network Services (a) 8,025
1,246 Transaction Systems Architects (a) 62,300
1,000 Trimble Navigation Ltd. (a) 7,250
1,100 Unitrode Corp. (a) 19,250
292 US LEC Corp. (a) 4,325
2,783 US Web Corp. (a) 73,402
1,161 USN Communications Inc. (a) 218
2,000 Vanstar Corp. (a) 18,500
1,272 Vantive Corp. (a) 10,176
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
276 Verio Inc. (a) $ 6,176
206 Verisign Inc. (a) 12,180
900 Viasoft Inc. (a) 6,300
2,392 Vishay Intertechnology Inc. (a) 34,684
1,200 Visio Corp. (a) 43,875
951 Visual Networks Inc. (a) 35,663
1,981 VLSI Technology Inc. (a) 21,667
700 VWR Scientific Products Corp. (a) 12,163
2,004 Wallace Computer Services Inc. 52,856
2,200 Wang Laboratories Inc. (a) 61,050
763 Waverphore Inc. (a) 6,128
600 Westell Technologies Inc. (a) 2,925
1,300 Whittman-Hart Inc. (a) 35,913
1,000 Wind River Systems Inc. (a) 47,000
1,200 World Access Inc. (a) 25,650
1,100 Xircom Inc. (a) 37,400
1,500 Xylan Corp. (a) 26,344
1,100 Zebra Technologies Corp. (a) 31,625
-----------
6,278,675
-----------
TRANSPORTATION (4.3%)
1,300 AAR Corp. 31,038
900 Aftermarket Technology Corp. (a) 7,088
1,558 Air Express International Corp. 33,887
500 Airnet Systems Inc. (a) 7,188
2,523 Airtran Holdings Inc. (a) 6,623
1,224 Alaska Air Group Inc. (a) 54,162
1,875 Alexander & Baldwin 43,594
1,900 America West Holding Corp. (a) 32,300
900 American Freightways Corp. (a) 10,378
173 Amtran Inc. (a) 4,693
683 AO Smith Corp. 16,776
900 Arctic Cat Inc. 9,169
900 Arnold Industries Inc. 14,513
1,000 ASA Holdings Inc. 30,500
532 Atlantic Coast Airlines Hldgs. (a) 13,300
400 Atlas Air Inc. (a) 19,575
800 Aviall Inc. (a) 9,400
1,269 Avis Rent A Car Inc. (a) 30,694
400 Avondale Industries Inc. (a) 11,600
652 Barnes Group Inc. 19,153
1,300 BE Aerospace Inc. (a) 27,300
700 Breed Technologies Inc. (a) 5,731
1,929 CH Robinson Worldwide Inc. 50,033
600 Circle International Group Inc. 12,300
1,111 Coach USA Inc. (a) 38,538
800 Coachmen Industries Inc. 21,000
1,000 Consolidated Freightways Corp. (a) 15,875
400 Covenant Transport Inc. (a) 7,150
423 Dispatch Management Services Corp. (a) 1,718
400 Eagle USA Airfreight Inc. (a) 9,800
500 Excel Industries Inc. 8,750
900 Exide Corp. 14,625
1,200 Expeditors International 50,400
</TABLE>
- ---------
30
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST SMALL CAP EQUITY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
500 Florida East Coast Industries $ 17,594
1,100 Fritz Companies Inc. (a) 11,894
3,400 Gentex Corp. (a) 68,000
229 Greenbrier Companies Inc. 3,235
2,800 Greyhound Lines Inc. (a) 16,625
1,352 Halter Marine Group Inc. (a) 6,591
825 Hayes Lemmerz International (a) 24,905
800 Heartland Express Inc. (a) 14,000
600 Hvide Marine Inc. (a) 3,000
1,000 JB Hunt Transport Service Inc. 23,000
934 Kirby Corp. (a) 18,622
738 Kitty Hawk Inc. (a) 8,118
250 Knight Transportation Inc. (a) 6,672
500 Landstar Systems Inc. (a) 20,375
1,688 Mascotech Inc. 28,907
1,089 Mesa Air Group Inc. (a) 8,508
550 Mesaba Holdings Inc. (a) 11,344
650 Midwest Express Holdings Inc. (a) 17,103
1,700 Miller Industrials Inc. (a) 7,650
1,000 Modine Manufacturing Co. 36,250
800 Motivepower Industries Inc. (a) 25,750
400 MS Carriers Inc. (a) 13,175
868 Myers Industries Inc. 24,847
1,600 Newport News Shipbuilding Inc. 53,500
600 O'Reilly Automotive Inc. (a) 28,350
1,000 Offshore Logistics Inc. (a) 11,875
1,300 Overseas Shipholding Group Inc. 20,881
900 Pittston Burlington Group 10,013
1,084 Polaris Industries Inc. 42,479
721 Roadway Express Inc. 10,409
700 Simpson Industries Inc. 6,781
500 Skyline Corp. 16,250
990 Skywest Inc. 32,361
1,400 SPX Corp. (a) 93,800
500 Standard Motor Products Inc. 12,125
700 Standard Products Co. 14,263
1,000 Superior Industries Intl. Inc. 27,813
1,150 Swift Transportation Inc. (a) 32,236
300 Thor Industries Inc. 7,650
700 Titan International Inc. 6,650
2,196 Tower Automotive Inc. (a) 54,763
2,700 Trans World Airlines Inc. (a) 12,994
1,200 US Freightways Corp. 34,950
1,100 Wabash National Corp. 22,344
1,300 Werner Enterprises Inc. 22,994
831 Westinghouse Air Brake Co. 20,308
600 Winnebago Industries Inc. 9,075
2,373 Wisconsin Central Transportation Corp. (a) 40,786
697 Wynns International Inc. 15,421
1,100 Yellow Corp. (a) 21,038
-----------
1,767,125
-----------
UTILITIES & ENERGY (6.8%)
900 Aerial Communications Inc. (a) 5,288
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
2,700 AGL Resources Inc. $ 62,269
1,700 Aliant Communications Inc. 69,488
700 American Mobile Satellite Corp. (a) 3,675
300 Aquarion Co. 12,300
200 Aquila Gas Pipeline Corp. 1,713
1,278 Associated Group Inc. Class A (a) 54,954
1,400 Atmos Energy Corp. 45,150
600 Bay State Gas Co. 23,888
1,050 Black Hills Corp. 27,694
500 California Water Service Group 15,656
500 Cellular Communications (a) 9,250
700 Cellular Communications Intl. (a) 47,600
700 Centennial Cellular Corp. (a) 28,700
800 Central Hudson Gas & Electric 35,800
1,500 Century Communications Corp. (a) 47,578
600 CFW Communication Co. 14,025
600 Cilcorp Inc. 36,713
1,100 Cleco Corp. 37,744
1,500 CMP Group Inc. 28,313
400 Colonial Gas Co. 13,950
970 Commnet Cellular Inc. (a) 11,883
900 Commonwealth Energy Systems 36,450
400 Commonwealth Telephone (a) 13,400
500 Connecticut Energy Corp. 15,250
400 E Town Corp. 18,950
1,000 Eastern Utilities Associates 28,250
567 Echostar Communications (a) 27,429
2,600 El Paso Electric Co. (a) 22,750
800 Empire District Electric Co. 19,800
1,200 Energen Corp. 23,400
1,600 General Communications Inc. (a) 6,500
1,500 Hawaiian Electric Industries 60,375
1,709 Idacorp Inc. 61,844
1,400 Indiana Energy Inc. 34,475
1,218 IXC Communications Inc. (a) 40,955
700 Jones Intercable Inc. (a) 24,938
800 Laclede Gas Co. 21,400
2,200 Lincoln Electric Holdings 48,950
800 Madison Gas & Electric Co. 18,200
2,500 MDU Resources Group Inc. 65,781
1,700 Minnesota Power Inc. 74,800
2,400 Nevada Power Co. 62,400
800 New Jersey Resources Corp. 31,600
700 North Pittsburgh Systems Inc. 9,363
1,200 Northwest Natural Gas Co. 31,050
1,100 Northwestern Corp. 29,081
1,913 NTL Inc. (a) 107,965
600 NUI Corp. 16,088
1,500 Omnipoint Corp. (a) 13,969
600 Orange & Rockland Utilities 34,200
600 Otter Tail Power Co. 23,925
400 Pacific Gateway Exchange Inc. (a) 19,225
1,650 PageMart Wireless Inc. (a) 9,178
500 Pennsylvania Enterprises Inc. 12,750
</TABLE>
31-------
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST SMALL CAP EQUITY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
1,100 Philadelphia Suburban Corp. $ 32,519
1,400 Piedmont Natural Gas Inc. 50,575
986 Primus Telecommunications (a) 16,269
1,900 Public Service Co. 38,831
900 Public Service Company NC Inc. 23,400
1,600 RCN Corp. (a) 28,300
1,800 Rochester Gas & Electric Corp. 56,250
2,986 Seagull Energy Corp. (a) 18,849
720 Semco Energy Inc. 11,745
1,400 Sierra Pacific Resources 53,200
1,100 Sigcorp Inc. 39,256
2,773 Skytel Inc. (a) 61,353
900 Smartalk Teleservices Inc. (a) 2,391
400 South Jersey Industries Inc. 10,475
835 Southern Union Co. (a) 20,353
1,400 Southwest Gas Corp. 37,625
1,200 Southwestern Energy Co. 9,000
2,800 TCI Satellite Entertainment (a) 4,025
1,766 Tel-Save Holdings Inc. (a) 29,581
500 TNP Enterprises Inc. 18,969
1,500 UGI Corp. 35,625
1,500 Unisource Energy Corp. Holding Co. (a) 20,250
700 United Illuminating Co. 36,050
1,836 United International Holdings (a) 35,343
1,600 United States Satellite (a) 22,000
1,300 United Water Resources Inc. 31,119
1,180 Vanguard Cellular Systems Inc. (a) 30,459
2,100 Washington Gas Light Co. 56,963
2,600 Washington Water Power Co. 50,050
900 Western Gas Resources Inc. 5,175
3,500 Western Wireless Corp. (a) 77,000
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE
- ---------- -----------
<C> <S> <C>
1,700 Wicor Inc. $ 37,081
1,976 Winstar Communications Inc. (a) 77,064
1,200 WPS Resources Corp. 42,300
500 Yankee Energy Systems Inc. 14,563
-----------
2,832,330
-----------
TOTAL COMMON STOCKS
(cost $40,897,974) 39,853,633
SHORT-TERM INVESTMENTS (4.4%)
$1,851,000 U.S. Treasury Bills, 4.340% and 4.400%, January,
1999 to February, 1999 (cost $1,843,504) 1,844,303
-----------
TOTAL INVESTMENTS (100.2%)
(cost $42,741,478) 41,697,936
LIABILITIES, LESS CASH AND
OTHER ASSETS (-0.2%) (72,500)
-----------
NET ASSETS (100.0%) $41,625,436
-----------
-----------
</TABLE>
Notes:
(a) Non-income producing security.
At December 31, 1998, net unrealized depreciation of $1,043,542 consisted of
gross unrealized appreciation of $4,972,058 and gross unrealized depreciation of
$6,015,600 based on cost of $42,741,478 for federal income tax purposes.
See accompanying notes to financial statements.
