<PAGE>
[WELLS FARGO FUNDS LOGO]
Semi-Annual Report
VARIABLE TRUST
June 30, 2000
[GRAPHIC]
VARIABLE TRUST ASSET ALLOCATION FUND
VARIABLE TRUST CORPORATE BOND FUND
VARIABLE TRUST EQUITY INCOME FUND
VARIABLE TRUST EQUITY VALUE FUND
VARIABLE TRUST GROWTH FUND
VARIABLE TRUST LARGE COMPANY GROWTH FUND
VARIABLE TRUST MONEY MARKET FUND
VARIABLE TRUST SMALL CAP GROWTH FUND
<PAGE>
VARIABLE TRUST
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TABLE OF CONTENTS
LETTER TO CONTRACTHOLDER ........................... 1
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PERFORMANCE HIGHLIGHTS
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VARIABLE TRUST ASSET ALLOCATION FUND .................... 2
VARIABLE TRUST CORPORATE BOND FUND ..................... 4
VARIABLE TRUST EQUITY INCOME FUND ..................... 6
VARIABLE TRUST EQUITY VALUE FUND ...................... 8
VARIABLE TRUST GROWTH FUND ........................ 10
VARIABLE TRUST LARGE COMPANY GROWTH FUND ................. 12
VARIABLE TRUST MONEY MARKET FUND ..................... 14
VARIABLE TRUST SMALL CAP GROWTH FUND ................... 16
PORTFOLIO OF INVESTMENTS
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VARIABLE TRUST ASSET ALLOCATION FUND ................... 18
VARIABLE TRUST CORPORATE BOND FUND .................... 33
VARIABLE TRUST EQUITY INCOME FUND ..................... 38
VARIABLE TRUST EQUITY VALUE FUND ..................... 41
VARIABLE TRUST GROWTH FUND ........................ 45
VARIABLE TRUST LARGE COMPANY GROWTH FUND ................. 49
VARIABLE TRUST MONEY MARKET FUND ..................... 51
VARIABLE TRUST SMALL CAP GROWTH FUND ................... 53
FINANCIAL STATEMENTS
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STATEMENTS OF ASSETS AND LIABILITIES ................... 58
STATEMENTS OF OPERATIONS ......................... 60
STATEMENTS OF CHANGES IN NET ASSETS .................... 62
FINANCIAL HIGHLIGHTS ........................... 66
NOTES TO FINANCIAL HIGHLIGHTS ........................ 68
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NOTES TO FINANCIAL STATEMENTS ........................ 69
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LIST OF ABBREVIATIONS ............................ 75
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NOT FDIC INSURED--NO BANK GUARANTEE--MAY LOSE VALUE
<PAGE>
VARIABLE TRUST
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DEAR VALUED CONTRACTHOLDER,
The six-month period ended June 30, 2000, was a challenging time for
investors, as the financial markets began the year with solid gains only to
slide into negative territory over the ensuing months. After several years of
unprecedented gains, risk and volatility have returned to the marketplace,
which underscores the importance of diversification and a long-term investment
horizon.
The impact of rising interest rates contributed to the stock market's
lackluster performance. During the period, the Federal Reserve Board (the Fed)
raised interest rates on three occasions, including a half-point increase on
May 16, 2000, in an attempt to cool the fast-growing economy and contain
mounting inflationary pressures. Rising rates translated into higher borrowing
costs, which hurt company earnings. To compound the problem, surprises on the
corporate profit front often sent entire market sectors into a swoon.
The Nasdaq Composite Index (Nasdaq), a proxy for New Economy stocks, bore the
brunt of the market volatility. After reaching a record of 5048 on March 10,
the technology-laden Nasdaq plummeted nearly 40% by late May, then rebounded
in June before closing the period with a slight loss. The Dow Jones Industrial
Average, which is dominated by Old Economy stocks, embarked on a similar
rollercoaster ride to end the second quarter with a 9% loss. Overseas, most
international markets have fared poorly year-to-date as well.
The period also was characterized by high-speed rotation among sectors, with
market leadership shifting from small-cap growth stocks to large-cap value
stocks, and ultimately back to small-cap stocks. Small-cap growth and
small-cap value stocks emerged as the period's best performers, ending the
period with solid gains.
In contrast to the struggling equity market, the bond market staged an
impressive rally over the first half of the year. Buoyed by contracting
supply, the 30-year U.S. Treasury bond defied the Fed's short-term rate
increases to post strong returns. In fact, during this period, the total
return on the 30-year U.S. Treasury bond climbed more than 10%.
Intermediate-term bonds also rallied, with the yield on the 10-year U.S.
Treasury note declining by 1% since its January high. Yet high-yield corporate
bonds could not escape the impact of higher interest rates and a rash of
company defaults, which sent the price of non investment-grade bonds lower.
Although preliminary data suggests that the economy is beginning to slow
under the weight of tighter economic conditions, it's too early to determine
whether the Fed has shifted to a neutral monetary policy. Regardless of the
Fed's future actions, we encourage investors to maintain a long-term outlook.
Keep in mind that markets move in cycles, and after five consecutive years of
double-digit gains, investors can expect to encounter periods of uncertainty.
Amid volatile markets, it's also important to maintain a balanced portfolio
to weather rapidly changing conditions. If you have any questions about your
investments or need further information, please contact your investment
professional, or call us at 1-800-222-8222.
In closing, we wish to thank you for choosing Wells Fargo Funds. We value
your business and will continue to offer an expanding array of quality
investments designed to help you achieve your personal goals.
/s/ MICHAEL J. HOGAN
MICHAEL J. HOGAN
PRESIDENT,
WELLS FARGO FUNDS
1
<PAGE>
VARIABLE TRUST PERFORMANCE HIGHLIGHTS
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VARIABLE TRUST ASSET ALLOCATION FUND
INVESTMENT OBJECTIVE
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The Variable Trust Asset Allocation Fund (the Fund) seeks long-term total
return, consistent with reasonable risk.
ADVISOR
Wells Fargo Bank, N.A.
SUB-ADVISOR
Barclays Global Fund Advisors, N.A.
FUND MANAGERS
Team managed
INCEPTION DATE
04/15/94
PERFORMANCE HIGHLIGHTS
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The Fund returned 4.04%(1) for the six-month period ended June 30, 2000. The
Fund's benchmark is allocated 60% S&P 500 Index(2), which returned (0.42)%
during the period, and 40% Lehman Brothers Treasury 20+ Year Index(3), which
returned 10.01%, for a combined benchmark return of 3.75% for the period. The
Fund distributed $0.17 per share in dividend income and no capital gains
during the period. Please keep in mind that past performance is no guarantee
of future results.
Equity markets stumbled early in the year on news of impending interest rate
increases designed to slow the nation's fast-growing economy. Large-cap stocks
were hardest hit, dragged down by a sell-off in the technology sector. In
contrast, the bond market rallied, with the 30-year U.S. Treasury bond posting
a total return of 9.06% for the second quarter, a significant improvement from
a loss of nearly 15% in 1999. Against this backdrop, the Fund increased its
bond holdings to capture gains in the bond market before ending the period at
an allocation of 62% stocks and 38% fixed-income securities.
The second quarter was significantly more volatile, with the Nasdaq Composite
Index(4) falling 25% during the second week of April. The S&P 500 Index also
lost ground following a half-point interest rate increase, while long-term
bonds surrendered part of their first quarter gains. Equity and bond markets
rebounded in June when preliminary economic data pointed to signs of an
economic slowdown, yet stocks remained in negative territory at the end of the
second quarter.
STRATEGIC OUTLOOK
--------------------------------------------------------------------------------
A sustained slowdown in economic growth may convince the Federal Reserve
Board to hold off on additional interest rate increases. Stable or falling
interest rates should prove beneficial for both stocks and bonds.
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(1) FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE
RESULTS. Investment return and principal value of an investment will fluctuate
so that an investor's shares, when redeemed, may be worth more or less than
their original cost. The Fund's Advisor has committed through April 30, 2001 to
waive fees and/or reimburse expenses to the extent necessary to maintain a
certain net operating expense ratio for the Fund. Actual reductions of operating
expenses can increase total return to shareholders. Without these reductions,
the Fund's returns would have been lower. Performance figures of the Fund do not
reflect charges pursuant to the terms of the variable life insurance policies
and variable annuity contracts funded by separate accounts that invest in the
Fund's shares.
Performance shown for the Wells Fargo Variable Trust Asset Allocation Fund for
periods prior to September 20, 1999, reflects performance of the Life and
Annuity Trust Asset Allocation Fund, its predecessor fund. Effective at the
close of business September 17, 1999, the Life and Annuity Trust and Norwest
Select Funds were reorganized into the Wells Fargo Variable Trust Funds.
2
<PAGE>
PERFORMANCE HIGHLIGHTS VARIABLE TRUST
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AVERAGE ANNUAL TOTAL RETURN(1) (%) (AS OF JUNE 30, 2000)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Since
6-Month* 1-Year 5-Year Inception
<S> <C> <C> <C> <C>
VARIABLE TRUST ASSET
ALLOCATION FUND 4.04 7.20 16.09 15.93
BENCHMARK
S&P 500 INDEX (0.42) 7.25 23.80
LEHMAN BROTHERS TREASURY 20+
YEAR INDEX 10.01 6.91 7.61
</TABLE>
* RETURNS FOR PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED.
CHARACTERISTICS (AS OF JUNE 30, 2000)
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<TABLE>
<S> <C>
PORTFOLIO TURNOVER 25%
NUMBER OF HOLDINGS 528
WEIGHTED AVERAGE MATURITY OF BOND PORTFOLIO 23.8 YEARS
ESTIMATED DURATION OF BOND PORTFOLIO 11.7 YEARS
NAV $14.83
</TABLE>
TEN LARGEST HOLDINGS(5) (AS OF JUNE 30, 2000)
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<TABLE>
<S> <C>
UST BOND, 8.00%, 11/15/21 3.77%
UST BOND, 8.75%, 8/15/20 2.76%
UST BOND, 6.25%, 8/15/23 2.75%
UST BOND, 6.125%, 11/15/27 2.66%
GENERAL ELECTRIC COMPANY 2.60%
INTEL CORPORATION 2.22%
CISCO SYSTEMS, INCORPORATED 2.20%
MICROSOFT CORPORATION 2.09%
UST BILL, DUE 8/3/00 1.87%
UST BOND, 7.625%, 2/15/25 1.83%
</TABLE>
SECTOR DISTRIBUTION(6) (AS OF JUNE 30, 2000)
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EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
U.S. Treasury
Securities 35%
Technology 21%
Financial 9%
Health Care 7%
Consumer Cyclical 4%
Consumer Non-Cyclical 4%
Energy 4%
Telecommunications 4%
Cash 3%
Consumer Services 3%
Basic Materials 2%
Industrials 2%
Commercial Services 1%
Utilities 1%
</TABLE>
GROWTH OF $10,000 CHART(7)
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EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
WELLS FARGO VARIABLE TRUST LEHMAN BROTHERS
ASSET ALLOCATION FUND TREASURY 20+ YEAR INDEX S&P 500 INDEX
<S> <C> <C> <C>
4/94 $10,000 $10,000 $10,000
5/94 $9,940 $9,917 $10,164
6/94 $9,796 $9,815 $9,915
7/94 $10,107 $10,178 $10,241
8/94 $10,248 $10,078 $10,660
9/94 $9,964 $9,733 $10,400
10/94 $10,055 $9,702 $10,633
11/94 $9,954 $9,771 $10,246
12/94 $10,113 $9,932 $10,398
1/95 $10,384 $10,202 $10,668
2/95 $10,707 $10,488 $11,083
3/95 $10,894 $10,588 $11,409
4/95 $11,137 $10,778 $11,745
5/95 $11,686 $11,667 $12,214
6/95 $11,870 $11,808 $12,497
7/95 $12,031 $11,598 $12,911
8/95 $12,127 $11,876 $12,944
9/95 $12,438 $12,111 $13,490
10/95 $12,514 $12,475 $13,442
11/95 $12,860 $12,799 $14,031
12/95 $13,041 $13,168 $14,301
1/96 $13,284 $13,152 $14,788
2/96 $13,180 $12,455 $14,925
3/96 $13,256 $12,185 $15,068
4/96 $13,233 $11,970 $15,290
5/96 $13,350 $11,906 $15,683
6/96 $13,531 $12,172 $15,742
7/96 $13,223 $12,171 $15,047
8/96 $13,199 $11,997 $15,364
9/96 $13,705 $12,347 $16,227
10/96 $14,185 $12,864 $16,675
11/96 $14,917 $13,324 $17,934
12/96 $14,535 $12,976 $17,579
1/97 $14,815 $12,859 $18,678
2/97 $14,853 $12,862 $18,824
3/97 $14,323 $12,508 $18,050
4/97 $14,904 $12,827 $19,126
5/97 $15,406 $12,975 $20,294
6/97 $15,820 $13,246 $21,197
7/97 $16,903 $14,096 $22,883
8/97 $16,211 $13,660 $21,601
9/97 $16,822 $14,065 $22,783
10/97 $16,849 $14,583 $22,022
11/97 $17,232 $14,812 $23,041
12/97 $17,569 $15,075 $23,438
1/98 $17,833 $15,391 $23,696
2/98 $18,624 $15,268 $25,404
3/98 $19,295 $15,299 $26,705
4/98 $19,458 $15,350 $26,977
5/98 $19,354 $15,675 $26,513
6/98 $20,075 $16,087 $27,590
7/98 $19,881 $15,996 $27,297
8/98 $17,985 $16,778 $23,353
9/98 $18,996 $17,396 $24,850
10/98 $20,090 $17,100 $26,867
11/98 $21,065 $17,258 $28,496
12/98 $22,008 $17,218 $30,137
1/99 $22,760 $17,382 $31,406
2/99 $21,942 $16,453 $30,426
3/99 $22,567 $16,380 $31,643
4/99 $23,208 $16,393 $32,867
5/99 $22,715 $16,133 $32,092
6/99 $23,349 $15,935 $33,838
7/99 $22,838 $15,845 $32,781
8/99 $22,723 $15,770 $32,619
9/99 $22,394 $15,884 $31,725
10/99 $23,190 $15,886 $33,733
11/99 $23,389 $15,765 $34,418
12/99 $24,060 $15,486 $36,445
1/00 $23,560 $15,756 $34,615
2/00 $23,726 $16,315 $33,961
3/00 $25,436 $16,926 $37,283
4/00 $24,882 $16,758 $36,160
5/00 $24,463 $16,673 $35,419
6/00 $25,031 $17,036 $36,294
</TABLE>
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(2) The S&P 500 Index is an unmanaged index of 500 widely-held common stocks
representing, among others, industrial, financial, utility, and transportation
companies listed or traded on national exchanges or over-the-counter markets.
You cannot invest directly in an index.
(3) The Lehman Brothers Treasury 20+ Year Index is an unmanaged index composed
of securities in the U.S. Treasury Index with maturities of 20 years or greater.
The U.S. Treasury Index represents public obligations of the U.S. Treasury with
a remaining maturity of one year or more. You cannot invest directly in an
index.
(4) The Nasdaq Composite Index is a broad-based capitalization-weighted index
of all Nasdaq National Market & Small-Cap stocks. You cannot invest directly in
an index.
(5) The Ten Largest Holdings are calculated based on the market value of the
securities divided by total market value of the portfolio.
(6) Portfolio holdings are subject to change.
(7) The chart compares the performance of the Wells Fargo Variable Trust Asset
Allocation Fund since inception with the S&P 500 Index and the Lehman Brothers
Treasury 20+ Year Index. The chart assumes a hypothetical $10,000 investment and
reflects all operating expenses of the Fund. The Fund is a professionally
managed mutual fund.
3
<PAGE>
VARIABLE TRUST PERFORMANCE HIGHLIGHTS
--------------------------------------------------------------------------------
VARIABLE TRUST CORPORATE BOND FUND
INVESTMENT OBJECTIVE
--------------------------------------------------------------------------------
The Variable Trust Corporate Bond Fund (the Fund) seeks a high level of
current income, consistent with reasonable risk.
ADVISOR
Wells Fargo Bank, N.A.
SUB-ADVISOR
Wells Capital Management Incorporated
FUND MANAGERS
N. Graham Allen, FCMA
John W. (Jack) Burgess
Jacqueline A. Flippin
Daniel J. Kokoszka, CFA
Scott Smith, CFA
INCEPTION DATE
09/20/99
PERFORMANCE HIGHLIGHTS
--------------------------------------------------------------------------------
The Fund returned 2.60%(1) for the six-month period ended June 30, 2000,
slightly underperforming its benchmark, the Lehman Brothers U.S. Credit
Index(2), which returned 2.68%. The Fund distributed $0.32 per share in
dividend income and no capital gains during the period. Please keep in mind
that past performance is no guarantee of future results.
The Fund's defensive structure, which reduced its exposure to
investment-grade corporate bonds in favor of U.S. Treasury securities,
benefited the Fund's performance. Investment-grade bonds initially languished
as spreads widened amid the impact of higher interest rates, investors'
appetite for risk diminished, leveraged-buyout risk increased and monetary
policy was tight in the form of interest rate increases. In contrast, rising
default rates combined with shareholder redemptions contributed to the poor
performance of the Fund's high-yield bonds, which represented nearly 15% of
the portfolio holdings at the end of the period.
In an effort to enhance future performance, the Fund completed several
transactions during the period seeking to improve average credit quality,
while further diversifying its holdings to help offset market risk.
STRATEGIC OUTLOOK
--------------------------------------------------------------------------------
Amid mounting evidence of an economic slowdown, the Fund will seek to
opportunistically extend average maturity to capitalize on stable or declining
interest rates. The Fund will also focus on higher quality bonds, particularly
bonds with maturities of less than 10 years, issued by companies with solid
credit fundamentals.
--------------------------------------------------------------------------------
(1) FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE
RESULTS. Investment return and principal value of an investment will fluctuate
so that an investor's shares, when redeemed, may be worth more or less than
their original cost. The Fund's Advisor has committed through April 30, 2001 to
waive fees and/or reimburse expenses to the extent necessary to maintain a
certain net operating expense ratio for the Fund. Actual reductions of operating
expenses can increase total return to shareholders. Without these reductions,
the Fund's returns would have been lower. Performance figures of the Fund do not
reflect charges pursuant to the terms of the variable life insurance policies
and variable annuity contracts funded by separate accounts that invest in the
Fund's shares.
(2) The Fund changed its benchmark to the Lehman Brothers U.S. Credit Index,
formerly the Lehman Brothers Corporate Index, because it is more representative
of the Fund's average portfolio maturity and holdings. The Lehman Brothers U.S.
Credit Index is an unmanaged index composed of publicly issued U.S. corporate
and specified foreign debentures and secured notes that meet the specified
maturity, liquidity, and quality requirements. To qualify, bonds must be
SEC-registered. The Fund is a professionally managed mutual fund. You cannot
invest directly in an index.
4
<PAGE>
PERFORMANCE HIGHLIGHTS VARIABLE TRUST
--------------------------------------------------------------------------------
TOTAL RETURN(1) (%) (AS OF JUNE 30, 2000)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Since
1-Month 3-Month 6-Month 1-Year Inception
<S> <C> <C> <C> <C> <C>
VARIABLE TRUST CORPORATE
BOND FUND 2.32 (0.08) 2.60 3.11
BENCHMARK
LEHMAN BROTHERS U.S.
CREDIT INDEX 2.51 1.23 2.68 3.00
LEHMAN BROTHERS
CORPORATE LONG BOND
INDEX(3) 3.55 0.76 2.63 1.63
</TABLE>
CHARACTERISTICS (AS OF JUNE 30, 2000)
-----------------------------------------------------------
<TABLE>
<S> <C>
PORTFOLIO TURNOVER 65%
NUMBER OF HOLDINGS 200
AVERAGE CREDIT QUALITY(4) Baa1
NAV $9.75
DISTRIBUTION RATE(5) 6.59%
SEC YIELD(6) 7.02%
</TABLE>
PORTFOLIO ALLOCATION(7) (AS OF JUNE 30, 2000)
-----------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Corporate Bonds 52%
U.S. Treasury Bonds 29%
Non-Investment Grade Bonds (BB or lower) 14%
Mortgage-Backed Securities 3%
Foreign Denominated Securities 1%
Repurchase Agreements 1%
</TABLE>
GROWTH OF $10,000 CHART(8)
----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
WELLS FARGO VARIABLE LEHMAN BROTHERS LEHMAN BROTHERS
TRUST CORPORATE BOND FUND U.S. CREDIT INDEX CORPORATE LONG BOND INDEX
<S> <C> <C> <C>
8/99 $10,000 $10,000 $10,000
9/99 $10,005 $10,109 $10,106
10/99 $10,060 $10,155 $10,168
11/99 $10,030 $10,166 $10,151
12/99 $9,984 $10,112 $10,058
1/00 $9,958 $10,076 $10,039
2/00 $10,082 $10,170 $10,157
3/00 $10,252 $10,257 $10,245
4/00 $10,059 $10,166 $10,084
5/00 $10,011 $10,129 $9,969
6/00 $10,244 $10,383 $10,323
</TABLE>
--------------------------------------------------------------------------------
(3) The Lehman Brothers Corporate Long Bond Index is a total return index of
all publicly-issued, fixed-rate, non-convertible investment-grade domestic
corporate bonds and Yankee Bonds. All bonds have maturities of at least 10 years
or more. The returns are weighted by market value including accrued interest.
The bonds represented in this index are subject to investment risk, including
loss of principal, if sold prior to maturity, and also to default. You cannot
invest directly in an index.
(4) The average credit quality is compiled from the ratings of Standard &
Poor's and/or Moody's Investors Service (together "rating agencies").
Standard & Poor's is a trademark of McGraw-Hill, Inc., and has been licensed.
The Fund is not sponsored, sold or promoted by these rating agencies and these
rating agencies make no representation regarding the advisability of investing
in the Fund.
(5) The distribution rate is based on the actual distributions made by the
Fund. The distribution rate is calculated by annualizing the Fund's most recent
income dividend and dividing that figure by the applicable current public
offering price.
(6) The formula used to calculate the SEC yield is described in detail in the
Fund's Statement of Additional Information and is designed to standardize the
yield calculations so that all mutual fund companies with the same or similar
portfolios quote a uniform yield figure for their non-money market
advertisements. SEC yields include the actual amount of interest earned adjusted
by any gain or loss realized due to the return of principal, less expenses and
the maximum offering price calculated on a 30-day month-end basis.
(7) Portfolio holdings are subject to change.
(8) The chart compares the performance of the Wells Fargo Variable Trust
Corporate Bond Fund since inception with the Lehman Brothers U.S. Credit Index
and the Lehman Brothers Corporate Long Bond Index, the former benchmark for the
Fund. The chart assumes a hypothetical $10,000 investment and reflects all
operating expenses of the Fund. The Fund is a professionally managed mutual
fund.
5
<PAGE>
VARIABLE TRUST PERFORMANCE HIGHLIGHTS
--------------------------------------------------------------------------------
VARIABLE TRUST EQUITY INCOME FUND
INVESTMENT OBJECTIVE
--------------------------------------------------------------------------------
The Variable Trust Equity Income Fund (the Fund) seeks long-term capital
appreciation and above-average dividend income.
ADVISOR
Wells Fargo Bank, N.A.
SUB-ADVISOR
Wells Capital Management Incorporated
FUND MANAGERS
David L. Roberts, CFA
Gary J. Dunn, CFA
INCEPTION DATE
05/06/96
PERFORMANCE HIGHLIGHTS
--------------------------------------------------------------------------------
The Fund returned (4.53)%(1) for the six-month period ended June 30, 2000,
underperforming the S&P 500 Index(2), which returned (0.42)% and the Russell
1000 Value Index(3), which returned (4.23)%. The Fund distributed $0.09 per
share in dividend income and no capital gains during the period. Please keep
in mind that past performance is no guarantee of future results.
Fund performance was affected by several factors, including the negative
impact of a strong U.S. dollar on the portfolio's international holdings and
downturns in the communications, basic materials and consumer-related sectors.
Shares of AT&T, one of the Fund's largest holdings, slid in response to profit
warnings, while May Department Stores struggled amid soft retail sales. Target
Corporation also experienced declining share prices, even though the company's
current fundamentals and growth prospects remain solid.
The Fund benefited from its health care, energy and technology holdings.
Pfizer's merger with Warner-Lambert was well received by investors, while the
launch of new products boosted shares of American Home Products. In addition,
Schlumberger enjoyed strong performance thanks to firming prices and capital
spending in the energy sector.
During the period, the Fund eliminated its position in Pacific, Gas &
Electric and added to existing positions in IBM and Lucent Technologies to
increase its technology weighting. Weakness in Honeywell stock also presented
the Fund with an opportunity to add to its current position.
STRATEGIC OUTLOOK
--------------------------------------------------------------------------------
One aspect of the Fund's strategy is to capitalize on the global economic
recovery. Since the Fund has exposure to many U.S. companies that derive
significant revenues from global operations, the Fund should benefit as
foreign economies continue to improve.
--------------------------------------------------------------------------------
(1) FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE
RESULTS. Investment return and principal value of an investment will fluctuate
so that an investor's shares, when redeemed, may be worth more or less than
their original cost. The Fund's Advisor has committed through April 30, 2001 to
waive fees and/or reimburse expenses to the extent necessary to maintain a
certain net operating expense ratio for the Fund. Actual reductions of operating
expenses can increase total return to shareholders. Without these reductions,
the Fund's returns would have been lower. Performance figures of the Fund do not
reflect charges pursuant to the terms of the variable life insurance policies
and variable annuity contracts funded by separate accounts that invest in the
Fund's shares.
Performance shown for the Wells Fargo Variable Trust Equity Income Fund for
periods prior to September 20, 1999, reflects performance of the Norwest Select
Income Equity Fund, its predecessor fund. Effective at the close of business
September 17, 1999, the Life and Annuity Trust and Norwest Select Funds were
reorganized into the Wells Fargo Variable Trust Funds.
6
<PAGE>
PERFORMANCE HIGHLIGHTS VARIABLE TRUST
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(1) (%) (AS OF JUNE 30, 2000)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Since
6-Month* 1-Year Inception
<S> <C> <C> <C>
VARIABLE TRUST EQUITY INCOME FUND (4.53) (8.64) 13.67
BENCHMARK
RUSSELL 1000 VALUE INDEX (4.23) (8.92)
S&P 500 INDEX (0.42) 7.25
</TABLE>
* RETURNS FOR PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED.
CHARACTERISTICS
(AS OF JUNE 30, 2000)
-----------------------------------------------------------
<TABLE>
<S> <C>
PORTFOLIO TURNOVER 3%
NUMBER OF HOLDINGS 47
NAV $16.23
</TABLE>
TEN LARGEST EQUITY HOLDINGS(4)
(AS OF JUNE 30, 2000)
-----------------------------------------------------------
<TABLE>
<S> <C>
PEPSICO 4.66%
HEWLETT-PACKARD COMPANY 4.48%
LUCENT TECHNOLOGIES, INCORPORATED 4.13%
GENERAL ELECTRIC COMPANY 3.58%
IBM CORPORATION 3.58%
TYCO INTERNATIONAL LIMITED 3.57%
PFIZER, INCORPORATED 3.47%
ST. PAUL COMPANIES, INCORPORATED 3.31%
AMERICAN HOME PRODUCTS 3.05%
EXXON MOBIL CORPORATION 3.01%
</TABLE>
SECTOR DISTRIBUTION(5) (AS OF JUNE 30, 2000)
-----------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Technology 16%
Financial 15%
Health Care 12%
Consumer Non-Cyclical 10%
Basic Materials 8%
Energy 8%
Industrials 8%
Consumer Cyclical 6%
Consumer Services 5%
Telecommunications 5%
Commercial Services 4%
Utilities 3%
</TABLE>
GROWTH OF $10,000 CHART(6)
----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
WELLS FARGO VARIABLE TRUST
EQUITY INCOME FUND S&P 500 INDEX RUSSELL 1000 VALUE INDEX
<S> <C> <C> <C>
5/96 $10,000 $10,000 $10,000
5/96 $10,000 $10,257 $10,125
6/96 $10,110 $10,296 $10,133
7/96 $9,710 $9,841 $9,750
8/96 $9,830 $10,049 $10,029
9/96 $10,250 $10,613 $10,427
10/96 $10,490 $10,906 $10,831
11/96 $11,170 $11,730 $11,616
12/96 $10,995 $11,497 $11,467
1/97 $11,540 $12,216 $12,023
2/97 $11,691 $12,311 $12,200
3/97 $11,348 $11,805 $11,761
4/97 $11,681 $12,509 $12,255
5/97 $12,215 $13,273 $12,940
6/97 $12,719 $13,864 $13,495
7/97 $13,535 $14,966 $14,511
8/97 $12,910 $14,128 $13,995
9/97 $13,525 $14,901 $14,840
10/97 $13,132 $14,403 $14,426
11/97 $13,716 $15,070 $15,063
12/97 $13,953 $15,329 $15,503
1/98 $13,994 $15,498 $15,285
2/98 $14,902 $16,615 $16,313
3/98 $15,647 $17,466 $17,312
4/98 $15,800 $17,644 $17,428
5/98 $15,585 $17,340 $17,170
6/98 $15,830 $18,044 $17,389
7/98 $15,381 $17,853 $17,082
8/98 $13,545 $15,273 $14,540
9/98 $14,290 $16,252 $15,375
10/98 $15,290 $17,572 $16,566
11/98 $15,993 $18,637 $17,338
12/98 $16,523 $19,710 $17,929
1/99 $16,472 $20,540 $18,073
2/99 $16,482 $19,899 $17,818
3/99 $17,091 $20,695 $18,187
4/99 $17,959 $21,496 $19,885
5/99 $17,917 $20,989 $19,667
6/99 $18,630 $22,131 $20,237
7/99 $18,145 $21,440 $19,644
8/99 $17,856 $21,334 $18,915
9/99 $17,195 $20,749 $18,255
10/99 $17,659 $22,062 $19,307
11/99 $17,814 $22,510 $19,156
12/99 $17,829 $23,836 $19,248
1/00 $16,911 $22,640 $18,620
2/00 $15,607 $22,212 $17,237
3/00 $17,163 $24,384 $19,340
4/00 $17,132 $23,650 $19,115
5/00 $17,435 $23,165 $19,316
6/00 $17,021 $23,737 $18,433
</TABLE>
--------------------------------------------------------------------------------
(2) The S&P 500 Index is an unmanaged index of 500 widely-held common stocks
representing, among others, industrial, financial, utility and transportation
companies listed or traded on national exchanges or over-the-counter markets.
