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HOTCHKIS AND WILEY VARIABLE TRUST
EQUITY INCOME VIP PORTFOLIO
FUND PROFILE
April 30, 1999
This profile contains key information about the Fund that is included in the
Fund's prospectus. It is intended for use with a variable contract and is not
intended for other investors. The prospectus includes additional information
about the Fund, including a more detailed description of the risks associated
with investing in the Fund that you may want to consider before you invest. You
may obtain the prospectus and other information about the Fund at no cost from
the insurance company issuing the variable contract.
1. Fund Objective
The investment objective of the Equity Income VIP Portfolio (the "Fund") is
to provide current income and long-term growth of income, accompanied by growth
of capital.
2. Principal Investment Strategies of the Fund
The Fund seeks to achieve its objective by investing mostly in common stocks of
large U.S. companies. Normally, the Fund invests at least 80% of its total
assets in stocks that pay dividends. It also may invest in stocks that don't pay
dividends or interest, but have growth potential unrecognized by the market or
changes in business or management that indicate growth potential.
In investing the Fund, the Advisor follows a value style. This means that the
Advisor buys stocks that it believes are currently undervalued by the market
and thus have a lower price than their true worth. Typical value
characteristics include:
- low price-to-earnings ratio relative to the market
- high dividend yield relative to the market
- low price-to-book value ratio relative to the market
- financial strength
Additional information about the Fund's investments is available in the Fund's
annual and semi-annual reports to shareholders. In the Fund's annual report you
will find a discussion of the market conditions and investment strategies that
significantly affected the Fund's performance during the last fiscal year. You
may obtain either or both of these reports at no cost from the insurance company
issuing the variable contract.
3. Principal Risks of Investing in the Fund
As with any mutual fund, the value of the Fund's investments, and therefore the
value of Fund shares, may go up or down. These changes may occur because the
stock market is rising or falling. At other times, there are specific factors
that may affect the value of a particular investment. If the value of the
Fund's investments goes down, you may lose money.
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4. Fees and Expenses of the Fund
The Advisor is paid a fee from the Fund's assets, computed daily and payable
monthly, at an annual rate of 0.75% of the Fund's average daily net assets. The
Advisor has voluntarily agreed to pay all annual Fund expenses in excess of
1.15% of the Fund's average daily net assets.
Mortality and expense risk fees and other charges may be assessed by
Participating Insurance Companies to investors under the variable annuity
contracts or variable life insurance policies. Investors should refer to the
prospectus of the Participating Insurance Company's separate account for
information on fees. The Separate Account prospectus sets out examples of
aggregate Fund and Separate Account charges.
5. Investment Advisor and Portfolio Managers of the Fund
Hotchkis and Wiley acts as Advisor to the Fund and generally administers the
affairs of the Hotchkis and Wiley Variable Trust. The Advisor is a division of
Merrill Lynch Asset Management, L.P. Gail Bardin and Sheldon Lieberman serve as
the portfolio managers. They have had responsibility for the day-to-day
management of the Fund's portfolio since it began operations in March 1998. Ms.
Bardin is a managing director of the Advisor and has served as a portfolio
manager of the Advisor since 1988. Mr. Lieberman joined the Advisor in 1994 and
has served as a portfolio manager since then.
6. Purchase of Fund Shares
Investors may not purchase shares of the Fund directly, but only through
variable annuity contracts and variable life insurance policies offered through
separate accounts of Participating Insurance Companies. Investors should refer
to the prospectus of the Participating Insurance Company's separate account for
information on how to purchase a variable annuity contract or variable life
insurance policy.
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7. Sale of Fund Shares
Investors may not redeem shares of the Fund directly, but only through variable
annuity contracts and variable life insurance policies offered through separate
accounts of Participating Insurance Companies. Investors should refer to the
prospectus of the Participating Insurance Company's separate account for
information on how to redeem monies from the applicable contract or policy.
8. Fund Distributions and Tax Information
The Fund expects to pay income dividends quarterly. Net capital gains, if any,
will be distributed annually. Dividends and distributions are paid in full and
fractional shares based on the net asset value per share at the close of
business on the record date. The tax consequences of an investment in the Fund
are governed by the terms of the variable annuity contract or variable life
insurance policy through which you invest. Investors should refer to the
prospectus of the Participating Insurance Company's separate account for tax
information.
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HOTCHKIS AND WILEY VARIABLE TRUST
INTERNATIONAL VIP PORTFOLIO
FUND PROFILE
April 30, 1999
This profile contains key information about the Fund that is included in the
Fund's prospectus. It is intended for use with a variable contract and is not
intended for other investors. The prospectus includes additional information
about the Fund, including a more detailed description of the risks associated
with investing in the Fund that you may want to consider before you invest. You
may obtain the prospectus and other information about the Fund at no cost from
the insurance company issuing the variable contract.