- ---------
32
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST INTERNATIONAL EQUITY INDEX FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
COMMON STOCKS (96.4%)
AUSTRALIA (2.2%)
2,500 Amcor Ltd. (a) $ 10,692
MISCELLANEOUS FOOD PREPARATIONS
32,000 Ashton Mining Limited (a) 16,096
METAL MINING SERVICES
18,700 Australian National Industries 13,191
ENGINEERING, ARCHITECTURAL, AND SURVEYING SERVICES
2,500 Brambles Industries Ltd. 60,953
MISCELLANEOUS TRANSPORTATION SERVICES
19,935 Broken Hill Proprietary (a) 146,961
BITUMINOUS COAL AND LIGNITE MINING
7,005 Coca-Cola 26,123
BEVERAGES
13,000 Coles Myer Ltd. (a) 68,175
RETAIL STORES
44,700 Crown Limited (a) 16,722
HOTELS AND MOTELS
16,700 CSR Ltd. 40,870
CONSTRUCTION AND MINING MACHINERY & EQUIPMENT
25,900 Fosters Brewing Group Ltd. 70,217
MISCELLANEOUS NON-DURABLE GOODS
21,900 Great Central Mines NL (a) 15,715
GOLD AND SILVER ORES
7,449 ICI Australia (a) 38,790
CHEMICALS AND ALLIED PRODUCTS
6,186 Lend Lease Corporation Ltd. (a) 83,473
ENGINEERING, ARCHITECTURAL, AND SURVEYING SERVICES
64,700 MIM Holdings Limited (a) 28,572
METAL MINING SERVICES
15,971 National Australia Bank Ltd. 240,982
FOREIGN BANKING
9,900 Newcrest Mining Limited (a) 13,735
GOLD AND SILVER ORES
17,628 News Corporation Ltd. (a) 116,556
MISCELLANEOUS PUBLISHING
26,671 Normandy Mining Limited (a) 24,703
GOLD AND SILVER ORES
8,700 North Limited 14,194
BITUMINOUS COAL AND LIGNITE MINING
21,200 Pacific Dunlop 34,329
MISCELLANEOUS MANUFACTURING INDUSTRIES
17,000 Pioneer International Ltd. (a) 35,974
CONSTRUCTION AND MINING MACHINERY & EQUIPMENT
5,300 Rio Tinto Ltd. 62,919
BITUMINOUS COAL AND LIGNITE MINING
11,500 Santos Ltd. 30,895
CRUDE PETROLEUM AND NATURAL GAS
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
47,700 Telstra Corporation $ 223,231
COMMUNICATIONS SERVICES
12,830 Western Mining Corp. Holding Ltd. (a) 38,717
METAL MINING SERVICES
29,748 Westfield Trust (a) 65,687
TRUSTS
963 Westfield Trust New Units (a) 2,036
TRUSTS
18,500 Westpac Banking Corp. 123,911
FOREIGN BANKING
-----------
1,664,419
-----------
AUSTRIA (.3%)
840 Bank Austria AG 42,738
FOREIGN BANKING
360 OEMV AG (a) 33,948
MISCELLANEOUS PRODUCTS OF PETROLEUM AND COAL
750 Oest Elektrizatswirts Class A (a) 114,695
NONCLASSIFIABLE ESTABLISHMENTS
360 VA Technologie AG (a) 31,213
MACHINERY, EQUIPMENT, AND SUPPLIES
-----------
222,594
-----------
BELGIUM (1.6%)
300 Barco NV (a) 84,709
ELECTRIC SERVICES
150 Bekaert SA (a) 74,667
ELECTRIC SERVICES
750 Cimenteries CBR Cementbed (a) 74,230
CONSTRUCTION AND MINING MACHINERY & EQUIPMENT
1,020 Delhaize LE PS (a) 90,264
RETAIL STORES
300 Electrabel 131,867
ELECTRIC SERVICES
300 Fortis AG (a) 108,725
INSURANCE CARRIERS
750 GBL Group BXL Lamb (a) 152,826
HOLDING OFFICES
700 NV Union Miniere SA (a) 26,653
METALS AND MINERALS, EXCEPT PETROLEUM
360 Petrofina SA NPV (a) 165,052
CRUDE PETROLEUM AND NATURAL GAS
1,075 Reunies Electrobel & Tractebel 208,724
ELECTRIC, GAS, AND OTHER UTILITY SERVICES
1,325 Solvay Et Cie 'A' NPV (a) 99,897
CHEMICALS AND ALLIED PRODUCTS
-----------
1,217,614
-----------
</TABLE>
33-------
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST INTERNATIONAL EQUITY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
DENMARK (1.1%)
160 D/S 1912 'B' (a) $ 111,875
SERVICES INCIDENTAL TO WATER TRANSPORTATION
80 D/S Svendborg 'B' (a) 81,078
SERVICES INCIDENTAL TO WATER TRANSPORTATION
1,200 Danisco 65,050
MISCELLANEOUS MANUFACTURING INDUSTRIES
600 Den Danske Bank (a) 80,605
FOREIGN BANKING
700 Novo Nordisk A/S-B 92,390
DRUGS
2,400 Tele Danmark - B (a) 323,929
TELEPHONE COMMUNICATIONS
1,400 Unidanmark (a) 126,486
FOREIGN BANKING
-----------
881,413
-----------
FINLAND (1.3%)
2,800 Kesko OY Osake (a) 42,028
MISCELLANEOUS BUSINESS SERVICES
15,000 Merita Ltd. - A (a) 95,392
FOREIGN BANKING
3,800 Nokia OY 465,310
COMMUNICATIONS EQUIPMENT
1,600 Nokia OYJ - K Shares 195,920
COMMUNICATIONS EQUIPMENT
3,400 Outokumpo OY 31,426
ENGINEERING, ARCHITECTURAL, AND SURVEYING SERVICES
2,000 Sampo Insurance Co. 76,433
INSURANCE AGENTS, BROKERS, AND SERVICE
3,000 UPM-Kymmene (a) 84,135
PAPER AND PAPER PRODUCTS
-----------
990,644
-----------
FRANCE (8.7%)
400 Accor French (a) 86,645
SERVICES
675 Air Liquide French 123,859
MISCELLANEOUS CHEMICAL PRODUCTS
2,000 Alcatel 244,898
COMMUNICATIONS SERVICES
3,010 AXA Company 436,466
INSURANCE AGENTS, BROKERS, AND SERVICE
2,223 Banque National De Paris 183,141
COMMERCIAL BANKS
700 BIC 38,847
MISCELLANEOUS NON-DURABLE GOODS
325 Bouygues 67,025
MISCELLANEOUS BUSINESS SERVICES
400 Canal Plus 109,201
RADIO AND TELEVISION BROADCASTING STATIONS
390 Carrefour Supermarche 294,559
GROCERY STORES
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
800 Compagnie De Saint Goban $ 112,997
CONSTRUCTION AND MINING MACHINERY & EQUIPMENT
2,900 ELF-Aquitaine 335,374
OIL AND GAS FIELD SERVICES
300 Eridania Beghin Say 51,933
MISCELLANEOUS FOOD PREPARATIONS
130 Essilor International (a) 51,199
MISCELLANEOUS NON-DURABLE GOODS
10,100 France Telecom SA (a) 802,791
TELEPHONE COMMUNICATIONS
600 Groupe Danone 171,858
MISCELLANEOUS FOOD PREPARATIONS
500 Imetal (a) 50,125
CONSTRUCTION AND MINING MACHINERY & EQUIPMENT
710 L'Oreal (a) 513,497
MISCELLANEOUS NON-DURABLE GOODS
1,015 Lafarge Coppee French (a) 96,485
CONSTRUCTION AND MINING MACHINERY & EQUIPMENT
1,400 Lagardere Group 59,524
MISCELLANEOUS BUSINESS SERVICES
300 LeGrand (a) 79,538
MISCELLANEOUS DURABLE GOODS
820 LVMH Company (a) 162,356
MISCELLANEOUS FOOD PREPARATIONS
1,250 Michelin B French 50,013
MOTOR VEHICLES AND MOTOR VEHICLE EQUIPMENT
1,515 Paribas 131,728
FOREIGN BANKING
900 Pernod-Ricard (a) 58,485
MISCELLANEOUS FOOD PREPARATIONS
1,350 Pinault-Printemps-Redoute SA 258,109
DEPARTMENT STORES
180 Promodes 130,956
GROCERY STORES
675 Peugeot SA (a) 104,525
MOTOR VEHICLES AND MOTOR VEHICLE EQUIPMENT
3,250 Rhone Polenc 167,329
DRUGS
100 Sagem SA 66,237
MISCELLANEOUS DURABLE GOODS
950 Sanofi SA 156,462
DRUGS
1,500 Schneider SA 91,031
MISCELLANEOUS DURABLE GOODS
1,000 Seita (a) 62,657
MISCELLANEOUS FOOD PREPARATIONS
500 Sidel 42,427
MISCELLANEOUS DURABLE GOODS
</TABLE>
- ---------
34
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST INTERNATIONAL EQUITY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
750 Societe Generale - A $ 121,509
FOREIGN BANKING
400 Sodexho Alliance (a) 89,509
SERVICES
1,450 Suez Lyonnaise Des Eaux-Dumex 297,995
MISCELLANEOUS BUSINESS SERVICES
1,000 Thomson CSF (a) 42,964
MISCELLANEOUS DURABLE GOODS
2,400 Total SA - Series B (a) 243,179
ELECTRIC, GAS, AND OTHER UTILITY SERVICES
2,400 Usinor Sacilor (a) 26,659
STEEL WORKS
960 Valeo 75,686
MOTOR VEHICLES AND MOTOR VEHICLE EQUIPMENT
1,550 Vivendi 402,345
SANITARY SERVICES
-----------
6,692,123
-----------
GERMANY (11.6%)
800 Adidas Salomon AG 86,940
MISCELLANEOUS TEXTILE GOODS
2,599 Allianz AG Holding 953,447
INSURANCE AGENTS, BROKERS, AND SERVICE
335 AXA Colonia Konzern AG 38,015
INSURANCE AGENTS, BROKERS, AND SERVICE
8,650 BASF AG 330,050
PLASTICS MATERIALS AND SYNTHETIC RESINS, SYNTHETIC
9,650 Bayer AG 405,288
CHEMICALS AND ALLIED PRODUCTS
6,786 Bayerische Hypo Vereinsbank 537,005
FOREIGN BANKING
1,500 Beiersdorf (a) 103,121
CHEMICALS AND ALLIED PRODUCTS
11,508 Daimler Chrysler AG 1,136,619
MOTOR VEHICLES, PARTS AND SUPPLIES
1,190 Degussa 65,733
CHEMICAL AND FERTILIZER MINERAL MINING
5,400 Deutsche Bank AG 318,645
FOREIGN BANKING
27,950 Deutsche Telekom AG 918,786
TELEPHONE COMMUNICATIONS
6,400 Dresdner Bank AG (a) 268,984
FOREIGN BANKING
750 Heidelberger Zement AG (a) 58,990
CONSTRUCTION AND MINING MACHINERY & EQUIPMENT
925 Hochtief AG 36,377
CONSTRUCTION AND MINING MACHINERY & EQUIPMENT
125 Karstadt AG (a) 65,445
MISCELLANEOUS NON-DURABLE GOODS
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
100 Linde AG $ 60,642
MACHINERY, EQUIPMENT, AND SUPPLIES
4,120 Lufthansa AG (a) 91,403
AIR TRANSPORTATION & COURIER SERVICES
350 MAN AG (a) 104,021
MACHINERY, EQUIPMENT, AND SUPPLIES
4,550 Mannesmann AG 521,788
GENERAL INDUSTRIAL MACHINERY AND EQUIPMENT
1,850 Merck KGAA 83,307
CHEMICALS AND ALLIED PRODUCTS
3,450 Metro AG (a) 271,356
MISCELLANEOUS NON-DURABLE GOODS
785 Muenchener Rueckversicherungs Namensaktie 384,128
INSURANCE CARRIERS
195 Preussag AG 88,630
STEEL WORKS
4,150 RWE AG 229,237
MISCELLANEOUS MANUFACTURING INDUSTRIES
660 SAP AG 285,315
COMPUTER PROGRAMMING & DATA PROCESSING
720 Schering AG (a) 90,566
CHEMICALS AND ALLIED PRODUCTS
400 SGL Carbon AG (a) 24,016
CHEMICALS AND ALLIED PRODUCTS
7,100 Siemens AG 458,264
MISCELLANEOUS MANUFACTURING INDUSTRIES
550 Thyssen AG (a) 104,021
MISCELLANEOUS MANUFACTURING INDUSTRIES
5,750 VEBA AG 340,748
MISCELLANEOUS MANUFACTURING INDUSTRIES
250 VIAG AG (a) 147,851
UTILITIES REGULATION AND ADMINISTRATION
3,250 Volkswagen AG 259,528
MOTOR VEHICLE DEALERS
-----------
8,868,266
-----------
HONG KONG (1.8%)
16,800 Bank of East Asia Hong Kong (a) 29,276
MISCELLANEOUS INVESTING
44,000 Cathay Pacific Airways Ltd. (a) 43,732
AIR TRANSPORTATION & COURIER SERVICES
20,000 Cheung Kong 143,926
REAL ESTATE AGENTS AND MANAGERS
10,000 Chinese Estates (Warrants) (a) 388
FEDERAL AND FEDERALLY-SPONSORED CREDIT AGENCIES
10,000 Chinese Estates HL (Warrants) (a) 441
FEDERAL AND FEDERALLY-SPONSORED CREDIT AGENCIES
172,000 Chinese Estates HL - C (a) 25,095
REAL ESTATE AGENTS AND MANAGERS
</TABLE>
35-------
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST INTERNATIONAL EQUITY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
22,000 CLP Holdings Limited (a) $ 109,617
UTILITIES REGULATION AND ADMINISTRATION
16,000 Hang Seng Bank (a) 143,022
FOREIGN BANKING
42,900 Hong Kong & China Gas 54,547
GAS PRODUCTION AND DISTRIBUTION
1,950 Hong Kong & China Gas (Warrants) (a) --
MOTOR VEHICLE DEALERS
78,400 Hong Kong Telecom 137,129
COMMUNICATIONS EQUIPMENT
30,000 Hutchison Whampoa 212,016
MISCELLANEOUS BUSINESS SERVICES
13,000 Hysan Development (a) 19,382
REAL ESTATE AGENTS AND MANAGERS
42,000 New World Development (a) 105,718
REAL ESTATE AGENTS AND MANAGERS
74,000 Sino Land Company (a) 39,642
REAL ESTATE AGENTS AND MANAGERS
27,000 Sun Hung Kai Properties 196,914
REAL ESTATE AGENTS AND MANAGERS