You cannot invest directly in an index.
(3) The Russell 1000 Value Index measures the performance of those Russell 1000
companies with lower price-to-book ratios and lower forecasted growth values.
You cannot invest directly in an index.
(4) The Ten Largest Equity Holdings are calculated based on the market value of
the securities divided by total market value of the portfolio.
(5) Portfolio holdings are subject to change.
(6) The chart compares the performance of the Wells Fargo Variable Trust Equity
Income Fund since inception with the S&P 500 Index and the Russell 1000 Value
Index. The chart assumes a hypothetical $10,000 investment and reflects all
operating expenses of the Fund. The Fund is a professionally managed mutual
fund.
7
<PAGE>
VARIABLE TRUST PERFORMANCE HIGHLIGHTS
--------------------------------------------------------------------------------
VARIABLE TRUST EQUITY VALUE FUND
INVESTMENT OBJECTIVE
--------------------------------------------------------------------------------
The Variable Trust Equity Value Fund (the Fund) seeks long-term capital
appreciation.
ADVISOR
Wells Fargo Bank, N.A.
SUB-ADVISOR
Wells Capital Management Incorporated
FUND MANAGERS
Allen Wisniewski, CFA
Gregg Giboney, CFA
Allan White
INCEPTION DATE
05/01/98
PERFORMANCE HIGHLIGHTS
--------------------------------------------------------------------------------
The Fund returned (2.44)%(1) for the six-month period ended June 30, 2000.
The Fund underperformed the S&P 500 Index(2), which returned (0.42)%, and
outperformed the Russell 1000 Value Index(3), which returned (4.23)%. The Fund
distributed $0.04 per share in dividend income and no capital gains during the
period. Please keep in mind that past performance is no guarantee of future
results.
Fund performance reflected overall weakness in equity markets, as rising
interest rates and inflationary concerns sent the market into a tailspin
during the first half of the year. A slowing economy hurt the basic materials
sector, while the Fund's extensive holdings of financial services stocks
performed poorly as interest rates climbed. However, with interest rates at or
near their peaks, the outlook for the financial services sector is promising.
The Fund benefited from its energy-related holdings, including Transocean,
Coastal Corporation and Williams Companies. The Fund also profited from
several well-timed purchases in the consumer staples sector, including Best
Foods, Pepsi and Clorox. And despite a volatile marketplace, the Fund's
technology stocks performed well during the period led by positions in
American Power Conversion and Philips Electronics.
STRATEGIC OUTLOOK
--------------------------------------------------------------------------------
The Fund will continue to implement a strategy that focuses on the purchase
of stocks with favorable valuations and performance potential. This strategy
has resulted in three consecutive quarters of outperformance compared to the
Russell 1000 Value Index. The Fund is also positioned for the potential to
perform well in an environment of declining interest rates and slower growth.
--------------------------------------------------------------------------------
(1) FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE
RESULTS. Investment return and principal value of an investment will fluctuate
so that an investor's shares, when redeemed, may be worth more or less than
their original cost. The Fund's Advisor has committed through April 30, 2001 to
waive fees and/or reimburse expenses to the extent necessary to maintain a
certain net operating expense ratio for the Fund. Actual reductions of operating
expenses can increase total return to shareholders. Without these reductions,
the Fund's returns would have been lower. Performance figures of the Fund do not
reflect charges pursuant to the terms of the variable life insurance policies
and variable annuity contracts funded by separate accounts that invest in the
Fund's shares.
Performance shown for the Wells Fargo Variable Trust Equity Value Fund for
periods prior to September 20, 1999, reflects performance of the Life and
Annuity Trust Equity Value Fund, its predecessor fund. Effective at the close of
business September 17, 1999, the Life and Annuity Trust and Norwest Select Funds
were reorganized into the Wells Fargo Variable Trust Funds.
8
<PAGE>
PERFORMANCE HIGHLIGHTS VARIABLE TRUST
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(1) (%) (AS OF JUNE 30, 2000)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Since
6-Month* 1-Year Inception
<S> <C> <C> <C>
VARIABLE TRUST EQUITY VALUE FUND (2.44) (11.94) (3.99)
BENCHMARK
RUSSELL 1000 VALUE INDEX (4.23) (8.92)
S&P 500 INDEX (0.42) 7.25
</TABLE>
* RETURNS FOR PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED.
CHARACTERISTICS
(AS OF JUNE 30, 2000)
----------------------------------------------
<TABLE>
<S> <C>
PORTFOLIO TURNOVER 65%
NUMBER OF HOLDINGS 74
NAV $8.97
</TABLE>
TEN LARGEST EQUITY HOLDINGS(4)
(AS OF JUNE 30, 2000)
----------------------------------------------
<TABLE>
<S> <C>
CITIGROUP, INCORPORATED 5.28%
EXXON MOBIL CORPORATION 5.10%
AMERICAN INTERNATIONAL GROUP 3.61%
MORGAN STANLEY DEAN WITTER 2.83%
COASTAL CORPORATION 2.68%
SBC COMMUNICATIONS, INCORPORATED 2.45%
CHASE MANHATTAN CORPORATION 2.42%
MEDIAONE GROUP, INCORPORATED 2.29%
IBM CORPORATION 2.28%
KONINKLIJKE PHILIPS ELECTRONICS 2.24%
</TABLE>
SECTOR DISTRIBUTION(5) (AS OF JUNE 30, 2000)
----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Financial 27%
Energy 15%
Technology 14%
Telecommunications 7%
Cash 6%
Basic Materials 5%
Consumer Non-Cyclical 5%
Health Care 5%
Industrials 5%
Consumer Cyclical 4%
Consumer Services 4%
Commercial Services 2%
Utilities 1%
</TABLE>
GROWTH OF $10,000 INVESTMENT(6)
----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
WELLS FARGO VARIABLE
TRUST EQUITY VALUE FUND RUSSELL 1000 VALUE INDEX S&P 500 INDEX
<S> <C> <C> <C>
4/98 $10,000 $10,000 $10,000
5/98 $9,680 $9,852 $9,828
6/98 $9,739 $9,978 $10,227
7/98 $9,268 $9,801 $10,119
8/98 $8,156 $8,343 $8,656
9/98 $8,626 $8,822 $9,211
10/98 $9,199 $9,506 $9,959
11/98 $9,460 $9,949 $10,563
12/98 $9,624 $10,288 $11,171
1/99 $9,403 $10,370 $11,642
2/99 $9,161 $10,224 $11,278
3/99 $9,380 $10,436 $11,729
4/99 $10,188 $11,410 $12,183
5/99 $10,087 $11,285 $11,896
6/99 $10,399 $11,612 $12,543
7/99 $10,024 $11,272 $12,151
8/99 $9,477 $10,854 $12,091
9/99 $8,981 $10,475 $11,760
10/99 $9,285 $11,078 $12,504
11/99 $9,255 $10,992 $12,758
12/99 $9,386 $11,044 $13,510
1/00 $9,142 $10,684 $12,831
2/00 $8,715 $9,891 $12,589
3/00 $9,498 $11,097 $13,820
4/00 $9,284 $10,968 $13,404
5/00 $9,416 $11,084 $13,129
6/00 $9,157 $10,577 $13,454
</TABLE>
--------------------------------------------------------------------------------
(2) The S&P 500 Index is an unmanaged index of 500 widely-held common stocks
representing, among others, industrial, financial, utility and transportation
companies listed or traded on national exchanges or over-the-counter markets.
You cannot invest directly in an index.
(3) The Russell 1000 Value Index measures the performance of those Russell 1000
companies with lower price-to-book ratios and lower forecasted growth values.
You cannot invest directly in an index.
(4) The Ten Largest Equity Holdings are calculated based on the market value of
the securities divided by total market value of the portfolio.
(5) Portfolio holdings are subject to change.
(6) The chart compares the performance of the Wells Fargo Variable Trust Equity
Value Fund since inception with the S&P 500 Index and the Russell 1000 Value
Index. The chart assumes a hypothetical $10,000 investment and reflects all
operating expenses of the Fund. The Fund is a professionally managed mutual
fund.
9
<PAGE>
VARIABLE TRUST PERFORMANCE HIGHLIGHTS
--------------------------------------------------------------------------------
VARIABLE TRUST GROWTH FUND
INVESTMENT OBJECTIVE
--------------------------------------------------------------------------------
The Variable Trust Growth Fund (the Fund) seeks long-term capital
appreciation.
ADVISOR
Wells Fargo Bank, N.A.
SUB-ADVISOR
Wells Capital Management Incorporated
FUND MANAGER
Kelli Hill
INCEPTION DATE
04/12/94
PERFORMANCE HIGHLIGHTS
--------------------------------------------------------------------------------
The Fund returned (0.17)%(1) for the six-month period ended June 30, 2000.
The Fund outperformed its benchmark, the S&P 500 Index(2), which returned
(0.42)%. The Fund distributed neither dividend income nor capital gains during
the period. Please keep in mind that past performance is no guarantee of
future results.
Strong performance by technology stocks accounted for the majority of the
Fund's gains during the early part of the year. In fact, the Fund's major
technology holdings, including Cisco, Texas Instruments and Intel, posted
double-digit returns in the first quarter. Financial services stocks, such as
Charles Schwab and State Street, were another source of relative
outperformance. In addition, the Fund's consumer cyclical holdings, including
Kohl's Department Stores, fared well.
Markets reversed course during the second quarter as rising interest rates
and investor uncertainty sparked unprecedented volatility. As a result, the
Nasdaq Composite Index(3) shed 38%, with the technology sector -- and many of
the Fund's technology holdings -- surrendering part of their first quarter
gains. Shares of Chase Manhattan also fell in value due to the impact of
rising interest rates, while Honeywell's disappointing second quarter earnings
report sent the stock downward. The telecommunications and consumer sectors
were also hit hard.
STRATEGIC OUTLOOK
--------------------------------------------------------------------------------
With interest rates expected to stabilize during the second half of the year,
the investment climate for large-cap growth stocks should improve. The Fund's
extensive holdings in the technology, telecommunications and health care
sectors should perform well in this environment.
--------------------------------------------------------------------------------
(1) FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE
RESULTS. Investment return and principal value of an investment will fluctuate
so that an investor's shares, when redeemed, may be worth more or less than
their original cost. The Fund's Advisor has committed through April 30, 2001 to
waive fees and/or reimburse expenses to the extent necessary to maintain a
certain net operating expense ratio for the Fund. Actual reductions of operating
expenses can increase total return to shareholders. Without these reductions,
the Fund's returns would have been lower. Performance figures of the Fund do not
reflect charges pursuant to the terms of the variable life insurance policies
and variable annuity contracts funded by separate accounts that invest in the
Fund's shares.
Performance shown for the Wells Fargo Variable Trust Growth Fund for periods
prior to September 20, 1999, reflects performance of the Life and Annuity Trust
Growth Fund, its predecessor fund. Effective at the close of business
September 17, 1999, the Life and Annuity Trust and Norwest Select Funds were
reorganized into the Wells Fargo Variable Trust Funds.
10
<PAGE>
PERFORMANCE HIGHLIGHTS VARIABLE TRUST
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(1) (%) (AS OF JUNE 30, 2000)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Since
6-Month* 1-Year 5-Year Inception
<S> <C> <C> <C> <C>
VARIABLE TRUST GROWTH FUND (0.17) 8.45 19.72 19.35
BENCHMARK
S&P 500 INDEX (0.42) 7.25 23.80
</TABLE>
* RETURNS FOR PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED.
CHARACTERISTICS
(AS OF JUNE 30, 2000)
-----------------------------------------------------------
<TABLE>
<S> <C>
PORTFOLIO TURNOVER 23%
NUMBER OF HOLDINGS 98
NAV $24.06
</TABLE>
TEN LARGEST EQUITY HOLDINGS(4)
(AS OF JUNE 30, 2000)
-----------------------------------------------------------
<TABLE>
<S> <C>
CISCO SYSTEMS, INCORPORATED 5.16%
GENERAL ELECTRIC COMPANY 4.57%
INTEL CORPORATION 3.88%
MICROSOFT CORPORATION 3.55%
PFIZER, INCORPORATED 3.16%
EXXON MOBIL CORPORATION 2.56%
CITIGROUP, INCORPORATED 2.53%
AMERICAN INTERNATIONAL GROUP 2.45%
EMC CORPORATION 2.44%
WAL-MART STORES, INCORPORATED 2.37%
</TABLE>
SECTOR DISTRIBUTION(5) (AS OF JUNE 30, 2000)
-----------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Technology 36%
Financial 13%
Health Care 11%
Telecommunications 7%
Energy 6%
Consumer Non-Cyclical 6%
Consumer Cyclical 6%
Consumer Services 4%
Basic Materials 3%
Industrials 3%
Utilities 2%
Commercial Services 2%
Cash 1%
</TABLE>
GROWTH OF $10,000 CHART(6)
----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
WELLS FARGO VARIABLE
TRUST GROWTH FUND S&P 500 INDEX
<S> <C> <C>
4/94 $10,000 $10,000
5/94 $10,110 $10,164
6/94 $9,888 $9,915
7/94 $10,189 $10,241
8/94 $10,511 $10,660
9/94 $10,422 $10,400
10/94 $10,502 $10,633
11/94 $10,260 $10,246
12/94 $10,447 $10,398
1/95 $10,508 $10,668
2/95 $10,994 $11,083
3/95 $11,237 $11,409
4/95 $11,390 $11,745
5/95 $11,930 $12,214
6/95 $12,209 $12,497
7/95 $12,589 $12,911
8/95 $12,794 $12,944
9/95 $13,223 $13,490
10/95 $12,801 $13,442
11/95 $13,325 $14,031
12/95 $13,497 $14,301
1/96 $13,748 $14,788
2/96 $14,260 $14,925
3/96 $14,297 $15,068
4/96 $14,769 $15,290
5/96 $15,136 $15,683
6/96 $14,876 $15,742
7/96 $14,108 $15,047
8/96 $14,518 $15,364
9/96 $15,247 $16,227
10/96 $15,659 $16,675
11/96 $16,662 $17,934
12/96 $16,525 $17,579
1/97 $17,473 $18,678
2/97 $16,966 $18,824
3/97 $16,376 $18,050
4/97 $17,036 $19,126
5/97 $18,117 $20,294
6/97 $18,506 $21,197
7/97 $20,013 $22,883
8/97 $18,853 $21,601
9/97 $19,906 $22,783
10/97 $18,986 $22,022
11/97 $19,280 $23,041
12/97 $19,389 $23,438
1/98 $19,747 $23,696
2/98 $20,810 $25,404
3/98 $21,809 $26,705
4/98 $21,959 $26,977
5/98 $21,624 $26,513
6/98 $22,674 $27,590
7/98 $22,558 $27,297
8/98 $19,418 $23,353
9/98 $20,316 $24,850
10/98 $21,964 $26,867
11/98 $23,437 $28,496
12/98 $24,975 $30,137
1/99 $25,935 $31,406
2/99 $25,063 $30,426
3/99 $26,256 $31,643
4/99 $27,054 $32,867
5/99 $26,218 $32,092
6/99 $27,684 $33,838
7/99 $26,886 $32,781
8/99 $26,924 $32,619
9/99 $26,202 $31,725
10/99 $27,737 $33,733
11/99 $28,348 $34,418
12/99 $30,074 $36,445
1/00 $28,738 $34,615
2/00 $28,352 $33,961
3/00 $30,885 $37,283
4/00 $29,762 $36,160
5/00 $28,963 $35,419
6/00 $30,024 $36,294
</TABLE>
--------------------------------------------------------------------------------
(2) The S&P 500 Index is an unmanaged index of 500 widely-held common stocks
representing, among others, industrial, financial, utility and transportation
companies listed or traded on national exchanges or over-the-counter markets.
You cannot invest directly in an index.
(3) The Nasdaq Composite Index is a broad-based capitalization-weighted index
of all NASDAQ National Market & Small Cap stocks. You cannot invest directly in
an index.
(4) The Ten Largest Equity Holdings are calculated based on the market value of
the securities divided by total market value of the portfolio.
(5) Portfolio holdings are subject to change.
(6) The chart compares the performance of the Wells Fargo Variable Trust Growth
Fund since inception with the S&P 500 Index. The chart assumes a hypothetical
$10,000 investment and reflects all operating expenses for the Fund. The Fund is
a professionally managed mutual fund.
11
<PAGE>
VARIABLE TRUST PERFORMANCE HIGHLIGHTS
--------------------------------------------------------------------------------
VARIABLE TRUST LARGE COMPANY GROWTH FUND
INVESTMENT OBJECTIVE
--------------------------------------------------------------------------------
The Variable Trust Large Company Growth Fund (the Fund) seeks long-term
capital appreciation by investing primarily in large, high-quality domestic
companies that the Advisor believes have superior growth potential.
ADVISOR
Wells Fargo Bank, N.A.
SUB-ADVISOR
Peregrine Capital Management, Inc.
FUND MANAGERS
John S. Dale, CFA
Gary E. Nussbaum, CFA
INCEPTION DATE
09/20/99
PERFORMANCE HIGHLIGHTS
--------------------------------------------------------------------------------
The Fund returned 9.14%(1) for the six-month period ended June 30, 2000,
outperforming its benchmark, the S&P 500 Index(2), which returned (0.42)%. The
Fund distributed neither dividend income nor capital gains during the period.
Please keep in mind that past performance is no guarantee of future results.
The Fund performed exceptionally well in the first quarter, as favorable
earnings reports lifted growth stocks above most other market categories.
Strong performance among many of the Fund's top 10 holdings also boosted
performance, with shares of Schwab, Cisco, Medtronic and Intel increasing in
value. In addition, the Fund's health care holdings bounced back after a
tumultuous 1999. Even the Fund's financial-related holdings held up well amid
a challenging environment for financial stocks.
The second quarter was a period of unprecedented volatility in equity
markets. Still, the Fund withstood selling pressures due to the fundamental
earnings strength of its key stock holdings. The Fund took advantage of the
downturn in the technology and telecommunication sectors to build positions in
America Online, Oracle and JDS Uniphase. These companies are industry leaders
with proven track records and attractive earnings growth potential.
STRATEGIC OUTLOOK
--------------------------------------------------------------------------------
The Fund's excellent performance during the first half of the year reflects
its emphasis on a select number of high-quality companies with above-average
earnings growth. The outlook for the Fund remains positive due to the strength
of the companies within its portfolio.
--------------------------------------------------------------------------------
(1) FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE
RESULTS. Investment return and principal value of an investment will fluctuate
so that an investor's shares, when redeemed, may be worth more or less than
their original cost. The Fund's Advisor has committed through April 30, 2001 to
waive fees and/or reimburse expenses to the extent necessary to maintain a
certain net operating expense ratio for the Fund. Actual reductions of operating
expenses can increase total return to shareholders. Without these reductions,
the Fund's returns would have been lower. Performance figures of the Fund do not
reflect charges pursuant to the terms of the variable life insurance policies
and variable annuity contracts funded by separate accounts that invest in the
Fund's shares.
(2) The S&P 500 Index is an unmanaged index of 500 widely-held common stocks
representing, among others, industrial, financial, utility and transportation
companies listed or traded on national exchanges or over-the-counter markets.
You cannot invest directly in an index.
12
<PAGE>
PERFORMANCE HIGHLIGHTS VARIABLE TRUST
--------------------------------------------------------------------------------
TOTAL RETURN(1) (%) (AS OF JUNE 30, 2000)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Since
1-Month 3-Month 6-Month Inception
<S> <C> <C> <C> <C>
VARIABLE TRUST LARGE COMPANY
GROWTH FUND 7.62 (2.23) 9.14 31.30
BENCHMARK
S&P 500 INDEX 2.47 (2.66) (0.42)
</TABLE>
CHARACTERISTICS
(AS OF JUNE 30, 2000)
----------------------------------------------
<TABLE>
<S> <C>
PORTFOLIO TURNOVER 6%
NUMBER OF HOLDINGS 34
NAV $13.13
</TABLE>
TEN LARGEST EQUITY HOLDINGS(3)
(AS OF JUNE 30, 2000)
----------------------------------------------
<TABLE>
<S> <C>
INTEL CORPORATION 8.68%
CISCO SYSTEMS, INCORPORATED 7.66%
PFIZER, INCORPORATED 5.85%
MICROSOFT CORPORATION 5.07%
CHARLES SCHWAB CORPORATION 4.75%
SOLECTRON CORPORATION 4.70%
MEDTRONIC, INCORPORATED 4.56%
AMERICAN INTERNATIONAL GROUP 4.49%
GOLDMAN SACHS 4.32%
HOME DEPOT, INCORPORATED 4.17%
</TABLE>
SECTOR DISTRIBUTION(4) (AS OF JUNE 30, 2000)
----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Technology 43%
Financial 16%
Healthcare 14%
Commercial Services 13%
Consumer Cyclical 8%
Cash 5%
Consumer Non-Cyclical 1%
</TABLE>
GROWTH OF $10,000 INVESTMENT(5)
----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
WELLS FARGO VARIABLE
TRUST LARGE COMPANY GROWTH FUND S&P 500 INDEX
<S> <C> <C>
8/99 $10,000 $10,000
9/99 $9,590 $9,726
10/99 $10,420 $10,342
11/99 $10,830 $10,551
12/99 $12,030 $11,173
1/00 $11,800 $10,612
2/00 $12,000 $10,412
3/00 $13,430 $11,430
4/00 $13,020 $11,086
5/00 $12,200 $10,858
6/00 $13,130 $11,127
</TABLE>
--------------------------------------------------------------------------------
(3) The Ten Largest Equity Holdings are calculated based on the market value of
the securities divided by total market value of the portfolio.
(4) Portfolio holdings are subject to change.
(5) The chart compares the performance of the Wells Fargo Variable Trust Large
Company Growth Fund since inception with the S&P 500 Index. The chart assumes a
hypothetical $10,000 investment and reflects all operating expenses of the Fund.
The Fund is a professionally managed mutual fund.
13
<PAGE>
VARIABLE TRUST PERFORMANCE HIGHLIGHTS
--------------------------------------------------------------------------------
VARIABLE TRUST MONEY MARKET FUND
INVESTMENT OBJECTIVE
--------------------------------------------------------------------------------
The Variable Trust Money Market Fund (the Fund) seeks high current income,
while preserving capital and liquidity.
ADVISOR
Wells Fargo Bank, N.A.
SUB-ADVISOR
Wells Capital Management Incorporated
FUND MANAGERS
Dave Sylvester
Laurie White
Mike Neitzke
INCEPTION DATE
05/19/94
PERFORMANCE HIGHLIGHTS
--------------------------------------------------------------------------------
The Fund returned 2.69%(1) for the six-month period ended June 30, 2000. The
Fund distributed $0.03 per share in dividend income and no capital gains
during the period. Please keep in mind that past performance is no guarantee
of future results.
During the first half of the year, the Federal Reserve Board (the Fed) raised
interest rates on three occasions, including a half-point increase on May 16,
2000. The rate increases were designed to slow the economy and contain
mounting inflationary pressures. All together, short-term interest rates rose
a full percentage point over the period.
Amid a rising interest rate environment, the Fund reinvested assets from its
maturing securities into higher-yielding securities to enhance portfolio
performance. In addition, the Fund continues to selectively seek opportunities
along the yield curve, including longer-term securities, while maintaining its
core positions of securities with one- to three-month maturities. The Fund
believes that the asset-backed sector will provide additional yield while
offering superior credit quality -- the best of both worlds.
STRATEGIC OUTLOOK
--------------------------------------------------------------------------------
Looking forward, the Fed may still be in a tightening mode, but investors are
becoming increasingly convinced that interest rates have peaked in this
economic cycle. Growing optimism over the outlook for monetary policy and,
more generally, interest rates, is apparent from recent interest-rate declines
and by a yield curve that is inverted (short-term interest rates are higher
than long-term interest rates). The Fund seeks to maintain a stable net asset
value within any market environment.
14
<PAGE>
PERFORMANCE HIGHLIGHTS VARIABLE TRUST
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(1) (%) (AS OF JUNE 30, 2000)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Since
6-Month* 1-Year 5-Year Inception
<S> <C> <C> <C> <C>
VARIABLE TRUST MONEY MARKET
FUND 2.69 5.08 4.86 4.88
</TABLE>
* RETURNS FOR PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED.
FUND YIELD SUMMARY
----------------------------------------------
<TABLE>
<S> <C>
7-DAY SIMPLE YIELD 5.89%
30-DAY SIMPLE YIELD 5.82%
</TABLE>
CHARACTERISTICS (AS OF JUNE 30, 2000)
----------------------------------------------
<TABLE>
<S> <C>
WEIGHTED AVERAGE MATURITY 66 DAYS
</TABLE>
PORTFOLIO ALLOCATION(2) (AS OF JUNE 30, 2000)
----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Commercial Paper 57%
Floating Rate Notes 14%
Short-Term Corporate Bonds 13%
Time Deposits 8%
Certificates of Deposit 6%
Repurchase Agreements 2%
</TABLE>
MATURITY DISTRIBUTION(2) (AS OF JUNE 30, 2000)
----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
2-14 days 31%
30-59 days 36%
60-89 days 10%
90-179 days 10%
180-365 days 13%
</TABLE>
--------------------------------------------------------------------------------
(1) FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE
RESULTS. Investment return will fluctuate. The Fund's yield figures more closely
reflect the current earnings of the Fund than the total return figures. The
Fund's Advisor has committed through April 30, 2001 to waive fees and/or
reimburse expenses to the extent necessary to maintain a certain net operating
expense ratio for the Fund. Actual reductions of operating expenses can increase
total return to shareholders. Without these reductions, the Fund's returns would
have been lower. Performance figures of the Fund do not reflect charges pursuant
to the terms of the variable life insurance policies and variable annuity
contracts funded by separate accounts that invest in the Fund's shares.
Performance shown for the Wells Fargo Variable Trust Money Market Fund for
periods prior to September 20, 1999, reflects performance of the Life and
Annuity Trust Money Market Fund, its predecessor fund. Effective at the close of
business September 17, 1999, the Life and Annuity Trust and Norwest Select Funds
were reorganized into the Wells Fargo Variable Trust Funds.
(2) Portfolio holdings are subject to change.
15
<PAGE>
VARIABLE TRUST PERFORMANCE HIGHLIGHTS
--------------------------------------------------------------------------------
VARIABLE TRUST SMALL CAP GROWTH FUND
INVESTMENT OBJECTIVE
--------------------------------------------------------------------------------
The Variable Trust Small Cap Growth Fund (the Fund) seeks long-term capital
appreciation.
ADVISOR
Wells Fargo Bank, N.A.
SUB-ADVISOR
Wells Capital Management Incorporated
FUND MANAGERS
Tom Zeifang, CFA
Chris Greene
INCEPTION DATE
05/01/95
PERFORMANCE HIGHLIGHTS
--------------------------------------------------------------------------------
The Fund returned 8.13%(1) for the six-month period ended June 30, 2000,
outperforming the Russell 2000 Index(2), which returned 3.04%. The Fund
distributed neither dividends nor capital gains during the period. Please keep
in mind that past performance is no guarantee of future results.
The Fund's strategy of owning the best companies within a broadly diversified
portfolio paid off for investors during the period. During the first half of
the year, the Fund benefited from its holdings of New Economy stocks
throughout the technology, media and telecommunication sectors. The Fund's
emphasis on companies with sound business fundamentals and strong cash flow
enabled it to profit from its holdings of Silicon Valley Bancshares, even
while most other financial services stocks fell in value. Shares of Terayon
Communications, another prominent portfolio holding, also soared in value.
Weaker holdings included Cumulus Media, Bindview Development and Harmonic
Lightwave, all of which were sold during the period due to deteriorating
growth prospects. The Fund pursued attractive opportunities in technology
sectors, purchasing shares of Newport Corporation, a company that manufactures
precision components and automated assembly, measurement, and test equipment,
plus Technitrol, a company that sells electronic and metallurgical products to
manufacturers of computers, telecom devices, switches, circuit breakers and
other electronic goods.
STRATEGIC OUTLOOK
--------------------------------------------------------------------------------
The outlook for small-cap stocks remains favorable, reflecting the
long-standing belief that the market increasingly rewards companies that are
able to adapt to continued change.
--------------------------------------------------------------------------------
(1) FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE
RESULTS. Investment return and principal value of an investment will fluctuate
so that an investor's shares, when redeemed, may be worth more or less than
their original cost. The Fund's Advisor has committed through April 30, 2001 to
waive fees and/or reimburse expenses to the extent necessary to maintain a
certain net operating expense ratio for the Fund. Actual reductions of operating
expenses can increase total return to shareholders. Without these reductions,
the Fund's returns would have been lower. Performance figures of the Fund do not
reflect charges pursuant to the terms of the variable life insurance policies
and variable annuity contracts funded by separate accounts that invest in the
Fund's shares.
Performance shown for the Wells Fargo Variable Trust Small Cap Growth Fund for
periods prior to September 20, 1999, reflects performance of the Norwest Select
Small Company Stock Fund (the accounting survivor of a merger of the Life and
Annuity Trust Strategic Growth Fund and the Norwest Select Small Company Stock
Fund), its predecessor fund. Effective at the close of business September 17,
1999, the Life and Annuity Trust and Norwest Select Funds were reorganized into
the Wells Fargo Variable Trust Funds.
16
<PAGE>
PERFORMANCE HIGHLIGHTS VARIABLE TRUST
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(1) (%) (AS OF JUNE 30, 2000)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Since
6-Month* 1-Year Inception
<S> <C> <C> <C>
VARIABLE TRUST SMALL CAP GROWTH
FUND 8.13 88.80 20.08
BENCHMARK
RUSSELL 2000 INDEX 3.04 14.32
</TABLE>
* RETURNS FOR PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED.