1. Fund Objective
The investment objective of the International VIP Portfolio (the "Fund") is
to provide current income and long-term growth of income, accompanied by growth
of capital.
2. Principal Investment Strategies of the Fund
The Fund seeks to achieve its objective by investing at least 65% of its total
assets in stocks in at least ten foreign markets.
Ordinarily, the Fund invests in stocks of companies located in the developed
foreign markets and invests at least 80% of its total assets in stocks that pay
dividends. It also may invest in stocks that don't pay dividends or interest,
but have growth potential unrecognized by the market or changes in business or
management that indicate growth potential.
In investing the Fund, the Advisor follows a value style. This means that the
Advisor buys stocks that it believes are currently undervalued by the market
and thus have a lower price than their true worth. Typical value
characteristics include:
- low price-to-earnings ratio relative to the market
- high dividend yield relative to the market
- low price-to-book value ratio relative to the market
- financial strength
Additional information about the Fund's investments is available in the Fund's
annual and semi-annual reports to shareholders. In the Fund's annual report, you
will find a discussion of the market conditions and investment strategies that
significantly affected the Fund's performance during the last fiscal year. You
may obtain either or both of these reports at no cost from the insurance
company issuing the variable contract.
3. Principal Risks of Investing in the Fund
As with any mutual fund, the value of the Fund's investments, and therefore the
value of Fund shares, may go up or down. These changes may occur because the
stock market is rising or falling. At other times, there are specific factors
that may affect the value of a particular investment. If the value of the
Fund's investments goes down, you may lose money.
Because the Fund invests in foreign securities, there are additional risks. For
example, the securities may go up or down in value depending on foreign
exchange rates, foreign political and economic developments and U.S. and
foreign laws relating to foreign investment. Foreign securities may also be
less liquid, more volatile and harder to value than U.S. securities.
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4. Fees and Expenses of the Fund
The Advisor is paid a fee from the Fund's assets, computed daily and payable
monthly, at an annual rate of 0.75% of the Fund's average daily net assets. The
Advisor has voluntarily agreed to pay all annual Fund expenses in excess of
1.35% of the Fund's average daily net assets.
Mortality and expense risk fees and other charges may be assessed by
Participating Insurance Companies to investors under the variable annuity
contracts or variable life insurance policies. Investors should refer to the
prospectus of the Participating Insurance Company's separate account for
information on fees. The Separate Account prospectus sets out examples of
aggregate Fund and Separate Account charges.
5. Investment Advisor and Subadvisors and Portfolio Managers of the Fund
Hotchkis and Wiley acts as Advisor to the Fund and generally administers the
affairs of the Hotchkis and Wiley Variable Trust. The Advisor is a division of
Merrill Lynch Asset Management, L.P. Mercury Asset Management International and
Merrill Lynch Asset Management U.K. Limited, affiliated investment advisors that
are indirect subsidiaries of Merrill Lynch & Co., Inc., provide
investment-related services to the Advisor for the Fund. Sarah Ketterer, Harry
Hartford and David Chambers have served as the portfolio managers since the Fund
began operations in June 1998. They have responsibility for the day-to-day
management of the Fund's portfolio. Ms. Ketterer is a managing director of the
Advisor, where she has been employed for more than five years. Mr. Hartford has
been a portfolio manager of the Advisor since 1994. Mr. Chambers joined the
Advisor in 1995 from Baring Asset Management, Inc., where he was Senior Vice
President, Global Equities since 1992. He has been associated with Mercury
Asset Management International since July 1998.
6. Purchase of Fund Shares
Investors may not purchase shares of the Fund directly, but only through
variable annuity contracts and variable life insurance policies offered through
separate accounts of Participating Insurance Companies. Investors should refer
to the prospectus of the Participating Insurance Company's separate account for
information on how to purchase a variable annuity contract or variable life
insurance policy.
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7. Sale of Fund Shares
Investors may not redeem shares of the Fund directly, but only through variable
annuity contracts and variable life insurance policies offered through separate
accounts of Participating Insurance Companies. Investors should refer to the
prospectus of the Participating Insurance Company's separate account for
information on how to redeem monies from the applicable contract or policy.
8. Fund Distributions and Tax Information
The Fund expects to pay income dividends annually. Net capital gains, if any,
also will be distributed annually. Dividends and distributions are paid in full
and fractional shares based on the net asset value per share at the close of
business on the record date. The tax consequences of an investment in the Fund
are governed by the terms of the variable annuity contract or variable life
insurance policy through which you invest. Investors should refer to the
prospectus of the Participating Insurance Company's separate account for tax
information.