17,000 Swire Pacific Ltd. - A (a) 76,145
MISCELLANEOUS BUSINESS SERVICES
1,250 Wharf Holdings (Warrants) (a) 103
REAL ESTATE AGENTS AND MANAGERS
39,000 Wharf Holdings Ltd. (a) 56,885
REAL ESTATE AGENTS AND MANAGERS
-----------
1,393,978
-----------
IRELAND (.5%)
10,593 Allied Irish Bank PLC 188,936
FOREIGN BANKING
4,700 CRH PLC 79,763
CONSTRUCTION AND MINING MACHINERY & EQUIPMENT
9,071 Irish Life PLC (a) 85,725
INSURANCE AGENTS, BROKERS, AND SERVICE
14,550 Jefferson Smurfit Group 26,250
PAPER AND PAPER PRODUCTS
-----------
380,674
-----------
ITALY (5.7%)
10,360 Assicurazione Generali ITL (a) 433,528
ACCIDENT AND HEALTH INSURANCE AND MEDICAL SERVICE
35,500 Banca Commerciale Italiana 245,436
UTILITIES REGULATION AND ADMINISTRATION
27,000 Banca Intesa SPA 162,354
FOREIGN BANKING
29,000 Benetton Group 58,565
APPAREL, PIECE GOODS, AND NOTIONS
10,000 Edison SPA (a) 118,049
COMMUNICATIONS SERVICES
95,600 ENI SPA 626,170
RETAIL STORES
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
56,000 FIAT SPA (a) $ 194,942
RETAIL STORES
39,900 Istituto Nazionale Delle Assic (a) 105,623
UTILITIES REGULATION AND ADMINISTRATION
12,000 Italgas (a) 65,099
COMMUNICATIONS SERVICES
14,200 Mediaset SPA 115,399
RADIO AND TELEVISION BROADCASTING STATIONS
8,420 Mediobanca Banca Di Credito 117,193
COMMERCIAL BANKS
1,320 Mediobanca SPA (Warrants) (a) 4,795
COMMERCIAL BANKS
62,000 Montedison SPA 82,534
RETAIL STORES
27,900 Parmalat Finanziaria (a) 53,468
OTHER
26,000 Pirelli SPA (a) 83,491
RETAIL STORES
4,550 RAS SPA 66,088
UTILITIES REGULATION AND ADMINISTRATION
19,060 San Paolo - IMI SPA 337,532
COMMERCIAL BANKS
8,500 Sirti SPA (a) 51,395
RETAIL STORES
81,100 Telecom Italia Mobile 600,051
COMMUNICATIONS SERVICES
15,900 Telecom Italia Mobile - DRNC (a) 75,021
COMMUNICATIONS SERVICES
46,700 Telecom Italia SPA 399,341
COMMUNICATIONS SERVICES
9,600 Telecom Italia SPA - RNC 60,550
COMMUNICATIONS SERVICES
50,000 Unicredito Italiano SPA 297,020
UTILITIES REGULATION AND ADMINISTRATION
39,900 Unione Immobilistr (a) 20,860
REAL ESTATE OPERATORS AND LESSORS
-----------
4,374,504
-----------
JAPAN (19.7%)
2,000 ACOM Company Ltd. (a) 128,727
MISCELLANEOUS BUSINESS SERVICES
990 Advantest Corp. (a) 62,842
ELECTRICAL INDUSTRIAL APPARATUS
6,000 Ajinomoto Company Inc. (a) 63,832
MISCELLANEOUS FOOD PREPARATIONS
3,000 Alps Electronics Co. (a) 55,188
ELECTRICAL INDUSTRIAL APPARATUS
600 Aoyama Trading (a) 16,809
RETAIL STORES
18,000 Asahi Bank Ltd. (a) 66,065
FOREIGN BANKING
5,000 Asahi Breweries Ltd. (a) 73,805
MISCELLANEOUS FOOD PREPARATIONS
</TABLE>
- ---------
36
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST INTERNATIONAL EQUITY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
15,000 Asahi Chemical Industry Co. (a) $ 71,677
CHEMICALS AND ALLIED PRODUCTS
7,000 Bridgestone Corp. 159,180
MORTGAGE BANKERS AND BROKERS
8,000 Canon Inc. 171,282
ELECTRICAL INDUSTRIAL APPARATUS
10,000 Chiba Bank (a) 39,806
FOREIGN BANKING
8,000 Chiyoda Corp. (a) 15,249
CONSTRUCTION AND MINING MACHINERY & EQUIPMENT
6,000 Citizen Watch Company Ltd. (a) 36,171
MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT, AND
1,700 Credit Saison (a) 41,974
RETAIL STORES
1,000 CSK Corp. (a) 23,050
SERVICES
6,000 Dai Nippon Ink & Chemical Inc. (a) 16,436
CHEMICALS AND ALLIED PRODUCTS
7,000 Dai Nippon Printing Company Ltd. 111,830
MISCELLANEOUS MANUFACTURING INDUSTRIES
11,000 Dai Nippon Screen (a) 27,501
ELECTRICAL INDUSTRIAL APPARATUS
10,000 Daido Steel Co. (a) 13,210
STEEL WORKS
8,000 Daiei Inc. (a) 21,774
RETAIL STORES
5,000 Daiichi Pharmaceutical (a) 84,622
DRUGS, DRUG PROPRIETORS, AND DRUGGIST SUNDRIES
7,000 Daimaru Inc. (a) 21,100
RETAIL STORES
8,000 Denso Corporation 148,231
MISCELLANEOUS TRANSPORTATION EQUIPMENT
10,000 Daiwa House Industry (a) 106,652
CONSTRUCTION AND MINING MACHINERY & EQUIPMENT
16,000 Diawa Securities (a) 54,754
MISCELLANEOUS INVESTING
40 East Japan Rail (a) 223,766
MISCELLANEOUS TRANSPORTATION SERVICES
4,000 Ebaba Corporation (a) 34,504
MACHINERY, EQUIPMENT, AND SUPPLIES
3,000 Eisai Company Ltd. 58,512
DRUGS, DRUG PROPRIETORS, AND DRUGGIST SUNDRIES
2,200 Fanuc Co. 75,481
ELECTRICAL INDUSTRIAL APPARATUS
32,000 Fuji Bank (a) 118,019
FOREIGN BANKING
5,000 Fuji Photo Film 186,176
MOTION PICTURE PRODUCTION AND ALLIED SERVICES
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
5,000 Fujikura Ltd. (a) $ 26,863
NONFERROUS FOUNDRIES (CASTING)
20,000 Fujitsu Ltd. (a) 266,852
COMMUNICATIONS EQUIPMENT
8,000 Furkukawa Electric (a) 27,306
NONFERROUS FOUNDRIES (CASTING)
10,000 Gakken 9470 (a) 11,525
MISCELLANEOUS MANUFACTURING INDUSTRIES
7,000 Gunma Bank (a) 55,667
FOREIGN BANKING
27,000 Haseko Corporation (a) 13,643
CONSTRUCTION AND MINING MACHINERY & EQUIPMENT
28,000 Hitachi Ltd. 173,765
ELECTRICAL INDUSTRIAL APPARATUS
8,000 Honda Motor Company Ltd. 263,129
MOTOR VEHICLES AND MOTOR VEHICLE EQUIPMENT
1,000 Hoya Corp. (a) 48,760
ANALYTICAL, OPTICAL, MEASURING & CONTROLLING
INSTRUMENTS
29,000 Industrial Bank of Japan 133,948
FOREIGN BANKING
3,000 ITO Yokado Co. 210,113
RETAIL STORES
22,000 Itochu Corp. (a) 42,519
MISCELLANEOUS DURABLE GOODS
15,000 Japan Airlines (a) 39,629
AIR TRANSPORTATION & COURIER SERVICES
10,000 Joyo Bank (a) 39,186
FOREIGN BANKING
3,000 Jusco Co. 60,773
RETAIL STORES
11,000 Kajima Corp. (a) 28,768
CONSTRUCTION AND MINING MACHINERY & EQUIPMENT
7,600 Kansai Electric Power (a) 166,760
ELECTRIC SERVICES
6,000 KAO Corp. 135,643
CHEMICALS AND ALLIED PRODUCTS
22,000 Kawasaki Heavy Industries (a) 51,687
MISCELLANEOUS TRANSPORTATION EQUIPMENT
27,000 Kawasaki Steel (a) 40,454
STEEL WORKS
4,000 Kinden Corporation (a) 60,924
CONSTRUCTION AND MINING MACHINERY & EQUIPMENT
15,000 Kinki Nippon Railway (a) 80,454
MISCELLANEOUS TRANSPORTATION SERVICES
11,000 Kirin Brewery Company Ltd. (a) 140,429
MISCELLANEOUS FOOD PREPARATIONS
10,000 Komatsu Ltd. (a) 52,573
MACHINERY, EQUIPMENT, AND SUPPLIES
</TABLE>
37-------
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST INTERNATIONAL EQUITY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
18,000 Kurabo Industries (a) $ 18,511
MISCELLANEOUS TEXTILE GOODS
2,100 Kyocera Corp. 111,147
ELECTRICAL INDUSTRIAL APPARATUS
12,000 Kyowa Hakko Kogyo (a) 59,364
CHEMICALS AND ALLIED PRODUCTS
21,000 Marubeni Corp. (a) 36,118
SERVICES
4,000 Marui Co. (a) 77,130
RETAIL STORES
20,000 Matsushita Electric Industries 354,444
HOUSEHOLD AUDIO AND VIDEO EQUIPMENT
4,000 Minebea Company Ltd. (a) 45,888
MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT, AND
20,000 Mitisui OSK Lines Ltd. (a) 32,270
SERVICES INCIDENTAL TO WATER TRANSPORTATION
22,000 Mitsubishi Chemical Corp. (a) 46,420
CHEMICALS AND ALLIED PRODUCTS
14,000 Mitsubishi Corp. (a) 80,676
MISCELLANEOUS BUSINESS SERVICES
22,000 Mitsubishi Electric (a) 69,241
ELECTRICAL INDUSTRIAL APPARATUS
13,000 Mitsubishi Estate Company Ltd. (a) 116,750
REAL ESTATE OPERATORS AND LESSORS
25,000 Mitsubishi Heavy 97,520
ENGINES AND TURBINES
31,000 Mitsubishi Materials Corp. (a) 52,216
NONFERROUS FOUNDRIES (CASTING)
15,000 Mitsubishi Paper (a) 30,719
PULP MILLS
14,000 Mitsubishi Trust 90,233
FOREIGN BANKING
11,000 Mitsui & Co. 61,535
MISCELLANEOUS DURABLE GOODS
12,000 Mitsui Engineering (a) 11,915
MISCELLANEOUS TRANSPORTATION EQUIPMENT
12,000 Mitsui Fudosan 90,960
REAL ESTATE OPERATORS AND LESSORS
9,000 Mitsui Marine & Fire Insurance (a) 47,475
INSURANCE CARRIERS
7,000 Mitsui Mining & Smelting (a) 34,567
NONFERROUS FOUNDRIES (CASTING)
23,000 Mitsui Trust & Banking 26,305
FOREIGN BANKING
6,000 Mitsukoshi (a) 15,958
RETAIL STORES
2,000 Murata Manufacturing Company Ltd. (a) 83,159
ELECTRICAL INDUSTRIAL APPARATUS
5,000 Mycal Corp. (a) 29,877
RETAIL STORES
16,000 Nagoya Railroad Company Ltd. (a) 58,158
MISCELLANEOUS TRANSPORTATION SERVICES
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
16,000 NEC Corp. (a) $ 147,522
ELECTRICAL INDUSTRIAL APPARATUS
6,000 NGK Insulators Ltd. (a) 77,503
GLASS PRODUCTS
4,000 Nikon Corp. (a) 39,008
ANALYTICAL, OPTICAL, MEASURING & CONTROLLING
INSTRUMENTS
2,000 Nippon Comsys Corp. (a) 27,288
CONSTRUCTION AND MINING MACHINERY & EQUIPMENT
12,000 Nippon Express Co. (a) 67,662
MISCELLANEOUS TRANSPORTATION SERVICES
9,000 Nippon Fire & Marine Insurance (a) 33,193
INSURANCE CARRIERS
56,000 Nippon Light Metal Co. (a) 58,582
NONFERROUS FOUNDRIES (CASTING)
19,000 Nippon Oil Co. 66,367
CRUDE PETROLEUM AND NATURAL GAS
14,000 Nippon Paper Industries Co. (a) 63,797
PULP MILLS
47,000 Nippon Steel Corp. (a) 85,418
STEEL WORKS
146 Nippon Telegraph and Telephone Corp. (a) 1,128,686
COMMUNICATIONS SERVICES
17,000 Nippon Yusen Kabushiki Kaish (a) 53,805
SERVICES INCIDENTAL TO WATER TRANSPORTATION
24,000 Nissan Motors 73,620
MISCELLANEOUS TRANSPORTATION EQUIPMENT
6,000 Nisshinbo Industries Inc. (a) 20,958
MISCELLANEOUS TEXTILE GOODS
2,000 Nitto Denko Corp. (a) 33,334
ELECTRICAL INDUSTRIAL APPARATUS
67,000 NKK Corporation (a) 45,734
STEEL WORKS
19,000 Nomura Securities Company Ltd. 165,918
MISCELLANEOUS INVESTING
4,000 NSK Ltd. (a) 14,965
MACHINERY, EQUIPMENT, AND SUPPLIES
6,000 Ohbayashi-Gumi Corp. (a) 28,831
CONSTRUCTION AND MINING MACHINERY & EQUIPMENT
10,000 OJI Paper Company Ltd. (a) 52,041
PULP MILLS
3,000 Omron Corp. 41,171
ELECTRICAL INDUSTRIAL APPARATUS
3,000 Onward Kashiyama Company Ltd. (a) 40,374
MISCELLANEOUS TEXTILE GOODS
700 Orix Corp. (a) 52,377
MISCELLANEOUS BUSINESS SERVICES
25,000 Osaka Gas Company Ltd. (a) 86,218
ELECTRIC SERVICES
2,000 Pioneer Electric Corp. (a) 33,600
ELECTRICAL INDUSTRIAL APPARATUS
</TABLE>
- ---------
38
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST INTERNATIONAL EQUITY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
28,000 Renown Inc. (a) $ 17,377
MISCELLANEOUS TEXTILE GOODS
1,000 Rohm Company 91,226
ELECTRICAL INDUSTRIAL APPARATUS
39,000 Sakura Bank Ltd. (a) 89,552
FOREIGN BANKING
5,000 Sankyo Company Ltd. 109,489
DRUGS
19,000 Sanyo Electric Company Ltd. (a) 58,955
ELECTRICAL INDUSTRIAL APPARATUS
1,000 Secom Company Ltd. 82,981
ELECTRONIC COMPONENTS AND ACCESSORIES
7,000 Sekisui Chemical (a) 47,165
CHEMICALS AND ALLIED PRODUCTS
9,000 Sekisui House Ltd. (a) 95,349
CONSTRUCTION AND MINING MACHINERY & EQUIPMENT
6,000 Seventy Seven Bank (a) 60,108