CHARACTERISTICS
(AS OF JUNE 30, 2000)
-----------------------------------------------------------
<TABLE>
<S> <C>
PORTFOLIO TURNOVER 132%
NUMBER OF HOLDINGS 127
NAV $19.56
</TABLE>
TEN LARGEST EQUITY HOLDINGS(3)
(AS OF JUNE 30, 2000)
-----------------------------------------------------------
<TABLE>
<S> <C>
DIAMOND TECH PARTNERS, INCORPORATED 2.27%
ALTEON WEBSYSTEMS, INCORPORATED 2.19%
VIGNETTE CORPORATION 2.10%
ART TECHNOLOGY GROUP, INCORPORATED 2.05%
ENTRUST TECHNOLOGIES, INCORPORATED 1.76%
ACTIVE SOFTWARE, INCORPORATED 1.76%
KING PHARMACEUTICALS, INCORPORATED 1.69%
SILICON VALLEY BANCSHARES 1.65%
MICREL, INCORPORATED 1.57%
TUT SYSTEMS, INCORPORATED 1.55%
</TABLE>
SECTOR DISTRIBUTION(4) (AS OF JUNE 30, 2000)
-----------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Technology 45%
Health Care 15%
Commercial Services 9%
Financial 6%
Cash 6%
Energy 5%
Consumer Cyclical 5%
Industrials 3%
Telecommunications 3%
Consumer Services 2%
Transportation 1%
</TABLE>
GROWTH OF $10,000 CHART(5)
----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
WELLS FARGO VARIABLE TRUST RUSSELL 2000
SMALL CAP GROWTH FUND INDEX
<S> <C> <C>
4/95 $10,000 $10,000
5/95 $10,040 $10,172
6/95 $10,670 $10,700
7/95 $11,740 $11,316
8/95 $11,970 $11,549
9/95 $11,920 $11,756
10/95 $11,280 $11,231
11/95 $11,590 $11,702
12/95 $11,595 $12,011
1/96 $11,636 $11,999
2/96 $11,957 $12,374
3/96 $12,484 $12,626
4/96 $13,891 $13,301
5/96 $14,419 $13,827
6/96 $13,405 $13,259
7/96 $12,112 $12,100
8/96 $13,177 $12,803
9/96 $13,819 $13,303
10/96 $14,088 $13,099
11/96 $14,750 $13,638
12/96 $15,243 $13,997
1/97 $15,571 $14,277
2/97 $14,690 $13,931
3/97 $13,482 $13,274
4/97 $13,087 $13,311
5/97 $15,729 $14,792
6/97 $16,011 $15,426
7/97 $17,039 $16,143
8/97 $17,468 $16,513
9/97 $18,778 $17,721
10/97 $17,569 $16,941
11/97 $16,824 $16,833
12/97 $16,735 $17,129
1/98 $16,341 $16,860
2/98 $17,889 $18,108
3/98 $18,387 $18,856
4/98 $18,427 $18,962
5/98 $17,089 $17,941
6/98 $17,233 $17,979
7/98 $15,397 $16,525
8/98 $11,817 $13,315
9/98 $12,420 $14,357
10/98 $12,944 $14,943
11/98 $13,705 $15,726
12/98 $14,312 $16,699
1/99 $13,865 $16,921
2/99 $12,563 $15,550
3/99 $12,287 $15,793
4/99 $12,984 $17,208
5/99 $12,958 $17,459
6/99 $13,628 $18,248
7/99 $13,615 $17,747
8/99 $13,707 $17,090
9/99 $14,234 $17,093
10/99 $16,325 $17,163
11/99 $19,061 $18,188
12/99 $23,797 $20,247
1/00 $24,323 $19,921
2/00 $30,309 $23,210
3/00 $26,402 $21,680
4/00 $23,179 $20,375
5/00 $20,719 $19,187
6/00 $25,731 $20,861
</TABLE>
--------------------------------------------------------------------------------
(2) The Russell 2000 Index is an index subset of the Russell 3000 Index and
includes the 2,000 smallest stocks representing approximately 11% of the U.S.
equity market. You cannot invest directly in an index.
(3) The Ten Largest Equity Holdings are calculated based on the market value of
the securities divided by total market value of the portfolio.
(4) Portfolio holdings are subject to change.
(5) The chart compares the performance of the Wells Fargo Variable Trust Small
Cap Growth Fund since inception with the Russell 2000 Index. The chart assumes a
hypothetical $10,000 investment and reflects all operating expenses of the Fund.
The Fund is a professionally managed mutual fund.
17
<PAGE>
VARIABLE TRUST PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000
--------------------------------------------------------------------------------
VARIABLE TRUST ASSET ALLOCATION FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C>
COMMON STOCK - 61.81%
AEROSPACE - 0.02%
1,411 B.F. GOODRICH COMPANY $ 48,062
------------
AGRICULTURAL PRODUCTION-CROPS - 0.04%
4,214 NABISCO GROUP HOLDINGS 109,301
------------
AMUSEMENT & RECREATION SERVICES - 0.01%
1,640 HARRAH'S ENTERTAINMENT
INCORPORATED+ 34,338
------------
APPAREL & ACCESSORY STORES - 0.28%
10,958 GAP INCORPORATED 342,438
4,184 KOHLS CORPORATION+ 232,735
5,542 LIMITED INCORPORATED 119,845
1,745 NORDSTROM INCORPORATED 42,098
737,116
------------
APPAREL & OTHER FINISHED PRODUCTS MADE FROM FABRICS & SIMILAR MATERIALS -
0.02%
744 LIZ CLAIBORNE INCORPORATED 26,225
1,527 V. F. CORPORATION 36,362
62,587
------------
AUTOMOTIVE DEALERS & GASOLINE SERVICE STATIONS - 0.01%
1,748 AUTOZONE INCORPORATED+ 38,456
------------
AUTOMOTIVE REPAIR, SERVICES & PARKING - 0.01%
774 RYDER SYSTEMS INCORPORATED 14,658
------------
BUILDING CONSTRUCTION-GENERAL CONTRACTORS & OPERATIVE BUILDERS - 0.06%
793 CENTEX CORPORATION 18,635
621 KAUFMAN & BROAD HOME
CORPORATION 12,304
5,729 MASCO CORPORATION 103,480
561 PULTE CORPORATION 12,132
146,551
------------
BUILDING MATERIALS, HARDWARE, GARDEN SUPPLY & MOBILE HOME DEALERS - 0.65%
29,768 HOME DEPOT INCORPORATED 1,486,540
4,915 LOWE'S COMPANY INCORPORATED 201,822
1,688,362
------------
BUSINESS SERVICES - 4.58%
4,499 3COM CORPORATION+ 259,255
1,535 ADOBE SYSTEMS INCORPORATED 199,550
29,583 AMERICA ONLINE INCORPORATED+ 1,560,503
780 AUTODESK INCORPORATED 27,056
8,073 AUTOMATIC DATA PROCESSING 432,410
3,169 BMC SOFTWARE INCORPORATED+ 115,619
2,353 CABLETRON SYSTEMS
INCORPORATED+ 59,413
9,237 CENDANT CORPORATION+ 129,318
1,870 CERIDIAN CORPORATION+ 44,997
2,332 CITRIX SYSTEMS+ 44,162
</TABLE>
18
<PAGE>
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000 VARIABLE TRUST
--------------------------------------------------------------------------------
VARIABLE TRUST ASSET ALLOCATION FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C>
BUSINESS SERVICES (continued)
7,546 COMPUTER ASSOCIATES
INTERNATIONAL INCORPORATED $ 386,261
2,109 COMPUTER SCIENCES CORPORATION+ 157,515
1,950 CONVERGYS CORPORATION+ 101,156
958 DELUXE CORPORATION 22,573
1,663 ECOLAB INCORPORATED 64,961
6,019 ELECTRONIC DATA SYSTEMS
CORPORATION 248,284
1,847 EQUIFAX INCORPORATED 48,484
5,335 FIRST DATA CORPORATION 264,749
3,918 IMS HEALTH INCORPORATED 70,524
3,881 INTERPUBLIC GROUP COMPANIES
INCORPORATED 166,882
3,649 MCKESSON HBOC INCORPORATED 76,401
1,000 MERCURY INTERACTIVE
CORPORATION+ 96,750
1,237 NCR CORPORATION+ 48,166
4,163 NOVELL INCORPORATED+ 38,508
2,260 OMNICOM GROUP 201,281
36,520 ORACLE SYSTEMS CORPORATION+ 3,069,963
3,574 PARAMETRIC TECHNOLOGY COMPANY+ 39,314
3,521 PEOPLESOFT INCORPORATED+ 58,977
750 SAPIENT CORPORATION+ 80,203
2,550 SIEBEL SYSTEMS INCORPORATED+ 417,084
20,395 SUN MICROSYSTEMS INCORPORATED+ 1,854,670
3,977 UNISYS CORPORATION+ 57,915
5,052 VERITAS SOFTWARE CORPORATION+ 570,955
6,996 YAHOO INCORPORATED+ 866,630
875 YOUNG & RUBICAM INCORPORATED 50,039
11,930,528
------------
CHEMICALS & ALLIED PRODUCTS - 6.92%
19,924 ABBOTT LABORATORIES 887,863
2,939 AIR PRODUCTS & CHEMICALS
INCORPORATED 90,558
725 ALBERTO CULVER COMPANY
CLASS B 22,158
1,317 ALZA CORPORATION+ 77,868
16,801 AMERICAN HOME PRODUCTS
CORPORATION 987,058
13,233 AMGEN INCORPORATED+ 929,618
1,471 AVERY DENNISON CORPORATION 98,741
3,062 AVON PRODUCTS INCORPORATED 136,259
1,904 BIOGEN INCORPORATED+ 122,808
25,368 BRISTOL-MYERS SQUIBB COMPANY 1,477,686
3,061 CLOROX COMPANY 137,171
7,416 COLGATE-PALMOLIVE COMPANY 444,033
8,667 DOW CHEMICAL COMPANY 261,635
13,431 DUPONT (E.I.) DE NEMOURS &
COMPANY 587,606
1,006 EASTMAN CHEMICAL COMPANY 48,037
374 FMC CORPORATION+ 21,692
13,441 GILLETTE COMPANY 469,594
745 GREAT LAKES CHEMICAL
CORPORATION 23,468
1,388 HERCULES INCORPORATED 19,519
1,332 INTERNATIONAL FLAVORS &
FRAGRANCES INCORPORATED 40,210
</TABLE>
19
<PAGE>
VARIABLE TRUST PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000
--------------------------------------------------------------------------------
VARIABLE TRUST ASSET ALLOCATION FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C>
CHEMICALS & ALLIED PRODUCTS (continued)
14,515 LILLY (ELI) & COMPANY $ 1,449,686
910 MALLINCKRODT INCORPORATED 39,528
2,700 MEDIMMUNE INCORPORATED+ 199,800
29,619 MERCK & COMPANY INCORPORATED 2,269,556
81,027 PFIZER INCORPORATED 3,889,296
16,339 PHARMACIA CORPORATION 844,522
2,260 PPG INDUSTRIES INCORPORATED 100,146
2,066 PRAXAIR INCORPORATED 77,346
16,822 PROCTER & GAMBLE COMPANY 963,060
2,827 ROHM & HAAS COMPANY 97,532
18,829 SCHERING-PLOUGH CORPORATION 950,865
2,116 SHERWIN-WILLIAMS COMPANY 44,833
1,163 SIGMA ALDRICH 34,018
1,731 UNION CARBIDE CORPORATION 85,685
957 W.R. GRACE & COMPANY+ 11,604
1,221 WATSON PHARMACEUTICALS
INCORPORATED+ 65,629
18,006,688
------------
COMMERCIAL SERVICES - 0.01%
1,487 QUINTILES TRANSNATIONAL
CORPORATION+ 21,003
------------
COMMUNICATIONS - 4.40%
4,046 ALLTEL CORPORATION 250,598
40,822 AT&T CORPORATION 1,290,995
19,884 BELL ATLANTIC CORPORATION+ 1,010,355
24,233 BELLSOUTH CORPORATION 1,032,931
1,787 CENTURYTEL INCORPORATED 51,376
4,353 CLEAR CHANNEL COMMUNICATIONS
INCORPORATED+ 326,475
11,543 COMCAST CORPORATION CLASS A+ 467,492
11,327 GLOBAL CROSSING LIMITED+ 298,042
12,363 GTE CORPORATION 769,597
7,873 MEDIAONE GROUP INCORPORATED+ 522,088
9,752 NEXTEL COMMUNICATIONS
CLASS A+ 596,701
43,767 SBC COMMUNICATIONS
INCORPORATED 1,892,905
11,279 SPRINT CORPORATION (FON GROUP) 575,229
11,793 SPRINT CORPORATION (PCS
GROUP)+ 701,684
36,836 WORLDCOM INCORPORATED+ 1,689,852
11,476,320
------------
COMPUTERS - 2.08%
67,763 MICROSOFT CORPORATION+ 5,421,040
------------
CONSUMER PRODUCTS - 0.02%
2,097 FORTUNE BRANDS INCORPORATED 48,362
------------
DOMESTIC DEPOSITORY INSTITUTIONS - 3.80%
5,024 AMSOUTH BANCORP 79,128
14,724 BANC ONE CORPORATION 391,106
21,308 BANK OF AMERICA CORPORATION 916,243
</TABLE>
20
<PAGE>
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000 VARIABLE TRUST
--------------------------------------------------------------------------------
VARIABLE TRUST ASSET ALLOCATION FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C>
DOMESTIC DEPOSITORY INSTITUTIONS (continued)
9,473 BANK OF NEW YORK INCORPORATED $ 440,495
4,495 BB&T CORPORATION 107,318
2,700 CHARTER ONE FINANCIAL
INCORPORATED 62,100
15,930 CHASE MANHATTAN CORPORATION 733,775
43,417 CITIGROUP INCORPORATED 2,615,873
2,005 COMERICA INCORPORATED 89,974
3,974 FIFTH THIRD BANCORP 251,356
12,602 FIRST UNION CORPORATION 312,687
12,475 FIRSTAR CORPORATION 262,755
11,584 FLEET BOSTON FINANCIAL
CORPORATION 393,856
2,061 GOLDEN WEST FINANCIAL 84,115
2,986 HUNTINGTON BANCSHARES
INCORPORATED 47,216
2,098 J P MORGAN & COMPANY
INCORPORATED 231,042
5,669 KEYCORP 99,916
6,339 MELLON FINANCIAL CORPORATION 230,977
7,821 NATIONAL CITY CORPORATION 133,446
2,888 NORTHERN TRUST CORPORATION 187,901
1,783 OLD KENT FINANCIAL CORPORATION 47,693
3,745 PNC BANK CORPORATION 175,547
2,822 REGIONS FINANCIAL CORPORATION 56,087
2,175 SOUTHTRUST CORPORATION 49,209
2,045 STATE STREET CORPORATION 216,898
2,250 SUMMIT BANCORP 55,406
3,880 SUN TRUST BANKS INCORPORATED 177,268
3,614 SYNOVUS FINANCIAL CORPORATION 63,697
9,697 U.S. BANCORP 186,667
1,796 UNION PLANTERS CORPORATION 50,176
2,630 WACHOVIA CORPORATION 142,678
7,074 WASHINGTON MUTUAL INCORPORATED 204,262
20,728 WELLS FARGO & COMPANY 803,210
9,900,077
------------
EATING & DRINKING PLACES - 0.29%
1,673 DARDEN RESTAURANTS
INCORPORATED 27,186
17,164 MCDONALD'S CORPORATION 565,338
2,350 STARBUCKS CORPORATION+ 89,741
1,966 TRICON GLOBAL RESTAURANTS
INCORPORATED+ 55,540
1,562 WENDY'S INTERNATIONAL
INCORPORATED 27,823
765,628
------------
ELECTRIC, GAS & SANITARY SERVICES - 1.30%
5,510 AES CORPORATION+ 251,393
2,445 ALLIED WASTE INDUSTRIES
INCORPORATED+ 24,450
1,780 AMEREN CORPORATION 60,075
4,162 AMERICAN ELECTRIC POWER
COMPANY 123,299
2,064 CAROLINA POWER & LIGHT COMPANY 65,919
2,035 CINERGY CORPORATION 51,765
1,487 CMS ENERGY CORPORATION 32,900
</TABLE>
21
<PAGE>
VARIABLE TRUST PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000
--------------------------------------------------------------------------------
VARIABLE TRUST ASSET ALLOCATION FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C>
ELECTRIC, GAS & SANITARY SERVICES (continued)
1,047 COLUMBIA ENERGY GROUP $ 68,709
2,739 CONSOLIDATED EDISON
INCORPORATED 81,143
1,905 CONSTELLATION ENERGY GROUP 62,032
3,069 DOMINION RESOURCES
INCORPORATED 131,583
1,863 DTE ENERGY COMPANY 56,938
4,711 DUKE ENERGY CORPORATION 265,582
344 EASTERN ENTERPRISES 21,672
4,344 EDISON INTERNATIONAL 89,052
2,923 EL PASO ENERGY CORPORATION 148,890
2,977 ENTERGY CORPORATION 80,937
2,986 FIRST ENERGY CORPORATION 69,798
1,275 FLORIDA PROGRESS CORPORATION 59,766
2,295 FPL GROUP INCORPORATED 113,602
1,578 GPU INCORPORATED 42,705
1,549 NEW CENTURY ENERGIES
INCORPORATED 46,470
2,287 NIAGARA MOHAWK HOLDINGS
INCORPORATED+ 31,875
617 NICOR INCORPORATED 20,130
1,974 NORTHERN STATES POWER COMPANY 39,850
395 ONEOK INCORPORATED 10,245
4,939 PG&E COMPANY 121,623
2,192 PECO ENERGY COMPANY 88,365
457 PEOPLES ENERGY CORPORATION 14,795
1,116 PINNACLE WEST CAPITAL
CORPORATION 37,805
1,857 PP& L RESOURCES INCORPORATED 40,738
2,812 PUBLIC SERVICE ENTERPRISE
GROUP 97,366
3,798 RELIANT ENERGY INCORPORATED 112,278
2,612 SEMPRA ENERGY 44,404
8,400 SOUTHERN COMPANY 195,825
3,435 TEXAS UTILITIES COMPANY 101,333
7,963 WASTE MANAGEMENT INCORPORATED 151,297
5,689 WILLIAMS COMPANIES
INCORPORATED 237,160
2,333 UNICOM CORPORATION 90,258
3,384,027
------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT
COMPUTER EQUIPMENT - 9.61%
1,328 ADAPTEC INCORPORATED+ 30,212
4,368 ADC TELECOMMUNICATIONS
INCORPORATED+ 366,366
1,978 ADVANCED MICRO DEVICES+ 152,801
2,550 ALTERA CORPORATION+ 259,941
2,500 AMERICAN POWER CONVERSION
CORPORATION+ 102,031
1,060 ANDREW CORPORATION+ 35,576
2,753 CONEXANT SYSTEMS INCORPORATED+ 133,865
1,192 COOPER INDUSTRIES INCORPORATED 38,815
5,484 EMERSON ELECTRIC COMPANY 331,097
127,362 GENERAL ELECTRIC COMPANY 6,750,185
43,123 INTEL CORPORATION 5,765,005
3,985 LINEAR TECHNOLOGY CORPORATION 254,791
3,939 LSI LOGIC CORPORATION+ 213,198
</TABLE>
22
<PAGE>
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000 VARIABLE TRUST
--------------------------------------------------------------------------------
VARIABLE TRUST ASSET ALLOCATION FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C>
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT
COMPUTER EQUIPMENT - 9.61%(continued)
41,917 LUCENT TECHNOLOGIES
INCORPORATED $ 2,483,581
3,650 MAXIM INTEGRATED PRODUCTS
INCORPORATED+ 247,972
1,027 MAYTAG CORPORATION 37,871
7,126 MICRON TECHNOLOGY
INCORPORATED+ 627,533
2,548 MOLEX INCORPORATED 122,623
27,686 MOTOROLA INCORPORATED 804,624
2,238 NATIONAL SEMICONDUCTOR
CORPORATION+ 127,007
552 NATIONAL SERVICE INDUSTRIES
INCORPORATED 10,764
3,910 NETWORK APPLIANCE
INCORPORATED+ 314,755
38,140 NORTEL NETWORKS CORPORATION 2,603,054
1,650 NOVELLUS SYSTEMS INCORPORATED+ 93,328
9,519 QUALCOMM INCORPORATED+ 571,140
1,900 SANMINA CORPORATION+ 162,450
2,061 SCIENTIFIC-ATLANTA
INCORPORATED 153,545
5,273 TELLABS INCORPORATED+ 360,871
21,072 TEXAS INSTRUMENTS INCORPORATED 1,447,383
757 THOMAS & BETTS CORPORATION 14,478
948 WHIRLPOOL CORPORATION 44,201
1,188 W W GRAINGER INCORPORATED 36,605
4,152 XILINK INCORPORATED+ 342,800
25,040,468
------------
ENGINEERING, ACCOUNTING, RESEARCH, MANAGEMENT & RELATED SERVICES - 0.20%
2,066 DUN & BRADSTREET CORPORATION 59,139
5,685 HALLIBURTON COMPANY 268,261
4,751 PAYCHEX INCORPORATED 199,542
526,942
------------
FABRICATED METAL PRODUCTS, EXCEPT MACHINERY & TRANSPORTATION EQUIPMENT -
0.06%
396 BALL CORPORATION 12,746
862 CRANE COMPANY 20,957
1,686 CROWN CORK & SEAL COMPANY 25,290
1,451 PARKER-HANNIFIN CORPORATION 49,697
751 SNAP-ON INCORPORATED 19,995
1,139 STANLEY WORKS 27,051
155,736
------------
FOOD & KINDRED PRODUCTS - 2.04%
501 ADOLPH COORS COMPANY CLASS B 30,311
5,815 ANHEUSER-BUSCH INCORPORATED 434,308
7,814 ARCHER-DANIELS-MIDLAND COMPANY 76,675
3,531 BESTFOODS 244,522
877 BROWN-FORMAN CORPORATION 47,139
5,456 CAMPBELL SOUP COMPANY 158,906
31,852 COCA-COLA COMPANY 1,829,498
5,520 COCA-COLA ENTERPRISES
INCORPORATED 90,045
6,349 CONAGRA INCORPORATED 121,028
3,783 GENERAL MILLS INCORPORATED 144,700
</TABLE>
23
<PAGE>
VARIABLE TRUST PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000
--------------------------------------------------------------------------------
VARIABLE TRUST ASSET ALLOCATION FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C>
FOOD & KINDRED PRODUCTS (continued)
4,527 H J HEINZ COMPANY $ 198,056
1,741 HERSHEY FOODS CORPORATION 84,765
5,241 KELLOGG COMPANY 155,920
18,556 PEPSICO INCORPORATED 824,581
1,708 QUAKER OATS COMPANY 128,314
3,907 RALSTON-PURINA GROUP 77,896
11,192 SARA LEE CORPORATION 216,146
5,608 SEAGRAM COMPANY LIMITED 325,264
1,482 WM. WRIGLEY JR COMPANY 118,838
5,306,912
------------
FOOD STORES - 0.17%
5,469 ALBERTSON'S INCORPORATED 181,844
499 GREAT ATLANTIC & PACIFIC TEA
COMPANY 8,296
10,781 KROGER COMPANY+ 237,856
1,915 WINN-DIXIE STORES INCORPORATED 27,408
455,404
------------
GENERAL MERCHANDISE STORES - 1.69%
1,468 CONSOLIDATED STORES
CORPORATION+ 17,616
1,354 DILLARDS INCORPORATED CLASS A 16,587
4,252 DOLLAR GENERAL CORPORATION 82,914
2,725 FEDERATED DEPARTMENT STORES
INCORPORATED+ 91,969
913 HARCOURT GENERAL INCORPORATED 49,644
3,395 J C PENNEY COMPANY
INCORPORATED 62,595
6,292 K-MART CORPORATION+ 42,864
4,266 MAY DEPARTMENT STORES COMPANY 102,384
4,573 SEARS ROEBUCK & COMPANY 149,194
5,863 TARGET CORPORATION 340,054
950 TIFFANY & COMPANY 64,125
3,887 TJX COMPANIES INCORPORATED 72,881
57,365 WAL-MART STORES INCORPORATED 3,305,657
4,398,484
------------
HEALTH SERVICES - 0.14%
7,185 COLUMBIA HCA HEALTHCARE
CORPORATION 218,244
4,966 HEALTHSOUTH CORPORATION+ 35,693
1,346 MANOR CARE INCORPORATED+ 9,422
4,023 TENET HEALTHCARE CORPORATION 108,621
371,980
------------
HEAVY CONSTRUCTION OTHER THAN BUILDING CONSTRUCTION-CONTRACTORS - 0.01%
978 FLUOR CORPORATION 30,929
------------
HOME FURNITURE, FURNISHINGS & EQUIPMENT STORES - 0.16%
2,644 BEST BUY COMPANY INCORPORATED+ 167,233
2,584 CIRCUIT CITY STORES
INCORPORATED 85,757
2,550 LEGGETT & PLATT INCORPORATED 42,075
</TABLE>
24
<PAGE>
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000 VARIABLE TRUST
--------------------------------------------------------------------------------
VARIABLE TRUST ASSET ALLOCATION FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C>
HOME FURNITURE, FURNISHINGS & EQUIPMENT STORES (continued)
2,428 RADIOSHACK CORPORATION $ 115,027
410,092
------------
HOTELS, ROOMING HOUSES, CAMPS & OTHER LODGING PLACES - 0.06%
4,736 HILTON HOTELS CORPORATION 44,400
3,136 MARRIOTT INTERNATIONAL 113,092
157,492
------------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT - 6.83%
4,204 APPLE COMPUTER INCORPORATED+ 220,185
10,372 APPLIED MATERIALS
INCORPORATED+ 939,963
4,244 BAKER HUGHES INCORPORATED 135,808
1,119 BLACK & DECKER CORPORATION 43,991
303 BRIGGS & STRATTON CORPORATION 10,378
1,225 BRUNSWICK CORPORATION 20,289
4,509 CATERPILLAR INCORPORATED 152,742
89,581 CISCO SYSTEMS INCORPORATED+ 5,693,991
21,844 COMPAQ COMPUTER CORPORATION 558,387
4,677 COMPUWARE CORPORATION+ 48,524
530 CUMMINS ENGINE COMPANY
INCORPORATED 14,443
3,033 DEERE & COMPANY 112,221
33,160 DELL COMPUTER CORPORATION+ 1,635,203
2,602 DOVER CORPORATION 105,544
27,914 EMC CORPORATION+ 2,147,633
4,120 GATEWAY INCORPORATED+ 233,810
12,826 HEWLETT PACKARD COMPANY 1,601,647
2,114 INGERSOLL-RAND COMPANY 85,089
22,812 INTERNATIONAL BUSINESS
MACHINES CORPORATION 2,499,340
1,675 LEXMARK INTERNATIONAL
INCORPORATED CLASS A+ 112,644
753 MCDERMOTT INTERNATIONAL
INCORPORATED 6,636
5,111 MINNESOTA MINING &
MANUFACTURING COMPANY 421,658
1,601 PALL CORPORATION 29,619
3,339 PITNEY BOWES INCORPORATED 133,560
2,902 SEAGATE TECHNOLOGY
INCORPORATED+ 159,610
7,648 SOLECTRON CORPORATION+ 320,260
824 TIMKEN COMPANY 15,347
6,072 UNITED TECHNOLOGIES
CORPORATION 357,489
17,816,011
------------
INSURANCE AGENTS, BROKERS & SERVICE - 0.23%
3,307 AON CORPORATION 102,724
2,233 HUMANA INCORPORATED+ 10,886
3,488 MARSH & MCLENNAN COMPANIES
INCORPORATED 364,278
1,361 MGIC INVESTMENT CORPORATION 61,926
1,558 T ROWE PRICE ASSOCIATES 66,215
606,029
------------
</TABLE>
25
<PAGE>
VARIABLE TRUST PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000
--------------------------------------------------------------------------------
VARIABLE TRUST ASSET ALLOCATION FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C>
INSURANCE CARRIERS - 1.76%
1,821 AETNA INCORPORATED $ 116,885
3,418 AFLAC INCORPORATED 157,014
9,593 ALLSTATE CORPORATION 213,444
3,188 AMERICAN GENERAL CORPORATION 194,468
19,826 AMERICAN INTERNATIONAL GROUP
INCORPORATED 2,329,555
2,288 CHUBB CORPORATION 140,712
2,098 CIGNA CORPORATION 196,163
2,130 CINCINNATI FINANCIAL
CORPORATION 66,962
2,798 HARTFORD FINANCIAL SERVICES
GROUP 156,513
1,336 JEFFERSON PILOT CORPORATION 75,401
2,503 LINCOLN NATIONAL CORPORATION 90,421
1,273 LOEWS CORPORATION 76,380
1,286 MBIA INCORPORATED 61,969
937 PROGRESSIVE CORPORATION 69,338
1,808 PROVIDIAN FINANCIAL
CORPORATION 162,720
1,658 SAFECO CORPORATION 32,953
2,756 ST. PAUL COMPANIES
INCORPORATED 94,049
1,700 TORCHMARK CORPORATION 41,969
2,117 UNITED HEALTHCARE INCORPORATED 181,533
3,077 UNUM PROVIDENT CORPORATION 61,732
814 WELLPOINT HEALTH NETWORKS+ 58,964
4,579,145
------------
LUMBER & WOOD PRODUCTS, EXCEPT FURNITURE - 0.01%
1,356 LOUISIANA-PACIFIC CORPORATION 14,747
------------
MEASURING, ANALYZING, & CONTROLLING INSTRUMENTS; PHOTOGRAPHIC, MEDICAL &
OPTICAL GOODS - 1.63%
5,829 AGILENT TECHNOLOGIES
INCORPORATED+ 429,889
1,687 ALLERGAN INCORPORATED 125,682
4,530 ANALOG DEVICES INCORPORATED+ 344,280
681 BAUSCH & LOMB INCORPORATED 52,692
3,750 BAXTER INTERNATIONAL
INCORPORATED 263,672
3,229 BECTON DICKINSON & COMPANY 92,632
1,489 BIOMET INCORPORATED 57,233
5,302 BOSTON SCIENTIFIC CORPORATION+ 116,313
663 C R BARD INCORPORATED 31,907
1,813 DANAHER CORPORATION 89,630
4,019 EASTMAN KODAK COMPANY 239,131
969 EATON CORPORATION 64,923
3,961 GUIDANT CORPORATION+ 196,070
10,266 HONEYWELL INTERNATIONAL
INCORPORATED 345,836
1,083 JOHNSON CONTROLS INCORPORATED 55,571
2,369 KLA-TENCOR CORPORATION+ 138,735