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HOTCHKIS AND WILEY VARIABLE TRUST
TOTAL RETURN BOND VIP PORTFOLIO
FUND PROFILE
April 30, 1999
This Profile contains key information about the Fund that is included in the
Fund's prospectus. It is intended for use with a variable contract and is not
intended for other investors. The prospectus includes additional information
about the Fund, including a more detailed description of the risks associated
with investing in the Fund that you may want to consider before you invest. You
may obtain the prospectus and other information about the Fund at no cost from
the insurance company issuing the variable contract.
1. Fund Objective
The investment objective of the Total Return Bond VIP Portfolio (the "Fund")
is to maximize long-term total return.
2. Principal Investment Strategies of the Fund
The Fund will seek to achieve its objective by investing in a diversified
portfolio of bonds of varying maturities with a portfolio duration of two to
eight years. Portfolio holdings will be concentrated in areas of the bond market
(based on quality, sector, coupon or maturity) which the Advisor believes to be
relatively undervalued. Under normal circumstances, at least 85% of the Fund's
total assets will be investment grade.
Additional information about the Fund's investments will be available in annual
and semi-annual reports to shareholders. In the Fund's annual report for fiscal
year 1999, you will find a discussion of the market conditions and investment
strategies that significantly affected the Fund's performance during the fiscal
year. You may obtain either or both of the reports at no cost from the
insurance company issuing the variable contract.
3. Principal Risks of Investing in the Fund
As with any mutual fund, the value of the Fund's investments, and therefore the
value of Fund shares, may go up or down. These changes may occur in response to
interest rate changes or other factors that may affect a particular issuer or
obligation. Generally, when interest rates go up, the value of bonds goes down.
The value of the Fund's shares also may be affected by market conditions and
economic or political developments. If the value of the Fund's investments goes
down, you may lose money.
Because the Fund invests in foreign securities, there are additional risks. For
example, the securities may go up or down in value depending on foreign
exchange rates, foreign political and economic developments and U.S. and
foreign laws relating to foreign investment. Foreign securities may also be
less liquid, more volatile and harder to value than U.S. securities. These
risks are heightened when the issuer of the securities is a country or is in a
country with an emerging capital market.
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4. Fees and Expenses of the Fund
The Advisor is paid a fee from the Fund's assets, computed daily and payable
monthly, at an annual rate of 0.55% of the Fund's average daily net assets. The
Advisor has voluntarily agreed to pay all annual Fund expenses in excess of
0.65% of the Fund's average daily net assets.
Mortality and expense risk fees and other charges may be assessed by
Participating Insurance Companies to investors under the variable annuity
contracts or variable life insurance policies. Investors should refer to the
prospectus of the Participating Insurance Company's separate account for
information on fees. The Separate Account prospectus sets out examples of
aggregate Fund and Separate Account charges.
5. Investment Advisor and Portfolio Managers of the Fund
Hotchkis and Wiley acts as Advisor to the Fund and generally administers the
affairs of the Hotchkis and Wiley Variable Trust. The Advisor is a division of
Merrill Lynch Asset Management, L.P. Roger DeBard, Michael Sanchez and John
Queen will serve as the portfolio managers when it begins operations. They will
have responsibility for the day-to-day management of the Fund's portfolio. Mr.
DeBard is a managing director of the Advisor and has served as a portfolio
manager of the Advisor since 1985. Mr. Sanchez has served as a portfolio manager
since joining the Advisor in August 1996. Before joining the Advisor, he was
with Provident Investment Counsel as a Senior Vice President and portfolio
manager from 1991 to 1995. Mr. Queen joined the Advisor in 1997. Before joining
the Advisor, Mr. Queen was associated with The Capital Group as a member of an
analyst team responsible for $8 billion in fixed-income assets.
6. Purchase of Fund Shares
Investors may not purchase shares of the Fund directly, but only through
variable annuity contracts and variable life insurance policies offered through
separate accounts of Participating Insurance Companies. Investors should refer
to the prospectus of the Participating Insurance Company's separate account for
information on how to purchase a variable annuity contract or variable life
insurance policy.
2
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7. Sale of Fund Shares
Investors may not redeem shares of the Fund directly, but only through variable
annuity contracts and variable life insurance policies offered through separate
accounts of Participating Insurance Companies. Investors should refer to the
prospectus of the Participating Insurance Company's separate account for
information on how to redeem monies from the applicable contract or policy.
8. Fund Distributions and Tax Information
The Fund expects to pay income dividends monthly. Net capital gains, if any,
will be distributed annually. Dividends and distributions are paid in full and
fractional shares based on the net asset value per share at the close of
business on the record date. The tax consequences of an investment in the Fund
are governed by the terms of the variable annuity contract or variable life
insurance policy through which you invest. Investors should refer to the
prospectus of the Participating Insurance Company's separate account for tax
information.