FOREIGN BANKING
12,000 Sharp Corp. (a) 108,408
ELECTRICAL INDUSTRIAL APPARATUS
2,000 Shimano Industrial (a) 51,686
MISCELLANEOUS TRANSPORTATION EQUIPMENT
10,000 Shimizu Corp. (a) 33,600
CONSTRUCTION AND MINING MACHINERY & EQUIPMENT
4,000 Shin-Etsu Chemical Co. (a) 96,457
CHEMICALS AND ALLIED PRODUCTS
10,000 Shionogi & Company Ltd. (a) 73,318
DRUGS, DRUG PROPRIETORS, AND DRUGGIST SUNDRIES
4,000 Shiseido Co. (a) 51,491
CHEMICALS AND ALLIED PRODUCTS
8,000 Shizuoka Bank (a) 98,939
FOREIGN BANKING
35,000 Showa Denko KK (a) 30,720
CHEMICALS AND ALLIED PRODUCTS
3,000 Seiyu (a) 8,830
RETAIL STORES
700 SMC Corporation (a) 55,977
MACHINERY, EQUIPMENT, AND SUPPLIES
3,900 Sony Corp. 284,556
HOUSEHOLD AUDIO AND VIDEO EQUIPMENT
30,000 Sumitomo Bank (a) 308,520
FOREIGN BANKING
15,000 Sumitomo Chemical Co. (a) 58,512
CHEMICALS AND ALLIED PRODUCTS
9,000 Sumitomo Corp. (a) 43,884
SERVICES
8,000 Sumitomo Electric Industries (a) 90,145
ELECTRICAL INDUSTRIAL APPARATUS
8,000 Sumitomo Heavy Industries (a) 16,738
MACHINERY, EQUIPMENT, AND SUPPLIES
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
9,000 Sumitomo Marine & Fire (a) $ 57,129
INSURANCE CARRIERS
13,000 Sumitomo Metal (a) 42,297
NONFERROUS FOUNDRIES (CASTING)
59,000 Sumitomo Metal Industries (a) 67,478
STEEL WORKS
15,000 Taisei Corp. (a) 28,857
CONSTRUCTION AND MINING MACHINERY & EQUIPMENT
3,000 Taisho Pharmaceutical Company Ltd. (a) 82,715
DRUGS, DRUG PROPRIETORS, AND DRUGGIST SUNDRIES
1,000 Taiyo Yuden Company Ltd. (a) 11,862
ELECTRICAL INDUSTRIAL APPARATUS
8,000 Takeda Chemical Industries Ltd. 308,520
DRUGS
17,000 Teijin Limited (a) 62,698
MISCELLANEOUS TEXTILE GOODS
46,000 The Bank of Tokyo Mitsubishi 477,144
FOREIGN BANKING
15,000 Tobu Railway Company Ltd. (a) 43,884
MISCELLANEOUS TRANSPORTATION SERVICES
4,000 TOEI (a) 11,844
MOTION PICTURE PRODUCTION AND ALLIED SERVICES
600 TOHO Co. 82,343
SERVICES
4,900 Tohoku Electric Power (a) 86,882
ELECTRIC SERVICES
17,000 Tokai Bank (a) 80,481
FOREIGN BANKING
13,000 Tokio Marine & Fire Insurance (a) 155,589
INSURANCE CARRIERS
2,000 Tokyo Dome Corp. (a) 10,674
SERVICES
10,900 Tokyo Electric Power Company Inc. (a) 269,609
ELECTRIC SERVICES
2,000 Tokyo Electron Ltd. (a) 76,066
SERVICES
26,000 Tokyo Gas (a) 68,461
ELECTRIC SERVICES
4,000 Tokyo Steel Manufacturing (a) 20,072
STEEL WORKS
7,000 Tokyo Tatemono Company Ltd. (a) 11,977
REAL ESTATE OPERATORS AND LESSORS
32,000 Tokyu Corp. (a) 84,259
MISCELLANEOUS TRANSPORTATION SERVICES
9,000 Toppan Printing Co. (a) 110,110
MISCELLANEOUS MANUFACTURING INDUSTRIES
13,000 Toray Industries Inc. (a) 67,999
MISCELLANEOUS TEXTILE GOODS
3,000 Tostem Corporation (a) 59,576
METALS AND MINERALS, EXCEPT PETROLEUM
</TABLE>
39-------
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST INTERNATIONAL EQUITY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
2,000 Toyo Seikan (a) $ 34,008
METALS AND MINERALS, EXCEPT PETROLEUM
3,000 Toyoda Automatic Loom Works (a) 53,167
MISCELLANEOUS TRANSPORTATION EQUIPMENT
44,000 Toyota Motor Co. 1,197,552
MOTOR VEHICLES AND MOTOR VEHICLE EQUIPMENT
8,000 UBE Industries Ltd. (a) 12,128
CHEMICALS AND ALLIED PRODUCTS
1,000 UNI Charm (a) 46,987
CHEMICALS AND ALLIED PRODUCTS
27,000 Unitika Ltd. (a) 18,671
MISCELLANEOUS TEXTILE GOODS
3,000 UNY Company Ltd. (a) 54,922
RETAIL STORES
5,000 Wacoal Corp. 64,408
MISCELLANEOUS TEXTILE GOODS
3,000 Yamaguchi Bank (a) 28,352
FOREIGN BANKING
3,000 Yamaha Corp. 31,118
MISCELLANEOUS MANUFACTURING INDUSTRIES
4,000 Yamanouchi Pharmaceutical 129,082
DRUGS, DRUG PROPRIETORS, AND DRUGGIST SUNDRIES
5,000 Yamato Transport Company Ltd. (a) 70,038
MISCELLANEOUS TRANSPORTATION SERVICES
4,000 Yamazaki Baking Co. 52,236
MISCELLANEOUS FOOD PREPARATIONS
22,000 Yasuda Trust & Banking (a) 16,969
FOREIGN BANKING
4,000 Yokogawa Electric (a) 19,859
ELECTRICAL INDUSTRIAL APPARATUS
13,000 Yokohama Bank (a) 31,234
FOREIGN BANKING
-----------
15,119,363
-----------
NETHERLANDS (6.5%)
15,385 ABN Amro Holdings 323,822
MORTGAGE BANKERS AND BROKERS
5,000 Aegon NV 618,865
LIFE INSURANCE
2,960 AKZO Dutch ORD 134,856
MISCELLANEOUS CHEMICAL PRODUCTS
965 ASR Verzekeringsgroe 87,416
INSURANCE AGENTS, BROKERS, AND SERVICE
1,048 Buhrmann NV 18,248
PAPER AND PAPER PRODUCTS
6,690 Elsevier 93,755
MISCELLANEOUS PUBLISHING
1,055 Getronics NV 52,281
COMPUTER PROGRAMMING & DATA PROCESSING
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
4,107 Heinken NV $ 247,295
BEER, WINE, AND DISTILLED ALCOHOLIC BEVERAGES
660 IHC Caland NV 27,432
SERVICES INCIDENTAL TO WATER TRANSPORTATION
10,931 ING Groep NV 666,927
COMMERCIAL BANKS
980 KLM Royal Dutch (a) 29,661
AIR TRANSPORTATION & COURIER SERVICES
4,521 Koninklijke Ahold NV 167,188
GROCERY STORES
4,435 Koninklijke NV 222,144
TELEPHONE COMMUNICATIONS
3,125 Koninklijke Philips Electronic 209,813
ELECTRONIC COMPONENTS AND ACCESSORIES
1,480 OCE NV 53,233
COMPUTER AND OFFICE EQUIPMENT
22,835 Royal Dutch Petroleum Co. 1,137,692
OIL AND GAS FIELD SERVICES
4,435 TNT Post Group (a) 142,976
COMMUNICATIONS SERVICES
7,525 Unilever NV - CVA 643,567
MISCELLANEOUS NON-DURABLE GOODS
675 Wolters Kluwer NV 144,519
BOOKS
-----------
5,021,690
-----------
NEW ZEALAND (.1%)
64,900 Brierley Investments Ltd. (a) 14,745
MISCELLANEOUS INVESTING
12,400 Fletcher Challenge Energy (a) 23,581
OIL AND GAS FIELD SERVICES
14,500 Telecom New Zealand 63,192
ENGINEERING, ARCHITECTURAL, AND SURVEYING SERVICES
-----------
101,518
-----------
NORWAY (.3%)
9,300 Christiania BK OG Kreditkass (a) 32,225
FOREIGN BANKING
1,600 D.Y. Bergesen (a) 19,111
SERVICES INCIDENTAL TO WATER TRANSPORTATION
2,600 Norsk Hydro ASA (a) 87,705
MISCELLANEOUS BUSINESS SERVICES
2,300 Orkla AS A-Aksjer 34,264
GROCERIES AND RELATED PRODUCTS
1,200 Petroleum Geo-Services (a) 15,278
MISCELLANEOUS BUSINESS SERVICES
4,300 Storebrand ASA (a) 32,453
INSURANCE CARRIERS
-----------
221,036
-----------
</TABLE>
- ---------
40
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST INTERNATIONAL EQUITY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
PORTUGAL (.6%)
1,855 Banco Espirito Santo $ 57,575
MISCELLANEOUS INVESTING
4,100 EDP PL (a) 90,272
ELECTRIC, GAS, AND OTHER UTILITY SERVICES
1,100 Jeronimo, Martins & Filho 60,178
MISCELLANEOUS FOOD STORES
3,400 Portugal Telecom 155,893
COMMUNICATIONS SERVICES
1,300 Sonae Industria E Investimento 63,200
SERVICES
-----------
427,118
-----------
SINGAPORE (.8%)
10,000 City Developments 43,334
REAL ESTATE AGENTS AND MANAGERS
1,000 Creative Technology Limited (a) 14,122
COMPUTER PROGRAMMING & DATA PROCESSING
8,000 DBS Land Ltd. (a) 11,782
REAL ESTATE AGENTS AND MANAGERS
12,500 Development Bank of Singapore 112,881
FOREIGN BANKING
32,000 First Capital Corp. - Singapore (a) 21,334
REAL ESTATE AGENTS AND MANAGERS
14,000 Natsteel Ltd. (a) 15,358
MISCELLANEOUS MANUFACTURING INDUSTRIES
7,000 Overseas Chinese Banking Corp. 47,517
FOREIGN BANKING
14,000 Singapore Airlines Ltd. 102,669
AIR TRANSPORTATION & COURIER SERVICES
7,897 Singapore Press Holdings 85,673
NEWSPAPERS: PUBLISHING, OR PUBLISHING AND PRINTING
46,000 Singapore Telecom Ltd. 70,256
TELEPHONE COMMUNICATIONS
9,000 United Overseas Bank 57,820
FOREIGN BANKING
-----------
582,746
-----------
SPAIN (3.3%)
975 Acerinox SA (a) 22,742
METALS AND MINERALS, EXCEPT PETROLEUM
5,300 Argentaria Caja Postal Y Banco 137,465
FOREIGN BANKING
4,772 Autopistas Concesionaria (a) 79,482
AUTOMOBILE PARKING
23,305 Banco Bilbao Vizcaya SA 365,963
FOREIGN BANKING
13,566 Banco Central Hispanoamer SA 161,327
FOREIGN BANKING
11,651 Banco Santader SA 231,883
FOREIGN BANKING
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
9,235 Endesa SA $ 245,066
ELECTRIC SERVICES
1,020 Fomento De Construc Y Contra (a) 75,947
CONSTRUCTION AND MINING MACHINERY & EQUIPMENT
1,535 Gas Natural SDG SA 167,376
GAS PRODUCTION AND DISTRIBUTION
8,465 I. Iberdrola SA 158,616
ELECTRIC SERVICES
3,670 Repsol SA 196,073
OIL AND GAS FIELD SERVICES
2,800 Tabacalera SA - A 70,745
TABACCO STEMMING AND REDRYING
13,085 Telefonica 582,720
COMMUNICATIONS SERVICES
4,195 Union Electrica Fenosa SA 72,684
ELECTRIC SERVICES
-----------
2,568,089
-----------
SWEDEN (2.4%)
5,970 ABB AG Series A 63,710
ENGINEERING, ARCHITECTURAL, AND SURVEYING SERVICES
2,300 Astra AB - B 46,820
DRUGS
13,080 Astra AB A-F 267,069
DRUGS
1,500 Atlas Copco AB - A Free (a) 32,940
ENGINEERING, ARCHITECTURAL, AND SURVEYING SERVICES
223 Balder - Units (a) 2,476
REAL ESTATE OPERATORS AND LESSORS
1,800 Drott AB - B (a) 16,544
REAL ESTATE AGENTS AND MANAGERS
4,500 Electrolux Series B 77,447
HOUSEHOLD APPLIANCES
22,800 Ericsson AB - B Free 542,889
ENGINEERING, ARCHITECTURAL, AND SURVEYING SERVICES
1,100 Forenings Sparbanken (a) 28,499
FOREIGN BANKING
1,870 Hennes and Mauritz (a) 152,728
FAMILY CLOTHING STORES
5,200 Securitas AB - B 80,833
MISCELLANEOUS BUSINESS SERVICES
7,000 Skandia Forsakrings AB Free 107,087
INSURANCE AGENTS, BROKERS, AND SERVICE
6,600 Skandinaviska Enskilda Bankn - A (a) 69,619
FOREIGN BANKING
2,600 Skanska B Free (a) 72,173
REAL ESTATE AGENTS AND MANAGERS
3,000 Svenska Cellulosa AB - B (a) 65,511
OTHER
</TABLE>
41-------
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST INTERNATIONAL EQUITY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
2,230 Svenska Handelsbanken - A $ 94,091
FOREIGN BANKING
1,700 Volvo Akttiebolag - A (a) 38,067
ENGINEERING, ARCHITECTURAL, AND SURVEYING SERVICES
3,100 Volvo Akttiebolag - B Free 71,137
ENGINEERING, ARCHITECTURAL, AND SURVEYING SERVICES
-----------
1,829,640
-----------
SWITZERLAND (8.2%)
90 ABB AG 105,498
ENGINEERING, ARCHITECTURAL, AND SURVEYING SERVICES
220 Adecco SA 100,431
SERVICES
70 Alusuis-Lonza Holdings 81,545
MISCELLANEOUS MANUFACTURING INDUSTRIES
2,300 Credit Suisse Group (a) 360,034
FOREIGN BANKING
130 Gebruder Sulzer AG (a) 79,127
MACHINERY, EQUIPMENT, AND SUPPLIES
80 Holderbank Finan Glaris - B (a) 94,708
CONSTRUCTION AND MINING MACHINERY & EQUIPMENT
450 Nestle 979,627
MISCELLANEOUS FOOD PREPARATIONS
60 Novartis AG - Bearer 117,948
DRUGS
710 Novartis AG - Reg 1,395,722
DRUGS
150 Roche Holdings AG (a) 271,620
CHEMICALS AND ALLIED PRODUCTS
810 Roche Holdings AG - Genusschein 988,251
DRUGS
170 Sairgroup 42,207