15,380 MEDTRONIC INCORPORATED 766,116
581 MILLIPORE CORPORATION 43,793
2,666 PE BIOSYSTEMS GROUP 175,623
598 PERKINELMER INCORPORATED 39,543
582 POLAROID CORPORATION 10,512
</TABLE>
26
<PAGE>
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000 VARIABLE TRUST
--------------------------------------------------------------------------------
VARIABLE TRUST ASSET ALLOCATION FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C>
MEASURING, ANALYZING, & CONTROLLING INSTRUMENTS; PHOTOGRAPHIC, MEDICAL &
OPTICAL GOODS (continued)
4,337 RAYTHEON COMPANIES CLASS B $ 83,487
1,100 ST. JUDE MEDICAL INCORPORATED+ 50,463
608 TEKTRONIX INCORPORATED 44,992
2,223 TERADYNE INCORPORATED+ 163,391
1,998 THERMO ELECTRON CORPORATION+ 42,083
8,560 XEROX CORPORATION 177,620
4,241,819
------------
METAL MINING - 0.11%
5,111 BARRICK GOLD CORPORATION 92,956
2,117 FREEPORT MCMORAN COPPER & GOLD
INCORPORATED CLASS B+ 19,582
3,448 HOMESTAKE MINING COMPANY 23,705
2,462 INCO LIMITED+ 37,853
2,147 NEWMONT MINING CORPORATION 46,429
1,046 PHELPS DODGE CORPORATION 38,898
4,170 PLACER DOME INCORPORATED 39,876
299,299
------------
MINING & QUARRYING OF NONMETALLIC MINERALS, EXCEPT FUELS - 0.02%
1,276 VULCAN MATERIALS COMPANY 54,469
------------
MISCELLANEOUS MANUFACTURING INDUSTRIES - 0.44%
2,256 HASBRO INCORPORATED 33,981
5,444 MATTEL INCORPORATED 71,793
21,709 TYCO INTERNATIONAL LIMITED 1,028,463
1,134,237
------------
MISCELLANEOUS RETAIL - 0.57%
1,803 BED BATH & BEYOND
INCORPORATED+ 65,359
5,756 COSTCO WHOLESALE CORPORATION+ 189,948
5,021 CVS CORPORATION 200,840
7,143 KIMBERLY-CLARK CORPORATION 409,830
508 LONGS DRUG STORES CORPORATION 11,049
4,266 OFFICE DEPOT INCORPORATED+ 26,663
3,435 RITE AID CORPORATION 22,542
6,198 STAPLES INCORPORATED+ 95,294
2,891 TOYS "R" US INCORPORATED+ 42,100
12,963 WALGREEN'S COMPANY 417,247
1,480,872
------------
MOTION PICTURES - 0.89%
16,947 TIME WARNER INCORPORATED 1,287,972
26,737 WALT DISNEY COMPANY 1,037,730
2,325,702
------------
NONDEPOSITORY CREDIT INSTITUTIONS - 1.13%
17,179 AMERICAN EXPRESS CORPORATION 895,455
9,384 ASSOCIATES FIRST CAPITAL
CORPORATION 209,381
2,545 CAPITAL ONE FINANCIAL
CORPORATION 113,571
</TABLE>
27
<PAGE>
VARIABLE TRUST PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000
--------------------------------------------------------------------------------
VARIABLE TRUST ASSET ALLOCATION FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C>
NONDEPOSITORY CREDIT INSTITUTIONS (continued)
4,363 CONSECO INCORPORATED $ 42,539
1,454 COUNTRYWIDE CREDIT INDUSTRIES
INCORPORATED 44,074
8,963 FEDERAL HOME LOAN MORTGAGE
CORPORATION 363,002
12,936 FEDERAL NATIONAL MORTGAGE
ASSOCIATION 675,098
6,054 HOUSEHOLD INTERNATIONAL
INCORPORATED 251,619
10,337 MBNA CORPORATION 280,391
2,043 SLM HOLDING CORPORATION 76,485
2,951,615
------------
OIL & GAS EXTRACTION - 0.71%
1,622 ANADARKO PETROLEUM CORPORATION 79,985
1,447 APACHE CORPORATION 85,102
2,807 BURLINGTON RESOURCES
INCORPORATED 107,368
9,397 ENRON CORPORATION 606,107
1,224 KERR MCGEE CORPORATION 72,140
4,754 OCCIDENTAL PETROLEUM
CORPORATION 100,131
1,187 ROWAN COMPANIES INCORPORATED+ 36,055
7,298 SCHLUMBERGER LIMITED 544,613
2,701 TRANSOCEAN SEDCO FOREX
INCORPORATED+ 144,335
3,269 UNION PACIFIC RESOURCES GROUP
INCORPORATED 71,918
1,847,754
------------
PAPER & ALLIED PRODUCTS - 0.26%
660 BEMIS COMPANY INCORPORATED 22,193
740 BOISE CASCADE CORPORATION 19,148
2,727 FORT JAMES CORPORATION 63,062
2,194 GEORGIA-PACIFIC GROUP 57,593
6,192 INTERNATIONAL PAPER COMPANY 184,599
1,303 MEAD CORPORATION 32,901
2,243 PACTIV CORPORATION+ 17,664
1,069 SEALED AIR CORPORATION+ 55,989
725 TEMPLE-INLAND INCORPORATED 30,450
1,277 WESTVACO CORPORATION 31,686
3,034 WEYERHAEUSER COMPANY 130,462
1,426 WILLAMETTE INDUSTRIES
INCORPORATED 38,859
684,606
------------
PERSONAL SERVICES - 0.03%
1,264 H&R BLOCK INCORPORATED 40,922
1,688 SABRE HOLDINGS CORPORATION 48,108
89,030
------------
PETROLEUM REFINING & RELATED INDUSTRIES - 2.77%
1,187 AMERADA HESS CORPORATION 73,297
915 ASHLAND INCORPORATED 32,082
8,352 CHEVRON CORPORATION 708,354
8,054 CONOCO INCORPORATED CLASS B 197,826
44,805 EXXON MOBIL CORPORATION 3,517,193
</TABLE>
28
<PAGE>
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000 VARIABLE TRUST
--------------------------------------------------------------------------------
VARIABLE TRUST ASSET ALLOCATION FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C>
PETROLEUM REFINING & RELATED INDUSTRIES (continued)
3,250 PHILLIPS PETROLEUM COMPANY $ 164,734
27,607 ROYAL DUTCH PETROLEUM COMPANY
ADR 1,699,541
1,143 SUNOCO INCORPORATED 33,647
7,096 TEXACO INCORPORATED 377,862
2,751 COASTAL CORPORATION 167,467
1,856 TOSCO CORPORATION 52,548
3,130 UNOCAL CORPORATION 103,681
4,022 USX-MARATHON GROUP 100,801
7,229,033
------------
PRIMARY METAL INDUSTRIES - 0.20%
2,823 ALCAN ALUMINUM LIMITED 87,513
11,104 ALCOA INCORPORATED 322,016
1,179 ALLEGHENY TECHNOLOGIES
INCORPORATED 21,222
1,646 BETHLEHEM STEEL CORPORATION+ 5,864
1,594 ENGELHARD CORPORATION 27,198
1,122 NUCOR CORPORATION 37,236
1,147 USX-US STEEL GROUP 21,291
1,157 WORTHINGTON INDUSTRIES
INCORPORATED 12,149
534,489
------------
PRINTING, PUBLISHING & ALLIED INDUSTRIES - 0.81%
809 AMERICAN GREETINGS CORPORATION
CLASS A 15,371
1,143 DOW JONES & COMPANY
INCORPORATED 83,725
3,451 GANNETT COMPANY INCORPORATED 206,413
1,045 KNIGHT-RIDDER INCORPORATED 55,581
2,506 MCGRAW-HILL INCORPORATED 135,324
648 MEREDITH CORPORATION 21,870
2,197 NEW YORK TIMES COMPANY CLASS A 86,782
1,620 R. R. DONNELLEY & SONS COMPANY 36,551
3,979 TRIBUNE COMPANY 139,265
19,631 VIACOM INCORPORATED CLASS B+ 1,338,588
2,119,470
------------
RAILROAD TRANSPORTATION - 0.19%
5,558 BURLINGTON NORTHERN SANTA FE 127,487
2,801 CSX CORPORATION 59,346
1,442 KANSAS CITY SOUTHERN
INDUSTRIES INCORPORATED 127,887
4,956 NORFOLK SOUTHERN CORPORATION 73,721
3,206 UNION PACIFIC CORPORATION 119,223
507,664
------------
RUBBER & MISCELLANEOUS PLASTICS PRODUCTS - 0.21%
491 ARMSTRONG WORLD INDUSTRIES
INCORPORATED 7,518
1,040 COOPER TIRE AND RUBBER COMPANY 11,570
1,998 GOODYEAR TIRE & RUBBER COMPANY 39,960
3,875 ILLINOIS TOOL WORKS
INCORPORATED 220,875
3,464 NEWELL RUBBERMAID INCORPORATED 89,198
</TABLE>
29
<PAGE>
VARIABLE TRUST PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000
--------------------------------------------------------------------------------
VARIABLE TRUST ASSET ALLOCATION FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C>
RUBBER & MISCELLANEOUS PLASTICS PRODUCTS (continued)
3,556 NIKE INCORPORATED CLASS B $ 141,573
690 REEBOK INTERNATIONAL LIMITED+ 10,997
767 TUPPERWARE CORPORATION 16,874
538,565
------------
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES - 1.06%
1,480 BEAR STEARNS & COMPANY
INCORPORATED 61,605
17,530 CHARLES SCHWAB CORPORATION 589,446
3,161 FRANKLIN RESOURCES
INCORPORATED 96,015
1,573 LEHMAN BROTHERS HOLDINGS 148,747
5,009 MERRILL LYNCH & COMPANY
INCORPORATED 576,035
14,524 MORGAN STANLEY DEAN WITTER &
COMPANY 1,209,123
1,852 PAINEWEBBER GROUP INCORPORATED 84,266
2,765,237
------------
STONE, CLAY, GLASS & CONCRETE PRODUCTS - 0.38%
3,536 CORNING INCORPORATED 954,278
769 OWENS CORNING FIBERGLASS
CORPORATION 7,113
1,993 OWENS-ILLINOIS INCORPORATED+ 23,293
984,684
------------
TELECOMMUNICATIONS - 0.28%
1,921 COMVERSE TECHNOLOGY
INCORPORATED+ 178,653
6,523 US WEST INCORPORATED 559,347
738,000
------------
TEXTILE MILL PRODUCTS - 0.01%
417 RUSSELL CORPORATION 8,340
221 SPRINGS INDUSTRIES
INCORPORATED CLASS A 7,113
15,453
------------
TOBACCO PRODUCTS - 0.31%
29,440 PHILIP MORRIS COMPANIES
INCORPORATED 782,000
2,236 UST INCORPORATED 32,841
814,841
------------
TRANSPORTATION BY AIR - 0.11%
1,898 AMR CORPORATION+ 50,178
1,596 DELTA AIR LINES INCORPORATED 80,698
6,470 SOUTHWEST AIRLINES COMPANY 122,526
884 US AIR GROUP INCORPORATED+ 34,476
287,878
------------
TRANSPORTATION EQUIPMENT - 0.97%
11,641 BOEING COMPANY 486,739
2,046 DANA CORPORATION 43,350
7,247 DELPHI AUTOMOTIVE SYSTEMS
CORPORATION 105,535
15,504 FORD MOTOR COMPANY 666,672
2,610 GENERAL DYNAMICS CORPORATION 136,373
</TABLE>
30
<PAGE>
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000 VARIABLE TRUST
--------------------------------------------------------------------------------
VARIABLE TRUST ASSET ALLOCATION FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C>
TRANSPORTATION EQUIPMENT (continued)
6,877 GENERAL MOTORS CORPORATION $ 399,296
3,905 HARLEY-DAVIDSON INCORPORATED 150,343
1,133 ITT INDUSTRIES INCORPORATED 34,415
5,125 LOCKHEED MARTIN CORPORATION 127,164
800 NAVISTAR INTERNATIONAL+ 24,850
886 NORTHROP GRUMMAN CORPORATION 58,698
1,029 PACCAR INCORPORATED 40,838
2,432 ROCKWELL INTERNATIONAL
CORPORATION 76,608
1,899 TEXTRON INCORPORATED 103,139
1,592 TRW INCORPORATED 69,053
2,523,073
------------
TRANSPORTATION SERVICES - 0.05%
3,756 FEDEX CORPORATION+ 142,728
------------
WATER TRANSPORTATION - 0.06%
7,809 CARNIVAL CORPORATION CLASS A 152,276
------------
WHOLESALE TRADE-DURABLE GOODS - 0.73%
2,318 GENUINE PARTS COMPANY 46,360
17,891 JOHNSON & JOHNSON 1,822,646
382 POTLATCH CORPORATION 12,654
2,030 VISTEON CORPORATION+ 24,613
1,906,273
------------
WHOLESALE TRADE-NONDURABLE GOODS - 0.41%
3,546 CARDINAL HEALTH INCORPORATED 262,404
6,414 SAFEWAY INCORPORATED+ 289,432
1,784 SUPERVALU INCORPORATED 34,008
4,257 SYSCO CORPORATION 179,326
7,330 UNILEVER NV 315,190
1,080,360
------------
161,152,902
TOTAL COMMON STOCK (COST $137,144,063)
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL INTEREST RATE MATURITY DATE
<C> <S> <C> <C> <C>
U.S. TREASURY OBLIGATIONS - 37.61%
U.S. TREASURY BILLS - 2.82%
$2,117,000 U.S. TREASURY BILLS 5.22%{::} 07/13/00 2,113,849
4,883,000 U.S. TREASURY BILLS 5.50{::} 08/03/00 4,859,681
375,000 U.S. TREASURY BILLS{*} 5.78{::} 09/21/00 370,275
7,343,805
-------------
U.S. TREASURY BONDS - 34.79%
5,580,000 U.S. TREASURY BONDS 8.75 08/15/20 7,158,080
3,220,000 U.S. TREASURY BONDS 7.88 02/15/21 3,823,750
1,970,000 U.S. TREASURY BONDS 8.13 05/15/21 2,398,475
3,170,000 U.S. TREASURY BONDS 8.13 08/15/21 3,865,403
8,100,000 U.S. TREASURY BONDS 8.00 11/15/21 9,775,647
</TABLE>
31
<PAGE>
VARIABLE TRUST PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000
--------------------------------------------------------------------------------
VARIABLE TRUST ASSET ALLOCATION FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
$1,810,000 U.S. TREASURY BONDS 7.25 08/15/22 $ 2,030,585
2,610,000 U.S. TREASURY BONDS 7.63% 11/15/22 3,047,984
4,210,000 U.S. TREASURY BONDS 7.13 02/15/23 4,670,448
7,090,000 U.S. TREASURY BONDS 6.25 08/15/23 7,134,313
3,370,000 U.S. TREASURY BONDS 7.50 11/15/24 3,919,714
4,020,000 U.S. TREASURY BONDS 7.63 02/15/25 4,741,067
3,920,000 U.S. TREASURY BONDS 6.88 08/15/25 4,261,746
3,980,000 U.S. TREASURY BONDS 6.00 02/15/26 3,890,450
2,710,000 U.S. TREASURY BONDS 6.75 08/15/26 2,912,383
2,270,000 U.S. TREASURY BONDS 6.50 11/15/26 2,367,882
2,420,000 U.S. TREASURY BONDS 6.63 02/15/27 2,565,950
3,360,000 U.S. TREASURY BONDS 6.38 08/15/27 3,455,525
6,910,000 U.S. TREASURY BONDS 6.13 11/15/27 6,888,372
2,320,000 U.S. TREASURY BONDS 5.50 08/15/28 2,127,857
3,520,000 U.S. TREASURY BONDS 5.25 11/15/28 3,115,200
2,020,000 U.S. TREASURY BONDS 5.25 02/15/29 1,792,104
2,120,000 U.S. TREASURY BONDS 6.13 08/15/29 2,143,044
2,500,000 U.S. TREASURY BONDS 6.25 05/15/30 2,624,200
90,710,179
-------------
98,053,984
TOTAL U.S. TREASURY OBLIGATIONS (COST
$96,881,483)
-------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(COST $234,025,546)* 99.41% $ 259,206,886
OTHER ASSETS AND LIABILITIES, NET 0.59 1,528,314
------- -------------
TOTAL NET ASSETS 100.00% $ 260,735,200
------- -------------
</TABLE>
+ NON-INCOME EARNING SECURITIES.
{::} YIELD TO MATURITY.
{*} SECURITIES PLEDGED AS COLLATERAL FOR FUTURES TRANSACTIONS.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL STATEMENT
PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<CAPTION>
<S> <C>
GROSS UNREALIZED APPRECIATION $40,699,873
GROSS UNREALIZED DEPRECIATION (15,518,533)
-----------
NET UNREALIZED APPRECIATION $25,181,340
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
32
<PAGE>
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000 VARIABLE TRUST
--------------------------------------------------------------------------------
VARIABLE TRUST CORPORATE BOND FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
CORPORATE BONDS & NOTES - 66.21%
AMUSEMENT & RECREATION SERVICES - 0.71%
$ 250,000 HOLLYWOOD PARK INCORPORATED 9.25% 02/15/07 $ 248,750
250,000 PARK PLACE ENTERTAINMENT 9.38 02/15/07 250,000
498,750
-----------
BUILDING CONSTRUCTION-GENERAL CONTRACTORS & OPERATIVE BUILDERS - 0.35%
250,000 D.R. HORTON INCORPORATED 10.00 04/15/06 246,875
-----------
BUSINESS SERVICES - 2.02%
270,000 CENDANT CORPORATION 7.75 12/01/03 260,888
500,000 FIRST DATA CORPORATION 6.38 12/15/07 473,125
700,000 ORACLE CORPORATION 6.72 02/15/04 686,000
1,420,013
-----------
CHEMICALS & ALLIED PRODUCTS - 4.01%
460,000 AMERICAN HOME PRODUCTS
CORPORATION 7.25 03/01/23 438,725
375,000 GEORGIA GULF CORPORATION 10.38 11/01/07 390,000
250,000 HUNTSMAN ICI CHEMICALS (EURO)
(A) 10.13 07/01/09 250,288
375,000 ICN PHARMACEUTICALS
INCORPORATED 9.25 08/15/05 371,250
250,000 LYONDELL CHEMICAL COMPANY 9.63 05/01/07 246,250
1,250,000 MERCK & COMPANY INCORPORATED 6.40 03/01/28 1,126,562
2,823,075
-----------
COMMUNICATIONS - 5.24%
250,000 ADELPHIA COMMUNICATIONS 9.38 11/15/09 231,250
250,000 ADELPHIA COMMUNICATIONS 9.88 03/01/07 239,375
250,000 CHARTER COMMUNICATIONS
HOLDINGS LIMITED LIABILITY
CORPORATION 8.63 04/01/09 219,688
500,000 CHARTER COMMUNICATIONS
HOLDINGS LIMITED LIABILITY
CORPORATION 11.75{::} 01/15/10 284,375
450,000 CLEAR CHANNEL COMMUNICATIONS
INCORPORATED 7.25 10/15/27 400,500
500,000 CSC HOLDINGS INCORPORATED 9.25 11/01/05 503,125
500,000 LCI INTERNATIONAL INCORPORATED
(QWEST) 7.25 06/15/07 480,625
500,000 SPRINT CAPITAL CORPORATION 6.13 11/15/08 445,625
875,000 WORLDCOM INCORPORATED 8.00 05/15/06 884,843
3,689,406
-----------
DEPOSITORY INSTITUTIONS - 8.67%
500,000 BANK UNITED 8.00 03/15/09 444,375
500,000 BANKBOSTON CORPORATION 6.88 07/15/03 490,625
500,000 BANKERS TRUST NEW YORK COMPANY 7.38 05/01/08 481,875
2,500,000 CHASE MANHATTAN CORPORATION 7.00 11/15/09 2,359,374
750,000 HSBC USA 6.63 03/01/09 690,938
500,000 PNC BANK CORPORATION 6.50 05/01/08 460,000
700,000 POPULAR NORTH AMERICAN 6.63 01/15/04 672,585
500,000 SOCIETY CORPORATION 8.13 06/15/02 505,000
6,104,772
-----------
</TABLE>
33
<PAGE>
VARIABLE TRUST PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000
--------------------------------------------------------------------------------
VARIABLE TRUST CORPORATE BOND FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
ELECTRIC, GAS & SANITARY SERVICES - 3.88%
250,000 ALLIED WASTE NORTH AMERICA 7.88% 01/01/09 $ 213,125
2,000,000 NRG ENERGY INCORPORATED 8.00 11/01/03 1,987,500
600,000 REPUBLIC SERVICES INCORPORATED 7.13 05/15/09 531,750
2,732,375
-----------
FABRICATED METAL PRODUCTS, EXCEPT MACHINERY & TRANSPORTATION EQUIPMENT - 0.72%
500,000 LOCKHEED MARTIN CORPORATION 8.50 12/01/29 509,375
-----------
FINANCIAL SERVICES - 1.86%
1,350,000 WASHINGTON MUTUAL INCORPORATED 7.50 08/15/06 1,311,187
-----------
FOOD & KINDRED PRODUCTS - 2.88%
1,142,000 ANHEUSER-BUSCH COMPANIES 9.00 12/01/09 1,263,338
500,000 CANANDAIGUA BRANDS 8.63 08/01/06 493,750
250,000 INTERNATIONAL HOME FOODS 10.38 11/01/06 267,500
2,024,588
-----------
FOOD STORES - 0.36%
270,000 MARSH SUPERMARKET INCORPORATED 8.88 08/01/07 251,100
-----------
FURNITURE & FIXTURES - 0.52%
375,000 LEAR CORPORATION 8.25 02/01/02 367,500
-----------
GENERAL MERCHANDISE STORES - 0.53%
500,000 SAKS INCORPORATED 7.38 02/15/19 371,250
-----------
HEALTH SERVICES - 0.34%
250,000 TENET HEALTHCARE CORPORATION 8.63 01/15/07 238,750
-----------
HOLDING & OTHER INVESTMENT OFFICES - 3.47%
1,750,000 ERP OPERATING LIMITED
PARTNERSHIP 7.95 04/15/02 1,747,813
750,000 SPIEKER PROPERTIES LIMITED
PARTNERSHIP 7.25 05/01/09 698,437
2,446,250
-----------
HOTELS, ROOMING HOUSES, CAMPS & OTHER LODGING PLACES - 0.51%
375,000 STATION CASINOS 8.88 12/01/08 357,188
-----------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT - 2.51%
1,050,000 DELL COMPUTER CORPORATION 7.10 04/15/28 938,437
825,000 HEWLETT-PACKARD COMPANY 7.15 06/15/05 828,005
1,766,442
-----------
INDUSTRIAL SERVICES - 0.24%
200,000 GRUMA SA DE CV 7.63 10/15/07 170,750
-----------
INSURANCE CARRIERS - 1.10%
700,000 AMBAC INCORPORATED 9.38 08/01/11 777,000
-----------
MISCELLANEOUS RETAIL - 0.66%
500,000 STAPLES INCORPORATED 7.13 08/15/07 466,250
-----------
NONDEPOSITORY CREDIT INSTITUTIONS - 6.44%
1,350,000 COUNTRYWIDE HOME LOAN 6.25 04/15/09 1,179,561
</TABLE>
34
<PAGE>
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000 VARIABLE TRUST
--------------------------------------------------------------------------------
VARIABLE TRUST CORPORATE BOND FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
NONDEPOSITORY CREDIT INSTITUTIONS (continued)
500,000 FORD MOTOR CREDIT COMPANY 5.13% 10/15/01 $ 486,875
1,000,000 FORD MOTOR CREDIT COMPANY 7.38 10/28/09 967,500
185,000 GENERAL ELECTRIC CAPITAL
CORPORATION 7.88 12/01/06 190,088
1,592,000 GENERAL ELECTRIC CAPITAL
CORPORATION 8.63 06/15/08 1,707,420
4,531,444
-----------
OIL & GAS EXTRACTION - 2.85%
700,000 CANADIAN OCCIDENTAL PETROLEUM 7.13 02/04/04 686,875
150,000 GULF CANADA RESOURCE 9.25 01/15/04 150,750
700,000 KERR-MCGEE CORPORATION 8.13 10/15/05 714,875
100,000 OCEAN ENERGY INCORPORATED 8.88 07/15/07 99,500
100,000 PIONEER NATURAL RESOURCES 9.63 04/01/10 103,250
150,000 SNYDER OIL CORPORATION 8.75 06/15/07 150,750
100,000 VINTAGE PETROLEUM INCORPORATED 9.00 12/15/05 99,500
2,005,500
-----------
PAPER & ALLIED PRODUCTS - 1.83%
500,000 KAPPA BEHEER BV (EURO) (A) 10.88{::} 07/15/09 306,058
500,000 PLAYTEX FAMILY PRODUCTS
CORPORATION 9.00 12/15/03 483,750
125,000 PLAYTEX FAMILY PRODUCTS
CORPORATION 8.88 07/15/04 120,625
375,000 TEMBEC FINANCE CORPORATION 9.88 09/30/05 376,875
1,287,308
-----------
PETROLEUM REFINING & RELATED INDUSTRIES - 3.18%
1,430,000 AMOCO COMPANY 6.50 08/01/07 1,374,588
200,000 ATLANTIC RICHFIELD COMPANY 9.00 04/01/21 231,500
500,000 COASTAL CORPORATION 6.95 06/01/28 441,875
200,000 TOSCO CORPORATION 7.80 01/01/27 190,500
2,238,463
-----------
PRINTING & PUBLICATIONS - 0.52%
375,000 HOLLINGER INTERNATIONAL
PUBLISHING 9.25 03/15/07 369,375
-----------
PRINTING, PUBLISHING & ALLIED INDUSTRIES - 0.37%
255,000 NEWS AMERICA HOLDINGS 8.88 04/26/23 261,375
-----------
REAL ESTATE - 0.72%
500,000 ROUSE COMPANY 8.50 01/15/03 505,625
-----------
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES - 5.37%
2,000,000 LEHMAN BROTHERS HOLDINGS 7.00 05/15/03 1,952,500
2,000,000 GOLDMAN SACHS GROUP
INCORPORATED 6.65 05/15/09 1,832,500
3,785,000
-----------
TRANSPORTATION BY AIR - 1.76%
1,363,444 CONTINENTAL AIRLINES 6.54 02/02/19 1,240,857
-----------
TRANSPORTATION EQUIPMENT - 1.90%
1,350,000 GENERAL MOTORS ACCEPTANCE
CORPORATION 7.75 01/19/10 1,339,874
-----------
</TABLE>
35
<PAGE>
VARIABLE TRUST PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000
--------------------------------------------------------------------------------
VARIABLE TRUST CORPORATE BOND FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
TRANSPORTATION SERVICES - 0.18%
125,000 CB BUS AB (EURO) (A) 11.00% 02/15/10 $ 124,017
-----------
WHOLESALE TRADE-DURABLE GOODS - 0.51%
375,000 RUSSEL METALS INCORPORATED 10.00 06/01/09 356,719
-----------
46,618,453
TOTAL CORPORATE BONDS & NOTES (COST
$47,369,181)
-----------
MUNICIPAL SECURITIES - 0.28%
MUNICIPAL NOTES - 0.28%
200,000 DENVER COLORADO CITY AND
COUNTY SCHOOL DISTRICT #1
EDUCATIONAL FACILITIES REVENUE
BONDS TAXABLE PENSION SCHOOL
FACILITIES LEASE AMBAC INSURED 6.49 12/15/02 196,750
-----------
196,750
TOTAL MUNICIPAL SECURITIES (COST $199,814)
-----------
U.S. GOVERNMENT AGENCY SECURITIES - 3.05%
FEDERAL HOME LOAN MORTGAGE CORPORATION - 0.43%
300,000 FHLMC 7.10 04/10/07 300,444
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 2.40%
465,907 FNMA #449466 6.50 11/01/28 439,118
453,096 FNMA #454390 6.00 12/01/28 414,438
918,498 FNMA #455607 6.00 12/01/28 840,132
1,693,688
-----------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 0.22%
154,643 GNMA #445071 7.50 01/15/27 153,531
-----------
2,147,663
TOTAL U.S. GOVERNMENT AGENCY SECURITIES
(COST $2,197,976)
-----------
U.S. TREASURY SECURITIES - 28.84%
U.S. TREASURY BONDS - 9.70%
200,000 U.S. TREASURY BONDS 11.25 02/15/15 294,374
300,000 U.S. TREASURY BONDS 8.88 02/15/19 385,311
500,000 U.S. TREASURY BONDS 8.13 08/15/19 603,125
500,000 U.S. TREASURY BONDS 8.13 08/15/21 609,685
750,000 U.S. TREASURY BONDS 5.25 11/15/28 663,750
4,250,000 U.S. TREASURY BONDS 5.25 02/15/29 3,770,515
500,000 U.S. TREASURY BONDS 6.13 08/15/29 505,435
6,832,195
-----------
U.S. TREASURY NOTES - 19.14%
750,000 U.S. TREASURY NOTES 5.75 11/30/02 738,728
2,475,000 U.S. TREASURY NOTES 5.88 11/15/04 2,436,365
1,200,000 U.S. TREASURY NOTES 7.88 11/15/04 1,269,816
2,400,000 U.S. TREASURY NOTES 6.75 05/15/05 2,456,232
2,200,000 U.S. TREASURY NOTES 6.50 08/15/05 2,223,364
400,000 U.S. TREASURY NOTES 6.63 05/15/07 408,248
250,000 U.S. TREASURY NOTES 6.13 08/15/07 248,515
3,575,000 U.S. TREASURY NOTES 6.50 02/15/10 3,691,080
13,472,348
-----------
20,304,543
TOTAL U.S. TREASURY SECURITIES (COST
$20,017,657)
-----------
</TABLE>
36
<PAGE>
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000 VARIABLE TRUST
--------------------------------------------------------------------------------
VARIABLE TRUST CORPORATE BOND FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
SHORT-TERM INVESTMENTS - 1.15%
REPURCHASE AGREEMENTS - 1.15%
807,000 GOLDMAN SACHS REPURCHASE
AGREEMENT - 102%
COLLATERALIZED BY U.S.