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HOTCHKIS AND WILEY VARIABLE TRUST
LOW DURATION VIP PORTFOLIO
FUND PROFILE
April 30, 1999
This Profile contains key information about the Fund that is included in the
Fund's prospectus. It is intended for use with a variable contract and is not
intended for other investors. The prospectus includes additional information
about the Fund, including a more detailed description of the risks associated
with investing in the Fund that you may want to consider before you invest. You
may obtain the prospectus and other information about the Fund at no cost from
the insurance company issuing the variable contract.
1. Fund Objective
The investment objective of the Low Duration VIP Portfolio (the "Fund") is to
maximize total return, consistent with preservation of capital.
2. Principal Investment Strategies of the Fund
The Fund seeks to achieve its objective by investing in a diversified portfolio
of bonds of varying maturities with a portfolio duration of one to three years.
Under normal circumstances, at least 90% of the Fund's assets will be investment
grade.
Additional information about the Fund's investments is available in the Fund's
annual and semi-annual reports to shareholders. In the Fund's annual report you
will find a discussion of the market conditions and investment strategies that
significantly affected the Fund's performance during the last fiscal year. You
may obtain either or both of these reports at no cost from the insurance
company issuing the variable contract.
3. Principal Risks of Investing in the Fund
As with any mutual fund, the value of the Fund's investments, and therefore the
value of Fund shares, may go up or down. These changes may occur in response to
interest rate changes or other factors that may affect a particular issuer or
obligation. Generally, when interest rates go up, the value of bonds goes down.
The value of the Fund's shares also may be affected by market conditions and
economic or political developments. If the value of the Fund's investments goes
down, you may lose money.
Because the Fund invests in foreign securities, there are additional risks. For
example, the securities may go up or down in value depending on foreign
exchange rates, foreign political and economic developments and U.S. and
foreign laws relating to foreign investment. Foreign securities may also be
less liquid, more volatile and harder to value than U.S. securities. These
risks are heightened when the issuer of the securities is a country or is in a
country with an emerging capital market.
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4. Fees and Expenses of the Fund
The Advisor is paid a fee from the Fund's assets, computed daily and payable
monthly, at an annual rate of 0.46% of the Fund's average daily net assets. The
Advisor has voluntarily agreed to pay all Fund expenses in excess of 0.58% of
the Fund's average daily net assets.
Mortality and expense risk fees and other charges may be assessed by
Participating Insurance Companies to investors under the variable annuity
contracts or variable life insurance policies. Investors should refer to the
prospectus of the Participating Insurance Company's separate account for
information on fees. The Separate Account prospectus sets out examples of
aggregate Fund and Separate Account charges.
5. Investment Advisor and Portfolio Managers of the Fund
Hotchkis and Wiley acts as Advisor to the Fund and generally administers the
affairs of the Hotchkis and Wiley Variable Trust. The Advisor is a division of
Merrill Lynch Asset Management, L.P. Roger DeBard, Michael Sanchez and John
Queen serve as the portfolio managers. They have had responsibility for the
day-to-day management of the Fund's portfolio since it began operations in March
1998. Mr. DeBard is a managing director of the Advisor and has served as a
portfolio manager of the Advisor since 1985. Mr. Sanchez has served as a
portfolio manager since joining the Advisor in August 1996. Before joining the
Advisor, he was with Provident Investment Counsel as a Senior Vice President and
portfolio manager from 1991 to 1995. Mr. Queen joined the Advisor in 1997.
Before joining the Advisor, Mr. Queen was associated with The Capital Group as a
member of an analyst team responsible for $8 billion in fixed-income assets.
6. Purchase of Fund Shares
Investors may not purchase shares of the Fund directly, but only through
variable annuity contracts and variable life insurance policies offered through
separate accounts of Participating Insurance Companies. Investors should refer
to the prospectus of the Participating Insurance Company's separate account for
information on how to purchase a variable annuity contract or variable life
insurance policy.
2
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7. Sale of Fund Shares
Investors may not redeem shares of the Fund directly, but only through variable
annuity contracts and variable life insurance policies offered through separate
accounts of Participating Insurance Companies. Investors should refer to the
prospectus of the Participating Insurance Company's separate account for
information on how to redeem monies from the applicable contract or policy.
8. Fund Distributions and Tax Information
The Fund expects to pay income dividends monthly. Net capital gains, if any,
will be distributed annually. Dividends and distributions are paid in full and
fractional shares based on the net asset value per share at the close of
business on the record date. The tax consequences of an investment in the Fund
are governed by the terms of the variable annuity contract or variable life
insurance policy through which you invest. Investors should refer to the
prospectus of the Participating Insurance Company's separate account for tax
information.
3