AIR TRANSPORTATION & COURIER SERVICES
140 SCHW Rueckversicherungs 365,014
INSURANCE CARRIERS
30 SGS Soc Gen Surviellance - B 29,378
SERVICES
150 SMH AG (a) 92,830
ELECTRONIC COMPONENTS AND ACCESSORIES
500 Swisscom AG (a) 209,322
TELEPHONE COMMUNICATIONS
300 The Swatch Group AG 44,941
ELECTRONIC COMPONENTS AND ACCESSORIES
2,053 Union Bank of Switzerland 630,781
FOREIGN BANKING
440 Zuerich Allied AG 325,800
INSURANCE CARRIERS
-----------
6,314,784
-----------
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
UNITED KINGDOM (19.7%)
14,390 Abbey National (a) $ 308,135
FOREIGN BANKING
14,970 Allied Zurich PLC (a) 223,293
HOLDING OFFICES
3,178 Anglian Water PLC 43,887
WATER SUPPLY
12,470 Arjo Wiggins Appleton PLC (a) 23,445
PAPER AND PAPER PRODUCTS
9,030 Associated British Foods 85,412
MISCELLANEOUS FOOD PREPARATIONS
14,250 Barclay's PLC 307,270
COMMERCIAL BANKS
4,195 Barratt Developments PLC (a) 16,123
CONSTRUCTION AND MINING MACHINERY & EQUIPMENT
8,147 Bass PLC 118,606
EATING AND DRINKING PLACES
6,920 BBA Group (a) 42,946
ENGINEERING, ARCHITECTURAL, AND SURVEYING SERVICES
35,250 BG PLC 222,428
GAS PRODUCTION AND DISTRIBUTION
8,690 Blue Circle Industries PLC 44,821
CONSTRUCTION AND MINING MACHINERY & EQUIPMENT
4,890 BOC Group (a) 69,929
CHEMICALS AND ALLIED PRODUCTS
12,020 Boots Co. PLC (a) 204,689
RETAIL STORES
7,120 BPB Industries PLC 26,921
CONSTRUCTION AND MINING MACHINERY & EQUIPMENT
16,840 British Aerospace PLC 142,754
SEARCH, DETECTION, NAVIGATION, GUIDANCE, AERONAUTI
10,930 British Airways PLC 73,696
MISCELLANEOUS TRANSPORTATION SERVICES
14,080 British American Tobacco (a) 123,808
CIGARETTES
4,850 British Land Company PLC (a) 36,070
REAL ESTATE AGENTS AND MANAGERS
62,118 British Petroleum Co. PLC 927,583
CRUDE PETROLEUM AND NATURAL GAS
18,320 British Sky Broadcasting PLC (a) 139,144
COMMUNICATIONS SERVICES
23,960 British Steel (a) 35,480
ENGINEERING, ARCHITECTURAL, AND SURVEYING SERVICES
67,990 British Telecommunications PLC (a) 1,024,317
TELEPHONE COMMUNICATIONS
33,426 BTR Limited 68,961
MISCELLANEOUS MANUFACTURING INDUSTRIES
</TABLE>
- ---------
42
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST INTERNATIONAL EQUITY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
4,440 Burmah Castrol PLC (a) $ 63,531
CRUDE PETROLEUM AND NATURAL GAS
18,380 Cable & Wireless (a) 225,991
TELEPHONE COMMUNICATIONS
9,485 Cadbury Schweppes PLC (a) 161,756
MISCELLANEOUS FOOD PREPARATIONS
9,455 Carlton Communications (a) 86,994
COMMUNICATIONS SERVICES
37,950 Centrica PLC (a) 76,401
GAS PRODUCTION AND DISTRIBUTION
6,630 CGU PLC 103,802
INSURANCE CARRIERS
40,513 Diageo PLC 461,054
BEER, WINE, AND DISTILLED ALCOHOLIC BEVERAGES
6,015 Electrocomponents PLC 40,331
MISCELLANEOUS MANUFACTURING INDUSTRIES
11,442 Elementis (a) 15,610
CHEMICALS AND ALLIED PRODUCTS
9,415 EMI Group PLC (a) 62,972
PHOTOGRAPHIC STUDIOS
13,900 FKI Babcock 30,990
ENGINEERING, ARCHITECTURAL, AND SURVEYING SERVICES
27,535 General Electric PLC (a) 248,534
ELECTRONIC COMPONENTS AND ACCESSORIES
8,200 GKN PLC 108,804
MOTOR VEHICLES, PARTS AND SUPPLIES
38,215 Glaxo Wellcome PLC 1,314,879
DRUGS
8,050 Granada Group PLC 142,307
MISCELLANEOUS AMUSEMENT AND RECREATION SERVICES
9,800 Great Universal Stores 103,294
RETAIL STORES
9,557 Guardian Royal Exchange 53,507
FIRE, MARINE, AND CASUALTY INSURANCE
14,235 Halifax PLC 202,026
MORTGAGE BANKERS AND BROKERS
12,010 Hanson Trust PLC 95,365
MISCELLANEOUS MANUFACTURING INDUSTRIES
8,460 HSBC Holdings PLC - 75 C 229,434
FOREIGN BANKING
17,920 HSBC Holdings PLC - C 453,193
FOREIGN BANKING
6,630 IMI PLC (a) 26,033
ENGINEERING, ARCHITECTURAL, AND SURVEYING SERVICES
7,240 Imperial Chemical Industries (a) 62,759
CHEMICALS AND ALLIED PRODUCTS
17,115 J. Sainsbury PLC (a) 137,184
MISCELLANEOUS FOOD STORES
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
4,055 Johnson Matthey PLC $ 27,392
ENGINEERING, ARCHITECTURAL, AND SURVEYING SERVICES
12,880 Kingfisher PLC 139,400
DEPARTMENT STORES
13,790 Ladbroke Group (a) 55,410
MISCELLANEOUS AMUSEMENT AND RECREATION SERVICES
4,730 Land Securities PLC (a) 60,912
REAL ESTATE AGENTS AND MANAGERS
10,560 Legal and General Group PLC (a) 137,132
INVESTMENT OFFICES
57,280 Lloyds TSB Group PLC 814,837
FOREIGN BANKING
11,000 London & Scotland Marine Oil (a) 18,302
OIL AND GAS FIELD SERVICES
16,665 Lucasvarity 55,593
MOTOR VEHICLES AND MOTOR VEHICLE EQUIPMENT
23,955 Marks & Spencer PLC 164,307
RETAIL STORES
4,411 MEPC PLC 29,356
REAL ESTATE AGENTS AND MANAGERS
11,360 National Grid Group PLC (a) 90,677
ELECTRIC SERVICES
12,489 National Power PLC (a) 107,636
ELECTRIC SERVICES
4,510 Next PLC (a) 37,069
RETAIL STORES
6,195 Pearson PLC (a) 122,965
COMMUNICATIONS SERVICES
7,165 Peninsular & Orient Steam Navigation (a) 84,700
MISCELLANEOUS TRANSPORTATION SERVICES
16,940 Pilkington PLC (a) 16,911
FLAT GLASS
22,630 Prudential Corp. 341,690
LIFE INSURANCE
4,745 Railtrack Group PLC 124,026
RAILROADS
11,675 Rank Group (a) 44,969
MISCELLANEOUS AMUSEMENT AND RECREATION SERVICES
9,865 Reed International Ltd. British 77,143
COMMUNICATIONS SERVICES
7,580 Rentokil Initial PLC 57,130
MISCELLANEOUS BUSINESS SERVICES
13,871 Reuters Group PLC 145,626
SECURITIES & COMMODITIES EXCHANGE SERVICES
6,653 Rexam PLC 18,485
PAPER AND PAPER PRODUCTS
14,960 Rio Tinto PLC (a) 173,985
METAL MINING SERVICES
</TABLE>
43-------
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST INTERNATIONAL EQUITY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
3,385 RMC Group PLC (a) $ 46,351
CONSTRUCTION AND MINING MACHINERY & EQUIPMENT
15,580 Rolls Royce PLC (a) 64,546
ENGINEERING, ARCHITECTURAL, AND SURVEYING SERVICES
Royal & Sun Alliance Insurance Group PLC 122,517
15,005
INSURANCE CARRIERS
7,950 Royal Bank of Scotland Group PLC 126,981
FOREIGN BANKING
11,185 Safeway PLC (a) 56,201
MISCELLANEOUS FOOD STORES
2,745 Schroders PLC (a) 50,101
MISCELLANEOUS INVESTING
7,430 Scottish Newcastle Breweries PLC 86,287
EATING AND DRINKING PLACES
10,590 Scottish Power PLC 108,802
ELECTRIC SERVICES
18,830 Siebe PLC 74,250
ENGINEERING, ARCHITECTURAL, AND SURVEYING SERVICES
5,840 Slough Estates PLC (a) 26,429
REAL ESTATE AGENTS AND MANAGERS
55,915 Smithkline Beecham PLC 781,462
DRUGS, DRUG PROPRIETORS, AND DRUGGIST SUNDRIES
4,090 Smiths Industries 58,352
ELECTRONIC COMPONENTS AND ACCESSORIES
5,755 Southern Electric PLP (a) 65,063
ELECTRIC SERVICES
18,255 Tarmac PLC (a) 34,170
CONSTRUCTION AND MINING MACHINERY & EQUIPMENT
6,965 Tate & Lyle PLC (a) 38,358
SUGAR AND CONFECTIONERY PRODUCTS
56,040 Tesco PLC 159,675
MISCELLANEOUS FOOD STORES
3,497 Thames Water PLC (a) 66,911
WATER SUPPLY
6,380 TI Group PLC (a) 34,367
MISCELLANEOUS MANUFACTURING INDUSTRIES
30,040 Unilever PLC 336,869
MISCELLANEOUS FOOD PREPARATIONS
6,370 United Utilities PLC (a) 88,284
WATER SUPPLY
29,660 Vodafone Group PLC 481,640
TELEPHONE COMMUNICATIONS
8,289 Williams PLC 47,062
MISCELLANEOUS MANUFACTURING INDUSTRIES
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE
- ---------- -----------
<C> <S> <C>
7,125 Wolseley PLC (a) $ 45,047
CONSTRUCTION AND MINING MACHINERY & EQUIPMENT
7,530 Zeneca Group PLC 327,868
DRUGS, DRUG PROPRIETORS, AND DRUGGIST SUNDRIES
-----------
15,089,715
-----------
TOTAL COMMON STOCKS
(cost $64,190,772) 73,961,928
PREFERRED STOCK (.6%)
AUSTRALIA (.1%)
16,248 News Corporation Ltd. 98,962
COMMUNICATIONS SERVICES
-----------
GERMANY (.5%)
1,730 RWE (a) 62,842
MISCELLANEOUS MANUFACTURING INDUSTRIES
500 SAP AG Vorzug (a) 238,723
COMPUTER PROGRAMMING & DATA PROCESSING
1,050 Volkswagen AG (a) 52,326
AUTOMOTIVE SERVICES, EXCEPT REPAIR
-----------
353,891
-----------
TOTAL PREFERRED STOCK
(cost $411,693) 452,853
SHORT-TERM INVESTMENTS (2.9%)
$2,217,000 U.S. Treasury bills 3.470% to 4.320%, due January,
1999 to February, 1999
(cost $2,208,118) 2,209,067
-----------
TOTAL INVESTMENTS (99.9%)
(cost $66,810,583) 76,623,848
CASH AND OTHER ASSETS,
LESS LIABILITIES (0.1%) 73,284
-----------
NET ASSETS (100.0%) $76,697,132
-----------
-----------
</TABLE>
Notes:
(a) Non-income producing security.
At December 31, 1998, net unrealized appreciation of $9,813,265 consisted of
gross unrealized appreciation of $12,875,229 and gross unrealized depreciation
of $3,061,964 based on cost of $66,810,583 for federal income tax purposes.
See accompanying notes to financial statements.
- ---------
44
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST INTERNATIONAL EQUITY INDEX FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
INTERNATIONAL FUND INDUSTRY CLASSES
<TABLE>
<CAPTION>
INDUSTRY VALUE %
- ---------------------------------------- -------------- ------
<S> <C> <C>
Banks $ 10,222,368 13.33%
Communications 10,186,694 13.28
Machinery, Manufacturing & Construction 8,223,418 10.72
Consumer Goods & Services 7,623,601 9.94
Healthcare 6,935,986 9.04
Transportation 5,094,460 6.64
Mining & Refining 4,769,607 6.22
Insurance 4,534,476 5.91
Retail 3,821,768 4.98
Agriculture, Foods & Beverage 3,494,679 4.56
Real Estate and Other Financial 2,933,448 3.82
Energy & Utilities 2,558,974 3.34
Chemicals 2,262,351 2.95
Regulations 971,635 1.27
Other 781,316 1.02
-------------- ------
Total Stocks 74,414,781 97.02
Short-term Investments 2,209,067 2.88
Cash and Other Assets, Less Liabilities 73,284 0.10
-------------- ------
Net Assets $ 76,697,132 100.00%
-------------- ------
-------------- ------
</TABLE>
See accompanying notes to financial statements.
45-------
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST STOCK AND BOND BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- -------- ----------
<C> <S> <C>
COMMON STOCKS (99.7%)
209,523 State Farm Variable Product Trust Bond
Fund $2,126,663
267,971 State Farm Variable Product Trust Large
Cap Equity Index Fund 3,430,029
----------
TOTAL COMMON STOCKS
(cost $5,209,092) 5,556,692
CASH AND OTHER ASSETS,
LESS LIABILITIES (0.3%) 18,120
----------
NET ASSETS (100.0%) $5,574,812
----------
----------
</TABLE>
Notes:
At December 31, 1998, net unrealized appreciation of $347,600 consisted entirely
of gross unrealized appreciation based on cost of $5,209,092 for federal income
tax purposes.
See accompanying notes to financial statements.