GOVERNMENT SECURITIES 6.57% 07/03/00 $ 807,000
-----------
807,000
TOTAL SHORT-TERM INVESTMENTS (COST
$807,000)
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(COST $70,591,627)* 99.53% $70,074,409
OTHER ASSETS AND LIABILITIES, NET 0.47 327,991
------- -----------
TOTAL NET ASSETS 100.00% $70,402,400
------- -----------
</TABLE>
{::} YIELD TO MATURITY.
(A) FOREIGN BOND PRINCIPAL IS DENOMINATED IN U.S. DOLLARS EXCEPT AS INDICATED
PARENTHETICALLY.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL STATEMENT
PURPOSES AND NET UNREALIZED DEPRECIATION CONSISTS OF:
<TABLE>
<CAPTION>
<S> <C>
GROSS UNREALIZED APPRECIATION $ 530,969
GROSS UNREALIZED DEPRECIATION (1,048,187)
----------
NET UNREALIZED DEPRECIATION $ (517,218)
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
37
<PAGE>
VARIABLE TRUST PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000
--------------------------------------------------------------------------------
VARIABLE TRUST EQUITY INCOME FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C>
COMMON STOCK - 99.57%
BUSINESS SERVICES - 1.73%
103,200 IMS HEALTH INCORPORATED $ 1,857,600
------------
CHEMICALS & ALLIED PRODUCTS - 14.10%
55,600 AMERICAN HOME PRODUCTS
CORPORATION 3,266,500
45,090 E.I. DU PONT DE NEMOURS &
COMPANY 1,972,687
35,360 MERCK & COMPANY INCORPORATED 2,709,460
77,440 PFIZER INCORPORATED 3,717,120
35,650 PROCTER & GAMBLE COMPANY 2,040,962
41,394 ROHM & HAAS COMPANY 1,428,093
15,134,822
------------
COMMUNICATIONS - 4.42%
79,397 AT&T CORPORATION 2,510,930
35,860 GTE CORPORATION 2,232,285
4,743,215
------------
DEPOSITORY INSTITUTIONS - 3.32%
20,465 J.P. MORGAN & COMPANY
INCORPORATED 2,253,708
68,280 U.S. BANCORP 1,314,390
3,568,098
------------
EATING & DRINKING PLACES - 1.64%
53,450 MCDONALD'S CORPORATION 1,760,509
------------
ELECTRIC, GAS & SANITARY SERVICES - 3.05%
31,830 PUBLIC SERVICE ENTERPRISE
GROUP INCORPORATED 1,102,114
73,603 TEXAS UTILITIES COMPANY 2,171,288
3,273,402
------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT - 10.29%
46,170 EMERSON ELECTRIC COMPANY 2,787,514
72,480 GENERAL ELECTRIC COMPANY 3,841,440
74,660 LUCENT TECHNOLOGIES
INCORPORATED 4,423,605
11,052,559
------------
ENGINEERING, ACCOUNTING, RESEARCH, MANAGEMENT & RELATED SERVICES - 1.97%
73,870 DUN & BRADSTREET CORPORATION 2,114,530
------------
FABRICATED METAL PRODUCTS, EXCEPT MACHINERY & TRANSPORTATION EQUIPMENT - 1.92%
89,670 FORTUNE BRANDS INCORPORATED 2,068,014
------------
FOOD & KINDRED PRODUCTS - 6.24%
112,440 PEPSICO INCORPORATED 4,996,553
88,200 SARA LEE CORPORATION 1,703,362
6,699,915
------------
GENERAL MERCHANDISE STORES - 5.73%
50,865 J.C. PENNEY COMPANY
INCORPORATED 937,824
</TABLE>
38
<PAGE>
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000 VARIABLE TRUST
--------------------------------------------------------------------------------
VARIABLE TRUST EQUITY INCOME FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C>
GENERAL MERCHANDISE STORES (continued)
72,957 MAY DEPARTMENT STORES COMPANY $ 1,750,968
33,080 SEARS ROEBUCK & COMPANY 1,079,235
41,070 TARGET CORPORATION 2,382,060
6,150,087
------------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT - 8.04%
38,450 HEWLETT-PACKARD COMPANY 4,801,444
35,000 IBM CORPORATION 3,834,687
8,636,131
------------
INSURANCE CARRIERS - 7.14%
60,093 AEGON NV ADR 2,140,813
32,470 AMERICAN GENERAL CORPORATION 1,980,670
103,840 ST. PAUL COMPANIES
INCORPORATED 3,543,540
7,665,023
------------
MEASURING, ANALYZING & CONTROLLING INSTRUMENTS; PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS - 3.43%
15,618 AGILENT TECHNOLOGIES
INCORPORATED+ 1,151,828
26,835 EASTMAN KODAK COMPANY 1,596,682
45,000 XEROX CORPORATION 933,750
3,682,260
------------
MISCELLANEOUS MANUFACTURING INDUSTRIES - 3.56%
80,768 TYCO INTERNATIONAL LIMITED 3,826,382
------------
MOTION PICTURES - 1.27%
35,000 WALT DISNEY COMPANY 1,358,438
------------
NONDEPOSITORY CREDIT INSTITUTIONS - 2.58%
53,070 AMERICAN EXPRESS COMPANY 2,766,274
------------
OIL & GAS EXTRACTION - 1.97%
28,310 SCHLUMBERGER LIMITED 2,112,634
------------
PAPER & ALLIED PRODUCTS - 2.02%
26,332 MINNESOTA MINING AND
MANUFACTURING COMPANY 2,172,390
------------
PETROLEUM REFINING & RELATED INDUSTRIES - 7.77%
39,459 BP AMOCO PLC ADR 2,231,900
19,625 CHEVRON CORPORATION 1,664,445
41,157 EXXON MOBIL CORPORATION 3,230,825
19,760 ROYAL DUTCH PETROLEUM COMPANY
-NY REGISTERED SHARES 1,216,475
8,343,645
------------
TOBACCO PRODUCTS - 1.46%
59,220 PHILIP MORRIS COMPANIES
INCORPORATED 1,573,031
------------
TRANSPORTATION EQUIPMENT - 3.42%
50,783 HONEYWELL INCORPORATED 1,710,752
</TABLE>
39
<PAGE>
VARIABLE TRUST PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000
--------------------------------------------------------------------------------
VARIABLE TRUST EQUITY INCOME FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C>
TRANSPORTATION EQUIPMENT (continued)
33,280 UNITED TECHNOLOGIES
CORPORATION $ 1,959,360
3,670,112
------------
WHOLESALE TRADE-DURABLE GOODS - 2.50%
26,310 JOHNSON & JOHNSON 2,680,332
------------
106,909,403
TOTAL COMMON STOCK (COST $99,558,742)
------------
<CAPTION>
INTEREST RATE MATURITY DATE
<C> <S> <C> <C> <C>
SHORT-TERM INVESTMENTS - 0.28%
$301,619 BEAR STEARNS & COMPANY
INCORPORATED (COST $301,619) 6.86% 07/03/00 301,619
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(COST $99,860,361)* 99.85% $107,211,022
OTHER ASSETS AND LIABILITIES, NET 0.15 166,296
------- ------------
TOTAL NET ASSETS 100.00% $107,377,318
------- ------------
</TABLE>
+ NON-INCOME EARNING SECURITIES.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL STATEMENT
PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<CAPTION>
<S> <C>
GROSS UNREALIZED APPRECIATION $20,020,633
GROSS UNREALIZED DEPRECIATION (12,669,972)
----------
NET UNREALIZED APPRECIATION $7,350,661
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
40
<PAGE>
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000 VARIABLE TRUST
--------------------------------------------------------------------------------
VARIABLE TRUST EQUITY VALUE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C>
COMMON STOCK - 93.64%
BUILDING MATERIALS, HARDWARE, GARDEN SUPPLY & MOBILE HOME DEALERS - 0.47%
6,700 SHERWIN-WILLIAMS COMPANY $ 141,956
-----------
CHEMICALS & ALLIED PRODUCTS - 5.72%
5,450 AMERICAN HOME PRODUCTS
CORPORATION 320,187
7,100 CLOROX COMPANY 318,169
3,950 DOW CHEMICAL COMPANY 119,241
3,850 E.I. DU PONT DE NEMOURS &
COMPANY 168,437
6,200 TEVA PHARMACEUTICAL INDUSTRIES
LIMITED ADR 343,712
8,300 WATSON PHARMACEUTICALS
INCORPORATED+ 446,125
1,715,871
-----------
COMMUNICATIONS - 9.08%
4,300 AT&T CORPORATION 135,987
6,075 BELL ATLANTIC CORPORATION+ 308,686
6,725 BELLSOUTH CORPORATION 286,653
2,775 GTE CORPORATION 172,744
10,350 MEDIAONE GROUP INCORPORATED+ 686,347
16,962 SBC COMMUNICATIONS
INCORPORATED 733,606
7,800 SPRINT CORPORATION (FON GROUP) 397,800
2,721,823
-----------
DEPOSITORY INSTITUTIONS - 12.36%
5,750 BANK OF AMERICA CORPORATION 247,250
7,600 BANK OF NEW YORK COMPANY
INCORPORATED 353,400
15,775 CHASE MANHATTAN CORPORATION 726,636
26,288 CITIGROUP INCORPORATED 1,583,852
7,750 FIFTH THIRD BANCORP 490,187
8,400 MELLON FINANCIAL CORPORATION 306,075
3,707,400
-----------
EATING & DRINKING PLACES - 0.43%
3,900 MCDONALD'S CORPORATION 128,456
-----------
ELECTRIC, GAS & SANITARY SERVICES - 3.32%
9,675 MONTANA POWER COMPANY 341,648
15,700 WILLIAMS COMPANIES
INCORPORATED 654,494
996,142
-----------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT - 7.69%
14,400 AMERICAN POWER CONVERSION
CORPORATION+ 587,700
4,875 EATON CORPORATION 326,625
14,144 KONINKLIJKE (ROYAL) PHILIPS
ELECTRONICS NV- NY SHARES 671,840
13,100 MOLEX INCORPORATED CLASS A 458,500
9,000 MOTOROLA INCORPORATED 261,563
2,306,228
-----------
FOOD & KINDRED PRODUCTS - 2.10%
2,650 ANHEUSER-BUSCH COMPANIES
INCORPORATED 197,922
</TABLE>
41
<PAGE>
VARIABLE TRUST PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000
--------------------------------------------------------------------------------
VARIABLE TRUST EQUITY VALUE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C>
FOOD & KINDRED PRODUCTS (continued)
9,700 PEPSICO INCORPORATED $ 431,044
628,966
-----------
FURNITURE & FIXTURES - 0.86%
5,000 JOHNSON CONTROLS INCORPORATED 256,563
-----------
GENERAL MERCHANDISE STORES - 0.68%
3,500 TARGET CORPORATION 203,000
-----------
HEALTH SERVICES - 1.07%
11,850 TENET HEALTHCARE CORPORATION 319,950
-----------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT - 7.02%
5,400 APPLE COMPUTER INCORPORATED+ 282,825
9,650 COMPAQ COMPUTER CORPORATION 246,678
2,400 HEWLETT-PACKARD COMPANY 299,700
6,250 IBM CORPORATION 684,766
2,625 MINNESOTA MINING AND
MANUFACTURING COMPANY 216,563
6,350 UNITED TECHNOLOGIES
CORPORATION 373,856
2,104,388
-----------
INSURANCE AGENTS, BROKERS & SERVICE - 1.12%
3,225 MARSH & MCLENNAN COS.
INCORPORATED 336,811
-----------
INSURANCE CARRIERS - 8.32%
9,212 AMERICAN INTERNATIONAL GROUP
INCORPORATED 1,082,410
12,350 AXA FINANCIAL INCORPORATED 419,900
4,400 CHUBB CORPORATION 270,600
1,900 CIGNA CORPORATION 177,650
9,750 HARTFORD FINANCIAL SERVICES
GROUP 545,391
2,495,951
-----------
MEASURING, ANALYZING & CONTROLLING INSTRUMENTS; PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS - 0.56%
1,912 GENERAL MOTORS CORPORATION -
CLASS H+ 167,761
-----------
MISCELLANEOUS MANUFACTURING INDUSTRIES - 1.81%
11,450 TYCO INTERNATIONAL LIMITED 542,444
-----------
MOTION PICTURES - 2.42%
12,600 AT&T CORPORATION -- LIBERTY
MEDIA CORPORATION+ 305,550
10,850 WALT DISNEY COMPANY 421,116
726,666
-----------
NONDEPOSITORY CREDIT INSTITUTIONS - 2.72%
3,000 FEDERAL HOME LOAN MORTGAGE
CORPORATION 121,500
2,550 FEDERAL NATIONAL MORTGAGE
ASSOCIATION 133,078
13,500 HOUSEHOLD INTERNATIONAL
INCORPORATED 561,094
815,672
-----------
</TABLE>
42
<PAGE>
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000 VARIABLE TRUST
--------------------------------------------------------------------------------
VARIABLE TRUST EQUITY VALUE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C>
OIL & GAS EXTRACTION - 3.51%
7,400 ANADARKO PETROLEUM CORPORATION $ 364,913
6,450 ENRON CORPORATION 416,025
5,100 TRANSOCEAN SEDCO FOREX
INCORPORATED+ 272,531
1,053,469
-----------
PAPER & ALLIED PRODUCTS - 2.22%
8,875 BOWATER INCORPORATED 391,609
4,750 KIMBERLY-CLARK CORPORATION 272,531
664,140
-----------
PETROLEUM REFINING & RELATED INDUSTRIES - 9.95%
3,400 CHEVRON CORPORATION 288,363
13,200 COASTAL CORPORATION 803,550
14,750 CONOCO INCORPORATED - CLASS B 362,297
19,477 EXXON MOBIL CORPORATION 1,528,944
$ 2,983,154
-----------
PRIMARY METAL INDUSTRIES - 0.42%
4,350 ALCOA INCORPORATED 126,150
-----------
PRINTING, PUBLISHING & ALLIED INDUSTRIES - 0.61%
2,650 VIACOM INCORPORATED --
CLASS A+ 181,194
-----------
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES - 2.83%
10,200 MORGAN STANLEY DEAN WITTER 849,150
-----------
STONE, CLAY, GLASS & CONCRETE PRODUCTS - 0.45%
2,350 SOUTHDOWN INCORPORATED 135,713
-----------
TECHNOLOGY - 1.56%
11,100 CYPRESS SEMICONDUCTOR
CORPORATION+ 468,975
-----------
TOBACCO PRODUCTS - 1.17%
13,150 PHILIP MORRIS COMPANIES
INCORPORATED 349,297
-----------
TRANSPORTATION EQUIPMENT - 3.15%
3,700 FORD MOTOR COMPANY 159,100
6,950 GENERAL DYNAMICS CORPORATION 363,138
2,313 GENERAL MOTORS CORPORATION 134,282
6,650 TRW INCORPORATED 288,444
944,964
-----------
WHOLESALE TRADE-DURABLE GOODS - 0.02%
484 VISTEON CORPORATION+ 5,874
-----------
28,078,128
TOTAL COMMON STOCK (COST $26,823,248)
-----------
</TABLE>
43
<PAGE>
VARIABLE TRUST PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000
--------------------------------------------------------------------------------
VARIABLE TRUST EQUITY VALUE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
SHORT-TERM INVESTMENTS - 6.34%
$ 608,000 GOLDMAN SACHS POOLED
REPURCHASE AGREEMENT - 102%
COLLATERALIZED BY U.S.
GOVERNMENT SECURITIES 6.57% 07/03/00 $ 608,000
1,294,000 J.P. MORGAN SECURITIES
INCORPORATED REPURCHASE
AGREEMENT - 102%
COLLATERALIZED BY U.S.
GOVERNMENT SECURITIES 6.58 07/03/00 1,294,000
1,902,000
TOTAL SHORT-TERM INVESTMENTS (COST
$1,902,000)
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(COST $28,725,248)* 99.98% $29,980,128
OTHER ASSETS AND LIABILITIES, NET 0.02 7,129
------- -----------
TOTAL NET ASSETS 100.00% $29,987,257
------- -----------
</TABLE>
+ NON-INCOME EARNING SECURITIES.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL STATEMENT
PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<CAPTION>
<S> <C>
GROSS UNREALIZED APPRECIATION $2,929,123
GROSS UNREALIZED DEPRECIATION (1,674,243)
----------
NET UNREALIZED APPRECIATION $1,254,880
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
44
<PAGE>
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000 VARIABLE TRUST
--------------------------------------------------------------------------------
VARIABLE TRUST GROWTH FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C>
COMMON STOCK - 97.54%
APPAREL & ACCESSORY STORES - 0.85%
8,500 GAP INCORPORATED $ 265,625
14,000 KOHL'S CORPORATION+ 778,750
1,044,375
------------
BUILDING MATERIALS, HARDWARE, GARDEN SUPPLY & MOBILE HOME DEALERS - 1.26%
22,950 HOME DEPOT INCORPORATED 1,146,066
9,750 LOWE'S COMPANY INCORPORATED 400,359
1,546,425
------------
BUSINESS SERVICES - 6.15%
22,472 AMERICA ONLINE INCORPORATED+ 1,185,398
16,400 INTERPUBLIC GROUP COMPANIES
INCORPORATED 705,200
31,100 ORACLE SYSTEMS CORPORATION+ 2,614,344
16,164 SUN MICROSYSTEMS INCORPORATED+ 1,469,914
14,000 VERITAS SOFTWARE CORPORATION+ 1,582,218
7,557,074
------------
CHEMICALS & ALLIED PRODUCTS - 11.20%
15,751 ABBOTT LABORATORIES 701,904
15,264 AMGEN INCORPORATED+ 1,072,296
15,000 CLOROX COMPANY 672,188
24,100 COLGATE-PALMOLIVE COMPANY 1,442,988
3,250 GENENTECH INCORPORATED+ 559,000
22,288 GILLETTE COMPANY 778,687
15,388 LILLY (ELI) & COMPANY 1,536,876
16,067 MERCK & COMPANY INCORPORATED 1,231,134
80,687 PFIZER INCORPORATED 3,872,975
14,000 PRAXAIR INCORPORATED 524,125
10,472 PROCTER & GAMBLE COMPANY 599,522
15,290 SCHERING-PLOUGH CORPORATION 772,145
13,763,840
------------
COMMUNICATIONS - 8.43%
24,000 360NETWORKS INCORPORATED+ 366,000
14,223 AT&T CORPORATION 449,802
20,800 AT&T WIRELESS GROUP+ 579,800
28,276 BELL ATLANTIC CORPORATION+ 1,436,774
12,000 CLEAR CHANNEL COMMUNICATIONS
INCORPORATED+ 900,000
24,398 GTE CORPORATION 1,518,775
8,400 NEXTEL COMMUNICATIONS
INCORPORATED+ 513,975
4,000 NEXTLINK COMMUNICATIONS
INCORPORATED+ 151,750
15,000 QWEST COMMUNICATIONS
INTERNATIONAL INCORPORATED+ 745,313
45,652 SBC COMMUNICATIONS
INCORPORATED 1,974,449
7,178 SPRINT CORPORATION (FON GROUP) 366,078
29,500 WORLDCOM INCORPORATED+ 1,353,313
10,356,029
------------
</TABLE>
45
<PAGE>
VARIABLE TRUST PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000
--------------------------------------------------------------------------------
VARIABLE TRUST GROWTH FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C>
COMPUTERS - 3.54%
54,323 MICROSOFT CORPORATION+ $ 4,345,840
------------
DOMESTIC DEPOSITORY INSTITUTIONS - 4.18%
37,371 CHASE MANHATTAN CORPORATION 1,721,402
51,507 CITIGROUP INCORPORATED 3,103,296
5,000 FIFTH THIRD BANCORP 316,250
5,140,948
------------
EATING & DRINKING PLACES - 0.50%
18,500 MCDONALD'S CORPORATION 609,344
------------
ELECTRIC, GAS & SANITARY SERVICES - 2.46%
46,800 AES CORPORATION+ 2,135,250
14,518 EDISON INTERNATIONAL 297,619
14,190 WILLIAMS COMPANIES
INCORPORATED 591,546
3,024,415
------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER
EQUIPMENT - 16.21%
2,000 BROADCOM CORPORATION+ 437,875
9,000 CELESTICA INCORPORATED+ 446,625
105,741 GENERAL ELECTRIC COMPANY 5,604,272
35,576 INTEL CORPORATION 4,756,067
33,443 LUCENT TECHNOLOGIES
INCORPORATED 1,981,498
9,550 NETWORK APPLIANCE
INCORPORATED+ 768,775
40,946 NORTEL NETWORKS CORPORATION 2,794,565
2,000 PMC-SIERRA INCORPORATED+ 355,375
9,000 SANMINA CORPORATION+ 769,500
29,154 TEXAS INSTRUMENTS INCORPORATED 2,002,515
19,917,067
------------
ENGINEERING, ACCOUNTING, RESEARCH, MANAGEMENT & RELATED SERVICES - 0.25%
6,500 HALLIBURTON COMPANY 306,719
------------
FOOD & KINDRED PRODUCTS - 2.77%
13,500 ANHEUSER-BUSCH INCORPORATED 1,008,281
28,260 COCA-COLA COMPANY 1,623,184
17,400 PEPSICO INCORPORATED 773,213
3,404,678
------------
GENERAL MERCHANDISE STORES - 3.80%
30,460 TARGET CORPORATION 1,766,680
50,352 WAL-MART STORES INCORPORATED 2,901,534
4,668,214
------------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT - 12.01%
18,000 APPLIED MATERIALS
INCORPORATED+ 1,631,250
99,510 CISCO SYSTEMS INCORPORATED+ 6,325,104
38,796 EMC CORPORATION+ 2,984,867
11,249 HEWLETT-PACKARD COMPANY 1,404,719
20,212 INTERNATIONAL BUSINESS
MACHINES CORPORATION 2,214,477
</TABLE>
46
<PAGE>
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000 VARIABLE TRUST
--------------------------------------------------------------------------------
VARIABLE TRUST GROWTH FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C>
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT (continued)
3,600 SYMBOL TECHNOLOGIES
INCORPORATED $ 194,400
14,754,817
------------
INSURANCE AGENTS, BROKERS & SERVICE - 0.43%
5,000 MARSH & MCLENNAN COMPANIES
INCORPORATED 522,188
------------
INSURANCE CARRIERS - 3.12%
25,564 AMERICAN INTERNATIONAL GROUP
INCORPORATED 3,003,770
15,000 AXA FINANCIAL INCORPORATED 510,000
9,500 ST. PAUL COMPANIES
INCORPORATED 324,188
3,837,958
------------
MEASURING, ANALYZING, & CONTROLLING INSTRUMENTS; PHOTOGRAPHIC, MEDICAL &
OPTICAL GOODS - 2.55%
19,167 BAXTER INTERNATIONAL
INCORPORATED 1,347,679
11,744 DANAHER CORPORATION 580,594
7,650 JDS UNIPHASE CORPORATION+ 917,044
5,862 MEDTRONIC INCORPORATED 292,001
3,137,318
------------
MISCELLANEOUS MANUFACTURING INDUSTRIES - 1.25%
32,300 TYCO INTERNATIONAL LIMITED 1,530,213
------------
MISCELLANEOUS RETAIL - 0.24%
8,000 BED BATH & BEYOND
INCORPORATED+ 290,000
------------
MOTION PICTURES - 1.49%
11,400 TIME WARNER INCORPORATED 866,400
24,900 WALT DISNEY COMPANY 966,431
1,832,831
------------
NONDEPOSITORY CREDIT INSTITUTIONS - 2.20%
26,169 FEDERAL NATIONAL MORTGAGE
ASSOCIATION 1,365,695
32,281 HOUSEHOLD INTERNATIONAL
INCORPORATED 1,341,679
2,707,374
------------
OIL & GAS EXTRACTION - 0.50%
5,600 SCHLUMBERGER LIMITED 417,900
3,761 TRANSOCEAN SEDCO FOREX
INCORPORATED+ 200,978
618,878
------------
PAPER & ALLIED PRODUCTS - 0.62%
16,000 INTERNATIONAL PAPER COMPANY 477,000
5,000 KIMBERLY-CLARK CORPORATION 286,875
763,875
------------
PETROLEUM REFINING & RELATED INDUSTRIES - 5.17%
9,700 COASTAL CORPORATION 590,488
10,245 CHEVRON CORPORATION 868,904
23,602 CONOCO INCORPORATED CLASS B 579,724
40,009 EXXON MOBIL CORPORATION 3,140,707
</TABLE>
47
<PAGE>
VARIABLE TRUST PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000
--------------------------------------------------------------------------------
VARIABLE TRUST GROWTH FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C>
PETROLEUM REFINING & RELATED INDUSTRIES (continued)
18,908 ROYAL DUTCH PETROLEUM COMPANY
ADR $ 1,164,023
6,343,846
------------
PRIMARY METAL INDUSTRIES - 0.90%
38,000 ALCOA INCORPORATED 1,102,000
------------
PRINTING, PUBLISHING & ALLIED INDUSTRIES - 0.45%
8,137 VIACOM INCORPORATED CLASS B+ 554,842
------------
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES - 1.44%
14,967 CHARLES SCHWAB CORPORATION 503,265
6,500 MERRILL LYNCH & COMPANY
INCORPORATED 747,500
6,204 MORGAN STANLEY DEAN WITTER &
COMPANY 516,483
1,767,248
------------
STONE, CLAY, GLASS & CONCRETE PRODUCTS - 0.44%
2,000 CORNING INCORPORATED 539,750
------------
TRANSPORTATION EQUIPMENT - 1.77%
44,078 HONEYWELL INTERNATIONAL
INCORPORATED 1,484,878
11,800 UNITED TECHNOLOGIES
CORPORATION 694,725
2,179,603
------------
WHOLESALE TRADE-DURABLE GOODS - 1.36%
16,373 JOHNSON & JOHNSON 1,667,999
------------
$119,835,708
TOTAL COMMON STOCK (COST $89,293,890)
------------
UNIT INVESTMENT TRUST - 1.01%
8,500 STANDARD AND POOR'S DEPOSITORY
RECEIPTS (COST $1,259,338) 1,234,891
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL INTEREST RATE MATURITY DATE
<C> <S> <C> <C> <C>
SHORT-TERM INVESTMENTS - 1.21%
$ 260,000 GOLDMAN SACHS REPURCHASE
AGREEMENT - 102%
COLLATERALIZED BY U.S.
GOVERNMENT SECURITIES 6.57% 07/03/00 260,000
1,222,000 J.P. MORGAN SECURITIES
REPURCHASE AGREEMENT - 102%
COLLATERALIZED BY U.S.
GOVERNMENT SECURITIES 6.58 07/03/00 1,222,000
1,482,000
TOTAL SHORT-TERM INSTRUMENTS (COST
$1,482,000)
-------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(COST $92,035,228)* 99.76% $ 122,552,599
OTHER ASSETS AND LIABILITIES, NET 0.24 300,653
------- -------------
TOTAL NET ASSETS 100.00% $ 122,853,252
------- -------------
</TABLE>
+ NON-INCOME EARNING SECURITIES.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL STATEMENT
PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<CAPTION>
<S> <C>
GROSS UNREALIZED APPRECIATION $34,780,581
GROSS UNREALIZED DEPRECIATION (4,263,210)
----------
NET UNREALIZED APPRECIATION $30,517,371
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
48
<PAGE>
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000 VARIABLE TRUST
--------------------------------------------------------------------------------
VARIABLE TRUST LARGE COMPANY GROWTH FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C>
COMMON STOCK - 97.92%
BUILDING MATERIALS, HARDWARE, GARDEN SUPPLY & MOBILE HOME DEALERS - 4.87%
10,600 FASTENAL COMPANY $ 536,625
79,300 HOME DEPOT INCORPORATED 3,960,044
4,496,669
------------
BUSINESS SERVICES - 13.02%
26,100 AMERICA ONLINE INCORPORATED+ 1,376,775
24,600 AUTOMATIC DATA PROCESSING
INCORPORATED 1,317,638
14,000 DST SYSTEMS INCORPORATED+ 1,065,750
46,900 FIRST DATA CORPORATION 2,327,413
33,700 FISERV INCORPORATED+ 1,457,525
92,400 IMS HEALTH INCORPORATED 1,663,200
26,300 ORACLE CORPORATION+ 2,210,843
19,000 SUNGARD DATA SYSTEMS
INCORPORATED+ 589,000
12,008,144
------------
CHEMICALS & ALLIED PRODUCTS - 6.01%
115,550 PFIZER INCORPORATED 5,546,400
------------
COMPUTERS - 5.21%
60,100 MICROSOFT CORPORATION+ 4,808,000
------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT - 16.32%
61,600 INTEL CORPORATION 8,235,150
74,700 NOKIA CORPORATION ADR 3,730,331
154,900 TELEFONAKTIEBOLAGET LM
ERICSSON SERIES B ADR 3,098,000
15,063,481
------------
ENGINEERING, ACCOUNTING, RESEARCH, MANAGEMENT & RELATED SERVICES - 3.07%
67,550 PAYCHEX INCORPORATED 2,837,100
------------
FINANCIAL - 1.20%
10,400 STATE STREET CORPORATION 1,103,050
------------
FOOD & KINDRED PRODUCTS - 1.43%
23,000 COCA-COLA COMPANY 1,321,063
------------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT - 16.92%
114,300 CISCO SYSTEMS INCORPORATED+ 7,265,193
50,600 EMC CORPORATION+ 3,893,038
106,450 SOLECTRON CORPORATION+ 4,457,594
15,615,825
------------
INSURANCE CARRIERS - 4.61%
36,250 AMERICAN INTERNATIONAL GROUP
INCORPORATED 4,259,375
------------
MEASURING, ANALYZING, & CONTROLLING INSTRUMENTS; PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS - 5.55%
6,700 JDS UNIPHASE CORPORATION+ 803,162
86,775 MEDTRONIC INCORPORATED 4,322,480
5,125,642
------------
</TABLE>
49
<PAGE>
VARIABLE TRUST PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000
--------------------------------------------------------------------------------
VARIABLE TRUST LARGE COMPANY GROWTH FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C>
MISCELLANEOUS RETAIL - 2.85%
38,400 COSTCO WHOLESALE CORPORATION+ $ 1,267,200
88,700 STAPLES INCORPORATED+ 1,363,763
2,630,963
------------
OIL & GAS EXTRACTION - 0.75%
9,300 SCHLUMBERGER LIMITED 694,013
------------
PERSONAL SERVICES - 1.63%
41,100 CINTAS CORPORATION 1,507,856
------------
PHARMACEUTICAL PREPARATIONS - 1.89%
22,800 MERCK & COMPANY INCORPORATED 1,747,050
------------
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES - 11.30%
134,050 CHARLES SCHWAB CORPORATION 4,507,431
43,175 GOLDMAN SACHS GROUP
INCORPORATED 4,096,228
42,800 T. ROWE PRICE 1,819,000
10,422,659
------------
WHOLESALE TRADE-NONDURABLE GOODS - 1.29%
16,100 CARDINAL HEALTH INCORPORATED 1,191,400
------------
90,378,690
TOTAL COMMON STOCK (COST $74,910,587)
------------
<CAPTION>
PRINCIPAL INTEREST RATE MATURITY DATE
<C> <S> <C> <C> <C>
SHORT-TERM INVESTMENTS - 4.88%
$4,503,285 BEAR STEARNS & COMPANY
INCORPORATED REPURCHASE
AGREEMENT - 102%
COLLATERALIZED BY U.S.