- ---------
46
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST BOND FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL COUPON MATURITY
AMOUNT RATE DATE VALUE
- ---------- -------- ------------------ -----------
<C> <S> <C> <C> <C>
CORPORATE BONDS (77.7%)
AUTOMOTIVE (4.1%)
$ 500,000 Ford Motor Credit Co. 6.500% February 28, 2002 $ 513,335
500,000 Paccar Financial Corp. 5.970% November 15, 2001 507,515
-----------
1,020,850
-----------
BUILDING MATERIALS & CONSTRUCTION (3.1%)
750,000 Masco Corp. 6.125% September 15, 2003 758,977
-----------
CHEMICALS (5.6%)
825,000 Dow Capital BV 7.375% July 15, 2002 866,011
500,000 EI du Pont de Nemours 6.000% March 6, 2013 509,315
-----------
1,375,326
-----------
COMMERCIAL SERVICE/SUPPLY (4.9%)
350,000 Pitney Bowes Credit 5.650% January 15, 2003 352,730
850,000 Xerox Corporation 5.500% November 15, 2003 851,827
-----------
1,204,557
-----------
CONSUMER & MARKETING (5.7%)
150,000 Kimberly Clark Corp. 8.625% May 1, 2001 160,970
425,000 Mattel Inc. 6.000% July 15, 2003 431,766
500,000 McDonald's Corporation 5.900% May 11, 2001 508,230
300,000 Procter & Gamble Co. 5.250% September 15, 2003 300,510
-----------
1,401,476
-----------
ELECTRONIC/ELECTRICAL MFG. (7.4%)
500,000 Emerson Electric Co. 5.500% September 15, 2008 505,130
300,000 Int'l. Business Machines Corp. 5.800% May 15, 2001 304,602
500,000 Public Service Co. of CO 6.240% November 27, 2000 507,185
500,000 Raytheon Co. 5.950% March 15, 2001 504,720
-----------
1,821,637
-----------
FINANCIAL SERVICES (3.2%)
300,000 Associates Corp. of North
America 5.875% May 16, 2001 302,319
500,000 Household Finance 5.875% November 1, 2002 499,760
-----------
802,079
-----------
FOREST PRODUCTS (5.0%)
500,000 Mead Corporation 6.600% March 1, 2002 513,340
660,000 Westvaco Corp. 9.650% March 1, 2002 733,854
-----------
1,247,194
-----------
HEALTH CARE (4.1%)
500,000 Abbott Laboratories 5.400% September 15, 2008 500,265
500,000 Warner Lambert Co. 5.750% January 15, 2003 507,485
-----------
1,007,750
-----------
MACHINERY & MANUFACTURING (8.9%)
300,000 AlliedSignal Inc. 9.875% June 1, 2002 337,560
</TABLE>
47-------
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL COUPON MATURITY
AMOUNT RATE DATE VALUE
- ---------- -------- ------------------ -----------
<C> <S> <C> <C> <C>
$ 400,000 Caterpillar Finance 6.750% July 10, 2001 $ 411,524
500,000 Parker Hannifin Corp. 5.650% September 15, 2003 501,140
900,000 TRW Inc. 6.730% July 11, 2007 957,951
-----------
2,208,175
-----------
MEDIA & BROADCASTING (5.7%)
500,000 New York Times 5.000% October 8, 2003 490,865
406,000 The Walt Disney Company 6.375% March 30, 2001 416,049
500,000 Tribune Co. 5.750% September 15, 2003 502,190
-----------
1,409,104
-----------
MINING & METALS (2.1%)
500,000 Aluminum Company of America
(a) 6.125% June 15, 2005 510,410
-----------
OIL, GAS, & OTHER ENERGY (1.7%)
400,000 Mobil Corp. 8.375% February 12, 2001 425,256
-----------
RETAILERS (3.2%)
500,000 Sherwin Williams Co. 6.500% February 1, 2002 516,250
250,000 Wal-Mart Stores Inc. 8.625% April 1, 2001 267,920
-----------
784,170
-----------
TELECOM & TELECOM EQUIPMENT (9.6%)
750,000 Ameritech Capital Funding
Corp. 5.650% January 15, 2001 758,370
1,000,000 AT&T Corp. 7.000% May 15, 2005 1,086,070
200,000 Northern Telecom Ltd. 6.875% October 1, 2002 208,158
300,000 Worldcom Inc. 6.125% August 15, 2001 305,142
-----------
2,357,740
-----------
UTILITIES & ENERGY (3.4%)
300,000 Georgia Power 6.000% March 1, 2000 302,493
500,000 Virginia Electric & Power 7.375% July 1, 2002 530,265
-----------
832,758
-----------
TOTAL CORPORATE BONDS
(cost $18,966,853) 19,167,459
LONG-TERM U.S. TREASURY OBLIGATIONS (7.2%)
675,000 U.S. Treasury Notes 6.875% March 31, 2000 692,678
1,000,000 U.S. Treasury Notes 7.500% May 15, 2002 1,086,910
-----------
TOTAL LONG-TERM U.S. TREASURY OBLIGATIONS
(cost $1,774,589) 1,779,588
SHORT-TERM INVESTMENTS (11.0%)
500,000 Ford Motor Credit Co. 5.450% February 5, 1999 501,214
1,200,000 General Motors Acceptance
Corp. 4.910% January 29, 1999 1,200,164
</TABLE>
- ---------
48
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL COUPON MATURITY
AMOUNT RATE DATE VALUE
- ---------- -------- ------------------ -----------
<C> <S> <C> <C> <C>
$1,000,000 General Electric Capital Corp. 5.650% January 15, 1999 $ 1,001,414
-----------
TOTAL SHORT-TERM INVESTMENTS
(cost $2,702,792) 2,702,792
TOTAL INVESTMENTS (95.9%)
(cost $23,444,234) 23,649,839
CASH AND OTHER ASSETS, LESS LIABILITIES (4.1%) 1,017,547
-----------
NET ASSETS (100.0%) $24,667,386
-----------
-----------
</TABLE>
Notes:
(a) Security exempt from registration under Rule 144A of the Securities Act of
1933. This security may be resold in transactions exempt from registration,
normally to qualified institutional buyers. At December 31, 1998, the value
of this security amounted to $510,410 or 2% of net assets.
(b) At December 31, 1998, net unrealized appreciation of $205,605 consisted of
gross unrealized appreciation of $221,089 and gross unrealized depreciation
of $15,484 based on cost of $23,444,234 for federal income tax purposes.
See accompanying notes to financial statements.
49-------
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL COUPON MATURITY
AMOUNT RATE DATE VALUE
- ---------- ----------------- ------------------ -----------
<C> <S> <C> <C> <C>
SHORT-TERM INVESTMENTS (97.3%)
AGRICULTURE, FOODS, & BEVERAGE (9.9%)
$ 935,000 Coca-Cola 4.950% April 9, 1999 $ 922,383
920,000 Sara Lee Corp. 5.820% January 7, 1999 919,107
-----------
1,841,490
-----------
AUTOMOTIVE (9.9%)
915,000 Ford Motor Credit Co. 4.980% and 5.120% February 5, 1999 922,290
915,000 General Motors Acceptance
Corp. 5.030% and 5.180% January 29, 1999 923,248
-----------
1,845,538
-----------
CHEMICALS (4.2%)
780,000 EI du Pont de Nemours 4.960% January 28, 1999 777,072
-----------
COMPUTERS (4.6%)
850,000 Int'l Business Machines Corp. 5.100% and 5.260% January 12, 1999 861,441
-----------
ELECTRONIC/ELECTRICAL MFG. (4.6%)
850,000 General Electric Capital Corp. 5.280% and 5.320% January 15, 1999 861,942
-----------
FINANCIAL SERVICES (8.4%)
915,000 Associates Corp. of North
America 5.000% April 16, 1999 916,809
655,000 Caterpillar Finance 5.280% January 4, 1999 654,707
-----------
1,571,516
-----------
HEALTH CARE (9.0%)
915,000 Abbott Laboratories 5.600% January 5, 1999 914,430
785,000 Johnson & Johnson (a) 4.620% April 29, 1999 773,013
-----------
1,687,443
-----------
MACHINERY & MANUFACTURING (4.6%)
850,000 John Deere Credit Co. 5.200% and 5.270% January 14, 1999 861,909
-----------
OIL, GAS, & OTHER ENERGY (8.4%)
920,000 Chevron Corporation 5.000% March 12, 1999 920,516
650,000 Shell Oil Co. 4.950% February 11, 1999 646,306
-----------
1,566,822
-----------
RETAILERS (4.9%)
915,000 Sears Roebuck Acceptance Corp. 5.050% and 5.250% January 26, 1999 923,258
-----------
TELECOM & TELECOM EQUIPMENT (4.6%)
870,000 Ameritech Corp. 5.000% January 13, 1999 868,541
-----------
U.S. GOVERNMENT (24.2%)
750,000 Fannie Mae 5.190% January 26, 1999 747,254
1,000,000 Freddie Mac 5.270% January 7, 1999 999,107
787,000 Freddie Mac 5.020% and 5.180% January 15, 1999 785,427
1,000,000 Freddie Mac 4.890% February 18, 1999 993,441
</TABLE>
- ---------
50
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL COUPON MATURITY
AMOUNT RATE DATE VALUE
- ---------- ----------------- ------------------ -----------
<C> <S> <C> <C> <C>
$1,000,000 Freddie Mac 4.930% February 22, 1999 $ 992,842
-----------
4,518,071
-----------
TOTAL SHORT-TERM INVESTMENTS
(cost $18,185,043) 18,185,043
CASH AND OTHER ASSETS, LESS LIABILITIES (2.7%) 496,374
-----------
NET ASSETS (100.0%) $18,681,417
-----------
-----------
</TABLE>
Notes:
(a) Security exempt from registration under Section 4(2) of the Securities Act
of 1933. This security may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At December 31,
1998, the value of this security amounted to $773,013 or 4% of net assets.
See accompanying notes to financial statements.
51-------
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1998
<TABLE>
<CAPTION>
LARGE CAP SMALL CAP INTERNATIONAL STOCK & BOND MONEY
EQUITY INDEX EQUITY INDEX EQUITY INDEX BALANCED BOND MARKET
FUND FUND FUND FUND FUND FUND
------------- ------------- -------------- ----------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments in
securities:
At identified cost $ 46,476,230 42,741,478 66,810,583 5,209,092 23,444,234 18,185,043
------------- ------------- -------------- ----------------- -------------- --------------
------------- ------------- -------------- ----------------- -------------- --------------
At value $ 53,285,251 41,697,936 76,623,848 5,556,692 23,649,839 18,185,043
Cash 448 951 590 12 1,227,342 632,695
Foreign currency at
value (cost $150,096) -- -- 149,336 -- -- --
Receivable for:
Dividends and
interest 45,300 56,657 116,108 18,108 367,449 2,041
Shares of the Fund
sold 190,862 65,377 -- 35,418 18,988 98,703
Securities sold 38,409 8,962 -- -- 901,648 --
Expense cap
reimbursement -- -- 20,500 5,486 -- --
Variation margin -- 35,800 -- -- -- --
Prepaid expenses 496 588 -- -- 99 218
------------- ------------- -------------- ----------------- -------------- --------------
Total assets 53,560,766 41,866,271 76,910,382 5,615,716 26,165,365 18,918,700
------------- ------------- -------------- ----------------- -------------- --------------
LIABILITIES AND NET
ASSETS
Dividends payable to
shareowners -- -- -- -- 259,096 207,138
Payable for:
Shares of the Fund
redeemed -- -- -- 2,501 1,275 3,199
Securities purchased 141,392 185,238 30,429 32,917 1,200,000 --
Variation margin 78,575 -- -- -- -- --
Manager 28,084 44,925 141,551 -- 27,461 16,909
Other 7,993 10,672 41,270 5,486 10,147 10,037
------------- ------------- -------------- ----------------- -------------- --------------
Total liabilities 256,044 240,835 213,250 40,904 1,497,979 237,283
------------- ------------- -------------- ----------------- -------------- --------------
Net assets applicable to
shares outstanding of
common stock 53,304,722 41,625,436 76,697,132 5,574,812 24,667,386 18,681,417
------------- ------------- -------------- ----------------- -------------- --------------
Fund shares outstanding 4,162,934 4,363,244 6,592,448 488,711 2,430,863 18,681,417
Net asset value, offering
price and redemption
price per share $ 12.80 9.54 11.63 11.41 10.15 1.00
------------- ------------- -------------- ----------------- -------------- --------------
------------- ------------- -------------- ----------------- -------------- --------------
ANALYSIS OF NET ASSETS
Excess of amounts
received from sales
of shares over
amounts paid on
redemptions of shares
on account of capital $ 45,796,843 42,540,357 66,990,452 5,188,944 24,478,905 18,681,417
Accumulated net
realized gain (loss) 269,073 66,054 117,394 (6,189) (17,124) --
Net unrealized
appreciation
(depreciation) 7,234,621 (984,992) 9,815,363 347,600 205,605 --
Undistributed
(distributions in
excess of) net
investment income 4,185 4,017 (226,077) 44,457 -- --
------------- ------------- -------------- ----------------- -------------- --------------
Net assets applicable
to shares outstanding $ 53,304,722 41,625,436 76,697,132 5,574,812 24,667,386 18,681,417
------------- ------------- -------------- ----------------- -------------- --------------
------------- ------------- -------------- ----------------- -------------- --------------
</TABLE>
See accompanying notes to financial statements.
- ---------
52
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
LARGE CAP SMALL CAP INTERNATIONAL STOCK & BOND MONEY
EQUITY INDEX EQUITY INDEX EQUITY INDEX BALANCED BOND MARKET
FOR THE PERIOD FROM THE FUND FUND FUND FUND FUND FUND
DATE OF INCEPTION ------------- ------------- -------------- ----------------- --------------- ---------------
TO DECEMBER 31, 1998 1/22/98 1/29/98 1/22/98 1/29/98 1/22/98 1/29/98
- ------------------------- ------------- ------------- -------------- ----------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ 328,684 443,671 1,210,085 47,205 -- --
Interest 130,191 41,268 87,600 -- 750,590 638,747
------------- ------------- -------------- ------- --------------- ---------------
458,875 484,939 1,297,685 47,205 750,590 638,747
Less: foreign
withholding taxes 1,833 108 104,517 -- -- --
------------- ------------- -------------- ------- --------------- ---------------
Total investment income 457,042 484,831 1,193,168 47,205 750,590 638,747
EXPENSES:
Investment advisory and
management fees 46,527 118,508 325,393 -- 51,817 39,751
Professional fees 11,083 10,834 18,200 5,245 10,807 10,562
Fidelity bond expense 1,114 1,253 2,070 575 821 702
Trustees' fees 4,909 4,909 4,500 4,909 4,909 4,908
Reports to shareowners 1,499 1,499 1,414 1,002 1,499 1,503
Security evaluation
fees 8,866 24,587 44,336 -- 1,859 237
Custodian fees -- -- 91,529 2,178 3,139 3,541
Index license fees 5,000 5,119 10,001 -- -- --
Fund accounting expense -- -- 51,372 -- -- --
Other 31 27 -- -- 15 13
------------- ------------- -------------- ------- --------------- ---------------
Total expenses 79,029 166,736 548,815 13,909 74,866 61,217
Less: expense
reimbursement -- 16,690 107,042 13,909 -- 10,516
------------- ------------- -------------- ------- --------------- ---------------
Net expenses 79,029 150,046 441,773 -- 74,866 50,701
------------- ------------- -------------- ------- --------------- ---------------
Net investment income 378,013 334,785 751,395 47,205 675,724 588,046
REALIZED AND UNREALIZED
GAIN (LOSS):
Accumulated net
realized gain (loss)
on sales of
investments 22,524 860,154 117,394 (6,189) (17,124) --
Accumulated net
realized gain on
forward foreign
currency contracts -- -- 105,894 -- -- --
Accumulated net
realized loss on
foreign currency
transactions -- -- (187,378) -- -- --
Accumulated net
realized gain (loss)
on futures contracts 246,549 (38,747)
Net unrealized gain on
open futures
contracts 425,600 58,550 -- -- -- --
Net unrealized
appreciation or
depreciation on
investments and
foreign currency
transactions 6,809,021 (1,043,542) 9,815,363 347,600 205,605 --
------------- ------------- -------------- ------- --------------- ---------------
Net realized and
unrealized gain (loss) 7,503,694 (163,585) 9,851,273 341,411 188,481 --
------------- ------------- -------------- ------- --------------- ---------------
Net change in net assets
resulting from
operations $7,881,707 171,200 10,602,668 388,616 864,205 588,046
------------- ------------- -------------- ------- --------------- ---------------
------------- ------------- -------------- ------- --------------- ---------------
</TABLE>
See accompanying notes to financial statements.
53-------
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
LARGE CAP SMALL CAP INTERNATIONAL STOCK & BOND MONEY
EQUITY INDEX EQUITY INDEX EQUITY INDEX BALANCED BOND MARKET
FOR THE PERIOD FROM THE FUND FUND FUND FUND FUND FUND
DATE OF INCEPTION ------------- ------------- -------------- ----------------- -------------- --------------
TO DECEMBER 31, 1998 1/22/98 1/29/98 1/22/98 1/29/98 1/22/98 1/29/98
- ------------------------- ------------- ------------- -------------- ----------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income $ 378,013 334,785 751,395 47,205 675,724 588,046
Accumulated net
realized gain (loss) 269,073 821,407 35,910 (6,189) (17,124) --
Net unrealized
appreciation
(depreciation) 7,234,621 (984,992) 9,815,363 347,600 205,605 --
------------- ------------- -------------- -------- -------------- --------------
Net change in net assets
resulting from
operations 7,881,707 171,200 10,602,668 388,616 864,205 588,046
DISTRIBUTIONS TO
SHAREOWNERS FROM AND IN
EXCESS OF:
Net investment income (373,828) (330,768) (895,988) (2,748) (675,724) (588,046)
Net realized gain -- (755,353) -- -- -- --
------------- ------------- -------------- -------- -------------- --------------
Total distributions to
shareowners (373,828) (1,086,121) (895,988) (2,748) (675,724) (588,046)
FROM FUND SHARE
TRANSACTIONS:
Proceeds from shares
sold 30,942,223 11,591,139 12,288,814 5,522,631 14,570,954 8,868,290
Reinvestment of
distributions 373,828 1,086,121 895,988 2,748 675,724 588,046
------------- ------------- -------------- -------- -------------- --------------
31,316,051 12,677,260 13,184,802 5,525,379 15,246,678 9,456,336
Less payments for
shares redeemed 519,208 136,903 194,350 336,535 767,773 774,919
------------- ------------- -------------- -------- -------------- --------------
Net increase in net
assets from Fund share
transactions 30,796,843 12,540,357 12,990,452 5,188,844 14,478,905 8,681,417
------------- ------------- -------------- -------- -------------- --------------
Total increase in net
assets 38,304,722 11,625,436 22,697,132 5,574,712 14,667,386 8,681,417
------------- ------------- -------------- -------- -------------- --------------
NET ASSETS:
Beginning of period 15,000,000 30,000,000 54,000,000 100 10,000,000 10,000,000
------------- ------------- -------------- -------- -------------- --------------
End of period+ $ 53,304,722 41,625,436 76,697,132 5,574,812 24,667,386 18,681,417
------------- ------------- -------------- -------- -------------- --------------
------------- ------------- -------------- -------- -------------- --------------
+ Includes undistributed
(distribution in excess
of) net investment
income of $ 4,185 4,017 (226,077) 44,457 -- --
------------- ------------- -------------- -------- -------------- --------------
------------- ------------- -------------- -------- -------------- --------------
</TABLE>
See accompanying notes to financial statements.
- ---------
54
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST
NOTES TO FINANCIAL STATEMENTS
1. OBJECTIVE
The State Farm Variable Product Trust (the "Trust") is an open-end management
investment company consisting of six separate investment portfolios (the
"Funds"), each of which has a different investment objective. The Funds are
offered to separate accounts of State Farm Life Insurance Company and State Farm
Life and Accident Assurance Company as funding vehicles for certain variable
annuity and life insurance contracts issued by State Farm Life Insurance Company
and State Farm Life and Accident Assurance Company through such separate
accounts.
The LARGE CAP EQUITY INDEX FUND (LARGE CAP FUND) seeks to match the performance
of the Standard and Poors-Registered Trademark- Composite Index of 500 Stocks
(the "S&P 500"). This Fund will pursue its objective by investing primarily on a
capitalization-weighted basis in the securities comprising the index.
The SMALL CAP EQUITY INDEX FUND (SMALL CAP FUND) seeks to match the performance
of the Russell 2000-Registered Trademark- Small Stock Index (the "Russell
2000"). This Fund will pursue its objective by investing primarily in a
diversified portfolio of stocks found in the index.
The INTERNATIONAL EQUITY INDEX FUND (INTERNATIONAL FUND) seeks to match the
performance of the Morgan Stanley Capital International Europe, Australia and
Far East Free Index (the "EAFE-Registered Trademark- Free"). This Fund will
pursue its objective by investing primarily in a diversified portfolio of stocks
found in the index.
The STOCK AND BOND BALANCED FUND (BALANCED FUND) seeks long-term growth of
capital, balanced with current income. This Fund will pursue its objective by
investing in the Large Cap and Bond Funds.
The BOND FUND (BOND FUND) seeks to realize over a period of years the highest
yield consistent with prudent investment management through current income and
capital gains. This Fund will pursue its objective by investing primarily in
high quality debt securities.
The MONEY MARKET FUND (MONEY MARKET FUND) seeks to maximize current income to
the extent consistent with the preservation of capital and maintenance of
liquidity. This Fund will pursue its objective by investing exclusively in high
quality money market instruments.
2. SIGNIFICANT ACCOUNTING POLICIES
SECURITY VALUATION
Investments are stated at value. Portfolio securities traded on securities
exchanges, or in the over-the-counter market in which transaction prices are
reported, are valued at the last sales prices on the day of valuation, or, if
there are no reported sales on that day, at the last reported bid price for the
day. Portfolio securities that are primarily traded on foreign securities
exchanges are generally valued at the preceding closing values of such
securities on their respective exchanges where primarily traded. Long-term debt
securities and U.S. Treasury bills are valued using quotations provided by an
independent pricing service. All of the securities and assets of the Money
Market Fund and short-term debt securities with remaining maturities of 60 days
or less (other than U.S. Treasury bills) held by any of the other Funds are
valued on an amortized cost basis, which approximates market value. Investments
in affiliated investment companies are valued each day based on the closing net
asset value of the respective fund. Futures contracts are valued at the
settlement price established each day on the exchange on which they are traded.
Forward foreign currency contracts are valued daily using quoted forward
exchange rates. Any securities not valued as described above are valued at fair
value as determined in good faith by the Board of Trustees or its delegate.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME
Security transactions are accounted for on trade date (date the order to buy or
sell is executed) and dividend income is recorded on the ex-dividend date,
except that certain dividends from foreign securities are recorded as soon as
the information is available to the Funds. Interest income is recorded on the
accrual basis and includes amortization of discounts on money market instruments
and long-term debt instruments when required for federal income tax purposes.
Realized gains and losses from security transactions are reported on an
identified cost basis.
FUND SHARE VALUATION
Fund shares are sold and redeemed on a continuous basis at net asset value. Net
asset value per share is determined daily as of the time of the close of trading
on the New York Stock Exchange, (currently 4:00 p.m., New York City time) on
each day when the New York Stock Exchange is open, other than those days
specifically stated in the Trust's prospectus, except that a Fund need not
compute a net asset value on any day
55-------
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
when no purchase or redemption order has been received by the Fund. The net
asset value per share is computed by dividing the total value of the Funds'
investments and other assets, less liabilities, by the respective number of Fund
shares outstanding.
FEDERAL INCOME TAXES, DIVIDENDS AND DISTRIBUTIONS TO SHAREOWNERS
It is the Funds' policy to comply with the special provisions of the Internal
Revenue Code available to investment companies and, in the manner provided
therein, to distribute all of its taxable income, as well as any net realized
gain on sales of investments reportable for federal income tax purposes. The
Funds intend to comply with this policy and, accordingly, no provision for
federal income taxes has been made.
Dividends and distributions payable to shareowners are recorded by the Large
Cap, Small Cap, International, and Balanced Funds on the ex-dividend date. The
Bond and Money Market Funds declare dividends daily equal to each Fund's
respective net investment income, and distributions of such amounts are made at
the end of each calendar quarter. Income and capital gain distributions are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. The differences are primarily due to
differing treatments for foreign currency transactions.
The accumulated net realized loss on sales of investments in the Bond Fund at
December 31, 1998, amounting to $17,124 is available to offset future taxable
gains. If not applied, the capital loss carryover will expire in 2006.
FOREIGN CURRENCY TRANSLATIONS
Values of investments denominated in foreign currencies are converted into U.S.
dollars using the spot market rate of exchange at the time of valuation.
Purchases and sales of investments and dividend and interest income are
translated into U.S. dollars using the spot market rate of exchange prevailing
on the respective dates of such transactions. The gain or loss resulting from
changes in foreign exchange rates is included with net realized and unrealized
gain or loss from investments, as appropriate.
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 amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
FINANCIAL INSTRUMENTS
The Large Cap, Small Cap, and International Funds may enter into stock index
futures contracts to hedge a portion of their portfolios. These contracts
obligate a Fund to make or take delivery of a financial instrument or the cash
value of a securities index at a specified future date at a specified price.
Gains and losses are reflected as net realized gain (loss) on futures contracts
in the statement of operations. Additionally, the International Fund may engage
in portfolio hedging with respect to changes in currency exchange rates by
entering into forward foreign currency contracts to purchase or sell foreign
currencies. The Fund bears the market risk that arises from changes in the value
of financial instruments and securities indices (futures contracts) or from
changes in foreign currency rates (forward foreign currency contracts) and the
credit risk should a counterparty fail to perform under such contracts.
3. TRANSACTIONS WITH AFFILIATES
The Trust has an investment advisory and management services agreement with
State Farm Investment Management Corp. (Manager) who serves as the Trust's
investment adviser and conducts the business and affairs of the Trust. Each Fund
pays the Manager an investment advisory fee (computed on a daily basis and paid
quarterly) at the following annual rates:
<TABLE>
<S> <C>
Large Cap Equity Index Fund .26% of average daily net assets
Small Cap Equity Index Fund .40% of average daily net assets
International Equity Index Fund .55% of average daily net assets
Stock and Bond Balanced Fund None
Bond Fund .50% of average daily net assets
Money Market Fund .40% of average daily net assets
</TABLE>
The Manager has agreed not to be paid an investment advisory fee for performing
its services for the Balanced Fund and has agreed to reimburse any other
expenses incurred by the Balanced Fund. This expense limitation arrangement is
voluntary and may be eliminated by the Manager at any time. However, the Manager
will receive investment advisory fees from managing the underlying Funds in
which the Balanced Fund invests.
With respect to each of the Funds other than the Balanced and International
Funds, the Manager has agreed to reimburse the expenses incurred by the Fund,
other than the investment advisory fee, that exceed .10% of such Fund's average
daily net assets. With respect to the International Fund, the Manager has agreed
to reimburse the expenses incurred by the Fund, other than the investment
advisory fee, that exceed .20% of the
- ---------
56
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Fund's average daily net assets. These expense limitation arrangements are
voluntary and may be eliminated by the Manager at any time.
Investment advisory and management fees and expenses reimbursed for the period
ended December 31, 1998 were as follows:
<TABLE>
<CAPTION>
INVESTMENT
ADVISORY
AND
MANAGEMENT FEES
FUND FEE REIMBURSED
- ---------------------------------------- ----------- -----------
<S> <C> <C>
Large Cap Equity Index Fund $ 46,527 $ --
Small Cap Equity Index Fund 118,508 16,690
International Equity Index Fund 325,393 107,042
Stock and Bond Balanced Fund -- 13,909
Bond Fund 51,817 --
Money Market Fund 39,751 10,516
</TABLE>
The Funds do not pay any discount, commission or other compensation for transfer
agent or underwriting services provided by the Manager.
Certain officers and/or trustees of the Trust are also officers and/or directors
of the Manager. The Funds made no payments to its officers or trustees during
the period ended December 31, 1998, except for the following trustees' fees paid
to the Trust's independent trustees:
<TABLE>
<S> <C>
Large Cap Equity Index Fund $4,500
Small Cap Equity Index Fund 4,500
International Equity Index Fund 4,500
Stock and Bond Balanced Fund 4,500
Bond Fund 4,500
Money Market Fund 4,500
</TABLE>
The Manager has engaged Barclays Global Fund Advisors (Barclay's) as the
investment sub-advisor to provide day-to-day portfolio management for the Large
Cap, Small Cap, and International Funds. Barclay's determines which securities
to buy and sell for each of these Funds, selects the brokers and dealers to
effect the transactions, and negotiates commissions.
4. INVESTMENT TRANSACTIONS
Investment transactions (exclusive of short-term instruments) for the period
ended December 31, 1998 were as follows:
<TABLE>
<CAPTION>
SALES AT
FUND PURCHASES PROCEEDS
- ---------------------------------------- ------------ ----------
<S> <C> <C>
Large Cap Equity Index Fund $ 36,104,771 1,671,512
Small Cap Equity Index Fund 52,304,379 12,266,263
International Equity Index Fund 68,386,025 3,948,180
Stock and Bond Balanced Fund:
Large Cap Equity Index Fund 3,275,491 177,057
Bond Fund 2,239,590 122,744
Bond Fund 24,106,604 3,284,209
</TABLE>
57-------
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. FUTURES CONTRACTS
The Large Cap and Small Cap Funds had the following open futures contracts at
December 31, 1998:
<TABLE>
<CAPTION>
UNREALIZED
CONTRACT EXPIRATION GAIN
FUND TYPE AMOUNT POSITION MONTH 12/31/98
- ------------------------- ------------------ ----------- -------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Large Cap Equity Index
Fund S&P 500 Index $11,406,650 Long March '99 $425,600
Small Cap Equity Index
Fund Russell 2000 Index 1,642,450 Long March '99 58,550
</TABLE>
The aggregate market value of investments pledged to cover margin requirements
for the open positions at December 31, 1998 were $11,832,250 and $1,701,000 in
the Large Cap and Small Cap Funds, respectively.