GOVERNMENT SECURITIES (COST
$4,503,285) 6.86% 7/03/00 4,503,285
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(COST $79,413,872)* 102.80% $ 94,881,975
OTHER ASSETS AND LIABILITIES, NET (2.80) (2,584,959)
------- ------------
TOTAL NET ASSETS 100.00% $ 92,297,016
------- ------------
</TABLE>
+ NON-INCOME EARNING SECURITIES.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL STATEMENT
PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<CAPTION>
<S> <C>
GROSS UNREALIZED APPRECIATION $18,815,085
GROSS UNREALIZED DEPRECIATION (3,346,982)
----------
NET UNREALIZED APPRECIATION $15,468,103
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
50
<PAGE>
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000 VARIABLE TRUST
--------------------------------------------------------------------------------
VARIABLE TRUST MONEY MARKET FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
CERTIFICATES OF DEPOSIT - 5.74%
$1,200,000 ABN AMRO BANK CHICAGO 6.72% 02/12/01 $ 1,199,791
500,000 CANADIAN IMPERIAL BANK OF
COMMERCE 6.57 01/29/01 499,892
500,000 U.S. BANK 6.59 01/16/01 500,000
200,000 UNION BANK OF SWITZERLAND 6.22 07/18/00 199,937
2,399,620
TOTAL CERTIFICATES OF DEPOSIT (COST
$2,399,620)
-----------
COMMERCIAL PAPER - 56.58%
500,000 ACE OVERSEAS CORPORATION 6.99{::} 12/04/00 485,561
1,000,000 AUSTRALIA & NEW ZEALAND
INCORPORATED 6.28{::} 09/07/00 988,852
700,000 BANK OF AMERICA CORPORATION 6.47{::} 08/24/00 693,256
750,000 BANK OF AMERICA CORPORATION 6.79{::} 10/12/00 736,829
1,600,000 CITICORP 6.59{::} 07/07/00 1,598,836
1,500,000 COMPASS SECURITIZATION 6.70{::} 08/08/00 1,490,115
1,600,000 CONDUIT ASSET BACKED
SECURITIES LIMITED 6.64{::} 07/17/00 1,595,890
1,000,000 HALOGEN CAPITAL CORPORATION
LIMITED LIABILITY CORPORATION 6.65{::} 07/17/00 997,426
383,000 INTERNATIONAL SECURITIZATION
CORPORATION 6.61{::} 07/10/00 382,511
1,500,000 K2 (USA) LIMITED LIABILITY
CORPORATION 6.94{::} 09/25/00 1,476,270
1,600,000 LEXINGTON PARKER CAPITAL
CORPORATION 6.59{::} 07/06/00 1,599,127
500,000 MOAT FUNDING LIMITED LIABILITY
CORPORATION 6.93{::} 10/11/00 491,264
400,000 MOAT FUNDING LIMITED LIABILITY
CORPORATION 6.94{::} 12/04/00 388,502
500,000 MOAT FUNDING LIMITED LIABILITY
CORPORATION 6.95{::} 12/13/00 484,833
300,000 MOAT FUNDING LIMITED LIABILITY
CORPORATION 6.49{::} 12/14/00 290,844
1,500,000 MONT BLANC CAPITAL CORPORATION 6.70{::} 08/04/00 1,491,213
1,200,000 NATIONAL RURAL UTILITIES
CORPORATION 6.28{::} 09/22/00 1,183,585
1,600,000 NEPTUNE FUNDING CORPORATION 6.61{::} 07/07/00 1,598,830
1,600,000 PRUDENTIAL FUNDING CORPORATION 6.58{::} 07/10/00 1,597,965
900,000 SALOMON SMITH BARNEY HOLDINGS 6.78{::} 08/17/00 892,508
1,600,000 SYDNEY CAPITAL CORPORATION 6.68{::} 08/03/00 1,590,893
1,600,000 THAMES ASSET GLOBAL SECURITIES 6.66{::} 07/18/00 1,595,587
23,650,697
TOTAL COMMERCIAL PAPER (COST $23,650,697)
-----------
CORPORATE BONDS & NOTES - 27.03%
1,500,000 BEAR STEARNS COMPANY
INCORPORATED+ 6.73 03/29/01 1,500,000
1,000,000 BETA FINANCE INCORPORATED 6.15 10/06/00 1,000,000
500,000 BETA FINANCE INCORPORATED 6.82 02/15/01 500,000
900,000 BRANCH BANKING & TRUST 7.05 05/07/01 897,188
1,500,000 COMERICA BANK+ 6.59 01/12/01 1,499,688
500,000 COMMERZBANK NEW YORK 6.77 02/28/01 499,905
1,500,000 DORADA FINANCE INCORPORATED 6.77 03/15/01 1,500,000
400,000 FIRST USA BANK 5.99 09/21/00 399,974
1,500,000 J.P. MORGAN & COMPANY
INCORPORATED+ 6.64 03/16/01 1,500,000
1,500,000 MORGAN STANLEY DEAN WITTER+ 6.63 03/16/01 1,500,000
500,000 SALOMON SMITH BARNEY 6.70 07/05/00 500,018
11,296,773
TOTAL CORPORATE BONDS & NOTES (COST
$11,296,773)
-----------
REPURCHASE AGREEMENTS - 2.39%
1,000,000 GOLDMAN SACHS & COMPANY --
102% COLLATERALIZED BY U.S.
GOVERNMENT SECURITIES (COST
$1,000,000) 7.05 07/03/00 1,000,000
-----------
</TABLE>
51
<PAGE>
VARIABLE TRUST PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000
--------------------------------------------------------------------------------
VARIABLE TRUST MONEY MARKET FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
TIME DEPOSITS - 7.86%
$1,783,231 ALLIED IRISH BANK PLC 7.00% 07/03/00 $ 1,783,231
1,500,000 BANQUE BRUXELLES LAMBERT
LONDON BRANCH 6.84 07/05/00 1,500,000
3,283,231
TOTAL TIME DEPOSITS (COST $3,283,231)
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(COST $41,630,321)* 99.60% $41,630,321
OTHER ASSETS AND LIABILITIES, NET 0.40 165,550
------- -----------
TOTAL NET ASSETS 100.00% $41,795,871
------- -----------
</TABLE>
+ VARIABLE RATE SECURITIES.
{::} YIELD TO MATURITY
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL STATEMENT
PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
52
<PAGE>
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000 VARIABLE TRUST
--------------------------------------------------------------------------------
VARIABLE TRUST SMALL CAP GROWTH FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C>
COMMON STOCK - 96.38%
BUSINESS SERVICES - 27.68%
8,850 ACTIVE SOFTWARE INCORPORATED+ $ 687,534
6,818 ADMINISTAFF INCORPORATED+ 432,943
6,711 AGILE SOFTWARE CORPORATION+ 474,384
8,559 ALTEON WEBSYSTEMS
INCORPORATED+ 856,435
8,300 APPNET INCORPORATED+ 298,800
7,911 ART TECHNOLOGY GROUP
INCORPORATED+ 798,516
950 BREAKAWAY SOLUTIONS
INCORPORATED+ 25,650
4,125 CACHEFLOW INCORPORATED+ 253,945
6,800 CLICK COMMERCE INCORPORATED+ 153,850
3,350 DIGITAL ISLAND INCORPORATED+ 162,894
1,441 E.PIPHANY INCORPORATED+ 154,457
19,225 EFUNDS CORPORATION+ 223,491
8,323 ENTRUST TECHNOLOGIES
INCORPORATED+ 688,728
10,007 GETTY IMAGES INCORPORATED+ 370,884
300 INFORTE CORPORATION+ 10,800
4,316 ISS GROUP INCORPORATED+ 426,138
850 MANUGISTICS GROUP
INCORPORATED+ 39,738
10,156 MATRIXONE INCORPORATED+ 412,587
26 MERCATOR SOFTWARE
INCORPORATED+ 1,788
4,375 MERCURY INTERACTIVE
CORPORATION+ 423,281
8,897 METASOLV SOFTWARE
INCORPORATED+ 391,468
3,362 MICROMUSE INCORPORATED+ 556,358
11,381 NET PERCEPTIONS INCORPORATED+ 180,673
209 NET.GENESIS CORPORATION+ 3,775
5,648 NETIQ CORPORATION+ 336,762
1,000 PREDICTIVE SYSTEMS
INCORPORATED+ 35,937
200 STORAGENETWORKS INCORPORATED+ 18,050
12,893 TELETECH HOLDINGS
INCORPORATED+ 400,489
13,290 VERTICALNET INCORPORATED+ 490,899
11,442 VIANT CORPORATION+ 338,970
15,760 VIGNETTE CORPORATION+ 819,766
10,469,990
-----------
CHEMICALS & ALLIED PRODUCTS - 9.70%
2,175 ABGENIX INCORPORATED+ 260,694
3,604 ALKERMES INCORPORATED+ 169,839
7,549 ALPHARMA INCORPORATED 469,925
6,801 CAMBREX CORPORATION 306,045
4,754 CUBIST PHARMACEUTICALS
INCORPORATED+ 234,135
16,788 FIRST HORIZON PHARMACEUTICAL
CORPORATION+ 163,683
2,080 GILEAD SCIENCES INCORPORATED+ 147,940
2,465 INCYTE GENOMICS INCORPORATED+ 202,592
8,706 JONES PHARMA INCORPORATED 347,696
15,057 KING PHARMACEUTICALS
INCORPORATED+ 660,626
8,446 MEDICIS PHARMACEUTICAL
CORPORATION+ 481,422
2,589 PHARMACYCLICS INCORPORATED+ 157,929
</TABLE>
53
<PAGE>
VARIABLE TRUST PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000
--------------------------------------------------------------------------------
VARIABLE TRUST SMALL CAP GROWTH FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C>
CHEMICALS & ALLIED PRODUCTS (continued)
1,288 SHIRE PHARMACEUTICALS GROUP
PLC+ $ 66,815
3,669,341
-----------
COMMUNICATIONS - 8.53%
2,979 AIRGATE PCS INCORPORATED+ 156,584
8,035 ALLIED RISER COMMUNICATIONS
CORPORATION+ 113,494
8,097 DOBSON COMMUNICATIONS
CORPORATION+ 155,867
4,000 DSP GROUP INCORPORATED+ 224,000
9,316 ENTERCOM COMMUNICATIONS
CORPORATION+ 454,155
14,290 GLOBIX CORPORATION+ 418,876
4,859 ILLUMINET HOLDINGS
INCORPORATED+ 247,202
3,868 INTERMEDIA COMMUNICATIONS INC+ 115,073
3,496 ITXC CORPORATION+ 123,780
5,520 MASTEC INCORPORATED+ 210,795
3,448 MGC COMMUNICATIONS
INCORPORATED+ 206,681
5,945 SBA COMMUNICATIONS
CORPORATION+ 308,768
11,164 TRUE NORTH COMMUNICATIONS
INCORPORATED 491,216
3,226,491
-----------
DEPOSITORY INSTITUTIONS - 2.20%
4,750 INVESTORS FINANCIAL SERVICES
CORPORATION 188,516
15,115 SILICON VALLEY BANCSHARES+ 644,277
832,793
-----------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT - 15.21%
4,524 ADVANCED FIBRE COMMUNICATIONS
INCORPORATED+ 204,994
5,601 ANCOR COMMUNICATIONS
INCORPORATED+ 200,323
4,874 BURR-BROWN CORPORATION+ 422,515
1,948 CAPSTONE TURBINE CORPORATION+ 87,782
9,625 CTC COMMUNICATIONS GROUP
INCORPORATED+ 346,500
7,731 CYPRESS SEMICONDUCTOR
CORPORATION+ 326,635
25 DDI CORPORATION+ 713
4,291 DIGITAL LIGHTWAVE
INCORPORATED+ 431,245
5,660 DIGITAL MICROWAVE CORPORATION+ 215,787
15,567 INTERNATIONAL FIBERCOM
INCORPORATED+ 396,959
579 MANUFACTURERS SERVICES
LIMITED+ 11,906
14,090 MICREL INCORPORATED+ 612,034
4,307 NETRO CORPORATION+ 247,114
8,224 PLX TECHNOLOGY INCORPORATED+ 341,296
3,711 SEMTECH CORPORATION+ 283,834
2,350 STRATOS LIGHTWAVE
INCORPORATED+ 65,506
2,567 TECHNITROL INCORPORATED 248,678
6,527 TERAYON COMMUNICATION SYSTEMS
INCORPORATED+ 419,258
2,102 TRANSWITCH CORPORATION+ 162,248
10,546 TUT SYSTEMS INCORPORATED+ 605,077
7,612 VIASYSTEMS GROUP INCORPORATED+ 123,219
5,753,623
-----------
</TABLE>
54
<PAGE>
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000 VARIABLE TRUST
--------------------------------------------------------------------------------
VARIABLE TRUST SMALL CAP GROWTH FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C>
ENGINEERING, ACCOUNTING, RESEARCH, MANAGEMENT & RELATED SERVICES - 5.01%
1,508 AFFYMETRIX INCORPORATED+ $ 249,008
4,555 CEPHALON INCORPORATED+ 272,731
10,051 DIAMOND TECHNOLOGY PARTNERS
INCORPORATED+ 884,488
4,366 MILLENNIUM PHARMACEUTICALS
INCORPORATED+ 488,446
1,894,673
-----------
GENERAL MERCHANDISE STORES - 1.80%
11,162 99 CENTS ONLY STORES+ 445,085
7,113 BJ'S WHOLESALE CLUB
INCORPORATED+ 234,729
679,814
-----------
HEALTH SERVICES - 1.25%
3,544 HUMAN GENOME SCIENCE
INCORPORATED+ 472,681
-----------
HOME FURNITURE, FURNISHINGS & EQUIPMENT STORES - 0.42%
5,842 LINENS 'N THINGS INCORPORATED+ 158,464
-----------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT - 4.44%
2,500 ADVANCED DIGITAL INFORMATION
CORPORATED+ 39,844
7,975 ASYST TECHNOLOGIES
INCORPORATED+ 273,143
7,305 INFOCUS CORPORATION+ 235,130
11,528 MEDIA 100 INCORPORATED+ 296,846
4,694 PRI AUTOMATION INCORPORATED+ 306,943
8,632 SANDISK CORPORATION+ 528,171
1,680,077
-----------
INSURANCE AGENTS, BROKERS & SERVICE - 0.93%
8,338 ARTHUR J. GALLAGHER &
CORPORATION 350,196
-----------
INSURANCE CARRIERS - 0.59%
9,425 OXFORD HEALTH PLANS
INCORPORATED+ 224,433
-----------
MEASURING, ANALYZING & CONTROLLING INSTRUMENTS; PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS - 2.63%
625 ANAREN MICROWAVE INCORPORATED+ 82,021
3,591 ASPECT MEDICAL SYSTEMS
INCORPORATED+ 96,957
2,251 CERUS CORPORATION+ 115,223
750 CLICKSOFTWARE TECHNOLOGIES
LIMITED+ 5,250
200 EXFO ELECTRO-OPTICAL
ENGINEERING INCORPORATED+ 8,775
992 KEITHLEY INSTRUMENTS
INCORPORATED 86,428
4,754 NEWPORT CORPORATION 510,461
972 ZYGO CORPORATION+ 88,270
993,385
-----------
MISCELLANEOUS MANUFACTURING INDUSTRIES - 0.69%
12,095 YANKEE CANDLE COMPANY
INCORPORATED+ 261,554
-----------
MISCELLANEOUS RETAIL - 1.70%
8,446 MICHAELS STORES INCORPORATED+ 386,932
13,054 PETCO ANIMAL SUPPLIES
INCORPORATED+ 256,185
643,117
-----------
</TABLE>
55
<PAGE>
VARIABLE TRUST PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000
--------------------------------------------------------------------------------
VARIABLE TRUST SMALL CAP GROWTH FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C>
NONDEPOSITORY CREDIT INSTITUTIONS - 2.34%
12,487 AMERICREDIT CORPORATION+ $ 212,279
8,385 COMPUCREDIT CORPORATION+ 251,550
16,780 METRIS COMPANIES INCORPORATED 421,598
885,427
-----------
OIL & GAS EXTRACTION - 4.01%
6,707 HELMERICH & PAYNE INCORPORATED 250,674
14,614 LOUIS DREYFUS NATURAL GAS
CORPORATION+ 457,601
13,354 MARINE DRILLING CORPORATION
INCORPORATED+ 373,912
5,692 NEWFIELD EXPLORATION
CORPORATION+ 222,700
3,183 OSCA INCORPORATED+ 53,713
975 SYNTROLEUM CORPORATION+ 16,697
3,528 UTI ENERGY CORPORATION+ 141,561
1,516,858
-----------
PETROLEUM REFINING & RELATED INDUSTRIES - 1.01%
12,065 VALERO ENERGY CORPORATION 383,064
-----------
PRIMARY METAL INDUSTRIES - 1.25%
11,552 COMMSCOPE INCORPORATED+ 473,632
-----------
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES - 0.78%
7,377 SEI INVESTMENTS CORPORATION 293,697
-----------
TRANSPORTATION SERVICES - 1.11%
8,507 C.H. ROBINSON WORLDWIDE
INCORPORATED 421,097
-----------
WHOLESALE TRADE-DURABLE GOODS - 2.50%
10,081 ACT MANUFACTURING
INCORPORATED+ 468,136
5,186 INSIGHT ENTERPRISES
INCORPORATED+ 307,595
5,749 KENT ELECTRONICS CORPORATION+ 171,392
947,123
-----------
WHOLESALE TRADE-NONDURABLE GOODS - 0.60%
6,876 NATIONAL-OILWELL INCORPORATED+ 226,049
-----------
36,457,579
TOTAL COMMON STOCK (COST $31,920,006)
-----------
</TABLE>
56
<PAGE>
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000 VARIABLE TRUST
--------------------------------------------------------------------------------
VARIABLE TRUST SMALL CAP GROWTH FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
REPURCHASE AGREEMENTS - 6.84%
2,588,572 BEAR STEARNS AND COMPANY
REPURCHASE AGREEMENT -- 102%
COLLATERALIZED BY U.S.
GOVERNMENT SECURITIES (COST
$2,588,572) 6.86% 07/03/00 $ 2,588,572
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(COST $34,508,578)* 103.22% $39,046,151
OTHER ASSETS AND LIABILITIES, NET (3.22) (1,218,641)
------- -----------
TOTAL NET ASSETS 100.00% $37,827,510
------- -----------
</TABLE>
+ NON-INCOME EARNING SECURITIES.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL STATEMENT
PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<CAPTION>
<S> <C>
GROSS UNREALIZED APPRECIATION $6,457,091
GROSS UNREALIZED DEPRECIATION (1,919,518)
----------
NET UNREALIZED APPRECIATION $4,537,573
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
57
<PAGE>
VARIABLE TRUST
STATEMENTS OF ASSETS AND LIABILITIES -- JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSET ALLOCATION CORPORATE BOND
FUND FUND
<S> <C> <C>
---------------------------------------------------------------------
ASSETS
INVESTMENTS:
IN SECURITIES, AT MARKET VALUE
(SEE COST BELOW).............. $ 259,206,886 $ 70,074,409
CASH............................. 5,798 5,274
RECEIVABLE FOR DIVIDENDS,
INTEREST AND OTHER
RECEIVABLES.................... 1,791,117 1,245,741
RECEIVABLE FOR INVESTMENTS
SOLD........................... 15,456 0
RECEIVABLE FOR FUND SHARES
ISSUED......................... 85,300 29,856
RECEIVABLE FROM INVESTMENT
ADVISOR AND AFFILIATES......... 0 0
VARIATION MARGIN ON FUTURES
CONTRACTS...................... 42,925 0
PREPAID EXPENSES AND OTHER
ASSETS......................... 0 0
---------------- --------------
TOTAL ASSETS....................... 261,147,482 71,355,280
---------------- --------------
LIABILITIES
PAYABLE FOR INVESTMENTS
PURCHASED...................... 132,098 0
DIVIDENDS PAYABLE................ 0 0
PAYABLE FOR FUND SHARES
REDEEMED....................... 741 796,698
PAYABLE TO INVESTMENT ADVISOR AND
AFFILIATES..................... 130,502 16,749
PAYABLE TO OTHER RELATED
PARTIES........................ 119,722 36,205
DUE TO CUSTODIAN................. 0 0
ACCRUED EXPENSES AND OTHER
LIABILITIES.................... 29,219 59,926
UNREALIZED DEPRECIATION ON
FORWARD FOREIGN CURRENCY
CONTRACTS...................... 0 43,302
---------------- --------------
TOTAL LIABILITIES.................. 412,282 952,880
---------------- --------------
TOTAL NET ASSETS................... $ 260,735,200 $ 70,402,400
---------------- --------------
NET ASSETS CONSIST OF:
PAID-IN CAPITAL.................. $ 224,337,114 $ 72,167,042
UNDISTRIBUTED (OVERDISTRIBUTED)
NET INVESTMENT INCOME.......... 85,188 18,058
UNDISTRIBUTED NET REALIZED GAIN
(LOSS) ON INVESTMENTS.......... 11,258,633 (1,222,307)
NET UNREALIZED APPRECIATION
(DEPRECIATION) OF
INVESTMENTS.................... 25,181,340 (517,218)
NET UNREALIZED APPRECIATION
(DEPRECIATION) OF FOREIGN
CURRENCY....................... 0 (43,175)
NET UNREALIZED APPRECIATION
(DEPRECIATION) OF FUTURES
CONTRACTS...................... (127,075) 0
---------------- --------------
TOTAL NET ASSETS................... $ 260,735,200 $ 70,402,400
---------------- --------------
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE
NET ASSETS......................... $ 260,735,200 $ 70,402,400
SHARES OUTSTANDING................. 17,586,315 7,221,067
NET ASSET VALUE AND OFFERING
PRICE............................ $ 14.83 $ 9.75
---------------- --------------
INVESTMENTS AT COST................ $ 234,025,546 $ 70,591,627
---------------- --------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
58
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES -- JUNE 30, 2000 (UNAUDITED)
VARIABLE TRUST
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY INCOME EQUITY VALUE LARGE COMPANY MONEY MARKET SMALL CAP
FUND FUND GROWTH FUND GROWTH FUND FUND GROWTH FUND
<S> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------------------
ASSETS
INVESTMENTS:
IN SECURITIES, AT MARKET VALUE
(SEE COST BELOW).............. $ 107,211,022 $ 29,980,128 $122,552,599 $ 94,881,975 $ 41,630,321 $39,046,151
CASH............................. 0 3,812 3,882 0 0 0
RECEIVABLE FOR DIVIDENDS,
INTEREST AND OTHER
RECEIVABLES.................... 220,219 26,378 48,608 24,646 240,900 6,149
RECEIVABLE FOR INVESTMENTS
SOLD........................... 0 0 1,622,087 0 0 1,164,738
RECEIVABLE FOR FUND SHARES
ISSUED......................... 64,712 45,961 7,545 201,102 0 24,665
RECEIVABLE FROM INVESTMENT
ADVISOR AND AFFILIATES......... 0 0 0 0 0 8,942
VARIATION MARGIN ON FUTURES
CONTRACTS...................... 0 0 0 0 0 0
PREPAID EXPENSES AND OTHER
ASSETS......................... 371 0 0 0 0 0
------------- ------------ ----------- ------------- ------------ -----------
TOTAL ASSETS....................... 107,496,324 30,056,279 124,234,721 95,107,723 41,871,221 40,250,645
------------- ------------ ----------- ------------- ------------ -----------
LIABILITIES
PAYABLE FOR INVESTMENTS
PURCHASED...................... 0 0 532,855 2,644,634 0 2,168,764
DIVIDENDS PAYABLE................ 0 0 0 0 13,567 0
PAYABLE FOR FUND SHARES
REDEEMED....................... 23,657 78 691,610 14,621 0 47,503
PAYABLE TO INVESTMENT ADVISOR AND
AFFILIATES..................... 52,598 4,139 53,043 22,490 18,882 0
PAYABLE TO OTHER RELATED
PARTIES........................ 32,017 28,022 58,531 87,327 16,762 84,276
DUE TO CUSTODIAN................. 18 0 0 0 0 0
ACCRUED EXPENSES AND OTHER
LIABILITIES.................... 10,716 36,783 45,430 41,635 26,139 122,592
UNREALIZED DEPRECIATION ON
FORWARD FOREIGN CURRENCY
CONTRACTS...................... 0 0 0 0 0 0
------------- ------------ ----------- ------------- ------------ -----------
TOTAL LIABILITIES.................. 119,006 69,022 1,381,469 2,810,707 75,350 2,423,135
------------- ------------ ----------- ------------- ------------ -----------
TOTAL NET ASSETS................... $ 107,377,318 $ 29,987,257 $122,853,252 $ 92,297,016 $ 41,795,871 $37,827,510
------------- ------------ ----------- ------------- ------------ -----------
NET ASSETS CONSIST OF:
PAID-IN CAPITAL.................. $ 94,228,060 $ 31,525,545 $79,369,497 $ 77,086,745 $ 41,796,262 $28,164,848
UNDISTRIBUTED (OVERDISTRIBUTED)
NET INVESTMENT INCOME.......... 29,231 4,519 1,712 (142,145) 0 (99,320)
UNDISTRIBUTED NET REALIZED GAIN
(LOSS) ON INVESTMENTS.......... 5,769,366 (2,797,687) 12,964,672 (115,687) (391) 5,224,409
NET UNREALIZED APPRECIATION
(DEPRECIATION) OF
INVESTMENTS.................... 7,350,661 1,254,880 30,517,371 15,468,103 0 4,537,573
NET UNREALIZED APPRECIATION
(DEPRECIATION) OF FOREIGN
CURRENCY....................... 0 0 0 0 0 0
NET UNREALIZED APPRECIATION
(DEPRECIATION) OF FUTURES
CONTRACTS...................... 0 0 0 0 0 0
------------- ------------ ----------- ------------- ------------ -----------
TOTAL NET ASSETS................... $ 107,377,318 $ 29,987,257 $122,853,252 $ 92,297,016 $ 41,795,871 $37,827,510
------------- ------------ ----------- ------------- ------------ -----------
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE
NET ASSETS......................... $ 107,377,318 $ 29,987,257 $122,853,252 $ 92,297,016 $ 41,795,871 $37,827,510
SHARES OUTSTANDING................. 6,617,968 3,342,859 5,106,583 7,027,261 41,796,296 1,933,537
NET ASSET VALUE AND OFFERING
PRICE............................ $ 16.23 $ 8.97 $ 24.06 $ 13.13 $ 1.00 $ 19.56
------------- ------------ ----------- ------------- ------------ -----------
INVESTMENTS AT COST................ $ 99,860,361 $ 28,725,248 $92,035,228 $ 79,413,872 $ 41,630,321 $34,508,578
------------- ------------ ----------- ------------- ------------ -----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
59
<PAGE>
VARIABLE TRUST
STATEMENTS OF OPERATIONS -- FOR THE SIX MONTHS ENDED JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSET ALLOCATION FUND CORPORATE BOND FUND
<S> <C> <C>
---------------------------------------------------------------------
INVESTMENT INCOME
DIVIDENDS.............. $ 824,810 $ 0
INTEREST............... 3,349,490 2,656,121
--------------------- -------------------
TOTAL INVESTMENT
INCOME................. 4,174,300 2,656,121
--------------------- -------------------
EXPENSES
ADVISORY FEES.......... 681,939 158,779
ADMINISTRATION FEES.... 185,983 52,926
PORTFOLIO ACCOUNTING
FEES................. 42,156 34,579
CUSTODY................ 0 7,057
TRANSFER AGENT......... 114,070 63,829
DISTRIBUTION FEES...... 309,972 88,210
LEGAL AND AUDIT FEES... 39,358 21,253
REGISTRATION FEES...... 1,831 0
DIRECTORS' FEES........ 2,809 2,809
SHAREHOLDER REPORTS.... 7,157 1,664
OTHER.................. 10,818 9,535
--------------------- -------------------
TOTAL EXPENSES........... 1,396,093 440,641
--------------------- -------------------
LESS:
WAIVED FEES AND
REIMBURSED
EXPENSES............. (156,226) (123,107)
NET EXPENSES........... 1,239,867 317,534
--------------------- -------------------
NET INVESTMENT INCOME
(LOSS)................. 2,934,433 2,338,587
--------------------- -------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
---------------------------------------------------------------------
NET REALIZED GAIN (LOSS)
FROM:
SECURITIES............. 4,004,597 (1,220,178)
FOREIGN CURRENCY....... 0 67,423
FINANCIAL FUTURES
CONTRACTS............ 43,748 0
--------------------- -------------------
NET REALIZED GAIN (LOSS)
FROM INVESTMENTS....... 4,048,345 (1,152,755)
--------------------- -------------------
NET CHANGE IN UNREALIZED
APPRECIATION
(DEPRECIATION) OF:
SECURITIES............. 3,101,674 661,946
FOREIGN CURRENCY....... 0 (47,633)
FINANCIAL FUTURES
CONTRACTS............ (199,200) 0
NET CHANGE IN UNREALIZED
APPRECIATION
(DEPRECIATION) OF
INVESTMENTS............ 2,902,474 614,313
--------------------- -------------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS......... 6,950,819 (538,442)
--------------------- -------------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS........ $ 9,885,252 $ 1,800,145
--------------------- -------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
60
<PAGE>
STATEMENTS OF OPERATIONS -- FOR THE SIX MONTHS ENDED JUNE 30, 2000 (UNAUDITED)
VARIABLE TRUST
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LARGE COMPANY SMALL CAP
EQUITY INCOME FUND EQUITY VALUE FUND GROWTH FUND GROWTH FUND MONEY MARKET FUND GROWTH FUND
<S> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
DIVIDENDS.............. $ 1,105,481 $ 192,124 $ 491,590 $ 122,933 $ 0 $ 17,583
INTEREST............... 45,864 58,239 121,970 107,982 1,229,041 69,586
------------------ ----------------- ------------- ------------- ----------------- --------------
TOTAL INVESTMENT
INCOME................. 1,151,345 250,363 613,560 230,915 1,229,041 87,169
------------------ ----------------- ------------- ------------- ----------------- --------------
EXPENSES
ADVISORY FEES.......... 302,728 75,975 336,258 205,326 78,839 116,777
ADMINISTRATION FEES.... 82,562 20,720 91,706 55,998 29,564 23,356
PORTFOLIO ACCOUNTING
FEES................. 30,823 37,987 33,626 58,985 37,054 69,288
CUSTODY................ 11,008 2,763 12,228 7,466 3,942 3,114
TRANSFER AGENT......... 53,941 23,483 89,261 68,318 13,797 47,645
DISTRIBUTION FEES...... 137,604 34,534 152,844 93,330 0 38,926
LEGAL AND AUDIT FEES... 12,434 12,082 26,225 15,230 9,804 18,066
REGISTRATION FEES...... 0 2,506 584 0 224 0
DIRECTORS' FEES........ 2,809 2,809 2,809 2,809 2,809 2,809
SHAREHOLDER REPORTS.... 4,925 1,461 3,345 9,867 643 10,080
OTHER.................. 8,311 2,026 4,190 16,632 324 44,984
------------------ ----------------- ------------- ------------- ----------------- --------------
TOTAL EXPENSES........... 647,145 216,346 753,076 533,961 177,000 375,045
------------------ ----------------- ------------- ------------- ----------------- --------------
LESS:
WAIVED FEES AND
REIMBURSED
EXPENSES............. (95,772) (78,047) (141,228) (160,901) (9,461) (188,556)
NET EXPENSES........... 551,373 138,299 611,848 373,060 167,539 186,489
------------------ ----------------- ------------- ------------- ----------------- --------------
NET INVESTMENT INCOME
(LOSS)................. 599,972 112,064 1,712 (142,145) 1,061,502 (99,320)
------------------ ----------------- ------------- ------------- ----------------- --------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
---------------------------------------------------------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS)
FROM:
SECURITIES............. 3,897,947 (1,164,109) 2,399,961 (32,264) (391) 4,248,235
FOREIGN CURRENCY....... 0 0 0 0 0 0
FINANCIAL FUTURES
CONTRACTS............ 0 0 0 0 0 0
------------------ ----------------- ------------- ------------- ----------------- --------------
NET REALIZED GAIN (LOSS)
FROM INVESTMENTS....... 3,897,947 (1,164,109) 2,399,961 (32,264) (391) 4,248,235
------------------ ----------------- ------------- ------------- ----------------- --------------
NET CHANGE IN UNREALIZED
APPRECIATION
(DEPRECIATION) OF:
SECURITIES............. (10,523,030) 243,198 (2,763,254) 7,261,843 0 (2,357,393)
FOREIGN CURRENCY....... 0 0 0 0 0 0
FINANCIAL FUTURES
CONTRACTS............ 0 0 0 0 0 0
NET CHANGE IN UNREALIZED
APPRECIATION
(DEPRECIATION) OF
INVESTMENTS............ (10,523,030) 243,198 (2,763,254) 7,261,843 0 (2,357,393)