6. FUND SHARE TRANSACTIONS
Proceeds and payments on Fund shares as shown in the statement of changes in net
assets for the period ended December 31, 1998 were in respect of the following
number of shares:
<TABLE>
<CAPTION>
LARGE CAP SMALL CAP INTERNATIONAL STOCK & BOND MONEY
EQUITY INDEX EQUITY INDEX EQUITY INDEX BALANCED BOND MARKET
FUND FUND FUND FUND FUND FUND
------------ ------------ ------------- ---------------- ------------- -------------
SHARES SHARES SHARES SHARES SHARES SHARES
------------ ------------ ------------- ---------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 2,676,195 1,262,394 1,129,477 519,686 1,439,766 8,868,290
Shares issued in
reinvestment of
ordinary
income dividends and
capital gain
distributions 30,183 115,711 80,998 268 66,860 588,046
------------ ------------ ------------- ------ ------------- -------------
2,706,378 1,378,105 1,210,475 519,954 1,506,626 9,456,336
Less shares redeemed 43,444 14,861 18,027 31,253 75,763 774,919
------------ ------------ ------------- ------ ------------- -------------
Net increase in shares
outstanding 2,662,934 1,363,244 1,192,448 488,701 1,430,863 8,681,417
------------ ------------ ------------- ------ ------------- -------------
------------ ------------ ------------- ------ ------------- -------------
</TABLE>
- ---------
58
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST LARGE CAP EQUITY INDEX FUND
FINANCIAL HIGHLIGHTS
For a share outstanding throughout the period
<TABLE>
<CAPTION>
1998
------
<S> <C>
Net asset value, beginning of period (inception
date of 1/22/98) $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .12
Net gain on investments (both realized and
unrealized) 2.80
------
Total from investment operations 2.92
LESS DISTRIBUTIONS
Net investment income (.12)
------
Total distributions (.12)
------
Net asset value, end of period $12.80
------
------
TOTAL RETURN (NOT ANNUALIZED) 29.26%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (millions) $ 53.3
Ratio of expenses to average net assets 0.32%(a)
Ratio of net investment income to average net
assets 1.55%(a)
Portfolio turnover rate 7%
</TABLE>
- ----------
(a) Determined on an annualized basis.
59-------
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST SMALL CAP EQUITY INDEX FUND
FINANCIAL HIGHLIGHTS
For a share outstanding throughout the period
<TABLE>
<CAPTION>
1998
------
<S> <C>
Net asset value, beginning of period (inception
date of 1/29/98) $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .27
Net loss on investments (both realized and
unrealized) (.46)
------
Total from investment operations (.19)
------
LESS DISTRIBUTIONS
Net investment income (.09)
Net realized gain (.18)
------
Total distributions (.27)
------
Net asset value, end of period $ 9.54
------
------
Total Return (not annualized) (1.89)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (millions) $ 41.6
Ratio of expenses to average net assets 0.50%(a)
Ratio of expenses to average net assets, absent of
expense limitation 0.55%(a)
Ratio of net investment income to average net
assets 1.11%(a)
Portfolio turnover rate 38%
</TABLE>
- ----------
(a) Determined on an annualized basis.
- ---------
60
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST INTERNATIONAL EQUITY INDEX FUND
FINANCIAL HIGHLIGHTS
For a share outstanding throughout the period
<TABLE>
<CAPTION>
1998
------
<S> <C>
Net asset value, beginning of period (inception
date of 1/22/98) $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .13
Net gain on investments (both realized and
unrealized) 1.65
------
Total from investment operations 1.78
------
LESS DISTRIBUTIONS
Net investment income (.15)
------
Total distributions (.15)
------
Net asset value, end of period $11.63
------
------
TOTAL RETURN (NOT ANNUALIZED) 17.90%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (millions) $ 76.7
Ratio of expenses to average net assets 0.75%(a)
Ratio of expenses to average net assets, absent of
expense limitation 0.93%(a)
Ratio of net investment income to average net
assets 1.27%(a)
Portfolio turnover rate 6%
</TABLE>
- ----------
(a) Determined on an annualized basis.
61-------
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST STOCK AND BOND BALANCED FUND
FINANCIAL HIGHLIGHTS
For a share outstanding throughout the period
<TABLE>
<CAPTION>
1998
------
<S> <C>
Net asset value, beginning of period (inception
date of 1/29/98) $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .14
Net gain on investments (both realized and
unrealized) 1.32
------
Total from investment operations 1.46
------
LESS DISTRIBUTIONS
Net investment income (.05)
------
Total distributions (.05)
------
Net asset value, end of period $11.41
------
------
TOTAL RETURN (NOT ANNUALIZED) 14.66%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (millions) $ 5.6
Ratio of expenses to average net assets 0.00%(a)
Ratio of expenses to average net assets, absent of
expense limitation 1.01%(a)
Ratio of net investment income to average net
assets 3.43%(a)
Portfolio turnover rate 18%
</TABLE>
- ----------
(a) Determined on an annualized basis.
- ---------
62
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST BOND FUND
FINANCIAL HIGHLIGHTS
For a share outstanding throughout the period
<TABLE>
<CAPTION>
1998
------
<S> <C>
Net asset value, beginning of period (inception
date of 1/22/98) $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .49
Net gain on investments (both realized and
unrealized) .15
------
Total from investment operations .64
------
LESS DISTRIBUTIONS
Net investment income (.49)
------
Total distributions (.49)
------
Net asset value, end of period $10.15
------
------
TOTAL RETURN (NOT ANNUALIZED) 6.49%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (millions) $ 24.7
Ratio of expenses to average net assets 0.57%(a)
Ratio of net investment income to average net
assets 5.14%(a)
Portfolio turnover rate 26%
</TABLE>
- ----------
(a) Determined on an annualized basis.
63-------
<PAGE>
STATE FARM VARIABLE PRODUCT TRUST MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
For a share outstanding throughout the period
<TABLE>
<CAPTION>
1998
------
<S> <C>
Net asset value, beginning of period (inception
date of 1/29/98) $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .05
------
Total from investment operations .05
------
LESS DISTRIBUTIONS
Net investment income (.05)
------
Total distributions (.05)
------
Net asset value, end of period $ 1.00
------
------
TOTAL RETURN (NOT ANNUALIZED) 4.76%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (millions) $ 18.7
Ratio of expenses to average net assets 0.43%(a)
Ratio of expenses to average net assets, absent of
expense limitation 0.52%(a)
Ratio of net investment income to average net
assets 5.04%(a)
</TABLE>
- ----------
(a) Determined on an annualized basis.
- ---------
64
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Board of Trustees and Shareowners
State Farm Variable Product Trust --
Large Cap Equity Index Fund
Small Cap Equity Index Fund
International Equity Index Fund
Stock and Bond Balanced Fund
Bond Fund
Money Market Fund
We have audited the accompanying statement of assets and liabilities, including
the portfolios of investments, of the Large Cap Equity Index Fund, Small Cap
Equity Index Fund, International Equity Index Fund, Stock and Bond Balanced
Fund, Bond Fund and Money Market Fund, comprising the State Farm Variable
Product Trust as of December 31, 1998, and the related statements of operations
and changes in net assets and the financial highlights for the periods indicated
therein. These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audit.
We conducted our audit 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. Our
procedures included confirmation of investments owned as of December 31, 1998,
by correspondence 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, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the Funds of the State Farm Variable Product Trust at December 31, 1998, the
results of their operations, the changes in their net assets and the financial
highlights for the periods indicated therein in conformity with generally
accepted accounting principles.
/s/ Ernst & Young LLP
Chicago, Illinois
January 22, 1999
65-------
<PAGE>
(This page has been left blank intentionally.)
<PAGE>
NOTICE OF WITHHOLDING ELECTION
This notice does not apply to distributions which qualify as eligible
rollover distributions from tax-sheltered annuities (TSAs) and qualified
employer retirement plans. We may be required to withhold 20% federal income
tax on such eligible rollover distributions. To determine whether your
distribution qualifies as an eligible rollover distribution and whether
withholding applies, see the Special Tax Notice Regarding Plan Payments which
is enclosed in the quarterly statements for TSA and qualified employer
retirement plan participants.
Proceeds from your account not subject to the mandatory withholding described
above, may be subject to federal and state income tax withholding unless you
elect not to have withholding apply. Withholding will only apply to the
portion of your distribution that is included in your income subject to
federal income tax. There will be no withholding on non-taxable distributions.
We are required by Federal Income Tax law to notify you of your right to
elect not to have taxes withheld from any actual or deemed distribution, or
to revoke your election to have taxes withheld, if one is in effect. If an
election has not been filed with us, we are required to withhold 10% of the
taxable amount of your distribution for federal income taxes.
You may have made a previous withholding election. If so, that election will
continue in force until you change your election. If you elect not to have
withholding apply to your distribution, or if you do not have enough federal
income tax withheld from your distribution, you may be responsible for
payment of estimated tax and you may incur penalities if your withholding and
estimated tax payments are not sufficient.
You may establish, change or revoke your Withholding Election at any time by
one of the following methods:
- complete and mail this form to:
STATE FARM VARIABLE PRODUCTS
ADMINISTRATION DEPARTMENT
P.O. BOX 2307
BLOOMINGTON, IL 61702-2307 or
- call our TOLL FREE NUMBER 1-888-702-2307 (if you have telephone
authority) or
- fax the election form to 1-309-735-0307 and mail the original to us.
If we receive your election using any of the above mentioned methods at least
10 days prior to your next scheduled payment, your next check will reflect
the change. Otherwise, the change will be reflected on any subsequent
payments.
<PAGE>
WITHHOLDING ELECTION FORM
- -------------------------------------------------------------------------------
(Type or print your full name)
- -------------------------------------------------------------------------------
(Your Social Security Number)
- -------------------------------------------------------------------------------
(Home address-number & street or rural route)
- -------------------------------------------------------------------------------
(City or town, state and ZIP code)
- -------------------------------------------------------------------------------
(Policy Number)
- ---------------------------------------
(Date)
/ / 1. I elect NOT to have federal income tax withheld from my distribution
(Do not complete lines 2-4.)
If you elect not to have withholding apply to your distribution, or if you do
not have enough federal income tax withheld from your distribution, you may
be responsible for payment of estimated tax and you may incur penalities if
your withholding and estimated tax payments are not sufficient.
/ / 2. I want FEDERAL withholding from my distribution
If you would like an additional amount of federal withholding taken from the
taxable distribution amount, please indicate the additional withholding
amount (not less than $5.00) or percentage (not less than 10%)
- --------------------
/ / 3. I elect not to have STATE income tax withheld from my distribution
/ / 4. I want STATE withholding from my distribution
If you would like an additional amount of state withholding taken from your
payment, please indicate the additional withholding amount $
----------------
(Note: not all states allow withholding or specify rates of withholding. If
you indicate withholding or an amount and reside in a state where withholding
is not allowed, no state tax will be withheld. If you do not indicate you
want withholding or specify an amount and reside in a state that requires
withholding at your request only, no state tax will be withheld.)
/ / 5. Other: (please specify)
-------------------------------------------------
-------------------------------------------------
- -------------------------------------------------------------------------------
(Participant's Signature)
- ---------------------------------------
(Date)
Return your completed form to: STATE FARM VARIABLE PRODUCTS
ADMINISTRATION DEPARTMENT
P.O. BOX 2307
BLOOMINGTON, IL 61702-2307
<PAGE>
PRODUCTS SERVICES
INSURANCE PRODUCTS AND SERVICES WE CAN PROVIDE*
LIFE INSURANCE
Family Insurance
Mortgage Life Insurance
Estate Analysis
Life Insurance for Business Owners
Universal Life Insurance
Variable Universal Life Insurance
Annuities
Variable Annuity
Final Expense
Second-to-Die
FIRE INSURANCE
Homeowners
Renters
Mobile Homes
Manufactured Homes
Business
Apartment Buildings
Condominium/Association
Church
Contractors
Rental Condominium
Commercial
Liability Umbrella Policies
Boatowners
Personal Articles Policy
RETIREMENT PLANNING
IRA (Individual Retirement Annuity)
TSA (Tax Sheltered Annuity)
Business Retirement Plans
(funded with life insurance)
HEALTH INSURANCE
Hospital Surgical
Hospital Income
Disability Income
Medicare Supplement
Long-Term Care
CAR INSURANCE
Personal Cars
Business Cars
Motorcycles
Travel Trailers
Fleets
Snowmobiles
Motorhomes
Car Finance Plan
*All products and services may not be available in all states.
<PAGE>
You can only invest in our underlying funds through the purchase of a
Variable Universal Life Insurance policy or Variable Deferred Annuity policy.
This report and any financial information contained herein are submitted for
the general information of the owners of interest in State Farm Life
Insurance Company Variable Life Separate Account or State Farm Life Insurance
Company Variable Annuity Separate Account (the "Accounts"). This report is
not authorized for distribution to prospective investors in either Account
unless preceded or accompanied by an effective prospectus for the relevant
Account. Interests in the Accounts are not deposits or obligations of, or
guaranteed by, any bank or depository institution. Interests in the Accounts
are not insured by the Federal Deposit Insurance Corporation, Federal Reserve
Board or any other agency, and are subject to investment risks, including
possible loss of principal amount invested. For more information on either
Account, including charges and expenses, call or write for a free prospectus.
Read the prospectus carefully before you invest or send money.
[LOGO]
Issued By:
State Farm Life Insurance Company
(Not licensed in New York or Wisconsin)
State Farm Life and Accident Assurance Company
(Licensed in New York and Wisconsin)
Home offices: Bloomington, Illinois
State Farm VP Management Corp.
(Underwriter & Distributor of Variable Products)
One State Farm Plaza
Bloomington, Illinois 61710-0001
1-888/702-2307
231-3571-411H