------------------ ----------------- ------------- ------------- ----------------- --------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS......... (6,625,083) (920,911) (363,293) 7,229,579 (391) 1,890,842
------------------ ----------------- ------------- ------------- ----------------- --------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS........ $ (6,025,111) $ (808,847) $ (361,581) $ 7,087,434 $ 1,061,111 $ 1,791,522
------------------ ----------------- ------------- ------------- ----------------- --------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
61
<PAGE>
VARIABLE TRUST STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSET ALLOCATION
FUND
-----------------------------------
(UNAUDITED)
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2000 DECEMBER 31, 1999
<S> <C> <C>
--------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
BEGINNING NET ASSETS..... $ 240,670,990 $ 156,240,933
---------------- ----------------
OPERATIONS:
NET INVESTMENT INCOME
(LOSS)............... 2,934,433 4,046,849
NET REALIZED GAIN
(LOSS) ON SALE OF
INVESTMENTS AND
FOREIGN CURRENCY..... 4,048,345 7,407,467
NET CHANGE IN
UNREALIZED
APPRECIATION
(DEPRECIATION) OF
INVESTMENTS AND
TRANSLATION OF
FOREIGN CURRENCY..... 2,902,474 6,276,920
---------------- ----------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS........ 9,885,252 17,731,236
---------------- ----------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
NET INVESTMENT
INCOME............... (2,986,255) (3,909,839)
NET REALIZED GAIN ON
SALE OF
INVESTMENTS.......... 0 (200,663)
CAPITAL SHARE
TRANSACTIONS:
PROCEEDS FROM SHARES
SOLD................. 17,291,669 71,043,067
REINVESTMENT OF
DIVIDENDS............ 2,986,255 4,579,771
COST OF SHARES
REDEEMED............. (7,112,711) (4,813,515)
---------------- ----------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM CAPITAL SHARE
TRANSACTIONS........... 13,165,213 70,809,323
---------------- ----------------
---------------- ----------------
NET INCREASE (DECREASE)
IN NET ASSETS.......... 20,064,210 84,430,057
---------------- ----------------
NET ASSETS:
ENDING NET ASSETS........ $ 260,735,200 $ 240,670,990
---------------- ----------------
SHARE ISSUED AND REDEEMED:
SHARES SOLD............ 1,187,379 5,092,781
SHARES ISSUED IN
REINVESTMENT OF
DIVIDENDS............ 199,016 329,334
SHARES REDEEMED........ (488,756) (351,542)
---------------- ----------------
NET INCREASE (DECREASE)
IN SHARES
OUTSTANDING............ 897,639 5,070,573
---------------- ----------------
ENDING BALANCE OF
UNDISTRIBUTED
(OVERDISTRIBUTED) NET
INVESTMENT INCOME...... $ 85,188 $ 137,010
---------------- ----------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
62
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS VARIABLE TRUST
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CORPORATE BOND EQUITY INCOME EQUITY VALUE
FUND FUND FUND
-------------------------------------------- ----------------------------------- -----------------
(UNAUDITED) FROM SEPTEMBER 20, 1999 (UNAUDITED) (UNAUDITED)
FOR THE (COMMENCEMENT FOR THE FOR THE FOR THE
SIX MONTHS ENDED OF OPERATIONS) TO SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED
JUNE 30, 2000 DECEMBER 31, 1999 JUNE 30, 2000 DECEMBER 31, 1999 JUNE 30, 2000
<S> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
BEGINNING NET ASSETS..... $ 68,423,018 $ 0 $ 127,793,479 $ 86,068,731 $ 26,567,053
------------------- ----------------- ---------------- ---------------- -----------------
OPERATIONS:
NET INVESTMENT INCOME
(LOSS)............... 2,338,587 1,146,179 599,972 1,272,083 112,064
NET REALIZED GAIN
(LOSS) ON SALE OF
INVESTMENTS AND
FOREIGN CURRENCY..... (1,152,755) (51,484) 3,897,947 1,883,661 (1,164,109)
NET CHANGE IN
UNREALIZED
APPRECIATION
(DEPRECIATION) OF
INVESTMENTS AND
TRANSLATION OF
FOREIGN CURRENCY..... 614,313 (1,174,706) (10,523,030) 3,863,205 243,198
------------------- ----------------- ---------------- ---------------- -----------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS........ 1,800,145 (80,011) (6,025,111) 7,018,949 (808,847)
------------------- ----------------- ---------------- ---------------- -----------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
NET INVESTMENT
INCOME............... (2,338,587) (1,146,189) (570,741) (1,284,267) (112,313)
NET REALIZED GAIN ON
SALE OF
INVESTMENTS.......... 0 0 0 0 0
CAPITAL SHARE
TRANSACTIONS:
PROCEEDS FROM SHARES
SOLD................. 8,398,752 70,873,232 6,699,531 38,101,683 9,534,292
REINVESTMENT OF
DIVIDENDS............ 2,362,957 1,121,820 570,741 1,284,267 112,313
COST OF SHARES
REDEEMED............. (8,243,885) (2,345,834) (21,090,581) (3,395,884) (5,305,241)
------------------- ----------------- ---------------- ---------------- -----------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM CAPITAL SHARE
TRANSACTIONS........... 2,517,824 69,649,218 (13,820,309) 35,990,066 4,341,364
------------------- ----------------- ---------------- ---------------- -----------------
------------------- ----------------- ---------------- ---------------- -----------------
NET INCREASE (DECREASE)
IN NET ASSETS.......... 1,979,382 68,423,018 (20,416,161) 41,724,748 3,420,204
------------------- ----------------- ---------------- ---------------- -----------------
NET ASSETS:
ENDING NET ASSETS........ $ 70,402,400 $ 68,423,018 $ 107,377,318 $ 127,793,479 $ 29,987,257
------------------- ----------------- ---------------- ---------------- -----------------
SHARE ISSUED AND REDEEMED:
SHARES SOLD............ 858,275 7,089,778 408,759 2,229,286 1,041,405
SHARES ISSUED IN
REINVESTMENT OF
DIVIDENDS............ 242,387 113,155 34,947 75,691 12,127
SHARES REDEEMED........ (846,281) (236,247) (1,303,739) (205,745) (588,132)
------------------- ----------------- ---------------- ---------------- -----------------
NET INCREASE (DECREASE)
IN SHARES
OUTSTANDING............ 254,381 6,966,686 (860,033) 2,099,232 465,400
------------------- ----------------- ---------------- ---------------- -----------------
ENDING BALANCE OF
UNDISTRIBUTED
(OVERDISTRIBUTED) NET
INVESTMENT INCOME...... $ 18,058 $ 18,058 $ 29,231 $ 0 $ 4,519
------------------- ----------------- ---------------- ---------------- -----------------
<CAPTION>
EQUITY VALUE
FUND
-----------------
FOR THE
YEAR ENDED
DECEMBER 31, 1999
<S> <C>
-------------------------
INCREASE (DECREASE) IN NE
BEGINNING NET ASSETS..... $ 11,071,528
----------------
OPERATIONS:
NET INVESTMENT INCOME
(LOSS)............... 191,302
NET REALIZED GAIN
(LOSS) ON SALE OF
INVESTMENTS AND
FOREIGN CURRENCY..... (1,551,864)
NET CHANGE IN
UNREALIZED
APPRECIATION
(DEPRECIATION) OF
INVESTMENTS AND
TRANSLATION OF
FOREIGN CURRENCY..... 569,740
----------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS........ (790,822)
----------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
NET INVESTMENT
INCOME............... (186,534)
NET REALIZED GAIN ON
SALE OF
INVESTMENTS.......... 0
CAPITAL SHARE
TRANSACTIONS:
PROCEEDS FROM SHARES
SOLD................. 19,315,350
REINVESTMENT OF
DIVIDENDS............ 213,190
COST OF SHARES
REDEEMED............. (3,055,659)
----------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM CAPITAL SHARE
TRANSACTIONS........... 16,472,881
----------------
----------------
NET INCREASE (DECREASE)
IN NET ASSETS.......... 15,495,525
----------------
NET ASSETS:
ENDING NET ASSETS........ $ 26,567,053
----------------
SHARE ISSUED AND REDEEMED
SHARES SOLD............ 2,010,909
SHARES ISSUED IN
REINVESTMENT OF
DIVIDENDS............ 22,806
SHARES REDEEMED........ (315,799)
----------------
NET INCREASE (DECREASE)
IN SHARES
OUTSTANDING............ 1,717,916
----------------
ENDING BALANCE OF
UNDISTRIBUTED
(OVERDISTRIBUTED) NET
INVESTMENT INCOME...... $ 4,768
----------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
63
<PAGE>
VARIABLE TRUST STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH
FUND
-----------------------------------
(UNAUDITED) FROM MAY 1, 1998
FOR THE (COMMENCEMENT
SIX MONTHS ENDED OF OPERATIONS) TO
JUNE 30, 2000 DECEMBER 31, 1998
<S> <C> <C>
--------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
BEGINNING NET ASSETS..... $ 128,495,431 $ 100,926,722
---------------- -----------------
OPERATIONS:
NET INVESTMENT INCOME
(LOSS)............... 1,712 123,795
NET REALIZED GAIN
(LOSS) ON SALE OF
INVESTMENTS AND
FOREIGN CURRENCY..... 2,399,961 10,638,775
NET CHANGE IN
UNREALIZED
APPRECIATION
(DEPRECIATION) OF
INVESTMENTS AND
TRANSLATION OF
FOREIGN CURRENCY..... (2,763,254) 10,407,812
---------------- -----------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS........ (361,581) 21,170,382
---------------- -----------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
NET INVESTMENT
INCOME............... 0 (143,726)
NET REALIZED GAIN ON
SALE OF
INVESTMENTS.......... 0 0
CAPITAL SHARE
TRANSACTIONS:
PROCEEDS FROM SHARES
SOLD................. 3,585,941 13,327,810
REINVESTMENT OF
DIVIDENDS............ 0 178,395
COST OF SHARES
REDEEMED............. (8,866,539) (6,964,151)
---------------- -----------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM CAPITAL SHARE
TRANSACTIONS........... (5,280,598) 6,542,054
---------------- -----------------
---------------- -----------------
NET INCREASE (DECREASE)
IN NET ASSETS.......... (5,642,179) 27,568,710
---------------- -----------------
NET ASSETS:
ENDING NET ASSETS........ $ 122,853,252 $ 128,495,431
---------------- -----------------
SHARE ISSUED AND REDEEMED:
SHARES SOLD............ 150,368 612,846
SHARES ISSUED IN
REINVESTMENT OF
DIVIDENDS............ 0 8,405
SHARES REDEEMED........ (374,678) (325,078)
---------------- -----------------
NET INCREASE (DECREASE)
IN SHARES
OUTSTANDING............ (224,310) 296,173
---------------- -----------------
ENDING BALANCE OF
UNDISTRIBUTED
(OVERDISTRIBUTED) NET
INVESTMENT INCOME...... $ 1,712 $ 0
---------------- -----------------
</TABLE>
(1) PROCEEDS FROM SHARES SOLD INCLUDES $2,616,673 AND SHARES SOLD INCLUDES
239,403 AS A RESULT OF THE CONSOLIDATION OF THE LIFE & ANNUITY TRUST
STRATEGIC GROWTH FUND.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
64
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS VARIABLE TRUST
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LARGE COMPANY MONEY MARKET
GROWTH FUND FUND
----------------------------------------- ---------------------------------------
(UNAUDITED) FROM SEPTEMBER 20, 1999 (UNAUDITED)
FOR THE (COMMENCEMENT FOR THE FOR THE
SIX MONTHS ENDED OF OPERATIONS) TO SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2000 DECEMBER 31, 1999 JUNE 30, 2000 DECEMBER 31, 1999
<S> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
BEGINNING NET ASSETS..... $ 50,988,017 $ 0 $ 42,163,569 $ 26,318,825
---------------- ----------------- ----------------- --------------------
OPERATIONS:
NET INVESTMENT INCOME
(LOSS)............... (142,145) (55,690) 1,061,502 1,483,105
NET REALIZED GAIN
(LOSS) ON SALE OF
INVESTMENTS AND
FOREIGN CURRENCY..... (32,264) (83,423) (391) 11
NET CHANGE IN
UNREALIZED
APPRECIATION
(DEPRECIATION) OF
INVESTMENTS AND
TRANSLATION OF
FOREIGN CURRENCY..... 7,261,843 8,206,260 0 0
---------------- ----------------- ----------------- --------------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS........ 7,087,434 8,067,147 1,061,111 1,483,116
---------------- ----------------- ----------------- --------------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
NET INVESTMENT
INCOME............... 0 0 (1,061,502) (1,483,116)
NET REALIZED GAIN ON
SALE OF
INVESTMENTS.......... 0 0 0 0
CAPITAL SHARE
TRANSACTIONS:
PROCEEDS FROM SHARES
SOLD................. 36,094,113 44,008,193 26,633,680 49,943,149
REINVESTMENT OF
DIVIDENDS............ 0 0 1,059,716 1,389,785
COST OF SHARES
REDEEMED............. (1,872,548) (1,087,323) (28,060,703) (35,488,190)
---------------- ----------------- ----------------- --------------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM CAPITAL SHARE
TRANSACTIONS........... 34,221,565 42,920,870 (367,307) 15,844,744
---------------- ----------------- ----------------- --------------------
---------------- ----------------- ----------------- --------------------
NET INCREASE (DECREASE)
IN NET ASSETS.......... 41,308,999 50,988,017 (367,698) 15,844,744
---------------- ----------------- ----------------- --------------------
NET ASSETS:
ENDING NET ASSETS........ $ 92,297,016 $ 50,988,017 $ 41,795,871 $ 42,163,569
---------------- ----------------- ----------------- --------------------
SHARE ISSUED AND REDEEMED:
SHARES SOLD............ 2,935,817 4,344,118 26,633,680 49,943,177
SHARES ISSUED IN
REINVESTMENT OF
DIVIDENDS............ 0 0 1,059,716 1,389,786
SHARES REDEEMED........ (148,119) (104,555) (28,060,703) (35,488,190)
---------------- ----------------- ----------------- --------------------
NET INCREASE (DECREASE)
IN SHARES
OUTSTANDING............ 2,787,698 4,239,563 (367,307) 15,844,773
---------------- ----------------- ----------------- --------------------
ENDING BALANCE OF
UNDISTRIBUTED
(OVERDISTRIBUTED) NET
INVESTMENT INCOME...... $ (142,145) $ 0 $ 0 $ 0
---------------- ----------------- ----------------- --------------------
<CAPTION>
SMALL CAP
GROWTH FUND
--------------------------------------
(UNAUDITED)
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2000 DECEMBER 31, 1999(1)
<S> <C> <C>
-------------------------
INCREASE (DECREASE) IN NE
BEGINNING NET ASSETS..... $ 23,818,991 $ 13,294,779
---------------- ----------------
OPERATIONS:
NET INVESTMENT INCOME
(LOSS)............... (99,320) (49,877)
NET REALIZED GAIN
(LOSS) ON SALE OF
INVESTMENTS AND
FOREIGN CURRENCY..... 4,248,235 4,402,871
NET CHANGE IN
UNREALIZED
APPRECIATION
(DEPRECIATION) OF
INVESTMENTS AND
TRANSLATION OF
FOREIGN CURRENCY..... (2,357,393) 5,150,330
---------------- ----------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS........ 1,791,522 9,503,324
---------------- ----------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
NET INVESTMENT
INCOME............... 0 0
NET REALIZED GAIN ON
SALE OF
INVESTMENTS.......... 0 0
CAPITAL SHARE
TRANSACTIONS:
PROCEEDS FROM SHARES
SOLD................. 16,061,845 4,726,759
REINVESTMENT OF
DIVIDENDS............ 0 0
COST OF SHARES
REDEEMED............. (3,844,848) (3,705,871)
---------------- ----------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM CAPITAL SHARE
TRANSACTIONS........... 12,216,997 1,020,888
---------------- ----------------
---------------- ----------------
NET INCREASE (DECREASE)
IN NET ASSETS.......... 14,008,519 10,524,212
---------------- ----------------
NET ASSETS:
ENDING NET ASSETS........ $ 37,827,510 $ 23,818,991
---------------- ----------------
SHARE ISSUED AND REDEEMED
SHARES SOLD............ 818,168 413,588
SHARES ISSUED IN
REINVESTMENT OF
DIVIDENDS............ 0 0
SHARES REDEEMED........ (201,253) (318,587)
---------------- ----------------
NET INCREASE (DECREASE)
IN SHARES
OUTSTANDING............ 616,915 95,001
---------------- ----------------
ENDING BALANCE OF
UNDISTRIBUTED
(OVERDISTRIBUTED) NET
INVESTMENT INCOME...... $ (99,320) $ 0
---------------- ----------------
</TABLE>
(1) PROCEEDS FROM SHARES SOLD INCLUDES $2,616,673 AND SHARES SOLD INCLUDES
239,403 AS A RESULT OF THE CONSOLIDATION OF THE LIFE & ANNUITY TRUST
STRATEGIC GROWTH FUND.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
65
<PAGE>
VARIABLE TRUST FINANCIAL HIGHLIGHTS (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET REALIZED
BEGINNING AND DIVIDENDS DISTRIBUTIONS
NET ASSET NET UNREALIZED FROM NET FROM NET
VALUE PER INVESTMENT GAIN (LOSS) ON INVESTMENT REALIZED
SHARE INCOME INVESTMENTS INCOME GAINS
<S> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------
ASSET ALLOCATION FUND
JANUARY 1, 2000 TO JUNE 30, 2000............. $ 14.42 0.17 0.41 (0.17) 0.00
JANUARY 1, 1999 TO DECEMBER 31, 1999......... $ 13.45 0.27 0.97 (0.26) (0.01)
JANUARY 1, 1998 TO DECEMBER 31, 1998......... $ 11.99 0.34 2.60 (0.34) (1.14)
JANUARY 1, 1997 TO DECEMBER 31, 1997......... $ 11.42 0.60 1.73 (0.60) (1.16)
JANUARY 1, 1996 TO DECEMBER 31, 1996......... $ 11.27 0.56 0.69 (0.56) (0.54)
CORPORATE BOND FUND
---------------------------------------------------------------------------------------------------------------
JANUARY 1, 2000 TO JUNE 30, 2000............. $ 9.82 0.32 (0.07) (0.32) 0.00
SEPTEMBER 20, 1999 (3) TO DECEMBER 31,
1999....................................... $ 10.00 0.16 (0.18) (0.16) 0.00
EQUITY INCOME FUND
---------------------------------------------------------------------------------------------------------------
JANUARY 1, 2000 TO JUNE 30, 2000............. $ 17.09 0.09 (0.86) (0.09) 0.00
JANUARY 1, 1999 TO DECEMBER 31, 1999......... $ 16.00 0.17 1.09 (0.17) 0.00
JANUARY 1, 1998 TO DECEMBER 31, 1998......... $ 13.68 0.18 2.34 (0.18) (0.02)
JANUARY 1, 1997 TO DECEMBER 31, 1997......... $ 10.91 0.14 2.79 (0.14) (0.02)
MAY 6, 1996 (3) TO DECEMBER 31, 1996......... $ 10.00 0.08 0.92 (0.08) (0.01)
EQUITY VALUE FUND
---------------------------------------------------------------------------------------------------------------
JANUARY 1, 2000 TO JUNE 30, 2000............. $ 9.23 0.04 (0.26) (0.04) 0.00
JANUARY 1, 1999 TO DECEMBER 31, 1999......... $ 9.55 0.08 (0.32) (0.08) 0.00
MAY 1, 1998 (3) TO DECEMBER 31, 1998......... $ 10.00 0.07 (0.45) (0.07) 0.00
GROWTH FUND
---------------------------------------------------------------------------------------------------------------
JANUARY 1, 2000 TO JUNE 30, 2000............. $ 24.10 0.00 (0.04) 0.00 0.00
JANUARY 1, 1999 TO DECEMBER 31, 1999......... $ 20.05 0.02 4.06 (0.03) 0.00
JANUARY 1, 1998 TO DECEMBER 31, 1998......... $ 16.79 0.09 4.65 (0.09) (1.39)
JANUARY 1, 1997 TO DECEMBER 31, 1997......... $ 15.34 0.19 2.48 (0.19) (1.03)
JANUARY 1, 1996 TO DECEMBER 31, 1996......... $ 12.91 0.20 2.68 (0.20) (0.25)
LARGE COMPANY GROWTH FUND
---------------------------------------------------------------------------------------------------------------
JANUARY 1, 2000 TO JUNE 30, 2000............. $ 12.03 (0.02) 1.12 0.00 0.00
SEPTEMBER 20, 1999 (3) TO DECEMBER 31,
1999....................................... $ 10.00 (0.01) 2.04 0.00 0.00
MONEY MARKET FUND
---------------------------------------------------------------------------------------------------------------
JANUARY 1, 2000 TO JUNE 30, 2000............. $ 1.00 0.03 0.00 (0.03) 0.00
JANUARY 1, 1999 TO DECEMBER 31, 1999......... $ 1.00 0.04 0.00 (0.04) 0.00
JANUARY 1, 1998 TO DECEMBER 31, 1998......... $ 1.00 0.05 0.00 (0.05) 0.00
JANUARY 1, 1997 TO DECEMBER 31, 1997......... $ 1.00 0.05 0.00 (0.05) 0.00
JANUARY 1, 1996 TO DECEMBER 31, 1996......... $ 1.00 0.05 0.00 (0.05) 0.00
SMALL CAP GROWTH FUND
---------------------------------------------------------------------------------------------------------------
JANUARY 1, 2000 TO JUNE 30, 2000............. $ 18.09 (0.05) 1.52 0.00 0.00
JANUARY 1, 1999 TO DECEMBER 31, 1999......... $ 10.88 (0.04) 7.25 0.00 0.00
JANUARY 1, 1998 TO DECEMBER 31, 1998......... $ 12.77 0.03 (1.89) (0.03) 0.00
JANUARY 1, 1997 TO DECEMBER 31, 1997......... $ 13.50 0.01 1.24 (0.01) (1.59)
JANUARY 1, 1996 TO DECEMBER 31, 1996......... $ 11.21 0.02 3.51 (0.02) (1.22)
</TABLE>
66
<PAGE>
FINANCIAL HIGHLIGHTS (UNAUDITED) VARIABLE TRUST
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ENDING RATIO TO AVERAGE NET ASSETS (ANNUALIZED)
NET ASSET ---------------------------------------------
RETURN OF VALUE PER NET INVESTMENT NET GROSS
CAPITAL SHARE INCOME EXPENSES EXPENSES(1)
<S> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------------
ASSET ALLOCATION FUND
JANUARY 1, 2000 TO JUNE 30, 2000............. 0.00 $ 14.83 2.36% 1.00% 1.12%
JANUARY 1, 1999 TO DECEMBER 31, 1999......... 0.00 $ 14.42 2.05% 0.97% 1.17%
JANUARY 1, 1998 TO DECEMBER 31, 1998......... 0.00 $ 13.45 2.62% 0.92% 1.11%
JANUARY 1, 1997 TO DECEMBER 31, 1997......... 0.00 $ 11.99 5.20% 0.80% 0.85%
JANUARY 1, 1996 TO DECEMBER 31, 1996......... 0.00 $ 11.42 5.34% 0.69% 0.80%
CORPORATE BOND FUND
------------------------------------------------------------------------------------------------------------------
JANUARY 1, 2000 TO JUNE 30, 2000............. 0.00 $ 9.75 6.61% 0.90% 1.25%
SEPTEMBER 20, 1999 (3) TO DECEMBER 31,
1999....................................... 0.00 $ 9.82 5.87% 0.90% 1.25%
EQUITY INCOME FUND
------------------------------------------------------------------------------------------------------------------
JANUARY 1, 2000 TO JUNE 30, 2000............. 0.00 $ 16.23 1.09% 1.00% 1.17%
JANUARY 1, 1999 TO DECEMBER 31, 1999......... 0.00 $ 17.09 1.16% 0.86% 1.12%
JANUARY 1, 1998 TO DECEMBER 31, 1998......... 0.00 $ 16.00 1.47% 0.80% 1.10%
JANUARY 1, 1997 TO DECEMBER 31, 1997......... 0.00 $ 13.68 1.85% 0.80% 1.34%
MAY 6, 1996 (3) TO DECEMBER 31, 1996......... 0.00 $ 10.91 2.31% 0.80% 2.51%
EQUITY VALUE FUND
------------------------------------------------------------------------------------------------------------------
JANUARY 1, 2000 TO JUNE 30, 2000............. 0.00 $ 8.97 0.81% 1.00% 1.56%
JANUARY 1, 1999 TO DECEMBER 31, 1999......... 0.00 $ 9.23 0.96% 1.06% 1.53%
MAY 1, 1998 (3) TO DECEMBER 31, 1998......... 0.00 $ 9.55 1.54% 1.09% 2.52%
GROWTH FUND
------------------------------------------------------------------------------------------------------------------
JANUARY 1, 2000 TO JUNE 30, 2000............. 0.00 $ 24.06 0.00% 1.00% 1.23%
JANUARY 1, 1999 TO DECEMBER 31, 1999......... 0.00 $ 4.10 0.11% 1.07% 1.27%
JANUARY 1, 1998 TO DECEMBER 31, 1998......... 0.00 $ 20.05 0.51% 1.04% 1.18%
JANUARY 1, 1997 TO DECEMBER 31, 1997......... 0.00 $ 16.79 1.19% 0.65% 1.01%
JANUARY 1, 1996 TO DECEMBER 31, 1996......... 0.00 $ 15.34 1.53% 0.60% 1.12%
LARGE COMPANY GROWTH FUND
------------------------------------------------------------------------------------------------------------------
JANUARY 1, 2000 TO JUNE 30, 2000............. 0.00 $ 13.13 (0.38)% 1.00% 1.43%
SEPTEMBER 20, 1999 (3) TO DECEMBER 31,
1999....................................... 0.00 $ 12.03 (0.47)% 1.00% 1.43%
MONEY MARKET FUND
------------------------------------------------------------------------------------------------------------------
JANUARY 1, 2000 TO JUNE 30, 2000............. 0.00 $ 1.00 5.37% 0.85% 0.90%
JANUARY 1, 1999 TO DECEMBER 31, 1999......... 0.00 $ 1.00 4.45% 0.86% 1.07%
JANUARY 1, 1998 TO DECEMBER 31, 1998......... 0.00 $ 1.00 4.62% 0.82% 1.28%
JANUARY 1, 1997 TO DECEMBER 31, 1997......... 0.00 $ 1.00 4.95% 0.53% 1.07%
JANUARY 1, 1996 TO DECEMBER 31, 1996......... 0.00 $ 1.00 4.64% 0.51% 1.22%
SMALL CAP GROWTH FUND
------------------------------------------------------------------------------------------------------------------
JANUARY 1, 2000 TO JUNE 30, 2000............. 0.00 $ 19.56 (0.64)% 1.19% 2.40%
JANUARY 1, 1999 TO DECEMBER 31, 1999......... 0.00 $ 18.09 (0.37)% 0.95% 1.94%
JANUARY 1, 1998 TO DECEMBER 31, 1998......... 0.00 $ 10.88 0.31% 0.80% 1.51%
JANUARY 1, 1997 TO DECEMBER 31, 1997......... (0.38) $ 12.77 0.07% 0.80% 1.88%
JANUARY 1, 1996 TO DECEMBER 31, 1996......... 0.00 $ 13.50 0.16% 0.80% 2.82%
<CAPTION>
PORTFOLIO NET ASSETS AT
TOTAL TURNOVER END OF PERIOD
RETURN(2) RATE (000'S OMITTED)
<S> <C> <C> <C>
---------------------------------------------
ASSET ALLOCATION FUND
JANUARY 1, 2000 TO JUNE 30, 2000............. 4.04% 25% $ 260,735
JANUARY 1, 1999 TO DECEMBER 31, 1999......... 9.33% 30% $ 240,671
JANUARY 1, 1998 TO DECEMBER 31, 1998......... 25.26% 29% $ 156,241
JANUARY 1, 1997 TO DECEMBER 31, 1997......... 20.88% 156% $ 86,506
JANUARY 1, 1996 TO DECEMBER 31, 1996......... 11.46% 4% $ 51,797
CORPORATE BOND FUND
---------------------------------------------
JANUARY 1, 2000 TO JUNE 30, 2000............. 2.60% 65% $ 70,402
SEPTEMBER 20, 1999 (3) TO DECEMBER 31,
1999....................................... (0.16)% 59% $ 68,423
EQUITY INCOME FUND
---------------------------------------------
JANUARY 1, 2000 TO JUNE 30, 2000............. (4.53)% 3% $ 107,377
JANUARY 1, 1999 TO DECEMBER 31, 1999......... 7.90% 5% $ 127,793
JANUARY 1, 1998 TO DECEMBER 31, 1998......... 18.42% 2% $ 86,069
JANUARY 1, 1997 TO DECEMBER 31, 1997......... 26.90% 3% $ 39,888
MAY 6, 1996 (3) TO DECEMBER 31, 1996......... 9.95% 4% $ 9,415
EQUITY VALUE FUND
---------------------------------------------
JANUARY 1, 2000 TO JUNE 30, 2000............. (2.44)% 65% $ 29,987
JANUARY 1, 1999 TO DECEMBER 31, 1999......... (2.48)% 139% $ 26,567
MAY 1, 1998 (3) TO DECEMBER 31, 1998......... (3.76)% 27% $ 11,072
GROWTH FUND
---------------------------------------------
JANUARY 1, 2000 TO JUNE 30, 2000............. (0.17)% 23% $ 122,853
JANUARY 1, 1999 TO DECEMBER 31, 1999......... 20.41% 54% $ 128,495
JANUARY 1, 1998 TO DECEMBER 31, 1998......... 28.81% 69% $ 100,927
JANUARY 1, 1997 TO DECEMBER 31, 1997......... 17.33% 124% $ 71,944
JANUARY 1, 1996 TO DECEMBER 31, 1996......... 22.44% 95% $ 33,381
LARGE COMPANY GROWTH FUND
---------------------------------------------
JANUARY 1, 2000 TO JUNE 30, 2000............. 9.14% 6% $ 92,297
SEPTEMBER 20, 1999 (3) TO DECEMBER 31,
1999....................................... 20.30% 0% $ 50,988
MONEY MARKET FUND
---------------------------------------------
JANUARY 1, 2000 TO JUNE 30, 2000............. 2.69% N/A $ 41,796
JANUARY 1, 1999 TO DECEMBER 31, 1999......... 4.46% N/A $ 42,164
JANUARY 1, 1998 TO DECEMBER 31, 1998......... 4.77% N/A $ 26,319
JANUARY 1, 1997 TO DECEMBER 31, 1997......... 5.04% N/A $ 14,788
JANUARY 1, 1996 TO DECEMBER 31, 1996......... 4.72% N/A $ 12,667
SMALL CAP GROWTH FUND
---------------------------------------------
JANUARY 1, 2000 TO JUNE 30, 2000............. 8.13% 132% $ 37,828
JANUARY 1, 1999 TO DECEMBER 31, 1999......... 66.27% 314% $ 23,819
JANUARY 1, 1998 TO DECEMBER 31, 1998......... (14.47)% 135% $ 13,295
JANUARY 1, 1997 TO DECEMBER 31, 1997......... 9.87% 209% $ 11,482
JANUARY 1, 1996 TO DECEMBER 31, 1996......... 31.47% 195% $ 6,091
</TABLE>
67
<PAGE>
VARIABLE TRUST NOTES TO FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
NOTES TO FINANCIAL HIGHLIGHTS (UNAUDITED)
--------------------------------------------------------------------------------
1 During each period, various fees and expenses were waived and reimbursed. The
ratio of Gross Expenses to Average Net Assets reflects the expense ratio in
the absence of any waivers and reimbursements (Note 9).
2 Total return calculations do not include any sales charges, and would have
been lower had certain expenses not been waived or reimbursed during the
period shown. Total return figures do not reflect charges pursuant to the
terms of the variable life insurance policies and variable annuity contracts
funded by separate accounts that invest in the Fund's shares. Total returns
for periods less than one year are not annualized.
3 Commencement of operations.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
68
<PAGE>
NOTES TO FINANCIAL STATEMENTS VARIABLE TRUST
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
1. ORGANIZATION
Wells Fargo Variable Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end series
management investment company. The Trust consists of eight separate
diversified funds (each, a "Fund", collectively, the "Funds") as of the end of
the reporting period: the Asset Allocation, Corporate Bond, Equity Income,
Equity Value, Growth, Large Company Growth, Money Market, and Small Cap Growth
Funds. The Funds are available exclusively as pooled funding vehicles for
certain participating life insurance companies offering variable annuity
contracts and variable life insurance policies.
2. SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies which are consistently followed
by the Trust in the preparation of its financial statements are in conformity
with generally accepted accounting principles ("GAAP") for investment
companies.
The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities, disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
SECURITY VALUATION
Investments in securities for all Funds, except the Money Market Fund, are
valued each business day as of the close of regular trading on the New York
Stock Exchange which is usually 1:00 p.m. (Pacific Time) 3:00 p.m. (Central
Time). Securities which are traded on a national or foreign securities
exchange or the National Association of Securities Dealers Automated Quotation
("NASDAQ") National Market are valued at the last reported sales price. In the
absence of any sale of such securities, and in the case of other securities,
including U.S. Government obligations, but excluding debt securities maturing
in 60 days or less, the valuations are based on the latest quoted bid prices.
Securities denominated in foreign currencies are translated into U.S. dollars
using the closing rates of exchange in effect on the day of valuation.
Securities for which quotations are not readily available are valued at fair
value as determined by policies set by the Trust's Board of Trustees.
The Money Market Fund values its shares at 9:00 a.m. (Pacific Time) each
business day. The Money Market Fund invests only in securities with remaining
maturities not exceeding 397 days (13 months). Securities held in the Money
Market Fund and debt securities maturing in 60 days or less are valued using
the amortized cost method which involves valuing a security at its cost, plus
accretion of discount or minus amortization of premium over the period until
maturity, which approximates market value. The Money Market Fund seeks to
maintain a constant net asset value of $1.00 per share, although there is no
assurance that it will be able to do so.
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Securities transactions are recorded on a trade date basis. Realized gains or
losses are reported on the basis of identified cost of securities delivered.
Interest income is accrued daily and bond discounts are accreted and premiums
are amortized under provisions of the Internal Revenue Code of 1986, as
amended (the "Code").
Dividend income is recognized on the ex-dividend date, except for certain
dividends from foreign securities, which are recorded as soon as the Fund is
informed of the ex-dividend date. Dividend income from foreign securities is
recorded net of foreign taxes withheld where recovery of such taxes is not
assured.
Foreign currency amounts are translated into U.S. dollars at the mean of the
bid and ask price of such currencies against U.S. dollars as follows:
(i) assets and liabilities at the rate of exchange at the end of the
respective period; and (ii) purchases and sales of securities and income and
expenses at the rate of exchange prevailing on the dates of such transactions.
The portion of the results of operations arising from changes in the exchange
rates and the portion due to fluctuations arising from changes in the market
prices of securities are not isolated. Such fluctuations are included with the
net realized and unrealized gain or loss on investments.
69
<PAGE>
VARIABLE TRUST NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
REPURCHASE AGREEMENTS
Each Fund may invest in repurchase agreements and may participate in pooled
repurchase agreement transactions with other funds advised by Wells Fargo
Bank, N.A. ("WFB"). The repurchase agreements must be fully collateralized
based on values that are marked to market daily. The collateral may be held by
an agent bank under a tri-party agreement. It is the Funds' custodians'
responsibility to value collateral daily and to take action to obtain
additional collateral as necessary to maintain market value equal to or
greater than the resale price. The repurchase agreements held by the Funds are
collateralized by instruments such as U.S. Treasury or federal agency
obligations.
FUTURES CONTRACTS
The Asset Allocation and Equity Value Funds may purchase futures contracts to
gain exposure to market changes, which may be more efficient or cost effective
than actually buying the securities. A futures contract is an agreement
between parties to buy or sell a security at a set price on a future date.
Upon entering into such a contract, a Fund is required to pledge to the broker
an amount of cash, U.S. Government obligations or other high-quality debt
securities equal to the minimum "initial margin" requirements of the exchange
on which the futures contract is traded. Pursuant to the contract, the Fund
agrees to receive from or pay to the broker an amount of cash equal to the
daily fluctuation in the value of the contract. Such receipts or payments are
known as "variation margin" and are recorded by the Fund as unrealized gains
or losses. When the contract is closed, the Fund records a realized gain or
loss equal to the difference between the value of the contract at the time it
was opened and the value at the time it was closed. Pursuant to regulations
and/or published positions of the Securities and Exchange Commission (the
"SEC") for long futures positions, the Fund is required to segregate highly
liquid securities as permitted by the SEC in connection with futures
transactions in an amount generally equal to the entire value of the
underlying contracts. Risks of entering into futures contracts include the
possibility that there may be an illiquid market and that a change in the
value of the contract may not correlate with changes in the value of the
underlying securities. On June 30, 2000, the Asset Allocation Fund held the
following long futures contracts:
<TABLE>
<CAPTION>
Notional Net Unrealized
Contracts Type Expiration Date Contract Value Depreciation
<S> <C> <C> <C> <C>
17 S&P 500 INDEX SEPTEMBER 2000 $6,239,425 $(127,075)
</TABLE>
The Asset Allocation Fund has pledged to brokers U.S. Treasury bills for
initial margin requirements with a par value of $375,000.
FORWARD FOREIGN CURRENCY CONTRACTS
The Funds may enter into forward currency exchange contracts to protect
against a possible loss resulting from an adverse change in the relationship
between foreign currencies and the U.S. dollar, or between foreign currencies.
Risks arise from the possible inability of counterparties to meet the terms of
their contracts and from movements in currency values. At June 30, 2000, the
Corporate Bond Fund had entered into a forward foreign currency contract under
which it is obligated to exchange currencies at a specified future date. The
Fund had an outstanding contract to sell 743,000 EURO and receive $670,669 on
August 14, 2000. Net unrealized depreciation of $(43,302) on this contract is
included in the accompanying financial statements.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends to shareholders from net investment income, if any, for the Growth,
Large Company Growth, and Small Cap Growth Funds are declared and distributed
annually. Dividends to shareholders from net investment income, if any, for
the Asset Allocation, Equity Income, and Equity Value Funds are declared and
distributed quarterly. Dividends to shareholders from net investment income,
if any, for the Corporate Bond and Money Market Funds are declared daily and
distributed monthly. Distributions to shareholders from net realized capital
gains, if any, are declared and distributed at least annually.
Distributions are based on amounts calculated in accordance with the
applicable federal income tax regulations, which may differ from generally
accepted accounting principles. The timing and character of distributions made
during the period from net investment income or net realized gains may also
differ from their ultimate characterization for federal income tax purposes.
The differences between the income or gains distributed on a book versus tax
basis are shown as excess distributions of net investment income and net
realized gain on sales of investments in the accompanying Statements of
Changes in Net Assets. To the
70
<PAGE>
NOTES TO FINANCIAL STATEMENTS VARIABLE TRUST
--------------------------------------------------------------------------------
extent that these differences are permanent in nature, such amounts are
reclassified within the capital accounts based on their federal tax-basis
treatment; temporary differences do not require reclassifications.
FEDERAL INCOME TAXES
Each Fund of the Trust is treated as a separate entity for federal income tax
purposes. It is the policy of each Fund to continue to qualify as a regulated
investment company by complying with the provisions applicable to regulated
investment companies, as defined in the Code, and to make distributions of
substantially all of its investment company taxable income and any net
realized capital gains (after reduction for capital loss carryforwards)
sufficient to relieve it from all, or substantially all, federal income taxes.
Accordingly, no provision for federal income taxes was required at June 30,
2000.
The following Funds had estimated net capital loss carryforwards at June 30,
2000, which are available to offset future net realized capital gains:
<TABLE>
<CAPTION>
Capital Loss
Fund Year Expires Carryforwards
<S> <C> <C>
CORPORATE BOND FUND 2007 $ 34,524
EQUITY VALUE FUND 2006 79,556
2007 1,202,701
</TABLE>
3. ADVISORY FEES
The Trust has entered into separate advisory contracts on behalf of the Funds
with WFB. Pursuant to the contracts, WFB has agreed to provide the following
Funds with daily portfolio management, for which, WFB is entitled to be paid a
monthly advisory fee at the following annual rates:
<TABLE>
<CAPTION>
Fund % of Average Daily Net Assets
<S> <C>
ASSET ALLOCATION FUND 0.55
CORPORATE BOND FUND 0.45
EQUITY INCOME FUND 0.55
EQUITY VALUE FUND 0.55
GROWTH FUND 0.55
LARGE COMPANY GROWTH FUND 0.55
MONEY MARKET FUND 0.40
SMALL CAP GROWTH FUND 0.75
</TABLE>
Prior to September 20, 1999, the predecessor funds for the Asset Allocation,
Equity Value, Growth and Money Market Funds had also retained WFB as
investment advisor. WFB was entitled to a fee from the Money Market Fund at
the annual rate of 0.45% of the Fund's average daily net assets. WFB was
entitled to a fee at the annual rate of 0.60% of the average daily net assets
of the other Funds. The predecessor funds for the Equity Income and and Small
Cap Growth Funds had retained Norwest Investment Management, Inc. ("NIM"),
then a wholly-owned subsidiary of Norwest Bank Minnesota, N.A. (now known as
Wells Fargo Bank Minnesota, N.A. and a wholly-owned subsidiary of Wells Fargo
& Co.) as their investment advisor. NIM was entitled to a fee at the annual
rate of 0.80% of the average daily net assets of each of these respective
Funds. The Corporate Bond and Large Company Growth Funds are new series of the
Trust and did not have predecessor portfolios.
Wells Capital Management Incorporated ("WCM"), a wholly-owned subsidiary of
WFB, acts as investment sub-advisor to the Corporate Bond, Equity Income,
Equity Value, Growth, Money Market, and Small Cap Growth Funds. WCM is
entitled to receive from WFB, as compensation for its sub-advisory services to
the Equity Income, Equity Value, Growth, and Small Cap Growth Funds, a monthly
fee at the annual rate of 0.25% of each Fund's average daily net assets up to
$200 million, 0.20% for the next $200 million and 0.15% of the Fund's average
daily net assets in excess of $400 million. WCM is entitled to receive from
WFB, as compensation for its sub-advisory services to the Corporate Bond Fund,
a monthly fee at the annual rate of 0.15% of the Fund's average daily net
assets up to $400 million, 0.125% for the next $400 million and 0.10% of the
Fund's average daily net assets in excess of $800 million. WCM is entitled to
receive from WFB, as compensation for its sub-advisory services to the Money
Market Fund, a monthly fee at the annual rate of 0.05% of the Fund's average
daily net assets up to $1 billion and 0.04%
71
<PAGE>
VARIABLE TRUST NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
of the Fund's average daily net assets in excess of $1 billion. Prior to
September 20, 1999, the Equity Value, Growth, and Money Market Funds were
charged at the same annual rates.
Barclays Global Fund Advisors ("BGFA"), a wholly-owned subsidiary of Barclays
Global Investors, N.A. ("BGI") and indirect subsidiary of Barclays Bank PLC,
acts as sub-advisor to the Asset Allocation Fund. BGFA is entitled to receive
from WFB, as compensation for its sub-advisory services, a monthly fee at the
annual rate of 0.15% of the Fund's average daily net assets.
Peregrine Capital Management Incorporated ("Peregrine") acts as sub-advisor
to the Large Company Growth Fund. Peregrine is entitled to receive from WFB,
as compensation for its sub-advisory services, a monthly fee at the annual
rate of 0.75% of the Fund's average daily net assets up to $25 million, 0.60%
of the Fund's average daily net assets for the next $25 million, 0.50% of the
Fund's average daily net assets for the next $225 million, and 0.30% of the
Fund's average daily net assets in excess of $275 million.
4. DISTRIBUTION FEES
The Trust has adopted a Distribution Plan ("Plan") for the Funds pursuant to
Rule 12b-1 under the 1940 Act. Distribution fees are charged and paid to
Stephens Inc. ("Stephens") at a rate of 0.25% of the average daily net assets
of each Fund. The distribution fees paid on behalf of the Funds for the period
ended June 30, 2000 are disclosed on the Statement of Operations.
5. ADMINISTRATION FEES
The Trust has entered into an administration agreement on behalf of the Funds
with WFB whereby WFB is entitled to receive monthly fees at the annual rate of
0.15% of each Fund's average daily net assets. Prior to September 20, 1999,
the predecessor Life & Annuity Trust had also retained WFB to provide
administration services to the Asset Allocation, Equity Value, Growth and
Money Market Funds at the rate and under substantially the same terms provided
by the current agreement.
Prior to September 20, 1999, the predecessor Norwest Select Trust had entered
into an administration agreement with Forum Administrative Services, LLC
("FAdS") on behalf of the Equity Income and Small Cap Growth Funds. The Funds
were charged monthly fees at the annual rate of 0.05% of each Fund's average
daily net assets.
6. TRANSFER AGENT FEES
The Trust has entered into a transfer agency agreement on behalf of the Funds
with Boston Financial Data Services ("BFDS"). WFB has been engaged by BFDS to
provide sub-transfer agency services for the Funds.
Prior to September 20, 1999, Norwest provided transfer agency, custody, and
shareholder services for the Equity Income and Small Cap Growth Funds at an
annual rate of 0.08% of the average daily net assets of each Fund. Prior to
September 20, 1999, BFDS provided transfer agency services at the same rates
pursuant to a substantially similar agreement, and prior to July 17, 1999, WFB
provided transfer agency services for the Asset Allocation, Equity Value, and
Growth Funds. WFB was entitled to a fee at an annual rate of 0.14% of the
average daily net assets of each Fund, and for the Money Market Fund, at an
annual rate of 0.10% of the average daily net assets of the Fund.
7. SHAREHOLDER SERVICING FEES
Prior to September 20, 1999, the Asset Allocation, Equity Value, Growth, and
Money Market Funds were charged 0.25% of each Fund's average daily net assets
for shareholder services.
8. OTHER FEES AND TRANSACTIONS WITH AFFILIATES
Forum Accounting Services, LLC ("Forum") provides portfolio accounting
services to the Funds. For these services, Forum is entitled to receive a
fixed monthly per fund fee, a basis point fee of 0.0025% of the average daily
net assets of each Fund, and will be reimbursed for all out-of-pocket expenses
reasonably incurred in providing these services. Prior to September 20, 1999,
the predecessor Life & Annuity Trust entered into contracts on behalf of the
Asset Allocation, Equity Value, Growth, and Money Market Funds with WFB,
whereby WFB was responsible for providing portfolio accounting services for
the Funds. Pursuant to the contract, WFB was entitled to a monthly base fee
from each Fund of $2,000 plus an annual fee of 0.07% of the first $50 million
of each Fund's average daily net assets, 0.045% of the next $50 million, and
0.02% of each Fund's average daily net assets in excess of $100 million. For
the Equity Income and Small Cap Growth Funds, portfolio accounting services
were provided by Forum.
The Trust has entered into contracts on behalf of each Fund (other than the
Asset Allocation Fund, for which BGI serves as custodian) with Wells Fargo
Bank Minnesota, N.A. ("WFB MN"), an affiliated party,
72
<PAGE>
NOTES TO FINANCIAL STATEMENTS VARIABLE TRUST
--------------------------------------------------------------------------------
whereby WFB MN is responsible for providing custody services for the Funds.
Pursuant to the contract, WFB MN is entitled to certain transaction charges
plus a monthly fee for custody services at the annual rate of 0.02% of the
average daily net assets of each Fund. Prior to September 20, 1999, the Equity
Value, Growth, and Money Market Funds had the above services performed by WFB
for a fee at an annual rate of 0.0167% of the average daily net assets of each
Fund. The Equity Income and Small Cap Growth Funds also had WFB MN serve as
the custodian. For its custody services, in addition to shareholder servicing
and transfer agent services, WFB MN was entitled to receive a fee at an annual
rate of 0.08% of the average daily net assets of each Fund.
BGI, a wholly-owned subsidiary of Barclays Global Investors Inc., acts as
custodian to the Asset Allocation Fund. BGI is not entitled to receive
compensation for its custodial services to the Fund so long as BGFA is
entitled to receive compensation for providing investment sub-advisory
services to the Fund. Prior to September 20, 1999, this same arrangement was
in place.
Certain officers of the Trust were also officers of Stephens for a portion of
the period. As of June 30, 2000, Stephens owned 4,220 shares of the Asset
Allocation Fund, 3,579 shares of the Corporate Bond Fund, 10,209 shares of the
Equity Value Fund, 3,120 shares of the Growth Fund, 33,500 shares of the Money
Market Fund, and 16,148 shares of the Small Cap Growth Fund.
9. WAIVED FEES AND REIMBURSED EXPENSES
All amounts shown as waived fees or reimbursed expenses on the Statement of
Operations, for the six months ended June 30, 2000, were waived by WFB or
reimbursed by Stephens.
<TABLE>
<CAPTION>
Expenses Reimbursed Fees Waived
Fund by Stephens by WFB Total Fees Waived
<S> <C> <C> <C>
ASSET ALLOCATION FUND $ 0 $156,226 $156,226
CORPORATE BOND FUND 0 123,107 123,107
EQUITY INCOME FUND 0 95,772 95,772
EQUITY VALUE FUND 0 78,047 78,047
GROWTH FUND 0 141,228 141,228
LARGE COMPANY GROWTH FUND 0 160,901 160,901
MONEY MARKET FUND 0 9,461 9,461
SMALL CAP GROWTH FUND 31,676 156,880 188,556
</TABLE>
10. INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments, exclusive of short-term securities
(securities with maturities of one year or less at purchase date), for each
Fund for the six months ended June 30, 2000, were as follows:
<TABLE>
<CAPTION>
AGGREGATE PURCHASES AND SALES
Fund Purchases at Cost Sales Proceeds
<S> <C> <C>
ASSET ALLOCATION FUND $74,372,446 $61,652,509
CORPORATE BOND FUND 47,855,722 44,702,549
EQUITY INCOME FUND 3,711,924 14,565,139
EQUITY VALUE FUND 21,304,759 17,527,734
GROWTH FUND 28,214,775 30,858,930
LARGE COMPANY GROWTH FUND 38,992,949 4,550,307
SMALL CAP GROWTH FUND 48,837,164 38,112,535
</TABLE>
The Money Market Fund, not reflected in this schedule, trades exclusively in
short-term securities.
11. REORGANIZATION
Concurrent with the establishment of the Trust, the Board of Trustees of the
Life & Annuity Trust ("LAT") and the Board of Trustees of the Norwest Select
Funds ("Select") approved a consolidation agreement providing for the
acquisition of the assets and the assumption of liabilities of certain LAT and
Norwest Select Funds into the Wells Fargo Variable Trust Funds. Effective at
the close of business
73
<PAGE>
VARIABLE TRUST NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
September 17, 1999, the LAT and/or Select Funds were consolidated into the
respective Wells Fargo Variable Trust Funds through an exchange of shares as
follows:
<TABLE>
<CAPTION>
Life & Annuity Trust Fund Norwest Select Fund Wells Fargo Variable Trust Fund
<S> <C> <C>
ASSET ALLOCATION FUND* ASSET ALLOCATION FUND
U.S. GOVERNMENT ALLOCATION FUND INCOME FUND CORPORATE BOND FUND**
INCOME EQUITY FUND* EQUITY INCOME FUND
EQUITY VALUE FUND* EQUITY VALUE FUND
GROWTH FUND* GROWTH FUND
VALUGROWTH STOCK FUND LARGE COMPANY GROWTH FUND**
MONEY MARKET FUND* MONEY MARKET FUND
STRATEGIC GROWTH FUND SMALL COMPANY STOCK FUND* SMALL CAP GROWTH FUND
</TABLE>
*ACCOUNTING SURVIVOR
**NEW FUND (NO ACCOUNTING SURVIVOR)
In the consolidation, the Wells Fargo Variable Trust Small Cap Growth Fund
acquired all of the net assets of the LAT Strategic Growth Fund and Norwest
Select Small Company Stock Fund. The LAT Strategic Growth Fund exchanged its
173,629 shares (valued at $2,616,673) for 239,403 shares of the Wells Fargo
Variable Trust Small Cap Growth Fund. The net assets of the LAT Strategic
Growth Fund included unrealized appreciation of $270,587.
The Wells Fargo Variable Trust Corporate Bond and Large Company Growth Funds
did receive assets from LAT and Select Trust Funds, but have different
investment objectives and other operating differences, and therefore they do
not have an accounting survivor and commenced operations on September 20, 1999
for financial reporting purposes.
74
<PAGE>
VARIABLE TRUST LIST OF ABBREVIATIONS
--------------------------------------------------------------------------------
The following is a list of common abbreviations for terms and entities which may
have appeared in this report.
ABAG -- ASSOCIATION OF BAY AREA GOVERNMENTS
ADR -- AMERICAN DEPOSITORY RECEIPTS
AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE CORPORATION
AMT -- ALTERNATIVE MINIMUM TAX
ARM -- ADJUSTABLE RATE MORTGAGES
BART -- BAY AREA RAPID TRANSIT
CDA -- COMMUNITY DEVELOPMENT AUTHORITY
CDSC -- CONTINGENT DEFERRED SALES CHARGE
CGIC -- CAPITAL GUARANTY INSURANCE COMPANY
CGY -- CAPITAL GUARANTY CORPORATION
CMT -- CONSTANT MATURITY TREASURY
COFI -- COST OF FUNDS INDEX
CONNIE LEE -- CONNIE LEE INSURANCE COMPANY
COP -- CERTIFICATE OF PARTICIPATION
CP -- COMMERCIAL PAPER
CTF -- COMMON TRUST FUND
DW&P -- DEPARTMENT OF WATER & POWER
DWR -- DEPARTMENT OF WATER RESOURCES
EDFA -- EDUCATION FINANCE AUTHORITY
FGIC -- FINANCIAL GUARANTY INSURANCE CORPORATION
FHA -- FEDERAL HOUSING AUTHORITY
FHLB -- FEDERAL HOME LOAN BANK
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
FRN -- FLOATING RATE NOTES
FSA -- FINANCIAL SECURITY ASSURANCE, INC
GNMA -- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
GO -- GENERAL OBLIGATION
HFA -- HOUSING FINANCE AUTHORITY
HFFA -- HEALTH FACILITIES FINANCING AUTHORITY
IDA -- INDUSTRIAL DEVELOPMENT AUTHORITY
LIBOR -- LONDON INTERBANK OFFERED RATE
LLC -- LIMITED LIABILITY CORPORATION
LOC -- LETTER OF CREDIT
LP -- LIMITED PARTNERSHIP
MBIA -- MUNICIPAL BOND INSURANCE ASSOCIATION
MFHR -- MULTI-FAMILY HOUSING REVENUE
MUD -- MUNICIPAL UTILITY DISTRICT
MTN -- MEDIUM TERM NOTE
PCFA -- POLLUTION CONTROL FINANCE AUTHORITY
PCR -- POLLUTION CONTROL REVENUE
PFA -- PUBLIC FINANCE AUTHORITY
PLC -- PRIVATE PLACEMENT
PSFG -- PUBLIC SCHOOL FUND GUARANTY
RAW -- REVENUE ANTICIPATION WARRANTS
RDA -- REDEVELOPMENT AUTHORITY
RDFA -- REDEVELOPMENT FINANCE AUTHORITY
R&D -- RESEARCH & DEVELOPMENT
SFMR -- SINGLE FAMILY MORTGAGE REVENUE
TBA -- TO BE ANNOUNCED
TRAN -- TAX REVENUE ANTICIPATION NOTES
USD -- UNIFIED SCHOOL DISTRICT
V/R -- VARIABLE RATE
WEBS -- WORLD EQUITY BENCHMARK SHARES
75
<PAGE>
Wells Fargo Bank, N.A. and certain of its affiliates provide investment
advisory, sub-advisory and/or shareholder services for the Wells Fargo
Variable Trust Funds. The Funds are sponsored and distributed by STEPHENS
INC., Member NYSE/SIPC. Wells Fargo Bank, N.A. and its affiliates are not
affiliated with Stephens Inc.
This report and the financial statements contained herein are submitted for
the general information of the shareholders of the Wells Fargo Variable
Trust Funds. If this report is used for promotional purposes, distribution
of the report must be accompanied or preceded by a current prospectus. For a
prospectus containing more complete information, including charges and
expenses, call 1-800-222-8222. Read the prospectus carefully before you
invest or send money.
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